Table of Contents
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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
 
Filed by the Registrant  
 
Filed by a Party other than t
he
Registrant  
 
Check the appropriate box:
 
Preliminary Proxy Statement
 
Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2)
 
Definitive Proxy Statement
 
Definitive Additional Materials
 
Soliciting Material Pursuant to
§240.14a-12
 
TEGNA Inc.
 

 
(Name of Registrant as Specified In Its Charter)
 

 
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
 
Payment of Filing Fee (Check the appropriate box):
 
No fee required.
 
Fee paid previously with preliminary materials.
 
Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules
14a-6(i)(1)
and
0-11.


Table of Contents

LOGO


Table of Contents
LOGO    June 29, 2023

 

 

Dear Fellow Shareholders:

 

Our talented and dedicated team at TEGNA demonstrated impressive focus throughout 2022, enabling us to achieve record top- and bottom-line performance and generate significant business momentum. Despite the increased efforts and uncertainty surrounding the now-terminated merger, TEGNA achieved record full-year total company revenue, as well as record subscription revenue, net income, and Adjusted EBITDA. We also delivered record political revenue for a non-presidential election year.

 

This performance demonstrates the resilience of our strategy, the value of our portfolio of local station brands and TEGNA’s continued focus on operational excellence. We are uniquely positioned within the broadcast sector with an industry-leading balance sheet, and have the lowest leverage levels since we became a pure-play broadcasting company in 2017. With our attractive broadcast assets and strong balance sheet, TEGNA is well positioned to generate strong shareholder value.

 

Our leading portfolio of high-quality local station and digital brands fills a critical role in markets across the country, diversified by both geographic regions and network affiliations. The differentiated, non-substitutable programming we provide, including live local news, live local and national sports and first run, popular network programs, remains some of the most highly viewed content available.

 

We strive to be the most trusted source of news in our communities and to make an impact by being agents of change in the markets we serve. Through our national VERIFY brand, our journalists are tackling an increasingly complex landscape of misinformation and disinformation. Our stations are reaching consumers in new ways, including through the introduction of streaming apps for Roku and Amazon’s Fire TV. Our stations’ apps logged more than 1 billion minutes of viewing in 2022.

 

Through thoughtful acquisitions over the years, TEGNA has built a strategic position in key battleground states and large markets, which will serve us well as we approach the 2024 presidential election cycle. Additionally, Premion, our first-to-market and industry-leading OTT advertising platform, continues to deliver differentiated solutions to both local and national advertisers.

   

LOGO

Howard D. Elias

 

  LOGO

David T. Lougee

 

    
   

 

Key Financial Highlights:

 

•  $3.3 billion record total company
revenue

 

•  
$1.5 billion record subscription revenue

 

•  $341 million in political revenue, a record for a non-presidential year

 

•  GAAP net income was a record $631 million

 

•  $1.1 billion record Adjusted EBITDA*, a 19% increase over 2021

 

•  Record net revenue for Premion, our over-the-top (OTT) advertising platform

 

 

Across our company, we also continued to make strides in accelerating the pace of racial diversity and inclusion. In 2022, we continued to make progress towards our 2025 DE&I goals to increase representation of Black, Indigenous and People of Color (BIPOC) in our content teams, content leadership, and company leadership. We evolved our measurable multi-year Inclusive Journalism Program to ensure our coverage and storytelling, imagery, and language resonates with and honors the communities we serve. We also launched a DE&I and community-centered investing initiative with CNote, an organization that helps companies invest capital in underserved communities at scale, and through the program we have already made investments in twelve Community Development Financial Institutions in the communities TEGNA serves. Through our stations’ community engagement efforts, we were honored for a third consecutive year in the 2022 Civic 50, which recognizes the most community-minded companies in the U.S. and were the Telecommunications Sector leader.

On May 22, 2023, after a protracted regulatory review, we announced the termination of our merger agreement with Standard General, L.P. Anticipating this possible outcome in the months leading up to the termination, our Board of Directors and management were focused on our standalone plan so that we could hit the ground running following termination of the agreement. Accordingly, we announced a $300 million accelerated share repurchase program and a 20 percent increase in our quarterly dividend. These initial actions were taken to return excess capital accumulated during the pending merger to you, our shareholders. In addition, on June 2, 2023, Standard General transferred TEGNA shares it held to us to satisfy the $136 million termination fee due to TEGNA under the terms of the merger agreement. We continue to actively review our strategy to further enhance shareholder value and to return additional excess capital.

Our success in 2022 and our strong outlook are a testament to the dedication and focus of our TEGNA colleagues. We are incredibly proud of our achievements during 2022, our steadfast commitment to generating long-term shareholder value, and the ongoing fulfillment of our purpose to serve the greater good of our communities. We look forward to building on these many successes in the years ahead.

 

*

Reconciliation of Adjusted EBITDA, a non-GAAP financial measure, to the Company’s results as reported under accounting principles generally accepted in the United States may be found in the Company’s Form 10-K, filed February 27, 2023: adjusted EBITDA – page 32.

 

LOGO   LOGO

Howard D. Elias

Board Chair

 

Dave Lougee

President and Chief Executive Officer


Table of Contents
LOGO        

 

 

 

Notice of Annual Meeting of Shareholders

 

To Our Shareholders:

 

The 2023 Annual Meeting of Shareholders of TEGNA Inc. will be held for the following purposes:

 

 

 

    MEETING INFORMATION

 

    DATE: August 17, 2023

 

    TIME: 10:00 a.m.

 

    LOCATION:

 

    Via a live webcast at:

    www.meetnow.global/MA7WFZQ.

    There is no physical location
    for the Annual Meeting.

 

       LOGO         

to consider and act upon a proposal to elect nine director nominees to the Company’s Board of Directors to hold office until the Company’s 2024 Annual Meeting of Shareholders;

 

       LOGO         

to consider and act upon a Company proposal to ratify the appointment of
PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the 2023 fiscal year;

 

       LOGO          to consider and act upon a Company proposal to approve, on an advisory basis, the compensation of our named executive officers;

 

       LOGO         

to conduct a non-binding advisory vote on the frequency of future advisory votes to approve the compensation of the Company’s named executive officers;

 

       LOGO         

to consider and act upon a shareholder proposal regarding shareholder ratification of termination pay; and

 

       LOGO       

 

  to transact such other business, if any, as may properly come before the Annual Meeting or any adjournment or postponement of the meeting.

Your Board of Directors unanimously recommends that you vote FOR all nine nominees listed on the enclosed proxy card or voting instruction form, FOR proposals 2 and 3, 1 YEAR on proposal 4, and AGAINST proposal 5.

We have enclosed the annual report, proxy statement (together with the notice of Annual Meeting), and proxy card or voting instruction form. For specific instructions on how to vote your shares, please refer to the instructions on the proxy card or voting instruction form to vote by Internet, telephone, or by mail. We encourage shareholders to submit their proxies electronically – by telephone or by Internet – whenever possible.

The Board of Directors has set the close of business on June 22, 2023 as the record date to determine the shareholders entitled to notice of and to vote at the Annual Meeting or any adjournment or postponement thereof.

By Action of the Board of Directors,

 

LOGO

Marc S. Sher

Vice President, Associate General Counsel and Secretary

Tysons, Virginia

June 29, 2023


Table of Contents
LOGO    Notice of Annual Meeting of Shareholders

 

 

 

Your Vote Is Important. Please vote by proxy TODAY to ensure that your shares are represented at the Annual Meeting whether or not you currently plan to attend. You do not need to attend the meeting to vote if you vote your shares before the meeting. If you are a record holder, you may vote your shares by mail, telephone or the Internet. If you later decide to attend the meeting, your vote will revoke any proxy previously submitted. If your shares are held by a broker, bank or other nominee, you must follow the instructions provided by your broker, bank or other nominee to vote your shares and you may not vote your shares by ballot at the meeting unless you provide a “legal proxy” from the broker, bank or other nominee that holds your shares giving you the right to vote the shares at the meeting. Please review “Questions and Answers about the Proxy Materials and the Annual Meeting” beginning on page 75 of the Proxy Statement for information about attending and voting at the Annual Meeting.

We will hold the Annual Meeting virtually online via a live webcast at www.meetnow.global/MA7WFZQ. To participate in the Annual Meeting, you must enter the 16 digit control number included in your proxy card or voting instruction form. Online access to the Annual Meeting will open approximately 15 minutes prior to the start of the Annual Meeting. You will not be able to attend the Annual Meeting in person at a physical location. For purposes of attendance at the Annual Meeting, all references in this proxy statement to “present” shall mean virtually present at the Annual Meeting.

 

INTERNET    TELEPHONE    MAIL    ONLINE

 

 

LOGO

 

  

 

 

LOGO

 

  

 

 

LOGO

 

  

 

 

LOGO

 

Access the website indicated

on the enclosed

proxy card or voting

instruction form.

  

Call the number indicated on the enclosed proxy

card or voting instruction

form.

  

Sign, date and return the

enclosed proxy card or voting instruction form in the postage-paid envelope

provided.

   Attend the virtual meeting via live webcast at www.meetnow.global/MA7WFZQ/
and vote by ballot online.

This Notice of Annual Meeting and Proxy Statement is first being delivered to shareholders on or about June 29, 2023.

Important Notice Regarding the Availability of Proxy Materials for the 2023 Annual Meeting of Shareholders

to be Held Virtually on August 17, 2023 at 10:00 a.m., Eastern Time.

The proxy statement and annual report to shareholders are available at www.envisionreports.com/TGNA.


Table of Contents
LOGO        

 

 

Table of Contents

 

    Proxy Statement Summary   i        
        
     
PROPOSAL 1 – ELECTION OF
DIRECTORS
     
 

 


___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

Page


   
    1      Your Board of Directors    
    1      Board Leadership Structure             
    2      The TEGNA Nominees    
    7      Committees of the Board of Directors    
    9      Committee Charters    
    10      Corporate Governance    
    10      Shareholder Engagement    
    11      The Board’s Role in Risk Oversight    
    12      The Board’s Role in the Oversight of Cybersecurity and Data Privacy    
       13      The Board’s Role in Corporate Strategy    
    14      Board Oversight of Corporate Social Responsibility    
    14      Board Oversight of Diversity, Equity and Inclusion    
    15      Corporate Social Responsibility    
    22      Annual Board Performance Evaluation    
    22      Ethics Policy    
    23      Related Transactions; Compensation Committee Interlocks and Insider Participation    
      23      Report of the Audit Committee      
        
     


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

 


___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

Page


   
      25           
        
      EXECUTIVE COMPENSATION      
 

 


___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

Page


   
    26      Compensation Discussion and Analysis    
    27      Executive Summary    
    30      Overview of Executive Compensation Program    
    30      How the Committee Determines NEO Compensation    
    47      Leadership Development and Compensation Committee Report    
    48      Summary Compensation Table    
    49      Grants of Plan-Based Awards    
    50      Outstanding Equity Awards at Fiscal Year-End    
    51      Option Exercises and Stock Vested    
    51      Pension Benefits    
    52      Non-Qualified Deferred Compensation    
    53      Other Potential Post-Employment Payments    
    59      CEO Pay Ratio    
      60      Pay Versus Performance      
          


PROPOSAL 3 – APPROVAL, ON AN
ADVISORY BASIS, OF THE
COMPENSATION OF OUR NAMED
EXECUTIVE OFFICERS
      
 

 


___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

Page


    
           63            
         
     




PROPOSAL 4 – NON-BINDING,
ADVISORY VOTE ON THE
FREQUENCY OF FUTURE ADVISORY
VOTES TO APPROVE THE
COMPENSATION OF THE COMPANY’S
NAMED EXECUTIVE OFFICERS
      
 

 


___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

Page


    
      64            
         
     


PROPOSAL 5 – SHAREHOLDER
PROPOSAL REGARDING
RATIFICATION OF TERMINATION PAY
      
 

 


___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

Page


    
           65            
    DIRECTOR COMPENSATION     68     
   
OUTSTANDING DIRECTOR EQUITY
AWARDS AT FISCAL YEAR-END
    70     
   
EQUITY COMPENSATION PLAN
INFORMATION
    71     
   


SECURITIES BENEFICIALLY OWNED
BY DIRECTORS, EXECUTIVE
OFFICERS AND PRINCIPAL
SHAREHOLDERS
    72     
   

INVESTMENT IN TEGNA STOCK BY
DIRECTORS AND EXECUTIVE
OFFICERS
    73     
    COST OF SOLICITING PROXIES     74     
   

QUESTIONS AND ANSWERS ABOUT
THE PROXY MATERIALS AND
ANNUAL MEETING
    75     
    ADDITIONAL INFORMATION     81     
 


Table of Contents
LOGO        

 

 

TEGNA Inc.

2023 Proxy Statement Summary

This summary highlights information about TEGNA Inc. (“TEGNA” or the “Company”) and the upcoming 2023 annual meeting of shareholders (the “Annual Meeting”). Please review the complete Proxy Statement and TEGNA’s annual report for the fiscal year ended December 31, 2022 (the “2022 Annual Report”) before you vote. The Proxy Statement and the 2022 Annual Report will first be mailed or released to shareholders on or about June 29, 2023.

 

 

ANNUAL MEETING OF SHAREHOLDERS

 

•  Time and Date:

 

•  Record Date:

 

•  Admission:

 

10:00 a.m. ET on August 17, 2023

 

June 22, 2023

 

You are entitled to attend the Annual Meeting if you were a TEGNA shareholder as of the close of business on the record date. If you plan to attend the meeting, you must register in advance by following the procedures described in “Questions and Answers about the Proxy Materials and the Annual Meeting” beginning on page 75 and abide by the agenda and procedures for the Annual Meeting (which will be available on the virtual Annual Meeting site). If your shares are held by a broker, bank or other holder of record in “street name” (including shares held in certain TEGNA employee benefit plans), you must also provide proof of your ownership of the shares as of the record date in order to attend the meeting. See “Questions and Answers About the Proxy Materials and Annual Meeting – What must I do if I want to attend the Annual Meeting?” on page 75 of this Proxy Statement for additional information and instructions.

 

 

 

2023 PROXY STATEMENT         |        

i


Table of Contents
LOGO    2023 Proxy Statement Summary: Voting Matters and Board Recommendations

 

 

Voting Matters and Board Recommendations

 

Voting Matter

 

 

Voting Standard

 

 

Board Vote
Recommendation

 

 

See
Page

 

Proposal 1   Election of Directors   To be elected, a director nominee must receive more votes “for” than votes “against” with respect to the nominee.   FOR ALL NOMINEES   1
Proposal 2   Ratification of Appointment of Independent Registered Public Accounting Firm   Majority of the votes that could be cast by the shareholders present in person or represented by proxy.   FOR   25
Proposal 3   Approval, on an Advisory Basis, of the Compensation of our Named Executive Officers   Majority of the votes that could be cast by the shareholders present in person or represented by proxy.   FOR   63
Proposal 4   Non-binding advisory vote on the frequency of future advisory votes to approve the compensation of the Company’s named executive officers.   The choice that receives the highest number of votes will be considered by the Company as the shareholders’ recommendation.   1 YEAR   64
Proposal 5   Shareholder Proposal regarding Shareholder Ratification of Termination Pay   Majority of the votes that could be cast by the shareholders present in person or represented by proxy.   AGAINST   65

 

 

ii

      |       2023 PROXY STATEMENT


Table of Contents
LOGO    2023 Proxy Statement Summary: Snapshot of 2023 Director Nominees

 

 

Snapshot of 2023 Director Nominees

Director Nominees

The Board of Directors is currently composed of eleven directors, including the nine continuing directors nominated for reelection as further described below. Two of our current Board members, Lidia Fonseca and Bruce Nolop, have informed the Company that they do not desire to stand for reelection at the 2023 Annual Meeting. As a result, the Board of Directors has nominated the director candidates below. All director nominees have stated that they are willing to serve if elected. Personal information about each director nominee is available beginning on page 2 of this Proxy Statement.

 

Name & Principal Occupation

 

 

Age

 

 

Director
Since

 

 

Diversity1

Identifier

 

 

Status

 

 

Committee Memberships

 

 

Gina L. Bianchini

Founder and CEO, Mighty Networks

 

 

 

51

 

 

 

2018

 

 

W

 

 

Independent

 

 

Nominating and Governance; Public Policy and Regulation

 

 

Howard D. Elias

Chair of TEGNA; Retired President, Services and Digital, Dell Technologies

 

 

 

66

 

 

2008

 

 

W

 

 

Independent

 

 

Executive (Chair);

Leadership Development and Compensation

 

 

Stuart J. Epstein

Strategic Advisor, Meadowlark Media

 

 

 

60

 

 

2018

 

 

W

 

 

Independent

 

 

Audit (financial expert)

 

Karen H. Grimes

Retired Partner, Senior Managing Director and Equity Portfolio Manager, Wellington Management Company

 

 

 

67

 

 

2020

 

 

W

 

 

Independent

 

 

Audit (financial expert); Nominating and Governance

 

David T. Lougee

President and CEO, TEGNA Inc.

 

 

 

64

 

 

2017

 

 

W

 

 

Executive

 

 

Executive

 

Scott K. McCune

Founder, MS&E Ventures;

Former Vice President of Global Media and Integrated Marketing, The Coca-Cola Company

 

 

 

66

 

 

2008

 

 

W

 

 

Independent

 

 

Audit;

Executive;

Leadership Development and Compensation (Chair)

 

Henry W. McGee

Senior Lecturer, Harvard Business School; Former President, HBO Home Entertainment

 

 

 

70

 

 

2015

 

 

B

 

 

Independent

 

 

Executive; Nominating and Governance (Chair); Public Policy and Regulation

 

 

Neal Shapiro

President and CEO, public television company WNET

 

 

 

65

 

 

2007

 

 

W

 

 

Independent

 

 

Nominating and Governance;

Public Policy and Regulation

 

Melinda C. Witmer

Founder and CEO, Foiye, Inc.; Former Executive Vice President, Chief Video & Content Officer; Time Warner Cable

 

 

 

 

62

 

 

2017

 

 

W

 

 

Independent

 

 

Executive; Leadership Development and Compensation;

Public Policy and Regulation (Chair)

 

 

 

1 

This column only relates to Racial & Ethnicity diversity, as follows: B – Black or African American; W – White or Caucasian.

 

 

2023 PROXY STATEMENT         |        

iii


Table of Contents
LOGO    2023 Proxy Statement Summary: Snapshot of 2023 Director Nominees

 

 

Our director nominees have a diverse set of qualifications, skills and experiences and also reflect diversity of age, tenure, gender and race/ethnicity. The Board regularly evaluates its composition to ensure that the skills and experience of the directors as a whole enhance the ability of the Board to provide independent oversight of management as they execute on strategic initiatives to create sustainable stockholder value. The following graphics include additional information regarding our director nominees.

 

Gender Diversity   Racial & Ethnic Diversity

 

 

LOGO

 

 

 

LOGO

 

Age   Tenure

 

 

LOGO

 

 

LOGO

 

 

 

iv

      |       2023 PROXY STATEMENT


Table of Contents
LOGO    2023 Proxy Statement Summary: Snapshot of 2023 Director Nominees

 

 

Director Nominees Skills Matrix

 

LOGO

See the director nominee biographies beginning on Page 2 of this Proxy Statement for further detail. The absence of a “•” for a particular skill does not mean that the director nominee does not possess that qualification, skill, or experience. We look to each director to be knowledgeable in these areas; however, the mark indicates that the item is a particularly prominent qualification, skill or experience that the director brings to the Board.

 

 

2023 PROXY STATEMENT         |        

v


Table of Contents
LOGO    2023 Proxy Statement Summary: Corporate Governance Highlights

 

 

Corporate Governance Highlights

 

Board and Governance Practices

 

u 8 of 9 director nominees are independent

 

u Board gender diversity – 3 female director nominees (33% of Board)

 

u All Standing Board Committees are fully independent: Audit, Leadership Development and Compensation, Nominating and Governance, Public Policy and Regulation

 

u Independent Board Chair enhances oversight of management

 

u All directors stand for election annually

 

u One-vote-per-share capital structure with all shareholders entitled to vote for director nominees

 

u Majority voting standard for uncontested director elections with a director resignation policy

 

u No shareholder rights plan (poison pill) in place

 

u Annual review by the Board of TEGNA’s major risks with certain oversight delegated to Board committees

 

u Clear CEO and executive officer succession plan

 

Board Refreshment and Evaluation

 

u Ongoing board refreshment process

 

u  Robust director nominee selection process

 

u  Annual board performance evaluation

    

Social Responsibility Practices

 

u Public Policy and Regulation Committee provides independent oversight of sustainability, environmental matters and social responsibility

 

u Enhanced reporting of environmental, social and governance (“ESG”) disclosures, including disclosure under the SASB Media and Entertainment framework

 

u Our environmental policy and practices ensure we are being responsible stewards of our resources and helping to build a sustainable future for all stakeholders

 

u We continue to make sustained progress on diversity and inclusion, including our Inclusive Journalism program

 

u Separate areas of oversight regarding the Company’s approach to diversity for each Board committee

 

u We have established and continue to make progress against our 2025 goals to increase Black, Indigenous and People of Color representation in content teams, news leadership and management roles

 

Executive Compensation Practices

 

u A significant percentage of the compensation we provide to our NEOs is performance-based.

