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:

 

☐		Preliminary Proxy Statement
☐		Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
☒		Definitive Proxy Statement
☐		Definitive Additional Materials
☐		Soliciting Material Pursuant to 240.14a-12

HILTON GRAND VACATIONS INC.

(Name of Registrant as Specified In Its Charter)

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

Payment of Filing Fee (Check the appropriate box):

 

☒		No fee required.
☐		Fee paid previously with preliminary materials.
☐		Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11

 

 

 

2022 Proxy Statement

Notice of Annual Meeting of Stockholders

Wednesday, May 4, 2022

8:30 a.m., Eastern Time

Orlando, Florida

March 22, 2022

Dear Fellow Stockholder:

We are pleased to invite you to the 2022 Annual Meeting of Stockholders of Hilton Grand Vacations Inc. The Annual Meeting will be held on Wednesday, May 4, 2022 at 8:30 a.m., Eastern Time at the Waldorf Astoria Orlando, Broadway & Carnegie Meeting Rooms, 14200 Bonnet Creek Resort Lane, Orlando, Florida 32821.

At the Annual Meeting, stockholders will be considering nine Director nominees for election to our Board of Directors, including two directors who have been appointed by affiliates of Apollo Global Management Inc. (“Apollo”) as part of the arrangement we entered into with Apollo in connection with our August 2021 acquisition of Diamond Resorts International Inc. (“Diamond”). We encourage you to review the qualifications and experience of the Director nominees beginning on page 6 of the attached Proxy Statement. In addition to the election of directors, stockholders will also be considering the ratification of the appointment of Ernst & Young LLP as independent auditors of the Company for the 2022 fiscal year and a non-binding advisory vote to approve the compensation of our named executive officers.

Stockholder accountability is of paramount importance to our Board of Directors and our senior leadership. It is essential to our success. Since we became an independent publicly-traded company, we have actively used our stockholder engagement program to receive constructive views from our stockholders. We listen carefully to your viewpoints and take them into consideration in the boardroom and in the strategic decision-making of our senior leadership. Additional information about our stockholder engagement can be found in the Proxy Statement on page 5.

In addition, we believe in being a responsible corporate citizen and have continued our efforts to operate in a sustainable and socially responsible manner. We have implemented a number of programs to reduce our environmental impact, serve the communities in which we operate, and create an inclusive and productive workplace for our employees. We took meaningful measures to protect our team members, owners and guests from the impact and risks posed by the COVID-19 pandemic. You can read more about our corporate social responsibility program on page 12.

Your vote is important to us. Whether you own a few shares or many, it is important that your views are represented and your shares are counted at the Annual Meeting. Voting instructions can be found in the Proxy Statement on page 2 and in the Question and Answer section that begins on page 71. Voting instructions are also provided in the Notice Regarding Internet Availability of Proxy Materials that was mailed or sent to stockholders via electronic delivery on or about March 22, 2022 and discussed on page 4 of the Proxy Statement.

Thank you for the confidence that you have placed in us. We are excited about the Company’s prospects for 2022 and beyond.

Sincerely,

 

Leonard A. Potter		Mark D. Wang
Chairman of the Board of Directors		President and Chief Executive Officer

 

Hilton Grand Vacations				2022 PROXY STATEMENT

HILTON GRAND VACATIONS INC.

NOTICE OF 2022 ANNUAL MEETING OF STOCKHOLDERS

We are pleased to invite you to join our Board of Directors and senior leadership at Hilton Grand Vacations Inc.’s 2022 Annual Meeting of Stockholders (the “Annual Meeting”).

 

WHEN:		May 4, 2022, 8:30 a.m., Eastern Time
WHERE:		The Waldorf Astoria Orlando, Broadway & Carnegie Meeting Rooms, 14200 Bonnet Creek Resort Lane, Orlando, Florida 32821

ITEMS OF BUSINESS

 

1.

To elect the nine (9) Director nominees named in the accompanying Proxy Statement, to serve until the annual meeting of stockholders in 2023.

 

2.

To ratify the appointment of Ernst & Young LLP as independent auditors of the Company for the 2022 fiscal year.

 

3.

To hold a non-binding advisory vote to approve the compensation of our named executive officers.

 

4.

To transact such other business as may properly come before the Annual Meeting and any postponements or adjournments thereof.

RECORD DATE

The Board of Directors set March 11, 2022 as the record date for the meeting. This means that our stockholders as of the close of business on that date are entitled to receive this notice of the Annual Meeting and vote at the meeting and any adjournments or postponements of the meeting. On the record date, there were 120,127,873 shares of Hilton Grand Vacations Inc. common stock issued and outstanding and entitled to vote at the Annual Meeting. A list of stockholders eligible to vote at the Annual Meeting is available at our corporate offices in Orlando, Florida.

 

By Order of the Board of Directors,

Charles R. Corbin General Counsel and Secretary

 

Hilton Grand Vacations				2022 PROXY STATEMENT

Your Vote is Important

Please vote as promptly as possible online or by telephone, or by signing, dating and returning the proxy card or voting instructions form mailed to those who receive paper copies of the proxy materials. All properly executed and timely received proxy cards and voting instruction forms, and all properly completed proxies and voting instructions submitted online or by telephone will be voted at the Annual Meeting in accordance with the directions given by stockholders, unless revoked prior to completion of voting at the Annual Meeting.

 

Hilton Grand Vacations				2022 PROXY STATEMENT

Table of Contents

 

PROXY STATEMENT			1
ROADMAP OF VOTING MATTERS			1
SUMMARY OF VOTING INFORMATION			2
IMPORTANT DEADLINES			2
HOW TO REVOKE A PROXY AND CHANGE YOUR VOTE			3
NOTICE REGARDING INTERNET AVAILABILITY OF PROXY MATERIALS			4
STOCKHOLDER ENGAGEMENT			5
PROPOSAL NO. 1: ELECTION OF DIRECTORS			6
NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS IN 2022			6
CORPORATE GOVERNANCE AND BOARD MATTERS			11
BOARD SKILLS AND QUALIFICATIONS			11
OUR ENVIRONMENTAL, SOCIAL AND GOVERNANCE PRACTICES			12
DIRECTOR INDEPENDENCE AND INDEPENDENCE DETERMINATIONS			15
BOARD STRUCTURE			16
BOARD COMMITTEES			16
COMMITTEE MEMBERSHIP AND MEETINGS			16
AUDIT COMMITTEE			17
COMPENSATION COMMITTEE			18
NOMINATING AND CORPORATE GOVERNANCE COMMITTEE			19
OVERSIGHT OF RISK MANAGEMENT			19
BOARD’S ROLE IN OVERSEEING CYBER RISK			20
EXECUTIVE SESSIONS			20
BOARD AND COMMITTEE EVALUATIONS			20
CORPORATE GOVERNANCE GUIDELINES AND COMMITTEE CHARTERS			20
CODE OF CONDUCT			21
DIRECTOR NOMINATION PROCESS			21
COMMUNICATIONS WITH THE BOARD			22
COMPENSATION OF DIRECTORS			22
COMPENSATION PROGRAM			22
DIRECTOR COMPENSATION FOR 2021			23
INFORMATION ABOUT OUR EXECUTIVE OFFICERS AND OTHER SENIOR OFFICERS			25
PROPOSAL NO. 2: RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS OF THE COMPANY FOR THE 2022 FISCAL YEAR			28
AUDIT AND NON-AUDIT FEES			28
PROPOSAL NO. 3: NON-BINDING ADVISORY VOTE ON EXECUTIVE COMPENSATION			30
REPORT OF THE AUDIT COMMITTEE			31
REPORT OF THE COMPENSATION COMMITTEE			32
COMPENSATION DISCUSSION AND ANALYSIS (“CD&A”)			33
OUR NAMED EXECUTIVE OFFICERS			33
EXECUTIVE SUMMARY			33
2021 COMPANY PERFORMANCE AND PAY RESULTS			35
2021 EXECUTIVE COMPENSATION DESIGN AND DECISIONS			36
2022 EXECUTIVE COMPENSATION HIGHLIGHTS			49
AGREEMENTS WITH EXECUTIVE OFFICERS			50
EXECUTIVE COMPENSATION			52
SUMMARY COMPENSATION TABLE			52
2021 GRANTS OF PLAN-BASED AWARDS			54
OUTSTANDING EQUITY AWARDS AT 2021 FISCAL YEAR-END			56

 

Hilton Grand Vacations		i		2022 PROXY STATEMENT

2021 OPTION EXERCISES AND STOCK VESTED			57
2021 NONQUALIFIED DEFERRED COMPENSATION			58
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL			59
PAY RATIO DISCLOSURE			63
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS			64
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION			65
OWNERSHIP OF SECURITIES			65
TRANSACTIONS WITH RELATED PERSONS			67
STATEMENT OF POLICY REGARDING TRANSACTIONS WITH RELATED PERSONS			67
APOLLO AGREEMENTS			67
COMMERCIAL ARRANGEMENT WITH APOLLO AFFILIATE			70
INDEMNIFICATION AGREEMENTS			70
QUESTIONS AND ANSWERS			71
STOCKHOLDER PROPOSALS FOR THE 2023 ANNUAL MEETING			76
HOUSEHOLDING OF PROXY MATERIALS			77
AVAILABILITY OF ADDITIONAL MATERIALS			77
OTHER BUSINESS			77
APPENDIX A			A-1

 

Hilton Grand Vacations		ii		2022 PROXY STATEMENT

HILTON GRAND VACATIONS INC.

2022 ANNUAL MEETING OF STOCKHOLDERS

PROXY STATEMENT

The Board of Directors (the “Board”) of Hilton Grand Vacations Inc. (the “Company,” “HGV,” “we,” “our” or “us”) is providing you with this Proxy Statement relating to the 2022 Annual Meeting of Stockholders of Hilton Grand Vacations Inc. (the “Annual Meeting”). The Annual Meeting will be held on Wednesday, May 4, 2022, at 8:30 a.m., Eastern Time, at the Waldorf Astoria Orlando, Broadway & Carnegie Meeting Rooms, 14200 Bonnet Creek Resort Lane, Orlando, Florida 32821.

We began mailing a Notice Regarding Internet Availability of Proxy Materials on March 22, 2022 containing instructions on how to access this Proxy Statement and our annual report online. We also began mailing a full set of proxy materials to stockholders who had previously requested delivery of a printed copy of the proxy materials.

Only owners of record of shares of common stock of the Company as of the close of business on March 11, 2022, the record date, are entitled to notice of, and to vote at, the Annual Meeting or at any adjournments or postponements of the meeting. Each owner of record on the record date is entitled to one vote for each share of HGV common stock held by such stockholder. On March 11, 2022, there were 120,127,873 shares of the Company’s common stock issued and outstanding.

The mailing address of our principal office is Hilton Grand Vacations Inc., 6355 MetroWest Boulevard, Suite 180, Orlando, Florida 32835.

ROADMAP OF VOTING MATTERS

 

Stockholders are being asked to vote on the following matters at the Annual Meeting:		Our Board’s Recommendations

Proposal No. 1: Election of Nine (9) Director Nominees		FOR       each nominee
The Board unanimously believes that all of the Director nominees listed in this Proxy Statement have the requisite qualifications to provide effective oversight of our business and management.		Pg. 6
Proposal No. 2: Ratification of the Appointment of Ernst & Young LLP as Independent Auditors of the Company for the 2022 Fiscal Year		FOR
The Board unanimously believes that the retention of Ernst & Young LLP as the Company’s independent auditors for the 2022 fiscal year is in the best interest of the Company and our stockholders.		Pg. 28
Proposal No. 3: Non-Binding Advisory Vote on Executive Compensation		FOR
We are seeking a non-binding advisory vote to approve the 2021 compensation paid to our named executive officers, which is described in the section of this Proxy Statement entitled “Executive Compensation.”		Pg. 30

Important Notice Regarding the Availability of Proxy Materials

For the Annual Meeting to be Held on May 4, 2022

This Proxy Statement and HGV’s annual report to stockholders and instructions to vote online, by telephone, or by mail are all available at www.proxyvote.com and on our website at investors.hgv.com under the “Financials” heading.

 

Hilton Grand Vacations				2022 PROXY STATEMENT

SUMMARY OF VOTING INFORMATION

It is very important that your views be represented and your shares be counted. Please carefully review the proxy materials for the Annual Meeting and follow the instructions below to cast your vote on all voting matters. Stockholders with additional questions about voting their shares should contact our proxy solicitor, Okapi Partners LLC, at (888) 785-6707 or by email to info@okapipartners.com.

Please vote using one of the following voting methods. Be sure to have your proxy card or voting instruction form or your Notice of Internet Availability of Proxy Materials in hand and follow the instructions.

 

RECORD OWNERS * (your shares are registered on the books of the Company)				BENEFICIAL OWNERS * (your shares are held by a broker or other financial institution)
		Via the Internet Visit www.proxyvote.com				Via the Internet † Visit www.proxyvote.com
		By phone Call 1-800-690-6903 or the telephone number on your proxy card				By phone † Call 1-800-454-8683 or the telephone number on your voting instruction form
		By mail Sign, date and return your proxy card				By mail Sign, date and return your voting instruction form

 

*	All record owners may vote at the Annual Meeting. Beneficial owners may vote at the Annual Meeting if they obtain a legal proxy from their broker or other financial institution before the Annual Meeting. See Questions 7 and 21 below for information about attending and voting at the Annual Meeting.

 

†	Not all beneficial owners may be able to vote at the web address and phone number provided above. If your 16-digit number is not recognized, please refer to the information provided by your broker or other financial institution for voting information.

IMPORTANT DEADLINES

 

 

Hilton Grand Vacations		2		2022 PROXY STATEMENT

HOW TO REVOKE A PROXY AND CHANGE YOUR VOTE

 

RECORD OWNERS (your shares are registered on the books of the Company)		BENEFICIAL OWNERS (your shares are held by a broker or other financial institution)
•   Send a written statement to our Corporate Secretary to the effect that you are revoking a proxy; the statement must be received no later than May 3, 2022; or •   Vote again online or by telephone, before 11:59 p.m., Eastern Time, on May 3, 2022; or •   Mail a properly signed proxy card, with a later date, to the address above; Such later-dated proxy card must be received no later than 5:00 p.m. Eastern Time, on May 3, 2022; or •   Attend the Annual Meeting on May 4, 2022, you can revoke your proxy and vote in person.		•   Submit new voting instructions by contacting your broker or other financial institution; or •   Change your vote at the Annual Meeting by following instructions provided at the meeting; provided, however, that you first obtain a signed proxy from your broker or other financial institution giving you the right to vote the shares at the Annual Meeting.

 

Hilton Grand Vacations		3		2022 PROXY STATEMENT

NOTICE REGARDING INTERNET AVAILABILITY OF PROXY MATERIALS

As permitted by the “notice and access” rules of the U.S. Securities and Exchange Commission (“SEC”), on or about March 22, 2022, we mailed a “Notice Regarding Internet Availability of Proxy Materials” (the “notice”) to our stockholders of record at the close of business on March 11, 2022 (other than those who previously requested a printed set of proxy materials). The notice provides instructions on how to access our proxy materials on the Internet, and how to vote online, by telephone or by mail. To view our proxy materials online, go to www.proxyvote.com. This process expedites delivery of the proxy materials to our stockholders, and helps us contribute to fiscally, socially and environmentally responsible practices.

If you received a Notice Regarding Internet Availability of Proxy Materials by mail, you will not receive a paper copy of the proxy materials in the mail, unless you make a request for a printed copy. To receive a printed copy of the proxy materials, you can choose one of the following methods to make your request:

Online: Go to www.proxyvote.com;

Email: Send email to sendmaterial@proxyvote.com; or

Phone: Call at 1-800-579-1639.

You will need to provide the 16-digit number that is printed on your notice when accessing the proxy materials online or requesting a paper copy of the proxy materials. To facilitate timely delivery, all request for paper copies must be received no later than April 20, 2022.

