Proxies or other voting instruction forms that are signed and returned without voting instructions will be voted in accordance with the recommendations of the CSI board of directors. The CSI board of directors unanimously recommends that shareholders vote FOR each proposal presented at the annual meeting.

How are proxies solicited and what is the cost?

CSI will bear all expenses incurred in connection with the solicitation of proxies and printing, filing and mailing this proxy statement. We have engaged The Proxy Advisory Group, LLC (“PAG”) to assist in the solicitation of proxies and provide related advice and information support, for a services fee and the reimbursement of customary disbursements, which are not expected to exceed $10,000 in total. CSI will be solely responsible for the costs of the solicitation.

Additionally, some of CSI’s directors, officers and regular employees may solicit proxies personally or by telephone, letter, facsimile, or email. These directors, officers and employees will not be paid additional remuneration for their efforts but may be reimbursed for out-of-pocket expenses incurred in connection therewith. We will request brokers, custodians, nominees, and other record holders to forward copies of the proxy statement

and related soliciting materials to persons for whom they hold shares of our common stock and to request authority for the exercise of proxies. In such cases, upon the request of the record holders, we will reimburse theses holders for their reasonable out-of-pocket expenses.

How do I vote my shares?

If you are a shareholder of record, you may give a proxy to be voted at the meeting either:

If you hold shares beneficially in street name, you may also vote by proxy over the Internet by following the instructions in the Notice of Internet Availability of Proxy Materials or, if you received printed proxy materials, you may also vote by mail or telephone by following the instructions in the voting instruction card provided to you by your broker, bank, trustee or nominee. The telephone and Internet voting procedures have been set up for your convenience. The procedures have been designed to authenticate your identity, to allow you to give voting instructions, and to confirm that those instructions have been recorded properly. If you choose not to vote over the Internet or by completing a Proxy card, you may also vote in person at the meeting as described in “May I vote my shares in person at the meeting?” below.

What does it mean if I receive more than one Notice of Internet Availability of Proxy Materials, proxy card or voting instruction card?

It means you hold shares of CSI stock in more than one account. To ensure that all of your shares are voted, sign and returneachproxy card or voting instruction card or, if you vote by telephone or via the Internet, vote once foreach proxy card, voting instruction card or Notice of Internet Availability of Proxy Materials you receive.

May I vote my shares in person at the meeting?

Yes. If you are a shareholder of record, you may vote your shares at the meeting by completing a ballot at the meeting. Even if you currently plan to attend the meeting, however, we recommend that you submit your proxy ahead of time so that your vote will be counted if, for whatever reason, you later decide to not attend the meeting. If you hold your shares in street name, you may vote your shares in person at the meeting only if you obtain a signed proxy from your broker, bank, trustee or other nominee giving you the right to vote these shares at the meeting.

What vote is required for the proposals to be approved?

How are votes counted?

Shareholders may either vote FOR or WITHHOLD authority to vote on each nominee in the election of the CSI board of directors. Shareholders may vote FOR, AGAINST or ABSTAIN on Proposal No. 2.2 and 3.

If you vote ABSTAIN or WITHHOLD, your shares will be counted as present at the meeting for the purposes of determining a quorum. If you ABSTAIN from voting on a proposal, your abstention has the same effect as a vote against that proposal. If you WITHHOLD authority to vote for one or more of the nominees for director, this will have no effect on the election of any director from whom votes are withheld.

If you hold your shares in street name and do not provide voting instructions to your broker or nominee, your shares will be considered to be “broker non-votes” and will not be voted on any proposal on which your broker or nominee does not have discretionary authority to vote under the rules of the New York Stock Exchange. Shares that constitute broker non-votes will be present at the meeting for the purpose of determining whether a quorum exists, but are not considered entitled to vote on the proposal in question. Your broker or nominee has discretionary authority to vote your shares on the ratification of Baker Tilly US, LLP as our independent registered public accounting firm even if

your broker or nominee does not receive voting instructions from you, but may not vote your shares on any other matters without instructions from you.

What if I do not specify a choice for a matter when returning a proxy?

Unless you indicate otherwise, the persons named as proxies on the proxy card will vote your shares

If any other matters come up for a vote at the meeting, the proxy holders will vote the shares they are entitled to vote, according to the recommendations of the Board of Directors or, if there is no recommendation, at their own discretion.

May I change my vote?

Yes. If you are a shareholder of record, you may change your vote and revoke your proxy at any time before it is voted at the meeting in any of the following ways:

date.

If you are a street name holder, please consult your broker, bank, trustee or nominee for instructions on how to change your vote.

Who pays forUnless you are a participant in the cost ofESOP, you can also change your proxy preparation and solicitation?by voting at the meeting.

We pay for the cost of proxy preparation and solicitation, including the charges and expenses of brokerage firms or other nominees to forward proxy materials to beneficial owners of shares held in street name. Proxies may be solicited by telephone or facsimile, or personally by our directors, officers and regular employees. These individuals will receive no compensation (other than their regular salaries) for these services.

Why did I receive a notice in the mail regarding the Internet availability of proxy materials instead of a full set of paper copies?

