UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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T-Mobile US, Inc.
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Place: Four Seasons Hotel 99 Union Street Seattle, WA 98101
Date: June 13, 2018
Time: 8:00 a.m. PDT |
Agenda:
∎ Elect 12 director nominees named in the Proxy Statement to the Companys Board of Directors; ∎ Ratify the appointment of PricewaterhouseCoopers LLP as the Companys independent registered public accounting firm for the fiscal year ending December 31, 2018; ∎ Approve an amendment to the Companys 2013 Omnibus Incentive Plan to increase the number of shares of the Companys common stock available for awards thereunder by an additional 18,500,000 shares to a total of 81,775,000 shares; ∎ Vote on two stockholder proposals, if properly presented at the Annual Meeting; and ∎ Consider any other business that is properly brought before the Annual Meeting or any continuation, adjournment or postponement of the Annual Meeting.
Record Date: You can vote your shares if you were a stockholder of record at the close of business on April 17, 2018.
Digital Proxy Statement: You can also check out our digital proxy statement at https://t-mobile.com/Proxy2018.
YOUR VOTE IS VERY IMPORTANT. Please vote as soon as possible by using the internet, by telephone or by signing and returning your proxy card if you received a paper copy of the proxy card by mail.
By Order of the Board of Directors,
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Timotheus Höttges Chairman of the Board of Directors April 26, 2018 |
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 13, 2018
The Proxy Statement and Annual Report to Stockholders are available at https://t-mobile.com/Proxy2018 and https://www.proxyvote.com.
TABLE OF CONTENTS
Proxy Statement Summary
This summary highlights information you will find in this Proxy Statement. As it is only a summary, please review the complete Proxy Statement before you vote.
2018 Annual Meeting Information
Date and Time: Wednesday, June 13, 2018 at 8:00 a.m. (PDT) |
Location: Four Seasons Hotel 99 Union Street Seattle, WA 98101 |
Record Date: April 17, 2018 |
Proxy Mail Date: On or about April 26, 2018 |
How to Vote
By Internet: Visit the website listed on your proxy card |
By Phone: Call the telephone number on your proxy card |
By Mail: Sign, date and return your proxy card in the enclosed envelope
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In Person: Attend the Annual Meeting in Seattle, Washington |
Voting: | Each share of common stock is entitled to one vote for each director nominee and one vote for each of the other proposals to be voted on. | |
Admission: | Admission to the Annual Meeting is limited to stockholders as of the record date. To be admitted to the Annual Meeting, you must present government-issued picture identification and proof of ownership of T-Mobile stock on the record date. This can be any of the following:
∎ Notice of Internet Availability of Proxy Materials ∎ Admission ticket enclosed with the paper copy of the proxy materials ∎ Legal proxy, account statement or other documentation confirming your T-Mobile stock holdings from the broker, bank or other institution that holds your shares |
Annual Meeting Agenda and Vote Recommendations:
Matter |
Board Vote Recommendation |
Page Reference (for more detail) | ||||||
Proposal 1 |
Election of Directors |
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FOR | 13 | ||||
Proposal 2 |
Ratification of the Appointment of PricewaterhouseCoopers LLP as the Companys Independent Registered Public Accounting Firm for Fiscal Year 2018 |
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FOR | 22 | ||||
Proposal 3 |
Approval of an Amendment to the Companys 2013 Omnibus Incentive Plan |
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FOR | 43 | ||||
Proposal 4 |
Stockholder Proposal for Implementation of Proxy Access |
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AGAINST | 58 | ||||
Proposal 5 |
Stockholder Proposal for Limitations on Accelerated Vesting of Equity Awards in the Event of a Change of Control |
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AGAINST | 60 |
In this Proxy Statement, we, our, us, T-Mobile and the Company refer to T-Mobile US, Inc. and the Annual Meeting refers to the 2018 Annual Meeting of Stockholders. We first made this Proxy Statement and form of proxy card available to stockholders on or about April 26, 2018.
PROXY SUMMARY STATEMENT
Good Corporate Governance Practices
Governance is real at T-Mobile. In connection with the business combination with MetroPCS Communications, Inc. completed in 2013 (the Business Combination), T-Mobile became a publicly-traded company with a significant stockholder, Deutsche Telekom AG (Deutsche Telekom). Deutsche Telekom has the right to designate a number of our directors, and as a result, we have stockholder representation on our Board. Directors approach each Board decision with a stockholder mindset that is intellectually independent from management. In addition, our Board has structured our corporate governance program to promote the long-term interest of stockholders, strengthen the Boards and managements accountability and help build public trust in the Company.
Unclassified Board and Annual Election of Directors | Annual Board and Committee Self-Evaluations | |||||
12 Director Nominees | No poison pill | |||||
Separation of Chairman and Chief Executive Officer Roles | Stockholder Right to Call Special Meeting and Act by Written Consent | |||||
Lead Independent Director | Anti-Hedging, Anti-Short Sale and Anti-Pledging Policies | |||||
Independent Chairs of the Audit, Compensation and Nominating and Corporate Governance Committees | Executive Compensation Driven by Pay for Performance | |||||
Regular Executive Sessions of Independent Directors | Stock Ownership Guidelines for Executive Officers and Directors | |||||
Comprehensive Risk Oversight by the Board and its Committees | Clawback Policy to Recapture Incentive Payments |
T-Mobile Had Record Financial Results Across the Board in 2017 and proved that taking care of customers is also good for stockholders
T-Mobile had record financial results in 2017, including service revenues, total revenues, net income, Adjusted EBITDA, net cash from operating activities and free cash flow. We added 5.7 million total net customers in 2017 and captured the majority of the industrys postpaid phone growth for the fourth consecutive year. We ended the year with 72.6 million total customers.
Our customer growth translated into industry-leading revenue and cash flow growth. Service revenue of $30.2 billion for 2017 grew at an industry-leading 8.3% year over year. Net income of $4.5 billion for 2017 grew 211% year over year, net income of $2.3 billion (excluding impact from the Tax Cuts and Jobs Act (the Tax Act) of $2.2 billion) for 2017 grew 62% year over year and Adjusted EBITDA of $11.2 billion grew 5.4% year over year.
As of December 31, 2017, T-Mobile covered 322 million people with 4G LTE. Our stock price increased by 284% from May 1, 2013 (the first day of trading after the Business Combination) through December 29, 2017 and 10.4% during 2017 alone. Looking back three years, our stock price has increased 133% (January 1, 2015 through December 29, 2017).
Adjusted EBITDA is a non-GAAP financial measure. This non-GAAP financial measure should be considered in addition to, but not as a substitute for, the information provided in accordance with U.S. generally accepted accounting principles (GAAP). A reconciliation to the most directly comparable GAAP financial measure is provided in Appendix A to this proxy statement.
2 | T-Mobile 2018 Proxy Statement |
PROXY SUMMARY STATEMENT
Executive Compensation Highlights Paying for Performance
Our executive compensation program is aligned with our business strategy and is designed to attract and retain top talent, reward short-term and long-term business results and exceptional individual performance, and most importantly, maximize stockholder value.
Key Features of Our Executive Compensation Program |
T-Mobile 2018 Proxy Statement | 3 |
Corporate Governance at T-Mobile
Governance Highlights |
Unclassified Board and Annual Election of Directors | Annual Board and Committee Self-Evaluations | |||||
12 Director Nominees | No poison pill | |||||
Separation of Chairman and Chief Executive Officer Roles | Stockholder Right to Call Special Meeting and Act by Written Consent | |||||
Lead Independent Director | Anti-Hedging, Anti-Short Sale and Anti-Pledging Policies | |||||
Independent Chairs of the Audit, Compensation and Nominating and Corporate Governance Committees | Executive Compensation Driven by Pay for Performance | |||||
Regular Executive Sessions of Independent Directors | Stock Ownership Guidelines for Executive Officers and Directors | |||||
Comprehensive Risk Oversight by the Board and its Committees | Clawback Policy to Recapture Incentive Payments |
Key Governance Materials |
Certificate of Incorporation | Charter for Each Board Committee | |||||
Bylaws | Code of Business Conduct | |||||
Corporate Governance Guidelines | Code of Ethics for Senior Financial Officers | |||||
Stockholders Agreement | Whistleblower Protection Policy |
These documents are available on our website at http://investor.t-mobile.com or are listed as exhibits to the Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC).
4 | T-Mobile 2018 Proxy Statement |
CORPORATE GOVERNANCE AT T-MOBILE
ABOUT THE BOARD OF DIRECTORS
T-Mobile 2018 Proxy Statement | 5 |
CORPORATE GOVERNANCE AT T-MOBILE
ANNUAL BOARD AND COMMITTEE EVALUATIONS
The Nominating and Corporate Governance Committee oversees the annual Board and committee self-evaluation process. In 2017, the Committee engaged an outside consultant to coordinate and provide insight on the annual self-evaluation process.
The Board is committed to a comprehensive self-evaluation process to review the Board and each committees overall effectiveness. |
Noted below are the high-level steps of the Board and Committee self-evaluation process.
Board Evaluation Process
HOW TO COMMUNICATE WITH OUR BOARD
You may contact the Chairman of the Board, the Board as a whole, the lead independent director, or any individual director as follows:
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T-Mobile US, Inc. The Board of Directors c/o Corporate Secretary 12920 SE 38th Street Bellevue, Washington 98006 |
After receipt, communications will generally be forwarded to the Chairman of the Board, the whole Board, the lead independent director or specific directors as the Corporate Secretary deems appropriate based on the content of, and the matters raised in, the communication. Communications that are unrelated to the duties and responsibilities of the Board or are unduly hostile, threatening, potentially illegal or similarly unsuitable will not be forwarded. Responses to letters and any communications that are excluded are maintained by the Company and are available to any director upon request.
6 | T-Mobile 2018 Proxy Statement |
CORPORATE GOVERNANCE AT T-MOBILE
BOARD COMMITTEES AND RELATED MATTERS
Our Board has four standing committees: Audit, Compensation, Executive, and Nominating and Corporate Governance. The Board makes committee and committee chair assignments annually at its meeting immediately following the Annual Meeting of Stockholders, although further changes may be made from time to time as deemed appropriate by the Board.
Each committee has a Board-approved charter, which is reviewed annually by the respective committee. Recommended changes, if any, are submitted to the Board for approval. Each committee may retain and compensate consultants or other advisors as necessary for it to carry out its duties, without consulting with or obtaining the approval of the Board or the Company. A copy of the charter for each standing committee can be found on the Investor Relations section of our website at http://investor.t-mobile.com by selecting Governance Documents under the Corporate Governance tab.
