Adtalem Global Education Inc.
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DEF 14A 1 atge3955541-def14a.htm DEFINITIVE PROXY STATEMENT

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )

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Adtalem Global Education Inc.

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About Us

#WEAREADTALEM

Adtalem Global Education is a workforce solutions provider and the parent organization of American University of the Caribbean School of Medicine, Association of Certified Anti-Money Laundering Specialists, Becker Professional Education, Chamberlain University, EduPristine, OnCourse Learning, Ross University School of Medicine, Ross University School of Veterinary Medicine, and Walden University.

STUDENT FOCUSED

Empowering individuals is the meaning behind our name – Adtalem Global Education. Adtalem (pronunciation: ad TAL em) is Latin for “To Empower.”

           

MISSION

VISION

PURPOSE

                    
                    
                    

We provide global
access to knowledge
that transforms lives and
enables careers.

To create a dynamic global
community of life-long learners
who improve the world.

We empower students,
members and colleagues to
achieve their goals, find success,
and make inspiring contributions
to our global community.


WE ARE
9
institutions and companies

   

MORE THAN
10,000
employees

 

WITH A PRESENCE IN
209
territories and countries*

WITH
27
operating campuses

As of September 1, 2021.

* Presence indicates employees, students, members or offices.


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Message from our Executive Chairman of the Board

October 8, 2021

To Our Shareholders:

Fiscal year 2021 was a year of significant progress and impact as we strengthened our position as a leading workforce solutions provider and healthcare educator. It is clear from our solid performance, robust educational offerings and partnerships, that our ability to truly make a difference in the lives of our students, add value for our employer partners and positively impact the communities we serve — remains strong and in demand.

All of this is possible because of our dedicated colleagues around the world. When the world sheltered from the pandemic, our organizational instincts — resiliency, responsiveness and change agility — carried us forward in an unwavering pursuit of our mission. These key cultural qualities enable us to thrive amidst ongoing changes in the world.

Despite lingering headwinds from COVID-19, our performance for the full year was in line with our outlook. Our medical and healthcare institutions performed well, as student outcomes continue to drive demand for our programs, and our financial services businesses continued to capitalize on our leading market positions and previous investments to drive operating performance.

Most notably, just after the close of the fiscal year, we finalized our acquisition of Walden University, which represented the culmination of a multi-year strategy to reposition the business as a leading healthcare education provider with unmatched scale and breadth. After several years of streamlining our portfolio through the divestiture of non-core assets, the Walden acquisition further positions Adtalem as a more strategically focused business with a greater emphasis on the rapidly growing healthcare sector.

As the need for more physicians and nurses continues to rise and improving health equity remains a global priority, Adtalem is uniquely positioned to scale sustainable workforce solutions. By engaging and supporting students from historically underrepresented groups and offering learning modalities that meet learners wherever they may be in life, our organization is well equipped to meet the challenges and demands for these critical workforce sectors — and with industry-leading results.

Proudly, across our two medical institutions, we graduated more than 1,000 physicians; first-time residency match rates were 92% for first-time eligible 2020-2021 graduates; more than 70% of our 2019-2020 medical graduates chose to enter critical roles in primary care across all 50 U.S. states and Puerto Rico; and Chamberlain’s first-time NCLEX pass rates were over 91%. These outcomes demonstrate that our dedication has paid off, and we remain committed to building a pipeline of highly qualified talent to solve complex issues in the healthcare industry.

In 2021, 84% of the total student population in our five degree-conferring institutions identified as female and 48% as a minority. Adtalem’s medical institutions graduate more than 100 Black/African American medical students annually, more than any other U.S. medical school. This level of diversity is imperative to the workforce pipeline and to our ability to increase health equity across the communities we serve.

At Chamberlain, we expanded our physical footprint with a new campus in Irwindale, California and built robust employer partnerships to make education more accessible for all. Chamberlain University launched an innovative Called-to-Care Scholars Program with LCMC Health in Louisiana. This program is the first-of-its-kind tuition-free nursing program — funded by LCMC in exchange for employment after graduation and passing the NCLEX. The program offers a targeted approach to strengthening the pipeline of nurses and our increasing scale gives us the ability to service more partnerships like this in the future, a perfect example of our workforce solutions provider strategy in action.

With a concentration of online graduate-level healthcare programs that are complementary to Adtalem’s core offerings, Walden significantly expands our breadth and best-in-class modalities to further enable us to reimagine the future of healthcare education at a critical time in history. Adtalem’s family of institutions have nearly 140,000 total student enrollments, with 82% of students in online learning modalities. The addition of Walden also delivers on our commitment to provide greater access to education, particularly for students of diverse backgrounds and those from underrepresented demographics.

2021 Proxy Statement       1


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Message from our Executive Chairman of the Board

In 2021, we saw continued strong revenue growth in our Financial Services segment, with double-digit increases driven by our ability to capture the demand generated by strong secular tailwinds. More broadly in the segment, we are establishing prominent growth vectors to enable expansion and diversification into new markets, and investments in new offerings are positioning this segment for long-term growth.

With our focus shifting firmly towards the healthcare sector, we announced in August that we are exploring strategic alternatives for our Financial Services businesses. This is a natural progression of our workforce solutions strategy and is consistent with our long-standing commitment to delivering long-term shareholder value.

After such a pivotal year and with the need to keep strong momentum as we continue with our next phase of growth, I determined that the time was right for me to transition from my role as chairman and CEO to executive chairman of Adtalem’s board of directors. Steve Beard, previously our chief operating officer, succeeded me as president and CEO and joined our board. This decision followed a thorough board-led succession planning process, with the board unanimously agreeing that Steve is the right choice to provide the continuity and strategic insight needed to lead us through this next phase of our growth.

Steve has played a critical role in refining our leading workforce solutions strategy and repositioning our Financial Services segment for long-term, profitable growth. He has been instrumental in our acquisition of Walden and in the divestitures of DeVry University, Carrington College and Adtalem Brazil. There is no leader better suited than Steve to take us forward with strong momentum as we continue to amplify our social impact, expand access to high-quality education and unlock even more possibilities for all.

Over the past five years during my tenure as CEO, we have made incredible progress. I am extremely proud and grateful for everyone at Adtalem; for everything we have accomplished and for supporting the repositioning of the company for growth. As executive chairman, I remain actively involved in our mission and will continue to partner with Steve, the board and our leadership team to drive results and superior student outcomes.

Together, the strategic actions we took this year represent the beginning of the next chapter for Adtalem. A chapter in which we will continue our positive momentum to expand as a leading workforce solutions provider in a way that will enable us to drive even greater impact for our students, employer partners, communities and shareholders.

We are energized by the even greater role Adtalem plays in solving these worker shortages through the increased scale and differentiated capabilities made possible by our acquisition of Walden. We hope you join us in this excitement for our next chapter, and on behalf of the entire Adtalem Global Education team and Board of Directors, we thank you for your continued confidence in our mission.


Lisa W. Wardell
Executive Chairman

2       Adtalem Global Education Inc.


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Notice of Annual Meeting of Shareholders

DATE AND TIME
November 10, 2021
8:30 a.m. Central Standard Time

Online check-in will be available beginning at 8:15 a.m. Central Standard Time. Please allow ample time for the online check-in process.

PLACE
The Annual Meeting will be held entirely online at: www.virtualshareholdermeeting.com/ATGE2021.

RECORD DATE
September 24, 2021


ITEMS OF BUSINESS
Board Voting
Recommendation
Proposal No. 1: Elect the directors named in the attached Proxy Statement to serve until the 2022 Annual Meeting of Shareholders FOR each
director nominee
Proposal No. 2: Ratify selection of PricewaterhouseCoopers LLP as independent registered public accounting firm FOR
Proposal No. 3: Say-on-pay: Advisory vote to approve the compensation of our named executive officers FOR

Shareholders will also consider such other business as may come properly before the Annual Meeting or any adjournment thereof.

To participate in the 2021 Annual Meeting, you will need the 16-digit control number included on your proxy card or in the instructions that accompanied your proxy materials.

This notice and Proxy Statement, voting instructions, and Adtalem Global Education Inc.’s 2021 Annual Report to Shareholders are being mailed to shareholders beginning on or about October 8, 2021.


Douglas G. Beck
Senior Vice President, General Counsel and Corporate Secretary

REVIEW YOUR PROXY STATEMENT AND VOTE IN ONE OF FOUR WAYS:

                 
VIA THE INTERNET
Visit the web site listed on your proxy card
BY TELEPHONE
Call the telephone number on your proxy card
BY MAIL
Sign, date, and return your proxy card in the enclosed envelope
VIRTUALLY
Attend the Annual Meeting online at www.virtualshareholdermeeting.com/ ATGE2021.

Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to Be Held on November 10, 2021. Our Proxy Statement and the Adtalem Global Education Inc. Annual Report for 2021 are available online at www.proxyvote.com or at our investor relations website, http://investors.adtalem.com/.

2021 Proxy Statement       3


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Proxy Summary

This summary highlights selected information about the items to be voted on at the annual meeting. It does not contain all of the information that you should consider in deciding how to vote. You should read the entire proxy statement carefully before voting.

OUR BOARD OF DIRECTORS

Director Nominees

Diverse mix of backgrounds, current and former CEOs, marketing and medical professionals, and a former finance executive at a leading global company.

Director
Since
Other Public
Company Boards
      Committee Memberships
            Name and Principal Occupation       Age                   ACA AUD COM ER NG
Stephen W. Beard
President and CEO
Adtalem Global Education Inc.
50 2021
William W. Burke LEAD INDEPENDENT DIRECTOR
President and Founder,
Austin Highlands Advisors, LLC
62 2017 2
Charles DeShazer INDEPENDENT
Director, Clinicals Products
Google Health
62 2021
Mayur Gupta1 INDEPENDENT
Chief Marketing & Strategy Officer
Gannett Co., Inc.
44 2021
Donna J. Hrinak INDEPENDENT
Senior Vice President,
Corporate Affairs,
Royal Caribbean Group
70 2018
Georgette Kiser INDEPENDENT
Operating Executive,
The Carlyle Group
53 2018 3
Lyle Logan INDEPENDENT
Executive Vice President
and Managing Director,
The Northern Trust Company
62 2007 1
Michael W. Malafronte INDEPENDENT
Former Managing Partner,
International Value
Advisers, LLC and President, IVA Funds
47 2016
Sharon L. O’Keefe INDEPENDENT
Retired President,
University of Chicago Medical Center
69 2020 1
Kenneth J. Phelan INDEPENDENT
Former Chief Risk Officer.,
U.S. Department of Treasury
62 2020 1
Lisa W. Wardell2
Executive Chairman of the Board
Adtalem Global Education Inc.
52 2008 1
Academic Quality
Committee
      Audit and Finance
Committee
      Compensation
Committee
      External Relations
Committee
      Nominating &
Governance Committee
      Audit Committee
Financial Expert
      Committee
Chair
1 Mr. Gupta will join the Academic Quality and External Relations committees effective November 9, 2021.
2 Ms. Wardell is an ex officio member of each committee.

4       Adtalem Global Education Inc.


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Proxy Summary

Board Highlights

BOARD INDEPENDENCE

      81.8%
of our current directors are independent, including our lead independent director (“Lead Independent Director”), each of our five committees are composed entirely of independent directors, and our CEO is the only member of management who serves as a director

TENURE

AGE

BOARD DIVERSITY

SKILLS AND EXPERIENCE



2021 Proxy Statement       5


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Proxy Summary

CORPORATE GOVERNANCE HIGHLIGHTS

Shareholder Engagement

We conduct regular outreach and engagement with our shareholders and value their insight and feedback.

OUR OUTREACH
We reached out to our shareholders representing approximately 80% of shares owned.

Ongoing Enhancements

Our Board continually monitors best practices in corporate governance and, consistent with feedback from shareholders and other stakeholders, has taken the following actions in recent years:

 

2021

     
   
Continued to refresh our Board by adding three new directors including our new CEO and directors with significant expertise in healthcare and digital marketing
     
 

2020

     
   
Refreshed our Board by adding two new directors with significant expertise in healthcare and financial services
Amended the charter of our External Relations Committee to clarify its responsibilities for oversight of our sustainability strategy, including environmental and social policies
     
 

2019

 
   
Appointed a Lead Independent Director when our CEO was appointed as our Chairman of the Board
Enhanced our proxy statement to focus on disclosures in key areas of investor interest
Increased stock ownership requirements for our Chief Operating Officer and other executive officers
     
 

2018

 
   
Broadened our shareholder outreach program and increased Board involvement
     
 

2017

 
   
Adopted proxy access (3%, 3 years, group up to 20 shareholders, greater of 2 directors or 20%)
Amended By-Laws to provide for majority voting with plurality carve out for contested elections
Approved Director resignation requirement upon change of principal job responsibilities
Added a Lead Independent Director requirement when our Chairman of the Board is not independent
Adopted outside Board service limits

6       Adtalem Global Education Inc.


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Proxy Summary

Ongoing Best Practices

    BOARD COMMITTEES
   
We have five Board committees – Academic Quality, Audit and Finance, Compensation, External Relations, and Nominating & Governance, each of which typically meets at least four times per year
The Chair of each committee, in consultation with the committee members, determines the frequency and length of committee meetings
Our Board and each of its committees are authorized to retain independent advisors at Adtalem’s expense

    DIRECTOR STOCK OWNERSHIP
   
60% of our non-employee directors’ annual compensation (excluding fees for other additional roles) is in the form of restricted stock units (“RSUs”)
Our non-employee directors (other than those who are affiliated with our shareholders) are subject to a policy requiring their ownership of shares with a value equal to or in excess of three times their annual retainer

    CONTINUOUS IMPROVEMENT
   
New directors receive a tailored, two-day, live training program about Adtalem and its institutions from management
Our directors are encouraged to participate in director-oriented training programs
The Board annually undergoes a self-assessment process to critically evaluate its performance at a committee and Board level

    COMMUNICATION
   
Our Board promotes open and frank discussions with senior management
Our directors have access to all members of management

2021 Proxy Statement       7


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Proxy Summary

EXECUTIVE COMPENSATION HIGHLIGHTS

Strong linkage of pay to individual, institutional, and financial performance

Balanced compensation program aligning performance to interests of shareholders, students, and other stakeholders


Our Compensation Framework

2021 COMPENSATION SNAPSHOT

      Objective Time
Horizon
Performance
Measures
Additional Explanation
Salary
(cash)
Reflect experience, market competition and scope of responsibilities Reviewed Annually Assessment of performance in prior year. Given the challenges presented by the pandemic and in response to the unprecedented and evolving business landscape, we took a conservative approach and did not increase salaries for executives during fiscal year 2021.
Represents 14% and 28% of Total Direct Compensation for Ms. Wardell and other NEOs (on average), respectively.
 
 

Annual
Incentive
(cash)

MIP

Reward achievement of short-term operational business priorities

1 year

Revenue*
Adjusted Earnings Per Share*
Individual Goals
Represents 15% and 20% of Total Direct Compensation for Ms. Wardell and other NEOs (on average), respectively.
 
 

Long Term
Incentive
(equity)

Stock Options

Reward stock price growth and retain key talent

4 year ratable

Stock price growth
Represents 33.3% of NEO LTI granted in FY21

RSUs

Align interests of management and shareholders, and retain key talent

Represents 33.3% of NEO LTI granted in FY21

ROIC PSUs

Reward achievement of multi-year financial goals, align interests of management and shareholders, and retain key talent

3 year cliff

ROIC
Represents 33.3% of NEO LTI granted in FY21
FCF PSUs


FCF per share

* A portion of the MIP payout for executive leadership of business segments and business units is also based on the revenue and operating income at such executive’s business segment or business unit.

8       Adtalem Global Education Inc.


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Proxy Summary

SUSTAINABILITY AND COMMUNITY RELATIONS

Adtalem is committed to a holistic approach to our communities, providing quality learning and working opportunities, caring for the places where we operate, and conducting our business in a transparent and responsible manner. We advanced our environmental, social, and governance (“ESG”) strategy during fiscal year 2021 and remained steadfastly focused on our overarching philosophy of stewardship.

  ADTALEM GLOBAL EDUCATION SUSTAINABILITY COMMITMENT  
    
  

Adtalem Global Education operates in a sustainable, ethical and responsible manner as we increase access and equity in education and workforce training. Our solutions empower students and members to help address workforce needs in the healthcare and financial services industries. Adtalem is committed to protecting the environment, confronting the challenge of climate change, continuously enhancing our diverse and inclusive culture, and investing in the well-being of the communities where we teach, learn and work, globally.

  

Environmental Practices       Social Practices       Governance Practices

In fiscal year 2020 we launched a multi-year environmental initiative and established three strategic goals to define our Energy Conservation Measures and Green House Gas reduction activities through 2024. These initiatives have already resulted in reductions in energy and water usage. Adtalem has also implemented various initiatives to reduce waste and protect the ecosystems surrounding our offices and campuses.

Our TEACH values—Teamwork, Energy, Accountability, Community, and Heart—shape how we work together to fulfill our promise to students, members, and each other. Adtalem has created diversity and inclusion councils and task forces at its healthcare and medical institutions. These taskforces are addressing racism as a public health crisis. During 2021, diversity, equity and inclusion threads were woven into our healthcare institutions’ curriculums and activities. We are committed to continuously reviewing the components of our educational programs, systems and processes to ensure we are addressing systemic bias within our institutions, as well as partnering with organizations that share our values to collectively address these challenges and have an intentional impact on the broader healthcare industry.

Since 2016, under the leadership of Lisa Wardell, our Executive Chairman and former CEO, we have notably increased female and multicultural representation on our Board. We continue to engage in active Board refreshment and added three new directors in 2021 who bring significant healthcare and marketing expertise and deep knowledge of our operations and strategy.

 

Community Investment

Expanding Educational Access

Empower Scholarship Fund

We contribute to the well-being of local communities through support of philanthropic organizations and student, faculty, and employee volunteer efforts. Through corporate giving efforts, Adtalem provided over $354,000 to global community and civic partners in fiscal year 2021. Independent from the corporate giving efforts, the Adtalem Global Education Foundation awarded grants totaling over $893,000.

Adtalem has created sustainable strategies to engage and support students from historically underrepresented groups and our intentional approach continues to yield industry-leading results. In 2021, 84% of the total student population in our four degree-conferring institutions identified as female and 48% as ethnically diverse. Adtalem’s medical institutions graduate more than 100 Black/African American medical students annually, more than any U.S. medical school.

The Empower Scholarship Fund increased its total dollars and number of recipients by awarding $290,500 in scholarships to 111 students, including 32 first-generation college students and 14 single parents. The fund strives to keep education within reach by providing financial support to qualifying students. Established in 2000, the fund provides scholarships (restricted and unrestricted) to current students, especially those with the greatest need who have established a successful academic track record.

2021 Proxy Statement       9


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Proxy Summary

DIVERSITY AND INCLUSION

At Adtalem, we are committed to driving diversity at the top and creating an inclusive culture throughout the organization. To us, diversity and inclusion needs to be intentional to be impactful. We don’t just welcome differences, we celebrate them. In fact, we believe bringing together diverse teams and innovative ideas is the best way to serve our diverse students and members, and we work collaboratively, committed to the idea that inclusion leads to innovation and high performance.

BOARD DATA LEADERSHIP DATA
The composition of our Board reflects our commitment to diversity.

The Adtalem senior leadership team is over 44% diverse when considering gender and ethnicity.

 
   

EMPLOYEE DATA

STUDENT DATA

Our global employee base is predominantly female and includes a strong minority representation.

The student population at our Title IV institutions is similarly diverse in gender and ethnicity.


Please note: Board data is as of October 1, 2021; leadership and employee data is as of October 1, 2021 and represents those who chose to report. Student data is for fall 2021 enrollment at Adtalem’s Title IV institutions.

10       Adtalem Global Education Inc.


Table of Contents

Table of Contents

1       MESSAGE FROM OUR EXECUTIVE CHAIRMAN OF THE BOARD
3 NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
4 PROXY SUMMARY
4 Our Board of Directors
5 Board Highlights
6 Corporate Governance Highlights
8 Executive Compensation Highlights
9 Sustainability and Community Relations
10 Diversity and Inclusion
12 PROPOSAL NO. 1 ELECTION OF DIRECTORS
13 Board Composition
24 Director Nominating Process
24 Board Succession Planning
26 Board Structure and Operations
31 Key Board Responsibilities
35 Board Practices and Policies
36 Director Compensation
38 PROPOSAL NO. 2 RATIFY SELECTION OF PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
38 Selection and Engagement of Independent Registered Public Accounting Firm
38 Pre-Approval Policies
39 Audit Fees and Other Fees
40 Audit and Finance Committee Report
42 PROPOSAL NO. 3 SAY-ON-PAY: ADVISORY VOTE TO APPROVE THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS (“NEOs”)
42 Compensation Discussion & Analysis
61 Compensation Committee Report
62 EXECUTIVE COMPENSATION TABLES
62 2021 Summary Compensation Table
64 2021 Grants of Plan-Based Awards
66 2021 Outstanding Equity Awards at Fiscal Year-End
68 2021 Options Exercises and Stock Vested
68 2021 Nonqualified Deferred Compensation
69 Deferred Compensation Plan
69 2021 Potential Payments Upon Termination or Change-In-Control
72 CEO Pay Ratio
73 VOTING SECURITIES AND PRINCIPAL HOLDERS
73 Equity Compensation Plan Information
73 Security Ownership of Certain Beneficial Owners
74 Security Ownership by Directors and Executive Officers
75 ADDITIONAL INFORMATION
75 Voting Instructions
76 Voting Information
77 Proxy Solicitation
77 Shareholder Proposals for 2022 Annual Meeting
78 Availability of Form 10-K
78 Householding
78 Delinquent Section 16(a) Reports
78 Other Business
A-1 APPENDIX A – SUMMARY OF SPECIAL ITEMS EXCLUDED FOR PERFORMANCE ASSESSMENT

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PROPOSAL NO. 1
Election of Directors

The Board has nominated all of Adtalem’s eleven sitting directors and recommends their re-election, each for a term to expire at the 2022 Annual Meeting. All of the nominees have consented to serve as directors if elected at the Annual Meeting.

It is intended that all shares represented by a proxy in the accompanying form will be voted for the election of each of Stephen W. Beard, William W. Burke, Charles DeShazer, Mayur Gupta, Donna J. Hrinak, Georgette Kiser, Lyle Logan, Michael W. Malafronte, Sharon L. O’Keefe, Kenneth J. Phelan, and Lisa W. Wardell as directors unless otherwise specified in such proxy. A proxy cannot be voted for more than eleven persons. In the event that a nominee becomes unable to serve as a director, the proxy committee (appointed by the Board) will vote for the substitute nominee that the Board designates. The Board has no reason to believe that the nominees will become unavailable for election.

