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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 (Amendment No.           )

Filed by the Registrant ý

Filed by a Party other than the Registrant o

Check the appropriate box:

o

 

Preliminary Proxy Statement

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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

ý

 

Definitive Proxy Statement

o

 

Definitive Additional Materials

o

 

Soliciting Material under §240.14a-12

 

Wyndham Hotels & Resorts, Inc.

(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):

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No fee required.

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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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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.

 

 

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LOGO





NOTICE OF 2020 ANNUAL MEETING
OF STOCKHOLDERS AND
PROXY STATEMENT


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LOGO

Wyndham Hotels & Resorts, Inc.
22 Sylvan Way
Parsippany, New Jersey 07054

March 31, 2020

Dear Fellow Stockholder:

On behalf of the entire Board, we are pleased to invite you to attend the 2020 annual meeting of stockholders to be held on Tuesday, May 12, 2020 at 11:30 a.m. Eastern Time. We intend to hold our annual meeting in person at Wyndham Hotels & Resorts, Inc., 22 Sylvan Way, Parsippany, New Jersey 07054 if possible. However, in light of the evolving coronavirus (COVID-19) situation and to assist in protecting the health and well-being of our stockholders and team members, we may decide to hold the meeting solely by means of remote communication (i.e., a virtual-only meeting) or in a different location or may impose additional procedures or limitations on meeting attendees. We plan to announce any such updates in additional proxy materials filed with the SEC and on our investor website, www.investor.wyndhamhotels.com under Investor Resources/Shareholder Services. We encourage you to check this website prior to the meeting if you plan to attend.

We accomplished a tremendous amount in 2019, capping off the year by delivering solid rooms growth, revenue growth, adjusted EBITDA* and adjusted diluted EPS* growth and continuing to return capital to you by repurchasing 4.5 million of our shares and paying cash dividends of $112 million. We could not be prouder of all of our team members who were critical to our accomplishment of key strategic goals in 2019, including completion of the integration of La Quinta and driving quality net rooms growth, all the while remaining focused on growing our business.

We also took steps in furtherance of our commitment to fostering a values-driven culture and to being a socially responsible partner in the communities where we live, work and serve, and we were recognized for our efforts. From launching our first ever green certification program for owners and operators, to working with our industry to stop human trafficking, to being named by Ethisphere as one of the World's Most Ethical Companies in 2019 and 2020, to earning our second perfect score in the Human Rights Campaign's Best Places to Work for LGBTQ Equality in 2020, we could not have achieved this without the support and dedication of our team members worldwide.

While we are pleased with our performance and accomplishments in 2019, we, along with our peers and other businesses worldwide, have been significantly impacted by the unprecedented circumstances created by the COVID-19 outbreak. As previously reported, we have taken steps to mitigate the impact of the outbreak including: the suspension of the CEO's salary and our Board of Directors cash-based compensation indefinitely, the suspension of share repurchases, workforce reductions, salary reductions and reduced-hour work weeks for team members, and reductions across all discretionary and capital expenditure spend wherever possible. We will continue to monitor the rapidly evolving circumstances. During this extraordinary time, our priority remains on the health and safety of our team members, owners and guests, especially those most affected by the outbreak. We are also grateful to all of the heroic doctors, nurses, researchers, public servants and others who are fighting to meet this overwhelming challenge.

We would also like to acknowledge the Right Honourable Brian Mulroney who retired from our Board of Directors in August 2019 after nearly twenty-two years with Wyndham Hotels and its predecessors, and we thank him for his dedication, guidance and leadership during his tenure with us. In connection with Mr. Mulroney's retirement, we welcomed Ronald L. Nelson to the Board, whose significant leadership, experience and expertise further enhance the depth of our talented Board.


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As described in the accompanying proxy statement, our Compensation Committee works to ensure that executive pay and performance are appropriately aligned to incentivize management to increase stockholder value.

We encourage you to read the proxy statement carefully for more information. Your vote is very important. Whether or not you plan to attend the 2020 annual meeting, please cast your vote as soon as possible. We look forward to continuing our dialogue in the future and we, along with our outstanding executive team and team members worldwide, remain committed to creating even greater value for you.

Very truly yours,


GRAPHIC

 

GRAPHIC
Stephen P. Holmes
Chairman of the Board
  Geoffrey A. Ballotti
President and Chief Executive Officer

   


*
Please see Appendix A to the proxy statement for information on non-GAAP reconciliations and cautionary language regarding forward-looking statements.

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LOGO


WYNDHAM HOTELS & RESORTS, INC.

NOTICE OF 2020 ANNUAL MEETING OF STOCKHOLDERS

March 31, 2020

Date:   Tuesday, May 12, 2020
Time:   11:30 a.m. Eastern Time
Place:   Wyndham Hotels & Resorts, Inc.*
22 Sylvan Way
Parsippany, New Jersey 07054

Purposes of the meeting:

to elect three Class II Directors for a term expiring at the 2021 annual meeting, with each Director to serve until such Director's successor is elected and qualified or until such Director's earlier resignation, retirement, disqualification or removal;

to vote on amendments to our Amended and Restated Certificate of Incorporation ("Certificate of Incorporation") to eliminate supermajority voting requirements relating to (a) amendments to our Certificate of Incorporation and Amended and Restated By-Laws ("By-Laws") and (b) the removal of Directors;

to vote on an advisory resolution to approve our executive compensation program;

to vote on a proposal to ratify the appointment of Deloitte & Touche LLP to serve as our independent registered public accounting firm for 2020; and

to transact any other business that may be properly brought before the meeting or any adjournment or postponement of the meeting.

The matters specified for voting above are more fully described in the attached proxy statement. Only our stockholders of record at the close of business on March 17, 2020 will be entitled to notice of and to vote at the meeting and any adjournments or postponements for which no new record date is set.

Who may attend the meeting:

Only stockholders, persons holding proxies from stockholders, invited representatives of the media and financial community and other guests of Wyndham Hotels & Resorts, Inc. may attend the meeting.

What to bring:

All persons attending the meeting must bring photo identification such as a valid driver's license or passport for purposes of personal identification. If you are a stockholder of record, you will also need to bring your Notice, proxy card or proof of your stock ownership as of the record date.

*
We intend to hold our annual meeting in person if possible. However, in light of the evolving coronavirus (COVID-19) situation and to assist in protecting the health and well-being of our stockholders and team members, we may decide to hold the meeting solely by means of remote communication (i.e., a virtual-only meeting) or in a different location or may impose additional procedures or limitations on meeting attendees. We plan to announce any such updates in additional proxy materials filed with the SEC and on our investor website, www.investor.wyndhamhotels.com under Investor Resources/Shareholder Services. We encourage you to check this website prior to the meeting if you plan to attend.


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If your shares are held in the name of a broker, trust, bank or other nominee, you will also need to bring a proxy, letter or recent account statement from that broker, trust, bank or nominee that confirms that you are the beneficial owner of those shares.

Record Date:

March 17, 2020 is the record date for the meeting. This means that owners of Wyndham Hotels & Resorts, Inc. common stock at the close of business on that date are entitled to:

receive notice of the meeting; and

vote at the meeting and any adjournments or postponements of the meeting for which no new record date is set.

Information About the Notice of Internet Availability of Proxy Materials:

Instead of mailing a printed copy of our proxy materials, including our Annual Report, to all of our stockholders, we provide access to these materials in a fast and efficient manner via the Internet. This reduces the amount of paper necessary to produce these materials as well as the costs associated with mailing these materials to all stockholders. Accordingly, on or about March 31, 2020, we will begin mailing a Notice to all stockholders as of March 17, 2020, and will post our proxy materials on the website referenced in the Notice. As more fully described in the Notice, stockholders may choose to access our proxy materials on the website referred to in the Notice or may request to receive a printed set of our proxy materials. In addition, the Notice and website provide information regarding how you may request to receive proxy materials in printed form by mail or electronically by email on an ongoing basis.

Householding Information:

We have adopted a procedure approved by the Securities and Exchange Commission called householding. Under this procedure, stockholders of record who have the same address and last name and have not previously requested electronic delivery of proxy materials will receive a single envelope containing the Notices for all stockholders having that address. The Notice for each stockholder will include that stockholder's unique control number needed to vote his or her shares. This procedure will reduce our printing costs and postage fees.

If you do not wish to participate in householding and prefer to receive your Notice in a separate envelope, please contact Broadridge Financial Solutions by calling their toll-free number at (866) 540-7095 or through Broadridge Financial Solutions, Attn.: Householding Department, 51 Mercedes Way, Edgewood, New York 11717.

For those stockholders who have the same address and last name and who request to receive a printed copy of the proxy materials by mail, we will send only one copy of such materials to each address unless one or more of those stockholders notifies us, in the same manner described above, that they wish to receive a printed copy for each stockholder at that address.

Beneficial stockholders may request information about householding from their banks, brokers or other holders of record.

Proxy Voting:

Your vote is important. Please vote your proxy promptly so your shares are represented, even if you plan to attend the annual meeting. You may vote by Internet, by telephone or by requesting a printed copy of the proxy materials and using the enclosed proxy card. You may also vote in person at the annual meeting.

Our proxy tabulator, Broadridge Financial Solutions, must receive any proxy that will not be delivered in person at the annual meeting by 11:59 p.m. Eastern Time on Monday, May 11, 2020. If you have shares of common stock credited to your account under the Wyndham Hotel Group Employee Savings Plan, the trustee must receive your voting instructions by 11:59 p.m. Eastern Time on Thursday, May 7, 2020.

    By order of the Board of Directors,

 

 

GRAPHIC
    Paul F. Cash
Corporate Secretary

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  Pages

PROXY STATEMENT

  1

FREQUENTLY ASKED QUESTIONS

  1

When and where will the annual meeting be held?

  1

What am I being asked to vote on at the meeting?

  1

Who may vote and how many votes does a stockholder have?

  2

How many votes must be present to hold the meeting?

  2

What is a broker non-vote?

  2

How do I vote?

  2

What if I am a participant in the Wyndham Hotel Group Employee Savings Plan?

  3

How does the Board recommend that I vote?

  3

How many votes are required to approve each proposal?

  3

How do I attend the meeting?

  4

Can I change or revoke my vote?

  4

How are proxies solicited?

  4

How do I make a stockholder proposal for the 2021 meeting?

  4

GOVERNANCE OF THE COMPANY

  5

Corporate Governance Guidelines

  5

Director Independence Criteria

  5

Guidelines for Determining Director Independence

  6

Committees of the Board

  6

Committee Membership

  9

Board Leadership Structure

  10

Lead Director

  10

Oversight of Risk Management

  10

Executive Sessions of Non-Management and Independent Directors

  11

Communications with the Board and Directors

  11

Director Attendance at Annual Meeting of Stockholders

  11

Code of Business Conduct and Ethics

  11

Director Nomination Process

  11

Compensation of Directors

  13

2019 Director Compensation Table

  15

Non-Management Director Stock Ownership Guidelines

  17

Ownership of Company Stock

  17

Delinquent Section 16(a) Reports

  18

PROPOSAL NO. 1: ELECTION OF DIRECTORS

  19

Majority Voting Standard in Uncontested Director Elections

  19

Class II Nominees for Election to the Board (Term Expiring at 2021 Annual Meeting)

  20

Class I Directors (Term Expiring at 2021 Annual Meeting)

  21

Class III Directors (Term Expiring at 2021 Annual Meeting)

  22

PROPOSAL NO. 2: AMENDMENT OF THE CERTIFICATE OF INCORPORATION TO ELIMINATE SUPERMAJORITY VOTING REQUIREMENTS

  24

Purpose and Effect of Proposed Amendments

  24

Proposal 2(a): Eliminate Supermajority Voting Provisions to Amend Certificate of Incorporation and By-Laws

  24

Proposal 2(b): Eliminate Supermajority Voting Provisions to Remove Directors

  25

Related Changes to the By-Laws

  25

Additional Information

  25

EXECUTIVE COMPENSATION

  27

Compensation Discussion and Analysis

  27

Compensation Committee Report

  40

2019 Summary Compensation Table

  41

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  Pages

2019 All Other Compensation Table

  42

2019 Grants of Plan-Based Awards Table

  43

Outstanding Equity Awards at 2019 Fiscal Year-End Table

  44

2019 Option Exercises and Stock Vested Tables

  45

2019 Nonqualified Deferred Compensation Table

  46

Agreements with Named Executive Officers

  46

Potential Payments on Termination or Change-in-Control

  52

2019 Pay Ratio Disclosure

  54

Gender Pay Equity

  54

Related Party Transactions

  54

PROPOSAL NO. 3: ADVISORY VOTE ON EXECUTIVE COMPENSATION

  56

Executive Compensation Program

  56

Recommendation for Approval

  57

PROPOSAL NO. 4: RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

  58

Disclosure about Fees

  58

Pre-Approval of Audit and Non-Audit Services

  59

APPENDIX A: Non-GAAP Financial Information and Forward-Looking Statements

  A-1

APPENDIX B: Wyndham Hotels & Resorts, Inc. Second Amended & Restated Certificate of Incorporation

  B-1

APPENDIX C: Wyndham Hotels & Resorts, Inc. Second Amended and Restated By-Laws

  C-1

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WYNDHAM HOTELS & RESORTS, INC.


PROXY STATEMENT

The enclosed proxy materials are provided to you at the request of the Board of Directors of Wyndham Hotels & Resorts, Inc. (the "Board") to encourage you to vote your shares at our 2020 annual meeting of stockholders. This proxy statement contains information on matters that will be presented at the meeting and is provided to assist you in voting your shares. References in this proxy statement to "we," "us," "our," "Wyndham Hotels" and the "Company" refer to Wyndham Hotels & Resorts, Inc. and our consolidated subsidiaries.

References in this proxy statement to "Wyndham Worldwide" refer to Wyndham Worldwide Corporation and its consolidated subsidiaries prior to the consummation of the spin-off. References to "Wyndham Destinations" refer to Wyndham Destinations, Inc. and its consolidated subsidiaries. References to the "spin-off" refer to the spin-off completed by Wyndham Worldwide effective June 1, 2018 resulting in its principal businesses becoming two separate, publicly traded companies, Wyndham Hotels and Wyndham Destinations.

Our Board made these materials available to you over the Internet or, upon your request, mailed you printed versions of these materials in connection with our 2020 annual meeting. We will mail a Notice of Internet Availability of Proxy Materials ("Notice") to our stockholders beginning on or about March 31, 2020 and will post our proxy materials on our website referenced in the Notice on that same date. We are, on behalf of our Board, soliciting your proxy to vote your shares at our 2020 annual meeting. We solicit proxies to give all stockholders of record an opportunity to vote on matters that will be presented at the annual meeting.


FREQUENTLY ASKED QUESTIONS

When and where will the annual meeting be held?

The annual meeting will be held on Tuesday, May 12, 2020 at 11:30 a.m. Eastern Time. We intend to hold our annual meeting in person at Wyndham Hotels & Resorts, Inc., 22 Sylvan Way, Parsippany, New Jersey 07054 if possible. However, in light of the evolving coronavirus (COVID-19) situation and to assist in protecting the health and well-being of our stockholders and team members, we may decide to hold the meeting solely by means of remote communication (i.e., a virtual-only meeting) or in a different location or may impose additional procedures or limitations on meeting attendees. We plan to announce any such updates in additional proxy materials filed with the SEC and on our investor website, www.investor.wyndhamhotels.com under Investor Resources/Shareholder Services. We encourage you to check this website prior to the meeting if you plan to attend.

