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Section 1: DEF 14A (DEF 14A)

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

SCHEDULE 14A
(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934

Filed by the Registrant ☒

Filed by a Party other than the Registrant 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))
Definitive Proxy Statement
o Definitive Additional Materials
o Soliciting Material Pursuant to Section 240.14a-12
Adtalem Global Education 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):

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)
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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.
 
 
 
 
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LETTER FROM ADTALEM GLOBAL EDUCATION PRESIDENT AND CHIEF EXECUTIVE OFFICER

OCTOBER 4, 2018

TO OUR SHAREHOLDERS:

Fiscal 2018 was a year of tremendous opportunities and challenges.

I am pleased to report that the Adtalem team addressed the opportunities and responded to the challenges in ways that we believe have made us a stronger and more competitive company heading into Fiscal 2019.

The past year saw us enter into agreements to transfer the ownership of DeVry University and its Keller Graduate School of Business and Carrington College. Once completed, these two divestitures will significantly transform our portfolio. Our remaining assets create a more focused, higher performing portfolio; competing in areas where we have the right to win with platforms upon which we have opportunities to grow.

The past year also presented us with an unprecedented set of challenges in the form of hurricanes Irma and Maria. These two “Category 5” storms posed an existential threat to our students, colleagues and facilities at American University of the Caribbean School of Medicine (AUC) and Ross University School of Medicine (RUSM), and forced a full evacuation of our medical schools from St. Maarten and Dominica.

However, the Adtalem community responded to this crisis with extraordinary professionalism and empathy. We successfully relocated AUC and RUSM minimizing interruption in their respective operations and leveraged the crisis as a catalyst for identifying a new long-term home for RUSM in Barbados – a location that provides opportunities for enhanced competitiveness relative to other medical schools. This was no small feat. And it would be impossible to overstate how proud I am of the way the Adtalem team performed in support of our resilient students and colleagues in the Caribbean.

Even as the Adtalem team managed through these extraordinary developments over the course of the past year, it also managed to execute impressively and exceed our plans for the year. Our fiscal 2018 operating results reflect growth across our verticals, offset in part by cyclical headwinds affecting the Technology and Business vertical and costs associated with the transfer of DeVry University.

Of particular note was impressive organic growth at the Association of Certified Anti-Money Laundering Specialists (ACAMS), which we believe continues to validate our investment thesis and has positioned us as a leader in the professional education space for financial services. As we further refine our inorganic growth strategies, ACAMS serves as an instructive precedent – a scalable platform with attractive organic growth potential that permits us to be methodical and targeted in identifying new opportunities for additional scale, strengthened market positioning or complementary capabilities. Our commitment to the prudent and disciplined allocation of capital means that we will consider only those acquisitions that will be accretive to the portfolio in the long-term.

So, as we move into fiscal 2019, we have significant cash flow, brands that are associated with market leadership in each of our verticals, products and services that are clearly differentiated in their respective markets, and a team that understands both scale and profitability. Our team is more experienced, more diverse, and more growth-oriented, and that is reflected in our ability to deliver consistent operating results. You can trust that we will continue to streamline and strategically align our portfolio to deliver growth while driving improved operating efficiencies across our organization, and prudently balance our capital allocation by investing in platforms for growth while providing direct returns to our owners.

Just as important, you can expect that our work will continue to be guided by our mission of providing global access to knowledge that transforms lives and enables careers.

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On behalf of our Board of Directors and the entire Adtalem Global Education team, I would like to thank you, our fellow owners, for your support. We are very fortunate to have partners in education and investment who understand our value proposition and have confidence in our ability to deliver transformative academic outcomes and superior financial returns.



Lisa W. Wardell
President & CEO

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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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500 West Monroe Street
Chicago, IL 60661

NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS

Date:
November 6, 2018
Time:
9:00 a.m. Central Standard Time
Place:
Adtalem Global Education Inc.
500 West Monroe Street
Chicago, Illinois 60661
   
 
Record date:
September 14, 2018
 
Items of business:
(1)
Elect the directors named in the attached Proxy Statement to serve until the 2019 Annual Meeting of Shareholders
 
 
 
 
(2)
Ratify appointment of PricewaterhouseCoopers LLP (“PwC”) as Adtalem’s independent registered public accounting firm for fiscal year 2019
 
 
 
 
(3)
Say-on-Pay: Conduct an advisory vote to approve the compensation of named executive officers
 
 
 
 
(4)
Consider such other business as may come properly before the Annual Meeting or any adjournment thereof
 
 
 
Date of mailing:
This notice and Proxy Statement, voting instructions, and Adtalem Global Education Inc.’s 2018 Annual Report to Shareholders are being mailed to shareholders beginning on or about October 4, 2018.



Stephen W. Beard
Senior Vice President, General Counsel
   
October 4, 2018

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

VIA THE INTERNET
Visit the web site listed on your proxy card

BY MAIL
Sign, date and return your proxy card in the enclosed envelope

BY TELEPHONE
Call the telephone number on your proxy card

IN PERSON
Attend the Annual Meeting in Chicago, Illinois

Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to Be Held on November 6, 2018. Our Proxy Statement and the Adtalem Global Education Inc. Annual Report for 2018 are available online at www.proxyvote.com or at our investor relations website, http://investors.adtalem.com/.

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Proxies and Voting Information
PROXY STATEMENT

GENERAL INFORMATION

ANNUAL MEETING INFORMATION

We are providing this Proxy Statement to you in connection with the solicitation of proxies by the Board of Directors (the “Board”) of Adtalem Global Education Inc. (“Adtalem,” the “Company,” the “organization,” “we,” “our” or “us”) for the 2018 Annual Meeting of Shareholders and for any adjournment or postponement of the meeting (the “Annual Meeting”). We expect to begin mailing our proxy materials on or about October 4, 2018.

Time and Place: We are holding the Annual Meeting at 9:00 a.m. Central Standard Time on Tuesday, November 6, 2018, at Adtalem’s home office at 500 West Monroe Street, Chicago, Illinois 60661.

Attendance Requirements: You may attend the Annual Meeting and vote in person even if you have returned a proxy in writing, by telephone or through the Internet.

Street-Name Holders: If you hold shares in a bank or brokerage account (known as shares held in “street name”), you must obtain a valid “legal proxy,” executed in your favor from the holder of record, if you wish to vote these shares at the Annual Meeting.

Matters for Shareholder Voting

At this year’s Annual Meeting, we are asking our shareholders to vote on the following matters:

 
Proposal
Board Recommendation
Rationale for Board
Recommendation
1.
Election of Directors
   
Elect directors to serve until the 2019 Annual Meeting of Shareholders

• Diverse mix of backgrounds, current and former CEOs and a former finance executive at a leading global company
2.
Ratification of Auditor
   
Ratification of appointment of PwC as Adtalem’s independent registered public accounting firm for fiscal year 2019

• Independent with few ancillary services for Adtalem
• Extensive global expertise
3.
Say-on-Pay
   
Advisory vote to approve the compensation of Adtalem’s named executive officers

• Strong linkage of pay to both academic and financial performance
• Balanced compensation program aligning performance to interests of students and all stakeholders

How to View Proxy Materials Online

Our Proxy Statement and the Adtalem Global Education Inc. Annual Report for 2018 are available online at www.proxyvote.com or at our investor relations website, http://investors.adtalem.com/.

Delivery of Proxy Statement

Adtalem will bear the expense of soliciting proxies and will reimburse all shareholders for the expense of sending proxies and proxy material to beneficial owners, including expenditures for foreign mailings. The solicitation initially will be made by mail but also may be made by Adtalem employees by telephone, electronic means or personal contact.

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PROXY STATEMENT
Proxies and Voting Information

HOW TO VOTE

Please vote promptly. We encourage you to vote as soon as possible, even if you plan to attend the Annual Meeting in person. Your vote is important, and for all items other than ratification of our independent registered public accounting firm, your shares will not be voted by your bank or broker if you do not provide voting instructions. You may vote shares of Adtalem common stock (“Common Stock”) that you owned as of September 14, 2018, which is the record date for the Annual Meeting.

You may vote the following ways:

BY TELEPHONE
BY INTERNET
BY MAIL
IN PERSON
In the United States or Canada, you can vote your shares by calling 1-800-690-6903
You can vote your shares online at www.proxyvote.com
You can vote by mail by marking, dating and signing your proxy card or voting instruction form and returning it in the accompanying postage-paid envelope
Attend our Annual Meeting and cast your vote in person at Adtalem’s home office at 500 West Monroe Street, Chicago, Illinois 60661

For telephone and internet voting, you will need the 12-digit control number included on your proxy card or in the instructions that accompanied your proxy materials.

Telephone and internet voting are available through 11:59 p.m. Eastern Standard Time on Monday, November 5, 2018.

Revocation of Proxies

You can revoke your proxy at any time before your shares are voted at the Annual Meeting if you:

Submit a written revocation to our Secretary,
Submit a later-dated proxy or voting instruction form,
Provide subsequent telephone or Internet voting instructions, or
Vote in person at the Annual Meeting.

If you sign and return your proxy card or voting instruction form without any voting instructions with respect to a matter, your shares will be voted by the proxy committee appointed by the Board (and each of them, with full powers of substitution) in accordance with the Board’s recommendation.

Voting at the Annual Meeting

The way you vote your shares prior to the Annual Meeting will not limit your right to change your vote at the Annual Meeting if you attend in person and vote by ballot. If you hold shares in street name and you want to vote in person at the Annual Meeting, you must obtain a valid legal proxy from the record holder of your shares at the close of business on the record date indicating that you were a beneficial owner of shares, as well as the number of shares of which you were the beneficial owner, on the record date, and appointing you as the record holder’s proxy to vote these shares. You should contact your bank, broker or other intermediary for specific instructions on how to obtain a legal proxy.

Additional information regarding voting procedures and the Annual Meeting can be found under “Voting Instructions and Information” on page 76.

