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PROXY STATEMENT TABLE OF CONTENTS

Table of Contents

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

SCHEDULE 14A

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

Filed by the Registrant ý

Filed by a Party other than the Registrant o o

Check the appropriate box:

o

 

Preliminary Proxy Statement

o

 

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

ý

 

Definitive Proxy Statement

o

 

Definitive Additional Materials

o

 

Soliciting Material under §240.14a-12

 

Janus Capital Group Inc.

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

ý

 

No fee required.

o

 

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
    (1)   Title of each class of securities to which transaction applies:
        
 
    (2)   Aggregate number of securities to which transaction applies:
        
 
    (3)   Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
        
 
    (4)   Proposed maximum aggregate value of transaction:
        
 
    (5)   Total fee paid:
        
 

o

 

Fee paid previously with preliminary materials.

o

 

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

 

(1)

 

Amount Previously Paid:
        
 
    (2)   Form, Schedule or Registration Statement No.:
        
 
    (3)   Filing Party:
        
 
    (4)   Date Filed:
        
 

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GRAPHIC

March 13, 2015

Dear Shareholder:

We cordially invite you to attend the 2015 Annual Meeting of Shareholders ("Annual Meeting") of Janus Capital Group Inc., which will be held at the JW Marriott Hotel, 150 Clayton Lane, Denver, Colorado, on Friday, April 24, 2015, at 10:00 a.m. local time.

At the Annual Meeting, you will be asked to vote on proposals to (i) elect eleven directors named in the accompanying Proxy Statement; (ii) ratify the appointment of our independent auditor; (iii) approve, by non-binding vote, executive compensation (say on pay vote); (iv) approve and adopt an amendment to the Amended and Restated Janus 2010 Long-Term Incentive Stock Plan to increase authorized shares and increase grant limits; and (v) consider other business as may properly come before the meeting.

Pursuant to the rules of the Securities and Exchange Commission, we have elected to provide access to our proxy materials over the Internet. Accordingly, we will mail, on or before March 13, 2015, a Notice of Internet Availability of Proxy Materials ("Notice") to our shareholders of record and beneficial owners as of the close of business on March 2, 2015, the record date for the Annual Meeting. On the date of mailing of the Notice, all shareholders and beneficial owners will have the ability to access all of the proxy materials on the following websites: www.proxyvote.com and at ir.janus.com in the "Documents" subsection under "SEC Filings."

The Notice will also identify (i) the date, time and location of the Annual Meeting; (ii) the matters to be acted upon at the Annual Meeting and the recommendation of our Board of Directors with regard to such matters; (iii) a toll-free telephone number, an email address, and a website where shareholders can request a paper or e-mail copy of the Proxy Statement and a form of proxy relating to the Annual Meeting; (iv) information about how to access and vote using the form of proxy; and (v) information about how to obtain directions to attend the Annual Meeting and vote in person. These proxy materials will be available free of charge.

Your vote is important.    We encourage you to access and read the proxy materials and vote promptly. If you attend the Annual Meeting, you may vote in person even if you previously voted by proxy. Thank you for your interest and support.

Sincerely,

SIGNATURE

Glenn S. Schafer
Chairman of the Board


Table of Contents


PROXY STATEMENT TABLE OF CONTENTS

Important Notice Regarding the Availability of Proxy Material

  1

Voting Information

  1

Shareholders Entitled to Vote

  1

Proposals You May Vote On

  1

Votes Required to Conduct Business at the Annual Meeting

  2

Voting of Proxies by Management Proxy Holders

  2

Votes Required for Each Proposal

  2

How to Vote

  3

Revoking Your Proxy

  4

Postponement or Adjournment of the Annual Meeting

  4

Attendance at the Annual Meeting

  5

Special Instructions Apply for Employee Plan Shares

  5

Cost of Proxy Solicitation

  5

PROPOSAL NO. 1: Election of Directors

  6

Information about Director Nominees

  6

Vote Required for Approval

  12

Retiring and Retired Directors

  12

Corporate Governance

  12

Board Leadership Structure

  12

Board of Directors Independence Determination

  12

Director Nomination Process and Diversity

  12

Board of Directors Meetings and Committees

  13

Risk Oversight

  16

Governance Guidelines and Policies

  16

Officer Code and Corporate Code of Business Conduct

  17

Executive Sessions of the Board of Directors

  17

Director Attendance at Annual Meeting of Shareholders

  18

Communications with the Board of Directors

  18

Compensation Consultants to the Compensation Committee

  18

Certain Relationships and Related Transactions

  18

Director Compensation

  20

Audit Committee Report

  23

PROPOSAL NO. 2: Ratification of the Appointment of Deloitte & Touche LLP as Independent Auditor

  24

Fees Incurred by Janus for Deloitte

  24

Audit Committee Approval Policies and Procedures

  25

Attendance at Annual Meeting

  25

Vote Required for Approval

  25

Stock Ownership of Certain Beneficial Owners and Management

  26

Executive Officers of the Company

  28

Compensation Discussion and Analysis

  29

Letter to Shareholders

  29

Shareholder Outreach and Review of Compensation Practices

  31

Responding to Shareholder Feedback

  31

Outreach to Glass Lewis

  31

Executive Compensation Practices

  32

Analysis of Pay for Performance

  32

Tying CEO Compensation to Company Performance

  32

2014 CEO Compensation Structure

  33

Compensation Committee Decisions about CEO Pay

  34

Actual Total Compensation

  39

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Actual Total Variable Compensation

  40

Other NEO Compensation

  42

Other NEO Compensation Decisions

  43

Tying Other NEO Compensation to Performance

  43

Elements of Executive Compensation

  49

Compensation Program Objectives

  49

Principal Components of the Janus Pay for Performance Approach

  49

Future Executive Compensation Structure

  51

Compensation Decision-Making Process

  51

Risk Considerations

  51

Peer Groups

  51

Role of Compensation Consultants

  53

Role of Executive Officers

  53

Additional Compensation Practices and Policies

  53

Ownership Guidelines

  53

Severance Guidelines

  54

Change in Control

  54

Clawback Policy

  54

Anti-Hedging and Anti-Pledging Policies

  55

Grant Procedures for Long-Term Incentive Awards

  55

Perquisites and Other Benefits

  55

Section 162(m) Compliance

  55

Compensation Committee Report on Executive Compensation

  56

Executive Compensation

  57

Summary Compensation Table

  57

Grants of Plan-Based Awards in 2014

  60

Employment Arrangements with Named Executive Officers

  60

Equity and Other Incentive Compensation Arrangements with Named Executive Officers

  61

Outstanding Equity Awards at 2014 Year-End

  64

2014 Restricted Stock Vested

  65

Pension Benefits

  65

Non-Qualified Deferred Compensation

  65

Termination and Change in Control Arrangements with Named Executive Officers

  65

PROPOSAL NO. 3: Non-Binding Advisory Vote to Approve Executive Compensation (Say on Pay Vote)

  70

Effect of Say on Pay Vote

  70

Vote Required for Approval

  70

PROPOSAL NO. 4: Approval and Adoption of an Amendment to the Amended and Restated Janus 2010 Long-Term Incentive Stock Plan to Increase Authorized Shares and Increase Grant Limits

  71

Summary

  71

Dilution and Historical Share Usage

  72

Terms and Provisions

  73

General Description of the Amended and Restated 2010 LTI Plan

  73

History

  74

Shares Authorized

  74

Eligibility and Participation

  74

Plan Administration

  75

Types of Awards

  75

Performance Criteria

  76

Section 162(m) Awards

  77

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Effect of a Change of Control

  77

Transferability

  77

Change in Capitalization

  77

Term, Amendment and Termination

  77

New Plan Benefits

  78

Federal Income Tax Consequences

  79

Registration with the SEC

  80

Vote Required for Approval

  80

Equity Compensation Plan Information

  81

Section 16(a) Beneficial Ownership Reporting Compliance

  81

Shareholder Proposals for the 2016 Annual Meeting

  82

Householding

  82

Important Notice Regarding Internet Availability of Proxy Materials for the Annual Meeting

  83

APPENDIX A – Amendment to Amended and Restated Janus 2010 Long-Term Incentive Stock Plan

  84

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JANUS CAPITAL GROUP INC.
151 Detroit Street
Denver, Colorado 80206



PROXY STATEMENT

This Proxy Statement, available to shareholders as of March 13, 2015, is provided in connection with the solicitation of proxies by the Board of Directors of Janus Capital Group Inc. ("Board" or "Board of Directors") for the 2015 Annual Meeting of Shareholders ("Annual Meeting") to be held on Friday, April 24, 2015, at 10:00 a.m., local time in Denver, Colorado. In this Proxy Statement, we may refer to Janus Capital Group Inc. as the "Company," "Janus," "we," "us" or "our."

Important Notice Regarding the Availability of Proxy Material

In accordance with rules and regulations of the U.S. Securities and Exchange Commission ("SEC"), instead of mailing a printed copy of the proxy materials to each shareholder of record or beneficial owner, we are furnishing proxy materials, which include this Proxy Statement, to our shareholders over the Internet. If you have received a Notice of Internet Availability of Proxy Materials ("Notice") by mail, you will not receive a printed copy of the proxy materials unless you have previously made a permanent election to receive these materials in hard copy. Instead, the Notice will instruct you as to how you may access and review all of the important information contained in the proxy materials. The Notice also instructs you as to how you may submit your proxy over the Internet. If you received a Notice by mail and would like to receive a printed copy of our proxy materials, you should follow the instructions in the Notice for requesting such materials.

The Notice will be available to shareholders on or before March 13, 2015.

Voting Information

Holders of the Company's common stock, par value $0.01 per share ("common stock"), at the close of business on March 2, 2015 ("Record Date"), are entitled to one vote for each share owned on that date on each matter presented at the Annual Meeting. On the Record Date, 187,239,178 shares of common stock were outstanding and entitled to vote at the Annual Meeting.

 
   
   
   
   
  Voting Matters   Board Vote Recommendation   Page Reference
(for more details)

 
 
    Election of eleven directors   FOR EACH DIRECTOR NOMINEE   6    
  Ratification of Deloitte & Touche LLP as independent auditor for 2015   FOR   24    
    Non-binding advisory vote to approve the Company's 2014 executive compensation   FOR   70    
  Approve and adopt an amendment to the Amended and Restated Janus 2010 Long-Term Incentive Stock Plan to increase authorized shares and increase grant limits   FOR   71    
    Transact other business that properly comes before the meeting   N/A   N/A    

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In order to take any action at the Annual Meeting, a majority of the Company's outstanding shares of common stock as of the Record Date must be present in person or by proxy and entitled to vote at the Annual Meeting, or any adjournment or postponement thereof. This is called a quorum.

The voting results will be tallied by the Inspectors of Election: Broadridge Financial Solutions, Inc. and two members of management. A Current Report on Form 8-K will be filed with the SEC within four business days following the Annual Meeting to report the voting results.

The Board has appointed Mr. Richard M. Weil, our Chief Executive Officer, and Mr. Bruce Koepfgen, our President, as the management proxy holders for the Annual Meeting. Your shares will be voted by the management proxy holders in accordance with the instructions on the proxy card that you properly execute and submit. For shareholders who return their proxy card without indicating how to vote their shares, the proxy will be voted as the Board recommends, which is:

All of the matters we knew about as of the Record Date to be brought before the Annual Meeting are described in this Proxy Statement. If any other matters come before the Annual Meeting to be voted on, the management proxy holders will vote, act, and consent on those matters at their discretion.

A "broker non-vote" occurs when a bank, broker, or other holder of record holding shares for a beneficial owner does not vote on a particular proposal because the broker does not have authority to vote on that particular proposal without receiving voting instructions from the beneficial owner. Under the current rules for the New York Stock Exchange ("NYSE"), brokers have discretionary authority to vote on "routine" matters, which includes the ratification of Deloitte as the Company's independent auditor for 2015. Brokers do not have discretionary authority to vote on "non-routine" proposals, including the election of directors, non-binding advisory vote to approve the Company's 2014 executive compensation, and the approval of an amendment to our Amended and Restated 2010 LTI Plan.

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The following chart describes the proposals to be considered at the meeting, the vote required to elect directors and to adopt each of the other proposals, and the manner in which votes will be counted:

 
   
   
   
   
   
   
  Proposal Voting
Options


Vote Required to Adopt the Proposal
Effect of
Abstentions


Effect of "Broker
Non-Votes"


 
    Election of eleven directors   For, against, or abstain on each nominee   A nominee for director will be elected if the votes cast for such nominee exceed the votes cast against such nominee (see "– Majority Voting Policy" below for more information)   No effect   No effect    
  Ratification of Deloitte & Touche LLP as independent auditor for 2015   For, against, or abstain   The affirmative vote of a majority of the shares of common stock represented at the Annual Meeting and entitled to vote thereon   Treated as votes against   Brokers have discretion to vote    
    Non-binding advisory vote to approve the Company's 2014 executive compensation   For, against, or abstain   The affirmative vote of a majority of the shares of common stock represented at the Annual Meeting and entitled to vote thereon   Treated as votes against   No effect    
  Approve and adopt an amendment to the Amended and Restated Janus 2010 LTI Plan to increase authorized shares and increase grant limits   For, against, or abstain   The affirmative vote of a majority of the shares of common stock represented at the Annual Meeting and entitled to vote thereon   Treated as votes against   No effect    

If a current director does not receive a majority of the votes cast, the director shall offer to tender his or her resignation to the Board. The Nominating and Corporate Governance Committee will make a recommendation to the Board on whether to accept or reject the offer of resignation, or whether other action should be taken. The Board will act on the recommendation of the Nominating and Corporate Governance Committee and publicly disclose its decision within 90 days from the date of the certification of the election results.

As described in the Notice, you may vote by proxy or in person at the Annual Meeting. You may vote by proxy even if you plan to attend the Annual Meeting.

If you hold shares of common stock in your name as a holder of record ("registered shareholder"), you can vote your shares by one of the following methods:

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If your shares are held in a stock brokerage account or by a bank or other holder of record, you are considered the "beneficial owner" of shares held in street name. The Notice has been forwarded to you by your broker, bank or other holder of record who is considered the registered shareholder with respect to those shares. As the beneficial owner, you have the right to direct your broker, bank or other registered shareholder on how to vote your shares by using the voting instruction form included in the mailing or by following their instructions for voting by telephone or on the Internet.

Submitting your proxy prior to the Annual Meeting does not limit your right to vote in person at the Annual Meeting if you decide to do so. If you wish to vote in person at the Annual Meeting, we will pass out written ballots for such purpose as requested; however, if you are a beneficial owner, you must obtain a legal proxy from your broker, bank, or other holder of record and bring it to the Annual Meeting to vote in person at the Annual Meeting. Directions to the Annual Meeting from Denver International Airport are as follows:

If you are a registered shareholder, you may revoke your proxy at any time before your shares are voted at the Annual Meeting by one of the following methods:

If the Annual Meeting is postponed or adjourned, your proxy will still be valid and may be voted at the postponed or adjourned meeting in the manner described in this Proxy Statement. You will still be able to revoke your proxy until it was voted at the postponed or adjourned meeting.

