WILLIS TOWERS WATSON PLC
For the period ended May 22, 2024. Filed Apr 4, 2024.
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What shareholders are asked to vote on at a company's meeting. It is where to find what directors and top executives are paid, and who owns the most shares.
May 22, 2024 · Filed Apr 4, 2024
Contents
Proxy Statement Highlights
Willis Towers Watson Public Limited Company is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. We have approximately 48,000 colleagues and service clients in more than 140 countries and markets. In this Proxy Statement, we refer to Willis Towers Watson as the “Company,” “WTW,” “we” and “our.”
VOTING MATTERS
| Proposal | Page number | Board voterecommendation | Vote Requirement |
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| Proposal No.1: Elect Directors To elect the ten persons named in this Proxy Statement to serve as directors for a one-year term until the next AGM | 1 | FOR | Majority of votes cast |
| Proposal No. 2: Ratify the Appointment of the Independent Auditors in an Advisory (Non-binding) Vote and Fix the Independent Auditors’ Remuneration in a Binding Vote To ratify, on a non-binding advisory basis, the selection of (i) Deloitte & Touche LLP to audit our financial statements and (ii) Deloitte Ireland LLP to audit our Irish Statutory Accounts, and to authorize the Board, acting through the Audit and Risk Committee, to fix the remuneration of the independent auditors on a binding basis | 32 | FOR | Majority of votes cast |
| Proposal No. 3: Approve Named Executive Officer Compensation in an Advisory (Non-binding) Vote To approve, in an advisory (non-binding) vote, the compensation of the Company’s named executive officers | 36 | FOR | Majority of votes cast |
| Proposal No. 4: Renew the Board’s Existing Authority to Issue Shares under Irish Law To renew the Board’s authority to issue up to approximately 20% of the Company’s issued ordinary share capital as of March 25, 2024, for a period expiring 18 months from the passing of the resolution | 103 | FOR | Majority of votes cast |
| Proposal No. 5: Renew the Board’s Existing Authority to Opt Out of Statutory Pre-emption Rights under Irish Law To renew the Board’s authority to issue, free of pre-emptive rights, up to 5% of the Company’s issued ordinary share capital as of March 25, 2024 (and an additional 5% provided the Company uses it only in connection with an acquisition or approved capital acquisition) for a period expiring 18 months from the passing of the resolution | 104 | FOR | 75% of votes cast |
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Key Governance Practices and Policies
Key Director Statistics*
Since the beginning of 2022, nine new directors, including a new CEO and eight new independent directors, joined the Board. We believe that our commitment to diversity is demonstrated by our Board composition, which reflects diversity (as self-identified) of gender, ethnicity and nationality, and varied backgrounds and skill sets, including as follows:
| • | 40% of directors identify as female; |
| • | 10% of directors identify as LGBT+; |
| • | 10% of directors identify as Black; and |
| • | 75% of Board Committee Chairs are female and 50% identify as Black or LGBT+. |
Multi-Year Board Succession, Refreshment and Tenure
As highlighted above, since the beginning of 2022, eight new independent directors joined the Board (including three new independent directors in 2023) and five directors transitioned off of the Board, in connection with a multi-year succession planning process, which included input from a third-party consulting firm. This approach to refreshing the Board has aimed to balance the importance of adding new directors to the Board while also facilitating their onboarding by providing for a transition period that allows them to work with our more tenured directors before the latter retire from the Board. The directors have a wide range of skills relevant to overseeing the Company’s strategic plan, including expertise in insurance, finance, transformation and technology.
