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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
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| x | Preliminary Proxy Statement |
| o | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
| o | Definitive Proxy Statement |
| o | Definitive Additional Materials |
| o | Soliciting Material Pursuant to Section 240.14a-12 |
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Payment of Filing Fee (Check the appropriate box):
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| PRELIMINARY PROXY STATEMENT – SUBJECT TO COMPLETION |
| April [__], 2023 |
Dear Fellow Shareholders,
We cordially invite you to attend our 2023 Annual Meeting of Shareholders, to be held on May 24, 2023, at 10:30 a.m., Eastern Time. The Annual Meeting will be a virtual meeting of shareholders. You will be able to attend the Annual Meeting, vote your shares electronically and submit your questions during the meeting via live audio webcast by visiting www.virtualshareholdermeeting.com/PJT2023. To participate in the meeting, you must have your 16-Digit Control Number that is shown on your Notice of Internet Availability of Proxy Materials or on your proxy card if you elected to receive proxy materials by mail. You will not be able to attend the Annual Meeting in person.
The Notice of Annual Meeting of Shareholders and Proxy Statement that follow describe the business to be conducted at the Annual Meeting. Your vote is important. We encourage you to vote by proxy in advance of the Annual Meeting, whether or not you plan to participate.
Thank you for your continuing support of PJT Partners.
Very truly yours,
Paul J. Taubman
Chairman and Chief Executive Officer
280 Park Avenue | New York, NY 10017 | t. +1.212.364.7810 | pjtpartners.com
| PRELIMINARY PROXY STATEMENT – SUBJECT TO COMPLETION |
PJT Partners Inc.
280 Park Avenue, New York, New York 10017
Notice of 2023 Annual Meeting of Shareholders
| Items of Business | Date: Wednesday, May 24, 2023 |
|
Item 1. Election to the Board of Directors of two Class II director nominees identified in this Proxy Statement Item 2. Approval, on an advisory basis, of the compensation of our Named Executive Officers as disclosed in this Proxy Statement Item 3. Approval of the Second Amended and Restated PJT Partners Inc. 2015 Omnibus Incentive Plan Item 4. Approval of an amendment to the Amended and Restated Certificate of Incorporation to reflect new Delaware law provisions regarding officer exculpation Item 5. Ratification of the selection of Deloitte & Touche LLP as our independent registered public accounting firm for 2023 To transact such other business as may properly come before our Annual Meeting or any adjournments or postponements thereof. |
Time: 10:30 a.m. Eastern Daylight Time Place: Virtual format only. If you plan to participate in the virtual meeting, please see “Participation in Our Annual Meeting” on page 88. Shareholders will be able to participate, vote, examine the shareholders list and submit questions (both before, and for a portion of, the meeting) from any location via the internet. Shareholders may participate by logging in at: www.virtualshareholdermeeting.com/PJT2023. To participate you must have your 16-Digit Control Number that is shown on your Notice of Internet Availability of Proxy Materials or on your proxy card if you elected to receive proxy materials by mail. |
| Record Date: March 27, 2023 |
Your vote is important to us. Please exercise your shareholder right to vote.
By Order of the Board of Directors,
David K.F. Gillis
Corporate Secretary
April [__], 2023
Important Notice Regarding the Availability of Proxy Materials for our Annual Meeting to be held on May 24, 2023. Our Proxy Statement, 2022 Annual Report to Shareholders and other materials are available on our website at https://ir.pjtpartners.com/sec-filings/all-sec-filings. The Proxy Materials will be mailed or made available to our shareholders on or about April [__], 2023. We are sending to most of our shareholders a Notice of Internet Availability of Proxy Materials (the “Notice of Availability”) rather than a paper set of the Proxy Materials. By doing so, we save costs and reduce our impact on the environment. The Notice of Availability includes instructions on how to access our Proxy Materials over the internet, as well as how to request the materials in paper form. On or about April [__], 2023, we will mail to most of our shareholders the Notice of Availability.
PROXY STATEMENT
TABLE OF CONTENTS
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Although we refer to websites and other documents in this Proxy Statement, the contents of such websites and documents are not included or incorporated by reference into this Proxy Statement. All references to websites in the Proxy Statement are intended to be inactive textual references only.
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Executive Summary
This summary highlights information from PJT Partners Inc.’s Proxy Statement for the 2023 Annual Meeting of Shareholders. You should read this entire Proxy Statement carefully before voting. Please refer to the Glossary of Terms in Appendix A for definitions of some of the terms used in this Proxy Statement.(1) Your vote is important. For more information on voting and participating in the Annual Meeting, see, “Participation in Our Annual Meeting” on page 88.
Our Company
PJT Partners is a premier global advisory-focused investment bank.(2) We are built on the unique intellectual capital only diverse, collaborative world-class talent can provide. Our team draws on ever-growing expertise and experience to provide the original thinking that helps our clients navigate complexity and exceed their goals. This thinking drives the advice we provide to corporations, asset managers, funds, institutional investors, governments and others around the globe.
Matters to Be Voted on at the Annual Meeting
The Board of Directors recommends that you vote “FOR” each director nominee and “FOR” the following proposals:
| > | Advisory Resolution to Approve Executive Compensation |
| > | Approval of the Second Amended and Restated PJT Partners Inc. 2015 Omnibus Incentive Plan |
| > | Approval of an Amendment to the Amended and Restated Certificate of Incorporation to Reflect New Delaware Law Provisions Regarding Officer Exculpation |
| > | Ratification of Independent Registered Public Accounting Firm |
2022 Highlights
| Financials | ||
|
$1.03bn Total Revenues, |
19.6% GAAP Pretax Margin 21.5% Adjusted(3) Pretax Margin |
$3.51 GAAP Diluted EPS $3.92 Adjusted(3) EPS |
| Capital Management | ||
|
2.2mm Share equivalents |
$223mm Cash, cash equivalents, and |
$1.00 Annual dividend |
| (1) | In this Proxy Statement, unless the context requires otherwise, the words “PJT Partners” refer to PJT Partners Inc. and the “company,” “we,” “us” and “our” refer to PJT Partners, together with its consolidated subsidiaries, including PJT Partners Holdings and its operating subsidiaries. |
| (2) | PJT Partners Inc. is a holding company, and its only material asset is its controlling equity interest in PJT Partners Holdings LP (“PJT Partners Holdings”), a holding partnership that holds the company’s operating subsidiaries, and certain cash and cash equivalents it may hold from time to time. As the sole general partner of PJT Partners Holdings, PJT Partners Inc. operates and controls all of the business and affairs of PJT Partners Holdings and its operating subsidiaries. PJT Partners Inc.’s common stock trades on the New York Stock Exchange (“NYSE”) under the symbol “PJT.” |
| (3) | Figures are shown ‘as adjusted,’ a non-GAAP financial measure. See Appendix B, “U.S. GAAP Reconciliations” for a reconciliation of non-GAAP financial measures with comparable GAAP financial measures. |
| 1 | Executive Summary |
| Footprint | ||
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105 Total Partners, an 66 Strategic Advisory Partners, an increase of 18% YoY |
907 Company-wide headcount, |
11 Offices worldwide; |
| Corporate Sustainability and Community | ||
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2nd Annual Corporate Sustainability Report released |
>$6.0mm Company-wide giving |
>260 Charitable organizations |
Proposal 1: Election of Directors
The Board has nominated two directors, Thomas M. Ryan and K. Don Cornwell, for election as Class II directors. If elected, each Class II director will serve until the annual meeting of shareholders in 2026, or until succeeded by another qualified director who has been elected.
The Board recommends that you vote “FOR” each director nominee.
Nominees for Class II Directors Whose Terms Will Expire in 2026:
Thomas M. Ryan | Lead Independent
Director, Compensation Committee Chair
Age: 70 | Director since October 2015
Thomas M. Ryan is the former Chairman and Chief Executive Officer of CVS Health Corporation, formerly known as CVS Caremark Corporation, a pharmacy healthcare provider (“CVS”). He served as Chairman of CVS from April 1999 to May 2011 and Chief Executive Officer of CVS from May 1998 to February 2011, and also served as President from May 1998 to May 2010. Mr. Ryan serves on the board of Five Below, Inc., and is an Operating Partner of Advent International. Mr. Ryan was a director of Yum! Brands, Inc. from 2002 to 2017, Reebok International Ltd. from 1998 to 2005, Bank of America Corporation from 2004 to 2010 and Vantiv, Inc. from 2012 to 2015. Mr. Ryan’s role as Chairman and Chief Executive Officer of a global pharmacy healthcare business, his extensive operations and management experience, his expertise in finance and strategic planning, as well as his public company directorship and committee experience, positions him well to serve on the Board.
K. Don
Cornwell | Age: 52 | Director since January 2023
K. Don Cornwell is a Co-Founder and the Chief Executive Officer of Dynasty Equity, a global sports investment firm focused on acquiring minority interests in sports franchises and other related assets and rights. Prior to founding Dynasty Equity in 2022, Mr. Cornwell was a founding partner at PJT Partners, joining the company in 2015 following an 18-year career at Morgan Stanley. At Morgan Stanley, Mr. Cornwell was in the Mergers and Acquisitions Group and established a particularly focused area of expertise in media and entertainment, specifically in sports and gaming, including serving as Head of Global Sports Investment Banking. Before he joined Morgan Stanley, Mr. Cornwell worked at McKinsey & Co. as a management consultant and in corporate development for the National Football League. He sits on the Board of Trustees of the Harlem Children’s Zone, an education and social services organization in Central Harlem; the East Harlem Tutorial Program, an after-school program for children in East Harlem; the Board of Directors of New York Cares, New York City’s largest volunteer organization; and the VFILES Foundation, an organization with the mission to increase business ownership for creators in underrepresented communities. Mr. Cornwell served on the Management Board of Stanford University’s Graduate School of Business until July 2022. He received an MBA from Stanford University’s
| 2 | Executive Summary |
Graduate School of Business and an AB in Government from Harvard College. Mr. Cornwell’s extensive experience and expertise in investment banking and in the financial services industry, as well as his deep knowledge of PJT Partners’ business, operations and culture, and his understanding of the company’s clients, employees and other stakeholders, position him to contribute valuable acumen and insight to the Board.
Board Diversity
The PJT Partners Board of Directors is composed of highly accomplished and actively engaged individuals with diverse skills and experiences that contribute to the effective oversight of our company. Consistent with our commitment to diversity, equity and inclusion, the Board comprises an inclusive mix of backgrounds and perspectives from historically underrepresented groups. The Board includes two female directors, one Black director and one LGBTQ+ director. A majority of the Board — 57% — are members of groups that are historically underrepresented on public company boards:
Proposal 2: Advisory Resolution to Approve Executive Compensation
The Board recommends that you vote “FOR” the approval, on an advisory basis, of the compensation of our Named Executive Officers.
Key reasons to vote “FOR” the approval, on an advisory basis, of the compensation of our Named Executive Officers:
Our compensation program includes elements that are intended to ensure strong alignment between the interests of our Executive Officers and our shareholders:
| > | Annual incentive compensation that places a strong emphasis on company-wide financial performance, with consideration given to the individual performance of each Executive Officer. |
| > | An appropriate link between compensation and the creation of shareholder value through long-term equity awards. |
| > | A focus on collaboration, and therefore does not include individual revenue pay-outs at any level. |
| > | Consideration for each executive’s contribution to leadership and talent development. |
| > | Benchmarking analysis to help us understand compensation practices of our competitors. |
Our compensation program for our Executive Officers and the company overall also aims to be market-competitive versus our peers, in both quantum and structure to ensure that we are able to attract and retain executives and other professionals that contribute to the long-term success of the company.
| 3 | Executive Summary |
Proposal 3: Approval of the Second Amended and Restated PJT Partners Inc. 2015 Omnibus Incentive Plan
On February 23, 2023, upon the recommendation of the Compensation Committee, the Board unanimously adopted the Second Amended and Restated PJT Partners Inc. 2015 Omnibus Incentive Plan (the “Omnibus Incentive Plan”), in the form attached hereto as Appendix C, subject to the approval of the shareholders at the Annual Meeting. The amendment to the Omnibus Incentive Plan includes an increase in the number of shares available under the plan by 16 million shares.
The use of equity compensation is integral to our compensation philosophy. It is a critical tool in attracting, retaining, and aligning the interests of employees and shareholders, particularly as investment in talent continues to be one of our principal capital priorities. We benefit from the fact that approximately 40% of our company is owned by our employees, creating an alignment and long-term focus that has been an important driver of our success in growing our business.
In 2019, we indicated that the plan shareholders voted on at that time would be sufficient to allow us to make equity awards in the amount we believed to be necessary for the next three to five years. If the renewed Omnibus Incentive Plan is approved by our shareholders, we believe the additional shares will be sufficient to allow us to grant equity awards for the next three to five years, based on our historical equity granting practices and our anticipated headcount growth.
The Board recommends that you vote “FOR” the approval of the Omnibus Incentive Plan.
| Highlights |
Equity Compensation is Integral to Our Compensation Philosophy
| ü | The use of equity compensation as part of annual incentives aligns the interests of our employees and shareholders, creates stickiness from a retention perspective and encourages a focus on long-term success. |
| ü | Replacement of forfeited equity awards from prior employers is normal practice in the industry and investment in talent continues to be one of our principal capital priorities. |
| ü | We believe our equity is an attractive currency and has proven to be an asset when hiring top talent to our company. |
Our Use of the Plan is Disciplined and Ensures Alignment with Shareholders
| ü | Equity awards typically vest over three or four years and have a minimum vesting condition of one year. |
| ü | All equity awards granted include service requirements with typical forfeiture provisions in the case of resignation. |
| ü | Equity ownership guidelines for our directors and Executive Officers ensures alignment through significant personal investment in the success of the company. |
| ü | Equity awards granted to our Chief Executive Officer (“CEO”) have included significant performance conditions and long-term service requirements. |
| ü | Directors, partners and employees are prohibited from hedging equity holdings of the company. |
We have a Proven Track Record in Managing Dilution
| ü | Our capital priorities consider the decisions made regarding equity grants in any given year. We have been proactive in offsetting any dilutive impact on the company’s share capital from our investments in talent. |
| ü | Our Net Burn Rate, which is a measure of the dilutive impact of our equity issuances taking into account our repurchase activity, averages just 0.4% over the last 3 years. |
The Plan Includes a Number of Other Best Practice Design Elements
| ü | Fixed maximum share limit |
| ü | No “evergreen” provision |
| ü | All awards are subject to clawback |
| ü | No equity grants below fair market value |
| 4 | Executive Summary |
| Shares in millions | 2020 | 2021 | 2022 | 3-Year Average |
| Grants | ||||
| Restricted Stock Units | 2.8 | 1.6 | 2.0 | 2.1 |
| Partnership Units | 0.1 | 0.1 | 0.1 | 0.1 |
| Awards Subject to Both Service and Market Conditions | 0.1 | 0.0 | 2.6 | 0.9 |
| Adjustment for Forfeitures | (0.2) | (0.4) | (0.1) | (0.2) |
| Net Grants | 2.8 | 1.3 | 4.6 | 2.9 |
| Repurchases(1) | 2.9 | 3.2 | 2.2 | 2.8 |
| Net Issuance (Net Grants – Repurchases) | 0.0 | (1.9) | 2.4 | 0.2 |
| Percentage of Shares/Units Repurchased | 101% | 244% | 47% | 95% |
| PJT Shares Outstanding(2) | 40.5 | 39.6 | 39.4 | 39.9 |
| Burn Rate (Taking into Account Forfeitures) | 7.0% | 3.3% | 11.6% | 7.3% |
| Net Burn Rate (Also Taking into Account Share/Unit Repurchases) | (0.1%) | (4.8%) | 6.1% | 0.4% |
| (1) | Includes repurchases of shares of our Class A common stock, settlement of Partnership Unit exchanges with cash and employee net share settlements. |
| (2) | PJT Shares Outstanding is calculated as the fully-diluted shares outstanding as described in our quarterly earnings releases (45,420,101 in 2020, 43,798,482 in 2021 and 43,599,438 in 2022), less unvested restricted stock units (4,873,620 in 2020, 4,148,889 in 2021 and 4,204,316 in 2022). |
Proposal 4: Approval of an Amendment to the Amended and Restated Certificate of Incorporation to Reflect New Delaware Law Provisions Regarding Officer Exculpation
In August 2022, the State of Delaware, which is the company’s state of incorporation, enacted legislation that enables Delaware companies to limit the liability of certain officers in limited circumstances. The new Delaware law permits exculpation for direct claims brought by shareholders for breach of an officer’s fiduciary duty of care, but would not eliminate officers’ monetary liability for breach of fiduciary duty claims brought by the corporation itself or for derivative claims brought by shareholders on behalf of the company. The new law also would not allow officers to be exculpated for breaches of the duty of loyalty, acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, or any transaction in which an officer derived an improper personal benefit.