Under rules of the Securities and Exchange Commission (the “SEC”), we may furnish proxy materials to our shareholders by providing access to these documents on the Internet instead of mailing printed copies. In general, you will not receive printed copies of the materials unless you request them. Instead, we mailed you the Notice of Internet Availability of Proxy Materials (unless you have previously consented to electronic delivery or already requested to receive paper copies), which instructs you as to how you may access and review all of the proxy materials on the Internet. The Notice of Internet Availability of Proxy Materials explains how to submit your proxy over the Internet. If you would like to receive a paper copy or e-mail copy of the proxy materials, please follow the instructions provided in the Notice of Internet Availability of Proxy Materials.

How can a shareholder present a proposal at the 20212022 Annual Meeting?

The Company intends to hold its 20212022 Annual Meeting of Shareholders on or about May 19, 2021,June 23, 2022, and will make its Proxy Statement materials available to shareholders on or about April 9, 2021.May 10, 2022. For a shareholder proposal to be considered for inclusion in our Proxy Statement for the 20212022 Annual Meeting, the written proposal must be received at our principal executive offices by the close of business on DecemberJanuary 10, 2020.2022. The proposal must comply with SEC regulations regarding the inclusion of shareholder proposals in company-sponsored proxy materials.

If a shareholder wishes to present a proposal at the 20212022 Annual Meeting that would not be included in our Proxy Statement for that meeting, the shareholder must provide notice to us no later than February 23, 2021.March 28, 2022. Please contact the Corporate Secretary for a description of the steps to be taken to present a proposal.

How can a shareholder get a copy of the Company’s 20192020 Report on Form 10-K?

Our 2019 Annual Report, including our Annual Report on Form 10-K for the year ended December 31, 2019,2020, including Amendment No 1 on Form 10-K/A, (“Amended Form 10-K”) is available electronically with this Proxy Statement. If you were mailed a paper copy of this Proxy Statement, you were also mailed the 2019 Annual Report was included.Amended Form 10-K. The 2019 Annual Report, including ourAmended Form 10-K is also available in the Investor Relations page of our website http://commsystems.com. Upon request, we will provide you copies of any exhibits to the Amended Form 10-K upon payment of a fee covering our reasonable expenses in furnishing these exhibits. You can request exhibits to the Amended Form 10-K by writing to the Corporate Secretary, Communications Systems, Inc., 10900 Red Circle Drive, Minnetonka, Minnesota 55343.

What if I do not specify a choice for a matter when returning a proxy?

Unless you indicate otherwise, the persons named as proxies on the proxy card will vote your shares

If any other matters come up for a vote at the meeting, the proxy holders will vote the shares they are entitled to vote, according to the recommendations of the Board of Directors or, if there is no recommendation, at their own discretion.

PROPOSAL NO. 1 – ELECTION OF DIRECTORS

Our Board of Directors presently consists of five directors, each serving a one-year term. The Board of Directors has nominated and recommends that the Company’s shareholders elect Roger H.D. Lacey, Richard A. Primuth, Randall D. Sampson, Steven C. Webster and Michael R. Zapata. All but Mr. Zapata currently serve as directors. The Board of Directors believes that each nominee will be able to serve as a director. The Board has determined that each nominee, with the exception of Roger H.D. Lacey, is independent.

Absent from the slate of nominees is Company founder and most recently Chairman Emeritus Curtis A. Sampson whose term will end at the 2020 Annual Meeting of Shareholders, and he will he then retire from CSI’s Board of Directors. Mr. Sampson founded CSI in 1969 and took the Company public in 1981. As Chairman of CSI’s Board of Directors from the onset, he played a pivotal role in guiding the Company from a start-up into an established provider of telecommunications components, network systems devices, and IT services. In 2018, he was named Chairman Emeritus. Over the course of his five-decade career with CSI, Mr. Sampson has been a powerful entrepreneurial force, a builder of businesses, and a passionate voice in the local business community. In 2012, Curt was inducted into the “Minnesota Business Hall of Fame.”

Each nominee has indicated his willingness to serve if elected, but if any nominee is unable or unwilling to serve, proxies may be voted for a substitute nominee designated by the Board. The Company did not receive any shareholder nominations for director other than the communications with respect to Mr. Zapata from the GAMCO Entities described below under the section ‘‘Selecting Nominees for Election to the Board.”

director. Proxies cannot be voted for more than the number of nominees named in this Proxy Statement.

BOARD OF DIRECTORSROGER H.D. LACEY (71)served as CSI’s chief executive officer from February 2015 until November 30, 2020 and has served as the executive chairman of CSI board of directors since December 2018. He also assumed the additional role of interim chief executive officer on August 2, 2021 when then-CEO Anita Kumar’s employment was terminated in connection with the closing of the Company’s sale of its Electronics & Software Segment to Lantronix and Ms. Kumar was hired by Lantronix. Mr. Lacey has been a CSI director since 2008, served as board vice chair from September 2013 until December 2018 and interim chief executive officer from June 2014 until February 2015. Mr. Lacey was senior vice president of strategy and corporate development at the 3M Company from 2009 to his retirement in 2013. He was the 3M Company’s chief strategy officer and head of global mergers and acquisitions from 2000 to 2013. Mr. Lacey’s career with 3M began in 1975; from 1989 to 2000 he held various senior positions including serving as division vice president of 3M Telecom Division. In addition, Mr. Lacey served as a member of the corporate venture capital board for internal and external new venture investments from 2009 to 2013. Mr. Lacey is a board member of Johnsonville Sausage Corporation, a leading US food company, and also a Senior Partner in CGMR Capital, a private equity firm. He is a member of the board of governors for Opus Business School, University of St. Thomas; a visiting professor of strategy and corporate development, Huddersfield University; a founding member of the Innovation Lab at MIT; and is a former vice chair of Abbott Northwestern Hospital Foundation. Mr. Lacey brings a unique perspective that combines familiarity with key telecommunication and data markets around the world combined with deep experience in strategic planning and business development.

