DEF 14A

DEF 14A 1 d191574ddef14a.htm DEF 14A DEF 14A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

SCHEDULE 14A

(Rule 14a-101)

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934 (Amendment No. )

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FAIR ISAAC CORPORATION

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

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LOGO

FAIR ISAAC CORPORATION

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD MARCH 1, 2022

AND PROXY STATEMENT

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

Please take notice that the 2022 Annual Meeting of the Stockholders of Fair Isaac Corporation (“Annual Meeting”) will be held at the time and place and for the purposes indicated below.

TIME

9:30 A.M., local time, on Tuesday, March 1, 2022

PLACE*

Fair Isaac Corporation

181 Metro Drive

San Jose, California 95110

ITEMS OF BUSINESS

To elect eight directors to serve until the 2023 Annual Meeting and thereafter until their successors are elected and qualified;

To approve the advisory (non-binding) resolution relating to the named executive officer compensation as disclosed in the accompanying proxy statement;

To ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending September 30, 2022; and

To transact such other business as may properly come before the meeting or any adjournment thereof.

All of the above matters are more fully described in the accompanying proxy statement.

RECORD DATE

You can vote if you were a stockholder of record at the close of business on January 4, 2022. A complete list of stockholders entitled to vote at the Annual Meeting shall be open to the examination of any stockholder, for any purpose germane to the Annual Meeting, during ordinary business hours for at least ten days prior to the Annual Meeting at our offices at 5 West Mendenhall, Suite 105, Bozeman, Montana 59715. If you would like to view the stockholder list, please contact our Corporate Secretary to schedule an appointment.

ANNUAL REPORT

Our 2021 Annual Report on Form 10-K accompanies the proxy statement.

VOTING

Your Vote Is Important. We invite all stockholders to attend the meeting in person. However, to assure your representation at the meeting, you are urged to mark, sign, date and return the enclosed proxy card as promptly as possible in the postage-prepaid envelope enclosed for that purpose or follow the Internet or telephone voting instructions on the proxy card. Any registered stockholder attending the meeting may vote in person even if he or she returned a proxy card.

ADMITTANCE TO MEETING

Admittance to the Annual Meeting will be limited to stockholders. If you are a stockholder of record and plan to attend, please detach the admission ticket from your proxy card and bring it with you to the Annual Meeting. Stockholders who arrive at the Annual Meeting without an admission ticket will be required to present identification matching the corresponding stockholder account name at the registration table located outside the meeting room. If you are a stockholder whose shares are held by a bank, broker or other nominee, you will be asked to certify to such ownership at the registration table prior to the Annual Meeting.

LOGO

Mark R. Scadina

Executive Vice President, General Counsel and Secretary

January 25, 2022

* We intend to hold the Annual Meeting in person. However, we are actively monitoring the COVID-19 pandemic and are sensitive to public health concerns and the quarantine or shelter-in-place protocols and related restrictions that may be imposed. In the event it is not possible or advisable to hold our Annual Meeting in person, we will announce alternative arrangements for the meeting as promptly as practicable, which may include holding the meeting solely by means of remote communication. These announcements will be made by press release that will also be filed as additional proxy materials, as applicable, with the U.S. Securities and Exchange Commission. Please check the “Investors” page of our website at www.fico.com prior to the meeting date.

Table of Contents


PROXY SUMMARY			1
2022 Annual Meeting of Stockholders			1
Voting Methods			1
Voting Matters			2
Our Director Nominees			2
Our Corporate Governance Facts			3
Our Compensation Facts			4
2021 Elements of Compensation			5

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT			6

PROPOSAL 1: ELECTION OF DIRECTORS			8
Annual Elections			8
Majority Voting Standard			8
Director Nominee Selection Process			8
Stockholder-Recommended Director Candidates			8
Director Nominee Biographies			9

PROPOSAL 2: ADVISORY VOTE ON EXECUTIVE OFFICER COMPENSATION			13

PROPOSAL 3: RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			14
Audit and Non-Audit Fees			14
Policy on Audit Committee Preapproval of Audit and Non-Audit Services of Independent Auditors			14

REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS			16

CERTAIN RELATIONSHIPS AND RELATED PERSONS TRANSACTIONS			17

CORPORATE GOVERNANCE			18
Board Leadership Structure			18
Board Risk Oversight Role			18
Attendance at Board Meetings			18
Annual Board Self-Evaluations			18
Board Committees			18
Environmental, Social and Governance (“ESG”) Matters			21

DIRECTOR COMPENSATION PROGRAMS			25
Non-Employee Director Compensation			25
Director Stock Ownership Guidelines			26
Director and Officer Liability Insurance Policies			26

DIRECTOR COMPENSATION FOR FISCAL 2021			27

EXECUTIVE COMPENSATION			29
Compensation Discussion and Analysis			29
Leadership Development and Compensation Committee Report			44
Leadership Development and Compensation Committee Interlocks and Insider Participation			44
Compensation Policies and Practices in Relation to Risk Management			44
Summary Compensation Table			46
Grants of Plan-Based Awards for Fiscal 2021			48
Letter Agreements			49
Outstanding Equity Awards at Fiscal 2021 Year End			51
Fiscal 2021 Option Exercises and Stock Vested			52
Non-Qualified Deferred Compensation for Fiscal 2021			52
Potential Payments Upon Termination or Change in Control			54
Executive Officer Management Agreements			54


Severance Arrangements			55
Equity Awards			55
Insurance Benefits			55
Estimated Payments That Would Have Been Made to the Named Executive Officers			55
Equity Compensation Plan Information			61
CEO Pay Ratio			62

HELPFUL INFORMATION AND ONLINE RESOURCES			63

OTHER INFORMATION			66

PROXY SUMMARY

This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information that you should consider, and you are advised to read the entire proxy statement carefully before voting.

2022 Annual Meeting of Stockholders



Date and Time:		9:30 A.M., local time, on Tuesday, March 1, 2022

Place:		Fair Isaac Corporation’s offices located at 181 Metro Drive, San Jose, California 95110

Record Date:		January 4, 2022

Voting Methods


By internet www.proxyvote.com		Use the internet to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the meeting date. The availability of internet voting for beneficial owners will depend on the voting processes of your broker, bank or nominee. We recommend that you follow the voting instructions in the materials you receive.

By telephone 1-800-690-6903		Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the meeting date. The availability of telephone voting for beneficial owners will depend on the voting processes of your broker, bank or nominee. We recommend that you follow the voting instructions in the materials you receive.

By mail		Be sure to complete, sign and date the proxy card and return it in the prepaid envelope. If you are a stockholder of record and you return your signed proxy card without indicating your voting preferences, the persons named in the proxy card will vote FOR the election of directors, FOR the approval of the advisory (non-binding) resolution relating to the named executive officer compensation as disclosed in this proxy statement, and FOR the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for fiscal 2022.

In person at the Annual Meeting		All stockholders may vote in person at the Annual Meeting. If you are a beneficial owner of shares, you must obtain a legal proxy from your broker, bank or nominee and present it to the inspector of election with your ballot when you vote at the meeting.

Voting Matters

Stockholders are being asked to vote on the following matters at the 2022 Annual Meeting of Stockholders. Please see the corresponding page numbers for additional information regarding each proposal.


Proposals		Vote Required		Board Recommendation	Page Number for Additional Information

1.	Election of Directors		Majority	FOR	8

2.	Advisory Vote to Approve Executive Compensation		Majority	FOR	13

3.	Ratification of Independent Registered Public Accounting Firm		Majority	FOR	14

Our Director Nominees


Name	Age		Years as Director	Principal Occupation	Independent	Committee Memberships			Other Current Public Boards
						AC⁽¹⁾	GNEC⁽²⁾	LDCC⁽³⁾

Braden R. Kelly		51	9	Partner of Health Evolution Partners	Yes				—

Fabiola R. Arredondo		55	2	Managing Partner of Siempre Holdings LLC	Yes				2

James D. Kirsner		78	15	Former Chief Financial Officer and head of Barra Ventures at Barra, Inc.	Yes				—

William J. Lansing		63	16	Chief Executive Officer of Fair Isaac Corporation	No				—

Eva Manolis		58	3	Former Vice President of Amazon.com, Inc.	Yes				1

Marc F. McMorris		53	6	Co-Chief Executive Officer and Co-Founder of Carrick Capital Partners, LLC	Yes				—

Joanna Rees		60	7	Managing Partner of West.Ventures	Yes				—

David A. Rey		71	11	Former Executive Vice President and Chief Client Relationship Officer of UnitedHealth Group	Yes				—

⁽¹⁾	AC = Audit Committee

⁽²⁾	GNEC = Governance, Nominating and Executive Committee

⁽³⁾	LDCC = Leadership Development and Compensation Committee

LOGO = Member LOGO = Chair

Our Corporate Governance Facts


*Board and Committee Summary*
Current Size of Board			8
Current Number of Independent Directors			7
Board Committees Consist Entirely of Independent Directors			Yes
All Directors Attended at least 75% of Meetings Held			Yes
Annual Election of All Directors			Yes
Majority Voting for Directors			Yes
Plurality Carveout for Contested Elections			Yes
Director Resignation Policy			Yes
Separate Chairman and CEO			Yes
Chairman is Independent Director			Yes
Independent Directors Meet Regularly in Executive Session			Yes
Annual Board and Committee Self-Evaluations			Yes
Risk Oversight by Full Board and Committees			Yes
Annual Advisory Vote on Executive Compensation			Yes
Prohibit Hedging and Short Sales of FICO Securities			Yes
Stock Ownership Requirements for Directors and Executive Officers			Yes
Executive Compensation Recovery Policy			Yes

*Stockholder Rights Summary*
Controlled Company			No
Classified Board			No
Vote Standard for Mergers/Acquisitions			Majority
Vote Standard for Charter or Bylaw Amendment			66.67%
Stockholder Ability to Call Special Meetings			No
Stockholder Ability to Act by Written Consent			Yes
Cumulative Voting			No
Board Ability to Issue Blank-Check Preferred Stock			Yes
Poison Pill			No

Our Compensation Facts

As administered by our Leadership Development and Compensation Committee (the “LDCC”), our compensation program seeks to closely link the financial interests of our Company’s executives with those of our stockholders. In making compensation decisions at the outset of fiscal 2021 and throughout the year, the LDCC sought to reinforce the linkage between Company performance and executive compensation. In keeping with this objective, base salaries for incumbent executive officers in fiscal 2021 remained flat as part of the continued focus on prominently featuring performance-based cash incentives and equity.

The LDCC uses the following guidelines in our compensation program to help achieve this overarching goal.


		What We Do:				What We Do Not Do:
		We closely link performance-based rewards with the achievement of performance goals.				Our compensation plans do not have minimum guaranteed payout levels.

		We cap payouts under our plans to discourage excessive or inappropriate risk taking by our executives.				We do not permit hedging or short sales of our stock.

		Two-thirds of our long-term incentives are performance-based.				We do not permit repricing of underwater stock options without stockholder approval.

		We emphasize long-term incentives to align executives’ interests with those of our stockholders.				We do not provide tax gross-ups for our executives (other than with respect to relocation benefits and required spousal travel).

		We have double-trigger change in control provisions.				We do not provide material perquisites.
		We have stock ownership guidelines that require non-employee directors and executive officers to own a specified amount of stock within five years of their initial election or appointment.

		We have a peer group comprised of companies of similar size and from relevant industries.

		The LDCC retains an independent compensation consultant.
		We hold an annual advisory vote on executive compensation.
		We seek feedback on executive compensation through stockholder engagement.

		We have a robust compensation recovery, or “clawback,” policy pertaining to both cash and equity incentive-based compensation.

		We have a mandatory minimum vesting period of one year for equity awards.

		We limit the aggregate fair value of equity awards granted in any calendar year.

		We cap payouts under our severance policies.

2021 Elements of Compensation


Element		Purpose and Philosophy

Base Salary		• Base salary provides executive officers with financial stability and predictable cash flow. • Individual base salaries are determined by evaluating the executive officer’s role within the Company, experience, performance, and potential for development, as well as the base salaries of comparable roles within the peer group companies and the broader marketplace.

Short-Term Cash Incentives		• This element rewards the achievement of annual Company and individual performance goals. • Cash incentives are expressed as a target percentage of base salary determined with reference to the peer group companies and the broader marketplace. • Participant may earn between zero and 250% of target, depending both upon Company and individual performance.

Long-Term Equity Incentives		• Long-term equity incentives directly link a significant portion of total executive officer compensation to the market value of our common stock, while promoting retention through multi-year vesting and performance periods. • Performance Share Units (“PSUs”) are earned based upon the extent to which annual Company financial targets are achieved with as few as zero and as many as 200% of target PSUs eligible to be earned. Earned units are then subject to multi-year vesting, promoting continued linkage to the market price of our common stock while also promoting retention. • Market Share Units (“MSUs”) are earned based on relative total stockholder return over one-year, two-year and three-year performance periods with as few as zero and as many as 200% of target MSUs eligible to be earned. • Restricted Stock Units (“RSUs”) represent a more stable equity-based compensation vehicle, ensuring linkage to the stock price performance of our common stock while promoting retention over a multi-year vesting period.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Except as otherwise indicated, the following table and accompanying footnotes show information regarding the beneficial ownership of our common stock as of December 1, 2021 by:

•

each person who is known by us to own beneficially more than 5% of our common stock;

•

each current director and nominee for director;

•

each named executive officer; and

•

all directors and executive officers as a group.

As of the dates indicated in footnotes (3) and (4) below, publicly available information indicated that certain stockholders were beneficial owners of more than 5% of the outstanding shares of our common stock. The information in the table below is as reported in their filings with the U.S. Securities and Exchange Commission (“SEC”). The percentages noted in the table are as provided by such beneficial owners as of the date of their filing and not as of December 1, 2021. Based on a review of such SEC filings, we are not aware of any other beneficial owner of more than five percent of our common stock.