 

u Maximum annual bonus payouts and performance share payouts are capped at 200% of target.

      

 

u Compensation recoupment (“clawback”) policy covering restatements and misconduct applicable to all current and former executive officers

 

u Hedging and pledging of TEGNA securities by TEGNA employees and directors is prohibited

 

u All new change-in-control arrangements are “double trigger”

 

u We limit cash severance payments for executives to three times base salary plus annual bonus

 

Shareholder Engagement

 

u TEGNA maintains a long-standing shareholder engagement program, involving year-round active dialogue and the participation of its independent directors; shareholder feedback is shared with the full Board

 

u Several changes implemented in response to feedback gathered during shareholder engagement in recent years, including adoption of proxy access, changes to executive compensation program and enhancements to ESG reporting

 

Director Engagement

 

u 9 Board meetings in 2022; overall attendance at all of the meetings of the Board and Board committees was 93.8%

 

u Frequent meetings of non-management directors in executive session without any TEGNA officer present

 

u Directors prohibited from serving on more than three other public company boards

 

 

 

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LOGO        

 

 

Proposal 1—Election of Directors

(Proposal 1 on the proxy card)

Your Board of Directors

The Board of Directors is currently composed of eleven directors, including the nine directors nominated for reelection. Lidia Fonseca and Bruce Nolop have informed the Company that they do not desire to stand for reelection at the 2023 Annual Meeting. The Board of Directors held nine meetings during 2022. Each of the directors attended, in the aggregate, at least 75% of the meetings of the Board and its committees on which he or she served that were held during the period for which he or she served as a director or committee member, as applicable, during 2022. All directors then serving on the Board virtually attended the 2022 Annual Meeting in accordance with the Company’s policy that all directors attend the Annual Meeting.

Nominees elected to our Board at the 2023 Annual Meeting will serve until the Company’s 2024 Annual Meeting of Shareholders. The Board, upon the recommendation of its Nominating and Governance Committee, has nominated the following individuals: Gina L. Bianchini, Howard D. Elias, Stuart J. Epstein, Karen H. Grimes, David T. Lougee, Scott K. McCune, Henry W. McGee, Neal Shapiro and Melinda C. Witmer. The Board believes that each of the nominees will be available and able to serve as a director. Each of the nominees has consented to being named in this Proxy Statement and to serve on the Board, if elected. If any nominee becomes unable or unwilling to serve, the Board may do one of three things: recommend a substitute nominee, reduce the number of directors to eliminate the vacancy, or fill the vacancy later. The shares represented by all valid proxies may be voted for the election of a substitute if one is nominated.

Under the Company’s By-laws, the 2023 director nominees will be elected by the vote of a majority of the votes cast with respect to the director at the meeting. If an incumbent nominee does not receive an affirmative majority of the votes cast, he or she is required to submit a letter of resignation to the Board’s Nominating and Governance Committee, which would recommend to the Board the action to be taken with respect to the letter of resignation. The Board is required to act on the Committee’s recommendation and publicly disclose its decision and its rationale within 90 days after the election results are certified.

Board Leadership Structure

Our Board regularly reviews the Company’s Board leadership structure, how the structure is functioning and whether the structure continues to be in the best interest of our shareholders. Our Board has determined that having an independent director serve as the Chair of the Board is currently the best leadership structure for the Company. Separating the positions of Chair and CEO allows the CEO to focus on executing the Company’s strategic plan and managing the Company’s operations and performance and permits improved communications between the Board, the CEO and other senior leaders of the Company.

The duties of the Chair of the Board include:

 

 

presiding over all meetings of the Board and all executive sessions of non-management directors;

 

 

serving as liaison on Board-wide issues between the CEO and the non-management directors, although Company policy also provides that all directors shall have direct and complete access to the CEO at any time as they deem necessary or appropriate, and vice versa;

 

 

in consultation with the CEO, reviewing and approving Board meeting schedules, agendas and materials;

 

 

calling meetings of the non-management directors, if desired; and

 

 

being available when appropriate for consultation and direct communication if requested by shareholders.

 

 

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LOGO    Proposal 1—Election of Directors: Information about the TEGNA Nominees

 

 

The TEGNA Nominees

The following director nominees are currently serving on the Board and have been nominated by the Board on the unanimous recommendation of the Nominating and Governance Committee to stand for re-election at the Company’s 2023 Annual Meeting for a term expiring on the date of the Company’s 2024 Annual Meeting. The principal occupation and business experience of each TEGNA nominee, including the reasons the Board believes each of them should be re-elected to serve another term on the Board, are described below.

 

 

 

The Board of Directors recommends that shareholders “FOR” each of the TEGNA nominees by following the voting instructions contained on the enclosed proxy card.

 

 

     LOGO

 

 

Gina L. Bianchini

Founder and CEO, Mighty Networks

Age: 51

Director since: 2018

  

 

TEGNA Committees:

•  Nominating and Governance

•  Public Policy and Regulation

 

Professional Experience:

Ms. Bianchini is Founder and Chief Executive Officer of Mighty Networks (formerly known as Mighty Software, Inc.), a position she has held since September 2010. She served as Chief Executive Officer of Ning, Inc. from 2004 to March 2010. Ms. Bianchini also served as a director of Scripps Networks Interactive, Inc. through 2018, as a director of Empower Ltd until July 2021, and as a director of Empower’s successor, Holley Inc., until May 2022.

Qualifications and Strategy-Related Experience:

  Expertise, vision and creativity in the rapidly evolving world of digital media
  Deep knowledge of social media and community building technology platforms
  Experience with oversight of acquisitions, equity investments, and investor relations
  Significant digital and start-up experience
 

 

 

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LOGO    Proposal 1—Election of Directors: Information about the TEGNA Nominees

 

 

 

     LOGO

 

 

Howard D. Elias

Chair of TEGNA; Retired Chief Customer Officer and President, Services and Digital, Dell Technologies

Age: 66

Director since: 2008

  

 

TEGNA Committees:

•  Executive (Chair)

•  Leadership Development and Compensation

 

Professional Experience:

Mr. Elias was named the Chair of TEGNA in April 2018 and recently retired from his position as President, Services and Digital, of Dell Technologies, a position he had held since September 2016. Prior to that, he served as President and Chief Operating Officer, EMC Global Enterprise Services from January 2013 to September 2016 and was President and Chief Operating Officer, EMC Information Infrastructure and Cloud Services from September 2009 to January 2013. From October 2015 through September 2016, Mr. Elias was also responsible for leading the development of EMC Corporation’s integration plans in connection with its transaction with Dell Inc. Previously, Mr. Elias served as President, EMC Global Services and Resource Management Software Group; Executive Vice President, EMC Corporation from September 2007 to September 2009; and Executive Vice President, Global Marketing and Corporate Development, at EMC Corporation from October 2003 to September 2007.

Qualifications and Strategy-Related Experience:

  Extensive operational, managerial, and leadership experience in cloud computing, supply chain management, marketing, corporate development and global customer support
  Experience overseeing M&A, new business development and incubation, and integration of acquisitions
  Comprehensive global business and management experience in information technology
 

 

 

     LOGO

 

 

Stuart J. Epstein

Strategic Advisor, Meadowlark Media

Age: 60

Director since: 2018

  

 

TEGNA Committees:

•  Audit

 

Professional Experience:

Since April 2023, Mr. Epstein has served as Strategic Advisor at Meadowlark Media, a premium content studio and creator network, focused primarily on sports. Previously, he was a Board Member and Chief Financial Officer of DAZN Group, the global live sports streaming service, a position he held from June 2018 to January 2022. He served as Co-Managing Partner of Evolution Media (within CAA) from September 2015 to September 2017, and as Executive Vice President and CFO of NBCUniversal from September 2011 to April 2014. Prior to that, Mr. Epstein held various positions during his 23-year career at Morgan Stanley, including Managing Director and Global Head of the Media & Communications Group within the investment banking division.

Qualifications and Strategy-Related Experience:

  Extensive knowledge of media, technology and capital markets
  Deep transactional experience with complex deals involving a range of constituencies
  Experience in overseeing local broadcast television stations
  Significant expertise in overseeing strategic business initiatives
 

 

 

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LOGO    Proposal 1—Election of Directors: Information about the TEGNA Nominees

 

 

 

     LOGO

 

 

Karen H. Grimes

Retired Partner, Senior Managing Director and Equity Portfolio Manager, Wellington Management Company

Age: 67

Director since: 2020

  

 

TEGNA Committees:

•  Audit

•  Nominating and Governance

 

Other Public Company Directorships:

•  Corteva

•  Toll Brothers, Inc.

 

Professional Experience:

Ms. Grimes held the position of Senior Managing Director, Partner, and Equity Portfolio Manager at Wellington Management Company LLP, an investment management firm, from January 2008 through December 2018. Prior to joining Wellington Management Company in 1995, she held the position of Director of Research and Equity Analyst at Wilmington Trust Company, a financial investment and banking services firm, from 1988 to 1995. Before that, Ms. Grimes was a Portfolio Manager and Equity Analyst at First Atlanta Corporation from 1983 to 1986 and at Butcher and Singer from 1986 to 1988. Ms. Grimes holds the Chartered Financial Analyst designation.

Qualifications and Strategy-Related Experience:

  Financial acumen, investment expertise and a returns-focused mindset, including in media and advertising
  Extensive executive-level experience and leadership abilities
  Deep understanding of financial accounting and internal financial controls
  Significant risk management experience
  Provides a valuable investor-oriented perspective
 

 

 

     LOGO

 

 

David T. Lougee

President and CEO,TEGNA Inc.

Age: 64

Director since: 2017

  

 

TEGNA Committees:

•  Executive

 

Professional Experience:

Mr. Lougee became President and Chief Executive Officer and a director of TEGNA in June 2017. He previously served as the President of TEGNA Media from July 2007 to May 2017. Prior to joining TEGNA, he served as Executive Vice President, Media Operations for Belo Corp. from 2005 to 2007. Mr. Lougee is a past chairman of the National Association of Broadcasters (NAB) as well as the NBC Affiliates Board of Directors and the Television Bureau of Advertising (TVB) Board of Directors. He is currently vice chairman of the Broadcast Music, Inc. Board of Directors and serves on the Board of the Broadcasters Foundation of America.

Qualifications and Strategy-Related Experience:

  Extensive expertise in management and operations
  Experience in oversight of strategic acquisitions
  Deep and intimate knowledge of the media industry
  25 years of experience in a variety of senior leadership roles
 

 

 

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     LOGO

 

 

Scott K. McCune

Founder, MS&E Ventures; Former VP, Global Media and Integrated Marketing, The Coca Cola Company

Age: 66

Director since: 2008

  

 

TEGNA Committees:

•  Audit

•  Executive

•  Leadership Development and Compensation (Chair)

 

Professional Experience:

Mr. McCune is the Founder of MS&E Ventures, a firm focused on creating new business value for brands through media, sports and entertainment. Prior to his retirement in March 2014, Mr. McCune spent 20 years at The Coca-Cola Company serving in a variety of roles, including Vice President, Global Partnerships & Experiential Marketing from 2011-2014, Vice President Global Media and Integrated Marketing from 2005-2011, and Vice President, Global Media, Sports & Entertainment Marketing and Licensing from 1994-2004. He also spent 10 years at Anheuser-Busch Inc. where he held a variety of positions in marketing and media. Mr. McCune also serves as a director of First Tee of Atlanta and the College Football Hall of Fame.

 

Qualifications and Strategy-Related Experience:

  Significant experience as a marketing executive, with an outstanding record of creating value, developing people and building organizational capabilities
  Deep knowledge of multiple aspects of marketing, including integrated marketing media, advertising, digital, licensing, sports & entertainment and experiential
  Experience building global brands, leading and inspiring diverse organizations, planning and executing complex operations innovating new approaches to business, driving productivity and managing P&L
 

 

 

     LOGO

 

 

Henry W. McGee

Senior Lecturer, Harvard Business School

Age: 70

Director since: 2015

  

 

TEGNA Committees:

•  Executive

•  Nominating and Governance (Chair)

•  Public Policy and Regulation

 

Other Public Company Directorships:

•  AmerisourceBergen Corporation

 

Professional Experience:

Mr. McGee has been a Senior Lecturer at Harvard Business School since July 2013. Previously, he served as a consultant to HBO Home Entertainment from April 2013 to August 2013 after serving as President of HBO Home Entertainment from 1995 until his retirement in March 2013. Mr. McGee held the position of Senior Vice President, Programming, HBO Video, from 1988 to 1995 and prior to that, Mr. McGee served in leadership positions in various divisions of HBO. Mr. McGee also serves as a director of The Black Filmmaker Foundation. He is also a former President of the Alvin Ailey Dance Theater Foundation and the Film Society of Lincoln Center. He was recognized by Savoy Magazine in 2016 and 2017 as one of the Most Influential Black Corporate Directors and in 2018 the National Association of Corporate Directors named Mr. McGee to the Directorship 100 as one of the country’s most influential boardroom members.

Qualifications and Strategy-Related Experience:

  Significant business, leadership and management experience in media industry
  Expertise in new business planning, operations, marketing and wholesale distribution
  Deep understanding of the use of technology in and all aspects of wholesale distribution and international market
  Extensive knowledge of leadership, corporate governance and corporate accountability
 

 

 

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LOGO    Proposal 1—Election of Directors: Information about the TEGNA Nominees

 

 

 

     LOGO

 

 

Neal Shapiro

President and CEO, The WNET Group

Age: 65

Director since: 2007

  

 

TEGNA Committees:

•  Nominating and Governance

•  Public Policy and Regulation

 

Professional Experience:

Mr. Shapiro is President and CEO of the public television company WNET, which operates three public television stations in the largest market in the country: Thirteen/WNET, WLIW and NJTV. He is an award-winning producer and media executive with a more than 35-year career spanning print, broadcast, cable and online media. Before joining WNET in February 2007, Mr. Shapiro served in various executive capacities with the National Broadcasting Company beginning in 1993 and was president of NBC News from May 2001 to September 2005. During his career, Mr. Shapiro has won numerous journalism awards, including 32 Emmys, 31 Edward R. Murrow Awards and 3 Columbia DuPont awards. He also serves on the Board of Trustees at Tufts University and as a member of the Board of Trustees of American Public Television.

Qualifications and Strategy-Related Experience:

  Strong broadcast industry experience
  Expertise in overseeing operations and strategy of news networks
  Expertise in news production and reporting, journalism and First Amendment issues
  Deep experience in programming and content sharing
 

 

 

     LOGO

 

 

Melinda C. Witmer

Founder and CEO, Foiye, Inc.; Former Executive Vice President, Chief Video & Content Officer, Time Warner Cable

Age: 62

Director since: 2017

  

 

TEGNA Committees:

•  Executive

•  Leadership Development and Compensation

•  Public Policy and Regulation (Chair)

 

Experience:

Ms. Witmer is the Founder and CEO of Foiye Inc., a social entertainment platform for real estate and home enthusiasts operating as foiye.com, a position she has held since May 2021. Foiye is the successor to Look Left Media, a startup company Ms. Witmer founded in March 2018 that was focused on the development of new real estate technology and media products. From January 2012 until May 2016, Ms. Witmer served as Executive Vice President, Chief Video & Content Officer of Time Warner Cable and Chief Operating Officer of Time Warner Cable Networks, which followed a five-year period starting in January 2007 as Time Warner Cable’s Executive Vice President and Chief Programming Officer. Prior to joining Time Warner Cable in 2001, Ms. Witmer was Vice President and Senior Counsel at Home Box Office, Inc.

Qualifications and Strategy-Related Experience:

  Significant experience in the industry including media operations, telecommunications programming and content
  Expert in the negotiation of content distribution agreements, including retransmission consent agreements with local broadcaster groups
  Deep understanding of the changing media landscape
  Experience in capitalizing on market opportunities, new technologies and emerging platforms in the media space, including innovative consumer experiences
 

 

 

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LOGO    Proposal 1—Election of Directors: Committees of the Board of Directors

 

 

Committees of the Board of Directors

The Board of Directors conducts its business through meetings of the Board and its four standing committees: the Audit Committee, Leadership Development and Compensation Committee, Nominating and Governance Committee, and Public Policy and Regulation Committee. The Board also has an Executive Committee (not shown on the chart below) made up of the Board Chair, the CEO and each of the Board committee chairs, that may exercise the authority of the Board between meetings, as required. The chart below shows the current membership and chairperson of each of the standing Board committees and the number of committee meetings held during 2022. Each member of the Audit, Leadership Development and Compensation, Nominating and Governance, and Public Policy and Regulation Committee meets the applicable independence requirements of the SEC and NYSE for service on the Board and each committee on which she or he serves. In addition, Susan Ness, whose term as a director ended at the Company’s 2022 annual meeting of shareholders because she had reached the Company’s mandatory retirement age for non-management directors, qualified as an independent director in accordance with applicable NYSE listing and SEC rules while serving on our Board

 

LOGO

Audit Committee

The Audit Committee assists the Board of Directors in its oversight of financial reporting practices and the quality and integrity of the financial reports of the Company, including compliance with legal and regulatory requirements, the independent registered public accounting firm’s qualifications and independence, and the performance of the Company’s internal audit function. The Audit Committee appoints and is responsible for setting the compensation of the Company’s independent registered public accounting firm. The Audit Committee reviews the Company’s independent registered public accounting firm’s qualification, performance and independence on an annual basis.

The Audit Committee also provides oversight of the Company’s internal audit function and oversees the adequacy and effectiveness of the Company’s accounting and financial controls and the guidelines and policies that govern the process by which the Company undertakes financial, accounting and audit risk assessment and risk management. In connection with the Ethics Policy, the Audit Committee has established procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting controls or auditing matters and the confidential, anonymous submission by employees of the Company of any accounting or auditing concerns. In addition, the Committee monitors the Company’s finance- and investment-related diversity and inclusion efforts, including the Company’s investment, procurement and purchasing involving minority-owned businesses.

The Audit Committee members are not professional accountants or auditors, and their role is not intended to duplicate or certify the activities of management and the independent registered public accounting firm.

The Board has determined that each of Bruce P. Nolop, Stuart J. Epstein and Karen H. Grimes is an audit committee financial expert, as that term is defined under SEC rules, and is independent, as defined in the NYSE listing rules.

Executive Committee

The Executive Committee may exercise the authority of the Board between Board meetings, except as limited by Delaware law. In 2022, the full board was able to review all items requiring Board oversight or approval, and did not require the Executive Committee to act in its stead.

 

 

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LOGO    Proposal 1—Election of Directors: Committees of the Board of Directors

 

 

Leadership Development and Compensation Committee

As further described in the “Compensation Discussion and Analysis” (CD&A) section of this Proxy Statement, the Leadership Development and Compensation Committee discharges the Board’s responsibilities relating to the compensation of the Company’s executives and has overall responsibility for the Company’s compensation plans, principles and programs. The Committee also monitors the Company’s human resources practices, including its performance in diversity, inclusion and equal employment opportunity, and supports the Company’s commitment to diversity and inclusion and the continuation of the Company’s successful efforts to gain and maintain diversity among its employees and management.

Under its charter, the Committee may, in its sole discretion, engage, retain and compensate any compensation consultant, independent legal counsel or other adviser it deems necessary. In selecting a consultant, counsel or adviser, the Committee evaluates its independence by considering the independence factors set forth in applicable SEC and NYSE rules and any other factors the Committee deems relevant to the adviser’s independence from management.

The Committee retains Meridian Compensation Partners, LLC (Meridian) as its consultant to advise it on executive compensation matters. The Committee has determined that Meridian is an independent compensation consultant based on a review of the independence factors reviewed by the Committee.

Meridian participates in Committee meetings as requested by the chair of the Committee and communicates directly with the chair and other members of the Committee outside of meetings. Meridian specifically has provided the following services to the Committee:

 

 

Consulted on various compensation plans, policies and practices;

 

 

Participated in Committee executive sessions without management present;

 

 

Assisted in analyzing executive compensation practices and trends and other compensation-related matters;

 

 

Consulted with management and the Committee regarding market data used as a reference for pay decisions;

 

 

Consulted on the structure of the equity award program; and

 

 

Reviewed the CD&A and other compensation related disclosures contained in this Proxy Statement.

