NOTICE OF 2022 ANNUAL MEETING & PROXY STATEMENT
DIGITAL TRANSFORMS PHYSICAL
NOTICE OF 2022 ANNUAL MEETING OF STOCKHOLDERS
Monday, | 12:30 p.m. | PTC Inc. | |||||
121 Seaport Boulevard | |||||||
January 31, 2022 | Eastern Standard Time | ||||||
Boston, MA 02210 | |||||||
Matters to be Voted on at the Meeting
Proposal 1
Elect eight directors to serve until the 2023 Annual Meeting of Stockholders.
- The Board of Directors recommends a vote FOR All Nominees
Proposal 2
Advisory vote to approve the compensation of our named executive officers (say-on-pay).
- The Board of Directors recommends that you vote FOR the approval of the compensation of our named executive officers as disclosed in COMPENSATION DISCUSSION AND ANALYSIS and the tables and related disclosures contained in EXECUTIVE COMPENSATION.
Proposal 3
Advisory vote to confirm the selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the current fiscal year.
- The Board of Directors recommends that you vote FOR the selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2022.
Other matters that are properly brought before the meeting may also be considered.
Stockholders at the close of business on December 2, 2021 are entitled to vote.
Please vote your shares before the meeting, even if you plan to attend the meeting.
Your broker will not be able to vote your shares on the election of directors or the say-on-pay proposal unless you have given your broker specific instructions to do so.
By Order of the Board of Directors
AARON C. VON STAATS
Secretary
Boston, Massachusetts
December 20, 2021
Important Notice of the Internet Availability of Proxy Materials
The Proxy Statement and our 2021 Annual Report are available to stockholders at www.proxyvote.com.
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Over the past year we again executed well against our strategic initiatives, establishing a solid foundation for the future.
DEAR FELLOW STOCKHOLDERS,
Our Financial and Operating Performance
Our performance in 2021 reflects strong execution. We delivered our fourth consecutive year of double-digit organic ARR (Annual Run Rate) growth, while also delivering operating cash flow growth of 58% and free cash flow growth of 61%.
You can find additional information about our business performance for the year in our Annual Report to Stockholders, which accompanies this proxy statement.
Our Initiatives to Increase Board Diversity
As we've discussed with many of our stockholders, we've been focused on increasing racial and ethnic diversity on the Board of Directors.
As part of our ongoing Board refreshment process, we were running two director searches in 2021, with a focus on adding racial or ethnic diversity to the Board. We required that all candidate pools presented to the Board include at least two candidates that were ethnically or racially diverse, in addition to meeting the other search criteria. We amended our Corporate Governance Guidelines
in 2021 to expressly add racial, ethnic, and LGBTQ+ diversity as an important consideration when evaluating director candidates. Later in 2021, in response to stockholder feedback, we also amended our Nominating Committee Charter to expressly add those same aspects of diversity as an important consideration in the selection of director candidates, and to expressly commit to using the "Rooney Rule" in candidate searches - which approach we had informally been using as part of all our recent searches. Through these measures, we hope to be able to add a director with racial or ethnic diversity in the next year.
Our ESG Initiatives
As we've also discussed with many of our stockholders, we've been focusing on advancing our Environmental, Social and Governance initiatives.
+16%
ARR OVER 2020
+58%
CASH FLOW FROM OPERATIONS OVER 2020
+61%
FREE CASH FLOW
OVER 2020
+170%
5-YEAR STOCK PRICE INCREASE
+45%
1-YEAR STOCK PRICE INCREASE
In 2020, we hired our first Chief Diversity and Inclusion Officer to drive our diversity and inclusion initiatives and have implemented initiatives to identify, attract and retain employees that are underrepresented minorities.
In 2021, we retained a consultant to help us develop an appropriate process to collect and track relevant information for our community engagement and environmental programs that will enable us to develop appropriate goals and track progress against those goals that we can share. We also intend to conduct an ESG materiality analysis to enable us to address those items that are most material to us and our stakeholders.
