UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934

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Filed by a party other than the Registrant ☐

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Preliminary Proxy Statement

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

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Definitive Proxy Statement

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Definitive Additional Materials

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Soliciting Material Pursuant to Section 240.14a-12

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CLARIVATE PLC

(Name of Registrant as Specified In Its Charter)

n/a

(Name of Person(s) Filing Proxy Statement if other than the Registrant)

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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

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March 25, 2021

Dear Shareholder:

Clarivate Plc is pleased to invite you to our 2021 Annual General Meeting of Shareholders. In order to comply with social distancing measures and public health directives and to do our part to assist in protecting the health and well-being of our shareholders and employees, Clarivate will adhere to all government and public health authority guidance to limit the spread of COVID-19. Therefore, shareholders will not be permitted to attend the Annual General Meeting in person and anyone seeking to attend the meeting in person will not be allowed entry (with exceptions only as required by our Articles of Association).

Shareholders may listen to the Annual General Meeting through our webcast or conference call beginning at 2:00 p.m. BST on Thursday, May 6, 2021 via the event information set forth below. Any shareholder wishing to submit a question in connection with the Annual General Meeting may do so at any time by emailing AGM2021@clarivate.com.

We are not permitted to hold a virtual-only Annual General Meeting under the terms of our governing documents, and therefore, we plan to hold the Annual General Meeting at 2 Sydney Terrace, The Green, Claygate, Surrey KT10 0JJ, United Kingdom. However, in order to keep in-person attendance to a safe minimum and to observe proper social distancing measures for the small number of people required to attend, our shareholders (with exceptions only as required by our Articles of Association), advisers and other guests will not be permitted to attend.

Even though you cannot attend the Annual General Meeting in person, we value the vote of every shareholder and it is important that you participate. Please review the enclosed Proxy Card carefully to understand how you may vote by proxy. If you choose to appoint a proxy, please sign and return your Proxy Card promptly or follow the instructions for internet voting provided on the Proxy Card. For Proxy Cards delivered in hard copy, a postage-paid return envelope is enclosed. Alternatively, a Proxy Card may be delivered by sending a scanned PDF version of the original by email to AGM2021@clarivate.com. If your shares are held in the name of a bank or broker, appointing a proxy will depend on the processes of the bank or broker, and you should follow the instructions you receive from your bank or broker.

Because shareholders will not be permitted to attend the Annual General Meeting (with exceptions only as required by our Articles of Association), you will not be able to vote your shares unless you submit

 

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a proxy. Shareholders are strongly encouraged to vote and submit their proxy by internet, by email or by signing and returning the Proxy Card. Let us know if we can explain any of these matters or otherwise help you with appointing a proxy to vote at the Annual General Meeting. Your participation is important to all of us at Clarivate, so please review these materials carefully and cast your vote.

We look forward to hearing from you.

Very truly yours,

Stephen Hartman
General Counsel, Global Head of Corporate Development and Secretary

 

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to authorize the Company to repurchase its ordinary shares from affiliates of Leonard Green & Partners, L.P. (“LGP”), Partners Group AG, Castik Capital S.a.r.l. and NGB Corporation (collectively, the “CPA Global Investors”) on the terms described in further detail herein (Proposal 5);

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to authorize the Company to repurchase its ordinary shares from any of its wholly owned subsidiaries on the terms described in further detail herein (Proposal 6);

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to approve, on an advisory, non-binding basis, the compensation of our named executive officers (Proposal 7);

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to recommend on an advisory, non-binding basis, the frequency of an advisory, non-binding shareholder vote on the compensation of our named executive officers (Proposal 8);

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to ratify the appointment of PricewaterhouseCoopers LLP (“PwC”) as our independent registered public accountants (Proposal 9); and

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to transact such other business as may properly come before the Annual General Meeting and any adjournments or postponements of the Annual General Meeting.

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The text of the resolutions for each proposal is set forth below.

Only shareholders of record at the close of business on March 4, 2021 (the “Record Date”) are entitled to notice of, and to vote at, the Annual General Meeting and any adjournments or postponements of the Annual General Meeting. For ten days prior to the Annual General Meeting, a complete list of shareholders entitled to vote at the Annual General Meeting will be available for shareholders to review for purposes relevant to the meeting. To arrange to review that list contact Clarivate Plc, Attention: Secretary, Friars House, 160 Blackfriars Road, London SE1 8EZ United Kingdom.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL GENERAL MEETING TO BE HELD ON MAY 6, 2021: The Proxy Statement and our Annual Report on Form 10- K for the year ended December 31, 2020 (our “Annual Report”) are available at http://ir.clarivate.com.

We will deliver a copy of the Proxy Statement and our Annual Report free of charge if a shareholder sends a request to the Secretary, Clarivate Plc, Friars House, 160 Blackfriars Road, London SE1 8EZ United Kingdom or calls +44 207 4334000.

We hope that you will promptly vote and submit your proxy by dating, signing, and returning the enclosed Proxy Card by mail or by email, or by following the instructions for internet voting provided on the Proxy Card, or, if you hold your shares in the name of a bank or broker, by following the instructions you receive from your bank or broker.

Any shareholder who is entitled to vote at the Annual General Meeting is entitled to appoint one or more proxies to attend and vote instead of that shareholder. A proxy need not be a shareholder.

 

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TEXT OF PROPOSED RESOLUTIONS

 

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Text of Resolutions for Proposal 6

RESOLVED AS A SPECIAL RESOLUTION, that the Company is hereby authorized to purchase up to 300,000,000 of its ordinary shares from time to time from any wholly owned subsidiary of the Company as approved by the Board of Directors; provided that (i) this purchase authority shall extend from May 6, 2021 to May 5, 2031, inclusive; (ii) each purchase from a wholly owned subsidiary shall be executed pursuant to a Share Repurchase Agreement between the Company and such wholly owned subsidiary substantially in the form set forth in Appendix E hereto; and (iii) the price per share payable by the Company shall be for nominal consideration only; and further

RESOLVED, that any ordinary shares that the Company purchases pursuant to the foregoing resolution may be held by it as treasury shares, and may, at the Company’s option, be cancelled, sold, transferred for the purposes of or under an employee share scheme or held without cancelling, selling or transferring them.

Text of Resolutions for Proposal 7

RESOLVED, that the shareholders of the Company hereby approve, on an advisory, nonbinding basis, the compensation of our named executive officers as disclosed in this Proxy Statement.

Text of Resolutions for Proposal 8

RESOLVED, that the shareholders of the Company hereby approve, on an advisory, nonbinding basis, an advisory vote on the compensation of our named executive officers to occur every year (annually).

Text of Resolutions for Proposal 9

RESOLVED, that the shareholders of the Company hereby ratify the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accountants for the fiscal year 2021 on a non-binding and advisory basis.

BY ORDER OF THE BOARD OF DIRECTORS

Stephen Hartman
General Counsel, Global Head of Corporate Development and Secretary

March 25, 2021

 

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Table of Contents

 

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You may make this appointment by using one of the methods described below. If appointed by you, the proxy holders will vote your shares as you direct on the matters described in this Proxy Statement. In the absence of your direction, they will vote your shares as recommended by the Board.

Unless you otherwise indicate on the Proxy Card, you also authorize your proxy holders to vote your shares on any matters not known by the Board at the time this Proxy Statement was printed and that, under our Articles of Association, may be properly presented for action at the Annual General Meeting.

If you do not wish to appoint Messrs. Stead, Hanks and Hartman as your proxies, you need not do so. Any shareholder who is entitled to vote at the Annual General Meeting is entitled to appoint one or more proxies to vote instead of that shareholder. A proxy need not be a shareholder. Any such appointment must be submitted to the Company in accordance with its Articles of Association.

Who Can Vote

Only shareholders who owned our ordinary shares at the close of business on March 4, 2021 — the “Record Date” for the Annual General Meeting — can vote at the Annual General Meeting.

Each holder of our ordinary shares is entitled to one vote for each share held as of the Record Date. As of the close of business on the Record Date, we had 608,075,034 ordinary shares outstanding and entitled to vote.

There is no cumulative voting in the election of directors.

How You Can Vote

You may vote your shares at the Annual General Meeting by proxy, as described below. If your shares are held in the name of a bank or broker, voting by proxy will depend on the processes of the bank or broker, and you should follow the voting instructions on the form you receive from your bank or broker.

Voting by Proxy.   Shareholders of record may appoint a proxy by signing, dating, and returning the Proxy Card in the enclosed postage-paid return envelope or by email, or by following the instructions for internet voting provided on the Proxy Card. Carefully review and follow the instructions on the enclosed Proxy Card. The shares represented will be voted in accordance with the directions in the Proxy Card.

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By Mail.   The Proxy Card must be received by us at the address specified in the Proxy Card (Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood NY 11717) no later than 11:59 p.m. Eastern time on May 4, 2021. Please mail your Proxy Card in the enclosed postage-paid return envelope no later than April 16, 2021 in order to allow sufficient time for us to receive your Proxy Card by mail.

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By Email.   A Proxy Card may be delivered to us by sending a scanned PDF version of the original by email to: AGM2021@clarivate.com. A Proxy Card sent to us by email must be received by us no later than 11:59 p.m. on May 4, 2021.

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By Internet.   Please follow the instructions set forth on the Proxy Card to vote using the internet. You must register your vote over the internet no later than 11:59 p.m. Eastern time on May 4, 2021.

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A form of proxy different from the Proxy Card may be submitted to the Company in the manner contemplated by the Articles of Association.

Voting at the Annual General Meeting.   The Board recommends that you vote by proxy, as we have asked shareholders not to attend the Annual General Meeting in person (with exceptions only as required by our Articles of Association) and instead to listen to the meeting through our webcast or conference call in order to comply with social distancing measures and public health directives and to do our part to assist in protecting the health and well-being of our shareholders and employees.

 

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Shareholders will not be permitted to attend the Annual General Meeting in person and anyone seeking to attend the meeting in person will not be allowed entry (with exceptions only as required by our Articles of Association). As a result, you will not be able to vote your shares unless you submit a proxy.

Revocation of Proxies

Shareholders can revoke their proxies at any time before they are exercised in either of the following ways:

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by submitting written notice of revocation to the Secretary prior to 11:59 p.m. Eastern time on May 4, 2021; or

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by submitting another proxy — properly executed and delivered — on a later date, but prior to 11:59 p.m. Eastern time on May 4, 2021.

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Quorum

A quorum, which is shareholders holding in aggregate not less than a simple majority of all ordinary shares outstanding present in person or by proxy and entitled to vote (provided there are present in person at least two shareholders entitled to vote), must be present to hold the Annual General Meeting. A quorum is calculated based on the number of shares represented by the shareholders attending in person and by their proxy holders. If you indicate an abstention as your voting preference, your shares will be counted toward a quorum but they will not be voted on any given proposal. “Broker non-votes” ​(see “Required Vote” below) will be counted as ordinary shares that are present for the purpose of determining the presence of a quorum but will have no effect with respect to any matter for which a broker does not have authority to vote.

Required Vote

With respect to each of Proposal 1 (election of directors), Proposal 7 (advisory vote on executive compensation or “say on pay”) and Proposal 9 (ratification of appointment of independent registered public accountants), the proposal will be passed if approved by a simple majority of the votes cast by, or on behalf of, the shareholders entitled to vote in person or represented by proxy.

With respect to Proposal 2 (declassification of Board of Directors), Proposal 3 (director removal with or without cause) and Proposal 4 (amendment of Articles of Association to eliminate inapplicable provisions), the proposal will be passed if approved by two-thirds of the votes cast by, or on behalf of, the shareholders entitled to vote in person or represented by proxy.

With respect to Proposal 5 (share repurchases from CPA Global Investors), the proposal will be passed if approved by both (i) two-thirds of the votes cast by, or on behalf of, the shareholders entitled to vote in person or represented by proxy and (ii) a simple majority of the votes cast by, or on behalf of, the shareholders entitled to vote in person or represented by proxy, excluding for purposes of this clause (ii) votes cast by the applicable CPA Global Investor.

