Preliminary Proxy Statement

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.     )

Filed by the Registrant  x                              Filed by a Party other than the Registrant  ¨

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x Preliminary Proxy Statement
¨   Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
¨   Definitive Proxy Statement
¨   Definitive Additional Materials
¨   Soliciting Material under § 240.14a-12

 

MANPOWERGROUP 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):

 

x No fee required.

 

¨ Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

 

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  (2) Aggregate number of securities to which the transaction applies:

 

          

 

  (3) Per unit price or other underlying value of the transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

 

          

 

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¨ Fee paid previously with preliminary materials.

 

¨ Check box if any part of the fee is offset as provided by Exchange Act Rule 240.0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

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MANPOWERGROUP INC.

100 MANPOWER PLACE

MILWAUKEE, WISCONSIN 53212

 

 

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

April 30, 2013

To the Shareholders of ManpowerGroup Inc.:

The 2013 Annual Meeting of Shareholders of ManpowerGroup Inc. will be held at the International Headquarters of ManpowerGroup, 100 Manpower Place, Milwaukee, Wisconsin, on April 30, 2013, at 10:00 a.m., local time, for the following purposes:

 

  (1) To elect five individuals nominated by the Board of Directors of ManpowerGroup to serve until 2016 as Class II directors;

 

  (2) To ratify the appointment of Deloitte & Touche LLP as our independent auditors for 2013;

 

  (3) To hold an advisory vote on approval of the compensation of our named executive officers;

 

  (4) To approve the proposed amendment to the Articles of Incorporation of ManpowerGroup Inc. to declassify the Board of Directors; and

 

  (5) To transact such other business as may properly come before the meeting.

Shareholders of record at the close of business on February 19, 2013 are entitled to notice of and to vote at the annual meeting and at all adjournments of the annual meeting.

Holders of a majority of the outstanding shares must be present in person or by proxy in order for the annual meeting to be held. Therefore, whether or not you expect to attend the annual meeting in person, you are urged to vote by a telephone vote, by voting electronically via the Internet or by completing and returning the accompanying proxy in the enclosed envelope. Instructions for telephonic voting and electronic voting via the Internet are contained on the accompanying proxy card. If you attend the meeting and wish to vote your shares personally, you may do so by revoking your proxy at any time prior to the voting thereof. In addition, you may revoke your proxy at any time before it is voted by advising the Secretary of ManpowerGroup in writing (including executing a later-dated proxy or voting via the Internet) or by telephone of such revocation.

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to be held on April 30, 2013: The annual report and proxy statement of ManpowerGroup are available at www.manpowergroup.com/annualmeeting.

Richard Buchband, Secretary

March 11, 2013


MANPOWERGROUP INC.

100 Manpower Place

Milwaukee, Wisconsin 53212

March 11, 2013

PROXY STATEMENT

The enclosed proxy is solicited by the board of directors of ManpowerGroup Inc. for use at the annual meeting of shareholders to be held at 10:00 a.m., local time, on April 30, 2013 or at any postponement or adjournment of the annual meeting, for the purposes set forth in this proxy statement and in the accompanying notice of annual meeting of shareholders. The annual meeting will be held at ManpowerGroup’s International Headquarters, 100 Manpower Place, Milwaukee, Wisconsin.

The expenses of printing and mailing proxy material, including expenses involved in forwarding materials to beneficial owners of stock, will be paid by us. No solicitation other than by mail is contemplated, except that our officers or employees may solicit the return of proxies from certain shareholders by telephone. In addition, we have retained Georgeson Shareholder Communications Inc. to assist in the solicitation of proxies for a fee of approximately $9,500 plus expenses.

Only shareholders of record at the close of business on February 19, 2013 are entitled to notice of and to vote the shares of our common stock, $.01 par value, registered in their name at the annual meeting. As of the record date, we had outstanding 76,862,883 shares of common stock. The presence, in person or by proxy, of a majority of the shares of the common stock outstanding on the record date will constitute a quorum at the annual meeting. Abstentions and broker non-votes, which are proxies from brokers or nominees indicating that such persons have not received instructions from the beneficial owners or other persons entitled to vote shares, will be treated as present for purposes of determining the quorum. Each share of common stock entitles its holder to cast one vote on each matter to be voted upon at the annual meeting. With respect to the proposals to elect the individuals nominated by our Board of Directors to serve as Class II directors, to ratify the appointment of Deloitte & Touche LLP as our independent auditors for 2013, and the advisory vote on approval of the compensation of our named executive officers abstentions and broker non-votes will not be counted as voting on the proposals. With respect to the proposal to approve the proposed amendment to the Articles of Incorporation of ManpowerGroup Inc. to declassify the board of directors, abstentions and broker non-votes will have the effect of votes against the proposal.

This proxy statement, notice of annual meeting of shareholders and the accompanying proxy card, together with our annual report to shareholders, including financial statements for our fiscal year ended December 31, 2012, are being mailed to shareholders commencing on or about March 21, 2013.

If the accompanying proxy card is properly signed and returned to us and not revoked, it will be voted in accordance with the instructions contained in the proxy card. Each shareholder may revoke a previously granted proxy at any time before it is exercised by advising the secretary of ManpowerGroup in writing (either by submitting a duly executed proxy bearing a later date or voting via the Internet) or by telephone of such revocation. Attendance at the annual meeting will not, in itself, constitute revocation of a proxy. Unless otherwise directed, all proxies will be voted for the election of each of the individuals nominated by our board of directors to serve as Class II directors, will be voted for the appointment of Deloitte & Touche LLP as our independent auditors for 2013, will be voted for approval of the amendment of the Articles of Incorporation of ManpowerGroup Inc. to declassify the board of directors and will be voted for approval of the compensation of our named executive officers.


CORPORATE GOVERNANCE DOCUMENTS

Certain documents relating to corporate governance matters are available in print by writing to Mr. Richard Buchband, Secretary, ManpowerGroup Inc., 100 Manpower Place, Milwaukee, Wisconsin 53212 and on ManpowerGroup’s web site at www.manpowergroup.com/about/corporategovernance.cfm. These documents include the following:

 

   

Articles of Incorporation;

 

   

By-Laws;

 

   

Corporate governance guidelines;

 

   

Code of business conduct and ethics;

 

   

Charter of the nominating and governance committee, including the guidelines for selecting board candidates;

 

   

Categorical standards for relationships deemed not to impair independence of non-employee directors;

 

   

Charter of the audit committee;

 

   

Policy on services provided by independent auditors;

 

   

Charter of the executive compensation and human resources committee;

 

   

Executive officer stock ownership guidelines;

 

   

Outside director stock ownership guidelines; and

 

   

Foreign Corrupt Practices Act Compliance Policy.

Information contained on ManpowerGroup’s web site is not deemed to be a part of this proxy statement.

 

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

The following table lists as of the record date information as to the persons believed by us to be beneficial owners of more than 5% of our outstanding common stock:

 

Name and Address of

Beneficial Owners

   Amount and Nature of
Beneficial Ownership
    Percent of
Class(1)
 

T. Rowe Price Associates, Inc.

100 East Pratt Street

Baltimore, Maryland 21202

     11,524,991 (2)      15.0

Wellington Management Company, LLP.

280 Congress Street

Boston, Massachusetts 02210

     6,212,754 (3)      8.1

BlackRock, Inc.

40 East 52nd Street

New York, New York 10022

     5,158,580 (4)      6.7

 

(1) Based on 76,862,883 shares of common stock outstanding as of the record date.

 

(2) This information is based on a Schedule 13G filed on February 6, 2013. According to this Schedule 13G, these securities are owned by various individual and institutional investors for which T. Rowe Price Associates, Inc. (“Price Associates”) serves as investment adviser. Price Associates has sole voting power with respect to 2,526,049 shares held and sole dispositive power with respect to 11,524,991 shares held. For the purposes of the reporting requirements of the Securities Exchange Act of 1934, Price Associates is deemed to be a beneficial owner of such securities; however, Price Associates expressly disclaims that it is, in fact, the beneficial owner of such securities.

 

(3) This information is based on a Schedule 13G filed on February 14, 2013. According to this Schedule 13G, these securities are owned of record by clients of Wellington Management Company, LLP. Wellington Management Company, LLP has shared voting power with respect to 4,439,209 shares held and shared dispositive power with respect to 6,212,754 shares held.

 

(4) This information is based on a Schedule 13G filed on February 5, 2013, by BlackRock, Inc. on its behalf and on behalf of its following affiliates: BlackRock Advisors LLC, BlackRock Advisors (UK) Limited, BlackRock Asset Management Australia Limited, BlackRock Asset Management Canada Limited, BlackRock Japan Co. Ltd., BlackRock Capital Management, Inc., BlackRock Financial Management, Inc., BlackRock Fund Advisors, BlackRock Life Limited, BlackRock Institutional Trust Company, N.A., BlackRock Investment Management, LLC, BlackRock Investment Management (Australia) Limited, BlackRock Asset Management Ireland Limited, BlackRock (Luxembourg) S.A., BlackRock (Netherlands) B.V., BlackRock International Ltd, BlackRock Investment Management UK Ltd and BlackRock Fund Managers Limited. According to this Schedule 13G, these securities are owned of record by BlackRock, Inc. BlackRock, Inc. has sole voting power and sole dispositive power with respect to 5,158,580 shares held.

 

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1.  ELECTION OF DIRECTORS

ManpowerGroup’s directors are divided into three classes, designated as Class I, Class II and Class III, with staggered terms of three years each. The term of office of directors in Class II expires at the annual meeting. The board of directors proposes that the nominees described below, all of whom are currently serving as Class II directors, be elected as Class II directors for a new term of three years ending at the 2016 annual meeting of shareholders and until their successors are duly elected, except as otherwise provided in the Wisconsin Business Corporation Law. Ms. Boswell, Mr. Greenberg and Mr. Hueneke are all standing for re-election. Mr. Downe and Ms. Hemingway Hall were both appointed to the board of directors in May 2011 following the ratification of their appointments by ManpowerGroup’s shareholders at the 2011 annual meeting of shareholders, after being recommended for appointment to the board of directors by an independent director search firm and subsequently by the nominating and governance committee.

In accordance with our articles of incorporation and by-laws, a nominee will be elected as a director if the number of votes cast in favor of the election exceeds the number of votes cast against the election of that nominee. Abstentions and broker non-votes will not be counted as votes cast. If the number of votes cast in favor of the election of an incumbent director is less than the number of votes cast against the election of the director, the director is required to tender his or her resignation from the board of directors to the nominating and governance committee. Any such resignation will be effective only upon its acceptance by the board of directors. The nominating and governance committee will recommend to the board of directors whether to accept or reject the tendered resignation or whether other action should be taken. The board of directors will act on the recommendation of the nominating and governance committee and publicly disclose its decision, and the rationale behind its decision, within 90 days from the date of the announcement of the final results of balloting for the election.

 

Name

   Age     

Principal Occupation

and Directorships

Nominees for Directors — Class II Directors

Gina R. Boswell

     50       Executive Vice President, Personal Care, North America at Unilever since July 2011. President, Global Brands, of Alberto-Culver Company from January 2008 to July 2011. Senior Vice President and Chief Operating Officer — North America of Avon Products, Inc. from February 2005 to May 2007. Senior Vice President — Corporate Strategy and Business Development of Avon Products, Inc. from 2003 to February 2005. Prior thereto, an executive with Ford Motor Company, serving in various positions from 1999 to 2003. A director of ManpowerGroup since February 2007. No other public directorships in the past five years.

William Downe

     60       President and Chief Executive Officer of BMO Financial Group since March 2007. Chief Operating Officer of BMO Financial Group from 2006 to March 2007. Deputy Chair of BMO Financial Group and Chief Executive Officer, BMO Nesbitt Burns and Head of Investment Banking Group from 2001 to 2006. Vice Chair of Bank of Montreal, 1999 to 2001. Prior thereto, held various senior management positions at Bank of Montreal in Canada and the United States. A director of ManpowerGroup since May 2011. A director of BMO Financial Group. No other public directorships in the past five years.

Jack M. Greenberg

     70       Non-Executive Chairman of The Western Union Company since 2006. Also Non-Executive Chairman of InnerWorkings, Inc. since June 2010. Retired Chairman and Chief Executive Officer of McDonald’s Corporation from May 1999 to December 2002 and

 

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      Chief Executive Officer and President from August 1998 to May 1999. Director of The Allstate Corporation, InnerWorkings, Inc., Hasbro, Inc. and The Western Union Company. A director of ManpowerGroup for more than five years. No other public directorships in the past five years.

Patricia A. Hemingway Hall

     60       President and Chief Executive Officer of Health Care Service Corporation since November 2008. President and Chief Operating Officer of Health Care Service Corporation from November 2007 to November 2008. Executive Vice President of Internal Operations of Health Care Service Corporation from 2006 to 2007. Prior thereto held other senior management positions within Health Care Service Corporation since 1998. A director of ManpowerGroup since May 2011. No other public directorships in the past five years.

Terry A. Hueneke

     70       Retired Executive Vice President of ManpowerGroup from 1996 until February 2002. Senior Vice President — Group Executive of ManpowerGroup’s former principal operating subsidiary from 1987 until 1996. A director of ManpowerGroup for more than five years. No other public directorships in the past five years.
Class III Directors (term expiring in 2014)

Cari M. Dominguez

     63       Chair of the U.S. Equal Employment Opportunity Commission from 2001 to 2006. President, Dominguez & Associates, a consulting firm, from 1999 to 2001. Partner, Heidrick & Struggles, a consulting firm, from 1995 to 1998. Director, Spencer Stuart, a consulting firm, from 1993 to 1995. Assistant Secretary for Employment Standards Administration and Director of the Office of Federal Contract Compliance Programs, U.S. Department of Labor, from 1989 to 1993. Prior thereto, held senior management positions with Bank of America. A trustee of Calvert SAGE Funds since September 2008. A Director of Triple-S Management Corporation since 2012. A director of ManpowerGroup since May 2007.

Roberto Mendoza

     67       Senior Managing Director of Atlas Advisors LLC, an independent global investment banking firm, since March 2010. Partner of Deming Mendoza & Co. LLC, a corporate finance advisory firm, from January 2009 to March 2010. Non-executive Chairman of Trinsum Group, Inc., an international strategic and financial advisory firm, from February 2007 to November 2008. Chairman of Integrated Finance Limited, a financial advisory firm, from June 2001 to January 2007. Managing Director of Goldman Sachs & Co. from September 2000 to March 2001. Director and Vice Chairman of J.P. Morgan & Co. Inc., from January 1990 to June 2000. A director of ManpowerGroup since April 2009. A director of The Western Union Company, PartnerRe Limited, a reinsurance company and Rocco Forte & Family Limited, a hotel management company. Also a member of the Council on Foreign Relations. Previously a director of Paris Re Holdings Limited from 2007 to 2009.

Elizabeth P. Sartain

     58       Independent Human Resource Advisor and Consultant since April 2008. Executive Vice President and Chief People Officer at Yahoo! Inc. from August 2001 to April 2008. Prior thereto, an executive with Southwest Airlines serving in various positions from 1988 to

 

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      2001. A director of ManpowerGroup since August 2010. Previously a director of Peets Tea and Coffee, Inc. from October 2007 to October 2012.

Edward J. Zore

     67       Retired Chairman and Chief Executive Officer of The Northwestern Mutual Life Insurance Company (“Northwestern Mutual”) from March 2009 to July 2010. President and Chief Executive Officer of Northwestern Mutual from June 2001 to March 2009. President of Northwestern Mutual from March 2000 to June 2001. Executive Vice President, Life and Disability Income Insurance, of Northwestern Mutual from 1998 to 2000. Executive Vice President, Chief Financial Officer and Chief Investment Officer of Northwestern Mutual from 1995 to 1998. Prior thereto, Chief Investment Officer and Senior Vice President of Northwestern Mutual. Also a trustee of Northwestern Mutual. A director of ManpowerGroup for more than five years. A director of RenaissanceRe Holdings Ltd. since August 2010. Previously, a director of Mason Street Funds from 2000 to 2007 and a director of the Northwestern Mutual Series Fund, Inc. from 2000 to May 2010.
Class I Directors (term expiring in 2015)

Jeffrey A. Joerres

     53       Chairman of ManpowerGroup since May 2001. Chief Executive Officer of ManpowerGroup since November 2012. President and Chief Executive Officer of ManpowerGroup from April 1999 to November 2012. Senior Vice President European Operations and Marketing and Major Account Development of ManpowerGroup from July 1998 to April 1999. A director of Johnson Controls, Inc. and the Federal Reserve Bank of Chicago. Formerly a director of Artisan Funds, Inc. from August 2001 to April 2011. A director of ManpowerGroup for more than five years. An employee of ManpowerGroup since July 1993.

John R. Walter

     66       Non-Executive Chairman of the Board of InnerWorkings, Inc. from May 2004 to June 2010. Retired President and Chief Operating Officer of AT&T Corp. from November 1996 to July 1997. Chairman, President and Chief Executive Officer of R.R. Donnelley & Sons Company, a print and digital information management, reproduction and distribution company, from 1989 through 1996. Also a director of Vasco Data Securities, Inc. and Echo Global Logistics. A director of ManpowerGroup for more than five years. Previously, a director of InnerWorkings from 2004 to 2012 and SNP Corporation of Singapore from 2002 to 2009.

