DEF 14A 1 d117579ddef14a.htm DEF 14A DEF 14A
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

 

 

Filed by the Registrant                                            Filed by a Party other than the Registrant  

Check the appropriate box:

 

  Preliminary Proxy Statement
  Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
  Definitive Proxy Statement
  Definitive Additional Materials
  Soliciting Material Pursuant to § 240.14a-12

IHS MARKIT LTD.

(Name of Registrant as Specified in its Charter)

        

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

  No fee required.
  Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
  (1)  

Title of each class of securities to which transaction applies:

 

     

  (2)  

Aggregate number of securities to which transaction applies:

 

     

  (3)  

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

 

     

  (4)  

Proposed maximum aggregate value of transaction:

 

     

  (5)  

Total fee paid:

 

     

  Fee paid previously with preliminary materials.
  Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
  (1)  

Amount Previously Paid:

 

     

  (2)  

Form, Schedule or Registration Statement No.

 

     

  (3)  

Filing Party:

 

     

  (4)  

Date Filed:

 

     

 

 

 


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LOGO  

March 25, 2021

 

Dear IHS Markit Shareholder:

 

I am pleased to invite you to attend the 2021 Annual General Meeting of Shareholders of IHS Markit Ltd., which will be conducted as a virtual meeting on Wednesday, May 5, 2021, at 9:00 a.m. Eastern Time (2:00 p.m. BST).

 

The enclosed notice of the meeting and proxy statement describe the business that we will conduct at the meeting and the proposals that the shareholders of IHS Markit will consider and vote upon. IHS Markit’s audited consolidated financial statements for the year ended November 30, 2020 and the auditor’s report thereon will be available to shareholders at the meeting.

 

Each shareholder of record has the opportunity to vote at the meeting. Whether or not you plan to attend, it is important that your shares be represented and voted at the meeting. If you have elected to receive your proxy materials by mail, please date, sign and return the proxy card. If you received your proxy materials over the internet, please submit your voting instructions by internet or by telephone in accordance with the instructions provided in the notice of internet availability of proxy materials that you received in the mail. If your shares are held in the name of a bank or broker, submitting your voting instructions by mail, telephone, or internet will depend on the processes of the bank or broker, and you should follow the instructions you receive from your bank or broker.

 

Returning the proxy card or otherwise submitting your proxy does not deprive you of your right to attend the meeting and vote. If you decide to attend the meeting, you will be able to revoke your proxy and vote. Any signed proxy returned and not completed will be voted by management in favor of all proposals presented in the proxy statement.

 

Remember that your shares cannot be voted unless you submit your proxy or attend the meeting. Your participation is important to all of us at IHS Markit, so please review these materials carefully and submit your voting instructions.

 

We look forward to hearing from you.

 

Sincerely,

 

 

LOGO

 

Lance Uggla

Chairman and Chief Executive Officer

 

 


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Notice of Annual General Meeting of Shareholders

 

 

NOTICE IS HEREBY given that the Annual General Meeting of Shareholders (the “Annual Meeting”) of IHS Markit Ltd. (“IHS Markit” or the “Company”) will be held on May 5, 2021 beginning at 9:00 a.m. Eastern Time (2:00 p.m. BST).

In light of the ongoing coronavirus (COVID-19) pandemic, the Annual Meeting will not be held at a physical meeting location but will be conducted as a virtual meeting via the internet at www.virtualshareholdermeeting.com/INFO2021AGM.

The Company is holding this Annual Meeting for the following purposes:

 

1.

To elect a total of thirteen (13) directors to serve until the next Annual General Meeting of Shareholders or until their respective offices shall otherwise be vacated pursuant to the Company’s bye-laws;

 

2.

To approve, on an advisory, non-binding basis, the compensation of the Company’s named executive officers;

 

3.

To approve the appointment of Ernst & Young LLP as the Company’s independent registered public accountants until the close of the next Annual General Meeting of Shareholders and to authorize the Company’s Board of Directors, acting by the Audit Committee, to determine the remuneration of the independent registered public accountants; and

 

4.

To transact such other business as may properly come before the Annual Meeting or any adjournment thereof.

The Company’s audited consolidated financial statements for the year ended November 30, 2020, together with the auditor’s report thereon, will be presented at the Annual Meeting.

IHS Markit’s Board of Directors has fixed the close of business on March 9, 2021 as the record date (the “Record Date”) for the determination of the shareholders entitled to receive notice and to vote at the Annual Meeting or any adjournment or postponement thereof.

The Annual Meeting is open to all shareholders of record or their authorized representatives. A complete list of IHS Markit shareholders entitled to vote at the Annual Meeting will be available for examination by any shareholder at IHS Markit’s headquarters at 4th Floor, Ropemaker Place, 25 Ropemaker Street, London EC2Y 9LY, England, during ordinary business hours for a period of ten days before the Annual Meeting, and the list will be available on the website during the Annual Meeting. If IHS Markit’s offices are closed for health and safety reasons related to the ongoing COVID-19 pandemic during such period, the list of shareholders will be made available for inspection upon request to the Company Secretary, subject to satisfactory verification of shareholder status.

To arrange to review the list of shareholders, contact

Company Secretary, c/o Legal Department, IHS Markit Ltd., 4th Floor,

Ropemaker Place, 25 Ropemaker Street, London EC2Y 9LY, United Kingdom,

or by email to CompanySecretary@ihsmarkit.com.

Submitting voting instructions by proxy will not limit your rights to attend or vote at the Annual Meeting. Even if you plan to attend the Annual Meeting, we hope that you will promptly provide your voting instructions by submitting your proxy by mail or by submitting your voting instructions by telephone or internet, or, if you hold your shares in the name of a bank or broker, by following the instructions you receive from your bank or broker. Returning the proxy card or otherwise submitting your proxy does not deprive you of your right to attend the meeting and vote. If you decide to attend the meeting, you will be able to revoke your proxy and vote. Any signed proxy returned and not completed will be voted by management in favor of all proposals presented in the proxy statement.

 

 


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Important notice regarding the availability of proxy materials for the Annual Meeting to be held on May 5, 2021: The Proxy Statement and our 2020 Annual Report for the year ended November 30, 2020 are available without charge at www.proxyvote.com.

Sincerely,

 

 

LOGO

Christopher McLoughlin

Secretary

 

 


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Information concerning Proxy Solicitation and Voting      1  
Appointment of Proxy Holders     3  
Who Can Vote     3  
How You Can Vote     4  
Revocation of Proxies     4  
Quorum     5  
Required Vote     5  
Solicitation of Proxies     5  
Multiple Shareholders Sharing the Same Mailing Address     6  
Available Information     6  
Important Reminder     6  
Proposal 1: Election of Directors     7  
2021 Nominees for Director     8  
Vote Required and Recommendation     10  
Corporate Governance and Board of Directors     11  
Board Leadership Structure     11  
The Role of the Board of Directors in Risk Oversight     11  
Shareholder Engagement     12  
Business Experience and Qualifications of Board Members     14  
Board Diversity     27  
Board Experience     28  
Organization of the Board of Directors     29  
Board Committees and Their Composition     33  
Board Refreshment, Board Composition, Diversity, and Director Nominations     37  
Communications with the Board     38  
Corporate Sustainability     38  
Director Compensation     39  
Proposal 2: Vote to Approve the Compensation
of our Named Executive Officers
    43  
Vote Required and Recommendation     45  
Report of the Human Resources Committee.     46  
Compensation Discussion and Analysis     47  
Shareholder Considerations at a Glance     47  
Overview     49  
Financial Performance and Compensation in 2020     50  
Leadership Structure     53  
Shareholder Engagement on Compensation Practices     54  
Compensation Governance Practices     55  
2020 Executive Compensation Philosophy     59  
2020 Executive Compensation Design and Actions     60  
Compensation Benchmarking for 2020     61  
Target Setting Process     62  

 

 

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Total Pay Mix     63  
Base Salary     63  
Cash Incentive Plan     65  
Long-Term Incentive Awards     68  
Long-Term Incentive Awards Granted in 2020     74  
Benefits and Perquisites     76  
2021 Executive Compensation Design     77  
Compensation Benchmarking for 2021     78  
Total Pay Mix     79  
Role of Management, HR Committee and Independent Compensation Consultant     79  
Employment Contracts, Termination of Employment Arrangements, and Change in Control Arrangements     80  
Compensation and Risk     80  
Accounting and Tax Treatment     81  
Definitions of Non-GAAP Financial Measures     81  
Compensation Committee Interlocks and Insider Participation     81  
Executive Compensation Tables     82  
2020 Summary Compensation Table     83  
2020 Grants of Plan-Based Awards     87  
Outstanding Equity Awards at 2020 Fiscal Year-End     89  
Option Exercises and Stock Vested During 2020     92  
Pension Benefits     93  
Executive Employment Agreements     95  
Lance Uggla     96  
Todd Hyatt     98  
Jonathan Gear     98  
Adam Kansler     100  
Sari Granat     102  
Brian Crotty     104  
Agreements and Amendments Relating to Planned Merger With S&P Global     106  
Potential Payments upon Termination or Change in Control      107  
CEO Pay Ratio      114  
Proposal 3: Approval of the Appointment of Independent
Registered Public Accountants
    115  
Audit, Audit-Related, Tax and All Other Fees     116  
Audit Committee Pre-Approval Policies and Procedures     117  
Vote Required and Recommendation     118  
Report of the Audit Committee      119  

 

 

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London, England, March 25, 2021

IHS Markit Ltd.

Proxy Statement for

Annual General Meeting of Shareholders

to be held on May 5, 2021

Information concerning Proxy Solicitation and Voting

This Proxy Statement is being furnished to you in connection with the solicitation by the Board of Directors of IHS Markit Ltd., a Bermuda exempted company, of proxies for the 2021 Annual General Meeting of Shareholders (the “Annual Meeting”) and any adjournments or postponements thereof.

The Annual Meeting will be held on

Wednesday May 5, 2021, at 9:00 a.m. Eastern Time (2:00 p.m. BST).

The meeting will be conducted as a virtual meeting via the internet. Shareholders may attend the meeting via live webcast by visiting the virtual meeting platform at www.virtualshareholdermeeting.com/INFO2021AGM. Shareholders will need the 16-digit control number included in Notice of Internet Availability of Proxy Materials, on the proxy card or voting instruction form, or in the instructions that accompanied the proxy materials to enter the Annual Meeting. Shareholders may log into the virtual meeting platform beginning at 8:45 a.m. Eastern Time (1:45 p.m. BST) on May 5, 2021. We will have technicians ready to assist you with any technical difficulties you may have accessing the virtual meeting. If you encounter any difficulties accessing the virtual meeting during check-in or the meeting, please call the technical support number that will be posted on the virtual meeting platform log-in page. Shareholders may vote and ask questions during the meeting.

This Proxy Statement, the accompanying Proxy Card, and the IHS Markit 2020 Annual Report (the “Annual Report”) which includes our annual report on Form 10-K filed with the SEC on January 22, 2021, are being first sent to shareholders on or about March 25, 2021. We are providing notice and electronic access to our proxy materials to our shareholders. The notice will be mailed on or about March 25, 2021.

The notice contains instructions regarding how to access and review our proxy materials over the internet or receive a hard copy. The notice also provides instructions regarding how to submit a proxy over the internet. We believe that this process allows us to provide shareholders with important information in a timely manner, while reducing the environmental impact and lowering the costs of printing and distributing our proxy materials.

 

 

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On November 29, 2020, we, S&P Global Inc., a New York corporation (“S&P Global”), and Sapphire Subsidiary, Ltd., a Bermuda exempted company limited by shares and a wholly-owned subsidiary of S&P Global (“Merger Sub”), entered into an agreement and plan of merger, which was subsequently amended on January 20, 2021, pursuant to which Merger Sub will merge with and into IHS Markit, with IHS Markit surviving such merger as a wholly-owned, direct subsidiary of S&P Global (the “merger”). The merger intends to bring together two world-class organizations, a unique portfolio of highly complementary assets in attractive markets, and cutting-edge innovation and technology capability to accelerate growth and enhance value creation. If the merger is completed, IHS Markit shares will cease to be listed on the New York Stock Exchange and IHS Markit shares will be deregistered under the Securities Exchange Act. The merger was approved by IHS Markit and S&P Global shareholders on March 11, 2021. The merger remains subject to antitrust and regulatory approvals, and other customary closing conditions.

On July 12, 2016, we completed a merger between IHS Inc. (“IHS”), Markit Ltd. (“Markit”), and Marvel Merger Sub, Inc., an indirect and wholly owned subsidiary of Markit Ltd. (the “2016 merger”). Upon completion of the 2016 merger, Markit Ltd. became the public combined group holding company and was renamed IHS Markit Ltd. References in this Proxy Statement to “we,” “us,” “our,” the “Company,” and “IHS Markit” refer to IHS Markit Ltd. and our consolidated subsidiaries.

We operate on a November 30 fiscal year-end. Unless otherwise indicated, references in this Proxy Statement to an individual year mean the fiscal year ended November 30. For example, “2020” refers to the fiscal year ended November 30, 2020 and “2019” refers to the fiscal year ended November 30, 2019.

 

 

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Appointment of Proxy Holders

The Board of Directors of IHS Markit (the “Board of Directors” or “Board”) asks you to appoint the following individuals as your proxy holders to vote your shares at the Annual Meeting:

Lance Uggla

Chairman and Chief Executive Officer

Jonathan Gear

Executive Vice President and Chief Financial Officer

Sari Granat

Executive Vice President, Chief Administrative Officer and General Counsel

Christopher McLoughlin

Senior Vice President and Company Secretary

If appointed by you, the proxy holders will vote your shares as you direct on the matters described in this Proxy Statement, and in the absence of your direction, they will vote your shares as recommended by the Board.

Unless you otherwise indicate on the Proxy Card, you also authorize your proxy holders to vote your shares on any matters not known by the Board at the time this Proxy Statement was printed and that, under our amended and restated bye-laws (“bye-laws”), may be properly presented for action at the Annual Meeting.

Who Can Vote

Only shareholders who owned our common shares at the close of business on March 9, 2021—the Record Date for the Annual Meeting—can vote at the Annual Meeting.

Each holder of our common shares is entitled to one vote for each share held as of the Record Date. As of the close of business on the Record Date, we had 423,744,233 common shares issued and outstanding and entitled to vote, including 25,219,470 issued and outstanding common shares held by the Markit Group Holdings Limited Employee Benefit Trust (the “EBT”). The trustee of the EBT may not vote any common shares held by the EBT unless we direct otherwise. We intend to direct the EBT to vote the common shares held by the EBT on each proposal at the Annual Meeting in accordance with the percentages voted by other holders of common shares on such proposal.

If your shares are registered in your name in the records maintained by our share transfer agent, you are a “Shareholder of Record.” If you are a Shareholder of Record, notice of the meeting was sent directly to you.

If your shares are held in the name of your bank, broker, nominee or other holder of record, your shares are held in “street name” and you are considered the “Beneficial Owner.” Notice of the meeting has been forwarded to you by your bank, broker, nominee or other holder of record, who is considered, with respect to those shares, the Shareholder of Record. As the Beneficial Owner, you have the right to direct your bank, broker, nominee or other holder of record how to vote your shares by using the voting instructions you received.

Our common shares are listed on the New York Stock Exchange (the “NYSE”) under the symbol “INFO.”

 

 

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How You Can Vote

The common shares represented by any proxy in the enclosed form will be voted in accordance with the instructions given on the proxy if the proxy is properly executed and is received by us prior to the close of voting at the Annual Meeting or any adjournment or postponement thereof. Any signed proxies returned without instructions will be voted FOR the proposals set forth in the Notice of Annual General Meeting of Shareholders.

Even if you plan on attending the Annual Meeting, please submit your voting instructions as soon as possible before the meeting by:

 

LOGO        Internet: Go to www.proxyvote.com. Use the internet to transmit your voting instructions and for electronic delivery of the information up until 11:59 p.m. Eastern Time on May 4, 2021. Have your proxy card in hand when you access the website and follow the instructions to obtain your records and to create an electronic voting instruction form.
LOGO        Phone: Call +1-800-690-6903 (toll free) using any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time on May 4, 2021. Have your proxy card in hand when you call and follow the instructions.
LOGO        Mail: Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717 to be received no later than May 3, 2021.

Additionally you may vote over the internet during the Annual Meeting by attending the Annual Meeting through www.virtualshareholdermeeting.com/INFO2021AGM and using your 16-digit control number (included on the Notice of Internet Availability of Proxy Materials, on your proxy card or voting instruction form or in the instructions that accompanied your proxy materials).

The telephone and internet voting procedures have been set up for your convenience. The procedures have been designed to authenticate your identity, to allow you to give voting instructions, and to confirm that those instructions have been recorded properly.

If you are a Beneficial Owner of shares held in “street name,” you must vote your shares in the manner prescribed by your bank, broker or other nominee. Your bank, broker or other nominee has provided notice by email or a printed voting instruction card for you to use in directing the bank, broker or nominee how to vote your shares. Telephone and internet voting are also encouraged for Beneficial Owners who hold their shares in street name.

Your vote is important. Whether or not you plan to attend the Annual Meeting, we urge you to vote your shares in time for our May 5, 2021 meeting date.

Revocation of Proxies

A shareholder giving a proxy may revoke it at any time before it is exercised. A proxy may be revoked by:

 

i.

filing with the Secretary of the Company prior to the Annual Meeting a written notice of revocation by mail to IHS Markit Ltd., Attention: Company Secretary, c/o Legal Department, IHS Markit Ltd., 4th Floor, Ropemaker Place, 25 Ropemaker Street, London EC2Y 9LY, United Kingdom;

 

ii.

submitting a duly executed proxy bearing a later date that we receive prior to the conclusion of voting at the Annual Meeting;

 

iii.

logging onto www.proxyvote.com in the same manner you would to submit your proxy electronically or calling 1-800-690-6903, and in either case following the instructions to revoke or change your voting instructions; or

 

 

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iv.

participating in the Annual Meeting and voting your shares electronically during the Annual Meeting. Participation in the Annual Meeting will not cause your previously granted proxy to be revoked unless you vote again at the meeting.

Quorum

Two or more persons present at the start of the Annual Meeting and representing, virtually or by proxy, in excess of 50 percent of the total issued common shares in the Company entitled to vote at the Annual Meeting (including the common shares held by the EBT) shall form a quorum for the transaction of business at the Annual Meeting.

If you indicate an abstention as your voting preference, your shares will be counted toward a quorum but they will not be counted as being voted on any given proposal (see “—Required Vote” below). “Broker non-votes” (see “—Required Vote” below) will be counted as common shares that are present for the purpose of determining the presence of a quorum but will have no effect with respect to any matter for which a broker does not have authority to vote.

Required Vote

For Proposal 1, the election of our directors, each person receiving a majority of the votes cast (the number of shares voted “for” a director must exceed the number of shares voted “against” that director) will be elected as a Director. You may instruct to vote “for” or “against,” or “abstain” from voting for each of the nominees to become a director. If you “abstain” from voting with respect to the proposal, your vote is not considered a vote cast and will have no effect for such proposal.

For Proposal 2, vote on the compensation of the Company’s named executive officers, the affirmative vote of a majority of the votes cast on the issue, either virtually or by proxy, will be required to approve. You may instruct to vote “for” or “against,” or “abstain” from voting on the proposal. If you “abstain” from voting with respect to the proposal, your vote is not considered a vote cast and will have no effect for such proposal.

For Proposal 3, approval of the appointment of our independent registered public accountants, the affirmative vote of a majority of the votes cast on the issue, either virtually or by proxy, will be required to approve. You may instruct to vote “for” or “against,” or “abstain” from voting on the proposal. If you “abstain” from voting with respect to the proposal, your vote is not considered a vote cast and will have no effect for such proposal.

If you are a Beneficial Owner and you do not give instructions to the bank, broker or other nominee holding your shares then that organization cannot vote your shares on “non-routine” matters. In those cases, if you do not provide your bank, broker or other nominee with instructions on how to vote your shares, it will be considered a “broker non-vote” and your broker or nominee will not be permitted to vote those shares. Your broker or nominee will be entitled to cast uninstructed votes only on Proposal 3, the approval of the appointment of our independent registered public accountants.

We encourage you to provide instructions to your bank, broker or other nominee regarding the voting of your shares.

Solicitation of Proxies

We will pay the expenses of soliciting proxies. Proxies may be solicited in person or by mail, telephone, and electronic transmission on our behalf by directors, officers, or employees of IHS Markit or its subsidiaries, without additional compensation. We will reimburse brokerage houses and other custodians, nominees, and fiduciaries that are requested to forward soliciting materials to the beneficial owners of the common shares held of record by such persons.

 

 

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Multiple Shareholders Sharing the Same Mailing Address

Multiple IHS Markit shareholders who share an address may receive only one copy of this Proxy Statement and the Annual Report, unless the shareholder gives instructions to the contrary. This delivery method, called “householding,” will not be used if we receive contrary instructions from one or more of the shareholders sharing a mailing address. We will deliver promptly a separate copy of this Proxy Statement and the Annual Report to any IHS Markit shareholder who resides at a shared address and to which a single copy of the documents was delivered if the shareholder makes a request by contacting the Company Secretary, c/o Legal Department, IHS Markit Ltd., 4th Floor, Ropemaker Place, 25 Ropemaker Street, London EC2Y 9LY, United Kingdom, or by telephone at +44 207 260 200 or by email at CompanySecretary@ihsmarkit.com.