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You will need proof of ownership to enter the Annual Meeting. If you are a beneficial owner of shares and you plan to attend the Annual Meeting, you must present proof, such as a bank or brokerage account statement, of your ownership of Janus common stock as of the Record Date to be admitted to the Annual Meeting.

If you are a registered shareholder, representatives of Janus will confirm your shareholder status at the Annual Meeting. You must present a form of personal identification to be admitted to the Annual Meeting. NO CAMERAS, RECORDING EQUIPMENT, ELECTRONIC DEVICES, BAGS, BRIEFCASES, PACKAGES OR SIMILAR ITEMS WILL BE PERMITTED AT THE ANNUAL MEETING.

Each participant in the Employee Stock Ownership Plan ("ESOP") of Janus and the Kansas City Southern ("KCS") 401(k) Plan may instruct the respective trustee of these plans on how to vote the shares of Janus common stock held on behalf of the participant. The trustee of each plan must receive your voting instructions for the common stock allocated to your ESOP or 401(k) account before April 22, 2015. If the trustee for the Janus ESOP or the KCS 401(k) Plan does not receive your voting instructions before April 22, 2015, it will vote those shares, subject to the requirements of the Employee Retirement Income Security Act of 1974, as amended, in the same proportion as the voting instructions that it receives from other Janus ESOP or KCS 401(k) plan account holders (as applicable). You may vote your shares (i) over the Internet at www.proxyvote.com until 11:59 p.m. EDT on April 21, 2015; (ii) by telephone, toll-free at 1-800-690-6903 until 11:59 p.m. EDT on April 21, 2015; or (iii) by requesting a paper proxy card from Janus in accordance with the instructions contained in the Notice and completing, signing, and dating the proxy card and returning it so that it is received by April 21, 2015.

On March 2, 2015, there were 1,353,105 outstanding Janus shares in the Janus ESOP and 213,344 outstanding Janus shares in the KCS 401(k) Plan.

Cost of Proxy Solicitation

We will pay the expenses of preparing the Notice and other proxy materials and the solicitation by the Board of Directors of your proxy. Our directors, officers and employees (who will receive no additional compensation for soliciting), and Georgeson Inc., our proxy solicitation agent, may solicit your proxy by telephone or other means. We will pay Georgeson Inc. a fee of $12,000 plus expenses and will reimburse brokers for costs they incur in mailing the Notice and any other proxy materials.

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PROPOSAL NO. 1: ELECTION OF DIRECTORS

The Board of Directors currently has 11 directors with no vacancies.

The director nominees, Timothy K. Armour, G. Andrew Cox, Jeffrey J. Diermeier, Eugene Flood, Jr., J. Richard Fredericks, Deborah R. Gatzek, Seiji Inagaki, Lawrence E. Kochard, Glenn S. Schafer, Richard M. Weil, and Billie I. Williamson are nominated for election as directors of the Company for one-year terms and, if elected, will hold office until the 2016 annual shareholders meeting or until their successors are elected and qualify. Ms. Williamson was appointed to the Board on March 3, 2015. The director nominees are all current directors of the Company. Each nominee has indicated that he or she will serve if elected. We do not anticipate that any of the director nominees will be unable to stand for election, but if that were to happen, the Board of Directors may reduce the size of the Board, designate a substitute candidate or leave the vacancy unfilled. If a substitute candidate is designated, proxies cast for the original director candidate will be cast for the substituted candidate. Ages shown below are as of April 24, 2015.

 
   
   
   
  Director   Skills and Qualifications    
    Timothy K. Armour, 66   In determining that Mr. Armour should serve as a director of the Company, the Board of Directors identified Mr. Armour's extensive experience related to mutual fund and other asset management companies, domestic and international distribution channels, the evaluation of investment products and investment performance, and his experience as an executive officer at Morningstar and Stein Roe & Farnham.    
        Company

Director of the Company since March 2008

Served as Interim Chief Executive Officer of the Company from July 2009 to February 2010

Other current experience

Independent chairman of AQR Funds' board of trustees (a mutual fund investment company)

Previous experience

Director of AARP Services Inc. (a non-profit organization for retired persons) from 2008 to 2014

Director of ETF Securities (a private issuer of exchange traded funds and commodities)

Managing Director of Morningstar Inc. from 2000 until his retirement in March 2008 (Morningstar provides investment research, including stock and fund analysis, reports and tools as well as company, investing and financial news)

President of Morningstar Inc. from 1999 to 2000 and Chief Operating Officer from 1998 to 1999

President of the Mutual Funds Division of Stein Roe & Farnham, Incorporated from 1992 to 1998

   

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  Director   Skills and Qualifications    
    G. Andrew Cox, 71   In determining that Mr. Cox should serve as a director of the Company, the Board of Directors identified Mr. Cox's extensive investment management, mutual fund and investment adviser experience as a senior member of the investment team for The Dreyfus Founders Family (formerly The Founders Family) of Mutual Funds, Berger Associates and Montgomery Partners, and his general executive management experience as a senior executive officer at Founders Family.    
        Company

Director of the Company since October 2002

Other Current Experience

Treasurer and member of the board of directors for the Rocky Mountain Children's Choir

Previous experience

Director of Montgomery Partners and Trustee of The Montgomery Funds, The Montgomery Funds II and The Montgomery Funds III from 1989 to 2004

Portfolio manager for Berger Associates from 1972 to 1976

Vice President of investments and portfolio manager at The Dreyfus Founders Family (formerly The Founders Family) of Mutual Funds from 1976 to 1988

Visiting professor at the Daniels College of Business, University of Denver from 1999 to 2011

Adjunct professor at the Daniels College of Business, University of Denver from 1995 to 1999

Has served on the boards of several non-profit organizations

   

 

 
   
   
   
  Director   Skills and Qualifications    
    Jeffrey J. Diermeier, 62   In determining that Mr. Diermeier should serve as a director of the Company, the Board of Directors identified Mr. Diermeier's extensive oversight experience related to financial reporting and corporate governance standards as a trustee of the Board of the Financial Accounting Foundation, CFA Institute experience, mutual fund and investment adviser oversight experience while at UBS, corporate oversight as a member of several boards of directors and committees, and his general executive management experience at UBS and its predecessor entity.    
        Company

Director of the Company since March 2008

Other current experience

Director of the University of Wisconsin Foundation (a non-profit fundraising and endowment management organization) and former chairman of its investment committee

Director of Adams Street Partners (a private equity firm) since January 2011

Co-owner and Chairman of L.B. White Company (a heating equipment manufacturer) since 2010

Trustee of the Board of the Financial Accounting Foundation (oversees the Financial Accounting Standards Board and the Government Accounting Standards Board) since January 2009 and Chairman of the Trustees since November 2012

Previous experience

President and Chief Executive Officer of the CFA Institute (a non-profit educational organization for investment professionals) from 2005 to January 2009

Advisory board member of Stairway Partners, LLC (a registered investment adviser) from March 2005 to December 2012 and currently a minority owner

Chief Investment Officer of UBS Global Asset Management from 2000 to 2004

   

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  Director   Skills and Qualifications    
    Eugene Flood, Jr., 59   In determining that Mr. Flood should serve as a director of the Company, the Board of Directors identified Mr. Flood's extensive investment management, mutual fund and investment adviser experience as a trustee for CREF and TIAA-CREF, his senior management experience with Smith Breeden Associates and Morgan Stanley, and his economic-focused academic background. Mr. Flood has a Ph.D. in Economics from the Massachusetts Institute of Technology.    
        Company

Director of the Company since January 2014

Other current experience

Director of The Foundation for the Carolinas, a non-profit group since 2012

Chairman, Advisory Board, Institute for Global Health and Infectious Diseases, University of North Carolina, Chapel Hill

Previous experience

Executive Vice President of TIAA-CREF from 2011 until his retirement in 2012

CREF board of trustees and TIAA-CREF's mutual fund board of trustees for seven years, chairing the investment committee

President and Chief Executive Officer of Smith Breeden Associates (a North Carolina-based fixed income asset manager) for 12 years

A range of trading and investment positions with Morgan Stanley from 1987 to 1999

Assistant Professor of Finance at Stanford Business School from 1982 to 1987

   

 

 
   
   
   
  Director   Skills and Qualifications    
    J. Richard Fredericks, 69   In determining that Mr. Fredericks should serve as a director of the Company, the Board of Directors identified Mr. Fredericks' extensive investment management, security analyst, and investment banking experience and his corporate oversight experience as a member of several boards of directors.    
        Company

Director of the Company since October 2006

Other current experience

Managing Director of the money management firm Main Management LLC

Director of Cadence Bancorp LLC (a bank holding company formerly known as Community Bancorp LLC)

Advisory Board Member of Chambers & Chambers Wine Merchants, LLC (an importer and distributor of fine wines)

Director on the boards of several non-profit organizations

Previous experience

International advisory board member of Komatsu Ltd. from 2003 to 2005

Director of Chiron Corporation until it was acquired by Novartis International AG from February 2003 to April 2006

U.S. Ambassador to both Switzerland and Liechtenstein from 1999 to 2001

Director of BanCorp Hawaii in 1999

Banc of America Securities (formerly Montgomery Securities), initially as a partner and later as Senior Managing Director, from 1977 to 1999

   

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  Director   Skills and Qualifications    
    Deborah R. Gatzek, 66   In determining that Ms. Gatzek should serve as a director of the Company, the Board of Directors identified Ms. Gatzek's extensive experience in mutual fund, broker dealer, investment adviser, and corporate governance matters in her roles as the chief legal adviser at ING Americas and Franklin Resources; as a partner at Stradley, Ronan, Stevens & Young; and as special counsel for the SEC. The Board of Directors also considered her legal, academic, and general executive management experiences in senior and executive positions at ING Americas; Franklin Resources; and Stradley, Ronan, Stevens & Young. Ms. Gatzek's experience with public company filings, business practices, and strategies also benefits the Board.    
        Company

Director of the Company since March 2004

Other current experience

Securities law attorney

Serves on the boards of three non-profit organizations

Principal, Oversight and Governance Solutions, LLC

Previous experience

Chief Counsel to the Mutual Fund and Broker Dealer subsidiaries of ING Americas (an investment management firm) from 2001 to 2003

Partner at the law firm of Stradley, Ronan, Stevens & Young from 2000 to 2001

Senior Vice President and General Counsel of Franklin Resources, Inc. (an investment management firm) from 1983 through 1999

Special counsel for the SEC and regional counsel for FINRA

   

 

 
   
   
   
  Director   Skills and Qualifications    
    Seiji Inagaki, 51   In determining that Mr. Inagaki should serve as a director of the Company, the Board of Directors identified Mr. Inagaki's extensive experience in the financial service industry outside of the U.S., his specific roles supporting securities research and investments, risk management, asset management and corporate planning at Dai-ichi Life, and his role as Vice Chair of the BIAC (Business and Industry Advisory Committee to the Organisation for Economic Co-operation and Development (OECD)) Economic Policy Committee.    
        Company

Director of the Company since January 2013.

Mr. Inagaki was appointed director on January 22, 2013 after being designated by Dai-ichi Life Insurance Company, Limited ("Dai-ichi Life") as its representative for appointment to the Company's Board. This right was granted to Dai-ichi Life as a result of the Investment and Strategic Cooperation Agreement (the "Agreement") between Dai-ichi Life and the Company. In accordance with the Agreement, Dai-ichi Life was granted the right to designate a representative for appointment to the Company's Board after it acquired at least 15% of the issued and outstanding shares of the Company's stock, with such right continuing as long as Dai-ichi Life maintains ownership of at least 15% of the issued and outstanding shares of the Company's common stock or until the right is otherwise terminated in accordance with the terms of the Agreement. Before his appointment to the Board, the Nominating Committee met with Mr. Inagaki, reviewed his background and business experience and determined that Mr. Inagaki possessed the membership criteria for non-employee directors as set forth in the Governance Guidelines.

Other current experience

Joined the Dai-ichi Mutual Life Insurance Company, the predecessor of Dai-ichi Life in April 1986, supporting numerous key areas related to securities research and investments, risk management, investment planning, and corporate planning

Executive Officer of Dai-ichi Life since April 2012, oversight of Dai-ichi Life's Corporate Planning Department and Head of Group Management Strategy Unit since April 2013

Member of The Business and Industry Advisory Committee to the OECD, serving as Vice Chair of the Economic Policy Committee

   

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  Director   Skills and Qualifications    
    Lawrence E. Kochard, 58   In determining that Mr. Kochard should serve as a director of the Company, the Board of Directors identified Mr. Kochard's extensive experience related to investment management, investment adviser oversight, general executive management and his economic focused academic background while a senior executive officer on the investment teams of University of Virginia, Georgetown University, Virginia Retirement System, Fannie Mae, and The Goldman Sachs Group. Mr. Kochard has a Ph.D. in Economics from the University of Virginia.    
        Company

Director of the Company since March 2008

Other current experience

Chief Executive Officer of the University of Virginia Investment Management Company

Member of the Investment Advisory Committee of the Virginia Retirement System since March 2011

Member of the board and Chair of the Investment Committee for the Virginia Environmental Endowment since April 2013.

Previous experience

Chairman of the College of William & Mary Investment Committee from October 2005 to October 2011

Chief Investment Officer for Georgetown University from 2004 to 2010

Managing Director of Equity and Hedge Fund Investments for the Virginia Retirement System from 2001 to 2004

Assistant Professor of Finance at the McIntire School of Commerce at the University of Virginia from 1999 to 2001

Financial analysis and planning, corporate finance and capital markets roles with DuPont de Nemours and Company, Fannie Mae and The Goldman Sachs Group, Inc.