Nominating and Governance Committee

The Nominating and Governance Committee regularly monitors the composition of the Board to ensure that it has the necessary mix of skills and experience to support the Company’s strategic focus, including diversity of thought, age, experience and racial, ethnic, and gender diversity. The Committee is charged with identifying individuals qualified to become Board members, recommending to the Board candidates for election or re-election to the Board, and considering from time to time the Board committee structure and makeup. The Committee also monitors and takes a leadership role with respect to the Company’s corporate governance practices.

The Nominating and Governance Committee charter sets forth certain criteria for the Committee to consider in evaluating potential director nominees. In addition to evaluating a potential director’s independence, the Committee considers whether director candidates have relevant experience and skills to assure that the Board has the necessary breadth and depth to perform its oversight function effectively. The charter also encourages the Committee to work to maintain a board that reflects the diversity, in terms of gender, age, race, ethnicity and other self-identified diversity attributes of the communities the Company serves, and to support that goal through appropriate board-level self-assessment, nomination and recruitment processes. The Committee evaluates potential candidates against these requirements and objectives. For those director candidates who appear upon first consideration to meet the Committee’s criteria, the Committee will engage in further research to evaluate their candidacy.

The Nominating and Governance Committee periodically retains search firms to assist in the identification of potential director nominee candidates based on criteria specified by the Committee and in evaluating and pursuing individual candidates at the direction of the Committee. The Committee will also consider timely written suggestions from shareholders. In addition to satisfying the requirements under our By-Laws, to comply with the SEC’s universal proxy rules, shareholders who intend to

 

 

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LOGO    Proposal 1—Election of Directors: Committee Charters

 

 

solicit proxies in support of director nominees other than the Company’s nominees at any annual meeting of shareholders must provide notice that sets forth the information required by Rule 14a-19 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) no later than 60 days prior to the anniversary of the previous year’s annual meeting date, except that, if we did not hold an annual meeting during the previous year, or if the date of the meeting has changed by more than 30 calendar days from the previous year, then notice must be provided by the later of 60 calendar days prior to the date of the annual meeting or the 10th calendar day following the day on which we first announce the date of the annual meeting. See “How do I submit a shareholder proposal or nominate a director for election at the 2024 Annual Meeting?” on page 28 for additional information.

The By-laws of the Company establish a mandatory retirement age of 73 for directors who have not been executives of the Company and 65 for directors who have served as executives, except that the Board of Directors may extend the retirement age beyond 65 for directors who are or have been the CEO of the Company. The Company’s Principles of Corporate Governance also provide that a director who retires from, or has a material change in responsibility or position with, the primary entity by which that director was employed at the time of his or her election to the Board of Directors shall offer to submit a letter of resignation to the Nominating and Governance Committee for its consideration. The Committee will make a recommendation to the Board of Directors on whether to accept or reject the resignation, or whether other action should be taken.

In July 2022, Mr. Epstein resigned from his position with DAZN Group and in February 2023, Mr. Elias informed the Board that he was retiring from Dell Technologies, effective May 5, 2023. In accordance with the procedures outlined in the Company’s Principles of Corporate Governance, Mr. Epstein and Mr. Elias each offered to submit a letter of resignation to the Committee for consideration in connection with their respective changes in employment status. In both cases the Committee recommended that the Board not accept the resignation offers and the Board accepted the Committee’s recommendations. With respect to Mr. Epstein, it was the sense of the Committee, and the Board more generally, that Mr. Epstein’s extensive knowledge of media, technology and capital markets, as well as his deep transactional experience, expertise in overseeing strategic business initiatives and financial acumen would continue to make him a valuable member of the Board. With respect to Mr. Elias, it was the sense of the Committee, and the Board more generally, that Mr. Elias is an exemplary leader of the Board, as most notably illustrated by the valuable strategic guidance he provided in connection with the negotiations relating to the merger agreement with certain affiliates of Standard General L.P., and that Mr. Elias’s extensive experience overseeing M&A and new business development and his comprehensive global business and management experience in information technology, would continue to make him an invaluable asset to the Board.

Public Policy and Regulation Committee

The Public Policy and Regulation Committee assists the Board in its oversight of risks relating to legal, regulatory, compliance, public policy and corporate social responsibility matters that may impact the Company’s operations, performance or reputation. The Committee’s duties and responsibilities include reviewing and providing guidance to the Board about legal, regulatory and compliance matters concerning media, antitrust and data privacy and monitoring legislative and regulatory trends and public policy developments that may affect the Company’s operations, strategy, performance or reputation. The Public Policy and Regulation Committee also is responsible for reviewing compliance with the Company’s Ethics Policy and assuring appropriate disclosure of any waiver of or change in the Ethics Policy for executive officers, and for reviewing the Ethics Policy on a regular basis and proposing or adopting additions or amendments to the Ethics Policy as appropriate. In addition, the Committee monitors the Company’s policies and programs relating to corporate social responsibility, sustainability, and ESG-related matters within its purview, and periodically discusses with management the Company’s initiatives for promoting racial and ethnic diversity in its news and other content.

Committee Charters

The written charters governing the Audit Committee, the Leadership Development and Compensation Committee, the Nominating and Governance Committee and the Public Policy and Regulation Committee, as well as the Company’s Principles of Corporate Governance, are posted on the Corporate Governance page of the Company’s website at www.tegna.com under the “Investors” menu. You may also obtain a copy of any of these documents without charge by writing to: TEGNA Inc., 8350 Broad Street, Suite 2000, Tysons, Virginia 22102, Attn: Secretary.

 

 

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Corporate Governance

The Board and the Company have instituted strong corporate governance practices to ensure that the Company operates in ways that support the long-term interests of our shareholders. Important corporate governance practices of the Company include the following:

 

 

  All of our directors are elected annually.

 

  Eight of the nine TEGNA nominees are independent.

 

  We have a robust shareholder engagement program pursuant to which our independent directors and senior management typically engage with investors.

 

  We have an independent Board chair.

 

  We maintain an ongoing board refreshment process.

   

 

  Our directors and senior executives are subject to stock ownership guidelines.

 

  We do not have a shareholder rights plan (poison pill) in place.

 

  We have a majority vote standard for uncontested director elections and a director resignation policy.

 

  Our Board has adopted a proxy access by-law provision.

 

  Mergers and other business combinations involving the Company generally may be approved by a simple majority vote.

 

Additional information regarding the Company’s corporate governance practices is included in the Company’s Principles of Corporate Governance posted on the Corporate Governance page under the “Investors” menu of the Company’s website at www.tegna.com. See the “Compensation Discussion and Analysis” section of this Proxy Statement for a discussion of the Company’s compensation-related governance practices.

Shareholder Engagement

The Company is committed to acting in the best interests of its shareholders, and has always viewed ongoing dialogue with shareholders as a critical component of the Company’s corporate governance program. Regular engagement with shareholders fosters an open exchange of ideas and perspectives for both the Company and its shareholders. Members of management and the Board have in the past undertaken outreach to many of the Company’s shareholders with the goal of better understanding their perspectives on a range of issues relating to the Company, including governance, business performance and strategy. In addition, the Company has always welcomed constructive feedback and input from its shareholders.

In light of the termination of the proposed merger with Standard General, L.P. (“Standard General”) on May 22, 2023 due to regulatory constraints, the Company intends to renew its engagement and outreach to shareholders in order to better understand the priorities and perspectives of the Company’s current shareholder base. These efforts will include targeted engagement to better understand current perspectives regarding a shareholder proposal concerning a shareholder right to call a special meeting, which received majority shareholder support at the Company’s 2022 annual meeting. The Company believes that further engagement on this matter is prudent and advisable for several reasons:

First, the context in which shareholders evaluated whether or not to support a shareholder right to call a special meeting has changed significantly, which may in turn have impacted shareholder perspectives on this matter. The 2022 annual meeting took place during the pendency of the Standard General transaction. If the transaction had been consummated, the Company would have become a private company with no public shareholders, and the shareholder proposal concerning the special meeting right would have been rendered moot or irrelevant. Additionally, we believe the Company’s shareholder base may have changed significantly since the 2022 annual meeting in connection with the termination of the Standard General transaction. As such, the Company believes that those of its shareholders who expressed their view at the 2022 annual meeting on a shareholder right to call a special meeting may have had expectations regarding the future of the Company that are no longer current or aligned with the views of the Company’s current shareholder base.

 

 

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LOGO    Proposal 1—Election of Directors: The Board’s Role in Risk Oversight

 

 

Second, the vote on the shareholder right to call a special meeting at the 2022 annual meeting took place without the benefit of significant shareholder engagement. In a typical year, members of management and the Board actively engage with our shareholders through in-person and telephonic meetings in order to fully understand their viewpoints concerning the Company, to garner feedback on areas for improvement, to better understand our shareholders’ evolving expectations relating to corporate governance, and to help our shareholders better understand our performance and long-term strategic plan

to generate shareholder value. For instance, in 2021 the Company actively reached out to shareholders representing, in the aggregate, approximately 54% of our outstanding shares in order to understand their viewpoints concerning a variety of topics.

However, 2022 was not a typical year for the Company. The Company’s outreach to its shareholders was relatively limited during the pendency of the Standard General transaction, as we focused our attention on obtaining regulatory approval of the transaction.

Given the importance and consequence of the rights identified in the proposal, the Company believes that, before taking any definitive action, it is best to take additional steps to understand the rationale of shareholders who supported the 2022 proposal and the perspectives of the Company’s current shareholder base. This will be most effectively accomplished by addressing the specific elements of any such shareholder right (e.g., ownership threshold, holding period, required information, etc.) through direct communication with the Company’s shareholders.

Moving forward, the Company intends to take a holistic approach in managing its governance structure and business profile, with the benefit of proactive shareholder engagement to occur after the 2023 annual meeting and in advance of the Company’s 2024 proxy statement filing. The Company is committed to including a management proposal in its 2024 proxy statement regarding a shareholder right to call a special meeting, at which time the Company anticipates it will have completed the engagement referred to above. Such proposal will be responsive to shareholder concerns, and subject to a vote of the Company’s shareholders.

For those who are unable to attend any of our investor meetings, transcripts of all management presentations are available on our website at www.tegna.com. Any shareholder who has an inquiry or meeting request is invited to contact Julie Heskett, Senior Vice President, Financial Planning and Business Operations, at (703) 873-6747.

The Board’s Role in Risk Oversight

The Board is primarily responsible for overseeing the Company’s approach to major risks and the Company’s risk management function in the context of the Company’s strategic plan and operations. In addition, the Company has implemented an enterprise risk management (ERM) program to enhance the Board’s and management’s ability to identify, assess, manage and respond to enterprise-wide strategic, market, operational and compliance risks facing the Company.

Company management has day-to-day responsibility for (1) identifying risks and assessing them in relation to Company strategies and objectives, (2) implementing suitable risk mitigation plans, processes and controls, and (3) appropriately managing risks in a manner that serves the best interests of the Company, its shareholders and other stakeholders. Management regularly reports to the Board on its risk assessments and risk mitigation strategies for the major risks of our business. Senior management and other employees also report to the Board and its committees from time to time on risk-related issues. As part of our ERM program, our Board communicates to management its expectations for evaluating Company strategy and the risks inherent in that strategy, while management provides the Board with the information necessary to evaluate risk. Our ERM program is updated on a regular basis in order to identify potential risk exposures.

 

 

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LOGO    Proposal 1—Election of Directors: The Board’s Role in the Oversight of Cybersecurity and Data Privacy

 

 

Further, each committee of the Board also considers risk within its area of responsibility, with committee chairs reporting regularly to the entire Board on their committees’ efforts and findings, as noted in the following:

 

      Responsibilities
Full Board   

 

Primary responsibility for overseeing the Company’s risk management function and reviewing the steps management has taken to monitor and control the Company’s significant business risks, including potential financial, operational, privacy, cybersecurity, business continuity, legal and regulatory, and reputational exposures.

 

Audit Committee

  

 

Reviews and discusses with management the guidelines and policies developed and implemented by management to assess and manage the Company’s exposure to risk. Also reviews financial, accounting and audit risks, including risks relating to accounting and financial controls, and oversees the Company’s ERM program generally.

 

Leadership Development and Compensation Committee

  

 

Oversees and evaluates risks associated with the compensation and development of the Company’s executives and succession planning, including review of the Company’s compensation plans, policies and programs to confirm they are not structured to encourage unnecessary risk taking by executives.

 

Nominating and Governance Committee

  

 

Oversees and monitors the Company’s risks related to Board structure and composition, and corporate governance.

 

Public Policy and Regulation Committee

  

 

Oversees the Company’s risk exposure associated with media, antitrust and data privacy laws, rules and regulations, compliance with the Company’s ethics policy and public policy and corporate social responsibility, sustainability and “ESG”-related matters, in coordination with the other Committees of the Board.

With respect to risks relating to compensation matters, the Leadership Development and Compensation Committee, with the assistance of its independent compensation consultant, has reviewed the Company’s executive compensation program and has concluded that the program does not create risks that are reasonably likely to have a material adverse effect on the Company.

The Board’s Role in the Oversight of Cybersecurity and Data Privacy

Protecting the Company’s systems and our data from cyberattacks and unintentional or malicious breaches is a priority for the Company’s leaders and the Board. The Board provides oversight and receives regular updates and reports about the Company’s cybersecurity programs and policies. Information Technology (IT) leaders also provide quarterly and annual cybersecurity updates to the Board.

Cybersecurity Highlights:

 

 

The Company uses the NIST Cybersecurity Framework and has clearly defined policies and standards for all employees and technical systems.

 

 

Following the NIST Cybersecurity Framework, the Company utilizes policies, software, training programs and hardware solutions to protect and monitor our environment, including multifactor authentication on all critical systems, firewalls, intrusion detection and prevention systems, vulnerability and penetration testing and identity management systems.

 

 

The Company has an extensive patching and software update program, and performance metrics are reported to our Board on a regular basis.

 

 

We conduct annual security awareness training for all employees, and regularly conduct internal email phishing tests to validate training.

 

 

The Company has documented and tested incident response plans, which are updated annually and verified by an outside law firm with cybersecurity expertise.

 

 

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We undertake frequent business impact analysis to review our technology infrastructure, partners and process dependencies and to prioritize the recovery planning governance.

 

 

We review our vendors’ cybersecurity practices before we enter into business transactions with them, and we seek to contractually obligate vendors to operate their environments in accordance with strict cybersecurity standards. We also develop contingency plans to ensure business continuity if our vendors are subject to a cyberattack that impacts our use of their systems.

The Board, through its Public Policy and Regulation Committee (the “PPRC”), also oversees the Company’s efforts to comply with data privacy laws and regulations. Our Chief Privacy Officer works closely with our information technology security team and our management to address privacy issues when they arise. The PPRC reviews TEGNA’s privacy policy with the Chief Privacy Officer on at least an annual basis to ensure our standards reflect applicable legal requirements and our current data practices. Our Chief Privacy Officer also provides regular reports to the PPRC regarding developments in the privacy law landscape.

Data Privacy Highlights:

 

 

The Company’s employee data, including human resources and payroll data, is generally maintained by outside vendors under long-term contracts. These vendors’ data security programs are vetted by Company IT personnel, and contracts include requirements regarding the protection of our data, including reasonable assurances that data is encrypted while at rest. The Company also requires access to annual SOC-1 and/or SOC-2 compliance reports whenever available.

 

 

All of the Company’s digital properties have a privacy policy that discloses how we collect, maintain and use consumer information and describes the ways in which our audience can limit and/or opt out of our collection and use of their data. The Company also complies with applicable state consumer privacy laws, including laws enacted in California, Virginia, Connecticut, Colorado, and Utah, including by allowing residents of those states and other visitors to our digital properties to exercise the rights afforded under those laws, as further described in our privacy policy. As part of our efforts to honor user choice, we have integrated the OneTrust preference center into our television station desktop and mobile websites and mobile apps to facilitate our users’ ability to opt out of the sale and/or sharing of personal information in connection with ad targeting.

 

 

The Company strives to comply with the Payment Card Industry Data Security Standards (PCI DSS). In its efforts, the Company uses a third-party vendor to process all credit card transactions with our advertising customers. As a result, the Company does not intentionally collect its customers’ payment card data, helping us to limit the risk of exposing such data in the event of a security incident.

The Board’s Role in Corporate Strategy

The Board of Directors is actively involved in overseeing, reviewing and guiding the Company’s corporate strategy. Strategic business issues, including developments in our industry and industry positioning, opportunities for growth, multiyear strategic plans, investments and capital allocation, including M&A-related decisions, are discussed as a matter of regular course at our Board meetings. The Board also discusses corporate strategy throughout the year with management, both formally and informally, and during executive sessions of the Board, as appropriate.

The Board discusses the Company’s performance and results relative to our operating plan and expectations periodically throughout the year. At regular Board meetings, senior Company management makes presentations to the Board to facilitate a further in-depth and comprehensive discussion and review of the Company’s strategic and operational plans, initiatives and goals over the long, medium and short-term, as well as paths, options and alternatives to achieving such goals.

Board and committee-level discussions are also regularly infused with strategic and business themes. For example, the Public Policy and Regulation Committee regularly discusses the potential impact of regulatory developments on the Company’s strategy and operations and the Leadership Development and Compensation Committee seeks to ensure that the Company’s human capital management policies and programs are designed to maximize the Company’s ability to recruit, develop and retain the talent necessary to support its strategic and operational priorities.

 

 

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LOGO    Proposal 1—Election of Directors: Board Oversight of Corporate Responsibility Initiatives

 

 

Board Oversight of Corporate Responsibility Initiatives

The Board has oversight of the Company’s Corporate Responsibility initiatives and practices. In particular, the PPRC monitors, in coordination with the Board and other Board committees regarding matters within their purview, the Company’s policies and programs relating to corporate responsibility matters, including:

 

 

TEGNA’s strategy and initiatives to serve the greater good of our local communities while strengthening our business and protecting and enhancing TEGNA’s long-term value to our employees, shareholders and communities; and

 

 

TEGNA’s policies and commitment to managing our environmental impact responsibly and sustainably and educating the public on these issues through our journalism.

As a result of the Board’s ongoing oversight of TEGNA’s corporate responsibility and outreach to our shareholders, we have made several enhancements to our disclosures, including:

 

 

Publishing annual updates to provide information on our corporate social responsibility initiatives to stakeholders;

 

 

Providing Diversity, Equity and Inclusion (DE&I) updates to further enhances discussion of diversity and leadership initiatives and the progress made ahead of schedule on each of our 2025 DE&I goals;

 

 

Providing an overview of our sustainability efforts to describe how TEGNA is intensifying our focus on being responsible stewards of our resources; and

 

 

Aligning our reporting with the Sustainability Accounting Standards Board (SASB) guidelines for the Media & Entertainment industry in response to investor feedback.

Board Oversight of Diversity, Equity and Inclusion

The Board and management are committed to ensuring our company reflects the diversity of the communities we serve. In 2022, we made sustained progress on the five pillars we implemented in 2020 to support our 2025 DE&I goals to increase Black, Indigenous and People of Color (BIPOC) representation on our content teams, content leadership and company leadership. To strengthen accountability in diversity in the governance of the Company, the Board has adopted specific areas of oversight for each Board committee regarding how TEGNA approaches diversity:

 

 

The Leadership Development & Compensation Committee is responsible for monitoring the Company’s performance in diversity, inclusion and equal employment opportunity, supporting our commitment to these principles and the continuation of our efforts to gain and maintain diversity among our employees and management.

 

 

The Nominating & Governance Committee is responsible for monitoring the racial, ethnic and gender diversity of the Board.

 

 

The Public Policy and Regulatory Committee reviews with management the Company’s approach to, and initiatives and support for, promoting racial and ethnic diversity in our news and other content, through inclusive journalism and racial and ethnic diversity in our editorial decision-making and leadership.

 

 

The Audit Committee is responsible for monitoring the Company’s finance and asset management-related diversity and inclusion efforts, including our investment and purchasing involving minority-owned businesses.

 

 

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LOGO    Proposal 1—Election of Directors: Corporate Social Responsibility

 

 

Corporate Social Responsibility

Our corporate social responsibility and ESG practices are designed to strengthen our business while protecting and enhancing TEGNA’s long-term value for all our stakeholders—our communities, our employees, and our shareholders.