With respect to Proposal 6 (share repurchases from any wholly owned subsidiary), the proposal will be passed if approved by both (i) two-thirds of the votes cast by, or on behalf of, the shareholders entitled to vote in person or represented by proxy and (ii) a simple majority of the votes cast by, or on behalf of, the shareholders entitled to vote in person or represented by proxy, excluding for purposes of this clause (ii) votes cast by the applicable wholly owned subsidiary shareholder.

With respect to Proposal 8 (advisory vote on frequency of executive compensation advisory votes or “say on frequency”), the option of one year, two years or three years that receives the highest number of votes cast by shareholders will be the frequency for the advisory vote on executive compensation that has been selected by shareholders.

Please note that under New York Stock Exchange (“NYSE”) rules, brokers may not vote your shares on certain “non-routine” matters without your voting instructions. Accordingly, if you do not provide your broker or other nominee with instructions on how to vote your shares, this will be considered a “broker non-vote” and your broker or nominee will not be permitted to vote those shares on Proposal 1 (election of directors), Proposal 2 (declassification of Board of Directors), Proposal 3 (director

 

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removal with or without cause), Proposal 4 (amendment of Articles of Association to eliminate inapplicable provisions), Proposal 5 (share repurchases from CPA Global Investors), Proposal 6 (share repurchases from any wholly owned subsidiary), Proposal 7 (say on pay) or Proposal 8 (say on frequency). Your broker or nominee will be entitled to cast votes on Proposal 9 (ratification of appointment of independent registered public accountants).

We encourage you to provide instructions to your broker regarding the voting of your shares.

Please note that “vote cast” means a vote “FOR” or “AGAINST” a proposal. An abstention, or “ABSTAIN” vote, is not a “vote cast” and will not factor into whether a Proposal is passed.

Solicitation of Proxies

We pay the cost of printing and mailing the Notice of Annual General Meeting, the Annual Report, and all proxy and voting materials. We have retained D.F. King & Co., Inc. to aid in the solicitation of proxies by mail, telephone, facsimile, e-mail and personal solicitation for a fee of  $10,000, plus reasonable expenses. Our directors, officers and other employees may participate in the solicitation of proxies by personal interview, telephone, or email. No additional compensation will be paid to our directors, officers or other employees for solicitation. We will reimburse brokerage firms and others for their reasonable expenses in forwarding solicitation materials to beneficial owners of our ordinary shares.

Shareholders Who Share an Address

Multiple Clarivate shareholders who share an address may receive only one copy of this Proxy Statement and the Annual Report, unless the shareholder gives instructions to the contrary. We will deliver promptly a separate copy of this Proxy Statement and the Annual Report to any Clarivate shareholder who resides at a shared address and to which a single copy of the documents was delivered if the shareholder makes a request by contacting the Secretary at:

Clarivate Plc
Friars House
160 Blackfriars Road
London SE1 8EZ
United Kingdom
(or by telephone: +44 207 4334000)

Multiple shareholders who share a single address and who receive multiple copies of the Proxy Statement and the Annual Report and who wish to receive a single copy of each at that address in the future will need to contact their bank, broker, or other nominee.

Potential Impact of Developments Relating to COVID-19 Coronavirus

We are sensitive to public health and travel concerns and recommendations that public health officials may issue in light of the evolving COVID-19 coronavirus situation. In order to do our part to assist in protecting the health and well-being of our shareholders and employees, we are actively monitoring all available information. If we determine to change any of the logistics for the Annual General Meeting described herein due to developments relating to the COVID-19 coronavirus or otherwise, we will provide notice to shareholders through a press release and the filing of a Current Report on Form 8-K.

 

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PROPOSAL 1:   ELECTION OF DIRECTORS

Directors and Nominees

Pursuant to the Company’s Articles of Association, directors are divided into three classes and elected for three-year terms, with one class of directors elected at each Annual General Meeting. Five Class II directors are to be elected at the 2021 Annual General Meeting. These directors will hold office until the Annual General Meeting in 2024 (unless Proposal 2 described below is approved, in which event their terms will expire at the Annual General Meeting in 2022), or until their respective successors have been elected and qualified.

Each director nominee set forth below has consented to being named in this Proxy Statement as a nominee for election as director and has agreed to serve as a director if elected. In the event that any of the nominees should become unavailable prior to the Annual General Meeting, proxies in the enclosed form will be voted for a substitute nominee or nominees designated by the Board, or the Board may reduce the number of directors to constitute the entire Board, in its discretion. Usama N. Cortas and Adam T. Levyn have been nominated pursuant to the Company’s obligations under the Investor Rights Agreement dated October 1, 2020, entered into in connection with the Company’s acquisition of CPA Global.

Vote Required and Recommendation

A director will be elected if approved by a simple majority of the votes cast by, or on behalf of, the shareholders entitled to vote in person or represented by proxy.

Text of Proposed Resolutions

RESOLVED, that each of Valeria Alberola, Usama N. Cortas, Adam T. Levyn, Charles J. Neral and Roxane White be elected to serve as a director of the Company until the 2024 Annual General Meeting, subject to the approval of Proposal 2, or until his or her successor is duly elected and qualified; and further

RESOLVED, that in the event that any of the above nominees should become unavailable prior to the Annual General Meeting, proxies in the enclosed form will be voted for a substitute nominee or nominees designated by the Board, or the Board may reduce the number of directors to constitute the entire Board, in its discretion.

 

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The “for cause” removal standard currently in the Articles of Association is a corollary to the existing classified board structure that the Company proposes to eliminate in Proposal 2, because it is designed to set a high bar for the removal of a director before expiration of his or her three-year term. After careful consideration, the Board has determined that discarding the “for cause” removal standard would have the effect of improving the Board’s accountability to shareholders. The Company is seeking shareholder approval to amend its Articles of Association to remove the standard and provide that a director may be removed by the shareholders or the Board with or without cause. The amendment, if approved by shareholders, will be effective as of the date this resolution shall have been duly passed by the shareholders.

We have attached to this Proxy Statement as Appendix B a copy of the proposed amendment to the Articles of Association marked to show changes from the Articles of Association as currently in effect. Text that is proposed to be deleted is shown in red strikethrough (e.g., “Directors”), text that is proposed to be added is shown in blue underscore (e.g., “Plc”), and text that is proposed to be moved is shown in green, with green strikethrough (e.g., “Company”) indicating where the text previously appeared and green underscore with no strikethrough (e.g., “Company”) indicating where the text is proposed to be moved.

Vote Required and Recommendation

The proposed amendment to the Articles of Association will be passed if approved by two-thirds of the votes cast by, or on behalf of, the shareholders entitled to vote in person or represented by proxy and will be effective upon approval by the shareholders.

Text of Proposed Resolutions

RESOLVED AS A SPECIAL RESOLUTION, that the Articles of Association of the Company be amended as set forth in Appendix B hereto to allow for the removal of a director with or without cause, effective as of the date this resolution shall have been duly passed by the shareholders.

 

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Text of Proposed Resolutions

RESOLVED AS A SPECIAL RESOLUTION, that the Articles of Association of the Company be amended as set forth in Appendix C hereto to eliminate inapplicable provisions, effective as of the date this resolution shall have been duly passed by the shareholders.

 

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Text of Proposed Resolutions

RESOLVED AS A SPECIAL RESOLUTION, that the Company is hereby authorized to purchase its ordinary shares from time to time from Leonard Green & Partners, L.P., Partners Group AG, Castik Capital S.a.r.l. and NGB Corporation or their affiliates (collectively, the “CPA Global Investors”) as approved by the Board of Directors; provided that (i) this purchase authority shall extend from May 6, 2021 to May 5, 2026, inclusive; (ii) each purchase from a CPA Global Investor shall be executed pursuant to a Share Repurchase Agreement between the Company and the applicable CPA Global Investor substantially in the form set forth in Appendix D hereto; (iii) the price per share payable by the Company for ordinary shares purchased pursuant to this resolution shall be equal to the volume weighted average price of the ordinary shares for the consecutive trading-day period established by the Board that ends on the trading day immediately prior to the date on which such Share Repurchase Agreement is entered into, as displayed under the heading “VWAP” on the applicable Bloomberg page or on or by another third-party market data provider approved by the Board; (iv) the consecutive trading-day period established by the Board pursuant to this resolution shall not be fewer than five consecutive trading days nor greater than ninety consecutive trading days; and (v) the Company shall not purchase more than 200,000,000 ordinary shares pursuant to this resolution (without giving effect to purchases pursuant to any other resolution); and further

RESOLVED, that any ordinary shares that the Company purchases pursuant to the foregoing resolution may be held by it as treasury shares, and may, at the Company’s option, be cancelled, sold, transferred for the purposes of or under an employee share scheme or held without cancelling, selling or transferring them.

PROPOSAL 6:   SHARE REPURCHASES FROM ANY WHOLLY OWNED SUBSIDIARY

As noted above, as a company incorporated in Jersey, Channel Islands and subject to the Companies (Jersey) Law 1991, Clarivate may only effect purchases of its own ordinary shares other than on a stock exchange pursuant to a special resolution of its shareholders, and only if the purchase is made on the terms of a written purchase contract which has been approved in advance by an ordinary resolution of its shareholders. This requirement includes repurchases of shares that may be held by wholly owned subsidiaries from time to time.

The Company is seeking shareholder approval to permit it to repurchase its ordinary shares from time to time from any wholly owned subsidiary as approved by the Board of Directors, subject to the following terms and conditions:

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This purchase authority shall extend from May 6, 2021 to May 5, 2026, inclusive.

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Each purchase from a wholly owned subsidiary shall be executed pursuant to a Share Repurchase Agreement between Clarivate and the wholly owned subsidiary substantially in the form set forth in Appendix E hereto.

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The price per share payable by Clarivate shall be for nominal consideration only.

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Any ordinary shares that Clarivate purchases may be held by it as treasury shares, and may, at Clarivate’s option, be cancelled, sold, transferred for the purposes of or under an employee share scheme or held without cancelling, selling or transferring them.

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Vote Required and Recommendation

The Company will be authorized to repurchase shares from any wholly owned subsidiary if approved by two-thirds of the votes cast by, or on behalf of, the shareholders entitled to vote in person or represented by proxy and (ii) a simple majority of the votes cast by, or on behalf of, the shareholders

 

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entitled to vote in person or represented by proxy, excluding for purposes of this clause (ii) votes cast by the applicable wholly owned subsidiary shareholder.

Text of Proposed Resolutions

RESOLVED AS A SPECIAL RESOLUTION, that the Company is hereby authorized to purchase up to 300,000,000 of its ordinary shares from time to time from any wholly owned subsidiary of the Company as approved by the Board of Directors; provided that (i) this purchase authority shall extend from May 6, 2021 to May 5, 2031, inclusive; (ii) each purchase from a wholly owned subsidiary shall be executed pursuant to a Share Repurchase Agreement between the Company and such wholly owned subsidiary substantially in the form set forth in Appendix E hereto; and (iii) the price per share payable by the Company shall be for nominal consideration only; and further

RESOLVED, that any ordinary shares that the Company purchases pursuant to the foregoing resolution may be held by it as treasury shares, and may, at the Company’s option, be cancelled, sold, transferred for the purposes of or under an employee share scheme or held without cancelling, selling or transferring them.

 

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Vote Required and Recommendation

The proposal will be passed if approved by a simple majority of the votes cast by, or on behalf of, the shareholders entitled to vote in person or represented by proxy.

Text of Proposed Resolutions

RESOLVED, that the shareholders of the Company hereby approve, on an advisory, nonbinding basis, the compensation of our named executive officers as disclosed in this Proxy Statement.

PROPOSAL 8:   ADVISORY VOTE ON FREQUENCY OF EXECUTIVE COMPENSATION ADVISORY VOTES

The vote described in this proposal will enable our shareholders to indicate how frequently we should seek an advisory vote, such as Proposal 7 above, on the compensation of our NEOs as disclosed pursuant to the SEC’s compensation disclosure rules. By voting on this Proposal 8, shareholders may indicate whether they would prefer an advisory vote on NEO compensation every one, two or three years.