ELECTRONIC DELIVERY OF PROXY MATERIALS

As an alternative to receiving a Notice Regarding Internet Availability of Proxy Materials or printed proxy materials by mail, record owners and most beneficial owners can elect to receive an email that will provide electronic links to these documents. To request electronic delivery of the proxy materials, send a blank email to: sendmaterial@proxyvote.com. In the subject line of the email, provide the 16-digit number printed on your notice. You will receive an email with electronic links to the proxy materials and the proxy voting site. Opting to receive all proxy correspondences and proxy materials by email will save the Company the cost of producing and mailing documents, and it will also give you an electronic link directly to the proxy voting site.

THANK YOU FOR VOTING

 

Hilton Grand Vacations		4		2022 PROXY STATEMENT

STOCKHOLDER ENGAGEMENT

Our Board and management believe that stockholder accountability is critical to our success, and we actively seek our stockholders’ input and perspectives on our policies and practices. To encourage meaningful communication and cultivate value-added relationships with our stockholders, we have instituted a stockholder engagement program. Our stockholder engagement program is led by our senior management and overseen by our Board, and in 2021 included the following:

 

•

4 non-deal virtual roadshow presentations, meeting with over 70 investors;

 

•

9 broker-sponsored conferences, meeting with over 130 investors; and

 

•

nearly 170 investor calls made or received over the course of the year.

We listen carefully to your viewpoints. Our Board takes your perspectives and concerns into consideration in the boardroom. Our senior leadership is cognizant of stockholders’ perspectives in connection with strategic decisions. In addition, HGV instituted a number of complementary mechanisms that allow our stockholders to effectively communicate with and provide input and feedback to the Board, including:

 

•

the annual election of directors;

 

•

the annual advisory vote to approve executive compensation;

 

•

the ability to attend and voice opinions at the Annual Meeting; and

 

•

the ability to direct communications to individual Directors or the entire Board.

As a result of our ongoing engagement with stockholders, we implemented the following corporate governance and compensation practices and policies, and continue to follow such practices and policies:

 

•

formalized governance “best practices” in Board committee charters, such as a mandatory annual review of the committee charters;

 

•

Board-level oversight of the Company’s sustainability, corporate social responsibility and corporate citizenship practices and activities;

 

•

company-wide social responsibility and community engagement programs through HGV Serves;

 

•

enhanced proxy statement disclosure related to ESG matters;

 

•

included performance-based RSU component to our annual long-term incentive compensation design for our executive officers to better align overall corporate performance over a three-year period with long-term compensation (except as temporarily modified in response to the COVID-19 pandemic); and

 

•

including on an annual basis CEO reported and realizable pay disclosure.

 

Hilton Grand Vacations		5		2022 PROXY STATEMENT

PROPOSAL NO. 1:

ELECTION OF DIRECTORS

Our Board has considered and nominated the following persons (the “Director nominees”) for a one-year term expiring at the 2022 annual meeting of stockholders, or until his or her successor is duly elected and qualified:

 

Mark D. Wang		Brenda J. Bacon		Mark H. Lazarus		David Sambur		Paul W. Whetsell
Leonard A. Potter                David W. Johnson                Pamela H. Patsley                Alex van Hoek

Messrs. Sambur and van Hoek were appointed to our Board effective as of August 2, 2021 in connection with the completion of our acquisition of Diamond (the “Acquisition”) pursuant to the terms of the Stockholders Agreement, dated as of August 2, 2021 (the “Apollo Stockholders Agreement”), by and among the Company, certain investment funds and vehicles managed by affiliates of Apollo (the “Apollo Investors”) and (for certain limited purposes) Hilton Worldwide Holdings Inc. (“Hilton Worldwide”). See “Transactions with Related Persons—Apollo Agreements” for an additional discussion of such director appointment rights and other terms of the Apollo Stockholders Agreement.

Each Director nominee is currently a director of HGV and each has consented to continue to serve if elected.

Action will be taken at the Annual Meeting for the election of the Director nominees. Unless otherwise instructed, the persons named in the proxy card (the “proxyholders”) intend to vote the proxies held by them “FOR” the election of each of the Director nominees. If any of the Director nominees ceases to be a candidate for election at the time of the Annual Meeting, proxies received with voting instructions with respect to any such Director nominee may be disregarded or may be voted by the proxyholders in accordance with the recommendation of the Board.

NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS IN 2022

The following information describes the offices held, other business directorships and the periods of service of each Director nominee. Each of the Director nominees is currently serving as a member of the Board with a term expiring at the Annual Meeting. Beneficial ownership of equity securities of the Director nominees is shown in the section titled “Ownership of Securities.”

Mark Wang

 

Mark D. Wang, 64, has served as a Director since May 2016, and he has served as our President and Chief Executive Officer since the spin-off from Hilton Worldwide in January 2017. Prior to the spin-off, from March 2008 through December 2016, Mr. Wang served as Executive Vice President and President of Hilton Grand Vacations, a wholly-owned subsidiary of Hilton Worldwide, overseeing all of Hilton Worldwide’s global timeshare operations; and before such position, Mr. Wang was head of HGV Asia for Hilton Worldwide. He first joined Hilton Worldwide in 1999, as the managing director of Hawaii and Asia Pacific; and he has held a series of senior management positions within HGV. During Mr. Wang’s time as president of HGV, he also served as executive vice president of Hilton Worldwide’s executive committee; and held a dual role as president of Global Sales for Hilton Worldwide’s hotel division from 2013 to 2014. Mr. Wang led Hilton’s Asia-Pacific Islander Team Member Resource Group. Under Mr. Wang’s leadership, HGV has experienced sustained growth; and he transformed the business into a capital-efficient model. With over 35 years of industry experience, Mr. Wang has earned a reputation as an innovator who brought new, highly effective sales and marketing techniques to the timeshare industry. In 1987, he introduced the U.S. vacation ownership product to the Japanese market. Prior to joining HGV, Mr. Wang co-founded three independent timeshare companies, where he served as president and chief operating officer of each. Mr. Wang currently serves on the board of directors of the American Resort Development Association (“ARDA”). He has been a member of ARDA’s board of directors and served on ARDA’s executive committee since 2008 and served as the chairman of the board from 2017-2019. Mr. Wang served as the vice chairperson of ARDA-Hawaii, an ARDA State Legislative Committee, for six years.

 

Hilton Grand Vacations		6		2022 PROXY STATEMENT

Qualifications, Attributes, Skills, and Experience: Mr. Wang’s knowledge of and extensive experience in senior leadership roles in the timeshare industry provides the Board of Directors with valuable industry-specific knowledge and expertise. In addition, Mr. Wang’s current role as our president and chief executive officer brings management perspective to Board deliberations and provides valuable context with regard to day-to-day operations.

Leonard A. Potter

 

Leonard A. Potter, 60, has served as the Chairperson of our Board of Directors since January 2017. Mr. Potter founded Wildcat Capital Management, LLC, a registered investment advisor, in September 2011 and has served as its president and chief investment officer since inception. Mr. Potter has also served as a founder and senior managing director of Vida Ventures I and II, each a biotech venture fund, since 2017. From 2002 through 2009, Mr. Potter was managing director—private equity at Soros Fund Management LLC (“SFM”) where, from May 2005 through July 2009, he served as co-head of its private equity group and as a member of the private equity investment committee. From July 2009 until September 2011, Mr. Potter served as a consultant to SFM, and as chief investment officer of Salt Creek Hospitality, a private acquirer and owner of hospitality-related assets, which was backed by SFM. From September 1998 until joining SFM in 2002, Mr. Potter was a managing director of Alpine Consolidated LLC, a private merchant bank. From April 1996 through September 1998, Mr. Potter founded and served as a managing director of Capstone Partners LLC, a private merchant bank (“Capstone”). Prior to founding Capstone, Mr. Potter was an attorney specializing in mergers, acquisitions, corporate governance and corporation finance at Morgan, Lewis & Bockius LLP, and at Willkie Farr & Gallagher LLP. Mr. Potter has served and continues to serve as a director on a number of boards of public and private companies, including SLR Capital Ltd. (NASDAQ: SLRC), SLR Senior Capital Ltd. (NASDAQ: SUNS) and SuRo Capital Corporation (NASDAQ: SSSS). Mr. Potter has prior board experience in the hospitality and vacation ownership industries, having served on the board of directors of Hilton Worldwide from 2008 through 2013, and on the board of directors of Diamond Resorts International, LLC from 2007 through 2010. Mr. Potter received a Bachelor of Arts degree from Brandeis University and a Juris Doctor degree from Fordham University School of Law.

Qualifications, Attributes, Skills, and Experience: Mr. Potter’s experience as an attorney in the fields of securities law, corporation finance, corporate governance and mergers and acquisitions brings valuable knowledge and insight to the Board of Directors on regulatory, risk management and business transactions matters. Further, Mr. Potter’s tenure in venture capital, private equity and other investment services activities, and his service on the boards of directors of several public and private companies, including companies in the hospitality and vacation ownership industry, bring capital markets and industry-specific knowledge and expertise to our Board of Directors.

Brenda J. Bacon

 

Brenda J. Bacon, 71, has served as a Director since January 2017. Ms. Bacon is the president and chief executive officer of Brandywine Senior Living, Inc., a provider of quality care and services to seniors, which she co-founded in 1996. Ms. Bacon served as chief of management and planning, a cabinet-level position, under New Jersey Governor James J. Florio from 1989 to 1993. During President Clinton’s first term, Ms. Bacon was on loan to the Presidential Transition Team, as co-chair for the transition of the Department of Health and Human Services. Ms. Bacon is a board member and a past chairman of the board of directors of Argentum (formerly, the Assisted Living Federation of America), where she advocated on behalf of the senior living business and the families they serve and is the current board chair of the senior living certification committee. In 2006, Ms. Bacon was elected as a director by the shareholders of FTI Consulting (NYSE: FCN), an independent global business advisory firm. She serves as chair of the Nominating, Corporate Governance, and Social Responsibility Committee and serves on the Compensation Committee. In 2013, New Jersey Governor Chris Christie appointed Ms. Bacon to the board of trustees of Rowan University where she serves as chair of the Risk Management Committee and is a member of the University Advancement Committee. Ms. Bacon is a founding member of the Boys and Girls Club of Camden and served as a Board member for several years. She received her undergraduate degree from Hampton University, and she holds a Master of Business Administration from the Wharton School of the University of Pennsylvania.

 

Hilton Grand Vacations		7		2022 PROXY STATEMENT

Qualifications, Attributes, Skills, and Experience: Ms. Bacon’s organizational and management skills acquired through her career, including co-founding Brandywine Senior Living, Inc., bring extensive financial expertise and a distinctive and entrepreneurial approach to the Board of Directors.

David W. Johnson

 

David W. Johnson, 60, has served as a Director since January 2017. Mr. Johnson has served as co-founder and managing director at Horizon Capital Partners LLC since September 2021. Before this, he served as president and chief executive officer of Aimbridge Hospitality (“Aimbridge”) from April 2003 to September 2021 and oversaw the management of Aimbridge’s portfolio of over 1600 hotels having approximately $10 billion in annual revenue and over 65,000 employees. Mr. Johnson held senior management positions at Wyndham International, including as president of Wyndham Hotels, overseeing approximately 15,000 employees, with $3 billion in annual revenue. He helped Wyndham grow from 10 hotels to over 500 hotels during his tenure. Currently, Mr. Johnson serves on the owners’ board of the Dallas Stars NHL Franchise. Additionally, he serves as chairman of the board and a member of the audit committee for Sonida Senior Living (NYSE: SNDA). Mr. Johnson previously served on several boards of directors, including Strategic Hotel (NYSE: BEE), where he was also a member of its audit committee and corporate governance committee from 2012 to 2016. From 2009 to 2012, Mr. Johnson served as a director of Gaylord Entertainment (NYSE: GET). He also serves on several nonprofit boards, including the Juvenile Diabetes Research Foundation and the Plano YMCA. He was recognized as a finalist for the Ernst & Young 2014 Entrepreneur of the Year. Mr. Johnson received his undergraduate degree in business economics, with highest honors, from Northeastern Illinois University.

Qualifications, Attributes, Skills, and Experience: Mr. Johnson’s extensive experience as president and chief executive officer of one of the premier hotel management companies in the United States, as well as his marketing background, will provide our Board of Directors with valuable insights.

Mark H. Lazarus

 

Mark H. Lazarus, 58, has served as a Director since January 2017. Mr. Lazarus has served as the chairman of NBCUniversal Television and Streaming (“NBCUniversal”) since May 2020. In this position, he is responsible for the company’s television networks — NBC Entertainment, Telemundo, USA, SYFY, Bravo, Oxygen, E!, Universal Kids, and international networks. He also oversees the company’s streaming service Peacock, the NBC Sports Group, owned television stations, and NBC affiliate relations. Prior to joining NBCUniversal, Mr. Lazarus was the president of Media and Marketing at CSE, a sports and entertainment company, from 2008 through 2010, and previously served as the president of Turner Entertainment Group, from 2003 through 2008, where he oversaw all aspects of Turner Entertainment Networks. Mr. Lazarus also served as President of Turner Sports from 1999 to 2003. Mr. Lazarus currently serves on the board of governors of the Boys and Girls Clubs of America, and on the board of directors for the Eastlake Foundation. He previously served on the board of directors of Compass Diversified Holdings (NYSE:CODI) from 2006 to 2016 and the board of directors of Cincinnati Bell (NYSE: CBB) from 2009 to 2011. Mr. Lazarus received his Bachelor of Arts from Vanderbilt University.

Qualifications, Attributes, Skills, and Experience: Mr. Lazarus’ extensive experience in the media industry provides our Board of Directors with an important perspective in the areas of marketing and use of media. In addition, Mr. Lazarus’ management and leadership experience provide our Board of Directors with guidance on the skills necessary to lead and properly manage our business.

Pamela H. Patsley

 

Pamela H. Patsley, 65, has served as a Director since December 2016. Ms. Patsley served as executive chairman of MoneyGram International, Inc. (NYSE: MGI), a P2P payments and money transfer company, from January 2009 to January 2018 and served as its chief executive officer from September 2009 to December 2015. Previously, Ms. Patsley served as senior executive vice president of First Data Corporation (“First Data”) from 2000 to 2007 and president of First Data International from 2002 to 2007. Ms. Patsley retired from those positions in 2007. From 1991 to 2000, Ms. Patsley served as president and chief executive officer of Paymentech, Inc., prior to its acquisition by First Data. Ms. Patsley also previously served as chief financial officer of First USA, Inc.

 

Hilton Grand Vacations		8		2022 PROXY STATEMENT

Ms. Patsley currently serves on the boards of directors of Texas Instruments, Inc., where she chairs the Compensation Committee (NASDAQ: TXN), Keurig Dr. Pepper, Inc. where she is a member of the Audit Committee (NYSE: KDP), and Payoneer Global, Inc. where she chairs the Audit Committee (NASDAQ: PAYO). She served on the boards of directors of ACI Worldwide, Inc. (NASDAQ: ACIW) from 2018 to 2021, Molson Coors Brewing Company from 1996 to 2009, Pegasus Solutions, Inc. from 2002 to 2006, and Paymentech, Inc. from 1995 to 1999. Ms. Patsley received her Bachelor of Business Administration in accounting from the University of Missouri.

Qualifications, Attributes, Skills and Experience: Ms. Patsley brings to our Board of Directors her extensive leadership experience as a chairman and chief executive officer, chief financial officer and other executive level positions in public companies, financial acumen and risk management experience developed through her experience in public accounting and her chief executive officer and chief financial officer experience, and extensive public company board experience.

David Sambur

 

David Sambur, 41, has served as a Director since August 2021 as a designee of the Apollo Investors. Mr. Sambur is the co-head of Apollo Private Equity, an affiliate of Apollo (“Apollo Private Equity”), where he oversees the Private Equity portfolio and has led numerous investments across technology, media, gaming, hospitality and travel. He currently serves on the board of directors of Rackspace Technology (NASDAQ: RXT), PlayAGS (NYSE: AGS) and Redbox Entertainment (NASDAQ: RDBX), and has served on the boards of directors of a number of private companies. Mr. Sambur previously served as a director of Dakota Holdings, Inc., the holding company that owned Diamond prior to the Acquisition. Prior to joining Apollo in 2004, Mr. Sambur was a member of the Leveraged Finance Group of Salomon Smith Barney Inc. Mr. Sambur serves on the Emory College Dean’s Advisory Council, the Arbor Brothers Board, and is a member of the Mount Sinai Department of Medicine Advisory Board. He also co-leads the Apollo Pride Network. Mr. Sambur received a bachelors degree, summa cum laude, in economics from Emory University.

