DEF 14A
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934 (Amendment No.     )

Filed by the Registrant                                Filed by a party other than the Registrant  

Check the appropriate box:

 

 

Preliminary Proxy Statement

 

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

 

Definitive Proxy Statement

 

Definitive Additional Materials

 

Soliciting Material under §240.14a-12

 

LOGO

(Name of registrant as specified in its charter)

(Name of person(s) filing proxy statement, if other than the registrant)

Payment of Filing Fee (Check the appropriate box):

 

No fee required.

 

Fee paid previously with preliminary materials.

 

Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.

 

 

 


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LOGO


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LOGO

Marriott Vacations Worldwide Corporation

9002 San Marco Court

Orlando, Florida 32819

March 31, 2022

Dear Marriott Vacations Worldwide Stockholders:

It is my pleasure to inform you that the 2022 Annual Meeting of Stockholders of Marriott Vacations Worldwide Corporation (the “Annual Meeting”) will be conducted online on Friday, May 13, 2022 beginning at 12:00 noon, Eastern Daylight Time. Stockholders of record may attend and vote during the Annual Meeting via the Internet at www.virtualshareholdermeeting.com/VAC2022. You may also attend the meeting by proxy. You may submit questions in advance of the meeting at

www.proxyvote.com. Beneficial owners should review their voting instruction form or Notice of Internet Availability for how to vote in advance and participate in the Annual Meeting online. For further information about the virtual Annual Meeting, please see the Questions and Answers About the Meeting beginning on page 4.

The following Notice of Annual Meeting of Stockholders and Proxy Statement includes information about the matters to be acted upon by stockholders at the Annual Meeting. We hope that you will exercise your right to vote as promptly as possible. You may vote through the Internet, by telephone or by mailing your completed proxy card (or voting instruction form, if you hold your shares through a broker).

 

 

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
FOR THE 2022 ANNUAL MEETING OF STOCKHOLDERS:

 

We are mailing many of our stockholders a Notice Regarding the Availability of Proxy Materials (the “Notice”) rather than a full set of our proxy materials. The Notice contains instructions on how to access our proxy materials on the Internet, as well as instructions on how to obtain a paper copy of the full set of proxy materials if a stockholder so desires. This process is more environmentally friendly and reduces our costs to print and distribute these materials to stockholders. All stockholders of record who do not receive the Notice will receive a full set of our proxy materials.

We appreciate your continued support and interest in Marriott Vacations Worldwide.

 

Sincerely,
LOGO
William J. Shaw
Chairman of the Board
LOGO
Stephen P. Weisz
Chief Executive Officer


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LOGO

Marriott Vacations Worldwide Corporation

9002 San Marco Court

Orlando, Florida 32819

 

 

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD FRIDAY, MAY 13, 2022

 

March 31, 2022

The 2022 Annual Meeting of Stockholders (the “Annual Meeting”) of Marriott Vacations Worldwide Corporation (the “Company”) will be held at 12:00 noon, Eastern Daylight Time, on Friday, May 13, 2022 virtually, via the Internet at www.virtualshareholdermeeting.com/VAC2022. At the meeting, stockholders will act on the following matters:

 

  1.

Election of the three director nominees named in the Proxy Statement;

 

  2.

Ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for its 2022 fiscal year;

 

  3.

Advisory vote to approve named executive officer compensation; and

 

  4.

Any other matters that may properly be presented at the meeting.

Only stockholders of the Company at the close of business on March 14, 2022, the record date, are entitled to notice of, and to vote at, the Annual Meeting. For instructions on voting, please refer to the notice you received in the mail or, if you requested a hard copy of the Proxy Statement, your enclosed proxy card.

In the event of a technical malfunction in connection with the virtual Annual Meeting, the chair of the meeting will convene the meeting at 12:30 p.m. Eastern Daylight Time on the date specified above and at the JW Marriott Desert Springs Resort & Spa, 74-855 Country Club Drive, Palm Desert, CA 92260 solely for the purpose of adjourning the meeting to reconvene at a date, time and physical or virtual location announced by the meeting chair. Under these circumstances, we will post information regarding the announcement on the investors page of the Company’s website at ir.marriottvacationsworldwide.com.

Internet Availability

We are taking advantage of the U.S. Securities and Exchange Commission rules that allow companies to furnish proxy materials to their stockholders through the Internet. We believe these rules allow us to provide you with the information you need while lowering the costs of delivery and reducing the environmental impact of the Annual Meeting. On or about March 31, 2022, a Notice Regarding the Availability of Proxy Materials (the “Notice”) or the proxy statement and form of proxy will be mailed to stockholders as of the record date. If you received a Notice by mail, you will not receive printed copies of the proxy materials, unless you specifically request them. Instead, the Notice instructs you on how to access and review all of the important information contained in the Proxy Statement and in our 2021 Annual Report, as well as how to submit your proxy over the Internet. If you received the Notice and would still like to receive a printed copy of our proxy materials, you may request a printed copy of the proxy materials by following the instructions in the Notice.

 

  By Order of the Board of Directors,
  LOGO
  James H Hunter, IV
  Executive Vice President,
  General Counsel and Secretary


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TABLE OF CONTENTS

 

 

  1       Proxy Summary
  4       Questions and Answers About the Meeting
  7       Proposals for Vote
    7     Item 1 – Election of Directors
    7     Item 2 – Ratification of Appointment of
Independent Registered Public Accounting Firm
    8     Item 3 – Advisory Vote to Approve Named
Executive Officer Compensation
  9       Report on the Board of Directors and its Committees
    9     Our Board of Directors
    9     Nominees for Director
    11     Directors Remaining in Office
    15     Summary of Director Attributes and Skills
    16     2021 Board and Committee Meetings and Attendance
    16     Committees of the Board of Directors
    17     Compensation Committee Interlocks and Insider Participation
  18       Corporate Governance
    18     Separation of Board Chairman and Chief Executive Officer
    18     Director Independence
    19     Risk Oversight
    20     Communications with the Board
    20     Code of Conduct
  21       Audit Committee Report and Independent Auditor Fees
    21     Report of the Audit Committee
    22     Pre-Approval of Independent Auditor Fees
and Services Policy
    22     Independent Registered Public Accounting
Firm Fee Disclosure
  23       Executive and Director Compensation
    23     Compensation Discussion and Analysis
    35     Report of the Compensation Policy Committee
    36     Executive Compensation Tables and Discussion
    44     CEO Pay Ratio
    44     Compensation Arrangements for
Non-Employee Directors
    46     Securities Authorized for Issuance under
Equity Compensation Plans
  47       Stock Ownership
    47     Stock Ownership of our Directors, Executive
Officers and Certain Beneficial Owners
  49       Transactions with Related Persons
    49     Policy on Transactions and Arrangements
with Related Persons
    50     Certain Relationships and Potential
Conflicts of Interest
  51      
Stockholder Proposals and Nominations for
Directors for the 2023 Annual Meeting
  51       Other Information
  A-1      
Appendix A – Reconciliation of Non-GAAP
Measures to GAAP Measures (Unaudited)
 

 

Forward-Looking Statements and Website References

This document includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical or current fact, including statements regarding our environmental and other sustainability plans and goals, made in this document, are forward-looking. We use words such as anticipates, believes, expects, future, intends, and similar expressions to identify forward-looking statements. Forward-looking statements reflect management’s current expectations and are inherently uncertain. Actual results could differ materially for a variety of reasons. Risks and uncertainties that could cause our actual results to differ significantly from management’s expectations are described in our 2021 Annual Report on Form 10-K. Website references throughout this document are provided for convenience only, and the content on the referenced websites is not incorporated by reference into this document.


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PROXY SUMMARY

 

This summary highlights information contained elsewhere in this Proxy Statement. It does not contain all of the information that you should consider in voting your shares. You should read the entire Proxy Statement as well as our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 carefully before voting.

VOTING MATTERS AND BOARD RECOMMENDATIONS

 

Proposal    Voting Recommendation    Page Reference

1 Election of three directors

   FOR each nominee    7

2 Ratification of appointment of independent registered public accounting firm

   FOR    7

3 Advisory vote to approve named executive officer compensation

   FOR    8

CORPORATE GOVERNANCE HIGHLIGHTS

We believe that good corporate governance is integral to our business, and the Board monitors developments in governance best practices to assure that it continues to meet its commitment to representation of stockholder interests. Below are some highlights of our corporate governance practices:

 

 

    Independent Chairman of the Board

 

    Separate Chairman and Chief Executive Officer (“CEO”) positions

 

    Standing committees composed exclusively of independent directors

 

    Regular executive sessions of the Board and Board committees

 

    Annual Board and committee evaluations

 

    Global ethics and corporate compliance program

 

    Board and committee oversight of Environmental, Social and Governance (“ESG”) matters
    Commitment to seeking diversity on the Board

 

    Stock ownership guidelines for our Executive Officers and Board

 

    Robust executive succession planning process

 

    Strong risk management program

 

    Comprehensive Code of Business Conduct and Corporate Governance Principles

 

    Active Board oversight of Company strategy and risk management
 

ENVIRONMENTAL, SOCIAL AND GOVERNANCE PRACTICES

We aspire to operate in a manner that advances strong ESG practices and to increase disclosure of our activities and progress accordingly. During 2021, we made progress in establishing our ESG program, building on our well-established Corporate Social Responsibility activities that include inclusion and diversity efforts, customer and community engagement, and associate recruitment and development. In December 2021, we published our Task Force on Climate-related Financial Disclosure (“TCFD”) report and also published our Sustainability Accounting Standards Board (“SASB”) tables. The TCFD report and SASB tables are available on our website at www.marriottvacationsworldwide.com. In 2022, we intend to publish our first full Sustainability Report.

STOCKHOLDER ENGAGEMENT

We value our stockholders’ perspective on our business and each year regularly engage with stockholders through a variety of engagement activities to stay informed on the evolving perspectives of the investor community. We engage with stockholders on various matters, including industry trends, company performance, corporate governance, and executive compensation. In 2021, our key stockholder engagement activities were primarily conducted virtually due to health and safety concerns arising from the ongoing COVID-19 pandemic, and included seven non-deal investor road shows, 11 investor conferences and our 2021 annual meeting of stockholders.

 

MARRIOTT VACATIONS WORLDWIDE 2022 PROXY STATEMENT   Proxy Summary   1


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SELECT PERFORMANCE AND BUSINESS HIGHLIGHTS

 

 

Consolidated Vacation Ownership contract sales totaled nearly $1.4 billion for full year 2021.

 

 

Net income attributable to common shareholders was $49 million, or $1.13 per fully diluted earnings per share.

 

 

Adjusted net income attributable to common shareholders was $190 million and adjusted fully diluted earnings per share was $4.40.

 

 

Adjusted EBITDA totaled $657 million for the full year 2021.

 

 

The Company ended 2021 with approximately $1.1 billion of liquidity, including $342 million in cash and cash equivalents.

 

 

The Company generated net cash provided by operating activities of $343 million and Adjusted free cash flow of $417 million.

 

 

Adjusted net income attributable to common shareholders, Adjusted fully diluted earnings per share, Adjusted EBITDA and Adjusted free cash flow are financial measures that are not prescribed by United States generally accepted accounting principles (“U.S. GAAP”). Please refer to Appendix A for a reconciliation of these non-GAAP financial measures to the most directly comparable financial measures prescribed by U.S. GAAP, as well as our reasons for presenting these measures.

EXECUTIVE COMPENSATION HIGHLIGHTS

We seek to align the interests of our named executive officers (“NEOs”) with the interests of the Company’s stockholders. Certain important features of our executive compensation program include:

 

 

The program is designed to align financial results and sustainable stockholder value creation with the compensation of our executives.

 

 

Pay is tied to performance. Approximately 53% of our CEO’s and approximately 49% of the other NEOs’ fiscal 2021 total compensation was performance based.

 

   

Approximately 68% of our CEO’s and approximately 52% of the other NEOs’ fiscal 2021 total compensation is tied to stock performance.

 

2021 Target Pay Matrix — CEO

 

 

LOGO

 

  

2021 Target Pay Matrix — Other NEOs (Average)

 

 

LOGO

 

 

 

The Company maintains stock ownership guidelines that apply to all executive officers and directors.

 

 

The Company has strong governance policies related to executive compensation, and we employ appropriate compensation risk mitigating features.

 

2   Proxy Summary   2022 PROXY STATEMENT MARRIOTT VACATIONS WORLDWIDE


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DIRECTOR NOMINEES

As of the date of our Annual Meeting, our Board will consist of ten members divided into three classes. Each class serves a three-year term. The following table provides summary information regarding each nominee to the Board. Information about each director’s experience, qualifications and skills can be found in Report on the Board of Directors and its Committees.

       

DIRECTOR

SINCE

  PRINCIPAL OCCUPATION  

INDE-

PENDENT

  COMMITTEE MEMBERSHIPS1   OTHER PUBLIC CO. BOARDS
NAME   AGE   AC   CPC   NCG

Raymond L. Gellein, Jr.

  74   2011   Retired, Chairman, CEO and President, Strategic Hotels & Resorts, Inc.             None

Dianna F. Morgan

  70   2018   Retired Senior Vice President, Public Affairs and Human Relations, Walt Disney World Company             Chesapeake Utilities Corporation, Hersha Hospitality Trust

Jonice Gray Tucker

  47   2021   Partner, Buckley LLP                 None

 

1

Audit Committee (“AC”), Compensation Policy Committee (“CPC”), Nominating and Corporate Governance Committee (“NCG”).

 

MARRIOTT VACATIONS WORLDWIDE 2022 PROXY STATEMENT   Proxy Summary   3


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PROXY STATEMENT

The Board of Directors (the “Board”) of Marriott Vacations Worldwide Corporation (“we,” “us,” “Marriott Vacations Worldwide” or the “Company”) is soliciting stockholders’ proxies in connection with the 2022 Annual Meeting of Stockholders of the Company, and at any adjournment or postponement thereof (the “Annual Meeting”). The mailing to stockholders of the Notice Regarding the Availability of Proxy Materials (the “Notice”) will take place on or about March 31, 2022.

 

 

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE

ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 13, 2022

 

The Notice of Annual Meeting and Proxy Statement and our

2021 annual report to stockholders are available at www.proxyvote.com.

 

 

QUESTIONS AND ANSWERS
ABOUT THE MEETING

 

 

Q.

Why am I receiving these materials?

Marriott Vacations Worldwide has made these materials available to you on the Internet or has delivered printed versions of these materials to you by mail in connection with the solicitation of proxies on behalf of the Board of Directors for use at our Annual Meeting. This Proxy Statement describes the matters on which you, as a stockholder, are entitled to vote. It also gives you information on these matters so that you can make an informed decision.

 

Q.

How do I attend the virtual Annual Meeting?

You may attend the Annual Meeting online, including to vote, by logging in at www.virtualshareholdermeeting.com/VAC2022. The Annual Meeting will begin at approximately 12:00 noon, Eastern Daylight Time, with log-in beginning at 11:45 a.m. on Friday, May 13, 2022.

You may attend and vote during the Annual Meeting via the Internet at www.virtualshareholdermeeting.com/VAC2022. You may also attend the meeting by proxy. You may submit questions in advance of the meeting at www.proxyvote.com.

 

Q.

How do I gain admission to the virtual Annual Meeting?

You are entitled to participate in the virtual Annual Meeting only if you were a stockholder of record who owned the Company’s common stock at the close of business on March 14, 2022. Each holder of record is entitled to one vote per share. There were 41,978,486 shares of common stock outstanding and entitled to vote on March 14, 2022.

To attend online and participate in the Annual Meeting, stockholders of record will need to use their control number on their Notice or proxy card to log into www.virtualshareholdermeeting.com/VAC2022; beneficial owners who do not have a control number may gain access to the meeting by logging into their brokerage firm’s website and selecting the stockholder communications mailbox to link through to the virtual Annual Meeting. Instructions should also be provided on the voting instruction card provided by their broker, bank, or other nominee.

We encourage you to access the meeting prior to the start time. Please allow time for online check-in, which will begin at 11:45 a.m. Eastern Daylight Time. If you encounter any difficulties accessing the Annual Meeting during the check-in or meeting time, please call the technical support number that will be posted on the virtual Annual Meeting landing page at www.virtualshareholdermeeting.com/VAC2022.

 

Q.

How do I ask questions?

You may submit a question in advance of the meeting at www.proxyvote.com. The Company will try to answer as many questions as possible during the time scheduled. Answers to appropriate investor questions received before the Annual Meeting will be posted on the Investor Relations page of the Company’s website as soon as practicable after the Annual Meeting to the extent such questions were not answered at the Annual Meeting. Additional information regarding the question and answer process, including the types of questions permitted, the time allotted for the question and answer session, and how questions will be address and disclosed, will be available in the Annual Meeting Rules of Conduct, which will be posted at the virtual Annual Meeting website during the Annual Meeting.

 

4   Questions and Answers about the Meeting   2022 PROXY STATEMENT MARRIOTT VACATIONS WORLDWIDE


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Q.

Why did I receive a one-page notice in the mail regarding the Internet availability of proxy materials instead of printed proxy materials?

The U.S. Securities and Exchange Commission (the “SEC”) permits companies to furnish proxy materials to stockholders by providing access to these documents over the Internet instead of mailing a printed copy. Accordingly, we mailed a Notice to stockholders who elected to receive proxy materials by email. These stockholders have the ability to access, view and print the proxy materials on a website referred to in the Notice and request a printed set of proxy materials.

 

Q.

Can I get electronic access to the proxy materials if I received printed materials?

If you received a printed copy of our proxy materials, you may choose to receive future proxy materials by email. Choosing to receive your future proxy materials by email will lower our costs of delivery and reduce the environmental impact of our Annual Meeting. If you choose to receive our future proxy materials by email, you will receive an email next year with instructions containing a link to view those proxy materials and a link to the proxy voting site. Your election to receive proxy materials by email will remain in effect until you terminate it or for so long as the email address provided by you is valid.

 

Q.

What items will be voted on at the Annual Meeting?

Stockholders will vote on the following items at the Annual Meeting, if each is properly presented at the meeting:

 

  1.

Election of the three director nominees named in this Proxy Statement;

 

  2.

Ratification of the appointment of Ernst & Young LLP (“Ernst & Young”) as the Company’s independent registered public accounting firm for its 2022 fiscal year;

 

  3.

Advisory vote to approve named executive officer compensation; and

 

  4.

Any other matters that may properly be presented at the meeting.

In addition, management will respond to questions from stockholders submitted in advance of the meeting.

 

Q.

What are the Board’s voting recommendations?

The Board’s recommendation is set forth together with the description of each Item in this Proxy Statement. The Board recommends a vote FOR each nominee for director in Item 1, and FOR Items 2 and 3.

 

Q.

What is the difference between being a record holder and a beneficial owner of shares held in street name?

A record holder holds shares directly in his or her own name with the Company’s transfer agent. Shares held in “street name” refer to shares that are held in the name of a bank or broker on a person’s behalf. Many stockholders hold their shares in street name. For such shares, the bank or broker is considered the record holder for purposes of voting at the Annual Meeting. As a beneficial owner, you have the right to direct that organization how to vote the shares held in your account.

 

Q.

How do I vote?

 

LOGO

 

 

BY TELEPHONE

800-690-6903

(record holders)

 

   LOGO

 

 

BY INTERNET

www.proxyvote.com

 

   LOGO

 

 

BY MAIL

completing and returning your proxy card

     LOGO  

AT THE VIRTUAL MEETING

by electronic vote at the virtual meeting

Whether you are a stockholder of record or a beneficial stockholder, you may direct how your shares are voted without participating in the Annual Meeting. We encourage stockholders to vote well before the Annual Meeting even if they plan to attend the virtual meeting, by completing proxies online or by telephone, or, if they received printed copies of materials, by mailing their proxy cards. Stockholders can vote via the Internet in advance or during the Annual Meeting.

Stockholders who attend the virtual Annual Meeting should follow the instructions at www.virtualshareholdermeeting.com/VAC2022 to vote during the meeting. Voting online during the meeting will replace any previous votes.

Record holders who received a copy of this Proxy Statement and accompanying proxy card in the mail can vote by filling out the proxy card, signing it and returning it in the postage paid return envelope. Record holders can also vote by telephone (800-690-6903) or by Internet (www.proxyvote.com). Voting instructions are provided on the proxy card.

If you are a beneficial owner, you must vote by giving instructions to your bank or broker. You should follow the voting instructions on the form that you receive from your bank or broker.

 

MARRIOTT VACATIONS WORLDWIDE 2022 PROXY STATEMENT   Questions and Answers about the Meeting   5


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Q.

How will my proxy be voted?

Your proxy card, when properly signed and returned to us, or processed by telephone or via the Internet, and not revoked, will be voted in accordance with your instructions. We are not aware of any other matter that may be properly presented other than those described above. If any other matter is properly presented, the persons named in the enclosed proxy card will have discretion to vote in their best judgment.