If your household has received multiple copies of the Annual Report and Proxy Statement, you can request the delivery of single copies in the future by marking the designated box on the attached proxy card.

If you own common shares through a bank, broker, or other nominee and receive more than one Annual Report and Proxy Statement, contact the holder of record to eliminate duplicate mailings.

Available Information

IHS Markit makes available free of charge through its website at http://investor.ihsmarkit.com, its Annual Reports to Shareholders, Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Proxy Statements, and all amendments to these reports no later than the day on which such materials are first sent to shareholders or made public. IHS Markit will provide, without charge to each shareholder upon written request, a copy of IHS Markit’s Annual Reports to Shareholders, Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Proxy Statements, and all amendments to those reports. Written requests for copies should be addressed to the Company Secretary, c/o Legal Department, IHS Markit Ltd., 4th Floor, Ropemaker Place, 25 Ropemaker Street, London EC2Y 9LY, United Kingdom. Requests may also be directed via email to CompanySecretary@ihsmarkit.com. Copies may also be accessed electronically by means of the U.S. Securities and Exchange Commission’s (“SEC”) homepage on the internet at www.sec.gov.

The reports and other information contained on websites referred to in this Proxy Statement (other than to the extent specifically referred to herein as required by the rules of the NYSE or the SEC) are not part of this proxy solicitation and are not incorporated by reference into this Proxy Statement or any other proxy materials.

 

 

Important Reminder

 

Please promptly provide your voting instructions by submitting your proxy in writing or by telephone or internet, or if you hold your common shares through a bank or broker, as instructed by your bank or broker.

 

To submit written voting instructions, you may sign, date, and return the enclosed Proxy Card. To submit voting instructions telephonically or by internet, follow the instructions provided on the Proxy Card.

 

Submitting voting instructions by proxy will not limit your rights to attend or vote at the Annual Meeting.

 

 

 

 

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Proposal 1: Election of Directors

 

 

2021 Nominees for Director

Each director’s term in office expires at the Annual Meeting.

The Board has approved for nomination the following thirteen (13) directors to be elected at the Annual Meeting.

These directors will hold office until the annual general meeting of shareholders in 2022, or until their respective offices shall otherwise be vacated pursuant to the Company’s bye-laws.

 

  

 

     

 

   Age      Director since

 

LOGO

 

   Lance Uggla (Chairman and Chief Executive Officer)    59      2003

 

LOGO

 

   John Browne (The Lord Browne of Madingley)    73      2018

 

LOGO

 

   Dinyar S. Devitre    74      2012

 

LOGO

 

   Ruann F. Ernst    74      2006

 

LOGO

 

   Jacques Esculier    61      2020

 

LOGO

 

   Gay Huey Evans    66      2020

 

LOGO

 

   William E. Ford    59      2014

 

 

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LOGO

 

   Nicoletta Giadrossi    54      2018

 

LOGO

 

   Robert P. Kelly    67      2012

 

LOGO

 

   Deborah Doyle McWhinney    66      2015

 

LOGO

 

   Jean-Paul L. Montupet    73      2012

 

LOGO

 

   Deborah K. Orida    54      2019

 

LOGO

 

   James A. Rosenthal    67      2013

Mr. Esculier and Ms. Evans are new nominees for election to the Board this year. Mr. Esculier was originally recommended to the Nominating and Governance Committee by an independent member of the Board and appointed to the Board as of April 16, 2020. Ms. Evans was originally recommended to the Nominating and Governance Committee by an independent member of the Board and appointed to the Board as of August 21, 2020.

Ms. Orida was originally nominated to the Board by Canada Pension Plan Investment Board (“CPPIB”), one of our shareholders, pursuant to its right to nominate one director for appointment to our Board of Directors under a director nomination agreement with us and appointed to the Board on October 17, 2019. Please see “Corporate Governance and Board of Directors–Organization of the Board of Directors–Director Nomination Agreement” for more information about our director nomination agreement with CPPIB.

Each director nominee set forth above has consented to being named in this Proxy Statement as a nominee for election as director and has agreed to serve as a director if elected. In the event that any of the nominees should become unavailable prior to the Annual Meeting, proxies in the enclosed form will be voted for a substitute nominee or nominees designated by the Board, or the Board may reduce the number of directors to constitute the entire Board, in its discretion. For more information about each director nominee, our continuing directors, and the operation of our Board, see “Corporate Governance and Board of Directors.”

 

 

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Our bye-laws require directors to be elected by a majority of the votes cast with respect to each director in uncontested elections. Under Bermuda law and our bye-laws, any incumbent director who fails to be re-elected may not continue to sit on the Board after their term in office has expired and their position on the Board is left vacant. If any director positions are left vacant following a general meeting, the Board may reduce its size or, if authorized by our shareholders, may fill such vacant positions. Our shareholders have not authorized the Board to fill positions on the Board left vacant following a general meeting of shareholders. Under the Board’s corporate governance guidelines, any director who fails to receive a majority of votes cast must provide an acknowledgement to the Company that his or her term has expired and his or her office as a director has become vacant.

Vote Required and Recommendation

For Proposal 1, directors are elected by a majority vote, which means that each person receiving the affirmative vote of a majority of the votes cast (the number of shares voted “for” a director must exceed the number of shares voted “against” that director) will be elected as a Director.

You may instruct to vote “FOR” or “AGAINST,” or “ABSTAIN” from voting for each of the nominees to become a director. If you “abstain” from voting with respect to the proposal, your vote is not considered a vote cast and will have no effect for such proposal. If you do not provide your broker or other nominee with instructions on how to vote your shares with respect to Proposal 1, your broker or nominee will not be entitled to cast votes and a “broker non-vote” on Proposal 1 will result. “Broker non-votes” are not considered votes cast and will have no effect on the vote for this proposal.

 

 

THE BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” THE ELECTION OF THESE NOMINEES TO SERVE AS DIRECTORS

 

 

 

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Corporate Governance and Board of Directors

 

 

Board Leadership Structure

The Board of Directors of IHS Markit believes strongly in the value of an independent board of directors to provide effective oversight of management.

This includes all independent members of the Board’s standing committees: the Audit Committee, the Human Resources Committee, the Nominating and Governance Committee, and the Risk Committee. Each of the Company’s directors, other than Mr. Uggla, is independent. The independent members of the Board of Directors meet regularly without management, at meetings chaired by the lead independent director, which our bye-laws refer to as the Lead Director. We describe the Lead Director’s responsibilities below.

The Board believes that it is important to retain its flexibility to allocate the responsibilities of the offices of the Chairman and Chief Executive Officer (“CEO”) in any way that it deems to be in the best interests of the Company. Lance Uggla, who was chairman and founder of Markit prior to the 2016 merger between IHS Inc. and Markit Ltd., has been our Chairman and CEO since January 1, 2018. Mr. Uggla possesses detailed and in-depth knowledge of the business and the risks and the opportunities we have in the global marketplace and is thus well positioned to develop agendas and lead the Board to ensure that the Board’s time and attention are focused on the most critical matters.

IHS Markit has established a Lead Director role with broad authority and responsibility. Robert P. Kelly has served as our Lead Director since the 2016 merger between IHS Inc. and Markit Ltd. and was previously the lead director of Markit beginning in June 2014. The Lead Director’s responsibilities include:

 

 

scheduling and chairing meetings of the independent directors;

 

 

serving as principal liaison between the independent directors and the Chairman and CEO on sensitive issues;

 

 

communicating from time to time with the Chairman and CEO, and disseminating information among the Board as appropriate;

 

 

providing leadership to the Board if circumstances arise in which the role of the Chairman may be, or may be perceived to be, in conflict;

 

 

reviewing and approving the agenda and schedule for Board meetings and executive sessions and adding topics to the agenda as appropriate;

 

 

reviewing the quality, quantity, and timeliness of information to be provided to the Board;

 

 

serving as a non-management point of contact for the Company’s shareholders and other external stakeholders; and

 

 

with the Chair of the Nominating and Governance Committee, presiding over the annual self-evaluation of the Board, its committees and the individual directors.

The Board reviews its leadership structure as part of its annual self-evaluation. The Board believes that these responsibilities appropriately and effectively complement the Board leadership structure of IHS Markit.

The Role of the Board of Directors in Risk Oversight

We believe that risk is inherent in innovation and the pursuit of long-term growth opportunities for our business.

With the oversight of the Board, IHS Markit has implemented practices and programs designed to help manage the risks to which we are exposed and to align risk-taking appropriately with our efforts to increase shareholder value and the support of our customers, employees and communities. Each of the Audit, Human Resources, and Risk Committees of the Board has a role in assisting the Board in its oversight of the Company’s risk management, as set forth in the relevant committee charters.

 

 

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The Board’s Risk Committee, in coordination with the Board’s Audit Committee, brings additional Board-level focus to the oversight of the Company’s management of key risks, as well as the Company’s policies and processes for identifying, evaluating, and mitigating such risks. The Risk Committee meets at least quarterly. The Chair of the Risk Committee gives regular reports of the Risk Committee’s meetings and activities to the Board in order to keep the Board informed of the Company’s guidelines, policies, and practices with respect to risk assessment and risk management, and each other committee also reports regularly to the full Board on its activities.

In addition, the Board of Directors participates in regular discussions among the Board and with IHS Markit senior management on many core subjects where risk oversight is an inherent element, including strategy, operations, finance, information technology, information and cybersecurity, human resources, legal, compliance, and public policy matters. Management at IHS Markit is responsible for day-to-day risk management activities. The Company has formed a management risk committee led by its Chief Compliance, Privacy & Risk Officer to supervise these day-to-day risk management efforts, including identifying potential material risks, emerging risks and appropriate and reasonable risk mitigation efforts. The Chief Compliance, Privacy & Risk Officer regularly, and at least annually, reports such efforts to the Risk Committee and, as required, the Audit Committee and Human Resources Committee. The Board of Directors believes that its leadership structure facilitates the Board’s oversight of risk management because it allows the Board, with leadership from the Lead Director and working through its independent committees, to participate actively in the oversight of management’s actions.

Shareholder Engagement

Engagement with our shareholders has always been a significant priority for us, and we invest time and resources speaking with shareholders about our corporate governance and executive compensation practices.

As we have done in the past, in 2020 we reached out to the governance leaders and stewardship teams of shareholders representing at that time approximately 50 percent of our issued and outstanding common shares, asking for feedback related to corporate governance, pay, and sustainability performance and practices. In response to our outreach efforts, we conducted meetings with several of our top shareholders via video or teleconference. We also conducted meetings with shareholders that reached out to us to discuss corporate governance practices. Those meetings were attended at various times by our Chief Administrative Officer and General Counsel, Head of Investor Relations, and Chief People Officer. We discussed a range of topics at those meetings, including the Board structure and composition and related disclosure, corporate governance practices, board and management succession planning, executive compensation policies and design, and environmental-, social-, and governance-related matters. Shareholders were generally supportive of our current practices. We took the feedback that we received to the Nominating and Governance Committee, the Human Resources Committee and the Board. Both committees, as well as the entire Board, find shareholder input valuable in their oversight of the Company.

As a result of our continuous review of our governance practice, along with the feedback from our shareholder engagement, we have made a number of changes to our governance practices and disclosure in the last three years:

 

 

We added five new directors, increasing gender and sexual orientation diversity, and refreshed the composition of our Board committees to continue to provide our Board with fresh insights.

 

 

We increased the percentage of female directors on our Board to 42 percent of the independent directors.

 

 

We adopted a Board policy to include, and to instruct any retained search firm to include, qualified candidates who reflect diversity of gender and race/ethnicity in the pool of candidates for the Board’s consideration for any board openings or external CEO searches.

 

 

We launched a board development program designed to build the ranks of diverse candidates for board directorships.

 

 

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We added an experience matrix for our Board composition to our proxy statement.

 

 

We have fully declassified our Board and implemented majority voting in uncontested director elections.

 

 

We amended our corporate governance guidelines to require that any director who fails to receive a majority of votes for re-election to the Board must provide an acknowledgement to the Company that his or her term has expired and his or her office as a director has become vacant in accordance with Bermuda law and our bye-laws.

 

 

We implemented “proxy access,” which allows eligible shareholders to include their nominees for election to the Board in the Company’s proxy materials along with the candidates nominated by the Board.

 

 

We amended and restated our 2014 Equity Incentive Award Plan to prohibit the repricing of outstanding options and share appreciation rights such that we cannot reduce their exercise price without shareholder approval.

 

 

We are actively managing our annual run rate equity award dilution. For 2021, we are committed to limiting our annual equity award dilution to an annual run rate of 0.70 percent of total common shares issued and outstanding, which is less than previous years and in line with our longer-term target of 0.80 percent or less.

For more information on changes we made to our compensation governance practices and disclosure, please see “Compensation Discussion and Analysis—Shareholder Engagement on Compensation Practices.” Shareholder engagement is and will continue to be a top priority for our management team and Board. We will continue to engage our shareholders and consider the feedback that we receive from our discussions.

 

 

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Business Experience and Qualifications of Board Members

The following discussion presents information about the persons who compose the Board of Directors of IHS Markit, who are the 13 nominees for election at the Annual Meeting.

The age of the directors is as of the date of the Annual Meeting. We measure director tenure from when a director joined the Board or the board of either IHS or Markit (or their relevant predecessor companies) prior to the 2016 merger between IHS Inc. and Markit Ltd.

 

Lance Uggla

Chairman and CEO

 

  

 

 

LOGO

 

Director since 2003

Age: 59

 

IHS Markit Board Committees

 

–  None

 

Other Public Company Directorships

(within past five years)

 

–  MasterCard Inc. (since June 2019)

  

Experience and Qualifications

 

Mr. Uggla is Chairman and CEO of IHS Markit. He served as President from July 2016 to December 2017 and was appointed Chief Operating Officer in October 2017. Prior to the 2016 merger between IHS Inc. and Markit Ltd., Mr. Uggla was Chairman and CEO of Markit since January 2003, responsible for leading the Company’s strategic development and managing day-to-day operations. He founded Markit in 2003 after spotting an opportunity to bring transparency to the credit default swap market. The company launched the first daily credit default swap pricing service that year. He oversaw Markit’s growth from a startup to a global public company with more than 4,200 employees in 28 offices worldwide, serving more than 3,000 customers. Between 1995 and 2003, Mr. Uggla held a number of executive management positions at Toronto- Dominion Securities, including Vice Chairman and Head of Europe and Asia. Mr. Uggla graduated from the Simon Fraser University with a BBA and holds a Master of Science from the London School of Economics.

 

Mr. Uggla was a founder and Chairman and CEO of Markit since its creation, and was previously an executive in the financial industry. As Chairman and CEO of IHS Markit, Mr. Uggla brings to the Board of Directors his knowledge of our business, strategy, people, operations, competition, and financial position. In addition, he brings with him extensive relationships in the financial services industry.

 

 

 

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John Browne

(The Lord Browne of Madingley)

 

  

 

 

LOGO

 

Director since 2018

Age: 73

 

IHS Markit Board Committees

 

–  Human Resources

 

–  Nominating and Governance

 

Other Public Company Directorships

(within past five years)

 

–  Pattern Energy Group Inc.
(October 2013 to March 2020)

  

Experience and Qualifications

 

Lord Browne is the executive chairman of L1 Energy (UK) and the chairman of the supervisory board of Wintershall Dea GmbH. Until May 2020, Lord Browne was chairman of Huawei Technologies, (UK). Until May 2019, Lord Browne was executive chairman of DEA Deutsche Erdoel AG, when it merged to form Wintershall Dea. Prior to joining L1 Energy in March 2015, Lord Browne was a partner at Riverstone Holdings LLC, an energy and power-focused private equity firm, for eight years. From May 2013 to May 2015, Lord Browne was a director of Riverstone Energy Limited, a closed-ended investment company listed on the London Stock Exchange, and he was a director of Pattern Energy Group Inc. from October 2013 until March 2020 when it was acquired. Lord Browne spent 41 years at BP plc, holding various senior management positions during that time. In 1991, he joined the board of The British Petroleum Company and was appointed Group Chief Executive in 1995 and remained in this position until May 2007. Lord Browne was the chairman of the advisory board of Apax Partners LLC from 2006 to 2007, a non-executive director of Goldman Sachs from 1999 to 2007, a non-executive director of Intel Corporation from 1997 to 2006, a trustee of The British Museum from 1995 to 2005, a member of the supervisory board of DaimlerChrysler AG from 1998 to 2001, and a non-executive director of SmithKline Beecham from 1996 to 1999. Lord Browne is also chairman of the board of Windward Ltd. and a member of the board of SparkCognition Inc. Lord Browne holds a degree in Physics from Cambridge University and an MS in Business from Stanford University.

 

Lord Browne was the president of the Royal Academy of Engineering from 2006 to 2011 and is the chairman of the trustees of the Queen Elizabeth Prize for Engineering. He is a fellow of the Royal Society and a foreign member of the U.S. Academy of Arts and Sciences. He was appointed as the chair of the board of trustees of the Francis Crick Institute from August 2017 and the chairman of the governing board of The Courtauld Institute of Art from September 2017. He is also a member of the board of UK Research and Innovation. Lord Browne was a trustee of the Tate Gallery from August 2007, and was the chairman of the trustees from January 2009 until July 2017 when he retired as a trustee. He was the chairman of the Independent Review of Higher Education Funding and Student Finance, which published its report in October 2010. He was the UK government’s lead non-executive board member from June 2010 to January 2015. He was knighted in 1998 and made a life peer in 2001.

 

Lord Browne brings to the Board extensive experience as the chairman and chief executive officer of one of the world’s largest energy companies. His leadership, management experience and financial and energy industry expertise enable him to contribute significant managerial, organizational, strategic, and financial oversight skills.

 

 

 

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Dinyar S. Devitre

 

  

 

 

LOGO

 

Director since 2012

Age: 74

 

IHS Markit Board Committees

 

–  Audit (Chair)

 

–  Nominating and Governance

 

–  Risk

 

Other Public Company Directorships

(within past five years)

 

–  Altria Group, Inc. (since 2008)

 

–  SABMiller plc (2007 to October 2016)

  

Experience and Qualifications

 

In March 2008, Mr. Devitre retired from his position as Senior Vice President and Chief Financial Officer of Altria Group, Inc. Prior to Mr. Devitre’s appointment to that position in April 2002, he held a number of senior management positions with Altria, including President, Philip Morris Asia, and Chairman and CEO of Philip Morris Japan. Mr. Devitre is a member of the board of directors of Altria Group, Inc. where he is chair of the finance committee and serves on its innovation and nominating and governance committees. Mr. Devitre also serves as a trustee of the Brooklyn Academy of Music and of Pratham USA. Mr. Devitre served as a special advisor to General Atlantic LLC, a private equity firm, from June 2008 to January 2017. Mr. Devitre previously served on the boards of SABMiller plc, Western Union Company, and Kraft Foods Inc. (now known as Mondelēz International, Inc.). Mr. Devitre also previously served on the boards of the Asia Society and The Lincoln Center for the Performing Arts, Inc. Mr. Devitre holds a BA (Hons) degree from St. Joseph’s College, Darjeeling, and an MBA from the Indian Institute of Management in Ahmedabad.

 

Mr. Devitre brings to the Board experience as the chief financial officer of a large multinational company, as an executive and director of large corporations, as well as diversity in viewpoint and international business experience.

 

 

 

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Ruann F. Ernst

 

  

 

 

LOGO

 

Director since 2006

Age: 74

 

IHS Markit Board Committees

 

–  Nominating and Governance

 

–  Risk

 

Other Public Company Directorships

(within past five years)

 

–  None

  

Experience and Qualifications

 

Dr. Ernst served as Chief Executive Officer of Digital Island, Inc., an e-business delivery network company. Dr. Ernst was CEO and Chairperson of the Board of Digital Island when the company was acquired by Cable & Wireless, Plc., and afterwards headed the business for Cable & Wireless until her retirement. Prior to Digital Island, Dr. Ernst worked for Hewlett Packard Company in various management positions, including General Manager, Financial Services Business Unit. Prior to that, she was Vice President for General Electric Information Services Company. Prior to her work in the technology industry, Dr. Ernst served on the faculty of The Ohio State University, and was Director of Medical Research and Computing where she managed a biomedical computing and research facility. Dr. Ernst has served on the boards of Advanced Fiber Communications and Digital Realty Trust, as well as several non-public companies. Dr. Ernst serves on the University Foundation Board and the Fisher College of Business Advisory Board at The Ohio State University. She was a founder and is Board Chair of the nonprofit Healthy LifeStarsTM. Dr. Ernst and her husband are active supporters of the Hoover Institution at Stanford University. Dr. Ernst received Bachelor of Science, Master of Science and Ph.D. degrees from The Ohio State University.

 

Dr. Ernst brings to the Board a strong technical and computing background as well as skills in the development and marketing of information technology businesses. She also has extensive experience as a member of boards where strategic and long-term planning are critical to the success of the enterprise.

