DEF 14A 1 tm212461-1_def14a.htm DEF 14A tm212461-1_def14a - none - 9.0625408s
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 ☒
Filed by a Party other than the Registrant ☐
Check the appropriate box:

Preliminary Proxy Statement

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

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material under §240.14a-12
Laureate Education, Inc.
(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):

No fee required.

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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Title of each class of securities to which transaction applies:
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Fee paid previously with preliminary materials.

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

 
[MISSING IMAGE: lg_laureateedu-bw.jpg]
650 S. Exeter Street
Baltimore, Maryland 21202
April 16, 2021
Dear Stockholder,
We cordially invite you to attend the 2021 Annual Meeting of Stockholders of Laureate Education, Inc. (“Laureate”) to be held on Wednesday, May 26, 2021, at 10:00 a.m., Eastern Daylight Time. This year’s meeting will be a completely virtual meeting. Our virtual stockholder meeting format will use technology designed to increase stockholder access, save Laureate and our stockholders time and money, provide to our stockholders the rights and opportunities to participate in the virtual meeting similar to what they would have at an in-person meeting, and enable increased stockholder attendance and participation because stockholders can participate from any location around the world. In addition to online attendance, we will provide stockholders with the opportunity to hear all portions of the official meeting, submit written questions and comments during the meeting, and vote online during the open poll portion of the meeting. You may attend the meeting, vote your shares and submit questions electronically during the meeting via live webcast by visiting www.virtualshareholdermeeting.com/LAUR2021.
The attached Notice of 2021 Annual Meeting and proxy statement describe the business that we will conduct at the 2021 Annual Meeting webcast and provide information about us that you should consider when you vote your shares. As set forth in the attached proxy statement, the meeting will be held:
1.
To elect a Board of ten (10) directors, as named herein, each of whom shall hold office for a term of one year, expiring at the annual meeting in 2022, and until his or her successor is elected and qualified, or until his or her earlier death, resignation or removal.
2.
To hold an advisory vote to approve named executive officer compensation.
3.
To ratify the appointment of PricewaterhouseCoopers LLP as Laureate’s independent registered public accounting firm for the year ending December 31, 2021.
4.
To transact such other business as may properly come before the 2021 Annual Meeting and any adjournments thereof.
Please carefully read each of the proposals in the accompanying Proxy Statement before you vote.
Your vote is extremely important regardless of the number of shares you own. To ensure that your shares are represented at the 2021 Annual Meeting, whether you plan to virtually attend or not, please vote in accordance with the enclosed instructions. You can vote your shares by telephone, electronically via the Internet or by completing and returning a proxy card or vote instruction form, if you have received one. If you vote using a proxy card or vote instruction form, you must sign, date and mail the proxy card or vote instruction form, using the envelope accompanying the card or form. If you decide to attend the 2021 Annual Meeting and wish to modify your vote, you may revoke your proxy and vote in person via attendance at the 2021 Annual Meeting.
Thank you for your continued interest in Laureate.
Sincerely,
[MISSING IMAGE: sg_kennethfreeman-bw.jpg]
Kenneth W. Freeman
Chairman of the Board of Directors
The proxy statement is dated April 16, 2021, and is first being made available to stockholders on or about April 16, 2021.
 

 
[MISSING IMAGE: lg_laureateedu-bw.jpg]
NOTICE OF 2021 ANNUAL MEETING
OF STOCKHOLDERS
The 2021 Annual Meeting of Stockholders of Laureate Education, Inc., a public benefit corporation formed under the laws of Delaware, will be held on Wednesday, May 26, 2021, at 10:00 a.m., Eastern Daylight Time, via a virtual meeting that will be webcast live and accessed at
www.virtualshareholdermeeting.com/LAUR2021 for the following purposes:
1.
To elect a Board of ten (10) directors, as named herein, each of whom shall hold office for a term of one year, expiring at the annual meeting in 2022, and until his or her successor is elected and qualified, or until his or her earlier death, resignation or removal.
2.
To hold an advisory vote to approve named executive officer compensation.
3.
To ratify the appointment of PricewaterhouseCoopers LLP as Laureate’s independent registered public accounting firm for the year ending December 31, 2021.
4.
To transact such other business as may properly come before the 2021 Annual Meeting and any adjournments thereof.
The Proxy Statement accompanying this Notice describes each of these items in detail. The Proxy Statement contains other important information that you should read and consider before you vote.
The Board of Directors has fixed the close of business on March 29, 2021 as the record date for the 2021 Annual Meeting. Only the holders of record of our Class A common stock or Class B common stock as of the close of business on the record date are entitled to notice of, and to vote at, the 2021 Annual Meeting webcast and any adjournments thereof. A list of the holders of record of our Class A common stock and Class B common stock will be available at the 2021 Annual Meeting webcast and, during the 10 days prior to the 2021 Annual Meeting webcast, at the offices of our corporate headquarters located at 650 S. Exeter Street, Baltimore, Maryland 21202.
Laureate is furnishing proxy materials to certain stockholders through the Internet as permitted under the rules of the Securities and Exchange Commission. Under these rules, many stockholders will receive a Notice of Internet Availability of Proxy Materials instead of a paper copy of the Notice of Annual Meeting of Stockholders and Proxy Statement, our proxy card, and our Annual Report to Stockholders. We believe that this process gives us the opportunity to serve you more efficiently by making the proxy materials available quickly online and reducing costs associated with printing and postage. Stockholders who do not receive a Notice of Internet Availability of Proxy Materials will receive a paper copy of the proxy materials by mail.
You can vote your shares of Class A common stock or Class B common stock by telephone, electronically via the Internet or by completing and returning a proxy card or vote instruction form if you have received one. If you vote using a proxy card or vote instruction form, you must sign, date and mail the proxy card, using the envelope accompanying the card or form. If you decide to attend the 2021 Annual Meeting webcast and wish to modify your vote, you may revoke your proxy and vote in person via attendance at the 2021 Annual Meeting webcast.
BY ORDER OF THE BOARD OF DIRECTORS:
[MISSING IMAGE: sg_lesliebrush-bw.jpg]
Baltimore, Maryland
April 16, 2021
Leslie S. Brush
Vice President, Assistant General Counsel and Secretary
 

 
[MISSING IMAGE: lg_laureateedu-bw.jpg]
PROXY STATEMENT SUMMARY
2021 ANNUAL MEETING OF STOCKHOLDERS
Date and Time:
May 26, 2021
10:00 a.m., Eastern Daylight Time
Place:
Virtual Meeting via live webcast at www.virtualshareholdermeeting.com/LAUR2021
Record Date:
March 29, 2021
Voting Matters and Board Recommendation
Proposal Description
Board Vote
Recommendation
Page Number
with More
Information
Proposal 1
Election of 10 directors named herein
“FOR” all nominees
6
Proposal 2
Advisory vote on executive compensation
“FOR”
50
Proposal 3
Ratification of the appointment of
PricewaterhouseCoopers LLP as Laureate’s independent
registered public accounting firm
“FOR”
51
This Proxy Statement Summary contains highlights of certain information in this Proxy Statement. Because it is only a summary, it does not contain all of the information that you should consider before voting. Please review the complete Proxy Statement and Laureate’s Annual Report on Form 10-K for additional information.
 

 
[MISSING IMAGE: lg_laureateedu-bw.jpg]
650 S. Exeter Street
Baltimore, Maryland 21202
PROXY STATEMENT FOR THE LAUREATE EDUCATION, INC.
2021 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 26, 2021
This Proxy Statement is being furnished to the holders of the Class A common stock and Class B common stock of Laureate Education, Inc., a Delaware public benefit corporation (“Laureate”), in connection with the solicitation by our Board of Directors of proxies to be voted at the 2021 Annual Meeting of Stockholders of Laureate (the “2021 Annual Meeting”) to be held on Wednesday, May 26, 2021, at 10:00 a.m., Eastern Daylight Time, via a virtual meeting that will be webcast live and accessed at www.virtualshareholdermeeting.com/ LAUR2021, or at any adjournments thereof, for the purposes set forth in the accompanying Notice of 2021 Annual Meeting.
On or about April 16, 2021, our proxy materials or the Notice of Internet Availability of Proxy Materials, as applicable, are being mailed, and this Proxy Statement and the other proxy materials are being made available via the Internet free of charge at www.proxyvote.com, to all stockholders entitled to notice of, and to vote at, the 2021 Annual Meeting webcast. At the close of business on March 29, 2021, the record date for the 2021 Annual Meeting, there were 122,536,715 shares of Class A common stock and 73,544,083 shares of Class B common stock, respectively, outstanding and entitled to notice of and to vote at the 2021 Annual Meeting webcast. Only the holders of record of our Class A common stock and Class B common stock as of the close of business on the record date are entitled to notice of, and to vote at, the 2021 Annual Meeting webcast and any adjournments thereof.
If a stockholder executes and returns a proxy card or vote instruction form or submits vote instructions to us by telephone or via the Internet, the stockholder may nevertheless revoke the proxy at any time prior to its use by filing with the Secretary of Laureate a written revocation or a duly executed proxy bearing a later date or by submitting revised vote instructions to us by telephone or via the Internet prior to 11:59 p.m. EDT on Tuesday, May 25, 2021, in accordance with the instructions on the accompanying proxy card or vote instruction form. A stockholder who attends the 2021 Annual Meeting via webcast may revoke his or her proxy at that time and vote in person via attendance at the virtual meeting if so desired.
Unless revoked or unless contrary instructions are given, each proxy that is properly signed, dated and returned or authorized by telephone or via the Internet in accordance with the instructions on the proxy card or vote instruction form prior to the start of the 2021 Annual Meeting webcast will be voted as indicated on the proxy card or vote instruction form or via telephone or the Internet and if no indication is made, each such proxy will be deemed to grant authority to vote, as applicable:
PROPOSAL 1:   FOR the election of Brian F. Carroll, Andrew B. Cohen, William L. Cornog, Pedro del Corro, Michael J. Durham, Kenneth W. Freeman, George Muñoz, Dr. Judith Rodin, Eilif Serck-Hanssen, and Ian K. Snow, each of whom shall hold office for a term of one year, expiring at the annual meeting in 2022, and until his or her successor is elected and qualified, or until his or her earlier death, resignation or removal.
PROPOSAL 2:   FOR the advisory vote to approve named executive officer compensation.
PROPOSAL 3:   FOR ratification of the appointment of PricewaterhouseCoopers LLP as Laureate’s independent registered public accounting firm for the year ending December 31, 2021.
PROPOSAL 4:   In the discretion of the proxies with respect to the transaction of such other business as may properly come before the 2021 Annual Meeting webcast and any adjournments thereof.
OUR BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE ELECTION OF EACH OF THE NOMINEES LISTED UNDER PROPOSAL 1, “FOR” THE ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION UNDER PROPOSAL 2, AND “FOR” THE RATIFICATION OF AUDITORS UNDER PROPOSAL 3.
 

 
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QUESTIONS AND ANSWERS ABOUT THE 2021 ANNUAL MEETING
Q:
Why did I receive these materials?
A:
We are making this Proxy Statement available to you on or around April 16, 2021 because the Board of Directors is soliciting your proxy to vote at the 2021 Annual Meeting to be held on Wednesday, May 26, 2021, at 10:00 a.m., Eastern Daylight Time, via a virtual meeting that will be webcast live and accessed at www.virtualshareholdermeeting.com/LAUR2021, or at any adjournments thereof. The information provided in this Proxy Statement is for your use in deciding how to vote on the proposals described below.
Q:
Who is entitled to attend and vote at the Annual Meeting?
A:
You can attend and vote at the 2021 Annual Meeting webcast if, as of the close of business on March 29, 2021, the record date for the 2021 Annual Meeting, you were a stockholder of record of Laureate’s Class A common stock or Class B common stock. As of the record date, there were 122,536,715 shares of our Class A common stock and 73,544,083 shares of our Class B common stock outstanding.
To attend and participate in the 2021 Annual Meeting webcast, you will need the 16-digit control number included in your Notice and Access Card, on your proxy card or on the instructions that accompanied your proxy materials. If your shares are held in street name, you should contact your bank or broker to obtain your 16-digit control number or otherwise vote through the bank or broker. The meeting webcast will begin promptly at 10:00 a.m., Eastern Daylight Time. We encourage you to access the meeting prior to the start time. Online check-in will begin at 9:45 a.m., Eastern Daylight Time, and you should allow ample time for the check-in procedures.
Q:
What is the difference between being a registered stockholder and holding shares in street name?
A:
A registered stockholder holds shares in his or her name. Shares held in street name means that shares are held in the name of a bank, broker or other nominee on the holder’s behalf.
Q:
What do I do if my shares are held in street name?
A:
If your shares are held in a brokerage account or by a bank or other holder of record, you are considered the “beneficial owner” of shares held in street name. The Notice and Access Card or the proxy materials, if you elected to receive a hard copy, has been forwarded to you by your broker, bank or other nominee who is considered, with respect to those shares, the stockholder of record. As the beneficial owner, you have the right to direct your broker, bank or other holder of record on how to vote your shares by following their instructions for voting. Please refer to information from your bank, broker or other nominee on how to submit your voting instructions.
Q:
What are the voting rights of each class of stock?
A:
For each proposal, stockholders are entitled to cast one vote for each share of Class A common stock held as of the record date and 10 votes for each share of Class B common stock held as of the record date. There are no cumulative voting rights.
Q:
How do I attend and vote at the Annual Meeting?
A:
We will be hosting the 2021 Annual Meeting live via audio webcast. Any stockholder can attend the 2021 Annual Meeting live online by accessing www.virtualshareholdermeeting.com/LAUR2021. You will need to obtain your own Internet access if you choose to virtually attend the 2021 Annual Meeting. If you were a stockholder as of the Record Date, or you hold a valid proxy for the 2021 Annual Meeting, you can vote at the 2021 Annual Meeting. A summary of the information that you need to attend the 2021 Annual Meeting webcast is provided below:

Instructions on how to attend and participate via the Internet, including how to demonstrate proof of stock ownership, are posted at www.virtualshareholdermeeting.com/LAUR2021.

Assistance with questions regarding how to attend and participate via the Internet will be provided at www.virtualshareholdermeeting.com/LAUR2021 on the day of the 2021 Annual Meeting.
 
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Webcast starts at 10:00 a.m., Eastern Daylight Time.