Shares of common stock underlying options that are currently exercisable or exercisable within 60 days are considered outstanding and beneficially owned by the person holding the options for the purposes of computing the percentage ownership of that person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person. Similarly, shares of common stock underlying RSUs, PSUs or MSUs that vest within 60 days are considered outstanding and beneficially owned by the person holding the RSUs, PSUs or MSUs for the purposes of computing the percentage ownership of that person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person. As of December 1, 2021, 27,099,700 shares of common stock were outstanding.


Directors, Nominees, Named Executive Officers, Executive Officers and 5% Stockholders	Beneficial Ownership⁽¹⁾
	Number		Percent⁽²⁾
BlackRock, Inc.⁽³⁾		4,511,974		15.5	%
55 East 52nd Street, New York, NY 10055
Vanguard Group, Inc.⁽⁴⁾		2,888,416		10.04	%
100 Vanguard Blvd., Malvern, PA 19355
William Lansing⁽⁵⁾		375,180		1.38	%
James Wehmann⁽⁶⁾		53,433		*
Braden R. Kelly⁽⁷⁾		47,920		*
Joanna Rees⁽⁸⁾		38,904		*
James D. Kirsner⁽⁹⁾		26,264		*
Claus Moldt⁽¹⁰⁾		18,819		*
Marc F. McMorris⁽¹¹⁾		17,429		*
David Rey⁽¹²⁾		17,251		*
Eva Manolis⁽¹³⁾		11,187		*
Michael McLaughlin⁽¹⁴⁾		8,550		*
Stephanie Covert⁽¹⁵⁾		5,488		*
Fabiola R. Arredondo⁽¹⁶⁾		1,395		*
All directors, nominees and executive officers as a group (16 persons)⁽¹⁷⁾		834,654		3.05	%

*	Represents holdings of less than 1%.

⁽¹⁾	To the Company’s knowledge, the persons named in the table have sole voting and sole dispositive power with respect to all shares shown as beneficially owned by them, subject to community property laws where applicable and the information contained in the footnotes to this table.

⁽²⁾

If the named person holds stock options exercisable on or prior to January 30, 2022, RSUs, PSUs or MSUs that will vest on or prior to January 30, 2022, the shares underlying those options, RSUs, PSUs and MSUs are included in the number for such person. Shares deemed issued to a holder of stock options, RSUs, PSUs or MSUs pursuant to the preceding sentence are not deemed issued and outstanding for purposes of the percentage calculation with respect to any other stockholder.

⁽³⁾	Information as to this person (including affiliated entities) is based on the Schedule 13G/A filed by this person on January 25, 2021. BlackRock, Inc. has sole voting power as to 4,167,195 shares and sole dispositive power as to 4,511,974 shares.

⁽⁴⁾	Information as to this person is based on the Schedule 13G/A filed by this person on June 10, 2021. The Vanguard Group has sole voting power as to no shares, shared voting power as to 31,334 shares, sole dispositive power as to 2,818,027 shares and shared dispositive power as to 70,389 shares.

⁽⁵⁾	Includes options to purchase 45,464 shares, RSUs representing 9,503 shares, PSUs representing 24,428 shares and MSUs representing 8,702 shares. The Lansing Revocable Trust holds 192,193 shares.

⁽⁶⁾	Includes RSUs representing 4,594 shares, PSUs representing 8,591 shares and MSUs representing 2,843 shares.

⁽⁷⁾	Includes options to purchase 38,862 shares.

⁽⁸⁾	Includes options to purchase 31,024 shares. The John Hamm and Joanna Rees Trust holds 4,000 shares.

⁽⁹⁾	Includes options to purchase 715 shares. The Kirsner Family Trust holds 25,549 shares.

⁽¹⁰⁾	Includes RSUs representing 4,868 shares and PSUs representing 5,058 shares.

⁽¹¹⁾	Includes options to purchase 17,429 shares.

⁽¹²⁾	Includes options to purchase 16,696 shares.

⁽¹³⁾	Includes options to purchase 11,187 shares.

⁽¹⁴⁾	Includes RSUs representing 973 shares and PSUs representing 2,592 shares.

⁽¹⁵⁾	Includes RSUs representing 2,653 shares and PSUs representing 1,942 shares.

⁽¹⁶⁾	Includes options to purchase 1,025 shares.

⁽¹⁷⁾

Reflects the options, RSUs, PSUs, MSUs and shares held in trust referenced in footnotes 5 through 16 above, plus additional options to purchase 11,003 shares, RSUs representing 8,404 shares, PSUs representing 15,286 shares and MSUs representing 4,738 shares held by executive officers not individually listed in this table.

PROPOSAL 1: ELECTION OF DIRECTORS

Annual Elections

Directors are elected each year at our Annual Meeting of Stockholders to hold office until our next annual meeting or until a qualified replacement is duly elected. Our Bylaws specify that the Board of Directors (the “Board” or “Board of Directors”) will establish by vote how many directors will serve on the Board. The Board has currently set the number of directors at eight.

Majority Voting Standard

To be elected, the number of votes cast “FOR” a director nominee must exceed the number of votes cast “AGAINST” that nominee. The Company requires that all nominees submit an irrevocable letter of resignation as a condition to being named as a nominee, which resignation will be effective if (i) the nominee fails to receive a sufficient number of votes to be elected and (ii) the Board accepts such resignation. Cumulative voting for the election of directors is not permitted.

Director Nominee Selection Process

Our Governance, Nominating and Executive Committee selects nominees on the basis of recognized achievements and their ability to bring various skills and experience to the deliberations of the Board, as described in more detail in the Corporate Governance Guidelines available on the “Investors” page of our website at www.fico.com. The Governance, Nominating and Executive Committee also strongly values diversity and seeks opportunities to promote diversity within the Company’s leadership. This viewpoint is reflected in our Corporate Governance Guidelines and our Governance, Nominating and Executive Committee Charter, both of which include diversity as a consideration, and the Governance, Nominating and Executive Committee takes this into account when assessing our incumbents and candidates. Our Board currently includes three female directors and two racially/ethnically diverse directors.

All of the current nominees to the Board were recommended as nominees by the Governance, Nominating and Executive Committee, and the full Board voted unanimously to designate them as nominees for election at the Annual Meeting. All of the nominees are presently serving on our Board, and all have been previously elected by our stockholders.

Stockholder-Recommended Director Candidates

Our Governance, Nominating and Executive Committee considers director candidates recommended by stockholders who are entitled to vote for the election of directors at the Annual Meeting and comply with the notice procedures described below. A stockholder who wishes to nominate a candidate must send a written notice to the FICO Corporate Secretary, 5 West Mendenhall, Suite 105, Bozeman, Montana 59715. Each notice must include the following information about the nominee:

•

Name, age, and business and residence addresses;

•

Principal occupation or employment;

•

Class, series and number of shares of FICO beneficially owned, and additional detailed “ownership information” regarding derivatives, voting arrangements, dividend interests, and related matters (as described in detail in our Bylaws);

•

A statement of the person’s citizenship; and

•

Any other information that must be disclosed about nominees in proxy solicitations pursuant to Section 14 of the Exchange Act, and the rules and regulations promulgated thereunder (including the nominee’s written consent to be named as a nominee and to serve as a director if elected).

Each notice must also include the following information about the nominating stockholder and any beneficial owner on whose behalf the nomination is made:

•

The name and address, as they appear in our records;

•

The class, series and number of shares of FICO beneficially owned, and additional detailed “ownership information” regarding derivatives, voting arrangements, dividend interests, and related matters (as described in detail in our Bylaws);

•

A description of all agreements pursuant to which the nomination is being made, and any material interest of such stockholder or beneficial owner, or any affiliates or associates of such person, in such nomination;

•

A representation that the stockholder giving notice intends to appear in person or by proxy at the Annual Meeting to nominate the persons named in its notice;

•

A representation whether the stockholder or the beneficial owner intends, or is part of a group that intends, to deliver a proxy statement or form of proxy to holders of at least the percentage of FICO’s outstanding shares required to elect the nominee or otherwise solicit proxies from stockholders in support of the nomination; and

•

Any other information relating to the person that is required to be disclosed in solicitations for proxies for election of directors pursuant to Section 14 of the Exchange Act, and the rules and regulations promulgated thereunder.

We may require any proposed nominee to furnish such other information as may reasonably be required by us to determine the eligibility of the proposed nominee to serve as a director.

Our Corporate Secretary must receive this information not less than 90 days nor more than 120 days prior to the anniversary date of the immediately preceding Annual Meeting. In the case of an Annual Meeting which is held more than 25 days before or after such anniversary date, in order for notice by the stockholder to be considered timely, it must be received no later than the close of business on the 10th day following the date of the first public announcement of the date of the Annual Meeting.

Director Nominee Biographies

Set forth below is biographical information for each director nominee, as well as information regarding the particular experience, qualifications, attributes or skills of the nominees that led the Governance, Nominating and Executive Committee to conclude that they should serve as members of the Board. Each of these nominees is currently serving as a member of the Board.

Our Board of Directors has determined that Messrs. Kelly, Kirsner, McMorris and Rey and Mses. Arredondo, Manolis and Rees meet its independence standards, which are set forth in the Corporate Governance Guidelines on the “Investors” page of our website at www.fico.com. The Board defines an independent director as one who has no material relationship with the Company and its subsidiaries either directly or as a partner, stockholder or officer of an organization that has a relationship with the Company. In addition, independent directors must meet the requirements to be considered independent directors as defined under the current rules of the New York Stock Exchange (“NYSE”). Mr. Lansing is not independent, as he is employed by us as our CEO.

Each of the nominees has consented to being named in the proxy statement and to serve if elected. If any nominee becomes unavailable to serve, however, the persons named in the enclosed form of proxy intend to vote the shares represented by the proxy for the election of such other person or persons as may be nominated or designated by the Board of Directors, unless either they are directed by the proxy to do otherwise or the Board of Directors instead reduces the number of directors.

Braden R. Kelly. Director since 2013 and Chairman of the Board of Directors since February 2016; Chair of the Governance, Nominating and Executive Committee; Member of the Leadership Development and Compensation Committee; Age 51.

Mr. Kelly has been a Partner at Health Evolution Partners, a private equity investment firm focused on the health care industry, since January 2015 and has served in various positions at Health Evolution Partners, including Investment Partner from June 2013 to December 2014 and Senior Advisor from August 2008 to May 2013. From August 1995 to December 2006, Mr. Kelly was an employee and then Partner and Managing Director at General Atlantic Partners LLC, a global private equity investment firm focused on technology growth investing. Prior to joining General Atlantic Partners, Mr. Kelly worked in the investment banking division of Morgan Stanley & Co. as a member of the mergers, acquisitions and restructuring department. Mr. Kelly does not serve on any other public company boards nor has he served on any other public company boards in the past five years. Mr. Kelly earned an undergraduate degree from the University of Notre Dame.

Mr. Kelly has a deep financial background and contributes a critical business and corporate development perspective to the Board of Directors through his extensive experience with strategic mergers and acquisitions, a key growth opportunity for the Company. Mr. Kelly’s extensive analysis of the technology and health care industries through his work as a private equity investor provides him with valuable insight into the business environments in which our Company and the companies in some of our key markets operate. The Board also benefits from Mr. Kelly’s significant experience as a strategic advisor to companies and his global experience working with growth companies in the United States, Europe and India.

Fabiola R. Arredondo. Director since 2020; Member of the Leadership Development and Compensation Committee, Age 55.

Ms. Arredondo has been the Managing Partner of Siempre Holdings, a private, single family investment office based in Greenwich, Connecticut, since 2001. Ms. Arredondo previously held senior operating roles at Yahoo! Inc., the British Broadcasting Corporation (BBC) and Bertelsmann SE & Co. KGaA. Since March 2017, Ms. Arredondo has served as a director of Campbell Soup Company, where she also serves as a member of the Audit Committee and the Finance and Corporate Development Committee. Since March 2015, Ms. Arredondo has served as a director of Burberry PLC, where she also serves as a member of the Nomination and Remuneration Committees. From January 2007 to January 2016, Ms. Arredondo also served on the board of Experian PLC. Ms. Arredondo received a bachelor’s degree in political science from Stanford University, and an M.B.A. from Harvard Business School.

Ms. Arredondo brings a wealth of domestic and international operational and strategic experience as a former senior executive in the digital technology and media fields to the Board of Directors. She also has extensive public, private and non-profit board experience in a number of relevant areas, including: business model transformations; investment acquisition, integration and disposition skills; and the development of e-commerce distribution networks and effective digital marketing and sales initiatives.

James D. Kirsner. Director since 2007; Chair of the Audit Committee; Member of the Governance, Nominating and Executive Committee; Age 78.

In 2001, Mr. Kirsner served as a consultant and interim Chief Operating Officer at Tukman Capital Management, an equity management firm. From 1993 until 2001, Mr. Kirsner was the Chief Financial Officer and head of Barra Ventures at Barra, Inc., an investment risk management services company. From 1967 until 1993, Mr. Kirsner was an audit professional with Arthur Andersen LLP, an international accounting and consulting firm. Mr. Kirsner was a partner in the firm from 1977 until his retirement in 1993. Mr. Kirsner does not serve on any other public company boards nor has he served on any other public company boards in the past five years. Mr. Kirsner received his undergraduate and master’s degrees from Wharton School of Business at the University of Pennsylvania.

