8-KLeadership ChangesShareholder MattersExhibits & Filings

COGNIZANT TECHNOLOGY SOLUTIONS CORP 8-K Report, Executive Changes (Jun 7, 2017)

Filed June 7, 2017For Securities:CTSH

Summary

This 8-K filing from Cognizant Technology Solutions Corp. (CTSH) details the outcomes of their Annual Meeting of Stockholders held on June 6, 2017. The most significant development for investors is the stockholder approval of the Cognizant Technology Solutions Corporation 2017 Incentive Award Plan (the "2017 Plan"). This new plan will replace the prior 2009 plan and allows for the issuance of a substantial number of shares, including approximately 46 million new shares plus remaining shares from the 2009 plan. This indicates a continued reliance on equity-based compensation to incentivize employees and align their interests with shareholders. The filing also provides voting results for several other proposals, all of which were described in the company's proxy statement. Notably, all incumbent directors were re-elected, and advisory votes on executive compensation (Say-on-Pay) and the frequency of such votes (favoring annual votes) passed. A stockholder proposal to eliminate supermajority voting provisions also received strong support and was approved. Conversely, a proposal to allow stockholder action by written consent did not pass, suggesting that current governance structures will remain in place. The ratification of PricewaterhouseCoopers LLP as the independent auditor was also overwhelmingly approved.

Key Highlights

  • 1Stockholders approved the new Cognizant Technology Solutions Corporation 2017 Incentive Award Plan, replacing the 2009 plan and authorizing the issuance of new equity awards.
  • 2All incumbent directors standing for re-election were successfully re-elected by a significant margin.
  • 3The advisory vote on executive compensation (Say-on-Pay) received strong support from stockholders.
  • 4Stockholders voted in favor of holding advisory votes on executive compensation annually.
  • 5A stockholder proposal to eliminate supermajority voting provisions was approved.
  • 6A stockholder proposal to permit action by written consent was not approved.
  • 7PricewaterhouseCoopers LLP was ratified as the independent registered public accounting firm for the fiscal year ending December 31, 2017.

Frequently Asked Questions

The 2017 Incentive Award Plan is designed to provide a framework for awarding equity-based compensation to employees and other eligible individuals. This is intended to attract, retain, and motivate key personnel by aligning their financial interests with those of Cognizant's stockholders.

The 2017 Plan allows for the issuance of a maximum number of shares of common stock equal to approximately 46,000,000 new shares, plus any shares remaining available from the 2009 Plan, and shares from forfeited or expired awards or other specific events.

The advisory vote on executive compensation, often referred to as 'Say-on-Pay,' was approved by a majority of stockholders, indicating general support for the company's compensation practices for its named executive officers.

The company's governance structure will see a minor change with the approval of the proposal to eliminate supermajority voting provisions. However, the proposal to allow stockholder action by written consent was not approved, meaning the existing procedures for stockholder actions remain in place.