 

 

 

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Jacques Esculier

 

  

 

 

LOGO

 

Director since 2020

Age: 61

 

IHS Markit Board Committees

 

–  Audit

 

Other Public Company Directorships (within past five years)

 

–  Pentair plc (2014 to May 2020)

 

–  Wabco Holdings Inc. (2007 to May 2020)

  

Experience and Qualifications

 

Jacques Esculier served as Chief Executive Officer and Director of WABCO Holdings Inc. from July 2007 until his retirement in May 2020 when the company was acquired. From May 2009 until his retirement, he also served as Chairman of the Board of Wabco Holdings. Prior to July 2007, Mr. Esculier served as Vice President of American Standard Companies Inc. and President of its Vehicle Control Systems business, a position he had held since January 2004. Prior to holding that position, Mr. Esculier served in the capacity of Business Leader for American Standard’s Trane Commercial Systems’ Europe, Middle East, Africa, India & Asia Region from 2002 through January 2004. Prior to joining American Standard in 2002, Mr. Esculier spent more than six years in leadership positions at AlliedSignal/ Honeywell. He was Vice President and General Manager of Environmental Control and Power Systems Enterprise based in Los Angeles and Vice President of Aftermarket Services—Asia Pacific based in Singapore. Mr. Esculier was a member of the board of directors of Pentair PLC from 2014 until May 2020.

 

Mr. Esculier brings to the Board significant leadership experience demonstrating a wealth of multi-cultural, operational, management, strategic, organizational, and business transformation acumen. His deep knowledge of business in general and transportation industry in particular, as well as his financial expertise and experience as the CEO and director in a global public company, allow him to make significant contributions to the Board.

 

 

 

 

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Gay Huey Evans

 

  

 

 

LOGO

 

Director since 2020

Age: 66

 

IHS Markit Board Committees

 

–  Audit

 

Other Public Company Directorships (within past five years)

 

–  ConocoPhillips (since 2013)

 

–  Standard Chartered plc (since 2015)

  

Experience and Qualifications

 

Ms. Evans is Chairman of the London Metal Exchange since December 2019, and also serves on the boards of Standard Chartered, ConocoPhillips, and HM Treasury. She serves as Senior Advisor to Chatham House, is a Trustee of the Benjamin Franklin House and is a member of The US Council on Foreign Relations, and formerly served as a Trustee of the Beacon Collaborative and Wellbeing of Women. Ms. Evans has worked within the finance and commodity industry for the past 30 years, as both an established market practitioner and regulator, giving her deep expertise across commerce, risk, governance, policy and regulation in capital markets. Awarded an OBE in 2016 for services to the financial service industry and diversity, Ms. Evans is an expert in ensuring markets build trust through accessibility and transparency and is a passionate advocate for increased diversity in business. Ms. Evans has previously sat on the boards of the Itau BBA, Financial Reporting Council, Aviva and the London Stock Exchange, and held executive roles with Barclays Capital, Citi, the Financial Services Authority and Bankers Trust. Ms. Evans holds a BA in Economics from Bucknell University

 

Ms. Evans’ in-depth knowledge of, and insight into, global capital markets from her extensive experience in, and as a regulator of, the international financial services industry brings valuable expertise to our Board.

 

 

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William E. Ford

 

  

 

 

LOGO

 

Director since 2010

Age: 59

 

IHS Markit Board Committees

 

–  Human Resources (Chair)

 

Other Public Company Directorships

(within past five years)

 

–  Royalty Pharma (since 2020)

 

–  BlackRock Inc. (since 2018)

 

–  Axel Springer (2016 to April 2018)

  

Experience and Qualifications

 

Mr. Ford is the Chairman and Chief Executive Officer of General Atlantic, a global growth equity firm, a position he has held since 2007 and where he has worked since 1991. He also serves as Chairman of General Atlantic’s management committee and is a member of the firm’s investment and portfolio committees. Prior to his career at General Atlantic, Mr. Ford was an investment banker at Morgan Stanley from 1983 to 1991. Mr. Ford serves on the board of BlackRock Inc. and as a member of its audit and compensation committees, and on the board of Royalty Pharma plc, where he is chair of the compensation committee and serves on the nominating and governance committee. Mr. Ford also serves on the board of Bytedance. Mr. Ford was formerly on the board of Tory Burch, a current General Atlantic portfolio company, and was formerly a director of a number of prior General Atlantic investments, including First Republic Bank, NYSE Euronext, E*TRADE, Priceline, and NYMEX. Under Mr. Ford’s leadership, General Atlantic has expanded its global presence, increased its capital base, and deepened its capabilities to identify and partner with high-potential growth companies across multiple business sectors and geographies.

 

Mr. Ford is actively involved in a number of educational and nonprofit organizations. He is a member of the board of Rockefeller University, where he is Chairman, and is a member of the Amherst College Endowment Investment Committee. Mr. Ford is an advisory board member of Tsinghua University’s School of Economics and Management and sits on the board of overseers and managers for Memorial Sloan Kettering Cancer Center. Mr. Ford serves on the board of directors of the National Committee on United States–China Relations, Endeavor, and the Emerging Markets Private Equity Association, and is a member of The Council on Foreign Relations. He is also a member of the steering committee for the CEO Action for Diversity and Inclusion initiative and is the co-chair of the Partnership for New York City. Mr. Ford sits on the New York State Life Sciences Advisory Board and is on the advisory board of the United Nations Economic Commission for Africa’s Initiative on Digital Identification for Africa. Mr. Ford holds a BA in Economics from Amherst College and an MBA from the Stanford Graduate School of Business.

 

Mr. Ford brings to the Board a wealth of global private equity and investment management experience and extensive knowledge of business, finance, and strategic acquisitions, which provide valuable insight for our long-term corporate and business strategy.

 

 

 

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Nicoletta Giadrossi

 

  

 

 

LOGO

 

Director since 2018

Age: 54

 

IHS Markit Board Committees

 

–  Audit

 

Other Public Company Directorships

(within past five years)

 

–  Falck Renewables S.p.A. (since 2020)

 

–  Royal Vopak N.V. (since 2019)

 

–  Brembo SpA (since 2017)

 

–  Cairn Energy plc (since 2017)

 

–  Fincantieri SpA (2017 to April 2018)

 

–  Faiveley Transport S.A. (2011 to April 2017)

 

–  Bureau Veritas S.A. (2013 to April 2017)

  

Experience and Qualifications

 

Ms. Giadrossi is Chairman of Cairn Energy plc, an E&P company listed on the London Stock Exchange. She also is a member of the board of Royal Vopak N.V., a petrochemicals and new energies storage company listed on Euronext Amsterdam, where she is part of the audit committee and chairs the remuneration committee; a member of the board of Brembo SpA, an automotive components manufacturer listed on the Italian MIB, where she chairs the remuneration committee and is a member of the sustainability committee; and a member of the board of Falck Renewables S.p.A, a global player in the field of renewable energies listed on the Borsa Italiana, where she is part of the sustainable strategy committee. Ms. Giadrossi has been a Senior Advisor with Bain Capital Partners in Europe since 2015 and chair of Techouse AS, an engineering company in Norway, since 2018. Ms. Giadrossi served on the board of Fincantieri SpA, listed on the Borsa Italian, until April 2018, on the boards of Bureau Veritas S.A. and Faiveley Transport S.A., both listed in France, until April 2017, and on the board of Aker Solutions Asa, listed in Norway, until 2013. Ms. Giadrossi has experience in leading and participating in audit, risk, sustainability, and remuneration committees. Ms. Giadrossi’s executive career has spanned 30 years in energy, engineering, and capital goods. From 2014 to 2016 she was President, Europe, Africa, India, for Technip, an engineering company, and from 2012 to 2014 she was EVP, Head of Operations, for Aker Solutions. Prior to that, she was VP and General Manager, EMEA, for Dresser Rand (now Siemens Energy). She spent 10 years with General Electric Company in several executive positions, notably General Manager for GE’s Oil and Gas, Refinery & Petrochemicals Division, a position she held until 2005. Ms. Giadrossi started her career at The Boston Consulting Group. She holds a BA in Economics and Mathematics from Yale University and an MBA from Harvard Business School.

 

Ms. Giadrossi brings to the Board extensive business experience in the industrial and energy sectors in Europe and her consulting and private equity background that enable her to contribute a unique and diverse managerial and strategic perspective.

 

 

 

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Robert P. Kelly

 

  

 

 

LOGO

 

Lead Director

Director since 2012

Age: 67

 

IHS Markit Board Committees

 

–  Human Resources

 

–  Nominating and Governance

 

Other Public Company Directorships (within past five years)

 

–  None

  

Experience and Qualifications

 

Mr. Kelly was Chairman and CEO of The Bank of New York Mellon until 2011. Prior to that, he was Chairman, Chief Executive Officer and President of Mellon Bank Corporation, Chief Financial Officer of Wachovia Corporation, and Vice- Chairman of Toronto-Dominion Bank. Mr. Kelly serves on the board of the Alberta Investment Management Corporation. Mr. Kelly was the chairperson of the Canada Mortgage and Housing Corporation from 2012 until March 2018 and the chairman of the board of directors of Santander Asset Management from 2012 until December 2017. Mr. Kelly previously served as Chancellor of Saint Mary’s University in Canada, was a former member of the boards of the Financial Services Forum, Federal Advisory Council of the Federal Reserve Board, Financial Services Roundtable, Trilateral Commission (North American Group), and Institute of International Finance, and a former member of the board of trustees of St. Patrick’s Cathedral in New York City, Carnegie Mellon University in Pittsburgh, and the Art Gallery of Ontario. Mr. Kelly holds a B.Comm. from Saint Mary’s University and an MBA from the Cass Business School, City University, London, and is a C.P.A and Fellow Chartered Accountant. Mr. Kelly has been awarded honorary doctorates from City University and Saint Mary’s University.

 

Mr. Kelly brings to the Board extensive experience as the chairman and CEO of large financial institutions, as well as other senior policymaking positions in the financial services industry and as a director of other public and private companies, which provides the Board with valuable insight and executive leadership, management, finance and strategic development experience.

 

 

 

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Deborah Doyle McWhinney

 

  

 

 

LOGO

 

Director since 2015

Age: 66

 

IHS Markit Board Committees

 

–  Risk (Chair)

 

Other Public Company Directorships (within past five years)

 

–  Trustee, certain Franklin Templeton funds (since 2019)

 

–  BorgWarner Inc. (since 2018)

 

–  Focus Financial Partners Inc.
(2018 to December 2020)

 

–  Fluor Corporation (2014 to November 2020)

 

–  Fresenius Medical Care AG & Co. KGaA
(2016 to November 2018)

 

–  Lloyds Banking Group plc (2015 to December 2018)

  

Experience and Qualifications

 

Ms. McWhinney currently serves on the board of BorgWarner Inc., where she serves as a member of the compensation committee and audit committee, and as a trustee of certain Franklin Templeton funds. Ms. McWhinney previously served on the boards of Focus Financial Partners Inc., Fluor Corporation, Lloyds Banking Group plc and Fresenius Medical Care AG & Co. Ms. McWhinney worked at Citigroup, Inc. (“Citi”) from 2009 to 2014, as the Chief Executive Officer of Citi’s global enterprise payments business from September 2013 to January 2014, as the Chief Operating Officer of Citi’s global enterprise payments business from February 2011 to September 2013, and as President of Personal Banking and Wealth Management from May 2009 to February 2011. Ms. McWhinney was also co-chair of the Citi Women initiative until her retirement in January 2014. Prior to joining Citi, Ms. McWhinney worked at Charles Schwab, Inc. from 2001 to 2007, where she was President of Schwab Institutional and was chair of the global risk committee. Ms. McWhinney previously held executive roles at Visa International and Engage Media (a division of CMGI). Earlier in her career, she worked for 17 years at Bank of America in corporate and retail banking. Ms. McWhinney was appointed by former President George W. Bush to the board of directors of the Securities Investor Protection Corporation in 2002 where she served until 2007. Ms. McWhinney serves on the board of Legal Shield and is a trustee for the California Institute of Technology and for the Institute for Defense Analyses. Ms. McWhinney holds a Bachelor of Arts from University of Montana.

 

Ms. McWhinney brings to the Board extensive management, risk, and cybersecurity experience gained in executive-level positions in the financial services industry and as a director of public companies.

 

 

 

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Jean-Paul L. Montupet

 

  

 

 

LOGO

 

Director since 2012

Age: 73

 

IHS Markit Board Committees

 

–  Human Resources

 

–  Nominating and Governance (Chair)

 

Other Public Company Directorships
(within past five years)

 

–  Assurant, Inc. (since 2012)

 

–  WABCO Holdings Inc. (2012 to May 2020)

 

–  PartnerRE Ltd. (2010 to 2016)

 

–  Lexmark International, Inc. (2006 to 2016)

 

  

Experience and Qualifications

 

Until his retirement in December 2012, Mr. Montupet served as the Chair of Emerson Electric Co.’s Industrial Automation business and President of Emerson Europe SA. Mr. Montupet joined Emerson in 1981, serving in a number of senior leadership roles at the global technology provider, including Executive Vice President of Emerson Electric Co. and Chief Executive Officer of Emerson Electric Asia Pacific. Mr. Montupet serves on the board of Assurant, Inc. Mr. Montupet is also an advisor to Eurazeo Société Anonyme and to Cornell Capital, and serves on the board of certain private portfolio companies of the private investment firm. Mr. Montupet was the non- executive chair of the board of PartnerRE Ltd. from 2010 until March 2016 and served on the board of Lexmark International, Inc. from 2006 until November 2016 and the board of WABCO Holdings Inc. from 2012 to May 2020. He is also a trustee of the International Churchill Society.

 

Mr. Montupet brings to the Board extensive international business and executive management experience, particularly from Europe and Asia Pacific, and additional experience gained as a director of multiple publicly traded companies, including as the nonexecutive chairman of the board of PartnerRe Ltd.

 

 

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Deborah K. Orida

 

  

 

 

LOGO

 

Director since 2019

Age: 54

 

IHS Markit Board Committees

 

–  Human Resources

 

Other Public Company Directorships
(within past five years)

 

–  HKBN Ltd. (2015 to July 2020)

  

Experience and Qualifications

 

Ms. Orida is the Senior Managing Director & Global Head of Real Assets at Canada Pension Plan Investment Board (CPPIB), a position she has held since September 2020 and where she has worked since 2009. Ms. Orida leads CPPIB’s global Real Assets program, which encompasses Energy & Resources, Infrastructure, Power & Renewables, Real Estate and Portfolio Value Creation. The department is active in major developed and emerging countries and leads data, analytics and digital value creation projects across the portfolio. Ms. Orida has also held other senior leadership roles at CPPIB, including Managing Director, Head of Relationship Investments International, covering Europe and Asia, Managing Director, Head of Private Equity Asia, Hong Kong, and was most recently Senior Managing Director & Global Head of Active Equities. In this position she led CPPIB’s Active Equities department globally, including the Sustainable Investing group, and was executive sponsor of CPPIB’s Climate Change Program. Prior to joining CPPIB, Ms. Orida spent nine years as an investment banker at Goldman Sachs in New York and Toronto. Previously, Ms. Orida was a securities lawyer at Blake, Cassels & Graydon in Toronto. Ms. Orida previously was a member of the board of directors of Nord Anglia Education Limited, the Bridgepoint Health Foundation and HKBN Ltd., a publicly listed Hong Kong company. Ms. Orida is a member of the Women in Capital Markets Advisory Council. Ms. Orida holds an MBA from The Wharton School and an LLB and BA from Queen’s University, Canada. Ms. Orida was originally nominated to join the Board by CPPIB pursuant to the director nomination agreement we have signed with CPPIB.

 

Ms. Orida brings to the Board extensive leadership and management experience as a senior executive in a global investment fund and the financial services industry, and her experience driving innovation in the most pressing areas of 21st century business—data, climate change and diversity, equity & inclusion—contributes significant managerial, organizational, analytical and financial oversight skills.

 

 

 

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James A. Rosenthal

 

  

 

 

LOGO

 

Director since 2013

Age: 67

 

IHS Markit Board Committees

 

–  Human Resources

 

–  Risk

 

Other Public Company Directorships
(within past five years)

 

–  On Deck Capital, Inc.
(April 2017 to December 2017)

  

Experience and Qualifications

 

Mr. Rosenthal is the Chief Executive Officer of BlueVoyant, a global cybersecurity services firm. Until December 2016, Mr. Rosenthal was an Executive Vice President and the Chief Operating Officer of Morgan Stanley, a member of Morgan Stanley’s management and operating committees, Chairman and CEO of Morgan Stanley Bank, N.A., and Chairman of Morgan Stanley Private Bank, N.A. Mr. Rosenthal was previously Head of Corporate Strategy of Morgan Stanley, Chief Operating Officer of Morgan Stanley Wealth Management and Head of Firmwide Technology and Operations for Morgan Stanley. Prior to joining Morgan Stanley, Mr. Rosenthal served as Chief Financial Officer of Tishman Speyer from 2006 to 2008. From 1999 to 2005, he served as the Head of Corporate Strategy and Corporate Development at Lehman Brothers and as a member of the Management Committee. Mr. Rosenthal was with McKinsey & Company from 1986 to 1999, where he was a senior partner specializing in financial institutions. From June 2017 until April 2020, Mr. Rosenthal has served on the board of lntarcia Therapeutics, Inc., a private company. From April until October 2017, Mr. Rosenthal was a director of On Deck Capital, Inc. Mr. Rosenthal was a trustee of the Lincoln Center for the Performing Arts until 2018. Mr. Rosenthal also formerly served as chairman of the board of the Securities Industry and Financial Markets Association (SIFMA). Mr. Rosenthal holds a BA from Yale University and a JD from Harvard Law School.

 

Mr. Rosenthal brings to the Board risk and cybersecurity experience, as well as extensive experience gained as the chief operating officer of one of the world’s largest financial institutions.

 

 

 

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Board Diversity

As of the date of the Annual Meeting:

 

 

the average tenure of the members of the Board is 6.7 years (the average tenure for independent directors is 5.8 years), when measuring tenure from when the director joined the Board or the board of either IHS or Markit prior to the 2016 merger between IHS Inc. and Markit Ltd.;

 

 

five of our independent directors have tenure of less than five years, five independent directors have tenure between five and 10 years and two independent directors have tenure of more than 10 years;

 

 

five of our 12 independent directors are female;

 

 

the average age of our directors is 65;

 

 

the Board consists of a mix of British, American, Canadian, Italian and French citizens, with seven independent directors having been born outside the United States or United Kingdom;

 

 

two directors are of Asian or South Asian descent; and

 

 

one director is openly gay.

Board Development Program

The Board believes that a diverse boardroom leads to better decision-making and that it is important to support and develop diversity in the boardrooms of public companies. To that end, the Board launched a board development program in 2018 designed to build the ranks of diverse candidates for board directorships. The year-long program does not guarantee candidacy for, or a position on, the IHS Markit Board, but aims to give valuable boardroom experience and skills to executives with gender and racial/ethnic diversity who are interested in seeking public company board positions but currently have no public company board experience.

During the program, non-employee participants:

 

 

actively participate as non-voting observers on the Board, reviewing all board materials, attending in-person committee and board meetings, and contributing to board discussions;

 

 

review onboarding educational materials and, where needed, meet with management to understand our business and strategy;

 

 

engage in one-to-one mentoring with a senior independent Board member who is responsible for coaching, supporting the participant’s learning and development, including through pre- and post-meeting sessions, and facilitating meaningful ongoing relationships with our other directors;

 

 

participate in all board educational programs provided by the Company throughout the year, and have access to the same content and educational programs as our directors; and

 

 

present to the Board on a topic of expertise or interest that is relevant to IHS Markit.

The Board development program is in its third year and the Board is excited to support its further development.

 

 

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Board Experience

The Nominating and Governance Committee strives for a Board that spans a range of leadership and experience relevant to IHS Markit’s strategic goals and global activities.

The following graph displays certain experience that the Nominating and Governance Committee believes is desirable to be represented on the Board:

 

   

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 Experience

                           

# Current Public Company Boards (1)

 

1

 

2

 

1

 

1

 

3

 

3

 

5

 

1

 

3

 

2

 

1

 

1

 

2

Industry Experience

Financial Services

 

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Resources (2)

 

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Transportation

 

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Information Services

 

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Other

 

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Leadership Experience    

Strategy (3)

 

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Finance (4)

 

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Human Resources (5)

 

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Innovation & Technology (6)     

 

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Marketing & Sales (7)

 

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Risk (8)

 

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Data & Analytics (9)

 

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Public Company CEO / COO

 

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Region of Work

Experience (10)

North America

 

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Asia Pacific

 

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EMEA

 

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South America

 Personal Characteristics

                     

Citizenship

UK / US

 

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Other

 

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Gender

Female

 

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Male

 

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Other Diversity (11)

 

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1.

Number of current public company boards includes IHS Markit.

 

2.

Includes energy and chemicals industries.

 

3.

Experience managing the strategy and development of a large organization. With respect to Ms. Evans, includes public policy and regulatory experience.

 

4.

Experience as a chief financial officer, chief accounting officer, controller or other relevant experience in finance, accounting or financial reporting.

 

5.

Experience in a human resources / compensation function, including management of a large workforce, executive compensation and broad-based incentive planning experience, and culture.

 

6.

Experience in innovation and technology, information security, digital platforms, data privacy or cybersecurity, including experience managing technological change.

