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SEC Filings

DEF 14A
FLEETCOR TECHNOLOGIES INC filed this Form DEF 14A on 05/01/2017
Entire Document
 


Period Ending
 
FleetCor
Technologies, Inc.
 
Russell 2000
 
S&P Data
Processing and
Outsourced
Services
 
Performance Peer Group Average
 
Industry Peer Group Average
12/31/2011
 
$100.00
 
$100.00
 
$100.00
 
$100.00
 
$100.00
12/31/2012
 
$175.56
 
$112.90
 
$127.24
 
$162.21
 
$114.27
12/31/2013
 
$383.41
 
$154.68
 
$193.11
 
$209.93
 
$171.69
12/31/2014
 
$486.62
 
$160.14
 
$216.56
 
$219.59
 
$190.65
12/31/2015
 
$467.70
 
$150.99
 
$239.38
 
$197.73
 
$205.12
12/31/2016
 
$463.09
 
$180.40
 
$253.40
 
$226.15
 
$215.08
Consideration of Peer Groups and Compensation Levels
Periodically, the compensation committee may determine it appropriate to engage a compensation consultant. The compensation committee engaged a compensation consultant in both 2013 and 2014, and determined the analysis provided by the compensation consultant was performed sufficiently recent for use in 2015 and 2016. The compensation committee will continue to engage a compensation consultant as it deems appropriate in future periods. During 2014, and for use with considering and setting compensation, the independent consultant collected and analyzed comprehensive market data for the compensation committee’s use. Mercer conducted a study of four distinct market references, three of which were scoped based on comparable market capitalization (performance group, industry group and general industry survey group scoped based on all companies in the general industry with market capitalization of $5 billion to $18 billion, or approximately 0.5x to 2x that of the Company) and the final group based on annual revenues.
The consultant presented to the compensation committee market figures based on each company in the performance-based and industry-based peer groups, as well as the 25th, 50th and 75th percentile of each respective peer group, to determine market for base salary, target short-term incentive opportunity and long-term incentive opportunity. The compensation committee reviewed the data for each of the named executive officers for purposes of setting each of the elements of compensation and then made individual compensation decisions, taking into consideration such factors as performance, retention, internal equity, individual development, and succession planning, based upon each peer group. The compensation committee did not target any particular quartile or percentage in making compensation decisions. As a result, actual pay opportunities for our executives may be higher or lower than the median indicated by the peer groups.
The results of the compensation consultant’s studies revealed two important findings:
1.
Higher performing companies do not offer higher target levels of compensation than average performing companies; and
2.
The disparity between the Company’s market capitalization and revenues causes incongruence between pay levels in that companies with market capitalizations similar to the Company have higher target compensation levels than companies with revenues similar to the Company.
Given the significance of this second finding and the need of the Company to retain top talent at all levels, including our CEO, and given the current market capitalization of the Company, the compensation committee has determined that the two peer groups are the most likely competitors for talent and as such represent the most appropriate reference when considering the compensation of executives. The compensation committee concludes that while revenue is a strong metric on which to gauge the Company’s performance, the Company consistently out-performs the general market of companies with similar revenues, and this may not be a useful metric on which to evaluate appropriate peers for compensation levels of the Company’s executives, especially the CEO.
The compensation consultant also concluded, based on their review of the compensation level of Company executives, that generally cash compensation is at or below market levels for all Company officers. Long-term incentive compensation is above market for certain officers, which causes their total direct compensation to be above market. It is important to note that the compensation consultant’s review was of one year of compensation and FleetCor has a history of front-loaded grants, which may result in inconsistent and less meaningful comparisons to other companies with typical annual grant cycles.
Furthermore, the long-term incentives only have value if the Company continues to grow and the employee performs, since performance awards require meaningful contributions by the employee and options only have value to the extent that the stock price increases from the date of grant. The risk in this case is carried by the employee, as the employee is only rewarded if the employee performs and/or the Company continues to perform.
We believe that this mix of compensation better aligns the employee interests with those of our stockholders and helps ensure goals remain aligned to continue the significant growth that the Company has experienced since our initial public offering.

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