Chartered Financial Analyst designation

   

 

 
   
   
   
  Director   Skills and Qualifications    
    Glenn S. Schafer, 65   In determining that Mr. Schafer should serve as a director of the Company, the Board of Directors identified Mr. Schafer's extensive accounting and financial experience as a former Chief Financial Officer at Pacific Life, investment and capital management experience as a senior executive and board member of Pacific Life, corporate oversight experience as a member of several boards of directors and committees, and general executive management experience as a senior executive and board member of Pacific Life.    
        Company

Director of the Company since December 2007

Chairman of the Board of Directors since April 27, 2012

Other current experience

Director of Skilled Healthcare Group, Inc. (a holding company with subsidiaries that operate nursing and assisted living facilities)

Director of GeoOptics LLC (a weather satellite manufacturer)

Previous experience

Director of the Michigan State University Foundation (a non-profit fundraising corporation) from 2004 to 2014

Board of directors for Scottish Re Group from 2006 to 2007

Vice Chairman of Pacific Life Insurance Company from April 2005 until his retirement in December 2005

Member of Pacific Life Insurance Company's board of directors and President of Pacific Life from 1995 to 2005

Executive Vice President and Chief Financial Officer of Pacific Life from 1991 to 1995

Non-executive Chairman of Beckman Coulter,  Inc. (a biomedical testing products developer and manufacturer)

   

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  Director   Skills and Qualifications    
    Richard M. Weil, 51   In determining that Mr. Weil should serve as a director of the Company, the Board of Directors believes that the CEO of the Company should be a member of the Board of Directors and identified Mr. Weil's extensive business and legal experience in the investment management industry; his general executive management experience as a senior executive officer at PIMCO; and as a lawyer at Simpson Thacher & Bartlett LLP. The Board of Directors also considered his extensive experience in the development and oversight of global company operations.    
        Company

Chief Executive Officer ("CEO") and a director of the Company since February 2010

Member of the Company's executive committee

Member of the Board of Directors of the Company's subsidiaries, INTECH Investment Management LLC ("INTECH") and Perkins Investment Management LLC ("Perkins")

Previous experience

Global head of Pacific Investment Management Company LLC ("PIMCO") Advisory (an investment management firm) from February 2009 until joining Janus in February 2010

Member of the board of trustees for the PIMCO funds from February 2009 to February 2010

PIMCO's Chief Operating Officer from 2000 to 2009, during which time he:

led the development of PIMCO's global business;

founded PIMCO's German operations;

was responsible for PIMCO's operations, technology, fund administration, finance, human resources, legal, compliance, and distribution functions; and

managed PIMCO's non-U.S. offices

served on PIMCO's executive committee

General counsel for PIMCO Advisors LP from January 1999 to August 2000

Bankers Trust Global Asset Management from 1994 to 1995 in their hedge fund business

Attorney with the law firm Simpson Thacher & Bartlett LLP in New York from September 1989 to 1994

Member of Security Industry and Financial Markets Association's ("SIFMA") board of directors and chaired the SIFMA asset management industry group until 2010

   

 

 
   
   
   
  Director   Skills and Qualifications    
    Billie I. Williamson, 62   In determining that Ms. Williamson should serve as a director of the Company, the Board of Directors identified Ms. Williamson's significant expertise in financial reporting and audit process. The Board also considered her understanding of technology control implementation and protocols for business dealing in foreign countries as a Senior Global Client Serving Partner at Ernst & Young L.L.P. and her corporate oversight, financial reporting and controls experience as a member of several boards of directors and audit and financial committees. Ms. Williamson is a Certified Public Accountant.    
        Company

Director of the Company since March 2015

Other current experience

Director and member of Audit and Nominating Corporate Governance Committees of Exelis Inc. (a global aerospace, defense, information and services company)

Director and member of Audit Committee of Pentair plc (an industrial machinery company)

Director and Chairman of the Audit Committee of Energy Future Holdings Corporation (the largest private utility in Texas)

Co-Chairman of the Dallas Chapter of Women Corporate Directors

Director of the North Texas Chapter of the National Association of Corporate Directors ("NACD") and a NACD Leadership Fellow

Director on the boards of several non-profit organizations

Previous experience

Senior Global Client Serving Partner at Ernst & Young L.L.P. from 1998 until retirement in December 2011, and served on the Americas Executive Board of Ernst & Young L.L.P.

Lead Independent Director and member of Audit, Compensation and Transaction Committees of Annie's Inc. from March 2012 until completion of the sale of the company in October 2014

Senior Vice President, Finance and Corporate Controller at Marriott International, Inc. from 1996 to 1998

Chief Financial Officer of AMX Corporation from 1993 to 1996

   

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For a nominee to be elected, the number of shares voted "for" the nominee must exceed the number of shares voted "against" the nominee. Abstentions and broker non-votes, if any, have no effect on this proposal.

The Board of Directors recommends a vote "FOR" the election of
each of the above nominees.

Paul Balser, a director of the Company since June 2000, retired from the Board of Directors on April 23, 2014.

Corporate Governance

Mr. Schafer, an independent director, currently serves as Chairman of the Board of Directors. Mr. Weil serves as our CEO. The separation of the roles of Chairman and CEO has been in place since January 2006. We believe this structure positions our CEO as the leader of the Company and provides strong leadership for the Board by its Chairman. We also believe that the current Board leadership structure is appropriate given the industry-specific responsibilities of our CEO, which have increased in recent years as a result of the economic and regulatory climate. However, we recognize that a different board leadership structure may be appropriate under different business circumstances.

The Board of Directors conducts an annual self-evaluation to determine whether it and its committees are functioning effectively. As part of this annual process, the Board evaluates whether the current leadership structure continues to be optimal for the Company and its shareholders.

The Board of Directors has established criteria for determining if a director is independent from management. These criteria follow the director independence criteria contained in the NYSE Listing Standards and are identified in our Corporate Governance Guidelines ("Governance Guidelines") available on the Company's website at ir.janus.com in the "Governance Documents" section. In determining the independence of the directors, the Board reviewed and considered all relationships between each director (and any member of his or her immediate family) and the Company. Based on that review and the Company's independence criteria, the Board affirmatively determined that all directors are independent directors except for Mr. Weil, our CEO. In addition, all members of the Audit, Compensation, and Nominating and Corporate Governance Committees are independent.

We believe that in order for the Board to effectively guide Janus to sustained, long-term success, it must be composed of individuals with sophistication and experience in the many disciplines that impact our business. We sell our products to retail intermediary, institutional and international clients. To best serve these clients and our shareholders, we seek to ensure that the Board consists of directors who are highly sophisticated in, among other disciplines, domestic and international investment and asset management, finance, economic policy, and the legal and accounting

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regulations that impact our business. We also believe that the Board should include directors with experience managing, overseeing or advising comparable companies in our industry at the chief executive officer and/or the director level.

The Nominating and Corporate Governance Committee ("Nominating Committee") does not have a formal ongoing process for identifying and evaluating director nominees; however, when vacancies on the Board are expected, or a need for a particular expertise has been identified, in the past the Nominating Committee has engaged search firms to assist it in identifying director candidates. The Nominating Committee ensures that each director nominee satisfies at least the criteria set forth in the Governance Guidelines. The Nominating Committee considers and evaluates the individual background and qualifications of each director nominee and the extent to which such background and qualifications might benefit the Company based on the size and composition of the Board of Directors at the time. In identifying director nominees, the Nominating Committee seeks talented and experienced candidates with professional backgrounds who support a balance of knowledge, experience, skills, expertise, and diversity appropriate for the Board as a whole.

We believe that the current Board members collectively possess diverse knowledge and experience in the disciplines that impact our business. Prior to nominating a new director candidate, the Nominating Committee considers the collective experience of the existing Board members. Based on this evaluation, the Nominating Committee nominates individuals who it believes will strengthen the Board's ability to serve shareholders because of experience and expertise. Although the Board does not currently have a policy specifically addressing director diversity, the Nominating Committee, guided by the Nominating Committee's charter, generally assesses and considers the diversity of the Board and the effectiveness of its diversity prior to nominating any additional Board candidates.

The Nominating Committee also evaluates the current composition of the Board and reviews each Board member's and any Board candidate's experiences and professional background that may impact our business, including domestic and international investment and asset management, finance, economic policy, legal and accounting regulations, and management oversight at the CEO and/or director level.

The Nominating Committee will consider director nominees recommended by shareholders under the same procedure used for considering director nominees recommended by management or other directors. See "Shareholder Proposals for the 2016 Annual Meeting" on page 82 for more information regarding shareholder recommendations for director nominees.

Including in-person and telephonic meetings, the Board of Directors met nine times in 2014. Each director attended at least 75% of the combined total number of meetings of the Board and Board committees of which he or she was a member. The Board's committees are described below.

The Nominating Committee consists of four directors appointed by the Board of Directors to serve one-year terms. The members of the Nominating Committee are Deborah R. Gatzek, Timothy K. Armour, Eugene Flood, Jr., and Billie I. Williamson, each of whom is independent under the standards established by the Board and the NYSE. Ms. Gatzek is Chairman of the Nominating Committee. Ms. Williamson was appointed to the Nominating Committee on March 3, 2015.

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The Nominating Committee assists the Board in promoting the best interests of the Company and its shareholders through the implementation of sound corporate governance principles and practices. The functions performed by the Nominating Committee include:

The Nominating Committee met six times during the 2014 fiscal year including executive sessions without management. The Nominating Committee operates pursuant to a written charter that was adopted by the Board and is available on the Company's website at ir.janus.com in the "Governance Documents" section.

The Audit Committee consists of four directors appointed by the Board of Directors to serve one-year terms. The members of the Audit Committee are Jeffrey J. Diermeier, J. Richard Fredericks, Deborah R. Gatzek and Billie I. Williamson, each of whom is independent under the standards established by the Board and the NYSE. Mr. Diermeier is Chairman of the Audit Committee. Ms. Williamson was appointed to the Audit Committee on March 3, 2015. Lawrence E. Kochard was a member of the Audit Committee from April 24, 2014 until March 3, 2015.

The Audit Committee assists the Board in monitoring the:

The Audit Committee has the authority to select, retain, and terminate, when appropriate, the Company's independent auditor. The Audit Committee may, in its discretion, seek a non-binding advisory vote of the Company's shareholders for the ratification of the appointment of the Company's independent auditor. The Audit Committee is responsible for setting the independent auditor's compensation and overseeing the work of the independent auditor. It also approves all audit services

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and all permitted non-audit services to be provided by the independent auditor. The Audit Committee oversees the resolution of any disagreements between management and the independent auditor.

The Board has determined that each member of the Audit Committee meets the accounting or related financial management expertise requirements of the NYSE and that Mses. Gatzek and Williamson and Messrs. Diermeier, Fredericks, and Kochard qualify as "audit committee financial experts" under applicable SEC regulations. No member of the Audit Committee serves on an audit committee of more than two public companies in addition to Janus.

The Audit Committee met nine times in 2014, including executive sessions without management. The Audit Committee operates pursuant to a written charter that was adopted by the Board and is available on our website at ir.janus.com in the "Governance Documents" section.

The Compensation Committee consists of four directors appointed by the Board to serve one-year terms. The members of the Compensation Committee are Timothy K. Armour, G. Andrew Cox, Eugene Flood, Jr., and Lawrence E. Kochard, each of whom is independent under the standards established by the Board and the NYSE. Mr. Armour is Chairman of the Compensation Committee.

The Compensation Committee determines the compensation of certain executive officers and reviews and approves the compensation policies recommended by management with respect to other employees. The Compensation Committee has the authority to:

The Compensation Committee met six times during 2014 including executive sessions without management. The Compensation Committee operates pursuant to a written charter that was adopted by the Board and is available on our website at ir.janus.com in the "Governance Documents" section.

During 2014, the Company had a Planning and Strategy Committee ("Strategy Committee") that consisted of four directors appointed by the Board of Directors to serve one-year terms. The members of the Strategy Committee were G. Andrew Cox, Jeffrey J. Diermeier, J. Richard Fredericks, and Lawrence E. Kochard, each of whom was considered independent under the standards established by the Board of Directors and the NYSE. Mr. Cox was Chairman of the Strategy Committee. The Board of Directors, upon the recommendation of the Nominating Committee, determined that the matters typically overseen by the Strategy Committee were being addressed by the entire Board making the Strategy Committee redundant. As a result, the Strategy Committee was disbanded in January 2015.

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The Board of Directors is responsible for overseeing Janus's risk management process. The Board reviews management's processes for identifying and managing risks that face the Company, which may include the financial markets, the asset management industry as a whole, and Company-specific risks. Based on its periodic reviews, the Board seeks to ensure that management has a robust program for identifying and managing risks and, as appropriate, implementing risk mitigation strategies.

In addition, the Board of Directors focuses on, in its judgment, the most significant risks facing Janus and management's mitigation strategies, and evaluates whether these risks are consistent with the Board's judgment as to the appropriate balance of risk and business objectives. The Board will consider with management the various ways in which these risks can be controlled and monitored, as well as the expected benefits to the Company. The Board also considers particular risk management matters in connection with its general oversight and approval of corporate transactions, such as acquisitions and capital usage.

The Audit Committee assists the Board of Directors in the oversight of Janus's risk management process. Among other activities, the Audit Committee discusses Company policies with respect to risk assessment and risk management and monitors: (i) the Company's financial statements; (ii) the independent auditors independence and qualifications; (iii) the performance of the Company's internal and independent auditors; (iv) legal and regulatory compliance by the Company; and (v) the Company's system of disclosure controls and internal controls over financial reporting. The Audit Committee also reviews, with the assistance of management and counsel, legislative and regulatory developments that could materially affect the Company's compliance program and material contingent financial liabilities. In addition, the Audit Committee meets at least quarterly with, and receives regular reporting from, the Chief Compliance Officer, the Company's General Counsel and Head of Enterprise Risk Management, and the Chief Accounting Officer. The Audit Committee reports regularly to the full Board.

The Compensation Committee, in consultation with the Board and management, reviews the material terms of the Company's compensation policies and programs for all employees, and identifies compensation-related risks that could have a material adverse impact on Janus as well as features of the Company's compensation programs that could encourage excessive risk-taking. Our current compensation programs and policies are discussed in more detail in the "Compensation Discussion and Analysis" section beginning on page 29. The Compensation Committee reports regularly to the full Board.

We believe the risk management processes described above effectively address the risks facing the Company, our clients, and our shareholders. The Board supports this approach.

Consistent with the Board's commitment to observing strong corporate governance practices, the Board has policies and procedures concerning compliance with SEC rules and NYSE Listing Standards. In connection therewith, the Board regularly reviews and periodically revises the Company's Governance Guidelines and committee charters, and periodically amends or adopts other related policies and practices. Our Governance Guidelines are available on our website at

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ir.janus.com in the "Governance Documents" section. These policies and procedures include the following:

Our Officer Code of Ethics for the CEO and Senior Financial Officers (including our CEO, Chief Financial Officer ("CFO"), and Chief Accounting Officer) (the "Officer Code") and Corporate Code of Business Conduct for all employees are available on our website at ir.janus.com in the "Governance Documents" section and are reviewed by the Nominating Committee. Any amendments to or waivers of the Officer Code or the Corporate Code of Business Conduct will be disclosed on our website at ir.janus.com in the "Governance Documents" section.

The independent members of the Board of Directors have executive sessions at all regularly scheduled Board meetings. The purpose of these sessions is to promote open discussion among independent directors and provide an opportunity for them to address concerns about the Company, as well as the performance of the Board itself. The Chairman of the Board typically oversees these executive sessions.

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The Board of Directors requires its members to attend each annual meeting of shareholders. All of the directors attended our 2014 annual shareholders meeting.