If you are a beneficial owner, your bank or broker is permitted to use its own discretion and vote your shares on certain routine matters (such as Item 2) even if you have not provided voting instructions. Your bank or broker is not permitted to use its discretion and vote your shares on non-routine matters (such as Items 1 and 3) if it has not received instructions from you as to how to vote the shares. Therefore, we urge you to give voting instructions to your broker on all three voting items. Shares that are not permitted to be voted by your broker with respect to any non-routine matter are called “broker non-votes.” Broker non-votes are not considered votes for or against, or entitled to vote with respect to, any of the non-routine proposals to be voted on at the Annual Meeting and will have no direct impact on the outcome of any such non-routine proposal.

 

Q.

What if I don’t mark the boxes on my proxy?

Unless you give other instructions on your proxy card, or unless you give other instructions when you cast your vote by telephone or the Internet, the persons named as proxies will vote in accordance with the recommendations of the Board of Directors.

 

Q.

What constitutes a quorum?

The presence at the meeting, online or by proxy, of the holders of a majority in voting power of the issued and outstanding shares of common stock entitled to vote at the Annual Meeting will constitute a quorum. Proxies received will be included in the calculation of the number of shares considered to be present at the meeting, even if marked as broker non-votes or with abstentions on certain items.

 

Q.

How many votes are needed to approve an item?

Directors will be elected by a plurality of all the votes cast at the Annual Meeting, either online or represented by a properly completed or authorized proxy. This means that the three nominees who receive the highest number of “FOR” votes cast will be elected as directors. Stockholders cannot cumulate votes in the election of directors.

The affirmative vote of holders of shares representing a majority in voting power of the votes cast, present online or represented by proxy and entitled to vote at the meeting, is necessary for approval of Items 2 and 3. Proxy cards marked as abstentions on Items 2 and 3 will not be counted as votes cast but will count as present and entitled to vote and therefore will have the effect of a negative vote.

Broker non-votes will not be counted as entitled to vote for Items 1 or 3 and therefore will have no effect on the outcome of these Items. Item 2 is a routine matter on which brokers may vote even if they have not received voting instructions; therefore, there will not be any broker non-votes with respect to Item 2.

 

Q.

Who can attend the Annual Meeting?

Only stockholders as of the record date, their proxy holders and our invited guests may attend the Annual Meeting.

 

Q.

Can I attend and participate in the Annual Meeting online if I vote by proxy?

Yes. Attending the Annual Meeting online does not revoke your proxy.

 

Q.

Can I change my vote or revoke my proxy after I return my proxy card, or after I vote by telephone or electronically?

Yes. Even after you have submitted your proxy, you may change your vote at any time before the proxy is exercised at the Annual Meeting. Regardless of the way in which you submitted your original proxy, you may change it by:

 

 

returning a later-dated signed proxy card;

 

 

delivering a written notice of revocation to Marriott Vacations Worldwide Corporation, 9002 San Marco Court, Orlando, Florida, 32819, Attention: Corporate Secretary;

 

 

voting by telephone or the Internet at www.proxyvote.com until 11:59 p.m., Eastern Daylight Time, on May 12, 2022; or

 

 

submitting a later-dated vote during the virtual Annual Meeting (www.virtualshareholdermeeting.com/VAC2022).

If your shares are held through a broker or other nominee, and you are not provided a 16-digit control number, you will need to contact that institution if you wish to change your voting instructions.

 

6   Questions and Answers about the Meeting   2022 PROXY STATEMENT MARRIOTT VACATIONS WORLDWIDE


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PROPOSALS FOR VOTE

 

ITEM 1 – ELECTION OF DIRECTORS

The Board currently consists of eleven members and is divided into three classes, each having three-year terms that expire in successive years. The current Class I directors include Thomas Hutchison, Raymond L. Gellein, Jr., Dianna F. Morgan and Jonice Gray Tucker, and the term of the Class I directors expires at the Annual Meeting. The Board proposes that Raymond L. Gellein, Jr., Dianna F. Morgan and Jonice Gray Tucker be elected as Class I directors for a term of three years expiring at the 2025 Annual Meeting and until their successors are duly elected and qualified. Stockholders last elected Mr. Gellein and Ms. Morgan as Class I directors at the 2019 Annual Meeting. The Board appointed Ms. Tucker as a director in November 2021, and simultaneously increased the size of the Board to 11. The Board does not intend to fill the vacancy created by the expiration of Mr. Hutchison’s term; instead, the number of directors will be reduced to 10 effective as of the 2022 Annual Meeting. Proxies cannot be voted for more than the number of nominees proposed for re-election.

Each of the nominees has consented to be named as a nominee and to serve as a director if elected. If any of them should become unavailable to serve as a director, the Board may designate a substitute nominee. In that case, the persons named as proxies will vote for the substitute nominee designated by the Board.

Information about the nominees, as well as the current Class II and Class III directors, is set forth below in the section titled “Report on the Board of Directors and its Committees” beginning on page 9.

 

     

 

Our Board of Directors recommends that you vote FOR each of the three director nominees.

 

ITEM 2 – RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee of the Board (the “Audit Committee”) has appointed Ernst & Young as the Company’s independent registered public accounting firm for the Company’s 2022 fiscal year. Although the Audit Committee has discretionary authority to appoint the independent auditor, the Board is seeking stockholder ratification of the appointment as a matter of good corporate governance. The Board and the Audit Committee believe that the continued retention of Ernst & Young as the Company’s independent auditor is in the best interests of the Company and its stockholders. If the appointment of Ernst & Young is not ratified by stockholders, the Audit Committee will take that into consideration when determining whether to continue the firm’s engagement. Even if the appointment is ratified, the Audit Committee at its discretion may direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company.

Representatives of Ernst & Young are expected to be present at the Annual Meeting online, will have an opportunity to make a statement if they so desire, and are expected to be available to respond to appropriate questions.

 

     

 

Our Board of Directors recommends that you vote FOR ratification of the appointment of Ernst & Young as the Company’s independent registered public accounting firm for its 2022 fiscal year.

 

 

MARRIOTT VACATIONS WORLDWIDE 2022 PROXY STATEMENT   Proposals for Vote   7


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ITEM 3 – ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION

We are asking stockholders to approve an advisory resolution on the Company’s named executive officer compensation as reported in this Proxy Statement. As described below in “Compensation Discussion and Analysis” beginning on page 23, the Compensation Policy Committee has structured our executive compensation program to achieve the following key objectives:

 

 

Executive officers should be paid in a manner that is primarily focused on driving stockholder value;

 

 

Compensation should be designed to motivate executive officers to perform their duties in ways that would help achieve shorter-term as well as longer-term objectives; and

 

 

The compensation program must be competitive in order to attract key talent from within and outside of our industry and retain key talent at costs consistent with market practice.

We urge stockholders to read the “Compensation Discussion and Analysis” of this Proxy Statement, which describes in more detail how our executive compensation policies and procedures operate and are designed to achieve our compensation objectives, as well as the Summary Compensation Table and other related compensation tables and narrative, which provide detailed information about the compensation of our named executive officers (“NEOs”). The Compensation Policy Committee and the Board of Directors believe that the policies and procedures articulated in “Compensation Discussion and Analysis” below are effective in achieving our goals and that the compensation of our NEOs reported in this Proxy Statement reflects and supports these compensation policies and procedures.

In accordance with Section 14A of the Exchange Act, and as a matter of good corporate governance, we are asking stockholders to approve the following advisory resolution at the Annual Meeting:

RESOLVED, that the stockholders of Marriott Vacations Worldwide Corporation (the “Company”) approve, on an advisory basis, the compensation of the Company’s named executive officers disclosed in the Compensation Discussion and Analysis, the Summary Compensation Table and the related compensation tables, notes and narrative in the Proxy Statement for the Company’s 2022 Annual Meeting of Stockholders.

This advisory resolution, commonly referred to as a “say-on-pay” resolution, is not binding on the Board of Directors. Although non-binding, the Board and the Compensation Policy Committee will review and consider the voting results when making future decisions regarding our executive compensation program. The Board’s current policy is to hold an advisory vote on executive compensation on an annual basis, and therefore our next “say-on-pay” resolution will occur at the Company’s 2023 Annual Meeting of Stockholders.

 

     

 

Our Board of Directors recommends that you vote FOR the approval of the advisory resolution to approve executive compensation.

 

 

8   Proposals for Vote   2022 PROXY STATEMENT MARRIOTT VACATIONS WORLDWIDE


Table of Contents

REPORT ON THE BOARD OF DIRECTORS AND ITS COMMITTEES

 

OUR BOARD OF DIRECTORS

Our Board currently consists of eleven members. The Board does not intend to fill the vacancy created by the expiration of Mr. Hutchison’s term; instead, the number of directors will be reduced to ten effective as of the 2022 Annual Meeting.

Approximately one-third of the directors are elected annually to serve for three-year periods or until their respective successors are duly elected and qualified, or his or her earlier death, resignation or removal. All of our director nominees currently serve as directors on our Board.

The tables below set forth information regarding the members of our Board continuing in office or nominated for re-election. Our Board has determined that all members of our Board are “independent directors” meeting the applicable requirements of the Listing Rules of NYSE other than Stephen P. Weisz, our Chief Executive Officer.

Nominees for Director

The Board has nominated three directors to be elected at the Annual Meeting to serve for a three-year term ending with the 2025 Annual Meeting of Stockholders, or until the director’s successor is duly elected and qualified, or his or her earlier death, resignation or removal.

 

RAYMOND L. GELLEIN, JR.

Age: 74

Director Since: 2011

  

Committees:

  Audit

  Compensation Policy

Experience

From November 2012 until his retirement in December 2015, Mr. Gellein served as Chairman of the Board, Chief Executive Officer and President of Strategic Hotels & Resorts, Inc., a publicly traded real estate investment trust (“REIT”) with a portfolio of luxury hotels. From August 2010 to November 2012, he served as Strategic Hotels & Resorts’ non-executive Chairman, and from August 2009 to December 2015, as a director. He served as President of the Global Development Group of Starwood Hotels & Resorts Worldwide, Inc. (“Starwood”), a publicly traded hotel and leisure company, from July 2006 through March 2008, and as Chairman and Chief Executive Officer of Starwood Vacation Ownership, Inc., a subsidiary of Starwood, from October 1999 to July 2006. Mr. Gellein is also a past Chairman of the American Resort Development Association, and previously served as Vice Chairman of Mind and Life Institute.

Skills and Experience

Based on his past roles with Strategic Hotels & Resorts and Starwood, Mr. Gellein brings to the Board vast leadership experience in the hospitality and lodging industries with particular expertise in the vacation ownership sector. As a result of these roles, Mr. Gellein also has experience as an executive officer and board member of publicly traded companies. As a past Chairman of the Board of Directors of the American Resort Development Association, he also has extensive knowledge of the legislative and regulatory issues related to the vacation ownership business.

 

 

   LOGO

 

Corporate

Leadership

  LOGO   Independence   LOGO   Financial & Capital Markets   LOGO   Business Development / Mergers & Acquisitions     LOGO    

Public Company Board

Service & Governance

 

LOGO

 

Risk

Management

  LOGO   Strategic Planning   LOGO   Global Expertise  

 

LOGO

  Vacation Ownership & Lodging Industry     LOGO    

 

Legal, Regulatory & Government Relations

 

LOGO

  Sales & Marketing/
Consumer Insights
  LOGO   Real Estate & Business Development  

 

 

LOGO

 

 

Human Capital, Professional

Development & Organizational Culture

   

 

MARRIOTT VACATIONS WORLDWIDE 2022 PROXY STATEMENT   Report on the Board of Directors and its Committees   9


Table of Contents
DIANNA F. MORGAN

Age: 70

Director Since: 2013

  

Committees:

  Compensation Policy (Chair)

  Nominating and Corporate Governance

Experience

Ms. Morgan retired in 2001 from a 30-year career with Walt Disney World Company, a subsidiary of The Walt Disney Company, a publicly traded entertainment company, where she served most recently as Senior Vice President of Public Affairs and Senior Vice President of Human Resources. During her tenure at Walt Disney World Company, she oversaw the Disney Institute, a recognized leader in experiential training, leadership development, benchmarking and cultural change for business professionals around the world. Ms. Morgan currently serves on the Board of Directors of Chesapeake Utilities Corporation, a publicly traded corporation, and the Board of Trustees of Hersha Hospitality Trust, a publicly traded REIT. Within the last five years, she served on the Board of Directors of CNL Health Care Properties II, a publicly traded REIT.

Skills and Experience

As an accomplished senior manager at Walt Disney World Company in various areas, Ms. Morgan brings to the Board best practice expertise in human capital and the customer experience. Ms. Morgan’s previous experience overseeing the Disney Institute, which provides leading professional development programs, and serving as Senior Vice President of Human Resources for Walt Disney World Company have provided her with extensive knowledge of leadership development programs and organizational culture. In addition, Ms. Morgan’s experience as Senior Vice President of Public Affairs for Walt Disney World Company has provided her with a solid foundation in media relations and government relations. She also has extensive experience as a board member of publicly traded and private companies.

 

 

   LOGO

  Corporate
Leadership
  LOGO     

Independence

  LOGO  

Diversity

    LOGO    

Public Company Board

Service & Governance

    LOGO    

Risk

Management

    LOGO    

Strategic

Planning

 

LOGO

  Vacation Ownership &
Lodging Industry
  LOGO     

 

 

Legal, Regulatory & Government Relations

  LOGO   Sales & Marketing/
Consumer Insights
    LOGO    

Human Capital, Professional

Development & Organizational Culture

   

 

JONICE GRAY TUCKER

Age: 47

Director Since: 2021

  

Committees:

  None

Experience

Ms. Tucker is a founding partner and governing board member of the law firm of Buckley LLP, which was founded in 2009, and a member of the firm’s partner board. She specializes in work with banks, non-bank financial institutions, and other companies providing financial products and services. Ms. Tucker has experience interacting with the Consumer Financial Protection Bureau, the Federal Trade Commission, and the Department of Housing and Urban Development as well as State Attorneys General. Prior to her role with Buckley LLP, Ms. Tucker was an attorney with the law firm of Skadden, Arps, Slate, Meager & Flom LLP. She began her legal career in 2000 as a law clerk to the Honorable Marvin J. Garbis, U.S. District Court, District of Maryland.

Ms. Tucker is the Immediate Past Chair of the Banking Law Committee of the American Bar Association and also was a leader on the ABA’s Consumer Financial Services Committee. She has previously served on the Board of Regents of the American College of Consumer Financial Services Lawyers. Ms. Tucker serves on the Board of Directors for the Legal Aid Society of D.C. and the Board of Trustees for the Washington Lawyers’ Committee for Civil Rights and Urban Affairs. She also serves on the Advisory Board for the Ron Brown Scholars Program and the Board of Directors of the Kolar Charitable Foundation.

Skills and Experience

As a founding partner of Buckley LLP, a member of the Buckley LLP partner board, and past chair of the Banking Law Committee of the American Bar Association, Ms. Tucker brings to the Board senior leadership experience. The Board also benefits from her legal, regulatory and government relations experience, her financial and capital markets experience as a lawyer representing financial services firms, and her technology and cybersecurity experience as a legal advisor to financial technology companies.

 

 

   LOGO

 

Corporate

Leadership

  LOGO   Independence   LOGO   Diversity   LOGO  

Risk

Management

    LOGO     Strategic Planning     LOGO     Legal, Regulatory & Government Relations

 

LOGO

 

 

Compliance

 

 

LOGO

  Sales & Marketing/ Consumer Insights   LOGO   Technology & Cybersecurity/
Digital & Social Media
       

 

10   Report on the Board of Directors and its Committees   2022 PROXY STATEMENT MARRIOTT VACATIONS WORLDWIDE


Table of Contents

Directors Remaining in Office

 

Name      Age        Position(s) Held in Company   

Director

Since

      

Term to 

Expire 

 

William J. Shaw

       76        Director, Chairman      2011          2023   

C.E. Andrews

       70        Director      2013          2023   

William W. McCarten

       73        Director      2011          2023   

Lizanne Galbreath

       64        Director      2018          2024   

Melquiades R. Martinez

       75        Director      2011          2024   

Stephen R. Quazzo

       62        Director      2018          2024   

Stephen P. Weisz

       71        Director, Chief Executive Officer      2011          2024   

 

WILLIAM J. SHAW, CHAIRMAN

Age: 76

Director Since: 2011

  

Committees:

  None

Experience

Mr. Shaw is Chairman of the Board. He served as Vice Chairman of Marriott International, Inc., the company from which we spun off, from May 2009 until his retirement in March 2011. He previously served as President and Chief Operating Officer of Marriott International from 1997 until May 2009. He joined Marriott International in 1974 and held various positions, including Corporate Controller, Corporate Vice President, Senior Vice President—Finance, Treasurer, Chief Financial Officer, Executive Vice President and President of Marriott Service Group. Mr. Shaw serves on the boards of directors of The Carlyle Group Inc., a publicly traded private equity, alternative asset management and financial services corporation, and DiamondRock Hospitality Company, a publicly traded lodging REIT. He also serves on the Board of Trustees of the University of Notre Dame.

Skills and Experience

Mr. Shaw brings to the Board extensive management experience with Marriott International, his prominent status in the hospitality industry and a wealth of knowledge in dealing with financial and accounting matters as a result of his prior service in financial and accounting positions at Marriott International, including as its Chief Financial Officer. Mr. Shaw also has experience as a board member of publicly traded companies.

 

 

   LOGO

 

Corporate

Leadership

  LOGO   Independence   LOGO   Financial & Capital Markets   LOGO   Accounting & Financial Reporting     LOGO     Business Development / Mergers & Acquisitions

 

LOGO

 

Public Company Board

Service & Governance

  LOGO  

Risk

Management

  LOGO   Strategic Planning  

 

LOGO

  Global Expertise     LOGO    

 

Vacation Ownership & Lodging Industry

 

LOGO

  Legal, Regulatory & Government Relations   LOGO   Real Estate & Business Development  

 

 

LOGO

 

 

Human Capital, Professional

Development & Organizational Culture

    LOGO    

 

Technology & Cybersecurity/
Digital & Social Media

 

MARRIOTT VACATIONS WORLDWIDE 2022 PROXY STATEMENT   Report on the Board of Directors and its Committees   11


Table of Contents
C.E. ANDREWS

Age: 70

Director Since: 2013

  

Committees:

  Audit (Chair)

  Nominating and Corporate Governance

Experience

Mr. Andrews was a member of the Board of Directors of, and an advisor to, MorganFranklin Consulting, a business consulting and technology solutions company, from April 2017 through June 2019 when he retired. From May 2013 to March 2017, he served as its Chief Executive Officer. Mr. Andrews was the president of RSM McGladrey Business Services, Inc., an audit and accounting services provider, from June 2009 until February 2012. Prior to that, Mr. Andrews served as the president of SLM Corporation (Sallie Mae), which originates, services and collects student loans. He joined Sallie Mae in 2003 as the Executive Vice President of Accounting and Risk Management and held the title of Chief Financial Officer from 2006 to 2007. Prior to joining Sallie Mae, Mr. Andrews spent approximately 30 years at Arthur Andersen, LLP, an accounting firm. Mr. Andrews serves on the Boards of Directors of Washington Mutual Investors Fund, a publicly traded mutual fund, and NVR, Inc., a publicly traded homebuilder. In addition, he serves on the Board of Directors of Vemo Education, Inc., a privately-held company that develops customized, value-oriented student financing programs, and the Advisory Board of Coastal Cloud LLC, a privately-held consulting firm that focuses on migration to next-generation technologies. In the past five years, Mr. Andrews served on the Board of Directors of WashingtonFirst Bankshares, Inc. from 2012 until it was acquired in 2018.

Skills and Experience

Mr. Andrews brings to the Board, and particularly to the Audit Committee, the extensive financial and accounting expertise that he obtained over his thirty-year career in public accounting, as well as through his role as Chief Financial Officer of Sallie Mae. Mr. Andrews also has experience as a board member and an officer of publicly traded companies.

 

 

   LOGO

 

Corporate

Leadership

  LOGO   Independence   LOGO   Financial & Capital Markets   LOGO   Accounting & Financial Reporting     LOGO     Business Development / Mergers & Acquisitions
LOGO  

Public Company Board

Service & Governance

 

 

LOGO

  Risk Management   LOGO   Strategic Planning   LOGO   Global Expertise  

 

 

 

LOGO

 

 

 

 

Legal, Regulatory & Government Relations

LOGO  

Compliance

 

 

LOGO

 

Human Capital, Professional

Development & Organizational Culture

 

 

LOGO

 

 

Technology & Cybersecurity/
Digital & Social Media

 

WILLIAM W. McCARTEN

Age: 73

Director Since: 2011

  

Committees:

  Audit

  Nominating and Corporate Governance

Experience

Mr. McCarten has served as non-executive Chairman of the Board of DiamondRock Hospitality Company, a publicly traded lodging REIT, since January 2010. He was Executive Chairman of DiamondRock from September 2008 to December 2009. Prior to that, he was Chairman and Chief Executive Officer of DiamondRock from its inception in 2004 until September 2008. From 1979 through 2003, Mr. McCarten worked at Marriott International and companies that operated businesses that were previously part of Marriott International or its predecessors, where he held a number of executive positions, including President of the Services Group and President and Chief Executive Officer of HMSHost Corporation, a publicly traded company. Mr. McCarten is also a director of Cracker Barrel Old Country Store, Inc., a publicly traded company.

