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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

o

 

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

 

AECOM

(Name of Registrant as Specified In Its Charter)

N/A

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

Payment of Filing Fee (Check the appropriate box):

ý

 

No fee required.

o

 

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

 

 

(1)

 

Title of each class of securities to which transaction applies:
        
 
    (2)   Aggregate number of securities to which transaction applies:
        
 
    (3)   Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
        
 
    (4)   Proposed maximum aggregate value of transaction:
        
 
    (5)   Total fee paid:
        
 

o

 

Fee paid previously with preliminary materials.

o

 

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

 

 

(1)

 

Amount Previously Paid:
        
 
    (2)   Form, Schedule or Registration Statement No.:
        
 
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LOGO

AECOM
1999 AVENUE OF THE STARS, SUITE 2600
LOS ANGELES, CALIFORNIA 90067

Dear AECOM Stockholder:

You are cordially invited to attend the 2020 Annual Meeting of Stockholders (the "2020 Annual Meeting") of AECOM, which will be held on Tuesday, March 10, 2020, at 3:00 p.m. local time in the Conference Center located at 1999 Avenue of the Stars, Los Angeles, California 90067.

Details of the business to be conducted at the 2020 Annual Meeting are given in the attached Notice of Annual Meeting of Stockholders and the attached Proxy Statement.

Whether or not you plan to attend the 2020 Annual Meeting in person, it is important that your shares be represented. The attached Proxy Statement contains details about how you may vote your shares.

Sincerely,

GRAPHIC


Michael S. Burke
Chairman of the Board and Chief Executive Officer


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LOGO

1999 AVENUE OF THE STARS, SUITE 2600
LOS ANGELES, CALIFORNIA 90067

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MARCH 10, 2020

The 2020 Annual Meeting of Stockholders (the "2020 Annual Meeting") of AECOM (the "Company," "our" or "we") will be held on Tuesday, March 10, 2020, at 3:00 p.m. local time in the Conference Center located at 1999 Avenue of the Stars, Los Angeles, California 90067. At the 2020 Annual Meeting, you will be asked to:

    1.
    Elect each of the 10 director nominees named in the Proxy Statement accompanying this notice to the Company's Board of Directors to serve until the Company's 2021 Annual Meeting of Stockholders.


    The Board of Directors recommends that you vote FOR each of the director nominees.

    2.
    Ratify the selection of Ernst & Young LLP as our independent registered public accounting firm for Fiscal Year 2020.


    The Board of Directors recommends that you vote FOR the ratification of the selection of Ernst & Young LLP.

    3.
    Vote on a resolution to approve our 2020 Stock Incentive Plan.


    The Board of Directors recommends that you vote FOR the approval of the 2020 Stock Incentive Plan.

    4.
    Vote to approve the Company's executive compensation, on an advisory basis.


    The Board of Directors recommends that you vote FOR the Company's executive compensation on an advisory basis.

    5.
    To consider and act upon a stockholder proposal regarding actions by written consent.


    The Board of Directors recommends that you vote AGAINST the stockholder proposal.

We will also attend to any other business properly presented at the 2020 Annual Meeting and any adjournment or postponement thereof. The foregoing items of business are more fully described in the Proxy Statement that is attached to, and a part of, this notice.

Only common stockholders of record at the close of business on January 14, 2020, can vote at the 2020 Annual Meeting or any adjournment or postponement thereof.

By order of the Board of Directors,

GRAPHIC

Manav Kumar
Corporate Secretary

Los Angeles, California
January 23, 2020


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Your Vote is Important

Whether or not you plan to attend the 2020 Annual Meeting in person, we request that you vote (a) by Internet, (b) by telephone or (c) by requesting a printed copy of the proxy materials and using the proxy card or voting instruction card enclosed therein as promptly as possible in order to ensure your representation at the 2020 Annual Meeting.

You may revoke your proxy at any time before it is exercised by giving our Corporate Secretary written notice of revocation, submitting a later-dated proxy by Internet, telephone or mail or by attending the 2020 Annual Meeting and voting in person.

Please note, however, that if your shares are held of record by a broker, bank or other nominee and you wish to vote at the 2020 Annual Meeting, you must obtain from the record holder a proxy issued in your name.


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Table of Contents

Proxy Statement Summary

  1

Introduction

 
6

Annual Meeting Information

 
7

Proposal 1: Election of Directors

 
9

Proposal 2: Ratification of Selection of Independent Registered Public Accounting Firm

 
18

Proposal 3: Approval of 2020 Stock Incentive Plan

 
20

Proposal 4: Advisory Resolution to Approve Executive Compensation

 
29

Proposal 5: Stockholder Proposal

 
30

Proposal 5: Board of Directors' Statement in Opposition to the Stockholder Proposal

 
31

Corporate Governance

 
33

Executive Officers

 
43

Compensation Discussion and Analysis

 
45

Report of the Compensation/Organization Committee of the Board of Directors

 
68

Executive Compensation Tables

 
69

CEO Pay Ratio

 
79

Directors' Compensation

 
81

Compensation Committee Interlocks and Insider Participation

 
83

Report of the Audit Committee of the Board of Directors

 
84

Audit Fees

 
86

Security Ownership of Certain Beneficial Owners and Management

 
87

Other Information

 
89

Annex A — 2020 Stock Incentive Plan

 
A-1

Annex B — Reconciliation of Non-GAAP Items

 
B-1

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Proxy Statement Summary

Meeting Information

Record Date:   January 14, 2020
Meeting Date:   March 10, 2020, 3:00 P.M. (Pacific Time)
Location:   Conference Center, 1999 Avenue of the Stars, Los Angeles, CA 90067

This summary highlights information contained elsewhere in our Proxy Statement and does not contain all of the information that you should consider. We encourage you to read the entire Proxy Statement carefully before voting. We made this Proxy Statement first available to stockholders on January 23, 2020.

Stockholder Voting Matters

Proposal

      Board's Voting
Recommendation
      Page
Reference

Elect directors to serve until our 2021 Annual Meeting of Stockholders.

      FOR EACH       9

Ratify the selection of Ernst & Young LLP as our independent registered public accounting firm for Fiscal Year 2020.

      FOR       18

Approve our 2020 Stock Incentive Plan.

      FOR       20

Advisory vote to approve our executive compensation.

      FOR       29

Stockholder proposal regarding actions by written consent.

      AGAINST       30

How to Vote


GRAPHIC

 

Vote Online
You can vote your shares online by following the instructions on your proxy card
(www.envisionreports.com/ACM).

 

GRAPHIC

 

Vote by Phone
You can vote your shares by phone by following the instructions on your proxy card (1-800-652-8683) — or scan the QR code:

 

GRAPHIC

 

Vote by Mail
You can vote your shares by mail by requesting a printed copy of the proxy materials and signing, dating and mailing the enclosed proxy card to:
            GRAPHIC       AECOM
1999 Avenue of the Stars, Suite 2600
Los Angeles, CA 90067
Attn: Corporate Secretary

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Our Current Board of Directors

Name
   
  Age
   
  Director
Since

   
  Primary (or Former) Occupation
   
  Independent
  Committee
Memberships

 
Michael S. Burke       56       2014       Chairman of the Board and Chief Executive Officer, AECOM       No     None  
Robert G. Card       66       2019       President (and former President and Chief Executive Officer of SNC-Lavalin, a large E&C firm), The Card Group LLC       Yes     A, CS  
Peter A. Feld       40       2019       Managing Member, Starboard Value LP       Yes     CO, NG, CS*  
Senator William H. Frist       67       2014       Partner, Cressey & Company (former Senate Majority Leader)       Yes     A, NG  
Jacqueline C. Hinman       58       2019       Former Chairman, President and Chief Executive Officer of CH2M HILL Companies, Ltd.       Yes     SRS  
Steven A. Kandarian‡       67       2019       Former Chairman and Chief Executive Officer of MetLife Inc.       Yes     A, CO*  
Dr. Robert J. Routs       73       2010       Former Executive Director U.S. Downstream Operations, Royal Dutch Shell plc       Yes     CO, SRS*  
Clarence T. Schmitz       71       2014       Co-Founder and Former Chief Executive Officer, Outsource Partners International Inc.       Yes     A*, CO  
Douglas W. Stotlar       59       2014       Former President and Chief Executive Officer, Con-way Inc.       Yes     A, NG*, CS  
Daniel R. Tishman       64       2010       Director and Officer of Tishman Holdings Corporation       No     SRS, CS  
General Janet C. Wolfenbarger       61       2015       General (Retired), United States Air Force       Yes     NG, SRS  
A = Audit Committee   SRS = Strategy, Risk & Safety Committee   ‡ = Lead Independent Director
CO = Compensation/Organization Committee   * = Committee Chair    
NG = Nominating/Governance Committee   † = Chairman of the Board
CS = CEO Search Committee
   

Recent Corporate Governance Actions

AECOM prioritizes direct engagement between management and the Board with our stockholders. As a result, several significant corporate governance actions have been implemented over the last several years. These actions include separating the roles of Chairman and CEO effective as of the appointment of a new CEO, adopting majority voting, adopting proxy access, providing stockholders with a right to call a special meeting, and removing supermajority provisions to approve business combinations. These actions safeguard the long-term interests of AECOM and all stockholders.

    Intended Separation of Chairman and Chief Executive Officer Roles       2019      

Roles of Chairman and Chief Executive Officer will be separated upon appointment of a new Chief Executive Officer

   
    Adopted Majority Voting       2018      

Adopted majority voting in an uncontested election of directors

   
    Adopted Proxy Access for Director Nominations       2017      

Stock ownership threshold of 3%

Holding period of 3 years

May submit nominees consisting of up to 20% of our Board or two directors

Up to 20 stockholders may group together to reach 3% stock ownership threshold

   
    Adopted Right to Call a Special Meeting of Stockholders       2017      

Stockholders owning 25% or more of our shares may request a special meeting of stockholders

   
    Removed Supermajority Provision to Approve Business Combinations       2017      

Supermajority provision to approve business combinations was eliminated

   

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Corporate Governance Information

GRAPHIC

Criteria       Detail
Audit, Compensation/Organization and Nominating/Governance Committees Consist Entirely of Independent Directors       Yes
Annual Election of All Directors       Yes
Annual Advisory Say-on-Pay Vote       Yes
All Directors Attended at Least 75% of Meetings Held       Yes
Independent Directors Meet Regularly in Executive Session       Yes
Annual Board and Committee Self Evaluations       Yes
Code of Business Conduct and Ethics       Yes
Corporate Governance Guidelines       Yes
Stock Ownership Guidelines for Directors and Executive Officers       Yes
Stockholder Rights Plan (Poison Pill)       No
Proxy Access       Yes
Stockholder Right to Call a Special Meeting       Yes
Supermajority Provision to Approve Business Combinations       No
Adopted Majority Voting       Yes
Separation of CEO and Chairman Roles (effective as of appointment of new CEO)       Yes

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Executive Compensation Practices

AECOM Employs the Following:

Pay-for-Performance — We conditioned a majority of fiscal year 2019 performance compensation for our Named Executive Officers (NEOs) on the achievement of earnings, cash flow and return on invested capital targets.

Rigorous Goal Setting — We undergo a detailed process of analyzing and reviewing a number of factors including but not limited to our short- and long-term financial plan, investor input, industry / peer performance, benchmarking and overall achievability.

Stockholder Engagement — We engage with stockholders throughout the year.

Stock Ownership Guidelines — We have stock ownership guidelines that require Section 16 officers to maintain a significant equity stake in the Company. The CEO ownership guideline is six times base salary and the guideline for other NEOs is three times base salary.

Independent Consultant — We utilize the services of an independent compensation consultant who does not provide any other services to the Company.

Tally Sheets — We use tally sheets in assessing executive total compensation.

Clawback Policy — We maintain a clawback policy that allows us to recoup a portion of the short-term cash and long-term equity incentive-based compensation awards paid to current and former Section 16 officers during the three fiscal years before an accounting restatement due to material noncompliance with any financial reporting requirement under the securities laws.

Risk Assessment — Our compensation consultant performs an independent risk assessment of compensation programs.

Competitive Analysis — We annually seek to understand labor market trends pertaining to amount and form of executive pay delivery through comprehensive competitive analyses.

Annual Say-on-Pay Vote — We have a policy to hold an advisory vote to approve the Company's executive compensation on an annual basis.



AECOM Does Not Employ the Following:

Stock Option Repricing — Our stock plan prohibits re-pricing underwater stock options or stock appreciation rights without stockholder approval.

Single Trigger Equity Acceleration — We do not maintain plans or agreements that provide for automatic single-trigger equity acceleration or bonus payments in connection with a change in control (rather any payment of benefit requires a qualifying termination of employment following a change in control known as "double trigger").

Tax Gross-Ups — We do not provide tax gross-ups on change in control severance benefits to NEOs.

Hedging and Anti-Pledging — We prohibit hedging transactions involving AECOM common stock and do not allow trading in puts, calls, options or other similar transactions. In addition, we prohibit the pledging of AECOM common stock except in certain limited circumstances subject to Company approval and demonstration of the ability to repay the applicable loan without selling such securities.

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Commitment to Sustainability and Corporate Responsibility

We embrace sustainability by striving to make a positive, lasting impact on society and the environment.

Sustainability is at the core of what we do and how we operate — focusing on the environmental, social and governance impact of our business. Through our projects and our operations, we have both a significant opportunity and a responsibility to protect, enhance and restore the world's natural and social systems.

We are committed to addressing the effects of climate change as a key priority for our sustainability program by improving resilience and working to advance ambitious greenhouse gas emissions reduction targets.

Having achieved our previous emissions reduction targets ahead of schedule, we have set new science-based targets for 2025 that are in alignment with the Paris Agreement's goals to limit the worst effects of climate change: a 20% reduction in Scope 1 and 2 emissions and a 10% reduction in supply chain emissions from our 2018 baseline. Our new targets have been independently approved by the Science Based Targets initiative (SBTi) and, at the time of approval, AECOM was the first and only US-based company in the engineering and construction sector to have set approved targets.

In addition, we continue to invest in proprietary innovations and solutions to combat globally pervasive emerging contaminants, such as our patented DE-FLUOROTM water treatment solution to destroy per- and polyfluoroalkyl substances ("PFAS") on-site.

Inspired by the tangible impact our employees make on the world, our Corporate Responsibility platform — Blueprint for a Better World — inspires action. Through skills-based volunteering, strategic partnerships and philanthropy, our employees extend their passion to help bring lasting, scalable solutions to communities in need.

GRAPHIC

The cornerstone of our platform is the Blueprint Travel Grant program, which enables employees to participate in a skills-based volunteer service trip in partnership with a nonprofit organization. Since its launch in 2018, the program has enabled more than 100 employees to give back through 35 trips to 18 countries.

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AECOM
1999 AVENUE OF THE STARS, SUITE 2600
LOS ANGELES, CALIFORNIA 90067

PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD
MARCH 10, 2020

INTRODUCTION

This Proxy Statement is furnished in connection with the solicitation of proxies, on behalf of the Board of Directors of AECOM, a Delaware corporation ("we," "our," the "Company" or "AECOM"), for use at our 2020 Annual Meeting of Stockholders ("2020 Annual Meeting") to be held on March 10, 2020, at 3:00 p.m. local time, or at any adjournment or postponement thereof. At the 2020 Annual Meeting, you will be asked to consider and vote on the matters described in this Proxy Statement and in the accompanying notice. The 2020 Annual Meeting will be held in the Conference Center located at 1999 Avenue of the Stars, Los Angeles, California 90067. Only common stockholders of record at the close of business on January 14, 2020, which is the record date for the 2020 Annual Meeting, are permitted to vote at the 2020 Annual Meeting and any adjournment or postponement thereof.

The Company's Board of Directors (the "Board of Directors" or "Board") is soliciting your vote to:

    1.
    Elect each of the 10 director nominees named in this Proxy Statement to the Company's Board of Directors to serve until the Company's 2021 Annual Meeting of Stockholders.

