SEC Form DEF 14A filed by FleetCor Technologies Inc.

My Fellow Shareholders,

Thank you for your investment in Corpay.

Performance & Positioning

Our full year 2023 financial performance reached record levels, with adjusted earnings per share up 5% to $16.92, EBITDA up 13% at nearly $2 billion, and revenue up 10% to $3.8 billion. All of these metrics set all-time records, and are further proof of the strength of our Company. We also closed several acquisitions improving our go-forward positioning around the vehicle payments and corporate payments businesses.

On March 25, 2024, we were excited to announce that we rebranded the entire Company to Corpay, which better reflects the breadth of expense management and corporate payment solutions we offer. Additionally, in 2023, we simplified the presentation of our businesses, and now report in 3 primary segments: Vehicle Payments, Corporate Payments and Lodging Payments. We believe that our new branding and reporting segments will provide better brand recognition and make it easier to evaluate our extraordinary growth and profitability.

We also introduced a series of exciting new product offerings that align with our promise – Payments Made Easy:

These new products enhance our ability to deliver our mid-term objectives to annually grow revenue 10% and adjusted earnings per share 15-20%.

Governance & Board Oversight

We’ve made meaningful progress in 2023, refreshing and diversifying our Board by welcoming Annabelle Bexiga, Rahul Gupta and Gerry Throop. The industry and subject-matter experience they bring will be quite additive to the Company as we continue to grow and improve our competitive position. Our Board of Directors have been deeply involved in our shareholder engagement efforts, and have helped drive responsive enhancements to our practices.

We have an experienced Board of Directors with a diverse set of skills and experience, including leading large, global public companies within our industry. Our directors provide valuable oversight regarding audit, compensation, governance and company strategy.

Your Support

On behalf of our Board of Directors, we sincerely ask that you vote with our recommendations. We appreciate our shareholders’ support and feedback, and we will continue to reach out on a regular basis to gain further perspective.

 

Ronald F. Clarke

Chairman & Chief Executive Officer

Our Strategy

We are executing on a strategy of optimizing assets, leveraging similar selling methods, and bundling and cross-selling value-added solutions. We continue to enhance our solutions to displace inferior payment methods, improve customers’ mobile and digital experiences, and extend utility. We actively market and sell to current and prospective customers leveraging a multi-channel go-to-market approach, which includes comprehensive digital channels, direct sales forces and strategic partner relationships. We supplement our organic growth strategy and sales efforts by pursuing attractive acquisition opportunities, which serve to strengthen our market positions and accelerate growth. We’ve simplified

Our Performance

Corpay has delivered a superior track record of growth, generating compound annual growth rates of 18% in revenue and 20% in adjusted net income per diluted share (or “Adjusted EPS”) since going public in 2010.

Our Board of Directors

In order to oversee our complex, global business, our Board is comprised of experienced individuals who are engaged in their duties and invested in our Company’s success. Our Board recognizes the importance of independence from management and ensures its responsiveness to shareholders by directly connecting directors’ interests with those of our shareholders. Our Board and management have taken a long-term view toward shareholder engagement and recognize that continuous solicitation and consideration of shareholder feedback is critical to driving growth and creating shareholder value.

As a result, we regularly engage with our shareholders throughout the year by multiple means to encourage ongoing, meaningful dialogue.

We encourage you to visit the “Corporate Governance” area of the “Investor Relations” section of our website (https://investor.corpay.com) where you will find detailed information about our corporate governance practices, including our key governance documents listed below:

The reports and other information contained on websites referred to in this proxy statement (other than to the extent specifically referred to herein as required by the rules of the NYSE or the SEC) are not part of this proxy solicitation and are not incorporated by reference into this proxy statement or any other proxy materials.

Forward-Leaning Corporate Governance

In response to our shareholder engagement efforts and recent shareholder votes at our annual meetings, we have taken significant steps to adopt many corporate governance best practices:

Forward-Leaning Compensation Practices

Corpay has also embraced best practices in our compensation programs, which strongly support our pay-for-performance philosophy and culture:

Shareholder Engagement Results

Our 2023 shareholder outreach regarding executive compensation was a continuation of our annual comprehensive shareholder engagement plan. We have taken decisive action in recent years in response to our shareholder outreach initiatives and we believe that our compensation practices address the feedback we received.

