8-KLeadership ChangesShareholder MattersExhibits & Filings

COGNIZANT TECHNOLOGY SOLUTIONS CORP 8-K Report, Executive Changes (Jun 9, 2023)

Filed June 9, 2023For Securities:CTSH

Summary

Cognizant Technology Solutions Corporation (CTSH) filed an 8-K on June 9, 2023, reporting on key outcomes from its Annual Meeting of Shareholders held on June 6, 2023. The most significant information for investors pertains to the approval of new equity incentive and employee stock purchase plans. Shareholders overwhelmingly approved the 2023 Incentive Award Plan, which will replace the existing 2017 plan and allows for grants of stock options, RSUs, and other equity-based awards. Additionally, an amendment to the Employee Stock Purchase Plan (ESPP) was approved, increasing the total reserved shares for employee purchases and allowing eligible employees to buy company stock at a discount. Furthermore, the filing confirms the re-election of all directors and the ratification of PricewaterhouseCoopers LLP as the independent auditor. Investors should note that two shareholder proposals, concerning fair elections and termination pay, did not receive majority approval. The strong shareholder turnout (approximately 90%) and broad approval of management-recommended proposals, including the compensation and equity plans, suggest continued shareholder confidence in the company's governance and long-term incentive structures.

Key Highlights

  • 1Shareholder approval of the 2023 Incentive Award Plan, replacing the 2017 plan, which governs the issuance of stock options, restricted stock units, and other equity-based compensation to employees, officers, directors, and consultants.
  • 2Approval of an amendment to the Employee Stock Purchase Plan (ESPP), increasing the total number of shares reserved for issuance from 40,000,000 to 50,000,000.
  • 3All incumbent directors were re-elected to the Board of Directors.
  • 4PricewaterhouseCoopers LLP was ratified as the independent registered public accounting firm for the fiscal year ending December 31, 2023.
  • 5The advisory 'Say-on-Pay' vote on executive compensation was approved by a significant majority.
  • 6Shareholders voted overwhelmingly in favor of holding future 'Say-on-Pay' votes on an annual basis (1 Year).
  • 7Two shareholder proposals (one regarding fair elections and another regarding termination pay) were not approved by the shareholders.

Frequently Asked Questions

The 2023 Incentive Award Plan, approved by shareholders, is designed to allow Cognizant to grant various forms of equity-based compensation, including stock options, restricted stock units (RSUs), and other stock or cash-based awards, as well as dividend equivalent awards. This plan will replace the previous 2017 Incentive Compensation Plan and is a key tool for attracting, retaining, and motivating officers, employees, consultants, and directors.

The ESPP amendment increases the total number of shares available for purchase under the plan by 10 million, raising the cap from 40 million to 50 million shares. This allows more eligible employees to participate in purchasing Cognizant's Class A Common Stock at a discount (95% of fair market value on the last day of the offering period), providing them with an opportunity to share in the company's potential growth.

Two shareholder proposals were voted on at the Annual Meeting. The proposal concerning fair elections, which requested by-law amendments for shareholder approval of certain advance notice provisions, and the proposal regarding termination pay, which sought shareholder ratification of senior manager severance packages, both failed to receive majority shareholder approval.

Yes, there was a very strong turnout, with approximately 90% of the Company's outstanding Class A Common Stock present or represented by proxy at the Annual Meeting. This indicates significant shareholder engagement.