The Board believes that an advisory vote on executive compensation that occurs every year (annually) is the most appropriate alternative for our shareholders and for Clarivate. Therefore, our Board recommends that you vote for one year intervals for the advisory vote on executive compensation. In formulating its recommendation, our Board carefully considered the interval that would be most appropriate for our shareholders. The Board believes that an annual advisory vote on executive compensation will allow our shareholders to provide us with timely input on our compensation philosophy, policies and practices as disclosed in our proxy statements.

You may cast a vote on your preferred voting frequency by choosing the option of one year, two years or three years, or you may abstain from voting. While the result of this advisory vote will be considered by the Board as valuable feedback, this is an advisory resolution that is not binding on the Board, the HRCC, or Clarivate. The Board may decide that it is in the best interests of our shareholders and Clarivate to hold an advisory vote on executive compensation more or less frequently than the option approved by our shareholders.

Vote Required and Recommendation

The option of one year, two years or three years that receives the highest number of votes cast by shareholders will be the frequency for the advisory vote on executive compensation that has been selected by shareholders.

Text of Proposed Resolutions

RESOLVED, that the shareholders of the Company hereby approve, on an advisory, nonbinding basis, an advisory vote on the compensation of our named executive officers to occur every year (annually).

 

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PROPOSAL 9:   RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTANTS

The Audit Committee of the Board, which is composed entirely of independent directors, has selected PwC as the independent registered public accountants to audit our books, records, and accounts and those of our subsidiaries for the fiscal year 2021. The Board has endorsed this appointment. Ratification of the selection of PwC by shareholders is not required by law and is being sought on a non-binding and advisory basis. However, as a matter of good corporate practice, such selection is being submitted to the shareholders for ratification at the Annual General Meeting. If the shareholders do not ratify the selection, the Board and the Audit Committee will reconsider whether or not to retain PwC, but may, in their discretion, retain PwC. Even if the selection is ratified, the Audit Committee, in its discretion, may change the appointment at any time during the year if it determines that such change would be in the best interests of Clarivate and its shareholders.

PwC previously audited our consolidated financial statements or those of our predecessor since 2016. Representatives of PwC will be present via telephone at the Annual General Meeting. They will have an opportunity to make a statement, if they desire to do so, and will be available to respond to appropriate shareholder questions.

Audit, Audit-Related and Tax Fees

In connection with the audit of the Company’s financial statements for the fiscal year ended December 31, 2020, we entered into an engagement letter with PwC that sets forth the terms by which PwC performed audit services for us. Aggregate fees for professional services rendered for us by PwC for the fiscal years ended December 31, 2020 and 2019, respectively, were as follows:

Audit Fees.   Audit fees consist of fees billed for professional services rendered for the audit of our consolidated financial statements, the statutory audit of our subsidiaries, the review of our interim consolidated financial statements, and other services provided in connection with statutory and regulatory filings.

Audit-Related Fees.   Audit-related fees consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s consolidated financial statements and are not reported under “Audit Fees.” These services may include employee benefit plan audits, due diligence services related to acquisitions and divestitures, auditing work in proposed transactions, attestation services that are not required by regulation or statute and consultations regarding financial accounting or reporting standards. For 2020, audit-related fees included approximately $21,000. For 2019, audit-related fees included approximately $250,000 for consultations regarding reporting standards.

Tax Fees.   Tax fees consist of tax compliance consultants, preparation of tax reports, and other tax services.

All Other Fees.   All other fees for 2020 and 2019 consisted of license fees for utilization of technical databases.

Audit Committee Pre-Approval Policies and Procedures

The Audit Committee has implemented pre-approval policies and procedures related to the provision of audit and non- audit services by PwC. Under these procedures, the Audit Committee pre-approves both the type of services to be provided by PwC and the estimated fees related to these services.

 

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During the approval process, the Audit Committee considers the impact of the types of services and the related fees on the independence of the registered public accountants. The services and fees must be deemed compatible with the maintenance of such accountants’ independence, including compliance with rules and regulations of the SEC and the NYSE. The Audit Committee does not delegate its responsibilities to pre-approve services performed by PwC to management or to any individual member of the Audit Committee. Throughout the year, the Audit Committee will review any revisions to the estimates of audit and non-audit fees initially approved.

Vote Required and Recommendation

Ratification of the appointment of PwC if approved by a simple majority of the votes cast by, or on behalf of, the shareholders entitled to vote in person or represented by proxy. Unless marked to the contrary, proxies received will be voted “FOR” this Proposal 9 regarding the ratification of PwC as our independent registered public accountants. In the event ratification is not obtained, the Audit Committee will review its future selection of our independent registered public accountants.

Text of Proposed Resolutions

RESOLVED, that the shareholders of the Company hereby ratify the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accountants for the fiscal year 2021 on a non-binding and advisory basis.

CORPORATE GOVERNANCE AND BOARD OF DIRECTORS

Board Leadership Structure

The Board of Directors of Clarivate believes strongly in the value of an independent board of directors to provide effective oversight of management. Of the eleven members of our Board of Directors, ten are independent. This includes all members of the Audit Committee, the Human Resources and Compensation Committee, the Nominating and Corporate Governance Committee and the Risk Committee. The independent members of the Board of Directors meet regularly without management, which meetings are chaired by the Lead Independent Director, whose role is described further below.

The Board believes it is important to retain its flexibility to allocate the responsibilities of the offices of the Chairman and Chief Executive Officer (“CEO”) in any way that it deems to be in the best interests of the Company. Jerre Stead, who has served as our Executive Chairman since May 2019, was appointed Executive Chairman and CEO shortly after the closing of the merger with Churchill Capital Corp. Mr. Stead possesses detailed and in-depth knowledge of the business of Clarivate and the opportunities we have in the global marketplace and is thus well positioned to develop agendas that ensure that the Board’s time and attention are focused on the most critical matters.

Each of the Company’s directors, other than Mr. Stead, are independent (see “Independence of Directors” below). The Board believes that the independent directors provide effective oversight of management. In addition, Clarivate has established a Lead Independent Director role with broad authority and responsibility. Anthony Munk has served as our Lead Independent Director since May 2020. The Lead Independent Director’s authorities include:

•

presiding at all meetings of the Independent Directors, including executive sessions;

​

•

being available for periodic consultation and direct communication with the Company’s major shareholders;

​

•

assisting in the recruitment of Board candidates;

​

•

having active involvement in Board evaluations;

​

 

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•

having active involvement in establishing committee membership and committee chairs;

​

•

having active involvement in the evaluation of the Chief Executive Officer;

​

•

providing Board performance feedback to the Chairman;

​

•

communicating with the independent directors between meetings, when appropriate;

​

•

recommending consultants and independent advisors to the Board as necessary or appropriate;

​

•

serving as interim Chairman in the event of an unforeseen vacancy;

​

•

calling meetings of the independent directors;

​

•

attending meetings of all committees of the Board;

​

•

in collaboration with the Chairman, developing an annual Board agenda;

​

•

in collaboration with the Chairman, developing Board meeting agendas, ensuring critical issues are included and ensuring that there is sufficient time for discussion of all agenda items; and

​

•

advising the Chairman on the quality, quantity, appropriateness and timeliness of information provided to the Board.

​

The Board believes that these authorities appropriately and effectively complement the Board leadership structure of Clarivate.

The Role of the Board of Directors in Risk Oversight

We believe that risk is inherent in innovation and the pursuit of long-term growth opportunities. Management at Clarivate is responsible for day-to-day risk management activities. The Company has formed a management risk committee to supervise these day-to-day risk management efforts, including identifying potential material risks and appropriate and reasonable risk mitigation efforts. The Board of Directors, acting directly and through its committees, is responsible for the oversight of the Company’s risk management. With the oversight of the Board, we have implemented practices and programs designed to help manage the risks to which we are exposed in our business and to align risk-taking appropriately with our efforts to increase shareholder value. Each of the Board’s four committees — Audit, Human Resources and Compensation, Nominating and Corporate Governance and Risk — has a role in assisting the Board in its oversight of the Company’s risk management, as set forth in the relevant committee charters.

The Board’s Risk Committee brings additional Board-level focus to the oversight of the Company’s management of key risks, as well as the Company’s policies and processes for monitoring and mitigating such risks. The Risk Committee meets not less frequently than quarterly. The Chair of the Risk Committee gives regular reports of the Risk Committee’s meetings and activities to the Audit Committee in order to keep the Audit Committee informed of the Company’s guidelines, policies and practices with respect to risk assessment and risk management; and each committee reports regularly to the full Board of Directors on its activities.

In addition, the Board of Directors participates in regular discussions among the Board and with senior management on many core subjects, including strategy, operations, finance, information technology, human resources, legal and public policy matters, and any other subjects regarding which the Board or its committees consider risk oversight an inherent element. The Board of Directors believes that the leadership structure described above under “Board Leadership Structure” facilitates the Board’s oversight of risk management because it allows the Board, with leadership from the Lead Independent Director and working through its independent committees, to participate actively in the oversight of management’s actions.

Business Experience and Qualifications of Board Members and Director Nominees

2021 Nominees for Class II Director

Valeria Alberola, 49, was nominated by the Board to stand for election at the Annual General Meeting. Ms. Alberola serves as the Chief Executive Officer of ZOMALAB and brings over 25 years of

 

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international experience in corporate finance, investment banking, operations and strategic management consulting. Prior to joining ZOMALAB, she was the CFO of Bridge Education Group, an international education company, where she helped scale the organization to 10 locations in the U.S. and Latin America to serve over 3,000 students annually. Previously, she was a partner at Q Advisors, a San Francisco and Denver-based investment banking firm, where she executed private and public transactions, including mergers and acquisitions and debt and equity financings for technology and telecommunications clients in the U.S. and internationally. Prior to Q Advisors, Ms. Alberola was the Director of Business Development for VeloCom, an international telecommunications company, where she was involved in acquisition and capital raising activities. She was also a strategic management consultant with McKinsey & Company in Santiago, Chile, and an equity analyst with Citigroup in São Paulo, Brazil. Ms. Alberola is a founding board member of Endeavor Colorado and a past board member of Colorado’s Technology Association, Graland Country Day School, OpenWorld Learning and the Boys & Girls Clubs of Metro Denver. Ms. Alberola received a B.S. in Economics and Business Administration from the Pontificia Universidad Católica de Chile and an M.B.A. from the Kellogg School of Management at Northwestern University, where she was a Fulbright scholar. Ms. Alberola was selected to serve on the Board of Directors due to her significant international experience in corporate finance, mergers and acquisitions and operations.

Usama N. Cortas, 43, has been a member of our Board since October 2020 and is currently a Partner with LGP. Prior to joining LGP in 2003, Mr. Cortas worked in the Investment Banking Division of Morgan Stanley in their New York office from 2000 to 2003. Mr. Cortas currently also serves on the boards of the following privately held companies or their affiliates: Authentic Brands Group, ECI Solutions, Ellucian, and Insight Global, and has served on the boards of CCC Information Services, CPA Global, Tank Holdings Corp., The Sports Authority and United States Infrastructure Corporation, among others. He earned a Bachelor of Arts degree in Economics-Political Science from Columbia University.

Adam T. Levyn, 37, has been a member of our Board since October 2020 and is currently a Principal with LGP. Prior to joining LGP in 2011, Mr. Levyn worked in private equity at Kohlberg Kravis Roberts & Co. in their New York office from 2007 to 2009 and in the Global Industrials Group of Bear, Stearns & Co. Inc. in their New York office from 2005 to 2007. Mr. Levyn currently also serves on the boards of the following privately held companies or their affiliates: CHG Healthcare Services, ExamWorks, Restorix Health, Service Logic and SRS Distribution, and has served on the boards of CPA Global, Tank Holdings Corp. and United States Infrastructure Corporation, among others. He earned a Bachelor of Arts degree in Economics from Princeton University and a M.B.A. from Harvard Business School.