You will need your 16-Digit Control Number to enter the 2021 Annual Meeting.

Stockholders may submit questions while attending the 2021 Annual Meeting via the Internet.

Webcast replay of the 2021 Annual Meeting will be available until May 26, 2022.
Q:
What if during the check-in time or during the 2021 Annual Meeting webcast I have technical difficulties or trouble accessing the virtual meeting website?
A:
We will have technicians ready to assist you with any technical difficulties that you may have accessing the virtual meeting website. If you encounter any difficulties accessing the virtual meeting website during the check-in or meeting time, please call the technical support number that will be posted on the 2021 Annual Meeting login page.
Q:
Can I vote my shares before the Annual Meeting?
A:
Yes. If you are a registered stockholder, there are three ways to vote your shares before the 2021 Annual Meeting webcast:

By Internet (www.proxyvote.com) — Use the Internet to transmit your voting instructions until 11:59 p.m. EDT on May 25, 2021. Have your Notice of Internet Availability of Proxy Materials or proxy card available and follow the instructions on the website to vote your shares.

By telephone (1-800-690-6903) — Submit your vote by telephone until 11:59 p.m. EDT on May 25, 2021. Have your Notice of Internet Availability of Proxy Materials or proxy card available and follow the instructions provided by the recorded message to vote your shares.

By mail — If you received a paper copy of the proxy materials, you can vote by mail by filling out the proxy card enclosed with those materials and returning it using the instructions on the card. To be valid, proxy cards must be received before the start of the 2021 Annual Meeting webcast.
If your shares are held in street name, your bank, broker or other nominee may provide you with a Notice of Internet Availability of Proxy Materials that contains instructions on how to access our proxy materials and vote online or request a paper or email copy of our proxy materials. If you received these materials in paper form, the materials included a vote instruction form so that you can instruct your bank, broker or other nominee how to vote your shares.
Please see the Notice of Internet Availability of Proxy Materials or the information that your bank, broker or other nominee provided you for more information on these voting options.
Q:
Can I revoke my proxy or change my voting instructions once submitted?
A:
If you are a registered stockholder, you can revoke your proxy and change your vote before the 2021 Annual Meeting webcast by:

Voting again by Internet or telephone before 11:59 p.m. EDT on May 25, 2021 (only the latest vote you submit will be counted);

Submitting a new properly signed and dated paper proxy card with a later date (your proxy card must be received before the start of the 2021 Annual Meeting webcast); or

Sending a written notice of revocation to our executive offices to the attention of our Secretary (the notification must be received by 11:59 p.m. EDT on May 25, 2021). The notice should be addressed as follows:
Laureate Education, Inc.
650 S. Exeter Street,
Baltimore, Maryland 21202
Attn: Secretary
If your shares are held in street name, you should contact your bank, broker or other nominee about revoking your voting instructions and changing your vote before the 2021 Annual Meeting webcast.
 
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If you are eligible to vote at the 2021 Annual Meeting, you also can revoke your proxy or voting instructions and change your vote at the 2021 Annual Meeting webcast by casting a ballot via the online platform before the polls close.
Q:
What will happen if I submit my proxy but do not vote on a proposal?
A:
If you submit a valid proxy but fail to provide instructions on how you want your shares to be voted, properly submitted proxies will be voted:

FOR” the election of Brian F. Carroll, Andrew B. Cohen, William L. Cornog, Pedro del Corro, Michael J. Durham, Kenneth W. Freeman, George Muñoz, Dr. Judith Rodin, Eilif Serck-Hanssen, and Ian K. Snow, each of whom shall hold office for a term of one year, expiring at the annual meeting in 2022, and until his or her successor is elected and qualified, or until his or her earlier death, resignation or removal;

FOR” the advisory vote to approve named executive officer compensation; and

FOR” ratification of the appointment of PricewaterhouseCoopers LLP as Laureate’s independent registered public accounting firm for the year ending December 31, 2021.
If any other item is properly presented for a vote at the meeting, the shares represented by your properly submitted proxy will be voted at the discretion of the proxies.
Q:
What will happen if I neither submit my proxy nor vote my shares in person at the 2021 Annual Meeting?
A:
If you are a registered stockholder, your shares will not be voted.
If your shares are held in street name, your bank, broker or other nominee may vote your shares on certain “routine” matters. The ratification of independent auditors is currently considered to be a routine matter. On this matter, your bank, broker or other nominee can:

Vote your street-name shares even though you have not provided voting instructions; or

Choose not to vote your shares.
The other matters that you are being asked to vote on are not routine and cannot be voted by your bank, broker or other nominee without your instructions. When a bank, broker or other nominee is unable to vote shares for this reason, it is called a “broker non-vote.”
Q:
What does it mean if I receive more than one set of materials?
A:
You probably have multiple accounts with us and/or banks, brokers or other nominees. You should vote all of the shares represented by the proxy cards and/or voting instruction forms. Certain banks, brokers or other nominees have procedures in place to discontinue duplicate mailings upon a stockholder’s request. You should contact your bank, broker or other nominee for more information.
Q:
How many shares must be present to conduct business at the 2021 Annual Meeting?
A:
To carry on the business of the 2021 Annual Meeting, holders of a majority of the voting power of Class A common stock and Class B common stock issued and outstanding as of the record date must be present in person via attendance at the virtual meeting or represented by proxy.
Q:
What vote is required to approve each proposal?
A:
For Proposal 1, unless otherwise provided in the Wengen Securityholders Agreement (as herein defined), directors will be elected by a plurality of the votes of the shares of our Class A common stock and Class B common stock (voting together as a single class) present in person via attendance at the virtual meeting or represented by proxy at the 2021 Annual Meeting at which a quorum is present, which means that the 10 nominees receiving the highest number of affirmative votes will be elected.
For Proposal 2, the advisory vote to approve named executive officer compensation, the affirmative vote of a majority of the voting power of the shares of our Class A common stock and Class B common stock (voting together as a single class) present in person via attendance at the virtual meeting or
 
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represented by proxy (and entitled or required to vote thereon) at the 2021 Annual Meeting at which a quorum is present will be required for approval.
For Proposal 3, the ratification of the appointment of PricewaterhouseCoopers LLP as Laureate’s independent registered public accounting firm for the year ending December 31, 2021, the affirmative vote of a majority of the voting power of the shares of our Class A common stock and Class B common stock (voting together as a single class) present in person via attendance at the virtual meeting or represented by proxy (and entitled or required to vote thereon) at the 2021 Annual Meeting at which a quorum is present will be required for approval.
Q:
Are abstentions and broker non-votes counted in the vote totals?
A:
A broker non-vote occurs when shares held by a bank, broker or other nominee are not voted with respect to a particular proposal because the bank, broker or other nominee does not have discretionary authority to vote on the matter and has not received voting instructions from its clients. If your bank, broker or other nominee holds your shares in its name and you do not instruct your bank, broker or other nominee how to vote, your bank, broker or other nominee will only have discretion to vote your shares on “routine” matters. Where a proposal is not “routine,” a bank, broker or other nominee who has received no instructions from its clients does not have discretion to vote its clients’ uninstructed shares on that proposal. At our 2021 Annual Meeting, only Proposal 3 (ratifying the appointment of our independent registered public accounting firm) is considered a routine matter. Your bank, broker or other nominee will therefore not have discretion to vote on the election of directors or the advisory vote to approve named executive officer compensation, as these are “non-routine” matters.
Broker non-votes and abstentions by stockholders from voting (including banks, brokers or other nominees holding their clients’ shares of record who cause abstentions to be recorded) will be counted towards determining whether or not a quorum is present at the virtual meeting. However, as the 10 nominees receiving the highest number of affirmative votes will be elected, abstentions and broker non-votes will not affect the outcome of the election of Directors. With regard to the affirmative vote of the shares present at the virtual meeting or represented by proxy required for Proposal 2, abstentions will have the effect of a vote against Proposal 2 and, because it is a non-routine matter, broker non-votes will not impact the outcome of Proposal 2. With regard to the affirmative vote of the shares present at the virtual meeting or represented by proxy required for Proposal 3, it is a routine matter so there will be no broker non-votes (and brokerage firms may vote in their discretion on this matter on behalf of beneficial owners who have not furnished voting instructions before the date of the 2021 Annual Meeting), and abstentions will have the effect of a vote against Proposal 3.
Q:
How are votes counted?
A:
In the election of directors, Proposal 1, you may vote “FOR” all or some of the nominees or your vote may be “WITHHELD” with respect to one or more of the nominees.
For Proposal 2 and Proposal 3, you may vote “FOR,” “AGAINST,” or “ABSTAIN.” If you elect to “ABSTAIN,” the abstention has the same effect as a vote “AGAINST.”
If you provide specific instructions with regard to certain items, your shares will be voted as you instruct on such items. If no instructions are indicated on a properly executed proxy card or over the telephone or Internet, the shares will be voted as recommended by our Board of Directors. (See “What will happen if I submit my proxy but do not vote on a proposal?” for additional information.)
Q:
Is my vote confidential?
A:
Yes. The vote of any stockholder will not be revealed to anyone other than a tabulator of votes or an election inspector, except (i) as necessary to meet applicable legal and stock exchange listing requirements, (ii) to assert claims for or defend claims against Laureate, (iii) to allow the Inspectors of Election to certify the results of the stockholder vote, (iv) in the event that a proxy solicitation in opposition to Laureate or the election of the Board of Directors takes place, (v) if a stockholder has requested that his or her vote be disclosed, or (vi) to respond to stockholders who have written comments on Proxy Cards.
 
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Q:
Will any other business be transacted at the meeting? If so, how will my proxy be voted?
A:
Management does not know of any business to be transacted at the 2021 Annual Meeting other than those matters described in this Proxy Statement. The period specified in the proxy statement for our 2020 Annual Meeting of Stockholders for submitting additional proposals to be considered at the meeting has passed and there are no such proposals to be considered. However, should any other matters properly come before the meeting, and any adjournments thereof, shares with respect to which voting authority has been granted to the proxies will be voted by the proxies in accordance with their judgment.
Q:
Who will pay the cost of soliciting votes for the 2021 Annual Meeting?
A:
We will bear the entire cost of solicitation of proxies, including the preparation, assembly, printing, and mailing of this Proxy Statement and the accompanying materials. The largest expense in the proxy process is printing and mailing the proxy materials. Proxies also may be solicited on behalf of Laureate by directors, officers or employees of Laureate in person or by mail, telephone or facsimile transmission. No additional compensation will be paid to such directors, officers, or employees for soliciting proxies. We have engaged Broadridge Financial Solutions, Inc. to assist us in the distribution of proxies. We will also reimburse brokerage firms and other custodians, nominees and fiduciaries for their expenses incurred in sending our proxy materials to beneficial owners of our common stock as of the record date.
Q:
Why hold a virtual meeting?
A:
We are excited to use technology designed to increase stockholder access, save Laureate and our stockholders time and money, and provide to our stockholders the rights and opportunities to participate in the virtual meeting similar to what they would have at an in-person meeting. Furthermore, in light of the continuing concerns regarding novel coronavirus (COVID-19), we believe that hosting a virtual meeting is in the best interest of the Company and its stockholders and enables increased stockholder attendance and participation because stockholders can participate from any location around the world.
Q:
When will you publish the results of the 2021 Annual Meeting?
A:
We will include the results of the votes taken at the 2021 Annual Meeting in a Current Report on Form 8-K filed with the Securities and Exchange Commission within four business days following the 2021 Annual Meeting webcast.
 
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PROPOSAL 1: ELECTION OF DIRECTORS
At the 2021 Annual Meeting, our stockholders will be asked to elect the 10 directors named herein for a one-year term expiring at the next annual meeting of stockholders. Subject to the Wengen Securityholders Agreement (as defined below), each director will hold office until his or her successor has been elected and qualified or until the director’s earlier death, resignation or removal.
Recommendation of our Board of Directors
Our Board of Directors recommends voting “FOR” the election of each of the Director nominees named herein as directors, each of whom shall hold office for a term of one year, expiring at the annual meeting in 2022, and until his or her successor is elected and qualified, or until his or her earlier death, resignation or removal.
Each proxy or vote instruction form will be voted for the election of each of the Director nominees named herein as directors, unless the proxy contains contrary instructions. Shares of Class A common stock and Class B common stock represented by proxies received by the Board of Directors and not so marked as to withhold authority to vote for any individual nominee or for all nominees will be voted (unless one or more nominees are unable to serve) for the election of the nominees named below. The Board of Directors knows of no reason why any such nominee should be unable or unwilling to serve, but if such should be the case, proxies will be voted for the election of some other person or the size of the Board of Directors will be fixed at a lower number.
Each of the nominees currently serves as a member of our Board of Directors. As of the date of the 2021 Annual Meeting, two of our directors will be designated pursuant to the provisions of the Wengen Securityholders Agreement (as defined below). See “—Corporate Governance—Directors Designated by Certain of the Wengen Investors under the Wengen Securityholders Agreement.” Subject to the provisions of the Wengen Securityholders Agreement, our directors are elected by a plurality of the votes cast by the stockholders present or represented by proxy and entitled to vote at the annual meeting. Abstentions and broker non-votes are not considered votes cast and will have no effect on the outcome of this proposal.
Nominees for Election to the Board of Directors
The names of the nominees for election to the Board of Directors and certain information about such nominees, including their ages, are set forth below. For information concerning the number of shares of common stock beneficially owned by each nominee, see “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.”
Steven M. Taslitz, a current director, is not standing for re-election and will leave our Board of Directors as of the 2021 Annual Meeting. The Board is grateful to Mr. Taslitz for his dedication, service and contributions as a director of our Company. The Board of Directors intends to decrease the size of the Board of Directors from eleven to ten members effective as of the date of the 2021 Annual Meeting.
Name
Age
Position
Brian F. Carroll*
49
Director
Andrew B. Cohen
49
Director
William L. Cornog
56
Director
Pedro del Corro*
63
Director
Michael J. Durham*
70
Director
Kenneth W. Freeman*
70
Director, Chairman of the Board
George Muñoz*
69
Director
Dr. Judith Rodin*
76
Director
Eilif Serck-Hanssen
55
Director, President and Chief Executive Officer
Ian K. Snow*
51
Director
*
Independent director.
 