Since we mailed our Proxy Statement for the 2023 annual meeting, we contacted our 10 largest shareholders (excluding our CEO), and select others from the next 15 largest shareholders who voted against say-on-pay and/or against certain Directors at the 2023 annual meeting. These shareholders held approximately 64.3% of our common shares (as of December 31, 2023). Of those we attempted to engage, 50% of those shares accepted our invitation and attended video or telephonic meetings. A majority of these

 

Evaluation and Evolution of Our Board

As part of our focus on shareholder value, we regularly evaluate the performance of our Board and its committees and engage in self-evaluation process. We also evaluate the mix of experience, expertise and tenure of our individual directors. Our corporate governance guidelines reflect this approach. We believe our directors’ diverse backgrounds help us to make the most of opportunities and to effectively manage risk. We believe that our efforts have and will continue to result in a board and management focused on delivering exceptional value to our shareholders.

Board Meetings and Committees

The Board held five meetings in 2023. Information regarding the number of meetings held by the Board's five standing committees in 2023 is set forth below. Each director attended at least 75% of all Board and applicable committee meetings

Audit Committee

The audit committee currently consists of Messrs. Jones, Macchia and Throop and is chaired by Mr. Macchia. The audit committee held six meetings in 2023. The Board determined that each member of the audit committee is independent under the NYSE rules and Rule 10A-3 of the Exchange Act, and has determined that Mr. Macchia and Mr. Throop qualify as “audit committee financial experts” under SEC rules.

The audit committee’s primary responsibilities include:

Compensation Committee

The compensation committee currently consists of Messrs. Farrelly, Hagerty and Stull and Mses. Bexiga and Moddelmog and is chaired by Ms. Bexiga. The compensation committee held six meetings in 2023. The Board has determined that each compensation committee member is independent under the NYSE rules for compensation committee members.

The compensation committee’s primary responsibilities include:

The compensation committee may from time to time delegate all or a portion of its duties and responsibilities to a subcommittee of the compensation committee.

Nomination and Governance Committee

The governance committee currently consists of Messrs. Jones, Gupta and Stull and Ms. Moddelmog and is chaired by Ms. Moddelmog. The governance committee held one meeting in 2023.

The governance committee’s primary responsibilities include:

The governance committee may from time to time delegate all or a portion of its duties and responsibilities to a subcommittee.

Executive and Acquisitions Committee

Our executive and acquisitions committee currently consists of Messrs. Clarke, Hagerty, Jones and Sloan and is chaired by Mr. Clarke. The executive and acquisitions committee held no meetings in 2023, as all acquisitions were discussed with the full Board. The executive and acquisitions committee is responsible for addressing important Company matters, including capital expenditures, investments, acquisitions, dispositions and financing activities, that the Chairman of the Board determines should be addressed before the next scheduled meeting of the Board.

Information Technology and Security Committee

Our information technology and security committee consists of Messrs. Farrelly, Macchia and Sloan and Ms. Bexiga, and is chaired by Mr. Farrelly. The information technology and security committee held four meetings in 2023. The information technology and security committee is responsible for providing oversight and leadership for our information technology security and cybersecurity,

Risk Oversight

Our Board, together with its committees, is responsible for overseeing our risk management. The chair of each committee reports to the full Board the significant risks facing the Company, as identified by management, and the measures undertaken by management for controlling and mitigating those risks.

Director Independence

Our corporate governance guidelines provide that a majority of our directors will be independent. Our Board has adopted director independence guidelines to assist in determining each director’s independence. These guidelines are included in our corporate governance guidelines available on our website at https://investor.corpay.com. The guidelines exceed the independence requirements of the NYSE. Under the director independence guidelines and NYSE rules, the Board must annually review each director’s independence and affirmatively determine a director has no relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

The Board has analyzed the independence of each director and determined that, except for our CEO, they each meet the standards of independence under our director independence standards, and applicable NYSE listing rules, including that each member is free of any relationship that would interfere with their individual exercise of independent judgment.

2023 Director Compensation

The non-employee members of our Board receive compensation for serving as directors. Our Board believes equity-based awards are appropriate forms of

Director Qualifications

The qualifications for directors are described in our corporate governance guidelines, which is available on our website.

