UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
| For the month of April 2021 | Commission File Number: 1-31349 |
THOMSON REUTERS CORPORATION
(Translation of registrant’s name into English)
333 Bay Street, Suite 300
Toronto, Ontario M5H 2R2, Canada
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☐ Form 40-F ☒
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
The information contained in Exhibit 99.1 of this Form 6-K is incorporated by reference into, or as an additional exhibit to, as applicable, the registrant’s outstanding registration statements.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| THOMSON REUTERS CORPORATION (Registrant) | ||
| By: | /s/ Marc E. Gold | |
| Name: Marc E. Gold | ||
| Title: Deputy Company Secretary | ||
Date: April 21, 2021
EXHIBIT INDEX
| Exhibit |
Description | |
| 99.1 | Notice of Annual Meeting of Shareholders and Management Proxy Circular dated April 19, 2021 | |
| 99.2 | Form of Proxy for Registered Shareholders | |
| 99.3 | Notice of Availability of Proxy Materials | |
| 99.4 | Corporate Governance Guidelines | |
| 99.5 | Virtual AGM User Guide | |
Table of Contents
Exhibit 99.1
Management Proxy Circular and
Notice of Annual Meeting of Shareholders
June 9, 2021
| YOUR VOTE AND PARTICIPATION AS A SHAREHOLDER IS IMPORTANT. Please read this document and vote. |
||
Table of Contents
Notice of Annual Meeting of Shareholders of Thomson Reuters Corporation
We are pleased to invite you to attend our 2021 annual meeting of shareholders.
| When | Where | |||||
|
|
Wednesday, June 9, 2021 12:00 p.m. (Eastern Daylight Time) |
Virtual-only meeting – a live audio webcast will be available at: www.tr.com/agm2021
Shareholders attending the meeting should enter their control number or username and the password for the meeting: tri2021 (case sensitive). Guests do not need a control number, username or password to attend the meeting. You can find information about control numbers and usernames in this notice and in the accompanying management proxy circular. | ||||
| A replay of the webcast will be posted on our website after the meeting. | ||||||
To our Shareholders,
We are pleased to invite you to attend the 2021 Thomson Reuters annual meeting of shareholders on Wednesday, June 9, 2021 at 12:00 p.m. (Eastern Daylight Time).
The health and safety of our communities, shareholders, employees and other stakeholders is our top priority. In light of the ongoing COVID-19 pandemic, we are holding the meeting as a virtual only meeting, which will be conducted through a live webcast. Shareholders will have an opportunity to attend, submit or ask questions and vote at the meeting in real time through a web-based platform, regardless of geographic location and share ownership. Shareholders will not be able to attend the meeting in person.
Business of the Meeting
At the meeting, shareholders will be asked to:
1. Receive our consolidated financial statements for the year ended December 31, 2020 and the auditor’s report on those statements;
2. Elect directors;
3. Appoint PricewaterhouseCoopers LLP as the auditor and authorize the directors to fix the auditor’s remuneration;
4. Consider an advisory resolution on executive compensation;
5. Consider the shareholder proposal set forth in the accompanying management information circular; and
6. Transact any other business properly brought before the meeting and any adjourned or postponed meeting.
You can read about each of these items in more detail in the accompanying management proxy circular. At the meeting, you will also have an opportunity to hear about our 2020 performance and our plans for Thomson Reuters going forward.
Management Proxy Circular and Notice of Annual Meeting of Shareholders
Table of Contents
Participating in the Meeting
The process for participating in the virtual meeting depends on whether you’re a registered or non-registered shareholder. You can find more information about these terms in the “Voting Information and How to Attend” section of the accompanying management proxy circular.
| · | Registered shareholders and duly appointed proxyholders (including non-registered shareholders who have duly appointed themselves as proxyholder) will be able to attend the virtual meeting, submit or ask questions and vote in real time, provided they are connected to the Internet and follow the instructions in the accompanying management proxy circular. |
| · | If you are a non-registered shareholder (or “beneficial owner”) who wishes to attend the virtual meeting, submit or ask questions and vote in real time, you have to appoint yourself as proxyholder first and then also register with our transfer agent, Computershare Trust Company of Canada. If you’re a non-registered shareholder and don’t appoint yourself as proxyholder, you can still attend the virtual meeting as a guest, but you won’t be able to submit or ask questions or vote at the meeting. If you are a non-registered shareholder located in the United States and wish to appoint yourself as a proxyholder in order to attend, participate or vote at the meeting, you MUST also obtain a valid legal proxy from your intermediary and submit it to Computershare Trust Company of Canada. |
Please carefully follow the instructions in the “Voting Information and How to Attend” section of the accompanying management proxy circular and on your form of proxy or voting instruction form (VIF).
How to Attend the Meeting
STEP ONE: Log in online at: www.tr.com/agm2021
We recommend that you log into the meeting at least 15 minutes before the meeting starts.
STEP TWO: Follow these instructions:
| · | Duly appointed proxyholders (including non-registered shareholders who have duly appointed themselves as proxyholder): Click “Shareholder”. Enter your username and the password: tri2021 (case sensitive). Proxyholders who have been duly appointed and registered with Computershare Trust Company of Canada as described in the accompanying management proxy circular will receive a username by e-mail from Computershare after the proxy voting deadline has passed. |
| · | Registered shareholders: Click “Shareholder”. Enter your control number as your username and the password: tri2021 (case sensitive). The control number is located on the proxy form or in the e-mail notification you received from Computershare Trust Company of Canada. If you use your control number as a username to log into the meeting and you accept the terms and conditions, any vote that you cast at the meeting will revoke any proxy that you previously submitted. If you do not wish to revoke a previously submitted proxy, you should not vote during the meeting. |
| · | Guests: Click “Guest” and then complete the online form. |
If you attend the virtual meeting, it is your responsibility to have Internet connectivity for the duration of the meeting.
Please carefully follow the instructions in the “Voting Information and How to Attend” section of the accompanying management proxy circular.
Record Date
You are entitled to vote at the meeting, and any adjourned or postponed meeting, if you were a holder of our common shares as of 5:00 p.m. (Eastern Daylight Time) on April 12, 2021.
Management Proxy Circular and Notice of Annual Meeting of Shareholders
Table of Contents
Notice-And-Access
We are using the “notice-and-access” system for the delivery of our proxy materials through our website, www.tr.com, similar to last year’s meeting. Shareholders who receive a notice have the ability to access the proxy materials on our website and to request a paper copy of the proxy materials. Instructions on how to access the proxy materials through our website or to request a paper copy may be found in the notice. Electronic delivery reduces the cost and environmental impact of producing and distributing paper copies of documents in very large quantities. It also provides shareholders with faster access to information about Thomson Reuters.
Shareholders who have already signed up for electronic delivery of proxy materials will continue to receive them by e-mail.
Voting
Your vote is important. If you’re unable to attend the meeting, please vote by proxy. The proxy form contains instructions on how to complete and send your voting instructions. If you hold your shares through a broker or other intermediary, you should follow the procedures provided by your broker or intermediary.
If you’re a registered shareholder, our transfer agent, Computershare Trust Company of Canada, must receive your proxy or voting instructions no later than 5:00 p.m. (Eastern Daylight Time) on Monday, June 7, 2021, or if the meeting is adjourned or postponed, no later than 48 hours (excluding Saturdays, Sundays and holidays) before any adjourned or postponed meeting. If you’re a registered shareholder and have any questions or need assistance voting your shares, please call Computershare Trust Company of Canada, toll-free in Canada and the United States, at 1.800.564.6253.
Non-registered/beneficial shareholders will be subject to earlier voting deadlines as specified in their proxy or voting instructions.
Thank you for your continued support of, and interest in, Thomson Reuters.
Very truly yours,
|
|
| |
| David Thomson Chairman of the Board |
Steve Hasker President & Chief Executive Officer | |
| April 19, 2021 | ||
Management Proxy Circular and Notice of Annual Meeting of Shareholders
Table of Contents
Letter to Shareholders
We will be holding this year’s annual meeting of shareholders in a virtual-only format due to the ongoing COVID-19 pandemic. The meeting will be conducted through a live audio webcast, and you’ll have an opportunity to attend, submit or ask questions and vote at the meeting in real time through a web-based platform. This circular provides information and instructions regarding how to participate in the virtual annual meeting.
To our Shareholders,
In 2020, our customers experienced years of digital transformation in just a few months. COVID-19 forced professionals across the world to work virtually, creating a huge increase in demand for real-time, connected information and insights. If there was ever a time that highlighted the need for easy, seamless access to information with integrity, combined with world-class technology, it was 2020.
Throughout all of these changes, we are humbled by the trust that our customers continue to place in us. We are proud of how our employees have stepped up to power the world’s most informed professionals. And, we’re grateful for the support from you, our shareholders.
Our commitment to serving our customers in the face of great change translated to strong financial results in 2020. Achieving these strong results during a challenging year reaffirms the resilience of our business. For the full year, we posted organic revenue growth of 1%. Our “Big 3” businesses – Legal Professionals, Corporates and Tax & Accounting Professionals – saw organic revenue growth of 4%. This strong financial performance reflected the role we play in helping our customers succeed as we find new ways to combine trusted content with world-class technology and strong human capabilities.
We have strong market segment positions, and our customers depend on our products. But as their needs and ways of working rapidly evolve, we must as well. So, taking every opportunity we can to better serve our customers and access new customer groups, we are transforming Thomson Reuters through an ambitious Change Program. Over the next two years, we will take better advantage of our scale across business segments by transitioning from a holding company to an operating company. And we will build on our longstanding advantages in content, adding artificial intelligence, machine learning and software capabilities to become a leading content-driven technology company.
Building on our trusted relationships and strong capital structure, we are reimagining and modernizing the experience for our customers. This experience will start with the development of standard-setting products powered by cutting-edge technology. We believe the valuable outcomes from these efforts will extend to our customers, employees and shareholders.
In 2020, we improved our industry-leading legal products, like Westlaw and Practical Law. Our focus going forward will be on finding new and meaningful ways to accelerate our rate of innovation and grow our businesses organically. Last year, we acquired Pondera Solutions, which helps combat fraud, waste and abuse in large government programs, and CaseLines, which allows the courts, law enforcement, prosecutors and legal practitioners to work digitally – a need more pressing now than ever. We will continue to consider new acquisitions like these when they can truly benefit our core customer groups and enhance our own value proposition.
Throughout our evolution, transparency and access to justice remain at the heart of everything we do. We help create the backbone of legal and tax systems, and we are a free press that informs and empowers people around the globe. And we recognize the need for businesses like ours to take real action in helping to shape the world we want to live in. So, we have reaffirmed our commitment to global collaboration, partnering with the United Nations Global Compact to host the U.S. country consultation on Peace, Justice and Strong Institutions. We already source renewable energy for 100% of our global needs and have made a public commitment to achieve net-zero emissions by 2050 or sooner - the most ambitious aim of the Science Based Targets initiative. We have clearly and publicly rejected racism in all its forms and have set clear goals to attract and retain diverse talent, especially at senior levels. Not only is this the right thing to do, but it is key to our future success. We have led a multi-faceted campaign to combat misinformation around the globe, promoting media literacy and partnering with big tech companies to help them verify fact from fake. Through our £6.6 million grant to the Thomson Reuters Foundation, we helped leverage the skills, values and expertise of our company to advance media freedom, foster more inclusive economies and promote human rights. We are also proud of the homegrown efforts of our employees around the world who volunteered over 84,000 hours in 2020 for a range of important causes.
Management Proxy Circular and Notice of Annual Meeting of Shareholders
Table of Contents
Reuters journalists have always played a critical role in creating a more transparent world. We saw this need even more clearly over the last year, through their coverage of everything from the global pandemic, to civil unrest, and to elections and geopolitical developments around the world. In 2020, our journalists were awarded the Pulitzer Prize in Breaking News Photography for 20 pictures that documented protests in Hong Kong. We are grateful for their efforts – and journalists everywhere – for their important work and contributions to society.
In January of this year, we marked an important part of our company’s journey with the closing of the sale of Refinitiv, formerly our Financial & Risk business, to London Stock Exchange Group (LSEG). We believe this gives us a greater opportunity than ever to sharpen our focus on our core professionals and news customers. Under LSEG’s ownership, Refinitiv continues to be the principal customer for Reuters News under a 30-year agreement for news and editorial content, providing continued support and presence for the world’s most respected news organization.
We look ahead with excitement, energy, and gratitude for our customers, colleagues and shareholders. Together, we will continue to step up to shape a brighter future, underpinned by strength of the communities, industries and markets we serve.
|
|
| |
| David Thomson Chairman of the Board |
Steve Hasker President & Chief Executive Officer | |
Certain statements in the letter are forward-looking. These forward-looking statements are based on certain assumptions and reflect our current expectations. As a result, forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. Some of the factors that could cause actual results to differ materially from current expectations are discussed in the “Risk Factors” section of our 2020 annual report as well as in other materials that we from time to time file with, or furnish to, the Canadian securities regulatory authorities and the U.S. Securities and Exchange Commission. There is no assurance that any forward-looking statements will materialize. You are cautioned not to place undue reliance on forward-looking statements, which reflect expectations only as of this date. Except as may be required by applicable law, we disclaim any intention or obligation to update or revise any forward-looking statements.
Management Proxy Circular and Notice of Annual Meeting of Shareholders
Table of Contents
Shareholder resources on our website
Annual Meeting of Shareholders
| · | Management proxy circular – www.tr.com/2021AGMcircular/ |
| · | Annual report – www.tr.com/2020annualreport/ |
| · | Virtual AGM User Guide – www.tr.com/2021AGMUserGuide/ |
Corporate Governance Documents
| · | Corporate Governance Guidelines, Board committee charters, and position descriptions – ir.tr.com/corporate-governance/governance-highlights |
Environmental, Social and Governance (ESG)
| · | Social Impact Report – www.tr.com/social-impact-report |
| · | Code of Business Conduct and Ethics – ir.tr.com/corporate-governance/code-conduct |
| · | Supply Chain Ethical Code – www.tr.com/en/resources/global-sourcing-procurement.html |
| · | Modern Slavery Act Transparency Statement – www.tr.com/en/modern-slavery-act.html |
Products and Services – www.tr.com
Investor Relations – ir.tr.com
Management Proxy Circular and Notice of Annual Meeting of Shareholders Page 1
Table of Contents
Frequently Referenced Information
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| Our Process for Designing and Determining Executive Compensation |
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| 2020 Named Executive Officer Compensation and Key Accomplishments |
73 | |||
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Page 2 Management Proxy Circular and Notice of Annual Meeting of Shareholders
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| Where to find Corporate Governance and Continuous Disclosure Documents |
98 | |||
| Thomson Reuters Trust Principles and Thomson Reuters Founders Share Company |
99 | |||
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| A-1 | ||||
| Appendix B – Shareholder Proposal |
B-1 |
Management Proxy Circular and Notice of Annual Meeting of Shareholders Page 3
Table of Contents
Fast Facts About Thomson Reuters
Thomson Reuters is a leading provider of business information services. Our products include highly specialized information-enabled software and tools for legal, tax, accounting and compliance professionals combined with the world’s most global news service – Reuters.
The table below describes some of our key operating characteristics:
| Attractive Industry |
Balanced and Diversified Leadership | Attractive Business Model | Strong Competitive Positioning | Disciplined Financial Policies | ||||
| · Currently our “Big 3” operate in an estimated $28 billion market segment expected to grow between 6% to 8% over the next 5 years
· Legal, Tax & Government market segments prime for content-driven innovation |
· A leader in key Legal Professionals, Corporates and Tax & Accounting Professionals market segments
· Resilient businesses, historically stable, which has been affirmed by our performance during the COVID-19 pandemic
· Approximately 500,000 customers; largest customer is approximately 2% of revenues (excluding the news and editorial content contract with Refinitiv) |
· 80% of revenues are recurring
· 90% of revenues are products delivered electronically or as software and services
· Strong and consistent cash generation capabilities |
· Proprietary content plus data and human expertise combined with artificial intelligence and machine learning are key differentiators
· Products deeply embedded in customers’ daily workflows
· 90% retention rate |
· Focused and incentivized on organic revenue growth and free cash flow growth
· Balance investing in business and returning capital to shareholders
· Committed to maintaining investment grade rating with stable capital structure
· Significant potential capital capacity over the next four years affords significant optionality | ||||
|
2020 full-year results:
|
Stock prices:
| |
| · Revenues – US$6.0 billion
· Operating profit – US$1.9 billion
· Adjusted EBITDA margin* – 33.0%
· Diluted earnings per share (EPS) – US$2.25
· Adjusted EPS* – US$1.85
· Cash flow from operations – US$1.75 billion
· Free cash flow* – US$1.3 billion
Stock exchange listings (Symbol: TRI):
· Toronto Stock Exchange (TSX)
· New York Stock Exchange (NYSE)
|
Closing price (April 12, 2021): C$114.16/ US$90.90
High (2020): C$113.34 / US$86.93
Low (2020): C$76.46 / US$52.75
Market capitalization (April 12, 2021):
US$45.0 billion
Dividend per common share (as of April 12, 2021):
$0.405 quarterly ($1.62 annualized)
We have increased our common share dividend for 28 consecutive years. |
All revenue information reflected in the first table above is based on our 2020 full-year results. Our “Big 3” segments refer to our Legal Professionals, Corporates and Tax & Accounting segments combined. The Refinitiv news and editorial contract represented approximately 6% of our 2020 revenues.
For more information about our company, visit www.tr.com
* Non-International Financial Reporting Standards (non-IFRS) financial measures. Please see the note in the “Additional Information” section of this circular.
Page 4 Management Proxy Circular and Notice of Annual Meeting of Shareholders
Table of Contents
About this Circular and Related Proxy Materials
We are providing this circular and proxy materials to you in connection with our annual meeting of shareholders to be held on Wednesday, June 9, 2021. As a shareholder, you are invited to attend the virtual meeting. If you are unable to attend, you may still vote by completing the enclosed proxy form.
This circular describes the items to be voted on at the meeting and the voting process and contains additional information about executive compensation, corporate governance practices and other matters that will be discussed at the meeting.
Unless otherwise indicated, all dollar amounts in this circular are expressed in U.S. dollars, and information is as of April 12, 2021. Unless otherwise indicated, applicable amounts translated to U.S. dollars from Canadian dollars utilized the average Canadian/U.S. dollar month-end exchange rate for 2020, which was C$1 = US$0.74588.
In this circular, the terms “we”, “us” and “our” refer to Thomson Reuters Corporation and our consolidated subsidiaries. The term “Woodbridge” refers to The Woodbridge Company Limited and other companies affiliated with it.
Please see the “Voting Information and How to Attend” section of this document for an explanation of how you can vote on the matters to be considered at the meeting, whether or not you decide to attend the meeting.
We are a Canadian company that is considered to be a “foreign private issuer” for U.S. federal securities law purposes. As a result, we have prepared this circular in accordance with applicable Canadian disclosure requirements.
Information contained on our website or any other websites identified in this circular is not part of this circular. All website addresses listed in this circular are intended to be inactive, textual references only. The Thomson Reuters logo and our other trademarks, trade names and service names mentioned in this circular are the property of Thomson Reuters.
Front cover photo credit: REUTERS/Dominic Ebenbichler.
Management Proxy Circular and Notice of Annual Meeting of Shareholders Page 5
Table of Contents
Highlights
This year’s meeting will cover the following items of business. Additional information is provided in this circular.
| Item of Business | Board Vote Recommendation | |||||||||||||
| 1. Financial statements
Receipt of our 2020 audited financial statements.
· Our 2020 annual consolidated financial statements are included in our 2020 annual report, which is available in the “Investor Relations” section of our website, www.tr.com.
· Shareholders who requested a copy of the 2020 annual report will receive it by mail or e-mail.
· Representatives from Thomson Reuters and our independent auditor, PricewaterhouseCoopers LLP, will be available to discuss any questions about our financial statements at the meeting. |
N/A | |||||||||||||
| 2. Election of Directors (page 18 of the circular)
At the meeting, 14 individuals are proposed to be elected to our Board of Directors. All of these individuals are currently directors of our company.
· A majority of our directors are independent and four of our directors (David Thomson, David Binet, Ed Clark and Peter Thomson) are affiliated with our principal shareholder, Woodbridge. Only one director (our CEO, Steve Hasker) is a member of management.
· The roles and responsibilities of the Chairman (David Thomson) and the CEO (Steve Hasker) are separate.
· Shareholders vote annually for individual directors. At last year’s annual meeting, our director nominees received an average of 97% “for” votes.