What am I being asked to vote on at the meeting?

You are being asked to vote on the following:

the election of three Class II Directors for a term expiring at the 2021 annual meeting of stockholders, with each Director to serve until such Director's successor is elected and qualified or until such Director's earlier resignation, retirement, disqualification or removal;

the amendment of our Certificate of Incorporation to eliminate supermajority voting requirements relating to (a) the amendment of our Certificate of Incorporation and By-Laws and (b) the removal of Directors;

the advisory approval of our executive compensation program;

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the ratification of the appointment of Deloitte & Touche LLP to serve as our independent registered public accounting firm for 2020; and

to transact any other business that may be properly brought before the meeting or any adjournment or postponement of the meeting.

We are not aware of any other matters that will be brought before the stockholders for a vote at the annual meeting. If any other matters are properly presented for a vote, the individuals named as proxies will have discretionary authority to the extent permitted by law to vote on such matters according to their best judgment.

Who may vote and how many votes does a stockholder have?

All holders of record of our common stock as of the close of business on March 17, 2020 (the "record date") are entitled to vote at the meeting. Each stockholder will have one vote for each share of our common stock held as of the close of business on the record date. As of the record date, 93,106,879 shares of our common stock were outstanding. There is no cumulative voting and the holders of our common stock vote together as a single class.

How many votes must be present to hold the meeting?

The holders of a majority of the outstanding shares of our common stock entitled to vote at the meeting, or 46,553,440 shares, also known as a quorum, must be present in person or by proxy at the meeting in order to constitute a quorum necessary to conduct the meeting. Abstentions and broker non-votes will be counted for purposes of establishing a quorum at the meeting.

We urge you to vote by proxy even if you plan to attend the meeting so that we will know as soon as possible that a quorum has been achieved.

What is a broker non-vote?

A broker non-vote occurs when a broker or other nominee submits a proxy that states that the broker does not vote for some of the proposals because the broker has not received instructions from the beneficial owner on how to vote on the proposals and does not have discretionary authority to vote in the absence of instructions.

How do I vote?

Even if you plan to attend the meeting you are encouraged to vote by proxy.

If you are a stockholder of record, also known as a registered stockholder, you may vote in one of the following ways:

by telephone by calling the toll-free number (800) 690-6903 (have your Notice or proxy card in hand when you call);

by Internet at http://www.proxyvote.com (have your Notice or proxy card in hand when you access the website);

if you received (or requested and received) a printed copy of the annual meeting materials, by returning the enclosed proxy card (signed and dated) in the envelope provided; or

in person at the annual meeting (please see below under How do I attend the meeting?).

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If your shares are registered in the name of a bank, broker or other nominee, follow the proxy instructions on the form you receive from the bank, broker or other nominee. You may also vote in person at the annual meeting – please see below under How do I attend the meeting?

When you vote by proxy, your shares will be voted according to your instructions. If you sign your proxy card or vote by Internet or by telephone but do not specify how you want your shares to be voted, they will be voted as the Board recommends.

What if I am a participant in the Wyndham Hotel Group Employee Savings Plan?

For participants in the Wyndham Hotel Group Employee Savings Plan with shares of our common stock credited to their accounts, voting instructions for the trustees of the plan are also being solicited through this proxy statement. In accordance with the provisions of the plan, the trustee will vote shares of our common stock in accordance with instructions received from the participants to whose accounts the shares are credited. If you do not instruct the plan trustee on how to vote the shares of our common stock credited to your account, the trustee will vote those shares in proportion to the shares for which instructions are received.

How does the Board recommend that I vote?

The Board recommends the following votes:

FOR the election of each of the Director nominees,

FOR each of the proposals to amend our Certificate of Incorporation to eliminate supermajority voting requirements,

FOR the advisory approval of our executive compensation program, and

FOR the ratification of the appointment of Deloitte & Touche LLP to serve as our independent registered public accounting firm for 2020.

How many votes are required to approve each proposal?

In the election of Directors, Directors are elected by a majority of the votes cast at the annual meeting, meaning that the number of shares voted "for" a Director must exceed the number of shares withheld from such Director's election. Abstentions and broker non-votes will have no effect on the outcome of the vote.

For each of the proposals to amend our Certificate of Incorporation, the affirmative vote of the holders of 80% of the outstanding shares of our common stock entitled to vote at the meeting will be required for approval. Abstentions and broker non-votes will have the effect of a vote against these proposals.

For each of the other proposals, the affirmative vote of the holders of a majority of the shares represented at the meeting in person or by proxy and entitled to vote on the proposal will be required for approval. Abstentions will have the effect of a vote against any of these proposals. Broker non-votes will have no effect on the outcome of these proposals.

If your shares are registered in the name of a bank, broker or other financial institution and you do not give your broker or other nominee specific voting instructions for your shares, under the rules of the New York Stock Exchange ("NYSE"), your record holder has discretion to vote your shares on the ratification of auditor proposal but does not have discretion to vote your shares on any of the other proposals. Your broker, bank or other financial institution will not be permitted to vote on your behalf

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on the election of Director nominees, the amendments to the Certificate of Incorporation or the advisory vote on executive compensation unless you provide specific instructions before the date of the annual meeting by completing and returning the voting instruction or proxy card or following the instructions provided to you to vote your shares by telephone or the Internet.

How do I attend the meeting?

You must bring with you a photo identification such as a valid driver's license or passport for personal identification. If you are a stockholder of record, you will need to bring your Notice, proxy card or proof of your stock ownership as of the record date.

If your shares are held in the name of a broker, trust, bank or other nominee, you will also need to bring a proxy, letter or recent account statement from that broker, trust, bank or nominee that confirms that you are the beneficial owner of those shares.

Can I change or revoke my vote?

You may change or revoke your proxy at any time prior to voting at the meeting by submitting a later dated proxy, by entering new instructions by Internet or telephone, by giving timely written notice of such change or revocation to the Corporate Secretary or by attending the meeting and voting in person and requesting that your prior proxy not be used.

How are proxies solicited?

We retained Innisfree M&A Incorporated to advise and assist us in soliciting proxies at a cost of $20,000 plus reasonable expenses. Proxies may also be solicited by our Directors, officers and employees personally, by mail, telephone or electronic means. We will pay all costs relating to the solicitation of proxies. We will also reimburse brokers, custodians, nominees and fiduciaries for reasonable expenses in forwarding proxy materials to beneficial owners of our common stock.

How do I make a stockholder proposal for the 2021 meeting?

Stockholders interested in presenting a proposal for inclusion in our proxy statement and proxy relating to our 2021 annual meeting may do so by following the procedures prescribed in Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). To be eligible for inclusion in next year's proxy statement, stockholder proposals must be received by the Corporate Secretary at our principal executive offices no later than the close of business on December 1, 2020.

In general, any stockholder proposal to be considered at next year's annual meeting but not included in the proxy statement must be submitted in accordance with the procedures set forth in our By-Laws. Notice of any such proposal must be submitted in writing to and received by the Corporate Secretary at our principal executive offices not earlier than January 12, 2021 and not later than February 11, 2021. However, if the date of the 2021 annual meeting is not within 30 days before or after May 12, 2021 then a stockholder will be able to submit a proposal for consideration at the annual meeting not later than the close of business on the 10th day following the day on which public disclosure of the date of the annual meeting is made or such notice of the date of such annual meeting was mailed whichever occurs first. Our By-Laws require that such notice be updated as necessary as of specified dates prior to the annual meeting. Any notification to bring any proposal before an annual meeting must comply with the requirements of our By-Laws as to proper form. A stockholder may obtain a copy of our By-Laws on our investor website, www.investor.wyndhamhotels.com under the Corporate Governance/Governance Documents page, or by writing to our Corporate Secretary.

Stockholders may also nominate Directors for election at an annual meeting. To nominate a Director stockholders must comply with provisions of applicable law and our By-Laws. The Corporate Governance Committee will also consider stockholder recommendations for candidates to the Board sent to the Committee c/o the Corporate Secretary. See below under Director Nomination Process for information regarding nomination or recommendation of a Director.

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GOVERNANCE OF THE COMPANY

Strong corporate governance is an integral part of our core values. Our Board is committed to having sound corporate governance principles and practices. Please visit our investor website at www.investor.wyndhamhotels.com under the Corporate Governance/Governance Documents page, which can be reached by clicking on the Corporate Governance link, followed by the Governance Documents link, for the Board's Corporate Governance Guidelines and Director Independence Criteria, the Board-approved charters for the Audit, Compensation and Corporate Governance Committees and related information. These guidelines and charters may also be obtained by writing to our Corporate Secretary at Wyndham Hotels & Resorts, Inc., 22 Sylvan Way, Parsippany, New Jersey 07054.


Corporate Governance Guidelines

Our Board adopted Corporate Governance Guidelines that, along with the charters of the Board Committees, Director Independence Criteria and Code of Business Conduct and Ethics for Directors, provide the framework for our governance. The governance rules for companies listed on the NYSE and those contained in the Securities and Exchange Commission (the "SEC") rules and regulations are reflected in the guidelines. The Board reviews these principles and other aspects of governance periodically. The Corporate Governance Guidelines are available on the Corporate Governance/Governance Documents page of our investor website at www.investor.wyndhamhotels.com.


Director Independence Criteria

The Board adopted the Director Independence Criteria set out below for its evaluation of the materiality of Director relationships with us. The Director Independence Criteria contain independence standards that exceed the independence standards specified in the listing standards of the NYSE. The Director Independence Criteria are available on the Corporate Governance/Governance Documents page of our investor website at www.investor.wyndhamhotels.com.

A Director who satisfies all of the following criteria shall be presumed to be independent under our Director Independence Criteria:

Wyndham Hotels does not currently employ and has not within the last three years employed the Director or any of his or her immediate family members (except in the case of immediate family members, in a non-executive officer capacity).

The Director is not currently and has not within the last three years been employed by Wyndham Hotels' present auditors nor has any of his or her immediate family members been so employed (except in a non-professional capacity not involving Wyndham Hotels' business).

Neither the Director nor any of his or her immediate family members is or has been within the last three years part of an interlocking directorate in which an executive officer of Wyndham Hotels serves on the compensation or equivalent committee of another company that employs the Director or his or her immediate family member as an executive officer.

The Director is not a current employee nor is an immediate family member a current executive officer of a company that has made payments to or received payments from Wyndham Hotels for property or services in an amount in any of the last three fiscal years exceeding the greater of $750,000 or 1% of such other company's consolidated gross revenues.

The Director currently does not have and has not had within the past three years a personal services contract with Wyndham Hotels or its executive officers.

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The Director has not received and the Director's immediate family member has not received during any twelve-month period within the last three years more than $100,000 in direct compensation from Wyndham Hotels other than Board fees.

The Director is not currently an officer or director of a foundation or other non-profit organization to which Wyndham Hotels within the last three years gave directly or indirectly through the provision of services more than the greater of 2% of the consolidated gross revenues of such organization during any single fiscal year or $1,000,000.


Guidelines for Determining Director Independence

Our Corporate Governance Guidelines and Director Independence Criteria provide for director independence standards that meet or exceed those of the NYSE. Our Board is required under NYSE rules to affirmatively determine that each independent Director has no material relationship with Wyndham Hotels other than as a Director.

In accordance with these standards and criteria, the Board undertook its annual review of the independence of its Directors. During this review, the Board considered whether there are any relationships or related party transactions between each Director, any member of his or her immediate family or other affiliated entities and us and our subsidiaries. The purpose of this review was to determine whether any such relationships or transactions existed that were inconsistent with a determination that the Director is independent.

The Board follows a number of procedures to review related party transactions. We maintain a written policy governing related party transactions that requires Board approval of related party transactions exceeding $120,000. Each Board member answers a questionnaire designed to disclose conflicts and related party transactions. We also review our internal records for related party transactions. Based on a review of these standards and materials, none of our independent Directors had or has any relationship with us other than as a Director.

As a result of its review, the Board affirmatively determined that the following Directors are independent of us and our management as required by the NYSE listing standards and the Director Independence Criteria: Myra J. Biblowit, James E. Buckman, Bruce B. Churchill, Mukul V. Deoras, Ronald L. Nelson and Pauline D.E. Richards.


Committees of the Board

The following describes our Board committees and related matters. The composition of the committees is provided immediately after.

Audit Committee

Responsibilities include:

appoints our independent registered public accounting firm to perform an integrated audit of our consolidated financial statements and internal control over financial reporting;

pre-approves all services performed by our independent registered public accounting firm;

provides oversight on the external reporting process and the adequacy of our internal controls;

reviews the scope, planning, staffing and budgets of the audit activities of the independent registered public accounting firm and our internal auditors;

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reviews services provided by our independent registered public accounting firm and other disclosed relationships as they bear on the independence of our independent registered public accounting firm and provides oversight on hiring policies with respect to employees or former employees of the independent auditor; and

maintains procedures for the receipt, retention and resolution of complaints regarding accounting, internal controls and auditing matters.

All members of the Audit Committee are independent Directors under the Board's Director Independence Criteria and applicable regulatory and listing standards. The Board in its business judgment determined that each member of the Audit Committee is financially literate, knowledgeable and qualified to review financial statements in accordance with applicable listing standards. The Board also determined that Bruce B. Churchill, Ronald L. Nelson and Pauline D.E. Richards are audit committee financial experts within the meaning of applicable SEC rules.

The Audit Committee Charter is available on the Corporate Governance/Governance Documents page of our investor website at www.investor.wyndhamhotels.com.

Audit Committee Report

The Audit Committee of the Board of Directors assists the Board in fulfilling its oversight responsibilities for the external financial reporting process and the adequacy of Wyndham Hotels' internal controls. Specific responsibilities of the Audit Committee are set forth in the Audit Committee Charter adopted by the Board. The Charter is available on the Corporate Governance/Governance Documents page of our investor website at www.investor.wyndhamhotels.com.

The Audit Committee is comprised of five Directors, all of whom meet the standards of independence adopted by the NYSE and the SEC. The Audit Committee appoints, compensates and oversees the services performed by Wyndham Hotels' independent registered public accounting firm. The Audit Committee approves in advance all services to be performed by Wyndham Hotels' independent registered public accounting firm in accordance with SEC rules and the Audit Committee's established policy for pre-approval of all audit services and permissible non-audit services, subject to the de minimis exceptions for non-audit services.

Management is responsible for Wyndham Hotels' financial reporting process including our system of internal controls and for the preparation of consolidated financial statements in compliance with generally accepted accounting principles, applicable laws and regulations. In addition, management is responsible for establishing, maintaining and assessing the effectiveness of Wyndham Hotels' internal control over financial reporting. Deloitte & Touche LLP ("Deloitte"), Wyndham Hotels' independent registered public accounting firm, is responsible for expressing an opinion on Wyndham Hotels' consolidated financial statements and the effectiveness of Wyndham Hotels' internal control over financial reporting. The Audit Committee reviewed and discussed Wyndham Hotels' 2019 Annual Report on Form 10-K, including the audited consolidated financial statements of Wyndham Hotels for the year ended December 31, 2019, with management and Deloitte. It is not the Audit Committee's duty or responsibility to conduct auditing or accounting reviews or procedures.