    2.
    Ratify the selection of Ernst & Young LLP as our independent registered public accounting firm for Fiscal Year 2020.

    3.
    Approve our 2020 Stock Incentive Plan.

    4.
    Approve the Company's executive compensation, on an advisory basis.

    5.
    Consider and act upon a stockholder proposal regarding actions by written consent.

We utilize the U.S. Securities and Exchange Commission rule allowing companies to furnish proxy materials to their stockholders over the Internet. We believe that this e-proxy process expedites stockholders' receipt of proxy materials while also lowering the costs and reducing the environmental impact of our annual meeting. On January 23, 2020, we began mailing a Notice of Internet Availability of Proxy Materials (the "Notice") to all stockholders of record as of January 14, 2020, and posted our proxy materials on the website referenced in the Notice. As more fully described in the Notice, all stockholders may choose to access our proxy materials on the website referred to in the Notice or may request a printed set of our proxy materials. In addition, the Notice and website provide information regarding how you may request proxy materials in printed form by mail or electronically by e-mail on an ongoing basis.

The Notice of Internet Availability of Proxy Materials, Proxy Statement and our Annual Report on Form 10-K are available at investors.aecom.com.

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ANNUAL MEETING INFORMATION

Proxies

You may vote your shares in person at the 2020 Annual Meeting or by proxy if you are a record holder. There are three ways to vote by proxy: (1) on the Internet by following the instructions on the Notice or proxy card, (2) by telephone by calling 1-800-652-8683 and following the instructions on the Notice or proxy card or (3) by requesting a printed copy of the proxy materials and signing, dating and mailing the enclosed proxy card to our Corporate Secretary at the address below. If your shares are held in the name of a bank, broker or another holder of record, you will receive instructions from the holder of record. You must follow the instructions of the holder of record in order for your shares to be voted. Internet and telephone voting will also be offered to stockholders owning shares through certain banks and brokers.

You may revoke your proxy at any time before it is exercised at the 2020 Annual Meeting by (1) giving our Corporate Secretary written notice of revocation, (2) delivering to us a signed proxy card with a later date, (3) granting a subsequent proxy through the Internet or telephone or (4) attending the 2020 Annual Meeting and voting in person. Written notices of revocation and other communications with respect to the revocation of proxies should be addressed to AECOM, 1999 Avenue of the Stars, Suite 2600, Los Angeles, California 90067, Attention: Corporate Secretary.

All shares represented by valid proxies received and not revoked before they are exercised will be voted in the manner specified in the proxy. Other than with respect to certain trustees who hold our shares in trust, if you submit proxy voting instructions but do not direct how to vote on each item, the persons named as proxies will vote in favor of each of the proposals. Our Board is unaware of any matters other than those described in this Proxy Statement that may be presented for action at our 2020 Annual Meeting. If other matters do properly come before our 2020 Annual Meeting, however, it is intended that shares represented by proxies will be voted in the discretion of the proxy holders.

If you are a beneficial owner and hold your shares in the name of a bank, broker or another holder of record and do not return the voting instruction card, the broker or another nominee may vote your shares on each matter at the 2020 Annual Meeting for which he or she has the requisite discretionary authority. Under applicable rules, brokers have the discretion to vote on routine matters, which include the ratification of the selection of the independent registered public accounting firm. Brokers will not have the discretion to vote on any of the other proposals presented at the 2020 Annual Meeting.

To gain admission to our 2020 Annual Meeting in person you will need to bring documentation proving that you are the owner of our common stock as of our record date, January 14, 2020, and a valid photo ID. No cameras, recording equipment, telephones or other electronic devices with recording capabilities will be allowed during the 2020 Annual Meeting.

Solicitation of Proxies

We will pay the entire cost of soliciting proxies. In addition to soliciting proxies by mail and by the Internet, we will request banks, brokers and other record holders to send proxies and proxy materials to the beneficial owners of our common stock and to secure their voting instructions, if necessary. We will reimburse record holders for their reasonable expenses in performing these tasks. We have agreed to pay Georgeson Inc. over $17,000 plus reasonable expenses, costs and disbursements for various proxy solicitation services associated with the 2020 Annual Meeting. If necessary, we may use our regular employees, who will not be specially compensated, to solicit proxies from stockholders, whether personally or by telephone, letter or other means.

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Record Date and Voting Rights

Our Board has fixed January 14, 2020, as the record date for determining the stockholders who are entitled to notice of, and to vote at, our 2020 Annual Meeting. Only common stockholders of record at the close of business on the record date will receive notice of, and be able to vote at, our 2020 Annual Meeting. As of the record date, there were 158,208,892 shares of our common stock outstanding held by 1,954 record holders. A majority of the stock issued and outstanding and entitled to vote must be present at our 2020 Annual Meeting, either in person or by proxy, in order for there to be a quorum at the meeting. Each share of our outstanding common stock entitles its holder to one vote. Shares of our common stock with respect to which the holders are present in person at our 2020 Annual Meeting but not voting, and shares for which we have received proxies but with respect to which holders of the shares have abstained, will be counted as present at our 2020 Annual Meeting for the purpose of determining whether or not a quorum exists. "Broker non-votes" will also be counted as present for the purpose of determining whether a quorum exists. Broker non-votes are shares of common stock held by brokers or nominees over which the broker or nominee lacks discretionary power to vote and for which the broker or nominee has not received specific voting instructions from the beneficial owner.

Our Board urges you to vote promptly by either (1) electronically submitting a proxy or voting instruction card over the Internet, (2) by telephone or (3) by delivering to us or to your broker, as applicable, a signed and dated proxy card.

Votes will be tabulated by the inspector of election appointed for the 2020 Annual Meeting, who will separately tabulate affirmative and negative votes, abstentions and broker non-votes.

Year End Reporting Convention

We report our results of operations based on 52- or 53-week periods ending on the Friday nearest September 30. For clarity of presentation, all periods are presented as if the fiscal year ended on September 30.

Majority Voting; Director Resignation Policy

In uncontested elections, directors will be elected by a majority of the votes cast, which means that the number of shares voted "for" a director must exceed the number of shares voted "against" that director. In uncontested elections, any director who is not elected by a majority of the votes is expected to tender his or her resignation to the Nominating/Governance Committee ("Nominating Committee"). The Nominating Committee will recommend to the Board whether to accept or reject the resignation offer, or whether other action should be taken. The Board will act on the Nominating Committee's recommendation within 90 days following certification of the election results.

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PROPOSAL 1
ELECTION OF DIRECTORS

We are nominating 10 directors for election to our Board, all of whom are current members of our Board that are standing for re-election at the 2020 Annual Meeting. Directors elected at the 2020 Annual Meeting will serve until the 2021 Annual Meeting of Stockholders and until their successors are duly elected and qualified. If a quorum is present at our 2020 Annual Meeting, the directors will be elected by a majority of the votes cast, which means that the number of shares voted "for" a director must exceed the number of shares voted "against" that director, with any director who is not elected by a majority of the votes case being expected to tender his or her resignation to the Nominating Committee. The Nominating Committee will recommend to the Board whether to accept or reject the resignation offer, or whether other action should be taken. The Board will act on the Nominating Committee's recommendation within 90 days following certification of the election results.

Shares represented by proxies will be voted, if authority to do so is not withheld, for the election of each of the director nominees named in this Proxy Statement. The size of our Board is currently 11 directors and we are nominating 10 director nominees. In connection with the Starboard Agreement (as defined below), our Board has taken action to automatically reduce the size of our Board from 11 to 10 at the conclusion of the 2020 Annual Meeting. Proxies cannot be voted for a greater number of persons than the number of nominees named. Each of the nominees has consented to serve as a director if elected, and management has no reason to believe that any nominee will be unable or unwilling to serve if elected as a director, except as set forth in the remainder of this paragraph. Pursuant to the Starboard Agreement, if at the time of the filing of this Proxy Statement a new Chief Executive Officer has not been appointed to replace Michael S. Burke, the Company may nominate certain of our current directors for election at the 2020 Annual Meeting; provided that one director, Senator William H. Frist, has submitted, and the Company has accepted an irrevocable resignation letter pursuant to which Senator Frist will resign from the Board effective upon the later of the 2020 Annual Meeting and the appointment of the new Chief Executive Officer as a director. In the event that any nominee is unavailable for re-election as a result of an unexpected occurrence, shares will be voted for the election of such substitute nominee as our Board may propose.

Director Qualifications

The Board believes that, as a whole, Board members should possess a combination of the skills, professional experience and diversity of backgrounds necessary to oversee the Company's business. The Nominating Committee is responsible for developing and recommending Board membership criteria to the full Board for approval. The criteria, which are set forth in the Company's Corporate Governance Guidelines, include the highest professional and personal ethics and values, commitment to enhancing stockholder value with sufficient time to effectively carry out his or her duties and business acumen. In considering director candidates, the Nominating Committee looks for business experience and skills, judgment, integrity, an understanding of such areas as finance, marketing, regulation and public policy and the absence of potential conflicts with the Company's interests. In particular, the Nominating Committee seeks candidates that have skills/experience in the following areas, each of which it is views as particularly important: senior leadership experience, industry experience, public company experience, financial expertise, government/regulatory expertise and international expertise. The Nominating Committee believes that it is essential that Board members represent diverse viewpoints and backgrounds.

The Nominating Committee periodically reviews the appropriate skills and characteristics required of Board members in the context of the current composition of the Board, the operating requirements of the Company and the long-term interests of the Company's stockholders. In conducting this assessment, the Nominating Committee considers diversity, skills and such other factors as it deems appropriate to maintain a balance of knowledge, experience and capabilities. This periodic assessment enables the Board to update the skills and experience it seeks in the Board, as a whole and in individual directors, as the Company's needs evolve over time and to assess the effectiveness of efforts at pursuing diversity. From time to time, while identifying director candidates, the Nominating Committee may establish specific skills and experience that it believes the Company should seek in order to constitute a balanced and effective Board.

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Board Skills and Experience

Board members should possess a combination of the skills, professional experience and diversity of backgrounds necessary to oversee AECOM's business.

GRAPHIC

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Key Skills and Experience

SENIOR LEADERSHIP EXPERIENCE

GRAPHIC

Directors who have served in senior leadership positions are important to us, as they have the experience and perspective to analyze, shape, and oversee the execution of important operational and policy issues.
  INDUSTRY / PROJECT DELIVERY EXPERTISE
GRAPHIC

Directors with industry experience are a key asset to the Company as their industry experience and knowledge provides valuable oversight and direction in managing, growing and improving our business.


PUBLIC COMPANY EXPERIENCE
GRAPHIC

Directors with Board experience understand the dynamics and operation of a corporate Board, the relationship of a Board to the CEO and other management personnel, the importance of particular agenda and oversight issues, and how to oversee a changing mix of strategic, operational and compliance related matters.


 


REGULATORY EXPERTISE
GRAPHIC

Directors who have served in government positions provide experience and insights that help us work constructively with governments around the world and address significant public policy issues.


FINANCIAL EXPERTISE
GRAPHIC

Knowledge of financial markets, financing and funding operations, and financial and accounting reporting processes is also important. This experience assists our Directors in understanding, advising on, and overseeing our capital structure, finance and investing activities, and our financial reporting and internal controls.


 


INTERNATIONAL EXPERTISE
GRAPHIC

Directors with international experience can provide valuable business and cultural perspectives regarding many important aspects of AECOM's business given AECOM's vast global reach.

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Current Board Age and Tenure

GRAPHIC   GRAPHIC

Nominees for Directors

The following section sets forth certain background information on the 10 nominees for election as directors as well as each individual's specific experience, qualifications and skills that led our Board to conclude that each such director nominee should serve on our Board.

  Robert G. Card

Age: 66

Director Since: 2019

Board Committee:
• Audit

• CEO Search

Mr. Card brings to our Board strong expertise in the architecture, engineering and construction industry through his leadership of infrastructure firms in Canada and the United States. Mr. Card's public sector background adds valuable perspective in light of AECOM's extensive work with government clients paired with substantial corporate board experience.

Business Experience
The Card Group LLC

President (October 2015 -Present)

SNC-Lavalin Group Inc.

President and Chief Executive Officer (2012 - 2015)

CH2M HILL Companies, Ltd.

President, Energy, Water and Facilities Divisions (2004 - 2012)

Public Service
U.S. Department of Energy

Under Secretary of Energy (2001 - 2004)

Public Boards
Amec Foster Wheeler plc (2017)

Private Boards and Community Service
Westinghouse Electric Company LLC (2018 - Present)
Longenecker & Associates LLC
CH2M Hill Companies, Ltd.
(2005 - 2012)

Education
Bachelor of Science (University of Washington)
Master of Science (Stanford University)

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  Peter A. Feld

Age: 40

Director Since: 2019

Board Committee:
• Compensation and Organization

• Nominating and Governance
• CEO Search (Chair)

Mr. Feld brings to our Board extensive experience and knowledge in business management as well as financial expertise, especially with publicly traded companies. Additionally, Mr. Feld's experience serving on the boards of a range of companies and through advisory capacities contributes to our corporate governance and strategic perspective.

Business Experience
Starboard Value LP

Managing Member and Head of Research (2011 - Present)

Ramius LLC

Managing Director (2008 - 2011)

Ramius Value and Opportunity Master Fund Ltd.

Portfolio Manager (2008 - 2011)

Public Boards
Magellan Health, Inc. (2019 - Present)
NortonLifeLock Inc. (f/k/a Symantec Corporation) (2018 - Present)
Marvell Technology Group Ltd. (2016 - 2018)
The Brink's Company (2016 - 2017)
Insperity, Inc. (2015 - 2017)
Darden Restaurants, Inc. (2014 - 2015)

Education
Bachelor of Arts (Tufts University)

     
  Senator William H. Frist

Age: 67

Director Since: 2014

Board Committee:
• Audit

• Nominating and Governance

Senator Frist's experience in elected public service, including serving as former Majority Leader of the United States Senate, gives him the leadership and consensus-building skills necessary to assist our Board in a range of its activities. He has extensive knowledge of the workings of government and, as a former member of the Senate Finance Committee, of the federal budgeting process. His insight is important given AECOM's large roster of public sector clients.

Business Experience
Cressey & Company LP

Partner (2008 - Present)

Jefferies Group LLC (2017 - Present)

Global Senior Advisor (2017 - Present)

Public Service
United States Senate

Majority Leader (2003 -2007)

Senator for Tennessee (1995 - 2007)

Public Boards
Teladoc Health, Inc. (2014 - Present)
Select Medical Corporation (2012 - Present)
Smile Direct Club (2019 - Present)

Private Boards and Community Service
Robert Wood Johnson Foundation
OneOncology
Accolade LLC
The Nature Conservancy Global Board

Education
Bachelor of Science (Princeton University)
Doctor of Medicine (Harvard University)

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  Jacqueline C. Hinman

Age: 58

Director Since: 2019

Board Committee:
• Strategy, Risk and Safety

Ms. Hinman brings to our Board strong knowledge, management and operational experience in the engineering and construction management industry. Due to her prior experience as the Chief Executive Officer of a large engineering firm and her current service on public company boards, Ms. Hinman brings corporate governance and corporate strategy expertise.

Business Experience
CH2M Hill Companies, Ltd.

Chairman, President, Chief Executive Officer and Director (2014 - 2017)

President, International and Infrastructure (2005 to 2013)

Senior Vice President and Project Manager (1988 - 1996)

Earth Tech, Inc.

Senior Vice President, Government, Facilities and Infrastructure (2001 - 2003)

Talisman Partners

Founder and Chief Executive Officer (1997 - 2001)

Public Boards
International Paper Company (2017 - Present)
Dow Chemical Company (2019 - Present)

Private Boards and Community Service
CH2M Hill Companies, Ltd. (2008 - 2017)

Education
Bachelor of Science (Pennsylvania State University)

     
  Steven A. Kandarian

Age: 67

Director Since: 2019,
Lead Independent Director

Board Committee:
• Compensation and Organization (Chair)

• Audit

Mr. Kandarian brings to our Board executive management, financial, government relations and public policy experience. Due to his experience as a Chief Executive Officer of a major public company and his service on public company boards, Mr. Kandarian also brings corporate governance, corporate strategy, stockholder relations and regulatory expertise.