The director nominees for this year’s meeting are: |
FOR each director nominee | |||||||||||||
| Name |
Age | Director Since |
Principal occupation | Committees | Attendance in 2020 | Other public boards |
||||||||
| David Thomson |
63 | 1988 | Chairman of Woodbridge | – | 100% | 0 | ||||||||
| Steve Hasker |
51 | 2020 | President and CEO of Thomson Reuters | – | 100% | 1 | ||||||||
| Kirk E. Arnold ✓ |
61 | 2020 | Executive-in-Residence, General Catalyst Ventures | CG, HR, R | 100% | 3 | ||||||||
| David W. Binet |
63 | 2013 | President and CEO of Woodbridge | CG, HR, R | 100% | 0 | ||||||||
| W. Edmund Clark, C.M. |
73 | 2015 | Former Group President and CEO of TD Bank Group | CG, HR | 95% | 0 | ||||||||
| Michael E. Daniels ✓ |
66 | 2014 | Former SVP and Group Executive at IBM | A, CG, HR, R | 97% | 2 | ||||||||
| Kirk Koenigsbauer ✓ |
53 | 2020 | COO and Corporate VP, Microsoft | A, R | 100% | 0 | ||||||||
| Deanna Oppenheimer ✓ |
63 | 2020 | Founder, Cameoworks | A, CG | 100% | 2 | ||||||||
| Vance K. Opperman ✓ |
78 | 1996 | President and CEO, Key Investment | A, CG, HR, R | 97% | 1 | ||||||||
| Simon Paris ✓ |
51 | 2020 | CEO, Finastra | A | 100% | 1 | ||||||||
| Kim M. Rivera ✓ |
52 | 2019 | Former President, Strategy and Business Management and Chief Legal Officer, HP | A, R | 94% | 0 | ||||||||
| Barry Salzberg ✓ |
67 | 2015 | Former Global CEO of Deloitte | A, CG, R | 100% | 1 | ||||||||
| Peter J. Thomson |
55 | 1995 | Chairman of Woodbridge | HR | 100% | 0 | ||||||||
| Wulf von Schimmelmann ✓ |
74 | 2011 | Former CEO of Deutsche Postbank | CG, HR | 95% | 0 | ||||||||
| ✓ = independent Committee legend: A = Audit; CG = Corporate Governance; HR = Human Resources; and R = Risk |
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Page 6 Management Proxy Circular and Notice of Annual Meeting of Shareholders
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| Item of Business | Board Vote Recommendation |
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| 3. Appointment of PricewaterhouseCoopers LLP as Auditor (page 53 of the circular)
We are proposing to re-appoint PricewaterhouseCoopers LLP as our independent auditor for another year until the 2022 annual meeting of shareholders. Our Audit Committee is directly responsible for overseeing the independent auditor during the year. |
FOR | |||||||||||
| 4. Advisory resolution on executive compensation (page 56 of the circular)
We will have a non-binding advisory resolution on executive compensation, which is sometimes called “say on pay”. This will provide you with an opportunity to provide a view on our company’s approach to executive compensation, as described in this circular. |
|
FOR |
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“Pay for performance” is the foundation of our compensation philosophy for our named executive officers. Their compensation is primarily variable and performance-based, utilizing multiple and complementary financial measures that are aligned with our strategy to drive shareholder value. | ||||||||||||
| We appointed Steve Hasker as our new CEO and Mike Eastwood as our new CFO in March 2020. When the Board approved their compensation arrangements:
· Our new CEO’s and new CFO’s total target direct compensation reflected consideration of applicable market rates, each executive’s experience and Thomson Reuters’ smaller size following the 2018 separation of the company’s former Financial & Risk business.
· Steve Hasker’s 2020 target total direct compensation was approximately 28% lower than our former CEO’s 2019 target total direct compensation.
· Mike Eastwood’s 2020 target total direct compensation was approximately 26% lower than our former CFO’s 2019 target total direct compensation.
In 2020, “pay for performance” continued to be a key part of our compensation philosophy for our named executive officers.
✓ 2020 compensation decisions were aligned with our strategic objectives – During 2020, the HR Committee of the Board of Directors was actively engaged in reviewing and discussing the design and approach to our compensation, talent and culture programs to fit the Thomson Reuters of the future. In 2020, a significant portion of executive pay was at risk and linked to both operational performance and stock price. Our incentive plan goals reflected our published business outlook, operating plan and long-term strategy. Annual incentive awards focused on growth objectives for the year. The table below reflects summary 2020 compensation information for our named executive officers who are currently executive officers. Our former CEO and CFO, Jim Smith and Stephane Bello, who served in their roles through mid-March 2020, are also considered named executive officers for 2020 and their compensation is also discussed in this circular.
| ||||||||||||
| Named executive officer | Base salary (annualized) |
Target annual incentive award (cash) – percentage |
Long-term incentive award (equity-based) – percentage of base salary |
“At risk” percentage | ||||||||
| Steve Hasker President and CEO |
C$1,495,000 | 200% | 550% | 88% | ||||||||
| Mike Eastwood CFO |
C$925,000 | 125% | 225% | 77% | ||||||||
| David Wong Chief Product Officer |
US$600,000 | 125% | 225% | 78% | ||||||||
| Brian Peccarelli COO, Customer Markets |
US$750,000 | 175% | 200% | 79% | ||||||||
| Michael Friedenberg President, Reuters |
US$850,000 | 125% | 150% | 73% | ||||||||
|
✓ Our compensation program is strongly aligned with shareholder return and value – Our executive officer compensation is aligned with total shareholder return. We also require our executive officers to maintain meaningful levels of share ownership that are multiples of their respective base salaries, creating a strong link to our shareholders and the long-term success of our company. | ||||||||||||
| Named executive officer | Share Ownership Guideline (base salary multiple) |
|||||||||||
| Steve Hasker | 6x | |||||||||||
| Mike Eastwood | 4x | |||||||||||
| David Wong, Brian Peccarelli and Michael Friedenberg | 3x | |||||||||||
|
✓ We benchmark executive compensation and performance against global peer companies that we compete with for customers and talent – The HR Committee utilizes a global peer group for executive compensation purposes. For compensation benchmarking of executive officers based in Toronto, the HR Committee also utilizes a separate Canadian peer group as a secondary reference point.
✓ Our compensation program is aligned with good governance practices and has received strong shareholder support in recent years – Our plans and programs reflect strong governance principles. The HR Committee has an independent advisor (FW Cook) for executive compensation matters. We also engage with our shareholders on compensation matters during the year and we provide a “say on pay” resolution each year at our annual meeting of shareholders. Over the last five years, approximately 97% of votes have been cast “for” our “say on pay” advisory resolutions. |
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Management Proxy Circular and Notice of Annual Meeting of Shareholders Page 7
Table of Contents
| Item of Business | Board Vote Recommendation |
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✓ We do not believe that we have any problematic pay practices and risk is taken into account in our compensation programs – The HR Committee’s independent advisor reviews our compensation program to evaluate the degree to which it encourages risk taking in the context of our overall enterprise risk profile as well as recognized market best practices. The independent advisor has concluded that our programs appear unlikely to create incentives for excessive risk taking and include meaningful safeguards to mitigate compensation program risk.
What we do
✓ The HR Committee is comprised of a majority of independent directors and it uses an independent executive compensation consultant to assess our executive compensation programs;
✓ Most of an executive’s compensation is comprised of longer-term performance opportunities with less emphasis on shorter-term performance opportunities;
✓ The base salary component of each executive’s compensation is fixed;
✓ Our HR Committee annually reviews and determines award design and there are principles and processes with management for approving design changes and performance goals;
✓ The HR Committee reviews performance criteria for financial metrics used in our incentive awards, including threshold, target and maximum amounts, to ensure that they are challenging, but achievable;
✓ Our incentive awards utilize a number of different financial performance measures and do not rely on a single metric. Each metric has a threshold, target and maximum performance target with pre-defined payout amounts;
✓ Our annual incentive awards and performance restricted share units (PRSUs) issued as part of long-term incentive awards have caps for the maximum potential payouts;
✓ Our HR Committee has discretionary authority to make fairness-related and other adjustments to performance award opportunities that it may deem appropriate;
✓ We have robust share ownership guidelines for our executive officers which further ties their interests to those of our shareholders over the long-term; and
✓ We have a recoupment (or “clawback”) policy that permits us to seek reimbursement from the CEO and all of the other executive officers in certain circumstances.
What we don’t do
X Executive officers are prohibited from hedging or pledging company shares;
X We don’t offer single trigger change of control rights;
X We don’t guarantee minimum payout levels in our incentive plans or minimum vesting for equity awards; and
X We don’t guarantee increases to base salaries or target incentive award opportunities.
Please see the “Compensation Discussion and Analysis” section of the circular for additional information. |
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| 5. Shareholder proposal (page B-1 of the circular)
Consider the shareholder proposal set out in Appendix B of this circular. |
AGAINST | |||||||||||
| 6. Other business
If any other items of business are properly brought before the meeting (or any adjourned or postponed meeting), shareholders will be asked to vote. We are not aware of any other items of business at this time. |
N/A | |||||||||||
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Voting Information and How to Attend
Why is Thomson Reuters holding a virtual-only meeting?
The health and safety of our communities, shareholders, employees and other stakeholders is our top priority. In light of the ongoing COVID-19 pandemic, we are holding the meeting as a virtual-only meeting, which will be conducted through a live webcast. Shareholders will have an opportunity to attend the meeting, submit or ask questions and vote in real time through a web-based platform, regardless of geographic location and share ownership. Shareholders will not be able to attend the meeting in person.
Who can vote at the meeting?
If you held common shares as of 5:00 p.m. (Eastern Daylight Time) on April 12, 2021 (the record date), then you are entitled to vote at the meeting or any adjourned or postponed meeting. Each share is entitled to one vote. As of April 12, 2021, there were 495,577,640 common shares outstanding.
We also have 6,000,000 Series II preference shares outstanding, but these shares do not have voting rights at the meeting.
How many votes are required for approval?
A simple majority (more than 50%) of votes cast, during the meeting online or by proxy, is required to approve each item of business.
Woodbridge, our principal and controlling shareholder, beneficially owned approximately 66% of our outstanding common shares as of April 12, 2021. Woodbridge has advised our company that it will vote FOR the election of each director nominee, the appointment of PricewaterhouseCoopers LLP as auditor, and the advisory resolution on executive compensation and AGAINST the shareholder proposal set out in Appendix B of this circular.
We have a majority voting policy that applies to the election of directors at the annual meeting of shareholders. This means that if a director receives more “withhold” votes than “for” votes at the meeting, then the director will immediately tender his or her resignation to the Chairman. This would be effective if accepted by the Board. The Corporate Governance Committee will consider a director’s offer to resign and make a recommendation to the Board as to whether to accept it. The Board will accept resignations, except in exceptional circumstances. The Board will have 90 days from the annual meeting to make and publicly disclose its decision by news release either to accept or reject the resignation (including reasons for rejecting the resignation, if applicable). As Woodbridge has indicated that it will vote FOR the election of each director nominee, each director will receive more than a majority of votes at the meeting.
How do I vote?
You have two choices – you can vote by proxy, or you can attend the virtual-only meeting and vote during the meeting by online ballot through the live webcast platform. The voting process is different for each choice. The voting process also depends on whether you are a registered or non-registered shareholder.
You should first determine whether you are a registered or non-registered holder of our common shares. Most of our shareholders are non-registered holders.
| · | You are a registered shareholder if your name appears directly on your share certificates, or if you hold your common shares in book-entry form through the direct registration system (DRS) on the records of our transfer agent, Computershare Trust Company of Canada. |
| · | You are a non-registered shareholder if you own shares indirectly and the shares are registered in the name of an intermediary. For example, you are a non-registered shareholder if: |
| — | your common shares are held in the name of a bank, trust company, securities broker, trustee or custodian; or |
| — | you hold Depositary Interests representing our common shares which are held in the name of Computershare Company Nominees Limited as nominee and custodian. |
Non-registered shareholders are sometimes referred to as “beneficial owners”.
How do I attend and participate in the meeting?
We are holding the meeting in a virtual-only format, which will be conducted through a live webcast. Shareholders will not be able to attend the meeting in person.
How you vote will depend on whether you’re a registered shareholder or a non-registered shareholder (as discussed above).
Registered shareholders and duly appointed proxyholders (including non-registered shareholders who have duly appointed themselves as proxyholder) will be able to attend and vote at the meeting online. Guests (including non-registered shareholders who have not duly appointed themselves as proxyholder) can log into the meeting as described below. Guests will be able to listen to the meeting but will not be able to vote at the meeting.
Additional information about participation in the meeting is set forth in our Virtual AGM User Guide which accompanies this circular and is available on our website.
If you attend the meeting, it is your responsibility to have Internet connectivity for the duration of the meeting.
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| Registered shareholders | You are a registered shareholder if your name appears directly on your share certificates, or if you hold your common shares in book-entry form through the direct registration system (DRS) on the records of our transfer agent, Computershare Trust Company of Canada. | |
| If you want to vote by proxy before the meeting | You may authorize our directors who are named on the enclosed proxy form to vote your shares as your proxyholder.
You may give voting instructions through the Internet, mail or telephone. Please refer to your proxy form for instructions. | |
| If you want to attend and vote at the meeting | You may vote at the meeting by completing an online ballot during the meeting, as further described below. Do not complete or return your proxy form, as your vote will be taken at the meeting. If you wish to vote common shares registered in the name of a legal entity, that entity must submit a properly executed proxy form to Computershare Trust Company of Canada by the proxy cut-off time which appoints you to vote the common shares on its behalf. Follow the instructions below for appointing a proxyholder if applicable.
Please follow these steps:
1. Log in online at www.tr.com/agm2021. We recommend that you log into the meeting at least 15 minutes before the meeting starts.
2. Click “Shareholder”.
3. Enter your control number as your username. The control number is located on your proxy form or in the e-mail notification you received from Computershare Trust Company of Canada.
4. Enter the password: tri2021 (case sensitive).
5. Follow the instructions to view the meeting and vote when prompted.
Once you log into the meeting and you accept the terms and conditions, any vote that you cast at the meeting will revoke any proxy that you previously submitted. If you do not wish to revoke a previously submitted proxy, you should not vote during the meeting. | |
| If you want to appoint a third party as proxy to attend and vote at the meeting | You may appoint another person (other than our directors who are named on your proxy form) to attend the meeting on your behalf and vote your shares as your proxyholder. If you choose this option, you must submit your proxy form appointing the third party AND register the third party proxyholder as described below. Registering your proxyholder is an additional step to be completed AFTER you have submitted your proxy form. Failure to register your proxyholder will result in the proxyholder not receiving a username to attend, participate or vote at the meeting. You may choose anyone to be your proxyholder – the person does not have to be another shareholder.
Please follow these steps:
1. Submit your proxy form – To appoint a third party proxyholder, insert that person’s name into the appropriate space on the proxy form. Follow the instructions for submitting the proxy form. This step must be completed before registering the proxyholder as step 2 below.
2. Register your proxyholder – To register a third party as your proxyholder, you MUST visit www.computershare.com/ThomsonReuters by 5:00 p.m. (Eastern Daylight Time) on June 7, 2021 and provide Computershare Trust Company of Canada with the required proxyholder contact information so that Computershare Trust Company of Canada may provide the proxyholder with a username by e-mail shortly after this deadline. Without a username, proxyholders will not be able to ask questions or vote at the meeting but will be able to participate as a guest.
If you want to appoint more than one proxyholder to each vote a subset of your shares, you must submit your proxy by mail indicating the number of shares to be voted by each proxyholder, and also complete step 2 above. | |
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| If you want to attend the meeting as a guest | Guests can log into the meeting as set forth below. Guests can listen to the meeting but are not able to submit or ask questions or vote at the meeting.
Please follow these steps:
1. Log in online at www.tr.com/agm2021. We recommend that you log into the meeting at least 15 minutes before the meeting starts.
2. Click “Guest” and complete the online form.
| |
| Deadline for returning your proxy form | Your completed proxy must be received by Computershare Trust Company of Canada by 5:00 p.m. (Eastern Daylight Time) on Monday, June 7, 2021. | |
| Non-registered shareholders | You are a non-registered shareholder if you own shares indirectly and the shares are registered in the name of an intermediary. For example, you are a non-registered shareholder if your common shares are held in the name of a bank, trust company, securities broker, trustee or custodian; or you hold Depositary Interests representing our common shares which are held in the name of Computershare Company Nominees Limited as nominee and custodian.
Non-registered shareholders are sometimes referred to as “beneficial owners”. | |
| If you want to vote by proxy before the meeting |
If you are a non-registered shareholder who receives a proxy form or voting instruction form (VIF), you should follow your intermediary’s instruction for completing the form. Holders of Depositary Interests will receive a voting form of instruction or direction from Computershare Investor Services PLC. | |
| If you want to attend and vote at the meeting | If you are a non-registered shareholder and you wish to ask questions or vote at the meeting, you have to appoint yourself as a proxyholder first and then also register with Computershare Trust Company of Canada. This is because our company and our transfer agent, Computershare Trust Company of Canada, do not have records of the non-registered shareholders of the company. As a result, we would have no knowledge of your shareholdings or entitlement to vote, unless you appoint yourself as proxyholder. If you’re a non-registered shareholder and don’t appoint yourself as proxyholder, you can still attend the virtual meeting as a guest, but you won’t be able to submit or ask questions or vote at the meeting.
Please follow these steps:
1. To appoint yourself as proxyholder, insert your name in the appropriate space on the voting instruction form. Do not fill out your voting instructions. Follow the instructions by submitting the voting instruction form by the appropriate deadline as the instructions and deadline may vary depending on the intermediary. It is important that you comply with the signature and return instructions provided by your intermediary. This step must be completed before registering a proxyholder as step 2 below.
2. To register yourself as a proxyholder, you must visit www.computershare.com/ThomsonReuters by 5:00 p.m. (Eastern Daylight Time) on June 7, 2021 and provide Computershare Trust Company of Canada with your required proxyholder contact information so that Computershare Trust Company of Canada may provide you with a username by e-mail shortly after this deadline. Without a username, you will not be able to vote at the meeting but will be able to participate as a guest.
3. Log in online at www.tr.com/agm2021. We recommend that you log into the meeting at least 15 minutes before the meeting starts.
4. Click “Shareholder”.
5. Enter your username that was provided by Computershare Trust Company of Canada.
| |
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6. Enter the password: tri2021 (case sensitive).
7. Follow the instructions to view the meeting and vote when prompted.
If you are a non-registered shareholder located in the United States and you wish to appoint yourself as a proxyholder, in addition to the steps above, you must first obtain a valid legal proxy from your intermediary. To do so, please follow these steps:
1. Follow the instructions from your intermediary included with the legal proxy form and the voting information form sent to you, or contact your intermediary to request a legal proxy form or a legal proxy if you have not received one.
2. After you receive a valid legal proxy from your intermediary, you must then submit the legal proxy to Computershare Trust Company of Canada. You can send the legal proxy by e-mail or by courier to: uslegalproxy@computershare.com (if by e-mail), or Computershare Trust Company of Canada, Attention: Proxy Dept., 8th Floor, 100 University Avenue, Toronto, Ontario M5J 2Y1, Canada (if by courier). The legal proxy in both cases must be labeled “Legal Proxy” and received no later than the voting deadline of 5:00 p.m. (Eastern Daylight Time) on Monday, June 7, 2021.
3. Computershare Trust Company of Canada will provide duly appointed proxyholders with a username by e-mail after the voting deadline has passed. Please note that you are required to register your appointment as a proxyholder at www.computershare.com/ThomsonReuters as noted above. | ||
| If you want to appoint a third party as proxy to attend and vote at the meeting | You may appoint another person (other than our directors who are named on your voting instruction form) to attend the meeting on your behalf and vote your shares as your proxyholder. If you choose this option, you must submit your voting instruction form appointing the third party AND register the third party proxyholder as described below. Registering your proxyholder is an additional step to be completed AFTER you have submitted your voting instruction form. Failure to register your proxyholder will result in the proxyholder not receiving a username to attend, participate or vote at the meeting. You may choose anyone to be your proxyholder – the person does not have to be another shareholder.
Please follow these steps:
1. Submit your voting instruction form – To appoint a third party proxyholder, insert the person’s name into the appropriate space on the voting instruction form. Follow the instructions by submitting the voting instruction form by the appropriate deadline as the instructions and deadline may vary depending on the intermediary. It is important that you comply with the signature and return instructions provided by your intermediary. This step must be completed before registering a proxyholder as step 2 below.
2. Register your proxyholder – To register another person as your proxyholder, you MUST visit www.computershare.com/ThomsonReuters by 5:00 p.m. (Eastern Daylight Time) on June 7, 2021 and provide Computershare Trust Company of Canada with the required proxyholder contact information so that Computershare Trust Company of Canada may provide the proxyholder with a username by e-mail shortly after this deadline. Without a username, proxyholders will not be able to vote at the meeting but will be able to participate as a guest.
If you are a non-registered shareholder located in the United States and you wish to appoint a third party as a proxyholder, in addition to the steps above, you must first obtain a valid legal proxy from your intermediary. To do so, please follow these steps:
1. Follow the instructions from your intermediary included with the legal proxy form and the voting information form sent to you, or contact your intermediary to request a legal proxy form or a legal proxy if you have not received one.
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2. After you receive a valid legal proxy from your intermediary, you must then submit the legal proxy to Computershare Trust Company of Canada. You can send the legal proxy by e-mail or by courier to: uslegalproxy@computershare.com (if by e-mail), or Computershare Trust Company of Canada, Attention: Proxy Dept., 8th Floor, 100 University Avenue, Toronto, Ontario M5J 2Y1, Canada (if by courier). The legal proxy in both cases must be labeled “Legal Proxy” and received no later than the voting deadline of 5:00 p.m. (Eastern Daylight Time) on Monday, June 7, 2021.
3. Computershare Trust Company of Canada will provide duly appointed proxyholders with a username by e-mail after the voting deadline has passed. Please note that you are required to register the third party’s appointment as a proxyholder at www.computershare.com/ThomsonReuters as noted above. | ||
| If you want to attend the meeting as a guest | Guests, including non-registered shareholders who have not duly appointed themselves as proxyholders, can log into the meeting as set forth below. Guests can listen to the meeting but are not able to submit or ask questions or vote at the meeting.
