DEFA14A: Sabre Corp Urges Stockholders to Approve 2025 Omnibus Incentive Plan Despite ISS Recommendation Against

Sabre Corporation is urging stockholders to approve the 2025 Omnibus Incentive Compensation Plan, highlighting its importance for attracting and retaining talent, despite a recommendation against it from Institutional Shareholder Services (ISS) due to concerns over peer group comparisons and burn rate.

Summary

• Sabre Corporation is seeking stockholder approval for its 2025 Omnibus Incentive Compensation Plan at the upcoming 2025 Annual Meeting of Stockholders.
• The plan aims to replace the 2024 Omnibus Plan and increase the number of shares authorized for issuance under equity-based compensation plans.
• The company emphasizes that the plan is critical for incentivizing and rewarding team members and service providers, aligning their interests with Sabre's long-term growth and financial success.
• While Glass Lewis & Co. supports the proposal, ISS has recommended against it, citing concerns about peer group comparisons and equity compensation needs.
• Sabre argues that ISS's analysis is flawed because it uses a peer group of companies with fundamentally different business models, particularly those in the Consumer Services sector.
• Sabre contends that its burn rate is consistent with other technology companies, its primary competitors for talent, and that the ISS report fails to consider the significant role the 2025 Omnibus Plan would play in its overall compensation program.
• Failure to approve the plan could limit Sabre's ability to issue equity-based awards, potentially hindering its ability to recruit, retain, and motivate team members.
• The Board of Directors unanimously recommends that stockholders vote FOR the 2025 Omnibus Incentive Compensation Plan.
• Stockholders are also asked to vote on the election of directors, ratification of the appointment of Ernst & Young LLP as independent auditors, and an advisory vote on executive compensation.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive. While the company is facing a challenge with the ISS recommendation, they are actively addressing concerns and emphasizing the importance of the plan for their future success. The unanimous board recommendation also adds a positive element.

Positives

• The 2025 Omnibus Plan is designed to align the interests of team members and service providers with the long-term growth, profitability, and financial success of Sabre.
• Glass Lewis & Co., a proxy advisory firm, issued a voting recommendation supporting Proposal 3.
• ISS supports Sabre's say-on-pay proposal, noting the pay and performance alignment of the executive compensation program.
• Sabre's calculated 2025 burn rate is 5.11%, lower than the ISS 2025 value-adjusted burn rate benchmark of 6.40% for Software & Services companies in the Russell 3000 (excluding the S&P 500).

Negatives

• ISS has recommended stockholders vote against Proposal 3, applying quantitative tests that Sabre believes have significant shortcomings when applied to its industry, business model, and equity compensation needs.
• The ISS reports analysis uses a peer group containing members with fundamentally different business models from Sabre's technology focus.
• Failure to approve the 2025 Omnibus Plan would severely limit Sabre's ability to issue equity-based awards to current and future team members.
• If Proposal 3 is not approved, it could also require Sabre to take one or more actions that could be detrimental to its ability to continue creating value for stockholders.

Risks

• Failure to secure approval for the 2025 Omnibus Plan could hinder Sabre's ability to attract, retain, and motivate employees.
• The company may need to reduce the amount or proportion of compensation paid to team members in equity-based awards, decreasing their long-term alignment with investors.
• Limiting the scope of the employee base that receives equity compensation could negatively impact employee morale and productivity.
• The ISS recommendation against the plan could influence stockholder voting decisions.

Future Outlook

Approval of Proposal 3 and the related increase in additional shares for use in attracting and retaining talent will be critical to maintaining a key aspect of Sabre's compensation program.

Management Comments

• Our Board of Directors continues to unanimously recommend you cast your vote FOR all proposals.
• We believe our compensation program is consistent with those of other technology companiesour primary competitors in the marketplace for talentappropriately incentivizes and rewards our team members, and has been effective in aligning their long-term interests with those of our stockholders.

Industry Context

The document highlights the competitive landscape for talent in the technology industry and Sabre's need to offer competitive equity compensation packages to attract and retain employees. It also points out the differences in business models and compensation practices between technology companies and those in the Consumer Services sector.

Comparison to Industry Standards

• The document compares Sabre's equity compensation practices to those of other technology companies, arguing that its burn rate is consistent with industry standards.
• It criticizes ISS for comparing Sabre to companies in the Consumer Services sector, which have fundamentally different business models and compensation practices.
• The document notes that ISS analysis indicates the percentage of Sabre's 3-year average grants awarded to its CEO is less than half of the 3-year average grants to CEOs for the Consumer Services sector, highlighting the fact that Sabre's equity grants are distributed more broadly throughout its organization compared to consumer services companies.

Stakeholder Impact

• Approval of the 2025 Omnibus Plan is expected to positively impact employees by providing them with incentives and rewards aligned with the company's long-term success.
• Failure to approve the plan could negatively impact employees by limiting the company's ability to offer competitive equity compensation packages.
• The outcome of the vote could impact stockholders by affecting the company's ability to attract and retain talent, which could influence its long-term performance.

Next Steps

• Stockholders are encouraged to read the proxy statement and additional materials and submit their proxy or voting instructions as soon as possible.
• Stockholders of record at the close of business on February 24, 2025, or their proxy holders may vote at the 2025 Annual Meeting.

Key Dates

Keywords

Omnibus Plan, Equity Compensation, Proxy Statement, Stockholders, ISS, Burn Rate, Compensation, Sabre