Skills and Experience

Mr. McCarten provides the Board with the benefit of his extensive experience in the hospitality industry and capital markets, including his service as Chief Executive Officer and board member of publicly traded companies. He is a former certified public accountant who has a strong familiarity with accounting and financial reporting matters.

 

 

   LOGO

 

Corporate

Leadership

  LOGO   Independence   LOGO   Financial & Capital Markets   LOGO   Accounting & Financial Reporting     LOGO     Business Development / Mergers & Acquisitions

 

LOGO

 

Public Company Board

Service & Governance

  LOGO  

Risk

Management

  LOGO   Strategic Planning  

 

LOGO

  Vacation Ownership & Lodging Industry     LOGO    

 

Legal, Regulatory & Government Relations

LOGO   Compliance   LOGO   Real Estate & Business Development  

 

 

LOGO

 

 

Human Capital, Professional

Development & Organizational Culture

   

 

12   Report on the Board of Directors and its Committees   2022 PROXY STATEMENT MARRIOTT VACATIONS WORLDWIDE


Table of Contents
LIZANNE GALBREATH

Age: 64

Director Since: 2018

  

Committees:

  Compensation Policy

  Nominating and Corporate Governance

Experience

Ms. Galbreath has been the Managing Partner of Galbreath & Company, a real estate investment firm, since 1999. From April 1997 to 1999, she was Managing Director of LaSalle Partners/Jones Lang LaSalle, a real estate services and investment management firm, where she also served as a director. From 1984 to 1997, Ms. Galbreath served in a variety of leadership positions including as Managing Director, Chairman and Chief Executive Officer of The Galbreath Company, the predecessor of Galbreath & Company. Ms. Galbreath was a director of Paramount Group, Inc., a publicly traded REIT, from 2014 to 2020. She was also a director of Starwood from 2005 to September 2016. She served as a director of ILG, Inc. (“ILG”) from May 2016 through August 2018, prior to the Company’s acquisition of ILG.

Skills and Experience

Ms. Galbreath provides the Board with the benefit of her senior leadership experience as managing partner of Galbreath & Company. The Board also benefits from her real estate investment, development and strategy experience, and management and corporate governance experience, having served as a member of the boards of directors and committees of the boards of directors of other publicly traded companies.

 

 

   LOGO

 

Corporate

Leadership

  LOGO   Independence   LOGO   Diversity     LOGO    

Public Company Board

Service & Governance

    LOGO    

Risk

Management

    LOGO    

Strategic

Planning

 

 

LOGO

 

 

Vacation Ownership
& Lodging Industry

 

 

LOGO

  Real Estate &
Business Development
         

 

MELQUIADES R. MARTINEZ

Age: 75

Director Since: 2011

  

Committees:

  Nominating and Corporate Governance (Chair)

Experience

Mr. Martinez has served as Chairman of the Southeast U.S. and Latin America, JPMorgan Chase & Co. since July 2010. Prior to that, he was a partner in the law firm DLA Piper from September 2009. Mr. Martinez served as a U.S. Senator from Florida from January 2005 through September 2009. He also served as Chairman of the Republican Party from November 2006 through October 2007, as Secretary of the U.S. Department of Housing and Urban Development from 2001 to 2004, and as Mayor of Orange County, Florida from November 1998 to January 2001. Mr. Martinez is a director of NVR Inc., a publicly traded homebuilder. He also serves on the Advisory Board of Securiport LLC, a private company that designs and implements civil aviation security, biometric screening, immigration control and threat assessment systems.

Skills and Experience

Mr. Martinez provides our Board with the benefit of his vast experience in the public and private sectors and his in-depth knowledge of and relationships within Florida, where our headquarters are located. The Board also benefits from his legal experience and knowledge of legislative and regulatory processes.

 

 

   LOGO

 

Corporate

Leadership

  LOGO   Independence   LOGO   Diversity     LOGO    

Public Company Board

Service & Governance

    LOGO    

Risk

Management

    LOGO    

Strategic

Planning

 

LOGO

 

 

 

Global Expertise

 

 

LOGO

 

 

 

Legal, Regulatory & Government Relations

 

 

LOGO

 

 

 

Compliance

 

 

 

 

LOGO

 

 

 

 

 

Human Capital, Professional

Development & Organizational Culture

   

 

MARRIOTT VACATIONS WORLDWIDE 2022 PROXY STATEMENT   Report on the Board of Directors and its Committees   13


Table of Contents
STEPHEN R. QUAZZO

Age: 62

Director Since: 2018

  

Committees:

  Audit

  Compensation Policy

Experience

Mr. Quazzo is the Chief Executive Officer and has been the Managing Director and co-founder of Pearlmark Real Estate, LLC, a real estate principal investment firm, since March 1996. From April 1991 to March 1996, Mr. Quazzo was President of Equity Institutional Investors, Inc., a private investment firm and a subsidiary of Equity Group Investments, Inc. He is currently a director of Phillips Edison & Company, Inc., a publicly traded REIT, and was a director of Starwood from 1995 to September 2016. Mr. Quazzo is a member and trustee of the Urban Land Institute, ULI Foundation, a member of the Pension Real Estate Association, and a licensed real estate broker in Illinois. He was a director of ILG from May 2016 through August 2018 prior to the Company’s acquisition of ILG.

Skills and Experience

Mr. Quazzo provides the Board with the benefit of his extensive experience in real estate, investment and development and strategy experience as Chief Executive Officer of Pearlmark Real Estate as well as his senior leadership experience. He also has broad experience in corporate governance, having served as a board member of other publicly traded companies.

 

 

   LOGO

 

Corporate

Leadership

  LOGO   Independence   LOGO   Financial & Capital Markets   LOGO   Accounting & Financial Reporting     LOGO    

Public Company Board

Service & Governance

    LOGO    

Risk

Management

 

LOGO

 

 

Strategic Planning

 

 

LOGO

  Vacation Ownership
& Lodging Industry
  LOGO   Real Estate &
Business Development
     

 

STEPHEN P. WEISZ, CHIEF EXECUTIVE OFFICER

Age: 71

Director Since: 2011

  

Committees:

  None

Experience

Mr. Weisz has served as our Chief Executive Officer since 2011, and served as our President from 1996 until 2021, Mr. Weisz joined Marriott International in 1972. Over his 39-year career with Marriott International, he held a number of leadership positions in the Lodging division, including Regional Vice President of the Mid-Atlantic Region, Senior Vice President of Rooms Operations, and Vice President of the Revenue Management Group. Mr. Weisz became Senior Vice President of Sales and Marketing for Marriott Hotels, Resorts & Suites in 1992 and Executive Vice President-Lodging Brands in 1994. He has previously served as Chairman of the Board of Directors of the American Resort Development Association and as Chairman of the Board of Trustees of Children’s Miracle Network.

Skills and Experience

Mr. Weisz brings to the Board the extensive lodging and vacation ownership industry expertise he developed during his nearly 50 years in the industry, including 39 years with Marriott International, as well as corporate leadership experience from his service as our President since 1996 and his prior service as Chairman of the Board of Directors of the American Resort Development Association.

 

 

   LOGO

 

Corporate

Leadership

    LOGO     Business Development / Mergers & Acquisitions     LOGO    

Public Company Board

Service & Governance

    LOGO    

Risk

Management

    LOGO    

Strategic

Planning

    LOGO    

Global

Expertise

 

LOGO

  Vacation Ownership & Lodging Industry     LOGO     Legal, Regulatory & Government Relations  

 

 

 

LOGO

 

 

 

 

 

Sales & Marketing/
Consumer Insights

    LOGO     Real Estate &
Business Development
    LOGO     Human Capital, Professional Development & Organizational Culture

 

LOGO

 

 

 

Technology & Cybersecurity/
Digital & Social Media

           

 

14   Report on the Board of Directors and its Committees   2022 PROXY STATEMENT MARRIOTT VACATIONS WORLDWIDE


Table of Contents

SUMMARY OF DIRECTOR ATTRIBUTES AND SKILLS

Our Board members have a diversity of experience and bring a wide variety of skills, qualifications and viewpoints that strengthen the Board’s oversight role on behalf of our stockholders. The following highlights certain key characteristics of our directors. Additional information can be found in their biographies.

 

          Shaw   Andrews   Galbreath   Gellein   Martinez   McCarten   Morgan   Quazzo   Tucker   Weisz

 

LOGO

  Corporate Leadership is important because directors with experience running public companies, private companies or other large organizations typically possess strong leadership qualities.   🌑   🌑   🌑   🌑   🌑   🌑   🌑   🌑   🌑   🌑

 

LOGO

  Independence satisfies the independence requirement of the NYSE and our Corporate Governance Guidelines.   🌑   🌑   🌑   🌑   🌑   🌑   🌑   🌑   🌑    

 

LOGO

  Diversity adds perspective through diversity in, among other areas, gender, ethnic background and race.           🌑       🌑       🌑       🌑    

 

LOGO

  Financial & Capital Markets experience helps Board members advise on our capital structure and financing and investing activities.   🌑   🌑       🌑       🌑       🌑        

 

LOGO

  Accounting & Financial Reporting experience is important in overseeing our financial reporting and internal controls to assure transparency and accuracy.   🌑   🌑               🌑       🌑        

 

LOGO

  Business Development / Mergers & Acquisitions experience supports our goal of selectively pursuing compelling new business opportunities.   🌑   🌑       🌑       🌑               🌑

 

LOGO

  Public Company Board Service & Governance experience supports our goals of accountability, transparency and protection of stockholder interests.   🌑   🌑   🌑   🌑   🌑   🌑   🌑   🌑       🌑

 

LOGO

  Risk Management experience supports oversight of our processes for assessing and managing risk.   🌑   🌑   🌑   🌑   🌑   🌑   🌑   🌑   🌑   🌑

 

LOGO

  Strategic Planning experience allows the Board to evaluate and challenge our strategic plans.   🌑   🌑   🌑   🌑   🌑   🌑   🌑   🌑   🌑   🌑

 

LOGO

  Global Expertise experience supports our goal of continuing growth globally.   🌑   🌑       🌑   🌑                   🌑

 

LOGO

  Vacation Ownership & Lodging Industry experience is important in overseeing the development and implementation of our business strategy and operating plan.   🌑       🌑   🌑       🌑   🌑   🌑       🌑

 

LOGO

  Legal, Regulatory & Government Relations experience is relevant because we operate in a heavily regulated industry.   🌑   🌑       🌑   🌑   🌑   🌑       🌑   🌑

 

LOGO

  Compliance experience helps set the tone at the top to encourage our employees to act ethically and legally.       🌑           🌑   🌑           🌑    

 

LOGO

  Sales & Marketing/Consumer Insights experience is important in understanding the consumer-driven aspects of our business in order to deliver outstanding products and services.               🌑           🌑       🌑   🌑

 

LOGO

  Real Estate & Business Development experience aids in understanding and reviewing our business and strategy.   🌑       🌑   🌑       🌑       🌑       🌑

LOGO

  Human Capital, Professional Development & Organizational Culture experience helps us attract, motivate and retain top candidates for positions throughout our global workforce.   🌑   🌑       🌑   🌑   🌑   🌑           🌑

LOGO

  Technology & Cybersecurity/Digital & Social Media experience is relevant as we look for ways to enhance the customer experience and internal operations and assess and address the risks associated with our cyber activities.   🌑   🌑                           🌑   🌑

 

MARRIOTT VACATIONS WORLDWIDE 2022 PROXY STATEMENT   Report on the Board of Directors and its Committees   15


Table of Contents

Board Composition

 

9 of 10

Independent Directors

 

7.9 years

Average Tenure of Directors

 

68.2 years

Average Age of Directors

 

40%

Gender/racially diverse Directors

Please refer to Item 1, “Business,” of our 2021 Annual Report for information regarding our executive officers.

2021 BOARD AND COMMITTEE MEETINGS AND ATTENDANCE

Our Board met eight times in 2021. No incumbent director attended fewer than 75% of the meetings of the Board or any Committee on which such director served during the period for which such director has been a director or served on such Committee. Directors are expected to attend annual meetings of stockholders, and each of our directors attended the 2021 Annual Meeting of Stockholders.

COMMITTEE CHARTERS

The charters of the Audit, Compensation Policy, and Nominating and Corporate Governance Committees are available via the Investor Relations section of our website (www.marriottvacationsworldwide.com) by clicking on “Corporate Governance.” Copies of the committee charters also may be obtained upon request from our Corporate Secretary. Other committees may also be established by our Board from time to time.

The composition of our committees during 2021 is set forth in the chart below.

 

   Audit Committee       Compensation Policy Committee       Nominating and Corporate Governance Committee

C.E. Andrews (Chair)

Raymond L. Gellein, Jr.

Thomas J. Hutchison III*

William W. McCarten

Steven R. Quazzo

  

Dianna F. Morgan (Chair)

Lizanne Galbreath

Raymond Gellein, Jr.

Thomas J. Hutchison III*

Stephen R. Quazzo

  

Melquiades R. Martinez (Chair)

C.E. Andrews

Lizanne Galbreath

William W. McCarten

Dianna F. Morgan

 

*

Mr. Hutchison’s term expires at the 2022 annual meeting.

Committees of the Board of Directors

Audit Committee. The Board has determined that each of the members of the Audit Committee is independent as defined under our Corporate Governance Principles, the NYSE Listing Standards and applicable SEC rules for audit committee members. The internal and independent auditors have unrestricted access to the Audit Committee. The Audit Committee meets privately with each of the independent auditors, the internal auditors, and members of management. The Audit Committee met eight times in 2021. Each member of the Audit Committee is financially literate under applicable SEC and NYSE standards. In addition, Mr. Andrews and Mr. McCarten each possesses accounting or related financial management expertise within the meaning of the NYSE Listing Standards and qualifies as an “audit committee financial expert” as defined under the applicable SEC rules. Our Corporate Governance Principles establish a limit on the number of audit committees of publicly traded companies on which members of the Company’s Audit Committee may serve, including our Audit Committee, at three.

The responsibilities of the Audit Committee include, among other things:

 

 

appointing, retaining, overseeing and determining the compensation of our independent auditor;

 

 

approving all terms and fees associated with any audit engagement of our independent auditor;

 

 

overseeing our accounting, reporting, financial and cybersecurity practices;

 

 

overseeing our internal control environment and compliance with legal and regulatory requirements;

 

 

overseeing our independent auditor’s qualifications and independence;

 

 

overseeing the performance of our internal audit function and the independent auditor; and

 

 

overseeing the Company’s ESG reporting and internal controls and disclosure procedures concerning ESG matters.

Compensation Policy Committee. The Board has determined that each of the members of the Compensation Policy Committee is independent as defined under our Corporate Governance Principles and the NYSE Listing Standards for compensation committee members. The Compensation Policy Committee met eight times in 2021.

The responsibilities of the Compensation Policy Committee include, among other things:

 

 

assisting the Board in discharging its responsibilities relating to executive compensation;

 

 

overseeing our overall compensation structure, policies and programs;

 

 

reviewing and approving on an annual basis the corporate goals and objectives with respect to compensation for the Chief Executive Officer;

 

 

overseeing the evaluation and setting the compensation of our other executive officers;

 

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maintaining management succession plans;

 

 

reviewing the compensation of non-employee directors and recommending any changes in compensation to the Board; and

 

 

reviewing ESG matters relating to the Company’s workforce and key aspects of the Company’s human resources strategies, policies and programs.

Nominating and Corporate Governance Committee. The Board has determined that each of the members of the Nominating and Corporate Governance Committee is independent as defined under our Corporate Governance Principles and the NYSE Listing Standards. The Nominating and Corporate Governance Committee met four times in 2021.

The responsibilities of the Nominating and Corporate Governance Committee include, among other things:

 

 

identifying and evaluating director candidates;

 

 

recommending to the Board director candidates for election;

 

 

recommending to the Board implementation of corporate governance principles and annually reviewing and recommending changes to these principles as appropriate;

 

 

reviewing our conflict of interest and related party transactions policies and approving certain related party transactions as provided for in such policies;

 

 

performing a leadership role in shaping our corporate governance; and

 

 

reviewing and making recommendations to the Board regarding sustainability matters, including ESG matters.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

None of the members of the Compensation Policy Committee is or has been an officer or employee of the Company or had any relationship that is required to be disclosed as a transaction with a related party or as an interlocking relationship.

MEETINGS OF INDEPENDENT DIRECTORS

Our Corporate Governance Principles require the Board to have at least two regularly scheduled executive sessions a year for the non-management directors without management present and require the independent directors to meet in executive session at least annually. The Chairman, who is currently Mr. Shaw, presides at such executive sessions.

 

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CORPORATE GOVERNANCE

 

The Board is committed to good corporate governance, good business practices and transparency in financial reporting. The Nominating and Corporate Governance Committee annually reviews the Company’s Corporate Governance Principles, a copy of which is available via the Investor Relations section of our website (www.marriottvacationsworldwide.com) by clicking on “Corporate Governance” under the “Investor Relations” tab. A copy of the Company’s Corporate Governance Principles also may be obtained upon request from our Corporate Secretary.

SEPARATION OF BOARD CHAIRMAN AND CHIEF EXECUTIVE OFFICER

While the Board has no formal policy requiring the separation of the positions of Chairman of the Board and Chief Executive Officer, William J. Shaw, an independent director, currently serves as Chairman of the Board. Our Board regularly reviews our leadership structure and has determined that separating the roles of Chairman and Chief Executive Officer is the optimal leadership structure for the Company, allowing our Chief Executive Officer to focus on his duties while benefiting from the Chairman’s significant experience at Marriott International and in the hospitality industry. The Board believes that having an independent Chairman improves the ability of the Board to exercise its oversight role over management and provides opportunities for discussion and evaluation of management decisions and the direction of the Company.

BOARD AND COMMITTEE EVALUATIONS

The Board and its committees evaluate their own performance on an ongoing basis. The evaluation process is overseen by the Nominating and Corporate Governance Committee, which recommends enhancements to Board and committee effectiveness as appropriate. The results from the 2021 evaluation process were positive and confirmed our Board’s commitment to high levels of Board effectiveness and governance.

SELECTION OF DIRECTOR NOMINEES

The Nominating and Corporate Governance Committee identifies and recruits candidates for election to the Board. The Nominating and Corporate Governance Committee evaluates the composition of the Board at least annually to assess the skills and experience that are currently represented on the Board as a whole, and in individual directors, as well as the skills and experience that the Board may find valuable in the future. The Nominating and Corporate Governance Committee selects and recommends to the Board director candidates based on the Nominating and Corporate Governance Committee’s evaluation of each candidate’s character, judgment, personal and professional ethics, personal and professional integrity, values, background experience, technical skills, affiliations, familiarity with national and international issues affecting our business and demonstrated exceptional ability and judgment. Although we do not have a formal policy regarding diversity, our Board views diversity as a priority and seeks diverse representation among its members and evaluates its effectiveness in accounting for diversity as part of its annual evaluation of the composition of the Board. Candidates are selected who not only bring a depth of experience but also provide skills and knowledge complementary to the Board and our business. Candidates must be committed to representing the long-term interests of our stockholders and fulfilling a director’s duties and responsibilities, which include attending Board meetings and our annual stockholders meeting, and preparing for Board meetings by advance review of any meeting materials. The Nominating and Corporate Governance Committee recommends to the Board the Company’s candidates for election or reelection to the Board at each annual meeting of stockholders, as well as candidates to be elected by the Board as necessary to fill vacancies and newly created directorships. The Board proposes a slate of nominees to the stockholders for election to the Board. The Board also determines the number of directors on the Board.

The Nominating and Corporate Governance Committee identifies nominees for director on its own as well as by considering recommendations from other members of the Board, officers and employees of the Company, and other sources that the Nominating and Corporate Governance Committee deems appropriate. The Nominating and Corporate Governance Committee will also consider candidates for Board membership recommended by stockholders. Stockholders may recommend nominees for consideration by the Nominating and Corporate Governance Committee by submitting the names and supporting information to: Marriott Vacations Worldwide Corporation, 9002 San Marco Court, Orlando, Florida, 32819, Attention: Corporate Secretary.

The supporting information should include the information required by our Bylaws in connection with the nominations of persons for election to the Board. The Nominating and Corporate Governance Committee will evaluate all candidates, regardless of source, in light of the Board-approved criteria.

DIRECTOR INDEPENDENCE

The Company has determined that all of the directors, other than Stephen P. Weisz, have no material relationship with the Company and are independent under the criteria set forth in the applicable rules of the SEC, the NYSE Listing Standards and the Company’s Corporate Governance Principles. Additionally, all of the members of the Audit Committee, Compensation Policy Committee, and Nominating and Corporate Governance Committee are independent under such standards.