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Corporate Governance
PROXY STATEMENT

CORPORATE GOVERNANCE PRACTICES

KEY CORPORATE GOVERNANCE FACTS

 
 
 
Board Independence
8 out of 10 of our current directors are independent, including the chair of the Board (“Board Chair”)
Each of our five committees are composed entirely of independent directors
Our CEO is the only member of management who serves as a director
Board Diversity
3 out of our 8 independent directors, and 4 out of our 10 directors, are female
3 out of our 8 independent directors, and 4 out of our 10 directors, are persons of color
7 out of our 10 directors are active or former CEOs or the equivalent
3 out of our 10 directors have experience in the higher education sector
Shareholder Rights and Engagement
Our Board is fully declassified and all directors are elected annually
Our Board has an established policy, set forth in our Governance Principles, to call a special meeting of shareholders under certain circumstances if requested by shareholders owning for a period of one year or longer more than 25% of our outstanding shares
Each share of Common Stock is entitled to one vote
We do not have a shareholder rights plan
We conduct regular outreach and engagement with our shareholders and value their insight and feedback
Proxy Access: We have adopted proxy access, which allows any shareholder or group of up to 20 shareholders holding both investment and voting rights to at least 3% of Adtalem’s Common Stock for at least three years to nominate the greater of (i) two or (ii) 20% of Adtalem’s directors to be elected at an annual meeting of shareholders
Majority voting with plurality carve out: Our By-Laws provide that any uncontested question brought before any meeting of Adtalem’s shareholders (other than the election of directors) will be decided by the affirmative vote of a majority of the total number of votes of Adtalem’s capital stock represented. Contested matters brought before any meeting of Adtalem’s shareholders will be decided by a plurality of the votes of Adtalem’s capital stock represented
Independent Lead Director: Our Governance Principles require a Lead Independent Director to be appointed in the event that the Board Chair is not an independent director
Director resignation requirement: Our Governance Principles require a director whose principal job responsibility changes substantially during his or her tenure to tender his or her resignation, subject to acceptance by the Board
Outside board service limits: Our Governance Principles limit directors to service on only three other boards of publicly traded companies and limit members of Adtalem’s Audit and Finance Committee to service on two other audit committees of publicly traded companies
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PROXY STATEMENT
Corporate Governance

 
 
 
Board Committees
We have five Board committees – Academic Quality, Audit and Finance, Compensation, External Relations, and Nominating & Governance
The Chair of each committee, in consultation with the committee members, determines the frequency and length of the committee meetings
Our Board and each of its committees are authorized to retain independent advisors
Director Stock Ownership
60% of our non-employee directors’ annual compensation (excluding committee Chair fees) is in the form of restricted stock units (“RSUs”)
Our non-employee directors (other than those who are affiliated with our shareholders) are subject to a policy requiring their ownership of shares with a value equal to or in excess of three times their annual retainer
Continuous Improvement
New directors receive a tailored, two-day, live training program about Adtalem and its institutions from management
Our directors are encouraged to participate in director-oriented training programs
The Board annually undergoes a self-assessment process to critically evaluate its performance at a committee and Board level
Communication
Our Board promotes open and frank discussion with senior management
Our directors have access to all members of management

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Corporate Governance
PROXY STATEMENT

SUMMARY OF BOARD AND COMMITTEE STRUCTURE

Adtalem’s Board of Directors held 10 meetings during fiscal year 2018, consisting of 6 regular meetings and 4 special meetings. Currently, the Board has five standing committees: Academic Quality, Audit and Finance, Compensation, External Relations, and Nominating & Governance. The following table identifies each standing committee, its current members and current chairs, its key responsibilities and the number of meetings held during fiscal year 2018. Current copies of the charters of each of these committees, a current copy of Adtalem’s Governance Principles, and a current copy of Adtalem’s Code of Conduct and Ethics can be found on Adtalem’s website, www.adtalem.com, and are also available in print to any shareholder upon request from the Secretary of Adtalem, 500 West Monroe Street, Chicago, IL 60661. The Board has determined that each of the members of the Audit and Finance, Compensation, and Nominating & Governance committees is independent within the meaning of applicable laws and NYSE listing standards in effect at the time of determination.

 
Key Responsibilities
Meetings in
fiscal year
2018
Directors
Report
Adtalem Board of Directors
   •
Strategic oversight
10
Chair: James D. White
    •    8 of 10 directors are
          independent
n/a
   •
Corporate governance
   •
Leadership
   •
Risk oversight
   •
CEO succession planning
Academic Quality Committee
   •
Supports improvement in academic quality and assures that the academic perspective is heard and represented at the highest policy-setting level and incorporated in all of Adtalem’s activities and operations
3
Chair: Ann Weaver Hart
    •    Steven M. Altschuler, M.D.
    •    James D. White
    •    Rob Taylor
    •    Donna J. Hrinak
n/a
   •
Reviews the academic programs, policies and practices of Adtalem’s institutions
   •
Evaluates the academic quality and assessment process and evaluates curriculum and programs
Audit and Finance Committee
   •
Monitors Adtalem’s financial reporting processes, including its internal control systems and the scope, approach and results of audits
10
Chair: William W. Burke
    •    Steven M. Altschuler, M.D.
    •    Donna J. Hrinak
    •    Michael W. Malafronte
The Board has determined that Mr. Burke is qualified as an audit committee financial expert
Page 70
   •
Selects and evaluates Adtalem’s independent registered public accounting firm, subject to ratification by the shareholders
   •
Reviews and recommends to the Board Adtalem’s financing policies and actions related to investment, capital structure and financing strategies
Compensation Committee
   •
Oversees all compensation practices and reviews eligibility criteria and award guidelines for Adtalem’s compensation program
5
Chair: Michael W. Malafronte
    •    William W. Burke
    •    Lyle Logan
Page 51
   •
Assists the independent members of the Board in establishing the CEO’s annual goals, objectives and compensation
   •
Reviews and recommends to the Board compensation paid to non-employee directors
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PROXY STATEMENT
Corporate Governance

 
Key Responsibilities
Meetings in
fiscal year
2018
Directors
Report
External Relations Committee
   •
Provides awareness and oversight of Adtalem’s external relations strategy, policy and practice
4
Chair: Lyle Logan
   •   Ann Weaver Hart
   •   Georgette Kiser
   •   Ron Taylor
n/a
   •
Monitors, analyzes and effectively manages legislative and regulatory policy trends, issues and risks
   •
Develops recommendations to the Board with regard to formulating and adopting policies, programs and communications strategy related to legislative, regulatory and reputational risk
   •
Oversees risks and exposures related to higher education public policy, as well as compliance with laws, regulations applicable to Adtalem
Nominating & Governance Committee
   •
Reviews Board and committee structure and leads the Board self-evaluation process
5
Chair: James D. White
   •   Ann Weaver Hart
   •   Georgette Kiser
   •   Michael W. Malafronte
n/a
   •
Assesses Board needs and periodically conducts director searches and recruiting to ensure appropriate Board composition
   •
Recommends candidates for nomination as directors to the Board
   •
Oversees and conducts planning for CEO and director succession and potential related risks
   •
Recommends governance policies and procedures

INDEPENDENT BOARD CHAIR

Since 2004, the offices of Board Chair and CEO have been held by different individuals, with the Board Chair currently being Mr. White, an independent director. The Board believes that the existing leadership structure currently serves Adtalem and its shareholders well. The Board has no specific policy with respect to the separation of the positions of Board Chair and CEO. However, in order to ensure continued Board independence, the Board has adopted a policy that, in the event the Board Chair and CEO roles are combined, or the Board Chair is not otherwise independent, the Board shall appoint a Lead Independent Director. The Board believes that this issue should be part of the succession planning process and that it is in the best interests of Adtalem and its shareholders for the Board to make a determination regarding this issue when it annually elects the Board Chair. During fiscal year 2018, the Board met in executive session without employee directors or other employees present at each regular Board meeting. Adtalem’s Board Chair presided over these sessions as the non-executive Board Chair.

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Corporate Governance
PROXY STATEMENT

DIRECTOR ATTENDANCE

Attendance at Board Meetings

During fiscal year 2018, our Board met 10 times. Each of Adtalem’s directors attended at least 75% of the meetings of the Board and Board committees on which they served that occurred during their respective time of service on the Board in fiscal year 2018.

Attendance at Annual Meetings

All of our directors who were directors at the time were present at the 2017 Annual Meeting of Shareholders, held in November 2017. Our Board encourages all of its members to attend the Annual Meetings but understands there may be situations that prevent such attendance.

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PROXY STATEMENT
Corporate Governance

SUMMARY INFORMATION ABOUT OUR DIRECTORS

Name and
Principal Occupation
Age
Director
Since
Independent
Committee Memberships
Other Public
Company Boards
AUD
ACA
COM
ER
NG
Steven M. Altschuler, M.D.(1)
Managing Director, Healthcare
Ventures, at Ziff Capital Partners
 
64
 
 
2018
 
 
x
 
 
x
 
 
x
 
 
 
 
 
 
 
 
 
 
 
2
 
William W. Burke
President and Founder,
Austin Highlands Advisors, LLC
 
59
 
 
2017
 
 
x
 
 
c
 
 
 
 
 
x
 
 
 
 
 
 
 
 
2
 
Ann Weaver Hart
President Emerita,
University of Arizona
 
69
 
 
2016
 
 
x
 
 
 
 
 
c
 
 
 
 
 
x
 
 
x
 
 
 
 
Donna J. Hrinak(2)
Corporate Vice President,
The Boeing Company
President,
Boeing Latin America
 
67
 
 
2018
 
 
x
 
 
x
 
 
x
 
 
 
 
 
 
 
 
 
 
 
 
 
Georgette Kiser(1)
Managing Director and Chief
Information Officer, The Carlyle Group
 
50
 
 
2018
 
 
x
 
 
 
 
 
 
 
 
 
 
 
x
 
 
x
 
 
 
 
Lyle Logan
Executive Vice President
and Managing Director,
Northern Trust Corporation
 
59
 
 
2007
 
 
x
 
 
 
 
 
 
 
 
x
 
 
c
 
 
 
 
 
1
 
Michael W. Malafronte
Managing Partner, International Value
Advisers, LLC,
and President, IVA Funds
 
44
 
 
2016
 
 
x
 
 
x
 
 
 
 
 
c
 
 
 
 
 
x
 
 
1
 
Ronald L. Taylor
Senior Advisor,
Former CEO,
Adtalem Global Education
 
74
 
 
1987
 
 
 
 
 
 
 
 
x
 
 
 
 
 
x
 
 
 
 
 
 
 
Lisa W. Wardell
President and CEO,
Adtalem Global Education
 
49
 
 
2008
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1
 
James D. White (Chair)
Retired Board Chair, CEO and President
Jamba, Inc.
 
