Thomas W. Warsop III
ACI WORLDWIDEAbout Thomas W. Warsop III
Thomas W. Warsop III, age 58, is President and CEO of ACI Worldwide and has served on ACI’s board since 2015; he previously served as non‑executive Chair from June 2022 to November 2022 . His credentials span payments and financial services technology, executive leadership, financial management, innovation, risk/regulatory and international experience, with senior roles at Fiserv and Electronic Data Systems and multiple CEO and executive chair posts . ACI’s 2024 STIP paid out 155.03% of target based on Adjusted EBITDA of $466.8 million and Revenue Net of Interchange of $1,130.4 million; his individual STIP payout was $1,162,725 (100% target bonus of $750,000) . Long‑term PSUs emphasize Gross Revenue Growth over three years with an adjusted EBITDA gate and a ±20% rTSR multiplier versus the S&P SmallCap 600 Index; CEO awards are 65% PSUs / 35% RSUs .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| The Warranty Group, Inc. | President & CEO | 2012–2017 | Led insurance/services provider; senior P&L leadership . |
| York Risk Services Group | Executive Chairman | Jun 2017–Jan 2020 | Oversaw integrated insurance/managed care solutions; portfolio leadership . |
| One Call Care Management | CEO; later Executive Chairman | Feb 2020–May 2022; May–Dec 2022 | Led workers’ comp ancillary services and cost containment platform . |
| Hananui, LLC | CEO | Since Jan 2017 | Strategic consulting leadership . |
| Fiserv, Inc. | Group President and various management roles | 2007–2012 | Ran major business lines in financial tech; operations and growth . |
| Electronic Data Systems (EDS) | Various capacities incl. President BPO APAC, VP UK, VP Global Financial Services | 17 years | Global operations leadership across geographies and financial services . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Altus Group | Director | Not disclosed | Asset and fund intelligence provider for commercial real estate; industry adjacency . |
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | $750,000 | $750,000 |
| Target Bonus (% of Salary) | 100% | 100% |
Performance Compensation
Short‑Term Incentive Plan (STIP) – 2024 Design and Outcome
| Metric | Weighting | 2024 Actual | Goal Attainment % | Component Payout % | Notes |
|---|---|---|---|---|---|
| Adjusted EBITDA | 40% | $466.8 million | 110.22% | 200.00% | Based on budgeted FX for STIP calculations . |
| Revenue Net of Interchange Growth | 60% | $1,130.4 million | 100.75% | 125.04% | Based on budgeted FX for STIP calculations . |
| Overall STIP Payout | — | — | — | 155.03% of target | No individual modifiers for NEOs . |
| CEO Payout ($) | — | — | — | $1,162,725 | Target bonus $750,000 . |
Long‑Term Incentive Plan (LTIP) – Structure and 2024 CEO Grants
| Component | Grant Date | Target Shares | Performance Period | Metric | Vesting |
|---|---|---|---|---|---|
| PSUs (2024 LTIP) | 03/04/2024 | 172,981 | Mar 1, 2024 – Feb 28, 2027 | Gross Revenue Growth (100%), adjusted EBITDA gate; rTSR ±20% vs S&P SmallCap 600 | 3‑year cliff (pays after period) . |
| PSUs (2023 Tranche 2 set in 2024) | 02/23/2024 | 38,112 | May 11, 2023 – Feb 28, 2026 | Financial metrics + rTSR vs peer index | Pays after period . |
| RSUs | 03/04/2024 | 93,143 | — | Time‑based | CEO: equal annual installments over 3 years . |
2024 annual equity target values for CEO: PSUs $5,525,000 and RSUs $2,975,000 (aggregate $8,500,000; CEO weighting 65% PSUs / 35% RSUs) .
Multi‑Year Compensation (Summary Compensation Table)
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | $577,500 | $2,062,500 | $750,000 |
| Bonus ($) | $0 | $325,000 | $0 |
| Stock Awards ($) | $0 | $2,308,220 | $10,228,643 |
| Non‑Equity Incentive ($) | $0 | $529,870 | $1,162,725 |
| All Other Compensation ($) | $108 | $6,088 | $11,052 |
| Total ($) | $577,608 | $5,231,678 | $12,152,420 |
Pay‑versus‑performance: “Compensation Actually Paid” to CEO (PEO 1) for 2024 was $26,172,236 (reconciliation provided) .