In light of this change in law, the Board, based on the recommendation of the Nominating/ Corporate Governance Committee, unanimously recommends that the company’s shareholders vote “FOR” an amendment (the “Amendment”) to the company’s Amended and Restated Certificate of Incorporation to add a new Article XII, which shall read in its entirety as follows:
“ARTICLE XII. Section 12.1. Limited Liability of Officers. No officer of the Corporation shall have any personal liability to the Corporation or its stockholders for monetary damages for any breach of fiduciary duty as an officer, except to the extent such exemption from liability or limitation thereof is not permitted under the DGCL as the same exists or hereafter may be amended. Neither the amendment nor the repeal of this Article XII shall eliminate or reduce the effect thereof in respect of any state of facts existing or act or omission occurring, or any cause of action, suit or claim that, but for this Article XII, would accrue or arise, prior to such amendment or repeal.”
| 5 | Executive Summary |
Key reasons to vote “FOR” the approval of the Amendment:
| > | The company and our shareholders expect our officers to effectively manage the company’s challenges within a complex and ever-evolving environment. Our officers are frequently called upon to make critical decisions under significant time pressure. Such skills, while essential to the management of our company, may expose our officers to substantial personal liability from litigants seeking to impose liability on the basis of hindsight and regardless of merit. Limiting this personal risk would provide comfort to and empower our officers to best exercise their business judgment in furtherance of the interests of our company and our shareholders. |
| > | The Amendment strikes a balance between shareholders’ interest in accountability and their interest in the company being able to attract and retain experienced and high-quality officers to work on its behalf. Accordingly, the Board believes that the Amendment is in the best interests of the company and our shareholders. |
| > | Several other states already permit corporations to eliminate or limit officer liability, and the Board believes it is appropriate for public companies in states that allow exculpation of officers to have exculpation clauses in their company charters. |
| > | The Amendment more closely aligns the existing protections available to our directors with those available to our officers, enabling them to exercise their business judgment without the potential for distraction posed by the risk of personal liability. |
| > | Given the narrow class and type of claims for which officers’ liability would be exculpated, the Board believes the Amendment would not negatively impact shareholder rights. |
| > | The Amendment helps to clarify the application of exculpation provisions to individuals serving as both a director and an officer. |
| > | To the extent the company’s peers adopt similar exculpation clauses that limit the personal liability of officers, failing to adopt the Amendment could negatively impact our recruitment and retention of exceptional officer candidates. |
| > | The Amendment may reduce the company’s future insurance needs and costs. |
For these reasons, the Board recommends that you vote “FOR” the approval of the Amendment.
Proposal 5: Ratification of the Company’s Independent Registered Public Accounting Firm
The Audit Committee has appointed Deloitte & Touche LLP (“Deloitte”) as the Firm’s independent registered public accounting firm to audit the Consolidated Financial Statements of PJT Partners Inc. and its subsidiaries for the year ending December 31, 2023. A resolution is being presented to our shareholders requesting ratification of the appointment of Deloitte.
The Board recommends that you vote “FOR” the ratification of the appointment of Deloitte as the company’s independent registered public accounting firm.
| 6 | Executive Summary |
Corporate Governance
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Proposal 1: Election of Directors The Board has nominated two directors, Thomas M. Ryan and K. Don Cornwell, for election as Class II directors. If elected, each Class II director will serve until the annual meeting of shareholders in 2026, or until succeeded by another qualified director who has been elected. |
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Board Recommendation The Board recommends that you vote “FOR” both nominees. |
| 7 | Corporate Governance |
This section of our Proxy Statement contains information about the Board of Directors, including our nominees, and key elements of our corporate governance. The Board places great value on strong governance controls, and we have structured our corporate governance in a manner we believe closely aligns with the best interests of the company and our shareholders.
The nominees have consented to being named in this Proxy Statement and to serve if elected. The Board has no reason to believe that any nominee will be unavailable or unable to serve as a director, but if for any reason any nominee should not be available or able to serve, the shares represented by all valid proxies will be voted by the person or persons acting under said proxy in accordance with the recommendation of the Board.
Meet the Board of Directors
The Board consists of seven directors, all of whom are independent with the exception of our Chairman and CEO and K. Don Cornwell. The Board is classified into three classes, designated Class I, Class II and Class III. The term of office of the members of one class of directors expires each year in rotation so that the members of one class generally are elected at each annual meeting to serve for full three-year terms or until their successors are elected and qualified, or until such director’s death, resignation or retirement. Each class consists, as nearly as possible, of one-third of the total number of directors constituting the entire Board.
The Board is comprised of actively engaged individuals with diverse skills, experiences and backgrounds that contribute to the effective oversight of our company. The Board believes these varied qualifications help to inform and oversee decisions regarding the company’s long-term strategic growth. Under the guidance of the Nominating/Corporate Governance Committee, the Board reviews the structure of the Board, its committees and the individual directors and, as part of that process, considers, among other things, issues of structure, leadership and oversight needs and skills to guide the company in executing its long-term strategic objectives.
Nominees for Class II Directors Whose Terms Will Expire in 2026
Thomas M. Ryan | Lead Independent
Director and Compensation Committee Chair |
Age: 70 | Director since October 2015
Professional Highlights
Thomas M. Ryan is the former Chairman and Chief Executive Officer of CVS Health Corporation, formerly known as CVS Caremark Corporation, a pharmacy healthcare provider (“CVS”). He served as Chairman of CVS from April 1999 to May 2011 and Chief Executive Officer of CVS from May 1998 to February 2011, and also served as President from May 1998 to May 2010. Mr. Ryan serves on the board of Five Below, Inc., and is an Operating Partner of Advent International. Mr. Ryan was a director of Yum! Brands, Inc. from 2002 to 2017, Reebok International Ltd. from 1998 to 2005, Bank of America Corporation from 2004 to 2010 and Vantiv, Inc. from 2012 to 2015.
Skills & Qualifications
Mr. Ryan’s role as Chairman and Chief Executive Officer of a global pharmacy healthcare business, his extensive operations and management experience, his expertise in finance and strategic planning, as well as his public company directorship and committee experience, positions him well to serve on the Board.
K. Don Cornwell | Age: 52 | Director
since January 2023
Professional Highlights
K. Don Cornwell is a Co-Founder and the Chief Executive Officer of Dynasty Equity, a global sports investment firm focused on acquiring minority interests in sports franchises and other related assets and rights. Prior to founding Dynasty Equity in 2022, Mr. Cornwell was a founding partner at PJT Partners, joining the company in 2015 following an 18-year career at Morgan Stanley. At Morgan Stanley, Mr. Cornwell was in the Mergers and Acquisitions Group and established a particularly focused area of expertise in media and entertainment, specifically in sports and gaming. Prior to leaving Morgan Stanley, he served as Head of Global Sports Investment Banking. Before he joined Morgan Stanley, Mr. Cornwell worked at McKinsey & Co. as a management consultant and in corporate development for the National Football League. He sits on the Board of Trustees of the Harlem Children’s
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Zone, an education and social services organization in Central Harlem; the East Harlem Tutorial Program, an after-school program for children in East Harlem; the Board of Directors of New York Cares, New York City’s largest volunteer organization; and the VFILES Foundation, an organization with the mission to increase business ownership for creators in underrepresented communities. Mr. Cornwell served on the Management Board of Stanford University’s Graduate School of Business until July 2022. He received an MBA from Stanford University’s Graduate School of Business and an AB in Government from Harvard College.
Skills & Qualifications
Mr. Cornwell’s extensive experience and expertise in investment banking and in the financial services industry, as well as his deep knowledge of PJT Partners’ business, operations and culture, and his understanding of the company’s clients, employees and other stakeholders, position him to contribute valuable acumen and insight to the Board.
Continuing Class I Directors Whose Terms Will Expire in 2025
Paul J. Taubman | Chairman and Chief
Executive Officer | Age: 62 | Director since October 2015
Professional Highlights
Paul J. Taubman has been our Chairman and CEO since 2015. Prior to founding PJT Partners, Mr. Taubman spent nearly 30 years at Morgan Stanley where he served in a series of increasingly senior positions, most recently as executive vice president and Co-President of Institutional Securities, with responsibility for all of the firm’s investment banking, capital markets, and sales and trading businesses. Mr. Taubman serves in a leadership role on numerous philanthropic efforts including Board President of New York Cares, New York City’s largest volunteer organization; Trustee and executive committee member of Cold Spring Harbor Laboratory; Board Member of the Partnership for New York City; Advisory Council member at the Stanford Graduate School of Business; National Advisory Board member of Youth, Inc.; and Trustee of the Foundation for Empowering Citizens with Autism. Mr. Taubman received a B.S. in Economics from the Wharton School of the University of Pennsylvania and an M.B.A. from Stanford University’s Graduate School of Business.
Skills & Qualifications
Mr. Taubman’s extensive experience gained from various senior leadership roles in investment banking and the financial services industry, as well as his many years of providing strategic advice to management teams and boards around the world, operating in a wide array of industries bring valuable knowledge and expertise to the Board. In addition, Mr. Taubman’s role as our Chief Executive Officer brings management perspective to Board deliberations and provides critical information about the status of our day-to-day operations.
Emily K. Rafferty | Nominating /
Corporate Governance Committee Chair |
Age: 74 | Director since October 2015
Professional Highlights
Emily K. Rafferty is President Emerita of The Metropolitan Museum of Art. She was elected President of the Museum in 2005 and served in that role until her retirement in March 2015. She had been a member of the Museum’s staff since 1976 serving in various roles in development, membership and external affairs until becoming President and Chief Administrative Officer in 2005, overseeing some 2,000 full- and part-time employees and volunteers. Ms. Rafferty’s global experience in some 50 countries on behalf of the Museum included interactions and negotiations with many senior world leaders. She is a Vice Chair of the National September 11 Memorial & Museum, a Board member of Carnegie Hall, the Hospital for Special Surgery, the Asia Society, Civitella Ranieri, an Artist Residency Program in Italy, the Hispanic Society Museum and Library, and the Association of Art Museum Curators. She is also a Board member of Koç Holdings, Istanbul from 2018 to the present; a member of the Advisory Council of the American University of Beirut and the Council on Foreign Relations. Ms. Rafferty is principal of Emily K. Rafferty & Associates, a consulting resource for non-profit institutions. Ms. Rafferty served as a Board member of the New York Federal Reserve Bank from 2011 to 2017 (Chair, 2012 to 2016), Senior Adviser for Heritage Protection and Conservation for UNESCO from 2015 to 2017 and was Chair of NYC & Company (the city’s tourism, marketing
| 9 | Corporate Governance |
and partnering organization) from 2008 to 2020 and continues to serve as an ex-officio board and executive committee member. She previously consulted for Russell Reynolds Associates in the firm’s non-profit sector and The Shed, a NYC performing arts center.
Skills & Qualifications
Ms. Rafferty’s breadth and depth of expertise and experience in human capital management, operations and senior executive leadership, her global expertise as well as her understanding of monetary policy and regulation of financial institutions, provide valuable knowledge and insight to the Board.
Continuing Class III Directors Whose Terms Will Expire in 2024
James Costos | Age: 60 | Director since
February 2017
Professional Highlights
James Costos served as the U.S. Ambassador to the Kingdom of Spain and Principality of Andorra from August 2013 to January 2017. Mr. Costos currently serves as president of Secuoya Studios, the TV and film content production arm of Secuoya Group. Previously, Mr. Costos was Vice President at Home Box Office (“HBO”) from 2007 to 2013. He has also served as an executive at Revolution Studios and held senior leadership roles for more than a decade at Tod’s S.p.A. and Hermès of Paris. Mr. Costos serves as an advisor to FC Barcelona, is an advisor and senior managing director at Dentons, in their Global Venture Technology group, and sits on the Board of Directors of Grifols S.A. He is a passionate supporter of several cultural and humanitarian organizations, including the Reina Sofia Museum and is on the Board of Directors of the Human Rights Campaign, the largest LGBTQ+ advocacy and political lobbying organization in the United States. Mr. Costos earned his B.A. in Political Science from the University of Massachusetts.
Skills & Qualifications
Mr. Costos’s international government relations and policy experience, international marketing, operations, technology and executive leadership experience positions him well to serve on the Board. His strong international experience brings a geographically diverse perspective to the oversight of our multi-national business operations.
Grace R. Skaugen | Age: 69 | Director
since July 2020
Professional Highlights
Grace Reksten Skaugen, a Norwegian national, has extensive experience working with a broad array of European companies. She previously served as a senior advisor to Deutsche Bank (2007-2014) and HSBC (2014-2019). In 2009, Ms. Skaugen co-founded the Norwegian Institute of Directors, where she still serves on its board. From 2012 to 2015, she was deputy chair of the Norwegian oil company Statoil (now Equinor) and served on its board for 13 years. Ms. Skaugen has served as the deputy chair and chair of the Compensation Committee at Orkla ASA and has been a board member, and member of the Compensation Committee and the Sustainability Committee, at Lundin Energy AB. Today, she chairs Euronav NV (member of the Compensation Committee, the Sustainability Committee and the Corporate Governance and Nomination Committee). She also chairs Orrön Energy AB (member of the Compensation Committee). She is a board member of Investor AB (member of the Audit and Risk Committee) and Panoro Energy (member of the Compensation and Sustainability Committees). Ms. Skaugen is also a council member and trustee of the International Institute for Strategic Studies (IISS) in London. She has previous investment banking experience, having worked at the Nordic bank SEB, where she advised companies within the energy, transportation and technology sectors. Ms. Skaugen started her career as a postdoctoral researcher at Columbia Radiation Laboratory in New York. She is a physicist by education and holds a PhD in laser physics from Imperial College in London. She also holds an M.B.A. from the Norwegian School of Management, BI.
| 10 | Corporate Governance |
Skills & Qualifications
Ms. Skaugen’s experience and expertise in the international financial services industry, as well as her extensive corporate governance and board experience, provide unique insights into our business and add industry-specific expertise and knowledge to the Board. Her strong international experience brings a geographically diverse perspective to the oversight of our multi-national business operations.
Kenneth C. Whitney | Audit Committee
Chair | Age: 65 | Director since October 2015
Professional Highlights
Kenneth C. Whitney has managed a private family investment office since April 2013, focused on start-up businesses and entertainment projects. Since his retirement from Blackstone Inc. in April 2013 until September 2015, he was also a Senior Advisor to Blackstone. Mr. Whitney was previously a Senior Managing Director and Head of Blackstone’s Investor Relations & Business Development Group from 1998 to April 2013. After joining Blackstone in 1988, Mr. Whitney focused his efforts on raising capital for Blackstone’s private investment funds and the establishment of Blackstone affiliates in the alternative investment area. Mr. Whitney began his career at Coopers & Lybrand in 1980, where he spent time in the firm’s accounting and audit areas as well as in the tax and mergers and acquisitions areas. Mr. Whitney is a Tony Award-winning producer, and currently sits on the Board of Trustees for The First Tee and the University of Delaware, where he received a B.S. in Accounting.
Skills & Qualifications
Mr. Whitney’s experience and expertise in the private equity and financial services industry, as well as his extensive financial, accounting, operations and management experience, provide unique insights into our business and add industry-specific expertise and knowledge to the Board.
| 11 | Corporate Governance |
Experience and Skills of Our Directors and Nominees
All of our directors and nominees are highly accomplished and experienced professionals, with fundamental attributes of senior leadership including integrity, honesty, intellectual curiosity, good judgment, strong work ethic, strategic thinking, vision, commitment to mission, excellent communication and collaboration skills, and the ability and willingness to challenge management constructively when needed. In addition to these and other core attributes, our directors and nominees possess a variety of other skills and experience necessary to carry out the Board’s responsibilities. The presentation below is a high-level summary of those skills and experience found on the Board, with information provided by the directors and nominees:
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Banking & Financial Services |
Breadth and depth of experience in the company’s business and industry |
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Executive Experience |
Experience in senior management roles, including serving as a CEO or senior executive, within a complex organization |
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Financial |
Expertise in overseeing the presentation of financial results as well as internal controls |
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Human Capital Management |
Experience in management of human resources and employee compensation |
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International |
Broad leadership experience within global companies and understanding of international markets |
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IT & |
Expertise or experience in information technology, including understanding the importance of maintaining the trust of our clients through the protection of their information |
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Legal & |
Experience in legal and regulatory affairs, and regulated industries, including as part of a business and/or through positions with government and/or regulatory bodies |
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Marketing & |
Experience overseeing internal and external communications and engagement with stakeholders |
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Public Company Experience |
Previous or current service as a director of other publicly traded companies |
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Risk Management |
Experience overseeing complex risk management matters |
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Strategic Planning |
Experience driving the strategic direction and growth of an organization |
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ESG/Sustainability |
Expertise or experience in Environmental, Social and Governance (“ESG”) and sustainability matters |
| 12 | Corporate Governance |
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Professional Skills |
Cornwell |
Costos |
Rafferty |
Ryan |
Skaugen |
Taubman |
Whitney |
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| 13 | Corporate Governance |
Diversity of the Board
Consistent with our commitment to diversity, equity and inclusion, the Board comprises an inclusive mix of backgrounds and perspectives from historically underrepresented groups. The Board includes two female directors, one Black director and one LGBTQ+ director. The Board also includes a mix of tenures, benefiting from the experience of longer-term directors and the fresh perspectives of more recently appointed directors. Below is more detailed information about the Board’s diversity, with information provided by the directors and nominees:
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Background |
Cornwell |
Costos |
Rafferty |
Ryan |
Skaugen |
Taubman |
Whitney |
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Black or African American |
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Gender |
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Female |
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LGBTQ+ |
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Age/Tenure |
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Age |
52 |
60 |
74 |
70 |
69 |
62 |
65 |
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Tenure |
—(1) |
6 |
8 |
8 |
3 |
8 |
8 |
(1) Mr. Cornwell was appointed to the Board effective as of January 20, 2023.