The Corporate Governance and Nominating Committee (the “Governance Committee”) then led an in-depth review of the Board’s policy on tenure in relation to service as a director, Board Committee Chair or Board Chair. As a result of this review, the Board adopted the following tenure limitations, as reflected in the Corporate Governance Guidelines:
| • | No re-nomination after completing 12 years of service as a director of Willis Towers Watson PLC (unless otherwise determined by the Board at the recommendation of the Governance Committee to be in the best interest of the Company). |
| • | Board and Committee chairs elected annually and not expected to serve for more than six consecutive terms (unless otherwise determined by the Board at the recommendation of the Governance Committee to be in the best interest of the Company). |
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Corporate Governance Highlights
| ✓ | Focus on multi-year Board succession and refreshment to help ensure that the Board’s composition remains aligned with the evolving needs of the business, including through robust annual Board evaluation process |
| ✓ | Board Committee and Chair refreshment help ensure that fresh viewpoints and perspectives are regularly considered |
| ✓ | Regular review of Board Committee responsibilities and focus |
| ✓ | Operational Transformation Committee oversight of the implementation of the Company’s operational transformation plan (the “Transformation Program”), which aims to achieve significant run rate cost savings by the end of 2024 |
| ✓ | Active Board participation in management succession and oversight of Company strategic planning |
| ✓ | Onboarding and regular continuing director education |
| ✓ | Formal Board and Board Committee oversight of sustainability initiatives, risks and disclosures |
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Board Committee Overview
| Audit and Risk Committee The Audit and Risk Committee generally assists the Board in overseeing, among other matters: • the integrity of the Company’s financial statements; • the independent auditors and the internal audit function; • the Company’s compliance with legal and regulatory requirements, and internal accounting controls and procedures; and • the enterprise risk management framework, policies and practices used to identify, assess and manage key risks facing the Company and its subsidiaries. | Corporate Governance and Nominating Committee The Corporate Governance and Nominating Committee generally assists the Board in overseeing, among other matters: • Board Committee purpose, structure and operations; • the director selection process, the development of director qualification standards and the identification of director nominees; • the evaluation of director time commitments, including with respect to other board leadership positions; and • the Company’s sustainability initiatives, as discussed more below (with the relevant Board Committees managing their specific sustainability responsibilities pursuant to their respective charters), including the Company’s environmental sustainability program and charitable contributions. |
| Human Capital and Compensation Committee The Human Capital and Compensation Committee generally assists the Board in overseeing, among other matters: • the Company’s general compensation philosophy and the development and implementation of compensation programs in accordance with the philosophy; • executive officer compensation, annual corporate goals and objectives relevant to their compensation, and their performance in light of those goals; • compensation policies as well as incentive compensation and equity-based plans for the executive officers; and • the implementation of the Company’s human capital and talent strategy, including recruiting and development strategies, inclusion and diversity initiatives and the development of senior leaders. | Operational Transformation Committee The Operational Transformation Committee generally assists the Board in overseeing, among other matters: • management efforts to develop, implement and monitor the Transformation Program and drive operational efficiencies; • management’s initiatives to drive operational efficiencies and the implementation of the Transformation Program; and • risk management in relation to the Transformation Program and risks arising out of the Company’s operations that support the Company’s businesses, including, among other items, risks related to technology, cybersecurity and information security. |
Refer to the section entitled “Corporate Governance – Willis Towers Watson Board Committees” for more information on the Board Committees’ responsibilities.
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Sustainability
Commitment: Our clients, colleagues and other stakeholders expect us to conduct our business with integrity and in an environmentally and socially responsible manner. We take these expectations seriously and, consistent with what we believe enhances long-term value, have embraced principles that are aligned with our business priorities, are consistent with our commitment to ethical and sustainable practices and demonstrate our respect for those communities in which we operate across the globe.
Management Oversight: In 2019, the Company formed a cross-functional management committee to coordinate and facilitate communication of the Company’s sustainability initiatives applicable to its own operations. “Sustainability” is how we refer to our environmental, social and governance (“ESG”) strategy that guides our internal operations.
Board Oversight: The Board takes an approach that the most appropriate Committee should maintain oversight over a particular issue rather than concentrating all sustainability initiatives into any one Committee. The Committees report to the Board as appropriate.
To learn more about our sustainability principles, commitments and related statements, and to review our ESG report (which includes EEO-1 data) and SASB appendix, and TCFD disclosure, visit: https://www.wtwco.com/en-US/ About-Us/environmental-social-and-governance. The information on, or accessible through, our website and our other reports is not part of or incorporated by reference into this Proxy Statement.
Shareholder Outreach
We conduct a semi-annual shareholder outreach program whereby we reach out to shareholders holding over 50% of our outstanding shares. Over the past several years, we have incorporated feedback from our shareholders in parts of our executive compensation, governance and other sustainability programs.