RICHARD A. PRIMUTH (75) was elected as a director in October 2013 and serves as Chair of the Compensation Committee. Beginning January 1, 2018, Mr. Primuth began providing legal and business consulting services as an independent contractor. Prior thereto, for over 44 years, Mr. Primuth served as an attorney with the Minneapolis law firm of Lindquist & Vennum LLP, specializing in business law. He was a partner in this firm from 1977 until December 2011 when he became Of Counsel to the firm. Mr. Primuth’s business law practice was heavily focused on representing public and private corporations, securities offerings, mergers and acquisitions, and other complex business transactions. He served as the Company’s primary outside legal counsel from 1983 until he was elected to the Board in 2013. Upon being elected to the Board, he ceased providing any legal services to the Company. On December 31, 2017, Mr. Primuth retired from and ceased having any further association with Lindquist & Vennum LLP when it merged with and into Ballard Spahr LLP. The following table sets forth information regardingBoard of Directors believes that Mr. Primuth’s significant experience in corporate governance, public offerings and other financings, capital markets, SEC compliance and reporting, mergers and acquisitions, spin offs, complex contract negotiations, and other business law areas, as well as his deep understanding of the directorCompany, its history, markets and nominees named above, including information regarding their principal occupations currently and for the preceding five years.products, make him a significant resource as a Company director.

RANDALL D. SAMPSON (61) has been a director since 1999 and the Lead Independent Director since December 2018. He currently serves as Chair of the Audit & Finance Committee, and also is a member of the Compensation Committee. Mr. Sampson is the President, Chief Executive Officer, and a Board member of Canterbury Park Holding Corporation (“CPHC”), all positions he has held since 1994. CPHC is a public company based in Shakopee Minnesota that re-launched a failed pari-mutuel race track and stimulated the revival of Minnesota’s horse breeding and training industries. Under his leadership, the Canterbury Park Racetrack has become a unique, family-friendly venue for live horse races and other entertainment, as well as pari-mutuel and card club wagering. Before becoming one of the three co-founders of CPHC in 1994, and after graduating from college with a degree in accounting, Mr. Sampson worked for five years in the audit department of a large public accounting firm where he earned his CPA certification, subsequently gained experience as a controller of a private company, served as a chief financial officer of a public company and managed Sampson family interests in horse breeding and training. The challenging nature of Canterbury Park’s business has demanded from its CEO an entrepreneurial

mindset, attention to expense control, continuous innovation in marketing, and attention to the needs of customers, which, along with other qualities, Mr. Sampson uniquely brings to the governance responsibilities of the CSI Board.

STEVEN C. WEBSTER (64) has served as a director since 2017. Since July 2013, Mr. Webster has served as Senior Fellow and Spencer Chair in Technology Management at the University of Minnesota. In this capacity, he teaches graduate classes in innovation for mid-career professionals and in business basics for graduate students in science and technology. From May 2005 to October 2012, Mr. Webster was Vice President of Research and Technology Commercialization for 3M Company’s Display and Graphics Business. In that role, he had responsibility for about 1,000 technical professionals worldwide, setting technology strategy and guiding key programs for a $4 billion global business. He directly led laboratories in Saint Paul, Minnesota; Austin, Texas; and Singapore. Over his 31-year career with 3M, Mr. Webster also held the executive position leading the global deployment of 3M Six Sigma; held R&D leadership roles in display technology, optical films, telecommunications, data storage and optical recording; and had business responsibility for fiber optics and test systems products in the 3M Telecom Systems Division. Prior to joining 3M, Mr. Webster was a Member of Technical Staff at Bell Laboratories in Holmdel New Jersey, from 1979 to 1981, where he worked on the first commercial fiber optics transmission system. Mr. Webster received a Master of Science in electrical engineering and computer science and a Bachelor of Science in electrical engineering from MIT in 1979. Mr. Webster currently serves on the Board of Directors and Executive Committee of the Guthrie Theater, and on the MIT Undergraduate Practice Opportunities Program Advisory Board. Mr. Webster brings deep experience in new product development, an understanding of telecommunications technology and business dynamics, expertise in the application of Six Sigma to improve business processes and significant executive level management skill, all qualities that strengthen the Board’s oversight of the Company’s businesses.