Charles J. Neral, 62, has been a member of our Board since May 2019 and also serves on the board of directors of SAI Global. In 2016, he founded Neral Associates, LLC which provides advisory services to public and private clients. Prior to that, from July 2012 to January 2016, Mr. Neral served as the Senior Vice President and Chief Financial Officer of SunGard. He also served as the Senior Vice President and Chief Financial Officer of SafeNet from October 2009 to June 2012. From 1981 to 2009, Mr. Neral served in a variety of positions across IBM’s Sales, Server, Global Services and Software Business lines including executive roles in Asia Pacific, IBM Corporate Headquarters and ultimately serving as the Chief Financial Executive of IBM’s Software Segment (2004 to 2009). Mr. Neral holds a B.S. in Computer Science from Indiana University of Pennsylvania and an MBA in Finance from New York University. Mr. Neral was selected to serve on the Board of Directors due to his significant business and advisory experience.

Roxane White, 57, is a results-driven strategic advisor and leader with a passion for community engagement and public policy. She has extensive executive leadership expertise as the CEO of local, statewide, and national nonprofits, as a Cabinet Secretary, and as Chief of Staff to a mayor and a governor. Ms. White has served in the public sector as a gubernatorial cabinet secretary and Chief of Staff for eleven years, and most recently has been supporting state leaders throughout the United States with income inequality, workforce, and innovation through her company, Strategy with Rox. From her early career building nonprofit organizations, to more recent work as the Innovator in Residence at The Aspen Institute, Ms. White has delivered impactful results to communities across the nation. In her almost thirty years as a CEO and a leader, she has managed public relations crises and natural disasters,

 

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to strategic redirections and negotiating the first maternal child health Pay For Success project in the United States. Throughout her career, Ms. White has led strategic thinking and planning processes for large, multi-state entities, employee groups of thousands of individuals, and small entities with volunteer staff. She has a Master of Social Work from San Francisco State University, a Master of Divinity from San Francisco Theological Seminary and a Bachelor of Arts from Lewis and Clark College. Ms. White has a long history of professional experience serving on boards of directors including the Rose Community Foundation, Garrett Evangelical Seminary, the Downtown Denver Partnership Civic Ventures Board, and the Mobility from Poverty Commission established by the Bill and Melinda Gates Foundation. She was also appointed by the Governor of Colorado to the State Personnel Board. In 2020, Ms. White served as the Co-Chair of Help Colorado Now to speed Colorado’s Coronavirus recovery. Ms. White was selected to serve on the Board of Directors due to her significant executive leadership experience.

Class III Directors

Jerre Stead, 78, has been Chief Executive Officer of the Company since June 2019 and Executive Chairman of our Board since May 2019. Mr. Stead served as Chairman and Chief Executive Officer of IHS Markit Ltd., a world leader in critical information, analytics and solutions, from its formation in 2016 through 2017 and as Executive Chairman of its predecessor company, IHS Inc., from 2000 through 2016 and as both Chairman and Chief Executive Officer from 2015 through 2016 and from 2006 through 2013. Mr. Stead previously served as Co-Chief Executive Officer of DTN LLC, which provides services in relation to the delivery of weather, agricultural, energy and commodity market information from 2017 to 2018 and also previously served as its Executive Chairman. Mr. Stead previously served as Chairman and CEO of Ingram Micro from 1996 to 2000 and as Chairman and CEO of Legent Corporation in 1995. Mr. Stead has also previously served as Chairman and CEO of Honeywell-Phillips Medical Electronics, Chairman and CEO of Square D Company and Chairman and CEO of AT&T Global Information Solutions. Mr. Stead has served on over 30 corporate boards during his career and in 2017 received the B. Kenneth West Lifetime Achievement Award from the National Association of Corporate Directors. Mr. Stead is a graduate of the University of Iowa, where he earned a bachelor’s degree in business administration, and of the Harvard University Advanced Management Program in Switzerland. Mr. Stead was selected to serve on the Board of Directors due to his significant experience leading and growing companies in information services.

Kosty Gilis, 47, has been a member of our Board since January 2019. Mr. Gilis is a Managing Director of Onex. Since joining Onex in 2004, Mr. Gilis has worked on numerous private equity transactions including the acquisitions and realizations of Allison Transmission and Tomkins plc, and the acquisitions of Emerald Expositions, WireCo Worldgroup and SMG. Mr. Gilis currently also serves on the boards of Emerald Holdings, Inc. and ASM Global (f/k/a SMG) and previously served on the boards of Allison Transmission Holdings, Inc., Gates Global Inc. and WireCo Worldgroup Inc. Prior to joining Onex, Mr. Gilis was a Vice President at Willis Stein & Partners, a Chicago-based private equity firm and was a management consultant at Bain & Company in Toronto, Canada and Johannesburg, South Africa. Mr. Gilis is a graduate of The Wharton School of the University of Pennsylvania, where he earned a B.S. in Economics, and Harvard Business School, where he earned an MBA. Mr. Gilis was selected to serve on the Board of Directors due to his significant experience in a variety of financing transactions and investments in business and information services companies.

Nicholas Macksey, 41, has been a member of our Board since May 2019. Mr. Macksey is a Managing Director of Baring. Since joining Baring in 2006, Mr. Macksey has worked on numerous private equity transactions. These transactions include Courts Asia Limited, Nord Anglia Education Inc., Vistra Group Limited, SAI Global Limited and Giant Interactive Group Inc. Prior to joining Baring, Mr. Macksey was a Senior Associate at Westpac Institutional Bank. Mr. Macksey has served on the board of directors of Vistra Group since 2015 and has served on the board of directors of SAI Global since 2016 and has served on the board of directors of Nord Anglia Education since 2017. Mr. Macksey graduated with a Bachelor of Commerce and a B.S. in Economics from the University of Queensland and is also a CFA charter holder. He was selected to serve on the Board due to his significant investment and business services experience.

Anthony Munk, 60, serves as our lead independent director and has been a member of the Company’s board since May 2019. Mr. Munk is a Vice Chairman of Onex Corporation, which he joined

 

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in 1988, and is Chair of Onex Partners’ Private Equity Committee. Mr. Munk currently also serves on the public company boards of Emerald Holdings, Inc. and JELD-WEN Holding, Inc. and the private company boards of Ryan LLC, SGS & Co, and WireCo Worldgroup Inc. Mr. Munk previously served on the board of directors of Barrick Gold, RSI Home Products, Husky Injection Molding Systems Ltd, Cineplex Inc., SMG Holdings, Inc., Jack’s Family Restaurants, and Save-A-Lot. Prior to joining Onex, Mr. Munk was a Vice President with First Boston Corporation in London, England and an Analyst with Guardian Capital in Toronto. Mr. Munk holds a B.A. (Honors) in Economics from Queen’s University. Mr. Munk was selected to serve on the Board of Directors due to his significant experience in a variety of strategic and financing transactions and investments.

Class I Directors

Sheryl von Blucher, 59, has been a member of our board since May 2019. Ms. von Blucher has over 30 years of experience in a variety of roles in the global integrated energy, information services, technology services and software, and public and non-profit sectors. She has led strategic and portfolio planning, operations, and corporate finance and development for both domestic and international organizations. Ms. von Blucher served as Co-Chief Executive Officer of DTN LLC from 2017 to 2018. Prior to this, she joined IHS Inc. in 2000 as Senior Vice President of Planning and Corporate Development, and then served as an Advisor to the Chairman & CEO of the company from 2007 through 2017. Ms. von Blucher currently serves on the board of directors of Washington Prime Group, Inc., and Capital Canyon Club and Golf Development LLC. Ms. von Blucher holds a bachelor’s degree from Rice University and a master’s degree from Harvard University. Ms. von Blucher was selected to serve on the Board of Directors due to her significant experience as a senior executive in information services.

Jane Okun Bomba, 58, has been a member of our board since May 2020. Ms. Okun Bomba also serves on the board of directors of Service Source International since March 2020 and Brightview Holdings, Inc. since April 2019. Ms. Okun Bomba has served as President of Saddle Ridge Consulting since January 2018 and advises on a range of strategic issues, including investor relations, corporate perception and governance, transaction integration, human resources and ESG. Previously, from 2004 to 2017, Ms. Okun Bomba was an executive at IHS Markit Ltd (previously IHS Inc.), most recently as Executive Vice President, Chief Administrative Officer, where she led 450 people in corporate functions including HR, Marketing, Communications, Sustainability and Investor Relations. Prior to IHS, she was a partner at Genesis, Inc. and headed investor relations at Velocom, MediaOne Group, and Northwest Airlines. She held various management positions in corporate finance at Northwest Airlines and American Airlines, and was a CPA at PriceWaterhouse. Ms. Okun Bomba serves on the board of Kickstart International and is a member of the International Women’s Forum. She is a member of the University of Michigan, Ross School of Business Advisory Board and the School of Literature, Science and Arts Dean’s Advisory Committee. Ms. Okun Bomba holds both a BGS and an MBA from the University of Michigan at Ann Arbor. She completed graduate studies at the Stockholm School of Economics, and board director education in the Women’s Director Development Program at the Kellogg School of Management, Northwestern University and the Directors’ Consortium. Ms. Okun Bomba was selected to serve on the Board of Directors due to her significant experience in human resources, finance and investor relations.

Balakrishnan S. Iyer, 64, has been a member of Clarivate’s board since May 2019. Mr. Iyer has previously served as a board member of Skyworks Solutions Inc. from 2002 until 2020, Churchill Capital’s board from September 2019 to May 2019 and IHS Markit Ltd (previously IHS Inc.) from 2003 until April 2019. He has served on the board of Power Integrations, Inc. since 2004. Previously, Mr. Iyer was Senior Vice President and Chief Financial Officer of Conexant Systems, Inc. from 1998 to 2003. He held various leadership positions at VLSI Technology Inc., including Senior Vice President and Chief Financial Officer from 1997 to 1998 and Vice President, Corporate Controller from 1993 to 1997. Mr. Iyer served on the boards of directors of Conexant Systems from 2002 to 2011, Life Technologies (and its predecessor Invitrogen) from 2001 to 2014 and QLogic Corporation from 2003 to 2016. Mr. Iyer holds a B.Tech in Mechanical Engineering from the Indian Institute of Technology, Madras, an MS in Industrial Engineering from the University of California, Berkeley and an MBA in Finance from the Wharton School of the University of Pennsylvania. Mr. Iyer was selected to serve on the Board of Directors due to his significant financial and corporate governance experience in information services.

 

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Richard W. Roedel, 71, has been a member of our board since May 2020. Mr. Roedel also serves on the public company boards of directors of Brightview Holdings, Inc., Six Flags Entertainment Corporation, LSB Industries, Inc. and Luna Innovations Incorporated. Mr. Roedel serves as Non-Executive Chairman of Six Flags, LSB and Luna Innovations. Mr. Roedel has announced that he will be retiring from the Six Flags board at its annual meeting in May 2021. Mr. Roedel has previously served on the boards of IHS Markit Ltd (previously IHS Inc.), Lorillard, Inc., Sealy Corporation, BrightPoint, Inc, Broadview Holdings, Inc., Dade Behring Holdings, Inc. and Take-Two Interactive Software, Inc. Mr. Roedel is a member of the National Association of Corporate Directors (NACD) Risk Oversight Advisory Council. Mr. Roedel was appointed to a three year term, ending in 2017, on the Standing Advisory Group of the Public Company Accounting Oversight Board (PCAOB). Until 2000, Mr. Roedel was employed by BDO Seidman LLP, having been managing partner of its Chicago and New York Metropolitan area offices and later Chairman and CEO. Mr. Roedel is a graduate of The Ohio State University and a CPA. Mr. Roedel was selected to serve on the Board of Directors due to his significant finance, accounting and risk management experience.

Independence of Directors

We adhere to the rules of the NYSE in determining whether a director is independent. The NYSE listing standards generally define an “independent director” as a person other than an executive officer of a company or any other individual having a relationship which, in the opinion of the company’s board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The Board has determined that Sheryl von Blucher, Usama N. Cortas, Kosty Gilis, Balakrishnan S. Iyer, Adam T. Levyn, Nicholas Macksey, Anthony Munk, Charles J. Neral, Jane Okun Bomba and Richard W. Roedel are independent directors. The Board has also determined that director nominees Valeria Alberola and Roxane White would be independent if elected to the Board.

