EPAM Systems Inc
For the period ended May 31, 2024. Filed Apr 16, 2024.
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May 31, 2024 · Filed Apr 16, 2024
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant
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Filed by a Party other than the Registrant
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Check the appropriate box:
| ☐ | Preliminary Proxy Statement |
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| ☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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| ☑ | Definitive Proxy Statement |
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| ☐ | Definitive Additional Materials |
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| ☐ | Soliciting Material Pursuant to §240.14a-12 |
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EPAM Systems, Inc.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (check the appropriate box):
| ☑ | No fee required. |
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| ☐ | Fee paid previously with preliminary materials. |
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| ☐ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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Dear Fellow Stockholders,
On behalf of our Board of Directors, we are pleased to invite you to attend the EPAM Annual Meeting of Stockholders (the “Annual Meeting”) to be held on May 31, 2024, beginning at 10:00 am EDT. Details for attending the Annual Meeting via live audio webcast are in the Notice of 2024 Annual Meeting of Stockholders following this letter.
When I look back at how EPAM has performed in the past few years, I realize that we have faced unprecedented levels of change and transformation in our business. At the same time, our Company has never shown more flexibility in responding to a highly dynamic operating environment.
As we began 2023, we faced an environment of heightened economic uncertainty and complex demand conditions, which required EPAM to adapt as we leaned harder into the market to:
| • | Win and quickly grow new clients through increased focus on domain-led sales and go-to-market efforts and investments in global partnerships. |
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| • | Address our current clients’ most pressing tactical issues, including the mix of engagement models, cost-takeouts, and consolidation priorities, all the while protecting long-term relationships. |
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| • | Continuously invest in our strategic priorities, which included Consulting, AI, Digital, Data and Security. |
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Additionally, we made considerable progress in the acceleration of our Geographic Diversification Strategy over the last two years, integrating more than 13,000 employees we relocated from the region impacted by the war in Ukraine, in addition to hiring in geographies including India and Latin America.
Over the last two years, EPAM has transformed its footprint significantly and, we believe, now has one of the most diversified talent footprints across multiple locations in Central and Eastern Europe, Central and Western Asia, India, and Latin America.
In 2023, EPAM was not immune to the pressures of an IT services market that focused on cost versus investment in custom build and related services, which impacted our financial performance when compared to 2022, including:
| • | Revenues of approximately $4.7 billion, a contraction of 2.8% on a reported basis, |
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| • | GAAP Operating Margins of approximately 11% and Non-GAAP Operating Margins* of 16.3%, which was within our initially guided range established at the beginning of 2023, |
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| • | From an EPS perspective, GAAP diluted earnings per share (EPS) of $7.06, and Non-GAAP* diluted EPS |
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| • | of $10.59, with a year-over-year EPS growth of flat to down 2.8% respectively, and finally |
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| • | Completing the year with a strong balance sheet, with more than $2.0 billion in cash and cash equivalents. |
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Lastly, we continue to focus on a holistic EPAM, by making positive contributions to the communities in which we operate and championing corporate social responsibility efforts, including:
| • | The advancement of our sustainability journey, the core pillars of which include operating ethically, protecting the environment, and supporting our global and local communities, including EPAM’s focused efforts to our employees in Ukraine, where we have provided more than $62 million of humanitarian relief over the last two years. |
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| • | New in 2023, the launch of EPAM’s Employee Affinity Groups across the Company, focused on building awareness, community and supporting a diverse workforce within EPAM. |
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I am encouraged by the road ahead. If there is one thing we have proven over our 30 years of existence, EPAM is adaptable. We remain committed to accelerating our mission of becoming a true value orchestrator for our customers.
In conclusion, I want to thank our stockholders, who have been faithful, and believe in the long-term value creation story that EPAM stands for. I look forward to our continued partnership together.
We look forward to this year’s Annual Meeting.
Arkadiy Dobkin
President, Chief Executive Officer and Chairman of the Board
April 16, 2024
| * | Non-GAAP operating margin and diluted EPS are non-GAAP financial measures. Refer to “Appendix A: Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Measures” for additional information. |
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1 | 2024 Proxy Statement
Notice of 2024 Annual Meeting of Stockholders
| Time & Date | 10:00 a.m. EDT – May 31, 2024 | |
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| Place | Live audio webcast of the Annual Meeting will be available at https://www.virtualshareholdermeeting.com/EPAM2024. | |
| Access | You will be able to attend the Annual Meeting, vote, and submit your questions during the live audio webcast of the Annual Meeting by visiting https://www.virtualshareholdermeeting.com/EPAM2024. You will be able to vote and submit questions before the Annual Meeting at www.proxyvote.com by logging in using the 16-digit control number provided with your proxy materials. | |
| Record Date | The record date for the determination of the stockholders entitled to vote at the Annual Meeting (“Record Date”), or any adjournments or postponements thereof, was the close of business on April 2, 2024. | |
| Additional Information | Additional information regarding the matters to be acted on at the Annual Meeting is included in the accompanying proxy statement. | |
| Proxy Voting | PLEASE SUBMIT YOUR PROXY THROUGH THE INTERNET, TELEPHONE, OR MARK, SIGN, DATE AND RETURN YOUR PROXY CARD. | |
| Board Recommendation | ||
| Items of Business | 1. To elect four Class III directors to hold office for a three-year term or until their successors are elected and qualified. | Vote FOR all |
| 2. To ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the year ending December 31, 2024. | Vote FOR | |
| 3. To approve, on an advisory and non-binding basis, the compensation for our named executive officers as disclosed in this Proxy Statement. | Vote FOR | |
| 4. To hold an advisory vote on a stockholder proposal to declassify our Board of Directors and elect each director annually. | No recommendation | |
| 5. To transact such other business as may properly come before the Annual Meeting. | N/A | |
| By Order of the Board of Directors of EPAM Systems, Inc.: | ||
| Edward Rockwell | ||
| Senior Vice President, General Counsel and Corporate Secretary | ||
| Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to Be Held on May 31, 2024. The Proxy Statement and our Annual Report on Form 10-K for the year ended December 31, 2023 are available at https://www.proxyvote.com. | ||
2 | 2024 Proxy Statement
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.