Marc J. Bolland

     53       Chief Executive Officer of Marks and Spencer Group plc. since May 2010. Chief Executive Officer of Wm Morrisons Supermarket Plc from September 2006 to April 2010. Executive Board Member of Heineken N.V., a Dutch beer brewing and bottling company, from 2001 to August 2006. Previously, a Managing Director of Heineken Export Group Worldwide, a subsidiary of Heineken N.V., from 1999 to 2001, and Heineken Slovensko, Slovakia, a subsidiary of Heineken N.V., from 1995 to 1998. A director of ManpowerGroup for more than five years. No other public directorships in the past five years.

 

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Ulice Payne, Jr.

     57       President of Addison-Clifton, LLC, a provider of global trade compliance advisory services, from May 2004 to present. President and Chief Executive Officer of the Milwaukee Brewers Baseball Club from 2002 to 2003. Partner with Foley & Lardner LLP, a national law firm, from 1998 to 2002. A trustee of The Northwestern Mutual Life Insurance Company and Wisconsin Energy Corporation. A director of ManpowerGroup since October 2007. Previously, a director of Badger Meter, Inc. from 2000 to 2010.

In connection with their nominations and in accordance with the Company’s corporate governance guidelines regarding retirement, each of Mr. Hueneke and Mr. Greenberg has agreed to resign effective on his 72nd birthday in 2014. See page 11 for further details regarding the age requirement for the board of directors.

Each director attended at least 75% of the board meetings and meetings of committees on which he or she served in 2012. The board of directors held five meetings during 2012. The board of directors did not take action by written consent during 2012.

Under ManpowerGroup’s by-laws, nominations, other than those made by the board of directors or the nominating and governance committee, must be made pursuant to timely notice in proper written form to the secretary of ManpowerGroup. To be timely, a shareholder’s request to nominate a person for election to the board of directors at an annual meeting of shareholders, together with the written consent of such person to serve as a director, must be received by the secretary of ManpowerGroup not less than 90 days nor more than 150 days prior to the anniversary of the annual meeting of shareholders held in the prior year. To be in proper written form, the notice must contain certain information concerning the nominee and the shareholder submitting the nomination, including the disclosure of any hedging, derivative or other complex transactions involving the Company’s common stock to which a shareholder proposing a director nomination is a party.

The board of directors has adopted categorical standards for relationships deemed not to impair independence of non-employee directors to assist it in making determinations of independence. The categorical standards are available on ManpowerGroup’s website at http://www.manpowergroup.com/about/corporategovernance.cfm. The board of directors has determined that twelve of thirteen of the current directors of ManpowerGroup are independent under the listing standards of the New York Stock Exchange after taking into account the categorical standards and the following:

 

   

Mr. Greenberg is and Mr. Walter was a director of InnerWorkings, Inc., a public company, which provides print management services to ManpowerGroup.

 

   

Mr. Greenberg is the Non-Executive Chairman of the Western Union Company, a public company, which has engaged ManpowerGroup to provide services to the company.

 

   

Mr. Zore and Mr. Payne are trustees of Northwestern Mutual. Northwestern Mutual and certain of its affiliates have engaged ManpowerGroup, Experis and Right Management to provide contingent staffing, accounting and other services. In addition, ManpowerGroup and certain of its affiliates have from time to time leased space from joint venture and limited liability companies in which Northwestern Mutual has an equity interest.

 

   

Ms. Boswell is Executive Vice President, Personal Care at Unilever, which has engaged ManpowerGroup to provide services to the company.

 

   

Ms. Hemingway Hall is President and Chief Executive Officer of Health Care Service Corporation, which has engaged ManpowerGroup to provide services to the company.

 

   

Mr. Downe is the President and Chief Executive Officer of BMO Financial Group, and one of its subsidiaries, BMO Harris Bank, is a party to the syndicate of banks in ManpowerGroup’s $800 million revolving credit facility, which was entered into in the ordinary course of business.

 

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The independent directors are Mr. Bolland, Ms. Boswell, Ms. Dominguez, Mr. Downe, Mr. Greenberg, Ms. Hemingway Hall, Mr. Hueneke, Mr. Mendoza, Mr. Payne, Ms. Sartain, Mr. Walter and Mr. Zore.

The nominating and governance committee will evaluate eligible shareholder-nominated candidates for election to the board of directors in accordance with the procedures described in ManpowerGroup’s by-laws and in accordance with the guidelines and considerations relating to the selection of candidates for membership on the board of directors described under “Board Composition and Qualifications of Board Members” below.

ManpowerGroup does not have a policy regarding board members’ attendance at the annual meeting of shareholders. Twelve of the thirteen directors attended the 2012 annual meeting of shareholders.

Any interested party who wishes to communicate directly with the lead director or with the non-management directors as a group may do so by calling 1-800-210-3458. The third-party service provider that monitors this telephone number will forward a summary of all communications directed to the non-management directors to the lead director.

Committees of the Board

The board of directors has standing audit, executive compensation and human resources, and nominating and governance committees. The board of directors has adopted written charters for the audit, executive compensation and human resources and nominating and governance committees. These charters are available on ManpowerGroup’s web site at http://www.manpowergroup.com/about/corporategovernance.cfm.

The audit committee consists of Mr. Zore (Chairman), Ms. Boswell, Mr. Hueneke, Mr. Payne, Mr. Mendoza and Ms. Hemingway-Hall. Each member of the audit committee is “independent” within the meaning of the applicable listing standards of the New York Stock Exchange. The board of directors has determined that Mr. Zore is an “audit committee financial expert” and “independent” as defined under the applicable rules of the Securities and Exchange Commission.

The functions of the audit committee include: (i) appointing the independent auditors for the annual audit and approving the fee arrangements with the independent auditors; (ii) monitoring the independence, qualifications and performance of the independent auditors; (iii) reviewing the planned scope of the annual audit; (iv) reviewing the financial statements to be included in our quarterly reports on Form 10-Q and our annual report on Form 10-K, and our disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations”; (v) reviewing compliance with and reporting under Section 404 of the Sarbanes-Oxley Act of 2002; (vi) reviewing our accounting management and controls and any significant audit adjustments proposed by the independent auditors; (vii) making a recommendation to the board of directors regarding inclusion of the audited financial statements in our annual report on Form 10-K; (viii) reviewing recommendations, if any, by the independent auditors resulting from the audit to ensure that appropriate actions are taken by management; (ix) reviewing matters of disagreement, if any, between management and the independent auditors; (x) periodically reviewing our Policy Regarding the Retention of Former Employees of Independent Auditors; (xi) overseeing compliance with our Policy on Services Provided by Independent Auditors; (xii) meeting privately on a periodic basis with the independent auditors, internal audit staff and management to review the adequacy of our internal controls; (xiii) monitoring our internal audit department, including our internal audit plan; (xiv) monitoring our policies and procedures regarding compliance with the Foreign Corrupt Practices Act and compliance by our employees with our code of business conduct and ethics; (xv) assisting the board of directors with its oversight of the performance of the Company’s risk management function; (xvi) reviewing current tax matters affecting us; (xvii) periodically discussing with management our risk management framework; (xviii) serving as our qualified legal compliance committee; and (xix) monitoring any litigation involving ManpowerGroup, which may have a material financial impact on ManpowerGroup or relate to matters entrusted to the audit committee. In addition, the charter of the audit committee provides that the audit committee shall review and approve all related party transactions that are material to ManpowerGroup’s

 

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financial statements or that otherwise require disclosure to ManpowerGroup’s shareholders, provided that the audit committee shall not be responsible for reviewing and approving related party transactions that are reviewed and approved by the board of directors or another committee of the board of directors. The audit committee held five meetings during 2012. The audit committee did not take action by written consent during 2012.

The executive compensation and human resources committee consists of Mr. Greenberg (Chairman), Mr. Bolland, Ms. Dominguez, Mr. Downe, Ms. Sartain and Mr. Walter. Each member of the executive compensation and human resources committee is “independent” within the meaning of the applicable listing standards of the New York Stock Exchange and qualifies as an “outside director” under Section 162(m) of the Internal Revenue Code. The functions of this committee are to: (i) establish the compensation of the chief executive officer and the chief financial officer of ManpowerGroup, subject to ratification by the board of directors; (ii) approve the compensation, based on the recommendations of the chief executive officer of ManpowerGroup, of certain other senior executives of ManpowerGroup and its subsidiaries; (iii) determine the terms of any agreements concerning employment, compensation or employment termination, as well as monitor the application of ManpowerGroup’s retirement and other fringe benefit plans, with respect to the individuals listed in (i) and (ii); (iv) monitor the development of ManpowerGroup’s key executive officers; (v) administer ManpowerGroup’s equity incentive plans and employee stock purchase plans and oversee ManpowerGroup’s employee retirement and welfare plans; (vi) administer ManpowerGroup’s corporate senior management annual incentive plan; and (vii) act as the compensation committee of outside directors under Section 162(m) of the Internal Revenue Code. The executive compensation and human resources committee held seven meetings during 2012. The executive compensation and human resources committee did not take action by written consent during 2012.

The nominating and governance committee consists of Mr. Walter (Chairman), Ms. Boswell, Mr. Greenberg, Mr. Payne, and Mr. Zore. Each member of the nominating and governance committee is “independent” within the meaning of the applicable listing standards of the New York Stock Exchange. The functions of this committee are to: (i) recommend nominees to stand for election at annual meetings of shareholders, to fill vacancies on the board of directors and to serve on committees of the board of directors; (ii) establish procedures and assist in identifying candidates for board membership; (iii) review the qualifications of candidates for board membership; (iv) periodically review the compensation arrangements in effect for the non-management members of the board of directors and recommend any changes deemed appropriate; (v) coordinate the annual self-evaluation of the performance of the board of directors and each of its committees; (vi) establish and review, for recommendation to the board of directors, guidelines and policies on the size and composition of the board, the structure, composition and functions of the board committees, and other significant corporate governance principles and procedures; (vii) oversee the content and format of our code of business conduct and ethics; (vii) monitor compliance by the non-management directors with our code of business conduct and ethics; and (viii) develop and periodically review succession plans for the directors. The nominating and governance committee has from time to time engaged director search firms to assist it in identifying and evaluating potential board candidates. The nominating and governance committee met three times during 2012. The nominating and governance committee did not take action by written consent during 2012.

Board Composition and Qualifications of Board Members

The nominating and governance committee has adopted, and the board of directors has approved, guidelines for selecting board candidates that the committee considers when evaluating candidates for nomination as directors. The guidelines call for the following with respect to the composition of the board:

 

   

a variety of experience and backgrounds

 

   

a core of business executives having substantial senior management and financial experience

 

   

individuals who will represent the best interests of the shareholders as a whole rather than special interest constituencies

 

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the independence of at least a majority of the directors

 

   

individuals who represent a diversity of gender, race and age

In connection with its consideration of possible candidates for board membership, the committee also has identified areas of experience that members of the board should as a goal collectively possess. These areas include:

 

   

previous board experience

 

   

active or former CEO/COO/Chairperson

 

   

human resources experience

 

   

accounting or financial oversight experience

 

   

international business experience

 

   

sales experience

 

   

marketing and branding experience

 

   

operations experience

 

   

corporate governance experience

 

   

government relations experience

 

   

technology experience

The Company believes that the present composition of the board of directors satisfies the guidelines for selecting board candidates set out above; specifically, the board is composed of individuals who have a variety of experience and backgrounds, the board has a core of business executives having substantial experience in management as well as one member having government experience, board members represent the best interests of all of the shareholders rather than special interests, and twelve of thirteen directors are independent under the rules of the New York Stock Exchange. The composition of the board also reflects diversity of country of origin, gender, race and age, an objective that the nominating and governance committee continually strives to enhance when searching for and considering new directors. Based on the composition of our board of directors, we believe this objective has been achieved.

In addition, the particular areas of desired experience identified above that are possessed by each director with significant or some experience is as follows:

M. Bolland — Active CEO/COO/Chairman, Human Resources, Financial Oversight/Accounting, International Business, Sales, Marketing/Branding, Operations and Government Relations

G. Boswell — Previous Board Experience, Human Resources, Financial Oversight/Accounting, International Business, Sales, Marketing/Branding, Operations, Governance and Technology

C. Dominguez — Human Resources, International Business, Operations, Governance and Government Relations

W. Downe — Previous Board Experience, Active CEO/COO/Chairman, International Business, Operations

J. Greenberg — Previous Board Experience, Active CEO/COO/Chairman, Former CEO, Human Resources, Financial Oversight/Accounting, International Business, Marketing/Branding, Operations, Governance, Government Relations and Technology

 

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P. Hemingway Hall — Active CEO/COO/Chairman, Human Resources, Sales, Marketing/Branding, Operations, Government Relations

T. Hueneke — Human Resources, Financial Oversight/Accounting, International Business, Sales, Marketing/Branding and Operations

R. Mendoza — Previous Board Experience, Human Resources, Financial Oversight/Accounting, International Business, Sales, Operations and Governance

U. Payne — Previous Board Experience, Active CEO/COO/Chairman, Former CEO, Human Resources, Financial Oversight/Accounting, International Business, Sales, Marketing/Branding, Operations, Governance and Government Relations

E. Sartain — Previous Board Experience, Human Resources, International Business, Marketing/Branding and Operations

J. Walter — Previous Board Experience, Former CEO, Human Resources, Financial Oversight/Accounting, International Business, Sales, Marketing/Branding, Operations, Governance, Government Relations and Technology

E. Zore — Previous Board Experience, Former CEO, Human Resources, Financial Oversight/Accounting, Sales, Marketing/Branding, Operations, Governance, Government Relations and Technology

Mr. Joerres has experience in many of these areas as well, however his position on the board is due to his position as CEO of the Company, as the board of directors has determined the CEO should also be chairman of the board of directors. For more information on how each of the board of directors meets these objectives, see their occupations and directorships disclosed previously under “Election of Directors”.

ManpowerGroup’s corporate governance guidelines states that an individual cannot be nominated for election to the Board of Directors after his or her 72nd birthday. A director that is standing for election who will turn age 72 during his or her normal term must submit a resignation effective as of his or her 72nd birthday as a condition to having the Board recommend the director for election. If the Board of Directors rejects the resignation for any reason, the director shall continue in office until the expiration of his or her current term.

Board Leadership Structure

The board of directors has appointed the chief executive officer of the Company to the position of chairman of the board. Combining the roles of chairman of the board and chief executive officer (1) enhances alignment between the board of directors and management in strategic planning and execution as well as operational matters, (2) avoids the confusion over roles, responsibilities and authority that can result from separating the positions, and (3) streamlines board process in order to conserve time for the consideration of the important matters the board needs to address. At the same time, the combination of a completely independent board (except for the chairman of the board) and the lead director arrangement maintained by the board facilitate effective oversight of the performance of senior management.

The board of directors had established an arrangement under which the chairman of one of the principal board committees serves as lead director on a rotating basis for each calendar year. In February 2013, the board of directors revised its corporate governance guidelines to discontinue the practice of rotating the lead director among the various chairmen of the principal board committees. Going forward, the board of directors has appointed a lead director with the intent that such individual will serve for at least three years in order to provide greater continuity for the role. The lead director’s duties as specified in the Company’s corporate governance guidelines are as follows:

 

   

Preside at executive sessions of the non-employee directors and all other meetings of directors where the chairman of the board is not present;

 

   

Serve as liaison between the chairman of the board and the non-employee directors;

 

11


   

Approve what information is sent to the board;

 

   

Approve the meeting agendas for the board;

 

   

Approve meeting schedules to assure that there is sufficient time for discussion on all agenda items;

 

   

Have the authority to call meetings of the non-employee directors; and

 

   

If requested by major shareholders, ensure that he or she is available for consultation and direct communication.

Mr. Zore has been appointed as the lead director.

Board Oversight of Risk

The audit committee is responsible for assisting the board of directors with its oversight of the performance of the Company’s risk management functions including:

 

   

Periodically reviewing and discussing with management the Company’s policies, practices and procedures regarding risk assessment and management;

 

   

Periodically receiving, reviewing and discussing with management reports on selected risk topics as the committee or management deems appropriate from time to time; and

 

   

Periodically reporting to the board of directors on its activities in this oversight role.

In this oversight capacity, the committee’s role is one of informed oversight rather than direct management of risk. In addition, it is not intended that the committee be involved in the day-to-day risk management activities. Instead, the committee is expected to engage in reviews and discussions with management (and others if considered appropriate) as necessary to be reasonably assured that the Company’s risk management processes (1) are adequate to identify the material risks that we face in a timely manner, (2) include strategies for the management of risk that are responsive to our risk profile and specific material risk exposure, (3) serve to integrate risk management considerations into business decision-making throughout the Company, and (4) include policies and procedures that are reasonably effective in facilitating the transmission of information with respect to material risks to the senior executives of the Company and the committee.

Compensation Consultant

The executive compensation and human resources committee directly retains Mercer (US) Inc. to advise it on executive compensation matters. Mercer reports to the chairman of the committee. On an annual basis, the Company and Mercer enter into an engagement letter, which sets out the services to be performed by Mercer for the committee during the ensuing year. Mercer’s primary role is to provide objective analysis, advice and information and otherwise to support the committee in the performance of its duties. Mercer’s fees for executive compensation consulting to the committee in 2012 were $286,696.

The committee requests information and recommendations from Mercer as it deems appropriate in order to assist it in structuring and evaluating ManpowerGroup’s executive compensation programs and practices. The committee’s decisions about executive compensation, including the specific amounts paid to executive officers, are its own and may reflect factors and considerations other than the information and recommendations provided by Mercer.