Please follow these steps:
1. Log in online at www.tr.com/agm2021. We recommend that you log into the meeting at least 15 minutes before the meeting starts.
2. Click “Guest” and complete the online form. | |
| Deadline for returning your form | Please check your voting instruction form for the specific deadline. Your intermediary will need your voting instructions sufficiently in advance of the proxy deadline to enable your intermediary to act on your instructions prior to the deadline. | |
How do I submit or ask questions during the meeting?
In writing (type/chat)
Registered shareholders and duly appointed proxyholders (including non-registered shareholders who have duly appointed themselves as proxyholder) participating in the meeting may ask questions via the website for the meeting by typing and submitting their question in writing. Select the messaging icon from within the navigation bar and type your question at the bottom of the screen. Once finished, press the “send” icon to the right of the message box to submit your question.
By phone
During the meeting, registered shareholders and duly appointed proxyholders (including non-registered shareholders who have duly appointed themselves as proxyholder) will also be able to ask questions by phone. To ask a question by phone, send your phone number using the messaging icon (as described above) and an operator will call you at that number during the Q&A session of the meeting.
Non-registered shareholders who have not duly appointed themselves as proxyholder will be able to attend the meeting as guests but will not be able to submit or ask questions during the meeting.
If you prefer, you may also submit written questions in advance of the meeting which will be addressed during the Q&A session by e-mailing your question to investor.relations@tr.com.
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Other Questions and Answers
Can I vote my shares by filling out and returning the notice?
No. The notice sets forth the items to be voted on at the meeting, but you cannot vote by marking the notice and returning it. The notice provides instructions on how to vote.
What’s the deadline for receiving my proxy or voting instructions?
If you are a registered shareholder, your proxy must be received by 5:00 p.m. (Eastern Daylight Time) on Monday, June 7, 2021.
Non-registered shareholders may be subject to earlier deadlines as specified in their proxy or voting instructions.
If the meeting is adjourned or postponed, the proxy cut-off deadline will be no later than 48 hours (excluding Saturdays, Sundays and holidays) before any adjourned or postponed meeting.
How will my shares be voted if I appoint a proxyholder?
Your proxyholder must vote your shares on each matter according to your instructions if you have properly completed and returned a proxy form. If you have not specified how to vote on a particular matter, then your proxyholder can vote your shares as he or she sees fit. If you have appointed our directors named on your proxy form or voting instruction form as your proxyholder, and you have not specified how you want your shares to be voted, your shares will be voted FOR the election of each director nominee, the appointment of PricewaterhouseCoopers LLP as auditor, and the advisory resolution on executive compensation and AGAINST the shareholder proposal set out in Appendix B of this circular.
What happens if any amendments are properly made to the items of business to be considered or if other matters are properly brought before the meeting?
Your proxyholder will have discretionary authority to vote your shares as he or she sees fit. As of the date of this circular, management knows of no such amendment, variation or other matter expected to come before the meeting.
If I change my mind, how do I revoke my proxy or voting instructions?
Non-registered shareholders
You may revoke your proxy by sending written notice to your intermediary, so long as the intermediary receives your notice at least seven days before the meeting (or as otherwise instructed by your intermediary). This gives your intermediary time to submit the revocation to Computershare Trust Company of Canada. If your revocation is not received in time, your intermediary is not required to act on it.
Registered shareholders
You may revoke your proxy or voting instructions in any of the following ways:
| · | By completing and signing a proxy form with a later date than the proxy form you previously returned, and delivering it to Computershare Trust Company of Canada at any time before 5:00 p.m. (Eastern Daylight Time) on Monday, June 7, 2021. If the meeting is adjourned or postponed, the deadline will be no later than 48 hours before any adjourned or postponed meeting; |
| · | By completing a written statement revoking your instructions, which is signed by you or your attorney authorized in writing, and delivering it: |
| — | To the offices of Computershare Trust Company of Canada at any time before 5:00 p.m. (Eastern Daylight Time) on Tuesday, June 8, 2021. If the meeting is adjourned or postponed, the deadline will be no later than 48 hours before any adjourned or postponed meeting; or |
| — | To the Chair of the meeting before the meeting starts; or |
| — | In any other manner permitted by law. |
| · | If you use your control number as a username to log into the meeting and you accept the terms and conditions, any vote that you cast at the meeting will revoke any proxy that you previously submitted. If you do not wish to revoke a previously submitted proxy, you should not vote during the meeting. |
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How can I contact Computershare Trust Company of Canada if I have questions?
You can contact Computershare Trust Company of Canada directly at the following numbers:
| Canada and the United States | 1.800.564.6253 | |
| Other countries | 1.514.982.7555 |
Who is soliciting my proxy and distributing proxy-related materials?
Thomson Reuters management and directors may solicit your proxy for use at the meeting and any adjourned or postponed meeting. Our management and directors may solicit proxies by mail and in person. We are paying all costs of solicitation. Intermediaries will distribute proxy-related materials directly to non-objecting beneficial owners on our behalf. We are paying for intermediaries to send proxy-related materials to both non-objecting beneficial owners and objecting beneficial owners.
Is my vote confidential?
Yes. Our registrar, Computershare Trust Company of Canada, independently counts and tabulates the proxies and votes cast at the meeting through the live webcast platform to preserve the confidentiality of individual shareholder votes. Proxies are referred to us only in cases where a shareholder clearly intends to communicate with management, in the event of questions as to the validity of a proxy or where it is necessary to do so to meet applicable legal requirements.
Voting results
Following the meeting, we will post the voting results in the “Investor Relations” section of our website, www.tr.com. We will also file a copy of the results with the Canadian securities regulatory authorities at www.sedar.com and the U.S. Securities and Exchange Commission at www.sec.gov. For more information, see the “Additional Information” section of this circular.
Who do I contact if I need technical assistance for the meeting?
If you encounter any difficulties with the virtual platform on the day of the meeting, please go to www.lumiglobal.com/faq for frequently asked questions and click on the support button for assistance.
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Annual and Quarterly Financial Statements and Related MD&A
Our annual and quarterly reports and earnings releases are available in the “Investor Relations” section of our website, www.tr.com. Please also see the “Electronic Delivery of Shareholder Communications” section below for information about electronic delivery of these reports and other shareholder communications.
Why did I receive a notice in the mail regarding the website availability of this circular and proxy materials?
We are using the “notice-and-access” system for the delivery of our proxy materials through our website, similar to last year’s meeting. Shareholders who receive a notice have the ability to access the proxy materials on our website and to request a paper copy of the proxy materials. Instructions on how to access the proxy materials through our website or to request a paper copy may be found in the notice.
Electronic delivery reduces the cost and environmental impact of producing and distributing paper copies of documents in very large quantities. It also provides shareholders with faster access to information about Thomson Reuters.
Why didn’t I receive a printed notice in the mail about the website availability of the proxy materials?
Shareholders who previously signed up for electronic delivery of our proxy materials will continue to receive them by e-mail and will not receive a printed notice in the mail.
How do I vote under the “notice-and-access” system?
The voting process is the same as described in the “Voting Information and How to Attend” section of this circular. You have two choices – you can vote by proxy, or you can attend the meeting and vote during the meeting by online ballot through the live webcast platform.
Electronic Delivery of Shareholder Communications
Does Thomson Reuters provide electronic delivery of shareholder communications?
Yes. Electronic delivery is a voluntary program for our shareholders. Under this program, an e-mail notification (with links to the documents posted on our website) is sent to you.
Electronic delivery reduces the cost and environmental impact of producing and distributing paper copies of documents in very large quantities. It also provides shareholders with faster access to information about Thomson Reuters.
How can I enroll for electronic delivery of shareholder communications?
For most non-registered shareholders (other than holders of our Depositary Interests), please go to www.proxyvote.com for more instructions and to register. You will need your Enrollment Number/Control Number. You can find this number on your voting instruction form/proxy form.
If you are a registered shareholder, please go to www.investorcentre.com (country – Canada) and click on “Sign up for eDelivery” at the bottom of the page. You will need information from your proxy form to register.
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Principal Shareholder and Share Capital
As of April 12, 2021, Woodbridge beneficially owned 327,093,293 of our common shares, or approximately 66% of our outstanding common shares. Woodbridge is the principal and controlling shareholder of Thomson Reuters.
Woodbridge, a private company, is the primary investment vehicle for members of the family of the late Roy H. Thomson, the first Lord Thomson of Fleet. Woodbridge is a professionally managed company that, in addition to its controlling interest in Thomson Reuters, has other substantial investments.
Prior to his passing in 2006, Kenneth R. Thomson controlled our company through Woodbridge. He did so by holding shares of a holding company of Woodbridge, Thomson Investments Limited. Under his estate arrangements, the 2003 TIL Settlement, a trust of which the trust company subsidiary of a Canadian chartered bank is trustee and members of the family of the late first Lord Thomson of Fleet are beneficiaries, holds those holding company shares. Kenneth R. Thomson established these arrangements to provide for long-term stability of the business of Woodbridge. The equity of Woodbridge continues to be owned by members of successive generations of the family of the first Lord Thomson of Fleet.
Under the estate arrangements of Kenneth R. Thomson, the directors and officers of Woodbridge are responsible for its business and operations. In certain limited circumstances, including very substantial dispositions of our company’s common shares by Woodbridge, the estate arrangements provide for approval of the trustee to be obtained.
Note 31 to our 2020 annual consolidated financial statements provides information on certain transactions that we entered into with Woodbridge in 2020 and 2019.
To our knowledge, no other person beneficially owns, directly or indirectly, 10% or more of our common shares.
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This section includes the following information:
| · | Profiles for each director nominee; |
| · | Compensation that we paid to our directors in 2020; and |
| · | Our corporate governance structure and practices. |
HIGHLIGHTS
| · | A majority of our directors are independent and only one director (our CEO) is a member of management; |
| · | The roles and responsibilities of the Chairman and the CEO are separate; and |
| · | All of the nominees are currently directors of our company. |
Board Changes in 2020
We welcomed and successfully onboarded five new directors in 2020, which has brought new perspectives and experiences to the boardroom. Kirk Arnold joined the Board in January, Steve Hasker (our new CEO) and Kirk Koenigsbauer both joined in March and Deanna Oppenheimer and Simon Paris were both appointed in November. Our former CEO, Jim Smith, stepped down from the Board when Steve Hasker became our new CEO. Two of our former directors, Sheila Bair and Kristin Peck, decided not to stand for re-election at last year’s meeting in June.
Voting
You will be asked to vote for each director on an individual basis. Each nominee is proposed to be elected for a term ending at our 2022 annual meeting of shareholders. All of the nominees are currently directors of our company. Each of our directors was elected at our 2020 annual meeting of shareholders except for Deanna Oppenheimer and Simon Paris, who were appointed in November 2020. Profiles for each nominee are provided on the following pages.
The Board unanimously recommends that you vote FOR the election of the following 14 nominees to the Thomson Reuters Board of Directors: David Thomson, Steve Hasker, Kirk E. Arnold, David W. Binet, W. Edmund Clark, C.M., Michael E. Daniels, Kirk Koenigsbauer, Deanna Oppenheimer, Vance K. Opperman, Simon Paris, Kim M. Rivera, Barry Salzberg, Peter J. Thomson and Wulf von Schimmelmann.
Management does not believe that any of the nominees will be unable to serve as a director but, if this should occur for any reason prior to the meeting, the persons named in the enclosed proxy form may vote for another nominee at their discretion.
Following the meeting, we will issue a press release that includes the number of votes cast for and withheld from each individual director. At last year’s annual meeting, our director nominees received an average of 97% “for” votes. Additional information is provided in each nominee’s profile on the following pages.
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Director qualifications, skills and experiences
We believe that all director nominees possess character, integrity, judgment, business experience, a record of achievement and other skills and talents which enhance the Board and the overall management of the business and affairs of Thomson Reuters. Each director nominee understands our company’s principal operational and financial objectives, plans and strategies, financial position and performance and the performance of Thomson Reuters relative to our principal competitors. The Corporate Governance Committee considered these qualifications in determining to recommend the director nominees for election.
The following table, or skills matrix, summarizes the skills and areas of experience indicated by each director nominee. Our Board believes that these skills and experiences are necessary for it to carry out its mandate. The skills matrix is reviewed and updated annually.
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| Accounting/Audit |
✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||||||||||||||||||||||
| Board experience (with other companies) |
✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||||||||||||||||
| Corporate governance |
✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||||||||||||||
| Environmental, Social and Governance (ESG) / Corporate Social Responsibility (CSR) |
✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||||||
| Executive leadership |
✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||||
| Finance |
✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||||||||
| Government relations/public sector |
✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||||||||||||
| Human Resources/Human Capital Management (HCM) |
✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||||||||||||||||
| Industries in which Thomson Reuters business segments operate |
✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||||||||||||||||
| International business |
✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||||||||||||||
| Investment management |
✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||||||||||
| Legal |
✓ | ✓ | ✓ | ✓ | ||||||||||||||||||||||||
| M&A |
✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||||||||||||||||
| Media/Publishing |
✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||||||||||||
| Operations |
✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||||||||||||||||||
| Risk management |
✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||||||||
| Sales & Marketing |
✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||||||||
| Strategy |
✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||||||
| Tax |
✓ | ✓ | ✓ | |||||||||||||||||||||||||
| Technology |
✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
Management Proxy Circular and Notice of Annual Meeting of Shareholders Page 19
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Board Diversity
The Board also values the benefits that diversity can bring to the boardroom and throughout Thomson Reuters. Diversity promotes the inclusion of different perspectives and ideas, mitigates against group think and improves oversight, decision-making and governance.
While the Corporate Governance Committee of the Board focuses on finding the best qualified candidates for the Board, a nominee’s diversity may be considered favorably in his or her assessment.
| In 2020, we updated the definition of diversity in our Corporate Governance Guidelines (which reflect our policies in this area). The guidelines provide that diversity includes business experience, thought, style, culture, gender, geographic background, race, visible minorities, national origin, Indigenous persons, religion, gender identity and expression, sexual orientation, disability, age and other personal characteristics.
|
Three of the 14 director nominees proposed for election at the meeting (21%) are women. One of our directors has self-identified as a visible minority.
A majority of the Board is independent. Under the Corporate Governance Guidelines adopted by the Board, a director is not considered independent unless the Board affirmatively determines that the director has no “material relationship” with Thomson Reuters. In determining the independence of directors, the Board considers all relevant facts and circumstances. In March 2021, the Board conducted its annual assessment of the independence of its members and determined that nine of the 14 directors (approximately 64%) serving on the Board were independent.
In determining independence, the Board examined and relied on the applicable definitions of “independent” in the NYSE listing standards and Canadian Securities Administrators’ National Instrument 58-101. The Board’s determination of independence was also based on responses to questionnaires completed by directors.
For the Board to function independently from management:
| · | The roles and responsibilities of the Chairman (David Thomson) and the CEO (Steve Hasker) are separate; |
| · | We have a Lead Independent Director (Vance Opperman); and |
| · | The Audit Committee is comprised entirely of independent directors (as required by applicable law) and the Corporate Governance Committee, HR Committee and Risk Committee each have a majority of independent directors. |
| Director Independence | ||||||||
| Name of Director Nominee |
Management | Independent | Not Independent | Reason for Non-Independence | ||||
| David Thomson |
✓ | A Chairman of Woodbridge | ||||||
| Steve Hasker |
✓ | ✓ | President & Chief Executive Officer of Thomson Reuters | |||||
| Kirk E. Arnold |
✓ | |||||||
| David W. Binet |
✓ | President of Woodbridge | ||||||
| W. Edmund Clark, C.M. |
✓ | Advisor to the trustee of the 2003 TIL Settlement and Woodbridge | ||||||
| Michael E. Daniels |
✓ | |||||||
| Kirk Koenigsbauer |
✓ | |||||||
| Deanna Oppenheimer |
✓ | |||||||
| Vance K. Opperman |
✓ | |||||||
| Simon Paris |
✓ | |||||||
| Kim M. Rivera |
✓ | |||||||
| Barry Salzberg |
✓ | |||||||
| Peter J. Thomson |
✓ | A Chairman of Woodbridge | ||||||
| Wulf von Schimmelmann |
✓ | |||||||
| Total |
1 | 9 | 5 | |||||
Page 20 Management Proxy Circular and Notice of Annual Meeting of Shareholders
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David Thomson, David Binet, Ed Clark and Peter Thomson are not members of Thomson Reuters executive management team. With its substantial equity investment in Thomson Reuters, Woodbridge considers that its interests as a shareholder are aligned with those of all other shareholders.
In determining the independence of directors, the Board also considers that in the normal course of business, we provide services to, and receive services from, companies with which some of the independent directors are affiliated. Based on the specific facts and circumstances, the Board determined in March 2021 that these relationships were immaterial.
Tenure
Our Board has not adopted a mandatory retirement age or term limits for individual directors. We believe that individuals can continue to remain effective directors beyond a mandated retirement age or maximum period of service. Without having a mandatory retirement age or term limits, we have experienced turnover on our Board that has brought directors with new perspectives and approaches. This has complemented the depth of knowledge and insight about our company and business operations that some of our more long-standing directors have developed over time.
The following shows the tenure of our director nominees. As reflected below, a majority of the Board has served for less than five years.
The average tenure of nominees who are considered independent is 5.7 years and the average tenure of all director nominees (which includes directors affiliated with our principal shareholder) is 10.4 years.
Two of our directors who have been members of the Board for more than 10 years (David Thomson and Peter Thomson) are affiliated with our company’s principal shareholder, Woodbridge.
Age
The average age of our director nominees is 62.
Management Proxy Circular and Notice of Annual Meeting of Shareholders Page 21
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Countries of Residence
The following shows the countries where our director nominees ordinarily reside:
Interlocking Directorships
We do not have any director nominees who serve together on boards of other public companies. The Board has adopted a policy that no more than two of our directors may serve together on the boards of other public companies without the consent of the Corporate Governance Committee.
Service on Other Boards
Our directors are not restricted from serving on the boards of other public or private companies so long as their commitments do not materially interfere with or are not incompatible with, their ability to fulfill their duties as a member of our company’s Board. Directors must, however, receive approval from the Chair of the Corporate Governance Committee before accepting an invitation to serve on the board of another public company and must notify the Chair of the Corporate Governance Committee in connection with accepting an invitation to serve on the board of a for-profit private company that is not a family business. The Corporate Governance Committee monitors the outside boards that our directors sit on to determine if there are circumstances that would impact a director’s ability to exercise independent judgment and to ensure that a director has sufficient time to fulfill his or her commitments to Thomson Reuters.
Page 22 Management Proxy Circular and Notice of Annual Meeting of Shareholders
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The following provides information regarding the 14 director nominees who are proposed to be elected at the meeting, including a brief biography, city and country of residence, the year that they were appointed to our Board, independence status, primary areas of expertise, committee membership, attendance at Board and committee meetings in 2020 and ownership of Thomson Reuters securities. This information also reflects the percentage of “for” votes received by each director at our 2020 annual meeting of shareholders.
In the director nominee profiles, “securities held” by a director nominee includes common shares over which a director nominee exercised control or direction, and the number of restricted share units (RSUs), deferred share units (DSUs) and options held by, or credited to, each individual as of April 12, 2021. Information regarding common shares beneficially owned does not include shares that may be obtained through the exercise or vesting of options, RSUs or DSUs. Each director nominee provided us with information about how many common shares he or she beneficially owns.
