DEF: Cognizant's 2025 Proxy Statement: Board Seeks Shareholder Approval for Executive Pay, Director Elections

• Cognizant's 2025 proxy statement details proposals for the annual shareholder meeting on June 3, 2025.
• Shareholders will vote on the election of 13 directors, an advisory vote on executive compensation, and the ratification of PricewaterhouseCoopers LLP as the independent auditor.
• The Board recommends voting for all director nominees, the executive compensation proposal, and the auditor ratification.
• The company's revenue for 2024 was $19.7 billion, representing a 2.0% year-over-year growth (1.9% in constant currency).
• Cognizant signed 29 deals with a total contract value above $100 million in 2024, compared to 17 in the prior year.
• The Board met with shareholders representing approximately 46% of the company's shares to discuss topics including gen AI, large deal governance, and the Belcan acquisition.
• The company aims to skill one million people by the end of 2026 through the Synapse Initiative, having reached over 400,000 individuals already.
• In 2024, Cognizant provided more than $15 million in grants and gifts to organizations around the world to improve economic mobility and community resilience.
• The company's net zero emissions reduction goal aims to reduce absolute emissions by 50 percent by 2030 and 90 percent by 2040.
• The CEO's 2024 target direct compensation was 61% performance-based, while other NEOs had 50% of their target direct compensation performance-based.

Score: 6

Explanation: The document presents a mixed sentiment. While there are positive aspects like revenue growth and strategic acquisitions, there are also concerns about the macroeconomic environment and the low payout of performance stock units. The company is taking steps to address these challenges, but the overall outlook is cautiously optimistic.

• Cognizant achieved its highest quarterly year-over-year organic revenue growth rate since 2022.
• The company strengthened its portfolio with the acquisitions of Thirdera and Belcan.
• Large deal momentum accelerated with 29 deals above $100 million.
• Employee engagement scores remain well above global and IT industry benchmarks.
• The company is investing in talent and expanding learning programs with a focus on AI and upskilling.
• The Board places high value on transparent engagement with shareholders to build trust in the company.
• The company is focused on spurring innovations in education and workforce development to sustain communities where they live and work.
• The company received the 2025 World's Most Ethical Companies recognition from Ethisphere.

• The 2022-2024 PSUs paid out at a low 28.1% of target due to a challenging macroeconomic environment.
• The company incurred $363 million in costs relating to the NextGen program.
• Cognizant's stock price has been in a long-term slump, with the stock at $81 in 2018 and only $80 in late 2024.

• The uncertain economic environment across the technology professional services industry presents challenges in setting financial performance goals.
• Potential changes in immigration laws and regulations could impact global professional services organizations like Cognizant.
• Macro environment and geo-political risks, including immigration law changes and future mandatory sustainability disclosures.
• Legal and regulatory risks, including intellectual property.

Cognizant aims to accelerate growth, amplify talent, and scale innovation, focusing on gen AI, key industries, international expansion, cybersecurity, and digital experience.

• The Board is pleased with the traction the Company is gaining since Ravi Kumar S joined as CEO in early 2023 and its strategy to capture the significant opportunity ahead with the next wave of enterprise transformation led by generative AI (gen AI).

The document highlights Cognizant's efforts to capitalize on the growing adoption of AI technology and the convergence of information technology and operations technology, aligning with broader industry trends.

• The document benchmarks director compensation against a peer group of technology-related firms, including Accenture, Capgemini, and Infosys.
• The company's performance is compared to the S&P 500 Index and the S&P 500 Information Technology Index.
• The company's relative TSR is compared to a peer group of companies in the S&P 500 Information Technology Index plus Capgemini, Tata Consulting Services, Infosys, Wipro, HCL, CGI, EPAM Systems and Genpact.

• Shareholders will be impacted by the decisions made regarding director elections and executive compensation.
• Employees will be impacted by the company's talent management and development initiatives.
• Customers will benefit from the company's focus on innovation and service delivery.
• Communities will benefit from the company's philanthropic endeavors and associate volunteering efforts.

• Shareholders are encouraged to vote on the proposals outlined in the proxy statement.
• The company will hold its annual meeting on June 3, 2025.
• The Board will continue to monitor and respond to shareholder feedback.
• The company will continue to pursue its strategic objectives of accelerating growth, amplifying talent, and scaling innovation.

• 2018: Cognizant hosted its first in-person Investor Day since 2018.
• 2020: Vinita Bali and Archana Deskus joined the Board of Directors.
• 2020: Francisco DSouza and John E. Klein departed from the Board of Directors.
• 2021: John N. Fox, Jr. departed from the Board of Directors.
• 2022: Stephen J. Rohleder joined the Board of Directors.
• 2023: Ravi Kumar S, Eric Branderiz, and Bram Schot joined the Board of Directors.
• 2023: Brian Humphries and Maureen Breakiron-Evans departed from the Board of Directors.
• 2024-01-17: Nella Domenici resigned from the Board of Directors.
• 2024: Karima Silvent joined the Board of Directors.
• 2025-03: Cognizant hosted its first in-person Investor Day since 2018.
• 2025-04-07: Record date for the 2025 annual meeting.
• 2025-04-18: Proxy materials made available to shareholders.
• 2025-06-03: Date of the 2025 annual meeting of shareholders.
• 2025-12-19: Deadline for submitting shareholder proposals under Rule 14a-8 for the 2026 annual meeting.
• 2025-11-19: Earliest date for submitting director nominees under by-law provisions for the 2026 annual meeting.
• 2025-12-19: Latest date for submitting director nominees under by-law provisions for the 2026 annual meeting.
• 2026-02-03: Earliest date for submitting shareholder proposals or director nominations under by-law provisions for the 2026 annual meeting.
• 2026-03-05: Latest date for submitting shareholder proposals or director nominations under by-law provisions for the 2026 annual meeting.
• 2026-04-06: Deadline for providing information required by SEC Rule 14a-19.