Mercer was engaged by the committee to perform the following services for the period from April 1, 2012 through May 31, 2013:

 

   

Evaluate the competitiveness of our total executive compensation and benefits program for the CEO, CFO and senior management team, including base salary, annual incentive, total cash compensation, long-term incentive awards, total direct compensation, retirement benefits and total remuneration against the market;

 

12


   

Assess how well the compensation and benefits programs are aligned with the committee’s stated philosophy to align pay with performance, including analyzing our performance against comparator companies;

 

   

Review the companies included in our industry peer group;

 

   

Provide advice and assistance to the committee on the levels of total compensation and the principal elements of compensation for our senior executives;

 

   

Brief the executive compensation and human resources committee on executive compensation trends in executive compensation and benefits among large public companies and on regulatory, legislative and other developments;

 

   

Advise the executive compensation and human resources committee on salary, target incentive opportunities and equity grants; and

 

   

Assist with the preparation of the Compensation Discussion and Analysis and other executive compensation disclosures to be included in this proxy statement.

In connection with the engagement, ManpowerGroup and Mercer have agreed on written guidelines for minimizing potential conflicts of interest. These guidelines are as follows:

 

   

The committee has the authority to retain and dismiss Mercer at any time;

 

   

Mercer reports directly to the committee and has direct access to the committee through the chairman;

 

   

Mercer does not consult with or otherwise interact with our executives except to discuss our business and compensation strategies and culture, obtain compensation and benefits data along with financial projections and operational data, consult about the nature and scope of the various executive jobs for benchmarking purposes, confirm factual and data analyses to ensure accuracy, and consult with the CEO about the compensation of the other executives of ManpowerGroup;

 

   

Mercer’s main contacts with management are the CFO and executive vice president, global strategy and talent;

 

   

Mercer’s written reports may be distributed to committee members as part of the committee meeting mailings, except any findings and recommendation regarding the CEO are sent in a separate document directly to committee members;

 

   

Each engagement of Mercer by the committee is documented in an engagement letter that includes a description of the agreed upon services, fees and other matters considered appropriate; and

 

   

Prior to the Mercer consultant performing any services, whether related to compensation or other consulting services, for ManpowerGroup in addition to those performed for the committee, the consultant must inform the committee chairman and obtain approval.

Ultimately, the consultant provides recommendations and advice to the committee in an executive session where management is not present, which is when critical pay decisions are made. This approach protects the committee’s ability to receive objective advice from the consultant so that the committee may make independent decisions about executive pay at our company.

Besides Mercer’s involvement with the committee, it and its affiliates also provide other non-executive compensation services to us. The total amount paid for these other services provided in 2012 was $546,564.

The committee believes the advice it receives from the individual executive compensation consultant is objective and not influenced by Mercer’s or its affiliates’ relationships with us because of the procedures Mercer and the committee have in place, including the following:

 

   

The consultant receives no incentive or other compensation based on the fees charged to us for other services provided by Mercer or any of its affiliates;

 

   

The consultant is not responsible for selling other Mercer or affiliate services to us;

 

13


   

Mercer’s professional standards prohibit the individual consultant from considering any other relationships Mercer or any of its affiliates may have with us in rendering his or her advice and recommendations; and

 

   

The committee evaluates the quality and objectivity of the services provided by the consultant each year and determines whether to continue to retain the consultant.

 

14


SECURITY OWNERSHIP OF MANAGEMENT

Set forth in the table below, as of February 19, 2013, are the shares of ManpowerGroup common stock beneficially owned by each director and nominee, each of the executive officers named in the table under the heading “Executive and Director Compensation — Summary Compensation Table,” and all directors and executive officers of ManpowerGroup as a group and the shares of ManpowerGroup common stock that could be acquired within 60 days of February 19, 2013 by such persons.

 

Name of

Beneficial Owner

   Common Stock
Beneficially
Owned(1)
    Right to
Acquire
Common
Stock(1)(2)
     Percent of
Class(3)
 

Jeffrey A. Joerres

     1,386,208 (4)(5)      1,055,013         1.8

Michael J. Van Handel

     435,129 (5)      325,218         *   

Marc J. Bolland

     21,786 (5)      6,250         *   

Gina R. Boswell

     14,772 (5)      0         *   

Cari M. Dominguez

     7,176        0         *   

William Downe

     6,000        0         *   

Darryl Green

     120,057        95,640         *   

Jack M. Greenberg

     28,966 (5)      10,000         *   

Françoise Gri

     131,495        117,420         *   

Patricia Hemingway Hall

     0        0         *   

Terry A. Hueneke

     28,975 (5)      8,750         *   

Hans Leentjes

     42,653        40,394         *   

Roberto Mendoza

     0        0         *   

Ulice Payne, Jr.

     9,500 (5)      0         *   

Jonas Prising

     159,544 (5)      125,920         *   

Elizabeth P. Sartain

     5,454        0         *   

Owen J. Sullivan

     192,809 (5)      176,690         *   

John R. Walter

     14,992        13,028         *   

Edward J. Zore

     38,339 (5)      0         *   

All directors and executive officers as a group (21 persons)

     2,814,466        2,119,557         3.7

 

(1) Except as indicated below, all shares shown in this column are owned with sole voting and dispositive power. Amounts shown in the Right to Acquire Common Stock column are also included in the Common Stock Beneficially Owned column.

The table does not include vested shares of deferred stock, which will be settled in shares of ManpowerGroup common stock on a one-for-one basis, held by the following directors that were issued under the 2003 Equity Incentive Plan and the Terms and Conditions Regarding the Grant of Awards to Non-Employee Directors under the 2003 Equity Incentive Plan and the 2011 Equity Incentive Plan and the Terms and Conditions Regarding the Grant of Awards to Non-Employee Directors under the 2011 Equity Incentive Plan:

 

                        Director    Vested Deferred Stock  
     2003 Plan      2011 Plan      Total  

Marc J. Bolland

     1,922         3,466         5,388   

Cari M. Dominguez

     0         3,000         3,000   

William Downe

     0         7,032         7,032   

Jack M. Greenberg

     254         0         254   

Patricia Hemingway Hall

     0         4,081         4,081   

Terry A. Hueneke

     1,947         0         1,947   

Roberto Mendoza

     9,290         1,607         10,897   

Ulice Payne, Jr.

     1,728         3,000         4,728   

Elizabeth P. Sartain

     2,069         0         2,069   

John R. Walter

     11,037         0         11,037   

Edward J. Zore

     3,355         2,107         5,462   

 

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The table does not include 2,474 unvested shares of deferred stock, which will be settled in shares of ManpowerGroup common stock on a one-for-one basis, held by each of Ms. Dominguez, Mr. Downe, Ms. Hall, Mr. Mendoza, Ms. Sartain and Mr. Walter that were issued under the 2011 Plan and the Terms and Conditions on January 1, 2013. These shares of deferred stock vest in equal quarterly installments during 2013.

Finally, the table does not include unvested restricted stock units, which will be settled in shares of Manpower common stock on a one-for-one basis, held by the following executive officers that were issued under both the 2003 Plan and 2011 Plan:

 

                        Officer    Unvested Restricted
Stock Units
 
     2003 Plan      2011 Plan      Total  

Jeffrey A. Joerres

     21,670         31,910         53,580   

Michael J. Van Handel

     7,740         11,397         19,137   

Darryl Green

     5,882         5,015         10,897   

Francoise Gri

     3,096         5,015         8,111   

Hans Leentjes

     2,477         4,559         7,036   

Jonas Prising

     18,574         5,015         23,589   

Owen J. Sullivan

     18,574         5,015         23,589   

Of these amounts, (i) the following restricted stock units vest on February 16, 2014: Mr. Joerres — 21,670; Mr. Van Handel — 7,740; Mr. Green — 5,882; Ms. Gri — 3,096; Mr. Leentjes — 2,477; Mr. Prising — 3,096; and Mr. Sullivan – 3,096, (ii) the following restricted stock units vest on February 15, 2015: Mr. Joerres — 31,910; Mr. Van Handel — 11,397; each of Mr. Green, Ms. Gri, Mr. Prising and Mr. Sullivan — 5,015; and Mr. Leentjes — 4,559; (iii) 15,478 restricted stock units held by each of Mr. Prising and Mr. Sullivan will vest on February 16, 2016 , except as otherwise provided in the 2003 and 2011 Plans.

 

(2) Common stock that may be acquired within 60 days of the record date through the exercise of stock options and the settlement of restricted stock units.

 

(3) No person named in the table, other than Mr. Joerres, beneficially owns more than 1% of the outstanding shares of common stock. The percentage is based on the column entitled Common Stock Beneficially Owned.

 

(4) Includes 300 shares held by Mr. Joerres’ spouse.

 

(5) Includes the following number of shares of unvested restricted stock as of the record date:

 

                        Officer or Director    Unvested Restricted
Stock
 

Jeffrey A. Joerres

     40,000 (1) 

Marc J. Bolland

     2,474   

Gina R. Boswell

     2,474   

Jack M. Greenberg

     2,474   

Terry A. Hueneke

     2,474   

Ulice Payne, Jr.

     2,474   

Edward J. Zore

     2,474   

 

(1) These shares vested on February 20, 2013.

The holders of the restricted stock have sole voting power with respect to all shares held and no dispositive power with respect to all shares held.

 

16


EXECUTIVE AND DIRECTOR COMPENSATION

Compensation Discussion and Analysis

Background

This compensation discussion and analysis provides information about ManpowerGroup’s compensation policies and decisions regarding the company’s CEO, CFO and the five executive officers who were the leaders of the company’s business operating units in 2012. This group includes the executive officers (our “named executive officers”) for whom disclosure is required under the rules of the Securities and Exchange Commission.

Executive Summary

2012 Financial Highlights

ManpowerGroup’s financial performance declined in 2012 compared to 2011. A decrease in revenue unfavorably impacted our operating leverage and profitability. Financial performance came in below our internal performance goals, even though total shareholder return was positive at 21%. Because financial performance was below target, aggregate payouts for our executive officers under our incentive plans were below target.

Key financial metrics illustrate our 2012 performance compared to 2011:

 

   

Revenue of $20.7 billion, a decrease from $22.0 billion in 2011

 

   

Operating Profit Margin Percent (“OPMP”)(1) of 2.27%, a decrease from 2.49% in 2011

 

   

Diluted Earnings Per Share (“EPS”)(1) of $2.47, a decrease from $3.04 in 2011

 

   

Economic Profit (net operating profit after taxes less a capital charge or “EP”)(1) of -$81.9 million, a decrease from -$6.1 million in 2011

 

  (1) Operating Profit Margin Percent, EPS and EP have been calculated for 2012 and 2011 in accordance with our compensation plans.

Our Business is Highly Cyclical, and Dependent on Global Macroeconomic Forces

ManpowerGroup derives over 85% percent of its revenues from outside the United States, with the largest portions coming from the company’s operating segments in Southern Europe (35%), Northern Europe (28%) and Asia Pacific Middle East (13%). Our business is truly global in nature and complexity, with over 28,000 employees worldwide. Our global network of nearly 3,500 offices in 80 countries allows us to meet the needs of our clients in all industry segments, whether they are global, multinational or local companies. We placed approximately 3.4 million people in jobs in 2012, and provided a broad range of workforce solutions including recruitment and assessment, training and development, career management, outsourcing and workforce consulting.

Our results are highly dependent on labor market conditions, business cycles and other macroeconomic forces, at both a global and a regional level. In periods of economic uncertainty, such as we experienced between 2008 and 2012, our revenue will often decline as our clients scale back use of our services due to reduced demand for their products and services. During these periods, we evaluate our investment decisions, and work to take costs out of the business, to mitigate the cyclical effects where possible. Despite this, we still typically experience decreasing profit margins during such periods, as reflected in our Operating Profit Margin and Economic Profit metrics for 2012. At the other end of the cycle, in periods of economic recovery, we typically experience renewed demand for our solutions and would expect to see improvement in revenue, and period-over-period increases in our Operating Profit Margin and EP metrics.

 

 

17


Our Compensation Program is Designed to Generate Variable Results

Our strategy is to drive higher margins, improve efficiency and provide more value to our clients. We believe the interests of our shareholders are served when strong operating performance drives enhanced financial performance. Therefore, the pay for our CEO and our other executive officers is closely aligned with our financial results. Under our pay-for-performance compensation philosophy (summarized on page 26), we expect that our executives’ compensation will be variable year-over-year based on whether they have achieved collective and individual performance goals set by the committee. This also aligns with our philosophy of affordability — compensation for our executives is higher when they have delivered financial results that make it affordable for the company, and lower when financial results decline and make it less affordable for the company.

We Drive Performance through Three Key Performance Metrics

In 2012, we continued to focus our executive compensation programs on three financial and operating metrics that we believe reflect whether we are running our businesses successfully for our shareholders.

 

   

Economic Profit.    Measures how effectively our executive officers have generated net operating profit after subtracting a capital charge on the total net capital used in the business. This is a critical measurement for us: Although we are a provider of services, and not a manufacturer of products, our business is still highly capital-intensive. Our requirement for capital arises from the timing characteristics of our business — we typically pay our associates and consultants before we can bill and collect from our clients. Using an EP metric incentivizes our executives to manage our accounts receivable and other capital investments carefully in order to maximize the return on capital deployed. We focus on and pay for year-over-year improvement in EP, even where EP may be a negative number during certain portions of the business cycle.

 

   

Earnings Per Share.    Focuses our executive officers on producing financial results that align the interests of our shareholders. We believe this metric is a critical measure of executive performance.

 

   

Operating Profit Margin Percent.    Measures how efficiently our executive officers have deployed our operating resources to generate a profit. We believe using this metric drives a long-term focus on achieving sustainable profits.

These three measures align with our strategy to drive higher margins, improve efficiency and provide more value to our clients. We have historically not utilized Total Shareholder Return (“TSR”) as a performance goal, as we believe it is less effective than the metrics above in incentivizing executive performance. In particular, our business is cyclical, and we have found that our stock price reacts to perceived changes in global business cycles, sometimes as a leading indicator. Movements in stock price can take place without regard to the fundamentals of our business. As a result, pay for our CEO and other executive officers is often de-coupled from TSR calculations. For example, in 2012, EPS declined 18.8% from 2011, however TSR increased 21%.

In addition to these three metrics, the committee also sets individual operating objectives for each executive officer.

 

 

18


Key Compensation and Governance Policies

The committee continually reviews the Company’s executive compensation program to maintain compensation practices that are in the best interests of our shareholders. Some of our key policies are summarized below:

What We Do:

 

   

We tie pay to performance, including the use of performance share units. The majority of executive pay is variable.

 

   

We use double triggers in our severance agreements and our equity awards.

 

   

We maintain significant stock ownership guidelines for our executive officers

 

   

We provide an independent compensation consultant, engaged by the committee, that works solely in support of the committee.

 

   

We continually review our executive compensation program against the competitive market.

 

   

We listen to our shareholders. In addition to an annual “say-on-pay” advisory vote, we regularly reach out to leading shareholders and their advisory firms. Our goal is to make sure our programs are well-understood, and, where appropriate, adjusted in response to shareholder input.

What We Don’t Do:

 

   

We do not provide tax gross up payments for any amounts considered excess parachute payments.

 

   

We do not permit executives to engage in short-selling of ManpowerGroup securities or trading in puts and calls on ManpowerGroup securities absent special approval.

 

   

We do not permit our executives to pledge shares of our common stock.

 

   

We do not provide excessive perquisites to our executives.

We Have a Track Record of Positive Compensation and Governance Changes:

In recent years, we have adopted a number of important enhancements to our corporate governance and compensation practices:

 

   

Elimination of tax gross-ups:    In 2011, we eliminated tax gross-ups for the executive officers for excess parachute amounts as defined under Internal Revenue Code Section 280G.

 

   

Expanded Use of Performance-Based Equity.    Also in 2011, we modified our long-term incentive program for the executive officers to expand our use of performance share units to approximately 50% of the long-term equity compensation grants.

 

   

Revised Stock Ownership Guidelines.    Also in 2011, we amended the stock ownership guidelines to require any senior executives that have not met their individual ownership requirement hold 50% of any of the shares they received from exercise or vesting of awards until the requirement has been satisfied.

 

 

19


Further Enhancements in 2012:

To further align our executive compensation program with best governance practices, the committee implemented additional changes to the Company’s executive compensation program in 2012:

 

   

Adoption of clawback policy:     Even though the SEC has not adopted final rules under the Dodd-Frank Wall Street Reform and Consumer Protection Act regarding clawback requirements, we believe it is an important feature of an executive compensation program. Therefore, during 2012 we adopted a clawback policy for our executive officers. Under the policy, if the committee determines an employee engaged in intentional misconduct that causes a financial restatement, the committee may revoke any outstanding awards, including cash incentives or equity awards, that were received as a result of the misconduct.

 

   

Use of double triggers in performance share unit agreements:    Prior to 2012, double triggers were in place in all of our severance agreements and all of our equity agreements, except for performance share units where a change in control occurred during the performance period. Beginning with the 2012 performance share unit grant, our PSUs will also require a double trigger in the event of a change in control (either during or after the performance period).

Our CEO’s Compensation Was Highly Variable in 2012 and Followed our Guiding Principle of Pay-For-Performance.

Approximately 73% of our CEO’s 2012 compensation was tied to Company performance and 88% of total pay was variable. As a result of the decline in our financial performance in 2012, Mr. Joerres’ total compensation in 2012 was 90% of target. The discussion below highlights each component of Mr. Joerres’ compensation in 2012.

There was no increase in base salary in 2012.    Mr. Joerres did not receive an increase in base salary in 2012.