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Brian F. Carroll is the managing partner of Carroll Capital LLC, a family investment office focused on lower middle market companies. He was, through 2016, a member of KKR, a global alternative asset manager. He joined KKR in 1995 and was head of the consumer and retail teams in Europe. He also was a member of the European Investment Committee. Prior to joining KKR, Mr. Carroll was with Donaldson, Lufkin & Jenrette, where he worked on a broad range of high yield financing, corporate finance and merchant banking transactions. In the past five years, Mr. Carroll has served as a member of the boards of directors of Flowgroup Plc, Pets at Home Group Plc, Cognita, Northgate Information Solutions, SMCP and Afriflora. Mr. Carroll earned a B.S. and B.A.S. from the University of Pennsylvania and an M.B.A. from Stanford University Graduate School of Business. Mr. Carroll has been a Director and the Chairman of the Compensation Committee of our Board of Directors since July 2007.
Andrew B. Cohen is the chief investment officer and co-founder of Cohen Private Ventures, LLC, which invests long-term capital, primarily in direct private investments and other opportunistic transactions, and manages family office activities, on behalf of Steven A. Cohen. From 2002 to 2005 and from 2010 to 2014, Mr. Cohen was an analyst and portfolio manager at S.A.C. Capital Advisors, L.P., an investment management firm and the predecessor to Cohen Private Ventures, LLC. From 2005 to 2009, Mr. Cohen was a managing director and partner of Dune Capital Management LP, an investment management firm. Mr. Cohen began his career at Morgan Stanley, where he was an analyst in the real estate department and principal investing group (MSREF) and then an associate in the mergers and acquisitions group after business school. Mr. Cohen currently is a director of Republic First Bancorp, Inc. and serves as a member of the boards of directors of several private companies. He also serves on the National Advisory Board of the Johns Hopkins Berman Institute of Bioethics and the Painting and Sculpture Committee of The Whitney Museum of American Art. In the past five years, Mr. Cohen has served as a member of the board of directors of Kadmon Holdings, Inc. Mr. Cohen earned a B.A. from the University of Pennsylvania and an M.B.A. from the Wharton School of the University of Pennsylvania. Mr. Cohen has been a Director since June 2013.
William L. Cornog joined KKR Capstone, a consulting firm that provides services to KKR portfolio companies, in 2002 and currently serves as the managing partner of KKR Capstone. Mr. Cornog serves as a member of KKR’s Americas, EMEA, APAC, Infrastructure, TMT Growth Portfolio Management, Investment & Distribution and Valuation Committees. Prior to joining KKR Capstone, Mr. Cornog was with Williams Communications Group as the senior vice president and general manager of network services. Prior to Williams Communications Group, Mr. Cornog was a partner at The Boston Consulting Group. Mr. Cornog also has worked in direct marketing with Age Wave Communications and in marketing and sales positions with SmithKline Beckman. Mr. Cornog currently is a director of Channel Control Merchants and Optir, private companies in which KKR is an investor. Mr. Cornog earned a B.A. from Stanford University and an M.B.A. from Harvard Business School. Mr. Cornog has been a Director since February 2017 and the Chairman of the Nominating and Corporate Governance Committee of our Board of Directors since January 2018.
Pedro del Corro is a member of Torreal, S.A. (“Torreal”), one of the largest private investment firms in Spain. He joined Torreal in 1990 and is currently a Senior Advisor and Member of the Family Counsel. Prior to joining Torreal, Mr. del Corro held various positions with Procter & Gamble in Spain, Belgium, the United Kingdom and Portugal. Mr. del Corro currently is a director of each of Arbarin Sicav, S.A. and Inversiones Naira Sicav, S.A. In the past five years, he has served as a member of the boards of directors of Universidad Europea de Madrid, S.L.U., Imagina Media Audiovisual, S.L. and Saba Infraestructuras. Mr. del Corro earned a law degree from the Universidad de Deusto and a business administration degree from ICADE Business School — Universidad Pontificia de Comillas. Mr. del Corro has been a Director since February 2017.
Michael J. Durham was the president and chief executive officer of Cognizant Associates (“Cognizant”), a consulting company he founded, from 2000 to 2012. Before founding Cognizant, Mr. Durham served as director, president and chief executive officer of The Sabre Group, Inc. (“Sabre”), then a NYSE-listed company providing information technology services to the travel industry. Mr. Durham held those positions from October 1996, the date of Sabre’s initial public offering, until October 1999. Prior to that, Mr. Durham worked at AMR Corp./American Airlines, serving as the senior vice president and treasurer of AMR Corporation and the senior vice president of finance and the chief financial officer of American Airlines
 
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until he assumed the position of president of Sabre. In the past five years, Mr. Durham has served as a member of the boards of directors of Travelport Worldwide Limited and Hertz Global Holdings, Inc., the holding company for The Hertz Corporation. Mr. Durham earned a B.A. from the University of Rochester and an M.B.A. from Cornell University. Mr. Durham has been a Director since April 2017.
Kenneth W. Freeman has served as the Chairman of our Board of Directors since January 2019. Mr. Freeman is Dean Emeritus and Professor of the Practice at Boston University Questrom School of Business. He was named Dean Emeritus in September 2018 after serving as the Allen Questrom Professor and Dean from August 2010 to September 2018. Mr. Freeman also has served as Vice President Resources at Boston University since April 2020. Mr. Freeman served as a senior advisor of KKR from August 2010 through December 2014. From October 2009 to August 2010, Mr. Freeman was a member of KKR Management LLC, the general partner of KKR & Co. L.P. Mr. Freeman was a member of the limited liability company that served as the general partner of KKR from 2007. He joined the firm as a managing director in May 2005. From May 2004 to December 2004, Mr. Freeman was the chairman of Quest Diagnostics Incorporated, and from January 1996 to May 2004, he served as the chairman and chief executive officer of Quest Diagnostics Incorporated. From May 1995 to December 1996, Mr. Freeman was the president and chief executive officer of Corning Clinical Laboratories, the predecessor company to Quest Diagnostics Incorporated. Prior to that, he served in various general management and financial roles with Corning Incorporated. Mr. Freeman currently is a director of Production Resource Group, LLC and the Center for Higher Ambition Leadership. In the past five years, Mr. Freeman has served as chairman of the board of trustees of Bucknell University, chairman of the Graduate Management Admission Council and chairman of Lake Region Medical, Inc. Mr. Freeman earned a BSBA from Bucknell University and an M.B.A. from Harvard Business School. Mr. Freeman has been a Director since April 2017.
George Muñoz has been a principal in the Washington, D.C.-based investment banking firm Muñoz Investment Banking Group, LLC since 2001. Mr. Muñoz also has been a partner in the Chicago-based law firm Tobin & Muñoz, LLC since 2002. Mr. Muñoz served as the president and chief executive officer of the Overseas Private Investment Corporation from 1997 to January 2001. Mr. Muñoz was the chief financial officer and assistant secretary of the U.S. Treasury Department from 1993 until 1997. Mr. Muñoz is a certified public accountant and an attorney. Mr. Muñoz served three terms as president of the Chicago Board of Education in the mid-1980s. Mr. Muñoz has taught courses in globalization at Georgetown University in Washington D.C. and is co-author of the book “Renewing the American Dream: A Citizen’s Guide for Restoring of Competitive Advantage.” Mr. Muñoz currently is a director of each of Marriott International, Inc. (and a member of its audit committee), Altria Group, Inc. and Anixter International, Inc. (and a member of its compensation committee), and a trustee of the National Geographic Society. Mr. Muñoz earned a B.B.A. from the University of Texas, a J.D. and a Master of Public Policy from Harvard University, and an LL.M. in Taxation from DePaul University. Mr. Muñoz has been a Director since March 2013 and the Chairman of the Audit Committee of our Board of Directors since August 2013.
Dr. Judith Rodin served as the president of The Rockefeller Foundation from March 2005 to January 2017. The foundation supports efforts to combat global social, economic, health and environmental challenges. From 1994 to 2004, Dr. Rodin served as the president of the University of Pennsylvania. Before that, Dr. Rodin chaired the Department of Psychology at Yale University, and also served as the dean of the Graduate School of Arts and Sciences and provost, and served as a faculty member at the university for 22 years. From 1997 to 2013, Dr. Rodin served as a member of the board of directors of AMR Corporation (and a member of its audit committee). From 2002 to 2018, Dr. Rodin served as a member of the board of directors of Comcast Corporation (and a member of its audit and compensation committees). From 2004 to 2017, Dr. Rodin served as a member of the board of directors of Citigroup Inc. (and a member of its compensation committee). Dr. Rodin currently serves as a member of the boards of directors of several private companies and advises and speaks globally on education, resilience, impact investing and philanthropy. Dr. Rodin earned a B.A. from the University of Pennsylvania and a Ph.D. from Columbia University. Dr. Rodin has been a Director since December 2013.
Eilif Serck-Hanssen has served as our Chief Executive Officer since January 2018 and took on the additional title of President in July 2019. From March 2017 to December 2017, Mr. Serck-Hanssen served as our President and Chief Administrative Officer, as well as our Chief Financial Officer. From July 2008 through March 2017, Mr. Serck-Hanssen served as our Executive Vice President and Chief Financial
 
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Officer. From February 2008 until July 2008, Mr. Serck-Hanssen served as chief financial officer and president of international operations at XOJET, Inc. In January 2005, Mr. Serck-Hanssen was part of the team that founded Eos Airlines, Inc., a premium airline, and until February 2008, Mr. Serck-Hanssen served as its executive vice president and chief financial officer. Prior to starting Eos Airlines, Mr. Serck-Hanssen served in several financial executive positions at US Airways, Inc. (now American Airlines, Inc.) and Northwest Airlines, Inc. (now Delta Airlines, Inc.), including serving as a senior vice president and treasurer of US Airways, Inc. Prior to joining the airline industry, Mr. Serck-Hanssen spent over five years with PepsiCo, Inc., in various international locations and three years with PricewaterhouseCoopers LLP (formerly Coopers & Lybrand Deloitte) in London. He is an Associate Chartered Accountant (ACA) and a member of the Institute of Chartered Accountants in England and Wales. Mr. Serck-Hanssen earned a B.A. from the University of Kent at Canterbury (United Kingdom), a B.S. from the Bergen University College (Norway) and an M.B.A. from the University of Chicago Booth School of Business. Mr. Serck-Hanssen has been a Director since January 2018.
Ian K. Snow is chief executive officer and a co-founding partner of Snow Phipps Group, LLC (“Snow Phipps”), a private equity firm. Prior to the formation of Snow Phipps in April 2005, Mr. Snow was a managing director at Ripplewood Holdings L.L.C., a private equity firm, where he worked from its inception in 1995 until March 2005. He currently serves as a director of each of the following private companies in which Snow Phipps holds an equity interest: Blackhawk Industrial Distribution, Inc., Brook &Whittle Limited, Cascade Environmental LLC, DecoPac, Inc., ECRM, LLC, Electric Guard Dog, LLC, FeraDyne Outdoors, LLC, HCTec, Inc., Ideal Tridon Holdings, Inc., Kele, Inc. and Teasdale Foods, Inc. From 1996 until 2007, Mr. Snow served as a member of the board of directors of Asbury Automotive Group, Inc. (and, from 2006 until 2007, a member of its audit committee). Mr. Snow earned a B.A. from Georgetown University. Mr. Snow has been a Director since July 2007.
Corporate Governance
Directors Designated by Certain of the Wengen Investors under the Wengen Securityholders Agreement
Our Board of Directors consists of 11 persons, three of whom are designated pursuant to the amended and restated securityholders agreement, dated February 6, 2017 (the “Wengen Securityholders Agreement”), among the Company, Wengen Alberta, Limited Partnership, an Alberta limited partnership and our controlling stockholder (“Wengen”), and certain other parties thereto. Under the Wengen Securityholders Agreement, each of the following is entitled to designate one of our directors so long as each owns at least 5,357,143 shares held through or acquired from Wengen: (i) Cohen Private Ventures, LLC (together with its affiliates, “CPV”), (ii) Kohlberg Kravis Roberts & Co. L.P. (together with its affiliates, “KKR”) and (iii) Sterling Capital Partners II, L.P., Sterling Capital Partners III, L.P., SP L Affiliate, LLC, Douglas L. Becker, our former Chairman and founder, Steven M. Taslitz, a Director of the Company, and each of their respective affiliates (together, the “Sterling Parties”). Mr. Cohen currently serves as the CPV-designated director, Mr. Cornog currently serves as the KKR-designated director and Mr. Taslitz currently serves as the Sterling Parties-designated director.
Pursuant to the Wengen Securityholders Agreement, in the event that any of CPV, KKR or the Sterling Parties ceases to own its respective minimum number of shares, the director designee selected by such party shall offer his or her resignation and such party shall no longer be entitled to designate a director to our Board of Directors. The Wengen Securityholders’ Agreement does not terminate upon the dissolution of Wengen.
In connection with the Mr. Taslitz’s decision not to stand for re-election to the Board of Directors, the Sterling Parties do not intend to designate a replacement to fill the vacancy created by Mr. Taslitz’s decision. The Sterling Parties, however, will retain the right to designate a director until they cease to beneficially own the requisite number of shares.
Director Independence
As discussed below, as a “controlled company,” we are not subject to the rules of The Nasdaq Stock Market (“Nasdaq”) requiring that our Board of Directors be comprised of a majority of independent directors. Our Board of Directors did, however, evaluate the independence of Dr. Rodin and Messrs. Carroll,
 
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del Corro, Durham, Freeman, Muñoz and Snow based on the Nasdaq definition of independence. The Nasdaq rules require that determinations regarding the independence of directors are made by the boards of directors of listed companies. The Nasdaq rules characterize an independent director as a director who is not an executive officer or employee of the company and who does not have a relationship that, in the opinion of the board of directors, would interfere with exercising independent judgment in carrying out a director’s responsibilities. The Nasdaq rules also contain certain categorical standards that serve as prohibitions against directors with certain specified relationships being considered independent.
After careful review of the information provided by each director whose independence was being evaluated and conducting discussions with each such director, and upon the recommendation of the Nominating and Corporate Governance Committee, our Board of Directors affirmatively determined that each of Dr. Rodin and Messrs. Carroll, del Corro, Durham, Freeman, Muñoz and Snow satisfied the Nasdaq independence standards for purposes of serving as a director on our Board of Directors.
Controlled Company Exception
Wengen controls a majority of the voting power of our outstanding common stock. As a result, we are a “controlled company” within the meaning of the Nasdaq corporate governance standards. Under the Nasdaq rules, a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain Nasdaq corporate governance standards, including:

the requirement that a majority of the board of directors consist of independent directors;

the requirement that we have a nominating/corporate governance committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities;

the requirement that we have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and

the requirement for an annual performance evaluation of the nominating/corporate governance and compensation committees.
We utilize, and intend to continue to utilize, certain of these exemptions. As of April 16, 2021, a majority of our Board of Directors consisted of independent directors; however, our Nominating and Corporate Governance Committee and Compensation Committee do not and will not consist entirely of independent directors, and such committees do not and will not be subject to annual performance evaluations. Accordingly, for so long as we are a “controlled company,” our stockholders will not have the same protections afforded to stockholders of companies that are subject to all of the Nasdaq corporate governance requirements.
Board Diversity
Except with respect to the directors designated pursuant to the Wengen Securityholders Agreement, as documented in the Company’s Corporate Governance Guidelines, the Nominating and Corporate Governance Committee takes into account a candidate’s experience, integrity, expertise, diversity, independence, ability to make independent analytical inquiries, understanding of the Company’s business environment and willingness to devote adequate time to Board duties in evaluating candidates who may be able to contribute to the Board as a whole — all in the context of an assessment of the perceived needs of the Board at that point in time. While the Company does not have a stand-alone diversity policy in place, and the Board does not make any particular weighting of diversity or any other characteristic when evaluating director nominees, the Board believes that its membership should reflect a diversity of experience, gender, race, ethnicity and age. As of our record date, 29 percent of our independent directors were women or racially or ethnically diverse individuals. We believe that our current directors possess diverse professional experiences, skills and backgrounds, in addition to, among other characteristics, high standards of personal and professional ethics and valuable knowledge of our business and our industry.
 
