8-KLeadership ChangesExhibits & Filings

EQUIFAX INC 8-K Report, Executive Changes (Feb 27, 2019)

Filed February 27, 2019For Securities:EFX

Summary

Equifax Inc. (EFX) filed an 8-K on February 27, 2019, detailing significant changes to its executive compensation and severance arrangements, primarily focused on aligning incentives with its multi-year business transformation strategy. The company has reformulated its 2019 Long-Term Incentive Program, now called the Equifax Transformational Leadership Program (2019 ETLP), to reward executives for achieving specific near-term and long-term strategic goals. This program increases the grant date fair value of incentives for certain executive officers and incorporates more challenging performance thresholds, including performance shares based on Total Shareholder Return (TSR) relative to the S&P 500 and premium-priced stock options. Additionally, Equifax has introduced a new Change in Control Severance Plan (the "Plan") that replaces existing individual agreements for most named executive officers (NEOs). While the new plan aims to standardize severance benefits and align them with contemporary best practices, it generally reduces the severance multiples and eliminates tax gross-ups for participating NEOs compared to their prior agreements. Notably, the CEO, Mark Begor, is not covered by this new plan. These adjustments signal a commitment to robust governance and direct executive accountability for driving the company's strategic turnaround.

Key Highlights

  • 1Equifax has launched the Equifax Transformational Leadership Program (2019 ETLP) for 2019, a revised long-term incentive plan designed to align executive compensation with strategic transformation goals.
  • 2The 2019 ETLP increases the grant date fair value of incentives, particularly for performance shares (TSR-based) and premium-priced stock options, with more challenging performance hurdles.
  • 3New performance share awards are tied to Equifax's Total Shareholder Return (TSR) relative to the S&P 500, emphasizing market-based performance.
  • 4All stock options granted under the 2019 ETLP are now premium-priced, with exercise prices set at 115%, 125%, and 135% of the fair market value on the grant date.
  • 5A new Change in Control Severance Plan (the "Plan") has been adopted, replacing individual change-in-control agreements for most participating NEOs.
  • 6The new Plan generally reduces severance multiples (e.g., from 3x to 2x salary plus bonus) and eliminates excise tax gross-ups for most participating executives.
  • 7CEO Mark Begor's change-in-control benefits remain governed by his existing employment agreement and are not part of the new Plan.

Frequently Asked Questions

The 2019 ETLP is designed to strengthen the alignment between named executive officers (NEOs) and shareholders by rewarding efforts related to driving the company's multi-year transformation strategy. It aims to motivate executives to achieve specific near-term and long-term goals focused on data security, technology transformation, data analytics, customer experience, and profitability.

The 2019 ETLP increases the grant date fair value of stock options and TSR performance shares compared to 2018. Notably, all stock options are now premium-priced (with exercise prices at 115%, 125%, and 135% of fair market value), and performance shares are based on relative TSR against the S&P 500. Time-vested RSUs remain unchanged in value but represent a smaller portion of the total incentive opportunity.

The new Change in Control Severance Plan replaces existing individual agreements for most participating NEOs. Key changes include a reduction in the severance multiplier (generally two times salary plus target bonus, down from three times or a higher multiplier based on historical earnings), elimination of tax gross-ups for excise taxes, and the introduction of arbitration for claims. Severance benefits are also subject to the company's clawback policy.

No, the new Change in Control Severance Plan does not apply to the CEO, Mark Begor. His change-in-control severance benefits continue to be governed by his existing employment agreement with the company.