Mr. Kirsner brings extensive financial and accounting expertise to the Board of Directors. He serves as Chair of the Company’s Audit Committee and is qualified as an “audit committee financial expert” as defined under SEC guidelines. His significant public accounting, public company CFO, investment, and

audit committee experience provide Mr. Kirsner with the financial acumen and leadership skills necessary to serve as Chair of our Audit Committee. He has also served on the board of another publicly traded company in the software industry, which provides us with additional valuable perspectives on our industry and on issues affecting similarly situated publicly traded companies.

William J. Lansing. Director since 2006; Age 63.

Since January 2012, Mr. Lansing has served as the Company’s Chief Executive Officer. From February 2009 to November 2010, Mr. Lansing served as Chief Executive Officer and President at Infospace, Inc. From 2004 until 2007, Mr. Lansing served as Chief Executive Officer and President at ValueVision Media, Inc. From 2001 to 2003, he served as a General Partner at General Atlantic LLC, a global private equity firm. From 2000 to 2001, he was Chief Executive Officer at NBC Internet, Inc., an integrated Internet media company. From 1998 to 2000, he served as President, then as Chief Executive Officer at Fingerhut Companies, Inc., a direct marketing company. From 1996 to 1998, he was Vice President, Corporate Business Development at General Electric Company. In 1996, he was Chief Operating Officer/Executive Vice President at Prodigy, Inc. From 1986 through 1995, Mr. Lansing worked with McKinsey & Company, Inc. Mr. Lansing also served as Chairman of the Board for Shutterfly, Inc. from February 2017 to September 2019. He holds an undergraduate degree from Wesleyan University and a J.D. from Georgetown University.

Mr. Lansing is the only member of management who serves on our Board of Directors. As our Chief Executive Officer, Mr. Lansing has extensive, first-hand knowledge of our corporate strategy, business units, operations, and employees, as well as the opportunities, risks, and challenges faced by our Company. Mr. Lansing brings to his roles as an executive officer and director an extensive background in management through his past chief executive officer and other senior management positions held at various companies. His experience in the technology industry, particularly in the areas of the Internet and e-commerce, provides significant value across several of our business units.

Eva Manolis. Director since 2018; Member of the Leadership Development and Compensation Committee; Age 58.

Ms. Manolis formerly served as Vice President of Consumer Shopping Experience from May 2010 to August 2016, and previously held various management positions beginning in 2005, at Amazon.com, Inc., an electronic commerce and cloud-computing company, where she led the worldwide development of core consumer-facing features, functionality and user interface designs across multiple websites, mobile apps, and business lines. Prior to joining Amazon, Ms. Manolis co-founded and served as Senior Vice President of Products at Shutterfly, Inc. from 1999 to 2002, and served as Senior Vice President, Product and Operations at KeepMedia, Inc., an online content provider, from 2002 to 2005. From October 2016 through September 2019, Ms. Manolis served on the board of Shutterfly, Inc., a public company, where she also served as a member of the Governance Committee. Since August 2019, Ms. Manolis has served as a director of iRobot, Inc., a public company, where she serves on the Audit Committee. Ms. Manolis earned Bachelor of Science and Master of Science degrees in Electrical Engineering from Brown University.

Ms. Manolis brings a strong background in leadership and management in the technology industry, with a focus on designing and building innovative customer products and services. We value her deep expertise in this area, as well as her knowledge of corporate governance matters from her service on the board of directors of Shutterfly, Inc.

Marc F. McMorris. Director since 2015; Member of the Audit Committee; Age 53.

Mr. McMorris has been Co-Chief Executive Officer at Carrick Capital Partners, a private equity investment firm that he co-founded, since March 2021. From January 2012 to March 2021, Mr. McMorris served as the Managing Director of Carrick Capital Partners. From September 1999 to December 2011, Mr. McMorris served in various leadership positions at General Atlantic, LLC, a global private equity investment firm focused on technology growth investing, including Managing Director from 2003 to December 2011. Mr. McMorris does not serve on any other public company boards nor has he served on any other public company boards in the past five years. Mr. McMorris earned an undergraduate degree from the University of Pennsylvania and an M.B.A. from Wharton School of Business at the University of Pennsylvania.

Mr. McMorris’s extensive experience in evaluating companies in the financial services and technology industries, together with his mergers and acquisitions experience, provides a strong complement to our Board. He currently provides guidance to technology companies in several different areas, including software as a service (“SaaS”), an area of strong focus for the Company moving forward. He is also qualified as an “audit committee financial expert” as defined under SEC guidelines.

Joanna Rees. Director since 2015; Chair of the Leadership Development and Compensation Committee; Member of the Governance, Nominating and Executive Committee; Age 60.

Since June 2016, Ms. Rees has been the Managing Partner of West.Ventures, a venture studio providing marketing and brand expertise and investment capital to leading high growth private companies. West client companies have included Twitter, Square, Impossible Foods, Inception Fertility, GoFundMe, Newfront Insurance, Braintree and Proxy, to name a few. Previously (from 2012 to June 2016) Ms. Rees was a Managing Director of Soda Rock Partners, an investment and consulting firm, where she served as an investor, board member and senior advisor to multiple high growth companies. In 1996, Ms. Rees founded VSP Capital, a San Francisco-based venture capital firm, where she served as Managing Partner until 2011. During her tenure with VSP Capital, Ms. Rees served on the board of more than 25 private, venture-backed companies across a broad range of industries. From 1995 to 1996, Ms. Rees worked at Vrolyk & Company, a boutique merchant bank, and from 1993 to 1995, Ms. Rees worked at BA Securities, an investment banking subsidiary of Bank of America. Ms. Rees spent her early career in advertising and brand management. From 1984 to 1989, she held several senior marketing management positions with Groupe Danone, a $20+ billion global consumer products firm, with her last position as head of new product development. Ms. Rees began her career at Benton & Bowles (now DMB&B), an advertising agency, working on multiple consumer brands. Ms. Rees was the co-creator of the Build Brand Value CEO forum, which she ran from 1997 to 2003 as part of VSP Capital. Within the last five years, Ms. Rees served on the board of Care.com, Inc., a public company. Ms. Rees earned a B.S. from Duke University and an M.B.A. from Columbia University.

Ms. Rees’s leadership and experience in investing in, advising and building leading growth companies are valuable to the Company as it seeks to continue to grow its business and broaden its portfolio with innovative new product categories. Ms. Rees has deep connections across a wide range of industries, including the technology and education industries, and access to thought leaders worldwide.

David A. Rey. Director since 2011; Member of the Audit Committee; Age 71.

From December 2008 to May 2011, Mr. Rey served as Executive Vice President and Chief Client Relationship Officer of UnitedHealth Group. From 1972 until 2008, Mr. Rey was an employee and then partner at Accenture Ltd. (previously Andersen Consulting and Arthur Andersen LLP), a global consulting firm. Mr. Rey served as both the Global Managing Partner of the healthcare industry practice and, as a Senior Managing Partner, led Accenture’s large client relationship development program. Mr. Rey does not serve on any other public company boards nor has he served on any other public company boards in the past five years. Mr. Rey holds a B.S. in Industrial Engineering and Operations Research from the University of California, Berkeley.

Mr. Rey brings financial reporting and accounting expertise to the Board of Directors, as well as global, cross-industry experience in developing and sustaining the kind of large client relationships that increasingly drive our Company’s business growth. Mr. Rey’s strong financial background qualifies him as an “audit committee financial expert” as defined under SEC guidelines, and as such, he serves on the Company’s Audit Committee. In 2018, Mr. Rey earned the CERT Certificate in Cybersecurity Oversight from the National Association of Corporate Directors (NACD).

Recommendation of the Board of Directors

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF EACH OF THE NOMINEES LISTED ABOVE.

PROPOSAL 2: ADVISORY VOTE ON EXECUTIVE OFFICER COMPENSATION

Pursuant to Section 14A of the Exchange Act, the Company seeks a non-binding advisory vote from its stockholders to approve the compensation of our named executive officers as described under “Executive Compensation — Compensation Discussion and Analysis” and the tabular disclosure regarding named executive officer compensation (together with the accompanying narrative disclosure) in this proxy statement.

This proposal gives our stockholders the opportunity to express their views on the Company’s named executive officer compensation. Because your vote is advisory, it will not be binding upon the Board of Directors. However, the LDCC will consider the outcome of the vote when making future executive officer compensation decisions.

As we discuss below in our Compensation Discussion and Analysis, we believe that our compensation policies and decisions are designed to deliver a performance-based pay philosophy, are aligned with the long-term interests of our stockholders and are competitive. The Company’s principal compensation policies, which enable the Company to attract, motivate and retain talented executive officers to lead the Company in the achievement of our business objectives, include:

•

We make annual cash compensation decisions based on assessment of the Company’s performance against measurable financial goals, as well as each executive’s individual performance.

•

We emphasize long-term incentive compensation awards that collectively reward executive officers based on individual performance, external and internal peer equity compensation practices, and the performance of the Company’s stock.

•

We delivered approximately two-thirds of the targeted annual long-term award value to top executives for fiscal 2021 in the form of performance-based incentives.

•

We require stock ownership by our senior executive officers.

As a result, we are presenting this proposal, which gives you as a stockholder the opportunity to vote on our named executive officer compensation as disclosed in this proxy statement by voting “FOR” or “AGAINST” the following resolution:

RESOLVED, that the stockholders approve the compensation of the Company’s named executive officers, as disclosed in the Compensation Discussion and Analysis, the compensation tables, and the related disclosure contained in the Company’s Proxy Statement for its 2022 Annual Meeting.

Recommendation of the Board of Directors

THE BOARD OF DIRECTORS BELIEVES THAT THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS IS APPROPRIATE AND RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE NAMED EXECUTIVE OFFICER COMPENSATION AS DISCLOSED IN THE COMPENSATION DISCUSSION AND ANALYSIS AND THE COMPENSATION TABLES AND OTHERWISE IN THIS PROXY STATEMENT.

PROPOSAL 3: RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

It is the responsibility of the Audit Committee to select and retain independent auditors. Our Audit Committee has appointed Deloitte & Touche LLP (“Deloitte”) as our independent auditors for the Company’s fiscal year ending September 30, 2022. Although stockholder ratification of the Audit Committee’s selection of independent auditors is not required by our Bylaws or otherwise, we are submitting the selection of Deloitte for stockholder ratification so that our stockholders may participate in this important corporate decision. If not ratified, the Audit Committee will reconsider the selection, although the Audit Committee will not be required to select different independent auditors for the Company.

Representatives of Deloitte will be present at the Annual Meeting and will have an opportunity to make a statement and respond to questions from stockholders present at the meeting.

Audit and Non-Audit Fees

The following table presents fees for professional audit services rendered by the Company’s independent registered public accounting firm for the fiscal years ended September 30, 2021 and September 30, 2020, for the audit of our annual financial statements and fees for other services rendered by the firm during those respective periods.


	2021		2020
Audit Fees	$	2,740,000	$	2,797,000
Audit-Related Fees		744,000		922,000
Tax Fees		163,000		240,000
All Other Fees		2,000		2,000

Total	$	3,649,000	$	3,961,000

Audit Fees. Audit fees consisted of fees for services rendered in connection with the annual audit of our consolidated financial statements, quarterly reviews of financial statements included in our quarterly reports on Form 10-Q, and the audit of internal control over financial reporting. Audit fees also consisted of services provided in connection with statutory audits, consultation on accounting matters and SEC registration statement services.

Audit-Related Fees. Audit-related fees consisted principally of fees for financial and non-financial attestation services (Service Organization Control), business divestiture, customer compliance audits and audits of financial statements of employee benefit plans.

Tax Fees. Tax services consisted of fees for tax consultation and tax compliance services.

All Other Fees. All other fees consisted of fees for access to an online library of accounting and financial reporting literature.

Our Audit Committee considers whether the provision of services other than for audit fees is compatible with maintaining our independent auditor’s independence, and has determined that these services for fiscal 2021 and 2020 were compatible. The services described above were approved by the Audit Committee pursuant to Rule 2-01 of Regulation S-X under the Exchange Act.

Policy on Audit Committee Preapproval of Audit and Non-Audit Services of Independent Auditors

Our Audit Committee is responsible for appointing, setting compensation, and overseeing the work of the independent auditors. The Audit Committee has established a policy regarding preapproval of all audit and permitted non-audit services provided by the independent auditors. On an ongoing basis, management communicates specific projects and categories of service for which it requests the advance approval of the Audit Committee. The Audit Committee reviews these requests and advises management if the Audit Committee approves the engagement of the independent auditors. On a periodic basis, management reports to the Audit

Committee regarding the actual spending for such projects and services compared to the approved amounts. The Audit Committee may also delegate the ability to preapprove audit and permitted non-audit services to a subcommittee consisting of one or more members, provided that any such preapprovals are reported on at the next Audit Committee meeting.

Recommendation of the Board of Directors

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE RATIFICATION OF DELOITTE & TOUCHE LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2022.

REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS

The Audit Committee selects and retains an independent registered public accounting firm as the Company’s independent auditor and assists the Board in overseeing (1) the integrity of the Company’s financial statements, (2) the independent auditor’s qualifications and independence, (3) the performance of the Company’s internal audit function and independent auditor, and (4) the compliance by the Company with legal and regulatory requirements related to financial affairs and reporting. The Board of Directors has adopted a written charter for the Audit Committee that addresses the responsibilities of the Audit Committee. This charter is available on the “Investors” page of our website at www.fico.com.

While the Audit Committee has the responsibilities and powers set forth in its charter, it is not the duty of the Audit Committee to plan or conduct audits or to determine that the Company’s financial statements and disclosures are complete and accurate and are in accordance with generally accepted accounting principles and applicable legal and other requirements. These are the responsibilities of management and the independent auditor. Additionally, in performing its oversight function, the Audit Committee necessarily relies on the work and assurances of, and information provided by, management and the independent auditor.