 

 

LOGO

 

 

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LOGO    Proposal 1—Election of Directors: Corporate Social Responsibility

 

 

LOGO

 

Under the oversight of the Public Policy and Regulation Committee, the Company’s environmental policy focuses on being responsible stewards of our resources by centering on environmentally responsible business operations, management of our carbon footprint and energy conservation. We have taken proactive measures to address the impact of climate change on the operation of our business, including:

 

  Developing contingency plans relating to natural disasters, such as hurricanes, which disproportionately impact our east coast and Gulf of Mexico stations. These plans include securing access to off-site backup locations where we can move our operations in the event our locations are impacted by these severe weather events to allow us to seamlessly continue our operations.

 

  Investing in new technical infrastructure to better prepare us for a catastrophic event, including strengthening our studio and control room sharing capabilities to allow one market to support another, and procuring new master control technology to create additional redundancies and backup capabilities. We also invested in a large production truck that can travel to our markets to provide full newsroom and studio capabilities if one of our newsrooms is severely impacted by a catastrophic event.

 

  Reviewing the roof structures of our buildings to ensure that they are safe from the impacts of wind, hail and storms.

 

  Making modifications at certain of our locations to protect from the potentially damaging effects of floods, including moving key equipment to higher locations within our sites, strengthening floodwalls, and improving irrigation outside our buildings.

Our Work Locations: We have taken lessons learned during the COVID-19 pandemic and have reduced unnecessary business travel by using video conferencing technology across the Company. We also continued our practices of:

 

  Recycling and responsibly disposing of technology products and equipment and reducing the waste we generate at our corporate offices and in production processes.

 

  Implementing thoughtful energy efficiency strategies, including upgrading stations’ studio lighting to LED;
   

replacing inefficient HVAC systems, and replacing roofs with energy efficient alternatives.

Reporting on Environmental & Sustainability Issues: Our stations regularly report on local, national and global content on environmental and sustainability issues impacting our communities. For example:

 

  In the year following the Marshall Fire in Colorado, the most destructive wildfire in state history, KUSA in Denver spent months geolocating and timestamping hundreds of videos from cellphones, body-worn cameras, and security cameras. The station then created The Marshall Fire Map, representing a first-of-its-kind effort to document what life was like for thousands of people in Boulder County during the fire.

 

  KPNX in Phoenix continued its Scorched Earth series and investigated how homeowners in the City of Scottsdale will soon be losing access to the city’s water—yet homes are still being sold in the area.

 

  News Center Maine continued to explore climate change in the state, including updates on where the state stands in meeting its four-year climate action goals established in 2020.

 

  In 2022, as part of its broader Environment Matters special reporting, WUSA in Washington introduced ECO9, an environmentally friendly, low emission live truck. The first of its kind in the broadcasting industry, ECO9 is a 2022 Toyota Highlander XLE Hybrid that was conceived by WUSA and built by the engineers at Frontline Communications. Equipped with three cameras—two fixed internal and one 360-degree external—ECO9’s electronics for broadcasting run on a state-of-the-art rechargeable lithium-ion battery system (Li-ION batteries) with supplemental charging from solar panels on the roof, which allow for trickle charging during the day while ECO9 is out in natural light. ECO9’s broadcasting system can operate continually with the truck’s engine turned off for six hours. Capabilities also include remote live camera signal transmission with video switching and professional LED lighting for in-the-field reporting.
 

 

 

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TEGNA Foundation Sustainability Grants: Through the TEGNA Foundation, several stations identified grants to support sustainability efforts within their communities. In 2022, these included:

 

  KFMB in San Diego’s support of I Love a Clean San Diego County’s Kid’s Ocean Day, a beach clean-up day including lessons on water conservation, pollution prevention, and watershed protection for 800 local students;

 

  WHAS in Louisville’s support of Friends of Beechwood Park’s annual festival focusing on the environment and local environmental clean-up efforts; and

 

  WKYC in Cleveland’s support for Alliance For The Great Lakes, supporting improved water infrastructure in the Cleveland area, including water affordability programs and replacing lead service lines.
 

 

LOGO

 

We are committed to building a more diverse, equitable and inclusive culture. In 2022, we continued our progress towards achieving our publicly stated and quantifiable five-year Diversity, Equity and Inclusion (DE&I) goals to increase Black, Indigenous and People of Color (BIPOC) representation in our content teams, content leadership and company leadership during the year. Our sustained progress is due to the collective efforts at all levels of our

organization; from our Board of Directors to our local Diversity & Inclusion (D&I) teams, and everyone in between.

We know there is much more work to do, and progress takes a daily commitment. We are proud of the gains we have made in diversifying our workforce, creating a more inclusive culture, and ensuring our storytelling reflects the communities we serve.

 

 

 

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  2025 Diversity and Inclusions Goals and 2022 Progress
  Content Teams: Increase the diversity of our content teams (news, digital and marketing employees) to reflect the aggregate BIPOC* diversity of the communities we serve, which is ~36%.     Content Leadership: Increase BIPOC representation in content leadership roles by 50%.     Company Leadership: Increase BIPOC representation across all management roles within the organization by 50%.  
         

* BIPOC = Black, Indigenous, and People of Color

 

 

 
   

 

 

 

 

CONTENT

TEAMS

 

 

 

 

 

 

 

 

 

 

CONTENT

LEADERSHIP

 

 

 

 

 

 

 

 

 

 

COMPANY

LEADERSHIP

 

 

 

 

 

 

 

 

 

 

ALL
EMPLOYEES

 

 

 
 

 

 
   
 

 

2025

BIPOC Goals

 

 

 

 

 

Reflect markets

at ~36%

 

 

 

 

 

 

 

 

 

 

Increase by 50%

 

 

 

 

 

 

 

 

 

Increase by 50%

 

 

 

 

   
 

 

 

 

 

On track

 

 

 

 

 

 

 

 

 

On track

 

 

 

 

 

 

 

 

 

On track

 

 

 

 

   
         
 

 

2022

BIPOC Progress

 

 

 

 

 

1/1/21 – 27%

12/31/21 – 30%

12/31/22 – 32%

 

 

 

 

 

 

   

 

1/1/21 – 17%

12/31/21 – 20%

12/31/22 – 23%

 

 

 

 

 

   

 

1/1/21 – 16%

12/31/21 – 18%

12/31/22 – 20%

 

 

 

 

 

   

 

1/1/21 – 25%

12/31/21 – 27%

12/31/22 – 29%

 

 

 

 

 

 
           
         
 

 

2022

Female Representation

 

 

 

 

 

1/1/21 – 46%

12/31/21 – 46%

12/31/22 – 45%

 

 

 

 

 

 

 

 

 

 

 

1/1/21 – 45%

12/31/21 – 44%

12/31/22 – 44%

 

 

 

 

 

 

 

 

 

 

 

1/1/21 – 41%

12/31/21 – 42%

12/31/22 – 42%

 

 

 

 

 

 

 

 

 

 

 

1/1/21 – 47%

12/31/21 – 47%

12/31/22 – 47%

 

 

 

 

 

 

 
           
         
   

 

ASIAN

 

 

BLACK OR
AFRICAN-
AMERICAN

 

 

 

HISPANIC
OR LATINO

 

 

WHITE

 

 

OTHER

 

 

N/A*

 
             
 

 

All Employees

 

 

3.1%

 

 

12.7%

 

 

10.7%

 

 

68.4%

 

 

2.5%

 

 

2.6%

 
     

 

* N/A not available or not disclosed

 

 
               

 

To support our DE&I goals, we are actively seeking diverse talent through recruiting, investing in a multiyear Inclusive Journalism program, requiring unconscious and implicit bias training of all employees, gathering regular input from our local Diversity & Inclusion teams and championing lesbian, gay, bisexual, transgender and queer or questioning (LGBTQ) equality.

For the sixth consecutive year, TEGNA was named a Best Place to Work for LGBTQ Equality by the Human Rights Campaign’s Corporate Equality Index. The 2022 Corporate Equality Index evaluated LGBTQ-related policies and practices including non-discrimination workplace protections, domestic partner benefits, transgender-inclusive health care benefits, competency programs, and public engagement with

the LGBTQ community. We received the highest marks in all categories, resulting in a perfect score of 100.

The following are the five pillars that support achieving our DE&I goals and notable progress we have made in 2022:

 

1.

Talent Pipeline and Bench Strength: Increase partnerships with diverse professional organizations, Historically Black Colleges and Universities (HBCUs), Hispanic-serving institutions, and universities. Continue building our existing internship, Producer-in-Residence, and other early career programs.

 

 

Progress: We continued to expand our partnerships with the National Association of Black Journalists, National Association of Hispanic Journalists, and Asian American

 

 

 

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Journalists Association through engagements at both the national and local level. Our trailblazing Producer-in-Residence program increased its class size from 2021, with 64% of participants represented by people of color, and 76% of participants identifying as female. Our paid Summer Intern Program experienced similar success, with people of color representing 53% of our interns. Additionally, while we have had a focus on our content teams, in partnership with our sales leaders, our talent organization launched our first-ever Sales-in-Residence program, designed to enhance a diverse early-career talent pipeline into sales generating roles. 67% of our inaugural class was represented by people of color.

 

2.

Leadership Compensation Tied to Diversity and Inclusion Goals: Enhance our diversity and inclusion goals for key leaders in the organization.

 

  Progress: We continued to deliver on our commitment to ensure that D&I goals are embedded meaningfully into both our annual performance management and our bonus processes for 2022. We also confirmed these measures will carry over into our 2023 processes.

 

3.

Multi-Year Inclusive Journalism Program: Development and launch of customized, multi-year inclusive journalism program with expert external partners.

 

  Progress: In 2022, we continued our partnerships with both The Poynter Institute and Horowitz Research as we further evolve our multi-year Inclusive Journalism Program. With Poynter, we created a training framework to ensure 2022 new hires received the same foundation as our employees who matriculated through the 2021 training portion of the program. We also launched a mid-level manager training program titled Inclusive Leadership Program with Poynter, which will carry over into 2023. Additionally, we remained focused on measuring outcomes of our program through content audits led by Horowitz Research. All our stations received audit reports on broadcast, digital, and marketing content which has led to greater awareness and intentional actions to ensure our storytelling, imagery, and language resonates and honors the communities we serve.

 

4.

Leverage Insights from Employee Feedback: Implement employee input to improve our action planning and accountability.

 

  Progress: Our companywide D&I Working Group and local D&I teams continue to be an important part of our journey to create more inclusive environments for all identities at our Company. In 2022, we focused on the empowerment of our local D&I teams to ensure teams were positioned to partner with our local leadership to address opportunities and issues at the local level. The development of new
   

content franchises, greater inclusion in editorial processes, increased participation by frontline employees in interview processes, and a host of other meaningful actions are the result of the partnership of our D&I teams.

 

5.

Employee Training: Provide employees with ongoing resources and platforms to increase learning and discussion on D&I topics to support a culture of belonging.

 

  Progress: In 2022, we continued the monthly rollout of our companywide D&I Discovery Series that covered a different D&I learning topic and sparked broad participation by station groups, with discussions often led by station leaders and local D&I groups. We continued our partnership with the National Center for Civil and Human Rights to engage in a training series on implicit bias, microaggressions, and other DE&I topics for leaders and employees. Additionally, we launched an internal DE&I Newsletter and DE&I Resource Site that provides valuable resources for both managers and employees on several diversity, equity and inclusion topics.

 

LOGO

Our people play an important role in our success in today’s rapidly evolving media landscape. The Board’s Leadership Development and Compensation Committee oversees our human capital management objectives to attract, retain and develop the highest caliber talent in our industry. Our human resources programs are designed to support these objectives by offering competitive pay, industry-leading benefits and development and growth opportunities. We strive to foster diversity, inclusion and innovation in our culture through our human resources, diversity and journalism programs and policies.

Journalist Safety: Our head of security and safety coordinates ongoing safety training in all our newsrooms as part of our protection protocols for journalists.

Employee Well-Being: Maintaining the health and wellbeing of our employees and their families is a top priority for our company. The following benefits were approved in 2022 and took effect in January 2023:

 

 

Coverage for disposable insulin pumps: TEGNA’s pharmacy plan through CVS Caremark® covers newly released disposable insulin pumps, such as the Omnipod 5,

 

 

 

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reducing daily injections and finger sticks, and providing significant savings for employees.

 

  Savings on prescription drugs: TEGNA makes the RxSavings Plus discount program available to all employees—even those not enrolled in our medical plan—to provide significant savings at the pharmacy on generic and brand name drugs for employees, their family members and pets.

 

  Savings on lenses and coating for glasses: Employees that need premium progressive lenses and/or want to add premium anti-reflective coating will find these enhancements at a fixed out-of-pocket cost, saving them money.

 

  100% dental coverage for children up to age 13: We have added Delta Dental’s Right Start 4 Kids program to our dental plans. Designed for children up to age 13, this program provides 100% coverage with no deductible for most diagnostic, preventative and basic services when employees visit an in-network dentist.

 

  Access to more dental providers: TEGNA has moved to the Delta Dental Basic Plan, which offers similar benefits to the previously offered EPO Plan with expanded access to more dental providers for greater flexibility and choice.

 

  Improving disability claims processing: We have transitioned our disability administration to Aflac in 2023 to expedite the benefits process for those who need it.

TEGNA also offers a comprehensive wellness program that provides employees with enhanced mental health and wellness benefits through Spring Health. Spring Health is a convenient, comprehensive and confidential wellness service that is available 24/7 with up to 12 free therapy sessions provided to help employees and their families manage stress, increase focus, and get help when they need it. TEGNA covers 12 annual therapy sessions for employees and each of their family members, even if they are not enrolled in TEGNA’s medical plans. In 2022, TEGNA introduced WellSprings by Spring Health, a year-long series of small group webinars designed to cultivate connection and support around topical health stressors. In addition to mental health support, Spring Health also provides access to a broad network of resources to meet legal, financial, dependent and other care needs.

TEGNA provides a company-matching 401(k) Savings Plan for future financial security. All employees, including part-time and temporary employees, are eligible and TEGNA matches employee contributions dollar for dollar on the first 4% of eligible pay. Participants are immediately 100% vested in all contributions, including the company match.

All new parents receive at least six weeks of paid parental leave to focus on their growing family. Women who give birth are eligible to take a minimum of 12 weeks maternity 100% paid leave. We offer an adoption reimbursement of $10,000 and a surrogacy reimbursement benefit of $10,000 to support every path to parenthood and provide coverage for employees’ family planning goals.

Work-life balance benefits are available through a TEGNA-sponsored membership to Care@Work. We also provide other additional and optional benefits including, among others, life and disability insurance plus supplemental insurance options, virtual 24/7 telehealth access, paid time off and nine company holidays, active duty leave, caregiver leave, employees discounts, a volunteerism program, matching gifts, and student loan refinancing and tuition reimbursement.

Talent Development and Performance Management: TEGNA provides a range of learning and development opportunities for employees and leaders to help expand their skills and prepare them to step into larger roles in the future and grow their careers.

 

  Executive Leadership Development Program: TEGNA’s Executive Leadership Development Program is an in-depth eight-month leadership development program designed to prepare our current and future general managers and functional business leaders for larger roles.

 

  Leadership in Action Program: TEGNA’s Leadership in Action Program is an in-depth six-month leadership development program designed to prepare current and future department head and director-level functional leaders for larger roles.

 

  Manager Development Program: We provide annual development opportunities for new managers, mid-level managers and department heads or director-level functional leaders.

To support our culture of innovation, we provide the following professional development opportunities:

 

  Innovation Summits: Several times a year, we bring employees from across our company together for Innovation Summits, where great ideas are shared and created. These summits have resulted in new pilots and cross-platform projects designed to meet the needs of today’s news consumers.

 

  Content Summits: Through innovation and creative storytelling, we are reaching new audiences and reinventing local journalism in the digital age. Our Content Summits ensure we are creating exciting, unique, original and shareable content that is valued by our audience.
 

 

 

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  News Leadership Forum: Our News Leadership Forum provides high-performing news managers exposure to the day-to-day operational responsibilities of a news or digital director and develops our next generation of newsroom leaders.

 

  Producer Training: Impactful storytelling is a hallmark of our work and ongoing training for our broadcast and digital producers ensure they have the support they need to enhance their skills and deliver for our audiences.

 

  Sales Training: Sales innovation permeates our sales organization. From first-to-market products like Premion and TEGNA Attribution to our “One Team TEGNA” sellers, we ensure our sales professionals are equipped to deliver superior outcomes for our clients. Our exclusive sales enablement program, Inside Out, provides the training and professional opportunities sellers need to be successful.

We provide three main early career opportunities for college student and graduates, including:

 

  Producer-in-Residence Program: Our Producer-in-Residence program is for graduating college seniors and is the largest producer development program in the industry. Designed to develop the next great broadcast and digital producers for our newsrooms, the program includes a two-week producer boot camp and then a two-year, full-time producer position at a local station

 

  Sales-in-Residence Program: TEGNA’s Sales-in-Residence program is for graduating college seniors and is designed to train and develop new sales talent. The 12-month program offers in-person and virtual learning sessions to help participants gain the marketing and sales expertise needed to drive impactful business outcomes for businesses and brands in the markets we serve.

 

  Internship Program: Our paid internship program gives students an opportunity to explore career paths across TEGNA, gain valuable real-world experience and work with talented leaders and colleagues who are both interested and invested in your success.

LOGO

With our purpose to serve the greater good of our communities, TEGNA strives to make a positive impact in the communities where we live and work. In 2022, TEGNA was recognized for a third consecutive year by The Civic 50 as one of the most community-minded companies in the U.S. and the Telecommunications Sector Leader.

Principles of Ethical Journalism: As a Company that focuses on producing and distributing the highest-quality news and information content, journalistic integrity is critical to ensure our stations are the most trusted news sources in their communities. The Board’s Public Policy and Regulation Committee oversees our Ethics Policies, including our Principles of Ethical Journalism, which define our guiding principles of truth, independence, public interest, fair play and integrity. All employees who gather, report, produce and distribute news and information on any platform review our code of conduct annually and attend annual training sessions on ethical journalism. Our Chief Ethics Officer also conducts libel, privacy and fairness training for all journalists. In 2022, news leaders and top future leaders received an ethics training which presented real-life scenarios and participants were asked to make decisions based on elements of our Principles of Ethical Journalism.

Community Grants: Through the TEGNA Foundation, we work to improve lives in the communities we serve by contributing to a variety of local charitable causes through Community Grants. In 2022, the TEGNA Foundation in partnership with local stations made 367 Community Grants totaling $1.89 million. Grants are distributed within the United Nations Sustainable Development Goal framework, with the majority of 2022 grants supporting three major categories: Good Health and Well-Being, Quality Education, and Zero Hunger.

DE&I Grants: In 2022, the TEGNA Foundation formalized its DE&I grantmaking by creating a new grant program and employee committee. 25 grants were made in the program’s first year, supporting nonprofit organizations throughout the communities where TEGNA does business. Grants focused on support for the LGBTQ+ youth and senior communities, programs supporting girls and women, support for the creation of the National Juneteenth Museum, and organizations creating opportunities for individuals of all abilities.

 

 

 

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LOGO    Proposal 1—Election of Directors: Annual Board Performance Evaluation

 

 

Media Grants: Media Grants support training for the next generation of diverse journalists, education and development opportunities for journalists and other professionals in the media field, and protection of First Amendment freedoms. In 2022, we awarded $135,000 in Media Grants to 12 organizations, including two grants to the National Association for Hispanic Journalists to provide student support for the organization’s annual conference and support for a nine-month long Career Preparation Workshop series. Additional Media Grants went to the American Bar Association Fund for Justice and Education to support the 2023 Moot Court competition; Asian American Journalists Association for its JCamp and Voices student programs; Carole Kneeland Project for Responsible Television Journalism to support boot camps, training, and online continuing education; and Investigative Reporters and Editors Inc. for two Freedom of Information Act sessions and the Media Lawyer Brown Bag lunch session at the 2022 annual conference.

Grants also went to the National Association of Black Journalists to support a professional development session at

the 2022 annual conference and to support the 2022 Black Male Media Project; NLGJA: The Association of LGBTQ Journalists to support the CONNECT: Student Journalism Training Program, a conference for LGBTQ student journalists; Native American Journalists Association to support student programming at their annual conference; Online News Association to support student/new professional scholarships for the 2022 conference; and the Radio Television Digital News Foundation for the 2022 student support at the 2022 conference.

Employee Giving & Volunteerism: Our employees also give back to their local communities by volunteering for and donating to their favorite causes. In 2022, the TEGNA Foundation matched employee donations two-for-one to the nonprofits most meaningful to them. As a result, the Foundation approved more than 2,150 employee matching gifts. Their donations combined with TEGNA Foundation matches totaled more than $2 million. TEGNA supports employee participation in charitable causes, providing 10 hours of paid time off annually for volunteer work in addition to our employee matching gift program.