57
 
 
2015
 
 
x
 
 
 
 
 
x
 
 
 
 
 
 
 
 
c
 
 
1
 
AUD
Audit and Finance Committee
COM
Compensation Committee
ACA
Academic Quality Committee
ER
External Relations Committee
NG
Nominating & Governance Committee
c
Committee Chair
X
Committee Member
 
 
(1) Appointed to the Board, effective May 9, 2018. Dr. Altschuler was appointed to the Academic Quality Committee and the Audit and Finance Committee. Ms. Kiser was appointed to the External Relations Committee and the Nominating & Governance Committee.
(2) Appointed to the Board, effective October 3, 2018. Ms. Hrinak was appointed to the Academic Quality Committee and the Audit and Finance Committee.
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Proposal No. 1 — Election of Directors
PROXY STATEMENT

PROPOSAL NO. 1 — ELECTION OF DIRECTORS

The current size of the Board is ten directors, however, the Board determined to decrease the size of the Board to nine directors in connection with the election of directors at the 2018 Annual Meeting. The Board has nominated nine of Adtalem’s ten sitting directors and recommends their re-election, each for a term to expire in 2019. All of the nominees have consented to serve as directors if elected at the Annual Meeting.

It is intended that all shares represented by a proxy in the accompanying form will be voted for the election of each of Steven M. Altschuler, M.D., William W. Burke, Ann Weaver Hart, Donna J. Hrinak, Georgette Kiser, Lyle Logan, Michael W. Malafronte, Lisa W. Wardell and James D. White as directors unless otherwise specified in such proxy. A proxy cannot be voted for more than nine persons. In the event that a nominee becomes unable to serve as a director, the proxy committee will vote for the substitute nominee that the Board designates. The Board has no reason to believe that the nominees will become unavailable for election.

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

APPROVAL BY SHAREHOLDERS

The election of each of the nine nominees for director listed below requires the affirmative vote of a majority of the shares of Common Stock of Adtalem represented at the Annual Meeting. Adtalem maintains a majority voting standard for uncontested elections, so for a nominee to be elected as a member of the Board, the nominee must receive more FOR votes than the aggregate WITHHOLD votes, abstentions and broker non-votes. Shareholders may not cumulate their votes in the election of directors. If a nominee for re-election fails to receive the requisite majority vote where the election is uncontested, such director must promptly tender his or her resignation to Adtalem’s CEO or the Secretary, subject to acceptance by the Board.

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

   
 
Election of Directors

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

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PROXY STATEMENT
Proposal No. 1 — Election of Directors

Nominees

Steven M. Altschuler, M.D.
Dr. Altschuler has been a director of Adtalem since May 2018. Dr. Altschuler currently serves as Managing Director-Healthcare Ventures at Ziff Capital Partners. Dr. Altschuler is the former Executive Vice President for Health Affairs at the University of Miami and Chief Executive Officer of UHealth – the University of Miami Health System. At the University of Miami he led the transformation of the UHealth clinical delivery system into a CMS, Perspective Payment System (“PPS”) exempt unified academic medical center under a single state license. He also led the transformation of the academic enterprise to create new patient oriented Translational Institutes and a new research model based around Core Science Institutes.
   
Previously, Dr. Altschuler served as CEO for The Children’s Hospital of Philadelphia (“CHOP”) from 2000 to 2015. He led CHOP’s transformation from a traditional academic medical center and specialty hospital to a world leader in pediatric health care, research, education and advocacy for children. Under his leadership, CHOP experienced the largest growth since its founding in 1855, building a care network that provides primary, specialty and urgent care at more than 50 locations in the greater Philadelphia area. He retired from CHOP in 2015 and currently serves as Board Chair of Spark Therapeutics, a leading gene therapy company created to develop and commercialize the preclinical and clinical programs advanced at CHOP and other institutions. He is currently a director on the Board of Weight Watchers International, Inc., where he sits on the audit committee and the compensation and benefits committee. He is also on the Board of Spark Therapeutics, Inc. and is on the audit and compliance committee and the compensation committee.
   
Dr. Altschuler completed a pediatric internship and residency at Children’s Hospital Medical Center in Boston and completed a fellowship in gastroenterology and nutrition at CHOP. He also served as a faculty member and Chair of the Department of Pediatrics at the Perelman School of Medicine at the University of Pennsylvania prior to becoming CEO of CHOP.
   
Dr. Altschuler received his MD and BA in Mathematics from Case Western Reserve University.

Relevant Experience

•   
Mr. Altschuler’s comprehensive, first-hand knowledge of technology, business and medical education matters at the senior strategic level adds valuable experience to the Board.
Managing Director,
Healthcare
Ventures Ziff Capital Partners
Age: 64
Director since 2018
Committees:
Academic Quality
Audit and Finance
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Proposal No. 1 — Election of Directors
PROXY STATEMENT

William W. Burke
Mr. Burke has been a director of Adtalem since January 2017. Since November 2015, Mr. Burke has served as President of Austin Highlands Advisors, LLC, a provider of corporate advisory services. He served as Executive Vice President & Chief Financial Officer of IDEV Technologies, a peripheral vascular devices company, from November 2009 until the company was acquired by Abbott Laboratories in August 2013. From August 2004 to December 2007, he served as Executive Vice President & Chief Financial Officer of ReAble Therapeutics, a diversified orthopedic device company which was sold to The Blackstone Group in a going private transaction in 2006 and subsequently merged with DJO Incorporated in November 2007. Mr. Burke remained with ReAble until June 2008. From 2001 to 2004, he served as Chief Financial Officer of Cholestech Corporation, a medical diagnostic products company. Mr. Burke has served on the Board of numerous public and private company boards and currently serves on the Board of Invuity, Inc., Tactile Systems Technology, Inc., and Myocardial Solutions, Inc. He previously served on the Board of LDR Holding Corporation (acquired by Zimmer Biomet in July 2016) and Medical Action Industries (acquired by Owens & Minor in October 2014). Mr. Burke received his BBA in Finance from The University of Texas at Austin and an MBA from The Wharton School of the University of Pennsylvania.

Relevant Experience

•   
Mr. Burke’s experience as a senior executive and board member of multiple public companies, and his extensive understanding of financing, acquisition and operating strategy, enhances the Board’s capabilities from both a strategic and governance perspective.
President
Austin Highlands Advisors, LLC
Age: 59
Director since 2017
Committees:
Audit and Finance (Chair)
Compensation
 
   
 
ANN WEAVER HART
Dr. Hart has been a director of Adtalem since February 2016. Dr. Hart served as President of the University of Arizona from July 2012 until her retirement from higher education administration in June 2017. Dr. Hart continues to teach as professor of educational policy studies & practice in the College of Education, a post she also held during her presidency at the University of Arizona. During her tenure as President at the University of Arizona, Dr. Hart successfully led efforts to create and implement a fully integrated strategic academic and business plan to sustain the University of Arizona’s world-class education, research, and impact. Prior to her service at the University of Arizona, Dr. Hart was President of Temple University from July 2006 to July 2012, President of the University of New Hampshire from 2002 to 2006 and provost and vice president for academic affairs at Claremont Graduate University in Claremont, California from 1998 to 2002. Prior to her university-wide service, Dr. Hart served as professor of educational leadership, dean of the Graduate School and special assistant to the president at the University of Utah. In addition to her role at the University of Arizona, Dr. Hart is a member of the Association of American Universities, the Association of Public and Land-Grant Universities, the Association of College and University Educators (ACUE) Board of Advisors, and she is an advisor for the Lincoln Project: Excellence and Access in Public Higher Education at the American Academy of Arts and Sciences. Dr. Hart has received numerous professional and community service awards for her work, including the Michael P. Malone International Leadership Award from the Association of Public and Land-Grant Universities; the Girl Scouts of the USA Take the Lead Award; the Jack Culbertson Award in Educational Administration from the University Council for Educational Administration; and the PoWer Award from the Professional Women’s Roundtable. Dr. Hart holds a BS and MS in History and a Ph.D in Educational Administration, all from the University of Utah.

Relevant Experience

•   
Dr. Hart’s experience as a successful president of and dean at several leading universities, deep experience as a teacher and scholar recognized internationally for research on leadership succession, organizational behavior, and work redesign in educational organizations, bring a strong and knowledgeable academic, operational, and strategic perspective to the Board deliberations.
President Emerita
University of Arizona
Age: 69
Director since 2016
Committee:
Academic Quality (Chair)
External Relations
Nominating & Governance
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Donna j. hrinak
Ms. Hrinak has been a director of Adtalem since October 2018. Ms. Hrinak currently serves as Corporate Vice President of The Boeing Company and President of Boeing Latin America. As President of Boeing Latin America, Ms. Hrinak opened Boeing’s first three offices in the region and oversees all aspects of operations, from commercial and defense product sales to research and technology. Her achievements include directing the campaign which led to Boeing’s first sale to the Brazilian Air Force in over 80 years. Ms. Hrinak came to The Boeing Company from the food and beverage industry. She worked as Vice President for Public Policy at PepsiCo, where she designed and led a strategy to confront an increasingly complicated global regulatory environment, while preserving the company’s competitive advantage in health and wellness. At Kraft Foods, she managed the Latin American and European Corporate Affairs teams, overseeing government relations and public affairs, corporate social responsibility, and communications and issues management, including all internal and external initiatives for a major business reorganization, One Europe for Growth.
   
Ms. Hrinak has also advised senior executives on operating in complex global markets. As Senior Counselor for Trade and Competition at the law firm of Steel Hector & Davis, she designed and implemented international business strategies in sectors such as energy, media, insurance and telecommunications, developing opportunities and evaluating political and economic risks. At the strategic advisory firm of Kissinger McLarty Associates, she guided clients in international transactions, including mergers and acquisitions, joint ventures and divestitures. She has also championed links between trade and competition issues and shaped government decisions for clients in the United States and around the world.
   
Before entering the private sector, Ms. Hrinak was a career officer in the U.S. Foreign Service, whose assignments in Latin America and Eastern Europe included serving as U.S. Ambassador in Brazil, Venezuela, Bolivia and the Dominican Republic as well as Deputy Assistant Secretary in the State Department. As Embassy CEO, she led multinational and multi-agency teams in promoting U.S. interests in the host country, including protecting U.S. citizens and advocating for business.
   