Deloitte & Touche LLP (“Deloitte”) served as the Company’s independent auditor for the fiscal year ended September 30, 2021. In fiscal 2021, the Audit Committee met and held discussions with management and Deloitte on numerous occasions. In fulfilling its oversight responsibilities, the Audit Committee reviewed and discussed with management and Deloitte the Company’s quarterly consolidated financial statements prior to the filing of each Quarterly Report on Form 10-Q and the audited consolidated financial statements included in the Annual Report on Form 10-K for the fiscal year ended September 30, 2021. The Audit Committee discussed with Deloitte matters required to be discussed by the applicable Public Company Accounting Oversight Board standards. Deloitte also provided to the Audit Committee the written disclosures required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the Audit Committee concerning independence, and the Audit Committee discussed with Deloitte the firm’s independence and tenure.

Based upon the Audit Committee’s discussions with management and the independent auditor, and the Audit Committee’s review of the representations of management and the report of the independent auditor to the Audit Committee, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2021, as filed with the SEC.

Submitted by the Audit Committee:

James D. Kirsner, Chair

Marc F. McMorris

David A. Rey

CERTAIN RELATIONSHIPS AND RELATED PERSONS TRANSACTIONS

We maintain a written policy for the approval of any related person transactions. A “Related Person,” for purposes of our policy, means:

•

Any person who is, or at any time since the beginning of our last fiscal year was, a director or executive officer or a nominee for director;

•

Any person known to be the beneficial owner of more than 5% of our common stock; or

•

Any immediate family member of the foregoing persons.

“Immediate family members” include children, stepchildren, parents, stepparents, spouses, siblings, mothers- and fathers-in-law, sons- and daughters-in-law, brothers- and sisters-in-law and any other person (other than a tenant or employee) sharing the household of one of these individuals.

Under the Related Persons Transaction Policy, any transaction, arrangement or relationship in which the Company (including any of its subsidiaries) is or will be a participant and in which a Related Person has a direct or indirect interest (a “Related Persons Transaction”) must be reviewed by the Audit Committee, except that the following transactions, arrangements or relationships are exempt under the policy:

•

Payment of compensation by the Company to a director or executive officer of the Company for such person’s service to the Company in that capacity;

•

Transactions available to all employees or all stockholders of the Company on the same terms; and

•

Transactions that, when aggregated with the amount of all other transactions between the Company and the Related Person or any entity in which the Related Person has an interest, involve less than $120,000 in a fiscal year.

In determining whether to approve a Related Persons Transaction, the Audit Committee will consider the following:

•

Whether the terms are fair to the Company;

•

Whether the transaction is material to the Company;

•

The importance of the Related Persons Transaction to the Related Person;

•

The role the Related Person has played in arranging the Related Persons Transaction;

•

The structure of the Related Persons Transaction; and

•

The interests of all Related Persons in the Related Persons Transaction.

We will only enter into a Related Persons Transaction if the Audit Committee determines that the Related Persons Transaction is beneficial to the Company, and the terms of the Related Persons Transaction are fair to the Company. No Related Persons Transactions occurred during fiscal 2021.

CORPORATE GOVERNANCE

Board Leadership Structure

The Board of Directors does not have a policy with respect to the separation of the offices of Chairman of the Board and Chief Executive Officer. The Board of Directors believes that it is in the best interest of the Company for the Board of Directors to make a determination on this matter when it appoints a new Chief Executive Officer or Chairman. The Board of Directors has determined that, currently, the most effective leadership structure is to have a separate Chairman of the Board, a position held by Mr. Kelly since February 2016, and Chief Executive Officer, a position held by Mr. Lansing since January 2012, as it provides us the best access to the judgments and experience of both individuals while providing a mechanism for the Board’s independent oversight of management. As a result, the Chairman presides over the meetings of the Board of Directors and the stockholders, and the Chief Executive Officer is allowed more time to focus energies on the management of the Company’s business.

Board Risk Oversight Role

Our management is responsible for identifying the various risks facing the Company, formulating risk management policies and procedures, and managing the Company’s risk exposures. Our Board of Directors’ responsibility is to monitor the Company’s risk management processes by informing itself concerning our material risks and evaluating whether management has reasonable controls in place to address the material risks. The Audit Committee of the Board of Directors has been monitoring management’s responsibility in the area of risk oversight. Accordingly, our internal risk management team regularly reports to the Audit Committee on our major risk exposures and the steps management has taken to monitor and control such exposures, including our risk assessment and risk management policies. The Audit Committee, in turn, reports on the matters discussed at the committee level to the full Board of Directors.

Attendance at Board Meetings

During fiscal 2021, the Board of Directors met four times. Each director attended at least 75% of the aggregate of the total number of meetings of the Board of Directors and the total number of meetings held by all committees of the Board on which such director served.

All Board members are expected to attend our Annual Meeting. All directors then standing for election attended the 2021 Annual Meeting.

Our Corporate Governance Guidelines provide that independent directors will meet in executive session without the Chief Executive Officer or other management present at each regular Board meeting. Braden R. Kelly, the Chairman of the Board, is independent and presides at executive sessions held in accordance with our Corporate Governance Guidelines.

Annual Board Self-Evaluations

The Board of Directors and committees conduct annual self-evaluations to assess the qualifications, attributes, skills and experience represented on the Board and to determine whether the Board and its committees are functioning effectively.

Board Committees

Our Board has three standing committees: Audit; Leadership Development and Compensation; and Governance, Nominating and Executive. All of the members of the committees are independent directors under the applicable SEC rules and NYSE listing standards. Each committee’s charter expressly provides that the committee has the sole discretion to retain, compensate, and terminate its advisors. Current copies of the charters of the three committees are available on the “Investors” page of our website at www.fico.com. The following sets forth membership of each of our committees as of January 10, 2022.


Audit Committee		Primary Responsibilities:
Fiscal 2021 Meetings: 9 James D. Kirsner (Chair) Marc F. McMorris David A. Rey	•	Assists the Board in overseeing the integrity of our financial statements;
	•	Oversees the qualifications and independence of our independent auditor;
	•	Oversees performance of our internal audit function and independent auditor;
	•	Oversees our Company’s compliance with legal and regulatory requirements related to financial affairs and reporting;
	•	Appoints, retains, compensates, and replaces the independent auditor;
	•	Reviews the audited financial statements with management and the independent auditor, and on an annual basis it provides an Audit Committee Report wherein it states that it recommends to the Board that the audited financial statements be included in our Annual Report on Form 10-K; and
	•	Reviews with management the Company’s cybersecurity risk exposures and the steps management has taken to monitor and minimize such risks to the Company.

		Independence:
	•	Each member of the Audit Committee is independent as defined in Rule 10A-3 adopted pursuant to the Sarbanes-Oxley Act of 2002 and in the NYSE listing rules; and
	•	The Board determined that all members of the Audit Committee are “audit committee financial experts” under the SEC regulations and financially literate under NYSE listing rules.


Leadership Development and Compensation Committee		Primary Responsibilities:
Fiscal 2021 Meetings: 6 Joanna Rees (Chair) Fabiola Arredondo Braden R. Kelly Eva Manolis	•	Overall oversight responsibility for the directors’ and executive officers’ compensation plans and the compensation policies and programs of the Company;
	•	Reviews and approves the level and terms of the executive officers’ annual and long-term compensation;
	•	Administers the Company’s long-term incentive plans, as well as makes recommendations to the Board of Directors regarding the adoption of other incentive plans;
	•	Makes recommendations to the Governance, Nominating and Executive Committee with respect to the form and amount of director compensation, and, jointly with the Governance, Nominating and Executive Committee, recommends changes in director compensation to the Board;
	•	Monitors compliance by directors and officers with the Company’s stock ownership guidelines;


Leadership Development and Compensation Committee		Primary Responsibilities:
	•	Solicits input from independent directors and periodically reviews and reports to the Board with respect to succession planning for the Chief Executive Officer and other senior management positions; and
	•	Regularly reviews and provides guidance to management with respect to the Company’s human capital management policies, programs and strategies, including but not limited to those regarding talent recruitment, development and retention, succession planning, health and safety, organizational culture, employee engagement, diversity, equity and inclusion, and compensation and benefits.

		Independence:
	•	Each member of the Leadership Development and Compensation Committee is independent as required by the NYSE listing rules.


Governance, Nominating and Executive Committee		Primary Responsibilities:
Fiscal 2021 Meetings: 4 Braden R. Kelly (Chair) James D. Kirsner Joanna Rees	•	Reviews annually with the Board the composition (e.g., skills, experience, diversity, age) of the Board, the requisite skills and characteristics of new Board members, and the performance and continued tenure of incumbent Board members;
	•	Seeks individuals qualified to become Board members for recommendation to the Board;

	•	Develops and recommends to the Board the criteria for identifying and evaluating director candidates, and recommends candidates for election or reelection to the Board;

	•	Leads the Board in an annual evaluation of the Board’s performance, reports annually to the Board on the results of the evaluation, and oversees the annual evaluation of the Board’s committees, and the self-evaluation of individual directors;

	•	Establishes the agenda for each Board meeting in cooperation with the CEO and appropriate senior management;

	•	Recommends to the Board the membership of the standing committees of the Board;

	•	Annually reviews and reassesses the adequacy of the Corporate Governance Guidelines and recommends any proposed changes to the Board for approval;

	•	Has general oversight of the Company’s objectives, policies and efforts related to corporate responsibility matters, including sustainability, environmental, corporate citizenship, social responsibility, political and public policy matters;

	•	Receives recommendations of the Leadership Development and Compensation Committee with respect to the form and amount of director compensation, and, jointly with the Leadership Development and Compensation Committee, recommends changes in director compensation to the Board;


Governance, Nominating and Executive Committee		Primary Responsibilities:

	•	Takes action in accordance with Board policy with respect to investment, budget and capital and exploratory expenditure matters arising in the normal course of the Company’s business as the same may from time to time be conducted, subject to such threshold limits as are set from time to time by the Board; and

	•	Takes action pertaining to selling, leasing, pledging, mortgaging or otherwise disposing of property or assets of the Company, subject to such threshold limits as are set forth from time to time by the Board.

		Independence:
	•	Each member of the Governance, Nominating and Executive Committee is independent as required by the NYSE listing rules.

Environmental, Social and Governance (“ESG”) Matters

We recognize the importance of environmental, social, and governance issues. We have a long-standing commitment to the environment, the communities we call home, our employees and other stakeholders, and we are proud of our strong governance practices. Our Board and certain of its committees oversee our progress on various ESG initiatives. Additional information regarding our commitment and approach to ESG matters appears on the Corporate Responsibility page of our website at www.fico.com/en/corporate-responsibility. The information on that page is not incorporated herein and is not a part of our proxy solicitation materials.

Human Capital Resources

Our People

As of September 30, 2021, we employed 3,662 persons across 31 countries. Of these, our largest representation includes 1,299 (36%) based in the United States, 1,296 (35%) based in India and 331 (9%) based in the United Kingdom. Other than to the extent mandated by applicable law in certain foreign jurisdictions, none of our employees are covered by a collective bargaining agreement, and no work stoppages were experienced during fiscal 2021.

Our Board of Directors and executive leadership team believe that our people are vital to our success. The LDCC oversees all human capital management policies, programs and strategies, including but not limited to those regarding talent recruitment, development and retention, health and safety, organizational culture, employee engagement, diversity, equity and inclusion, and compensation and benefits. The LDCC also periodically reviews and reports to the Board with respect to succession planning for our Chief Executive Officer and other senior management positions. In addition, our Chief Human Resources Officer reports to our Board periodically on people-focused programs.

Three Core Values define our culture and serve to guide behavior and decision-making across our business: Act Like an Owner, Delight Our Customers and Earn the Respect of Others. Our selection process for new talent includes an evaluation against these values. Each new hire receives a personal welcome memo from the Chief Executive Officer reinforcing these values. In addition, the performance of each employee is evaluated against values-based expectations captured in a behaviorally anchored “rubric.”

Employee Engagement

For much of the past decade, we have conducted quarterly workforce surveys to measure employee engagement and gain feedback and insights from our people about ways to improve the employee experience and the effectiveness of our business operations. The results and insights of these studies are shared with the work team, executive team and our Board and are leveraged to drive positive organizational change.

Examples of organizational changes that have been driven by the insights from these surveys include investments in expanded workforce capacity, targeted recruiting of under-represented groups, broadened and more frequent company-wide communications, expanded employee stock ownership, expanded benefit programs including paid parental leave, enhanced incentive plan funding and expanded investments in professional development and culture-based initiatives to promote inclusiveness and belonging.

Awards and Recognition

Engaging our people, acting on their insights and investing in organizational culture remain ongoing priorities, and it is encouraging to receive external recognition for these efforts. During fiscal 2021, we received several accolades including: (1) being named by Forbes as America’s Best Mid-Sized Employer; (2) being named by Forbes as one of America’s Best Employers for Women; (3) being recognized for Excellence in Women’s Diversity and Inclusion by India’s Bangalore Chambers of Industry and Commerce; and (4) achieving certification from the Great Place to Work Institute for our operations in India and Brazil.

Diversity, Equity and Inclusion

FICO is committed to building and reinforcing a culture where individual differences and perspectives are valued. We believe that diverse teams can better relate to and deliver against the many and varied needs of our clients. We also believe that promoting a culture where individual differences are both welcomed and truly valued allows us to attract the best talent while allowing people to reach their full potential.