Directors’ Meeting Attendance

The Board held 12 meetings during 2020. At each meeting, the Executive Chairman was the presiding director. Each director attended at least 75 percent of the total regularly scheduled and special meetings of the Board and the committees on which they served. Our Board expects each director to attend our Annual General Meeting of Shareholders via telephone, although attendance is not required.

Simultaneous Service on Other Public Company Boards

The Board does not believe that its members should be prohibited from serving on boards of other organizations and has not adopted any guidelines limiting such activities. However, as set forth in the Audit Committee charter and the Company’s Corporate Governance Guidelines (available at http://ir.clarivate.com), no Audit Committee member may simultaneously serve on the audit committee of more than two other public companies, unless the Board determines that such simultaneous service would not impair the ability of the member to effectively serve on the Audit Committee and this determination is disclosed in accordance with NYSE rules. The Board has determined that the service of Mr. Roedel on the audit committees of three public companies in addition to the Company’s Audit Committee does not impair his ability to serve effectively on the Company’s Audit Committee.

In addition, other than with respect to any directors and director candidates designated pursuant to the Investor Rights Agreement (for so long as such agreement is in effect), for whom the Nominating and Corporate Governance Committee does not provide a recommendation to the Board, the Nominating and Corporate Governance Committee may take into account the nature of and time involved in a director’s service on other boards and/or committees in evaluating the suitability of individual director candidates and current directors.

Family Relationships

There are no family relationships between any of Clarivate’s executive officers and directors.

 

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Compensation Committee Interlocks and Insider Participation

During 2020, none of our executive officers served on the board of directors or compensation committee of a company that has an executive officer that serves on our Board of Directors or the Human Resources and Compensation Committee.

Code of Conduct

Clarivate has adopted a Code of Conduct that applies to all of its employees, officers, and directors. This includes Clarivate’s principal executive officer, principal financial officer, and principal accounting officer or controller, or persons performing similar functions. The full text of Clarivate’s Code of Conduct is posted on its website at http://ir.clarivate.com. Clarivate intends to disclose on its website any future amendments of the Code of Conduct or waivers that exempt any principal executive officer, principal financial officer, principal accounting officer or controller, persons performing similar functions, or Clarivate’s directors from provisions in the Code of Conduct.

Communications with the Board

If you wish to communicate with the Board as a whole, with any Committee, with any one or more individual directors, or with our non-management directors, you may send your written communication to:

Stephen Hartman
General Counsel, Global Head of Corporate Development and Secretary
Clarivate Plc
Friars House
160 Blackfriars Road
London SE1 8EZ
United Kingdom

Board Committees

In 2020, our Board had four standing committees: the Audit Committee, the Human Resources and Compensation Committee, the Nominating and Corporate Governance Committee and the Risk Committee. We believe that all members of each of these committees meet the independence standards of the NYSE and SEC rules and regulations. The Board has approved a charter for each of the standing committees, each of which can be found on our website at http://ir.clarivate.com.

 

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(1)

Mr. Munk is our Lead Independent Director.

​

Audit Committee

Members —

Charles J. Neral, Chairperson
Balakrishnan S. Iyer
Richard W. Roedel

The Board has established an Audit Committee composed of independent directors. Each of the members of the Audit Committee is independent under NYSE listing standards and SEC rules. The Audit Committee has a written charter. The purpose of the Audit Committee is, among other things, to appoint, retain, set compensation of, and supervise Clarivate’s independent accountants, review the results and scope of the audit and other accounting related services and review Clarivate’s accounting practices and systems of internal accounting and disclosure controls.

Financial Experts on Audit Committee

The Audit Committee will at all times be composed exclusively of  “independent directors,” as defined for Audit Committee members under the NYSE listing standards and the rules and regulations of the SEC, who are “financially literate.” “Financially literate” generally means being able to read and understand fundamental financial statements, including a company’s balance sheet, income statement and cash flow statement. In addition, Clarivate is required to certify to the NYSE that the committee has, and will continue to have, at least one member who has past employment experience in finance or accounting, requisite professional certification in accounting, or other comparable experience or background that results in the individual’s financial sophistication. The Board has determined that each member of the Audit Committee meets the definition of  “audit committee financial expert” as defined in Item 407(d)(5)(ii) of Regulation S-K promulgated by the SEC.

Human Resources and Compensation Committee

Members —

Jane Okun Bomba, Chairperson
Sheryl von Blucher
Usama N. Cortas

 

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The Board has established a compensation committee that was renamed the “Human Resources and Compensation Committee” in February 2021 in recognition of the broad and strategic mandate of the committee. The Human Resources and Compensation Committee has a written charter. The purpose of the Human Resources and Compensation Committee is to review and approve compensation paid to Clarivate’s officers and directors and to administer Clarivate’s incentive compensation plans, including authority to make and modify awards under such plans.

Each of the members of the Human Resources and Compensation Committee is independent under NYSE listing standards and is a “non- employee director” and satisfies the requirements of a “nonemployee director” for purposes of Section 16 of the Exchange Act.

See “Determination of Executive Compensation: Role of the Human Resources and Compensation Committee” in the CD&A for more information on the roles and responsibilities of the HRCC.

Nominating and Corporate Governance Committee

Members —

Sheryl von Blucher, Chairperson
Jane Okun Bomba
Anthony Munk

The Board has established a Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee has a written charter. The Nominating and Corporate Governance Committee is responsible for overseeing the selection of persons to be nominated to serve on the Board. Each of the members of the Nominating and Corporate Governance Committee is independent under NYSE listing standards.

Risk Committee

Members —

Balakrishnan S. Iyer, Chairperson
Sheryl von Blucher
Charles J. Neral Richard W. Roedel

The Risk Committee has been created by our Board to assist our Board in its oversight of the Company’s risk management. The Risk Committee has a written charter. In addition to any other responsibilities which may be assigned from time to time by the Board, the Risk Committee is responsible for (i) reviewing and discussing with management the Company’s risk management and risk assessment processes, including any policies and procedures for the identification, evaluation and mitigation of major risks of the Company; (ii) receiving periodic reports from management as to efforts to monitor, control and mitigate major risks; and (iii) reviewing periodic reports from management on selected risk topics as the Risk Committee deems appropriate from time to time, encompassing major risks other than those delegated by the Board to other Committees of the Board in their respective charters or otherwise. Each of the members of the Risk Committee is independent under NYSE listing standards.

Director Nominations

Subject to the requirements of the Investor Rights Agreement discussed under “Certain Relationships and Related Person Transactions,” the Nominating and Corporate Governance Committee will consider persons identified by its members, management, shareholders, investment bankers and others. The guidelines for selecting nominees, which are specified in the Nominating and Corporate Governance Committee charter, generally provide that persons to be nominated:

•

should have demonstrated notable or significant achievements in business, education or public service;

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•

should possess the requisite intelligence, education and experience to make a significant contribution to the board of directors and bring a range of skills, diverse perspectives and backgrounds to its deliberations; and

​

•

should have the highest ethical standards, a strong sense of professionalism and intense dedication to serving the interests of the shareholders.

​

The Nominating and Corporate Governance Committee will consider a number of qualifications relating to management and leadership experience, background and integrity and professionalism in evaluating a person’s candidacy for membership on the board of directors. The Nominating and Corporate Governance Committee may require certain skills or attributes, such as financial or accounting experience, to meet specific Board needs that arise from time to time and will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of Board members. Subject to the requirements of the Investor Rights Agreement, the Nominating and Corporate Governance Committee will not distinguish among nominees recommended by shareholders and other persons.

Director Compensation

Non-employee directors who were serving at the time of the Annual General Meeting in 2020 and are not employees or affiliates of Onex, Baring or LGP, receive compensation comprised of an annual retainer for Board service, a grant of Restricted Share Units (“RSUs”), and an annual retainer for committee chairs as described in the table below. Directors who resigned as of May 7, 2020, the date of the Annual General Meeting in 2020, were compensated according to the 2019 director compensation program, which included and annual retainer of  $75,000 and meeting fees of  $18,750 per meeting.

(1)

Directors may elect to receive payment of their retainers in cash, shares, or a combination of cash and shares.

​

In addition to the fees described above, reimbursement is provided for travel, lodging and other reasonable expenses.

The Nominating and Corporate Governance Committee periodically evaluates the compensation of our non-employee directors, with the assistance of Pay Governance, the Human Resources and Compensation Committee’s consultant. Pay Governance reviews director pay levels and provides analyses on where the Company is positioned relative to the Company’s compensation. The Nominating and Corporate Governance Committee may bring recommendations for adjustments to non-employee director compensation to the Board for review and approval.

The following table provides information concerning the compensation of each of our non-employee directors who received compensation during fiscal year 2020.

 

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Non-Employee Director Compensation

(1)

The following directors did not receive compensation during 2020: Messrs. Gilis, Munk and Amir Motamedi as they are affiliates of Onex; Messrs. Scattarella and Macksey as they are affiliates of Baring; and Messrs. Cortas and Levyn as they are affiliates of LGP. Mr. Scattarella and Mr. Motamedi ceased service as directors effective May 7, 2020. Additionally, Mr. Stead, who serves as our CEO, did not receive any compensation for director services other than what is disclosed in the Summary Compensation Table.

​

(2)

The following directors elected to receive ordinary shares in lieu of cash fees: Ms. Okun Bomba received 2,672 ordinary shares in lieu of 100% of her cash retainers; Mr. Roedel received 1,975 ordinary shares in lieu of 100% of his cash retainers; and Ms. Von Blucher received 2,905 ordinary shares in lieu of 75% of her cash retainers.

​

(3)

On May 7, 2020, the date of the AGM, directors were awarded 6,748 RSUs with a value of $165,000. The number of RSUs granted was calculated by dividing $165,000 by $24.45, the closing price of Clarivate shares on the grant date, rounding down to the next whole share. These RSUs have a one-year vesting requirement. At the end of the fiscal year, Ms. Okun Bomba, Mr. Iyer, Mr. Neral, Mr. Roedel, Ms. Von Blucher, and Ms. Mills were each holding their 6,748 unvested RSUs. Mr. Klein forfeited his RSUs on October 30, 2020 upon his termination of service.

​

(4)

Ms. Okun Bomba and Mr. Roedel were elected as directors on May 7, 2020.

​

(5)

These directors have terminated service as of the following dates: Messrs. Broughton and Moran, May 7, 2020; Mr. Klein, October 30, 2020; and Ms. Mills, January 17, 2021.

​

The Articles of Association provide that, to the fullest extent permitted by law, the Company shall indemnify its directors and officers against any liability, action, proceeding, claim, demand, costs, damages or expenses, including legal expenses, which they may incur as a result of any act or failure to act in carrying out their functions in connection with the Company, other than such liability (if any) that they may incur by reason of their own actual fraud or willful default. The Company maintains a directors’ and officers’ liability policy for the benefit of any director or officer in the event of any loss or liability the director or officer may experience in respect of any negligence, default, breach of duty or breach of trust, whether or not we may otherwise indemnify such officer or director.

Executive Officers

Set forth below is information concerning our executive officers as of March 4, 2021.

 

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Executive officers are appointed by our Board. Information about Mr. Stead is provided under “Continuing Directors with Terms Expiring at the Annual General Meeting in 2022” in this Proxy Statement. A brief biography for each of our other executive officers follows.