Equity Ownership & Alignment
Beneficial Ownership (as of March 31, 2025)
| Holder | Shares Directly Owned | Shares Acquirable Within 60 Days | Total Beneficial | % of Shares Outstanding |
|---|---|---|---|---|
| Thomas W. Warsop III | 151,890 | 0 | 151,890 | <1% |
• Stock ownership guidelines: CEO must hold stock equal to 6× base salary; executives have 5 years to achieve compliance. Company prohibits hedging and pledging; continuing NEOs either meet guidelines or are within the compliance window .
• 2024 vesting/activity: Warsop had 20,522 shares vested from stock awards; no option exercises .
Outstanding Equity Awards (12/31/2024)
| Award Type | Grant Date | Unvested/Unearned Shares (#) | Market/Payout Value ($) |
|---|---|---|---|
| RSUs | 03/04/2024 | 93,143 | $4,835,053 (at $51.91 close) |
| RSUs | 06/01/2023 | 41,044 | $2,130,594 |
| PSUs (2024 LTIP) | 03/04/2024 | 172,981 (on‑target) | $8,979,444 |
| PSUs (2023 Tranche 2 set in 2024) | 02/23/2024 | 38,112 (on‑target) | $1,978,394 |
| PSUs (2023 Tranche 2 second entry) | 02/23/2024 | 38,112 (on‑target) | $1,978,394 |
Notes: CEO RSUs vest annually over 3 years; PSUs vest after performance period ends (2027 for 2024 grant; 2026 for 2023 tranche) . Market values use $51.91 closing price on 12/31/2024 .
Employment Terms
Key Agreements and Triggers
• CEO Severance Agreement (effective June 1, 2023; three‑year term): 1.5× salary+target bonus cash lump sum; ~18 months benefits continuation; pro‑rata vesting of RSUs and PSUs based on months of service; Good Reason definitions include refusal to nominate him as director; confidentiality and 18‑month non‑compete/non‑solicit; release required .
• Change‑in‑Control (CIC) Agreement: double‑trigger severance of 3× salary+target bonus; 3 years benefits; $50,000 outplacement; full acceleration/vesting of stock‑based awards on qualifying termination within CIC window; no excise tax gross‑ups (“best results” cutback); 1‑year non‑compete/non‑solicit; rabbi trust funding provision; strong 409A compliance .
Potential Payments (as of 12/31/2024, illustrative scenarios)
| Scenario | Cash Severance | Bonus Payment | RSUs | PSUs | Benefits Continuation | Outplacement | Total |
|---|---|---|---|---|---|---|---|
| By Executive for Good Reason | $2,250,000 | $0 | $2,333,243 | $6,121,345 | $32,030 | $0 | $10,736,619 |
| By ACI Without Cause | $2,250,000 | $0 | $2,333,243 | $6,121,345 | $32,030 | $10,275 | $10,746,894 |
| Death | $0 | $0 | $6,965,547 | $6,121,345 | $0 | $0 | $13,086,993 |
| Disability | $0 | $0 | $6,965,547 | $6,121,345 | $0 | $0 | $13,086,993 |
| Involuntary or Good Reason After CIC | $4,500,000 | $750,000 | $6,965,547 | $14,914,625 | $63,302 | $50,000 | $27,243,575 |
Board Governance
• Board service: Director since 2015; currently CEO and director; not independent (all other nominees are independent) .
• Committee roles: None; committee membership table lists independent directors across Audit, Compensation, and Corporate Governance committees .
• Board leadership: Non‑executive Chairman (Adalio T. Sanchez); CEO and Chair roles are separated .
• Attendance: Directors attended at least 75% of Board and committee meetings in 2024 .
• Governance features: Majority voting standard; stockholder alignment includes proxy access; prohibition of short sales, derivatives, hedging and pledging by directors and executives; clawback policies adopted in 2023 and legacy recoupment in place .
• Compensation Committee independence and charter scope (includes ESG integration into compensation): committee met 5 times in 2024; members all independent .
Director Compensation (for independent directors; CEO is not independent)
• Annual cash base retainer $68,000; Chair retainers: Board $100,000; Audit Chair $30,000; Compensation Chair $20,000; Governance Chair $15,000; annual director equity target ~$250,000 (RSUs; 1‑year vesting or next annual meeting/change in control; death/disability acceleration) .
• 2024 director grants included pro‑rated RSUs (1,944) for new directors and annual 7,194 RSUs grants (June 4, 2024) .
Compensation Peer Group and Say‑on‑Pay
• Peer group methodology: software/IT services peers; size filters by revenue and market cap; revised in 2023 for 2024 decisions. Changes included removing CDK Global, Nuance, Vonage, Zendesk (acquired) and Ebix; adding Affirm, BILL, CCC Intelligent Solutions, Marqeta, Procore .
