SEC Filings

AECOM filed this Form DEF 14A on 01/23/2019
Entire Document

Table of Contents

What we heard

      Our Response       Our Reasoning

Compensation/Organization Committee Outreach

Compensation Committee members should engage directly with stockholders


The Compensation Committee has engaged directly with stockholders.

      Direct Compensation Committee engagement with stockholders provides further opportunities to align management and stockholders' interests.

Short-Term Incentives (Annual Cash Bonus)

Better align Pay with Performance


The Compensation Committee exercised discretion to reduce the CEO's fiscal year 2018 annual bonus from 131.8% to 100.0% to reflect execution challenges that led to adjusted operating profit below plan and underperformance of the Company's stock price.

      Exercising discretion to reduce the CEO's annual bonus for fiscal year 2018 better aligned pay with performance given the unique set of circumstances that negatively impacted fiscal year 2018 financial performance, including execution challenges in the CS segment.

Operating cash flow metrics continued to earn above 100%


AECOM continues to deliver industry- leading cash flow performance, and performance at target levels has historically and continues to require cash flow conversion above the median of the E&C industry. However, in response to investor feedback, beginning fiscal year 2019, the Compensation Committee increased the target level of the conversion rate to further enhance the rigor of the goal and to reflect recent cash flow outperformance.

      Increasing the conversion target used to determine the cash flow target continues to incentivize and reward cash flow performance that is above the median of peers and ensures management remains focused on delivering industry-leading cash flow.

Long-Term Incentives (Equity Awards)

The equity performance awards vest in three years but certain metrics include three annual performance periods


Revised fiscal year 2019 equity performance awards to replace three, annual performance periods with a single, three-year performance period for all financial metrics.

      Three-year cumulative metrics challenges management to focus on long-term value creation.

The annual cash bonus and equity performance awards contain duplicative metrics


Revised fiscal year 2019 equity performance awards to remove adjusted EPS, thus removing the duplicative metrics in our short and long-term incentive plans.

      We believe that with ROIC and free cash flow in the long-term equity incentive plan and adjusted EPS and operating cash flow in the annual cash bonus plan, management is incentivized to maximize stockholder value.