Business Experience
MetLife, Inc.

Chairman of the Board, President and Chief Executive Officer (2012 - 2019)

Executive Vice President and Chief Investment Officer (2005 - 2011)

Pension Benefit Guaranty Corporation

Executive Director (2001 - 2004)

Orion Partners,  LP

Founder (1993 - 2001)

Public Boards
ExxonMobil (2018 - Present)
Neuberger Berman (2015 - Present)
MetLife, Inc. (2011 - 2019)

Private Boards and Community Service
Damon Runyon Cancer Research Foundation

Education
Bachelor of Arts (Clark University)
Juris Doctorate (Georgetown University)
Master of Business Administration (Harvard University)

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  Robert J. Routs

Age: 73

Director Since: 2010

Board Committee:
• Strategy, Risk and Safety (Chair)

• Compensation and Organization

Dr. Routs brings to our Board substantial global energy sector leadership and operations experience. He had oversight of major project activities in the refining and chemical sector, and adds valuable international business experience and knowledge supportive of AECOM's global operations, as well as extensive corporate expertise given his service on public boards.

Business Experience
Royal Dutch Shell Plc

Executive Director, U.S Downstream Operations (2004 - 2008)

Shell Canada

Chairman (2004 - 2008)

Group Managing Director, Oil Products & Refining (2003 - 2004)

Shell Oil Products U.S.

President and Chief Executive (2002 - 2003)

Public Boards
Royal DSM NV (2010 to Present), Chairman of the Board
Maersk Drilling (2018 - Present)
ATCO Ltd. (2012 - Present)

Education
Master of Chemical Engineering (Eindhoven University of Technology)
Doctor of Technical Sciences (Eindhoven University of Technology)

     
  Clarence T. Schmitz

Age: 71

Director Since: 2014

Board Committee:
• Audit (Chair)

• Compensation and Organization

Mr. Schmitz brings to our Board an extensive career in the professional services industry that spans four decades, with significant financial and global experience as an executive and board member including service as National Managing Partner of KPMG LLP.

Business Experience
Outsource Partners International Inc.

Chairman, Co-Founder and Chief Executive Officer (2000 - 2011)

Jefferies Group Inc.

Executive Vice President and Chief Financial Officer (1995 - 2000)

KPMG LLP

National Managing Partner (1970 - 1995)

Private Boards and Community Service
KPMG LLP, Board of Directors (1990 - 1994)
CureSearch for Children's Cancer, Chairman of Board of Trustees
The City of Hope, Board of Trustees

Education
Bachelor of Accounting (Case Western Reserve University)

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  Douglas W. Stotlar

Age: 59

Director Since: 2014

Board Committee:
• Nominating and Governance (Chair)

• Audit
• CEO Search

Mr. Stotlar brings to our Board substantial knowledge of the transportation sector. As a former Chief Executive Officer of a public company, Mr. Stotlar contributes valuable experience with corporate governance practices, labor and stockholder relations matters, as well as current legal and regulatory requirements and trends.

Business Experience
Con-way Inc.

President, Chief Executive Officer and Director (2005 - 2015)

Con-way Transportation Services Inc.

President and Chief Executive Officer (2004 - 2005)

Executive Vice President and Chief Operating Officer (2002 - 2004)

Executive Vice President of Operations (1997 - 2002)

Public Boards
Reliance Steel & Aluminum Co. (2016 - Present)
LSC Communications, Inc. (2016 - Present)

Private Board and Community Service

Grieve Well (2009 - 2019)

Education
Bachelor of Science (The Ohio State University)

     
  Daniel R. Tishman

Age: 64

Director Since: 2010

Board Committee:
• Strategy, Risk and Safety

• CEO Search

Mr. Tishman brings to our Board extensive knowledge, management, business and operational experience in the construction management industry and on large-scale development projects such as the rebuilding of the World Trade Center site in New York City and other major projects.

Business Experience
Tishman Holdings Corporation

Chairman and Executive Vice President (1997 - Present)

Tishman Construction Corporation

Chairman of the Board and Chief Executive Officer (1991 - 2010)

AECOM

Vice Chairman (2010 - 2018)

Private Boards and Community Service
Montefiore Medicine, Chairman of the Board of Trustees
Real Estate Board of New York
Natural Resources Defense Council
National September 11 Memorial & Museum

Education
Bachelor of Science (Evergreen State College)
Master of Science (Lesley College)

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  Gen. Janet C. Wolfenbarger, USAF Retired

Age: 61

Director Since: 2015

Board Committee:
• Nominating and Governance

• Strategy, Risk and Safety

General Wolfenbarger brings to our Board a distinguished career as a senior leader in the military, including serving as the Air Force's first female four-star general. In addition to significant international experience, these qualifications provide our Board with valuable government-related expertise supportive of the company's global business operations and public-sector client roster.

Public Service
Air Force Materiel Command, Wright-Patterson Air Force Base

Commander, Air Force Materiel Command (2012 - 2015)

Commander, C-17 Systems Group for the Aeronautical Systems Center (2002 - 2005)

Director, B-2 System Program Office (2000 - 2002)

Pentagon

Military Deputy to the Assistant Secretary of the Air Force for Acquisition (2011 - 2012)

Service's Director of the Acquisition Center of Excellence (2005 - 2006)

Private Boards and Community Service
KPMG LLP, Independent Director (2018 - Present)
Defense Advisory Committee on Women in the Services, Chair
Woman in Military Service for America Memorial, Co-Chair
Falcon Foundation, Trustee (2016 - Present)

Education

Bachelor of Science (U.S. Air Force Academy)
Master of Science (Massachusetts Institute of Technology)
Master of Science (National Defense University)

Vote Required and Recommendation of the Board of Directors

Directors are elected by a majority of the votes cast for and against by holders of shares entitled to vote at the 2020 Annual Meeting. This means that for each director the number of votes cast "FOR" the director must exceed the number of votes cast "AGAINST" the director. Abstentions and broker non-votes will not be considered votes cast.

The Board of Directors recommends that you vote FOR the election of each nominee for director.

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PROPOSAL 2
RATIFICATION OF SELECTION OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee of our Board has retained Ernst & Young LLP to serve as our independent registered public accounting firm for the fiscal year ending September 30, 2020. Ernst & Young LLP has served as the Company's independent registered public accounting firm since 1990. A representative of Ernst & Young LLP is expected to be present at the 2020 Annual Meeting and will have an opportunity to make a statement if the representative so desires, and will be available to respond to appropriate questions.

Reasons for the Proposal

The selection of our independent registered public accounting firm is not required to be submitted for stockholder approval, but the Audit Committee of our Board is seeking ratification of its selection of Ernst & Young LLP from our stockholders as a matter of good corporate practice. If stockholders do not ratify this selection, the Audit Committee of our Board will reconsider its selection of Ernst & Young LLP and will, in its sole discretion, either continue to retain this firm or appoint a new independent registered public accounting firm. Even if the selection is ratified, the Audit Committee may, in its discretion, appoint a different independent registered public accounting firm at any time during the fiscal year if it determines that such a change would be in the Company's best interests and the best interests of our stockholders.

Reasons for Recommendation to Appoint Ernst & Young as the Company's Independent Registered Public Accounting Firm

As with previous years, the Audit Committee undertook a review of Ernst & Young LLP in determining whether to select Ernst & Young LLP as the Company's independent registered public accounting firm for fiscal year 2019 and to recommend ratification of its selection to the Company's stockholders. In that review, the Audit Committee considered a number of factors including:

    continued independence of Ernst & Young LLP;

    length of time Ernst & Young LLP has been engaged by the Company;

    senior management's assessment of Ernst & Young LLP's performance;

    audit and non-audit fees;

    capacity to appropriately staff the audit;

    geographic and subject matter coverage;

    lead audit engagement partner performance;

    overall performance;

    qualifications and quality control procedures; and

    whether retaining Ernst & Young LLP is in the best interests of the Company and its stockholders.

Based upon this review, the Audit Committee believes that Ernst & Young LLP is independent and that it is in the best interests of the Company and our stockholders to retain Ernst & Young LLP to serve as our independent registered public accounting firm for fiscal year 2020.

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In accordance with the Sarbanes-Oxley Act and the related SEC rules, the Audit Committee limits the number of consecutive years an individual partner may serve as the lead audit engagement partner to the Company. The maximum number of consecutive years of service in that capacity is five years. The current lead audit engagement partner is in his fourth year in that role.

Vote Required and Recommendation of the Board of Directors

The ratification of our independent registered public accounting firm requires the affirmative vote of the holders of a majority of the shares of common stock present in person or represented by proxy and entitled to vote on the proposal at the 2020 Annual Meeting. Abstentions will be counted as present and will have the effect of a vote against the proposal. Brokers have discretion to vote on the ratification of our independent registered public accounting firm and, as such, no votes on this proposal will be considered broker non-votes.

The Board of Directors recommends that you vote FOR the ratification of Ernst & Young LLP.

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PROPOSAL 3
APPROVAL OF 2020 STOCK INCENTIVE PLAN

Overview

On November 29, 2019, the Board of Directors unanimously adopted and approved the 2020 Stock Incentive Plan (the "Plan"), and is submitting the Plan to stockholders for their adoption and approval at the 2020 Annual Meeting. The Board believes our interests are best advanced by encouraging individuals responsible for our long-term success to remain in the service of the Company and by aligning the financial objectives of such individuals with those of our stockholders, in each case, through the grant of equity-based incentives.

The Company currently administers its equity-based compensation programs under the Company's Amended and Restated 2016 Stock Incentive Plan (the "2016 SIP"). As of December 31, 2019, 3,374,380 full-value awards such as Restricted Stock Units ("RSUs") and Performance Earnings Programs awards ("PEPs"), or up to 8,435,950 shares subject to awards other than full-value awards such as stock options and stock appreciation rights shares remained available for new grants under the 2016 SIP; however, if the Plan is approved, no additional awards will be granted under the 2016 SIP.

The Plan, if approved, will provide for the issuance of up to 4,800,000 full-value awards (i.e., RSUs and PEPs) or up to 12,000,000 shares subject to awards other than full-value awards (i.e., stock options). The 4,800,000 shares or 12,000,000 shares represent only 3.0% or 7.6%, respectively, of the Company's outstanding common equity (measured as of December 31, 2019). If the Plan is approved and awards are granted under the 2016 SIP after December 31, 2019, the maximum number of shares available for issuance under the Plan will be reduced by any shares issued pursuant to such awards. The Board currently expects that the proposed share reserve under the Plan will fund the Company's equity compensation for three years.

While approving the Plan, the Board considered, among other things, the potential dilution to its current stockholders as measured by burn rate and overhang (as described in "Key Data" below) and the continued importance of motivating, recruiting and retaining key employees.

Why You Should Vote to Approve the Plan

The Board recommends that our stockholders approve the Plan because it believes appropriate equity incentives are important to attract and retain the highest-caliber individuals, to link incentive reward to Company performance, to encourage employee and director ownership in our Company and to align the interests of participants to those of our stockholders. The approval of the Plan will enable us to continue to provide such incentives.

If the Plan is not approved, we may not be able to provide persons eligible for awards with compensation packages that are necessary to attract, retain and motivate these individuals.

Key Data

Overhang is equal to the sum of the total number of shares subject to equity awards outstanding and the total number of shares available for grant under the Company's equity plans divided by the sum of the total common stock outstanding, the total number of shares subject to equity awards outstanding and the total number of

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shares available for grant under the Company's equity plans. The following table sets forth information to calculate the Company's overhang as of December 31, 2019:

 
  Stock
Options
Outstanding(1)(2)

  Restricted
Stock
Awards and
RSUs
Outstanding

  PEPs
Outstanding

  Shares
Issuable for
Future Grants

  Common
Shares
Outstanding

  AECOM's
Overhang

Before Stockholder Approval

  127,714   2,817,794   1,948,372   3,374,380 /
8,435,950(3)
  158,193,698   5.23% /
8.43%(3)

After Stockholder Approval

 
127,714
 
2,817,794
 
1,948,372
 
4,800,000 /
12,000,000(3)
 
158,193,698
 
6.13% /
10.68%(3)

(1)
Weighted average exercise price of outstanding stock options is $31.62.

(2)
Weighted average remaining contractual life of outstanding stock options is 4.18 years.

(3)
The first amount reflects the number of shares issuable from PEPs and RSUs. The second amount reflects the number of shares issuable from stock options.

Burn Rate is equal to the total number of equity awards the Company granted in a fiscal year divided by the weighted average common stock outstanding during the year. The following table sets forth information to calculate the Company's burn rate for the last three fiscal years:

Fiscal Year
  Stock Options
Granted(1)

  RSUs
Granted(2)

  PEPs
Granted(3)

  Total Granted
  Weighted
Average
Common Shares
Outstanding

  Burn Rate

2017

  0   1,391,725   828,482   2,220,207   155,728,323   1.43%

2018

  0   1,459,302   800,519   2,259,821   159,101,110   1.42%

2019

  0   1,166,387   995,998   2,162,385   157,043,651   1.38%

(1)
The number of stock options cancelled in fiscal year 2019 is 510,856. None were cancelled in fiscal years 2017 and 2018.

(2)
The number of RSUs cancelled in fiscal years 2017, 2018 and 2019 are 342,702, 345,388, and 334,398, respectively.

(3)
The number of PEPs cancelled in fiscal years 2017, 2018 and 2019 are 192,007, 163,416, and 183,758, respectively.

The following table reflects the number of actual shares issued in the last three fiscal years after specified performance targets were achieved for PEP awards:

Fiscal Year PEPs Earned/Issued
  Number of PEPs
Earned/Issued

2017

  852,856

2018

  946,614

2019

  959,722

Promotion of Good Corporate Governance Practices

The Plan provides for the following:

    stock options and stock appreciation rights may not have a term in excess of seven years, may not be repriced or exchanged for cash or a new award without stockholder approval when the exercise price exceeds the fair market value of the underlying share and may not be granted at a discount to the fair market value of our common stock on the grant date;

    annual limit on equity and cash compensation that may be paid or awarded to non-employee directors;

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    if there is a change in control of the Company, outstanding awards cannot immediately vest unless they are not assumed by the buyer and, if the outstanding performance awards are assumed by the buyer, they will continue to be subject to performance conditions or be deemed to have satisfied such performance-based vesting criteria based on the Company's actual performance as of the change in control;

    share design that limits the number of "full-value" restricted stock and restricted stock unit awards, whether time or performance-based, that may be granted under the Plan since these awards are counted against the Plan's share reserve as 2.5 shares for every one share issued in connection with such awards; we maintain this "fungible share design" since "full-value" awards are perceived by institutional investors and proxy advisory firms to have a higher cost compared to other awards like stock options;

    no evergreen provision;

    dividends or dividend equivalents credited/payable in connection with an award that is not yet vested will be subject to the same restrictions and risk of forfeiture as the underlying award and will not be paid until the underlying award vests; and

    the administrator may cancel outstanding awards or, in some cases, "claw back" awards previously realized if certain authorized officers are found to engage in acts of misconduct.

Plan Summary

The following summary of the material terms of the Plan is qualified in its entirety by reference to the complete statement of the Plan, which is set forth in Annex B of this Proxy Statement.

Administration. The Plan will be administered by the Compensation/Organization Committee of the Board, or in the absence of a Compensation/Organization Committee, a properly constituted compensation committee or the Board itself. Subject to the express provisions of the Plan, the administrator is authorized and empowered to do or perform all things that it determines to be necessary or appropriate in connection with the administration of the Plan. The Compensation/Organization Committee may, by resolution, authorize one or more officers of the Company to perform any or all things that it is authorized and empowered to do or perform under the Plan, provided that such resolution will specify the total number of awards (if any) such officer or officers may award pursuant to such delegated authority. No such officer will designate himself or herself as a recipient of any awards granted under authority delegated to such officer. In addition, the Compensation/Organization Committee may delegate any or all aspects of the day-to-day administration of the Plan to one or more officers or employees of the Company or any subsidiary, and/or to one or more agents.