Individuals desiring to communicate with the Board of Directors, the Chairman of the Board, the independent directors as a group or any individual member of the Board should direct their communications to the attention of Glenn S. Schafer, Janus Capital Group Inc., 151 Detroit Street, Denver, Colorado 80206. All communications received, other than commercial solicitations or communications that are frivolous or deemed to be not relevant to corporate matters, will be forwarded to the Board or to the relevant Board member.

The Compensation Committee charter provides that the Compensation Committee may retain compensation consultants to assist in its determination of CEO or other senior executive compensation. In 2014, the Compensation Committee used two independent compensation consultants, McLagan Partners, Inc. ("McLagan") and Aon Hewitt LLC ("Aon Hewitt").

McLagan provided the Compensation Committee with market compensation data and pay trend information, primarily within the financial services industry, and assisted the Compensation Committee with analyses and recommendations related to Janus's various compensation programs, including the structure of the executive and director compensation programs. McLagan also provided Janus's Human Resources department with comparative compensation data that was used to evaluate and recommend compensation for certain employees. The vast majority of the services provided to our Human Resources department by McLagan consisted of published survey data. The Compensation Committee reviewed the published survey data that McLagan provided. Aon Hewitt primarily assisted the Compensation Committee in evaluating the CEO's compensation arrangements and provided services solely to the Compensation Committee. We may refer to McLagan and Aon Hewitt collectively as "Compensation Consultants".

The Compensation Consultants were engaged directly by the Compensation Committee and attended certain Compensation Committee meetings, as well as participated in discussions regarding executive compensation issues.

Based on the above information and other relevant factors, including the factors set forth under Rule 10C-1 of the Exchange Act, the Compensation Committee assessed the independence of the Compensation Consultants and concluded that no conflict of interest exists that would prevent each consultant from independently advising the Compensation Committee.

Transactions between Janus and related parties can present potential or actual conflicts of interest and create the appearance that our decisions are based on considerations other than our best interests and the best interests of our shareholders. Related parties may include members of the Board of Directors, Janus executives, significant shareholders, and immediate family members and affiliates of such persons.

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Several provisions of our Corporate Code of Business Conduct are intended to help us avoid the conflicts and other issues that may arise in transactions between Janus and related parties, including the following:

Our related party transaction approval policy provides that related party transactions must be pre-approved by the Audit Committee. Related party transactions include any financial transaction, arrangement, or relationship (including any indebtedness or guarantee of indebtedness) or any series of similar transactions, arrangements, or relationships in which the Company was or is to be a participant and the amount involved exceeds $120,000, and in which any related person had or will have a direct or indirect material interest. Our related party transaction approval policy is part of our Corporate Code of Business Conduct available on our website at ir.janus.com in the "Governance Documents" section. While the Audit Committee does not have detailed written procedures concerning the approval of related party transactions, it would consider all relevant facts and circumstances in considering any such approval, including:

Certain of the directors and executive officers, as well as their immediate family members, from time to time may invest their personal funds in Janus mutual funds on substantially the same terms and conditions as other similarly situated investors in these mutual funds who are neither directors nor employees of Janus.

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Members of the Board of Directors who are employees of Janus or a designee of Dai-ichi Life do not receive any additional compensation for serving on the Board. All other members of the Board received the director compensation described below in 2014.

2014 non-employee director compensation consisted of:

All members of the Board of Directors are reimbursed for reasonable travel and lodging expenses in connection with attending Board and committee meetings. Janus also offers a matching gift program where every dollar contributed by a director to an eligible charity is matched dollar-for-dollar up to $2,500.

In 2015, the Board approved changes to the Director compensation program to better align director compensation with market data. These changes represent a return to pre-2008 levels. The Board believes these changes will enable us to continue to attract and retain experienced and well-qualified directors. Unless otherwise specified, the changes described below will go into effect on May 1, 2015 for the 2015 - 2016 compensation year:

The annual cash retainer for the non-executive Chairman of the Board was unchanged.

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The following chart shows the compensation that each non-employee director was paid for his or her services in calendar year 2014:

 
   
   
   
   
   
   
  Name (1)
  
(a)



Fees Earned or
Paid in Cash
($) (2)
 
(b)





Stock Awards
($) (3)
  
(c)




All Other
Compensation
($) (5)
 
(g)





Total
($)
  
(h)




 
    Timothy K. Armour   108,000   80,003   16,400   204,403    
  Paul F. Balser (4)       6,368   6,368    
    G. Andrew Cox   108,000   80,003   29,130   217,133    
  Jeffrey J. Diermeier   116,000   80,003   9,866   205,869    
    Eugene Flood, Jr.   122,880   182,404   3,606   308,890    
  J. Richard Fredericks   96,000   80,003   21,963   197,966    
    Deborah R. Gatzek   108,000   80,003   24,994   212,997    
  Lawrence E. Kochard   104,000   80,003   17,404   201,407    
    Glenn S. Schafer   205,000   80,003   14,197   299,200    
(1)
Ms. Williamson was appointed an independent director on March 3, 2015 and is therefore not included in this table.

(2)
Amounts represent the annual cash retainers for serving as members of the Board of Directors, including non-executive Chairman and committee membership retainers, which are paid in a lump sum on May 1 of each year.

(3)
The value of each restricted stock and restricted stock unit award is determined pursuant to FASB Accounting Standards Codification ("ASC") Topic 718 by multiplying the fair market value of our common stock (the average of the high and low trading prices) on the grant date by the number of shares granted. Amounts represent restricted stock and restricted stock units granted in 2014 for the 2014-2015 annual stock retainer, and also include any shares and restricted stock units received in connection with the Director Deferred Fee Plan (described below). The restricted stock and restricted stock units held by each independent director as of December 31, 2014, are as follows: Mr. Armour holds 16,510 shares of restricted stock and 30,241 restricted stock units; Mr. Cox holds 91,114 restricted stock units; Mr. Diermeier holds 16,510 shares of restricted stock and 14,903 restricted stock units; Mr. Flood holds 15,025 shares of restricted stock; Mr. Fredericks holds 6,590 shares of restricted stock and 51,409 restricted stock units; Ms. Gatzek holds 79,515 restricted stock units; Mr. Kochard holds 58,417 restricted stock units; and Mr. Schafer holds 16,510 shares of restricted stock and 21,469 restricted stock units.

(4)
Mr. Balser retired from the Board on April 23, 2014.

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(5)
"All Other Compensation" includes the following:

 
   
   
   
   
   
   
  Name Other (a)
Dividends on Unvested
Restricted Stock


Dividends on Unvested
Restricted Stock Units (b)


Total
 
    Timothy K. Armour   2,000   5,126   9,274   16,400    
  Paul F. Balser (c)       6,368   6,368    
    G. Andrew Cox   1,745     27,385   29,130    
  Jeffrey J. Diermeier     5,283   4,583   9,866    
    Eugene Flood, Jr.     3,606     3,606    
  J. Richard Fredericks   4,500   1,738   15,725   21,963    
    Deborah R. Gatzek   1,139     23,855   24,994    
  Lawrence E. Kochard       17,404   17,404    
    Glenn S. Schafer   2,340   5,283   6,574   14,197    
(a)
The amount represents Janus's matching gift in respect of a director's charitable contribution during 2014 under the Janus Matching Gift Program and includes Janus's match for director contributions made in 2013 but not matched until 2014. The amount also includes the membership fees for identity theft protection services (generally available to all employees) paid by the Company on behalf of the director.

(b)
This amount represents the value of dividend equivalents awarded in the form of Restricted Stock Units in 2014 on all grants deferred under the Director Deferred Fee Plan.

(c)
Mr. Balser retired from the Board on April 23, 2014.

Under our Amended and Restated Director Deferred Fee Plan ("Director Deferred Fee Plan"), a non-employee director may elect to defer payment of all or any part of the above director monetary or stock fees until his or her service as a director is terminated. All monetary fees deferred under this plan are credited during the deferral period with the gains and losses of certain Janus mutual funds or Janus stock, as elected by the director. All Janus stock awards deferred under this plan are converted into restricted stock units at the time of grant. A director's interest in the deferred monetary fees is generally payable only in cash in a single payment or in installments upon termination of service as a director. Any restricted stock units granted in connection with the deferral of stock are paid in the form of Janus common stock in a single payment or in installments upon termination of service as a director. The Director Deferred Fee Plan is intended to comply with Section 409A of the Internal Revenue Code (the "Code"). Messrs. Cox and Kochard and Ms. Gatzek elected to participate in this plan to defer monetary fees, stock fees, or a combination of both during the 2014 calendar year.

Notwithstanding anything to the contrary set forth in any of Janus's previous filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, that incorporated future filings, including this Proxy Statement, the following sections titled "Audit Committee Report" and "Compensation Committee Report on Executive Compensation" (on page 56) are not incorporated by reference into any such filings, except to the extent Janus specifically incorporates any of the reports by reference therein.

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AUDIT COMMITTEE REPORT

The Audit Committee of the Board of Directors is responsible for monitoring (i) the integrity of the financial statements of the Company; (ii) the independent auditor's qualifications and independence; (iii) the performance of the Company's internal audit function and independent auditor; (iv) the compliance by the Company with legal and regulatory requirements; (v) the Company's system of disclosure controls and its system of internal controls over financial reporting; and (vi) the Company's major financial risk exposures. The Audit Committee also reviews (with assistance of management and outside counsel) major legislative and regulatory developments that could materially impact the Company's contingent liabilities and risks. In addition, the Audit Committee actively works with, and meets at least quarterly with, the General Counsel and Head of Enterprise Risk Management of the Company to oversee the identification of Company risks and potential risk management strategies. The Audit Committee reports regularly to the full Board. The Audit Committee is composed of four directors and operates under a written charter adopted and approved by the Board. Each Audit Committee member is independent under the standards established by the Board and the NYSE.

Management has primary responsibility for the financial reporting process, including the preparation of the Company's consolidated financial statements in accordance with accounting principles generally accepted in the United States of America ("GAAP"). Management also has responsibility for establishing and maintaining the Company's system of internal controls over financial reporting and assessing the effectiveness of those controls annually, as required by Section 404 of the Sarbanes-Oxley Act of 2002. The independent auditor is responsible for auditing the Company's financial statements and the effectiveness of internal control over financial reporting. The Audit Committee's responsibility is to monitor and review these processes. It is not the Audit Committee's duty or responsibility to conduct auditing or accounting reviews or procedures. Therefore, the Audit Committee has relied on the information provided to it and on management's representation that the financial statements have been prepared with integrity and objectivity and in conformity with GAAP. The Audit Committee also relied on the representations of the independent auditor included in its report on the Company's financial statements. In addition, management has responsibility for compliance by the Company with legal and regulatory requirements.

The Audit Committee held nine meetings during 2014 including executive sessions without management. The meetings were designed, among other things, to facilitate and encourage communication among the Audit Committee, management, the internal auditors and the Company's independent auditor, Deloitte. The Audit Committee discussed with the Company's internal auditors and independent auditor the overall scope and plans for their respective audits. The Audit Committee met with each of the internal and independent auditors, the Company's Chief Compliance Officer, Chief Accounting Officer and other members of management, separately and as a group, to discuss the results of their examinations and their evaluations of the Company's internal controls.

The Audit Committee reviewed and discussed the audited consolidated financial statements for the fiscal year ended December 31, 2014, with management of the Company and Deloitte. The Audit Committee also discussed with Deloitte matters required to be discussed with audit committees based on requirements of the Public Company Accounting Oversight Board ("PCAOB") including, among other things, matters related to the conduct of the audit of the Company's consolidated financial statements and the matters required to be discussed by Codification of Statements on Auditing Standards, AU Sec. 380, formerly Statement on Auditing Standards No. 61, as amended and as adopted by the PCAOB in Rule 3200T. The Audit Committee also reviewed the 2013 Annual 38a-1 Report on the Company's compliance policies and procedures as required under the Investment Company Act of 1940, as amended, and as prepared by the Company's Chief Compliance Officer.

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The Company's independent auditor also provided the written disclosures and the letter required by the PCAOB (Rule 3526, Communication with Audit Committees Concerning Independence), and the Audit Committee discussed with the independent auditor its independence from the Company. When considering the independence of Deloitte, the Audit Committee considered whether the provision by Deloitte of services to the Company beyond those rendered in connection with its audit and review of the Company's consolidated financial statements was compatible with maintaining its independence.

Based on the Audit Committee's review and these meetings, discussions and reports, and subject to the limitations of the Audit Committee's role and responsibilities referred to above and in the Audit Committee charter, the Audit Committee recommended to the Board that the Company's audited consolidated financial statements for the fiscal year ended December 31, 2014, be included in the Company's Annual Report on Form 10-K filed with the SEC.

This report is provided by the following independent directors, who comprise the Audit Committee (other than Ms. Williamson, who did not join the Audit Committee until March 3, 2015, and as such, did not participate in the review and discussions referred to above):

Members of the Audit Committee

*Mr. Kochard was a member of the Audit Committee from April 24, 2014 until March 3, 2015.


PROPOSAL NO. 2: RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP
AS INDEPENDENT AUDITOR

The Audit Committee appointed Deloitte as independent auditor for the 2015 fiscal year. The Board is proposing that the appointment of Deloitte be ratified by the shareholders of the Company. Deloitte audited our consolidated financial statements for the 2014 fiscal year and performed other services. If the appointment is not ratified by our shareholders, the Audit Committee will take that into account in determining whether to retain Deloitte as our independent auditor.

The following table shows the fees paid or accrued by the Company for audit and other services provided by Deloitte for fiscal years ending December 31, 2014 and 2013, respectively:

 
   
   
   
   

 

 
2014

2013
 

 

Audit Fees (1)

  $ 1,150,000   $ 1,046,000    

 

Audit-Related Fees (2)

    202,000     273,000    

 

Tax Fees (3)

    65,000     72,000    

 

All Other Fees

           

 

Total

  $ 1,417,000   $ 1,391,000    
(1)
Audit services consisted of the audit of the Company's consolidated financial statements included in its Annual Report on Form 10-K, attestation work required by Section 404 of the

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(2)
Audit-related fees consisted of financial accounting and SEC reporting consultations, issuance of consent letters, audit of the Company's benefit plans, and other audit services not required by statute or regulation.

(3)
Tax compliance fees consisted of tax return filings for certain foreign jurisdictions, assistance with tax audits and miscellaneous state and federal income tax-related issues.

The Audit Committee has determined that the provision of the services described above is compatible with maintaining the independence of Deloitte.

All services performed by Deloitte were approved in accordance with the approval policy and procedures adopted by the Audit Committee. This policy describes the permitted audit, audit-related, tax, and other services (collectively, the "Disclosure Categories") that our independent auditor may perform. The policy requires that a description of the services expected to be performed by our independent auditor in each of the Disclosure Categories be presented to the Audit Committee for approval and cannot commence until such approval has been granted. Normally, approval is provided at regularly scheduled meetings. However, the authority to grant specific preapproval between meetings, as necessary, has been delegated to the Chairman of the Audit Committee. The Chairman must update the Audit Committee at the next regularly scheduled meeting of any services that were granted specific approval.