Qualifications, Attributes, Skills and Experience: Mr. Sambur brings to our board his skills of analyzing businesses and leading investments in companies across an array of industries. He is a seasoned private company and public company director.

Alex van Hoek

 

Alex van Hoek, 35, has served as a Director since August 2021 as a designee of the Apollo Investors. Mr. van Hoek is Partner at Apollo, focused on private equity investing in Europe in the diversified industrials, consumer and retail, and transport and logistics sectors. Mr. van Hoek previously served as a director of Dakota Holdings, Inc., the holding company that owned Diamond prior to the Acquisition, and serves as a member of the board of directors of a private company. Mr. van Hoek is a member of the leadership committee of the Apollo Veterans Initiative. Prior to joining Apollo in 2010, Mr. van Hoek was a member of the Financial Sponsors group in the Global Banking department of Deutsche Bank Securities. Mr. van Hoek graduated, cum laude, with a dual BSE degree in Aerospace Engineering and Mechanical Engineering from Princeton University.

Qualifications, Attributes, Skills and Experience: Mr. van Hoek brings to our Board his expertise in financing, analyzing and advising companies through his experience at Apollo and service on private and public company boards of directors.

Paul W. Whetsell

 

Paul W. Whetsell, 71, has served as a Director since January 2017. Currently, Mr. Whetsell is the chief executive officer of Capstar Hotel Company, which primarily serves as an advisor to hospitality investors and operators and provides corporate governance guidance to early stage companies. From January 2012 to March 2015, Mr. Whetsell served as president and chief executive officer of Loews Hotels & Resorts (“Loews”); and during his tenure, he grew the brand from 16 to 24 hotels, restructured Loews operations, and oversaw the investment of approximately $2 billion into the growth of the system and the upgrading and renovations of Loews properties.

 

Hilton Grand Vacations		9		2022 PROXY STATEMENT

Thereafter, from April 2015 until July 2017, he served as the vice chairman of Loews. Prior to joining Loews, from 2009 to 2011, Mr. Whetsell served as a director of Virgin Hotels, providing strategic guidance in its operations and property acquisition activities. Previously, he held chairman and CEO positions at Meristar Hospitality Corp (NYSE: MHX), at the time the industry’s third largest REIT with over 110 hotels and $3 billion in assets. He also was chairman and CEO of Interstate Hotels and Resorts (NYSE:IHR) one of the industry’s largest operators with over 300 hotels under management. He is also the founder of the original Capstar Hotel Company, a third-party manager of upscale hotel properties. Currently, Mr. Whetsell serves on the board of Boyd Gaming Corporation (NYSE: BYD). He also currently serves as a trustee of the board of trustees of the Cystic Fibrosis Foundation and has previously served as vice chair. From 2007 until May 2018, Mr. Whetsell served on the board of NVR. Inc. (NYSE:NVR). Mr. Whetsell was a member of the American Hotel & Lodging Association’s Industry Real Estate and Financing Advisory Council and previously served on the board of governors of the National Association of Real Estate Investment Trusts (NAREIT). Mr. Whetsell received his bachelor’s degree from Davidson College.

Qualifications, Attributes, Skills, and Experience: Mr. Whetsell brings over 45 years of senior leadership experience in the hospitality industry to his role as a member of our Board of Directors, including his positions as a chief executive officer of a publicly-traded company, his public board service experience, his operational expertise, his real estate experience and his brand marketing expertise.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR”

THE ELECTION OF EACH OF THE DIRECTOR NOMINEES NAMED ABOVE.

 

Hilton Grand Vacations		10		2022 PROXY STATEMENT

CORPORATE GOVERNANCE

AND BOARD MATTERS

Our Board manages or directs our business and affairs, as provided by Delaware law, and conducts its business through meetings of the Board and three standing committees: the Audit Committee; the Compensation Committee; and the Nominating and Corporate Governance Committee. Our Board has a majority of independent directors, and each of our Audit Committee, our Compensation Committee and our Nominating and Corporate Governance Committee is comprised solely of independent directors.

We have structured our corporate governance in a manner we believe closely aligns our interests with those of our stockholders. Notable features of our corporate governance include:

 

•

each of our directors is subject to re-election annually;

 

•

under our bylaws and our Corporate Governance Guidelines, directors who fail to receive a majority of the votes cast in uncontested elections are required to submit their resignation to our Board of Directors;

 

•

our independent directors meet regularly in executive sessions;

 

•

if our Board were to adopt a stockholder rights plan without prior stockholder approval, our Board would either submit the plan to stockholders for ratification or cause the rights plan to expire within one year; and

 

•

we have implemented a range of other corporate governance best practices, including placing limits on the number of directorships held by our directors to prevent “overboarding” and implementing a robust director education program.

BOARD SKILLS AND QUALIFICATIONS

Our Board believes that its effectiveness is enhanced by directors with a broad range of backgrounds and viewpoints that reflect the diversity of our company, owners, guests, team members and business. While our Board does not maintain a formal diversity policy, as part of periodically evaluating its composition, our Board evaluates its diversity and the extent to which a director’s particular background, expertise and experience will complement those of other directors. The Board specifically considers diversity of gender, race and ethnicity when evaluating the diversity of its members or potential members. Currently, approximately 22% of the board is racially or ethnically diverse. We believe that the current composition of our Board provides a complementary mix of skills, experience and backgrounds that are important in governing our company. Our Board will continue to evaluate its composition on a periodic basis to ensure it reflects the appropriate mix of the foregoing and other factors.

 

Brenda Bacon

David Johnson

Mark Lazarus

Pamela Patsley

Leonard Potter

David Sambur

Alex van Hoek

Mark Wang

Paul Whetsell

Outside Board Experience (including Public Company board)

✓

✓

✓

✓

✓

✓

✓

✓

✓

Senior Leadership/Executive Experience

✓

✓

✓

✓

✓

✓

✓

Independence

✓

✓

✓

✓

✓

✓

Gender/Ethnic Diversity

✓

✓

✓

Accounting and Financial Reporting

✓

✓

✓

✓

Mergers & Acquisitions

✓

✓

✓

✓

✓

✓

✓

✓

Corporate Finance and Capital Markets

✓

✓

✓

✓

✓

✓

✓

✓

Sales & Marketing

✓

✓

✓

Government Affairs/Legal Expertise

✓

✓

Strategic Planning

✓

✓

✓

✓

✓

✓

✓

✓

✓

Real Estate, Lodging and Hospitality Industry Experience

✓

✓

✓

✓

✓

✓

✓

 

Hilton Grand Vacations		11		2022 PROXY STATEMENT

OUR ENVIRONMENTAL, SOCIAL AND GOVERNANCE PRACTICES

At HGV, we pride ourselves on providing our owners and guests with unparalleled levels of service and unforgettable vacation experiences and our team members with opportunities for professional growth in their careers with us. It’s a natural extension of this mission to be good stewards of the environment both at our resorts and globally as well as within the communities where we live, work and vacation. These tenets are at the core of our commitment to our stakeholders, including our stockholders, owners, guests, team members and communities. We actively engage in dialogue with our stockholders on matters related to our business as well as the environmental, social and governance (“ESG”) issues that are important to them. For additional discussion on our stockholder engagement, please see “Stockholder Engagement” above.

Environment

We continue to look for ways to reduce our environmental impact and are specifically focused on greenhouse gas emission management and natural resource management, including water consumption and reduction, waste management and reduction of and reuse of materials. We have eliminated the use of plastic straws at HGV-branded properties and continue to use environmentally efficient features and materials at our various new builds and renovations, including: motion-sensor light fixtures, low-flow toilets, Energy Star-rated appliances and recaptured heat from air conditioning to generate hot water. We have recycled more than 19,000 pounds of soap through our partnership with Clean the World, which has been recycled into over 100,000 bars of soap provided to vulnerable children and families. Additionally, HGV donated over 10,000 pounds of unused bottled amenities to those in need.

Our commitment to making a positive environmental impact is not just limited to the United States but extends to other parts of the world where our team members live and work. In Japan, our team members participated in beach clean-up efforts in Okinawa. In Hawaii, we embraced the Malama mindset where we care, protect and maintain island resources. Some key initiatives there include:

 

•

Kings’ Land resort was recognized as Hawaii Green Business Awards Program Honoree.

 

•

Donated $5,000 to Save the Wetlands Hui to help conserve, protect and restore Maui’s remaining wetland.

 

•

Participated in a beach clean-up in Kauai and local highway clean-up on the Big Island.

 

•

Planted 25 legacy trees to help restore the Hawaiian native landscape.

 

•

Grow native Hawaiian plants around the property in Maui, including Pohinahina, Pohuehue and Naupaka, that require less water to flourish and utilize green and water-efficient landscaping products.

Our dedication to being environmentally responsible extends to how we communicate with our owners and guests, including our decision to distribute our Club Traveler magazine exclusively in a digital format the past two years. This is one of the many ways we are working to protect the environment in which we live and travel. Moving from a printed to fully digital format translates to:

Less Paper Waste: Preventing nearly 350,000 pounds from ending up in landfills yearly

More Trees Saved: Approximately 2,600 annually

Fewer Greenhouse Gas Emissions: Approximately 1.2 million pounds of Co2 each year

Social Responsibility

Community Involvement

Service has always been at the heart of HGV. We serve customers. We serve communities. We serve each other. We are committed to acting responsibly and making a positive difference in the communities where we are located.

 

Hilton Grand Vacations		12		2022 PROXY STATEMENT

Through HGV Serves, our corporate social responsibility (“CSR”) platform, and other initiatives, we continue to create meaningful impacts in the communities we serve and beyond.

HGV Serves supports four philanthropic areas: disaster relief, homelessness, veterans and youth development. Together, the company and our team members share their time, talent and resources to create meaningful impacts in our communities across the globe.

Disaster Relief: We provide resources in the places our team members and owners work and live that have been affected by disasters. We have had a long-time partnership with the American Red Cross.

Homelessness: We take our service to the streets to help the homeless find shelter and improve their wellbeing. In 2021, we launched our national partnership with Habitat for Humanity International.

Veterans: We have a strong commitment to providing resources to those who have served in the U.S. armed forces. In 2021, we launched our national partnership with the United Service Organization, Inc. (USO).

Youth Development: With our spirit of service leading the way, we offer help, hope and compassion to children facing adversity.

We understand that any organization’s philanthropic mission starts with its company leaders. Our senior management team and board are passionate about HGV playing an essential role to support our local communities. HGV’s board members are not only accomplished business leaders in their respective fields, but they pursue significant personal philanthropic causes that are of critical importance to our communities, such as serving on the boards of the Cystic Fibrosis Foundation, Eastlake Foundation, Juvenile Diabetes Research Foundation, and Boys & Girls Clubs of America, to name a few.

As a result of the 2021 acquisition of Diamond Resorts, HGV inherited the Diamond Resorts International Foundation. The foundation, which has now been renamed the Hilton Grand Vacations Foundation, is a recognized 501(c)(3) charity and supports the HGV Serves platform and other community initiatives.

Health, Safety and Wellness

The success of our business is fundamentally connected to the well-being of our people. Accordingly, we are committed to the health, safety and wellness of our team members. We offer a suite of benefits and wellness programs to support the diverse needs of our team members, including but not limited to: medical, dental, vision, Employee Stock Purchase Plan, 401(K), Employee Assistance Program, tuition reimbursement, spending accounts, life and disability insurance, discount programs, and a variety of voluntary benefits. Seventy-five percent of our team members are enrolled in our health and well-being programs.

In addition, the Company’s commitment to its team members’ and guests’ health and safety continues to be paramount in its response to the evolving circumstances surrounding the COVID-19 pandemic. We continue to adapt our remote and onsite working policies to conform with current regulations and public health guidance. Many of our team members continue to work from home, but for those team members who are on site, we have implemented safety measures and protocols to protect their health and safety.

In May 2020, HGV undertook various safety measures, which were introduced in its Enhanced Care Guidelines, at HGV-branded resorts, sales galleries and offices. These measures included increased cleaning protocols and safety standards. The Enhanced Care Guidelines incorporated the Hilton CleanStay program to include best practices and protocols as recommended by the Centers for Disease Control and Prevention (CDC) and cleaning solutions approved by the Environmental Protection Agency (EPA).

Human Capital, Diversity and Inclusion

For more than 30 years, HGV has created and delivered vacation experiences for guests from around the world. Our people-first talent strategy is inclusive of programs and services that are designed to ensure that our team members feel engaged, appreciated and rewarded for their contributions.

 

Hilton Grand Vacations		13		2022 PROXY STATEMENT

To further our commitment to global diversity and inclusion efforts, in 2021, we hired our first Vice President of Diversity, Equity and Inclusion. The objective of her role is to lead the development of a comprehensive and forward-thinking DEI strategy to support HGV’s team members across the globe and expand the Company’s existing programs and processes related to DEI, community relations, recognition and culture.

HGV focuses on hiring practices that are reflective of our values and seek customer-centric individuals that embody a spirit of service towards our owners, guests and fellow team members. We believe hiring people with different backgrounds, cultures and perspectives leads to increased creativity and innovation. We are committed to connecting with and engaging talent from diverse backgrounds to ensure our team member population is reflective of the communities in which we live and work. Using a multi-channel approach, we grow our HGV talent network through a variety of outreach programs that include targeted media, team member referrals and diversity outreach. As of December 31, 2021, more than 13,000 Team Members were employed at our timeshare resorts, call centers, sales centers, and corporate locations around the world.

We focus on employee retention initiatives and have designed purposeful programs to nourish every aspect of the team member experience. These programs reward and highlight milestones, recognize the exceptional service standards of our diverse team member population, and promote our values.

Additionally, we make it a priority to appreciate and recognize team member milestones throughout their journey with HGV. From the first 90 days through their retirement, we offer flexible recognition programs that support leaders to create meaningful and impactful moments for their teams.

We are committed to an inclusive workforce that fully represents many different cultures, backgrounds and viewpoints. Our Team Member Resource Groups (TMRGs), which are voluntary, employee-led groups, play an integral part in our culture of inclusion as we strive to foster openness, integrity and respect.

We currently have six TMRGs: African American, Asia Pacific Islander, Hispanic Latino, LGBTQ & Friends, Military and Women’s. In addition to the aforementioned, we are launching six additional groups: Disabilities, Environmental, Euro-Cultural, Multi-Cultural, Parenting & Caregivers, and Young Professionals. We measure success and prioritize initiatives across four main areas: Culture, Career, Community and Commerce.

Each group is sponsored by a senior executive who provides leadership and helps drive initiatives across the business. In addition, we believe that multiple perspectives generate better solutions and relatability with our diverse base of customers and consumers. We strive to ensure a common inclusion that we believe is reflected in our programs and initiatives, and we regularly seek team member feedback through our monthly pulse-checks, our annual engagement survey and ongoing discussions with our TMRGs.

Over 43% of our executives who are senior vice presidents or above are women or identify as being a member of a racial or ethnic minority group. In addition, our president and CEO, Mark D. Wang, and two out of our nine directors are women or identify as racial or ethnic minorities. We are committed to continuing to look to achieve diverse representation among our leaders. We are proud of our efforts to date and will continue to focus on generating input from a broad set of viewpoints.

Through a variety of delivery methods, we offer over 1,000 training and development courses to all of our team members. The courses are focused on several core competencies, including leadership, diversity and inclusion, skills training, business acumen, culture and personal growth. In 2021, our team members completed approximately 100,000 courses during 70,000 total training hours, which included over 36,000 course completions specifically dedicated to compliance training accounting for 24,000 of those hours.

As of December 31, 2021, 10 percent of our employees were covered by various collective bargaining agreements, generally addressing pay rates, working hours, other terms and conditions of employment, certain employee benefits and orderly settlement of labor disputes.