Audit Committee
Chair: Srikant M. Datar
Additional Members
W. Michael Barnes Kelvin R. Westbrook
Meetings Held in 2017: 15 |
As more fully described in its charter, the primary responsibilities of the Audit Committee are to:
∎ Assist the Board in oversight of the integrity of the Companys financial statements and the financial reporting process, disclosure controls and procedures and internal audit functions ∎ Directly appoint, compensate and retain our independent auditor, including the evaluation of the independent auditors qualifications, performance and independence ∎ Pre-approve the retention of the independent auditor for all audit and such non-audit services as the independent auditor is permitted to provide the Company and approve the fees for such services ∎ Discuss the Companys risk assessment and risk management policies, as well as annually review the implementation and effectiveness of our compliance and ethics programs ∎ Develop and oversee compliance with the Code of Ethics for Senior Financial Officers and the Code of Business Conduct for all employees, officers and directors ∎ Establish procedures for the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters ∎ Review and approve all related person transactions pursuant to the Companys Related Person Transaction Policy
Our Board has determined that each member of the Audit Committee meets all of the requirements for audit committee members under applicable NASDAQ rules and is an audit committee financial expert as defined in applicable SEC rules.
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T-Mobile 2018 Proxy Statement | 7 |
CORPORATE GOVERNANCE AT T-MOBILE
Compensation Committee
Chair: Teresa Taylor
Additional Members
W. Michael Barnes Thomas Dannenfeldt Lawrence H. Guffey Raphael Kübler
Meetings Held in 2017: 5
Section 16 Subcommittee:
Teresa A. Taylor Lawrence H. Guffey
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As more fully described in its charter, the primary responsibilities of the Compensation Committee are to:
∎ Review and approve the Companys executive compensation philosophy and its programs, policies and practices ∎ Review and approve corporate goals and objectives relevant to the Chief Executive Officers compensation, evaluate the CEOs performance in light of those goals and objectives and determine and approve the CEOs compensation ∎ Review and approve compensation for the Companys Executive Officers ∎ Oversee the development of succession plans for the Chief Executive Officer and senior management ∎ Assist the Board in reviewing the results of any shareholder advisory votes, or responding to other shareholder communications, that relate to Executive Officer compensation, and consider whether to make or recommend adjustments to the Companys policies and practices as a result of such votes or communications ∎ Review a report from management regarding potential material risks, if any, created by the Companys compensation policies and practices ∎ The Section 16 Subcommittee has sole authority to approve all awards granted to the Companys officers who are subject to Section 16 of the Securities Exchange Act of 1934, as amended (the Exchange Act) (Section 16 officers) that are intended to qualify as performance-based compensation for purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended (the Code)
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8 | T-Mobile 2018 Proxy Statement |
CORPORATE GOVERNANCE AT T-MOBILE
Executive Committee
Chair: Timotheus Höttges
Additional Members
Thomas Dannenfeldt Lawrence H. Guffey Bruno Jacobfeuerborn Raphael Kübler Thorsten Langheim John J. Legere
Meetings Held in 2017: 0*
*Per the Executive Committees charter, the Committee meets as often as it determines necessary
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As more fully described in its charter, the primary responsibilities of the Executive Committee are to:
∎ Monitor the Companys operating performance relative to its operating objectives, strategy, plans and actions ∎ Provide management with feedback regarding the Companys operating objectives, strategy, plans, and actions, as well as the Companys operating performance ∎ Consider strategic operating goals, opportunities and risks ∎ Recommend changes to the Companys operating objectives, strategy, plans, and actions for consideration by the Board, as appropriate
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Nominating and Corporate Governance Committee
Chair: Kelvin R. Westbrook
Additional Members
Lawrence H. Guffey Thorsten Langheim
Meetings Held in 2017: 6 |
As more fully described in its charter, the primary responsibilities of the Nominating and Corporate Governance Committee are to:
∎ Subject to the terms of the Companys certificate of incorporation and the Stockholders Agreement, review, approve and recommend for Board consideration director candidates based on the director selection guidelines then in effect, and advise the Board with regard to the nomination or appointment of such director candidates ∎ Periodically review and make recommendations to the Board regarding the appropriate size, role and function of the Board ∎ Develop and oversee a process for an annual evaluation of the Board and its committees ∎ Monitor the process for preparing agendas for, organizing and running Board meetings (including the occurrence of regular executive sessions) in coordination with the Chairman of the Board and Chief Executive Officer ∎ Recommend to the Board, as appropriate, the number, type, functions, and structure of committees of the Board, and the chairperson of each such committee ∎ Periodically review the Companys director orientation program and recommend changes, as appropriate ∎ Monitor, plan and support continuing education activities of the directors ∎ Develop, update as necessary and recommend to the Board corporate governance principles and policies
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T-Mobile 2018 Proxy Statement | 9 |
CORPORATE GOVERNANCE AT T-MOBILE
BOARD RISK OVERSIGHT
10 | T-Mobile 2018 Proxy Statement |
CORPORATE GOVERNANCE AT T-MOBILE
DIRECTOR COMPENSATION
Elements of Non-Employee Director Compensation |
Amount ($) | |||
Annual cash retainer |
120,000 | |||
Additional annual cash retainer for: |
||||
Lead Independent Director |
35,000 | |||
Audit Committee Chair |
50,000 | |||
Compensation Committee Chair |
25,000 | |||
Chair of Independent Director Committee |
25,000 | |||
Nominating and Corporate Governance Committee Chair |
15,000 | |||
Additional Retainer for Audit Committee Members |
15,000 | |||
Independent Committee Member Annual Retainer |
50,000 | |||
Annual award of Restricted Stock Units |
195,000 | |||
Additional cash amounts for each Board and committee meeting in excess of ten meetings per year: |
||||
In person |
2,000 | |||
By telephone |
1,000 |
T-Mobile 2018 Proxy Statement | 11 |
CORPORATE GOVERNANCE AT T-MOBILE
2017 Non-Employee Director Compensation Table
During fiscal year 2017, the Companys non-employee directors received the following compensation for their services:
Name |
Fees Earned or Paid in Cash (1) ($) |
Stock Awards (2) ($) |
All Other Compensation (3) ($) |
Total ($) |
||||||||||||
W. Michael Barnes |
241,598 | 195,038 | 35,332 | 471,969 | ||||||||||||
Srikant M. Datar |
272,000 | 195,038 | 4,533 | 471,571 | ||||||||||||
Lawrence H. Guffey |
212,000 | 195,038 | 2,355 | 409,393 | ||||||||||||
Teresa A. Taylor |
287,371 | 195,038 | 18,057 | 500,467 | ||||||||||||
Kelvin R. Westbrook |
260,129 | 195,038 | 24,413 | 479,580 |
(1) | Includes fees earned as an Independent Committee member as described above under Elements of Non-Employee Director Compensation. |
(2) | The value of stock awards is determined using the aggregate grant date fair value computed in accordance with FASB Accounting Standards Codification Topic 718, CompensationStock Compensation, or ASC 718, excluding the effect of any estimated forfeitures. These amounts reflect the Companys accounting expense and do not correspond to the actual value that will be realized by the directors. See Note 1 to the Consolidated Financial Statements included in the Companys Annual Report on Form 10-K for the year ended December 31, 2017 for a summary of the assumptions we apply in calculating these amounts. As of December 31, 2017, each director held 3,047 unvested time-based RSUs. |
(3) | Includes (i) phone perquisites under the Board of Directors Phone Perquisite Program, (ii) personal and spousal travel expenses in connection with a Board meeting and (iii) reimbursement of taxes associated with the personal and spousal travel expenses. |
DIRECTOR NOMINATION, SELECTION AND QUALIFICATIONS
12 | T-Mobile 2018 Proxy Statement |
Proposal 1 - Election of Directors
2018 Director Nominees
The Board has nominated 12 directors for election at the Annual Meeting to serve as directors for terms that would end at the 2019 Annual Meeting of Stockholders. W. Michael Barnes has not been nominated for re-election and his Board service will end on the date of the Annual Meeting. The Board would like to recognize Mr. Barnes for his service and his immense contributions as a member of the Board over the last 14 years, and to wish him well in his retirement. The Board has nominated as a new director for election, Olaf Swantee. If elected, Mr. Swantees term will begin on June 13, 2018. Other than Messrs. Sievert and Swantee, all nominees were elected at the 2017 Annual Meeting of Stockholders.
Each nominee was nominated by the Board on the recommendation of the Nominating and Corporate Governance Committee. The Board has found each nominee to be qualified based on his or her qualifications, experience, attributes, skills and whether he or she meets the applicable independence standards. Each of the nominees has consented to stand for election and we do not anticipate any candidate will be unavailable to serve. In the event that any of the nominees should be unavailable for election as a result of an unexpected occurrence, shares may be voted for the election of such substitute nominee as the Board may nominate. In the alternative, if a vacancy remains, the Board may fill such vacancy at a later date or reduce the size of the Board, subject to certain requirements in our certificate of incorporation. The Board knows of no reason why any of the nominees would be unavailable or unable to serve.
Messrs. Dannenfeldt, Höttges, Jacobfeuerborn, Kübler, Langheim, Swantee and Westbrook and Ms. Taylor were designated for nomination by Deutsche Telekom pursuant to its rights under our certificate of incorporation and the Stockholders Agreement.
Required Vote
Under our bylaws, directors are elected by a plurality of the votes cast by stockholders entitled to vote on the election of directors at the Annual Meeting. Shares represented by executed proxies received by the Company will be voted, unless otherwise marked withheld, FOR the election of each of the nominees.
Our Board of Directors recommends a vote FOR the election to the Board of each of the nominees listed below |
Director Since: 2013
Age: 51
Board Committees: ∎ Compensation ∎ Executive |
Thomas Dannenfeldt Chief Financial Officer of Deutsche Telekom
Biography:
Mr. Dannenfeldt has served as the Chief Financial Officer of Deutsche Telekom, our majority stockholder and a leading integrated telecommunications company, since January 2014.
He was Finance Director of Telekom Deutschland from April 2010 to December 2013. From July 2009 to April 2010, he was the CFO of T-Mobile Deutschland. From January 2010 to April 2010, he was also responsible for the fixed line part of Deutsche Telekom as a member of the T-Home Board of Management. Mr. Dannenfeldt started his career at Deutsche Telekom in 1992 and has gained more than 20 years of experience in various leadership roles in sales, marketing and finance in the national and international mobile and fixed line telecommunications business.
He also served on the Board of Directors of Virgin Mobile in the UK in 2003 and 2004, as well as the Chairman of the Board of Directors of EE Limited in 2014 and 2015.
