UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant x Filed by a Party other than the Registrant ¨
Check the appropriate box:
| ¨ | Preliminary Proxy Statement. | |
| ¨ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)). | |
| ¨ | Definitive Proxy Statement. | |
| x | Definitive Additional Materials. | |
| ¨ | Soliciting Material Pursuant to §240.14a-12. | |
Evercore Partners 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. | |||
| (1) | Title of each class of securities to which transaction applies:
| |||
| (2) | Aggregate number of securities to which transaction applies:
| |||
| (3) | Per unit price or other underlying value of 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):
| |||
| (4) | Proposed maximum aggregate value of transaction:
| |||
| (5) | Total fee paid:
| |||
| ¨ | Fee paid previously with preliminary materials. | |||
| ¨ | Check box if any part of the fee is offset as provided by Exchange Act Rule 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. | |||
| (1) | Amount Previously Paid:
| |||
| (2) | Form, Schedule or Registration Statement No.:
| |||
| (3) | Filing Party:
| |||
| (4) | Date Filed:
| |||
Beginning on May 14, 2013, Evercore Partners Inc. sent the following communication and presentation to certain stockholders of the Company:
Dear Stockholder:
By now you should have received a copy of our proxy statement, annual report to stockholders and your proxy or voting instruction card. I urge you to read the materials, and in particular, I want to highlight Proposal No. 2, our Board’s proposed amendment to our equity incentive plan to increase the number shares available under the plan by 5 million shares. In conjunction with this proposal, we have agreed to use our recently expanded stock repurchase program to ensure that our outstanding shares do not increase due to our annual bonus equity awards over the next three years. We also have committed to maintain our average three year burn rate at or below 2.5%, all of which will be used to attract new professionals to the firm, subject to our ability to reserve the necessary flexibility to address unusual circumstances that may arise. Please review the accompanying presentation which has important data in support of Proposal No. 2.
Our goal at Evercore is to create the premier global independent investment banking advisory firm delivering superior returns to our stockholders. We have made significant progress toward this goal, but in order to continue delivering superior returns we need to continue to attract, retain and motivate the best talent in the business. Sustaining the compensation strategies that have served us well is fundamental to our continued success in attracting and retaining such talent and to our overall continued progress.
Below is a summary of the reasoning behind our Board’s decision to recommend that you approve Proposal No. 2:
| • | The ability to issue equity is fundamental to our compensation strategy. For the last five years, over 95% of our annual bonus equity awards were granted to employees who had direct revenue generating responsibilities, enhancing retention and aligning their interests with our stockholders. Equity awards are also a key element of recruiting new Senior Managing Directors – a fundamental driver of our growth. Annual bonus equity awards are delivered as a component of an employee’s annual incentive compensation amount and always are based on services already performed and revenue already generated. |
| • | Recruitment and retention of employees has driven our success and is necessary for our continued success. Equity compensation is critical in aligning the interests of our employees with those of our stockholders. By making equity a meaningful portion of our employees’ compensation with vesting and transfer restrictions, we are compensating our employees for their individual performance, and our employees are therefore motivated to conduct the business in a manner that produces superior returns for our stockholders over the long-term. We believe this, in part, has resulted in the long-term value we have created for our stockholders, as evidenced by our total shareholder return over the last five years, which has significantly outperformed our peers and the market. |
May 14, 2013
Page 2
| • | We are focused on mitigating the dilutive effect of annual bonus equity awards and are disciplined in granting equity awards. Annual bonus equity awards are made as part of an appropriate compensation package for each of our employees. They are not in any way incremental to our annual compensation awards. Moreover, in the past three years, we have offset more than 100% of the dilutive effect of our annual bonus equity awards through stock repurchases. Our three year average net dilution for 2012, 2011 and 2010, which takes into account shares issued to attract new employees, annual bonus awards and stock repurchases, is less than 1%. Furthermore, in 2012, we adopted an expanded stock buyback program allowing for the repurchase of up to 5 million shares. This expanded program will position us to continue to execute our goal of offsetting 100% of the dilutive effect of annual bonus equity grants. We are committed to sustaining these buybacks. |
| • | A reduction in our use of equity-based compensation would require a corresponding increase in our use of alternative deferred compensation programs. If the amendment is not approved, we would be compelled to alter our compensation program to implement alternative deferred compensation programs. These programs do not provide the same benefits as equity, such as alignment with stockholder interests, and would likely involve increased administrative costs. |
Our Board recommends that you vote “FOR” Proposal No. 2. Please take a few minutes to vote your shares today. Your vote is very important.
