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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant  þ                            
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))
þ
 
Definitive Proxy Statement
¨
 
Definitive Additional Materials
¨
 
Soliciting Material under §240. 14a-12
WEX 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):
þ
 
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:
 
 
 
 
 
 

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WEX INC.
April 22, 2019

Dear Fellow Stockholders,

You are invited to attend the 2019 annual meeting of stockholders of WEX Inc., or the Company. The meeting will be held on Thursday, May 9, 2019, at 8:00 a.m., Eastern Time, at the WEX Inc. Corporate Headquarters located at 1 Hancock Street, Portland, Maine, 04101.

At the meeting we will:
elect four directors for three-year terms,
conduct an advisory (non-binding) vote on the compensation of our named executive officers,
vote to approve the WEX Inc. 2019 Equity and Incentive Plan,
vote to ratify the selection of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2019, and
consider any other business properly coming before the meeting.
Whether or not you attend the annual meeting, it is important that your shares be represented and voted at the meeting. As a stockholder of record, you can vote your shares by signing and dating the enclosed proxy card and returning it by mail in the enclosed envelope. If you decide to attend the annual meeting and vote in person, you may then revoke your proxy. If you hold your stock in "street name," that is, held for your account by a bank, broker or other nominee, you should follow the instructions provided by your bank, broker or other nominee.
On behalf of the Board of Directors and the employees of WEX Inc., we would like to express our appreciation for your continued interest in the Company.
 
Sincerely,
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Melissa Smith
PRESIDENT AND CHIEF EXECUTIVE OFFICER

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WEX INC.
NOTICE OF 2019 ANNUAL MEETING OF STOCKHOLDERS
April 22, 2019
The 2019 annual meeting of stockholders of WEX Inc. will be held on Thursday, May 9, 2019, at 8:00 a.m., Eastern Time, at the WEX Inc. Corporate Headquarters located at 1 Hancock Street, Portland, Maine, 04101. At the meeting we will:

elect four directors for three-year terms,
conduct an advisory (non-binding) vote on the compensation of our named executive officers,
vote to approve the WEX Inc. 2019 Equity and Incentive Plan,
vote to ratify the selection of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2019, and
consider any other business properly coming before the meeting.

Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to be Held on May 9, 2019:

The proxy statement and annual report to stockholders are available on our investor relations webpage at: https://ir.wexinc.com/financials/proxy-statement


Stockholders who owned shares of our common stock at the close of business on March 22, 2019 are entitled to attend and vote at the meeting and any adjournment or postponement of the meeting. Stockholders that owned stock in “street name” as of such date must present proof of beneficial ownership to attend the meeting and must obtain a legal proxy from their bank, broker or other nominee to vote at the meeting. A complete list of registered stockholders will be available at least 10 days prior to the meeting at our offices located at 1 Hancock Street, Portland, Maine, 04101.
 
By Order of the Board of Directors,
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Hilary A. Rapkin
CHIEF LEGAL OFFICER
 
 


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This proxy statement describes the proposals on which you may vote as a stockholder of WEX Inc. It contains important information to consider when voting.
The Company’s Board of Directors, or the Board, is sending these proxy materials to you in connection with the Board’s solicitation of proxies. Our annual report to stockholders and our proxy materials were first mailed on or about April 22, 2019.
Your vote is important. Please complete, execute and promptly mail your proxy card as soon as possible even if you plan to attend the annual meeting.

VOTING YOUR SHARES
Stockholders who owned the Company’s common stock at the close of business on March 22, 2019, the record date, may attend and vote at the annual meeting of stockholders, or the Annual Meeting. Each share is entitled to one vote. There were 43,245,348 shares of common stock outstanding on the record date.
How do I vote?
You may vote by mail if you hold your shares in your own name. You do this by completing, signing and dating your proxy card and mailing it in the enclosed prepaid and addressed envelope.
You may vote in person at the meeting.
We will pass out ballots to any record holder who wants to vote at the meeting. However, if you hold your shares in “street name,” you must request a proxy from your bank, broker or other nominee in order to vote at the meeting. Holding shares in street name means you hold them through a bank, broker or other nominee, and as a result, the shares are not held in your individual name but through someone else.
If you hold your shares in “street name,” you should follow the instructions provided by your bank, broker or other nominee, which may include instructions regarding your ability to vote by telephone or through the Internet.
How do I vote my shares held in the WEX Inc. Employee Savings Plan?
If you participate in our WEX Inc. Employee Savings Plan, commonly referred to as the “401(k) Plan,” shares of our common stock equivalent to the value of the common stock interest credited to your account under the plan will be voted by the trustee in accordance with your instructions, if they are received before 8:00 AM Eastern Time on May 7, 2019. Otherwise, if you do not provide instruction by such date, the share equivalents credited to your account will not be voted by the trustee. Please refer to the “Information about Voting Procedures” section.

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GOVERNANCE

The Corporate Governance Committee of the Board of Directors of WEX Inc. is responsible for identifying individuals qualified to become Board members, consistent with criteria approved by the Board and recommending to the Board the persons to be nominated for election as directors at the annual meeting of stockholders in accordance with the Corporate Governance Guidelines, the policies and principles in the Corporate Governance Committee charter and the applicable criteria adopted by the Board. In 2019, there are four Class II directors up for election at the Annual Meeting. Kirk Pond, Shikhar Ghosh, James Neary, and Melissa Smith currently serve as Class II directors. However, Kirk Pond will retire at the end of his term and is not standing for reelection at the Annual Meeting. Daniel Callahan is a nominee for election as a Class II director for his first term on the Board.
ITEM 1.
ELECTION OF DIRECTORS
At each annual meeting of stockholders, directors are elected for a term of three years to succeed those directors whose terms are expiring.
Our nominees for director this year are:
Shikhar Ghosh
James Neary
Melissa Smith
Daniel Callahan
Messrs. Ghosh and Neary and Ms. Smith are presently directors of the Company and Mr. Callahan is up for election as a new director. All have consented to serve a three-year term expiring at the 2022 annual meeting of stockholders.
We recommend a vote FOR these nominees.
    
    


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THE BOARD OF DIRECTORS
BOARD LEADERSHIP
Our Board is led by our Chairman, Mr. Dubyak. As Chairman he leads all meetings of the Board at which he is present, sets meeting schedules and agendas and manages information flow to the Board to ensure appropriate understanding and discussion regarding matters of interest or concern to the Board. The Chairman also has such additional powers and performs such additional duties consistent with organizing and leading the actions of the Board as may be prescribed by the Board.
In addition to our Chairman, the Board has appointed Dr. Moriarty as our Vice Chairman and Lead Director. Dr. Moriarty chairs meetings of the independent directors in executive session and chairs any meetings at which the Chairman is not present. In addition, he facilitates communications between other members of the Board and the Chairman as needed. The Lead Director is authorized to call meetings of the independent directors and is available to consult with any of the Company’s senior executives regarding any concerns an executive may have. Dr. Moriarty aids in the preparation of meeting agendas and is authorized to meet with stockholders as a representative of the independent directors. Our Board decided to separate the roles of the Chairman and Chief Executive Officer because it believes that leadership structure presently offers the following benefits:
Enhances our Board’s objective evaluation of our Chief Executive Officer
Frees the Chief Executive Officer to focus on the Company’s operations instead of Board administration
Provides a liaison on our Board with a depth of knowledge about the Company
Provides greater opportunities for communication between stockholders and our Board

While our Board presently believes that the above-described leadership structure is an appropriate approach to board governance, the Board continuously monitors its composition and the skills of its members in order to maintain a flexible approach to determining leadership roles.
THE BOARD’S ROLE IN RISK OVERSIGHT
Our Board oversees our risk management processes directly, and through a risk management program overseen by both: (i) the Company’s Chief Legal Officer, who reports directly to the Chief Executive Officer; and, (ii) our Vice President, Compliance and Enterprise Risk Management, who reports to the Company’s Chief Legal Officer. Risks are identified and prioritized by our management, and a report of those risks is presented to the full Board. In general, our Board oversees risk management activities relating to business strategy, operations and financial and legal risks; our Audit Committee oversees the process by which various enterprise risks are managed and reported to the Board, as well as activities related to financial controls and legal and corporate compliance; and, our Compensation Committee oversees risks related to our compensation programs. In connection with the oversight of cybersecurity risk, our Audit Committee receives regular reports from our Chief Information Security Officer, who presents a threat matrix and overall analysis of our cyber-health, as well as any recent threat activity. Oversight of particular risks may also be delegated to other committees of the Board, such as the Technology Committee and the Finance Committee, as appropriate, based upon the nature of any particular risk. Our appointment of both: (i) a Chairman and (ii) Vice Chairman and Lead Director allows for an efficient delegation of responsibilities for risk oversight amongst those two individuals as well as the use of an independent Vice Chairman and Lead Director to manage risks as needed.

In addition, the Audit Committee is undertaking the review and remediation of the control deficiencies described in the Annual Report on Form 10-K for the year-ended December 31, 2018, which were determined to represent material weaknesses in our internal control over financial reporting. As part of that process, the Audit Committee is engaged in overseeing a remediation plan that includes: evaluating the sufficiency, experience, and training of our internal personnel at our Brazilian subsidiary and hiring additional qualified personnel or using external resources; implementing control activities at our Brazilian subsidiary that address relevant financial statement risks, including account reconciliations, variance analysis and journal entry procedures; and implementing additional corporate monitoring activities over our individually insignificant subsidiaries.

SUCCESSION PLANNING
The Board, with support from its committees as needed, regularly reviews short and long-term succession plans for the Chief Executive Officer and for other senior management positions. In assessing possible CEO candidates, the independent Directors identify the skills, experience and attributes they believe are required to be an effective CEO in light of the

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Company’s global business strategies, opportunities and challenges. The Board also ensures that Directors have substantial opportunities over the course of the year to engage with possible succession candidates.
    

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NOMINEES FOR AND MEMBERS OF THE BOARD OF DIRECTORS

The Corporate Governance Committee seeks directors with the following types of experience:
financea06.jpgFinance, accounting, or reporting experience.
Directors with an understanding of finance and financial reporting processes are valued on our Board because of the importance we place on accurate financial reporting and robust financial controls and compliance. We also seek to have a number of directors who qualify as audit committee financial experts.
globalexpa02.jpgGlobal or international business experience.
Because our Company is a global organization, directors with broad international exposure provide useful business and cultural perspectives. We seek directors who have had relevant experience with multinational companies or in international markets.
legala02.jpgLegal or regulatory experience. 
Directors who have had legal or regulatory experience provide insights into addressing significant legal and public policy issues, particularly in areas related to our Company’s business and operations. Because our company’s business requires compliance with a variety of regulatory requirements across a number of countries, our Board values directors with relevant legal or regulatory experience.
leadershipa09.jpgLeadership experience.
We believe that directors who have held significant leadership positions over an extended period, especially CEO positions, provide the Company with unique insights. These people generally possess extraordinary leadership qualities, and the ability to identify and develop those qualities in others. They demonstrate a practical understanding of organizations, processes, strategy and risk management, and know how to drive change and growth.
maa13.jpgBusiness development and M&A experience. Directors with a background in business development and in M&A provide insight into developing and implementing strategies for growing our business. Useful experience in this area includes skills in analyzing the “fit” of a proposed acquisition with a Company’s strategy, the valuation of transactions, and assessing management’s plans for integration with existing operations.
technologya18.jpgTechnology experience.
As a technology company and leading innovator, we seek directors with backgrounds in technology because our success depends on developing, investing in and protecting new technologies and ideas. We also target directors who can help guide the Company in advancing our strategy into new payment industries.
marketinga12.jpgMarketing or public relations experience.
Directors who have had relevant experience in marketing, brand management, and public relations, especially on a global basis, provide important insights to our Board.
industrya17.jpgIndustry experience.
We seek directors with experience in the payments industry generally and fleet, travel and healthcare payments specifically.
 capture.jpgRisk Management.
Directors with experience overseeing the management of operational and financial risks, including those presented by new, strategic opportunities, provide valuable stewardship.

 













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Regina O.  Sommer
Age 61
Class I
Director Since 2005
Term Expires 2021
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Since March 2005, Ms. Sommer has been a financial and business consultant. From January 2002 until March 2005, Ms. Sommer served as Vice President and Chief Financial Officer of Netegrity, Inc., a leading provider of security software solutions, which was acquired by Computer Associates International, Inc. in November 2004. From October 1999 to April 2001, Ms. Sommer was Vice President and Chief Financial Officer of Revenio, Inc., a privately-held customer relationship management software company. Ms. Sommer was Senior Vice President and Chief Financial Officer of Open Market, Inc., an Internet commerce and information publishing software firm, from 1997 to 1999 and Vice President and Chief Financial Officer from 1995 to 1997. From 1989 to 1994, Ms. Sommer was Vice President at The Olsten Corporation and Lifetime
Corporation, providers of staffing and healthcare services. From 1980 to 1989, Ms. Sommer served in various positions from staff accountant to senior manager at PricewaterhouseCoopers. Ms. Sommer served on the Board of SoundBite Communications, Inc., a telecommunications service provider, from 2006 until May 2012, where she was the chair of the Audit Committee and a member of the Compensation Committee. In addition, she sat on the Board of Insulet Corporation from January 2008 to August 2017, a publicly held provider of an insulin infusion system for people with insulin dependent diabetes. She also served on Insulet’s Audit Committee and Nominating and Governance Committee. Ms. Sommer also sat on the Board of ING Direct, a banking and financial services company, from January 2008 until February 2012, and served as a member of the Audit, Risk Oversight and Investment and the Governance and Conduct Review Committees.

The Board concluded that Ms. Sommer is well suited to serve as a director of the Company because of her past leadership experience as the Chief Financial Officer of two publicly-traded companies. In addition, she brings significant financial expertise across a broad range of industries relevant to the Company’s business, including banking, software development and auditing. She also adds value from her experience in business development.
 
 
 
Jack VanWoerkom
Age 65
Class I
Director Since 2005
Term Expires 2021
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Mr. VanWoerkom served as the General Counsel and Chief Compliance Officer of Porchlight Equity (formerly Highland Consumer Fund), a private equity firm specializing in lower middle market companies, from January 2017 until December 2018. Before serving as General Counsel and Chief Compliance Officer, Mr. VanWoerkom served as an Operating Partner at Porchlight Equity from June 2015 until January 2017. From June 2011 until June 2015, Mr. VanWoerkom was retired. From June 2007 until June 2011, Mr. VanWoerkom was employed by The Home Depot, Inc., a home improvement retailer, as Executive Vice President, General Counsel and Corporate Secretary. Mr. VanWoerkom served as Executive Vice President, General Counsel and Secretary of Staples, Inc., an office supply retailer, from March 2004 to June 2007. From March 1999 to March 2004, Mr. VanWoerkom was Senior Vice President, General Counsel and Secretary of Staples.
              