Foundationally, we have adopted a “Commitment to Inclusion and Belonging Policy” which provides that all employment-related decisions be made in compliance with established equal opportunity statutes. Accordingly, all decisions to employ, transfer, promote, train, compensate or otherwise provide access to benefit programs are to be made in accordance with these statutes. In addition, in the United States we have established an Affirmative Action Program and underlying plans for office locations with 50 or more employees to formally measure, report on and identify needed actions to close any gaps involving the utilization and advancement of women, minorities, disabled persons and veterans. All employees receive mandatory training and testing on this and other foundational and compliance policies during the on-boarding process and every two years thereafter, with people managers receiving training regarding their unique leadership responsibilities. As examples, we have a mandatory training program to identify, prevent and combat prohibited harassment, as well as training and “dialogue sessions” designed to build understanding of unconscious biases and strategies to overcome them.

Building on this foundation, we sponsor and provide dedicated funding to multiple employee resource groups (“ERGs”) that help support our goals of workforce engagement and a strong sense of inclusion and belonging. FICO ERGs focus on women, race/ethnicity, LGBTQ+ and community support groups. Our FICO Cares ERG encourages our people to connect with and contribute to their community. We encourage employees to participate in volunteer activities by providing work schedule flexibility and paid Community Volunteer Leave. We also support employee cash donations to qualified charitable organizations through our Corporate Matching Gift Program.

As one strategy to accelerate progress in expanding workforce diversity, we engaged in targeted campus recruiting efforts. In India, over one-half of over 200 campus hires in software engineering and data science roles during 2021 were women. In the United States, we formed a new partnership with the Management Leadership for Tomorrow (MLT.org) organization, which helped us connect with Black, Latinx and Native American college students for summer internships followed by offers of full-time employment upon graduation. Based on the success of this program over the past year, we are significantly expanding it in 2022.

Additional information on our diversity metrics and programs, including our EEO-1 survey results, are available on the Corporate Responsibility page of our website at www.fico.com/en/corporate-responsibility. Information contained on our website is not deemed part of or incorporated by reference into this proxy statement.

Talent Recruitment

We leverage our organizational culture as a competitive advantage in our efforts to attract talent from the broadest possible pool. This includes marketing our Core Values, opportunities for professional development, competitive compensation and benefit programs and strong focus on work/life balance and flexible work locations including home-based work. In addition, our job descriptions and public job postings have been written to reflect inclusive language.

We deploy structured selection practices to ensure strong alignment between candidate qualifications and knowledge and skills needed for success in each role, while avoiding unconscious biases. Hiring managers are provided with a structured interview guide including designated competencies for the given role, supporting interview questions and an objective scoring scale. Candidates for key technical roles are required to complete an online test to objectively validate minimum skills. People managers receive formal training on how to use these tools and how to avoid prohibited discrimination and unconscious bias.

Professional Development

To support professional development, we offer a structured onboarding program with training specific to a variety of identified career paths to help new employees become rapidly engaged and productive. We have invested in building the FICO “Integrated Learning Organization (ILO),” which is led by our Chief Learning Officer. The ILO develops customized learning content for colleagues, clients and partners around the world. We deliver high quality, targeted new hire onboarding, technology and product skill training, compliance and management and leadership education through this “FICO Learning” platform. This allows our employees to obtain the knowledge and skills to effectively perform in their current roles, while also preparing them for new opportunities. We also offer financial support for degreed programs through a tuition reimbursement program.

While some development programs (e.g., compliance training) are mandatory, a strength of our approach is that it can be highly customized by role and individual to target specific knowledge or skill priorities. On average, FICO employees engage in 20-40 hours of formal training per year inclusive of structured courses and self-paced exploratory learning. Management insights, coupled with quarterly employee engagement surveys and learning program feedback surveys ensure that the learning content delivered by our ILO remains highly relevant and effective.

Compensation and Benefit Programs

We regularly participate in market-based compensation surveys and seek the advice of outside experts to ensure that our base pay and incentive structures are competitive. We create a strong sense of shared purpose by having our CEO and each member of our executive leadership team participate in the same annual cash incentive bonus plan, as all non-sales employees across our organization.

We conduct structured talent management and rewards program reviews twice each year that are designed to closely link rewards to individual performance outcomes and to ensure fairness in promotion and pay decisions. We have invested in building behaviorally anchored “performance rubrics” for all major role types across our organization to bring greater objectivity to the performance assessment process.

Over the course of the past five years, we’ve steadily and significantly expanded participation in our annual performance-based equity program from 7% to nearly 25% of our workforce. In addition, two years ago, we adopted an Employee Stock Purchase Plan for eligible employees designed to promote even broader equity participation.

We offer competitive health and welfare benefit plans with significant company subsidies to offset premiums, retirement plans with a competitive company match to encourage participation and flexible paid-time-off programs including vacation, sick time and disability time. We have adopted paid Maternity and Parental Leave benefits totaling up to 12 weeks. Our employees have access to an employee assistance program which offers support to employees and their immediate family to address a range of personal needs and concerns in support of their well-being and mental health. We also sponsor a company-wide wellness program focused on health and stress management education.

Health and Safety

We are committed to providing a safe and healthy workplace. We continuously strive to meet or exceed compliance with all laws, regulations and accepted practices pertaining to workplace safety. All employees and contractors are required to comply with established safety policies, standards and procedures. Our benefits and facilities teams regularly conduct ergonomic evaluations and take all reasonable steps to accommodate the unique needs of individuals. In addition, we conduct periodic training designed to promote a safe and healthy work environment – including both office and home-based work settings.

As the COVID-19 pandemic persists, our focus remains on promoting employee health and safety, serving our customers and ensuring business continuity. Beginning in March 2020, our employees were instructed to work from home in each country where we operate. As certain offices have reopened due to the lifting of local government restrictions, we have maintained a “Voluntary Work-From-Home Policy” providing our people with valued flexibility. In addition, we have implemented a post-pandemic “Remote Work Policy” permitting our people in countries other than India to elect to work primarily from home on an ongoing basis with 75% of eligible employees electing to do so. We have also substantially reduced employee travel to only essential business needs in favor of ongoing video-based meetings. To assist our people in equipping home offices, we provided a generous cash stipend in 2021.

Finally, all employees and contingent workers are required to pass a comprehensive pre-employment background check addressing criminal convictions and verification of employment eligibility, identity, and educational and work history credentials.

DIRECTOR COMPENSATION PROGRAMS

Non-Employee Director Compensation

The following compensation components are paid to our non-employee directors:

•

Annual retainer fees;

•

An equity grant upon initial election to the Board; and

•

Annual equity grants.

Our Compensation Program for Non-Employee Directors, initially adopted on December 8, 2016 and amended on December 5, 2019 (the “Program”), for fiscal 2021 was as described below.

Under the Program, each non-employee director was entitled to receive annual retainer fees in the amounts set forth below and was paid in cash quarterly in arrears during their annual term commencing upon their election or re-election at each Annual Meeting of Stockholders. Such amounts are pro-rated for appointments made to the Board of Directors, Chair of the standing Board committee or Chairman of the Board between Annual Meetings.


Base annual retainer fee payable to all non-employee directors	$	60,000
Additional annual retainer fee payable to Chairs of the Board’s Audit Committee, Leadership Development and Compensation Committee and Governance, Nominating and Executive Committee	$	25,000
Additional annual retainer fee payable to Independent Chairman of the Board	$	100,000
Additional annual retainer fee payable to non-Chair members of the Audit Committee and Leadership Development and Compensation Committee	$	15,000

The stock price used for purposes of all calculations made under the Program equaled the average closing price of a share of the Company’s stock for the trading days within the 30-calendar-day period that ended on the eleventh calendar day before the date of grant.

Each non-employee director had the right, prior to the Annual Meeting, to elect to receive some or all of these annual retainer fees in the form of fully vested nonqualified stock options instead of cash. A director who elected to receive some or all of these annual retainer fees in the form of a stock option received an option to purchase a number of shares equal to the amount of the retainer or portion of the retainer being converted divided by the Black-Scholes value of an option.

Upon initial election to the Board, each non-employee director was entitled to receive a number of nonqualified stock options subject to three-year ratable vesting equal to $460,000 divided by the Black-Scholes value of a nonqualified stock option. The director was able to elect to convert either 50% or 100% of these stock options to RSUs subject to three-year ratable vesting. The number of RSUs was determined by dividing the aggregate Black-Scholes value of the nonqualified stock options being exchanged by the value of an RSU.

Annual equity grants made to non-employee directors who were re-elected at the 2021 Annual Meeting of Stockholders after serving on the Board at least since the previous Annual Meeting were in the form of stock options subject to one-year cliff vesting equal to $230,000 divided by the Black-Scholes value of a nonqualified stock option, and each committee chair received an additional annual grant in the form of stock options subject to one-year cliff vesting equal to $30,000 divided by the Black-Scholes value of a nonqualified stock option. Each director was able to elect to convert either 50% or 100% of these stock options to RSUs subject to one-year cliff vesting. The number of RSUs was determined by dividing the aggregate Black-Scholes value of the nonqualified stock options being exchanged by the value of an RSU. Equity awards granted upon an Annual Meeting that are subject to vesting will vest upon the dates of successive Annual Meetings.

Director Stock Ownership Guidelines

Our policy requires non-employee directors to hold seven times the base annual retainer fee in share value to be owned within five years of initial election or appointment. All of the directors currently meet the stock ownership guidelines or are making acceptable progress to their applicable level.

Director and Officer Liability Insurance Policies

Directors are covered under our director and officer liability insurance policies for claims alleged in connection with their service as directors. We have entered into indemnification agreements with all of our directors agreeing to indemnify them to the fullest extent permitted by law for claims alleged in connection with their service as directors.

DIRECTOR COMPENSATION FOR FISCAL 2021

The table below summarizes the compensation paid by the Company to each non-employee director for the fiscal year ended September 30, 2021.


Name	Fees Earned or Paid in Cash ($)⁽¹⁾			Stock Awards ($)^(9)(10)		Option Awards ($)^(9)(11)		Non-Equity Incentive Plan Compensation ($)		Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)		All Other Compensation ($)		Total ($)

Fabiola Arredondo		75,000	⁽²⁾		—		226,396		—		—		—		301,396

Braden R. Kelly		200,000	⁽³⁾		249,411		—		—		—		—		449,411

James D. Kirsner		42,500	⁽⁴⁾		249,411		—		—		—		—		291,911

Eva Manolis		112,500	⁽⁵⁾		—		226,396		—		—		—		338,896

Marc F. McMorris		75,000	⁽⁶⁾		110,141		113,198		—		—		—		298,339

Joanna Rees		85,000	⁽⁷⁾		249,411		—		—		—		—		334,411

David A. Rey		82,500	⁽⁸⁾		110,141		113,198		—		—		—		305,839

⁽¹⁾

All fees under this column represent fees paid to the directors under the Program described above. The Program anticipates fees commencing with the directors’ election year (February/March to February/March), whereas the compensation reported in this table is that paid during our fiscal year (October through September). Fees that are paid in cash are paid quarterly in arrears. Fees that, at the election of the director, are paid in stock options are paid in one annual grant upon the director’s election to the Board. As a result, when a director’s election with respect to receiving fees in cash or stock options changes from one year to the next, the director’s compensation disclosed in this column differs from the annual fees described under “Non-Employee Director Compensation” above. Messrs. Kelly, Kirsner, McMorris and Rey, and Ms. Manolis made election changes during fiscal 2021.

⁽²⁾

Represents the $75,000 annual board retainer which would have been paid in cash in quarterly installments following her re-election that were forgone by Ms. Arredondo to instead receive 520 stock options in one grant upon her re-election. The amount recognized for financial statement reporting purposes in fiscal 2021 with respect to such options, which was $73,856, is excluded from the “Option Awards” column.

⁽³⁾

Represents the $200,000 annual board, committee, independent chairman of the board and committee chair retainers which would have been paid in cash in quarterly installments following his re-election that were forgone by Mr. Kelly to instead receive 1,386 stock options in one grant upon his re-election. The amount recognized for financial statement reporting purposes in fiscal 2021 with respect to such options, which was $196,854, is excluded from the “Option Awards” column.

⁽⁴⁾	Represents $42,500 of the annual board and committee chair retainers paid to Mr. Kirsner in cash in the third and fourth quarters of fiscal 2021.

⁽⁵⁾

Includes (i) $37,500 of the annual board and committee retainers paid in cash in the first and second quarters of fiscal 2021, and (ii) $75,000 in annual board and committee retainers which would have been paid in cash in quarterly installments following her re-election that were forgone by Ms. Manolis to instead receive 520 stock options in one grant upon her re-election. The amount recognized for financial statement reporting purposes in fiscal 2021 with respect to such options, which was $73,856, is excluded from the “Option Awards” column.

⁽⁶⁾

Represents the $75,000 annual board and committee retainers which would have been paid in cash in quarterly installments following his re-election that were forgone by Mr. McMorris to instead receive 520 stock options in one grant upon his re-election. The amount recognized for financial statement reporting purposes in fiscal 2021 with respect to such options, which was $73,856, is excluded from the “Option Awards” column.

⁽⁷⁾

Represents $85,000 in annual board and committee chair retainers which would have been paid in cash in quarterly installments following her re-election that were foregone by Ms. Rees to instead receive 589 stock options in one grant upon her re-election. The amount recognized for financial statement reporting purposes in fiscal 2021 with respect to such options, which was $83,656, is excluded from the “Option Awards” column.

⁽⁸⁾

Includes (i) $67,500 in annual board and committee retainers paid quarterly to Mr. Rey in cash during fiscal 2021, and (ii) $15,000 in annual board and committee retainers which would have been paid in cash in quarterly installments following his re-election that were forgone by Mr. Rey to instead receive 104 stock options in one grant upon his re-election. The amount recognized for financial statement reporting purposes in fiscal 2021 with respect to such options, which was $14,771, is excluded from the “Option Awards” column.