The market value of shares beneficially owned is based on the closing price of our common shares on the New York Stock Exchange (NYSE) on April 12, 2021, which was $90.90. The market value of DSUs is also based on the closing price of our common shares on the NYSE on that date. We have also included information about each director nominee’s ownership of Thomson Reuters common shares and DSUs as of April 12, 2021 as a multiple of their annual retainer. Additional information about director share ownership guidelines is provided later in this section.
|
David Thomson1
Age: 63
Toronto, Ontario, Canada
Director since 1988
Non-independent
Primary areas of expertise: investment management, retail, media/publishing
2020 annual meeting votes for: 98.94% |
David Thomson
David Thomson is Chairman of Thomson Reuters. He is also a Chairman of Woodbridge, the Thomson family investment company, and Chairman of The Globe and Mail Inc., a Canadian media company. David is an active private investor with a focus on real estate and serves on the boards of several private companies. David has an MA from Cambridge.
| |||||||||||||||
| Board/committee membership |
2020 attendance | Other public company board memberships | ||||||||||||||
| Board | 8 of 8 | 100% | – | |||||||||||||
| Total | 8 of 8 | 100% | ||||||||||||||
| Securities held (number and value)2 |
Total shares and DSUs |
Total market value |
Ownership multiple of annual retainer | |||||||||||||
| Common shares 50,000 |
RSUs – |
DSUs 103,658 |
Options – |
153,658 | ||||||||||||
| $4,545,000 | – |
$9,422,512 | – | $13,967,512 | – | |||||||||||
| 1 David Thomson and Peter Thomson, both of whom are nominees, are brothers. 2 David Thomson and Peter Thomson are substantial shareholders of our company as members of the family that owns the equity of Woodbridge, our principal shareholder. For additional information, please see the “Principal Shareholder and Share Capital” section of this circular. | ||||||||||||||||
Management Proxy Circular and Notice of Annual Meeting of Shareholders Page 23
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|
Steve Hasker
Age: 51
Toronto, Ontario, Canada
Director since March 2020
Non-independent
Primary areas of expertise: operations, international business, strategy and technology
2020 annual meeting votes for: 99.26% |
Steve Hasker
Steve Hasker has been President and Chief Executive Officer of Thomson Reuters since March 15, 2020. Prior to joining Thomson Reuters in February 2020, he was Senior Adviser to TPG Capital, a private equity firm, from August 2019 to February 2020. Prior to that, he was Chief Executive Officer of CAA Global, a TPG Capital portfolio company, from January 2018 to August 2019. Steve served as Global President and Chief Operating Officer of Nielsen Holdings PLC from December 2015 to December 2017 and prior to that served as Nielsen’s President, Global Products from November 2009 to January 2014. Steve spent more than a decade with McKinsey & Company as a partner in the Global Media, Entertainment and Information practice from 1998 to 2009. Before joining McKinsey, Steve spent five years in several financial roles in the United States and other countries. Steve has an undergraduate economics degree from the University of Melbourne and received an MBA and master’s in international affairs from Columbia University.
| |||||||||||||||
| Board/committee membership |
2020 attendance | Other public company board memberships | ||||||||||||||
| Board | 6 of 6 | 100% | Appen Limited | |||||||||||||
| Total | 6 of 6 | 100% | ||||||||||||||
| Securities held (number and value) |
Total shares and DSUs |
Total market value1 |
Ownership multiple of base salary2 | |||||||||||||
| Common shares – |
RSUs 118,835 |
DSUs – |
Options 376,867 |
– | ||||||||||||
| – | – |
– | – | – | 0.0x | |||||||||||
| 1 39,611 of Steve’s 118,835 RSUs are time based restricted share units (TRSUs). As of April 12, 2021, the value of Steve’s TRSUs was $3,600,639. 2 Reflects Steve’s ratio under his executive ownership guidelines, which is based on a multiple of his salary. | ||||||||||||||||
|
Kirk E. Arnold
Age: 61
Kennebunk, Maine, United States
Director since January 2020
Independent
Primary areas of expertise: technology, strategy, sales & marketing, human capital management
2020 annual meeting votes for: 98.42% |
Kirk E. Arnold
Kirk E. Arnold has been Executive-in-Residence at General Catalyst Ventures since 2018, where she works with management teams to help scale and drive growth by providing mentorship, operational and strategic support. She was previously Chief Executive Officer of Data Intensity, LLC, a cloud-based data, applications and analytics managed service provider, from 2013 to 2017. Prior to that, Kirk was Chief Operating Officer of Avid, a technology provider in the media industry, and Chief Executive Officer and President of Keane, Inc., then a publicly traded global services provider. She has also held senior leadership roles at Computer Sciences Corp., Fidelity Investments and IBM. In addition, she was founder and Chief Executive Officer of NerveWire, a management consulting and systems integration provider. Kirk serves on the boards of several private companies. In addition, she is a Senior Lecturer at MIT Sloan School of Management and an advisor to the Center for MIT Entrepreneurship. Kirk received a bachelor’s degree from Dartmouth College.
| |||||||||||||||
| Board/committee membership |
2020 attendance | Other public company board memberships | ||||||||||||||
| Board | 8 of 8 | 100% | Epiphany Technology Acquisition Corp. | |||||||||||||
| Audit | 7 of 7 | 100% | Ingersoll-Rand plc | |||||||||||||
| Corporate Governance | 2 of 2 | 100% | Trane Technologies | |||||||||||||
| HR | 7 of 7 | 100% | ||||||||||||||
| Risk | 2 of 2 | 100% | ||||||||||||||
| Total | 26 of 26 | 100% | ||||||||||||||
| Securities held (number and value) |
Total shares and DSUs |
Total market value |
Ownership multiple of annual retainer | |||||||||||||
| Common shares — |
RSUs – |
DSUs 4,195 |
Options – |
4,195 | ||||||||||||
| — |
– | $381,325 | – | $381,325 | 1.7x | |||||||||||
Page 24 Management Proxy Circular and Notice of Annual Meeting of Shareholders
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|
David W. Binet
Age: 63
Toronto, Ontario, Canada
Director since 2013
Non-independent
Primary areas of expertise: legal, media/publishing, investment management
2020 annual meeting votes for: 93.44% |
David W. Binet
David W. Binet is Deputy Chairman of Thomson Reuters. He is also President and Chief Executive Officer and a director of Woodbridge, the Thomson family investment company. Prior to 2013, he held a number of senior positions at Woodbridge between 1999 and 2012, including Chief Operating Officer. David is a director of The Globe and Mail Inc., a Canadian media company and of a number of other companies in which Woodbridge is invested. David served as Chairman of the Thomson Reuters Foundation from October 1, 2009 through March 14, 2020. Prior to joining Woodbridge in 1999, he was a partner at a major law firm. David has a law degree from McGill University, a BA from Queen’s University and a graduate degree in journalism from Northwestern University.
| |||||||||||||||
| Board/committee membership |
2020 attendance | Other public company board memberships | ||||||||||||||
| Board | 8 of 8 | 100% | – | |||||||||||||
| Corporate Governance | 6 of 6 | 100% | ||||||||||||||
| HR | 7 of 7 | 100% | ||||||||||||||
| Risk | 6 of 6 | 100% | ||||||||||||||
| Total | 27 of 27 | 100% | ||||||||||||||
| Securities held (number and value) |
Total shares and DSUs |
Total market value |
Ownership multiple of annual retainer | |||||||||||||
| Common shares 261,176 |
RSUs – |
DSUs 34,467 |
Options – |
295,643 | ||||||||||||
| $23,740,898 | – | $3,133,050 | – | $26,873,948 | 119.4x | |||||||||||
|
W. Edmund Clark, C.M.
Age: 73
Toronto, Ontario, Canada
Director since 2015
Non-independent
Primary areas of expertise: executive leadership, finance, human resources, strategy
2020 annual meeting votes for: 92.76% |
W. Edmund Clark, C.M.
W. Edmund Clark is a corporate director. Ed served as Group President and Chief Executive Officer of TD Bank Group from 2002 until his retirement in 2014. Ed was inducted as a Companion of the Canadian Order of the Business Hall of Fame in 2016. In 2014, Ed was elected to the Board of Trustees of the Brookings Institute. He is also Chair of the Vector Institute for Artificial Intelligence. Ed has a BA from the University of Toronto, and an MA and Doctorate in Economics from Harvard University. Ed has also received honorary degrees from Mount Allison University, Queen’s University, Western University and the University of Toronto. In 2010, he was made an Officer of the Order of Canada, one of the country’s highest distinctions.
| |||||||||||||||
| Board/committee membership |
2020 attendance | Other public company board memberships1 | ||||||||||||||
| Board | 7 of 8 | 88% | – |
|||||||||||||
| Corporate Governance | 6 of 6 | 100% | ||||||||||||||
| HR | 7 of 7 | 100% | ||||||||||||||
| Total | 20 of 21 | 95% | ||||||||||||||
| Securities held (number and value) |
Total shares and DSUs |
Total market value |
Ownership multiple of annual retainer | |||||||||||||
| Common shares 36,316 |
RSUs – |
DSUs 29,000 |
Options – |
65,316 | ||||||||||||
| $3,301,124 | – |
$2,636,100 | – |
$5,937,224 | 26.4x | |||||||||||
| 1 Ed has been nominated for election to the board of directors of Spin Master Corp. at its shareholder meeting to be held on May 6, 2021. | ||||||||||||||||
Management Proxy Circular and Notice of Annual Meeting of Shareholders Page 25
Table of Contents
|
Michael E. Daniels
Age: 66
Hilton Head Island, South Carolina, United States
Director since 2014
Independent
Primary areas of expertise: international business, finance, operations, technology
2020 annual meeting votes for: 94.93% |
Michael E. Daniels
Michael E. Daniels is a corporate director. In 2013, Mike retired as Senior Vice President and Group Executive IBM Services after 36 years with the company where he directed IBM’s consulting, systems integration, application management, cloud computing and outsourcing services around the globe. Mike also held a number of senior leadership positions in his career at IBM, including General Manager of Sales and Distribution Operations of the Americas as well as leading Global Services in the Asia Pacific region. Mike has a bachelor’s degree in political science from Holy Cross College.
| |||||||||||||||
| Board/committee membership |
2020 attendance | Other public company board memberships | ||||||||||||||
| Board | 7 of 8 | 88% | SS&C Technologies Holdings, Inc. | |||||||||||||
| Audit | 7 of 7 | 100% | Johnson Controls International plc | |||||||||||||
| Corporate Governance | 6 of 6 | 100% | ||||||||||||||
| HR | 6 of 7 | 86% | ||||||||||||||
| Risk | 6 of 6 | 100% | ||||||||||||||
| Total | 32 of 34 | 94% | ||||||||||||||
| Securities held (number and value) |
Total shares and DSUs |
Total market value |
Ownership multiple of annual retainer | |||||||||||||
| Common shares 2,924 |
RSUs – |
DSUs 29,297 |
Options – |
32,221 | ||||||||||||
| $265,791 | – | $2,663,097 | – | $2,928,888 | 13.0x | |||||||||||
|
Kirk Koenigsbauer
Age: 53
Seattle, Washington, United States
Director since March 2020
Independent
Primary areas of expertise: technology, operations, sales & marketing
2020 annual meeting votes for: 99.89% |
Kirk Koenigsbauer
Kirk Koenigsbauer has been Chief Operating Officer & Corporate Vice President, Experiences and Devices Group at Microsoft Corporation since February 2020. From December 2016 to February 2020, he was Corporate Vice President, Microsoft 365 and from July 2012 to November 2016, he was Corporate Vice President, Office Apps Engineering, at Microsoft. Prior to that, he was Corporate Vice President, Office Product Management at Microsoft from June 2002 to July 2012. Kirk worked at Amazon.com from 1998 to 2001 where he held the roles of General Manager, Software & Video Games Stores and Director of Product Management, Auctions. Kirk also worked at Microsoft from 1992 to 1998 and as a consultant at Accenture from 1989 to 1991. Kirk has a bachelor’s degree from Colby College.
| |||||||||||||||
| Board/committee membership |
2020 attendance | Other public company board memberships | ||||||||||||||
| Board | 6 of 6 | 100% | – | |||||||||||||
| Audit | 5 of 5 | 100% | ||||||||||||||
| Risk | 4 of 4 | 100% | ||||||||||||||
| Total | 15 of 15 | 100% | ||||||||||||||
| Securities held (number and value) |
Total shares and DSUs |
Total market value |
Ownership multiple of annual retainer | |||||||||||||
| Common shares — |
RSUs – |
DSUs 3,198 |
Options – |
3,198 | ||||||||||||
|
— |
– |
$290,698 | – |
$290,698 | 1.3x | |||||||||||
Page 26 Management Proxy Circular and Notice of Annual Meeting of Shareholders
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|
Deanna Oppenheimer
Age: 63
Seattle, Washington, United States
Director since November 2020
Independent
Primary areas of expertise: operations, strategy, technology
2020 annual meeting votes for: N/A |
Deanna Oppenheimer
Deanna Oppenheimer is the founder of CameoWorks, LLC, a global firm that advises leaders of early stage companies and consultancies. Deanna founded CameoWorks in 2012 and has also served as a senior advisor to Bain & Company since 2013. From 2005 to 2011, she served in a number of roles at Barclays PLC, first as chief executive of UK Retail and Business Banking and then as vice chair of Global Retail Banking. From 1985 to 2005, Deanna served in a number of positions at Washington Mutual, Inc., with her last role as president of Consumer Banking. Deanna received a BA from the University of Puget Sound.
| |||||||||||||||
| Board/committee membership1 |
2020 attendance | Other public company board memberships | ||||||||||||||
| Board | 1 of 1 | 100% | Hargreaves Lansdown plc | |||||||||||||
| Audit | – | – | Tesco plc | |||||||||||||
| Corporate Governance | – | – | ||||||||||||||
| Total | 1 of 1 | 100% | ||||||||||||||
| Securities held (number and value) |
Total shares and DSUs |
Total market value |
Ownership multiple of annual retainer | |||||||||||||
| Common shares – |
RSUs – |
DSUs 1,032 |
Options – |
1,032 | ||||||||||||
| – | – | $93,808 | – | $93,808 | 0.4x | |||||||||||
| 1 Deanna was appointed to the Audit Committee in November 2020 and the Corporate Governance Committee in March 2021. | ||||||||||||||||
|
Vance K. Opperman
Age: 78
Minneapolis, Minnesota, United States
Director since 1996
Independent
Primary areas of expertise: legal, operations, finance, media/publishing, investment management
2020 annual meeting votes for: 94.06% |
Vance K. Opperman
Vance Opperman is Lead Independent Director of Thomson Reuters. He is also President and Chief Executive Officer of Key Investment, Inc., a private investment company involved in publishing and other activities. Previously, Vance was President of West Publishing Company, an information provider of legal and business research which is now owned by Thomson Reuters. He serves as Lead Independent Director of TCF Financial Corporation. He also serves on the board of several educational and not-for-profit organizations. Vance has a law degree from the University of Minnesota and practiced law for many years.
| |||||||||||||||
| Board/committee membership |
2020 attendance | Other public company board memberships | ||||||||||||||
| Board | 8 of 8 | 100% | TCF Financial Corporation | |||||||||||||
| Audit | 7 of 7 | 100% | ||||||||||||||
| Corporate Governance | 6 of 6 | 100% | ||||||||||||||
| HR | 7 of 7 | 100% | ||||||||||||||
| Risk | 5 of 6 | 83% | ||||||||||||||
| Total | 33 of 34 | 97% | ||||||||||||||
| Securities held (number and value) |
Total shares and DSUs |
Total market value |
Ownership multiple of annual retainer | |||||||||||||
| Common shares 50,000 |
RSUs – |
DSUs 144,217 |
Options – |
194,217 | ||||||||||||
| $4,545,000 | – |
$13,109,325 | – |
$17,654,325 | 78.5x | |||||||||||
Management Proxy Circular and Notice of Annual Meeting of Shareholders Page 27
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|
Simon Paris
Age: 51
London, United Kingdom
Director since November 2020
Independent
Primary areas of expertise: operations, strategy, technology
2020 annual meeting votes for: N/A |
Simon Paris
Simon Paris is Chief Executive Officer of Finastra, a global financial technology (fintech) provider. He joined Finastra (previously Misys) as president in 2015 and also served as its Chief Sales Officer, before being appointed Deputy CEO in 2017 and CEO in 2018. Simon previously worked at SAP from 2007 to 2015, where he held a number of senior leadership positions. Simon was also previously a senior consultant with McKinsey & Company. He currently chairs the World Trade Board, an organization initiated by Finastra that is made up of global leaders, innovative thinkers, industry influencers and subject matter experts from the different corners of trade, finance and commerce. Simon holds a BA from the European Business School and an MBA from INSEAD.
| |||||||||||||||
| Board/committee membership |
2020 attendance | Other public company board memberships | ||||||||||||||
| Board | 1 of 1 | 100% | Everbridge, Inc. | |||||||||||||
| Audit | – | – | ||||||||||||||
| Total | 1 of 1 | 100% | ||||||||||||||
| Securities held (number and value) |
Total shares and DSUs |
Total market value |
Ownership multiple of annual retainer | |||||||||||||
| Common shares – |
RSUs – |
DSUs 1,032 |
Options – |
1,032 | ||||||||||||
| – | – |
$93,808 | – |
$93,808 | 0.4x | |||||||||||
|
Kim M. Rivera
Age: 52
Woodside, California, United States
Director since 2019
Independent
Primary areas of expertise: legal, strategy, technology, operations
2020 annual meeting votes for: 99.82% |
Kim M. Rivera
Kim M. Rivera has been Special Advisor to the CEO of HP Inc. since February 2021. Kim was previously President, Strategy and Business Management and Chief Legal Officer at HP Inc. from January 2019 through January 2021. As President, Strategy and Business Management, she led corporate strategy and development, customer support, indirect procurement, real estate and workplace functions. In addition, Kim managed HP Inc.’s worldwide legal organization, including all aspects of legal and governmental affairs, brand security, compliance and ethics. She served as Chief Legal Officer and General Counsel of HP Inc. from November 2015 to January 2019. Prior to joining HP Inc., Kim was the Chief Legal Officer and Corporate Secretary for DaVita HealthCare Partners where she was employed from 2010 to 2015. Prior to that, she served as the Chief Compliance Officer and Head of International Legal Services at The Clorox Company; Chief Litigation Counsel for Rockwell Automation, as well as General Counsel for its Automation Controls and Information Group. Kim has a bachelor’s degree from Duke University and a Juris Doctor degree from Harvard Law School.
| |||||||||||||||
| Board/committee membership |
2020 attendance | Other public company board memberships1 | ||||||||||||||
| Board | 8 of 8 | 100% | – | |||||||||||||
| Audit | 6 of 7 | 86% | ||||||||||||||
| Risk | 1 of 1 | 100% | ||||||||||||||
| Total | 15 of 16 | 94% | ||||||||||||||
| Securities held (number and value) |
Total shares and DSUs |
Total market value |
Ownership multiple of annual retainer | |||||||||||||
| Common shares – |
RSUs – |
DSUs 4,238 |
Options – |
4,238 | ||||||||||||
| – | – |
$385,234 | – |
$385,234 | 1.7x | |||||||||||
| 1 Kim is a director of Cano Health, which is expected to become a public company in the second quarter of 2021 through a contemplated merger with Jaws Acquisition Corp., a special purpose acquisition company. | ||||||||||||||||
Page 28 Management Proxy Circular and Notice of Annual Meeting of Shareholders
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|
Barry Salzberg
Age: 67
New York, New York, United States
Director since 2015
Independent
Primary areas of expertise: accounting/audit, operations, international business
2020 annual meeting votes for: 97.05% |
Barry Salzberg
Barry Salzberg is a corporate director. Barry served as the Global Chief Executive Officer of Deloitte Touche Tohmatsu Limited from 2011 until his retirement in 2015. He joined Deloitte in 1977 and his roles included Chief Executive Officer and Managing Partner of the firm’s U.S. operations. Barry is Chairman of the board of directors of 10EQS and has previously served as a board member of New Profit, Inc. and previously served as Chairman of the United Way Worldwide, Chairman of the board of College Summit and Chairman of the board of the YMCA of Greater New York. From July 2015 until June 2018, he was a Professor at Columbia Business School. Barry has a BS in Accounting from Brooklyn College, a JD from Brooklyn Law School, and an LLM in Taxation from the New York University School of Law.
| |||||||||||||||
| Board/committee membership |
2020 attendance | Other public company board memberships | ||||||||||||||
| Board | 8 of 8 | 100% | Blue Apron Holdings, Inc | |||||||||||||
| Audit | 7 of 7 | 100% | ||||||||||||||
| Corporate Governance | 6 of 6 | 100% | ||||||||||||||
| Risk | 6 of 6 | 100% | ||||||||||||||
| Total | 27 of 27 | 100% | ||||||||||||||
| Securities held (number and value) |
Total shares and DSUs |
Total market value |
Ownership multiple of annual retainer | |||||||||||||
| Common shares – |
RSUs – |
DSUs 22,770 |
Options – |
22,770 | ||||||||||||
| – | – | $2,069,793 | – | $2,069,793 | 9.2x | |||||||||||
|
Peter J. Thomson1
Age: 55
Toronto, Ontario, Canada
Director since 1995
Non-independent
Primary areas of expertise: international business, investment management, technology
2020 annual meeting votes for: 95.49% |
Peter J. Thomson
Peter J. Thomson is a Chairman of Woodbridge, the Thomson family investment company. Peter is an active private equity investor and serves on the boards of several private companies. Peter has a BA from the University of Western Ontario.
| |||||||||||||||
| Board/committee membership |
2020 attendance | Other public company board memberships | ||||||||||||||
| Board | 8 of 8 | 100% | – | |||||||||||||
| HR | 7 of 7 | 100% | ||||||||||||||
| Total | 15 of 15 | 100% | ||||||||||||||
| Securities held (number and value)2 |
Total shares and DSUs |
Total market value |
Ownership multiple of annual retainer | |||||||||||||
| Common shares – |
RSUs – |
DSUs 12,683 |
Options – |
12,683 | ||||||||||||
| – |
– |
$1,152,884 | – |
$1,152,884 | – | |||||||||||
|
|
1 David Thomson and Peter Thomson, both of whom are nominees, are brothers. 2 David Thomson and Peter Thomson are substantial shareholders of our company as members of the family that owns the equity of Woodbridge, our principal shareholder. For additional information, please see the “Principal Shareholder and Share Capital” section of this circular. | |||||||||||||||
Management Proxy Circular and Notice of Annual Meeting of Shareholders Page 29
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|
Wulf von Schimmelmann
Age: 74
Berg-Leoni, Germany
Director since 2011
Independent
Primary areas of expertise: finance, operations, international business
2020 annual meeting votes for: 98.29% |
Wulf von Schimmelmann is a corporate director. Wulf was Chief Executive Officer of Deutsche Postbank AG from 1999 to 2007, where he transformed the organization from a check processing division of Deutsche Post to one of Germany’s leading retail banks. He also serves as a member of the Supervisory Board of Maxingvest AG. Prior to his lengthy career in banking, he was a partner at McKinsey & Co., working in Switzerland, the U.S. and Germany. Wulf was also previously Chairman of the Supervisory Board of Deutsche Post DHL AG, a member of the Supervisory Board of Deutsche Teleknow and Allianz Deutschland AG, a director of Western Union Company, Accenture plc and Deutsche Post DHL AG, and Chair of BAWAG P.S.K. Wulf received a degree in economic sciences and his Ph.D. in economics from the University of Zurich.
| |||||||||||||||
| Board/committee membership |
2020 attendance | Other public company board memberships | ||||||||||||||
| Board | 8 of 8 | 100% | – | |||||||||||||
| Audit | 4 of 4 | 100% | ||||||||||||||
| Corporate Governance | 2 of 2 | 100% | ||||||||||||||
| HR | 6 of 7 | 86% | ||||||||||||||
| Total | 20 of 21 | 95% | ||||||||||||||
| Securities held (number and value) |
Total shares and DSUs |
Total market value |
Ownership multiple of annual retainer | |||||||||||||
| Common shares – |
RSUs – |
DSUs 42,186 |
Options – |
42,186 | ||||||||||||
| – | – |
$3,834,707 | – |
$3,834,707 | 17.0x | |||||||||||
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Director Compensation and Share Ownership
Approach and Philosophy
Our approach and philosophy for director compensation is to:
| · | align the interests of our directors with those of our shareholders; and |
| · | provide competitive compensation. |
The compensation program for our directors considers:
| · | the size, scope and complexity of our organization; |
| · | the time commitment, contributions and effort required of directors to serve on the Board and one or more Board committees, as applicable (including Board/committee meetings and travel to and from Board/committee meetings and site visits); |
| · | the experience and skills of our directors; |
| · | compensation levels for boards of directors of other large comparable U.S. and Canada-based multinational public companies in order for amounts paid to our directors to be competitive to attract new candidates and to retain existing directors; |
| · | an increasing trend in U.S. and Canadian public company director compensation programs to require a combination of mandatory and optional equity components to further align directors’ interests with shareholders; and |
| · | our desire to have a flat fee structure. |
Our Corporate Governance Committee is responsible for periodically reviewing the adequacy and form of directors’ compensation. Effective on January 1, 2020, the annual retainer for our non-management directors (other than the Chairman) was increased by $25,000. Directors received this additional compensation in the form of DSUs. This was the first increase in the non-management director annual retainer since 2013. In November 2020, the Corporate Governance Committee decided to maintain current director compensation retainers for 2021.