Each nominee for election as a director is listed below, along with a brief statement of his or her current principal occupation, business experience and other information, including directorships in other public companies held as of the date of this Proxy Statement or within the previous five years. Under the heading “Relevant Experience,” we describe briefly the particular experience, qualifications, attributes, or skills that led to the conclusion that these nominees should serve on the Board. As explained below under the caption “Director Nominating Process,” the Nominating & Governance Committee looks at the Board as a whole, attempting to ensure that it possesses the characteristics that the Board believes are important to effective governance.

Approval by Shareholders

The election of each of the eleven nominees for director listed below requires the affirmative vote of a majority of the shares of Common Stock of Adtalem represented at the Annual Meeting. Adtalem maintains a majority voting standard for uncontested elections (where the number of nominees is the same as the number of directors to be elected), so for a nominee to be elected as a member of the Board, the nominee must receive the affirmative vote of a majority of the shares of Common Stock of Adtalem represented at the Annual Meeting. Shareholders may not cumulate their votes in the election of directors. If a nominee for re-election fails to receive the requisite majority vote where the election is uncontested, such director must promptly tender his or her resignation to Adtalem’s Chairman or Adtalem’s General Counsel and Corporate Secretary, subject to acceptance by the Board.

Unless otherwise indicated on the proxy, the shares will be voted FOR each of the nominees identified below.

    The Board of Directors recommends a vote FOR each of the nominees identified below.

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Proposal No. 1 Election of Directors

BOARD COMPOSITION

Director Nominees

Stephen W. Beard, Chief Executive Officer
President and CEO, Adtalem Global Education

Age: 50
Director since: 2021

Career Highlights

Mr. Beard was appointed Adtalem’s President and CEO and a director on our Board in September 2021. Previously, Mr. Beard served as Adtalem’s Chief Operating Officer (COO), responsible for the vision, leadership, and financial performance of Adtalem’s Financial Services vertical. In addition, Mr. Beard led the company’s strategy, corporate development, government and regulatory affairs, investor relations, communications and civic engagement activities and mobilized a variety of operational and corporate initiatives to accelerate Adtalem’s global performance.

Prior to taking on the responsibility of COO in 2019 and responsibility for the Financial Services vertical in 2020, Mr. Beard served as senior vice president, general counsel and corporate secretary in 2018.

Prior to Adtalem, Mr. Beard was executive vice president, chief administrative officer and general counsel of Heidrick & Struggles International, Inc. (NASDAQ:HSII), where he directed global legal operations for the company and oversaw a variety of enterprise-level functions including strategy and corporate development.

Prior to joining Heidrick & Struggles, Mr. Beard was in private practice with Schiff Hardin, LLP in Chicago, where he was a member of the firm’s corporate and securities group, advising public and private companies in mergers and acquisitions, corporate finance and corporate governance matters.

Mr. Beard began his legal career as a law clerk for the Honorable Frank Sullivan, Jr. (ret.), associate justice of the Indiana Supreme Court.

Mr. Beard has been active in a variety of community and civic matters and currently serves on the board of the venture philanthropy fund, A Better Chicago.

Mr. Beard received his bachelor’s degree from the University of Illinois at Urbana-Champaign and his juris doctor degree from the Maurer School of Law at Indiana University.

Relevant Experience

Mr. Beard’s experience as a senior executive and his prior service as Adtalem’s COO and General Counsel give him deep knowledge of Adtalem’s operations and strategy. Mr. Beard’s experience in refining Adtalem’s portfolio strategy, executing the DeVry University, Carrington College and Adtalem Brazil divestitures, and spearheading the acquisition of Walden University-coupled with his success in leading the Financial Services segment-have played an integral role in positioning Adtalem for long-term growth.

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Proposal No. 1 Election of Directors

William W. Burke, Lead Independent Director
President and Founder, Austin Highlands Advisors, LLC

Age: 62
Director since: 2017

Committees:
Audit and Finance (Chair)
Compensation

Career Highlights

Mr. Burke has been a director of Adtalem since January 2017. He has served as our Lead Independent Director since July 2019. Since November 2015, Mr. Burke has served as President of Austin Highlands Advisors, LLC, a provider of corporate advisory services. He served as Executive Vice President & Chief Financial Officer of IDEV Technologies, a peripheral vascular devices company, from November 2009 until the company was acquired by Abbott Laboratories in August 2013. From August 2004 to December 2007, he served as Executive Vice President & Chief Financial Officer of ReAble Therapeutics, a diversified orthopedic device company which was sold to The Blackstone Group in a going private transaction in 2006 and subsequently merged with DJO Incorporated in November 2007. Mr. Burke remained with ReAble Therapeutics until June 2008. From 2001 to 2004, he served as Chief Financial Officer of Cholestech Corporation, a medical diagnostic products company.

Mr. Burke received his bachelor’s degree in Finance from The University of Texas at Austin and an MBA from The Wharton School of the University of Pennsylvania.

Board Service

Mr. Burke has served on numerous public and private company boards including serving as a board chairman and a lead independent director. He has served on the board of Tactile Systems Technology, Inc. (Nasdaq: TCMD) since 2015 and currently serves as Chairman of the Board. Since 2021, he has served on the board of directors and as chair of the audit committee of EQ Health Acquisition Corp. (NYSE:EQHA). He previously served on the board of Invuity, Inc. (acquired by Stryker Corp. in 2018), LDR Holding Corporation (acquired by Zimmer Biomet in July 2016), and Medical Action Industries (acquired by Owens & Minor in October 2014).

Relevant Experience

Mr. Burke’s experience as a senior executive and board member of multiple public companies, and his extensive understanding of financing, acquisition and operating strategy, enhances the Board’s capabilities from both a strategic and governance perspective.

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Proposal No. 1 Election of Directors

Dr. Charles DeShazer, Independent
Director, Clinical Products, Google Health

Age: 62
Director since: 2021

Committees:
Academic Quality
External Relations

Career Highlights

Dr. DeShazer is the Director, Clinical Products for Google Health where he helps lead the design and implementation of an intelligent suite of tools that help healthcare providers deliver better patient care. He previously was the Senior Vice President and Chief Medical Officer of Highmark, Inc., one of the largest insurance organizations in the United States from 2017 to 2021. In this role he oversaw the company’s clinical strategy, overall medical leadership and provided oversight of Highmark Inc.’s strategic direction and processes related to health care quality, efficiency and cost improvement. Additionally, as the CMO for the primary division of Highmark Health, Dr. DeShazer also interacted regularly with the smaller health division, Allegheny Health Network, as well as Penn State Health, a large academic health system governed jointly by Penn State University and Highmark Health through a significant minority ownership investment. Prior to joining Highmark, Dr. DeShazer served as the Chief Quality Officer for BayCare Health System from 2012-2016. From 2010-2012 he served as Vice President, Medical Information, Quality and Transformation for Dean Health System.

Relevant Experience

Dr. DeShazer’s leadership experience across the healthcare services ecosystem, coupled with his background as a board-certified M.D. in internal medicine, assists Adtalem and its Board in executing on the strategy of becoming a leading provider of workforce solutions to the rapidly evolving healthcare industry.

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Proposal No. 1 Election of Directors

Mayur Gupta, Independent
Chief Marketing & Strategy Officer, Gannett Co., Inc.

Age: 44
Director since: 2021

Committees:
Academic Quality (effective November 9, 2021)
External Relations (effective November 9, 2021)

Career Highlights

Mr. Gupta is the Chief Marketing & Strategy Officer for Gannett Co., Inc. (NYSE:GCI), a subscription-led and digitally focused media and marketing solutions company (“Gannett”). Mr. Gupta oversees the marketing strategy and subscription-based transformation for several portfolios, which include USA TODAY, local media organizations in 46 states in the U.S., and Newsquest, a wholly owned subsidiary with over 120 local media brands operating in the United Kingdom. Before assuming his current role in September 2020, Mr. Gupta served on the board of directors of Gannett since October 2019.

Prior to joining Gannett, Mr. Gupta served as the Chief Marketing Officer for Freshly, a growing food-technology company, from January 2019 until September 2020, where he oversaw all consumer-faced marketing, including driving growth, building the brand, and enhancing the company’s consumer insights. Before joining Freshly, Mr. Gupta led digital initiatives at several companies, including from October 2016 to January 2019 as Vice President, Growth and Marketing at Spotify, the on-demand streaming music giant, and from August 2015 to September 2016 as Executive Vice President, Chief Marketing Officer and earlier as Senior Vice President, Omni-Channel Consumer Marketing and Head of Digital Platforms at Healthgrades, a healthcare scheduling company. From August 2012 through July 2015, Mr. Gupta was the first Chief Marketing Technologist at Kimberly-Clark, one of the largest consumer goods companies.

Mr. Gupta was recently named to Forbes World’s Most Influential CMOs list for 2021.

Relevant Experience

Mr. Gupta’s expertise across the digital marketing space, in combination with his background in technology, will help the Board drive the Company’s next phase of growth and impact. Mr. Gupta’s ability to implement data-driven strategies to drive business growth and increase shareholder value will assist the Company in developing its own growth plans.

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Proposal No. 1 Election of Directors

Donna J. Hrinak, Independent
Senior Vice President, Corporate Affairs, Royal Caribbean Group

Age: 70
Director since: 2018

Committees:
Nominating & Governance (Chair)
Audit and Finance

Career Highlights

Ms. Hrinak has been a director of Adtalem since October 2018. Ms. Hrinak has served as Senior Vice President, Corporate Affairs, Royal Caribbean Group since August 2020. Previously she served as President of Boeing Latin America (2011-2020) where she opened Boeing’s first three offices in the region and oversaw all aspects of operations, from commercial and defense product sales to research and technology. She came to Boeing from her role as Vice President Global Public Policy and Governmental Affairs/Vice President for Public Policy at PepsiCo (2008-2011) and also held a role at Kraft Foods (2006-2008), where she managed the Latin American and European Corporate Affairs teams. Prior to that, she served as a Senior Counselor for Trade and Competition at the law firm of Steel Hector & Davis and held a role with the strategic advisory firm of Kissinger McLarty Associates.

Before entering the private sector, Ms. Hrinak was a career officer in the U.S. Foreign Service, and served as U.S. Ambassador to Brazil, Venezuela, Bolivia, and the Dominican Republic, as well as Deputy Assistant Secretary in the State Department.

She holds a bachelor’s degree in Multidisciplinary Social Science from Michigan State University and also attended The George Washington University and the University of Notre Dame School of Law.

Relevant Experience

Ms. Hrinak’s extensive experience at a senior level in both the public and private sectors overseeing complex multi-cultural organizations brings insight to the Board directly applicable to the organization’s international scope.

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Proposal No. 1 Election of Directors

Georgette Kiser, Independent
Operating Executive, The Carlyle Group

Age: 53
Director since: 2018

Committees:
External Relations (Chair)
Nominating & Governance

Career Highlights

Ms. Kiser has been a director of Adtalem since May 2018. Ms. Kiser is an Operating Executive at The Carlyle Group where she is advising across the firm and in particular, the firm’s Global Technology and Solutions organization. Ms. Kiser previously served as the firm’s Managing Director and Chief Information Officer. Prior to her role at The Carlyle Group, she was in various executive roles at T. Rowe Price from 1996 to 2015, including Vice President and Head of Enterprise Solutions and Capabilities. She was a consultant and Software Engineer at Martin Marietta Management Data Systems from 1993 to 1995, and a Software Design Engineer in the Aerospace Division of the General Electric Company from 1989 to 1993.

She received a bachelor’s degree in Mathematics with a concentration in Computer Science from the University of Maryland, a M.S. in Mathematics from Villanova University, and an MBA from the University of Baltimore.

Board Service

Starting in 2019, Ms. Kiser has served on the boards of Aflac (NYSE: AFL), a leading supplemental insurer, Jacobs (NYSE: JEC), a leading, global professional services company, and NCR Corporation (NYSE: NCR), an American software, professional services, consulting and tech company. She serves on the audit and risk and compensation committees for Aflac, the compensation committee and nominating and corporate governance committee for Jacobs, and on the governance committee and chair of the risk committee at NCR.

Relevant Experience

Ms. Kiser’s experience in information technology at the senior leadership level in organizations with an international reach brings expertise to Adtalem which will enhance both the Board’s oversight of its business as well as Adtalem’s internal technology matters.

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Proposal No. 1 Election of Directors

Lyle Logan, Independent
Executive Vice President and Managing Director, The Northern Trust Company

Age: 62
Director since: 2007

Committees:
Academic Quality (Chair)
Compensation
Nominating & Governance

Career Highlights

Mr. Logan has been a director of Adtalem since November 2007. Mr. Logan has been Executive Vice President and Managing Director, Global Financial Institutions Group of The Northern Trust Company since 2009. He previously served as Senior Vice President and Head of Chicago Private Banking within the Personal Financial Services business unit of The Northern Trust Company from 2000 to 2005. Prior to 2000, he was Senior Vice President in the Private Bank and Domestic Portfolio Management Group at Bank of America.

Mr. Logan received his bachelor’s degree in Accounting and Economics from Florida A&M University and his Master’s Degree in Finance from the University of Chicago Graduate School of Business.

Board Service

Mr. Logan has served as a director of Heidrick & Struggles International Inc. (Nasdaq: HSII), an international executive search firm, since 2015. In addition to being the lead independent director at Heidrick & Struggles International Inc., he also serves on its audit and finance committee and nominating and board governance committee.

Relevant Experience

Mr. Logan’s experience in senior leadership positions with leading banking and investment management organizations adds perspective and an understanding of global investment markets to the Board’s consideration of finance and investment management matters.

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Proposal No. 1 Election of Directors

Michael W. Malafronte, Independent
Former Managing Partner, International Value Advisers and President of IVA Funds

Age: 47
Director since: 2016

Committees:
Compensation (Chair)
Audit and Finance

Career Highlights

Mr. Malafronte has been a director of Adtalem since June 2016. Mr. Malafronte is a Founding Partner of International Value Advisers, LLC (“IVA”) and served as Managing Partner for 13 years until December 2020. He was responsible for overseeing all aspects of IVA, including company strategy and managing resources. He also served as President of IVA Funds. Prior to founding IVA in 2007, Mr. Malafronte was a Senior Vice President at Arnhold and S. Bleichroeder Advisers, LLC where he worked for two years as a senior analyst for the First Eagle Funds, owned by Arnhold & S. Bleichroeder Advisers, LLC. There he worked under Charles de Vaulx and Jean-Marie Eveillard within the Global Value Group for the value funds, including the First Eagle Overseas, Global, U.S. Value Funds as well as the offshore funds, inclusive of the Sofire Fund Ltd. Similarly, he was responsible for covering the oil and gas, media, real estate, financial services, and retail industries on a global basis, as well as companies within the United Kingdom, Germany, and Japan. Moreover, Mr. Malafronte was responsible for covering the larger names within the portfolio such as Pargesa Holdings, ConocoPhillips, Petroleo Brasileiro, SK Corp., News Corp., Dow Jones, and Comcast.

Prior to the First Eagle Funds, Mr. Malafronte worked for nine years as a Portfolio Manager at Oppenheimer & Close, a dually-registered broker dealer and investment adviser; an adviser on three domestic hedge funds, one offshore partnership and a registered investment adviser and broker dealer. While at Oppenheimer & Close, Mr. Malafronte assisted in the launch of a domestic hedge fund in 1996 and an offshore partnership in 1998. Mr. Malafronte was responsible for all facets of portfolio management for the investment partnerships, including idea generation, in-depth research, and stock selection. In addition to that, he was also responsible for hiring and training both operations staff and research analysts.

Mr. Malafronte earned his bachelor’s degree in Finance from Babson College.

Board Service

Mr. Malafronte has previously served on the boards of two publicly traded companies: Bresler & Reiner Inc. (2002-2008) and Century Realty Trust (2005-2006).

Relevant Experience

Mr. Malafronte’s experience as a financial analyst covering institutions globally, and as a founder of a global investment firm, provides the Board with a firm understanding of Adtalem’s shareholders’ perspective and deeply informs Adtalem’s financial planning.

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Proposal No. 1 Election of Directors

Sharon L. O’Keefe, Independent
Retired President, University of Chicago Medical Center

Age: 69
Director since: 2020

Committees:
Academic Quality
Nominating & Governance

Career Highlights

Ms. O’Keefe served as the President of the University of Chicago Medical Center from February 2011 through July 2020. From April 2009 through February 2011, Ms. O’Keefe served as President of Loyola University Medical Center. Prior to her role at Loyola, she served from July 2002 to April 2009 as Chief Operating Officer for Barnes Jewish Hospital, a member of BJC Healthcare, St. Louis. In addition, Ms. O’Keefe has served in a variety of senior management roles at The Johns Hopkins, Montefiore Medical Center, University of Maryland Medical System, and Beth Israel Deaconess Medical Center in Boston, a teaching affiliate of Harvard Medical School. She has also served as a healthcare consultant with Ernst & Young. In addition, Ms. O’Keefe has served on the National Institutes of Health Advisory Board for Clinical Research, the Finance Committee of the National Institutes of Health Advisory Board, the Board of Trustees of the Illinois Hospital Association, and an Examiner for the Malcolm Baldridge National Quality Award. Ms. O’Keefe holds a M.S. degree in Nursing from Loyola University of Chicago and a B.S. degree in Nursing from Northern Illinois University.

Board Service

Since 2012 Ms. O’Keefe has served as a director of Vocera Communications Inc. (NYSE: VCRA), a provider of clinical communications and workforce solutions, where she is a member of the compensation committee. Ms. O’Keefe previously served on the board of Aviv Reit Inc. from 2013 through 2015.

Relevant Experience

Ms. O’Keefe’s prior leadership roles at University of Chicago Medical Center and Loyola University of Chicago Medical Center provide the Board with insights into how Adtalem can best serve the needs of our employer partners and drive superior student outcomes for our healthcare and medical students and graduates.

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Proposal No. 1 Election of Directors

Kenneth J. Phelan, Independent
Former Chief Risk Officer, United States Department of Treasury

Age: 62
Director since: 2020

Committees:
Compensation
External Relations

Career Highlights

Mr. Phelan served as the first Chief Risk Officer for the United States Department of Treasury (“Treasury”) from 2014 to 2019. As Chief Risk Officer of the Treasury, he was responsible for establishing and building the Treasury’s Office of Risk Management to provide senior Treasury and other administration officials with analysis of key risks including credit, market, liquidity, operational, governance, and reputational risk. From 2018 to 2019, Mr. Phelan also served as Acting Director for the Office of Financial Research, an independent bureau within the Treasury charged with supporting the Financial Stability Oversight Council and conducting research about systemic risk. Prior to joining the Treasury, Mr. Phelan served as the chief risk officer for RBS America from 2011 to 2014, as chief risk officer for Fannie Mae from 2009 to 2011, and as chief risk officer for Wachovia Corporation from 2008 to 2009. Earlier in his career, Mr. Phelan held a variety of senior risk roles at JPMorgan Chase, UBS, and Credit Suisse. Mr. Phelan holds a bachelor’s degree in Business Administration and Finance from Old Dominion University, a M.S. in Economics from Trinity College, and a J.D. from Villanova University.

Board Service

Since 2019 Mr. Phelan has served as a director of Huntington Bancshares, Inc. (NASDAQ. HBAN), a regional bank holding company whose primary subsidiary is The Huntington National Bank. Mr. Phelan is a member of Huntington’s risk oversight and compensation committees.

Relevant Experience

Mr. Phelan’s expansive financial and risk management experience assists the Board in its oversight of our risk portfolio and adds valuable perspective as we enhance and expand our global financial services offerings to serve customers’ governance, risk, and compliance needs.

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Proposal No. 1 Election of Directors

Lisa W. Wardell, Executive Chairman
Executive Chairman of the Board, Adtalem Global Education

Age: 52
Director since: 2008

Career Highlights

Ms. Wardell has been a director of Adtalem since November 2008. She served as the President and CEO of Adtalem from 2016 through September 2021. She was appointed Chairman of the Board in 2019 and Executive Chairman in September 2021. Ms. Wardell was previously the Executive Vice President and Chief Operating Officer of The RLJ Companies (“RLJ”), a diversified holding company with portfolio companies in the financial services, asset management, real estate, hospitality, media and entertainment, and gaming industries for 12 years. In her role at RLJ, Ms. Wardell closed $40 million in automotive dealership acquisitions and served as the Executive Vice President of RML Automotive, the 19th largest automotive dealership group in the U.S. She served on the Board of Naylor, Inc., an RLJ Equity Partners’ portfolio company. In addition, Ms. Wardell served as the primary RLJ fundraiser for a $610 million money management fund and managed a hotel development project in West Africa. In 2010, Ms. Wardell served as the Chief Financial Officer of a special purpose acquisition company that formed RLJ Entertainment, Inc., where she subsequently served as a director. Prior to joining RLJ, Ms. Wardell was a Principal at Katalyst Venture Partners, a private equity firm that invested in start-up technology companies in the media and communications industries from 1999 to 2003. From 1998 to 1999, Ms. Wardell worked as a senior consultant for Accenture, a global management consulting, technology services, and outsourcing company. From 1994 to 1996, Ms. Wardell was an attorney with the Federal Communications Commission where she worked in the commercial wireless division.

Ms. Wardell received her undergraduate bachelor’s degree in Political Science and African studies from Vassar College, her J.D. from Stanford University, and her Master’s Degree in Finance and Entrepreneurial Management from The Wharton School of Business at the University of Pennsylvania.

Among numerous recognitions, she was selected by Black Enterprise magazine as one of the “300 Most Powerful Executives in Corporate America” (2017) and has been featured on Savoy Magazine’s™ Power 300: Most Influential Black Corporate Directors list (2017 and 2016). Ms. Wardell is often featured for her strategic insights by media outlets, including Bloomberg, Fortune, Politico, Investor’s Business Daily, Inside Higher Ed, and the Chronicle of Higher Education, among others.

Board Service

In addition to her work at Adtalem, Ms. Wardell has served on the board of American Express (NYSE: AXP), a Fortune 100 company, since 2021. She is also a vice chair, executive committee of The Business Council, and is a member of the Executive Leadership Council, CEO Action for Diversity and Inclusion and the Fortune CEO Initiative. Ms. Wardell served on the board of directors of Christopher and Banks, Inc. from 2011 to 2017. She also served as a director of RLJ Entertainment, Inc. from 2012 to 2015.

Relevant Experience

Ms. Wardell’s prior role as CEO of Adtalem and her current responsibilities as Executive Chairman give her deep and current knowledge of Adtalem’s academic and business operations and strategy and make her an essential member of the Board. Additionally, her experience as a senior business executive in private equity, operations, and strategy and financial analysis, including mergers and acquisitions, together with her previous experience with a federal regulatory agency, give her important perspectives on the issues that come before the Board. These include business, strategic, financial, and regulatory matters.