 

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RISK OVERSIGHT

Our Board is responsible for overseeing our processes for assessing and managing risk. The Board considers our risk profile when reviewing our annual business plan and incorporates risk assessment into its decisions. In performing its oversight responsibilities, our Board receives an annual enterprise risk assessment report from our Chief Financial Officer and our Senior Vice President, Internal Audit (who is our Chief Audit Executive) and discusses the most significant risks facing us. The Board believes that its risk oversight process would be effective under a variety of Board leadership structures, and therefore, it does not materially affect the Board’s choice of leadership structure.

Each of the Board’s committees addresses risks that fall within that committee’s area of responsibility. The Board has delegated certain risk oversight functions to the Audit Committee, including the periodic review of the audit plan of the internal audit department, the tax function, treasury operations, and insurance. The Audit Committee receives regular reports from: the corporate controllership and our outside independent accounting firm on financial reporting matters; the internal audit department about significant findings; and the General Counsel regarding legal and regulatory risks. The Audit Committee incorporates its risk assessment function into its reports to the Board.

Our Compensation Policy Committee evaluates any incentives and risks arising from or related to our compensation programs and plans and assesses whether the incentives and risks are appropriate. As discussed in the Compensation Discussion and Analysis below, the Compensation Policy Committee believes that our compensation programs do not present risks that are reasonably likely to have a material adverse effect on the Company.

OVERSIGHT OF CYBERSECURITY

Our Audit Committee is responsible for oversight of cybersecurity risk. The Company’s Senior Vice President, Global Information Security, and its Executive Vice President and Chief Information Officer review cybersecurity and data security risks and mitigation strategies with the Audit Committee at least twice per year. The Company has a dedicated team that is responsible for managing enterprise-wide information security strategy, policy, standards, architecture and processes. This team follows a documented process to identify, quantify and mitigate security risks. Risks are reported to and reviewed by senior leadership, and more significant risks are reported to our executive officers and the Audit Committee. In addition, we require our associates to receive annual training on our information security policies. This includes but is not limited to information classification and handling, data privacy, physical security, phishing, malware and ransomeware, social engineering, identifying and reporting information security incidents, and secure credit card handling as well as additional topics based on job roles and responsibilities.

BOARD AND COMMITTEE OVERSIGHT OF ENVIRONMENTAL, SOCIAL AND GOVERNANCE MATTERS

Over the past year we have implemented a governance structure for our ESG program. Oversight of ESG matters happens at multiple levels within our ESG governance structure. Our Board has overall responsibility for managing ESG risks and opportunities, and is provided with updates on ESG matters at least quarterly. Each of the Board’s committees assist the board in fulfilling this responsibility by overseeing the ESG-related risks in areas over which they have responsibility.

Board of Directors: Leading sponsor of our ESG program. Responsible for general oversight of the ESG program.

Nominating & Corporate Governance Committee: Oversees the Company’s ESG priorities, objectives, strategy and performance. Makes recommendations to the Board. Oversees climate and other environmental risks and opportunities. Reviews ESG risks and opportunities with management.

Compensation Policy Committee: Oversees initiatives relative to inclusion, diversity, and other social responsibility matters. Oversees executive officer compensation programs related to ESG matters.

Audit Committee: Oversees reporting, internal control and disclosure procedures with respect to ESG matters.

ESG Steering Committee: A cross-functional management committee of the Company that supports our ongoing commitment to ESG matters. Assists the executive officers of the Company in setting a general strategy related to ESG matters; developing, implementing and monitoring initiatives and policies related to that strategy; overseeing communications with employees, investors and other stakeholders with respect to ESG matters; and monitoring and assessing developments related to, and improving the Company’s understanding of, ESG issues.

ESG Task Force: Responsible for coordinating, executing and administering the essential functions and objectives of the ESG Steering Committee. Business units throughout the Company are responsible for deploying our ESG strategy and implementing action plans as directed by the ESG Steering Committee, our executive officers, our Chief Executive Officer, the Board, and the standing Committees of the Board.

 

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COMMUNICATIONS WITH THE BOARD

Stockholders and other interested parties wishing to communicate with our Board as a group or with any individual director (including the Chairman of the Board) may do so by sending an e-mail to business.ethics@mvwc.com or sending a letter to Marriott Vacations Worldwide Corporation, 9002 San Marco Court, Orlando, Florida, 32819, Attention: Chief Audit Executive. Such communications may be confidential and/or anonymous. All such concerns are forwarded to the appropriate directors for their review and are reviewed and addressed by us in the same way that we address other concerns.

OTHER DIRECTORSHIPS

Our Corporate Governance Principles limit the number of boards of publicly traded companies on which the Company’s directors may serve to two, including our Board, for directors who are chief executive officers of publicly traded companies, and four for other directors.

CODE OF CONDUCT

Our Board has adopted a code of conduct, our Business Conduct Guide, that applies to all of our directors, officers and associates, including our Chief Executive Officer, Chief Financial Officer and Principal Accounting Officer. Our Business Conduct Guide is available in the Investor Relations section of our website (www.marriottvacationsworldwide.com) and is accessible by clicking on “Corporate Governance.” Any amendments to our Business Conduct Guide and any grant of a waiver from a provision of our Business Conduct Guide requiring disclosure under applicable SEC rules may be disclosed at the same location as the Business Conduct Guide in the Investor Relations section of our website located at www.marriottvacationsworldwide.com or on a Current Report on Form 8-K.

 

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AUDIT COMMITTEE REPORT AND INDEPENDENT AUDITOR FEES

 

REPORT OF THE AUDIT COMMITTEE

The Audit Committee is composed solely of independent directors meeting the requirements of applicable SEC and NYSE rules. Each member is financially literate for audit committee purposes under the NYSE rules, and two members of the Audit Committee also qualify as an “audit committee financial expert” within the meaning of SEC regulations. The key responsibilities of the Audit Committee are set forth in its charter, which was adopted by us and approved by the Board and is posted under “Corporate Governance” in the Investor Relations section of our website at ir.marriottvacationsworldwide.com/investor-relations.

As more fully described in our charter, our Audit Committee assists the Board in its oversight of risks related to financial reporting, accounting, financial practices and cybersecurity. Our Audit Committee also oversees reporting and internal controls and disclosure procedures concerning the Company’s environmental, social and governance program. Management is responsible for the preparation, presentation and integrity of our consolidated financial statements, accounting and financial reporting principles, and maintaining an effective system of internal controls over financial reporting. Ernst & Young, our independent registered public accountant, is responsible for performing an independent audit of our consolidated financial statements and the effectiveness of internal controls over financial reporting in accordance with the auditing standards of the Public Company Accounting Oversight Board (“PCAOB”).

The Audit Committee has selected Ernst & Young as our independent registered public accountant for 2022. Ernst & Young has served as our independent registered public accountant since 2011. The Audit Committee is responsible for the appointment, compensation and oversight of our independent registered public accountant. The Audit Committee regularly reviews Ernst & Young’s independence and performance in deciding whether to retain Ernst & Young or engage another firm as our independent registered public accountant. In the course of these reviews, the Audit Committee considers, among other things:

 

 

Ernst & Young’s historical and recent performance on our audit;

 

 

Ernst & Young’s capability and expertise in handling the breadth and complexity of our operations;

 

 

data on audit quality and performance, including recent PCAOB reports on Ernst & Young and its peer firms;

 

 

the appropriateness of Ernst & Young’s fees for audit and non-audit services, on both an absolute basis and as compared to its peer firms;

 

 

Ernst & Young’s independence, including the possible effects of its provision of non-audit services and associated fees on its independence; and

 

 

Ernst & Young’s tenure as our independent registered public accountant, including the benefits of having an independent registered public accountant that is familiar with us, and the controls and processes that help ensure Ernst & Young’s independence.

In accordance with SEC rules and Ernst & Young policies, audit partners are subject to rotation requirements to limit the number of consecutive years an individual partner may provide service to us. For lead and concurring audit partners, the maximum number of consecutive years of service in that capacity is five years. The process for selection of our lead audit partner pursuant to this rotation policy involves a meeting between the Chair of the Audit Committee and the candidate for the role, as well as discussion by the full Audit Committee and with management. The lead partner from Ernst & Young who was assigned to us in 2014 completed his five years of service in 2019, and a new lead partner was assigned to us beginning in 2020.

The Audit Committee engages in an annual evaluation of our independent registered public accounting firm’s qualifications, assessing the firm’s quality of service, the firm’s sufficiency of resources, the quality of the communication and interaction with the firm, and the firm’s independence, objectivity, and professional skepticism. The Audit Committee also considers the advisability and potential impact of selecting a different independent public accounting firm.

The Audit Committee and the Board believe that the continued retention of Ernst & Young as our independent registered public accounting firm is in the best interest of our stockholders.

The Audit Committee regularly meets and holds separate discussions with management, our internal auditors, and Ernst & Young. Prior to their issuance, the Audit Committee reviewed and discussed our quarterly and annual consolidated financial statements (including the presentation of non-GAAP financial information) and disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (including significant accounting policies and judgments) with management, our internal auditors and Ernst & Young. During 2021, management, our internal auditors and Ernst & Young also made presentations to the Audit Committee on specific topics of interest, including: our information technology systems and controls; our federal and state income tax positions, including our tax strategy and risks; our critical accounting policies; new accounting guidance and the potential impact of new accounting pronouncements; our strategy and the implementation of new systems; and cyber security.

The Audit Committee has met and held discussions with management and Ernst & Young regarding the fair and complete presentation of our results and the assessment of our internal control over financial reporting. Management has represented to the Audit Committee that our consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America, and the Audit Committee has reviewed and discussed the consolidated financial statements with management and Ernst & Young. The Audit Committee has discussed with Ernst & Young the matters that are required to be discussed by the applicable requirements of the PCAOB. The Audit Committee discussed with Ernst & Young their independence from the Company and our management, including the matters, if any, in the written disclosures delivered pursuant to the applicable requirements of the PCAOB. The Audit Committee has concluded that Ernst & Young’s provision of audit and non-audit services to us and our affiliates is compatible with Ernst & Young’s independence.

 

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The Audit Committee discussed with Ernst & Young the overall scope and plans for their audit, including the estimated audit fees and non-audit fees. The Audit Committee has also discussed with our Senior Vice President, Internal Audit, the overall scope of and plans for our internal audits. The Audit Committee met with Ernst & Young and with our internal auditors, in each case, with and without other members of management present, to discuss the results of their respective examinations, the evaluations of our internal controls and the overall quality and integrity of our financial reporting. Additionally, the Audit Committee has reviewed the performance, responsibilities, budget, and staffing of our internal audit department.

Based on the reviews and discussions referred to above, the Audit Committee recommended to the Board, and the Board has approved, that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, for filing with the Securities and Exchange Commission.

 

Members of the Audit Committee:
C.E. Andrews, Chair
Raymond L. Gellein, Jr.
Thomas J. Hutchison III
William W. McCarten
Stephen R. Quazzo

PRE-APPROVAL OF INDEPENDENT AUDITOR FEES AND SERVICES POLICY

The Audit Committee’s Pre-Approval of Independent Auditor Fees and Services Policy provides for pre-approval of all audit, audit-related, tax and other permissible non-audit services provided by our principal independent auditor on an annual basis and as needed. The Audit Committee has delegated authority to the Audit Committee Chair to pre-approve principal independent auditor services where we deem it necessary or advisable that such services commence prior to the next regularly scheduled meeting (provided that the Audit Committee Chair informs the Audit Committee of any such services and the estimated fees that were pre-approved at the next regularly scheduled meeting). During 2021, all such services were pre-approved by the Audit Committee.

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FEE DISCLOSURE

The following table presents aggregate fees billed for professional services rendered by our independent registered public accounting firm, Ernst & Young, for the audit of our annual financial statements for fiscal 2021 and fiscal 2020 and aggregate fees billed in fiscal 2021 and fiscal 2020 for audit-related services, tax services and all other permissible non-audit services rendered by our independent registered public accounting firm. The Audit Committee approved all of the fees presented in the table below. The Audit Committee is also responsible for overseeing the fee negotiations associated with the retention of Ernst & Young for the audit of our financial statements and internal control over financial reporting.

 

      2021      2020  

Audit fees

   $ 8,634,631      $ 8,260,894  

Audit-related fees

     398,600        298,500  

Tax fees

     1,089,990        1,449,091  

All other fees

     1,320        3,000  

Total

   $ 10,124,541      $ 10,011,485  

For purposes of the preceding table, the professional fees are classified as follows:

 

 

Audit fees – These are fees for professional services performed for the audit of our annual financial statements and the required review of quarterly financial statements and other procedures performed by the independent auditors in order for them to be able to form an opinion on our consolidated financial statements. These fees also cover services that are normally provided by independent auditors in connection with statutory and regulatory filings or engagements and other services that generally only the independent auditor reasonably can provide, such as services associated with filing registration statements, periodic reports and other filings with the SEC, and audits of acquired properties or businesses or statutory audits for our subsidiaries or its affiliates.

 

 

Audit-related fees – These are fees for assurance and related services that traditionally are performed by independent auditors, such as due diligence related to acquisitions and dispositions, attestation services that are not required by statute or regulation, and the audit of the effectiveness of the Company’s internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002.

 

 

Tax fees – These are fees for all professional services performed by professional staff in Ernst & Young’s tax division, except those services related to the audit of our financial statements. These include fees for tax compliance, tax planning, and tax advice, including federal, state, and local issues. Services may also include assistance with tax audits and appeals before the IRS and similar state and local agencies, as well as federal, state, and local tax issues related to due diligence.

 

 

All other fees – These are fees for other permissible work performed that do not meet the above-described categories, including a subscription to an accounting research website.

 

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EXECUTIVE AND DIRECTOR COMPENSATION

 

COMPENSATION DISCUSSION AND ANALYSIS

Our NEOs for whom compensation information is presented in the Summary Compensation Table below are:

 

Stephen P. Weisz, Chief Executive Officer

 

John E. Geller, Jr., President*

 

Anthony E. Terry, Executive Vice President and Chief Financial Officer

 

R. Lee Cunningham, Executive Vice President and Chief Operating Officer—Vacation Ownership**

 

Brian E. Miller, President, Vacation Ownership

 

Jeanette E. Marbert, President, Exchange and Third-Party Management

 

 

*

Until October 16, 2021, with the appointment of Mr. Terry as the Executive Vice President and Chief Financial Officer, Mr. Geller served as the President and Chief Financial Officer.

 

**

As reported in a Current Report on Form 8-K filed on January 12, 2022, Mr. Cunningham announced his decision to retire as our Executive Vice President and Chief Operating Officer – Vacation Ownership in April 2022; Mr. Cunningham subsequently announced that he would instead retire in May 2022.

Our executive compensation programs are designed to reward financial results and effective strategic leadership to build sustainable value for stockholders by correlating the timing and amount of actual pay with performance goals over various time horizons without excessive risk-taking.

Our seasoned management team is led by Stephen P. Weisz, our CEO, who has nearly 50 years of combined experience at Marriott Vacations Worldwide and Marriott International. Our 11 executive officers have an average of over 25 years of total combined experience at Marriott Vacations Worldwide, our subsidiaries and Marriott International. We believe our management team’s extensive public company and vacation ownership industry experience has enabled us to achieve solid performance and will enable us to continue to respond quickly and effectively to changing market conditions and consumer trends.

Our executive compensation program includes the following key elements:

 

 

base salary, which provides our named executive officers a fixed level of compensation;

 

 

annual bonus, which encourages the achievement of current year objectives; and

 

 

stock based awards, which align the long-term interests of our named executive officers with the interests of our stockholders and encourage the achievement of longer-term objectives.

February 2021 Compensation Actions

The Compensation Policy Committee made the following key compensation decisions for 2021, which are discussed in greater detail in the following pages:

 

Compensation Element   Compensation Decisions
Base Salary   Each of our named executive officers received a base salary increase of between 1.5% and 7% effective as of December 26, 2020 based on individual contributions to overall corporate results, company budget and salary level relative to market.
Annual Bonus   Due to the unpredictable impact of the COVID-19 pandemic on our business, in 2021, our Board elected to use two 6-month measurement periods to determine any cash bonus payable for performance during 2021. For the period January 1—June 30, 2021, the bonus was solely based upon achieving Adjusted EBITDA metrics. For the period July 1—December 31, 2021, the bonus was based on both Adjusted EBITDA and Total Revenue (which are defined below).
Equity Compensation   Due to the uncertainty with three-year forecasting as a result of uncertainty due to the COVID-19 pandemic, our equity awards for 2021 were a combination of stock appreciation rights (“SARs”) and restricted stock units (“RSUs”), with 50% consisting of SARs and 50% consisting of RSUs, based on grant date value. The amount of each named executive officer’s award was determined by considering market data and internal factors.

 

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COVID-19 Response Actions in 2021

To recognize management’s response to the COVID-19 pandemic, including efforts to conserve cash, reopen resorts and sales centers, implement safety protocols, manage return to office and related on-going safety issues for associates, among other measures, and to retain executive officers who were particularly vulnerable to recruitment efforts from companies not in the hospitality industry, the Compensation Policy Committee reviewed the Company’s 2019 performance in comparison to 2020 and 2021 and exercised its discretion to approve modifications to the performance criteria to be applied to the Performance Units for the performance period that began on January 1, 2019 and ended on December 31, 2021 (the “2019-2021 Performance Units”). The Compensation Policy Committee modified the performance period with respect to the 2019-2021 Performance Units so that rather than evaluating Company performance based upon one cumulative three-year performance period beginning on January 1, 2019 and ending on December 31, 2021, the Committee evaluated Company performance with respect to three separate annual periods, one for each of the 2019, 2020, and 2021 fiscal years of the Company. The cumulative Adjusted EBITDA and ROIC goals originally established for the three-year performance period resulted in achievement of 0% of the target Performance Units. The equal weighting of the three separate annual performance periods, with 2020 and 2021 achievement at zero percent, yielded an achievement and a payout of 33.18% of target.

In addition, to address the economic volatility faced in 2020 and 2021, as well as expected volatility in 2022, the Company’s executives enacted several measures to mitigate the impact of the pandemic noted above, such as reopening resorts and sales centers and implementing safety protocols for associates, owners and guests. As a result of these actions, the Company returned to pre-pandemic levels of key metrics, including contract sales and EBITDA, by the end of third-quarter 2021. In recognition of their contributions to the Company’s response and recovery, delivering shareholder value through an increase in the Company’s stock price in excess of pre-pandemic pricing, and building a solid foundation for growth, and in order to retain key talent, the Compensation Policy Committee awarded the executive team a one-time equity grant on December 15, 2021. The RSUs vest in full after a three-year period and are subject to forfeiture if an executive officer terminates his or her employment with the Company, with the exception of the grants to Mr. Weisz and Mr. Cunningham, which will not be forfeited in the event of a termination due to retirement, but will continue to vest at the end of the three-year period.

Due to the uncertainty with three-year forecasting as a result of uncertainty due to the COVID-19 pandemic, our equity awards for 2021 were a combination of SARs and RSUs, with 50% consisting of SARs and 50% consisting of RSUs, based on grant date value. The amount of each named executive officer’s award was determined by considering market data and internal factors.

PHILOSOPHY

The Compensation Policy Committee has approved, and periodically reviews, compensation principles that form the basis of our compensation philosophy and reflect our belief that strong and consistent leadership is the key to long-term success in our industry. Accordingly, our program is designed around the following three principles:

 

 

Drive Stockholder Value: Executive officers should be paid in a manner that is primarily focused on driving stockholder value. Therefore, equity compensation is and has been a significant component of total pay opportunity for the named executive officers.

 

 

Motivate and Balance Short-term and Long-term Performance: Compensation should be designed to motivate executive officers to perform their duties in ways that would help achieve current year as well as longer-term objectives. This has been achieved by offering a mix of short-term cash-based and long-term equity-based incentives.

 

 

Retain Talent: The compensation program must be competitive in order to attract key talent from within and outside of our industry and retain key talent at costs consistent with market practice. We work to achieve this, in part, through our review of the market data and internal pay equity considerations described below in making compensation decisions. The Compensation Policy Committee seeks to establish compensation generally consistent with the median in total direct compensation, while also considering performance and scope of job.

 

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COMPENSATION PROGRAM PRINCIPLES AND GOVERNANCE

Pay for Performance is Key Compensation Program Principle

A large portion of the total pay opportunity for our named executive officers is performance based or tied to stock performance. This means that it is contingent upon achieving specific results that are essential to the Company’s short- and long-term success and growth in stockholder value. As described in more detail in the following pages, the performance-based components of the 2021 compensation program include annual and long-term incentives that are comprised of SARs and RSUs, temporarily shifting the mix to exclude performance units due to the uncertainty resulting from the COVID-19 pandemic. With the 2022 grants, the mix of equity was restored to the prior 2020 mix, which includes approximately 50% performance units, 30% SARs and 20% RSUs. The Compensation Policy Committee has not established a specific formula for the allocation of performance-based compensation components and instead retains the discretion to modify the allocation from year to year. The chart below reflects the percentage of each named executive officer’s total target compensation that was performance-based in 2021:

 

2021 Target Pay Matrix — CEO    2021 Target Pay Matrix — Other NEOs (Average)

 

 

LOGO

  

 

 

LOGO

Additional Principles and Corporate Governance Policies

Our executive compensation programs contain features that are intended to embody our compensation principles and promote strong executive compensation corporate governance.