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Board Diversity at a Glance |
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A majority of the Board — 57%— are members of groups that are historically underrepresented on public company boards. |
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Additional Board Characteristics |
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71% Independent |
64 Average Age |
6 years Average Tenure |
| 14 | Corporate Governance |
Guiding Principles, Corporate Governance Practices and Policies of the Board
The Board is committed to corporate governance that serves the best interests of our company and shareholders, and to active engagement with our shareholders throughout the year. The following summarizes certain highlights of the Board’s guiding principles, corporate governance practices and policies:
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Breadth of Skills |
From the inception of our company, we have sought to ensure that each of our directors embodied a level of experience and expertise that was outsized relative to an early-stage company to ensure immediate and effective implementation of our company’s long-term strategic goals and to provide oversight of our company’s risk profile and strategic goals. The Board is committed to the ongoing evaluation of its composition, including the skills and expertise of each director as well as the diversity of our directors and how their collective skills align with our evolving business strategy. |
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Commitment to Diversity |
The Board believes that fostering an inclusive culture — which welcomes differing perspectives, backgrounds and beliefs — enables us to provide the best advice and insights to our clients. As such, diversity and the inclusion of historically underrepresented groups are important considerations in the composition of the Board. |
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Independent & Engaged Board |
Five of our seven current directors (71%) are independent, with all Board committees comprised entirely of independent directors. During 2022, each director then serving on the Board attended at least 75% of all Board meetings and meetings of each Board committee on which they served. |
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Strong Lead Independent Director |
The Board’s Lead Independent Director facilitates independent oversight of management. Our Lead Independent Director is responsible for coordinating the efforts of the non-management directors to ensure that objective judgment is brought to bear on important issues involving the management of the company, including the performance of senior management. See “Board Leadership Structure —Lead Independent Director” below. |
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Shareholder Engagement and Responsiveness |
As part of our annual shareholder engagement program, we contact many of our largest shareholders to offer meetings to discuss a range of topics related to the company’s strategy, governance profile, executive compensation practices, corporate sustainability, human capital management and other matters. A thematic summary of recent investor conversations is included under the section “Shareholder Engagement and Responsiveness” on page 22. |
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Annual |
The Board conducts a self-evaluation annually to determine whether it, its committees and its individual members are functioning effectively and whether the Board possesses the appropriate expertise and diversity. Each committee of the Board also conducts a self-evaluation annually and reports the results to the Board. The Board, acting through the Nominating/ Corporate Governance Committee, monitors the mix of specific experience, qualifications, skills and diversity of its current directors in order to assure that the Board, as a whole, has the necessary tools to perform its oversight function effectively in light of the company’s business and structure. |
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Open Channels of Communication Between the Board and Our Company |
The Board maintains open channels of communication across our company. Our directors engage and spend time with our partners and employees throughout the year in a variety of forums. |
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Minimum Equity Ownership Guidelines |
We have minimum equity ownership guidelines for our directors that require significant ownership of our common stock. Our directors are required to hold equity in our company with a market value equal to or greater than three times their annual retainer. All of our directors are or are expected to be within the time ascribed in our ownership guidelines, in compliance with our Minimum Equity Ownership Guidelines. |
| 15 | Corporate Governance |
Board Leadership Structure
Chairman of the Board
The Board understands there is no single, generally accepted approach to providing board leadership and that given the dynamic and competitive environment in which we operate, the appropriate leadership may vary as circumstances warrant. Our Certificate of Incorporation provides that Mr. Taubman, to the extent that he serves as our CEO and as a member of the Board, will serve as Chairman of the Board. Further, the Board currently believes it is in our company’s best interests to have Mr. Taubman serve as Chairman of the Board as well as our CEO. The Board believes combining these roles promotes effective leadership and provides the clear focus needed to execute our business strategy and objectives.
Lead Independent Director
Another important part of the Board’s leadership structure is the robust role of the Lead Independent Director. The Board has appointed Mr. Ryan as its Lead Independent Director and in this role, Mr. Ryan helps coordinate the efforts of the non-management directors to ensure that objective judgment is brought to bear on important issues involving the management of the company, including the performance of senior management. The authority and responsibility of our Lead Independent Director role is summarized in the following presentation:
| 16 | Corporate Governance |
Strong Lead Independent Director
The Lead Independent Director:
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Presides over all meetings of the Board at which the Chairman is not present, including any executive sessions of the independent directors or the non-management directors |
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Provides leadership and serves as temporary Chairman in the event of the inability of the Chairman to fulfill his role due to crisis or other event or circumstance that would make leadership by existing management inappropriate or ineffective, in which case the Lead Independent Director shall have the authority to convene meetings of the full Board or management |
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Assists in scheduling Board meetings and approves meeting schedules to ensure that there is sufficient time for discussion of all agenda items |
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Collaborates with the CEO in determining the need for special meetings of the Board |
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Collaborates with the CEO on Board meeting agendas and approves such agendas |
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Communicates to the CEO, together with the Chairman of the Compensation Committee (if the Lead Independent Director and the Chairman of the Compensation Committee are not the same person), the results of the Board’s evaluation of CEO performance |
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Coordinates Chairman and CEO succession planning |
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Confers with the Chairman and CEO and senior management on the overall strategy of the company |
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Is available for consultation and direct communication if requested by major shareholders |
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Acts as the liaison between the independent or non-management directors and the Chairman, as appropriate |
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Calls meetings of the independent or non-management directors when necessary and appropriate |
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Provides leadership, in conjunction with the Chairman, in the Board evaluation process |
| 17 | Corporate Governance |
Board Committees
The Board has three standing committees: an Audit Committee; a Compensation Committee; and a Nominating/Corporate Governance Committee. The current charters for each of these committees are available on our corporate website at www.pjtpartners.com on the “Investor Relations/Governance” page. Further, we will provide copies of these charters without charge to any shareholder upon written request. Requests for copies should be addressed to our Corporate Secretary. The Board also may create additional committees for such purposes as the Board may determine.
Board Committee Membership at a Glance
| Audit Committee |
Compensation Committee |
Nominating/ Corporate Governance Committee |
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| K. Don Cornwell (Non-Independent) | |||
| James Costos (Independent) |  |
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| Emily K. Rafferty (Independent) | |
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| Thomas M. Ryan (Independent) | |
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| Grace R. Skaugen (Independent) | |
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| Paul J. Taubman (Chairman & CEO) | |||
| Kenneth C. Whitney (Independent) | |
| Committee Chair |
Committee Member |
Audit Committee
Our Audit Committee consists of Mr. Whitney (Chair), Mr. Costos and Ms. Skaugen, each of whom is “independent” and “financially literate” as such terms are defined by the applicable rules of the NYSE. The Board has determined that Mr. Whitney, Mr. Costos and Ms. Skaugen possess accounting or related financial management expertise within the meaning of the NYSE listing standards and that each of Mr. Whitney, Mr. Costos and Ms. Skaugen qualifies as an “audit committee financial expert” as defined under the applicable SEC rules.
The Audit Committee assists the Board in fulfilling its responsibility relating to the oversight of:
| (1) | the quality and integrity of our financial statements; |
| (2) | our compliance with legal and regulatory requirements; |
| (3) | our independent registered public accounting firm’s qualifications and independence; and |
| (4) | the performance of our internal audit function and independent registered public accounting firm. |
Additional information regarding the functions performed by our Audit Committee is set forth in the “Report of the Audit Committee” included in this Proxy Statement.
Compensation Committee
Our Compensation Committee consists of Mr. Ryan (Chair) and Ms. Rafferty, each of whom is “independent” as defined by the applicable rules of the NYSE and is a “non-employee director” as defined by the applicable rules and regulations of the SEC. The Compensation Committee discharges the responsibilities of the Board relating to the oversight of our compensation programs and compensation of our executives, including oversight of the company’s human capital management.
The Compensation Committee has the authority under its charter to retain outside consultants or advisors, as it deems necessary or advisable. In accordance with this authority, the Compensation Committee has retained Willis Towers Watson & Co. (“Willis Towers Watson”) as its independent outside compensation consultant primarily to assist in analyzing the competitiveness of the company’s executive compensation as well as to provide expertise and advice on various matters brought before the Compensation Committee. On February 22, 2023, the Compensation Committee considered the independence of Willis Towers Watson and determined that its work did not raise any conflict of interest.
| 18 | Corporate Governance |
Nominating/Corporate Governance Committee
Our Nominating/Corporate Governance Committee consists of Ms. Rafferty (Chair), Mr. Costos and Mr. Ryan, each of whom is “independent” as such term is defined by the applicable rules of the NYSE. The Nominating/Corporate Governance Committee assists the Board in fulfilling its responsibility relating to corporate governance by:
| (1) | identifying individuals qualified to become directors and recommending that the Board select the candidates for all directorships to be filled by the Board or by the shareholders; |
| (2) | recommending directors to serve on committees and evaluating the operation and performance of the committees; |
| (3) | developing and recommending to the Board the content of our Corporate Governance Guidelines and Code of Business Conduct and Ethics; |
| (4) | overseeing the company’s ESG strategy; and |
| (5) | otherwise taking a leadership role in shaping our corporate governance. |
Director Recruitment
The Board monitors the mix of specific experience, qualifications and skills of its directors in order to assure that the Board, as a whole, has the necessary tools to perform its oversight function effectively in light of the company’s business and structure. While the Board does not have a formal diversity policy, the Board believes that fostering an inclusive culture, which welcomes differing perspectives, backgrounds and beliefs, enables us to provide the best advice and insights to our clients.
The Nominating/Corporate Governance Committee is responsible for reviewing the qualifications of potential director candidates and recommending to the Board those candidates to be nominated for election to the Board. When considering director candidates, the Nominating/Corporate Governance Committee seeks individuals with backgrounds and qualities that, when combined with those of the company’s incumbent directors, provide a blend of skills and experience to further enhance the effectiveness of the Board. More specifically, the Nominating/Corporate Governance Committee considers:
| (1) | Individual qualifications, including: |
| > | Relevant career experience |
| > | Strength of character |
| > | Mature judgment |
| > | Familiarity with the company’s business and industry |
| > | Independence of thought |
| > | Ability to work collegially |
| > | Corporate governance background |
| > | Financial and accounting background |
| > | Executive compensation background |
| (2) | All other factors the Nominating/Corporate Governance Committee considers appropriate, including: |
| > | Size, composition and combined expertise of the existing Board |
| > | Board diversity |
| > | Existing commitments to other businesses |
| > | Potential conflicts of interest with other pursuits |
| > | Legal considerations |
When vacancies on the Board exist or are expected, or a need for a particular expertise has been identified, the Nominating/Corporate Governance Committee may seek recommendations for director candidates from current directors and management and may also engage a search firm to assist in identifying director candidates. In the case of Mr. Cornwell, who was appointed to the Board effective as of January 20, 2023, he was recommended to the Nominating/Corporate Governance Committee as a director candidate by our Named Executive Officers.
| 19 | Corporate Governance |
The Nominating/Corporate Governance Committee will also consider properly submitted shareholder recommendations for director candidates under the same procedure used for considering director candidates recommended by current directors and management. Shareholder recommendations for director candidates should include the candidate’s name and specific qualifications to serve on the Board, and the recommending shareholder should also submit evidence of such shareholder’s ownership of shares of our common stock, including the number of shares owned and the length of time of such ownership. Recommendations should be addressed to the Corporate Secretary. In addition, any shareholder who wishes to submit director nominations must satisfy the notification, timeliness, consent and information requirements set forth in our Amended and Restated Bylaws. See “Shareholder Proposals and Nominations for Our 2024 Annual Meeting” on page 86 below.
Risk Management
Our risk management framework is designed to instill a culture of openness and transparency. We have a complementary array of policies, procedures and processes to identify, assess, monitor and manage the risks inherent in our business activities, supported by the work of committees at both the management level and the Board level. This framework is reasonably designed to identify important risks and communicate them to senior management and, where appropriate, to the Board.
The Board’s Role in Risk Oversight
The Board understands the importance of effective risk oversight as fundamental to both the success of our company and its obligation to our shareholders. While our management is responsible for the day-to-day management of risk, the Board, along with senior management, is responsible for promoting an appropriate culture of risk management within the company and for overseeing our aggregate risk profile and monitoring how we address specific risks. Throughout the year, the Board and each of its committees dedicate a portion of their time to review and discuss specific risk topics.
The company’s management team regularly reports to the Board the significant risks we face, highlighting any new risks that may have arisen since they last met. In addition, our directors have the opportunity to meet routinely with members of senior management in connection with their consideration of matters submitted for the approval of the Board and the risks associated with such matters. On a periodic basis, members of senior management report on our top enterprise risks and the steps management has taken or will take to mitigate these risks. For example:
| > | The Board periodically meets with our Chief Technology Officer to assess cybersecurity risks and to evaluate the status of our cybersecurity efforts, which include a broad range of tools and training initiatives that work together to protect the data and systems used in our business. The Board is aware of the threats presented by cybersecurity incidents and is committed to taking measures to help prevent and mitigate the effects of any such incidents. |
| > | Our Chief Compliance Officer provides updates to the Board on regulatory and compliance matters, which includes an annual in-depth review. |
| > | Our General Counsel updates the Board regularly on material legal and regulatory matters. |
| > | Our Chief Human Resources Officer provides updates to the Board on Human Capital matters, including hiring investment, talent, and diversity and inclusion. |
| > | The senior leadership of our shareholder advisory business also presents periodically to the Board on key trends shaping the shareholder landscape across governance, executive compensation, activism-defense, strategic investor relations and ESG matters. |
The Board Committees’ Role in Risk Oversight
The Board exercises its risk oversight responsibility both directly and through its standing committees. The committees assist the Board by addressing specific matters within their purview, as summarized in the following table. While each committee is responsible for evaluating certain risks and overseeing the management of such risks, the Board keeps itself regularly informed regarding such risks through management and committee reports and otherwise.
| 20 | Corporate Governance |
| Key Risk Oversight Responsibilities of the Board’s Committees | ||
| Audit Committee |
Compensation Committee |
Nominating/Corporate Governance Committee |
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> Financial statements, accounting and financial reporting processes > Qualifications, performance, and independence of independent registered public accounting firm > Performance of internal audit > Assessment of major risks facing the company and management’s efforts to manage those risks |
> Overall compensation philosophy > Corporate goals and objectives relevant to compensation of the CEO and other Executive Officers, including annual performance objectives > Evaluation of the CEO’s performance and determination of the CEO’s compensation > Review of other Executive Officers’ compensation > Modification of any executive compensation program yielding payments not reasonably related to executive and corporate performance > Review of potential material adverse effects on the company arising from compensation programs and plans for all employees > The company’s human capital management strategy |
> Director and committee member selection > Evaluation of the Board, committees and management > Development of the company’s corporate governance principles > Evaluation of director independence and possible conflicts of interest > Composition and size of the Board and committees > The company’s ESG strategy |
Cybersecurity and Data Protection
We are continually evolving our technology platform to respond to innovation, cyber threats and the ongoing growth of our business. Given the potential impact of a security breach on our business and reputation, we are committed to continued investment in our technology to ensure the security of our information.