 MICHAEL R. ZAPATA (43) has served as a director since June 2020. Mr. Zapata has served as Executive Chairman and President of Schmitt Industries, Inc. since December 2018, and as Chief Executive Officer of that company since July 2019. Mr. Zapata is the founder and Managing Member of Sententia Capital Management, LLC, a value investing focused investment management firm (“Sententia”). Since its inception in 2012, Sententia has invested in deep value public equities in a concentrated portfolio. The firm employs a rigorous research process and attempts to engage constructively with management when appropriate. Prior to Sententia, Mr. Zapata served nearly 10 years in the U.S. Navy. During his service from 2001 to 2010, he held various leadership roles during the Global War on Terror. Deploying to locations including Iraq, Afghanistan, Africa, the Middle East and the Arabian Peninsula, he brings valuable insight and expertise in intelligence fusion, operational execution, strategic planning and risk mitigation. He received his B.S. from Texas A&M University, where he was recognized as a Dougherty Award Recipient. He received his M.B.A. from Columbia University as a student in the Heilbrunn Center for Value Investing. He serves as a director of Tip of the Spear Foundation, a non-profit dedicated to supporting Elite Operators and their families during times of need. Mr. Zapata’s background in, and knowledge of, operational execution and strategic planning, as well as his familiarity with small public companies and the challenges they face bring a good perspective to the Board.

Board of Directors Vote Required

Directors are elected by a plurality of the votes cast. Therefore, the five nominees who receive the highest number of votes will be elected as directors.

Board Voting Recommendation

The Board of Directors unanimously recommends that shareholders vote “FOR”
the election of each of the nominees named above as a director.

PROPOSAL NO. 2 – RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM

The Audit & Finance Committee has selected Baker Tilly Virchow Krause,US, LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2020.2021. While the Audit & Finance Committee retains the sole authority to retain, compensate, oversee and terminate the independent registered public accounting firm, the Audit & Finance Committee is submitting the appointment of Baker Tilly Virchow Krause,US, LLP as our independent registered public accountants for ratification. In the event the shareholders do not ratify the appointment of Baker Tilly Virchow Krause,US, LLP, the Audit & Finance Committee will reconsider the selection.

Vote Required

Approval of this Proposal 2 requires the affirmative vote of the holders of We expect a majority of the shares present, in person or by proxy, and entitled to vote on Proposal 2.

Board Voting Recommendation

The Board of Directors unanimously recommends shareholders Vote “FOR”
Proposal 2: Ratification of the Appointment ofrepresentative from Baker Tilly Virchow Krause,US, LLP
_______________________

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FEES AND SERVICES will be present at the meeting, will have the opportunity to make a statement and will be available to answer appropriate questions.

The following is a summary of the fees billed to the Company by Baker Tilly Virchow Krause,US, LLP for professional service for the year ended December 31, 20192020 and 2018.2019.

Audit Fees. This category consists of fees billed for professional services rendered for the audit of the Company’s annual financial statements and review of financial statements included in our quarterly reports.

Audit-Related Fees. This category consists of fees billed for assurance and related services, such as the Company’s employee benefit plan audits that are reasonably related to the performance of the audit or review of the Company’s financial statements and are not otherwise reported under “Audit Fees.”

Tax Fees. This category consists of fees billed for professional services for tax compliance, tax advice and tax planning. Assistance regarding federal and state tax compliance and acquisitions are provided to the Company by RSM US LLP.

All Other Fees. All other fees are fees for products and services other than those listed above.

Audit & Finance Committee Pre-approval Policies and Procedures

In addition to approving the engagement of the independent registered public accounting firm to audit the Company’s consolidated financial statements, the policy of the Audit & Finance Committee is to approve all use of the Company’s independent registered public accounting firm for non-audit services prior to any such engagement. To minimize relationships that could appear to impair the objectivity of the independent registered public accounting firm, the policy of the Committee is to restrict the non-audit services that may be provided to the Company by the

Company’s independent registered public accounting firm primarily to tax services, merger and acquisition due diligence and integration services, and any other services that can clearly be designated as “non-audit” services.

Audit & Finance Committee Report

The Audit & Finance Committee is responsible for independent, objective oversight of the Company’s financial accounting and reporting by overseeing the system of internal controls established by management and monitoring the participation of management and the independent registered public accounting firm in the financial reporting process.

The Audit & Finance Committee held fivesix meetings in 2019.2020. The meetings were designed to facilitate and encourage private communication between the Committee and Baker Tilly Virchow Krause,US, LLP.

During the meetings, the Committee reviewed and discussed the Company’s financial statements with management and Baker Tilly Virchow Krause,US, LLP. Management represented to the Committee that the Company’s consolidated financial statements were prepared in accordance with generally accepted accounting principles, and the Audit & Finance Committee has reviewed and discussed the consolidated financial statements with management and the independent accountants. The discussions with Baker Tilly Virchow Krause,US, LLP also included the matters required by Statement on Auditing Standards (“SAS”) No. 61 (Communication with Audit Committees), as amended by SAS 89 and 90 (Audit Committee Communications).

Baker Tilly Virchow Krause,US, LLP provided to the Committee the written disclosures and the letter regarding its independence as required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees), and this information was discussed with Baker Tilly Virchow Krause,US, LLP.

Based on the discussions with management and Baker Tilly Virchow Krause,US, LLP, the Committee’s review of the representations of management and the report of the Baker Tilly Virchow Krause,US, LLP, the Audit & Finance Committee recommended to the Board that the audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019,2020, filed with the Securities and Exchange Commission.SEC.

Submitted by the Audit & Finance Committee of the Company’s Board of Directors

Randall D. Sampson (Chair), Steven C. Webster, Richard A. PrimuthMichael R. Zapata

Vote Required

Approval of this Proposal 2 requires the affirmative vote of the holders of a majority of the shares present, in person or by proxy, and entitled to vote on Proposal 2.