⁽⁹⁾

The amounts in this column represent the aggregate grant date fair value of each award computed in accordance with FASB ASC Topic 718. For information on the assumptions used to calculate the value of the awards, refer to Note 16 of the Company’s Consolidated Financial Statements in the Annual Report on Form 10-K for the fiscal year ended September 30, 2021, as filed with the SEC.

⁽¹⁰⁾	As of September 30, 2021, the RSU awards outstanding for each director are as follows: Ms. Arredondo —739; Mr. Kelly — 548; Mr. Kirsner — 548; Ms. Manolis — 0; Mr. McMorris — 242; Ms. Rees — 548; and Mr. Rey — 242.

⁽¹¹⁾	As of September 30, 2021, the option awards outstanding for each director are as follows: Ms. Arredondo — 2,619; Mr. Kelly — 38,862; Mr. Kirsner — 715; Ms. Manolis — 12,781; Mr. McMorris — 18,226; Ms. Rees — 31,024; and Mr. Rey — 17,493.

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Overview of Company Performance in Fiscal 2021

We are a leading applied analytics company. We were founded in 1956 on the premise that data, used intelligently, can improve business decisions. Today, FICO’s software and the widely used FICO^® Score operationalize analytics, enabling thousands of businesses in nearly 120 countries to uncover new opportunities, make timely decisions that matter, and execute them at scale. Most leading banks and credit card issuers rely on our solutions, as do insurers, retailers, telecommunications providers, automotive companies, public agencies, and organizations in other industries. We also serve consumers through online services that enable people to access and understand their FICO Scores, the standard measure in the U.S. of consumer credit risk, empowering them to increase financial literacy and manage their financial health.

During fiscal 2021, we delivered record free cash flow as we continued to focus our strategy and pursue our long-term growth initiatives. We utilized our cash to enhance stockholder value through continued investments in decision management platform initiatives and our stock repurchase program.

We continued to transform our business with a focus on our decisioning platform. A significant and growing number of our software solutions run natively on FICO^® Platform, a modular software offering designed to support advanced analytics and decisioning use cases. While not all our software runs on FICO Platform today, we are prioritizing investment of development resources to enable substantially all of our software to run on FICO Platform in the future. We drove significant annual recurring revenue (“ARR”) growth on the platform in fiscal 2021.

For our Scores segment, our industry-leading FICO^® Scores continued its multi-year growth in both the U.S business-to-business and consumer markets. Over the past several years we have launched numerous new FICO^® Score-based products, and continue to grow our partnership with Experian, a leading global information services provider. This partnership provides consumers the FICO^® Score that lenders most commonly use in evaluating credit when determining applicant eligibility for new credit cards, car loans, mortgages or other lines of credit and can be accessed through Experian.com. The FICO^® Score Open Access program, which allows our participating clients to provide their customers with a free FICO^® Score, continues to help consumers see the FICO^® Score their lender uses.

We continue to enhance stockholder value by returning cash to stockholders through our stock repurchase program. During fiscal 2021, we repurchased approximately 1,877,000 shares at a total repurchase price of $882.2 million. As of September 30, 2021, we had approximately $173.2 million remaining under our current stock repurchase program.

We provided strong returns to our stockholders over the past three fiscal years, as illustrated by the chart below.

FICO vs. Russell 3000 3-Year Indexed Total Stockholder Return

(10/1/18 through 10/1/21)

LOGO

Overview of Fiscal 2021 Executive Compensation Program

As administered by our Leadership Development and Compensation Committee (“LDCC”), our executive compensation program seeks to closely link the financial interests of our executive officers with those of our stockholders. The LDCC uses the following guidelines in our executive compensation program to help achieve this overarching goal.


Emphasis on Pay for Performance				• Base salaries are adjusted infrequently and, accordingly, the base salaries for our executive officers remained flat in fiscal 2021;

				• Variable short-term cash incentive compensation plan funding is based upon Company performance, with individual awards linked closely to individual performance; and

				• Emphasis on long-term incentive compensation opportunities to align our executive officers’ interests with those of our stockholders, with two-thirds of their target long-term incentive compensation value weighted towards performance-based equity vehicles, the value of which depends on meeting the Company’s financial performance targets and our stock price performance.

Quality Pay Practices and Policies				• Only “double-trigger” accelerated vesting or payment for equity awards upon a change in control of the Company;

				• Executive stock ownership guidelines that require ownership and further align our executive officers’ interests with those of our stockholders;

				• Prohibition on hedging of Company common stock;

				• A compensation recovery, or “clawback,” policy pertaining to both cash and equity incentive-based compensation;

				• Mandatory minimum vesting period of one year for equity awards;

				• Annual compensation peer group review with appropriate updates to ensure valid comparisons;

				• No tax “gross-ups” allowed except with respect to relocation benefits and required spousal travel; and

				• Independent compensation consultant engaged by the LDCC that does not provide any other services to the Company.

In making compensation decisions at the outset of fiscal 2021 and throughout the year, the LDCC continued to reinforce the link between Company performance and executive compensation.

The target level of short-term cash incentive awards for each executive officer, expressed as a percentage of annual base salary, remained unchanged in fiscal 2021. At the beginning of the fiscal year, our Board of Directors approved an Adjusted Revenue target of $1,295.0 million and an Adjusted EBITDA target of $479.3 million. These performance measures were selected by the LDCC to determine funding of the fiscal 2021 cash incentive pools and to drive sustainable top-line and bottom-line growth, balancing both short-term and longer-term considerations. These target goals were higher than the target goals used in the fiscal 2020 short-term cash incentive program. Our fiscal 2021 results of $1,353.9 million in Adjusted Revenue and $556.9 million in Adjusted EBITDA exceeded target, resulting in funding under both the Broad-Based and Management Incentive Plans at 125% of target. Our Adjusted Revenue and Adjusted EBITDA metrics are discussed further on page 36 of this proxy statement, and Adjusted Revenue is reconciled to revenues and Adjusted EBITDA is reconciled to net income in Appendix A to this proxy statement.

In selecting these two financial measures, both of which are used to determine short-term cash incentive funding and Performance Share Unit (“PSU”) earnings, the LDCC took into account the fact that the Company is pursuing a strategic shift in the focus of its software segment toward a cloud-based platform while preserving the value of legacy solutions. As a result, it is making significant investments in technology infrastructure and solution innovation which tend to sacrifice short-term performance on certain other metrics (e.g., earnings per share) in favor of enabling longer-term stockholder value creation. The LDCC believes that these performance measures best balance the delivery of steady growth against the investments the Company is making.

Importantly, using a one-year performance period for short-term cash incentive plan funding and the determination of the number of PSUs earned allows the LDCC to reward performance for a time period over which the Company has reasonable visibility. Setting goals over a longer term is particularly difficult because of complexities linked to the strategic shift in focus for our software segment. Adding to that complexity is the fact that our sales force has needed to operate almost entirely in a remote fashion over the past year which has substantially increased sales cycle time. To address the importance of longer-term performance metrics, we have established a relative total stockholder return metric in our Market Share Unit (“MSU”) vehicle over one-, two- and three-year periods, as described in more detail below.

To align our executive officers’ interests with the creation of stockholder value, long-term equity incentive compensation represents a substantial portion of their target total direct compensation opportunity, and we have continued to maintain a diverse mix of equity award types which favor those that are performance-based instead of simply time-based. This mix of long-term incentive vehicles helps ensure that our executive compensation program operates effectively across a wide variety of business scenarios.

Long-term equity incentive awards to our executive officers in fiscal 2021 were granted in December 2020 as part of the Company’s annual year-end performance review and rewards planning process. Two-thirds of the annual long-term incentive awards were performance-based, with only one-third time-based. Specifically, the LDCC granted one-third of the target annual long-term equity incentive award value to our executive officers in the form of PSUs, which were designed to reward the achievement of pre-established annual Adjusted Revenue and Adjusted EBITDA goals. Based on our actual performance with respect to these measures, 200% of the target PSUs granted in fiscal 2021 were earned. The LDCC granted another one-third of the target annual long-term equity incentive award value in the form of MSUs. MSUs are earned based on our total stockholder return relative to the Russell 3000 Index over performance periods of one, two and three years. Based on our one-year total stockholder return from December 1, 2020 to November 30, 2021, 0% of the target awards for the first performance period of the fiscal 2021 MSUs were earned. Based on our two-year total stockholder return from December 1, 2019 to November 30, 2021, 0% of the target awards for the second performance period of the fiscal 2020 MSUs were earned. Based on our three-year stockholder return from December 1, 2018 to November 30, 2021, 187% of the target awards for the third performance period of the fiscal 2019 MSUs were earned. Third period earned MSUs delivered to participants are less units earned in the first and second periods.

Our strong linkage of pay and performance is illustrated in the chart below. The dollar amounts shown for the target total direct compensation figures reflect the grant date fair value of equity awards. The dollar amounts shown for the realized total direct compensation figures reflect fiscal 2021 realized PSUs at 200% of targeted earnings and fiscal 2021 MSUs at 0% of the target awards for the first performance period with earnings for the second and third performance periods reflected at target.

Target v. Realized Compensation for Named Executive Officers in FY21

LOGO

Preview of Fiscal 2022 Compensation Program

The LDCC’s decisions made at the outset of fiscal 2022 reflect a continuation of the philosophy employed during fiscal 2021. Specifically, our emphasis on long-term equity incentives continues and the long-term incentive program continues to reflect a strong emphasis on performance-based vehicles. As described more fully below, and as was the case in fiscal 2021, two-thirds of the value of annual equity awards made to our executive officers in fiscal 2022 involved performance-based vehicles. For fiscal 2022, the LDCC retained Adjusted Revenue and Adjusted EBITDA as the two financial measures used to determine short-term cash incentive funding and PSU earnings, equally weighted at 50% each. With PSUs representing one-third of long-term incentive value, the LDCC also continued to place one-third of long-term incentive value on MSUs which are earned over one-, two- and three-year performance periods based on relative total shareholder return vs. the Russell 3000 Index.

Named Executive Officers

Our named executive officers for fiscal 2021 consist of the following persons:

•

William Lansing, our Chief Executive Officer;

•

Michael McLaughlin, our Executive Vice President and Chief Financial Officer;

•

Stephanie Covert, our Executive Vice President, Sales & Marketing;

•

Claus Moldt, our Executive Vice President and Chief Technology Officer; and

•

James Wehmann, our Executive Vice President, Scores.

As previously announced, on January 10, 2022, Ms. Covert was appointed our Executive Vice President, Software, and Mr. Moldt was appointed our Vice President, Technology. The information and discussions in this proxy statement reflect the compensation and arrangements for these officers in the positions they held in fiscal 2021, as noted above.

Determination of Compensation

LDCC Process

Members of executive management participate in the LDCC’s meetings at the LDCC’s request. Management’s role is to contribute input and analysis, which the LDCC considers in making its decisions. The LDCC is not bound by management’s recommendations, but the LDCC relies on the insights of our CEO and Chief Human Resources Officer in determining compensation for our executive officers, other than our CEO. The

LDCC also consults with its external compensation consultant during its review of executive officer compensation. Prior to making decisions on executive compensation, the LDCC refers to comprehensive statements and reports prepared by its compensation consultant and management that reflect the amount and elements of each executive officer’s total direct compensation relative to competitive market practices.

The LDCC conducts an annual performance review of our CEO in connection with the determination of his compensation. As part of this process, one or more LDCC members and/or the Chairman of the Board meet with each senior executive to discuss our CEO’s performance using a structured interview approach. In addition, each Board member completes a written evaluation of our CEO and submits it to the LDCC. Based on these interviews and written evaluations, as well as on its own determinations regarding our CEO’s performance, the LDCC prepares a final performance review for our CEO. The LDCC then submits a recommendation for our CEO’s compensation to the Board for discussion. Following such discussion, the LDCC finalizes its determination of our CEO’s compensation and informs our CEO of such determination, together with the final performance review.

Compensation Peer Group

In connection with our fiscal 2021 executive compensation program, the LDCC reviewed summary reports prepared by its compensation consultant and by management reflecting current and proposed base salary, short-term cash incentive and equity award levels for our executive officers. Each element was analyzed relative to the Company’s compensation peer group. The peer group consisted of 20 companies that were selected as being similar in size to the Company and operating in the application software, data processing and outsourced services, research and consulting services, and financial exchanges and data sub-industries within the Global Industry Classification Standard taxonomy.

The 20 peer companies that were included in the analysis referenced by the LDCC when it set compensation for fiscal 2021 were as follows:


ACI Worldwide		Jack Henry & Associates
ANSYS		Manhattan Associates
Black Knight		MSCI
Blackbaud		Nuance Communications
Broadridge Financial Solutions		Pegasystems
Cadence Design Systems		PTC
CoreLogic		Splunk
Equifax		TransUnion
FactSet Research Systems		Verint Systems
Guidewire Software		Verisk Analytics

The composition of the compensation peer group is reviewed annually at a minimum, with adjustments made that the LDCC, with the assistance of its compensation consultant, believes are appropriate to maintain comparability within the employment marketplace and to reflect any mergers or acquisitions or significant size changes among the subject companies.

Specific information with respect to the Company’s relative position follows, using values available at the time the compensation levels were being determined in November 2020:


	Revenue ($ in millions)		Market Capitalization ($ in millions)	Operating Income ($ in millions)		Net Income ($ in millions)
75^thpercentile of peer group		$2,366	$21,611		$542		$379
50^thpercentile of peer group		$1,574	$12,684		$299		$150
25^th percentile of peer group		$1,241	$ 8,165		$111		$ 63
Company		$1,226	$12,345		$284		$232
Percentile rank		24%	47%		46%		56%

The LDCC considered the peer group information in addition to company and individual performance when setting the compensation levels for our executive officers for fiscal 2021. The LDCC does not benchmark total compensation or individual elements of compensation to particular percentiles but aims to create competitive pay packages that reflect the Company’s performance and that are generally intended to deliver above market median compensation if long-term equity incentives pay out at or above target based on challenging required levels of performance.