 

7.

Experience managing a marketing/sales function, and in developing and executing on strategies to grow sales and market share.

 

8.

Experience with risk management of a large organization and management of specific types of risks, including technology, cybersecurity and financial services related risks.

 

9.

Experience as a chief information officer, chief data scientist or other relevant experience in data science, analytics, or digital transformation.

 

10.

Region of primary employment in a senior management role.

 

11.

Diverse attributes including ethnicity, race and sexual orientation.

Organization of the Board of Directors

Our Board held twelve formal meetings during 2020, and held a number of additional informal update and background calls as a result of the Covid-19 pandemic and the Company’s merger with S&P Global. At each meeting, the Chairman was the presiding director, with the Lead Director serving as chair for any part of the meeting in which the Chairman was not present. Each director attended at least 75 percent of the total regularly scheduled and special meetings of the Board and the committees on which he or she served. As stated in our Corporate Governance Guidelines, our Board encourages each director to attend our annual general meeting of shareholders. At the 2020 annual general meeting of shareholders, two directors on the Board were in attendance as a result of the Covid-19 pandemic travel restrictions which prevented the Board from traveling to London for the meeting.

On April 16, 2020, Richard Roedel retired from the Board after 16 years of service. At the time, the Board had reduced its size to 11 members, but subsequently increased the size to 12 directors to appoint Jacques Esculier to the Board and then increased its size again to 13 directors to appoint Gay Huey Evans to the Board.

Director Nomination Agreement

In Markit’s initial public offering in 2014, CPPIB purchased approximately $250 million of our common shares, and was given the right to nominate, in consultation with our Nominating and Governance Committee, one director for appointment to our Board of Directors pursuant to a Director Nomination Agreement with us. This right will expire if CPPIB’s beneficial ownership of our common shares falls below 100 percent of the number of common shares CPPIB purchased in Markit’s initial public offering. Ms. Orida was nominated by CPPIB pursuant to this agreement and was first appointed to the Board in October 2019 and subsequently reelected by shareholders in April 2020.

 

 

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Independent Directors

The Board has determined that each member of the Board, with the exception of Mr. Uggla, does not have any material relationship with the Company and is an independent director, based on the independence standards of the NYSE. The Board determined that Mr. Roedel was independent until his retirement from the Board in April 2020. Mr. Uggla is not independent due to his position as CEO of the Company. In addition, the Board has determined that all members of each of the Audit Committee, Risk Committee, Human Resources Committee, and Nominating and Governance Committee of the Board meet the independence standards of the NYSE listing standards and SEC rules and regulations. Each of these directors has also been determined to be financially literate. In making these independence determinations, the Board considered all relevant facts, circumstances and transactions known to us, including the commercial, accounting, legal, banking, consulting, charitable and familial relationships of each member of the Board as well as their relationships with the holders of more than 5 percent of our common shares. There are no family relationships between any of the members of the Board and the executive officers of the Company.

In accordance with our bye-laws and the Corporate Governance Guidelines, the independent directors re-appointed Mr. Kelly as Lead Director in April 2020. The Lead Director chairs executive sessions of the independent directors. During 2020, the independent directors of the Board met eleven times without the presence of management and discussed various matters. In addition, each committee of the Board met in executive session without the presence of management at least three times during their committee meetings during 2020.

Charitable Contributions by the Company

In accordance with our Corporate Governance Guidelines, proposed contributions or pledges of contributions in excess of $250,000 in a fiscal year by IHS Markit or its foundation to charitable or tax-exempt organizations with which a director or their immediate family member serves as a director, executive officer, trustee or member of such organization’s fund-raising organization or committee, are subject to prior review and approval by the Nominating and Governance Committee. A director’s independence will not be considered impaired solely for the reason that the director or their immediate family member is an executive officer, director, or trustee of a charitable or tax exempt organization that receives from IHS Markit or its foundation an amount not exceeding the greater of $1 million or 2% of the organization’s consolidated gross revenues in a single fiscal year.

Simultaneous Service on Other Public Company Boards

In accordance with our Corporate Governance Guidelines, without the consent of the Nominating and Governance Committee, a director may not serve on more than five public company boards, including our Board, and a director who is also the chief executive officer of another public company may not serve on more than two public company boards, including our Board and their own board of directors.

The Corporate Governance Guidelines also provide that a director must notify the Chair of the Nominating and Governance Committee prior to accepting any invitation to serve on another board (including a not-for-profit/tax-exempt board) or with a government or advisory group that is expected to require significant commitments of time, in order for IHS Markit to confirm the absence of any actual or potential conflict of interest.

Corporate Governance Guidelines

Our Board has adopted Corporate Governance Guidelines that serve as a framework within which our Board and its committees operate. These guidelines cover a number of areas including the size and composition of our Board of Directors, membership criteria and director qualifications, director responsibilities, Board agenda, roles of the Chairman and Chief Executive Officer and lead independent director, meetings of independent directors, committee responsibilities

 

 

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and assignments, Board member access to management and independent advisers, director communications with third parties, director compensation, director orientation and continuing education, evaluation of senior management and management succession planning. Our Corporate Governance Guidelines are available on our website at http://investor.ihsmarkit.com/corporate-governance.

Director Share Ownership Guidelines

We believe that our non-employee directors should have a significant equity interest in the Company. Our Board has adopted an ownership policy in our Corporate Governance Guidelines that requires directors to hold common shares with an aggregate value of at least five times the Board’s annual cash board retainer. Vested stock options which are not exercised are not considered for the purposes of director equity ownership. Directors have five years to achieve the holding requirement.

As of December 31, 2020, all of our current directors held shares in excess of their holding requirement except for Ms. Giadrossi, who has until 2023 to meet her holding requirement, and Mr. Esculier and Ms. Evans who each have until 2025 to meet their holding requirement. Ms. Orida, who declined to receive cash or equity compensation as a member of the Board in accordance with the terms of the Director Nomination Agreement with CPPIB, was granted a waiver by the Board upon her appointment and will not be required to comply with the director share ownership guidelines.

Business Code of Conduct

We have adopted a code of ethics that we refer to as our Business Code of Conduct. Our Business Code of Conduct applies to our directors, officers and employees, including our principal executive officer, principal financial officer, and principal accounting officer.

Our Business Code of Conduct is available on our website at http://investor.ihsmarkit.com/ corporate-governance. If we approve any substantive amendment to our Business Code of Conduct, or if we grant any waiver of our Business Code of Conduct to our directors or executive officers (including our principal executive officer, principal financial officer and principal accounting officer), we will post an update on the Investor Relations page of our website (http://investor.ihsmarkit.com/corporate-governance) within four business days following the date of the amendment or waiver, describing the nature and date of the amendment or the nature of the waiver, the name of the person to whom it was granted and the date of the waiver, as the case may be.

Hedging and Pledging Policy

We have a hedging policy in our policy on trading securities that applies to directors, executive officers and employees and that prohibits them from entering into any hedging or derivative transactions that are designed to hedge or offset any decrease in the market value of IHS Markit equity securities, or speculate on any change in the market value of IHS Market equity securities. Stock options granted to employees under our equity compensation plans are not covered by the prohibition.

We also have a pledging policy for directors and senior executives (including executive officers) that prohibits them from purchasing IHS Markit securities on margin or holding IHS Markit securities in a margin account or otherwise pledging IHS Markit securities as collateral for a loan without the prior approval of the Nominating and Governance Committee. Requests are evaluated on a case-by-case basis and have been granted in limited circumstances after giving consideration to the number of IHS Markit securities to be purchased on margin or otherwise pledged as a percentage of total shares held and total shares issued and outstanding.

 

 

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Board, Committee and Individual Director Evaluations

Each year, our Board and its committees perform a rigorous self-evaluation overseen by the Nominating and Governance Committee. The performance evaluations solicit input from directors regarding the performance and effectiveness of the Board, its committees and the Lead Director, and provide an opportunity for members of the Board to identify areas for improvement. In addition, the Chair of the Nominating and Governance Committee and the Lead Director have individual self-assessment discussions with each member of the Board, providing further opportunity for dialogue and improvement, including with respect to board refreshment in light of the current challenges and needs of the Board and the Company. The Nominating and Governance Committee reviews the results and feedback from the evaluation process and makes recommendations to the full Board. Each committee also reviews the results and feedback from its own evaluation process. The Chair of the Nominating and Governance Committee leads a discussion of the evaluation results during an executive session of the Board and communicates relevant feedback to our CEO. Our Board has successfully used this process to evaluate Board and committee effectiveness and identify opportunities to strengthen the Board.

 

 

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Board Committees and Their Composition

The Board has established a standing Audit Committee, Human Resources Committee, Nominating and Governance Committee and Risk Committee, each of which operates under a written charter that is posted on our website at https://investor.ihsmarkit. com/corporate-governance.

The Board reviews the composition of our Board committees annually and considers the expertise of the directors with the needs of the committees.

Audit Committee

 

Dinyar S. Devitre (Chair)

 

Other Committee Members:

 

–  Nicoletta Giadrossi

 

–  Jacques Esculier

 

–  Gay Huey Evans

 

–  Richard W. Roedel
    (until April 2020)

 

Audit Committee Financial Experts      

 

–  Dinyar S. Devitre

 

–  Jacques Esculier

 

–  Gay Huey Evans

 

–  Nicoletta Giadrossi

 

–  Richard W. Roedel

 

Number of meetings in 2020: 8

 

Responsibilities

 

The Audit Committee assists our Board in its oversight of (i) the integrity of our financial statements and internal controls, (ii) our independent registered public accountants’ qualifications, independence, and performance, (iii) the performance of our internal audit function and (iv) compliance with legal and regulatory requirements. The Audit Committee is directly responsible for recommending the appointment of, and the compensation, retention, and oversight of the work of, our independent registered public accountants. The Audit Committee reviews and monitors the Company’s policies and practices with respect to major financial reporting risk exposures, and meets at least annually with the Risk Committee to review and discuss with management the Company’s guidelines, policies and practices with respect to risk assessment and risk management and compliance with laws and regulations. The Audit Committee establishes procedures for reporting complaints and reviews any complaints regarding accounting, internal accounting controls or auditing matters received. The Audit Committee also prepares the report on the Company’s financial statements and its independent registered public accountants that the SEC rules require to be included in the Company’s annual proxy statement or annual report. The Audit Committee has been established in accordance with Section 3(a)(58)(A) of the Exchange Act.

 

Independence

 

Each committee member has been determined by the Board to qualify as independent under the independence criteria established by the SEC and the NYSE. The Board has also determined that each committee member is “financially literate” within the meaning of the NYSE listing standards and an “Audit Committee financial expert” under the applicable SEC rules based on their experience and qualifications.

 

 

 

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Human Resources Committee

 

William E. Ford (Chair)

 

Other Committee Members:

 

–  John Browne

 

–  Robert P. Kelly

 

–  Jean-Paul L. Montupet

 

–  Deborah K. Orida

 

–  James A. Rosenthal

 

Number of meetings in 2020: 8                

 

Responsibilities

 

The Human Resources Committee has been established by our Board to (i) review, approve and administer our compensation and benefits policies generally, (ii) evaluate executive officer performance and review our management succession plan, (iii) determine compensation for our executive officers and other officers for purposes of Section 16 of the Exchange Act, (iv) review and assess risks arising from our compensation policies and practices, (v) review management succession planning, (vi) retain and terminate compensation consultants, (vii) review and discuss the “Compensation Discussion and Analysis” disclosure with management and provide a recommendation to the Board regarding its inclusion in the Company’s annual proxy statement or annual report, and (viii) prepare the report on executive officer compensation that the SEC rules require to be included in the Company’s annual proxy statement or annual report. See “Compensation Discussion and Analysis” for a more detailed description of certain functions of the Human Resources Committee.

 

Independence

 

Each committee member has been determined by the Board to qualify as independent under the independence criteria established by the SEC and the NYSE, is a non-employee director for purposes of Rule 16b-3 under the Exchange Act and is an outside director for purposes of Section 162(m) of the Internal Revenue Code.

 

 

 

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Nominating and Governance Committee

 

Jean-Paul L. Montupet (Chair)

 

Other Committee Members:

 

–  John Browne

 

–  Dinyar S. Devitre

 

–  Ruann F. Ernst

 

–  Robert P. Kelly

 

Number of meetings in 2020: 5                

 

Responsibilities

 

The Nominating and Governance Committee has been created by our Board to (i) recommend to the Board criteria for Board and Board committee membership, (ii) identify individuals qualified to become Board members and recommend director nominees to the Board consistent with the Board’s criteria, (iii) recommend directors for appointment to committees established by the Board, (iv) make recommendations to the Board as to determinations of director independence, (v) oversee the evaluation of the Board, (vi) make recommendations to the Board as to compensation for our directors, (vii) develop and recommend to the Board our corporate governance guidelines, business code of conduct and related person transaction policy, (viii) oversee compliance with our corporate governance guidelines, business code of conduct and related person transaction policy, and (ix) review Board orientation and continuing education. A more detailed description of certain functions of the Nominating and Governance Committee can be found under “—Board Refreshment, Board Composition, Diversity and Director Nominations.”

 

Independence

 

Each committee member has been determined by the Board to qualify as independent under the independence criteria established by the NYSE.

 

 

 

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Risk Committee

 

Deborah Doyle McWhinney (Chair)

 

Other Committee Members:

 

–  Dinyar S. Devitre

 

–  Ruann F. Ernst

 

–  Richard W. Roedel (until April 2020)

 

–  James A. Rosenthal

 

Number of meetings in 2020: 4                

 

Responsibilities

 

The Risk Committee has been established by our Board to assist our Board in its oversight of the Company’s risk management. In addition to any other responsibilities which may be assigned from time to time by the Board, the Risk Committee is responsible for (i) in coordination with the Audit Committee, reviewing and discussing with management the Company’s risk management and risk assessment processes, including any policies and procedures for the identification, evaluation, and mitigation of major risks of the Company, (ii) receiving periodic reports from management as to efforts to monitor, control, and mitigate major risks, (iii) reviewing periodic reports from management pertaining to the Company’s business lines, products, and services, including any major risks with respect to such business lines, products, and services, as the Risk Committee deems appropriate, (iv) reviewing periodic reports from management pertaining to cybersecurity programs and data protection controls and such other appropriate information security reports as the Risk Committee deems appropriate, (v) in coordination with the Audit Committee, reviewing and discussing with management the Company’s compliance with laws and regulations, including major legal and regulatory initiatives, (vi) reviewing periodic reports from management pertaining to corporate sustainability strategy and initiatives, (vii) reviewing any material complaints received pursuant to the Company’s code of conduct hotline policy (other than complaints regarding accounting, internal accounting controls or auditing matters, which are reviewed by the Audit Committee), (viii) reviewing periodic reports from management on selected risk topics as the Risk Committee deems appropriate from time to time encompassing major risks other than those delegated by the Board to other committees of the Board in their respective charters or otherwise, (ix) assigning for review to other committees of the Board such selected risk topics identified by the Risk Committee as the Risk Committee determines is appropriate for effective oversight of such risks and (x) sharing and discussing information with the Audit Committee as necessary and appropriate to permit the Audit Committee to carry out its statutory, regulatory and other responsibilities.

 

Independence

 

Each committee member has been determined by the Board to qualify as independent under the independence criteria established by the NYSE.

 

 

 

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Board Refreshment, Board Composition, Diversity, and Director Nominations

Our Board nominates directors to be elected at each annual general meeting of shareholders and appoints new directors to fill vacancies when they arise. Board refreshment and succession planning is an ongoing, year-round process. The Board recognizes that it is important for the Board to balance the benefits of continuity with the benefits of fresh viewpoints and experience. While it is not the policy of the Board to mandate specific term limits or a specific retirement age for directors, the Nominating and Governance Committee regularly reviews the composition of the Board and the appropriateness of each director’s continued service on the Board in light of the current challenges and needs of the Board and the Company, and determines whether it may be appropriate to add directors or decrease the size of the Board. The Nominating and Governance Committee considers not only an individual’s qualities, performance, and professional responsibilities, but also the current composition of the Board, the challenges and needs of the Board at any particular time, and the needs of the Company under applicable rules and regulations. The Nominating and Governance Committee also believes it may be appropriate for certain key members of our management to participate as members of the Board. The Board believes the current composition of the Board and mix of tenures provides for a highly effective and well-functioning Board.

The Nominating and Governance Committee has the responsibility to identify, evaluate, recruit, and recommend qualified candidates to the Board for nomination or appointment. Although the Board has not set a formal policy or goals with respect to diversity, it believes the Board’s membership should be composed of experienced and dedicated individuals with diversity of backgrounds, perspectives, and skills and an appropriate balance of knowledge, experience, and capability. The Nominating and Governance Committee selects candidates for director based on the candidate’s character, judgment, diversity (including gender, nationality and ethnicity), age, tenure, skills, background, and experience, business acumen, and ability to act on behalf of all shareholders (without regard to whether the candidate has been nominated by a shareholder). The Nominating and Governance Committee believes that nominees for director should have experience, such as experience in management or accounting and finance, or industry and technology knowledge, that may be useful to IHS Markit and the Board, high personal and professional ethics, and the willingness and ability to devote sufficient time to effectively carry out his or her duties as a director. The Nominating and Governance Committee believes it appropriate for at least one, and preferably multiple, members of the Board to meet the criteria established by the SEC for an “audit committee financial expert,” and for a majority of the members of the Board to meet the definition of “independent director” under NYSE listing standards. The Nominating and Governance Committee is committed to including women and minority candidates in the pool of qualified candidates from which Board nominees are chosen and will continue to review its processes and procedures to ensure that diverse candidates are included. The Board has adopted a policy to include, and to instruct any retained search firm to include, qualified candidates who reflect diversity of gender and race/ethnicity in the pool of candidates for the Board’s consideration for any board openings or external CEO searches.

Prior to each annual general meeting of shareholders, the Nominating and Governance Committee identifies nominees first by evaluating the current directors whose terms will expire at the meeting and who are willing to continue in service. These candidates are evaluated based on the criteria described above, the candidate’s prior service as a director, and the needs of the Board with respect to the particular talents and experience of its directors. In the event that a director does not wish to continue their service, the Nominating and Governance Committee determines not to renominate the director, or a vacancy is created on the Board as a result of a resignation, an increase in the size of the Board, or other event, the Nominating and Governance Committee will consider various candidates for membership, including those suggested by the Nominating and Governance Committee members, by other Board members, by any searches conducted internally by management at the request of the Nominating and Governance Committee, by any executive search firm engaged by the Nominating and Governance Committee, or by any nomination properly submitted by a shareholder pursuant to the procedures for shareholder nominations for directors provided in this Proxy Statement. Shareholders may also recommend candidates for consideration by the Board by contacting the Board as indicated under “–Communications with the Board.” As a matter of policy, candidates recommended by shareholders are evaluated on the same basis as candidates recommended by the

 

 

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Board members, executive search firms, or other sources. In 2020, the Nominating and Governance Committee did not engage any executive search firms to assist with identifying qualified Board candidates.

Communications with the Board

Shareholders and other interested parties may contact any or all Board members (including our Lead Director or the non-management directors as a group), any Board committees or any committee chairman by email or mail. Correspondence should be addressed to the Board of Directors or any such individual directors or group or committee of directors by either name or title.

The Company Secretary or another member of our legal department opens all communications to determine whether the contents represent a message to the directors. All correspondence that is not in the nature of advertising or promotion of a product or service or is not trivial, irrelevant, unduly hostile, threatening, illegal, patently offensive or similarly inappropriate will be forwarded promptly to the addressee. If no particular director is named, the communication will be forwarded, depending on the subject matter, to the Lead Director, Audit Committee Chair, the Human Resources Committee Chair, the Nominating and Governance Committee Chair or the Risk Committee Chair.

Correspondence can be sent:

 

LOGO        By Email:
  CompanySecretary@ihsmarkit.com
 
LOGO   By Mail:
 

Company Secretary

c/o Legal Department

IHS Markit Ltd.

4th Floor, Ropemaker Place

25 Ropemaker Street

London EC2Y 9LY

United Kingdom

The Company Secretary will forward to the Audit Committee chair any correspondence that reflects a complaint or concern relating to accounting, auditing or internal control matters.

Shareholders, employees and others also may report complaints and concerns regarding accounting, auditing or internal control matters or any other matters in accordance with our Compliance Hotline and Reporting Misconduct Policy. Our Chief Compliance, Privacy & Risk Officer is responsible for reviewing all reports received under the Compliance Hotline and Reporting Misconduct Policy and summarizing the nature of the complaint and other relevant information. The Chief Compliance, Privacy & Risk Officer will report any relevant complaints relating to accounting, auditing or internal control matters to the Audit Committee as appropriate. You can find our Compliance Hotline and Reporting Misconduct Policy in the “Investor Relations” section of our website at https://investor.ihsmarkit.com/corporate-governance.