Breaches of our network security systems could involve attacks that are intended to obtain unauthorized access to, or to destroy, sensitive or proprietary information, or to disable, degrade or sabotage our systems. These attempts may involve the introduction of computer viruses or malware, phishing or email spoofing, denial-of-service, or cyber-attacks of other means that originate from a broad array of sources, including unknown third parties. We take various measures to ensure the confidentiality, integrity, and availability of our systems, including implementation of security controls and regular training of our employees with respect to measures we can take to try to thwart cybersecurity attacks. Further, all of our employees are trained at least annually on our information security polices and written supervisory procedures. Employees are subject to reviews if they miss the training or fail repeated phishing tests. The Board takes an active role in reviewing our cybersecurity program.
| 21 | Corporate Governance |
Culture of Compliance
As a financial services company, our business is subject to extensive rules and regulations in the United States and around the globe. Adherence to these various rules and regulations is paramount to the reputation and success of our company. As such, all of our employees are required to participate in various mandatory regulatory and compliance training programs designed to educate our employees on the many laws, rules and regulations that impact our company as well as reinforce the gravity of adherence to such laws, rules and regulations. Such programs include, without limitation, regular compliance training sessions on the company’s Global Compliance Policies Manual and Written Supervisory Procedures, including training sessions on our Anti-Money Laundering/Know Your Customer rules and procedures. In addition, all employees receive training on PJT Partners’ Code of Business Conduct and Ethics and our policies and procedures for reporting wrongdoing (see “Whistleblower Program” below).
Corporate Governance Guidelines
The Board has adopted Corporate Governance Guidelines that address the following key corporate governance subjects, among others: director qualification standards; director responsibilities; director access to management and, as necessary and appropriate, independent advisors; director compensation; director orientation and continuing education; management succession; and an annual performance evaluation of the Board. In February 2023, the Nominating/Corporate Governance Committee and the Board reviewed the Corporate Governance Guidelines, and the Board approved and re-adopted them.
You are encouraged to visit our website at www.pjtpartners.com to view or to obtain copies of our Corporate Governance Guidelines. You may also obtain, free of charge, a copy of our Corporate Governance Guidelines by directing your request in writing to our Corporate Secretary.
Code of Business Conduct and Ethics
The Board has adopted a Code of Business Conduct and Ethics for our directors, officers and employees that addresses these important topics, among others: conflicts of interest; corporate opportunities; confidentiality of information; fair dealing; protection and proper use of our assets; compliance with laws, rules and regulations (including insider trading laws); and encouraging the reporting of any illegal or unethical behavior. In 2022, the Nominating/Corporate Governance Committee and the Board reviewed the Code of Business Conduct and Ethics, and the Board approved and re-adopted it.
Any waiver of the Code of Business Conduct and Ethics for our directors or officers may be made only by the Board or one of its committees. We intend to disclose on our website any amendment to, or waiver of, any provision of the Code of Business Conduct and Ethics applicable to our directors and Executive Officers that would otherwise be required to be disclosed under the rules of the SEC or the NYSE.
You are encouraged to visit our website at www.pjtpartners.com to view or to obtain copies of our Code of Business Conduct and Ethics. You may also obtain, free of charge, a copy of our Code of Business Conduct and Ethics by directing your request in writing to our Corporate Secretary.
Shareholder Engagement and Responsiveness
As part of our annual shareholder engagement program, we contact many of our largest shareholders to offer meetings to discuss a range of topics related to the company’s strategy, governance profile, executive compensation practices, corporate sustainability, human capital management and other matters. These meetings may include participation by our Managing Partner, CFO, Chief Human Resources Officer and other members of management. This engagement program complements our normal course investor dialogue that we have conducted since the beginning of our company focused on our business and strategy, and demonstrates our commitment to maintaining an open dialogue with all of our shareholders.
In conversations throughout 2022, we discussed a range of topics, including:
| ˃ | Board Composition and Diversity |
| ˃ | Board Structure and Governance Practices |
| ˃ | Business Strategy and Priorities |
| ˃ | Corporate Sustainability |
| 22 | Corporate Governance |
| ˃ | Executive Compensation |
| ˃ | Human Capital Management and Culture |
Human Capital Management Overview
Human Capital Management Philosophy
Our culture drives our success. From day one of our company, we have been committed to developing our culture as a commercial differentiator—one that attracts and retains people in order to create a world-class company built for the long term. Our culture is defined by strong character, differentiated capabilities and collaboration. These essential qualities help us build stronger client relationships and better outcomes for our clients. Our human capital successes are evident through the number and quality of hires we have made, our historically low levels of attrition and the consistent positive feedback we receive through our employee surveys. Reinforcement of the culture we are building comes through engagement with our employees, the reward principles we apply to compensation and promotion decisions and our various talent development initiatives, which continue to evolve as we grow.
As of December 31, 2022, we employed 907 individuals globally, including 105 partners.
Reward Principles
We believe our company culture is reinforced by rewarding employees who exemplify the pillars of our culture. Since the inception of our company, our compensation and promotion structure has been designed to encourage the qualities we believe to be necessary for building a sustainable franchise. Our compensation is not formulaic and does not include individual revenue pay-outs. For a broad group of employees, discretionary bonuses also typically include a company stock component to ensure long-term focus and alignment with the interests of our company. All compensation and promotion decisions consider a number of factors within each of the following areas of impact, which are communicated to managers and employees alike:
| Character | Collaboration | Commercial Impact / Client Relationships | Content |
Board Oversight of Human Capital Management
The Board actively oversees the human capital management strategy of the company. Some key examples of the Board’s engagement include:
| ˃ | The Board maintains and periodically reviews a succession plan for our Chairman and CEO. The Board’s review includes an assessment of the experience, performance and skills of potential successors in these critically important roles. The Board holds CEO succession planning discussions in executive sessions led by the Lead Independent Director. |
| ˃ | The Board, including the Compensation Committee, maintains an active information flow and directs senior management to update and consult it regularly on key talent hires and other important aspects of the company’s human capital strategy. Under the Board’s oversight, the company continuously refines human capital priorities based on business drivers, employee feedback and the overall environment for talent. |
| ˃ | Directors actively engage and spend time with our senior management and other employees in a variety of ways. Our directors periodically attend partner meetings and dinners, participate in our town hall meetings, and meet with groups and individuals at our company. |
| ˃ | Directors receive relevant employee communications, including announcements of transactions on which the company has advised. |
Employee Feedback and Engagement
We view active dialogue with our employees as essential to maintaining our unique culture. Since 2017, we have conducted various employee surveys to formally gather systematic feedback. Participation has been high with greater than 75% of employees responding each year. The consistently positive themes include a
| 23 | Corporate Governance |
strong belief in our commitment to doing the right thing for both our clients and our company, a belief that we have a differentiated culture, a commitment to excellence and a strong sense of respect among colleagues. In addition, we host regular company-wide town halls to connect employees with our management team and business leaders.
We use feedback from the survey, town halls and other employee connectivity forums to inform our ongoing efforts toward continuous improvement.
We have numerous other channels through which we engage with our employees on human capital topics, including our talent development committee, women’s development series, individual performance reviews and other less formal forums, such as regularly scheduled meetings by business and level. We use these channels to solicit input on issues, such as resourcing and training priorities. We have also established forums for engagement on broadening our diversity lens, including through our employee resource groups, such as the PJT Women’s Network, the PJT Black Professional Network and PJT Pride.
Employer of Choice Initiatives
We prioritize the health and well-being of our employees and their families. We have always aimed to provide pay, benefits and other support that seeks to meet the varying needs of our employees. Our total rewards package is based on competitive pay and is often structured to include discretionary bonuses that include long-term incentives. Such incentives are designed to ensure alignment with our shareholders and the overall success of our company. Other benefits we provide employees include comprehensive health care, 401(k) plan matching and pension contributions, generous paid-time off, discounted gym memberships, access to walk-in health care and emergency child and elderly care. We recognize that mental health is an integral part of our employees’ overall well-being and essential to our success. In addition to providing workshops on mental health awareness, we recently expanded our employee benefits to include a comprehensive mental health platform that provides on-demand access from a broad provider network. Furthermore, we acknowledge work-life balance issues for our employees through paid time off and leave policies that are consistent for all, regardless of level.
It is our practice to review and benchmark not only our compensation practices, but our health and wellness benefits annually and consider feedback from our employees to ensure we remain an employer of choice.
Diversity, Equity and Inclusion (“DE&I”)
Our success as a company is centered on recruiting, developing and retaining top talent from a diverse range of backgrounds and experiences. Fostering an inclusive culture, which welcomes differing perspectives and beliefs, enables us to provide the best advice to our clients.
We continue to expand our company’s diversity efforts. We have implemented initiatives to raise awareness and make DE&I a more regular part of employee conversations. These include diversity training sessions with a globally recognized DE&I consultant attended by 100% of our senior leadership team and 80% of our Partners and Managing Directors overall. We continue to support our employee resource groups, including the PJT Women’s Network, the PJT Black Professional Network and PJT Pride.
In 2021, we conducted our first company-wide survey on our commitment to diversity, which aimed to measure how comfortable our employees feel engaging with DE&I topics. We also included those questions in our broader annual employee survey in 2022. While early in our journey, we were encouraged to see that our employees increasingly believe the company is committed to DE&I and are becoming more comfortable having discussions about DE&I topics at work.
Employee Development
We understand that retaining best-in-class talent and building a company for the long term requires providing the opportunity for career growth. With this in mind, we invest in a range of growth and development opportunities including the improvement of technical skills, client communication and leadership capabilities. We also recognize that our long-term success requires not only the recruitment of best-in-class senior talent, but in providing positive career trajectory and upward mobility for our employees. To that end, we continue to make significant improvements to our promotion processes and the mentorship of our rising talent, including through partnering with external executive coaches. These development efforts need to be consistently reinforced. Our review process and reward principles are designed to facilitate high-quality, honest feedback that supports and rewards the development of our people.
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Engagement with the Broader Community
Our company and our employees are actively engaged in supporting the needs of the underserved in the communities where we operate. To aid in the support of the communities we serve, the company and our employees have donated just over $6 million over the last three years to more than 260 global organizations dedicated to COVID-19 relief, mental health related causes or the advancement of racial equity. Our employees, including our summer interns, have made significant contributions of their time to the communities in which we operate. We have continued to require our summer program participants to complete a community volunteering project as a pre-requisite for of a full-time offer.
Competition
The financial services industry is intensely competitive, and we expect it to remain so. Our competitors for talent include other investment banking and financial advisory firms as well as private equity firms, hedge funds and corporate entities. We compete on both a global and a regional basis, and on the basis of a number of factors, including the strength and depth of client relationships, industry knowledge, transaction execution skills, our range of products and services, innovation, reputation, our ability to offer a compelling career path and competitive rewards.
Our ability to continue to compete effectively in our business will depend upon our ability to attract new employees and retain and motivate our existing employees. As a result, we remain focused on ensuring that our employment proposition includes an attractive culture, development opportunities and competitive rewards.
Corporate Sustainability at PJT Partners
Since the inception of our company, we have been committed to building a premier global advisory focused company based on a culture of excellence, integrity, and purpose, delivering best-in-class advice to decision makers around the globe. Our investment decisions have been guided by a relentless focus on building a company that will stand the test of time.
Our Corporate Sustainability Report is intended to share our ongoing efforts and progress on our sustainability journey across several key aspects of our company, including our people, our business, our governance, how we give back to our communities. Based on the feedback we received from our shareholders, our report includes disclosures aligned with the Investment Banking & Brokerage SASB standard, part of the Value Reporting Foundation. Our 2022 report also includes our greenhouse gas (GHG) emissions data from 2019-2021, under the GHG protocol. Our 2022 Corporate Sustainability Report is available on the Investor Relations section of our website at www.pjtpartners.com.
Director Independence
A majority of the directors serving on the Board must be independent as required by the listing standards of the NYSE and the rules promulgated by the SEC. The company defines an “independent” director in accordance with the corporate governance rules of the NYSE. Under the NYSE’s corporate governance rules, no director qualifies as independent unless the Board affirmatively determines that the director has no “material relationship” with us, either directly or as a partner, shareholder or officer of an organization that has a relationship with us. Further, directors who have relationships covered by one of five bright-line independence tests established by the NYSE may not be found to be independent.
Audit Committee members are subject to heightened independence requirements under NYSE rules and Rule 10A-3 under the Exchange Act. NYSE rules require that in affirmatively determining the independence of any director who will serve on the Compensation Committee, the Board must consider all factors specifically relevant to determining whether a director has a relationship to the company that is material to that director’s ability to be independent from management in connection with the duties of a member of the Compensation Committee.
The Board has determined, based upon its review of all relevant facts and circumstances and after considering all applicable relationships of which the Board had knowledge between or among the directors and the company or our management, that each of our current directors and directors who served during 2022, other than Mr. Taubman and Mr. Cornwell, has no material relationship with us (either directly or as a partner,
| 25 | Corporate Governance |
shareholder or officer of an organization that has a relationship with us) and is “independent” as defined in the NYSE listing standards, the applicable SEC rules and our director independence standards. Further, the Board has determined that the members of the Audit Committee and Compensation Committee are also independent under the applicable NYSE and SEC rules mentioned above. No director participated in the final determination of his or her own independence.
Management Succession Planning
The Board periodically reviews a management succession plan that includes, among other things, an assessment of the experience, performance and skills for possible successors to our Chairman and CEO.
Executive Sessions
Executive sessions of non-management directors are held after each regularly scheduled Board meeting. In addition, under our Corporate Governance Guidelines, if the non-management directors include directors who have not been determined to be independent, the independent directors will separately meet in executive session at least once a year. During 2022, the non-management directors who were then serving on the Board held four executive sessions. “Non-management directors” include all directors who are not our officers and all non-management directors who have been determined by the Board to be independent. Currently, Mr. Taubman is the only officer serving on the Board. Mr. Cornwell is a non-management director who is not an officer but has not been determined by the Board to be independent.
Compensation Committee Interlocks and Insider Participation
No member of our Compensation Committee is a current or former officer or employee of the company or any of its subsidiaries. None of our Executive Officers serves as a member of the board of directors or compensation committee of any company that has one or more of its Executive Officers serving as a member of the Board or Compensation Committee.
Board and Committee Meetings; Annual Meeting Attendance
During 2022, the Board held eight meetings, our Audit Committee held eight meetings, our Compensation Committee held five meetings and our Nominating/Corporate Governance Committee held two meetings. During such time, each director then serving on the Board attended at least 75% of each of the meetings of the Board and committees on which they served during the period for which they were a director or committee member, respectively. The non-management directors of the company regularly meet in executive session without management. Under the Corporate Governance Guidelines adopted by the Board, our Lead Independent Director presides at such executive sessions.
Under our Corporate Governance Guidelines, directors are encouraged to attend our annual meetings of shareholders. All of our directors attended our 2022 virtual annual meeting in person or via audio conference.
Communications with the Board
Anyone who would like to communicate with, or otherwise make their concerns known directly to any then-serving Lead Independent Director, to the chairperson of any of the Audit, Nominating/Corporate Governance and Compensation Committees, or to the non-management or independent directors as a group, may do so by addressing such communications or concerns to our General Counsel at PJT Partners Inc., 280 Park Avenue, New York, New York 10017, who will, as appropriate, forward such communication.
Whistleblower Program
We have adopted procedures for reporting concerns regarding accounting and other matters. These procedures are designed to provide channels of communication for employees and others who have concerns about the conduct of our company or any of its people, including with respect to the company’s accounting controls or auditing matters. All such channels of communication include the option to report anonymously. Any person may report to the Audit Committee any accounting allegation, legal allegation or retaliatory act. Reports
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can be made in writing to PJT Partners, Attn: Audit Committee, 280 Park Avenue, New York, New York 10017. In addition, reports can be made:
| (1) | by contacting the General Counsel in writing or in person at PJT Partners, Attn: General Counsel, 280 Park Avenue, New York, New York 10017; |
| (2) | by contacting the Head of Internal Audit in writing or in person at PJT Partners, Attn: Head of Internal Audit, 280 Park Avenue, New York, New York 10017; |
| (3) | by contacting the Chief Compliance Officer in writing or in person at PJT Partners, Attn: Chief Compliance Officer, 280 Park Avenue, New York, New York 10017; |
| (4) | by submitting a report online at www.pjtpartners.ethicspoint.com; or |
| (5) | by calling the Employee and Reporting Hotline at any time. The hotline can be reached in the U.S. at 1-844-279-8892; dialing instructions for callers outside the U.S. are available at www.pjtpartners.ethicspoint.com. |
The information in any such report will be provided to management or, as appropriate, the Audit Committee as promptly as practicable. To the extent possible, reports should be factual rather than speculative or conclusory, and should contain as much specific information as possible to allow for proper assessment. In addition, to the extent possible, reports should contain sufficient corroborating information to support the commencement of an investigation. The company strictly prohibits any retaliation for reporting a possible violation of law, ethics or company policy, no matter whom the report concerns.
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Director Compensation
Members of the Board who are members of management receive no additional compensation for their services as directors. Each non-management director receives an annual base retainer for the service period from June 1 to May 31 in the amount of $225,000, with a minimum of 50% (and, if selected by the non-management director, up to 100%) of such annual retainer delivered in the form of restricted stock units.
Subject to continued service, restricted stock units granted pursuant to a director’s election vest quarterly in substantially equal installments over the subject year of service, with vesting accelerated upon death, disability or a change in control of the company. Vested restricted stock units will be settled on the earliest of the termination of service of such director, the fifth anniversary of the grant date or a change in control of the company and will be settled in either shares of the company’s Class A common stock or cash (or a combination thereof) at the discretion of the Compensation Committee.