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Proposal No. 1 Election of Directors

DIRECTOR NOMINATING PROCESS

The Nominating & Governance Committee is responsible for making recommendations of nominees for directors to the Board. The Nominating & Governance Committee’s goal is to put before our shareholders candidates who, with the incumbent directors, will constitute a board that has the characteristics necessary to provide effective oversight for the growing, complex, global educational operations of Adtalem and reflect the broad spectrum of students and members that Adtalem serves. The Nominating & Governance Committee seeks a diversity of thought, background, experience, and other characteristics in its candidates. To this end, Adtalem’s Governance Principles provide that nominees are to be selected on the basis of, among other things, knowledge, experience, skills, expertise, diversity, personal and professional integrity, business judgment, time availability in light of other commitments, absence of conflicts of interest, and such other relevant factors that the Nominating & Governance Committee considers appropriate in the context of the interests of Adtalem, its Board and its shareholders.

BOARD SUCCESSION PLANNING

We are committed to ensuring that our Board represents the right balance of experience, tenure, independence, age, and diversity. Additionally, our Governance Principles provide that a director is required to retire from our Board when he or she reaches the age of 72, although on the recommendation of the Nominating & Governance Committee, our Board may waive this requirement if a waiver is in the best interests of Adtalem. Over the last six years, our Nominating & Governance Committee has led the gradual transformation of our Board, with nine of our eleven directors joining the Board since 2015.

When considering nominees, the Nominating & Governance Committee seeks to ensure that the Board as a whole possesses, and individual members possess at least two of, the following characteristics or expertise in the following areas:

Leadership
Strategic vision
Business judgment
Management experience
Experience as a CEO or similar function
Experience as a CFO or accounting and finance expertise
Industry knowledge
Healthcare, medical, and related education and services
Education sector and accreditation
Financial services
Mergers, acquisitions, joint ventures, and strategic alliances
Public policy experience, particularly in higher education
Regulatory experience
Human capital management and/or compensation expertise
Global markets and international experience
Corporate governance

BOARD REFRESHMENT

11 New
Directors

8 Retirements

ANNUAL PROCESS FOR NOMINATION

1 Identify Candidates
Directors
Management
Shareholders
Independent Search Firm
2 Nominating & Governance Committee Review
Review qualifications
Consider diversity
Examine Board composition and balance
Review independence and potential conflicts
Meet with potential nominees
3 Recommend Slate
4 Full Board Review and Nomination
5 Shareholder Review and Election

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Proposal No. 1 Election of Directors

The Nominating & Governance Committee has implemented this policy by evaluating each prospective director nominee as well as each incumbent director on the criteria described above, and in the context of the composition of the full Board, to determine whether she or he should be nominated to stand for election or re-election. In screening director nominees, the Nominating & Governance Committee also reviews potential conflicts of interest, including interlocking directorships and substantial business, civic, and social relationships with other members of the Board that could impair the prospective nominee’s ability to act independently.

IDENTIFICATION AND CONSIDERATION OF NEW NOMINEES

In identifying potential nominees and determining which nominees to recommend to the Board, the Nominating & Governance Committee has retained the advisory services of Russell Reynolds Associates, an international executive search firm. In connection with each vacancy, the Nominating & Governance Committee develops a specific set of ideal characteristics for the vacant director position. The Nominating & Governance Committee looks at director candidates that it has identified and any identified by shareholders on an equal basis using these characteristics and the general considerations identified above.

SHAREHOLDER NOMINATIONS

The Nominating & Governance Committee will not only consider nominees that it identifies, but will consider nominees submitted by shareholders in accordance with the advance notice process for shareholder nominations identified in the By-Laws. Under this process, all shareholder nominees must be submitted in writing to the attention of Adtalem’s General Counsel and Corporate Secretary, 500 West Monroe Street, Suite 2800, Chicago, IL 60661, not less than 90 days prior to the anniversary of the immediately preceding annual meeting of shareholders. As a result, a shareholder nomination must be submitted by August 12, 2022. Such shareholder’s notice shall be signed by the shareholder of record who intends to make the nomination (or his duly authorized proxy) and shall also include, among other things, the following information:

the name and address, as they appear on Adtalem’s books, of such shareholder and the beneficial owner or owners, if any, on whose behalf the nomination is made;
the number of shares of Adtalem’s Common Stock which are beneficially owned by such shareholder or beneficial owner or owners;
a representation that such shareholder is a holder of record entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to make the nomination;
the name and residence address of the person or persons to be nominated;
a description of all arrangements or understandings between such shareholder or beneficial owner or owners and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination is to be made by such shareholder;
such other information regarding each nominee proposed by such shareholder as would be required to be disclosed in solicitations of proxies for elections of directors, or would otherwise be required to be disclosed, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including any information that would be required to be included in a proxy statement filed pursuant to Regulation 14A had the nominee been nominated by the Board; and
the written consent of each nominee to be named in a proxy statement and to serve as a director if so elected.

In addition to candidates submitted through this advance notice By-Law process for shareholder nominations, shareholders may also request that a director nominee be included in Adtalem’s proxy materials in accordance with the proxy access provision in the By-Laws. Any shareholder or group of up to 20 shareholders holding both investment and voting rights to at least 3% of Adtalem’s outstanding Common Stock continuously for at least three years may nominate the greater of (i) two or (ii) 20% of the Adtalem directors to be elected at an annual meeting of shareholders. Such requests must be received not less than 120 days nor more than 150 days prior to the anniversary date of the immediately preceding annual meeting of shareholders. As a result, any notice given by or on behalf of a shareholder pursuant to these provisions of the By-Laws (and not pursuant to Rule 14a-18 of the Exchange Act) must be received no earlier than June 13, 2022 and no later than July 13, 2022. However, if we hold our 2022 Annual Meeting of Shareholders more than 30 days from the first anniversary of this year’s Annual Meeting, then in order for notice by the shareholder to be timely, such notice must be received not later than the close of business on the tenth day following the day on which notice of the date of the annual meeting was mailed or public disclosure of the date of the annual meeting was made, whichever first occurs.

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Proposal No. 1 Election of Directors

In addition to candidates submitted through the By-Laws process for shareholder nominations, shareholders may also recommend candidates by following the procedures set forth below under the caption “Communications with Directors.”

Director Independence

The Board annually reviews the continuing independence of Adtalem’s non-employee directors under applicable laws and rules of the New York Stock Exchange (“NYSE”). The Board, excluding any director who is the subject of an evaluation, reviews and evaluates director transactions or relationships with Adtalem, including the results of any investigation, and makes a determination with respect to whether a conflict or violation exists or will exist or whether a director’s independence is or would be impaired.

The Board has considered whether each director has any material relationship with Adtalem (either directly or as a partner, shareholder, or officer of an organization that has a relationship with Adtalem) and has otherwise complied with the requirements for independence under the applicable listing standards of the NYSE.

As a result of this review, the Board affirmatively determined that, with the exception of Ms. Wardell and Mr. Beard, all of Adtalem’s current directors, and all of Adtalem’s former directors who served as a director during fiscal year 2021, are “independent” of Adtalem and its management within the meaning of the applicable NYSE rules. Mr. Beard is considered an inside director because of his employment as President and CEO of Adtalem. Ms. Wardell is considered an inside director because of her previous employment as President and CEO of Adtalem.

The Board considered the relationship between Adtalem and The Northern Trust Company, a wholly-owned subsidiary of Northern Trust Corporation. Adtalem maintains depository accounts with The Northern Trust Company and conducts a significant portion of its disbursement activity through these accounts. Mr. Logan, one of our directors, is Executive Vice President and Managing Director, Global Financial Institutions Group, with Northern Trust Global Investments, a business unit of The Northern Trust Company. In fiscal year 2021, Adtalem incurred approximately $184,000 in fees to The Northern Trust Company, which were partially offset against compensating balance credits earned on an average monthly outstanding balance of approximately $23 million. The Board concluded, after considering (i) that the relationship with The Northern Trust Company predates Mr. Logan joining the Board, (ii) that Mr. Logan has had no involvement in the Adtalem banking transactions, (iii) the lack of materiality of the transactions to Adtalem and to The Northern Trust Company, and (iv) the fact that the terms of the transactions are not preferential either to Adtalem or to The Northern Trust Company, that the relationship is not a material one for purposes of the NYSE listing standards and would not influence Mr. Logan’s actions or decisions as a director of Adtalem.

BOARD STRUCTURE AND OPERATIONS

Summary of Board and Committee Structure

Adtalem’s Board held 17 meetings during fiscal year 2021, consisting of 5 regular meetings and 12 special meetings. Currently, the Board has five standing committees: Academic Quality, Audit and Finance, Compensation, External Relations, and Nominating & Governance. The following table identifies each standing committee, its members and chairs, its key responsibilities and the number of meetings held during fiscal year 2021. In her role as Executive Chairman, Ms. Wardell is an ex officio member of each committee. Current copies of the charters of each of these committees, a current copy of Adtalem’s Governance Principles, and a current copy of Adtalem’s Code of Conduct and Ethics can be found on Adtalem’s website, www.adtalem.com, and are also available in print to any shareholder upon request from Adtalem’s General Counsel and Corporate Secretary, 500 West Monroe Street, Suite 2800, Chicago, IL 60661. The Board has determined that each of the members of the Audit and Finance, Compensation, and Nominating & Governance committees is independent within the meaning of applicable laws and NYSE listing standards in effect at the time of determination. The standing Audit and Finance Committee was established in accordance with Section 3(a)(58)(A) of the Exchange Act, the rules and regulations of the SEC, and the listing standards of the NYSE.

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Proposal No. 1 Election of Directors

Academic Quality Committee

Members* Meetings in fiscal year 2021
Lyle Logan (Chair)
Charles DeShazer
Mayur Gupta
Sharon L. O’Keefe
4

* Mr. DeShazer was appointed to the Committee on April 2, 2021. Mr. Gupta will join the Committee effective November 9, 2021. Mr. White served on the Committee until his retirement from the Board on April 30, 2021.

Key Responsibilities

Supports improvement in academic quality and assures that the academic perspective is heard and represented at the highest policy-setting level and incorporated in all of Adtalem’s activities and operations
Reviews the academic programs, policies, and practices of Adtalem’s institutions
Evaluates the academic quality and assessment process and evaluates curriculum and programs

Audit and Finance Committee

Members Meetings in fiscal year 2021 Report
William W. Burke (Chair)
Donna J. Hrinak
Michael W. Malafronte
8 Page 40

Key Responsibilities

Monitors Adtalem’s financial reporting processes, including its internal control systems and the scope, approach, and results of audits
Selects and evaluates Adtalem’s independent registered public accounting firm, subject to ratification by the shareholders
Reviews and recommends to the Board Adtalem’s financing policies and actions related to investment, capital structure, and financing strategies
Provide oversight of Adtalem’s policies and processes established by management to identify, assess, monitory, manage and control technology, cyber, information and other security risks
Reviews and approves any potential related party transactions

The Board has determined that Mr. Burke and Mr. Malafronte are qualified as audit committee financial experts.

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Proposal No. 1 Election of Directors

Compensation Committee

Members Meetings in fiscal year 2021 Report
Michael W. Malafronte (Chair)
William W. Burke
Lyle Logan
Kenneth J. Phelan
5 Page 61

Key Responsibilities

Oversees all compensation practices and reviews eligibility criteria and award guidelines for Adtalem’s compensation program
Reviews and approves, following discussions with the other independent members of the Board, CEO annual goals and objectives
Evaluates the CEO’s performance against established annual goals and objectives
Recommends CEO compensation to the other independent members of the Board for approval
Reviews and approves recommendations made by the CEO for executive officers, including base salary, annual incentive, and equity compensation
Reviews and approves the total pay-out of short and long term incentive pools, including annual grants of equity awards
Reviews and recommends to the Board compensation paid to non-employee directors

External Relations Committee

Members* Meetings in fiscal year 2021
Georgette Kiser (Chair)
Charles DeShazer
Mayur Gupta
Kenneth J. Phelan
4

* Mr. DeShazer was appointed to the Committee on April 2, 2021. Mr. Gupta will join the Committee effective November 9, 2021. Mr. Logan and Ms. O’Keefe served on the Committee until April 2, 2021.

Key Responsibilities

Provides awareness and oversight of Adtalem’s external relations strategy, policy, and practice
Monitors, analyzes, and effectively manages legislative and regulatory policy trends, issues, and risks
Develops recommendations to the Board with regard to formulating and adopting policies, programs, and communications strategy related to legislative, regulatory, and reputational risk
Oversees risks and exposures related to higher education public policy, as well as compliance with laws and regulations applicable to Adtalem
Provides oversight regarding significant public policy issues including environmental, health and safety, and public and community affairs
Reviews Adtalem’s sustainability strategy, including initiatives and policies relating to environmental stewardship, corporate social responsibility, and corporate culture

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Nominating & Governance Committee

Members* Meetings in fiscal year 2021
Donna J. Hrinak (Chair)
Georgette Kiser
Lyle Logan
Sharon O’Keefe
5

* Ms. Hrinak was appointed Chair of the Committee on April 2, 2021. Mr. White served on the Committee until his retirement from the Board on April 30, 2021. Mr. Logan and Ms. O’Keefe were appointed to the Committee on April 2, 2021.

Key Responsibilities

Reviews Board and committee structures and leads the Board self-evaluation process
Assesses Board needs and periodically conducts director searches and recruiting to ensure appropriate Board composition
Recommends candidates for nomination as directors to the Board
Oversees and conducts planning for CEO and director succession and potential related risks
Recommends governance policies and procedures

Board Leadership Structure

Pursuant to our Governance Principles, the Board believes that it should be free to make its selection of the Chairman of the Board and the CEO in the way that it deems best for Adtalem and its shareholders at any given time. To ensure continued Board independence, the Board has adopted a policy that, in the event the Chairman of the Board and CEO roles are combined, or the Chairman of the Board is not otherwise independent, the Board shall appoint a Lead Independent Director. In July 2019, the Board elected Lisa W. Wardell, who has served on our Board since November 2008 and as our President and CEO since May 2016, as Chairman of the Board. In accordance with our Governance Principles, the Board concurrently appointed William W. Burke to serve as our Lead Independent Director. In evaluating the Board’s leadership structure, the Board considered the relevant merits of combining the roles of Chairman of the Board and Chief Executive Officer and appointing a strong Lead Independent Director, compared with keeping the roles of Chairman of the Board and CEO separate. The Board concluded that Ms. Wardell was the person best suited to serve as Chairman of the Board during fiscal year 2021, providing consistent leadership, alignment between the Board and management, and a unified voice for Adtalem as it continues its transformation to a leading workforce solutions provider. In addition, the Board reaffirmed its commitment to independent board leadership by appointing Mr. Burke as our Lead Independent Director.

The Board reviews its leadership structure periodically and as circumstances warrant. On September 8, 2021, Mr. Beard was appointed President and CEO and Ms. Wardell was appointed Executive Chairman of the Board. The Board separated the roles of Chairman and CEO at this time to allow our CEO to focus on strategic imperatives, including the integration of Walden University and continuing to drive our business transformation efforts. Meanwhile, in her role as Executive Chairman, Ms. Wardell will focus on leading the Board, the strategic review of Adtalem’s Financial Services business, and furthering Adtalem’s Global Legislative Agenda. Mr. Burke continues to serve as our Lead Independent Director. During fiscal year 2021, the Board met in executive session without employee directors or other employees present at each regular Board meeting. Mr. Burke, as Adtalem’s Lead Independent Director, presided over these sessions.

In furtherance of our Board’s role in overall strategy and succession planning, our Lead Independent Director actively engages with our Executive Chairman or Chairman/CEO, as the case may be, on such matters. In addition, our Governance Principles provide that the Lead Independent Director:

sets the agenda for, calls meeting of and leads executive sessions of the independent directors and reports to the Executive Chairman of the Board, as appropriate, concerning such meetings;
acts as a liaison between the Executive Chairman of the Board and the independent directors;
advises the Executive Chairman of the Board as to the quality, quantity, and timeliness of the flow of information from management that is necessary for the independent directors to effectively and responsibly perform their duties;

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when appropriate, makes recommendations to the Executive Chairman of the Board about calling full meetings of the Board;
serves as a resource to consult with the Executive Chairman of the Board and other Board members on corporate governance practices and policies and assumes the primary leadership role in addressing issues of this nature if, under the circumstances, it is inappropriate for the Executive Chairman of the Board to assume such leadership; and
performs such other duties as requested by the Board or Nominating & Governance Committee and as set forth in the Governance Principles.

  OUR LEAD INDEPENDENT DIRECTOR  
    
   During his career, Mr. Burke has served in executive leadership roles at several companies and, during his service on multiple public company boards, has served as a lead independent director, board chairman, audit committee chairman and compensation committee chairman. Mr. Burke also continues to serve as Chair of our Audit and Finance Committee.   

Director Attendance

During fiscal year 2021, our Board met seventeen (17) times. Each of Adtalem’s directors attended at least 93% of the meetings of the Board and Board committees on which they served that occurred during their respective time of service on the Board in fiscal year 2021.

All of our directors who were directors at the time were in attendance at the 2020 Annual Meeting of Shareholders, held virtually in November 2020. Our Board encourages all of its members to attend the Annual Meeting but understands there may be situations that prevent such attendance.

Director Continuing Education

Members of the Board are encouraged to participate in continuing education and enrichment classes and seminars. During fiscal year 2021, the following directors attended the following classes and seminars: (i) Mr. Burke is National Association of Corporate Directors (“NACD”) Directorship Certified. NACD Directorship Certified directors establish themselves as committed to continuing education on emerging issues and helping to elevate the profession of directorship. Mr. Burke also participates in the PwC Corporate Directors Exchange which aims to give Fortune 1000 directors the tools to lead for long-term success, and the NACD Advanced Director Professionalism course; (ii) Ms. Kiser is a NACD Board Leadership Fellow and attended NACD seminars, including the ESG Continuous Learning Cohort and The Boards Role in Driving Diversity and Inclusion; (iii) Ms. O’Keefe attended NACD seminars on Top Compensation Committee Concerns; and The Future of Healthcare.

Board Self-Evaluation

Each year our Board undertakes a self-evaluation process to critically evaluate its performance and effectiveness. Additionally, each committee conducts a self-evaluation to monitor its performance and effectiveness. The process is coordinated by Chairman and the chair of the Nominating & Governance Committee using an independent third-party to conduct the evaluation process. Board and committee members are asked to provide commentary about a variety of topics, including the following: overall Board performance, including strategy, challenges and opportunities; Board and committee meeting logistics and materials; Board and committee culture; and human capital and succession planning. The results of the evaluations are aggregated and summarized by the independent third party and discussed at Board and committee meetings.

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KEY BOARD RESPONSIBILITIES

Strategic Oversight

The Board has an active role in our overall strategies. The Board actively reviews and provides guidance on Adtalem’s long-term strategies and annual operating plan. Management reports its progress in executing on Adtalem’s strategies and operating plan throughout the year. In addition, throughout the year, segment leadership will report to the Board regarding individual segment strategies and operating plans. While our External Relations Committee has primary responsibility to review and provide oversight to management on our ESG strategy, our Audit and Finance and Nominating & Governance Committees, along with the full Board, also review and provide oversight on our ESG strategies.

Risk Oversight

Adtalem’s full Board is responsible for assessing major risks facing Adtalem and overseeing management’s plans and actions directed toward the mitigation and/or elimination of such risk. The Board has assigned specific elements of the oversight of risk management of Adtalem to committees of the Board, as summarized below. Each committee meets periodically with members of management and, in some cases, with outside advisors regarding the matters described below and, in turn, reports to the full Board at least after each regular meeting regarding any findings.

Managing current and emerging business risks from regulatory and market risks to global risks like a pandemic, is an important component of our governance and oversight system. Management undertakes a regular review of a broad set of risks across Adtalem’s business and operations to identify, assess, manage and monitor existing and emerging threats and opportunities. Adtalem’s Enterprise Risk Management (“ERM”) team is responsible for leading our risk management program at the enterprise level. The ERM team places particular focus on key risks that have the potential for the highest impact to Adtalem and its operations, and the highest likelihood of risk occurrence based on Adtalem’s preparedness and potential impact to Adtalem’s strategy. As part of management’s proactive risk identification and mitigation efforts, the ERM team has initiated the development of Risk Appetite Statements for each critical enterprise risk. These Risk Appetite Statements are expected to deepen our understanding of risks, enable effective action to mitigate risks and strengthen our risk culture.

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Board/Committee Primary Areas of Risk Oversight

Full Board
Reputation
Legal and regulatory compliance and ethical business practices
Strategic planning
Major organizational actions
Education public policy

Academic
Quality Committee
Academic quality
Accreditation
Curriculum development and delivery
Student persistence
Student outcomes

Audit and
Finance Committee
Accounting and disclosure practices
Information technology
Cybersecurity
Financial controls
Risk management policies and procedures
Legal and regulatory compliance, including compliance and ethics program
Related party transactions
Capital structure
Investments
Foreign exchange

Compensation
Committee
Compensation practices
Talent development
Retention
Management succession planning

External
Relations Committee
Accreditation
Higher education public policy
Compliance with laws and regulations applicable to Adtalem
Sustainability, environmental, corporate social responsibility, and public and community affairs
 
Nominating &
Governance Committee
Corporate and institutional governance structures and processes
Board composition and function
Board and Chairman of the Board succession

Succession Planning and Human Capital Management

The Board recognizes that one of its most important duties is to ensure continuity in Adtalem’s senior leadership by overseeing the retention and development of executive talent and planning for the effective succession of our CEO, including the recent succession of Mr. Beard as CEO, and the executive leadership team. In order to ensure that the succession planning and leadership development process supports and enhances our long-term strategic objectives, the Board periodically consults with our CEO and Chief Human Resources Officer on Adtalem’s business goals, the skills and experience necessary to help Adtalem achieve those goals, our organizational needs, our leadership pipeline, the succession plans for critical leadership positions, and our talent development and leadership initiatives. Talent and leadership development, including succession planning, is a top priority of our CEO and the senior executive team. Our CEO seeks input from members of our Board regarding candidates for executive positions and other key roles.

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Our Sustainability Commitment

SAFEGUARDING GLOBAL HEALTH AND THE ENVIRONMENT

We recognize that ESG practices and goals are at the forefront of our shareholders’ minds because our approach to these areas can provide insight into our corporate behavior, long-term performance, and sustainability. Our ESG practices support our purpose – to empower students and members to achieve their goals, find success, and make inspiring contributions to our global community. We aim to empower and enhance the communities in which we teach, learn, and work by operating sustainably, maintaining responsible governance standards, and supporting our global community. We continue to measure our performance and set new goals in areas including academic and policy standards; diversity and inclusion of Adtalem suppliers; and energy and waste reduction programs.