Board Voting Recommendation

The Board of Directors unanimously recommends shareholders Vote “FOR”
Proposal 2: Ratification of the Appointment of Baker Tilly US, LLP

CORPORATE GOVERNANCE AND BOARD MATTERS

General Information

Our Board is committed to sound and effective corporate governance practices. Our governance policies are consistent with applicable provisions of the rules of the SEC and the listing standards of the Nasdaq Capital Market (“Nasdaq”). We also periodically review our governance policies and practices in comparison to those suggested by authorities in corporate governance and the practices of other public companies.

You can access our corporate governance charters and other related materials by following links on the “Corporate Governance” page of our websitehttp://commsystems.com.

The Board, Board Committees and Meetings

Meeting Attendance. Our Board meets regularly during the year to review matters affecting our Company and to act on matters requiring Board approval. Each of our directors is expected to make a reasonable effort to attend all meetings of the Board, applicable committee meetings and our annual meeting of shareholders. During 2019,2020, the Board met fiveseven times. Each director attended at least 80% of the meetings of the Board and committees on which he or she served, and all directors attended the 20192020 Annual Meeting of Shareholders.Shareholders, which was held virtually.

Board Committees. Our Board has established two standing committees: Audit & Finance and Compensation. Only members of the Board serve on these committees. Following is information about each committee:

Audit & Finance Committee. The Audit & Finance Committee is responsible for the engagement, retention and replacement of the independent registered public accounting firm, approval of transactions between the Company and a director or executive officer unrelated to service as a director or officer, approval of non-audit services provided by the Company’s independent registered public accounting firm, oversight of the Company’s internal controls and the receipt, retention and treatment of complaints regarding accounting, internal controls and auditing matters. The Company’s independent registered public accounting firm reports directly to the Audit & Finance Committee. The Audit & Finance Committee operates under a formal charter that is reviewed annually and was most recently revised amended on November 3, 2016.October 30, 2018. The current members of the Audit & Finance Committee are Richard A. Primuth, Randall D. Sampson (Chair) and, Steven C. Webster. Mr. Primuth, Mr. SampsonWebster and Mr. Webster areMichael Zapata, each of whom is independent under applicable SEC Rules and NASDAQNasdaq listing standards. In addition, the Board has determined that Randall D. Sampson qualifies as the Committee’s financial expert. The Audit & Finance Committee met fivesix times during 2019.2020.

Compensation Committee. The Compensation Committee is responsible for the overall compensation strategy and policies of the Company; reviews and approves the compensation and other terms of employment of the Company’s chief executive officer and other executive officers, subject to final Board approval; oversees the establishment of performance goals and objectives for the Company’s executive officers; administers the Company’s incentive compensation plans, including the Company Employee Stock Purchase Plan; considers the adoption of other or additional compensation plans; and provides oversight and final determinations with respect to the Company’s 401(k) plan, employee stock ownership plan and other similar employee benefit plans. The Committee operates under a Board-approved charter that is reviewed annually and was most recently amended on March 7, 2014.December 8, 2020. The current members of the Compensation Committee are Richard A. Primuth (Chair), Randall D. Sampson, and Steven C. Webster. Each Compensation Committee member is independent under Nasdaq standards. The Committee met fourfive times in 2019.

Special Committee to Explore Strategic Options. On May 23, 2018, the Board of Directors of the Company announced the formation of a Special Committee consisting of independent directors Richard Primuth, Randall D. Sampson and Steven Webster to explore its strategic options.

The Special Committee, working with members of management, studied a number of initiatives in the Company. On April 5, 2019, the Company announced that its wholly-owned subsidiary Suttle, Inc. (“Suttle”) had sold its FutureLinkTM Fiber business line, including inventory and customer relationships, to PPC Broadband Inc. (“PPC”), a leading provider of high quality, end-to-end signal transmission solutions for mission-critical applications for $5.0 million cash. On March 11, 2020, the Company announced that Suttle, Inc. had sold the remainder of its business lines, including the SoHo, MediaMAX, and SpeedStar brands and inventory as well as working capital, certain capital equipment, intellectual property, and customer relationships, to Oldcastle Infrastructure, Inc., an industry leader in engineered building solutions for $8.0 million in cash, with a net working capital adjustment 90

days after closing. The Company has included a detailed description of these two transactions and related matters in its reports with the Securities and Exchange Commission.

This Special Committee has not yet disbanded and continues to advise the full Board and management on other possible company strategic initiatives, including the acquisition of complimentary products or business lines.2020.

In addition, at Board meetings and in separate meetings among themselves, Mr. Primuth, Mr. R. Sampson, Mr. Webster, and Mr. WebsterZapata also acted as a Nominating Committee, reviewing possible candidates for addition to the Company’s Board of Directors. See “Selecting Nominees for Election to the Board.”

The Nominating Committee and the Board continue to assess the Board’s strengths and may in the future recommend new persons for election to the Board of Directors.

Director Independence

The Board has adopted director independence guidelines that conform to the definitions of “independence” set forth in Section 301 of the Sarbanes-Oxley Act of 2002, Rule 10A-3 under the Securities Exchange Act of 1934 and listing standards of Nasdaq. In accordance with these guidelines, the Board has reviewed and considered facts and circumstances relevant to the independence of each of our directors and director nominees and has determined that

each of the following incumbent directors qualifies as “independent” under Nasdaq listing standards: Richard A. Primuth, Curtis A. Sampson, Randall D. Sampson, and Steven C. Webster.Webster, and Michael Zapata.