Qualifications and Skills Supporting Election to the Board:
∎ Expertise in global telecommunications industry ∎ Expertise in strategy, business and finance ∎ Experience in accounting and internal controls
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T-Mobile 2018 Proxy Statement | 13 |
PROPOSAL 1 - ELECTION OF DIRECTORS
Director Since: 2013
Age: 64
Other Public Company Boards: ∎ Novartis AG ∎ ICF International Inc. ∎ Syryker Corporation ∎ HCL
Technologies
Board Committees: ∎ Audit (Chair) |
Srikant M Datar Arthur Lowes Dickinson Professor at the Graduate School of Business Administration at Harvard University
Biography:
Mr. Datar is the Arthur Lowes Dickinson Professor at the Graduate School of Business Administration at Harvard University. Mr. Datar is a Chartered Accountant and planner in industry, and has been a professor of accounting and business administration at Harvard since July 1996; he previously served as a professor at Stanford University and Carnegie Mellon University. Mr. Datar received gold medals upon his graduation from the Indian Institute of Management, Ahmedabad, and the Institute of Cost and Works Accountants of India.
Mr. Datar received a Masters degree in Statistics and Economics and a Ph.D. in Business from Stanford University.
Qualifications and Skills Supporting Election to the Board:
∎ Expertise in accounting, governance and risk management ∎ Public company director and committee experience ∎ Academic and commercial perspective on complex issues |
Director Since: 2013
Age: 50
Board Committees: ∎ Compensation ∎ Executive ∎ Nominating and Corporate Governance |
Lawrence H. Guffey Chief Executive Officer of LG Capital Investors LLC
Biography:
Mr. Guffey is Chief Executive Officer of LG Capital Investors LLC, a single-family investment office formed in 2014. From 1991 to 2013, Mr. Guffey was with The Blackstone Group, an asset management and financial services company, most recently serving as Senior Managing Director (Partner) in the Private Equity Group. Mr. Guffey led many of The Blackstone Groups media and communications investment activities and managed Blackstone Communications Advisors. Mr. Guffey was a member of the Supervisory Board at Deutsche Telekom, our majority stockholder, from June 2006 until October 2013. He was a Director of New Skies Satellites Holdings Ltd. from January 2005 to December 2007, Axtel SA de CV since October 2000, FiberNet L.L.C. from 2001 until 2003, iPCS Inc. from August 2000 to September 2002, PAETEC Holding Corp. from February 2000 to 2002, and Commnet Cellular Inc. from February 1998 to December 2001. Mr. Guffey also served as a Director of TDC A/S from February 2006 to March 2013.
He holds a Bachelor of Arts magna cum laude degree from Rice University, where he was elected to Phi Beta Kappa.
Qualifications and Skills Supporting Election to the Board:
∎ Core financial and business skills ∎ Experience overseeing investments in media and communications industries ∎ Public company director and committee experience
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PROPOSAL 1 - ELECTION OF DIRECTORS
Director Since: 2013
Age: 55
Other Public Company Boards: ∎ Henkel AG & Co. KGaA ∎ BT plc
Board Committees: ∎ Executive (Chair)
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Timotheus Höttges Chief Executive Officer of Deutsche Telekom
Biography:
Since January 2014, Mr. Höttges has served as Chief Executive Officer of Deutsche Telekom, our majority stockholder and a leading integrated telecommunications company. From March 2009 to December 2013, he served as Deutsche Telekoms Chief Financial Officer and a member of the Board of Management. From December 2006 to March 2009, he was a member of the Board of Management responsible for the T-Home Unit (fixed network and broadband business, as well as integrated sales and service in Germany). From January 2003 to December 2006, Mr. Höttges headed European operations as a member of the Board of Management of T-Mobile International.
Mr. Höttges studied Business Administration at the University of Cologne.
Qualifications and Skills Supporting Election to the Board:
∎ Chief executive officer of major global communications company ∎ Core finance, business and leadership skills
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Director Since: 2014
Age: 57
Board Committees: ∎ Executive |
Bruno Jacobfeuerborn Chief Executive Officer of DFMG Deutsche Funkturm GmbH and Chief Executive Officer of Comfortcharge GmbH
Biography:
Mr. Jacobfeuerborn has been Chief Executive Officer of DFMG Deutsche Funkturm GmbH since January 2017 and Chief Executive Officer of Comfortcharge GmbH since January 2018. Previously, he served as the Chief Technology Officer (CTO) of Deutsche Telekom AG from February 2012 to December 2017. Deutsche Telekom AG is our majority stockholder and a leading integrated telecommunications company. He also served as the Director of Technology Telekom Deutschland GmbH from April 2010 to December 2016. Prior to that, Mr. Jacobfeuerborn was Director of Technology of T-Mobile Deutschland and T-Home in Germany from July 2009 to March 2010. In this double role, he was responsible for the technology business (both mobile and fixed network) in Germany. From April 2007 to July 2009, he was Managing Director of Technology, IT and Procurement at Polska Telefonica Cyfrowa. Mr. Jacobfeuerborn joined what is now Deutsche Telekom AG in 1989 and has held several positions with increasing responsibility within the group.
Qualifications and Skills Supporting Election to the Board:
∎ Expertise in global telecommunications industry ∎ Wireless network and technology expertise ∎ Core finance, business and leadership skills
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T-Mobile 2018 Proxy Statement | 15 |
PROPOSAL 1 - ELECTION OF DIRECTORS
Director Since: 2013
Age: 55
Other Public Company Boards: ∎ Hellenic Telecommunications Organization
Board Committees: ∎ Compensation ∎ Executive
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Raphael Kübler Senior Vice President of the Corporate Operating Office of Deutsche Telekom
Biography:
In January 2014, Mr. Kübler assumed the position of Senior Vice President of the Corporate Operating Office of Deutsche Telekom, our majority stockholder and a leading integrated telecommunications company, and reports directly to the Chief Executive Officer of Deutsche Telekom. From July 2009 to December 2013, Mr. Kübler served as Senior Vice President Group Controlling at Deutsche Telekom. In this position, he was responsible for the financial planning, analysis and steering of the overall Deutsche Telekom Group as well as the financial management of central headquarters and shared services. From November 2003 to June 2009, Mr. Kübler served as Chief Financial Officer of T-Mobile Deutschland GmbH, the mobile operations of Deutsche Telekom in Germany now known as Telekom Deutschland GmbH (a wholly-owned subsidiary of Deutsche Telekom).
Mr. Kübler studied Business Administration at H.E.C. in Paris and the Universities of Bonn and Cologne. He holds a doctoral degree from the University of Cologne.
Qualifications and Skills Supporting Election to the Board:
∎ Expertise in global telecommunications industry ∎ Core business, management and leadership skills ∎ Complex financial management experience
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Director Since: 2013
Age: 52
Board Committees: ∎ Executive ∎ Nominating and Corporate Governance |
Thorsten Langheim Executive Vice President, Group Corporate Development of Deutsche Telekom
Biography:
Mr. Langheim has served as Executive Vice President Group Corporate Development of Deutsche Telekom, our majority stockholder and a leading integrated telecommunications company since July 2016. In his current role, he manages Deutsche Telekoms Corporate Development, Investment Strategy and Group M&A activities. Mr. Langheim has also served as the Chairman and Co-founder of Deutsche Telekom Capital Partners, managing the venture capital and private equity activities of Deutsche Telekom since June 2015. From 2009 to June 2016, he served as Senior Vice President of Group Development and M&A. Prior to his roles at Deutsche Telekom, Mr. Langheim was Managing Director at the Private Equity Group of The Blackstone Group, an asset management and financial services company, from May 2004 to June 2009, primarily focusing on private equity investments in Germany. Prior to that, Mr. Langheim was the Vice President of European M&A at J.P. Morgan in London and Assistant Director at WestLB in Düsseldorf between 1995 and 2004. Mr. Langheim is a member of the Supervisory Board of T-Systems and Deutsche Sporthilfe.
Mr. Langheim holds a Master of Science degree in International Securities, Investment and Banking from the ISMA Centre for Education and Research at the University of Reading. Mr. Langheim holds a bachelors degree in European Finance and Accounting from the University of Bremen (Germany) and Leeds Business School (United Kingdom).
Qualifications and Skills Supporting Election to the Board:
∎ Expertise in global telecommunications industry ∎ Experience overseeing telecommunications and technology investments ∎ Corporate strategy and M&A experience
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16 | T-Mobile 2018 Proxy Statement |
PROPOSAL 1 - ELECTION OF DIRECTORS
Director Since: 2013
Age: 59
Board Committees: ∎ Executive
|
John J. Legere President and Chief Executive Officer of T-Mobile US, Inc.
Biography:
Mr. Legere joined T-Mobile USA in September 2012 as President and Chief Executive Officer and became our President and Chief Executive Officer on April 30, 2013 upon the consummation of the Business Combination. Mr. Legere has over 37 years experience in the U.S. and global telecommunications and technology industries. Prior to joining T-Mobile USA, Mr. Legere served as Chief Executive Officer of Global Crossing Limited, a telecommunications company, from October 2001 to October 2011. Before joining Global Crossing, he served as Chief Executive Officer of Asia Global Crossing; as president of Dell Computer Corporations operations in Europe, the Middle East, and Africa; as President, Asia-Pacific for Dell; as president of AT&T Asia Pacific; as head of AT&Ts outsourcing program and as head of AT&T global strategy and business development. Mr. Legere serves on the CTIA Board of Directors.
Mr. Legere received a bachelors degree in Business Administration from the University of Massachusetts, a Master of Science degree as an Alfred P. Sloan Fellow at the Massachusetts Institute of Technology, and a Master of Business Administration degree from Fairleigh Dickinson University and he completed Harvard Business Schools Program for Management Development.
Qualifications and Skills Supporting Election to the Board:
∎ Chief Executive Officer of T-Mobile ∎ Expertise in telecommunications and technology industries
|
Director Since: 2018
Age: 48
Other Public Company Boards: ∎ Shaw Communications |
G. Michael (Mike) Sievert Chief Operating Officer of T-Mobile US, Inc.
Biography:
Mr. Sievert serves as our Chief Operating Officer. Mr. Sievert is responsible for guiding all customer-facing operations across the business, including marketing, product development, retail management, sales and customer care for all of our direct and indirect channels and each of our brands. Mr. Sievert served as our Executive Vice President and Chief Marketing Officer from April 2013 to February 2015 and from November 2012 to April 2013, Mr. Sievert was Executive Vice President and Chief Marketing Officer of T-Mobile USA.