In periodically benchmarking director compensation, the Corporate Governance Committee evaluates publicly available data related to director compensation paid by the same peer group of companies utilized by the HR Committee for executive compensation benchmarking purposes.
We do not grant stock options, restricted share units (RSUs) or bonuses to our non-management directors. In addition, we do not provide our non-management directors with retirement/pension benefits, healthcare coverage or perquisites.
As discussed later in this section, we require our directors to hold a minimum value of common shares and/or deferred share units (DSUs) and our director compensation program encourages directors to invest in our company beyond their minimum ownership requirements.
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Our directors have a mandatory equity component for their compensation. Approximately 86% of director compensation was paid in equity (DSUs or common shares) in 2020.
Components of Director Compensation
The table below sets forth the annual retainers that were payable to our non-management directors in 2020. Directors do not receive separate attendance or meeting fees. Chairs of the Board’s standing committees receive additional fees given their increased responsibilities and workloads. Additional information regarding the different components of our director compensation structure is provided following this table.
| 2020 ($) | ||
|
Non-management directors1 |
225,000 (75,000 of which was required to be paid in deferred share units, or DSUs) | |
| Chairman of the Board |
600,000 | |
| Additional retainers |
||
| Deputy Chairman of the Board |
150,000 (paid in DSUs) | |
| Lead Independent Director |
150,000 (paid in DSUs) | |
| Committee chairs – Audit, Corporate |
50,000 (paid in DSUs) | |
| 1 | Directors other than the Chairman. |
Retainers / Mandatory Equity Component
In 2020, we required a minimum of $75,000 of each non-management director’s $225,000 annual retainer to be paid in equity in the form of DSUs (payable quarterly). Our non-management directors then elect to receive the remaining $150,000 of their annual retainer in the form of DSUs, common shares or cash (or a mix thereof – payable quarterly).
DSUs
Each DSU has the same value as one common share, though DSUs do not have voting rights. DSUs are not performance-based units. If a director elects to receive DSUs, units representing the value of common shares are credited to the director’s account. DSUs accumulate additional units based on notional equivalents of dividends paid on our common shares. DSUs are fully vested upon grant, but they are only settled in common shares or, at the election of our company, in cash, following termination of the director’s Board service. Any common shares delivered to a director in connection with the settlement of DSUs are purchased in the open market.
Common Shares
If a director elects to receive common shares, the cash amount (net of withholding taxes) is provided to our broker who uses such amount to buy shares in the open market.
Committee Fees
Committee chair fees, which are payable entirely in DSUs, are reflected in the table above.
Chairman and Deputy Chairman Retainer
The Chairman’s annual retainer is $600,000. The Deputy Chairman’s annual retainer is $150,000, which is payable entirely in DSUs. The Deputy Chairman also receives the same $225,000 annual retainer paid to other non-management directors. Additional information about the Chairman and the Deputy Chairman is provided later in the “Corporate Governance Practices” section of this circular.
Lead Independent Director Retainer
The Lead Independent Director’s annual retainer is $150,000, which is payable entirely in DSUs. The Lead Independent Director also receives the same annual $225,000 retainer paid to other non-management directors. Additional information about the Lead Independent Director is provided later in the “Corporate Governance Practices” section of this circular.
Page 32 Management Proxy Circular and Notice of Annual Meeting of Shareholders
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Benchmarking Director Compensation
In setting 2020 director compensation, the Corporate Governance Committee evaluated publicly available data related to director compensation paid by the same peer group of companies utilized by the HR Committee for executive compensation benchmarking purposes. In its most recent benchmarking review in November 2020, the Corporate Governance Committee reviewed director compensation at the following companies in Thomson Reuters’ global peer group for executive compensation purposes. As part of its review, the Corporate Governance Committee evaluated data for North American-based companies in the peer group as Thomson Reuters is headquartered in Canada and most of its directors reside in Canada or the United States. The Corporate Governance Committee also acknowledged that director compensation for U.S. companies is generally higher than Canadian companies.
| Automatic Data Processing Inc. CGI Group Inc. Cognizant Technology Solutions Corp. eBay Inc. Gartner Inc. IAC |
The Interpublic Group of Companies, Inc. Intuit Inc. Moody’s Corp. News Corporation Nielsen Holdings plc Omnicom Group Inc. |
Pearson plc RELX PLC S&P Global Inc. Sage Group Inc. Wolters Kluwer NV |
Total Director Compensation
The table below reflects compensation earned by our directors in 2020. Approximately 86% of 2020 director compensation was paid in DSUs.
As President and CEO of Thomson Reuters, Steve Hasker does not receive compensation for his service as a director. Similarly, Jim Smith did not receive compensation for previously serving as a director while President and CEO of Thomson Reuters. We discuss aspects of Steve Hasker’s and Jim Smith’s compensation in the “Compensation Discussion and Analysis” section of this circular.
| Fees Earned ($) | ||||||||||||||
| Director |
Cash | DSUs | Common Shares | All Other Compensation ($) |
Total ($) | |||||||||
| David Thomson |
– | 600,000 | – | – | 600,000 | |||||||||
| Kirk Arnold1 |
– | 245,355 | – | – | 245,355 | |||||||||
| David W. Binet |
150,000 | 225,000 | – | – | 375,000 | |||||||||
| W. Edmund Clark, C.M.2 |
– | 275,000 | – | – | 275,000 | |||||||||
| Michael E. Daniels3 |
– | 275,000 | – | – | 275,000 | |||||||||
| Kirk Koenigsbauer4 |
– | 186,270 | – | – | 186,270 | |||||||||
| Deanna Oppenheimer5 |
– | 31,353 | – | – | 31,353 | |||||||||
| Vance K. Opperman6 |
– | 375,000 | – | – | 375,000 | |||||||||
| Simon Paris7 |
– | 31,353 | – | – | 31,353 | |||||||||
| Kim M. Rivera |
– | 225,000 | – | – | 225,000 | |||||||||
| Barry Salzberg8 |
150,000 | 125,000 | – | – | 275,000 | |||||||||
| Peter J. Thomson |
150,000 | 75,000 | – | – | 225,000 | |||||||||
| Wulf von Schimmelmann |
– | 225,000 | – | – | 225,000 | |||||||||
| Former directors |
||||||||||||||
| Sheila C. Bair9 |
63,524 | 52,937 | – | – | 116,461 | |||||||||
| Kristin C. Peck10 |
– | 95,287 | – | – | 95,287 | |||||||||
| Total |
513,524 | 3,042,555 | – | – | 3,556,079 | |||||||||
| 1 | Kirk Arnold was appointed to the Board on January 15, 2020 and her compensation reflects her service as a director from that date through December 31, 2020. Kirk’s compensation also includes fees for serving as Chair of the Risk Committee from June 3, 2020 through December 31, 2020. |
| 2 | Ed Clark’s compensation includes fees for serving as Chair of the HR Committee during 2020. |
| 3 | Mike Daniels’ compensation includes fees for serving as Chair of the Corporate Governance Committee during 2020. |
| 4 | Kirk Koenigsbauer was appointed to the Board on March 4, 2020 and his compensation reflects his service as a director from that date through December 31, 2020. |
| 5 | Deanna Oppenheimer was appointed to the Board on November 11, 2020 and her compensation reflects her service as a director from that date through December 31, 2020. |
| 6 | Vance Opperman’s compensation includes fees for serving as the Lead Independent Director during 2020. |
| 7 | Simon Paris was appointed to the Board on November 11, 2020 and his compensation reflects his service as a director from that date through December 31, 2020. |
| 8 | Barry Salzberg’s compensation includes fees for serving as Chair of the Audit Committee during 2020. |
| 9 | Sheila Bair served as a director through June 3, 2020. Sheila’s compensation also includes fees for serving as Chair of the Risk Committee from January 1, 2020 through June 3, 2020. |
| 10 | Kristin Peck served as a director through June 3, 2020. |
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Stock Option and RSU Grants
Our non-management directors are not eligible to receive stock option grants and no non-management director currently holds any options. None of our non-management directors currently hold RSUs. Options and RSUs held by Steve Hasker and Jim Smith are described later in the circular.
Share Ownership Guidelines
Directors are currently required to hold common shares and/or DSUs with a value equal to three times their annual retainer, which is currently $675,000. Directors are required to meet their ownership requirement within five years of the date of their initial appointment to the Thomson Reuters Board. Share prices of all public companies are subject to market volatility. As a result, director share ownership guidelines reflect a “once met, always met” standard. This means that if a director has met his or her applicable ownership guideline multiple and a subsequent decline in the Thomson Reuters share price causes the value of his or her ownership to fall below the applicable threshold, the director will be considered to be in compliance with the guidelines so long as he or she continues to hold the number of shares that were owned at the time when he or she achieved the guidelines.
Ownership of common shares and DSUs by our director nominees can be found in each nominee’s biography in this circular. David Thomson and Peter Thomson are substantial shareholders of our company as members of the family that owns the equity of Woodbridge. As of April 12, 2021, Woodbridge beneficially owned approximately 66% of our common shares. For more information, see the “Principal Shareholder and Share Capital” section of this circular. The following table shows each non-management director’s progress towards his or her share ownership guidelines. All ownership multiples and each director’s ownership are as of April 12, 2021.
| Name | Ownership multiple of annual retainer |
Progress towards guidelines | ||
| David Thomson |
– | ✓, through Woodbridge’s ownership | ||
| Kirk E. Arnold |
1.7x | Required by January 15, 2025; 56% towards goal | ||
| David W. Binet |
119.4x | ✓ | ||
| W. Edmund Clark, C.M. |
26.4x | ✓ | ||
| Michael E. Daniels |
13.0x | ✓ | ||
| Kirk Koenigsbauer |
1.3x | Required by March 4, 2025; 43% towards goal | ||
| Deanna Oppenheimer |
0.4x | Required by November 11, 2025; 14% towards goal | ||
| Vance K. Opperman |
78.5x | ✓ | ||
| Simon Paris |
0.4x | Required by November 11, 2025; 14% towards goal | ||
| Kim M. Rivera |
1.7x | Required by November 7, 2024; 57% towards goal | ||
| Barry Salzberg |
9.2x | ✓ | ||
| Peter J. Thomson |
– | ✓, through Woodbridge’s ownership | ||
| Wulf von Schimmelmann |
17.0x | ✓ | ||
Steve Hasker is subject to separate ownership guidelines as CEO of our company. For more information, see the “Compensation Discussion and Analysis” section of this circular.
Pensions
Non-management directors do not receive any pension benefits from our company. Steve Hasker’s retirement benefits are described in the “Executive Compensation – Pension and Other Retirement Benefits” section of this circular.
Service Contracts
We have not entered into service contracts with our non-management directors. Our agreement with Steve Hasker regarding termination benefits is described in the “Executive Compensation – Termination Benefits” section of this circular.
Liability Insurance
We provide our directors with liability insurance in connection with their service on the Board.
We reimburse directors for reasonable travel and out-of-pocket expenses incurred in connection with their Thomson Reuters duties.
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Corporate Governance Practices
Our Board is committed to high standards of corporate governance and believes that sound corporate governance practices are essential to the well-being of our company and for the promotion and protection of our shareholders’ interests. We believe that sustainable value creation for all shareholders is fostered through a Board that is informed and engaged and that functions independently of management.
As a public company with shares listed in Canada on the Toronto Stock Exchange and in the United States on the New York Stock Exchange, our corporate governance practices are generally consistent with the best practice guidelines of the Canadian securities regulatory authorities and the SEC. In addition, our corporate governance practices comply with most of the corporate governance listing standards of the NYSE, notwithstanding that we are exempt from most of those standards as a “foreign private issuer”.
HIGHLIGHTS
| · | Independence - A majority of our directors are independent and only one director (our CEO) is a member of management. All of the Board’s committees are comprised of a majority of independent directors; |
| · | Separation of Chairman and CEO - The roles and responsibilities of the Chairman and the CEO are separate; |
| · | Share ownership guidelines - Our directors and executive officers are required to maintain equity interests in our company; |
| · | Risk oversight - We have a separate Risk Committee that helps oversee our enterprise risk management (ERM) program and other risks not overseen by the Board and its other committees; |
| · | Code of Business Conduct and Ethics - Our directors and executive officers must comply with our Code and other corporate governance policies; |
| · | Director orientation - We have an orientation program to onboard our new directors; and |
| · | Independent advice - The Board and each of its committees have the ability to retain independent advisors. |
Board Composition and Responsibilities
Governance Structure
The Board oversees our corporate governance structure, in part, through the work of the Corporate Governance Committee. Board practices are set out in Corporate Governance Guidelines, which the Corporate Governance Committee reviews annually. The Corporate Governance Guidelines deal with issues such as the Board’s duties and responsibilities, share ownership guidelines and conflicts of interest. In addition, each of the Board’s four standing committees (Audit, Corporate Governance, HR and Risk) has a charter. The charters are reviewed annually by the relevant committee and the Corporate Governance Committee.
The Board’s principal responsibilities include strategic planning, risk management, financial reporting, disclosure and corporate governance.
Our Code of Business Conduct and Ethics (Code) applies to our employees, directors and officers, including our CEO, CFO and Controller. Our employees, directors and officers are required to submit an acknowledgment that they have received and read a copy of the Code and understand their obligations to comply with the principles and policies outlined in it. The Corporate Governance Committee receives an annual report regarding the Code from the Chief Legal Officer.
Board Size
The Board currently consists of 14 individuals and functions independently of management. The Board is currently comprised of 13 non-management directors and the CEO. Individual directors are proposed for election annually. We have proposed that 14 directors be nominated for election at the meeting, all of whom are currently directors. Each of the Board’s committees is discussed in more detail later in this circular.
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Key Responsibilities of the Board
The fundamental responsibility of the Board is to supervise the management of the business and affairs of Thomson Reuters. The table below highlights primary activities and topics from the Board’s 2020 work plan. Five of the Board’s meetings in 2020 were regularly scheduled and three special meetings were held in February, April and May.
| Meeting |
2020 Primary Activities/Topics | |
| January |
· Annual operating plan · Dividend policy · New director appointment | |
| February |
· Executive succession (new CEO and CFO appointments and transition agreements for former CEO and CFO) | |
| March |
· Annual disclosure and corporate governance documents (annual report/financial statements and proxy circular) · Executive compensation · Investor Relations update · M&A update · Global Print update · Reuters News update · Tax update · New director appointment | |
| April |
· COVID-19 update (employees, customers and business) · Proxy circular approval | |
| May |
· COVID-19 update (employees, customers and business) · Financial update · Debt offering approval | |
| June |
· COVID-19 update (employees, customers and business) · Product update · M&A update · Information security update · Investor Relations update | |
| September |
· Customer update · Financial update · Capital and business strategy update · People and talent review | |
| November |
· Customer/markets update · Financial update · 2023 vision discussion · New director appointment | |
| Periodically |
· Strategic and management discussions related to individual businesses or sectors · Reports from the Chairs of the Audit, Corporate Governance, HR and Risk Committees · Enterprise risk management (ERM) · Proposed significant acquisitions and dispositions · Product updates · COVID-19 updates · Proposed capital markets transactions · In-camera meetings with the CEO only (typically at the start and end of each meeting) · In-camera meetings of non-management directors only · In-camera meetings of independent directors only · Competitive analysis | |
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Strategic Planning
The Board plays an important role in strategic planning and direction throughout the year.
In January, the Board meets with management to review, discuss and approve the final version of our annual operating plan, which is prepared by our CEO, CFO and other senior executives. The plan typically addresses:
| · | Opportunities |
| · | Risks |
| · | Competitive position |
| · | Business outlook |
| · | Preliminary full-year financial results |
| · | Financial projections for a three-year period |
| · | Other key performance indicators |
| · | Annual dividend and share repurchase program recommendations |
Throughout the year, the Board and management discuss our progress against the plan. The Board focused its in-person meeting in September on corporate strategy. As part of this meeting, directors had an in-depth discussion about our company’s strategic plans with our CEO and CFO and other senior executives. Strategy discussions typically cover topics such as technology, the current condition of our business segments, future growth potential of our businesses and the key market segments that we serve, and how we are seeking to increase shareholder value.
While the January meeting focuses on strategic planning, the Board also discusses various strategic issues with management at other meetings during the year. For example, the Board discussed our capital strategy with the CFO in September. In addition, various presidents of our business segments provide updates to the Board at meetings during the year and those discussions typically address the segment’s current operations and strategic objectives.
Risk Oversight
The Board is responsible for confirming that a system is in place to identify the principal risks facing Thomson Reuters and that appropriate procedures and systems are in place to monitor, mitigate and manage those risks.
The ERM process at our company is intended to:
| · | identify the most significant operational, strategic, reputational, financial and other risks in each of our business segments as well as for our corporate center, considering both the external environment as well as internal changes related to structure, strategy and processes; |
| · | assess which of these risks individually or together with other identified risks could have a significant impact on Thomson Reuters as an enterprise if they were to materialize; and |
| · | develop and implement action plans for the enterprise risks and reviewing them periodically at a corporate and Board level. |
Our enterprise risk management (ERM) process is designed to enhance the identification and mitigation of risk throughout Thomson Reuters and assist the Board and its committees with oversight responsibility for risk management.
Each year, we conduct a risk assessment process. In 2020, this process included a survey of the Board of Directors after its first meeting of the year in January. Directors were asked to consider certain risk factors and definitions of impact and likelihood related to the ERM process, in light of their own knowledge of our company and business experience. Directors then provided input for Thomson Reuters’ businesses and functions to consider in assessing enterprise risks for the year.
The ERM process owner conducts risk assessments throughout Thomson Reuters utilizing the prior year’s top identified risks and inputs from the Board survey. Relevant businesses or functions then create their own lists of applicable top risks. These risk assessments and lists then roll up into the different businesses and functions within the company. The ERM process owner and the chairs of our management business risk committee, who track and monitor enterprise risks, utilize this information to create a
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proposed consolidated top enterprise risks list across Thomson Reuters and then submit the list to the CEO’s operating committee. The management business risk committee is comprised of various Thomson Reuters senior leaders from Corporate functional departments and each business segment and is co-chaired by the Chief Legal Officer and Chief Operations and Technology Officer. This committee assesses the status of identified risks and reviews the adequacy of applicable mitigation plans, and then submits a list of proposed top enterprise risks to the CEO’s operating committee. Utilizing this information and an anonymized list of risks and input from the Board survey, the CEO’s operating committee then reviews and agrees upon the top enterprise risks to present to the Board’s Risk Committee for review, input and approval.
During the year, the management business risk committee also provides direction, prioritization, executive support and communication to others at the company involved in the ERM process. Executives responsible for specific risk mitigation periodically report to the management business risk committee, the Board’s Risk Committee, the full Board of Directors or other Board committees, as appropriate, during the year. For our business segments and functional departments, ERM is an ongoing process under continuous management review and ERM process owners are asked to keep their risk lists current and to provide updates on risk levels. We involve our Corporate Compliance and Audit department in the review of certain identified risks, as appropriate or upon request.