Use of Compensation Consultant

The LDCC retains an external compensation consultant to assist it in analyzing our executive compensation program and assessing market levels of compensation. For fiscal 2021, the LDCC engaged Compensia, Inc. to provide competitive practice and market compensation data, advice regarding the design of compensation programs for our executive officers and non-employee directors, input regarding specific compensation actions for our executive officers, analysis of the composition of our compensation peer group, and analysis concerning the structure and implementation of our 2021 LTIP.

Compensation Consultant Conflict of Interest Analysis

The LDCC has considered the relationships that the compensation consultant it engaged in fiscal 2021 has had with the Company, the members of the LDCC and the Company’s executive officers, as well as the policies that the consultant has in place to maintain its independence and objectivity, and has determined that no conflicts of interest arose from the work performed by such consultant.

Stockholder Advisory Vote on Named Executive Officer Compensation

At our last Annual Meeting of Stockholders held on March 3, 2021, we asked our stockholders to approve, by advisory vote, the compensation of our named executive officers, as disclosed in the Compensation Discussion and Analysis, the compensation tables, and the related disclosures contained in our proxy statement for that Annual Meeting. The proposal was approved by our stockholders with approximately 93.3% of the votes cast being “for” approval (or 92.5%, including abstentions). The LDCC continues to evaluate and adjust the Company’s compensation policies and practices as it deems appropriate to advance the best interests of the Company and its stockholders, and the Company engages in periodic discussions with certain of our largest stockholders to obtain feedback on our compensation policies and practices. In light of the high approval rate of our executive compensation program, policies and practices by our stockholders at our last Annual Meeting, the LDCC largely maintained the existing compensation program, policies and practices during fiscal 2021.

Elements of Compensation

The fiscal 2021 executive compensation program consisted of three principal elements: (1) base salary; (2) short-term cash incentives; and (3) long-term equity incentives in the form of PSUs, MSUs and RSUs.


Compensation Element		Purpose and Philosophy
Base Salary	•	Base salary provides executive officers with financial stability and predictable cash flow.
	•	Individual base salaries are determined by evaluating the executive officer’s role within the Company, experience, performance, and potential for development, as well as the base salaries of comparable roles within the peer group companies and the broader marketplace.
Short-Term Cash Incentives	•	Our short-term cash incentive plan rewards the achievement of annual Company and individual performance goals.
	•	Target cash incentive payment amounts are expressed as a percentage of base salary determined with reference to the peer group companies and the broader marketplace.


	•	Participants may earn between zero and 250% of their cash incentive award targets, depending both upon Company and individual performance.
Long-Term Equity Incentives	•	Long-term equity incentives directly link a significant portion of each executive officer’s target total direct compensation to the market value of our common stock, while promoting retention through multi-year vesting and performance periods.
	•	PSUs are earned based upon the extent to which annual Company financial targets are achieved with as few as zero and as many as 200% of the target PSUs eligible to be earned. Earned units are then subject to multi-year vesting, promoting continued linkage to the market price of our common stock while also promoting retention.
	•	MSUs are earned based on our relative total stockholder return measured over one-year, two-year and three-year performance periods with as few as zero and as many as 200% of the target MSUs eligible to be earned.
	•	RSUs represent a more stable equity-based compensation vehicle, ensuring linkage to the stock price performance of our common stock while promoting retention over a multi-year vesting period.

Base Salary in Fiscal 2021

None of our named executive officers received an increase in base salary as part of the Company’s annual year-end performance review and compensation process in November 2020. This conservative approach reflects the LDCC’s continued commitment to incentive compensation elements directly linked to the achievement of our target financial goals and the creation of stockholder value.


Named Executive Officer	Fiscal 2021 Base Salary			Fiscal 2020 Base Salary
William Lansing	$	750,000		$	750,000
Michael McLaughlin	$	400,000		$	400,000
Stephanie Covert	$	400,000	⁽¹⁾	$	N/A	⁽¹⁾
Claus Moldt	$	500,000		$	500,000
James Wehmann	$	500,000		$	500,000

⁽¹⁾

In connection with Ms. Covert’s promotion to Executive Vice President, Sales and Marketing effective as of October 1, 2020, the LDCC set her base salary at $400,000. In determining Ms. Covert’s compensation package, the LDCC evaluated competitive market data, as well as peer equity considerations. Ms. Covert was not an executive officer in fiscal 2020.

Short-Term Cash Incentives in Fiscal 2021

We offer a short-term incentive opportunity in the form of cash incentive awards to our executive officers. For fiscal 2021, these incentive awards were paid from a single, centralized pool that supported short-term cash incentive payments to our executive officers and vice president-level leaders under our Management Incentive Plan (“MIP”) and to other eligible employees under our Broad-Based Incentive Plan (“BBIP”).

In fiscal 2021, the LDCC determined our named executive officers’ cash incentive payments using the framework set forth below (which was the same for our named executive officers and for all other participants in the MIP and BBIP):



Company Performance Factor	=	A value ranging from 0 to 125% reflecting the extent to which the Company Adjusted Revenue and Adjusted EBITDA targets were achieved. The Company Performance Factor for fiscal year 2021 was equal to 125% of targeted funding approved by the LDCC at the beginning of the fiscal year.

Participant Performance Factor	=	A value ranging from 0 to 200%, reflecting the extent to which individual participant performance goals were achieved.

Participant Target %	=	The percentage of each participant’s annual base salary that represents his or her target cash incentive payment amount.

As an illustrative example, a participant with an annual base salary of $500,000, a Participant Target % of 50% of base salary, and a Participant Performance Factor of 100% would have earned $312,500 for fiscal 2021 based on our Company Performance Factor of 125% (compared to a target payment of $250,000).

The LDCC establishes the size of the cash incentive pool by multiplying the aggregate amount of plan participants’ target-level awards by the Company Performance Factor reflecting the extent to which Adjusted Revenue and Adjusted EBITDA targets were achieved. “Adjusted Revenue” means the Company’s GAAP Revenue as adjusted for any impact on revenues related to acquisitions, divestitures or other events deemed by the LDCC to have been out of management’s control or that may not be indicative of recurring business results and occurring in the measurement year. “Adjusted EBITDA” is a non-GAAP financial measure and is defined as GAAP net income, adjusted for: interest expense, net; provision for income taxes; other expense (income), net; amortization of intangible assets; depreciation; stock-based compensation expense; and restructuring and impairment charges, as further adjusted for any impact on revenues related to acquisitions, divestitures or other events deemed by the LDCC to have been out of management’s control or that may not be indicative of recurring business results and occurring in the measurement year. See Appendix A to this proxy statement for a reconciliation of Adjusted Revenue to GAAP revenues and Adjusted EBITDA to GAAP net income, the most directly comparable GAAP financial measures. The threshold, target and maximum performance levels for each performance measure, along with the related Company Performance Factor, for fiscal 2021 were as follows:

Financial Metric
(Weighting)

Threshold
Funding Level

Targeted
Funding Level

Maximum
Funding Level

Actual
Performance

Adjusted Revenue (50%)

$1,220.0
million

$1,260.0
million

$1,295.0
million

$1,310.0
million

$1,325.0
million

$1,353.9
million

Adjusted EBITDA (50%)

$423.1
million

$471.0
million

$479.3
million

$484.5
million

$489.9
million

$556.9
million

Company Performance Factor

25%

50%

100%

112.5%

125%

In accordance with this calculation, a Company Performance Factor of 125% was applied to the cash incentive pool and uniformly affected payments made to all participants in the MIP and BBIP. This fiscal 2021 Company Performance Factor was the same as fiscal 2020, when above-target Company performance yielded a multiplier of 125%.

The Participant Performance Factor is a function of the extent to which individual performance goals are achieved. These goals can include Company-wide measures as well as business unit metrics and goals that are highly specific to the functions over which the individual has primary responsibility. Our CEO’s performance goals were established by the LDCC after considering input from each non-employee director, and our CEO’s

individual annual performance evaluation was completed by the LDCC. Individual performance goals for our executive officers other than our CEO were established by our CEO, and annual performance evaluations for these executive officers were completed by our CEO and discussed with the LDCC. If an executive officer receives the lowest performance rating on a three-point scale (“Improvement Needed”), his or her Participant Performance Factor and resulting cash incentive payment will generally be reduced to zero. Conversely, if an executive officer receives the highest overall performance rating (“Outstanding”), his or her Participant Performance Factor may be as high as 200%. Distribution guidelines applicable to these performance ratings ensure that participants in the short-term cash incentive program are not all rated on the high or low end of the scale, but are instead distributed above and below the target levels. The LDCC may exercise discretion to make adjustments within the performance scale.

The Participant Performance Factor values for our named executive officers for fiscal 2021, along with the key factors considered by the LDCC and our CEO, as applicable, in making these determinations, were as follows:


Named Executive Officer	Participant Performance Factor	Key Factors
William Lansing	128%	• set and reinforced corporate vision and profitable growth strategy • aligned executives through goal setting and collaborative decision-making • sustained focus on top talent acquisition, workforce engagement and cultural priorities while effectively navigating pandemic challenges
Michael McLaughlin	110%	• conducted critical deal margin analyses and shaping to achieve targets • executed divestiture of non-strategic assets • effective expense management and investment deployment
Stephanie Covert	140%	• adopted new recurring revenue sales metrics while enabling platform selling skills • achieved successful platform sales at enterprise scale while expanding pipeline • designed and launched indirect partners channel to expand market reach
Claus Moldt	112%	• strong, ongoing execution of our cloud first strategy • effective oversight of platform development efforts • strengthened software development, architecture and product management teams
James Wehmann	120%	• oversaw strong revenue growth in the Scores business • leveraged partner relationships to deploy highly valuable innovation

The Participant Target % for each participant in the MIP is based on the Company’s desire to continue to emphasize long-term incentives and the LDCC’s review of market-competitive short-term compensation levels for executives in comparable roles at the peer group companies. As provided in their respective employment agreements, Mr. Lansing’s Participant Target % is 100% of his annual base salary, and the other named executive officers each have a Participant Target % of 50% of their annual base salary.

The combined effect of these inputs led to the following payments for the named executive officers under the MIP for fiscal 2021 performance, shown along with the target payment levels:


Named Executive Officer	Target Payout for Fiscal 2021		Amount Attributable to Company Performance Factor		Participant Performance Factor			Actual Payout for Fiscal 2021
William Lansing	$	750,000	$	937,500		128	%	$	1,200,000
Michael McLaughlin	$	200,000	$	250,000		110	%	$	275,000
Stephanie Covert	$	200,000	$	250,000		140	%	$	350,000
Claus Moldt	$	250,000	$	312,500		112	%	$	350,000
James Wehmann	$	250,000	$	312,500		120	%	$	375,000
Totals	$	1,650,000	$	2,062,500		—		$	2,550,000

Long-Term Equity Incentives in Fiscal 2021

The third key element of our executive compensation program for fiscal 2021 was long-term equity incentives in the form of equity awards. This element of compensation is used to drive achievement of the Company’s financial targets while linking compensation to the market value of our common stock. The Company has chosen to emphasize long-term equity incentives in our executive compensation program to help to ensure strong alignment with our stockholders over time.

In determining the value of annual equity awards for fiscal 2021, the LDCC considered an analysis of competitive market data prepared by its compensation consultant and described above under “Determination of Compensation — Compensation Peer Group,” the individual performance of each executive officer, the need to reinforce positive levels of collaboration and teamwork across members of the executive team, and our retention objectives.

The competitive market data analysis for fiscal 2021 showed that peer group total direct compensation increased 10-15% at the median and 75^th percentile levels with the cash component being relatively flat year-over-year and median long-term incentive value increasing by 18%. Coupled with strong company and individual performance results, this upward trend in peer group compensation data contributed to the year-over-year increase in compensation for our executives, all of which occurred in the long-term incentive pay component.

The year-over-year increase in the long-term incentive pay component was also attributable to our methodology for converting the intended grant date value of long-term incentive award to share units. As explained below, we convert intended grant date value to share units using the average closing stock price during the 30-calendar day period ending on the 11^th day prior to the date of grant. This averaging period is considered a best practice to offset daily stock price volatility, and the 10-day gap prior to the grant date provides executives with a reasonable period of time during which to decide what portion, if any, of designated RSU value to exchange for non-qualified stock options using an economically equivalent value also tied to the 30-day average price. For fiscal 2021, the 30-day average price was $457.7221 per share, however our price rose rapidly during the 10-day election period with the grant date value (December 10, 2020) price being $506.91 per share – a difference that added 10.8% to the cost of fiscal 2021 annual long-term incentive awards.

To strongly align the interests of executives and shareholders, we place two-thirds of annual long-term incentive value on performance-based vehicles in the form of PSUs and MSUs, considerably higher than the 51% average for our peer group. The proportion of each type of equity award granted in fiscal 2021 is broken down as follows:


Performance Share Units 1/3		Market Share Units 1/3		Restricted Stock Units 1/3

Performance Share Units (“PSUs”). For fiscal 2021, PSUs represented one-third of the target annual equity awards granted in December 2020 to our executive officers. The PSUs granted in fiscal 2021 were earned on the

basis of a one-year performance period but any earned shares vest over three years following the date of grant. The LDCC used a one-year performance period because market uncertainties made it difficult to accurately forecast our Adjusted Revenue and Adjusted EBITDA beyond that point, as described in detail on page 31 above. The LDCC believes the complexity of our major products, along with the complexity of our major customers, yields a very long selling cycle, which in turn contributes significant uncertainty into our revenue stream and resulting EBITDA. Using a one-year performance period allows the LDCC to reward performance for a time period over which the Company has better visibility instead of creating goals over a longer term that are more likely to be problematic. In addition, requiring that any earned shares vest over an additional two years creates long-term alignment with our stockholders and satisfies our retention objectives.