Prior to joining T-Mobile USA, Mr. Sievert was an entrepreneur and investor involved with several Seattle-area start-up companies. From April 2009 to June 2011, he was Chief Commercial Officer at Clearwire Corporation, a broadband communications provider, responsible for all customer-facing operations. From February 2008 to January 2009, Mr. Sievert was co-founder and Chief Executive Officer of Switchbox Labs, Inc., a consumer technologies developer, leading up to its sale to Lenovo. He also served from January 2005 to February 2008 as Corporate Vice President of the worldwide Windows group at Microsoft Corporation, responsible for global product management and P&L performance for that unit. Prior to Microsoft, he served as Executive Vice President and Chief Marketing Officer at AT&T Wireless for three years. He also served as Chief Sales and Marketing Officer at E*TRADE Financial and began his career with management positions at Procter & Gamble and IBM. He has served on the boards of Rogers Wireless Communications in Canada, Switch & Data Corporation, and a number of technology start-ups.
Mr. Sievert received a bachelors degree in Economics from the Wharton School at the University of Pennsylvania.
Qualifications and Skills Supporting Election to the Board:
∎ Chief Operating Officer of T-Mobile ∎ Expertise in telecommunications and technology industries
|
|||
T-Mobile 2018 Proxy Statement | 17 |
PROPOSAL 1 - ELECTION OF DIRECTORS
Nominee
Age: 52
Other Public Company Boards: ∎ Telia Company AB ∎ Legal & General Group PLC (2014 to 2016)
|
Olaf Swantee Chief Executive Officer of Sunrise Communications Group AG
Biography:
Since May 2016, Mr. Swantee has served as Chief Executive Officer of Sunrise Communications Group AG, a private Swiss telecommunications provider. From 2011 to May 2016, he served as Chief Executive Officer of EE Limited, a British mobile network and telecommunications provider. From 2007 to 2011, Mr. Swantee held executive positions at Orange-France Telecom, first as Executive Vice President Europe and Mobile WW and then as Executive Vice President Europe and Purchasing WW, while also serving as a member of the global management committee. He held various senior positions from 2002 to 2007 at Hewlett-Packard (Switzerland) LLC.
Mr. Swantee received a Master of Business Administration degree from the European School of Management in Paris, France.
Qualifications and Skills Supporting Election to the Board:
∎ Expertise in global telecommunications and technology industries ∎ Chief executive officer of major global communication companies ∎ Public company director and committee experience
|
Director Since: 2013
Age: 54
Lead Independent Director
Other Public Company Boards: ∎ First Interstate BancSystem, Inc. ∎ Black Hills Corporation
Board Committees: ∎ Compensation (Chair) |
Teresa A. Taylor Chief Executive Officer of Blue Valley Advisors, LLC
Biography:
Since April 2011, Ms. Taylor has served as Chief Executive Officer of Blue Valley Advisors, LLC, an advisory firm. Ms. Taylor served as Chief Operating Officer of Qwest Communications, Inc., a telecommunications carrier, from August 2009 to April 2011. She served as Qwests Executive Vice President, Business Markets Group, from January 2008 to April 2009 and served as its Executive Vice President and Chief Administrative Officer from December 2005 to January 2008. Ms. Taylor served in various positions with Qwest and the former US West beginning in 1987. During her 24-year tenure with Qwest and US West, she held various leadership positions and was responsible for strategic planning and execution, sales, marketing, product, network, information technology, human resources and corporate communications.
Ms. Taylor received a Bachelor of Science degree from the University of Wisconsin-LaCrosse.
Qualifications and Skills Supporting Election to the Board:
∎ Expertise in technology, media and telecommunications industries ∎ Expertise in strategic planning and execution, technology development, human resources, labor relations and corporate communications ∎ Public company director and committee experience
|
|||
18 | T-Mobile 2018 Proxy Statement |
PROPOSAL 1 - ELECTION OF DIRECTORS
Director Since: 2013
Age: 62
Other Public Company Boards: ∎ Archer Daniels Midland Company ∎ Stifel Financial Corp. (not standing for re-election at its 2018 annual meeting of stockholders) ∎ Camden Property Trust ∎ The Mosaic Company
Board Committees: ∎ Audit ∎ Nominating and Corporate Governance Committee (Chair) |
Kelvin R. Westbrook President and Chief Executive Officer of KRW Advisors, LLC
Biography:
Mr. Westbrook is President and Chief Executive Officer of KRW Advisors, LLC, a consulting and advisory firm, a position he has held since October 2007. Mr. Westbrook also served as Chairman and Chief Strategic Officer of Millennium Digital Media Systems, L.L.C. (MDM), a broadband services company that later changed its name to Broadstripe LLC, from September 2006 until October 2007. Mr. Westbrook was also President and Chief Executive Officer of MDM from May 1997 until October 2006. Broadstripe LLC (formerly MDM) and certain of its affiliates filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in January 2009, approximately 15 months after Mr. Westbrook resigned.
Mr. Westbrook received an undergraduate degree in Business Administration from the University of Washington and a Juris Doctor degree from Harvard Law School.
Qualifications and Skills Supporting Election to the Board:
∎ Expertise in the telecommunications industry ∎ Core legal, media, marketing and risk analysis skills ∎ Public company director and committee experience
|
T-Mobile 2018 Proxy Statement | 19 |
Executive Officers
The following sets forth information regarding the executive officers of the Company. Biographical information pertaining to Messrs. Legere and Sievert, who are both executive officers and directors of the Company, can be found in the Section entitled Proposal 1Election of Directors.
Name |
Age | Position | ||||
John J. Legere |
59 | President and Chief Executive Officer | ||||
G. Michael Sievert |
48 | Chief Operating Officer | ||||
David R. Carey |
64 | Executive Vice President, Corporate Services | ||||
J. Braxton Carter |
59 | Executive Vice President and Chief Financial Officer | ||||
Peter A. Ewens |
55 | Executive Vice President, Corporate Strategy | ||||
Thomas C. Keys |
59 | President, MetroPCS | ||||
David A. Miller |
57 | Executive Vice President, General Counsel and Secretary | ||||
Neville R. Ray |
55 | Executive Vice President and Chief Technology Officer | ||||
Elizabeth A. McAuliffe |
55 | Executive Vice President, Human Resources |
20 | T-Mobile 2018 Proxy Statement |
EXECUTIVE OFFICERS
T-Mobile 2018 Proxy Statement | 21 |
Proposal 2 - Ratification of the Appointment of PricewaterhouseCoopers LLP as the Companys Independent Registered Public Accounting Firm for Fiscal Year 2018
22 | T-Mobile 2018 Proxy Statement |
PROPOSAL 2 - RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS THE COMPANYS
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL YEAR 2018
T-Mobile 2018 Proxy Statement | 23 |
Executive Compensation
COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis (CD&A) describes our 2017 executive compensation program for the following executive officers (collectively, the Named Executive Officers): | ||||||||
∎ John J. Legere |
∎ J. Braxton Carter |
∎ G. Michael Sievert |
∎ Neville R. Ray |
∎ Thomas C. Keys | ||||
President and Chief Executive Officer |
Executive Vice President and Chief Financial Officer
|
Chief Operating Officer |
Executive Vice President and Chief Technology Officer |
President, MetroPCS |
T-Mobile Had Record Financial Results Across the Board in 2017 and Proved that Taking Care of Customers is Also Good for Stockholders
T-Mobile had record financial results in 2017, including service revenues, total revenues, net income, Adjusted EBITDA, net cash from operating activities and free cash flow. We added 5.7 million total net customers in 2017 and captured the majority of the industrys postpaid phone growth for the fourth consecutive year. We ended the year with 72.6 million total customers.
Our customer growth translated into industry-leading revenue and cash flow growth. Service revenue of $30.2 billion for 2017 grew at an industry-leading 8.3% year over year. Net income of $4.5 billion for 2017 grew 211% year over year, net income of $2.3 billion (excluding impact from the Tax Cuts and Jobs Act of $2.2 billion) for 2017 grew 62% year over year and Adjusted EBITDA of $11.2 billion grew 5.4% year over year.
As of December 31, 2017, T-Mobile covered 322 million people with 4G LTE. Our stock price increased by 284% from May 1, 2013 (the first day of trading after the Business Combination) through December 29, 2017 and 10.4% during 2017 alone. Looking back three years, our stock price has increased 133% (January 1, 2015 through December 29, 2017).
Adjusted EBITDA is a non-GAAP financial measure. This non-GAAP financial measure should be considered in addition to, but not as a substitute for, the information provided in accordance with GAAP. A reconciliation to the most directly comparable GAAP financial measure is provided in Appendix A to this proxy statement.
Our executive compensation program emphasizes pay for performance. As a result, our 2017 Named Executive Officer compensation reflects T-Mobiles strong 2017 operational and financial performance.
24 | T-Mobile 2018 Proxy Statement |
EXECUTIVE COMPENSATION
Executive Compensation Program
Our executive compensation program is aligned with our business strategy and is designed to attract and retain top talent, reward short-term and long-term business results and exceptional performance, and most importantly, maximize stockholder value. Our program is competitive in the marketplace and highly incentive-based, with Company performance determining a significant portion of total compensation.
Key Features of Our Executive Compensation Program |
GOALS OF COMPENSATION PROGRAM
WHAT WE PAY AND WHY: GOALS AND ELEMENTS OF COMPENSATION
Emphasis on pay for performance |
Attract, retain and motivate talented and experienced executives within the highly competitive and dynamic wireless communications industry
|
Recognize and reward executives whose skill and performance are critical to our success |
Align interests of our executives with our stockholders |
Encourage appropriate risk taking |
ELEMENTS OF TOTAL DIRECT COMPENSATION
SUMMARY OF AVERAGE TARGET NAMED EXECUTIVE OFFICER COMPENSATION AS OF DECEMBER 31, 2017
T-Mobile 2018 Proxy Statement | 25 |
EXECUTIVE COMPENSATION
To promote a performance-based culture that further aligns the interests of management and stockholders, in 2017 the executive compensation program focused extensively on variable, performance-based compensation. As illustrated in the charts below, the substantial majority of our Chief Executive Officers and other Named Executive Officers actual total compensation as reported in the 2017 Summary Compensation Table was in the form of variable compensation (short-term and long-term).
26 | T-Mobile 2018 Proxy Statement |
EXECUTIVE COMPENSATION
Officer |
Base Salary ($) |
Target STIP Percent (1) |
Target STIP Value ($) |
Total Target Cash ($) |
Target LTIP Percent (2) |
Target LTIP Value ($) |
Target Total Direct Compensation ($) |
|||||||||||||||||||||
John J. Legere (3) |
1,666,667 | | 3,333,333 | 5,000,000 | | 15,000,000 | 20,000,000 | |||||||||||||||||||||
J. Braxton Carter |
850,000 | 150 | % | 1,275,000 | 2,125,000 | 250 | % | 5,312,500 | 7,437,500 | |||||||||||||||||||
G. Michael Sievert |
950,000 | 200 | % | 1,900,000 | 2,850,000 | 250 | % | 7,125,000 | 9,975,000 | |||||||||||||||||||
Neville R. Ray |
800,000 | 150 | % | 1,200,000 | 2,000,000 | 250 | % | 5,000,000 | 7,000,000 | |||||||||||||||||||
Thomas C. Keys |
750,000 | 125 | % | 937,500 | 1,687,500 | 250 | % | 4,218,750 | 5,906,250 |
(1) | Target STIP Percent as a percent of base salary. |
(2) | Target LTIP Percent as a percent of total target cash. |
(3) | Target STIP value and LTIP value for Mr. Legere are as specified in his employment agreement. |
T-Mobile 2018 Proxy Statement | 27 |
EXECUTIVE COMPENSATION
These measures were aligned with the operational objectives of the Companys business. The minimum threshold performance level for at least one of the performance metrics was required to be attained in order for the executives to receive any payment under the 2017 STIP. If none of the minimum performance thresholds had been achieved during 2017, no awards would have been paid.