Each new non-management director also receives a one-time grant of restricted stock units in an amount having a value of $100,000. Subject to continued service, the one-time restricted stock unit grant vests in substantially equal installments annually over four years, with vesting accelerated upon death, disability or a change in control of the company. Upon vesting, the one-time restricted stock unit grant will be settled on the earliest of the termination of service of the director, the fourth anniversary of the grant date or a change in control of the company and will be settled in either shares of the company’s Class A common stock or cash (or a combination thereof) at the discretion of the Compensation Committee. We also reimburse each of our non-management directors for his or her travel expenses incurred in connection with his or her attendance at meetings of the Board and its committees.
The Omnibus Incentive Plan limits the amount of compensation for director services that may be awarded to each non-management director (including both equity awards and any cash fees paid to the non-management director but excluding expense reimbursement) in any fiscal year to $750,000 in total value. Further, our Compensation Committee has engaged Willis Towers Watson, an outside independent compensation consultant, to provide guidance with respect to compensation paid to our non-management directors.
Minimum Equity Ownership Guidelines for Non-Management Directors
Our Compensation Committee requires our non-management directors to maintain equity ownership in the company (including Partnership Units, LTIP Units or restricted stock units) having a market value equal to or greater than three times the $225,000 annual base retainer. Each non-management director must achieve the minimum equity investment within five years from the later of the adoption of the guidelines (for directors in place at that time of the adoption of the guidelines) and the date of such director’s election to the Board (for subsequently appointed directors). All directors are or are expected to be within the time ascribed in our ownership guidelines, in compliance with our Minimum Equity Ownership Guidelines.
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Director Compensation for Fiscal Year 2022
The 2022 compensation of the non-management directors is set forth in the table below:
| Name | Fees Earned or Paid in Cash |
Stock Awards(1) |
Total | ||||||||
| James Costos | $ | 21,875 | $ | 225,032 | $ | 246,907 | |||||
| Dennis Hersch(2) | $ | 21,875 | — | — | |||||||
| Emily K. Rafferty | $ | 91,250 | $ | 112,554 | $ | 203,804 | |||||
| Thomas M. Ryan | — | $ | 225,032 | $ | 225,032 | ||||||
| Grace R. Skaugen | $ | 100,000 | $ | 112,554 | $ | 212,554 | |||||
| Kenneth C. Whitney | $ | 100,000 | $ | 112,554 | $ | 212,554 | |||||
| (1) | The amounts in this column reflect the aggregate grant date fair value of restricted stock units granted in fiscal year 2022 in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation – Stock Compensation (“ASC Topic 718”). A discussion of the assumptions used in calculating these values can be found in Note 10 to our 2022 audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2022. |
| On June 1, 2022, Mr. Costos and Mr. Ryan were awarded 2,959 restricted stock units with a grant date fair value computed in accordance with ASC Topic 718 of $225,032, or $76.05 per share underlying each restricted stock unit, and Ms. Rafferty, Ms. Skaugen and Mr. Whitney were awarded 1,480 restricted stock units with a grant date fair value computed in accordance with ASC Topic 718 of $112,554, or $76.05 per share underlying each restricted stock unit. Subject to continued service as a director, 25% of each of these restricted stock unit grants generally has vested or will vest on each of August 31, 2022, November 30, 2022, February 28, 2023 and May 31, 2023. The shares of Class A common stock underlying such vested restricted stock units will be delivered on the earliest of (i) the termination of the director’s services, (ii) June 1, 2026 or (iii) a change in control of the company. | |
| As of December 31, 2022, each of Mr. Costos, Ms. Rafferty, Mr. Ryan, Ms. Skaugen and Mr. Whitney held 1,496, 748, 1,496, 1,739 and 748 unvested restricted stock units, respectively. These amounts include restricted stock units credited as dividend equivalents on the underlying restricted stock units held by Mr. Costos, Ms. Rafferty, Mr. Ryan, Ms. Skaugen and Mr. Whitney in connection with dividends paid by the company to holders of its Class A common stock. Credited dividend equivalents are subject to the same terms and conditions as the underlying restricted stock units. | |
| (2) | Dennis Hersch served as our Lead Independent Director until he passed away on January 18, 2022. |
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Executive Compensation
| Proposal 2: Non-binding advisory vote to approve executive compensation |
| Board Recommendation |
| The Board recommends that you vote “FOR” approval of the compensation of our Named Executive Officers. |
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In accordance with the requirements of Section 14A of the Exchange Act and the related rules of the SEC, we are including in these proxy materials a separate resolution subject to shareholder vote to approve, in a non-binding advisory vote, the compensation of our Named Executive Officers as disclosed below. The text of the resolution in respect of Proposal 2 is as follows:
“RESOLVED, that the compensation paid to the company’s Named Executive Officers as disclosed in this Proxy Statement pursuant to the rules of the SEC, including the Compensation Discussion and Analysis, compensation tables, and any related narrative discussion, is hereby APPROVED.”
In considering your vote, you may wish to review with care the information on our compensation policies and decisions regarding the Named Executive Officers presented in the Compensation Discussion and Analysis set forth below.
In particular, shareholders should note that our compensation program includes elements that are intended to ensure strong alignment between the interests of our Executive Officers and our shareholders:
| ˃ | Annual incentive compensation that places a strong emphasis on company-wide financial performance, with consideration given to the individual performance of each Executive Officer. | |
| ˃ | An appropriate link between compensation and the creation of shareholder value through long-term equity awards. | |
| ˃ | A focus on collaboration, and therefore does not include individual revenue pay-outs at any level. | |
| ˃ | Consideration for each executive’s contribution to leadership and talent development. | |
| ˃ | Benchmarking analysis to help us understand compensation practices of our competitors. |
Our compensation program for our Executive Officers and the company overall also aims to be market-competitive versus our peers, in both quantum and structure to ensure that we are able to attract and retain executives and other professionals that contribute to the long-term success of the company.
While the results of the vote are non-binding and advisory in nature, the Board intends to carefully consider the results of the vote.
At the company’s 2018 Annual Meeting of Shareholders, our shareholders indicated their preference to hold the non-binding advisory vote to approve the compensation of our Named Executive Officers each year. Accordingly, we currently intend to hold such votes annually. The next vote to approve the compensation of our Named Executive Officers is expected to be held at our 2024 Annual Meeting of Shareholders. While the Board intends to consider carefully the results of this vote, the final vote is advisory in nature and is not binding on the company or the Board.
Executive Compensation Philosophy
Our executive compensation program considers company-wide financial measures to ensure alignment with our shareholders, in addition to goals targeted to each of the Named Executive Officers. We seek to ensure that each Named Executive Officer has goals that are tied to tangible measures of business success as well as those that are focused on leadership and talent development. Rewards for our Executive Officers are structured to ensure a focus on the long-term success of the company. This is typically achieved by granting a significant portion of annual incentives in the form of restricted stock awards that vest over four years.
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Executive Officers
Set forth below are biographical summaries of our Executive Officers as of March 27, 2023, other than Mr. Taubman, our Chairman and CEO, whose biographical summary is set forth above in “Proposal 1—Election of Directors.”
 |
 |
 |
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| Name | Ji-Yeun Lee | Helen T. Meates | David A. Travin | ||||
| Age | 56 | 61 | 47 | ||||
| Position | Managing Partner | Chief Financial Officer | General Counsel | ||||
| Professional Highlights | Prior to joining PJT Partners in early 2014 as one of the founding partners, Ms. Lee was Managing Director and Deputy Head of Global Investment Banking at Morgan Stanley. She joined Morgan Stanley in 1988 and spent most of her career in Mergers & Acquisitions, including six years in the firm’s London office, advising clients on a broad range of transactions across industries and geographies. Ms. Lee was appointed the Deputy Head of Global Investment Banking in 2007 and joined Morgan Stanley’s Management Committee in 2011. Ms. Lee also serves on the Board of Directors of Good Shepherd Services. She received a B.A. from Amherst College. | Prior to joining PJT Partners in January 2015, Ms. Meates worked at Morgan Stanley for 22 years, most recently serving as a Managing Director. Ms. Meates spent the majority of her career at Morgan Stanley in Global
Capital Markets, including nine years in Leveraged Finance. In 2011, she was appointed Deputy Head of Global Capital Markets and Co-Chair of the firm’s Capital Commitment Committee. Ms. Meates also served on the firm’s Institutional
Securities Risk Committee, Microfinance Advisory Board and Diversity Committee. Ms. Meates serves on the boards of the SMA Foundation and the Bridgehampton Chamber Music Festival. She received a law degree (LL.B.) from Canterbury University
in New Zealand and an M.B.A. from Columbia Business School. |
Prior to joining PJT Partners in December 2016, Mr. Travin was a member of the legal departments of both UBS AG and Deutsche Bank AG. Through the end of 2020, Mr. Travin served as the company’s Deputy General Counsel. He currently serves on the Board of Directors of Only Make Believe, a nonprofit organization based in New York City. Mr. Travin received a B.S. in Industrial and Labor Relations from Cornell University and a J.D. from The George Washington University Law School. |
Each of our Executive Officers serves at the discretion of the Board without a specified term of office.
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Elements of Our Named Executive Officer Compensation Program
| Element | Key Features | Highlights | |||
| Fixed Compensation | |||||
| Base Salary |
˃ Fixed pay ˃ Informed by reference to peer group and adjusted for, among other variables, tenure, knowledge, ability and experience ˃ Level also takes into account scope of role ˃ Reviewed annually |
˃ Base salaries have not been adjusted since October 1, 2015 for Mr. Taubman, January 1, 2016 for Ms. Lee, and January 1, 2021 for Mr. Travin. ˃ Base salary for Ms. Meates adjusted from $500,000 to $1,000,000 for 2023. |
|||
|
Annual Incentive Compensation (Discretionary Performance-Based) Value determined based on company-wide financial performance and individual objectives |
|||||
| Cash Bonus | ˃ Variable pay delivered in cash | ˃ Mr. Taubman has not received any cash compensation in excess of base salary since the company’s inception. | |||
| Annual Long-Term Incentive Awards |
˃ Variable pay typically granted annually in equity ˃ Equity grants account for, on average, approximately 43% of the Annual Incentive Compensation for the Named Executive Officers (other than Mr. Taubman) |
˃ The percentage of the Named Executive Officers’ total 2022 annual incentive compensation that was delivered in the
form of a long-term equity award was 47% for Ms. Lee, 45% for Ms. Meates and 38% for ˃ Equity awards granted with respect to performance in calendar year 2022 to Ms. Lee, Ms. Meates and Mr. Travin vest over four years, with the first tranche vesting after two years. ˃ Mr. Taubman did not receive an annual incentive award related to his 2022 performance. |
|||
Other Compensation Highlights
Performance LTIPs. On February 8, 2022, the Compensation Committee approved the grant of performance-based LTIP Units (which is a class of partnership interests in PJT Partners Holdings) under the PJT Partners Inc. 2015 Omnibus Incentive Plan (the “Performance LTIPs”) to Mr. Taubman and our other Named Executive Officers, effective February 10, 2022 (the “Grant Date”). These Performance LTIPs are intended to reward performance on a multi-year basis and in a manner that is fully aligned with shareholders.
The Performance LTIPs are subject to both performance and long-term time-based vesting conditions. In granting the Performance LTIPs, the Compensation Committee intended to address three key objectives: (1) ensure leadership continuity; (2) align compensation with long-term shareholder value creation; and (3) enhance retention of top talent at the company.
The performance vesting requirement for the Performance LTIPs will be deemed satisfied to the extent that the company’s Class A common stock achieves the designated dividend-adjusted per-share prices listed in the table below, based on the volume-weighted average share price of the company’s Class A common stock over any 20 consecutive trading-day period (“20-day VWAP”). The number of Performance LTIPs for which the performance condition has been met (the “Earned Performance LTIPs”) will be determined (i) on a quarterly
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basis at the end of each fiscal quarter to occur after the Grant Date and (ii) as of and for the period ended on February 28, 2027 (the “End Date”) (each such fiscal quarter end date, together with the period ending with the End Date, a “Measurement Date”), based on the highest 20-day VWAP to have been achieved at any time starting on the Grant Date and ending on End Date, as follows:
| Highest 20-day VWAP Between Grant Date and End Date |
Percent of Total LTIP Units Granted that Become Earned LTIP Units |
| Less than $100 | 0% |
| $100 | 50% |
| $130 | 100% |
If as of any Measurement Date, the highest 20-day VWAP is between $100 and $130, then the percentage of the total Performance LTIPs that will become Earned Performance LTIPs as of such time shall be determined by linear interpolation between 50% and 100%. The last Measurement Date will be the End Date. There is no potential for Mr. Taubman or our other Named Executive Officers to earn more than 100% of the Performance LTIPs.
The Performance LTIPs satisfy the time-vesting requirement over a five-year period, with 20% vesting per annum, with limited and customary vesting exceptions and forfeiture provisions provided in the applicable award agreement and the PJT Partners Inc. 2015 Omnibus Incentive Plan, such as change in control, death, disability and termination without cause.
| Service Period End Date | Cumulative Service Requirement Satisfied |
| March 1, 2023 | 20% |
| March 1, 2024 | 40% |
| March 1, 2025 | 60% |
| March 1, 2026 | 80% |
| March 1, 2027 | 100% |
Performance LTIPs Granted to Mr. Taubman. The Compensation Committee granted to Mr. Taubman 1,000,000 Performance LTIPs, with the performance and time-based vesting conditions as described above, in order to provide an appropriate link between compensation and the creation of shareholder value through long-term focused and retention-driven incentive awards. The company does not currently anticipate paying Mr. Taubman any further equity incentive compensation through the end of 2026. Mr. Taubman’s annual base salary, which has been unchanged since 2015, will continue at $1,000,000 for 2023.
Performance LTIPs Granted to Ms. Lee, Ms. Meates and Mr. Travin. In order to align the interests of our Executive Officers with our shareholders in the same manner as Mr. Taubman, the Compensation Committee granted to Ms. Lee, Ms. Meates and Mr. Travin, Performance LTIPs as part of such Named Executive Officers’ performance year 2021 annual incentive compensation.
Say on Pay Vote
With respect to our 2022 non-binding, advisory shareholder vote on executive compensation, or say on pay, our shareholders overwhelmingly approved our executive compensation program with over 93% of voted shares cast in favor of the say on pay proposal. We believe these results reflect strong shareholder support for our pay-for-performance linkage and our compensation structure that facilitates it, and therefore underscores the endorsement by our shareholders of the alignment between our executive compensation and performance.
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COMPENSATION OF OUR EXECUTIVE OFFICERS
Compensation Discussion and Analysis
This section of our Proxy Statement discusses the principles underlying our executive compensation policies and decisions. In addition, this section provides qualitative information about the manner and context in which compensation is awarded to, and earned by, our Named Executive Officers, and places in context the data presented in the tables and narrative that follow.
Throughout this Proxy Statement, our Named Executive Officers (our “Named Executive Officers”) for the fiscal year ended December 31, 2022 are as follows:
| ˃ | Paul J. Taubman, our Chairman and CEO; | |
| ˃ | Ji-Yeun Lee, our Managing Partner; | |
| ˃ | Helen T. Meates, our Chief Financial Officer; and | |
| ˃ | David A. Travin, our General Counsel. |
Roles of our Compensation Committee, Compensation Consultant and Management
Compensation Committee
Our Compensation Committee is comprised entirely of independent directors. Our Compensation Committee has overall responsibility for monitoring the performance of our Named Executive Officers and evaluating and approving our executive compensation plans, policies and programs. In addition, our Compensation Committee oversees the Omnibus Incentive Plan.
With respect to the compensation paid to our Chairman and CEO, our Compensation Committee reviews and approves all components of Mr. Taubman’s compensation and ensures that his compensation aligns with the company’s strategic plan. With respect to the other Named Executive Officers, our Compensation Committee seeks input from our Chairman and CEO and Chief Human Resources Officer, reviews and approves all components of our other Named Executive Officers’ compensation and ensures that their compensation aligns with the company’s strategic plan.
Use of Independent Advisor
Our Compensation Committee has engaged Willis Towers Watson, an independent outside compensation consultant, to provide guidance with respect to the development and implementation of our compensation programs. Willis Towers Watson provides our Compensation Committee with advice concerning the types and levels of compensation to be paid to our Named Executive Officers. Willis Towers Watson provides the Compensation Committee with peer executive and non-employee director compensation data, as well as expertise and advice on various matters brought before the Compensation Committee. The Compensation Committee utilizes Willis Towers Watson’s advice and insights to inform the eventual decision-making process. Willis Towers Watson also assists management and the Compensation Committee by providing market data on the compensation practices and programs of our peer competitors and guidance on industry trends and best practices.