Annual Cash Incentive Payout Was 45% of Target.    In light of the financial performance of the Company and the committee’s assessment of Mr. Joerres’ achievement of his operating objectives, Mr. Joerres’ annual incentive payout was 45% of target.

The following table shows the actual payout to the CEO for EPS, EP and his operating objectives compared to target for 2012:

 

     2012 Actual
Payout $
     % Compared to
Target
 

EPS Goal (40% of total opportunity)

     253,440         35

EP Goal (40% of total opportunity)

     250,740         35

Operating Objective (20% of total opportunity)

     300,000         83

Total ($)

     804,180         45

50% of Long-Term Equity Awards are Based on Performance.    Mr. Joerres’ 2012 compensation package consisted of three long-term components:

 

   

Approximately 50% of long-term awards in the form of performance share units (PSUs).

 

   

Approximately 30% of long-term awards in the form of stock options that vest over a four year period with a ten year expiration.

 

   

Approximately 20% of long-term awards in the form of restricted stock units (RSUs) that vest in full at the end of a three year retention period.

 

 

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The committee again chose to use Operating Profit Margin as the performance metric for PSUs. The committee believes Operating Profit Margin focuses the CEO on the long-term profitability of the Company and increases value to our shareholders.

Operating Profit Margin Was Below Target Levels, and Therefore Long-Term Equity Awards Were Below Target Levels.    Operating Profit Margin was 2.27% for 2012, which fell between the threshold and target performance level. As a result, Mr. Joerres achieved 96% of his 2012 target PSU award. Mr. Joerres will vest in half of the total PSUs earned at the end of 2013, and the remaining half at the end of 2014 so long as he is still employed on those dates.

Other Compensation Was Limited.    The level of perquisites provided to Mr. Joerres is limited. We provide a car lease to him under our broad-based auto program, in which Mr. Joerres is responsible for 25% of the lease payments. We also reimburse him for financial planning expenses which are capped at $12,000 per year. Besides these two items, Other Compensation in 2012 also included a company match and Mr. Joerres’ personal profit sharing contribution under our Nonqualified Savings Plan, in which Mr. Joerres has elected to participate. Mr. Joerres does not have a pension plan, and is not eligible to participate in the company’s 401(k) plan.

 

Objectives of Compensation Program

In making decisions regarding compensation elements, program features and compensation award levels, ManpowerGroup is guided by a series of principles, listed below. Within the framework of these principles, ManpowerGroup considers governance trends, the competitive market, corporate, business unit and individual results, and various individual factors.

ManpowerGroup’s executive compensation guiding principles are to:

 

   

Pay for results:    Tie a significant portion of compensation to the achievement of Company and business unit goals as well as recognize individual accomplishments that contribute to ManpowerGroup’s success. For example, in 2012, approximately 55% and 52% of the CEO’s and CFO’s target compensation, respectively, (and approximately 49% for the other executive officers) was tied to short- and long-term financial performance goals.

 

   

Not pay for failure:    We set threshold targets for each performance-based incentive element of our executive compensation program. The committee believes these threshold targets are the lowest acceptable levels at which it is appropriate for the executive officers to receive an award. If the threshold level is not met, executive officers do not receive a payout related to that performance measure. For example, in 2012, Northern Europe did not meet the threshold level AOUP goal under Mr. Leentjes’ annual incentive award so he did not receive any payout related to that performance measure.

 

   

Align with shareholder interests:    The committee sets performance targets and chooses compensation elements that closely align executives’ interests with those of shareholders. For example, performance share units, which make up approximately 35% of target compensation for the CEO and CFO and approximately 30% for the other executive officers are tied to operating profit margin, an incentive correlated with shareholder value because the higher the profit margin, the more valuable the Company becomes. Stock options and restricted stock units are directly aligned with shareholders’ economic interests as the ultimate value the executive officers realize is dependent upon our stock price. In addition, a substantial portion of the annual incentive awards paid to our CEO and CFO, for example, are based on achievement of EPS and EP goals for the year.

 

   

Pay competitively:    In order for ManpowerGroup to be successful, we need senior executives who have the capability and experience to operate in a global and complex environment. The committee believes it must provide pay opportunities to the executive officers that are competitive in order to attract and retain executives of this caliber.

 

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Balance cash and equity:    We try to balance the appropriate mix of cash and equity compensation to tie compensation to both long and short term results of the Company.

 

   

Use internal and external performance reference points:    We evaluate the elements of our compensation program against appropriate comparator company practices as well as other executives within the Company with the same responsibilities and experience. However, identifying our competitive market has been a challenge. See page 29 for further information regarding our competitive market.

 

   

Recognize the cyclical nature of our business:    Our business is very cyclical and our financial results are impacted by global economic cycles, which are difficult to predict. In determining executive compensation, the committee tries to balance the overall compensation package between fixed and variable pay, recognizing that economic cycles impact our business.

 

   

Retain executives:    The Company structures its compensation program for the executive officers so that the overall target outcome generally falls within the median of the competitive market. The committee believes this is the appropriate level to provide in order to attract and retain executives with the experience and capabilities we need.

 

   

Assure total compensation is affordable:    Our executive officers’ compensation is variable year-over-year, which means compensation is higher when financial objectives are achieved and incremental compensation is more affordable for the company and compensation is lower when financial results decline and it is less affordable for the company. In addition, payouts under the annual incentive plan and the performance share units are capped at the outstanding performance levels, which makes the maximum cost predictable and ensures the plan is affordable.

 

   

Clearly communicate plans so that they are understood:    We clearly communicate to each executive officer their specific goals, targets and objectives under the various elements of the compensation program to ensure our executives are focused on achieving the financial and operational results that the committee believes will best promote shareholder value.

ManpowerGroup held a non-binding shareholder advisory vote at its 2012 Annual Meeting of Shareholders to approve the compensation of ManpowerGroup’s executive officers, also known as “Say on Pay.” This shareholder resolution was approved by approximately 74 % of the votes cast. Although our shareholders approved our Say on Pay, the results decreased from the approval rate of 80% in 2011. Because of this, management engaged with some of the larger shareholders that voted against our Say on Pay to better understand the reasons for their vote.

Because the vote was held after the committee had determined the compensation packages for the executive officers for 2012, which occurred in February, the vote did not have any impact on the decisions for 2012. After the vote did occur and after discussions with shareholders, the committee re-evaluated the compensation packages for 2013 and concluded they were consistent with the Company’s interest and did not make any changes.

 

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Compensation Elements

ManpowerGroup’s guiding principles for the compensation of the Company’s executive management team are implemented using various elements. The range of elements used is intended to provide a compensation and benefits package that addresses the competitive market for executive talent with the broad competencies and skills described earlier, creates a strong incentive to maximize shareholder value, produces outcomes that increase and decrease commensurate with ManpowerGroup’s results, and is aligned with ManpowerGroup’s business strategies. The following are the main elements used by ManpowerGroup in its compensation program in 2012 and the results:

2012 Compensation Program Elements

 

Compensation Element

 

Key Characteristics

 

Objective and Determination

 

2012 Decisions

Base Salary   Fixed compensation for performing the daily job duties in amounts that are competitive in the markets in which we operate.  

Provide a fixed compensation for performing the daily job duties of the executive officer. These are reviewed annually and adjusted when appropriate.

 

Factors used to determine base salaries:

 

•    Executive officer’s experience, skill, and performance.

•    Internal equity among other executive officers.

•    Pay relative to market.

 

•    Only one of the executive officers received a base salary increase in 2012.

Annual Incentive Award   Variable compensation payable in cash based on performance against annually established goals and assessment of individual performance.  

Motivate and reward executive officers for achievement of key strategic, operational and financial measures over the year.

 

Measures used to determine annual incentive:

 

•    The Committee uses financial metrics and individual operating objectives to determine the actual payout to the executive officers.

•    The financial metrics used to determine executive officers annual incentive were:

•    EPS for all executive officers.

•    EP for the CEO and CFO.

•    AOUP for the other executive officers.

 

•    The EPS and EP levels achieved were between threshold and target levels.

•    The AOUP levels for the executive officers ranged between below Threshold to Above Target.

•    Each of the executive officers received a percentage of their incentive for achieving a specified level of the operating objectives.

•    The Pool Plan for 2012 was $25.8 million. Mr. Joerres’ portion of the Pool for 2012 was $7.2 million. However, the individual limit under the Pool Plan is $5 million, which was less than his share of the Pool.

 

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Compensation Element

 

Key Characteristics

 

Objective and Determination

 

2012 Decisions

   

•    The maximum aggregate annual incentives earned by the executive officers subject to the Pool Plan cannot exceed a certain percentage of gross profit (the “Pool”). Each executive officer in the Pool Plan cannot earn more than his or her allocated portion of the Pool.

 

•    Each participant in the Pool Plan received an incentive significantly below his or her allocated portion of the Pool.

•    See page 33 for more information.

Performance Share Units   Variable compensation payable in shares of stock. The PSUs vest based on achievement of a pre-established performance metric over a period of time. If goal is not met, shares are not received.  

Motivate and reward executive officers for performance against long-term financial objectives to align the interests of the executive officers with long-term shareholder value. Target amount awarded is determined based on job scope, market practice and individual performance.

 

Measures used to determine PSUs earned:

 

•    A target level operating profit margin must be achieved in 2012.

•    If operating profit does not meet a certain level in 2012, executive officers will not receive more than 100% of the target level payout.

•    50% of the PSUs earned will be paid at the end of 2013 and the remaining 50% at the end of 2014.

 

•    The number of shares earned based on operating profit margin was between threshold and target.

•    Operating profit was below the Operating Profit Dollar Gate, so the number of PSU’s earned could not be more than the target level, however the PSUs earned were already below target.

•    PSUs represent 50% of the total long-term equity incentive grant awarded to the executive officers.

•    See page 38 for more information.

Restricted Stock Units   Variable compensation payable in shares of stock. 100% of the RSUs vest on the third anniversary date.  

•    Restricted stock units are paid in stock at the end of a retention period (generally at the end of 3 years).

•    Through stock price and dividends, restricted stock units directly align executive officers with the shareholders and add balance to the

 

•    20% of Mr. Joerres’ long-term equity incentive grant in 2012 was in the form of restricted stock units.

•    RSUs represent 20% of the total long-term equity incentive grant awarded to the executive officers.

 

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Compensation Element

 

Key Characteristics

 

Objective and Determination

 

2012 Decisions

   

compensation program as they provide both upside potential and downside risk and add an additional retention incentive.

 
Stock Options   Nonqualified stock options that expire in ten years and become exercisable ratably over four years.  

•    Align the interests of the executive officers with long-term shareholder value as well as retain executive talent. Amount awarded is determined based on job scope, market practice and individual performance.

 

•    30% of Mr. Joerres’ long-term equity incentive grant in 2012 was in the form stock options.

•    Stock options represent 30% of the total long-term equity incentive grant awarded to the executive officers.

Qualified Retirement Plans   None, other than for
Mr. Leentjes in the Netherlands.
 

•    No pension plan benefit in the United States, as we froze the qualified, noncontributory defined benefit pension plan, as well as nonqualified, noncontributory defined benefit deferred compensation plans as of February 29, 2000.

•    No 401(k) plan because of limitation on participation to highly compensated employees under the rules governing such plans.

•    Mr. Leentjes participates in the Dutch pension scheme, generally applicable ManpowerGroup employees in the Netherlands.

 
Nonqualified Savings Plan   Similar to a 401(k) plan, however not as flexible in regards to timing of the payouts of the retirement benefits for nonqualified plans. These benefits are unsecured and subject to risk of forfeiture in bankruptcy.  

•    Used to provide executive officers with reasonably competitive benefits to those in the competitive market.

 
Career Shares   Used selectively by the committee, taking into account what is most appropriate for  

•    Used as a retention incentive in the form of restricted stock units and

 

•    There were no career shares granted in 2012.

 

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Compensation Element

 

Key Characteristics

 

Objective and Determination

 

2012 Decisions

  an executive officer in view of the retention incentive provided by the award. Restricted stock units vest completely on a single date several years into the future.  

to supplement deferred compensation benefits to executives. The committee considers each year whether to make any such grants and to whom.

 
Other Benefits  

•    Used to attract and retain talent needed in the business.

 

•    Additional benefits include financial planning reimbursement and broad-based automobile benefits, selected benefits for expatriate executives, participation in broad-based employee benefit plans, and certain other benefits required by local law or driven by local market practice.

 

Pay for Results

Consistent with ManpowerGroup’s pay for results philosophy, our executive compensation program is designed to motivate our executive officers to contribute to the Company’s long-term performance and success. As such, the following pay components include pay for results features:

 

   

Annual Incentive Award:    Performance goal ranges are established for the CEO and CFO for the financial metrics EPS and EP. For the other executive officers, performance ranges are established for the financial metrics EPS and AOUP and, for Mr. Sullivan, EP. Award opportunities are established for achievement at threshold, target and outstanding levels. Payouts are generally based on actual performance on these metrics as well as the individual operating objectives for each executive officer. However, executive officers who are subject to the Pool Plan cannot receive more than their allocable share of the Pool established under the Pool Plan. The maximum aggregate annual incentives earned by the executive officers under the Pool Plan is determined using a percentage of gross profit. The higher the gross profit, the larger the Pool. See page 33 for further discussion regarding the use of the Pool Plan.

 

   

Long-Term Incentive Awards:

 

   

Stock Options — Approximately 30 percent of executive officer long-term awards are made in the form of stock options. The committee believes stock options provide an important overall longer term incentive for the executive officers to try to maximize value of ManpowerGroup’s stock. Because stock options are granted at a specific value on the date of grant, the ultimate compensation realized will depend on the stock price at the time of exercise.

 

   

Performance Share Units — Approximately 50 percent of executive officer long-term awards are made in the form of performance share units. As stated earlier, the executive officer receives a certain number of shares of stock at the end of a specified period based on achievement of a pre-established performance goals for that period, typically operating profit margin. Award opportunities are established for achievement at threshold, target and outstanding levels. The committee believes using operating profit margin is appropriate because it is a driver of shareholder value.

 

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Target Total Compensation

Target total compensation is the value of the compensation package that is intended to be delivered based on performance against pre-established goals. The following chart illustrates for each of the executive officers the composition of his or her target total compensation among the various compensation elements:

 

LOGO

The committee’s compensation consultant, Mercer, provides the committee with market data that is used in setting target levels for incentive compensation for the executive officers. Actual compensation paid out to the executive officers in a given year may vary significantly from the target levels depending on the actual performance achieved under the pre-established financial and operating goals set by the committee. In general, when the Company has strong financial results, our executive officers are awarded accordingly. Conversely, when the Company has weak financial results or falls short of its business objectives, the executive officers’ payments under these programs decline.

The target compensation is detailed for each executive officer in the following table. This table outlines the values of the various elements and the percentage of each executive officer’s total target compensation package that is variable (both short- and long-term) and performance-based (both short- and long-term).

 

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2012 Executive Officer Target Compensation

 

Executive Officer

  Base
Salary
    Annual
Incentive
    Stock
Options(1)
    Performance
Share
Units(1)
    Restricted
Stock
Units(1)
    Total 2012
Target
Comp
    % Total
Variable
2012
Target
Comp(2)
    % Total
2012 Target
Comp
Performance
Related(3)
 
    $     $     $     $     $     $              

Jeffrey A. Joerres

    1,200,000        1,800,000        1,713,145        3,500,019        1,400,044        9,613,208        88     73

Michael J. Van Handel

    600,000        600,000        611,835        1,250,020        500,035        3,561,890        83     69

Darryl Green

    475,000        356,250        269,222        550,043        220,017        1,870,532        75     63

Francoise Gri

    577,368        433,026        266,260        550,043        220,017        2,046,714        72     61

Hans Leentjes

    413,136        309,852        244,737        500,035        200,032        1,667,792        75     63

Jonas Prising

    475,000        356,250        269,222        550,043        220,017        1,870,532        75     63

Owen J. Sullivan

    475,000        356,250        269,222        550,043        220,017        1,870,532        75     63

 

(1) The value of equity awards in this table represents the grant date fair value of the equity awards granted in 2012, as computed in accordance with FASB ASC Topic 718.

 

(2) Includes annual incentive, stock options, performance share units and restricted stock units.

 

(3) Includes annual incentive, stock options and performance share units.

Restricted stock units are used to provide a retention incentive to executive officers as they are payable in stock if the executive remains with the Company through the vesting date, generally three years after the date of grant. The committee believes that restricted stock units directly align the economic interests of our executive officers with those of our shareholders because in order to retain value or increase in value, officers must produce the appropriate results to support or increase the Company’s stock price.

 

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Balancing Short- and Long-Term Compensation

As stated before, the committee believes it is important that compensation fully aligns the interests of management with shareholder value and has designed the Company’s compensation program to motivate our executive officers to contribute to the Company’s long-term performance and success. In order to accomplish this, the committee balances incentive compensation between short- and long-term incentive awards, with a significant portion of incentive compensation based on the long-term performance of the Company. This reduces the risk that executives will place too much focus on short-term achievements to the detriment of the long-term success of the Company. The following chart details how incentive compensation is allocated between short-term (annual incentive) and long-term incentive compensation (stock options, performance share units and restricted stock units) for each of the executive officers.

 

LOGO

Positioning Compensation Against the Market

The Company’s practice is to target compensation outcomes generally to the median of compensation paid in the competitive market for target results and to provide maximum award opportunities that approximate the 75th percentile of the competitive market for outstanding results. The Company’s approach to market positioning is not strictly formulaic and some compensation levels or award opportunities may fall above or below the reference points. This approach is embodied in the design of the annual incentive plan and the equity-based awards program, as described below. When setting each component of compensation, the Company takes into consideration the allocation of awards in the competitive market between current cash compensation and non-cash compensation including stock options, performance share units and restricted stock units.