The maximum number of PSUs that could have been earned over the fiscal 2021 performance period by each named executive officer was specified in the applicable award agreement. In each case, the named executive officer could earn as little as 0% and as much as 200% of the target number of PSUs. The LDCC retained discretion to determine the actual number of PSUs that were earned and established the following earnings matrix when the awards were granted to inform its discretion:


Financial Metric (Weighting)	Threshold Performance				Target Performance				Maximum Performance
Adjusted Revenue (50%)	$	1,220.0 million	$	1,260.0 million	$	1,295.0 million	$	1,310.0 million	$	1,325.0 million
Adjusted EBITDA (50%)	$	423.1 million	$	471.0 million	$	479.3 million	$	484.5 million	$	489.9 million
PSUs Earned (as percentage of target)		0%		50%		100%		150%		200%

Based on the Company’s above-target performance of $1,353.9 million of Adjusted Revenue and $556.9 million of Adjusted EBITDA in fiscal 2021, and using the above matrix as a guide, the LDCC applied a multiplier of 200% to the target number of PSUs.

The target number of PSUs and the actual number of PSUs earned by each named executive officer for fiscal 2021 performance that were settled for shares of our common stock are as follows:


Named Executive Officer	Target Number of PSUs Granted for Fiscal 2021		Actual Number of PSUs Earned for Fiscal 2021
William Lansing		10,196		20,392
Michael McLaughlin		2,913		5,826
Stephanie Covert		2,913		5,826
Claus Moldt		4,370		8,740
James Wehmann		4,370		8,740

One-third of the earned PSUs were paid following the end of fiscal 2021 and two-thirds will vest over the next two fiscal years provided the named executive officer remains with the Company as of each vesting date or vesting of the PSUs continues pursuant to the terms of the applicable award agreement.

Market Share Units (“MSUs”). For fiscal 2021, MSUs represented one-third of the target annual equity awards granted in December 2020 to our executive officers. The MSUs granted in fiscal 2021 (as well as those granted in fiscal 2020 and fiscal 2019) are earned based on the Company’s total stockholder return relative to the Russell 3000 Index over performance periods of one, two and three years. The LDCC decided to measure performance over a total of three years to integrate a longer, multi-year performance period into the Company’s equity compensation program.

The number of MSUs earned by a named executive officer in each of the one- and two-year performance periods is determined by taking one-third of the target units in the applicable award agreement multiplied by the

relative return factor for the relevant performance period. The number of MSUs earned by a named executive officer in the three-year performance period is determined by taking the total number of the target units in the applicable award agreement multiplied by the relative return factor for the relevant performance period, and then subtracting any shares of our common stock earned in the one-year and two-year performance periods from the result. The total number of shares earned in the one-year and two-year periods is not adjusted if the three-year calculation, less shares earned in prior periods, is a negative number. The relative return factor for each performance period is calculated as follows:


Relative TSR Performance (Fiscal 2019, 2020 and 2021)		Relative Return Factor
+33.33% or greater		200%
+16.67%		150%
0%		100%
-12.5%		50%
-25% or less		0%

Generally, the Company’s relative TSR performance is calculated by taking the difference between our total stockholder return minus the Russell 3000 Index’s total stockholder return for the relevant performance period. Importantly, the MSU earnings slope for below-target performance is steeper than the slope for above-target performance, meaning that the penalty for under-performance is greater than the premium for over-performance.

Based on our total stockholder return of -12.41% for fiscal 2021 (vs. 31.93% for the Russell 3000 Index), 0% of the MSUs granted in fiscal 2021 were earned at the conclusion of the first performance period and settled for shares of our common stock. Based on our total stockholder return of 20.21% for fiscal 2020 and fiscal 2021 (vs. 52.30% for the Russell 3000 Index), 0% of the MSUs granted in fiscal 2020 were earned at the conclusion of the second performance period and settled for shares of our common stock. Finally, based on our total stockholder return of 95.62% for fiscal 2019, fiscal 2020 and fiscal 2021 (vs. 67.10% for the Russell 3000 Index), 187% of the MSUs granted in fiscal 2019 were earned at the conclusion of the third performance period and settled for shares of our common stock. The target number of MSUs and the number of shares of our common stock earned by each named executive officer for each of the three performance periods completed at the end of fiscal 2021 are as follows:


Named Executive Officer	Target Number of FY21 MSUs Subject to One-Year Performance		Actual Number of MSUs Earned
William Lansing		3,399		0
Michael McLaughlin		971		0
Stephanie Covert		971		0
Claus Moldt		1,457		0
James Wehmann		1,457		0


Named Executive Officer	Target Number of FY20 MSUs Subject to Two-Year Performance		Actual Number of MSUs Earned
William Lansing		3,410		0
Michael McLaughlin		325		0
Stephanie Covert		N/A		N/A
Claus Moldt		1,072		0
James Wehmann		1,072		0


Named Executive Officer	Target Number of FY19 MSUs Granted Subject to Three-Year Performance		Actual Number of MSUs Earned⁽¹⁾
William Lansing		5,405		8,702
Michael McLaughlin		N/A		N/A
Stephanie Covert		N/A		N/A
Claus Moldt		N/A		N/A
James Wehmann		1,766		2,843

⁽¹⁾

The actual number of MSUs granted in fiscal 2019 and earned in fiscal 2021 was calculated by multiplying the total number of target units in the applicable award agreement by the relative return factor for the relevant performance period, then subtracting the fiscal 2019 MSUs earned at the conclusion of the first and second performance periods. The total number of Mr. Lansing’s targeted fiscal 2019 MSUs was 16,215, and multiplying by the 187% relative return factor yielded 30,322 MSUs. Subtracting the 10,810 MSUs earned for the first performance period and the 10,810 MSUs earned for the second performance period yields the remaining 8,702 MSUs earned for the third performance period. Similarly, the total number of Mr. Wehmann’s targeted fiscal 2019 MSUs was 5,300, and multiplying by the 187% relative return factor yielded 9,911 MSUs. Subtracting the 3,534 MSUs earned for the first performance period and the 3,534 MSUs earned for the second performance period yields the remaining 2,843 MSUs earned for the third performance period.

Restricted Stock Units (“RSUs”). For fiscal 2021, RSUs represented the final one-third of the target annual equity awards granted in December 2020 to our executive officers. The RSUs granted in fiscal 2021 provide a link to our stock price performance, as well as promote our retention objectives over a multi-year vesting period. Generally, the RSUs granted by the LDCC vest in four equal annual installments beginning on the first anniversary of the grant date.

As in prior fiscal years, the LDCC permitted our executive officers to exchange up to 100% of their annual time-vested RSUs for non-qualified stock options (“NQSOs”) on an economically equivalent basis, while maintaining the existing four-year annual vesting requirement. In connection with the retention of this flexibility, which was initially implemented in fiscal 2015, the LDCC determined that NQSOs provide attractive leverage to the recipient and permit the holder to determine when taxable income events occur via a decision to exercise their NQSOs. In fiscal 2021, however, none of our named executive officers elected to receive a NQSO in exchange for an RSU award.

In the event that a named executive officer was to make such an election, the ratio constituting an economically equivalent basis would be determined as follows:



Value of One “Whole” Share	=	Accounting value determined based upon the average closing market price of our common stock during the 30 calendar days ending 11 days before the grant date

Value of One “Option” Share	=	Black-Scholes accounting value based upon the average closing market price of our common stock during the 30 calendar days ending 11 days before the grant date

Exchange Ratio for RSUs to NQSOs	=	Accounting value of one “whole” share divided by Black-Scholes accounting value of one “option” share

In fiscal 2021, the value of one “whole” share was determined to be $457.7221, while the value of one “option” share was determined to be $124.3589. The resulting ratio was 3.6807 “option” shares for each “whole” share, meaning our executive officers could receive a NQSO for that number of shares equal to 3.6807 multiplied by the number of shares that would be subject to their RSU for fiscal 2021. These values were used to convert the intended grant date value of long-term incentive awards to stock units. It’s noteworthy that the actual closing

price on the December 10, 2020 date of grant was $506.91 per share – a factor which contributed 10.8% to the year-over-year increase in long-term incentive award values.

Evolution of Long-Term Equity Incentive Program

The following charts depict the evolution of our long-term equity incentive program over the last several years to increasingly emphasize performance-based vehicles over those based solely on continued service with the Company. The values reflected (i) assume that all executive officers elected to convert the maximum allowable portion of their annual stock option grants from fiscal 2011 through fiscal 2013 to RSUs, which was the typical pattern, and (ii) depicts PSUs and MSUs at target level. The fiscal 2014–2021 chart reflects RSUs, although our executive officers may have elected to convert those RSUs to stock options on an economically equivalent basis, as described above. The fiscal 2013 chart reflects the annual grants made to our named executive officers other than our CEO, who received an additional 70,000 stock options that were not convertible into RSUs and are not reflected in the chart.

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Retirement Arrangements

We offer a Section 401(k) plan for all eligible employees. Under this program, our executive officers (like all of our eligible employees) can receive a Company matching contribution on amounts they contribute to the Section 401(k) plan as follows: 100% match of the first 3% of eligible compensation contributed by the executive officer, followed by a 50% match of the next 2% of eligible compensation contributed by the executive officer. Our executive retirement and savings plan allows our vice presidents and more senior executive officers to defer up to 25% of their base salary and 75% of their short-term cash incentive awards into an investment account. Amounts in this account are payable upon certain employment termination events as specified in the plan.

In November 2018, the LDCC approved the inclusion of retirement provisions in the award agreements for the equity awards granted to our executive officers beginning in December 2018. Such provisions allow for continued vesting of outstanding equity awards upon an executive officer’s retirement provided that (i) such executive officer is 55 or older and has at least 5 years of continuous service as an employee (which must be immediately preceding the date of termination) and (ii) the sum of such executive officer’s age as of the date of his or her termination plus their years of service as an employee equals at least 75. In order to qualify for continued vesting, the executive officer must provide at least one year’s notice of his or her retirement and must also be available to provide service to the Company, if requested, during the continued vesting period. In addition, during the continued vesting period, the executive officer may not become employed by another entity or organization. The LDCC approved the inclusion of the retirement provisions in order to enhance retention of the current executive officers, to improve the executive transition process by ensuring sufficient time to plan for a successor and to ensure continued support from the former executive officer following retirement.

Other Compensation Arrangements

Our executive officers participate in our general employee benefit plans and programs, including health and dental benefits, on the same terms as all of our other full-time employees. We also pay the premiums for group life, accidental death and dismemberment, and business travel accident insurance for all eligible employees, including our executive officers, in a coverage amount based upon their base salary. We do not provide material perquisites.

Post-Employment Compensation Arrangements

Each of our current named executive officers is party to a Letter Agreement that, among other things, provides for payments and benefits in the event of termination of employment by the Company without cause or by the executive officer for good reason, and a Management Agreement that provides for payments and benefits in the event of such a termination of employment in connection with a change in control of the Company. These agreements are described in detail later in this proxy statement.

The LDCC believes that these severance and change-in-control arrangements are meaningful recruitment and retention devices, are important components in a competitive compensation package for our named executive officers, and will mitigate concerns that the executive officers may have regarding their continued employment prior to or following a change in control of the Company, thereby allowing them to focus their undivided attention on advancing the interests of the Company and its stockholders. The change-in-control arrangements are “double-trigger” (that is, they require both a change in control of the Company and a termination of employment without cause or by the executive officer for good reason within 24 months of the change in control) and the named executive officers are not eligible to receive tax payments or gross-ups in connection with any change-in-control arrangement.

Equity Award Grant Processes

Equity awards granted to our named executive officers in fiscal 2021 were granted under the 2012 Long-Term Incentive Plan (“2012 LTIP”), as they were granted prior to the adoption of the 2021 Long-Term Incentive Plan (“2021 LTIP”). Equity awards for all executive officers are approved by the LDCC. The LDCC has delegated authority to our CEO to approve the granting of equity awards to employees who are not executive officers, subject to certain parameters approved by the LDCC. The exercise price of stock options is set at fair market value of our common stock on the date of grant, with annual equity awards generally granted by the LDCC on a pre-determined day in December of each fiscal year.

Executive Stock Ownership Guidelines

Our Board of Directors has adopted stock ownership guidelines for our executive officers. Our CEO is required to own at least 100,000 shares of our common stock, and our Executive Vice Presidents are required to own shares valued at least five times their annual base salary. The guidelines provide that executive officers should achieve the stated guidelines within five years of appointment. As of the end of fiscal 2021, all of our executive officers had met or exceeded their required stock ownership level, or were making acceptable progress to their required level.

Executive Officer Incentive Compensation Recovery Policy

Our Board of Directors has adopted an Executive Officer Incentive Compensation Recovery Policy that governs cash and equity incentive-based compensation received by our executive officers, including our named executive officers. Under this policy, the Company will, in the appropriate circumstances as determined by the LDCC and to the extent permitted by applicable law, require reimbursement or forfeiture of such incentive-based compensation from an executive officer in the event that the Company materially restates its consolidated financial statements due to material non-compliance with applicable financial reporting requirements if such executive officer engaged in fraud or intentional misconduct that was a significant contributing factor to the restatement. In each such instance, the Company will seek to recover or cancel the amount by which such executive officer’s

incentive-based compensation that was granted, vested or earned during the preceding three-year period exceeds the amount that would have been granted, vested or earned based on the restated financial results, net of taxes paid or payable by the executive o

SEC Form DEF 14A filed by Fair Isaac Corproation