The Audit Committee also discussed with Deloitte matters required to be discussed by applicable standards and rules of the Public Company Accounting Oversight Board (the "PCAOB") and the SEC. The Audit Committee also received the written disclosures and the letter from Deloitte required by applicable standards and rules of the PCAOB, including those required by Auditing Standard No. 1301, Communications with Audit Committees, and the SEC regarding Deloitte's communications with the Audit Committee concerning independence, and discussed with Deloitte its independence.

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The Audit Committee also considered whether the permissible non-audit services provided by Deloitte to Wyndham Hotels are compatible with Deloitte maintaining its independence. The Audit Committee satisfied itself as to the independence of Deloitte.

Based on the Audit Committee's review and discussions described above, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements be included in Wyndham Hotels' Annual Report on Form 10-K for the year ended December 31, 2019.

AUDIT COMMITTEE

Pauline D.E. Richards (Chair)
James E. Buckman
Bruce B. Churchill
Mukul V. Deoras
Ronald L. Nelson

Compensation Committee

Responsibilities include:

provides oversight on our executive compensation program consistent with corporate objectives and stockholder interests;

reviews and approves Chief Executive Officer ("CEO") and other senior management compensation;

approves grants of long-term incentive awards and our senior executives' annual incentive compensation under our compensation plans; and

reviews and considers the independence of advisers to the Committee.

For additional information regarding the Compensation Committee's processes and procedures see below under Executive Compensation – Compensation Discussion and Analysis – Compensation Committee Matters.

All members of the Compensation Committee are independent Directors under the Board's Director Independence Criteria and applicable regulatory and listing standards.

The Compensation Committee Report is provided below under Executive Compensation. The Compensation Committee Charter is available on the Corporate Governance/Governance Documents page on our investor website at www.investor.wyndhamhotels.com.

Compensation Committee Interlocks and Insider Participation

During 2019, Ms. Biblowit, Mr. Buckman and Mr. Churchill served on our Compensation Committee. The Right Honourable Brian Mulroney also served on the Compensation Committee until his retirement on August 13, 2019. There are no compensation committee interlocks between Wyndham Hotels and other entities involving our executive officers and Directors.

Corporate Governance Committee

Responsibilities include:

recommends to the Board nominees for election to the Board;

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reviews principles, policies and procedures affecting Directors and the Board's operation and effectiveness;

provides oversight on the evaluation of the Board and its effectiveness; and

reviews and makes recommendations on Director compensation.

All members of the Corporate Governance Committee are independent Directors under the Board's Director Independence Criteria and applicable regulatory and listing standards.

The Corporate Governance Committee Charter is available on the Corporate Governance/Governance Documents page on our investor website at www.investor.wyndhamhotels.com.

Executive Committee

The Executive Committee may exercise all of the authority of the Board when the Board is not in session, except that the Executive Committee does not have the authority to take any action which legally or under our internal governance policies may be taken only by the full Board.


Committee Membership

The following chart provides the current committee membership and the number of meetings that each committee held during 2019.

 
   
   
   
   
   
   
   
   
   
   
                   

 

 

Director


  Audit
Committee


  Compensation
Committee


  Governance
Committee


  Executive
Committee


                   

 

 

Geoffrey A. Ballotti

                              M    

 

 

Myra J. Biblowit

              M       C            

 

 

James E. Buckman

      M       M               M    

 

 

Bruce B. Churchill

      M       C                    

 

 

Mukul V. Deoras

      M               M            

 

 

Stephen P. Holmes

                              C    

 

 

Ronald L. Nelson*

      M               M            

 

 

Pauline D.E. Richards

      C               M            

 

 

Number of Meetings in 2019

    8     5     4     2  

 C = Chair
 M = Member

*
Mr. Nelson was appointed to the Board on August 13, 2019 to fill the vacancy created by the retirement of The Right Honourable Brian Mulroney as of the same date. During 2019, Mr. Mulroney served as the Chair of the Compensation Committee and as a member of the Governance Committee until his retirement.

The Board held four meetings during 2019. Each Director attended at least 75% of the meetings of the Board and the committees of the Board on which the Director served while in office.

Directors fulfill their responsibilities not only by attending Board and committee meetings but also through communication with the Non-Executive Chairman, Lead Director, CEO and other members of management relative to matters of interest and concern to Wyndham Hotels.

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Board Leadership Structure

Under our current Board leadership structure, the roles of Chairman and CEO are held by two different individuals. Mr. Holmes, the former CEO of Wyndham Worldwide, serves as our Non-Executive Chairman, while Mr. Ballotti serves as our President and CEO. The Board believes that Mr. Holmes is able to serve as a highly effective Non-Executive Chairman due to his strong leadership skills and his extensive knowledge of our operations and the markets in which we compete. As the former CEO of Wyndham Worldwide, Mr. Holmes is not independent under NYSE rules. Therefore, we also appointed an independent Lead Director to ensure that Wyndham Hotels benefits from effective independent oversight as described below under Lead Director.

One of the key responsibilities of the Board is to review our strategic direction and hold management accountable for the execution of strategy once it is developed. The Board believes that the separation of the roles of the Chairman and the CEO is in the best interests of stockholders at this time because it allows our CEO to focus on the execution of our business strategy, growth and development, while our Non-Executive Chairman oversees our Board. In addition, our independent Lead Director provides us with independent oversight as further described below.


Lead Director

Mr. Buckman, an independent Director, has served as the Board's Lead Director since August 2019. The Right Honourable Brian Mulroney previously served in this role until his retirement from the Board on August 13, 2019. The Lead Director acts as a liaison with the Non-Executive Chairman in consultation with the other Directors; chairs executive sessions of the independent Directors and provides feedback to the Non-Executive Chairman; chairs meetings of the Board in the absence of the Non-Executive Chairman; and reviews in advance and consults with the Non-Executive Chairman regarding the schedule and agenda for all Board meetings as well as the materials distributed to Directors in connection with such meetings.


Oversight of Risk Management

The Board has an active role, as a whole and at the committee level, in providing oversight with respect to management of our risks. The Board focuses on the most significant risks facing us and our general risk management strategy and seeks to ensure that risks undertaken by us are consistent with a level of risk that is appropriate for our Company and aligned with the achievement of our business objectives and strategies.

The Board regularly reviews information regarding risks associated with our finances, credit and liquidity; our business, operations and strategy; legal, regulatory and compliance matters; and reputational exposure. The Audit Committee provides oversight on our programs for risk assessment and risk management, including with respect to financial accounting and reporting, internal audit services, information technology, cybersecurity and compliance. The Compensation Committee provides oversight on our assessment and management of risks relating to our executive compensation. The Corporate Governance Committee provides oversight on our management of risks associated with the independence of the Board and potential conflicts of interest. While each committee is responsible for providing oversight with respect to the management of risks, the entire Board is regularly informed about our risks through committee reports and management presentations.

While the Board and the committees provide oversight with respect to our risk management, our CEO and other senior management are primarily responsible for day-to-day risk management analysis and mitigation and report to the full Board or the relevant committee regarding risk management. Our leadership structure, with Mr. Holmes serving as our Non-Executive Chairman and with Mr. Ballotti

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serving as a Director, enhances the Board's effectiveness in risk oversight due to their extensive knowledge of our industry, business and operations and facilitates the Board's oversight of key risks. We believe this division of responsibility and leadership structure is the most effective approach for addressing our risk management.


Executive Sessions of Non-Management and Independent Directors

The Board meets regularly without any members of management present. Our Lead Director presides at these sessions. Our independent Directors also meet in executive session at least twice per year. The Lead Director chairs these sessions of independent directors.


Communications with the Board and Directors

Stockholders and other parties interested in communicating directly with the Board, our non-management Directors as a group, our independent Directors as a group or any individual Director may do so by writing our Corporate Secretary at Wyndham Hotels & Resorts, Inc., 22 Sylvan Way, Parsippany, New Jersey 07054. Prior to forwarding any correspondence, the Corporate Secretary will review it and in his discretion will not forward correspondence deemed to be of a commercial nature or otherwise not appropriate for review by the Directors.


Director Attendance at Annual Meeting of Stockholders

As provided in the Board's Corporate Governance Guidelines, Directors are expected to attend our annual meeting absent exceptional cause. We expect that all of our current Directors will attend our 2020 annual meeting.


Code of Business Conduct and Ethics

The Board maintains a Code of Business Conduct and Ethics for Directors with ethics guidelines specifically applicable to Directors. In addition, we maintain Business Principles applicable to all our associates, including our CEO, Chief Financial Officer ("CFO") and Chief Accounting Officer.

We will disclose on our website any amendment to or waiver from a provision of our Business Principles or Code of Business Conduct and Ethics for Directors as may be required and within the time period specified under applicable SEC and NYSE rules. The Code of Business Conduct and Ethics for Directors and our Business Principles are available on the Corporate Governance/Governance Documents page of our investor website at www.investor.wyndhamhotels.com. Copies of these documents may also be obtained free of charge by writing to our Corporate Secretary.


Director Nomination Process

Role of Corporate Governance Committee.    The Corporate Governance Committee is responsible for recommending the Director nominees for election to the Board. The Corporate Governance Committee considers the appropriate balance of experience, skills and characteristics required of the Board when considering potential candidates to serve on the Board. Nominees for Director are selected on the basis of their depth and breadth of experience, skills, wisdom, integrity, ability to make independent analytical inquiries, understanding of our business environment and willingness to devote adequate time to Board duties.

The Corporate Governance Committee also focuses on issues of diversity, such as diversity of gender, race and national origin, education, professional experience and differences in viewpoints and skills. The Corporate Governance Committee does not have a formal policy with respect to diversity;

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however, the Board and the Corporate Governance Committee believe that it is essential that the Board members represent diverse viewpoints. In considering candidates for the Board, the Corporate Governance Committee considers the entirety of each candidate's credentials in the context of these standards. For the nomination of continuing Directors for re-election, the Corporate Governance Committee also considers the individual's contributions to the Board.

All of our Directors bring to our Board a wealth of executive leadership experience derived from their service as senior executives of large organizations as well as extensive board experience. Certain individual qualifications, experience and skills of our Directors that led the Board to conclude that each nominee or Director should serve as our Director are described below under Election of Directors.

Identification and Evaluation Process.    The process for identifying and evaluating nominees to the Board is initiated by identifying a candidate who meets the criteria for selection as a nominee and has the specific qualities or skills being sought based on input from members of the Board and, if the Corporate Governance Committee deems appropriate, a third-party search firm. These candidates will be evaluated by the Corporate Governance Committee by reviewing the candidates' biographical information and qualifications and checking the candidates' references. Qualified nominees will be interviewed by at least one member of the Corporate Governance Committee. Using the input from the interview and other information it obtains, the Corporate Governance Committee evaluates whether the prospective candidate is qualified to serve as a Director and whether the Corporate Governance Committee should recommend to the Board that the Board nominate the prospective candidate for election by the stockholders or to fill a vacancy on the Board. Mr. Nelson was appointed to the Board following Mr. Mulroney's retirement in August 2019. Mr. Nelson was recommended as a nominee by our Chairman and our Corporate Governance Committee.

Stockholder Recommendations of Nominees.    The Corporate Governance Committee will consider written recommendations from stockholders for nominees for Director. Recommendations should be submitted to the Corporate Governance Committee, c/o the Corporate Secretary, and include at least the following: name of the stockholder and evidence of the person's ownership of our common stock, number of shares owned and the length of time of ownership, name of the candidate, the candidate's resume or a listing of his or her qualifications to be a Director and the person's consent to be named as a Director if selected by the Corporate Governance Committee and nominated by the Board. To evaluate nominees for Directors recommended by stockholders, the Corporate Governance Committee intends to use a substantially similar evaluation process as described above.

Stockholder Nominations and By-Law Procedures.    Our By-Laws establish procedures pursuant to which a stockholder may nominate a person for election to the Board. Our By-Laws are posted on our investor website under Corporate Governance/Governance Documents at www.investor.wyndhamhotels.com. To nominate a person for election to the Board, a stockholder must submit a notice containing all information required by our By-Laws regarding the Director nominee and the stockholder and any associated persons making the nomination, including name and address, number of shares owned, a description of any additional interests of such nominee or stockholder and certain representations regarding such nomination. Our By-Laws require that such notice be updated as necessary as of specified dates prior to the annual meeting. We may require any proposed nominee to furnish such other information as we may require to determine his or her eligibility to serve as a Director. Such notice must be accompanied by the proposed nominee's consent to being named as a nominee and to serve as a Director if elected.

To nominate a person for election to the Board at our annual meeting, written notice of a stockholder nomination must be delivered to our Corporate Secretary not less than 90 nor more than 120 days prior to the anniversary date of the prior year's annual meeting. However, if our annual meeting is advanced or delayed by more than 30 days from the anniversary date of the previous year's meeting, a stockholder's written notice will be timely if it is delivered by no later than the close of business on the 10th day following the day on which public disclosure of the date of the annual meeting is made or

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the notice of the date of the annual meeting was mailed, whichever occurs first. Our By-Laws require that any such notice be updated as necessary as of specified dates prior to the annual meeting. A stockholder may make nominations of persons for election to the Board at a special meeting if the stockholder delivers written notice to our Corporate Secretary not later than the close of business on the 10th day following the day on which public disclosure of the date such special meeting was made or notice of such special meeting was mailed, whichever occurs first. At a special meeting of stockholders, only such business may be conducted as shall have been brought before the meeting under our notice of meeting.


Compensation of Directors

Non-management Directors receive compensation for Board service designed to compensate them for their Board responsibilities and align their interests with the interests of stockholders. A management Director receives no additional compensation for Board service. The following are certain highlights of our Director compensation program:

Emphasis on equity to align Director compensation with our stockholders' long-term interests

Annual time-based restricted stock unit ("RSU") grants subject to 4-year vesting

Opportunity to defer all cash and equity compensation in the form of deferred stock units ("DSUs") under our deferred compensation plan which are not paid out until the Director's retirement from the Board

    For 2020, 100% of our non-management Directors elected to receive a portion of their total compensation in DSUs to further align their interests with our stockholders for the long term.

Limit on annual equity grants under our stockholder-approved equity incentive plan

No fees paid per meeting

No retirement benefits

Robust stock ownership guidelines

Overview.    Our Directors play a critical and active role in overseeing the management of our Company and guiding our strategic direction. Ongoing developments in corporate governance, executive compensation and financial reporting have resulted in increased demand for highly qualified and productive public company directors. The time commitment and the many responsibilities and risks of being a director of a public company of our size and profile require that we provide reasonable compensation that is competitive among our peers and commensurate with our Directors' qualifications, responsibilities and workload. Our non-management directors are compensated based on their specific Board responsibilities, including service as Board Chairman, Lead Director, or Chair or member of key Board committees. Our Board is made up of 8 members total, with 6 independent Directors. All of our independent Directors serve on more than one committee. Our director compensation program is designed to reasonably compensate our non-employee directors for their significant responsibilities, expected time commitment and qualifications.