The Board concluded that, due to his experience as a general counsel and an executive officer of several companies, Mr. VanWoerkom is well suited to serve as a director of the Company. Specifically, his experience with legal, regulatory, corporate governance and corporate transactions, including mergers and acquisitions, provides a valuable point of view on the Board. Mr. VanWoerkom brings an international perspective to the Board owing to his experience with managing global suppliers and international operations.
 
 
 
John E. Bachman
Age 63
Class I
Director Since 2016
Term Expires 2021
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Prior to his retirement, Mr. Bachman was a partner at the accounting firm of PricewaterhouseCoopers LLP, a firm that focuses on audit, assurance, tax and consulting services, from 1989 to 2015. At PwC, Mr. Bachman served as the Operations Leader of the firm’s U.S. Assurance Practice from July 2007 to November 2013, with full operational and financial responsibility for this $4 billion line of business, which included the firm’s audit and risk management practices. Prior to this operational role, Mr. Bachman served for three years as the firm’s Strategy Leader where he was responsible for strategic planning across business units, geographies and industries. Mr. Bachman also served as an audit partner for companies in the industrial manufacturing, financial services, publishing, healthcare and other industries. Mr. Bachman sits on the Board of The Children’s Place, Inc., a children’s specialty apparel retailer. Mr. Bachman received an MBA from the Harvard University Graduate Business School and a bachelor’s degree from Bucknell University.

The Board concluded that Mr. Bachman is well suited to serve as a director of the Company because of his extensive background in auditing, as well as his strategy and operations experience with C-level executives, which will benefit WEX’s vision of global expansion now and in the future.

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Daniel Callahan
Age 62
Class II
Director Nominee
If elected, term expires 2022
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Mr. Callahan is a nominee for election to the Board at the Annual Meeting. Prior to his retirement in December 2018, Mr. Callahan was an officer of Citigroup, an American multinational investment bank and financial services corporation. At Citigroup, Mr. Callahan served from October 2007 to December 2018 as the Global Head of Operations and Technology. From July 2005 to July 2007, Mr. Callahan was Managing Director at Credit Suisse, a financial services company. In addition, Mr. Callahan currently serves on the Business Committee of the Metropolitan Museum of Art as well as on the boards of several private companies.
 
The Board concluded that Mr. Callahan is well suited to serve as a director of the Company because of his industry experience as a key executive of Citigroup. Mr. Callahan’s qualifications to serve on the Board include his technology experience in a leadership position of a global financial services corporation.
 
 
 
Shikhar Ghosh
Age 61
Class II
Director Since 2005
Term Expires 2019
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Mr. Ghosh is a Professor of Management Practice at the Harvard Business School. He has been on the faculty since August 2008 and is Co-Chairman of the Rock Center for Entrepreneurship at Harvard University. Mr. Ghosh is also currently on the Board of Decision Resources Group, a leading provider of information services to the healthcare industry and Evidence Action, a non-profit organization that provides health services to over 200 million children across multiple countries. From June 2006 until December 2007, Mr. Ghosh was the Chief Executive Officer of Risk Syndication for the Kessler Group, where he enabled bank clients and their endorsing partners to market credit cards. From June 1999 to June 2004, Mr. Ghosh was Chairman and Chief Executive Officer of Verilytics Technologies, LLC, an analytical software company focused on the financial services industry. In 1993, Mr. Ghosh founded Open Market, Inc., an Internet commerce and information publishing software firm. From 1988 to 1993, Mr. Ghosh was the Chief Executive Officer of Appex Corp., a technology company that was sold to Electronic Data Systems Corporation in 1990. From 1980 until 1988, Mr. Ghosh served in various positions with The Boston Consulting Group, a management consulting firm, and was elected as a worldwide partner and a director of the firm in 1988.
       
The Board concluded that Mr. Ghosh is well suited to serve as a director of the Company because of his experience with various technology related ventures and record of founding companies that have operated in emerging technology markets. Mr. Ghosh’s qualifications to serve on the Board include his academic experience and executive management, business development and leadership experience, as the Chairman and CEO of various companies.
 
 
 
James Neary
Age 54
Class II
Director Since 2016
Term Expires 2019
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Mr. Neary is a managing director of Warburg Pincus, a private equity firm, which he joined in 2000. Mr. Neary has served as co-head of the Industrial & Business Services team since June 2013 and is also a member of the firm’s executive management group. From 2010 to June 2013, Mr. Neary led the firm’s late-stage efforts in the technology and business services sectors in the U.S. Prior to that, from 2004 to 2010, he was co-head of the technology, media and telecommunications investment efforts in the U.S. From 2000 to 2004, Mr. Neary led the firm’s Capital Markets activities. Before joining Warburg Pincus, he was a managing director at Chase Securities, an investment advisory firm. Mr. Neary has been the Chairman of Endurance International Group, a web presence solutions company, since December 2011 and Hygiena, a manufacturer of food safety devices, since August 2016. He is also a director of several private companies and a trustee of The Mount Sinai Health Systems. Mr. Neary has previously served on the Boards of Fidelity National Information Services, Inc., a bank technology processing company, from October 2009 to October 2013, Coyote Logistics, a truck brokerage business now owned by UPS, from November 2007 to September 2015 and Interactive Data Corporation, a firm providing financial market data and analytics and now owned by Intercontinental Exchange, from July 2010 to December 2015. 

The Board concluded that Mr. Neary is qualified to serve as a director of the Company due to his extensive knowledge of the payments industry, strategy and business development and his wide-ranging experience as a director and as chairman of other large, complex companies.

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Melissa Smith
 Age 50
Class II
Director since 2014
Term expires 2019
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Ms. Smith assumed the role of Chief Executive Officer of WEX and a seat on the Board in January 2014. She has served as the Company’s President since May 2013. Previously, Ms. Smith served as President, The Americas, from April 2011 to April 2013 and as the Company’s Chief Financial Officer and Executive Vice President, Finance and Operations from November 2007 to April 2011. From September 2001 through November 2007, Ms. Smith served as Senior Vice President, Finance and Chief Financial Officer. From May 1997 to August 2001, Ms. Smith held various positions of increasing responsibility with the Company. Ms. Smith began her career at Ernst & Young.

The Board concluded that Ms. Smith is well suited to serve as a Director of the Company because of her experience with the Company in various positions with increasing responsibilities across all facets of the Company. The Board benefits from the leadership skills, financial expertise and business development expertise of Ms. Smith. Ms. Smith has over 20 years of experience with the Company.
 
 
 
Michael Dubyak
Age 68
Class III
Director Since 2005
Term Expires 2020
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Mr. Dubyak has served as the Chairman of the Board since May 2008. Mr. Dubyak also served as the Executive Chairman from January 2014 to December 2014 and our Chief Executive Officer from August 1998 until January 2014. He also served as the President from August 1998 until May 2013. From November 1997 to August 1998, Mr. Dubyak served as our Executive Vice President of U.S. Sales and Marketing. Before that, from January 1994 to November 1997, Mr. Dubyak served us in various senior positions in marketing, sales, business development and customer service. From January 1986 to January 1994, he served as our Vice President of Marketing. Mr. Dubyak has more than 30 years of experience in the business-to-business payments, payment processing, information management services and vehicle fleet and fuel industries.

The Board concluded that Mr. Dubyak is well suited to serve as a director of the Company because of his long experience with the Company and knowledge of the fleet card and payment processing industries. Mr. Dubyak has served in various leadership roles with the Company and held senior positions in marketing, marketing services, sales and business development. He has been associated with the Company for over 30 years.

 
 
 
Rowland Moriarty
Age 72
Class III
Director Since 2005
Term Expires 2020
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Dr. Moriarty served as the non-executive Chairman of the Board of Directors of WEX Inc. from 2005 until May 2008 and has served as the Vice Chairman and Lead Director since May 2008. He has been the President and Chief Executive Officer of Cubex Corporation, a privately-held consulting company, since 1992. From 1981 to 1992, Dr. Moriarty was a professor of business administration at Harvard Business School and served on the Board of Staples, Inc., an office products company, from 1986 until June 2016. Dr. Moriarty currently serves on the Boards of CRA International, Inc., an economic, financial and management consulting services firm, as Chairman, and Virtusa Corporation, a global information technology services company, since 1986 and 2006, respectively.

The Board concluded that Dr. Moriarty is well suited to serve as a Director of the Company because of his experience across a broad spectrum of industries gained as the Chairman of CRA International, Inc., as well as his experience as a member of the Board of Directors of other publicly-traded companies. He also adds value to the Board from his in-depth industry experience, diversification, merger and acquisition experience and financial expertise.
Susan Sobbott
Age 54
Class III
Director Since 2018
Term Expires 2021

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Ms. Sobbott assumed a seat on the Board in December 2018. Ms. Sobbott also serves on the board of directors for The Children’s Place, the largest publicly-traded specialty retailer of children’s apparel in North America and Red Ventures, a privately held digital marketing provider for many of the world’s biggest consumer brands. Ms. Sobbott will serve on The Children’s Place board through its 2019 annual meeting. Prior to her retirement in February 2018, Ms. Sobbott was an officer at the American Express Company, a multinational financial services company. At the American Express Company, Ms. Sobbott served from December 2015 to February 2018 as the President of Global Commercial Services, a multibillion-dollar global division. From January 2014 to November 2015, she was President of Global Corporate Payments. From 2004 to January 2014, she was President and General Manager of American Express OPEN, a multibillion-dollar business unit within American Express Company serving small businesses. Ms. Sobbott served as an officer of the firm, as a member of the Business Operating Committee, a group of senior leaders at American Express Company working with the Chief Executive Officer to develop strategic direction, and as a member of the Enterprise Risk Management Committee.

The Board concluded that Ms. Sobbott is well suited to serve as a director of the Company because of her industry experience garnered while serving as a key executive at American Express. This includes Ms. Sobbott’s leadership running large international business units at American Express.

Kirk P. Pond also currently serves as a Class II Director. However, Mr. Pond will retire at the end of his term and is not standing for reelection at the Annual Meeting.

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NUMBER OF DIRECTORS AND TERMS
Our certificate of incorporation provides that our Board shall consist of such number of directors as is fixed by our By-Laws. Our By-Laws provide that our Board shall consist of such number of directors as from time to time is fixed exclusively by resolution of the Board. Currently, the Board has fixed the size of the Board at ten directors, who serve staggered terms as follows:
each director who is elected at an annual meeting of stockholders serves a three-year term and until such director’s successor is duly elected and qualified, subject to such director’s earlier death, resignation or removal,
the directors are divided into three classes,
the classes are as nearly equal in number as possible, and
the term of each class begins on a staggered schedule.

BOARD AND COMMITTEE MEETINGS
The Board held 6 meetings in 2018. Each of our directors attended at least 75 percent of the aggregate number of meetings of the Board and meetings of the Board committees, held during the period for which he or she was a director or served on a committee in 2018. Our independent directors meet in executive session in at least one regularly scheduled in-person Board meeting each year. As provided in our Corporate Governance Guidelines, we expect directors to attend the annual meeting of stockholders. In 2018, eight out of our nine directors attended the 2018 annual meeting of stockholders.
Our Board has created the following committees. The charters for each of the committees can be obtained at: http://ir.wexinc.com/phoenix.zhtml?c=186699&p=irol-govhighlights

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NAME OF COMMITTEE
AND MEMBERS
  
COMMITTEES OF THE BOARD OF DIRECTORS
  
NUMBER OF
MEETINGS IN 2018
Audit
  
 
  
 
Regina O. Sommer (Chair)
John E. Bachman
Kirk Pond
Susan Sobbott
  
The Audit Committee must be comprised of at least three independent directors appointed by a majority of the Board. The Audit Committee oversees our accounting and financial reporting processes, the audits of our financial statements and internal control over financial reporting and monitors the Company’s enterprise risk management and cybersecurity program. All members of the Audit Committee are independent under the applicable rules of the New York Stock Exchange, or the NYSE, and the Securities and Exchange Commission, or the SEC. In addition, each member of the Audit Committee is required to have the ability to read and understand fundamental financial statements. Unless determined otherwise by the Board, the Audit Committee shall have at least one member who qualifies as an “audit committee financial expert” as defined by the rules of the SEC. Our Board has determined that Mr. Bachman and Ms. Sommer qualify as “audit committee financial experts.”
  
13
Compensation
  
 
  
 
Jack VanWoerkom (Chair) Shikhar Ghosh
James Neary
Susan Sobbott

           
  
The Compensation Committee must be comprised of at least two independent directors appointed by a majority of the Board. The Compensation Committee oversees the administration of our equity incentive plans and certain of our benefit plans, reviews and administers all compensation arrangements for executive officers and our Board and establishes and reviews general policies relating to the compensation and benefits of our officers and employees. All members of the Compensation Committee are independent under the applicable rules of the NYSE.
  
5
Corporate Governance
  
 
  
 
Rowland T. Moriarty (Chair)
Regina O. Sommer
Jack VanWoerkom
  
The Corporate Governance Committee is comprised of such number of independent directors as our Board shall determine. The Corporate Governance Committee’s responsibilities include identifying and recommending to the Board appropriate director nominee candidates, overseeing succession planning for the CEO and other executive officers and providing oversight with respect to corporate governance matters. All members of the Corporate Governance Committee are independent under the applicable rules of the NYSE.
  
4
 
 
 
Finance Committee
  
 
  
 
James Neary (Chair)
John E. Bachman
Michael E. Dubyak
Rowland T. Moriarty

  
The Finance Committee is comprised of such number of directors as our Board shall determine. The Finance Committee’s responsibilities include advising the Board and the Company’s management regarding potential corporate transactions, including strategic investments, mergers, acquisitions and divestitures. The Finance Committee also oversees the Company’s debt or equity financings, credit arrangements, investments, capital structure and capital policies.
  