We value your input on this topic. If you have any questions, please contact our CFO, Bob Walsh or our General Counsel, Adam Frankel. Thank you for your consideration on this important matter.
| /s/ Ralph Schlosstein |
| Ralph Schlosstein |
| President and Chief Executive Officer |
 Equity Compensation
May 2013 |
 1
44
48
54
67
67
40
45
50
55
60
65
70
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
FY2008
FY2009
FY2010
FY2011
FY2012
Revenue (000's)
Number of SMD's
(end of year)
Our Growth in Senior Talent Drives the Company’s Growth
Our full year net revenues from 2008-2012 grew from $195 million to $642
million. During this same period, our population of SMDs grew from 44
to 67. Growth of Net Revenue and Senior Managing Directors
|
 We
use
equity
awards
to
foster
an
ownership
culture
by
providing
a
direct
economic
link
between
employees and
stockholders.
We believe that RSUs are a better form of compensation because:
–
They encourage our employees to think like stockholders, and
–
In
contrast
to
options,
for
which
the
recipient
is
unaffected
by
stock-price
drops
below
the
strike
price, RSU
recipients, like shareholders, are exposed to both the downside and the upside
of share performance. RSUs are delivered as a component of the agreed upon
annual bonus compensation, and not in addition to that
compensation.
In
other
words,
the
amount
of
compensation
always
is
determined
first,
with
the
mix
of
cash
and
RSUs determined subsequently. They are also a critical element in recruiting new
SMDs. We offset 100% of the dilutive effect of bonus equity awards through
share repurchases, and opportunistically offset new hire equity awards
through share repurchases. Our
proposed
5
million
share
increase
will
enable
us
to
continue
this
element
of
our
strategy
for
2-3
years.
2
Equity awards are a fundamental element of the growth strategy of the firm, both
for recruiting new employees and incenting and retaining our existing team.
Equity Compensation is a Fundamental Element of our Strategy
|
 3
(1)
The
Stock
Performance
graph
and
related
table
compares
the
performance
of
an
investment
in
our
Class
A
common
stock
from
December
31,
2007
through
March
28,
2013,
with
Greenhill
&
Co.,
Lazard
and
the
S&P
500
Index.
The
graph
assumes
$100
was
invested
at
the
opening
of
business
on
December
31,
2007
in
each
of
our
Class
A
common
stock,
Greenhill
&
Co.'s
common
stock,
Lazard's
common
stock
and
the
S&P
500
Index.
It
also
assumes
that
dividends
were
reinvested
on
the
date
of
payment
without
payment
of
any
commissions.
The
performance
shown
in
the
graph
represents
past
performance
and
should
not
be
considered
an
indication
of
future
performance.
(includes reinvestment of dividends)
Equity Compensation Aligns Employee and Stockholder Interests
We believe our equity compensation practices have contributed to the value we have
created for our stockholders, as evidenced by our total shareholder returns
over the last five years, which have significantly outperformed our peers and
the market.
$250
200
150
50
100
Dec 31,
Dec 31,
Dec 31,
Dec 31,
Dec 30,
Dec 31,
Mar 28,
Company / Index
2007
2008
2009
2010
2011
2012
2013
Evercore Partners Inc.
$100
$60
$150
$171
$137
$161
$223
S&P 500 Index
$100
62
76
86
86
97
107
Greenhill & Co.
$100
108
127
132
62
92
95
Lazard
$100
74
96
101
68
81
93 |
 Unless Proposal No. 2 is approved, we won’t have sufficient shares under
the plan to support annual bonuses and grants to new hires required to
continue attracting and incentivizing our employees to achieve our objectives.
We
have
consistently
recognized
the
potentially
dilutive
aspects
of
equity
grants
and,
as
our
grant
and
stock
buyback
history
indicates, have worked assiduously to mitigate such dilution. (See Annex A).
In connection with our request to increase the number of shares under the
plan, we have agreed (subject to unusual circumstances
that
may
arise)
to
use
our
recently
expanded
stock
repurchase
program
to:
–
offset 100% of the dilutive effect of our annual bonus equity awards over the
next three years, and –
maintain our average three year burn rate at or below 2.5%.