The Compensation Committee has sole authority to retain and terminate the independent compensation consultant and approve fees and other engagement terms. Our Compensation Committee requires that its consultant be independent of company management. In assessing Willis Towers Watson’s independence, the Compensation Committee considered the six independence factors for compensation consultants listed in the NYSE listing requirements and determined that the retention of Willis Towers Watson did not raise any conflict of interest.
Management
Our CEO and our Chief Human Resources Officer attend Compensation Committee meetings, provide information as to the individual performance of the other Named Executive Officers and make annual recommendations to our Compensation Committee of appropriate compensation levels. Our CEO, with input from the Chief Human Resources Officer and in consultation with the Compensation Committee, also develops annual performance goals focused on the company’s tactical and strategic objectives against which our Named Executive Officers will generally be measured. Our CEO and our Chief Human Resources Officer present an
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evaluation against those objectives to the Compensation Committee as part of the annual compensation process. The compensation pool funding and structure for employees overall is assessed by giving consideration to the company’s tactical and strategic objectives as well as the performance of each business and is presented by our CEO and our Chief Human Resources Officer to the Compensation Committee for approval. All components of our Named Executive Officers’ compensation must be approved by our Compensation Committee in its sole discretion.
Benchmarking Process
In developing our compensation programs, our Compensation Committee commissions a compensation benchmarking analysis to ensure that our programs are competitive with those of other independent investment banks, including consideration of the cost of equivalent talent in the markets in which we operate. Our Compensation Committee reviews our Named Executive Officer compensation in relation to other financial institutions, working with Willis Towers Watson, which provides market data and practices for consideration, as well as executive compensation trends and developments. One of the challenges for our company when establishing its peer group is the limited number of directly comparable organizations. Part of the Compensation Committee’s overall review of the executive compensation program over the past several years has included developing underlying principles for identifying peers. These principles include operating in similar or comparable industry segments: investment banking, comparable in size and scope and competitors for talent. The full peer group of independent investment banking firms is Cowen Group, Inc., Evercore, Greenhill, Houlihan Lokey, Jefferies, Lazard, Moelis, Perella Weinberg Partners and Rothschild & Co. The most relevant public competitors considered within the independent investment bank benchmarking data for 2022 included:
|
Lazard Ltd. Evercore Inc. Houlihan Lokey, Inc. |
Moelis & Company Perella Weinberg Partners |
For purposes of determining our overall level of executive compensation (i.e., base salary and annual incentive compensation), our Compensation Committee generally reviews compensation in light of peer group compensation ranges but does not limit target setting to a particular peer group percentile.
Our Compensation Committee also takes into account other factors, including the executive’s role and experience, as compared to our peers’ executives. Ultimately, our Compensation Committee believes that appropriate compensation for a particular executive should be made based on the full review of company and individual performance, while also considering market data.
Overall, as set forth below in “Elements of Our Compensation Program,” Willis Towers Watson determined that our executive compensation programs, as structured, are appropriately competitive relative to our peers.
Elements of Our Compensation Program
Compensation provided to our Named Executive Officers generally consists of base salary, discretionary annual incentive compensation, which includes a cash bonus and long-term incentive awards granted in the form of equity, and other perquisites and benefits, each of which is described in more detail below.
Base Salary
The base salary payable to each Named Executive Officer provides a fixed component of compensation that reflects the executive’s position and responsibilities. Base salaries are reviewed annually by our Compensation Committee and may be adjusted to better match competitive market levels or to recognize an executive’s professional growth, development and increased responsibility.
2022 Base Salaries. We provided an annual base salary of $1,000,000, $1,000,000, $500,000 and $500,000 to each of Mr. Taubman, Ms. Lee, Ms. Meates and Mr. Travin, respectively. The amount of the base salary for the Named Executive Officers is set in accordance with the terms of their respective partner agreements and may be adjusted from time to time in accordance with those agreements. These base salaries have not been adjusted since October 1, 2015, for Mr. Taubman, January 1, 2016 for Ms. Lee and January 1, 2021 for Mr. Travin.
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In 2023, Ms. Meates base salary will be adjusted to $1,000,000, reflective of her seniority and the breadth of her role as a senior leader within our company.
Annual Incentive Compensation
Named Executive Officers are eligible to receive discretionary compensation on an annual basis to incentivize the achievement of key short- and long-term corporate strategic goals. We do not set specific quantitative performance targets upon which the annual incentive compensation paid to our Named Executive Officers would become payable. Instead, the annual incentive compensation paid to our Named Executive Officers is determined based on a performance evaluation conducted by our Compensation Committee with the assistance of Mr. Taubman (other than with respect to compensation to be paid to Mr. Taubman) and our Chief Human Resources Officer. A portion of the annual incentive compensation is paid in cash and a portion is paid in the form of long-term incentive awards granted in the form of restricted equity.
Annual Incentive Compensation for Ms. Lee, Ms. Meates and Mr. Travin
The evaluation with respect to the annual incentive compensation paid to Ms. Lee, Ms. Meates and Mr. Travin for the 2022 performance year involved an analysis of both:
(i) company-wide performance and
(ii) the performance of the individual officer and his or her contributions to the company, including consideration of role-specific goals previously agreed to by the Compensation Committee.
Overall Company Performance. The Compensation Committee’s executive compensation decisions consider company-wide financial performance as a collective measure to ensure alignment with shareholders and to foster a collaborative approach among senior executives. With respect to overall company performance, the factors considered for our Named Executive Officers were:
| ˃ | share price performance, | |
| ˃ | revenue growth, | |
| ˃ | adjusted pretax income growth and | |
| ˃ | adjusted net income per share growth |
in each case taking into consideration performance versus the independent investment bank peers discussed above. Consistent with our long-term focus, each of these elements are reviewed through a multi-year lens and with consideration given to our company’s business mix versus our competitors.
Performance of the Individual Named Executive Officers. Individual, role-specific performance goals have been identified as goals where the Named Executive Officer is most able to influence the relevant outcome, acknowledging they may not be solely responsible for such outcomes and that success against these goals is also the collective responsibility of the executive team and broader company management.
| ˃ | Ji-Yeun Lee. With respect to the assessment of individual performance, the factors considered for Ms. Lee were her leadership and executive management role with our company, including: continued evidence of the growth in cross-company revenue generating opportunities; the continued development of the Strategic Advisory business, including year over year outperformance of the business relative to peers and continued success in the attraction and retention of top talent to the company at all levels. | |
| ˃ | Helen T. Meates. With respect to the individual assessment of Ms. Meates, factors considered included: Ms. Meates’ leadership and oversight of our global finance function including its strategic reporting and analytics capability; the continued building and maintenance of relationships with our investors, clients, equity research community, auditors and regulators; and effective management of corporate finance. | |
| ˃ | David A. Travin. With respect to the individual assessment of Mr. Travin, factors considered included: Mr. Travin’s leadership and oversight of our global legal and compliance functions, including a continued deepening of the bench strength of the talent therein; effectively managing the company’s risk exposure to potential litigation and regulatory matters; overseeing and enhancing the company’s compliance culture; strengthening relationships in the legal community and advising our bankers with appropriate legal and regulatory advice from a deal perspective. |
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Cash Bonus. The portion of each Named Executive Officer’s 2022 annual incentive compensation paid in the form of restricted cash was as follows: Ms. Lee—$1,852,500; Ms. Meates—$1,652,500; and Mr. Travin—$1,027,500. Mr. Taubman has not received any cash compensation in excess of base salary since the company’s inception.
Long-Term Incentive Awards. The Compensation Committee believes that a substantial portion of each Named Executive Officer’s annual incentive compensation should be in the form of long-term incentive awards in the form of either LTIP Units or restricted stock units. Determination of the form of long-term incentive awards takes into consideration the significant equity holdings our Named Executive Officers maintain, which in each case were acquired through a combination of grants made at the company’s spin-off, performance-based awards and open market purchases.
Long-term incentive awards encourage management to create shareholder value over the long term, because the value of the equity awards is directly attributable to the price of our Class A common stock over time. In addition, equity awards are an effective tool for management retention because full vesting of the awards generally requires continued employment for multiple years.
Performance LTIPs Granted to Mr. Taubman
The Compensation Committee granted to Mr. Taubman 1,000,000 Performance LTIPs, with the performance and time-based vesting conditions as described above, in order to provide an appropriate link between compensation and the creation of shareholder value through long-term focused and retention-driven incentive awards. The company does not currently anticipate paying Mr. Taubman any further equity incentive compensation through the end of 2026. Mr. Taubman’s annual base salary, which has been unchanged since 2015, will continue at $1,000,000 for 2023.
Alternative Presentation of Annual Compensation
The following table is presented to show how our Compensation Committee viewed 2020 to 2022 annual compensation for our Named Executive Officers (except Mr. Travin, who was named as General Counsel on January 1, 2021, and as such, only 2021 and 2022 compensation is shown), and includes base salary as well as cash bonus and long-term incentive awards as part of annual incentive compensation. This table differs from the “Summary Compensation Table” below and is not a substitute for that table. Unlike the “Summary Compensation Table,” which reflects the grant date fair value of long-term incentive awards granted during the applicable calendar year (whether or not such awards were granted with respect to the performance for such year), the following table reflects the dollar amounts of the annual incentive compensation paid in the form of restricted stock units, LTIPs and Performance LTIPs with respect to each specific performance year (e.g., for 2021, the dollar amount of the Performance LTIPs that were granted in 2022 with respect to 2021 performance). In addition, this table includes the grant value of that portion of the one-time grant of 60,000 LTIP Units awarded to Mr. Taubman in September 2018 for the period from January 1, 2020 to December 31, 2020 with respect to performance year 2020, and for the period from January 1, 2021 to September 30, 2021 with respect to performance year 2021, as this award was intended by the Compensation Committee to serve as additional compensation for the three-year period from October 1, 2018 to October 1, 2021.
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| Name and Principal Position |
Year | Salary | Bonus(1) | Stock Awards(2) |
Total | ||||||||
| Paul J. Taubman Chairman and CEO |
2022 | $ | 1,000,000 | — | — | $ | 1,000,000 | ||||||
| 2021 | $ | 1,000,000 | — | $ | 799,500 | $ | 1,799,500 | ||||||
| 2020 | $ | 1,000,000 | — | $ | 1,066,000 | $ | 2,066,000 | ||||||
| Ji-Yeun Lee Managing Partner |
2022 | $ | 1,000,000 | $ | 1,852,500 | $ | 1,647,500 | $ | 4,500,000 | ||||
| 2021 | $ | 1,000,000 | $ | 1,867,500 | $ | 1,632,500 | $ | 4,500,000 | |||||
| 2020 | $ | 1,000,000 | $ | 1,867,500 | $ | 1,632,500 | $ | 4,500,000 | |||||
| Helen T. Meates Chief Financial Officer |
2022 | $ | 500,000 | $ | 1,652,500 | $ | 1,347,500 | $ | 3,500,000 | ||||
| 2021 | $ | 500,000 | $ | 1,667,500 | $ | 1,332,500 | $ | 3,500,000 | |||||
| 2020 | $ | 500,000 | $ | 1,667,500 | $ | 1,332,500 | $ | 3,500,000 | |||||
| David A. Travin General Counsel |
2022 | $ | 500,000 | $ | 1,027,500 | $ | 622,500 | $ | 2,150,000 | ||||
| 2021 | $ | 500,000 | $ | 725,000 | $ | 525,000 | $ | 1,750,000 | |||||
| (1) | The cash bonus paid to Ms. Lee, Ms. Meates and Mr. Travin for performance year 2022 is subject to pro-rata repayment in the event such Named Executive Officer’s services are terminated by the company for Cause (as defined in the Omnibus Incentive Plan) or the Named Executive Officer resigns his or her services to the company for any reason within the next three years (100% repayment in case of resignation or termination for Cause prior to the end of 2023, 67% prior to the end of 2024 and 33% prior to the end of 2025). | |
| (2) | The dollar amounts of the restricted stock units and/or LTIP units included in this column may differ from the grant date fair values of such awards as computed in accordance with GAAP and reported in the “Summary Compensation Table.” In the case of Ms. Lee, Ms. Meates and Mr. Travin, the 2021 stock awards include Performance LTIPs granted as part of the long-term incentive component of 2021 annual compensation. Mr. Taubman’s Performance LTIPs are not included in this presentation as such awards are not intended as annual compensation, are long-term performance and retention focused and the company does not anticipate granting any additional annual equity incentives to Mr. Taubman through the end of 2026. Restricted stock units for Ms. Lee, Ms. Meates and Mr. Travin pertaining to performance year 2022 included in this column are subject to approval by the Compensation Committee and are expected to be approved by the Compensation Committee in fiscal year 2023. |
Retirement Arrangements
We have a 401(k) plan for eligible employees, including our Named Executive Officers, and may, in our sole discretion, provide annual matching contributions to certain 401(k) plan participants. We currently do not offer matching contributions to our Named Executive Officers.
Employee Benefits; Perquisites
Eligible employees, including our Named Executive Officers, participate in broad-based and comprehensive employee benefit programs, including medical, dental, vision, life and disability insurance coverage. Our Named Executive Officers participate in these programs on the same basis as eligible employees generally, but the company does not typically pay for any portion of such employee benefits for partners, including our Named Executive Officers. We make available to our partners, including our Named Executive Officers and on occasion, their family members personal use of a company leased aircraft when it is not being used for business purposes, for which the partners and the Named Executive Officers pay the full incremental costs associated with such use.
All perquisites to our Named Executive Officers must be approved by the Compensation Committee. As approved by the Compensation Committee, we make available to our partners, including our Named Executive Officers, financial planning services at a cost of approximately $16,595 annually per partner paid by the company. In 2022, Mr. Taubman, Ms. Lee, Ms. Meates and Mr. Travin took advantage of this service.
Compensation Program Governance Features
Clawback Policy
Pursuant to the terms of the Omnibus Incentive Plan, all awards are subject to reduction, cancellation, forfeiture or recoupment to the extent necessary to comply with:
(i) any clawback, forfeiture or other similar policy adopted by the Board or the Compensation Committee and as in effect from time to time, and
(ii) applicable law.
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To the extent that a participant receives any amount in excess of the amount that the participant should otherwise have received under the terms of the award for any reason (including, without limitation, by reason of a financial restatement, mistake in calculations or other administrative error), the participant will be required to repay any such excess amount to the company.
Further, pursuant to the terms of the Omnibus Incentive Plan, to the extent a participant engages in:
| (i) | unauthorized disclosure of any confidential or proprietary information of the company; | |
| (ii) | any activity that would be grounds to terminate the participant’s employment for Cause (as defined in the Omnibus Incentive Plan); or | |
| (iii) | the breach of any non-competition, non-solicitation or other agreement containing restrictive covenants, the Compensation Committee may, in its sole discretion, provide for one or both of the following: cancellation of any or all of such participant’s outstanding awards, or forfeiture by the participant of any gain realized on the vesting or exercise of awards, and to repay any such gain promptly to the company. |
We have also incorporated rigorous clawback provisions in the PJT Partners Inc. Bonus Deferral Plan (the “Bonus Deferral Plan”). Pursuant to the terms of the Bonus Deferral Plan, if at any time before an applicable restricted stock unit vesting date, the Compensation Committee determines, in its sole and absolute discretion, that any of the following events has occurred, the company is authorized to cancel (and the employee would forfeit) an appropriate portion of the then unvested portion of the employee’s award granted pursuant to the Bonus Deferral Plan and any rights to dividend equivalents thereon:
| ˃ | misconduct by the employee in taking actions, or failing to take actions, that result in, or reasonably could be expected to result in, material detriment to the company or its business activities, including, without limitation, financial or reputational harm to the company or its business activities; | |
| ˃ | fraud, material misrepresentation or other dishonest acts by the employee which resulted in a determination by the Compensation Committee of an amount of such employee’s annual bonus that was greater than the amount the employee would have otherwise been entitled to but for such fraud, material misrepresentation or other dishonest act; | |
| ˃ | the employee’s gross negligence in, or other impropriety related to (including any failure to monitor or discharge supervisory or managerial responsibilities), failing to timely and reasonably identify, raise or assess issues and/or concerns with respect to risks material to the company or its business activities; or | |
| ˃ | following the termination of the employee’s employment, the company determines that such employee’s employment could have been terminated by the company for cause. |
Nothing contained in the Bonus Deferral Plan limits or restricts the company from seeking repayment of any vested portions of an award made pursuant to the Bonus Deferral Plan already distributed to an employee, pursuant to any applicable clawback requirements imposed under applicable laws, rules and regulations. Accordingly, the clawback provisions contained in the Bonus Deferral Plan shall:
| (i) | Be in addition to the requirements of Section 304 of the Sarbanes-Oxley Act of 2002 that are applicable to our Chief Executive Officer and Chief Financial Officer and | |
| (ii) | Otherwise be deemed automatically amended to include the requirements of Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, as it may be amended from time to time, and any related rules or regulations promulgated by the SEC or the NYSE. |
Our Compensation Committee may periodically review this clawback policy.