Adtalem is committed to confronting the challenges of climate change by reducing the impact of our operations. In fiscal year 2020, we launched a multi-year environmental initiative with the following three strategic goals to define our Energy Conservation Measures (“ECMs”) and Green House Gas (“GHG”) reduction activities through 2024:

1. Achieve a ten percent (10%) reduction (when compared to 2019 calendar year levels) of controllable energy use and GHG emission levels across Adtalem’s U.S. properties by 2024
2. From 2021 through 2024, aim to initiate an average of one renewable energy project per year at an owned location
3. By the end of 2024 implement an enhanced waste and recycling initiative across Adtalem’s controllable waste portfolio

These goals address a set of environmental issues that are important to us, including our impact on climate change and our effect on natural resources. The goals lay the foundation for our environmental vision and solidify our commitment to safeguard the environment. During fiscal year 2021, in accordance with Goal 1, we solidified a clearer picture of our carbon footprint and noted the impact of the ECM’s implemented across our locations. Our energy usage decreased 17.7 percent in fiscal year 2021 to 51,645,663 (kBtu) from 62,715,615 (kBtu). Our GHG emissions decreased 18.6 percent to 6,142 mtCO2e from 7,544 mtCO2e. Throughout 2021, we also made headway toward Goal 3 by strengthening our partnerships for advanced waste management in the recycling, refurbishment and diversion of waste from landfills. We also added to our growing pool of data used to assess risks and opportunities within our waste management systems through audits, pilot initiatives and partnership research. All of these results are through June 2021 and we recognize that COVID-19 restrictions and reduced occupancy impacted these metrics.

EMPOWERING INDIVIDUALS, IMPACTING GLOBAL COMMUNITIES

The principles of access and equity underpin our efforts to empower diverse, vibrant communities across the globe. Guided by our social mission to address critical workforce shortages through the education of diverse students and member populations, we seek to create sustainable workforces that represent the communities they serve. With projected nursing and physician shortages projected for the next decade, we are actively working to address these critical workforce shortages by providing training, expanding access to education and establishing robust employer partnerships. In 2021, 86.1% of the total population in our four degree-conferring institutions identified as female and 45.4% as ethnically diverse. Combined, our institutions graduate more than 100 Black physicians annually, more than any U.S. school. And many of our graduates go on to serve communities that are medically underserved or low-income. Forty-four percent (44%) of our medical school graduates practice in medically underserved or health professional shortage areas and eighty-eight percent (88%) of our medical school graduates practice in low-income communities.

The initiatives described above along with a detailed discussion of our Sustainability Commitment and its core pillars – Operating with Purpose and Responsibility; Safeguarding Global Health and the Environment; and Empowering Individuals, Impacting Global Communities can be found in Adtalem’s 2021 Sustainability Report (https://www.adtalem.com/sites/g/files/krcnkv321/files/2021-10/Adtalem_2021_SustainabilityReport_FINAL.pdf).

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Information Security and Cybersecurity

Adtalem takes seriously the custody of student, colleague, and stakeholder information, and therefore employs strong governance practices regarding information security. For example, Adtalem’s Enterprise Information Security Framework policy and Information Governance and Security procedures are modeled on the National Institute of Standards and Technology (NIST) 800-53 policy framework. We continually evaluate the effectiveness of our security measures.

Some key safeguards include, but are not limited to: regularly scheduled penetration tests & vulnerability assessments and mandatory security awareness training for all users of our systems. Representative training topics include: protection of sensitive information, phishing, and mobile device security.

We utilize advanced security tools and software to protect our systems and information, to detect unauthorized activity, and to take expeditious corrective action, as required.

The Adtalem Audit and Finance Committee, comprised entirely of independent directors, assists the Board in its responsibilities of overseeing that the Company has established, documented, maintained, and periodically reevaluates its CyberSecurity processes. Management reports on the state of the CyberSecurity program to the Audit and Finance Committee on a quarterly basis. Additionally, Adtalem’s IT general controls are audited annually by both the Company’s internal function and the Company’s independent registered public accounting firm, PricewaterhouseCoopers LLP.

Adtalem maintains a CyberSecurity insurance policy, which would potentially defray certain costs associated with a breach. In the last three years, Adtalem has not experienced a significant information security breach.

Outreach and Engagement

We value the opinions of our shareholders and believe regular, proactive communications with our shareholders to be in the long-term best interests of Adtalem. Our investor communications and outreach include investor day meetings, investor conferences, and quarterly conference calls. These calls are open to the public and are available live and as archived webcasts on our website. Additionally, we reach out at least annually to our largest shareholders to invite feedback. We hold individual calls with shareholders who accept our invitation to allow for open, meaningful discussions. As part of our shareholder outreach, we have spoken with shareholders holding approximately 45% of our shares. These included discussions of compensation matters, as well as environmental, social, and governance issues. We share any feedback received from our shareholders with our Board.

COMMUNICATIONS WITH DIRECTORS

Shareholders and other interested parties wishing to communicate with the Board, our Lead Independent Director, or any member or committee of the Board are encouraged to send any communication to our General Counsel and Corporate Secretary, Adtalem Global Education Inc., 500 West Monroe Street, Suite 2800, Chicago, IL 60661 and should prominently indicate on the outside of the envelope that it is intended for the Board, the independent directors as a group, or a committee or an individual member of the Board. Any such communication must be in writing, must set forth the name and address of the shareholder (and the name and address of the beneficial owner, if different), and must state the form of stock ownership and the number of shares beneficially owned by the shareholder making the communication. Adtalem’s General Counsel and Corporate Secretary will compile and promptly forward all communications to the Board except for spam, junk mail, mass mailings, resumes, or other forms of job inquiries, surveys, business solicitations, or advertisements.

Communicating Accounting Complaints

Shareholders, Adtalem employees and other interested persons are encouraged to communicate or report any complaint or concern regarding financial statement disclosures, accounting, internal accounting controls, auditing matters, or violations of Adtalem’s Code of Conduct and Ethics (collectively, “Accounting Complaints”) to the General Counsel and Corporate Secretary of Adtalem at the following address:

General Counsel and Corporate Secretary
Adtalem Global Education
500 West Monroe Street, Suite 2800
Chicago, IL 60661

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Accounting Complaints also may be submitted in a sealed envelope addressed to the Chair of the Audit and Finance Committee, in care of the General Counsel, at the address indicated above, and labeled with a legend such as: “To Be Opened Only by the Audit and Finance Committee.” Any person making such a submission who would like to discuss an Accounting Complaint with the Audit and Finance Committee should indicate this in the submission and should include a telephone number at which he or she may be contacted if the Audit and Finance Committee deems it appropriate.

Adtalem employees and students may also report Accounting Complaints using any of the reporting procedures specified in Adtalem’s Code of Conduct and Ethics. All reports by employees shall be treated confidentially and may be made anonymously. Adtalem will not discharge, demote, suspend, threaten, harass, or in any manner discriminate against any employee in the terms and conditions of his or her employment based upon any lawful actions taken by such employee with respect to the good faith submission of Accounting Complaints.

BOARD PRACTICES AND POLICIES

Certain Relationships and Related Person Transactions

It is Adtalem’s policy that the Audit and Finance Committee review, approve, or ratify all related party transactions in which Adtalem participates and in which any related person has a direct or indirect material interest and the transaction involves or is expected to involve payments of $120,000 or more in the aggregate per fiscal year. Our legal staff is primarily responsible for gathering information from the directors and executive officers, including annual questionnaires completed by all our directors, director nominees, and executive officers. The Audit and Finance Committee will review the relevant facts and circumstances of all related party transactions, including whether the transaction is on terms comparable to those that could be obtained in arm’s length dealings with an unrelated third party and the extent of the related party’s interest in the transaction. No member of the Audit and Finance Committee may participate in any approval of a related party transaction to which he or she is a related party.

Various Adtalem policies and procedures, including the Code of Conduct and Ethics, which applies to Adtalem’s directors, officers, and all other employees, and annual questionnaires completed by all Adtalem directors, director nominees, and executive officers, require disclosure of related person transactions or relationships that may constitute conflicts of interest or otherwise require disclosure under applicable Securities and Exchange Commission (“SEC”) rules.

There were no related party transactions in fiscal year 2021 that required approval under our policies and procedures or the rules and regulations of the SEC.

Governance Principles/Code of Ethics

Our Board has adopted Governance Principles that set forth expectations for directors, director qualifications, director retirement, director independence standards, board committee structure, and functions and other policies for Adtalem’s governance. We have adopted a Code of Conduct and Ethics applicable to all colleagues including directors, officers, and full- and part-time colleagues and faculty of Adtalem Global Education Inc. and its subsidiaries. These documents are available on Adtalem’s website at https://www.adtalem.com/media/166/ governance-principles and https://www.adtalem.com/media/156/code_of_conduct.pdf. Any amendments or waivers of the Code of Conduct and Ethics will be disclosed at this website address.

Compensation Committee Independence and Insider Participation

During 2021, Michael W. Malafronte, William W. Burke, Lyle Logan, and Kenneth J. Phelan served on the Compensation Committee. No member of the Compensation Committee was, during 2021, an officer or employee of Adtalem, was formerly an officer of Adtalem or had any relationship requiring disclosure by Adtalem as a related person transaction under Item 404 of Regulation S-K. During 2021, none of the Company’s executive officers served on the board of directors of compensation committee of any other entity, any officers of which served on Adtalem’s Board or our Compensation Committee.

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DIRECTOR COMPENSATION

The director compensation program was reviewed in the second half of fiscal year 2021 and no changes were made for the year. In fiscal year 2021, non-employee directors continued to receive an annual retainer of $85,000, paid quarterly. In fiscal year 2021, the Chair of the Audit and Finance Committee received an additional annual retainer of $22,500, the Chair of the Compensation Committee was entitled to receive an additional retainer of $17,500, and the chairs of each of the other committees received an additional annual retainer of $10,000 for their roles as committee chairs. During fiscal year 2021, Ms. Wardell, our Executive Chairman of the Board, and former CEO and President, did not receive any additional compensation for her service as Chairman of the Board and Mr. Burke received an additional annual retainer of $35,000 for his service as Lead Independent Director. Directors were reimbursed for any reasonable and appropriate expenditures attendant to Board membership. Mr. Malafronte, who was originally appointed to the Board in 2016 pursuant to a Support Agreement, did not receive any compensation for his service until he retired from IVA Partners in 2021.

Under the Adtalem Nonqualified Deferred Compensation Plan, a director could elect to defer all or a portion of the cash retainer. Any amount so deferred is, at the director’s election, valued as if invested in various investment choices made available by the Compensation Committee for this purpose, and is payable in cash installments, or as a lump-sum on or after termination of service as a director, or at a later date specified by the director. No non-employee directors deferred any portion of their compensation in fiscal year 2021.

As long-term incentive compensation for directors, each non-employee director (other than Mr. Malafronte who did not receive compensation as a director at the time) received RSUs with an approximate value of $125,000 directly following the 2020 Annual Meeting of Shareholders. Each RSU represents the right to receive one share of Common Stock following the satisfaction of the vesting period. All RSUs granted in November 2020 vest upon the one-year anniversary of the grant date.

This table discloses all director compensation provided in fiscal year 2021 to the directors of Adtalem for their service as directors (other than Ms. Wardell who received no compensation for her service as a director and received no additional compensation as Chairman of the Board; Ms. Wardell’s compensation as President and CEO is set forth in the 2021 Summary Compensation Table).

Name         Fees Earned or
Paid in Cash
($)(1)
        Stock
Awards
($)(2)
        Total
($)
William W. Burke         142,500 125,026 267,526
Charles DeShazer(3) 35,417 35,417
Mayur Gupta(4)
Donna J. Hrinak 85,000 125,026 210,026
Georgette Kiser 92,500 125,026 217,526
Lyle Logan 119,000 (5) 125,026 244,026
Michael W. Malafronte(6) 40,666 40,666
Sharon L. O’Keefe 85,000 125,026 210,026
Kenneth J. Phelan 85,000 125,026 210,026
James D. White(7) 95,000 125,026 220,026
(1) Includes all retainer fees paid or deferred pursuant to the Adtalem Global Education Inc. Nonqualified Deferred Compensation Plan.
(2) The amounts reported in the Stock Awards column represent the grant date fair value of 4,370 RSUs granted on November 17, 2020 to each of the directors named above, computed in accordance with FASB ASC Topic 718. The assumptions made in determining the valuations of these awards can be found at Note 17: Stock-Based Compensation to our audited financial statements in Adtalem’s Annual Report on Form 10-K for the year ended June 30, 2021. The number of RSUs granted to each of the directors named above was determined by dividing $125,000 by $28.61, which represents the fair market value of a share of Common Stock on the November 17, 2020 award date, and rounding to the nearest 10 shares.
(3) Dr. DeShazer was appointed to the Board effective April 2, 2021.
(4) Mr. Gupta was appointed to the Board effective August 10, 2021.
(5) This amount includes $24,000 in cash Mr. Logan received as compensation for his services as a member of the board of trustees of an Adtalem institution.

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(6) Mr. Malafronte did not receive compensation for his Board service until April 8, 2021 after he retired from IVA.
(7) Mr. White retired from the Board effective April 30, 2021. Mr. White’s stock awards were forfeited upon his retirement.

The table below discloses the aggregate number of RSUs outstanding at June 30, 2021 for each non-employee director listed above.

        Name         RSUs
Outstanding
(#)
William W. Burke 4,370
Charles DeShazer(1)
Mayur Gupta(2)
Donna J. Hrinak 4,370
Georgette Kiser 4,370
Lyle Logan 4,370
Michael W. Malafronte
Sharon L. O’Keefe 4,370
Kenneth J. Phelan 4,370
James D. White(3)
        (1) Mr. DeShazer was appointed to the Board effective April 2, 2021.
(2) Mr. Gupta was appointed to the Board effective August 10, 2021.
(3) Mr. White retired from the Board effective April 30, 2021. Mr. White’s stock awards were forfeited upon his retirement.

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PROPOSAL NO. 2
Ratify Selection of PricewaterhouseCoopers LLP as Independent Registered Public Accounting Firm

Subject to shareholder ratification, the Audit and Finance Committee of the Board has reappointed PricewaterhouseCoopers LLP (“PwC”), as independent registered public accounting firm for Adtalem and its subsidiaries for fiscal year 2022. The Board recommends to the shareholders that the selection of PwC as independent registered public accounting firm for Adtalem and its subsidiaries be ratified. If the shareholders do not ratify the selection of PwC, the selection of independent registered public accounting firm will be reconsidered by the Audit and Finance Committee. Representatives of PwC are expected to be present at the Annual Meeting with the opportunity to make a statement, if they desire to do so, and to be available to respond to appropriate questions from shareholders.

APPROVAL BY SHAREHOLDERS

Proposal No. 2 to ratify the selection of PwC as independent registered public accounting firm for Adtalem for fiscal year 2022 will require the affirmative vote of a majority of the shares of Common Stock of Adtalem represented at the Annual Meeting. Unless otherwise indicated on the proxy, the shares will be voted FOR ratification of the selection of PwC as independent registered public accounting firm for Adtalem for fiscal year 2022.

    The Board of Directors recommends a vote FOR the ratification of the appointment of PwC as Adtalem’s independent registered public accounting firm for fiscal year 2022.

SELECTION AND ENGAGEMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit and Finance Committee, at each of its regularly scheduled meetings, and on an interim basis as required, reviews all engagements of PwC for audit and all other services. Prior to the Audit and Finance Committee’s consideration for approval, management provides the Audit and Finance Committee with a description of the reason for and nature of the services to be provided along with an estimate of the time required and approximate cost. Following such review, each proposed service is approved, modified, or denied as appropriate. A record of all such approvals is maintained in the files of the Audit and Finance Committee for future reference. All services provided by PwC during the past two years were approved by the Audit and Finance Committee prior to their undertaking.

PRE-APPROVAL POLICIES

The Audit and Finance Committee has adopted a policy for approving all permitted audit, audit-related, tax, and non-audit services to be provided by PwC in advance of the commencement of such services, except for those considered to be de minimis by law for non-audit services. Information regarding services performed by the independent registered public accounting firm under this de minimis exception is presented to the Audit and Finance Committee for information purposes at each of its meetings. There is no blanket pre-approval provision within this policy. For fiscal years 2020 and 2021, none of the services provided by PwC were provided pursuant to the de minimis exception to the pre-approval requirements contained in the applicable rules of the SEC. Audit and Finance Committee consideration and approval generally occurs at a regularly scheduled Audit and Finance Committee meeting. For projects that require an expedited decision because the independent registered public accounting firm should begin prior to the next regularly scheduled meeting, requests for approval may be circulated to the Audit and Finance Committee by mail, telephonically or by other means for its consideration and approval. When deemed necessary, the Audit and Finance Committee has delegated pre-approval authority to its Chair. Any engagement of the independent registered public accounting firm under this delegation will be presented for informational purposes to the full Audit and Finance Committee at their next meeting.

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Proposal No. 2 Ratify Selection of PricewaterhouseCoopers LLP as Independent Registered Public Accounting Firm

AUDIT FEES AND OTHER FEES

The Audit and Finance Committee appointed PwC as Adtalem’s independent registered public accounting firm for the fiscal year ended June 30, 2021. Adtalem’s shareholders ratified the engagement at the Annual Meeting of Shareholders on November 17, 2020. In addition to engaging PwC to audit the consolidated financial statements for Adtalem and its subsidiaries for the year and review the interim financial statements included in Adtalem’s Quarterly Reports on Form 10-Q filed with the SEC, the Audit and Finance Committee also engaged PwC to provide various other audit and audit-related services — e.g., auditing of Adtalem’s compliance with student financial aid program regulations.

The Sarbanes-Oxley Act of 2002 prohibits an independent public accountant from providing certain non-audit services for an audit client. Adtalem engages various other professional service providers for these non-audit services as required. Other professional advisory and consulting service providers are engaged where the required technical expertise is specialized and cannot be economically provided by employee staffing. Such services include, from time to time, business and asset valuation studies, and services in the fields of law, human resources, information technology, employee benefits and tax structure, and compliance.

In fiscal year 2020, we incurred significant tax fees related to the divestiture of Adtalem Brazil. The aggregate amounts included in Adtalem’s financial statements for fiscal year 2021 and 2020 for fees billed or to be billed by PwC for audit and other professional services, respectively, were as follows:

      Fiscal Year
2021
      Fiscal Year
2020
Audit Fees $ 2,628,000 $ 2,825,500
Audit-Related Fees $ 850,000 $
Tax Fees $ 405,881 $ 1,102,734
All Other Fees $ 18,000 $ 18,000
Total $ 3,901,881 $ 3,946,234

AUDIT FEES — Includes all services performed to comply with generally accepted accounting principles in conjunction with the annual audit of Adtalem’s financial statements and the audit of internal controls over financial reporting. In addition, this category includes fees for services in connection with Adtalem’s statutory and regulatory filings, consents, and review of filings with the SEC such as the annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K. Also included are services rendered in connection with the required annual audits of Adtalem’s compliance with the rules and procedures promulgated for the administration of federal and state student financial aid programs.

AUDIT-RELATED FEES — Includes services performed related to Adtalem’s debt offerings and comfort letters. Audit-related fees of $850,000 were billed to us by PwC for fiscal year 2021.

TAX FEES — Includes all services related to tax compliance, tax planning, tax advice, assistance with tax audits, and responding to requests from Adtalem’s tax department regarding technical interpretations, applicable laws and regulations, and tax accounting. Adtalem’s Audit and Finance Committee has considered the nature of these services and concluded that these services may be provided by the independent registered public accounting firm without impairing its independence.

ALL OTHER FEES — Includes subscriptions for online accounting research services, fees for access to disclosure checklist, and fees to prepare a human resource benchmarking study.

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Proposal No. 2 Ratify Selection of PricewaterhouseCoopers LLP as Independent Registered Public Accounting Firm

AUDIT AND FINANCE COMMITTEE REPORT

To Our Shareholders:

The Audit and Finance Committee of Adtalem consists of three independent directors. The members of the Audit and Finance Committee meet the independence and financial literacy requirements of the NYSE and additional heightened independence criteria applicable to members of the Audit and Finance Committee under SEC and NYSE rules. In fiscal year 2021, the Audit and Finance Committee held eight meetings. The Audit and Finance Committee has adopted, and annually reviews, a charter outlining the practices it follows. The charter conforms to the SEC’s implementing regulations and to the NYSE listing standards.

Management is responsible for Adtalem’s internal controls and the financial reporting process by which it prepares the financial statements. Adtalem’s independent registered public accounting firm is responsible for performing an independent audit of the annual financial statements of Adtalem and expressing an opinion on those statements. The principal duties of the Audit and Finance Committee include:

Monitoring Adtalem’s financial reporting processes, including its internal control systems;
Selecting Adtalem’s independent registered public accounting firm, subject to ratification by the shareholders;
Evaluating the independent registered public accounting firm’s independence;
Monitoring the scope, approach, and results of the annual audits and quarterly reviews of financial statements, and discussing the results of those audits and reviews with management and the independent registered public accounting firm;
Overseeing the effectiveness of Adtalem’s internal audit function and overall risk management processes;
Discussing with management and the independent registered public accounting firm the nature and effectiveness of Adtalem’s internal control systems; and
Reviewing and recommending to the Board Adtalem’s financing policies and actions related to investment, capital structure, and financing strategies.

During fiscal year 2021, at each of its regularly scheduled meetings, the Audit and Finance Committee met with the senior members of the Adtalem’s financial management team. Additionally, the Audit and Finance Committee had separate private sessions, on a quarterly basis, with Adtalem’s independent registered public accounting firm, Adtalem’s General Counsel and Corporate Secretary, Adtalem’s Chief Financial Officer or Interim Chief Financial Officer, and Adtalem’s Senior Director, Internal Audit.

The Audit and Finance Committee is updated periodically on the process management uses to assess the adequacy of Adtalem’s internal control systems over financial reporting, the framework used to make the assessment and management’s conclusions on the effectiveness of Adtalem’s internal controls over financial reporting. The Audit and Finance Committee also discusses with Adtalem’s independent registered public accounting firm Adtalem’s internal control assessment process, management’s assessment with respect thereto and the evaluation by Adtalem’s independent registered public accounting firm of its system of internal controls over financial reporting.