She is a graduate of Michigan State University and also attended The George Washington University and the University of Notre Dame School of Law.

Relevant Experience

•   
Ms. Hrinak’s extensive experience at the senior level in both the public and private sector overseeing complex multi-cultural organizations brings insight to the Board directly Ms. Hrinak’s extensive experience at the senior level in both the public and private sector
Corporate Vice President, The
Boeing Company
President, Boeing Latin America
Age: 67
Director since 2018
Committees:
Academic Quality
Audit and Finance
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GEORGETTE KISER
Ms. Kiser has been a director of Adtalem since May 2018. She is currently the Managing Director and Chief Information Officer of The Carlyle Group. Prior to her role at The Carlyle Group, she was in various executive roles at T. Rowe Price from 1996 to 2015, including Vice President and Head of Enterprise Solutions and Capabilities. She was a Senior Systems Analyst at United States Fidelity and Growth (USF&G) Insurance Information Systems from 1995 to 1996. She was a consultant and Software Engineer at Martin Marietta Management Data Systems from 1993 to 1995, and a Software Design Engineer in the Aerospace Division of the General Electric Company from 1989 to 1993. She received a bachelor’s degree in mathematics with a concentration in computer science from the University of Maryland, a M.S. in mathematics from Villanova University, and an MBA from the University of Baltimore.

Relevant Experience

•   
Ms. Kiser’s experience in information technology at the senior leadership level in organizations with an international reach brings expertise to Adtalem which will enhance both the Board’s oversight of the technology and business vertical as well as Adtalem’s
Managing Director and Chief
Information Officer
The Carlyle Group
Age: 50
Director since 2018
Committees:
External Relations
Nominating & Governance
   
 
Lyle Logan
Mr. Logan has been a director of Adtalem since November 2007. Mr. Logan has been Executive Vice President and Managing Director, Global Financial Institutions Group of The Northern Trust Company since 2009. He previously served as Senior Vice President and Head of Chicago Private Banking within the Personal Financial Services business unit of Northern Trust from 2000 to 2005. Prior to 2000, he was Senior Vice President in the Private Bank and Domestic Portfolio Management Group at Bank of America. Mr. Logan received his undergraduate degree in accounting and economics from Florida A&M University and his master’s degree in finance from the University of Chicago Graduate School of Business. Mr. Logan currently serves as a director of Heidrick & Struggles International Inc.

Relevant Experience

•   
Mr. Logan’s experience in senior leadership positions with leading banking and investment management organizations adds perspective and an understanding of global investment markets to the Board’s consideration of finance and investment management matters.
Executive Vice
President and
Managing Director,
Northern Trust Corporation
Age: 59
Director since 2007
Committee:
External Relations (Chair)
Compensation
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Proposal No. 1 — Election of Directors

MICHAEL W. MALAFRONTE
Mr. Malafronte has been a director of Adtalem since June 2016. Mr. Malafronte is a founding partner of International Value Advisers, LLC (“IVA”) and serves as managing partner. He is responsible for overseeing all aspects of IVA, including company strategy and managing resources. Most recently, Mr. Malafronte was a senior vice president at Arnhold and S. Bleichroeder Advisers, LLC where he worked for two years as a senior analyst for the First Eagle Funds, owned by Arnhold & S. Bleichroeder Advisers, LLC. There he worked under Charles de Vaulx and Jean-Marie Eveillard within the Global Value Group for the value funds, including the First Eagle Overseas, Global, U.S. Value Funds as well as the offshore funds, inclusive of the Sofire Fund Ltd. Similarly, he was responsible for covering the oil and gas, media, real estate, financial services and retail industries on a global basis, as well as companies within the United Kingdom, Germany, and Japan. Moreover, Mr. Malafronte was responsible for covering the larger names within the portfolio such as Pargesa Holdings, ConocoPhillips, Petroleo Brasileiro (Petrobras), SK Corp., News Corp., Dow Jones and Comcast.
   
Prior to the First Eagle Funds, Mr. Malafronte worked for nine years as a portfolio manager at Oppenheimer & Close, a dually-registered broker dealer and investment adviser; an adviser on three domestic hedge funds, one offshore partnership and a registered investment adviser and broker dealer. While at Oppenheimer & Close, Mr. Malafronte assisted in the launch of a domestic hedge fund in 1996 and an offshore partnership in 1998. Mr. Malafronte was responsible for all facets of portfolio management for the investment partnerships, including idea generation, in-depth research and stock selection. In addition to that, he was also responsible for hiring and training both operations staff and research analysts.
   
Mr. Malafronte has also served on the Board of two publicly traded companies: Bresler & Reiner Inc. and Century Realty Trust. At Bresler & Reiner, Mr. Malafronte was a member of the Audit Committee and Chair of the Compensation Committee. At Century Realty, Mr. Malafronte was a member of the Audit Committee. Mr. Malafronte currently serves as a director of IVA Fiduciary Trust. Mr. Malafronte earned a B.S. in finance and investments from Babson College.

Relevant Experience

•   
Mr. Malafronte’s experience as a financial analyst covering institutions globally, and as a founder of a global investment firm, provides the Board a firm understanding of Adtalem’s shareholders and deeply informs Adtalem’s financial planning.
Managing Partner,
International Value Advisers
Age: 44
Director since 2016
Committees:
Compensation (Chair)
Audit and Finance
Nominating & Governance
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LISA W. WARDELL
Ms. Wardell has been a director of Adtalem since November 2008 and was appointed as the President and CEO of Adtalem on May 24, 2016. Ms. Wardell was previously the Executive Vice President and Chief Operating Officer of The RLJ Companies (“RLJ”), a diversified holding company with portfolio companies in the financial services, asset management, real estate, hospitality, media and entertainment, and gaming industries since 2004. In her role at RLJ, Ms. Wardell closed $40 million in automotive dealership acquisitions and served as the Executive Vice President of RML Automotive, the 19th largest automotive dealership group in the U.S., and served on the Board of Naylor, Inc., an RLJ Equity Partners’ portfolio company. In addition, Ms. Wardell served as the primary RLJ fundraiser for a $610 million money management fund and managed a hotel development project in West Africa. In 2010, Ms. Wardell served as the Chief Financial Officer of a special purpose acquisition company that formed RLJ Entertainment, Inc., where she subsequently served as a director. Prior to joining RLJ, Ms. Wardell was a Principal at Katalyst Venture Partners, a private equity firm that invested in start-up technology companies in the media and communications industries from 1999 to 2003. From 1998 to 1999, Ms. Wardell worked as a senior consultant for Accenture, a global management consulting, technology services and outsourcing company. From 1994 to 1996, Ms. Wardell was an attorney with the Federal Communications Commission where she worked in the commercial wireless division. Ms. Wardell received her undergraduate degree in political science and African studies from Vassar College, her J.D. degree from Stanford University, and her master’s degree in finance and entrepreneurial management from the Wharton School of Business at the University of Pennsylvania. In addition to her work at Adtalem, Ms. Wardell serves on the Board for Lowe’s Home Improvement, a Fortune 50 company, THINK450, the innovation engine of the National Basketball Players Association, supporting NBA players and their development away from the game, and McLarty Capital Partners, a $225 million small business fund and is a member of the executive network of RLJ Equity Partners, a middle market private equity fund. She is also a member of The Business Council, the Executive Leadership Council, CEO Action for Diversity and Inclusion and the Fortune CEO Initiative. Among numerous recognitions, she was recently selected by Black Enterprise magazine as one of the “300 Most Powerful Executives in Corporate America” (2017) and has been featured on Savoy Magazine’sTM Power 300: Most Influential Black Corporate Directors list (2017 and 2016). Ms. Wardell is often featured for her strategic insights by media outlets, including Bloomberg, Fortune, Politico, Investor’s Business Daily, Inside Higher Ed and the Chronicle of Higher Education, among others.

Relevant Experience

•   
Ms. Wardell’s role as CEO of Adtalem, which gives her deep and current knowledge of Adtalem’s academic and business operations and strategy, makes her an essential member of the Board. Additionally, her experience as a senior business executive in private equity, operations and strategy and financial analysis, including mergers and acquisitions, together with her previous experience with a federal regulatory agency, give her important perspectives on the issues that come before the Board. These include business, strategic, financial and regulatory matters.
President and CEO
Adtalem Global Education
Age: 49
Director since 2008
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Proposal No. 1 — Election of Directors

JAMES D. WHITE
Mr. White has been a director of Adtalem since June 2015. In 2016, he retired from his role as Board Chair, President and CEO of Jamba, Inc., where he successfully led the company turnaround and the transformation of Jamba Juice from a made-to-order smoothie shop to a healthy active lifestyle brand with over 850 retail locations globally. Mr. White served as Board Chair of Jamba, Inc. from December 2008 until January 2016. Prior to Jamba, Inc. Mr. White served as Senior Vice President of Consumer Brands at Safeway, Inc. from 2005 to 2008. Prior to Safeway, Mr. White served as Senior Vice President of Business Development, North America at the Gillette Company from 2002 to 2005. He also served in executive positions at Nestle Purina from 1987 to 2005, including Vice President, Customer Interface Group from 1999 to 2002. Mr. White began his career at the Coca-Cola Company. He was a Director of Daymon Worldwide, Inc. from February 2010 until March 2017 and was appointed as Board Chair in 2016. He served on the Board of Panera Bread from January 2016 until July 2017 and is currently serving on the Board of Jamba LLC since December 2017. Mr. White also served on the Board of CallidusCloud from 2016 to 2018, and on the Board of Hillshire Brands Company and Keane Inc. Mr. White received his MBA from Fontbonne University and holds a Bachelor’s of Science Degree from the University of Missouri, Columbia and is currently a 2018 Fellow in Stanford’s Distinguished Careers Institute.