 

Hilton Grand Vacations		14		2022 PROXY STATEMENT

Recognition

Our efforts across all of the areas described in this section above have resulted in the following key recognitions for our company and team members:

 

•

Newsweek’s Most Loved Workplace

 

•

Among the nation’s best adoption-friendly workplaces by Dave Thomas Foundation for Adoption

 

•

Repeatedly ranked among one the top companies to work for in Central Florida

 

•

Gold Stevie Award for Company of the Year – Hospitality and Leisure

 

•

Silver International Business Stevie Award for Company of the Year – Hospitality and Leisure

 

•

Stevie Awards for Women in Business

 

•

Named a Top Company in Hawaii by Hawaii Business Magazine

 

•

Mogul’s Top 100 Innovators in Diversity and Inclusion

 

•

Mogul’s Top 1,000 Companies Worldwide for Millennial Women

 

•

Multiple industry awards, including the ARDA ACE Community Service Award

 

•

Recognition by the Hawaii Green Business Program for our clean energy, energy efficient and sustainable practices

Governance

For a detailed description of our governance policies and procedures, please see the discussion elsewhere in this “Corporate Governance and Board Matters” section.

Ultimately, our commitment to these ESG initiatives and making this mission a part of our overall corporate culture reflects our commitment to continue to do our part as a responsible global corporate citizen. We will continue to engage in our holistic ESG practices to better serve our owners, guests, team members, communities, stockholders, and other stakeholders.

DIRECTOR INDEPENDENCE AND INDEPENDENCE DETERMINATIONS

Under our Corporate Governance Guidelines and New York Stock Exchange (“NYSE”) rules, a director is not independent unless the Board affirmatively determines that he or she does not have a direct or indirect material relationship with us or any of our subsidiaries. The director also must meet the objective test for independence set forth by the NYSE rules. According to our Corporate Governance Guidelines, a director is “independent” if in the judgment of the Board, the director does not have a relationship with the Company that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and is independent in accordance with NYSE corporate governance rules for listed companies. Our Corporate Governance Guidelines require the Board to review the independence of all directors at least annually. In the event a director has a relationship with the Company that is relevant to his or her independence and is not addressed by the objective tests set forth in the NYSE independence definition, the Board will determine, considering all relevant facts and circumstances, whether such a relationship would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

Our Board has affirmatively determined that each of Ms. Bacon, Mr. Johnson, Mr. Lazarus, Ms. Patsley, Mr. Potter and Mr. Whetsell is independent under the guidelines for director independence set forth in our Corporate Governance Guidelines and under all applicable NYSE guidelines, including with respect to committee membership. Further, our Board has determined that each of Ms. Bacon, Mr. Johnson, and Ms. Patsley is “independent” for purposes of Section 10A(m)(3) of the Securities Exchange Act of 1934, as amended (the

 

Hilton Grand Vacations		15		2022 PROXY STATEMENT

“Exchange Act”) and the heightened NYSE independence requirements for audit committee members. Our Board has also determined that each of Mr. Johnson, Mr. Lazarus and Mr. Whetsell is “independent” for purposes of the heightened NYSE independence requirements for compensation committee service and a “non-employee director” as defined by applicable SEC regulations.

In making its independence determinations, the Board considered and reviewed all information known to it (including, without limitation, information identified through questionnaires that each director completes annually).

BOARD STRUCTURE

Our Board of Directors is led by Mr. Potter, our Chairperson. Our Board does not currently have a policy as to whether the roles of Chairperson of the Board and Chief Executive Officer should be separate. Our Board believes that the Company and stockholders are best served by maintaining flexibility to determine whether the Chairperson and the Chief Executive Officer positions should be separate or combined at a given point in time, in order to provide appropriate leadership for us at that time. We believe that the separation of the Chairperson and Chief Executive Officer positions is appropriate corporate governance for us at this time. Accordingly, the Chief Executive Officer position is separate from the Chairperson position. Mr. Potter serves as Chairperson of the Board, while Mr. Wang serves as our President and Chief Executive Officer. Our Board believes that this structure best encourages the free and open dialogue of competing views and provides for strong checks and balances.

Additionally, Mr. Potter’s attention to Board and committee matters allows Mr. Wang to focus more specifically on overseeing the Company’s day-to-day operations, as well as strategic opportunities and planning. Our Chairperson serves as presiding independent director unless the Chairperson does not qualify as an independent director, in which case the independent directors will select a presiding independent director. The presiding independent director’s duties are set forth in our Corporate Governance Guidelines and include chairing the executive sessions of non-employee and independent directors, providing guidance with respect to compliance with the Corporate Governance Guidelines, reviewing Board and committee meeting agenda, serving as a non-exclusive liaison among the independent directors and other Board members and communicating with major shareholders.

BOARD COMMITTEES

Committee Membership and Meetings

The following table summarizes the current membership of each of the Board’s committees.

 

Name

Audit Committee

Compensation Committee

Nominating and Corporate  Governance Committee

Mark D. Wang

Leonard A. Potter

Chair

Brenda J. Bacon

X

X

David W. Johnson

X

X

Mark H. Lazarus

X

Pamela H. Patsley

Chair

David Sambur

Alex van Hoek

Paul W. Whetsell

Chair

X

We expect our directors to attend all meetings of the Board, all meetings of the committees of which they are members, and all meetings of stockholders. All of our directors attended at least 75% of the aggregate meetings of both the Board and all committees on which they served during 2021. In addition, all of our directors attended the 2021 annual meeting of stockholders. As previously noted, Messrs. Sambur and van Hoek joined our Board in August 2021 and are not members of any of the committees. Messrs. Sambur and van Hoek attended all meetings of the Board held after the date of their joining the Board.

 

Hilton Grand Vacations		16		2022 PROXY STATEMENT

The following table sets forth the number of meetings held by the Board and each committee during the year ended December 31, 2021.

 

		Number of Meetings
Board of Directors		6
Audit Committee		7
Compensation Committee		6
Nominating and Corporate Governance Committee		4

Beyond such formal meetings, our directors are encouraged to informally discuss and communicate among themselves any relevant items in carrying out their Board and applicable committee duties and responsibilities.

Audit Committee

The Audit Committee is a standing committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. All members of the Audit Committee have been determined to be “independent,” consistent with our Audit Committee Charter, Corporate Governance Guidelines, applicable SEC regulations and the NYSE listing standards applicable to boards of directors in general and to audit committees in particular. Our Board also has determined that each of the members of the Audit Committee is “financially literate” within the meaning of the listing standards of the NYSE. In addition, our Board has determined that Ms. Patsley qualifies as an “audit committee financial expert” as defined by applicable SEC regulations and has accounting and/or related financial management expertise as required by the listing standards of the NYSE.

The duties and responsibilities of the Audit Committee are set forth in its charter, which may be found on our website at investors.hgv.com under the “Governance—Governance Documents” heading. The duties and responsibilities of the Audit Committee include, among others:

 

•

the adequacy and integrity of our financial reporting and disclosure practices;

 

•

the integrity of our financial statements;

 

•

the soundness of our system of internal controls regarding finance and accounting compliance;

 

•

the annual independent audit of our consolidated financial statements;

 

•

the independent registered public accounting firm’s qualifications and independence;

 

•

the engagement of the independent registered public accounting firm;

 

•

the scope, approach, performance, and results of the independent registered public accounting firm and our internal audit function;

 

•

our compliance with legal and regulatory requirements in connection with the foregoing;

 

•

oversight of our exposure to risk, including, but not limited to, data privacy and security, business continuity and operational risks;

 

•

oversight of procedures for receipt, retention and treatment of complaints and confidential submission of concerns related to accounting, internal controls or auditing matters;

 

•

review of related party transactions; and

 

•

compliance with our Code of Conduct.

On behalf of the Board, the Audit Committee plays a key role in the oversight of our risk management policies and procedures. See “Oversight of Risk Management.”

With respect to our reporting and disclosure matters, the responsibilities and duties of the Audit Committee include reviewing and discussing with management and the independent registered public accounting firm our

 

Hilton Grand Vacations		17		2022 PROXY STATEMENT

annual audited financial statements and quarterly financial statements prior to inclusion in our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, and other public filings in accordance with applicable rules and regulations of the SEC.

Compensation Committee

All members of the Compensation Committee have been determined to be “independent,” “outside directors” and “non-employee directors” as defined by our Compensation Committee Charter, Corporate Governance Guidelines and the NYSE listing standards applicable to boards of directors generally, and to compensation committees in particular. In addition, all members of the Compensation Committee have been determined to be a “non-employee director” as defined by applicable SEC regulations.

The duties and responsibilities of the Compensation Committee are set forth in its charter, which may be found on our website at investors.hgv.com under the “Governance—Governance Documents” heading. The duties and responsibilities of the Compensation Committee include, among others:

 

•

the establishment, maintenance and administration of compensation and benefit policies designed to attract, motivate and retain personnel with the requisite skills and abilities to contribute to the long-term success of the Company;

 

•

oversight of the goals, objectives, and compensation of our President and Chief Executive Officer, including evaluating the performance of our President and Chief Executive Officer in light of those goals;

 

•

oversight of the goals, objectives, and compensation of our other senior officers and directors;

 

•

review of the effectiveness of our executive compensation programs;

 

•

review, approve or recommend to the Board, and administer, our equity-based and annual incentive plans;

 

•

our compliance with the compensation rules, regulations, and guidelines promulgated by the NYSE, the SEC, and other law, as applicable;

 

•

oversight of the compliance of senior officers and directors with the Company’s stock ownership guidelines; and

 

•

the issuance of a report on executive compensation for inclusion in our annual proxy materials.

With respect to our reporting and disclosure matters, the responsibilities and duties of the Compensation Committee include overseeing the preparation of the Compensation Discussion and Analysis for inclusion in our annual Proxy Statement and Annual Report on Form 10-K in accordance with applicable rules and regulations of the SEC. Its charter permits the Compensation Committee to delegate any or all of its authority to one or more subcommittees and to delegate to one or more of our officers the authority to make awards to employees other than any Section 16 officer under our incentive compensation or other equity-based plan, subject to compliance with the plan and the laws of our state of jurisdiction.

The Compensation Committee has the authority under its charter to retain outside consultants or advisors, as it deems necessary or advisable. In accordance with this authority, the Compensation Committee has engaged the services of Pearl Meyer & Partners, LLC (“Pearl Meyer’) as its independent outside compensation consultant to perform analyses, and provide advice related to the Company’s executive and outside director compensation programs. All executive compensation services provided by Pearl Meyer during 2021 were conducted under the direction or authority of the Compensation Committee, and all work performed by Pearl Meyer was pre-approved by the Compensation Committee.

The Compensation Committee evaluated whether any services proposed to be performed during 2021 by Pearl Meyer raised any conflict of interest and determined that it did not. Neither Pearl Meyer nor any of its affiliates maintains any other direct or indirect business relationships with us or any of our subsidiaries. As requested by

 

Hilton Grand Vacations		18		2022 PROXY STATEMENT

the Compensation Committee, Pearl Meyer’s 2021 services to the Compensation Committee included, among other things, providing perspective on current trends and developments in executive and director compensation as well as analysis of benchmarking data.

Nominating and Corporate Governance Committee

All members of the Nominating and Corporate Governance Committee have been determined to be “independent” as defined by our Corporate Governance Guidelines and the NYSE listing standards.

The duties and responsibilities of the Nominating and Corporate Governance Committee are set forth in its charter, which may be found on our website at investors.hgv.com under the “Governance — Governance Documents” heading. The duties and responsibilities of the Nominating and Corporate Governance Committee include, among others:

 

•

advise the Board concerning the appropriate composition and qualifications of the Board and its committees;

 

•

identify individuals qualified to become Board members;

 

•

recommend to the Board the persons to be nominated by the Board for election as directors at any meeting of stockholders;

 

•

coordinate succession planning with the Chair as it relates to the CEO;

 

•

develop and recommend to the Board a set of corporate governance guidelines and assist the Board in complying with them;

 

•

review periodically and monitor compliance with the Company’s code of conduct;

 

•

oversee and review the Company’s activities and practices relating to sustainability, corporate social responsibility, and corporate citizenship matters; and

 

•

oversee the evaluation of the Board and the Board’s committees.

OVERSIGHT OF RISK MANAGEMENT

The Board of Directors has overall responsibility for risk oversight, including, as part of regular Board and committee meetings, general oversight of executive management of risks relevant to the Company. A fundamental part of risk oversight is not only understanding the material risks a company faces and the steps management is taking to manage those risks but also understanding what level of risk is appropriate for the Company. The involvement of the Board of Directors in reviewing our business strategy is an integral aspect of the Board’s assessment of management’s tolerance for risk and its determination of what constitutes an appropriate level of risk for the Company. While the full Board has overall responsibility for risk oversight, it is supported in this function by its Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee, which take the lead in discrete areas of risk oversight and regularly report to the Board.

The Audit Committee assists the Board in fulfilling its risk oversight responsibilities by periodically reviewing our accounting, reporting and financial practices, including the integrity of our financial statements, the surveillance of administrative and financial controls, our compliance with legal and regulatory requirements and our enterprise risk management program. Through its regular meetings with management, including the finance, legal and internal audit functions, the Audit Committee reviews and discusses all significant areas of our business and summarizes for the Board all areas of risk and the appropriate mitigating factors. The Audit Committee also receives regular reports from our Chief Information Officer and other members of management, addressing the primary cyber security risks facing the Company, the steps management is taking to mitigate such risks, as well as changes to the Company’s cyber security risk profile and newly-identified risks.

 

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The Compensation Committee assists the Board by overseeing and evaluating risks related to the Company’s compensation structure and compensation programs, including the formulation, administration, and regulatory compliance with respect to compensation matters. The Nominating and Corporate Governance Committee assists the Board by overseeing and evaluating programs and risks associated with Board organization, membership and structure, succession planning and corporate governance. In addition, our Board receives periodic detailed operating performance reviews from management. Management updates the Audit Committee on a quarterly basis and the full Board on an annual basis and as needed.

Board’s Role in Overseeing Cyber Risk

Our Board recognizes the importance of protecting and maintaining the security and integrity of data for our owners, guests, and team members. Our Board has delegated to the Audit Committee the responsibility to oversee our cyber security and data protection risks. The Audit Committee receives regular reports from our senior management, including our chief information officer, regarding the primary cyber security risks we face, and the steps management is taking to mitigate such risks. The Audit Committee also reviews our cyber and data risk management strategy and policies on at least a quarterly basis with our management. In addition, the Audit Committee and our Board will promptly be made aware of any significant cyber or data security-related incidents.

EXECUTIVE SESSIONS

Executive sessions, which are meetings of the non-employee members of the Board, are regularly scheduled throughout the year. In addition, at least once a year, the independent directors meet in a private session. Prior to August 2021, all of our non-employee directors were independent directors. Subsequent to Messrs. Sambur and van Hoek joining our Board in August 2021, five of our non-employee directors continued to be independent directors and two of our non-employee directors (i.e., Messrs. Sambur and van Hoek) were determined to be not independent by our Board. During 2021, our independent directors met in a private executive session at least once at each of the four regularly scheduled board meetings. The Presiding Independent Director selected by the independent directors, currently Mr. Potter, presides over meetings of the non-employee directors and independent directors. If the Presiding Independent Director is not available, the non-employee or independent directors will select a presiding independent or non-employee director, as the case may be, who will preside at such session.

BOARD AND COMMITTEE EVALUATIONS

The Board and each committee conduct an annual self-evaluation to assess the effectiveness and performance of the applicable governing body and the performance of its members in accordance with our Corporate Governance Guidelines and each committee charter. These self-evaluations for the fiscal year ended 2021 were completed in early 2022.