In addition, although not required by the rules and regulations of the SEC, the Audit Committee generally approves a narrow range of fees associated with each proposed service. Providing a range of fees for a service incorporates appropriate oversight and control of the independent auditor relationship, while permitting the Company to receive immediate assistance from the independent auditor when time is of the essence.

At each meeting, the Audit Committee reviews the status of services and fees incurred year-to-date against the original approved services and the forecast of remaining services and fees for the fiscal year.

A representative of Deloitte is expected to be present at the Annual Meeting with the opportunity to make a statement and to answer appropriate shareholder questions.

The affirmative vote of a majority of the shares of common stock represented in person or by proxy at the Annual Meeting and entitled to vote on the proposal is required for this proposal to be approved. Abstentions have the same effect as a vote against the proposal.

The Board of Directors unanimously recommends a vote "FOR" the proposal to ratify the appointment of Deloitte & Touche LLP as independent auditor for fiscal year 2015.

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Stock Ownership of Certain Beneficial Owners and Management

The table below sets forth information regarding beneficial ownership of our outstanding common stock as of the Record Date for purposes of voting at the Annual Meeting by (i) beneficial owners of more than five percent of our outstanding common stock who have publicly disclosed their ownership; (ii) each NEO (defined below) and each member of our Board of Directors; and (iii) all of our executive officers and directors as a group. The Company has no knowledge of any arrangement that would, at a subsequent date, result in a change in control of the Company.

 
   
   
   
   

 

 

  Shares of Common
Stock
Beneficially Owned (1)



 
       

 

Name


Number
Percentage
 

 

The Dai-ichi Life Insurance Company, Limited (2)

  36,789,204   19.65    

 

BlackRock, Inc. (3)

  13,740,611   7.34    

 

The Vanguard Group Inc. (4)

  9,736,925   5.20    

 

Ariel Investments, LLC (5)

  9,576,586   5.11    

 

Glenn S. Schafer, Chairman of the Board of Directors (6)

  52,652   *    

 

Timothy K. Armour, Director (6)

  141,361   *    

 

George Batejan, Executive Vice President, Global Head of Technology and Operations

  83,718   *    

 

Augustus Cheh, President of Janus International

  117,142   *    

 

G. Andrew Cox, Director (6)

  102,826   *    

 

Jeffrey J. Diermeier, Director (6)

  110,267   *    

 

Eugene Flood, Jr., Director (6)

  15,025   *    

 

J. Richard Fredericks, Director (6)

  70,922   *    

 

Deborah R. Gatzek, Director (6)

  91,156   *    

 

Seiji Inagaki, Director

  0   *    

 

Lawrence E. Kochard, Director (6)

  58,699   *    

 

Bruce L. Koepfgen, President

  414,904   *    

 

Jennifer J. McPeek, Executive Vice President and CFO

  114,251   *    

 

Richard M. Weil, CEO and Director

  2,293,498   1.22    

 

Billie I. Williamson, Director (6)

  0   *    

 

All Directors and Executive Officers as a Group (15 Persons) (6)

  3,666,421   1.96    
*
Less than one percent of the outstanding shares.

(1)
Ownership, both direct and indirect, is based on the number of shares outstanding as of March 2, 2015, including unvested restricted stock units that will vest within 60 days of March 2, 2015 and any shares that may be acquired upon the exercise of options within 60 days of March 2, 2015. The holders have sole voting and dispositive power over the shares except as otherwise noted in the footnotes below. Amounts shown for officers include shares of restricted stock and shares held indirectly through Janus's ESOP (over which the person named has no investment power): Mr. Batejan holds 57,273 restricted shares and 300 ESOP shares; Mr. Koepfgen holds 187,192 restricted shares and 300 ESOP shares; Ms. McPeek holds 87,367

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(2)
Information regarding beneficial ownership of the shares by Dai-ichi Life is included herein based on a Form 4 filed with the SEC on January 28, 2015, relating to such shares beneficially owned as of January 28, 2015. The address of Dai-ichi Life is 13-1, Yurakucho 1-Chome, Chiyoda-ku, Tokyo, 100-8411 Japan.

(3)
Information regarding beneficial ownership of the shares by BlackRock, Inc. ("BlackRock") is based on a Schedule 13G filed with the SEC on January 26, 2015, relating to such shares beneficially owned as of December 31, 2014. Such report provides that BlackRock is beneficial owner of and has sole dispositive power with respect to 13,740,611 shares and sole voting power with respect to 13,329,489 shares. BlackRock's address is 55 East 52nd Street, New York, NY 10055.

(4)
Information regarding beneficial ownership of the shares by The Vanguard Group Inc. ("Vanguard") is based on a Schedule 13G filed with the SEC on February 10, 2015, relating to such shares beneficially owned as of December 31, 2014. Such report provides that Vanguard is the beneficial owners of 9,736,925 shares, and has sole dispositive power with respect to 9,540,038 shares and sole voting power with respect to 209,887 shares. Vanguard's address is 100 Vanguard Boulevard, Malvern, Pennsylvania 19355.

(5)
Information regarding beneficial ownership of the shares by Ariel Investments, LLC ("Ariel") is based on a Schedule 13G/A filed with the SEC on February 13, 2015, relating to such shares beneficially owned as of December 31, 2014. Such report provides that Ariel is beneficial owner and has sole dispositive power with respect to 9,576,586 shares and sole voting power with respect to 8,455,344 shares. Ariel's address is 200 East Randolph Drive, Suite 2900, Chicago, Illinois 60601.

(6)
Includes restricted stock units held by certain directors. Such restricted stock units do not have any voting rights, are entitled to dividend equivalents, and will be paid in shares of Company common stock upon voluntary termination of service as a director, all in accordance with the Director Deferred Fee Plan and the Company's long-term incentive ("LTI") stock plans. The restricted stock units represented in the amounts shown are as follows: Mr. Armour – 30,387 units, Mr. Cox – 91,554 units, Mr. Diermeier – 14,975 units, Mr. Flood – 0 units, Mr. Fredericks – 51,658 units, Ms. Gatzek – 79,899 units, Mr. Kochard – 58,699 units, Mr. Schafer – 21,573 units, and Ms. Williamson – 0 units.

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Executive Officers of the Company

The following are the executive officers of the Company as of the date of this Proxy Statement. All executive officers are elected annually by the Board of Directors and serve at the discretion of the Board. The executive officers shown below are considered our "named executive officers" ("NEOs") for purposes of this Proxy Statement.

 
   
   
   
   

 

Name



Age
Position
 

 

Richard M. Weil

    51   CEO and member of the Board of Directors    

 

Bruce L. Koepfgen

  62   President    

 

Jennifer J. McPeek

    45   Executive Vice President and CFO    

 

Augustus Cheh

  47   President of Janus International    

 

George S. Batejan

    61   Executive Vice President and Global Head of Technology and Operations    

Richard M. Weil's biographical information is included under "Information about Director Nominees" on page 11.

Bruce L. Koepfgen joined Janus in May 2011 as Executive Vice President. In July 2011, Mr. Koepfgen was named CFO of Janus, and in August 2013, he was named President of Janus. He also serves as President and Chief Executive Officer of the Janus Investment Fund and Janus Aspen Series Trusts (appointed in July 2014). Mr. Koepfgen is a member of the Janus executive committee, INTECH's board of directors and Perkins's board of directors, and works with senior leaders to advance the interests of Janus's clients, shareholders and employees. Prior to joining Janus, Mr. Koepfgen was Co-CEO of Allianz Global Investors Management Partners and CEO of Oppenheimer Capital from 2003 to 2009. From August 2010 through October 2011, Mr. Koepfgen was a director of the Mortgage Guaranty Insurance Corporation, and was a director of Thermo Fisher Scientific from May 2005 through September 2008. Mr. Koepfgen was previously a managing director of Salomon Brothers Inc. where he held various positions from 1976 to 1999 and he was president and principal of Koepfgen Company LLC, a management consulting organization, from 1999 to 2003.

Jennifer McPeek is Executive Vice President and Chief Financial Officer of Janus. Ms. McPeek was appointed CFO of Janus in August 2013 and was appointed as Executive Vice President in January 2014. Prior to taking over as CFO, Ms. McPeek was Senior Vice President of Corporate Finance and Treasurer overseeing the Financial Planning, Investor Relations, Treasury and Corporate Development functions. In Ms. McPeek's current role, she serves as a member of the Janus executive committee and oversees Janus's finance, corporate accounting and tax departments. Prior to joining Janus in 2009, Ms. McPeek was senior vice president of strategic planning at ING Investment Management – Americas Region from 2005 to 2009. Ms. McPeek was previously an Associate Principal and co-leader of the North American Capital Markets at McKinsey and Company in their corporate strategy and finance practice from 1995 to 2001, and previously worked in the investment banking industry for Bank of Boston and Goldman, Sachs & Company from 1991 to 1995. Ms. McPeek holds the Chartered Financial Analyst designation.

Augustus Cheh joined Janus in March 2011 as President of Janus International (a division of Janus), and oversees Janus's non-U.S. businesses in Europe, Asia Pacific, and Latin America. Mr. Cheh also is Executive Vice President of Janus Capital Management LLC and a member of the Janus executive committee. Prior to joining Janus, Mr. Cheh was at AllianceBernstein from 2003 to 2011. He was serving as CEO of Asia ex-Japan when he left in 2011, with oversight responsibility

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for the institutional, retail, and Bernstein sell-side businesses for the Asia region. Mr. Cheh was the global director of investments at PricewaterhouseCoopers from 2000 to 2003. From 1994 to 2000 Mr. Cheh was at J.P. Morgan Investment Management where he started as a senior quantitative research analyst. Later on, he was a trader of U.S. government and money market securities, and subsequently, he was a fixed income portfolio manager where he managed short-duration and intermediate-duration strategies and other fixed income portfolios. He was also portfolio manager of the JP Morgan U.S. Short Duration Bond Fund. Before joining J.P. Morgan Investment Management, Mr. Cheh was a management and actuarial consultant at Towers Perrin from 1991 to 1994.

George S. Batejan joined Janus in October 2010 as Senior Vice President and Global Head of Technology and Operations. In January 2012, his title became Executive Vice President and Global Head of Technology and Operations. He is a member of the Janus executive committee and INTECH's board of directors. Prior to joining Janus, Mr. Batejan was senior vice president and chief information officer at Evergreen Investments, Inc. from June 2003 to October 2009. He has more than 30 years of global technology and operations experience in the financial services industry, including serving as executive vice president and chief information officer for Oppenheimer Funds, Inc., senior vice president of American International Underwriters (a division of AIG) with global responsibility for Operations and Technology, and was at The Chase Manhattan Bank, N.A. for 18 years where he served in positions ranging from vice president and division executive for the Americas' Service Delivery Group, Private Banking, to vice president and Chief Information Systems Officer, Asia.


COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis ("CD&A") provides shareholders with a detailed description of the Company's executive compensation philosophy and programs, explains the compensation decisions the Compensation Committee (defined as the "Committee" for purposes of this CD&A) has made under those programs and describes the factors considered in making those decisions.

Letter to Shareholders

Dear Janus Shareholders,

We believe that our executive pay practices align the interests of Janus executives, shareholders and clients, help attract and retain top-performing executives, and reward executives for achieving investment, financial and strategic objectives, while mitigating risks that may be harmful to Janus, its shareholders and clients.

Shareholder Outreach:

We continue to seek feedback from our shareholders regarding our pay structure and the effectiveness of our proxy statement pay disclosure. As part of these efforts:

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Importantly, reflecting the input we received and the changes we have made, approximately 90% of the votes cast were in favor of the non-binding advisory vote to approve executive compensation at the 2014 annual meeting of shareholders, which was a significant improvement over the approximately 61% approval rates achieved in both 2013 and 2012.

Strategic Objectives and 2014 Performance

Janus is executing a multi-year strategic plan that focuses on investment performance, client service, financial strength, and Intelligent Diversification initiatives which are described in more detail throughout this CD&A, all of which we believe will create a stronger and more globally diverse firm that is better suited to deliver consistent results for clients, shareholders and employees. While the Company is still implementing this strategy, in 2014 we believe there was real progress and successes in a number of areas:

This progress is being recognized in the marketplace with tangible results for shareholders. At December 31, 2014, the Company's one-year total shareholder return ("TSR") was 34%, which was the best return among our Public Company Peer Group. Additionally, the annualized three-year TSR of 59% was in the top quartile of the Public Company Peer Group.

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2014 Executive Compensation Decisions

The Committee relied upon the scorecard approach we implemented last year, described in detail beginning on page 33, to align CEO compensation with Company performance. Based on improved investment performance, strong financial results, and significant progress made in executing our strategic initiatives in 2014, CEO compensation increased 75% to $8.0 million in 2014. Compensation for the NEOs (excluding the CEO, referred to as "other NEOs") increased as well, ranging from 17% to 61% based upon their individual responsibilities and contributions toward Company results. We believe these compensation increases appropriately reward the NEOs for optimizing current year results which delivered value to clients and shareholders and appropriately recognizes the NEOs for making significant progress against the multi-year strategic plan.

We are pleased with the progress made in 2014 and are encouraged that these results are translating into better shareholder returns, however, we recognize there is still more work to be done. Today, our firm is financially stronger and more stable than it has been in the past, with better investment talent and better opportunities for clients than we have had in recent memory. We are confident that if Janus continues to successfully execute its strategy, it will emerge a stronger and more globally diverse firm, and be better suited to deliver more consistent results for clients, shareholders, and employees.

Timothy K. Armour
Chairman of the Compensation Committee

Shareholder Outreach and Review of Compensation Practices

At the 2014 annual meeting of shareholders, approximately 90% of the votes cast were in favor of the advisory vote to approve executive compensation, which was a significant improvement over the approximately 61% approval rates achieved in both 2013 and 2012.

Following the 2014 annual meeting of shareholders, members of management engaged in conversations with shareholders representing more than 40% of Janus common stock to solicit feedback regarding our executive pay structure and proxy statement disclosures, in an effort to improve our practices in these areas. These discussions provided valuable feedback and confirmed that the improvements the Committee made to the executive pay structure were viewed positively by our shareholders. Based on this feedback, and the favorable say on pay vote in 2014, the Committee did not make any significant changes to the NEOs 2014 pay structure.

In addition to soliciting ongoing feedback from shareholders, and as a result of the informative and collaborative meeting with ISS the previous year, the Chairman of the Committee and members of management met in person with representatives of Glass Lewis in September 2014 to discuss the approach they use to evaluate executive compensation practices. Glass Lewis made several suggestions, including disclosure improvements aimed at better explaining the tie between executive compensation and company performance, particularly with respect to our other NEOs. This feedback was taken into account by the Committee in the preparation of this CD&A.