Richard Hanks has been the Chief Financial Officer of the Company since March 2017. Mr. Hanks served as Chief Financial Officer of BDP International from April 2013 to March 2017 and as Chief Financial Officer and an Executive Vice President of infoGROUP, Inc. from 2010 to 2013. Prior to that, Mr. Hanks served as Chief Operating Officer of Enterprise Media Group (EMG) of Dow Jones & Company Inc. from 2007 to 2010 and served as its Chief Commercial Officer and Senior Vice President of Financial & Enterprise Markets where he led the corporate and financial market verticals with responsibility for finance, sales, marketing and product strategy. From 1999 to 2006, Mr. Hanks served as Chief Financial Officer of Factiva, LLC. Prior to that, he served as Finance Director for the Corporate and Media Information Division of Reuters, Finance Director for the Financial Times Business Limited, Director of Operations Research and Internal Audit for SmithKline Beecham PLC and Senior Manager of Corporate Finance and Restructuring at PricewaterhouseCoopers. Mr. Hanks is a Chartered Accountant and is a graduate of the University of Nottingham, where he earned a bachelor’s degree with Honors in Industrial Economics.

Mukhtar Ahmed has been President, Science Group of the Company since September 2019. Mr. Ahmed joined the Company in January 2018 as President of Life Sciences. He brings with him a wealth of leadership experience, spanning across a 30-year career within the biopharmaceutical, health sciences and technology industries. Mr. Ahmed most recently served as President of eHealth Solutions at Bioclinica where he was responsible for a global business division that provided commercial cloud technologies and specialist services to the biopharmaceutical and medical devices sectors. Prior to that, he was the Global Vice President at Oracle Corporation. He also held senior executive positions with various multinational corporations including Parexel and Kendle International, as well as holding board-level positions with the UK National Health Service (NHS) and a number of venture capital and private equity backed companies. Mr. Ahmed holds a Bachelor of Science degree with honours in Applied Computer Systems from Brunel University, and a diploma in computing from Buckinghamshire College. He is a member of the Royal Society of Medicine, an independent council member for Brunel University and he chaired the Digital Health Committee for Life Sciences PA.

Jeff Roy has been President, IP Group of Clarivate since September 2019. He joined Clarivate in September 2017 as President of CompuMark. Prior to joining the Company, Mr. Roy was at the Intercontinental Exchange where he led operations and client support globally for ICE Data Services, a $2 billion financial data and analytics business. Prior to that, Mr. Roy was the founder and CEO of Implementation Factory, Inc., a boutique consulting firm that designed process-oriented software solutions and data products primarily for customers in the information, financial services and tax industries. He has more than 25 years of experience creating efficiency in global operations and developing new products that accelerate growth while meeting customer needs. Mr. Roy has also served on the Advisory Board of BoardProspects, Inc. He graduated with a Bachelor’s degree in Banking and Finance from Hofstra University.

Stephen Hartman has been General Counsel and Global Head of Corporate Development of the Company since July 2014. Prior to that, Mr. Hartman served as Deputy General Counsel, TR Professional, General Counsel for Thomson Scientific and as Chief Counsel (EMEA) for Thomson Financial. Before joining Thomson Reuters in 2000, Mr. Hartman served as European counsel for Primark. Mr. Hartman is a graduate of the University of Nottingham.

 

24

 

 

(2)

Capri Acquisitions Topco Limited (“Topco”) is the direct holder of record of the ordinary shares, and holds such ordinary shares on behalf of Green Equity Investors VII, L.P. (“GEI VII”), Green Equity Investors Side VII, L.P. (“GEI Side VII”), GEI VII Capri AIV, L.P. (“AIV”), Capri Coinvest LP (“Coinvest”), LGP Associates VII-A LLC (“Associates VII-A”), and LGP Associates VII-B LLC (“Associates VII-B” and together with GEI VII, GEI Side VII, AIV, Coinvest, and Associates VII-A, the “Investors”), through GEI VII Capri Holdings, LLC (“Holdings”). Topco is the direct holder of record of the ordinary shares reported and holds such ordinary shares on behalf of the Investors through Holdings. Of the 116,666,507 ordinary shares held by Topco on behalf of the Investors through Holdings, (i) GEI VII is the indirect owner of 33,763,998 ordinary shares, (ii) GEI Side VII is the indirect owner of 47,264,079 ordinary shares, (iii) AIV is the indirect owner of 6,234,835 ordinary shares, (iv) Coinvest is the indirect owner of 28,094,163, (v) Associates VII-A is the indirect owner of 121,171 ordinary shares, and (vi) Associates VII-B is the indirect owner of 1,188,261 ordinary shares. The address of Leonard Green & Partners, L.P. is 11111 Santa Monica Boulevard, Suite 2000, Los Angeles, CA 90025.

​

(3)

The information in the table above is based solely on information contained in this shareholder’s Schedule 13D under the Exchange Act filed by such shareholder with the SEC. Onex Partners IV LP is the record holder of 26,454,617 ordinary shares; Onex Partners IV PV LP is the record holder of 1,307,836 ordinary shares; Onex Partners IV Select LP is the record holder of 183,130 ordinary shares; Onex Partners IV GP LP is the record holder of 756,574 ordinary shares; Onex Camelot Co-Invest LP is the record holder of 15,480,085 ordinary shares; Onex US Principals LP is the record holder of 974,797 ordinary shares; and Onex Partners Holdings LLC is the record holder of 24,697,644 ordinary shares. Mr. Schwartz beneficially owns all of the shares held by Onex Corporation and directly controls New PCo GP Inc. Mr. Schwartz may be deemed to share beneficial ownership of the shares beneficially owned by Onex Corporation and New PCo GP Inc. Onex Corporation may be deemed to beneficially own the ordinary shares held by each of Onex Partners IV LP, Onex Partners IV PV LP, Onex Camelot Co-Invest LP, Onex Partners IV GP LP and Onex Partners IV Select LP, through Onex Corporation’s ownership of all of the common stock of Onex Partners Canadian GP Inc., which owns all of the equity of  (i) Onex Partners IV GP Limited, which is the general partner of Onex Partners IV GP LP, which is the general partner of each of Onex Partners IV LP, Onex Partners IV PV LP and Onex Camelot Co-Invest LP; and (ii) Onex Partners IV GP LLC, which is the general partner of Onex Partners IV Select LP. In addition, Onex Corporation may be deemed to beneficially own the ordinary shares held by (a) Onex US Principals LP, through Onex Corporation’s ownership of all of the equity of Onex Private Equity Holdings LLC, which owns all of the equity of Onex American Holdings GP LLC, the general partner of Onex US Principals LP; and (b) Onex Partners Holdings LLC, through Onex Corporation’s ownership of all of the equity of Onex Private Equity Holdings LLC, which owns all of the equity of Onex American Holdings Subco LLC, which is the majority owner of Onex Partners Holdings LLC. New PCo A LP is the record holder of 1,563,583 ordinary shares. New PCo GP Inc., the general partner of New PCo A LP, is an independent entity that is controlled by Mr. Gerald W. Schwartz and as such may be deemed to beneficially own all of the ordinary shares beneficially owned by New PCo GP Inc. Mr. Schwartz, the Chairman, President and Chief Executive Officer of Onex Corporation, owns shares representing a majority of the voting rights of the shares of Onex Corporation and as such may be deemed to beneficially own all of the ordinary shares beneficially owned by Onex Corporation. Mr. Schwartz disclaims any such beneficial ownership. Mr. Schwartz has indirect voting and investment control of Onex Corporation. The business address of each of Onex US Principals LP, Onex American Holdings GP LLC, Onex Partners IV GP LP, Onex Partners IV GP LLC, Onex Private Equity Holdings LLC, Onex American Holdings Subco LLC and Onex Partners Holdings LLC is 165 W Center Street, Suite 401, Marion, Ohio 43302. The business address of each of Onex Partners IV LP, Onex Partners IV PV LP, Onex Camelot Co-Invest LP and Onex Partners IV Select LP is 712 Fifth Avenue, 40th Floor, New York, NY 10019. The business address of each of the other holder is 161 Bay Street, Toronto, A6, M5J2S1.

​

(4)

The information in the table above is based solely on information contained in this shareholder’s Schedule 13G under the Exchange Act filed by such shareholder with the SEC. T. Rowe Price Associates Inc. has sole voting power of 18,741,727 ordinary shares and sole dispositive power of 67,336,131 ordinary shares. The address of T. Rowe Price Associates, Inc. is 100 East Pratt Street, Baltimore, Maryland 21202.

​

 

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(5)

The information in the table above is based solely on information contained in this shareholder’s Schedule 13D under the Exchange Act filed by such shareholder with the SEC. Selige Co-Investor Pooling Limited, Selige Co-Investor Pooling S.C.Sp, and Castik Capital S.a.r.l., have shared voting power and shared dispositive power over 38,089,963 ordinary shares. Selige Co-Investor Pooling Limited has its registered office at 22 Grenville Street, St. Helier, Jersey JE4 8PX, Channel Islands. Selige Co-Investor Pooling S.C.Sp has its registered office at 1 Route d’Esch, L-1470 Luxembourg. Castik Capital has its registered address at 1 Route d’Esch, L-1470 Luxembourg.

​

(6)

The information in the table above is based solely on information contained in the Schedule 13G under the Exchange Act jointly filed by Select Equity Group, L.P. (“Select L.P.”) and George S. Loening (“Loening”), who is the majority owner of Select L.P. Select L.P. and Loening have shared voting and dispositive power over 37,340.871 ordinary shares. The registered address of Castik Capital is 1 Route d’Esch, L-1470 Luxembourg.

​

(7)

The information in the table above is based solely on information contained in this shareholder’s Schedule 13D under the Exchange Act filed by such shareholder with the SEC. FMR LLC has sole voting power over 5,456,887 ordinary shares and the sole disposition over 31,581,694 ordinary shares. The address of FMR LLC is 245 Summer Street, Boston, Massachusetts 02210.

​

(8)

Includes (i) 4,358,074 ordinary shares held by Mr. Stead; (ii) 1,000,000 ordinary shares held by JMJS Group-II, LP, an affiliate of Mr. Stead; (iii) 1,000,000 ordinary shares held by Mr. Stead issuable upon the exercise of vested stock options; and (iv) 6,965,000 ordinary shares issuable upon the exercise of warrants held by Mr. Stead.

​

(9)

Includes (i) 3,291,442 ordinary shares; and (ii) 274,000 ordinary shares issuable upon the exercise of warrants held by Ms. von Blucher.

​

(10)

Mr. Cortas may be deemed to be the indirect beneficial owner of 116,666,507 ordinary shares held by Leonard Green & Partners, L.P. See Footnote 2 of this table. Mr. Cortas disclaims beneficial ownership of the ordinary shares reported herein except to the extent of his pecuniary interest therein and the information reported in this table shall not be deemed an admission that he is the beneficial owner of such securities for purposes of Section 16 or for any other purpose.

​

(11)

Includes (i) 8,856 ordinary shares directly held by Mr. Iyer, (i) 258,279 ordinary shares held indirectly by the Iyer Family Trust dated 1/25/2001 (the “Iyer Family Trust”), and (iii) 274,000 ordinary shares issuable upon the exercise of warrants held by the Iyer Family Trust. Mr. Iyer, as trustee, has voting and investment power over the shares held by the Iyer Family Trust.

​

(12)

Includes (i) 682 ordinary shares directly held; (ii) 20,505 ordinary shares indirectly held by Mr. Roedel’s spouse; and 4,090 ordinary shares held by Mr. Roedel’s Profit Sharing Plan.

​

(13)

Includes (i) 5,216 ordinary shares issuable upon settlement of RSUs held by Mr. Ahmed that will vest within 60 days of March 4, 2021; and (ii) 396,409 ordinary shares held by Mr. Ahmed issuable upon the exercise of vested stock options.

​

(14)

Includes (i) 5,216 ordinary shares issuable upon settlement of RSUs held by Mr. Hanks that will vest within 60 days of March 4, 2021; and (ii) 432,348 ordinary shares held by Mr. Hanks issuable upon the exercise of vested stock options.

​

(15)

Includes (i) 3,755 ordinary shares issuable upon settlement of RSUs held by Mr. Hartman that will vest within 60 days of March 4, 2021; and (ii) 342,231 ordinary shares held by Mr. Hartman issuable upon the exercise of vested stock options.

​

(16)

Includes (i) 5,216 ordinary shares issuable upon settlement of RSUs held by Mr. Roy that will vest within 60 days of March 4, 2021; and (ii) 413,587 ordinary shares held by Mr. Roy issuable upon the exercise of vested stock options.