Metric |
Weight | Minimum (in millions) |
Target (in millions) |
Maximum (in millions) |
Actual (in millions) |
|||||||||||||||
Total Service Revenue |
30% | $ | 28,032 | $ | 29,507 | $ | 30,244 | $ | 30,160 | |||||||||||
Branded Net Customer Additions |
20% | 1.470 | 3.674 | 5.139 | 4.475 | |||||||||||||||
Adjusted EBITDA |
20% | $ | 9,470 | $ | 10,294 | $ | 10,843 | $ | 11,213 | |||||||||||
Operating Free Cash Flow |
30% | $ | 3,409 | $ | 4,500 | $ | 4,936 | $ | 4,677 |
The Company performed above target levels with respect to all four performance metrics in 2017. Overall performance under the 2017 STIP, determined based on actual performance for each performance metric and the relative weighting of each such metric (as disclosed in the table above), was achieved at 170% of target. The following table shows the payouts under the 2017 STIP for each Named Executive Officer based on these performance results.
Officer |
Base Earnings (1) ($) |
Target 2017 STIP Percent (as a % of Base Earnings) |
Target 2017 STIP Value ($) |
Company Attainment |
Total 2017 STIP Payout Value ($) |
|||||||||||||||
John J. Legere (2) |
1,618,590 | | 3,333,333 | 170 | % | 5,666,666 | ||||||||||||||
J. Braxton Carter |
845,192 | 150 | % | 1,267,789 | 170 | % | 2,155,241 | |||||||||||||
G. Michael Sievert |
944,231 | 200 | % | 1,888,461 | 170 | % | 3,210,384 | |||||||||||||
Neville R. Ray |
796,154 | 150 | % | 1,194,231 | 170 | % | 2,030,192 | |||||||||||||
Thomas C. Keys |
749,038 | 125 | % | 936,298 | 170 | % | 1,591,707 |
(1) | Base earnings reflect eligible earnings as reported by T-Mobile payroll and vary slightly from target 2017 base salaries. |
(2) | Mr. Legeres employment agreement targeted his short-term incentive value at not less than $3,333,333. |
28 | T-Mobile 2018 Proxy Statement |
EXECUTIVE COMPENSATION
Performance-based RSU achievement can range from 0% to 200% of target based on relative performance against our peer group, and payouts are determined by multiplying the target number of performance-based RSUs by an adjustment percentage based on the RTSR percentile performance of the Company, as follows:
T-Mobile 2018 Proxy Statement | 29 |
EXECUTIVE COMPENSATION
Officer |
Total 2017 Grant ($) |
Target Number of Based RSUs (#) |
Number of Time-Based (#) |
|||||||||
John J. Legere |
15,000,000 | 178,775 | 65,009 | |||||||||
J. Braxton Carter |
5,312,500 | 43,170 | 43,170 | |||||||||
G. Michael Sievert |
7,125,000 | 57,899 | 57,899 | |||||||||
Neville R. Ray |
5,000,000 | 40,631 | 40,631 | |||||||||
Thomas C. Keys |
4,218,750 | 34,283 | 34,283 |
(1) | Named Executive Officers received half of the aggregate target value of their long-term incentive awards in the form of performance-based RSUs and half of such value in the form of time-based RSUs, except for Mr. Legere who received approximately 3/4 of his target award in the form of performance-based RSUs (including his True-Up PRSUs described below). |
30 | T-Mobile 2018 Proxy Statement |
EXECUTIVE COMPENSATION
T-Mobile 2018 Proxy Statement | 31 |
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with Company management. Based on such review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Companys Proxy Statement and incorporated by reference into the 2017 Form 10-K.
The Compensation Committee:
Teresa A. Taylor, Chair
W. Michael Barnes
Thomas Dannenfeldt
Lawrence H. Guffey
Raphael Kübler
32 | T-Mobile 2018 Proxy Statement |
EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION TABLES
2017 Summary Compensation Table
The following table sets forth certain information with respect to compensation for the years ended December 31, 2017, 2016 and 2015 earned by or paid to our Named Executive Officers.
Name and Principal Position |
Year | Salary ($) |
Bonus ($) |
Stock Awards (1) ($) |
Option Awards ($) |
Non-Equity Incentive Plan Compensation (2) ($) |
All Other Compensation (3) ($) |
Total ($) |
||||||||||||||||||||||||
John J. Legere |
2017 | 1,618,590 | | 16,278,923 | | 5,666,666 | 67,027 | 23,631,206 | ||||||||||||||||||||||||
President and Chief Executive Officer |
2016 | 1,500,000 | | 12,898,115 | | 5,610,000 | 51,800 | 20,059,915 | ||||||||||||||||||||||||
2015 | 1,492,358 | | 13,675,485 | | 9,253,101 | 37,043 | 24,457,987 | |||||||||||||||||||||||||
J. Braxton Carter |
2017 | 845,192 | | 8,128,113 | | 2,155,241 | 28,192 | 11,156,737 | ||||||||||||||||||||||||
Executive Vice President and Chief Financial Officer |
2016 | 724,135 | | 4,339,167 | | 1,692,665 | 10,600 | 6,766,567 | ||||||||||||||||||||||||
2015 | 698,462 | | 3,907,509 | | 2,895,959 | 10,600 | 7,512,530 | |||||||||||||||||||||||||
G. Michael Sievert |
2017 | 944,231 | | 14,699,399 | | 3,210,384 | 36,729 | 18,890,743 | ||||||||||||||||||||||||
Chief Operating Officer |
2016 | 800,000 | | 5,320,028 | | 2,244,000 | 10,600 | 8,374,628 | ||||||||||||||||||||||||
2015 | 792,308 | | 4,465,715 | | 2,751,128 | 10,600 | 8,019,751 | |||||||||||||||||||||||||
Neville R. Ray |
2017 | 796,154 | | 5,222,303 | | 2,030,192 | 11,468 | 8,060,117 | ||||||||||||||||||||||||
Executive Vice President and Chief Technology Officer |
2016 | 696,539 | | 4,189,514 | | 1,628,159 | 10,600 | 6,524,811 | ||||||||||||||||||||||||
2015 | 598,462 | | 2,679,457 | | 2,409,960 | 10,600 | 5,698,479 | |||||||||||||||||||||||||
Thomas C. Keys |
2017 | 749,038 | | 4,406,394 | | 1,591,707 | 11,037 | 6,758,176 | ||||||||||||||||||||||||
President, MetroPCS |
2016 | 724,136 | | 3,857,046 | | 1,354,135 | 10,600 | 5,945,917 | ||||||||||||||||||||||||
2015 | 700,000 | | 3,907,509 | | 2,565,333 | 10,600 | 7,183,442 |
(1) | The value of stock awards (consisting of time-based RSUs and performance-based RSUs at target level) is determined using the aggregate grant date fair value computed in accordance with ASC 718, excluding the effect of any estimated forfeitures. These amounts reflect the Companys accounting expense and do not correspond to the actual value that will be realized by the Named Executive Officer. See Note 1 to the Consolidated Financial Statements included in the Companys Annual Report on Form 10-K for the year ended December 31, 2017 for a summary of the assumptions we apply in calculating these amounts. The aggregate grant date fair value of the performance-based RSUs granted to our Named Executive Officers during 2017, assuming maximum performance, would be as follows: Mr. Legere, $24,469,425 (including $17,245,588 (for his February performance-based RSUs) and $7,223,837 (for his True-Up PRSUs)); Mr. Carter, $5,726,069; Mr. Sievert, $14,991,209 (including $7,679,723 (for his annual performance-based RSUs) and $7,311,486 (for his special one-time award of performance-based RSUs)); Mr. Ray, $5,389,296 and Mr. Keys, $4,547,297. |
(2) | For 2017, represents amounts paid by the Company under the respective annual STIP, based on the achievement of certain Company performance measures during the year. For additional information, please see Annual Short-Term Incentives above. |
(3) | Amounts included in the All Other Compensation column are detailed in the table below. |
Officer |
401k Employer Match ($) |
Legal Fee Reimbursement ($) |
Security Arrangements ($) |
Spousal Travel (1) ($) |
Other ($) |
Total ($) |
||||||||||||||||||
John J. Legere |
| 18,750 | 48,101 | | 176 | 67,027 | ||||||||||||||||||
J. Braxton Carter |
10,800 | 16,047 | | 459 | 887 | 28,192 | ||||||||||||||||||
G. Michael Sievert |
10,800 | 25,000 | | 398 | 531 | 36,729 | ||||||||||||||||||
Neville R. Ray |
10,800 | | | | 668 | 11,468 | ||||||||||||||||||
Thomas C. Keys |
10,800 | | | | 237 | 11,037 |
(1) | Converted from Euro to US Dollars using the exchange rate of 1.1941 as of September 21, 2017. |
T-Mobile 2018 Proxy Statement | 33 |
EXECUTIVE COMPENSATION
2017 Grants of Plan-Based Awards Table
The following table sets forth certain information with respect to grants of plan-based awards for the year ended December 31, 2017, to the Named Executive Officers.