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Board Leadership Structure
Our Board of Directors currently is led by an independent director, Kenneth W. Freeman, Chairman of the Board. Our Bylaws and Corporate Governance Guidelines permit the roles of Chairman of the Board and Chief Executive Officer to be filled by the same or different individuals. This flexibility allows our Board of Directors to decide, from time to time, in its business judgment after considering relevant factors, including the specific needs of the business and what is in the best interest of the stockholders, whether the two roles should be combined or separated. Our Board of Directors believes that our stockholders are best served at this time by having an independent director serve as Chairman of the Board. Our Board of Directors believes that this leadership structure effectively allocates authority, responsibility and oversight between management and members of our Board of Directors. The Chief Executive Officer retains primary responsibility for the operational leadership and strategic direction of the Company, while the Chairman facilitates our Board’s oversight of management and promotes communication between senior management and Directors.
Board Attendance
During 2020, our Board of Directors held 15 meetings and its committees collectively held 31 meetings. All of our Directors attended at least 75% of Board and applicable committee meetings in 2020. Directors are expected to attend meetings of our Board of Directors, meetings of the committees upon which they serve and meetings of our stockholders absent cause. Each incumbent Director attended the annual meeting of stockholders in May 2020.
Board Committees
Our Board of Directors has four standing committees: an Audit Committee, a Compensation Committee, a Nominating and Corporate Governance Committee and a Committee on Education.
The Audit Committee meets with our independent auditors to, among other things,: (i) review whether the Company follows satisfactory accounting procedures and whether our internal accounting controls are adequate; (ii) review and discuss any critical audit matters identified by the independent auditor in connection with its audit; (iii) monitor audit and non-audit services performed by the independent auditors; (iv) approve fees charged by the independent auditors; and (v) perform all other oversight and review of Laureate’s financial reporting process. The Audit Committee also reviews the performance of the independent auditors and annually selects the firm of independent auditors to audit Laureate’s financial statements. The Audit Committee currently consists of Messrs. Muñoz, Durham and Freeman, who each have sufficient knowledge in financial and auditing matters under Nasdaq rules. Further, the Board of Directors has determined that Mr. Muñoz, who serves as the chairman of the Audit Committee, is an “audit committee financial expert.” In addition, the Board of Directors has affirmatively determined that each of Messrs. Muñoz, Durham and Freeman meets the definition of “independent director” for purposes of the Nasdaq rules and the independence requirements of Rule 10A-3 of the Securities and Exchange Act of 1934 (as amended, the “Exchange Act”) and the Nasdaq listing rules. There were 13 meetings of the Audit Committee during 2020.
The Compensation Committee reviews and advises our Board of Directors on the Company’s overall compensation philosophy, polices and plans, reviews and approves the compensation for the Chief Executive Officer and the other executive officers of Laureate and generally reviews benefits and compensation for all officers and employees. The Compensation Committee also administers our equity plans and approves grants of equity awards. The Compensation Committee currently consists of Messrs. Carroll, Cohen, Cornog, del Corro, Freeman and Muñoz, with Mr. Carroll serving as the current Chairman. There were eight meetings of the Compensation Committee during 2020.
The Nominating and Corporate Governance Committee develops and recommends to the Board of Directors criteria for selecting qualified director candidates, identifies individuals qualified to become members of the Board of Directors and recommends to the Board of Directors candidates for election to the Board of Directors, considers committee member qualifications, appointment and removal, recommends corporate governance principles, promotes and assesses the Company’s stated public benefit and activities as a public benefit corporation, and provides oversight in the evaluation of the Board of Directors and each committee. The Nominating and Corporate Governance Committee currently consists of Messrs. Cornog,
 
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Durham and Snow and Dr. Rodin. Mr. Cornog serves as the current Chairman of the Nominating and Corporate Governance Committee. There were seven meetings of the Nominating and Corporate Governance Committee during 2020.
The Committee on Education reviews and advises our Board of Directors regarding academic matters and policies, as well as new education products and technologies. The Committee on Education currently consists of Messrs. Freeman and Taslitz and Dr. Rodin, with Dr. Rodin serving as the current Chairwoman. There were three meetings of the Committee on Education during 2020.
Each of the above Committees has adopted a written charter, which has been approved by our Board of Directors. Copies of the charters for the Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee are available on our website at http://investors.laureate.net under “Leadership & Governance.”
Compensation Committee Interlocks and Insider Participation in Compensation Decisions
During 2020, no member of the Compensation Committee (i) had a relationship with us other than as a Director and, in certain cases, a stockholder or (ii) was (A) an officer or employee or a former officer, (B) a participant in a “related person” transaction or (C) an executive officer of another entity where one of our executive officers served on the Board of Directors. See “Certain Relationships and Related Party Transactions, and Director Independence” for a discussion of certain transactions to which affiliates of the members of the Compensation Committee were party.
Code of Conduct and Ethics
The Company has adopted a code of conduct and ethics (the “Code of Conduct”) that applies to all of its employees, including the Chief Executive Officer, Chief Financial Officer and Principal Accounting Officer. The Code of Conduct is available on our website at http://investors.laureate.net under “Leadership & Governance.” If the Company ever were to amend or waive any provision of the Code of Conduct that applies to the Company’s principal executive officer, principal financial officer, principal accounting officer or any person performing similar functions, the Company intends to satisfy its disclosure obligations, if any, with respect to any such waiver or amendment by posting such information on our website at
http://investors.laureate.net rather than by filing a Current Report on Form 8-K.
Board Oversight of Risk Management
Our Board of Directors’ role in risk oversight of the Company is consistent with the Company’s leadership structure, with the President and CEO and other members of our executive leadership team having responsibility for assessing and managing the Company’s risk exposure and our Board of Directors and its committees providing oversight in connection with those efforts. Our Board of Directors exercises these responsibilities regularly as part of its meetings and also through its committees, each of which examines various components of risk as part of its responsibilities. Our Board of Directors regularly reviews the Company’s risk management program and processes.
The Audit Committee, among other things, has responsibility for oversight of risk management and in connection therewith (i) reviews with our President and CEO and CFO any report on significant deficiencies in the design or operation of our internal controls that could adversely affect the Company’s ability to record, process, summarize or report financial data, any material weaknesses in our internal controls identified to the auditors, and any fraud that involves management or other employees who have a significant role in our internal controls; (ii) reviews and approves any related-party transactions, after reviewing each such transaction for potential conflicts of interests and other improprieties; (iii) provides oversight of the Company’s ethics and compliance activities; (iv) discusses with management and our independent auditor any correspondence with regulators or governmental agencies that raise material issues regarding the Company’s financial statements or accounting policies; (v) discusses with management the Company’s major financial risk exposures and the steps management has taken to monitor and control such exposures; and (vi) reviews with the Company’s chief legal officer and reports to our Board of Directors on litigation, material government investigations and compliance with applicable legal requirements and the Code of Conduct.
 
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The Compensation Committee, among other things, monitors and assesses the risks associated with the Company’s compensation programs and policies and consults with its independent compensation consultant and with management regarding such risks.
The Nominating and Corporate Governance Committee, among other things, (i) reviews on an ongoing basis the adequacy of the corporate governance principles applicable to the Company and (ii) in consultation with the Audit Committee, reviews the Code of Conduct periodically and recommends such changes to such Code of Conduct as the Committee shall deem appropriate, and adopts procedures for monitoring and enforcing compliance with such Code of Conduct.
The Committee on Education, among other things, reviews on an ongoing basis and monitors risk associated with accreditation, academic quality, program development, student experience and outcomes, faculty development and technology infrastructure with respect to of all of the Company’s institutions.
In March 2020, the Board of Directors created a special Operations Advisory Committee to oversee, monitor and assess the impacts and risks of the COVID-19 pandemic on the Company and its stakeholders, and to assess the actions taken and to be taken by the Company in response to the pandemic. The Operations Advisory Committee met frequently for several months, after which management updates regarding COVID-19 were provided again directly to the Board of Directors.
The Company’s executive leadership team is responsible for assessing and managing the Company’s various exposures to risk on a day-to-day basis, including the creation of appropriate risk management policies. The Company has developed a consistent, systemic and integrated approach to risk management, including the risk management program, to help determine how best to identify, manage, and mitigate significant risks throughout the Company. Management regularly reports to our Board of Directors and its committees on a variety of risks, including strategic, operational, financial, legal, regulatory and cybersecurity risks, as well as the risks to the Company, its business and its employees due to the COVID-19 pandemic, and the efforts of management to address and mitigate such risks.
Environmental, Social and Governance Matters
For more than 20 years, we have remained committed to making a positive impact in the communities we serve, by providing accessible, high-quality undergraduate, graduate and specialized degree programs. We believe in the power of education to change lives. We know that when our students succeed, countries prosper and societies benefit.
In 2015, we redomiciled in Delaware as a public benefit corporation as a demonstration of our long-term commitment to our mission to benefit our students and society. In 2017, we became the first public benefit corporation publicly listed on any stock exchange in the world. We continually strive to achieve the highest standards of verified social and environmental performance, public transparency and legal accountability that balances profit and purpose.
You can read more about our extraordinary students, faculty and staff who are using their talent and passion to serve, uplift and empower their communities on our corporate website at www.laureate.net/impact.
Delinquent Section 16(a) Reports
Based on a review of reports filed with the Securities and Exchange Commission (the “SEC”) by our directors, executive officers and beneficial owners of more than 10% of our Class A common stock regarding their ownership and transactions in our common stock and written representations from those directors and executive officers, we believe that each director, executive officer and beneficial owner of more than 10% of our Class A common stock has filed timely reports under Section 16(a) of the Exchange Act during 2020, except that each of Messrs. Cohen and del Corro filed a Form 4 late relating to a grant of common stock and restricted stock units as part of our director compensation program. In addition, a timely Form 3 was not filed by Mr. Cohen in connection with his initial holdings of the Company’s common stock in connection with the Company’s initial public offering.
 
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EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
This Compensation Discussion and Analysis provides an overview of our compensation philosophy, objectives, material elements of compensation, and the factors and process used in making compensation decisions with respect to our fiscal year 2020 named executive officers (“NEOs”) listed below.
NEOs
Title
Eilif Serck-Hanssen President and Chief Executive Officer
Jean-Jacques Charhon(1) Executive Vice President and Chief Financial Officer
Timothy Grace Chief Human Resources Officer
Paula Singer(2)
Chief Executive Officer of Walden and Laureate Online Partners
Richard Sinkfield III(3) Chief Legal Officer and Chief Ethics & Compliance Officer
(1)
Mr. Charhon resigned from his position with the Company effective April 1, 2021.
(2)
Ms. Singer was designated as an executive officer for a portion of 2020.
(3)
Mr. Sinkfield was appointed Chief Legal Officer and Chief Ethics & Compliance Officer effective July 17, 2020.
The discussion regarding the 2020 compensation of our NEOs is divided into four sections.
Page:
Executive Summary
14
Compensation Governance
15
Executive Compensation Program
16
Policies and Other Considerations
25
Executive Summary
The primary focus of our compensation philosophy is to pay for performance. We believe that our programs are effectively designed, align well with the interests of our stockholders and are instrumental to achieving our business strategy and key financial objectives.
On January 27, 2020, we announced that our Board of Directors had authorized the Company to explore strategic alternatives for each of its businesses to unlock stockholder value (the “Strategic Alternative Process”). During 2020 and early 2021, we made significant progress on our strategic review, having completed the sales of our business units in Chile, Honduras, Malaysia and Australia & New Zealand, and signed transaction agreements for the divestiture of Walden University and our operations in Brazil.
In connection with the Strategic Alternative Process, in January 2020, the Compensation Committee recommended and our Board of Directors approved certain changes to the Company’s compensation programs for the NEOs with respect to incentive-based compensation, severance and retention. Additionally, in March 2021, the Compensation Committee awarded special one-time discretionary bonuses to Messrs. Serck-Hanssen and Sinkfield to recognize their significant contributions in 2020 to the Strategic Alternative Process. For additional information regarding these compensation changes, see “—Severance Pay Arrangements and Retention/Bonus Transaction Agreements” and “—Discretionary Cash Bonuses.”
Further, as a result of uncertainty that existed as to the extent and duration of the COVID-19 pandemic and as part of measures taken to reduce expenses and preserve liquidity, the Company’s executive leadership team volunteered to temporarily reduce their base salaries for six months in 2020, other than Mr. Sinkfield, who was newly appointed as an executive officer in July 2020. Additionally, in response to the impact of the pandemic, in September 2020, the Compensation Committee approved modifications to the 2020 annual incentive plan program in order to encourage continued performance and retention. For additional
 