Determining the Competitive Market

In determining the competitive market, ManpowerGroup used three main sources in determining compensation for our executive officers in 2012: (1) a subset of the Mercer Core Research Group, a universe of approximately 350 companies in the S&P 500 that Mercer utilizes in its compensation analysis, further customized by Mercer to remove companies that are not comparable to ManpowerGroup, (2) a group of the public companies generally in the staffing industry and (3) position-specific published surveys.

 

29


Similar to past years, ManpowerGroup used Mercer’s core research group of companies as the source of compensation data for executives with responsibilities comparable to those at ManpowerGroup. This core research group has 150 companies with representation that mirrors the Fortune 1000. It includes companies with a minimum of approximately $11 billion of revenues and a maximum of approximately $38 billion, with median revenue of $19 billion. Using this group provides a robust basis for assessing the competitive range of compensation for senior executives of companies of ManpowerGroup’s size and complexity and represents a better approach for this assessment than an approach based on a broad market peer group. In addition, when looking for executive talent, we look to large companies, many of which are included in this peer group. A list of the companies included in the peer group used by ManpowerGroup in 2012 is attached as Appendix A-1.

It is difficult for us to find a peer group because of our size and global reach compared to companies in our industry. Our two largest competitors, Randstad and Adecco, are not U.S. based companies, which makes it difficult to find comparable data for them due to different disclosure requirements. Our closest U.S. public competitor had revenue of approximately $5 billion in 2012 compared to our revenue of $20.7 billion. This makes it difficult for us to find a relevant peer group to compare our executive compensation against. In July of 2012, with the assistance of Mercer, we performed an analysis to find a comparable peer group. Based upon the analysis, it was determined there is not a comparable peer group that was robust enough to use. Because of this, we will continue to use a subset of companies from Mercer’s research group, which they have expanded to the full S&P 500, as the source of compensation data for executives with responsibilities comparable to those at ManpowerGroup.

ManpowerGroup also considers data from compensation surveys published by Mercer and other third-party data providers that are recommended by Mercer as appropriate and credible sources of compensation data for each executive officer’s position. For the CEO and CFO, their positions were typically compared to companies with revenues between $6 billion and $36 billion. For the executives who are the leaders of ManpowerGroup’s business operating units, their positions are compared with U.S. compensation survey data of similar sized groups and divisions. For executive positions located outside of the U.S., ManpowerGroup also takes into account international (regional and local) compensation survey data as a secondary source in an effort to set compensation that is not only equitable among the members of a global team but also competitive within the global markets where ManpowerGroup competes for talent. However, this international data is not included in the composite percentages shown below for these positions.

As stated previously, ManpowerGroup’s size and global reach relative to other companies in its industry make it difficult to find relevant comparative data on performance and compensation. Because the size and scope of their operations are smaller, the public companies in the industry are not comparable to ManpowerGroup. ManpowerGroup only considers the compensation practices of these staffing industry competitors in designing the compensation packages for the executive officers. However, the committee believes the executive positions at these companies are not comparable in scope and complexity to the executive officer positions at ManpowerGroup. Based on size alone, the average annual revenues of these companies in 2012 was $2.5 billion, with the largest having annual revenues of approximately $5.0 billion, whereas ManpowerGroup’s annual revenues were $20.7 billion in 2012. Therefore, the committee does not believe that the compensation levels paid to executives at these companies provide an appropriate indicator of the competitive market for ManpowerGroup executive officers. A list of the companies in the industry-specific comparator group is attached as Appendix A-2.

 

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The following table illustrates how the total opportunity at target performance for total direct compensation for the CEO and CFO for 2012 compared to the median compensation of executives in similar position taken from the core research group and from the U.S. survey data considered.

Total Direct Compensation

 

     % In Relation to Median of Competitive Market  

Executive Officer

   Core Research Group     U.S. Survey
Data
    Composite  

CEO

     100     127     112

CFO

     123     164     140

For the other executive officers, the following table illustrates how the total opportunity at target performance for total direct compensation for 2012 compared to the median compensation of executives in similar positions taken from the composite of the core research group and U.S. survey data considered.

Total Direct Compensation

 

     % In Relation to Median of
Competitive Market
 

Executive Officer

   Core Research Group/
U.S. Survey Data Composite
 

Darryl Green(1)

     86

Françoise Gri(1)

     91

Hans Leentjes(1)

     68

Jonas Prising

     83

Owen J. Sullivan

     95

 

(1) International survey data is also used for these executive officers as a secondary source but not included in the compensation composite. U.S. market data is considered the primary source. This approach takes into consideration the job’s replacement value and that the market for talent for these executives is primarily global, with a secondary consideration given to local cost of labor.

For the CEO, the committee determined the CEO’s target compensation was within a suitable range of the median, given the range of CEO compensation market data is very narrow. For the CFO, the committee determined that his long tenure with the Company, coupled with his significant financial role and broader management role were reasons for which his target compensation was set above the median compensation for the competitive market. For Mr. Leentjes, the committee determined that given Mr. Leentjes was still new to his role, it was appropriate to set his target compensation below the median of the competitive market. For all other executive officers the committee determined their target compensation was within a suitable range of the median.

Assessing Individual Factors

An individual executive officer’s total compensation or any element of compensation may be adjusted upwards or downwards relative to the competitive market based on a subjective consideration of the executive officer’s experience, potential, tenure and results (individual and relevant organizational results), internal equity (which means that comparably positioned executives within ManpowerGroup should have comparable award opportunities), the executive officer’s historical compensation, and any retention concerns. The committee uses a historical compensation report to review the compensation and benefits provided to each executive officer in connection with its compensation decisions concerning that executive officer.

Determining Compensation Levels

The committee determines the CEO and CFO compensation levels, including establishing and determining the achievement of the annual financial goals and operating objectives for the annual incentives, any salary adjustments, and any equity-based compensation awards, subject to ratification by the board of directors.

 

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Generally, the CEO establishes and determines the achievement of the goals and objectives for the annual incentive for the other executive officers, with the committee making the final determinations. The committee also determines any salary adjustments or equity-based awards for the other executive officers, based on recommendations of the CEO.

CEO and CFO Determinations

The annual financial goals for the CEO and the CFO are based on EPS and EP for the year. The process begins with collaboration between Mercer and the CFO. Mercer then reviews this outcome with the chairman of the committee who makes a preliminary decision about the goals. The full committee then reviews and determines the goals and range of award opportunities for achievement of the goals, including the weighting of each goal for the CEO and CFO, subject to ratification by the board of directors. In determining these goals, the committee considers financial information including historical and projected earnings growth, the prior year financial results and the Company’s expected financial performance for the current year, consulting with management, including financial personnel, and Mercer.

Setting the operating objectives for the CEO and CFO begins with the CEO, who at the beginning of each year recommends to the committee the objectives for both himself and the CFO for the year. The committee reviews and ultimately approves these operating objectives, subject to any adjustments, in the context of ManpowerGroup’s strategic and financial plans.

At each compensation meeting during the year, the committee reviews the progress the CEO and CFO are making towards the achievement of their financial goals and objectives for the year. After the close of each year, the committee reviews and approves, subject to ratification by the board of directors, an award amount for the annual incentive based on the achievement of the annual objective financial goals and the CEO and CFO’s performance towards each of their annual operating objectives.

The committee usually determines and approves equity awards to the CEO and CFO, including vesting schedules, at its regularly scheduled meeting in February each year, subject to ratification by the board of directors. The grant date for the awards is the date the committee approves the awards. The exercise price for any options granted is the closing price on the date of grant.

As part of the decision making process for the CEO’s compensation matters, any decisions the committee has or ratification the board of directors makes regarding the CEO’s compensation, are done in executive session, without the CEO or other management present.

Determinations for Executive Officers Other Than the CEO and CFO

The process for setting the annual financial goals for the other executive officers begins with the CEO and CFO selecting the objective financial metrics and establishing proposed goals for those selected metrics for each of the executive officers. The EPS metric is used for each executive officer, with the same goals as those used for the CEO and CFO. The CEO and CFO determine the proposed goals and award opportunities for the executive officers’ other objective financial metrics. The committee reviews these recommended financial goals, makes any adjustments it deems appropriate and then approves the financial goals and range of award opportunities, including the weighting of each goal.

At the beginning of each year, the CEO establishes the operating objectives for the other executive officers.

After the close of each year, the committee reviews and approves an award amount for the annual incentive to each executive officer based on achievement of the executive officer’s annual objective financial goals. The CEO determines the amount of any award to each of the executive officers for performance towards each of their annual operating objectives. The CEO presents the recommended award for each executive officer to the committee for its review and approval.

 

32


The committee usually determines and approves equity awards to the other executive officers, including vesting schedules, at its regularly scheduled meeting in February each year, subject to ratification of the board of directors. The CEO recommends to the committee the individual grants for all executive officers other than himself. The committee may make grants to executive officers at other times during the year, as it deems appropriate. The grant date for the awards is the date the committee approves the awards, except the grant date for a new hire ordinarily is the date of hire if such hire date is after the date of committee approval. The exercise price for any options granted is the closing price on the date of grant.

Components of the 2012 Executive Compensation Program

Base Salary

Base salaries for executive officers are set near the median of base salaries paid in the relevant competitive market, for the particular position, subject to individual performance factors as described earlier. The CEO’s base salary is materially larger than the next highest paid executive officer because of the complexity of his role, level of responsibility, the flat organizational structure and his overall impact on ManpowerGroup. For 2012, the committee increased the base salary paid to Mr. Leentjes to €319,000 ($413,137 using an exchange rate of 1.2951 (in U.S. Dollars), the rate in effect on January 10, 2011, the date Mr. Leentjes was promoted to Executive Vice President, President of Northern Europe). None of the other executive officers received an increase in base salary for 2012.

Base salary levels affect the value of the annual incentive awarded to the executive officers because the incentive award is awarded as a percentage of base salary. A higher base salary will result in a higher annual incentive, assuming the same level of achievement against goals. The level of severance benefit each executive officer may receive is also increased if his or her salary is increased. The value of long-term incentive awards is not determined as a multiple of base salary.

Annual Incentives

Pool Plan

As stated earlier, our shareholders approved The Manpower Inc. Corporate Senior Management Annual Incentive Pool Plan (the “Pool Plan”). The design of the Pool Plan enables the committee to use negative discretion to establish bonuses for our executive officers based on a subjective assessment of the individual’s achievements and the feedback from our CEO about the individual’s performance and overall contribution to the company, while maintaining the ability to deduct the bonuses to the greatest extent permitted under Section 162(m) of the Internal Revenue Code.

For 2012, the committee determined the annual incentive awards for the executive officers who were participants under the Pool Plan cannot exceed .75% percent of gross profit. The maximum amount of the individual awards for each participating executive officer will be the lesser of the shareholder approved maximum under the Pool Plan of $5.0 million or a percentage of the gross profit pool as approved by the committee in advance. The total bonus payout to executives cannot exceed 100% of the pool. As CEO, Mr. Joerres can earn 28% of the pool. The remaining pool is allocated as follows: Mr. Van Handel (10%), Mr. Green (6.0%), Mr. Prising (6.0%), and Mr. Sullivan (6%). The remaining 44% is allocated to other executives in the Company. Bonuses payable to Ms. Gri and Mr. Leentjes are not subject to Section 162(m) and therefore they are not participants in the Pool Plan. Within this structure, the committee uses negative discretion to determine bonuses for our executive officers by continuing to use the goals of EPS, EP, AOUP and various operational objectives to calculate the amount payable to each of the executive officers as long as such amounts are less than their allocable share of the pool. Each of the executive officers who was a participant in the Pool Plan for 2012 received a bonus less than their allocable share of the pool.

 

33


Underlying Goals

The Company fixes the target outcome for EP and EPS at a number that reflects an annual growth target. This target is generally based on the Company’s targeted long-term growth rate for EPS, but may be adjusted year-by-year based on economic conditions and the Company’s expected financial performance for the year. The target growth rate is then adjusted to set a threshold growth rate, which is a level of performance that is below target but still appropriate for some award to be earned, and, to set an outstanding growth rate which is a level of performance appropriate for the maximum incentive to be earned. So the comparisons are valid between the two years, the growth rates are based on growth over results of the previous year excluding non-recurring items, rather than actual growth. The EP target is then determined based on the earnings growth reflected by the EPS target and consideration of factors relating to the Company’s cost of capital. The other financial metrics under the plan used to determine the annual incentives earned by the other executive officers, are determined in a similar way, taking into consideration the economic conditions and expected financial performance of each individual region, as well as the overall EPS and EP targets. To be clear, these targets are not based on the Company’s financial plan for the year, but rather are determined based on the separate methodology described above. As a result, target performance for purposes of achieving an incentive award will not be the same as performance at plan, which may be higher or lower than target performance depending on economic conditions and trends at the time.

Annual Incentives — CEO and CFO The Company believes using EPS as a performance goal keeps the CEO and CFO focused on producing financial results that align with shareholder interests. In that regard, ManpowerGroup is in a cyclical business, which is influenced by economic and labor market cycles that are outside of ManpowerGroup’s control, and it is important that the senior executives manage short-term results closely to be able to adjust strategy and execution in quick response to external cycle changes. The Company uses EP as a performance goal for the CEO and CFO because it measures how effectively our senior management has generated net operating profit after subtracting a capital charge on the total net capital used in the business. Although we are a provider of services, and not a manufacturer of products, our business is still highly capital-intensive. Our requirement for capital arises from the timing characteristics of our business — we typically pay our associates and consultants before we can bill and collect from our clients. Using an EP metric incentivizes our executives to manage our accounts receivable and other capital investments carefully in order to maximize the return on capital deployed. Our metric is structured to reward year-over-year improvement in EP, even where EP may be a negative number during certain portions of the business cycle because of how we calculate the cost of capital.

For 2012, EPS and EP were set based upon the EPS growth rate targets for threshold, target and outstanding performance levels which are as follows:

 

Goal

   Threshold     Target     Outstanding  

EPS Growth Rate

     -29     10     40

The target growth rate reflects the continuing improvement in the global economic conditions. Correspondingly, the growth target for outstanding performance represents what the committee believes is an appropriate growth rate for outstanding performance. The committee believes the threshold growth rate is the minimum level at which it was appropriate to earn an incentive mainly due to the continued uncertainty in the global economic conditions at the time when setting the targets.

The following table shows the EPS and EP goals established by the committee for 2012, which correspond to the EPS growth targets, along with the weighting of each goal towards the total annual incentive award opportunity:

 

Goal

   Threshold     Target      Outstanding  

EPS (weighted 40%)

   $ 2.30      $ 3.55       $ 4.55   

EP (weighted 40%)

   $ (95 )MM    $ 5MM       $ 80MM   

 

34


The 2012 operating objectives for the CEO and CFO, which were weighted 20% of the total annual incentive award opportunity, were established by the committee based on the recommendation of the CEO and the committee’s judgment that they were appropriate in the context of the strategic and financial plan of ManpowerGroup. These operating objectives were as follows:

 

   

Increase brand awareness in Experis, ManpowerGroup Solutions and Innovative Workforce Solutions;

 

   

Increase Experis gross profit;

 

   

Improve selling and administrative expenses as a percent of gross profit; and

 

   

Institute a collaborative work model that increases the organization’s speed of execution while reducing overall costs.

The committee assigned a combined weighting of 80% to the two objective financial goals based on its view that pay should be aligned with financial results and its judgment that the goals largely provide the appropriate incentive for management. The committee believes both EPS and EP are equally important.

The following chart shows the committee’s determination of award opportunities for the annual incentive payable to the CEO as a percentage of 2012 base salary for achieving threshold, target or outstanding results for each measure:

 

     Threshold     Target     Outstanding  

EPS goal

     15.0     60.0     120.0

EP goal

     15.0     60.0     120.0

Operating Objectives

     7.5     30.0     60.0

Total

     37.5     150     300

For the CFO, the committee’s determination of award opportunities for annual incentive payable as a percentage of base salary at threshold, target or outstanding results for each measure was as follows:

 

     Threshold     Target     Outstanding  

EPS goal

     10.0     40.0     80.0

EP goal

     10.0     40.0     80.0

Operating Objectives

     5.0     20.0     40.0

Total

     25     100     200

The committee considers the competitive market in designing its incentive award levels in the manner described above. The committee also took into account the committee’s objective of emphasizing results-based pay rather than fixed salary. The CEO’s award opportunities are higher than the opportunities for the CFO and the other executive officers as the committee takes into account his broad role with final accountability for ManpowerGroup’s global results.

The determination of achievement of the operating objectives is based on the committee’s subjective judgment and, where applicable, achievement of quantitative measures associated with an operating objective. The committee also takes into account the CEO’s assessment of achievement of these objectives.

 

35


The committee determined that the CEO and CFO earned an incentive award for 2012 between threshold and target for both EPS and EP for the year. The committee also approved an incentive award to each of the CEO and CFO based on its determination of the level of performance towards achievement of the operating objectives. Based on these accomplishments, the committee determined to pay 2012 awards as follows:

2012 Annual Incentive Payouts

 

     Target Award      Actual Award  

CEO

   $ 1,800,000       $ 804,180   

CFO

   $ 600,000       $ 310,060   

Annual Incentives — Other Executive Officers As stated above with respect to the CEO and CFO, using EPS as a performance goal is believed to keep the executive officers focused on producing financial results that align with the interests of shareholders. AOUP was selected as the other metric for executive officers under the annual plan to encourage the other executive officers to increase profitability in their respective business units while also considering the cost of capital for carrying accounts receivable. For Mr. Sullivan, EP was also used as a performance goal because of his global functional responsibilities of oversight of ManpowerGroup’s specialty brands and the global sales organization.