Corporate Sustainability

Corporate sustainability is part of our philosophy in all we do, from assessing and adopting best business practices to our philanthropy, environmental concerns, and supporting our communities. It includes the way we operate, from our boardroom to our approach to learning and development, from how we think about customers to our approach to cybersecurity. We focus on areas most meaningful to our business while tracking our progress within established ESG reporting frameworks. Our vision is to improve the health and wellness of our communities and advance education with a

 

 

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priority on STEM; practice environmental stewardship and address the impact of climate change; and provide an employee experience that fosters innovation and inclusiveness. As a signatory of the UN Global Compact, we support the sustainable development goals and are proud of the progress we are making towards multiple sustainable development goals at IHS Markit. The Risk Committee of our Board is responsible for oversight of our corporate sustainability efforts and reviews at least annually periodic reports from management pertaining to corporate sustainability strategy and initiatives. We invite you to view our website (https://ihsmarkit. com/about/corporate-sustainability.html) and learn how we manage key environmental, social, and governance topics at IHS Markit. The information on the website is not deemed part of this proxy statement and is not incorporated by reference.

Director Compensation

Our non-employee directors receive compensation for their service on our Board. The objective of our program is to provide non-employee directors compensation that is straightforward, market-competitive and consistent with current peer pay levels, and that provides flexibility for income deferrals. The compensation is composed of cash retainers and equity awards. In addition, each of our non-employee directors is reimbursed for reasonable expenses related to meeting attendance and activities related to their duties as directors. The following table sets forth information concerning the non-employee director compensation program in effect at the 2020 fiscal year-end and for the 2021 fiscal year.

 

Non-Employee Director Compensation

  

2020

      

2021

 

Board Retainer

  

 

$90,000

 

    

 

$90,000

 

Lead Director Retainer

  

 

50,000

 

    

 

50,000

 

Committee Chair Retainer

  

 

 

 

    

 

 

 

Audit Committee

  

 

30,000

 

    

 

30,000

 

Human Resources Committee

  

 

30,000

 

    

 

30,000

 

Nominating and Governance Committee

  

 

30,000

 

    

 

30,000

 

Risk Committee

  

 

30,000

 

    

 

30,000

 

Annual Equity Award(1)(2)

  

 

180,000

 

    

 

180,000

 

 

1.

On the day of the Company’s annual general meeting of shareholders each year, each non-employee director receives an award consisting of restricted share units whose underlying shares have a fair market value equal to $180,000. Such awards will vest on the earlier to occur of (i) the date of the Company’s annual general meeting of shareholders occurring in the fiscal year immediately following the grant date and (ii) one year from the grant date.

 

2.

The number of shares underlying the annual equity award value is determined by dividing the value of the award by the average closing price of our common shares for the 10 trading days prior to and including the grant date.

Non-employee director compensation is reviewed at least annually by the Nominating and Governance Committee, with the assistance of the Human Resources Committee and Pay Governance LLC, the committee’s independent compensation consultant. The Nominating and Governance Committee makes recommendations about non-employee director compensation to our Board. In light of the COVID-19 pandemic, the Nominating and Governance Committee conducted a quarterly review of non-employee director compensation throughout 2020 as further explained below.

All equity awards for non-employee directors are determined by the Non-Employee Director Equity Compensation Policy, and issued pursuant to our 2014 Equity Incentive Award Plan. Non-employee directors may elect to defer their cash retainers to deferred share units. In 2020, six non-employee directors elected to defer their cash retainers to deferred share units.

 

 

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The Board believes that equity ownership in the Company by our non-employee directors is important. The annual director compensation program adopted by the Board provides that part of the annual compensation for services of the Company’s non-employee directors is an annual grant of equity awards. Each director is required to achieve and maintain ownership of common shares with an aggregate value equal to five times the annual board retainer beginning five years from the date of his or her election or appointment to the Board, unless such requirement is waived by the Board for specific circumstances. Unvested equity awards do not count towards the holding requirement. Deferred share units and common shares held indirectly but beneficially owned by the director (e.g. common shares held by spouse or a family trust) count towards the holding requirement.

Our bye-laws provide that the Company shall indemnify its officers and directors in respect of their actions and omissions, except in cases of fraud or dishonesty, and that the Company shall advance funds to its officers and directors for expenses incurred in their defense on the condition that they will repay the funds if any allegation of fraud or dishonesty is proved. In addition, the Company has entered into agreements with its officers and directors to indemnify them against such expenses and liabilities to the fullest extent permitted by law.

We also have purchased and maintain a directors’ and officers’ liability insurance policy for the benefit of any officer or director in respect of any loss or liability attaching to him or her in respect of any negligence, default, breach of duty or breach of trust, whether or not we may otherwise indemnify such officer or director.

Director Compensation During 2020

The following table sets forth information concerning the compensation of each of our non-employee directors during the 2020 fiscal year, which began December 1, 2019 and ended November 30, 2020. Non-employee directors did not receive any stock options, non-equity incentive plan compensation, or any other compensation that is not otherwise disclosed in the table below. Non-employee directors do not participate in defined benefit and actuarial pension plans or nonqualified defined contribution plans. In addition, non-employee directors may choose to defer receipt of the shares underlying the restricted share units (i) until ten (10) days after their termination of service in the case of the annual equity award and (ii) until ten (10) days after their termination of service or three years after the year in which the compensation was earned in the case of the cash retainers.

For 2020, the Board of Directors of the Company had approved an annual cash retainer and an annual equity award for all independent directors, as well as additional cash retainers for the lead director and committee chairs. In March 2020, the World Health Organization declared COVID-19 to be a pandemic and the Board and its committees reviewed the impact of the pandemic on the Company. In response to COVID-19’s potential adverse financial impact on the Company, the Board of Directors determined that temporary adjustments should be made to the annual board cash retainer for non-employee directors. The Board reduced the annual board cash retainer for non-employee directors over the course of 2020 as follows:

 

 

From May 1, 2020 to August 1, 2020, each of the non-employee directors received a 50% decrease from the annual board cash retainer; and

 

 

From August 1, 2020 to November 1, 2020, each of the non-employee directors received a 25% decrease from the annual board cash retainer.

 

 

The annual board cash retainer was adjusted back to its full amount as set out in the table above as of November 1, 2020.

 

 

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The adjusted full year 2020 fees earned and stock awards for each non-employee director are set forth in the table below.

Non-Employee Director Compensation During 2020

 

  

 

  

Fees Earned or Paid in Cash

($)(1)

       Stock Awards
($)
(2)
       Total
($)
 

John Browne

  

 

73,125

 

    

 

181,378

 

    

 

254,503

 

Dinyar S. Devitre

  

 

103,125

 

    

 

181,378

 

    

 

284,503

 

Ruann F. Ernst

  

 

73,125

 

    

 

181,378

 

    

 

254,503

 

Jacques Esculier(3)

  

 

39,334

 

    

 

121,380

 

    

 

160,714

 

Gay Huey Evans(4)

  

 

20,746

 

    

 

44,376

 

    

 

65,122

 

William E. Ford III

  

 

103,125

 

    

 

181,378

 

    

 

284,503

 

Nicoletta Giadrossi

  

 

73,125

 

    

 

181,378

 

    

 

254,503

 

Robert P. Kelly

  

 

123,125

 

    

 

181,378

 

    

 

304,503

 

Deborah Doyle McWhinney

  

 

103,125

 

    

 

181,378

 

    

 

284,503

 

Jean-Paul Montupet

  

 

103,125

 

    

 

181,378

 

    

 

284,503

 

Deborah Orida(5)

  

 

 

    

 

 

    

 

 

Richard W. Roedel(6)

  

 

33,956

 

    

 

59,998

 

    

 

93,954

 

James A. Rosenthal

  

 

73,125

 

    

 

181,378

 

    

 

254,503

 

 

1.

Includes the value of deferred share units granted to each of Messrs. Devitre, Ford, Kelly, Montupet, Roedel and Rosenthal in lieu of cash fees. For each of the non-employee directors, except for Mr. Rosenthal, the deferred share units will be distributed in IHS Markit common shares ten (10) days after the director’s service terminates. In the case of Mr. Rosenthal, the deferred share units will be distributed three years after the year in which they were earned with the delivery date being the day of the annual meeting of shareholders.

 

2.

The valuation of the share awards is the grant date fair value computed in accordance with FASB ASC Topic 718. Any estimated forfeitures are excluded from values reported in this table. For a discussion of the assumptions made in valuing these awards and a description of how we factor forfeitures into our overall equity compensation expense, refer to “Note 12—Stock-based Compensation” to our audited financial statements contained in the Annual Report.

 

3.

Mr. Esculier joined our Board on April 16, 2020. Fees paid in cash during 2020 are from April 16, 2020 to November 30, 2020 and the share award is from April 1, 2020 to November 30, 2020.

 

4.

Ms. Evans joined our Board on August 21, 2020. Fees paid in cash during 2020 are from August 21, 2020 to November 30, 2020 and the share award is from September 1, 2020 to November 30, 2020.

 

5.

Ms. Orida has agreed to waive all compensation (including any retainer fees, cash and equity awards) to which she would be entitled as a non-employee director of the Board under any compensation policy or program currently in effect or adopted by the Board in the future, other than reimbursement for reasonable expenses incurred in connection with her service on the Board. This waiver of compensation is consistent with the terms of the director nomination agreement between the Company and CPPIB. See “Corporate Governance And Board Of Directors—Organization of the Board of Directors—Director Nomination Agreement” for more information.

 

6.

Mr. Roedel retired from our Board on April 16, 2020. Fees paid in cash during 2020 are from December 1, 2019 to April 16, 2020 and the share award is from December 1, 2019 to March 31, 2020. Mr. Roedel did not receive a share award in April 2020.

 

 

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The following table sets forth information concerning the outstanding share awards held by each non-employee director on November 30, 2020:

Outstanding Share Awards at End of Fiscal Year 2020

 

  

 

   Deferred
Share Units
(#)
(1)
       Unvested Restricted
Share Units (#)
(2)
       Total Share Awards Outstanding at
Fiscal Year End (#)
 

John Browne

  

 

 

    

 

2,808

 

    

 

2,808

 

Dinyar S. Devitre

  

 

21,082

 

    

 

2,808

 

    

 

23,890

 

Ruann F. Ernst

  

 

54,953

 

    

 

2,808

 

    

 

57,761

 

Jacques Esculier

  

 

 

    

 

2,808

 

    

 

2,808

 

Gay Huey Evans(3)

  

 

 

    

 

1,268

 

    

 

1,268

 

William E. Ford III

  

 

21,257

 

    

 

2,808

 

    

 

24,065

 

Nicoletta Giadrossi

  

 

 

    

 

2,808

 

    

 

2,808

 

Robert P. Kelly

  

 

24,396

 

    

 

2,808

 

    

 

27,204

 

Deborah Doyle McWhinney

  

 

20,039

 

    

 

2,808

 

    

 

22,847

 

Jean-Paul Montupet

  

 

47,044

 

    

 

2,808

 

    

 

49,852

 

Deborah Orida(4)

  

 

 

    

 

 

    

 

 

Richard W. Roedel(5)

  

 

 

    

 

 

    

 

 

James A. Rosenthal

  

 

10,903

 

    

 

2,808

 

    

 

13,711

 

 

1.

Represents (a) deferred share units acquired in lieu of receiving cash retainers and will be delivered in IHS Markit common shares ten (10) days after termination of service, and (b) vested annual equity awards that have not yet been released because the director deferred receipt until after termination of service. For each of the non-employee directors, except for Mr. Rosenthal, the deferred share units will be distributed in IHS Markit common shares ten (10) days after the director’s service terminates. In the case of Mr. Rosenthal, the deferred share units will be distributed three years after the year in which they were earned with the delivery date being the day of the annual meeting of shareholders.

 

2.

Represents unvested restricted share units held by the non-employee directors at fiscal year-end. Each non-employee director, except Ms. Evans, Ms. Orida and Mr. Roedel received 2,808 unvested restricted share units on April 16, 2020 that will vest on April 16, 2021.

 

3.

Ms. Evans joined our Board on August 21, 2020 and received a pro-rated award of 1,268 unvested restricted share units on August 21, 2020 that will vest on April 16, 2021.

 

4.

Ms. Orida has agreed to waive all equity awards to which she would be entitled as a non-employee director of the Board under any compensation policy or program currently in effect or adopted by the Board in the future. The Board has waived the director share ownership requirements set forth in the Company’s corporate governance guidelines with respect to Ms. Orida.

 

5.

Mr. Roedel retired from our Board on April 16, 2020 and did not have any outstanding share awards at the end of the fiscal year 2020.

Upon completion of the merger with S&P Global, (i) each IHS Markit deferred share unit will be converted into an S&P Global deferred share unit on the same terms and conditions in effect immediately prior to the completion of the merger and (ii) each IHS Markit restricted share unit held by a non-employee director will be converted into an S&P Global restricted share unit on the same terms and conditions in effect immediately prior to the completion of the merger (provided that any continuing vesting requirements will lapse upon completion of the merger).

 

 

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LOGO


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Proposal 2: Vote to Approve the Compensation of our Named Executive Officers

 

 

 

At the 2017 annual general meeting of shareholders, we conducted an advisory, non-binding vote regarding the frequency with which we would seek approval of the compensation of our named executive officers.

At such meeting, shareholders expressed their preference for an annual vote on executive compensation on an advisory, non-binding basis and, consistent with this preference, the Board determined that we will conduct such a vote on an annual basis.

Accordingly, we are providing our shareholders with the opportunity to vote, on an advisory, non-binding basis, on the compensation of our named executive officers (sometimes referred to herein as “NEOs”) for 2020, as disclosed in this Proxy Statement, including the “Compensation Discussion and Analysis,” the compensation tables, and related material.

Our executive compensation program for 2020 was geared towards driving long-term, sustainable business performance. It was governed by the following key tenets:

 

 

It is fully consistent with our business objectives and strategy.

 

 

It drives accountability and transparency and aligns executive compensation with shareholder interests.

 

 

Its philosophy is designed to attract, retain and motivate top talent.

 

 

It is globally consistent and locally competitive.

 

 

Its short-term incentives are aligned to key business objectives appropriate to colleague role and business segment.

 

 

Its long-term incentives align colleague and shareholder interests and promote shareholder return.

 

 

It creates a pay-for-performance culture that is incentivized to achieve business performance that will sustain growth across the Company.

 

 

It takes into account both affordability and our risk appetite, ensuring that our incentive plans do not encourage any undue risk taking, while striving to avoid any undue complexity.

 

 

It strengthens alignment with shareholders, through significant share ownership guidelines that apply to both executive officers and directors.

The Human Resources Committee continually reviews the compensation programs for our NEOs to ensure they achieve the desired goals of aligning our executive compensation structure with our shareholders’ interests and current market practices.

We are asking our shareholders to indicate their support for our NEO compensation program and practices as described in this Proxy Statement. This proposal, commonly known as a “say-on-pay” proposal, gives our shareholders the opportunity to express their views on our NEOs’ compensation. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our NEOs and the philosophy, policies, and practices described in this Proxy Statement.

We are asking our shareholders to approve the compensation program and practices of our NEOs as described in this Proxy Statement.

 

 

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Vote Required and Recommendation

The say-on-pay vote is advisory and therefore not binding on the Company, the Human Resources Committee, or the Board. The Board and the Human Resources Committee value the opinions of our shareholders and, to the extent there is a significant vote against the named executive officer compensation policies and practices as disclosed in this Proxy Statement, we will consider our shareholders’ concerns and the Human Resources Committee will evaluate whether any actions are necessary to address those concerns.

Unless you instruct us to the contrary, proxies will be voted “FOR” this Proposal 2 regarding named executive officer compensation policies and practices, as described in the “Compensation Discussion and Analysis,” and the other related tables and disclosures in this Proxy Statement.

With respect to Proposal 2, you may instruct to vote “FOR” or “AGAINST,” or “ABSTAIN” from voting on, such proposal. If you “abstain” from voting, your vote is not considered a vote cast and will have no effect for such proposal. If you do not provide your broker or other nominee with instructions on how to vote your shares with respect to Proposal 2, your broker or nominee will not be entitled to cast votes and a “broker non-vote” on Proposal 2 will result. Broker non-votes are not considered votes cast and will have no effect on the vote for this proposal.

 

 

THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS, AS DISCLOSED IN THIS PROXY STATEMENT

 

 

 

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Report of the Human Resources Committee

 

 

The Human Resources Committee of the Board of Directors has reviewed and discussed with Company management the Compensation Discussion and Analysis section of this Proxy Statement.

Based on such review and discussion, the Human Resources Committee has recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement.

Respectfully submitted by the members of the Human Resources Committee of the Board of Directors:

 

Mr. William E. Ford, Chair
John Browne (The Lord Browne of Madingley)
Mr. Robert P. Kelly
Mr. Jean-Paul L. Montupet
Ms. Deborah Orida
Mr. James A. Rosenthal

The foregoing report of the Human Resources Committee does not constitute “soliciting material” and shall not be deemed filed or incorporated by reference into any other filing by IHS Markit under the Securities Act or the Exchange Act.

 

 

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Compensation Discussion and Analysis

 

 

LOGO   On behalf of the Human Resources Committee (the “HR Committee”) of the Board, I am pleased to present the Compensation Discussion & Analysis (the “CD&A”) for the Company’s fiscal year ended November 30, 2020 and certain elements of the 2021 compensation program for our named executive officers.

The CD&A reviews the Company’s business performance for the year and the annual compensation of our named executive officers for achieving those performance levels. The key decisions made by the HR Committee over the year are also discussed and we highlight changes to the executive pay structure in response to feedback received from our institutional shareholders.

William E. Ford III

Chair of the Human Resources Committee

Shareholder Considerations at a Glance

1. Business performance for 2020

 

 

LOGO

 

 

Continued efforts to best serve our customers with an increased focus on innovative offerings and enhancements.

 

 

Continued investment in our people, with significant time and effort on best practices with respect to employee engagement and diversity and inclusion.

 

 

2020 total organic revenue growth excludes impact of cancelled events and the 2019 BPVC release.

 

 

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2. Compensation framework designed to drive performance

 

LOGO               

–  Shareholder aligned compensation philosophy and responsible use of equity for employee compensation.

 

–  In response to the 97.7 percent support of our 2020 advisory vote on named executive officer compensation and positive shareholder feedback, the HR Committee maintained the key features of our compensation program and is committed to limiting our annual equity award dilution for 2021 to an annual run rate of 0.70 percent of total common shares outstanding, which is less than previous years and in line with our longer-term target of 0.80 percent or less.

 

–  Strong equity ownership policy and retention requirements.

3. Strong alignment between performance and compensation

Annual Cash Incentive

 

 

LOGO

 

 

The annual cash incentive plan performance targets delivered a payout of 56.0 percent of Target as adjusted by the HR Committee. However, the HR Committee used its discretion to adjust the actual payout to 86.5 percent of Target after the HR Committee considered management’s overall performance during 2020 and in leading the Company through the COVID-19 pandemic against a resilience scorecard that had been previously approved by the HR Committee to guide its analysis. This increased payout percentage aligned the payout percentage for the NEOs under the cash incentive plan to the payout percentage used generally for employees in the Company’s corporate functions. Please see “2020 Executive Compensation Design and Actions–Cash Incentive Plan” for further discussion.

Long-Term Equity-Based Incentive: 2018-2020 Performance Share Units

 

 

LOGO

 

 

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Financial Performance and Compensation in 2020

How Did We Perform?

Table 1. Financial Performance

 

  

 

   2020      2019        % Change  

Revenue (in millions except %)

   $ 4,287.8      $ 4,414.6          (3)%  

Organic Revenue(1) (Growth %)

     0%        6%           

Net income attributable to IHS Markit(2) (in millions except %)

   $ 870.7      $ 502.7          73%  

Adjusted EBITDA (in millions except %)

   $ 1,836.7      $ 1,778.9          3%

Cash flow from operations (in millions except %)

   $ 1,138.8      $ 1,251.3          (9%)  

Free cash flow(3) (in millions except %)

   $ 939.9      $ 973.2          (3%)  

GAAP EPS

   $ 2.17      $ 1.23          76%  

Adjusted EPS

   $ 2.84      $ 2.63          8%  

Share price (November 30, 2020 and November 29, 2019)

   $ 99.46      $ 72.65          36%  

 

1.

Total organic revenue growth has been normalized to exclude the impact of cancelled events in 2020 and the biennial release of the Boiler Pressure Vessel Code (“BPVC”) in the third quarter of 2019. Full year 2020 total organic revenue growth including events and BPVC is -1 percent.

 

2.

Net income attributable to IHS Markit for the year ended November 30, 2020 includes an approximate $377 million gain on sale related to the A&D business line divestiture in December 2019. Net income attributable to IHS Markit for the year ended November 30, 2019 includes a one-time net tax expense of approximately $150 million associated with U.S. Treasury regulations related to U.S. tax reform retroactive to 2018.

 

3.

Free cash flow for the year ended November 30, 2020 was impacted by distributions associated with the settlement of our U.S. and U.K. pension plans, cash payments related to restructuring activities, and negative impacts on working capital from the current market conditions.

 

 

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In light of the COVID-19 pandemic, we believe we achieved solid financial, operational and strategic results for 2020.

We achieved zero percent organic revenue growth on a normalized basis during the COVID-19 pandemic, expanded Adjusted EBITDA margin, and achieved 8% Adjusted EPS growth. We delivered solid financial results in our Financial Services segment and responded proactively to the COVID-19 pandemic to work with our customers in our other segments, increasing focus on driving adoption of newer products, accelerating product innovation across our portfolio and completing integrations of acquisitions, which puts us in a strong position across the company entering 2021.