 

 

Annual Board Performance Evaluation

The Company conducts an annual Board performance evaluation process in which the Board either retains an independent consultant experienced in corporate governance matters to conduct an in-depth study of the Board’s effectiveness and to assist it with the annual performance process or conducts Board and committee self-evaluations using written questionnaires. In addition, our independent Board Chair regularly speaks with other Board members and receives feedback regarding Board and committee practices and management oversight.

For 2022, the Board and each committee performed a confidential assessment of their effectiveness using written questionnaires developed with the assistance of an independent consultant retained by the Nominating and Governance Committee that is experienced in corporate governance matters. The results of the evaluation process were reported to the Board and are being applied to enhance the overall operation and effectiveness of the Board and its committees.

Ethics Policy

The Company has long maintained a code of conduct and ethics (the “Ethics Policy”) that sets forth the Company’s policies and expectations. The Ethics Policy, which applies to every Company director, officer and employee, addresses a number of topics, including conflicts of interest, relationships with others, corporate payments, the appearance of impropriety, disclosure policy, compliance with laws, corporate opportunities and the protection and proper use of the Company’s assets. The Ethics Policy meets the NYSE’s requirements for a code of business conduct and ethics as well as the SEC’s definition of a code of ethics applicable to the Company’s senior officers. Neither the Board of Directors nor any Board committee has ever granted a waiver of the Ethics Policy.

The Ethics Policy is available on the Corporate Governance page of the Company’s website at www.tegna.com under the “Investors” menu. You may also obtain a copy of the Ethics Policy without charge by writing to: TEGNA Inc., 8350 Broad Street, Suite 2000, Tysons, Virginia 22102, Attn: Secretary. Any additions or amendments to the Ethics Policy, and any waivers of the Ethics Policy for executive officers or directors, will be posted on the Corporate Governance page under the “Investors” menu of the Company’s website and similarly provided to you without charge upon written request to this address.

The Company has a telephone hotline staffed by an independent third party for employees and others to submit their concerns regarding violations or suspected violations of the Company’s Ethics Policy or violations of law and for reporting any concerns regarding accounting or auditing matters on a confidential anonymous basis. Employees and others can report concerns by

 

 

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LOGO    Proposal 1—Election of Directors: Report of the Audit Committee

 

 

calling 1-800-695-1704 or by emailing or writing to the addresses provided in the Company’s Whistleblower Protection & Ethics Violations Reporting Policy found on the Corporate Governance page of the Company’s website at www.tegna.com under the “Investors” menu. Any concerns regarding accounting or auditing matters so reported will be communicated to the Company’s Audit Committee.

Related Transactions; Compensation Committee Interlocks and Insider Participation

Our Company has not had compensation committee interlocks with any other company, nor has our Company engaged in any material related transactions since January 1, 2022, the first day of our last fiscal year. Although no such related transactions have occurred or are anticipated, the Board has adopted a related person transaction policy that outlines the procedures that the Board will follow in connection with reviewing any future transactions involving the Company and related persons. The policy takes into account the categories of transactions that the Board has determined are not material in making determinations regarding independence and requires directors and executive officers to notify the Company’s general counsel of any potential related person transactions.

Report of the Audit Committee

During fiscal years 2021 and 2022, the Company’s independent registered public accounting firm, PricewaterhouseCoopers LLP (“PwC”), billed the Company the following fees and expenses:

 

    

2021

   

2022

 

Audit Fees (1)

 

$

2,247,242

 

 

$

2,543,463

 

Audit-Related Fees (2)

 

$

645,000

 

 

$

305,000

 

Tax Fees (3)

 

$

131,268

 

 

$

132,468

 

All Other Fees (4)

 

$

900

 

 

$

900

 

 

 

 

   

 

 

 

Total

 

$

3,024,410

 

  $ 2,981,831  

 

(1)

Audit Fees include professional services rendered in connection with the annual integrated audit of the Company’s consolidated financial statements, internal control over financial reporting, and the review of quarterly reports on Form 10-Q. In 2022, Audit Fees also include payment to PwC of $59,000 related to Proxy work. All of these fees were pre-approved by the Audit Committee as described below.

(2)

Audit-Related Fees include professional services rendered in connection with the audit of employee benefit plans, due diligence relating to Premion, and merger related technical accounting support. In 2021, the Company paid audit-related fees of $185,000 for review of the Company’s employee benefit plans and $460,000 in connection with due diligence relating to Premion. In 2022, the Company paid audit related fees of $185,000 for review of the Company’s employee benefit plans and $120,000 related to merger related technical accounting support. These services were pre-approved by the Audit Committee as described below.

(3)

Tax Fees principally relate to tax planning services and advice in the U.S. All of these services were pre-approved by the Audit Committee as described below.

(4)

All Other Fees relate to the Company’s use of PwC’s disclosure checklist tool.

The Audit Committee has adopted a policy for the pre-approval of services provided by the Company’s independent registered public accounting firm. Under that policy, particular services or categories of services have been pre-approved, subject to a specific budget. Periodically, but at least annually, the Audit Committee reviews and approves the list of pre-approved services and the maximum threshold cost of performance of each. The Audit Committee is provided with a status update on all services performed by the Company’s independent registered accounting firm periodically throughout the year and discusses such services with management and the independent registered accounting firm. Pursuant to its pre-approval policy, the Audit Committee has delegated pre-approval authority for services provided by the Company’s independent registered accounting firm to its Chair, which is currently Bruce P. Nolop. The chair of the audit committee may pre-approve up to $100,000 in services provided by the independent registered accounting firm, in the aggregate at any one time, without consultation with the full Audit Committee, provided that he or she reports such approved items to the Audit Committee at its next scheduled meeting. In determining whether a service may be provided pursuant to the pre-approval policy, the primary consideration is whether the proposed service would impair the independence of the independent registered public accounting firm.

In connection with its review of the Company’s 2022 audited financial statements, the Audit Committee received from PwC written disclosures and a letter regarding PwC’s independence in accordance with applicable requirements of the Public

 

 

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Company Accounting Oversight Board (PCAOB), including a detailed statement of any relationships between PwC and the Company that might bear on PwC’s independence, and has discussed with PwC its independence. The Audit Committee considered whether the provision of non-audit services by PwC is compatible with maintaining PwC’s independence. PwC stated that it believes it is in full compliance with all of the independence standards established by the various regulatory bodies. The Audit Committee also discussed with PwC various matters required to be discussed by the applicable requirements of the PCAOB and the SEC.

The Audit Committee met with management, the Company’s internal auditors and representatives of PwC to review and discuss the Company’s audited financial statements for the fiscal year ended December 31, 2022. Based on such review and discussion as well as the Committee’s reviews and discussions with PwC regarding the various matters mentioned in the preceding paragraph, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Company’s Form 10-K for the 2022 fiscal year. The Board approved that recommendation.

Audit Committee

Bruce P. Nolop, Chair

Stuart J. Epstein

Lidia Fonseca

Karen H. Grimes

Scott K. McCune

 

 

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Proposal 2—Ratification of Appointment of Independent Registered Public Accounting Firm

(Proposal 2 on the proxy card)

The Audit Committee of the Board of Directors is responsible for the appointment, compensation, retention and oversight of the Company’s independent registered public accounting firm.

The Audit Committee has appointed PwC as the Company’s independent registered public accounting firm for the Company’s fiscal year ending December 31, 2023. We believe that the appointment of PwC is in the best interests of the Company and its shareholders. Upon the recommendation of the Audit Committee, the Board of Directors is submitting the appointment of PwC as the Company’s independent registered public accounting firm for shareholder ratification at the 2023 Annual Meeting.

 

The Company’s Board of Directors unanimously recommends that you vote “FOR” the ratification of the appointment of PwC as the Company’s independent registered public accounting firm for the current year.

 

Our By-laws do not require that the shareholders ratify the appointment of PwC as our independent registered public accounting firm. We are seeking ratification because we value our shareholders’ views on the Company’s independent registered accounting firm and believe it is a good corporate governance practice. If the shareholders do not ratify the appointment, the Audit Committee will reconsider whether to retain PwC, but in its discretion may choose to retain PwC as the Company’s independent registered public accounting firm. Even if the appointment is ratified, the Audit Committee in its discretion may change the appointment at any time during the year if it determines that a change would be in the best interests of the Company and its shareholders.

A representative of PwC is expected to attend the 2023 Annual Meeting. The representative will have an opportunity to make a statement if he or she desires to do so and will be available to respond to appropriate questions from shareholders.

 

 

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Executive Compensation

Compensation Discussion and Analysis

The Leadership Development and Compensation Committee of the Board of Directors (the “Committee”) believes that the 2022 compensation of our Named Executive Officers appropriately reflects and rewards their significant contributions to the Company’s strong performance in a year that included a number of extraordinary events, including the announcement that the Company had entered into a merger agreement with certain affiliates of Standard General L.P. on February 22, 2022 (“Merger Agreement”), and a challenging macroeconomic environment.

The Committee continuously reviews the structure of our executive compensation program and, based on shareholder feedback over recent years, has endeavored to further strengthen the link between pay and performance and enhanced our disclosure of executive compensation structure and practices. Our 2022 compensation program also was impacted by compensation-related provisions contained in the Merger Agreement.

This Compensation Discussion and Analysis (CD&A) explains the guiding principles and practices upon which our executive compensation program is based and the 2022 compensation paid to our Named Executive Officers (also referred to as “NEOs”), who for the 2022 fiscal year were:

 

 

 

    David T. Lougee, President and Chief Executive Officer,

 

    Victoria D. Harker, Executive Vice President and Chief Financial Officer,
    Lynn Beall (Trelstad)1, Executive Vice President and Chief Operating Officer—Media Operations, and

 

    Akin S. Harrison2, Senior Vice President and General Counsel.
 

 

 

1 

“Beall” is Ms. Trelstad’s maiden name and the name she uses for business purposes. “Trelstad” is her married and legal name.

2

On June 5, 2023, Mr. Harrison notified the Company that he would be resigning from the Company, effective June 30, 2023.

 

 

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Executive Summary

PERFORMANCE HIGHLIGHTS

Highlights of the Company’s 2022 performance included:

Record total revenues. Total company revenue was a record $3.3 billion, up ten percent year-over-year and up 12% on a two-year basis.

Record subscription revenue. The company achieved record subscription revenue of $1.5 billion, which was up four percent year-over-year.

Political revenue. The company generated $341 million in political revenue, a record for a non-presidential election year.

GAAP net income. The company’s GAAP net income was a record $631 million.

Record Adjusted EBITDA. Company Adjusted EBITDA was a record $1.1 billion* (representing net income attributable to TEGNA before net income attributable to redeemable noncontrolling interest, income taxes, interest expense, equity (loss), other non-operating items, special items, depreciation and amortization), which was an increase of 19% compared to 2021 and was driven by high-margin political and subscription revenues, as well as ongoing cost management to ensure efficient operations. This result was also up 11% on a two-year basis.

* Reconciliation of Adjusted EBITDA, a non-GAAP financial measure, to the Company’s results as reported under accounting principles generally accepted in the United States may be found in the Company’s Form 10-K, filed February 27, 2023: adjusted EBITDA – page 32.

PAY FOR PERFORMANCE

The Committee supports compensation policies that place a heavy emphasis on pay for performance. Our NEOs receive a majority of their long-term equity awards as performance shares that may be earned, if at all, based on the Company’s achievement of performance goals established by the Committee, which we believe strengthens the pay for performance aspect of the Company’s long-term incentive program, and the compensation program overall. The percentage of NEO annual equity awards granted on February 28, 2022 (based on grant date value) that were performance-based were 70% for our CEO (with the remaining 30% being time-based restricted stock units (RSUs)) and 55% for each of the other NEOs (with the remaining 45% being time-based RSUs).

 

 

A MAJORITY OF OUR CEO’S 2022 TARGET PAY WAS PERFORMANCE-BASED

 

 

 

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LEADERSHIP DEVELOPMENT AND COMPENSATION COMMITTEE RESPONSIBILITIES

The Committee oversees the Company’s executive compensation program and is responsible for:

 

  Evaluating and approving the Company’s executive compensation plans, principles and programs, as well as overseeing the compensation program for non-employee directors;

 

  Administering the Company’s equity incentive plans and granting bonuses and equity awards to our senior executives;

 

  Reviewing and approving on an annual basis corporate goals and objectives relevant to the compensation of the Company’s President and CEO and its other senior executives; and

 

  Reviewing risks relating to the Company’s executive compensation plans, principles and programs.
 

 

The Committee also regularly reviews other components of executive compensation, including benefits, perquisites and post-termination pay. The Board has historically delegated to the Company’s President and CEO the authority for approving equity grants to employees other than our senior executives within the parameters of a pool of shares approved by the Board.

GUIDING PRINCIPLES

In making its NEO compensation decisions, the Committee is guided by the following principles:

 

  Pay for performance—Compensation should place a heavy emphasis on pay for performance and substantial portions of total compensation should be “at risk.”

 

  Attract, retain and motivate—Compensation should help us attract and retain superior executive talent and motivate key employees to ensure our overall success and long-term strength.

 

  Fairness and Shareholder Alignment—Compensation should be fair to both executives and shareholders and should align the interests of our executives with those of our shareholders.

 

  Pay competitively—Compensation opportunities generally should be in line with those afforded to executives holding similar positions at comparable companies, although we expect variability based on role and incumbent-specific circumstances.

 

  Promote stock ownership—Compensation in the form of equity grants should allow our executives to acquire and maintain a meaningful level of investment in Company common stock consistent with our stock ownership guidelines. This helps to align the economic
   

interests of our executives with those of our shareholders. The Committee regularly reviews the levels of senior executive stock ownership.

The following table reflects the minimum stock ownership guideline for each NEO. As of the date of this Proxy Statement, all of the NEOs significantly exceed their minimum ownership guideline.

 

NAME  

 

MINIMUM

GUIDELINE

MULTIPLE

OF BASE

SALARY

 

MR. LOUGEE

 

 

5X      

 

MS. HARKER

 

 

3X      

 

MS. BEALL

 

 

2X      

 

MR. HARRISON

 

 

1X      

 

The Company’s stock ownership guidelines require that executives hold all after-tax shares they receive from the Company as compensation until they have met the stock ownership guidelines detailed above.

 

 

 

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COMPENSATION-RELATED GOVERNANCE PRACTICES

The Board’s commitment to strong corporate governance practices extends to the compensation plans, principles, programs and policies established by the Committee. The Company’s compensation-related governance practices and policies of note include the following:

 

Performance-based pay. A significant percentage of the compensation we provide to our NEOs is performance-based.

 

Outcome alignment. Each year we review the Company’s compensation and financial performance against internal budgets, financial results from prior years and Comparative Market Data to make sure that executive compensation outcomes are aligned with the absolute and relative performance of the Company.

 

Cap on incentive payouts. We cap the maximum payout under the annual bonus plan and performance share awards at 200% of target.

 

Double-trigger equity vesting upon a change in control. We accelerate the vesting of equity awards in connection with a change in control only upon a double trigger (i.e., upon an executive’s qualifying termination of employment within two years following the date of the change in control) unless the awards are not continued or assumed, in which case the awards immediately vest.

 

Clawback. We have a recoupment policy which provides:

 

    That fraud or intentional misconduct by any employee that results in an accounting restatement due to material non-compliance with the securities laws would trigger a recoupment of certain incentive compensation from the responsible employee, as determined by the Committee; and

 

    That the Committee may recoup up to three years of an employee’s incentive compensation if that employee’s gross negligence or intentional misconduct caused the Company material harm (financial, competitive, reputational or otherwise).

No unearned dividends. We do not pay dividends or dividend equivalents on unearned performance shares or unpaid restricted stock unit awards granted to employees.

 

All new change-in-control arrangements are double trigger without excise tax gross-ups. Severance for executives who became eligible to participate in a change in control severance plan after April 15, 2010, is double trigger and those executives are not eligible for an excise tax gross-up.

 

Risk evaluation. We regularly evaluate the risks associated with the Company’s compensation plans and programs and consider the potential relationship between compensation and risk taking.

 

Anti-hedging. We maintain a policy that prohibits the Company’s employees and directors from hedging or short-selling the Company’s shares.

 

Anti-pledging. We prohibit the Company’s executive officers and directors from pledging the Company’s shares.

 

Multi-dimensional performance assessment. Under both the Company’s annual bonus plan and the performance share component of annual equity grants, we assess NEO performance against a number of metrics covering the income and cash-flow statements and quantitative and qualitative KPIs tailored for each executive.

 

No excessive perquisites. We do not provide significant perquisites to our named executive officers.

 

 

SAY ON PAY

The Committee reviews and thoughtfully considers the results of Say on Pay votes when evaluating our executive compensation program. Ninety six and one half percent (96.5%) of our shareholders supported our executive compensation program at the Company’s 2022 annual meeting of shareholders, which reflected an overwhelmingly positive level of support for our executive compensation. As a result, we did not make any specific changes to our executive compensation programs as a result of this vote. Additionally, it is typically our practice to actively engage our shareholders throughout the year to garner feedback, including with respect to our executive compensation programs and policies, but in 2022 our engagement with shareholders was limited due to the pendency of the transactions contemplated by the Merger Agreement.

 

 

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Overview of Executive Compensation Program

Key Components of Annual Compensation Decisions

The table below describes key components of the Company’s 2022 executive compensation program, which generally remained unchanged from 2021.

 

     Component   Description  

Performance

Considerations

  Pay Objective
  LOGO  

 

BASE SALARY

 

 

Pay for service in executive role.

 

 

Based on the nature and responsibility of the position, achievement of key performance indicators, internal pay equity among positions and competitive market data.

 

 

Attraction and retention. Base salary adjustments also allow the Committee to reflect an individual’s performance, scope of the position, and/or changed responsibilities.

 

 

ANNUAL BONUS

 

 

Short-term program providing NEOs with an annual cash bonus payment.

 

 

Based on the Committee’s assessment of each NEO’s achievement of annual key performance indicators as well as contributions to Company-wide performance, as well as, for 2022, treatment contemplated by the Merger Agreement.

 

 

Reward performance in attaining Company and individual performance goals based on the Company’s financial and strategic goals on an annual basis.

 

  LOGO

 

 

PERFORMANCE
SHARES

 

 

Long-term equity grants that vest based on the Company’s Adjusted EBITDA and Free Cash Flow as a Percentage of Revenue performance over a two-year period compared to preset targets set by the Committee.

 

 

Based on the measurement of the Company’s performance against two important financial metrics on which the Company focuses from a strategic growth perspective. The value of awards is also tied to the Company’s share price performance during the three-year vesting period.

 

 

Reward longer-term performance in attaining Company performance goals, which in turn drives shareholder value creation; align the interests of executives with those of shareholders; and promote retention and foster stock ownership.

  RESTRICTED
STOCK UNITS
(RSUs)
 

 

Long-term equity grants that generally vest over four years on a pro rata basis.

 

 

Alignment with shareholders through Company share price performance and the creation of shareholder value.

 

 

Align the interests of executives with those of shareholders, promote retention and foster stock ownership.

How the Committee Determines NEO Compensation

The Committee determines NEO compensation in its sole discretion based on its business judgment, informed by the experience of the Committee members, input from Meridian (the Committee’s independent compensation consultant), market data, the Committee’s and the CEO’s assessment of each NEO, achievement of key performance indicators, the Company’s performance and progress towards achievement of its strategic plan and the challenges confronting our business. No NEO participates in the determination of his or her own compensation.

The Committee does not focus on any one particular objective, formula or financial metric, but rather on performance relative to what it considers to be value-added quantitative and qualitative goals in furtherance of our compensation guiding principles described in the Executive Summary of this Compensation Discussion and Analysis.

 

 

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Key Performance Indicators

The Committee assesses the degree and extent of achievement of key performance indicators (KPIs) as a principal tool for making NEO compensation decisions. KPIs, set annually for each of our executive officers, consist of individually designed qualitative and quantitative goals organized in three areas:

 

 

Profit and Revenue Goals, which include, as appropriate, revenue, adjusted EBITDA, operating income, free cash flow, digital revenue and other financial goals for the Company and the respective businesses and/or functions over which each NEO has operational or overall responsibility;

 

 

Strategic and Business Goals, which include specific areas in which the NEO is asked to innovate and collaborate to adopt and implement new products and programs in support of the Company’s strategic plan; and

 

 

People Goals, which include measures of leadership, achievement of diversity initiatives, First Amendment activities, and other significant qualitative objectives such as promoting an ethical Company work environment and diverse workforce and maintaining our reputation as a good corporate citizen of the communities in which we do business.

