2022 Proxy Statement and No ce of Annual Mee ng
LETTER FROM THE CHAIRMAN OF THE BOARD
Dear Fellow Stockholders,
On behalf of ADT's Board of Directors, I look forward to welcoming you to our 2022 annual meeting.
Over the last several years, ADT has undergone a significant transformation as it creates safe, smart and sustainable solutions centered around the security and smart home ecosystem. Working closely with management, the Board continued to exercise its role in overseeing execution and refinement of the company's strategy. In nearly every Board meeting, we discuss the company's long-term strategy and progress against strategic objectives, allowing us to debate assumptions and offer additional perspectives.
Our foundation of good governance practices has served us well and will continue to do so into the future. The combination of the depth of leadership experience among Board members and specific expertise in innovation, technology, consumer brand management, finance and M&A has been crucial to our collective oversight of the management team.
We continue to evaluate our own performance and composition regularly, remaining mindful of the need for the Board to possess a wide range of skills, qualifications, experiences and backgrounds. Across these aspects and others, we look to enhance diversity in the boardroom and we were pleased to welcome Sigal Zarmi, an expert in technology and innovation, to the Board as an independent director in 2021, and Benjamin Honig, a representative of Temasek, in 2022. We will also have two members departing our Board. On behalf of my fellow directors, the Company and ADT stockholders, I'd like to thank Andrew Africk and David Ryan for their service and contributions over the past several years.
As we look forward to 2022, the Board welcomes your engagement. We encourage you to share suggestions and concerns with us. In particular, we encourage you to review this proxy statement and vote in the upcoming meeting.
As always, we deeply appreciate your support of this iconic company.
Sincerely,
Marc Becker
LETTER FROM THE PRESIDENT AND
CHIEF EXECUTIVE OFFICER
Dear Fellow Stockholders,
It's an extraordinary time for all of us at ADT. Our work over the past several years has transformed and reshaped our Company, while creating a diversified, scaled business. We're now well positioned to accelerate our growth and transition into a new chapter.
During much of ADT's 147 year history, we were focused solely on personal home security. But as today's consumers continue to expand their definition of safety - ADT is changing with them. Accordingly, our mission has evolved beyond the traditional definition of security to a mission of Safe, Smart, and Sustainable.
Safe: We protect what matters most
Smart: We deliver customer-focused products, technologies, and services Sustainable: We make life better for the customers and communities we serve
As we look to 2022 and beyond, our top objective is to delight and protect our customers through our offerings in smart home and residential security, commercial security, and residential solar. We remain obsessively focused on customer satisfaction to drive strong brand loyalty and increased customer retention. To do this, we will leverage our strategic differentiators - our innovative offerings, unrivaled safety, and premium customer experience - to drive growth in the business. Our growth will be augmented by benefits from our transformational Google partnership, the rebound in our Commercial segment performance, and our entry into the fast-growing residential solar business with our acquisition of Sunpro Solar, now rebranded as ADT Solar. By empowering customers to protect and connect what matters most, we can inspire them to choose ADT and stay with ADT which we believe will drive long-term stockholder value.
We also know that adopting strong Environmental, Social and Governance ("ESG") practices is good for our business and a reflection on our trusted brand. Our mission delivers superior results for all stakeholders - our stockholders, our employees and the customers and communities we serve. We're committed to living our values and integrating ESG into our business operations. And while we're still early in this journey, we're committed to transparent communication of our progress.
We're excited for our future. We have a refreshed mission, a clear strategy and growth plan, and the best team in the industry to execute on it. Our goal is to be for our investors as we are for our customers - safe, smart, and sustainable.