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The alignment of executive pay with shareholder interests continues to be a top priority for the Committee. The executive compensation practices that we have implemented and maintained over the past several years, shown in the charts below, demonstrate that commitment.


What We Do

 

What We Do Not Do
                   
   
ü   Variable compensation: 94% of the CEO's 2014 total compensation and 83% of the other NEOs' 2014 total compensation is variable   ×  

No tax gross-ups for NEOs

ü   Significant equity awards: 60% of the CEO's and 40% of the other NEOs' variable compensation consists of LTI awards   ×  

No hedging/pledging: short-selling and stock hedging of Janus common stock are prohibited by all employees and pledging is prohibited by directors and executives

ü   "Double trigger" change in control provisions: LTI awards provide for accelerated vesting only if the employee is terminated after a change in control   ×  

No "single trigger" change in control provisions in our change in control agreement, or, since December 30, 2011, our LTI awards

ü   Stock ownership guidelines: NEOs are required to hold a significant amount of Janus equity or Company-managed mutual funds   ×  

No "golden parachutes" or "golden coffins" for NEOs

ü   Granting procedures: Committee has adopted granting procedures for LTI awards   ×  

No dividends or dividend equivalents on unvested or unearned performance shares or units

ü   Risk management: Board and management have robust processes in place to identify and monitor risk   ×  

No transferability of unvested LTI awards (except in the case of death or a qualifying court order)

ü   Clawback policy: Janus may recapture LTI awards paid to an executive who is found to have engaged in financial misconduct   ×  

No stock option repricing: reloads or exchange without shareholder approval

ü   Thorough assessment of performance: Committee regularly reviews tally sheets for the NEOs and evaluates the CEO's performance using a scorecard approach   ×  

No excessive perquisites

                

Analysis of Pay for Performance

This section describes (i) how the CEO's 2014 compensation is tied to the Company's performance and (ii) the process by which the Committee determined the CEO's 2014 compensation.

As an asset management company, Janus must deliver strong, consistent long-term investment excellence for its clients. By executing a strategy that focuses on investment performance, client service, financial strength, and Intelligent Diversification, the Company's business model will continue to meet the evolving needs of its clients, as well as reduce the risk embedded in the former business model. Successfully executing these initiatives will better enable the Company to deliver more consistent financial and investment results for shareholders and clients over the long-term.

The Committee believes that executives should be appropriately rewarded for successfully executing the Company's long-term business strategy, while optimizing current year operating results. Many of

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the necessary building blocks have been put in place to modernize the organization, allowing the Company to begin seeing results in many of the elements of its strategic plan; however, there is more work to be done. The Committee and the Board recognize that in periods of restructuring and diversification, executing a strategic vision to build a stronger, more diverse and more stable Company takes several years to fully execute and that it may take several years to realize results from these efforts. Accordingly, the Committee believes that executive compensation decisions, and in particular, the CEO compensation decisions, should give reasonable weight to the achievement of strategic business goals as Janus continues through the current transition period. To do otherwise would result in demotivation of key executive talent during a critical time in the Company's evolution.

The CEO's compensation structure is based upon the same factors used to evaluate the Company's business. This structure aligns CEO compensation with the factors that drive long-term value for shareholders and clients. As illustrated in the table below and consistent with the process implemented for 2013, the Committee utilized a scorecard for 2014 where 30% of the CEO's variable compensation was based on delivering investment excellence for clients, 30% was based on driving financial results for Janus shareholders, and the final 40% was based on executing the strategy, including various Intelligent Diversification initiatives, which should generate better long-term results for both clients and shareholders.

Weighting
Compensation Objectives
Performance Factors
   
30%   Deliver investment excellence for Janus clients  

1-, 3- and 5-year investment performance

    

30%

    

 

    

Drive financial results for Janus shareholders

    

 

Total company net flows

Operating income and margin growth

Further strengthen the balance sheet and continue returning capital to shareholders

   

    

    

40%

    

 

    

Drive strategic results for long-term success for clients and shareholders

    

 

Improve client service

Execute Intelligent Diversification initiatives

Ensure operational excellence

Hire the best talent

For 2014, 60% of the CEO's variable compensation was dependent upon delivering investment excellence for clients and driving financial results for Janus shareholders. This weighting balances client and shareholder expectations and is designed to align most of the CEO's variable compensation with results that drive value for each of these important stakeholders. The Committee determined it was appropriate to tie the remaining 40% of variable compensation to the execution of the Company's overall business strategy, including our ongoing commitment to client service, delivering operational excellence, hiring the best talent and executing the various Intelligent Diversification initiatives focused on diversifying product offerings, distribution capabilities, and geographic presence.

This scorecard approach imposes reasonable boundaries around the amount of discretion that the Committee can exercise when determining the CEO's total variable compensation. Because the Company is still in the midst of implementing its multi-year business strategy, the Committee believes that using pre-defined targets to establish CEO variable compensation is not a viable

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compensation structure at this time. The Committee further believes that the scorecard approach achieves the same objective that pre-defined targets would accomplish; mainly, aligning the CEO's compensation with Company performance. The Committee intends to periodically evaluate the scorecard weightings and make appropriate modifications, particularly as the execution of the strategic vision continues to translate into actual results, to ensure the CEO's total compensation continues to align with Company performance.

The Committee established a total variable compensation target for Mr. Weil's 2014 compensation. In its analysis, the Committee reviewed the median variable compensation for the Company's Public Company Peer Group as provided by its Compensation Consultants. The Committee also considered the size of the Company as compared to its Public Company Peer Group for revenue, AUM, and relative performance against these peers, as well as the Company's current strategic efforts to transition to a more globally diverse organization. The market data provided by the Committee's Compensation Consultants indicates a median CEO variable compensation amount for the Company's Public Company Peer Group of approximately $9 million, which the Committee adjusted downwards by approximately one-third, to $5.5 million for the aforementioned reasons. See "Compensation Decision-Making Process – Peer Groups" on page 51 for more detail.

Having established the target variable compensation amount for Mr. Weil, the Committee completed a rigorous assessment of Mr. Weil's performance relative to specific 2014 investment, financial, and strategic objectives mentioned in the table above and described in more detail below. As previously mentioned, the Committee assigned a weighting to each of the three categories of objectives to identify for shareholders how their relative importance relates to the Company's overall success, and, therefore, to shareholder value. The Committee then rated Mr. Weil's performance against each of these factors to determine an overall performance rating.

The Committee's evaluation of the CEO's performance involved: (i) completing an assessment of the CEO's overall performance versus each objective; (ii) using the following table to identify a ratings range for each set of objectives; and (iii) determining an overall performance ratings range in consideration of actual performance and the assigned weights.

Rating   Committee's Evaluation of Performance
 
0.0 to 0.5   Significant decline in absolute performance year-over-year

Bottom quartile performance relative to the applicable peer group or Morningstar ratings

0.5 to 1.0   Slight decline to flat in absolute performance year-over-year

Slightly below median performance relative to the applicable peer group or Morningstar ratings

 
1.0 to 1.5   Slight increase in absolute performance year-over-year

Slightly above median performance relative to the applicable peer group or Morningstar ratings

1.5 to 2.0   Significant increase in absolute performance year-over-year

First or high second quartile performance relative to the applicable peer group or Morningstar ratings

 

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The Committee's determination of a ratings range for each of the weighted objectives was determined by reviewing:

Below are the highlights of the results from each area of evaluation (Investment Excellence, Financial Results, and Strategic Results) that the Committee took into account when determining the CEO's compensation for 2014.

Weight   Compensation Objective   Performance Factors
   
30%   Deliver investment excellence for Janus clients   1-, 3- and 5-year investment performance

The Committee's Evaluation of Investment Excellence:  Based on (i) improvement in the investment performance of the Company's fundamental equity strategies; (ii) the continued strength in the long-term investment performance of the Company's fixed income strategies; and (iii) strong long-term track records of the mathematical equity strategies, the Committee assigned a rating of 0.5 to 1.0 to the objective of "Investment Excellence".

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  Weight
Compensation Objective
Performance Factors
 
    30%   Drive financial results for Janus shareholders   Total company net flows
Operating income and margin growth
Further strengthen the balance sheet and continue returning capital to shareholders
   

The Company's 2014 business performance and financial results reflect the positive impact of improved fundamental equity investment performance and continued positive support from the equity markets. The improvement in the fundamental equity investment performance has positively impacted the business in two ways. First, it has led to a 50% improvement in net flows (i.e., in 2014 the fundamental equity business experienced net outflows of $8 billion compared to net outflows of $16 billion in 2013). Second, improved investment performance helped lead to a reduction in the negative performance fees, which has positively impacted revenue and profitability. In 2014, mutual fund performance fee revenue was $(60) million compared to $(88) million in 2013.

Total Company Net Flows:  Total company long-term net flows in 2014 of $(4.9) billion compared to $(19.7) billion in 2013. The year-over-year improvement in net flows was driven by reduced outflows in the fundamental and mathematical equity businesses, as well as an increase in net inflows in the Company's fixed income business that was the result of continued strength in the fundamental fixed income strategies and the build-out of our global macro strategy following the arrival of Bill Gross in the fourth quarter.  
GRAPHIC
Operating Income and Margin:  Operating income in 2014 was $290 million, representing an increase of $51 million or 21% year-over-year, which resulted in an operating margin of 30% for 2014, compared to 27% in 2013. The increase in profitability in 2014 was driven by higher average AUM and a continued focus on financial discipline. Despite the improvements that were made in 2014, operating income and margin continue to be negatively impacted by the mutual fund performance fees.  
GRAPHIC

Balance Sheet and Returning Cash to Shareholders:  During 2014, management continued to focus on strengthening the balance sheet by reducing the company's total debt outstanding, while returning a growing portion of annual cash flow from operations to shareholders. Over the course of the year, the company repaid $99 million of debt, which, along with the continuation of strong cash flow generation, led to an increase in net cash. Additionally, over the course of 2014, the Company returned $142 million to shareholders in the form of share repurchases and regular dividends, which was equivalent to 65% of annual cash flow from operations. The annual cash flow from operations payout in 2014 of 65% compared favorably to 2013 when the Company returned 37% of annual cash flow from operations to shareholders.

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The Committee's Evaluation of Financial Results:  Based on the significant improvement in total company net flows year-over-year, meaningful improvement in operating margins year-over-year, the continued strengthening of the firm's balance sheet, and the increase in capital returned to shareholders, the Committee assigned a rating of 1.0 to 1.5 to the objective of "Financial Results".

 
   
   
   
   
  Weight
Compensation Objective
Performance Factors
 
    40%   Drive strategic results for long-term success for clients and shareholders   Improve client service
Execute
Intelligent Diversification initiatives
Ensure operational excellence
Hire the best talent
   

With the appointment of Mr. Weil as a director and Chief Executive Officer in 2010, the Company established a multi-year strategic plan that focuses on investment performance, client service, financial strength, and Intelligent Diversification. The strategic results section of the scorecard focuses on the progress achieved in executing the Intelligent Diversification initiatives and on the key strategic hires made during the year.

The primary goal of Intelligent Diversification is to moderate volatility in the Company's business results in order to provide long-term benefits to Janus shareholders, clients, and employees. Intelligent Diversification includes four growth initiatives all of which are described below.

GRAPHIC

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GRAPHIC

Grow Fixed Income Business:  The Fixed Income franchise finished 2014 with approximately $34 billion of AUM, the highest level of fixed income AUM in the firm's history (19% of total company AUM, compared to 6% at the end of 2009). Net flows of $4.4 billion during 2014 compared favorably to the active fixed income industry, which experienced net outflows during 2014. Since 2010, the fixed income AUM has increased at a compound annual growth rate ("CAGR") of 22%, driven largely by organic growth of $18.2 billion during this time. In 2014, the Company hired Bill Gross to manage the global macro strategy, which has elevated the visibility of this business.

GRAPHIC

Expand Non-U.S. Distribution Capabilities and Product Offerings:  The non-U.S. business ended 2014 with approximately $29 billion of AUM, the highest level of non-U.S. AUM in the Company's history, and generated $3.4 billion of net flows during the year, which also marked the highest level of annual net flows in the firm's history. Since 2010, the non-U.S. business has generated $7.3 billion of net organic growth. Additionally, the strategic alliance with The Dai-ichi Life Insurance Company, Ltd. ("Dai-ichi Life"), continues to assist with ongoing growth in Japan. In addition to more than $2 billion of general account assets that Dai-ichi Life has invested in the Company's fundamental equity, fixed income and mathematical equity strategies, DIAM Co., Ltd. (its 50%-owned subsidiary) has raised an additional $2.5 billion in our fundamental equity and fixed income strategies.

Increase U.S. Institutional Presence:  In 2014, the Janus U.S. institutional business experienced net outflows of $4.4 billion, compared to net outflows of $6.5 billion in 2013. The net outflows in 2014 were primarily due to outflows in the mathematical equity strategies. While the overall U.S. institutional business has been challenged by low active U.S. equity search activity and declining equity allocations in favor of fixed income and alternative product strategies, the Company has expanded its institutional salesforce with dedicated teams for consultant relations, client strategy and service, as well as external sales and remains focused on increasing the number of consultant recommendations across strategies.

Develop Solutions-Based Products:  During 2014 the Company continued to focus on the development of products that are less correlated to equity beta and rates risk with INTECH and the Liquid Alternatives team. As part of the continued investment to build out the Company's asset allocation capabilities, Nobel Laureate, Myron Scholes, Ph.D. and Ashwin Alankar, Ph.D. were hired to expand the firm's efforts in asset allocation investment solutions. As the firm continued to execute its Intelligent Diversification initiatives, it acquired VelocityShares, positioning the firm to deliver rules-based and actively managed products within the rapidly growing ETF universe, enhancing the customized solutions that can be provided to clients, and enabling the firm to work with the growing segment of financial advisors and institutions focused on these instruments.

Key Strategic Hires:  In addition to hiring Nobel Laureate Myron Scholes, Ph.D. and Ashwin Alankar, Ph.D. to help us deliver world class asset allocation products and services, in September, Bill Gross joined Janus to manage our global macro strategy.

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The Committee's Evaluation of Strategic Results:  Based on the significant year-over-year progress, including the growth of the fixed income business, expansion of the non-U.S. distribution capabilities and product offerings, the key strategic hires that will help facilitate the future build-out of the global macro fixed income and asset allocation businesses and the acquisition of VelocityShares which positions the firm to deliver products in the ETF universe, the Committee assigned a rating of 1.5 to 2.0 to the objective of "Strategic Results."

Overall Performance Rating:  Based on the investment performance, financial results, and the progress executing the Company's strategic initiatives described above, the Committee established the cumulative "Overall Performance Rating" rating at 1.0 to 1.5 for 2014.