Relevant Experience

•   
Mr. White brings to the Board a background in marketing and strategic planning, gained in senior business leadership roles with Jamba, Inc., Safeway, Inc. and The Gillette Company, Inc. His global leadership experience also adds important perspectives to matters that come before the Board.
Retired Chairman, CEO and President,
Jamba, Inc.
Age: 57
Director since 2015
Committees:
Academic Quality
Nominating & Governance (Chair)

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DIRECTOR INDEPENDENCE

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

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

As a result of this review, the Board affirmatively determined that, with the exception of Mr. Taylor and Ms. Wardell, all of Adtalem’s current directors, and all of Adtalem’s former directors who served as a director during fiscal year 2018, are “independent” of Adtalem and its management within the meaning of the applicable NYSE rules. Mr. Taylor was considered an inside director because of his status as a Senior Advisor to Adtalem. Ms. Wardell is considered an inside director because of her employment as President and CEO of Adtalem.

The Board considered the relationship between Adtalem and Northern Trust Corporation, at a subsidiary of which Adtalem maintains depository accounts and through which a significant portion of Adtalem’s disbursement activity is conducted, because Mr. Logan is Executive Vice President and Managing Director, Global Financial Institutions Group, with Northern Trust Global Investments, a business unit of Northern Trust Corporation. In fiscal year 2018, Adtalem incurred approximately $350,000 in fees to Northern Trust Corporation, which were partially offset against compensating balance credits earned on an average monthly outstanding balance of approximately $29.1 million. The Board concluded, after considering (i) that the relationship with Northern Trust Corporation predates Mr. Logan joining the Board, (ii) that Mr. Logan has had no involvement in the Adtalem banking transactions, and (iii) the lack of materiality of the transactions to Adtalem and to Northern Trust Corporation, and (iv) the fact that the terms of the transactions are not preferential either to Adtalem or to Northern Trust Corporation, that the relationship is not a material one for purposes of the NYSE listing standards and would not influence Mr. Logan’s actions or decisions as a director of Adtalem.

DIRECTOR CONTINUING EDUCATION

Members of the Board are encouraged to participate in continuing education and enrichment classes and seminars. During fiscal year 2018, the following directors attended the following classes and seminars: (i) Mr. White attended the Stanford Directors College, (ii) Mr. Malafronte attended the National Association of Corporate Directors (“NACD”) seminar on Tax Reform, Pay Ratio and ISS: Compensation Committee’s 2018 Checklist, (iii) Ms. Weaver Hart attended the NACD Master Class and the NACD Future Trends seminar and qualified as a NACD Board Leadership Fellow, and (iv) Mr. Burke attended various NACD seminars, maintained his status as a NACD Leadership fellow in fiscal 2018 and obtained a Certificate in Cybersecurity Oversight from the Software Engineering Institute of Carnegie Mellon University.

DIRECTOR APPOINTMENT ARRANGEMENTS

On June 30, 2016, Adtalem entered into a Support Agreement (the “Support Agreement”) with each of the members of International Value Advisers, LLC (collectively, “IVA”) and Michael W. Malafronte, in his individual capacity and as a member of IVA, pursuant to which Adtalem increased the size of the Board by one director and appointed Mr. Malafronte to the newly-created vacancy. The Support Agreement also includes, among other provisions, certain standstill and voting commitments by IVA. The standstill period shall extend until such time as Mr. Malafronte, or any replacement of Mr. Malafronte designated by IVA pursuant to the Support Agreement, is no longer a member of the Board. Pursuant to the Support Agreement, Mr. Malafronte must resign from the Board if (i) he agrees to be included as a director nominee for election at any meeting of Adtalem shareholders other than as a director nominated by the Board for election at such meeting, (ii) IVA and its affiliated entities cease collectively to beneficially own or have other ownership interest in an aggregate net long position of at least 10% of the outstanding shares of Adtalem’s Common Stock (the “10% Ownership Requirement”) or (iii) either of IVA or Mr. Malafronte materially breaches any obligation under the Support Agreement and fails to cure such breach. On October 3, 2017, Adtalem entered into a letter agreement with IVA and Mr. Malafronte

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relating to the Support Agreement (the “Letter Agreement”). Pursuant to the Letter Agreement, Adtalem agreed that Mr. Malafronte may remain a member of the Board for the duration of his term ending at the 2017 Annual Meeting, notwithstanding the fact that IVA no longer meets the 10% Ownership Requirement. Due to Mr. Malafronte’s professional experience and the contributions he had made to the Board, the Board nominated him for re-election for the term ending at the 2018 Annual Meeting and has nominated for re-election for the term ending at the 2019 Annual Meeting and, in so doing, in each case, extended the Letter Agreement.

CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS

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

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

BOARD OF DIRECTORS’ ROLE IN RISK OVERSIGHT

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

Board/Committee
Primary Areas of Risk Oversight
Full Board
    •
Reputation
    •
Legal and regulatory compliance and ethical business practices
    •
Strategic planning
    •
Major organizational actions
    •
Education public policy
Academic Quality Committee
    •
Academic quality
    •
Accreditation
    •
Curriculum development and delivery
    •
Student persistence
    •
Student outcomes
Audit and Finance Committee
    •
Accounting and disclosure practices
    •
Information technology
    •
Cybersecurity
    •
Financial controls
    •
Risk management policies and procedures
    •
Legal and regulatory compliance, including compliance and ethics program
    •
Capital structure
    •
Investments
    •
Foreign exchange
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Board/Committee
Primary Areas of Risk Oversight
Compensation Committee
    •
Compensation program
    •
Talent development
    •
Management succession planning
External Relations Committee
    •
Higher education public policy
    •
Compliance with laws and regulations applicable to Adtalem
Nominating & Governance Committee
    •
Corporate and institutional governance structures and processes
    •
Board composition and function
    •
Board Chair and CEO succession

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COMMUNICATIONS WITH DIRECTORS

Shareholders and other interested parties wishing to communicate with the Board or any member or committee of the Board are encouraged to send any communication to: Secretary, Adtalem Global Education, 500 West Monroe Street, Chicago, IL 60661 and should prominently indicate on the outside of the envelope that it is intended for the Board, the independent directors as a group, or a committee or an individual member of the Board. Any such communication must be in writing, must set forth the name and address of the shareholder (and the name and address of the beneficial owner, if different), and must state the form of stock ownership and the number of shares beneficially owned by the shareholder making the communication. Adtalem’s Secretary will compile and promptly forward all such communications to the Board.

Communicating Accounting Complaints

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

General Counsel
Adtalem Global Education
500 West Monroe Street
Chicago, IL 60661

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

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

2018 DIRECTOR COMPENSATION

In fiscal year 2018, non-employee directors, received an annual retainer of $75,000, which was increased to $85,000 starting in the fourth quarter of fiscal year 2018, paid quarterly. The Board Chair received an additional annual retainer of $120,000, the Chair of the Audit and Finance Committee received an additional annual retainer of $22,500, the Chair of the Compensation Committee was entitled to receive an additional retainer of $17,500, and the chairs of each of the other committees received an additional annual retainer of $10,000 for their roles as committee chairs. Directors were reimbursed for any reasonable and appropriate expenditures attendant to Board membership. Mr. Malafronte, who was originally appointed to the Board in 2016 pursuant to a Support Agreement, has declined all compensation for his service.

Under the Adtalem Nonqualified Deferred Compensation Plan, a director could elect to defer all or a portion of the cash retainer. Any amount so deferred is, at the director’s election, valued as if invested in various investment choices made available by the Compensation Committee for this purpose, and is payable in cash installments, or as a lump-sum on or after termination of service as a director, or at a later date specified by the director. With the exception of Ms. Boden Holland, no directors deferred any portion of their compensation in fiscal year 2018.

As long-term incentive compensation for directors, each non-employee director received RSUs with an approximate value of $125,000 directly following the 2017 Annual Meeting of Shareholders. Each RSU represents the right to receive one share of Common Stock following the satisfaction of the vesting period. All RSUs granted in November 2017 vests upon the one-year anniversary of the grant date.

In May 2018, the Compensation Committee’s independent consultant, FW Cook, conducted a comprehensive review of our non-employee director compensation program, including competitive comparisons against the same peer group of

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companies used in executive compensation comparisons (see page 26). FW Cook found that our non-employee director compensation program provided compensation approximating the median of our peers, with a program design and structure consistent with recognized “best practice.” To maintain competitiveness with anticipated market increases in director compensation, FW Cook recommended, and the Compensation Committee approved, an increase to the annual cash retainer from $75,000 to $85,000, effective in the fourth quarter of fiscal year 2018. No changes were made to the annual equity retainer, additional retainers for committee chairs or our Board Chair.

This table discloses all director compensation provided in fiscal year 2018 to the directors of Adtalem for their service as directors (other than Ms. Wardell who received no compensation for her service as a director; however, her compensation as President and CEO is set forth in the Summary Compensation Table).

Name
Fees Earned or
Paid in Cash
($)(1)
Stock
Awards
($)(2)
Total
($)
Steven M. Altschuler, M.D.(3)
 
21,250
 
 
 
 
21,250
 
Christopher B. Begley(4)
 
48,750
 
 
 
 
48,750
 
William W. Burke(5)
 
120,000
 
 
125,070
 
 
245,070
 
Ann Weaver Hart
 
85,000
 
 
125,070
 
 
210,070
 
Kathy Boden Holland(6),(7)
 
63,352
 
 
125,070
 
 
188,422
 
Georgette Kiser(3)
 
21,250
 
 
 
 
21,250
 
Lyle Logan(10)
 
100,500
 
 
125,070
 
 
225,570
 
Michael W. Malafronte
 
 
 
 
 
 
Fernando Ruiz(4),(8)
 
28,125
 
 
 
 
28,125
 
Ronald L. Taylor(9)
 
122,250
 
 
125,070
 
 
247,320
 
James D. White
 
177,500
 
 
125,070
 
 
302,570
 
(1) Includes all retainer fees paid or deferred pursuant to the Adtalem Nonqualified Deferred Compensation Plan.
(2) The amounts reported in the Stock Awards column represent the grant date fair value of 3,300 RSUs granted on November 8, 2017 to each of the directors named above, computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718. Also see “Note 5: Stock-Based Compensation” to Adtalem’s consolidated financial statements set forth in the Form 10-K for fiscal year 2018, filed with the SEC on August 24, 2018, for the assumptions made in determining the valuations of these awards. The number of RSUs granted to each of the directors named above was determined by dividing $125,000 by $37.90, which represents the fair market value of a share of Common Stock on the November 8, 2017 award date, and rounding to the nearest 10 shares.
(3) Dr. Altschuler and Ms. Kiser were appointed to the Board effective May 9, 2018.
(4) Each of Mr. Begley and Mr. Ruiz chose not to stand for re-election at the 2017 Annual Meeting of Shareholders.
(5) This amount includes $20,000 in cash Mr. Burke received as compensation for his services as a member of the board of trustees of an Adtalem institution.
(6) The Board appointed Ms. Boden Holland, effective May 9, 2018, as Group President of Adtalem’s Medical and Healthcare segment, and in connection with her appointment as an Adtalem officer, Ms. Boden Holland resigned from the Board, effective May 8, 2018.
(7) Ms. Boden Holland elected to defer 100% of her director fees for fiscal year 2018 into the Adtalem Nonqualified Deferred Compensation Plan.
(8) This amount includes $5,000 in cash Mr. Ruiz received as compensation for his services as a member of the board of trustees of an Adtalem institution.
(9) This amount includes $42,250 in cash Mr. Taylor received as compensation for his services as a member of the board of trustees of an Adtalem institution.
(10) This amount includes $18,000 in cash Mr. Logan received as compensation for his services as a member of the board of trustees of an Adtalem Global Education institution.
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PROXY STATEMENT
Proposal No. 1 — Election of Directors

This table discloses the aggregate number of option and RSUs outstanding at June 30, 2018 for each non-employee director. These figures include stock option awards made prior to August 2009 when the Board discontinued its practice of granting stock options to directors in favor of RSU awards upon their election or re-election to the Board.