Our Business
WTW
Delivering superior advice, broking and solutions in the areas of people, risk and capital. We have: • A portfolio of leading businesses in attractive markets • A distinctive mix of complementary businesses – Accomplished and aspiring talent – Collaborative client-first culture – Sophisticated data and analytics – Powerful tools • A strong balance sheet and significant financial flexibility
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Segment Overview
| Health, Wealth & Career (“HWC”) World-class portfolio of leading businesses providing advisory, broking and consulting services within human capital, employee benefits and retirement verticals | |||
| Health provides advice, broking, solutions and software for employee benefit plans, HR organizations and management teams of our clients | Wealth provides advice to and management for retirement and investment asset owners using a sophisticated framework for managing risk | Career provides compensation advisory services, employee experience software and platforms, and other career-related consulting services to our clients | Benefits Delivery & Outsourcing provides medical exchange and outsourcing services to active employees and retirees across the group and individual markets as well as pension outsourcing |
| Risk & Broking (“R&B”) Risk advisory and solutions business delivering innovative, integrated solutions tailored to client needs and underpinned by cutting edge data and analytics, technology and experienced risk thinkers | |||
| Corporate Risk & Broking provides a broad range of risk advisory, insurance brokerage, and consulting services to clients worldwide ranging from small businesses to multinational corporations | Insurance Consulting and Technology provides advice and technology solutions to the insurance industry to help clients measure and manage risk and capita and improve performance | ||
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Key Executive Compensation Practices and Policies
| 2023 Named Executive Officers (“NEOs”) | ● Our 2023 NEOs are Carl Hess (CEO), Andrew Krasner (CFO), Julie Gebauer (Global Head of HWC), Adam Garrard (Global Head of R&B) and Matthew Furman (General Counsel). |
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| Pay for Performance: Short-Term Incentive (“STI”) and Long-Term Incentive (“LTI”) Awards | • Significant portion of NEO compensation is variable and at-risk, including STI awards (cash) and LTI awards (equity). • Incentive plans include a range of metrics to reward NEOs for exceptional performance and contributions at the enterprise, business and individual levels. • Based on our financial performance, progress against our strategic priorities, and other factors taken into consideration for 2023, NEO 2023 STI awards were earned at 122.5% to 126.6% of target and 2021 LTIP performance-based restricted share units (“PSUs”), with a performance period that concluded at the end of 2023, were earned at 91.6% of target. Refer to the section entitled “Executive Compensation: Compensation Discussion and Analysis” for a detailed discussion on 2023 performance relative to the goals and objectives of our incentive plans and resulting NEO pay outcomes. |
| Shareholder Aligned Executive Compensation Program | • LTI award, in the form of 75% PSUs and 25% time-based restricted share units (“RSUs”), makes up the largest portion of the CEO’s target total direct compensation and, on average, 46% of the other NEOs’ target total direct compensation. • 2023 PSU performance metrics align a significant portion of NEO compensation with WTW’s strategic priorities and commitment to driving shareholder value. • Majority of 2023 STI awards are based on enterprise financial performance and shared key enterprise operational initiatives which support and drive successful execution of our strategic priorities. • Share ownership policy applicable to executive officers; minimum guideline of 6x base salary for CEO and 3x base salary for all other executive officers. |
| Compensation Recoupment | • Compensation recoupment policy applicable to NEOs’ cash and equity incentive awards in the event of financial restatement or detrimental conduct. The Company is subject to the rules of the NASDAQ and has adopted a revised Compensation Recoupment Policy in accordance with the rules recently adopted by NASDAQ. |
| Executive Severance Plans | • Executive severance plans provide for the payment of certain severance benefits to NEOs in the event of: (i) involuntary termination outside of a change in control period and (ii) involuntary termination or good reason resignation during a of change in control period. • Severance amounts are generally competitive with market practices and determined as a multiple of the NEO’s base salary and STI target and may also include a pro-rata portion of the STI award payable for the year of termination and the cost of continued medical coverage for a period following termination. • NEOs do not receive any form of tax gross-ups, significant perquisites or automatic payments in connection with a change in control of the Company. |
| Say-on-Pay | • We hold an annual advisory vote on the compensation of our NEOs. • Shareholder support of our executive compensation program has been consistently strong with a Say-on-Pay approval rate of 96.8% at the 2023 AGM. |
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