Summary of the Committee's
Evaluation of CEO Compensation:

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Actual Total Compensation

The CEO's actual total compensation for 2014 was $7.95 million, consisting of a base salary of $0.50 million and total variable compensation of $7.45 million. As shown in the chart on the right, the CEO's variable compensation represented approximately 94% of his total direct compensation in 2014.

The Committee believes that the scorecard approach has resulted in CEO compensation that recognizes the meaningful improvements in the Company's investment and financial results, as well as continued progress executing various elements of the strategic plan. The 75% increase in CEO total compensation is aligned with the Company's absolute and relative performance and is appropriately situated under the median total compensation amount when compared to the Company's Public Company Peer Group.

  CEO Pay Mix
2014


GRAPHIC

The bottom left chart illustrates the correlation between the CEO's actual total compensation and the Company's operating income over the past three years. The bottom right chart illustrates how the

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CEO's actual total compensation compares to total actual compensation of CEOs at the Company's Public Company Peer Group.

Operating Income and Janus CEO
Total Compensation
$ in millions
 
 

GRAPHIC
  Janus CEO Total Compensation Relative
to Public Company Peers (1)
$ in millions
  
  

GRAPHIC
      
(1)  Compares 2014 CEO total compensation to CEO total compensation for the Company's Public Company Peer Group. Peer compensation reflects data provided by McLagan. Total compensation included is the sum of salary, annual cash incentives and long-term incentives. See "Compensation Decision-Making Process – Peer Groups" beginning on page 51 for the companies included in the peer group.

The CEO's actual total variable compensation award was determined by multiplying the $5.5 million target total variable compensation amount by the Committee-determined Overall Performance Rating. The CEO's total variable compensation was awarded 40% as a cash bonus and 60% in LTI awards. The value of the CEO's LTI awards were granted as follows: (i) 50% in the form of a restricted stock award that will vest in four equal and consecutive annual installments, with the first installment vesting one-year after the date of grant; and (ii) 50% in the form of a performance stock unit award that may or may not vest, in whole or in part, three years after the date of grant, depending on Janus's three-year operating income margin ("3-Year OIM") during the performance period.   2014 CEO Variable Compensation Mix
  
  

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The performance criteria for Mr. Weil's PSUs were established by the Committee prior to the beginning of the three-year performance period (2015-2017). The Committee determined that operating income margin was the most appropriate performance measure for Mr. Weil's PSUs for the reasons described below.

The performance condition for Mr. Weil's PSUs is calculated using the following formula expressed as a fraction:

 
   
   
   
   
            Operating Income from (Year 1 + Year 2 + Year 3)    
 
    3-Year OIM(1)   =   Revenues from (Year 1 + Year 2 + Year 3)    
(1)
Excludes (in consultation with the Compensation and Audit Committees of the Board of Directors) certain non-recurring gains or losses that arise from a change in accounting policy, and gains or losses related to one-time transactions.

In determining the performance criteria for this PSU grant, the Committee reviewed the operating income margin for its Public Company Peer Group, Janus's historical operating income margin results, and the Company's plans for near-term investments in the business. In addition, in setting the performance criteria it recognizes that ongoing investment in the business is needed to build on the successes from 2014 and accelerate diversification, as well as build out the resources to support new talent and drive growth. These investments are likely to impact short-term operating margin, but are necessary to position the Company for long-term success.

Following a comprehensive analysis of Janus's historical operating margin over the past five years (2010 - 2014) as compared to operating margins for the Public Company Peer Group over the same time period, and a thorough evaluation of the Company's progress against the multi-year strategy, the Committee set the 3-Year OIM performance criteria for Mr. Weil's 2014 PSUs as follows:

 
   
3-Year OIM
% of PSUs that will vest after 3 years
24% or less   0%
28%   100%
32% or more   200%

Achievement of the 3-Year OIM performance criteria impacts the 2014 PSU vesting levels as follows:

In defining the performance criteria for Mr. Weil's 2014 PSUs, the Committee continued to reinforce clear linkages between pay and performance.

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When considering the link between these performance criteria and the Company's Public Company Peer Group benchmark data, the Committee noted that the Company's strategy requires continued strategic investment which may lower margins, perhaps below the peer median level, and companies included in the Public Company Peer Group are scaled and positioned substantially differently across a range of business lines which have very different margins. The Public Company Peer Group margin information is therefore only one data point that the Committee considered in determining the appropriate performance criteria for Mr. Weil's 2014 PSUs, and the Committee recognizes that it may not be an appropriate benchmark for Janus or Mr. Weil for future periods.

Mr. Weil had not received an increase in his base salary since joining Janus in 2010. The Committee reviewed the comparative benchmark data from our Public Company Peer Group, which showed that Mr. Weil's base salary was significantly below the competitive market median. Although the Committee continues to believe that Mr. Weil should be compensated almost exclusively through variable compensation, it determined to increase Mr. Weil's base salary by $75,000 per year beginning in 2015.

Other NEO Compensation

This section describes how each of the other NEO's compensation is tied to performance for 2014. When determining the amount of compensation paid to the other NEOs, as described below, the Committee considered, among other factors, the following;

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Ultimately, it is the Committee's judgment of these factors, along with competitive data, that forms the basis for determining the other NEOs' compensation.

Base salary represents a small proportion of our other NEOs' compensation (less than 20% in 2014) and salary increases are rare. Ms. McPeek was the only NEO, other than the CEO, to receive a base salary increase. The $100,000 increase, effective January 2015, better aligns her compensation with market compensation levels and recognizes her individual expertise and contributions as CFO. The Committee determined that no other salary increases were warranted for 2015.

        Variable Compensation

The Committee emphasizes variable compensation as the primary element of the other NEOs' compensation program. As illustrated in the accompanying chart, in 2014, 83% of the other NEOs' total direct compensation was variable compensation and not guaranteed, including 39% in the form of LTI awards.

  Other NEO Pay Mix
2014


GRAPHIC

Variable compensation awards paid to the other NEOs varied significantly in 2014 based on their contributions toward Company-wide investment performance, financial results, and strategic priorities, as well as their performance compared to individual objectives. These awards are determined following an assessment of each other NEOs:

Total variable compensation for the other NEOs increased in alignment with the Company's strong results in 2014 and increases ranged from 17% to 61%. While there is no specific weighting nor is

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there a requirement that individual contributions be balanced across scorecard objectives, each of the other NEOs made meaningful contributions toward the following Company objectives:

 
   
   
    Company Objectives

Performance Results
    Deliver investment excellence for Janus clients  

Improvement in the investment performance of the Company's fundamental equity strategies

       

Continued strength in the long-term investment performance of the Company's fixed income and mathematical equity strategies

  Drive financial results for Janus shareholders  

Total company long-term net flows in 2014 of $(4.9) billion compared favorably to $(19.7) billion in 2013

Operating income of $290 million, represented an increase of $51 million or 21% year-over-year

Returned $142 million to shareholders in the form of share repurchases and regular dividends, equivalent to 65% of annual cash flow from operations

One-year TSR of 34% compared to 14% for the S&P and an average of 8% for our Public Company Peers

    Drive strategic results for long-term success for Janus clients and shareholders  

Continued to execute the Company's strategic plan, including several Intelligent Diversification initiatives;

       

Achieved the highest levels of AUM in the firm's history in both the fixed income and Non-U.S. businesses

       

Improved net outflows in the U.S. institutional business to $4.4 billion from $6.5 billion in 2013

       

Focused on the development of products that are less correlated to equity beta and rates risk

       

Acquired VelocityShares to position the Company to deliver new products in the rapidly growing ETF universe

       

Hired and supported the onboarding of exceptional new talent

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The charts below describe the key 2014 achievements and other noteworthy successes for each of the other NEOs. In addition, these charts provide an analysis of the other NEOs' respective compensation breakouts for 2014 as compared to 2013. The compensation shown in the tables below differs from the amounts shown in the "Summary Compensation Table" on page 57 because these tables show variable compensation associated with 2014 performance that was determined and paid to the other NEOs in 2015 (the LTI portion of the variable compensation shown below will be reflected, as applicable, in our summary compensation table for 2016 in accordance with SEC rules).

 
   
Bruce L. Koepfgen, President
2014 Total Compensation ($000s):
   


GRAPHIC

  Key Individual Achievements and Contributions Toward Company Results:
   

In the third quarter of 2013, Mr. Koepfgen relinquished his CFO role to Ms. McPeek and took on the position of President of Janus. In that capacity, he works in partnership with the CEO and the Executive Committee to implement the firm's multi-year strategic plan and drive financial results.

Mr. Koepfgen partnered with leaders of our institutional business to expand that group to include dedicated teams for consultant relations, strategy and service, as well as external sales. He was critical to the successful onboarding of the Company's new Chief Marketing Officer, as well as proper alignment of resources across the U.S. distribution, product and marketing groups.

Mr. Koepfgen's role further evolved during 2014 as he assumed additional executive responsibilities concerning the U.S.-based Janus mutual funds. Responsibilities include: presiding over the U.S.-based Janus mutual funds, serving as primary management liaison to the Board of Trustees, providing leadership and oversight to the U.S. distribution, product and marketing groups.

  Other Noteworthy Matters:
   

Mr. Koepfgen's 43% increase in total compensation was driven, in large part, by a one-time restricted stock award equal to $500,000 which vests over four years, and was granted in recognition of the continued evolution of his role, his contributions on Intelligent Diversification initiatives – particularly in the U.S. distribution space and in the development of solutions-based products – and his efforts to properly resource the U.S. distribution, product and marketing groups following the change in leadership in those organizations.

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Jennifer J. McPeek, Executive Vice President and CFO
2014 Total Compensation ($000s):
   


GRAPHIC

  Key Individual Achievements and Contributions Toward Company Results:
   

Ms. McPeek was responsible for the Company's financial planning and cost management efforts through a significant period of growth and change. She contributed to the following financial results as of December 31, 2014: strong balance sheet and net cash position of $336 million, operating margin of 30% above peer median when adjusted for performance fees, and one-year TSR of 34%.

Ms. McPeek led efforts to increase the annual payout of cash flow from operations, which resulted in a 2014 payout ratio of 65% compared to 37% the prior year and 29% in 2012.

She led the Company's efforts to transition toward key performance indicators which has created a more robust internal measurement and accountability framework to provide informed capital and resource allocation decisions.

Ms. McPeek was instrumental in the acquisition of VelocityShares which will allow the firm to serve an entirely new segment of clients and financial advisors focused on ETFs.

She finalized the next generation incentive compensation plans with our subsidiary companies. Compensation plans across the Company are fully aligned with a consistent profits-based philosophical approach.

  Other Noteworthy Matters:
   

Ms. McPeek received a base salary increase from $300,000 to $400,000 and a 76% increase in variable compensation, which includes a one-time restricted stock award equal to $150,000 which vests over four years. These increases, including the one-time stock award, acknowledge her experience and contributions as the Company's CFO following her first full year in that role, and better align her total compensation with market competitive levels.

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Augustus Cheh, President of Janus International
2014 Total Compensation ($000s):
   


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  Key Individual Achievements and Contributions Toward Company Results:
   

Mr. Cheh continues to expand the Company's non-U.S. distribution capabilities resulting in an annualized organic growth rate of 14% in 2014, and a CAGR of 21% since Mr. Cheh joined the Company in 2011. In addition to increased buy ratings from global and local consultants, his teams are generating momentum and building relationships with local distributors in Hong Kong and Taiwan.

Mr. Cheh delivered strong financial results as of December 31, 2014, including: a year-over-year revenue increase of 29%, and net flows increased to $3.4 billion representing a 17% increase over 2013. He continues to effectively manage costs in the Company's non-U.S business.

Under Mr. Cheh's leadership, AUM in the Company's non-U.S. business reached $29 billion as of December 31, 2014 which represents a new high water mark for the Company. Within the past year, the Company welcomed new clients from the Middle East, the Netherlands, Germany and the United Kingdom through both retail and institutional channels.

Mr. Cheh continues to play a critical role in the strategic alliance with Dai-ichi Life which provides ongoing growth opportunities in Japan. In addition to more than $2 billion of general account assets that Dai-ichi Life has invested in the Company's fundamental equity, fixed income and mathematical equity strategies, its 50%-owned subsidiary has raised an additional $2.5 billion in our fundamental equity and fixed income strategies.

In 2014, Mr. Cheh strengthened the institutional and consultant teams in the UK, enhanced the client service team in Japan, and continued to build out the non-U.S. sales force across the regions, in an effort to continue development of a world class leadership team to ensure continued growth and success in the Company's non-U.S. business.

  Other Noteworthy Matters:
   

Mr. Cheh received a one-time restricted stock award equal to $150,000 which vests over four years, in consideration of the strong financial results and growth in the non-U.S. business in 2014.

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George S. Batejan, Executive Vice President and
Global Head of Technology and Operations
2014 Total Compensation ($000s):
   


GRAPHIC

  Key Individual Achievements and Contributions Toward Company Results:
   

Mr. Batejan's dedication to improving service delivery for our clients drove the following in 2014; expansion of the Company's 'back office' visitation program, increased participation in the client satisfaction survey, and meaningful improvement in survey results with an overall satisfaction rating of 93%. Quality and timeliness of the delivery of the net asset values for the Company's funds remain at best-in-class levels.

Under Mr. Batejan's leadership, Janus was honored with a first place NOVA award (presented by NICSA) for the Company's Operational Excellence program which encompassed nearly 50 employees who generated numerous ideas resulting in process or quality improvements in 2014.

Mr. Batejan's teams have been instrumental to the Company's success in growing the fixed income business, expanding the Non-U.S. presence, and developing solution-based products. Valued contributions during 2014 include: preparing the Company to operate as a Master Agent in Taiwan, launching redesigned websites for the Advisor business and for INTECH to wide acclaim, implementing further enhancements to Quantum and eQuantum (vital tools for the portfolio managers), and activating several new derivative types to support Bill Gross as he stepped in to manage the Global Unconstrained Bond Fund.

During 2014, the corporate action process was redeveloped to further reduce risk. Additional tools were implemented for both legal and compliance which improve efficiency and response time to regulator and other outside inquiries.

Mr. Batejan's ongoing commitment to manage expenses tightly within the Global Technology and Operations organization frees up capital for the firm to make investments in other areas of the business that ensure progress of the Company's Intelligent Diversification initiatives.

  Other Noteworthy Matters:
   

Mr. Batejan received a one-time restricted stock award equal to $100,000 which vests over four years based on his dedication to client service delivery and the critical roles and responsibilities his teams have taken on following the build out of the asset allocation team and the hiring of Bill Gross to manage the Global Unconstrained Bond Fund.