• Say‑on‑pay 2024: 91.9% approval; 5‑year history consistently >90%; no changes deemed necessary based on feedback .
Performance Metrics Used in Pay
• Company‑selected measures linked to pay include Adjusted EBITDA, Revenue Net of Interchange Growth, Net Adjusted EBITDA Margin, Gross Revenue, and Relative Total Shareholder Return; PSUs shifted to Gross Revenue as company‑selected measure in 2024, with adjusted EBITDA gate and rTSR multiplier .
Investment Implications
• Alignment: Heavy weighting to PSUs tied to Gross Revenue Growth with an EBITDA gate and rTSR modifier increases sensitivity of CEO realized pay to multi‑year execution and market performance; CEO’s 2024 equity target was $8.5 million with 65% PSUs .
• Near‑term supply: RSUs vest annually through 2026 for CEO grants (June 2023 and March 2024); PSUs from 2023 tranche and 2024 LTIP vest at end of performance periods (2026 and 2027), limiting near‑term sellable supply and deferring realizations to long‑term outcomes .
• Change‑in‑control economics: 3× salary+target bonus and full equity acceleration under double‑trigger CIC could be viewed as retention and transaction alignment, but may create perception of elevated parachute risk; no tax gross‑ups mitigate shareholder concerns .
• Governance risk mitigants: Separation of Chair/CEO, independent committees, majority voting, anti‑hedging/pledging, and robust clawbacks reduce independence and conflict concerns from dual CEO/director status .
• Pay‑for‑performance execution: 2024 STIP payout at 155.03% signals strong performance versus annual targets; continued tilt to PSUs emphasizes sustained revenue growth and market‑relative returns, which can be interpreted as constructive for long‑term shareholder alignment .
Appendix: Additional Reference Tables
CEO Grants of Plan‑Based Awards (2024)
| Award | Threshold | Target | Maximum | Grant Date | Grant Date Fair Value ($) |
|---|---|---|---|---|---|
| STIP (Cash) | $187,500 | $750,000 | $1,500,000 | — | — |
| RSUs | — | — | — | 03/04/2024 | $2,974,987 |
| PSUs (Tranche 2 of 2023) | 9,528 | 38,112 | 76,224 | 02/23/2024 | $1,273,703 |
| PSUs (2024 LTIP) | 43,245 | 172,981 | 345,962 | 03/04/2024 | $5,979,953 |
Compensation Actually Paid Reconciliation (PEO 1; 2024)
| Item | Amount ($) |
|---|---|
| Summary Compensation Table – Total | $12,152,420 |
| Less grant date FV of stock awards/options | ($10,228,643) |
| Plus FV at FY‑end of current‑year awards | $22,043,584 |
| +/- Change in FV of prior‑year awards | $2,093,851 |
| Plus FV at vesting of current‑year awards | $0 |
| +/- Change in FV from PY‑end to vest date for prior‑year awards | $111,024 |
| Equals Compensation Actually Paid | $26,172,236 |
Governance Practices Snapshot
• Annual elections; majority voting; independent committees; >=75% attendance; proxy access .
• Prohibitions: short sales, derivatives, hedging, pledging; option repricing not permitted .
• Clawback policies (NASDAQ‑compliant and legacy misconduct recoupment) .
CEO Appointment Terms (8‑K Summary)
• Base salary $750,000; on‑target bonus 100% with 0–200% payout band; 2023 bonus pro‑rated; initial equity $4.0 million (2023 LTIP) and $8.0 million (2024 LTIP) at 35% RSUs / 65% PSUs; Severance and CIC agreements executed .
Board Service History and Dual‑Role Implications
• Warsop has served as an ACI director since 2015 and currently serves as CEO and director; he is not independent, while the non‑executive Chair and other nominees are independent, mitigating CEO/Chair concentration risk .
• He holds no committee memberships, consistent with common governance practice to keep management directors off key oversight committees; Compensation, Audit, and Corporate Governance committees are fully independent .
Employment Terms (Restrictive Covenants)
• CEO Severance Agreement: 18‑month non‑compete/non‑solicit; confidentiality; clawback linkage; Good Reason includes refusal to nominate as director .
• CIC Agreement: 1‑year non‑compete/non‑solicit; equity acceleration on qualifying termination; 280G “best results” cutback .
Notes on Non‑GAAP metrics used in compensation
Revenue Net of Interchange and Adjusted EBITDA used in STIP/PSUs employ budgeted FX rates; reconciliations to GAAP are in Appendix A of the proxy .