Fiserv: 67% Increase in CEO pay

Annual Meeting 5/18/2022

Total compensation for Fiserv President and CEO Frank Bisignano, CEO since July 2020, increased by 67 percent in 2021. The amount of Bisignano’s salary, stock awards, and annual cash bonus each increased  as his total package went from $12,193,925 to $20,385,208.

Last year 37.5 percent of shareholders voted against the advisory vote on pay. This was in part because of former CEO and executive chairman Yabuki's transition agreement. In particular, he received a grant of $11.2 million of Restricted Stock Units on his last day of employment and his unvested performance shares were modified to remove pro-rata vesting.  The company notes that it was disappointed in with the advisory vote result and touts its engagement and the changes it adopted. However, on this particular issue the company response can be summed up as, “Sorry, won’t do it again.”

One dissatisfied shareholder filed a resolution “request[ing] that the Board seek shareholder approval of any senior manager’s new or renewed pay package that provides for severance or termination payments with an estimated value exceeding 2.99 times the sum of the executive’s base salary plus target short-term bonus.” This proposal has been filed at a number of other companies this year and has already received majority support at several.

Another major concern raised by shareholders was, as noted in a ‘what we heard’ column in the proxy statement, “A meaningful component of equity should rest on achievement of awards.”  The first line of the company’s “How we responded” was “All of our executive officers received 50% of their annual equity awards in the form of performance share units in 2022.” That struck me as quite unusual as performance shares are generally long term rather than annual awards. It made more sense as I continued to read. Half of the CEO’s equity awards remain restricted stock units rather than performance share units. The company increased the performance based equity level to 50 percent for some executives, but it was unchanged for the CEOs. I expect the addition of performance shares to annual awards is designed to help tip the balance for guideline votes. Many shareholders routinely vote against awards that do not include a majority of performance shares. The addition of performance based equity may be a duplicitous attempt to get around those guidelines.