Peer Review.    In November 2018, the Rewards Solutions practice at Aon plc ("Aon") was engaged to conduct an independent review of our non-management Director compensation program. For this review, Aon used the peer group described below in the Compensation Discussion and Analysis under "Compensation Review and Benchmarking – 2019 Peer Review." The following elements were examined as part of this review: annual board retainers in the form of cash and equity, retainers for

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chairman and committee service, and prevalence of program features such as non-executive chairman and lead director pay, other compensation in the form of perquisites and benefits, and governance policies such as stock ownership guidelines and stock hedging/pledging. The Committee reviewed the peer group data prepared by our compensation consultant that presented annual retainer fees, average committee pay, and annual equity award value at the 25th, 50th and 75th percentiles and determined that the average total direct compensation of our Directors was aligned with the philosophy of targeting the top quartile of the peer group. Based on peer group data regarding our overall Director compensation program, it was also determined that the value provided from the Company's current Director compensation program is aligned competitively with our peer group and that our program features are consistent with the structure of programs offered by our peers. Upon the recommendation of Aon, the Committee determined not to make any changes to our non-management Director compensation program for 2019, with the exception of reducing the grant date value of the annual equity grant from $150,000 to $100,000 for 2019 to align with pre-spin-off levels of compensation.

Annual Retainer Fees.    The table below describes 2019 annual retainer and committee chair and membership fees for non-management Directors. Our Directors do not receive additional fees for attending Board or committee meetings.

 
  Cash-Based   Stock-Based   Total  

Non-Executive Chairman

  $ 160,000   $ 160,000   $ 320,000  

Lead Director

  $ 132,500   $ 132,500   $ 265,000  

Director

  $ 105,000   $ 105,000   $ 210,000  

Audit Committee chair

  $ 22,500   $ 22,500   $ 45,000  

Audit Committee member

  $ 12,500   $ 12,500   $ 25,000  

Compensation Committee chair

  $ 17,500   $ 17,500   $ 35,000  

Compensation Committee member

  $ 10,000   $ 10,000   $ 20,000  

Corporate Governance Committee chair

  $ 15,000   $ 15,000   $ 30,000  

Corporate Governance Committee member

  $ 8,750   $ 8,750   $ 17,500  

Executive Committee member

  $ 10,000   $ 10,000   $ 20,000  

The annual Director retainer and committee chair and membership fees are paid on a quarterly basis, 50% in cash and 50% in Wyndham Hotels stock. The requirement for Directors to receive at least 50% of their fees in our equity further aligns their interests with those of our stockholders. The number of shares of stock issued is based on our stock price on the quarterly determination date. Directors may elect to receive the stock-based portion of their fees in the form of common stock or DSUs.

A DSU entitles the Director to receive one share of common stock following the Director's retirement or termination of service from the Board for any reason and is credited with dividend equivalents during the deferral period in the form of additional DSUs. The Director may not sell or receive value from any DSU prior to termination of service. Directors may also elect to defer any cash-based compensation or vested RSUs in the form of DSUs under our Non-Employee Director Deferred Compensation Plan.

Annual Equity Grant.    In February 2019, each non-management Director of Wyndham Hotels was awarded a grant of time-vesting RSUs with a grant date fair value of $100,000 which vests in equal annual increments over a four-year period. RSUs are credited with dividend equivalents subject to the same vesting restrictions as the underlying units.

Benefits and Other Compensation.    We provide up to a three-for-one Company match of a non-management Director's qualifying charitable contributions up to a Company contribution of $75,000 per year from Wyndham Hotels directly to that charitable organization, supporting our core value of caring for our communities.

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We maintain a policy to provide our non-management Directors annually with 500,000 Wyndham Rewards Points. These Wyndham Rewards Points have an approximate value of $6,500 and may be redeemed for numerous rewards options including stays at Wyndham properties. This benefit provides our Directors with ongoing, first-hand exposure to our properties and operations, furthering their understanding and evaluation of our business. Directors are permitted to hold up to a maximum of 1,000,000 Wyndham Rewards Points under this policy and for this reason may be granted fewer than 500,000 points in a given year.

Letter Agreement with Mr. Holmes.    In connection with his appointment as Non-Executive Chairman of the Board in June 2018, we entered into a letter agreement with Mr. Holmes, which provides him with an annual retainer of $320,000 payable 50% in cash and 50% in our equity as described above, $18,750 per year for his costs incurred in connection with retaining an administrative assistant, $12,500 per year for the cost of his office space, 50% of the cost of the lease associated with his vehicle through the earlier of the conclusion of the lease term and the conclusion of his service on the Board, and reimbursement for 50% of the cost of his annual health and wellness physical.


2019 Director Compensation Table

The following table describes compensation we paid our non-management Directors for 2019.

 

 

Name


 


Fees Paid
in Cash
($)



  Stock
Awards
($)



 


All Other
Compensation
($)



 

Total
($)(a)


 

 

Myra J. Biblowit

        130,000       230,000(b)         52,499 (c)       412,499    

 

 

James E. Buckman

    147,813     247,813(b)     81,500 (c)   477,126  

 

 

Bruce B. Churchill

        129,375       229,375(b)         81,436 (c)       440,186    

 

 

Mukul V. Deoras

    126,267     226,250(b)     6,500 (c)   359,017  

 

 

Stephen P. Holmes

        176,360       276,250(b)         47,495 (c)       500,105    

 

 

The Right Honourable Brian Mulroney

    119,063     219,063(b)     247,238 (c)   585,364  

 

 

Ronald L. Nelson

        47,344         47,344(b)         21,500 (c)       116,188    

 

 

Pauline D.E. Richards

    136,351     236,250(b)     41,798 (c)   414,399  

(a)
SEC rules require the reporting of charitable matching contributions as compensation to Directors. The below supplemental table is provided to show "All Other Compensation" and "Total" Director compensation excluding charitable matching contributions and donations, which are paid directly to the charitable organization as part of our non-employee Director charitable match program.

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    2019 Director Compensation Excluding Charitable Contributions:

 

 

Name


 


Fees Paid
in Cash
($)



 


Stock
Awards
($)



 





All Other
Compensation,
Excluding
Charitable
Donations(i)
($)






 



Total,
Excluding
Charitable
Donations(i)




 

 

Ms. Biblowit

        130,000         230,000         6,500         366,500    

 

 

Mr. Buckman

        147,813         247,813         6,500         402,126    

 

 

Mr. Churchill

        129,375         229,375         6,436         365,186    

 

 

Mr. Deoras

        126,267         226,250         6,500         359,017    

 

 

Mr. Holmes

        176,360         276,250         47,495         500,105    

 

 

Mr. Mulroney

        119,063         219,063         81,500         419,626    

 

 

Mr. Nelson

        47,344         47,344         6,500         101,188    

 

 

Ms. Richards

        136,351         236,250         5,798         378,399    
(i)
Excludes charitable matching donations which are paid by the Company directly to the selected 501(c)(3) organization under our three-for-one Company match program for our non-employee Directors. For Mr. Mulroney, also excludes the charitable donation in recognition of his retirement, as described in footnote (c) below.
(b)
Represents the aggregate grant date fair value of stock awards computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718. Each non-management Director was granted a time-vesting RSU award with a grant date fair value of $100,000 on February 27, 2019 which vests ratably over four years. The remaining amount in each row represents the aggregate grant date fair value of retainer fees paid on a quarterly basis in the form of common stock and/or DSUs.

Total shares of our common stock issuable for unvested Wyndham Hotels RSUs at December 31, 2019 were as follows: Ms. Biblowit, 3,738; Mr. Buckman, 3,738; Mr. Churchill, 3,738; Mr. Deoras, 3,738; Mr. Holmes, 3,738; Mr. Mulroney, 0; Mr. Nelson, 0; and Ms. Richards, 3,738. Total shares of our common stock issuable for Wyndham Hotels DSUs at December 31, 2019 were as follows: Ms. Biblowit, 68,914; Mr. Buckman, 62,287; Mr. Churchill, 4,426; Mr. Deoras, 2,353; Mr. Holmes, 0; Mr. Mulroney, 88,213; Mr. Nelson, 0; and Ms. Richards, 46,922. Mr. Holmes also held 182,284 stock-settled stock appreciation rights ("SSARs") at December 31, 2019.

(c)
The amounts reported in the All Other Compensation column of the 2019 Director Compensation table include the following: The value of Wyndham Rewards Points granted to each Director was as follows: Ms. Biblowit, $6,500; Mr. Buckman, $6,500; Mr. Churchill, $6,436; Mr. Deoras, $6,500; Mr. Holmes, $6,500; Mr. Mulroney, $6,500; Mr. Nelson, $6,500; and Ms. Richards, $1,170. The value of charitable matching contributions made by Wyndham Hotels were as follows: Ms. Biblowit, $45,999; Mr. Buckman, $75,000; Mr. Churchill, 75,000; Mr. Deoras, $0; Mr. Holmes, $0; Mr. Mulroney, $65,738; Mr. Nelson, $15,000; and Ms. Richards, $36,000. For Ms. Richards, this amount also includes $4,628 in life insurance premiums paid by us under a legacy Wyndham Worldwide program.

For Mr. Holmes, the amount reported in the All Other Compensation column of the 2019 Director Compensation table also includes $31,250 reflecting reimbursement for his office space and administrative support and $9,745 for his vehicle lease under the terms of his letter agreement. In addition, on limited occasions, Directors' spouses may accompany Directors on the Company-chartered aircraft when traveling for business purposes, for which there is generally no incremental cost to the Company.

Mr. Mulroney retired from the Board on August 13, 2019. In recognition of his retirement and years of services to Wyndham Hotels and its predecessors, the Company pledged a $100,000 charitable donation, payable over five years, to the Centre Hospitale Universite de Montreal in Mr. Mulroney's name. In addition, following his retirement, Mr. Mulroney spoke at our 2019 Wyndham Global Conference, an annual conference for hoteliers, developers, vendors and other hotel professionals globally, for which he was paid a fee of $75,000. For Mr. Mulroney, the amount reported in the All Other Compensation column of the 2019 Director Compensation table also reflects this speaker fee and the charitable donation in his name.

In accordance with SEC rules, the value of dividends paid to our Directors on vesting of RSUs and DSUs credited as dividend equivalents with respect to outstanding DSUs is not reported above because dividends were factored into the grant date fair value of these awards.

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Non-Management Director Stock Ownership Guidelines

The Corporate Governance Guidelines require each non-management Director to comply with Wyndham Hotels' Non-Management Director Stock Ownership Guidelines. These guidelines require each non-management Director to beneficially own an amount of our stock equal to the greater of a multiple of at least five times the cash portion of the annual retainer or two and one-half times the total retainer value without regard to Board committee fees. Directors have a period of five years after joining the Board to achieve compliance with this ownership requirement. DSUs and RSUs credited to a Director count towards satisfaction of the guidelines. As of December 31, 2019, all of our non-management Directors were in compliance with the stock ownership guidelines or were in the initial five year period after joining the Board.


Ownership of Company Stock

The following table describes the beneficial ownership of our common stock for the following persons as of December 31, 2019: each executive officer named in the Summary Compensation Table below, each Director, each person who to our knowledge beneficially owns in excess of 5% of our common stock and all of our Directors and executive officers as a group. The percentage values for each Director and executive officer are based on 93,864,167 shares of our common stock outstanding as of December 31, 2019. The principal address for each Director and executive officer of Wyndham Hotels is 22 Sylvan Way, Parsippany, New Jersey 07054.

 

Name

  Number of Shares

% of Class

 

The Vanguard Group

  9,098,399 (a) 9.56%

 

BlackRock, Inc.

  8,808,481 (b) 9.3%

 

Michele Allen

  8,372 (c)(d) *    

 

Geoffrey A. Ballotti

  303,493 (c)(d) *    

 

Tom H. Barber

  14,882 (c)(d) *    

 

Myra J. Biblowit

  77,314 (c)(e) *    

 

James E. Buckman

  69,761 (c)(e) *    

 

Bruce B. Churchill

  4,902 (c)(e) *    

 

Mukul V. Deoras

  4,788 (c)(e) *    

 

Mary R. Falvey

  137,369 (c)(d) *    

 

Stephen P. Holmes

  952,640 (c)(f) 1.0%

 

Robert D. Loewen

  38,660 (c)(d) *    

 

Ronald L. Nelson

  10,939 (c) *    

 

Pauline D.E. Richards

  53,281 (c)(e) *    

 

David B. Wyshner

  78,591 (c)(d) *    

 

All Directors and executive officers as a group (16 persons)

  1,727,822 (g) 1.84%


*
Amount represents less than 1% of outstanding common stock.

(a)
We have been informed by a Schedule 13G/A filed with the SEC on February 12, 2020 by The Vanguard Group that The Vanguard Group beneficially owns, as of December 31, 2019, 9,098,399 shares of our common stock with sole voting power over 51,717 shares, shared voting power over 17,198 shares, sole dispositive power over 9,041,157 shares and shared dispositive power over 57,242 shares. The principal business address for The Vanguard Group is 100 Vanguard Boulevard, Malvern, Pennsylvania 19355.

(b)
We have been informed by a Schedule 13G/A filed with the SEC on February 6, 2020 by BlackRock, Inc. and affiliates named in such report that BlackRock, Inc. beneficially owns, as of December 31, 2019, 8,808,481 shares of our common stock with sole voting power over 8,299,045 shares, shared voting power over no shares, sole dispositive power over 8,808,481 shares and shared dispositive power over no shares. The principal business address for BlackRock, Inc. is 55 East 52nd Street, New York, New York 10055.

(c)
Includes shares of our common stock issuable upon vesting of time-vesting RSUs within 60 days of December 31, 2019 as follows: Ms. Allen, 1,877; Mr. Ballotti, 9,534; Mr. Barber, 3,575; Ms. Biblowit, 476; Mr. Buckman, 476; Mr. Churchill, 476; Mr. Deoras, 476; Ms. Falvey, 5,363; Mr. Holmes, 476; Mr. Loewen, 5,363; Mr. Nelson, 0; Ms. Richards, 476; and Mr. Wyshner, 8,938.

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    Excludes shares of our common stock issuable upon vesting of time-vesting RSUs after 60 days from December 31, 2019 as follows: Ms. Allen, 10,212; Mr. Ballotti, 59,141; Mr. Barber, 19,888; Ms. Biblowit, 3,262; Mr. Buckman, 3,262; Mr. Churchill, 3,262; Mr. Deoras, 3,262; Ms. Falvey, 34,412; Mr. Holmes, 3,262; Mr. Loewen, 34,412; Mr. Nelson, 0; Ms. Richards, 3,262; and Mr. Wyshner, 58,881.

(d)
Includes shares of our common stock underlying stock options which are currently exercisable or will become exercisable within 60 days of December 31, 2019 as follows: Ms. Allen, 5,802; Mr. Ballotti, 101,128; Mr. Barber, 11,307; Ms. Falvey, 19,627; Mr. Loewen, 19,627; and Mr. Wyshner, 33,601.

Excludes shares of our common stock underlying stock options which are not currently exercisable and will not become exercisable within 60 days of December 31, 2019 as follows: Ms. Allen, 17,410; Mr. Ballotti, 303,386; Mr. Barber, 33,924; Ms. Falvey, 58,885; Mr. Loewen, 58,885; and Mr. Wyshner, 100,808.

