DEF: Unisys Seeks Shareholder Approval for Key Governance, Equity Plan Changes

Unisys Corporation will hold its 2026 Annual Meeting of Stockholders to vote on director elections, executive compensation, auditor ratification, an equity plan amendment, and the elimination of supermajority voting provisions.

Summary

• The 2026 Annual Meeting of Stockholders will be held virtually on April 30, 2026, at 8:00 AM Eastern Time.
• Proposals include the election of ten directors, a non-binding advisory vote on executive compensation, ratification of Grant Thornton LLP as the independent auditor for 2026, approval of an amendment to the 2024 Long-Term Incentive and Equity Compensation Plan, and approval of an amendment to the Certificate of Incorporation to eliminate supermajority voting provisions.
• Revenue for 2025 was $1.95 billion, a decrease of 2.9% year-over-year on a reported basis and 3.3% in constant currency.
• Operating profit margin was 4.0%, representing an 80 basis point contraction year-over-year.
• Non-GAAP operating profit margin improved 30 basis points year-over-year to 9.1%.
• Net loss as a percentage of revenue was negative 17.4%, and adjusted EBITDA as a percentage of revenue was 14.3%.
• Full-year operating cash flow was negative $140.0 million in 2025, compared to positive $135.1 million in 2024.
• Free cash flow was negative $217.6 million in 2025, compared to $55.3 million in 2024.
• Pre-pension and postretirement free cash flow improved 55% to $127.7 million.
• The global GAAP pension deficit decreased by approximately $300 million to approximately $450 million.
• The company had approximately $413.9 million in cash and cash equivalents as of December 31, 2025.
• The proposed amendment to the 2024 Long-Term Incentive and Equity Compensation Plan seeks to increase the number of shares issuable by 3,900,000, bringing the total maximum to 17,000,000 shares.
• The 2025 burn rate for the equity plan was 5.37%, with a 3-year average of 5.03%.
• Potential dilution from the amended equity plan is estimated at 18.1%.
• Executive compensation for 2025 included a redesigned mix of performance measures for Long-Term Incentives (LTI), emphasizing a three-year performance period and cliff vesting.
• At the 2025 Annual Meeting, over 83% of votes cast supported the executive compensation program.

Sentiment

Score: 4

Explanation: StockSavvy.ai views this filing with cautious optimism. While the company exceeded revised profitability guidance and improved pre-pension free cash flow, significant declines in revenue, operating cash flow, and free cash flow, coupled with poor relative TSR performance, indicate ongoing operational challenges. Strategic initiatives and governance improvements are positive, but the financial headwinds are substantial.

Positives

• Exceeded upwardly revised profitability guidance in 2025.
• Finished 2025 with a solid cash balance of $413.9 million and strong liquidity.
• Pre-pension and postretirement free cash flow improved 55% to $127.7 million.
• Global GAAP pension deficit decreased by approximately $300 million to $450 million, aided by a $320 million annuity purchase.
• Non-GAAP operating profit margin improved 30 basis points year-over-year to 9.1%.
• Demonstrated commitment to strong corporate governance, including the re-proposal to eliminate supermajority voting provisions.
• Executive compensation program received over 83% stockholder support in 2025, indicating alignment with investor expectations.

Negatives

• Revenue for 2025 decreased 2.9% year-over-year on a reported basis to $1.95 billion.
• Operating profit margin contracted 80 basis points year-over-year to 4.0%.
• Full-year operating cash flow was negative $140.0 million in 2025, a significant decline from positive $135.1 million in 2024.
• Free cash flow was negative $217.6 million in 2025, a significant decline from $55.3 million in 2024.
• Net loss as a percentage of revenue was negative 17.4%.
• Relative Total Shareholder Return (rTSR) awards for performance periods ending in 2025 performed below threshold (0% vesting), indicating underperformance against the Russell 2000 Index.

Risks

• Ongoing geopolitical and macroeconomic uncertainty could impact business operations and financial performance.
• Operating in a highly competitive information technology services marketplace poses challenges to growth and profitability.
• Exposure to cybersecurity, privacy, and disaster recovery risks requires robust management and oversight.
• The company faces various enterprise risks, including strategic, commercial, physical security, property, workplace safety, legal, regulatory, and reputational risks.
• Failure to attract, retain, and develop talent due to an insufficient number of shares for equity awards could hinder strategic execution.
• Potential dilution to current stockholders from the future issuance of shares under the amended 2024 Equity Plan, estimated at 18.1%.

Future Outlook

Unisys believes it is effectively implementing its strategy and is well positioned to grow its pipeline, convert key opportunities, control costs, and accelerate momentum throughout 2026. The company is also advancing artificial intelligence (AI) adoption for clients and embracing AI tools and workflows in its internal business processes to enhance operational agility.