 

 

We have a clawback policy applicable to incentive compensation paid to our executive officers and directors, which is in addition to the clawback provision that applies to equity awards under the Marriott Vacations Worldwide 2020 Equity Incentive Plan (the “2020 Equity Plan”) and the Marriott Vacations Worldwide Corporation Stock and Cash Incentive Plan (the “Prior Equity Plan” and, together with the 2020 Equity Plan, the “Equity Plans”).

 

 

We do not provide for a gross-up of excise taxes on any “parachute payments” that could become payable in connection with a change in control.

 

 

Executive officers are provided only limited perquisites and are not provided with tax gross-ups with respect to such perquisites.

 

 

The Equity Plans do not include an “evergreen” provision.

 

 

We cannot, without stockholder approval, “reprice” stock options or SARs by reducing the exercise price of such stock option or SAR, exchanging such stock option or SAR for a new award with a lower exercise price, or exchanging such stock option or SAR for cash (other than in connection with specified corporate transactions).

 

 

We do not provide “single trigger” change in control benefits, except with respect to equity awards which are not retained or replaced with substitute awards following a change in control.

 

 

We have stock ownership guidelines that require our Chief Executive Officer to own shares of our common stock (as determined under the guidelines) with a market value equal to five times base salary and other executive officers to own shares of our common stock with a market value equal to two to three times annual base salary. All but two of our executive officers were in compliance with these guidelines as of the end of 2021. The executive officers who were not in compliance with the guidelines were newly appointed on November 20, 2020, and October 16, 2021 and each has five calendar years, or by year end 2025 and 2026, respectively, to achieve target ownership.

 

 

Equity grants are made on a consistent schedule and are not made in anticipation of significant developments that may impact the price of our common shares. Annual grants are typically made during the first quarter, after the release of our earnings for the prior year and guidance for the current year, which is intended to ensure that we do not make equity grants when we have such material, non-public information.

 

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Our associates, officers and directors may not at any time engage in any form of derivative transactions (such as “short” sales or “option puts or calls”) in our securities.

 

 

Our associates, officers and directors are prohibited from including our securities in a margin account or pledging such securities as collateral for a loan.

 

 

We, as a practice, do not have employment agreements with any of our named executive officers or other executive officers. However, with the acquisition of ILG, we assumed an employment agreement for Jeanette E. Marbert, President, Exchange and Third-Party Management.

 

 

None of our named executive officers are entitled to guaranteed annual bonuses.

COMPENSATION PROCESS

Market Data

To assist in determining the levels of compensation for our named executive officers in 2021, Exequity LLP (“Exequity”), the Compensation Policy Committee’s compensation consultant, recommended an appropriate peer group for approval by the Compensation Policy Committee and management. Considerations for developing the peer group included company size as measured by revenues (generally one-half to two times the Company’s revenues) and market capitalization (companies with very low or very high market capitalization relative to the Company were excluded), industry and business model similarities, and trading on a major exchange. Human resources management analyzed market data collected by Exequity, including base salary and target short- and long-term incentive opportunities for each of the named executive officers.

The companies in the peer group used as the basis for 2021 compensation decisions, which are the same companies used as the basis for the Compensation Policy Committee’s 2020 compensation decisions, consisted of the following:

 

Peer Group Companies

 

Bloomin’ Brands, Inc.

Boyd Gaming Corporation

Brookdale Senior Living Inc.

Choice Hotels International, Inc.

Darden Restaurants, Inc.

Hilton Grand Vacations Inc.

Host Hotels & Resorts, Inc.

Hyatt Hotels Corporation

  

Norwegian Cruise Line Holdings Ltd.

Park Hotels & Resorts Inc.

Penn National Gaming, Inc.

Toll Brothers, Inc.

Travel+Leisure Co.

(formerly known as Wyndham Destinations, Inc.)

Vail Resorts, Inc.

Wyndham Hotels & Resorts, Inc.

Wynn Resorts, Limited

In addition, in part due to the fact that there are very few public company direct competitors, the Compensation Policy Committee determined that it was appropriate to consider the compensation practices of a general industry peer group as an additional reference point for its 2021 executive pay decisions. Accordingly, the Compensation Policy Committee considers the compensation practices of a general industry peer group consisting of forty companies in the consumer products industry that participated in Equilar’s Top 25 database (i.e., 20 consumer products companies with revenues greater and 20 consumer products companies with revenues less than the Company’s revenues).

The companies that met these objective criteria with revenues greater and less than the Company’s revenues consisted of the following:

 

Revenues Greater than the Company’s Revenues      Revenues Less than the Company’s Revenues

Advance Auto Parts, Inc.

Big Lots, Inc.

Burlington Stores, Inc.

Church & Dwight Co., Inc

DICK’S Sporting Goods, Inc.

Foot Locker, Inc.

Hilton Worldwide Holdings Inc.

Hyatt Hotels Corporation

Leggett & Platt, Incorporated

Levi Strauss & Co.

Mahwah Bergen Retail Group, Inc.

(formerly known as Ascena Retail Group, Inc.)

Newell Brands Inc.

Ralph Lauren Corporation

The Hershey Company

The J.M. Smucker Company

Tractor Supply Company

Ulta Beauty, Inc.

UnderArmour, Inc.

V.F. Corporation

Yum! Brands, Inc.

    

Abercrombie & Fitch Co.

American Eagle Outfitters, Inc.

Bloomin’ Brands, Inc.

Brunswick Corporation

Callaway Golf Company

Cedar Fair, L.P.

Columbia Sportswear Company

Domino’s Pizza, Inc.

Express, Inc.

Hilton Grand Vacations Inc.

Steelcase Inc.

The Aaron’s Company, Inc.

The Cheesecake Factory Incorporated

The E.W. Scripps Company

The New York Times Company

The Wendy’s Company

Tripadvisor, Inc.

Wolverine World Wide, Inc.

Travel + Leisure Co.

(formerly known as Wyndham Destinations, Inc.)

Zillow Group, Inc.

 

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Tally Sheets

On an annual basis, the Compensation Policy Committee reviews “tally sheets” prepared by management for each of the named executive officers. The tally sheet includes, among other things, total annual compensation, the value of unexercised or unvested equity compensation awards, and amounts payable upon termination of employment under various circumstances, including following a change in control. The Compensation Policy Committee did not recommend specific changes to the executive compensation program for 2021 in response to a review of tally sheets in 2021, although it used the tally sheet information as one data point when considering executive compensation matters.

Role of the Compensation Policy Committee

Our Compensation Policy Committee is responsible for reviewing and approving the Company’s executive compensation policies and plan designs, including compensation of our named executive officers. The Compensation Policy Committee considers various factors in determining compensation levels for named executive officers, including the officer’s responsibilities and performance, the effectiveness of our programs in supporting the Company’s short- and long-term strategic objectives, and overall financial performance. Additionally, our Compensation Policy Committee Chair, Dianna F. Morgan, with input from our Chairman, William J. Shaw, makes recommendations to the Compensation Policy Committee with respect to the compensation of our CEO, Mr. Weisz.

To this end, our Compensation Policy Committee conducts an annual review of executive officer pay levels, reviews market data provided by the independent consultant, and approves changes to program designs, based on an assessment of competitive market practice and emerging trends. Additionally, the Compensation Policy Committee evaluates the risks associated with the Company’s executive compensation programs.

Our Compensation Policy Committee approved the total compensation packages for each of the named executive officers, including base salary, annual bonus targets, actual bonuses earned, and equity awards.

Role of the Compensation Consultant

In 2021, the Compensation Policy Committee engaged Exequity to provide executive compensation consulting services. Exequity’s services to the Compensation Policy Committee have included updates on best practices and market trends in executive and director compensation, recommendations regarding executive and director compensation, and an independent review of compensation proposals by the Company’s senior management. Exequity attended meetings of the Compensation Policy Committee at the Committee’s request and was available to provide guidance as questions and issues arose. During 2021, Exequity did not perform any services for the Company other than in connection with providing advice and recommendations on executive and director compensation. The Compensation Policy Committee determined that Exequity is independent after consideration of the SEC independence factors.

Role of Management

At the request of the Compensation Policy Committee, the CEO presents individual pay recommendations for each of the named executive officers, other than himself. In forming his recommendations, he is advised by human resources management, including our Chief Human Resources Officer and our Senior Vice President, Global Rewards & HRIS, and the independent compensation consultant with regard to assessment of individual contributions, achievement of performance objectives and other qualitative factors. The Compensation Policy Committee considers these recommendations in approving the pay levels of each named executive officer. The CEO does not make recommendations concerning his own compensation.

The CEO and members of human resources management regularly attend Compensation Policy Committee meetings. Human resources management typically presents recommendations for changes to program designs and individual pay levels for executive officers, taking into consideration individual performance of each incumbent, appropriate benchmarking information and issues that may arise from an accounting, legal or tax perspective.

ANALYSIS OF EACH COMPENSATION ELEMENT

Base Salary

In February 2021, the Compensation Policy Committee approved the following base salaries for the named executive officers:

 

Name    2021 Base Salary      2020 Base Salary      Percent Change  

Mr. Weisz

   $ 1,000,000      $ 985,000        1.52

Mr. Geller

   $ 675,000      $ 631,000        6.97

Mr. Terry1

                          

Mr. Cunningham

   $ 510,000      $ 495,000        3.03

Mr. Miller

   $ 770,000      $ 733,000        5.05

Ms. Marbert

   $ 525,000      $ 510,000        2.94

 

1

Mr. Terry was promoted to the Executive Vice President and Chief Financial Officer effective October 16, 2021 and was not an executive officer during 2020 or the first nine and one-half months of 2021. Based on market analysis of the role, the Compensation Policy Committee approved the increase of his base pay to $475,000 effective October 16, 2021, an increase of 38.26% from his then current base pay of $343,565.

 

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In determining whether to make adjustments to base salaries, the Compensation Policy Committee considered market data, as well as internal factors, experience, time in position and internal pay equity, and subjective factors such as individual performance and future potential. No specific weightings were assigned to the factors considered. The Compensation Policy Committee expects to review base salaries for the named executive officers annually to determine whether base salary levels are commensurate with the officers’ responsibilities and the competitive market.

Bonuses and Incentives

Annual Bonuses

For 2021, due to the unpredictable impact of the COVID-19 pandemic on our business, the Compensation Policy Committee modified the performance period for the Bonus Plan, changing from the past practice of a calendar year period to two six-month periods. The Bonus Plan was intended to reward executives for achievement of pre-established financial objectives tied to 2021 business recovery and performance. The potential and actual awards under the Bonus Plan are reported in the Grants of Plan-Based Awards for Fiscal Year 2021 table and Summary Compensation Table, respectively.

The Compensation Policy Committee approved the following target awards as a percentage of base salary for the named executive officers:

 

Name    2021 Target     2020 Target     Percent Change  

Mr. Weisz

     150     150    

Mr. Geller

     100     100    

Mr. Terry1

     100     40     150

Mr. Cunningham

     90     90    

Mr. Miller

     90     80     13

Ms. Marbert

     90     90    

 

1

Effective October 16, 2021, Mr. Terry was promoted to the role of Executive Vice President and Chief Financial Officer. Based on market analysis of the role, the Compensation Policy Committee approved an increase of his then current target bonus potential from 40% to 100%. In 2021, the increased target opportunity is pro-rated for the portion of time Mr. Terry was the Executive Vice President and Chief Financial Officer during the second six-month performance period.

In determining the target award percentage for each named executive officer, as well as in determining the differences in the target award percentages among the named executive officers, the Compensation Policy Committee considered market data and internal factors, including pay equity with other officers, differences in responsibilities, and future potential. Threshold performance was required in order to pay 25 percent of such named executive officer’s target award and the maximum award for each named executive officer was 200 percent of such named executive officer’s target award.

For the period of January 1 – June 30, 2021 (“First Half 2021”), the Bonus Plan was solely tied to the achievement of Adjusted EBITDA target. For the period July 1 – December 31, 2021 (“Second Half 2021”), the Bonus Plan was tied to two financial objectives: Adjusted EBITDA and Total Revenue. In Second Half 2021, these financial objectives were weighted at 80% and 20%, respectively. These financial performance measures were selected because they are important indicators of the Company’s profitability and sustainability. Mr. Weisz and Mr. Geller developed the specific performance level percentages for these objectives, which were reviewed and approved by the Compensation Policy Committee.

For First Half 2021, Adjusted EBITDA was the sole performance criteria because it is reflective of the financial viability and success of the Company, particularly as it recovers from the COVID-19 pandemic. “Adjusted EBITDA” with respect to First Half 2021 means EBITDA for the first and second quarters of 2021 (as reported in the Company’s Report on Form 10-Q for the second quarter), excluding the impact of non-cash share based compensation expense, impairments, transaction costs, gains and losses on the disposal of assets, gains and losses on foreign currency exchange related activity, litigation charges and activity not associated with the Company’s on-going core operations. Adjusted EBITDA includes the impact of interest expense associated with the Company’s debt from the securitization of vacation ownership notes receivable. Adjusted EBITDA is a financial measure that is not prescribed by GAAP. Please refer to Appendix A for a reconciliation of Adjusted EBITDA to net income, which is the most directly comparable GAAP financial measure, as well as our reasons for presenting this measure. The Adjusted EBITDA target for First Half 2021 was set at $175 million, a level we believed to be achievable but not certain to be met.

For First Half 2021, the named executive officers were eligible to receive a bonus solely based on the achievement of the following Adjusted EBITDA targets:

 

Adjusted EBITDA Achievement Target    Payout as a Percent
of Target
 

Less than $122.5 million

     0

$122.5 million

     25

$175.0 million

     100

$218.75 million or more

     200

For Second Half 2021, the named executive officers were eligible to receive a bonus based on the achievement of the Adjusted EBITDA targets and the achievement of the Total Revenue targets, set forth below. For purposes of the Bonus Plan, “Total Revenue” means total revenue for the second half of 2021, excluding cost reimbursement revenues (calculated by subtracting the Company’s first half results reported on its second quarter Form 10-Q from the

 

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Company’s annual results as reported in our 2021 Form 10-K) less revenues from the consolidation of the property owners’ associations and the rental revenue reduction related to revenues from unsold inventory. The Adjusted EBITDA target was set at $350 million and the Total Revenue target was set at $1,549 million, both levels we believed to be achievable but not certain to be met.

 

Adjusted EBITDA Achievement Target   

Payout as a Percent

of Target

 

Less than $280.0 million

     0

$280.0 million

     25

$350.0 million

     100

$420.0 million or more

     200

 

Total Revenue Achievement Target   

Payout as a Percent

of Target

 

Less than $1,394.0 million

     0

$1,394.0 million

     25

$1,549.0 million

     100

$1,704.0 million or more

     200

For each of the financial measures, achievement falling between two of the stated performance achievement levels resulted in the payment for that portion of the bonus being interpolated between the corresponding bonus levels, except that there is no interpolation between 0% and 25%. Accordingly, there is no payout if achievement is below the threshold level of achievement of 25%.

For First Half 2021, Adjusted EBITDA was $218.5 million, or payout of 199.45% of the target bonus for the period, which resulted in the following payments for our named executive officers:

 

Name    First Half 2021
Bonus Payout
 

Mr. Weisz

   $ 1,495,889  

Mr. Geller

     673,150  

Mr. Terry

     135,205  

Mr. Cunningham

     457,742  

Mr. Miller

     691,101  

Ms. Marbert

     471,205  

For Second Half 2021, Adjusted EBITDA was $425.7 million and Total Revenue was $1,545 million, or payout of 179.57% of the target bonus for the period, which resulted in the following payments for our named executive officers:

 

Name    Second Half 2021
Bonus Payout
 

Mr. Weisz

   $ 1,346,742  

Mr. Geller

     606,034  

Mr. Terry

     249,255  

Mr. Cunningham

     412,103  

Mr. Miller

     622,195  

Ms. Marbert

     424,224  

Stock Awards

Stock Awards Granted in 2021

We expect that equity compensation awards will be granted to the named executive officers under the 2020 Equity Plan on an annual basis. With multi-year and, in some cases, performance-based vesting conditions, and the opportunity for long-term capital appreciation, the annual stock awards help us achieve our objectives of attracting and retaining key executive talent, linking named executive officer pay to long-term Company performance and aligning the interests of named executive officers with those of stockholders.

 

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The Compensation Policy Committee approved the following annual equity awards for 2021 for our named executive officers:

 

Name    2021 Award Value      2020 Award Value      Percent Change  

Mr. Weisz

   $ 5,500,000      $ 4,600,000        20

Mr. Geller

     2,000,000        1,500,000        33

Mr. Terry1

                  

Mr. Cunningham

     900,000        900,000       

Mr. Miller

     1,100,000        900,000        22

Ms. Marbert

     1,000,000        950,000        5

 

1

Effective October 16, 2021, Mr. Terry was promoted to the role of Executive Vice President and Chief Financial Officer and received an award with a grant date value of $250,000. In addition, while in his prior role, Mr. Terry received an annual equity award with a grant date value of $235,000. In connection with the promotion, he received a grant of equity awards as described in more detail below.

The amount of each named executive officer’s award, as well as the differences in the award amounts among the named executive officers, were determined by considering market data (as described above) and internal factors, including pay equity with other officers, differences in responsibilities, job performance, and future potential. The Compensation Policy Committee’s consideration of the external market pay practices of various companies discussed above under “Market Data” resulted in the determination to increase the value of the awards for Mr. Weisz, Mr. Miller and Mr. Geller. Total target direct compensation for Mr. Weisz was below market median following the increases in equity awards for 2021; all other named executive officers were at median. The awards are reflected in the Summary Compensation Table for 2021 and the Grants of Plan-Based Awards for Fiscal Year 2021. The value of the awards was allocated among SARs and RSUs as follows:

 

Type of Award   

Percentage of

2021 Award

  

Percentage of

2020 Award

 

SARs

   50%      30

RSUs

   50%      20

The allocations were set so as to advance the executives’ alignment with stockholders by increasing their equity ownership, while tying a portion of the awards to future stock price performance. The RSUs are time-based stock awards that focus on retention of the executives and SARs are granted to further align the executives’ and stockholders’ interests by requiring an increase in stock price in order for the executives to recognize value from the awards.

The economic volatility faced in 2021 and beyond required analysis and consideration to adjust the mix of equity awards to exclude performance-based three-year restricted stock units for the 2021 fiscal year only. The Company has returned to its traditional equity mix effective with the 2022 fiscal year. Equity awards granted March 2021 to the executive officers represent an even split between time-based RSUs and SARs. Our decision to make this change for 2021 was predicated on the inability to accurately predict one and three years of performance metrics. To mitigate the risk of making projections with respect to the metric in the midst of such economic uncertainty (which may result in a windfall to our executive officers), the Company believed that it was appropriate to grant equity awards solely in the form of RSUs and SARs, which, although time-based, continue to align executives’ interests with those of shareholders by keeping them dedicated to stock price appreciation.

In connection with Mr. Terry’s promotion to the role of Executive Vice President and Chief Financial Officer, he was awarded RSUs with a grant date value of $250,000 that will vest equally in four annual installments beginning one year from the grant date of November 16, 2021. The award is captured in the Grants of Plan Based Awards table.

The Compensation Policy Committee awarded the executive team a one-time equity grant on December 15, 2021 to address the economic volatility faced in 2020 and 2021, as well as expected volatility in 2022. The Company’s executives enacted several measures to mitigate the impact of the pandemic noted above, such as reopening resorts and sales centers and implementing safety protocols for associates, owners and guests. As a result of these actions, the Company returned to pre-pandemic levels of key metrics, including contract sales and EBITDA, by the end of third-quarter 2021. In recognition of their contributions to the Company’s response and recovery, delivering shareholder value through an increase in the Company’s stock price in excess of pre-pandemic pricing, and building a solid foundation for growth, and in order to retain key talent, the one-time equity grant was awarded. The RSUs vest in full after a three-year period and are subject to forfeiture if an executive officer terminates his or her employment with the Company, with the exception of the grants to Mr. Weisz and Mr. Cunningham,which will not be forfeited in the event of a termination due to retirement, but will continue to vest at the end of the three-year period.

Performance Units Vested in 2021

Following the end of 2021, each of the named executive officers received shares upon the vesting of the Performance Units granted in 2019. These performance units represented the right to receive shares of our common stock at the end of the performance period beginning January 1, 2019 and ending December 31, 2021, in an amount determined based on the Company’s cumulative achievement over the performance period with respect to two performance objectives: Adjusted EBITDA and Adjusted ROIC, each weighted equally. The targets were set at levels we believed to be achievable but not certain to be met.