We have made continued strides against our strategic initiatives focusing on technology and products, our customers, and our people, which will help us continue to deliver against our longer-term financial objectives. We have also made significant progress in leveraging our advanced analytics capabilities across our core data assets to assist our customers in their decision-making, including improved asset valuations and new benchmarking services across our segments.

Throughout this CD&A, we refer to Adjusted EBITDA, Adjusted EPS and free cash flow. These are non-GAAP financial measures used to supplement our financial statements which are based on U.S. Generally Accepted Accounting Principles (“GAAP”). For a definition and discussion of these measures, see “—Definitions of Non-GAAP Financial Measures.” We also refer to Revenue, which is a GAAP financial measure. Unless otherwise stated or the context requires, all references to Revenue refer to corporate Revenue.

How Is Executive Officer Compensation Linked to Company Performance?

The chart below shows the Company’s annual Total Shareholder Return (“TSR”) performance against the S&P 500 Index since our initial public offering on June 19, 2014. The S&P 500 Index is the most appropriate index against which TSR should be measured, as it is widely used and understood, and IHS Markit is a constituent part of the index.

As shown below, our TSR since our initial public offering was 79 percent higher than the S&P 500 Index during the same period. A $100 investment made on June 19, 2014 in our common shares would have been worth approximately $376 as of November 30, 2020, whereas the same investment in the S&P 500 Index would have been worth approximately $211.

 

 

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TSR represents the cumulative share price appreciation plus reinvestment of dividends on the ex-dividend date. Because Markit became the public combined group holding company and was considered the legal acquirer in the 2016 Merger, these shareholder return calculations are based on the beginning value of Markit common shares pre-merger and IHS Markit common shares following the 2016 Merger.

Total Shareholder Return Since IPO vs. S&P 500 Index

 

 

LOGO

For 2020, our TSR grew 38 percent, which was 18 percent higher than the S&P 500 Index. A $100 investment made on December 1, 2019 in our common shares would have been worth approximately $138 as of November 30, 2020, whereas the same investment in the S&P 500 Index would have been worth approximately $117.

Total Shareholder Return During 2020 vs. S&P 500 Index

 

 

LOGO

 

 

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Leadership Structure

Significant management focus on stabilizing the business during the COVID-19 pandemic crisis, business efficiencies, margin contribution, sustainability and culture.

Our executive officers have continued to deliver strong operating and financial performance in their respective businesses. In January 2020, the Board, upon the recommendation of the Nominating and Governance Committee, reviewed the Company’s executive officers and designated the Chairman and CEO, Chief Financial Officer (“CFO”), President of Financial Services, Chief Administrative Officer and General Counsel, Executive Vice President Global Energy and Natural Resources, and Executive Vice President Transportation, as executive officers of the Company.

This CD&A describes IHS Markit’s executive compensation program for 2020, as well as certain elements of the 2021 compensation program for our named executive officers (“NEOs”).

As of November 30, 2020, the Company’s named executive officers were:

 

LOGO   

Lance Uggla

Chairman and CEO

LOGO   

Todd Hyatt

Executive Vice President and Chief Financial Officer until January 31, 2020

LOGO   

Jonathan Gear

Executive Vice President, President of Resources, Transportation & CMS until January 31, 2020 Executive Vice President and Chief Financial Officer from February 1, 2020

LOGO   

Adam Kansler

Executive Vice President, President of Financial Services

LOGO   

Sari Granat

Executive Vice President, Chief Administrative Officer & General Counsel

LOGO   

Brian Crotty

Executive Vice President, Global Energy and Natural Resources

Effective February 1, 2020, Mr. Gear, our President of Resources, Transportation & CMS, became our Chief Financial Officer when Mr. Hyatt stepped down from that position and became a special advisor to the CEO. Mr. Hyatt fully retired from the Company on February 26, 2021. Further information about our current executive officers can be found in the Annual Report under “Item 1. Business—Information About Our Executive Officers.”

 

 

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Shareholder Engagement on Compensation Practices

Commitment to active engagement with our shareholders.

Engagement with our shareholders has always been a significant priority for us, and we invest focused time and resources speaking with shareholders about our corporate governance and executive compensation practices. We have also considered the results of the advisory, non-binding vote on the compensation of our NEOs at our 2020 annual general meeting of shareholders, which shareholders approved by 97.7 percent of the votes cast.

 

 

We have had discussions with certain shareholders about annual equity award dilution and we are actively managing our annual share run rate usage. We have decreased our annual equity award dilution from an annual run rate of 1.25 percent of total common shares outstanding in 2017, and for 2021 we are committed to limiting our annual equity award dilution to an annual run rate of 0.70 percent of total common shares outstanding, which is less than previous years and in line with our longer-term target of 0.80 percent or less. Our run rate includes the outperformance impact of any performance share unit payouts.

Annual Equity Award Dilution as a % of total common shares outstanding 2017—2021

 

 

LOGO

 

 

We have revised our equity award agreements to introduce non-competition and non-solicitation covenants and a clawback upon breach of certain restrictive covenants.

For more information on changes we made to our governance practices and disclosure in response to our shareholder engagement, please see “Corporate Governance and Board of Directors—Shareholder Engagement.”

 

 

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Compensation Governance Practices

The HR Committee places substantial importance on aligning executive compensation programs with shareholder interest and strong governance policies and practices.

IHS Markit is committed to governance policies and practices that are designed to ensure effective oversight of our executive compensation programs while driving performance and aligning management’s interests with that of our shareholders.

Compensation Governance Highlights

 

What we do...

   What we do not do...
   Pay-For-Performance    X    Provide Excess Perquisites
   Share Ownership Policy    X    Provide Excise Tax Gross-ups
   Hedging and Pledging Policy    X    Shareholder Rights Agreement (poison pill)
  

Incentive Compensation

Recoupment (Clawback) Policy

   X    Single Trigger on Equity Awards
   Engagement with Shareholders    X    Re-pricing of Options or Stock Appreciation Rights without Shareholder Approval
   Limit on Equity Dilution    X    Re-pricing of Underwater Options and Cash Buyouts without Shareholder Approval
   Restrictive Covenants      

 

  

 

Equity Retirement Policy

   X    Ongoing Service-Based Pension Benefit Accruals

 

  

 

Independent Compensation Committee                         

       
   Independent Compensation Consultant      

 

 

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Pay-For-Performance

We aim to motivate and reward the achievement of specific annual and long-term financial objectives linked to our business strategy.

A majority of total compensation for our executive officers is delivered in performance-based components through annual and long-term incentives that are linked to financial objectives of the Company.

The HR Committee sets appropriate performance targets at the beginning of each fiscal year. At the end of the fiscal year, the HR Committee determines the extent to which these targets have been satisfied, based on audited results, and approves the level of annual cash incentives to be paid based on the incentive program established at the beginning of the year.

For our Chairman and CEO, 100 percent of his long-term equity-based incentives are in the form of restricted share units with performance-based vesting (“performance share units” or “PSUs”).

For other executive officers, 50 percent of their long-term equity-based incentives are in the form of PSUs and 50 percent are in the form of restricted share units with time-based vesting (“restricted share units” or “RSUs”).

For long-term equity-based incentives in the form of PSUs, we ensure metrics are aligned with our external financial commitments to incentivize performance. These metrics are aligned with shareholder interests through the delivery of common shares and long-term time horizons.

Share Ownership Policy

We believe that it is important that executive officers build up a significant holding in our common shares to align their interests with those of shareholders. The HR Committee has adopted a share ownership policy for the Company’s executive officers. Executive officers are required to hold equity in the Company with an aggregate value equal to a multiple of base salary.

Share Ownership Requirement

 

   
Chairman and CEO    Six (6) times annual base salary                                                                                                                                                      
   
Other NEOs    Three (3) times annual base salary   

Unvested awards and unexercised options do not count towards the holding requirement although they are reviewed to ensure the executive officers have adequate opportunity to meet the ownership requirement under the policy. Common shares held indirectly but beneficially owned by the executive officers (e.g., common shares held by spouse or a family trust) count towards the holding requirement under the policy. Executive officers have five years from their appointment as an executive officer to achieve their required holdings.

Hedging and Pledging Policy

Our hedging policy applies to directors, executive officers and employees and prohibits them from entering into any hedging or derivative transactions that are designed to hedge or offset any decrease in the market value of IHS Markit equity securities, or speculate on any change in the market value of IHS Markit equity securities. Stock options granted to employees are not covered by the prohibition.

Our pledging policy applies to directors and senior executives (including executive officers) and prohibits them from purchasing IHS Markit securities on margin or holding IHS Markit securities in a margin account or otherwise pledging IHS Markit securities as collateral for a loan without the prior approval of the Nominating and Governance Committee of the

 

 

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Board. Requests are evaluated on a case-by-case basis and have been granted in limited circumstances after giving consideration to the number of IHS Markit securities to be purchased on margin or otherwise pledged as a percentage of total shares held and total shares outstanding. In May 2019, the Nominating and Governance Committee approved a pledge by our Chairman and CEO of 150,982 common shares as collateral to secure certain personal indebtedness.

Incentive Compensation Recoupment (Clawback) Policy

We may require the return, repayment or forfeiture of any annual or long-term incentive compensation payment or award, whether in the form of cash or equity, made or granted to any current or former executive officer during the three-year period preceding a triggering event as defined in our policy on recovery of incentive compensation. Under these provisions, the HR Committee may apply clawback or malus adjustment in circumstances which have: (a) resulted in a level of vesting or payment that is higher than would have been otherwise, due to a material misstatement of IHS Markit’s financial results or (b) led to a material financial or reputational loss for IHS Markit due to serious individual misconduct.

In 2020, we updated our equity award agreements for all equity participants to better align our practices to those of other companies in similar competitive industries, including giving us the right to recoup the value of the award if an award recipient violates specified confidentiality, non-competition or non-solicitation provisions.

Engagement with Shareholders

We engage actively with our major shareholders throughout the year regarding executive compensation and corporate governance matters. Please see “—Shareholder Engagement on Compensation Practices” and “Corporate Governance and Board of Directors—Shareholder Engagement.”

Limit on Equity Dilution

We made a commitment to shareholders to limit our annual equity award dilution and we intend to continue to manage our equity award share usage. For 2021, we are committed to limiting our annual equity award dilution to an annual run rate of 0.70 percent of total common shares outstanding, which is less than previous years and in line with our longer-term target of 0.80 percent or less. Our run rate includes the outperformance impact of performance share unit payouts.

Restrictive Covenants

We condition grants of equity incentive awards on execution of a non-solicitation, non-competition and non-disclosure agreement.

Equity Retirement Policy

We have introduced an Equity Retirement Policy to ensure that equity vesting upon retirement is fair and consistent across all executive officers and employees.

Independent Compensation Committee

All members of the HR Committee are independent in accordance with NYSE listing requirements, SEC rules, our Corporate Governance Guidelines and the HR Committee charter.

Independent Compensation Consultant

The HR Committee has retained Pay Governance LLC (“Pay Governance”) as an independent compensation consultant. Pay Governance performs no other services for the Company and has no conflicts of interest. Pay Governance regularly provides full disclosure to the HR Committee about the consultant independence factors considered by the SEC as well as Pay Governance’s independence policy.

 

 

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No Excess Perquisites

We do not provide excess perquisites to NEOs.

No Excise Tax Gross-ups

No NEO has any excise tax gross-up protection.

No Shareholder Rights Agreement

We do not currently have a shareholder rights agreement, commonly referred to as a “poison pill.”

No Single Trigger on Equity Awards

Since 2017, we have unified equity award terms so that awards will not automatically vest solely in the event of a change in control of the Company without an associated termination of employment.

No Repricing of Options or Stock Appreciation Rights without Shareholder Approval

The repricing of options or stock appreciation rights are only allowed with shareholder approval.

No Repricing of Underwater Options and Cash Buyouts without Shareholder Approval

The repricing of underwater options and cash buyouts are only allowed with shareholder approval.

No Ongoing Service-Based Pension Benefit Accruals

With the termination of our Retirement Income Plan and Supplemental Income Plan, no NEOs accrue any service-based pension benefits.

 

 

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2020 Executive Compensation Philosophy

The HR Committee believes the philosophy and design of our executive compensation program is integral in furthering its key tenets, including pay for performance and effective risk management.

Our executive compensation program for 2020 was geared towards driving long-term, sustainable business performance. It was governed by the following key tenets:

 

 

It is fully consistent with our business objectives and strategy.

 

 

It drives accountability and transparency and aligns executive compensation with shareholder interests.

 

 

Its philosophy is designed to attract, retain and motivate top talent.

 

 

It is globally consistent and locally competitive.

 

 

Its short-term incentives are aligned to key business objectives appropriate to colleague role and business segment.

 

 

Its long-term incentives align colleague and shareholder interests and promote shareholder return.

 

 

It creates a pay-for-performance culture that is incentivized to achieve business performance that will sustain growth across the Company.

 

 

It takes into account both affordability and our risk appetite, ensuring that our incentive plans do not encourage any undue risk taking, while striving to avoid any undue complexity.

 

 

It strengthens alignment with shareholders, through significant share ownership guidelines that apply to both executive officers and directors.

With these key tenets, we operationalized the executive compensation program as follows:

 

 

The program reasonably balances: (a) fixed versus variable pay and (b) short-term versus long-term incentives.

 

 

All incentive plans have specific, financial-based metrics that directly support our near-term and long-term business objectives.

 

 

The annual cash incentive performance metrics for executive officers are Revenue and Adjusted EBITDA, with an individual modifier that provides reasonable levels of upside and downside leverage.

 

 

Long-term incentives are delivered in the form of PSUs and RSUs instead of stock options to manage dilution.

 

 

PSUs are earned based on three-year cumulative Adjusted EBITDA and three-year cumulative Adjusted EPS growth with a relative TSR modifier that prevents above-target payouts if TSR performance is negative. For a definition and discussion of these measures, see “—Definitions of Non-GAAP Financial Measures.”

 

 

Both short-term and long-term incentives are subject to (a) threshold levels of performance below which no incentives are paid and (b) performance caps above which no additional incentives are paid.

 

 

Benefits are provided as part of a competitive and cost-effective overall remuneration package, including a market-aligned retirement program.

 

 

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2020 Executive Compensation Design and Actions

In 2020, our executive officers had a compensation program that included:

 

Pay Element   Pay Philosophy   Components   Performance Element

 

Base Salary

 

 

Competitive level of fixed pay to recognize the individual’s role, expertise, experience, and responsibilities

 

Base salary level takes account of the individual contribution and performance against IHS Markit’s strategy

 

 

 

Cash-base salary is paid in installments during the year

 

 

Evaluated annually

 

Individual performance

considered when assessing individual pay level

 

To ensure pay equity,

we regularly assess pay against role, scope and responsibilities

 

       
Benefits   Provided as part of a competitive and cost- effective overall remuneration package  

Medical insurance

 

Life insurance

 

401(k) plan (or other type of pension scheme for executive officers located outside the U.S.) and matching contributions

 

  The cost of providing such benefits may vary from year to year, reflecting the cost to the business
       
Annual Cash Incentive  

Annual incentive target aimed to motivate and reward the achievement of predetermined annual corporate and individual objectives linked to company strategy

 

Provides annual recognition of superior operational and financial performance

 

The HR Committee sets appropriate performance targets at the beginning of each fiscal year

 

At the end of the fiscal year, the HR Committee determines the extent to which the performance targets have been satisfied based on audited financial results, and approves the level of cash incentive to be paid

 

 

Cash payout opportunity of zero (0) percent to 200 percent of target

 

Threshold performance results in a bonus payout equivalent to a percentage of target, but no bonus is payable for below-threshold performance

 

Targets are adjusted for foreign exchange and acquisitions

  Performance for the annual cash incentive is measured in terms of Revenue and Adjusted EBITDA metrics
       
Long-Term Equity-Based Incentive  

Long-term incentive target aimed to support long-term strategy and alignment with shareholders by tying a significant portion of total pay to long-term Company financial and share price performance

 

The HR Committee ensures sufficient stretch targets are set

 

No time-based vesting equity awards for the Chairman and CEO

 

100 percent PSUs for Chairman and CEO

 

50 percent PSUs and 50 percent RSUs for other NEOs

 

100 percent Partner Unit Plan (“PUPs”) for Senior Vice President and Partners

 

PSU payout opportunity is zero (0) percent to 200 percent of target based on performance

 

Performance for PSUs is measured in terms of 3-year cumulative Adjusted EBITDA, 3-year cumulative Adjusted EPS and 3-year TSR relative to the S&P 500 Index

 

PUPs have the same performance measurement and terms as PSUs but a longer vesting period of five years – vesting ratably in years 3,4 and 5

 

We use a TSR modifier to ensure a direct connection between executive officers and shareholders relative to our performance against the S&P 500 Index

 

 

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Compensation Benchmarking for 2020

The HR Committee makes individual compensation determinations for executive officers based on a number of factors, including the nature and scope of each executive officer’s duties, individual experience and performance, internal pay positioning, and the pay levels for executive officers in similar positions within our peer group of companies. The HR Committee also considers the individual elements of compensation for each executive officer against data from a peer group of companies and S&P 500 Index data. It makes compensation determinations based on total pay opportunities for each executive officer.

In connection with 2020 compensation decisions, and in light of the COVID-19 pandemic, the HR Committee decided to maintain the same peer group of 14 intelligence development or financial/ analysis processing companies as was used for 2019 to assess executive officers’ compensation.

The HR Committee believed this peer group of companies appropriately reflected the companies against which our financial performance was measured and with which we competed for business and executive talent, as it included companies that:

 

i.

provided broad industry information and analytics;

 

ii.

provided financial services processing solutions;

 

iii.

provided managed services and software solutions; and

 

iv.

positioned IHS Markit at the 47th percentile of the peer group in terms of market capitalization as of November 30, 2020 and the 33rd percentile of the peer group in terms of revenue as of the time the HR Committee reviewed the peer group and based on the latest financial year-end disclosed revenue of the peer group.

As a result, the HR Committee reviewed S&P 500 Index data and data from the following identified peer group of companies to benchmark our compensation competitiveness for 2020.

IHS Markit 2020 Peer Group for Compensation Benchmarking

 

Broadridge Financial Solutions, Inc.    CME Group Inc.    Equifax Inc.
Fidelity National Information Services Inc.    Fiserv, Inc.    Gartner, Inc.
Intercontinental Exchange, Inc    Moody’s Corporation    MSCI Inc.
RELX PLC    S&P Global, Inc.    Thomson Reuters Corporation
TransUnion    Verisk Analytics, Inc   

 

 

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Target Setting Process

The performance measures we currently use in our cash incentive and long-term incentive plans are based on our financial performance and individual objectives. Our performance management process, which we use throughout IHS Markit, assesses executive officers against both financial and non-financial objectives. The non-financial objectives focus on colleague and customer engagement and satisfaction, operational excellence and motivation. The executive officers’ performance against their individual objectives ultimately supports our financial performance, so we believe it is appropriate that financial measures remain the key incentive plan measures. These seek to ensure that the executive officers deliver the underlying financial performance of the business, whilst clearly aligning with the interests of shareholders, customers, colleagues and other stakeholders.

For all elements of our incentive programs, we take a number of factors into account when setting targets, including both internal and external expectations. These include analysts’ expectations, peer group earnings estimates, wider economic expectations, the latest internal projections for the current year, the budget, and the strategic plan.

Prior to finalizing the targets, the HR Committee undertakes a rigorous exercise at multiple meetings over the course of the year to review and consider the targets to ensure that they are appropriate in the context of expected performance and provide for a sufficient stretch in our performance. Targets are structured as a sliding scale, with maximum awards only payable for the achievement of significant levels of over-performance.

How do we set the cash incentive targets?

Every year we undertake a rigorous exercise to ensure that our targets are sufficiently stretched. Before finalizing the targets, the HR Committee reviews the targets at three separate HR Committee meetings during the year.

 

 

Step 1

 

 

  

 

Step 2

 

 

  

 

Step 3

 

 

At its October meeting, the HR Committee considers the wider context, and is presented with an early indication of how performance is tracking in the current year.    At its December meeting, the HR Committee has a first look at possible targets for the forthcoming year, taking into account a number of factors including:    At its January meeting, the HR Committee certifies the performance results of the prior year and approves the performance targets for the current year.
The HR Committee’s independent compensation consultant is invited to provide the HR Committee with an assessment of the pay environments in the relevant locations for our business, including shareholder expectations.   

Our strategic plan and annual budget

 

–  Analysts’ expectations

 

–  Wider economic expectations

 

–  Our peer group’s earnings estimates

   The HR Committee considers the prior year performance during its final review and approval of the current year targets.

 

 

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Total Pay Mix

 

LOGO             For 2020, variable compensation represented 94 percent of the direct compensation for the CEO, and 81 percent of the direct compensation on average for the other NEOs.

Base Salary

Base salary provides our NEOs with a predictable level of income that is competitive with our peers.

We made no increases to the base salaries of Mr. Uggla and Mr. Crotty in 2020. The HR Committee had reviewed Mr. Uggla’s base salary against the peer group of companies and decided to maintain his base salary at $1,200,000. Mr. Crotty’s base salary was already aligned with the peer group of companies and internal peers and did not require further adjustments for his increased role responsibilities.