Name |
Type of Award |
Grant Date |
Approval Date |
Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) |
Estimated Future Payouts Under Equity Incentive Plan Awards (2) |
All Other (#) |
Grant-Date of Stock |
|||||||||||||||||||||||||||||||||||||
Threshold ($) |
Target ($) |
Maximum ($) |
Threshold (#) |
Target (#) |
Maximum (#) |
|||||||||||||||||||||||||||||||||||||||
John J. Legere |
STIP | 166,667 | 3,333,333 | 6,666,666 | | | | | | |||||||||||||||||||||||||||||||||||
PRSU | 2/25/2017 | 2/16/2017 | | | | 32,505 | 130,018 | 260,036 | | 8,622,794 | ||||||||||||||||||||||||||||||||||
RSU | 2/25/2017 | 2/16/2017 | | | | | | | 65,009 | 4,044,210 | ||||||||||||||||||||||||||||||||||
PRSU | 4/1/2017 | 3/27/2017 | | | | 12,189 | 48,757 | 97,514 | | 3,611,919 | ||||||||||||||||||||||||||||||||||
J. Braxton Carter |
STIP | 63,389 | 1,267,789 | 2,535,577 | | | | | | |||||||||||||||||||||||||||||||||||
PRSU | 2/25/2017 | 2/16/2017 | | | | 10,793 | 43,170 | 86,340 | | 2,863,034 | ||||||||||||||||||||||||||||||||||
RSU | 2/25/2017 | 2/16/2017 | | | | | | | 43,170 | 2,685,606 | ||||||||||||||||||||||||||||||||||
RSU | 12/22/2017 | 12/15/2017 | | | | | | | 40,545 | 2,579,473 | ||||||||||||||||||||||||||||||||||
G. Michael Sievert |
STIP | 94,423 | 1,888,461 | 3,776,923 | | | | | | |||||||||||||||||||||||||||||||||||
PRSU | 2/25/2017 | 2/16/2017 | | | | 14,475 | 57,899 | 115,798 | | 3,839,862 | ||||||||||||||||||||||||||||||||||
RSU | 2/25/2017 | 2/16/2017 | | | | | | | 57,899 | 3,601,897 | ||||||||||||||||||||||||||||||||||
PRSU | 2/25/2017 | 2/16/2017 | | | | 14,475 | 57,899 | 115,798 | | 3,655,743 | ||||||||||||||||||||||||||||||||||
RSU | 2/25/2017 | 2/16/2017 | | | | | | | 57,899 | 3,601,897 | ||||||||||||||||||||||||||||||||||
Neville R. Ray |
STIP | 59,712 | 1,194,231 | 2,388,462 | | | | | | |||||||||||||||||||||||||||||||||||
PRSU | 2/25/2017 | 2/16/2017 | | | | 10,158 | 40,631 | 81,262 | | 2,694,648 | ||||||||||||||||||||||||||||||||||
RSU | 2/25/2017 | 2/16/2017 | | | | | | | 40,631 | 2,527,655 | ||||||||||||||||||||||||||||||||||
Thomas C. Keys |
STIP | 46,815 | 936,298 | 1,872,596 | | | | | | |||||||||||||||||||||||||||||||||||
PRSU | 2/25/2017 | 2/16/2017 | | | | 8,571 | 34,283 | 68,566 | | 2,273,649 | ||||||||||||||||||||||||||||||||||
RSU | 2/25/2017 | 2/16/2017 | | | | | | | 34,283 | 2,132,745 |
(1) | Represents the threshold, target and maximum amounts of annual cash incentive compensation that might have become payable to each Named Executive Officer for performance under the 2017 STIP. |
(2) | Represents the threshold, target and maximum number of shares that might be paid pursuant to performance-based RSU awards granted during 2017. |
(3) | The value of time-based and performance-based RSUs (at target level) is determined using the aggregate grant date fair value computed in accordance with ASC 718, excluding the effect of any estimated forfeitures. These amounts reflect the Companys accounting expense and do not correspond to the actual value that will be realized by the Named Executive Officer. See Note 1 to the Consolidated Financial Statements included in the Companys Annual Report on Form 10-K for the year ended December 31, 2017 for a summary of the assumptions we apply in calculating these amounts. |
34 | T-Mobile 2018 Proxy Statement |
EXECUTIVE COMPENSATION
T-Mobile 2018 Proxy Statement | 35 |
EXECUTIVE COMPENSATION
Outstanding Equity Awards at 2017 Fiscal Year-End Table
The following table sets forth certain information with respect to all outstanding equity awards held by the Named Executive Officers as of December 31, 2017.
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||||||||||||||||||
Name |
|
Type of Award |
|
Grant Date |
|
|
Number of |
|
|
Number of
|
|
|
Option Exercise Price ($) |
|
|
Option Expiration |
|
|
Value of Unexercised In-the- Money Options/ SARs at Year-End ($) |
|
|
Number of Shares or Units or Stock Not Vested (#) |
|
|
Market Value of Shares or Units of Stock That Have Not Vested (7) ($) |
|
|
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested |
|
|
Equity Incentive Plan Awards: Value of Units or Rights That Not Vested (7) ($) |
| ||||||||||||||||||||
Exercisable |
Unexercisable |
|||||||||||||||||||||||||||||||||||||||||||||||||||
John J. Legere |
PRSU | 4/1/2017 | (1) | | | | | | | | 48,757 | 6,193,114 | ||||||||||||||||||||||||||||||||||||||||
PRSU | 2/25/2017 | (2) | | | | | | | | 130,018 | 16,514,886 | |||||||||||||||||||||||||||||||||||||||||
RSU | 2/25/2017 | (3) | | | | | | 65,009 | 4,128,722 | | | |||||||||||||||||||||||||||||||||||||||||
PRSU | 2/25/2016 | (2) | | | | | | | | 215,112 | 27,323,526 | |||||||||||||||||||||||||||||||||||||||||
RSU | 2/25/2016 | (3) | | | | | | 71,704 | 4,553,921 | | | |||||||||||||||||||||||||||||||||||||||||
PRSU | 2/25/2015 | (2) | | | | | | | | 260,163 | 33,045,904 | |||||||||||||||||||||||||||||||||||||||||
RSU | 2/25/2015 | (3) | | | | | | 43,361 | 2,753,857 | | | |||||||||||||||||||||||||||||||||||||||||
J. Braxton Carter |
RSU | 12/22/2017 | (4) | | | | | | 40,545 | 2,575,013 | | | ||||||||||||||||||||||||||||||||||||||||
PRSU | 2/25/2017 | (2) | | | | | | | | 43,170 | 5,483,453 | |||||||||||||||||||||||||||||||||||||||||
RSU | 2/25/2017 | (3) | | | | | | 43,170 | 2,741,727 | | | |||||||||||||||||||||||||||||||||||||||||
PRSU | 2/25/2016 | (2) | | | | | | | | 54,829 | 6,964,380 | |||||||||||||||||||||||||||||||||||||||||
RSU | 2/25/2016 | (3) | | | | | | 36,553 | 2,321,481 | | | |||||||||||||||||||||||||||||||||||||||||
PRSU | 2/25/2015 | (2) | | | | | | | | 56,911 | 7,228,835 | |||||||||||||||||||||||||||||||||||||||||
RSU | 2/25/2015 | (3) | | | | | | 18,971 | 1,204,848 | | | |||||||||||||||||||||||||||||||||||||||||
G. Michael Sievert |
PRSU | 2/25/2017 | (5) | | | | | | | | 57,899 | 7,354,331 | ||||||||||||||||||||||||||||||||||||||||
RSU | 2/25/2017 | (6) | | | | | | 57,899 | 3,677,165 | | | |||||||||||||||||||||||||||||||||||||||||
PRSU | 2/25/2017 | (2) | | | | | | | | 57,899 | 7,354,331 | |||||||||||||||||||||||||||||||||||||||||
RSU | 2/25/2017 | (3) | | | | | | 57,899 | 3,677,165 | | | |||||||||||||||||||||||||||||||||||||||||
PRSU | 2/25/2016 | (2) | | | | | | | | 67,223 | 8,538,665 | |||||||||||||||||||||||||||||||||||||||||
RSU | 2/25/2016 | (3) | | | | | | 44,816 | 2,846,264 | | | |||||||||||||||||||||||||||||||||||||||||
PRSU | 2/25/2015 | (2) | | | | | | | | 65,041 | 8,261,508 | |||||||||||||||||||||||||||||||||||||||||
RSU | 2/25/2015 | (3) | | | | | | 21,681 | 1,376,960 | | | |||||||||||||||||||||||||||||||||||||||||
Neville R. Ray |
PRSU | 2/25/2017 | (2) | | | | | | | | 40,631 | 5,160,950 | ||||||||||||||||||||||||||||||||||||||||
RSU | 2/25/2017 | (3) | | | | | | 40,631 | 2,580,475 | | | |||||||||||||||||||||||||||||||||||||||||
PRSU | 2/25/2016 | (2) | | | | | | | | 52,938 | 6,724,185 | |||||||||||||||||||||||||||||||||||||||||
RSU | 2/25/2016 | (3) | | | | | | 35,292 | 2,241,395 | | | |||||||||||||||||||||||||||||||||||||||||
PRSU | 2/25/2015 | (2) | | | | | | | | 39,025 | 4,956,956 | |||||||||||||||||||||||||||||||||||||||||
RSU | 2/25/2015 | (3) | | | | | | 13,009 | 826,202 | | | |||||||||||||||||||||||||||||||||||||||||
Thomas C. Keys |
PRSU | 2/25/2017 | (2) | | | | | | | | 34,283 | 4,354,627 | ||||||||||||||||||||||||||||||||||||||||
RSU | 2/25/2017 | (3) | | | | | | 34,283 | 2,177,313 | | | |||||||||||||||||||||||||||||||||||||||||
PRSU | 2/25/2016 | (2) | | | | | | | | 48,737 | 6,190,574 | |||||||||||||||||||||||||||||||||||||||||
RSU | 2/25/2016 | (3) | | | | | | 32,492 | 2,063,567 | | | |||||||||||||||||||||||||||||||||||||||||
PRSU | 2/25/2015 | (2) | | | | | | | | 56,911 | 7,228,835 | |||||||||||||||||||||||||||||||||||||||||
RSU | 2/25/2015 | (3) | | | | | | 18,971 | 1,204,848 | | |
(1) | These True-Up PRSUs vest based on the relative performance of the Companys TSR compared to that of the peer group over a measurement period from February 25, 2017 through February 25, 2020. |
(2) | PRSUs vest based on the relative performance of the Companys TSR compared to that of the peer group over a measurement period of three years. |
(3) | RSUs vest in annual installments with respect to one-third of the shares on February 25 of each of the three calendar years following the calendar year in which the grant occurred. |
(4) | RSUs vest in full on March 1, 2019. |
(5) | PRSUs vest based on the relative performance of the Companys TSR compared to that of the peer group from February 25, 2017 through February 25, 2019. |
(6) | RSUs vest in full on February 25, 2019. |
(7) | Calculated based on the number of PRSUs that may be earned upon achievement of the maximum performance level or number of time-based RSUs, as applicable, multiplied by the closing price of our common stock on December 29, 2017 of $63.51 per share. In calculating the number of PRSUs and their value, we are required by SEC rules to compare the Companys performance through 2017 under each outstanding PRSU grant against the threshold, target, and maximum performance levels for the grant and report in this column the applicable potential payout amount. If the performance is between levels, we are required to report the potential payout at the next highest level. For example, if the previous fiscal years performance exceeded target, even if it is by a small amount and even if it is highly unlikely that we will pay the maximum amount, we are required by SEC rules to report the awards using the maximum potential payouts. |
36 | T-Mobile 2018 Proxy Statement |
EXECUTIVE COMPENSATION
Option Exercises and Stock Vested for Fiscal Year 2017 Table
The following table sets forth certain information with respect to option exercises and restricted stock vesting during the fiscal year ended December 31, 2017, with respect to the Named Executive Officers.