The Board does not currently apply any minimum qualifications or require that a director have specified qualities or skills in order to be considered for a position as a director. The Board recognizes the value of diversity among its members and the impact it can have on the performance of the Board. In addition to a director’s professional experience that will benefit our business, we seek to have a Board which represents diversity in professional experiences, viewpoints, gender, age, race, ethnicity, sexual orientation, nationality and cultural background.

Our corporate governance guidelines provide that no director should serve on more than four other public company boards, unless the governance committee determines otherwise.

Director Nomination Process

Selection of Director Nominees: Our governance committee is responsible for evaluating candidates for election or appointment to our Board based on the criteria discussed above. The governance committee considers candidates identified by it, other directors, executive officers and shareholders, and, if desired, a third-party search firm. The committee selects nominees to recommend to the Board, which considers and makes the final selection of director nominees and directors to serve on its committees.

In addition, as outlined above, pursuant to the terms of the Cooperation Agreement, in March 2023 we agreed to nominate Mr. Gupta and in August 2023 we agreed to nominate Mr. Throop.

Shareholder Recommendations of Nominees:

Shareholder recommendations must be addressed to:

Corpay, Inc.

Attention: Corporate Secretary

DIRECTOR CANDIDATE RECOMMENDATION

3280 Peachtree Road, Suite 2400

Atlanta, Georgia 30305

Proxy Access Nominations: Our Bylaws establish procedures for nominations by eligible shareholders of candidates for election as directors at an annual meeting and to have those nominees included in our proxy materials. To be timely for consideration at our 2025 annual meeting, a shareholder’s proxy access notice to the corporate secretary regarding a proxy access director nomination must be received no earlier than November 27, 2024, and no later than December 27, 2024. However, in the event that the 2025 annual meeting is called for a date that is not within thirty days of June 6, 2025, notice by the shareholder must be received by no later than the tenth day following the date of the public announcement.

Contacting the Board: Shareholders and other interested parties can contact the Board as a group or the non-management directors as a group as follows:

For the Board as a whole: [email protected]

For the non-management directors:

The Corporate Secretary reviews all written and emailed correspondence received from shareholders and other interested parties and forwards such correspondence periodically to the directors if and as appropriate. Shareholders can submit communications anonymously or by identifying themselves.

Governance Policies

Complete copies of our corporate governance guidelines, committee charters and code of conduct are available on the Corporate Governance section of our website, at https:// investor.corpay.com. In accordance with NYSE rules, we may also make disclosure of the following on our website:

We will provide copies of any of the foregoing information without charge upon written request to:

Corpay, Inc.

Attention: Corporate Secretary

3280 Peachtree Road, Suite 2400

Atlanta, Georgia 30305

On March 28, 2023, we announced the appointment of Tom Panther as our Chief Financial Officer effective May 2, 2023. Ms. Vickery, our Chief Accounting Officer, served as our interim Chief Financial Officer from October 3, 2022 through May 2, 2023. In connection with his appointment, the compensation committee determined that Mr. Panther’s compensation package would include an annual base salary of $400,000 and a target annual incentive award equal to 75% of his base salary. In addition, Mr. Panther received certain equity compensation awards upon his hire, which awards are described below.

Navigating the Opportunities of 2023

Corpay is a leading global payments company that helps businesses spend less by enabling them to better manage their expense-related purchasing and vendor payments processes. Corpay’s smarter payment and spend management solutions are delivered in a variety of ways depending on the needs of the customer. From physical payment cards to software that includes customizable controls and robust payment capabilities, we provide businesses with a Better Way to Pay.

Our unique positioning and focus on performance drove our results in 2023. We realized impressive performance:

*as compared to prior year

We meaningfully improved our positioning in 2023, extending both the product set and customer segments in each of our major businesses. These efforts increase our target sales audience, which positions us to continue our historically consistent organic and non-organic growth, and potentially supports even higher growth due to a larger addressable market. Some highlights from 2023 include:

We are focused on the future, as we continue to capture and drive scale in our corporate payments business, while looking for both organic and inorganic opportunities to supplement our current growth. Today, Corporate Payments segment revenue represents more than 25% of the Company and is growing approximately 20% annually. It is our fastest growing business, and we expect to capture much more business as the transition to newer, improved AP Automation processes gains steam.