Management Comments

• We believe we are effectively implementing our strategy and are well positioned to grow our pipeline, convert key opportunities, control costs, and accelerate momentum throughout 2026.
• We are advancing artificial intelligence (AI) adoption for clients across various industries, and embracing AI tools and workflows in our internal business processes to enhance operational agility.
• We constantly innovate and seek to establish and build trust with investors, clients and industry stakeholders.

Industry Context

StockSavvy.ai notes that Unisys operates in a highly competitive global information technology solutions market, serving clients in complex, regulated, and heterogeneous environments. The company's focus on advancing AI adoption for clients and integrating AI into internal processes aligns with broader industry trends emphasizing digital transformation and efficiency gains through emerging technologies. The reported revenue decline and negative cash flow, however, suggest Unisys faces significant challenges in this competitive landscape, despite strategic efforts.

Comparison to Industry Standards

• The company's Relative Total Shareholder Return (rTSR) for the 2023-2025 performance period was -39.27%, ranking at the 24th percentile of the Russell 2000 Index, indicating significant underperformance compared to a broad market index.
• For the 2024-2025 performance period, rTSR was -48.20%, ranking at the 15th percentile of the Russell 2000 Index, also indicating substantial underperformance.
• The executive compensation peer group includes companies such as Box Inc., CACI International Inc., Conduent International, EPAM Systems, Inc., GitLab, Inc., ICF International Inc., KBR, Inc., Maximus, Inc., NCR Voyix Corporation, Pegasystems, Inc., Perficient, Inc., Rackspace Technology, Inc., Teradata Corporation, Thoughtworks Holding, Inc., TTEC Holding, Inc., and Verint Systems, Inc. However, specific financial performance comparisons against these companies are not provided in the filing.

Management Changes

Corporate Governance

Legal Proceedings

• Non-GAAP adjustments for 2024 included a gain of $40.0 million related to a favorable settlement of a litigation matter and a net gain of $14.9 million related to a favorable judgment received in a Brazilian services tax matter, indicating past legal resolutions.

Related Party Transactions

• We do not have any such transactions to report.

Stakeholder Impact

• **Shareholders**: Direct impact on voting rights through the proposed elimination of supermajority voting, potential dilution from the increased share reserve in the equity plan, and influence on executive compensation. Overall company performance and strategic direction also directly affect shareholder value.
• **Employees**: Executive compensation structure, talent attraction and retention through equity awards, and human capital management strategies are key areas of impact.
• **Customers**: The company's focus on providing global IT solutions, advancing AI adoption, and enhancing customer experience directly impacts customer satisfaction and service delivery.
• **Management**: Changes in leadership roles (CEO, COO), the structure of compensation, and board oversight directly affect management's responsibilities and incentives.
• **Regulatory Authorities**: Compliance with SEC filing requirements and corporate governance standards is maintained, with proposals like the supermajority voting elimination reflecting responsiveness to governance best practices.

Next Steps

• Hold the 2026 Annual Meeting of Stockholders on April 30, 2026, to vote on the proposed agenda items.
• Elect ten director nominees for terms expiring at the 2027 annual meeting.
• Stockholders will vote on a non-binding advisory resolution approving executive compensation.
• Stockholders will ratify Grant Thornton LLP as the independent registered public accounting firm for 2026.
• Stockholders will vote on approving an amendment to the Unisys Corporation 2024 Long-Term Incentive and Equity Compensation Plan to increase the share reserve.
• Stockholders will vote on approving an amendment to the Amended and Restated Certificate of Incorporation to eliminate supermajority voting provisions.
• The Board will elect a new Chair and determine whether to maintain a Lead Independent Director after Mr. Altabef's retirement.
• The company will continue ongoing engagement with stockholders and integrate feedback into its practices and disclosures.
• If approved, the company will promptly file an Amended and Restated Certificate of Incorporation reflecting the elimination of supermajority voting provisions.
• If the equity plan amendment is approved, the company intends to register the additional shares on a Form S-8 Registration Statement with the SEC.

Key Dates

Recommendation

The filing presents a mixed financial picture for Unisys, with a notable decline in revenue and negative operating and free cash flow in 2025, alongside poor relative TSR performance. While the company exceeded revised profitability guidance and made progress on pension liabilities, these positives are overshadowed by core operational challenges. Strategic initiatives like AI adoption and strong corporate governance efforts, including the proposed elimination of supermajority voting, are positive long-term signals. However, the immediate financial performance and significant dilution from the proposed equity plan amendment warrant a cautious 'hold' recommendation. Investors should monitor the execution of strategic plans and future financial results for signs of sustainable improvement.

Keywords

Unisys, Proxy Statement, Corporate Governance, Executive Compensation, Equity Compensation Plan, Supermajority Voting, Financial Performance, Revenue, Cash Flow, Pension Liabilities, Cybersecurity, Risk Management, Director Election, SEC Filing, DEF 14A