The Audit and Finance Committee annually evaluates the performance of Adtalem’s independent registered public accounting firm, including the senior audit engagement team, and determines whether to reengage the current independent registered public accounting firm. As a threshold matter, the Audit and Finance Committee satisfies itself that the most recent Public Company Accounting Oversight Board (“PCAOB”) inspection report pertaining to the current firm does not contain any information that would render inappropriate its continued service as Adtalem’s independent public accountants, including consideration of the public portion of the report and discussion in general terms of the types of matters covered in the non-public portion of the report. The Audit and Finance Committee also considers the quality and efficiency of the previous services rendered by the current auditors and the auditors’ technical expertise and knowledge of Adtalem’s global operations and industry. Based on this evaluation, the Audit and Finance Committee decided to reengage, and recommend ratification of, PwC as Adtalem’s independent registered public accounting firm for fiscal year 2022. The Audit and Finance Committee reviewed with members of Adtalem’s senior management team and PwC the overall audit scope and plans, the results of internal and external audit examinations, evaluations by management and PwC of Adtalem’s internal controls over financial reporting, and the quality of Adtalem’s financial reporting. Although the Audit and Finance

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Proposal No. 2 Ratify Selection of PricewaterhouseCoopers LLP as Independent Registered Public Accounting Firm

Committee has the sole authority to appoint Adtalem’s independent registered public accounting firm, the Audit and Finance Committee recommends that the Board ask the shareholders, at their annual meeting, to ratify the appointment of Adtalem’s independent registered public accounting firm. With respect to Adtalem’s audited financial statements for fiscal year 2021, the Audit and Finance Committee has:

Reviewed and discussed the audited financial statements with management;
Met with PwC, Adtalem’s independent registered public accounting firm, and discussed the matters required to be discussed by the PCAOB and the SEC; and
Received the written disclosures and the letter from PwC required by the applicable requirements of the PCAOB regarding the independent accountant’s communications with the Audit and Finance Committee concerning independence, and has discussed its independence with PwC.

In reliance upon the Audit and Finance Committee’s reviews and discussions with both management and PwC, management’s representations and the report of PwC on Adtalem’s audited financial statements, the Audit and Finance Committee recommended to the Board that the audited financial statements for the fiscal year ended June 30, 2021 be included in Adtalem’s Annual Report on Form 10-K filed with the SEC.

In addition, the Audit and Finance Committee has re-appointed, subject to shareholder ratification, PwC as Adtalem’s independent registered public accounting firm for fiscal year 2022.

This Audit and Finance Committee Report is not to be deemed incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act of 1933, as amended, or under the Exchange Act, except to the extent that Adtalem specifically incorporates this Audit and Finance Committee Report by reference, and is not otherwise to be deemed filed under such acts.

William W. Burke, Chair
Donna J. Hrinak
Michael W. Malafronte

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PROPOSAL NO. 3
Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”)

COMPENSATION DISCUSSION & ANALYSIS

The following pages summarize our executive compensation program for our NEOs. Our 2021 NEOs were:

Lisa W. Wardell*
Chairman of the
Board, President
and Chief
Executive Officer
Robert J. Phelan
Interim Chief
Financial Officer
Stephen W. Beard*
Chief Operating
Officer
Douglas G. Beck
Senior Vice President,
General Counsel and
Corporate Secretary

Former Executives (not pictured):

Kathy Boden Holland, Former Group President, Medical and Healthcare through September 30, 2021

Michael O. Randolfi, Former Senior Vice President and Chief Financial Officer through April 23, 2021

Executive Summary

Adtalem’s executive compensation program is designed to reward leaders for delivering strong financial results and building shareholder value. We firmly believe that academic quality and a strong student-centric focus lead to growth and, therefore, we have incorporated measures into our executive compensation program to recognize leadership for their roles in improving student academic performance and outcomes.

This executive compensation program structure enables us to provide a competitive total compensation package while aligning our leaders’ interests with those of our shareholders and other stakeholders. The following chart highlights key objectives behind the development, review and approval of our NEOs’ compensation.

Effective September 8, 2021 the Company entered into new Executive Employment Agreements with Ms. Wardell and Mr. Beard for their new roles as Executive Chairman and President and CEO, respectively. The Company filed (i) a Current Report on Form 8-K on August 6, 2021 providing the details of Mr. Beard’s Executive Employment Agreement as President and CEO; and (ii) a Form 8-K/A on September 13, 2021 providing the details of Ms. Wardell’s Executive Employment Agreement as Executive Chairman.

* Effective September 8, 2021, Ms. Wardell was appointed Executive Chairman and Mr. Beard was appointed President and CEO.

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Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”)

COMPENSATION OBJECTIVES

Our executive compensation program is designed to:

   ALIGN INCENTIVES             COMPETE FOR TALENT             REWARD PERFORMANCE   
        
Our purpose is to empower our students to achieve their goals, find success and make inspiring contributions to the global community. Success in realizing our purpose drives growth, which leads to the creation of sustainable, long-term value for our shareholders. Our compensation program is distinguished by its alignment not only with our shareholders, but also with our students, whose success is critical to our organization’s success. Our compensation program is designed to attract, retain and motivate high-performing employees, particularly our key executives who are critical to our operations. Our compensation decisions take into account the competitive landscape for talent.

We reward outstanding performance through:

A short-term incentive program focusing our executives on achieving strong financial results and superior academic and student outcomes, through individual performance objectives, and
A long-term incentive program providing a mix of equity vehicles designed to reward long-term financial performance and shareholder value creation.

Our executive compensation program is founded on aligning the attainment of our business transformation and growth objectives with commensurate rewards based on results achieved over both short- and long-term performance periods. The Compensation Committee believes this approach appropriately focuses executives on achieving our strategic priorities and provides appropriate upside and downside potential based on actual performance and results achieved over time.

Our program, particularly how we measure performance through both annual incentives and our long-term performance share plan, employs measures that support our fundamental shift in strategic focus for management and our organization at large.

Fiscal year 2021 highlights underscored by our commitment to business transformation and growth

Key Achievements How this positions us for growth

Announcing the purchase of Walden University

Reinvests capital (following the divestiture of Adtalem Brazil) via inorganic growth to expand market share of our medical and healthcare business while harnessing synergies to accelerate returns and position us for short- and long-term growth; and
Complements existing portfolio while adding substantial scale as a workforce solutions provider with innovative online capabilities

Focus on integration readiness as a segue to realizing value capture

 
Established integration synergy plans for post-close execution securing our commitment to deliver a $60 million contribution to free cash flow and $1.15 in EPS accretion from continuing operations (excluding special items) in year one following acquisition close

Strengthening our bench and focus on excellence in talent

 
Strengthened bench and supported long-term growth by investing in several key leadership hires with emphasis on general management, strategic marketing and growth-oriented roles, improving the succession pipeline in key functional and operational areas

Maintained Focus on Business Continuity ~ Normalized and prepared to expand business during Pandemic

 
Demonstrated agility with limited time and resources and despite the uncertainty during unprecedented times;
Rebounded with strong financial performance despite significant challenges to the business;
Managed through times of extreme uncertainty for Chamberlain and the medical schools where clinical experience is key for student success; and
Consolidated brick and mortar administrative offices and managed a complete remote workforce while significantly expanding our remote work capabilities for the longer term.

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Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”)

CONTINUED SHAREHOLDER OUTREACH

Adtalem employs a proactive investor relations approach, involving management and the Board, with ongoing outreach and interactive dialogue with investors to seek input on topics including corporate governance, executive compensation, diversity, equity and inclusion, and strategy. Our goal is to provide transparency to ensure there is a clear understanding of our business and our operating and financial performance – as set forth in our public filings, through one-on-one discussions, non-deal road shows, and investor conferences.

While we are very pleased by the positive response to the executive compensation program substantiated by our 92% ‘say on pay’ approval rating, our ongoing commitment included proactive outreach to our top shareholders in 2021. Those shareholders that did provide feedback (which collectively hold approximately 45% of our shares) responded favorably to our executive compensation program, did not express any particular areas of concern and reiterated their support for the positive changes implemented last year.

Adtalem and the Compensation Committee will continue to engage its shareholder base in the future to understand shareholder concerns, particularly in connection with potential changes to its compensation or governance practices.

Impact of COVID-19 on our Executive Compensation Program

The Adtalem organization remained agile, innovative, and dedicated to our mission, vision, and values, successfully weathering the continued impacts of the pandemic in fiscal year 2021. Payouts under our annual Management Incentive Plan (MIP), as well as performance shares (PSU) vesting in 2021, reflected actual performance despite the effects of the pandemic on our business.

PAY-FOR-PERFORMANCE FOCUS

We use both short- and long-term incentives to reward NEOs for delivering strong business results, increasing shareholder value and improving student outcomes. With our pay-for-performance philosophy, an executive can earn in excess of target levels when performance exceeds established objectives. And, if performance falls below established objectives, our incentive plans pay below target levels, which in some cases could be nothing at all.

MS. WARDELL’S 2021 TARGET COMPENSATION MIX       OTHER NEO 2021 TARGET
COMPENSATION MIX(1)(2)
(1) Excludes perquisites.
(2) Illustration represents target compensation mix for NEOs who were actively employed as of June 30, 2021 with the exception of Douglas Beck who had not yet received an ‘annual’ LTI award.

Program Design:

The actual value realized from the annual MIP award can range from zero, if threshold performance targets are not met, to up to 200% of targeted amounts for exceptional organizational performance.
Our long-term incentive program consists of equity-based awards whose value ultimately depends on our stock price growth. A significant portion of the long-term component (one-third of Ms. Wardell’s and the other NEO’s annual awards) is granted in the form of PSUs, the number of which are earned based on our three-year performance versus return on invested capital (ROIC) and free cash flow (FCF) per share goals. If the minimum levels of performance are not met, no PSUs are earned; if the minimum levels of performance are met, payout can range from 50% to 150% of the target number of PSUs. Beginning in fiscal year 2022, we are shifting our equity mix to 50% PSUs to strengthen pay-for-performance alignment.

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Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”)

Performance Assessment: Our Compensation Committee uses a comprehensive, well-defined and rigorous process to assess organizational and individual performance. We believe the performance measures for our incentive plans focus management on the appropriate objectives for the creation of short- and long-term shareholder value as well as academic quality and organizational growth.

2021 COMPENSATION DECISIONS AND ACTIONS

Key Fiscal Year 2021 Compensation Decisions

  BASE SALARY Page 48  
    
   While Adtalem remains committed to offering market competitive compensation for our key executives, the Compensation Committee chose to freeze salaries for all NEOs as a response to the ongoing challenges resulting from the COVID-19 pandemic.   

  ANNUAL INCENTIVES Page 49  
    
  

For Ms. Wardell, 85% of the fiscal 2021 MIP award was based on Adtalem’s financial performance, specifically adjusted earnings per share and revenue, reflecting our CEO’s key responsibility in leading Adtalem’s financial growth. The remaining 15% was based on individual performance. For the other NEOs, 70% of the 2021 MIP award was based on financial performance at Adtalem (adjusted earnings per share and revenue) or at the institutions for which the NEO is responsible (operating income and revenue), and the remaining 30% was based on individual performance.

Payouts under the 2021 MIP award were earned at 123% of target for Ms. Wardell and between 111% and 129% of target for the other NEOs, reflecting the strong financial performance of Adtalem and its institutions and individual contributions for fiscal year 2021.

  

  LONG-TERM INCENTIVES Page 53  
    
  

In fiscal year 2021, Ms. Wardell and other NEOs received long-term incentive grants consisting of performance vesting PSUs, service-vesting stock options, and service-vesting RSUs.

Performance share awards granted in 2018 to NEOs1, consisted of financial-based PSUs, vested in 2021 including Revenue and Free Cash Flow per share targets that were assessed over a three-year period. Based on our financial performance, the ROIC and Free Cash Flow PSUs vested with an overall payout of 64.3% and 93.8% of target, respectively.

  
   1 excluding Ms. Wardell, who did not receive a grant of LTI in August 2018 and Douglas Beck and Robert Phelan who were not employed by Adtalem at the time of grant.

Factors Guiding our Decisions

Executive compensation program objectives, philosophy and principles;
Shareholder input, including say-on-pay vote;
Adtalem’s mission, vision, purpose and “TEACH” values;
The competitive landscape, trends and best pay practices;
Financial performance of Adtalem and its individual institutions; and
Advice of our independent outside compensation consultant.

The following provides a more in-depth discussion of our performance in these areas that helped drive the Compensation Committee’s evaluation of performance, and ultimately, compensation decisions for fiscal year 2021.

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Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”)

2021 Financial and Operational Highlights

Adtalem’s fiscal year 2021 financial results reflect continued growth in its Medical and Healthcare and Financial Services segments, with revenue increasing 4.7% and 10.7%, respectively, despite the effects of COVID-19. COVID-19 resulted in estimated revenue losses of approximately $47 million, operating income losses of approximately $33 million and loss of earnings per share of approximately $0.50 in fiscal year 2021. Through efforts to manage salary, travel, and discretionary spending, Adtalem was able to partially offset the effects of COVID-19 and achieve fiscal year 2021 earnings per share, excluding special items, of $2.98. See Appendix A for a reconciliation to reported results.

Significant progress was made in executing our workforce solutions strategy in fiscal year 2021; a strategy designed to drive superior student outcomes, meet the critical workforce needs of our employer partners and drive value for our shareholders. We entered into an agreement to acquire Walden University to further position us as a leading healthcare education provider with market-leading scale and breadth. We successfully completed the acquisition of Walden University in August, 2021.

Fiscal year 2021 revenue was below our expectations while earnings per share exceeded our expectations, as reflected in our fiscal year 2021 operating plan, which served as the basis for our fiscal year 2021 MIP financial performance targets. As a result, the portions of executive officer MIP awards based on Adtalem revenue and earnings per share paid out at 98.0% and 136.5% of target, respectively.

FY 2021 REVENUE FY 2021 EARNINGS PER SHARE
* Adjusted results exclude impact of special items. See Appendix A for a reconciliation to reported results.

EXECUTIVE COMPENSATION GOVERNANCE AND PRACTICES

  WHAT WE DO         WHAT WE DON’T DO  
           
Pay for economic and academic performance
Solicit and value shareholder opinions about our compensation practices
Deliver total direct compensation primarily through variable pay
Set challenging short- and long-term incentive award goals
Provide strong oversight that ensures adherence to incentive grant regulations and limits
Maintain robust stock ownership requirements
Adhere to an incentive compensation recoupment (clawback) policy
Offer market-competitive benefits
Consult with an independent advisor on executive pay practices, plan designs and assessing external competitive pay levels
Provide guaranteed salary increases
Provide tax gross-ups
Provide single-trigger change-in-control severance
Re-price stock options or exchange underwater options for other awards or cash
Pay dividends on unvested performance-based awards
Provide excessive perquisites
Offer a defined benefit pension or supplemental executive retirement plan
Permit hedging or pledging of Adtalem Common Stock
Reward executives without a link to performance

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Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”)

Executive Compensation

PRINCIPLES OF EXECUTIVE COMPENSATION

The Compensation Committee uses the following Principles of Executive Compensation to assess Adtalem’s executive compensation program and to provide guidance to management on the Compensation Committee’s expectations for the overall executive compensation structure:

Principle       Purpose
Stewardship/Sustainability
Reinforce Adtalem’s purpose and long-term vision
Motivate and reward sustained long-term growth in shareholder value
Uphold long-term interests of all stakeholders (including students, employees, employers, shareholders and taxpayers)
Focus on sustaining and enhancing the quality and outcomes of education programs
Promote continued differentiation and expansion of Adtalem’s programs
Accountability
Ensure financial interests and rewards are tied to executive’s area of impact and responsibility (division, geography and function)
Require timing of performance periods to match timing of employee’s impact and responsibility (short-, medium- and long-term)
Emphasize quality, service and academic and career results
Articulate well defined metrics, goals, ranges, limits and results
Motivate and reward achievement of strategic goals, with appropriate consequences for failure
Comply with legislation and regulation
Alignment
Promote commonality of interest with all stakeholders (including students, employees, employers, owners and taxpayers)
Reflect and reinforce Adtalem’s values and culture
Promote commonality of interests across business units, geography and up, down and across the chain of command
Provide a balance between short- and long-term performance
Engagement
Attract and retain high quality talent and provide for organizational succession
Provide market competitive total compensation and benefits packages at all levels
Promote consistent employee development at all levels
Motivate urgency, creativity and dedication to Adtalem’s purpose
Clearly communicate the link between pay and performance
Transparency
Clearly communicate compensation structure, rationale and outcomes to all employees and shareholders
Provide simple and understandable structure that is easy for internal and external parties to understand
Maintain a reasonable and logical relationship between pay at different levels
Base plan on systematic goals that are objective and clear, with appropriate level of discretion

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Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”)

2021 EXECUTIVE COMPENSATION FRAMEWORK

Adtalem’s fiscal year 2021 incentive compensation program for executives was designed to link compensation performance with the full spectrum of our business goals, some of which are short-term, while others take several years or more to achieve:

COMPENSATION SNAPSHOT

      Objective Time
Horizon
Performance
Measures
Additional Explanation
Salary
(cash)
Reflect experience, market competition and scope of responsibilities Reviewed Annually Assessment of performance in prior year. Given the challenges presented by the pandemic and in response to the unprecedented and evolving business landscape, we took a conservative approach and did not increase salaries for executives during fiscal year 2021.
Represents 14% and 28% of Total Direct Compensation for Ms. Wardell and other NEOs (on average), respectively.
 
 

Annual
Incentive
(cash)

MIP

Reward achievement of short-term operational business priorities

1 year

Revenue*
Adjusted Earnings Per Share*
Individual Goals
Represents 15% and 20% of Total Direct Compensation for Ms. Wardell and other NEOs (on average), respectively.
 
 

Long Term
Incentive
(equity)

Stock Options

Reward stock price growth and retain key talent

4 year ratable

Stock price growth
Represents 33.3% of NEO LTI granted in FY21

RSUs

Align interests of management and shareholders, and retain key talent

Represents 33.3% of NEO LTI granted in FY21
ROIC PSUs
 
FCF PSUs

Reward achievement of multi-year financial goals, align interests of management and shareholders, and retain key talent

3 year cliff

ROIC
 
FCF per share
Represents 33.3% of NEO LTI granted in FY21
*

A portion of the MIP payout for executive leadership of business segments and business units is also based on the revenue and operating income at such executive’s business segment or business unit.

ANALYSIS OF 2021 EXECUTIVE COMPENSATION

Annual Base Salary Review

Annual base salaries for NEOs are intended to reflect the scope of their responsibilities, the experience they bring to their roles, and current market compensation for similar roles outside of Adtalem. Once established, and under normal business conditions, base salaries are reviewed annually for adjustment to reflect the executive’s prior performance and respond to changes in market conditions. The table below lists the seven criteria the Compensation Committee uses to determine changes to salary from one year to the next.

Base salary adjustments are made based on seven criteria:

1. Adtalem’s overall financial performance compared to operating plan

2. Executive’s performance against established individual goals and objectives

3. Executive’s effectiveness in instilling a culture of academic quality, teamwork, student service and integrity

4. Executive’s expected future contributions

5. Comparison to peer group and other available market data

6. Merit increase parameters set for all colleagues in the organization

7. Discretion based on interaction and observation through the year

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Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”)

Fiscal Year 2021 Base Salary Decisions

Given the unprecedented challenges presented by the pandemic and in response to the evolving business landscape, in August 2020 management, together with the Compensation Committee and based on input from F.W. Cook, made the decision that base salaries for NEOs would not be adjusted; and all were maintained at current levels for fiscal year 2021.

ANNUAL BASE SALARY

      FY2021
Lisa W. Wardell $ 1,100,000
Robert J. Phelan $ 350,000
Stephen W. Beard $ 600,020
Douglas G. Beck(1) $ 500,000
Kathy Boden Holland $ 592,250
Michael O. Randolfi(2) $ 600,000
(1) Mr. Beck was hired on June 14, 2021 and therefore did not have a salary for fiscal year 2020.
(2) Mr. Randolfi resigned effective April 23, 2021.

Annual Cash Incentive Compensation

The annual cash incentive, delivered through the MIP, provides NEOs with the opportunity to earn rewards based on the achievement of organizational and institutional performance, as well as individual performance.

How the MIP Works

MIP target award opportunities for each NEO are set by the Compensation Committee based on factors including external surveys of practices for positions with similar levels of responsibility. These targets, which are expressed as a percentage of base salary, are then reviewed at the beginning of each fiscal year based on updated market compensation data.

For fiscal year 2021, the MIP provided Adtalem’s NEOs (other than Ms. Wardell) with a target award opportunity ranging from 50% to 80% of base salary. For this period, the target award opportunity for Ms. Wardell was set at 110% of base salary (consistent with fiscal year 2020). Additionally, the award opportunity for Mr. Phelan was adjusted mid-year to 80% (from 50%) during the period which he served as interim CFO in addition to his role as Vice President and Chief Accounting Officer. No other changes were made to the MIP target award opportunity as a percentage of base salary for the other NEOs.

Creating a Strong Link to Pay-for-Performance

We believe the MIP payouts made to our NEOs for fiscal year 2021 support our executive compensation objective of pay-for-performance by rewarding our NEOs to the extent they met or exceeded pre-established individual performance goals and financial performance goals related to the institutions they oversee.

 

 

Actual awards can be higher or lower than the target opportunity based on the results for each performance measure. Performance below the threshold for the goal will result in no payment for that performance goal. Performance at or above threshold can earn an award ranging from 50% to 200% of the target amount. The maximum amount of 200% of target rewards exceptional performance compared to expectations, over-delivery of strategic initiatives, and/or achievement of initiatives not contemplated at the time goals were set.

Actual earned awards are determined after the fiscal year has ended and audited financial results have been completed (i.e., in the first quarter of the next fiscal year). Thus, MIP awards for fiscal year 2021 were determined and paid in the early part of fiscal year 2022, after the results for the fiscal year ended June 30, 2021 were confirmed. The payout is based on Adtalem adjusted earnings per share and Adtalem revenue, and as applicable, institution operating income and institution revenue measures. MIP measures and goals are typically set by the Compensation Committee in the first quarter of the year in which the performance is measured, in addition to individual performance.

MIP Performance Measures

The Compensation Committee determined that Adtalem adjusted earnings per share and revenue, along with institution operating income and revenue, effectively balance top line revenue growth and bottom-line profitability and results and are the most appropriate short-term metrics to support our business objectives.

 

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Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”)

In measuring performance, the Compensation Committee may adjust results for certain unusual, non-recurring or other items to ensure the MIP rewards true operational performance as it is perceived by investors and as consistently measured. Appendix A details the adjustments made in the last three fiscal years.

In instances where an institution has not demonstrated performance commensurate with the potential award, the Compensation Committee may exercise negative discretion and reduce MIP payouts for individuals with oversight over the applicable institution. In the case of acquisitions and dispositions, the Compensation Committee generally does not include revenue, and corresponding earnings per share or operating income, in their evaluation of achievement against targets unless such expected revenue, and corresponding earnings per share or operating income, had been factored into the performance target. Similarly, revenue, and corresponding earnings per-share or operating income performance is adjusted for dispositions during the year.