Option Awards | Stock Awards | |||||||||||||||||||
Name |
Number of Shares Acquired on Exercise (#) |
Value Realized on Exercise ($) |
Number of Shares Acquired on Vesting (#) |
Value Realized on Vesting (1)($) |
||||||||||||||||
John J. Legere |
| | 170,013 | 10,576,509 | ||||||||||||||||
J. Braxton Carter |
500 | 13,515 | 86,429 | 5,376,748 | ||||||||||||||||
G. Michael Sievert |
| | 85,066 | 5,344,800 | ||||||||||||||||
Neville R. Ray |
| | 61,451 | 3,822,867 | ||||||||||||||||
Thomas C. Keys |
200,000 | 1,362,192 | 85,912 | 5,344,586 |
(1) | Included in the amount listed in this column is vesting of deferred RSUs by Mr. Ray in the amount of $202,307 with payment deferred until after retirement. |
2017 Non-Qualified Deferred Compensation
The following table shows the contributions, earnings and the aggregate balance of total deferrals as of December 31, 2017.
Name |
Executive Contributions in |
Aggregate Earnings in Last Fiscal Year ($) |
Aggregate Balance at Last Fiscal Year-End (1)($) |
|||||||||
John J. Legere |
| | | |||||||||
J. Braxton Carter |
| 251,790 | 2,642,259 | |||||||||
G. Michael Sievert |
| | | |||||||||
Neville R. Ray |
194,406 | 850,487 | 6,007,745 | |||||||||
Thomas C. Keys |
| | |
(1) | Of the amounts listed in this column, the following aggregate amounts were reported in the Summary Compensation Tables in proxy statements for prior years: Mr. Carter, $1,368,783 and Mr. Ray, $1,332,250. |
T-Mobile 2018 Proxy Statement | 37 |
EXECUTIVE COMPENSATION
38 | T-Mobile 2018 Proxy Statement |
EXECUTIVE COMPENSATION
T-Mobile 2018 Proxy Statement | 39 |
EXECUTIVE COMPENSATION
40 | T-Mobile 2018 Proxy Statement |
EXECUTIVE COMPENSATION
Name |
Termination in Connection with Restructuring Before a Change in Control ($) |
Termination Without Cause or for Good Reason in Connection with or After a Change in Control ($) |
Death or Disability ($) |
|||||||||
John J. Legere |
||||||||||||
Cash Severance |
10,000,000 | 10,000,000 | | |||||||||
Time-Based RSUs |
11,436,500 | 11,436,500 | 11,436,500 | |||||||||
Performance-Based RSUs |
41,538,716 | 41,538,716 | 41,538,716 | |||||||||
2017 STIP |
5,666,666 | 5,666,666 | 5,666,666 | |||||||||
Medical Coverage |
6,516 | 6,516 | | |||||||||
Outplacement Services |
6,500 | 6,500 | | |||||||||
Total Estimated Value |
68,654,897 | 68,654,897 | 58,641,881 | |||||||||
J. Braxton Carter |
||||||||||||
Cash Severance |
4,250,000 | 4,250,000 | | |||||||||
Time-Based RSUs |
5,854,415 | 8,843,069 | 8,843,069 | |||||||||
Performance-Based RSUs |
6,351,318 | 9,838,334 | 9,838,334 | |||||||||
2017 STIP |
2,155,241 | 2,155,241 | 2,155,241 | |||||||||
Bonus |
63,073 | 63,073 | 63,073 | |||||||||
Medical Coverage |
13,912 | 13,912 | | |||||||||
Outplacement Services |
6,500 | 6,500 | | |||||||||
Total Estimated Value |
18,694,459 | 25,170,129 | 20,899,717 | |||||||||
G. Michael Sievert |
||||||||||||
Cash Severance |
5,700,000 | 5,700,000 | | |||||||||
Time-Based RSUs |
7,702,810 | 11,577,555 | 11,577,555 | |||||||||
Performance-Based RSUs |
9,150,330 | 15,754,418 | 15,754,418 | |||||||||
2017 STIP |
3,210,384 | 3,210,384 | 3,210,384 | |||||||||
Medical Coverage |
19,316 | 19,316 | | |||||||||
Outplacement Services |
6,500 | 6,500 | | |||||||||
Total Estimated Value |
25,789,341 | 36,268,173 | 30,542,358 | |||||||||
Neville R. Ray |
||||||||||||
Cash Severance |
4,000,000 | 4,000,000 | | |||||||||
Time-Based RSUs |
2,806,951 | 5,648,071 | 5,648,071 | |||||||||
Performance-Based RSUs |
5,153,709 | 8,421,045 | 8,421,045 | |||||||||
2017 STIP |
2,030,192 | 2,030,192 | 2,030,192 | |||||||||
Medical Coverage |
20,975 | 20,975 | | |||||||||
Outplacement Services |
6,500 | 6,500 | | |||||||||
Total Estimated Value |
14,018,329 | 20,126,784 | 16,099,309 | |||||||||
Thomas C. Keys |
||||||||||||
Cash Severance |
3,375,000 | 3,375,000 | | |||||||||
Time-Based RSUs |
2,962,233 | 5,445,728 | 5,445,728 | |||||||||
Performance-Based RSUs |
5,953,237 | 8,887,018 | 8,887,018 | |||||||||
2017 STIP |
1,591,707 | 1,591,707 | 1,591,707 | |||||||||
Medical Coverage |
19,395 | 19,395 | | |||||||||
Outplacement Services |
6,500 | 6,500 | | |||||||||
Total Estimated Value |
13,908,072 | 19,325,348 | 15,924,453 |
T-Mobile 2018 Proxy Statement | 41 |
EXECUTIVE COMPENSATION
EQUITY COMPENSATION PLAN INFORMATION
The following table provides information as of December 31, 2017, with respect to outstanding equity awards and shares available for future issuance under our equity compensation plans.
Plan Category |
Number of Securities to (a) |
Weighted Average (b) |
Number of Securities (c) |
|||||||||
Equity Compensation Plans Approved by Stockholders |
20,689,169 | (5) | ||||||||||
Stock Options |
373,158 | (1) | $ | 16.36 | | |||||||
RSUs |
13,695,543 | (2)(3) | | (4) | | |||||||
Equity Compensation Plans Not Approved by Stockholders |
| | | |||||||||
Total |
14,068,701 | $ | 16.36 | (4) | 20,689,169 | (5) |
(1) | Granted under the Amended and Restated MetroPCS Communications, Inc. 2004 Equity Incentive Compensation Plan and the MetroPCS Communications, Inc. 2010 Equity Incentive Compensation Plan. |
(2) | Granted under the 2013 Omnibus Incentive Plan. |
(3) | Includes performance-based RSUs assuming target performance. |
(4) | RSUs do not have an exercise price and are not included in the weighted average exercise price. The weighted average exercise price is also determined without considering outstanding rights under the Companys ESPP. |
(5) | As of December 31, 2017, the number of securities remaining available for future issuance under the 2013 Omnibus Incentive Plan was 15,187,831 and under the ESPP was 5,501,338 (of which 1,069,495 were purchased on March 31, 2018 for the offering period that included December 31, 2017). In addition to RSUs, the 2013 Omnibus Incentive Plan authorizes the award of stock options, stock appreciation rights, restricted stock and other stock-based awards. The ESPP allows eligible employees to purchase shares at 85% of the lower of the fair market value on the first or last trading day of the six-month offering period. Although our ESPP includes an annual automatic increase of the number of shares available under the plan, since adoption of the plan in 2014, the Compensation Committee has determined that no additional shares were necessary to be added to the plan. Pursuant to the terms of our ESPP, the number of shares available for issuance under the ESPP will increase each year on the first day of our fiscal year in an amount equal to the lesser of (i) 5,000,000 shares and (ii) such smaller number as determined by the Compensation Committee, if any. |
42 | T-Mobile 2018 Proxy Statement |
Proposal 3 - Approval of an Amendment to the Companys 2013 Omnibus Incentive Plan
T-Mobile 2018 Proxy Statement | 43 |
PROPOSAL 3 - APPROVAL OF AN AMENDMENT TO THE COMPANYS 2013 OMNIBUS INCENTIVE PLAN
The following table provides details on shares available and outstanding under all equity plans and our Employee Stock Purchase Plan:
Potential Dilution as of February 28, 2018 |
Potential Dilution After Giving Effect to the Amendment |
|||||||
Available for Issuance (all under 2013 Omnibus Incentive Plan) |
7,768,482 | 7,768,482 | ||||||
Unvested RSUs |
14,668,551 | 14,668,551 | ||||||
Unvested Performance RSUs |
2,230,194 | 2,230,194 | ||||||
Unvested RSAs |
354,459 | 354,459 | ||||||
Options Outstanding |
435,670 | 435,670 | ||||||
Restricted Stock Awards |
251 | 251 | ||||||
Employee Stock Purchase Plan |
5,501,338 | 5,501,338 | ||||||
Additional Shares Requested |
18,500,000 | |||||||
Total |
30,958,945 | 49,458,945 |
44 | T-Mobile 2018 Proxy Statement |
PROPOSAL 3 - APPROVAL OF AN AMENDMENT TO THE COMPANYS 2013 OMNIBUS INCENTIVE PLAN
T-Mobile 2018 Proxy Statement | 45 |
PROPOSAL 3 - APPROVAL OF AN AMENDMENT TO THE COMPANYS 2013 OMNIBUS INCENTIVE PLAN
46 | T-Mobile 2018 Proxy Statement |
PROPOSAL 3 - APPROVAL OF AN AMENDMENT TO THE COMPANYS 2013 OMNIBUS INCENTIVE PLAN
T-Mobile 2018 Proxy Statement | 47 |
PROPOSAL 3 - APPROVAL OF AN AMENDMENT TO THE COMPANYS 2013 OMNIBUS INCENTIVE PLAN
48 | T-Mobile 2018 Proxy Statement |
PROPOSAL 3 - APPROVAL OF AN AMENDMENT TO THE COMPANYS 2013 OMNIBUS INCENTIVE PLAN
Awards Granted
The following table provides information with respect to awards granted under the 2013 Omnibus Incentive Plan to our named executive officers, directors and employees since its inception through March 31, 2018. As stated above, it is not possible to determine the amounts of awards that will be granted in the future to participants under the 2013 Omnibus Incentive Plan, as amended by the Amendment.