Each NEO’s KPIs include multiple goals in each of the three areas. The KPIs are intended to be challenging but realistic, with a high degree of difficulty in achieving all of the goals set for each NEO. Except for the CEO, whose performance scorecard has been enhanced with specific weightings in response to shareholder feedback, the Committee’s assessment of NEO performance versus KPIs is holistic, with no particular weighting ascribed to achievement of any particular item in any area. This allows for the Committee to assess each of our other NEOs’ performance against the goals and metrics that are most pertinent to the area of focus for each NEO and most appropriately measure his or her performance, with the ultimate goal of aligning pay and performance for each NEO. While the Committee takes into consideration the degree of achievement of each NEO’s KPIs and the Company performance goals and financial measures set forth above in making compensation decisions, the Committee exercises its business judgment, in its sole discretion, to set NEO compensation.

Comparative Market Data

 

 

To assist the Committee in making decisions affecting NEO compensation opportunities, the Committee, with support from Meridian, its independent advisor, reviewed a report from Company management providing, among other things, executive compensation market data. The report included data from the Willis Towers Watson Media Compensation Survey, the Willis Towers Watson General Industry Executive Compensation Survey, the Croner Digital Content and Technology Survey, the Equilar Media & Technology Survey, and the Radford Global Compensation Survey, a source of detailed executive compensation information (collectively, “Comparative Market Data”).

 

 

Through use of this data, the Committee compares NEO salaries, bonus opportunities and equity compensation opportunities to those of companies in the media sector and other companies with comparable revenues to confirm that the elements of our compensation program and the compensation opportunities we afford our executives are appropriately competitive. The Committee does not, however, target elements of compensation nor total compensation to a certain range, percentage or percentile within the Comparative Market Data.

BASE SALARY

We pay our NEOs base salaries to compensate them for service in their executive role. Salaries for NEOs take into account:

 

 

the nature and responsibility of the position;

 

 

the achievement of KPIs, both historically and in the immediately prior year;

 

 

internal pay equity among positions; and

 

 

Comparative Market Data as described above.

 

 

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The table below shows the 2022 NEO base salaries set by the Committee based on the foregoing factors:

 

EXECUTIVE

2022 BASE SALARY

Mr. Lougee

  $975,000

Ms. Harker

  $730,000

Ms. Beall

  $650,000

Mr. Harrison

  $500,000

ANNUAL BONUSES

ANNUAL BONUS OPPORTUNITY

Our NEOs participate in an annual bonus program designed to reward each NEO’s contribution to overall Company results and attainment of strategic business objectives during the year. Annual bonuses therefore can vary in amount from year to year.

Beginning in late 2021 and continuing into early 2022, the Committee, in consultation with Meridian, its independent compensation consultant, determined the target bonus opportunities for each NEO. The Committee established these amounts, which are based on a target percentage of each NEO’s base salary, after thorough consideration of:

 

 

the nature and responsibility of the position;

 

 

internal pay equity among positions; and

 

 

Comparative Market Data.

Based on these factors, the Committee approved the following 2022 target bonus opportunities for our NEOs. Only Mr. Lougee’s and Mr. Harrison’s bonus targets were increased from 2021, based on corresponding changes to the target percentage of their respective base salaries:

 

 

EXECUTIVE

BASE
SALARY

TARGET

PERCENTAGE

OF BASE

SALARY

BONUS

GUIDELINE

AMOUNT

 

Mr. Lougee

$ 975,000   130 % $ 1,267,500
 

Ms. Harker

$ 730,000   100 % $ 730,000
 

Ms. Beall

$ 650,000   100 % $ 650,000
 

Mr. Harrison

$ 500,000   85 % $ 425,000

ANNUAL BONUS PAYOUT FOR 2022

The Committee determined the extent to which each NEO earned his or her respective 2022 bonus, informed by attainment of the Company’s annual financial and qualitative performance goals, individual contributions made by the NEO during the year and each NEO’s performance against his or her KPIs.

In addition, the Committee considered the performance of the Company across a broad spectrum of financial measures, including total revenues, operating income, net income, earnings per share, Adjusted EBITDA, EBITDA margins, subscription revenue and free cash flow as a percentage of revenue. The Committee selected these financial measures because, individually and collectively, they represent the most significant financial aspects of our Company that we believe drive our financial success as a pure-play media company and enhance shareholder value.

For 2022, the Committee compared the Company’s reported performance with respect to each of these financial performance measures against goals approved by the Board at the beginning of the year, financial results from prior years, and financial performance of peer companies and the industry, and considered the Company’s achievements of budgeted amounts in light of the bonus treatment contemplated by the terms of the Merger Agreement, which provided that employee bonuses for 2022 would be paid at the greater of (i) the employee’s bonus entitlement based on the actual level of achievement of the applicable performance goals for 2022 and (ii) the employee’s bonus entitlement assuming achievement of target level performance.

 

 

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In addition, the Committee evaluated the performance of our executives, the roles played by each of them in contributing to the Company’s progress in creating shareholder value, achieving critically important strategic initiatives and the performance highlights described in the “Executive Summary” above. Other factors considered by the Committee for the 2022 bonus awarded to each NEO are described below.

 

 

David T. Lougee, President and Chief Executive Officer

 

2022 Goals:

 

The Committee evaluated Mr. Lougee’s 2022 performance using a scorecard that measures Mr. Lougee’s results against financial and non-financial KPIs, with the financial and non-financial KPIs each assigned an overall 50% weighting by the Committee. Mr. Lougee’s financial KPIs included EBITDA and revenue targets, with the EBITDA target weighted at 35% and the revenue target weighted at 15%.

 

Mr. Lougee’s non-financial goals included strategic goals relating to driving long-term growth for the Company (taking into account anticipated market forces and dynamics), the Company’s 2022 business priorities (key business initiatives critical to the Company during 2022), and the Company’s 2022 people goals (building the organization with capabilities and a culture for the future, including diversity and inclusion goals). These non-financial goals were weighted as follows: strategic (25%), business priorities (15%) and people (10%). The Committee also assessed Mr. Lougee’s performance in the context of the core CEO responsibility to serve as the Company’s chief spokesperson and effectively communicate with all of the Company’s stakeholders, including its shareholders, employees, customers, Board of Directors and community and industry groups.

 

 

2022 Performance Highlights and Accomplishment of 2022 Goals:

 

During 2022, Mr. Lougee led the Company to record full-year revenue and EBITDA, drove the successful negotiation of the Merger Agreement, successfully negotiated retransmission agreements with certain of the Company’s largest distributors, oversaw record revenue for Premion, and continued to strengthen the Company’s commitment to diversity, equity and inclusion. Mr. Lougee’s annual bonus for 2022 reflected these accomplishments as well as the Committee’s assessment of the performance of his duties and his achievement of the following KPIs:

 

   
Financial KPIs   

•  Achieved full year Company Adjusted EBITDA of $1.1 billion,* which was below his EBITDA KPI, partially driven by weaker political and macroeconomic forces impacting subscribers and advertising revenue.

 

•  Achieved record full-year revenue of $3.3 billion, up ten percent year-over-year but short of his revenue KPI due in part to AMS revenue declines as a result of political displacement and macroeconomic headwinds.

   
Non-financial KPIs: Strategic and Business   

•  Successfully led negotiations that culminated in entering into the Merger Agreement.

 

•  Successfully led the Company’s negotiations of comprehensive retransmission consent agreements representing approximately 38% of the Company’s subscribers.

 

•  Oversaw record revenue for Premion despite macroeconomic challenges.

 

•  Continued to execute on the Company’s expense savings plan.

   
Non-financial KPIs: People   

•  Oversaw the Company’s progress on its 2025 diversity, equity and inclusion goals, for which the Company remains on track to achieve on schedule, including increasing the ethnic and gender diversity of the Company’s station general managers.

 

•  Enhanced support of Company leaders in the selection of diverse talent and the navigation of complex employee matters regarding race and inclusion.

 

•  Expanded the Company’s initiatives to identify and develop its internal talent, including expanding the Producer-in-Residence program and implementing a new Sales-in-Residence program.

 

*

Reconciliation of Adjusted EBITDA, a non-GAAP financial measure to the Company’s results as reported under accounting principles generally accepted in the United States may be found in the Company’s Form 10-K, filed February 27, 2023: adjusted EBITDA – page 32.

 

 

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Victoria D. Harker, Executive Vice President and Chief Financial Officer

 

 

2022 Goals:

 

The Committee evaluated Ms. Harker’s 2022 performance using financial and non-financial KPIs it developed in consultation with Mr. Lougee. Ms. Harker’s financial KPIs included, among other things, Adjusted EBITDA and revenue targets, and expense management.

 

 

2022 Performance Highlights and Key Accomplishments:

 

Ms. Harker delivered a strong performance in 2022 during which she and her finance team supported achievement of the Company’s strong financial performance, provided critical support relating to the transactions contemplated by the Merger Agreement, continued to actively manage and implement expense reductions, supported the successful negotiation of retransmission agreements and network affiliation agreements, managed the Company’s short term cash investments and provided ongoing oversight over the Company’s 401K and pension plans. Her annual bonus for 2022 reflected the Committee’s assessment of her and the Company’s performance, including her achievement of the following KPIs:

 

   
Financial KPIs   

•  Achieved the Company’s full year record Adjusted EBITDA of $1.1 billion,* which fell short of her EBITDA KPI, partially driven by weaker political and macroeconomic forces impacting subscribers and advertising revenue.

 

•  Supported achievement of record Company revenue of $3.3 billion, which was below budget, due in part to AMS revenue declines as a result of political displacement and macroeconomic headwinds.

   
Non-financial
KPIs: Strategic and Business Goals
  

•  Supported the negotiation of the Merger Agreement.

 

•  Pivoted from annual budget process to a more refined quarter-ahead forecast process driven by macro-economic volatility.

 

•  Successfully completed the relocation of the entire Finance shared service organization, driving space and cost savings and allowing the Company to right-size the shared services functions.

 

•  Provided critical financial reporting, analysis and transaction processing operations in a manner that allowed the Company to recognize substantial savings in external audit fees.

   
Non-financial KPIs: People Goals   

•  In collaboration with Mr. Lougee and the Company’s chief human resources officer, continued to develop and execute against a succession and development plan for her successor.

 

*

Reconciliation of Adjusted EBITDA, a non-GAAP financial measure to the Company’s results as reported under accounting principles generally accepted in the United States may be found in the Company’s Form 10-K, filed February 27, 2023: adjusted EBITDA – page 32.

 

 

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LOGO    Executive Compensation: How the Committee Determines NEO Compensation

 

 

 

Lynn Beall, Executive Vice President and Chief Operating Officer – Media Operations

 

 

2022 Goals:

 

The Committee evaluated Ms. Beall’s 2022 performance using financial and non-financial KPIs it developed in consultation with Mr. Lougee. Ms. Beall’s financial KPIs included, among other things, goals relating to subscription and advertising and marketing services revenue.

 

Ms. Beall’s non-financial goals included, without limitation, audience growth, content transformation, content leadership development, and retransmission and network affiliation agreement negotiations and people goals relating to talent and culture, racial and gender diversity and succession planning

 

 

2022 Performance Highlights and Key Accomplishments:

 

In 2022, while overseeing one of the most geographically diverse broadcast groups in the United States, Ms. Beall led the Company’s media operations through another historic news cycle that included unprecedented news events, extreme weather and political activity. Despite these and other challenges, the Company’s media operation realized strong results across the board under her leadership, driven by a strategic plan that focused on people, content and sales. Ms. Beall’s annual bonus for 2022 reflected the Committee’s assessment of her and the Company’s performance, including her achievement of the following KPIs:

 

   
Financial KPIs    Drove the Company’s record Media Operations revenue, subscription revenue, net income and EBITDA, but fell below expectations and internal budget mostly due to economic headwinds beginning in the second quarter of 2022 and continuing through the end of the year.
   
Non-financial
KPIs: Strategic and Business Goals
  

•  Successfully led the Company’s negotiations of comprehensive retransmission consent agreements representing approximately 38% of the Company’s subscribers.

 

•  Led successful renegotiation of a multi-year CBS affiliation agreement.

 

•  Oversaw growth of the Company’s original programming and multicast businesses, including signing several foundational distribution deals for the Company’s multicast programming networks and improving the year-over-year performance of the Company’s Daily Blast Live program.

 

•  Achieved strong audience gains for the Company’s VERIFY brand, and launched new digital streaming applications for the Company’s stations on the Roku and Fire TV platforms.

 

•  Oversaw the Company’s news operations which continued to be awarded and celebrated for quality journalism, receiving six national Edward R. Murrow awards, two Dupont awards, and a prestigious local news Peabody award.

   
Non-financial KPIs: People Goals   

•  Launched the Company’s manager training program, providing leadership training to almost 100 of the Company’s managers in 2022.

 

•  Through her succession planning and development efforts, oversaw the hiring of four new station general managers, three of whom were diverse.

 

•  Supported newsroom diversity initiatives through continued investment in the Company’s inclusive journalism program for all new journalists, and the selection of 25 high-performing managers for participation in a Poynter Institute’s leadership program focused on DE&I.

 

•  Remained on track to achieve the 2025 diversity, equity and inclusion goals relating to the Company’s content leadership and content teams, including hiring three diverse station general managers.

 

 

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Akin S. Harrison, Senior Vice President and General Counsel

 

 

2022 Goals:

 

The Committee evaluated Mr. Harrison’s 2022 performance using financial and non-financial KPIs it developed in consultation with Mr. Lougee. Mr. Harrison’s financial KPIs included managing the law department’s budget and total Company outside legal fees.

 

Mr. Harrison’s non-financial goals included providing legal counsel and leadership in support of the Company’s purpose, strategic transactions, negotiations and compliance efforts, ethics standards and initiatives, and people goals relating to diversity and inclusion and leadership development.

 

 

2022 Performance Highlights and Key Accomplishments:

 

In 2022, Mr. Harrison continued to effectively manage the law department and he and his team successfully managed a wide variety of legal matters for the Company, including matters pertaining to the Merger Agreement, FCC compliance, commercial contracts, litigation, and antitrust and First Amendment matters. Mr. Harrison’s annual bonus for 2022 reflected the Committee’s assessment of his and the Company’s performance, including his achievement of the following KPIs:

 

   
Financial KPIs    Continued to successfully manage the legal department’s budget and total Company outside legal fees.
   
Non-financial KPIs: Strategic and Business Goals   

•  Provided legal counsel and coordinated with outside counsel and the Company’s advisor team in connection with the Company’s efforts to obtain approval of the Merger Agreement.

 

•  Supported the Company’s negotiations of comprehensive retransmission consent agreements representing approximately 38% of the Company’s subscribers.

 

•  Advised on the long-term renewal of the Company’s network affiliation agreements with two of its major network partners.

 

•  Oversaw the Company’s legal compliance program.

   
Non-financial KPIs: People Goals   

•  Continued to take steps to develop the members of the legal department.

 

•  Continued to support company-wide diversity and inclusion initiatives.

In determining the annual bonus payouts for each NEO, the Committee considered the strong individual and Company performance referenced above. Based on its comprehensive review of these considerations, and consistent with the terms of the Merger Agreement, the Committee determined to pay each NEO’s 2022 annual bonus at target, as follows:

 

  EXECUTIVE

 

BONUS

 

Mr. Lougee

 

$

1,267,500

 

Ms. Harker

 

$

730,000

 

Ms. Beall

 

$

650,000

 

Mr. Harrison

 

$

425,000

 

LONG-TERM INCENTIVES

The Company’s long-term incentive program (the “LTI Program”) consists of awards of Performance Shares and Restricted Stock Units. The Performance Shares are based on the Company’s adjusted EBITDA and Free Cash Flow metrics, which the Committee views as critical to measuring our success in creating value for shareholders.

 

 

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The Committee uses a two-year performance cycle for the Performance Shares in order to address the significant cyclical revenue increase the Company experiences in even-numbered years due to political spending during mid-term and presidential election years as a result of the Company’s strong political footprint.

 

 

LOGO

Under the Performance Share program, grants are made, and a new two-year performance cycle begins, each year. At the end of each two-year performance cycle, the number of shares of Company common stock earned will be determined based upon the Company’s level of achievement versus the aggregate financial performance target or targets set by the Committee for that cycle. Any earned shares of Company common stock will not be distributed to executives until after the completion of the three-year service period. If the Company fails to meet threshold performance against a financial performance metric at the end of any performance cycle, no Performance Shares will be earned and no payout of shares of Company common stock will be made with respect to that financial performance metric.

Long-Term Equity Awards under the 2022 LTI Program

For the March 1, 2022 grants, the Committee determined total long-term equity award target values for each NEO taking into account the following factors:

 

 

recommendation of Mr. Lougee and the Senior Vice President and Chief Human Resources Officer (other than for Mr. Lougee);

 

 

the nature and responsibility of the NEO’s position;

 

 

internal pay equity among positions;

 

 

Comparative Market Data;

 

 

individual performance against KPIs;

 

 

the financial performance of the Company and the operations for which the NEO is responsible; and

 

 

the Company’s progress towards the goals of its strategic plan.

Based on the foregoing factors, the Committee approved 2022 total long-term equity award target values for each of our NEOs, which are shown in the table below.

 

 

EXECUTIVE

2022

BASE SALARY

LONG TERM-

AWARD TARGET

PERCENTAGE

TOTAL LONG-

TERM AWARD

TARGET VALUE

 

Mr. Lougee

  $975,000   500%     $4,875,000
 

Ms. Harker

  $730,000   250%     $1,825,000
 

Ms. Beall

  $650,000   200%     $1,300,000
 

Mr. Harrison

  $500,000   200%     $1,000,000

 

 

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On March 1, 2022, the long-term equity award target value for each NEO was translated into a target award of Performance Shares and an award of RSUs based upon the Company’s closing stock price on February 28, 2022 (taking into account that dividends would not be paid on the Performance Shares or RSUs during the respective vesting periods), as follows:

 

 

EXECUTIVE

     PERFORMANCE     

     SHARES     

     (TARGET #)     

     RSUs     
 

Mr. Lougee

       156,465             66,508     
 

Ms. Harker

       46,022             37,347     
 

Ms. Beall

       32,783             26,603     
 

Mr. Harrison

       25,218             20,464     

2022 Performance Share Awards

The 2022 Performance Share grants are subject to achievement against the following Committee-approved performance metrics measured over the applicable performance cycle:

 

Performance Metric    Weighting(1)    Description
Adjusted EBITDA    2/3    Compares, in percentage form, (1) the sum of the actual Adjusted EBITDA generated by the Company in each of the two applicable fiscal years, to (2) the sum of the target budgeted amounts of Adjusted EBITDA set by the Committee in connection with its annual budget review process for such fiscal years.
Free Cash Flow as a Percentage
of Revenue
   1/3    Compares, in percentage form, (1) the aggregate amount of Free Cash Flow generated by the Company in the two applicable fiscal years measured as a percentage of the aggregate total Company revenues generated by the Company in such fiscal years, to (2) the weighted average of the targeted level of Free Cash Flow as a percentage of total Company revenues set by the Committee in connection with its annual budget review process for such fiscal years.

 

(1)

The Performance Shares place a higher weighting on Adjusted EBITDA given the importance of meeting our profitability expectations.

For purposes of the 2022 Performance Share grants:

 

 

“Adjusted EBITDA” means net income from continuing operations before (1) interest expense, (2) income taxes, (3) equity income (losses) in unconsolidated investments, net, (4) other non-operating items, (5) severance expense, (6) facility consolidation charges, (7) impairment charges, (8) depreciation, (9) amortization, and (10) expense related to performance share long-term incentive awards. Net income from continuing operations may be further adjusted to exclude unusual or non-recurring charges or credits to the extent and in the amount such items are separately reported or discussed in the financial statements and notes thereto or in management’s discussion and analysis of the financial statements in a periodic report filed by the Company under the Exchange Act.

 

 

“Free Cash Flow” means “net cash flow from operating activities” less “purchase of property and equipment”, each as reported in the Company’s consolidated statements of cash flows, and adjusted to exclude (1) voluntary pension contributions, (2) capital expenditures required either by government regulators or due to natural disasters offset by any reimbursements of such expenditures (e.g., from the U.S. government or an insurance company), and (3) the same adjustments made to Adjusted EBITDA, other than income taxes and interest to the extent of their impact on Free Cash Flow. When calculating Free Cash Flow in respect of the 2022 Performance Shares, actual changes in working capital for the year will be disregarded to the extent they are greater than or less than the $20 million collar specified by the Committee from the target change in working capital. The “collar” limits the effect of volatility in working capital that can impact the Company’s Free Cash Flow.