Participants. Any person who is a current or prospective officer or employee (including any director who is also an employee, in his or her capacity as such) of the Company or of any subsidiary will be eligible for selection by the administrator for the grant of awards under the Plan. In addition, non-employee directors (subject to the limitations on the value of awards that can be granted to any non-employee director annually as specified in the Plan and discussed below) and any service providers who have been retained to provide consulting, advisory or other services to the Company or to any subsidiary will be eligible for the grant of awards under the Plan. Options intending to qualify as "incentive stock options" ("ISOs") within the meaning of Section 422 of the Code may only be granted to employees of the Company or any subsidiary. Approximately 1,839 employees and all directors qualify to participate in the Plan as of December 31, 2019.

Performance-Based Awards. The administrator may establish performance criteria and level of achievement versus such criteria that will determine the number of shares, units or cash to be granted, retained, vested, issued or issuable under or in settlement of or the amount payable pursuant to an award. The administrator may establish criteria applicable to an award based upon one or more of the following performance criteria, or derivations of such performance criteria, either individually, alternatively or in any combination, applied to either the company as a whole or to a business unit or subsidiary, either individually, alternatively or in any combination and measured either annually or cumulatively over a period of years, on an absolute basis or relative to a pre-established target, to previous years' results or to a designated comparison group, either based upon United States Generally Accepted Principles ("GAAP") or non-GAAP financial results, in each case as

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specified by the administrator: (i) cash flow (before or after dividends), (ii) free cash flow or free cash flow per share, (iii) earnings or earnings per share (including earnings before interest, taxes, depreciation and amortization), (iv) stock price, (v) return on equity, (vi) total stockholder return, (vii) return on capital or investment (including return on total capital, return on invested capital or return on investment), (viii) return on assets or net assets, (ix) market capitalization, (x) economic value added, (xi) debt leverage (debt to capital), (xii) revenue, (xiii) income or net income, (xiv) operating income, (xv) operating profit or net operating profit, (xvi) operating margin or profit margin, (xvii) return on operating revenue, (xviii) cash from operations, (xix) operating ratio, (xx) operating revenue, (xxi) net service revenue and/or total backlog, (xxii) days sales outstanding, (xxiii) health and safety or (xxiv) customer service.

Shares Subject to the Plan and to Awards. The aggregate number of shares issuable under the Plan will not exceed 12,000,000, reduced by one share for every one share issued pursuant to an option or stock appreciation right granted under any Prior Plan (as defined in the Plan) from and after January 1, 2020 and prior to the effective date of the Plan and by 2.5 shares for every one share issued pursuant to an award other than an option or stock appreciation right granted from and after January 1, 2020 and prior to the effective date of the Plan under any Prior Plan. Any shares issued under options or stock appreciation rights will be counted against the number of shares issuable under the Plan on a one-for-one (1:1) basis and any shares issued pursuant to awards other than options or stock appreciation rights will be counted against this limit as 2.5 shares for every one (1) share subject to such award. Shares subject to outstanding awards under the Prior Plans as of the effective date of the Plan (such awards the "Prior Plan Awards"), that, from and after the effective date of the Plan, are canceled, expired, forfeited or otherwise not issued pursuant to such Prior Plan Award (including as a result of being withheld to pay withholding taxes in connection with any such awards (other than options or stock appreciation rights) or such award being settled in cash) will be added to the number of shares issuable under the Plan as one (1) share if such shares were subject to options or stock appreciation rights granted under a Prior Plan, and as 2.5 shares if such shares were subject to awards other than options or stock appreciation rights granted under a Prior Plan. The aggregate number of shares available for grant under the Plan and the number of shares subject to outstanding awards will be subject to adjustment as provided in the Plan. The shares issued pursuant to awards granted under the Plan may be shares that are authorized and unissued or shares that were reacquired by the Company, including shares purchased in the open market.

For purposes of the share limit described above, the aggregate number of shares issued under the Plan at any time will equal only the number of shares actually issued upon exercise or settlement of an award under the Plan. Notwithstanding the foregoing, shares subject to an award under the Plan may not again be made available for issuance under the Plan (and shall not be added to the Plan in respect of awards under a Prior Plan) if such shares are: (i) shares that were subject to a stock-settled stock appreciation right and were not issued upon the net settlement or net exercise of such stock appreciation right, (ii) shares delivered to or withheld by the Company to pay the exercise price of an option, (iii) shares delivered to or withheld by the Company to pay the withholding taxes related an option or a stock appreciation right or (iv) shares repurchased on the open market with the proceeds of an option exercise. Any shares that again become available for grant pursuant to the foregoing will be added back as one (1) share if such shares were subject to options or stock appreciation rights, and as 2.5 shares if such shares were subject to awards other than options or stock appreciation rights. Shares subject to awards that have been canceled, expired, forfeited, delivered to or withheld by the Company to pay the withholding taxes related to an award other than an option or a stock appreciation right or otherwise not issued under an award and shares subject to awards settled in cash will not count as shares issued under the Plan.

Subject to adjustments for changes in capitalization, the aggregate number of shares that may be earned pursuant to awards granted under the Plan during any calendar year to any one participant will not exceed 2,000,000, excluding any tandem stock appreciation rights. Subject to adjustments for changes in capitalization, the aggregate number of shares that may be issued pursuant to the exercise of ISOs granted under the Plan will not exceed 7,000,000. The aggregate dollar value of equity-based (based on the grant date fair value of equity-based awards) and cash compensation granted under the Plan or otherwise during any calendar year to any one non-employee director may not exceed $600,000; provided, however, that in the calendar year in which a non-employee director first joins the Board or is first designated as Chairman of the Board or Lead Director, the maximum aggregate dollar value of equity-based and cash compensation to the participant may be up to 200% of the foregoing limit and the foregoing limit will not count any tandem SARs (as defined below).

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Awards granted or shares issued by the Company in assumption of or in substitution or exchange for awards previously granted or the right or obligation to make future awards, by a company acquired by the Company or any subsidiary or with which the Company or any other subsidiary combines will not reduce the amount of shares authorized for issuance under the Plan or authorized for grant to a participant in any calendar year. Additionally, in the event that a company acquired by the Company or any subsidiary, or with which the Company or any subsidiary combines, has shares available under a pre-existing plan approved by stockholders and not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination) may be used for awards under the Plan and will not reduce the amount of shares authorized for issuance under the Plan; provided that awards using such available shares will not be made after the date awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition or combination, and will only be made to individuals who were employees or directors of such acquired or combined company before such acquisition or combination.

Option Awards. The administrator will establish the exercise price per share under each option, which, other than in the event of substitute awards granted in connection with a merger or other acquisition, will not be less than the fair market value of a share on the date the option is granted. The administrator will establish the term of each option, which in no case may exceed a period of seven (7) years from the date of grant. Options granted under the Plan may either be ISOs or options which are not intended to qualify as ISOs or non-qualified stock options ("NQSOs"). Other than in connection with a change in the Company's capitalization, the Company will not, without stockholder approval, reduce the exercise price of an option and, at any time when the exercise price of an option is above the fair market value of a share, the Company will not, without stockholder approval (except in the case of a change in control), cancel and re-grant or exchange such option for cash or a new award.

Stock Appreciation Rights. A stock appreciation right ("SAR") provides the right to the monetary equivalent of the increase in value of a specified number of shares over a specified period of time after the right is granted. Stock appreciation rights may be granted to participants either in tandem with or as a component of other awards granted under the Plan ("tandem SARs") or not in conjunction with other awards ("freestanding SARs"). All freestanding SARs will be granted subject to the same terms and conditions and limitations applicable to options as set forth above and in the Plan and all tandem SARs will have the same exercise price, vesting, exercisability, forfeiture and termination provisions as the award to which they relate. Other than in connection with a change in the Company's capitalization, the Company will not, without stockholder approval, reduce the exercise price of such stock appreciation right and, at any time when the exercise price of a stock appreciation right is above the fair market value of a share, the Company will not, without stockholder approval (except in the case of a change in control), cancel and re-grant or exchange such stock appreciation right for cash or a new award.

Restricted Stock and Restricted Stock Units. Restricted stock is an award or issuance of shares the grant, issuance, retention, vesting and/or transferability of which is subject during specified periods of time to conditions (including continued employment or performance conditions) and terms as the administrator deems appropriate (subject to the minimum vesting conditions described above). Restricted stock units are awards denominated in units of shares under which the issuance of shares is subject to conditions (including continued employment or performance conditions) and terms as the administrator deems appropriate. Participants holding shares of restricted stock granted under the Plan may exercise full voting rights with respect to those shares during the period of restriction. Participants will have no voting rights with respect to shares underlying restricted stock units unless and until such shares are reflected as issued and outstanding shares on the company's stock ledger. Participants in whose name restricted stock is granted will be entitled to receive all dividends and other distributions paid with respect to those shares, unless determined otherwise by the administrator. Shares underlying restricted stock units will be entitled to dividends or dividend equivalents only to the extent provided by the administrator. Dividends or dividend equivalents credited/payable in connection with an award of restricted stock or restricted stock units that is not yet vested will be subject to the same restrictions and risk of forfeiture as the underlying award and will not be paid until the underlying award vests.

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Incentive Bonuses. The administrator will establish the performance criteria and level of achievement versus these criteria that will determine the target and maximum amount payable under an incentive bonus, which criteria may be based on performance conditions.

Deferral of Gains. The administrator may, in an award agreement or otherwise, provide for the deferred delivery of shares or cash upon settlement, vesting or other events with respect to restricted stock units, or in payment or satisfaction of an incentive bonus.

Amendment and Termination. The Board may amend, alter or discontinue the Plan and the administrator may amend or alter any agreement or other document evidencing an award made under the Plan, except no such amendment may, without the approval of the stockholders of the Company (other than in respect of a change in the Company's capitalization): increase the maximum number of shares for which awards may be granted under the Plan; reduce the price at which options may be granted pursuant to the terms of the Plan; reduce the exercise price of outstanding options or stock appreciation rights and, at any time when the exercise price of an option or stock appreciation right is above the fair market value of a share (except in the case of a change in control), cancel and re-grant or exchange such option or stock appreciation right for cash or a new award; extend the term of the Plan; change the class of persons eligible to be participants; otherwise amend the Plan in any manner requiring stockholder approval by law or under the NYSE's listing requirements; or increase the individual maximum limits set forth in the Plan.

No amendment or alteration to the Plan or an award or award agreement may be made which would impair the rights of the holder of an award, without such holder's consent, provided that no such consent will be required if the administrator determines in its sole discretion and prior to the date of any change in control that such amendment or alteration either is required or advisable in order for the Company, the Plan or the award to satisfy any law or regulation or to meet the requirements of or avoid adverse financial accounting consequences under any accounting standard, or is not reasonably likely to significantly diminish the benefits provided under such award, or that any such diminishment has been adequately compensated.

Adjustments of and Changes in the Stock. The number and kind of shares available for issuance under the Plan (including under any awards then outstanding), and the number and kind of shares subject to the limits set forth in the Plan and above, will be equitably adjusted by the administrator to reflect any reorganization, reclassification, combination of shares, stock split, reverse stock split, spin-off, dividend or distribution of securities, property or cash (other than regular, quarterly cash dividends), or any other event or transaction that affects the number or kind of shares of the Company outstanding.

In the event there shall be any other change in the number or kind of outstanding shares or to any stock or other securities into which such shares shall have been changed or for which it shall have been exchanged, by reason of a change of control, other merger, consolidation or otherwise (a "Transaction"), then the administrator will, in its sole discretion, determine the appropriate and equitable adjustment, if any, to be effected, which adjustments need not be uniform between different awards or different types of awards. Unless otherwise provided in an award agreement, in the event of a Transaction, outstanding awards may be continued or assumed by the continuing or successor organization, or the successor may substitute equivalent awards. With respect to awards subject to performance-based vesting criteria that are continued, assumed or substituted for in accordance with the preceding sentence, such awards will either (a) continue to be subject to such performance-based vesting criteria or (b) be deemed to have satisfied such performance-based vesting criteria based on the actual Company's achievement with respect to such performance-based vesting criteria through the date of the Transaction.

Unless otherwise provided in an award agreement, in the event of a Transaction in which the successor does not continue, assume or substitute for any outstanding awards, all awards that are not assumed, continued or substituted for will be treated as follows effective immediately prior to (and contingent upon) the consummation of the Transaction: (a) in the case of an option or stock appreciation right, the participant will have the ability to exercise such option or stock appreciation right, including any portion of the option or stock appreciation right not previously exercisable, (b) in the case of any award the vesting of which is in whole or in part subject to performance-based vesting criteria, all conditions to the grant, issuance, retention, vesting or transferability of, or any other restrictions applicable to, such award will immediately lapse and such award will immediately vest and the participant will have the right to receive a payment based on the actual Company's achievement with respect to such performance-based vesting criteria through the date of the Transaction and (c) in the case of

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outstanding restricted stock and/or restricted stock units (other than those referenced in clause (b)), all conditions to the grant, issuance, retention, vesting or transferability of, or any other restrictions applicable to, such award will immediately lapse and such awards shall immediately vest.

Transferability. Awards may not be sold, transferred for value, pledged, assigned or otherwise alienated or hypothecated by a participant other than by will or the laws of descent and distribution, and each option or stock appreciation right may be exercisable only by the participant during his or her lifetime. Notwithstanding the foregoing, outstanding options may be exercised following a participant's death by the participant's beneficiaries or as permitted by the administrator, and, to the extent permitted by the administrator, the person to whom an award is initially granted may make certain limited transfers to certain family members, family trusts or family partnerships.

Effective Date and Termination of the Plan. The Board adopted the Plan on November 29, 2019 and the Plan will become effective upon its approval by the Company's stockholders (the "Effective Date"). The Plan will remain available for the grant of awards until the 10th anniversary of the Effective Date; provided, however, that ISOs may not be granted under the Plan after the 10th anniversary of the date of Board approval.

Federal Income Tax Treatment

The following discussion of the federal income tax consequences of the Plan is intended to be a summary of applicable federal law as currently in effect. It should not be taken as tax advice by Plan participants, who are urged to consult their individual tax advisors.

Stock Options. ISOs and NQSOs are treated differently for federal income tax purposes. ISOs are intended to comply with the requirements of Section 422 of the Code. NQSOs do not comply with such requirements.

An optionee is not taxed on the grant or exercise of an ISO. The difference between the exercise price and the fair market value of the shares on the exercise date will, however, be a preference item for purposes of the alternative minimum tax. If an optionee holds the shares acquired upon exercise of an ISO for at least two years following the option grant date and at least one year following exercise, the optionee's gain, if any, upon a subsequent disposition of such shares is long-term capital gain. The measure of the gain is the difference between the proceeds received on disposition and the optionee's basis in the shares (which generally equals the exercise price). If an optionee disposes of stock acquired pursuant to the exercise of an ISO before satisfying these holding periods, the optionee will recognize both ordinary income and capital gain in the year of disposition. The Company is not entitled to an income tax deduction on the grant or exercise of an ISO or on the optionee's disposition of the shares after satisfying the holding period requirement described above. If the holding periods are not satisfied, the Company will be entitled to a deduction in the year the optionee disposes of the shares in an amount equal to the ordinary income recognized by the optionee.

In order for an option to qualify for ISO tax treatment, the grant of the option must satisfy various other conditions more fully described in the Code. The Company does not guarantee that any option will qualify for ISO tax treatment even if the option is intended to qualify for such treatment. In the event an option intended to be an ISO fails to so qualify, it will be taxed as an NQSO as described below.

An optionee is not taxed on the grant of an NQSO. On exercise, the optionee recognizes ordinary income equal to the difference between the exercise price and the fair market value of the shares acquired on the date of exercise. The Company is entitled to an income tax deduction in the year of exercise in the amount recognized by the optionee as ordinary income. The optionee's gain (or loss) on a subsequent disposition of the shares is long-term capital gain (or loss) if the shares are held for at least one year following exercise. The Company does not receive a deduction for this gain.