CORPORATE GOVERNANCE GUIDELINES AND COMMITTEE CHARTERS

Our commitment to good corporate governance is reflected in our Corporate Governance Guidelines, which describe the Board’s views on a wide range of governance topics and assist the Board in the exercise of its responsibilities. Each committee of the Board is governed by a charter adopted by the Board. Our Corporate Governance Guidelines are reviewed from time to time by the Nominating and Corporate Governance Committee, and each committee charter is reviewed at least annually by the appropriate committee. To the extent deemed appropriate in light of emerging practices, our Corporate Governance Guidelines and committee charters will be revised accordingly, upon recommendation to and approval by the Board. Our Corporate Governance Guidelines, our Audit, Compensation, and Nominating and Corporate Governance Committee charters and other corporate governance information are available on our website at investors.hgv.com under the “Governance — Governance Documents” heading. Any stockholder also may request copies in print, without charge, by contacting Investor Relations, Hilton Grand Vacations Inc., 5323 Millenia Lakes Boulevard, Suite 400, Orlando, Florida 32839 or by email to IR@hgv.com.

 

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CODE OF CONDUCT

We maintain a Code of Conduct that applies to all employees, including our chief executive officer, chief financial officer, and chief accounting officer, and all directors, and provide regular training on the Code of Conduct. The Code of Conduct sets forth our policies and expectations on a number of topics, including conflicts of interest, compliance with laws, use of our assets, and business conduct and fair dealing. This Code of Conduct also satisfies the requirements for a code of ethics, as defined by Item 406 of Regulation S-K promulgated by the SEC and the listing standards of the NYSE. We intend to disclose, within four business days, any substantive changes in the Code of Conduct or waivers from the Code of Conduct that apply to our executive officers or directors by posting such information to our website at investors.hgv.com or by filing with the SEC a current report on Form 8-K, in each case if such disclosure is required by SEC or NYSE rules.

The Code of Conduct is available on our website at investors.hgv.com under the “Governance — Governance Documents” heading. Any stockholder may request a copy in print, without charge, by contacting Investor Relations, Hilton Grand Vacations Inc., 5323 Millenia Lakes Boulevard, Suite 400, Orlando, Florida 32839 or by email to IR@hgv.com.

DIRECTOR NOMINATION PROCESS

The Nominating and Corporate Governance Committee weighs the characteristics, experience, independence, and skills of potential candidates for election to the Board and recommends nominees for director to the Board for election. In considering candidates for the Board, the Nominating and Corporate Governance Committee also assesses the size, composition and combined expertise of the Board. As the application of these factors involves the exercise of judgment, the Nominating and Corporate Governance Committee does not have a standard set of fixed qualifications that is applicable to all director candidates, although the Nominating and Corporate Governance Committee does, at a minimum, assess each candidate’s strength of character, judgment, industry knowledge or experience, ability to work collegially with the other members of the Board and ability to satisfy any applicable legal requirements or listing standards. The Nominating and Corporate Governance Committee seeks to compose the Board such that it consists of a diverse group of individuals who possess the appropriate combination of skills, experience, and background.

When considering director candidates, the Nominating and Corporate Governance Committee seeks individuals with backgrounds and qualities that, when combined with those of our incumbent directors, provide a blend of skills and experience to further enhance the Board’s effectiveness. Although we do not have a formal policy regarding racial, ethnic or gender diversity, the Board views diversity as a priority, and the Nominating and Corporate Governance Committee evaluates the diversity of gender, race, ethnicity and differences in viewpoints, in addition to education, skills, professional experiences, and the perceived needs of the Board, as part of its annual evaluation of the composition of the Board. In identifying prospective director candidates, the Nominating and Corporate Governance Committee may seek referrals from other members of the Board, management, stockholders and other sources, including third-party recommendations. The Nominating and Corporate Governance Committee utilizes the same criteria for evaluating candidates regardless of the source of the referral or by whom the candidate was recommended. The Nominating and Corporate Governance Committee may, but need not, retain a search firm in order to assist it in identifying candidates to serve as directors of the Company.

In connection with its annual recommendation of a slate of nominees, the Nominating and Corporate Governance Committee and the Board considered whether those directors recommended for re-election have the experience, qualifications, attributes, and skills, taken as a whole, to enable the Board to satisfy its oversight responsibilities effectively in light of the Company’s business and structure. In particular, the Nominating and Corporate Governance Committee and the Board focused on the information contained in each of the Director nominee’s biographical discussion, set forth in this Proxy Statement. The Nominating and Corporate Governance Committee and the Board also assessed the contributions of the directors recommended for re-election in the context of the Board and the committees’ self-assessment process. We believe that our directors provide an appropriate mix of experience and skills relevant to the size and nature of our business. This process resulted in the Board’s

 

Hilton Grand Vacations		21		2022 PROXY STATEMENT

nomination of the incumbent directors named in this Proxy Statement and its recommendation that you vote “for” the election of each of the director nominees at the Annual Meeting.

The Nominating and Corporate Governance Committee will consider director candidates recommended by stockholders. Any recommendation submitted to the Secretary of the Company should be in writing and should include any supporting material the stockholder considers appropriate in support of that recommendation, but must include information that would be required under the rules of the SEC to be included in a proxy statement soliciting proxies for the election of such candidate and a written consent of the candidate to serve as one of our directors if elected. Stockholders wishing to propose a candidate for consideration may do so by submitting the above information to the attention of the Office of the Secretary, Hilton Grand Vacations Inc., 5323 Millenia Lakes Boulevard, Suite 400, Orlando, Florida 32839 or by email to secretary@hgv.com. All recommendations for nomination received by the Secretary that satisfy our bylaw requirements relating to such director nominations will be presented to the Nominating and Corporate Governance Committee for its consideration. Stockholders also must satisfy the notification, timeliness, consent and information requirements set forth in our bylaws. These requirements are also described under “Stockholder Proposals for the 2022 Annual Meeting.”

COMMUNICATIONS WITH THE BOARD

To facilitate communications with the Company’s directors, our Corporate Governance Guidelines provide that stockholders and other interested parties who wish to communicate with a member or members of the Board, including the chairperson of the Audit, Compensation, or Nominating and Corporate Governance Committees, or to the non-employee or independent directors as a group, may do so by addressing such communications or concerns to the Office of the Secretary, Hilton Grand Vacations Inc., 5323 Millenia Lakes Boulevard, Suite 400, Orlando, Florida 32839 or by email to secretary@hgv.com, who will forward such communication to the appropriate party.

COMPENSATION OF DIRECTORS

We use a combination of cash and stock-based compensation to attract and retain qualified candidates to serve on our Board. Our Compensation Committee reviews non-employee director compensation from time to time. Mr. Wang, the sole employee director on the Board, receives no compensation for serving on the Board.

COMPENSATION PROGRAM

Each eligible non-employee director is entitled to annual compensation for the period from the 2021 annual meeting of stockholders until our Annual Meeting, as follows:

 

•

annual cash retainer of $75,000;

 

•

additional annual cash retainer of $120,000 for serving as the chairperson of the Board;

 

•

additional annual cash retainer for serving on committees or as the chairperson of a committee as follows:

 

○

each member (other than the chairperson) of the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee will receive $10,000 for each committee on which he or she serves;

 

○

the chairperson of the Audit Committee will receive an additional $25,000 and the chairperson of each of the Compensation Committee and the Nominating and Corporate Governance Committee will receive an additional $20,000; and

 

•

equity award of approximately $125,000 payable annually in the form of restricted stock units (“RSUs”), which will vest on the earlier of (i) the one-year anniversary of the grant date and (ii) the date of the next annual meeting of stockholders, subject to continued service on the Board through the vesting date.

 

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Cash retainers are paid semi-annually, in arrears. Annual equity award grants to directors are made following each annual meeting of stockholders and represent the directors’ annual grants for their service as a director until the next annual meeting of stockholders.

All of our directors are reimbursed for reasonable travel and related expenses associated with attendance at Board or committee meetings. In addition, our independent directors are reimbursed for reasonable personal costs when they stay at our resorts. The Board may determine in its discretion additional cash or other consideration for services on ad hoc committees that it may establish from time to time.

We have a stock ownership policy for our non-employee directors. Each of our non-employee directors (other than the directors who are not eligible to receive compensation) is expected to own stock in an amount equal to five times his or her annual cash retainer (exclusive of retainers received for service on a committee of the Board or as chairperson of a committee or the Board). For purposes of this requirement, a director’s holdings include shares held directly or indirectly, individually or jointly, shares held in trust for the benefit of the director or a family member, shares underlying vested options (based on the excess of the market price of the stock over the exercise price), time-vesting restricted stock and RSU awards that have not yet vested, and shares held under a deferral or similar plan. Non-employee directors are expected to meet this ownership requirement within five years of becoming subject to the stock ownership policy. Declines in the stock price will not affect compliance with the stock ownership policy as long as each non-employee director continues to hold the number of shares held at the time compliance was initially achieved.

DIRECTOR COMPENSATION FOR 2021

The table below sets forth information regarding non-employee director compensation for the fiscal year ended December 31, 2021.

 

Name		Fees Earned or Paid in Cash ($)(1)					Stock Awards ($)(2)					Total ($)					Total Number of Outstanding Equity Awards (#)(2)
Leonard A. Potter			$	215,000				$	125,000				$	340,000					2,817
Brenda J. Bacon			$	95,000				$	125,000				$	220,000					2,817
David W. Johnson			$	95,000				$	125,000				$	220,000					2,817
Mark H. Lazarus			$	85,000				$	125,000				$	210,000					2,817
Pamela H. Patsley			$	100,000				$	125,000				$	225,000					2,817
David Sambur			$	19,368	(3)			$	0	(3)			$	19,368	(3)				—	(3)
Alex van Hoek			$	19,368	(3)			$	0	(3)			$	19,368	(3)				—	(3)
Paul W. Whetsell			$	105,000				$	125,000				$	230,000					2,817

 

(1)	Amounts reflect cash retainer fees for each non-employee director, based on the director fees set forth under “Compensation Program.” Amounts reflect each non-employee’s director cash fee forbearance as described above.

(2)

Amounts reflect an annual equity award for the period from the date of the 2021 annual meeting of stockholders through the date of the 2022 annual meeting of stockholders, based on an annual award of $125,000. Represents the aggregate grant date fair value of the awards computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, using the assumptions discussed in Note 19 (“Share-Based Compensation”) of the consolidated financial statements included in HGV’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 (the “Annual Report on Form 10-K”). The outstanding equity awards were granted on May 5, 2021 at the 2021 annual meeting of stockholders and fully vest on the one-year anniversary of such date of grant or, if earlier, on the date of the next annual meeting of stockholders at which directors are elected.

(3)

In connection with their appointment to our Board pursuant to the terms of the Apollo Stockholders Agreement, we agreed to compensate each of Messrs. Sambur and van Hoek pursuant to the terms of our annual non-employee director compensation program. Upon their appointment, Messrs. Sambur and van Hoek and the Apollo Investors informed us that, due to certain internal policies and arrangements, Messrs. Sambur and van Hoek could not receive any direct compensation, either cash or equity, from public company boards of directors on which they serve and that any such payments are required to be made to an affiliate of the Apollo Investors. Accordingly, it was agreed that annual non-employee director cash compensation to which Messrs. Sambur and van Hoek would have been entitled would be paid (including for tax purposes) to such affiliate of the Apollo Investors. In addition, since the terms of the Apollo Stockholders Agreement generally provides, among other things, that the Apollo Investors and their affiliates are prohibited from acquiring any additional common stock of the Company (subject to certain exceptions), thereby prohibiting the payment of the annual non-employee director stock award compensation to such Apollo Investor affiliate, it was agreed that such affiliate would receive cash equivalent of any equity compensation to which Messrs. Sambur and van Hoek would have been entitled to receive.

 

 

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Except for Messrs. Sambur and van Hoek, who did not receive any director compensation in the form of equity as described above, eligible non-employee directors are awarded equity under the Hilton Grand Vacations Inc. 2017 Stock Plan for Non-Employee Directors (the “Director Stock Plan”) in the form of RSUs. RSUs vest on the earlier of (i) the one-year anniversary of the grant date and (ii) the date of the next annual meeting of stockholders, subject to continued service on the Board through the vesting date or as otherwise provided in the plan or applicable award agreement. Dividend equivalents accrue on unvested RSUs either in cash or, at the sole discretion of the Compensation Committee, in shares of HGV’s common stock or additional RSUs equal to the fair market value of the dividend equivalent payment as of the dividend payment date, payable at the same time as the underlying RSUs are settled following vesting (or forfeited to the extent the underlying RSUs are forfeited). Any unvested RSUs held by a non-employee director will become fully earned and vested upon (i) termination of such director’s service as a result of such director’s death or disability, (ii) a change in control event, if the successor or surviving company does not assume, substitute or continue the RSUs on substantially similar terms, or (iii) termination of such director’s service without cause or with good reason (each as defined in the form of Restricted Stock Unit Agreement for use under the Director Stock Plan) within twelve months following a change in control. In addition, if a non-employee director retires more than six months after the grant date of a director RSU award, then a pro-rata number of RSUs shall become earned and vested as of the retirement date. Unvested RSUs are forfeited upon termination of service for any other reason.

 

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INFORMATION ABOUT OUR EXECUTIVE OFFICERS AND OTHER SENIOR OFFICERS

OUR EXECUTIVE OFFICERS

Set forth below is certain information regarding each of our current executive officers, other than Mr. Wang, whose biographical information is presented under “Proposal No. 1: Election of Directors — Nominees for Election to the Board of Directors in 2022.” Beneficial ownership of equity securities of certain of our executive officers is shown under the heading “Ownership of Securities” in this Proxy Statement.

Pablo Brizi

 

Pablo Brizi, 47, has served as HGV’s Executive Vice President and Chief Human Resources Officer & Corporate Affairs since October 2020 “CHRO”). Mr. Brizi is responsible for leading teams of highly experienced human resources professionals who provide strategic business partnerships and consultative talent services across the global business. His oversight as CHRO also includes talent management, compensation, benefits, recruitment, succession planning, learning and development, and general HR shared services. Mr. Brizi brings more than 25 years of human resources experience working with multinational organizations in the hospitality, technology, oil, manufacturing and private equity industries. Most recently, he served as Chief Human Resources Officer for Bloomin’ Brands where he oversaw global compensation, benefits, talent management, leadership development, corporate affairs and HR operations for approximately 100,000 corporate and restaurant Team Members. In addition, Mr. Brizi held a number of leadership positions with Avaya, including Vice President, Global Compensation and Benefits, and Senior Director of HR for the Americas. He also worked for NCR Corporation, Ford Motors Company, and Exxon Corporation in a variety of HR and compensation and benefits leadership roles. Mr. Brizi holds a bachelor’s degree in finance from Universidad Argentina de la Empresa. In addition, he completed Cornell University’s Modern CHRO Role executive education program and holds a designation in Certified Compensation Professional through World-at-Work.

Charles R. Corbin

 

Charles R. Corbin, 65, has served as HGV’s Executive Vice President, Chief Legal Officer, General Counsel and Secretary since November 2016. He served as the HGV’s Chief Development Officer from May 2018 until September 2020. Before joining HGV, Mr. Corbin served at Hilton Worldwide for over 6 years from March 2010 to November 2016, where he was most recently Senior Vice President for Dispute Resolution and Employment and Benefits. Prior to joining Hilton Worldwide in 2010, Mr. Corbin served in a number of high-level legal roles, including vice president and assistant general counsel at Sunrise Senior Living, an assisted living facility operator, and group vice president at The Mills Corporation, a developer, owner, and operating of large retail and entertainment centers and destinations. Mr. Corbin’s more than 40-year legal and business career includes managing a venture capital firm and serving in a variety of roles as a business counselor, legal advisor, and investor. He is known for working with operational management to successfully execute strategic goals while providing risk adjusted legal counsel and business advice. Mr. Corbin is a board member of ARDA. Mr. Corbin holds a bachelor’s degree in English with highest honors from The Citadel, and a Juris Doctorate from the University of Dayton School of Law.