 

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In December 2021, due to circumstances caused by the COVID-19 pandemic, which had an impact on the financial performance of the Company, the Compensation Policy Committee exercised its discretion and approved modifications to the performance period that began on January 1, 2019 and ended on December 31, 2021 so that rather than evaluating Company performance based on one three-year performance period, performance was evaluated based on three separate annual performance periods, one for each of the 2019, 2020 and 2021 fiscal years of the Company. The Compensation Policy Committee determined that such modification was necessary to recognize management’s response to the pandemic, including efforts to conserve cash, reopen resorts and sales centers, implement safety protocols, manage return to office and related ongoing safety issues for associates, among other measures, and to retain executive officers, who were particularly vulnerable to recruitment efforts from companies not in the hospitality business. The cumulative Adjusted EBITDA and Adjusted ROIC goals originally established for the three-year performance period resulted in achievement of 0% of the target Performance Units. The equal weighting of the three separate annual performance periods, with 2020 and 2021 achievement at zero percent, yielded an achievement of 33.18% of the target.

Achievement based upon the three performance periods is as follows:

 

     2019     2020     2021     2019-2021  
Criteria   

Actual

Performance

    

RSUs earned

(as a percent

of Target)

   

Actual

Performance

    

RSUs earned

(as a percent

of Target)

   

Actual

Performance

    

RSUs earned

(as a percent

of Target)

   

Performance

Period Average

 

Adjusted EBITDA

   $ 762,000,000        92.85   $ 235,000,000        0.0   $ 590,000,000        0.0     58.94

Adjusted ROIC

     10.6%        106.25     2.0%        0.0     7.4%        0.0     52.56

The actual award achievement, based on the straight average of the three one-year performance periods, is as follows:

 

Criteria    Unadjusted Total RSUs earned
(as a percent of Target)
1
    Adjusted Total RSUs earned
(as a percent of Target)
1
 

Adjusted EBITDA

     0.00     30.95

Adjusted ROIC

     0.00     35.42

Total Award Achievement

     0.00 %      33.18 % 

 

1

The total number of RSUs earned is equal to: (Target Number of RSUs) multiplied by 50% multiplied by (percent of Target earned with respect to the Adjusted EBITDA criteria) plus (Target Number of RSUs) multiplied by 50% multiplied by (percent of Target earned with respect to the Adjusted ROIC objective).

As a result of such performance, the named executive officers received the following numbers of shares: Mr. Weisz, 6,578 shares; Mr. Geller, 2,349 shares; Mr. Cunningham, 1,409 shares; Mr. Miller, 1,096 shares; and Ms. Marbert, 1,323 shares. Mr. Terry was not an executive officer of the Company at the time of the 2019 grant.

Following the September 2018 acquisition of ILG, in February 2019 the Compensation Policy Committee approved the grant of performance units to executive officers with a three-year vesting period ending on December 31, 2021. Executive officers were eligible to earn between 0% and 250% of the target based on the achievement of specified transformation synergy savings for the department headed by the respective executive officers. Transformation synergy savings were reviewed by a Board sub-committee comprised of the Board Chair and both the current and immediate past Chairs of the Audit Committee. Target transformation synergy savings for the Company, on an Adjusted EBITDA basis, was $105 million, with the maximum award payable if the Company achieved $140 million of savings. Ongoing run rate savings, on an Adjusted EBITDA basis, as a result of the acquisition was $158 million, or 112.86% of target achievement, with each department achieving the stated maximum achievement, resulting in payout of 250% of the targeted amount for each executive officer. COVID related impact adjustments are not included or considered in the run-rate savings. The value of the vested awards is included in the Options Exercised and Stock Vested During Fiscal Year 2021 table.

2022 Compensation Actions in Response to COVID-19 Pandemic

The COVID-19 pandemic is continuing to adversely affect our financial performance in 2022. In response to these ongoing economic challenges, we have enacted several measures to continue to mitigate the impact of the pandemic on the Company’s financial performance. We expect these actions to better position the Company for longer-term recovery and growth while continuing to preserve our cash and liquidity. Annual equity awards for Named Executive Officers and other executive officers returned to the pre-COVID distribution between restricted stock units, stock appreciation rights and performance units. Short-term incentives (annual management bonus plan) for Named Executive Officers and other executive officers partially returned to pre-pandemic design, substantially financially focused on Company Adjusted EBITDA and Total Revenue, with a small portion of the incentive based upon associate engagement.

Other Compensation

Perquisites

In 2021, we offered minimal perquisites consisting of only a limited number of compensatory room nights, a minimal executive physical benefit and a status upgrade in the Marriott Bonvoy program. The value of these benefits was included in the executives’ wages for tax purposes, and we did not provide tax gross-ups to the executives with respect to these benefits. The Company owns a fractional interest in a corporate jet to support the conduct of its business. Executives are only permitted to utilize the jet for personal purposes if approved by the Company’s CEO and the executive pays the hourly costs of such flight.

 

 

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Other Benefits

Named executive officers can participate in the same plans and programs offered to all our eligible employees. Some of these benefits were paid for by the executives, such as elective deferrals under the Marriott Vacations Worldwide 401(k) Retirement Savings Plan (the “401(k) Plan”) or the Marriott Vacations Worldwide Corporation Deferred Compensation Plan (the “MVW Deferred Compensation Plan”), vision coverage, long-term disability, group life and accidental death and dismemberment insurance, and health care and dependent care spending accounts. Other benefits were paid for or subsidized by us, such as any company match under the 401(k) Plan, any employer credits under the MVW Deferred Compensation Plan, certain group medical and dental benefits, short-term disability, business travel accident insurance and tuition reimbursement.

Long-Term Disability Plan

Our named executive officers and approximately 500 other associates are eligible to participate in the Marriott Vacations Worldwide Corporation Executive Long-Term Disability Plan (the “LTD Plan”). The purpose of the LTD Plan is to improve the ability of the Company to attract and retain executive and senior level associates by providing such associates with enhanced long-term disability insurance. The LTD Plan is subject to certain provisions of the Employee Retirement Income Security Act of 1974, as amended.

The LTD Plan consists of two parts: (1) a group long-term disability policy (the “Group Policy”) that pays, after a 180-day elimination period, 60 percent of eligible compensation, which initially consists of base pay, bonus and incentive compensation (“Eligible Compensation”), capped at $10,000 per month, to a specific age, which initially is age 65 (the “Limiting Age”), the entire cost of which is paid by the Company; and (2) an individual disability insurance policy (the “Individual Policy”) that pays 75 percent of Eligible Compensation up to $10,000 per month, to the Limiting Age. We pay 100% of the premium cost required for the Individual Policy for our named executive officers and pay for the first $1,000 of coverage under the Individual Policy for other participants. The right to receive any payment under the Group Policy will cease upon termination of employment. The Individual Policy is portable; the participant may continue coverage by paying the full premiums after termination of employment. The total maximum benefit amount for the combination of the two parts of the LTD Plan is $20,000 per month or $240,000 per year.

Life Insurance

We pay for life insurance with a payout to designated beneficiaries on death for Mr. Weisz in the amount of two times his base salary (up to a maximum of $1.5 million), and for each other named executive officer in the amount of such officer’s base salary (up to a maximum of $750,000).

401(k) Plan

Our named executive officers are eligible to participate in our 401(k) Plan on substantially the same basis as our other associates. Participants in the 401(k) Plan may contribute a portion of their compensation to the plan each year. Our highly compensated employees, including the named executive officers, may be subject to limits on the amounts of their contributions to the plan that are not applicable to non-highly compensated employees to the extent required by applicable tax law. We determine on an annual basis whether to make matching employer contributions, which will not exceed six percent of the participant’s eligible compensation, or such other limits that are imposed by applicable tax law. Any employer contributions that we made to the 401(k) Plan accounts of the named executive officers for 2021 are shown in the “All Other Compensation” column of the Summary Compensation Table below.

Deferred Compensation

Our named executive officers and approximately 1,100 other associates are eligible to participate in the MVW Deferred Compensation Plan. In addition, some of our named executive officers have balances under the Marriott International, Inc. Executive Deferred Compensation Plan (“Marriott Deferred Compensation Plan”), in which many of them were able to participate prior to the Spin-Off from Marriott International in 2011 (the “Spin-Off”).

We provide the MVW Deferred Compensation Plan because the Compensation Policy Committee wishes to permit certain of our employees to defer the obligation to pay taxes on compensation and bonuses that they are entitled to receive. The MVW Deferred Compensation Plan permits them to do this, while also receiving interest on deferred amounts. We believe that providing this benefit is important as a retention and recruitment tool as many of the companies with which we compete for executive talent provide a similar plan for their senior employees.

Under the terms of the MVW Deferred Compensation Plan, each participant may elect to defer receipt of up to 80 percent of his or her base salary, bonuses, non-equity incentive plan compensation and/or commissions until such future date as he or she elects in accordance with the terms of the MVW Deferred Compensation Plan. The Company may credit participants’ accounts with additional amounts, referred to as employer credits, in an amount equal to any matching contributions that the participant did not receive for a year under the 401(k) Plan, or any successor plan thereto, due to the participant’s election to defer amounts under the MVW Deferred Compensation Plan. In addition, the Company may, in its sole discretion, credit participants’ accounts with additional employer credits which will vest at a rate of 25 percent per year on the first four anniversaries of the date the discretionary employer credit was allocated to the participant’s account, provided that the participant remains in continued service with the Company. On a participant’s separation from service, unvested discretionary employer credits are generally forfeited. Upon a change in control of the Company, a participant’s death, or a participant’s retirement after reaching age 55 and completing ten continuous years of service, all employer credits will immediately vest in full.

A participant in the MVW Deferred Compensation Plan may elect to receive his or her deferred amounts and vested employer credits in a lump sum or in installments over five, ten, fifteen or twenty years at either a separation from service or upon any of the first five anniversaries of a separation from service.

 

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Alternatively, a participant may elect to receive his or her deferred amounts and vested employer credits in a lump sum in January of a specified year, so long as employer credits are deferred for at least four years and all other amounts are deferred for at least three years. The obligations under the MVW Deferred Compensation Plan are not funded by the Company, and therefore participants have an unsecured contractual commitment from us to pay the amounts due under the MVW Deferred Compensation Plan. When payments are due under the MVW Deferred Compensation Plan, the cash will be distributed from our general assets.

For 2021, participants were able to select a fixed rate of return of 3.5 percent or a rate of return based on various market-based investment alternatives, such as mutual funds with various investment profiles, and were also able select such a rate for their existing account balances. Participants were not limited to minimum elections in the fixed rate of return. To support our ability to meet our obligations under the MVW Deferred Compensation Plan, we acquired insurance on the lives of certain participants in the MVW Deferred Compensation Plan, the proceeds of which are payable to a trust with the Company as grantor. For 2021, participants may select a rate of return based on market-based investment alternatives for up to 100 percent of their contributions and existing balances.

Earnings under the MVW Deferred Compensation Plan or the Marriott Deferred Compensation Plan that were credited at a fixed rate of interest in excess of 120 percent of the applicable federal long-term rate are reported in the Change in Pension Value and Nonqualified Deferred Compensation Earnings column of the Summary Compensation Table.

Employee Stock Purchase Plan

The Marriott Vacations Worldwide Corporation Employee Stock Purchase Plan (the “ESPP”) is intended to provide the Company’s eligible employees, including our named executive officers, with an opportunity to participate in the Company’s success by permitting them to acquire an ownership interest in the Company through periodic payroll deductions that will be applied towards the purchase of shares of our common stock at a five percent discount from the market price.

Change in Control Arrangements

Our named executive officers are participants in the Marriott Vacations Worldwide Corporation Change in Control Severance Plan (the “Change in Control Plan”). Adoption of the Change in Control Plan was intended to maximize stockholder value by retaining key executives through the closing of a Change in Control (as defined below), and to motivate executives to drive business success independent of the possible occurrence of a Change in Control. All of our executive officers are eligible to participate in the Change in Control Plan. Under the Change in Control Plan, the receipt of benefits is subject to a “double trigger,” under which benefits, including the acceleration of vesting and/or settlement of equity and cash awards, are available only if the participant’s employment is terminated in connection with the Change in Control unless the awards are not assumed in connection with the Change in Control, in which case a single trigger applies. A “change in control” occurs if there is a consummation of certain acquisition, merger, sale, liquidation or similar events or there is a change in a majority of Board members as described in the Change in Control Plan (a “Change in Control”).

Under the terms of the Change in Control Plan, and subject to the conditions thereof, an executive officer who participates in the Change in Control Plan will receive severance benefits if his or her employment is terminated involuntarily by the Company or any of its affiliates, other than due to Cause, Total Disability (as those terms are defined in the Change in Control Plan), or death, or is terminated by the executive officer for Good Reason (as defined in the Change in Control Plan), in each case, within two years following a Change in Control of the Company (a “Termination”). Provided that the executive officer executes a waiver and release of claims in favor of the Company, he or she will be entitled to the following severance benefits: (1) a cash severance payment, payable in a lump sum, equal to two times (or three times, in the case of the Chief Executive Officer of the Company) the sum of his or her Base Salary and Target Bonus (as those terms are defined in the Change in Control Plan); (2) twenty-four months (or thirty-six months, in the case of the Chief Executive Officer of the Company) of Company-subsidized medical, dental and life-insurance coverage for such executive officer and his or her spouse and dependents, at the same benefit level as provided to the executive immediately prior to the Change in Control, or the cash equivalent of the present value of such coverage; (3) any unpaid bonus as of the Termination date for any previously-completed fiscal year; and (4) a pro-rata bonus for the fiscal year in which the executive officer’s employment is terminated.

In addition to receipt of the severance benefits described above, upon Termination, an executive officer’s stock options and other equity-related compensation will be treated as follows: (1) all restricted stock, RSUs or other share-based awards in a form substantially similar to restricted stock or RSUs will become fully vested as of the Termination date; (2) all unvested or unexercisable options, SARs or other share-based awards in a form substantially similar to options or SARs will become fully vested and exercisable until the earlier of the end of (a) their original term or (b) 12 months (or in the case of certain approved retirees, five years) following the Termination date; and (3) all of the executive officer’s other cash performance units or other share-based awards subject to performance-based vesting criteria will be deemed to be fully vested as of the Termination date, and will be paid immediately thereafter based on a presumed achievement of target levels of performance. However, in the event that no substitute awards, shares or other equity interests are available as of the Change in Control, the participant will become fully vested in his or her awards as of the Change in Control date, and all awards will be immediately distributed or paid, or, in the case of options and SARs, will become fully exercisable. In the discretion of the Compensation Policy Committee, distributions may be made in the form of a cash payment equal in amount to the value of the shares distributed or, in the case of options or SARs, the intrinsic value of such awards.

Any payment otherwise due under the Change in Control Plan will be reduced if necessary so that the payment will not constitute a “parachute payment” under Section 280G of the Internal Revenue Code. The Change in Control Plan does not provide for a gross-up of excise taxes on such “parachute payments.”

 

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Clawbacks

Under our clawback policy, which is in addition to the clawback provision that applies to equity awards issued under the Equity Plans in the event of certain restatements of our consolidated financial statements, the Board may recoup compensation received by a named executive officer who engaged in certain misconduct that contributed to the need for the restatement. Compensation that is based on our achievement of specified financial results, including performance units, may be recouped to the extent such compensation would have been lower had it been determined or calculated based on the financial results as restated. In addition, the Board may recoup any compensation received by a named executive officer who has engaged in conduct that violates our Business Conduct Guide or in willful misconduct or fraud that causes harm to the Company. Compensation received up to three years prior to the restatement or conduct and after the date of adoption of the policy is subject to potential recoupment under the policy.

Under the Equity Plans we have the authority to limit or eliminate the ability of any executive to exercise options and SARs or to receive a distribution of our common stock under RSUs or other stock awards if the executive engaged in criminal or tortious conduct that was injurious to us or engaged in competition with us.

Stock Ownership Guidelines

Under the stock ownership guidelines adopted by the Compensation Policy Committee, named executive officers are to achieve the following levels of ownership of our common stock (as a multiple of base salary rate as of the last day of the fiscal year for which compliance is being evaluated):

 

Officer    Level of Ownership

Chief Executive Officer

   Five times base salary

President

   Three times base salary

Executive Vice President and Chief Financial Officer

   Three times base salary

Other named executive officers

   Two times base salary

For purposes of determining compliance with the guidelines, the following are considered shares owned by the named executive officer: shares owned by the named executive officer and his or her spouse; shares held by a trust any beneficiaries of which are the named executive officer or his or her family members; shares held jointly with others; restricted stock awards; restricted stock unit awards; and share equivalents deferred in accordance with our plans. Options, SARs and performance units are not considered owned by the named executive officer.

The Compensation Policy Committee receives an annual report of the ownership achieved by each named executive officer as of the end of the fiscal year, with the achievement level determined by reference to the average of the closing prices of our common stock for the 20 trading days ending on the last trading day of the fiscal year. The Compensation Policy Committee will determine the action to be taken for failure to comply, which action may include (but is not limited to), requiring all or a portion of a named executive officer’s annual bonus to be paid in shares, or requiring retention of shares received upon exercise of stock options or SARs or of shares earned upon the vesting of performance units. All but two of our executive officers were in compliance with these guidelines as of the end of 2021. The executive officers who were not in compliance with the guidelines were newly appointed to their current roles on November 30, 2020 and October 16, 2021, and each has five calendar years, or by year-end 2025 and 2026, respectively, to achieve target ownership.

Pledging and Derivative Transactions

Our associates and officers are prohibited from including Marriott Vacations Worldwide stock or other securities in a margin account or pledging such securities as collateral for a loan. We also have a policy that prohibits all associates and officers from shorting the sale of our stock or securities, or from buying, selling, writing or otherwise entering into any other “derivative” transaction related to our stock or securities, including options, warrants, puts, calls, and similar rights.

Risk Considerations

The Compensation Policy Committee reviewed a risk assessment to determine whether the amount and components of compensation for our employees and the design of compensation programs might create incentives for excessive risk-taking by our employees. The Compensation Policy Committee concluded that our compensation programs do not present risks that are reasonably likely to have a material adverse effect on the Company.

Consideration of Prior Stockholder Advisory Vote to Approve Executive Compensation

At our 2021 Annual Meeting of Stockholders, our stockholders voted with respect to an advisory resolution on our executive compensation, and 98.97% of the shares voted at the meeting (exclusive of broker non-votes) were voted in favor of the approval of the compensation of our named executive officers as disclosed in the proxy statement for that Annual Meeting. The Compensation Policy Committee considered this support, as well as the other factors discussed in this Compensation Discussion and Analysis, in retaining the fundamental characteristics of our executive compensation program for 2021, and did not make any specific changes to the program as a result of the stockholder vote.

 

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Employment Agreements

We, as a practice, do not have employment agreements with any of our executive officers, including our named executive officers. However, with the acquisition of ILG in 2018, we assumed an employment agreement for Jeanette E. Marbert, President, Exchange and Third-Party Management.

REPORT OF THE COMPENSATION POLICY COMMITTEE

The Compensation Policy Committee, which is composed solely of independent members of the Board, assists the Board in fulfilling its responsibilities relating to executive compensation. The Compensation Policy Committee is responsible for overseeing compensation programs that enable the Company to attract, retain and motivate executives capable of establishing and implementing business plans in the best interests of the stockholders. The Compensation Policy Committee, on behalf of and in certain instances subject to the approval of the Board, reviews and approves compensation programs for certain senior officer positions. In this context, the Compensation Policy Committee reviewed and discussed with management the Company’s Compensation Discussion and Analysis required by Item 402(b) of SEC Regulation S-K. Following the reviews and discussions referred to above, the Compensation Policy Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.

 

Members of the Compensation Policy Committee:
Dianna F. Morgan, Chair
Lizanne Galbreath
Raymond L. Gellein, Jr.
Thomas J. Hutchison III
Stephen R. Quazzo

 

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EXECUTIVE COMPENSATION TABLES AND DISCUSSION

 

SUMMARY COMPENSATION TABLE

The following Summary Compensation Table shows the compensation we paid in fiscal years 2021, 2020 and 2019 to our Named Executive Officers. Mr. Terry was promoted to Executive Vice President and Chief Financial Officer effective October 16, 2021 and was not an executive officer the first nine and one-half months of 2021.

 

Fiscal Year    Salary1      Bonus      Stock
Awards
2
     Option/SAR
Awards
2
     Non-Equity
Incentive Plan
Compensation
3
     Change in Pension
Value And Nonqualified
Deferred Compensation
Earnings
4
     All Other
Compensation
5
     Total  

Stephen P. Weisz

Chief Executive Officer

 

 

2021

   $ 1,000,000      $      $ 6,532,668      $ 2,750,017      $ 2,842,631      $ 76,703      $ 21,918      $ 13,223,937  

2020

     699,712               3,942,939        1,379,988               79,763        31,607        6,134,009  

2019

     955,000               5,190,073        1,260,008        1,193,042        17,843        41,310        8,657,276  

John E. Geller, Jr.