The Risk Committee is primarily responsible for overseeing management’s ERM process. The Audit Committee oversees overall risk assessment and management, and focuses primarily on financial risks.
The HR Committee’s responsibilities include establishing, implementing and overseeing our compensation policies and programs. We have designed our compensation programs to provide an appropriate balance of risk and reward in relation to the company’s overall business strategy. Please see the “Compensation Discussion and Analysis” section of this circular for additional information regarding why we believe that our compensation programs do not incentivize our executives to take unnecessary or excessive risks.
Separate Chairman and CEO
The roles and responsibilities of the Chairman and the CEO of our company are separate to allow for more effective oversight and to hold management more accountable.
| · | As Chairman, David Thomson seeks to ensure that the Board operates independently of senior management. The Chairman is responsible for chairing Board meetings, ensuring that the Board and its committees have the necessary resources to support their work (in particular, accurate, timely and relevant information), and maintaining an effective relationship between the Board and senior management. |
| · | As CEO, Steve Hasker is principally responsible for the management of the business and affairs of Thomson Reuters in accordance with the strategic plan and objectives approved by the Board. |
Deputy Chairman
David Binet is the Board’s Deputy Chairman. The Deputy Chairman works collaboratively with the Chairman and assists the Chairman in fulfilling his responsibilities. The Deputy Chairman also engages in regular dialogue with the Chairman, the CEO and the Lead Independent Director to reinforce our culture of good governance; serves as an ambassador for Thomson Reuters; and performs additional duties as may be delegated to him by the Chairman or the Board from time to time.
Lead Independent Director
Vance Opperman is the Board’s Lead Independent Director. Among other things, responsibilities of our Lead Independent Director include chairing meetings of the independent directors; in consultation with the Chairman, Deputy Chairman and CEO, approving meeting agendas for the Board; as requested, advising the CEO on the quality, quantity, appropriateness and timeliness of information sent by management to the Board; and being available for consultation with the other independent directors as required.
Position Descriptions
Position descriptions for the Chairman, the chair of each committee and the Lead Independent Director have been approved by the Board and help ensure the independent operations of the Board and its committees.
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Meetings with and without the CEO/Management
Our Board begins each meeting with an “in-camera” session with the CEO, but no other members of management. This is intended to give the CEO an opportunity to discuss his objectives for the day’s meeting, and for directors to express preliminary observations based on their prior review of meeting materials. This permits a more effective use of time in the Board meeting. A similar session is typically held with the CEO at the end of the meeting, followed by a meeting of the Board without the CEO or other members of management present. Board committees also utilize “in-camera” meetings for discussions without the CEO or members of management present.
Meetings of Independent Directors
As part of each regularly scheduled Board meeting, our independent directors meet as a group without the CEO and without the directors affiliated with Woodbridge. The independent directors also meet as a group as part of any special meetings of the Board. These meetings are chaired by the Lead Independent Director. The Lead Independent Director develops the agenda for these meetings, although discussion has not been limited to it. The agenda generally addresses any issues that might be specific to a public corporation with a controlling shareholder. The Lead Independent Director reports to the Chairman, Deputy Chairman and the CEO on the substance of these meetings to the extent that action is appropriate or required. Six meetings of the independent directors took place in 2020 which were presided over by Vance Opperman.
Company Secretary
Thomas Kim, Chief Legal Officer, is also Company Secretary to the Board. Directors have access to the advice and services of the Company Secretary.
Access to Management and Professional Advisors
The Board has access to members of management and professional advisors. The Board and its committees may invite any member of senior management, employee, outside advisor or other person to attend or report at any of their meetings. The Board and any of its committees may retain an outside independent professional advisor at any time at the expense of our company and have the authority to determine the advisor’s fees and other retention terms. Individual directors may retain an outside independent professional advisor at the expense of our company subject to notifying the Corporate Governance Committee in advance.
The HR Committee retains an independent consulting firm to advise it on compensation matters relating to senior management. The independent consulting firm also reviews executive compensation programs and provides guidance and analysis on plan design and market trends and practices.
The HR Committee also utilizes and relies on market survey data provided by a consulting firm regarding executive compensation for organizations of comparable size and scope with which Thomson Reuters is most likely to compete for executive talent. Additional information is provided in the “Compensation Discussion and Analysis” section of this circular.
Delegation of Authority
To clarify the division of responsibility between the Board and management, the Board has adopted a delegation of authority policy. This policy delegates certain decision-making and operating authority to senior management and has been adopted by the Board to enhance our internal controls and allow management appropriate flexibility to deal with certain matters without obtaining specific Board approval. The Board also delegates certain responsibilities to the Audit Committee, Corporate Governance Committee, HR Committee and Risk Committee, and oversees the committees’ fulfillment of their responsibilities. The responsibilities of each committee are described in more detail below.
The Board meets regularly in order to discharge its duties effectively. Directors are expected to attend all meetings of the Board including committee meetings, if applicable, and annual meetings of shareholders. The following table provides information about the number of Board and committee meetings in 2020.
| Number of Meetings | ||
| Board |
8 | |
| Audit Committee |
7 | |
| Corporate Governance Committee |
6 | |
| HR Committee |
7 | |
| Risk Committee |
6 | |
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Five of the Board’s eight meetings in 2020 were regularly scheduled. Two of the Board’s regularly scheduled meetings prior to the COVID-19 pandemic were held in person and the three regularly scheduled meetings during the ongoing pandemic were held virtually. The Board also held three special meetings in 2020. One meeting related to the new CEO/CFO appointments and former CEO/CFO transition agreements and two meetings focused on the impact of the COVID-19 pandemic on the company.
The following table sets forth the attendance of our directors at Board and committee meetings in 2020. In 2020, attendance for these individuals at all Board and committee meetings was approximately 98% and approximately 97%, respectively.
| Meetings Attended | ||||||||||||||||||
| Director |
Board | % Board Attendance |
Audit Committee |
Corp. Governance |
HR Committee |
Risk Committee |
Committee Total |
Total Meetings |
Total% | |||||||||
| David Thomson |
8 of 8 | 100% | – | – | – | – | – | 8 of 8 | 100% | |||||||||
| Steve Hasker |
6 of 6 | 100% | – | – | – | – | – | 6 of 6 | 100% | |||||||||
| Kirk Arnold |
8 of 8 | 100% | 7 of 7 | 2 of 2 | 7 of 7 | 2 of 2 | 18 of 18 | 26 of 26 | 100% | |||||||||
| David W. Binet |
8 of 8 | 100% | – | 6 of 6 | 7 of 7 | 6 of 6 | 19 of 19 | 27 of 27 | 100% | |||||||||
| W. Edmund Clark, C.M. |
7 of 8 | 88% | – | 6 of 6 | 7 of 7 | 13 of 13 | 20 of 21 | 95% | ||||||||||
| Michael E. Daniels |
7 of 8 | 88% | 7 of 7 | 6 of 6 | 6 of 7 | 6 of 6 | 25 of 26 | 32 of 34 | 94% | |||||||||
| Kirk Koenigsbauer |
6 of 6 | 100% | 5 of 5 | – | – | 4 of 4 | 9 of 9 | 15 of 15 | 100% | |||||||||
| Deanna Oppenheimer |
1 of 1 | 100% | – | – | – | – | – | 1 of 1 | 100% | |||||||||
| Vance K. Opperman |
8 of 8 | 100% | 7 of 7 | 6 of 6 | 7 of 7 | 5 of 6 | 25 of 26 | 33 of 34 | 97% | |||||||||
| Simon Paris |
1 of 1 | 100% | – | – | – | – | – | 1 of 1 | 100% | |||||||||
| Kim M. Rivera |
8 of 8 | 100% | 6 of 7 | – | – | 1 of 1 | 7 of 8 | 15 of 16 | 94% | |||||||||
| Barry Salzberg |
8 of 8 | 100% | 7 of 7 | 6 of 6 | – | 6 of 6 | 19 of 19 | 27 of 27 | 100% | |||||||||
| Peter J. Thomson |
8 of 8 | 100% | – | – | 7 of 7 | – | 7 of 7 | 15 of 15 | 100% | |||||||||
| Wulf von Schimmelmann |
8 of 8 | 100% | 4 of 4 | 2 of 2 | 6 of 7 | – | 12 of 13 | 20 of 21 | 95% | |||||||||
| Former directors |
||||||||||||||||||
| Sheila Bair |
6 of 6 | 100% | 4 of 4 | – | – | 4 of 4 | 8 of 8 | 14 of 14 | 100% | |||||||||
| Kristen C. Peck |
6 of 6 | 100% | – | 3 of 4 | 4 of 5 | – | 7 of 9 | 13 of 15 | 87% | |||||||||
| James C. Smith |
3 of 3 | 100% | – | – | – | – | – | 3 of 3 | 100% | |||||||||
Our company is a “controlled company” as a result of Woodbridge’s ownership.
The NYSE corporate governance listing standards require a listed company to have, among other things, solely independent directors on its compensation committee and nominating/corporate governance committee. A “controlled company” (as defined by the NYSE) is a company of which more than 50% of the voting power is held by an individual, group or another company and is exempt from these requirements.
Supplemental guidelines issued by the Canadian Coalition for Good Governance (CCGG) address controlled companies. A “controlled company” (as defined by CCGG) includes corporations with a controlling shareholder who controls a sufficient number of shares to be able to elect the board of directors or to direct the management or policies of the corporation.
While a majority of members of each of the Corporate Governance Committee and the HR Committee of our company are independent, the Board believes it is appropriate for David Binet, Ed Clark and Peter Thomson, who are not considered to be independent under applicable rules because of their affiliation with Woodbridge, to serve on these committees and has approved our reliance on the NYSE’s controlled company exemption to do so. CCGG has stated that it believes it is appropriate for directors who are related to the controlling shareholder to sit on these committees to bring the knowledge and perspective of the controlling shareholder to executive compensation, appointments and Board nominations.
A majority of members of the Risk Committee are independent. No directors affiliated with Woodbridge serve on our Audit Committee, which is required to have solely independent directors.
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This section provides information about the Board’s four committees (Audit, Corporate Governance, HR and Risk), including each committee’s responsibilities, members and activities in 2020. Additional information about each committee is provided below. The following table sets forth the current membership of our four Board committees. David Thomson (Chairman of the Board) and Steve Hasker (President and CEO) are not members of any of the Board’s committees.
| Committee Membership | ||||||||
|
Name of Director |
Audit | Corporate Governance | HR | Risk | ||||
| Kirk E. Arnold1 |
✓ | ✓ | ✓ (Chair) | |||||
| David W. Binet |
✓ | ✓ | ✓ | |||||
| W. Edmund Clark, C.M. |
✓ | ✓ (Chair) | ||||||
| Michael E. Daniels |
✓ | ✓ (Chair) | ✓ | ✓ | ||||
| Kirk Koenigsbauer |
✓ | ✓ | ||||||
| Deanna Oppenheimer2 |
✓ | ✓ | ||||||
| Vance K. Opperman |
✓ | ✓ | ✓ | ✓ | ||||
| Simon Paris |
✓ | |||||||
| Kim M. Rivera |
✓ | ✓ | ||||||
| Barry Salzberg |
✓ (Chair) | ✓ | ✓ | |||||
| Peter Thomson |
✓ | |||||||
| Wulf von Schimmelmann |
✓ | ✓ | ||||||
|
Total |
7 | 8 | 7 | 7 | ||||
| 1 | Kirk also served as a member of the Audit Committee from January 15, 2020 through November 10, 2020. Kirk stepped down from the Audit Committee in connection with the appointments of Deanna Oppenheimer and Simon Paris to the Board (and the Audit Committee) on November 11, 2020. |
| 2 | Deanna was appointed to the Corporate Governance Committee in March 2021. |
Each of the Board’s committees has a charter. The charters are reviewed annually by the relevant committee and the Corporate Governance Committee. These charters and a committee chair position description are publicly available at www.tr.com.
Responsibilities
The Audit Committee is responsible for assisting the Board in fulfilling its oversight responsibilities in relation to:
| · | the integrity of financial statements and other financial information relating to our company; |
| · | the qualifications, independence and performance of the independent auditor (PricewaterhouseCoopers LLP); |
| · | the adequacy and effectiveness of our internal control over financial reporting and disclosure controls and procedures; |
| · | the effectiveness of the internal audit function; |
| · | the overall assessment and management of risk; and |
| · | any additional matters delegated to the Audit Committee by the Board. |
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In the course of fulfilling its mandate, the Audit Committee focused on several topics in 2020, which are reflected in the work plan below.
|
2020 Primary Audit Committee Activities | ||
| · Review and discuss the company’s annual and quarterly consolidated financial statements and related MD&A; · Review and approve our earnings press releases which include financial results and financial outlooks, with a focus in 2020 on the impact of the ongoing COVID-19 pandemic on the company; · Receive periodic updates regarding the company’s finance operations and its ability to work from home; · Receive periodic updates from our Corporate Compliance and Audit Department on the internal audit plan and process, internal control over financial reporting and fraud-related matters; · Receive periodic updates from senior management on financial risk topics such as tax, treasury and accounting; · Review the scope and plans for the audit of our company’s financial statements; · Review approve the company’s non-audit services policy as well as certain non-audit services to be provided by PricewaterhouseCoopers LLP; |
· Review and approve fees to be paid to PricewaterhouseCoopers LLP for its services; · Discuss with PricewaterhouseCoopers LLP: · its independence from Thomson Reuters (and receiving disclosures from PricewaterhouseCoopers LLP in this regard); · all critical accounting policies and practices used or to be used by Thomson Reuters; · all alternative treatments of financial information within IFRS that have been discussed with management, ramifications of the use of such alternative treatments and the treatment preferred by the auditor; and · all other matters required to be communicated under IFRS. | |
Financial Literacy
All members of the Audit Committee are financially literate in accordance with applicable Canadian and U.S. securities rules. Barry Salzberg qualifies as an “audit committee financial expert” (within the meaning of applicable SEC rules) and meets applicable tests for accounting or related financial management expertise within the meaning of NYSE listing standards.
Audit Committee Members’ Education and Experience
The following is summarizes the education and experience of each member of the Audit Committee that is relevant to the performance of his or her responsibilities. Kirk Koenigsbauer, Deanna Oppenheimer and Simon Paris were appointed to the Audit Committee in 2020.
|
Audit Committee Member |
Education/Experience | |
| Barry Salzberg (Chair) |
· Former Global Chief Executive Officer of Deloitte Touche Tohmatsu Limited · Former Professor at Columbia Business School · Degree in accounting from Brooklyn College, JD from Brooklyn Law School and LLM in Tax from New York University | |
| Michael E. Daniels |
· More than 25 years of executive experience at IBM · Former member of the Tyco International Ltd. audit committee · Member of SS&C Technologies Holdings, Inc. and Johnson Controls International plc Boards of directors | |
| Kirk Koenigsbauer |
· More than 18 years of executive experience at Microsoft · Responsible for product planning, pricing, sales, marketing and ecosystem development for various Microsoft offerings | |
| Deanna Oppenheimer |
· Former Vice Chair of Global Retail Banking of Barclays PLC · Former President of Consumer Banking of Washington Mutual, Inc. · Former member of AXA Global Insurance audit committee · Former member of NCR Corporation audit committee | |
| Vance K. Opperman |
· Former President and COO of West Publishing Company · President and CEO of Key Investment, Inc. · Former Chair of Audit Committee of Thomson Reuters for over 15 years · Member of TCF Financial Corporation audit committee · Represented financial institutions in securities and financial regulations matters as a practicing attorney | |
| Simon Paris |
· Chief Executive Officer of Finastra · Chair of the World Trade Board | |
| Kim M. Rivera |
· Former President, Strategy and Business Management and Chief Legal Officer of HP Inc. · Supported audit committees of two publicly-traded Fortune 500 companies | |
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Financial Reporting
The Audit Committee meets to discuss and review our:
| · | annual and quarterly earnings releases; and |
| · | annual and quarterly management’s discussion and analysis (MD&A) and related financial statements. |
As is customary for a number of global multinational companies, the Board has delegated review and approval authority to the Audit Committee for our quarterly earnings releases, MD&A and financial statements. Following the Audit Committee’s recommendation, the full Board reviews and approves our annual MD&A and annual audited financial statements, as required by applicable law.
Prior to an Audit Committee meeting at which draft financial reporting documents will be discussed, a draft is distributed to the members of the Audit Committee for review and comment. The CFO and the Chief Accounting Officer and a representative from the independent auditor meet with the Chair of the Audit Committee to preview the audit-related issues which will be discussed at the Audit Committee meeting. At the Audit Committee meeting, the Chief Accounting Officer discusses the financial statements and disclosure matters and the Audit Committee members are given an opportunity to raise any questions or comments. The independent auditor also participates in the meeting. All directors are also provided with a draft and an opportunity to comment before or during the Audit Committee meeting. When the Audit Committee is satisfied with the disclosure, it provides its approval and the material is released.
For the annual report, a draft is distributed to the members of the Board in advance of a Board meeting for their review and approval. At the Board meeting, directors are given an opportunity to raise any questions or comments.
Based upon the reports and discussions described in this circular, and subject to the limitations on the role and responsibilities of the Audit Committee in its charter, the Audit Committee recommended that our Board approve the filing of the audited consolidated financial statements and related MD&A and their inclusion in our annual report for the year ended December 31, 2020.
Independent Auditor
The Audit Committee is responsible for selecting, evaluating and recommending for nomination the independent auditor to be proposed for appointment or re-appointment. The Audit Committee recommended that PricewaterhouseCoopers LLP be re-appointed as our independent auditor to serve until our next meeting of shareholders in 2022 and that our Board submit this appointment to shareholders for approval at the 2021 annual meeting of shareholders. In connection with recommending PricewaterhouseCoopers LLP, the Audit Committee considered the firm’s provision of services to Thomson Reuters over the last year, including the performance of the lead audit engagement partner and the audit team. The Audit Committee also reviewed the appropriateness of PricewaterhouseCoopers LLP’s fees in relation to the size of Thomson Reuters and its global footprint. The Audit Committee continues to be satisfied with PricewaterhouseCoopers LLP’s performance and believes that its continued retention as independent auditor is in the best interests of Thomson Reuters and its shareholders.
Throughout the year, the Audit Committee evaluates and is directly responsible for our company’s relationship with PricewaterhouseCoopers LLP. The Audit Committee appoints PricewaterhouseCoopers LLP as our independent auditor after reviewing and approving its engagement letter. The Audit Committee also determines PricewaterhouseCoopers LLP’s fees.
The Audit Committee and representatives from PricewaterhouseCoopers LLP meet several times during the year. In 2020, representatives from PricewaterhouseCoopers LLP attended each Audit Committee meeting and met with the Audit Committee in separate sessions.
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PricewaterhouseCoopers LLP is accountable to the Audit Committee and reports directly to the Audit Committee.
On an annual basis, before PricewaterhouseCoopers LLP issues its report on our company’s annual financial statements, the Audit Committee:
| · | Confirms that PricewaterhouseCoopers LLP has submitted a written statement describing all of its relationships with Thomson Reuters that, in PricewaterhouseCoopers LLP’s professional judgment, may reasonably be thought to bear on its independence; |
| · | Discusses any disclosed relationships or services, including any non-audit services, that PricewaterhouseCoopers LLP has provided to Thomson Reuters that may affect its independence; |
| · | Obtains written confirmation from PricewaterhouseCoopers LLP that it is independent with respect to Thomson Reuters within the meaning of the Rules of Professional Conduct adopted by the Ontario Institute of Chartered Accountants and the standards established by the Public Company Accounting Oversight Board; and |
| · | Confirms that PricewaterhouseCoopers LLP has complied with applicable law with respect to the rotation of certain members of the audit engagement team for Thomson Reuters. |
The Audit Committee has also adopted a policy regarding its pre-approval of all audit and permissible non-audit services provided to our company by PricewaterhouseCoopers LLP.
| · | The policy gives detailed guidance to management as to the specific types of services that have been pre-approved by the Audit Committee. |
| · | The policy requires the Audit Committee’s specific pre-approval of all other permitted types of services that have not already been pre-approved. |
The Audit Committee’s charter allows the Audit Committee to delegate to one or more members the authority to evaluate and approve engagements in the event that the need arises for approval between Audit Committee meetings. Pursuant to this charter provision, the Audit Committee has delegated this authority to its Chair. If the Chair approves any such engagements, he must report his approval decisions to the full Audit Committee at its next meeting. For the year ended December 31, 2020, none of the audit-related, tax or all other fees of Thomson Reuters described above made use of the de minimis exception to pre-approval provisions contained in Rule 2-01(c)(7)(i)(c) of SEC Regulation S-X and Section 2.4 of the Canadian Securities Administrators’ Multilateral Instrument 52-110 (Audit Committees).
Internal Audit and Internal Control Over Financial Reporting
Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with international financial reporting standards. Our company has adopted the Committee of Sponsoring Organizations of the Treadway Commission guidance for implementing our internal control framework as part of compliance with the Sarbanes-Oxley Act and applicable Canadian securities law.
The Corporate Compliance and Audit department of our company, which performs an internal audit function, prepares and oversees the overall plan for our internal control over financial reporting.