Selecting Nominees for Election to the Board

In selecting nominees for election to the Board at the 2020 Annual Shareholders Meeting, a special Nominating Committee consisting of three independent directors (Messrs. Primuth, R.D. Sampson and Webster) assessed the existing composition of the Board, in part to ensure the Board reflects an appropriate balance of knowledge, experience, skills, expertise, diversity, and independence to enable the Board to meet the challenges it may confront. These directors also reviewed the Board composition to determine the qualifications and areas of expertise needed to further enhance the Board’s ability to fulfill its responsibilities.

On January 28, 2020, in a Schedule 13D/A filing made by Mario J. Gabelli and various entities associated with Mr. Gabelli (“GAMCO Entities”), the GAMCO Entities stated they intended to nominate Michael R Zapata as a director of the Company. Subsequent to that 13D/A filing, members of the Nominating Committee and Board met with Mr. Zapata and decided to nominate him and recommend his election to Company’s Board of Directors. On April 13, 2020, the Company filed a Form 8-K disclosing that it intended to nominate Mr. Zapata for election as a director at the Annual Meeting of Shareholders. See the table entitled “Security Ownership of Certain Beneficial Owners and Management;” for a description of the GAMCO Entities’ ownership of the Company’s stock.

Although the Board does not have a formal policy regarding diversity, in addition to minimum requirements of integrity, ability to make independent analytical inquiries, personal health and a willingness to devote adequate time and effort to Board responsibilities, the Board seeks individuals who reflect diversity in background, education, business experience, skills, business relationships and associations and other factors that will contribute to the Board’s governance of the Company.

In making recommendations regarding nominees for election as directors, the Board will consider qualified candidates who are proposed by our shareholders. Shareholders can submit qualified candidates, together with appropriate biographical information, to the Corporate Secretary at: Communications Systems, Inc., 10900 Red Circle Drive, Minnetonka, Minnesota 55343. Any shareholder desiring to submit a director candidate for consideration at our 2021 Annual Meeting of Shareholders must ensure that the submission is received by the Company no later than December 10, 2020 to provide adequate time for the Board to properly consider the candidate.

Shareholders may directly nominate an individual for election to the Board at our shareholders meeting by following procedures in our Bylaws. A shareholder wishing to formally nominate an individual to election to the Board at future shareholder meetings should follow the procedure set forth below under the caption “Other Information – Shareholder Proposals for 2021 Annual Meeting -- Shareholder Nominations.”

Board Leadership

All directors nominated for election at the 2021 annual meeting were elected by shareholders at the 2020 annual meeting. On December 12, 2018, Communications Systems, Inc. (“CSI’’ or the “Company”)we announced that Curtis A. Sampson had retired as Chairman of the Board of Directors and would continue to serve as a Board member with the title Chairman Emeritus. Mr. Curtis Sampson’s term will endended at the 2020 Annual Meeting of Shareholder.

Shareholders. In December 2018, CSI’s Chief Executive Officer and Vice Chairman Roger H.D. Lacey was named as the new Executive Chairman of the CSI Board of Directors. Mr. Lacey continuescontinued to serve as Chief Executive Officer of CSI.CSI until December 1, 2020 when Anita Kumar was elected to the Board and appointed Chief Executive Officer. Mr. Lacey also assumed the additional role of interim chief executive officer on August 1, 2021 when then-CEO Anita Kumar’s employment was terminated in connection with the closing of the Company’s sale of the Electronics & Software Segment to Lantronix and Ms. Kumar was hired by Lantronix. Effective August 1, 2021, Ms. Kumar also resigned from the CSI board of directors.

In connection with thesethe December 2018 changes, CSI Board member Randall D. Sampson, Curt Sampson’s son and Chief Executive Officer of Canterbury Park Holding Corporation, was named as the Company’s new Lead Independent Director. Randall Sampson has served as a CSI director since 1999, and currently serves as Chair of the Board’s Audit & Finance Committee.

Mr. Richard Primuth, in addition to his other director responsibilities, served as Board Secretary until April 2020. In this capacity, he was responsible for keeping minutes of the Board and committee meetings, developing and maintaining an annual calendar of Board and Committee meetings and responsibilities, facilitating the flow of information regarding business operations and results to the Board, assisting the Executive Chairman and CEO in developing agendas for Board meetings, and providing company officers with Board level input on pending legal matters, material contracts, corporate developments and other developments in the Company’s business.

Board’s Role in Managing Risk

In general, management is responsible for the day-to-day management of the risks the Company faces, while the Board, acting as a whole and through the Audit & Finance Committee, has oversight responsibility for risk management. In its risk oversight role, the Board has the responsibility to satisfy itself that the risk management processes designed and implemented by management are adequate and functioning as designed. Members of senior management attend the regular meetings of the Board and are available to address questions and concerns raised by the Board related to risk management. In addition, the Board regularly discusses with management, the Company’s independent registered public accounting firm and the internal auditor, identified major risk exposures, their potential financial impact on the Company, and steps that could be taken to manage these risks.