In addition to the actual results achieved, the Compensation Committee also considers individual performance over the course of that fiscal year for each NEO. Individual performance goals reflect functional results and/or institution performance appropriate for the executive, as well as academic outcomes, organizational strength and the advancement of Adtalem’s core values. Individual performance goals are designed to drive initiatives that support Adtalem’s strategy and further align leadership with Adtalem’s student-focused purpose.

The relative percentages assigned to the measures for each NEO(1) for fiscal year 2021 are as follows:

Organizational, Institution and Individual Performance
Measure Allocation
      Adtalem
Adj. Earnings
Per Share
      Adtalem
Revenue
      Institution
Operating
Income
      Institution
Revenue
      Individual
Performance
Lisa W. Wardell 45% 40% 15%
Robert J. Phelan 40% 30% 30%
Stephen W. Beard 40% 30% 30%
Douglas G. Beck 40% 30% 30%
Kathy Boden Holland 20% 10% 25% 15% 30%
(1) Mr. Randolfi did not receive an incentive payment under the FY21 MIP and is therefore excluded from the above table.

2021 Performance Goals

Financial goals set for our MIP participants are derived from Adtalem’s fiscal year operating plans, which are recommended by Adtalem’s executive management team and approved by the Board at the beginning of each fiscal year. For fiscal year 2021, these plans translated to financial performance goals of $1,116.9 million of revenue and $2.60 of adjusted EPS.

The table below shows the threshold, target, and maximum goals for revenue and adjusted earnings per share under the fiscal 2021 MIP, the performance achieved, and the resulting payout.

        Plan         Actual Results
(excluding
special items)
(1)
        Performance
Relative to Plan
       
Metric Threshold         Target         Maximum Payout %
Adtalem Revenue       $ 1,005.2 $ 1,116.9     $ 1,340.3                $ 1,112.4 99.6% 98.0%
Adtalem Adj. Earnings Per Share $  2.08 $ 2.60 $  3.64 $ 2.98 114.6% 136.5%
(1) See Appendix A for a reconciliation to reported results.

The fiscal year 2021 revenue target under the MIP was 5.7% higher than fiscal year 2020 actual results of $1,052.0 million, which reflected expected growth in the Medical and Healthcare and Financial Services segments. The 2021 adjusted earnings per share target goal under MIP was 30.7% higher than 2020 actual results of $2.28, which, again reflected expected growth in the Medical and Healthcare and Financial Services segments and cost control measures across all segments and home office.

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Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”)

Adtalem does not disclose the institution or segment performance goals utilized in its MIP due to the confidential nature of such information and the competitive harm that could result from its disclosure. The Compensation Committee considers the organization’s performance goals to represent the best estimate of what the organization could deliver if management, individually and collectively, were to materially satisfy its goals and objectives for the year. All goals are designed to be aggressive yet achievable, with the expectation that it would take extraordinary performance on the part of management to exceed them to the extent necessary to yield maximum incentive payouts under the MIP.

The Compensation Committee approves individual performance goals and objectives for the CEO at the beginning of each fiscal year. The CEO also works collaboratively with the other NEOs in developing their respective individual performance goals and in assigning weightings to such goals to place additional emphasis on tactical priorities. Individual performance goals are factors in determining base salary adjustments, annual cash incentive compensation and future awards of long-term incentive compensation. Individual performance goals intentionally include elements that can be rated objectively as well as, to a lesser extent, elements that are of a subjective nature. Individual performance goals are used to drive stretch performance across a broad range of areas considered critical to our strategy and purpose. This mix of objective and subjective criteria allows the evaluator — the independent members of the Board in the case of the CEO, and the CEO with input and approval from the Compensation Committee in the case of the other NEOs — to assess the individual’s performance against objective criteria, while utilizing his or her discretion to make adjustments based on the individual’s perceived contributions and other subjective criteria.

A summary of the primary individual performance goals and objectives established for each of our NEOs follows:

Lisa W. Wardell
(Chairman of the Board,
President and CEO)

     
Successfully navigate the COVID-19 pandemic
Implement Workforce Solutions Provider Strategy across portfolio
Continue building High Performance Team and Succession Planning
Academic Outcomes and Student Success
Continue Board and Committee Succession Planning

Robert Phelan
(VP, Chief Accounting
Officer & Interim CFO)

Achieve FY21 Operating Plan
Drive the Talent First Agenda
Maintain and Build upon a Culture of Operational Excellence
Support Adtalem’s Growth Strategy

Stephen W. Beard
(Chief Operating Officer)

Successful mergers and acquisitions strategy to streamline Adtalem’s portfolio
Successful execution of Financial Services vertical (financial plan and succession planning)
Implement Workforce Solutions Provider Strategy across portfolio
Successfully navigate the COVID-19 pandemic

Kathy Boden Holland
(Group President, Medical
& Healthcare Education)

“Raise the bar” on talent and succession plans across the vertical
Achieve vertical academic outcome goals
Achieve vertical FY21 Plan for revenue and operating income as well as build organic growth momentum
Ensure progress on the development and execution of the Social Justice Commitments action plans across the vertical
Material and positive progress on execution of enterprise strategy within the vertical, across Adtalem as appropriate, and in collaboration with Corporate Development

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Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”)

Fiscal Year 2021 MIP Decisions

Based on an evaluation of organizational performance relative to MIP measures set at the beginning of fiscal year 2021, the final MIP awards were partially based on the following financial results, as adjusted for special items described in Appendix A:

Adtalem achieved 98.0% payout for the fiscal year 2021 revenue component; and
Adtalem achieved 136.5% payout for the fiscal year 2021 adjusted earnings per share component.

In addition, a portion of the MIP awards for Ms. Boden Holland was based on results from the performance of the institutions she oversees. Final MIP award calculations also took into consideration evaluations of individual performance for each NEO during the fiscal year. Based on all of these applicable factors, the Compensation Committee approved the following MIP awards to the NEOs:

      Annual
Target as a
Percentage of
Base Salary
      FY2021
Target Award
Opportunity
      FY2021
Actual Award
      Percent of Target
Paid Based on
FY2021 Performance
Lisa W. Wardell 110%       $ 1,210,000       $ 1,489,813 123%
Robert J. Phelan(1) 50% and 80% $ 201,753 $ 242,104 120%
Stephen W. Beard 80% (1) $ 480,016 $ 619,200 129%
Douglas G. Beck(2) 70% $ 15,342 $ 17,490 114%
Kathy Boden Holland 70% $ 414,575 $ 458,727 111%
(1) Mr. Phelan’s target was increased from 50% to 80% in March 2021 and pro-rated for the period when he was appointed Interim Chief Financial Officer effective April 24, 2021.
(2) Douglas Beck’s award was approved by the committee for delivery on a prorata basis for fiscal year 2021 as an arrangement in connection with his offer of employment considering his start date of June 14, 2021.

Set forth below, as an example of the MIP calculation for NEOs, is a summary of the calculation of the fiscal year 2021 award for Ms. Wardell:

      Target Award
Opportunity
(Weighting)
      Target      

Performance
Achieved
(Excluding
Special Items)

     

Performance
Relative
to Target

      Payout
as a % of
Target Award
Opportunity
based on
Performance
Relative
to Target
      Target Award
Opportunity
($ Amount)
      Actual
Award
Adtalem Adj. Earnings
Per Share
45%  $ 2.60              $ 2.98 114.6% 136.5%        $ 544,500 $ 743,243
Adtalem Revenue 40% $ 1,116.9 $ 1,112.4 99.6% 98.0% $ 484,000 $ 474,320
Individual Performance 15% 150.0% $ 181,500 $ 272,250
Total 123.1% $ 1,210,000 $ 1,489,813

In reviewing Ms. Wardell’s performance, the Compensation Committee evaluated her performance against each of her individual goals and determined a 150% payout for the individual performance component of her MIP award (which represents 15% of the total MIP opportunity) was appropriate. Specifically, the Compensation Committee wanted to recognize Ms. Wardell’s continued role in the transformation of the Company, and in particular, successfully completing the acquisition of Walden University. Additionally, the Committee believes Ms. Wardell had exceeded expectations in continuing to lead the company through the global pandemic and preserving the organization’s financial performance, while at the same time, over-delivering in terms of academic outcomes and succession planning for the Board and management.

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Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”)

The Compensation Committee evaluated the other NEOs against their individual goals taking into consideration the following performance highlights:

Robert J. Phelan      

Mr. Phelan was instrumental in achieving the fiscal year plan, in particular overperforming on operating income through prudent cost measures and planning throughout the pandemic. The Committee also noted Mr. Phelan’s support for the workforce solutions strategy across the portfolio.

Stephen W. Beard

The Committee recognized Mr. Beard’s exceptional performance in the Financial Services vertical by building out a successful management team and overdelivering on segment revenue growth. In addition, Mr. Beard spearheaded the Walden transaction and managed the integration strategy plan and new operating model to allow for greater execution on the workforce solutions strategy.

Douglas G. Beck

Although Mr. Beck started at Adtalem on June 14, 2021, the Committee noted his role in the successful completion of the acquisition of Walden University. The Committee also recognized notable talent additions completed by Mr. Beck.

Kathy Boden Holland

Ms. Boden Holland was recognized by the Committee for achieving growth across medical and healthcare while maintaining and improving academic outcomes, notably NCLEX scores above the national average and residency match rates of 92% for both medical schools. The Committee also noted the progress on social justice initiatives in the medical and nursing institutions.

Long-Term Incentive Compensation

Long-term incentive compensation at Adtalem consists of PSUs, stock options and RSUs. The Compensation Committee targets the value of long-term incentive compensation for NEOs to represent a substantial percentage of their total compensation opportunity. These incentives are intended to serve three complementary objectives of our compensation program:

Align executives’ long-term interests with those of our shareholders;
Drive achievement of and reward executives for the delivery of long-term business results; and 
Promote long-term retention of key executives who are critical to our operations.

How the Long-Term Incentive Plan Works

The Compensation Committee granted equity awards to each of the NEOs (except Mr. Beck) in August 2020 (RSUs and stock options) and November 2020 (PSUs) based on both retrospective and prospective considerations and organizational and individual considerations. PSU grants were delayed until November in order to give the leadership team and the Compensation Committee time to evaluate the ongoing impacts of COVID-19 on the business and set goals that properly aligned management and shareholder interests. The Compensation Committee took into account the same seven criteria described in the “Annual Base Salary” section above in determining the amount of these awards. Awards were delivered through a mix of stock-based vehicles to provide a reasonable balance to the equity portfolio.

Tier       Name       Stock Options       RSUs       PSUs
CEO, CFO, COO, and Group President Lisa W. Wardell 33.3% 33.3% 16.7% ROIC/16.7%
Robert J. Phelan FCF per share
Stephen W. Beard
Kathy Boden Holland

Stock Options: Stock options reward long-term value creation through increases in stock price. To promote retention, stock option grants vest in equal annual installments over a four-year period beginning on the first anniversary of the grant date, subject to the NEO’s continuous service at Adtalem. The Compensation Committee granted incentive stock options (“ISOs”) with a value of up to the $100,000 Internal Revenue Service (“IRS”) limitation applicable to each one-year vesting period. To the extent this limitation was met for any NEO, the remaining portion of the stock option award was issued in the form of non-qualified stock options. The Compensation Committee recognizes that Adtalem may not receive a tax deduction for ISOs, but weighed this consideration against the tax benefit ISOs provide to employees and the additional enhancement to Adtalem’s ability to attract and retain executives. The Compensation Committee determined it was in Adtalem’s best interest to continue utilizing ISOs in the manner described.

Focusing on Long-Term Results

The Compensation Committee believes that long-term equity compensation is an important retention tool and, therefore, chose to use a four-year ratable vesting schedule for grants of stock options and RSUs and a three-year cliff vesting schedule for PSUs, to encourage longer-term focus and retention.


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Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”)

In addition to the annual equity awards made to the NEOs, an RSU grant was awarded to Mr. Phelan in recognition of his appointment to Interim Chief Financial Officer effective April 24, 2021. The grant will vest 100% on the three-year anniversary of the grant date. Mr. Beck received a sign-on equity award, delivered in RSUs, which will vest ratably over a four-year period consistent with other RSUs granted to the NEOs.

Restricted Stock Units (RSUs): RSUs align the interests of management with those of shareholders and reward long-term value creation. To promote retention, RSUs vest in equal annual installments over a four-year period beginning on the first anniversary of the grant date, subject to the NEO’s continuous service at Adtalem.

Performance Share Units (PSUs): PSUs are designed to reward strong performance based on two financial indicators, ROIC and FCF per share, to focus executives on profitability and effective capital allocation. In fiscal year 2021, PSUs granted to the NEOs were split equally among these two components. These PSUs vest after three years based on ROIC and FCF per share performance, respectively, as compared to the goals outlined in the following tables:

ROIC Performance Goals (FY21-23)
Performance Period       Threshold
(50% Payout)
      Target
(100% Payout)
      Maximum
(150% Payout)
1-Year Goal for Fiscal Year 2021 8.0% 8.8% 9.6%
 
FCF Per Share Performance Goals (FY21-23)
Performance Period Threshold
(50% Payout)
Target
(100% Payout)
Maximum
(150% Payout)
1-Year Goal for Fiscal Year 2021 $2.59 $2.88 $3.17

At the start of the performance period for fiscal year 2021, the average ROIC and FCF per share goals were set for a one-year period as an exception to our normal three-year goal setting process due to challenges in goal setting arising from the COVID-19 pandemic. The Committee further agreed to review and set goals for the remaining two years of the three-year performance period. Similar to goals for the MIP, these goals are based on the multi-year strategic plan. In some cases, stretch goals are built in to help bridge to anticipated future year targets to ensure we are appropriately working towards our long-term strategic plan. In addition, at the onset of fiscal year 2021 we also conducted a comprehensive analysis, examining our payout history, changes to our strategic plan accounting for recent and anticipated corporate transactions and events as well as the target ranges of our closest competitors. This year we also considered the additional challenges as presented by the global pandemic and its impact the business landscape to ensure we are positioning ourselves appropriately considering the market and compared to peers in the industry.

Vesting for performance between threshold and target and between target and maximum is determined by straight-line interpolation.

The 2021 PSU grant design is consistent with the change introduced in fiscal year 2020 such that vesting will be based on performance averaged over the three-year period. This design change was introduced in 2019 following shareholder questions regarding the need for the previous plan design that used two separate performance calculations to determine funding and also serves to preserve the simplified PSU construct introduced in fiscal year 2020.

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Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”)

Fiscal Year 2021 Long-Term Incentive Decisions

For fiscal year 2021, NEOs received the following stock-based awards:

      Stock
Options
      RSUs       PSUs       2021 Long-Term
Incentive Grant
Lisa W. Wardell $ 1,785,580 $ 1,999,953 $ 1,999,840           $ 5,785,373
Robert Phelan(1) $ 47,697 $ 253,628 $ 53,214 $ 354,539
Stephen W. Beard $ 461,377 $ 516,644 $ 516,696 $ 1,494,717
Douglas Beck(2) $ 1,199,824 $ 1,199,824
Kathy Boden Holland $ 327,458 $ 366,744 $ 366,780 $ 1,060,982
Michael O. Randolfi(3) $ 327,458 $ 366,744 $ 366,780 $ 1,060,982
(1)  Reflects the value of the RSU grant made to Mr. Phelan in connection with his appointment as Interim Chief Financial Officer on April 24, 2021.
(2)  Reflects the value of Mr. Beck’s sign-on grant delivered in restricted shares on his date of hire, June 14, 2021.
(3)  Mr. Randolfi forfeited these awards when he resigned from Adtalem effective April 23, 2021.

Payouts from Fiscal Year 2019 Performance Share Awards

Performance share awards granted in August 2018 to Mr. Beard and Ms. Boden Holland, which included both financial-based PSUs, vested in 2021. The PSU awards were split evenly between ROIC and Free Cash Flow per share targets over the three-year performance period. Final funding is based upon the “better of” either, the 3-year average goal achievement, or the sum of each year’s “banked” results divided by 3. The other NEOs did not receive PSUs for the 2018 cycle.

For the FY2019-2021 Plan, the funded result for ROIC is the same in either case at 64.3%, while the “better of result for FCF/share favors the sum of each year’s banked results at 93.8%. The tables below show the performance measures and targets established for the August 2018 PSUs, the performance achieved, and the resulting payout.

Performance Goals Payout
(as a %
of Target)
Goal             Threshold
(50% Payout)
      Target
(100% Payout)
      Maximum
(150% Payout)
     
Financial-Based PSUs
ROIC FY2019 84.8%
ROIC FY2020 56%
ROIC FY2021 52%
ROIC FY2019-2021
(3-year average)
64.3%
Fiscal Year 2019-2021 PSU ROIC Total Payout as a % of Target: 64.3%

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Performance Goals Payout
(as a %
of Target)
Goal             Threshold
(50% Payout)
      Target
(100% Payout)
      Maximum
(150% Payout)
     
Financial-Based PSUs
Free Cash Flow per Share - FY2019 131.2%
Free Cash Flow per Share - FY2020 74.7%
Free Cash Flow per Share - FY2021 75.6%
Free Cash Flow per Share - FY2019-2021
(3-year average)
88.7%
Fiscal Year 2019-2021 PSU Free Cash Flow Total Payout as a % of Target: 93.8%

COMPENSATION SETTING PROCESS

Role of the Compensation Committee

The Compensation Committee determines the appropriate level of compensation for the CEO and other NEOs. The Compensation Committee reviews and approves all components of annual compensation (base salary, annual cash incentive and long-term incentive) to ensure they align with the principles of Adtalem’s compensation program. In addition, the Compensation Committee meets periodically to review the design of the overall compensation program, approve performance targets and review management performance, and it assists in establishing CEO goals and objectives.

Each year, the Compensation Committee recommends CEO compensation to the independent members of the Board, taking into consideration the CEO’s performance evaluation and advice from the independent executive compensation consulting firm engaged by the Compensation Committee. In determining the CEO’s long-term incentive compensation, the Compensation Committee considers Adtalem’s absolute and relative performance, incentive awards to CEOs at comparable companies, past awards and the CEO’s expected future contributions, as well as other factors it deems appropriate.

The Compensation Committee approves base salary, annual cash incentive and long-term incentive compensation for Adtalem’s NEOs, except for the CEO whose compensation package is recommended by the Compensation Committee and approved by the independent members of the Board during executive session.

Role of the Executive Officers and Management

The CEO, in consultation with the Senior Vice President, Chief Human Resources Officer, provides the Compensation Committee with compensation recommendations for the other NEOs, including recommendations for annual base salary increases, annual cash incentive awards, and long-term incentive awards. These recommendations are based on market-competitive compensation data and the CEO’s assessment of each NEO’s performance in the prior year. While these recommendations are given significant weight, the Compensation Committee retains full discretion when determining compensation.

The Compensation Committee reviews and approves, with any modifications it deems appropriate, base salary, annual cash incentive awards and long-term incentive awards for Adtalem’s NEOs.

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Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”)

Role of the Compensation Consultant

The Compensation Committee retains ultimate responsibility for compensation-related decisions. To add objectivity to the review process and inform the Compensation Committee of market trends and practices, the Compensation Committee engages the services of an independent executive compensation advisory firm. For fiscal year 2021, the Compensation Committee engaged Meridian Compensation Partners, LLC (“Meridian”) as its independent executive compensation consultant. F.W. Cook, the Compensation Committee’s previous compensation consultant attended the August 2020 meeting of the Compensation Committee. Meridian attended the meetings from November 2020 through the end of fiscal year 2021.

Meridian reviewed Adtalem’s executive compensation structure and incentive plan designs and assessed whether the executive compensation program is competitive and supports the Compensation Committee’s goal to align the interests of executive officers with those of shareholders, students and other stakeholders.

For fiscal year 2021, Meridian’s primary areas of assistance were:

Gathering information related to current trends and practices in executive compensation, including peer group and broader market survey data;
Reviewing, analyzing and providing recommendations for Adtalem’s list of peer group companies;
Benchmarking competitive pay levels for NEOs and other executives
Reviewing information developed by management for the Compensation Committee and providing input on such information to the Compensation Committee;
Attending and participating in all Compensation Committee meetings and most non-employee director executive sessions, as well as briefings with the Compensation Committee chair and management prior to meetings; and
Reviewing with management and the Compensation Committee the materials to be used in Adtalem’s Proxy Statement.

In the second half of fiscal year 2021, Meridian also conducted a review of our non-employee director compensation program and recommended that we maintain our annual retainer rate throughout fiscal year 2021. Refer to “Director Compensation” beginning on page 36 for more detail.

The Compensation Committee has the sole authority to approve the independent compensation consultant’s fees and terms of the engagement. Thus, the Compensation Committee annually reviews its relationship with, and assesses the independence of, its independent consultant to ensure executive compensation consulting independence. The process includes a review of the services the independent consultant provides, the quality of those services, and fees associated with the services during the fiscal year. The Compensation Committee has assessed the independence of its independent consultants pursuant to applicable SEC rules and NYSE listing standards and has concluded that the independent consultants’ work for the Compensation Committee does not raise any conflict of interest.

Executive Compensation Peer Group

To ensure Adtalem continues to provide total executive compensation that is fair and competitively positioned in the marketplace, the Compensation Committee reviews the pay level, mix and practices of peer group companies. The Compensation Committee does not target any specific percentile levels in establishing compensation levels and opportunities.

While including all large publicly-held, private sector higher education schools, Adtalem’s peer group also includes a broader group of organizations in order to provide more comprehensive compensation data. Adtalem’s expanded peer group includes publicly-held organizations that provide services over an extended period of time. In consideration of Adtalem’s significant focus on healthcare education, which requires attracting and retaining seasoned healthcare professionals and executives, the peer group also includes healthcare services companies. Revenue of most of the peer group organizations is generally between one-half and two times Adtalem’s revenue.

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The following peer group was used for fiscal 2021:

2U Inc. Cross Country Healthcare Laureate Education
Amedisys Ensign Group MEDNAX, Inc.
AMN Healthcare Graham Holdings Company Perdoceo Education
Bright Horizons Family Solutions LLC Grand Canyon Education, Inc. Strategic Education
Brookdale Senior Living Inc. Houghton Mifflin Harcourt Tivity Health
Chegg John Wiley & Sons WW International
Chemed K12

ADDITIONAL EXECUTIVE COMPENSATION PRACTICES

Deferred Compensation

Adtalem maintains the Nonqualified Deferred Compensation Plan that allows certain employees, including the NEOs, to defer up to 50% of salary and 100% of the MIP compensation until termination of service or certain other specified dates. Adtalem credits matching contributions to participants’ accounts to the extent they have elected to defer the maximum contributions under Adtalem’s Retirement Plan, which is a 401(k) plan, and their matching contributions are limited by the Internal Revenue Code of 1986, as amended (the “Code”) provisions.