President

 

 

2021

     675,000               2,368,878        999,980        1,279,184        12,336        25,347        5,360,725  

2020

     477,014               1,321,060        449,991               11,560        20,713        2,280,338  

2019

     612,000               1,749,920        449,991        485,163        2,642        25,807        3,325,523  

Anthony E. Terry

Executive Vice President and Chief Financial Officer

 

 

2021

     366,530               683,569        93,978        384,460        10,931        15,491        1,554,959  

R. Lee Cunningham

Executive Vice President and Chief Operating Officer—Vacation Ownership

 

 

2021

     510,000               1,121,180        450,034        869,845        22,246        15,810        2,989,115  

2020

     374,481               795,606        269,989               23,587        18,236        1,481,899  

2019

     480,000               1,230,041        270,006        372,708        5,557        21,414        2,379,726  

Brian E. Miller

President, Vacation Ownership

 

 

2021

     770,000               1,272,027        550,017        1,313,296        39,471        26,675        3,971,486  

2020

     561,943               910,536        269,989               39,515        22,122        1,804,105  

2019

     711,000               1,090,021        210,001        468,031        8,600        26,388        2,514,041  

Jeanette E. Marbert

President, Exchange and Third-Party Management

 

 

2021

     525,000               1,207,755        499,990        895,429        240        21,308        3,149,722  

2020

     366,808               629,973        269,989                      17,685        1,284,455  

 

1 

This column reports all amounts earned as salary during the fiscal year, whether paid or deferred under employee benefit plans.

 

2 

The value reported for Stock Awards and Option/SAR awards is the aggregate grant date fair value of the awards granted in the fiscal year as determined in accordance with accounting guidance for share-based payments, although we recognize the expense of the awards for financial reporting purposes over the service period of the awards. The assumptions for making the valuation determinations are set forth in Footnote 18, “Share-Based Compensation,” of the Notes to our Consolidated Financial Statements included in the 2021 Form 10-K. For additional information on these awards, see the Grants of Plan-Based Awards for Fiscal Year 2021 table below. The value reported for the Performance Units in 2020 and 2019 is the grant date value assuming performance at the target level, which was the probable outcome of the performance conditions as of the grant date. The values reported for the 2020 Stock Awards have been updated to include the incremental fair value related to the modification to the 2018-2020 Performance Units in 2020 as discussed in the 2020 proxy statement. Grant date fair value of the awards to include the incremental fair value related to the modification of the 2018 Performance Units as discussed in the Company’s 2020 proxy statement. 2021 Stock Awards represent the aggregate grant date fair value of awards including the incremental fair value related to the modification of the 2019 Performance Units, as discussed under Performance Units Vested in 2021.

 

3 

This column reports all amounts earned under the bonus plan and sales incentive plan in effect for such fiscal year, whether paid or deferred under other employee benefit plans. Amounts earned under a bonus plan during a fiscal year were paid in the first quarter of the following fiscal year except for 2021 which was split into two six (6) month plans.

 

4 

The values reported equal the excess of the return on amounts credited to accounts in the MVW Deferred Compensation Plan and the Marriott Deferred Compensation Plan at a fixed rate of return over 120 percent of the applicable federal long-term rate, as discussed below under “Nonqualified Deferred Compensation for Fiscal Year 2021.”

 

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5 

All Other Compensation for 2021 consists of company contributions to the 401(k) Plan ($9,788 for each named executive officer); company contributions to the MVW Deferred Compensation Plan ($11,231 for Mr. Weisz; $15,157 for Mr. Geller; $5,645 for Mr. Terry; $5,718 for Mr. Cunningham; $16,437 for Mr. Miller; and $11,207 for Ms. Marbert); and premiums for an insurance policy on the life of each named executive officer ($900 for Mr. Weisz; $403 for Mr. Geller; $59 for Mr. Terry; $305 for Mr. Cunningham; $450 for Mr. Miller; and $314 for Ms. Marbert).

Grants of Plan-Based Awards for Fiscal Year 2021

The following table shows the plan-based awards granted to the named executive officers in 2021.

 

               

 

Estimated Possible Payouts Under
Non-Equity Incentive Plan Awards
3

   

Estimated Possible Payouts

Under Equity Incentive Plan  Awards

    All
Other
Stock
Awards:
Number
of Shares
of Stock
or Units
    All Other
Options/
SAR
Awards:
Number of
Securities
Under-
lying
Options/
SARs
    Exercise
or Base
Price
4
    Grant Date
Fair Value of
Stock and
Option/ SAR
Awards
5
 
Award Type1   Grant
Date
2
    Approval
Date
2
   

Threshold

$

   

Target

$

   

Maximum

$

   

Threshold

#

   

Target

#

   

Maximum

#

 
S. Weisz                        

Bonus

              $ 375,000     $ 1,500,000     $ 3,000,000                                   $     $  

Performance

    12/9/2021       12/9/2021                               6,578                               1,032,581  

SARs

    3/1/2021       2/18/2021                                                 38,919       173.875       2,750,017  

RSUs

    3/1/2021       2/18/2021                                           16,256                   2,750,060  

RSUs

    12/15/2021       12/10/2021                                           18,865                   2,750,027  
J. Geller                        

Bonus

                168,750       675,000       1,350,000                                            

Performance

    12/9/2021       12/9/2021                               2,350                               368,892  

SARs

    3/1/2021       2/18/2021                                                 14,152       173.875       999,980  

RSUs

    3/1/2021       2/18/2021                                           5,911                   999,976  

RSUs

    12/15/2021       12/10/2021                                           6,860                   1,000,010  
A. Terry                        

Bonus6

                50,363       201,427       402,834                                            

Performance

    12/9/2021       12/9/2021                               272                               42,697  

SARs

    3/1/2021       2/18/2021                                                 1,330       173.875       93,978  

RSUs

    3/1/2021       2/18/2021                                           833                   140,920  

RSUs

    11/16/2021       10/12/2021                                           1,526                   249,950  

RSUs

    12/15/2021       12/10/2021                                           1,715                   250,002  
R. Cunningham                        

Bonus

                114,750       459,000       918,000                                            

Performance

    12/9/2021       12/9/2021                               1,409                               221,178  

SARs

    3/1/2021       2/18/2021                                                 6,369       173.875       450,034  

RSUs

    3/1/2021       2/18/2021                                           2,660                   449,998  

RSUs

    12/15/2021       12/10/2021                                           3,087                   450,004  
B. Miller                        

Bonus

                173,250       693,000       1,386,000                                            

Performance

    12/9/2021       12/9/2021                               1,096                               172,044  

SARs

    3/1/2021       2/18/2021                                                 7,784       173.875       550,017  

RSUs

    3/1/2021       2/18/2021                                           3,251                   549,978  

RSUs

    12/15/2021       12/10/2021                                           3,773                   550,005  
J. Marbert                        

Bonus

                118,125       472,500       945,000                                            

Performance

    12/9/2021       12/9/2021                               1,323                               207,678  

SARs

    3/1/2021       2/18/2021                                                 7,076       173.875       499,990  

RSUs

    3/1/2021       2/18/2021                                           2,956                   500,072  

RSUs

    12/15/2021       12/10/2021                                           3,430                   500,005  

 

1 

“Bonus” refers to our Bonus Plan in which our named executive officers participated. “SARs” and “RSUs” refers to SARs and RSUs, respectively, granted under the 2020 Equity Plan with respect to equity awards granted in March 2021 and December 2021. Effective October 16, 2021, Mr. Terry was promoted to the role of Executive Vice President and Chief Financial Officer, and RSUs were granted under the 2020 Equity Plan in on November 16, 2021 in connection with his promotion. “Performance” refers to the modification of the 2019-2021 Performance Units as described in more detail in footnote 5 to this table.

 

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2 

“Grant Date” applies to equity awards reported in the “Estimated Possible Payouts Under Equity Incentive Plan Awards,” “All Other Stock Awards” and “All Other Options/SAR Awards” columns. The Compensation Policy Committee approved grants of SARs and annual RSUs for the named executive officers on February 18, 2021, and the grant date of these awards was March 1, 2021. The Compensation Policy Committee approved grants of RSUs for the named executive officers on December 10, 2021, and the grant date of these awards was December 15, 2021.

 

3 

These columns are intended to include potential payouts corresponding to the achievement of the threshold, target and maximum performance objectives under the Bonus Plan.

 

4 

The awards were granted with an exercise or base price equal to the average of the high and low stock price on the NYSE on the date of grant.

 

5 

The value reported for Equity Incentive Plan Awards, Stock Awards and Option/SAR Awards is the aggregate grant date fair value of the awards granted in 2021 as determined in accordance with accounting standards for share-based payments. There were no Performance Units granted in 2021; however, the Performance Units granted in 2019 were modified in 2021. The value reported for the Performance Units is the modified grant date fair value assuming performance at the probable outcome of performance conditions is achieved. The assumptions for making the valuation determinations are set forth in Footnote 19, “Share-Based Compensation,” of the Notes to our annual Consolidated Financial Statements included in the 2021 Form 10-K.

 

6 

Effective October 16, 2021, Mr. Terry was promoted to the role of Executive Vice President and Chief Financial Officer. Concurrent with the promotion, the Compensation Policy Committee approved an increase of his then current target bonus potential from 40% to 100%. For the period prior to October 16, 2021, the estimated bonus threshold is $27,528; target is $110,082; and maximum is $220,144. Effective October 16, 2021, the estimated bonus threshold is $22,835; target is $91,345; and maximum is $182,690.

The Grants of Plan-Based Awards table reports the potential dollar value of cash incentive awards under the Bonus Plan at their threshold, target and maximum achievement levels, and the number and grant date fair value of SARs and RSUs granted under the 2020 Equity Plan, in each case granted to each named executive officer during the 2021 fiscal year. For cash incentives, this table reports the range of potential amounts that could have been earned by the executive under the Bonus Plans for 2021, whereas the Non-Equity Incentive Plan Compensation column in the Summary Compensation Table reports the actual value earned by the executive for 2021.

Annual RSU and SAR grants under the 2020 Equity Plan typically vest in four equal annual increments beginning approximately a year after the grant date, contingent on continued employment. Even when vested, an executive could lose the right to exercise or receive a distribution of any outstanding stock awards if the executive’s employment terminated due to serious misconduct as defined in the Equity Plans, or if it is determined that the executive has engaged in competition or has engaged in criminal conduct or other behavior that was actually or potentially harmful. These awards do not accrue or pay cash dividends and do not bear voting rights until they vest (in the case of RSUs) or are exercised (in the case of SARs) and shares are issued to the grantee. The Compensation Policy Committee awarded the executive team an equity grant on December 15, 2021. The RSUs vest in full after a three-year period and are subject to forfeiture if an executive officer terminates his or her employment with the Company, with the exception of the grants to Mr. Weisz and Mr. Cunningham, which will not be forfeited in the event of termination due to retirement, but will continue to vest at the end of the three-year period.

For information regarding treatment of the equity awards upon a termination of employment, see “Potential Payments Upon Termination or Change in Control.”

Outstanding Equity Awards at 2021 Fiscal Year-End

The following table shows information about outstanding Performance Units, SARs and RSUs with respect to our common stock as of December 31, 2021, our fiscal year-end. The market values are based on the closing price of our common stock on the NYSE on December 31, 2021, the last trading day of our fiscal year, which was $168.98.

 

            Option Awards      Stock Awards  
Grant Date     Award
Type
1
     Number of
Securities
Underlying
Unexercised
Options/SARs
Exercisable/
Unexercisable
2
     Option/
SAR
Exercise
Price
     Option/ SAR
Expiration
Date
     Number of
Shares or
Units of
Stock
That Have
Not
Vested
3
     Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
     Equity Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other Rights
That Have Not
Vested (#)
     Equity Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other Rights
That Have Not
Vested ($)
 
S. Weisz                          

3/2/2020

     Performance 4                                                12,663 4       2,139,709 5 

3/2/2015

     VAC SARs        27,227              77.42        3/2/2025                              

2/29/2016

     VAC SARs        55,831              61.71        2/28/2026                              

2/27/2017

     VAC SARs        35,831              97.53        2/27/2027                              

3/1/2018

     VAC SARs        18,100       6,034        143.38        3/1/2028                              

3/4/2019

     VAC SARs        21,807       21,807        100.52        3/4/2029                              

3/2/2020

     VAC SARs        11,643       34,931        96.82        3/2/2030                              

3/1/2021

     VAC SARs              38,919        173.88        3/1/2031                              

3/1/2018

     VAC RSUs                                   1,614        272,734                

3/4/2019

     VAC RSUs                                   5,458        922,293                

3/2/2020

     VAC RSUs                                   7,515        1,269,885                

3/1/2021

     VAC RSUs                                   16,256        2,746,939                

12/15/2021

     VAC RSUs                                   18,865        3,187,808                

 

38   Executive Compensation Tables and Discussion   2022 PROXY STATEMENT MARRIOTT VACATIONS WORLDWIDE


Table of Contents
            Option Awards      Stock Awards  
Grant Date     Award
Type
1
     Number of
Securities
Underlying
Unexercised
Options/SARs
Exercisable/
Unexercisable
2
     Option/
SAR
Exercise
Price
     Option/ SAR
Expiration
Date
     Number of
Shares or
Units of
Stock
That Have
Not
Vested
3
     Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
     Equity Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other Rights
That Have Not
Vested (#)
     Equity Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other Rights
That Have Not
Vested ($)
 
J. Geller                          

3/2/2020

     Performance 4                                                4,129 4       697,718 5 

3/2/2015

     VAC SARs        9,076              77.42        3/2/2025                              

2/29/2016

     VAC SARs        20,471              61.71        2/28/2026                              

2/27/2017

     VAC SARs        11,944              97.53        2/27/2027                              

3/1/2018

     VAC SARs        6,787       2,263        143.38        3/1/2028                              

3/4/2019

     VAC SARs        7,788       7,788        100.52        3/4/2029                              

3/2/2020

     VAC SARs        3,796       11,391        96.82        3/2/2030                              

3/1/2021

     VAC SARs              14,152        173.88        3/1/2031                              

3/1/2018

     VAC RSUs                                   605        102,233                

3/4/2019

     VAC RSUs                                   1,949        329,342                

3/2/2020

     VAC RSUs                                   2,451        414,170                

3/1/2021

     VAC RSUs                                   5,911        998,841                

12/15/2021

     VAC RSUs                                   6,860        1,159,203                
A. Terry                          

3/2/2020

     Performance 4                                                496 4       83,730 5 

3/1/2021

     VAC SARs              1,330        173.88        3/1/2031                              

3/1/2018

     VAC RSUs                                   194        32,782                

3/4/2019

     VAC RSUs                                   608        102,740                

3/2/2020

     VAC RSUs                                   1,103        186,385                

12/15/2020

     VAC RSUs                                   692        116,934                

3/1/2021

     VAC RSUs                                   833        140,760                

11/16/2021

     VAC RSUs                                   1,526        257,863                

12/15/2021

     VAC RSUs                                   1,715        289,801                
R. Cunningham                          

3/2/2020

     Performance 4                                                2,478 4       418,648 5 

3/1/2018

     VAC SARs              1,383        143.38        3/1/2028                              

3/4/2019

     VAC SARs              4,673        100.52        3/4/2029                              

3/2/2020

     VAC SARs              6,834        96.82        3/2/2030                              

3/1/2021

     VAC SARs              6,369        173.88        3/1/2031                              

3/1/2018

     VAC RSUs                                   370        62,523                

3/4/2019

     VAC RSUs                                   1,170        197,707                

3/2/2020

     VAC RSUs                                   1,470        248,401                

3/1/2021

     VAC RSUs                                   2,660        449,487                

12/15/2021

     VAC RSUs                                   3,087        521,641                
B. Miller                          

3/2/2020

     Performance 4                                                2,478 4       418,648 5 

3/1/2018

     VAC SARs        3,268       1,090        143.38        3/1/2028                              

3/4/2019

     VAC SARs              3,635        100.52        3/4/2029                              

3/2/2020

     VAC SARs              6,834        96.82        3/2/2030                              

3/1/2021

     VAC SARs              7,784        173.88        3/1/2031                              

3/1/2018

     VAC RSUs                                   292        49,342                

3/4/2019

     VAC RSUs                                   910        153,772                

3/2/2020

     VAC RSUs                                   1,470        248,401                

11/9/2020

     VAC RSUs                                   1,117        188,751                

3/1/2021

     VAC RSUs                                   3,251        549,354                

12/15/2021

     VAC RSUs                                   3,773        637,562                

 

MARRIOTT VACATIONS WORLDWIDE 2022 PROXY STATEMENT   Executive Compensation Tables and Discussion   39


Table of Contents
            Option Awards      Stock Awards  
Grant Date     Award
Type
1
     Number of
Securities
Underlying
Unexercised
Options/SARs
Exercisable/
Unexercisable
2
     Option/
SAR
Exercise
Price
     Option/
SAR
Expiration
Date
     Number of
Shares or
Units of
Stock
That Have
Not
Vested
3
     Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
     Equity Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other Rights
That Have Not
Vested (#)
     Equity Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other Rights
That Have Not
Vested ($)
 
J. Marbert                          

3/2/2020

     Performance 4                                                2,478 4       418,648 5 

3/4/2019

     VAC SARs        4,413       4,414        100.52        3/4/2029                              

3/2/2020

     VAC SARs        2,278       6,834        96.82        3/2/2030                              

3/1/2021

     VAC SARs              7,076        173.88        3/1/2031                              

3/4/2019

     VAC RSUs                                   1,097        185,371                

3/2/2020

     VAC RSUs                                   1,470        248,401                

3/1/2021

     VAC RSUs                                   2,956        499,505                

12/15/2021

     VAC RSUs                                   3,430        579,601                

 

1 

“Performance,” “SARs” and “RSUs” refer to Performance Units, SARs and RSUs, respectively, granted under the 2020 Equity Plan with respect to equity awards granted after March 2020.

 

2 

SARs vest and become exercisable in equal annual increments beginning on the February 15th following the grant date.

 

3 

RSUs vest in equal annual increments beginning on the February 15th following the grant date, however, RSUs granted on November 9, 2020 and December 15, 2021 are subject to a three-year cliff vesting, and the RSUs granted to Mr. Terry on November 16, 2021 vest over four years in equal annual increments beginning on the November 15th following the grant date.

 

4 

With respect to Performance Units granted on March 2, 2020, the number of shares that the named executive officer will receive will be determined after the end of the performance period on December 31, 2022 and will be based upon the achievement of specified levels of performance during that performance period, as modified. Number of shares shown represents the number of shares of our common stock that can be issued after the end of the performance period on December 31, 2022, based on threshold level of achievement with respect to certain performance targets discussed above. The number of shares of our common stock that can be issued ranges from 0 shares to 50,650 shares for Mr. Weisz (25,325 shares for performance at target level), 16,516 shares for Mr. Geller (8,258 shares for performance at target level), 1,982 shares for Mr. Terry (991 shares for performance at target level), 9,910 shares for Mr. Cunningham (4,955 shares for performance at target level), 9,910 shares for Mr. Miller (4,955 shares for performance at target level), and 9,910 shares for Ms. Marbert (4,955 shares for performance at target level).

 

5 

Calculated by multiplying $168.98, the closing market price of our common stock on December 31, 2021, by the number of Performance Units granted, assuming achievement at the threshold level of performance. The market value of the shares of our common stock that can be issued on the vesting date, based on the Company’s achievement of certain performance targets discussed above, ranges from $0 (if the minimum number of shares, 0 shares, were to be received) to $8,558,837 for Mr. Weisz ($4,279,419 for performance at target level), $2,790,874 for Mr. Geller ($1,395,437 for performance at target level), $334,918 for Mr. Terry ($167,459 for performance at target level), $1,674,592 for Mr. Cunningham ($837,296 for performance at target level), $1,674,592 for Mr. Miller ($837,296 for performance at target level), and $1,674,592 for Ms. Marbert ($837,296 for performance at target level).

Option Exercises and Stock Vested During Fiscal Year 2021

The following table shows information about option and SAR exercises and vesting of RSUs during fiscal year 2021.

 

     Option/SAR Awards      Stock Awards
      Number of Shares
Acquired on Exercise
  

Value Realized

on Exercise1

     Number of Shares
Acquired on Vesting
  

Value Realized

on Vesting2

S. Weisz3

       16,309      $ 3,080,937          85,651      $ 14,072,395

J. Geller4

       14,103        2,396,744          28,243        4,623,769

A. Terry5

                       2,806        427,938

R. Cunningham6

       10,994        1,976,625          22,013        3,624,341

B. Miller7

       10,102        1,883,906          21,408        3,529,054

J. Marbert8

                       7,112        1,168,841

 

1

The value realized upon exercise is based on the current trading price at the time of exercise.

 

2

For the Performance Units, the value realized upon vesting is based on the closing price of our common stock on the vesting date. For RSUs, the value realized upon vesting is based on the average of the high and low stock price on the vesting date.

 

3

Mr. Weisz acquired 16,309 shares of the Company’s common stock upon the exercise of 22,519 SARs. Mr. Weisz acquired 20,070 shares of the Company’s common stock upon vesting of RSUs. Mr. Weisz acquired 59,003 shares upon the vesting of the Acquisition Award Performance Units granted on March 4, 2019 and 6,578 shares upon the vesting of the modified 2019-2021 Performance Units modified on December 9, 2021.

