SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
☑ Filed by the Registrant ☑
☐ Filed by a Partyparty other than the Registrant ☐
Check the appropriate box:
☐ Preliminary Proxy Statement
☐ Confidential, for Use of the Commission Only
(as (as permitted by Rule 14a-6(e)(2))
☑ Definitive Proxy Statement
☐ Definitive Additional Materials
☐ Soliciting Material Pursuant tounder §240.14a-12
WD-40 COMPANY
(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)all boxes that apply):
☑ No fee required.required
☐ Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
|
| |
|
| |
|
| |
| ||
|
| |
|
|
☐ Fee paid previously with preliminary materials.materials
☐ Check box if any part of the fee is offset as providedFee computed on table in exhibit required by Item 25(b) per Exchange Act Rule 0-11(a)(2)Rules 14a-6(i)(1) 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.0-11
|
| |
|
| |
|
| |
|
|
WD-40 COMPANY
9715 Businesspark Avenue
San Diego, California 92131
NOTICE OF 2022 ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders:
The 20202022 Annual Meeting of Stockholders (“annual meeting”) of WD-40 Company (“Company”) will be held solely via a live audio webcast at the following virtual location and for the following purposes:
| |||
|
| ||
When: |
| Tuesday, December | |
|
|
| |
|
|
| |
https://meetnow.global/M9Z7T5K | |||
Items of Business: | 1. | To elect a Board of Directors (“Board”) for the ensuing year and until their successors are elected and qualified; | |
| 2. | To hold an advisory vote to approve executive compensation; | |
| 3. | To ratify the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for fiscal year | |
| 4. |
| |
| To consider and act upon such other business as may properly come before the annual meeting. | ||
|
|
| |
Who Can Vote: |
| Only the stockholders of record at the close of business on October | |
|
|
| |
Attending the Virtual Annual Meeting |
|
Please see
|
REVIEW YOUR PROXY STATEMENT AND VOTE IN ONE OF FOUR WAYS:
www.meetingcenter.io/283620136
|
|
| |||
VIA THE INTERNET Visit the website 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 |
|
VIA LIVE VIRTUAL MEETING Attend the | |||
https://meetnow.global/M9Z7T5K | |||||
|
|
| |||
|
| By Order of the Board of Directors,
Phenix Q. Kiamilev Vice President, General Counsel and Corporate Secretary San Diego, California
|
PROXY STATEMENT SUMMARY
We provide below highlights of certain information in this Proxy Statement. As it is only a summary, please refer to the complete Proxy Statement and 20202022 Annual Report before you vote.
20202022 ANNUAL MEETING OF STOCKHOLDERS
|
|
| ||
Date and Time: December |
| Record Date: October
| ||
Virtual Meeting Place:
|
| Meeting Webcast: Available on the Company’s investor relations website at http:/investor.wd40company.com beginning at 10:00 a.m., Pacific |
CORPORATE GOVERNANCE13, 2022
Our Corporate Governance Policies Reflect Best Practices
|
|
|
| |
|
|
|
| |
|
|
|
| |
VOTING MATTERS AND BOARD RECOMMENDATIONS
|
|
|
|
|
Management Proposals: |
| Board’s Recommendation |
| Page |
| FOR all Director Nominees |
| ||
|
|
|
|
|
Advisory Vote to Approve Executive Compensation |
| FOR |
| |
|
|
|
|
|
| FOR |
| ||
|
|
|
|
|
|
|
| ||
|
FAQS AND GENERAL INFORMATION
Q:Why am I receiving these proxy materials?
A: This Proxy Statement is furnished in connection with the solicitation of proxies by the Board of the Company for use at its annual meeting to be held on Tuesday, December 13, 2022, and at any postponements or adjournments thereof.
At the annual meeting, the Company’s stockholders will consider and vote upon (i) the election of the Board for the ensuing year; (ii) an advisory vote to approve compensation for named executive officers (“NEOs”); and (iii) the ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for fiscal year 2023. Detailed information concerning these matters is set forth below. Management knows of no other business to come before the annual meeting.
Q:When and where will the annual meeting be held?
A: In order to provide expanded access to our stockholders, this year’s annual meeting will be a virtual meeting of stockholders conducted exclusively via a live audio webcast, accessible at https://meetnow.global/M9Z7T5K. Although no physical in-person meeting will be held, we designed the format of this year’s annual meeting to ensure that our stockholders of record who attend the annual meeting will be afforded similar rights and opportunities to participate as they would at an in-person meeting.
The annual meeting will begin promptly at 10:00 a.m., Pacific Time, on Tuesday, December 13, 2022. Online access to the audio webcast will open 15 minutes prior to the start of the annual meeting. Stockholders are encouraged to access the annual meeting prior to the start time and allow ample time to log into the audio webcast and test their computer systems.
Q:How can I participate in the virtual annual meeting?
A: The annual meeting will be conducted exclusively by live audio webcast and utilize the latest technology to expand access, improve communication, and save costs for stockholders and the Company. Anyone may enter the annual meeting as a guest in listen-only mode, but only stockholders as of the record date and holders of valid proxies are entitled to vote or ask questions at the annual meeting. To participate in the annual meeting, you will need to review the information included on your notice, on your proxy card or on the instructions that accompanied your proxy materials.
1
EXECUTIVE COMPENSATION PHILOSOPHY AND FRAMEWORK
Compensation Objectives
The Company’s executive compensation program is designed to achieve five primary objectives:
1.Attract, motivate, reward and retain high performing executives;
2.Align the interests and compensation of executives with the value created for stockholders;
3.Create a sense of motivation among executives to achieve both short- and long-term Company objectives;
4.Create a direct, meaningful link between business and team performance and individual accomplishment and rewards; and
5.Ensure our compensation programs are appropriately competitive in the relevant labor markets.
Our Executive Compensation Programs Incorporate Strong Governance Features
|
|
|
| |
|
|
|
| |
|
|
|
| |
|
|
|
|
Say-on-Pay Voting
Since 2011, the Company’s Board of Directors has authorized annual advisory votes for the stockholders to consider and approve the compensation of the Company’s Named Executive Officers (“NEOs”) as disclosed in the Company’s Proxy Statement (“Say-On-Pay” votes).
In 2011, and again at the Company’s 2017 Annual Meeting of Stockholders, the Company’s stockholders were asked to express their preference as to the frequency of Say-on-Pay votes. In each instance, the Company’s stockholders expressed a preference to have Say-on-Pay votes every year.
The Say-on-Pay votes approving NEO compensation for 2011 through 2019 have been approved in each year by more than 95% of the votes cast.
Please see the Compensation Discussion and Analysis section of this Proxy Statement for a detailed description of our executive compensation.
2
GENERAL INFORMATION
|
|
|
|
|
|
|
|
|
3
|
Stockholders of Record If you are a registered stockholder (that is, if you hold your shares through our transfer agent, Computershare), you do not need to register to attend the Stockholders are encouraged to vote and submit proxies in advance of the annual meeting by internet, telephone or mail as early as possible. Beneficial Owners If you hold your shares through an intermediary, such as a bank or broker, you If you would like to attend the annual meeting and do not want to ask questions or vote you If you
•Email: Forward the email from your broker, or attach an image of your legal proxy, to legalproxy@computershare.com. •Mail: Send a copy of the email or correspondence from your broker, or include your legal proxy, to WD-40 Company Legal Proxy, P.O. Box 43001, Providence, RI Upon receipt of your valid legal proxy, Computershare will provide you with a control number by email. Once provided, you can attend and participate in the Whether or not you plan to attend the annual meeting, we urge you to vote and submit your proxy using the methods described the Notice of Internet Availability of Proxy Materials Our | ||||
Q: | What constitutes a quorum in order to hold and transact business at the | ||||
A: | The close of business on October 2
| ||||
Q: | If I hold my shares through a broker, how do I vote? |
A: 4
1The Board has determined that each director nominee (except for Mr. Brass):
(i) | has no material relationship with the Company (either directly or indirectly through an immediate family member or as a partner, stockholder or officer of an organization that has a relationship with the Company), and |
(ii) | is an independent director as defined in the Marketplace Rules of The Nasdaq Stock Market LLC (the “Nasdaq Rules”). |
2If elected, the Board will determine Ms. Burks’ assignment to committees shortly after the 2022 annual meeting concludes.
3The Board determined that Mr. Carter is an “audit committee financial expert” as defined by regulations adopted by the SEC.
4
STEVEN A. BRASS – CEO, President and Director
Steven A. Brass, age 56 was appointed to the Board in March 2022. Mr. Brass was appointed CEO, effective September 2022 and continues to serve as President, a position that he has held since 2019. He joined the Company in 1991 as International Area Manager at the Company’s U.K. subsidiary and has since held several management positions including Country Manager in Germany, Director of Continental Europe, European Sales Director, and European Commercial Director. From 2016 until 2019, Mr. Brass served as Division President, The Americas, and from 2019 to August 2022, as Chief Operating Officer. As CEO and President of the Company, Mr. Brass offers the Board a broad and deep Company-based perspective. In addition, his specific knowledge of the Company’s operations, coupled with his breadth of experience with international markets and our domestic market, provides the Board with valuable insight.
CYNTHIA B. BURKS – Independent Director Nominee
Cynthia B. Burks, age 56, serves as a director and member of the Organization and Compensation Committee of Inspire Medical Systems, Inc. (NYSE: INSP), which she joined in August 2022. In addition, she serves as a board member of two privately held companies: Torch, an educational software company, and Sellars Absorbent Materials, Inc., a manufacturer of absorbents made with recycled fibers, since January 2022 and August 2022, respectively. Ms. Burks also serves on the board of two non-profit organizations: Juma Ventures, which strives to break the cycle of youth poverty, and Summer Search, which mentors and develops youths, since December 2021 and June 2021, respectively. Ms. Burks’ board experience includes serving the Genentech Foundation from 2020 to 2022. From 2019 to 2022, Ms. Burks was a senior vice president and chief people and culture officer at Genentech, Inc., a subsidiary of Roche Holding AG (OTCQX: RHHBY). She served as vice president, head of human resources at Genentech Research and Early Development from 2015 to 2019, and in various human resource management roles at Genentech from 2011 to 2015. From 1999 to 2011, Ms. Burks held human resource and organizational development positions in industries including media, consumer goods and technology. Ms. Burks extensive knowledge of human capital strategy including talent management, succession planning, compensation strategy, designing culture to increase competitive advantage, diversity, equity and inclusion, and organizational design would enhance the Board’s management oversight capabilities.
DANIEL T. CARTER – Independent Director
Daniel T. Carter, age 66, was elected to the Board in 2016 and serves as the Chair of the Audit Committee and as a member of the Finance Committee and the Corporate Governance Committee. Mr. Carter served as executive vice president and chief financial officer of BevMo! Inc. from 2009 until June 2016. Mr. Carter served as chief financial officer of Semtek, Inc. from 2008 to 2009; chief financial officer at Charlotte Russe Holding, Inc. from 1998 to 2007; and chief financial officer of Advanced Marketing Services from 1997 to 1998. From 1986 to 1997, he was employed by Price Club and its follow-on entities, serving as senior vice president for PriceCostco and chief financial officer for Price Enterprises. Mr. Carter began his career as an auditor with Ernst & Young, and he is a Certified Public Accountant (inactive). Mr. Carter is recognized as a NACD Board Leadership Fellow and has earned Harvard’s Corporate Director Certificate. Mr. Carter’s financial expertise, considerable knowledge of the retail industry and financial experience provides the Board with a breadth of relevant skills and experience.
MELISSA CLAASSEN – Independent Director
Melissa Claassen, age 50, was elected to the Board in 2015 and serves as a member of the Compensation Committee and the Finance Committee. Ms. Claassen is vice president finance, emerging markets – adidas Group (XETR: ADS). She served as vice president, brand finance at adidas from 2018 to 2019 and as vice president, business unit finance at adidas from 2015 to 2018. Ms. Claassen served as the chief financial officer of Taylor Made – adidas Golf from 2012 to 2015. From 1996 until 2012, Ms. Claassen held positions at various adidas subsidiaries including chief financial officer of adidas Group Hong Kong and Taiwan, controlling director at adidas Group China, head of marketing controlling, senior financial controller, finance manager, SAP team lead, management accountant, and financial accountant. Ms. Claassen’s extensive knowledge and expertise in the areas of collaboration, finance, accounting, and international business enhance the Board’s management oversight capabilities.
ERIC P. ETCHART – Independent Director
Eric P. Etchart, age 65, was elected to the Board in 2016 and serves as the Chair of the Corporate Governance Committee and as a member of the Finance Committee. Mr. Etchart served as senior vice president of The Manitowoc Company, Inc. from 2007 until his retirement in January 2016. He served as senior vice president, business development, from 2015 to 2016 and as president and general manager of the Manitowoc Crane Group from 2007 to 2015. From 1983 to 2007, Mr. Etchart held various sales, marketing and management positions at subsidiaries and predecessor companies of The Manitowoc Company, Inc. Mr. Etchart is a French national, having held management positions in China, Singapore, Italy, France and the U. S. Mr. Etchart is recognized as a NACD Board Leadership Fellow and recently earned Diligent Climate Leadership Certification, which focuses on climate risk and related business strategy, board-related fiduciary obligations, climate-related government regulations, reporting and disclosure requirements, and investor engagement. He presently serves as a director and as a member of the Audit Committee and the Governance Committee of Graco Inc. (NYSE: GGG) and as a director and member of the Compensation Committee and the Chair of the Nominating / Corporate Governance Committee of Alamo Group Inc. (NYSE: ALG). In addition, Mr. Etchart
5
serves as a director of the UPERIO Group, which sells and rents tower and self-erecting cranes, and chairs its Environmental, Social, and Governance (ESG) Committee. Mr. Etchart’s breadth of international finance, marketing, board and management experience provides important perspective to the Board. His commitment to the highest standards of board leadership, with an emphasis on ESG, demonstrates the Board’s continued commitment to good governance.
LARA L. LEE – Independent Director
Lara L. Lee, age 59, was elected to the Board in 2020 and serves as a member of the Audit Committee and the Compensation Committee. Ms. Lee operates Lara Lee Associates, LLC dba Creative Renewal, which offers governance, consulting, and advisory services. Previously, Ms. Lee served as president of Orchard Supply Hardware, a subsidiary of Lowe’s Companies, Inc. (NYSE: LOW), from 2016 to 2018 and as senior vice president of Lowe’s from 2013 to 2018. From 2011 to 2013 she served as chief innovation and operating officer for Continuum, a global consultancy. She was also a partner at an innovation firm, Jump Associates, from 2007 to 2010. Ms. Lee’s prior experience included 15 years at Harley-Davidson Motor Company as vice president, business unit leader, and in various European and Asian strategy and business development roles, and three years as a financial analyst at Otis Elevator Company based in Singapore. Ms. Lee is NACD Directorship Certified and previously served as a director of Marrone Bio Innovations, Inc. (NASDAQ: MBII) and the board’s designated ESG liaison to management. In addition to serving as a director of two non-profit organizations, Ms. Lee serves as a director of The Sill, Inc, an omnichannel specialty retailer of house plants and related products, and as a director of the parent company of Liberty Safe & Security Products, Inc., which designs and manufactures residential safes. She began her career with Ernst & Whinney (now Ernst & Young LLP) in Washington, D.C. and Singapore. Ms. Lee’s diverse international business and management experience, including expertise in strategic marketing (including digital, e-commerce and channel marketing), brand development, and innovation across industries and international markets, will provide the Board with valuable insights.
EDWARD O. MAGEE, JR. – Independent Director
Edward O. Magee, Jr., age 56, was appointed to the Board in June 2022 and serves as a member of the Audit Committee and the Finance Committee. Since February 2020, Mr. Magee has served as executive vice president, operations at Fender Musical Instruments Corporation (“Fender”), a privately held musical instruments company owned by Servco Pacific Inc. Prior to his current role, he served as senior vice president, operations at Fender from 2016 to 2020. Mr. Magee served as vice president of operations and distribution for Thomas & Betts Corporation (presently ABB Installation Products Inc.) (NYSE: ABB) from 2014 to 2016 and in various management roles in vehicle operations at Harley-Davidson Motor Company from 2009 to 2014. Prior to his executive experience, Mr. Magee served as a combat-decorated Lieutenant Colonel in the U.S. Marine Corps. He has extensive non-profit board experience including the Board of Visitors at Duke University’s Fuqua School of Business, the Fender Play Foundation™, Boys & Girls Clubs of Metro LA, and an advisory role for the National Association of Manufacturers, “Heroes MAKE America” veterans transition program. Mr. Magee’s extensive knowledge of manufacturing, sustainability, supply chain, and logistics as well as his wide-ranging experience building and developing global leadership teams that drive organizational culture change enhance the Board’s management oversight capabilities.
TREVOR I. MIHALIK – Independent Director
Trevor I. Mihalik, age 56, was elected to the Board in 2019 and serves as the Chair of the Finance Committee and as a member of the Audit Committee and the Corporate Governance Committee. Mr. Mihalik has served as executive vice president and chief financial officer of Sempra Energy (NYSE: SRE) (“Sempra”) since May 2018. Mr. Mihalik was senior vice president controller and chief accounting officer of Sempra from 2014 until 2018 and controller and chief accounting officer from 2012 to 2014. Prior to Sempra, Mr. Mihalik held roles as senior vice president – finance for Iberdrola Renewables and vice president and CFO for Chevron Natural Gas. Mr. Mihalik previously served as director of San Diego Gas & Electric Company and Southern California Gas Company, as chairman of the board of Luz del Sur and Chilquinta Energia, and as a director of Infraestructura Energética Nova S.A.B. de C.V., all currently or formerly owned and controlled Sempra subsidiaries. Mr. Mihalik’s currently serves as a director of Oncor Electric Delivery Company LLC, a Sempra subsidiary. Mr. Mihalik’s involvement with significant transactions in addition to his experience with Fortune 500 companies as a seasoned finance executive with accounting and public company financial reporting expertise, and as a director with experience in the oversight of business management and strategic planning, offers the Board valuable judgment and management perspective.
GRACIELA I. MONTEAGUDO – Independent Director
Graciela I. Monteagudo, age 56, was elected to the Board in 2020 and serves as a member of the Audit Committee and the Finance Committee. Ms. Monteagudo served as president and CEO of Lala U.S., Inc. from 2017 to 2018. From 2015 to 2017 she served as president, Americas and global marketing for Mead Johnson Nutrition Company and from 2012 to 2015 she held various leadership roles at Mead Johnson & Company, LLC. From 2008 through 2012, she held various leadership roles at Walmart Mexico, including senior vice president and business unit head for Sam’s Club stores in Mexico. Ms. Monteagudo has dual Mexican and American citizenship and has held senior management positions in both Latin America and the U. S. Ms. Monteagudo is recognized as a NACD Board Leadership Fellow and she has been included in the Women Inc. Magazine Most Influential Corporate Directors list. Ms. Monteagudo presently serves as a director of ACCO Brands Corporation (NYSE: ACCO)
6
and iHeartMedia, Inc. (NASDAQ: IHRT). Ms. Monteagudo’s significant board and leadership experience, including international business experience in Latin America, her extensive global, digital, and retail marketing, e-commerce and consumer goods expertise offers the Board with valuable marketing and consumer products insight.
DAVID B. PENDARVIS – Independent Director
David B. Pendarvis, age 63, was elected to the Board in 2017 and serves as a member of the Audit Committee and the Compensation Committee. Mr. Pendarvis has served as chief administrative officer of ResMed Inc. (“ResMed,” NYSE and ASX: RMD) since 2011 and secretary since 2003. He also serves as a member of the board of directors of ResMed’s subsidiaries and the San Diego Regional Chamber of Commerce. In 2017, he served as interim president, EMEA and Japan of ResMed. He joined ResMed in 2002 as global general counsel and has also served as vice president of organizational development from 2005 to 2011. Before joining ResMed, Mr. Pendarvis was a partner at Gray Cary Ware & Freidenrich LLP (presently, DLA Piper), a partner at Gibson, Dunn & Crutcher, and a law clerk to U.S. District Court Judge, J. Lawrence Irving in the U.S. District Court for the Southern District of California, San Diego. Mr. Pendarvis served as a director of Sequenom, Inc. from 2009 until its acquisition by Laboratory Corporation of America Holdings (NYSE: LH) in 2016. His expertise in corporate governance, compliance, intellectual property and worldwide legal affairs, and experience as general counsel with global responsibilities, including international executive management experience and focus on investor relations and corporate communications, provide the Board with valuable perspective for risk oversight.
GREGORY A. SANDFORT – Lead Independent Director
Gregory A. Sandfort, age 67, was elected to the Board in 2011 and serves as a member of Compensation Committee, Corporate Governance Committee, and Finance Committee. He was designated as lead independent director in October 2020. Mr. Sandfort served as chief executive officer of Tractor Supply Company (“TSC”), which is a distribution channel of the Company’s products, from December 2012 until his retirement in February 2020. At TSC, he also served as president from 2009 to 2015, chief operating officer starting in 2012, chief merchandising officer from 2007 to 2012, and executive vice president from 2007 until he was promoted to president in 2009. Mr. Sandfort previously served as president and chief operating officer at Michael’s Stores, Inc. (“Michaels”) from 2006 to 2007, and as executive vice president-general merchandise manager at Michaels from 2004 to 2006. Mr. Sandfort also serves as the lead independent director on the board of directors of Genesco Inc. (NYSE: GCO), and he is recognized as an NACD Board Leadership Fellow. As a former chief executive officer of TSC with a long-standing connection with consumers of the Company’s products, the Board values Mr. Sandfort’s extensive management experience in, and perspective of, the retail industry.
aNNE g. sAUNDERS – Independent Director
Anne G. Saunders, age 61, was elected to the Board in 2019 and serves as the Chair of the Compensation Committee and as a member of the Corporate Governance Committee. Ms. Saunders served as president, U.S., of nakedwines.com from 2016 through 2017. From 2014 through 2016, she was president, U.S. of FTD Companies, Inc. (NASDAQ: FTD), and from 2012 through 2014, she served as president of Redbox Automated Retail, LLC. From 1990 to 2012, Ms. Saunders held various senior executive level positions at Starbucks Corporation, Bank of America, N.A., Knowledge Universe (presently KinderCare Education), eSociety and AT&T. Ms. Saunders is a director of Swiss Water Decaffeinated Coffee Inc. (TSX: SWP) and chairs its Compensation and Corporate Governance Committee and is the chair of the board of directors of Nautilus, Inc. (NYSE: NLS). Ms. Saunders’ expertise in brand management in significant consumer and retail markets, diverse marketing strategy utilizing digital and e-commerce tools, and product innovation and development as well as her extensive public company board experience, provide valuable experience to the Board.
There are no pending litigation or proceedings involving the Company’s directors or nominees.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” EACH OF THE DIRECTOR NOMINEES SET FORTH ABOVE.
7
ITEM NO. 2
ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION
(“SAY-ON-PAY”)
In accordance with the requirements of Section 14A of the Exchange Act, the Company’s stockholders are being asked to cast an advisory vote to approve the compensation of the Company’s Named Executive Officers (“NEOs”) identified in the Compensation Discussion and Analysis (“CD&A”) section of this Proxy Statement. This vote is commonly referred to as a “Say-on-Pay” vote.
At the Company’s 2011 annual meeting and 2017 annual meeting, the Company’s stockholders were asked, by a non-binding advisory vote, to express their preference as to the frequency of future Say-on-Pay votes. The Board recommended annual Say-on-Pay voting, and the Company’s stockholders approved to have Say-on-Pay votes every year.
Since 2011, the Board has authorized annual advisory votes for the stockholders to consider and approve the compensation of the NEOs. The Say-on-Pay votes approving NEO compensation for 2011 through 2021 have been approved in each year by more than 83% of the votes cast.
The following resolution will be presented for approval by the Company’s stockholders at the 2022 annual meeting:
“RESOLVED, that the stockholders of WD-40 Company (the “Company”) hereby approve the compensation of the Company’s Named Executive Officers as disclosed in the Compensation Discussion and Analysis section of the Company’s proxy statement for the 2022 Annual Meeting of Stockholders and in the accompanying compensation tables and narrative disclosures.”
The advisory vote to approve executive compensation is a non-binding vote on the compensation of the Company’s NEOs. This Proxy Statement contains a description of the compensation provided to the NEOs as required by Item 402 of Regulation S-K promulgated under the Exchange Act.
Stockholders are encouraged to carefully consider the CD&A, accompanying compensation tables and related narrative discussion in this Proxy Statement in considering this advisory vote. The Board believes that the compensation provided to the Company’s NEOs offers a competitive pay package with a proper balance of current and long-term incentives aligned with the interests of the Company’s stockholders.
This is an advisory vote and will not affect compensation previously paid or awarded to the NEOs. While a vote disapproving the NEOs’ executive compensation will not be binding on the Board or the Compensation Committee, the Compensation Committee will consider the results of the advisory vote in making future executive compensation decisions.
The affirmative vote of a majority of the shares present in person or represented by proxy and entitled to vote on the proposal at the annual meeting is required to approve this advisory vote on executive compensation.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” ADOPTION OF THE PROPOSED RESOLUTION FOR APPROVAL OF THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS.
8
ITEM NO. 3
RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of the Board has appointed PricewaterhouseCoopers LLP (“PwC”) as the independent registered public accounting firm (“auditor”) for the Company to audit the consolidated financial statements of the Company for fiscal year 2023. Although ratification by stockholders is not required by law, the Audit Committee has determined that it is desirable to request ratification of this selection by the stockholders. Notwithstanding its selection, the Audit Committee, in its discretion, may appoint a new auditor at any time during the year if the Audit Committee believes that such a change would be in the best interests of the Company and its stockholders. If the stockholders do not ratify the appointment of PwC, the Audit Committee may reconsider its selection.
A majority of the votes of the common stock present or represented at the annual meeting is required for approval. Broker non-votes will be voted in favor of approval. PwC acted as the Company’s auditor during the past fiscal year and, unless the Audit Committee appoints a new auditor, PwC will continue to act in such capacity during the current fiscal year. It is anticipated that a representative of PwC will attend the Annual Meeting, will have an opportunity to make a statement and will be available to respond to appropriate questions.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” RATIFICATION OF THE APPOINTMENT OF PWC AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING AUGUST 31, 2023.
9
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information concerning those stockholders known to the Company to be the beneficial owners of more than 5% of the common stock of the Company and, based on information furnished by them, such stockholders have sole voting and investment power with respect to their shares, except as otherwise noted:
The following table sets forth information concerning those persons known to the Company to be the beneficial owners of more than 5% of the common stock of the Company:
|
|
|
|
|
|
|
|
|
|
Name and Address of Beneficial Owner |
| Amount and |
| Percent of Class |
|
|
|
|
|
Blackrock, Inc. |
| 2,056,348 | 1 | 15.05% |
55 East 52nd Street |
|
|
|
|
New York, NY 10055 |
|
|
|
|
|
|
|
|
|
Vanguard Group, Inc. |
| 1,579,730 | 2 | 11.56% |
P.O. Box 2600 |
|
|
|
|
Valley Forge, PA 19482 |
|
|
|
|
|
|
|
|
|
Neuberger Berman Group LLC |
| 908,618 | 3 | 6.65% |
1290 Avenue of the Americas |
|
|
|
|
New York, NY 10104 |
|
|
|
|
|
|
|
|
|
APG Asset Management N.V. |
| 769,447 | 4 | 5.63% |
1082 MS |
|
|
|
|
Amsterdam, P7 00000 |
|
|
|
|
|
|
|
|
|
|
|
†Based on13,579,926 shares of common stock outstanding as of the close of business on October 17, 2022.
10 The following table sets forth certain information with respect to
*Less than 1%. †Based on 13,579,926 shares of common stock outstanding as of the close of business on October 17, 2022.
12Total includes the rights of directors, director nominee, NEOs, and other executive officers to receive a total of |
|
|
|
|
|
|
6
NOMINEES FOR ELECTION AS DIRECTORS
AND SECURITY OWNERSHIP OF MANAGEMENT
At the Company’s Annual Meeting of Stockholders, the ten nominees named below under the heading, Nominees for Election as Directors, will be presented for election as directors until the next Annual Meeting of Stockholders and until their successors are elected or appointed. In the event any nominee is unable or declines to serve as a director at the time of the Annual Meeting, any proxy granted to vote for such nominee will be voted for a nominee designated by the present Board of Directors to fill such vacancy.
A nominee for election to the Board of Directors will be elected as a director if the votes cast for such nominee’s election exceed the votes cast against such nominee’s election. Holders of common stock are not entitled to cumulate their votes in the election of directors. Withheld votes and broker non-votes are not counted as votes in favor of any nominee.
If an incumbent director nominee fails to receive more votes for his or her election as a director than votes against his or her election, the incumbent director will continue to serve as a director until his or her successor is elected or appointed. However, pursuant to governance guidelines adopted by the Board of Directors, such director nominee will be expected to tender his or her resignation to the Corporate Governance Committee of the Board of Directors. The Corporate Governance Committee will promptly consider such resignation and present a recommendation to the Board of Directors concerning the acceptance or rejection of such resignation for formal action to be taken within 90 days following the Annual Meeting of Stockholders.
Article III, Section 3.2 of the Bylaws of the Company, most recently amended and restated on August 15, 2018, provides that the authorized number of directors of the Company shall not be less than seven nor more than twelve until changed by amendment of the Certificate of Incorporation or by a bylaw duly adopted by the stockholders. The exact number of directors is to be fixed from time to time by a resolution duly adopted by the Board of Directors or by the stockholders.
On June 15, 2020, the Board of Directors voted to increase the number of directors from ten to eleven and elected Graciela I. Monteagudo as a director. On June 15, 2020, the Board of Directors also voted to nominate Lara L. Lee as a director to be elected at the 2020 Annual Meeting of Stockholders. Neal E. Schmale is retiring from the Board of Directors as of the date of the Annual Meeting in accordance with the Company’s Corporate Governance Guidelines. On October 12, 2020, Daniel E. Pittard provided notice of his intention not to stand for re-election at the Annual Meeting and the Board of Directors voted to reduce the number of directors from eleven to ten effective as of the date of the Annual Meeting.
The Board of Directors has determined that each director and nominee other than Garry O. Ridge is an independent director as defined in Rule 5605(a)(2) of the Marketplace Rules of The Nasdaq Stock Market LLC (the “Nasdaq Rules”).
Information concerning the independence of directors serving on committees of the Board of Directors is provided below as to each committee.
7
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following tables set forth certain information, including beneficial ownership of the Company’s common stock, for the current directors and director nominees, for the executive officers named in the Summary Compensation Table below, and for all directors, director nominees and executive officers as a group:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Amount and Nature of | ||
Director/Nominee |
| Age |
| Principal Occupation |
| Director |
| Number |
| Percent of |
Daniel T. Carter |
| 64 |
| Former CFO, BevMo! Inc. |
| 2016 |
| 3,705 | 2 | * |
Melissa Claassen |
| 48 |
| Vice President Finance, Emerging Markets, |
| 2015 |
| 4,845 | 3 | * |
Eric P. Etchart |
| 64 |
| Former Senior Vice President, |
| 2016 |
| 4,136 | 4 | * |
Lara L. Lee |
| 57 |
| Former business unit president, |
| N/A |
| - |
| * |
Trevor I. Mihalik |
| 54 |
| Executive Vice President and CFO, |
| 2019 |
| 938 | 5 | * |
Graciela I. Monteagudo |
| 54 |
| Former President and CEO of Lala U.S., Inc. |
| 2020 |
| 370 | 6 | * |
David B. Pendarvis |
| 61 |
| Chief Administrative Officer, Global General Counsel and Corporate Secretary, ResMed Inc. |
| 2017 |
| 2,304 | 7 | * |
Daniel E. Pittard |
| 70 |
| Former President and CEO, |
| 2016 |
| 4,150 | 8 | * |
Garry O. Ridge |
| 64 |
| CEO and Chairman of the Board, WD-40 Company |
| 1997 |
| 101,202 | 9 | * |
Gregory A. Sandfort |
| 65 |
| Lead Independent Director, WD-40 Company; |
| 2011 |
| 16,926 | 10 | * |
Anne G. Saunders |
| 59 |
| Former President, U.S., nakedwines.com |
| 2019 |
| 764 | 11 | * |
Neal E. Schmale |
| 74 |
| Former President and COO, Sempra Energy |
| 2001 |
| 27,973 | 12 | * |
*Less than one (1) percent.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS (cont’d)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Amount and Nature of | ||
Executive Officer |
| Age |
| Principal Occupation |
|
|
| Number |
| Percent of |
Jay W. Rembolt |
| 69 |
| Vice President, Finance, Treasurer and CFO, |
| 42,101 | 2 | * | ||
Steven A. Brass |
| 54 |
| President and COO, WD-40 Company |
| 6,541 | 3 | * | ||
Richard T. Clampitt |
| 65 |
| Vice President, General Counsel and Corporate Secretary, |
| 8,677 | 4 | * | ||
Patricia Q. Olsem |
| 54 |
| Division President, Americas, WD-40 Company |
|
|
| 2,985 | 5 | * |
All Directors, Director Nominees and Executive Officers as a Group |
| 254,937 | 6 | 1.85% | ||||||
|
|
|
|
|
|
|
|
|
|
|
*Less than one (1) percent.
|
|
|
|
|
|
|
|
|
|
|
|
9
NOMINEES FOR ELECTION AS DIRECTORS
DANIEL T. CARTER – Director
Daniel T. Carter was elected to the Board of Directors in 2016. Mr. Carter served as executive vice president and chief financial officer of BevMo! Inc. from 2009 until June 2016. Mr. Carter served as chief financial officer of Semtek, Inc. from 2008 to 2009; chief financial officer at Charlotte Russe Holding, Inc. from 1998 to 2007; and chief financial officer of Advanced Marketing Services from 1997 to 1998. From 1986 to 1997 he was employed by Price Club and its follow-on entities, serving as senior vice president for PriceCostco and chief financial officer for Price Enterprises. Mr. Carter began his career as an auditor with Ernst & Young, and he is a Certified Public Accountant (inactive). Mr. Carter received his Bachelor of Business Administration degree in accounting from the University of Oklahoma. Mr. Carter is recognized as a NACD Board Leadership Fellow and has earned Harvard’s Corporate Director Certificate. Mr. Carter’s financial expertise, considerable knowledge of the retail industry and non-profit company board experience provide the Board with a breadth of relevant skills and experience.
Skills and Expertise:
11 |
|
|
|
|
|
|
Committees:
|
|
|
|
MELISSA CLAASSEN – Director
Melissa Claassen was elected to the Board of Directors in 2015. Ms. Claassen is vice president finance, emerging markets – adidas Group. She served as vice president, brand finance at adidas from 2018 to 2019 and as vice president, business unit finance at adidas from 2015 to 2018. Ms. Claassen served as the chief financial officer of Taylor Made – adidas Golf from 2012 to 2015. From 1996 until 2012 Ms. Claassen held positions at various adidas subsidiaries including chief financial officer of adidas Group Hong Kong and Taiwan, controlling director at adidas Group China, head of marketing controlling, senior financial controller, finance manager, SAP team lead, management accountant, and financial accountant. Ms. Claassen’s extensive knowledge and expertise in the areas of collaboration, finance, accounting, and international business enhance the Board’s management oversight capabilities.
Skills and Expertise:
|
|
|
|
Committees:
|
|
|
|
ERIC P. ETCHART – Director
Eric P. Etchart was elected to the Board of Directors in 2016. Mr. Etchart served as senior vice president of The Manitowoc Company, Inc. from 2007 until his retirement in January 2016. He served as senior vice president, business development, from 2015 to 2016 and as president and general manager of the Manitowoc Crane Group from 2007 to 2015. From 1983 to 2007, Mr. Etchart held various sales, marketing and management positions at subsidiaries and predecessor companies of The Manitowoc Company, Inc. Mr. Etchart is a French national, having held management positions in China, Singapore, Italy, France and the United States. Mr. Etchart is recognized as a NACD Board Leadership Fellow. He presently serves as a director of Graco Inc. and Alamo Group Inc. Mr. Etchart’s breadth of international finance, marketing and management experience provides important perspective to the Board. His demonstrated commitment to the highest standards of board leadership strengthens the Board’s commitment to good governance.
Skills and Expertise:
|
|
|
|
|
|
Committees:
|
|
|
|
10
LARA L. LEE – Director Nominee
Lara L. Lee served as president of Orchard Supply Hardware, a subsidiary of Lowe’s Companies, Inc., from 2016 to 2018 and as senior vice president of Lowe’s from 2013 to 2018. From 2011 to 2013 she served as chief innovation and operating officer for Continuum, a global consultancy. She was also a partner at an innovation firm, Jump Associates, from 2007 to 2010. Ms. Lee’s prior experience included fifteen years at Harley-Davidson Motor Company as vice president, business unit leader, and in various European and Asian strategy and business development roles, and three years as a financial analyst at Otis Elevator Company based in Singapore. She began her career with Ernst & Whinney (now Ernst & Young) in Washington, D.C. and Singapore. Ms. Lee’s diverse international and management experience, including expertise in strategic marketing and innovation, will provide the Board with valuable insights.
Skills and Expertise:
|
|
|
|
|
|
Committees:
|
|
TREVOR I. MIHALIK – Director
Trevor I. Mihalik was elected to the Board of Directors in 2019. Mr. Mihalik has served as executive vice president and chief financial officer of Sempra Energy since May 2018. Mr. Mihalik was senior vice president controller and chief accounting officer of Sempra Energy from 2014 until 2018 and controller and chief accounting officer from 2012 to 2014. Prior to Sempra Energy, Mr. Mihalik held roles as senior vice president – finance for Iberdrola Renewables and vice president and CFO for Chevron Natural Gas. Mr. Mihalik’s current experience as director of SDG&E and SoCalGas as well as past experience as chairman of the board of Luz del Sur and Chilquinta Energia and as a director of Infraestructura Energética Nova S.A.B. de C.V., and his extensive senior management experience with Fortune 500 companies offers the Board valuable judgment and management perspective.
Skills and Expertise:
|
|
|
|
|
|
Committees:
|
|
|
|
GRACIELA I. MONTEAGUDO – Director
Graciela I. Monteagudo was elected to the Board of Directors on June 15, 2020. Ms. Monteagudo served as president and CEO of Lala U.S., Inc. from 2017 to 2018. From 2015 to 2017 she served as president, Americas and global marketing for Mead Johnson Nutrition and from 2012 to 2015 she held various leadership roles at Mead Johnson. From 2008 through 2012, she held various leadership roles at Walmart Mexico, including senior vice president and business unit head for Sam’s Club stores in Mexico. Ms. Monteagudo has dual Mexican and American citizenship and has held senior management positions in both Latin America and the United States. Ms. Monteagudo is recognized as a NACD Board Leadership Fellow and she has been included in the Women Inc. Magazine Most Influential Corporate Directors list. Ms. Monteagudo presently serves as a director of ACCO Brands Corporation. Ms. Monteagudo’s significant leadership experience in Latin America, her extensive global/digital marketing, e-commerce and consumer goods expertise will provide our board with a valuable perspective.
Skills and Expertise:
|
|
|
|
|
|
Committees:
|
|
|
|
11
DAVID B. PENDARVIS – Director
David B. Pendarvis was elected to the Board of Directors in 2017. Mr. Pendarvis has served as chief administrative officer of ResMed Inc. since 2011. From March through July 2017, he served as interim president, EMEA and Japan of ResMed Inc. He joined ResMed Inc. in 2002 as global general counsel and he has served as secretary since 2003 and he also served as vice president of organizational development from 2005 to 2011. From 2000 until 2002 Mr. Pendarvis was a partner at Gray Cary Ware & Friedenrich (presently, DLA Piper). From 1986 until 2000 he was an associate (1986-1992) and a partner (1993-2000) at Gibson, Dunn & Crutcher, and from 1984 until 1986 he served as a law clerk to United States District Court Judge, J. Lawrence Irving in the United States District Court, San Diego. Mr. Pendarvis served as a director of Sequenom, Inc. from 2009 until its acquisition by Laboratory Corporation of America Holdings in 2016. His legal expertise and experience as general counsel with global responsibilities provides the Board of Directors with valuable perspective for risk oversight.
Skills and Expertise:
|
|
|
|
|
|
Committees:
|
|
|
|
GARRY O. RIDGE – CEO
Garry O. Ridge presently serves as CEO and Chair of the Board of Directors. He joined WD-40 Company in 1987 as managing director, WD-40 Company (Australia) Pty. Limited and he was responsible for Company operations throughout the Pacific and Asia. Mr. Ridge transferred to the corporate office in 1994 as director international operations and was elected vice president - international in 1995. He was elected to the position of executive vice president/chief operating officer in 1996. He was elected to the Board of Directors in 1997 and served as president and CEO from 1997 through June 2019. Prior to joining WD-40 Company Mr. Ridge was managing director of Mermax Pacific Pty. Ltd. and held a number of senior management positions with Hawker Pacific Pty. Ltd. (a Hawker Siddeley PLC Group Company) which was a licensee for WD-40® products until 1988. As the CEO of the Company, Mr. Ridge offers the Board an important Company-based perspective. In addition, his particular knowledge of the Company’s international markets and industry position provides the Board with valuable insight.
Skills and Expertise:
|
|
|
|
|
|
GREGORY A. SANDFORT – Lead Independent Director
Gregory A. Sandfort was elected to the Board of Directors in 2011. He was designated as lead independent director on October 12, 2020. Mr. Sandfort served as chief executive officer of Tractor Supply Company from December 2012 until his retirement in February 2020. He held the office of president of Tractor Supply Company from 2009 through 2015. Prior to 2013, Mr. Sandfort served as president and chief operating officer in 2012 and as president and chief merchandising officer from 2009 to 2012. Mr. Sandfort served as executive vice president-chief merchandising officer of Tractor Supply Company from 2007 to 2009. Mr. Sandfort previously served as president and chief operating officer at Michael’s Stores, Inc. from 2006 to 2007, and as executive vice president-general merchandise manager at Michaels Stores, Inc. from 2004 to 2006. He is recognized as a NACD Board Leadership Fellow. Mr. Sandfort brings a retail industry perspective to the Board. The Board also values Mr. Sandfort’s extensive management experience in the retail industry.
Skills and Expertise:
|
|
|
|
|
To the Company’s knowledge, based solely on review of the copies of such reports furnished to the Company during the last fiscal year and written representations that no other reports were required, except as described below, all Section 16(a) requirements were complied with by all persons required to report with respect to the Company’s equity securities during the last fiscal year. On December 22, 2021, due to a technical filing error, Graciela I. Monteagudo filed a late report on Form 4 to report 332 RSUs granted on December 14, 2021 in connection with her service as a director. BOARD OF DIRECTORS AND CORPORATE GOVERNANCE Our Corporate Governance Policies Reflect Best Practices | ||||||||||||||||||||||||||||||||||||
• • Governance guidelines for independent director leadership, including overboarding policy and other best governance practices Annual performance evaluations for board, committees and directors • • Annual consideration of succession planning for the board, the CEO, and senior management Company prohibits pledging and hedging of Company stock by directors • 11 of 12 director nominees are independent, except for CEO and President • Equity grants received by directors must be held until board service ends |
BOARD LEADERSHIP AND RISK OVERSIGHT
Board Leadership
aNNE g. sAUNDERS – Director
Anne G. Saunders was elected to the Board of Directors in 2019. Ms. Saunders served as president, U.S. of nakedwines.com from 2016 through 2017. From 2014 through 2016, she was president, U.S. of FTD Companies, Inc., and from 2012 through 2014 she served as president of Redbox Automated Retail, LLC. From 1990 to 2012, Ms. Saunders held various senior executive level positions at Starbucks, Bank of America, Knowledge Universe (now known as KinderCare Education), eSociety and AT&T. Ms. Saunders is a director of Swiss Water Decaffeinated Coffee Inc. and Nautilus, Inc. Ms. Saunders’ functional expertise in brand management, leadership and marketing strategy, as well as her extensive public company board experience, provide valuable experience to the Board.
Skills and Expertise:
|
|
|
|
|
|
Committees:
|
|
| Corporate Governance |
13
BOARD LEADERSHIP, RISK OVERSIGHT AND COMPENSATION-RELATED RISK
Corporate Governance Guidelines adopted by the Board of Directors provide, under appropriate circumstances, for the designation of the CEO to serve as board chair and for the designation of a lead independent director to assure the most effective board governance when the CEO is also serving as board chair. On December 10, 2019, Mr. Ridge was designated as board chair and Mr. Schmale was designated to serve as lead independent director. On October 12, 2020, in anticipation of Mr. Schmale’s retirement from the Board as of the 2020 Annual Meeting of Stockholders, the Board designated Mr. Sandfort to serve as lead independent director.
The Board believes that board oversight of and attention to the Company’s current strategic initiatives are best served at this time by having Guidelines provide, under appropriate circumstances, for the designation of the CEO to serve as board chair and for the designation of a lead independent director to assure the most effective board governance when the CEO is also serving as board chair. Prior to 2019, the leadership structure of the Board generally maintained the separation of its principal executive officer and board chair positions. However, since Mr. Ridge, the current Board Chair, has retired as CEO and will not be standing for re-election, the Board decided that board oversight of and attention to the Company’s current strategic initiatives are better served by having a non-executive chair provide primary leadership at meetings of the Board, while assuring independent director oversight of management of the Board through the designation of a lead director. The Board’s determination as to whether having the CEO serve as board chair is in the best interests of the Company is subject to annual review.
The lead director has the following responsibilities and authority:
|
|
|
|
|
|
|
12 Security Act of 1974 plan oversight. The Board and the Committees receive periodic reports from management employees having responsibility for the management of particular areas of risk, including risks related to systems integrity and disaster recovery of primary information |
|
|
|
/corporate-governance/overview. |
|
|
|
|
Risk oversight is undertaken by the Board of Directors as a whole, but various Board Committees are charged with responsibility to review and report on business and management risks included within the purview of each Committee’s responsibilities. The Compensation Committee considers risks associated with the Company’s compensation policies and practices, with particular focus on the cash incentive compensation and equity awards offered to the Company’s executive officers. The Audit Committee considers risks associated with financial reporting and internal control, including ethics and compliance program risks. The Audit Committee also reviews the appropriateness of the Company’s insurance programs. The Finance Committee considers risks associated with the Company’s financial management and investment activities, acquisition-related risks and Employee Retirement Income Security Act of 1974 plan oversight. The Board and the Committees receive periodic reports from management employees having responsibility for the management of particular areas of risk, including risks related to systems integrity and disaster recovery of primary information technology systems, and supply chain risks associated with disruptive events. The CEO is responsible for overall risk management and provides input to the Board of Directors with respect to the Company’s enterprise risk management program and is responsive to the Board in carrying out its risk oversight role.
With respect to compensation-related risk, the Company’s management has undertaken an annual assessment of the Company’s compensation policies and practices and strategic business initiatives to determine whether any of these policies or practices, as well as any compensation plan design features, including those applicable to the executive officers, are reasonably likely to have a material adverse effect on the Company. Based on this review, management has concluded that the Company’s compensation policies and practices are not reasonably likely to have a material adverse effect on the Company. This conclusion is based primarily on the fact that the incentives underlying the Company’s compensation plan design features provide a balance between increased profitability and longer-term stockholder returns. Management has discussed these findings with the Compensation Committee.
BOARD OF DIRECTORS MEETINGS, COMMITTEES AND ANNUAL MEETING ATTENDANCE
The Board of Directors is charged by the stockholders with managing or directing the management of the business affairs and exercising the corporate power of the Company. The Board of Directors relies on the following standing committees to assist in carrying out the Board of Directors’ responsibilities: the Audit Committee, the Compensation Committee, the Corporate Governance Committee, and the Finance Committee. Each of the committees has a written charter approved by the Board of Directors and such charters can be found on WD-40 Company’s website at http://investor.wd40company.com within the “Corporate Governance” section. There were five meetings of the Board of Directors during the last fiscal year. Each director serving for the full fiscal year attended at least 75 percent of the aggregate of the total number of meetings of the Board and of all committees on which the director served. The Board of Directors holds an annual organizational meeting on the date of the Annual Meeting of Stockholders. All directors are expected to attend the Annual Meeting. At the last Annual Meeting of Stockholders, all of the prior year nominee directors were present.
14
BOARD OF DIRECTORS COMPENSATION
Director compensation is set by the Board of Directors upon the recommendation of the Corporate Governance Committee. The Corporate Governance Committee conducts an annual review of non-employee director compensation, including consideration of a survey of director compensation for the same peer group of companies used by the Compensation Committee for the assessment of executive compensation. For fiscal year 2020, non-employee directors received compensation for services as directors pursuant to the Directors’ Compensation Policy and Election Plan (the “Director Compensation Policy”) adopted by the Board of Directors on October 7, 2019. Pursuant to the Director Compensation Policy, non-employee directors received a base annual fee of $54,000 for services provided from January 1, 2020 through the date of the Company’s 2020 Annual Meeting of Stockholders. The lead independent director received an additional annual fee of $22,000. Non-employee directors received additional cash compensation for service on various Board Committees. The Chair of the Audit Committee received $16,000 and each other member of the Audit Committee received $8,000. The Chair of the Compensation Committee received $10,000 and each other member of the Compensation Committee received $4,000. Each Chair of the Corporate Governance Committee and the Finance Committee received $8,000 and each other member of those committees received $4,000. All such annual fees were paid in March 2020, with the exception of fees paid to Ms. Monteagudo. As a newly elected director, as of June 15, 2020, Ms. Monteagudo received a base annual fee of $40,500 and the sum of $4,000 in fees for service on the Audit Committee and the sum of $2,000 in fees for service on the Corporate Governance Committee through the date of the Company’s 2020 Annual Meeting of Stockholders.
At the Company’s 2016 Annual Meeting of Stockholders, the Company’s stockholders approved the WD-40 Company 2016 Stock Incentive Plan (the “Stock Incentive Plan”) to authorize the issuance of stock-based compensation awards to employees as well as to directors and consultants. For services provided for the period from the date of the Company’s 2019 Annual Meeting of Stockholders to the next annual meeting, the Director Compensation Policy provided for the grant of restricted stock unit (“RSU”) awards having a grant date value of $70,000 to each non-employee director. Each RSU represents the right to receive one share of the Company’s common stock. On December 10, 2019, each non-employee director other than Ms. Monteagudo received a non-elective RSU award covering 359 shares of the Company’s common stock. On June 15, 2020, Ms. Monteagudo received an RSU award covering 370 shares of the Company’s common stock. Additional information regarding the RSU awards is provided in a footnote to the Director Compensation table below.
Each non-employee director was also permitted to elect to receive an RSU award in lieu of all or a portion of his or her base annual fee for service as a director as specified above. The number of shares of the Company’s common stock subject to each such RSU award granted to the non-employee directors equaled the elective portion of his or her base annual fee payable in RSUs divided by the fair market value of the Company’s common stock as of the date of grant.
RSU awards granted to non-employee directors pursuant to the Director Compensation Policy are subject to Award Agreements under the Stock Incentive Plan. All RSU awards granted to non-employee directors are fully vested and are settled in shares of the Company’s common stock upon termination of the director’s service as a director of the Company.
The Company also maintains a Director Contributions Fund from which each incumbent non-employee director has the right, at a specified time each fiscal year, to designate $6,000 in charitable contributions to be made by the Company to properly qualified (under Internal Revenue Code Section 501(c)(3)) charitable organizations.
15
DIRECTOR COMPENSATION TABLE - FISCAL YEAR 2020
The following Director Compensation table provides information concerning director compensation earned by each non-employee director for services rendered in fiscal year 2020. Since the annual base fee and fees for service on Committees are payable for services provided to the Company from January 1st of the fiscal year until the next annual meeting of stockholders, such compensation is reported for purposes of the Director Compensation table on a weighted basis. For fiscal year 2020, one third of the reported compensation earned or paid in cash is based on the Director Compensation Policy in effect for calendar year 2019 and two thirds of the reported compensation earned or paid in cash is based on the Director Compensation Policy in effect for calendar year 2020. Amounts earned and reported in the Director Compensation table for Fees Earned or Paid in Cash for the fiscal year for each director are dependent upon the various committees on which each director served as a member or as chair during the fiscal year.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name |
| Fees Earned or Paid in Cash |
| Stock Awards |
| All Other |
| Total |
Daniel T. Carter |
| $ 74,000 |
| $ 69,919 |
| $ 6,000 |
| $ 149,919 |
Melissa Claassen |
| $ 66,000 |
| $ 69,919 |
| $ 6,000 |
| $ 141,919 |
Eric P. Etchart |
| $ 66,000 |
| $ 69,919 |
| $ 6,000 |
| $ 141,919 |
Trevor I. Mihalik |
| $ 45,333 |
| $ 69,919 |
| $ 6,000 |
| $ 121,252 |
Graciela I. Monteagudo |
| $ 24,500 |
| $ 69,949 |
| $ 6,000 |
| $ 100,449 |
David B. Pendarvis |
| $ 62,000 |
| $ 69,919 |
| $ 6,000 |
| $ 137,919 |
Daniel E. Pittard |
| $ 66,000 |
| $ 69,919 |
| $ 6,000 |
| $ 141,919 |
Gregory A. Sandfort |
| $ 68,000 |
| $ 69,919 |
| $ 6,000 |
| $ 143,919 |
Anne G. Saunders |
| $ 66,000 |
| $ 69,919 |
| $ 6,000 |
| $ 141,919 |
Neal E. Schmale |
| $ 92,000 |
| $ 69,919 |
| $ 6,000 |
| $ 167,919 |
|
|
|
|
|
|
|
|
|
|
EQUITY HOLDING REQUIREMENT FOR DIRECTORS All RSU awards to non-employee directors, including both non-elective grants and RSU awards granted pursuant to the annual elections |
|
INSIDER TRADING POLICY - PROHIBITED HEDGING TRANSACTIONS The The insider trading policy also includes a prohibition on certain hedging and transactions involving the potential for abuse. Pursuant to the insider trading policy, covered officers, directors and employees may not engage in the following transactions involving the Company’s publicly traded securities:
13 STOCKHOLDER COMMUNICATIONS WITH THE BOARD Stockholders may send communications to the Board by submitting a letter addressed to: WD-40 Company, Corporate Secretary, 9715 Businesspark Avenue, San Diego, CA 92131. The Board has instructed the Corporate Secretary to review and forward such communications to the Board Chair. The Board has also instructed the Corporate Secretary to exercise his or her discretion, to not forward to the Board Chair any communication which is deemed of a commercial or frivolous nature or inappropriate for consideration by the Board. The Corporate Secretary may also forward the stockholder communication within the Company to another department to facilitate an appropriate response. Compensation for non-employee directors is set by the Board upon the recommendation of the Corporate Governance Committee. The Corporate Governance Committee conducts a biennial review of non-employee director compensation, including consideration of a survey of director compensation for the same peer group of companies used by the Compensation Committee for the assessment of executive compensation. For fiscal year 2022, non-employee directors received compensation for services as directors pursuant to the Directors’ Compensation Policy and Election Plan (the “Director Compensation Policy”) adopted by the Board on October 12, 2021. Pursuant to the Director Compensation Policy, non-employee directors received a base annual fee of $60,000. The lead independent director received additional annual compensation of $24,000. Non-employee directors received additional cash compensation for service on various Board Committees. The Chair of the Audit Committee received $18,000 and each other member of the Audit Committee received $10,000. The Chair of the Compensation Committee received $12,000 and each other member of the Compensation Committee received $5,000. Each Chair of the Corporate Governance Committee and the Finance Committee received $10,000 and each other member of those committees received $5,000. All such annual fees were paid in March 2022. At the Company’s 2016 annual meeting, the Company’s stockholders approved the WD-40 Company 2016 Stock Incentive Plan (the “2016 Stock Incentive Plan”) to authorize the issuance of stock-based compensation awards to employees as well as to directors and consultants. The Director Compensation Policy provides for an annual grant Each non-employee director was also permitted to elect to receive an RSU award in lieu of all or a portion of his or her base annual fee for service as a RSU awards granted to non-employee directors pursuant to the Director Compensation Policy are subject to Award Agreements under the 2016 Stock Incentive Plan. Such RSU awards are fully vested, entitled to dividend |
|
DIRECTOR COMPENSATION TABLE - FISCAL YEAR 2022 The following Director Compensation table provides information concerning compensation earned by each non-employee director for services rendered in fiscal year 2022. Amounts reported in the following table under Fees Earned or Paid in Cash for each director are dependent upon the various committees on which each director served as a member or as chair during the fiscal year and whether the director served as the lead independent director. 14
CORPORATE GOVERNANCE COMMITTEE The Corporate Governance Committee is comprised of Eric P. Etchart (Chair), Daniel T. Carter, Trevor I. Mihalik, Gregory A. Sandfort and Anne G. Saunders, each of whom is an independent director as defined under the Nasdaq Rules. The Corporate Governance Committee also functions as the Company’s nominating committee. The Corporate Governance Committee met four times during the last fiscal year. Nomination Policies and Procedures The Corporate Governance Committee acts in conjunction with the Board to ensure that a regular evaluation is conducted of succession plans, performance, independence, and of the qualifications and integrity of the Board. The Corporate Governance Committee also reviews the applicable skills and characteristics required of nominees for election as directors. The objective is to balance the composition of the Board to achieve a combination of individuals of different backgrounds and experiences as described more fully below. Although the Board has not established any specific diversity criteria for the selection of nominees other than the general composition criteria noted below, the current Board composition includes four female directors (1/3 of the Board), one of whom chairs a Board committee, one African-American, one Hispanic, and six non-U.S. directors (1/2 of the Board). The Corporate Governance Committee also oversees an annual process of self-evaluation conducted by each committee of the Board and for the Board as a whole, which includes a board evaluation, individual self-evaluations and peer evaluations. In determining whether to recommend a director for re-election, the Corporate Governance Committee considers the director’s past attendance at meetings, results of evaluations and the director’s participation in and anticipated future contributions to the |
EQUITY HOLDING REQUIREMENT FOR DIRECTORS
All RSU awards to non-employee directors, including both non-elective grants and RSU awards granted pursuant to the annual elections of the directors to receive RSUs in lieu of all or part of their base annual fee, provide for immediate vesting but will not be settled in shares of the Company’s common stock until termination of each director’s service as a director. The number of shares to be issued to each non-employee director upon termination of service is disclosed in the footnotes to the table under the heading, Security Ownership of Directors and Executive Officers.
15 s Director Audit Compensation Corporate Finance Daniel T. Carter Chair ✓ Melissa Claassen ✓ ✓ Eric P. Etchart Chair ✓ Graciela I. Monteagudo ✓ ✓ Trevor I. Mihalik ✓ ✓ Chair David B. Pendarvis ✓ ✓ Daniel E. Pittard ✓ ✓ Gregory A. Sandfort Chair ✓ Anne G. Saunders ✓ ✓ Neal E. Schmale ✓ ✓ ✓ Number of Meetings Held in Fiscal Year 2020 5 3 5 5 The Corporate Governance Committee reviews new Board nominees through a series of internal discussions, reviewing available information, and interviewing selected candidates. Generally, candidates for nomination to the Board have been identified and compiled in a database through director networking resources and professional organizations or suggested by individual directors or employees. The Company does not currently employ a search firm or third party in connection with seeking or evaluating candidates. The Corporate Governance Committee considers director recruitment and succession planning for the Board at each quarterly meeting. This review entails consideration of various factors that the Corporate Governance Committee believes to be relevant to ensure that the Board maintains a level of diversity and experience that is appropriate for its oversight and governance responsibilities. The Corporate Governance Committee The following list of specific skills are among the areas of expertise and experience that the Corporate Governance Committee believes will best serve the Company. The list is updated from time to time and each director’s skills in these areas are graded on a scale to assess the level of competence in each area that is available to the Board as a whole. The table below presents those areas in which the Board has determined that individual directors have deep or knowledgeable level of expertise only, and individual directors who are only familiar with those areas are not captured on the table. This information will assist the Board in identifying areas of strengths and weaknesses and will guide the Board on formulating the applicable skills and characteristics of future nominees. DIRECTOR NOMINEES Skills and Steven A. Brass Cynthia B. Burks Daniel T. Carter Melissa Claassen Eric P. Etchart Lara L. Lee Edward O. Magee, Jr. Trevor I. Mihalik Graciela I. Monteagudo David B. Pendarvis Gregory A. Sandfort Anne G. Saunders Finance X X X X X X Legal, Regulatory, Compliance X X Leadership, Human Capital, Exec. Comp X X X X X X X X X Industry: Consumer / Retail Markets X X X X X X Omni-Channel Marketing; Digital X X X X X International / Global Business X X X X X X X X IT / Cybersecurity X Operations X X X X X Innovation X X X ESG X X X 16 BOARD DIVERSITY MATRIX (as of October 17, 2022) Total Number of Directors: 12 Female Male Non-Binary Did Not Disclose Gender Part I: Gender Identity 4 8 Part II: Demographic Background African American or Black 1 Alaskan Native or Native American Asian Hispanic or Latinx 1 Native Hawaiian or Pacific Islander White 3 7 Two or More Races or Ethnicities LGBTQ+ Did Not Disclose Demographic Background Part III: Non-U.S. Directors (Born Outside the U.S.) 2 4 The Corporate Governance Committee will consider director candidates recommended by security holders under the same criteria as other candidates described above. Nominations may be submitted by letter addressed to: WD-40 Company Corporate Governance Committee, Attn: Corporate Secretary, 9715 Businesspark Avenue, San Diego, California 92131. Nominations by security holders must be submitted in accordance with the requirements of the Company’s Bylaws, including submission of such nominations within the time required for submission of shareholder proposals as set forth below under the heading, Stockholder Proposals. The Audit Committee is comprised of Daniel T. Carter (Chair), Lara L. Lee, Edward O. Magee, Jr., Trevor I. Mihalik, Graciela I. Monteagudo and David Pendarvis, each of whom are independent directors as defined under the Nasdaq Rules. Five meetings of the Audit Committee were held during the last fiscal year to review quarterly financial reports, to consider the annual audit and other audit services, to review the audit with the independent registered public accounting firm after its completion and to fulfill other responsibilities provided for in the Audit Committee’s Charter. The Board has determined that Mr. Carter is an “audit committee financial expert” as defined by regulations adopted by the SEC. Each member of the Audit Committee also satisfies the requirements for service on the Audit Committee as set forth in Rule 5605(c)(2) of the Nasdaq Rules. The Finance Committee is comprised of Trevor I. Mihalik (Chair), Daniel T. Carter, Melissa Claassen, Eric P. Etchart, Edward O. Magee, Jr., Graciela I. Monteagudo and Gregory A. Sandfort, each of whom is an independent director as defined under the Nasdaq Rules. Five meetings of the Finance Committee were held during the last fiscal year. The Finance Committee is appointed by the Board for the primary purpose of assisting the Board in overseeing financial matters of importance to the Company, including matters relating to acquisitions, investment policy, capital structure, and dividend policy. The Finance Committee also reviews the Company’s annual and long-term financial strategies and objectives. The Compensation Committee is comprised of Anne G. Saunders (Chair), Melissa Claassen, Lara L. Lee, David B. Pendarvis and Gregory A. Sandfort, all of whom are independent directors as defined under the Nasdaq Rules. The Compensation Committee met four times during the last fiscal year. The Compensation Committee is appointed by the Board for the primary purpose of assisting the Board in matters relating to compensation and benefits of the Company’s executive officers, including management succession. The Committee is also responsible for establishing the overall compensation strategy for the Company. 17 Compensation Committee Interlocks and Insider Participation During the fiscal year ended August 31, ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT The Company is In fiscal year 2018, the Company established a cross-regional, cross-functional ESG Project Team to formally address In fiscal year 2019, the ESG Project Team completed an ESG Materiality Assessment to In fiscal year 2020, the ESG Project Team In fiscal year 2021, the The results on these objectives are included in the Company’s The following table sets forth the names, ages, and current titles of the Company’s executive officers as of August 31, 2022: Name Age Title Garry O. Ridge 65 Chief Executive Officer (“CEO”) and Chairman of the Board Steven A. Brass 56 President and Chief Operating Officer; Director Jay W. Rembolt 71 Vice President, Finance, Treasurer and Chief Financial Officer Patricia Q. Olsem 55 Division President, The Americas William B. Noble 64 Managing Director, EMEA Geoffrey J. Holdsworth 60 Managing Director, Asia-Pacific Jeffrey G. Lindeman 59 Vice President, Global Organizational Development and Chief Human Resources Officer Phenix Q. Kiamilev 43 Vice President, General Counsel and Corporate Secretary Mr. Ridge joined the Company’s Australian subsidiary, WD-40 Company (Australia) Pty. Limited (“WD-40 (Australia)”), in 1987 as Managing Director. He held several senior management positions prior to his appointment as CEO, President, and Chairman of the Board in 1997. Mr. Ridge served as President until 2019 and retired as CEO, effective August 31, 2022. Upon his retirement from the Board as Executive Chairman at the 2022 annual meeting, he will serve an honorary role as Chairman Emeritus. Mr. Brass joined the Company in 1991 as International Area Manager at the Company’s U.K. subsidiary and has since held several management positions including Country Manager in Germany, Director of Continental Europe, European Sales Director, and European Commercial Director. He then served as Division President, The Americas, from 2016 until 2019, when he was promoted to his President and Chief Operating Officer. In March 2022, Mr. Brass was appointed to the Board and, effective September 1, 2022, Mr. Brass serves as CEO and President. Mr. Rembolt joined the Company in 1997 as Manager of Financial Services. He was promoted to Controller in 1999 and to Vice President, Finance/Controller in 2001. He was then named Vice President, Finance, Treasurer, and Chief Financial Officer in 2008 and served until his retirement, effective October 31, 2022, from such positions. Ms. Olsem joined the Company in 2005 and has held various senior management positions including, Vice President Americas Innovation Development Group, Senior Vice President Marketing and Innovation of the Americas, and Senior Vice President and General Manager of the U. S. She was promoted to her current position as Division President, The Americas in 2019. Mr. Noble joined the Company’s Australian subsidiary, WD-40 (Australia), in 1993 as International Marketing Manager for the Asia Region. He was then promoted to his current position of Managing Director, EMEA and as a Director of the Company’s U.K. subsidiary, WD-40 Company Limited, in 1996. Mr. Holdsworth joined the Company’s Australian subsidiary, WD-40 (Australia), in 1996 as General Manager and was promoted to his current position of Managing Director, Asia-Pacific and as a Director of WD-40 (Australia) in 1997. Mr. Lindeman serves as the Company’s Chief Human Resources Officer and was named Vice President, Global Organizational Development in December 2020. He joined the Company in 2016 and has held management positions within the Company’s EMEA segment, including director of human resources, information technology, supply chain and finance. Prior to joining the Company, Mr. Lindeman worked as the senior director of talent and engagement for San Diego International Airport from 2006 to 2016. Ms. Kiamilev joined the Company in May 2021 as Vice President, Legal, and was appointed General Counsel and Corporate Secretary in December 2021. From 2019 to 2021, Ms. Kiamilev served as Vice President, Legal, and General Counsel of Kyriba Corp. and held other legal roles from 2014 to 2019. Ms. Kiamilev also served as in-house counsel for Active Network, LLC after practicing law at Luce, Forward, Hamilton & Scripps LLP (currently Dentons US LLP). All executive officers hold office at the discretion of the Board. There are no family relationships between any executive officer and any member of the Board. There are no pending litigation or proceedings involving the Company’s officers. COMPENSATION DISCUSSION AND ANALYSIS16STOCKHOLDER COMMUNICATIONS WITH BOARD OF DIRECTORSStockholders may send communications to the Board of Directors by submitting a letter addressed to: WD-40 Company, Corporate Secretary, 9715 Businesspark Avenue, San Diego, CA 92131. The Board of Directors has instructed the Corporate Secretary to forward such communications to the Board Chair. The Board of Directors has also instructed the Corporate Secretary to review such correspondence and, at the Corporate Secretary’s discretion, to not forward correspondence which is deemed of a commercial or frivolous nature or inappropriate for consideration by the Board of Directors. The Corporate Secretary may also forward the stockholder communication within the Company to another department to facilitate an appropriate response.COMMITTEES (membership as of October 12, 2020)
GovernanceCORPORATE GOVERNANCE COMMITTEENomination Policies and Procedures is comprised of Eric P. Etchart (Chair), Graciela I. Monteagudo, Trevor I. Mihalik and Daniel E. Pittard. The Corporate Governance Committee also functions as the Company’s nominating committee and is comprised exclusively of independent directors as defined in the Nasdaq Rules. The Corporate Governance Committee met five times during the last fiscal year.The Corporate Governance Committee acts in conjunction with the Board of Directors to ensure that a regular evaluation is conducted of succession plans, performance, independence, and of the qualifications and integrity of the Board of Directors. The Corporate Governance Committee also reviews the applicable skills and characteristics required of nominees for election as directors. The objective is to balance the composition of the Board of Directors to achieve a combination of individuals of different backgrounds and experiences as describe more fully below. The Board of Directors has not established any specific diversity criteria for the selection of nominees other than the general composition criteria noted below. The Corporate Governance Committee also oversees an annual process of self-evaluation conducted by each committee of the Board and for the Board as a whole, which includes a board evaluation, individual self-evaluations and peer evaluations.In determining whether to recommend a director for re-election, the Corporate Governance Committee considers the director’s past attendance at meetings, results of evaluations and the director’s participation in and anticipated future contributions to the Board of Directors. A director who will have reached the age of 72 prior to the date of the next annual meeting of stockholders will be expected to retire from the Board. However, the Board may re-nominate any director for up to three additional years if relevant circumstances warrant continued service.The Corporate Governance Committee reviews new Board of Director nominees through a series of internal discussions, reviewing available information, and interviewing selected candidates. Generally, candidates for nomination to the Board of Directors have been identified and compiled in a database through director networking resources and professional organizations or suggested by individual directors or employees. The Company does not currently employ a search firm or third party in connection with seeking or evaluating candidates.The Corporate Governance Committee considers director recruitment and succession planning for the Board at each quarterly meeting. This review entails consideration of various factors that the Committee believes to be relevant to assurance that the Board maintains a level of diversity and experience that is appropriate for its oversight and governance responsibilities. In addition to age and the tenure of each director on the WD-40 Company Board, the committee considers the extent of each director’s experience in senior leadership roles and as directors on other public company boards, including service on committees and as committee or board chairs, in addition to age and the tenure of each director on the Board. Beyond a baseline expectation that directors and director nominees will share the Company values and have demonstrated an ability to promote and sustain a strong corporate culture, the Board endeavors to ensure that the mix of skills among existing directors is appropriate for the evolving business of the Company. To emphasize the importance of continuing education, directors are reimbursed for expenses incurred in connection with attending continuing education programs and conferences and acquiring certain certifications to assist them in remaining abreast of developments in critical issues relating to the operation of public company boards, including environmental, social, and corporate governance.
Experiencedirector’s experience in management and as directors on other public company boards, if applicable, including service on committees and as committee or board chairs. In addition to a baseline expectation that directors and director candidates will share WD-40 Company values and have demonstrated an ability to promote and sustain a strong corporate culture, the Board endeavors to assure that the mix of skills among existing directors is appropriate for the evolving business of the Company. The following list of specific skills are presently included among the areas of expertise and experience that the Committee believes will best serve the Company. The list is updated from time to time and each director’s skills in these areas are graded on a scale to assess the level of competence in each area that is available to the Board as a whole.·Financial Expertise·Legal Expertise·Organizational Development Expertise·Compensation Design Expertise·Consumer or Retail Market Expertise·Business-to-Business Sales and Marketing Expertise·Digital/Internet/E-Commerce Expertise·Experience in Americas Markets and Cultures (Canada and Latin America)·Experience in EMEA Markets and Cultures (Europe, India, Middle East and Africa)·Experience in Asia-Pacific Markets and Cultures (Australia, China and other countries in the Asia region)·IT or Cybersecurity Expertise·Logistics and Supply Chain Management Expertise·Manufacturing Expertise·Innovation Expertise·Mergers and Acquisitions ExpertiseThe Corporate Governance Committee will consider director candidates recommended by security holders under the same criteria as other candidates described above. Nominations may be submitted by letter addressed to: WD-40 Company Corporate Governance Committee, Corporate Secretary, 9715 Businesspark Avenue, San Diego, California 92131. Nominations by security holders must be submitted in accordance with the requirements of the Company’s Bylaws, including submission of such nominations within the time required for submission of shareholder proposals as set forth below under the heading, Shareholder Proposals. Related Party Transactions Review and OversightThe Audit Committee is comprised of Daniel T. Carter (Chair), Trevor I. Mihalik, Graciela I. Monteagudo, Daniel E. Pittard, Anne G. Saunders and Neal E. Schmale. Five meetings of the Audit Committee were held during the last fiscal year to review quarterly financial reports, to consider the annual audit and other audit services, to review the audit with the independent registered public accounting firm after its completion and to fulfill other responsibilities provided for in the Audit Committee’s Charter. The Board of Directors has determined that Mr. Carter is an “audit committee financial expert” as defined by regulations adopted by the Securities and Exchange Commission. Mr. Carter and each of the other members of the Audit Committee are independent directors as defined in the Nasdaq Rules. Each member of the Audit Committee also satisfies the requirements for service on the Audit Committee as set forth in Rule 5605(c)(2) of the Nasdaq Rules.The Audit Committee has responsibility for review and oversight of related party transactions for potential conflicts of interest. Related party transactions include any independent business dealings between the Company and related parties who consist of, or are related to, the Company’s executive officers, directors, director nominees and holders of more than 5% of the Company’s shares. Such transactions include business dealings with parties in which any related party has a material direct or indirect interest. The Audit Committee has adopted a written policy to provide for its review and oversight of related party transactions. Executive officers and directors are required to notify the Secretary of the Company of any proposed or existing related party transactions in which they have an interest. The Secretary and the Audit Committee also rely upon the Company’s disclosure controls and procedures adopted pursuant to Exchange Act rules for the purpose of assuring that matters requiring disclosure, including transactions that may involve a related party or may otherwise involve the potential for conflicts of interests, are brought to the attention of management and the Audit Committee on a timely basis. Certain related party transactions do not require Audit Committee review and approval. Such transactions are considered pre-approved. Pre-approved transactions include:·compensation arrangements approved by the Compensation Committee or the Board of Directors and expense reimbursements consistent with the Company’s expense reimbursement policy;·transactions in which the related party’s interest is derived solely from the fact that he or she serves as a director of another corporation that is a party to the transaction;18·transactions in which the related party’s interest is derived solely from his or her ownership (combined with the ownership interests of all other related parties) of not more than a 5% beneficial interest (but excluding any interest as a general partner of a partnership) in an entity that is a party to the transaction; and·transactions available to all employees of the Company generally.If a related party transaction is proposed or if an existing transaction is identified, the Audit Committee has authority to disapprove, approve or ratify the transaction and to impose such restrictions or other limitations on the transaction as the Committee may consider necessary to best assure that the interests of the Company are protected and that the related party involved is not in a position to receive an improper benefit. In making such determination, the Audit Committee considers such factors as it deems appropriate, including without limitation (i) the benefits to the Company of the transaction; (ii) the commercial reasonableness of the terms of the transaction; (iii) the dollar value of the transaction and its materiality to the Company and to the related party; (iv) the nature and extent of the related party’s interest in the transaction; (v) if applicable, the impact of the transaction on a non-employee director’s independence; and (vi) the actual or apparent conflict of interest of the related party participating in the transaction.During the fiscal year ended August 31, 2020, there were no transactions required to be reported pursuant to the requirements of Item 404(a) of Regulation S-K under the Exchange Act that did not require review and approval by the Audit Committee. FINANCE COMMITTEEThe Finance Committee is comprised of Trevor I. Mihalik (Chair), Daniel T. Carter, Melissa Claassen, Eric P. Etchart, David B. Pendarvis, Gregory A. Sandfort and Neal E. Schmale. Five meetings of the Finance Committee were held during the last fiscal year. The Finance Committee is appointed by the Board for the primary purpose of assisting the Board in overseeing financial matters of importance to the Company, including matters relating to acquisitions, investment policy, capital structure, and dividend policy. The Finance Committee also reviews the Company’s annual and long-term financial strategies and objectives.COMPENSATION COMMITTEEThe Compensation Committee is comprised of Gregory A. Sandfort (Chair), Melissa Claassen, David B. Pendarvis, Anne G. Saunders and Neal E. Schmale, all of whom are independent directors as defined under the Nasdaq Rules. The Compensation Committee met three times during the last fiscal year. 2020,2022, there were no compensation committee interlock relationships with respect to the Company’s executive officers, members of the Board of Directors andand/or the Compensation Committee as described in Item 407(e)(4)(iii) of Regulation S-K promulgated under the Exchange Act.INSIDER TRADING POLICY - PROHIBITED HEDGING TRANSACTIONSThe Company maintains an insider trading policy, including transaction pre-approval requirements, applicable to its officers and directors required to report changes in beneficial ownership of the Company’s common stock under Section 16 of the Exchange Act as well as certain other employees who have significant management or financial reporting responsibilities and can be expected to have access to material non-public information concerning the Company. The Company’s insider trading policy also requires pre-approval of all trading plans adopted pursuant to Rule 10b5-1 promulgated under the Exchange Act. To avoid the potential for abuse, the Company’s policy with respect to such trading plans is that, once adopted, trading plans are not subject to change or cancellation. Any such change or cancellation of an approved trading plan by an executive officer, director or employee covered by the Company’s insider trading policy in violation of the policy will result in the Company’s refusal to approve future trading plan requests for that person.The insider trading policy also includes a prohibition on certain hedging and transactions involving the potential for abuse. Pursuant to the insider trading policy, covered officers, directors and employees may not engage in the following transactions involving the Company’s publicly traded securities:·Short sale transactions·Transactions in publicly traded options or derivatives·Hedging transactions·Pledges or margin account borrowing19WD-40The Company believes that taking an integrated approach to environmental, social and governance (“ESG”) issues createsenhances the sustainability and growth of our business and protects the long-term stockholder value.interests of our stakeholders. Our Board has ultimate authority and has demonstrated its continued commitment to the Company’s performance relative to ESG matters. committed to operating in a sustainable mannerfocused on building an enduring business that can proudly be passed onto the next generation and on being a responsible corporate citizen for the benefit of customers, end users, investors, tribe members, the environment and the communities in which we live and work.While the Company has for decades followed its values – the first and most important one being, “We value doing the right thing” – the Company has not formally catalogued its activities across environmental and social factors.our stakeholders.environmentalESG topics and social topics in order to provide recommendations to management. In that year, the ESG Project teamTeam completed a comprehensive analysis documenting the Company’s many activities and guiding structures that fall under the umbrella of ESG topics. ESG.identify best practices and to determine the rangeobtain from various stakeholders their views of importance forwhich aspects of ESG topics as viewed by allwere of our stakeholders. To do so,highest importance. In connection with this assessment, the ESG Project Team engaged the guidance of Sustainability Partners, led by Drs. Mary and Brian Nattrass, well-known and respected experts in sustainability programs for businesses, non-profits, and governments.pursued the objectives of 1) completingcompleted a Life Cycle Assessment screening for the Company’s flagship product, WD-40® Multi-Use Product, to identifyand prepared for the largest contributorspublication of its inaugural ESG report.product’s impact on the environment, and 2) completing theCompany published its first ESG report, forwhich can be found at https://www.wd40company.com/our-company/corporate-responsibility/. After the Company.publication of the ESG report, the ESG Project Team pursued the objectives and focused on four ESG pillars: 1) social impact, 2) carbon and environmental impact, 3) circular supply chain, and 4) product sustainability lens.inaugurallatest ESG report, which has been published contemporaneously with the filing of this Proxy Statement and can be found at https://www.wd40company.com/our-company/corporate-responsibility/. The 2022 ESG report details the Company’s ESG-related objectives, targets, and progress, for fiscal years 2021 and 2022 and establishes objectives and targets for fiscal years 2023 and 2024. 20ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATIONIn accordance with the requirements of Section 14A of the Exchange Act, the Company’s stockholders are being asked to cast an advisory vote to approve the compensation of the Company’s Named Executive Officers (“NEOs”) identified in the Compensation Discussion and Analysis section of this Proxy Statement. This vote is commonly referred to as a “Say-on-Pay” vote.At the Company’s 2017 Annual Meeting of Stockholders, the Company’s stockholders were asked, by a non-binding advisory vote, to express their preference as to the frequency of future Say-on-Pay votes and the Board of Directors recommended annual Say-on-Pay voting. The Company’s stockholders expressed a preference to have Say-on-Pay votes every year. The following resolution will be presented for approval by the Company’s stockholders at the 2020 Annual Meeting of Stockholders:“RESOLVED, that the stockholders of WD-40 Company (the “Company”) hereby approve the compensation of the Company’s Named Executive Officers as disclosed in the Compensation Discussion and Analysis section of the Company’s proxy statement for the 2020 Annual Meeting of Stockholders and in the accompanying compensation tables and narrative disclosures.”The advisory vote to approve executive compensation is a non-binding vote on the compensation of the Company’s NEOs. This Proxy Statement contains a description of the compensation provided to the NEOs as required by Item 402 of Regulation S-K promulgated under the Exchange Act.Stockholders are encouraged to carefully consider the Compensation Discussion and Analysis, accompanying compensation tables and related narrative discussion in this Proxy Statement in considering this advisory vote. The Board of Directors believes that the compensation provided to the Company’s NEOs offers a competitive pay package with a proper balance of current and long-term incentives aligned with the interests of the Company’s stockholders.This is an advisory vote and will not affect compensation previously paid or awarded to the NEOs. While a vote disapproving the NEOs’ executive compensation will not be binding on the Board of Directors or the Compensation Committee, the Compensation Committee will consider the results of the advisory vote in making future executive compensation decisions.The affirmative vote of a majority of the shares present in person or represented by proxy and entitled to vote on the proposal at the Annual Meeting of Stockholders is required to approve this advisory vote on executive compensation.THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” ADOPTION OF THE PROPOSED RESOLUTION FOR APPROVAL OF THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS.2118COMPEINFORMATION REGARDING OUR EXECUTIVE OFFICERSNSATION19
WD-40 Company’sThe following Compensation Discussion and Analysis (“CD&A”) addresses the executive compensation philosophy, policies and programs, and the processes and decisions of the Compensation Committee of the Company’s Board of Directors (the “Committee”) in connection with respect toexecutive compensation for the compensation of the Company’sfollowing Named Executive Officers (the “NEOs”). For of the Company for fiscal year 2020, the Company’s NEOs were:2022:
· | Garry O. Ridge, |
· | Steven A. Brass, President and Chief Operating Officer |
· | Jay W. Rembolt, |
· |
|
|
|
· | Patricia Q. Olsem, |
Our Executive Compensation Programs Incorporate Strong Governance Features
• | No Employment Agreements with Executive Officers | • | Executive Officers are Subject to Stock Ownership Guidelines | |
• | No Supplemental Executive Retirement Plans for Executive Officers | • | Executive Officers are Prohibited from Hedging or Pledging Company Stock | |
• | Long-Term Incentive Awards are Subject to Double-Trigger Vesting upon Change of Control | • | No Backdating or Re-Pricing of Equity Awards | |
• | Annual and Long-Term Incentive Programs Provide | • | Financial Goals for Performance-Based Equity Awards Never Reset |
EXECUTIVE SUMMARY OF EXECUTIVE COMPENSATION DECISIONS AND RESULTS
The compensation structure for the NEOs is comprised of three elements: base salary, retention-related equity compensation, and performance-related cash and equity compensation. Through the application of these elements, a significant portion of NEO realized compensation is directly tied to Company performance measured by increased earnings and total stockholder return (“TSR”).
Performance-based compensation tied to earnings is based on earnings before interest, income taxes, depreciation (in operating departments) and amortization (“EBITDA”), not earnings per share. To measure NEO performance, the Company uses several EBITDA-based measures:
▪“Adjusted EBITDA” defined as EBITDA before deduction of stock-based compensation expense for any vested performance share unit (“PSU”) awards and excludes other non-operating income and expense amounts;
▪ “Regional Adjusted EBITDA” defined as Adjusted EBITDA computed for each of the Company’s relevant financial reporting segments; and
▪“Global Adjusted EBITDA” defined as Adjusted EBITDA computed on a consolidated basis.
Retention-related equity compensation includes restricted stock unit (“RSU”) awards that typically vest annually over a period of three years after grant, subject to earlier vesting upon the effective date of retirement under certain conditions. Retention-related equity compensation features are also reflected in our performance-based market share unit (“MSU”) awards that may be earned over a market return-based vestingmeasurement period of three years,years. MSUs earned are subject to a three-year vesting cliff (or pro-rata vesting at the end of the applicable measurement period in the event of earlier retirement under certain conditions.conditions).
Performance-related compensation includes (i) an annual cash payment opportunity that is tied to current fiscal year financial results (“Incentive Compensation”); (ii) MSU awards that are tied to a measure of TSR; and (iii) deferred performance unit (“DPU”)PSU awards that are tied to current fiscal year financial results that exceed levels required for maximum payment of that portion of the cash Incentive Compensation opportunity that is tied to globalGlobal Adjusted EBITDA.
For purposes of measuring performance based on the Company’s EBITDA, the Company uses EBITDA before deduction of the stock-based compensation expense for vested DPU awards, if any, and excluding other non-operating income and expense amounts (“Adjusted EBITDA”).
FISCAL YEAR 2020 SUPPLEMENTAL CASH COMPENSATION AWARD
For fiscal year 2020, due to the extreme variability of the impact of the COVID-19 pandemic on the Company’s local market and regional results, and to recognize the outstanding cross-regional and cross-functional efforts that allowed the Company to manage its business successfully through the year, compensation for all employees, including the NEOs, was supplemented by a separate cash compensation award. Additional cash compensation was paid to each employee to the extent that the regular Incentive Compensation amount determined as described below under the heading, Performance Incentive Program, did not provide a baseline level of compensation equal to 25% of the employee’s Incentive Compensation opportunity. The Company maintains transparent and well-defined compensation arrangements for all employees, including the NEOs. This unprecedented supplemental cash compensation award has been granted to recognize employee efforts in an extraordinary year in which the regular compensation arrangements resulted in differences in rewards that did not properly reflect the contributions all made to achieve the results of the company as a whole.
The foregoing compensation structure elements are fully described later in this Compensation Discussion and Analysis.CD&A.
In establishingAs part of the framework for overall NEO compensation and in assessing suchassessment of compensation for each NEO in light of individual and overall Company performance, the Committee considers actual and target levels of compensation, with reference to both short-term and long-term
20
performance periods, as well as labor market data, and peer group executive compensation. The Committee seeks to align individual NEO performance incentives with both short-term and long-term Company objectives. The Committee assesses the effectiveness of the established framework for NEO compensation through a review ofby reviewing each of the principal elementselement of NEO compensation. The Committee considers measures of Company performance over multi-year periods, specifically including regional and global measures based on the Company’s Adjusted EBITDA, and also relative Company performance as compared to an established peer group of companies and a comparable market index. Additionally, theThe Committee also considers the relative achievement of longer termlonger-term strategic objectives as to which each NEO is accountable. Information regarding NEO strategic objectives is provided in the Executive Officer Compensation Decisions for Fiscal Year 2022 section below under the heading, Base Salary: Process. The Committee believes that a review of NEO compensation and relative company performance over multi-year periods demonstrates the effectiveness of the Company’s established framework for NEO compensation.
22
THREE YEAR PERFORMANCE-BASED COMPENSATION REVIEW
For fiscal year 2022, the Company’s overall financial performance resulted in relatively low achievement of performance measure goals due to impacts of the inflationary environment and global supply chain disruptions in fiscal year 2022 that most severely impacted the Americas and EMEA regions. The Company’s financial results for Regional Adjusted EBITDA under the Company’s Performance Incentive Program was variable depending on the region. No portion of the first level performance goal for the Americas or EMEA region was achieved, while the maximum first level goal for Adjusted EBITDA for the Asia Pacific region was achieved. The Company achieved 26.3% of the first level goal for Global Adjusted EBITDA and none of the second level goal for Global Adjusted EBITDA. Each of the NEOs identified for fiscal year 2022, other than Ms. Olsem, earned Incentive Compensation equal to approximately 13% of their Incentive Compensation opportunity because for such NEOs, 50% of their opportunity was based on approximately 26.3% achievement of the first level goal for Global Adjusted EBITDA. Ms. Olsem earned none of her Incentive Compensation opportunity because neither the Regional Adjusted EBITDA goal for the Americas nor the second level goal for Global Adjusted EBITDA was achieved.
For fiscal year 2021, the Company’s overall financial performance resulted in a very high level of achievement of performance measure goals for Regional Adjusted EBITDA and Global Adjusted EBITDA under the Company’s incentive compensation program (the “Performance Incentive Program”) as described below. With the exception of Regional Adjusted EBITDA for the Americas, which achieved 78% of the maximum for the first level goal for Adjusted EBITDA, the maximum first level goal for Adjusted EBITDA for the EMEA and Asia Pacific regions were achieved and the maximum first and second level goals for Global Adjusted EBITDA were achieved. As a result, for fiscal year 2021, each of the NEOs other than Ms. Olsem earned their maximum Incentive Compensation opportunity and Ms. Olsem earned approximately 89% of her maximum Incentive Compensation opportunity.
For fiscal year 2020, the Company’s overall financial performance resulted in highly variable achievement of performance measure goals for regionalRegional Adjusted EBITDA under the Company’s Performance Incentive Compensation program (the “Performance Incentive Program”) as described below.Program. Depending on local market impacts resulting from efforts to slow the spread of COVID‑19, most local market results for the Company were either quite strong or very poor. Due to this variability, a modest portion of the first level performance measure goal for the Americas region was achieved, a small portion of the first level performance goal for the EMEA region was achieved, and no portion of the first level performance goal for the Asia-Pacific region was achieved. As a result, a small portion of the first level goal for globalGlobal Adjusted EBITDA was achieved and none of the second level goal for globalGlobal Adjusted EBITDA was achieved. For fiscal year 2020, eachEach of the NEOs identified for fiscal year 2020, other than Ms. Olsem, earned Incentive Compensation equal to approximately 10% of their Incentive Compensation opportunity andwhile Ms. Olsem earned Incentive Compensation equal to approximately 35% of her Incentive Compensation opportunity. Due to the extreme variability of the impacts of the COVID-19 pandemic on the Company’s financial results across local markets and the regions, the Company awarded additional cash compensation to all employees, including the NEOs, who did not receive at least 25% of their Incentive Compensation opportunity. As a result, each of the NEOs other than Ms. Olsem (who received more than 25% of her Incentive Compensation opportunity) received a supplemental cash compensation award identified as a “Bonus” for fiscal year 2020 in an amount equal to approximately 15% of their Incentive Compensation opportunity. Amounts received by each of the NEOs for fiscal year 2020 as earned Incentive Compensation and for the supplemental cash compensation awards are set forth below under the headings, Performance Incentive Program and Supplemental Cash Compensation Award for Fiscal Year 2020, respectively.
For the three fiscal year 2019,years ended August 31, 2022, the TSR for the Company’s overall financial performance resulted in partial achievement of performance measure goals for regional and global Adjusted EBITDA undershares fell below, by an absolute percentage point difference, the Company’s Performance Incentive Program. The maximum first level performance measure goalsreturn for the EMEA and Asia-Pacific regions were achieved, but only a modest portion of the first level performance goal for the Americas region was achieved. Due to the strong performance of the EMEA and Asia-Pacific segments and modest achievement of goals for the Americas segment, the maximum first level goal for global Adjusted EBITDA was achieved and approximately 35.6% of the second level for global Adjusted EBITDA was achieved.Russell 2000 Index (the “Index”) by 10.9%. As a result, MSUs awarded to applicable NEOs in October 2019 did not vest and were forfeited.
For the three fiscal years ended August 31, 2021, the TSR for fiscal year 2019, eachthe Company’s shares exceeded, by an absolute percentage point difference, the return for the Index by 23.6%. As a result, MSUs awarded to applicable NEOs in October 2018 provided vested shares of the Company’s common stock to such NEOs, other than Mr. BrassMs. Olsem, at 200% of the target number of award shares. Ms. Olsem earned Incentive Compensation equal150% of the target number of award shares for the MSUs awarded to 68% of their Incentive Compensation opportunity and Mr. Brass earned Incentive Compensation equal to 26% of his Incentive Compensation opportunity for fiscal year 2019.her in October 2018.
For fiscal year 2018, the Company’s overall financial performance resulted in partial achievement of performance measure goals for regional and global Adjusted EBITDA under the Company’s Performance Incentive Program. The maximum first level performance measure goals for the Americas and Asia-Pacific regions were achieved, but no portion of the first level performance goal for the EMEA region was achieved. Due to the strong performance of the Americas and Asia-Pacific segments, the maximum first level goal for global Adjusted EBITDA was achieved and approximately 26.6% of the second level goal for global Adjusted EBITDA was achieved. As a result, for fiscal year 2018 each of the NEOs identified for fiscal year 2018 disclosures earned Incentive Compensation equal to 63% of their Incentive Compensation opportunity for fiscal year 2018.
For the three fiscal years ended August 31, 2020, the TSR for the Company’s shares exceeded, by an absolute percentage point difference, the return for the Russell 2000 Index (the “Index”) by 79.2%. As a result, MSUs awarded to theapplicable NEOs in October 2017 provided vested shares of the Company’s common stock to thesuch NEOs,other than Ms. Olsem, at 200% of the target number of award shares.
For the three fiscal years ended August 31, 2019, the TSR for the Company’s shares exceeded, by an absolute percentage point difference, the return for the Index by 22.4%. As a result, MSUs awarded to the NEOs in October 2016 provided vested shares of the Company’s common stock to the NEOs, other than Mr. Brass, at 200% of the target number of award shares. Mr. BrassMs. Olsem earned 150% of the target number of award shares for the MSUs awarded to himher in October 2016.2017.
21
For the three fiscal years ended August 31, 2018, the TSR for the Company’s shares exceeded, by an absolute percentage point difference, the return for the Index by 48.45%. As a result, MSUs awarded in October 2015 to the NEOs identified for fiscal year 2018 disclosures provided vested shares of the Company’s common stock to those NEOs, other than Mr. Brass, at the maximum amount of 200% of the target number of award shares. Mr. Brass earned 150% of the target number of award shares for the MSUs awarded to him in October 2015.
FISCAL YEAR 20202022 COMPENSATION DECISIONS
Compensation decisions for fiscal year 20202022 were made in October 20192021 based on individual and Company performance during fiscal year 20192021 and a market survey conducted by the Committee’s independent compensation consultant.The position relative to the market median of total compensation for each of the NEOs for fiscal year 2020 is based on peer group and survey data which is discussed below under the heading, Overall Reasonableness ofconsultant, ClearBridge Compensation Group, LLC (“Clearbridge”).
23
The following is a summary of thesuch decisions made by the Committee for NEO compensation for fiscal year 2020:2022:
· | For fiscal year |
· | Annual Incentive Compensation is awarded to the NEOs under the Company’s Performance Incentive Compensation Plan as described below under the heading Performance Incentive Program. |
· | In October |
· | RSU awards providing for the issuance of a total of |
· |
|
· | PSU awards |
· |
|
· |
|
In March 2022, the Committee made compensation decisions, which included a grant of 5,347 RSUs, in connection with Mr. Ridge’s retirement as CEO as of August 31, 2022 and Chairman of the Board as of December 13, 2022. A summary of such decisions is set forth in the Executive Compensation section under the heading, “Summary of Transition and Release Agreement with Garry O. Ridge.”
GOVERNANCE OF EXECUTIVEEXECUTIVE OFFICER COMPENSATION PROGRAM
The primary purpose of the Committee is to establish and administer the compensation and benefit arrangements for our CEO and the other NEOs and executive officers of the Company, including the other NEOs, on behalf of the Board of Directors.Board. The Committee is responsible for developing and reviewing the Company’s overall executive compensation strategy, with support from management and consultants. For fiscal year 2022
22
executive compensation decisions, the Committee’sCommittee engaged an independent compensation consulting firm. For fiscal year 2020 compensation decisions, the Committee’s compensation consulting firm, was Board Advisory, LLC. In March 2020 the Committee selected a new compensation consulting firm, ClearBridge Compensation Group, LLC.ClearBridge. The Committee also has responsibilities in connection with administration ofthe authority to administer the Company’s equity compensation plans.
The Committee operates pursuant to a Charter whichcharter that outlines its responsibilities, including evaluating the Committee’s responsibilities with respect to performance reviews and approval ofapproving annual compensation arrangementsand benefits for the Company’s executive officers. A copy of the Compensation Committee Charter (“Compensation Charter”), which is reviewed annually, can be found on WD-40the Company’s website at http://investor.wd40company.com
withinin the “Corporate Governance” section.
24
PROCESS FOR EVALUATING EXECUTIVE OFFICER PERFORMANCE AND COMPENSATION
In accordance with its Compensation Charter, the Committee works with the Company’s Human Resources function in carrying out its responsibilities. The Vice President of Global OrganizationOrganizational Development is management’s liaison with the Committee. The Committee’s independent compensation consulting firmClearBridge provides advice and information relating to executive compensation.compensation and benefits. For fiscal year 2020, the compensation consulting firm2022, ClearBridge assisted the Committee in the evaluation of executive base salary, Incentive Compensation opportunities,cash incentives, equity incentive design and award levels, and the specific pay recommendation for our CEO. The Committee’s compensation consulting firmClearBridge reports directly to the Committee and provides no additional services forto management.
EXECUTIVE COMPENSATION PHILOSOPHY AND FRAMEWORK
COMPENSATION OBJECTIVES
The Company’s executive compensation program for executive officers is designed to achieve five primary objectives:
1.Attract, motivate, reward and retain high performing executives;
2.Align the interests and compensation of executives with the value created for stockholders;
3.Create a sense of motivation among executives to achieve both short- and long-term Company objectives;
4.Create a direct, meaningful link between business and team performance and individual accomplishment and rewards; and
5.Ensure our compensation programs are appropriately competitive in the relevant labor markets.
TARGET PAY POSITION/POSITION / MIX OF PAY
The Company’s compensation program consists primarily of base salary, annual cash incentives, and long-term oriented equity awards. Each of these components is discussed in greater detail in the Executive Officer Compensation Decisions section below. The Committee has established aconsiders multiple factors when establishing target total compensation opportunities for executive officer total compensation (defined asofficers (including base salary, plus target Incentive Compensation, plus the value ofincentive compensation, and RSU, PSU and MSU equity awards) at the median market level. Specifically, compensation is determined considering internal factors (including, but not limited to, individual performance, complexity of compensation for each position (details on the use of peer group and survey data to establish the median market level are provided below). Actual pay may vary, based on Company and/or individual performance,job function, length of time within the position and anticipated contribution. Thecontribution) as well as external market data. When using external market data, the Committee does not adhere totarget a specific guidelines regardingpay positioning. Instead, the percentageCommittee reviews the full range of market data, with a specific focus on market 50th percentile of total compensation that should be represented by each compensation component but monitors market competitiveness. A review of total compensationas a reference point. The Committee then assesses internal factors for each NEO relativeexecutive officer, which results in final total target pay levels above or below the market 50th percentile, depending on the Committee’s individual assessment. Based on recent market analysis, executive officer target pay levels generally fall between the 25th and the 50th percentiles on average, with variability by individual. Actual compensation will vary from target based on the Company’s incentive compensation plan designs, which consider the Company’s performance. This approach is consistent with the Committee’s historic approach to theassessing market data and setting target market percentile is provided in thepay levels (i.e., considering a holistic assessment of relevant internal and external considerations, on an individual case-by-case basis). Executive Officer Compensation Decisions section below under the heading, Overall Reasonableness of Compensation.
The mix of pay for executive officers is intended to provide significant incentives to drive overall companyCompany performance and increased stockholder value. TheThis mix of pay consists of Salary and All Other Compensation amounts as reported in the Summary Compensation Table under Executive Compensationbelow, maximum possible values for Stock Awards (RSUs,RSUs, MSUs and DPUs)PSUs (collectively, “Stock Awards”) as reported in the table in footnote 1 to the Summary Compensation Table, and maximum possible Non-Equity Incentive Plan Compensation (Incentive Compensation)non-equity incentive plan compensation amounts as reported in the Grants of Plan-Based Awards table below.under Executive Compensation below, and when applicable, Bonus. The sum total of these maximum possible compensation amounts for each NEONEOs is referred to as the NEO’s “Total Compensation Opportunity.” For purposes ofIn the charts below, the Total Compensation Opportunity for the CEO, and for all other NEOs in the aggregate, has been divided among elements of compensation that are considered at risk (MSUs, tied to longer term relative stockholder return, and DPUsPSUs and Incentive Compensation, tied to current fiscal year financial performance), and those elements that are not performance-based and not considered at risk (Salary, All Other Compensation and RSUs). Approximately 72%59% of the CEO’s Total Compensation Opportunity for fiscal year 20202022 was at risk (which percentage would have been higher if the additional RSU grant in March 2022 as shown in the table under the section, “Grants of Plan-Based Awards - Fiscal Year 2022,” had not been included) while approximately 62%, in the aggregate, of the Total Compensation Opportunity for fiscal year 20202022 for all of the other NEOs was at risk. As reported in more detail below, for fiscal year 2020, each of the NEOs other than Ms. Olsem earned 25% of their maximum Incentive Compensation amounts (inclusive of the supplemental cash compensation award described above under the heading, Three Year Performance-Based Compensation Review, and Ms. Olsem earned approximately 35% of her maximum Incentive Compensation amount, and each NEO earned maximum MSU award values (for the MSU award granted in October 2017), and no portion of their DPU awards.
2523
COMPENSATION BENCHMARKING
For purposes of itsBefore making fiscal year 20202022 compensation decisions in October 2021, the Committee examined the executive compensation practices of a peer group of seventeen13 publicly traded companies to assess the competitiveness of the Company’s executive compensation. Peer group companies were selected from a list of U.S. headquartered companies having revenues, earnings, and earningsmarket capitalization reasonably comparable to the Company and doing business in the specialty chemical industry or within specific consumer products categories. Compared to the prior year peer group, the list for fiscal year 2022 excluded two companies, Landec Corporation and Rayonier Advanced Materials, Inc., that were no longer considered reasonably comparable to the Company based on revenues, market capitalization and/or primary business focus and added Livent Corporation, which is an international chemicals company that more closely meets the peer group criteria. In addition to the peer group data, the Committee considered general industry company survey data provided by Korn Ferry Hay Group, a global management consulting firm. TheseThe Committee applied these data sources are applied by the Committee to establish the market median level of compensation for each executive officer position. The peer group companies used in the peer group analysis for fiscal year 20202022 compensation decisions were as follows:
|
|
|
|
|
|
|
|
| American Vanguard Corporation | |
|
| Balchem Corporation | |
|
|
|
| Prestige Consumer Healthcare, |
| Chase Corporation | | Quaker Chemical Corporation |
| Dorman Products, |
|
|
|
| | Sensient Technologies Corporation |
| Hawkins, Inc. | | Stoneridge Inc. |
| Ingevity Corporation | | USANA Health Sciences, Inc. |
|
| ||
|
|
24
EXECUTIVE OFFICER COMPENSATION DECISIONS FOR FISCAL YEAR 20202022
BASE SALARY: PROCESS
Base salaries for all executive officers, including the NEOs, are approved by the Committee effective for the beginning of each fiscal year. In setting base salaries, the Committee normally considers the salary range prepared by its independent compensation advisorconsultant based on each NEO’s job responsibilities and the market 50th percentile target pay position. Salary adjustments, if any, are based on factors such as individual performance, position, current pay relative to the market, future anticipated contribution and the Company-wideCompany’s merit increase budget. Assessment of individual performance follows a rigorous evaluation process, including self-evaluation and the establishment of annual goals for each executive officer and an assessment of the achievement thereof.
26
Individual performance elements considered in this process included individual and Company performance goals and achievements in such areas as growth, leadership, earnings and governance for Mr. Ridge; governance and risk, compliance, forecasting and financial reporting for Mr. Rembolt; growth, leadership, innovation, brand development, earnings and customer relations for Mr. Brass; brand protection, corporate governance legal services and risk, management,compliance, forecasting and compliancefinancial reporting for Mr. Clampitt; andRembolt; business unit performance, teamwork, execution and growth for Ms. Olsem. Olsem; and global brand protection, corporate governance, legal services, risk management, and compliance for Ms. Kiamilev.
BASE SALARY: FISCAL YEAR 20202022
In October 2019, the Committee reviewed the market competitiveness of2021, base salary increases for executive officer base salaries relative to peer group market data presented by the Committee’s compensation advisor. Based on its review of the peer group market data and the general industry company survey data, the Committee approved a 2.0% increase in the CEO’s base salaryofficers for fiscal year 2020 and2022 were approved as follows: a 2.5% increase from fiscal year 2021 salary amounts for all executive officers, except for Ms. Olsem who received a 10% increase. These increases in base salary rangingsalaries were reasonable and generally modest since executive officers did not receive an increase for fiscal year 2021. Base salaries in fiscal year 2021 remained unchanged from 2.0% to 12.5%fiscal year 2020 due the continuing uncertainty for the other NEOs.global economy, labor markets, and the Company’s business attributable to the COVID-19 pandemic.
PERFORMANCE INCENTIVE PROGRAM
The Company uses its Performance Incentive Program, which is a component of the WD-40 Company Performance Incentive Compensation Plan approved by the stockholders at the Company’s 2017 annual meeting, to tie executive officer compensation to the Company’s financial performance. All Company employees participate in the same Performance Incentive Program as described below. The Performance Incentive Program is offered to the executive officers pursuant to the WD-40 Company Performance Incentive Compensation Plan most recently approved by the stockholders at the Company’s 2017 Annual Meeting of Stockholders.
The Performance Incentive Program provides direct incentives to all Company employees, including executive officers, to affect regional financial performance and, for the Company as a whole, to promote sales at increasing levels of profitability. Specific performance measures tied to regional financial results are used in the Performance Incentive Program formulas as applied to each employee according to his or her particular area of responsibility.
For the NEOs, Incentive Compensation opportunity awardsopportunities for fiscal year 20202022 were based on pre-established goals for the followingtwo corporate performance measures: (i) the Company’sRegional Adjusted EBITDA computed for each of the Company’s relevant financial reporting segments (“Regional EBITDA”); andEBITDA; and/or (ii) Global Adjusted EBITDA computed on a consolidated basis (“Global EBITDA”). The calculations of attainment of these performance measures for the NEOs are substantially the same as the calculations for all other employees for whom such performance measures were applicable.EBITDA.
For purposes ofIn computing the actual financial results to be measured against the goals established for the Regional Adjusted EBITDA and Global Adjusted EBITDA performance measures, the Company may exclude certain expenditures as approved by the Committee. For fiscal year 2020, the Committee approved the exclusion of certain expenses in the amount of approximately $1,493,000 associated with the Company’s investment in IT infrastructure. 2022, no such exclusions were applicable.
The Company’s Incentive Compensation Program, as applied to all of its employees,program is designed with the intent to fund the Incentive Compensation payout to all employees, including the NEOs, from increased earnings over the prior fiscal year. If the Company does not realize an increase in Global Adjusted EBITDA over the prior fiscal year, it is possible that Ms. Olsem will earn some Incentive Compensation because the performance measure for a portion of the Incentive Compensation opportunity payable to her is based on Regional Adjusted EBITDA.
Depending upon actual performance, results, the Incentive Compensation opportunities for fiscal year 2020 range from 0%2022 reach up to 200% of base salary for Mr. Ridge, from 0%up to 160% of base salary for Mr. Brass, up to 100% of base salary for Mr. Rembolt, from 0% up to 160%110% of base salary for Mr. Brass, from 0%Ms. Olsem, and up to 90% of base salary for Mr. Clampitt, and from 0% up to 100% of base salary for Ms. Olsem.Kiamilev.
The maximum Incentive Compensation potential for employees under the Performance Incentive Program is referredprovides for three performance measure levels: Levels A, B and C. Only two of the three performance measure goals are applied for NEOs to herein ascalculate earned Incentive Compensation and to provide enhanced incentives to achieve maximum Global Adjusted EBITDA results for the employee’s “Annual Opportunity.”benefit of stockholders. For each of the NEOs, the Performance Incentive Program for fiscal year 20202022 provided two performance measure levels (“Levels A(A and C”)C) for determination of earned Incentive Compensation; each level represented 50% of the maximum Incentive Compensation potential (“Annual Opportunity. The Performance Incentive Program is consistently applied for all employees of the Company except that there are three performance measure levels (“Levels A, B and C”Opportunity”) for all employees other than the NEOs and certain other executive officers and management employees.. The maximum Incentive Compensation payout for Ms. Olsem required achievement of specified segment goals for Regional Adjusted EBITDA (Level A) and Company performance that equaled the maximum goal amount for Global Adjusted EBITDA as(Level C,) each described below (Level C).below. For Messrs. Ridge, Rembolt, Brass and ClampittRembolt and Ms. Kiamilev (each of whom has global rather than regional responsibilities), the maximum Incentive Compensation payouts required achievement of specified goals for Global Adjusted EBITDA for each of Levels A and C.
Only two of the three performance measure goals are applied for the NEOs and certain other executive officers and management employees for purposes of calculating earned Incentive Compensation in order to provide an increased incentive to those employees to achieve the maximum level of Global EBITDA results for the benefit of stockholders. Level B performance measure goals for other employees are more directed to achievement of goals tied to areas over which they have more direct
27
influence. For such other employees, Level A represented 50% of the Annual Opportunity, Level B represented 30% of the Annual Opportunity and Level C represented 20% of the Annual Opportunity.
Target and maximum payout amountspayouts for each of the NEOs for the fiscal year 20202022 Performance Incentive Program are disclosed below in the table under the heading, Grants of Plan-Based Awards - Fiscal Year 20202022.
25
The following table sets forth the fiscal year 2020 Performance2022 Incentive ProgramCompensation payout weightings and the minimum and maximum goals for the performance measures applicable to each of the NEOs. The minimum and maximum Level A goals for Regional Adjusted EBITDA and Global Adjusted EBITDA were based on earnings before deduction of any Incentive Compensation amounts.Compensation. The minimum and maximum Level C goals for Global Adjusted EBITDA were based on earnings after deduction of an estimate of the maximum possible Incentive Compensation amounts for Levels A and B, but before deduction of Incentive Compensation amounts for Level C.
|
|
|
|
|
|
|
|
|
|
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level |
| Performance Measure |
| Garry O. Ridge |
| Patricia Q. Olsem |
| Minimum Goal |
| Maximum Goal |
| Performance Measure |
| Garry O. Ridge |
| Patricia Q. Olsem |
| Minimum Goal |
| Maximum Goal |
A |
| Regional EBITDA (Americas) |
| N/A |
| 50% |
| $ 56,517 |
| $ 60,359 |
| Regional EBITDA (Americas) |
| N/A |
| 50% |
| $ 61,041 |
| $ 65,914 |
A |
| Global EBITDA |
| 50% |
| N/A |
| $ 88,917 |
| $ 102,713 |
| Global EBITDA |
| 50% |
| N/A |
| $ 92,165 |
| $ 107,895 |
C |
| Global EBITDA |
| 50% |
| 50% |
| $ 93,363 |
| $ 100,954 |
| Global EBITDA |
| 50% |
| 50% |
| $ 96,895 |
| $ 106,285 |
The following table sets forth the actual fiscal year 20202022 performance results and percentage achievement for each of the performance measuresmeasure under the Performance Incentive Program formulas applicable to the NEOs. Actual earnings results for measurement against the Regional and Global EBITDA goals were adjusted to exclude (a) Incentive Compensation amounts consistent with the manner in which the minimum and maximum performance measure goals are determined as described with reference to the table above and (b) certain Company expenditures as approved by the Committee, as described above.
|
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Level |
| Performance Measure |
| Actual |
| % Achievement |
| Performance Measure |
| Actual |
| % Achievement |
A |
| Regional EBITDA (Americas) |
| $ 59,200 |
| 69.8% |
| Regional EBITDA (Americas) |
| $ 57,504 |
| 0.0% |
A |
| Global EBITDA |
| $ 91,793 |
| 20.8% |
| Global EBITDA |
| $ 96,299 |
| 26.3% |
C |
| Global EBITDA |
| $ 86,519 |
| 0.0% |
| Global EBITDA |
| $ 93,258 |
| 0.0% |
|
|
|
|
|
|
|
Achievement of the maximum goals for Regional Adjusted EBITDA and Global Adjusted EBITDA is intended to be attainable through the concerted efforts of all management teams working in their own regions and areas of responsibility and for the Company as a whole.
Based on the Company’s fiscal year 20202022 performance and the Committee’s certification of the relative attainment of each of the performance measuresmeasure under the Performance Incentive Program, the payouts for our executive officers, including the NEOs were calculated. On October 12, 2020,10, 2022, the Committee approved payment of the following Incentive Compensation amounts to the NEOs for fiscal year 20202022 performance:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Officer |
| Title |
| FY 2020 |
| FY 2020 |
| FY 2020 | ||||||||
Named Executive Officer |
| Title |
| FY 2022 |
| FY 2022 |
| FY 2022 | ||||||||
Garry O. Ridge |
| Chief Executive Officer and Chairman of the Board |
| 200% |
| $ 140,647 |
| 10% |
| Chief Executive Officer and Chairman of the Board |
| 200% |
| $ 181,678 |
| 13% |
Steven A. Brass |
| President and Chief Operating Officer |
| 160% |
| $ 96,091 |
| 13% | ||||||||
Jay W. Rembolt |
| Vice President, Finance, Treasurer |
| 100% |
| $ 34,037 |
| 10% |
| Vice President, Finance, Treasurer |
| 100% |
| $ 43,992 |
| 13% |
|
| and Chief Financial Officer |
|
|
|
|
|
|
| and Chief Financial Officer |
|
|
|
|
|
|
Steven A. Brass |
| President and Chief Operating Officer |
| 160% |
| $ 74,161 |
| 10% | ||||||||
Richard T. Clampitt |
| Vice President, General Counsel |
| 90% |
| $ 26,874 |
| 10% | ||||||||
Phenix Q. Kiamilev |
| Vice President, General Counsel |
| 90% |
| $ 32,001 |
| 13% | ||||||||
|
| and Corporate Secretary |
|
|
|
|
|
|
| and Corporate Secretary |
|
|
|
|
|
|
Patricia Q. Olsem |
| Division President, Americas |
| 100% |
| $ 104,419 |
| 35% |
| Division President, Americas |
| 110% |
| $ - |
| 0% |
|
|
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
28
As an example of the operation ofTo illustrate how the Performance Incentive Program with Levels A and C works, Ms. Olsem’sKiamilev’s Incentive Compensation payoutof $32,001 for fiscal year 20202022 was generally computed as follows:
· | Incentive Compensation Annual Opportunity = |
· | Level A (Regional Adjusted EBITDA) = 50% of Annual Opportunity = |
— Level A Incentive Compensation = Level A Achievement (69.824%(26.3%) Xx Level A Annual Opportunity = $104,419.$32,001
· | Level C (Global Adjusted EBITDA) = 50% of Annual Opportunity = |
— Level C Incentive Compensation = Level C Achievement (0%) Xx Level C Annual Opportunity = $0.
Ms. Olsem’s aggregate Incentive Compensation payout was the sum of the payouts under Levels A and C of the Performance Incentive Program, or $104,419.
Supplemental cash compensation award for fiscal year 2020
As discussed above under the headings, Fiscal Year 2020 Supplemental Cash Compensation Award and Three Year Performance-Based Compensation Review, the Company paid a supplemental cash award to all employees, including the NEOs, so that all employees received at least 25% of their Incentive Compensation opportunity. Accordingly, the following supplemental cash compensation amounts were awarded to the NEOs for fiscal year 2020:
$0
· | ||
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
+ Level C Incentive Compensation = $32,001 + $0 = $32,001 |
26
Equity Compensation
Equity compensation is a critical component of the Company’s efforts to attract and retain executives and key employees, encourage employee ownership in the Company, link pay with performance and align the interests of executive officers with those of stockholders. To provide appropriately directed incentives to our executive officers, the Committee has providedCompany grants awards of time-vesting restricted stock unit (“RSU”) awards as well as performance-vesting market share unit (“MSU”) awardsRSUs, MSUs and deferred performance unit (“DPU”) awards.PSUs. Equity awards for fiscal year 20202022 were granted to the NEOs pursuant to the Company’s 2016 Stock Incentive Plan (the “Stock Incentive Plan”) approved by the stockholders at the 2016 Annual Meeting of Stockholders.Plan.
The Company’s MSU awards are tied to a measure of total stockholder return (“TSR”) that is determined by reference to a change in the value of the Company’s common stock with reinvestment of dividends. In October 2019, the Committee granted2021, primary equity allocations of RSU and MSU awards for fiscal year 2020.2022 were granted. The authorized awards were divided equally between the two types of awards for each NEO.NEOs. MSU awards provide for vesting after a three-year performance vestingthe measurement period, based on a comparison of the Company’s TSR against the Russell 2000 Index (the “Index”) as described in more detail below. In addition to the RSU and MSU awards, the NEOs were also received DPUgranted PSU awards in October 2019. As compared2021. Compared to the retention and long-term performance-based attributes of the RSU and MSU awards, the DPUPSU awards provide a near-term incentive reward for achieving Global EBITDA results forincentive. If the fiscal year in excess of the amount of Global EBITDA required for maximum payout of Incentive Compensation under Level C of the Performance Incentive Program as described above. DPUapplicable performance measures are achieved, PSU awards provide for vestingvest at the end of the fiscal year for which they are granted. All RSU, MSU and DPUPSU awards are subject to terms and conditions set forth in an applicable award agreement (the “Award Agreement”).
The principal attributes and benefits of the RSU, MSU and DPUequity awards for executive officers are as follows:
· | RSU awards provide for annual vesting in relatively equal portions over |
· | MSU awards provide for performance-based vesting tied to the Company’s TSR over a performance measurement period of three fiscal years beginning with the fiscal year in which the awards are granted and ending on August 31st of the third year. The change in the value of the Company’s common stock assumes the reinvestment of dividends and compares the Company’s TSR against the Index. |
· |
|
29
· | RSU and MSU awards provide for the issuance of shares of the Company’s common stock upon vesting. |
· |
|
· | A mix of |
The Board recognizes the potentially dilutive impact of equity awards. TheAccordingly, the Company’s equity award practices are designed to balance the impact of dilution and the Company’s need to remain competitive by recruiting, retaining, and providing incentives for high-performing employees.
Restricted Stock Unit Awards
RSU awards provide for the issuance of shares of the Company’s common stock to the award recipient upon vesting provided that the recipientemployee remains employed with the Company through eachon the applicable vesting date except(except for termination of employment due to death or disability or vesting upon retirement as noted below with respect to vesting upon retirement. Shares of the Company’s common stock equal to the portion of the RSU award that has vested are issued promptly upon the vesting date.below). Except as otherwise noted, RSU awards provide for vestingvest annually over a period of three years from the grant date. 34% of the RSU award will vestvests on the first vesting date and 33% of the RSU award will vestvests on each of the second and third vesting dates. The vesting date each year is the third business day following the Company’s public release of its annual earnings for the preceding fiscal year, but not later than November 15 of the vesting year.15.
RSU Award Agreements provide that for RSU award recipientsemployees who retire from the Company after reaching age 65, or for RSU award recipientsemployees who retire from the Company after reaching age 55 and have been employed by the Company for at least 10 years, all RSUs will be vestedvest upon the effective date of retirement.
Shares for RSU awards granted prior to fiscal year 2021 that vest due to death, disability or retirement and shares will be issued within 30 days after the effective date of retirement,termination of employment, except for specified employees, including the Company’s executive officers, whose RSU shares will be issued no earlier than 6 months after the effective date of retirement.separation from service or termination of employment due to disability. For shares of RSU awards granted starting in fiscal year 2022, RSU shares will be issued no earlier than 6 months after the effective date of separation of service, which policy shall apply to every employee.
27
Payment of required withholding taxes due with respect to the vesting of the RSU awards if any, will be covered through withholding of shares by the Company. The Company will issue a net number of shares to the recipient for a vested RSU awardshares after withholding shares having a value as of the vesting date, or as of the date of issuance in the case of the issuance of RSU shares followingdeath, disability or retirement, equal to the required tax withholding obligation.
Market Share Unit or MSU Awards
MSU awards provide for performance-based vesting over a performance measurement period of three fiscal years commencing with the fiscal year in which the MSU awards are granted (the “Measurement“MSU Measurement Period”). Except as noted below with respect to vesting upon death, disability or retirement, the recipientemployees must remain employed with the Company for vesting purposes until the date on which the Committee certifies achievement of the requisite performance provided for in the MSU Award Agreement. A number of sharesShares of the Company’s common stock equal to an “Applicable Percentage” of the “Target Number” of shares covered by the MSU awards to the NEOs will be issued as ofon the “Settlement Date.”Settlement Date (defined below). The Applicable Percentage is determined by reference to the performance vesting provisions of the MSU Award Agreements as described below. The Settlement Date for an MSU award is the third business day following the Company’s public release of its annual earnings for the third fiscal year of the MSU Measurement Period.
MSU Award Agreements provide for monthly pro-rata vesting of MSUs as of the end of the MSU Measurement Period in the event of the earlier termination of the award recipient’s employment due to death, disability, or retirement after reaching age 65, or retirement after reaching age 55 with at least 10 years of employment with the Company. For purposes of calculatingTo calculate the number of MSUs vested and the corresponding number of shares to be issued as ofon the Settlement Date, the Target Number of shares covered by the MSU awards will be adjusted according to the pro-rata portion of the Measurement Period that has elapsed as of the effective date of termination of employment. The Committee may also exercise its discretion to provide for monthly pro-rata vesting of MSUs awarded to a recipientan employee who resigns or is terminated by the Company for reasons other than good cause.
Payment of required withholding taxes due with respect to the settlement of an MSU award, if any, will be covered through withholding of shares by the Company. The Company will issue a net number of shares to the recipient for a vested MSU awardshares after withholding shares having a value as ofon the Settlement Date equal to the required tax withholding obligation.
30
The performance vesting provisions of MSU awards are based on relative TSR for the Company over the MSU Measurement Period as compared to the total return (“Return”) for the Index as reported for total return (with dividends reinvested), as published by Russell Investments. For purposes of computingTo compute the relative TSR for the Company as compared to the Return for the Index, dividends paid with respect to the Shares will be treated as having been reinvested as of the ex-dividend date for each declared dividend.
The Applicable Percentage of the Target Number of shares will be determined for each of the NEOs based on the absolute percentage point difference between the TSR for the Company as compared to the Return for the Index (the “Relative TSR”) as set forth in the table below:
|
|
|
|
|
|
|
|
|
|
Relative TSR |
|
|
|
|
(absolute percentage point difference) |
| Applicable Percentage |
| Applicable Percentage |
> 20% |
| 200%* | ||
20% |
| 200%* | ||
≥ 20% |
| 200% | ||
15% |
| 175%* |
| 175% |
10% |
| 150% |
| 150% |
5% |
| 125% |
| 125% |
Equal |
| 100% |
| 100% |
-5% |
| 75% |
| 75% |
-10% |
| 50% |
| 50% |
>-10% |
| 0% |
| 0% |
|
|
|
* The MSU award granted to Ms. Olsem in fiscal year 2019 provides for a maximum Applicable Percentage of the Target Number of shares of 150% if the Relative TSR is 10% or greater. Otherwise, the Applicable Percentage for the MSU awards granted to Ms. Olsem will be calculated in the same manner as for the other NEOs.
The Applicable Percentage will be determined on a straight-line sliding scale from the minimum 50% Applicable Percentage achievement level to the maximum 200% Applicable Percentage achievement level (150% for Ms. Olsem for the MSU award granted in fiscal year 2019). For purposes of determininglevel. To determine the TSR for the Company and the Return for the Index, the beginning and ending values for each measure will be determined on anby taking the average basis over a period ofclosing price on all market trading days within the ninety (90) calendar days prior to the beginning of the fiscal year for the beginning of the MSU Measurement Period and over a period of all market trading days within the ninety (90) calendar days prior to the end of the third fiscal year of the MSU Measurement Period. For purposes of determining relative achievement, actual results are to be rounded to the nearest tenth of one percent and rounded up from the midpoint. The number of MSU Shares to be issued on the Settlement Date is to be rounded to the nearest whole share and rounded upward from the midpoint.
In the event of a Change in Control (as defined in the 2016 Stock Incentive Plan), the MSU Measurement Period will end as of the effective date of the Change in Control and the ending values for calculating the TSR for the Company and the Return for the Index will be determined based on the closing price of the Company’s common stock and the value of the Index, respectively, immediately prior to the effective date of the Change in Control. The Applicable Percentage will be applied to a proportionate amount of the Target Number of MSUs based on the portion of the Measurement Period elapsed as of the effective date of the
28
Change in Control. The recipient NEO will receive RSUs for the portion of the Target Number of MSUs to which the Applicable Percentage is not applied. Those RSUs will time vest, subject to rights under the NEO’s Change of Control Severance Agreement, as of the Settlement Date.
Deferred Performance Share Unit or PSU Awards
DPUPSU awards provide for performance-based vesting over a performance measurement period of the fiscal year in which the DPUPSU awards are granted (the “Measurement“PSU Measurement Year”). The DPUPSU awards provide for vesting of a number of DPUsPSUs equal to an “Applicable Percentage” of the “Maximum Number” of DPUsPSUs awarded to the NEOs followingas of the conclusion of the Measurement Year (“Vested DPUs”). Except as noted below with respect to vesting upon retirement, the recipient must remain employed with the Company for vesting purposes until August 31 of thePSU Measurement Year. Except as noted below as to non-residents of the United States, the Vested DPUs must be held until termination of employment. Following termination of employment, each Vested DPU will be settled by issuance of one share of the Company’s common stock (a “DPU Share”). The Maximum Number of DPUs refers to the maximum number of DPU Shares that may be issued with respect to a DPU award upon full achievement of the applicable performance goal as described below. The Applicable Percentage is determined by reference to the performance vesting provisions of the DPUPSU Award Agreement as described below. For NEOs who are not residents of the United States, the Compensation Committee has discretion to either defer settlement of each Vested DPU by issuance of a DPU Share following termination of employment or settle each Vested DPU in cash by immediate payment of an amount equal to the closing price of
31
one shareRestricted shares of the Company’s common stock equal to the number of vested PSUs will be issued as of the date“Settlement Date.” The restricted shares issued upon vesting of the Compensation Committee’s certificationPSUs will be subject to a restrictive endorsement and may not be sold before termination of achievementemployment. The Settlement Date for vested PSU awards is the third business day following the Company’s public release of its annual earnings for the performance measure applied in determination of the Applicable Percentage.PSU Measurement Year.
Each Vested DPU that is not settled in cash will include the right to receive a dividend equivalent payment in an amount equal to the dividends declared with respect to the Company’s common stock for each Vested DPU. Such dividend equivalent payments are to be paid in cash as ordinary compensation income as and when common stock dividends are paid by the Company, provided, however, that the Company may elect to accumulate such dividend equivalent payments for later payment not less often than annually.
DPU Award Agreements provide for monthly pro-rata vesting of DPUsPSUs as of the end of the PSU Measurement Year in the event of the earlier termination of the award recipient’s employment due to death, disability, or retirement after reaching age 65, or retirement after reaching age 55 with at least 10 years of employment with the Company. For purposes of calculatingTo calculate the number of Vested DPUs earned,shares to be issued upon vesting of the PSUs, the Maximum Number of shares covered by the DPUPSU awards will be adjusted according to the pro-rata portion of the PSU Measurement Year that has elapsed as of the effective date of termination of employment.
Vested DPUs not otherwise settled in cash will be settled by issuance of the DPU Shares as of 6 months following termination of employment (the “Settlement Date”). Payment of required withholding taxes due with respect to the settlement of a Vested DPUany vested PSU award if any, will be covered through withholding of shares by the Company. The Company will issue a net number of PSU shares to the recipient for a Vested DPU award after withholding shares having a value as of the Settlement Date equal to the required tax withholding obligation.
The performance vesting provisions of the DPUsPSUs are based on relative achievement within an established performance measure range of the Company’s Global Adjusted EBITDA (before deduction of the stock-based compensation expense for the Vested DPUs and excluding other non-operating income and expense amounts (“Adjusted Global EBITDA”) for thePSU Measurement Year.
For fiscal year 2020,2022, the established performance vesting provisionstargets for the DPUs were established asPSUs to vest are set forth in the table below:
|
|
|
|
|
|
Adjusted Global EBITDA1 |
| Applicable Percentage |
> $101,109,000 |
| 100% |
$101,109,000 |
| 100% |
$96,284,000 |
| 5% |
< $96,284,000 |
| 0% |
$96,030,000* |
| 0% |
* Implied zero percentage achievement level. |
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Adjusted EBITDA |
| Applicable Percentage |
≥ $108,762,000 |
| 100% |
$102,500,000 |
| 5% |
< $102,500,000 |
| 0% |
TheIf Global Adjusted EBITDA exceeds the performance target set at 5%, then the Applicable Percentage will beis determined on a straight-line sliding scalebasis from the implied zero percentage achievement level of $102,170,000 to the maximum 100% Applicable Percentage achievement level, but the Applicable Percentage shall not be less than 5%exceed 100%. For purposes of determining the Applicable Percentage, the calculated percentage is to be rounded to the nearest tenth of one percent and rounded upward from the midpoint. The number of Vested DPUs is to be rounded to the nearest whole unit and rounded upward from the midpoint.
EQUITY AWARDS – FISCAL YEAR 20202022
For fiscal year 2020,2022, equity awards to our executive officers were generally granted to satisfy goals for executive officer retention, to provide incentives for current and future performance, and to meet objectives for overall levels of compensation and pay mix. RSU, MSU and DPUEquity awards were granted to the NEOs by the Committee in October 2019. All of the equity awards2021 and March 2022 are set forth below in the table under the heading, Grants of Plan-Based Awards - Fiscal Year 20202022. In establishing award levels for the NEOs in October 2021 for fiscal year 2020,2022, the Committee placed emphasis on long-term retention goals and desired incentives for current and future contributions. The RSU and MSU awards in October 2021 to our CEO were, consistent with past practice, larger than the awards to the other NEOs in recognition of his higher level of responsibility for overall Company performance and based upon market data that supports a higher level of equity compensation for our CEO. The specific RSU award amountsawards and Target Number of shares covered by MSU awards were determined for each NEO based on an assessment of the NEO’s achievement of individual performance goals as well as Company performance for fiscal year 20192021 in areas over which the NEO had particular influence. The DPU award amountsgrant of RSUs to the CEO in March 2022 is discussed in the Executive Compensation section under the heading, “Summary of Transition and Release Agreement with Garry O. Ridge.” The PSU awards were established by reference to each NEO’s Incentive Compensation opportunity amount based on fiscal year 20192021 base salary amounts and fiscal year 20202022 maximum percentage opportunity for Incentive Compensation –opportunity; the share equivalent value of the DPUsPSUs awarded to each NEONEOs as of the date of grant equals 50% of the NEO’s maximum Incentive Compensation opportunity amount.opportunity.
32
Market Share Unit or MSU Award Vesting for Three Fiscal Year Performance Achievement
On October 12, 2020,10, 2022, the Committee certified achievement ofreviewed the performance measure applicable to MSU awards granted to the NEOs in October 2017.2019. The Committee certifiedassessed the Company’s relative TSR as compared to the Return for the Index for the performance
29
Measurement Period ended August 31, 2020 for purposes of calculating2022 to calculate the vested number of shares of the Company’s common stock for those MSU awards.awards vesting, if any. The relative TSR as compared to the Return for the Index (as an absolute percentage point difference) over the three fiscal year Measurement Period ending August 31, 20202022 was 79.2%.10.9% lower. As a result, based on the table above in the description of the MSU awards, the Committee certified that the Applicable Percentage of the Target Number of shares underlying the MSU awards granted in October 20172019 was 200%0% for each of the NEOs other than Ms. Olsem, and 150% for Ms. Olsem.NEOs.
The following table sets forth the Target Number and vested number of shares underlying the MSU awards granted to each NEO in October 2017:2019, none of which vested and were forfeited:
|
|
|
|
|
|
|
|
|
|
Executive Officer |
| Target Number |
| Vested Shares |
Garry O. Ridge |
| 4,434 |
| 8,868 |
Jay W. Rembolt |
| 798 |
| 1,596 |
Steven A. Brass |
| 864 |
| 1,728 |
Richard T. Clampitt |
| 665 |
| 1,330 |
Patricia Q. Olsem |
| 345 |
| 518 |
|
|
|
|
|
Named Executive Officer | Target Number | Vested Shares | ||
Garry O. Ridge | 4,295 | - | ||
Steven A. Brass | 1,745 | - | ||
Jay W. Rembolt | 805 | - | ||
Phenix Q. Kiamilev | - | - | ||
Patricia Q. Olsem | 698 | - |
Deferred
Performance Share Unit or PSU Award Vesting for Fiscal Year 20202022 Performance Achievement
DPUPSU awards granted to the NEOs for fiscal year 2020 lapsedin October 2021 as shown in the Grants of Plan-Based Awards - Fiscal Year 2022 table below did not vest and were forfeited without any value to the NEOs. Vesting of the DPUs would have required a level ofThe Company’s Global Adjusted Global EBITDA equal to or greater than $96,284,000 (the minimum Adjusted Global EBITDA goal for DPU vesting as set forth(as described above in the table on the preceding page). Since the actual Adjusted Global EBITDAdescription of PSU awards), which was $93,133,000 for fiscal year 20192022, was less than $96,284,000, the DPUs did not vest and they have lapsed.attained as required for vesting.
BENEFITS AND PERQUISITES
As is the case with most Company employees, theThe NEOs are provided with standard health and welfare benefits and the opportunity to participate in the WD-40 Company Profit Sharing/Company’s 401(k) Plan, (the “Plan”).similar to those generally offered to other Company employees. The Plan serves to provide our executive officers, including the eligible NEOs, with tax-advantaged retirement savings as an additional component of overall compensation. Employees have the right to invest the Company’s contributions to the Plan in shares of the Company’s common stock as an alternative to other investment choices available under the Plan.
The Company maintains individual Supplemental Death Benefit Plan agreements for both Mr.Messrs. Ridge and Mr. Rembolt.Rembolt, and such agreements will terminate once they are no longer employees as of January 2, 2023 and January 6, 2023, respectively. The Company’s Supplemental Death Benefit Plan agreement obligations under these agreements are funded by life insurance policies owned by the Company.
The Company also provides leased vehicles or a vehicle allowance to its executive officers. The costs associated with the perquisites and other personal benefits provided to the NEOs are included in the Summary Compensation Table below and they are separately identified for fiscal year 20202022 in the footnote disclosure of such perquisites and other personal benefits included with the Summary Compensation Table.benefits.
The Committee considers the cost of the foregoing health and welfare benefits and perquisites in connection with its approval of the total compensation package for each of our NEOs. All such costs are considered appropriate in support of the Committee’s objective of attracting and retaining high quality executive officers because they are common forms of compensation for seniorbenefits and perquisites offered to executives, who expect and are expected by such executives when they considercompare them to competing compensation packages.
POST-EMPLOYMENT OBLIGATIONS
The Company has change of control severance agreements with each of the NEOs. The specific terms of the agreements are described in detail below under the heading, Change of Control Severance Agreements. In establishing the terms and conditions for the change of control severancethese agreements, consideration was given to possible inclusion ofincluding severance compensation to be paid to the executive officers in the event of their termination of employment without cause (or for good reason) without regard to the existence of a change of control of the Company. No such provisions were included, and severance compensation is payable only following a “double-trigger”: termination of employment without “cause” or for “good reason” within two years following a “change of control” of the Company (as the quoted terms are defined in the severancethese agreements).
33
The Committee believes that the change of control severance agreements help ensure the best interests of stockholders by fostering continuous employment of key management personnel. As is the case in many public companies, the possibility of an unsolicited change of control exists. The uncertainty among management that can arise from a possible change of control can result in the untimely departure or distraction of key executive officers. Reasonable change of control severance agreements reinforce continued attention and dedication of executive officers to their assigned duties and support the Committee’s objective of retaining high quality executives.
OVERALL REASONABLENESS OF COMPENSATION30
The Committee believes that the Company is achieving its compensation objectives and rewards executive officers for driving operational success and stockholder value creation. Based on reviews of tally sheets and a “pay-for-performance” analysis by the Committee, and in light of the Company’s compensation objectives, the Committee and the Board of Directors believe that the pay mix and target pay position relative to market for each of the NEOs are reasonable and appropriate. The “pay-for-performance” analysis includes a review of the individual components of executive officer compensation that are tied to Company performance, as measured by identified financial performance metrics as well as the price of the Company’s common stock. In particular, the Committee reviews executive officer Incentive Compensation to determine whether it appropriately rewards achievement of specific financial performance goals and does not otherwise provide rewards in the absence of reasonable measures of individual and Company success. Similarly, with respect to equity awards, the Committee considers the effectiveness of such awards in providing a reasonable incentive to the executive officers to increase profits (as measured by Regional and Global EBITDA) and total stockholder return without inappropriately rewarding the executive officers if performance targets are not achieved over the long term.
The following table sets forth the total compensation for each of our NEOs (based on cash compensation received as base salary and earned Incentive Compensation, plus the value of equity awards (other than the DPUs) at their date of grant per share values) for fiscal year 2020, together with the relative position to market mid-point with 100% equaling market median for each NEO:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Officer |
| Base Salary |
| Other |
| Value of |
| Total |
| Present Value of Total Compensation Received as a Percentage of Market Median |
|
Garry O. Ridge |
| $ 675,240 |
| $ 337,365 |
| $ 1,599,630 |
| $ 2,612,235 |
| 83% |
|
Jay W. Rembolt |
| $ 327,011 |
| $ 81,671 |
| $ 299,814 |
| $ 708,496 |
| 89% |
|
Steven A. Brass |
| $ 446,422 |
| $ 177,888 |
| $ 649,908 |
| $ 1,274,218 |
| 84% |
|
Richard T. Clampitt |
| $ 286,716 |
| $ 64,462 |
| $ 229,795 |
| $ 580,973 |
| 76% |
|
Patricia Q. Olsem |
| $ 300,375 |
| $ 104,419 |
| $ 259,963 |
| $ 664,757 |
| 80% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For fiscal year 2020, total compensation for our NEOs was assessed by the Committee’s compensation consulting firm as part of the process for executive compensation decision-making for fiscal year 2021. As noted in the table above, total compensation for the NEOs ranged from 72% to 85% of the market median compensation level for each position as determined by the Committee’s compensation consulting firm. The levels of compensation are considered by the Committee to be under, but appropriately in line with, target compensation levels for the NEOs in a year in which the Company’s performance was considered by the Committee to be reasonably strong under circumstances of widespread global economic disruption brought on by the global COVID-19 pandemic. These market position comparisons are based on an analysis from the Committee’s compensation consultant that incorporates peer group proxy analysis and general industry survey data for current NEO roles.
EXCHANGE ACT RULE 10b5-1 TRADING PLANS AND INSIDER TRADING GUIDELINES
A description of the Company’s insider trading policies applicable to our executive officers is included above in this Proxy Statement under the heading, Insider Trading Policy – Prohibited Hedging Transactions.
34
EXECUTIVE OFFICER STOCK OWNERSHIP GUIDELINES
The Board of Directors has approved guidelines for executive officer ownership of the Company’s common stock. The guidelines specify that each executive officer will be expected to attain, within a period of five years from the later of the date of electionappointment of the executive officer or the date of adoption of the guidelines, and to maintain thereafter, equity ownership in the Company valued at not less than one times his or her current base salary for executive officers other than our CEO and CFO, two times the current base salary for our CFO, and five times the current base salary for our CEO. Valuation for purposes of the guidelines is to be determined at the higher of cost or current fair market value for shares of the Company’s common stock held outright and, if applicable, shares underlying vested RSUs, MSUs and DPUs then held.equity awards held by the executive officers.
The Board of Directors believes that the stock ownership guidelines serve to improve alignment of the interests of our executive officers and the Company’s stockholders. At the present time,As of October 17, 2022, all NEOs have exceededcomply with the expected levelestablished guidelines of stock ownership.
As noted above under the heading Equity Compensation, the NEOs receive both time-vesting RSU awards and performance-based vesting MSU and DPU awards. As the RSU and MSU awards vest, shares of the Company’s common stock are issued to the NEOs and these shares may then be sold or retained, subject to the stock ownership guidelines described above. Vested DPU awards provide for deferred issuance of shares to the NEOs upon termination of employment. Outstanding unvested RSU and MSU awards held as of August 31, 2020 by the NEOs are set forth in the table below under the heading, Outstanding Equity Awards at 2020 Fiscal Year End. All NEOs hold Vested DPUs and Mr. Ridge holds vested RSU awards that must be retained until termination of employment as noted above in the footnotes to the tables under the heading, Security Ownership of Directors and Executive Officers.
TAX CONSIDERATIONS
Section 162(m) of the Internal Revenue Code of 1986 (the “Code”) limits the deductibility of compensation payable in any tax year to certain covered executive officers. Section 162(m) of the Code generally provides that a company covered by the statute cannot deduct compensation paid to its most highly paid executive officers to the extent that such compensation exceeds $1 million per officer per taxable year. Under the law prior to the passage of the legislation known as the Tax Cuts and Jobs Act (the “Act”) compensation that is “performance-based” within the meaning of the Code did not count toward the $1 million limit. The performance-based compensation exception to the deductibility limit was repealed by the Act. However, under a transition rule provided for in the Act, the value of vested shares under MSU awards granted prior to November 2, 2017 is still expected to qualify for deductibility under the performance-based compensation exception.
While the Compensation Committee will always seek to maximize the deductibility of compensation paid to the Company’s executive officers, the Committee provides total compensation to the executive officers in line with competitive practice, the Company’s compensation philosophy, and the interests of stockholders. Therefore, the Company presently pays some compensation to its executive officers that may not be deductible under Section 162(m) and it is anticipated that the Company will continue to do so.
We follow Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“ASC Topic 718”) for our stock-based compensation awards. ASC Topic 718 requires companies to measure the compensation expense for all share-based payment awards made to employees and directors, including restricted stock awards and performance-based awards, based on the grant date fair value of these awards. Depending upon the type of performance conditions applicable to performance-based awards, ASC Topic 718 may require the recording of compensation expense over the service period for the award (usually, the vesting period) based on the grant date value (such as for our MSUs) or compensation expense may be recorded based on the expected probability of vesting over the vesting period, subject to adjustment as such probability may vary from period to period (such as for our DPUs)PSUs). This calculation is performed for accounting purposes and amounts reported in the compensation tables below are based on the compensation expense expected to be recorded over the vesting periods for the awards, determined as of the grant date for the awards. In the case of our MSUs, the grant date values fix the compensation expense to be recorded over the vesting period. These amounts are reported in the tables below even though our executive officers may realize more or less value from their MSU awards depending upon the actual level of achievement of the applicable performance measure. In the case of our DPUs,PSUs, no value is included in the Summary Compensation Table or in the table under the heading, Grants of Plan-Based Awards – Fiscal Year 20202022, because ASC Topic 718 requires that we assess the probability of vesting of the DPUsPSUs as of the grant date. As of the grant date, we did not consider it probable that the DPUsPSUs would become vested even though it was possible that our executive officers would receive Vested DPUs asshares upon vesting of the PSUs following the end of the fiscal year upon achievement of the applicable performance measure.
3531
The Compensation Committee of WD-40 Company’s Board of Directors (the “Board”) has reviewed and discussed with management of the Company the Compensation Discussion and Analysis included in this Proxy Statement and the Company’s annual report on Form 10-K for the year ended August 31, 2020,2022, and, based upon that review and discussion, recommended to the boardBoard that it be so included.
Compensation Committee
Gregory A. SandfortAnne G. Saunders (Chair)
Melissa Claassen
Lara L. Lee
David B. Pendarvis
Anne G. Saunders
Neal E. SchmaleGregory A. Sandfort
36
NoneAs August 31, 2022, none of our executive officers has an employment agreement or other arrangement, whether written or unwritten, providing for a term of employment or compensation for services rendered other than under specific arrangements, plans or programs described herein.
For fiscal year 2020,2022, our executive officers received compensation benefits for services rendered in fiscal year 20202022 as more fully described and reported in the Compensation Discussion and AnalysisCD&A section of this Proxy Statement and in the compensation tables below. As a relative share of reported totalTotal cash compensation for fiscal year 2020,2022, comprised of annual salary bonus (the supplemental cash award described in the Compensation Discussion and Analysis section), and earned Incentive Compensation, was 35%25% of total compensation for our CEO and from 43%38% to 51%47% of total compensation for the other NEOs.
SUMMARY COMPENSATION TABLE
The following table shows information for the three fiscal years ended August 31, 2020,2022, August 31, 2019,2021, and August 31, 2018,2020 concerning the compensation of our CEO, our CFO and the three most highly compensated executive officers other than the CEO and CFO as of the end of fiscal year 20202022 (collectively, the “Named Executive Officers” or “NEOs”):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Name and Principal Position |
| Year |
| Salary |
| Bonus |
| Stock Awards1 |
| Non-Equity |
| All Other |
| Total | ||||||||||||||
Name and Principal Position(s) |
| Year |
| Salary |
| Bonus |
| Stock Awards1 |
| Non-Equity |
| All Other |
| Total | ||||||||||||||
Garry O. Ridge |
| 2020 |
| $ 675,240 |
| $ 196,718 |
| $ 1,775,853 |
| $ 140,647 |
| $ 119,403 |
| $ 2,907,861 |
| 2022 |
| $ 692,121 |
| $ - |
| $ 2,621,233 |
| $ 181,678 |
| $ 137,381 |
| $ 3,632,413 |
Chief Executive Officer |
| 2019 |
| 662,000 |
| - |
| 1,405,209 |
| 897,285 |
| 115,347 |
| 3,079,841 |
| 2021 |
| $ 675,240 |
| $ - |
| $ 1,574,584 |
| $ 1,350,480 |
| $ 129,584 |
| $ 3,729,888 |
and Chairman of the Board |
| 2018 |
| 648,840 |
| - |
| 975,657 |
| 698,111 |
| 107,384 |
| 2,429,992 |
| 2020 |
| $ 675,240 |
| $ 196,718 |
| $ 1,775,853 |
| $ 140,647 |
| $ 119,403 |
| $ 2,907,861 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Steven A. Brass |
| 2022 |
| $ 457,583 |
| $ - |
| $ 825,029 |
| $ 96,091 |
| $ 101,180 |
| $ 1,479,882 | ||||||||||||||
President and Chief Operating Officer |
| 2021 |
| $ 446,422 |
| $ - |
| $ 787,292 |
| $ 714,275 |
| $ 97,156 |
| $ 2,045,145 | ||||||||||||||
|
| 2020 |
| $ 446,422 |
| $ 103,727 |
| $ 721,505 |
| $ 74,161 |
| $ 96,810 |
| $ 1,442,625 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jay W. Rembolt |
| 2020 |
| $ 327,011 |
| $ 47,634 |
| $ 332,844 |
| $ 34,037 |
| $ 101,178 |
| $ 842,704 |
| 2022 |
| $ 335,186 |
| $ - |
| $ 360,772 |
| $ 43,992 |
| $ 108,469 |
| $ 848,419 |
Vice President, Finance, |
| 2019 |
| 320,599 |
| - |
| 297,297 |
| 217,275 |
| 98,645 |
| 933,816 |
| 2021 |
| $ 327,011 |
| $ - |
| $ 295,136 |
| $ 327,011 |
| $ 106,787 |
| $ 1,055,945 |
Treasurer and Chief Financial Officer |
| 2018 |
| 314,313 |
| - |
| 175,592 |
| 198,874 |
| 91,064 |
| 779,843 |
| 2020 |
| $ 327,011 |
| $ 47,634 |
| $ 332,844 |
| $ 34,037 |
| $ 101,178 |
| $ 842,704 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steven A. Brass |
| 2020 |
| $ 446,422 |
| $ 103,727 |
| $ 721,505 |
| $ 74,161 |
| $ 96,810 |
| $ 1,442,625 | ||||||||||||||
President and Chief Operating Officer |
| 2019 |
| 365,937 |
| - |
| 216,024 |
| 95,272 |
| 92,651 |
| 769,884 | ||||||||||||||
|
| 2018 |
| 312,476 |
| - |
| 190,114 |
| 197,365 |
| 85,181 |
| 785,136 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Richard T. Clampitt |
| 2020 |
| $ 286,716 |
| $ 37,588 |
| $ 255,111 |
| $ 26,874 |
| $ 86,638 |
| $ 692,927 | ||||||||||||||
Phenix Q. Kiamilev |
| 2022 |
| $ 271,625 |
| $ - |
| $ 262,984 |
| $ 32,001 |
| $ 90,355 |
| $ 656,965 | ||||||||||||||
Vice President, General Counsel |
| 2019 |
| 281,094 |
| - |
| 161,842 |
| 152,401 |
| 83,058 |
| 678,395 |
| 2021 |
| - |
| - |
| - |
| - |
| - |
| - |
and Corporate Secretary |
| 2018 |
| 275,582 |
| - |
| 146,327 |
| 139,060 |
| 75,632 |
| 636,601 |
| 2020 | �� | - |
| - |
| - |
| - |
| - |
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Patricia Q. Olsem4 |
| 2020 |
| $ 300,375 |
| $ - |
| $ 288,602 |
| $ 104,419 |
| $ 96,630 |
| $ 790,026 | ||||||||||||||
Patricia Q. Olsem |
| 2022 |
| $ 330,413 |
| $ - |
| $ 360,772 |
| $ - |
| $ 104,654 |
| $ 795,839 | ||||||||||||||
Division President, Americas |
| 2019 |
| 249,533 |
| - |
| 105,589 |
| 19,304 |
| 87,825 |
| $ 462,251 |
| 2021 |
| $ 300,375 |
| $ - |
| $ 344,391 |
| $ 294,072 |
| $ 95,166 |
| $ 1,034,004 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2020 |
| $ 300,375 |
| $ - |
| $ 288,602 |
| $ 104,419 |
| $ 96,630 |
| $ 790,026 |
32
1 | Stock Awards other than |
37
SUMMARY COMPENSATION TABLE (footnote 1 continued)
The following table sets forth the amounts that would have been included for the Stock Awards for fiscal years 2020, 20192022, 2021, and 20182020 for each of the NEOs ifbased on the grant date fair values for the MSUs had been based onand the maximum number of shares targeted to be received and ifunder MSU, PSU and/or DPU award agreements. PSUs were granted starting in fiscal year 2021 because the valueCompany discontinued grants of the DPUs were included at their grant date fair values based on the maximum number of shares covered by the DPUs:after fiscal year 2020.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Executive Officer |
| Year |
| RSUs |
| MSUs |
| DPUs |
| Total Stock Awards | ||||
| Garry O. Ridge |
| 2020 |
| $ | 776,364 |
| $ | 1,998,979 |
| $ | 652,585 |
| $ | 3,427,928 |
|
|
| 2019 |
|
| 630,133 |
|
| 1,550,151 |
|
| 639,395 |
|
| 2,819,679 |
|
|
| 2018 |
|
| 480,424 |
|
| 990,467 |
|
| 535,878 |
|
| 2,006,769 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Jay W. Rembolt |
| 2020 |
| $ | 145,512 |
| $ | 374,663 |
| $ | 157,913 |
| $ | 678,088 |
|
|
| 2019 |
|
| 133,316 |
|
| 327,961 |
|
| 154,757 |
|
| 616,034 |
|
|
| 2018 |
|
| 86,463 |
|
| 178,257 |
|
| 151,369 |
|
| 416,089 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Steven A. Brass |
| 2020 |
| $ | 315,426 |
| $ | 812,158 |
| $ | 317,112 |
| $ | 1,444,696 |
|
|
| 2019 |
|
| 96,871 |
|
| 238,306 |
|
| 153,955 |
|
| 489,132 |
|
|
| 2018 |
|
| 93,614 |
|
| 193,000 |
|
| 142,739 |
|
| 429,353 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Richard T. Clampitt |
| 2020 |
| $ | 111,529 |
| $ | 287,164 |
| $ | 124,678 |
| $ | 523,371 |
|
|
| 2019 |
|
| 72,574 |
|
| 178,535 |
|
| 108,570 |
|
| 359,679 |
|
|
| 2018 |
|
| 72,053 |
|
| 148,548 |
|
| 96,487 |
|
| 317,088 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Patricia Q. Olsem |
| 2020 |
| $ | 126,170 |
| $ | 324,863 |
| $ | 131,472 |
| $ | 582,505 |
|
|
| 2019 |
|
| 52,853 |
|
| 79,182 |
|
| 53,724 |
|
| 185,759 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Named Executive Officer |
| Year |
| RSUs |
| MSUs |
| PSUs/DPUs |
| Total Stock Awards |
Garry O. Ridge |
| 2022 |
| $ 1,751,225 |
| $ 1,740,016 |
| $ 666,722 |
| $ 4,157,963 |
|
| 2021 |
| $ 778,661 |
| $ 1,591,847 |
| $ 666,004 |
| $ 3,036,512 |
|
| 2020 |
| $ 776,364 |
| $ 1,998,979 |
| $ 652,585 |
| $ 3,427,928 |
|
|
|
|
|
|
|
|
|
|
|
Steven A. Brass |
| 2022 |
| $ 390,025 |
| $ 870,008 |
| $ 352,449 |
| $ 1,612,482 |
|
| 2021 |
| $ 389,330 |
| $ 795,923 |
| $ 352,160 |
| $ 1,537,413 |
|
| 2020 |
| $ 315,426 |
| $ 812,158 |
| $ 317,112 |
| $ 1,444,696 |
|
|
|
|
|
|
|
|
|
|
|
Jay W. Rembolt |
| 2022 |
| $ 170,552 |
| $ 380,441 |
| $ 161,340 |
| $ 712,333 |
|
| 2021 |
| $ 145,950 |
| $ 298,372 |
| $ 161,168 |
| $ 605,490 |
|
| 2020 |
| $ 145,512 |
| $ 374,663 |
| $ 157,913 |
| $ 678,088 |
|
|
|
|
|
|
|
|
|
|
|
Phenix Q. Kiamilev |
| 2022 |
| $ 124,323 |
| $ 277,321 |
| $ 117,710 |
| $ 519,354 |
|
| 2021 |
| $ - |
| $ - |
| $ - |
| $ - |
|
| 2020 |
| $ - |
| $ - |
| $ - |
| $ - |
|
|
|
|
|
|
|
|
|
|
|
Patricia Q. Olsem |
| 2022 |
| $ 170,552 |
| $ 380,441 |
| $ 162,931 |
| $ 713,924 |
|
| 2021 |
| $ 170,308 |
| $ 348,167 |
| $ 162,946 |
| $ 681,421 |
|
| 2020 |
| $ 126,170 |
| $ 324,863 |
| $ 131,472 |
| $ 582,505 |
2 | Amounts reported as Non-Equity Incentive Plan Compensation represent Incentive Compensation payouts under the Company’s Performance Incentive Program as described in the narrative preceding the Summary Compensation Table and in the |
3 | All Other Compensation for each of the NEOs includes the following items: (i) employer profit sharing and matching contributions to the Company’s 401(k) |
33
The following table sets forthspecifies the separate amounts included in All Other Compensation for fiscal year 20202022 for each of the NEOs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Executive Officer |
| Retirement Benefits |
| Dividend Equivalents |
| Death Benefits |
| Welfare Benefits |
| Vehicle Allowance |
| Total All Other |
| Garry O. Ridge |
| $ 47,223 |
| $ 17,950 |
| $ 6,131 |
| $ 34,933 |
| $ 13,166 |
| $ 119,403 |
| Jay W. Rembolt |
| $ 47,223 |
| $ 812 |
| $ 6,115 |
| $ 33,202 |
| $ 13,826 |
| $ 101,178 |
| Steven A. Brass |
| $ 47,223 |
| $ 283 |
| $ - |
| $ 31,730 |
| $ 17,574 |
| $ 96,810 |
| Richard T. Clampitt |
| $ 47,223 |
| $ 469 |
| $ - |
| $ 20,600 |
| $ 18,346 |
| $ 86,638 |
| Patricia Q. Olsem |
| $ 47,223 |
| $ 233 |
| $ - |
| $ 32,577 |
| $ 16,597 |
| $ 96,630 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Named Executive Officer |
| Retirement Benefits |
| Dividend Equivalents |
| Death Benefits |
| Welfare Benefits |
| Vehicle Allowance |
| Total All Other |
Garry O. Ridge |
| $ 50,000 |
| $ 20,964 |
| $ 8,236 |
| $ 40,180 |
| $ 18,000 |
| $ 137,381 |
Steven A. Brass |
| $ 50,000 |
| $ 330 |
| $ - |
| $ 36,951 |
| $ 13,899 |
| $ 101,180 |
Jay W. Rembolt |
| $ 50,000 |
| $ 949 |
| $ 7,615 |
| $ 36,412 |
| $ 13,493 |
| $ 108,469 |
Phenix Q. Kiamilev |
| $ 50,000 |
| $ - |
| $ - |
| $ 22,355 |
| $ 18,000 |
| $ 90,355 |
Patricia Q. Olsem |
| $ 50,000 |
| $ 272 |
| $ - |
| $ 36,382 |
| $ 18,000 |
| $ 104,654 |
|
|
GRANTS OF PLAN-BASEDPLAN-BASED AWARDS - FISCAL YEAR 20202022
In December 2016, the Company’s stockholders approved the WD-40 Company 2016 Stock Incentive Plan to authorize the issuance of stock-based compensation awards to employees, directors and consultants. In addition to base salary and the Performance Incentive Compensation for fiscal year 2020 the executive officers2022, NEOs were granted RSU, MSU and DPUPSU awards under the Company’s 2016 Stock Incentive Plan.Plan as shown in the table below. Descriptions of the RSU, MSU and DPUPSU awards are provided above in the Compensation Discussion and AnalysisCD&A section under the heading, Equity Compensation.
Information concerning the grant of RSU, MSU and DPU awards to the NEOs is provided in the following Grants of Plan-Based Awards table. The table also contains information with respect to Performance Incentive Program opportunity awards for fiscal year 20202022 as described above in the Compensation Discussion and AnalysisCD&A section under the heading, Performance Incentive Program. The table provides threshold, target and maximum payout information relating to the Company’s fiscal year 20202022 Performance Incentive Program.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Estimated Future Payouts Under |
| Estimated Future Payouts Under |
|
|
|
|
|
|
| Estimated Future Payouts Under |
| Estimated Future Payouts Under |
|
|
|
| ||||||||||||||||
Name |
| Grant Date |
| Threshold |
| Target |
| Maximum |
| Threshold |
| Target |
| Maximum |
|
|
| Grant Date Fair Value of Stock and Options Awards4 |
| Grant Date |
| Threshold |
| Target |
| Maximum |
| Threshold |
| Target |
| Maximum |
|
|
| Grant Date Fair Value of Stock and Options Awards4 |
Garry O. Ridge |
| 10/7/2019 |
| $ 1 |
| $ 675,240 |
| $ 1,350,480 |
|
|
|
|
|
|
|
|
|
|
| 10/12/2021 |
| $ 1 |
| $ 692,121 |
| $ 1,384,242 |
|
|
|
|
|
|
|
|
|
|
|
| 10/12/2021 (MSU) |
|
|
|
|
|
|
| 1,738 |
| 3,476 |
| 6,952 |
|
|
| $ 870,008 | ||||||||||||||||||
|
| 10/12/2021 (RSU) |
|
|
|
|
|
|
|
|
|
|
|
|
| 3,476 |
| $ 780,049 | ||||||||||||||||||
|
| 10/12/2021 (PSU) |
|
|
|
|
|
|
| 146 |
|
|
| 2,934 |
|
|
| - | ||||||||||||||||||
|
| 03/17/2022 (RSU)5 |
|
|
|
|
|
|
|
|
|
|
|
|
| 5,347 |
| $ 971,176 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
Steven A. Brass |
| 10/12/2021 |
| $ 1 |
| $ 366,067 |
| $ 732,133 |
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
|
| 10/7/2019 (MSU) |
|
|
|
|
|
|
| 2,147 |
| 4,295 |
| 8,590 |
|
|
| $ 999,489 |
| 10/12/2021 (MSU) |
|
|
|
|
|
|
| 869 |
| 1,738 |
| 3,476 |
|
|
| $ 435,004 |
|
| 10/7/2019 (RSU) |
|
|
|
|
|
|
|
|
|
|
|
|
| 4,295 |
| $ 776,364 |
| 10/12/2021 (RSU) |
|
|
|
|
|
|
|
|
|
|
|
|
| 1,738 |
| $ 390,025 |
|
| 10/7/2019 (DPU) |
|
|
|
|
|
|
| 177 |
|
|
| 3,554 |
|
|
| $ - |
| 10/12/2021 (PSU) |
|
|
|
|
|
|
| 77 |
|
|
| 1,551 |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jay W. Rembolt |
| 10/7/2019 |
| $ 1 |
| $ 163,506 |
| $ 327,011 |
|
|
|
|
|
|
|
|
|
|
| 10/12/2021 |
| $ 1 |
| $ 167,593 |
| $ 335,186 |
|
|
|
|
|
|
|
|
|
|
|
| 10/7/2019 (MSU) |
|
|
|
|
|
|
| 402 |
| 805 |
| 1,610 |
|
|
| $ 187,332 |
| 10/12/2021 (MSU) |
|
|
|
|
|
|
| 380 |
| 760 |
| 1,520 |
|
|
| $ 190,220 |
|
| 10/7/2019 (RSU) |
|
|
|
|
|
|
|
|
|
|
|
|
| 805 |
| $ 145,512 |
| 10/12/2021 (RSU) |
|
|
|
|
|
|
|
|
|
|
|
|
| 760 |
| $ 170,552 |
|
| 10/7/2019 (DPU) |
|
|
|
|
|
|
| 43 |
|
|
| 860 |
|
|
| $ - |
| 10/12/2021 (PSU) |
|
|
|
|
|
|
| 35 |
|
|
| 710 |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steven A. Brass |
| 10/7/2019 |
| $ 1 |
| $ 287,478 |
| $ 574,955 |
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
|
| 10/7/2019 (MSU) |
|
|
|
|
|
|
| 872 |
| 1,745 |
| 3,490 |
|
|
| $ 406,079 | ||||||||||||||||||
|
| 10/7/2019 (RSU) |
|
|
|
|
|
|
|
|
|
|
|
|
| 1,745 |
| $ 315,426 | ||||||||||||||||||
|
| 10/7/2019 (DPU) |
|
|
|
|
|
|
| 86 |
|
|
| 1,727 |
|
|
| $ - | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
Richard T. Clampitt |
| 10/7/2019 |
| $ 1 |
| $ 129,022 |
| $ 258,044 |
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
Phenix Q. Kiamilev |
| 10/12/2021 |
| $ 1 |
| $ 122,232 |
| $ 244,463 |
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
|
| 10/7/2019 (MSU) |
|
|
|
|
|
|
| 308 |
| 617 |
| 1,234 |
|
|
| $ 143,582 |
| 10/12/2021 (MSU) |
|
|
|
|
|
|
| 277 |
| 554 |
| 1,108 |
|
|
| $ 138,661 |
|
| 10/7/2019 (RSU) |
|
|
|
|
|
|
|
|
|
|
|
|
| 617 |
| $ 111,529 |
| 10/12/2021 (RSU) |
|
|
|
|
|
|
|
|
|
|
|
|
| 554 |
| $ 124,323 |
|
| 10/7/2019 (DPU) |
|
|
|
|
|
|
| 33 |
|
|
| 679 |
|
|
| $ - |
| 10/12/2021 (PSU) |
|
|
|
|
|
|
| 25 |
|
|
| 518 |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Patricia Q. Olsem |
| 10/7/2019 |
| $ 1 |
| $ 120,068 |
| $ 240,136 |
|
|
|
|
|
|
|
|
|
|
| 10/12/2021 |
| $ 1 |
| $ 181,727 |
| $ 363,454 |
|
|
|
|
|
|
|
|
|
|
|
| 10/7/2019 (MSU) |
|
|
|
|
|
|
| 349 |
| 698 |
| 1,396 |
|
|
| $ 162,432 |
| 10/12/2021 (MSU) |
|
|
|
|
|
|
| 380 |
| 760 |
| 1,520 |
|
|
| $ 190,220 |
|
| 10/7/2019 (RSU) |
|
|
|
|
|
|
|
|
|
|
|
|
| 698 |
| $ 126,170 |
| 10/12/2021 (RSU) |
|
|
|
|
|
|
|
|
|
|
|
|
| 760 |
| $ 170,552 |
|
| 10/7/2019 (DPU) |
|
|
|
|
|
|
| 35 |
|
|
| 716 |
|
|
| $ - |
| 10/12/2021 (PSU) |
|
|
|
|
|
|
| 35 |
|
|
| 717 |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 | The Estimated Future Payouts Under Non-Equity Incentive Plan Awards represent Threshold, Target and Maximum payouts under the 34 |
fully discussed above in the |
2 | The Estimated Future Payouts Under Equity Incentive Plan Awards represent the Threshold, Target and Maximum number of shares to be issued upon performance vesting of MSU and |
3 | All Other Stock Awards represent RSUs described in the |
4 | Information relating to the amounts disclosed as the Grant Date Fair Value of Stock Awards is included in footnote 1 to the Summary Compensation Table above. |
5 | Shares vest on June 30, 2023. |
39
OUTSTANDING EQUITY AWARDS AT 20202022 FISCAL YEAR END
The following table provides detailed information concerning the RSU and MSU awards that were not vested as of the end of the last fiscal year for each of the NEOs:
|
|
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Stock Awards |
| Stock Awards | ||||||||||||
Name |
| Number of Shares or |
| Market Value of Shares or Units of Stock That Have Not Vested |
| Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested |
| Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested |
| Number of Shares or Units of Stock That Have Not |
| Market Value of Shares or Units of Stock That Have Not Vested |
| Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested |
| Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested |
Garry O. Ridge |
| 8,394 |
| $ 1,715,566 |
| 25,446 |
| $ 5,200,653 |
| 12,876 |
| $ 2,435,624 |
| 14,944 |
| $ 2,826,807 |
Steven A. Brass |
| 3,631 |
| $ 686,840 |
| 7,472 |
| $ 1,413,404 | ||||||||
Jay W. Rembolt |
| 1,624 |
| $ 331,913 |
| 4,896 |
| $ 1,000,644 |
| 1,519 |
| $ 287,334 |
| 3,018 |
| $ 570,885 |
Steven A. Brass |
| 2,434 |
| $ 497,461 |
| 6,446 |
| $ 1,317,433 | ||||||||
Richard T. Clampitt |
| 1,138 |
| $ 232,584 |
| 3,484 |
| $ 712,060 | ||||||||
Phenix Q. Kiamilev |
| 554 |
| $ 104,795 |
| 1,108 |
| $ 209,589 | ||||||||
Patricia Q. Olsem |
| 1,031 |
| $ 210,716 |
| 2,416 |
| $ 493,782 |
| 1,566 |
| $ 296,225 |
| 3,268 |
| $ 618,175 |
|
|
|
|
|
|
|
|
|
1 | Represents RSU awards to the NEOs that were not vested as of the fiscal year end. |
2 | The Market Value of the |
3 | Represents the maximum number of shares to be issued with respect to MSU awards granted to the NEOs that were not vested as of the fiscal year end. The maximum number of shares to be issued with respect to MSU awards equals the number of shares to be issued with respect to the MSU awards upon achievement of the highest level of achievement for such MSU awards as described above in the |
|
|
OPTION EXERCISES AND STOCK VESTED -– FISCAL YEAR 20202022
No shares of the Company’s common stock were acquired on exercise of stock options in the Company’s last fiscal year for the NEOs. The following table sets forth the number of shares of the Company’s common stock acquired upon the vesting of RSU and MSU awards in the Company’s last fiscal year and the aggregate dollar value realized with respect to such vested RSU awards. No shares of restricted stock were issued with respect to MSU and MSU awards.PSU awards that would have vested on August 31, 2022 had performance targets been attained.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Stock Awards |
|
| Stock Awards | ||||
Executive Officer |
| Number of Shares |
| Value Realized |
|
| Number of Shares |
| Value Realized |
Garry O. Ridge |
| 12,723 |
| $ 2,313,678 |
|
| 12,083 |
| $ 2,634,457 |
Steven A. Brass |
| 2,685 |
| $ 585,411 | |||||
Jay W. Rembolt |
| 2,374 |
| $ 431,712 |
|
| 2,488 |
| $ 542,459 |
Steven A. Brass |
| 1,928 |
| $ 350,607 |
| ||||
Richard T. Clampitt |
| 1,940 |
| $ 352,789 |
| ||||
Phenix Q. Kiamilev |
| - |
| $ - | |||||
Patricia Q. Olsem |
| 647 |
| $ 117,657 |
|
| 1,141 |
| $ 248,772 |
|
|
|
|
|
|
1 | The Number of Shares Acquired on Vesting |
35
2 | The Value Realized on Vesting for |
40
NONQUALIFIED DEFERRED COMPENSATION – FISCAL YEAR 20202022
The following table provides information concerning compensation received by the NEOs that is subject to deferral under applicable RSU and DPU award agreements:
|
|
|
|
|
|
|
|
|
Executive Officer |
| Aggregate |
| Aggregate | ||||
Named Executive Officer |
| Aggregate |
| Aggregate | ||||
Garry O. Ridge |
| $ 151,270 |
| $ 1,400,207 |
| $ (345,770) |
| $ 1,295,935 |
Jay W. Rembolt |
| $ 6,845 |
| $ 63,358 |
| $ (15,646) |
| $ 58,640 |
Steven A. Brass |
| $ 2,385 |
| $ 22,073 |
| $ (5,451) |
| $ 20,429 |
Richard T. Clampitt |
| $ 3,952 |
| $ 36,584 | ||||
Phenix Q. Kiamilev |
| $ - |
| $ - | ||||
Patricia Q. Olsem |
| $ 1,965 |
| $ 18,190 |
| $ (4,492) |
| $ 16,835 |
|
|
|
|
|
1 | The Aggregate Earnings in Last FY represents the |
2 | The Aggregate Balance at Last FYE represents the value as of August 31, |
SUPPLEMENTAL DEATH BENEFIT PLANS ANDAND SUPPLEMENTAL INSURANCE BENEFITS
The Company maintains Supplemental Death Benefit Plans for Messrs. Ridge and Rembolt.Rembolt, which will terminate upon their separation from the Company as an employee. Under the death benefit plan agreements, the NEO’s designated beneficiary or estate, as applicable, will receive a death benefit equal to the NEO’s then current base salary in the event of his death prior to retirement from the Company. Each of the NEOs is also eligible to receive life insurance benefits offered to all employees of the Company.
The death benefits under the Supplemental Death Benefit Plans are not formally funded but the Company has purchased key man life insurance policies owned by the Company to cover its benefit obligations. Non-employee directors do not have death benefit plan agreements.
Based upon their fiscal year 20202022 base salaries, the supplemental death benefit to be provided to Messrs. Ridge and Rembolt as of the end of fiscal year 20202022 would have been as set forth in the following table:
|
| |
|
|
|
Named Executive Officer |
| Death Benefit |
Garry O. Ridge |
| $ |
Jay W. Rembolt |
| $ |
335,186 |
CHANGE OF CONTROL SEVERANCE AGREEMENTS
CHANGE OF CONTROL SEVERANCE AGREEMENTS
Each executive officer serves at the discretion of the Board of Directors. The Company has entered into Change of Control Severance Agreements (“SeveranceCoC Agreements”) with each of the NEOs. The SeveranceCoC Agreements provide that each executive officer will receive certain severance benefits if his or her employment is terminated without “Cause” or if he or she resigns for “Good Reason”,Reason,” as those terms are defined in the SeveranceCoC Agreements, within two years after a “Change of Control” as defined in the SeveranceCoC Agreements and summarized below. If the executive officer’s employment is terminated during the aforementioned two-year period by the Company without “Cause” or by the executive officer for “Good Reason”, the executive officer will be entitled to a lump sum payment (subject to limits provided by reference to Section 280G of the Internal Revenue Code which limits the deductibility of certain payments to executives upon a change in control) of twice the executive officer’s
41
salary, calculated based on the greater of the executive officer’s then current annual salary or a five-year
36
average, plus twice the executive officer’s earned Incentive Compensation, calculated based on the greater of the most recent annual earned Incentive Compensation or a five-year average. Further, any of the executive officer’s outstanding equity incentive awards that are not then fully vested (with the exception of DPUPSU awards), will be accelerated and vested in full following such termination of employment within such two-year period and the executive officer will be entitled to continuation of health and welfare benefits under the Company’s then existing benefit plans or equivalent benefits for a period of up to two years from the date of termination of employment. No employment rights or benefits other than the change of control severance benefits described in this paragraph are provided by the SeveranceCoC Agreements.
For purposes of the SeveranceCoC Agreements and subject to the express provisions and limitations contained therein, a “Change of Control” means a transaction or series of transactions by which a person or persons acting together acquire more than 30% of the Company’s outstanding shares; a change in a majority of the incumbent members of the Company’s Board of Directors as specified in the SeveranceCoC Agreements, a reorganization, merger or consolidation as specified in the SeveranceCoC Agreements or a sale of substantially all of the assets or complete liquidation of the Company. As specified more particularly in the SeveranceCoC Agreements, a “Change of Control” does not include a reorganization, merger or consolidation or a sale or liquidation where a majority of the incumbent members of the Company’s Board of Directors continue in office and more than 60% of the successor company’s shares are owned by the Company’s pre-transaction stockholders.
The SeveranceCoC Agreements have a term of two years, subject to automatic renewal for successive two-year periods unless notice of non-renewal is provided by the Company’s Board of Directors not less than six months prior to the end of the current term. The term of the SeveranceCoC Agreements will be automatically extended for a term of two years following any “Change of Control.”
The following table sets forth the estimated amounts payable to each of the NEOs pursuant to their respective SeveranceCoC Agreements on the assumption that the employment of each NEO was terminated without “Cause” or otherwise for “Good Reason” effective as of the end of fiscal year 20202022 following a “Change of Control” as provided for in the SeveranceCoC Agreements. The table also includes the value, as of the end of the fiscal year, of all unvested RSU and MSU awards that were not vested as of the end of fiscal year 2020.2022.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Officer |
| Severance Pay1 |
| Welfare Benefits2 |
| Accelerated Vesting of |
| Total Change of | ||||||||
Garry O. Ridge |
| $ 3,145,050 |
| $ 63,145 |
| $ 4,315,893 |
| $ 7,524,088 | ||||||||
Named Executive Officer |
| Severance Pay1 |
| Welfare Benefits2 |
| Accelerated Vesting of |
| Total Change of | ||||||||
Garry O. Ridge4 |
| $ 4,085,202 |
| $ 73,491 |
| $ 3,849,028 |
| $ 8,007,721 | ||||||||
Jay W. Rembolt |
| $ 1,088,572 |
| $ 62,745 |
| $ 832,235 |
| $ 1,983,552 |
| $ 1,324,394 |
| $ 69,091 |
| $ �� 572,776 |
| $ 1,966,261 |
Steven A. Brass |
| $ 1,083,388 |
| $ 58,745 |
| $ 1,156,178 |
| $ 2,298,311 |
| $ 2,343,716 |
| $ 69,091 |
| $ 1,393,542 |
| $ 3,806,349 |
Richard T. Clampitt |
| $ 878,234 |
| $ 37,919 |
| $ 588,614 |
| $ 1,504,767 | ||||||||
Phenix Q. Kiamilev |
| $ 671,673 |
| $ 41,555 |
| $ 209,590 |
| $ 922,818 | ||||||||
Patricia Q. Olsem |
| $ 698,395 |
| $ 61,745 |
| $ 492,352 |
| $ 1,252,492 |
| $ 1,248,970 |
| $ 69,091 |
| $ 605,312 |
| $ 1,923,373 |
|
|
|
|
|
|
|
|
|
1 |
|
2 |
|
3 | Acceleration of vesting of RSU and MSU awards is governed by applicable provisions of the |
4Mr. Ridge’s CoC Agreement terminated on August 31, 2022 pursuant to the terms of the Transition Agreement (defined below).
SUMMARY OF TRANSITION AND RELEASE AGREEMENT WITH GARRY O. RIDGE
In connection with Mr. Ridge’s retirement as CEO and Chairman of the Board, the Company and Mr. Ridge entered into a Transition and Release Agreement on March 11, 2022 (“Transition Agreement”). The Transition Agreement provides that Mr. Ridge retires as CEO, effective August 31, 2022, that he remains an employee of the Company until January 2, 2023, that he be compensated $34,606 per month effective September 1, 2022, and that he serves as Chairman of the Board until his term expires on December 13, 2022. Mr. Ridge’s outstanding equity awards continue to be treated in accordance with the terms in their respective award agreements, and he will not be eligible for any grants of equity awards in fiscal year 2023. As of January 3, 2023, Mr. Ridge will serve as a consultant to the Company at a monthly rate of $34,606 and will continue to provide leadership support and other advisory services to Mr. Brass, who was appointed CEO effective September 1, 2022, and the Board until June 30, 2023.
4237
As consideration for Mr. Ridge’s execution of waivers and releases of claims and covenants in favor of the Company, and in order to help effect an orderly CEO transition to ensure continued alignment and focus on long-term stockholder interests, the Company granted RSUs approximately equal to $1,000,000 in March 2022 pursuant to the terms of the Transition Agreement and agreed to provide 36 months of COBRA coverage. The grant of 5,347 RSUs in March 2022 is reflected in the applicable tables disclosing Mr. Ridge’s stock awards and beneficial ownership in this Proxy Statement.
The Transition Agreement and related agreements are filed as exhibits to the Company’s Current Report on Form 8-K filed with the SEC on March 16, 2022.
As required by the Dodd-Frank Wall Street Reform and Consumer Protection Act and the SEC, the pay ratio disclosure rule, we are providing the ratio of the total annual compensation of our CEO, Mr. Ridge, to that of the Company’s “median employee” for fiscal year 2020. For fiscal year 2020, the pay ratio of the CEO’s compensation to the median employee’s compensation2022 was approximately 29 to 42:1.
As authorized by applicable To determine the CEO pay ratio, disclosures, wethe total annual compensation for the median employee for fiscal year 2022 was calculated to be $87,169, which included the same elements of compensation required to be in the Summary Compensation Table, and was calculated in the same manner as the CEO’s total annual compensation, which was $3,632,412 for fiscal year 2022.
SEC rules allow the Company to identify its median employee once every three years unless there has been a change in its employee population or employee compensation arrangements that it reasonably believes would result in a significant change in its pay ratio disclosure. The Company used the same median employee for fiscal year 2022 as fiscal year 2021, after considering the changes to employee population and compensation programs during 2022, as well as the 2022 compensation of the median employee.
We identified the Company’s median employee from all 557 employees of the Company (excluding the CEO) as of August 31, 2018. During the years ended August 31, 2019 and 2020 there were no changes in the Company’s employee population or compensation practices that could reasonably result in a significant change in the reported pay ratio disclosure. In identifying the Company’s median employee as of August 31, 2018, we2021. We included all worldwide employees, including full-time, part-time and temporary employees. As of August 31, 2018, the Company employed 491 individualsemployees, located in 15 countries. As of August 31, 2020, the Company employed 522 individuals located in 15 countries.
For purposes of identifying17 countries at such time. To identify the Company’s median employee as of August 31, 2018,in fiscal year 2021, we calculated total compensation for fiscal year 20182021 for each employee other than the CEO by including salary or regular hourly wages paid in the fiscal year, Incentive Compensation paid during the fiscal year under the Company’s Performance Incentive Program, and the grant date value of equity awards (RSUsRSUs and MSUs)MSUs granted to employees in the fiscal year. Compensation paid to employees who were hired after the beginning of the fiscal year 2021 or who terminated prior to the end of the fiscal year 2021 was not annualized. For employees who received compensation denominated in a foreign currency, such amounts were converted to U.S. dollars atusing average annual exchange rates as of August 31, 2018.2021.
To determineAs of August 31, 2022, the CEO pay ratio, the total annual compensation for the median employee was calculated for fiscal year 2020 by including all elements of compensation required to be includedCompany employed 603 employees located in the Summary Compensation Table for fiscal year 2020 in the same manner as such compensation was calculated for the CEO.15 countries. The Company’s median employee is located in the United States. U.S.
For fiscal year 2020, the total annual compensation of our CEO was $2,907,861 and the total annual compensation of our median employee was $99,580. Accordingly, the ratio of the total annual compensation of our CEO to that of our median employee was approximately 29 to 1.EQUITY COMPENSATION PLAN INFORMATION
The following table sets forth certain equity compensation plan information as of August 31, 2022:
|
|
|
|
|
|
|
|
| Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) |
Plan category | (a) | (b) | (c) |
Equity compensation plans approved by security holders (1) |
136,9372 |
N/A |
384,859 |
Equity compensation plans not approved by security holders |
N/A |
N/A |
N/A |
Total | 136,937 | N/A | 384,859 |
(1)The 2016 Stock Incentive Plan, which authorizes the grant of 1,000,000 shares of common stock, was approved by our stockholders at our 2016 annual meeting.
(2) | Represents shares of common stock subject to unvested 78,604 RSUs, vested 3,306 DPUs, and 37,201 MSU and 17,826 PSU awards assuming the issuance of shares based on target performance. |
4338
AUDIT-RELATED MATTERS
Fees Paid to Independent Registered Accounting Firm
The following table presents fees for professional services rendered by PricewaterhouseCoopers LLC (“PwC”) for fiscal years 2022 and 2021:
|
|
|
|
|
|
|
|
|
|
| 2022 |
|
| 2021 |
| ||
Audit fees1 |
| $ | 1,642,950 |
|
| $ | 1,398,900 |
|
Audit-related fees2 |
|
| — |
|
|
| — |
|
Tax fees3 |
| $ | 189,025 |
|
| $ | 217,925 |
|
All other fees4 |
| $ | 900 |
|
| $ | 2,700 |
|
Total fees |
| $ | 1,832,875 |
|
| $ | 1,619,525 |
|
1Professional services rendered for the audit of the Company’s consolidated annual financial statements, the review of the interim consolidated financial statements included in quarterly reports, and services normally provided by PwC in connection with statutory and regulatory filings or engagements.
2Assurance and related services reasonably related to the audit and/or review of the Company’s consolidated financial statements that are not reported under “Audit Fees.”.
3Tax return preparation, tax compliance, tax advice and/or tax planning services
4Access provided by PwC to its online research reference and disclosure checklist materials
The possible effect on the independence of the auditor is considered by the Audit Committee. There is no direct or indirect understanding or agreement that places a limit on current or future years’ audit fees or permissible non-audit products and services.
Pre-approval Policies and Procedures
The Audit Committee’s policy is to pre-approve all audit and permissible non-audit products and services provided by the auditor. These products and services may include audit services, audit-related services, tax services, software and other products or services. Pre-approval is generally provided for up to one year and any pre-approval is detailed as to the particular service or category of services and is generally subject to a specific budget. The auditor and management are required to periodically report to the Audit Committee regarding the extent of services provided by the auditor in accordance with this pre-approval, and the fees for the services performed to date. The Audit Committee may also pre-approve particular services on a case-by-case basis. All services described above received pre-approval pursuant to policies and procedures that were established to comply with SEC rules that require pre-approval of audit and non-audit services.
Related Party Transactions Review and Oversight
The Audit Committee has responsibility for review and oversight of related party transactions for potential conflicts of interest. Related party transactions include any independent business dealings between the Company and related parties who consist of, or are related to, the Company’s executive officers, directors, director nominees and holders of more than 5% of the Company’s shares. Such transactions include business dealings with parties in which any related party has a material direct or indirect interest. The Audit Committee has adopted a written policy to provide for its review and oversight of related party transactions. Executive officers and directors are required to notify the Corporate Secretary of the Company of any proposed or existing related party transactions in which they have an interest. The Corporate Secretary and the Audit Committee also rely upon the Company’s disclosure controls and procedures adopted pursuant to Exchange Act rules for the purpose of assuring that matters requiring disclosure, including transactions that may involve a related party or may otherwise involve the potential for conflicts of interests, are brought to the attention of management and the Audit Committee on a timely basis. Certain related party transactions do not require Audit Committee review and approval. Such transactions are considered pre-approved. Pre-approved transactions include:
· | compensation arrangements approved by the Compensation Committee or the Board and expense reimbursements consistent with the Company’s expense reimbursement policy; |
· | transactions in which the related party’s interest is derived solely from the fact that he or she serves as a director of another corporation that is a party to the transaction; |
39
· | transactions in which the related party’s interest is derived solely from his or her ownership (combined with the ownership interests of all other related parties) of not more than a 5% beneficial interest (but excluding any interest as a general partner of a partnership) in an entity that is a party to the transaction; and |
· | transactions available to all employees of the Company generally. |
If a related party transaction is proposed or if an existing transaction is identified, the Audit Committee has authority to disapprove, approve or ratify the transaction and to impose such restrictions or other limitations on the transaction as the Committee may consider necessary to best assure that the interests of the Company are protected and that the related party involved is not in a position to receive an improper benefit. In making such determination, the Audit Committee considers such factors as it deems appropriate, including without limitation (i) the benefits to the Company of the transaction; (ii) the commercial reasonableness of the terms of the transaction; (iii) the dollar value of the transaction and its materiality to the Company and to the related party; (iv) the nature and extent of the related party’s interest in the transaction; (v) if applicable, the impact of the transaction on a non-employee director’s independence; and (vi) the actual or apparent conflict of interest of the related party participating in the transaction.
During the fiscal year ended August 31, 2021, there were no transactions required to be reported pursuant to the requirements of Item 404(a) of Regulation S-K under the Exchange Act.
In accordance with its Charter,charter, the Audit Committee provides assistance to the Company’s Board of Directors (“Board”) in fulfilling its oversight responsibilities relating to the quality and integrity of the accounting, auditing, and reporting practices of the Company, including assessment of the effectiveness of internal controls over financial reporting. Each member of the Audit Committee meets the independence criteria prescribed by applicable regulations and rules of the SEC for audit committee membership and is an “independent director” within the meaning of applicable NASDAQ listing standards.
Management is responsible for preparing the Company’s financial statements in accordance with generally accepted accounting principles generally accepted in the United States of AmericaU.S. (“GAAP”) and for establishing and maintaining internal control over financial reporting. The Company’s independent registered public accounting firm (“auditor”) is responsible for performing an integrated audit of the Company’s financial statements and internal control over financial reporting and expressing opinions as to whether the financial statements have been prepared in accordance with GAAP and as to management’s assessment of the effectiveness of internal control over financial reporting.
The Audit Committee reviewed the Company’s audited financial statements for the fiscal year ended August 31, 2020.2022. The Audit Committee discussed and reviewed with management the audited financial statements and management’s assessment of the effectiveness of its internal controls over financial reporting. The Audit Committee discussed and reviewed with the Company’s auditor the audited financial statements and the auditor’s attestation report regarding effectiveness of management’s internal controls over financial reporting. The Audit Committee also discussed with the auditor those matters required to be discussed by PCAOB Auditing Standard No. 1301, Communications with Audit Committees, which provides that certain matters related to the conduct of the financial statement audit are to be communicated to the Audit Committee. In fulfilling its oversight responsibilities, the Audit Committee met separately with management and separately with the Company’s auditor to discuss results of audit examinations and evaluations of internal controls.
The Audit Committee is responsible for the appointment, retention, compensation, and oversight of the Company’s auditor. In this regard, the Audit Committee discussed with the auditor theirits independence from management and the Company, including matters in written documents and a letter received from the auditor as required by PCAOB Rule 3526, Communication with Audit Committees Concerning Independence. In evaluating the auditor’s independence, the Audit Committee also considered whether the auditor’s provision of any non-audit services impaired or compromised the firm’sits independence.
The Audit Committee considered several factors in selecting PricewaterhouseCoopers LLP (“PwC”) as the Company’s auditor, including the firm’sits independence and internal quality controls, the overall depth of talent, and theirits familiarity with the Company’s businesses and internal controls over financial reporting. Further, in conjunction with the mandated rotation of auditing firm’s coordinatingan auditor’s lead, concurring and/or relationship partner (each an “audit partner”), the Audit Committee and its chair oversee and are directly involved in the selection process for any change in coordinatingaudit partners.
40
Based on the reviews and discussions referred to above, the Audit Committee recommended to the Board that the Company’s audited financial statements be included in its annual report on Form 10-K for its fiscal year ended August 31, 2020,2022, and that PricewaterhouseCoopers LLPPwC serve as the Company’s independent registered public accounting firmauditor for the fiscal year ending August 31, 2021. 2023.
Audit Committee
Daniel T. Carter, Chair
Lara L. Lee
Edward O. Magee, Jr.
Trevor I. Mihalik
Graciela I. Monteagudo
Daniel E. Pittard
Anne G. Saunders
Neal E. Schmale David B. Pendarvis
44
RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of the Board of Directors has appointed PricewaterhouseCoopers LLP as the independent registered public accounting firm for the Company to audit the consolidated financial statements of the Company for fiscal year 2021. Although ratification by stockholders is not required by law, the Audit Committee has determined that it is desirable to request ratification of this selection by the stockholders. Notwithstanding its selection, the Audit Committee, in its discretion, may appoint a new independent registered public accounting firm at any time during the year if the Audit Committee believes that such a change would be in the best interests of the Company and its stockholders. If the stockholders do not ratify the appointment of PricewaterhouseCoopers LLP, the Audit Committee may reconsider its selection.
A majority of the votes of the common stock present or represented at the meeting is required for approval. Broker non-votes will be voted in favor of approval. PricewaterhouseCoopers LLP acted as the Company’s independent registered public accounting firm during the past fiscal year and, unless the Audit Committee appoints new independent accountants, PricewaterhouseCoopers LLP will continue to act in such capacity during the current fiscal year. It is anticipated that a representative of PricewaterhouseCoopers LLP will attend the Annual Meeting of Stockholders, will have an opportunity to make a statement if he or she desires to do so and will be available to respond to appropriate questions.
The Audit Committee’s policy is to pre-approve all audit and permissible non-audit products and services provided by the independent registered public accounting firm. These products and services may include audit services, audit-related services, tax services, software and other products or services. Pre-approval is generally provided for up to one year and any pre-approval is detailed as to the particular service or category of services and is generally subject to a specific budget. The independent accountants and management are required to periodically report to the Audit Committee regarding the extent of services provided by the independent public accountants in accordance with this pre-approval, and the fees for the services performed to date. The Audit Committee may also pre-approve particular services on a case-by-case basis. The possible effect on the independence of the public accountants is considered by the Audit Committee. There is no direct or indirect understanding or agreement that places a limit on current or future years’ audit fees or permissible non-audit products and services.
AUDIT FEESSTOCKHOLDER PROPOSALS FOR OUR 2023 ANNUAL MEETING
PricewaterhouseCoopers LLP has provided audit services
For a stockholder proposal otherwise satisfying the eligibility requirements of SEC Rule 14a-8 to be considered for inclusion in our Proxy Statement for our 2023 annual meeting, it must be received by us at our principal office, 9715 Businesspark Avenue, San Diego, CA 92131 on or before July 6, 2023.
For an eligible stockholder or group of stockholders to nominate a director nominee for election at our 2023 annual meeting pursuant to the Companyproxy access provision of our Bylaws, such eligible stockholder or group of stockholders must comply with the then current advance notice requirements in our Bylaws and deliver the proposal to our Corporate Secretary between June 6, 2023 and July 6, 2023 in order for eachsuch proposal to be considered timely. In addition, our Bylaws require the eligible stockholder or group of stockholders to update and supplement such information as of specified dates.
In addition, if a stockholder desires to bring business (including director nominations) before our 2023 annual meeting that is not the past two fiscal years. Audit fees consistsubject of feesa proposal timely submitted for professional services renderedinclusion in our 2023 Proxy Statement, written notice of such business, as currently prescribed in our Bylaws, must be received by our Corporate Secretary between June 6, 2023 and 5:00 p.m., Pacific Time, on July 6, 2023. For additional requirements, a stockholder may refer to our current Bylaws, Article II, Section 2.15, “Nomination of Directors,” and Article II, Section 2.17, “Proxy Access,” a copy of which may be obtained from our Corporate Secretary upon request and without charge. See “Stockholder Communications with the Board” for contact information. If we do not receive timely notice pursuant to our Bylaws, the proposal will be excluded from consideration at the annual meeting.
In addition to satisfying the foregoing requirements under our Bylaws, to comply with the universal proxy rules, stockholders who intend to solicit proxies in support of director nominees for the audit of2023 annual meeting other than our nominees must provide notice that sets forth the Company’s consolidated annual financial statements,information required by Rule 14a-19 under the review of the interim consolidated financial statements included in quarterly reports and services that are normally provided by PricewaterhouseCoopers LLP in connection with statutory and regulatory filings or engagements. The aggregate fees billed to the Company by PricewaterhouseCoopers LLP for audit services performed for the Company for the past two fiscal years were $1,307,705 for the year ended August 31, 2020, and $1,301,862 for the year ended August 31, 2019.Exchange Act no later than October 14, 2023.
Audit-related services consist of assurance and related services that are reasonably related to the performance of the audit or review of the Company’s consolidated financial statements and are not reported under “Audit Fees.” Audit-related services billed to the Company by PricewaterhouseCoopers LLP were $64,820 for the year ended August 31, 2019. No such fees were billed to the Company by PricewaterhouseCoopers LLP for the year ended August 31, 2020. The fees for fiscal year 2019 were related to discussions, review and testing of certain information related to the adoption of Accounting Standard Update No. 2016-02, “Leases”, which the Company adopted in fiscal year 2020. FORWARD-LOOKING STATEMENTS
Tax fees consistThis Proxy Statement contains forward-looking statements within the meaning of tax compliance, tax advice, tax consultingthe Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Exchange Act. When used in this Proxy Statement, the words “estimated,” “anticipated,” “expect,” “believe,” “intend” and similar expressions are intended to identify forward-looking statements. Forward-looking statements include discussions of strategy, plans or tax planning services provided by PricewaterhouseCoopers LLPintentions of management. Forward-looking statements are subject to the Company. Tax fees billed torisks, uncertainties, and assumptions about the Company, by PricewaterhouseCoopers LLP were $202,200 forand future events and actual results, financial and otherwise, may differ materially from the year ended August 31, 2020 and $45,000 forresults discussed in the year ended August 31, 2019. The fees for fiscal year 2020 were associated with both tax compliance and tax consulting services. Such fees for fiscal year 2019 were associated with tax consulting services.
Other fees for services provided by PricewaterhouseCoopers LLP for fiscal years 2020 and 2019 consisted of fees for access provided by PricewaterhouseCoopers LLPforward-looking statements. Readers are cautioned not to its online research reference and disclosure checklist materials. Other fees for fiscal year 2019 also included fees associated with process evaluation advisory services. The aggregate fees billed to the Company by PricewaterhouseCoopers LLP for other services performed for the Company were $2,700 for the year ended August 31, 2020, and $47,766 for the year ended August 31, 2019.
45
ITEM NO. 4
SHAREHOLDER PROPOSAL TO ADOPT A POLICY TO INCLUDENON-MANAGEMENT EMPLOYEES AS PROSPECTIVE DIRECTOR CANDIDATES
James McRitchie, 9295 Yorkship Court, Elk Grove, CA 95758, owner of at least 30 sharesplace undue reliance on forward-looking statements, which speak only as of the Company’s common stock, has given noticedate of this Proxy Statement. While forward-looking statements reflect our good faith beliefs, they are not guarantees of future performance. We undertake no obligation to publicly release the results of any revisions to these forward-looking statements that he intendsmay be made to submitreflect events or circumstances after the following proposal atdate of this Proxy Statement or to reflect the Annual Meetingoccurrence of Stockholders. In accordance with SEC rules, the following is the complete text of the proposal exactly as submitted.
Proposal 4 -Increase Diversity of Director Nominees
Resolved: Shareholders of WD-40 Company urge the board to adopt a policy (the “Policy”) of promoting significant representation of employee perspectives among corporate decision makers by requiring the initial list of candidates from which new director nominees are chosen (the “Initial List”) by the Governance Committee include (but need not be limited to) non-management employees. The Policy should provide that any third-party consultant asked to furnish an Initial List will be requested to include such candidates.
Whereas: There is growing consensus, the presence of employees on corporate boards can contribute to long-term corporate sustainability. Policymakers note, the status quo of having companies run exclusively for the benefit of shareholders contributes to “stagnant wages, runaway executive compensation and underinvestment in research and innovation.” Meanwhile, the Business Roundtable is repurposing corporations to align with stakeholders’ interests, generating shared prosperity for business and society, including investing in employees.
Research suggests that employee representation grows the long-term value of a company in several ways. According to the National Bureau of Economic Research, giving workers formal control rights increases female board representation and raises capital formation. In Germany, the “co-determination” model of shared governance has been lauded as an excellent check and balance against short-termist capital allocation practices.
The 2018 UK Corporate Governance Code calls on boards to establish a method for gathering the views of the workforce such as a director appointed from the workforce, a formal workforce advisory panel or designating a director to liaise with workers.
Senators Baldwin and Warren have introduced legislation that codifies employee representation on corporate boards, noting that modern corporate governance needs to be accountable to and inclusive of a wider array of interests, notably employees. Additionally, polling demonstrates bipartisan public support (over 53%) for employee representation.
Anticipated benefits include reduced turnover as employees are more impowered to make firm-specific investments, better informed decision-making because employees have specialized knowledge, better monitoring of management with increased information channels, and reduced shareholder myopia, since employees often take a longer-term view.
While the current WD-40 Company board satisfies board independence requirements, it is lacking in representation from non-management employees who understand daily operations thoroughly. Their diversity also better reflects the racial, gender, and economic diversity of the company’s consumer base.
The Policy we propose resembles the Rooney Rule in the National Football League (NFL), which requires teams to interview minority candidates for head coaching and senior operations openings. By adopting the Rooney Rule, the NFL was able to increase diversity and set a precedent for other industries. Policies somewhat similar to the one advanced by this Proposal have been adopted by Activision Blizzard, Inc., Dover Corporation, Expedia Group, Fastenal Company, Genuine Parts Company, Hilton Worldwide Holdings, Lamb Weston Holdings, L Brands, MarketAxess Holdings, Nektar Therapeutics, Robert Half International, Ross Stores, UDR, and VeriSign.
Increase Long-Term Shareholder Value
Vote to Increase Diversity of Director Nominees – Proposal 4
unanticipated events.
4641
BOARD OF DIRECTORS’ STATEMENT IN OPPOSITION TO ITEM NO. 4INCORPORATION BY REFERENCE
The Board has carefully considered this shareholder proposal
Notwithstanding anything to the contrary set forth in any of our previous filings under the Securities Act or the Exchange Act, which might incorporate future filings made by us under those statutes, the preceding Compensation Committee Report and concluded that its adoption wouldAudit Committee Report will not be in the best interestsincorporated by reference into any of the Company or its stockholders.
The Board believes that the Corporate Governance Committee’s existing director selection process identifies the best and most qualified director nominees. The Corporate Governance Committee reviews the applicable skills and characteristics required of director nominees, with the objective of balancing the composition of the Board of Directors to achieve a combination of individuals of different backgrounds and experiences directly relevant to the strategies and objectives of the Company. Director candidates are expected to share WD-40 Company values and to have demonstrated an ability to promote and sustain a strong corporate culture, while effectively guiding a complex, global company. The Board endeavors to assure that the mix of skills and experiences among existing directors is appropriate for the evolving business of the Company. A list of specific skills presently included among the areas of expertise and experience that the Committee believesthose prior filings, nor will best serve the Company is set forth above in this Proxy Statement under the heading, Corporate Governance Committee Nomination Policies and Procedures. The Corporate Governance Committee also considers the candidate’s independence, reputation, integrity, range of experience and background, the demands of other professional commitments, the ability to exercise sound judgment, and other relevant factors. Candidates are screened to ensure that each has qualifications that complement the competencies of the Board. Finally, candidates are selected for their demonstrated ability to understand the broad range of functions in a complex public company setting, how to perform the role of director, and their capabilities to guide an organization through an evolving future. Through this director selection process, the Corporate Governance Committee and Board are able select nominees with the skills and qualifications that best serve the Company.
In addition, candidates for director typically have been suggestedany such reports be incorporated by the Company’s directors or employees. Stockholders also can recommend prospective director candidates, including Company employees, for the Corporate Governance Committee’s consideration. The Corporate Governance Committee considers recommendations by stockholders in the same manner as nominees recommended by directors, members of management or other persons.
Further, the Board is committed to continually receiving input from employees regarding workforce concerns and to responding to that input. As part of the Board’s oversight of human resource activities and business operations generally, directors attend events where employees are invited to interact personally with the Board, both at our periodic Global Tribal Learning Conferences and at ad hoc events specific to key elements of our engagement and inclusion efforts. We are clear to note in our regular investor communications that employee engagement is a cornerstone of our success. The Company surveys employees through a confidential biennial employee engagement survey. The results of the survey are shared with the Board to ensure that directors are aware of workforce concerns. This is an ongoing process that includes the highest levels of the Company, so that the Board and management are aware of workforce concerns and can act on those concerns.
The Board believes that the results of its employee engagement surveys show the Company’s commitment to a corporate culture in which employee feedback is valued and acted upon. Overall, our engagement survey results for over ten years has yielded an engagement level of 93%. Here is a sample of some of the responses from the most recent biennial survey:
|
|
|
|
|
|
|
|
Given the Corporate Governance Committee’s existing director selection process and the Board’s extensive engagement with management on sustaining corporate culture and in addressing workforce concerns, the Board believes that adoption of the policy requested by the proposal is unnecessary and not in the best interests of our stockholders.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE “AGAINST” THIS PROPOSAL.
47
Shareholder proposals must be receivedreference into any future filings made by the Company no soonerunder those statutes. In addition, information on our website, other than June 1, 2021 and not later than July 1, 2021 to be included in theour Proxy Statement, Notice of Annual Meeting and form of proxy, foris not part of the next annual meeting. Any proposal submitted outside of these dates will be considered untimely in order to be considered at the Company’s 2021 Annual Meeting of Stockholders in accordance with the Company’s Bylaws.proxy soliciting material and is not incorporated herein by reference.
By Order of the Board of Directors,
Richard T. ClampittPhenix Q. Kiamilev
Vice President, General Counsel and Corporate Secretary
Dated: October 29, 2020
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, STOCKHOLDERS ARE URGED TO FILL IN, SIGN AND RETURN THE ACCOMPANYING FORM OR FORMS OF PROXY IN THE ENCLOSED ENVELOPE.
November 2, 2022
4842