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information regarding the compensation changes taken in light of the COVID-19 pandemic, see “—Base Salary” and “—Annual Incentive Plan.”
In addition to executing our business plan to achieve strategic and operational results, such as driving financial performance, expanding margins, improving liquidity, and maximizing academic quality and successful student outcomes, the most critical strategic priorities for our NEOs during 2020 were to:

Deliver on key operating metrics despite the COVID-19 pandemic and divestiture timing challenges;

Successfully respond to the operational challenges resulting from the COVID-19 pandemic by transitioning all programs from face-to-face learning to online learning;

Taking into account the COVID-19 pandemic, implement initiatives across corporate and operating teams, resulting in cost savings and streamlining of processes;

Improve our organizational model to promote innovation, leadership and accountability within teams; and

In connection with the Strategic Alternative Process, execute global asset divestitures to unlock stockholder value.
Highlighted below are some of the key governance and design features with respect to our executive compensation programs for 2020:
What we do:
What we do NOT do:
Align pay with performance Guarantee bonus payouts
Award annual incentive compensation subject to the achievement of pre-determined performance goals Provide excessive executive perquisites
Incorporate multiple performance metrics within our variable pay components Award equity grants with “single-trigger” accelerated vesting
Set challenging performance objectives Accelerate vesting of equity awards for retirement
Incorporate payout caps for performance-based incentives Provide for change in control tax gross-ups
Consider guidance from an independent compensation consultant Provide supplemental executive retirement or medical plans
Maintain stock ownership guidelines for executive officers Offer payment of dividends for unearned equity awards
Maintain an executive severance policy Allow any hedging or pledging transactions
Compensation Governance
Pay Governance Process
The Compensation Committee is actively engaged in the compensation process to ensure appropriate compensation governance. The majority of compensation earned by our NEOs is a function of corporate and individual financial and operational performance against pre-established goals. Our executive officers have line of sight and considerable impact on the achievement of these goals. Our CEO, management and the Compensation Committee, in consultation with the Compensation Committee’s independent compensation
 
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consultant, ensure thorough oversight regarding the amount and form of executive compensation via the following pay governance processes:
Role
Management
Chief
Executive
Officer
Compensation
Committee
Independent
Compensation
Consultant
Set CEO Target Compensation
Approve
Advise
Set Named Executive Officer Target Compensation
Recommend
Approve
Advise
Design Cash and Equity Incentive Programs (Metrics, Targets and Award Opportunities)
Develop
Recommend
Approve
Advise
Authorize Equity Grants and Cash Incentive Payouts
Recommend
Review
Approve
Review
Select and Review Peer Group(1)
Develop
Recommend
Approve
Develop
(1)
As discussed further below, the Company has historically performed annual competitive benchmarking against a peer group. In 2020, however, the Company did not do so given that NEO compensation was not increased in light of the Strategic Alternative Process.
Independent Compensation Committee Consultant
In order to obtain a fresh perspective on strategies that best align company performance and stockholder value with executive compensation, in September 2019, the Compensation Committee retained Meridian Compensation Partners, LLC (“Meridian”) as its new independent compensation consultant for 2020 compensation decisions. Meridian reports directly to the Compensation Committee and does not provide any other services to the Company. Upon assessment of independence pursuant to SEC rules, the Compensation Committee concluded that no conflict of interest arose from this relationship. In its capacity as the Compensation Committee’s independent compensation consultant, Meridian provided insight to the Compensation Committee on certain regulatory requirements and concerns of our investors, assisted with the development of conceptual designs for equity and cash incentive compensation programs and provided to the Compensation Committee relevant alternatives to consider when making compensation decisions for the CEO and other NEOs, both in light of the Strategic Alternative Process and the COVID-19 pandemic.
Consideration of Non-Binding Advisory Stockholder Vote on Compensation
In making executive compensation determinations, the Compensation Committee also considers the results of the non-binding, advisory stockholder votes on our executive compensation program. Our stockholders approved our executive compensation program by over 99% of votes cast on the say-on-pay proposal in our 2020 Proxy Statement. The Compensation Committee is mindful of our stockholders’ endorsement of the Compensation Committee’s past decisions and policies and has maintained its general approach to executive compensation for decisions made to date. The Compensation Committee will continue to consider the results from this year’s and future advisory stockholder votes regarding our executive compensation program.
Executive Compensation Program
Compensation Philosophy, Strategy and Principles
We design motivational incentives for our leaders to align their interests with three main priorities that are also important to our investors:

value creation and delivery through superior operating performance;

a clear emphasis on long-term organizational financial stability and viability; and

securing and safeguarding the talent to manage and continue to achieve our stated business objectives.
 
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We use a diverse set of equity and cash incentives realizable upon achievement against performance targets. Each incentive is selected to encourage the right behaviors and results for our success and that of our students in the near- and long-term. Additionally, our program discourages our executives from taking excessive risk and encourages them to model, in an ethical way, our values, culture and mission, which is to expand access to quality higher education to make the world a better place.
The following four guiding principles further shape our executive compensation program:

target compensation is designed to be competitive and reflective of the competitive value of the job in the marketplace;

the majority of actual compensation is at risk, with no guaranteed payout;

levels of pay at risk are correlated with increasing levels of responsibility and impact; and

pay must simultaneously motivate ethical decision making, educational excellence, acting with integrity and exceptional performance.
NEO Pay
Target compensation levels for our executive officers are not dictated by any specific percentile of the market. Rather, the Compensation Committee considers such data in addition to the following factors to establish target pay levels:

the need to attract and retain high-caliber talent;

the degree to which each executive officer has consistently delivered results;

internal pay equity;

each executive’s tenure, skills and experience;

expected contributions of each executive;

future potential; and

achievement of previously established corporate performance objectives.
Compensation Peer Group
Historically, the Compensation Committee used data derived from a peer group, developed in part by the independent compensation consultant, to inform its decisions about overall compensation, compensation elements, optimum pay mix and the relative competitive landscape of our executive compensation program. In 2020, in light of the Strategic Alternative Process, the Compensation Committee determined not to increase NEO compensation and thus did not perform competitive benchmarking against a defined peer group, although the Compensation Committee could determine to resume competitive benchmarking in the future.
Executive Compensation Pay Components
Fixed vs. Variable Pay
Laureate’s executive compensation program is predominantly composed of three main components: base salary, our Annual Incentive Plan (“AIP”) and our long-term equity incentive plan. To ensure alignment with our pay for performance philosophy, we focus our executive compensation program on variable pay while still providing competitive fixed base salaries to promote both short-term and long-term retention and performance.
 
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Pay Mix
The graphs below show the Annual Total Target Compensation for our CEO and Average Annual Target Compensation for other NEOs (excluding our CEO) for 2020:
[MISSING IMAGE: tm212461d1-pc_ceoneobw.jpg]
Values above do not include special equity or cash awards that were given as a part of new hire, promotional, retention or other agreements.
Base Salary
The base salary of our NEOs is intended to provide a competitive fixed element of income to reward responsibility, experience, skills and competencies relative to the market, while effectively managing our overall fixed expenses. Annual salary increases, if any, are reviewed based on performance from the prior year by the Compensation Committee.
In March 2020, the Compensation Committee reviewed the base salary of each of our NEOs (other than Mr. Sinkfield as explained below) and determined, in light of the Strategic Alternative Process, to maintain the base salary of each NEO at their 2019 levels, representing the second year of no salary increase for Messrs. Serck-Hanssen, Charhon and Grace.
Subsequently, at management’s request as part of the Company’s efforts to reduce costs and preserve liquidity in response to the COVID-19 pandemic, the Committee approved certain voluntary executive salary reductions, effective May 16, 2020, for a total of six months. Specifically, Mr. Serck-Hanssen agreed to a 20% temporary reduction in base salary, and Messrs. Charhon and Grace and Ms. Singer agreed to a 15% temporary reduction in base salary, in each case for a six-month period.
On July 17, 2020, Mr. Sinkfield was appointed to the position of Chief Legal Officer and Chief Ethics & Compliance Officer and received a promotion increase in base salary to $420,000 as of such date.
Annual Incentive Plan
Our AIP is intended to recognize measures of overall company performance and profitability. Both individual and organizational targets are designed to be challenging, but attainable.
The AIP Target Amount for each NEO is based on a percentage of base salary. The actual AIP payment depends on both organizational and individual performance and is calculated using the following formula:
[MISSING IMAGE: tm212461d1-fc_aiptargetbw.jpg]
 
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The organizational multiplier for executives with corporate responsibility is based on Laureate’s overall business results. The organizational multiplier for executives with regional responsibility reflects an average of their regional results and Laureate’s overall business results.
The four selected metrics used for the AIP, as defined in the table below, focus executives on the financial sustainability of the organization: Adjusted Financing EBITDA, Unlevered Free Cash Flow, Revenues and New Enrollment (an education industry metric).
Financial Metric
Definition
Adjusted Financing EBITDA

Similar to Adjusted EBITDA (defined below), Adjusted Financing EBITDA excludes the impact of foreign currency exchange rates as compared to the spot exchange rates assumed in our internal budgets and certain extraordinary or nonrecurring items, which the Compensation Committee believes are not indicative of ongoing results. The Compensation Committee believes that Adjusted Financing EBITDA is an important measure in evaluating management’s success in positioning the Company for sustainable profitability, a primary goal.

Adjusted EBITDA is defined as income (loss) from continuing operations before income taxes and equity in net income of affiliates, adding back the following items: (loss) gain on sales of subsidiaries, net; actual foreign currency exchange gain (loss), net; other (expense) income, net; gain (loss) on derivatives; loss on debt extinguishment; interest expense; interest income; depreciation and amortization expense; loss on impairment of assets; share based compensation expense; and expenses related to our Excellence in Process enterprise wide initiative to optimize and standardize our processes to enable sustained growth and margin expansion.
Unlevered Free Cash Flow

Operating cash flow less capital expenditures, adding back cash interest (a non GAAP measure).
Revenues

Fees generated from our provision of educational services and products before any costs or expenses are deducted. Year-to-year growth in revenues indicates a strong base for future growth.
New Enrollment

The number of students who enroll in an academic program for the first time or students who return to their academic program after an absence of at least two years. New enrollment indicates that there is continued interest in the Laureate International Universities and can be a leading indicator of future revenue levels.
While each of Revenues and New Enrollment is critical to our ability to grow over the long term, Adjusted Financing EBITDA and Unlevered Free Cash Flow are weighted the heaviest, as shown in the below table, because of the Compensation Committee’s focus on sustainable corporate and regional profitability and liquidity. The 2020 AIP was designed so that a multiplier would be applied to the respective weight of each metric, which proportionally reduced or increased a participant’s award depending upon the extent to which the goal for each metric was missed or exceeded, as applicable, and as set forth in the table below. For performance percentages between the levels set forth in the table, the resulting payout percentage is interpolated on a linear basis.
Levels of Performance
Percent
Payout
Performance
Against Plan
Adjusted
Financing
EBITDA
Unlevered
Free
Cash Flow
Revenues
New
Enrollments
Weight
30% 30% 20% 20%
Maximum
200%
Percent of Target
110% 120% 105% 115%
Target
100%
Value for 100% Payout
Target
Target
Target
Target
Threshold
0%
Percent of Target
90% 80% 95% 85%
 
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Generally, our overall incentive awards are capped at 200% of target; however, the Compensation Committee has discretion to adjust such caps based on individual performance for the year. Considerations affecting evaluation of individual performance may include extraordinary economic or business conditions, the state of the business, deviations from forecasted business targets that are unrelated to the executive’s performance and other external factors that, in the CEO’s judgment (or the Compensation Committee’s judgment in the case of the CEO’s individual performance), may have affected our financial and operating results. The Compensation Committee also considers constructive strategic issues that have long-term consequences, such as positive student outcomes like job placement and on-time graduation, achieving the highest academic and operational standards and regulatory compliance. The NEOs also are rewarded, through the individual performance component, for important strategic contributions, such as building succession plan pipelines and high-performance cultures.
Because the Compensation Committee’s intent in designing the 2020 AIP was for the NEOs to focus on improved profitability and maintaining internal controls, the 2020 AIP initially approved by the Compensation Committee in March 2020 provided that: (i) had we achieved less than 90% of the Adjusted Financing EBITDA goal, none of the NEOs would have received any AIP award, (ii) the individual performance multiplier of 20% was capped at 200% achievement and could not exceed the organizational multiplier, (iii) had a deficiency or material weakness in internal controls under an NEO’s responsibility been identified, such NEO’s AIP award could have been reduced, and (iv) if the Company achieved below the threshold percentage for any metric, then the portion of the AIP award dependent on such metric would be entirely deducted from an NEO’s total 2020 AIP award opportunity.
As a result of the impact of the COVID-19 pandemic on the Company’s business, the Compensation Committee determined that the existing incentive targets for 2020 had become unrealistic to achieve and that modifications to the program were necessary in order to motivate and retain employees, including the NEOs. Accordingly, in September 2020, the Compensation Committee approved the following modifications to the 2020 AIP while maintaining the original targets: (i) lowered thresholds for each metric in the AIP, as follows: Adjusted Financing EBITDA — 80%, Unlevered Free Cash Flow — 70%, Revenues — 85%, and New Enrollment — 75%; (ii) eliminated the requirement of achieving 90% minimum Adjusted Financing EBITDA as a precondition for funding any bonus payment, and (iii) capped payouts at 100% of target regardless of performance above the originally set targets. The Online and Partnerships business was excluded from such modifications given the limited COVID-19 impact in that business. The Compensation Committee believed that this approach was most consistent with the original intent of the AIP while ensuring that the program still motivated employees for the remainder of the year and through the bonus payment date, thereby providing continued focus on performance.
Certain Adjustments in Measuring Performance
In measuring financial performance for purposes of our incentive compensation programs, the Compensation Committee focuses on the fundamentals of the underlying business performance and adjusts for items that are not indicative of ongoing results. For example, Adjusted Financing EBITDA, Unlevered Free Cash Flow (for the corporate level metric) and revenue measures are expressed in constant currencies (i.e., excluding the effects of foreign currency translation) because we believe that period-to-period changes in foreign exchange rates can cause our reported results to appear more or less favorable than business fundamentals indicate. The Compensation Committee’s approach to other types of adjustments is subject to pre-established guidelines, including materiality, and is designed to provide clarity and consistency as to how it views the business when evaluating performance. Charges and credits that may be excluded from Adjusted Financing EBITDA include strategic items (such as restructurings, acquisitions and divestitures) and regulatory items (such as changes in law or tax or accounting rules), and charges and credits that may be excluded from Adjusted Financing EBITDA and Unlevered Free Cash Flow include certain extraordinary and non-recurring items (such as natural disasters or social unrest).
2020 AIP Outcomes
At the end of each fiscal year when results are available, all organizational multipliers, the individual performance multipliers of each NEO and the overall annual incentive award for each NEO are reviewed and approved by the Compensation Committee.
 