In 2020, the base salaries of Mr. Hyatt, Mr. Gear, Mr. Kansler and Ms. Granat were adjusted as follows:

 

LOGO  

Mr. Hyatt’s role was reviewed against the current peer group of companies and the HR Committee approved an increase of his base salary by 8.0 percent from $601,800 to $650,000, effective as of March 1, 2020. In July 2020, Mr. Hyatt’s base salary was adjusted down to $35,568 to reflect his part-time position as a Special Advisor to the CEO as he transitioned to retirement.

 

LOGO  

Mr. Gear’s role changed during 2020 when he became Executive Vice President and Chief Financial Officer. Following a review of Mr. Gear’s new role against our peer group data, the HR Committee approved an increase of his base salary by 8.3 percent from $600,000 to $650,000, effective as of March 1, 2020.

 

LOGO  

Mr. Kansler’s role was expanded with the acquisition of Ipreo and a responsibility over a larger Financial Services business and he became Executive Vice President, President of Financial Services. Following a further review of Mr. Kansler’s expanded role against our peer group data, the HR Committee approved an increase of his base salary by 8.3 percent from $600,000 to $650,000, effective as of March 1, 2020.

 

LOGO   Ms. Granat’s role and responsibilities as Executive Vice President, Chief Administrative Officer and General Counsel were benchmarked against our peer group data, and the HR Committee approved an increase of her base salary from $550,000 to $575,000, effective as of March 1, 2020.

 

 

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In March 2020, in response to the COVID-19 pandemic’s potential adverse financial impact on the Company, and at the request of the named executive officers, the HR Committee approved reductions in the base salaries of the NEOs for 2020 as follows:

 

   

From April 1, 2020 to August 1, 2020, a 50% decrease in the base salary of the Chairman and Chief Executive Officer and a 40% decrease in the base salary of the other NEOs;

 

   

From August 1, 2020 to November 1, 2020, a 25% decrease in the base salary of the Chairman and Chief Executive Officer and a 20% decrease in the base salary of the other NEOs (other than Mr. Hyatt).

In October 2020, the HR Committee reviewed its previous reductions in the base salaries of the NEOs and approved reverting the base salaries to their 2020 unadjusted levels, effective November 1, 2020 and going forward. Mr. Hyatt, whose compensation had been adjusted in July 2020 to reflect his part-time position as a Senior Advisor to the CEO, was not adjusted by the HR Committee as of August or November 2020.

Unadjusted base salaries for 2019 and 2020 as well as earned base salaries for 2020 reflecting the various adjustments made by the HR Committee over the course of 2020 are set forth in the following table.

Table 2. NEO 2019 and 2020 Base Salary

 

  

 

     

 

  

2019 Target Base Salary
(March 1, 2019)

($)

    

    2020 Target Base Salary
(March 1, 2020)

($)

    

        2020 Earned
Base Salary

($)(1)

 
LOGO    Lance Uggla      1,200,000        1,200,000        925,000  
LOGO    Todd Hyatt(2)      601,800        650,000        327,677  
LOGO    Jonathan Gear      600,000        650,000        518,333  
LOGO    Adam Kansler      600,000        650,000        518,333  
LOGO    Sari Granat      550,000        575,000        463,333  
LOGO    Brian Crotty      506,556        506,556        413,687  

 

1.

Reflects the adjustments made to the base salaries of the NEOs over the course of 2020.

 

2.

In July 2020, Mr. Hyatt’s base salary was adjusted down to $35,568 to reflect his part-time position as a Special Advisor to the CEO as he transitioned to retirement.

 

 

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Cash Incentive Plan

In 2017, the HR Committee approved a cash incentive plan for executive officers providing target incentive opportunities as a percentage of base salary that could pay out above or below target based on financial performance (with payout ranges from 0 percent to 200 percent of target) setting Adjusted EBITDA and Revenue as the financial metrics to determine cash incentive payouts. The HR Committee did not change the structure of the cash incentive plan for the executive officers in 2020, maintaining Adjusted EBITDA and Revenue as the financial metrics for 2020.

In 2019, the Company’s actual Adjusted EBITDA was $1.779 million and actual Revenue was $4.415 million. In January 2020, the HR Committee originally set Adjusted EBITDA and Revenue targets for the 2020 cash incentive plan as $1.890 million and $4.600 million, respectively, in line with the high end of our external shareholder guidance at the beginning of 2020.

In March 2020, in light of the COVID-19 pandemic, we made a decision to cancel our customer events, particularly our annual CERAWeek event. Cancellation of these events resulted in a $50 million negative impact to our revenue for the year in our Resources and Transportation segments.

In January 2021, the HR Committee reviewed the Company’s full year 2020 performance against the original performance targets for the 2020 cash incentive plan and considered the extraordinary events that took place over the course of 2020. The HR Committee exercised its discretion to adjust the original performance targets in order to reflect the extraordinary cancellation of our customer events during 2020 as a result of the COVID-19 pandemic. As a result, the HR Committee reduced the Adjusted EBITDA and Revenue targets for the 2020 cash incentive plan by $40 million and $50 million, respectively, to set Adjusted EBITDA and Revenue targets of $1.850 million and $4.550 million, respectively, for purposes of evaluating our financial performance under the 2020 cash incentive plan. The adjusted financial targets and actual 2020 results are set forth in the following table.

Table 3. 2020 Cash Incentive Plan Adjusted Metrics and Actual Results

 

 

 

    

 

     Adjusted EBITDA (60%)      Revenue (40%)       

 

 
Level    Performance as
a Percentage of
Target
    

2020

Goal
(in millions)

     Payout as a
Percentage
of Target
     2020 Goal
(in millions)
     Payout as a
Percentage
of Target
    

Total Payout as

a Percentage
of Target

 

Maximum

  

 

105%

 

  

 

$1,942.5.5

 

  

 

200%

 

  

 

$4,777.5

 

  

 

200%

 

    

 

 

 

 

 

Above Target

  

 

102.5%

 

  

 

$1,896.3

 

  

 

150%

 

  

 

$4,663.8

 

  

 

150%

 

    

 

 

 

 

 

Target

  

 

100%

 

  

 

$1,850.0

 

  

 

100%

 

  

 

$4,550.0

 

  

 

100%

 

    

 

 

 

 

 

Actual Adjusted EBITDA

    

 

 

 

 

 

  

 

 

 

$1,837.0

 

 

  

 

 

 

93.4%

 

 

    

 

 

 

 

 

    

 

 

 

 

 

    

 

 

 

 

 

Threshold

  

 

95%

 

  

 

$1,757.5

 

  

 

50%

 

  

 

$4,322.5

 

  

 

50%

 

    

 

 

 

 

 

Below Threshold

  

 

<95%

 

  

 

$<1,757.5

 

  

 

0%

 

  

 

$<4,322.5

 

  

 

0%

 

    

 

 

 

 

 

Actual Revenue

    

 

 

 

 

 

    

 

 

 

 

 

    

 

 

 

 

 

  

 

$4,288.0

 

  

 

0%

 

    

 

 

 

 

 

Actual Results

    

 

 

 

 

 

    

 

 

 

 

 

    

 

 

 

 

 

    

 

 

 

 

 

    

 

 

 

 

 

  

 

56.0%  

 

Recommended Payout

 

     86.5%    

 

 

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Why is the 2020 Cash Incentive payout for NEOs an exception?

The HR Committee reviewed the Company’s performance against the adjusted financial performance metrics and considered management’s overall performance during 2020 and in leading the Company through the COVID-19 pandemic against a resilience scorecard that had been previously approved by the HR Committee to guide its analysis, which included the following factors:

 

Resilience Factor    Management Performance
Voluntary Salary Adjustments:    The COVID-19 pandemic and related restrictions on travel and the way the Company worked had a profound and immediate impact on the Company, its customers and the global economy. Due to these exceptional and unforeseen circumstances, the members of the executive team volunteered to reduce their salaries generating savings of approximately $1.3 million.
Financial operations:   

The executive team took actions during the pandemic to reduce expenses by approximately $245 million against the Company’s original budget for 2020 and implemented targeted investment to support forward revenue growth, including:

 

Actioned expense savings such as workforce reductions, contractor spend, events, travel reductions, and office closures.

 

Revenue-led expense reductions such as variable costs that adjust with revenue (particularly within the Automotive segment), travel and expense, commissions, and royalties.

Leadership, Employees

and Customers:

  

The Company saw several leadership moments by its executive team to continue deliver the best possible outcomes for all stakeholders.

 

–  Its leaders embraced new ways of working for all employees, developed an agile and continuous learning mindset across IHS Markit and focused on the intersection of employee and IHS Markit through wellbeing activities and an increased focus on employees’ safety.

 

–  The Company also saw a stronger relationship between the Company and its customers as well as the development of new products and tools such as Expert Connect, a new on-demand consultation service to provide rapid, actionable answers to clients.

Strong shareholder confidence:    Following leadership actions taken during the early days of the COVID-19 pandemic, the Company saw its share price rebound to pre-pandemic levels.

Given the Company’s performance during the year, the factors set out above and the results the Company was able to achieve despite the COVID-19 pandemic, the HR Committee recognized the exceptional nature of 2020 in terms of performance and results, as well as the strong performance of the NEOs and the rest of the leadership team in leading the Company through unprecedented times. The HR Committee used its discretion to approve an increase in the total payout for the NEOs under the cash incentive plan as a percentage of target from 56.0 percent to 86.5 percent. This increased payout percentage aligned the payout percentage for the NEOs under the cash incentive plan to the payout percentage used generally for employees in the Company’s corporate functions.

 

 

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The NEOs received actual annual cash incentive plan bonus payouts for 2020 as follows:

Table 4. NEO 2020 Cash Incentive

 

  

 

    

 

   2020 Cash
Incentive Target
as a Percentage
of Base Salary
      

        2020 Cash
Incentive
Target

($)

               2020 Cash
Incentive
Payout as a
Percentage
of  Target
      

2020 Cash
        Incentive
Actual

($)

 
LOGO  

 

Lance Uggla

  

 

 

 

200%

 

 

    

 

 

 

2,400,000

 

 

    

 

 

 

86.5%

 

 

    

 

 

 

2,076,000

 

 

LOGO  

 

Todd Hyatt(1)

  

 

 

 

-

 

 

    

 

 

 

-

 

 

    

 

 

 

-

 

 

    

 

 

 

-

 

 

LOGO  

 

Jonathan Gear

  

 

 

 

100%

 

 

    

 

 

 

650,000

 

 

    

 

 

 

86.5%

 

 

    

 

 

 

562,250

 

 

LOGO  

 

Adam Kansler

  

 

 

 

100%

 

 

    

 

 

 

650,000

 

 

    

 

 

 

86.5%

 

 

    

 

 

 

562,250

 

 

LOGO  

 

Sari Granat

  

 

 

 

100%

 

 

    

 

 

 

575,000

 

 

    

 

 

 

86.5%

 

 

    

 

 

 

497,375

 

 

LOGO  

 

Brian Crotty

  

 

 

 

100%

 

 

    

 

 

 

506,556

 

 

    

 

 

 

86.5%

 

 

    

 

 

 

438,171

 

 

 

1.

Effective July 13, 2020, Mr. Hyatt’s new position and title became Special Advisor to the CEO. This is a part-time position. Mr. Hyatt’s salary in this exempt role was reduced from $650,000 per annum to $35,568 per annum. This role is not eligible for a cash incentive.

 

 

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Long-Term Incentive Awards

Long-term equity incentive awards are a key part of our compensation structure that seeks to align employee and shareholder interests and promote shareholder return. Equity incentives for the NEOs are delivered in the form of PSUs and RSUs.

Target Setting Process for PSUs

2018 PSUs (2018–2020 performance period)

In 2018, the HR Committee approved a plan design for the grant of PSUs to the NEOs for the three-year performance period beginning December 1, 2017 and ending November 30, 2020 (the “2018 PSUs”). The plan design for the 2018 PSUs:

 

 

Used cumulative Adjusted EPS and cumulative Adjusted EBITDA as financial performance objectives over the performance period, with an equal weighting given to each measure and with a payout range of 0 percent to 167 percent of target. These financial performance objectives captured the Company’s external commitment regarding Adjusted EBITDA margin expansion as well as the continued commitment for double-digit Adjusted EPS growth over the performance period.

 

 

Further enhanced the link of the 2018 PSUs to shareholder return by adjusting the payout with a modifier based on the Company’s relative TSR performance against the S&P 500 Index, with a modifier range of 80 percent to 120 percent.

 

 

Provided a final payout range from 0 percent to 200 percent of the target PSUs granted.

 

 

LOGO

2019 PSUs (2019–2021 performance period)

In 2019, the HR Committee further modified the plan design for the grant of PSUs to NEOs for the three-year performance period beginning December 1, 2018 and ending November 30, 2021 (the “2019 PSUs”). The plan design for the 2019 PSUs remained the same as for the 2018 PSUs except it:

 

 

Increased the link of the 2019 PSUs to shareholder return by adjusting the modifier range based on the Company’s relative TSR performance against the S&P 500 Index up to 140 percent to increase the impact of positive performance against the market.

 

 

Included an adjustment mechanism to the Adjusted EBITDA performance objectives for the impact of acquisitions and divestitures above a certain dollar threshold.

 

 

LOGO

 

 

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2020 PSUs (2020–2022 performance period)

In 2020, the HR Committee made no modifications to the plan design for the grant of PSUs to NEOs for the three-year performance period beginning December 1, 2019 and ending November 30, 2022 (the “2020 PSUs”). The plan design for the 2020 PSUs remained the same as for the 2019 PSUs.

 

 

LOGO

Please see “—Long-Term Incentive Awards Granted in 2020” for more information on the 2020 PSUs.

Payout of 2018 PSUs

In January 2021, the HR Committee approved the financial performance results for the performance period relating to the 2018 PSUs. Over the 2018–2020 performance period, the Company achieved 3-year cumulative Adjusted EPS of $7.76, growing Adjusted EPS from $1.80 for 2018 to $2.84 for 2020, an average annual growth rate of 10.9 percent for the performance period. The annual Adjusted EPS during the performance period was $2.29 for 2018, $2.63 for 2019, and $2.84 for 2020. This Adjusted EPS performance represented a payout of 167.0 percent of target for Adjusted EPS, and a TSR rank of the 92nd percentile relative to the S&P 500, which represented a payout modifier of 120.0 percent. This resulted in total payout for the 2018 PSUs of 200 percent of target (167.0 percent x 120.0 percent).

The table below details the performance measures, targets and the certified performance achievement as a percentage of target for the 2018 PSUs. The payout for performance between percentages is interpolated on a straight-line basis and performance below threshold results in a zero percent payout. The HR Committee did not apply any discretion to adjust the final performance achievement for the 2018 PSUs.

Table 5. 2018 - 2020 PSU Performance Measure Achievement

 

2018 - 2020

Performance

  

3-Yr Cumulative
Adj. EPS

     Adjusted EBITDA
(in millions)
     Payout as a
Percent of Target
     3-Yr Relative TSR      PSU Award
Payout as a
Percent of Target
 
   Percentile Rank      Multiple
of Award
 

Actual

     $7.76        $5,180        167%        92nd Percentile        1.20        200%    

Maximum

     $7.66        $4,967        167%        75th Percentile        1.20       

 

 

 

 

 

Above Target

     $7.51        $4,896        135%        62.5th Percentile        1.10       

 

 

 

 

 

Target

     $7.34        $4,816        100%        50th Percentile        1.00       

 

 

 

 

 

Threshold

     $7.08        $4,691        50%        42.5th Percentile        0.90       

 

 

 

 

 

Minimum

     <$7.08        <4,691        0%        <35th Percentile        0.80       

 

 

 

 

 

 

 

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As a result of the level of performance that was achieved, the number of common shares that vested in February 2021 for each NEO relative to the target number of common shares granted with the 2018 PSUs is reflected in the table below:

Table 6. NEO 2018 - 2020 PSU Payout

 

  

 

    

 

   # of PSUs Granted
at Target Level
(#)
       Actual Payout       

Actual # of Shares Vested
on February 1, 2021

(#)

      

Value at February 1,
2021 Closing Share
Price of $88.35

($)(1)

 

LOGO

 

Lance Uggla

     168,067          200%          336,134          29,697,439  

LOGO

 

Todd Hyatt

     26,888          200%          53,776          4,751,110  

LOGO

 

Jonathan Gear

     45,528          200%          91,056          8,044,798  

LOGO

 

Adam Kansler

     54,941          200%          109,882          9,708,075  

LOGO

 

Sari Granat

     11,112          200%          22,224          1,963,490  

LOGO

 

Brian Crotty

     1,576          200%          3,152          278,479  

 

1.

Equity values are calculated in accordance with FASB ASC Topic 718; consistent with the disclosure of the 2018 PSUs in “Table 2. 2020 Grants of Plan-Based Awards” under “Executive Compensation Tables—2020 Grants of Plan-Based Awards.”

Impact of completion of the merger with S&P Global on outstanding PSUs

If the Company’s merger with S&P Global is completed, each share of the Company that is issued and outstanding (other than excluded shares and dissenting shares) will be converted into the right to receive 0.2838, referred to as the exchange ratio, fully paid and nonassessable shares of S&P Global common stock (and, if applicable, cash in lieu of fractional shares, without interest), less any applicable withholding taxes.

If the Company’s merger with S&P Global is completed, each then-outstanding IHS Markit PSU award that was not granted in the calendar year in which the completion of the merger occurs will, automatically and without any action on the part of the holder thereof, be converted into an S&P Global restricted share unit award on the same terms and conditions (including any continuing service vesting requirements but excluding all performance vesting conditions which will lapse) under the applicable plan and award agreement in effect immediately prior to the completion of the merger, as modified by the merger agreement, with respect to a number of shares of S&P Global common stock, rounded up to the nearest whole share of S&P Global common stock, determined (subject to increase as described below) by multiplying (1) the number of IHS Markit shares subject to such IHS Markit PSU award immediately prior to the completion of the merger (assuming target performance) by (2) the exchange ratio (such product being referred to, with respect to each such IHS Markit PSU award, the “RSU target number”). However, if the holder of the applicable converted S&P Global restricted share unit award (1) experiences a termination of employment by S&P Global without cause or (2) terminates his or her employment for good reason, in each case during the 24-month period following the completion of the merger (or, for employees of IHS Markit with a title of Executive Vice President or Senior Vice President immediately prior to the completion of the merger, the 18-month period following completion of the merger), such holder will be entitled to full service-vesting of such converted S&P Global restricted share unit award. The actual number of shares of S&P Global common stock with respect to which

 

 

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each such converted S&P Global restricted share unit award will vest will equal the product determined by multiplying (1) the RSU target number by (2) the applicable vesting percentage (which can range from 100% to 200%) based on the formula set forth in the below table and described in more detail thereafter:

 

   

 Performance period December 1, 2018

 through November 30, 2021

  Performance period December 1, 2019
through November 30, 2022
  Performance period December 1, 2020
through November 30, 2023 (if the merger
is not completed in the 2021 calendar
year)
       

Holder Status:

  Vesting Percentage:    Holder Status:   Vesting Percentage:    Holder Status:   Vesting Percentage: 
       

Holder remains employed until February 1, 2022

  200%  

Holder remains

employed until

February 1, 2023

  200%  

Holder remains

employed until

February 1, 2024

  200%
       

Merger is completed prior to June 1, 2021 and holder experiences qualifying termination

  175%  

Merger is completed

prior to December 1,

2021 and holder

experiences

qualifying

termination

  If qualifying

termination is prior

to February 1, 2022,

150%

 

If qualifying

termination is on or

after February 1,

2022, 175%

 

Merger is completed

prior to December 1,

2021 and holder

experiences

qualifying

termination

  If qualifying
termination is prior
to February 1, 2022,
125%

 

If qualifying
termination is on or
after February 1,
2022, 150%

       

Merger is completed on or after June 1, 2021 and holder experiences qualifying termination

  200%  

Merger is completed

on or after

December 1, 2021

and holder

experiences

qualifying

termination

  175%  

Merger is completed

on or after

December 1, 2021

and holder

experiences

qualifying

termination

  150%
       

If none of the above criteria are satisfied

  0%  

If none of the above

criteria are satisfied

  0%  

If none of the above

criteria are satisfied

  0%

 

 

For the 2019 PSUs:

 

   

If the holder of the applicable IHS Markit PSU award remains employed with S&P Global and its subsidiaries until February 1, 2022, 200%.

   

If the completion of the merger occurs prior to June 1, 2021 and the holder of the applicable IHS Markit PSU award:

 

   

experiences a termination of employment by S&P Global without cause; or

 

   

terminates his or her employment for good reason, in each case during the 24-month period following the completion of the merger (or, for employees of IHS Markit with a title of Executive Vice President or Senior Vice President immediately prior to the completion of the merger, the 18-month period following the completion of the merger), 175%.

   

If the completion of the merger occurs on or after June 1, 2021 and the holder of the applicable IHS Markit PSU award:

 

   

experiences a termination of employment by S&P Global without cause; or

 

   

terminates his or her employment for good reason, in each case during the 24-month period following the completion of the merger (or, for employees of IHS Markit with a title of Executive Vice President or Senior Vice President immediately prior to the completion of the merger, the 18-month period following completion of the merger), 200%.