The Audit & Finance Committee assists the Board in fulfilling its risk management oversight responsibilities in the areas of financial reporting, internal controls and compliance with legal and regulatory requirements. The Audit & Finance Committee reviews the Company’s financial statements and meets with the Company’s independent registered public accounting firm and internal auditor at least four times each year to review their respective reports on the adequacy and effectiveness of our internal audit and internal control systems, and to discuss policies with respect to risk assessment and risk management.

Director Compensation

Compensation information paid to non-employee directors of the Company in 2019 is set forth under the caption “Director Compensation.”

Code of Ethics and Business Conduct

We have adopted a Code of Ethics and Business Conduct (the “Code”) applicable to all of the Company’s officers, directors, employees, and consultants that establish guidelines for professional and ethical conduct in the workplace. The Code also contains a specialan annual set of guidelines applicable to the Company’s senior financial officers, including the chief executive officer, principal financial officer, principal accounting officer, and others involved in the preparation of the Company’s financial reports.

These guidelines are intended to promote the ethical handling of conflicts of interest, full and fair disclosure in periodic reports filed by the Company, and compliance with laws, rules and regulations concerning this periodic reporting. A copy of the Code is available by following links on the “Corporate Governance” page of our website athttp://commsystems.com, and is also available, without charge, by writing to the Company’s Corporate Secretary at: Communications Systems, Inc., 10900 Red Circle Drive, Minnetonka, Minnesota 55343.

Contacting the Board of Directors

Any shareholder who desires to contact our Board of Directors may do so by writing to the Board of Directors, generally, or to an individual director at Communications Systems, Inc., 10900 Red Circle Drive, Minnetonka, Minnesota 55343. Communications received electronically or in writing are distributed to the full Board of Directors, a committee or an individual director, as appropriate, depending on the facts and circumstances described in the communication received. By way of example, a complaint regarding accounting, internal accounting controls or auditing matters would be forwarded to the Chair of the Audit & Finance Committee for review. Complaints and other communications may be submitted on a confidential or anonymous basis.

Summary Ownership Table

PROPOSAL 3 - ADVISORY VOTE ON EXECUTIVE COMPENSATION

As required by Section 14A of the Securities Exchange Act of 1934, we are asking shareholders to cast an advisory vote on named executive officer compensation.

As described in the section entitled “Executive Compensation,” we have designed our executive compensation program to implement core compensation principles, including pay for performance and alignment of our management’s interests with those of our shareholders. Under these programs, we reward our Named Executive Officers in large part for the achievement of specific financial performance goals that we had set. We have also included equity components to our long-term incentive plan. We encourage shareholders to read the “Executive Compensation” section of this proxy statement for a more detailed discussion of our executive compensation programs, including information about 2020 compensation of our Named Executive Officers. We currently hold this advisory vote on executive compensation every three years and expect to hold it again at the 2024 annual meeting of shareholders.

We are asking our shareholders to indicate their support for our Named Executive Officer compensation as described in this proxy statement. This proposal, commonly known as a “say-on-pay” proposal, gives our shareholders the opportunity to express their views on our Named Executive Officers’ compensation. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our Named Executive Officers and the philosophy, policies and practices described in this proxy statement. Accordingly, we ask our shareholder to vote “FOR” the following resolution at the Annual Meeting:

RESOLVED, that the shareholders of Communications Systems, Inc. approve, on an advisory basis, the compensation of the Named Executive Officers as disclosed in Communications Systems, Inc.’s proxy statement for the 2021 Annual Meeting of Shareholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission.

Vote Required

Approval of this Proposal 3 requires the affirmative vote of the holders of the majority of the shares present, in person or by proxy, and entitled to vote on this Proposal 3. While this vote is advisory, and not binding on the Compensation Committee or the Board of Directors, it will provide valuable information that the Compensation Committee will be able to consider when determining executive compensation philosophy, policies and practices in the future.

Board Voting Recommendation

The Board of Directors unanimously recommends that shareholders vote “FOR “for Proposal 3,
Advisory Vote on Executive Compensation.

OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF CSI

The following table sets forth, as of November 2, 2021, certain information with respect to the beneficial ownership of the Company’sCSI’s common stock by (i) each personshareholder known by us to be the Company to ownbeneficial owner of record or beneficiallymore than 5% or more of the Company’sCSI’s common stock, (ii) each director and nominee for director,of CSI, (iii) each current Named Executive Officer (as defined belowof the named executive officers of CSI identified in the “Summary Compensation Table”)section “CSI EXECUTIVE COMPENSATION” of this proxy statement, and (iv) all directors and executive officers andof CSI as a group. Percentage ownership is based on 9,720,627 shares of CSI common stock outstanding as of November 2, 2021. Unless otherwise stated, the address of each person is 10900 Red Circle Drive, Minnetonka, MN 55343.

Includes the following number of shares allocated to the accounts of the Company as a group,following participants in each case based upon information available as of April 20, 2020 (unless otherwise noted). As indicated by footnote, the table includes (i) shares subject to options that may be exercised within 60 days of April 20, 2020; (ii) restricted stock units (“RSUs”) that will be settled in shares within 60 days of April 20, 2020, and (iii) shares allotted to an individual’s account under the Communications Systems, Inc.CSI Employee Stock Ownership Plan (“ESOP shares”)and Trust (ESOP) as of December 31, 2019.November 1, 2021: Mr. Lacey, 9,630 shares; Mr. Fandrich, 8,141 shares; Mr. Fluegge, 11,110 shares; Ms. Kumar, 7,331 shares; and all current directors and executive officers as a group, 45,629 shares.

dispositive power; MJG Associates, Inc., 8,760 shares sole voting power and sole dispositive power; and Gabelli Foundation, Inc., 15,000 shares sole voting power and sole dispositive power.