Name and Position |
Shares Underlying Restricted Stock Units Grants |
Restricted Stock Granted |
||||||
John J. Legere, President & CEO |
3,359,768 | | ||||||
J. Braxton Carter, EVP & Chief Financial Officer |
904,450 | | ||||||
G. Michael Sievert, Chief Operating Officer |
953,600 | | ||||||
Neville R. Ray, EVP & Chief Technology Officer |
690,272 | | ||||||
Thomas C. Keys, President, MetroPCS |
874,207 | | ||||||
All current executive officers as a group |
8,417,637 | | ||||||
Thomas Dannenfeldt, Director |
| | ||||||
Srikant M. Datar, Director |
20,782 | | ||||||
Lawrence H. Guffey, Director |
20,782 | | ||||||
Timotheus Höttges, Director |
| | ||||||
Bruno Jacobfeuerborn, Director |
| | ||||||
Raphael Kübler, Director |
| | ||||||
Thorsten Langheim, Director |
| | ||||||
Teresa A. Taylor, Director |
20,782 | | ||||||
Kelvin R. Westbrook, Director |
20,782 | | ||||||
Olaf Swantee, Nominee for election as a Director |
| | ||||||
All current non-executive directors as a group |
99,106 | | ||||||
All non-executive officer employees as a group |
53,828,516 | 354,459 |
*The closing price of the Companys common stock as of March 29, 2018 was $61.04 per share.
T-Mobile 2018 Proxy Statement | 49 |
Security Ownership of Principal Stockholders and Management
Common Stock Beneficially Owned | ||||||||
Number | Percentage | |||||||
Directors, Nominees and Named Executive Officers (1) |
||||||||
W. Michael Barnes (2) |
141,167 | * | ||||||
J. Braxton Carter |
175,222 | * | ||||||
Thomas Dannenfeldt |
| * | ||||||
Srikant M. Datar (3) |
25,735 | * | ||||||
Lawrence H. Guffey |
17,735 | * | ||||||
Timotheus Höttges |
| * | ||||||
Bruno Jacobfeuerborn |
| * | ||||||
Thomas C. Keys |
333,444 | * | ||||||
Raphael Kübler |
| * | ||||||
Thorsten Langheim |
| * | ||||||
John J. Legere |
1,473,051 | * | ||||||
Neville R. Ray (4) |
204,369 | * | ||||||
G. Michael Sievert |
294,753 | * | ||||||
Teresa A. Taylor |
17,735 | * | ||||||
Kelvin R. Westbrook |
17,735 | * | ||||||
Olaf Swantee |
| * | ||||||
All directors and executive officers as a group (19 persons) |
3,151,143 | * | ||||||
Beneficial Owners of More Than 5%: |
||||||||
Deutsche Telekom AG (5) Friedrich-Ebert-Alle 140 53113 Bonn, Germany |
538,590,941 | 63.14 | % |
* | Represents less than 1% |
(1) | Unless otherwise indicated, the address of each person is c/o T-Mobile US, Inc., 12920 SE 38th Street, Bellevue, Washington 98006. |
(2) | Includes 33,600 shares of common stock issuable upon exercise of options. |
(3) | Includes 8,000 shares of common stock held by Datar Investment LLC and 13,424 shares held by Safari LLC. Mr. Datar is a co-manager of Datar Investment LLC and Safari LLC and has shared voting and investment power over the securities held by these entities. |
(4) | Includes 6,250 shares of common stock from vested RSUs that have been deferred. |
(5) | According to the Schedule 13D/A filed by Deutsche Telekom on March 16, 2018, reflecting ownership of 538,590,941 shares of common stock as of March 6, 2018. The shares are held of record Deutsche Telekom Holding B.V., which is a direct wholly owned subsidiary of T-Mobile Global Holding GmbH, which is a direct wholly owned subsidiary of T-Mobile Global Zwischenholding GmbH, which in turn is a direct wholly owned subsidiary of Deutsche Telekom. |
50 | T-Mobile 2018 Proxy Statement |
Transactions with Related Persons and Approval
RELATED PERSON TRANSACTIONS
RELATED PERSON TRANSACTION POLICY
TRANSACTIONS WITH DEUTSCHE TELEKOM
T-Mobile 2018 Proxy Statement | 51 |
TRANSACTIONS WITH RELATED PERSONS AND APPROVAL
52 | T-Mobile 2018 Proxy Statement |
TRANSACTIONS WITH RELATED PERSONS AND APPROVAL
T-Mobile 2018 Proxy Statement | 53 |
TRANSACTIONS WITH RELATED PERSONS AND APPROVAL
54 | T-Mobile 2018 Proxy Statement |
TRANSACTIONS WITH RELATED PERSONS AND APPROVAL
T-Mobile 2018 Proxy Statement | 55 |
TRANSACTIONS WITH RELATED PERSONS AND APPROVAL
56 | T-Mobile 2018 Proxy Statement |
TRANSACTIONS WITH RELATED PERSONS AND APPROVAL
T-Mobile 2018 Proxy Statement | 57 |
Proposal 4 - Stockholder Proposal for Implementation of Proxy Access
The Marco Consulting Group Trust I, 550 W. Washington Blvd., Suite 900, Chicago, Illinois 60661, a beneficial owner of 933 shares of the Companys common stock, has advised us that it intends to submit the following proposal at the Annual Meeting.
58 | T-Mobile 2018 Proxy Statement |
PROPOSAL 4 - STOCKHOLDER PROPOSAL FOR IMPLEMENTATION OF PROXY ACCESS
Therefore, the Board recommends a vote AGAINST this proposal. |
T-Mobile 2018 Proxy Statement | 59 |
Proposal 5 - Stockholder Proposal for Limitations on Accelerated Vesting of Equity Awards in the Event of a Change of Control
AmalgaTrust, a division of Amalgamated Bank of Chicago, on behalf of the AFL-CIO Reserve Fund, 815 Sixteenth St. N.W., Washington, D.C. 20006, a beneficial owner of 200 shares of the Companys common stock, has advised us that it intends to submit the following proposal at the Annual Meeting.
60 | T-Mobile 2018 Proxy Statement |
PROPOSAL 5 - STOCKHOLDER PROPOSAL FOR LIMITATIONS ON ACCELERATED VESTING OF EQUITY AWARDS IN THE EVENT OF A CHANGE OF CONTROL
For the reasons above, the Board recommends a vote AGAINST this proposal. |
T-Mobile 2018 Proxy Statement | 61 |
Questions and Answers About the Annual Meeting and Voting
62 | T-Mobile 2018 Proxy Statement |
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING
Proposal |
Recommended Vote |
Vote Required |
Withhold Votes/Abstentions |
Broker Non-Votes | ||||||
1. |
Election of Directors | FOR | Plurality | No Effect | No Effect | |||||
2. |
Ratification of the Appointment of PricewaterhouseCoopers LLP as the Companys Independent Registered Public Accounting Firm for Fiscal Year 2018 | FOR | Majority* | No Effect | ** | |||||
3. |
Approval of an Amendment to the Companys 2013 Omnibus Incentive Plan | FOR | Majority* | No Effect | No Effect | |||||
4. |
Stockholder Proposal for Implementation of Proxy Access | AGAINST | Majority* | No Effect | No Effect | |||||
5. |
Stockholder Proposal for Limitations on Accelerated Vesting of Equity Awards in the Event of a Change of Control | AGAINST | Majority* | No Effect | No Effect |
* | Under our bylaws, the ratification of the appointment of our independent registered public accounting firm and approval of the stockholder proposals are decided by the vote of a majority of the votes cast in person or by proxy at the Annual Meeting by the holders of our shares of common stock entitled to vote thereon. Under this voting standard, any matter or proposal for which the vote required is a majority will, if presented, be approved if a majority of the votes cast FOR such proposal exceed the number of votes cast AGAINST such proposal. Neither abstentions nor broker non-votes will count as votes cast FOR or AGAINST the proposal. Therefore, abstentions and broker non-votes will have no direct effect on the outcome of the proposal. |
** | Broker non-votes are not expected for this proposal. |
T-Mobile 2018 Proxy Statement | 63 |
Other Information and Business
COMPANY INFORMATION
DUPLICATE MAILINGS (HOUSEHOLDING)
STOCKHOLDER PROPOSALS FOR THE 2019 ANNUAL MEETING OF STOCKHOLDERS
64 | T-Mobile 2018 Proxy Statement |
OTHER INFORMATION AND BUSINESS
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
OTHER BUSINESS
By Order of the Board of Directors,
David A. Miller
Executive Vice President, General Counsel and Secretary
T-Mobile 2018 Proxy Statement | 65 |
APPENDIX A
Reconciliation of Non-GAAP Financial Measures
Certain of the financial metrics applicable to the 2017 Short Term Incentive Plan described under Executive Compensation Analysis of Executive Officer Compensation are non-GAAP financial measures. Below is a description of these non-GAAP financial measures.
Adjusted EBITDA: Earnings before interest expense, net of interest income, income tax expense, depreciation and amortization expense, non-cash stock-based compensation and certain expenses not reflective of T-Mobiles ongoing operating performance.
Adjusted EBITDA is reconciled to net income as follows:
Quarter | Year Ended December 31, |
|||||||||||||||||||||||||||||||||||||||
(in millions) |
Q1 2016 |
Q2 2016 |
Q3 2016 |
Q4 2016 |
Q1 2017 |
Q2 2017 |
Q3 2017 |
Q4 2017 |
2016 | 2017 | ||||||||||||||||||||||||||||||
Net income |
$ | 479 | $ | 225 | $ | 366 | $ | 390 | $ | 698 | $ | 581 | $ | 550 | $ | 2,707 | $ | 1,460 | $ | 4,536 | ||||||||||||||||||||
Adjustments: |
||||||||||||||||||||||||||||||||||||||||
Interest expense |
339 | 368 | 376 | 335 | 339 | 265 | 253 | 254 | 1,418 | 1,111 | ||||||||||||||||||||||||||||||
Interest expense to affiliates |
79 | 93 | 76 | 64 | 100 | 131 | 167 | 162 | 312 | 560 | ||||||||||||||||||||||||||||||
Interest income (1) |
(3 | ) | (3 | ) | (3 | ) | (4 | ) | (7 | ) | (6 | ) | (2 | ) | (2 | ) | (13 | ) | (17 | ) | ||||||||||||||||||||
Other income, net |
2 | 3 | 1 | | (2 | ) | 92 | (1 | ) | (16 | ) | 6 | 73 | |||||||||||||||||||||||||||
Income tax expense (benefit) |
272 | 147 | 232 | 216 | (91 | ) | 353 | 356 | (1,993 | ) | 867 | (1,375 | ) | |||||||||||||||||||||||||||
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