Gordon S. Gurnik

 

Gordon Gurnik, 58, has served as HGV’s Senior Executive Vice President and Chief Operating Officer since August 2021 and was previously Executive Vice President and Chief Operating Officer from December 2018 to August 2021. Mr. Gurnik’s responsibilities at HGV include working in partnership with the executive team to lead sales and business development, continue to build HGV’s brand, improve processes and products, and oversee resort operations and Club programs, all while ensuring alignment with HGV’s strategic priorities for all new initiatives. In addition, Mr. Gurnik is a champion for diversity and inclusion and is the executive sponsor of the company’s Asia-Pacific Islander Team Member Resource Group. Prior to joining HGV, Mr. Gurnik served as

 

Hilton Grand Vacations		25		2022 PROXY STATEMENT

President of RCI, a worldwide leader in vacation exchange and travel services and the largest exchange network in the world. While at RCI, he was instrumental in advancing the company’s signature products while also leading RCI’s strategic direction, operations and growth with over 3.8 million member families and 4,300 vacation ownership resorts. He serves on the board of directors for Christel House International, a non-profit organization that supports impoverished children throughout the world and is a board member of ARDA. Mr. Gurnik holds a bachelor’s degree in management from Purdue University.

Daniel J. Mathewes

 

Daniel J. Mathewes, 47, has served as HGV’s Senior Executive Vice President and Chief Financial Officer since August 2021, and was Executive Vice President and Chief Financial Officer from November 2018 to August 2021. Mr. Mathewes is responsible for leading teams of highly skilled finance professionals who develop and implement corporate and financial strategies across our global business. He leads the finance, accounting, portfolio, treasury, tax, and investor relations departments. Mr. Mathewes has more than 20 years of global finance, accounting, SEC reporting, investor relations and corporate experience with both public and private multi-national companies. He is known for working with operational management to successfully execute strategic goals while driving strong financial outcomes. Prior to joining HGV, Mr. Mathewes was the chief financial officer of Virgin Hotels North America, a hotel management company, from January 2016 to November 2018. Previously, Mr. Mathewes served as the chief financial officer of the World, Residences at Sea, a privately-owned yacht with 165 residences, from July 2014 to January 2016. He served as senior vice president of finance and treasury of Kerzner International Holdings Limited from September 2008 to July 2014, which operated the Atlantis resorts in Nassau and Dubai, the One&Only luxury hotels, and Mazagan Beach Resort in Morocco. Mr. Mathewes also worked in multiple financial leadership capacities with NCL Corporation (Norwegian Cruise Lines) and Royal Caribbean Cruises Ltd. Mathewes began his career with PricewaterhouseCoopers. Mr. Mathewes graduated summa cum laude from Florida State University with bachelor’s degrees in accounting and economics.

OTHER SENIOR OFFICERS

Set forth below is certain information regarding each of our other senior officers.

Dennis A. DeLorenzo

 

Dennis A. DeLorenzo, 57, has served as HGV’s Executive Vice President since August 2017 and Chief Sales Officer since December 2016, overseeing all of our global sales operations and Hilton Club. Mr. DeLorenzo previously served as our Senior Vice President of Sales from January 2015 to December 2016, and as Vice President of Marketing Development from 2012 to January 2015. Mr. DeLorenzo is an industry veteran with more than 20 years of experience in timeshare sales and marketing leadership roles. He has a dynamic background, having performed in several leadership positions within HGV, and having served as senior vice president of marketing with Holiday Inn Club Vacations, as regional vice president of sales and marketing for Sunterra Corporation, and as director of marketing, Mid-Atlantic region, for Marriott Ownership Resorts, Inc.

Stan R. Soroka

 

Stan R. Soroka, 62, has served as HGV’s Executive Vice President and Chief Customer Officer since January 2015. Mr. Soroka is responsible for all resort operations and HGV’s Club program, as well as brand standards for resorts and the overall organization. From May 2010 to January 2015, Mr. Soroka served as Hilton’s area vice president for Florida and Hilton Grand Vacations Resort Operations; and in this dual capacity, he oversaw hotel operations for Hilton, Doubletree, Embassy Suites, and Waldorf Astoria properties throughout Florida, as well as the Conrad Miami. His responsibilities also included oversight of timeshare resort operation functions for HGV’s developed properties in Las Vegas, New York, Orlando, and South Beach, Miami. A second-generation hotelier, Mr. Soroka has more than 35 years of experience successfully operating renowned hotels and resorts including serving as managing director of the Waldorf Astoria El Conquistador Resorts and Las Casitas Village in Puerto Rico from 2005 until 2010. Prior to joining Hilton Worldwide in 2005, Mr. Soroka held leadership roles at Oakbrook Hotels, Vail Resorts Management, and H.B.E. Hotels and Resorts. Mr. Soroka began his hospitality career with

 

Hilton Grand Vacations		26		2022 PROXY STATEMENT

Hyatt Hotels Corporation in the stewarding department, where he quickly moved up the ranks of food and beverage, before transitioning to front office operations and management. Mr. Soroka earned a Bachelor of Science degree in hospitality management from the Conrad N. Hilton College of Hotel and Restaurant Management at the University of Houston.

Matthew A. Sparks

 

Matthew Sparks, 61, has served as HGV’s Executive Vice President and Chief Development Officer since September 2020. In this role, Mr. Sparks is responsible for leading all aspects of the company’s development and acquisitions pipeline. He also manages and optimizes the HGV portfolio of assets as well as the company’s fee-for-service and joint venture relationships. Additionally, he oversees the design and construction group. Mr. Sparks has nearly 30 years of global development and acquisition experience in the hospitality industry. He has been active in all aspects of hospitality real estate and brand development including acquisitions, joint venture structuring, repositioning and new construction. Prior to HGV, Mr. Sparks served as Executive Vice President and Chief Investment Officer of Park Hotels & Resorts where he established and oversaw the company’s investment and acquisition strategy. Prior to his role at Park Hotels & Resorts, Mr. Sparks served as Hilton’s Senior Vice President, Luxury & Corporate Development, where he managed the company’s full service, corporate and luxury/lifestyle brand growth and development in North America. Previous roles include Senior Vice President of Acquisitions at Sage Hospitality Resources and senior development positions at Fairmont Raffles Hotels International. Mr. Sparks holds a bachelor’s degree from Michigan State University’s School of Hospitality Business and currently serves on the Alumni Board of Directors and The Real Estate Counsel for the program.

 

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PROPOSAL NO. 2:

RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS OF THE COMPANY FOR THE 2022 FISCAL YEAR

The Audit Committee has approved the engagement of Ernst & Young LLP to perform the audit of the financial statements and internal control over financial reporting for the fiscal year ending December 31, 2022.

Although ratification is not required by our bylaws or otherwise, the Board is submitting the selection of Ernst & Young LLP to our stockholders for ratification because we value our stockholders’ views on HGV’s independent registered public accounting firm. If our stockholders fail to ratify the selection, it will be considered as notice to the Board and the Audit Committee to consider the selection of a different firm. Even if the selection is ratified, the Audit Committee, in its discretion, may select a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of HGV and its stockholders.

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

AUDIT AND NON-AUDIT FEES

Ernst & Young LLP has been our independent public accountants since our spin-off from Hilton Worldwide, including for purposes of performing an audit of the financial statements included in HGV’s Annual Report on Form 10-K for the years ended December 31, 2021.

The following table presents fees for professional services rendered by Ernst & Young LLP for the audit of our financial statements for the fiscal years ended December 31, 2021 and 2020, and fees billed for other services rendered by Ernst & Young LLP for those periods.

 

		2021								2020
Audit Fees (1)		$	7,103,562							$	3,133,295
Audit-Related Fees (2)		$	1,179,000							$	691,200
Tax Fees (3)		$	1,180,314							$	1,601,127
All Other Fees			—								—
Total:		$	10,112,876							$	5,425,622

 

(1)

Includes fees for professional services rendered by Ernst & Young LLP for the audit of annual financial statements and internal controls over financial reporting, reviews of quarterly financial statements, comfort letters and consents issued in connection with SEC filings and statutory audits of foreign subsidiaries. The increase for the year ended December 31, 2021 compared to the year ended December 31, 2020 was primarily due to incremental audit fees related to the audit of Diamond.

 

(2)

Includes fees for professional services rendered by Ernst & Young LLP for agreed-upon procedures and attestation reports. For the year ended December 31, 2021, this amount includes fees related to services provided in connection with the Acquisition, including due diligence and transaction closing review.

 

(3)

Includes fees for professional services rendered by Ernst & Young LLP for tax compliance, tax consulting, transfer pricing and tax advisory services.

The Audit Committee considered whether providing the non-audit services shown in this table was compatible with maintaining Ernst & Young LLP’s independence and concluded that it was. All audit and non-audit related services were pre-approved by the Audit Committee prior to such services being rendered.

Consistent with SEC policies regarding auditor independence and the Audit Committee’s charter, the Audit Committee has responsibility for engaging, setting compensation for and reviewing the performance of the

 

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independent registered public accounting firm. In exercising this responsibility, the Audit Committee has adopted policies and procedures that require the approval of the Audit Committee of all audit and permitted non-audit services provided by an independent registered public accounting firm prior to each engagement. These policies and procedures require that the Audit Committee be provided with sufficient information to allow it to identify the particular services being pre-approved and to assess the impact of the proposed services on the independence of the registered public accounting firm.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE

RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT

AUDITORS OF THE COMPANY FOR THE 2022 FISCAL YEAR.

 

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PROPOSAL NO. 3:

NON-BINDING ADVISORY VOTE ON EXECUTIVE COMPENSATION

In accordance with the requirements of Section 14A of the Exchange Act and the related rules of the SEC, our stockholders have the opportunity to cast an annual non-binding advisory vote to approve the compensation of our named executive officers, as disclosed pursuant to the SEC’s compensation disclosure rules in this Proxy Statement, including the Compensation Discussion and Analysis, the compensation tables, and the narrative disclosures that accompany the compensation tables (a “say-on-pay vote”).

At our 2017 annual meeting, HGV stockholders voted on an advisory basis to have a say-on-pay vote on an annual basis. In response to your input, our Board adopted a policy of including an advisory say-on-pay vote at each annual meeting of stockholders, until the next stockholder advisory vote on the frequency of future say-on-pay votes.

Accordingly, stockholders are being asked to approve, on a non-binding basis, the following resolution at the Annual Meeting:

“RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed in this Proxy Statement pursuant to the rules of the SEC, which includes the Compensation Discussion and Analysis, the compensation tables and the narrative discussion that accompanies the compensation tables, is hereby APPROVED.”

At the 2021 annual meeting, HGV stockholders approved the compensation paid to our named executive officers, with approximately 97% of the votes cast in favor of the Company’s executive compensation.

In deciding how to vote on this proposal at the Annual Meeting, the Board encourages you to read information on our compensation policies and decisions regarding the named executive officers presented under the heading “Compensation Discussion and Analysis,” as well as the discussion regarding the Compensation Committee under the heading “Corporate Governance and Board Matters—Board Committees—Compensation Committee” in this proxy statement.

Because your say-on-pay vote is advisory, it is not binding upon the Board; however, the Board values stockholders’ input, and the Compensation Committee will take into account the results of the 2022 say-on-pay vote when considering future executive compensation decisions.

The next advisory say-on-pay vote will occur at the annual meeting of stockholders in 2023.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE APPROVAL

OF THE COMPENSATION PAID TO OUR NAMED EXECUTIVE OFFICERS.

 

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REPORT OF THE AUDIT COMMITTEE

The Audit Committee operates pursuant to a charter, which is reviewed annually by the Audit Committee. Additionally, a brief description of the primary responsibilities of the Audit Committee is included in this Proxy Statement under the heading of “Corporate Governance and Board Matters—Board Committees—Audit Committee.” Under the Audit Committee charter, management is responsible for the preparation, presentation, and integrity of the Company’s financial statements, the application of accounting and financial reporting principles and our internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. The independent registered public accounting firm is responsible for auditing our financial statements and expressing an opinion as to their conformity with accounting principles generally accepted in the United States of America.

In the performance of its oversight function, the Audit Committee reviewed and discussed the audited financial statements and internal control over financial reporting of the Company with management and with the independent registered public accounting firm. The Audit Committee also discussed with the independent registered public accounting firm the matters required to be discussed by Public Company Accounting Oversight Board Auditing Standard No. 1301 “Communications with Audit Committee.” In addition, the Audit Committee received the written disclosures and the letters from the independent registered public accounting firm required by applicable rules of the Public Company Accounting Oversight Board regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence and discussed with the independent registered public accounting firm their independence.

Based upon the review and discussions described in the preceding paragraph, the Audit Committee recommended to the Board that the audited financial statements of the Company be included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the SEC.

Submitted by the Audit Committee of the Board of Directors:

Pamela H. Patsley, Chair

Brenda J. Bacon

David W. Johnson

 

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REPORT OF THE COMPENSATION COMMITTEE

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management. Based upon this review and discussion, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference into the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

Submitted by the Compensation Committee of the Board of Directors:

Paul W. Whetsell, Chair

David W. Johnson

Mark H. Lazarus

 

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COMPENSATION DISCUSSION AND ANALYSIS

(“CD&A”)

OUR NAMED EXECUTIVE OFFICERS

Our NEOs, based on total compensation paid during the fiscal year ended December 31, 2021, are set forth below.

 

Name		Position
Mark D. Wang		President and Chief Executive Officer
Daniel J. Mathewes		Senior Executive Vice President and Chief Financial Officer
Gordon S. Gurnik		Senior Executive Vice President and Chief Operating Officer
Charles R. Corbin		Executive Vice President and Chief Legal Officer
Pablo Brizi		Executive Vice President, Chief Human Resources Officer & Corporate Affairs
Dennis A. DeLorenzo(1)		Executive Vice President and Chief Sales Officer
Stan R. Soroka(1)		Executive Vice President and Chief Customer Officer

 

(1)

In connection with certain management restructuring changes in connection with the Acquisition, the Board determined that Messrs. DeLorenzo and Soroka were no longer “executive officers” within the meaning of Rule 3b-7 under the Securities Exchange Act of 1934, as amended effective as of August 2, 2021.

EXECUTIVE SUMMARY

Key 2021 Compensation Committee Actions

In February and March 2021, the Committee took certain key actions with respect to the 2021 executive compensation program for our executive officers, including our NEOs, as follows (each as further discussed later in this CD&A):

 

•

Limited base salary increases. The Committee did not increase the base salary for any of our NEOs other than for Mr. Mathewes (from $437,750 to $550,000). Mr. Mathewes had not received a salary increase since joining the Company in November 2018 and his salary was adjusted to more closely align with market pay levels of CFOs among our peer group companies.

 

•

Approved a short-term incentive plan based 50% on Economic Adjusted EBITDA and 50% on objectively measurable performance metrics specific to each individual NEO. Given the continued uncertainty of COVID-19 pandemic and consequent difficulty of planning and forecasting, the Committee determined that this change to the 2021 short-term incentive plan design appropriately balanced the executive team’s focus on overall profitability, shareholder interests, and performance metrics that focused each NEO on his individual contribution to Company performance. In 2022, the Committee approved a short-term incentive plan design based 70% on Economic Adjusted EBITDA and 30% on objectively measurable performance metrics specific to each individual NEO.

 

•

Approved a one-time increase to the executive officers’ long-term incentive (LTI) award value as compared to the 2020 LTI award value. To address increased retention needs and to recognize such executive officers’ performance that exceeded the Committee’s expectations during the COVID-19 pandemic, which performance is reflected in the Company’s stock price recovering from, and exceeding, pre-pandemic levels, and the Company’s Total Shareholder Return (“TSR”), the Committee approved a one-time increase to the executive officers’ LTI award value.

 

•

Adjusted the grant mix of LTI awards to 50% RSUs, 25% stock options and 25% PSUs. Due to difficulty in setting multi-year financial targets as a result of the continuing uncertainty from COVID-19 pandemic’s impact on the Company’s business, the Committee adjusted the grant mix of awards to 50% RSUs, 25% stock options and 25% PSUs, which adjusted grant mix also balanced the Committee’s focus on both performance and retention. In addition, the PSUs have a performance period commencing January 1, 2021 and ending December 31, 2022.

 

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•

Approved a new Executive Deferred Compensation Plan. The new EDCP, which became effective January 1, 2022, includes a Company contribution feature, as described in greater detail below.

Aligning Pay with Performance

As discussed later in this CD&A, the total direct compensation for our CEO and other NEOs is comprised of 62% and 47%, respectively, stock-based equity awards, demonstrating a strong alignment of our NEOs pay with the direct interests of our stockholders.