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AIP payments reflect the Compensation Committee’s assessment of each NEO’s individual performance and our overall performance when measured against the goals established by the Compensation Committee for 2020 of Adjusted Financing EBITDA, Unlevered Free Cash Flow, revenues, new enrollments and individual objectives. In assessing 2020 performance under the AIP, the Compensation Committee took into account the impact of certain notable items, including the impact of the COVID-19 pandemic and transaction expenses relating to divestitures.
For the corporate NEOs, Messrs. Serck-Hanssen, Charhon, Grace and Sinkfield, 2020 AIP awards were measured, in part, based on Corporate level performance results. The following table contains the goal for each operational metric used to determine the organizational multiplier component of the AIP awards earned in respect of 2020 performance by the corporate NEOs.
Performance Metric
Target
Weighted
Target as
% of Award
Weighted
Target as
% of Corporate
Component
2020
Actual
Performance
2020
Actual
Payout %
Organizational multiplier metrics
Adjusted Financing EBITDA*
$ 711.4 24% 30% $ 704 28%
Unlevered Free Cash Flow*
$ 370.4 24% 30% $ 406 40%
Revenues*
$ 3,231.6 16% 20% $ 3,052 13%
New Enrollments
522,708 16% 20% 450,000 9%
80% 100% 89.5%
*
In millions
For Ms. Singer, the organizational multiplier component of the 2020 AIP award was measured based 50% on corporate level performance results and 50% on the performance results of the business unit for which she had responsibility, Online and Partnerships. The following table contains the goal for each operational metric used to determine the Online and Partnerships component of the organizational multiplier for the AIP awards earned in respect of 2020 performance by Ms. Singer.
Performance Metric
Target
Weighted
Target as
% of Award
Weighted
Target as
% of Corporate
Component
2020
Actual
Performance
2020
Actual
Payout %
Organizational multiplier metrics
Adjusted Financing EBITDA*
$ 167 24% 30% $ 187 54%
Unlevered Free Cash Flow*
$ 155 24% 30% $ 204 60%
Revenues*
$ 619 16% 20% $ 639 26%
New Enrollments
32,000 16% 20% 32,000 19%
80% 100% 159%
*
In millions
In determining the 2020 AIP payments, the Compensation Committee considered 2020 results with respect to each performance metric and 2020 results as a percentages of the applicable corporate goal and the approved reduced minimum thresholds — in particular, that the Company (i) significantly exceeded the target for Unlevered Free Cash Flow, mainly due to proactive cost saving initiatives, and (ii) despite the COVID-19 pandemic impacts, only slightly missed the target for Adjusted Financing EBITDA. Further, the individual multiplier for each of the NEOs as described below could not exceed the organizational multiplier and, accordingly, was capped at 89.5%, except for Ms. Singer. For Ms. Singer, her individual multiplier could not exceed 159%, which was her organizational multiplier as described above. The Compensation Committee believes that the below-target 2020 payouts for Corporate NEOs, as shown in the table below, appropriately balance the extraordinary achievements of management in navigating through the pandemic and maintaining liquidity, as well as the challenging environment in which the Company operated for most of 2020. The
 
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table below provides information relating to the 2020 target and actual AIP payments for each of the NEOs, both in dollar amounts and as a percentage of year-end base salary.
Executive
Bonus
Salary
Amount ($)
AIP
Target
Award as
% of 2020
Year-End
Salary
Target 2020
AIP Award
($)
Approved
Individual
Performance
Multiplier
Actual
Award
($)
Actual
Award as a
% of
Target
Award
Eilif Serck-Hanssen
850,000 130% 1,105,000 89.5% 988,975 89.5%
Jean-Jacques Charhon
600,000 100% 600,000 89.5% 537,000 89.5%
Timothy Grace
500,000 80% 400,000 89.5% 358,000 89.5%
Paula Singer
459,000 100% 459,000 150% 594,644 129.55%
Richard Sinkfield III(1)
420,000 61% 258,216 89.5% 231,103 89.5%
(1)
For Mr. Sinkfield, his bonus was prorated based on his July 17, 2020 promotion as follows: for the period of time prior to his promotion, based 50% on the organizational multiplier and 50% on his individual performance, and, for the period of time after his promotion, based 80% on the organizational multiplier and 20% on his individual performance.
Discretionary Cash Bonuses
The Compensation Committee believes that Messrs. Serck-Hanssen and Sinkfield made significant contributions in 2020 to the Strategic Alternative Process resulting in completed sales of our business units in Chile, Honduras, Malaysia and Australia & New Zealand, and signed transaction agreements for the divestitures of Walden University and our operations in Brazil. In order to recognize these important achievements, efforts and leadership, in March 2021, the Compensation Committee awarded special one-time discretionary bonuses to Mr. Serck-Hanssen in the amount of $1,000,000 and to Mr. Sinkfield in the amount of $333,333.
Long-Term Incentive Plan: Stock-Based Compensation
The Laureate Education, Inc. Amended and Restated 2013 Long-Term Incentive Plan (as amended and restated from time to time, the “2013 Plan”) was established for the benefit of officers, employees and certain directors of the Company and its subsidiaries, as well as for others performing consulting or advisory services for the Company. The purpose of the 2013 Plan has been to provide incentives that will attract, retain and motivate high performing officers, employees, directors and consultants by providing them with appropriate incentives to maximize stockholder value and contribute to the long-term success of the Company. We have granted long-term equity awards under the 2013 Plan consistent with the view that stock-based incentive compensation opportunities play a key role in our being able to recruit, motivate and retain qualified individuals. While our compensation packages generally include a number of different components, we believe that equity compensation is key to linking pay to performance and aligning executives with stockholders, as it encourages employees to work toward our success and aligns their interests with those of our stockholders by providing them with a means by which they can benefit from increasing the value of the Company’s stock.
Our stock-based compensation is intended to be a significant portion of NEO compensation to create a link between executive compensation and our long-term performance, thereby creating alignment between executive and stockholder interests. The Compensation Committee believes that the best way to align compensation of our NEOs with long-term growth and profitability is to design long-term incentive compensation that is, to a great degree, dependent upon Company performance.
Historically, our annual grant program used a mix of performance share units (“PSUs”), restricted stock units (“RSUs”) and stock options. As a result of the Strategic Alternative Process, the Compensation Committee determined not to grant stock options in 2020 and to focus instead on PSUs and RSUs, as discussed below.
 
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50% — PSUs:   PSUs vest in equal annual installments over a three-year period, subject to achievement of annual Adjusted Financing EBITDA targets. For 2020, the Adjusted Financing EBITDA target was $745,519,000. All unvested PSUs are forfeitable upon termination of employment prior to vesting. PSUs do not provide voting or dividend rights until the units are vested and settled in shares of our Class A common stock.

50% — RSUs:   Time-based RSUs vest in three equal annual installments, subject to continued employment on each applicable vesting date. All unvested RSUs are forfeitable upon termination of employment prior to vesting. RSUs do not provide voting or dividend rights until the units are vested and settled in shares of our Class A common stock.
We believe that the use of both performance-based and time-based awards creates a strong focus on executive motivation, performance and retention. For additional information on all 2020 and outstanding equity grants to the NEOs, see the “Grants of Plan-Based Awards” table and the “Outstanding Equity Awards at Fiscal Year-End” table under “Executive Compensation Tables.”
In September 2020, the Compensation Committee approved an additional equity award with a grant date fair value of approximately $58,000 for Mr. Sinkfield in connection with his promotion to Chief Legal Officer and Chief Compliance & Ethics Officer. The terms of the additional equity award, which included RSUs and PSUs and had a grant date of September 11, 2020, were substantially similar to terms of Mr. Sinkfield’s 2020 annual grants.
Our NEOs also may receive inducement grants at the time of hire or grants for recognition and retention, promotions or other purposes. The equity award value, vesting requirements and type of award for these ad hoc grants may vary depending on the purpose of the grant. Except for Mr. Sinkfield, as described above, no NEO received any such grant in 2020.
In March 2021, the Compensation Committee determined, based on the Company’s 2020 audited consolidated financial statements, that the applicable 2020 performance goals based on Adjusted Financing EBITDA had been achieved, taking into account permitted adjustments, including for the impact of COVID-19, for those PSUs that were granted on an annual basis to certain executives, including the NEOs (the “Annual PSUs”). Accordingly, the 2020 tranche of the Annual PSUs vested and were settled in shares of our Class A common stock in March 2021.
Other Compensation
Non-Qualified Deferred Compensation Plan
We also maintain a deferred compensation plan (the “DCP”), which is intended to promote executive retention by providing a long-term savings opportunity on a tax-efficient basis. See “—Executive Compensation Tables—2020 Nonqualified Deferred Compensation” for additional information.
Benefits
We provide various employee benefit programs to our NEOs, including medical, dental, life/accidental death and dismemberment, and disability insurance benefits, and our 401(k) Retirement Savings Plan. These benefit programs are generally available to all of our U.S.-based full-time employees. Our NEOs also were provided with individual supplemental executive long-term disability coverage in 2020. Through the Company’s Group Pinnacle Care plan, which is offered to all U.S.-based full-time employees, our NEOs may participate in the Pinnacle Care Health Consulting Service, a health advisory firm that provides advice and other assistance with health care decisions and gives them access to a personal health advisor with around the clock service. These benefits are provided to the NEOs to eliminate potential distractions from performing their regular job duties. We believe that the cost of these programs is counterbalanced by an increase in productivity by the executives receiving access to them. In connection with offers of employment, the Company may provide relocation benefits to executives, including the NEOs.
Severance Pay Arrangements and Retention/Bonus Transaction Agreements
Severance Policy Guidelines
In March 2018, the Compensation Committee approved a general severance policy for all employees, including our NEOs, with a goal of providing consistent decisions regarding severance payment amounts
 
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and timing of payments upon termination of executive and non-executive employees. In July 2019, the Company established the Laureate Education, Inc. Severance Policy for Executives (the “Executive Severance Plan”), which forms part of the general severance policy. The Executive Severance Plan, which applies to all NEOs, provides severance benefits in connection with a “qualifying termination,” which is defined to mean a termination of employment: (i) prior to a “change in control,” by the Company other than for “cause;” and (ii) on or within the 12-month period after a “change in control,” by the Company other than for “cause” or by the executive officer for “good reason.” For a detailed description of the Executive Severance Plan, see “—Executive Compensation Tables—Potential Payments upon Termination or Change in Control.”
Messrs. Serck-Hanssen and Charhon Offer Letters.
At the time Mr. Serck-Hanssen was hired as our Executive Vice President and Chief Financial Officer in 2008, the Compensation Committee thought it appropriate to authorize Mr. Serck-Hanssen’s written offer of employment to include a provision entitling Mr. Serck-Hanssen to a lump sum severance benefit in the event that we terminate his employment without cause.
At the time Mr. Charhon was hired, the Compensation Committee determined that it was appropriate to authorize a written offer of employment that included a provision entitling him to a severance benefit in the event of a termination of employment without cause and other than for disability.
NEO Retention and Transaction Bonus Agreements
In January 2020, the Compensation Committee recommended, and our Board of Directors approved, certain changes to the Company’s compensation programs in connection with the Strategic Alternative Process, which changes were finalized by the Compensation Committee in February 2020. The changes were implemented through individual letter agreements that the Company entered into with the NEOs in March 2020 and by amendment to the Executive Severance Plan.
In connection with these changes, the NEOs are eligible to receive a pro rata annual bonus (based on target) for the year of a qualifying termination of employment on or following a change in control under the Executive Severance Plan. In addition, if an NEO is terminated without “cause” or resigns with “good reason” either prior to the completion of the Strategic Alternative Process or within 12 months following the end of the Strategic Alternative Process, the NEO will receive the same benefits (including the pro rata target annual bonus referred to in the prior sentence) that the NEO would have received upon a qualifying termination of employment on or following a change in control under the Executive Severance Policy.
In addition, if a participant under the 2013 Plan, including an NEO, is terminated without “cause” or resigns with “good reason” either prior to the completion of the Strategic Alternative Process or within 12 months following the end of the Strategic Alternative Process, then all outstanding equity awards then held by the participant under the 2013 Plan will receive the same treatment as such equity awards would have received upon a qualifying termination on or following a change in control (i.e., full accelerated vesting of unvested equity awards).
Finally, in connection with these changes, the Compensation Committee implemented a cash retention bonus program in which the NEOs, other than Ms. Singer, who is instead eligible for the Singer Retention/Transaction Bonus (as defined below), are eligible to participate. The retention bonus under the program is contingent upon achieving key performance targets. The retention bonus is payable on the earlier of a change in control or the date on which our Board of Directors determines that the Strategic Alternative Process is complete, and the amount of the retention bonus will be determined based on the NEO’s base salary as of the date of the retention letters, the length of the Strategic Alternative Process and the total value to stockholders. The target amount of the cash retention bonus is 75% of the NEO’s base salary as of the date of the retention letters. For Messrs. Serck-Hanssen and Grace, the actual retention bonus amount will be adjusted up or down in a range of 0% to 200% of target based generally on total return to the Company’s stockholders and on the earlier of when our Board of Directors determines that the Strategic Alternative Process is ended and the date of the termination of the NEO (the “Valuation Date”) occurs. For Mr. Sinkfield, 50% of the actual retention bonus amount will be adjusted up or down in a range of 0% to 200% of target based generally on total return to the Company’s stockholders and when the Valuation Date occurs and 50% will be paid based on a prorated portion of target based on when the Valuation Date
 