The Nonqualified Deferred Compensation Plan enables the NEOs and other eligible employees with a certain level of annual compensation to save a portion of their income for retirement on a scale consistent with other employees not subject to IRS limits.

Adtalem has elected to fund its Nonqualified Deferred Compensation Plan obligations through a rabbi trust. The rabbi trust is subject to creditor claims in the event of an insolvency, but the assets held in the rabbi trust are not available for general corporate purpose. Participants have an unsecured contractual commitment by Adtalem to pay the amounts due under the Nonqualified Deferred Compensation Plan.

The value of deferred compensation amounts is quantified each year and this program is periodically reviewed for its competitiveness.

Other Benefits

NEOs are eligible to participate in a number of broad-based benefit programs, which are the same ones offered to most employees at Adtalem, including health, disability and life insurance programs.

We do not offer a defined benefit pension plan, and, therefore, our Retirement Plan and the Nonqualified Deferred Compensation Plan are the only retirement savings vehicles for executives.

In general, we do not provide benefits or perquisites to our NEOs that are not available to other employees, with the exception of personal financial planning services.

Benefits and perquisites make up the smallest portion of each NEO’s total compensation package. The nature and quantity of perquisites provided by Adtalem did not change materially in fiscal year 2021 versus 2020, consistent with our philosophy that benefits and perquisites should not represent a meaningful component of our compensation program. The Compensation Committee periodically reviews the benefit and perquisite program to determine if adjustments are appropriate.

The “All Other Compensation” column of the 2021 Summary Compensation Table shows the amounts of benefit and perquisite compensation we provided for fiscal years 2019, 2020 and 2021 to each of the NEOs.

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Employment Agreements

Adtalem has entered into employment agreements with each NEO that provide for:

Initial annual base salary, subject to annual increases (no decreases except in the case of an across-the-board reduction affecting all executives equally);
Annual cash incentive opportunity under the MIP, targeted at a percentage of base salary;
Benefits and perquisites generally available to senior management;
Reimbursement of expenses consistent with Adtalem’s policy in effect at the time; and
Severance benefits that will be provided upon certain terminations of employment, as further described on page 69 under the caption “2021 Potential Payments Upon Termination or Change-in-Control.”

Employment Agreements

Employment agreements provide NEOs with a guaranteed level of financial protection upon loss of employment. Adtalem believes that providing for such income continuity results in greater management stability and lower unwanted management turnover.

The Compensation Committee believes that agreements provide:

Security and incentives that help retain and attract top executives;
Greater ability for Adtalem to retain key executives following an extraordinary corporate transaction; and
Benefits to Adtalem including non-competition and non-solicitation covenants by NEOs.

Separation Agreements

Adtalem has entered into a separation agreement with Ms. Boden Holland in connection with her resignation as Group President, Medical and Healthcare effective September 30, 2021. Ms. Boden Holland’s severance benefits were conditioned on signing a release of claims which she executed, and Ms. Boden Holland is subject to non-compete and non-solicitation provisions.

Adtalem did not enter into a separation agreement with Mr. Randolfi in connection with his resignation as CFO effective April 23, 2021.

Change-in-Control

Adtalem provides benefits to its NEOs upon termination of employment from Adtalem in specific circumstances. These benefits are in addition to the benefits to which these NEOs would be generally entitled upon a termination of employment (e.g., vested retirement benefits accrued as of the date of termination, stock-based awards that are vested as of the date of termination and the right to elect continued health coverage pursuant to COBRA). In addition, as of November 8, 2017, when our shareholders approved the Fourth Amended and Restated Incentive Plan of 2013 (the “2013 Incentive Plan”), Adtalem’s equity compensation plans, and the award agreements used to implement them, provide for accelerated vesting of outstanding equity awards in the event of a change-in-control of Adtalem, only in the event (a) Adtalem (or its successor) ceases to be publicly traded, (b) the successor to Adtalem fails to assume outstanding awards or to issue new awards in replacement of outstanding awards, or (c) if the participant is terminated without cause or resigns for good reason within two years following the change-in-control.

See “2021 Potential Payments Upon Termination or Change-in-Control” beginning on page 69 for a detailed description of potential payments and benefits to the NEOs under Adtalem’s compensation plans and arrangements upon termination of employment or a change of control of Adtalem.

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OTHER EXECUTIVE COMPENSATION CONSIDERATIONS AND POLICIES

Stock Ownership Guidelines

Stock ownership guidelines have been in place for our directors and executive officers since 2010 and are intended to align their interests with our shareholders by requiring them to be subject to the same long-term stock price volatility our shareholders experience. Each of our non-employee Board members are expected to maintain ownership of Adtalem Common Stock valued at or equal to five times their annual retainer.

For fiscal year 2021, required ownership levels for executive officers remained consistent with those put in place in fiscal year 2020 as described in the table below:

Linking Compensation to Stock Performance

Stock ownership guidelines tie the compensation of the NEOs to our stock performance, since the increase or decrease in our stock price impacts their personal holdings. Currently, all NEOs and directors who are no longer subject to a phase-in period have met the minimum ownership requirements.


Position         NEOs         Number of Shares Equivalent to:
CEO Lisa W. Wardell 5 times base salary
CFO vacant 3 times base salary
COO Stephen W. Beard 3 times base salary
Key operational leaders Kathy Boden Holland 2 times base salary
All other executive officers Douglas Beck and
Robert Phelan
1 1/2 times base salary

Our directors and executive officers have five years following their election, date of appointment or promotion to an executive officer position, as the case may be to achieve their stock ownership level. Additionally, our executive officers have until the later of five years from their appointment or adoption of the increased guidelines to achieve the new stock ownership levels.

Shares that count toward satisfaction of the guidelines include Adtalem’s Common Stock directly and/or beneficially owned, Adtalem’s Common Stock held in Adtalem’s Retirement Plan, Adtalem’s Common Stock held in Adtalem’s Nonqualified Deferred Compensation Plan, and the after-tax value of unvested RSUs and PSUs and/or vested in-the-money options, provided that these make up no more than 50% of the ownership expectation.

Our stock ownership guidelines are deemed to continue to be met by an individual who has achieved the required ownership level but then falls below solely due to a decline in Adtalem’s Common Stock price. Absent extenuating circumstances, executives who have not yet met the guidelines at the end of their five-year phase-in period are required to retain, until the guidelines are satisfied, 100% of the after-tax shares received from option exercises or the vesting of RSUs or PSUs.

Incentive Compensation Recoupment Policy

Adtalem has adopted an incentive compensation recoupment policy that applies to all executive officers. The policy provides that, in addition to any other remedies available to Adtalem (but subject to applicable law), if the Board or any committee of the Board determines that it is appropriate, Adtalem may recover (in whole or in part) any incentive payment, commission, equity award or other incentive compensation received by an executive officer of Adtalem to the extent that such incentive payment, commission, equity award or other incentive compensation is or was paid on the basis of any financial results that are subsequently restated due to executive officer conduct that is determined by the independent directors to have been knowingly or intentionally, fraudulent or illegal.

Deductibility of Compensation

Adtalem analyzes the overall expense arising from aggregate executive compensation, as well as the accounting and tax treatment of such programs. Section 162(m) of the Code generally disallows a tax deduction to publicly traded companies for certain compensation in excess of $1 million per year paid to “covered employees.” “Covered employees” include the Chief Executive Officer, the Chief Financial Officer and the three other most highly compensated officers. Once an executive officer qualifies as a covered employee, he or she will continue to be treated as a covered employee indefinitely, even after ceasing to serve as an executive officer or separating from Adtalem. Historically, the company’s compensation plans were structured so that compensation would be performance-based and deductible under Section 162(m) of the Code. However, The Tax Cuts and Jobs Act enacted on December 22, 2017 eliminated the performance-based compensation exemption

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Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”)

from the Section 162(m) $1 million per year dollar deduction limit, with an exception for certain “grandfathered agreements” in effect on November 2, 2017. The company intends to administer outstanding “grandfathered agreements” and plans to the extent compatible with business needs to preserve potential deductions.

The Compensation Committee views the tax deductibility of executive compensation as one factor to be considered in the context of its overall compensation philosophy. The Compensation Committee reviews each material element of compensation on a continuing basis and believes that shareholder interests are best served by not restricting the Compensation Committee’s discretion and flexibility in crafting compensation programs, even though such programs may result in certain non-deductible compensation expenses. Accordingly, the Compensation Committee has approved and may in the future approve compensation arrangements for executive officers that are not fully deductible.

Compensation Risk Analysis

The Compensation Committee, with the assistance of its consultant, Meridian Compensation Partners, LLC, conducted an annual assessment of our compensation program to ensure it does not encourage unnecessary or excessive risk taking that could have an adverse effect on Adtalem.

The risk assessment covered all compensation programs, including those in which our top executives and NEOs participate.

Through this process, Meridian and the Compensation Committee have concluded that Adtalem’s compensation programs do not encourage behaviors that could create material risk to the organization. More specifically, the Compensation Committee concluded that:

Adtalem’s compensation programs are well-designed to encourage behaviors aligned with the long-term interests of shareholders.
There is appropriate balance in the executive compensation program structure to mitigate compensation-related risk with fixed and variable pay, cash and equity, corporate and business unit goals, financial and non-financial goals, and formulas and discretion.
The Compensation Committee has approved policies to mitigate compensation risk, including stock ownership guidelines, insider-trading prohibitions, and clawbacks.
Additionally, the Compensation Committee exercises an appropriate level of independent oversight into compensation decisions and related risk.

Prohibition on Hedging and Pledging

Our insider trading policy prohibits employees and directors from engaging in any transaction that is designed to hedge or offset any decrease in the market value of equity securities issued by Adtalem. In addition, except as expressly approved by our general counsel, employees and directors may not hold Adtalem securities in a margin account or pledge Adtalem securities as collateral for a loan. None of our executive officers or directors have requested approval to hold Adtalem securities in a margin account or to pledge Adtalem securities.

COMPENSATION COMMITTEE REPORT

The Compensation Committee of the Board hereby furnishes the following report to the shareholders of Adtalem in accordance with rules adopted by the SEC. The Compensation Committee has reviewed and discussed the Compensation Discussion & Analysis of this Proxy Statement with Adtalem’s management and, based on such review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion & Analysis be included in this Proxy Statement.

This report is submitted on behalf of the members of the Compensation Committee:

Michael W. Malafronte, Chair
William W. Burke
Lyle Logan
Kenneth J. Phelan

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2021 SUMMARY COMPENSATION TABLE

This table shows the compensation of each of our NEOs for fiscal years ended June 30, 2021, June 30, 2020 and June 30, 2019, respectively.

Name and
Principal Position
      Year       Salary
($)(1)
      Bonus
($)(2)
      Stock
Awards
($)(3)
      Option
Awards
($)(4)
      Non-Equity
Incentive Plan
Compensation
($)(5)
      All Other
Compensation(6)
($)
      Total
($)
Lisa W. Wardell
Chairman of the Board,
Chief Executive Officer
and President
2021 1,100,000 3,999,793 1,785,580 1,489,813 153,247 8,528,433
2020 1,100,000 2,819,481 1,720,074 1,198,082 133,442 6,971,079
2019 1,083,654 1,135,605 153,935 2,373,194
Robert J. Phelan(7)
Interim Chief
Financial Officer
2021 350,000 60,000 306,842 47,697 242,104 37,493 1,044,136
Stephen W. Beard
Chief Operating Officer
2021 600,020 1,033,340 461,377 619,200 87,943 2,801,880
2020 597,558 600,084 365,919 562,723 40,534 2,166,818
2019 535,700 449,790 324,666 388,913 23,341 1,722,410
Douglas G. Beck(8)
Senior Vice President,
General Counsel and
Corporate Secretary
2021 1,199,824 17,490 1,217,314
Kathy Boden Holland
Group President,
Medical and Healthcare
Education
2021 592,250 733,524 327,458 458,727 60,034 2,171,993
2020 588,933 540,207 329,412 378,611 52,527 1,889,690
2019 575,000 450,279 324,666 405,226 39,054 1,794,225
Michael O. Randolfi(9)
Former Senior Vice
President and Chief
Financial Officer
2021 519,231 733,524 327,458 19,292 1,599,505
2020
 
 
484,615 400,000 2,499,697 457,611 354,640 14,895 4,211,458
(1) This column shows the salaries paid by Adtalem to its NEOs in fiscal years 2021, 2020, and 2019. The following NEOs have elected to defer a portion of their salaries under the Nonqualified Deferred Compensation Plan: Ms. Wardell ($309,132 for 2021, $261,230 for 2020, and $32,510 for 2019); Mr. Beard ($144,477 for 2021 and $9,975 for 2020); and Ms. Boden Holland ($263,714 for 2021, $485,124 for 2020, and $35,385 for 2019). Amounts shown are inclusive of these deferrals.
(2) This column includes (i) the $60,000 sign-on bonus paid to Mr. Phelan in fiscal year 2021; and (ii) the $400,000 signing bonus paid to Mr. Randolfi in fiscal year 2020.
(3) This column includes a sign-on grant value of $1,199,824 to Mr. Beck delivered in restricted shares in fiscal year 2021 and a sign-on grant value of $1,749,919 to Mr. Randolfi delivered in restricted shares in fiscal year 2020. The amounts reported in the Stock Awards column represents the grant date fair value of awards of both PSUs and RSUs, which is an estimated value computed in accordance with FASB ASC Topic 718. The assumptions used for fiscal years 2021, 2020, and 2019 calculations can be found at Note 17: Stock-Based Compensation to our audited financial statements in Adtalem’s Annual Report on Form 10-K for the year ended June 30, 2021; Note 17: Stock-Based Compensation to our audited financial statements in Adtalem’s Annual Report on Form 10-K for the year ended June 30, 2020; and Note 5: Stock-Based Compensation to our audited financial statements in Adtalem’s Annual Report on Form 10-K for the year ended June 30, 2019, respectively. The grant date fair values of the PSUs are based on the probable outcome of the performance conditions to which the PSUs are subject, and the shares the recipient would receive under such outcome. The 2021 Grants of Plan-Based Awards shows the values of PSU awards, assuming that the highest levels of the performance conditions are achieved. The grant date fair value of the PSUs is $28.61. The grant date fair value of the PSU awards assuming achievement of maximum performance would be: Ms. Wardell – $2,999,760; Mr. Phelan – $79,821; Mr. Beard – $775,044; Ms. Boden Holland – $550,170 and Mr. Randolfi – $550,170.

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(4) The amounts reported in the Options Awards column represent the grant date fair value, which is an estimated value computed in accordance with FASB ASC Topic 718. The assumptions used for fiscal years 2021, 2020, and 2019 calculations can be found at Note 17: Stock-Based Compensation to our audited financial statements in Adtalem’s Annual Report on Form 10-K for the year ended June 30, 2021; Note 17: Stock-Based Compensation to our audited financial statements in Adtalem’s Annual Report on Form 10-K for the year ended June 30, 2020; and Note 5: Stock-Based Compensation to our audited financial statements in Adtalem’s Annual Report on Form 10-K for the year ended June 30, 2019, respectively.
(5) The MIP compensation reported in this column was earned in fiscal years 2021, 2020, and 2019 and paid in fiscal years 2022, 2021, and 2020, respectively, based upon the MIP guidelines. Certain NEOs have elected to defer a portion of their MIP compensation under the Nonqualified Deferred Compensation Plan, specifically: Ms. Wardell ($148,981 for 2021, $119,808 for 2020, and $113,560 for 2019); Mr. Beard ($61,920 for 2021 and $56,272 for 2020); and Ms. Boden Holland ($344,045 for 2021, $189,305 for 2020, and $392,246 for 2019). Amounts shown are inclusive of these deferrals.
(6) The amounts indicated in the “all other compensation” column for 2021 include the following:
Matching contributions credited under the Retirement Plan for Ms. Wardell ($11,838); Mr. Phelan ($16,004); Mr. Beard ($16,916); Ms. Boden Holland ($15,823); and Mr. Randolfi ($8,308).
Company contributions credited under the Nonqualified Deferred Compensation Plan for Ms. Wardell ($123,323); Mr. Beard ($54,049); and Ms. Boden Holland ($42,518).
Group life insurance premiums paid by Adtalem for Ms. Wardell ($2,086); Mr. Phelan ($1,489); Mr. Beard ($978); Ms. Boden Holland ($1,693); and Mr. Randolfi ($685).
Personal financial planning services for Ms. Wardell ($16,000); Mr. Beard ($16,000); and Mr. Randolfi ($8,000).
Monthly stipend of $10,000 per month paid to Mr. Phelan in his role as interim Chief Financial Officer for Mr. Phelan ($20,000).
Lump sum payout of unused vacation days for Mr. Randolfi ($2,299).
(7) Mr. Phelan was appointed Interim Chief Financial Officer on April 24, 2021.
(8) Mr. Beck joined Adtalem as Senior Vice President, General Counsel and Corporate Secretary on June 14, 2021.
(9) Mr. Randolfi resigned effective April 23, 2021.

Employment Agreements with Chief Executive Officer and Other Named Executive Officers

Adtalem has entered into employment agreements with each of its NEOs, which are described on pages 69-70 under the caption “Employment Agreements.”

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2021 GRANTS OF PLAN-BASED AWARDS

This table sets forth information regarding non-equity incentive plan awards, equity incentive plan awards, RSUs and stock options granted to the NEOs in fiscal year 2021.

Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards
(1)
Estimated Future Payouts
Under Equity Incentive
Plan Awards(5)
All Other
Stock
Awards:
Number of
Shares of
Stock or
Units
(#)
All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)(6)
  Exercise
or Base
Price of
Option
Awards
($/sh)(7)
Grant
Date Fair
Value of
Stock and
Option
Awards(8)
Grant Date     Threshold
($)(2)
    Target
($)(3)
    Maximum
($)(4)
    Threshold
(#)
    Target
(#)
   

Maximum
(#)
               
Lisa W. Wardell
605,000   1,210,000 2,420,000
11/17/2020 34,950 69,900 104,850 $ 1,999,840
8/26/2020 146,000 32.03 $ 1,785,580
8/26/2020 62,440 $ 1,999,953
Robert J. Phelan(9)
100,877 201,753 403,506
11/17/2020 930 1,860 2,790 $ 53,214
8/26/2020 3,900 32.03 $ 47,697
8/26/2020 1,670 $ 53,490
5/12/2021 5,440 (9)  $ 200,138
Stephen W. Beard
240,008 480,016 960,032
11/17/2020 9,030 18,060 27,090 $ 516,696
8/26/2020 37,725 32.03 $ 461,377
8/26/2020 16,130 $ 516,644
Douglas G. Beck(10)
7,671 15,342 30,684
6/14/2021 31,140 (10)  $ 1,199,824
Kathy Boden Holland
207,288 414,575 829,150
11/17/2020 6,410 12,820 19,230 $ 366,780
8/26/2020 12,820 32.03 $ 327,459
8/26/2020 11,450 $ 366,744
Michael O. Randolfi
195,945 391,890 783,780
11/17/2020 6,410 12,820 19,230 $ 366,780
8/26/2020 26,775 32.03 $ 327,458
8/26/2020 11,450 $ 366,744
(1)

Payouts under the MIP were based on performance in fiscal year 2021. Therefore, the information in the “Threshold,” “Target” and “Maximum” columns reflect the range of potential payouts when the performance goals were set on August 26, 2020. The amounts actually paid under the MIP for fiscal year 2021 appear in the “Non-Equity Incentive Plan Compensation” column of the 2021 Summary Compensation Table.

(2)

Pursuant to the MIP, performance below a performance goal threshold will result in no payment with respect to that performance goal. If a performance goal threshold is met, then the amount shown in this column represents the minimum incentive payment, 50% of the target.

(3)

The amount shown in this column represents the target incentive payment under the MIP, which is calculated as a set percentage of base salary.

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(4)

Pursuant to the MIP, the amount shown in this column represents the maximum incentive payment, 200% of the target.

(5)

PSUs were granted under the 2013 Incentive Plan. The awards consist of 50% with a target based on ROIC over a period of three fiscal years and 50% with a target based on FCF per share over a period of three fiscal years. PSUs will pay out 0% for below threshold performance, and between 50% of target payout for threshold performance and 150% of target for achieving maximum performance or above. Straight-line interpolation will be used to determine achievement between threshold and target.

(6)

Stock option awards on August 26, 2020 were issued as part of the annual incentive award under the 2013 Incentive Plan, which become exercisable at 25% per year for four years beginning on the first anniversary of the date of grant and have a maximum term of ten years.

(7)

All options granted on August 26, 2020 have an exercise price equal to the closing sales price of the Common Stock on the date of grant.

(8)

This column shows the grant date fair value of PSUs (assuming payout at target value) granted on November 17, 2020 and RSUs and stock options granted on August 26, 2020, in fiscal year 2021, computed in accordance with FASB ASC Topic 718, which was $12.23 for stock options, $32.03 for RSUs, and $28.61 for PSUs. Also see Note 17: Stock-Based Compensation to our audited financial statements in Adtalem’s Annual Report on Form 10-K for the year ended June 30, 2021 for an explanation of the assumptions made by Adtalem in the valuation of stock option awards.

(9)

These RSUs were granted in connection with Mr. Phelan’s appointment as Interim Chief Financial Officer.

(10)

These RSUs were granted in connection with Mr. Beck’s onboarding package when joining Adtalem to replace awards he forfeited when he resigned from his former employer.

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2021 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

This table sets forth information for each NEO with respect to stock options, RSUs and PSUs held by the NEOs as of June 30, 2021.

Option Awards Stock Awards
Name     Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
    Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
    Option
Exercise
Price
($)
    Option
Expiration
Date
(1)
    Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)(2)
    Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)(3)
    Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other Rights
That Have
Not Vested
(#)(4)
    Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other Rights
That Have
Not Vested
($)(5)
Lisa W. Wardell 179,589 17.54 5/26/2026
180,318 23.78 8/25/2026
167,988 167,987 33.90 8/23/2027
25,325 75,975 43.39 8/28/2029
146,000 32.03 8/26/2030 78,685 2,804,333 113,220 4,035,161
Robert J. Phelan 3,900 32.03 8/26/2030
12,957 461,787 1,860 66,290
Stephen W. Beard 7,737 7,738 49.05 8/22/2028
5,387 16,163 43.39 8/28/2029
37,725 32.03 8/26/2030
23,231 827,953 31,860 1,135,490
Douglas G. Beck 31,140 1,109,830
Kathy Boden Holland 7,737 7,738 49.05 8/22/2028
4,850 14,550 43.39 8/28/2029
26,775 32.03 8/26/2030
17,451 621,954 32,670 1,164,359
Michael O Randolfi 6,737 43.39 4/24/2022
(1)

The table below details the vesting schedule for stock option grants based on the termination date of the relevant grant. In general, option grants vest 25% on each of the first four anniversaries of the date of grant, except for Ms. Wardell’s August 23, 2027 expiration dated grant related to a double grant awarded that vests 50% on each of the third and fourth anniversaries of the date of grant. Ms. Wardell’s May 26, 2026 expiration dated grant relates to an option granted to her as part of an initial sign-on award granted upon her appointment as President and CEO to compensate for forgone compensation at her prior employer and to align her compensation with Adtalem’s performance.