Hedging and Pledging of Our Securities
Our directors and employees, including our Named Executive Officers, are prohibited from engaging in a transaction meant to hedge or minimize losses in our securities, including engaging in transactions in forward contracts, equity swaps, collars, exchange funds, puts, calls, options and other derivatives on our securities, or short selling our securities.
Our directors and employees, including our Named Executive Officers, are prohibited from pledging our securities as collateral for a loan unless such pledging transaction is approved by our General Counsel.
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Minimum Equity Ownership Guidelines for Named Executive Officers
Our Compensation Committee has implemented minimum equity ownership guidelines that require each Named Executive Officer to maintain equity ownership in the company (including Partnership Units, LTIP Units or restricted stock units) having a market value equal to or greater than a multiple of such Named Executive Officer’s base salary (ten times base salary for the Chairman and CEO and five times base salary for other Named Executive Officers). Each Named Executive Officer must achieve the minimum equity investment within five years from the later of the adoption of the guidelines (for Named Executive Officers in place at that time of the adoption of the guidelines) and the date of such Named Executive Officer’s appointment (for subsequently appointed Named Executive Officers). All Named Executive Officers are or are expected to be, within the time ascribed in our ownership guidelines, in compliance with our Minimum Equity Ownership Guidelines.
| Named Executive Officer | Ownership Requirement Multiple |
Ownership Requirement Value |
|||||
| Paul J. Taubman | 10x Base Salary | $ | 10,000,000 | ||||
| Ji-Yeun Lee | 5x Base Salary | $ | 5,000,000 | ||||
| Helen T. Meates | 5x Base Salary | $ | 5,000,000 | * | |||
| David A. Travin | 5x Base Salary | $ | 2,500,000 | ||||
*Based on Ms. Meates’ fiscal 2023 base salary.
Vesting of Equity Awards
Our practice is to grant equity awards to our Named Executive Officers that generally vest over a period of several years, with the vesting of the first tranche of any such equity award at least one year from the grant date. For performance year 2022, equity awards granted to our Named Executive Officers and other partners vest over a four-year period, with equity awards vesting in equal installments following the second, third and fourth year anniversaries from grant.
No Individual Revenue Pay-Outs
We have no individual revenue pay-outs as it relates to annual incentive compensation, and no contractual entitlement to severance. To provide further flexibility with respect to employment and compensation matters, we maintain a flexible termination practice with no contractual rights to continued employment (other than for a notice and potential garden leave period).
Risk Considerations in Our Compensation Programs
Our Compensation Committee has discussed the concept of risk as it relates to our compensation programs with management and Willis Towers Watson, and our Compensation Committee does not believe the goals, or the underlying philosophy of our compensation programs encourage excessive or inappropriate risk taking.
Our discretionary compensation program is designed to reflect the performance of our company and the performance of the individual employee, and we believe its design discourages excessive risk taking. For example, paying a significant portion of discretionary compensation in the form of equity awards, all with multi-year vesting periods, encourages each of our senior professionals to be sensitive to long-term risk outcomes, as the value of their awards increase or decrease with the price of our Class A common stock. Our directors, Named Executive Officers, partners and employees are prohibited from hedging their shares of our Class A common stock and from pledging such shares without pre-approval of our General Counsel. We believe these criteria provide additional incentives for the prudent management of the range of risks inherent in our business. Based on this, we do not believe that our compensation policies and practices create risks that are reasonably likely to have a material adverse effect on the company.
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REPORT OF THE COMPENSATION COMMITTEE
The following Compensation Committee report to shareholders shall not, in accordance with the rules of the SEC, be incorporated by reference into any of our future filings made under the Exchange Act or under the Securities Act and shall not be deemed to be soliciting material or to be filed under the Exchange Act or the Securities Act.
Our Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, our Compensation Committee recommended to the Board that our Compensation Discussion and Analysis be included in this Proxy Statement.
| Submitted by the Compensation Committee: | |
| Thomas M. Ryan, Chair | |
| Emily K. Rafferty |
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Summary Compensation Table
The following table summarizes the total compensation paid to or earned in respect of fiscal years 2020, 2021 and 2022 for Mr. Taubman, Ms. Lee and Ms. Meates, and fiscal years 2021 and 2022 for Mr. Travin, each under the rules of the SEC. Mr. Travin was promoted to General Counsel on January 1, 2021.
| Name and Principal Position |
Year | Salary | Bonus(1) | Stock Awards(1)(2) |
Other(3) | Total | ||||||||||||
| Paul J. Taubman Chairman and CEO |
2022 | $ | 1,000,000 | — | $ | 39,100,000 | $ | 16,595 | $ | 40,116,595 | ||||||||
| 2021 | $ | 1,000,000 | — | — | $ | 15,000 | $ | 1,015,000 | ||||||||||
| 2020 | $ | 1,000,000 | — | — | $ | 15,000 | $ | 1,015,000 | ||||||||||
| Ji-Yeun Lee Managing Partner |
2022 | $ | 1,000,000 | $ | 1,852,500 | $ | 1,971,031 | $ | 16,595 | $ | 4,840,126 | |||||||
| 2021 | $ | 1,000,000 | $ | 1,867,500 | $ | 1,649,703 | $ | 15,000 | $ | 4,532,203 | ||||||||
| 2020 | $ | 1,000,000 | $ | 6,867,500 | $ | 1,753,474 | $ | 15,000 | $ | 9,635,974 | ||||||||
| Helen T. Meates Chief Financial Officer |
2022 | $ | 500,000 | $ | 1,652,500 | $ | 1,608,809 | $ | 16,595 | $ | 3,777,904 | |||||||
| 2021 | $ | 500,000 | $ | 4,667,500 | $ | 1,346,550 | $ | 15,000 | $ | 6,529,050 | ||||||||
| 2020 | $ | 500,000 | $ | 1,667,500 | $ | 1,135,855 | $ | 15,000 | $ | 3,318,355 | ||||||||
| David A. Travin General Counsel |
2022 | $ | 500,000 | $ | 1,027,500 | $ | 633,889 | $ | 16,570 | $ | 2,177,959 | |||||||
| 2021 | $ | 500,000 | $ | 725,000 | $ | 138,720 | $ | 15,000 | $ | 1,378,720 | ||||||||
| (1) | 2022 bonus amounts represent the cash component of the annual incentive compensation earned for 2022 performance and paid in the following year. In the case of Ms. Lee, Ms. Meates and Mr. Travin, the remainder of the 2022 performance year annual incentive compensation is expected to be paid in the form of RSUs, as discussed above in “Elements of Our Compensation Program—Annual Incentive Compensation—Long-Term Incentive Awards.” As these RSUs are expected to be granted following approval by the Compensation Committee in May 2023, pursuant to the rules of the SEC, the stock awards reported for 2022 for Ms. Lee, Ms. Meates and Mr. Travin do not include their respective portion of the annual incentive compensation that is expected to be paid in RSUs. The amounts expected to be paid in the form of restricted stock units for performance year 2022 are as follows: Ms. Lee—$1,647,500; Ms. Meates—$1,347,500; and Mr. Travin—$622,500. | |
| (2) | The amounts included in this column represent the aggregate grant date fair value of the equity awards computed in accordance with ASC Topic 718. A discussion of the assumptions used in calculating these values can be found in Note 10 to our 2022 audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2022. For 2022, the value represents the grant on February 10, 2022 for the 2021 performance year of Performance LTIPs for Mr. Taubman, Ms. Lee, Ms. Meates and Mr. Travin, which are subject to both time and performance vesting conditions, with the time vesting component occurring in equal installments over five years from the grant date, subject to continuous employment. The company does not currently anticipate paying Mr. Taubman any further equity incentive compensation through the end of 2026. The Performance LTIPs vest according to service and market conditions, and therefore have no maximum grant date fair values that differ from the grant date fair values presented in the table. | |
| (3) | We make available to our partners, including our Named Executive Officers, financial planning services on an annual basis paid for by the company. In 2022, each of our Named Executive Officers used this service. In addition, we make available to our partners, including our Named Executive Officers, and on occasion, their family members, personal use of a company leased aircraft when it is not being used for business purposes, for which the partners and the Named Executive Officers pay the full incremental costs associated with such use. |
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Grants of Plan-Based Awards in 2022
The following table discloses the number of plan-based awards granted in 2022 to our Named Executive Officers and the grant date fair value of these awards.
Estimated Future Payouts Under Equity Incentive Plan Awards(3)
| Name | Grant Date(1) |
Action Date(2) |
Threshold (#) |
Target (#)(3) |
Maximum (#)(3) |
Grant Date Fair Value of Stock and Option Awards(4) |
|||||||||||
| Paul J. Taubman | 2/10/22 | 2/8/22 | 500,000 | 1,000,000 | 1,000,000 | $ | 39,100,000 | ||||||||||
| Ji-Yeun Lee | 2/10/22 | 2/8/22 | 25,205 | 50,410 | (3) | 50,410 | (3) | $ | 1,971,031 | (3) | |||||||
| Helen T. Meates | 2/10/22 | 2/8/22 | 20,573 | 41,146 | (3) | 41,146 | (3) | $ | 1,608,809 | (3) | |||||||
| David A. Travin | 2/10/22 | 2/8/22 | 8,106 | 16,212 | (3) | 16,212 | (3) | $ | 633,889 | (3) | |||||||
| (1) | Performance LTIPs awarded as long-term incentives are granted in the year following the fiscal year performance period. For instance, for RSUs expected to be granted to each of the Named Executive Officers for performance year 2022, such awards will be granted in 2023 and, therefore, are not included in this table since they were not granted in 2022. | |
| (2) | The Compensation Committee acted to award year-end equity-based awards for the 2021 performance period at its meeting on February 8, 2022, with the grants becoming effective on February 10, 2022. | |
| (3) | Represents Performance LTIPs granted in fiscal year 2022 to each of Mr. Taubman, Ms. Lee, Ms. Meates and Mr. Travin for 2021 performance. Performance LTIPs satisfy the time-vesting requirement over a five-year period with respect to 20% of the award per year. The performance vesting requirement for the Performance LTIPs will be deemed satisfied to the extent that the company’s Class A common stock achieves certain designated-adjusted per-share price targets, based on the 20-day VWAP of the company’s Class A common stock. If the company does not achieve the threshold 20-day VWAP during the performance period, no Performance LTIPs will vest. See “Other Compensation Highlights” on page 33 above, and the discussion following, for more information on LTIPs and Performance LTIPs. | |
| (4) | The average closing price of a share of our Class A common stock over the five trading days immediately prior to and the five trading days immediately following the date that we first publicly issued our earnings release for fiscal year 2022 (with the date earnings are released representing the first day of the second five day period) was used in order to determine the number of restricted stock units to be granted, with grants made effective on February 10, 2022. Since the grant date fair value of these Performance LTIP awards is computed in accordance with GAAP, the amounts reported generally differ from the dollar amount of the portion of the 2021 performance year long-term incentive award grant. |
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Equity Awards at 2022 Fiscal Year-End
The following table sets forth the outstanding equity awards held by our Named Executive Officers as of December 31, 2022.
| Stock Awards | ||||||||||||||
| Name | Number of Shares or Units of Stock that Have Not Vested |
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) |
||||||||||
| Paul J. Taubman | — | — | 1,000,000 | $ | 73,690,000 | |||||||||
| Ji-Yeun Lee | 35,388(1) | $ | 2,607,742 | 50,410 | $ | 3,714,713 | ||||||||
| Helen T. Meates | 26,922(2) | $ | 1,983,882 | 41,146 | $ | 3,032,049 | ||||||||
| David A. Travin | 7,639(3) | $ | 562,918 | 16,212 | $ | 1,194,662 | ||||||||
| (1) | This amount consists of (i) 11,106 restricted stock units that vested on March 1, 2023, (ii) 22,540 restricted stock units that vest ratably on March 1, 2023, 2024, and 2025 and (iii) 1,832 unvested dividend equivalent restricted stock units. | |
| (2) | This amount consists of (i) 7,136 restricted stock units that vested on March 1, 2023, (ii) 18,398 restricted stock units that vest ratably on March 1, 2023, 2024 and 2025, and (iii) 1,388 unvested dividend equivalent restricted stock units. | |
| (3) | This amount consists of (i) 1,063 restricted stock units that vested on March 1, 2023, (ii) 2,037 LTIPs that vest ratably on March 1, 2023, 2024 and 2025, (iii) 4,250 restricted stock units that vest on March 1, 2025, and (iv) 289 unvested dividend equivalent restricted stock units. | |
| (4) | Based on the closing price of our Class A common stock of $73.69 on December 31, 2022. | |
| (5) | Amounts included in this column reflect Performance LTIPs granted in fiscal 2022. Performance LTIPs are subject to both service and performance conditions. Performance LTIPs satisfy the time-vesting requirement over a five year period, with 20% vesting per year commencing on March 1, 2023. The performance vesting requirement for the Performance LTIPs will be deemed satisfied to the extent that the company’s Class A common stock achieves the designated dividend-adjusted per-share prices ranging from $100 to $130. The number of Performance LTIPs for which the performance condition has been met will be determined (i) on a quarterly basis at the end of each fiscal quarter to occur after the grant date and (ii) as of and for the period ended on February 28, 2027 (the “End Date”), based on the highest 20-day VWAP to have been achieved at any time starting on the Grant Date and ending on End Date. If as of any measurement date, the highest 20-day VWAP is between $100 and $130, then the percentage of the total Performance LTIPs that will become Earned Performance LTIPs as of such time shall be determined by linear interpolation between 50% and 100%. The number of Performance LTIPs reported reflects the total number of units granted even though the performance period will not end until February 28, 2027 and vesting is contingent on meeting volume-weighted average share price targets. Therefore, there is no assurance that any portion of these units will be earned. |
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2022 Option Exercises and Stock Vested
The following table sets forth certain information regarding equity awards that vested in 2022 for our Named Executive Officers.