Stock Appreciation Rights. An optionee is not taxed on the grant of a stock appreciation right. On exercise, the optionee recognizes ordinary income equal to the cash or the fair market value of any shares received. The Company is entitled to an income tax deduction in the year of exercise in the amount recognized by the optionee as ordinary income.

Restricted Stock and Restricted Stock Units. Grantees of restricted stock or restricted stock units do not recognize income at the time of the grant. When the award vests or is paid, grantees generally recognize

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ordinary income in an amount equal to the fair market value of the stock or units at such time, and the Company will receive a corresponding deduction. However, no later than 30 days after a participant receives an award of restricted stock, such participant may elect to recognize taxable ordinary income in an amount equal to the fair market value of the shares at the time of receipt. Provided that the election is made in a timely manner, when the restrictions on the shares lapse, the participant will not recognize any additional income. If the participant forfeits the shares to the Company (e.g., upon the participant's termination prior to vesting), the participant may not claim a deduction with respect to the income recognized as a result of the election. Dividends paid with respect to unvested shares of restricted stock generally will be taxable as ordinary income to the participant at the time the dividends are received.

Incentive Bonuses. A participant will have taxable income at the time an incentive bonus award becomes payable and, if the participant has timely elected deferral to a later date, at such later date. At these times, the participant will recognize ordinary income equal to the value of the amount then payable.

New Plan Benefits

The benefits that will be awarded or paid in the future under the Plan are not currently determinable. Such awards are within the discretion of the Compensation/Organization Committee and the Compensation/Organization Committee has not determined future awards nor who might receive them. Information about awards granted in fiscal year 2019 to the Company's NEOs can be found in the table under the heading "Grants of Plan-Based Awards" below.

Vote Required and Recommendation of the Board of Directors

The 2020 Stock Incentive Plan must be approved, in accordance with the listing requirements of the New York Stock Exchange ("NYSE"), by the affirmative vote of a majority of the votes cast on the proposal at the 2020 Meeting. Abstentions will have the effect of a vote against the proposal, whereas broker non-votes will not count as votes cast for this purpose and will therefore have no effect on the outcome of the proposal.

The Board of Directors recommends that you vote FOR the 2020 Stock Incentive Plan.

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Equity Compensation Plans

The following table presents certain information about shares of AECOM common stock that may be issued under our equity compensation plans as of September 30, 2019:

 
  Column A   Column B   Column C  
Plan Category
  Number of
securities to
be issued
upon
exercise of
outstanding
options,
warrants and
rights(1)
  Weighted-
average
exercise price
of outstanding
options,
warrants
and rights
  Number of
securities
remaining
available
for future
issuance
under equity
compensation
plans
(excluding
securities
reflected in
Column A)
 

Equity compensation plans not approved by stockholders

  N/A   N/A   N/A  

Equity compensation plans approved by stockholders

                   

AECOM Stock Incentive Plans

  5,711,366 (1) $ 31.62 (2) 11,573,972  

AECOM Employee Stock Purchase Plan(3)

    N/A     N/A     10,765,123  

Total

  5,711,366   $ 31.62   22,339,095  

(1)
Includes 127,714 shares issuable upon the exercise of stock options, 3,318,009 shares issuable upon the vesting of Restricted Stock Units and 2,265,643 shares issuable if specified performance targets are met under Performance Earnings Program Awards(PEP).

(2)
Weighted-average exercise price of outstanding options only.

(3)
Amounts only reflected in column (c) and include all shares available for future issuance and subject to outstanding rights.

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PROPOSAL 4
ADVISORY RESOLUTION TO APPROVE EXECUTIVE COMPENSATION

In accordance with Section 14A of the Exchange Act, we are asking our stockholders to approve, on an advisory basis, AECOM's executive compensation as reported in this Proxy Statement.

At AECOM, executive compensation plans are driven by both short- and long-term financial performance metrics that are designed to incentivize our NEOs to maximize long-term stockholder value creation. As such, based on direct stockholder feedback, AECOM's executives are incentivized via an annual cash bonus plan and the grant of certain long-term equity awards that include the following performance metrics: adjusted earnings per share, free and operating cash flow per share and return on invested capital.

We urge stockholders to read the "COMPENSATION DISCUSSION AND ANALYSIS" section in this Proxy Statement, which describes in more detail how our executive compensation policies and procedures operate and are designed to achieve our compensation objectives, as well as the "SUMMARY COMPENSATION TABLE" and related compensation tables and narrative, which provide detailed information on the compensation of our NEOs. The Compensation Committee and the Board believe that the policies, procedures and programs articulated in the "COMPENSATION DISCUSSION AND ANALYSIS" are effective in achieving our goals and that the compensation of our NEOs reported in this Proxy Statement has supported and contributed to the Company's success.

We are asking stockholders to approve the following advisory resolution at the 2020 Annual Meeting:

    RESOLVED, that the stockholders of AECOM (the "Company") approve, on an advisory basis, the compensation of the Company's Named Executive Officers set forth in the Compensation Discussion and Analysis, the Summary Compensation Table and the related compensation tables and narrative in the Proxy Statement for the Company's 2020 Annual Meeting of Stockholders.

This advisory resolution, commonly referred to as a "Say-on-Pay" resolution, is non-binding on the Company, the Board and the Compensation Committee and will not be construed as overruling a decision by, nor creating nor implying any additional fiduciary duty for the Company, the Board or the Compensation Committee. However, the Board and the Compensation Committee will review and consider the voting results on this proposal when evaluating our executive compensation program. The Board has adopted a policy of providing for annual "Say-on-Pay" advisory votes. Unless the Board modifies its policy on the frequency of holding "Say-on-Pay" advisory votes, the next "Say-on-Pay" advisory vote will occur in 2021.

Vote Required and Recommendation of the Board of Directors

The affirmative vote of a majority of the shares present in person or represented by proxy and entitled to vote on the advisory resolution on the Company's executive compensation at the 2020 Annual Meeting is required to approve the advisory resolution on the Company's executive compensation. Abstentions will be counted as present and will have the effect of a vote against the proposal. Broker non-votes will not be counted as participating in the voting on the proposal and will therefore have no effect on the outcome of the vote on the proposal.

The Board of Directors recommends that you vote FOR the advisory resolution to approve executive compensation.

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PROPOSAL 5
S
TOCKHOLDER PROPOSAL

Mr. John Chevedden, 2215 Nelson Avenue No. 205 Redondo Beach, Calif. 90278, the beneficial owner of shares of the Company's common stock with a market value of more than $2,000, has requested that we include the following stockholder proposal and supporting statement in our proxy statement for the 2020 Annual Meeting. The stockholder proposal is required to be voted on at our Annual Meeting only if properly presented at the meeting. The Board of Directors recommends a vote AGAINST this proposal for the reasons stated in the Statement in Opposition to the Stockholder Proposal, which follows the proposal:


Proposal 5 — Shareholder Right to Act by Written Consent

Shareholders request that our board of directors undertake such steps as may be necessary to permit written consent by shareholders entitled to cast the minimum number of votes that would be necessary to authorize the action at a meeting at which all shareholders entitled to vote thereon were present and voting. This written consent is to be consistent with giving shareholders the fullest power to act by written consent consistent with applicable law. This includes shareholder ability to initiate any appropriate topic for written consent.

Taking action by written consent in place of a special meeting is a means shareholders can use to raise important matters outside the normal annual meeting cycle and avoid the cost of a special meeting.

This proposal topic won majority shareholder support at 13 major companies in a single year. This included 67%-support at both Allstate and Sprint. Hundreds of major companies enable shareholder action by written consent. This proposal topic might have received a still higher vote than 67% at Allstate and Sprint if small shareholders had the same access to independent corporate governance data as large shareholders. This same proposal won majority support in 2019 at United Rentals, Inc. (URI).

This proposal is of greater need at AECOM because AECOM executive pay was rejected by shareholders at the 2018 annual meeting. CEO pay of $18 million also eked out a dismal level of support at the 2019 annual meeting. Some shareholders may determine that James Fordyce, Chairman of the Executive Pay Committee, was responsible for the excessive executive pay practices and would thus be interested in electing a director to replace Mr. Fordyce.

Also the current 25% stock ownership threshold for AECOM shareholders to call a special meeting may be unreachable due to time constraints and the bureaucratic requirements that can trip up half of shareholders who want a special shareholder meeting. Thus the 25% stock ownership threshold to call a special meeting can be a 50% stock ownership threshold to call a special meeting for all practical purposes.

It is possible is that shareholders will not need to make use of this written consent because its mere existence will be an incentive factor that will help ensue that the company is well supervised by the Board of Directors and management.

Please vote yes:


Shareholder Right to Act by Written Consent — Proposal 5

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PROPOSAL 5
B
OARD OF DIRECTORS' STATEMENT IN OPPOSITION TO THE STOCKHOLDER PROPOSAL

Our Board recommends a vote AGAINST this proposal.

The Board believes that stockholder action by written consent is not necessary given our current governance practices and structures, including our stockholders' existing ability to call a special meeting and our strong stockholder engagement practices.

Our Company has a track record of strong corporate governance.

The Company is committed to sound corporate governance and has implemented numerous corporate governance policies and practices that ensure accountability and access to the Board. For example:

    Stockholders have a right to call a special meeting;

    Stockholders have proxy access rights;

    All supermajority provisions in our bylaws have been eliminated;

    We have an annually elected board;

    We have a majority voting standard for uncontested director elections;

    We have a lead independent director;

    Upon appointment of a new CEO, we will separate the Chairman and CEO roles;

    We have a compensation clawback policy; and

    We do not have a poison pill.

The Company continually evaluates stockholder feedback and developments in corporate governance, and we implement appropriate changes to our corporate governance policies and practices when they are in the best interests of the Company and our stockholders.

Action by written consent is unnecessary because our stockholders already have the right to act outside of the annual meeting cycle.

The Company has taken a number of steps to enhance stockholder rights and provide stockholders with the ability to raise important matters outside of the annual meeting cycle. In particular, the Company's bylaws provide stockholders holding 25% or more of the Company's shares with the right to call a special meeting. The Company believes this is the most common threshold for special meeting rights at public companies and is appropriate especially since the Company has four institutional investors that own over five percent and two institutional investors that own over ten percent of the Company's outstanding common stock. The Board believes that our 25% threshold to call a special meeting is aligned with our stockholders' interests because it is designed to strike the proper balance between enhancing stockholder rights and protecting against the risk that a small minority of stockholders, including those with special interests, could trigger the expense and distraction of a special meeting to pursue matters that are not in the best interests of all of our stockholders.

A special meeting provides a deliberative forum for resolution of corporate matters and is therefore a more appropriate method for stockholder action between annual meetings.

The Board believes that a special meeting does far more to support stockholders' interests than action by written consent, because a special meeting ensures that all stockholders receive notice, adequate time to

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review proposals and a forum for expressing their views. By contrast, stockholder action by written consent may not result in all stockholders receiving notice of a proposed action and does not permit a variety of views on a proposal to be exchanged. This means that action by written consent could deprive many stockholders of the critical opportunity to assess, discuss, deliberate and vote on pending matters that may have important ramifications for both the Company and our stockholders. In addition to disenfranchising stockholders, action by written consent can create substantial confusion and disruption, as stockholder groups may solicit multiple written consents simultaneously, some of which may be duplicative or contradictory. This level of confusion can impose significant administrative and financial burdens on the Company, while providing little or no corresponding benefit to stockholders.

In short, the Board believes that matters of sufficient importance to warrant action between annual stockholder meetings should not be decided without notification to all stockholders, an opportunity for all stockholders to be heard and a vote at a duly convened meeting.

An action by written consent could disenfranchise stockholders.

The written consent proposal would enable a limited group of large stockholders to act in favor of their own proposed actions at any time and as frequently as they chose, without a meeting and without providing notice to other stockholders. The lack of procedural safeguards in the written consent process could lead to inappropriate influence by stockholders with special interest that may be inconsistent with the Company's long-term interest.

Vote Required and Recommendation of the Board of Directors

The affirmative vote of a majority of the shares present in person or represented by proxy and entitled to vote at the 2020 Annual Meeting is required to approve the stockholder proposal. Abstentions will be counted as present and will have the effect of a vote against the proposal. Broker non-votes will not be counted as participating in the voting on the proposal and will therefore have no effect on the outcome of the vote on the proposal.

The Board of Directors recommends that you vote AGAINST the stockholder proposal.

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CORPORATE GOVERNANCE

Board Meetings

During our fiscal year ended September 30, 2019, our Board met six times, the Audit Committee met five times, the Compensation Committee met two times, the Nominating Committee met two times and the Strategy, Risk and Safety Committee met four times. Each incumbent director attended at least 75% of the aggregate of (1) the total number of meetings of our Board and (2) the total number of meetings held by all committees of the Board on which he or she served during fiscal year 2019.

Director Independence

Nine of the 10 director nominees are independent directors as defined in accordance with the listing standards of the NYSE. These standards provide that a director is independent only if our Board affirmatively determines that the director has no direct or indirect material relationship with the Company. They also specify various relationships that preclude a determination of director independence. Material relationships may include commercial, industrial, consulting, legal, accounting, charitable, family and other business, professional and personal relationships.

Applying these standards, our Board, upon the recommendation of our Nominating Committee, annually reviews the independence of our directors. In its most recent review, our Board considered, among other things, the employment relationships between the Company and our directors and their families; the other specific relationships that would preclude a determination of independence under the NYSE independence rules; any affiliation of the Company's directors and their families with the Company's independent registered public accounting firm, compensation consultants, legal counsel and other consultants and advisors; any transactions with directors and members of their families that would require disclosure in this Proxy Statement under U.S. Securities and Exchange Commission ("SEC") rules regarding related person transactions; and the modest amount of our contributions to non-profit organizations of which some of our directors or members of their families are associated.

The Board determined that the following director nominees are independent as determined by the standards of the NYSE: Robert G. Card, Peter A. Feld, Senator William H. Frist, Jacqueline C. Hinman, Steven A. Kandarian, Dr. Robert J. Routs, Clarence T. Schmitz, Douglas W. Stotlar, and General Janet C. Wolfenbarger.

Starboard Value LP Agreement

On November 22, 2019, the Company entered into an agreement (the "Starboard Agreement") with Starboard Value LP and certain of its affiliates (collectively, "Starboard") pursuant to which the Company increased the size of our Board to 11 directors and appointed Peter A. Feld, Robert G. Card and Jacqueline C. Hinman (collectively with Mr. Feld and Mr. Card, the "New Directors") to the Board.

The Starboard Agreement also provides that the Company will nominate the following individuals for election to our Board at the 2020 Annual Meeting: (x) each of the New Directors, (y) six of the following seven individuals: Senator William H. Frist, Steven A. Kandarian, Robert J. Routs, Clarence T. Schmitz, Douglas W. Stotlar, Daniel R. Tishman. and Gen. Janet C. Wolfenbarger USAF Ret., and (z) if the successor to Michael S. Burke as Chief Executive Officer has been appointed as of the time of the filing of this Proxy Statement, such individual (or, if a successor has not yet been appointed prior to the filing of this Proxy Statement, then all seven of the current directors listed in (y) above may be nominated subject to certain conditions). The size of the Board will be automatically decreased to 10 directors at the conclusion of the 2020 Annual Meeting.

Pursuant to the Starboard Agreement, Starboard will vote at the 2020 Annual Meeting in favor of the Company's director nominees and, subject to certain conditions, in accordance with our Board's recommendation on all other proposals. Starboard also agreed, among other things, not to submit director nominations or proposals at any annual or special meeting during the Standstill Period (as defined below).