      Option Expiration Dates Grant Dates Option Vesting Dates
8/22/2028       8/22/2018       8/22/2019       8/22/2020       8/22/2021       8/22/2022
8/28/2029 8/28/2019 8/28/2020 8/28/2021 8/28/2022 8/28/2023
8/26/2030 8/26/2020 8/26/2021 8/26/2022 8/26/2023 8/26/2024

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(2)

The table below details the vesting schedule for RSUs, which vest 25% on each of the first four anniversaries of the date of grant, except for Mr. Phelan’s February 12, 2020 and May 12, 2021 dated grants. In addition to the annual grant, Mr. Phelan received a RSU grant on February 12, 2020 as part of an initial sign-on award granted upon his appointment as Chief Accounting Officer, which vests 33% on each of the first, second, and third anniversaries of the date of grant and a RSU grant on May 12, 2021 as part of compensation upon his appointment as Interim Chief Financial Officer, which vests 100% on the third anniversary of the date of grant.


      Name Grant Date Number of RSUs Vesting
      Year 1 Year 2 Year 3 Year 4 Total
Lisa W. Wardell       8/28/2019             5,415       5,415       5,415       16,245
Lisa W. Wardell 8/26/2020 15,610 15,610 15,610 15,610 62,440
Robert J. Phelan 2/12/2020 2,923 2,924 5,847
Robert J. Phelan 8/26/2020 417 418 417 418 1,670
Robert J. Phelan 5/12/2021 5,440 5,440
Stephen W. Beard 2/13/2018 1,348 1,348
Stephen W. Beard 8/22/2018 1,147 1,148 2,295
Stephen W. Beard 8/28/2019 1,153 1,152 1,153 3,458
Stephen W. Beard 8/26/2020 4,032 4,033 4,032 4,033 16,130
Douglas G. Beck 6/14/2021 7,785 7,785 7,785 7,785 31,140
Kathy Boden Holland 5/9/2018 1,358 1,358
Kathy Boden Holland 8/22/2018 765 765 1,530
Kathy Boden Holland 8/28/2019 1,038 1,037 1,038 3,113
Kathy Boden Holland 8/26/2020 2,862 2,863 2,862 2,863 11,450
(3)

Represents the value derived by multiplying the number of shares of Common Stock covered by RSUs granted by $35.64 (the closing market price of Adtalem’s Common Stock on June 30, 2021).

(4)

The table below details the vesting schedule for PSUs. In general, PSUs vest following the third anniversary of their grant date.


      Name       Grant Date       Vesting
Date
      Number of PSUs
Vesting at Target
Lisa W. Wardell 8/28/2019 8/28/2022 43,320
Lisa W. Wardell 11/17/2020 8/26/2023 69,900
Robert J. Phelan 11/17/2020 8/26/2023 1,860
Stephen W. Beard 8/22/2018 8/22/2021 4,580
Stephen W. Beard 8/28/2019 8/28/2022 9,220
Stephen W. Beard 11/17/2020 8/26/2023 18,060
Kathy Boden Holland 5/9/2018 8/22/2021 5,430
Kathy Boden Holland 8/22/2018 8/22/2021 6,120
Kathy Boden Holland 8/28/2019 8/28/2022 8,300
Kathy Boden Holland 11/17/2020 8/26/2023 12,820
(5)

Represents the value derived by multiplying the number of shares of Common Stock covered by the PSUs by $35.64 (the closing market price of Adtalem’s Common Stock on June 30, 2021). The value provided assumes a PSU payout at target value.

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2021 OPTIONS EXERCISES AND STOCK VESTED

This table provides information for the NEOs concerning stock options that were exercised and PSUs and RSUs that vested during fiscal year 2021.

Option Awards Stock Awards
Name Number of
Shares Acquired
on Exercise
(#)
Value Realized
on Exercise
($)(1)
Number of
Shares Acquired
on Vesting
(#)
Value Realized
on Vesting
($)(2)
Lisa W. Wardell       26,237       971,525       141,120       4,676,918
Robert J. Phelan 2,923 118,849
Stephen W. Beard 3,647 131,325
Douglas G. Beck
Kathy Boden Holland 3,159 110,073
Michael O. Randolfi 17,572 587,081
(1)

Value Realized on Exercise. If the exercise was executed as part of a cashless transaction where the shares acquired were immediately sold, this represents the difference between the sales price of the shares acquired and the option exercise price multiplied by the number of shares of Common Stock covered by the options exercised. If the exercise was executed as part of a buy and hold transaction, this represents the difference between the closing market price of the Common Stock for the date of exercise of the option and the option exercise price multiplied by the number of shares of Common Stock covered by the options held.

(2)

Value Realized on Vesting. For Ms. Wardell, this amount includes PSUs originally granted in August 2017 that vested in August 2020 and RSUs originally granted in August 2016 and August 2019 that vested in August 2020. For Mr. Phelan, this amount represents RSUs originally granted in February 2020 that vested in February 2021. For Mr. Beard, this amount represents RSUs originally granted in February 2018 that vested in February 2021 and RSUs originally granted in August 2018 and August 2019 that vested in August 2020. For Ms. Boden Holland, this amount represents RSUs originally granted in May 2018 that vested in May 2021 and RSUs originally granted in August 2018 and August 2019 that vested in August 2020. For Mr. Randolfi, this amount represents RSUs originally granted in August 2019 that vested in August 2020.

2021 NONQUALIFIED DEFERRED COMPENSATION

This table sets forth information about activity for NEOs in our Nonqualified Deferred Compensation Plan during fiscal year ended June 30, 2021.

Name       Executive
Contributions
in Last
Fiscal Year
($)(1)
      Registrant
Contributions
in Last
Fiscal Year
($)(2)
      Aggregate
Earnings
in Last
Fiscal Year
($)(3)
      Aggregate
Balance at
Last Fiscal
Year End
($)(4)
Lisa W. Wardell 309,132 360,967 1,803,407
Robert J. Phelan
Stephen W. Beard 144,477 657 155,720
Douglas G. Beck
Kathy Boden Holland 263,714 332,762 1,295,963
Michael O. Randolfi
(1)

Executive Contributions in Last Fiscal Year. The amount of executive contributions made by each NEO and reported in this column is included in each NEO’s compensation reported on the 2021 Summary Compensation Table, either in the “Salary” or “Non-Equity Incentive Plan Compensation” column. See footnotes 1 and 5 of the 2021 Summary Compensation Table for specific deferrals made by each NEO.

(2)

Registrant Contributions in Last Fiscal Year. The amount of Adtalem contributions made and reported in this column is included in each NEO’s compensation reported on the 2021 Summary Compensation Table in the “All Other Compensation” column.

(3)

Aggregate Earnings in Last Fiscal Year. These amounts represent the earnings in the Nonqualified Deferred Compensation Plan for fiscal year 2021. These amounts are not reported in the 2021 Summary Compensation Table.

(4)

Aggregate Balance at Last Fiscal Year End. The aggregate balance as of June 30, 2021 reported in this column for each NEO reflects amounts that either are currently reported or were previously reported as compensation in the 2021 Summary Compensation Table for current or prior years, except for the aggregate earnings on deferred compensation.

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DEFERRED COMPENSATION PLAN

The Nonqualified Deferred Compensation Plan covers directors and selected key employees approved for participation by the Compensation Committee. All of the NEOs are eligible to participate in the Nonqualified Deferred Compensation Plan. Under the Nonqualified Deferred Compensation Plan as it applies to employees, participants may make an advance election to defer up to 50% of salary and up to 100% of MIP compensation until termination of service with Adtalem or certain other specified dates. Adtalem credits matching contributions to participants’ accounts under the Nonqualified Deferred Compensation Plan to the extent they have elected to defer the maximum amount under Adtalem’s Retirement Plan, and their matching contributions to the Retirement Plan are limited by applicable Code provisions. Adtalem may also credit participants’ accounts with discretionary contributions. Participants are fully vested in their own deferral and matching contributions, plus earnings, and will vest in discretionary contributions, if any, as determined by the Compensation Committee. Participants may elect to have their Nonqualified Deferred Compensation Plan accounts credited with earnings based on various investment choices made available by the Compensation Committee for this purpose. Participants may elect to have account balances paid in a lump sum or in installments. Distributions are generally made or commence in January of the year following termination of employment (but not earlier than six months after termination) or January of the year in which the specified payment date occurs. In the event of death before benefits commence, participants’ accounts will be paid to their beneficiaries in a lump sum.

2021 POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL

Adtalem provides benefits to the NEOs upon termination of employment from Adtalem in specific circumstances. These benefits are in addition to the benefits to which these NEOs would be generally entitled upon a termination of employment (i.e., vested retirement benefits accrued as of the date of termination, stock-based awards that are vested as of the date of termination and the right to elect continued health coverage pursuant to COBRA). In addition, Adtalem’s equity compensation plans and the stock award agreements used to implement them provide for accelerated vesting of outstanding stock awards in the event of a change-in-control of Adtalem, only in the event (a) Adtalem (or its successor) ceases to be publicly traded, (b) the successor to Adtalem fails to assume outstanding awards or to issue new awards in replacement of outstanding awards, or (c) if the participant is terminated without cause or resigns for good reason within two years following the change-in-control.

Employment Agreements

MS. WARDELL

Adtalem entered into an employment agreement with Ms. Wardell effective as of her May 24, 2016 appointment as President and CEO. The employment agreement provides, among other things, that if her employment is terminated by Adtalem without “cause” or by Ms. Wardell with “good reason,” and if she executes a release of claims, she will be entitled to a lump sum payment equal to 12 months of base salary and a prorated MIP award based on actual performance for the fiscal year and paid in a lump sum at the same time MIP awards are paid to other employees.

If such termination of employment occurs within 12 months of a “change-in-control,” and she executes a release of claims, she will be entitled to (i) a lump sum payment equal to two times base salary and the average of the MIP award paid to her for the prior two fiscal years; and (ii) accelerated vesting of all outstanding stock options.

Effective September 8, 2021, Adtalem entered into a new employment agreement with Ms. Wardell in connection with her appointment as Executive Chairman.


3 Effective September 8, 2021, Adtalem entered into a new employment agreement in connection with Mr. Beard’s appointment as President and Chief Executive Officer.

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OTHER NEOs

During 2021, Adtalem was party to similar employment arrangements with each of the other NEOs: Mr. Beard3, Mr. Beck, and Ms. Boden Holland. Adtalem and Mr. Phelan are parties to a Letter Agreement. Adtalem also had an employment agreement with Mr. Randolfi. These employment agreements provide, among other things, that if the NEO’s employment with Adtalem is terminated by Adtalem without “cause” or by the NEO with “good reason”, and the NEO executes a release of claims, then the NEO will be entitled to the following benefits:

One and one-half times the sum of their base salary plus target MIP award, payable in 18 equal monthly payments for Mr. Beard, Mr. Beck, and Ms. Boden Holland;
A pro-rated MIP award (if employed for at least six months in the fiscal year during which termination occurs) based on actual performance for the relevant fiscal year, paid in a lump sum at the time MIP awards are paid to other employees;
18 months of continued health benefit plan coverage for Mr. Beard, Mr. Beck, and Ms. Boden Holland at active employee rates following the termination date; and
Access to a senior executive level outplacement program for 9 months for Mr. Beard, Mr. Beck, and Ms. Boden Holland.

In addition, the employment arrangements provide that if such termination occurs within 12 months of a “change-incontrol”, and the NEO executes a release of claims, then the NEO will be entitled to the following benefits:

Two times the sum of their base salary plus target MIP award, payable in 24 equal monthly payments for Mr. Beard, Mr. Beck, and Ms. Boden Holland;
A pro-rated MIP award (if employed for at least six months in the fiscal year during which termination occurs) based on actual performance for the relevant fiscal year, paid in a lump sum at the time MIP awards are paid to other employees;
24 months of continued health benefit plan coverage for Mr. Beard, Mr. Beck, and Ms. Boden Holland at active employee rates following the termination date; and
Access to a senior executive level outplacement program for 12 months for Mr. Beard, Mr. Beck, and Ms. Boden Holland.

For purposes of all employment agreements:

“cause” means (i) the commission of a felony or other crime involving moral turpitude or the commission of any other act or omission involving misappropriation, dishonesty, fraud, illegal drug use or breach of fiduciary duty, (ii) willful failure to perform duties as reasonably directed by the CEO, (iii) the NEO’s gross negligence or willful misconduct with respect to the performance of the NEO’s duties under the employment agreement, (iv) obtaining any personal profit not fully disclosed to and approved by Adtalem’s Board in connection with any transaction entered into by, or on behalf of, Adtalem, or (v) any other material breach of the employment agreement or any other agreement between the NEO and Adtalem;
“change-in-control” shall have the meaning set forth in the 2013 Incentive Plan; and
“good reason” means, without the NEO’s consent, (i) material diminution in title, duties, responsibilities or authority, (ii) reduction of base salary, MIP target or employee benefits except for across-the-board changes for executives at the NEO’s level, (iii) exclusion from executive benefit/compensation plans, (iv) material breach of the employment agreement that Adtalem has not cured within 30 days after the NEO has provided Adtalem notice of the material breach which shall be given within 60 days of the NEO’s knowledge of the occurrence of the material breach, or (v) resignation in compliance with securities, corporate governance or other applicable law (such as the US Sarbanes-Oxley Act) as specifically applicable to the NEO. For Mr. Beard and Ms. Boden Holland, the definition of “good reason” also includes, without the NEO’s consent, requiring the NEO to relocate to an employment location more than 50 miles from the NEO’s current employment location.

EQUITY AWARD PLANS

The equity award agreements under which options, RSUs and PSUs are held by employees, including the NEOs, provide for the immediate vesting of unvested options and RSUs and of PSUs at the target levels in the event of a change-in-control of Adtalem, only in the event (a) Adtalem (or its successor) ceases to be publicly traded, (b) the successor to Adtalem fails to assume outstanding awards or to issue new awards in replacement of outstanding awards, or (c) if the participant is terminated without cause or resigns for good reason within two years following the change-in-control.

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Executive Compensation Tables

The provisions of the equity award agreements under which options, RSUs and PSUs were granted to employees, including the NEOs, provide the following:

If the participant’s employment is terminated due to death or disability (as defined in the agreement), options will become fully vested and exercisable for the remaining term of the option, RSUs will fully vest, and PSUs will continue to vest in accordance with their terms.
If the participant’s employment terminates due to mutual agreement, the participant will be credited with one additional year of service for the purpose of determining vesting of options, RSUs and PSUs. The participant’s options will remain exercisable until the earlier of one year from termination or the expiration of the term of the option. PSUs that vest following a termination will be paid out when paid out to other PSU recipients.
If the participant’s employment terminates due to retirement, options will continue to vest and be exercisable, and RSUs and PSUs will continue to vest in accordance with their respective terms. Retirement means the participant’s termination without cause after age 55 when the sum of his or her age and full years of service equals or exceeds 65.

In August 2017, the Board adopted double-trigger vesting of equity awards as part of the 2013 Incentive Plan. In November 2017, Adtalem’s shareholders approved the 4th Amended 2013 Incentive Plan. As a result, vesting of equity awards granted since November 2017 (the “Awards”) will accelerate upon a change-in-control only in the event Adtalem (or its successor) ceases to be publicly traded, or the successor to Adtalem fails to assume outstanding Awards or to issue new awards in replacement of outstanding Awards. Under the new double-trigger vesting rules, newly issued Awards will vest if a participant is terminated without cause or resigns for good reason within two years following a change-in-control. All Awards issued prior to shareholder approval in November 2017 will continue to have a single-trigger vesting rules as described above.

2021 Potential Severance Payments

The tables set forth below quantify the additional benefits as described above that would be paid to each NEO under the following termination of employment or change-in-control events, had such an event occurred on June 30, 2021.

TERMINATION OF EMPLOYMENT — NO CHANGE-IN-CONTROL

Name:       Lisa W.
Wardell
      Robert J.
Phelan
      Stephen W.
Beard
      Douglas G.
Beck
      Kathy Boden
Holland
      Michael O.
Randolfi
(1)
Salary: $ 1,100,000  $ 33,654   $ 900,030     $ 750,000     $ 888,375              $
MIP Target Amount: $ $ $ 720,024 $ 23,013 $ 621,863 $
Pro-Rated MIP: $ 1,489,813 $ 242,104 $ 619,200 $ 17,490 $ 458,727 $  —
Continued Health Coverage: $ $ 9,084 $ 27,252 $ 26,694 $ 26,694 $  —
Outplacement Services: $ $ 10,000 $ 15,000 $ 11,250 $ 11,250 $
TOTAL $ 2,589,813 $ 294,842 $ 2,281,506 $ 828,447 $ 2,006,909 $
(1) Mr. Randolfi received no compensation in connection with his voluntary separation from the Company in April 2021.

TERMINATION OF EMPLOYMENT FOLLOWING A CHANGE-IN-CONTROL

Name:       Lisa W.
Wardell
      Robert J.
Phelan
      Stephen W.
Beard
      Douglas G.
Beck
      Kathy Boden
Holland
Salary: $ 2,200,000 $ 33,654   $ 1,200,040   $ 1,000,000     $ 1,184,500
MIP Target Amount: $ 1,343,947 $ $ 960,032 $ 30,684 $ 829,150
Pro-Rated MIP: $ $ 242,104 $ 619,200 $ 17,490 $ 458,727
Continued Health Coverage: $ $ 9,084 $ 36,336 $ 35,592 $ 35,592
Outplacement Services: $ $ 10,000 $ 20,000 $ 15,000 $ 15,000
Value of Vesting of Unvested Stock
Options, RSUs, and PSUs(1)
$ 7,658,851 $ $ 2,099,630 $ 1,109,830 $ 1,882,970
TOTAL $ 11,202,798 $ 294,842 $ 4,935,238 $ 2,208,596 $ 4,405,939
(1) The value of the unvested stock options is based on the difference between the exercise price and $35.64 (the closing market price of the Common Stock on June 30, 2021). The value of the RSUs and PSUs is based on the closing market price of the Common Stock on June 30, 2021. PSUs vest at the target level.

2021 Proxy Statement     71


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Executive Compensation Tables

CHANGE-IN-CONTROL — NO TERMINATION OF EMPLOYMENT

Name:       Lisa W.
Wardell
      Robert J.
Phelan
      Stephen W.
Beard
      Douglas G.
Beck
      Kathy Boden
Holland
Value of Vesting of Unvested Stock
Options, RSUs, and PSUs(1)
$ 7,658,851            $  $ 2,099,630   $ 1,109,830     $ 1,882,970
(1) The value of the unvested stock options is based on the difference between the exercise price and $35.64 (the closing market price of the Common Stock on June 30, 2021). The value of RSUs and PSUs is based on the closing market price of the Common Stock on June 30, 2021. PSUs vest at target level.

CEO PAY RATIO

Pursuant to Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K, we are required to disclose the median of the annual total compensation of all our employees (except our CEO) and the ratio of the annual total compensation of our President and CEO, Ms. Wardell, as disclosed in the 2021 Summary Compensation Table, to the annual total compensation of our median employee.

In 2021, we identified the median employee by comparing the annual salary rate of pay for all individuals, excluding our CEO, who were employed by Adtalem on June 30, 2021 using information from our company payroll system. We included all full-time and part-time employees, including adjunct faculty and federal work-study student workers, but did not include independent contractors and leased workers. Compensation was annualized for all employees who were hired by us in fiscal year 2021 but did not work for us for the entire year. No annualization was applied to any adjunct faculty or federal work-study student workers as permitted under the rules. Fiscal year 2021 annual total compensation for the median employee was calculated in the same manner as reflected in the 2021 Summary Compensation Table for our CEO.

Based on the methodology described above, we have determined that our estimation of the fiscal year 2021 annual total compensation of our median employee was $76,663. The annual total compensation of our CEO for fiscal year 2021 was $8,528,433, which is the same amount reported for 2021 as Total Compensation in the Summary Compensation Table. Our estimation of the ratio of our CEO’s fiscal year 2021 annual total compensation to the fiscal year 2021 annual total compensation of our median employee is 111:1.

This CEO pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules. The CEO pay ratio reported by other companies may not be comparable to our CEO pay ratio reported above, because SEC rules for identifying the median employee and calculating the pay ratio allow companies to use different methodologies, apply certain exclusions and make reasonable estimates and assumptions that reflect their compensation practices.

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Voting Securities and Principal Holders

EQUITY COMPENSATION PLAN INFORMATION

Adtalem currently maintains two equity compensation plans: the Amended and Restated Incentive Plan of 2005 (the “2005 Incentive Plan”) and the Fourth Amended 2013 Incentive Plan. Adtalem’s shareholders have approved each of these plans.

The following table summarizes information, as of June 30, 2021, relating to these equity compensation plans under which Adtalem’s Common Stock is authorized for issuance.

Plan Category       Number of
securities to
be issued upon
exercise of
outstanding
options, awards,
warrants and rights
(a)(1)
      Weighted-average
exercise price
of outstanding
options, awards,
warrants and rights
(b)
      Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected
in column (a))
(c)(2)
Equity compensation plans approved by
security holders
2,449,054                       $ 32.05 3,688,061
Equity compensation plans not approved by
security holders
Total 2,449,054 $ 32.05 3,688,061
(1) The number shown in column (a) is the number of shares that may be issued upon exercise of outstanding options and other equity awards granted under the shareholder-approved Amended and Restated Incentive Plan of 2005 (78,427 shares) and the Fourth Amended 2013 Incentive Plan (2,370,627 shares).
(2) The number shown in column (c) is the number of shares that may be issued upon exercise of options or stock appreciation rights and other equity awards granted in the future under the Fourth Amended 2013 Incentive Plan. All of the shares remaining available for the grant of future awards of options, warrants, and rights are available under the Fourth Amended 2013 Incentive Plan. No new awards may be granted under the Amended and Restated Incentive Plan of 2005.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

The table below sets forth the number and percentage of outstanding shares of Common Stock beneficially owned by each person known by Adtalem to own beneficially more than 5% of our Common Stock, in each case as of September 24, 2021, except as otherwise noted.

Name       Amount and Nature of
Beneficial Ownership
      Percentage
Ownership
(1)
BlackRock, Inc.                  5,750,474 (2)  11.5%
The Vanguard Group 4,480,054 (3)  9.0%
Dimensional Fund Advisors LP 3,974,832