| Stock or Unit Awards | ||||||||
| Name | Number of Shares or Units Acquired on Vesting(1) (#) |
Value Realized on Vesting(2) | ||||||
| Paul J. Taubman | — | — | ||||||
| Ji-Yeun Lee | 23,151 | $ | 1,477,503 | |||||
| Helen T. Meates | 12,926 | $ | 824,964 | |||||
| David A. Travin | 1,553 | $ | 99,081 | |||||
| (1) | Represents the aggregate number of restricted stock units to Ms. Lee, Ms. Meates and Mr. Travin, that vested in 2022. |
| (2) | The value realized on vesting of the equity awards is the product of (a) the closing price on the New York Stock Exchange of a share of our Class A common stock on the vesting date (or, if the vesting date was not a trading day, the immediately preceding trading day), multiplied by (b) the number of equity awards vested. |
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Partner Agreements
Partner Agreement with Paul J. Taubman
PJT Partners Holdings entered into a partner agreement with Mr. Taubman (the “CEO Agreement”) effective October 1, 2015. Mr. Taubman is generally subject to covenants of non-competition and non-solicitation of employees, consultants, clients and investors during his service to PJT Partners Holdings and for a period (the “Restriction Period”) ending one year following the termination of his service to PJT Partners Holdings in the case of the non-competition restrictions, and two years following the termination of his service to PJT Partners Holdings in the case of the non-solicitation restrictions. If Mr. Taubman is terminated by PJT Partners Holdings without cause or he resigns for good reason, the foregoing periods of time during which he will be subject to the non-competition restrictions will be reduced to 120 days and 90 days, respectively. If Mr. Taubman’s service with PJT Partners Holdings is terminated for any reason other than his resignation without Board Change Good Reason or a termination of service by PJT Partners Holdings for cause, in each case within 24 months following a Board Change of Control, then
| (1) | the covenants of non-competition and non-solicitation of clients and investors will expire upon termination, and | |
| (2) | the covenants of non-solicitation of employees and consultants will expire six months after termination. Mr. Taubman is also subject to perpetual covenants of confidentiality and non-disparagement. |
For purposes of the CEO Agreement:
| ˃ | “cause” means the occurrence or existence of any of the following: |
| (i) | Mr. Taubman’s willful act of fraud, misappropriation, or embezzlement against PJT Partners Holdings that has a material adverse effect on the business of PJT Partners Holdings. |
| (ii) | Mr. Taubman’s conviction of a felony; or |
| (iii) | an un-appealable final determination by a court or regulatory body having authority with respect to securities laws that Mr. Taubman violated any applicable securities laws or any rules or regulations thereunder if such final determination: |
| (A) | bars Mr. Taubman from employment in the securities industry or |
| (B) | renders Mr. Taubman unable to substantially perform his duties to PJT Partners Holdings; provided that, PJT Partners Holdings must provide a notice of termination to Mr. Taubman within 60 days of the occurrence of the event constituting “cause,” and, other than with respect to clause (ii) above, Mr. Taubman will have the opportunity to cure within 30 days of receiving such notice. |
| ˃ | “Good reason” means the occurrence of any of the following events without Mr. Taubman’s written consent: |
| (i) | a material adverse change in Mr. Taubman’s titles, positions, authority, duties or responsibilities. |
| (ii) | the assignment of any duties materially inconsistent with Mr. Taubman’s positions. |
| (iii) | a reduction of Mr. Taubman’s salary. |
| (iv) | the relocation of Mr. Taubman’s principal place of service to anywhere other than PJT Partners Holdings’ principal office. |
| (v) | a material breach by PJT Partners Holdings or its affiliates of the CEO Agreement or any other material agreement with PJT Partners Holdings or its affiliates. |
| (vi) | the failure of PJT Partners Holdings to nominate Mr. Taubman or Mr. Taubman’s failure to be elected to the Board (other than as a result of Mr. Taubman’s voluntary resignation) or Mr. Taubman’s removal as a member of the Board by PJT Partners Holdings (other than for “cause”); |
| (vii) | the hiring or firing of any Executive Officer; or |
| (viii) | the failure by PJT Partners Holdings to obtain written assumption of the Partner Agreement by a purchaser or successor of PJT Partners Holdings; provided that, Mr. Taubman must provide a notice of termination to PJT Partners Holdings within 60 days of the occurrence of the event constituting “good reason,” and PJT Partners Holdings will have the opportunity to cure within 30 days of receiving such notice. |
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| ˃ | “Board Change Good Reason” means the occurrence of any of the following events without Mr. Taubman’s written consent: |
| (i) | A material adverse change in Mr. Taubman’s titles, positions, authority, duties or responsibilities. |
| (ii) | The assignment of any duties materially inconsistent with Mr. Taubman’s positions. |
| (iii) | A reduction of Mr. Taubman’s salary. |
| (iv) | The relocation of Mr. Taubman’s principal place of service to anywhere other than PJT Partners Holdings’ principal office. |
| (v) | A breach by PJT Partners Holdings or its affiliates of the CEO Agreement or any other material agreement with PJT Partners Holdings or its affiliates. |
| (vi) | The failure of PJT Partners Holdings to nominate Mr. Taubman or Mr. Taubman’s failure to be elected to the Board (other than as a result of Mr. Taubman’s voluntary resignation) or Mr. Taubman’s removal as a member of the Board by PJT Partners Holdings (other than for “cause”); (vii) the failure by PJT Partners Holdings to obtain written assumption of the CEO Agreement by a purchaser or successor of PJT Partners Holdings. |
| (vii) | PJT Partners Holdings or any of its affiliates effecting a material disposition, acquisition or other business combination. |
| (viii) | PJT Partners Holdings or any of its affiliates entering into a new significant business line or discontinuing a significant existing business line. |
| (ix) | the hiring or firing of any Executive Officer; or (xi) PJT Partners Holdings or any of its affiliates making any material compensation decisions with respect to employees other than Mr. Taubman or PJT Partners Holdings or any of its affiliates failing to implement any material compensation decision made by Mr. Taubman with respect to employees; provided that, Mr. Taubman must provide a notice of termination to PJT Partners Holdings within 120 days of the occurrence of the event constituting “Board Change Good Reason,” and PJT Partners Holdings will have the opportunity to cure within 10 days of receiving such notice. |
| ˃ | “Board Change of Control” means a majority of the members of the Board ceasing to be “continuing directors” which means any member of the Board who: |
| (i) | was a member of such board immediately following the merger and spin-off transactions on October 1, 2015; or |
| (ii) | was nominated for election or elected or appointed to the board with the approval of a majority of the “continuing directors” who were members of such board at the time of such nomination, election or appointment. |
Partner Agreements with Ji-Yeun Lee, Helen T. Meates and David A. Travin
PJT Partners Holdings entered into partner agreements with each of Ms. Lee and Ms. Meates, effective October 1, 2015, and Mr. Travin, effective January 1, 2021. The agreements generally set forth the terms of service of each officer, including their respective compensation and benefits, as described in “Elements of Our Compensation Program.”
These officers are generally subject to covenants of non-competition and non-solicitation of employees, consultants, clients and investors during their service to PJT Partners Holdings and for a period (the “Restriction Period”) ending one year following the termination of service to PJT Partners Holdings in the case of the non-competition restrictions, and two years following the termination of service to PJT Partners Holdings in the case of the non-solicitation restrictions. If the Executive Officer is terminated by PJT Partners Holdings without cause or the Executive Officer resigns for good reason, the foregoing periods of time during which they will be subject to the non-competition restrictions will be reduced to 120 days and 90 days, respectively. The officers are also subject to perpetual covenants of confidentiality and non-disparagement.
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For purposes of the partner agreements with Ms. Lee, Ms. Meates and Mr. Travin:
| ˃ | “cause” means the occurrence or existence of any of the following: |
| (i) | (x) any material breach of the partner agreements, (y) material breach of any material rules or regulations of PJT Partners Holdings applicable that have been provided that has a material adverse effect on the business of PJT Partners Holdings, or (z) deliberate and repeated failure to perform substantially the Executive Officer’s material duties to PJT Partners Holdings; provided that, in the case of any of the foregoing clauses (x), (y) or (z), PJT Partners Holdings has given the Executive Officer written notice within fifteen days after PJT Partners Holdings becomes aware of such action and, to the extent such action is curable, the Executive Officer fails to cure such breach, failure to perform or conduct or behavior within fifteen days after receipt by the Executive Officer of such notice (or such longer period, not to exceed an additional fifteen days, as shall be reasonably required for such cure, provided that the Executive Officer is diligently pursuing such cure); |
| (ii) | any act of fraud, misappropriation, embezzlement or similar conduct by the Executive Officer against PJT Partners Holdings; or |
| (iii) | conviction (on the basis of a trial or by an accepted plea of guilty or nolo contendere) of a felony or crime of moral turpitude, or a determination by a court of competent jurisdiction, by a regulatory body or by a self-regulatory body having authority with respect to securities laws, rules or regulations, that the Executive Officer individually has violated any securities laws or any rules or regulations thereunder, or any rules of any such self-regulatory body (including, without limitation, any licensing requirement), if such conviction or determination has a material adverse effect on: |
| (A) | the Executive Officer’s ability to function as a partner, taking into account the services required of the Executive Officer and the nature of PJT Partners Holdings’ business, or |
| (B) | the business of PJT Partners Holdings. |
| ˃ | “good reason” means the occurrence of any of the following events without the Executive Officer’s written consent: |
| (i) | a material adverse change in the Executive Officer’s title, authority, duties or responsibilities; |
| (ii) | the relocation of the Executive Officer’s principal place of service by more than 50 miles; |
| (iii) | a material breach by PJT Partners Holdings or its affiliates of the partner agreement or any other material agreement with PJT Partners Holdings or its affiliates; or |
| (iv) | the failure by PJT Partners Holdings to obtain written assumption of the partner agreement by a purchaser or successor of PJT Partners Holdings; provided that, the Executive Officer must provide a notice of termination to PJT Partners Holdings within 60 days of the occurrence of the event constituting Good Reason, and in the event the Executive Officer provides notice of “good reason,” PJT Partners Holdings will have the opportunity to cure such event constituting “good reason” within 30 days of receiving such notice. |
Potential Payments upon Termination of Employment or Change in Control
Other than with respect to the potential continued or accelerated vesting of outstanding equity awards that each of our Named Executive Officers may be entitled to in connection with certain terminations of employment or a change in control, our Named Executive Officers are not entitled to any additional payments or benefits following a change in control or upon termination of employment, and are only entitled to payments and benefits that are available generally on a non-discriminatory basis to all salaried employees, such as continuation of health care benefits through the end of the month of the termination of employment.
Restricted Stock Unit Awards
If the participant’s employment is terminated for cause, the participant’s undelivered restricted stock units (vested and unvested) will be immediately forfeited, and if the participant resigns, the participant’s unvested restricted stock units will be immediately forfeited. Upon a change in control or termination of the participant’s services because of death, disability or without cause by the company, the shares underlying any outstanding restricted stock units (vested and unvested) will become immediately deliverable. In connection with a qualifying retirement, restricted stock units will continue to vest and be delivered over the applicable vesting period, subject to forfeiture if the participant violates any applicable provision of his or her employment or partner agreement or engages in any competitive activity.
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LTIP Unit Awards
If the participant’s employment is terminated for cause, the participant’s undelivered LTIP Units (vested and unvested) will be immediately forfeited, and if the participant resigns, the participant’s unvested LTIP Units will be immediately forfeited. Upon a change in control or termination of the participant’s services because of death, disability or without cause by the company, the shares underlying any outstanding LTIP Units (vested and unvested) will become immediately deliverable. In connection with a qualifying retirement, LTIP Units will continue to vest and be delivered over the applicable vesting period, subject to forfeiture if the participant violates any applicable provision of his or her employment or partner agreement or engages in any competitive activity.
Performance LTIPs
If the participant’s employment is terminated for cause or the participant resigns, the participant’s unvested Performance LTIPs will be immediately forfeited. Upon a change in control or termination of the participant’s services because of death, disability or without cause by the company, the shares underlying any outstanding Performance LTIPs will be deemed to have fully satisfied the service condition of the award and any units that have met the performance condition will become vested as of the termination date. In connection with a qualifying retirement, Performance LTIPs will continue to vest over the applicable vesting period, provided the performance conditions are met, but are subject to forfeiture if the participant violates any applicable provision of his or her employment or partner agreement or engages in any competitive activity. Mr. Taubman’s Performance LTIPs do not have a retirement provision.
The following table quantifies the value of our Named Executive Officers’ outstanding equity awards that would accelerate and vest upon certain terminations of employment or a change in control. All calculations in this table are based on an assumed termination or change in control date of December 31, 2022.
| Name | Accelerated Vesting of Equity Awards(1)(2) | |||
| Paul J. Taubman | ||||
| Termination by Us with “Cause” | — | |||
| Termination by Us without “Cause” | — | |||
| Disability | — | |||
| Death | — | |||
| Change in Control | — | |||
| Ji-Yeun Lee | ||||
| Termination by Us with “Cause” | — | |||
| Termination by Us without “Cause” | $ | 2,607,742 | ||
| Disability | $ | 2,607,742 | ||
| Death | $ | 2,607,742 | ||
| Change in Control | $ | 2,607,742 | ||
| Helen T. Meates | ||||
| Termination by Us with “Cause” | — | |||
| Termination by Us without “Cause” | $ | 1,983,882 | ||
| Disability | $ | 1,983,882 | ||
| Death | $ | 1,983,882 | ||
| Change in Control | $ | 1,983,882 | ||
| David A. Travin | ||||
| Termination by Us with “Cause” | — | |||
| Termination by Us without “Cause” | $562,918 | |||
| Disability | $562,918 | |||
| Death | $562,918 | |||
| Change in Control | $562,918 | |||
| (1) | The value of accelerated equity awards, for purposes of this table, was determined by multiplying the applicable number of equity awards (including associated RSU dividend equivalents) that would vest upon termination or change in control by $73.69, the closing price of our Class A common stock on December 31, 2022. No values are reflected for Performance LTIPs as such awards had not achieved the minimum 20-day VWAP vesting condition applicable to such award as of December 31, 2022. | |
| (2) | Mr. Taubman’s Performance LTIPs have no retirement provision. |
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CEO Pay Ratio
Presented below is the ratio of annual total compensation of Mr. Taubman, our CEO, to the median annual total compensation for all our employees (other than our CEO) as of December 31, 2022 (the “CEO Pay Ratio”). We believe the pay ratio included below is a reasonable estimate determined under relevant SEC rules. However, due to the flexibility afforded by Item 402(u) of Regulation S-K in calculating the CEO Pay Ratio, our CEO Pay Ratio may not be comparable to the CEO pay ratios presented by other companies.
For 2022, the annual total compensation of our median employee, the annual total compensation of our CEO, pursuant to the methodology described below and in accordance with the requirements for determining total compensation in the Summary Compensation Table, and the resulting pay ratio are shown in the table below:
| 2022 Annual Total Compensation | ||||
| CEO | $ | 40,116,595 | ||
| Median Employee | $ | 396,000 | ||
| CEO Pay Ratio | 101:1 | |||
In 2022, the Compensation Committee granted to Mr. Taubman 1,000,000 Performance LTIPs, with the performance and time-based vesting conditions as described under the “Other Compensation Highlights” section above, in order to provide an appropriate link between compensation and the creation of shareholder value through long-term focused and retention-driven incentive awards.
If the 2022 annual compensation for Mr. Taubman was calculated based on the methodology applied in the table under “Compensation of Our Executive Officers—Elements of Our Compensation Program—Alternative Presentation of Annual Compensation,” which is reflective of compensation related to the 2022 performance year, the total annual compensation for Mr. Taubman for 2022 would be $1,000,000, resulting in a ratio of the annual total compensation of Mr. Taubman to the annual total compensation of our median employee of approximately 3 to 1.
Background. We identified our median employee using our partner and employee population, excluding Mr. Taubman, as of December 31, 2022. To identify our median employee, we used:
| (1) | base salary, | |
| (2) | cash bonus awarded in respect of such year’s performance, and | |
| (3) | long-term incentives awarded in respect of such year’s performance. |
We believe this consistently applied compensation measure reasonably reflects annual compensation across our employee base. This methodology was also applied to compensation reflected for our Named Executive Officers in the table under “Compensation of Our Executive Officers—Elements of Our Compensation Program—Alternative Presentation of Annual Compensation” and represents compensation in the manner considered by our Compensation Committee for determining annual compensation.
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Pay versus Performance
The Compensation Discussion and Analysis section of this Proxy Statement sets forth the financial and other factors considered by the Compensation Committee when reviewing and setting the compensation of our CEO and other Named Executive Officers (“non-CEO NEOs”) for the 2022 performance year. Our executive compensation program considers company-wide financial measures to ensure alignment with shareholders, in addition to goals targeted to each of the Named Executive Officers. We seek to ensure that each Named Executive Officer has goals that are tied to tangible measures of business success as well as those that are focused on leadership and talent development. Rewards for our Executive Officers are structured to ensure a focus on the long-term success of the company. This is typically achieved by granting a significant portion of annual incentives in the form of restricted stock awards that vest over four years.
As required by Item 402(v) (the “Rule”) of Regulation S-K, the following sets forth information regarding compensation of our CEO and our non-CEO NEOs. In accordance with the Rule, the table below and the discussion that follows includes an amount referred to as “compensation actually paid” as defined in Item 402(v)(2)(iii).
The calculation of this amount includes, among other things, the revaluation of unvested and outstanding equity awards. In accordance with the Rule, the revaluation of stock and option awards includes, as applicable:
| ˃ | the year-end fair value of the awards granted in the covered fiscal year (e.g., 2022) that are outstanding and unvested as of the end of the covered fiscal year; | |
| ˃ | the change in fair value from the end of the prior fiscal year (e.g., 2021) to the end of the covered fiscal year with respect to any awards granted in prior years that are outstanding and unvested as of the end of the covered fiscal year; | |
| ˃ | the fair value, as of the vesting date, of any awards that were granted and vested in the same covered year; and | |
| ˃ | the change in fair value from the end of the prior fiscal year to the vesting date or forfeiture date with respect to any awards granted in prior years that vested or failed to vest, as applicable, in the covered fiscal year. Stock awards include the dollar amount of accrued dividend equivalents, if applicable. |
Importantly, as of the valuation dates in the table, none of the amounts included in “compensation actually paid” for our CEO and non-CEO NEOs relating to performance share awards have been paid to our CEO or non-CEO NEOs. The amounts actually received will depend upon the company’s stock price at point of vesting, including in the case of performance shares, whether the requisite performance hurdles and service requirements are met.
Compensation actually paid to our CEO includes valuations in respect of awards granted at the spin-off, with such units earned as a result of the company achieving certain share price thresholds. Specifically, 98% of the 2020 compensation actually paid value relates to the vesting of two tranches of Mr. Taubman’s performance Earn-Out award for which share price hurdles were achieved during the year, in aggregate equating to stock price appreciation of more than 300% from inception. The final tranche of Mr. Taubman’s Earn-Out award failed to meet the share price hurdle within the required time frame, which would have required share price appreciation of 376% since inception. Accordingly, 2021 compensation actually paid includes value attributed to the forfeiture of this final tranche.
For 2022, the values represent the Performance LTIP units granted to Mr. Taubman on February 10, 2022 that generally vest over a five-year period contingent on the achievement of significant performance hurdles and Mr. Taubman’s continued employment with the company for five years from grant. The company does not currently anticipate paying Mr. Taubman any further equity incentive compensation through the end of 2026. These Performance LTIP units are intended to reward performance on a multi-year basis and in a manner that is fully aligned with shareholders.
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