 

4

Mr. Geller acquired 14,103 shares of the Company’s common stock upon the exercise of 19,337 SARs. Mr. Geller acquired 7,539 shares of the Company’s common stock upon the vesting of RSUs. Mr. Geller acquired 18,355 shares upon the vesting of the Acquisition Award Performance Units granted on March 4, 2019 and 2,349 shares upon the vesting of the modified 2019-2021 Performance Units modified on December 9, 2021.

 

40   Executive Compensation Tables and Discussion   2022 PROXY STATEMENT MARRIOTT VACATIONS WORLDWIDE


Table of Contents
5

Mr. Terry acquired 2,535 shares of the Company’s common stock upon vesting of RSUs. Mr. Terry acquired 271 shares upon the vesting of the modified 2019-2021 Performance Units modified on December 9, 2021.

 

6

Mr. Cunningham acquired 10,994 shares of the Company’s common stock upon the exercise of 25,021 SARs. Mr. Cunningham acquired 4,869 shares of the Company’s common stock upon vesting of RSUs. Mr. Cunningham acquired 15,735 shares upon the vesting of the Acquisition Award Performance Units granted on March 4, 2019 and 1,409 shares upon the vesting of the modified 2019-2021 Performance Units modified on December 9, 2021.

 

7

Mr. Miller acquired 10,102 shares of the Company’s common stock upon the exercise of 19,253 SARs. Mr. Miller acquired 4,577 of shares of the Company’s common stock upon the vesting of RSUs. Mr. Miller acquired 15,735 shares upon the vesting of the Acquisition Award Performance Units granted on March 4, 2019 and 1,096 shares upon the vesting of the modified 2019-2021 Performance Units modified on December 9, 2021.

 

8

Ms. Marbert acquired 1,856 shares of the Company’s common stock upon vesting of RSUs. Ms. Marbert acquired 3,933 shares upon the vesting of the Acquisition Award Performance Units granted on March 4, 2019 and 1,323 shares upon the vesting of the modified 2019-2021 Performance Units modified on December 9, 2021.

Nonqualified Deferred Compensation for Fiscal Year 2021

The following table discloses contributions, earnings, distributions and balances under the MVW Deferred Compensation Plan and the Marriott Deferred Compensation Plan for the 2021 fiscal year. Our executives ceased to be eligible to make further contributions under the Marriott Deferred Compensation Plan as of the Spin-Off. We have agreed to reimburse Marriott International for any payments made to our employees under the Marriott Deferred Compensation Plan. Unless otherwise indicated, amounts relate to contributions, earnings, distributions and balances under the MVW Deferred Compensation Plan.

 

Name    Plan1    Executive
Contributions
in Last FY
2
   Company
Contributions
in Last FY
3
  

Aggregate

Earnings

in Last FY

 

Aggregate

Withdrawals/

Distributions

   Aggregate
Balance at
Last FYE
4

S. Weisz

   DCP      $ 14,974      $ 11,231      $ 36,905 5      $      $ 1,106,946 6 
     MDCP                      76,162 5               2,384,002 7 

J. Geller

   DCP        67,414        15,157        35,913 5        96,517        589,847 6 
     MDCP                      9,054 5               283,316 7 

A. Terry

   DCP        100,349        5,645        112,590 5               1,032,882 6 
     MDCP                      8,479 5               265,418 7 

R. Cunningham

   DCP        7,624        5,718        48,873 5               619,191 6 
   MDCP                      27,823 5               870,837 7 
                            17,664 8               88,155 9 

B. Miller

   DCP        107,610        16,437        29,073 5               928,992 6 
     MDCP                      28,921 5               905,275 7 

J. Marbert

   DCP        52,500        11,207        5,690 5               86,797 6 

 

1 

“DCP” and “MDCP” refer to the MVW Deferred Compensation Plan and the Marriott Deferred Compensation Plan, respectively.

 

2 

The amounts in this column consist of elective deferrals by the named executive officers of salary for the 2021 fiscal year and non-equity incentive plan compensation for the 2020 fiscal year paid in 2021 under the MVW Deferred Compensation Plan. All of these amounts that are attributable to 2021 salary are reported in the Summary Compensation Table, and all of the amounts that are attributable to 2020 non-equity incentive plan compensation were included in the 2020 Summary Compensation Table.

 

3 

The amounts in this column consist of company contributions that were accrued during 2021 and credited to the participants’ accounts in 2022 under the MVW Deferred Compensation Plan. All of these amounts are included in the Summary Compensation Table in the “All Other Compensation” column for 2021.

 

4 

This column includes amounts in each named executive officer’s total MVW Deferred Compensation Plan account balance as of the last day of the 2021 fiscal year, and does not take into account the amounts in the “Company Contributions in Last Fiscal Year” column in the table above that were accrued during fiscal 2021 but credited to the participants’ accounts in 2022.

 

5 

These amounts consist of the aggregate notional earnings during 2021 of each named executive officer’s account in the MVW Deferred Compensation Plan or the Marriott Deferred Compensation Plan. Such earnings are reported in the Summary Compensation Table only to the extent that they were credited at a fixed rate of interest in excess of 120 percent of the applicable federal long-term rate. The following table indicates the portion of each executive’s aggregate earnings during 2021 that is reported in the Summary Compensation Table.

 

     Amounts Included in the Summary
Compensation Table for 2021
Name   

MVW Deferred

Compensation Plan

  

Marriott Deferred

Compensation Plan

S. Weisz

     $ 25,467      $ 51,236

J. Geller

       6,246        6,090

A. Terry

       5,226        5,705

R. Cunningham

       3,529        18,717

B. Miller

       20,014        19,457

J. Marbert

       240       

 

MARRIOTT VACATIONS WORLDWIDE 2022 PROXY STATEMENT   Executive Compensation Tables and Discussion   41


Table of Contents
6 

Of these amounts, the following were previously reported in the Summary Compensation Table of previously filed proxy statements: Mr. Weisz, $867,491; Mr. Geller, $666,129; Mr. Cunningham, $442,725; Mr. Miller, $737,390; and Ms. Marbert, $26,269.

 

7 

Of these amounts, the following were previously reported in the Summary Compensation Table of previously filed proxy statements or in a Summary Compensation Table included in a Form 10 or Annual Report on Form 10-K: Mr. Weisz, $324,278; Mr. Geller, $93,194; Mr. Cunningham, $131,470; Mr. Miller, $210,614; and Ms. Marbert, $0.

 

8 

This amount consists of the total of the increase in the value of 48.4 shares of Marriott Vacations Worldwide deferred bonus stock held by Mr. Cunningham during 2021 based on the difference between the Company’s 2021 fiscal year-end closing stock price of $168.98 and its 2020 fiscal year-end closing stock price of $137.22, and the increase in the value of 484 shares of Marriott International deferred bonus stock held by Mr. Cunningham during 2021 based on the difference between Marriott International’s 2021 fiscal year end closing price of $165.24 and its 2020 fiscal year-end closing stock price of $131.92. All of the shares of deferred bonus stock are fully vested and will be distributed to Mr. Cunningham in ten annual installments commencing on the January 2nd following the date on which he ceases being employed by the Company.

 

9 

This amount consists of the value of 48.4 shares of Marriott Vacations Worldwide deferred bonus stock held by Mr. Cunningham based on the Company’s 2021 fiscal year-end closing stock price of $168.98, and the value of 484 shares of Marriott International deferred bonus stock held by Mr. Cunningham based on Marriott International’s 2021 fiscal year-end closing stock price of $165.24.

For 2021, we credited amounts subject to the fixed rate of return in participant plan accounts with a rate of return of 3.5 percent. For 2021, Marriott International credited participant plan accounts with a rate of return of 3.3 percent, determined largely based on Marriott International’s estimated long-term cost of borrowing. To the extent that either of these fixed rates exceeds 120 percent of the applicable federal long-term rate, the excess is reported in the Change in Pension Value and Nonqualified Deferred Compensation Earnings column of the Summary Compensation Table. The terms of the MVW Deferred Compensation Plan are described above under “Deferred Compensation Plan.” Under the Marriott Deferred Compensation Plan, the named executive officers could defer the receipt of up to 80 percent of their salary, bonus, non-equity incentive plan compensation and/or commissions, which amounts were immediately vested. In addition, the named executive officers were eligible to receive a discretionary match or other discretionary contributions, which were vested when made (other than discretionary contributions made for any year prior to 2009, which vested 25 percent per year for each year that the executive remained employed by Marriott International or us), all of which have vested. Because our executives ceased to be eligible to make further contributions under the Marriott Deferred Compensation Plan as of the Spin-Off, no match or discretionary company contribution was received by any of the named executive officers for 2021.

Our named executive officers can receive a distribution of the vested portion of their Marriott Deferred Compensation Plan accounts upon termination of employment (including retirement or disability) or, in the case of deferrals by the executive (and related earnings), upon a specified future date while still employed (an “in-service distribution”), as elected by the executive. Each plan year’s deferrals have a separate distribution election. Distributions payable upon termination of employment are payable as: (i) a lump sum cash payment; (ii) a series of annual cash installments payable over a designated term not to exceed twenty years; or (iii) five annual cash payments beginning on the sixth January following termination of employment, in each case as elected by the executive. In the case of amounts of $10,000 or less, or when no election regarding the form of distribution was made, the distribution is made in a lump sum. The Spin-Off did not by itself trigger a distribution upon termination of employment under the Marriott Deferred Compensation Plan, and continued employment with the Company is treated as employment for purposes of the Marriott Deferred Compensation Plan.

Potential Payments Upon Termination or Change in Control

The following information relates to benefits that would have been paid or payable had a change in control occurred and/or a named executive officer’s employment with us terminated as of December 31, 2021, the last business day of our fiscal year. The table below reflects the intrinsic value of unvested stock awards, unvested MVW Deferred Compensation Plan accounts and incentive payments under the Bonus Plan that each named executive officer would have received upon retirement, disability, death, resignation, involuntary termination of employment, or a change in control as of December 31, 2021 (based on our closing stock price of $168.98 as of that date).

 

Name    Plan    Retirement1      Disability      Death      Resignation or
Involuntary
Termination
2
     Termination
Following
Change In
Control
3
 

S. Weisz

   Cash Severance    $      $      $      $     —      $ 7,500,000  
   Annual Bonus4      2,842,631        2,842,631        2,842,631               1,500,000  
   Other Benefits5                                  38,790  
   MVW Equity Awards6      13,592,230        14,976,626        15,336,623               16,847,250  
     Deferred Compensation Plan7      79,859               79,859               79,859  
     Total    $ 16,514,720      $ 17,819,257      $ 18,259,113      $      $ 25,965,899  

J. Geller

   Cash Severance    $      $      $      $      $ 2,700,000  
   Annual Bonus4             1,279,184        1,279,184               675,000  
   Other Benefits5                                  36,162  
   MVW Equity Awards6             3,758,145        5,319,773               5,812,360  
     Deferred Compensation Plan7                    50,400               50,400  
     Total    $      $ 5,037,329      $ 6,649,357      $      $ 9,273,922  

A. Terry

   Cash Severance    $      $      $      $      $ 1,900,000  
   Annual Bonus4             384,460        384,460               201,427  
   Other Benefits5                                  33,436  
   MVW Equity Awards6             521,129        1,235,612               1,294,725  
     Deferred Compensation Plan7                    18,960               18,960  
     Total    $      $ 905,589      $ 1,639,032      $      $ 3,448,548  

 

42   Executive Compensation Tables and Discussion   2022 PROXY STATEMENT MARRIOTT VACATIONS WORLDWIDE


Table of Contents
Name    Plan    Retirement1      Disability      Death      Resignation or
Involuntary
Termination
2
     Termination
Following
Change In
Control
3
 

R. Cunningham

   Cash Severance    $      $      $      $     —      $ 1,938,000  
   Annual Bonus4      869,845        869,845        869,845               459,000  
   Other Benefits5                                  33,547  
   MVW Equity Awards6      2,540,215        2,811,081        2,869,987               3,165,551  
     Deferred Compensation Plan7      31,130               31,130               31,130  
     Total    $ 3,441,190      $ 3,680,926      $ 3,770,962      $      $ 5,627,228  

B. Miller

   Cash Severance    $      $      $      $      $ 2,926,000  
   Annual Bonus4      1,313,296        1,313,296        1,313,296               693,000  
   Other Benefits5                                  34,217  
   MVW Equity Awards6      2,050,464        2,321,330        3,138,841               3,434,405  
     Deferred Compensation Plan7      52,420               52,420               52,420  
     Total    $ 3,416,180      $ 3,634,626      $ 4,504,557      $      $ 7,140,042  

J. Marbert

   Cash Severance    $      $      $      $      $ 1,995,000  
   Annual Bonus4      895,429        895,429        895,429               472,500  
   Other Benefits5                                  25,260  
   MVW Equity Awards6      1,942,495        2,213,361        2,849,963               3,145,527  
     Deferred Compensation Plan7      19,136               19,136               19,136  
     Total    $ 2,857,060      $ 3,108,790      $ 3,764,528      $      $ 5,657,423  

 

1 

Each of Mr. Weisz, Mr. Cunningham, Mr. Miller and Ms. Marbert is eligible for “approved retiree” status under the MVW Deferred Compensation Plan and the Equity Plans. Amounts in this column reflect the benefits each would receive if he or she ceased being employed by the Company for any reason on December 31, 2021 and satisfied the requirements of such plans for qualification as an approved retiree.

 

2 

Upon resignation or termination with cause, no benefits would be payable. In addition, there are no contractual rights providing for payment upon a termination without cause other than in connection with a change in control. Any such payments would be based upon negotiation at the time of such termination.

 

3 

As described above under “Change in Control Arrangements,” a named executive officer who participates in the Change in Control Plan and who executes a waiver and release of claims in favor of the Company will receive the following severance benefits if his or her employment is terminated involuntarily by the Company or any of its affiliates, other than due to Cause, Total Disability, or death, or is terminated by the named executive officer for Good Reason, in each case, within two years following a Change in Control of the Company: (1) a cash severance payment, payable in a lump sum, equal to two times (or three times, in the case of the Chief Executive Officer of the Company) the sum of his or her Base Salary and Target Bonus; (2) twenty-four months (or thirty-six months, in the case of the Chief Executive Officer of the Company) of Company-subsidized medical, dental and life-insurance coverage for such named executive officer and his or her spouse and dependents, at the same benefit level as provided to the executive immediately prior to the Change in Control, or the cash equivalent of the present value of such coverage (“Benefit Coverage”); (3) any unpaid salary or bonus as of the Termination date for any previously-completed fiscal year (“Earned Amounts”); (4) a pro-rata bonus for the fiscal year in which the named executive officer’s employment is terminated assuming achievement at the target level of performance; (5) vesting of all restricted stock, RSUs or other share-based awards in a form substantially similar to restricted stock or RSUs as of the Termination date; (6) vesting of all unvested or unexercisable options, SARs or other share-based awards in a form substantially similar to options or SARs, which will be exercisable until the earlier of the end of their original term or 12 months (or in the case of certain approved retirees, five years) following the Termination date; and (7) the vesting and immediate payment of all other cash performance units or other share-based awards subject to performance-based vesting criteria based on a presumed achievement of target levels of performance. No amounts are shown for Earned Amounts as we have assumed there would be no such amounts unpaid on the last day of the fiscal year. Certain terms in this footnote are defined above under “Change in Control Arrangements.”

 

4 

Upon retirement after either reaching age 55 and completing ten continuous years of service or completing 20 years of continuous service, disability or death, the named executive officer would be entitled to a pro-rata bonus based on actual performance under the 2021 Bonus Plan. The amount shown with respect to annual bonus for each named executive officer is the actual payout amount for 2021. See Note 3 for a description of annual bonus amounts payable following a Change in Control.

 

5 

Consists of the Benefit Coverage payable under the Change in Control Plan.

 

6 

Upon retirement or permanent disability (as defined in the pertinent plan), a named executive officer may continue to vest in and receive distributions under outstanding stock awards for the remainder of their vesting period and may exercise options and SARs for up to five years in accordance with the awards’ original terms; provided however that upon permanent disability, the Performance Units will immediately vest assuming achievement at the target level of performance. Annual stock awards provide that if the executive retires within one year after the grant date, the executive forfeits a portion of the stock award proportional to the number of days remaining within that one-year period. For these purposes, retirement means a termination of employment with retirement approval of the Compensation Policy Committee by an executive who had attained age 55 with 10 years of service. In all cases, however, the Compensation Policy Committee or its designee has the authority to revoke approved retiree status if an executive’s employment terminated for serious misconduct or was subsequently found to have engaged in competition or engaged in criminal conduct or other behavior that was actually or potentially harmful to the Company. A named executive officer who dies as an employee or approved retiree would immediately vest in his or her options, SARs and other stock awards. As of December 31, 2021, each of Mr. Weisz, Mr. Cunningham, Ms. Marbert and Mr. Miller met the age and service conditions for retirement eligibility. The value of Performance Units vesting upon retirement is calculated based on the probable outcome of the performance conditions as of December 31, 2021; the value of Performance Units vesting upon disability or death is calculated assuming achievement at the target level of performance. See Note 3 for a description of treatment of outstanding equity awards following a Change in Control.

 

7 

Consists of the value of unvested employer credits under the MVW Deferred Compensation Plan. The Company may credit participants’ accounts with employer credits that will vest at a rate of 25 percent per year on the first four anniversaries of the date the discretionary employer credit was allocated to the participant’s account, provided that the participant remains in continued service with the Company. Upon a change in control of the Company or a participant’s death or retirement after reaching age 55 and completing ten continuous years of service, all employer credits will immediately vest in full. Although the Marriott Deferred Compensation Plan also provided for employer credits, no named executive officer has unvested employer credits under the Marriott Deferred Compensation Plan.

 

MARRIOTT VACATIONS WORLDWIDE 2022 PROXY STATEMENT   Executive Compensation Tables and Discussion   43


Table of Contents

The benefits reported in the table and narrative above are in addition to benefits available prior to the occurrence of any termination of employment, including benefits available under then-exercisable SARs and options and vested MVW Deferred Compensation Plan balances, and benefits available generally to salaried employees such as benefits under the 401(k) Plan, group medical and dental plans, life and accidental death insurance plans, disability programs, health and dependent care spending accounts, and accrued paid time off. Amounts actually received if any of the named executive officers cease to be employed will vary based on factors such as the timing during the year of any such event, the price of the Company’s stock, the named executive officer’s age, and any changes to our benefit arrangements and policies. We may determine to provide additional or different benefits in connection with any executive’s termination.

CEO PAY RATIO

Under rules adopted pursuant to the Dodd-Frank Act of 2010, we are required to calculate and disclose the total compensation paid to our median employee, as well as the ratio of the total compensation paid to the median employee as compared to the total compensation paid to our CEO.

Under the relevant rules, we are required to identify the median employee by use of a consistently applied compensation measure. We chose to utilize compensation rules that were consistent with the Summary Compensation Table. Associates who became our employees as a result of the Welk acquisition (approximately 1,110 individual) are excluded for one year. We did not perform adjustments to the compensation paid to part-time employees to calculate what they would have been paid on a full-time basis.

As of December 31, 2021, the date for the determination of the median employee, we had 19,150 employees in 25 countries for purposes of this determination, however, the vast majority of these employees were in North America. In identifying the median employee, we excluded workers in 20 countries totaling 900 associates (approximately 4.4% of our workforce) as permitted by the de minimis exemption rules, given the small portion of the total employee population in these countries.

We excluded the following number of workers from the following countries in the identification of the median employee.

 

Country  

Number of

Associates

     Country   

Number of

Associates

Argentina

  16      Finland    7

Aruba

  76      Germany    16

Australia

  38      Hong Kong    3

Bahamas

  36      Indonesia    124

Brazil

  3      Italy    2

China

  25      Japan    36

Columbia

  17      St. Kitts    41

Costa Rica

  11      Thailand    169

Egypt

  8      UAE    38

France

  103      United Kingdom    131

After applying our methodology and excluding the employees listed above, we identified the median employee. Our median employee compensation as calculated using Summary Compensation Table requirements was $36,899. Our CEO’s compensation as reported in the Summary Compensation Table was $13,223,937. Therefore, our CEO to median employee pay ratio is 358:1.

Note that the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios. This information is being provided for compliance purposes. Neither the Compensation Policy Committee nor management of the Company used the pay ratio measure in making compensation decisions.

COMPENSATION ARRANGEMENTS FOR NON-EMPLOYEE DIRECTORS

In designing and implementing compensation programs applicable to our non-employee directors, our Compensation Policy Committee considered the advice and recommendations of Exequity. In determining its recommendation to the Board with respect to compensation for our non-employee directors for 2021, the Compensation Policy Committee considered Exequity’s recommendation that with the COVID pandemic, an external market review would not result in changes to the prior year’s compensation. The Compensation Policy Committee, therefore, did not recommend changes to the non-employee director compensation in 2021.

For 2021, our compensation arrangements for our non-employee directors for service on our Board of Directors consisted of:

 

 

an annual cash retainer of $85,000 for each non-employee director other than the Chairman and $130,000 for the Chairman;

 

 

an annual cash retainer of $25,000 for the chairs of each of the Audit Committee, Com