​

(17)

Includes (i) 7,750,624 ordinary shares directly held; (ii) 117,949,381 ordinary shares indirectly held as described in Footnotes 9,11,12 and 13 above; (iii) 19,403 ordinary shares issuable upon settlement of RSUs that will vest within 60 days of March 4, 2021; (iv) 2,584,575 ordinary shares issuable upon the exercise of vested stock options; and (v) 7,513,000 ordinary shares issuable upon the exercise of warrants.

​

 

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SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING REQUIREMENTS

Because we were entitled to the exemptions applicable to “foreign private issuers” under the SEC’s rules until December 31, 2020, our executive officers and directors, and persons who own more than 10 percent of a registered class of our equity securities, were not subject to the reporting requirements or liability provisions Section 16 of the Exchange Act during 2020.

 

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COMPENSATION DISCUSSION AND ANALYSIS

Introduction

In our first full year as a public company, we focused on our very clear strategy, growing our business both organically and through multiple acquisitions, divesting non-core assets, realigning our commercial infrastructure through the establishment of three global business centers, and aligning our sales organization to optimize service to customers. Shareholders saw the value of their investment grow — Clarivate shares closed at $29.71 per share on December 31, 2020, providing our shareholders with a 76.8% increase in value for 2020. During this time, our peers’ average total shareholder return (“TSR”) was 11.7% and our next highest peer’s TSR was 74.4%.

2020 Total Shareholder Return

This performance was even more remarkable given that 2020 presented unparalleled challenges for our business and our colleagues. But our colleagues quickly overcame these challenges by swiftly adapting to a new work environment that served us well and will provide considerable benefits in the years ahead.

Throughout the year, we made significant progress across our strategic objectives including improving our colleague engagement and customer delight scores. We completed operational improvements, which helped to drive organic growth, and enhanced our IP and Science business segments with two transformative acquisitions. Our growth in the fourth quarter and full year 2020 reflects the benefits of these actions. The team also made tremendous strides with Environment, Social and Governance (“ESG”) initiatives and we look forward to publishing our first sustainability report in 2021.

No one could have predicted the impact of the global pandemic on the geographies and end-markets in which we operate. Despite these challenges and very difficult circumstances, our senior leadership team maintained flexibility to quickly pivot and capitalize, where possible, on the opportunities presented. In this section, we discuss our overarching view of the year, the fundamentals of who we are and our achievements, and how we responded to COVID-19 to continue to motivate and incent our colleagues. In some areas, the pandemic prevented us from attaining our vision that was set at the beginning of 2020. In other areas, we found that our resilience and focus on success allowed us to exceed expectations. The HRCC strived to take a balanced view of our corporate performance and made several unique but thoughtful and well-researched decisions in adapting our executive compensation program in a manner that they viewed to be appropriate given the circumstances.

This Compensation Discussion and Analysis (“CD&A”) details the objectives and elements of the Clarivate executive compensation program, describes the related processes of our HRCC in determining compensation provided to our NEOs, and discusses the compensation that they earned.

 

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For 2020, our NEOs were:

We are a leading global information services and analytics company serving the scientific research, intellectual property, and life sciences end-markets. We provide structured information and analytics to facilitate the discovery, protection and commercialization of scientific research, innovations and brands. Our product portfolio includes well-established, market-leading brands such as Web of Science, Derwent Innovation, Life Sciences, CompuMark, MarkMonitor and CPA Global. We believe that our flagship products hold a #1 or #2 global position by revenue across the respective markets they serve, including abstracting and indexing databases, life science regulatory and competitive intelligence, and intellectual property protection (including patent, trademarks and brand protection). We provide service to a large, diverse and global customer base. As of December 31, 2020, we had over 30,000 customers in more than 170 countries, including the top 30 pharmaceutical companies by revenue. We believe that the strong value proposition of our content, user interfaces, visualization and analytical tools, combined with the integration of our products and services into customers’ daily workflows, leads to our substantial customer loyalty as evidenced by their high propensity to renew their subscriptions with us. In 2020, we made significant accomplishments, grew substantially, and expanded our products and services, as described under “2020 Business Highlights” and “2020 Financial Results” below.

We are focused on maintaining a culture of superior engagement and accountability, an emphasis we have maintained since transitioning from a private-equity-held company to a public company in May 2019. We are moving forward with a sense of urgency and intense external curiosity about what drives success for our customers. We understand that our own success and future are inextricably linked to the success and future of the world around us, and that identifying and addressing gaps in our environment, social and governance performance will ultimately make us more globally competitive and allow us to drive profitable growth for the long-term.

The tenets of our corporate culture are fundamental to every decision we make, including acquisitions. We have constructed a strong operating philosophy and overarching ethos that are critical to our future success. And all of these elements are built on the foundation of a clear purpose, vision, mission and values. We have a vibrant, engaged workforce who is guided by our purpose, vision and mission in everything they do.

 

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Our core values are cultural cornerstones and deeply ingrained principles that guide all of our actions — internally and externally; they inform all employee-related processes such as hiring, performance evaluation, promotions and rewards.

Every year, we publicly commit to four strategic goals, which are built around our vision for Sustainability/ESG in our “virtuous circle.”

Introduction of Performance-Based Compensation

Upon becoming a public company in May 2019, we began designing our executive compensation programs to create a performance-based culture that rewards colleagues for collective performance and demonstration of our values and to align with our public shareholders. In 2020, we implemented equity programs and an Annual Incentive Plan (“AIP”) to recognize and reward our colleagues for their achievements.

Equity Programs

We consider share ownership to be a key component in our compensation programs because it aligns the goals of our colleagues with those of our shareholders and because we believe all colleagues

 

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should have an opportunity to take part in our success. Thus, we implemented equity programs that ensure all of our colleagues have an opportunity to be shareholders. Our key equity programs include a Long-Term Incentive (“LTI”) program for NEOs and senior management, which is composed of performance-based restricted share units (“PSUs) and restricted share units (“RSUs”) for our most senior executives, and our Customer Delight program that, provided we meet our Customer Delight goals, makes RSUs available for colleagues not otherwise eligible for the LTI program. Additionally, we provide RSUs to a limited number of our highest and most critical performers (including those in our High Performing program) who are not eligible to participate in the LTI program. For further details, see “2020 LTI Program.”

Annual Incentive Plan

Our AIP provides cash incentives tied to annual pre-established financial goals with a Customer Delight additive modifier and a lever for individual performance. For details, see “2020 Annual Incentive Plan” below.

2020 Business Highlights

Clarivate had an exciting year in 2020 and had measurable success in multiple areas. Some of our key accomplishments include:

•

Completing strategic acquisitions to support the expansion of our core business segments and provide us with growth potential:

​

•

Decision Resources Group in February 2020 to complete our life sciences value chain;

​

•

CPA Global in October 2020 to complete our IP value chain and transform our IP platform; and

​

•

Beijing incoPat Technology Co., Ltd. (“IncoPat”) in October 2020 and Hanlim IPS. Co., Ltd. (Hanlim”) in November 2020 to add IP product capabilities in Asia.

​

•

Divesting certain non-core assets;

​

•

Realigning our commercial infrastructure to serve customers more efficiently, by establishing three global business centers, building a strategic sales organization and managing most customers through inside sales to free up field sales time and optimize cost-to-serve;

​

•

Delivering on cost savings and efficiency initiatives by optimizing headcount in response to our strategic acquisitions, rationalizing facilities and insourcing application development;

​

•

Enhancing productivity and work fulfillment in spite of the pandemic by developing new and more productive ways to work and examining and improving every process and workflow; and

​

•

Lowering our average cost of debt and extended our debt maturity profile.

​

 

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(1)

Results are for full-year as of December 31, 2019 and December 31, 2020.

​

(2)

See Appendix F for a reconciliation of our non-GAAP to GAAP financial measures.

​

Shareholder Engagement

Strong engagement with our shareholders is critically important to us, so we design our disclosures to be as open and transparent as possible in order to facilitate these important discussions which provide us with valuable input and feedback. In 2020, we introduced an executive compensation program that more tightly aligns our team with our shareholders and we held discussions with a number of shareholders regarding corporate governance. In 2021, we are proactively discussing with our shareholders both our executive compensation and corporate governance practices ahead of our 2021 Annual General Meeting. We also periodically reach out to our shareholders to discuss compensation and governance and we will consider the input we receive as we continue to refine our executive compensation program.

Sustainability and Environment/Social/Governance (“ESG”)

Recognizing that Sustainability and ESG are critical to Clarivate’s future success, a formal ESG commitment was launched in 2020. Built around four ESG pillars (i.e., governance, environment, colleagues and community) and aligned to the United Nations Sustainable Development Goals, our goal is to embed sustainability into the fiber and operations of the company and further strengthen the values-led company culture.

More information regarding our 2020 achievements and 2021 goals can be found at: https://clarivate.com/sustainability-at-clarivate/.

Compensation for Our Named Executive Officers

2020 Elements of Compensation at a Glance

Our executive compensation program is tailored to our strategic priorities and our current outlook, while also designed to motivate and retain our senior management team. Multiple components, described below, are utilized to achieve these objectives, with heavy emphasis on pay that is variable or at risk depending directly on performance against strategic corporate metrics. Additional detail on each compensation element is provided in the “2020 Executive Compensation Program in Detail” section.

 

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Compensation Mix — Performance Based/At Risk Compensation

The graphics below show the total target compensation mix of our CEO and our other NEOs. These illustrate that a majority of the NEO’s total target compensation is at risk (91% for our CEO and an average of 75% for our other NEOs). For purposes of these estimates, total compensation is composed of base salary, AIP target and LTI target, with AIP and LTI targets both counting as at-risk pay.

 

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Alignment of Pay to Business Objectives

With regard to our variable/at risk pay, we utilize multiple metrics to incentivize behavior that supports the achievement of our corporate goals.

The Impact of the Pandemic on our Results and Executive Compensation

Impact on Clarivate’s Operations

COVID-19, which was officially declared a pandemic in March 2020, led to a sudden decline in global economic activity. Our organic transactional revenues decreased due to an overall demand reduction primarily driven by economic conditions resulting from the COVID-19 pandemic.

Immediate Response

Our immediate response to the pandemic was focused on our colleagues’ safety and well-being. Our global leadership, led by our CEO and other executive leadership, quickly took actions to protect our colleagues’ health, safety, security and well-being, including:

•

Restrictions on travel;

​

 

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•

Self-quarantines and work-from-home requirements;

​

•

A re-evaluation of company resources and expenditures to ensure:

​

•

No layoffs, furloughs or reduction in pay or benefits due to the pandemic;

​

•

Support for a work-from-home model, including the provision of laptops, desks, chairs and other office accessories;

​

•

Supplemental support to colleagues, including an additional 10-day paid sick leave for individuals caring for elderly family members or children and an increase in volunteering days from 2 to 5; and

​

•

Continuation of annual merit increases, as planned.

​

•

Amendment of our 401(k) plan to provide more relief to participants with respect to loans and distributions, as permitted by the CARES Act;

​

•

Transparent communications to our global colleagues on management’s actions to advance our cultural priorities;

​

•

A Company donation of  $100,000 to community organizations selected by our Colleague Resource Groups, in addition to a $25,000 donation to the NAACP Legal Defense Fund; and

​

•

Providing sessions on mental health and providing colleagues with information and links to a wealth of support materials.

​

Long-Term Focus on Resilience

Our CEO and executive leadership engaged in a number of actions intended to assure our success during, through and after the pandemic. Many of these actions were already in progress at the start of the pandemic, given our focus on our values and performance-oriented culture. In light of the disruptions to typical performance metrics and the criticality of organizational resilience in response to the pandemic, the HRCC, in assessing performance, paid particular attention to a significant step-up in resilience that was required as a response to COVID-19. We determined that the key factors that drive our ongoing nimbleness and responsiveness as a Company are:

•

Colleague safety and well-being.   Safeguarding colleague safety and providing pandemic-related workforce support.