The AOUP goals for the executive officers for 2012 were as follows (in 000’s of USD):

 

          Threshold     Target     Outstanding  

Darryl Green

   – AOUP of Asia Pacific region and the Middle East    $ 18,000      $ 43,000      $ 63,000   

Francoise Gri

   – AOUP of Southern Europe    $ (90,000   $ (30,000   $ 15,000   

Hans Leentjes

   – AOUP of Northern Europe    $ 40,000      $ 115,000      $ 170,000   

Jonas Prising

   – AOUP of the Americas    $ (10,000   $ 50,000      $ 100,000   

Owen J. Sullivan

   – AOUP of Right Management    $ (10,000   $ 3,000      $ 15,000   

The target level for each goal was determined based on the same methodology as is described above for the targets set for the goals for CEO and CFO.

The EPS targets for the executive officers and the EP targets for Mr. Sullivan are the same as those set for the CEO and CFO, which can be found on page 34.

The operating objectives for the other executive officers for 2012 are summarized as follows:

 

Darryl Green

    Increase brand awareness, increase revenues and gross profit growth within certain business lines, improve operating leverage, institute a global initiative.

Francoise Gri

    Lead a collaborative effort on a new global initiative, increase external communication to promote ManpowerGroup in France, continue work with promoting our positive role in the labor market, establish a strong presence in key markets within Southern Europe and grow new service lines within the Southern Europe Region, institute a global initiative.

Hans Leentjes

    Reduce ongoing costs of operations, continue to grow certain business lines in the region, increase brand awareness, institute collaborative work model.

Jonas Prising

    Increase brand awareness, continue to grow certain business lines, increase brand awareness, improve business processes to achieve productivity improvement, lead a global initiative.

Owen J. Sullivan

    Increase brand awareness, continue to grow certain business lines, lead a global initiative.

 

36


The annual incentive payable to the executive officers as a percentage of 2012 base salary for achieving threshold, target or outstanding results for each measure of results were as follows:

Darryl Green, Françoise Gri, Hans Leentjes and Jonas Prising

 

     Annual Percentage Payment as a
Percentage of 2012 Base Salary
 
     Threshold     Target     Outstanding  

AOUP Goal

     13.75     41.25     82.5

EPS Goal

     5.0     15.0     30.0

Operating Objectives

     6.25     18.75     37.5

Total

     25.0     75.0     150.0

Owen Sullivan

 

     Annual Incentive Payment as a
Percentage of 2012 Base Salary
 
     Threshold     Target     Outstanding  

AOUP Goal

     6.25     18.75     37.5

EPS Goal

     6.25     18.75     37.5

EP Goal

     6.25     18.75     37.5

Operating Objectives

     6.25     18.75     37.5

Total

     25.0     75.0     150.0

All of the executive officers earned an incentive between the threshold and target award for the EPS financial goal for 2012. For the AOUP financial goals for each of the executive officers, Mr. Green and Mr. Sullivan received an incentive between the target and outstanding award level and Ms. Gri and Mr. Prising received an incentive between the threshold and target award level. Mr. Leentjes did not receive an award for his AOUP financial goal as Northern Europe’s AOUP for 2012 did not meet the threshold level. Mr. Sullivan also received an award between threshold and target for the EP goal. The committee, based upon the recommendation of the CEO, approved incentive awards to each of the executive officers that were determined to be appropriate based on the achievement of each executive officer’s operational objectives for the year.

Based on these accomplishments, the committee determined to pay 2012 awards to the other executive officers as follows:

2012 Annual Incentive Payouts

 

     Target
Award
     Actual
Award
 

Darryl Green

   $ 356,250       $ 377,863   

Francoise Gri(1)

   $ 433,026       $ 212,587   

Hans Leentjes(2)

   $ 309,852       $ 88,246   

Jonas Prising

   $ 356,250       $ 194,085   

Owen J. Sullivan

   $ 356,250       $ 277,638   

 

(1) Ms. Gri’s target award and actual award received have been translated at an exchange rate of 1.3122 (in U.S. Dollars), which was the exchange rate on March 12, 2007, the date Ms. Gri joined ManpowerGroup.

 

(2) Mr. Leentjes’ target award and actual award received have been translated at an exchange rate of 1.2951 (in U.S. Dollars), which was the exchange rate on January 10, 2011, the date Mr. Leentjes was promoted to Executive Vice President, President of Northern Europe.

 

37


Long-Term Incentives

Approximately 50% of the long-term incentive grants granted to the executive officers in 2012 were in the form of performance share units, 30% were in the form of stock options and 20% were in the form of restricted stock units. The number of stock options, performance share units and restricted stock units granted to each executive officer are shown in the Grants of Plan Based Awards table.

Consistent with past years, the stock options granted in 2012 vest ratably over a four-year period.

As stated earlier, the committee chose to include restricted stock units to provide a retention incentive to the executive officers as they are only payable in stock if the executive officer remains with the Company through the vesting date. The restricted stock units have a three-year cliff vest.

For 2012, performance share units granted are based on achievement of a pre-established goal for operating profit margin for 2012. Of these performance shares earned in 2012, 50% will vest at the end of 2013 and the remaining 50% will vest at the end of 2014. This approach emphasizes operating profit margin growth recovery after the economic downturn and provides a longer term retention incentive.

The following table shows the goals established by the committee for the 2012 performance period for these performance share units and the associated payout percentage :

 

     Threshold     Target     Outstanding  

Operating Profit Margin in 2012

     1.50     2.30     3.00

Payout Percentage

     50     100     200

An operating profit “gate” was also established for the performance share units to ensure operating profits margins were achieved without significantly decreasing revenues. If operating profit in 2012 was not at or above the pre-established U.S. Dollar value of $493.0 million, participants could not have received more than 100% of the target level payout regardless of the improvement in operating profit margin.

After conclusion of the 2012 performance period, the committee determined, using the payout table above, that the Company’s operating profit margin was between the threshold and target range. The operating dollar gate was not reached, however since operating profit margin was less than target, the executive officers will receive the performance shares earned regardless of the operating dollar gate. Therefore, the executive officers’ performance share units will be settled in the form of common stock in the following numbers at the end of 2013 and 2014 as long as the executive officers are still employed at the vesting date:

 

Executive Officer

   Performance
Share Units
Granted (#)
     Value at
Date of
Grant
          Performance
Payout %
    Performance
Share Units
Earned (#)(1)
 

Joerres

     78,108         3,500,019          }        74,984   

Van Handel

     27,896         1,250,020            26,780   

Green

     12,275         550,043            11,784   

Gri

     12,275         550,043          96     11,784   

Leentjes

     11,159         500,035            10,713   

Prising

     12,275         550,043            11,784   

Sullivan

     12,275         550,043            11,784   

 

(1) 50% of the performance shares earned will vest at the end of 2013 and 50% at the end of 2014.

The ultimate value of the performance share units earned is dependent on the stock price at the time of vesting. Therefore, depending on the stock price on the date the executive officers actually receive the shares, the realized long-term value of the performance share units could be either greater or less than the value at the date of grant.

 

38


Career Shares and Deferred Compensation Plans

Career shares

The committee selectively grants restricted stock units to the executive officers that vest completely on a single date several years into the future to provide a retention incentive. The committee considers each year whether to make any such grants, to whom to make such grants and the size of such grants. The committee makes these determinations by taking into account what is most appropriate for an executive officer in view of the retention incentive provided by the award and the perceived need to supplement the executive officer’s deferred compensation benefits. There were no career shares granted in 2012.

Nonqualified Savings Plan

ManpowerGroup maintains tax-qualified 401(k) plans for its U.S. employees. For compliance reasons, once an executive is deemed to be “highly compensated” within the meaning of Section 414(q) of the Internal Revenue Code, the executive is no longer eligible to participate in ManpowerGroup’s 401(k) plans. ManpowerGroup maintains a separate non-qualified savings plan for “highly compensated” employees, including eligible executives. The non-qualified plan provides similar benefits to the tax-qualified 401(k) plans, including a company match and profit sharing. However, the nonqualified savings plan is a poor substitute because of the inflexibility as to the timing of the payouts and taxability of the retirement benefits relative to a qualified plan and the plan benefits are unsecured and subject to risk of forfeiture in bankruptcy. The committee maintains this program in an effort to provide executive officers with reasonably competitive benefits to those in the competitive market.

Dutch Pension Plan

When Mr. Leentjes was promoted to the position of Executive Vice President, President of Northern Europe, he was permitted to continue his participation in the Manpower Management B.V. pension plan applicable to ManpowerGroup employees in the Netherlands. This plan is described in further detail on page 56.

Other Benefits

The executive officers participate in the health and dental coverage, company-paid term life insurance, disability insurance, paid time off, and paid holiday programs applicable to other employees in their locality. These rewards are designed to be competitive with overall market practices, while keeping them at a reasonable level. The benefits are in place to attract and retain the talent needed in the business.

ManpowerGroup reimburses executive officers for financial planning assistance. This benefit is provided to ensure that executives prepare adequately for retirement, file their taxes and conduct all stock transactions appropriately. In addition, ManpowerGroup provides memberships in clubs for business entertaining to a limited number of executives. Each executive who is provided such a membership pays the expenses for any personal use of these clubs; however, none of the executive officers used these clubs for personal use in 2012. ManpowerGroup also maintains a broad-based auto program that covers approximately 228 management employees in the U.S., including the U.S.-based executive officers. Pursuant to this program, ManpowerGroup pays 75% of the cost of a leased car for the executive officers based in the U.S. Consistent with local practice in each of the countries in which the other executive officers are located, ManpowerGroup provided Ms. Gri and Mr. Leentjes with a company car and Mr. Green with a car allowance in 2012.

Except in connection with expatriate assignments, as discussed below, ManpowerGroup does not pay tax gross ups to its executive officers on any of the above benefits.

 

39


Severance Agreements

To align our executive compensation program with best governance practices within the committee’s philosophy, the committee has eliminated any tax gross up payments to our CEO and CFO and continue to use double triggers in our severance agreements in order for our executive officers to receive benefits during a change in control.

ManpowerGroup has entered into severance agreements (which include change of control benefits) with each of the executive officers, other than Ms. Gri. These severance agreements are more fully described on page 59. The committee believes that severance and change of control policies are necessary to attract and retain senior talent in a competitive market. The committee also believes that these agreements benefit ManpowerGroup because they clarify the executive officers terms of employment and protect ManpowerGroup’s business during an acquisition. Furthermore, the committee believes that change of control benefits, if structured appropriately, allow the executive officers to focus on their duties and responsibilities during an acquisition.

Additional Executive Compensation Policies

Stock ownership guidelines

The committee believes that executive officers and other senior executives should hold a meaningful stake in ManpowerGroup to align their economic interests with those of the shareholders. To that end, the committee adopted stock ownership guidelines that are based on the stock price and base salary in effect on December 31, 2005. The committee set a goal of five years for these senior executives to attain the targeted ownership levels. During 2011, the company adopted a policy that requires any senior executive that has not met the guidelines to hold 50% of any of the shares received from either exercise or vesting until the guidelines have been met. In 2011, the committee also amended the stock ownership guidelines to be aligned with best practices, changing the type of equity that is included in determining whether the targeted ownership levels have been met. Under the amended guidelines, the committee only takes into account actual shares owned, unvested restricted stock or restricted stock units and unvested performance share units at the threshold level. Previous to 2011, the committee included shares owned and vested stock options. Under the new method, the committee does not consider any stock options or performance share units above the threshold level held by the executive officers. As indicated in the following table, as of December 31, 2012, each of the executive officers had met these guidelines.

 

Executive Officer

   Target as
a multiple
of salary
     Target
value($)
    Target
number of
shares(#)
     Number of
shares held as
of December 31,
2012(#)
     Status as of
December 31, 2012

Jeffrey A. Joerres

     5         5,000,000        107,526         423,365       Guideline Met

Michael J. Van Handel

     3         1,500,000        32,258         142,996       Guideline Met

Darryl Green

     2         850,000 (1)      9,116         47,592       Guideline Met

Francoise Gri

     2         1,049,760 (1)      14,212         42,973       Guideline Met

Hans Leentjes

     2         751,100 (1)      11,345         14,875       Guideline Met

Jonas Prising

     2         700,000        15,053         62,866       Guideline Met

Owen J. Sullivan

     2         800,000        17,204         49,351       Guideline Met

 

(1) For executive officers that became executive officers after 2005, the target values are based on their respective salaries in effect at the time each became an executive officer and the stock price on the date of hire or promotion.

Clawback Policy

In 2012, the committee adopted a compensation recoupment (“clawback”) policy that is applicable to the members of the Company’s senior management. Under the policy, if the committee determines an employee engaged in intentional misconduct that causes a financial restatement, the committee may require the employee to forfeit any outstanding awards, including cash incentives or equity awards, that were received as a result of the misconduct.

 

40


Hedging Policy

ManpowerGroup has adopted a policy prohibiting designated individuals, including the executive officers, from engaging in short-selling of ManpowerGroup securities and buying and selling puts and calls on ManpowerGroup securities without advance approval. To date, no designated individual has requested approval to engage in such a transaction.

Expatriate policies

Part of ManpowerGroup’s executive development strategy includes providing its executives the opportunity to acquire management experience outside of their home country. To facilitate this strategy and to induce the executives to make such a change, ManpowerGroup provides expatriate benefits to its executives that are assigned outside of their home country, which eliminate any tax disadvantages caused by relocation and compensate them for the disruption it causes to them and to their families.

Mr. Prising was provided certain benefits in connection with his assignment to the U.S. to lead ManpowerGroup’s American operations. The assignment agreement provided for benefits related to Mr. Prising’s relocation, including eligibility to participate in an automobile program, payment or reimbursement for housing, tuition, tax preparation, moving and return visit expenses, and tax equalization and tax gross up payments. The initial term of Mr. Prising’s assignment was three years, but the term was extended for an additional two years in December of 2008 and then for one more year in March 2011, extending the benefits until December 31, 2011. Mr. Prising no longer receives these benefits except for tuition, tax preparation and related tax gross up payments which will continue through 2015. Mr. Green also has similar benefits associated with his position leading ManpowerGroup’s Asia-Pacific and Middle East operations, although there is no fixed term for Mr. Green’s agreement.

Realizable Pay

The table below summarizes realizable compensation for Mr. Joerres in 2012 as compared to target compensation. The table does not show the grant date fair value of equity awards granted in 2012, which is shown in the Summary Compensation Table, but instead shows the equity award values for actual earned awards, calculated using the stock price as of December 31, 2012 of $42.44. The value shown for stock options represents the intrinsic value of Mr. Joerres’ grant of stock options in 2012. The difference between the target compensation and the realizable compensation for 2012 demonstrates the effects of our variable pay policies.

Supplemental Table of CEO Realizable Compensation in 2012

 

     Target
Compensation
     Total  Realizable
Compensation
 

Base Salary

   $ 1,200,000       $ 1,200,000   

Annual Incentive

   $ 1,800,000       $ 804,180   
  

 

 

    

 

 

 

Total Cash

   $ 3,000,000       $ 2,004,180   
  

 

 

    

 

 

 

Stock Options

   $ 1,713,145       $ 0 (1) 

RSUs

   $ 1,400,000       $ 1,325,995   

PSUs

   $ 3,500,000       $ 3,182,321 (2) 
  

 

 

    

 

 

 

Total

   $ 9,613,145       $ 6,512,496   
  

 

 

    

 

 

 

 

(1) Because the stock price of $42.44 as of December 31, 2012 was less than the stock price on February 15, 2012 (the date of grant) of $44.81, there is no intrinsic value of the stock options.

 

(2) Mr. Joerres earned 96% of his target grant of performance share units, or 74,984 shares.

 

41


Other Material Tax Implications of the Executive Compensation Program

Tax implications for ManpowerGroup

Section 162(m) of the Internal Revenue Code generally disallows a tax deduction to public corporations for compensation over $1,000,000 for any fiscal year paid to the corporation’s CEO and three most highly compensated executive officers (other than the CEO and CFO) in service as of the end of any fiscal year. However, Section 162(m) also provides that qualifying performance-based compensation will not be subject to the deduction limit if certain requirements are met. Where necessary for covered executives, the committee generally seeks to structure compensation amounts and plans that meet the requirements for deductibility under this provision. Specifically, the committee has taken steps to qualify the stock option awards, performance share unit awards and certain awards under the Corporate Senior Management Annual Incentive Pool Plan as performance-based compensation for this purpose. However, the committee may implement compensation arrangements that do not satisfy these requirements for deductibility if it determines that such arrangements are appropriate under the circumstances. In addition, because of uncertainties as to the application and interpretation of Section 162(m) and the regulations issued thereunder, the committee cannot assure that compensation intended by the committee to satisfy the requirements for deductibility under Section 162(m) will in fact be deductible.