   

If the holder of the applicable IHS Markit PSU award does not satisfy any of the criteria in the immediately preceding bullets, 0%.

 

 

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For the 2020 PSUs:

 

   

If the holder of the applicable IHS Markit PSU award remains employed with S&P Global and its subsidiaries until February 1, 2023, 200%.

   

If the completion of the merger occurs prior to December 1, 2021 and the holder of the applicable IHS Markit PSU award:

 

   

experiences a termination of employment by S&P Global without cause or terminates his or her employment for good reason, in each case during the 24-month period following the completion of the merger (or, for employees of IHS Markit with a title of Executive Vice President or Senior Vice President immediately prior to the completion of the merger, the 18-month period following the completion of the merger):

 

   

prior to February 1, 2022, 150%; or

 

   

on or after February 1, 2022, 175%.

   

If the completion of the merger occurs on or after December 1, 2021 and the holder of the applicable IHS Markit PSU award:

 

   

experiences a termination of employment by S&P Global without cause; or

 

   

terminates his or her employment for good reason, in each case during the 24-month period following the completion of the merger (or, for employees of IHS Markit with a title of Executive Vice President or Senior Vice President immediately prior to the completion of the merger, the 18-month period following the completion of the merger), 175%.

   

If the holder of the applicable IHS Markit PSU award does not satisfy any of the criteria in the immediately preceding bullets, 0%.

 

 

For an IHS Markit PSU award with a performance period from December 1, 2020 through November 30, 2023 that is not granted in the calendar year in which the completion of the merger occurs:

 

   

If the holder of the applicable IHS Markit PSU award remains employed with S&P Global and its subsidiaries until February 1, 2024, 200%.

   

If the completion of the merger occurs prior to December 1, 2021 and the holder of the applicable IHS Markit PSU award:

 

   

experiences a termination of employment by S&P Global without cause or terminates his or her employment for good reason, in each case during the 24-month period following the completion of the merger (or, for employees of IHS Markit with a title of Executive Vice President or Senior Vice President immediately prior to the completion of the merger, the 18-month period following completion of the merger):

 

   

prior to February 1, 2022, 125%; or

 

   

on or after February 1, 2022, 150%.

 

 

If the completion of the merger occurs on or after December 1, 2021 and the holder of the applicable IHS Markit PSU award:

 

   

experiences a termination of employment by S&P Global without cause or terminates his or her employment for good reason, in each case during the 24-month period following the completion of the merger (or, for employees of IHS Markit with a title of Executive Vice President or Senior Vice President immediately prior to the completion of the merger, the 18-month period following completion of the merger), 150%.

   

If the holder of the applicable IHS Markit PSU award does not satisfy any of the criteria in the immediately preceding bullets, 0%.

Upon completion of the merger, each then-outstanding IHS Markit PSU award that was granted in the calendar year in which the completion of the merger occurs, will, automatically and without any action on the part of the holder thereof be converted into an S&P Global performance share unit award with respect to a target number of shares of S&P Global common stock, rounded up to the nearest whole share of S&P Global common stock, determined by multiplying (1) the number of IHS Markit shares subject to such IHS Markit PSU award immediately prior to the completion of the merger (assuming target performance) by (2) the exchange ratio (such product, the “PSU target number”). The converted S&P

 

 

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Global performance share unit award will be subject to the same performance vesting opportunities and performance goals applicable to performance share unit awards granted by S&P Global in the calendar year in which the completion of the merger occurs. The actual number of shares of S&P Global common stock with respect to which each such converted S&P Global performance share unit award will vest will be determined based on actual performance, subject to the applicable holder remaining employed with S&P Global and its subsidiaries through February 1, 2024 (if the completion of the merger occurs in 2021) or February 1, 2025 (if the completion of the merger occurs in 2022); provided, however, that if the holder of the applicable converted S&P Global performance share unit award (1) experiences a termination of employment by S&P Global without cause or (2) terminates his or her employment for good reason, in each case during the 24-month period following the completion of the merger (or, for employees of IHS Markit with a title of Executive Vice President or Senior Vice President immediately prior to the completion of the merger, the 18-month period following completion of the merger), prior to February 1, 2024 (if the completion of the merger occurs in 2021) or February 1, 2025 (if the completion of the merger occurs in 2022), such holder will be entitled to full service-vesting of such converted S&P Global performance share unit award (including, for the avoidance of doubt, with respect to any such award that, prior to conversion, was a “partner unit plan” IHS Markit PSU award), and the number of shares with respect to which such award will vest will equal the PSU target number.

 

 

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Long-Term Incentive Awards Granted in 2020

In 2020, all employees were eligible to receive equity awards as part of their total compensation. Participants receive an annual award of conditional share units.

Equity incentives for the NEOs are in the form of PSUs and RSUs for 2020. The PSUs cliff-vest after three years and pay out based upon performance against cumulative three-year financial objectives. The RSUs vest ratably over three years. We believe that our current three-year vesting period strikes an appropriate balance between incentivizing long-term strategic thinking and retaining key senior talent.

The HR Committee determined that for 2020 the Chairman and CEO, who has significant control and impact on long-term value creation, would be awarded long-term incentive awards in the form of 100 percent PSUs. The HR Committee determined that for 2020 the other NEOs (other than the Chairman and CEO), who have responsibility for long-term value creation but also shorter-term results and the execution of strategy, would be awarded long-term incentive awards in a ratio of 50 percent PSUs and 50 percent RSUs.

Table 7 sets forth the long-term incentive awards granted by the HR Committee to the NEOs in 2020 as part of their annual performance compensation. The number of long-term incentive awards granted in 2020 was calculated using the average closing price for the ten (10) trading days up to and including November 30, 2019. The awards were actually granted on February 1, 2020 with a grant date share price of $78.86.

 

Table 7. NEO 2020 Long-Term Incentive Awards

 

  

 

     

 

   PSUs at Target
(#)
(1)
     PSUs at
Threshold (40%)
($)
    

PSUs at Target
(100%)

($)

     PSUs at
Maximum (200%)
($)
     RSU
(#)
     RSU Grant
Date Value
($)
 

LOGO

  

Lance Uggla(2)

     152,672        4,815,886        12,039,714        24,079,428                

LOGO

  

Todd Hyatt

     11,797        372,125        930,311        1,860,623        11,797        930,311  

LOGO

  

Jonathan Gear

     13,879        437,799        1,094,498        2,188,996        13,879        1,094,498  

LOGO

  

Adam Kansler

     14,747        465,179        1,162,948        2,325,897        14,747        1,162,948  

LOGO

  

Sari Granat

     11,450        361,179        902,947        1,805,894        11,450        902,947  

LOGO

  

Brian Crotty(3)

     7,634        240,807        602,017        1,204,034        4,164        328,373  

 

1.

Performance for 2020 PSUs will be measured based on the 3-year cumulative Adjusted EBITDA, 3-year cumulative Adjusted EPS and 3-year TSR relative to the S&P 500 Index.

 

2.

Mr. Uggla’s annual target stock award grant was increased from $10,000,000 in 2019 to approximately $11,000,000 in 2020 to enhance the competitiveness of his total pay opportunity and a continued link to performance.

 

3.

Mr. Crotty’s PSUs have two components: 4,164 PSUs with three-year cliff vesting from the grant date and 3,470 PSUs under a Partner Unit Plan (PUP) with five-year vesting from year three to year five. The PUP units vest ratably in equal annual installments in each of years three to five. The PUP units have the same underlying performance metrics as the standard PSU awards.

 

 

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Table 8 sets out the performance and payout schedule for 2020 PSUs.

Table 8. Performance Measures for 2020 PSUs

 

2020 - 2022

Performance

   3-Yr Cumulative Adj.
EBITDA Payout as
Percent of Target
       3-Yr Cumulative
Adj. EPS Payout as a
Percent of  Target
       3-Yr Relative
TSR Multiple
of Award
       PSU Award
Payout as a
Percent of Target
 
 

 

    

 

50% Weighting

 

 

 

      

 

50% Weighting

 

 

 

      

 

Multiplier

 

 

 

      

 

 

 

 

 

(a) Minimum

     0%          0%         

 

 

 

 

 

       0%  

(b) Threshold

     50%          50%          0.8          40%  

(c) Target

     100%          100%          1          100%  

(d) Maximum

     167%          167%          1.4          200%  

Certain material terms of the 2020 long-term equity awards are summarized below.

Overview of Material Terms for 2020 PSUs

 

 

PSUs provide participants with long-term variable compensation that has a metrics-based outcome, using both absolute and relative performance objectives. The ultimate value of the payout in PSUs is tied to the Company’s performance through both a metrics-based outcome and relative share price. PSUs granted to NEOs in 2020 will be paid at 0 percent to 200 percent of the initial target award based on cumulative Adjusted EBITDA and cumulative Adjusted EPS metrics, with a relative TSR modifier, over the 2020 to 2022 performance period.

 

 

PSUs are eligible to receive dividend equivalents equal to the dividends the PSU holder would have received if they had been the actual record owner of the underlying common shares on each dividend record date. The dividend equivalents are subject to the same vesting terms as the underlying PSUs. The holder of the PSUs will be credited with any cash dividends, without earnings, payable on the number of common shares that vest based on the Company’s actual achievement of the performance objectives.

 

 

The HR Committee will make adjustments to Adjusted EBITDA performance targets for the impact of acquisitions and divestitures above a certain dollar threshold. Further, if the HR Committee determines it is necessary or appropriate to maintain the intended economics of PSUs, the HR Committee may make adjustments as it deems equitable for unforeseen changes to the macroeconomic business environment, unanticipated regulatory changes or changes in GAAP or the application thereof that materially affects the performance objectives.

Overview of Material Terms for 2020 RSUs

 

 

RSUs provide participants with annual equity-based incentives. The value of RSUs is tied to the Company’s performance through our share price.

 

 

The common shares underlying RSUs are generally vested and delivered in three equal installments on the first, second and third anniversaries of the grant date.

 

 

RSUs are eligible to receive dividend equivalents equal to the dividends the RSU holder would have received if they had been the actual record owner of the underlying common shares on each dividend record date. The dividend equivalents are subject to the same vesting terms as the underlying RSUs. The holder of the RSUs will be credited with any cash dividends, without earnings, payable on the number of common shares that vest.

 

 

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Benefits and Perquisites

The Company provides its NEOs with life and medical insurance, and other benefits generally available to all colleagues. IHS Markit sponsors a qualified defined contribution plan (401(k) plan for U.S. colleagues) that provides matches to employee contributions.

The Company believes that perquisites should be kept to a minimum. No NEO other than Mr. Hyatt and Mr. Crotty received perquisites in 2020 that exceeded the $10,000 disclosure threshold. Mr. Crotty relocated to London, United Kingdom from the United States in April 2019 for a two-year period and received a housing and expenses allowance of $175,000 per annum for the duration of his assignment.

 

 

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2021 Executive Compensation Design

The HR Committee continues to believe that, in order to achieve our overarching objective of enhancing stakeholder value while promoting the safety and soundness of our Company, it is important to continue to tie compensation to ongoing performance metrics where appropriate.

In 2021, our executive officers will continue to have a strong target-based compensation program that includes: a competitive base salary, an annual cash incentive award target that is tied to pre-established financial objectives and a long-term equity incentive award target that is also tied to pre-established financial objectives.

The objectives of both the annual cash incentive and long-term incentive awards are to reward, motivate and retain executive officers while driving the long-term performance of the Company. We have a total rewards compensation philosophy, using a mix of cash and equity awards to deliver total compensation at competitive levels.

The elements of pay for executive officers in 2021 are set forth below:

 

Element   Design Summary

Base Salary

  Competitive level of fixed pay to recognize individual’s role, expertise, experience, and responsibilities.

Annual Cash Incentive            

  Annual cash incentive target stated as a percentage of base salary. Reviewed regularly by the HR Committee to maintain market competitiveness.

 

 

– Incentive target as a percentage of base salary of 200 percent in 2021 for Mr. Uggla.

 

 

– Incentive target as a percentage of base salary of 100 percent in 2021 for Messrs. Gear, Kansler, Crotty and Ms. Granat.

 

  Total pool funding for annual cash incentives is tied to Adjusted EBITDA performance.

 

 

– Executive officers’ participant payout is based on the Company’s financial performance with respect to Revenue (40 percent) and Adjusted EBITDA (60 percent).

 

 

 

– Maximum awards are capped at 200 percent of target.

 

Long-Term Equity-

Based Incentive

 

Long-term incentive award target stated as a percentage of base salary.

 

 

  Long-term incentives in the form of RSUs and of PSUs tied to the achievement of 3-year financial objectives.

 

 

– CEO will receive 100 percent PSUs for his long-term incentive award.

 

 

– Other executive officers will receive 50 percent PSUs and 50 percent RSUs for their long-term incentive awards.

 

 

– RSUs vest ratably over 3 years.

 

 

– PSUs cliff-vest after 3 years based on achievement of 3-year cumulative Adjusted EBITDA (50 percent) and 3-year cumulative Adjusted EPS (50 percent) with a TSR modifier relative to the S&P 500 Index.

 

 

– A 3-year cumulative performance measure of Adjusted EBITDA and Adjusted EPS is used in order to incentivize both financial growth and capital allocation management.

 

 

– A relative TSR modifier is used to align the PSU metrics with overall shareholder return and provide wider economic context to the award.

 

 

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Element   Design Summary

 

 

– PSU payout is capped at target if the Company’s absolute TSR over the 3-year performance period is negative.

 

  Our equity award agreements give us the right to recoup the value of the award if an award recipient violates specified confidentiality, non-competition or non-solicitation provisions.

 

  If the merger with S&P Global is completed in 2021, RSUs and PSUs granted in 2021 will convert into RSUs and PSUs, respectively, in respect of S&P Global shares, and the converted S&P Global PSUs will be subject to the same performance vesting opportunities and performance goals applicable to PSUs granted by S&P Global in 2021. If an executive officer is terminated without cause or resigns for good reason within 18 months following completion of the merger, he or she will receive full vesting of such RSUs and full vesting of such PSUs at target performance.

Compensation Benchmarking for 2021

In connection with 2021 compensation decisions, the HR Committee reviewed and decided to maintain the peer group of companies relative to key competitors across our industry and size factors, such as revenue, EBITDA, and market capitalization. The HR Committee believed this peer group of companies appropriately reflected the companies against which our current financial performance was measured and with which we currently compete for business and executive talent.

The following companies were identified as our peer group for compensation benchmarking in 2021. As of November 30, 2020, we were in the 33rd percentile of our peer group in terms of revenue and the 47th percentile in terms of market capitalization based on the latest financial year-end disclosed revenue of the peer group.

IHS Markit 2021 Peer Group for Compensation Benchmarking

 

Broadridge Financial Solutions, Inc.    CME Group Inc.    Equifax Inc.
Fidelity National Information Services Inc.    Fiserv, Inc.    Gartner, Inc.
Intercontinental Exchange, Inc    Moody’s Corporation    MSCI Inc.
RELX PLC    S&P Global, Inc.    Thomson Reuters Corporation
TransUnion    Verisk Analytics, Inc   

 

 

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Total Pay Mix

For 2021, target variable compensation will represent 92 percent of the direct compensation for the CEO and 80 percent of the direct compensation on average for the other NEOs.

 

 

LOGO

Role of Management, HR Committee and Independent Compensation Consultant

Role of Management

At the HR Committee’s request, the Company’s management provides the HR Committee with information, analyses, and recommendations regarding the Company’s executive compensation program and policies and assists the HR Committee in carrying out its responsibilities. The HR Committee also meets regularly in executive session without management present, including regularly meeting with the committee’s independent compensation consultant. While the HR Committee considers the recommendations of the CEO regarding executive officer compensation levels (other than with respect to his own compensation), the HR Committee ultimately makes all decisions relating to executive officer compensation.

Role of the HR Committee

The HR Committee, which is currently composed of six independent directors, is responsible for the compensation of the executive officers. This means that the HR Committee sets base salaries and short-term and long-term incentive targets and approves the individual compensation elements for each executive officer.

In consultation with Pay Governance, the HR Committee’s independent compensation consultant, and Company management, the HR Committee actively oversees the design process of the Company’s executive incentive compensation programs and provides the final approval of incentive programs and quantitative performance metrics for our executive officers.

The HR Committee establishes target compensation and performance objectives for the executive officers and determines annual incentive payments for the prior year, based upon a review of the performance achieved. As the HR Committee makes its decisions, it considers financial results in the most recent year, analysis against the compensation peer group of companies, feedback from shareholders through the Company’s engagement activities, feedback from prior year reports of proxy advisors, and input from the independent compensation consultant. The HR Committee reviews and approves compensation with a view to support the Company’s long-range plans, achieve superior annual and long-term financial results and make continued progress on the Company’s long-term strategic objectives.

 

 

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Role of the Independent Compensation Consultant

In 2020, after reviewing Pay Governance’s service to the HR Committee in 2019, the HR Committee engaged Pay Governance as its independent compensation consultant to provide guidance on executive compensation and related governance matters. In choosing Pay Governance, the HR Committee was specifically searching for a credible leader in the executive compensation field with diversified industry experience and independence from the Company.

During 2020, Pay Governance advised the HR Committee on the CEO total pay package; provided a competitive review of executive compensation relative to our peer group of companies in light of the COVID-19 pandemic, an assessment of independent director compensation and regular updates on executive compensation trends and regulatory developments; provided the HR Committee with a compensation risk assessment and assisted in the review of our CD&A and with other executive compensation and governance matters that arose during the course of the year. While the HR Committee considers the recommendations of Pay Governance, the HR Committee ultimately makes all decisions relating to executive officer compensation.

In July 2020, Pay Governance presented the results of its risk assessment to the HR Committee. It reviewed the attributes and structure of IHS Markit’s executive compensation program for the purpose of identifying potential sources of risk within the program design. Its assessment considered IHS Markit’s 2019 and 2020 compensation programs and the Summary Compensation Table values as presented in IHS Markit’s 2019 and 2020 proxy statements. Based on its review, it did not observe any compensation program attributes that, when considered in the context of our overall program and oversight framework, indicate that our programs are designed to, or have attributes that suggest they would support, inappropriate risk-taking by executives or employees.

The HR Committee has direct access to the Pay Governance advisors. Pay Governance had not previously provided services to Markit or IHS prior to the Merger. Pay Governance does not perform any other work for IHS Markit, does not trade in IHS Markit common shares, and does not have any other economic interests or other relationships that would conflict with its obligation to provide impartial advice to the HR Committee.

Employment Contracts, Termination of Employment

Arrangements, and Change in Control Arrangements

Both IHS and Markit had entered into employment agreements and severance agreements with certain NEOs prior to the merger of the two companies in 2016. In 2018, the HR Committee approved the terms of a new form of employment agreement for IHS Markit executive officers. During 2019, Mr. Uggla signed a new employment agreement. In January 2020, Mr. Crotty signed a new employment agreement. In 2019, the Company adopted a retirement policy, as amended in 2020, that provides eligible employees of the Company, including eligible executive officers, certain benefits upon their retirement in accordance with the terms of the policy. These employment agreements, retirement policies and severance agreements are described under “Executive Employment Agreements” and “Potential Payments upon Termination or Change in Control.”

Compensation and Risk

As it designed the Company’s compensation philosophy and strategy, the HR Committee considered the balance between appropriately motivating executives and employees and ensuring that the Company’s compensation program does not encourage excessive risk-taking. The HR Committee, with the assistance of Pay Governance, annually reviews and assesses the risks arising from the Company’s compensation policies and practices. The HR Committee believes that the balance between the Company’s cash and equity incentives, selection of performance measures, and other governance practices, such as our share ownership guidelines, hedging and pledging policy, incentive compensation recoupment policy, and sound internal controls over financial reporting to ensure that performance-based compensation is earned on the basis of accurate financial data, all help ensure that the Company’s compensation plans and practices do not create risks that are reasonably likely to have a material adverse effect on the Company.

 

 

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Accounting and Tax Treatment

The HR Committee considers the anticipated accounting and tax treatment to IHS Markit and to the executive officers in its decision-making process. From an accounting perspective, the HR Committee’s preference is that there are no significant negative accounting implications due to the design of the compensation program.

Our compensation programs are designed with Sections 409A and 457A of the U.S. Internal Revenue Code in mind, with the intent to avoid adverse tax consequences for our executive officers.

Definitions of Non-GAAP Financial Measures

Throughout this CD&A, we refer to Adjusted EBITDA, Adjusted EBITDA Margin, and Adjusted EPS (“earnings per share”). These are non-GAAP financial measures used to supplement our financial statements, which are based on GAAP. We also refer to Revenue, which is a GAAP financial measure.

We define “EBITDA” as net income plus or minus net interest, plus provision for income taxes, depreciation, and amortization. Our definition of “Adjusted EBITDA” further excludes primarily non-cash items and other items that we do not consider to be useful in assessing our operating performance (e.g., stock-based compensation expense, restructuring charges, acquisition-related costs and performance compensation, exceptional litigation, net other gains and losses, pension mark-to-market, settlement, and other expense, the impact of joint ventures and noncontrolling interests, and discontinued operations). “Adjusted EBITDA Margin” is defined as Adjusted EBITDA divided by Revenue.

We define “Adjusted EPS” as Adjusted Net Income divided by d