Name
Options
Outstanding
(#)
RSUs
Outstanding
(#)
Steven M. Altschuler, M.D.
 
 
 
 
Christopher B. Begley(1)
 
 
 
 
William Burke
 
 
 
3,300
 
Ann Weaver Hart
 
 
 
3,300
 
Kathy Boden Holland(2)
 
 
 
3,300
 
Georgette Kiser
 
 
 
 
Lyle Logan
 
 
 
3,300
 
Michael W. Malafronte
 
 
 
 
Fernando Ruiz(1)
 
3,500
 
 
 
Ronald L. Taylor
 
 
 
3,300
 
James D. White
 
 
 
3,300
 
(1) Each of Mr. Begley and Mr. Ruiz chose not to stand for re-election at the 2017 Annual Meeting of Shareholders.
(2) Includes RSUs granted to Ms. Boden Holland for her prior service as a non-employee director.
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STOCK OWNERSHIP
PROXY STATEMENT

STOCK OWNERSHIP

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

The table below sets forth the number and percentage of outstanding shares of Common Stock beneficially owned by each person known by Adtalem to own beneficially more than 5% of our Common Stock, in each case as of August 16, 2018, except as otherwise noted.

Name
Amount and Nature of
Beneficial Ownership
Percentage
Ownership
BlackRock, Inc.
 
6,341,422(1
)
 
10.6
%
Dimensional Fund Advisors LP
 
5,191,413(2
)
 
8.7
%
The Vanguard Group.
 
4,677,529(3
)
 
7.8
%
William Blair Investment Management, LLC
 
4,088,825(4
)
 
6.8
%
(1) The information shown was provided by BlackRock, Inc. in a Schedule 13G/A it filed with the SEC on January 19, 2018, indicating its beneficial ownership as of December 31, 2017 of 6,341,422 shares. BlackRock reported that it has sole voting power over 6,208,959 of these shares and sole dispositive power over all of these shares. The address of the principal business office of BlackRock, Inc. is 55 East 52nd Street, New York, NY 10022.
(2) The information shown was provided by Dimensional Fund Advisors LP in a Schedule 13G/A it filed with the SEC on February 9, 2018, indicating its beneficial ownership as of December 31, 2017 of 5,191,413 shares. Dimensional Fund Advisers reported that it has sole voting power over 5,099,351 of these shares and sole dispositive power over all of these shares. The address of the principal business office of Dimensional Fund Advisors LP is Building One, 6300 Bee Cave Road, Austin, TX 78746.
(3) The information shown was provided by The Vanguard Group in a Schedule 13G/A it filed with the SEC on February 8, 2018, indicating its beneficial ownership as of December 31, 2017 of 4,677,529 shares. Vanguard reported that it has sole voting power over 66,748 of these shares, shared voting power over 7,214 of these shares, sole dispositive power over 4,608,954 of these shares and shared dispositive power over 68,575 of these shares. The address of the principal business office of The Vanguard Group is 100 Vanguard Boulevard, Malvern, PA 19355.
(4) The information shown was provided by William Blair Investment Management, LLC in a Schedule 13G it filed with the SEC on February 13, 2018, indicating its beneficial ownership as of December 31, 2017 of 4,088,825 shares. William Blair reported that it has sole voting power over 3,666,686 of these shares and sole dispositive power over all of these shares. The address of the principal business office of William Blair Investment Management, LLC is 150 North Riverside Plaza, Chicago, IL 60606.
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PROXY STATEMENT
STOCK OWNERSHIP

SECURITY OWNERSHIP BY DIRECTORS AND EXECUTIVE OFFICERS

The table below sets forth the number and percentage of outstanding shares of Common Stock beneficially owned by (1) each director of Adtalem, (2) each named executive officer listed on page 26, and (3) all directors and executive officers of Adtalem as a group, in each case as of June 30, 2018, except as otherwise noted. Adtalem believes that each individual named has sole investment and voting power with respect to the shares of Common Stock indicated as beneficially owned by such person, except as otherwise noted.

Name of Beneficial Owner
Common Stock
Beneficially Owned
Excluding Options and
RSUs(1)
Stock Options
Exercisable, PSUs and
RSUs
Scheduled to Vest
within 60 days
of June 30, 2018
Total
Common Stock
Beneficially Owned
Percentage
Ownership
Non-Employee Directors
 
 
 
 
 
 
 
 
 
 
 
 
Steven M. Altschuler, M.D.
 
 
 
 
 
 
 
*
 
William W. Burke
 
 
 
 
 
 
 
*
 
Ann Weaver Hart
 
2,478
 
 
 
 
2,478
 
 
*
 
Kathy Boden Holland
 
 
 
 
 
 
 
*
 
Georgette Kiser
 
 
 
 
 
 
 
*
 
Lyle Logan
 
19,061
 
 
 
 
19,061
 
 
*
 
Michael W. Malafronte
 
 
 
 
 
 
 
*
 
Ronald L. Taylor
 
502,315
 
 
 
 
502,315
 
 
*
 
James D. White
 
4,993
 
 
 
 
4,993
 
 
*
 
Named Executive Officers
 
 
 
 
 
 
 
 
 
 
 
 
Lisa W. Wardell
 
51,709
 
 
228,246
 
 
279,955
 
 
*
 
Patrick J. Unzicker
 
13,178
 
 
61,381
 
 
74,559
 
 
*
 
Mehul R. Patel
 
 
 
 
 
 
 
*
 
Susan L. Groenwald(2)
 
22,539
 
 
58,744
 
 
81,283
 
 
*
 
Donna N. Jennings
 
14,211
 
 
110,205
 
 
124,416
 
 
*
 
Robert A. Paul(3)
 
 
 
11,742
 
 
11,742
 
 
*
 
Gena L. Ashe(4)
 
 
 
 
 
 
 
*
 
All directors and officers as a Group (23 Persons)(5)
 
628,673
 
 
524,202
 
 
1,152,875
 
 
1.91
%
* Represents less than one percent of the outstanding Common Stock.
(1) “Common Stock Beneficially Owned Excluding Options and RSUs” includes stock held in joint tenancy, stock owned as tenants in common, stock owned or held by spouse or other members of the holder’s household, and stock in which the holder either has or shares voting and/or investment power, even though the holder disclaims any beneficial interest in such stock. Options exercisable, PSUs and RSUs that are scheduled to vest within 60 days after June 30, 2018 are shown separately in the “Stock Options Exercisable, PSUs and RSUs Scheduled to Vest within 60 days of June 30, 2018” column.
(2) Resigned as President, Chamberlain University on July 17, 2018.
(3) Resigned as President, DeVry University on September 6, 2017.
(4) Resigned as Senior Vice President, General Counsel on January 29, 2018.
(5) Excludes ownership of Susan L. Groenwald, Robert A. Paul and Gena L. Ashe.
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STOCK OWNERSHIP
PROXY STATEMENT

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) requires that Adtalem’s directors and executive officers file reports of ownership and changes in ownership of Common Stock with the SEC. To Adtalem’s knowledge, based solely upon a review of copies of such reports and written representations that all such reports were timely filed, with the exception of a late Form 4 filing by Lisa Sodeika, Adtalem believes that each of its executive officers and directors complied with all Section 16(a) filing requirements applicable to them during fiscal year 2018.

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PROXY STATEMENT
Executive Compensation – Compensation Discussion and Analysis

EXECUTIVE COMPENSATION

The following pages summarize our executive compensation program for our named executive officers (“NEOs”). Our 2018 NEOs are:

Ms. Lisa W. Wardell, President and Chief Executive Officer, Adtalem Global Education
Mr. Patrick J. Unzicker, Senior Vice President, Chief Financial Officer and Treasurer, Adtalem Global Education
Mr. Mehul R. Patel, Group President, Professional Education
Dr. Susan L. Groenwald, Former President, Chamberlain University
Ms. Donna N. Jennings, Senior Vice President, Human Resources, Adtalem Global Education
Mr. Robert A. Paul, Former President, DeVry University
Ms. Gena L. Ashe, Former Senior Vice President, Corporate Secretary and General Counsel

In fiscal year 2018, Mr. Stephen W. Beard was hired as Adtalem’s Senior Vice President, Corporate Secretary and General Counsel following Ms. Ashe’s departure, and Dr. Karen Cox was hired in early fiscal year 2019 following the planned retirement of Dr. Groenwald to lead Chamberlain University forward into the future.

Along with other key executive leaders brought into the organization, including Mr. Patel (leading the Professional Education group) and Ms. Boden Holland (Leading the Medical and Healthcare group), the Board believes Adtalem has a strong leadership team that is well positioned to drive the growth of Adtalem into the future.