Each year, Corporate Compliance and Audit identifies certain processes, entities and/or significant accounts to be within the scope of its internal control focus areas and testing for the year. In determining the proposed scope of its annual internal audit plan, the Corporate Compliance and Audit department identifies, assesses and prioritizes risk to Thomson Reuters and considers both quantitative and qualitative factors.
In the first quarter of 2020, Corporate Compliance and Audit presented an annual internal audit plan to the Audit Committee for its review and approval. The Head of Corporate Compliance and Audit met with the Chair of the Audit Committee to preview the internal audit and internal controls matters which were to be discussed at each Audit Committee meeting. The Head of Corporate Compliance and Audit then provided updates to the Audit Committee at meetings throughout the year. During the second half of 2020, the Corporate Compliance and Audit department tested applicable controls in order to achieve compliance with the required year-end evaluation of the effectiveness of the internal control system.
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Based on this evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2020. In March 2021, the Audit Committee reviewed and discussed with management its assessment and report on the effectiveness of our internal control over financial reporting as of December 31, 2020. The Audit Committee also reviewed and discussed with PricewaterhouseCoopers LLP its review and report on the effectiveness of our internal control over financial reporting.
The Head of the Corporate Compliance and Audit department reports directly to the Audit Committee (with a dotted line reporting relationship to our CFO).
Disclosure and Communications Controls and Procedures
We have adopted disclosure controls and procedures to ensure that all information required to be disclosed by us in reports and filings with Canadian and U.S. securities regulatory authorities and stock exchanges and other written and oral information that we publicly disclose is recorded, processed, summarized and reported accurately and within the time periods specified by rules and regulations of the securities regulatory authorities. These disclosure controls and procedures are also designed to ensure that this information is accumulated and communicated to management (including the CEO and CFO), as appropriate, to allow timely decisions regarding required disclosure. The Audit Committee receives an annual update from management regarding the adequacy and effectiveness of our disclosure controls and procedures, including the role and responsibilities of management’s disclosure committee.
As required by applicable Canadian and U.S. securities laws, our CEO and CFO provide certifications that they have reviewed our annual and quarterly reports, that the reports contain no untrue statements or omissions of material facts and that the reports fairly present our financial condition, results of operations and cash flows. In addition, the CEO and CFO make certifications regarding our disclosure controls and procedures and internal control over financial reporting. Our CEO and CFO concluded that our disclosure controls and procedures were effective as of December 31, 2020.
Risk Assessment and Management
The Audit Committee continues to discuss Thomson Reuters’ guidelines and policies that govern the overall process by which risk assessment and risk management is undertaken at the company. As part of this oversight role, the Audit Committee periodically reviews reports from or meets with the Risk Committee regarding the company’s processes for assessing and managing risk. Risk topics not otherwise assigned to the Audit Committee or the HR Committee are overseen by the Risk Committee, and the Corporate Governance Committee oversees the division of responsibilities between the Board and its committees. As part of this division of responsibilities, the Audit Committee discusses the company’s major financial risk exposures and the steps that management has taken to monitor and control such exposures. As part of its financial risk management oversight responsibilities, the Audit Committee met with management in 2020 to discuss treasury risk management and the external tax environment.
Whistleblower Policy
The Audit Committee has adopted procedures for the receipt, retention and treatment of complaints received by our company regarding accounting, internal accounting controls, auditing matters, and disclosure controls and procedures, as well as procedures for the confidential, anonymous submission of concerns by our employees regarding questionable accounting, internal accounting controls, auditing matters or disclosure controls and procedures. These procedures are set forth in the Thomson Reuters Code of Business Conduct and Ethics, which is described earlier in this circular.
Corporate Governance Committee
The Corporate Governance Committee is responsible for assisting the Board in fulfilling its oversight responsibilities in relation to:
| · | our company’s overall approach to corporate governance; |
| · | the size, composition and structure of the Thomson Reuters Board and its committees, including the nomination of directors; |
| · | orientation and continuing education for directors; |
| · | related party transactions and other matters involving actual or potential conflicts of interest; and |
| · | any additional matters delegated to the Corporate Governance Committee by the Board. |
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The following table sets forth the Corporate Governance Committee’s work plan for 2020.
|
2020 Primary Corporate Governance Committee Activities | ||
| · Review size, composition and structure of the Board and its committees for effective decision-making, including new committee members · Board succession planning (which includes Board diversity) · Report on the results of Board, committee and director review processes · Assess director independence, financial literacy and audit committee financial expert status · Nominate directors for the annual meeting · Review director compensation and structure · Review corporate governance and shareholder proposal disclosure for draft proxy circular and virtual AGM format · Review corporate governance guidelines and committee charters · Review committee composition and chairs · Review Board diversity policy · Review external analysis of proxy circular and other shareholder group assessments · Plan Board, committee and director assessments · Discuss the company’s approach to ESG · Review compliance with Thomson Reuters Trust Principles · Report on effectiveness of Thomson Reuters Code of Business Conduct and Ethics · Review D&O insurance and indemnification |
Periodically · Review orientation and continuing education initiatives for directors · Review position descriptions for Board · Review related party transactions and conflicts of interest · Monitor developments in corporate governance and recommend appropriate initiatives as part of overall approach to governance · Consider agendas for meetings of independent directors · Review Board and CEO expenses · Review delegation of authority · Review share ownership expectations and compliance · Approve any waivers of Code of Business Conduct and Ethics · Monitor relationships between senior management and the Board · Be available as a forum for addressing the concerns of individual directors | |
Director Qualifications, Recruitment, Board Size and Appointments
The Corporate Governance Committee is responsible for assessing the skills and competencies of current directors, their anticipated tenure and the need for new directors. The Corporate Governance Committee retains a professional search firm to assist it in identifying and evaluating potential director candidates. Through its search firm, the Corporate Governance Committee maintains an evergreen list of potential director candidates.
The Corporate Governance Committee recommends candidates for initial Board membership and Board members for re-nomination. Recommendations are based on character, integrity, judgment, skills and competencies, business experience, record of achievement and any other attributes that would enhance the Board and overall management of the business and affairs of our company.
Diversity is among these other attributes as the Corporate Governance Committee believes that having a diverse Board enhances Board operations. While the Corporate Governance Committee focuses on finding the best qualified candidates for the Board, a nominee’s diversity may be considered favorably in his or her assessment. In 2020, our company’s Corporate Governance Guidelines were updated and currently reflect that for purposes of those guidelines, diversity includes business experience, thought, style, culture, gender, geographic background, race, visible minorities, national origin, Indigenous persons, religion, gender identity and expression, sexual orientation, disability, age and other personal characteristics.
In identifying candidates for election or re-election, the Board and the Corporate Governance Committee specifically consider the level of representation of women on the Board. Three of the 14 director nominees proposed for election (approximately 21%) at this year’s meeting are women and one director nominee has self-identified as a visible minority. When the Corporate Governance Committee engages a professional search firm to help identify and evaluate director candidates, the search firm is advised that identifying women and other diverse candidates are some of the Board’s priorities (along with directors who have applicable background and leadership experience in the professional services industries in which our company operates).
In 2020, the Corporate Governance Committee discussed Board diversity at three of its meetings with the CEO and Chief Legal Officer. As part of these discussions, the Corporate Governance Committee reviewed board diversity data related to Canadian public companies as well as Canadian public companies that have a principal shareholder. The Corporate Governance Committee also considered recommendations for increasing Board diversity in the future.
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New Director Appointments Since the 2020 Annual Meeting of Shareholders
Since the 2020 annual meeting of shareholders, we appointed Deanna Oppenheimer and Simon Paris to our Board. Deanna and Simon each met with David Thomson (Chairman), David Binet (Deputy Chairman), Vance Opperman (Lead Independent Director), Mike Daniels (Corporate Governance Committee Chair), Ed Clark (HR Committee Chair), Peter Thomson, Steve Hasker (CEO), and Thomas Kim (Chief Legal Officer and Company Secretary) in order to gauge their appropriateness for the Board, their cultural fit with the existing collaborative character of the Board, and their interest in serving as a Thomson Reuters director.
| · | Deanna Oppenheimer – In evaluating Deanna’s profile, the Corporate Governance Committee put weight on her leadership and transformation experience and customer centricity. |
| · | Simon Paris – In evaluating Simon’s profile, the Corporate Governance Committee put weight on his experience as an executive in the technology industry at a time when Thomson Reuters is increasingly focusing on providing more cloud-based services that draw together trusted content and information, innovative technology and deep domain expertise. |
In September 2020, the Corporate Governance Committee recommended to our Board that Deanna and Simon be appointed effective as of November 11, 2020. As part of their appointments, Deanna and Simon joined our Board’s Audit Committee.
Director Orientation
All new directors are provided with an orientation in connection with their election or appointment to the Board, which includes:
| · | Induction materials describing our business, our corporate governance structure and related policies and information; and |
| · | Meetings with the Chairman, Lead Independent Director, CEO, CFO and other executives. |
The Board’s secure website, management reports and other means of communication also provide directors with information to ensure their knowledge and understanding of our business remain current.
Largely in connection with Board and committee meetings, members of senior management prepare memoranda and presentations on strategic and operating matters which are distributed to the directors. These Board papers are often prepared in connection with matters that require director approval under our policies or applicable law and are also used to inform the directors about developments that senior management believe should be brought to the directors’ attention. The Board also periodically receives reports on other non-operational matters, including corporate governance, taxation, pension and treasury matters.
Continuing Education
The Corporate Governance Committee is responsible for confirming that procedures are in place and resources are made available to provide directors with appropriate continuing education opportunities.
Our directors are members of the National Association of Corporate Directors (NACD) and the company pays the cost of that membership. NACD membership provides directors with access to insights, analytics, courses and events.
To facilitate ongoing education, the directors are also entitled to attend external continuing education opportunities at the expense of Thomson Reuters.
As part of our continuing education programs for directors, we previously provided members of the Audit Committee with access to Thomson Reuters’ Checkpoint Learning business, which offers a series of self-directed, online courses and instructor-led webinars and seminars. Courses cover topics such as accounting, auditing, ethics, finance, tax and technology.
The following table summarizes some of the education sessions provided to our directors in 2020:
| Month |
Topic/Subject | Attendees | Presenter(s) | |||
| February |
Executive compensation risks | HR Committee | FW Cook (external compensation consultant) | |||
| March |
Information security update | Risk Committee | External information security consultant and Thomson Reuters Chief Information Security Officer | |||
| Legal and compliance update | Risk Committee | Thomson Reuters Chief Legal Officer and Chief Compliance Officer | ||||
| Disclosure controls and procedures update | Audit Committee | Thomson Reuters internal legal counsel | ||||
| September |
Privacy update | Risk Committee | Thomson Reuters Chief Legal Officer and Chief Privacy Officer | |||
| Executive compensation trends and developments | HR Committee | FW Cook (external compensation consultant) | ||||
| Automation in Commercial Operations and Finance | Audit Committee | Thomson Reuters management | ||||
| Quarterly |
Tax updates | Audit Committee | Thomson Reuters Head of Tax | |||
| Quarterly |
Accounting updates | Audit Committee | Thomson Reuters Chief Accounting Officer | |||
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Site Visits
Due to the ongoing COVID-19 pandemic, the Board was unable to visit a Thomson Reuters site in 2020 as part of our director continuing education/orientation program coordinated by the Corporate Governance Committee. In previous years, the Board coordinated the timing of these site visits to coincide with regularly scheduled Board meetings. This has allowed substantially all of the directors to participate in the site visits at the same time and then attend a Board meeting as part of one trip. The visits are designed to:
| · | Enable directors to update themselves on our key businesses, products and services; |
| · | Provide an opportunity for directors to interact with key executives, high potential talent and customers; and |
| · | Give a broader selection of current and future executives the opportunity to meet directors. |
Feedback on this program from directors and location hosts has been positive and the Board hopes to resume this program in the future.
Board Effectiveness Review
The Corporate Governance Committee periodically reviews the effectiveness of the Board, its committees and individual directors. The Lead Independent Director meets individually with each independent and non-independent director during the year. The Lead Independent Director subsequently provides an update to the Corporate Governance Committee regarding his discussions with individual directors. The Lead Independent Director most recently provided an update to the Corporate Governance Committee and the Board in March 2021.
From time to time, director questionnaires or surveys are sent to members of the Board to seek feedback and input on the Board’s and committees’ supervision of senior management, strategic planning, risk management, financial reporting, disclosure, governance as well as on the conduct and effectiveness of Board and committee meetings. Results from questionnaires/surveys are initially discussed with the Corporate Governance Committee and an update is provided to the Board.
Annually, the Board reviews its responsibilities by assessing our corporate governance guidelines and each committee of the Board performs an annual review of its charter. The Corporate Governance Committee also reviews various position descriptions on an annual basis.
The Corporate Governance Committee believes that each director continues to be effective and that each director has demonstrated a commitment to his or her role on the Board and its committees. Based on the Corporate Governance Committee’s recommendations, the Board recommends that all of the director nominees be elected at the meeting to be held on June 9, 2021, as each of them is expected to bring valuable skills and experience to the Board and its committees.
Conflicts of Interest and Transactions Involving Directors or Officers
In the case of any potential or actual conflict of interest, each director is required to inform the Board and executive officers are required to inform the CEO. We also ask our directors and executive officers about potential or actual conflicts of interest in annual questionnaires. Our policies on conflicts of interest are reflected in our Code of Business Conduct and Ethics, our Corporate Governance Guidelines and in supplemental guidance approved by the Board.
Unless otherwise expressly determined by the Board or relevant committee of the Board, a director who has a conflict of interest in a matter before the Board or such committee must not receive or review any written materials related to the conflict subject area, nor may the director attend any part of a meeting during which the matter is discussed or participate in any vote on the matter, except where the Board or the applicable committee has expressly determined that it is appropriate for him or her to do so.
Significant related party transactions are considered by the Corporate Governance Committee or, where appropriate, a special committee of independent directors or the full Board. If a director has a significant, ongoing and irreconcilable conflict, voluntary resignation from the Board or the conflicting interest may be appropriate or required.
For more information about related party transactions in the last two years, please see the management’s discussion and analysis (MD&A) section of our 2020 annual report.
Related Party Transactions
The Corporate Governance Committee reviews all proposed significant related party transactions and situations involving a Board member’s or affiliate’s potential or actual conflict of interest that are not required to be dealt with by an “independent special committee” pursuant to applicable securities law rules. Any member of the Corporate Governance Committee who is a party to or has a potential conflict of interest in a proposed transaction, or who has a material interest in any related party transaction or in a party to a related party transaction, must not receive or review any written materials related to the conflict subject area, nor attend any part of a meeting during which the matter is discussed or participate in any vote on the matter, except where the Corporate Governance Committee has expressly determined that it is appropriate for him or her to do so.
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The HR Committee is responsible for assisting the Board in fulfilling its oversight responsibilities in relation to:
| · | the selection and retention of senior management; |
| · | planning for the succession of senior management; |
| · | talent and professional development for senior management; |
| · | the compensation of the CEO and other senior management and assessment of compensation risk; |
| · | human capital management; |
| · | the management of pension and significant benefit plans for employees; and |
| · | any additional matters delegated to the HR Committee by the Board. |
The following table provides an overview of the HR Committee’s work plan for 2020.
|
2020 Primary HR Committee Activities | ||
| · Approve compensation arrangements for our new CEO and CFO and transition agreements for our former CEO and CFO · Annual compensation review for other executive officers · Annual individual performance evaluation of the CEO and review of evaluations of other executive officers · Approve 2019 annual incentive award payouts · Approve 2020 annual and long-term incentive award design, the mix of cash and equity compensation, the allocation of equity-based awards, and performance goals · Discuss 2021 annual and long-term incentive award design · Approve compensation disclosure in the annual management proxy circular |
· Discuss human capital management matters such as diversity and inclusion initiatives, talent, organizational health and culture · Succession planning reviews · Compensation program risk assessment · Compensation trends and regulatory development review · Compensation peer group review and approval · Equity share plan reserve analysis · “Say on pay” modeling · Retirement plans review · Review senior management’s share ownership guidelines · Periodic consideration of certain new senior executive hirings and terminations | |
The following is a brief summary of the experience of each member of the HR Committee that is relevant to the performance of his or her responsibilities. Kirk Arnold was appointed to the HR Committee in January 2020.
|
HR Committee Member |
Experience | |
| W. Edmund Clark, C.M. (Chair) |
· Former Group President and Chief Executive Officer of TD Bank Group · Familiarity with global compensation standards | |
| Kirk E. Arnold |
· Member of Ingersoll Rand Inc. compensation committee · Member of the Board of Directors of The Predictive Index, a private software company focused on human resource engagement tools and leadership practices · Senior Lecturer at MIT Sloan School of Management, including teaching a course on compensation strategies · Former Chief Executive Officer of Data Intensity, Inc., Keane, Inc. and NerveWire | |
| David W. Binet |
· Former member of the Compensation Committee of CTV Globemedia · Secretary to the Thomson Reuters HR Committee for 12 years | |
| Michael E. Daniels |
· Over 25 years of executive experience at IBM · Familiarity with global compensation standards · Chair of Johnson Controls International plc compensation committee | |
| Vance K. Opperman |
· Former President and COO of West Publishing Company · President and CEO of Key Investment, Inc. · Chair of TCF Financial Corporation compensation committee | |
| Peter J. Thomson |
· Chair of Woodbridge and familiar with compensation programs at many companies · Familiarity with global compensation standards | |
| Wulf von Schimmelmann |
· Former CEO of Deutsche Postbank AG and chair of the HR Committee · Former member of Deutsche Post DHL AG HR Committee | |
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Compensation Planning
The HR Committee’s responsibilities include establishing, implementing and overseeing our compensation policies and programs. A detailed discussion of the HR Committee’s responsibilities in this area is provided in the “Compensation Discussion and Analysis” section of this circular.
CEO Performance Evaluation and Objectives Setting
The HR Committee assists the Board in setting objectives each year for the CEO. The HR Committee evaluates the performance of the CEO against these objectives at year end. The HR Committee reports to the full Board on the objectives for the forthcoming year and the performance against objectives in the preceding year. The HR Committee also maintains a written position description for the CEO.
Overview
Our human capital practices and initiatives are designed to attract, motivate and retain high quality and talented employees across all of our businesses who feel valued, are provided with opportunities to grow, and are driven to succeed. The HR Committee and our Board regularly engage with management on a variety of human capital topics that apply to our current workforce of approximately 24,000 employees, such as compensation and benefits, culture and employee engagement, talent acquisition/development, and diversity and inclusion. The Board and management engage in detailed succession planning discussions for all senior roles, and the principles employed at the senior-most levels of the organization are embraced by management throughout the entire organization. A more detailed discussion of some of these topics is provided later in this section.
Over the last few years, oversight of human capital management has been a greater focus area for the HR Committee and the Board. As part of these ongoing discussions, management has periodically reported metrics and data to the HR Committee and Board on various human capital topics, which has helped our directors provide management with feedback and input. While we voluntarily publish numerous human capital-related metrics and data in our securities filings and on our website (notably in our Social Impact Report), some metrics and data are not publicly disclosed due to competitive considerations.
|
In 2020, the Board, HR Committee and management had several discussions regarding our company’s response to COVID-19 which addressed the impact of the pandemic on our employees. Thomson Reuters has not experienced any significant disruptions to its business as a result of COVID-19 and continues to be fully operational. Most of our employees continue to work remotely from their homes, enabled by technology that allows them to collaborate with customers and each other. We are developing detailed plans for a gradual, safe re-opening of our offices around the world, though we currently expect that the number of people who return to our offices before July 2021 will be small and on a voluntary basis. Essential employees who cannot work from home, such as Reuters News journalists and those working in the company’s Global Print facilities, follow various health and safety standards. We continue to act and plan based on guidance from global health organizations, relevant governments and evolving best practices.
|
In January 2021, we introduced new Thomson Reuters Mindsets & Behaviors that all employees are expected to live and demonstrate. The new Mindsets & Behaviors are expected to help us accomplish our most critical objectives and are based on strengths of our culture today as well as the best of what we are becoming.
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We expect that human capital management will continue to be an important focus area in the future for the Board and its committees because it ensures solid stewardship of our organization, supports important societal objectives, and is key to ensuring strategic advantage in the marketplace.
Talent Management and Succession Planning
A robust framework directly aligned with our business priorities is in place to enable an integrated approach to talent management and succession planning. We commit to developing a strong leadership pipeline by providing our current and future leaders with opportunities to learn and transform themselves, to drive business performance and add customer value. The CEO is a steward of the enterprise talent agenda and implemented a new semi-annual talent review process driving greater leader accountability for building a high-performance culture and a diverse leadership bench.
We aim to build an inclusive culture of world-class talent, stepping up advancement of women and other diverse talent into key leadership roles. Furthering our commitment, we introduced new diversity goals in 2020, as discussed in more detail below. This commitment to diversity, coupled with our philosophy to develop and promote from within, strengthens our culture, retains our key talent and provides more options for succession.
We have complemented our focus on inclusive culture with selective external hiring to procure critical skills, close any talent gaps and foster diverse thinking. Throughout 2020, we also hired a number of new leaders from leading organizations, including our Chief Product Officer (David Wong, formerly of Facebook), our Chief Operations & Technology Officer (Kirsty Roth, formerly of HSBC), our Chief Strategy Officer (Pat Wilburn, formerly of Microsoft), the President of our Corporates segment (Sunil Pandita, formerly of Honeywell) and our Head of Design (Charlie Claxton, formerly of Amazon).