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Starboard has also agreed to certain customary standstill provisions, effective as of the date of the Starboard Agreement through the earlier of (1) fifteen business days prior to the deadline for the submission of stockholder nominations for the Company's 2021 annual meeting of stockholders and (2) 90 days prior to the first anniversary of the 2020 Annual Meeting (the "Standstill Period"), prohibiting Starboard from, among other things, (a) engaging or participating in any solicitation of proxies with respect to the Company's securities, (b) joining in any "group" or voting arrangement, (c) proposing certain extraordinary transactions or encouraging third parties to do so, (d) calling or seeking to call a special meeting of the Company's stockholders, (e) seeking Board representation other than as provided in the Starboard Agreement and (f) influencing third parties with respect to the voting or disposition of the Company's securities.

Board Leadership Structure

Michael S. Burke currently holds the roles of Chairman of the Board and Chief Executive Officer. The Company has announced that the roles of Chairman and Chief Executive Officer will be separated effective upon the appointment of a new Chief Executive Officer. In addition, on November 22, 2019, Steven A. Kandarian was appointed as the lead independent director. Mr. Kandarian brings considerable financial expertise from his past business experience as well as essential corporate governance experience from his current and prior service on private and public company boards.

The Board has been, and continues to be, a proponent of Board independence. The Company's corporate governance structures and practices provide for a strong, independent Board and include several independent oversight mechanisms, including a lead independent director, only independent directors serving as committee chairs and the directors' and committees' ability to engage independent consultants and advisors. The Audit, Compensation and Nominating Committees are composed entirely of independent directors. The Nominating Committee is responsible for recommending the appointment of a lead independent director, which is appointed by the Board.

Executive Sessions

Executive sessions of non-employee directors are included on the agenda for every regularly scheduled Board meeting and, during fiscal year 2019, executive sessions were held at each regularly scheduled Board meeting. Executive sessions are chaired by the lead independent director.

Board's Role in Risk Oversight

The Board plays an active role, both as a whole and at the committee level, in overseeing management of the Company's risks. Management is responsible for the Company's day-to-day risk-management activities. The Company relies on a comprehensive risk management process to aggregate, monitor, measure and manage risks. The risk management process is designed to enable the Board to establish a mutual understanding with management of the effectiveness of the Company's risk management practices and capabilities, to review the Company's risk exposure and to elevate certain key risks for discussion at the Board level. The full Board monitors risk through regular reports from each of the committee chairs and is apprised of particular risk

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management matters in connection with its general oversight and approval of corporate matters, as disclosed in the below chart:

GRAPHIC

We believe the division of risk management responsibilities described above provides an effective framework for evaluating and addressing the risks facing the Company, and that our Board leadership structure supports this approach because it allows our independent directors, through the independent committee chairs, to exercise effective oversight of the actions of management. The Strategy, Risk and Safety Committee, as well as other members of the Board, receive updates from the Company's Chief Information Security Officer on the overall cybersecurity risk environment including the Company's enterprise-wide cybersecurity risk assessment results and key initiatives.

Risk Assessment of Compensation Policies and Practices

In fiscal year 2019, the Compensation Committee's independent consultant, Exequity LLP, conducted a risk assessment of the Company's compensation policies and practices as they apply to all employees, including executive officers. Exequity LLP reviewed the design features and performance metrics of our cash and stock-based incentive programs, along with the approval mechanisms associated with each, to determine whether any of these policies and practices could create risks that are reasonably likely to have a material adverse effect on the Company.

As part of the review, several factors were noted that reduce the likelihood of excessive risk-taking:

    Our compensation mix is balanced among fixed components such as salary and benefits, annual incentive payments and long-term incentives, including PEP awards and restricted stock units granted under our Amended and Restated 2016 Stock Incentive Plan, which typically vest or are earned over three years.

    The Compensation Committee has ultimate authority to determine, and reduce, if appropriate and consistent with applicable arrangements, compensation provided to our executive officers, including each of the NEOs.

    The Compensation Committee, under its charter, has the authority to retain any advisor it deems necessary to fulfill its obligations and has engaged Exequity LLP as its independent consultant. Exequity performs services for the Compensation Committee as described in the "COMPENSATION DISCUSSION AND ANALYSIS" section of this Proxy Statement.

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    Our annual incentive programs for employees are funded in the aggregate based on the results of key financial metrics. Individual payouts are based on a combination of financial metrics as well as qualitative factors.

    Our long-term equity incentive awards, including PEP awards and restricted stock units granted under our stockholder approved Amended and Restated 2016 Stock Incentive Plan, are all approved by either the Compensation Committee for our executive officers or by our Chief Executive Officer for non-executive officers.

    Our NEOs are subject to stock ownership guidelines, our insider trading policy and our clawback policy.

Based on this assessment, the Company concluded that its compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on the Company.

Committees of the Board of Directors

The Board has four standing committees: the Audit Committee, the Compensation Committee, the Nominating Committee and the Strategy, Risk and Safety Committee. In accordance with NYSE regulations, each member of the Audit Committee, the Compensation Committee, and the Nominating Committee has been determined by our Board to be "independent." The committees operate under written charters that are available for viewing on the "Corporate Governance" area of the "Investors" section of our website at www.aecom.com. In 2019, the Board also established a non-standing CEO Search Committee for the sole purpose of recommending a new CEO.

The members of each of the standing committees are as follows:

Audit Committee

Clarence T. Schmitz, Chair
Robert G. Card
Senator William H. Frist
Steven A. Kandarian
Douglas W. Stotlar

Compensation/Organization Committee

Steven A. Kandarian, Chair
Peter A. Feld
Dr. Robert J. Routs
Clarence T. Schmitz

Nominating/Governance Committee

Douglas W. Stotlar, Chair
Peter A. Feld
Senator William H. Frist
General Janet C. Wolfenbarger, USAF Retired

Strategy, Risk and Safety Committee

Dr. Robert J. Routs, Chair
Jacqueline C. Hinman
Daniel R. Tishman
General Janet C. Wolfenbarger, USAF Retired

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Audit Committee.    The Audit Committee, which is composed solely of independent directors as defined under Rule 10A-3(b)(1) of the rules of the U.S. Securities and Exchange Commission and the regulations of the NYSE, appoints the Company's independent auditors, reviews the results and scope of the audit of our financial statements as well as other services provided by our independent auditors, reviews and approves audit fees and all non-audit services as well as reviews and evaluates our audit and control functions, including our internal audit function. Our Audit Committee held five meetings during fiscal year 2019. Our Board has determined that Mr. Schmitz, Chair of the Audit Committee qualifies as an "audit committee financial expert" as defined by the rules under the Exchange Act. The "REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS" is included in this Proxy Statement.

Compensation/Organization Committee.    The Compensation Committee, which is composed solely of independent directors as defined under the regulations of the NYSE, non-employee directors, as defined under Rule 16b-3 of the Exchange Act, and outside directors for purposes of grandfathering provisions under Section 162(m) of the Code, oversees our compensation plans. Such oversight includes decisions regarding executive management salaries, incentive compensation and long-term compensation plans, as well as Company-wide equity plans for our employees. This committee also reviews the Board's compensation plan for non-employee directors, determines whether independent compensation consultants should be utilized and oversees management succession planning. For further information regarding the Compensation Committee's processes and procedures for determining executive and non-employee director compensation, see the "COMPENSATION DISCUSSION AND ANALYSIS" section of this Proxy Statement. Our Compensation Committee held two meetings during fiscal year 2019. The "REPORT OF THE COMPENSATION/ORGANIZATION COMMITTEE OF THE BOARD OF DIRECTORS" is included in this Proxy Statement.

Nominating/Governance Committee.    The Nominating Committee is composed solely of independent directors as defined under the regulations of the NYSE and is responsible for recruiting and retaining qualified persons to serve on our Board, including recommending such individuals to the Board for nomination for election as directors; for evaluating director independence; and for oversight of our ethics and compliance activities. The Nominating Committee also considers written suggestions from stockholders, including potential nominees for election, and oversees other governance programs such as the Company's Corporate Governance Guidelines. This committee also conducts performance evaluations for directors being elected at each annual meeting of stockholders, and engages in succession planning for the Board and key leadership roles on the Board and its committees. Our Nominating Committee held two meetings during fiscal year 2019.

Strategy, Risk and Safety Committee.    The Strategy, Risk and Safety Committee reviews our corporate finance programs, proposed investments and acquisitions, our strategic plans, strategic initiatives, and the Company's overall policies regarding risk assessment, risk management, safety and cybersecurity programs. Our Strategy, Risk and Safety Committee held four meetings during fiscal year 2019.

Corporate Governance Guidelines

Our Board has adopted the Corporate Governance Guidelines, which set forth several important principles regarding our Board and its committees, including Board of Director membership criteria as well as other matters. Our Corporate Governance Guidelines are available for viewing on the "Corporate Governance" area of the "Investors" section of our website at www.aecom.com.

Codes of Conduct and Ethics

We have adopted a Code of Conduct that describes the professional, legal, ethical, financial and social responsibilities of all of our directors, officers and employees. We require all of our directors, officers and employees to read and acknowledge the Code of Conduct, and we provide regular compliance training to all our directors, officers and employees. Our directors, officers and employees are also encouraged to report suspected violations of the Code of Conduct through various means, including a toll-free hotline available 24 hour, 7 days a week in multiple languages, and they may do so anonymously. We also obtain year end affirmations from management personnel confirming compliance with the Code of Conduct. If we make substantive amendments to the Code of Conduct or grant any waiver, including any implicit waiver, to our principal executive, financial or accounting officer or persons performing similar functions or any director, we will

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disclose the nature of such amendment or waiver in a press release, on our website and/or in a report on Form 8-K in accordance with applicable rules and regulations. In addition, we have a separate Code of Ethics for Senior Financial Officers that imposes specific standards of conduct on employees with financial reporting responsibilities. We also have an Anticorruption Policy that provides specific guidance to help ensure that lawful and ethical business practices are followed while conducting international business activities. Our various policies are available for viewing on the "Ethics and Compliance" section of our website at www.aecom.com and in print to any stockholder that requests it. Any such request should be addressed to AECOM, 1999 Avenue of the Stars, Suite 2600, Los Angeles, California 90067, Attention: Corporate Secretary.

Communications with the Board of Directors

Our stockholders or other interested parties may communicate with our Board, a committee of our Board or one or more directors by sending a letter addressed to the Board, a committee of our Board or one or more directors to AECOM, 1999 Avenue of the Stars, Suite 2600, Los Angeles, California 90067, Attention: Corporate Secretary. All communications will be compiled by our Corporate Secretary and forwarded to the Board, the committee or the director, as appropriate.

Director Nominations, Board Refresh and Succession Planning

The Nominating Committee is charged with identifying, reviewing and recommending to the Board qualified individuals to become directors and regularly assessing the size and composition of the Board and recommending any changes to the Board. The Nominating Committee also engages in succession planning for the Board and key leadership roles on the Board and its committees.

The Nominating Committee reviews the appropriate skills and characteristics required of Board members in the context of the current composition of the Board, the operating requirements of the Company and the long-term interests of the Company's stockholders. In conducting this assessment, the Nominating Committee considers diversity, skills and such other factors as it deems appropriate to maintain a balance of knowledge, experience and capabilities. This periodic assessment enables the Board to update the skills and experience it seeks in the Board, as a whole and in individual directors, as the Company's needs evolve over time and to assess the effectiveness of efforts at pursuing diversity. From time to time, while identifying director candidates, the Nominating Committee may establish specific skills and experience that it believes the Company should seek to constitute a balanced and effective Board.

GRAPHIC

It is our belief that members of the Board should have the highest professional and personal ethics and values. We believe that the Board should be comprised of individuals who are committed to enhancing stockholder value with sufficient time to effectively carry out their duties. While all directors should possess business acumen, the Board endeavors to include an array of targeted skills and experience in its overall composition. Criteria that the Nominating Committee looks for in director candidates include business experience and skills, judgment, integrity, an understanding of such areas as finance, marketing, regulation, end markets and public policy and the absence of potential conflicts with the Company's interests. In particular, the Nominating Committee seeks candidates that have the following key skills and experience, each of which it is views as particularly important:

    senior leadership experience,

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    industry experience,

    public company experience,

    financial expertise,

    government/regulatory expertise, and

    international expertise.

The Nominating Committee believes that it is essential that Board members represent diverse viewpoints and backgrounds.

Our Nominating Committee will consider stockholder nominations for directors. The Nominating Committee evaluates any such nominees that are properly submitted using the same criteria it otherwise employs, as described in our Corporate Governance Guidelines. Any recommendation submitted by a stockholder must include the same information concerning the potential candidate as is required when a stockholder wishes to nominate a candidate directly. In addition, any such recommendation must be received in the same time frame as is required by our Bylaws when a stockholder wishes to nominate a candidate directly. To be timely, the notice must be received by the close of business no fewer than 90 and no more than 120 days prior to the date of the first anniversary of the preceding year's annual meeting of stockholders. However, in the event that the date of the annual meeting is advanced more than 30 days prior to such anniversary date or delayed more than 30 days after such anniversary date, or no annual meeting was held in the preceding year, notice by the stockholder to be timely must be received no more than 120 days prior to the date of the annual meeting and not less than the later of the close of business (a) 90 days prior to the date of the annual meeting and (b) on the 10th day following the day on which public announcement of the date of such meeting was first made by the Company.

To be in proper form, the notice must, as to each person whom the stockholder proposes to nominate for election or re-election as a director, set forth all information concerning such person as would be required in a proxy statement soliciting proxies for the election of directors in a contested election pursuant to Section 14 of the Exchange Act and all written and signed representations and all completed and signed questionnaires required pursuant to our Bylaws. In addition, as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination is being made, the notice must also state the name and address, as they appear on the Company's books, of such stockholder and such beneficial owner and the class or series and number of shares of the Company that are owned of record and beneficially by such stockholder and such beneficial owner.

As to the stockholder giving the notice, or if the notice is on behalf of a beneficial owner on whose behalf the nomination is being made, as to such beneficial owner, and if such beneficial owner is an entity, as to each control person of such entity, the notice must state the class or series and number of shares of the Company that are owned of record and beneficially by such stockholder or beneficial owner and by any control person, a description of any agreement, arrangement or understanding with respect to the nomination between such stockholder or beneficial owner and any other person and by any control person, including, without limitation, any agreements that would be required to be disclosed pursuant to Item 5 or Item 6 of Schedule 13D (regardless of whether the requirement to file a Schedule 13D is applicable) of the Exchange Act, and a description of any agreement, arrangement or understanding (including, without limitation, any derivative or short positions, profit interests, options, hedging transactions, and borrowed or loaned shares) that has been entered into as of the date of the stockholder's notice by, or on behalf of, such stockholder, beneficial owner or control person, the effect or intent of which is to mitigate loss, manage risk or benefit from changes in the share price of any class or series of the Company's capital stock, or maintain, increase or decrease the voting power of the stockholder, beneficial owner or control person with respect to shares of stock of the Company. Stockholders who wish to nominate candidates for director must do so pursuant to these procedures.

Board Self-Assessment

The Nominating Committee facilitates an annual assessment of the performance of the Board and its committees and coordinates reports of the annual results to the full Board for discussions. The Nominating Committee also recommends changes to improve the Board and its committees. In 2018, the Nominating

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Committee engaged an outside law firm to conduct confidential interviews with each director to obtain input on the performance of the Board, its committees and each director individually.

GRAPHIC

Director Attendance at Annual Meetings

AECOM's policy is for directors to attend our annual meetings of stockholders unless there are extenuating circumstances. All of the members of our Board of Directors attended the 2019 Annual Meeting.

Director Compensation

Information regarding the compensation of our non-employee directors is discussed below in "DIRECTORS' COMPENSATION FOR FISCAL YEAR 2019."

Director Retirement Policy

Our Corporate Governance Guidelines provide that unless otherwise recommended by the Nominating Committee and approved by the Board, directors are expected to retire from the Board at the end of the term of service during which they turn 75 years of age.