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occurs. Under this program, if an NEO is terminated without “cause” or resigns with “good reason” before the end of the Strategic Alternative Process, then the NEO would be eligible to receive a lump sum pro rata award. Mr. Charhon was excluded from this discussion given that he is not eligible for a cash retention bonus due to his resignation from his position effective April 1, 2021, and such resignation was not with “good reason”.
Ms. Singer is eligible for a regional retention/transaction bonus, under which a special bonus is payable upon the earlier of July 31, 2021 and the date of the closing of a transaction that results in the Company having sold all or substantially all of its interest in or assets of the Company’s Walden segment (such bonus, the “Singer Retention/Transaction Bonus”). For Ms. Singer, if such a transaction occurs prior to July 31, 2021, she will receive a bonus equal to 75% of her 2019 base salary (the “Singer Bonus Amount”). If such a transaction does not occur prior to July 31, 2021, Ms. Singer will receive a bonus equal to 50% of the Singer Bonus Amount. Ms. Singer’s entitlement to the Singer Retention/Transaction Bonus is contingent upon her continued employment through the date of such a transaction or July 31, 2021, as applicable.
See “—Executive Compensation Tables—Potential Payments upon Termination or Change in Control” for a discussion of the severance benefits available to our NEOs.
Policies and Other Considerations
Stock Ownership Guidelines
We recognize the importance of utilizing quantifiable standards to ensure that our executives’ personal financial interests are in close alignment with those of our stockholders. To that end, our Director & Executive Officer Stock Ownership and Retention Guidelines (the “Stock Ownership Guidelines”) require executives, including our NEO’s, to have stock ownership levels as follows: five times annual base salary for our CEO and three times annual base salary for all other executives.
The following are considered when determining if an executive has met these guidelines:

Company Class A or Class B common stock owned exclusively by the NEO, jointly with his or her spouse, or in a trust for the benefit of members of his or her family; and

the in-the-money portion of vested, unexercised stock options.
The following are not considered:

unvested or unearned performance-vesting shares/units;

unvested or previously exercised stock options; and

underwater stock options.
Until such guidelines are met and as each award is exercised, vested or earned, the CEO is expected to retain 75% of net profit shares and other NEOs are expected to retain 50% of net profit shares.
Anti-Hedging and Anti-Pledging Policy
Laureate prohibits employees, executive officers and directors from engaging in any form of hedging transaction or holding Laureate securities in margin accounts, or pledging Laureate securities as collateral for loans.
Compensation Program Risk Considerations
Management, the Compensation Committee and the Compensation Committee’s independent compensation consultant have reviewed and considered our compensation plans and practices for all of our employees and do not believe that our compensation policies and practices create risks that are reasonably likely to have a material adverse effect on the Company. We utilize many design features that mitigate the possibility of encouraging excessive risk-taking behavior. Among these design features are the following:
 
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reasonable goals and objectives that are well-defined and communicated;

a strong recoupment (“clawback”) policy;

balance of short- and long-term variable compensation tied to a mix of financial and operational objectives;

market-aligned severance policy for executives that does not have automatic single-trigger equity vesting;

prohibition on executive officers and directors engaging in any form of hedging transaction or holding Laureate securities in margin accounts, or pledging Laureate securities as collateral for loans;

retaining an independent compensation consultant for the Compensation Committee;

capping annual incentive plan payouts;

stock ownership guidelines; and

the Compensation Committee’s ability to exercise downward discretion in determining payouts.
Clawback Policy
Under the Company’s Executive Incentive Compensation Recoupment Policy, also known as a “clawback” policy, executives who violate confidentiality, non-competition, and non-solicitation agreements forfeit any outstanding awards under the 2013 Plan and must return any gains realized from awards prior to the violation. These provisions serve to protect our intellectual property and human capital and help ensure that executives act in the best interests of Laureate and its investors. We plan to revise the Executive Incentive Compensation Recoupment Policy to be consistent with the final rules implementing the requirements of the Dodd-Frank Act.
Tax and Accounting Implications
As part of its role, the Compensation Committee considers the tax and accounting impacts reflected in our financial statements when establishing our compensation plans. The forms of compensation it selects are intended to be cost efficient. Under GAAP, the cash AIP awards and performance-based equity awards result in “accrual” accounting, which means that the estimated payout of the award, along with any changes in that estimate, are recognized over the performance period. Our ultimate expense will equal the value earned by and paid to the executives. Therefore, the ultimate expense is not determinable until the end of the performance period.
Additionally, the Compensation Committee considers whether the forms of compensation it selects are tax deductible compensation consistent with our philosophies of aligning pay with performance and the interests of our NEOs with those of our investors.
Compensation Committee Report
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis as required by Item 402(b) of Regulation S-K with management. Based on such review and discussions, the Compensation Committee recommended to our Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement for filing with the SEC and incorporated by reference into the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020.
COMPENSATION COMMITTEE
Brian F. Carroll
Andrew B. Cohen
William L. Cornog
Pedro del Corro
Kenneth W. Freeman
George Muñoz
 
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Executive Compensation Tables
Summary Compensation Table
The following table sets forth information regarding the compensation of our NEOs for 2020, 2019 and 2018.
SUMMARY COMPENSATION TABLE
Name and Principal Position
Year
Salary
($)(1)
Bonus(2)
Stock
Awards(3)
Option
Awards(3)
Non-Equity
Incentive
Plan
Compensation
($)(4)
All Other
Compensation
($)(5)
Total
($)
Eilif Serck-Hanssen
President and Chief Executive
Officer
2020 765,708 1,000,000 2,550,020 988,975 12,159 5,316,862
2019 850,000 1,862,500 621,075 1,689,589 12,009 5,035,173
2018 850,000 1,960,215 653,608 1,671,349 11,859 5,147,031
Jean-Jacques Charhon
Executive Vice President and Chief Financial Officer
2020 555,375 1,500,014 537,000 8,550 2,600,939
2019 600,000 1,107,358 369,203 917,424 8,400 3,002,385
2018 600,000 461,220 753,790 387,312 62,950 2,265,272
Timothy Grace
Chief Human Resources Officer
2020 462,812 400,010 358,000 8,550 1,229,372
2019 500,000 292,159 97,423 611,616 8,400 1,509,598
2018 297,436 321,730 107,220 520,416 423,133 1,669,935
Paula Singer
Chief Executive Officer, Walden and Laureate Online Partners
2020 424,862 459,004 594,644 8,550 1,487,060
2019 457,500 328,679 109,602 558,328 8,400 1,462,509
Richard Sinkfield III
Chief Legal Officer and Chief
Ethics & Compliance Officer
2020 379,647 333,000 215,532 231,103 8,550 1,167,832
(1)
Salary rates in 2020 were unchanged from 2019, but reflected voluntary temporary salary reductions taken in light of the impact of the COVID-19 pandemic on the Company for all of the NEOs, other than in the case of Mr. Sinkfield. For Mr. Sinkfield, his salary was prorated in 2020 based on the effective date of his promotion to Chief Legal Officer and Chief Ethics & Compliance Officer on July 17, 2020.
(2)
For Messrs. Serck-Hanssen and Sinkfield, the Compensation Committee granted a special one-time discretionary cash bonus in recognition of their significant contributions to the Company’s strategic review process during 2020.
(3)
Except as otherwise noted, reflects the grant date fair value of awards, which is an estimated value computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 Compensation — Stock Compensation (“ASC 718”). For a discussion of the assumptions related to the calculation of this value, refer to Note 12, Share-based Compensation and Equity, in our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020.
(4)
For 2020, represents amounts earned under the 2020 AIP.
(5)
For 2020, includes $8,550 contributed pursuant to our 401(k) matching program and, for Mr. Serck-Hanssen, includes $3,609 for executive supplemental disability plan premiums.
Narrative to Summary Compensation Table and Grants of Plan-Based Awards Table
Employment Arrangements.   We have entered into offer letters or employment agreements with each of the NEOs, which provide for an NEO’s base salary as of the commencement of employment, the target annual incentive and the long-term incentive equity awards. See “—Compensation Discussion and Analysis—Base Salary” for more information regarding these base salaries for the NEOs.
 
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Annual Incentive Awards.   In 2020, annual cash incentive awards were granted under the 2020 AIP. See “—Compensation Discussion and Analysis — Annual Incentive Plan” for more information regarding the 2020 AIP.
Long-Term Incentive Awards.   In 2020, the Company granted annual long-term incentive awards to NEOs in the form of PSUs and RSUs, as described below. Each award is subject to continued employment on each applicable vesting date (with limited exceptions for termination of employment due to death, permanent disability and qualifying termination following a change in control). See “—Compensation Discussion and Analysis — Long-Term Incentive Plan: Stock-Based Compensation” for more information regarding these awards.

PSUs.    One-third of the annual grant PSUs will be eligible to vest based upon achievement of the applicable Adjusted EBITDA targets for each of fiscal year 2020, 2021, and 2022.

RSUs.   The annual grant RSUs vest in three equal annual installments beginning on December 31, 2020.
Grants of Plan-Based Awards in 2020
The following table sets forth information regarding grants of plan-based awards to our NEOs in 2020:
GRANTS OF PLAN-BASED AWARDS
Estimated Future Payouts
Under
Non-Equity
Incentive Plan Awards
Estimated Future Payouts
Under Equity
Incentive Plan Awards
All
Other
Stock
Awards:
Number of
Shares of
Stock or
Units (#)
All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)
Exercise
or Base
Price of
Option
Awards
($/share)
Grant
Date
Fair
Value of
Stock
and
Option
Awards
($)*
Name
Grant
Date
Award
Type
Threshold
($)
Target
($)
Maximum
($)
Threshold
(#)
Target
(#)
Maximum
(#)
Eilif Serck-Hanssen
AIP(1)
0 1,105,000 1,105,000
Retention(2)
0 637,500 1,275,000
3/10/20
PSUs
73,700 1,275,010
3/10/20
RSUs
73,700 1,275,010
Jean-Jacques Charhon
AIP(1)
0 600,000 600,000
Retention(2)
0 450.000 900,000
3/10/20
PSUs
43,353 750,007
3/10/20
RSUs
43,353 750,007
Timothy Grace
AIP(1)
0 400,000 400,000
Retention(2)
0 375,000 750,000
3/10/20
PSUs
11,561 200,005
3/10/20
RSUs
11,561 200,005
Paula Singer
AIP(1)
0 459,000 918,000
Retention(2)
172,125 344,250 344,250
3/10/20
PSUs
13,266 229,502
3/10/20
RSUs
13,266 229,502
Richard Sinkfield III
AIP(1)
0 258,216 258,216
Retention(2)
0 131,250 262,500
3/10/20
PSUs
4,553 78,767
3/10/20
RSUs
4,553 78,767
9/11/20
PSUs(3)
2,182 28,999
9/11/20
RSUs(3)
2,182 28,999
 
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*
Represents the grant date fair value of awards, which is an estimated value computed in accordance with ASC 718. For a discussion of the assumptions related to the calculation of this value, refer to Note 12, Share-based Compensation and Equity, in our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020.
(1)
Represents the threshold, target and maximum payout opportunities under the 2020 AIP. See “—Compensation Discussion and Analysis — Annual Incentive Plan” for more information regarding the 2020 AIP.
(2)
Represents the threshold, target and maximum payout opportunities (a) under the corporate retention program for the NEOs, other than for Ms. Singer, and (b) for Ms. Singer, under the Singer Retention/Transaction Bonus. See “—Compensation Discussion and Analysis — Severance Pay Arrangements and Retention/Bonus Transaction Agreements” for more information regarding the transaction and retention bonus program.
(3)
The grants of PSUs and RSUs made to Mr. Sinkfield on September 11, 2020 have substantially the same terms as the annual 2020 grants. See “—Narrative to Summary Compensation Table and Grants of Plan-Based Awards Table.”
Outstanding Equity Awards at Fiscal Year-End
The following table provides information concerning unexercised options, PSUs and RSUs that were granted to our NEOs under our 2013 Plan and have not vested as of the end of 2020.
For option awards, the table provides the number of shares underlying both exercisable and unexercisable options, the exercise price and the expiration date. For stock unit awards, the table provides the total number of unvested units and the aggregate market value of shares of stock issuable upon vesting of these unvested units. We computed the market value of stock unit awards by multiplying the fair market value of our Class A common stock at December 31, 2020 ($14.56) by the number of units. Stock options generally have a ten-year term and must have an exercise price of no less than fair market value on the date of grant, which is the closing price of our Class A common stock on the Nasdaq on the date of grant. The value of our stock options to each grantee is entirely dependent on stock price appreciation beyond the date of grant and the ability to sell the shares acquired upon exercise of options.
 