12
 
Technology Committee
 
 
 
 
Shikhar Ghosh (Chair)
Michael E. Dubyak
Kirk Pond
Regina O. Sommer
 
The Technology Committee is comprised of such number of directors as our Board shall determine. The Technology Committee’s responsibilities include assisting the Board and Audit Committee in their oversight of the Company’s management of risks regarding technology, data security, disaster recovery, and business continuity. In addition, the Technology Committee focuses on strategy relating to hardware, software, architecture, organizational structure, management, resource allocation, innovation, and research and development.

 
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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of our Compensation Committee (the members of which who served during 2018 are listed in the table in the “Board and Committee Meetings” section of this Proxy statement) is or was one of our or our subsidiaries’ former officers or employees. During 2018, there were no Compensation Committee interlocks as required to be disclosed under SEC rules.

DIRECTOR COMPENSATION

The Company’s Non-Employee Directors Compensation Plan is designed to achieve the following objectives:
Attract and engage directors;
Compensate our directors for the investment of time they make to support the Company;
Align director compensation with stockholder interests; and
Have a compensation structure that is simple, transparent and easy for stockholders to understand.

Our Corporate Governance Guidelines note that the Company’s policy is to compensate directors competitively relative to comparable companies, and that the Compensation Committee will periodically review the compensation of the Company’s directors. In line with this, the Compensation Committee generally reviews our director compensation program against peer group market data every two years, with the reference to the same peer companies used to benchmark executive compensation, as well as survey information analyzing director compensation at U.S. public companies. The Compensation Committee last reviewed the compensation of the Company’s directors in 2017, and made changes to the director compensation policy, effective October 1, 2017, in order to better align the total compensation of our non-employee directors with our peer group median. The assessment of director compensation is conducted by the Compensation Committee with the assistance of Compensation Advisory Partners, the Compensation Committee’s independent compensation consultant.
Annual Cash Retainers
The Company pays each non-employee director the following annual cash retainer(s) based upon his or her service on the Board and/or a Board committee. Such payments are made in four equal quarterly amounts.
 
 
Annual Fee Schedule
Annual Chair Cash Retainer
$
120,000

Annual Lead Director Cash Retainer
$
85,000

Annual Director Cash Retainer (other than Chairman and Lead Director)
$
70,000

Audit Committee Chair Cash Retainer
$
30,000

Compensation Committee Chair Cash Retainer
$
20,000

Finance Committee Chair Cash Retainer
$
20,000

Corporate Governance Committee Chair Cash Retainer
$
15,000

Technology Committee Chair Cash Retainer
$
20,000

Audit Committee Member Cash Retainer (other than Committee Chair)
$
15,000

Compensation Committee Member Cash Retainer (other than Committee Chair)
$
10,000

Finance Committee Member Cash Retainer (other than Committee Chair)
$
10,000

Corporate Governance Committee Member Cash Retainer (other than Committee Chair)
$
7,500

Technology Committee Member Cash Retainer (other than Committee Chair)
$
10,000

To the extent a non-employee director is appointed at a time other than the annual stockholders’ meeting, any annual cash retainer is prorated. Employees who serve as directors are not separately compensated for their service on our Board.
Equity Retainers

In 2018, all non-employee directors were granted a number of restricted stock units, or RSUs, worth the equivalent of approximately $135,000 at the time of the annual stockholders’ meeting at the then current stock price. The Lead Director was granted additional RSUs worth the equivalent of approximately $15,000 and the Chairman was granted additional RSUs worth

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the equivalent of approximately $50,000 at the time of the annual stockholders’ meeting at the then current stock price. These RSUs will vest on the first anniversary of the date of grant.

Our directors are subject to anti-hedging and anti-pledging requirements. We maintain a policy that prohibits directors from purchasing any financial instrument, or entering into any transaction, that is designed to hedge or offset a decrease in the market value of the Company stock (including, but not limited to, prepaid variable forward contracts, equity swaps, collars or exchange funds) or from pledging, hypothecating, or otherwise encumbering shares of the Company stock as collateral for indebtedness.
New Director Equity Grants
All new non-employee directors are granted a number of RSUs, worth the equivalent of approximately $50,000 at the then current stock price. Such RSUs are granted at the next annual stockholders meetings after their appointment to the Board, and vest on the first anniversary of the date of grant.

2018 Director Compensation

Our non-employee directors received the aggregate amount of compensation in the year ended December 31, 2018:
Name
Fees Earned or
Paid in Cash
($)
 
Stock
Awards
 (1)
($)
 
Total
($)
John E. Bachman
$92,500
 
$134,954
 
$227,454
Michael E. Dubyak
$140,000
 
$184,878
 
$324,878
Shikhar Ghosh
$100,000
 
$134,954
 
$234,954
George L. McTavish(2)
$64,327
 
$—
 
$64,327
Rowland T. Moriarty
$110,000
 
$149,949
 
$259,949
James Neary
$93,874
 
$134,954
 
$228,828
Kirk P. Pond
$95,000
 
$134,954
 
$229,954
Susan Sobbott
$7,917
 
$—
 
$7,917
Regina O. Sommer
$110,000
 
$134,954
 
$244,954
Jack VanWoerkom
$97,500
 
$134,954
 
$232,454
(1)
This column is the aggregate fair value of stock awards granted on May 11, 2018. The fair value of these awards is determined in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718 based on the closing price of our common stock as reported by the NYSE on the day that the award was granted. The aggregate number of RSUs outstanding for each non-employee director as of December 31, 2018 is as follows: Mr. Bachman — 765; Mr. Dubyak — 1,048; Mr. Ghosh — 765; Dr. Moriarty — 850; Mr. Neary — 765; Mr. Pond — 765; Ms. Sommer — 765; and Mr. VanWoerkom — 765.
(2)
Mr. McTavish did not stand for reelection at the 2018 Annual Meeting.
Fee Deferral
Directors may defer all or part of their cash fees and equity retainers into deferred stock units which will be payable in Company shares to the Director 200 days following cessation of Board service.
Expense Reimbursement
Directors are reimbursed by the Company for their out-of-pocket travel and related expenses incurred in attending all Board and committee meetings.

NON-EMPLOYEE DIRECTOR EQUITY OWNERSHIP GUIDELINES
The Compensation Committee established equity ownership guidelines for all non-employee directors. “Equity” for the purpose of these guidelines is defined to include shares of the Company’s common stock, vested restricted stock units and deferred stock units. Under the guidelines of the equity ownership program, all Directors are expected to own equity equal in value to at least three times each Director’s annual Director cash retainer or Lead Director cash retainer. The Directors’ compliance with these guidelines is assessed by the Compensation Committee, as of July 31 of each year, which is the

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“Determination Date” for purposes of these guidelines. New directors have three years following their initial Determination Date to achieve this level of ownership. As of July 31, 2018, all of our non-employee directors then serving, were in compliance with their required ownership level. Under our guidelines, Ms. Sobbott, who was not a member of our Board as of July 31, 2018, has three years from her initial Determination Date to accumulate sufficient equity holdings to gain compliance with the equity ownership guidelines.

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PRINCIPAL STOCKHOLDERS
This table shows common stock that is beneficially owned by our directors, our named executive officers, our current directors and executive officers as a group and all persons known to us to own 5 percent or more of the Company’s outstanding common stock, as of March 22, 2019. The percent of outstanding shares reported below is based on 43,245,348 shares outstanding on March 22, 2019.

AMOUNT AND NATURE OF SHARES BENEFICIALLY OWNED 
Name and Address(1)
Common Stock
Owned (2)
 
Right To
Acquire(3)
 
Total
Securities Beneficially
Owned  (3)
 
Percent of
Outstanding
Shares
Principal Stockholders:
 
 
 
 
 
 
 
Wellington Management Group, LLP(4)
4,115,213

 

 
4,115,213

 
9.6
%
280 Congress Street
 
 
 
 
 
 
 
Boston, MA 02210
 
 
 
 
 
 
 
Janus Henderson Group plc(5)
3,795,653

 

 
3,795,653

 
8.8
%
201 Bishopsgate
 
 
 
 
 
 
 
EC2M 3AE, United Kingdom
 
 
 
 
 
 
 
The Vanguard Group, Inc.(6)
3,947,972

 

 
3,947,972

 
9.2
%
100 Vanguard Blvd
 
 
 
 
 
 
 
Malvern, PA 19355
 
 
 
 
 
 
 
BlackRock, Inc.(7)
3,807,299

 

 
3,807,299

 
8.8
%
55 East 52nd Street
 
 
 
 
 
 
 
New York NY 10055
 
 
 
 
 
 
 
Eaton Vance Management(8)
2,338,521

 

 
2,338,521

 
5.4
%
2 International Place
 
 
 
 
 
 
 
Boston, MA 02110
 
 
 
 
 
 
 
Executive Officers and Directors:
 
 
 
 
 
 
 
Melissa Smith
85,783

 
58,455

 
144,238

 
*

Roberto Simon(9)
19,234

 
14,514

 
33,748

 
*

Scott Phillips(10)
34,121

 
5,366

 
39,487

 
*

Melanie Tinto
562

 
584

 
1,146

 
*

Jeffrey Young
13,855

 
4,562

 
18,417

 
*

John E. Bachman
1,598

 
765

 
2,363

 
*

Michael E. Dubyak(11)
58,008

 
1,048

 
59,056

 
*

Shikhar Ghosh
3,712

 
1,357

 
5,069

 
*

Rowland T. Moriarty(12)
61,742

 
850

 
62,592

 
*

James Neary
1,598

 
765

 
2,363

 
*

Kirk P. Pond(13)
30,432

 
765

 
31,197

 
*

Susan Sobbott

 

 

 
*

Regina O. Sommer
6,286

 
765

 
7,051

 
*

Jack VanWoerkom
1,099

 
765

 
1,864

 
*

Directors and Executive Officers as a Group
(19 Persons)
(14)
361,216

 
123,013

 
484,229

 
*

*
Less than 1%
(1)
Unless otherwise noted, the business address for the individual is care of WEX Inc., 97 Darling Avenue, South Portland, ME 04106.

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(2)
Unless otherwise noted, includes shares for which the named person has sole voting and investment power or has shared voting and investment power with his or her spouse. Excludes shares that may be acquired through stock option exercises or through the vesting of restricted stock units. This table does not include the following number of shares which will be acquired by our non-employee directors 200 days after their separation from our Board: 38,932 shares by Mr. Ghosh; 11,999 shares by Dr. Moriarty; 11,003 shares by Mr. Pond; 6,564 shares by Ms. Sommer, and 6,606 shares by Mr. VanWoerkom.
(3)
Includes shares that can be acquired through stock option exercises or the vesting of restricted stock units through May 22, 2019. Excludes shares that may not be acquired until on or after May 23, 2019.
(4)
This information was reported on a Schedule 13G/A filed with the SEC on February 14, 2019. Each of Wellington Management Group, LLP, Wellington Group Holdings LLP and Wellington Investment Advisors Holdings LLP has shared voting power with respect to 3,525,743 shares and shared dispositive power with respect to 4,115,213 shares. Wellington Management Company LLP has shared voting power with respect to 3,384,314 shares and shared dispositive power with respect to 3,872,540 shares. The securities reported are owned of record by clients of one or more investment advisors directly or indirectly owned by Wellington Management Group LLP (the “Investment Advisors”), including: Wellington Management Company LLP , Wellington Management Canada LLC, Wellington Management Singapore Pte Ltd, Wellington Management Hong Kong Ltd, Wellington Management International Ltd, Wellington Management Japan Pte Ltd and Wellington Management Australia Pty Ltd. Wellington Investment Advisors Holdings LLP controls directly, or indirectly through Wellington Management Global Holdings, Ltd., the Investment Advisers. Wellington Investment Advisors Holdings LLP is owned by Wellington Group Holdings LLP. Wellington Group Holdings LLP is owned by Wellington Management Group LLP. The percentage reported in the table above is based on the assumption that Wellington Management Group LLP has beneficial ownership of 4,115,213 shares of common stock on March 22, 2019.
(5)
This information was reported on a Schedule 13G/A filed by Janus Henderson Group plc (“Janus Henderson”) with the SEC on February 12, 2019. The Schedule 13G/A reported that Janus Henderson has shared voting power and shared dispositive power over 3,795,653 shares. The percentage reported is based on the assumption that Janus Henderson has beneficial ownership of 3,795,653 shares of common stock on March 22, 2019.
(6)
This information was reported on a Schedule 13G/A filed by The Vanguard Group, Inc. (“Vanguard”) with the SEC on February 11, 2019. The Schedule 13G/A reported that Vanguard has sole voting power over 23,057 shares, shared voting power over 4,990 shares, sole dispositive power over 3,923,958 shares and shared dispositive power over 24,014 shares. The percentage reported is based on the assumption that Vanguard has beneficial ownership of 3,947,972 shares of common stock on March 22, 2019.
(7)
This information was reported on a Schedule 13G/A filed by BlackRock, Inc. (“BlackRock”) with the SEC on February 6, 2019. The Schedule 13G/A reported that BlackRock has sole voting power over 3,640,930 shares and has sole power to dispose 3,807,299 shares. The percentage reported is based on the assumption that BlackRock had beneficial ownership of 3,807,299 shares of common stock on March 22, 2019.
(8)
This information was reported on a Schedule 13G/A filed by Eaton Vance Management (“Eaton Vance”) with the SEC on February 14, 2019. The Schedule 13G/A reported that Eaton Vance has sole voting power over and sole dispositive power over 2,338,521 shares. The percentage reported is based on the assumption that Eaton Vance has beneficial ownership of 2,338,521 shares of common stock on March 22, 2019.
(9)
Includes 62 shares held indirectly in the WEX Inc. 401(k) Plan. Mr. Simon disclaims beneficial ownership of those shares except to the extent of his pecuniary interest in them.
(10)
Includes 7,986 shares held indirectly through a trust for the benefit of Mr. Phillips, 4,149 shares held indirectly through a Grantor Retained Annuity Trust (“GRAT”) for the benefit of the reporting person, 4,149 shares held indirectly through a GRAT for the benefit of the reporting person’s spouse and 7,987 held indirectly by a trust for the benefit of the reporting person’s spouse. Mr. Phillips disclaims beneficial ownership of these shares except to the extent of his pecuniary interest in them.
(11)

Includes 5,748 shares held indirectly under a GRAT. Mr. Dubyak disclaims beneficial ownership of those shares except to the extent of his pecuniary interest in them.
(12)
Includes 19,000 shares held indirectly through Rubex, LLC, 15,600 shares held indirectly through the Moriarty Family Charitable Trust and 21,978 held indirectly by Rowgra, LLC. Dr. Moriarty is the Chief Investment Officer of Rubex, LLC and disclaims beneficial ownership of the shares held by Rubex, LLC except to the extent of his pecuniary interest in them. Dr. Moriarty disclaims beneficial ownership of the shares of Moriarty Family Charitable Trust except to the extent of his pecuniary interest in them. Dr. Moriarty is the Managing Manager and Distribution Manager of Rowgra LLC and disclaims beneficial ownership of the shares held by Rowgra LLC except to the extent of his pecuniary interest in them.
(13)
Includes 2,500 shares held indirectly through the Pond Family Foundation, 700 shares held indirectly through the Loretta A. Pond Trust, and 3,000 shares held by Mr. Pond’s spouse. Mr. Pond disclaims beneficial ownership of those shares except to the extent of his pecuniary interest in them.
(14)
In addition to the named executive officers and directors named in this table, five other executive officers were members of this group as of March 22, 2019.