The tables below reflect the Company’s performance as measured by TSR—over one-year (2021), three-year (2019-2021) and five-year (2017—2021) periods.

 

		1-Yr				3-Yr				5-Yr
HGV			66.22	%			25.46	%			14.92	%
GICS 2530-Industry			15.25	%			10.67	%			10.54	%
R3K-Russell 3000			25.66	%			25.79	%			17.97	%

Source: Compustat. As of December 31, 2021

Key Compensation Committee Actions Related to the Acquisition

In addition to the actions described above, the Committee took certain key actions with respect to the executive compensation program for our executive officers, including our NEOs, as a result of the Acquisition (each as further discussed later in this CD&A:

 

•

Approved performance-based transaction incentive awards (“Transaction Incentive Awards”) consisting of performance-based restricted stock units for certain executive officers and employees, including the NEOs. In order to create specific performance incentives tied directly to the success of the Acquisition, and to continue to create high levels of shareholder return, the Committee approved a one-time grant of performance-based restricted stock units. These Transaction Incentive Awards may be earned only upon achievement of pre-established elevated performance goals related to the run rate cost savings and Adjusted EBITDA at the end of the performance period (fiscal 2023). If threshold performance levels for these metrics are not achieved by the end of fiscal 2023, then the Transaction Incentive Awards will not be earned and will be forfeited by the NEOs.

 

•

Approved increases to compensation for certain NEOs. In light of the added scope of responsibility for certain executive roles post transaction, the Committee increased the base salaries for Messrs. Mathewes, Gurnik and Brizi to $650,000, $650,000 and $450,000, respectively, effective as of August 2, 2021. The Committee also increased Mr. Gurnik’s target STI award value to 125% of base salary, effective as of August 2, 2021 and, LTI award value to 250% of base salary, effective for the annual equity grant to occur in March 2022. Because these increases were made at the time of the transaction, no additional increases were made during the normal merit planning process for 2022.

 

•

Approved a modified 2021 annual cash incentive award program to prevent unintended higher payouts in connection with the Acquisition. Pursuant to the modified program: (i) for the period commencing January 1, 2021 and ending on July 31, 2021, annual cash incentive awards were earned based upon achievement of pre-Acquisition performance targets for such period; and (ii) for the period commencing August 1, 2021 and ending on December 31, 2021, short-term incentive awards were earned based upon achievement of higher post-Acquisition performance targets established for such period. Without such modification, the actual annual cash incentive awards earned by our NEOs for 2021 would have been disproportionately higher due to the fact that the performance targets were set prior to the Acquisition and did not take into account the accretive impact of the Acquisition on the performance of the Company.

 

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•

Approved proportionate adjustments (increases) to the performance goals for 2019, 2020 and 2021 Performance RSUs to prevent unintended higher payouts in connection with the Acquisition. As required by the 2017 Omnibus Incentive Plan, as amended (the “Incentive Plan”) to prevent substantial dilution or enlargement of the rights in connection with certain corporate transactions, such as the Acquisition, the Committee approved certain adjustments to the performance goals associated with outstanding performance-based restricted stock units to reflect the projected effect of the Acquisition. In all cases, these adjustments were to increase the required performance levels needed to achieve threshold, target, and maximum vesting levels by factoring in the acquisition and integration of Diamond Resorts. Consistent with the annual cash incentive award program, without such adjustment, the 2019, 2020 and 2021 Performance RSUs would have been disproportionately positively impacted due to the fact that the performance targets were set prior to the Acquisition and did not take into account the accretive impact of the Acquisition on performance. As discussed in greater detail later in this CD&A, the 2019 Performance RSUs were earned at 0% of target and, accordingly, no shares of common stock were issued in settlement of the 2019 Performance RSUs. The Committee currently expects that it is highly unlikely for the 2020 Performance RSUs to result in any payout based on current projections.

 

•

Terminated the 2017 Executive Deferred Compensation Plan (“EDCP”). The Acquisition resulted in a required distribution of account balances under the EDCP in accordance with its terms. On July 28, 2021, the Compensation Committee approved the termination of the EDCP effective as of the closing of the Acquisition.

2021 COMPANY PERFORMANCE AND PAY RESULTS

As discussed earlier in this Proxy Statement, completion of the Acquisition was, and the integration continues to be, transformative for the Company and we believe continues to be beneficial to our stockholders. Other highlights of HGV’s financial performance, which includes achievement of certain historically high financial results, for the fiscal year ended December 31, 2021¹ include:

 

•

Total revenues were $2,335 million, net income was $176 million and diluted earnings per share was $1.75;

 

•

Adjusted EBITDA was $716 million;

 

•

Contract Sales increased by $824 million to $1,352 million, compared to 2020;

 

•

Tour flow increased by 170,959 to 298,044, compared to 2020;

 

•

Volume per guest increased 11.4% to $4,332, compared to 2020;

 

•

Net Owner Growth (NOG) for the Legacy-HGV business for the 12 months ended Dec. 31, 2021 was 1.6%; and

 

•

1-Yr TSR was 66.22%.

 

1

Information in this Proxy Statement includes discussion of financial metrics that are not calculated in accordance with U.S. GAAP, including Adjusted EBITDA and Economic Adjusted EBITDA. Please see Appendix A for additional information and a reconciliation of certain of these measures to financial measures derived in accordance with U.S. GAAP.

 

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2021 EXECUTIVE COMPENSATION DESIGN AND DECISIONS

The Committee determined our executive compensation philosophy, strategy and program design, as well as compensation levels for our NEOs. The Committee continues to focus our executive compensation program on furthering alignment between compensation and HGV’s growth and the long-term interests of our stockholders. In reviewing our executive compensation philosophy, strategy and program design and in setting compensation levels for our NEOs for 2021, the Committee considered, among other factors, the key financial and operating metrics that drive performance of HGV and stockholder value; the objectives of and risks related to our operations; and the components and amounts of executive compensation at companies within our peer group based on data provided by Pearl Meyer, the Committee’s independent compensation consultant.

An overview of our 2021 executive compensation program is set forth below.

Overview

Compensation Philosophy. Our compensation philosophy is designed to achieve a number of goals, including attracting and retaining the highest quality executives, providing market competitive compensation opportunities, aligning pay with performance and stockholder value, and emphasizing performance-based compensation. The Committee has determined that our compensation program should be comprised of three primary components (base salary, short-term cash incentive awards and long-term incentive awards) in order to cultivate long-term value creation without unnecessary risk, reward the successful execution of our business strategy, and create an ownership culture.

An overview of the three primary components of our 2021 compensation program is set forth below.

 

Compensation Element		Form		Objectives
Base Salary   Fixed, Short-Term		Cash		•  Attract and retain high quality executives to drive our success   •  Align with external competitive level and internal parity for each role, responsibility, and experience
Short-term Incentive   At-risk, short-term (annual periods)		Cash		•  Reward for our overall and business area financial results   •  Align actual pay-out based on achievement of our overall and business area performance goals
Long-term Incentive   At-risk, medium to long-term		Equity, including:   Service RSUs   Stock Options   Performance RSUs		•  Reward for our future performance and align with interests of our stockholders   •  Retain key executives through vesting over multi-year periods, with continued employment required through the applicable vesting date   •  Incentivize achievement of pre-established objectives tied to Economic Adjusted EBITDA and Contract Sales

 

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Executive Compensation Practices

General. The Committee has adopted a number of overall executive compensation practices and policies, all of which the Committee believes to represent sound overall governance of executive compensation.

 

What We Do (Best Practices)		What We Don’t Do (Best Practices)
✓ Executive sessions without management   ✓ Independent compensation consultant   ✓ Significant percentage of pay “at risk”   ✓ Significant use of equity-based pay   ✓ Three-year vesting on service-based equity awards   ✓ Multi-year performance periods on performance-based equity awards   ✓ Capped incentive opportunities   ✓ Clawback policy   ✓ Robust stock ownership requirements   ✓ Efficient use of equity		x   Excessive severance   x   Automatic single-trigger equity acceleration for change in control, if the awards are assumed in the transaction   x   Excise tax gross-ups   x   Option repricing or buyouts   x   Provide for reload awards   x   Pay dividends or dividend equivalents on unvested awards

Factors Considered in Setting Compensation. In reviewing and approving the components of our executive compensation program, the Committee works with Pearl Meyer and select members of senior management, and considers the following key factors in totality, without assigning any particular weight to any particular factor:

 

•

the Committee’s determinations as to our compensation philosophy and program design;

 

•

the performance of the HGV business and our executives;

 

•

the results of our say-on-pay advisory vote;

 

•

internal pay equity among the HGV leadership team;

 

•

executive retention and succession planning;

 

•

the objective of aligning stockholder interests by having a significant portion of compensation comprised of long-term equity-based awards;

 

•

the views and recommendations of select members of senior management; and

 

•

the views and recommendations of Pearl Meyer, including external market data provided by Pearl Meyer.

Role of the Compensation Committee. The Committee establishes the overall executive compensation philosophy and strategy, sets and approves compensation for our NEOs, and approves all incentive plan designs, goals, and awards affecting executive officers, including our NEOs. The Committee also approves all equity compensation plans and awards. In performing its role, the Committee receives input from the CEO, select members of senior management, and Pearl Meyer.

Role of Management. The CEO, Chief Human Resources Officer, and General Counsel routinely provide information, advice, and recommendations to the Committee. Other members of senior management may be called upon to provide information to the Committee as well. The Committee regularly meets in executive session without members of senior management present, and members of senior management are not present for discussions regarding his or her specific compensation.

Role of the Independent Compensation Consultant. Pearl Meyer reports to and is directed by the Committee. Pearl Meyer routinely provides information, advice, and recommendations to the Committee on matters pertaining to executive and non-employee director compensation. In selecting Pearl Meyer, the Committee considered the independence factors prescribed by applicable regulations and concluded that none of the work provided by Pearl Meyer raised any conflict of interest and determined Pearl Meyer met the independence criteria. Pearl Meyer provides no services to HGV other than compensation consulting services.

 

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Peer Group Comparisons. The Committee annually reviews and approves any peer group that will be used for executive compensation benchmarking in consultation with its independent compensation consultant and considers the benchmark data as one of many factors when making pay determinations. Pearl Meyer recommended and the Committee approved the following peer group (the “Initial 2021 peer group”), which Pearl Meyer used in making compensation recommendations for the first part of 2021. The Initial 2021 peer group is the same as the 2020 peer group. The Committee reviewed peer group data in setting compensation for 2021.

 

Travel + Leisure Co. (f/k/a Wyndham     Destinations, Inc.)		Marriott Vacations Worldwide Corp.		Penn National Gaming, Inc.
Choice Hotels International, Inc.(1)		SeaWorld Entertainment, Inc.(1)		Cinemark Holdings, Inc.(1)
Hyatt Hotels Corporation		Red Rock Resorts, Inc.(1)		Eldorado Resorts, Inc.(1)
The Howard Hughes Corporation(1)		Six Flags Entertainment Corporation(1)
Boyd Gaming Corporation		Extended Stay America, Inc.(1)
Vail Resorts Inc.		Cedar Fair, LP(1)

In connection with the Acquisition and in light of the significant change to the Company’s size, in May 2021, the Committee approved an updated peer group (the “New Peer Group”) to be used for the remainder of fiscal 2021 and fiscal 2022.

 

Travel + Leisure Co. (f/k/a Wyndham     Destinations, Inc.)		Marriott Vacations Worldwide Corp.
Royal Caribbean Group(2)		Norwegian Cruise Line Holdings Ltd.(2)
Hyatt Hotels Corporation		Host Hotels & Resorts, Inc.(2)
Darden Restaurants, Inc.(2)		Penn National Gaming, Inc.
Boyd Gaming Corporation		Park Hotels & Resorts Inc.(2)
Vail Resorts Inc.		Caesars Entertainment, Inc.(2)

 

(1)	Not included in the New Peer Group.

(2)	New addition to the New Peer Group.

Say on Pay Vote. Each year, HGV provides stockholders with a say-on-pay advisory vote on our executive compensation program. At the 2021 annual meeting of stockholders, approximately 97% of the votes cast for the say-on-pay proposal were in favor of our executive compensation program and policies. Accordingly, the Committee determined that the say on pay vote did not necessitate substantive changes to our executive compensation program. To the extent there is any significant vote against the NEO compensation, the Committee will consider the impact of such vote on its future compensation policies and decisions.

2021 NEO Compensation Structure

 

						Short-Term Incentive   Opportunity												Long-Term Incentive   Opportunity
Name		Base Salary				% Salary				$ Value				Target Total   Cash				% Salary(2)				$ Value(2)				Target Total   Direct(2)
Mark D. Wang		$	950,000				150%			$	1,425,000			$	2,375,000				400%			$	3,800,000			$	6,715,000
Daniel J. Mathewes(1)		$	650,000				125%			$	812,500			$	1,462,500				250%			$	1,375,000			$	2,837,500
Gordon S. Gurnik(1)		$	650,000				125%			$	812,500			$	1,462,500				200%			$	1,030,000			$	2,492,500
Charles R. Corbin		$	477,405				100%			$	477,405			$	954,810				200%			$	954,810			$	1,909,620
Pablo Brizi(1)		$	450,000				100%			$	450,000			$	900,000				200%			$	800,000			$	1,700,000
Dennis A. DeLorenzo		$	437,091				200%			$	874,182			$	1,311,273				225%			$	983,455			$	2,294,728
Stan R. Soroka		$	437,091				150%			$	655,637			$	1,092,728				200%			$	874,182			$	1,966,910

 

(1)	For Messrs. Mathewes, Gurnik and Brizi, reflects the increase to base salary and, for Mr. Gurnik, the short-term incentive opportunity, effective as of August 2, 2021.

(2)	Excludes both the one-time Transaction Incentive Awards discussed below and the one-time increase to the NEOs’ LTI award value as discussed above, as such amounts are not part of the Company’s regular compensation structure.

 

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Our compensation structure reflects the desired pay-for-performance orientation with an emphasis on long-term, equity-based incentive compensation opportunities tied to stockholder value creation, as evidenced by the following mix.

 

 

2021 CEO TARGET PAY MIX		2021 OTHER NEOS AGGREGATE TARGET PAY MIX

 

(1)	Excludes both the one-time increase to the NEOs’ LTI award value and the one-time Transaction Incentive Awards.

Base Salary

In February 2021, the Committee reviewed and set the base salaries for our NEOs for 2021 and, as discussed above under “Key 2021 Compensation Committee Actions,” did not increase base salaries for our NEOs other than for Mr. Mathewes. In addition, as discussed above, under “Key Compensation Committee Actions Related to the Acquisition,” the Committee increased the base salaries for each of Messrs. Mathewes, Gurnik and Brizi, in recognition of increased scope of responsibilities following the acquisition. Consequently, Messrs. Mathewes, Gurnik and Brizi did not and will not receive salary increases in 2022.

 

Name		2020 Base Salary		2021 Base Salary
Mark D. Wang		$950,000		$950,000
Daniel J. Mathewes		$437,750		$650,000(1)
Gordon S. Gurnik		$515,000		$650,000(2)
Charles R. Corbin		$477,405		$477,405
Pablo Brizi		$400,000		$450,000(3)
Dennis A. DeLorenzo		$437,091		$437,091
Stan R. Soroka		$437,091		$437,091

 

(1)

$550,000 effective January 9, 2021 and $650,000 effective August 2, 2021.

(2)

$650,000 effective August 2, 2021.

(3)

$450,000 effective August 2, 2021.