Related Party Transaction Policy

We have adopted a written related party transaction policy, which covers transactions in excess of $100,000 between the Company and our directors, executive officers, 5% or greater stockholders and parties related to the foregoing, such as immediate family members and entities they control. The policy requires that any such transaction be considered and approved by our Audit Committee. In reviewing such transactions, the policy requires the Audit Committee to consider all of the relevant facts and circumstances available to the Audit Committee, including (if applicable) but not limited to the benefits to the Company, the availability of other

sources for comparable products or services, the terms of the transaction and the terms available to unrelated third parties or employees generally.

Under the policy, if we should discover related party transactions that have not been approved, the Audit Committee will be notified and will determine the appropriate action, including ratification, rescission or amendment of the transaction.

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Certain Relationships and Related Transactions

Mr. Tishman, a member of our Board, owns a substantial equity interest in, and has certain management rights with respect to an unaffiliated company which is party to a Shared Services Agreement (the "Services Agreement"), dated July 14, 2010, with our wholly owned subsidiary. Pursuant to the Services Agreement, the parties provide certain support services in exchange for fees based on an annual budget. In fiscal year 2019, the unaffiliated company associated with Mr. Tishman paid approximately $3,271 in fees from our wholly owned subsidiary pursuant to the Services Agreement.

The unaffiliated company associated with Mr. Tishman and our wholly owned subsidiary are also parties to an Occupancy Agreement (the "Occupancy Agreement"), dated July 14, 2010, pursuant to which the unaffiliated company associated with Mr. Tishman pays our wholly owned subsidiary a portion of the rent for office space in New York City in exchange for the right to use and occupy a portion of such space. In fiscal year 2019, our wholly owned subsidiary received approximately $1,682,272 in rent from the unaffiliated company associated with Mr. Tishman per the Occupancy Agreement.

Mr. Tishman has an agreement with AECOM for reimbursement of private air travel for AECOM-related business travel to a company owned by Mr. Tishman. In fiscal year 2019, this amount was $141,037. In addition, Mr. Tishman is an indirect owner of an unaffiliated real estate development project company that engaged an AECOM affiliate to perform pre-construction and construction management services totaling $2,530,937 and an indirect owner of an unaffiliated hotel property company that procured $5,607,666 of risk management services and insurance coverage through an AECOM affiliated insurance captive in fiscal year 2019.

On November 27, 2019, Carla Christofferson, who served as our Executive Vice President and Chief Legal Officer during fiscal year 2019, entered into a settlement agreement with AECOM regarding certain employment-related claims, pursuant to which AECOM paid Ms. Christofferson $2,308,714. The agreement provided for a mutual release of claims.

In fiscal year 2020, we reimbursed Starboard $175,000 for its reasonable, documented out-of-pocket fees and expenses (including legal expenses) incurred in connection with Starboard's involvement with AECOM before the date of the Starboard Agreement.

Stock Ownership Guidelines for Non-Employee Directors

Non-employee directors are subject to stock ownership guidelines, which are intended to align their interests with those of our stockholders. Under the guidelines, our non-employee directors must maintain ownership of AECOM stock at a multiple of five times the annual retainer by the end of the fiscal year following the fifth anniversary of the director's initial appointment to the Board. The minimum number of shares guideline is updated annually based on the current cash retainer ($100,000) and the 12-month trailing average AECOM stock price. Shares owned directly or indirectly, the value of vested but unexercised stock options and unvested

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restricted stock are counted toward the guidelines. The following table outlines the ownership of our non-employee directors as of September 30, 2019:

Non-Employee Director

      Requirement —
Retainer Multiple
      Actual —
Retainer Multiple
 

James H. Fordyce

      5.0       49.6  

Senator William H. Frist

      5.0       16.7  

Linda Griego

      5.0       13.7  

Steve Kandarian

      5.0       1.7  

Dr. Robert J. Routs

      5.0       9.8  

Clarence T. Schmitz

      5.0       10.7  

Douglas W. Stotlar

      5.0       17.6  

Daniel R. Tishman

      5.0       39.6  

General Janet C. Wolfenbarger

      5.0       7.1  

Please see the "COMPENSATION DISCUSSION AND ANALYSIS" section for a discussion of the executive stock ownership guidelines applicable to our NEOs.

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EXECUTIVE OFFICERS

AECOM's current executive officers are as follows:

 
  Name
   
  Age
   
  Position(s) Held
   

 

Michael S. Burke

      56       Chairman of the Board and Chief Executive Officer    

 

Sean C.S. Chiao

      61       President, Asia Pacific    

 

David Y. Gan

      47       Executive Vice President, Chief Legal Officer    

 

Stephen J. Morriss

      54       Group President, Design and Consulting Services — Americas (DCSA)    

 

Lara Poloni

      51       Chief Executive, EMEA    

 

W. Troy Rudd

      55       Executive Vice President, Chief Financial Officer    

 

John C. Vollmer

      62       Group President, Management Services    

 

Randall A. Wotring

      63       Chief Operating Officer    

The following section sets forth certain background information regarding those persons currently serving as executive officers of AECOM:

Michael S. Burke was appointed Chief Executive Officer of the Company and was elected to the Board in March 2014. In March 2015, Mr. Burke was appointed Chairman of the Board; see also the section entitled "CORPORATE GOVERNANCE — BOARD LEADERSHIP STRUCTURE." He previously served as President of AECOM from October 2011 to March 2014, Chief Financial Officer from December 2006 to September 2011 and Executive Vice President from May 2006 to September 2011. He also served as Chief Corporate Officer from May 2006 to January 2009. Mr. Burke joined AECOM as Senior Vice President, Corporate Strategy, in October 2005. From 1990 to 2005, Mr. Burke was with the accounting firm KPMG LLP. He served in various senior leadership positions, including as a Western Area Managing Partner from 2002 to 2005 and as a member of KPMG LLP's Board of Directors from 2000 through 2005. While on the KPMG Board of Directors, Mr. Burke served as the Chairman of the Board Process and Governance Committee and was a member of the Audit and Finance Committee. Mr. Burke currently serves as a director at Archer-Daniels-Midland Company and on the Board of Directors for Children's Bureau, which helps at-risk children through state-of-the-art child abuse prevention and treatment services. Mr. Burke is also chair of the US Business Roundtable's Infrastructure Committee. Additionally, he served on the Board of Directors of Rentech Nitrogen Partners L.P. and Rentech Inc. until April 2016 and June 2017, respectively, as well as on the Board of Directors for LA 2028, the committee responsible for bringing the 2028 Olympic and Paralympic Games to Los Angeles.

Sean C.S. Chiao was appointed President, Asia Pacific ("APAC") in October 2014. He previously served as Chief Executive of Buildings + Places, Asia Pacific from October 2013 to September 2014 and Chief Executive of China from October 2012 to September 2013. Mr. Chiao joined AECOM in October 2009 as Executive Vice President of China in October 2009. He served from 1997 onward as Regional Chair of a legacy design and planning firm, EDAW, which merged with the Company in 2009. Mr. Chiao is also a member of Harvard University's Master in Design Engineering External Advisory Board as well as University of Southern California's Board of Advisors for the American Academy in China.

David Y. Gan was appointed Executive Vice President, Chief Legal Officer in November 2019. He previously served as Deputy General Counsel, AECOM and General Counsel, AECOM Capital. Prior to joining AECOM in 2006, Mr. Gan was a corporate and securities lawyer at Mayer Brown LLP in Los Angeles and Wilson Sonsini Goodrich & Rosati, P.C. in Palo Alto. Mr. Gan has also served on the boards of nonprofit organizations, including the Ketchum-Downtown Los Angeles YMCA.

Stephen J. Morriss was appointed Group President, Design and Consulting Services — Americas in October 2017 and was previously Chief Executive of Europe, Middle East, India and Africa ("EMIA"). Previously, Mr. Morriss served as President and Chief Executive of AECOM's EMIA geography. He joined AECOM in January 2011 from Mouchel where he served as Managing Director of Government and Business Services and

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has also held senior executive roles with Serco PLC and WS Atkins. Mr. Morriss also served in the Royal Engineers and Royal Marines Reserve.

Lara Poloni was appointed Chief Executive of Europe, Middle East, India and Africa (EMIA) in October 2017. EMIA was reorganized in October 2018 to Europe, Middle East and Africa ("EMEA"). Ms. Poloni previously served as Chief Executive of Australia New Zealand (ANZ) from July 2014 to September 2017, Managing Director of the Southern Australian Region from June 2012 to June 2014, Managing Director of Environment ANZ from 2009 to 2012 and Group Leader of Transportation VicSA from October 2006 to July 2009. Prior to joining AECOM, Ms. Poloni worked in the planning, assessment and development of major infrastructure in the transport, energy and telecommunications sectors, serving as Group Manager of Planning and Environment for civil engineering firm Maunsell from January 2002 to September 2006. She was also previously a Board Member of Infrastructure Partnerships Australia.

W. Troy Rudd was appointed Executive Vice President and Chief Financial Officer in October 2015. He previously served as Chief Operating Officer, Design Consulting Services ("DCS") Americas and Chief Financial Officer, DCS Global from November 2014 to October 2015. He also served as Senior Vice President, Corporate Finance and Treasurer from 2012 until October 2015. Mr. Rudd joined AECOM in 2009 as Vice President, Financial Planning and Analysis. Prior to joining AECOM, he spent 10 years as a partner with KPMG LLP, where he held various leadership roles.

John C. Vollmer was appointed Group President, Management Services ("MS") in September 2016. Mr. Vollmer joined AECOM from URS Corporation, where he was the Executive Vice President of Operations for URS Federal Services. Mr. Vollmer has more than 35 years of experience working with military and other Federal agency markets providing waste management, nuclear operations, Information Technology, communications, and command and control solutions worldwide.

On October 12, 2019, the Company entered into a purchase and sale agreement with Maverick Purchaser Sub, LLC, an affiliate of American Securities LLC and Lindsay Goldberg LLC, pursuant to, and subject to the terms and conditions of which, the Company agreed to divest its Management Services business (the "Management Services Sale"). The Company expects that if and when the Management Services Sale is consummated, John C. Vollmer will no longer serve as an executive officer of the Company.

Randall A. Wotring was appointed Chief Operating Officer in July 2017. Previously, Mr. Wotring served as President of Technical and Operational Services since July 2016 and Group President, Management Services and President of URS' Federal Services business since November 2004. After joining an affiliate of URS in 1981, Mr. Wotring held various leadership positions, including managing the day-to-day operations of the Engineering and Technical Services Group within the URS Federal Services business. He also served as a member of the URS Management Committee and Risk Management Committee. Mr. Wotring is a founding member and currently serves on the Board of Directors of TimkenSteel.

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COMPENSATION DISCUSSION AND ANALYSIS

Why approve our Say-on-Pay proposal?

2019 executive pay aligned with the strength of our financial performance and stock outperformance

Design and rigor further strengthened for 2020 to support strategic and financial objectives and reward performance that results in stockholder value creation

 

1 Pillars of our Executive
Pay Program

Market Competitive: Assessed NEO target pay levels against market compensation benchmarks prepared by our independent board consultant

Supports Strategy: Incentive metrics designed to drive achievement of long-term strategic objectives

Performance-Based: Imposed performance conditions on the majority of our NEOs' compensation

Rigorous Goals: Required performance that met investor guidance and/or outperformed our industry for target payout on incentives

Stockholder Alignment: NEO financial interests aligned with those of our stockholders with long-term equity awards comprising a majority of each NEO's total compensation

     
2 2019 Financial Results AECOM delivered exceptional financial performance in fiscal year 2019, including results that met or exceeded our expectations on nearly every key financial metric:

Adjusted EBITDA increased by 13%, which exceeded the mid-point of the Company's guidance

Free cash flow was near record highs, including a record fourth quarter performance that was 50% higher than the Company's prior record

Transformational restructuring resulted in record high adjusted operating margins in the DCS business segment, which marked a 120 basis point improvement from the prior year, and guidance for further increases in fiscal 2020 that would mark a 210 basis point improvement from fiscal 2018

Adjusted EPS of $2.75, at the midpoint of guidance, a 3% increase over the prior year; however, US GAAP EPS decreased to ($1.66) after a $588 million non-cash impairment to goodwill

As a result of this strong performance, total stockholder return of 15.0% outperformed the S&P 500 index by double-digits

     
3 2019 NEO Pay Base Salary: No increase for CEO and 2% — 10% for other NEOs

Annual Incentives: Payout for CEO at 122.7% of target and, for other NEOs, from 110% to 164%, consistent with strong financial performance achieved in fiscal year 2019

Long Term Equity Incentives: No increase for CEO and 0% — 10% for other NEOs

     
4 Compensation
Design
Changes


2019:

Added three-year ROIC as a performance metric to our long-term incentives

Measured key metrics for long-term incentives on three-year cumulative performance

Eliminated duplicative metrics between the short- and long-term incentive plans

Increased rigor of cash flow goals

2020:

Added Adjusted EBITDA and Operating Margin Percentage as metrics to annual incentives

Added Attributable Free Cash Flow as a metric to our long-term equity incentives

Considered financial metrics and potential volatility related to expected sale of our Management Services business and the disposition and exit of certain at-risk, self-perform construction businesses

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Named Executive Officers

This Compensation Discussion and Analysis ("CD&A") section outlines the compensation philosophy and decisions for the following Named Executive Officers, or NEOs as of fiscal year 2019:

 
  Named Executive Officer
   
  Role as of the End of Fiscal Year 2019
    Michael S. Burke       Chairman of the Board and Chief Executive Officer
    W. Troy Rudd       Executive Vice President, Chief Financial Officer
    Randall A. Wotring       Chief Operating Officer
    Carla J. Christofferson(1)       Executive Vice President, Chief Legal Officer
    Stephen J. Morriss       Group President, Design and Consulting Services — Americas

(1)
Effective November 27, 2019, ceased serving as the Executive Vice President, Chief Legal Officer, see "Separation Agreement — Carla J. Christofferson" for additional information.

Executive Pay Program and Practices

A significant majority of our NEOs' compensation is "performance based" (i.e., subject to the accomplishment of individual and the Company's objectives) and stock based (i.e., aligned with stockholders' interests) as follows:

CEO Pay   Other NEO Pay

GRAPHIC

 

GRAPHIC

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The primary elements of our executive pay program support our executive pay philosophy and is directly linked to individual and company performance as follows:

GRAPHIC

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Stockholder Engagement and Executive Compensation Design Changes

Following the 2019 Annual Meeting, in which we received over a majority vote on Say-on-Pay (54%), we further broadened our stockholder outreach. As a result, Compensation Committee directors engaged with stockholders whose combined ownership exceeded 50% of our stock ownership base.

GRAPHIC

These active and on-going dialogues with our stockholders have resulted in the following changes to our executive pay programs:

What we heard from
Stockholders

      Our Response       Our Reasoning

Compensation/Organization Committee Outreach

Several large stockholders requested that directors should engage directly with stockholders

     

Compensation Committee directors have engaged directly with stockholders who collectively own greater than 50% of our total outstanding shares.

      Director engagement with stockholders provides further opportunities to align management with stockholders' interests.

Short-Term Incentives (Annual Cash Bonus)

Consistent outperformance against cash flow metrics hasn't resulted in stockholder value creation, suggesting the rigor of the goal should be increased

     

The Compensation Committee increased the target level of the conversion rate in fiscal year 2019 to further enhance the rigor of the goal.

      Increasing the conversion target used to determine the cash flow target further incentivizes cash flow performance that is above the median of peers and achievement at target creates value for stockholders and ensures cash available on-hand for growth, debt-paydowns, and share buybacks.

Absolute financial performance and margins are critical financial measures on which investors evaluate short term financial performance and should be considered in the plans

     

Revised fiscal year 2020 annual cash bonus metrics now include Adjusted EBITDA and Net Service Revenue (NSR) Operating Margin.

      Adjusted EBITDA and adjusted NSR Operating Margin align our goals with key financial measures utilized by stockholders so that management is incentivized to maximize stockholder value.

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Long-Term Incentives (Equity Awards)

The equity performance awards vest in three years but certain metrics include three annual performance periods

     

Revised fiscal year 2019 equity performance awards to replace three, annual performance periods with a single, three-year performance period for all financial metrics.