We describe these initiatives measures further in Corporate Sustainability and Responsibility below.
Looking to the Future
Given our execution in 2021 and the steps we are taking to increase diversity on the Board and in the company and to advance our ESG initiatives, we believe the company is well-positioned for the future.
We thank you for your continued support of PTC. Sincerely,
ROBERT SCHECHTER
Chairman of the Board
PTC Inc. - 2022 Proxy Statement | 3 |
2021 STOCKHOLDER ENGAGEMENT
Fall 2021 Engagement | Primary Topics Discussed | ||||
Investors Contacted | Discussions Held | ||||
Executive | Board | ||||
37 | 15 | Compensation | Diversity | ||
Investors | Investors | ||||
64.8% | 28.8% | Board | ESG | ||
Oversight of ESG | Initiatives | ||||
Outstanding Shares | Outstanding Shares | ||||
We engaged with stockholders in Fall 2021. The conversations included corporate governance matters, including our executive compensation program. Robert Schechter, Chairman of the Board, Mark Benjamin, Chair of the Compensation Committee, and Janice Chaffin, Chair of the Corporate Governance, Cybersecurity and Nominating Committees, participated in a number of these discussions. Other participants from the company included our Investor Relations representatives, our General Counsel, our Corporate & Securities Counsel, and a senior member of our Compensation group.
For our engagement, we targeted all investors holding at least 0.75% of our outstanding stock, and additional investors in our Top 50 investors that we knew had voted against our 2021 Say-on-Pay proposal.
What We Heard | How We Are Responding |
Board Diversity
Stockholders would like to see ethnic and/or racial diversity on the Board.
The Board values diversity and believes that diversity among the directors as to personal and professional experiences, opinions, perspectives, and backgrounds, including diversity with respect to race, ethnicity, gender, age, cultural backgrounds, sexual identity and gender orientation is desirable.
In 2021, in order to support and evidence its conviction that racial and ethnic diversity on the Board is important, the Board:
- Amended our Corporate Governance Guidelines to add racial, ethnic and LGBTQ+ diversity as specific types of diversity to be considered when evaluating potential director candidates.
- Amended the Nominating Committee Charter to make the same change.
- Amended the Nominating Committee Charter to require that all pools of director candidates include at least two candidates that are racially, ethnically or LGBTQ+ diverse - formalizing what has been the Board's informal practice for a number of years.
The Board had two director searches open in 2021 and actively sought diverse candidates by requiring that all pools of potential candidates include at least two diverse candidates and opening the aperture to identify candidates that might not otherwise be identified. In December 2021, we appointed Ms. Michal Katz to the Board effective as of February 8, 2022. We hope to add a racially or ethnically diverse director to the Board within the next year as a result of the open director search.
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2021 Stockholder Engagement
ESG Oversight and Initiatives
Stockholders would like more visibility into our Board's oversight of our management of our ESG risks and opportunities.
In this Proxy Statement, we've provided additional information in Board Risk Oversight below as to how the Board oversees our management of our ESG risks and opportunities.
Stockholders would like more visibility into our ESG initiatives and goals.
We expect to publish our third Corporate Sustainability Report in late December 2021 that will describe our corporate sustainability initiatives and provide visibility into our human capital management and other social initiatives and programs and our environmental opportunities. In connection with that report, we plan to provide a matrix of our initiatives and programs as aligned with the SASB framework.
As we discussed with stockholders, our ability to measure and track our environmental impact, and to set appropriate goals, is at an earlier stage than our social and governance initiatives and programs. We have retained a consultant to assist with our environmental initiatives. We expect to complete the initial assessment and program development in 2022.
Executive Compensation
Stockholders expressed a number of views with respect to executive compensation.
Our Executive Compensation conversations and responses are discussed in Compensation Discussion and Analysis below.
PTC Inc. - 2022 Proxy Statement | 5 |
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PTC Inc. published this content on 16 December 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 January 2022 13:38:08 UTC.