The Committee reserves the right to modify the calculations to adjust for impacts it deems appropriate.

 

 

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The following table illustrates the ranges of potential payouts based on threshold, target and maximum performance levels for each financial performance metric adopted by the Committee for the applicable performance cycle:

 

 
 

 

Actual versus Target Applicable Payout Percentage*
 

Below Threshold (80%)

<80% 0
 

Threshold

80% 65%
 

Target

100% 100%
 

Maximum

110% 200%
 

Above Maximum

>110% 200%

 

*

The Applicable Payout Percentage is calculated using straight line interpolation for points between Threshold and Target and for points between Target and Maximum.

The Company does not publicly disclose its expectations of how it will perform on a prospective basis in future periods or specific long-term incentive plan targets applicable under its compensation programs due to potential competitive harm. The target performance goals for Adjusted EBITDA and Free Cash Flow for each two-year performance cycle are designed to be appropriately challenging based on internal forecasts and the Company’s historical results, and there is a risk that payments will not be made at all or will be made at less than 100% of the target amount.

With certain exceptions for terminations due to death, disability, retirement (defined as 65 years of age or at least 55 years of age with at least five years of service) or a change in control of the Company, “earned” Performance Shares generally vest on the expiration of the three-year vesting service period (the Incentive Period) only if the executive continues to be employed by the Company through the last day of the vesting service period.

Following the end of the vesting service period, each executive who has earned Performance Shares will receive the number of shares of Company common stock earned for the performance cycle, less withholding taxes. Dividends are not paid or accrued on Performance Shares.

The vesting of the Performance Share grants will not accelerate in connection with a change in control unless the executive has a qualifying termination of employment within two years following the date of the change in control or the grants are not continued or assumed (e.g., the grants are not equitably converted or substituted for awards of the successor company) following the change in control. In the event a change in control occurs prior to the expiration of the applicable performance period, the executive will receive (if the vesting requirements are satisfied) the target number of Performance Shares set forth in the executive award agreement for that Performance Share grant. In the event a change in control occurs after the expiration of the applicable performance period but prior to the expiration of the applicable vesting service period, the executive will receive (if the vesting requirements are satisfied) the number of Performance Shares earned during the applicable performance cycle.

2022 RSU Awards

The RSUs granted to our NEOs in 2022 generally vest ratably over four years. At the time of vesting, the NEO will receive the number of shares of Company common stock equal to the number of RSUs that then vested, less withholding taxes. Executives are also entitled to receive a prorated portion of their RSUs upon retirement, disability or death. The vesting of the RSUs will not accelerate in connection with a change-in-control, unless the executive has a qualifying termination of employment within two years following the date of the change-in-control or the grants are not continued or assumed (e.g., the awards are not equitably converted or substituted for awards of the successor company) in connection with the change-in-control.

Restrictive Covenants in CEO’s 2022 RSU and Performance Share Award Agreements

Mr. Lougee’s 2022 RSU and Performance Share award Agreements include certain noncompete and nonsolicitation covenants. With certain exceptions, the noncompete covenant generally prohibits Mr. Lougee from participating in certain competing local broadcast businesses or media organizations that derive at least 75% of their revenues from local

 

 

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broadcasting through the first anniversary date of his termination of employment. With certain exceptions, the nonsolicitation covenant generally prohibits Mr. Lougee from inducing employees to leave the Company or inducing current or prospective customers from ceasing to do business with the Company through the first anniversary date of his termination of employment.

Results for 2021 Performance Share Awards

In 2021, the NEOs received Performance Share awards with a two-year performance cycle of January 1, 2021 through December 31, 2022, contingent on the Company achieving its two-year Adjusted EBITDA and Free Cash Flow as a Percentage of Revenue performance targets. The performance metric targets established by the Committee were designed to be challenging.

 

Performance Metric Targets for the 2021 Performance Shares

 
 

 

  Adjusted
EBITDA
   

Cash Flow   

as a   
Percentage   
 of Revenue     

 

2021-2022 Total:

  $ 2,255,302,000     19.1%1

 

1 

Based on a Free Cash Flow target of $1,241,920,000 and a Revenue target of $6,496,261,000.

In February 2023, the Committee determined that the 2021-2022 Adjusted EBITDA and Cash Flow as a Percentage of Revenue performance metrics were achieved at $2,113,021,000 and 18.6%, respectively, which resulted in a payout percentage of 91.1% of the target number of 2021 Performance Shares. As a result of the termination of the Merger Agreement, the number of 2021 Performance Shares earned for the 2021-2022 performance period was determined as of May 22, 2023, resulting in each NEO earning the following number of 2021 Performance Shares:

 

Executive

2021

Performance

Shares

Mr. Lougee

160,892

Ms. Harker

  40,337

Ms. Beall

  33,048

Mr. Harrison

  23,987

The earned 2021 Performance Shares remain subject to service vesting requirements; they generally will be paid out shortly after February 29, 2024 to the extent the executive has satisfied the vesting requirements for such awards as of such date.

Benefits and Perquisites

The Company’s NEOs are provided a limited number of personal benefits and perquisites (described in footnote 4 to the Summary Compensation Table). The Committee’s objectives in providing these benefits are to provide insurance protection for our NEOs and their families, to enable the Company to attract and retain superior management talent in a competitive marketplace, to complement other compensation components, and to help minimize distractions from our executives’ attention to important Company initiatives.

The personal benefits and perquisites the Company provides to our NEOs, including medical, life insurance and disability plans, are generally the same as those offered to other similarly situated senior executives. For additional information about these and other post-employment benefits, see the “Other Potential Post-Employment Payments” section of this Proxy Statement.

Post-Termination Pay

The Company sponsors post-termination pay plans which assist the Company in recruiting and retaining employees and in providing leadership stability and long-term commitment.

 

 

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TEGNA Retirement Plan (TRP)

Prior to the spin-off of Gannett in June 2015 (the “Gannett Spin-off”), eligible Company employees generally had earned benefits under the Gannett Retirement Plan (GRP). In connection with the Gannett Spin-off, the Company adopted the TEGNA Retirement Plan (TRP), a tax-qualified defined benefit retirement plan which assumed the GRP pension liabilities relating to Company employees. Accordingly, the TRP generally provides retirement income to certain of the Company’s U.S.-based employees who were employed before their benefits were frozen on August 1, 2008, at which time participants, including each of the NEOs (other than Ms. Harker, who did not participate in the GRP and does not participate in the TRP), ceased to earn additional benefits for compensation or service earned on or after that date. The TRP provides benefits for employees based upon years of credited service, and the highest consecutive five-year average of an employee’s compensation out of the final ten years of credited service, referred to as final average earnings, or FAE. Subject to Internal Revenue Code limits, compensation generally includes a participant’s base salary, performance-based bonuses, and pre-tax contributions to the Company’s benefit plans other than the TEGNA Deferred Compensation Plan (DCP). Until benefits commence, participants’ frozen benefits are periodically adjusted to reflect increases in a specified cost-of-living index (i.e., the consumer price index for all urban consumers published by the U.S. Department of Labor Bureau of Statistics for U.S. all items less food and energy).

Effective January 1, 1998, the Company made a significant change to the GRP for service after that date. Certain employees who were either retirement-eligible or had a significant number of years of service with the Company were “grandfathered” in the plan provisions applicable to them prior to the change (pre-1998 plan provisions). Other employees were transitioned to the post-1997 plan provisions under the GRP.

The pre-1998 plan provisions provide for a benefit that is expressed as a monthly annuity at normal retirement equal to a gross benefit reduced by a portion of the participant’s Social Security benefit. Generally, a participant’s annual gross benefit is calculated by multiplying the participant’s years of credited service by specified percentages (generally 2% for each of a participant’s first 25 years of credited service and 0.7% for years of credited service in excess of 25) and multiplying such amount by the participant’s FAE. Benefits under the pre-1998 plan provisions are paid in the form of monthly annuity payments for the life of the participant and, if applicable, the participant’s designated beneficiary. The pre-1998 plan provisions provide for early retirement subsidies for participants who terminate employment after attaining age 55 and completing five years of service and elect to commence benefits before age 65. Under these provisions, a participant’s gross benefit that would otherwise be paid at age 65 is reduced by 4% for each year the participant retires before age 65. If a participant terminates employment after attaining age 60 with 25 years of service, the participant’s gross benefit that would otherwise be paid at age 65 is reduced by 2.5% for each year the participant retires before age 65.

The post-1997 plan provisions provide for a benefit under a pension equity formula, which generally expresses a participant’s benefit as a current lump sum value based on the sum of annual percentages credited to each participating employee. The percentages increase with years of service, and, in some circumstances, with age. Upon termination or retirement, the total percentages are applied to a participant’s FAE resulting in a lump sum benefit value. The pension equity benefit can be paid as either a lifetime annuity or a lump sum.

As noted above, in connection with the Gannett Spin-off, the TRP assumed the GRP pension liabilities of the NEOs who had accrued a benefit under the GRP. The TRP benefit for each of our participating NEOs is calculated under the post-1997 plan provisions. However, as noted below, the SERP benefit for Ms. Beall is calculated under the pre-1998 plan provisions. Each of the NEOs who participates in the TRP is fully vested in his or her TRP benefit.

In connection with its acquisition of Belo Corp. (Belo), the Company assumed the legacy Belo pension plan (the “Belo Plan”), which was merged into the TRP. Since Mr. Lougee earned a pension benefit while employed by Belo, the total TRP benefit for Mr. Lougee is calculated based on his accruals under both the post-1997 TRP plan provisions and the Belo Plan provisions, in which benefits he is also fully vested. Under the Belo Plan, which was frozen to new benefits as of March 31, 2007, Mr. Lougee will be entitled to monthly annuity payments for his life commencing at age 65 calculated by multiplying his Belo credited service (including any additional service credits provided when the plan was frozen) by his monthly FAE, in each case earned at Belo as of March 31, 2007, and further multiplied by specified percentages (generally 1.1% plus 0.35% for average earnings in excess of covered compensation). If Mr. Lougee were to terminate employment and elect to commence receiving benefits prior to age 65, his benefit that would otherwise be paid at age 65 would be reduced as follows: 3.33% per year for each year of such early retirement prior to age 61 and 6.67% per year for each year of such early retirement between ages 61 and 65.

 

 

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TEGNA Supplemental Retirement Plan (SERP)

The SERP is a nonqualified retirement plan that provides eligible employees with retirement benefits that cannot be provided under the TRP due to the Internal Revenue Code, which limits the compensation that can be recognized under qualified retirement plans and imposes limits on the amount of benefits which can be paid. For some participants, including Ms. Beall, the SERP also provides a benefit equal to the difference between the benefits calculated under the pre-1998 formula, without regard to the IRS-imposed limits on pay and benefits, and the amount they will receive from the TRP under the post-1997 formula. The SERP benefits for Mr. Lougee and Mr. Harrison are calculated under the post-1997 formula without regard to the IRS-imposed limits on pay and benefits. For all SERP participants, the benefit calculated under the applicable SERP formula is reduced by benefits payable from the TRP. Ms. Harker does not participate in the SERP.

In conjunction with the Company’s decision to freeze benefits under the GRP, the Company also decided to make changes to benefits under the SERP. Generally, until December 31, 2017, SERP participants whose SERP benefits were calculated under the pre-1998 formula continued to accrue benefits under the SERP. However, their benefits for credited service after August 1, 2008 were calculated at a rate that is one-third less than the pre-August 1, 2008 rate. Ms. Beall is the only NEO who was affected by this change. Ms. Beall is currently eligible for early retirement under the pre-1998 formula that applies to her under the SERP.

Effective December 31, 2017, SERP participants whose SERP benefits were calculated under the pre-1998 formula had their SERP benefits frozen such that they ceased to earn additional benefits for earnings, credited service, cost of living adjustments or any other factor or reason after that date. Ms. Beall is the only NEO who was affected by this change.

Effective August 1, 2008, SERP participants whose SERP benefits were not calculated under the pre-1998 formula had their SERP benefits frozen such that they ceased to earn additional benefits for compensation or service earned on or after that date. Until benefits commence, such participants’ frozen benefits are periodically adjusted to reflect increases in a specified cost-of-living index (i.e., the consumer price index for all urban consumers published by the U.S. Department of Labor Bureau of Statistics for U.S. all items less food and energy). Mr. Lougee and Mr. Harrison are the only NEOs who were affected by this change.

SERP benefits generally vest if the participant terminates employment after attaining age 55 and completing at least five years of service with the Company, although benefits become fully vested upon a change in control.

SERP benefits are generally paid in the form of a lump sum amount when a participant separates from service or, if later, the date the participant attains age 55, except that payment is accelerated in the event that the Company undergoes a change in control.

Mr. Lougee and Ms. Beall each are fully vested in his or her SERP benefits. Mr. Harrison is not vested in his SERP benefit.

TEGNA 401(k) Savings Plan (401(k) Plan)

Most of the Company’s employees based in the United States are eligible to participate in the TEGNA 401(k) Savings Plan (“401(k) Plan”), which permits eligible participants to make pre-tax contributions and provides for matching and other employer contributions. Since 2018, the matching contribution rate for the 401(k) plan has been 100% of the employee’s elective deferrals up to the first 4% of the employee’s compensation. For purposes of the 401(k) Plan and subject to Internal Revenue Code limits, compensation generally includes a participant’s base salary, performance-based bonuses, and pre-tax contributions to the Company’s benefit plans. Company contributions under the 401(k) Plan are immediately vested when they are made; therefore, as of the date of this Proxy Statement, Company contributions are 100% vested for each of the NEOs.

TEGNA Deferred Compensation Plan (DCP)

Each NEO who participates in the DCP, the Company’s nonqualified deferred compensation plan, may elect to defer all or a portion of his or her compensation under the DCP, provided that the minimum deferral must be $5,000 for each form of compensation (base salary and bonus) for the year of deferral. The amounts deferred by each NEO are vested and will be deemed invested in the fund or funds designated by such NEO from among a number of funds offered under the DCP.

 

 

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The DCP provides for Company contributions on behalf of certain employees whose benefits under the 401(k) Plan are capped by Internal Revenue Code rules that limit the amount of compensation that can be taken into account when calculating benefits under a qualified plan. Generally, Company contributions to the DCP are calculated by applying the same formula that applies to an employee’s matching contributions under the 401(k) Plan to the employee’s compensation in excess of the Internal Revenue Code compensation limit. Participants are not required to make elective contributions to the DCP to receive an employer contribution under the DCP. The same vesting rules that apply under the 401(k) Plan apply to contributions under the DCP, except that amounts under the DCP become vested upon a change in control. Each NEO has been credited with Company contributions to the DCP and was immediately vested in his or her Company contribution when it was made.

Amounts that a participant elects to defer into the DCP are generally paid at the time and in the form elected by the participant, provided that if the participant terminates employment before attaining age 55 and completing five years of service, benefits are paid in a lump sum amount upon such termination (although for pre-2005 deferrals the Committee may pay such deferrals in five annual installments). The DCP permits participants to receive in-service withdrawals of participant contributions for unforeseeable emergencies and certain other circumstances. Prior to when the deferrals are made, a participant may make a special election as to the time and form of payment for benefits that become payable due to the participant’s death or disability if payments have not already commenced, and deferrals will be paid in accordance with such elections under those circumstances. Company contributions to the DCP are generally paid in the form of a lump sum amount when a participant separates from service. The payment of post-2004 Company and participant DCP contributions is accelerated in the event that the Company undergoes a change in control.

TEGNA 2015 Change in Control Severance Plan

The TEGNA 2015 Change in Control Severance Plan (CIC Severance Plan) provides severance pay for certain key executives upon a change in control of the Company in order to assure the Company that it will have the continued dedication of, and the availability of objective advice and counsel from, key executives notwithstanding the possibility, threat or occurrence of a change in control. Mr. Lougee is the only NEO eligible to participate in the CIC Severance Plan. Ms. Harker, Ms. Beall and Mr. Harrison participate in the TEGNA Transitional Compensation Plan (TCP) rather than the CIC Severance Plan. The Board believes it is imperative that the Company and the Board be able to rely upon key executives to continue in their positions and be available for advice, if requested, in connection with any proposal relating to a change in control without concern that those individuals might be distracted by the personal uncertainties and risks created by such a proposal. Change in control arrangements also facilitate the Company’s ability to attract and retain management as the Company competes for talented employees in a marketplace where such protections are common.

With those goals in mind, the CIC Severance Plan provides that a participant would be entitled to compensation if the participant is terminated prior to and in connection with a change in control or, if within two years from the date of the change in control, the participant’s employment is terminated by the Company other than for “cause,” or by the participant for “good reason”.

Following is a summary of several key terms of the CIC Severance Plan:

 

 

“change in control” means the first to occur of: (1) the acquisition of 20% or more of the Company’s outstanding shares of common stock or the combined voting power of the Company’s outstanding voting securities; (2) the Company’s incumbent directors ceasing to constitute at least a majority of the Board, except in connection with the election of directors approved by a vote of at least a majority of the directors then comprising the incumbent Board; (3) consummation of a sale of the Company in a merger or similar transaction, or a sale or other disposition of all or substantially all of the Company’s assets; or (4) approval by the Company’s shareholders of the Company’s complete liquidation or dissolution.

 

 

“cause” means (1) the participant’s material misappropriation of Company funds or property; (2) the participant’s unreasonable and persistent neglect or refusal to perform his or her duties which is not remedied within 30 days following notice from the Company; or (3) the participant’s conviction, including a plea of guilty or of nolo contendere, of a securities law violation or a felony.

 

 

“good reason” means the occurrence after a change in control of any of the following without the participant’s express written consent, unless fully corrected prior to the date of termination: (1) a material diminution of the participant’s duties, authorities or responsibilities; (2) a reduction in the participant’s base salary or target bonus opportunity; (3) a failure to

 

 

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provide the participant with an annual long-term incentive opportunity whose grant date value is equivalent to or greater in value than participant’s regular annual long-term incentive opportunity in effect on the date of the change in control; (4) the relocation of the participant’s office from the location at which the participant is principally employed immediately prior to the date of the change in control to a location 35 or more miles farther from the participant’s residence immediately prior to the change in control, or the Company’s requiring the participant to be based anywhere other than the Company’s offices, except for required travel on the Company’s business to an extent substantially consistent with the participant’s business travel obligations prior to the change in control; (5) the failure by the Company to pay any compensation or benefits due to the participant; (6) the failure of the Company to obtain a satisfactory agreement from any successor to assume and agree to perform the CIC Severance Plan; or (7) any purported termination of the participant’s employment that is not effected pursuant to the CIC Severance Plan.

 

 

“multiplier” means 3.0 for the Company’s CEO as of the date of the change in control; 2.0 for a participant who on the date of the change in control is a member of the Company’s executive leadership team and reports directly to the Company’s CEO; and 1.0 for other participants. Mr. Lougee’s multiplier is 3.0.

A NEO entitled to compensation under the CIC Severance Plan would receive:

 

 

Payments. Upon a participant’s qualifying termination of employment, the participant is entitled to receive a lump sum amount equal to the sum of (1) any unpaid base salary or bonus through the date of termination; and (2) a prorated annual bonus for the portion of the fiscal year elapsed prior to the termination date in an amount equal to the average annual bonus the participant earned with respect to three fiscal years immediately prior to the fiscal year in which the termination date occurs prorated for the portion of the fiscal year elapsed prior to the termination date. Additionally, participants are paid a lump sum cash severance payment equal to a “multiplier” that is designated for the participant times the sum of (1) the participant’s annual base salary at the highest rate of salary during the 12-month period immediately prior to the termination date or, if higher, during the 12-month period immediately prior to the change in control (in each case, as determined without regard for any reduction for deferred compensation, 401(k) plan contributions and similar items), and (2) the greater of (A) the average annual bonus the participant earned with respect to the three fiscal years immediately prior to the fiscal year in which the change in control occurs; and (B) the average annual bonus the participant earned with respect to the three fiscal years immediately prior to the fiscal year in which the termination occurs.

 

 

COBRA Benefit. A participant will receive an amount equal to the monthly COBRA cost of the participant’s medical and dental coverage in effect as of the date of termination multiplied by the lesser of (1) 18; or (2) 24 minus the number of full months between the date of the change in control and the date of termination.

 

 

Excise Taxes. In the event benefits otherwise would be subject to Section 4999 of the Code, they will be reduced to $1 less than the amount that would trigger such taxes if such a reduction would put the applicable participant in a better after-tax position.