Sincerely,
Jim DeVries
CONTENTS
Table of Contents
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
PROPOSAL 1 - ELECTION OF DIRECTORS
DIRECTOR SKILLS AND EXPERIENCE
1 2 3
ClassIIDirectors ................................. 4
ClassIIIDirectors ................................. 5
ClassIDirectors .................................. 7
CORPORATE GOVERNANCE 9
ControlledCompany .............................. 9
DirectorIndependence ............................ 9 Board of Directors Leadership Structure and Board's Role
inRiskOversight ................................. 10
Board of Directors Meetings and Committees . . . . . . . . . . 10
AuditCommittee ................................. 11
ExecutiveCommittee ............................. 12
CompensationCommittee ......................... 13
Nominating and Corporate Governance Committee . . . . . 13 Compensation Committee Interlocks and Insider
Participation .................................... 14 Identifying and Evaluating Candidates for the Board of
Directors ....................................... 14
Corporate Governance Guidelines . . . . . . . . . . . . . . . . . . . 15
Environmental, Social and Governance Initiatives . . . . . . . 16
Executive Sessions of Non-Management Directors . . . . . . 16 Apollo Approval of Certain Matters and Rights to
NominateCertainDirectors ........................ 16
CompensationRiskAssessment ..................... 16
Communications with the Board of Directors . . . . . . . . . . 17
Director Attendance at Annual Meeting . . . . . . . . . . . . . . 17
EXECUTIVE OFFICERS 18
EXECUTIVE COMPENSATION - COMPENSATION
DISCUSSION AND ANALYSIS 21
2021Highlights .................................. 22
Chief Executive Officer - Performance Goals . . . . . . . . . . . 22
Executive Compensation Philosophy . . . . . . . . . . . . . . . . . 23 Process for Determining Executive Officer Compensation
(IncludingNEOs) ................................. 24 Role of Compensation Committee and Board of
Directors ....................................... 24
RoleofManagement ............................. 24
Role of Independent Compensation Consultant . . . . . . . . 25
RoleofExternalMarketData ....................... 25
PeerGroupDevelopment .......................... 25
2021 Advisory Vote on Executive Compensation . . . . . . . . 26
Elements of Executive Compensation . . . . . . . . . . . . . . . . 26
Other Elements of Compensation . . . . . . . . . . . . . . . . . . . 27
BaseSalary ..................................... 28
Annual Incentive Compensation . . . . . . . . . . . . . . . . . . . . . 28
Non-GAAP Measures - Adjusted EBITDA . . . . . . . . . . . . . . 29
Long-Term Equity Compensation . . . . . . . . . . . . . . . . . . . . 30
2021 Long-Term Incentive Plan Equity Awards . . . . . . . . . 30
EmploymentArrangements ........................ 31
Supplemental Savings and Retirement Plan . . . . . . . . . . . . 31
Executive Benefits and Limited Perquisites . . . . . . . . . . . . 31
SeveranceBenefits ............................... 32
Other Compensation Policies and Practices . . . . . . . . . . . . 32 Insider Trading Policy and Equity Transaction
Pre-Approval .................................... 32
Anti-Hedging and Short Sale Policy . . . . . . . . . . . . . . . . . . . 32 Anti-Pledging/Purchases of Company Securities on
Margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
EquityGrantPractices ............................. 33
Pay Recoupment (Clawback) Policy . . . . . . . . . . . . . . . . . . 33
StockOwnershipGuidelines ........................ 33
Tax and Accounting Considerations . . . . . . . . . . . . . . . . . . 33
REPORT OF THE COMPENSATION COMMITTEE 34
SummaryCompensationTable ...................... 35 Summary Compensation Table-All Other
Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Grants of Plan-Based Awards in Fiscal 2021 Table . . . . . . . 37
EmploymentArrangements ........................ 37
Distributed Shares and Top-Up Options . . . . . . . . . . . . . . . 40 Outstanding Equity Awards at Fiscal 2021 Year-End
Table .......................................... 41
StockVestedinFiscal2021Table .................... 43
Non-Qualified Deferred Compensation for Fiscal 2021 . . . 43 Potential Payments upon Termination or Change in
Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 Severance Payments and Benefits under Employment
ArrangementswithNEOs .......................... 44
ApplicableDefinitions ............................. 46 Equity Awards-Treatment upon Termination (Not in
Connection with a Change in Control) . . . . . . . . . . . . . . . . 47 Equity Awards-Treatment upon a Change in Control or a
Termination in Connection with a Change in Control . . . . 47
PAY RATIO DISCLOSURE 50
COMPENSATION OF NON-EMPLOYEE DIRECTORS 50
CERTAIN RELATIONSHIPS AND RELATED PERSON
TRANSACTIONS 52
Policies and Procedures for Related Person
Transactions .................................... 52
Limited Partnership Agreement of Prime TopCo LP . . . . . . 52
Apollo ......................................... 53
SunproSolar .................................... 53
Google . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Rackspace ...................................... 54
OtherTransactions ............................... 54
StockholdersAgreement .......................... 55
RegistrationRightsAgreement ...................... 55
Management Investor Rights Agreement . . . . . . . . . . . . . 56
REPORT OF THE AUDIT COMMITTEE 57
AUDIT-RELATED FEES, TAX FEES AND ALL OTHER
FEES 58
2022 PROXY STATEMENT
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ADT Inc. published this content on 13 April 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 April 2022 18:05:04 UTC.