Responsiveness to 2023 Say-On-Pay Vote

Our say-on-pay proposal at our 2023 annual meeting of shareholders received greater than 60% approval. As we continue to seek improved feedback from our shareholders, we increased our shareholder outreach efforts throughout 2023. Our engagement process invited discussion with representatives of our executive team and the Board, including our compensation committee Chair. Feedback received was shared regularly with the Board, including the compensation committee, for review and discussion in anticipation of establishing 2024 compensation.

Importantly, the changes to our 2023 compensation practices reflect shareholder feedback received from our 2022 say-on-pay process, some of which was similar to input provided by shareholders from our 2023 say-on-pay process. As such, our remediation efforts in response to the pay program issues raised by shareholders in both 2023 and 2024 are reflected in the table below.

Scope of Our Outreach: Since we mailed our Proxy Statement for the 2023 annual meeting, we contacted our 10 largest shareholders (excluding our CEO), and select others from the next 15 largest shareholders who voted against say-on-pay and/or against certain directors at the 2023 annual meeting. These shareholders held approximately 64.3% of our common shares (as of December 31, 2023). Of those we attempted to engage, 50% of those shares accepted our invitation and attended video or telephonic meetings. A majority of these meetings were attended by the Chair of the compensation committee, and remaining meetings were attended by the Lead Independent Director, Chair of the nomination and governance committee, or Chair of the information technology and security committee. These meetings occurred periodically in 2023. During the meetings, we requested specific feedback on our 2023 say-on-pay vote and any issues shareholders had with our compensation program or our governance practices, and solicited their thoughts on how we might address these issues.

 

2019-2023 CEO Equity Compensation

During the five-year period of 2019-2023, our CEO, Mr. Clarke has been granted two long-term equity compensation awards, which provided Mr. Clarke's entire long-term incentive opportunity covering the grant years of 2019 through 2023. This aggregate grant value was calibrated to offer a competitive overall long-term award opportunity for these five years, generally commensurate with peer practices. Those two grants consisted of:

Mr. Clarke received no long-term equity grants in 2020, 2022 or 2023.

Shareholder Outreach Generally

Our Board and management have taken a long-term view toward shareholder engagement and recognize that

solicitation and consideration of shareholder feedback is critical to driving growth and creating shareholder value. As a result, we regularly engage with our shareholders throughout the year in multiple forms — calls, in-person meetings and shareholder conferences — to encourage ongoing, meaningful dialogue. Most of the calls involved the Chair of the Compensation Committee, but in the event of a scheduling conflict, the meetings were attended by the Lead Independent Director, Chair of the Nomination and Governance Committee, or Chair of the Information Technology and Security Committee. In 2023, after evaluating and discussing the vote results from the 2023 meeting, the Board determined to extend its shareholder outreach. Not only did we offer to engage our top 10 shareholders (excluding the CEO) like prior years, but also expanded the offer to the next 15 largest shareholders who voted against say-on-pay and/or against certain directors at the 2023 annual meeting - over 64% of our common shares (as of December 31, 2023). Of those we attempted to engage, 50% of those shares accepted our invitation.

Forward-Leaning Compensation Practices

Corpay has embraced best practices in our compensation programs, which strongly support our pay-for-performance philosophy and culture:

Our mix of compensation elements is designed to reinforce business and strategic objectives, recognize and reward performance, motivate long-term value creation, and align our NEOs’ interests with those of our shareholders. We generally achieve this through a combination of cash and equity awards.

The Company is responsible for allocating capital in a manner that is in the best interest of its shareholders in line with the stated objective of growing Adjusted EPS between 15%-20% per year over the mid-term. Some portion of this growth is contingent on effective capital allocation in the form of acquisitions and/or share buybacks as a use for our free cash flow.