(e)
Includes shares of our common stock issuable for DSUs: Ms. Biblowit, 68,914; Mr. Buckman, 62,287; Mr. Churchill, 4,426; Mr. Deoras, 2,353; Mr. Holmes, 0; Mr. Nelson, 0; and Ms. Richards, 46,922.

(f)
Includes 182,284 shares of our common stock which Mr. Holmes has the right to acquire through the exercise of SSARs within 60 days of December 31, 2019.

(g)
Includes or excludes, as the case may be, shares of common stock as indicated in the preceding footnotes. In addition, with respect to our other executive officers who are not named executive officers, this amount includes 10,010 shares and 27,392 shares of our common stock issuable with respect to unvested RSUs scheduled to vest within 60 days of December 31, 2019 and stock options that are currently exercisable or will become exercisable within 60 days of December 31, 2019, respectively. This amount excludes 52,019 shares and 82,188 shares of our common stock issuable with respect to unvested RSUs and unvested stock options, respectively, after 60 days from December 31, 2019.


Delinquent Section 16(a) Reports

Section 16(a) of the Exchange Act requires our directors, executive officers, and persons who own more than 10% of our common stock to file reports of ownership and changes in ownership of our common stock with the SEC. Based on the information available to us during 2019, we believe that all applicable Section 16(a) filing requirements were met on a timely basis except one Form 4 for Thomas Barber reporting one transaction.

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PROPOSAL NO. 1: ELECTION OF DIRECTORS

At the date of this proxy statement, the Board consists of eight members, six of whom are independent Directors under applicable listing standards and our corporate governance documents.

Until the 2021 annual meeting, our Board shall be divided into three classes, with each class consisting, as nearly as may be possible, of one-third of the total number of Directors. Beginning at the 2021 annual meeting, the classified board structure will automatically sunset and our Board will no longer be divided into three classes.

The Directors designated as Class II Directors have terms expiring at this year's annual meeting. The Directors designated as Class I Directors and the Directors designated as Class III Directors have terms expiring at the 2021 annual meeting. Each Director elected at this year's annual meeting will be elected for a term of office to expire at the 2021 annual meeting, at which point all of our Directors will stand for election annually.

On the recommendation of the Corporate Governance Committee, the Board has nominated Myra J. Biblowit, Bruce B. Churchill and Pauline D.E. Richards for election, each of whom is presently a Director, to serve until the 2021 annual meeting. Ms. Biblowit, Mr. Churchill and Ms. Richards, as well as the other five Directors who will continue to serve following the annual meeting and who are not up for election, are listed below with brief biographies.

We do not know of any reason why any nominee would be unable to serve as a Director. If any nominee is unable to serve, the shares represented by all valid proxies will be voted for the election of such other person as the Board may nominate.


Majority Voting Standard in Uncontested Director Elections

Under our By-laws, Directors are elected by a majority of the votes cast at the annual meeting, meaning that, for a Director to be elected, the number of shares voted "for" the Director must exceed the number of shares withheld from such Director's election. In the event that the number of candidates nominated for election as Directors exceeds the number of directors to be elected, a plurality of the votes cast will instead be the vote standard for that election.

If a Director is not elected under this majority vote standard, he or she is required to promptly offer to resign from the Board. The Corporate Governance Committee will recommend to the Board whether to accept or reject the resignation or to take some other action, such as rejecting the tendered resignation and addressing the apparent underlying causes of the withheld votes. In making this recommendation, the Corporate Governance Committee will consider all factors deemed relevant by its members.

The Board will act on the Corporate Governance Committee's recommendation no later than 120 days following the certification of the stockholder vote. In considering the Corporate Governance Committee's recommendation, the Board will review the factors considered by the Corporate Governance Committee and such additional information and factors the Board believes to be relevant. The Board will promptly publicly disclose its decision in a periodic or current report filed with the SEC. Any Director who offers his or her resignation under this process will not participate in the Corporate Governance Committee recommendation or Board decision regarding whether or not to accept the resignation. However, such Director shall remain active and engaged in all other Board and committee activities, deliberations and decisions during this Corporate Governance Committee and Board process.

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Class II Nominees for Election to the Board (Term Expiring at 2021 Annual Meeting)

PHOTO

Myra J. Biblowit, 71, has served as a Director since June 2018. Since April 2001, Ms. Biblowit has served as President of The Breast Cancer Research Foundation. From July 1997 to March 2001, she served as Vice Dean for External Affairs for the New York University School of Medicine and Senior Vice President of the Mount Sinai-NYU Health System. From June 1991 to June 1997, Ms. Biblowit was Senior Vice President and Executive Director of the Capital Campaign for the American Museum of Natural History. Ms. Biblowit served as a director of Cendant Corporation from April 2000 to August 2006 and Wyndham Worldwide from August 2006 to May 2018.

Ms. Biblowit's exceptional leadership experience with iconic research, educational and cultural institutions provides a unique perspective to the Board. As President of The Breast Cancer Research Foundation, a leading funder of research around the world, Ms. Biblowit brings to the Board a global perspective, marketing skills and a commitment to supporting our communities that add significant value to the Board's contribution to our success. Ms. Biblowit was selected to serve on our Board because of her specific experience, qualifications, attributes and skills described above.

PHOTO

Bruce B. Churchill, 62, has served as a Director since June 2018. From August 2014 to April 2017, Mr. Churchill served on the board of directors of Computer Sciences Corporation (now DXC Technology Company). From January 2004 to August 2015, Mr. Churchill served as President of DIRECTV Latin America and from January 2004 to March 2005, Mr. Churchill served as Chief Financial Officer of DIRECTV. From January 1996 to July 2003, Mr. Churchill served as President and Chief Operating Officer for STAR TV. Prior to joining STAR TV, Mr. Churchill served in senior positions for Fox Television and Paramount Pictures.

Mr. Churchill brings to the Board exceptional and extensive experience in domestic and international management, operations, finance, accounting and oversight of leading media and technology-driven corporations that provides valuable insight to the Board and aligns closely with our focus as an organization. Having served as a director and senior executive for other public companies, Mr. Churchill offers valuable perspectives on board operations as well. Mr. Churchill was selected to serve on our Board because of his specific experience, qualifications, attributes and skills described above.

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PHOTO

Pauline D.E. Richards, 71, has served as a Director since June 2018. From July 2008 to December 2019, Ms. Richards served as Chief Operating Officer of Trebuchet Group Holdings Limited (formerly Armour Group Holdings Limited), an investment management company. From November 2003 to July 2008, Ms. Richards served as Director of Development at the Saltus Grammar School, the largest private school in Bermuda. From January 2001 to March 2003, Ms. Richards served as Chief Financial Officer of Lombard Odier Darier Hentsch (Bermuda) Limited in Bermuda, a trust company business. From January 1999 to December 2000, she was Treasurer of Gulfstream Financial Limited, a stock brokerage company. From January 1999 to June 1999, Ms. Richards served as a consultant to Aon Group of Companies, Bermuda, an insurance brokerage company, after serving in senior positions from 1988 through 1998 including Controller, Senior Vice President and Group Financial Controller and Chief Financial Officer. Ms. Richards has served as a director of Apollo Global Management, LLC since March 2011 and Hamilton Insurance Group, Ltd. since December 2013. Ms. Richards served as a director of Wyndham Worldwide from August 2006 to May 2018 and Cendant Corporation from March 2003 to August 2006.

Ms. Richards' extensive financial background and exceptional leadership experience provide the Board with financial accounting and management expertise and perspectives. Her service as a Cendant Corporation director and as a director and member of the audit committee of Wyndham Worldwide Corporation brings to the Board valuable experience on financial reporting matters that are critical to the Board's oversight role. Ms. Richards' service as a chief financial officer and treasurer of leading finance companies allows her to offer important insights into the role of finance in our business and strategy. As a director for other public companies, Ms. Richards offers valuable perspectives on board operations as well. Ms. Richards was selected to serve on our Board because of her specific experience, qualifications, attributes and skills described above.


Class I Directors (Term Expiring at 2021 Annual Meeting)

PHOTO

Mukul V. Deoras, 56, has served as a Director since June 2018. Since September 2018, Mr. Deoras has served as President, Asia Pacific Division of Colgate-Palmolive Company and as Chairman of Colgate-Palmolive (India) Ltd. From August 2015 to September 2018, Mr. Deoras served as Chief Marketing Officer of Colgate-Palmolive Company. From February 2012 to July 2015, Mr. Deoras served as President, Asia Division of Colgate-Palmolive. From January 2010 to January 2012, Mr. Deoras served as Managing Director for Colgate-Palmolive (India) Ltd. From September 2004 to January 2010, Mr. Deoras served in positions of increasing responsibility in marketing and sales for Colgate-Palmolive. Prior to joining Colgate-Palmolive, Mr. Deoras held positions of increasing responsibility in marketing and sales at Hindustan Unilever Limited.

Mr. Deoras' exceptional career provides the Board with valuable experience and knowledge in domestic and international strategy, marketing and sales operations that are an integral part of our organizational focus. His wealth of experience in marketing and sales execution across multiple geographic regions provides insight into areas that are critical to our growth and success. Mr. Deoras was selected to serve on our Board because of his specific experience, qualifications, attributes and skills described above.

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PHOTO

Ronald L. Nelson, 67, has served as a Director since August 2019. Since July 2008, he has also served as a director of Hanesbrands, Inc. and held the roles of Lead Director since January 2015 and Non-Executive Chairman since April 2019. Mr. Nelson has also served as a director of ViacomCBS Inc. since December 2019. He previously served as a director of Viacom, Inc. from August 2016 to December 2019. Previously, Mr. Nelson served as Executive Chairman of the Board of Avis Budget Group from December 2015 to May 2018 and as its Chairman and Chief Executive Officer from August 2006 to December 2015. He also served as Avis' Chief Operating Officer from June 2010 to October 2015. From April 2003 to August 2006, Mr. Nelson served as Chief Financial Officer and President of Cendant Corporation and served as a member of its board during that same period. From November 1994 to March 2003, Mr. Nelson served as Co-Chief Operating Officer of DreamWorks SKG. Prior to that, he was Executive Vice President, Chief Financial Officer at Paramount Communications, Inc. from November 1987 to March 1994 and served as a director from June 1991 to March 1994. He also previously served as a director of Convergys Corporation from August 2008 to October 2016, serving in the role of Lead Director from April 2013 to October 2016.

Mr. Nelson brings to the Board exceptional and extensive senior leadership experience in management, finance and oversight of leading public companies that contributes significant value and insight to the Board. Having served as a director for other public companies, Mr. Nelson provides valuable experience with board operations and practices as well. Mr. Nelson was selected to serve on our Board because of his specific experience, qualifications, attributes and skills described above.


Class III Directors (Term Expiring at 2021 Annual Meeting)

PHOTO

Geoffrey A. Ballotti, 58, has served as a Director and as our President and Chief Executive Officer since June 2018. From March 2014 to May 2018, Mr. Ballotti served as President and Chief Executive Officer of Wyndham Hotel Group. From March 2008 to March 2014, Mr. Ballotti served as Chief Executive Officer of Wyndham Destination Network. From October 2003 to March 2008, Mr. Ballotti was President of the North America Division of Starwood Hotels and Resorts Worldwide. From 1989 to 2003, Mr. Ballotti held leadership positions of increasing responsibility at Starwood Hotels and Resorts Worldwide including President of Starwood North America, Executive Vice President, Operations, Senior Vice President, Southern Europe and Managing Director, Ciga Spa, Italy. Prior to joining Starwood Hotels and Resorts Worldwide, Mr. Ballotti was a Banking Officer in the Commercial Real Estate Group at the Bank of New England.

Mr. Ballotti was selected to serve on our Board because of his exceptional and visionary leadership abilities and extensive knowledge of the hotel industry and our business.

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PHOTO

James E. Buckman, 75, has served as a Director since May 2018 and our Lead Director since August 2019. Mr. Buckman has also served as a director of Wyndham Destinations (previously known as Wyndham Worldwide) since July 2006 and its lead director since March 2010. From May 2007 to January 2012, Mr. Buckman served as Vice Chairman of York Capital Management, a hedge fund management company. From May 2010 to January 2012, Mr. Buckman also served as General Counsel of York Capital Management and from January 2007 to May 2007 he served as a Senior Consultant to York Capital Management. Mr. Buckman was General Counsel and a director of Cendant Corporation from December 1997 to August 2006, a Vice Chairman of Cendant from November 1998 to August 2006 and a Senior Executive Vice President of Cendant Corporation from December 1997 to November 1998. Mr. Buckman was Senior Executive Vice President, General Counsel and Assistant Secretary of HFS Incorporated from May 1997 to December 1997, a director of HFS from June 1994 to December 1997 and Executive Vice President, General Counsel and Assistant Secretary of HFS from February 1992 to May 1997.

Mr. Buckman brings to the Board exceptional leadership, experience and perspective. His service as lead director of Wyndham Destinations affords Mr. Buckman extensive experience with Wyndham Hotels' business and operations, and his experience as an executive and general counsel of leading businesses adds valuable executive and legal experience to the Board. Mr. Buckman was selected to serve on our Board because of the specific experience, qualifications, attributes and skills described above.

PHOTO

Stephen P. Holmes, 63, has served as Non-Executive Chairman of our Board since June 2018. From August 2006 to May 2018, Mr. Holmes served as Wyndham Worldwide's Chairman of the Board and Chief Executive Officer. From December 1997 to July 2006, Mr. Holmes served as Vice Chairman and director of Cendant Corporation and Chairman and Chief Executive Officer of Cendant Corporation's Travel Content Division. Mr. Holmes served as Vice Chairman of HFS Incorporated from September 1996 to December 1997, a director of HFS from June 1994 to December 1997 and Executive Vice President, Treasurer and Chief Financial Officer of HFS from July 1990 to September 1996. Since May 2018, Mr. Holmes has served as Non-Executive Chairman of the Board of Wyndham Destinations.

Mr. Holmes was selected to serve on our Board because of his extensive public company experience, his exceptional leadership skills and his knowledge of our business and industry.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE
ELECTION OF EACH OF THE CLASS II DIRECTOR NOMINEES

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PROPOSAL NO. 2: AMENDMENT OF THE CERTIFICATE OF INCORPORATION TO ELIMINATE SUPERMAJORITY VOTING REQUIREMENTS

We are seeking stockholder approval to amend and restate the Company's Amended and Restated Certificate of Incorporation (the "Certificate of Incorporation") to eliminate the supermajority voting provisions from the Certificate of Incorporation and to replace such provisions with a majority voting standard (the "Proposed Amendments"). As discussed further below, the Certificate of Incorporation currently requires an 80% supermajority vote for stockholders to amend certain significant provisions of the Certificate of Incorporation and to amend the Company's By-Laws (see Proposal 2(a) below) and to remove directors from office (see Proposal 2(b) below). In light of the differing nature of the provisions affected, this matter is presented as two separate voting items. Approval of either Proposal 2(a) or Proposal 2(b) is not conditioned upon approval of the other.


Purpose and Effect of Proposed Amendments

The Proposed Amendments are a result of the Board's ongoing review of our corporate governance principles.

The Company became an independent, publicly traded company in June 2018 after its spin-off. In preparation for the spin-off, it was determined that maintaining the supermajority voting provisions was customary and in the best interests of the Company and its stockholders at that time. The provisions were designed to facilitate corporate governance stability by requiring broad stockholder consensus to effect changes, protect against potential self-interested action by large stockholders, and encourage potential acquirers to negotiate directly with the Board.