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Elements of Executive Compensation

In addition to compensation amounts that are competitive and appropriate, the Committee intends for the compensation program to be internally fair and equitable relative to roles, responsibilities, and relationships among NEOs. Accordingly, the Committee also considers other factors in the process of determining compensation levels for each NEO, other than the CEO, including those factors described elsewhere in this CD&A.

The Committee believes that Janus provides pay for performance programs that are externally competitive and internally equitable (similar pay opportunities for similar roles and responsibilities) and that support the following compensation program objectives:

Janus pays base salaries to attract talented executives and to provide a fixed amount of cash compensation. Base salaries for the NEOs are individually determined by the Committee, in consultation with the Compensation Consultants, and reflect the NEOs level of responsibility, expertise, skills, knowledge and experience. The Committee determines the base salary amounts for the upcoming fiscal year each December.

Other than for the CEO, President, and CFO, variable compensation for all Janus employees is generally paid out of a pool of funds equal to a percentage of consolidated operating income before the deduction of incentive compensation and overhead ("pre-incentive operating income"). The overall pool from which variable compensation awards are granted is a function of the Company's performance in any given year. The chart illustrates the change in the variable compensation pool relative to the change in operating income over the past three years. Based on strong financial results in 2014, there was a notable increase in the Company's variable compensation pool.  
GRAPHIC

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Variable compensation is awarded in the form of cash and LTI awards (consisting of a mix of performance-based awards and/or restricted stock in 2014). A majority of the CEO's compensation is in the form of LTI awards, and the other NEOs receive a significant portion of their variable compensation in the form of LTI awards. The Committee believes LTI awards encourage alignment between the interests of the Company's executive officers and Janus shareholders because the value of the awards is directly dependent on the price of Janus stock.

Variable compensation awards to NEOs are typically granted as a combination of cash and equity (in the form of LTI awards), with equity comprising a significant portion of the total variable compensation award. By awarding a portion of the total variable compensation award as cash, the Committee is able to provide appropriate short-term incentives for the NEOs, which is an important retention element of our overall compensation philosophy. Awarding a significant portion of the total variable compensation award as equity serves two fundamental compensation objectives: (i) LTI awards are able to provide a longer-term focus for NEOs to balance the short-term nature of the cash award; and (ii) when used in conjunction with the stock ownership guidelines, LTI awards ensure the NEOs acquire and maintain a meaningful stock position in the Company, which creates a strong alignment between the interests of the NEOs and the long-term interests of Janus shareholders. Stock ownership levels for each NEO are reviewed annually by the Committee and evaluated against the minimum stock ownership guidelines as described under "Ownership Guidelines" on page 53. As of January 29, 2015, Mr. Weil's equity ownership exceeded 20 times his base salary and the other NEOs equity ownership each exceeded four times their respective base salary, with the exception of Ms. McPeek who was appointed to her role in 2013.

As set forth in the "Summary Compensation Table" on page 57, the Company issued the following types of long-term incentives for NEOs in 2013:

  Title
Type of Awards
Vesting Schedule
 
    CEO   50% Restricted Stock   4-year ratable time-based vesting (i.e., 25% each year)    

 

 

 

 

50% Performance Units

 

3-year cliff performance-based vesting, based on operating income margin

 

 
    Other NEOs   100% Restricted Stock   4-year ratable time-based vesting (i.e., 25% each year)    

The intent behind granting PSUs to the CEO is to provide a clear link between Mr. Weil's compensation and the long-term performance of the Company. The Committee considered whether to introduce performance-based equity into the compensation structure for the other NEOs, but ultimately decided against it because the program is still relatively new and needs more time to develop before being considered for inclusion in the compensation program for the other NEOs. In addition, the NEOs, other than the CEO, President and CFO, are paid from the pre-incentive operating income pool, which means their total variable compensation award is already linked to Company performance through the pool funding formula described above.

The Committee believes that issuing restricted stock to NEOs maintains a strong alignment between the equity interests of the NEOs and the long-term interests of Janus shareholders as any value derived from the restricted stock is entirely dependent on the value of Janus's common stock at any

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given point in time. As Janus's stock price increases or decreases, so does the value of the NEOs' restricted stock. The four-year ratable vesting schedule is designed to provide a retentive component to the equity awards while still delivering value to the NEOs for their contributions to the Company's performance.

Future Executive Compensation Structure

The Committee will continue to leverage the scorecard approach to ensure that executive compensation and Company results are properly correlated. In particular, the scorecard ensures that executive compensation is based primarily on a thorough evaluation of business results and individual contributions that drive long-term value for shareholders. Going forward, the Committee will maintain on-going dialogue with shareholders and assess the components of executive compensation on an annual basis. When necessary, the Committee will make adjustments to the overall compensation structure, elements of the scorecard such as performance factors and measures, the mix of cash and equity, and specific components that make up each executive's compensation, in order to drive continued alignment between executive compensation and Company performance.

Compensation Decision-Making Process

The Committee determines the levels and type of compensation paid to the NEOs. The Committee also considers the scope of each NEOs responsibilities, skills, and talents, demonstrated leadership capabilities, compensation relative to similarly situated peers, and Company and individual performance on an absolute and relative basis. External factors, such as market compensation levels, unforeseen issues that arise during the year that may lead to a change or reprioritization of pre-established goals or objectives, and Compensation Consultant recommendations, are also taken into consideration.

As more fully described in the "Corporate Governance – Risk Oversight" section on page 16, the Committee carefully reviews the risks and rewards associated with the Company's compensation programs.

Janus competes for top executive talent with a broad and diverse range of public and privately owned asset management firms, including firms that, from a size and complexity perspective, are smaller, larger, or similar to Janus. Recognizing this wide range of competitors and acknowledging the complexity associated with pay and performance comparisons, the Committee:

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Our Custom Peer Group includes companies that are most similar to Janus relative to size, business complexity and operating structure. This group includes companies that are publicly owned, like Janus, as well as privately owned companies and asset management subsidiaries of larger companies. In 2014, the Committee reviewed the composition of the Custom Peer Group and determined that no changes were necessary.

In determining the reasonableness of the 17-company Custom Peer Group, the Committee acknowledges that: (i) no single competitor company is exactly like Janus; (ii) Janus competes with a broad range of companies for executive talent; and (iii) the Custom Peer Group provides data from publicly traded asset management companies in addition to the confidential data from private companies, which provides the Committee with a more complete view of the competitive landscape.

The Committee believes that the Custom Peer Group for 2014 provides a reasonable frame of reference for evaluating executive pay levels and practices given a combination of factors, including the competitors' size, geographic scope, operating structure, product breadth, operating complexity, channel coverage, ownership, history, and performance. The Custom Peer Group consists of the following firms:

 
   
   
   
Janus's Custom Peer Group

 

 

Affiliated Managers Group

 

Neuberger Berman Group

 

 
  AllianceBernstein L.P.   Nuveen Investments    
    American Century Investments   Old Mutual Asset Management    
  Delaware Investments   Oppenheimer Funds, Inc.    
    Eaton Vance Management   Putnam Investments    
  Jennison Associates, LLC   T. Rowe Price Associates, Inc. (1)    
    Lazard Asset Management LLC   Waddell & Reed, Inc.    
  MFS Investment Management   Western Asset Management Co.    
    Morgan Stanley Investment Management        
(1)
Considered in the pay analysis for all NEOs except for the CEO position. This company was not included in the CEO pay analysis due to the incumbent's significant equity holdings which may or may not have had a distortive impact on that CEO's compensation.

Our Public Company Peer Group takes into consideration companies with similar business models and represents peers with which the Company may compete for talent, but it also includes companies that are, in some cases, substantially larger than Janus on a revenue and/or AUM basis. The Public Company Peer Group provides shareholders the opportunity to make independent comparisons of the Company's relative pay and performance. The Committee believes that public asset management companies that compete with Janus for business and talent provide better pay and performance comparisons than do companies that are only similar to Janus based on the amount of revenues or assets. There are a smaller number of publicly traded global asset

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management companies that are similar to Janus when the following factors are taken into consideration: size, geographic scope, operating structure, product breadth, operating complexity, distribution coverage, ownership, history, and performance. The Committee acknowledges that the Public Company Peer Group includes companies that are larger than Janus, and for that and other reasons as described on page 34 under the section titled "Analysis of Pay for Performance – Compensation Committee Decisions about CEO Pay – Setting Total Variable Compensation Target", decided to adjust the CEO's 2014 variable compensation target downward by approximately one-third. The Committee reviewed the composition of the Public Company Peer Group in 2014 and determined that no changes were necessary.

The Public Company Peer Group consists of the following firms:

 
   
   
   
Janus's Public Company Peer Group

 

 

Affiliated Managers Group, Inc.

 

Franklin Resources, Inc.

 

 
  AllianceBernstein Holding L.P.   Invesco Ltd.    
    Ameriprise Financial, Inc.   Legg Mason, Inc.    
  Cohen & Steers, Inc.   T. Rowe Price Group, Inc.    
    Eaton Vance Corp.   Waddell & Reed Financial, Inc.    
  Federated Investors, Inc.        

In making compensation decisions, the Committee relies in part on advice from the Compensation Consultants who provide an objective perspective, comprehensive comparative data on the financial services industry, pay for performance approaches, and general best practices, which enhance the quality of the Committee's decisions. Please refer to "Corporate Governance – Compensation Consultants to the Compensation Committee" on page 18 for additional detail as to the Committee Consultants' activities for 2014.

Management assists the Committee by providing information and recommendations on Janus's various compensation programs. At the beginning of each year, the CEO, in conjunction with Janus's Human Resources department and other key leaders within Janus, recommends to the Board and the Committee the investment, financial, and strategic objectives for the Company. During the year, management provides the Board and the Committee with periodic progress reports. After the end of each year, management presents the Committee with its evaluation of the Company's performance against those objectives. The CEO then evaluates the individual performance of each member of the senior management team and recommends levels of compensation (other than his own) to the Committee for review and approval.

Additional Compensation Practices and Policies

The Compensation Committee determines the minimum stock ownership guidelines for the CEO, the NEOs, and all members of the Company's Executive Committee. Ensuring that executive officers own a meaningful number of shares in the Company more closely aligns their economic interests with our shareholders.

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All NEOs and Executive Committee members are either meeting the guidelines or on track to fulfill guidelines by the required deadline.

The Company generally believes that reasonable severance benefits should be provided to employees without individual performance issues whose employment is terminated due to role elimination. Fair and reasonable severance benefits provide some support to terminated employees as they seek new employment. Severance benefits also provide Janus an opportunity to obtain a release of legal claims and enforce additional restrictive covenants (such as non-solicitation clauses), which help protect the business. A description of the severance benefits available to each NEO is outlined in the "Executive Compensation – Termination and Change in Control Arrangements with Named Executive Officers" section beginning on page 65.

Change in control severance benefits for certain executives are generally intended to mitigate the potential conflict of interest that may arise in a change in control transaction and therefore align the interests of those executives with the interests of Janus shareholders. Relative to the overall value of Janus, these potential change in control benefits are reasonable and consistent with the general practice among the Company's peers. These benefits are based on a "double trigger" approach and only arise if there is a material negative change to employment arising from, or within two years after, a change in control of Janus. The change in control benefits does not include any tax gross-up rights and the executives are personally responsible for the payment of any excise tax. The change in control severance rights of the NEOs, if any, are outlined in the "Executive Compensation – Termination and Change in Control Arrangements with Named Executive Officers" section beginning on page 65. In addition, as of December 30, 2011, all new LTI awards are subject to accelerated vesting only if (i) there is a change in control of Janus, and (ii) the executive's employment is terminated either by the Company without cause or for "good reason" by the executive (material diminution in duties, reduction in compensation or relocation of the principal place of employment) within two years after a change in control of Janus.

LTI awards granted to members of the Company's senior management team are subject to recovery or "clawback" in the event that there is a material misstatement in the financial statements and such misstatement is found to be the result of such senior executive's active participation in, knowing concealment of, or knowing failure to identify, such misstatement. Any LTI award granted to the applicable senior executive in the three years prior to the misstatement is subject to recovery by Janus (e.g., by forfeiture of unvested awards or repayment of vested awards). This policy supports the Company's commitment to the accuracy of Janus's financial statements and discourages excessive risk-taking.

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The Company prohibits transactions in Janus stock that are speculative in nature by its employees, executives, and directors. Speculative trading includes "put" or "call" options, short sales, hedging, or similar derivative transactions. Directors and executives are also prohibited from pledging Janus shares. These policies support the Company's commitment to maintain the alignment of the interests of employees with the long-term interests of Janus shareholders.

All LTI awards are granted pursuant to written grant procedures that are designed to avoid grants of LTI awards when the Committee is aware of material non-public information concerning Janus. The grant date is established by the Committee and our written grant procedures. Management has no discretion to establish the grant date.

The Committee annually reviews other benefits provided to the NEOs. We generally provide benefits to our executives that are similar to (if not the same as) those offered to other Janus employees, except NEOs are also provided the opportunity to participate in the Executive Income Deferral Program. See "Executive Compensation – Non-Qualified Deferred Compensation" on page 65. None of the NEOs elected to participate in this deferral program in 2014. Although some of the Company's competitors may provide their executives with special perquisites, the Committee believes that the Company can retain top executive talent by providing market-competitive total compensation opportunities and health and retirement benefits. Currently, the NEOs and all other full-time employees can participate in the following benefit programs:

Section 162(m) of the Code generally disallows a tax deduction to public companies for compensation greater than $1 million paid in any one fiscal year to a corporation's CEO and three other most highly compensated executive officers (other than the CFO) as of the end of any fiscal year. However, the statute exempts qualifying performance-based compensation from the deduction limit if certain requirements are met. Janus generally intends to structure its variable compensation to achieve tax deductibility under Section 162(m). To facilitate that objective, specified performance thresholds for funding variable compensation must be satisfied before payments are made. Achievement of the threshold performance criteria did not guarantee that the NEOs would receive any specific variable compensation for 2014.

All compensation paid in 2014 was deductible; however, the Committee may make compensation decisions that do not result in tax deductibility. The Committee believes that shareholder interests

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are best served by allowing the Committee discretion and flexibility in crafting compensation programs, even though such programs may result in certain non-deductible compensation expenses.


COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

The Compensation Committee of the Board is primarily responsible for reviewing, approving and overseeing Janus's compensation plans and practices, and works with management and the Compensation Consultants to establish Janus's executive compensation philosophy and programs. The Committee is composed entirely of independent directors, as defined under the Company's Governance Guidelines and the NYSE Listing Standards.

The Committee has reviewed and discussed the "Compensation Discussion and Analysis" section with management. Based upon this review and discussion, the Committee has recommended to the Board of Directors that the "Compensation Discussion and Analysis" section be included in this Proxy Statement.

Respectfully,

Members of the Compensation Committee

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Executive Compensation

The following table contains information about the compensation that Janus paid during 2014, 2013 and 2012 to the NEOs: