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Heidrick & Struggles International Inc – ‘DEF 14A’ for 5/26/11

On:  Monday, 4/25/11, at 5:09pm ET   ·   Effective:  4/25/11   ·   For:  5/26/11   ·   Accession #:  1193125-11-107886   ·   File #:  0-25837

Previous ‘DEF 14A’:  ‘DEF 14A’ on 4/26/10 for 5/27/10   ·   Next:  ‘DEF 14A’ on 4/17/12 for 5/24/12   ·   Latest:  ‘DEF 14A’ on 4/12/24 for 5/23/24   ·   4 References:   By:  Heidrick & Struggles International Inc. – ‘10-K’ on 3/4/24 for 12/31/23 By:  Heidrick & Struggles International Inc. – ‘10-K’ on 2/27/23 for 12/31/22 By:  Heidrick & Struggles International Inc. – ‘10-K’ on 2/28/22 for 12/31/21 By:  Heidrick & Struggles International Inc. – ‘10-K’ on 2/24/21 for 12/31/20 

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 4/25/11  Heidrick & Struggles Int’l Inc    DEF 14A     5/26/11    1:995K                                   RR Donnelley/FA

Document/Exhibit                   Description                      Pages   Size 

 1: DEF 14A     Definitive Proxy Statement                          HTML    778K 

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SCHEDULE 14A

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

Exchange Act of 1934 (Amendment No.     )

Filed by the Registrant    x

Filed by a Party other than the Registrant    ¨

Check the appropriate box:

¨    Preliminary Proxy Statement

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

x    Definitive Proxy Statement

¨    Definitive Additional Materials

¨    Soliciting Material under Rule 14a-12

Heidrick & Struggles International, 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):

x    No fee required.

¨    Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

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NOTICE OF

ANNUAL MEETING OF STOCKHOLDERS

AND

PROXY STATEMENT

April 25, 2011

Greetings to the stockholders of Heidrick & Struggles International, Inc. I am pleased to invite you to attend our Annual Meeting of Stockholders.

The meeting will be held on May 26, 2011 at 9:00 a.m. Eastern Daylight Time at the Intercontinental New York Times Square, located at 300 W. 44^th Street, New York, NY 10036.

The Notice of Annual Meeting of Stockholders accompanying this letter describes the business we will be transacting at the meeting.

Whether or not you plan to attend the Annual Meeting in person, I urge you to sign, date and return the enclosed Proxy Card as soon as possible so that your shares will be represented at the meeting. The vote of every stockholder is important!

I look forward to seeing you on May 26.

Sincerely,

L. Kevin Kelly

Chief Executive Officer

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HEIDRICK & STRUGGLES INTERNATIONAL, INC.

233 South Wacker Drive, Suite 4200

Chicago, Illinois 60606-6303

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

Dear Stockholders:

At our Annual Meeting, we will ask you to:

If you were a stockholder of record at the close of business on April 15, 2011, you are entitled to vote at the Annual Meeting or any adjournment of the meeting. A stockholder list will be available at our principal executive offices located at 233 South Wacker Drive, Suite 4200, Chicago, Illinois 60606, beginning April 25, 2011 during normal business hours, for examination by any stockholder registered on our stock ledger as of April 15, 2011, for any purpose germane to the Annual Meeting.

Your attention is called to the accompanying Proxy Card and Proxy Statement. A copy of our Annual Report to Stockholders (including our Annual Report on Form 10-K) for the year ended December 31, 2010 is also enclosed.

Sincerely,

Stephen W. Beard

Secretary

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VOTING INFORMATION

Proxy Solicitation.    The Board of Directors of Heidrick & Struggles International, Inc. (“Heidrick & Struggles” or the “Company”) is furnishing you with this Proxy Statement in connection with the solicitation of your proxy for the Annual Meeting of Stockholders to be held on May 26, 2011 and at any adjournment thereof. This solicitation is being made by mail. The Company may also use its officers and other employees to solicit proxies from stockholders, personally or by telephone, facsimile, letter or electronic mail. The Company will pay all costs associated with the solicitation of proxies. The Company has retained Morrow & Co., Inc. to aid in the solicitation of proxies. The Company will pay Morrow & Co., Inc. a fee of $7,500 as compensation for its services and will reimburse it for its reasonable out-of-pocket expenses. If the Company requests nominees and brokers to solicit their principals and customers for their proxies, it will reimburse the nominees and brokers for their reasonable out-of-pocket expenses.

Annual Meeting of Stockholders.    The Annual Meeting of Stockholders will be held on May 26, 2011 at 9:00 a.m. Eastern Daylight Time at the Intercontinental New York Times Square located at 300 West 44^th Street, New York, New York, 10036. If you need directions to the Annual Meeting, please contact Julie Creed, Vice President, Investor Relations at 1-312-496-1200. This Proxy Statement is first being mailed on or about April 25, 2011 to Company stockholders entitled to notice of, and to vote at, the Annual Meeting.

Record Date.    Each share of Company common stock that you owned as of April 15, 2011, the record date for the Annual Meeting, entitles you to one vote. On April 15, 2011 there were 17,784,411 shares of Company common stock outstanding.

Voting.    As a stockholder of record, you may vote in one of the following three ways whether or not you plan to attend the Annual Meeting: (1) by completing, signing and dating the accompanying proxy card and returning it in the postage-prepaid envelope enclosed for that purpose, (2) by completing your proxy using the toll-free telephone number listed on the proxy card, or (3) by completing your proxy via the Internet at the website address listed on the proxy card. If you attend the Annual Meeting, you may vote in person at the meeting even if you have previously completed your proxy by mail, telephone or via the Internet.

If your shares are held on your behalf by a third party such as your broker (or another nominee) and are registered in the name of your broker (or other nominee), thereby making the broker (or other nominee) the stockholder of record and you the beneficial owner, we refer to your shares as being held in “street name.” As the beneficial owner of your “street name” shares, you are entitled to instruct your broker (or other nominee) as to how to vote your shares. Your broker (or other nominee) will provide you with information as to the manner in which you are able to instruct it as to the voting of your “street name” shares. If your shares are held in “street name” and you wish to attend the Annual Meeting in person and vote at the Annual Meeting, you will need to obtain a legal proxy in your name from your broker (or other nominee).

If your shares are held in “street name,” your broker (or other nominee) is required to vote those shares in accordance with your instructions. If you do not give instructions to your broker (or other nominee), your broker (or other nominee) will only be entitled to vote the shares with respect to “discretionary” matters as described below but will not be permitted to vote the shares with respect to “non-discretionary” matters. A “broker non-vote” with respect to any particular matter occurs when your broker (or other nominee) submits a proxy for your shares (because the broker (or other nominee) (i) has received instructions from you on some but not all proposals, or (ii) has not received instructions from you on any proposals but is entitled to vote in its discretion on one or more matters) but does not indicate a vote for a particular proposal because the broker (or other nominee) does not have discretionary authority to vote on that proposal and has not received voting instructions from you. “Broker non-votes” are not counted as votes for or against the proposal in question or as abstentions, nor are they counted to determine the number of votes present for the particular proposal. We do, however, count

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“broker non-votes” for the purpose of determining a quorum. If your shares are held in “street name” by your broker (or other nominee), please check the instruction card provided by your broker (or other nominee) or contact your broker (or other nominee) to determine whether you will be able to vote by telephone or via the Internet.

Any proxy given pursuant to this solicitation may be revoked by the person giving it at any time before it is voted at the Annual Meeting. Proxies may be revoked by (i) delivering to the Secretary of the Company, before the taking of the vote at the Annual Meeting, a written notice of revocation bearing a later date than the proxy, (ii) duly completing a later-dated proxy relating to the same shares and presenting it to the Secretary of the Company before the taking of the vote at the Annual Meeting or (iii) attending the Annual Meeting and voting in person (although attendance at the Annual Meeting will not in and of itself constitute a revocation of a proxy). Any written notice of revocation or subsequent proxy should be delivered to the Company’s Secretary at the Company’s principal executive offices, the address of which is noted on the Notice of Annual Meeting, or hand delivered to the Secretary of the Company, before the taking of the vote at the Annual Meeting.

Quorum.    The holders of a majority of the issued and outstanding stock of the Company present either in person or by proxy at the Annual Meeting constitutes a quorum for the transaction of business at the Annual Meeting. The inspector of election appointed for the Annual Meeting will determine whether a quorum is present. Shares that abstain from voting on any proposal and “broker non-votes” will be counted as shares that are present and entitled to vote for purposes of determining whether a quorum exists at the Annual Meeting. For purposes of determining the outcome of any matter as to which a broker (or other nominee) has not received instructions, and for which it does not have discretionary voting authority, those shares will be treated as not present and not entitled to vote with respect to that matter (even though those shares are considered entitled to vote for purposes of determining whether a quorum exists and may be entitled to vote on other matters).

Required Votes.    Regarding Proposal I, pursuant to the Company’s by-laws, directors are elected by a plurality vote of all votes cast for the election of directors at the Annual Meeting and, therefore, the three nominees for director who receive the most votes will be elected. Stockholders will not be allowed to cumulate their votes in the election of directors. Shares that abstain from voting will not affect the outcome of the election of directors. Uncontested elections of directors are not considered to be “discretionary” matters for certain brokers and, as a result, those brokers are not authorized to vote “street name” shares in the absence of instructions from the beneficial owner. Thus, if you do not provide specific instructions to your broker on how to vote any of your “street name” shares with respect to the election of our directors, your broker may not be able to vote those shares in its discretion and, in such case, a “broker non-vote” would occur and no vote of your “street name” shares would be counted for purposes of the election of our directors. “Broker non-votes” will not affect the outcome of our director election. With respect to shares held in “street name” by your broker (or other nominee), we strongly encourage you to provide instructions to such broker (or other nominee) as to how to vote on the election of directors by signing, dating and returning to the broker (or other nominee) the instruction card provided by that broker (or other nominee). THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR EACH OF THE DIRECTOR NOMINEES.

Regarding Proposal II, an affirmative vote of a majority of the shares present in person or represented by proxy at the Annual Meeting, and entitled to vote on such matter at the Annual Meeting, is required for approval. Unlike the other proposals, Proposal II involves a matter on which a broker (or other nominee) does have discretionary authority to vote and as a result, if you do not instruct your broker (or other nominee) as to how you want to vote your shares, your broker (or other nominee) is entitled to vote your shares in its discretion. With respect to Proposal II, an abstention will have the same effect as a vote against Proposal II. THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR PROPOSAL II.

Regarding Proposals III and IV, an affirmative vote of a majority of the shares present in person or represented by proxy at the Annual Meeting, and entitled to vote on such matter at the Annual Meeting, is required for approval. Votes withheld and abstentions are deemed “present” at the Annual Meeting and are

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counted for quorum purposes and will have the same effect as a vote against the matter. Broker non-votes, if any, while counted for general quorum purposes, are not deemed to be present with respect to any matter for which a broker does not have authority to vote and will have the same effect as a vote against Proposals III and IV. THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR PROPOSALS III and IV.

Regarding Proposal V, the option that receives the greatest number of votes cast by the stockholders will be considered the option approved by the stockholders. Proxies submitted without direction pursuant to this solicitation will be voted for the option of “ONE YEAR”. Abstentions will have no effect on the vote. Broker non-votes, if any, while counted for general quorum purposes, are not deemed to be present with respect to any matter for which a broker does not have authority to vote, will be treated as abstentions and will have no effect on the vote. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR “ONE YEAR” AS THE FREQUENCY OF THE ADVISORY VOTES ON EXECUTIVE COMPENSATION.

The inspector of election appointed for the Annual Meeting will tabulate votes.

The persons named as attorneys-in-fact in this proxy statement, Stephen W. Beard and Richard J. Caldera, were selected by the Board of Directors and are officers of the Company. Each executed proxy card returned prior to the taking of the vote at the Annual Meeting will be voted. Where a choice has been specified in an executed proxy with respect to the matters to be acted upon at the Annual Meeting, the shares represented by the proxy will be voted in accordance with the specifications. If no such specifications are indicated, such proxies will be voted (i) FOR the three nominees to the Board of Directors; (ii) FOR the ratification of the appointment of KPMG LLP as the independent registered public accounting firm of the Company for the 2011 fiscal year; (iii) FOR approval of the one-year extension to the 2007 Heidrick & Struggles GlobalShare Program; (iv) FOR approval of the Company’s compensation of executive officers; and (v) FOR “ONE YEAR” as the frequency of the advisory votes on executive compensation.

Majority Vote Policy.    The Company’s Corporate Governance Guidelines provide that, in any uncontested election, any nominee for director who does not receive a majority of votes cast “FOR” his or her election is required to tender his or her resignation promptly following the failure to receive the required vote. The Corporate Governance Guidelines require the Nominating and Board Governance Committee of the Board of Directors to make recommendations to the Board with respect to any such resignation. The Board is required to take action with respect to this recommendation and to disclose its decision-making process. Full details of this policy are set forth under “Practices (Resignation for Majority Withheld Vote)” in the Company’s Corporate Governance Guidelines, a copy of which is included in the Company Leadership section of the Company’s website at: http://www.heidrick.com.

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to Be Held on May 26, 2011.

The Proxy Statement and the Company’s Annual Report are available at http://www.heidrick.com/proxy.

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DESCRIPTION OF THE COMPANY’S CAPITAL STOCK

The Company’s Amended and Restated Certificate of Incorporation provides for its authorized capital stock to consist of 100,000,000 shares of common stock, $.01 par value per share, of which 17,784,411 shares were issued and outstanding on April 15, 2011 and 10,000,000 shares of preferred stock, $.01 par value per share, none of which have been issued. The Company’s common stock is listed on the NASDAQ Stock Market under the symbol “HSII.”

Each stockholder is entitled to one vote per share on all matters to be voted upon by the stockholders. The holders of common stock do not have cumulative voting rights. Holders of common stock are entitled to receive dividends if and when dividends are declared by the Board of Directors and out of funds legally available, after the required dividends are paid on outstanding preferred stock, if any. On September 19, 2007, the Board of Directors approved the initiation of a quarterly cash dividend in the amount of $0.13 per share and the dividend has been reauthorized by the Board for each succeeding fiscal quarter up to the present. In the event of the Company’s liquidation, dissolution or winding up, the holders of common stock are entitled to share ratably in all assets remaining after payment of liabilities, accrued but unpaid dividends and liquidation preferences on any outstanding preferred stock. The shares of common stock have no preemptive or conversion rights and are not subject to the Company’s further calls or assessment. There are no redemption or sinking fund provisions applicable to the common stock.

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PROPOSAL I

ELECTION OF CLASS I DIRECTORS

The Board of Directors currently has eight members, one of whom is a Company employee and seven of whom are non-employees. On November 5, 2010, Mr. Antonio Borges resigned as a member of the Board of Directors. Mr. Borges had served on the Board of Directors since 2004.

The Board of Directors is divided into three classes (Classes I, II, and III) for purposes of election. The Company’s Amended and Restated Certificate of Incorporation calls for each class to consist, as nearly as possible, of one-third of the total number of directors that make up the Board of Directors. One class is elected at each Annual Meeting of Stockholders to serve for a three-year term. The Board of Directors recommends that three (3) directors be elected at the Annual Meeting as Class I directors to hold office for a three-year term expiring in 2014. Directors who are not standing for election this year will continue in office for the remainder of their respective terms.

The Board of Directors has recommended and nominated each of the following persons to be reelected to the Board of Directors as Class I directors with terms expiring in 2014: Messrs. Kelly, Knowling, and Unruh.

Subject to the exceptions set forth in the “Voting Information” section of this proxy statement, the enclosed Proxy will be voted FOR the election of each of the three nominees unless it is marked to withhold authority to vote for one or more of the nominees. Proxies cannot be voted for more than three nominees.

If any nominee ceases to be a candidate for election for any reason, the Proxy will be voted for a substitute nominee designated by the Company’s Board of Directors. The Board of Directors currently has no reason to believe that any nominee will not remain a candidate for election as a director or will be unwilling to serve as a director if elected.

Below is certain information about each director nominee and each director whose term of office will continue after the Annual Meeting, including a summary of the specific experience, qualifications, attributes and skills that led the Nominating and Board Governing Committee to conclude that such individual is qualified to serve as a director. There are no family relations among any directors, executive officers, or persons nominated to become a director.

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NOMINEES FOR ELECTION AS CLASS I DIRECTORS

(Directors with Terms Expiring in 2011)

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CLASS II DIRECTORS

(Directors with Terms Expiring in 2013)

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CLASS III DIRECTORS

(Directors with Terms Expiring in 2012)

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CORPORATE GOVERNANCE

Board of Directors and Stockholder Meetings.    The Board of Directors met four times during 2010. Each of the directors attended at least 75 percent of the meetings of the Board and the committees of which he or she was a member. The Company expects directors to attend the Annual Meeting of Stockholders unless circumstances impair their ability to do so. All of the Company’s directors attended the 2010 Annual Meeting of Stockholders, in person or telephonically.

Director Independence.    Each year, the Board of Directors reviews the relationships of each director with the Company and with other parties. Only those directors who do not have any of the categorical relationships that preclude them from being independent within the meaning of applicable NASDAQ Stock Market, Inc. Listing Rules (the “NASDAQ Rules”), and who the Board of Directors affirmatively determine have no relationships that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director, are considered to be independent directors. The Board of Directors has adopted Director Independence Standards to use in evaluating the independence of directors. After a review of the relevant information, the Board of Directors has determined that Richard I. Beattie, John A. Fazio, Jane D. Hartley, Jill Kanin-Lovers, Gary E. Knell, Robert E. Knowling, Jr. and V. Paul Unruh are independent directors of the Company within the meaning of applicable NASDAQ Rules and the Company’s Director Independence Standards. You can access the Director Independence Standards in the Company Leadership section of the Company’s website at: http://www.heidrick.com.

Corporate Governance Guidelines.    The Board of Directors has adopted corporate governance guidelines to help it fulfill its responsibilities to the stockholders in overseeing the work of management and the Company’s business results. These guidelines are intended to ensure that the Board of Directors has the necessary authority and procedures in place to review and evaluate the business operations of the Company, as needed, and to make decisions that are independent of management. In addition, the guidelines are intended to align the interests of directors and management with those of the Company’s stockholders. A copy of the Corporate Governance Guidelines is available in the Company Leadership section of the Company’s website at: http://www.heidrick.com.

Board Leadership Structure.    While the Board has not adopted a policy regarding the separation of the positions of Chairman of the Board and Chief Executive Officer, the Board has determined that different individuals should hold those positions in recognition of particular roles and responsibilities of each position. Since September 11, 2006, the Board has been led by an independent Non-Executive Chairman, who is responsible for setting the agendas and presiding over meetings of the Board of Directors (including executive sessions of the independent directors). The Chairman also provides feedback and counsel to the Chief Executive Officer. The Chief Executive Officer’s responsibilities include managing the Company’s day-to-day operations and performance, as well as setting the Company’s strategic goals and objectives. The Board believes that this leadership structure is in the best interests of the Company’s stockholders at this time. The Board does not believe this leadership structure impedes or negatively impacts the effective oversight and management of risk by the Board as discussed below.

Board’s Role in Risk Oversight and Management of Risk.    The Board of Directors has delegated the material elements of its risk oversight and risk management responsibilities to the Audit and Finance Committee of the Board. Comprised of four independent directors, including two qualified financial experts, the Audit and Finance Committee requires that Company management and the Company’s independent auditor regularly report to the Committee regarding matters that may pose current or future risk to the Company. All risks identified are discussed with the entire Board in the ordinary course of the Audit and Finance Committee Chair’s report of Committee activities at regular board meetings.

In 2010, the Audit and Finance Committee, in conjunction with Company Management, further developed the global Enterprise Risk Management (“ERM”) program. The Company’s Risk Oversight Committee created a

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risk profile for Heidrick & Struggles and presented it to the Board of Directors in 2010. Management initiated remediation plans to address certain risks within the profile as agreed upon with the Board. The Company expects that the ERM program will be fully integrated into ongoing management operations in 2011.

Assessment of Risk Related to Compensation Programs.    The Company periodically completes an inventory of its executive and non-executive compensation programs globally, with particular emphasis on incentive compensation plans and programs. Based on this inventory, the Company evaluates the primary components of its compensation plans and practices to identify whether those components, either alone or in combination, properly balances compensation opportunities and risk. The Company also considered the impact of the material weakness in internal controls over financial reporting that the Company reported in its Annual Report on Form 10-K for the year ended December 31, 2010 (“Form 10-K”) as it relates to the Company’s executive and non-executive compensation plans and practices. The material weakness resulted from the Company’s failure to maintain appropriate controls over complete and timely distribution of compensation-related agreements to accounting personnel and sufficient review controls over the recording of financial statement impacts arising from changes in data and assumptions underlying compensation arrangements. The Company has determined that the material weakness does not impact the Company’s fundamental analysis of potential risks to the Company arising from the design of the Company’s compensation programs and the manner in which those programs incentivize risk-taking behavior. Based on the Company’s periodic assessments and the determination described above, the Company has determined that none of its compensation policies and practices is reasonably likely to have a material adverse effect on the Company. The Company believes that the Company’s overall cash versus equity pay mix, balance of shorter-term versus longer-term performance focus, balance of revenue versus profit focused performance measures, stock ownership guidelines, and use of “clawbacks” work together to provide its employees and executives with incentives to deliver outstanding performance to build long-term stockholder value, while taking only necessary and prudent risks.

Board Diversity.    In considering potential director nominees, the Board considers diversity (among other factors it deems appropriate) in light of the overall needs and composition of the Board and the best interests of the Company and its stockholders. In considering nominee diversity, the Board evaluates skills, experience, and background that would complement the existing Board. Over time, the Board has nominated and currently consists of directors that generally reflect the diverse and expansive global footprint of the Company’s business operations, including a diverse range of experiences, as well as diversity of age, gender, race and national origin. Diversity is an important factor that the Nominating and Board Governance Committee will continue to consider when evaluating candidates for nomination to the full Board.

Director Nominating Procedures.    Directors may be nominated by the Board of Directors or by stockholders in accordance with the Company’s Amended and Restated Bylaws. The Nominating and Board Governance Committee reviews all proposed nominees for the Board of Directors, including those proposed by stockholders, in accordance with the mandate contained in its charter. This includes a review of the person’s occupation, experience, time commitments, financial literacy, independence, judgment, understanding of the Company’s business or other related industries, diversity and such other factors as the Nominating and Board Governance Committee determines are relevant in light of the needs of the Board of Directors and the Company. The Nominating and Board Governance Committee selects qualified candidates and reviews its recommendations with the Board of Directors, which determines whether to nominate them for election to the Board of Directors. During 2010, the Nominating and Board Governance Committee did not pay a fee to any third party to assist in the process of identifying or evaluating director candidates; however, the Nominating and Board Governance Committee has previously worked with search consultants from the Company to identify director candidates and would expect to do so in the future.

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Stockholder Recommendations for Nominations.    Stockholders who wish to recommend individuals for consideration by the Nominating and Board Governance Committee to be nominees for election to the Board of Directors may do so by notifying the Company’s Corporate Secretary. In addition, the Company’s Amended and Restated Bylaws permit stockholders to nominate directors at a stockholder meeting. To nominate a director at the 2012 Annual Meeting, a stockholder must notify the Corporate Secretary not less than 60 days, nor more than 90 days, prior to May 26, 2012. Notices should be sent to: Corporate Secretary, Heidrick & Struggles International, Inc., 233 South Wacker Drive, Suite 4200, Chicago, Illinois 60606. In either case, the notice must meet all of the requirements contained in the Company’s Amended and Restated Bylaws. The notice must set forth:

(1) the name, age, business address and residence address of the proposed nominee, the class and number of voting shares of the Company’s capital stock the nominee beneficially owns and any other information relating to the nominee that is required to be disclosed in solicitations for proxies for the election of directors pursuant to Section 14 of the Securities Exchange Act of 1934 and the rules and regulations thereunder; and

(2) as to the stockholder proposing such nominee, that stockholder’s name and address, the class and number of voting shares of the Company’s capital stock the stockholder beneficially owns, a description of all arrangements and understandings between the stockholder and the nominee or any other person (including their names) pursuant to which the nomination is made, a representation that the stockholder intends to appear in person or by proxy at the meeting to nominate the person named in its notice and any other information relating to the stockholder that is required to be disclosed in solicitations for proxies for the election of directors pursuant to Section 14 of the Securities Exchange Act of 1934 and the rules and regulations thereunder.

The notice must also be accompanied by a written consent of the proposed nominee both to being named as a nominee and to serving as a director if elected.

Stockholder Communications.    Stockholders may communicate directly with the Board of Directors. All communications should be directed to: Corporate Secretary, Heidrick & Struggles International, Inc., 233 South Wacker Drive, Suite 4200, Chicago, Illinois 60606. Any such communication should prominently indicate on the outside of the envelope that it is intended for the Board of Directors or a particular director. Each communication intended for the Board of Directors or a particular director and received by the Secretary will be forwarded to the specified party following its clearance through normal security procedures.

Code of Ethics.    The Board of Directors has adopted a Code of Business Conduct that applies to all of the Company’s employees, officers and directors, as well as independent contractors working on behalf of the Company. You can access this Code of Business Conduct “Leading the Way,” in the Company Leadership section of the Company’s website at: http://www.heidrick.com.

EthicsLine.    The Board of Directors has established the Heidrick & Struggles EthicsLine, a service that provides a mechanism for reporting to the Company alleged breaches of any legal or regulatory obligations, financial fraud, including accounting, internal controls and auditing, or any alleged violation of the Company’s Code of Business Conduct or corporate policies.

The EthicsLine is a telephonic reporting hotline, (toll free in the US) available to all Company employees, contractors, vendors, stockholders or other interested parties. The EthicsLine is administered by a third-party company that is separate and independent of Heidrick & Struggles and specializes in running whistleblower hotline programs for companies throughout the U.S. Calls are not recorded and callers may remain anonymous. The EthicsLine is operational 24 hours a day, seven days a week and may be reached at 1-800-735-0589 or, if calling from outside the United States, at +1-704-731-7242.

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COMMITTEES OF THE BOARD OF DIRECTORS

The Board of Directors has a standing Audit and Finance Committee, Human Resources and Compensation Committee, and Nominating and Board Governance Committee. The Board of Directors has determined that all of the directors who serve on these committees are independent within the meaning of the Company’s Director Independence Standards and the applicable NASDAQ Rules, including, in the case of members of the Audit and Finance Committee, the specific independence requirements for audit committees.

The Board of Directors has adopted a charter for each of its three standing committees. You can access these committee charters in the Company Leadership section of the Company’s website at: http://www.heidrick.com.

Audit and Finance Committee.    The Audit and Finance Committee of the Board of Directors consists of four independent directors, Messrs. Fazio, Knowling and Unruh and Ms. Kanin-Lovers. Mr. Fazio is the Chair of the Audit and Finance Committee. The Board of Directors has determined that Messrs. Fazio and Unruh are “audit committee financial experts” as defined in the rules and regulations of the Securities and Exchange Commission (the “SEC Rules”). During 2010, the Audit and Finance Committee met thirteen times.

The Audit and Finance Committee appoints an independent registered public accounting firm annually to audit the Company’s books and records; meets with and reviews the activities and the reports of the Company’s independent registered public accounting firm; and reports the results of the review to the Board of Directors. The Audit and Finance Committee also periodically reviews the adequacy of the Company’s internal controls, pre-approves all services to be provided by the Company’s independent registered public accounting firm, oversees management’s risk policies and discusses the Company’s key risk exposures with management. These and other aspects of the Audit and Finance Committee’s authority are more particularly described in the Audit and Finance Committee Charter.

Nominating and Board Governance Committee.    The Nominating and Board Governance Committee consists of three independent directors, Messrs. Beattie, Knell and Knowling. Mr. Knell is the Chair of the Nominating and Board Governance Committee. Prior to his retirement in November 2010, Mr. Antonio Borges was a member of the Nominating and Board Governance Committee and served as its Chair. The Nominating and Board Governance Committee makes recommendations to the Board of Directors concerning candidates for nomination to the Board of Directors, the membership on committees of the Board of Directors, compensation of the Board of Directors and other corporate governance matters. The Nominating and Board Governance Committee also reviews and approves related party transactions. These and other aspects of the Nominating and Board Governance Committee’s authority are more particularly described in the Nominating and Board Governance Committee Charter. During 2010, the Nominating and Board Governance Committee met five times.

Human Resources and Compensation Committee.    The Human Resources and Compensation Committee consists of three independent directors, Mr. Knell, Ms. Kanin-Lovers and Ms. Hartley. Mr. Borges served as a member of the Human Resources and Compensation Committee prior to his retirement in November 2010. Ms. Kanin-Lovers is the Chair of the Human Resources and Compensation Committee. Each member also qualifies as a “non-employee director” for purposes of Section 16 of the Securities Exchange Act of 1934 and an “outside director” for purposes of Section 162(m) of the Internal Revenue Code. During 2010, the Human Resources and Compensation Committee met eight times.

The Human Resources and Compensation Committee reviews and approves employment and compensation matters involving the Company’s executive officers, as well as those of other key employees that the Committee deems material. Specifically, the Human Resources and Compensation Committee’s responsibilities include:

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The agenda for each meeting of the Human Resources and Compensation Committee is determined by its Chair with the assistance of the Company’s Secretary and Chief Human Resources Officer. The Chief Executive Officer and the Chief Financial Officer regularly attend Human Resources and Compensation Committee meetings. The Human Resources and Compensation Committee also meets in executive session as appropriate. The Chair of the Human Resources and Compensation Committee reports the Committee’s recommendations on executive compensation and other matters to the Board of Directors. Outside advisors and the Company’s Human Resources Department support the Human Resources and Compensation Committee in its duties and the Committee may delegate authority to fulfill certain administrative duties regarding the compensation programs to the Chief Executive Officer and Chief Human Resources Officer. The Human Resources and Compensation Committee has authority under its charter to retain advisors, consultants and agents as it deems necessary to assist in the fulfillment of its responsibilities.

During 2010, the Human Resources and Compensation Committee began an extensive search for an independent compensation advisor to provide a fresh perspective regarding Heidrick & Struggles’ compensation policies and programs. As a result of the initial search process, the Committee chose three independent compensation advisors for final interviews and ultimately selected Pay Governance LLC (“Pay Governance”) in September 2010. The Committee selected Pay Governance primarily based on their experience in the professional services industry, including experience with professional service firms that compete in the human capital and executive search business. Pay Governance representatives participate in Committee meetings and provide independent guidance with respect to executive compensation, director compensation and corporate governance matters.

Prior to September 2010, the Committee retained Mercer U.S., Inc. (“Mercer”) as its compensation advisor. The Committee’s retention of Mercer strictly with respect to executive compensation advisory services ended in April 2010, although Mercer continued to provide various services other than executive compensation consulting during 2010, such as benefits outsourcing and benefits consulting.

During 2010, the Company paid $280,163 in fees to Mercer, of which, $61,224 were fees for services related to executive compensation, with the balance for other services including benefits consulting and non-executive compensation consulting.

HUMAN RESOURCES AND COMPENSATION COMMITTEE INTERLOCKS AND

INSIDER PARTICIPATION

No Human Resources and Compensation Committee member was, during 2010 or at any time prior thereto, an officer or employee of the Company or its subsidiaries. Additionally, there were no Human Resources and Compensation Committee “interlocks” during 2010, which generally means that no executive officer of the Company served as a director or member of the compensation committee of another entity, one of whose executive officers served as a director or member of the Human Resources and Compensation Committee.

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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Executive Summary

Overview.    Heidrick & Struggles is a premier global leadership advisory firm providing executive search and leadership consulting services. We help our clients build leadership teams by facilitating the recruitment, management and deployment of senior executives. In addition to executive search, we provide a range of leadership consulting services to clients. These services include succession planning, talent management, executive assessment and development, transition consulting for newly appointed executives, and human capital integration consulting. We provide our services to a broad range of clients through the expertise of our global consulting workforce located in over 40 countries throughout the world. The market for talented executives, who have the skills and experience to manage a global organization across and within varying business and regulatory environments, is highly competitive. The Human Resources and Compensation Committee of the Board (the “Committee”) looks to ensure that Heidrick & Struggles’ compensation programs are designed to attract and retain these highly qualified executives, while at the same time maintaining a strong link between pay and performance that rewards both the achievement of our strategic goals and long-term stockholder value creation. Our executive compensation philosophy emphasizes and rewards both individual and corporate performance, which we believe promotes sustained long-term performance by rewarding not only the achievement of financial and operational goals, but also the accomplishment of individual strategic objectives that position us for future growth, even if those objectives are not expected to have an impact for several years on our financial results.

Our Business Environment.    Traditionally, our industry is highly dependent on macroeconomic conditions which drive job growth and hiring. In 2010, the competition for consulting talent increased considerably, as we focused on building out our high performance workforce by hiring approximately 60 new consultants to take advantage of a recovering global economy. Our overall repositioning strategy focused primarily on three areas: (1) retaining high performing consultants, attracting top talent from public and private competitors, and developing talent internally to deliver the next generation of partners and principals; (2) continuing to invest and develop Heidrick & Struggles as the premier provider of both leadership and executive search consulting; and, (3) reorganizing the business and management structure away from traditional region and country-based geographies toward a practice-led structure. The organizational structure was reorganized in order to take advantage of market opportunities more effectively, gain additional insight into business practice performance, and further align leadership compensation to business practice performance. This reorganization was successfully completed in 2010, and we believe it will ultimately lead to improved Company performance and increased stockholder value.

2010 Business Results.    In determining executive compensation for 2010, the Committee considered the Company’s growth, operating performance and financial results, achieved in a difficult macroeconomic environment, as well as the on-going efforts to refocus the business on areas that afford greater growth opportunities, higher margins, and the potential for increasing the Company’s market share. Some of our key business results for 2010 were as follows:

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Significant 2010 Compensation Actions.    In light of the economic crisis in 2009 and its impact on our financial results and stock price, the Committee and Company executives took actions to reduce target pay (as detailed below) on a temporary basis for a one year period. In 2010, the Committee removed the temporary target pay reductions due to retention considerations and the performance-based outcomes that would be generated by the Management Incentive Plan bonuses and our long-term incentives, which represents more than 50% of target pay for our executives.

As discussed in detail below, the Committee took the following significant 2010 compensation actions:

Significant 2011 Compensation Actions.    As of the mailing of this proxy statement, the Committee has taken the following significant actions in 2011 with respect to compensation of the named executive officers:

Executive Compensation Philosophy and Objectives

We believe that our executive compensation programs should (i) link pay with performance; (ii) be aligned with stockholders, (iii) support the execution of our business strategy, and (iv) attract, retain, and reward the best talent. To achieve these goals, our executive compensation programs are designed to be:

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Executive Compensation Program Principles

Our Committee uses the following principles to implement our executive compensation philosophy and achieve our executive compensation program objectives:

Setting Executive Compensation

Oversight of Compensation Programs.    The Committee is responsible for overseeing our executive compensation programs. Our Chief Executive Officer and Chief Financial Officer, as well as the other executives included in the Summary Compensation Table on page 26 are referred to as the “named executive officers” throughout this proxy statement. See page 12 of this proxy statement for more information on the role and responsibilities of the Committee concerning executive compensation and related corporate governance.

Role of the Independent Consultant.    As disclosed on page 13 of this proxy statement, the Committee utilized the services of Pay Governance LLC, an independent compensation consultant, to advise it on executive compensation, equity plan design and related corporate governance matters.

Role of Executive Officers in Compensation Decisions.    The Committee approves all compensation decisions for our executive officers. The Chief Executive Officer annually reviews the performance of each of the executive officers (other than the Chief Executive Officer himself, whose performance is reviewed by the Committee with input from the full Board of Directors). Following the performance reviews, and with the assistance of the Chief Human Resources Officer, the Chief Executive Officer presents compensation recommendations to the Committee for consideration. The Committee has full discretion to approve, modify or reject any recommended compensation adjustments or awards made to executive officers.

Use of a Peer Group.    The Committee evaluates our executive compensation programs in comparison to those of a select peer group consisting of fourteen similarly sized public professional services companies. The peer group is used to compare total direct compensation and the mix of compensation elements for each named executive officer against peer group positions with similar responsibilities. The peer group is also used to review executive pay programs and practices in general at those companies.

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For 2010, the peer group consisted of the following companies:

Mercer provided the Committee with an analysis of peer group compensation data to assist the Committee in making informed executive compensation decisions. In setting compensation, the Committee often considers the peer group companies with which we directly compete for executive talent and stockholder investment. The Committee also relies on its general knowledge of executive compensation levels and practices since most of the Company’s executive search and leadership advisory competitors, from which executive talent is often recruited, are privately held and therefore not included in the above list of our public peer group companies and information on them is difficult to obtain.

We do not set a relative percentile positioning for total direct compensation, or the elements of total direct compensation, as a target for executive pay levels. Rather, we review the total direct compensation range for each position and the mix of elements to ensure that compensation is adequate to attract and retain key executive officers. To ensure that compensation is linked to performance, our executive officer compensation program is designed to deliver at least 50% of total direct compensation through variable pay. Our executive officer compensation program is also designed to ensure that a significant proportion of the executive’s compensation is delivered in equity and thus aligned with the interests of our stockholders.

Overview of Executive Officer Compensation Components

Alignment with our executive compensation philosophy is achieved through the three direct compensation components outlined below.

Base Salary.    The objective of base salary is to compensate executives for services rendered during the year in the form of fixed cash compensation. Base salary levels are set to reflect the executive’s role and responsibilities, value to the Company, experience and performance, internal equity and market competitiveness.

Annual Incentives.    The objective of annual incentives is to motivate and reward executives for achieving specific performance goals over a one-year period. Payment is not guaranteed and levels vary according to Company and individual performance. Prior to 2009, annual incentives were paid in cash with up to 20% of the incentive amount deferred in restricted stock unit awards or cash, in each case vesting ratably over three years. This deferral feature was eliminated in 2009 to reduce our equity usage rate and on the basis that the deferred amounts did not provide any meaningful retention given the significantly reduced annual incentive awards for 2009. However, we reinstated the deferral feature in 2010, with 15% of the annual incentive deferred in cash vesting ratably over three years, but without any additional premiums on such deferrals as was done in the past.

Long Term Incentives.    The objective of long-term incentives is to align executive officers’ interests with those of the Company’s stockholders and drive long-term value creation. In addition, they are used to attract, retain and motivate top talent. Long-term incentive awards to executives in a management role are made in the form of Company equity grants. Equity-based long-term incentives also facilitate ownership of Company stock and thus, the achievement of the stock ownership guidelines adopted by the Committee. We also maintain a Performance Stock Unit program which provides additional focus on the achievement of our strategic goals and objectives.

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Base Salary

For each executive officer, base salaries are reviewed against levels for positions with similar responsibilities at the peer companies using comparative data prepared by the Committee’s compensation consultant. The Committee then considers individual performance, internal equity, functional expertise, experience and scope of responsibilities in approving any changes to the base salary.

As a reflection of the continued challenging economic environment, management did not recommend, and the Committee did not approve, any changes to the base salaries for the named executive officers, other than for Messrs. Kim and Beard in connection with their promotions. In connection with his promotion from Co-Global Practice Managing Partner, Financial Services (a consulting role) to Managing Partner, Global Practices (a management role), Mr. Kim’s base salary was increased from $550,000 to $750,000. Mr. Beard received a $210,000 salary for his position as Deputy General Counsel and was paid an additional monthly cash stipend of $7,500 for each month during which he performed the roles of both Deputy General Counsel and Interim General Counsel through November 2010. During this period, we conducted an exhaustive search to fill our General Counsel position. Our search led us to determine that Mr. Beard was the most qualified candidate to fill this role and we appointed him as our General Counsel in November 2010. Upon his appointment, Mr. Beard’s salary was increased to $275,000 and his other elements of compensation were reviewed and adjusted (as further detailed below). Additionally, unlike in 2009, during 2010 the named executive officers did not voluntarily elect to suspend their salary for a one month period.

Annual Incentives

Management Incentive Plan.    Annual incentives for the named executive officers are provided pursuant to our Management Incentive Plan (“MIP”), which was adopted pursuant to the Heidrick & Struggles, Inc. Incentive Plan.

Within a Code Section 162(m) approved formula, the MIP is primarily designed to link an executive officer’s performance to the attainment of specific Company financial and individual performance goals. Generally, each named executive officer has a target incentive opportunity under the MIP equal to 100% of the executive’s base management salary. Please see the Grants of Plan-Based Awards Table on page 27 for details on non-equity incentive plan levels approved by the Committee in 2010 for the named executive officers.

For 2010, the MIP had a financial component (75% weighting) and an individual component (25% weighting). The financial component consisted of an alignment matrix that blended consolidated net revenue goals with consolidated operating margin goals. The payout ranged from 0% to 150% of the target bonus opportunity depending on financial performance; attainment of either financial performance goal at below the threshold level would result in no payment being made pursuant to the matrix, although the Committee still retained the discretion to award a bonus payout.

Our 2010 consolidated net revenue result was $493.1 million and our 2010 consolidated operating income margin was 3.6%, which resulted in the Committee having discretion to determine whether a MIP payout was warranted. The Committee concluded that a payout of 30% of the 75% of the target amount subject to the financial performance component was warranted given the significant performance achieved on consolidated net revenue and that consolidated operating income margin was nearly at threshold.

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In early 2011, prior to the Committee’s determination of MIP bonus payouts, Messrs. Kelly and Kim voluntarily elected to forego any MIP bonus to which they may have been entitled. As lead executives, they believed such action was supportive of and consistent with other broad cost-saving initiatives being undertaken within the Company. Accordingly, the Committee made no MIP determinations with respect to Messrs. Kelly and Kim.

In addition to the performance achieved under the financial component of the MIP awards, the Committee reviewed the 2010 performance of each of the other named executive officers versus the individual strategic and operational goals set for each of them by the Committee in 2010 and applied its discretion, after considering the CEO’s recommendations, to approve 2010 MIP payouts as follows:

Mr. Caldera: The Committee awarded Mr. Caldera a MIP bonus of $134,000 (equal to approximately 41% of his target MIP award) to reflect his efforts in the development and implementation of a global performance management process to better align the Company’s business operations with client needs, the implementation of initiatives to improve the efficiency and cost-effectiveness of Human Resources, Finance and Information Technology functions and payroll administration procedures, the modification of the Company succession plan to reflect its revised organizational model, the successful recruitment of senior executives and the implementation of education platforms designed to align consultants with the Company’s strategy and culture.

Mr. Beard: The Committee awarded Mr. Beard a MIP bonus of $100,000 (equal to approximately 51% of his target MIP award) to reflect his efforts in assuming responsibility for our legal affairs globally as Interim General Counsel and ensuring continuity in the delivery of legal support for a variety of transactions, disputes, business development and people development initiatives. Mr. Beard’s target bonus opportunity was initially set at $110,000 given his role as Deputy General Counsel at the beginning of 2010. As a result of his appointment as our General Counsel, his target bonus opportunity for 2010 was prorated to $55,000 for the period from January 1, 2010 through June 30, 2010 and $137,500 for the remainder of the year.

The Committee did not award any MIP bonus to Mr. Krenz. Additionally, because their resignations occurred prior to the date the MIP bonuses were paid for executives, Mr. Davis and Mr. Blake did not receive a MIP bonus.

Mr. Kim: For 2010, Mr. Kim received no bonus other than a transition bonus. Prior to his promotion on July 1, 2010, Mr. Kim was eligible for a target annual incentive bonus of $500,000 (91% of his base salary) based on the financial performance of the Financial Services practice group and on his individual performance as practice group leader, and he also participated in the Fee and Source of Business Plan (the “FSOB Plan”) (subject to a guaranteed salary and aggregate bonus payment of $1,000,000 for 2010). The FSOB Plan covers all employees in a consultant role and provides a tiered payout based on the revenue credits earned by the consultant for both origination of new business and for execution of client service engagements. In connection with Mr. Kim’s promotion to a management role, this bonus opportunity was prorated for the first half of the year so that he would receive a target bonus based on Financial Services practice group performance of $250,000 (this was also the guaranteed minimum bonus), and he became eligible for MIP participation, with a target opportunity equal to 100% of his salary from July 1, 2010 through December 31, 2010. The Committee also awarded Mr. Kim a transition bonus of $400,000 for his FSOB performance (payable in March 2011 with 15% of the bonus mandatorily deferred and paid ratably over three years). For the same reasons he elected to forego a MIP bonus payment, Mr. Kim also elected to forego any bonus based on the Financial Services practice group performance.

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Long-Term Incentives

The Committee approved certain long-term incentives for the named executive officers that were provided for under our 2007 GlobalShare Program. Our long-term incentive (“LTI”) program for executive officers is designed to:

Prior to 2009, equity awards to executives consisted of nonqualified stock options and restricted stock units (“RSUs”). The Committee decided to replace stock options for executives and alter the long-term incentive mix by adding performance stock units (“PSUs”) in their place (see discussion below). The Committee chose PSUs in order to better link total incentive payout value to the Company’s financial performance as measured by certain key metrics over a span of one to three years. The value of a PSU grant, by the nature and operation of the grant’s variable performance measurement protocol, is not known until the end of the measurement period and the grant actually vests to the executive officer. The linkage between the PSU grant’s ultimate value to the executive officer and Company performance over the span of the measurement period provides additional correlation to, and alignment with, the executive officer’s objective to drive longer-term stockholder value on behalf of the Company.

Prior to 2009, Mr. Kelly had an annual LTI award target of 125% of base salary while each of the other named executive officers has a long-term incentive target opportunity equal to 100% of the executive’s base salary. As noted above, in order to reduce total compensation expense in light of economic conditions, the Committee approved a 30% reduction in the 2009 target equity awards for each named executive officer. For 2010, we reinstated the LTI award targets to pre-2009 levels, reversing the temporary reduction in LTI award targets for 2009 taken to reduce total compensation expense in light of economic conditions. Additionally, the Committee believed this action was appropriate because only a temporary, one-year reduction in LTI target award levels had been implemented by the Committee for 2009 and the Committee recognized the importance of offering market-competitive LTI target levels in attracting and retaining the critical top talent necessary to grow and evolve our business. The LTI targets were based on the Committee’s review of comparative data for each position as provided by Mercer and internal equity considerations, as well as the Chief Executive Officer’s recommendations and a review of individual performance and potential.

For 2010, 50% of the LTI value was delivered in RSUs and 50% was delivered in PSUs to Tier 1 executives. Please see the Grants of Plan-Based Awards Table on page 27 for more details on equity grants that the Committee approved.

Mr. Beard.    Because Mr. Beard was a Tier 2 executive when our 2010 annual equity award grant was made, 100% of his LTI value was delivered in RSUs, consistent with our LTI design for Tier 2 executives. Additionally, Mr. Beard’s 2010 LTI grant was based on his LTI award target prior to his promotion to General Counsel. Mr. Beard also received a promotional RSU award with a value of $100,000.

Mr. Kim.    Prior to his promotion, Mr. Kim had a cash long-term incentive target opportunity of $1,000,000, 50% of which was based on Company-wide performance and 50% of which was based on the Financial Services practice group performance. In connection with his promotion, Mr. Kim forfeited the cash long-term incentive opportunity and in lieu thereof received an LTI award equal to 100% of his base salary, with 50% of the LTI value delivered in PSUs and 50% delivered in RSUs. At that time, Mr. Kim also received a promotional RSU award with a value of $250,000. Earlier, as part of a one-time recognition and retention program, the Committee in May 2010 granted Mr. Kim an RSU award with a value of $200,000.

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Performance Stock Units.    PSUs are granted to Tier I participants (which in March 2010 included all named executive officers except Mr. Beard, who became a Tier I participant in November 2010 in connection with his promotion). The PSUs granted in 2010 are earned based on the level of attainment of Company operating income goals during the three-year period beginning January 1, 2010 compared to our annual operating plan goals for that period. Thus, operating income as used for our PSUs measures how we perform against our operating plan, while operating income as used in our MIP is based on an absolute measurement of operating income achieved. On March 10, 2010, the Committee set the 2010 operating income goal at $22.5M. We did not achieve that level of operating income against our operating plan, and therefore this negatively impacted the PSU accruals for our named executive officers for 2010. Based on the operating income against plan achieved in 2010, the PSU accrual was 55.77% of the target number of PSU shares granted. The Committee will establish future operating income goals in the beginning of 2012 and 2013. After the end of the three-year period, the target number of PSUs will be adjusted based on the average operating income (expressed as a percentage of target operating income) for each annual performance period as follows:

(For performance greater than 100% and less than 125%, or performance less than 100% and greater than 75%, the vesting percentage will be interpolated.) The PSUs as adjusted vest on March 29, 2013.

We decided to implement the above approach to setting performance goals for our PSUs using a three year average performance approach because:

The value of each PSU is based on our closing stock price on the date of grant. All PSUs are credited with dividend equivalents that are payable in cash following the vesting of the underlying PSUs. The primary purpose of crediting dividend equivalents on PSUs is to provide the participant with the same economic benefit received by stockholders over the course of the vesting period, but only to the extent the PSUs vest.

Restricted Stock Units.    RSUs also constitute a key element of our long-term incentive strategy in that they facilitate stock ownership, support the achievement of the stock ownership guidelines and help to retain and motivate executives. RSUs generally vest in equal installments over a three-year period starting on the first anniversary of the date of grant and, upon vesting, convert into shares of Company stock on a one-for-one basis.

The value of each RSU is based on our closing stock price on the date of grant. All outstanding RSUs are credited with dividend equivalents that are payable in cash following the vesting of the underlying RSUs. The primary purpose of crediting dividend equivalents on RSUs is to provide the participant with the same economic benefit as stockholders over the course of the vesting period, but only to the extent the RSUs vest.

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Equity Grant Dates.    On September 10, 2009, the Committee approved six specific 2010 equity grant dates, which were set outside of our stock trading blackout periods. All equity awards made to the named executive officers were granted on one of those six pre-approved dates. All equity awards were approved by the Committee in advance of the predetermined grant dates.

Stock Ownership Guidelines.    To enhance the alignment of executives’ interests with that of stockholders, we maintain stock ownership guidelines that were amended by the Committee on May 24, 2007. Each named executive officer has five years to achieve a stock ownership level equal to a multiple of base management salary. The stock ownership guidelines are as follows:

In determining compliance with these guidelines, we include both direct stock ownership and RSU grants but do not consider PSUs.

As of the mailing of this proxy, each of the named executive officers either satisfied the stock ownership guidelines or was on track to do so within the requisite five-year period.

While we maintain executive stock ownership guidelines, we do not have a policy mandating post-vesting holding period on earned or vested shares.

Perquisites and Other Personal Benefits

We provide executives with the same benefits that are provided to all employees generally, including medical, dental and vision benefits, group term life insurance, and participation in our 401(k) plan. The named executive officers are also reimbursed for expenses incurred for an annual physical examination and for financial planning services (maximum reimbursement for financial planning is $1,080 per year or $3,150 if expenses are incurred for the first time).

Nonqualified Deferred Compensation Plan

Pursuant to our U.S. Employee Deferred Compensation (“EDC”) Plan, each named executive officer (based in the U.S. only) may defer up to 25% of his or her base salary not to exceed $500,000 per year and/or up to 25% of his or her cash incentive compensation not to exceed $500,000 per year. The purpose of the EDC Plan is to facilitate future wealth creation and individual financial planning by deferring payments earned today to the future.

A participant completes an election form at the time he or she enrolls in our EDC Plan and chooses from investment funds offered by Vanguard (the EDC Plan Administrator). We do not contribute to the amount deferred nor do we provide above market rates on the investment funds. A participant is not allowed to invest directly in the Company stock fund. Vanguard calculates the earnings for the funds selected for each participant’s account. A participant makes distribution elections on the enrollment form and can elect to receive his or her distributions on either a date specified in the future (as long as it is at least three years from the effective date that contributions begin) or upon termination. A participant can also elect to receive his or her distributions in either a lump sum or in installments (over five, ten or fifteen years) paid quarterly and/or on a declining balance approach.

As permitted under Internal Revenue Code Section 409A, in 2008 the Committee approved an amendment to the EDC Plan allowing participants a one-time opportunity to change the timing and/or form of distributions. A participant could elect a distribution no earlier than January 1, 2009 (or April 1, 2009 for the deferral of 2008 salary and/or bonus). Mr. Kelly elected to have his outstanding deferred compensation balance distributed on April 1, 2009. None of the named executive officers currently participates in the EDC Plan or participated in the EDC Plan during 2010.

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Other Executive Compensation Arrangements

We have adopted other executive compensation arrangements, including our Change in Control Severance Plan, designed to retain executives in a period of uncertainty; our Management Severance Pay Plan, designed to provide financial assistance to executives following termination of employment; and employment agreements with each named executive officer. The material terms and conditions of these plans and agreements are summarized below.

Change in Control Severance Plan.    We maintain a Change in Control Severance Plan (“CIC Plan”) for our executives, including the named executive officers. The CIC Plan provides severance benefits to the executive if his or her employment is terminated by us without cause, or if he or she terminates employment with us for good reason (as defined in the Plan), within two years of a change in control of the Company (or within six months prior to a change in control of the Company if such termination is effected prior to, but in anticipation of, the change in control). The severance benefits payable to the named executive officers under the CIC Plan, as well as other material terms and conditions, are described in detail under the section of the proxy statement entitled “Potential Payments upon Termination or a Change in Control.”

We believe that the protection and benefits provided by the CIC Plan to our executives are a valuable incentive for attracting and retaining top management, and that in the event of an extraordinary corporate transaction, the CIC Plan could prove crucial to our ability to retain top management through the transaction process. Change in control protection for executives is prevalent in the competitive environment in which we operate. The CIC Plan also contains restrictive covenants that prohibit the executives from competing and soliciting clients and employees for a certain period of time following a termination of employment.

Management Severance Pay Plan.    We maintain a Management Severance Pay Plan (the “Severance Plan”) that provides severance benefits to eligible employees, including the named executive officers. Benefits are paid to an eligible employee who is involuntarily terminated by us for other than cause (as defined in the Plan) and is not offered employment with the Company or a successor to the Company. The severance benefits payable to the named executive officers under the Severance Plan, as well as other material terms and conditions, are described in detail under the section of the proxy statement entitled “Potential Payments Upon Termination or a Change in Control.”

Employment and Separation Agreements

We have employment agreements with each continuing named executive officer. We also entered into a separation agreement with Mr. Blake in connection with the termination of his employment. The material terms and conditions of these agreements are summarized below.

L. Kevin Kelly.    In connection with his appointment as Chief Executive Officer, we entered into an employment agreement with Mr. Kelly dated March 29, 2007. The agreement provides for an annual management salary of $800,000, subject to annual increase (but no decrease), participation in the MIP at Tier I, participation in our equity programs, participation in our benefit plans at the same level as other senior executives and relocation benefits. The agreement also provides severance benefits in the event Mr. Kelly’s employment is terminated by us without cause or by Mr. Kelly for good reason, before or following a change in control (these benefits are in lieu of any benefits paid under the Severance Plan or CIC Plan). The agreement includes one-year post-termination non-solicitation and non-competition restrictions. We entered into an amendment to his employment agreement dated January 9, 2009 to ensure compliance with Internal Revenue Code Section 409A. (Mr. Kelly and the Committee intend to amend the employment agreement to eliminate the excise tax gross-up provisions and to eliminate the “evergreen” provision that automatically renews the term of the agreement.)

Scott J. Krenz.    In connection with his employment as Executive Vice President and Chief Financial Officer, we entered into an employment agreement with Mr. Krenz, dated June 9, 2008. The agreement provides for an annual salary of $375,000, a one-time cash sign-on bonus of $100,000, participation in the MIP at Tier I,

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CIC Plan and Severance Plan at Tier I, and participation in our equity programs and benefit plans at the same level as other senior executives. The agreement contains one-year post-termination non-solicitation and non-competition restrictions. Mr. Krenz announced his retirement on March 1, 2011.

Richard J. Caldera.    In connection with his employment as Executive Vice President and Chief Human Resources Officer, we entered into an employment agreement with Mr. Caldera, dated April 18, 2008. The agreement provides for an annual salary of $325,000, a one-time cash sign-on bonus of $50,000, participation in the MIP at Tier I, CIC Plan and Severance Plan at Tier I, and participation in our equity programs and benefit plans at the same level as other senior executives. The agreement contains one-year post-termination non-solicitation and non-competition restrictions.

Stephen W. Beard.    In connection with his promotion to Executive Vice President, General Counsel and Corporate Secretary, we entered into an employment agreement with Mr. Beard dated February 11, 2011. The agreement provides for an annual management salary of $275,000, subject to annual review (but no decrease), participation in the MIP at Tier I, a target bonus opportunity equal to 100% of base salary, participation in the CIC Plan and Severance Plan at Tier I, participation in our equity programs, and participation in our benefit plans at the same level as other senior executives. The agreement contains one-year post-termination non-solicitation and non-competition restrictions.

S. John Kim.    In connection with his promotion to Managing Partner, Global Practices on July 1, 2010, we entered into an employment agreement with Mr. Kim dated December 13, 2010 (the agreement was subsequently amended on January 11, 2011 to correct typographical errors). The agreement provides for an annual management salary of $750,000, participation in the MIP at Tier I, a target bonus opportunity equal to 100% of base salary, a transition bonus of $400,000 paid in March 2011 (with 15% deferred over three years) which is in lieu of any pre-promotion bonus he would have received under the FSOB Plan, participation in the CIC Plan and Severance Plan at Tier I, participation in our equity programs, and participation in our benefit plans at the same level as other senior executives. The employment agreement provides for transition compensation if Mr. Kim returns to a full-time consulting role with us and for severance benefits equal to a pro-rata bonus payment if he voluntarily terminates employment for good reason. The agreement contains one-year post-termination non-solicitation and non-competition restrictions.

K. Steven Blake.    We entered into an employment agreement with Mr. Blake, Executive Vice President, General Counsel and Secretary, dated June 7, 2005. The agreement provided for an annual salary of $275,000 (subject to annual review), a one-time cash sign-on bonus of $66,750, participation in the MIP, CIC Plan and Severance Plan at Tier I, and participation in our equity programs and benefit plans at the same level as other senior executives. The agreement contains six-month post-termination non-solicitation and non-competition restrictions.

Mr. Blake resigned from the Company on August 31, 2010. Pursuant to a transition and separation agreement between us and Mr. Blake dated August 27, 2010, we made a payment to Mr. Blake on March 1, 2011 in an amount equal to his base salary ($350,000) and target bonus ($350,000), in accordance with the Severance Plan. Mr. Blake also received a pro-rata bonus payment for 2010 of $233,333 and a transition payment of $65,000 as consideration for his execution of a release of claims, and continued health coverage at active employee rates for one year (at which point he may continue such coverage in accordance with COBRA).

Charles G. Davis.    In connection with his promotion to Managing Partner, Global Practices, we entered into a new employment agreement with Mr. Davis, dated January 7, 2009 and effective January 1, 2009. The agreement provides for an annual management salary of $700,000, a one-time $75,000 promotion bonus, a relocation allowance of $225,000 to facilitate his relocation to the U.S., rental assistance in 2009 for temporary housing in Hong Kong (for approximately four months prior to his move to the U.S.), tax preparation assistance, participation in the MIP, CIC Plan and Severance Plan at Tier I, participation in our equity programs, and benefit plans at the same level as other senior executives. The agreement contains one-year post-termination non-solicitation and non-competition restrictions. Mr. Davis resigned from the Company on June 28, 2010.

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Required Dodd-Frank Recoupment of Executive Compensation

We are awaiting the Securities and Exchange Commission’s finalization of the rules regarding the recoupment of executive compensation (i.e., clawbacks) under the Dodd-Frank Wall Street Reform and Consumer Protection Act. Once the final rules and regulations on the required recoupment provisions that must apply to executives’ compensation are available, we will incorporate them into our compensation program as applicable.

Deductibility of Executive Compensation

Section 162(m) of the Internal Revenue Code limits the deduction that a publicly held corporation is allowed for compensation paid to the chief executive officer and the other three most highly compensated executive officers other than the chief financial officer. Amounts in excess of $1 million paid to a covered executive, other than performance-based compensation, cannot be deducted. We consider ways to maximize the deductibility of executive compensation but reserve the right to compensate executive officers in a manner commensurate with performance and the competitive environment for executive talent. As a result, some portion of executive compensation paid to an executive officer whose compensation is subject to the deduction limits described above may not be deductible in the United States. We have taken appropriate steps, including obtaining stockholder approval, to enable stock options and performance-based awards made pursuant to the GlobalShare Program and annual incentives under the MIP to be fully deductible where consistent with our compensation strategy.

HUMAN RESOURCES AND COMPENSATION COMMITTEE REPORT

The Human Resources and Compensation Committee of the Company has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Human Resources and Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement.

THE HUMAN RESOURCES AND COMPENSATION COMMITTEE

Jill Kanin-Lovers (Chair)

Jane D. Hartley

Gary E. Knell

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SUMMARY COMPENSATION TABLE FOR 2010

The table below summarizes the total compensation paid or earned by each of the named executive officers for the fiscal years ended December 31, 2010, December 31, 2009 and December 31, 2008.

The amounts in this column for 2009 reflect total awards under the MIP to the named executive officers, which were paid in cash on March 15, 2010.

The amounts in this column for 2008 reflect total awards under the MIP to Messrs. Kelly, Davis and Blake, 85% of which were paid in cash on March 13, 2009 and the remaining 15% of which (plus a premium of 10%) is paid in cash ratably over three years beginning on February 26, 2010. The non-equity incentives are discussed in further detail starting on page 27.

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GRANTS OF PLAN-BASED AWARDS IN 2010

The table below sets forth certain information with respect to non-equity incentive plan awards that could be earned and equity granted during the fiscal year ended December 31, 2010 for each named executive officer.

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OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2010

The table below includes certain information with respect to stock options and restricted stock units previously awarded to the named executive officers that were outstanding at the fiscal year ended December 31, 2010.