​

•

People and Culture/Human Capital Management.   Investing in all of our colleagues, who are our most important asset, ensuring that they feel included and supported to thrive and grow, and continue to drive our innovation; recognizing and rewarding all of our colleagues by giving them a proprietary stake in our company.

​

•

Finance and operations.   Managing through the macroeconomic uncertainty caused by the pandemic, optimizing the company’s revenue and liquidity and taking advantage of acquisition opportunities to accelerate our growth.

​

•

Sustainability: Environment, Social and Governance.   Adhering to the highest ethical environment, social, and governance standards, embracing the power of human ingenuity, and improving the future of our global community while bringing financial rewards to our colleagues and shareholders.

​

The table below describes the actions that our global leadership took to ensure a focus on resiliency resulting in a successful response to 2020’s crises and also preparing Clarivate to weather future challenges.

 

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Our Approach to Pay

Our Compensation Philosophy

Since transitioning from a private equity held company to a public company in May 2019, we have focused on aligning and simplifying our organization, instilling a strong sense of urgency and accountability and further structuring Clarivate for strong growth and profitability.

Our goal is to provide an executive compensation program that supports a pay for performance culture, serving the long-term interests of our shareholders while supporting our mission, vision and values. We believe that attracting and retaining superior talent and rewarding performance are key to delivering long-term shareholder returns, and that a competitive compensation program is critical to that end. Therefore, we strive to provide a competitive compensation package to our executives that is heavily weighted towards performance-based pay elements that align the interests of our executives with those of Clarivate shareholders.

We have designed our compensation and benefits program with the following goals in mind:

Objectives to Support Our Compensation Philosophy

In order to achieve the goals of our compensation and benefits program, we have adopted the following objectives and guidelines:

 

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2020 Executive Compensation Program in Detail

Below we provide detail on each of the components of our 2020 Executive Compensation program.

Base Salary

Base salary represents annual fixed compensation and is a standard element of compensation necessary to attract and retain executive leadership talent. In making base salary decisions for our NEOs other than the CEO, the HRCC considers the CEO’s recommendations, as well as each NEO’s position and level of responsibility within the Company. The HRCC also takes into account factors such as relevant market data, overall Company performance, individual performance and contributions, and internal equity within the Company.

Benchmarking conducted by our independent compensation consultant indicated our CEO was paid below the median base pay as compared to our compensation peer group. The HRCC approved an increase in his base salary from $600,000 to $750,000 in recognition of his CEO experience and leadership, bringing him closer to the median, but still under the 50th percentile. In light of the uncertainty in the market, Mr. Stead requested and we agreed to delay his salary increase, ordinarily implemented in April 2020, until October 2020. Given Mr. Stead’s successful track record and years of experience in the information and services industry, we will continue to closely review his compensation as compared to our 2021 peer group.

In 2020, we provided a salary increase to Mr. Hartman to better align with the market median in his peer group and in recognition of internal equity. We did not provide salary increases to the other NEOs in 2020. Base salary increases were provided during the course of 2019 to Messrs. Ahmed, Roy and Hartman in connection with a restructuring completed in 2019, to align their pay with the competitive market and recognize their increased areas of responsibility. We will continue to closely review our NEOs salaries as compared to our 2021 peer group.

During 2020, the HRCC determined the appropriate annual base salary rate for each NEO as follows:

(1)

Messrs. Ahmed and Hartman are based in the United Kingdom and both their 2020 and 2019 salaries have been converted to USD using a GBP:USD exchange rate of 1.3387, which is a rate set at the beginning of 2020 with a six-month forward look that we use for budget planning. The 2019 exchange rate, used for reporting their salaries in the prior year’s executive compensation tables, was GBP:USD 1.274.

​

2020 Annual Incentive Plan

Our AIP provides the opportunity for annual incentive payments to be made to approximately 74% of our colleagues. Payments are based on achievement of pre-established corporate financial goals with a Customer Delight modifier and an individual performance modifier.

Each NEO has a target AIP, which is defined as a percentage of the respective NEO’s eligible base pay. In 2020, the HRCC adjusted the AIP targets for Messrs. Stead, Hanks and Roy based upon a review of their roles, internal equity, and a competitive analysis to our compensation peer group that

 

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was recommended by Pay Governance based on their research. The table below provides a comparison of the end-of-year AIP targets for 2019 and 2020.

To reward achievement in 2020, we maintained a target-based AIP that delivered annual cash payments to the NEOs and other senior colleagues based on achievement of pre-determined financial goals of the Company tied to adjusted revenue, adjusted EBITDA and adjusted free cash flow (for colleagues with group-wide responsibility) and Business Segment (IP and Science) revenue and product contribution (for colleagues within our business segments). The AIP also has a Customer Delight modifier and an individual performance modifier. Our active NEOs had target payments ranging from 65% to 150% of their annual base salaries, depending upon their positions.

AIP Goals

Our AIP goals can be viewed in the following categories:

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Financial.   The corporate financial goals we selected for the AIP represent our key business performance areas: adjusted revenue, adjusted EBITDA and adjusted free cash flow. In addition to the corporate financial goals for AIP, colleagues — including Messrs. Ahmed and Roy — who are in the Science and IP business areas had business group financial goals tied to Product Line revenue and product contribution in their respective business groups.

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Customer Delight Additive Modifier.   The Customer Delight additive modifier, which could increase the payment earned from corporate financial performance by up to 10%, was selected because an improvement in our Customer Delight score, as measured by the results of surveys sent to 100% of our customers, was one of our strategic goals in 2020 as Customer Delight can directly impact our revenues and represents a key component of our measurement of success.

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Individual Performance Modifier.   The individual performance modifier can be used to increase or decrease an individual’s final AIP payment based upon that individual’s personal performance, provided that the maximum payment could not exceed 200% of the AIP target.

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The table below illustrates the goals set for each of the NEOs.

Financial.   The tables below provide the threshold, target and maximum AIP opportunities and actual results achieved in 2020 at the corporate and business group levels. Payout percentages are interpolated between payout levels.

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(1)

2020 Corporate Goals and 2020 Results exclude (a) CPA Global as the goals were set excluding CPA, and (b) TechStreet for November and December as that business was divested during the year.

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(2)

See Appendix F for a reconciliation of our non-GAAP to GAAP financial measures.

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(1)

For NEOs with Business Segment Metrics, 50% of their AIP is tied to Product Revenue and Product Contribution, with each of Product Revenue and Product Contribution comprising 25% of the overall payout. The remaining 50% AIP weighting is based on corporate performance.

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(2)

2020 IP Business Segment Goals and 2020 Results exclude (a) CPA Global as the goals were set excluding CPA, and (b) TechStreet for November and December as that business was divested during the year.

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Customer Delight.   Customer Delight performance was measured through a highly-structured and data-driven bi-annual customer survey completed by 18,201 of our customers globally. The survey contained five questions related to certain key themes, with a strong focus on the ease of doing business with Clarivate.

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As shown in the table below, we set the minimum Customer Delight additive modifier at 78, as compared to the 2019 Customer Delight actual score of 76. The maximum modifier would take effect if the Customer Delight score was 79 or higher. Our final score was 79; thus the calculated business payout was increased by 10%.

Calculated AIP Payment

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AIP Corporate Results.   The calculated corporate AIP payment, based on business performance that was impacted by COVID-19, is illustrated below.

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AIP Business Segment Results.   The calculated AIP payment, based on business performance that was impacted by COVID-19, is illustrated below.

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Response to COVID-19.   At the beginning of 2020, we set annual performance goals substantially higher than actual results in 2019, and achievement of these goals would have required consistently high performance during the year. However, we did not anticipate the impact of the COVID-19 pandemic at the time the goals were established. Based on robust resiliency demonstrated as detailed above, significant execution on strategic initiatives as demonstrated by successful acquisition and divestiture activity, and shareholder return, the HRCC determined it would be appropriate to increase overall funding for the AIP to 70% of target.

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Final AIP Payments.   For the NEOs, the HRCC reviewed each individual’s performance and accomplishments and deemed that each NEO exhibited high levels of professionalism, insight and leadership throughout this unusual year, an assessment of which is reflected in the final AIP payment.

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(1)

Mr. Stead’s AIP target was not impacted by his voluntary deferral of a salary increase until October.

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(2)

Messrs. Ahmed and Hartman are based in the United Kingdom and, in the AIP tables above, their payments have been converted to USD using a GBP/USD exchange rate of 1.3387.

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2020 Long-Term Incentive Program

Introduction of LTI Program

The introduction of an equity-based LTI program in early 2020 was a key component of our transition in 2020 to a performance-based culture. Through the LTI program, our most senior leaders are eligible for annual equity awards under the Clarivate 2019 Incentive Award Plan (the “Incentive Award Plan”). As discussed above, PSUs were granted to our most senior leaders for the first time in 2020, placing a larger percentage of their compensation “at risk.”

Our first annual equity awards were granted to our executive leadership team on April 1, 2020 and consisted of the Original PSUs and RSUs. The ratio of the Original PSUs to RSUs was most heavily weighted towards PSUs for those senior executives with direct line of sight to overall performance.

The RSUs vest over three years, with 1/3 of the award vesting on the first three anniversaries of the grant date.

As illustrated below, the Original PSUs are tied to the achievement of three-year average organic revenue growth. Additionally, the Original PSUs include a relative TSR modifier as compared to the S&P 500, that will increase or decrease the final payout by as much as 20%, as illustrated below. The overall payout of the Original PSUs is capped at 200% of the target shares granted.

Organic revenue, which includes revenue generated by acquisitions after the one-year anniversary of the closing has occurred, was selected as the primary operational metric for the Original PSUs to emphasize long-term and steady growth of our current business lines.

 

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Impact of COVID-19 on PSUs

What was not anticipated at the time we set three-year average organic revenue growth as our primary Original PSU goal was the impact that COVID-19 would have, particularly on our transactional business due to an overall decrease in demand primarily driven by economic conditions resulting from the COVID-19 pandemic. Mathematically, to overcome the impact of COVID-19 on our three-year measurement period average and reach the Original PSU performance threshold, we will need to achieve exceptional organic revenue growth for 2021 and 2022. With the COVID-19 pandemic still impacting the world’s economy in 2021, achieving the Original PSU’s threshold performance level will be remarkably challenging.

The HRCC determined that our executive leadership team performed at an exemplary level in 2020 and that the unforeseen impact of COVID-19 on our first year’s organic revenue growth rate was inhibiting the Original PSU’s goal of aligning shareholders’ and executives’ interests. We were still able to deliver overall growth and extremely strong shareholder return even in a global economic downturn, but the Original PSUs contain daunting performance metrics. Because we plan to continue to incentivize our top team with PSUs and, given that this was the first year PSUs had been used, we wanted to ensure that the PSU incentive vehicle remains a strong motivator.

We intend to continue to drive strong organic revenue growth. Therefore, we do not believe that modifying the original organic revenue performance scale is an appropriate alternative for the Original PSUs, and canceling the Original PSUs would likewise be inappropriate because we do not want to detract our continued pursuit of robust organic revenue growth.

Therefore, in late December 2020, the HRCC approved a one-time award of TSR PSUs that were uniquely designed to address COVID-19’s impact on our Original PSUs while directly aligning with shareholder interests:

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In no scenario will both grants vest; TSR PSUs are forfeited in their entirety if the Original PSUs result in any payment of shares;

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TSR PSU grants are half the number of Original PSUs granted;

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100 percent of the TSR PSU award opportunity is based on Clarivate’s relative TSR versus the S&P 500, and, in order to earn a target award, Clarivate’s three-year relative TSR must measure at the 62.5th percentile, at a minimum;

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No TSR PSU award is earned unless Clarivate’s relative TSR exceeds the 50th percentile and the earned award is capped at 120% of target at the 75th percentile or above relative TSR; and

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Total payout for the TSR PSUs cannot be more than 100% of target, if absolute TSR is negative.

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The table below provides details of the RSUs, Original PSUs and TSR PSUs granted to our NEOs in 2020. To the extent that the TSR PSUs vest, the Original PSUs are forfeited in their entirety.