Tax implications for executive officers

The committee generally seeks to structure compensation amounts and arrangements so that they do not result in penalties for the executive officers under the Internal Revenue Code. For example, Section 409A imposes substantial penalties and results in the loss of any tax deferral for nonqualified deferred compensation that does not meet the requirements of that section. The committee has structured the elements of ManpowerGroup’s compensation program so that they are either not characterized as nonqualified deferred compensation under Section 409A or meet the distribution, timing and other requirements of Section 409A. Without these steps, certain elements of compensation could result in substantial tax liability for the executive officers. Section 280G and related provisions impose substantial excise taxes on so-called “excess parachute payments” payable to certain executives upon a change of control and results in the loss of the compensation deduction for such payments by the executive’s employer. The severance agreements with the executive officers limit the amount of the severance payment in the event that the severance payment will be subject to excise taxes imposed under Section 280G, but only where the after-tax amount received by the executive officer would be greater than the after-tax amount without regard to such limitation.

REPORT OF THE EXECUTIVE COMPENSATION AND HUMAN RESOURCES COMMITTEE OF THE BOARD OF DIRECTORS

The executive compensation and human resources committee of the board of directors of ManpowerGroup has reviewed and discussed with management the Compensation Discussion and Analysis included in this proxy statement. Based on this review and discussion, the executive compensation and human resources committee recommended to the board of directors that the Compensation Discussion and Analysis be included in this proxy statement.

The Executive Compensation and Human Resources Committee

Jack M. Greenberg, Chairman

Marc J. Bolland

William Downe

Cari M. Dominguez

Elizabeth P. Sartain

John R. Walter

 

42


EXECUTIVE COMPENSATION AND HUMAN RESOURCES COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

No member of the executive compensation and human resources committee has ever been an officer or employee of ManpowerGroup or any of our subsidiaries and none of our executive officers has served on the compensation committee or board of directors of any company of which any of our other directors is an executive officer.

COMPENSATION POLICIES AND PRACTICES AS THEY RELATE TO RISK MANAGEMENT

Members of the Company’s senior management team have considered and discussed the Company’s compensation policies and practices and specifically whether these policies and practices create risks that are reasonably likely to have a material adverse effect on ManpowerGroup. Management has also discussed this issue with the executive compensation and human resources committee and has determined there are no risks arising from our compensation policies and practices that are reasonably likely to have a material adverse effect on ManpowerGroup.

As ManpowerGroup is located in various countries around the world, we have several incentive plans. Our plans use various financial performance growth metrics, generally relating to profitability. As a result, there is no common incentive driving behavior. We also have controls in place that mitigate any impact these plans might have on us. In general, each of our incentive plans has a threshold, target and outstanding payout level, which is not material to the Company, that is earned based on the results of the financial metrics. In addition, there is an approval process of the various incentive plans in each country, which are approved by the country manager and financial manager in the respective country to ensure the growth metrics are based on company performance.

Our largest and most significant incentive plan in 2012 is the Corporate Senior Management Annual Incentive Pool Plan, which is the plan in which certain of our executive officers participate. The executive compensation and human resources committee has general oversight of this plan and has capped the total incentive payout for each executive. The cap has been set at a level such that employees cannot receive a bonus that is significant enough to create a significant risk to the Company. In addition, the committee has established financial metrics for each of the executive officers, which focus on company-wide and segment-wide goals and objectives, and the results of those metrics are reviewed and approved at multiple levels in the Company.

Based on the above factors, we do not believe our compensation policies and practices create risks that are reasonably likely to have a material adverse effect on ManpowerGroup.

 

43


Summary Compensation Table

The table below set forth the compensation earned by our paid to our executive officers during the fiscal years ended December 31, 2012, December 31, 2011 and December 31, 2010. Mr. Leentjes was not an executive officer in fiscal 2010; therefore, in accordance with the SEC’s disclosure rules, information regarding compensation for the years that he was not an executive officer is not included in the table below. All amounts are calculated in accordance with SEC disclosure rules, including amount with respect to our equity compensation plan awards, as further described below.

 

Name &

Principal Position

  Year     Salary
($)
    Bonus
($)
    Stock
Awards
($)(1)
    Option
Awards
($)(2)
    Non-Equity
Incentive Plan
Compensation
($)
    Change in
Pension
Value and
Non-
Qualified
Deferred
Compensation
Earnings
($)
    All Other
Compensation
($)(4)
    Total
($)
 

Jeffrey A. Joerres

    2012        1,200,000        0        4,900,063        1,713,145        804,180        21,369 (3)      153,576        8,792,333   

CEO

    2011        1,200,000        0        4,900,096        1,779,883        2,900,000        11,921        160,271        10,952,171   
    2010        1,000,000        0        2,173,410        3,184,268        2,305,521        9,982        68,517        8,741,698   

Michael J. Van Handel

    2012        600,000        0        1,750,054        611,835        310,060        23,503 (3)      68,988        3,364,440   

CFO

    2011        600,000        0        1,750,087        635,682        1,040,800        13,234        79,434        4,119,237   
    2010        550,000        0        795,150        1,027,834        845,358        11,134        46,456        3,275,932   

Darryl Green(5)

    2012        475,000        0        770,060        269,222        377,863        0        514,309        2,406,454   

President,

ManpowerGroup

    2011        475,000        0        1,330,050        483,128        657,638        0        849,887        3,795,703   
    2010        425,000        0        318,060        443,379        477,700        0        530,593        2,194,732   

Francoise Gri(6),(7)

    2012        577,368        0        770,060        266,260        212,587        0        14,442        1,840,717   

Former EVP and President,

Southern Europe

    2011        577,368        0        700,062        232,905        548,268        0        12,786        2,071,389   
    2010        524,880        0        318,060        565,394        501,943        0        10,680        1,798,942   

Hans Leentjes(8)

    2012        413,136        0        700,066        244,737        88,246        213,134 (9)      22,791        1,682,110   

EVP and President,

Northern Europe

    2011        375,579        0        560,049        203,439        326,941        144,610        19,320        1,629,938   
                 

Jonas Prising(10)

    2012        475,000        0        770,060        269,222        194,085        0        171,527        1,879,894   

President,

ManpowerGroup

    2011        475,000        0        1,700,082        254,273        505,258        0        263,929        3,198,542   
    2010        425,000        0        318,060        443,379        585,863        0        258,127        2,030,429   

Owen J. Sullivan

    2012        475,000        0        770,060        269,222        277,638        0        55,728        1,847,648   

EVP and President,

Specialty Brands

    2011        475,000        0        1,700,082        254,273        473,670        0        55,979        2,959,004   
    2010        420,000        0        318,060        443,379        251,370        0        49,759        1,482,568   

 

(1) The value of stock awards in this table for all years includes the grant date fair value at target for performance share units and, for 2012 and 2011, restricted stock units (including career shares) as computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, “Stock Compensation.” See page 47 for the breakout in the grant date fair value of performance share units and restricted stock units.

The grant date fair value of the 2012 and 2011 performance share unit awards at the outstanding level for each executive officer was:

 

                             Name    2012      2011  

Jeffrey A. Joerres

   $ 7,000,039       $ 7,000,079   

Michael J. Van Handel

     2,500,040         2,500,086   

Darryl Green

     1,100,086         1,900,033   

Francoise Gri

     1,100,086         1,000,088   

Hans Leentjes

     1,000,068         800,070   

Jonas Prising

     1,100,086         1,000,088   

Owen J. Sullivan

     1,100,086         1,000,088   

 

44


(2) The value of options in this table represents the grant date fair value of the stock options as computed in accordance with FASB ASC Topic 718.

 

(3) Although the amount of benefits for each executive officer under the U.S. pension plans was frozen in 2000, the change in actuarial value is due to the change in actuarial assumptions from year to year, as calculated under the rules governing financial reporting for U.S. pension plans.

 

(4) These amounts are described in further detail in the All Other Compensation in 2012 Table.

 

(5) Mr. Green served as Executive Vice President, President, Asia Pacific and Middle East until November 15, 2012 when he was appointed President, ManpowerGroup.

 

(6) Ms. Gri served as Executive Vice President, President Southern Europe until November 5, 2012. Amounts disclosed in this table reflect payments made to her following such date (e.g., continued salary and her 2012 incentive payment) as Ms. Gri continued to perform transition services as an employee beyond such date.

 

(7) Ms. Gri’s annual salary was €440,000. Ms. Gri’s salary and incentive payment were paid in Euros and have been translated at an exchange rate of 1.3122 (in U.S. Dollars), which was the exchange rate on March 12, 2007, the date Ms. Gri joined ManpowerGroup. The amount of all other compensation has been translated at an exchange rate of 1.3193 (in U.S. Dollars), the rate in effect on December 31, 2012. Based on the exchange rate of 1.3193 (in U.S. Dollars), as of December 31, 2012, Ms. Gri’s salary was $580,492 and incentive compensation was $213,737.

 

(8) Mr. Leentjes’ annual salary is €319,000. Mr. Leentjes’ salary and incentive payment are paid in Euros and have been translated at an exchange rate of 1.2951 (in U.S. Dollars), which was the exchange rate on January 10, 2011, the date Mr. Leentjes was promoted to Executive Vice President, President of Northern Europe. The amount of all other compensation has been translated at an exchange rate of 1.3193 (in U.S. Dollars), the rate in effect on December 31, 2012. Based on the exchange rate of 1.3193 (in U.S. Dollars), as of December 31, 2012, Mr. Leenjtes salary was $420,857 and incentive compensation was $89,895.

 

(9) The amount of the change in pension value has been translated at an exchange rate of 1.2951(in U.S. Dollars), the rate in effect on January 10, 2011, the date of Mr. Leentjes’ promotion. Based on the exchange rate of 1.3193 (in U.S. Dollars), as of December 31, 2012, Mr. Leentjes’ change in pension value was $217,117. In addition, as described in the Pension Benefits Table on page 55, Mr. Leentjes contributes a portion of his salary towards his pension premium. The amount contributed by Mr. Leentjes in 2012 was $25,151, translated at the January 10, 2011 exchange rate of 1.2951 (in U.S. Dollars), which is included in the change in pension value.

 

(10) Mr. Prising served as Executive Vice President, President, Americas until November 15, 2012 when he was appointed President, ManpowerGroup.

 

45


All Other Compensation in 2012

 

Name & Principal Position

   Perquisites
& Other
Personal
Benefits
($)(1)
    Tax
Reimbursements
($)(2)
    Payments/
Accruals on
Termination
Plans
($)
     Company
Contributions
to Defined
Contribution
Plans
($)(3)
     Total Other
Compensation
($)
 

Jeffrey A. Joerres

     47,191 (4)      0        0         106,385         153,576   

CEO

            

Michael J. Van Handel

     28,072        0        0         40,916         68,988   

CFO

            

Darryl Green

     251,149 (5)      263,160 (6)      0         0         514,309   

President, ManpowerGroup

            

Françoise Gri

     14,442 (7)      0        0         0         14,442   

Former EVP and President, Southern Europe

            

Hans Leentjes

     22,791 (8)      0        0         0         22,791   

EVP and President, Northern Europe

            

Jonas Prising

     89,691 (9)      52,429 (10)      0         29,407         171,527   

President, ManpowerGroup

            

Owen J. Sullivan

     30,728        0        0         25,000         55,728   

EVP and President, Specialty Brands

            

 

(1) Except as otherwise indicated, these amounts include the value attributable to each executive’s participation in ManpowerGroup’s company car program, auto insurance, life insurance premiums paid and/or the value of financial services paid for by ManpowerGroup.

 

(2) Due to the complex nature of calculating these tax reimbursements, in certain cases the amounts are paid to the executive officers one or more years after the income to which they relate was earned by the executive officer.

 

(3) These contributions were made by ManpowerGroup on behalf of the executive officers under the terms of the Nonqualified Savings Plan. Further information regarding the Nonqualified Savings Plan can be found in the Nonqualified Deferred Compensation Table and accompanying narrative.

 

(4) $31,561 of this amount reflects the lease and maintenance payments associated with Mr. Joerres’ automobile.

 

(5) In addition to the amounts described above in footnote (1), this amount reflects tax compliance services of $31,005, a housing allowance of $90,000, a tuition allowance of $40,000 for Mr. Green’s children, and a car allowance of $18,664. These benefits are paid to Mr. Green in connection with his assignment to Asia. The housing, tuition and car allowances have been translated at an exchange rate for Japanese Yen of .008415454 (in U.S. Dollars), which was the average exchange rate in effect between the date he received his offer letter from ManpowerGroup on April 4, 2007 and the date he signed it on April 10, 2007. Based on the exchange rate of .011527 (in U.S. Dollars) as of December 31, 2012, the specific conversions of the amounts mentioned above paid in Japanese Yen included a housing allowance of $123,277, a tuition allowance of $54,784, and a car allowance of $25,566. Also included in this column is airfare for one return trip for his family members to the U.S. of $39,625 and relocation expenses of $31,637, both of which have been translated at the exchange rate for Singapore Dollar of .0818465 (in U.S. Dollars) which was the exchange rate in effect on December 31, 2012.

 

(6) $230,205 of this amount reflects the value of the gross up and tax equalization payments paid in 2012 to Mr. Green attributable to compensation he received during 2011. The remaining $32,499 reflects the value of the gross up payments Mr. Green received for taxes on housing and tuition payments during 2012 and has been translated at an exchange rate for Japanese Yen of .011527 (in U.S. Dollars) which was the exchange rate in effect on December 31, 2012.

 

46


(7) In accordance with her employment agreement, Ms. Gri was provided with an automobile and this amount reflects the lease and maintenance payments associated with the automobile. Amounts paid in Euros in this column have been translated at an exchange rate of 1.3193 (in U.S. Dollars), which was the exchange rate in effect on December 31, 2012.

 

(8) In accordance with his employment agreement, Mr. Leentjes is provided with an automobile and financial services. This amount reflects the lease and maintenance payments associated with his automobile and the cost of financial services provided to Mr. Leentjes. Amounts paid in Euros in this column have been translated at an exchange rate of 1.3193 (in U.S. Dollars), which was the exchange rate in effect on December 31, 2012.

 

(9) In addition to the amounts described above in footnote (1), included in this amount are tax preparation services and tuition payments of $40,333 for Mr. Prising’s children. These benefits are paid to Mr. Prising in connection with his assignment to the U.S.

 

(10) $20,137 of this amount reflects tax equalization payments paid in 2012 to Mr. Prising in connection with his assignment to the U.S. attributable to compensation received by him in 2011. The remaining amount reflects the value of the gross up payments Mr. Prising received for taxes on tuition and tax preparation payments during 2012.

Grants of Plan-Based Awards in 2012

 

   

Plan Name

  Grant
Date
    Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards(1)
    Estimated Future Payouts
Under Equity Incentive
Plan Awards(2)
    All
Other
Stock
Awards:
Number
of
Shares
of Stock
or Units
(#)(3)
    All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)(4)
    Exercise
or Base
Price of
Option
Awards
($/Sh)
    Grant
Date
Fair
Value of
Stock
and
Option
Awards
($)(5)
 

Name & Principal Position

      Threshold
($)
    Target
($)
    Maximum
($)
    Threshold
(#)
    Target
(#)
    Maximum
(#)
         

Jeffrey A. Joerres

  Annual Cash     —          450,000        1,800,000        3,600,000        —          —          —          —          —          —          —     

CEO

  Incentive     2/15/2012        —          —          —          39,054        78,108        156,216        —          —          —          3,500,019   
  2011 Equity     2/15/2012        —          —          —          —          —          —          31,244        —          —          1,400,044   
  Incentive Plan     2/15/2012        —          —          —          —          —          —          —          106,980        44.81        1,713,145   

Michael J. Van Handel

  Annual Cash     —          150,000        600,000 1,200,000        —          —          —          —          —          —          —     

CFO

  Incentive     2/15/2012        —          —          —          13,948        27,896        55,792        —          —          —          1,250,020   
  2011 Equity     2/15/2012        —          —          —          —          —          —          11,159        —          —          500,035   
  Incentive Plan     2/15/2012        —          —          —          —          —          —          —          38,207        44.81        611,835   

Darryl Green

  Annual Cash     —          118,750        356,250        712,500        —          —          —          —          —          —          —     

President,

  Incentive     2/15/2012        —          —          —          6,138        12,275        24,550        —          —          —          550,043   

ManpowerGroup

  2011 Equity     2/15/2012        —          —          —          —          —          —          4,910        —          —          220,017   
  Incentive Plan     2/15/2012        —          —          —          —          —          —          —          16,812        44.81        269,222   

Francoise Gri

  Annual Cash     —          144,342        433,026        866,052        —          —          —          —          —          —          —     

Former EVP and

  Incentive     2/15/2012        —          —          —          6,138        12,275        24,550        —          —          —          550,043   

President, Southern

  2011 Equity     2/15/2012        —          —          —          —          —          —          4,910        —          —          220,017   

Europe

  Incentive Plan     3/09/2012        —          —          —          —          —          —          —          16,812        44.18        266,260   

Hans Leentjes

  Annual Cash     —          103,284        309,852        619,704        —          —          —          —          —          —          —     

EVP and President,

  Incentive     2/15/2012        —          —          —          5,580        11,159        22,318        —          —          —          500,035   

Northern Europe

  2011 Equity     2/15/2012        —          —          —          —          —          —          4,464        —          —          200,032   
  Incentive Plan     2/15/2012        —          —          —          —          —          —          —          15,283        44.81        244,737   

Jonas Prising

  Annual Cash     —          118,750        356,250        712,500        —          —          —          —          —          —          —     

President,

  Incentive     2/15/2012        —          —          —          6,138        12,275        24,550        —          —          —          550,043   

ManpowerGroup

  2011 Equity     2/15/2012        —          —          —          —          —          —          4,910        —          —          220,017   
  Incentive Plan     2/15/2012        —          —          —          —          —          —          —          16,812        44.81        269,222   

Owen J. Sullivan

  Annual Cash     —          118,750        356,250        712,500        —          —          —          —          —          —          —     

EVP and President,

  Incentive     2/15/2012        —          —          —          6,138        12,275        24,550        —          —          —          550,043   

Specialty Brands

  2011 Equity     2/15/2012        —          —          —          —          —          —          4,910        —          —          220,017   
  Incentive Plan     2/15/2012        —          —          —          —          —          —          —          16,812        44.81        269,222   

 

(1) These amounts represent the threshold, target, and maximum annual cash incentive awards for the executive officers using the scorecard approach the Committee used in exercising negative discretion under the Pool Plan. Prior to any exercise of negative discretion, the maximum amount payable to the named executives under the Pool Plan is the lesser of a shareholder approved maximum of $5.0 million or a percentage of the award pool, which varies by executive officer. See page 33 for the pool allocation for each executive officer.