The HR Committee plays a key role in overseeing talent management and succession planning strategies, with strong leadership from our CEO and Chief People Officer. As such, the HR Committee is regularly updated on the leadership development, and engagement of our employees. The HR Committee also partners with the CEO and the Chief People Officer in reviewing succession and developmental plans for executive management, critical talent and succession risk metrics, progress made over the year and plans for the upcoming year.
Diversity and Inclusion
Diversity and inclusion are more than just words for us. They are an integral part of our values, guiding us in everything we do. As an organization with diverse businesses competing in the global marketplace, we understand that one of the most effective ways of meeting and exceeding the needs of our diverse customers and shareholders is to have a workforce that reflects diversity.
We believe that a culture where every employee is treated with respect, feels valued and has a sense of belonging will help employees unleash their potential. Our objective is to seek out and hire talented, dedicated individuals from all walks of life and give them an opportunity to learn, develop and succeed within Thomson Reuters.
In 2020, we set a new goal to increase overall racial and ethnic diversity in our senior leadership levels (director and above) from 14% in 2020 to 18% by the end of 2021 and 20% or more by the end of 2022. We also have a goal within our racially and ethnically diverse leadership to double the number of Black employees in senior leadership levels from 30 to 60 or more by the end of 2022.
Women in Leadership
One component of our diversity and inclusion approach is identification, development and advancement of women globally for leadership positions. In 2020, the overall representation of women in senior leadership positions at Thomson Reuters and our subsidiaries was 35%, below our goal of 40% by end of 2020. We are now focused on meeting this goal by the end of 2021, with a further goal of increasing the overall representation of women in senior leadership roles to 45% by the end of 2022. This goal is strongly embedded into our talent practices and we are committed to drive continued efforts in this area. In 2020, eight of 25 members of the CEO’s Operating Committee were women. Three of our current 12 executive officers (Elizabeth Beastrom – President, Tax & Accounting; Kirsty Roth – Chief Operations & Technology Officer; and Mary Alice Vuicic – Chief People Officer), or 25%, are women.
We are focused on accelerating the development of women to strengthen our succession bench through various strategic initiatives, including the launch of Women in Technology initiative sponsored by our CEO, and our LeadHership1 and Leadership Program for Women development programs focused on developing early and mid-career women, respectively, accelerating their growth and readiness and enabling them to realize their full potential.
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Responsibilities
The Risk Committee is responsible for assisting the Board in fulfilling its oversight responsibilities in relation to:
| · | Thomson Reuters’ identification, assessment and management of enterprise risks, other than financial risks (which are overseen by the Audit Committee) or risks related to talent/employee matters (which are overseen by the HR Committee); and |
| · | any additional matters delegated to the Risk Committee by the Board. |
In 2020, the Risk Committee met with senior management to review the company’s controls and policies regarding risk assessment and risk management, including the steps and process taken to monitor and control risks. As part of this review, senior management presented an overview of its 2020 ERM process to the Risk Committee. The overview reflected key risks identified by management and a proposed calendar of future meetings for “deep dive” reviews and discussions about specific risks (at the Board or committee level). While the Risk Committee oversees and manages our company’s framework policies and procedures with respect to risk identification, assessment and management, it is the responsibility of our CEO and senior management to identify, assess and manage our company’s risks through the design, implementation and maintenance of our ERM program. The Risk Committee’s responsibilities include reviewing and approving the ERM framework on an annual basis.
The following table sets forth the Risk Committee’s work plan for 2020.
|
2020 Primary Risk Activities | ||
| · Approve top 2020 ERM risks · Discuss cybersecurity, data protection controls, business continuity/disaster recovery systems and other information security matters · Discuss legal and regulatory compliance risks that are not overseen by the Audit Committee · Discuss technology separation risks related to Thomson Reuters’ separation from Refinitiv (its former Financial & Risk business) · Review information security and other aspects of the company’s response to the COVID-19 pandemic · Discuss geopolitical risks and Reuters News business risks · Review cyber/network security insurance coverage · Approve 2021 ERM framework |
Periodically · Table-top exercises on topics such as cybersecurity · “Deep dives” on selected risk topics · Discuss reputational risks, other than those related to compliance with the Thomson Reuters Trust Principles, which are overseen by the Corporate Governance Committee | |
Joint Audit Committee and Risk Committee Meeting
As part of the Board’s risk assessment and risk management oversight, the Audit Committee and the Risk Committee met jointly in March 2020 to discuss topics of interest to each committee. This meeting was held after one committee ended its own scheduled meeting, and prior to the start of the other committee’s own scheduled meeting. The joint committee meeting was co-chaired by Barry Salzberg (Audit Committee Chair) and Sheila Bair (former Risk Committee Chair).
The topics discussed by the joint committees were the following:
| · | Review of the 2020 internal audit work plan; |
| · | Review of “Risk Factors” disclosure for the 2020 annual report; and |
| · | Update on technology and operational separation related to Thomson Reuters’ separation from Refinitiv (its former Financial & Risk business |
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HIGHLIGHTS
| · | We are proposing to re-appoint PricewaterhouseCoopers LLP (U.S.) as our independent auditor for another year until the 2022 annual meeting of shareholders. |
The Board unanimously recommends that PricewaterhouseCoopers LLP (U.S.) be appointed as the auditor of our company, to hold office until the next annual meeting of shareholders. It is also recommended that the Board be authorized to fix the remuneration of PricewaterhouseCoopers LLP (U.S.).
The following table sets forth fees related to services rendered by PricewaterhouseCoopers LLP and its affiliates in 2020 and 2019.
|
(in millions of U.S. dollars) |
2020 | 2019 | ||||||
| Audit fees |
$ | 11.9 | $ | 13.2 | ||||
| Audit-related fees |
1.3 | 1.4 | ||||||
| Tax fees |
3.3 | 4.7 | ||||||
| All other fees |
0.1 | 0.1 | ||||||
| Total |
$ | 16.6 | $ | 19.4 | ||||
The following are descriptions of fees for services rendered by PricewaterhouseCoopers LLP in 2020 and 2019.
These audit fees were for professional services rendered for the audits of consolidated financial statements, reviews of interim financial statements included in periodic reports, audits related to internal control over financial reporting, statutory audits and services that generally only the independent auditor can reasonably provide, such as comfort letters and consents. These services included French translations of our financial statements, MD&A and financial information included in our interim and annual filings and prospectuses and other offering documents.
Audit-related Fees
These audit-related fees were for assurance and related services that are reasonably related to the performance of the audit or review of the financial statements and are not reported under the “audit fees” category above. These services included subsidiary carve-out audits, transaction due diligence, comfort letter procedures and issuances, SSAE 16 engagements, licensing of technical research material, audits of various employee benefit plans and agreed-upon procedures principally related to executive compensation reporting.
Tax Fees
Tax fees were for tax compliance, tax advice and tax planning. These services included the preparation and review of corporate and expatriate tax returns, assistance with tax audits and transfer pricing matters, advisory services relating to federal, state, provincial and international tax compliance, and restructurings, mergers and acquisitions.
All Other Fees
Fees disclosed in the tables above under the item “all other fees” were for services other than the audit fees, audit-related fees and tax fees described above. These services include independent IT process reviews.
Pre-approval Policies and Procedures
Information regarding our policy regarding pre-approval of all audit and permissible non-audit services is set forth in the corporate governance disclosure included earlier in this circular.
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HIGHLIGHTS
| · | We actively engage with our stakeholders throughout the year. |
| · | We welcome feedback and input from our stakeholders. |
Thomson Reuters actively engages with its stakeholders on a variety of topics, including:
| · | Financial performance |
| · | Corporate/growth strategy |
| · | Corporate governance |
| · | Executive compensation |
| · | Human capital management |
| · | Diversity and inclusion |
| · | Other ESG-related topics (as discussed further on the next page of this circular) |
In 2020, stakeholder engagement was conducted by different leaders and groups across our company, including:
| · | Investor Relations |
| · | Our former and current CEO and CFO |
| · | Chair of the HR Committee, Chief People Officer and Head of Reward |
| · | Our Chief Legal Officer and Company Secretary |
On a day-to-day basis, inquiries or other communications from stakeholders to management are answered by our Investor Relations and other Corporate departments or are referred to another appropriate person in our company.
Our earnings conference calls are broadcast live via webcast and are accessible to interested stakeholders, the media and members of the public.
Presentations given by senior executives at investor conferences are promptly made public in the “Investor Relations” section of our website. Some of our non-management directors have attended our Investor Day meetings with major shareholders and analysts.
At the annual meeting, shareholders in attendance are provided with an opportunity to ask questions to our Board, CEO, CFO and other members of senior management in attendance.
Our company also has meetings throughout the year with shareholders and other stakeholders, shareholder advocacy groups and financial analysts. In 2020, we received a shareholder proposal in connection with last year’s annual meeting of shareholders. Even though the proposal did not receive significant support by our shareholders, we engaged with a representative of the shareholder proponent prior to the meeting to better understand and discuss their requests.
Shareholders and other stakeholders with questions about our company are encouraged to contact our Investor Relations department by e-mail at investor.relations@tr.com or by phone at 1.332.219.1046.
Shareholders and other interested parties may contact the Board or its non-management or independent directors as a group, or the directors who preside over their meetings, by e-mail at board@tr.com or by writing to them c/o Thomas Kim, Chief Legal Officer and Company Secretary, Thomson Reuters, 333 Bay Street, Suite 300, Toronto, Ontario, M5H 2R2, Canada.
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HIGHLIGHTS
| · | We manage our business for the long term and view programs that improve environmental, social and governance (ESG) through that lens |
| · | We consider ESG one important mechanism for sustained value creation, reinforcing the underlying health of our company now and beyond the horizon |
Our businesses are dedicated to serving institutions and businesses that keep the wheels of commerce turning, uphold justice systems, fight fraud, support law enforcement and report on world events with impartiality, no matter how dangerous or fraught. In these and many other ways, we aspire to strengthen the foundations of society in partnership with our customers.
We pursue ESG initiatives because they are the right things to do for our customers, employees, shareholders and other stakeholders. The Board and its committees oversee different ESG-related areas that are of the greatest importance to the organization and our stakeholders to achieve our long-term strategic objectives. Ultimately, though, our ESG goals require employees who take on responsibility for them and are empowered to achieve them. Subject matter experts lead the work, and senior executives are accountable for embedding programs in the business, for maximum impact and duration.
Thomson Reuters understands that ESG measures are important to our stakeholders and drive positive impact on global issues. Conducting business in a principled manner – and transparently disclosing relevant targets and metrics related to our ESG programs – will not only allow our stakeholders to be informed on our progress, but also encourage others to lead.
To that end, we post a Social Impact Report annually on our website, www.tr.com/social-impact-report, which summarizes our strategy, includes stories of progress and tracks performance, tying our efforts to our business strategy and commercial expertise. The report highlights how we manage our sustainability goals, foster an inclusive workplace, and make a difference in communities through wider-ranging social impact programs designed to drive access to justice and transparency. We encourage you to review the Social Impact Report to gain a better understanding of our accomplishments and practices in these areas.
We believe that by uniting our technical capabilities with those of our customers in those areas, we will drive the greatest change. And, we believe in the power of collaboration with the international business community, so we are signatories of the United Nations Global Compact, actively partnering to advance the Sustainable Development Goals, particularly SDG 16 – Peace, Justice and Strong Institutions.
In 2020, we announced our commitment to targeting net-zero emissions by 2050 and our decision to align to the 1.5 degree pathway, the most ambitious aim of the Science Based Targets Initiative. We will continue to measure and manage our own emissions and environmental impacts and continue to identify ways to further assess, monitor and improve our carbon footprint. We officially sourced renewable energy for 100% of our global energy needs in 2020 and are working closely with our suppliers to drive lower emissions within our supply chain.
We understand that systemic change starts within organizations, and Thomson Reuters has long recognized the need for businesses to shift from conversations about diversity and inclusion to action and leadership accountability. In 2020, a year that brought intense focus on this subject, we extended our global diversity and inclusion strategy and redoubled efforts to embed this work in all we do, including setting clear representation goals for the company at the leadership level (director and above).
As we strive for continued progress, we appreciate being recognized for our work in this space, but we are acutely aware of the need to increase momentum. In 2020, we scored 100% on the Human Rights Campaign’s Corporate Equality Index and were recognized as a Best Place to Work for LGBTQ Equity, ranked in the top 50 on Refinitiv’s Diversity and Inclusion Index, and were listed as one of America’s Best Employers for Diversity by Forbes, among an additional 16 workplace awards and recognitions.
In all our work, we uphold the Thomson Reuters Trust Principles – Integrity, Independence and Freedom from Bias.
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Advisory Resolution on Executive Compensation (Say On Pay)
HIGHLIGHTS
| · | We are proposing a non-binding advisory “say on pay” resolution related to executive compensation. |
| · | This is a recommended best practice of the Canadian Coalition for Good Governance (CCGG). |
| · | We plan to continue holding this advisory vote on an annual basis. |
Our overall philosophy regarding executive compensation is to pay for performance. We believe this drives our management team to achieve higher levels of results for the benefit of Thomson Reuters and our shareholders. In the “Compensation Discussion and Analysis” section of this circular, we explain our compensation principles, how we design our compensation program and why we pay each component of compensation.
As part of our dialogue with shareholders about our executive compensation programs, we are once again proposing a “say on pay” advisory resolution for this year’s meeting (as we have done since 2008). An identical resolution was approved by 96.5% of the votes cast at last year’s annual meeting of shareholders. Over the last five years, an average of approximately 97% of votes have been cast “for” our “say on pay” advisory resolutions.
As this is an advisory resolution, the results will not be binding upon the Board. However, the Board will take voting results into account, as appropriate, when considering future compensation policies, procedures and decisions and in determining whether there is a need to significantly increase its engagement with shareholders on compensation-related matters.
We will disclose the results of the shareholder advisory resolution as part of our report on voting results for the meeting.
Our “named executive officers” for purposes of the “Compensation Discussion and Analysis” section of this circular are our CEO (Steve Hasker), our CFO (Mike Eastwood), the three other most highly compensated executive officers as of December 31, 2020 (Michael Friedenberg – President, Reuters News; Brian Peccarelli – Chief Operating Officer, Customer Markets; and David Wong – Chief Product Officer), and our former CEO (Jim Smith) and CFO (Stephane Bello). As discussed in this circular, Jim Smith served as our CEO and Stephane Bello served as our CFO until March 15, 2020. Stephane Bello retired from our company on March 15, 2021 and Jim Smith plans to retire on July 12, 2021.
Shareholders with questions about our compensation programs are encouraged to contact our Investor Relations department by e-mail at investor.relations@tr.com or by phone at 1.332.219.1046.
The Board unanimously recommends that you vote FOR the following resolution:
“RESOLVED, on an advisory basis, and not to diminish the role and responsibilities of the Board of Directors, that the shareholders accept the approach to executive compensation as described in the 2021 management proxy circular.”
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Compensation Discussion and Analysis
“Pay for performance” is the foundation of our compensation philosophy for our named executive officers. Their compensation is primarily variable and performance-based, utilizing multiple and complementary financial measures that are aligned with our strategy to drive shareholder value. This section explains our compensation principles, how we design our compensation program, why we pay each component of compensation and how we performed and what we paid to our named executive officers in 2020. Our named executive officers include five current executive officers and our former CEO and CFO:
| Steve Hasker | President and Chief Executive Officer | |
| Mike Eastwood | Chief Financial Officer | |
| Brian Peccarelli | Chief Operating Officer, Customer Markets | |
| Michael Friedenberg | President, Reuters News | |
| David Wong | Chief Product Officer | |
| Jim Smith | Former President and Chief Executive Officer | |
| Stephane Bello | Former Chief Financial Officer |
2020 Performance Highlights
We began 2020 with momentum, having completed our first full year re-positioned into our customer-focused segments after completing the F&R transaction in 2018. In March 2020, however, the global COVID-19 pandemic created unprecedented health risks to our employees, customers and suppliers, and containment measures intended to mitigate the impact of the pandemic resulted in a global economic crisis and ongoing uncertainty.
In response to the pandemic, we immediately transitioned most of our staff to a virtual work environment. At the same time, we worked with our approximately 500,000 customers to ensure continued access to our products and services. To mitigate the expected reduction in our revenues due to the economic crisis, we implemented a cost savings program. Our 2020 performance reflected the resiliency of our markets and our business. We achieved 1% organic revenue growth, increased adjusted EBITDA by 32%, expanded adjusted EBITDA margin to 33%, and achieved free cash flow of $1.3 billion. Each of these metrics met or exceeded the updated outlook that we provided in November 2020 in conjunction with our third quarter report. Below are financial highlights of our results for the year ended December 31, 2020. Please see the “Management’s Discussion and Analysis” section of our 2020 annual report for additional information about our recent performance.
| Year ended December 31, | ||||||||||||||||
| Change | ||||||||||||||||
| (millions of U.S. dollars, except per share amounts and margins) | 2020 | 2019 | Total | Constant Currency |
||||||||||||
| IFRS Financial Measures |
||||||||||||||||
| Revenues |
5,984 | 5,906 | 1% | |||||||||||||
| Operating profit |
1,929 | 1,199 | 61% | |||||||||||||
| Diluted EPS |
$2.25 | $3.11 | (28%) | |||||||||||||
| Cash flow from operations |
1,745 | 702 | 148% | |||||||||||||
| Non-IFRS Financial Measures |
||||||||||||||||
| Revenues |
5,984 | 5,906 | 1% | 2% | ||||||||||||
| Organic revenue growth |
1% | |||||||||||||||
| Adjusted EBITDA |
1,975 | 1,493 | 32% | 32% | ||||||||||||
| Adjusted EBITDA margin |
33.0% | 25.3% | 770bp | 760bp | ||||||||||||
| Adjusted EPS |
$1.85 | $1.29 | 43% | 43% | ||||||||||||
| Free cash flow |
1,330 | 159 | 735% | |||||||||||||
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Supplemental financial results – “Big 3” Segments—Legal Professionals, Corporates and Tax & Accounting Professionals Combined
| Year ended December 31, | ||||||||||||||||
| Change | ||||||||||||||||
| (millions of U.S. dollars, except margins) | 2020 | 2019 | Total | Constant Currency |
||||||||||||
| Non-IFRS Financial Measures |
||||||||||||||||
| Revenues |
4,738 | 4,584 | 3% | 4% | ||||||||||||
| Organic revenue growth |
4% | |||||||||||||||
| Adjusted EBITDA |
1,791 | 1,625 | 10% | 10% | ||||||||||||
| Adjusted EBITDA margin |
37.8% | 35.4% | 240bp | 210bp | ||||||||||||
We met or exceeded each of the performance metrics in our updated 2020 full-year business outlook communicated on November 3, 2020. Our full-year 2020 outlook assumed constant currency rates relative to 2019 and included the impact of closed acquisitions and dispositions. Some of the financial measures in the tables above as well as the outlook below are provided on a non-IFRS basis. Refer to Appendices A and B of the “Management’s Discussion and Analysis” section of our 2020 annual report for additional information and reconciliations of our non-IFRS financial measures to the most directly comparable IFRS financial measures.
The table below compares our actual performance (before currency) to the outlook:
| 2020 Full-Year Outlook |
| |||||||
|
Total Thomson Reuters Outlook |
| |||||||
| 2020 Outlook | 2020 Actual Performance |
| ||||||
| Before currency and included the impact of closed acquisitions/dispositions | Before currency(1) | |||||||
| Revenue Growth Organic revenue growth |
1.0% - 2.0% 0% - 1.0% |
2.1% 1.2% |
|
✓ ✓ |
| |||
| Adjusted EBITDA margin |
Approximately 32.0% | 32.9% | ✓ | |||||
| Corporate costs |
$140 million - $150 million | $125 million | ✓ | |||||
| Free cash flow |
Approximately $1.1 billion | $1.3 billion | ✓ | |||||
| Capital expenditures, as a percentage of revenues |
8.0% - 8.5% | 8.4% | ✓ | |||||
| Depreciation and amortization of computer software |
$650 million - $675 million | $672 million | ✓ | |||||
| Interest expense |
$190 million - $215 million | $195 million | ✓ | |||||
| Effective tax rate on adjusted earnings |
Approximately 17% - 19% | 16.9% | ✓ | |||||
|
“Big 3” Segments Outlook |
| |||||||
| 2020 Outlook | 2020 Actual Performance |
| ||||||
| Before currency and included the impact of closed acquisitions/dispositions | Before currency(1) | |||||||
| Revenue Growth Organic revenue growth |
3.0% - 4.0% 3.0% - 4.0% |
4.2% 3.8% |
|
✓ ✓ |
| |||
| Adjusted EBITDA margin |
37.0% - 38.0% | 37.5% | ✓ | |||||
(1) Our 2020 performance (before currency) was measured in constant currency rates relative to 2019, except for the 2020 free cash flow performance which was reflected at actual rates.
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We believe that our compensation program is strongly connected to our ability to achieve success for Thomson Reuters.
| ✓ | 2020 compensation decisions were aligned with our strategic objectives – During 2020, the HR Committee was actively engaged in reviewing and discussing the design and approach to our compensation, talent and culture programs to fit the Thomson Reuters of the future. |