      Three-year cumulative metrics challenges management to focus on long-term value creation and are consistent with the market and best practices.

Incentive plans should support long-term strategy and profitable growth

     

Revised fiscal year 2019 equity performance awards to add ROIC to reward profitable growth.

Revised fiscal year 2020 short-term incentives to add Adjusted EBITDA and NSR Operating Margin to reward improving the "bottom-line" to drive long-term profitable growth.

      We believe ROIC is a strong measure of long-term profitable growth and value creation, and that a company's ROIC is highly correlated with TSR and also eliminates the impact of short-term stock market volatility from compensation outcomes and performance measures.

Free cash flow metrics continued to earn above 100%

     

Revised fiscal year 2019 free cash flow targets at 100% of adjusted EPS target (increased from 90% for fiscal year 2018 awards) and revised fiscal year 2020 free cash flow to better align with external guidance.

      Increasing the conversion target used to determine the cash flow target continues to incentivize and reward cash flow performance that is above the median of peers and ensures management remains focused on delivering industry-leading cash flow and enabling growth, debt paydowns, and share buybacks.

The annual cash bonus and equity performance awards contain duplicative metrics

     

Revised fiscal year 2019 equity performance awards to remove adjusted EPS.

Revised fiscal year 2020 annual cash bonus metrics to remove Operating Cash Flow Per Share.

      We believe that with ROIC and attributable Free Cash Flow in the long-term equity incentive plan and adjusted EBITDA and NSR Operating Margin in the annual cash bonus plan, management is incentivized to maximize stockholder value.

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COMPENSATION GOVERNANCE, PROCESS AND DECISIONS

Compensation Process

Compensation decisions are made as part of a year-long review process:

GRAPHIC

The Compensation Committee, which is composed solely of independent directors, has been authorized to determine and approve compensation for AECOM's executive officers. The Compensation Committee is also responsible for reviewing the compensation for the members of the Company's Board and submits any modifications for approval by the Board.

As part of the annual compensation planning process, the Compensation Committee reviews the NEOs' base salary, as well as short-term and long-term incentive compensation, with a focus on the total reward package. The Compensation Committee looks to AECOM's compensation peer group of companies, as well as the broader market, as a baseline for compensation decisions for NEOs. However, AECOM does not target executive officer compensation at a specific level or percentage relative to compensation provided by the companies in the compensation peer group or broader market. Instead, when determining compensation for executive officers, the Compensation Committee takes into account a broad array of factors, including the experience level of the individuals in their current positions, the overall financial and strategic performance of the Company during the year and the performance and contribution of each executive during the year relative to individual, pre-defined goals and objectives. Differences in compensation levels for our NEOs are driven by the Compensation Committee's assessment, in its judgment, of each of our executive's responsibilities, experience and compensation levels for similar positions at peer companies. Except as otherwise noted in this CD&A, the Compensation Committee's determinations are subjective and the result of business judgment informed by members' experiences, analysis of peer company data, input from the independent consultant, and overall compensation trends.

Each fiscal year, the Compensation Committee:

    Reviews the Company's financial, strategic and operational metrics and goals, compensation peer group and approves the performance objectives of the CEO and other executive officers.

    Approves design changes to the executive compensation program, as applicable.

    Reviews full-year Company financial and strategic performance to understand what was accomplished relative to established objectives.

    Evaluates the CEO's performance in light of the review of Company performance.

    Discusses with the CEO his evaluation of the performance of each of the other executive officers relative to their individual performance objective.

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    Determines compensation amounts for the CEO and each of the other executive officers, taking into account:

      Prior year's compensation;

      Performance assessments;

      Market considerations;

      Individual performance and succession planning and retention considerations;

      Input from the Compensation Committee's independent compensation consultant; and

      For the other NEOs, the CEO's recommendations.

    Reviews and approves the grants and payouts of long-term incentive equity awards.

With respect to the grants of long-term incentive equity awards, a number of factors are taken into account including but not limited to prior year grant size, individual performance, growth in earnings and in eligible employee headcount, the accounting expense, the potential dilutive effects on stockholders and the external competitiveness of individual awards. The Compensation Committee considers market data, including compensation for comparable positions at peer companies, and the strategic importance of a position to determine the long-term incentive equity value to be awarded to each NEO. The dollar value awarded by the Compensation Committee to each NEO is then converted into a specific number of units, based on the fair market value of AECOM common stock on the date of grant.

Compensation/Organization Committee's Independent Compensation Consultant

The Compensation Committee has the authority to retain the services of outside consultants to assist it in performing its responsibilities. The Compensation Committee engaged the services of the consulting firm Exequity LLP. During fiscal year 2019, the consultant provided data on the compensation and relative performance of compensation peer group companies as well as general industry data to the Compensation Committee, made presentations on regulatory and legislative matters affecting executive compensation, provided opinions on the degree to which compensation arrangements are consistent with market practices, and consulted on other compensation matters as needed. Exequity LLP does not provide any additional services to the Company.

The Compensation Committee has assessed the independence of Exequity LLP, considering the following six factors and other factors that it deemed relevant: (1) other services provided to the Company by Exequity LLP, (2) the amount of fees paid by the Company to Exequity LLP as a percentage of Exequity LLP's total revenue, (3) the policies or procedures maintained by Exequity LLP that are designed to prevent conflicts of interest, (4) any business or personal relationships between the individual employees of Exequity LLP involved in the engagement and a member of the Compensation Committee, (5) any AECOM stock owned by Exequity LLP's employees involved in the engagement and (6) any business or personal relationships between our executive officers and Exequity LLP or the employees of Exequity LLP involved in the engagement. Following such assessment, the Compensation Committee concluded that Exequity LLP is independent and that Exequity LLP's work raises no conflicts of interest.

Executive Pay Philosophy

Our executive pay program is designed to support our strategy to deliver industry-leading profitable growth and stockholder value creation. It is underlined by our compensation philosophy that aims to attract and retain the best and brightest in our industry and recognize/reward outstanding achievements that drive long-term profitable growth and stockholder value creation. Under our compensation philosophy, we:

    Provide a competitive compensation package that will allow us to attract, motivate, reward and retain key talent to achieve business objectives.

    Provide incentives that promote sustained short- and long-term financial growth and returns in order to enhance stockholder value.

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    Provide a strong pay for performance model, including compensation subject to both individual and Company performance conditions.

    Optimize performance without encouraging unreasonable risks or incentivizing behavior that would be reasonably likely to result in a material adverse effect on the Company.

    Address stockholder dilution concerns by being mindful of the potential dilutive effect of our long-term incentive program.

Assessing Competitive Practice

As part of its due diligence when making compensation decisions, the Compensation Committee examines pay data for a group of companies to stay current with market pay practices and trends and to understand the competitiveness of the Company's total compensation and its components of pay.

Compensation peer group data is also supplemented with broader market survey data from the Aon Hewitt U.S. Total Compensation Executive survey. The Compensation Committee uses the compensation peer group and market survey data for informational purposes. The Company does not target a specific percentile or make significant pay decisions based on market data alone. The Compensation Committee considers Company performance as well as the level of responsibility, experience and tenure of the individual and performance in the role.

Fiscal Year 2019 Compensation Peer Group

Our compensation peer group not only includes engineering & construction and defense companies, but also companies in other industries that the Compensation Committee considered to be of similar size, international presence and complexity. The Compensation Committee, when developing the compensation peer group, identified its competitors for talent and considered other various measures of size, scope and complexity, such as industry, sales, net income, market capitalization and enterprise value. In fiscal year 2019, the Compensation Committee updated the Company's compensation peer group to replace Accenture Plc with DXC Technology since DXC Technology is a competitor for talent as a technical service provider.

    Baker Hughes       General Dynamics       Northrop Grumman    
    Chicago Bridge & Iron Company N.V.       Halliburton       PACCAR    
    Cognizant Technology Solutions       Illinois Tool Works       Parker-Hannifin    
    Cummins       Jacobs Engineering Group       Raytheon    
    DXC Technology       KBR       Xerox    
    EMCOR Group       L3 Technologies            
    Fluor       Leidos Holdings            

Fiscal Year 2020 Compensation Peer Group

In fiscal year 2020, in light of the expected sale of the Management Services business segment and exit from that business along with the projected financial make-up of the Company going forward after the sale, the Compensation Committee further updated the Company's compensation peer group to replace General Dynamics, Halliburton, L3 Technologies, Northrop Grumman, and Raytheon with Mastec, Quanta Services, and Textron. As such, the fiscal year 2020 Compensation Peer Group will continue to be size appropriate and reflective of the Company following the sale of the Management Services business segment.

Performance Measures

AECOM used specific measures to drive and reward performance in fiscal year 2019:

    Earnings and Profitability (measured by Adjusted Earnings Per Share for Corporate NEOs and pre-variable compensation EBITA for operating NEOs);

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    Return on Invested Capital; and

    Cash Flow (measured by Operating Cash Flow Per Share and Free Cash Flow per share).

In fiscal year 2019, the Compensation Committee approved a pre-determined framework of adjustments to our financial results for our short-term and long-term incentive plans to ensure our executive compensation is aligned with our business performance. Generally, these adjustments may include unusual items, both positive and negative, that are inconsistent with the assumptions reflected in our financial plans. These adjustments under our formulaic framework may vary from year to year.

While our reported financial results are made according to GAAP for fiscal year 2019, the Compensation Committee concluded that for the purposes of our short-term incentive and long-term incentive equity awards, it is appropriate to use certain Non-GAAP measures which have been reconciled to their GAAP equivalent, see Annex B, Reconciliation of Non-GAAP Items.

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Elements of our Named Executive Officer Compensation

For fiscal year 2019, our CEO target pay remained flat while the other NEOs' target pay slightly increased as shown in the following:

GRAPHIC

The following is a discussion of the primary elements of fiscal year 2019 compensation for each of our NEOs.

Base Salaries

Our Compensation Committee adjusts base salaries in connection with its periodic review considering the NEOs' performances, any change in responsibilities, and competitive talent market conditions. The following sets forth the fiscal year 2019 base salary increases for each NEO:

NEOs
   
  2018(1)
   
  2019(1)
   
  % Change
   
Michael S. Burke       $1,500,000       $1,500,000       0.0%    
W. Troy Rudd       $635,000       $700,000       10.2%    
Randall A. Wotring       $800,000       $850,000       6.3%    
Carla J. Christofferson       $625,000       $650,000       4.0%    
Stephen J. Morriss       $625,000       $640,000       2.4%    

(1)
Salary increase, if any, effective January 2018 and 2019 with the beginning of the calendar year. Salaries disclosed in the "SUMMARY COMPENSATION TABLE" reflect actual amounts paid in the respective fiscal year.

The Compensation Committee believes that our NEOs' base salary levels provide appropriate levels of fixed income based on the background, qualifications and skill set of each executive.

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Annual Incentives

Our Compensation Committee establishes annually a short-term incentive award opportunity to be paid to each NEO upon achieving certain individual and company performance goals under the Executive Incentive Plan ("EIP"). For fiscal year 2019, the Compensation Committee approved the following targets for the NEOs:

    2018   2019    
Annual Target Incentives (NEOs)
   
  %
   
  $
   
  %
   
  $
   
Michael S. Burke       165%       $2,475,000       165%       $2,475,000    
W. Troy Rudd       100%       $635,000       100%       $700,000    
Randall A. Wotring       100%       $800,000       100%       $850,000    
Carla J. Christofferson       100%       $625,000       100%       $650,000    
Stephen J. Morriss       100%       $625,000       100%       $640,000    

For fiscal year 2019, the Compensation Committee approved the following performance measures for our NEOs to support its strategy for long-term profitable growth and stockholder value creation:

Performance Metrics    
         
Corporate Leaders

Operating Group Presidents

Why Selected
Adjusted Earnings Per Share
("Adj. EPS")
  Pre-Variable Compensation
("Pre-VC") EBITA
  Adjusted EPS and Pre-VC EBITA incentivizes a focus on profitability

Adjusted EPS focuses on overall earnings on a per share basis to align with stockholder interests

Pre-VC EBITA focuses on the "bottom-line" at the operating group levels
Operating Cash Flow Per Share
("OCFPS")

 
Operating Cash Flow
("OCF")

 
Cash flow incentivizes disciplined growth and risk management, operational efficiency and working capital management

Per share for Corporate metrics incentivize capital discipline and align with performance of our stockholders
Key Performance Indicator ("KPI") Assessment   Encourages focus on the achievement of the Company's non-financial strategic objectives included in the Company's strategic plan

The Compensation Committee reviews the financial, strategic and operational goals of the Company's annual financial plan when determining the financial targets for its NEOs. Financial performance goal setting is built upon a rigorous, bottom-up financial planning process across the entire organization.

Earnings Metrics Consistent with Financial Guidance

For fiscal year 2019, the adjusted EPS target for the NEOs' annual cash bonus award was consistent with the Company's 2019 financial plan and consistent with financial guidance presented to investors.

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Increased Rigor of Operating Cash Flow Per Share Goals

For fiscal year 2019, the Compensation Committee increased the rigor of the Free Cash Flow Per Share target by setting target performance at 100% (as opposed to 90%) of its Adjusted Earnings Per Share target, which exceeds the median three-year performance of the E&C industry peers. The Operating Cash Flow Per Share goal is derived by adding capital expenditures per share, net of proceeds from disposals, to the Free Cash Flow Per Share target. As a result, the rigor of the operating cash flow target also increased.

The annual incentive calculation for Messrs. Burke, Rudd and Wotring, is as follows:

GRAPHIC

For the fiscal year 2019 annual cash bonus, the following details the percentage earned by each NEO:

Michael S. Burke
   
  Weighting
Percentage

   
  Threshold
Amount($)

   
  Target
Amount($)

   
  Maximum
Amount($)

   
  Actual
Amount($)

   
  Earned
Percentage

   

Adjusted EPS

        35 %     $ 2.48       $2.70-$2.81       $ 2.89       $ 2.75 *       35.0 %  

Operating Cash Flow Per Share

        35 %     $ 3.15       $3.43-$3.57       $ 3.68       $ 4.87         70.0 %  

KPIs

        30 %             17.7 %  

Total

              122.7 %  

*
See Annex B, Reconciliation of Non-GAAP Items.
W. Troy Rudd
   
  Weighting
Percentage

   
  Threshold
Amount($)

   
  Target
Amount($)

   
  Maximum
Amount($)

   
  Actual
Amount($)

   
  Earned
Percentage

   

Adjusted EPS

        35 %     $ 2.48       $2.70-$2.81       $ 2.89       $ 2.75 *       35.0 %  

Operating Cash Flow Per Share

        35 %     $ 3.15       $3.43-$3.57       $ 3.68       $ 4.87         70.0 %  

KPIs

        30 %             59.3 %  

Total

              164.3 %  

*
See Annex B, Reconciliation of Non-GAAP Items.
Randall A. Wotring
   
  Weighting
Percentage

   
  Threshold
Amount($)

   
  Target
Amount($)

   
  Maximum
Amount($)

   
  Actual
Amount($)

   
  Earned
Percentage

   

Adjusted EPS

        35 %     $ 2.48       $2.70-$2.81       $ 2.89       $ 2.75 *       35.0 %  

Operating Cash Flow Per Share

        35 %     $ 3.15       $3.43-$3.57       $ 3.68       $ 4.87         70.0 %  

KPIs

        30 %             30.3 %  

Total

              135.3 %  

*
See Annex B, Reconciliation of Non-GAAP Items

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Carla J. Christofferson
   
  Weighting
Percentage

   
  Threshold
Amount($)

   
  Target
Amount($)

   
  Maximum
Amount($)

   
  Actual
Amount($)

   
  Earned
Percentage

   

Adjusted EPS

        25 %     $ 2.48       $2.70-$2.81       $ 2.89       $ 2.75 *       25.0 %  

Operating Cash Flow Per Share

        25 %     $ 3.15       $3.43-$3.57       $ 3.68       $ 4.87         50.0 %  

KPIs

        50 %             35.0 %  

Total

              110.0 %