As part of our existing stock repurchase program, the Company has regularly repurchased shares that it viewed as undervalued, and thus would provide a better return to

Target Mix of Compensation

The compensation committee strives to achieve an appropriate mix between fixed versus variable pay and cash versus equity-based compensation awards in order to meet our compensation objectives. Our compensation committee does not have a rigid policy for allocating compensation between short- and long-term compensation and cash and non-cash compensation. We believe the most important indicator of whether our compensation objectives are being met is our ability to motivate our NEOs to deliver superior shareholder return and retain them to continue their careers with us on a cost-effective basis. For NEOs other than the CEO, our compensation committee generally references cash-based components of compensation below market levels and equity-based components of compensation (based on target levels) at market levels, resulting in total target compensation that is generally below the peer median for our NEOs other than the CEO. For our CEO, the compensation committee references cash-based components below the peer median, and equity-based components above the peer median, resulting in total compensation that is generally at or above the peer median. Although the compensation committee includes this market data and its general understanding of current compensation practices in the market in the overall mix of factors it considers in assessing NEO compensation, it does not target a mathematically precise market position for total compensation or any individual element of compensation.

The ultimate compensation levels reflect the application of these policies to the varying responsibilities of the NEOs. In a typical year, it is expected that the greater the responsibility of the executive and the greater the potential impact of the executive on the Company’s financial performance, the higher the proportion of compensation that can be earned by the executive in the form of performance-based compensation.

Our CEO has the greatest responsibility in managing and driving the performance of our Company. He joined our Company in 2000, and has managed our significant growth through a combination of organic initiatives, product and service innovation and acquisitions of businesses and commercial account portfolios, and has overseen the growth of our revenue from $33.0 million in 2000 to approximately $3.8 billion in 2023.

 

Equity Compensation in Prior Fiscal Years

As previously disclosed, we granted the 2021 CEO Performance Option to Mr. Clarke in September 2021. In connection with the grant of the 2021 CEO Performance Option, Mr. Clarke agreed not to receive any other long-term equity grants in 2021, 2022 or 2023. He did, however, receive an award of restricted stock in connection with his 2023 annual incentive award, as further discussed below.

The 2021 CEO Performance Option is intended to further align Mr. Clarke’s compensation interests with the Company stock price performance interests of the Company’s shareholders, and to help retain Mr. Clarke’s service during the period of time covered by the award. In considering and approving the award, the compensation committee considered the best interests of the Company’s shareholders and a desire to retain Mr. Clarke due to, among other considerations, his over 20-year history of operational excellence, development of a strong management team, and ability to lead the Company’s continued strategic development, transformation and expansion.

The 2021 CEO Performance Option covers 850,000 shares of our common stock at an exercise price of $261.27 per share, which was the fair market value of our common stock on the grant date. However, the option will vest only if we achieve specific stock price hurdles. Achievement of each stock price hurdle requires that our stock price exceed

Base Salary

Base salaries are reviewed annually, taking into account individual responsibilities, individual performance, the experience of the individual, current salary, retention incentives, internal equity and the compensation committee’s

Annual Incentive

The primary objectives of our annual incentive program are to provide an incentive for superior work, to motivate our NEOs toward even higher achievement and business results, to promote retention and to tie our NEOs’ goals to the Company’s performance. We use Company-wide, individual and business unit performance goals in our annual incentive program. Individual or business unit performance goals are tied to the particular area of expertise and responsibilities of the NEO and their performance in attaining those objectives.

In January 2023, the compensation committee determined the target annual incentive payout levels for the NEOs based on a combination of factors, including market practices, each NEO’s role and responsibilities, experience and skills, expected contribution to the Company and

2023 Performance Goals and Results for Cash Portion of Annual Incentive Award

The compensation committee and the CEO worked together to establish meaningful performance goals for the cash portion of the CEO’s annual incentive award at the beginning of the performance period. These goals are intended to align CEO rewards with Company performance. In the event of achievement of maximum results under the applicable performance goals, the CEO’s annual incentive has a maximum potential value equal to 200% of target.

Our CEO makes recommendations regarding individual and/or business unit performance goals, which are reviewed and approved by the compensation committee, for our other NEOs.

In the event of achievement of maximum results under the applicable performance goals, the other NEOs’ annual incentives have a maximum potential value equal to up to 150% of target.

The cash portion of the annual incentive awards could be paid out in amounts below the individual target amounts if actual performance achieved certain thresholds. The awards were designed so that performance below certain thresholds would result in no payout for a given goal.