COMPENSATION DISCUSSION & ANALYSIS

EXECUTIVE SUMMARY

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

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

COMPENSATION OBJECTIVES
Our executive compensation program is designed to:
Align Incentives
Our purpose is to empower our students to achieve their goals, find success and make inspiring contributions to the global community. Success in realizing our purpose drives growth, which leads to creation of sustainable, long-term value for our shareholders. Our compensation program is distinguished by its alignment not only with our shareholders, but also with our students, whose success is critical to our organization’s success.
Compete for Talent
Our compensation program is designed to attract, retain and motivate high-performing employees, particularly our key executives who are critical to our operations. Our compensation decisions take into account the competitive landscape for talent.
Reward Performance
We reward outstanding performance through:
 •
A short-term incentive program focusing our executives on achieving strong financial results and superior academic and student outcomes, through individual performance objectives, and
 •
A long-term incentive program providing a mix of equity vehicles designed to reward long-term financial performance and shareholder value creation.
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Executive Compensation – Compensation Discussion and Analysis
PROXY STATEMENT

Over the course of fiscal year 2018, the Compensation Committee went through a comprehensive review of the current executive compensation program and assessed the extent to which the current program was aligned with shareholder interests and maximized focus on the key strategic priorities as Adtalem moves forward. The Committee also considered shareholder feedback received through Adtalem’s ongoing shareholder outreach efforts over the last several years. At the conclusion of this review, the Committee identified that the compensation program at the time:

Encouraged a conservative mindset and delivered rewards primarily for incremental improvements
Did not provide enough incentive to properly reward executives with an appetite for appropriate risk taking to drive growth
Required more differentiation in terms of pay for performance within the executive group

The Committee, in partnership with its advisor, FW Cook, and management, reviewed the elements of compensation within the executive group including base salary, short-term incentives and long-term incentives to ensure each element and the program in whole remained aligned with Adtalem’s mission and purpose of empowering students to achieve their academic and career goals but also more accurately lined up with the objectives outlined above.

At the August 2018 Compensation Committee meeting, the Committee approved certain changes to executive compensation for fiscal year 2019 and forward. The Committee believes these changes will:

Enhance pay differentiation among executives for different levels of performance achieved
Provide more upside reward and downside risk for exceptional performance over time
Incentivize and reward a thoughtful growth mentality

Executive Compensation Changes for Fiscal Year 2019

As a result of the Compensation Committee’s review described above, certain changes to the executive compensation program were made for fiscal year 2019. These changes were implemented in order to better align our executive compensation plans with the interests of shareholders and to encourage focus on Adtalem’s key strategic priorities. The primary changes were:

1. Shifted Focus on Mission-Based Goals to Management Incentive Plan

Adtalem’s purpose is to empower our students to achieve their academic and career goals. We believe our continuing focus on a student-centered culture of care has distinguished us in the marketplace, and is essential to preserving and enhancing shareholder value in a challenging regulatory and competitive environment. Our senior executives with direct influence over our institutions should be held accountable to, and rewarded for, the realization of our purpose — specifically, to sustain and continuously improve the quality of our educational programs as reflected in the performance and achievement of our students.

In August 2018, the Compensation Committee decided to more effectively emphasize academic quality and academic student outcomes by shifting such measures from the PSU component of long-term incentives to the annual short-term incentive plan (MIP). The committee believes the annual short-term incentive plan is the best compensation component to drive focus from year-to-year on these key performance measures. Considering how quickly academic standards and measurement mechanisms change, we believe the quality of goal setting on these academic measures will be stronger with the increased ability to understand and set expectations and appropriately stretch goals on an annual basis. The performance goals established each year will be directly overseen by the Academic Quality Committee to ensure appropriate goals are set for each institution within Adtalem’s portfolio. For each of our higher education institutional leaders this shift in focus will mean that the entirety of the 30% weighting on individual goals will be solely focused on these academic performance measures in fiscal year 2019, where previously the 30% weighting might have represented a blend of operational, financial and academic goals.

2. Introduction of Free Cash Flow per Share as Long-Term Incentive Measure

For long-term incentives starting with the August 2018 (fiscal 2019) grants, the Compensation Committee will continue to measure three-year average return on invested capital (“ROIC”) for 50% of the PSU grants. Payout for the other 50% of

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Executive Compensation – Compensation Discussion and Analysis

the PSU grants will be based on free cash flow per share (“FCF per share”). The Committee believes these two PSU performance measures will create better alignment with shareholder interests, the appropriate long-term focus on value creation for the organization, and incentives for long-term decision-making focused on achieving sustainable on growth of the organization. The Committee and the organization believe that consistent strong academic quality and strong student outcomes drive the long-term success of the organization. In order to achieve the long-term financial goals associated with the PSUs, management must maintain high academic quality and strong student outcomes each year.

The PSU grants made to executive officers in August 2018 (both the 50% focused on ROIC and the 50% focused on FCF per share) have a three-year performance period (fiscal year 2019 – fiscal year 2021). Similar to our previous ROIC PSU grants, there are threshold, target and maximum performance goals established for both ROIC and also for FCF per share over the three-year performance period. PSU grants will vest anywhere between 0% for below threshold performance, 50% of target payout for threshold performance and 150% of target for achieving maximum performance or above.

CEO’s Fiscal Year 2019 LTI Grant Pulled Forward into Fiscal Year 2018

In order to further emphasize the importance of incentivizing a results-oriented thoughtful growth mentality, the Committee decided to deliver long-term compensation to Ms. Wardell over fiscal years 2018 and 2019 through a front-loaded two-year award granted in fiscal year 2018. The Board and Compensation Committee have determined that this grant represents Ms. Wardell’s long-term incentive awards for both fiscal year 2018 and fiscal year 2019. Ms. Wardell has not received, and will not receive, any form of long-term incentive award in fiscal year 2019. The front loaded grant was delivered 100% in the form of performance-based long-term incentive (stock options with an elongated back end loaded vesting schedule and performance vesting PSUs) and did not include any time-based vesting Restricted Stock Units. The Committee believes this design and timing is better aligned to shareholder interests to lead to key strategic and financial results.

Fiscal Year 2018 Year in Review

2018 FINANCIAL AND OPERATIONAL HIGHLIGHTS

During fiscal year 2018 Adtalem announced the signing of definitive agreements to divest the outstanding equity interests of DeVry University and Carrington College, with expected closing dates of early fiscal year 2019 and mid-fiscal year 2019, respectively. Accordingly, the results of DeVry University and Carrington College are presented as discontinued operations within Adtalem’s Annual Report on Form 10-K attached herein. Also see “Note 2: Discontinued Operations and Assets Held for Sale” to the consolidated financial statements for further discussion.

While DeVry University and Carrington College’s operating results were classified as discontinued operations in Adtalem’s financial statements, each entity’s revenue and operating income, excluding special items, continued to be included in actual fiscal year 2018 results for Management Incentive Plan (“MIP”) performance purposes. See Appendix A for a reconciliation to reported results. The 2018 revenue target under the MIP was essentially flat compared to 2017 actual results, which reflected expected growth in the Medical and Healthcare, Professional Education and Technology and Business segments, offset by declines in the U.S. Traditional Postsecondary segment, where our strategic plans included divestiture of two institutions. Despite flat expected revenues, the 2018 earnings per share target goal under MIP was set higher than 2017 actual results, which would require increased operating efficiency.

Fiscal year 2018 was a transformative year for Adtalem. We solidified our position within our three core verticals, improved student outcomes and enhanced academic excellence, Adtalem enters fiscal year 2019 with momentum in pursuit of its primary mission of empowering its students and filling the global work force skills gaps that are prevalent in society.

Adtalem’s fiscal year 2018 financial results reflect continued growth in its Medical and Healthcare and Professional Education segments, with revenue increasing 1.6 percent and 11.7 percent, respectively, while Technology and Business and Discontinued Operations revenue decreased 2.0 percent and 19.5 percent, respectively. Nonetheless, through substantial expense reduction initiatives, Adtalem achieved fiscal year 2018 earnings per share excluding special items of $3.06, compared to $2.79 in the prior year.

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Executive Compensation – Compensation Discussion and Analysis
PROXY STATEMENT

Fiscal year 2018 revenue was below our expectations, while earnings per share, excluding special items, exceeded our expectations, each as reflected in our fiscal year 2018 operating plan, which served as the basis for our fiscal year 2018 MIP financial performance targets. As a result, the portions of executive officer MIP awards based on Adtalem revenue and earnings per share paid out at 74.3% and 115.6% of target, respectively.
 
*Actual results adjusted to exclude impact of
special items. See Appendix A for a reconciliation
to reported results.

ACADEMIC HIGHLIGHTS

Adtalem continued to grow and diversify into new programs and geographies, focused on enhancing student outcomes by providing quality education and student services across its institutions. Notable developments included:

Chamberlain University opened its twenty-first location in New Orleans, Louisiana on the Ochsner Medical Center campus and launched its Master of Public Health degree program;
American University of the Caribbean School of Medicine partnered with University of Central Lancashire to provide continuity of its medical program after the effects of Hurricane Irma;
Ross University School of Veterinary Medicine launched a new research foundation and opened a state-of-the-art research and pathology building and is participating in the newly formed One Health Research Foundation with the goal to advance research related to animal, human and environmental well-being;
Ross University School of Medicine maintained quality and continuity of its medical education program at temporary locations in Tennessee and St. Kitts after the Dominica campus was impacted by Hurricane Maria, and will relocate to Barbados in January 2019; and
Adtalem Brazil expanded its reach with the opening of Ibmec Sao Paulo, serving the largest market in Brazil, the launch of distance learning through Wyden Online and the new Wyden Unifanor campus in Forteleza.

Adtalem also sought to extend its role as a leader in higher education and foster deeper understanding and engagement with policymakers and government officials through its “Student Commitments,” a series of practices and policies that establish critical new standards at all of our Title IV institutions and highlight efforts previously underway. Adtalem also acted to bring certainty to students, employees and shareholders by resolving governmental inquiries and actions concerning DeVry University’s advertising regarding student outcomes.

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PROXY STATEMENT
Executive Compensation – Compensation Discussion and Analysis

2018 Compensation Decisions and Actions

Factors Guiding Our Decisions
(see page 35 for details)
Executive compensation program objectives, philosophy and principles
Shareholder input, including “say-on-pay” vote
Adtalem’s mission, vision, purpose and “TEACH” values
Market norms, trends and best pay practices
Financial performance of Adtalem and its individual institutions
Advice of independent outside compensation consultant
Student academic performance and outcomes
 
 
Key Fiscal Year
2018
Compensation
Decisions
   
(see page 38 for details)
Base Salary
   
Reflecting Adtalem’s commitment to offering market competitive compensation to our key executives, the Compensation Committee approved salary increases in fiscal year 2018 for several NEOs to reward performance and maintain market competitiveness.
   