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DIRECTOR INDEPENDENCE
We have considered the independence of each member of the Board. To assist us in our determination, we reviewed the NYSE independence requirements and our general guidelines for independence, which are part of our corporate governance guidelines.
To be considered independent: (1) a director must be independent as determined under Section 303A.02(b) of the NYSE Listed Company Manual and (2) in the Board’s judgment, the director must not have a material relationship with the Company (either directly or as a partner, stockholder or officer of an organization that has a relationship with the Company).
The Board has established guidelines to assist it in determining whether a director has a material relationship with the Company. Under these guidelines, a director will not be considered to have a material relationship with the Company if (1) he or she is independent as determined under Section 303A.02(b) of the NYSE Listed Company Manual and (2) he or she: (i) serves as an executive officer of another company which is indebted to the Company, or to which the Company is indebted, provided that the total amount of either company’s indebtedness to the other is less than one percent of the total consolidated assets of the company he or she serves as an executive officer; (ii) serves as an officer, director or trustee of a tax exempt organization, that receives contributions from the Company, provided that the Company’s discretionary contributions to such organization are less than the greater of $1 million or 2 percent of that organization’s consolidated gross revenues; or (iii) serves as a director of another company with which the Company engages in a business transaction or transactions, provided that the director owns less than 5 percent of the equity interests of such other company and recuses himself or herself from deliberations of the Board with respect to such transactions. In addition, ownership of a significant amount of the Company’s stock, by itself, does not constitute a material relationship. For relationships not covered by the guidelines set forth above, the determination of whether a material relationship exists shall be made by the other members of the Board of Directors who are independent as defined above.
Based on our guidelines and NYSE corporate governance standards, we have determined that the following directors are independent: John E. Bachman, Shikhar Ghosh, Rowland T. Moriarty, James Neary, Kirk P. Pond, Susan Sobbott, Regina O. Sommer and Jack VanWoerkom and that the nominee Daniel Callahan is also independent. Additionally, our board of directors also previously determined that George L. McTavish, a former director who served during part of the year ended December 31, 2018 was independent. In assessing the independence of Mr. VanWoerkom, the Board considered the former employment relationship of an immediate family member of Mr. VanWoerkom who is not an executive officer of the Company and received annual compensation of less than $120,000. In assessing the independence of Mr. Neary, the Board considered his relationship with Warburg Pincus, a former significant stockholder.
In addition, each of the members of the Corporate Governance Committee, Audit Committee and the Compensation Committee are independent, as determined by the Board in accordance with its guidelines and the listing standards of the NYSE. We have also determined that the members of the Audit Committee satisfy the independence requirements contemplated by Rule 10A-3 under the Exchange Act, and that the members of the Compensation Committee satisfy the independence requirements contemplated by Rule 10C-1 under the Exchange Act.

DIRECTOR NOMINATIONS AND RECOMMENDATIONS
The Corporate Governance Committee responsibilities include recommending candidates for nomination to the Board. The Corporate Governance Committee has recommended Messrs. Ghosh, Neary and Callahan and Ms. Smith for election at the 2019 Annual Meeting. Mr. Ghosh has served as a member of our Board since February 2005, Ms. Smith has served as a member of our Board since January 2014, Mr. Neary has served as a member of our Board since July 2016, and Mr. Callahan is being nominated as a new member of the Board also at the recommendation of the independent directors of the Board. In identifying potential directors, the Corporate Governance Committee may: retain a search firm; consider their professional networks; evaluate highly regarded leaders in industry and academia; or, entertain suggestions from stockholders or other business organizations, among other ways suitable for identifying potential directors.
The Corporate Governance Committee will consider candidates nominated or recommended by stockholders as potential director nominees in the same manner as candidates identified by the Corporate Governance Committee. If the Board determines to nominate a stockholder-recommended candidate and recommends his or her election, then that nominee’s name will be included in the proxy card for the next annual meeting. Our stockholders also have the right under our By-Laws to directly nominate director candidates and should follow the procedures outlined in the “Information About Voting Procedures” section of this proxy statement in the answer to the question entitled “How do I submit a stockholder proposal or director nominee for next year’s annual meeting or suggest a candidate for nomination as a director to the Corporate Governance Committee?”


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To be timely, a stockholder’s notice to the Secretary of a director nominee for next year’s annual meeting must be delivered to or mailed and received no earlier than January 10, 2020 nor later than February 9, 2020. However, in the event that the annual meeting is called for a date that is not within 25 days before or after May 9, 2020 notice by the stockholder must be received no earlier than 120 days prior to the annual meeting and no later than the later of the 90th day prior to the annual meeting or the tenth day following the day on which notice of the date of the annual meeting is mailed or publicly disclosed.
In addition, to be considered timely, notice to the Secretary of a “proxy access” director nominee for next year’s annual meeting pursuant to our newly-adopted Bylaw provision must be received in writing by the Secretary no earlier than December 18, 2019 nor later than January 17, 2020. However, in the event that the date of the annual meeting is advanced by more than 30 days, or delayed (other than as a result of adjournment) by more than 60 days, from the first anniversary of the preceding year’s annual meeting, or if no annual meeting was held in the preceding year, notice must be received no earlier than the 150th day prior to such annual meeting and no later than the close of business on the later of (i) the 120th day prior to such annual meeting and (ii) the tenth day following the day on which notice of the date of such annual meeting was mailed or public disclosure of the date of such annual meeting was made, whichever first occurs.

Stockholder nominations, including pursuant to the proxy access provision, must be addressed to:
    WEX Inc.
    Attention: Corporate Secretary
   97 Darling Avenue
   South Portland, ME 04106
Director Qualifications
The qualifications for directors are described in our Corporate Governance Guidelines and the guidelines for evaluating director nominees are in the Corporate Governance Committee’s charter, each of which is available on our website. The Corporate Governance Committee believes that a nominee for the position of director must meet the following specific, minimum qualifications:
Nominees should have a reputation for integrity, honesty and adherence to high ethical standards;
Nominees should have demonstrated business acumen, experience and ability to exercise sound judgments in matters that relate to the current and long-term objectives of the Company and should be willing and able to contribute positively to the decision-making process of the Company;
Nominees should have a commitment to understand the Company and its industry and to regularly attend and participate in meetings of the Board and its committees;
Nominees should have the interest and ability to understand the sometimes conflicting interests of the various constituencies of the Company, which include stockholders, employees, customers, governmental units, creditors and the general public, and to act in the interests of all stockholders; and
Nominees should not have, nor appear to have, a conflict of interest that would impair the nominee’s ability to represent the interests of all the Company’s stockholders and to fulfill the responsibilities of a director.
Our Corporate Governance Committee does not have a policy with respect to diversity, but believes that our Board, taken as a whole, should embody a diverse set of skills, experiences and backgrounds. Our Board currently is comprised of ten directors, and embodies that principle of diversified composition and thought. As presently constituted, our board includes three women and a South Asian. The Corporate Governance Committee intends to be mindful of diversity, with respect to gender, race and national origin, in connection with future nominations of directors not presently serving on the Board. In addition, our Corporate Governance Committee’s charter provides that nominees shall not be discriminated against on the basis of race, religion, national origin, sex, sexual orientation, disability or any other basis proscribed by law.
Application of Criteria to Existing Directors
The re-nomination of existing directors is not viewed as automatic, but is based on continuing qualification under the criteria listed above. The Corporate Governance Committee uses its best judgment and discretion in applying the criteria to the existing directors keeping in mind the interest of the Company.
In addition, the Corporate Governance Committee considers the existing directors’ performance on the Board and any committee, including consideration of the extent to which the directors undertook continuing director education.
The backgrounds and qualifications of the directors considered as a group provide a significant breadth of experience, knowledge and abilities in order to assist the Board in fulfilling its responsibilities. The rationale for the Company’s

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determination that each director is well suited to serve on the Board is specified with his or her respective biographical entry under the “Nominees for and Members of the Board of Directors” section of this proxy statement.

COMMUNICATIONS WITH THE BOARD OF DIRECTORS
The Board believes that the Chief Executive Officer and her designees, as well as the Chairman of the Board and Vice Chairman and Lead Director, speak for the Company. Individual Board members may, from time to time, meet or otherwise communicate with various constituencies who are involved with the Company. It is, however, expected that Board members would do so with the knowledge of and, absent unusual circumstances or as contemplated by the committee charters, only at the request of the Company’s senior executives or the Board.
The Board will give appropriate attention to written communications that are submitted by stockholders and other interested parties, and will respond if and as appropriate. Absent unusual circumstances or as contemplated by the committee charters, the Vice Chairman and Lead Director shall, subject to advice and assistance from the General Counsel, (1) be primarily responsible for monitoring communications from stockholders and other interested parties, and (2) provide copies or summaries of such communications to the other directors as he considers appropriate.
If you wish to communicate with the Board or the independent members of the Board, you may send your communication in writing to:
    Independent Director Communication
    WEX Inc.
    Attention: Corporate Secretary
    97 Darling Avenue
    South Portland, ME 04106
You should include your name and address in the written communication and indicate whether you are a stockholder.
Governance Disclosures on Our Website
Complete copies of our corporate governance guidelines, committee charters and code of conduct and ethics are available on the Corporate Governance section of our website, at www.wexinc.com. In accordance with NYSE rules, we may also make disclosure of the following on our website:
the identity of the Lead Director at meetings of independent directors;
the method for interested parties to communicate directly with the Lead Director or with the independent directors as a group;
the identity of any member of our Audit Committee who also serves on the audit committees of more than three public companies and a determination by our Board that such simultaneous service will not impair the ability of such member to effectively serve on our Audit Committee; and
contributions by us to a tax exempt organization in which any independent director serves as an executive officer if, within the preceding three years, contributions in any single fiscal year exceeded the greater of $1 million or 2% of such tax exempt organization’s consolidated gross revenues.


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COMPENSATION

EXECUTIVE OFFICERS
Non-Director Members of the Executive Team
 
David Cooper
Age 52
Chief Technology Officer
David Cooper joined WEX in December 2016 as our Senior Vice President and Chief Technology Officer. Prior to joining WEX, he held several senior technology positions, including head of global operations at GlobeOne, a financial services company, from June 2016 to December 2016, CTO at Advisor Software, an advisory and wealth management software company from November 2015 to June 2016, SVP of technology at Green Dot, a retail banking company, from March 2014 to November 2015, CTO and SVP of product development at both Fiserv, an information technology and services company, from September 2011 to February 2014 and CashEdge, a leading provider of Intelligent Money Movement from June 2005 to September 2011.
Joel (Jay) A. Dearborn
Age 40
President, Corporate Payments
Joel Dearborn joined WEX in January 2016 as Vice President, Strategy. Mr. Dearborn served as Vice President, Strategy from January 2016 until December 2017. Since December 2017, Mr. Dearborn has served as WEX’s President for corporate payments, and is responsible for WEX’s virtual card and other payments solutions. Prior to joining WEX, he was a principal at McKinsey & Company, a management consulting firm, from January 2008 to January 2016, where he helped private and public organizations set their strategic direction, including technology deployment and process redesign to support long-term growth.
Kenneth W. Janosick
Age 57
Chief Portfolio Risk & Operations Officer
Kenneth Janosick has served as the Chief Portfolio Risk and Operations Officer overseeing WEX Bank, fraud, credit risk and other areas of potential risk since December 2017. Prior to that he served as Senior Vice President and General Manager, Global Fleet Direct from January 2014 to December 2017. He also served as the Senior Vice President, Small Business Solutions from December 2010 to December 2013. He joined WEX as Vice President, Product and Marketing in January 2009 and served in that role until December 2010. Before that, Mr. Janosick was a First Vice President at JP Morgan Chase bank from November 2006 to November 2009 with responsibility for Relationship Banking and Investments and the Small Business Division.
Nicola S. Morris
Age 53
Chief Corporate Development Officer
Nicola Morris has served as the Chief Corporate Development Officer since December 2017. Prior to that she served as the Senior Vice President, Corporate Development from February 2014 to December 2017. She is responsible for managing corporate development and strategic planning, directing corporate marketing, and overseeing early stage product development.  Prior to joining WEX, she worked for Verizon Communications, a global communications and technology company, from January 2006 through January 2014, where she served as the Vice President, Global Corporate Strategy from November 2011 to January 2014. Prior to that role, she held the positions of Vice President and Chief Marketing Officer from October 2010 to November 2011 and also that of Vice President, Strategy and Business Development, both with the Verizon Business unit from January 2006 to October 2010. Before Verizon, she held positions with MCI, Incorporated and Digex, Incorporated.
Scott Phillips
Age 49
President, Global Fleet
Scott Phillips has served as the President, Global Fleet, since December 2017. He joined the Company as Senior Vice President and General Manager, Electronic Funds Source (“EFS”) on July 1, 2016, when the Company acquired EFS to expand its large and mid-sized over-the-road (“OTR”) and corporate payments business. Mr. Phillips had been the President and CEO of EFS from September 2011 to June 2016, responsible for OTR fleet activities along with the EFS Corporate Payments business. Prior to joining EFS, he was Executive Vice President and General Manager of the Corporate Payments Divisions at Comdata Corporation, a payment processor and issuer of fleet fuel cards.
Hilary A. Rapkin
Age 52
Chief Legal Officer
Hilary Rapkin has served as our Chief Legal Officer since December 2017. Prior to that she served as the Senior Vice President, General Counsel and Corporate Secretary from February 2005 to November 2017. She also served as the Head of Human Resources from February 2013 until February 2018. From January 1996 to February 2005, Ms. Rapkin held various positions of increasing responsibilities with the Company. Ms. Rapkin is a member of the American Bar Association, the Maine State Bar Association, the Association of Corporate Counsel, the Society of Corporate Secretaries and Governance Professionals, the Society for Human Resources and Management and the New England Legal Foundation.

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Roberto Simon
Age 44
Chief Financial Officer
Roberto Simon joined WEX as the Chief Financial Officer in February 2016. Previously, Mr. Simon served as the Executive Vice President and Chief Financial Officer of Revlon, Inc., a global cosmetics, personal and beauty care products company, from October 2014 until February 2016. Prior to that, he was the Revlon Senior Vice President, Global Finance from October 2013 to September 2014 and served as Revlon’s Global Business Process Owner, SAP, from February 2014 until September 2014.  Prior to joining Revlon as a result of Revlon’s acquisition of The Colomer Group Participations, S.L. (“The Colomer Group”), a Spain-based salon and professional beauty business, Mr. Simon served in various senior finance positions of increasing responsibility at The Colomer Group since 2002, including most recently serving as The Colomer Group’s Chief Financial Officer from October 2011 to October 2014.  Prior to that, he served as The Colomer Group’s Vice President of Finance for America and Africa from January 2008 until September 2011.
Melanie J. Tinto
Age 47
Chief Human Resources Officer

Melanie Tinto joined WEX as the Chief Human Resources Officer in February 2018. Previously, Ms. Tinto served as the Vice President, Talent Management and Chief Learning Officer at Medtronic, a global leader in medical technology, services and solutions, from April 2015 to February 2018. Prior to joining Medtronic, Ms. Tinto served as the Vice President, Executive Development and Organizational Development of Hewlett Packard, an information technology company, from April 2013 to March 2015.
Jeffrey Young
Age 53
President, Health
Jeffrey Young joined WEX in July 2014, when the Company acquired WEX Health (formerly, Evolution1) to expand its healthcare payments business. He served as the CEO of WEX Health, then known as Evolution1, from November 2008 to July 2014. Prior to WEX Health, Mr. Young was the Vice President of Business Applications at Microsoft Corporation, a multinational technology company, in the United States from May 2001 to October 2008. Previously, he helped to lead Great Plains Software through its successful IPO and eventual sale to Microsoft for more than $1 billion, as an Executive Vice President of Sales and Marketing from 1989 to 2001.

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ITEM 2.
ADVISORY (NON-BINDING) VOTE ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
We are providing you with the opportunity to vote to approve, on an advisory, non-binding basis, the compensation of the executive officers named in the Summary Compensation Table under “Executive Compensation,” whom we refer to as our “named executive officers” or “NEOs,” as disclosed in this proxy statement in accordance with the SEC’s rules. This proposal, which is commonly referred to as “say-on-pay,” is required by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which added Section 14A to the Securities Exchange Act of 1934, or Exchange Act.
Our executive compensation programs are designed to attract, motivate, and retain individuals who are critical to our success.
WEX’s “pay-for-performance” philosophy regarding executive compensation is straightforward: reward our executives for their contributions to the Company’s annual and long-term performance by tying a significant portion of their total compensation to key business drivers and stockholder value. Reflecting our pay-for-performance philosophy, a significant portion of executive compensation is subject to increase when results exceed target, reduction when results fall below target and elimination if results do not achieve a threshold level of performance. Stockholders are urged to read the “Executive Compensation” section of this proxy statement, including the section entitled “Compensation Discussion and Analysis,” which describes our executive compensation philosophy and programs in greater detail, as well as compensation decisions made by the Compensation Committee with respect to the fiscal year ended December 31, 2018.
Our Board is asking stockholders to approve, on a non-binding advisory basis, the following resolution:
RESOLVED, that the compensation paid to WEX Inc.’s named executive officers, as disclosed in accordance with the Securities and Exchange Commission’s compensation disclosure rules, including the Compensation Discussion and Analysis, the compensation tables and any related material disclosed in this proxy statement, is hereby approved.

As an advisory vote, this proposal is not binding. The outcome of this advisory vote will not overrule any decision by the Company or the Board (or any committee of the Board), or create or imply any change or addition to the fiduciary duties of the Company or the Board (or any committee of the Board). However, our Compensation Committee and Board value the opinions expressed by our stockholders in their vote on this proposal and will consider the outcome of the vote when making future compensation decisions for named executive officers.
The Board has decided that the Company will hold an annual advisory vote on the compensation of our named executive officers.
We recommend a vote FOR approval of the compensation of our named executive officers.

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EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis, or CD&A, describes our compensation objectives and programs for our “named executive officers” or “NEOs.” This CD&A also describes the specific decisions, and the processes supporting those decisions, which were made with respect to 2018 for the NEOs.
For 2018, our NEOs were:
Melissa Smith, Chief Executive Officer (“CEO”) and President
Roberto Simon, Chief Financial Officer (“CFO”)
Scott Phillips, President, Global Fleet
Melanie Tinto, Chief Human Resources Officer
Jeffrey Young, President, Health

CD&A Table of Contents
To assist in finding important information, we call your attention to the following sections of our CD&A:
 
Executive Summary
Summary of WEX’s Business. WEX Inc. is a global leader in payment solutions operating in three reportable segments: Fleet Solutions, Travel and Corporate Solutions, and Health and Employee Benefit Solutions. Our Fleet Solutions segment provides payment, transaction processing and information management services specifically designed for the needs of commercial and government fleets. Our Travel and Corporate Solutions segment focuses on the complex payment environment of business-to-business payments, providing customers with payment processing solutions for their corporate payment and transaction monitoring needs. Our Health and Employee Benefit Solutions segment provides a software-as-a-service, or “SaaS”, platform for consumer directed healthcare payments, as well as payroll related benefits to customers in Brazil. During 2018, Fleet Solutions revenue represented approximately 65% of our total revenue, Travel and Corporate Solutions revenue represented approximately 20% of our total revenue, and Health and Employee Benefit Solutions revenue represented approximately 15% of our total revenue.

2018 Company Performance Highlights. 2018 was a strong year operationally for WEX. The Company’s 2018 revenue grew 20%, adjusted net income attributable to shareholders, a non-GAAP measure, grew 57% and annualized total stockholder return (TSR) was flat at -0.8%, as shown in the charts below. Our growth in the past several years has been primarily organic, supplemented by acquisitions in each of our three business segments as well as favorable macro-economic conditions and the impact of changes to tax law.

picture1.jpgpicture2.jpg
                                         

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picture3a01.jpg
Please note that the reconciliations of the non-GAAP financial measures discussed in this proxy statement are located in Appendix A.
We aspire to be the leading financial technology company within our core verticals. As such, we have designed our performance-based annual and long-term incentive awards for executives to, among other things, align compensation with performance against pre-established goals for these metrics, in addition to stock price performance and other measures of operational success at the corporate, segment and individual levels.
The following metrics provide additional context to our overall operational performance in 2018:
                                                                                                                                                                               
w

Average number of vehicles serviced for 2018 increased 8 percent from 2017.
w
Total fuel transactions processed in 2018 increased 7 percent from 2017.
w
Credit loss expense in the Fleet Solutions segment decreased 8 percent during 2018, as compared to 2017, despite a 22 percent spend volume increase in 2018, as compared to 2017.
w
Our Travel and Corporate Solutions purchase volume in 2018 grew organically 14 percent from 2017.
w
Health and Employee Benefit Solutions average number of SaaS accounts in the U.S. grew 20 percent in 2018, as compared to 2017.

The following additional events and accomplishments, which position the Company well for the future and reflect a strong performance year, occurred during 2018:

w

During October 2018, the Company entered into a definitive asset purchase agreement to acquire Chevron’s existing customer portfolio for approximately $223.4 million, including of $54.6 million for the carrying value of trade accounts receivable. Concurrently with entering into the asset purchase agreement, we modified a number of contract terms, including extending the term of Chevron’s agreement.
w
During October 2018, the Company entered into a definitive agreement to acquire Noventis, an electronic payments network focused on optimizing payment delivery for bills and invoices to commercial entities, for approximately $310 million.
w
The Company successfully executed two separate repricings of our 2016 Credit Agreement and extended the maturity on our revolving credit facility and term A loans to July 2023.
w
We adopted a cloud-first development process and began migrating our fleet technology platform to a secure private cloud. In addition, we have begun migrating our U.S. travel transaction processing onto an internal cloud-based virtual card platform that we acquired as part of our 2017 AOC acquisition.
w
The Company was certified for the second year in a row as a Great Place to Work® in the U.S. by Great Place to Work.
w
The Company launched the WEX Compassion Fund, which will support WEX employees with grants designed to alleviate financial stress from qualified, personal disasters. The fund will be administered by the WEX Cares Foundation, Inc., a separate non-profit entity that was established for this purpose.

Say on Pay Support and Stockholder Engagement. We have adopted a policy of conducting an annual advisory vote on executive compensation. While this vote is not binding, our Board and the Compensation Committee, which we refer to as the Committee for purposes of CD&A, value the opinions of our stockholders.

The Committee strives to ensure our executive compensation program aligns with the interests of our stockholders and adheres to our pay for performance philosophy. Our executive compensation program has historically received very strong

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stockholder support (including, for example, 99% support from 2015 to 2017). At our 2018 Annual Meeting of Stockholders, approximately 57% of votes cast supported WEX’s executive compensation program. We were disappointed by this unusually low level of support. To understand our stockholders' concerns, we took action through a significant institutional outreach effort.

During Spring 2018, at the direction of the Committee Chair, WEX management reached out to our top-25 stockholders, representing more than 75% of shares outstanding, to discuss executive compensation. In addition to representatives from management, the Committee Chair actively participated in this outreach effort. This resulted in calls with seven investors. Some investors noted they had no issues with our pay programs and declined our request for engagement. In addition, during Fall 2018, WEX management again contacted our then-current, top-25 stockholders, to discuss any concerns or feedback they had related to environmental, social and governance and compensation matters. In response, meetings were requested by, and conducted with, three investors. Over the course of several months, senior management, the Committee and the Committee’s independent consultant analyzed and discussed what was learned in this comprehensive outreach process.

In general, we learned that our stockholders were not seeking major changes to our executive compensation program, and that the decline in support for our Say on Pay resolution last year was primarily related to the special 2017 performance-contingent stock option awards and bridge grants described in our last proxy statement. No such awards were made to our NEOs in 2018. Otherwise, most major stockholders were not prescriptive about plan design. They were more interested to see that the results and outcomes delivered by the compensation program were aligned appropriately with performance. Below are selected highlights from this process:
Feedback We Received
Action Taken by Compensation Committee
General support for the core/annual executive compensation program, especially our move to a three-year performance period for performance stock unit (PSU) awards.
No material changes, given stockholder support for our strongly performance-oriented program that is linked to key tenets of our business, as well as to longer-term stockholder value creation, and provides the ability to differentiate based on individual executive results versus pre-established goals.
Certain stockholders expressed a lack of support for absolute stock price goals in incentive programs.
No 2018 incentive awards had absolute stock price goals.
Certain stockholders were unclear on the time period during which the stock price targets may be achieved for the special 2017 performance-contingent stock option awards; (in particular, that the price hurdles may only be achieved during the final two years of the five-year performance period for the option).
Clarified during investor calls, and here within our 2019 proxy statement, that price hurdles may only be achieved within the two-year window beginning three years from grant date (i.e., between May 10, 2020 and May 10, 2022). This emphasizes longer-term stock price appreciation.









Certain stockholders did not support the rationale for our 2017 bridge grants.
No such awards were made to our NEOs during 2018.
Key Compensation Practices. Our executive compensation program is aligned to our business strategy and features many leading practices which we believe promote alignment with the interests of our stockholders.

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What We Do
ü


Directly link pay to performance outcomes, operational results and stockholder returns
ü


Link incentive plan performance measures to short- and mid-term operating objectives and delivery of long-term value to stockholders
ü


Target total direct compensation (base/cash bonus/long-term incentives) within a competitive range of the market median
ü


Maintain a cap on CEO and other NEO incentive compensation payouts for short term incentive plan (STIP) and PSU awards (200% of target)
ü


Have stock ownership guidelines for NEOs, including a retention requirement until stock ownership guideline is achieved
ü


Provide double-trigger change-in-control severance benefits
ü


Review share utilization annually
ü


Devote time to management succession and leadership development efforts
ü


Use an independent compensation consultant
ü


Anti-hedging policy
ü


Anti-pledging policy
ü

Clawback policy

What We Don’t Do
X
No payment of dividends or dividend equivalents on unearned RSUs or PSUs
X
No excise tax gross-ups upon a change-in-control
X
No re-pricing of underwater stock options without stockholder approval
X
No excessive severance or change-in-control benefits


Summary of WEX’s 2018 Executive Compensation Program. A summary of our executive compensation program during 2018 is provided below.

- Generally, we target total direct compensation (base/cash bonus/long-term incentives) within a competitive range of the market median.
- Pay will vary above or below target based primarily on corporate and business unit and, to a lesser degree individual, quantitative performance outcomes.

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Compensation Element
2018 Element
Base Salary- Fixed rate of pay
Increases reflect market-based adjustments.
Short-Term Incentive Plan (“STIP”)

Payout can range from 0-200% of target based on financial goals:
1.
Compensation Adjusted Operating Income (60%) and
2.
Compensation Adjusted Revenue (40%)

For NEOs leading a business unit, corporate goals are weighted 40% and business unit goals are weighted 60%.

The funded payout may be adjusted for each NEO through an individual performance modifier, down to 75% or up to 125%, with no payout greater than 200% of target. The adjustment is made based on an assessment of performance versus pre-defined, often quantitative individual goals. The modifier, across our executive leadership team, is intended to generally function within the “pool” of STIP-funded dollars (0-200% of target) that is determined based on the two financial metrics listed above. The Committee has further discretion to eliminate any funded bonus payout at its discretion, should circumstance warrant.
STIP funding was 118.7% of target, on an overall corporate basis, based on objective performance against pre-defined enterprise-wide quantitative goals.

No individual modifiers (±) were applied to NEO STIP payments for 2018.





Long-Term Incentive Plan (“LTIP”)

Our target long-term incentive mix during 2018 for our CEO was 60% PSUs, 25% Stock Options, and 15% RSUs; target mix for our other NEOs, was 60% PSUs, 20% options and 20% RSUs.
PSUs:
- Payout can range from 0-200% of target with cliff vesting on third anniversary of grant
- 3-year performance period based on cumulative corporate financial goals
Compensation Adjusted Net Income Earnings Per Share (60%), and
Non-Fuel Sensitive Revenue (40%)

Stock Options:
- 3-year ratable vesting requirement
- Reward long-term stockholder value creation

RSUs:
- 3-year ratable vesting requirement
- Reward long-term stockholder value creation and encourage retention
Given our shift to a longer, three-year PSU performance period, no NEO PSUs with enterprise-wide goals had a performance period conclude on December 31, 2018.


The Non-Fuel Sensitive Revenue metric recognizes the importance of revenue diversification for our business, given the impact that volatile fuel prices may have on our business results.

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Pay Mix. The majority of CEO compensation is variable (“at risk”). For 2018, 86% of target total direct compensation was variable for our CEO in her core compensation program. This directly ties pay to Company performance outcomes, including financial results, strategic initiatives, and stock price performance.

        ceotargettotals.jpg
The majority of the compensation for the remaining NEOs is also variable and tied directly to Company performance outcomes, as described above.
Process for Determining Executive Compensation
Compensation Committee. The Committee, composed solely of independent directors, is responsible for our executive officer compensation decisions, which includes our NEOs. The Committee works closely with its independent compensation consultant and management to examine pay and performance matters throughout the year. The Committee held 5 meetings over the course of 2018, all of which included an executive session without management present. The Committee charter may be accessed through the “Governance” link found on our website at: http://ir.wexinc.com/phoenix.zhtml?c=186699&p=irol-govhighlights.
In the first quarter of each fiscal year, the Chair of the Committee reviews the Board’s assessment of the CEO's performance with the CEO. In addition, the Committee approves the following, as explained below:
changes to executive base salaries and incentive targets, if any, for the current year;
STIP payout, if any, for the previous fiscal year;
STIP design and targets for the current fiscal year;
determination of performance-scoring payout of PSUs granted under the LTIP, if any, for previous years; and
LTIP metrics, targets and grants for the current fiscal year.

Agenda items for the second quarter vary each year but always include a review of Company performance and progress toward the achievement of incentive plan targets. Typically, this also includes a retrospective assessment of the senior executive pay versus performance relationship.

Agenda items for the third and fourth quarters also vary each year, but always include a review of Company performance and progress toward the achievement of incentive plan targets. The Committee also conducts its annual review of executive compensation, considering a report from its independent compensation consultant comparing the compensation of Company executive officers to a peer group of companies and survey data. Management also discusses with the Committee recommended executive compensation changes for each element of compensation for the next fiscal year.

The design of the STIP and LTIP is typically discussed over multiple meetings prior to the actual approval of the plans in the first quarter of each year. The discussions generally focus on the metrics to be utilized, the difficulty of the performance goals and the weightings for each metric. Other items that are addressed on an annual basis include a review of the

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Committee’s charter, director compensation, compliance with stock ownership guidelines and an update on market trends related to executive compensation.
    
Executive Management. Our Human Resources department, working with our Legal and Finance departments, was responsible for coordinating and overseeing the implementation of executive compensation, and discussing significant proposals or topics impacting executive compensation at WEX with the Committee. This included development of compensation recommendations, in accordance with the compensation philosophy and policies more fully described elsewhere in this CD&A. The following members of management are generally invited to and attend Committee meetings: the CEO; CFO; Chief Human Resources Officer; Chief Legal Officer; VP, Corporate Securities Counsel; and Director, Global Total Rewards.

The Committee has authority to approve the compensation of the CEO and the other NEOs. The CEO meets with the Committee and the compensation consultant to discuss company and individual performance objectives and outcomes, and review compensation recommendations for executive officers directly reporting to her, including the other NEOs. Thereafter, the Committee meets privately with its independent compensation consultant to review and determine compensation of our CEO. In addition, each year the Committee sets compensation plan performance targets for our executive officers and management provides input and recommendations with respect to such targets, as well as information and analyses, as requested by the Committee.
Independent Compensation Consultant. The Committee has the authority to retain and terminate a compensation consultant, and to approve the consultant’s fees and all other terms of such engagement. During 2018, the Committee continued to directly retain Compensation Advisory Partners LLC (“CAP”) as its independent compensation consultant. The scope of the work done by CAP for the Committee included:

Preparing analyses, recommendations, and other support to inform the Committee’s decisions related to executive and director compensation;
Providing updates on market trends and the regulatory environment, as they relate to executive and director compensation;
Reviewing and commenting on management proposals presented to the Committee;
Providing a report comparing the compensation of Company executives to a peer group of companies and survey data; and
Working with the Committee to validate the pay-for-performance relationship, in support of alignment with stockholders.
The Committee assessed the independence of CAP pursuant to SEC and NYSE rules, and concluded that no conflict of interest exists that would prevent CAP from providing independent advice to the Committee. CAP will not perform other services for WEX without the consent of the Chair of the Committee. CAP meets with the Committee Chair and the Committee outside the presence of management. In addition, CAP participated in all of the Committee’s meetings during 2018 and, when requested by the Committee Chair, participates in preparatory meetings and executive sessions.
Total Compensation - Objectives and Philosophy

Objectives. Our compensation programs are designed and administered to balance the achievement of near-term operational results and long-term growth goals with the ultimate objective of increasing long-term stockholder value. The principal elements of an executive’s total compensation consist of: base salary, annual cash bonus and long-term incentives.

Compensation Philosophy. Generally, we target total direct compensation (salary, annual bonus and long-term incentives) within a competitive range of the market median. Pay may vary above or below target based on actual performance outcomes. Variations in total direct compensation among the NEOs reflect differences in competitive pay for their respective positions as well as the size and complexity of the business units or functions they oversee, the performance of those business units or functions, key competencies and individual performance.

2018 Total Direct Compensation

We structure NEO target total direct compensation so that the majority is delivered in the form of equity awards, in order to provide incentives to work towards long-term top and bottom-line growth that will enhance stockholder returns and to align our NEOs’ compensation directly with our stockholders’ interests. We also structure NEOs’ cash compensation so that a significant portion is at risk under the company’s short-term incentive plan, payable primarily based on enterprise and business

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unit results, and to a lesser degree based on individual performance. We further detail each component of total direct compensation below.

Base Salary.  We review base salaries annually, but we do not necessarily award salary increases each year. In determining base salary levels for named executive officers, the Committee considers the following qualitative and quantitative factors: job level and responsibilities, relevant experience, individual performance, recent corporate and business unit performance, internal equity, and our objective of paying competitive total direct compensation if performance expectations are met. From time to time base salaries may be adjusted other than as a result of an annual review, for example in order to address competitive pressures or in connection with a promotion. Year-end NEO salaries were as follows:

 
Name
NEOs Base Salary
Rationale for Increase
2017
2018
% Increase 
(2017-2018)
Melissa Smith
CEO and President
$700,000
$735,000
5%
Market-based adjustment
Roberto Simon
CFO
$500,000
$500,000
—%
n/a
Scott Phillips
President, Global Fleet
$475,000
$475,000
—%
n/a
Melanie Tinto
Chief Human Resources Officer
$—
$350,000
—%
Not a NEO in 2017
Jeffrey Young
President, Health
$450,000
$450,000
—%
n/a

Short-Term Incentive Plan.  Our Annual Incentive Plan, structured under our Performance Incentive Plan (“PIP”), is designed to motivate our NEOs to drive profitable Company growth, while diversifying Company revenues, by measuring NEO performance against our plans at the corporate and business unit level, with the potential for individual adjustment as described below. For NEOs leading a business unit, corporate goals are weighted 40% and business unit goals are weighted 60%. This framework holds the NEO group accountable for the same corporate metrics and goals, while also emphasizing and holding business unit leaders accountable for the results they can most influence. The PIP was approved by our stockholders in 2015 and was designed to give us flexibility to potentially maximize the tax deductibility of certain incentives as performance-based awards under Section 162(m) of the Internal Revenue Code of 1986, as amended (“Section 162(m)”), as further described below under the “Tax and Accounting Considerations” section. Section 162(m) has been since amended by the Tax Cuts and Jobs Act, signed into law on December 22, 2017 (the “Tax Act”), which, among other things eliminated the performance-based compensation exception to Section 162(m) for tax years beginning on or after January 1, 2018, subject to limited transition rules.

We establish a cash bonus target for each NEO based upon their position within the Company, responsibility and competitive cash bonus opportunities for similar positions at other companies. Final STIP payouts may range from 0% to 200% of the target bonus opportunity based on actual performance outcomes. The following tables describe 2018 NEO performance goals, results for each component of the STIP, and the actual cash bonus award for each NEO.

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Weighting Used in Determination of 2018 STIP Payout(1)
Corporate Goals
M. Smith
 
R. Simon
 
S. Phillips
 
M. Tinto
 
J. Young
Compensation Adjusted Revenue
40%
 
40%
 
16%
 
40%
 
16%
Compensation Adjusted Operating Income
60%
 
60%
 
24%
 
60%
 
24%
Business Unit Financial Goals
 
 
 
 
 
 
 
 
 
Fleet Adjusted Revenue
 
 
24%
 
 
Fleet Adjusted Operating Income
 
 
36%
 
 
Healthcare Adjusted Revenue
 
 
 
 
24%
Healthcare Adjusted Operating Income
 
 
 
 
36%
STIP payout as a percentage of target based on 2018 performance
118.7%
 
118.7%
 
108.0%
 
118.7%
 
122.5%
(1) The percentages for each NEO represent the weight that each corporate goal is provided in determining 2018 actual STIP payout.
     
 
 
Performance Goals
 
2018 Actual
 
Corporate Goals

Weight
Threshold
(50% payout)
Target Performance Goal (100% payout)
Maximum
(200% payout)
 
Actual Performance
Actual % Performance
Payout based on Actual 2018 Performance
Compensation Adjusted Revenue(1)
40%
$1,348,900,000
$1,419,800,000
$1,476,600,000
 
$1,451,767,007
156.3%
62.5%
Compensation Adjusted Operating Income(2)
60%
$515,700,000
$551,500,000
$579,100,000
 
$546,931,638
93.6%
56.2%
Weighted Average Payout
118.7%

(1) Compensation Adjusted Revenue means 2018 revenue as reported in the Form 10-K filing reporting the Company’s results for the performance period adjusted for the difference between 2018 reported fuel prices and foreign exchange rates and Board-approved, budgeted 2018 fuel price and foreign exchange rate assumptions. The results were further adjusted for other immaterial items corrected in the revision of previously issued financial statements, as more fully described in the Company’s annual report on Form 10-K.
(2) Compensation Adjusted Operating Income means 2018 operating income as reported in the Form 10-K filing reporting the Company’s results for the performance period adjusted for: foreign exchange rate impacts compared to the Board approved 2018 Budget, fuel price differences compared to the Board approved 2018 Budget, acquisition-related intangible amortization, other acquisition and divestiture related items, stock-based compensation, restructuring and other costs. The results were further adjusted for other immaterial items corrected in the revision of previously issued financial statements, as more fully described in the Company’s annual report on Form 10-K.
    
The initial funding of the STIP payout, based on the financial metrics and pre-set goals described above, may be adjusted for each NEO through an individual performance modifier, down to 75% or up to 125% (of the initial funding of the STIP amount), with no payout greater than 200% of target under the STIP. The adjustment is made based on an assessment of performance versus pre-defined, often quantitative, individual goals. This modifier, across our executive team, is intended to generally function within the “pool” of STIP-funded dollars that is determined based on the financial metrics listed above. Our CEO may make individual modifier recommendations to the Committee for the other NEOs, for consideration and approval by the Committee, and the Committee independently considers and approves any CEO individual modifier factor, if any.

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In determining the final payout for Ms. Smith, the Committee considered overall corporate performance and several other achievements; including, her progress in positioning the Company as a leader in financial technology within our core verticals, achievement of acquisition-related synergies, momentum in new contract signings, actions related to long-term risk management, and talent-related results.
 
For the other NEOs, in addition to an evaluation of general leadership competencies, the pre-defined goals used to determine individual modifiers, which are generally quantitative, were based on the following criteria:

Roberto Simon: Financial system road-map and implementation; cost-savings and acquisition integration; and, reduction of debt and interest rate exposures.

Scott Phillips: Expansion of non-fuel revenue opportunities; implementation of business unit cost-savings synergies; customer satisfaction and net-promoter score metrics; and, platform consolidation.

Melanie Tinto: Global facilities strategy and integration targets; enhancement of global people strategy; enhancement of talent development programs; and, enhancement of workplace satisfaction metrics under Great Place to Work program.

Jeffrey Young: Increase revenue opportunities in new and existing markets; operating and strategic plan targets; and, card issuing strategy and milestones.

With respect to the 2018 payout, no individual STIP modifiers (±) were applied across any STIP payments to our NEOs.
 
Target Annual Incentive
 
 
 
 
 
 
 
 
 
 
Name
 
Base Salary at Year End 2018 ($)
 
Eligible Award Salary(1)
 
% of 2018 Base Salary
 
Award Amount At Target
 
Payout (% of target) based on 2018 Corporate/ Unit Performance
Individual Performance Modifier
Actual 2018 STIP Award Earned(2)
M. Smith
 
$735,000
 
$729,615
 
140%
 
$1,021,461
 
118.7
%
 
None

$1,212,474
R. Simon
 
$500,000
 
$500,000
 
75%
 
$375,000
 
118.7
%
 
None

$445,125
S. Phillips
 
$475,000
 
$475,000
 
70%
 
$332,500
 
108.0
%
 
None

$359,100
M. Tinto
 
$350,000
 
$302,885
 
60%
 
$181,731
 
118.7
%
 
None

$215,714
J. Young
 
$450,000
 
$450,000
 
67%
 
$301,500
 
122.5
%
 
None

$369,338
(1
)
Reflects the dollar value of base salary earned during the fiscal year. Certain NEOs received salary adjustments that were implemented for a partial part of the year.
(2
)
Actual 2018 STIP award earned reflects payout based upon eligible earnings multiplied by 2018 performance payout percentage.
 
Long-Term Incentive Compensation. The Company provides annual long-term equity-based incentives through the LTIP. Annual grants under the LTIP were provided through a mix of PSUs, which vest from 0% to 200% based on the achievement of multi-year performance goals, subject to further service based vesting described below,
stock options which have no value absent stock price appreciation and encourage stockholder value creation over a long-term (10 year) time horizon, and RSUs, which vest based on the passage of time and fluctuate in value based on changes in our stock price. PSUs, stock options and RSUs generally vest over a three year period of employment.
    
We aim to provide long-term awards such that together with cash compensation, target total direct compensation (salary plus target bonus and grant-date value of annual long-term incentive awards) is within a competitive range of the market median. Compensation is intended to vary based on Company and individual performance outcomes. The Committee bases individual award levels on comparative market data for the executive’s position, award levels of comparably-situated executives, and an assessment of individual potential and performance. In making awards to any individual, the Committee does not alter its compensation philosophy based on the individual’s value realized, or failure to achieve gains, on prior RSU, stock option or PSU awards.

Annual equity grants were 60% PSUs, 20% stock options and 20% RSUs for our non-CEO NEOs. The mix for our CEO was: 60% PSUs, 25% stock options and 15% RSUs. Our program balances mid-term (PSU) goals and long-term (stock options) stockholder valuation creation, with key employee motivation and retention.

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2018 LTIP. The 2018 LTIP was designed to support our multi-year strategic plan and reward each of the NEOs for their contribution to the achievement of plan goals during the three-year performance period from January 1, 2018 to December 31, 2020. There are two performance metrics, Compensation Adjusted Net Income Earnings Per Share, weighted 60%, and Non-Fuel Sensitive Revenue, weighted 40%. In furtherance of the alignment of the LTIP program with the Company’s strategic plan of diversification of the Company’s revenue base away from fuel price sensitivity, the Non-Fuel Sensitive Revenue metric focuses on the importance of revenue that is not impacted by volatility in fuel prices. As the performance period is incomplete, payout is not yet known. Payout and targets for the PSUs will be disclosed in the 2021 proxy statement, retrospectively, once the performance period is complete. If earned, PSUs will cliff vest on the third anniversary of the grant date. The stock options and RSUs will vest according to the Company’s practice of having one-third of each award vest on each of the first three anniversaries of the grant date.

2016 Healthcare Incentive PSU Grant Payout. A performance-based award was granted to one of our NEOs, Jeffrey Young, on March 15, 2016 that converted from PSUs to RSUs based on the achievement of predetermined, Healthcare Segment-specific Revenue (60%) and Adjusted Operating Income (40%) performance goals for 2018 results.(1) As such, there was a three-year performance period. The award also had a service-based vesting requirement. Upon conversion to RSUs, the award vested in full on the third anniversary of the grant date. The award had a target value of $1.0 million, and payout could have ranged from 0% to 200% of the target units based on the achievement of the multi-year performance goals. The performance goals and actual results are shown below. Based on actual performance, 64.5% of the target PSUs were earned during 2018.
 
Healthcare Segment Goals(1)
Threshold (50% Payout)
Target Performance Goal (100% Payout)
Maximum (200% Payout)
Weighted
Actual Performance
Payout based on Actual 2018 Performance
 
 
 
2018 Revenue
$175,000,000
$205,000,000
$235,000,000
60%
$185,831,165
40.9%
 
CAGR(2) for 2018 Revenue Performance
21.1%
27.7%
33.7%
 
23.6%
 
 
2018 Adjusted Operating Income
$44,000,000
$50,000,000
$55,000,000
40%
$45,093,988
23.6%
 
CAGR(2) for 2018 Adjusted Operating Income Performance
21.0%
26.2%
30.3%
 
21.9%
 
 
Weighted Average Payout
 
 
 
 
 
64.5%
    
(1)
Revenue and Adjusted Operating Income for the Healthcare segment is as reported in the Company’s Form 10-K filing reporting the Corporation’s consolidated results excluding results generated outside of the Company’s US-Health operations.  Adjusted Operating Income is as reported in the Company’s Form 10-K filing reporting the Corporation’s consolidated results, which means adjusted for acquisition-related intangible amortization, stock-based compensation and other one-time non-recurring expense items.
(2)
CAGR is compounded annual growth rate for the business measured from 2015 to 2018.

Peer Group

We have created a target compensation structure that focuses on the median of our selected peer companies, but also allows total target compensation to vary to reflect other considerations, such as company performance, individual experience, job responsibilities and other individual performance factors. A key element of this process is selecting a relevant peer group against which we compare NEO pay elements. The Committee determines the composition of our peer group, considering input from its independent compensation consultant and management, among other factors, such as size, business, operating characteristics and competition for executive talent. For 2018, our peer group consisted of the 10 companies shown below, whose aggregate profile was comparable to WEX.


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2018 Peer Group
Cardtronics Inc.
Global Payments Inc.
CSG Systems International Inc.
Jack Henry & Associates Inc.
Euronet Worldwide Inc.
Total System Services, Inc.
EVERTEC, Inc.
Vantiv, Inc.(1)
FleetCor Technologies, Inc.
VeriFone Systems, Inc.(2)
(1) 
In January 2018, Vantiv, Inc. changed its name to Worldpay, Inc. following the completion of Vantiv’s merger with Worldpay Group plc.
(2) 
VeriFone Systems, Inc. was taken private as of August 20, 2018. As such, the Company was excluded from Peer Median calculations, shown below and in the Executive Summary above, which take into account full year fiscal 2018 results.
Metrics
WEX ($millions)
Peer Median ($millions)
Market Capitalization (at 12/31/2018)
$6,037
$9,780
2018 EBITDA Margin
37%
31%
2018 Revenue
$1,493
$2,433
3-Year Revenue Growth
75%
22%
                     
For certain NEOs, data relating to the peer group is supplemented, for reference, with functional data from executive compensation surveys conducted by two pay-related data providers: Equilar Top 25 Survey and Radford Global Technology Survey - US. With respect to these surveys, the identity of the individual companies comprising the survey data is not considered by the Committee in its evaluation process. Peer group data and other information provided to the Committee were considered in setting target compensation levels for our NEOs. For purposes of defining the market for each individual role, the Committee used the peer group data for the CEO and CFO; for the other NEOs, the Committee supplemented peer group data with the survey data described above.

During 2018, on average, target total direct compensation of our NEOs was positioned within a competitive range of the market median. Adjustments are typically made when we believe that there is a market-based gap and/or as warranted by individual performance.

Other Compensation Program and Governance Features

Compensation Risk Assessment. The Committee considers the potential risk to the Company from its compensation programs and policies. The Committee also reviews a risk assessment of our compensation policies, practices and programs covering employee groups, which was most recently conducted by representatives from Human Resources working with the Committee’s independent compensation consultant. The analysis evaluated the levels of risk-taking that potentially could be encouraged by our compensation arrangements, taking into account the arrangements’ risk-mitigation features, to determine whether they are appropriate in the context of our strategic plan and annual budget, our overall compensation arrangements, our compensation objectives and the Company’s overall risk profile. We concluded that WEX has an executive compensation program that balances competitive compensation with performance incentives and does not use compensation policies or practices - across employee groups - that create risks that are reasonably likely to have a material adverse effect on the Company. Select identified risk-mitigation features with respect to our NEOs include the following:
A competitive base salary, which provides executives with ongoing income;
Budget and goal setting processes that involve multiple levels of review;
Independent oversight of incentive program design and payouts;
Different performance-measurement and time-based vesting requirements between our short-term and long-term incentive programs;
Stock ownership guidelines, clawback, anti-hedging and anti-pledging policies; and
Committee approval for all Section 16 Executive Officer compensation.


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Tax Deductibility of Compensation. Internal Revenue Code Section 162(m) generally limits the tax deductibility of compensation paid to certain executive officers (and, beginning for 2018, certain former executive officers) to $1 million in any taxable year. Historically, an exception was available for compensation that qualified as “performance-based” within the meaning of Section 162(m), but the exception has now been repealed, effective for taxable years beginning after December 31, 2017, subject to certain transition rules. It has been our historical policy (prior to 2018) to structure certain compensation arrangements with our executive officers in a manner intended to qualify as performance-based so as to potentially maximize the tax deductibility of that compensation for U.S. federal income tax purposes; however, there have been cases where the benefit of such tax deductibility was outweighed by other objectives. Furthermore, incentive compensation opportunities provided in 2018 and in future years can no longer qualify for the previously-available performance-based exception due to 2017 tax reform legislation (i.e., the Tax Cuts and Jobs Act). As a result, for taxable years beginning after December 31, 2017, all compensation in excess of $1 million paid to specified executives will not be deductible, subject to certain grandfathering rules. The Committee has and will continue to review on a periodic basis the effect of Section 162(m) and may use its judgment to authorize compensation payments that are in excess of the deduction limit when it believes such payments are appropriate.

Accounting Implications. In designing our compensation and benefit programs, the Committee reviews and considers the accounting implications of its decisions, including the accounting treatment of amounts awarded or paid to our executives.

Executive Stock Ownership Guidelines. To further support alignment of the interests of management and stockholders, we maintain stock ownership guidelines for our executives. The guidelines require that executives attain a specified level of ownership of shares of the company’s common stock equal in value to a multiple of base salary within the later of five years of the executive’s appointment to their role or the applicability of these guidelines:
2018 Guidelines
Role
Multiple of Base Salary
Chief Executive Officer
5.0x
Other NEOs
3.0x
       
Until the minimum level of ownership is achieved, executives must retain, net after tax, 50% of any earned PSUs upon vesting, any RSUs upon vesting, and/or any stock received upon exercise of options.

The Committee reviews the ownership level for covered executives each year. As of the 2018 measurement of ownership, all NEOs were in compliance with the guidelines. “Equity,” for the purposes of executive ownership guidelines, includes shares of our common stock owned directly or indirectly and ownership interests in the WEX Common Stock Fund held in the Company’s 401(k) Plan, as well as 50% of unvested time-based RSU awards. Stock options and unearned, unvested PSUs are not counted.

    Anti-Hedging and Anti-Pledging Policies. We maintain a policy that prohibits directors and executive officers from purchasing any financial instrument, or entering into any transaction, that is designed to hedge or offset a decrease in the market value of Company stock (including, but not limited to, prepaid variable forward contracts, equity swaps, collars or exchange funds) or from pledging, hypothecating, or otherwise encumbering shares of Company stock as collateral for indebtedness.

Clawback Policy. We maintain a policy regarding the recoupment of incentive compensation from executive officers in specified situations. In the event of a restatement of the financial results of the Company due to material noncompliance of the Company with any financial reporting requirement under the U.S. federal securities laws or other misconduct on behalf of a current or former executive officer, the result of which is that any performance-based compensation paid to a current or former executive officer of the Company would have been a lower amount, the Committee will review such performance-based compensation to determine the appropriateness of seeking to recover any excess compensation. Such review would include a determination as to whether any executive officer engaged in misconduct, fraud or intentional illegal conduct which materially contributed to the need for such restatement.

Benefits and Perquisites. We provide competitive benefits to attract and retain associates at all levels. This includes a health and welfare benefits package and a 401(k) plan.


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In addition, in connection with the recruitment of Ms. Tinto, the Committee approved the Company providing her with an executive-level relocation package. As part of that package, Ms. Tinto was provided reimbursement for moving services, assistance with the sale of her prior home, and locating a new home.

New Hire Incentive Compensation. In addition, in connection with her recruitment, and primarily intended to replace foregone incentive compensation opportunity and equity awards granted by her previous employer, Ms. Tinto also received a cash award of $250,000 and an equity grant with a target value of $700,000. Of the equity awarded, 57% was in the form of PSUs and 43% was in the form of RSUs. The PSUs have the same multi-year Compensation Adjusted Net Income Earnings Per Share and Non-Fuel Sensitive Revenue performance requirements as PSU awards made to our executives on March 20, 2017. The PSU award, if earned, will cliff vest on the second anniversary of the grant date. As the performance period is incomplete, payout is not yet known. Payout and targets will be disclosed in the 2020 proxy statement, retrospectively, once the performance period is complete. The RSU award will vest over three years at a rate of one third of the total award per year, beginning on the first anniversary of the grant date.

Nonqualified Deferred Compensation. The Company administers the WEX Inc. 2005 Executive Deferred Compensation Plan, or 2005 EDCP, and the 2017 WEX Inc. Executive Deferred Compensation Plan, or 2017 EDCP. Both the 2005 EDCP and the 2017 EDCP provide executive officers with the opportunity to defer up to 80 percent of base salary and/or up to 98 percent of short-term incentive compensation. The Company provides a match of up to 6 percent of the participant’s short-term incentive compensation deferred into the 2005 EDCP and will do so for the 2017 EDCP. Investment income on contributions and Company match is accrued for participants to reflect performance of investment funds identified by each participant during their annual election period. The investment funds and their performance used to calculate earnings in the 2005 EDCP and 2017 EDCP generally mirror those used in the 401(k) Plan.

Each of the NEOs serving in his or her role at the time of election who was eligible to participate, with the exception of Mr. Young and Ms. Tinto, chose to defer a portion of his or her 2017 short term incentive compensation into the 2005 EDCP in 2018 (the last year in which the 2005 EDCP was available for new contributions). The 2005 EDCP was frozen to new contributions following those contributions. Going forward, executive officers will be able to contribute to the 2017 EDCP. The 2017 EDCP has the same characteristics as the 2005 EDCP.

Prior to our initial public offering, we offered the WEX Inc. Supplemental Investment and Savings Plan, or SERP, which allowed participants to defer compensation. The SERP was frozen to new contributions on December 31, 2004. Ms. Smith has a balance in this plan, which continues to earn investment returns based on the funds she selects from an available menu. We believe these investment returns are market competitive for the type of funds offered; there is no preferential interest earned in either the 2005 EDCP or SERP accounts. No other executive officers participated in the SERP when it was an active plan.
COMPENSATION COMMITTEE REPORT

The Committee has reviewed and discussed the foregoing Compensation Discussion and Analysis with management. Based on our review and discussions with management, we recommended to the Board of Directors that the CD&A be included in this proxy statement and incorporated by reference into our Annual Report on Form 10-K for the year ended December 31, 2018.

THE COMPENSATION COMMITTEE

Jack VanWoerkom (Chair)
Shikhar Ghosh
James Neary
Susan Sobbott




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2018 SUMMARY COMPENSATION TABLE
Name and Principal
Position      
 
Year
 
Salary
($)(1)
 
Bonus
($)
 
Stock
Awards
($)(2)
 
Option
Awards
($)(3)
 
Non-Equity
Incentive Plan
Compensation
($)(4)
 
Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings ($)(5)
 
All Other
Compensation
($)(6)
 
Total ($)
Melissa Smith
 
2018
 
$
729,615

 
$

 
$
2,699,878

 
$
899,992

 
$
1,212,474

 
$

 
$
88,758

 
$
5,630,717

President and Chief Executive Officer
 
2017
 
$
700,000

 
$

 
$
3,046,384

 
$
5,824,970

 
$
1,168,440

 
$
22,238

 
$
85,574

 
$
10,847,606

 
2016
 
$
674,039

 
$

 
$
1,895,106

 
$
631,727

 
$
965,791

 
$
4,383

 
$
39,961

 
$
4,211,007

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Roberto Simon
 
2018
 
$
500,000

 
$

 
$
999,697

 
$
249,978

 
$
445,125

 
$

 
$
37,822

 
$
4,037,885

Chief Financial Officer
 
2017
 
$
500,000

 
$

 
$
1,345,879

 
$
2,779,971

 
$
521,625

 
$

 
$
39,036

 
$
5,186,511

 
2016
 
$
423,077

 
$

 
$
2,049,892

 
$
199,989

 
$
408,803

 
$

 
$
405,976

 
$
3,487,737

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Scott Phillips
 
2018
 
$
475,000

 
$

 
$
999,697

 
$
249,978

 
$
359,100

 
$

 
$
35,580

 
$
2,119,355

President, Global
 
2017
 
$
405,769

 
$

 
$
799,929

 
$
2,199,967

 
$
1,752,237

 
$

 
$
26,346

 
$
5,184,248

 
2016
 
$

 
$

 
$

 
$

 
$

 
$

 
$

 
$

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Melanie Tinto
 
2018
 
$
302,885

 
$250,000
 
$
1,059,508

 
$
89,974

 
$
215,714

 
$

 
$
137,160

 
$
2,055,241

Chief Human Resources Officer
 
2017
 
$

 
$

 
$

 
$

 
$

 
$

 
\

 
$

 
2016
 
$

 
$

 
$

 
$

 
$

 
$

 
$

 
$

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Jeffrey Young
 
2018
 
$
450,000

 
$

 
$
479,912

 
$
119,965

 
$
369,338

 
$

 
$
14,000

 
$
1,433,215

President, Health
 
2017
 
$
450,000

 
$

 
$
456,323

 
$
1,599,960

 
$
459,788

 
$

 
$
13,500

 
$
2,979,571

 
2016
 
$
432,693

 
$

 
$
1,199,920

 
$
49,978

 
$
364,212

 
$

 
$
13,500

 
$
2,060,303

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

(1)
Includes amounts that may be contributed by each named executive officer on a pre-tax basis to the Company’s 401(k) plan, 2017 EDCP (for 2018) and 2005 EDCP (for 2016 and 2017).
(2)
The amounts shown in this column represent the aggregate grant date fair value of stock awards made during 2018, 2017, and 2016, respectively, calculated in accordance with FASB ASC Topic 718, assuming performance at target. Assumptions used in the calculation of these amounts are included in the Company’s audited financial statements for the fiscal years ended December 31, 2018, 2017, and 2016, included in the Company’s Annual Reports on Form 10-K filed with the Securities and Exchange Commission on March 18, 2019, March 1, 2018, and March 6, 2017, respectively. For PSUs, these amounts reflect the grant date fair value of such awards based upon the probable outcome at the time of grant. The value of the 2018 PSU awards at the grant date assuming that the highest level of performance conditions were achieved would be $4,319,995, $1,499,704, $1,499,704, $1,339,575, and $719,947 for Ms. Smith, Mr. Simon, Mr. Phillips, Ms. Tinto and Mr. Young, respectively. The value of the 2017 PSU awards at the grant date assuming that the highest level of performance conditions were achieved would be $3,959,973, $1,679,830, $1,199,998, and $599,894 for Ms. Smith, Mr. Simon, Mr. Phillips, and Mr. Young respectively. The value of the 2016 PSU awards at the grant date assuming that the highest level of performance conditions were achieved would be $3,032,262, $1,199,997, and $2,299,942 for Ms. Smith, Mr. Simon, and Mr. Young, respectively.
(3)
The amounts shown in this column represent the aggregate grant date fair value of option awards made during 2018, 2017 and 2016, respectively, calculated in accordance with FASB ASC Topic 718. Assumptions used in the calculation of these amounts are included in the Company’s audited financial statements for the fiscal years ended December 31, 2018, 2017 and 2016, included in the Company’s Annual Reports on Form 10-K filed with the Securities and Exchange Commission on March 18, 2019, March 1, 2018, and March 6, 2017, respectively.
(4)
The amounts shown reflect the cash incentive awarded in March 2019 for 2018 STIP results, March 2018 for 2017 STIP results, and March 2017 for 2016 STIP results, respectively, and include amounts contributed by each named executive officer on a pre-tax basis to the Company’s 2017 EDCP (for 2018 STIP results) and 2005 EDCP (for 2017 and 2016 STIP results). For Mr. Phillips, the amount shown in 2017 also reflects a payment of $1,488,000, relating to the EFS performance incentive plan.
(5)
The amounts shown reflect SERP earnings.
(6)
The following table describes the elements that are represented in the “All Other Compensation” column for the 2018 Summary Compensation Table:




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ALL OTHER COMPENSATION
 
Name
 
401(k) or
Other
Retirement
Plan
Employer
Match ($)
 
EDCP
Employer
Match ($)(1)
 
Other ($)
 
Total ($)
Melissa Smith
 
$
16,010

 
$
72,748

 
$

 
$
88,758

Roberto Simon
 
$
11,115

 
$
26,707

 
$

 
$
37,822

Scott Phillips
 
$
14,034

 
$
21,546

 
$

 
$
35,580

Melanie Tinto
 
$

 
$

 
$
137,160

(2) 
$
137,160

Jeffrey Young
 
$
14,000

 
$

 
$

 
$
14,000


(1)
The amounts reflect the Company’s contributions to the executive officer under the 2017 EDCP which were earned in 2018 and made in 2019.
(2)
Represents Ms. Tinto’s relocation expenses paid at the time she joined WEX.



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2018 GRANTS OF PLAN-BASED AWARDS
The following table represents all plan-based awards granted to the named executive officers in 2018:
 
Name
 
Type of
Award(1)
 
Grant
Date
 
Date of Committee Action
 
Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards
 
Estimated Future Payouts
Under Equity Incentive
Plan Awards
 
All
Other
Stock
Awards:
Number
of
Shares
of Stock
or Units
(#)(2)
 
All Other
Option
Awards:
Number of
Securities
Underlying
Options (#)
 
Exercise
or Base
Price of
Option
Awards
($/Sh)
 
Grant
Date
Fair
Value of
Stock
and
Option
Awards
($)(7)
 
Threshold
($)
 
Target
($)
 
Maximum
($)
 
Threshold
(#)
 
Target
(#)
 
Maximum
(#)
 
Melissa Smith
 
STIP
 
-
 
-
 
$
510,731

 
$
1,021,461

 
$
2,042,922

 
-

 
-

 
-

 
-

 
-

 
-

 
-

 
RSU(2)
 
3/15/2018
 
3/5/2018
 
-

 
-

 
-

 
-

 
-

 
-

 
3,412

 
-

 
-

 
$
539,881

 
 
PSU(4)
 
3/15/2018
 
3/5/2018
 
-

 
-

 
-

 
6,826

 
13,651

 
27,302

 
-

 
-

 
-

 
$
2,159,998

 
 
NQ(6)
 
3/15/2018
 
3/5/2018
 
-

 
-

 
-

 
-

 
-

 
-

 
-

 
17,555

 
$
158.23

 
$
899,992

Roberto Simon
 
STIP
 
-
 
-
 
$
187,500

 
$
375,000

 
$
750,000

 
-

 
-

 
-

 
-

 
-

 
-

 
-

 
RSU(2)
 
3/15/2018
 
3/5/2018
 
-

 
-

 
-

 
-

 
-

 
-

 
1,579

 
-

 
-

 
$
249,845

 
 
PSU(4)
 
3/15/2018
 
3/5/2018
 
-

 
-

 
-

 
2,370

 
4,739

 
9,478

 
-

 
-

 
-

 
$
749,852

 
 
NQ(6)
 
3/15/2018
 
3/5/2018
 
-

 
-

 
-

 
-

 
-

 
-

 
-

 
4,876

 
$
158.23

 
$
249,978

Scott Phillips
 
STIP
 
-
 
-
 
$
166,250

 
$
332,500

 
$
665,000

 
-

 
-

 
-

 
-

 
-

 
-

 
 -

 
RSU(2)
 
3/15/2018
 
3/5/2018
 
-

 
-

 
-

 
-

 
-

 
-

 
1,579

 
-

 
-

 
$
249,845

 
 
PSU(4)
 
3/15/2018
 
3/5/2018
 
-

 
-

 
-

 
2,370

 
4,739

 
9,478

 
-

 
-

 
-

 
$
749,852

 
 
NQ(6)
 
3/15/2018
 
3/5/2018
 
-

 
-

 
-

 
-

 
-

 
-

 
-

 
4,876

 
$
158.23

 
$
249,978

Melanie Tinto
 
STIP
 
-
 
-
 
$
90,865

 
$
181,731

 
$
363,462

 
-

 
-

 
-

 
-

 
-

 
-

 
 -

 
RSU(2)
 
3/15/2018
 
3/5/2018
 
-

 
-

 
-

 
-

 
-

 
-

 
568

 
-

 
-

 
$
89,875

 
 
RSU(3)
 
3/15/2018
 
3/5/2018
 
-

 
-

 
-

 
-

 
-

 
-

 
1,895

 
-

 
-

 
$
299,846

 
 
PSU(4)
 
3/15/2018
 
3/5/2018
 
-

 
-

 
-

 
853

 
1,706

 
3,412

 
-

 
-

 
-

 
$
269,940

 
 
PSU(5)
 
3/15/2018
 
3/5/2018
 
-

 
-

 
-

 
1,264

 
2,527

 
5,054

 
-

 
-

 
-

 
$
399,847

 
 
NQ(6)
 
3/15/2018
 
3/5/2018
 
-

 
-

 
-

 
-

 
-

 
-

 
-

 
1,755

 
$
158.23

 
$
89,974

Jeffrey Young
 
STIP
 
-
 
-
 
$
150,750

 
$
301,500

 
$
603,000

 
-

 
-

 
-

 
-

 
-

 
-

 
 -

 
RSU(2)
 
3/15/2018
 
3/5/2018
 
-

 
-

 
-

 
-

 
-

 
-

 
758

 
-

 
-

 
$
119,938

 
 
PSU(4)
 
3/15/2018
 
3/5/2018
 
-

 
-

 
-

 
1,138

 
2,275

 
4,550

 
-

 
-

 
-

 
$
359,973

 
 
NQ(6)
 
3/15/2018
 
3/5/2018
 
-

 
-

 
-

 
-

 
-

 
-

 
-

 
2,340

 
$
158.23

 
$
119,965

(1)
All equity and cash-based awards are granted under the 2010 Equity and Incentive Plan.
(2)
RSUs granted on March 15, 2018 vest over three years at a rate of one third of the total award per year on each anniversary of the grant date. The number of RSUs received by each named executive officer was determined by dividing the total award amount granted by the fair market value of our common stock on the date of grant.
(3)
Represents RSUs granted to Ms. Tinto on March 15, 2018 as part of a new hire award. The award will vest over three years at a rate of one third of the total award per year, on each anniversary of the grant date. The number of RSUs received by Ms. Tinto was determined by dividing the total award amount granted by the fair market value of our common stock on the date of grant.
(4)
PSUs granted on March 15, 2018 under the 2018 LTIP may convert to RSUs based on the achievement of predetermined performance goals for the Company’s Compensation Adjusted Net Income Earnings Per Share and Non-Fuel Sensitive Revenue over 2018, 2019 and 2020. Once converted to RSUs, these vest in full on the third anniversary of the grant date.
(5)
Represents PSUs granted to Ms. Tinto on March 15, 2018 as part of a new hire award. The PSUs granted may convert to RSUs based on the achievement of predetermined performance goals for the Company’s Compensation Adjusted Net Income Earnings Per Share and Non-Fuel Sensitive Revenue measured as of December 31, 2019. Once converted to RSUs, these vest in full on the second anniversary of the grant date.
(6)
Non-qualified stock options (“NQ”) granted on March 15, 2018 vest over three years at a rate of one third of the total award per year beginning on each anniversary of the grant date. The number of non-qualified stock options received by each named executive officer was determined by dividing the total award amount granted by the Black-Scholes calculated value on the date of grant.
(7)
Represents the aggregate grant date fair value of option awards calculated in accordance with FASB ASC Topic 718.


39

Table of Contents


OUTSTANDING EQUITY AWARDS AT 2018 FISCAL YEAR END
The following table represents stock options and unvested stock units held by each of the named executive officers as of December 31, 2018.
 
 
 
 
 
Option Awards
 
Stock Awards
Name
 
Option
Grant Date
 
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
 
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable(1)
 
Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options (#)(2)
 
Option
Exercise
Price
($)
 
Option
Expiration
Date
 
Number
of
Shares
or Units
of Stock
That
Have
Not
Vested
(#)(3)
 
Market
Value of
Shares or
Units of
Stock
That
Have Not
Vested
($)(4)
 
Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
(#)(5)
 
Equity
Incentive
Plan
Awards
Market or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
($)
Melissa Smith
 
3/15/2015
 
13,000

 
-

 
-

 
$
103.75

 
3/15/2025
 
27,043

 
$
3,787,643

 
65,034

 
$
9,108,662

 
3/15/2016
 
16,095

 
8,073

 
-

 
$
77.20

 
3/15/2026
 
-

 
-

 
-

 
-

 
 
3/20/2017
 
7,721

 
15,466

 
-

 
$
104.95

 
3/20/2027
 
-

 
-

 
-

 
-

 
 
5/10/2017
 
-

 
-

 
174,272

 
$
99.69

 
5/10/2027
 
-

 
-

 
-

 
-

 
 
3/15/2018
 
-

 
17,555

 
-

 
$
158.23

 
3/15/2028
 
-

 
-

 
-

 
-

Roberto Simon
 
3/15/2016
 
5,095

 
2,556

 
-

 
$
77.20

 
3/15/2026
 
17,090

 
$
2,393,625

 
25,484

 
$
3,569,289