Short-Term Incentive Compensation

Annual Cash Incentive Program. The Committee approved the 2021 annual cash incentive program which rewards participants for their contributions towards specific annual, short-term financial and operational goals that are tied to the overall HGV strategy and stockholder return. It is designed to motivate participants to focus on strategic business results and initiatives. Each participant’s annual cash incentive award opportunity is based on a combination of corporate and objectively measurable individual performance objectives (as more fully described below) and is expressed as a percentage of the individual participant’s base salary in effect at fiscal year-end. Threshold, target and maximum annual incentive opportunities for our NEOs are approved annually by the Committee based on peer group benchmark data and the scope and impact the participant has on HGV’s overall results. The annual incentive opportunities for our NEOs remained the same from 2020 to 2021, with the exception of Mr. Gurnik whose opportunity was increased in connection with the Acquisition (as previously discussed). As discussed above, given the continued uncertainty of the COVID-19 pandemic and consequent

 

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difficulty of planning and forecasting, the Committee determined that the design of the 2021 short-term incentive plan design—based 50% on Economic Adjusted EBITDA and 50% on objectively measurable performance metrics specific to each individual NEO – appropriately balanced the NEO’s focus on overall profitability, stockholder interests, and performance metrics that focused each NEO on his individual contribution to Company performance. In 2022, the Committee approved a short-term incentive plan design based 70% on Economic Adjusted EBITDA and 30% on objectively measurable performance metrics specific to each individual NEO.

The threshold, target, and maximum payout levels for our NEOs as a percent of salary for the fiscal year ended December 31, 2021, as approved by the Committee are set forth in the table below.

 

Name		Threshold (50% of Target)		Target		Maximum (200% of Target)
Mark D. Wang		75%		150%		300%
Daniel J. Mathewes		62.5%		125%		250%
Gordon S. Gurnik		62.5%		125%(1)		250%
Charles R. Corbin		50%		100%		200%
Pablo Brizi		50%		100%		200%
Dennis A. DeLorenzo		100%		200%		400%
Stan R. Soroka		75%		150%		300%

 

(1)	Increased from 100% to 125% effective August 2, 2021 in connection with the Acquisition.

The Committee selected Economic Adjusted EBITDA as the corporate objective for 2021 because it is the primary measure that HGV uses internally to assess its financial performance. Individual performance objectives, as described below, are comprised primarily of quantitative, objective, and formulaic measures, such as applicable segment EBITDA, operating surplus or deficit, and cost savings. The Committee determined the individual performance objectives for our NEOs based on their respective areas of responsibilities and key functions associated with their respective roles.

 

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Each NEO’s annual cash incentive components, weightings and key primary individual performance goals for the fiscal year ended December 31, 2021 are set forth below.

 

Name		Corporate Performance Objective (Economic Adjusted EBITDA(1))		Individual Performance Objectives		Primary Individual Performance Goals
Mark D. Wang		50%		50%		•   Overall Company Contract Sales (10%)   •   Overall Company G&A (10%)   •   Net Owner Growth (10%)   •   Successfully Close the Acquisition within the contract window (20%)
Daniel J. Mathewes		50%		50%		•   Overall Company G&A (10%)   •   Overall Company EBITDA Margin (10%)   •   Overall Company Inventory and CAPEX Spend (10%)   •   Successfully Close the Acquisition within the contract window (20%)
Gordon S. Gurnik		50%		50%		•   Overall Company Contract Sales (10%)   •   Club Business Segment Adjusted EBITDA (10%)   •   Build a post-acquisition combined, high-performing culture (10%)   •   Successfully Close the Acquisition within the contract window (20%)
Charles R. Corbin		50%		50%		•   Build a high-performing Legal and Compliance function post-acquisition (20%)   •   Mitigate overall litigation cost (10%)   •   Successfully Close the Acquisition within the contract window (20%)
Pablo Brizi		50%		50%		•   Overall Company G&A (10%)   •   Define, build, and implement the future state of the combined Company organization post acquisition (20%)   •   Successfully Close the Acquisition within the contract window (20%)
Dennis A. DeLorenzo		50%		50%		•   Overall Contract Sales Mainland (20%)   •   Overall Sales & Marketing Contribution Mainland (20%)   •   Net Owner Growth (10%)
Stan R. Soroka		50%		50%		•   Club Business Segment Adjusted EBITDA (10%)   •   Resorts Balanced Scorecard and Quality Ratings (20%)   •   Five New, On-Time Property Openings (10%)   •   Develop Talent Strategy to integrate the newly acquired resorts (10%)

 

(1)

Economic Adjusted EBITDA is defined as Adjusted EBITDA, as further adjusted for net recognitions and deferrals of revenues and related direct expenses from the sales of VOls under construction. Additional information and a reconciliation of Adjusted EBITDA to financial measures derived in accordance with U.S. GAAP for the fiscal year ended December 31, 2021 is set forth in Appendix A to this Proxy Statement.

Following the performance period, the corporate and individual performance objectives of our annual cash incentive program is assessed and rated based on the level of achievement. Our actual annual cash incentive awards are calculated by (i) multiplying each participant’s base salary by his or her target award opportunity and (ii) adjusting such result by an achievement factor based on the combined achievement of the corporate

 

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objectives and the applicable individual performance objectives. The Committee assesses the achievement of individual performance objectives and the achievement factor adjustment with respect to Mr. Wang and calculates and approves his annual cash incentive award. Mr. Wang and the HGV compensation department assess the achievement of individual performance objectives and the achievement factor for the other NEOs and calculate the annual cash incentive awards. The Committee then reviews and evaluates the information provided by Mr. Wang and the HGV compensation department and, with any appropriate adjustments, approves the appropriate annual cash incentive awards payable to our other NEOs.

As discussed earlier in this CD&A, however, in connection with the closing of the Acquisition, and to prevent unintended higher payouts, the Committee modified the corporate performance objective component of the 2021 annual cash incentive program as follows:

 

•

for the period commencing January 1, 2021 and ending on July 31, 2021 (the “1st Half Performance Period”), annual cash incentive awards were earned based upon achievement of pre-Acquisition performance targets for the 1st Half Performance Period; and

 

•

for the period commencing August 1, 2021 and ending on December 31, 2021 (the “2nd Half Performance Period”), annual cash incentive awards were earned based upon achievement of post-Acquisition performance targets established for the 2nd Half Performance Period.

The corporate and specific individual objectives and actual performance results under the modified annual cash incentive program for the fiscal year ended December 31, 2021 are set forth in the tables below:

Corporate Objectives Targets and Achievement

 

		1st Half Performance Period Economic Adjusted EBITDA(1)		2nd Half Performance Period Economic Adjusted EBITDA(1)		Payout as a   % of   Target(3)
Threshold		$96		$275		50%
Target		$110-130(2)		$334-354(2)		100%
Maximum		$138		$396		200%
Actual Performance		$196		$435
2021 Payout % of Target		200%		200%

 

(1)

Dollars in millions.

(2)

Flat payout at target for the specified range.

(3)

For actual performance between the specified threshold, target and maximum levels, the resulting payout percentage is adjusted on a linear basis.

Corporate Objectives Payout

 

Name		Target Annual Cash Incentive Opportunity		Achievement Factor as a Percent of Target Award		2021 Amount Earned under Annual Cash Incentive Program
Mark D. Wang		$712,500		200%		$1,425,000
Daniel J. Mathewes		$369,949		200%		$739,898
Gordon S. Gurnik		$319,853		200%		$639,705
Charles R. Corbin		$238,703		200%		$477,405
Pablo Brizi		$210,479		200%		$420,959
Dennis A. DeLorenzo		$437,091		200%		$874,182
Stan R. Soroka		$327,819		200%		$655,637

 

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Individual Objectives Payout Table

 

Name		Target Annual Cash Incentive Opportunity		Achievement Factor as a Percent of Target Award		2021 Amount Earned under Annual Cash Incentive Program
Mark D. Wang		$712,500		126%		$894,232
Daniel J. Mathewes		$369,949		191%		$705,169
Gordon S. Gurnik		$319,853		163%		$521,188
Charles R. Corbin		$238,703		140%		$334,184
Pablo Brizi		$210,479		191%		$401,468
Dennis A. DeLorenzo		$437,091		123%		$537,653
Stan R. Soroka		$327,819		165%		$541,116

Total Payout (Corporate and Individual Objectives)

 

Name		Target Annual Cash Incentive Opportunity		Achievement Factor as a Percent of Target Award		2021 Amount Earned under Annual Cash Incentive Program
Mark D. Wang		$1,425,000		163%		$2,319,232
Daniel J. Mathewes		$739,897		195%		$1,445,067
Gordon S. Gurnik		$639,705		181%		$1,160,894
Charles R. Corbin		$477,405		170%		$811,589
Pablo Brizi		$420,959		195%		$822,427
Dennis A. DeLorenzo		$874,182		162%		$1,411,835
Stan R. Soroka		$655,637		183%		$1,196,753

Long-Term Incentive Compensation

Our long-term incentive compensation is awarded under our stockholder-approved Incentive Plan, and provides an opportunity for certain employees, including our NEOs, to increase their ownership interest in HGV through grants of equity-based awards. Under the Incentive Plan, equity-based awards may be awarded in the form of stock options, stock appreciation rights, restricted stock, RSUs, other equity-based awards, other cash-based awards and performance compensation awards. Each NEO’s target long-term incentive opportunity is approved annually by the Committee based on peer group benchmark data and the scope and impact the executive has on HGV’s overall results. In order to address increased retention needs and to recognize such executive officers’ performance that exceeded the Committee’s expectations during the COVID-19 pandemic (which performance is reflected, in part, in the Company’s stock price recovering from, and exceeding, pre-pandemic levels), the Committee approved a one-time increase to the executive officers’ LTI award value as compared to the 2020 LTI award value, as follows:

 

		2020 LTI Value				% Salary				2021 LTI Value				% Salary
Mark D. Wang		$	3,800,000				400	%		$	7,600,000				800	%
Daniel J. Mathewes		$	956,250				225	%		$	2,200,000				400	%
Gordon S. Gurnik		$	1,000,000				200	%		$	1,802,500				350	%
Charles R. Corbin		$	927,000				200	%		$	1,670,918				350	%
Pablo Brizi			—				—			$	1,200,000				300	%
Dennis A. DeLorenzo		$	954,810				225	%		$	1,639,091				375	%
Stan R. Soroka		$	848,720				200	%		$	1,529,819				350	%

 

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The Committee believes that a significant portion of our long-term incentive compensation for our CEO and Executive Vice Presidents should be in the form of Performance RSUs with appropriate performance metrics aligned with HGV’s long-term business goals and to further align the interests of our executives with the interests of our stockholders. As discussed above, however, due to difficulty in setting multi-year financial targets as a result of the continuing uncertainty from COVID-19’s impact on the Company’s business, and to maximize the Company’s retention of top talent, the Committee determined that 25% of the long-term incentive compensation awarded to our Chief Executive Officer and our Executive Vice Presidents would be in the form of Performance RSUs, along with 50% Service RSUs and 25% stock options. Nevertheless, the fact remains that under this structure, 50% of the LTI value is at-risk as it is based on performance conditions, specifically either (i) Company performance as measured by Economic Adjusted EBITDA and Contract Sales, or (ii) the appreciation of the value of the Company’s stock. The Committee determined that this design was in the best long-term interest of its stockholders and further aligns executive pay with performance.

In 2021, the Committee granted long-term incentive awards to our NEOs based on the mix and weighting set forth in the chart below.

 

Award Type		Weighting		Vesting		Value Tied To
Service RSUs		50% of total award		Vest over three years in equal annual installments		Stock price
Stock Options		25% of total award		Vest over three years in equal annual installments, with a 10-year expiration from the date of grant		Stock price appreciation
Performance RSUs		25% of total award		Vest at the end of a two-year period in an amount based on the level of performance achieved		Economic Adjusted EBITDA Targets (50%)   Contract Sales Targets (50%)

The Committee determined that Economic Adjusted EBITDA and Contract Sales are appropriate performance measures for the Performance RSUs because they align senior management’s interests with stockholders and incentivize senior management to achieve the Company’s long-term strategic goals and aligns with objective metrics commonly used by industry peers and comparable publicly-traded companies. We have not disclosed the specific targets for Economic Adjusted EBITDA and Contract Sales for the 2020 or 2021 Performance RSUs as those internal targets are highly confidential. Disclosing the specific Economic Adjusted EBITDA and Contract Sales targets would provide competitors and third parties with insights into our internal planning processes which might allow our competitors to predict certain business strategies and cause us competitive harm if known in the marketplace. In general, and in keeping with the best interest of stockholders, the Committee sets Economic Adjusted EBITDA and Contract Sales targets from year to year that it believes to be challenging but attainable in the absence of significant deterioration in macroeconomic or broader industry conditions. The performance period generally begins on January 1 of the fiscal year in which the Performance RSUs are granted and ends on December 31 of the third year thereafter or the second year thereafter in the case of the 2021 Performance RSUs. Following the conclusion of the applicable performance period, the Committee will determine the number, if any, of Performance RSUs earned based on the level of achievement of the performance measures shown below. For actual performance between the specified threshold, target and maximum levels, the resulting payout percentage will be adjusted on a linear basis.

 

Level of Achievement		Percentage of     Award Earned
Below Threshold		0%
Threshold		50%
Target		100%
Maximum		200%

 

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The Committee approved the following LTI awards for the NEOs:

 

		LTI Value ($)				Stock Options (#)(1)				RSUs (#)(1)				PSUs (#)(2)
Mark D. Wang		$	7,600,000				142,857				99,424				49,712
Daniel J. Mathewes		$	2,200,000				41,353				28,780				14,390
Gordon S. Gurnik		$	1,802,500				33,881				23,580				11,790
Charles R. Corbin		$	1,670,918				31,408				21,859				10,929
Pablo Brizi		$	1,200,000				22,556				15,698				7,849
Dennis A. DeLorenzo		$	1,639,091				30,809				21,442				10,721
Stan R. Soroka		$	1,529,819				28,755				20,013				10,006

 

(1)	Ratably vest over three years, subject to the executive’s continued employment with the Company with certain exceptions as provided in the Incentive Plan and applicable award agreement.

(2)

Cliff vest based on the level of achievement of pre-established performance metrics following a two-year performance period commencing January 1, 2021 and ending December 31, 2022, subject to the executive’s continued employment with the Company with certain exceptions as provided in the Incentive Plan and applicable award agreement.

Transaction Incentive Awards

As discussed above, the Committee approved Transaction Incentive Awards consisting of Performance RSUs for certain employees, including the NEOs, in connection with the closing of the Acquisition. The Committee considered the past, current and future efforts by the Company’s NEOs necessary to a successful completion and integration, as well as the transformative nature of the Acquisition. The Committee determined that the Transaction Incentive Awards were an effective tool to reward and incentivize NEOs for their efforts, while also continuing to tie pay to performance (including but not limited to the successful integration of the two companies). The Transaction Incentive Awards cliff vest based on the level of achievement of pre-established performance goals relating to run rate cost savings (weighted 67%) and combined company, post-acquisition Adjusted EBITDA (weighted 33%) following a two and one-half year performance period commencing on August 2, 2021, the closing date of the Acquisition, and ending December 31, 2023, subject to the NEO’s continued employment with the Company. The NEOs will earn the Transaction Incentive Awards only if these two objective and formulaic performance goals related to the Acquisition are achieved, which would indicate a successful integration of the Acquisition and reflect further alignment of executive performance with stockholder value.

Taking into account, among other factors, industry benchmarks for comparable transactions of similar magnitude, the Committee approved Transaction Incentive Awards for the NEOs as follows:

 

		Transaction Incentive Award Value		Performance RSUs (#)(1)
Mark D. Wang		$3,000,000		74,497
Daniel J. Mathewes		$1,700,000		42,215
Gordon S. Gurnik		$1,700,000		42,215
Charles R. Corbin		$1,700,000		42,215
Pablo Brizi		$1,200,000		29,798
Dennis A. DeLorenzo		$   500,000		12,416
Stan R. Soroka		$   500,000		12,416

Adjustment of Performance Metrics

Pursuant to the Incentive Plan, upon the occurrence of certain corporate events or transactions involving the Company (referred to in the Incentive Plan as an “Adjustment Event”), the Committee is required, in respect of any such Adjustment Event, to make certain proportionate adjustments to outstanding awards as it deems equitable, including any applicable performance measures. The Acquisition qualified as an Adjustment Event and, accordingly, the Committee approved certain adjustments (increases) to the performance goals for the 2019, 2020 and 2021 Performance RSUs. The performance goals were increased by adding the consolidated forecast

 

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