 

(2) These amounts represent the number of performance share units that could be earned for the 2012 performance period.

 

47


(3) Amounts represent the number of restricted stock granted in February 2012.

 

(4) These amounts represent the number of shares underlying stock options that were granted in 2012.

 

(5) The grant date fair value of stock and option awards granted in 2012 that are reported in this column have been computed in accordance with FASB ASC Topic 718.

Compensation Agreements and Arrangements

ManpowerGroup entered into compensation agreements and severance agreements with the CEO and the CFO in February 2011 that replaced their prior agreements. The term under each of the compensation agreements and severance agreements expires on the first to occur of (1) the date two years after the occurrence of a change of control of ManpowerGroup or (2) February 16, 2014, if no such change of control occurs before February 16, 2014. The severance agreements with the CEO and the CFO are described in further detail in the section entitled “Termination of Employment and Change of Control Arrangements” following the Nonqualified Deferred Compensation Table. Under the compensation agreements, the CEO and the CFO are entitled to receive a base salary, as may be increased from time to time by ManpowerGroup and each is entitled to receive incentive compensation in accordance with an annual incentive plan approved and administered by the executive compensation and human resources committee. The CEO is entitled to receive an annual base salary of at least $1,200,000 per year, and the CFO is entitled to receive an annual base salary of at least $600,000 per year. The annual incentive plan for the CEO and the CFO is described in further detail in the Compensation Discussion and Analysis included in this proxy statement.

In addition, the CEO and CFO are eligible for all benefits generally available to the senior executives of ManpowerGroup, subject to and on a basis consistent with the terms, conditions and overall administration of such benefits. The compensation agreements also contain nondisclosure provisions that are effective during the term of the executive’s employment with ManpowerGroup and during the two-year period following the termination of the executive’s employment with ManpowerGroup, and nonsolicitation provisions that are effective during the term of the executive’s employment with ManpowerGroup and during the one-year period following the termination of the executive’s employment with ManpowerGroup.

Mr. Sullivan, Mr. Prising, Mr. Green and Mr. Leentjes currently receive an annual incentive bonus determined pursuant to an incentive arrangement with ManpowerGroup and all have entered into severance agreements with ManpowerGroup. The annual incentive bonus arrangements are described in further detail in the Compensation Discussion and Analysis included in this proxy statement and the severance agreements for each executive officer are described in further detail in the section entitled “Termination of Employment and Change of Control Arrangements” following the Nonqualified Deferred Compensation Table.

In connection with his employment as President, Asia Pacific and the Middle East, ManpowerGroup entered into an agreement with Mr. Green to provide for benefits related to Mr. Green’s appointment in Asia, including a car allowance, payment or reimbursement for housing, tuition, tax preparation, moving and return visit expenses, tax gross ups on these expenses and tax equalization payments.

In connection with her appointment as President of Manpower France SAS, Ms. Gri entered into a compensation agreement with Manpower France Holdings SAS. Under her compensation agreement, she was entitled to receive an annual base salary of €400,000, which was increased from time to time, and she was entitled to receive annual incentive compensation. In addition, under her employment contract, Ms. Gri was entitled to reimbursement of her business expenses, a company car, and a limited number of vacation days. Her employment agreement also contained nondisclosure provisions that were effective during the term of her employment with ManpowerGroup and following the termination of her employment with ManpowerGroup.

In connection with his appointment as President, Northern Europe, ManpowerGroup entered into an employment agreement with Mr. Leentjes in 2011. Under the employment agreement, he is entitled to receive an

 

48


annual base salary of €290,000, as may be increased from time to time, and he is entitled to receive annual incentive compensation. In addition, under his employment contract, Mr. Leentjes is entitled to reimbursement of his business expenses, a company car, and a limited number of vacation days. During the term of his employment, Mr. Leentjes is entitled to continue his participation in the pension plan of Manpower Management B.V., the pension plan applicable to ManpowerGroup’s employees in the Netherlands. He also has entered into a nondisclosure agreement with ManpowerGroup that is effective during the term of his employment with ManpowerGroup and following the termination of his employment with ManpowerGroup.

2012 Annual Incentive Awards

The following tables illustrate the achievement of the performance targets in relation to the payment of the 2012 Annual Incentive Awards.

For 2012, ManpowerGroup’s EPS was $2.47 (compared to $2.30 at threshold, $3.55 at target and $4.55 at outstanding) and EP was -$81.9 MM (compared to -$95 MM at threshold, $5 MM at target and $80 MM at outstanding).

Jeffrey A. Joerres — 2012 Annual Incentive Calculation

 

     Performance
Level
     Percentage
of 2012
Salary
    Amount
Earned
 

EPS Goal

     Above Threshold         21.12   $ 253,440   

EP Goal

     Above Threshold         20.90   $ 250,740   

Operating Objectives

     Above Threshold         25.00   $ 300,000   

Total Incentive

        67.02   $ 804,180   

Michael J. Van Handel — 2012 Annual Incentive Calculation

 

     Performance
Level
     Percentage
of 2012
Salary
    Amount
Earned
 

EPS Goal

     Above Threshold         14.08   $ 84,480   

EP Goal

     Above Threshold         13.93   $ 83,580   

Operating Objectives

     Above Target         23.67   $ 142,000   

Total Incentive

        51.68   $ 310,060   

Darryl Green — 2012 Annual Incentive Calculation

 

     Performance
Level
     Percentage
of 2012
Salary
    Amount
Earned
 

AOUP of APME Goal

     Above Target         54.44   $ 258,590   

EPS Goal

     Above Threshold         6.36   $ 30,210   

Operating Objectives

     At Target         18.75   $ 89,063   

Total Incentive

        79.55   $ 377,863   

 

49


Francoise Gri — 2012 Annual Incentive Calculation(1)

 

     Performance
Level
     Percentage
of 2012
Salary
    Amount
Earned
 

AOUP of Southern Europe Goal

     Above Threshold         16.46   $ 95,035   

EPS Goal

     Above Threshold         6.36   $ 36,720   

Operating Objectives

     Above Threshold         14.00   $ 80,832   

Total Incentive

        36.82   $ 212,587   

 

(1) Ms. Gri’s incentive is paid in Euros and has been translated above at an exchange rate of 1.3122 (in U.S. Dollars), which was the exchange rate on March 12, 2007.

Hans Leentjes — 2012 Annual Incentive Calculation(1)

 

     Performance
Level
     Percentage
of 2012
Salary
    Amount
Earned
 

AOUP of Northern Europe Goal

     Below Threshold         0   $ 0   

EPS Goal

     Above Threshold         6.36   $ 26,276   

Operating Objectives

     Above Threshold         15.00   $ 61,970   

Total Incentive

        21.36   $ 88,246   

 

(1) Mr. Leentjes incentive is paid in Euros and has been translated above at an exchange rate of 1.2951 (in U.S. Dollars), which was the exchange rate on January 10, 2011.

Jonas Prising — 2012 Annual Incentive Calculation

 

     Performance
Level
     Percentage
of 2012
Salary
    Amount
Earned
 

AOUP of America’s Goal

     Above Threshold         15.75   $ 74,812   

EPS Goal

     Above Threshold         6.36   $ 30,210   

Operating Objectives

     At Target         18.75   $ 89,063   

Total Incentive

        40.86   $ 194,085   

Owen J. Sullivan — 2012 Annual Incentive Calculation

 

     Performance
Level
     Percentage
of 2012
Salary
    Amount
Earned
 

AOUP of Right Management Goal

     Above Target         23.86   $ 113,335   

EP Goal

     Above Threshold         7.89   $ 37,478   

EPS Goal

     Above Threshold         7.95   $ 37,762   

Operating Objectives

     At Target         18.75   $ 89,063   

Total Incentive

        58.45   $ 277,638   

Grants Under the 2011 Equity Incentive Plan

Stock options.    ManpowerGroup made grants of stock options to all of the executive officers (other than Ms. Gri) under the 2011 Equity Incentive Plan in February 2012. To comply with certain French laws, the stock option grant to Ms. Gri was made in March 2012. The stock options granted in 2012 vest 25% per year over a four-year period and if they are not exercised, they expire in ten years (or earlier following a termination of

 

50


employment). Additional vesting terms applicable to these options are described in further detail in the section entitled “Termination of Employment and Change of Control Arrangements” following the Nonqualified Deferred Compensation Table.

Performance share units.    ManpowerGroup made grants of performance share units to all of the executive officers under the 2011 Equity Incentive Plan in February of 2012. Each executive officer received a performance share unit grant, 96% of which was earned based on the Operating Profit Margin Percentage in 2012. Of these performance shares earned in 2012, 50% vest at the end of 2013 and the remaining 50% vest at the end of 2014 as long as the executive officers continue to be employed by the Company. See page 38 for a description of the goals established by the committee for the 2012 performance share unit grant.

No dividends are paid on the performance share units unless and until actual shares are issued to the executive officer upon the vesting of the performance share units and in such case, dividends would be paid only for record dates occurring after the issuance date. Additional vesting terms applicable to these grants are described in further detail in the section entitled “Termination of Employment and Change of Control Arrangements” following the Nonqualified Deferred Compensation Table.

Restricted stock units.    The restricted stock units granted to the executive officers in 2012 have a three-year cliff vest and are earned as long as the executive officer continues to be employed by the Company. Dividend equivalents are paid on the restricted stock units under these awards. Additional vesting terms applicable to these grants are described in further detail in the section entitled “Termination of Employment and Change of Control Arrangements” following the Nonqualified Deferred Compensation Table.

Career shares.    ManpowerGroup did not make any grants of career shares in 2012.

 

51


Outstanding Equity Awards at December 31, 2012

 

Name & Principal Position

  Option Awards     Stock Awards  
  Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
    Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
    Equity
Incentive
Plan

Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
    Option
Exercise
Price
($)
    Option
Expiration
Date
    Number
of
Shares
or Units
of  Stock
that
Have
Not
Vested
(#)(1)
    Market
Value
of Shares
or Units
of
Stock
that
Have Not
Vested
($)(2)
    Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units, or
Other
Rights
that Have
Not
Vested
(#)(3)
    Equity
Incentive
Plan
Awards:
Market
or Payout
Value of
Unearned
Shares,
Units, or
Other
Rights
that
Have
Not
Vested
($)(2)
 

Jeffrey A. Joerres

    35,000        —          —        $ 31.16        02/18/2013        —          —          —          —     

CEO

    50,000        —          —        $ 44.08        02/18/2014        —          —          —          —     
    150,000        —          —        $ 44.37        02/16/2015        —          —          —          —     
    130,000        —          —        $ 52.78        02/14/2016        —          —          —          —     
    115,000        —          —        $ 76.30        02/14/2017        —          —          —          —     
    180,000        —          —        $ 56.64        02/20/2018        —          —          —          —     
    187,500        62,500 (4)      —        $ 30.96        02/17/2019        —          —          —          —     
    79,000        79,000 (5)      —        $ 53.01        02/18/2020        —          —          —          —     
    17,384        52,153 (6)      —        $ 67.12        02/16/2021        —          —          —          —     
    —          106,980 (7)      —        $ 44.81        02/15/2022        —          —          —          —     
    —          —          —          —          —          40,000 (8)    $ 1,697,600        —          —     
    —          —          —          —          —          21,670 (9)    $ 919,675        —          —     
    —          —          —          —          —          31,910 (10)    $ 1,354,260        —          —     
    —          —          —          —          —          —          —          41,196 (14)    $ 1,748,358   
    —          —          —          —          —          —          —          78,108 (15)    $ 3,314,904   

Michael J. Van Handel

    13,500        —          —        $ 31.16        02/18/2013        —          —          —          —     

CFO

    15,000        —          —        $ 44.08        02/18/2014        —          —          —          —     
    50,000        —          —        $ 44.37        02/16/2015        —          —          —          —     
    45,000        —          —        $ 52.78        02/14/2016        —          —          —          —     
    30,000        —          —        $ 76.30        02/14/2017        —          —          —          —     
    45,000        —          —        $ 56.64        02/20/2018        —          —          —          —     
    60,000        20,000 (4)      —        $ 30.96        02/17/2019        —          —          —          —     
    25,500        25,500 (5)      —        $ 53.01        02/18/2020        —          —          —          —     
    6,208       18,627 (6)      —        $ 67.12        02/16/2021        —          —          —          —     
    —          38,207 (7)      —        $ 44.81        02/15/2022        —          —          —          —     
    —          —          —          —          —          7,740 (9)    $ 328,486        —          —     
    —          —          —          —          —          11,397 (10)    $ 483,689        —          —     
    —          —          —          —          —          —          —          14,713 (14)    $ 624,420   
    —          —          —          —          —          —          —          27,896 (15)    $ 1,183,906   

Darryl Green

    20,000        —          —        $ 93.24        05/28/2017        —          —          —          —     

President, ManpowerGroup

    25,000        —          —        $ 56.64        02/20/2018        —          —          —          —     
    10,250        10,250 (4)      —        $ 30.96        02/17/2019        —          —          —          —     
    11,000        11,000 (5)      —        $ 53.01        02/18/2020        —          —          —          —     
    4,718       14,157 (6)      —        $ 67.12        02/16/2021        —          —          —          —     
    —          16,812 (7)      —        $ 44.81        02/15/2022        —          —          —          —     
    —          —          —          —          —          5,882 (9)    $ 249,632        —          —     
    —          —          —          —          —          5,351 (11)    $ 227,096        —          —     
    —          —          —          —          —          5,015 (10)    $ 212,837        —          —     
    —          —          —          —          —          —          —          11,182 (14)    $ 474,564   
    —          —          —          —          —          —          —          12,275 (15)    $ 520,951   

Françoise Gri

    20,000        —          —        $ 73.86        03/12/2017        —          —          —          —     

Former EVP and President,

Southern Europe

    27,000        —          —        $ 55.10        03/11/2018        —          —          —          —     
    30,750        10,250 (16)      —        $ 27.99        03/09/2019        —          —          —          —     
    13,500        13,500 (17)      —        $ 55.33        03/08/2020        —          —          —          —     
    2,483       7,451 (18)      —        $ 63.29        03/11/2021        —          —          —          —     
    —          16,812 (19)      —        $ 44.18        03/09/2022        —          —          —          —     
    —          —          —          —          —          3,096 (9)    $ 131,394        —          —     
    —          —          —          —          —          5,351 (11)    $ 227,096        —          —     
    —          —          —          —          —          5,015 (10)    $ 212,837        —          —     
    —          —          —          —          —          —          —          5,886 (14)    $ 249,802   
    —          —          —          —          —          —          —          12,275 (15)    $ 520,951   

 

52


Name & Principal Position

  Option Awards     Stock Awards  
  Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
    Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
    Equity
Incentive
Plan

Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
    Option
Exercise
Price
($)
    Option
Expiration
Date
    Number
of
Shares
or Units
of  Stock
that
Have
Not
Vested
(#)(1)
    Market
Value
of Shares
or Units
of
Stock
that
Have Not
Vested
($)(2)
    Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units, or
Other
Rights
that Have
Not
Vested
(#)(3)
    Equity
Incentive
Plan
Awards:
Market
or Payout
Value of
Unearned
Shares,
Units, or
Other
Rights
that
Have
Not
Vested
($)(2)
 

Hans Leentjes

    1,350        —          —        $ 44.37        02/16/2015        —          —          —          —     

EVP and President,

    5,000        —          —        $ 52.78        02/14/2016        —          —          —          —     

Northern Europe

    6,000        —          —        $ 76.30        02/14/2017        —          —          —          —     
    6,000        —          —        $ 56.64        02/20/2018        —          —          —          —     
    6,750        2,250 (4)      —        $ 30.96        02/17/2019        —          —          —          —     
    3,500        3,500 (5)      —        $ 53.01        02/18/2020        —          —          —          —     
    1,987        5,961 (6)      —        $ 67.12        02/16/2021        —          —          —          —     
    —          15,283 (7)      —        $ 44.81        02/15/2022        —          —          —          —     
    —          —          —          —          —          2,477 (9)    $ 105,124        —          —     
    —          —          —          —          —          4,559 (10)    $ 193,484        —          —     
    —          —          —          —          —          —          —          4,709 (14)    $ 199,850   
    —          —          —          —          —          —          —          11,159 (15)    $ 473,588   

Jonas Prising

    20,000        —          —        $ 52.78        02/14/2016        —          —          —          —     

President,

    24,000        —          —        $ 76.30        02/14/2017        —          —          —          —     

ManpowerGroup

    30,000        —          —        $ 56.64        02/20/2018        —          —          —          —     
    17,500        8,750 (4)      —        $ 30.96        02/17/2019        —          —          —          —     
    11,000        11,000 (5)      —        $ 53.01        02/18/2020        —          —          —          —     
    2,483        7,451 (6)      —        $ 67.12        02/16/2021        —          —          —          —&nb