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OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
Option Awards
Stock Awards
Name
Grant
Date
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable(1)
Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable(2)
Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
Option
Exercise
Price
($)
Option
Expiration
Date
Number of
Shares or
Units of
Stock
That
Have Not
Vested
(#)(3)
Market
Value
of Shares
or Units of
Stock That
Have Not
Vested
($)(4)
Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other Rights
That Have
Not Vested
(#)(5)
Equity
Incentive
Plan
Awards:
Market or
Payout Value
of Unearned
Shares,
Units or
Other Rights
That Have
Not Vested
($)(4)
Eilif Serck-Hanssen
10/2/13 254,776 $ 17.44 10/2/23
6/14/17 57,937 $ 17.89 6/14/27
9/13/17 145,773 $ 21.00 9/13/21
3/7/18 84,774 $ 13.97 3/7/28 31,181 $ 453,995
3/6/19 68,438 34,219 $ 14.90 3/6/29 13,889 $ 202,224 55,555 $ 808,881
3/10/20 49,134 $ 715,391 73,700 $ 1,073,072
Jean-Jacques Charhon
1/2/18 89,552 $ 14.72 1/2/23
3/7/18 19,947 $ 13.97 3/7/28 7,336 $ 106,812
3/6/19 24,154 12,078 $ 14.90 3/6/29 4,902 $ 71,373 19,608 $ 285,492
8/1/19 16,864 8,431 $ 16.40 8/1/29 3,049 $ 44,393 12,196 $ 177,574
3/10/20 28,902 $ 420,813 43,353 $ 631,220
Timothy Grace
5/29/18 12,887 $ 15.55 5/29/28 4,597 $ 66,932
3/6/19 10,736 5,367 $ 14.90 3/6/29 2,178 $ 31,712 8,714 $ 126,876
3/10/20 7,708 $ 112,228 11,561 $ 168,328
Paula Singer
10/2/13 256,249 $ 17.44 10/2/23
3/7/18 14,960 $ 13.97 3/7/28 5,502 $ 80,109
3/6/19 12,078 6,038 $ 14.90 3/6/29 2,451 $ 35,687 9,804 $ 142,746
3/10/20 8,844 $ 128,769 13,266 $ 193,153
Richard Sinkfield III
10/2/13 12,692 $ 17.44 10/2/23
3/4/15 1,293 $ 17.44 3/4/25
5/2/16 520 $ 17.44 5/2/26
6/14/17 1,457 $ 17.89 6/14/27
3/7/18 4.523 $ 13.97 3/7/28 1,663 $ 24,213
3/6/19 3.762 1,880 $ 14.90 3/6/29 763 $ 11,109 3,053 $ 44,452
3/10/20 3,036 $ 44,204 4,553 $ 66,292
9/11/20 1,455 $ 21,185 2,182 $ 31,770
(1)
Represents vested time- and performance-based options.
(2)
Represents unvested time-based options that vest on December 31, 2021.
(3)
Represent unvested time-based RSUs with vesting dates as follows: Mr. Serck-Hanssen — 38,456 vest on December 31, 2021 and 24,567 vest on December 31, 2022; Mr. Charhon — 22,402 vest on December 31, 2021 and 14,451 vest on December 31, 2022; Mr. Grace — 6,032 vest on December 31, 2021 and 3,854 vest on December 31, 2022; Ms. Singer — 6,873 vest on December 31, 2021 and 4,422 vest on December 31, 2022; and Mr. Sinkfield — 3,008 vest on December 31, 2021 and 2,246 vest on December 31, 2022.
(4)
Calculated based on the $14.56 closing price of our Class A common stock on December 31, 2020.
(5)
Represents unvested PSUs. The number of PSUs subject to annual performance targets is as follows:
 
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Mr. Serck-Hanssen — 83,525 for 2020, 52,344 for 2021 and 24,567 for 2022; Mr. Charhon — 37,689 for 2020, 30,353 for 2021 and 14,451 for 2022; Mr. Grace — 12,807 for 2020, 8,211 for 2021 and 3,854 for 2022; Ms. Singer — 14,826 for 2020, 9,324 for 2021 and 4,422 for 2022; and Mr. Sinkfield — 5,434 for 2020, 3,771 for 2021 and 2,246 for 2022.
Option Exercises and Stock Vested During 2020
The following table includes certain information with respect to stock options exercised during fiscal year 2020 by NEOs and vesting of RSUs and PSUs during 2020.
OPTION EXERCISES AND STOCK VESTED
Option Awards
Stock Awards
Executive
Number of
Shares
Acquired on
Exercise (#)
Value
Realized on
Exercise
($)
Number of
Shares
Acquired on
Vesting
(#)(1)
Value
Realized on
Vesting
($)(2)
Eilif Serck-Hanssen
133,837 1,981,534
Jean-Jacques Charhon
49,308 729,356
Timothy Grace
17,287 255,796
Paula Singer
20,029 296,372
Richard Sinkfield III
7,553 111,740
(1)
Represents PSUs that vested on March 15, 2020, upon certification of the achievement of the applicable 2019 performance goals and RSUs that vested on December 31, 2020.
(2)
Calculated by multiplying the number of shares by the closing price of our stock on the last trading day immediately prior to the vesting date.
2020 Nonqualified Deferred Compensation
Of the eligible NEOs, only Ms. Singer elected to participate in the Company’s nonqualified deferred compensation plan (the “DCP”) in years prior to 2020. No contributions were made by Ms. Singer to the DCP in 2020. The following table provides information about earnings, withdrawals/distributions and balances under the DCP in 2020:
NONQUALIFIED DEFERRED COMPENSATION
Executive
Aggregate
earnings in
last FY
($)
Aggregate
withdrawals/
distributions
($)
Aggregate
balance at
last FYE
($)
Eilif Serck-Hanssen
Jean-Jacques Charhon
Timothy Grace
Paula Singer
47,468 86,905 1,455,155
Richard Sinkfield III
The DCP provides eligible employees the opportunity to defer up to 85% of their base salaries and 100% of any bonus or annual cash and/or long-term incentive awards. Each participant allocates such deferred compensation to notional investments selected by the participant that are similar to investment alternatives available in our 401(k) Retirement Savings Plan. The deferred compensation will be paid out following termination of employment or on a selected payout schedule, either in a lump sum or in installments, at the election of the participant. The minimum annual deferral amount under the DCP is $5,000. To date, we have not made any matching contributions to any participant in the DCP, nor have we chosen to make any other discretionary employer contributions permitted to be made to participants pursuant to the DCP. All
 
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amounts deferred under the DCP are unfunded and unsecured obligations of Laureate, receive no preferential creditors’ standing and are subject to the same risks as any of our other general obligations.
Potential Payments upon Termination or Change in Control
The narrative description below reflects potential payments to each of our NEOs assuming various termination of employment events, including on or following a change in control event, as of December 31, 2020. In accordance with SEC rules, Mr. Charhon is included in this discussion notwithstanding that he would not be entitled to any of the severance payments described given his resignation from his position with the Company effective April 1, 2021.
Severance Payments
The NEOs are entitled to severance payments under the 2020 retention letter agreements entered into in connection with the Strategic Alternative Process, and, with respect to Mr. Sinkfield, under the Executive Severance Plan. See “—Compensation Discussion and Analysis—Severance Pay Arrangements and Retention/Bonus Transaction Agreements” for more information.
For all NEOs, any severance payments are conditioned upon the NEOs executing a general release of claims in favor of the Company, which includes standard restrictive covenants, including a two-year covenant not to compete.
Involuntary Termination
Unless the “qualifying termination” occurs in connection with a “change in control,” the severance benefit for Mr. Serck-Hanssen under his offer letter and the Executive Severance Plan is equal to one and a half times his (i) annual base salary at the annual rate in effect on the date of termination of employment plus (ii) annual target bonus. For the NEOs other than Mr. Serck-Hanssen, the severance benefit multiple is one times the annual base salary plus the annual target bonus. . Mr. Serck-Hanssen would receive the severance payment in a lump-sum whereas the other NEOs would receive the amount in equal installments over 12 months.
The NEO subject to a qualifying termination, and his or her eligible dependents, also would be entitled to coverage under the Company’s group medical benefit programs on the same terms as the Company provides to similarly situated executives for up to 18 months (in the case of Mr. Serck-Hanssen) or up to 12 months (in the case of all other NEOs) following a qualifying termination. In addition, the NEO would be entitled to receive outplacement assistance for nine months.
Involuntary Termination Without Cause or Resignation for Good Reason on or following a Change in Control or during or following the Strategic Alternative Process
NEOs are not entitled to cash severance benefits solely upon a “change in control.” However, the cash payments due on an involuntary termination by the Company without “cause” or by the NEO for “good reason” are increased if the termination occurs in connection with a “change in control.” If the “qualifying termination” occurs during the 12-month period on or following a “change in control,” the severance benefit for Mr. Serck-Hanssen is a lump sum equal to two times his annual base salary and annual target bonus. For all other NEOs, the multiple is one and a half times the relevant amount. In addition, the NEO will be entitled to receive an amount equal to the NEO’s annual target bonus for the year during which the termination of NEO was effective, prorated based on the number of days the NEO was employed during that year. All of the NEOs also would be entitled to coverage under the Company’s group medical benefit programs on the same terms the Company provides to similarly situated executives for up to 18 months following a qualifying termination.
Under the terms of the retention agreements executed by the Company with each NEO (other than Mr. Sinkfield, who is subject to the amended terms of the Executive Severance Plan), in the event that either prior to the end of the Strategic Alternative Process or during the 12-month period on or following the end of the Strategic Alternative Process such NEO is involuntarily terminated by the Company without “cause” or the NEO resigns for “good reason”, the NEO will be entitled to the same severance payments
 
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that the NEO would have received under the Executive Severance Plan if the Company were to terminate the NEO’s employment other than for cause or the NEO resigned for good reason following a change of control.
For each of our NEOs, “good reason” generally means the occurrence of any of the following without the NEO’s consent: (i) a material diminution in base salary; (ii) a substantial diminution in authority, duties and responsibilities; or (iii) a relocation by more than 50 miles from the NEO’s principal location in which the NEO is required to perform services; provided, however, that in any event, such event is not cured within the applicable notice period.
For each of our NEOs, “cause” generally means (i) gross negligence or willful malfeasance in connection with the performance of his or her duties; (ii) conviction of, or pleading guilty or nolo contendere to, any felony; (iii) theft, embezzlement, fraud or other similar conduct by the executive in connection with the performance of his or her duties; or (iv) a willful and material breach of any other applicable agreements including, without limitation, engaging in any action in breach of any applicable restrictive covenants.
Under the Executive Severance Plan, the NEOs are not entitled to any severance benefits upon a voluntary termination unless the voluntary termination is in connection with a “change in control” and is for “good reason.”
If any payments or benefits provided to an NEO pursuant to the Executive Severance Plan would trigger the payment of the excise tax imposed by Section 4999 of the Internal Revenue Code or any similar tax imposed by state or local law, then the NEO will receive (i) the full payment or (ii) a payment reduced to the minimum amount necessary to avoid any such excise tax, whichever amount is greater on a post-tax basis. In no event is the Company responsible to gross-up or indemnify any NEO for excise taxes paid or reductions to payments and benefits received to avoid such excise taxes.
Equity Treatment
Under the equity awards granted to NEOs under the 2013 Plan, the following treatment is generally provided for in the applicable award agreements:
Payments upon Termination Due to Death or Disability.   In the event of a termination due to death or disability of an NEO, all unvested RSUs, PSUs or options will be forfeited, except that: (i) any such unvested RSUs or time options that would have vested on the next applicable vesting date subsequent to the death or disability will become vested; and (ii) any unvested performance options or PSUs that would, but for the termination of employment due to death or disability, have vested had the applicable performance goal for the calendar year during which the death or disability occurred been achieved will remain outstanding until the Compensation Committee determines whether the applicable performance goal has been achieved and will become vested if and when the Compensation Committee determines that the applicable performance goal has been achieved or will terminate on the date the Compensation Committee determines that the applicable performance goal has not been achieved, and the balance of the unvested portion of the performance option or PSU will be forfeited. In the event of a termination due to death or disability, vested options may (by the NEO’s beneficiary in the case of death) be exercised only for a period of two years from the termination due to death or disability of the NEO.
Involuntary Termination Without Cause and Voluntary Resignation (other than in connection with the Strategic Alternative Process).   If an NEO’s employment is terminated by us without cause, or if he or she resigns for any reason, then all unvested RSUs, PSUs and options will be forfeited, except that if an NEO’s qualifying termination occurs subsequent to the end of the fiscal year but prior to the Compensation Committee’s determination regarding whether any annual performance goal has been achieved, any portion of the PSUs which would have been eligible, but for the termination, to vest will remain outstanding until the Compensation Committee determines whether the applicable performance goal has been achieved and will become vested if and when the Compensation Committee determines that the applicable performance goal has been achieved or will terminate on the date on which the Compensation Committee determines that the applicable performance goal has not been achieved, and the balance of the unvested portion of the PSUs will be forfeited. All vested but unexercised options held at the time of termination will be exercisable for a period of 90 days post termination.
 
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Involuntary Termination without Cause and Voluntary Resignation for “Good Reason” during the Strategic Alternative Process.   If, during the Strategic Alternative Process or the 12-month period after our Board of Directors determines that the Strategic Alternative Process is completed an NEO’s employment is terminated by us without cause, or if he or she resigns for good reason, then all unvested RSUs, PSUs and options that have not been previously forfeited will be accelerated.
Forfeiture upon Termination for Cause.   If an NEO resigns or is terminated by the Company for cause, he or she will forfeit all unvested and vested equity grants (options to the extent unexercised) at the time of termination.
The table below reflects potential payments to each of our NEOs assuming various termination of employment events, including on or following a change in control event, as of December 31, 2020. For stock valuations, we have assumed that the price per share is the closing price of our Class A common stock as of December 31, 2020, which was $14.56. The table below excludes any amounts payable to an NEO to the extent that these amounts are available generally to all salaried employees and do not discriminate in favor of our NEOs.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
Name
Benefit
Without
Cause/Good
Reason
Termination
Termination
due to
Death or
Disability
Change in
Control/Strategic
Alternative
Process plus
Qualifying
Termination(1)
Eilif Serck-Hanssen
Cash Severance $ 2,932,500(2) $ 5,015,000(3)
Benefits(4) $ 66,673 $ 66,673
Cash Retention Bonus(5)
Acceleration of options(6)
Acceleration of RSU vesting(7)
$ 917,615
Acceleration of PSU vesting(8)
$ 1,216,124 $ 2,335,948
Total $ 2,997,539 $ 1,216,124 $ 8,335,236
Jean-Jacques
Charhon(9)
Cash Severance $ 1,200,000 (10) $ 2,400,000(11)
Benefits(4) $ 34,348 $ 39,021
Cash Retention Bonus(5)
Acceleration of options(6)
Acceleration of RSU vesting(7)
$ 536,580
Acceleration of PSU vesting(8)
$ 548,752 $ 1,201,098
Total $ 1,234,348 $ 548,752 $ 4,176,699
Timothy Grace
Cash Severance $ 900,000(10) $ 1,750,000(11)
Benefits(4) $ 46,014 $ 56,521
Cash Retention Bonus(5)
Acceleration of options(6)
Acceleration of RSU vesting(7)
$ 143,940
Acceleration of PSU vesting(8)
$ 186,470 $ 362,136
Total $ 946,014 $ 186,470 $ 2,312,597
 
34

 
Name
Benefit
Without
Cause/Good
Reason
Termination
Termination
due to
Death or
Disability
Change in
Control/Strategic
Alternative
Process plus
Qualifying
Termination(1)
Paula Singer
Cash Severance $ 918,000(10) $ 1,836,000(11)
Benefits(4) $ 46,213 $ 56,819
Cash Retention Bonus(5) $ 344,250
Acceleration of options(6)
Acceleration of RSU vesting(7)
$ 164,455
Acceleration of PSU vesting(8)
$ 215,867 $ 416,008
Total $ 964,213 $ 215,867 $ 2,817,533
Richard Sinkfield III
Cash Severance $ 678,216(10) $ 1,275,540(11)
R