Benefits are subject to the participant executing a release and agreeing to certain restrictive covenants.

TEGNA Transitional Compensation Plan (TCP)

The TCP is a legacy plan that provides severance pay for some of our NEOs and other key executives upon a change in control of the Company. Ms. Harker, Ms. Beall and Mr. Harrison participate in the TCP. Ms. Harker first participated in the TCP after April 15, 2010. Mr. Lougee participates in the CIC Severance Plan rather than the TCP.

On December 8, 2015, the Company, consistent with its practice of updating its plans and programs from time to time in light of evolving market trends, froze participation in the TCP and, effective December 15, 2016, additional service credit accruals for existing participants.

The TCP assures the Company that it will have the continued dedication of, and the availability of objective advice and counsel from, key executives notwithstanding the possibility, threat or occurrence of a change in control. As a result, we believe the TCP helps promote the retention and continuity of certain key executives for at least one year after a change in control. The Board believes it is imperative that the Company and the Board be able to rely upon key executives to continue in their positions and be available for advice, if requested, in connection with any proposal relating to a change in control without concern that those individuals might be distracted by the personal uncertainties and risks created by such a proposal. Change in control arrangements also facilitate the Company’s ability to attract and retain management as the Company competes for talented employees in a marketplace where such protections are common.

 

 

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With those goals in mind, the TCP provides that participants would be entitled to compensation following a change in control if (1) within two years from the date of the change in control the participant’s employment is terminated by the Company other than for “cause,” or by the employee for “good reason”, or (2) in the case of executives participating in the TCP before April 15, 2010 (but not those who first participate in the TCP on or after that date), within a 30-day window period beginning on the first anniversary of the change in control, the executive terminates his or her employment voluntarily.

Following is a summary of several key terms of the TCP:

 

 

“change in control” means the first to occur of: (1) the acquisition of 20% or more of our then-outstanding shares of common stock or the combined voting power of our then-outstanding voting securities; (2) our incumbent directors cease to constitute at least a majority of the Board, except in connection with the election of directors approved by a vote of at least a majority of the directors then comprising the incumbent Board; (3) consummation of our sale in a merger or similar transaction or sale or other disposition of all or substantially all of our assets; or (4) approval by our shareholders of the Company’s complete liquidation or dissolution.

 

 

“cause” means (1) any material misappropriation of Company funds or property; (2) the executive’s unreasonable and persistent neglect or refusal to perform his or her duties which is not remedied in a reasonable period of time following notice from the Company; or (3) conviction of a felony involving moral turpitude.

 

 

“good reason” means the occurrence after a change in control of any of the following without the participant’s express written consent, unless fully corrected prior to the date of termination: (1) a material diminution of an executive’s duties or responsibilities; (2) a reduction in, or failure to pay timely, the executive’s compensation and/or other benefits or perquisites; (3) the relocation of the executive’s office outside the Washington, D.C. metropolitan area or away from the Company’s headquarters; (4) the failure of the Company or any successor to assume and agree to perform the TCP; or (5) any purported termination of the executive’s employment other than in accordance with the TCP. Any good faith determination of “good reason” made by the executive shall be conclusive.

 

 

“severance period” means a number of whole months equal to the participant’s months of continuous service with the Company or its affiliates divided by 3.33; provided, however, that in no event shall the participant’s severance period be less than 24 months or more than 36 months, regardless of the participant’s actual length of service. As of December 31, 2022, the severance periods for Ms. Harker, Ms. Beall and Mr. Harrison are 24, 36 and 36 months, respectively.

An NEO entitled to compensation under the TCP would receive:

 

 

Pension. In addition to their vested TRP and SERP benefits, upon their termination of employment, TCP participants are entitled to a lump sum payment equal to the difference between (1) the amount that would have been paid under the TRP and SERP had the executive remained in the employ of the Company for the severance period and received the same level of base salary and bonus which the executive received with respect to the fiscal year immediately preceding the date of the change in control or the termination date, whichever is higher, and (2) the amount payable under the TRP and SERP as of the later of the date of the change in control or the termination date, whichever is higher. Ms. Beall’s SERP benefit was subject to a service and pay freeze as of December 15, 2017. Mr. Harrison’s SERP benefit was subject to a service and pay freeze as of August 1, 2008. Ms. Beall is 100% vested in her SERP benefit and Mr. Harrison would become 100% vested in his SERP benefit in the event of a change in control. The TCP would provide each of Ms. Beall and Mr. Harrison with increases in her or his pension benefit through the end of her or his severance period. Ms. Harker does not participate in the TRP or the SERP.

 

 

Payments. Upon a TCP participant’s qualifying termination of employment, the participant is entitled to receive a lump sum amount equal to the sum of (i) any unpaid base salary through the date of termination at the higher of the base salary in effect immediately prior to change in control or on the termination date; and (ii) an amount equal to the highest annual bonus paid in the three preceding years which is prorated to reflect the portion of the fiscal year in which the participant was employed prior to termination. Additionally, TCP participants are paid a lump sum cash severance payment equal to the participant’s severance period divided by twelve multiplied by the sum of (1) the executive’s highest base salary during the 12-month period prior to the termination date or, if higher, during the 12-month period prior to the change in control (plus certain other compensation items paid to the participant during the 12-month period prior to the date of termination), and (2) the greater of (a) the highest annual bonus earned by the executive in the three fiscal years immediately prior to the year of the change in control or (b) the highest annual bonus earned by the executive with respect to any fiscal year during the period between the change in control and the date of termination.

 

 

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Excise Taxes. Executives participating in the TCP before April 15, 2010 (but not those who first participated in the TCP on or after that date) would be entitled to receive payment of an amount sufficient to make them whole for any excise tax imposed on the payment under Section 4999 of the Internal Revenue Code. The effects of Section 4999 generally are unpredictable and can have widely divergent and unexpected effects based on an executive’s personal compensation history. Therefore, to provide an equal level of benefit across individuals without regard to the effect of the excise tax, the Company determined that excise tax reimbursement payments were appropriate for certain TCP participants. Executives, such as Ms. Harker, who first participated in the TCP on or after April 15, 2010, will not receive a Section 4999 excise tax reimbursement. The change of control benefits for executives who are not entitled to receive a Section 4999 excise tax reimbursement payment will be reduced to $1 less than the amount that would trigger such taxes if such a reduction would put them in a better after-tax position.

 

 

Medical and Life Insurance. For purposes of determining a TCP participant’s eligibility for retiree life insurance and medical benefits, the participant is considered to have attained the age and service credit that the participant would have attained had the participant remained employed until the end of the severance period. Additionally, each TCP participant receives life and medical insurance benefits for the severance period in amounts no less than those that would have been provided had the participant not been terminated.

TEGNA Executive Severance Plan (TESP)

Each of the NEOs participates in the TEGNA Inc. Executive Severance Plan (TESP). The TESP provides severance payments to each of the NEOs and other executives of the Company approved by the Committee in the event of certain involuntary terminations of employment. Under the TESP, a participant who experiences an involuntary termination of employment without cause would receive a lump-sum cash severance payment equal to the product of (a) a severance multiple; and (b) the sum of the participant’s (1) annual base salary and (2) average annual bonus earned for the three fiscal years immediately preceding the termination. The severance multiple is 2.0 for a participant who is the Company’s Chief Executive Officer, 1.5 for a participant who is a member of the Company’s executive leadership team who reports directly to the Company’s Chief Executive Officer, and 1.0 for all other participating executives. In addition, participating executives would receive a lump sum amount equal to the sum of (1) any unpaid base salary or bonus through the date of termination; and (2) a prorated annual bonus for the portion of the fiscal year elapsed prior to the termination. The severance payment is contingent upon the participant’s execution of a separation agreement containing a release of claims in favor of the Company and its affiliates and covenants restricting the participant’s competition, solicitation of employees, disparagement of the Company and its affiliates, and disclosure of confidential information. The separation agreement also contains a release of claims by the Company and its affiliates in favor of the participant and a covenant restricting the Company’s disparagement of the participant. The severance multiples for Mr. Lougee, Ms. Harker, Ms. Beall and Mr. Harrison are 2.0, 1.5, 1.5 and 1.5, respectively.

In May 2017, in order to secure the retention of Ms. Harker following the Cars.com Spin-off, the Company entered into a letter agreement with Ms. Harker pursuant to which she was entitled to participate in the TESP or a plan that provides substantially similar benefits through February 28, 2018. Following that date, Ms. Harker is permitted to terminate her employment with the Company voluntarily and receive the benefits contemplated by the TESP or such other severance plan, subject to her compliance with certain notice requirements and the terms of such plan (including the execution of a release of claims) and provided that circumstances have not arisen entitling the Company to terminate her employment for cause.

Additional information regarding severance benefits for the Company’s NEOs is set forth in the section of this Proxy Statement entitled “Other Potential Post-Employment Payments.”

 

 

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Other Compensation Policies

Recoupment Policy

The Company has adopted a recoupment or “clawback” policy that applies to cash-based and equity-based incentive compensation awards granted to the Company’s employees, including the NEOs. Under the policy, to the extent permitted by applicable law and subject to the approval of the Committee, the Company may seek to recoup any incentive based compensation awarded to any employee subject to the policy, if (1) the Company is required to prepare an accounting restatement due to the material noncompliance with any financial reporting requirement under the securities laws, (2) the fraud or intentional misconduct of an employee subject to the policy contributed to the noncompliance that resulted in the obligation to restate, and (3) a lower award of incentive-based compensation would have been made to the covered employee had it been based upon the restated financial results. In December 2018, the Company amended its recoupment policy to also permit the Committee to recoup up to three years of an employee’s incentive compensation if that employee’s gross negligence or intentional misconduct caused the Company material harm (financial, competitive, reputational or otherwise), even if the Company is not required to prepare an accounting restatement. The policy is in addition to any other remedies the Company may have, including those available under Section 304 of the Sarbanes-Oxley Act of 2002, as amended.

Hedging, Short-Selling and Pledging Policy

The Company has adopted a policy that prohibits the Company’s employees and directors from purchasing financial instruments that are designed to hedge or offset any fluctuations in the market value of the Company’s equity securities they hold, purchasing the Company’s shares on margin and selling any securities of the Company “short.” The policy also prohibits the Company’s directors and executive officers from borrowing against any account in which the Company’s equity securities are held or pledging the Company’s equity securities as collateral for a loan. These prohibitions apply whether or not such equity securities were acquired through the Company’s equity compensation programs.

Tax Considerations

Effective January 1, 2018, Section 162(m) of the Internal Revenue Code generally disallows a tax deduction to public corporations for compensation over $1,000,000 paid to an individual who was the company’s CEO, CFO or one of the company’s next three other most highly compensated executive officers in any year after 2016. As a general matter, while the Committee considers tax deductibility as one of several relevant factors in determining compensation, it retains the flexibility to design and maintain executive compensation arrangements that it believes will attract and retain executive talent and result in strong returns to shareholders, even if such compensation is not deductible by the Company for federal income tax purposes.

Leadership Development and Compensation Committee Report

The Leadership Development and Compensation Committee met with management to review and discuss the Compensation Discussion and Analysis disclosures included in this Proxy Statement. Based on such review and discussion, on April 27, 2023 the Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and in the Company’s Form 10-K/A filed on May 1, 2023, and the Board has approved that recommendation.

Leadership Development and Compensation Committee

Scott K. McCune, Chair

Howard D. Elias

Lidia Fonseca

Melinda C. Witmer

 

 

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Summary Compensation Table

 

Name and

Principal Position

Year

Salary

($)(1)

Bonus

($)

Stock

Awards

($)(2)

 

Change in

Pension Value

and Nonqualified

Deferred

Compensation

Earnings

($)(3)

All Other

Compensation

($)(4)

      Total      

($)

 

David T. Lougee

(President and CEO)

 

2022

 

975,000

 

1,267,500

 

4,875,013

 

0

 

154,088

7,271,600

 

2021

 

975,000

 

1,450,000

 

4,387,505

 

5,465

 

140,507

6,958,477

 

2020

 

915,986

 

1,146,500

 

4,387,505

 

70,994

 

192,401

6,713,385

 

Victoria D. Harker

(Executive Vice President

and Chief Financial Officer)

 

2022

 

722,500

 

730,000

 

1,825,000

 

0

 

80,773

3,358,273

 

2021

 

700,000

 

880,000

 

1,399,988

 

0

 

72,614

3,052,602

 

2020

 

670,385

 

695,000

 

1,400,002

 

0

 

75,691

2,841,078

 

Lynn Beall

(Executive Vice President and

COO—Media Operations)

 

2022

 

642,500

 

650,000

 

1,299,997

 

0

 

129,128

2,721,625

 

2021

 

620,000

 

775,000

 

1,147,010

 

0

 

115,580

2,657,590

 

2020

 

587,077

 

605,000

 

1,146,990

 

664,106

 

113,778

3,116,951

 

Akin S. Harrison

(Senior Vice President and

General Counsel)

 

2022

 

487,500

 

425,000

 

1,000,008

 

0

 

38,020

1,950,527

 

2021

 

450,000

 

430,000

 

832,512

 

2,175

 

31,999

1,746,686

  2020   425,385   312,500   787,502   5,004   31,022 1,561,413

 

(1)

Amounts in this column reflect that increases in base salaries become effective on or about April 1 of the year to which the increase relates.

(2)

Amounts in this column represent the aggregate grant date fair value of Performance Share and RSU awards computed in accordance with Accounting Standards Codification 718, Compensation—Stock Compensation (“ASC 718”) based on the assumptions set forth in note 9 to the Company’s 2022 audited financial statements. The amounts reported in this column are not paid to or realized by the NEO. There can be no assurance that the ASC 718 amounts shown in this column will ever be realized by an executive officer. The value of grants of Performance Shares included above have been calculated assuming the target level of performance is met, which we consider to be the most probable outcome. If grants of Performance Shares were calculated assuming the maximum level of performance was met, the amounts shown in this column for Mr. Lougee would be: 2022: $8,287,514; 2021: $7,458,753; 2020: $7,458,760; for Ms. Harker: 2022: $2,828,740; 2021: $2,169,982; 2020: $2,169,998; for Ms. Beall: 2022: $2,014,994; 2021: $1,777,867; 2020: $1,777,836; and for Mr. Harrison: 2022: $1,550,013; 2021: $1,290,391; 2020: $1,220,626.

(3)

Amounts in this column represent the aggregate increase, if any, of the accumulated benefit liability relating to the NEO under the TRP and the SERP in the applicable fiscal year. Amounts are calculated by comparing values as of the pension plan measurement date used for the Company’s financial statements for the applicable fiscal years. The Company uses the same assumptions it uses for financial reporting under generally accepted accounting principles with the exception of retirement age, pre-retirement mortality and probability of terminating employment prior to retirement. The assumed retirement age for the above values is the earliest age at which an executive could retire without any benefit reduction due to age. The above values are calculated assuming each NEO survives to the assumed retirement age. The amounts reported in this column shown for Mr. Lougee include the accumulated benefit liability related to his legacy Belo Corp. pension benefit. The amounts reported in this column shown for Ms. Harker reflect the fact that she does not participate in the TRP or the SERP.

(4)

Amounts for 2022 reported in this column include (i) life insurance premiums paid by the Company for Ms. Beall in the amount of $20,163 (for an explanation of the Company’s life insurance programs, see footnote 3 to the “Potential Payments to NEOs Upon Termination” table beginning on page 56 of this Proxy Statement); (ii) matching contributions of $12,200 to each of the respective 401(k) accounts of Mr. Lougee, Ms. Harker, Ms. Beall and Mr. Harrison; (iii) Company contributions into the DCP accounts of Mr. Lougee, Ms. Harker, Ms. Beall and Mr. Harrison in the amounts of $84,800, $51,877, $44,477, and $24,462, respectively (for an explanation of these payments, see the discussion of the TEGNA Deferred Compensation Plan beginning on page 42 of this Proxy Statement); (iv) premiums in the amount of $22,032 paid by the Company for supplemental medical coverage for Mr. Lougee and Ms. Beall; (v) for Ms. Beall, an automobile allowance (beginning in 2012, the Company no longer provides an automobile (or automobile allowance) to new senior executives; Mr. Lougee, Ms. Harker and Mr. Harrison do not receive this benefit), (vi) legal and financial services for Mr. Lougee and Ms. Beall; (vii) TEGNA Foundation grants to eligible charities recommended by Mr. Lougee and Ms. Harker of up to $15,000 annually (beginning in 2013, the Company no longer provides this benefit to new senior executives, including Ms. Beall and Mr. Harrison); and (viii) premiums paid by the Company for travel accident insurance for Mr. Lougee, Ms. Harker, Ms. Beall and Mr. Harrison in the amounts of $1,696, $1,696, $1,696 and $1,358, respectively. The NEOs also occasionally receive tickets to sporting events for personal use if the tickets are not needed for business use, for which the Company does not incur incremental costs.

 

 

48

      |       2023 PROXY STATEMENT


Table of Contents
LOGO    Executive Compensation: Grants of Plan-Based Awards

 

 

Grants of Plan-Based Awards

The following table summarizes grants of plan-based awards in 2022 See the table entitled “Outstanding Equity Awards at Fiscal Year End” for the number of plan-based awards outstanding on December 31, 2022.

 

     

Estimated Future Payouts
Under Equity Incentive
Plan Awards(2)

 

 

All Other
Stock
Awards:
Number
Of Shares
Of Stock
Or Unit
(#)(3)

Grant
Date Fair
Value of
Stock
and Options
Awards
($)(4)

Name

Grant
Date(1)

Committee
Meeting

Date

Threshold

(#)

Target

(#)

Maximum

(#)

 

Mr. Lougee

 

3/1/2022

 

2/22/2022

 

101,702

 

156,465

 

312,930

 

3,412,502

 

3/1/2022

 

2/22/2022

 

66,508

 

1,462,511

 

Ms. Harker

 

3/1/2022

 

2/22/2022

 

29,914

 

46,022

 

92,044

 

1,003,740

 

3/1/2022

 

2/22/2022

 

37,347

 

821,261

 

Ms. Beall

 

3/1/2022

 

2/22/2022

 

21,309

 

32,783

 

65,566

 

714,997

 

3/1/2022

 

2/22/2022

 

26,603

 

585,000

 

Mr. Harrison

 

3/1/2022

 

2/22/2022

 

16,392

 

25,218

 

50,436

 

550,005

 

3/1/2022

 

2/22/2022

 

20,464

 

450,003

 

(1)

See the “Compensation Discussion and Analysis” section for a discussion of the timing of various pay decisions.

(2)

These share numbers represent the threshold, target and maximum payouts which may be earned under the 2022 Performance Share awards. The threshold payout is 65% of the target Performance Share award, and the maximum payout is 200% of the target Performance Share award.

(3)

The RSU grants reported in this column generally vest in four equal annual installments and, subject to certain exceptions, the corresponding vested shares of the Company’s common stock generally will be delivered to the NEO in four equal annual installments beginning on February 28, 2023.

(4)

The full grant date fair value of the awards was computed in accordance with ASC 718, based on the assumptions set forth in note 9 to the Company’s 2022 audited financial statements. There can be no assurance that the ASC 718 amounts shown in the table will ever be realized by an executive officer. Amounts shown for grants of Performance Shares have been calculated assuming the target level of performance is met.

 

 

2023 PROXY STATEMENT         |        

49


Table of Contents
LOGO    Executive Compensation: Outstanding Equity Awards at Fiscal Year-End

 

 

Outstanding Equity Awards at Fiscal Year-End

 

         

 

Stock Awards

Name

 

Number

of

Shares

or Units

of Stock

that

Have Not

Vested

(#)

   

Market

Value of

Shares

or Units

of Stock

that

Have Not

Vested

($)(1)

   

Equity

Incentive

Plan

Awards:

Number of

Unearned

Shares,

Units or

Other

Rights

That Have

Not Vested

(#)

   

Equity
Incentive

Plan

Awards:

Market or

Payout

Value of

Shares,

Units

or Other

Rights

That Have

  Not Vested  

($)

 

Mr. Lougee

 

 

23,275(2)

 

 

 

493,197

 

   
 

 

48,321(3)

 

 

 

1,023,922

 

   
 

 

56,315(4)

 

 

 

1,193,315

 

   
 

 

66,508(5)

 

 

 

1,409,305

 

   
 

 

325,794(6)

 

 

 

6,903,575

 

   
 

 

160,892(7)

 

 

 

3,409,301

 

   
                 

 

156,465

(8) 

 

3,315,493

 

Ms. Harker

 

 

12,600(2)

 

 

 

266,994

 

   
 

 

23,128(3)

 

 

 

490,082