Annual Incentives
   
For fiscal year 2018 for the CEO, 85% of the MIP award was based on Adtalem measures of earnings per share and revenue, reflecting our CEO’s key responsibility in leading Adtalem’s financial growth. The remaining 15% was based on individual performance. For fiscal year 2018 for the other NEOs, as in fiscal years 2016 and 2017, 70% of the MIP award was based on financial performance at Adtalem (earnings per share and revenue) or at the institutions for which the NEO is responsible (operating income and revenue), and the remaining 30% was based on individual performance.
   
Following the end of fiscal year 2018, the MIP award in total across all measures was paid at 112% of target for the CEO and between 88% and 129% of target for the other NEOs, excluding Mr. Paul who was not eligible to receive a MIP award, reflecting the strong financial performance of Adtalem and its institutions and individual contributions for fiscal year 2018.
 
Long-term Incentives
   
In fiscal year 2018, NEOs other than the CEO received long-term incentive grants in a combination of stock options, performance-vesting Performance Share Units (“PSUs”), and service-vesting RSUs.
   
The CEO’s fiscal year 2018 equity grant was a front-loaded, two-year award valued at approximately $9.4 million. The Board and Compensation Committee have determined that this grant represents Ms. Wardell’s long-term incentive awards for both fiscal year 2018 and fiscal year 2019. Ms. Wardell has not received, and will not receive, any form of long-term incentive award in fiscal year 2019. The Board and Compensation Committee approved this grant to drive Ms. Wardell’s focus on key academic and financial performance goals over the next several years, and they determined that making a front-loaded, two-year award would underline the importance and critical nature of the performance goals, given the anticipated divestiture of DeVry University and the transformative nature of the corporate changes. Of the total grant value, approximately 50% was in PSUs tied to ROIC and key academic metrics, and 50% was in stock options. The Committee explicitly chose to deliver 100% of this front loaded award through performance-based long-term incentives and chose to exclude any time-based vesting RSUs in this grant as opposed to our historical annual LTI grant approach for named executive officers. The performance period for the PSUs is fiscal year 2018 through fiscal year 2020 and they will only vest at the end of this three-year period upon achievement of certain academic and financial (ROIC) performance goals discussed later in this section. The stock options will vest 50% after the three year grant date anniversary and 50% after the four year grant date anniversary. This vesting schedule is intended to drive focus on performance over the long-term.
   
Performance share awards granted in 2015 vested in 2018, with an overall payout of 71% of target, demonstrating that the high standards established for Adtalem’s institutions were rigorous.
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PROXY STATEMENT

Shareholder Outreach

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

Feedback from investors influences the narrative in our public disclosures. Based on discussions, we have added increased focus on nursing and medical market demand and enrollment trends, realignment of the portfolio, cost rationalization, a 5-year financial outlook by segment, as well as our capital allocation strategy, which supports return on capital to our owners.

We value our shareholders’ opinions on the design and effectiveness of our executive compensation program. At our Annual Meeting of Shareholders in November 2017, 98% of the votes cast in our advisory “say-on-pay” shareholder vote approved our executive compensation package. Shareholders have shared the importance of free cash flow in their valuations, in addition to a return on invested capital metric. Accordingly, in response to these shareholder comments, we added free cash flow per share as a long-term incentive measure to the fiscal 2019 compensation plan.

Over the last several years in connection with our outreach, Adtalem’s major shareholders have expressed varying perspectives. A few common themes emerged from these discussions. Below is a summary of what we heard and the actions we took in response:

What we heard
How we responded
Ensure executive compensation plans drive focus on delivering results
Through feedback received from major shareholders, in fiscal year 2018, the Committee chose to reintroduce Earnings Per Share as the key performance measure in our short-term incentive plan (Management Incentive Plan or “MIP”). We replaced Net Income with Earnings Per Share as the primary performance measure in this plan to create better alignment with shareholders on this key measure.
In August 2018, the Committee structured the fiscal year 2019 long-term incentive grants to be focused on key financial metrics, namely Return on Invested Capital (“ROIC”) and Free Cash Flow Per Share. We believe this increased focus on driving value creation through our long-term incentive plan better aligns our compensation programs with the interests of shareholders.
Drive a growth mentality and get Adtalem’s portfolio aligned for future growth
The Committee decided to grant a two-year front-loaded long-term incentive award to our CEO in fiscal year 2018, with no fiscal year 2019 long-term incentive grant of any kind. This award was delivered exclusively through growth oriented long-term incentive vehicles – stock options with a back end loaded vesting term and PSUs that vest solely based on the achievement of meeting performance goals over a three-year period. The Board and Compensation Committee approved this grant to drive Ms. Wardell’s focus on critically important academic and financial performance metrics over the next several years.
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Executive Compensation – Compensation Discussion and Analysis

What we heard
How we responded
Academic quality leads to growth and value creation for shareholders
Through the Committee’s review of our key strategies and our executive compensation program, it was clear delivering quality academic and student outcomes continues to be a critical element of our long-term success. The decision to shift measurement of academic outcomes into the MIP strengthens that focus year in and year out with meaningful stretch annual goals.

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

PAY-FOR-PERFORMANCE FOCUS

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


1 Excludes perquisites.
2 In August 2018, a two-year, “front-loaded” LTI award was granted to the CEO approximately 50% in stock options and 50% in PSUs (25% focused on ROIC and 25% focused on academic outcomes). The Board and Compensation Committee approved this grant to drive Ms. Wardell’s focus on critically important academic and financial performance metrics over the next several years. This grant represents the totality of LTI that Ms. Wardell will receive over the course of all of fiscal year 2018 and fiscal year 2019. Ms. Wardell has not received, and will not receive, any form of long-term incentive award in fiscal year 2019. In the graph above, an annualized value of this award (i.e., 50%) is presented.
Program Design: Between 62% and 71% of the total direct compensation for our NEOs other than the CEO, is composed of variable pay.
The actual value realized from the annual MIP award ranges from zero, if threshold performance targets are not met, up to 200% of targeted amounts for exceptional organizational performance.
Under the mission-based Performance Share component of our long-term incentive plan for fiscal year 2018, payout is contingent on meeting academic or student outcome performance goals. The size of the payout is based on meeting academic or student outcome targets established for each institution across Adtalem.
Under the financial-based Performance Share component of our long-term incentive plan for fiscal year 2018, payout is contingent on meeting a minimum ROIC threshold. If the minimum level of ROIC performance is attained, the size of the payout is then based on achievement against ROIC targets.
Performance Assessment: Our Compensation Committee uses a comprehensive, well-defined and rigorous process to assess organizational and individual performance. We believe the performance measures for our incentive plans focus management on the appropriate objectives for the creation of short- and long-term shareholder value as well as organizational growth.
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Executive Compensation – Compensation Discussion and Analysis
PROXY STATEMENT

Adtalem’s fiscal year 2018 incentive compensation program for executives was designed to link compensation performance with the full spectrum of our business goals, some of which are short-term, while others take several years or more to achieve:

 
Short-Term
(Cash)
Long-Term
(Equity)
Long-Term
(Equity)
Long-Term
(Equity)
Long-Term
(Equity)
 
Management
Incentive Plan
Mission-Based PSUs
(performance-based
restricted stock units)
ROIC PSUs
(performance-based
restricted stock units)
RSUs
(time-based
restricted stock units)
Stock Options
Objective
Short-term operational
business priorities
Reward medium-term improvement of student outcomes align interests of management and shareholders, and retain key talent
Reward achievement of multi-year financial goals, align interests of management and shareholders, and retain key talent
Align interests of management and shareholders, and retain key talent
Reward stock price growth and retain key talent
Time Horizon
1 Year
3 Year
cliff vesting
3 Year
cliff vesting
4 Year
ratable vesting
4 Year
ratable vesting
Performance
Measures
Revenue(1) Earnings Per Share Individual Goals
Student Outcomes and Stock Price Growth
ROIC and Stock Price Growth
Stock Price Growth
Stock Price Growth
(1) A portion of the MIP payout for executive leadership of business segments and business units is also based on the revenue and operating income at such executive’s business segment or business unit.
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Executive Compensation – Compensation Discussion and Analysis

EXECUTIVE COMPENSATION GOVERNANCE AND PRACTICES

 
 
 
 
What We Do
What We Don’t Do
 
ü
Pay for economic and academic performance
û
Provide tax gross-ups
 
 
 
 
ü
Solicit and value shareholder opinions about our compensation practices
û
Provide single-trigger change-in-control severance
 
 
 
 
ü
Deliver total direct compensation primarily through variable pay
û
Re-price stock options or exchange underwater options for other awards or cash
 
 
 
 
ü
Set challenging short- and long-term incentive award goals
û
Pay dividends on unvested performance-based restricted stock units
 
 
 
 
ü
Use relevant academic and student outcome measures to determine a meaningful portion of executive compensation
û
Provide excessive perquisites
 
 
 
 
ü
Provide strong oversight that ensures adherence to incentive grant regulations and limits
û
Offer a defined benefit pension or supplemental executive retirement plan (SERP)
 
 
 
 
ü
Maintain robust stock ownership requirements
û
Permit hedging or pledging of Adtalem common stock
 
 
 
 
ü
Adhere to an incentive compensation recoupment policy (“clawback” policy)
û
Reward executives without a link to performance
 
 
 
 
ü
Offer market-competitive benefits
 
 
 
 
 
 
ü
Consult with an independent advisor on executive pay practices, plan designs and assessing external competitive pay levels
   
 
 

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TABLE OF CONTENTS

Executive Compensation – Compensation Discussion and Analysis
PROXY STATEMENT

OVERSIGHT OF PAY AND PHILOSOPHY

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

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

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TABLE OF CONTENTS

PROXY STATEMENT
Executive Compensation – Compensation Discussion and Analysis

Role of the Compensation Committee

The Compensation Committee determines the appropriate level of compensation for the CEO and other NEOs. The Compensation Committee reviews and approves all components of annual compensation (base salary, annual cash incentive and long-term incentive) to ens