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

(Amendment No.     )

 

 

Filed by the Registrant  ☒                             Filed by a Party Other Than the Registrant  ☐

Check the appropriate box:

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☒		Definitive Proxy Statement
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☐		Soliciting Material Pursuant to §240.14a-12

BRIGHT HORIZONS FAMILY SOLUTIONS INC.

(Name of Registrant as Specified In Its Charter)

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

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2 Wells Avenue

Newton, Massachusetts 02459

April 29, 2021

Dear Shareholder:

We cordially invite you to attend our 2021 Annual Meeting of Shareholders on Thursday, June 24, 2021 at 8:00 a.m. (Eastern Time). Due to the continued impact of COVID-19, we will host a virtual shareholder meeting conducted via live audio webcast. The virtual meeting format provides for an opportunity for participation from any location that is safe and convenient to an attendee, and we are committed to ensuring that our attendees have substantially the same opportunities to participate in a virtual setting as they would at an in-person meeting. You may attend the 2021 Annual Meeting of Shareholders by logging in at www.virtualshareholdermeeting.com/BFAM2021. For further information on how to participate in the meeting, please see “Information Regarding the Virtual Annual Meeting” in the Proxy Statement for our 2021 Annual Meeting of Shareholders (the “Proxy Statement”).

Pursuant to the Securities and Exchange Commission rules that allow companies to furnish proxy materials to shareholders over the Internet, we are posting our proxy materials on the Internet and delivering a Notice of Internet Availability of Proxy Materials (the “Notice”). This delivery process allows us to provide shareholders with the information they need, while at the same time conserving natural resources and lowering the cost of delivery. On or about April 29, 2021, we will begin mailing to our shareholders the Notice containing instructions on how to access the Proxy Statement and the 2020 Annual Report on Form 10-K as well as how to request a paper copy of these proxy materials by mail. The Notice also provides instructions on how to vote online. If you prefer, you can vote by mail or telephone by requesting a proxy card and following the instructions.

The Notice and the Proxy Statement accompanying this letter describe the business we will consider at the 2021 Annual Meeting of Shareholders. Your vote is important regardless of the number of shares you own. Whether or not you plan to attend the 2021 Annual Meeting of Shareholders virtually, we encourage you to consider the matters presented in the Proxy Statement and vote as soon as possible.

We hope that you will be able to join us on June 24th.

Sincerely,

 

Stephen H. Kramer

Chief Executive Officer and President

Bright Horizons Family Solutions Inc.

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

June 24, 2021

The 2021 Annual Meeting of Shareholders (the “Annual Meeting”) of Bright Horizons Family Solutions Inc. (the “Company” or “Bright Horizons”) will be held on Thursday, June 24, 2021 at 8:00 a.m. (Eastern Time). Due to the continued impact of COVID-19, this year’s Annual Meeting will be a virtual meeting and there will be no physical location for shareholders to attend. Shareholders may attend the Annual Meeting via live webcast by visiting www.virtualshareholdermeeting.com/BFAM2021. For further information on how to participate in the meeting, please see “Information Regarding the Virtual Annual Meeting” in the Proxy Statement.

The Annual Meeting will be held for the following purposes as further described in the Proxy Statement accompanying this notice:

 

•

To elect the four Class II director nominees specifically named in the Proxy Statement for a term of three years.

 

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To approve, on an advisory basis, the compensation paid by the Company to its named executive officers.

 

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To approve, on an advisory basis, the frequency of future advisory votes to approve the compensation paid by the Company to its named executive officers.

 

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To ratify the appointment of Deloitte & Touche LLP as the independent registered public accounting firm of the Company for the fiscal year ending December 31, 2021.

 

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To consider any other business properly brought before the meeting.

Shareholders of record at the close of business on April 26, 2021 are entitled to notice of, and entitled to vote at, the Annual Meeting and any adjournments or postponements thereof.

To attend the Annual Meeting, you must demonstrate that you were a Bright Horizons shareholder as of the close of business on the record date of April 26, 2021, or hold a valid proxy for the Annual Meeting from such a shareholder. To be admitted to the virtual Annual Meeting, visit www.virtualshareholdermeeting.com/BFAM2021 and enter your 16-digit control number included on the Notice of Internet Availability of Proxy Materials, proxy card or voting instruction form. We encourage you to log-on prior to the start time for the meeting. You will have the opportunity to vote your shares and ask questions at the Annual Meeting by following the instructions available on www.virtualshareholdermeeting.com/BFAM2021.

By Order of the Board of Directors,

 

John G. Casagrande

Secretary

Newton, Massachusetts

April 29, 2021

 

TABLE OF CONTENTS

 

BRIGHT HORIZONS FAMILY SOLUTIONS INC.

PROXY STATEMENT

2021 ANNUAL MEETING OF SHAREHOLDERS

June 24, 2021

8:00 a.m. (Eastern Time)

 

 

 

Information about the Annual Meeting

The Board of Directors (the “Board”) of Bright Horizons Family Solutions Inc. (the “Company” or “Bright Horizons”) is soliciting your proxy for the 2021 Annual Meeting of Shareholders (the “Annual Meeting”) and at any reconvened meeting after postponement or adjournment of the Annual Meeting.

This Proxy Statement, the Notice of Internet Availability of Proxy Materials (the “Notice”), the proxy card and the Annual Report on Form 10-K for our fiscal year ended December 31, 2020 (“2020 Annual Report”) are being first mailed or released to shareholders on or about April 29, 2021. Our address is 2 Wells Avenue, Newton, Massachusetts 02459.

 

Information Regarding the Virtual Annual Meeting

 

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Date and Time. The Annual Meeting will be held virtually on Thursday, June 24, 2021 at 8:00 a.m. (Eastern Time). The meeting will only be conducted via audio webcast. You will need your 16-digit control number provided on the Notice, proxy card or voting instruction form to attend.

 

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Access to the Audio Webcast of the Annual Meeting. The audio webcast of the Annual Meeting will begin promptly at 8:00 a.m. (Eastern Time). Online access to the audio webcast will open approximately 15 minutes prior to the start of the Annual Meeting to allow time for you to log-in and test your computer audio system. The virtual meeting platform is fully supported across browsers (Firefox, Chrome, Edge and Safari) and devices (desktops, laptops, tablets, and cell phones) running the most updated version of applicable software and plugins. If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the toll-free number or international number available on www.virtualshareholdermeeting.com/BFAM2021. Technicians will be ready to assist you with any technical difficulties beginning at 7:45 a.m. (Eastern Time) through the conclusion of the Annual Meeting.

 

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How to Attend and Log-in Instructions. To attend the Annual Meeting, you must demonstrate that you were a Bright Horizons shareholder as of the close of business on the record date of April 26, 2021. To attend, log-in at www.virtualshareholdermeeting.com/BFAM2021. You will need your 16-digit control number included on the Notice, proxy card or voting instruction form. At the virtual meeting site, you may follow the instructions to vote, access the shareholders’ list and ask questions. We recommend that you log-in 15 minutes before the meeting to ensure you are online when the meeting starts. Beneficial shareholders (i.e., shareholders who hold shares in “street name”) will be provided instructions on how to attend the Annual Meeting on the voting instruction form provided by their broker, bank or other nominee and should reach out to their broker, bank or other nominee if they have not received such instructions or have questions.

 

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Submitting Questions at the Annual Meeting. The virtual Annual Meeting format provides for an opportunity for participation from any location that is safe and convenient to an attendee, and we are committed to ensuring that our attendees have substantially the same opportunities to participate in a virtual setting as they would at an in-person meeting. Shareholders may submit questions, if any, during the Annual Meeting by logging onto www.virtualshareholdermeeting.com/BFAM2021 using your 16-digit control number. Questions pertinent to meeting matters will be answered during the meeting, subject to time constraints. Rules of Conduct including procedures for shareholder questions will be posted on the virtual meeting platform.

 

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Voting Your Shares at the Annual Meeting. Unless you hold your shares in the Bright Horizons 401(k) Plan (the “401(k) Plan”), you may vote your shares at the Annual Meeting by following the instructions available on the meeting website during the meeting even if you have previously submitted your vote. If you hold your shares through a broker, your shares will not be voted unless (i) you provide voting instructions or (ii) the matter is one for which brokers have discretionary authority to vote. Of the matters to be voted on at the Annual Meeting, the only one for which brokers have discretionary authority to vote is Proposal 4 (Ratification of Appointment of Independent Registered Public Accounting Firm).

 

						2021 Proxy Statement		|		1

Proxies, Voting Procedures and How to Vote

Your vote is important. You may vote in person in one of four ways: (1) on the Internet, (2) by using a toll-free telephone number, (3) by completing a proxy card or voting instruction form and mailing it in the envelope provided, or (4) online at the Annual Meeting.

 

Vote on the Internet		Vote by Telephone		Vote by Mail		Vote at the Annual Meeting
Visit the website listed on your Notice, proxy card or voting instruction form		Call the telephone number on your proxy card or voting instruction form		Sign, date and return your proxy card or voting instruction form		Attend the Annual Meeting at www.virtualshareholdermeeting. com/BFAM2021 and follow the instructions on the website

Both Internet and telephone voting provide easy-to-follow instructions and have procedures designed to authenticate your identity and permit you to confirm that your voting instructions are accurately reflected. If your shares are held through a broker, bank, trust or other holder of record, you may vote by Internet or telephone if your bank or broker makes those methods available, in which case the banks or brokers will enclose the instructions with this Proxy Statement. Alternatively, you may vote by signing and returning the proxy card. The Internet and telephone voting for shareholders of record will close at 11:59 p.m. (Eastern Time) on Wednesday, June 23, 2021. If your shares are held through a broker, bank, trust or other holder of record (i.e., in “street name”) and Internet or telephone voting is made available to you, these may close sooner than voting for shareholders of record. If you are a participant in the 401(k) Plan, your vote will serve as the voting instruction to the trustee of the plan for all shares you own through the 401(k) Plan. Shares of our common stock held in our 401(k) Plan must be voted on or before 11:59 p.m. (Eastern Time) on Monday, June 21, 2021. The trustee of our 401(k) Plan will vote shares for which timely instructions are not received in the same proportion as shares for which voting instructions were received under the 401(k) Plan.

The method by which you vote will not limit your right to vote at the Annual Meeting if you later decide to attend. You may revoke your proxy at any time before it is voted by voting later by telephone or Internet, returning a later-dated proxy card or voting instruction form, delivering a written revocation to the Corporate Secretary of Bright Horizons at the address above or by voting online at the Annual Meeting.

If you vote your shares by mail, telephone or Internet, your shares will be voted in accordance with your instructions. If you do not indicate specific choices when you vote by mail, telephone or Internet, your shares will be voted “FOR” the proposals as the Board recommends.

 

Shareholders Entitled to Vote

Shareholders of record at the close of business on April 26, 2021 are entitled to vote at the meeting. As of April 26, 2021, there were 61,029,075 shares of common stock outstanding and each share is entitled to one vote. Common stock is the only class of securities eligible to vote at the Annual Meeting. There are no cumulative voting rights.

A list of shareholders entitled to vote at the Annual Meeting will be available 10 days prior to the meeting. Due to COVID-19, you may contact Investor Relations under “Resources” in the Investor Relations section of our website, www.brighthorizons.com, and we will arrange for you to inspect the list. The list of shareholders will also be available during the Annual Meeting at www.virtualshareholdermeeting.com/BFAM2021.

 

Quorum and Voting Requirements

Quorum

The presence, in person or by proxy, of the holders of a majority of the shares outstanding and entitled to vote for the election of directors is necessary to constitute a quorum for all purposes.

Abstentions and “broker non-votes” are counted as present and entitled to vote for purposes of determining a quorum. Brokers who have record ownership of shares that they hold in “street name” for their clients who are the beneficial owners of the shares normally have discretion to vote such shares on routine matters, such as the

 

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ratification of an independent registered public accounting firm, but do not have such discretion to vote on non-routine matters. Broker non-votes generally occur when the beneficial owner of shares held by a broker does not give the broker voting instructions on a non-routine matter. Proposals 1, 2 and 3 are non-routine matters and brokers are not permitted to vote your shares without instruction. Brokers are permitted to vote your shares without voting instructions on Proposal 4 (Ratification of Appointment of Independent Registered Public Accounting Firm).

Required Vote – Election of Directors

To elect directors under Proposal 1, our Amended and Restated By-laws (the “By-laws”) require that a director nominee be elected by a majority of votes cast in all elections other than a contested election of directors (as defined in our By-laws). This means a nominee will be elected to the Board if the votes cast “for” exceed the votes cast “against” such nominee’s election. Abstentions and broker non-votes are not considered votes cast for the foregoing purpose, and will have no effect on the election of the nominees.

Required Vote – Advisory Vote on Executive Compensation

The affirmative vote of a majority of the votes cast by the shareholders entitled to vote at the Annual Meeting is required for approval with respect to the advisory vote on executive compensation. Abstentions and broker non-votes are not considered votes cast for the foregoing purpose, and will have no effect on the results of this vote.

Required Vote – Advisory Vote on Frequency of Future Advisory Votes on Executive Compensation

The frequency which receives the highest number of votes cast by the shareholders entitled to vote at the Annual Meeting will be viewed as the advisory vote on the frequency of future advisory votes on executive compensation. Abstentions and broker non-votes are not considered votes cast for the foregoing purpose, and will have no effect on the results of this vote.

Required Vote – Ratification of Appointment of Independent Auditors

The affirmative vote of a majority of the votes cast by the shareholders entitled to vote at the Annual Meeting is required to ratify the appointment of our independent auditors. Abstentions are not considered votes cast for the foregoing purpose, and will have no effect on the results of this vote. Because the New York Stock Exchange (the “NYSE”) considers the ratification of the independent auditors to be routine, a broker holding shares in street name may vote on this proposal in the absence of instructions from the beneficial owner.

 

Board of Directors’ Recommendations

The Board recommends a vote:

 

☑		FOR the election of each of the Class II nominees for director.		See page 5
☑		FOR the advisory vote on compensation paid by the Company to its named executive officers.		See page 51
☑		FOR 1 YEAR on the advisory vote on the frequency of future advisory votes on compensation paid by the Company to its named executive officers.		See page 52
☑		FOR the ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2021.		See page 56

 

Electronic Delivery of Proxy Materials

The Company uses the Securities and Exchange Commission (“SEC”) rule permitting companies to furnish proxy materials to their shareholders via the Internet. In accordance with this rule, on or about April 29, 2021, we sent to shareholders of record at the close of business on April 26, 2021 a Notice, which includes instructions on how to access this Proxy Statement and our 2020 Annual Report, and how to vote online for the Annual Meeting. If you received a Notice and would like to receive a printed copy of our proxy materials, please follow the instructions for requesting such materials included in the Notice.

This Proxy Statement and our 2020 Annual Report are available on the Investor Relations section of our website at www.brighthorizons.com under “Annual Meeting Materials.” If you would like to help reduce the environmental impact of our annual meetings and our costs of printing and mailing future materials, you can agree to access these documents in the future over the Internet rather than receiving printed copies in the mail.

If you are a shareholder of record, to consent to electronic delivery and receive all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet visit www.proxyvote.com and follow the instructions. When prompted, indicate that you agree to receive and access proxy materials electronically in future

 

						2021 Proxy Statement		|		3

years. Once you enroll, you will receive all future mailings via electronic delivery until you elect to cancel your enrollment by following the instructions provided on the website.

If you hold our common stock through a broker, bank, trust or other holder of record, please refer to the information provided by your broker, bank, trust or other holder of record regarding the availability of electronic delivery. If you hold our common stock through a broker, bank, trust or other holder of record and you have elected electronic access, you will receive information from your broker, bank, trust or other holder of record containing the Internet address for use in accessing this Proxy Statement and the 2020 Annual Report.

Once you sign up, you will continue to receive proxy materials electronically until you revoke this preference.

 

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting to be Held on June 24, 2021   This Proxy Statement and the 2020 Annual Report are available at www.proxyvote.com. This Proxy Statement and the 2020 Annual Report are also available on the Investor Relations section of our website at www.brighthorizons.com under “Annual Meeting Materials.”

 

4		|		Bright Horizons

PROPOSAL 1

ELECTION OF DIRECTORS

 

 

Bright Horizons has a classified Board currently consisting of four directors with terms expiring in 2021 (Class II), three directors with terms expiring in 2022 (Class III), and three directors with terms expiring in 2023 (Class I). At each annual meeting of shareholders, directors in one class are elected for a full term of three years to succeed those directors whose terms are expiring. For information on the recent retirement of our founders from the Board, please see “Board Refreshment in 2021” elsewhere in this Proxy Statement.

This year, four Class II director nominees will stand for election to a three-year term expiring at the 2024 annual meeting. The persons named as proxies will vote to elect Julie Atkinson, Jordan Hitch, Laurel J. Richie and Mary Ann Tocio as directors unless your proxy is marked otherwise. Each of these nominees has indicated his or her willingness to serve, if elected, and as of the date of this Proxy Statement, the Board is not aware that any nominee is unable or will decline to serve as a director. In the event any nominee is unable to serve as a director at the time of the Annual Meeting, the shares of common stock represented by proxies may be voted for a substitute nominee, if any, who may be designated by the Board to fill the vacancy.

We seek nominees with established strong professional reputations, business acumen and experience in multi-site operations and/or contracted business services in the child care, employee benefits and work/life solutions industry. We also seek nominees with experience in substantive areas that are important to our business such as international operations; accounting, finance and capital structure; strategic planning and leadership of complex organizations; human resources and development practices; marketing strategy; and innovation.

The below nominees have substantial leadership, management, and industry expertise. The diversity of experience of these nominees, as illustrated by the skills described in their biographies below, help drive our strategic priorities. Each nominee brings a unique perspective to our Board that we believe is invaluable.

 

Nominees for Election for Terms Expiring in 2024 (Class II Directors)

The individuals listed below, Julie Atkinson, Jordan Hitch, Laurel J. Richie and Mary Ann Tocio, have been nominated and are standing for election at this year’s Annual Meeting. If elected, they will hold office until our 2024 annual meeting of shareholders and until their successors are duly elected and qualified. All of these directors, with the exception of Ms. Richie, who joined the Board in 2019, were previously elected to the Board by shareholders.

This year’s nominees are all independent. Each nominee holds or has held senior executive positions in large, complex organizations or with businesses within our industry, and have a broad range of experience that spans different industries and sectors. Each nominee has experience serving on boards and committees of other public companies and all nominees possess an understanding of public company corporate governance practices and trends. All of our nominees have served the Board previously, which has provided them with significant exposure to both our business and the industry in which we compete. Our nominees bring to our Board a variety of skills, qualifications and viewpoints that both strengthen their ability to carry out their oversight role on behalf of our shareholders and bring richness to Board deliberations.

 

						2021 Proxy Statement		|		5

We believe that all our nominees possess the professional and personal qualifications necessary for board service, and we have highlighted particularly noteworthy attributes and qualifications for each director in the individual biographies below.

 

Julie Atkinson   Age: 47   Director since 2017   Member, Nominating and Corporate Governance Committee		Ms. Atkinson has served as Chief Marketing Officer for Chopt Creative Salad Company since October 2019. She previously served as Senior Vice President, Global Digital at Tory Burch LLC from February 2017 to February 2018. Prior to joining Tory Burch, Ms. Atkinson served in various leadership roles at Starwood Hotels & Resorts Worldwide, Inc. (“Starwood”), most recently as Senior Vice President, Global Digital from November 2014 to January 2017 and as Vice President of Global Online Distribution from September 2012 until November 2014. Prior to joining Starwood, Ms. Atkinson held multiple roles at Travelocity including marketing and operations. Ms. Atkinson currently serves on the board of directors of Ventoux CCM (Nasdaq: VTAQU).   Ms. Atkinson’s valuable experience and background in marketing, digital growth strategy, operations and e-commerce make her a key resource for the Board.
Jordan Hitch   Age: 54   Director since 2008   Chair, Compensation Committee   Member, Nominating and Corporate Governance Committee		Mr. Hitch is currently an active private investor in a wide range of early stage growth companies and renewable infrastructure projects. Previously, Mr. Hitch was a Managing Director at Bain Capital LLP (“Bain Capital”) for 18 years. Mr. Hitch served as a Senior Advisor to Bain Capital following his departure from the firm in 2015 until 2017. Prior to joining Bain Capital, Mr. Hitch was a consultant at Bain & Company where he worked in the financial services, healthcare and utility industries. Mr. Hitch currently serves on the board of directors of Burlington Stores, Inc. (NYSE: BURL).   Mr. Hitch’s significant professional experience in, and knowledge of, corporate finance, strategic development and capital markets strengthen the collective qualifications, skills and experience of the Board.

 

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Laurel J. Richie   Age: 62   Director since 2019   Chair, Nominating and Corporate Governance Committee   Member, Audit Committee		Ms. Richie served as President of the Women’s National Basketball Association LLC (“WNBA”), from May 2011 to November 2015. Prior to her appointment in 2011 to the WNBA, she served as Chief Marketing Officer of Girl Scouts of the United States of America from 2008 to 2011. From 1984 to 2008, she held various positions at Ogilvy & Mather, including Senior Partner and Executive Group Director and founding member of the agency’s Diversity Advisory Board. Ms. Richie was named one of the 25 Most Influential Women in Business by The Network Journal, awarded Ebony magazine’s Outstanding Women in Marketing and Communications Award, and named to Ebony’s Power 100 List. She has also been recognized by Black Enterprise magazine as one of the Most Influential African Americans in Sports and by Savoy magazine as one of the Most Influential Black Corporate Directors. Ms. Richie is a former Trustee of the Naismith Basketball Hall of Fame. She currently serves as a director of Synchrony Financial (NYSE: SYF) and as a member of their Management Development and Compensation Committee and Nominating and Corporate Governance Committee and as a director of Hasbro, Inc. (Nasdaq: HAS) and as a member of their Compensation Committee and Nominating, Governance and Social Responsibility Committee. She also serves as chair of the Board of Trustees at Dartmouth College and as a leadership consultant to Fortune 100 C-suite executives.   Ms. Richie’s executive management and leadership experience, her strategic and operational expertise, her considerable background in communications, brand development and marketing and her experience serving on Governance and Social Responsibility Committees make her an important member of the Board.
Mary Ann Tocio   Age: 73   Director since 2001		Ms. Tocio served as Chief Operating Officer of the Company from 1998 and as President and COO from June 2000 until her retirement in June 2015. Ms. Tocio joined Bright Horizons in 1992 as Vice President and General Manager of Child Care Operations, and served as Chief Operating Officer from November 1993 until the merger with CorporateFamily Solutions, Inc. in July 1998. Ms. Tocio has more than 30 years of experience managing multi-site service organizations, more than 20 years of which were with the Company. She was previously the Senior Vice President of Operations for Health Stop Medical Management, Inc. Ms. Tocio currently serves as a member of the board of directors of Burlington Stores, Inc. (NYSE: BURL) and previously served on the board of Civitas Solutions, Inc. (The MENTOR Network) (NYSE: CIVI) from October 2015 to March 2019 and the board of Mac-Gray Corporation (NYSE: TUC) from 2006 to 2013.   Ms. Tocio’s significant leadership and operational experience, including as former President and Chief Operating Officer of the Company, and her expertise with managing complex and growing organizations as well as other public company board experience render her an invaluable resource as a director.

 

Vote Required

The Company has a majority voting requirement for the uncontested election of directors, which increases our Board’s accountability to our shareholders. A majority of the votes cast at the meeting will be required for the election of each of the Class II director nominees. A nominee for director will be elected to the Board if the votes cast “for” such nominee’s election exceed the votes cast “against” such nominee’s election. Broker non-votes and abstentions are not considered votes cast for the foregoing purpose, and will have no effect on the outcome of the election of the nominees.

 

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE ELECTION OF EACH OF THE NOMINEES AS DIRECTOR.

 

						2021 Proxy Statement		|		7

Biographies of Directors Not Standing for Election

Directors with Terms Expiring in 2022 (Class III Directors)

 

Lawrence M. Alleva   Age: 71   Director since 2012   Chair, Audit Committee   Member, Compensation Committee		Mr. Alleva is a Certified Public Accountant (inactive) and spent his professional career with PricewaterhouseCoopers LLP (“PwC”), including 28 years as a partner, from 1971 until his retirement in 2010. At PwC he served clients ranging from Fortune 500 and multinational companies to rapid-growth companies pursuing initial public offerings. Mr. Alleva also served in a senior national leadership role for PwC’s Ethics and Compliance Group to manage the design and implementation of best practice procedures, internal controls and monitoring activities, including PwC’s response to inspection reports issued by the Public Company Accounting Oversight Board. Mr. Alleva currently serves as a director and chair of the audit committees of Adaptimmune Therapeutics PLC (Nasdaq: ADAP), Mersana Therapeutics Inc. (Nasdaq: MRSN) and Galera Therapeutics, Inc. (Nasdaq: GRTX) as well as a member of the Galera Compensation Committee. He previously served in a similar capacity as audit chair for Tesaro Inc. (Nasdaq: TSRO), Mirna Therapeutics, Inc. (Nasdaq: MIRN) and GlobalLogic, Inc. He served as a trustee of Ithaca College for over 20 years, including in the vice-chair role for 10 years.   Mr. Alleva brings valuable experience to the Board through his audit assurance and Sarbanes-Oxley Act expertise, and his professional focus on areas such as corporate governance, business strategy, risk, internal controls and financial reporting best practices.
Joshua Bekenstein   Age: 62   Director since 1986   Member, Compensation Committee		Mr. Bekenstein has been a Managing Director at Bain Capital since 1986. Prior to joining Bain Capital in 1984, Mr. Bekenstein spent several years at Bain & Company, where he was involved with companies in a variety of industries. Mr. Bekenstein serves as a director of Canada Goose Holdings Inc. (NYSE: GOOS), BRP Inc. (TSX: DOO), The Michaels Companies, Inc. (Nasdaq: MIK), and Dollarama Inc. (OTC: DLMAF). He previously served on the boards of Burlington Stores, Inc. (NYSE: BURL), and Waters Corporation (NYSE: WAT), each until March 2017.   Mr. Bekenstein brings to the Board many years of experience both as a senior executive of a large investment firm and as a director of public companies in various business sectors.
David H. Lissy   Age: 55   Director since 2001   Chair of the Board		Mr. Lissy is the current Chair of the Board. He served as Executive Chairman of the Company from January 2018 through December 2019 and has served as a director of the Company since 2001. Mr. Lissy served as Chief Executive Officer of the Company from January 2002 to January 2018 and previously served as Chief Development Officer from July 1998 until January 2002 and as Executive Vice President from June 2000 to January 2002. He joined Bright Horizons in August 1997 as Vice President of Development. Prior to joining Bright Horizons, Mr. Lissy served as senior vice president/general manager at Aetna U.S. Healthcare in the New England region. Mr. Lissy has served on the board of Redfin Corporation (Nasdaq: RDFN) since 2018 and as chair since 2020. He also serves on the boards of private companies, BeneLynk, Inc. and Scripta Insights, Inc., Jumpstart and as chair of the board of trustees of Ithaca College.   Mr. Lissy’s prior experience, his leadership at many charitable, business services and educational organizations, and his leadership and prior management of the Company provide him with the considerable experience and breadth of management skills to serve as Chair of the Board.

 

8		|		Bright Horizons

Directors with Terms Expiring in 2023 (Class I Directors)

 

Stephen H. Kramer   Age: 50   Director since 2018   Chief Executive Officer and President		Mr. Kramer has served as Chief Executive Officer and a director of the Company since January 2018 and as President of the Company since January 2016. Mr. Kramer served as the Chief Development Officer from January 2014 until January 2016 and as Senior Vice President, Strategic Growth & Global Operations from January 2010 until December 2013. He served as Managing Director, Europe from January 2008 until December 2009. He joined Bright Horizons in September 2006 through the acquisition of College Coach, which he co-founded and led for eight years.   Mr. Kramer’s long career with Bright Horizons and his leadership and management of the Company’s day-to-day operations and strategic direction provides the Board with a deeper understanding of the Company’s business processes, strategic plan and operations making him a necessary and vital member of the Board.
Dr. Sara Lawrence-Lightfoot   Age: 76   Director since 1993   Member, Nominating and Corporate Governance Committee		Dr. Lawrence-Lightfoot, a MacArthur winning sociologist, is the Emily Hargroves Fisher Research Professor of Education at Harvard University and has been on the faculty since 1972. She retired from teaching in 2019. She is the first African American woman in Harvard’s history to have an endowed chair named in her honor. Dr. Lawrence-Lightfoot served as a director of the John D. and Catherine T. MacArthur Foundation from 1991 to 2007 and as chair from 2001 to 2007. She was deputy chair of the board of directors of Atlantic Philanthropies, where she served from 2007 to 2020, and previously served as chair of the Academic Affairs Committee of the board of trustees of Berklee College of Music from September 2007 until March 2012. She was re-elected to the Berklee board of trustees in March 2014 and continues to serve. She served as trustee of the WGBH Educational Foundation from 2001 through 2019.   Dr. Lawrence-Lightfoot’s extensive research and expertise in child development, teacher training, classroom structures and processes, curriculum development, parent/teacher relationships, educational policies and organizational structures and her position in academia provide an invaluable and unique perspective to the Board.
Cathy E. Minehan   Age: 74   Director since 2016   Member, Audit Committee		Ms. Minehan has been the Managing Director of Arlington Advisory Partners LLC, a private company, since 2016. Ms. Minehan retired as Dean of the School of Management of Simmons College in June 2016 having held that position since August 2011. Ms. Minehan retired from the Federal Reserve Bank of Boston in July 2007, after serving 39 years with the Federal Reserve System. From July 1994 until her retirement, she was the President and Chief Executive Officer of the Federal Reserve Bank of Boston and served on the Federal Open Market Committee. She also was the first Vice President and Chief Operating Officer of the Federal Reserve Bank of Boston from July 1991 to July 1994. Ms. Minehan currently serves on the board of directors and chairs the audit committee of MITRE, a federally funded research and development corporation. She is also a trustee of the Brookings Institution, an honorary trustee and chair of the Nominations and Governance Committee of Massachusetts General Hospital’s board of trustees, co-chair of the Institutional Conflict Committee of Partners Healthcare System, co-chair of the Boston Women’s Workforce Council, chair of the board of the Museum of Fine Arts Boston, president of the National Association of Corporate Directors New England Chapter and vice chair of WGBH. She previously served on the board of directors of Visa, Inc. (NYSE: V) and as a member of its audit committee, from November 2007 to January 2017, and the board of directors of MassMutual Life Insurance Company, a private company, from 2009 to 2017. Ms. Minehan is also a member of the University of Rochester’s board of trustees and is an elected fellow of the American Academy of Arts and Sciences.   Ms. Minehan, through her past leadership roles, her financial knowledge and her experience with risk management issues and best practices for audit committees and boards as well as her long-tenure with the Federal Reserve System, lends considerable financial, risk management, policy-making and operational expertise to the Board.

 

						2021 Proxy Statement		|		9

DIRECTOR COMPENSATION

 

 

The Company’s director compensation program for non-employee directors, as further described below, is intended to be competitive in attracting and recruiting new Board candidates and to align our directors’ interests with those of our shareholders.

 

Annual Cash Compensation

Our non-employee directors receive an annual retainer of $50,000 for their service on the Board and receive the following additional annual retainers for their service on Board committees:

 

Committee		Chair(1)				Member
Audit Committee		$	25,000			$	10,000
Compensation Committee		$	15,000			$	7,500
Nominating and Corporate Governance Committee		$	10,000			$	5,000
Special Committee		$	2,500			$	2,500

 

(1)    Committee Chairs do not receive a committee member retainer.

If a non-employee director does not serve on the Board or a Board committee for the full year, the Board and any applicable committee retainers and equity grants, as described below, are generally pro-rated.

The current non-employee Chair of the Board, Mr. Lissy, receives a total annual retainer of $225,000 in recognition of the leadership, expertise, and industry experience that he brings to the role as well as his counsel and assistance on various strategic initiatives. Mr. Lissy also receives medical, dental and supplemental disability insurance.

 

Changes to Director Compensation in 2020

Due to the impact of COVID-19 on the Company’s operations, including the temporary closure of Bright Horizons centers, members of the Board voluntarily agreed to reduce or forgo their annual cash retainers effective April 1, 2020. These changes to the directors’ cash retainers were to remain in place until the earlier of December 31, 2020 or such time as a majority of the Bright Horizons centers that temporarily closed as a result of COVID-19 reopened. On August 31, 2020, a majority of Bright Horizons centers had reopened and Board compensation was reinstated. Please refer to footnote (1) to the Director Compensation Table below for more information.

 

Annual Equity Grant

Each non-employee director receives an annual equity grant of restricted stock units (“RSUs”) valued at $100,000 and our Chair receives an annual equity grant of RSUs valued at $150,000, with the number of stock units determined by dividing the grant value by the closing price of the Company’s common stock on the NYSE on the date of grant. These RSUs are fully vested on the grant date and are settled on the earliest of (1) the director’s termination of service as a member of the Board, (2) the fifth anniversary of the grant date, or (3) a change of control of the Company.

 

Expense Reimbursements

The Company reimburses Board members for reasonable out-of-pocket expenses incurred in attending Board and Board committee meetings.

 

Stock Ownership Guidelines

The Board has adopted minimum stock ownership guidelines for non-employee directors. Non-employee directors are expected to own Company shares with a market value equal to five times (5x) the annual Board cash retainer and have five years from the later of (1) May 2016 (the date of adoption) or (2) the date of their appointment to the Board, to achieve this threshold.

As of December 31, 2020, all our non-employee directors met or exceeded this stock ownership requirement.

 

10		|		Bright Horizons

2020 Director Compensation

The following table sets forth information concerning the compensation earned by our non-employee directors during the fiscal year ended December 31, 2020 (“fiscal 2020”). Compensation for Mr. Kramer in fiscal 2020, as Chief Executive Officer, is included in the “Summary Compensation Table” and the supplemental tables under the heading “Executive Compensation” included elsewhere in this Proxy Statement. Mr. Kramer did not receive any additional compensation for serving on the Board during fiscal 2020.

 

Director		Fees Earned or Paid in Cash ($)(1)		Stock Awards ($)(2)(3)(4)		All Other Compensation ($)(5)		Total ($)
Lawrence M. Alleva		48,125		100,000		—		148,125
Julie Atkinson		32,084		100,000		—		132,084
Joshua Bekenstein		33,542		100,000		—		133,542
Roger H. Brown(6)		29,167		100,000		—		129,167
Jordan Hitch		40,834		100,000		—		140,834
Marguerite Kondracke(6)		35,000		100,000		—		135,000
Dr. Sara Lawrence-Lightfoot		50,000		100,000		—		150,000
David H. Lissy		131,250		150,000		14,032		295,282
Linda A. Mason(6)		29,167		100,000		—		129,167
Cathy E. Minehan		35,000		100,000		—		135,000
Laurel J. Richie		35,000		100,000		—		135,000
Mary Ann Tocio		29,167		100,000		—		129,167

 

(1)

Due to the impact of COVID-19 on the Company, beginning April 1, 2020, Dr. Lawrence-Lightfoot agreed to forgo $5,000 of her annual cash retainer and all other Board members agreed to forgo their annual cash retainers, in each case, until the earlier of December 31, 2020 or such time as a majority of the Bright Horizons centers that temporarily closed had reopened. On August 31, 2020, a majority of Bright Horizons centers had reopened and Board compensation was reinstated.

(2)

There were no stock option awards granted to our non-employee directors in fiscal 2020. As of December 31, 2020, the following non-employee directors held the following options to purchase shares of our common stock: David H. Lissy—4,500 options and Mary Ann Tocio—49,135 options (each representing options received previously as officers of the Company). No other Board members held options to purchase shares of our common stock as of December 31, 2020. As of December 31, 2020, Mr. Lissy held 43,100 shares of purchased restricted stock representing awards received previously as an officer of the Company. No other Board members held shares of purchased restricted stock as of December 31, 2020.

(3)

Amounts shown reflect the fair value of RSUs granted to our non-employee directors in 2020, based on the intrinsic value of the awards as determined in accordance with FASB ASC Topic 718. Refer to Note 14 to our audited consolidated financial statements included in our 2020 Annual Report for additional information.

(4)

As of December 31, 2020, Messrs. Alleva, Bekenstein, Brown and Hitch and Mses. Kondracke, Mason, Minehan and Tocio, and Dr. Lawrence-Lightfoot each held 4,747 RSUs, Ms. Atkinson held 2,997 RSUs, Ms. Richie held 1,738 RSUs and Mr. Lissy held 1,202 RSUs. All RSUs are fully vested on the grant date and are settled as described above.

(5)

Amounts shown in the “All Other Compensation” column include: $11,719 reflecting the director portion of Mr. Lissy’s medical and dental benefits that the Company paid on his behalf during the period Mr. Lissy elected to forgo his annual cash retainer as described above and $2,313 in supplemental disability insurance premiums paid by the Company on behalf of Mr. Lissy during fiscal 2020.

(6)	Mr. Brown and Mses. Kondracke and Mason retired from the Board effective March 31, 2021.

 

						2021 Proxy Statement		|		11

BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD

 

 

 

Board Refreshment in 2021

On December 15, 2020, Ms. Linda Mason, Ms. Marguerite Kondracke and Mr. Roger Brown, the founders of the Company, each informed the Board of their intent to retire from the Board effective March 31, 2021. Mses. Mason and Kondracke and Mr. Brown provided for a future retirement date in order to allow for a seamless transition for the Board. Following their retirement, the Board reduced its size to 10 members and reclassified the Board into three classes of nearly equal size to balance the membership among the classes of directors. To effect this change, Mr. Lissy was reclassified as a Class III director and will stand for reelection at the annual meeting of shareholders in 2022 making him eligible for reelection one year earlier than currently scheduled.

In connection with the founders’ retirements, Ms. Richie replaced Ms. Kondracke as Chair of the Nominating and Corporate Governance Committee.

In recognition of their longstanding and distinguished service to the Company and the Board, the Board appointed Mses. Mason and Kondracke and Mr. Brown each as a Director Emeritus of the Company, effective as of March 31, 2021. Director Emeritus is an honorary designation and is not considered a director of the Company.

Our Board wishes to thank Mses. Mason and Kondracke and Mr. Brown for their long-standing service and many years of invaluable guidance to the Company.

 

Board Structure

We have an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee, each with the composition and responsibilities described below. Each committee operates under a charter that has been approved by the Board. A copy of each charter can be found under “Corporate Governance—Governance Documents” in the Investor Relations section of our website, www.brighthorizons.com. The members of each committee are appointed by the Board and each member serves until his or her successor is elected and qualified, unless he or she is earlier removed or resigns.

The Board is composed of a majority of independent directors, and our standing committees, Audit, Compensation and Nominating and Corporate Governance, are composed entirely of independent directors as defined under applicable rules of the NYSE (the “NYSE Rules”) and the rules of the SEC. For information on our director independence, please see “Board Independence” elsewhere in this Proxy Statement.

 

Board Meetings, Executive Sessions and Presiding Director

The Board and its committees meet periodically throughout the year to oversee management of the Company’s business and affairs for the benefit of its shareholders. During 2020, the Board held six meetings and acted by written consent two times and also had periodic in-person and written updates with respect to the impact of COVID-19 on the Company. During 2020, each director attended at least 75% of the total Board and Committee meetings on which he or she served during the periods that he or she served. We encourage, but do not require, our directors to attend annual meetings of shareholders and, in 2020, nine of our directors attended.

Periodically, throughout the year, the independent directors meet in executive session without members of management present. These meetings allow independent directors to discuss issues of importance to the Company, including the business and affairs of the Company as well as matters concerning management, without any member of management present. In 2020, executive sessions of independent directors were presided over by Ms. Mason, an independent director and our former Chair and, beginning in 2021, executive sessions of independent directors are presided over by Mr. Hitch, an independent director.

 

Committees and Committee Composition

The Board has three standing committees: the Audit Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee. From time to time, special committees may be established under the direction of the Board when necessary to address specific issues. The Board has delegated various responsibilities and authorities to these committees, as described below and in the committee charters. The committees periodically report on their activities and actions to the Board.

 

12		|		Bright Horizons

The table below provides information about the current membership of these committees:

 

Current Committee  Membership

Director

Class

Current Term

Independent

Audit

Compensation

Nominating and Corporate Governance

Lawrence M. Alleva

III

2022

☑

☑

Julie Atkinson

II

2021

☑

☑

Joshua Bekenstein

III

2022

☑

☑

Jordan Hitch

II

2021

☑

☑

Stephen H. Kramer

I

2023

Dr. Sara Lawrence-Lightfoot

I

2023

☑

☑

David H. Lissy(1)

III

2022

Cathy E. Minehan

I

2023

☑

☑

Laurel J. Richie(2)

II

2021

☑

☑

Mary Ann Tocio

II

2021

☑

Number of meetings during fiscal 2020

9

4

3

Action by written consent during fiscal 2020

1

2

—

 

= Chair

(1)	Effective March 31, 2021 and in connection with the retirements of Mses. Mason and Kondracke and Mr. Brown, Mr. Lissy was reclassfied as a Class III director for the sole purpose of maintaining as equal class sizes as possible.

(2)	Effective March 31, 2021, Ms. Richie was appointed to serve on the Nominating and Corporate Governance Committee as Chair to replace Ms. Kondracke as Chair who retired from the Board effective March 31, 2021.

 

Audit Committee

Members: Lawrence M. Alleva, Chair | Cathy E. Minehan | Laurel J. Richie

Audit Committee Financial Experts: Lawrence M. Alleva | Cathy E. Minehan

The Audit Committee’s purpose, roles and responsibilities are set forth in a written Audit Committee charter adopted by the Board, which can be found in the Investor Relations section of our website at www.brighthorizons.com under “Corporate Governance—Governance Documents.” The Audit Committee’s purpose is to assist the Board in its oversight of (i) the integrity of the consolidated financial statements of the Company, (ii) the Company’s compliance with legal and regulatory requirements, (iii) the independent auditor’s qualifications and independence, (iv) the performance of the Company’s internal audit function and independent auditor, and (v) the Company’s internal control over financial reporting. The Audit Committee’s primary duties and responsibilities are to:

 

•

Appoint, evaluate, oversee, retain, compensate, terminate and change the registered public accounting firm for the purpose of preparing or issuing an audit report or related work or performing other audit, review or attest services for us. The registered public accounting firm reports directly to the Audit Committee.

 

•

Pre-approve all auditing services, internal control-related services and permissible non-audit services to be performed for us by our independent auditor.

 

•

Review and discuss with management and the independent auditor the annual audited and quarterly unaudited financial statements, including reviewing specific disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

 

•

Review and discuss reports from the independent auditor with regard to critical accounting policies and practices used in such financial statements.

 

•

Review and discuss the critical audit matters.

 

•

Review and approve related party transactions.

 

•

Review and discuss with management, internal auditors and the independent auditor any material issues regarding accounting principles and financial statement presentations made in connection with the preparation of our financial statements, including any significant changes in our selection or application of accounting principles.

 

•

Review and discuss with management, internal auditors and the independent auditor the adequacy of our internal controls and any special steps or remedial measures adopted in light of any identified material weaknesses or significant deficiencies.

 

•

Review and discuss with management and the Board the Company’s enterprise risk assessment and management and periodically discuss with management the Company’s major financial and accounting risks as well as risk assessments with respect to cybersecurity and data protection.

 

						2021 Proxy Statement		|		13

The Board has determined that all of the members are independent directors pursuant to Rule 10A-3(b)(1) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and NYSE Rules. All of our members are financially literate and Mr. Alleva and Ms. Minehan are also each considered an “audit committee financial expert” within the meaning of the applicable rules of the SEC. The Audit Committee’s Report is included on page 53 of this Proxy Statement.

 

Compensation Committee

Members: Jordan Hitch, Chair | Lawrence M. Alleva | Joshua Bekenstein

The Compensation Committee’s purpose, roles and responsibilities are set forth in a written Compensation Committee charter adopted by the Board, which can be found in the Investor Relations section of our website at www.brighthorizons.com under “Corporate Governance—Governance Documents.” The Compensation Committee’s primary duties and responsibilities are to:

 

•

Assist the Board in fulfilling its responsibilities relating to oversight of the compensation of our directors, executive officers and other employees and the administration of our benefits and equity-based compensation programs.

 

•

Approve the compensation plans, policies and programs and approve specific compensation levels for our executive officers.

 

•

Review and recommend the compensation structure for directors.

 

•

Assist the Board in developing and evaluating potential candidates for executive positions (including the Chief Executive Officer) and oversee the development of executive succession plans.

 

•

Make recommendations regarding employee incentive compensation plans and equity-based plans.

 

•

Review risks related to executive compensation and the design of compensation plans.

 

•

Oversee compliance with shareholder approval of executive compensation matters, including advisory votes.

The Board has determined that all of the members are independent directors pursuant to NYSE Rules. The Compensation Committee does not currently use a compensation consultant. Pursuant to its charter and the Company’s 2012 Omnibus Long-Term Incentive Plan, as Amended and Restated (the “Equity Plan”), the Compensation Committee has the authority to delegate to one or more Board members or subcommittees any of its duties and responsibilities, and to delegate to officers, the power to grant awards, when appropriate. The Compensation Committee, in its role as administrator under the Equity Plan, approved the delegation of authority to Mr. Kramer, a Board member and the Company’s Chief Executive Officer, to grant equity awards, among other actions, under the Equity Plan within certain specified parameters.

 

Nominating and Corporate Governance Committee

Members: Laurel J. Richie, Chair | Julie Atkinson | Jordan Hitch | Dr. Sara Lawrence-Lightfoot

The Nominating and Corporate Governance Committee’s purpose, roles and responsibilities are set forth in a written charter adopted by the Board, which can be found in the Investor Relations section of our website at www.brighthorizons.com under “Corporate Governance—Governance Documents.” The Nominating and Corporate Governance Committee’s primary duties and responsibilities are to:

 

•

Identify individuals qualified to become members of the Board.

 

•

Recommend to the Board director nominees for the next shareholders’ meeting.

 

•

Recommend to the Board committee composition.

 

•

Review the Company’s Corporate Governance Guidelines.

 

•

Oversee director orientation and continuing education.

 

•

Review proposals submitted by shareholders.

 

•

Provide oversight, monitor and review the Company’s Environmental, Social & Governance (“ESG”) strategy, initiatives and policies, including receiving periodic reports regarding ESG efforts.

 

•

Assist the Board in oversight of the Company’s human capital management policies, strategies and initiatives, including diversity, equity and inclusion.

 

•

Oversee the Board’s annual self-assessment.

The Board has determined that all of the members are independent directors pursuant to NYSE Rules.

 

14		|		Bright Horizons

Board Leadership

While the Board has no set policy with respect to the separation of the offices of Chair and Chief Executive Officer and may review these offices from time to time, the Board has a long-standing practice of separating the offices of the Chair and the Chief Executive Officer. Such a review was conducted during the succession-management process relating to the appointment in 2018 of Mr. Kramer as Chief Executive Officer and Mr. Lissy as Executive Chairman and again, in 2019, when the Board considered Mr. Lissy’s transition from Executive Chairman to non-employee Chair. As a result of these reviews, the Board has determined to continue to separate the roles of Chair (now held by a non-employee director) and Chief Executive Officer.

The Board believes that the separate roles are currently in the best interest of Bright Horizons and its shareholders. Mr. Lissy has wide-ranging, in-depth knowledge of our business arising from his many years of service to Bright Horizons and, as a result, provides effective leadership and stewardship for the Board. This structure permits Mr. Kramer to devote his attention to leading Bright Horizons and focusing on the Company’s strategic direction and day-to-day leadership and performance of our business and operations.

 

Succession Planning

The Compensation Committee and the full Board periodically review succession planning for the Chief Executive Officer and other senior leadership positions. These reviews include consideration and assessment of the most promising leadership talent throughout the Company, and roles in which external candidates may need to be considered. The Board’s commitment to developing a strong succession plan for executive officer roles was evident in December 2019 when it appointed Maribeth Bearfield, Chief Human Resource Officer, and John G. Casagrande, General Counsel and Secretary, as executive officers in connection with the transition of David H. Lissy from Executive Chairman to non-employee Chair effective December 31, 2019 and other recent leadership changes.

 

Board’s Role in Risk Oversight

It is management’s responsibility to manage risk and bring to the Board’s attention risks that are material to Bright Horizons. The Board has oversight responsibility for the systems established to report and monitor the most significant risks applicable to Bright Horizons. The Board administers its risk oversight role directly and through its committee structure and the committees’ periodic reports to the Board.

The Board reviews strategic, financial and execution risks and exposures associated with the annual and long-term plan, major litigation and other matters that may present material risks to the Company’s operations, plans, prospects, strategy or the Company’s reputation. The Board annually reviews the Company’s enterprise risk management program and receives regular updates on risk exposures including, most recently, regular updates from our management team on the impact of COVID-19 and related risks and uncertainties on our business, employees, clients and families we serve. The Board has continuously reviewed, overseen and continues to monitor COVID-19 risks and mitigation strategies related to the Company’s center operations, return-to-work procedures, business strategy, business continuity, and the Company’s financial planning.

The Audit Committee oversees the Company’s internal audit function and reviews risks associated with financial and accounting matters, including financial reporting, accounting, disclosure, internal controls over financial reporting, ethics and compliance programs, and regulatory compliance. The Audit Committee oversees and discusses with management the Company’s practices with respect to our enterprise risk management program and the implementation of the Company’s policies and controls for management of such risks as well as the risks associated with cybersecurity and data protection, which include key aspects of data privacy, system security and the security of our operations. As part of these efforts, the Audit Committee receives periodic in-person updates concerning management’s efforts to address cybersecurity and data privacy risks. This year, the Audit Committee has overseen risks to the Company’s internal controls over financial reporting, disclosure controls and procedures and the independent audit as well as financial risks related to the COVID-19 pandemic.

The Compensation Committee reviews risks related to executive compensation and the design of compensation programs, plans and arrangements and oversees the development of executive succession plans, including compensation-related risks resulting from the short-term and long-term uncertainties to the Company’s financial plan as a result of the COVID-19 pandemic.

The Nominating and Corporate Governance Committee oversees Board refreshment and the appropriate assignment of directors to the Board committees for risk oversight and other areas of responsibilities, monitors and reviews the Company’s ESG strategy, initiatives and policies, including receiving periodic reports regarding the Company’s ESG efforts and assists in the Board’s oversight of the Company’s human capital management policies, strategies and initiatives, including diversity, equity and inclusion.

 

						2021 Proxy Statement		|		15

Communications with Directors

Shareholders and other interested parties may communicate directly with the Board, the non-employee directors or the independent directors as a group, or specified individual directors, such as the presiding director, by writing to such individual or group c/o Corporate Secretary, Bright Horizons Family Solutions Inc., 2 Wells Avenue, Newton, Massachusetts 02459. The Secretary will forward such communications to the relevant group or individual at or prior to the next meeting of the Board, excluding those items that are not directly related to Board duties and responsibilities, such as advertisements, solicitations, surveys, junk mail and mass mailings.

 

16		|		Bright Horizons

CORPORATE GOVERNANCE AND DIRECTOR INDEPENDENCE

 

 

 

Corporate Governance Highlights

Bright Horizons demands integrity and is committed to upholding high ethical standards. Our strong corporate governance practices support this goal and provide a framework within which the Board and management can pursue the strategic objectives of the Company and ensure long-term growth for the benefit of our shareholders. The Nominating and Corporate Governance Committee regularly reviews developments in, and matters related to, corporate governance. Highlights of our corporate governance practices are listed below and discussed elsewhere in this Proxy Statement.

Key Corporate Governance Practices:

 

✓		Ongoing Board Refreshment:		•   We are committed to Board refreshment and continuously seek to balance continuity and fresh perspectives.   •   In 2021, we reduced the Board size to 10 members following the retirement of our founders—Mses. Kondracke and Mason and Mr. Brown.   •   We have added three independent directors over the past five years—Ms. Minehan in 2016, Ms. Atkinson in 2017 and Ms. Richie in 2019.
✓		Ongoing Commitment to Diversity, Equity & Inclusion:		•   Half (50%) of our Board members are women and 20% of our Board members are racially diverse.   •   We introduced “Execution on Diversity and Inclusion Initiatives” as an individual goal for the Company’s 2021 annual cash bonus program.   •   Our Corporate Governance Guidelines provide that our Nominating and Corporate Governance Committee, and any search firm engaged, include women and minority candidates in the pool from which director candidates are selected.   •   The Board provides oversight and guidance with respect to our Company policies and practices related to human capital management and regularly receives reports on our diversity, equity and inclusion initiatives as well as employee engagement and retention.
✓		Off-Season Shareholder Engagement:		•   Annually we conduct an off-season shareholder engagement program to elicit direct feedback and gain insight from our shareholders on corporate governance, corporate responsibility and executive compensation, as further described below under the heading “Shareholder Engagement.”
✓		Independent Board:		•   Eight out of 10 current directors are independent under NYSE Rules (all directors other than our Chair and our Chief Executive Officer) and all committees are comprised solely of independent directors under NYSE Rules.
✓		Peer Reviews and Individual Director Self -Assessments:		•   The Board conducts a peer review and individual assessment of each director annually to enhance director development and Board/committee leadership planning.
✓		Robust Self-Evaluation Process:		•   The Board and each committee conduct annual self-assessments in addition to the peer reviews and individual assessments discussed above.
✓		Strong Stock Ownership Guidelines:		•   We have stock ownership requirements for non-employee directors (5x annual cash retainer), our Chief Executive Officer (5x annual salary) and our other named executive officers (3x annual salary).
✓		No Hedging and Pledging Policy:		•   All directors and executive officers are subject to the anti-pledging and anti-hedging provisions under our Amended and Restated Insider Trading Policy, which includes a prohibition on pledging by officers and directors.
✓		Majority Voting:		•   Our By-laws provide for a majority voting standard in uncontested elections of directors.
✓		No Overboarding:		•   All directors, including the Chief Executive Officer, are subject to limits on other public company board service—our Chief Executive Officer generally should not serve on more than two public company boards and directors generally should not serve on more than four public company boards, in each case, including our Board.

 

						2021 Proxy Statement		|		17

Key Corporate Governance Practices—(Continued):

 

✓		Independent Executive Sessions:		•   Our Board and committees hold regular executive sessions of non-employee directors all of whom are independent under NYSE Rules.
✓		Dedicated Succession Planning:		•   The Board actively monitors our management succession and development plans.
✓		Split Chair and Chief Executive Officer Roles:		•   Our separate Chair and Chief Executive Officer leadership structure aims to maintain segregation between Board oversight and management operating decisions.
✓		Compensation Best Practices:		•   We have caps on incentive cash bonuses tied to corporate performance, limits on annual director equity awards and cash fees and minimum vesting requirements. Please see page 32 of this Proxy Statement for more information on our other compensation practices.
✓		Clawback Policy:		•   We maintain a clawback policy covering performance-based compensation for current and former executive officers.
✓		Risk Oversight:		•   Audit Committee approval is required for related party transactions and our Audit Committee oversees enterprise risk management and cybersecurity risk with regular reports and review by the full Board.
✓		Director Education:		•   We have a board orientation and continuing education program available to all directors.
✓		No Poison Pill:		•   We do not have a shareholder rights plan in place.

 

Shareholder Engagement

Our Board and management team greatly value the opinions and feedback of our shareholders and are committed to engaging with, and listening to, our shareholders. In 2020, we undertook an off-season shareholder engagement program focused on diversity, equity and inclusion, the Company’s response to COVID-19 and covered other topics related to corporate governance and corporate responsibility/sustainability. This outreach was in addition to the ongoing dialogue among our shareholders and our Chief Executive Officer, Chief Financial Officer and Investor Relations team regarding our financial and strategic performance. This off-season we contacted shareholders representing over 70% of shares owned resulting in telephonic meetings with shareholders representing more than 40% of shares owned.

 

 

Participants from Bright Horizons varied per call and included, the Chief Financial Officer, members of Investor Relations and Legal, and for certain calls, the Chief Executive Officer or a member of our Nominating and Corporate Governance Committee. Feedback was positive with many investors expressing appreciation for the opportunity for direct dialogue and engagement. Topics covered during our discussions with investors included:

 

•

Diversity, equity and inclusion

 

•

Company response to COVID-19

 

•

Corporate responsibility and sustainability

 

•

Board composition, including board size and tenure

 

•

Corporate governance generally

The feedback from this engagement was presented to, and continues to be reviewed by, the Nominating and Corporate Governance Committee in the context of our overall corporate governance policies.

 

Board Refreshment, Diversity and Expertise

The Board of Directors and the Nominating and Corporate Governance Committee are committed to ensuring our Board represents a balance of longer-tenured members with in-depth knowledge of our business and newer members who bring valuable additional attributes, skills and experience. In addition to ensuring the Board reflects an appropriate mix of experiences, qualifications, attributes and skills, the Nominating and Corporate Governance Committee focuses on director succession and tenure and regularly reviews a Board skill set matrix.

 

18		|		Bright Horizons

Over the last five years, the Board has undergone significant refreshment by bringing in new directors who lend fresh perspectives resulting in increased gender and racial diversity and broadened backgrounds and skill sets.

Board Refreshment

Under the leadership of the Nominating and Corporate Governance Committee, the Board has been notably refreshed over the last five years by adding four new directors, including three independent directors—all of whom are women—and rotating five directors off the Board. Since 2016, we have welcomed the following directors who have brought a mix of experience in digital strategy, marketing, communications, innovation, strategic and operational leadership, industry experience, financial expertise and risk management:

 

•   Cathy E. Minehan in 2016   •   Julie Atkinson in 2017   •   Stephen H. Kramer in 2018   •   Laurel J. Richie in 2019

In March 2021, Mses. Mason and Kondracke and Mr. Brown each retired from the Board and were named honorary Director Emeritus, which is discussed further under “Board Refreshment in 2021” elsewhere in this Proxy Statement. At this time, the Board was reduced to 10 members and the average Board tenure decreased by 3.5 years.

 

 

Board Diversity

Our goal is to have a Board that represents diversity as to experience, gender and ethnicity/race and is committed to a diversified membership, in terms of both the individuals involved as well as their various experiences and areas of expertise. Our Corporate Governance Guidelines provide that the Nominating and Corporate Governance Committee include, and has any search firm that it engages include, women and minority candidates in the pool from which director candidates are selected and the Board and Nominating and Corporate Governance Committee together provide oversight of all diversity, equity and inclusion initiatives.

 

Half (50%) of our Board members are women and 20% of our Board members are racially diverse. The Board seeks broad gender and racial/ethnic diversity representation and the right mix of directors with institutional knowledge, fresh perspectives and differentiated backgrounds.		Board Diversity   10 Board Directors 5 Women 2 Black or African-American

 

						2021 Proxy Statement		|		19

Board Expertise

We seek a Board that reflects a range of talents, ages, skills, character and expertise— particularly in the areas of finance and accounting, management, domestic and international markets, leadership, corporate governance and the child care, education and related industries in which we operate—sufficient to provide sound and prudent guidance with respect to our operations and interests. The Nominating and Corporate Governance Committee regularly reviews the skills, experience, and backgrounds that it believes are desirable to be represented on the Board. The following depicts certain of the Board members’ varied skills, experience, and backgrounds based on the Nominating and Corporate Governance Committee’s most recent skills review:

 

 

 

Board Independence

Our Corporate Governance Guidelines provide that the Board shall consist of such number of directors who are independent as is required and determined in accordance with applicable laws and regulations and requirements of the NYSE. The Board evaluates relationships of each director and nominee with Bright Horizons and makes an affirmative determination whether or not such director or nominee is independent. Under our Corporate Governance Guidelines, an “independent” director is one who meets the qualification requirements for being an independent director under applicable laws and the listing standards of the NYSE. The Board reviews transactions and relationships between each non-employee director and nominee or any member of his or her immediate family and Bright Horizons. The purpose of this review is to determine whether there are any such relationships or transactions and, if so, whether they are inconsistent with a determination that the director or nominee was independent.

 

As a result of this review, the Board has affirmatively determined that Mr. Alleva, Ms. Atkinson, Mr. Bekenstein, Mr. Hitch, Dr. Lawrence-Lightfoot, Ms. Minehan, Ms. Richie and Ms. Tocio, are independent under the governance and listing standards of the NYSE.		Board Independence

 

Board and Committee Annual Performance Reviews, Peer Reviews and Self-Assessments

Our Corporate Governance Guidelines provide that the Board is responsible for annually conducting a self-evaluation of the Board as a whole. In addition, the written charters of each of the Audit, Compensation, and Nominating and Corporate Governance Committees provide that each committee shall evaluate its performance on an annual basis. During 2020, the Board and each committee conducted a self-evaluation pursuant to these requirements.

 

20		|		Bright Horizons

The Board conducts an individual director assessment and peer review annually to enhance director development, accountability and leadership planning. The Board views this annual individual self-assessment and peer review as an integral part of its commitment to continuous improvement and achieving high levels of Board and committee performance. Below is a synopsis of the Board’s self-evaluation and individual director self-assessment and peer review process:

 

 

 

Director Nominations

Criteria and Process of Identifying and Evaluating Candidates for Consideration as a Director Nominee

The Nominating and Corporate Governance Committee is responsible for recommending candidates to stand for election to the Board at the Company’s annual meeting of shareholders and for recommending candidates to fill vacancies on the Board that may occur between annual meetings. The Nominating and Corporate Governance Committee receives suggestions for new directors from a number of sources, including other Board members and our Chief Executive Officer. It also may, in its discretion, employ a third-party search firm to assist in identifying candidates for director. Our Corporate Governance Guidelines provide that the Board shall review the appropriate skills and characteristics required of Board members in the context of its current make-up. It is the policy of the Board that directors should possess the highest personal and professional ethics, integrity and values. Board members are expected to become and remain informed about the Company, its business and its industry and rigorously prepare for, attend and participate in all Board and applicable committee meetings.

The Nominating and Corporate Governance Committee evaluates each individual in the context of the skills, character, diversity and expertise of the Board as a whole, with the objective of recommending a group that can best continue the success of our business and represent shareholder interests through the exercise of sound judgment using its diversity of experience. The Board seeks the best director candidates based on the skills and characteristics required without regard to race, color, national origin, religion, disability, marital status, age, sexual orientation, gender, gender identity and expression, or any other basis protected by federal, state or local law. Our Corporate Governance Guidelines provide that our Board seeks to represent diversity as to experience, gender and ethnicity/race as well as be committed to a diversified membership, in terms of both the individuals involved as well as their various experiences and areas of expertise. Our Corporate Governance Guidelines also provide that the Nominating and Corporate Governance Committee include, and has any search firm that it engages include, women and minority candidates in the pool from which director candidates are selected. The Nominating and Corporate Governance Committee considers, in light of our business, each director nominee’s experience, qualifications, attributes and skills that are identified in the biographical information contained under “Proposal 1—Election of Directors.”

Procedures for Recommendation of Director Nominees by Shareholders

The Nominating and Corporate Governance Committee considers properly submitted recommendations for candidates to the Board from shareholders in accordance with our By-laws. Any shareholder may submit in writing a candidate for consideration for each shareholder meeting at which directors are to be elected by no later than the close of business on the 90th day nor earlier than the close of business on the 120th day prior to the anniversary date of the prior year’s annual meeting. Any shareholder recommendations for consideration by the Nominating and Corporate Governance Committee should include the candidate’s name, biographical information, and the information required by Section 1.2 of our By-laws. Recommendations should be sent to c/o Corporate Secretary, Bright Horizons Family Solutions Inc., 2 Wells Avenue, Newton, MA 02459. The Nominating and Corporate Governance Committee evaluates candidates for the position of director recommended by shareholders or others in the same manner as candidates from other sources. The Nominating and Corporate Governance Committee will determine whether to interview any candidates and may seek additional information about candidates from third-party sources.

 

						2021 Proxy Statement		|		21

Majority Voting

The Company’s By-laws include a majority voting requirement for the election of directors at uncontested meetings of shareholders to increase our Board’s accountability to our shareholders. Under the Company’s majority voting standard, a nominee for director in an uncontested election will be elected to the Board if the votes cast “for” such nominee’s election exceed the votes cast “against” such nominee’s election (disregarding abstentions and broker non-votes). Directors are elected by plurality vote in a contested election of directors (as defined in our By-laws). Our By-laws provide that a proposed nominee must deliver an irrevocable letter of resignation as a director, effective upon such person’s failure to receive the required vote for reelection at the next meeting of shareholders at which such person faces reelection. To the extent that an irrevocable resignation has not been previously received by the Board from an incumbent director, in an election that is not a contested election, if any incumbent director nominated for reelection fails to receive a majority of the votes cast in an election, such director will promptly tender his or her resignation to the Board. An irrevocable resignation shall become effective on (1) that person not receiving a majority of the votes cast in an election that is not a contested election of directors, and (2) acceptance of that resignation by the Board in accordance with Section 2.2 of our By-laws. The Nominating and Corporate Governance Committee shall make a recommendation to the Board as to whether to accept or reject an incumbent director’s resignation, or whether other action should be taken. The Board shall act on the resignation, taking into account the committee’s recommendation, and publicly disclose its decision regarding the resignation and the rationale behind the decision within 90 days following certification of the election results. The Nominating and Corporate Governance Committee in making its recommendation and the Board in making its decision each may consider any factors and other information that they consider appropriate and relevant. If the Board does not accept the resignation, the incumbent director will continue to serve until the next annual meeting and until his or her successor is duly elected, or earlier resignation or removal.

 

Policies Relating to Directors and Limits on Board Service

It is our policy that directors, who are also employees of the Company shall offer their resignation from the Board at the same time they retire from employment with the Company. In addition, it is our policy that directors who retire or otherwise change from the principal occupation or background association they held when they were originally invited to the Board should provide notice to the Board and offer to resign. The Board does not believe that such directors should necessarily leave the Board, but it is our policy that there should be an opportunity for the Board to review the continued appropriateness of such director’s membership under these circumstances.

We believe that no director should serve on more than four boards of public companies (including our Board), provided, however, that current directors serving on more than four boards of public companies at the time this provision was adopted may continue to serve on those boards until such time as they meet this requirement. We believe that our Chief Executive Officer should serve on no more than two boards of public companies (including our Board).

Pursuant to our Audit Committee charter and NYSE Rules, members may serve on no more than three separate public company audit committees simultaneously without prior review and determination by the Board that such simultaneous service would not impair the ability of such member to effectively serve on the Company’s Audit Committee. Mr. Alleva, a retired partner at PwC, currently serves on the audit committees of four public companies (including Bright Horizons). The Board, after due consideration of the facts and in light of Mr. Alleva’s dedication to, and stewardship of, the Company’s Audit Committee, has determined that Mr. Alleva’s service on the audit committees of four public companies would not impair his ability to effectively serve on the Company’s Audit Committee.

 

Director Education

Our director orientation and continuing education program consists of visits to Bright Horizons centers, background material on the Company, education regarding our Code of Business Conduct and Ethics and other policies and practices relevant to our business and operations, and meetings with and presentations by senior management. In addition, we provide updates on relevant topics of interest to the Board. We also encourage directors to attend director education programs sponsored by various educational institutions and all Board members receive a National Association of Corporate Directors membership.

 

22		|		Bright Horizons

Code of Business Conduct and Ethics

Bright Horizons demands integrity and is committed to upholding high ethical standards. We have a written Code of Business Conduct and Ethics Applicable to all Directors, Officers and Employees and a written Code of Ethics for Senior Managers and Financial Management Team, which are designed to ensure that our business is conducted with integrity. These codes cover, among other things, professional conduct, conflicts of interest, accurate recordkeeping and reporting, public communications and the protection of confidential information, as well as adherence to laws and regulations applicable to the conduct of our business. Copies of these codes can be found under “Corporate Governance—Governance Documents” in the Investor Relations section of our website, www.brighthorizons.com. We intend to disclose any future amendments to, or waivers from, these codes of ethics for Bright Horizons executive officers within four business days of the waiver or amendment through a website posting or by filing a Current Report on Form 8-K with the SEC.

 

Online Availability of Information and Governance Documents

The current versions of our Corporate Governance Guidelines, Code of Business Conduct and Ethics Applicable to all Directors, Officers and Employees, Code of Ethics for Senior Managers and Financial Management Team and charters for our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee are available under “Corporate Governance—Governance Documents” in the Investor Relations section of our website, www.brighthorizons.com. These materials are also available in print free of charge to shareholders upon written request to c/o Corporate Secretary, Bright Horizons Family Solutions Inc., 2 Wells Avenue, Newton, Massachusetts 02459.

 

						2021 Proxy Statement		|		23

CORPORATE RESPONSIBILITY AND ESG

 

 

 

Bright Horizons has been changing the way employees and their families work for over 30 years. Back in 1986, we saw that access to high quality child care was an obstacle for working parents. Partnering with employers to provide on-site child care centers became just one way we responded to help whole organizations work more effectively. Today we are a leading provider of high-quality child care and early education, dependent care, and workforce education services that are designed to help better integrate work and family life as well as grow careers—tools used by more than 1,300 of the world’s top employers and by hundreds of thousands of working parents and learners.

				To deliver results, we put our HEART in everything we do. Our HEART Principles—HONESTY, EXCELLENCE, ACCOUNTABILITY, RESPECT, and TEAMWORK are the core tenets of our mission and our culture. Our corporate and social responsibility and philanthropic efforts are aligned with our mission and values, supporting initiatives that combine our knowledge, experience and compassion—both as an organization and as individuals. These efforts and principles are embedded throughout our operations, and our unique business model affords us the opportunity to not only build a sustainable long-term organization, but to also have a significant impact on the children, families and adult learners we work with and in the communities where we live.

Social Sustainability

Bright Horizons strives to be a positive influence in our communities by living up to the highest ethical standards, pursuing socially-minded business practices, providing rewarding career and employment opportunities, delivering high-quality child care and early education, and giving back to our communities in concert with our employees’ individual efforts. During 2020 and 2021, together, we:

 

•

Supported the communities in which we work and live. Bright Horizons proudly stands behind our many employees who give their time to non-profit organizations, awarding grants to these organizations in recognition of volunteer work our employees do to give back to their communities.

 

•

Continued to work alongside our employees to support the Bright Horizons Foundation for Children® and its mission to brighten the lives of children, youth and families experiencing homelessness and other crisis by bringing Bright Spaces® to children and families in homeless shelters through employee volunteer days, sponsoring Brightening Lives activities and employee-driven fundraising events.

 

•

Responded to the COVID-19 pandemic by partnering with #FirstRespondersFirst (an organization conceived by the Harvard T.H. Chan School of Public Health, Thrive Global, and the CAA Foundation) to support healthcare workers on the front lines of the COVID-19 pandemic by utilizing our facilities, our employees and our expertise to operate child care center hubs to provide free high-quality, safe and nurturing care for the children of first responders. During the height of the pandemic, the partnership operated eight hub centers around the United States.

Employee Sustainability and Development

Our business is about serving people. Our success depends on attracting, developing and retaining talented and highly qualified employees. We are continually investing in resources and creating programs to drive diversity, equity and inclusion, to provide fair and competitive pay and benefits to support our employees’ well-being, and to foster personal growth and career development opportunities. We endeavor to create an environment that rewards performance, enhances our culture and employee experience, and retains and engages our talent. A few notable programs and initiatives are summarized below:

 

•

Horizons Teacher Degree Program. A key program offering for Bright Horizons is our Horizons Teacher Degree Program, which embodies our culture and mission—that career development is a great way to both support our people and reach our Company’s talent goals. The program, which is a first-of-its-kind offering in

 

24		|		Bright Horizons

the early education field, removes financial obstacles for employees pursing a degree, including those posed by traditional tuition reimbursement programs, by allowing employees to earn an associate or bachelor’s degree in early childhood education at no-cost—participants do not have to pay for any expenses out of pocket, including tuition, fees and books. Since its inception in 2018, over 2,000 teachers have enrolled and we celebrated our first graduating class in December 2020.

 

•

Wellness Initiatives. We provide wellness initiatives to our employees with benefits relating to nutrition, stress management, financial well-being, mental health, work-life balance and an Employee Assistance Program.

 

•

Professional Development. We invest in our employees’ career growth. Employee training and development opportunities are critical to our success as we believe they drive our employee’s growth, help develop leaders within our organization (through our leadership institute) and support our delivery of quality services to our clients and the families and learners we serve. We provide a robust, ongoing employee training and career development program through our online training university, which includes online and offline components and interactive courses on topics such as management development, early education and leadership skills. For our teachers, we support their development through a number of programs and resources, including an extensive training curriculum and, in the United States, our eCDA (child development associate) program to enable us to deliver high quality services.

 

•

Employee Engagement. Retaining and developing our workforce starts with our employees. For 20 years, Bright Horizons has listened to its employees through our Employee Experience Survey. Hearing directly from our employees help us to understand the employee experience, including evolving priorities related to workplace environment, employee relations, pay and benefits, flexibility, and career growth opportunities, all of which we see as critical to our mission to be and remain an employer of choice and a great place to work. During 2020, we also conducted a series of pulse surveys to more frequently connect with employees to ensure that we continued to meet their needs and focus on their priorities in light of the impact of COVID-19 on our workforce.

For more information our benefits and total rewards, please see the Company’s 2020 Annual Report.

Our Response to COVID-19

In response to COVID-19, our primary focus and attention has been on the well-being and health and safety of the children and families we serve, the teachers and staff at our centers and all of our employees.

 

•

Health and Safety. Employee safety and well-being is of paramount importance to us in any year and was of particular focus in fiscal 2020. At the outset of the pandemic, we created a cross-functional team to coordinate the Company’s response to COVID-19 and we instituted enhanced health and safety protocols based on guidance from the Centers for Disease Control, state and local public authorities, and our partnership with medical professionals that specialize in pediatric infectious diseases. Our enhanced protocols currently include reduced group sizes, daily health screenings, social distancing procedures for pick-up and drop-off, the use of face masks by staff, and intensified hygiene, cleaning and disinfection protocols. We have dedicated health and safety personnel and a Vice President of Global Safety as well as a centralized COVID-19 response team that support our centers and other operations to ensure compliance with our policy requirements and practices.

 

•

Support for our Employees. For our center-based employees, during the early stages of the pandemic and the phased re-opening of our centers in mid-to-late 2020, we provided direct supports including enhanced pay, free grocery staples and household necessities delivered to center staff at work, expanded back-up care benefits, and trainings on our COVID-19 health and safety protocols, and for all employees, we have provided enhanced paid time-off for those with COVID-19 and promoted telehealth benefits, including virtual mental health sessions. In connection with the temporary center closures in the U.S. and the resulting furlough of our teachers and staff, we offered continued support and resources, including health insurance coverage and ongoing training opportunities, including our Horizons Teacher Degree Program.

 

•

Impact to Executive Compensation. As further discussed in the “Compensation Discussion and Analysis” section of this Proxy Statement, the Company, our executives and the Board took steps to reduce executive and Board compensation while a majority of the Bright Horizons centers temporarily closed. Our executive officers and Board believe this was the right step to take during such uncertain times.

Governance and Ethical Sustainability

Ethical behavior is a core tenet of our Company’s values. The foundation of our culture is our HEART principles, through which we encourage Honesty, Excellence, Accountability, Respect, and Teamwork. We operate a robust ethics and compliance program, which includes regular employee training, and our Code of Business

 

						2021 Proxy Statement		|		25

Conduct and Code of Ethics are designed to promote ethical behavior and integrity throughout our business—across all locations and job functions. Additionally, our Nominating and Corporate Governance Committee monitors and reviews the Company’s ESG strategy and assists in overseeing the Company’s human capital management strategy and initiatives. Our other governance highlights are discussed elsewhere in this Proxy Statement.

Diversity, Equity and Inclusion

At Bright Horizons, diversity, equity and inclusion are core priorities that we believe are critical to our long-term success by improving the work we do, the services we provide and, ultimately, the value we create. We are an organization made up of employees, children and families from many cultures, backgrounds and experiences and are committed to a workplace where all employees feel welcome, comfortable and a sense of belonging. As an organization built around people, we believe diversity, equity and inclusion enhances all our offerings and service lines and the education we deliver daily to children and families.

Our Vision for Inclusion. Our Inclusion Vision in which we are committed to creating inclusive environments where everyone has a sense of belonging and has the opportunity to contribute and thrive in meaningful and impactful ways guides and defines our diversity, equity and inclusion initiatives. To bring this vision to life, we leverage the groups below to facilitate interactive activities, ignite/engage in bold conversations, and lead diversity awareness and inclusive leadership trainings, webinars and discussion groups—all with an aim to aid us in creating a culture where everyone’s unique differences are celebrated and valued:

 

•

Inclusion Steering Committee—comprised of senior leaders and executive officers who inform the strategy for Bright Horizons’ overall diversity, equity and inclusion initiatives.

 

•

Inclusion Council—includes representatives from Bright Horizons business units and functional departments, executive members, and co-chairs of our eight Employee Advisory Groups, and is guided by the Inclusion Steering Committee aimed at creating accountability throughout the organization.

 

•

Employee Advisory Groups—voluntary, company-sponsored internal associations dedicated to fostering a diverse and inclusive work environment within the context of Bright Horizons’ mission, values, goals, business practices, and objectives:

 

•   African Heritage		•   Differently Abled
•   Asian and Pacific Islander		•   Working Parents
•   Hispanic Latino		•   Professional Women
•   LGBTQ+		•   Men in Early Care and Education

 

•

Board of Directors’ Oversight—our Board provides oversight and guidance with respect to our Company policies and practices related to human capital management, including diversity, equity and inclusion initiatives.

Recent Initiatives. We are focused on taking action to make real change, not for a moment in time, but for the long-term and, in 2020, launched a number of initiatives, including:

 

•

Focus on Hiring—we aim to hire ethnically and racially diverse senior leaders and overall workforce.

 

•

Partnerships with HBCUs—we aim to create meaningful partnerships with Historically Black Colleges and Universities (“HBCUs”), by adding HBCUs to our Horizons Teacher Degree Program and our EdAssist Education Network, and also working in partnership with these schools to aid in recruiting and leadership development.