The Board, however, recognizes that there are different perspectives on this matter and compelling arguments for the elimination of supermajority voting requirements where the circumstances may warrant, including the view that the elimination of such provisions provides stockholders greater ability to participate in the corporate governance of a company. As corporate governance standards have evolved, many stockholders now view these provisions as limiting the ability of stockholders to participate in corporate governance. Removing the supermajority voting requirements will also align the Company's governance structure with recognized best practices.

After weighing these considerations, upon the recommendation of the Corporate Governance Committee, the Board approved and declared it advisable to adopt, subject to stockholder approval, the Proposed Amendments to eliminate the supermajority voting requirements to amend the Certificate of Incorporation and By-Laws and to eliminate the supermajority vote requirement to remove Directors.


Proposal 2(a): Eliminate Supermajority Voting Provisions to Amend Certificate of Incorporation and By-Laws

Article ELEVEN of the Certificate of Incorporation currently requires the affirmative vote of the holders of at least 80% of the voting power of the shares entitled to vote generally in the election of Directors to amend certain provisions of the Certificate of Incorporation generally relating to:

the number and authority of Directors,

the election, term of office and removal of Directors and filling of vacancies,

indemnification and expense advancement rights of Directors and officers,

director exculpation from liability,

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stockholder action by written consent,

right to call special meetings of stockholders,

amendments to the By-Laws, and

amendments to certain significant provisions of the Certificate of Incorporation.

Article TEN of the Certificate of Incorporation currently requires the affirmative vote of the holders of at least 80% of the voting power of the shares entitled to vote generally in the election of Directors to amend the By-Laws.

This Proposal 2(a) proposes to delete the supermajority voting requirements in Articles TEN and ELEVEN for amending the provisions of the Certificate of Incorporation referred to above and the By-Laws, respectively. As a result, if approved and implemented, the standard for stockholder approval of any future amendments to the Certificate of Incorporation would be the affirmative vote of the holders of a majority of the voting power of the Company's then outstanding shares of capital stock entitled to vote thereon, voting together as a single class, which is the default voting standard under the Delaware General Corporation Law, and the standard for stockholder approval of any future amendments to the By-Laws would be a majority of the voting power of the shares entitled to vote at an election of directors.


Proposal 2(b): Eliminate Supermajority Voting Provisions to Remove Directors

Currently, Article FIVE of the Certificate of Incorporation addresses Director removal from office by stockholders and provides that, prior to the third annual meeting of stockholders following May 31, 2018, Directors may be removed from office at any time only for cause, and from and including the third annual meeting of stockholders following May 31, 2018, Directors may be removed from office at any time with or without cause, in each case only if that action is approved by "at least eighty percent (80%) of the voting power of the [Company]'s then outstanding capital stock entitled to vote thereon." This Proposal 2(b) proposes to amend this provision by replacing the reference to "80%" with "a majority." As a result, if approved and implemented, stockholders would be able to remove a Director from office, in either of the above cases, by the affirmative vote of the holders of at least a majority of the voting power of the Company's then outstanding shares of capital stock entitled to vote thereon, voting together as a single class, which is the default voting standard under the Delaware General Corporation Law.


Related Changes to the By-Laws

In connection with the Proposed Amendments, the Board has approved, upon the recommendation of the Corporate Governance Committee, conforming amendments to the By-Laws, contingent upon stockholder approval of Proposal 2(a) and the effectiveness of the Second Amended and Restated Certificate of Incorporation. Specifically, the Board has approved an amendment to Article IX, Section 1 of the By-Laws to replace the 80% supermajority voting provision to amend the By-Laws with the majority voting standard described above under Proposal 2(a).


Additional Information

The general description of the Proposed Amendments set forth above is qualified in its entirety by reference to the text of the proposed Second Amended and Restated Certificate of Incorporation, which is attached as Appendix B to this proxy statement, and the text of the Second Amended and Restated By-Laws, which is attached as Appendix C to this proxy statement. The proposed additions to the Second Amended and Restated Certificate of Incorporation and the Second Amended and

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Restated By-Laws are indicated by double underlining, and the proposed deletions are indicated by strikeouts.

If Proposals 2(a) and 2(b) are not approved by at least 80% of the shares of our common stock outstanding on the record date, then the Proposed Amendments to the Certificate of Incorporation, as well as the proposed corresponding amendment to the By-Laws, to eliminate the supermajority voting requirements will not be approved. As a consequence, the adoption of the amendments to those certain provisions of the Certificate of Incorporation and to the By-Laws, as well as any stockholder vote to remove a Director from office, will continue to require an 80% supermajority vote.

The votes on the amendments to the Certificate of Incorporation are binding. Approval of Proposals 2(a) and 2(b) will constitute approval of the amendment and restatement of the Certificate of Incorporation, as set forth in Appendix B to this proxy statement. If Proposal 2(a) and/or Proposal 2(b) are approved, the Company intends to file the Second Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware, and the portion of the Proposed Amendments relating to such proposal will become effective at the time of that filing. At the time of that filing, the Second Amended and Restated By-Laws would also become effective. If neither Proposal 2(a) nor Proposal 2(b) is approved by the requisite vote, then the Second Amended and Restated Certificate of Incorporation will not be filed with the Secretary of State of the State of Delaware; the By-Law amendments will not become effective; and the supermajority voting provisions in both the Certificate of Incorporation and By-Laws will remain in effect.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
A VOTE FOR EACH PROPOSAL ABOVE TO AMEND THE CERTIFICATE OF INCORPORATION TO
ELIMINATE SUPERMAJORITY VOTING REQUIREMENTS

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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Overview

Our Compensation Discussion and Analysis provides an overview of our compensation strategy and program, the processes and procedures of our Compensation Committee of the Board (the "Committee") and the Committee's considerations and decisions made under those programs for our named executive officers for 2019.

Our Named Executive Officers.    Our named executive officers for 2019 are:

Geoffrey A. Ballotti, President and Chief Executive Officer

Michele Allen, Chief Financial Officer

Tom H. Barber, Global Chief Development Officer

Mary R. Falvey, Chief Administrative Officer

Robert D. Loewen, Chief Operating Officer

David B. Wyshner, our former Chief Financial Officer

As previously reported, Mr. Barber will leave his role as Global Chief Development Officer, effective April 1, 2020.

We Delivered Solid Financial and Operational Performance for Stockholders.    Our management team led by our named executive officers produced strong financial and operational results during 2019. Financial highlights for 2019 include:

Revenues increased 10% compared with 2018 to $2,053 million.

Diluted earnings per share was unchanged at $1.62 compared to 2018 and adjusted diluted EPS* increased 21% to $3.28.

Net income was $157 million, a 3% decrease over the prior year; adjusted net income* was $317 million, a 17% increase over the prior year.

Adjusted EBITDA* increased 21% compared with the prior year, to $613 million.

System-wide rooms grew 3% year-over-year to 831,000 rooms.

Our development pipeline grew 7% year-over-year to approximately 193,000 rooms.

We returned significant capital to stockholders:

In May 2018, our Board approved a share repurchase program authorizing the repurchase of $300 million of shares of our common stock. In August 2019, our Board increased our share repurchase authorization by another $300 million to reflect our strong free cash flow and our sustained focus on returning cash to our stockholders.

   


*
Please see Appendix A to the proxy statement for reconciliations of non-GAAP measures.

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We repurchased approximately 4.5 million shares of our common stock – or 5% of our outstanding shares – under our share repurchase program in 2019.

In February 2020, our Board approved a 10% increase in our quarterly cash dividend beginning with the first quarter of 2020. We paid dividends of $112 million in 2019.

Other key business highlights include:

In April 2019, we completed the last major milestones in completing the integration of La Quinta. We migrated the brand's more than 900 hotels to our state-of-the-art cloud-based central reservation and property management systems, and we added La Quinta to the Wyndham Rewards loyalty program.

We made significant progress towards our objective of driving quality net rooms growth.

    We ended 2019 with 831,000 rooms in our system, an increase of 3% over 2018.

    In 2019, we opened 27,000 rooms in the U.S. and we opened 36,500 rooms internationally.

    On the retention front, for 2019, our domestic retention rate in the U.S. was 95.5%, and internationally our retention rate was 93.6%.

In 2019, a meaningful component of our growth strategy was our ability to offer attractive and cost effective hotel designs. Throughout the year, we continued to invest in new design enhancements for our brands to further elevate the guest experience and the value proposition provided to hotel developers in each of our core chain scales. To that end, we launched an enhanced new-construction prototype named Microtel Moda, Days Inns' new interior design package "Dawn", AmericInn's new Pursuit design package, and Hawthorn Suites' new dual-branded prototype with La Quinta.

To further increase brand awareness and drive higher contribution growth, we launched a multi-million dollar omni-channel by Wyndham marketing campaign.

    This campaign focused on driving business to our hotels through our direct channels, which we enabled by improving the speed, effectiveness and responsiveness of our brand websites, including increased usage of loyalty member rates. Our websites and mobile app continue to be our fastest growing channels.

    In addition, we launched a multimillion dollar comprehensive La Quinta by Wyndham advertising campaign that included television, radio and digital ads.

In 2019, we continued to grow our award-winning Wyndham Rewards loyalty program.

    Wyndham Rewards membership increased 33% with over 7 million new members and 13 million La Quinta members added in 2019 for a total of over 81 million enrolled members.

    Wyndham Rewards has been recognized as one of the simplest, most rewarding loyalty programs in the hotel industry, providing more value to members than any other program. It has won more than 90 awards in the past five years, including "Best Hotel Loyalty Program" from US News & World Report, "Best Hotel Loyalty Program" in USA TODAY, "10 Best Readers' Choice Awards", "Most Rewarding Hotel Loyalty Program" from IdeaWorks and in December 2019 was ranked #1 on WalletHub's list of "Best Hotel Rewards Programs" for the fifth consecutive year.

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      Building on the program's award winning foundation, we rolled out a host of new program features in 2019, including free nights at thousands of hotels starting at just 7,500 points, new places to stay with the addition of La Quinta by Wyndham hotels and more ways to earn and redeem points.

Our Executive Compensation Program and Governance Align with Stockholder Interests.    We engage in the following practices to align our executive compensation program and governance with stockholder interests.

Our annual incentive compensation program requires achievement of rigorous, profitability-based performance metrics to incentivize high performance and achievement of annual financial goals and thus enhance value for our stockholders in the near term.

Equity awards granted to our named executive officers, which constitute a majority of our executives' target annual total compensation and vest over multi-year periods, align the interests of our executives and stockholders.

We grant our named executive officers RSUs subject to multi-year vesting to retain our executives, align the interests of our stockholders and executives and incentivize our executives to achieve longer-term stock price appreciation.

We grant our named executive officers stock options subject to multi-year vesting to retain our executives and incentivize our executives to achieve strong financial performance and drive stock price appreciation for stockholders.

We grant our named executive officers performance-based RSUs, the vesting of which is contingent upon achievement of premium performance goals based on an adjusted per-share earnings measure over a cumulative three-year period, incentivizing intermediate-term high performance and value growth for our stockholders.

Our 2019 annual incentive compensation program included, in addition to a financial objective based on adjusted EBITDA, a strategic objective based on global net room growth, providing a specific incentive for our executives to achieve a core strategic goal that drives earnings.

Our CEO receives no tax gross-ups for perquisites.

We have policies prohibiting our Directors and senior executives from engaging in any hedging transactions in our equity securities and from pledging, or using as collateral, our securities to secure personal loans or other obligations, including holding shares in margin accounts.

Our named executive officers do not have the right to receive cash severance solely upon the occurrence of a change-in-control.

None of our executive officers are entitled to any tax gross-up in connection with severance payments upon termination of employment.

All of our Directors, other than our Non-Executive Chairman and our CEO, are independent Directors.

We maintain a majority voting standard for uncontested Director elections in our By-Laws.

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We are committed to our social, ethical and environmental responsibilities.    Consistent with our core values of acting with integrity, accountability, inclusiveness, caring and fun, we are committed to being a highly ethical, diverse, admired and environmentally conscious company.

With our commitment to acting with integrity in making hotel travel possible for all, we were recognized among the World's Most Ethical Companies by Ethisphere Institute in both 2019 and 2020.

We are committed to diversity and inclusion.

    Our Board is diverse. Assuming the election of our Director nominees at this Annual Meeting, female directors represent 25% of our Board in addition to Caribbean and Asian American representation on our Board.

    We strive to maintain a culture of inclusion for our team members, partners, and guests, and we have been widely recognized as a leader in diversity. In 2020, we earned our second perfect score of 100 in the Human Rights Campaign's Best Places to Work for LGBTQ Equality, and we are a member of the Business Coalition for the Equality Act.

    Our CEO has also signed on to The CEO Action for Diversity & Inclusion, the largest CEO-driven business commitment to advance diversity and inclusion in the workplace.

    We fostered Company-wide diversity through a focus on diverse recruiting, our affinity business groups, training and supporting diverse business partners, with focused efforts to use certified diverse suppliers.

We are committed to protecting human rights. We are committed to combatting human trafficking in our communities. We have partnered with Polaris, BEST and ECPAT-USA and provide training to all our team members in an effort to prevent and combat human trafficking. Further, we are committed to the 5-Star Promise for Employee Safety with the American Hotel & Lodging Association.

We foster environmental sustainability. We have a deep commitment to preserving our natural resources while developing innovative solutions to mitigate our impact on climate change through linen and towel reuse programs, energy efficient lighting, recycling and water conservation.

    We launched a new green certification program that is used to support our efforts to engage owners and operators on improving their carbon, energy and LED lighting usage footprints along with their water conservation and waste diversion efforts.

    We launched a new Green Housekeeping program for our Wyndham Rewards members by offering Wyndham Rewards points in exchange for reduced housekeeping and towel and linen service for multi-night stays.

    We have partnered with the United States Green Building Council to promote the building of environmentally responsible and high performing structures, and our corporate headquarters has been recognized as one of the highest performing green buildings in the country.

    We actively support the UN Sustainable Development Goals framework, prioritizing action toward specific goals as part of our long-term for social responsibility roadmap.

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We support our communities. We continue to promote a Company-wide culture of team member volunteerism and philanthropy.

    Reflecting our culture of giving and service, our team members have donated millions of dollars to charitable causes around the world and more importantly thousands of volunteer hours through our signature "Wish Days".

    Our Wyndham Rewards members have donated over 100 million points to charities since inception.

We care about our most valuable asset – our team members. We continue to focus on attracting, retaining and engaging our employees. In 2019, more than 80% of our team members completed the Gallup Employee Engagement survey, which revealed that Wyndham Hotels surpassed top quartile levels of engagement, representing a strong baseline for growth and highlighting the strength of our team members' commitment to our long-term goals.

Be Well – our Wellness Program has been recognized by the American Heart Association.

2019 Compensation Strategy

For 2019, we employed a compensation strategy designed to achieve the following objectives:

Attract and retain superior senior management talent.  We believe that attracting and retaining superior senior managers are integral to our ongoing success. Our named executive officers possess extensive experience in our industry and demonstrate the exceptional leadership skills and commitment to excellence that we believe are critical to our success. Accordingly, our 2019 compensation strategy was designed in part to promote a long-term commitment from our named executive officers.

Provide our executives with compensation that is consistent and competitive with compensation provided by comparable hospitality-focused companies consisting of base salary, cash-based annual incentive compensation and equity-based incentive compensation.  We also provide our named executive officers with perquisites and health, welfare and retirement benefits which we believe are consistent with those provided by our peers and are market-competitive.

Support a high-performance environment by linking compensation with performance.  Our broad objectives are to increase our earnings, cash flow and stockholder value. Consistent with these goals, we believe a significant portion of our executive compensation should be contingent on actual results.

Support a long-term focus that aligns the interests of our executives and stockholders.  Equity incentive compensation is intended to align the interests of our named executive officers and stockholders as well as support our goal of retaining our key personnel.

Compensation Committee Matters

The Committee is responsible for providing oversight on executive compensation policies and programs consistent with corporate objectives and stockholder interests. The Committee operates under a written charter adopted by the Board. The Committee reviews the charter on an annual basis. The Committee's membership is determined by the Board, and each member is an independent Director. The Committee Chair reports at our Board meetings on Committee actions and recommendations.

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Executive Compensation Consultant.    In November 2018, the Committee retained the Rewards Solutions practice at Aon plc ("Aon") to provide independent executive compensation consulting services for 2019. The amount paid to Aon was approximately $122,000 for its services during 2019. In this capacity, the Committee utilizes reports and analyses prepared by Aon.

Wyndham Hotels has engaged affiliates of Aon for insurance brokerage and actuarial services. In this capacity, management engaged Aon Risk Services, Inc., without Board involvement, to provide insurance brokerage and actuarial services to Wyndham Hotels during 2019. During 2019, Aon Risk Services, Inc. received approximately $500,000 for these services provided to Wyndham Hotels.

Aon has in place policies and procedures designed to prevent conflicts of interest and safeguard the independence of its executive compensation consulting advice. These policies and procedures include segregation of executive compensation services in a separate business unit with performance results of that unit measured solely based on the executive compensation services, clearly defined engagements with compensation committees separate from any other services provided, management of multiservice client relationships by separate account executives, no incentives provided for cross-selling of services and no more favorable terms offered to companies due to the retention of Aon Risk Services, Inc. for additional services. On an annual basis, the Committee reviews the independence of Aon in accordance with NYSE requirements and considered this relationship as part of its review. Based on its review, the Committee concluded that no conflict of interest was raised by the services provided by Aon Risk Services, Inc. and determined that the executive compensation advice received from Aon is objective and independent.

Management's Role.    Our management plays a significant role in our executive compensation process including developing the terms of our executive officers' employment agreements and employment letters, evaluating executive performance and recommending base salary merit increases, performance factors for annual incentive compensation and long-term incentive compensation for the named executive officers other than our CEO. Our CEO works with the Committee to establish the agenda for Committee meetings, and management prepares and distributes meeting information to Committee members. Our CEO also participates in Committee meetings at the Committee's request to provide background information regarding our strategic objectives, his evaluation of the performance of the senior executives and compensation recommendations for senior executives other than himself. Our CEO is not involved in setting his own compensation, which is the exclusive responsibility of the Committee.

While the Committee reviews management's recommendations, the Committee retains discretion over all elements and levels of the named executive officers' compensation. The Committee generally bases its decisions on a combination of management's recommendations with respect to executive compensation other than for our CEO and the external market data provided by our management and compensation consultant.

Committee Consideration of Say-on-Pay Vote.    We currently hold an advisory vote on the compensation of our named executive officers (a "Say-on-Pay Vote") on an annual basis in accordance with the preference expressed by our stockholders at the 2019 annual meeting regarding the frequency of our Say-on-Pay Vote.

At our 2019 annual meeting, over 95% of the shares voted on our Say-on-Pay Vote affirmatively voted in support of the compensation of our named executive officers as described in the 2019 proxy statement. The Committee reviewed the outcome of the 2019 advisory vote and believes that the level of support affirms our current executive compensation structure and program. In the future the Committee will continue to review our executive compensation program taking into consideration the outcome of our Say-on-Pay Votes, stockholder and proxy advisory service feedback and other relevant factors in making compensation decisions for our named executive officers.

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Annual Evaluation and Compensation Risk Assessment.    An important aspect of the Committee's work relates to the annual determination of compensation for our named executive officers. The Committee meets each year to review the performance of the named executive officers and review, consider and approve any potential increases in base salaries, annual incentive compensation, grants of long-term incentive compensation and perquisites.

As part of its annual review, the Committee reviews the potential for any material risks arising from or relating to our compensation programs. Based on this review, the Committee believes that our compensation programs do not encourage excessive risk-taking by our executives or employees and are not reasonably likely to have a material adverse effect on Wyndham Hotels. In reaching its conclusion, the Committee considered the following aspects of our 2019 compensation program:

The Committee reviews and compares executive compensation against our peer group to confirm that compensation is within an acceptable range relative to the external market.

Our performance-based compensation is, in large part, keyed to our earnings, aligning interests of stockholders and management, and designed to improve our core operating results as opposed to using leverage or other high-risk strategies.

Our annual incentive compensation opportunities are capped at a specified maximum as a countermeasure to excessive risk-taking.

Our commission-based sales programs are monitored by management for compliance with law and internal policies.

Employment Agreements

We have employment agreements or employment letters with each of our named executive officers, the terms of which form the basis of our named executive officers' compensation elements and levels. The compensation elements provided under the agreements are reviewed periodically by management, our compensation consultant and the Committee against the peer group described below under Compensation Review and Benchmarking.

In 2019, the following actions were taken with respect to our named executive officers' employment agreements:

We entered into an employment agreement with Ms. Allen in connection with her appointment as our CFO effective December 3, 2019.

We entered into a separation and release agreement with Mr. Wyshner in connection with his cessation of service as our CFO effective December 3, 2019. Pursuant to his agreement, Mr. Wyshner remained in a senior advisory role reporting to Mr. Ballotti until March 1, 2020.

In connection with proposing the terms of Ms. Allen's employment agreement, management prepared peer group data for this position. Management based its recommendations on this market data and Ms. Allen's expertise and experience within the Company. The Committee approved the employment agreement in December 2019.

The terms of the employment agreements and employment letters with our named executive officers are described below under Agreements with Named Executive Officers.

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Compensation Review and Benchmarking

Management and the Committee believe that information regarding compensation practices at other companies is useful in evaluating the compensation of our named executive officers. Management and the Committee recognize that our compensation practices must be competitive in the market to attract and retain superior senior managers. In addition, this market information is a factor that management and the Committee consider in assessing the reasonableness of the compensation of our executives.

2019 Peer Review.    In November 2018, our Committee approved the peer group of companies listed below, as recommended by our compensation consultant, for our 2019 executive compensation program. This peer group was developed by our consultant using the following primary criteria: revenue size and industry, and selecting companies with a hospitality focus in the hotel, gaming/casinos, restaurants and travel services industries.

  Brinker International, Inc.   LaSalle Hotel Properties
  Caesars Entertainment Corporation   Marriott International
  Chipotle Mexican Grill, Inc.   Pinnacle Entertainment, Inc.
  Choice Hotels International, Inc.   Ryman Hospitality Properties, Inc.
  Dunkin' Brands Group, Inc.   TripAdvisor, Inc.
  Extended Stay America, Inc.   Wynn Resorts, Limited
  Hilton Worldwide Holdings Inc.   YUM! Brands, Inc.
  Hyatt Hotels Corporation    

Our compensation consultant's review of peer group compensation included the following compensation elements using the most recently filed proxy statements for each peer company: base salary, annual incentive compensation, equity incentive compensation, total cash compensation and total compensation. Compensation data for our peer group was presented for the 50th, average and 75th percentiles for each compensation element at target level performance. General data from our consultant's 2018 total compensation measurement database at these benchmarks was also considered to supplement the peer group data. For certain of our named executive officers, where the peer group provided less than five matches for a particular benchmark, only the average was reported. The objectives of the review were to compare, for general consistency, the compensation of our executives to that of similarly situated executives, to ensure that our compensation is in line with our compensation strategy and to provide a framework for compensation decisions.

Using this competitive review and consistent with our Total Compensation Strategy, we broadly target total compensation (consisting of base salary, target annual incentive compensation and target long-term incentive compensation) to be generally consistent with the market median but may approach the 75th percentile of the peer group. However, the Committee views compensation benchmarking as simply one factor in making compensation decisions for our named executive officers as it does not account for subjective factors such as challenges we face as a company, the criticality of the position to the Company's strategy, individual past and expected future performance, leadership ability, recruiting and retention needs, succession planning, experience or scope of responsibility. The Committee seeks to balance the various elements of senior executive compensation so that no single element is too heavily weighted and there is an appropriate mix between fixed and variable compensation and short-term and long-term compensation. Given the significant scope and responsibilities of our CEO, which are greater than those of our other named executive officers, the Committee believes any differences between the individual compensation elements and the total compensation of our CEO and the other named executive officers are appropriate. The Committee's review of peer group data showed that actual total compensation paid to our named executive officers was competitively aligned with our peer group.

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Peer Group for 2020.    Following our first full year as a stand-alone public company, the Committee determined it was appropriate to review the peer group for possible changes. In August 2019, our compensation consultant reviewed our peer group, using the following primary criteria: revenue size and industry, companies with a hospitality focus in the hotel, gaming/casinos, restaurants and travel services industries, and companies with which Wyndham Hotels is likely to compete for talent and market share. As a result of this review, our compensation consultant recommended the following changes to the peer group for 2020:

Add Boyd Gaming Corp. and Penn National Gaming Inc., companies which operate in related industries to Wyndham Hotels, are named peers of some of our current peers and were each identified by ISS as a peer to Wyndham Hotels.

Remove Caesars Entertainment Corporation, which would become an outsized peer due to its pending merger with another hotel and casino entertainment company, as well as LaSalle Hotel Properties and Pinnacle Entertainment Inc., each of which were acquired.

In August 2019, our Committee approved these modifications to our peer group, as recommended by our compensation consultant, for purposes of our 2020 executive compensation program.

Base Salary

Consistent with our compensation strategy, we provide base salaries designed to attract and retain our named executive officers and provide them with a base level of income.

In connection with the spin-off, the base salary rates of our named executive officers serving at that time were approved at the following levels effective June 1, 2018: Mr. Ballotti, $1,000,000, Mr. Barber, $400,000, Ms. Falvey, $510,000, Mr. Loewen, $525,000 and Mr. Wyshner, $650,000. Ms. Allen's base salary rate was approved at the level of $380,000 in connection with her appointment as Executive Vice President and Treasurer effective January 2019.

In February 2019, based on a review of peer group and market data, and in light of the recent increases approved in mid-2018, the Committee determined to maintain the base salary rates of our named executive officers at their then-current levels for 2019. In December 2019, in connection with her appointment as our CFO, Ms. Allen's base salary rate was increased to $500,000 pursuant to the terms of her employment agreement.

For 2019, the named executive officers were paid the base salaries listed in the Summary Compensation Table below.

Annual Incentive Compensation

Consistent with our compensation strategy, we provide cash-based annual incentive compensation designed to create incentives for the named executive officers to drive financial and operating performance and thus enhance value for our stockholders in the near term.

In February 2019, management recommended and the Committee approved a combination of factors to determine potential 2019 annual incentive compensation for our named executive officers including performance metrics based on the following financial and strategic objectives for our executive officers:

Financial Objective (weighted 75%): total Company Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA"), as adjusted

Strategic Objective (weighted 25%): Global Net Room Growth

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Under the annual incentive compensation program, these objectives are measured against target EBITDA and target Global Net Room Growth established at the beginning of the plan year.

We used EBITDA as our financial performance metric, a change from our 2018 annual incentive compensation program which used EBIT. We used EBITDA in order to incentivize our executives to achieve near-term earnings growth and enhance stockholder value. Under our annual incentive compensation program, EBITDA may be adjusted to reflect certain items which may be recurring or non-recurring and which in our view do not necessarily reflect ongoing performance – such as transaction and restructuring costs and impairments – the categories of which are generally specified at the outset of the performance period.

We used the strategic objective based on Global Net Room Growth to provide a specific incentive for our senior executive team to achieve a core strategic goal that drives earnings.

As part of the 2019 annual incentive compensation program, the Committee also approved a target award opportunity expressed as a percentage of each executive's base salary as set forth in each named executive officer's employment agreement or employment letter, as described below under "Agreements with Named Executive Officers". Under our annual incentive program structure, an executive's annual incentive compensation may be higher or lower than target annual incentive compensation depending on business and individual performance, subject to a maximum annual incentive award opportunity for our named executive officers of 150% of the target award opportunity.

Following the completion of each year, the Committee reviews Company operating results achieved against the pre-established performance targets approved by the Committee. In addition, as a threshold matter, to ensure that the performance of the individual executives is at the high level expected, senior management reviews with the Committee (or in the case of our CEO, the Committee itself reviews) each executive's individual contributions and personal leadership together with their performance on strategic objectives, business drivers, business development and other initiatives as applicable. If based on this review, performance at the corporate, business unit or individual level did not meet expectations, the Committee may use its discretion to adjust downward or not provide the executive's annual incentive compensation award.

In February 2019, the Committee approved an EBITDA target of $614 million and a Global Net Room Growth target of 17,000 rooms based on our 2019 operating budgets.

For the portion of the annual incentive compensation award opportunity attributable to EBITDA, the pre-established performance tiers ranged from 97% up to 103.5% of the EBITDA target, with corresponding payout levels ranging, respectively, from 25% of the target award opportunity up to a maximum of 150% of the target award opportunity. Payout level is interpolated where performance is achieved between the specified performance tiers subject to the 150% maximum payout. Performance achievement below 97% of the EBITDA target results in no payout for this portion of the award.

For the portion of the annual incentive compensation award opportunity attributable to Global Net Room Growth, the pre-established performance tiers ranged from 100% up to 200% of the Global Net Room Growth target, with corresponding payout levels ranging, respectively, from 100% of the target award opportunity up to a maximum of 150% of the target award opportunity. Payout level is interpolated where performance is achieved between the specified performance tiers subject to the 150% maximum payout. Performance achievement below 100% of the Global Net Room Growth target results in no payout for this portion of the award.

2019 Payout Results. In February 2020, the Committee reviewed the operating results achieved against the pre-established EBITDA and Global Net Room Growth targets approved by the Committee.

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For 2019, actual adjusted EBITDA, inclusive of adjustments permitted under the annual incentive plan, was $614 million and actual Global Net Room Growth was 21,092 rooms. Management reviewed the results with the Committee and a total achievement level of 100% was approved by the Committee with respect to the financial and strategic performance metrics. No adjustments were made based on individual performance.

The Non-Equity Incentive Plan column of the Summary Compensation Table below lists the annual incentive compensation paid to our named executive officers for 2019.

Long-Term Incentive Compensation

Consistent with our compensation strategy, we provide our named executive officers with long-term incentive compensation to create incentives to drive earnings growth and share price appreciation for the benefit of stockholders and encourage retention. Accordingly, 2019 long-term incentive compensation for our named executive officers focused on aligning their interests with those of stockholders, achieving competitiveness with the external market, rewarding key talent contributions and retention. Long-term incentive compensation is granted under our 2018 Equity and Incentive Plan. Our compensation consultant and the Committee periodically review our plan design to confirm its consistency with the plan design of our peers with respect to items such as long-term incentive mix prevalence and vesting provisions.

Management annually recommends to the Committee an aggregate budget available for long-term incentive compensation. For 2019, the aggregate budget was allocated based on the relative number of eligible executives. Long-term incentive compensation is then recommended by management (other than for our CEO, which is determined by the Committee) and granted by the Committee to the named executive officers based on individual performance review, tenure, scope of responsibility and future potential. Elements of individual performance considered by the Committee in such review include results of operations, achievement of strategic objectives and leadership characteristics.

Based on these factors, annual long-term incentive awards were granted to our named executive officers in February 2019 in the form of RSUs, stock options, and performance-vested RSUs ("PVRSUs"). As a result of its review of plan design described above and taking into account peer and industry practice, in February 2019, the Committee determined to incorporate PVRSUs into our long-term incentive plan ("LTIP") commencing in 2019. As discussed below, PVRSUs are viewed as a modifier of the annual long-term incentive awards because premium performance in excess of target must be achieved in order for any portion of the PVRSUs to be earned. Each type of award is subject to multi-year vesting to promote retention.

The Committee determined our CEO's 2019 annual long-term incentive award to be in the form of 50% RSUs and 50% stock options plus an LTIP modifier in the form of PVRSUs. The maximum number of PVRSUs that our CEO may earn under the LTIP modifier was determined using a value equal to 50% of the target value of his total 2019 LTIP award (RSUs and stock options). For our other named executive officers, annual long-term incentive awards were granted in the form of 75% RSUs and 25% stock options plus an LTIP modifier in the form of PVRSUs. The maximum number of PVRSUs that each of these named executive officers may earn under the LTIP modifier was determined using a value equal to 25% of the target value of his or her total 2019 LTIP award (RSUs and stock options).

An RSU represents the right to receive a share of our common stock on a set vesting date subject to continued employment and provides the executive incentive to drive share price appreciation while encouraging retention.

A stock option represents the right to purchase a number of shares of common stock for a price per share equal to the closing market price of a share of our common stock on the grant date of the stock option (referred to as the exercise price). Stock options are designed to motivate our named executive

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officers to increase stockholder value through share price appreciation, as the executives realize value from the options only if our stock price increases above the exercise price.

A PVRSU represents the right to receive a share of our common stock on a set vesting date subject to achievement of pre-established performance goals based on earnings before interest and taxes ("EBIT") per share, as adjusted, and continued employment and provides the executive incentive to drive earnings growth and share price appreciation while encouraging retention.

The performance goals for our PVRSU awards are set by the Committee at levels that exceed our three-year projected target EBIT per share established at the time of grant of the PVRSU award. Target EBIT per share represents a level of EBIT consistent with our projected operating budget. Because PVRSU awards vest only if actual EBIT per share, as adjusted, exceeds target EBIT per share, the probable outcome with respect to these awards at the time of grant is that adjusted EBIT per share in excess of target EBIT per share will not be achieved and no PVRSUs will be earned. The Committee believes that the PVRSU performance goals are consistent with the Committee's intention of making the vesting of these awards contingent upon achieving exceptional growth in EBIT per share that strongly benefits stockholders.

Vesting of PVRSUs granted in 2019 is contingent upon achievement of the levels of performance specified below and where performance is achieved between these specified performance tiers the number of vested PVRSUs is interpolated. No shares vest under the terms of these awards unless our cumulative adjusted EBIT per share performance exceeds 100% of target EBIT at the end of the three-year performance period. We do not disclose the EBIT target for our PVRSU awards while the applicable performance period is ongoing because this goal relates to executive compensation to be earned in future years and we believe that disclosure of this forward-looking target would cause us competitive harm.

 
   
   
   
   
    Performance Achievement
as % of Cumulative EBIT Per Share Target


  Level of Vesting
as % of Total PVRSUs


       
    100%       0% of PVRSUs (target)    
    101.7%     25% of PVRSUs  
    103.3%       50% of PVRSUs    
    105%     75% of PVRSUs  
    106.5%       100% of PVRSUs (maximum)    

The total cost of PVRSUs is fully funded by achievement of the EBIT per share performance goals, which represent premium levels of earnings growth. The EBIT per share results may be adjusted to reflect certain items which may be recurring or non-recurring and which in our view do not necessarily reflect ongoing performance, such as restructuring costs and impairments, the categories for which are specified at the outset of the performance period. Subject to achievement of performance tiers, vesting occurs on the third anniversary of the grant date or later upon certification of results by the Committee.

Consistent with the objectives described above, in February 2019, the Committee granted RSUs, stock options and PVRSUs to each of our named executive officers in the amounts listed in the Grants of Plan-Based Awards Table below.

Perquisites

We provide our named executive officers with perquisites that management and the Committee believe are reasonable, competitive and consistent with our compensation strategy. Management and the Committee believe that our perquisites help us to retain highly talented managers and allow them to operate more effectively.

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In February 2019, the committee reviewed the perquisites provided to senior management of the Company including our named executive officers including the associated cost. Based on this review, the Committee determined not to make any changes to the perquisite program and approved the perquisites for 2019 including a leased automobile and financial planning services. For certain perquisites, the named executive officers, other than our CEO, receive a tax gross-up payment, which means they receive additional compensation to reimburse them for the amount of taxes owed on the compensation imputed for the perquisite.

The All Other Compensation Table below lists compensation attributable to perquisites provided to the named executive officers for 2019.

Deferred Compensation Plans

Officer Deferred Compensation Plan.    Our nonqualified officer deferred compensation plan permits named executive officers to defer base salary and annual incentive compensation. We match executive contributions to the plan up to 6% of base salary and annual incentive compensation. The executive makes an irrevocable deferral election prior to the beginning of the calendar year. Upon termination from the Company, the executive may elect a single lump-sum payment of his or her account or may elect payments in annual installments of up to ten years. The participant's entire account balance is 100% vested. The contributions to our officer deferred compensation plan applicable to our named executive officers are listed below in the Nonqualified Deferred Compensation Table.

Savings Restoration Plan.    We make available to our named executive officers a savings restoration plan, which allows executives to defer compensation in excess of the amounts permitted by the Internal Revenue Code of 1986, as amended (the "Code"), but there are no matching contributions for these deferrals. None of our named executive officers have a balance under our Savings Restoration Plan.

401(k) Plan.    We provide all employees, including our named executive officers, with a 401(k) plan. Our 401(k) plan permits named executive officers to defer base salary. In 2019, we provided named executive officers and other participants a Company match of base salary contributed up to 5% of base salary, subject to statutory limitations under the Code. The Company match is 100% vested.

Severance Arrangements

The employment agreements and employment letters of our named executive officers provide for payments as a percentage of base salary and annual incentive compensation, as well as accelerated vesting of specified long-term equity grants, and in the case of PVRSUs, vesting based on performance during a specified period, if the executive's employment is terminated without cause or, if applicable, for a constructive discharge. These severance terms for our named executive officers are generally consistent with peer group market practices and data provided by our compensation consultant. These payments and terms are discussed more specifically below under Agreements with Named Executive Officers and Potential Payments on Termination or Change-in-Control.

We believe these arrangements are necessary to attract and retain our executives and ensure the continuity of management. The primary focus of the severance terms is generally on the termination of employment and thus the value of these terms arises only in the context of imminent termination. The severance terms do not enhance an executive's current income and therefore are independent of the Committee's review of executive compensation.

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Change-in-Control Arrangements

In the event of a change-in-control of Wyndham Hotels, the named executive officers receive cash severance payments only if their employment is terminated without cause or, if applicable, for constructive discharge following the change-in-control. Our named executive officers are not entitled to any excise tax gross-up in connection with their change-in-control arrangements. Long-term equity compensation grants made to all eligible employees, including the named executive officers, fully vest on a change-in-control. The payments and terms of our named executive officers' change-in-control arrangements are discussed below under Agreements with Named Executive Officers and Potential Payments on Termination or Change-in-Control.

The change-in-control terms for the named executive officers established in connection with their employment agreements and letters are generally consistent with peer group market practices and data provided by our compensation consultant. Since a potential change-in-control transaction generally results in increased stockholder value, the Committee believes that it is important to provide incentives to motivate the named executive officers to pursue and complete a potential transaction should it arise and ensure retention. Like the severance arrangements, the value of the change-in-control arrangements arises only in the context of an imminent change-in-control. The terms do not enhance the named executive officers' current income and therefore are independent of the Committee's review of executive compensation.

Executive Officer Stock Ownership Guidelines

Our Executive Officer Stock Ownership Guidelines are intended to align further the financial interests of executive officers with the interests of stockholders. The guidelines require our named executive officers to own our common stock with a market value at least equal to the following multiples: CEO: 4 times base salary, CFO: 2 times base salary, and all other executive officers: 1 times base salary. Named executive officers have a period of five years after first becoming an executive officer subject to the guidelines to achieve compliance with this ownership requirement. Stock ownership meeting the guidelines includes common stock and RSUs but excludes PVRSUs and stock options. As of December 31, 2019, all of the named executive officers were in compliance with the stock ownership guidelines or were in the initial five year period after becoming an executive officer of the Company.

Policy Against Hedging and Pledging of Company Stock

Our insider trading policy contains restrictions on transactions in our securities by our Directors, executive officers and other employees who have regular access to material nonpublic information in the normal course of their duties. Under this policy, these parties are prohibited from directly or indirectly purchasing financial instruments or engaging in any derivative transactions that are designed to hedge, offset or eliminate the risk of any decrease in the market value of Wyndham Hotels securities. These persons are also prohibited under this policy from pledging Wyndham Hotels securities as collateral for personal loans, including holding Wyndham Hotels securities in margin accounts.


Compensation Committee Report

The Compensation Committee reviewed and discussed with management the Compensation Discussion and Analysis contained in this proxy statement. Based on this review, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement for filing with the SEC.

COMPENSATION COMMITTEE
Bruce B. Churchill (Chair)
Myra J. Biblowit
James E. Buckman

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2019 Summary Compensation Table

The following table summarizes compensation paid to our named executive officers for 2019, 2018 and 2017. Information provided for 2018 and 2017 includes compensation paid by Wyndham Worldwide prior to our spin-off.

 

 

Name & Principal Position


  Year

  Salary
($)


  Bonus
($)


  Stock
Awards
($)(a)



  Option
Awards
($)(a)



  Non-Equity
Incentive Plan
Compensation
($)(b)




  All Other
Compensation
($)(c)



  Total
($)


                                   

 

 

Geoffrey A. Ballotti

      2019       999,999       --       2,000,000       2,000,000       1,499,999       218,864       6,718,862    
 

 

 

President and Chief Executive Officer

      2018       888,191       --       3,900,000       2,500,000       1,350,724       176,824       8,815,739    
 

 

          2017       744,999       --       2,900,000       --       806,834       386,221       4,838,054    

 

 

Michele Allen (d)

    2019     385,323     --     393,750     131,250     201,585     91,675     1,203,583  
                                     

 

 

Chief Financial Officer

    --     --     --     --     --     --     --     --  
                                     

 

 

    --     --     --     --     --     --     --     --  

 

 

Tom H. Barber

      2019       400,000       --       750,000       250,000       300,000       106,706       1,806,706    
 

 

 

Global Chief Development Officer

      2018       355,032       297,440(e)       950,000       250,000       263,500       104,549       2,220,521    
 

 

          2017       295,684       81,250(e)       543,750       --       141,041       98,763       1,160,488    

 

 

Mary R. Falvey

    2019     510,000     --     1,125,000     375,000     510,000     159,376     2,679,376  
                                     

 

 

Chief Administrative Officer

    2018     510,000     --     2,400,000     500,000     579,360     1,159,818     5,149,178  
                                     

 

 

    2017     510,000     --     1,900,000     --     540,600     286,749     3,237,349  

 

 

Robert D. Loewen

      2019       525,015       --       1,125,000       375,000       393,762       97,553       2,516,330    
 

 

 

Chief Operating Officer

      2018       487,972       --       1,687,500       500,000       367,633       94,003       3,137,108    
 

 

          2017       438,557       --       375,000       --       237,479       115,860       1,166,896    

 

 

David B. Wyshner

    2019     620,397     --     1,875,000     625,000     620,397     3,786,977     7,527,771  
                                     

 

 

Former Chief Financial Officer

    2018     650,013     --     4,025,000     875,000     738,415     65,378     6,353,806  
                                     

 

 

    2017     257,505     --     3,500,000     --     272,955     31,377     4,061,837  

(a)
Represents the aggregate grant date fair value of equity awards computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (ASC 718). A discussion of the assumptions used in calculating the fair value of such awards may be found in Note 14 to our 2019 audited financial statements of our Annual Report on Form 10-K filed with the SEC on February 13, 2020.


No grant date fair value is attributable to PVRSU awards under ASC 718 due to the fact that no amount will be earned under these awards at target performance. Performance results must exceed 100% of target performance in order for any PVRSUs to be earned and must meet 106.5% of target performance in order for the maximum number of PVRSUs to be earned. The grant date fair value of PVRSU awards granted in 2019 assuming maximum achievement of performance goals would be as follows: Mr. Ballotti, $2,000,000; Ms. Allen, $131,250; Mr. Barber, $250,000; Ms. Falvey, $375,000; Mr. Loewen, $375,000; and Mr. Wyshner, $625,000. The actual value realized by each individual with respect to PVRSU awards will depend on the number of shares earned based on our actual performance over the cumulative three-year performance period measured against the performance goals established at the time of grant.

(b)
For 2019, represents annual incentive compensation for 2019 paid in 2020. For 2018, represents annual incentive compensation for 2018 paid in 2019. For 2017, represents annual incentive compensation for 2017 paid in 2018.

(c)
See All Other Compensation Table below for a description of compensation included in this column.

(d)
Information is not reported for Ms. Allen for 2018 or 2017 because she was not previously a named executive officer. Ms. Allen was appointed as our CFO on December 3, 2019. During 2019 prior to that date, Ms. Allen served as our Executive Vice President and Treasurer.

(e)
Mr. Barber received a transaction bonus paid in two installments in 2017 and 2018 for services rendered in connection with the spin-off.

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2019 All Other Compensation Table

The All Other Compensation column in the Summary Compensation Table above includes the following for 2019.

 
   
   
   
   
   
   
   
   
   
   
   
   
   
   

 

 

    Mr. Ballotti
($)


  Ms. Allen
($)


  Mr. Barber
($)


  Ms. Falvey
($)


  Mr. Loewen
($)


  Mr. Wyshner
($)


 

 

Company automobile (a)

      28,277       24,047       25,156       41,791       18,152       --    

 

 

Financial planning services (b)

    20,164     9,475     9,475     12,460     --     4,950  

 

 

401(k) Company match

      15,923       9,557       15,923       15,862       15,962       16,000    

 

 

Deferred compensation Company match

    150,000     35,214     42,000     61,200     55,126     74,448  

 

 

Annual physical (c)

      4,500       4,500       4,500       4,500       --       4,500    

 

 

Aggregate tax gross-up (d)

    --     8,882     9,652     23,563     8,313     2,402