4
Evercore is requesting that stockholders vote to approve Proposal No. 2, which
authorizes an additional 5 million shares under the Plan, and which we
believe is necessary for Evercore to continue delivering value to you.
Proposal No. 2 - Amendment to the Plan and Our Commitment to Offset Dilutive
Effects |
 5
The ability to issue equity is fundamental to our compensation strategy.
equity awards were granted to employees who had direct revenue
generating and client-facing responsibilities, enhancing retention and aligning
their interests with our stockholders. Equity awards are also a key
element of recruiting new Senior Managing Directors – a fundamental driver
of our growth. Annual bonus RSUs are delivered as a component of an
employee’s annual incentive compensation amount (and is based on
services already performed and, for award recipients who have client facing
responsibilities, revenue already generated rather than for future
potential performance), and is not in addition to annual incentive compensation.
Equity-based compensation is tied directly to an individual’s
contribution to the business, and not to seniority or role.
Recruitment and retention of employees has driven our success and is necessary for
our continued success.
Equity compensation is critical in aligning the interests of our employees with
those of our stockholders. By making equity a significant portion of
our employees’ compensation with vesting and transfer restrictions, we are linking our employees’ compensation to the
performance of Evercore, and our employees are therefore motivated to conduct
the business in a manner that produces superior returns for our
stockholders over the long-term. We believe this, in part, has resulted in the long-term value we have created for our
stockholders, as evidenced by our total shareholder return over the last five
years, which has significantly outperformed our peers and the market.
We are focused on mitigating the dilutive effect of annual bonus equity
awards and are disciplined in granting equity awards.In the past three years, we have offset all of the dilutive effect of our annual bonus equity awards through stock
repurchases. Our three year average net dilution for 2012, 2011 and 2010,
which takes into account annual share bonus awards for existing
employees, share awards for new employees and stock repurchases, is less than
1%. Furthermore, in 2012, we adopted an expanded stock buyback
program allowing for the repurchase of up to 5 million shares. This expanded program will position us to execute our goal of
offsetting the dilutive effect of annual bonus equity grants, and to keeping
total dilution from the plan to under 2.5%. A reduction in our use of
equity-based compensation would require a corresponding increase in our use of
alternative deferred compensation
program
compensation program to
implement alternative deferred compensation programs. These programs do not provide the same benefits as
equity, such as alignment with stockholder interests, and would likely involve
increased administrative costs. equity awards.
alternative deferred compensation programs.
The ability to issue equity is fundamental to our compensation strategy.
We are focused on mitigating the dilutive effect of annual bonus equity awards and
are disciplined in granting
A
reduction in our use of equity-based compensation would require a
corresponding increase in our use of
For the last five years, over 95% of our annual bonus Reasons why Our Board
Recommends that You Vote to Approve Proposal No. 2 If the amendment is
not approved, we would be compelled to alter our |
 2010
2011
2012
Three Year
Average
Equity Grants:
Bonus Equity
1,088
1,464
2,420
1,657
New Hire Equity
386
745
743
625
Forfeitures
(307)
(121)
(366)
(265)
Net Equity Grants
1,167
2,088
2,797
2,017
Shares Repurchased
1,357
1,587
2,616
1,853
Net Issuance – Equity Grants Without New Hires
(586)
(244)
(562)
(461)
Net Issuance – Equity Grants With New Hires
(190)
501
181
164
Percentage of Net Equity Grants Repurchased Without New Hires
174%
118%
127%
133%
Percentage of Net Equity Grants Repurchased With New Hires
116%
76%
94%
92%
Weighted Common Shares Outstanding and Vested Evercore LP
Partnership Units
(1)
29,436
33,837
36,514
33,262
Burn Rate (Taking into Account Vested Evercore LP Partnership
Units and Forfeitures)
4.0%
6.2%
7.7%
5.9%
Burn Rate (Taking into Account Vested Evercore LP Partnership
Units, Share Repurchases and Forfeitures)
(0.6%)
1.5%
0.5%
0.5%
(shares in thousands)
6
(1)
Includes
vested
Evercore
LP
partnership
units
outstanding
for
each
period
totaling
9,781,
7,818,
7,239
thousand
for
fiscal
years
2010,
2011
and
2012,
respectively
Annex A – Equity Grant and Stock Buyback History Overview
The dilution from equity grants (taking into account vested Evercore LP partnership
units, share repurchases and forfeited shares) has averaged less than 1%
over the past three years, and, excluding share repurchases, 5.9%.
|