 

•

Focus on Education and Training—we host trainings on Diversity Awareness, Inclusive Leadership and Confronting Unconscious Bias and are currently developing on-demand anti-racism and inclusion trainings to roll out to employees in fiscal 2021 and beyond.

 

•

Race in America Series—in partnership with our African Heritage Employee Advisory Group, we sponsored a discussion series on “Race in America” to provide a constructive forum for employees to share their voice and concerns.

 

26		|		Bright Horizons

Our Award Winning Culture. We are honored and proud to have a long track record of being named an employer of choice. Following are some of our most recent awards related to culture, diversity and inclusion that we believe are a product of the strong culture we have built at Bright Horizons:

 

✓   Forbes’ 2021 Best Employers for Diversity		✓   Bloomberg’s 2021 Gender Equality Index
✓   Human Rights Campaign Foundation’s Corporate Equality Index 2021		✓   U.K.’s “Best Workplaces for Women 2020” by the Great Place to Work Institute
✓   Boston Business Journal’s 2020 Best Place to Work		✓   Denver Post 2020 Top Workplaces in Colorado
“100 Best Companies to Work For” by FORTUNE Magazine Awarded 20 times—most recently in 2021
“Best Workplaces” in the United Kingdom by the Great Place to Work Institute Awarded 15 times—most recently in 2020
“Best Workplaces” in the Netherlands by the Great Place to Work Institute Awarded 7 times—most recently in 2020

 

						2021 Proxy Statement		|		27

TRANSACTIONS WITH RELATED PERSONS

 

 

In fiscal 2020, we did not enter into any reportable related person transaction, nor is any related person transaction currently proposed, in which any of our directors or executive officers has a direct or indirect material interest. As of December 31, 2020, we had more than 1,300 client relationships with employers across a diverse array of industries and, from time to time, we may provide service offerings to certain of our 5% or greater shareholders. Any contracts and transactions with such shareholders are consummated in the ordinary course of business on an arm’s-length basis.

 

Policies and Procedures for Related Party Transactions

The Board has adopted a written policy for the review and approval or ratification of transactions involving related persons. “Related Persons” consist of any person who is or was (since the beginning of the fiscal year) a director, nominee for director or executive officer, any greater than 5% shareholder and the immediate family members of any of those persons. The Audit Committee is responsible for administering this policy.

Transactions covered by the policy consist of any transaction, arrangement or relationship (including any indebtedness or guarantee of indebtedness) or any series of similar transactions, arrangements, or relationships, or currently proposed transaction, in which (1) the aggregate amount exceeds $120,000 with respect to any fiscal year, (2) the Company is a participant, and (3) any Related Person has or will have a direct or indirect material interest, other than solely as a result of being a director or a less than 10% beneficial owner of another entity (an “Interested Transaction”). Under the policy, the Audit Committee and the Board have reviewed and determined that certain categories of Interested Transactions are deemed to be pre-approved or ratified by the Board even if the amounts will exceed $120,000. These are: (a) the employment and compensation arrangements required to be reported in the proxy statement; (b) director compensation required to be reported in the proxy statement; (c) any transaction with another company if the aggregate amount involved does not exceed the greater of $1,000,000 or 2% of that company’s total revenues, or any transaction where the Company is indebted to another company if the total amount of indebtedness does not exceed 1% of that company’s total consolidated assets (in both cases, the pre-approval applies if the Related Person’s only relationship is as an employee (other than executive officer), director or beneficial owner of less than 10% of the other company’s shares); (d) competitively bid or regulated public utility services transactions; (e) transactions involving trustee-type services; and (f) transactions where the Related Person’s interest arises solely from the ownership of our common stock and all common shareholders received the same benefit on a pro rata basis.

The Audit Committee Chair has the authority to pre-approve or ratify any Interested Transaction with a Related Person in which the aggregate amount involved is expected to be less than $500,000. In determining whether to approve or ratify an Interested Transaction, the Audit Committee and the committee Chair, as applicable, may take into account such factors as they deem appropriate, which may include whether the Interested Transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the related person’s interest in the transaction.

 

28		|		Bright Horizons

STOCK OWNERSHIP INFORMATION

 

 

The following table sets forth information regarding the beneficial ownership of our common stock as of April 26, 2021 by:

 

•

each person or group of affiliated persons known by us to be the beneficial owner of more than 5% of our common stock;

 

•

each of our named executive officers, directors and director nominees; and

 

•

all of our directors and executive officers as a group.

The percentage ownership information shown in the table below is based upon 61,029,075 shares of common stock outstanding as of April 26, 2021.

Information with respect to beneficial ownership has been furnished by each director, officer or beneficial owner of more than 5% of our common stock. We have determined beneficial ownership in accordance with the rules of the SEC. These rules generally attribute beneficial ownership of shares to persons who possess sole or shared voting or investment power with respect to such shares. The information does not necessarily indicate beneficial ownership for any other purpose. Under these rules, the number of shares of common stock deemed outstanding includes shares issuable upon exercise of options or settlement of vested restricted stock units and securities held by the respective person or group which may be exercised or converted within 60 days after April 26, 2021 as well as shares of unvested restricted stock over which a respective person has voting power. Such shares are deemed to be outstanding and beneficially owned by the person holding those securities for the purpose of computing the percentage ownership of that person or entity, but they are not treated as outstanding for the purpose of computing the percentage ownership of any other person or entity.

Unless otherwise indicated below, the address for each listed director, officer and shareholder is c/o Bright Horizons Family Solutions Inc., 2 Wells Avenue, Newton, Massachusetts 02459. The inclusion in the following table of those shares, however, does not constitute an admission that the named shareholder is a direct or indirect beneficial owner. Unless otherwise indicated and subject to applicable community property laws, to our knowledge, each shareholder named in the following table possesses sole voting and investment power over the shares listed, except for those jointly owned with that person’s spouse.

 

Name		Number of Shares					Percentage
Beneficial holders of 5% or more of our outstanding common stock:
T. Rowe Price Associates, Inc.(1)				7,970,395					13.1	%
The Vanguard Group(2)				5,287,001					8.7	%
BlackRock, Inc.(3)				3,412,686					5.6	%
Capital World Investors(4)				3,213,031					5.3	%
Directors and executive officers:
Mary Lou Burke Afonso(5)				86,760					*
Lawrence M. Alleva(6)				6,985					*
Julie Atkinson(7)				4,347					*
Maribeth Bearfield(8)				12,050					*
Joshua Bekenstein(9)				5,747					*
Elizabeth J. Boland(10)				112,297					*
John G. Casagrande(11)				37,587					*
Jordan Hitch(12)				5,747					*
Stephen H. Kramer(13)				113,754					*
Dr. Sara Lawrence-Lightfoot(14)				4,747					*
David H. Lissy(15)				249,658					*
Cathy E. Minehan(16)				4,747					*
Laurel J. Richie(17)				1,738					*
Mary Ann Tocio(18)				100,394					*
All Directors, Nominees and Executive Officers as a Group (14 persons)(19)				746,558					1.2	%

 

(*)	Indicates less than 1%.

 

						2021 Proxy Statement		|		29

(1)

The information regarding T. Rowe Price Entities (as defined below) is based solely on information included in the Schedule 13G/A filed by them with the SEC on February 16, 2021. T. Rowe Price Entities reported that T. Rowe Price Associates, Inc. (“T. Rowe Price Associates”) has sole voting power with respect to 2,012,907 shares of common stock and sole dispositive power with respect to 7,970,395 shares of common stock and that T. Rowe Price New Horizons Fund, Inc. (together with T. Rowe Price Associates, the “T. Rowe Price Entities”) has sole voting power with respect to 4,238,386 shares of common stock. The principal business address of the T. Rowe Price Entities is 100 E. Pratt Street, Baltimore, MD 21202.

(2)

The information regarding The Vanguard Group (“Vanguard”) is based solely on information included in the Schedule 13G/A filed by Vanguard with the SEC on February 10, 2021. Vanguard reported that it has sole voting power with respect to 0 shares of common stock, shared voting power with respect to 45,588 shares of common stock, sole dispositive power with respect to 5,192,807 shares of common stock, and shared dispositive power with respect to 94,194 shares of common stock. The principal business address of Vanguard is 100 Vanguard Blvd., Malvern, PA 19355.

(3)

The information regarding BlackRock, Inc. (“BlackRock”) is based solely on information included in the Schedule 13G filed by BlackRock with the SEC on February 2, 2021. BlackRock reported that it has sole voting power with respect to 3,059,820 shares of common stock and sole dispositive power with respect to 3,412,686 shares of common stock. The principal business address of BlackRock is 55 East 52nd Street, New York, NY 10055.

(4)

The information regarding Capital World Investors (“CWI”) is based solely on information included in the Schedule 13G filed by CWI with the SEC on February 16, 2021. CWI reported that it has sole voting power with respect to 3,213,031 shares of common stock and sole dispositive power with respect to 3,213,031 shares of common stock. The principal business address of CWI is 333 South Hope Street, 55th Fl, Los Angeles, CA 90071.

(5)	Includes 2,640 shares of common stock held by Ms. Burke Afonso’s immediate family members, 49,394 shares of common stock that can be acquired upon the exercise of outstanding options and 15,410 shares of unvested restricted stock awards.

(6)	Includes 4,747 shares that can be acquired upon the settlement of vested restricted stock units.

(7)	Includes 2,997 shares that can be acquired upon the settlement of vested restricted stock units.

(8)	Includes 920 shares of common stock that can be acquired upon the exercise of outstanding options and 11,130 shares of unvested restricted stock awards.

(9)	Includes 4,747 shares that can be acquired upon the settlement of vested restricted stock units.

(10)	Includes 7,179 shares of common stock that can be acquired upon the exercise of outstanding options and 35,595 shares of unvested restricted stock awards.

(11)	Includes 200 shares of common stock held by Mr. Casagrande’s immediate family members and 31,676 shares of common stock that can be acquired upon the exercise of outstanding options.

(12)	Includes 4,747 shares that can be acquired upon the settlement of vested restricted stock units.

(13)	Includes 73,100 shares of unvested restricted stock awards.

(14)	Includes 4,747 shares that can be acquired upon the settlement of vested restricted stock units.

(15)

Includes 12,096 shares of common stock held by Irrevocable Trusts for Mr. Lissy’s immediate family members, 4,500 shares of common stock that can be acquired upon the exercise of outstanding options, 21,600 shares of unvested restricted stock awards, 1,202 shares of common stock that can be acquired upon settlement of vested restricted stock units, 7,388 shares of common stock held by David H Lissy 2019 Grantor Retained Annuity Trust, 25,000 shares of common stock held by the David H Lissy 2020 Grantor Retained Annuity Trust and 11,947 shares of common stock held by the Lissy Family Foundation of which Mr. Lissy may be deemed a beneficial owner.

(16)	Includes 4,747 shares that can be acquired upon the settlement of vested restricted stock units.

(17)	Includes 1,738 shares that can be acquired upon the settlement of vested restricted stock units.

(18)	Includes 37,135 shares of common stock that can be acquired upon the exercise of outstanding options and 4,747 shares of common stock that can be acquired upon the settlement of vested restricted stock units

(19)	Includes 130,804 shares of common stock that can be acquired upon the exercise of outstanding options, 156,835 shares of unvested restricted stock awards and 34,419 shares of common stock that can be acquired upon settlement of vested restricted stock units.

 

30		|		Bright Horizons

DELINQUENT SECTION 16(a) REPORTS

 

 

Section 16(a) of the Exchange Act requires our directors, executive officers and holders of more than 10% of our common stock to file reports of holdings and transactions in our common stock and reports of changes in beneficial ownership with the SEC. Specific due dates for these reports have been established and we are required to report any failure to file by such dates during fiscal year 2020. To our knowledge, based on our review of filings made with the SEC and representations made by our directors and executive officers, we believe that all of our directors and executive officers filed on a timely basis all reports under Section 16(a), with the exception of (i) one late Form 4 filing by Maribeth Bearfield with respect to a grant of restricted stock on February 24, 2020, which was subsequently filed with the SEC on March 4, 2020, and (ii) one late Form 4 filing by Mary Ann Tocio with respect to the exercise of stock options on January 11, 2021, which was subsequently filed with the SEC on February 11, 2021.

 

						2021 Proxy Statement		|		31

EXECUTIVE COMPENSATION

 

 

 

Compensation Discussion and Analysis

This discussion describes our compensation philosophy, principles and practices with respect to the compensation of the executive officers listed below (referred to as our named executive officers) for fiscal 2020:

 

Stephen H. Kramer		Chief Executive Officer and President
Elizabeth J. Boland		Chief Financial Officer
Mary Lou Burke Afonso		Chief Operating Officer, North America Center Operations
Maribeth Bearfield		Chief Human Resources Officer
John G. Casagrande		General Counsel and Secretary

Overview of Compensation Program

Our named executive officers’ compensation is determined by the Compensation Committee and is reviewed annually. Our executive compensation program is designed to attract and retain high-quality leadership and incentivize our executive officers and other key employees to achieve company performance goals and strong individual performance over the short- and long-term. Our pay-for-performance approach to executive compensation places a greater emphasis on long-term equity incentive grants than on other forms of compensation, reflecting our focus on long-term value creation and serving to align the interests of our executive officers with those of our shareholders. For example, our annual Equity Choice Plan awards (as defined below), which permit recipients to choose awards of stock options or purchased restricted stock, require an upfront, personal investment by mandating participants who elect purchased restricted stock to pay 50% of the fair market value on the grant date to receive the underlying award.

Fiscal 2020 Financial Performance, COVID-19 Response and Key Company Highlights

We are proud of our fiscal 2020 results and the work performed by the entire Bright Horizons team across the globe given an unprecedented year. We believe that the Company responded well to the challenges and disruptions resulting from the COVID-19 pandemic, quickly adapting to the changing needs of clients, families and children, while remaining focused on our strategic priorities to deliver high quality education and care services, connect across our service lines, extend our impact on new customers and clients, and preserve our strong culture. The challenges we faced highlighted the best of Bright Horizons as our employees rose to meet the moment, with an unwavering commitment to children, families and learners. Our collective response underscored our crisis management capabilities, our critical role in the business continuity plans of our client partners, our leadership in developing and implementing enhanced health and safety protocols, and the value that our unique service offering provides to the families and clients we serve. We remain confident that we have emerged as a stronger and more agile Company and are well positioned to capitalize on the growth opportunities ahead.

2020 Financial Performance: Despite the extensive global business disruption, the Company achieved positive financial results in fiscal 2020:

 

 

2020 Key Operational and Strategic Achievements: In March 2020 as the COVID-19 pandemic spread, we acted quickly by successfully executing a number of operational and strategic actions to strengthen our client partnerships, strengthen our balance sheet and liquidity position and respond to changing market conditions. We believe that our named executive officers were instrumental in helping us achieve these results and manage through an uncertain global market. A number of key financial, operational and strategic actions are included below:

 

•

Took decisive action to temporarily close approximately 850, or 80%, of our centers, while continuing to operate critical health care client and “hub” centers to provide care and support services to the children whose parents worked on the front lines of the pandemic response.

 

32		|		Bright Horizons

•

Implemented a phased re-opening of our temporarily closed centers to align with enrollment demand and care needs. The majority of centers re-opened between June and September 2020, with 90% open as of December 31, 2020.

 

•

Operated a total of 1,014 child care and early education centers in the United States, the United Kingdom, the Netherlands, and India as of December 31, 2020. These centers have the capacity to serve approximately 114,000 children and their families.

 

•

United States: As of December 31, 2020, we had approximately 550 open centers in the United States, and approximately 100 centers remained temporarily closed. During the year ended December 31, 2020, we opened 13 new centers and permanently closed 72 locations where demand and economics had shifted.

 

•

United Kingdom: As of December 31, 2020, our 299 centers in the United Kingdom were open. During the year ended December 31, 2020, we opened 2 new centers and permanently closed 16 locations where demand and economics had shifted.

 

•

Netherlands: As of December 31, 2020, our 62 centers in the Netherlands were open. During the year ended December 31, 2020, we opened 3 new centers.

 

•

Generated new business growth in Back-up Care and Educational Advisory as both segments remained operational for our clients and their employees. Our Back-up Care segment revenue expanded by $92.0 million to $388.3 million, or 31%, and Educational Advisory segment revenue expanded by $12.9 million to $94.5 million, or 15.7%.

 

•

Temporarily suspended share repurchases.

 

•

Amended our credit agreement in April 2020 and May 2020 to increase the borrowing capacity of our revolving credit facility from $225 million to $400 million.

 

•

Raised $249.8 million in net proceeds from the issuance and sale of common stock in April 2020.

 

•

Created a cross-functional team to coordinate the Company’s response to COVID-19.

 

•

Instituted stringent, enhanced health and safety protocols to protect the health and safety of the children, families and staff, such as reduced group sizes, daily health screenings, the use of face masks by our staff, social distancing pick-up and drop-off procedures, and intensified hygiene, cleaning and disinfection protocols.

 

•

Furloughed a significant portion of our employees in proportion to the number of center closures, including center personnel for temporarily closed centers and related support functions in our corporate offices while offering continued support and resources, including health insurance coverage and ongoing training opportunities and our Horizons Teacher Degree Program in the U.S.

 

•

Provided direct supports to our center-based employees during the early stages of the pandemic and the phased re-opening of our centers in mid-to-late 2020, including enhanced pay, free grocery staples and household necessities delivered to center staff at work, expanded back-up care benefits, and trainings on our COVID-19 health and safety protocols; for all employees provided enhanced paid time-off for those with COVID-19 and promoted telehealth benefits, including virtual mental health sessions.

 

•

Reduced discretionary spending and overhead costs, while prioritizing investments that support current operations and deferring nonessential investments to future periods.

 

•

Instituted temporary voluntary reductions in compensation to executive officers and Board members as further discussed below and elsewhere in this Proxy Statement.

 

•

Participated in government support programs, including tax deferrals, tax credits, employee wage support, and child care industry-specific grants.

 

•

Renegotiated payment terms with certain vendors and landlords.

Total Shareholder Return (“TSR”): Despite a volatile year, the Company delivered strong TSR in fiscal 2020 and has outperformed the Russell 3000 Total Return Index and the Russell Midcap Growth Index on a three- and five-year basis as outlined below:

 

		1-Year		3-Year		5-Year
Bright Horizons Family Solutions		15.10%		22.55%		20.96%
Russell 3000 Total Return Index		20.89%		14.49%		15.43%
Russell Midcap Growth Index		35.59%		20.50%		18.66%

 

*Source:

Zach’s Investment Research; Factset

 

						2021 Proxy Statement		|		33

Recognition as an Employer of Choice and Leader in Diversity: We are honored and proud to have a long track record of being named an employer of choice. Following are some of our most recent awards related to culture, diversity and inclusion that we believe are a product of the strong culture we have built at Bright Horizons:

 

✓ Forbes’ 2021 Best Employers for Diversity		✓ Bloomberg’s 2021 Gender Equality Index
✓ Human Rights Campaign Foundation’s Corporate Equality Index 2021		✓ U.K.’s “Best Workplaces for Women 2020” by the Great Place to Work Institute
✓ Boston Business Journal’s 2020 Best Place to Work		✓ Denver Post 2020 Top Workplaces in Colorado
“100 Best Companies to Work For” by FORTUNE Magazine Awarded 20 times—most recently in 2021
“Best Workplaces” in the United Kingdom by the Great Place to Work Institute Awarded 15 times—most recently in 2020
“Best Workplaces” in the Netherlands by the Great Place to Work Institute Awarded 7 times—most recently in 2020

For additional information on the Company’s fiscal 2020 performance, please see our 2020 Annual Report as filed with the SEC on March 1, 2021.

Fiscal 2020 Compensation Impacts Resulting from COVID-19

The fiscal 2020 compensation program described in this Proxy Statement was established before the onset of the COVID-19 pandemic and its impacts on the Company. For instance, the 2020 Equity Choice Plan awards recognize performance in fiscal 2019 and were granted in February 2020. Additionally, fiscal 2020 salaries reflect a pre-COVID-19 economic environment. After the onset of the pandemic, the Compensation Committee together with the Company and its executive officers considered such impacts throughout the year and worked to align 2020 executive compensation with the current economic environment resulting in the following actions:

 

•

Voluntary Forfeiture of Salary. As a result of the impact of COVID-19 on our business and our employees, our executive officers agreed to voluntary reductions in their salaries from March 30, 2020 until the earlier of December 31, 2020 or such time as a majority of the Bright Horizons centers temporarily closed as a result of COVID-19 reopened. Mr. Kramer voluntarily elected to forgo 100% of his salary and Mses. Bearfield, Boland and Burke Afonso and Mr. Casagrande each voluntarily elected to reduce their salaries by 25%. As of August 31, 2020, a majority of Bright Horizons centers had reopened and, accordingly, executive salaries were reinstated.

 

•

Zero Payout for Corporate Performance Component of 2020 Annual Bonus. The Compensation Committee established corporate performance targets measured by Adjusted EBITDA(1) and Adjusted EPS(1) (each defined below) for the 2020 annual cash bonus program. The Company’s overall financial performance in 2020, as measured by Adjusted EBITDA and Adjusted EPS, resulted in a weighted average performance achievement of 0%. As the fiscal 2020 corporate performance targets were not achieved, there was zero payout for the portion of the 2020 annual bonus tied to corporate performance.

 

•

No Discretionary Adjustments to Annual Bonus Opportunity. The Compensation Committee elected to not adjust the amount that each named executive officer could earn with respect to his or her annual cash bonus based on other factors deemed appropriate as a result of COVID-19.

 

•

No Resetting of Corporate Fiscal 2020 Performance Targets. The Compensation Committee elected not to reset, adjust or modify the corporate performance targets for fiscal 2020 for the Company’s annual cash bonus plan, notwithstanding the unanticipated and significant impact of the COVID-19 pandemic had on our business and operations.

Compensation Decisions for Fiscal 2021

In light of the continued uncertainty resulting from the ongoing COVID-19 pandemic, and given that the duration and scope of the ongoing disruption on the Company’s business cannot be predicted and is affected by

 

(1)

Adjusted EBITDA and Adjusted EPS are financial measures that are not calculated in accordance with generally accepted accounting principles in the United States, which commonly are referred to as “non-GAAP measures.” Please refer to footnote (1) on page 38 for more information regarding these non-GAAP measures.

 

34		|		Bright Horizons

many interdependent variables and decisions by government authorities and our client partners, as well as demand, economic trends, the adoption and effectiveness of a vaccine, and developments in the persistence and treatment of COVID-19, the Compensation Committee reviewed the overall fiscal 2021 compensation program and approved the following changes to reflect this continuously changing environment:

 

•

The Compensation Committee sets achievement of annual cash bonus awards based on: (i) corporate performance goals (50% weighting) and (ii) individual goals (50% weighting). For fiscal 2021, the Compensation Committee expanded the range of bonus payout levels applicable to the 50% portion of the award tied to corporate performance. Based on achievement within certain performance bands measured as growth over forecasted FY 2020 performance, bonus payouts may range from 0-100% (subject to a sliding scale increase for overperformance subject to a 3x cap on the maximum payout). This banded payout scale is aimed to provide flexibility and incentivize the named executive officers, while remaining appropriately rigorous with challenging targets.

 

•

For the fiscal 2021 Equity Choice Plan awards, the Compensation Committee provided for a one-time 50% increase of the target incentive compensation value (reflected as a percentage of annual salary) to incentivize our named executive officers, encourage retention and promote a longer-term strategic view. Our Equity Choice Plan awards include certain provisions that align the interests of our executive officers with those of our shareholders such as a three-year cliff vesting schedule for purchased restricted stock and a five-year vesting schedule (with a three-year cliff) for options.

 

•

Introduced “Execution on Diversity and Inclusion Initiatives” as an individual goal for the Company’s 2021 annual cash bonus program.

 

•

Salaries and total bonus eligibility generally remained consistent with 2020 levels.

Compensation and Governance Best Practices

Our executive compensation program includes a number of compensation practices intended to promote good corporate governance and align the interests of management with those of our shareholders:

 

What We Do:						What We Don’t Do:
☑		Limit incentive compensation—a 3x cap on the maximum payout of the portion of annual cash bonuses tied to Company performance.				☒		No tax gross-ups—we do not provide tax gross-ups to our executive officers.
☑		Maintain stock ownership guidelines—we have robust stock ownership guidelines for directors, our Chief Executive Officer and our other named executive officers.				☒		No repricing of options—we do not allow repricing of underwater stock options unless approved by our shareholders.
☑		Set challenging performance goals—we set rigorous corporate performance targets that we believe motivate our executives to deliver value to our shareholders.				☒		No defined benefit pension—we do not maintain a defined benefit pension plan for our executive officers.
☑		Tie incentive compensation to achievement of financial performance metrics—we disclose the financial performance metrics used in our incentive bonuses and maintain a pay mix that is weighted to performance-based compensation.				☒		Restrictions on Dividends and Dividend Equivalents—our Equity Plan prohibits participants from receiving current dividends that are paid before the underlying award vests and is paid.
☑		Minimum vesting requirement—awards granted under the Equity Plan have a one year minimum vesting requirement (subject to a 5% carve-out).				☒		Do not incentivize excessive risk taking—we annually assess our compensation program to mitigate compensation-related risks.
☑		Clawback policy—we maintain a clawback policy covering performance-based cash and equity compensation for current and former executive officers (including all named executive officers).				☒		Limited perks—we provide only modest perquisites to our executive officers and most benefits are available to all eligible employees.
☑		Limits on non-employee director compensation—our Equity Plan contains a separate limit on the value of equity awards and cash fees that may be awarded annually to non-employee directors.				☒		Anti-hedging and anti-pledging policy—hedging and pledging transactions are strictly prohibited under our Amended and Restated Insider Trading Policy.

Compensation Philosophy, Objectives, and Process

Our compensation philosophy centers on:

 

•

Pay for Performance: Compensation should be tied to the achievement of financial targets and operating and strategic goals.

 

•

Equity Ownership: A significant part of our compensation program is in the form of equity-based awards. These awards serve to align the interests of our executive officers with those of our shareholders, encourage long-term retention and incentivize long-term value creation.

 

						2021 Proxy Statement		|		35