CSI EXECUTIVE COMPENSATION

The Company is a global provider of connectivity infrastructure and services for deployments of broadband networks. During 2019, our operations were conducted primarily through our Suttle, Inc. (“Suttle”), Transition Networks, Inc. (“TN”) and JDL Technologies, Inc. (“JDL”) business units.

This section discusses ourCSI’s executive compensation objectives and policies, forms of compensation, and compensation related to services in 20192020 paid or potentially payable to the Named Executive OfficersCSI named executive officers identified below under the Summary Compensation Table (“CSI NEOs”), as well as other CSI senior executives (collectively, with the CSI NEOs, the “Senior Executives”“CSI senior executives”). Except as otherwise expressly noted, this proxy statement does not describe any changes in compensation occurring in 2021, including any compensation resulting from the change in control that occurred as a result of the Company’s sale of its E&S segment to Lantronix that closed on August 2, 2021. The Company disclosed this information in its definitive proxy statement dated June 14, 2021 with respect to the Company’s special meeting of shareholders held on July 28, 2021 and its Form 8-K dated August 1, 2021.

Compensation Philosophy and Objectives

The Company’sCSI’s approach to executive compensation of the Company’s Senior Executivesits senior executives is based on the following objectives:

The Company has generally structured its annual and long-term incentive compensation to be “performance-based.” In addition, when determining how much performance-based compensation should be paid in cash versus granting stock options or other awards payable in stock, (collectively “Equity Awards”), the CommitteeCSI compensation committee has generally emphasized paying long-term compensation through Equity Awards.equity awards.

Role of the Compensation Committee and Information Used to Determine Compensation

One of the Compensation Committee’sCSI compensation committee’s primary responsibilities is to review and approve, or recommend for Board approval, compensation paid to the Company’sCSI’s Chief Executive Officer, the CSI NEOs, and other Senior Executives.CSI senior executives. The Compensation Committee (“Committee”) carries out this responsibility pursuant to a Board-approved written charter. The Compensation Committee is subject to Board oversight, and other Board members frequently participate in deliberations related to executive compensation. Additional information regarding the primary responsibilities of the Committee and its current members is provided above under the caption “Corporate Governance and Board Matters – the Board, Board Committees and Meetings.”

Under its charter, the Compensation Committee has the authority to select, retain, and compensate executive compensation consultants and other experts that it deems necessary to carry out its responsibilities. Since November 2015, the Compensation Committee has, from time to time, engaged Total Rewards Group (“TRG”), a compensation consulting firm, to study and make recommendations regarding our compensation program. This included an evaluation of our base compensation for Senior ExecutivesCSI senior executives to determine whether we were paying “competitive” compensation and whether our approach to compensation was generally in line with “best practices” for public companies. The Compensation Committee selected TRG without a recommendation by management and TRG reported directly to the Compensation Committee.

The Compensation Committee also uses industry surveys to evaluate base compensation and total compensation paid to our Senior Executives.CSI senior executives. In some years, the Compensation Committee has relied on studies prepared by Company employees based on surveys of manufacturing companies of similar size. In other years, this information has been supplied by our compensation consultant. In addition, the Compensation Committee periodically compares compensation it pays to Senior ExecutivesCSI senior executives to compensation paid by a limited number of specific companies in similar industries, and of similar size and scope (“comparator group”) so that it has comparative data for assessing the Company’sCSI’s market position in compensation levels and practices.

Base Salaries

Base salaries of the Company’sCSI’s executive officers are established by reference to average base salaries paid to executives in similar positions with similar responsibilities using information supplied by compensation consultants and other sources. Base salaries are generally reviewed annually in December of each year and adjustments are made effective as of January 1 of the following year. From time to time, however, promotions and other events require adjustments

at other points in the year. While emphasis is placed on measurable financial factors, when it determines base salaries, the Compensation Committee also considers factors such as development and execution of strategic plans, changes in areas of responsibility, potential for assuming greater responsibility and the development and management of employees. The Compensation Committee does not, however, assign specific weights to these various quantitative and qualitative factors in reaching its decisions.

The following table shows the title and base salary paid tofor each NEO in 2019.as of March 1, 2021. See the Summary Compensation Table and accompanying disclosure for information about 2020 compensation.

*Scott Fluegge served as President and General Manager of JDL Technologies, Inc. until December 31, 2020. He assumed his current position in January 2021.

Annual Bonus Plan

Bonuses are paid under the Company’sCSI’s Annual Bonus Plan (“Bonus Plan”) to CSI NEOs and other Senior ExecutivesCSI senior executives during the course of and following the end of each fiscal year based on achievement in relation to objective financial goals set at the beginning of the fiscal year. These bonuses are intended to provide Senior ExecutivesCSI senior executives with an opportunity to receive additional cash compensation upon attainment of pre-established performance goals.

At the beginning of each fiscal year, the Compensation Committee determines what objective performance measures it will use to assess performance by the Company overall and by each business unit. In addition, the Compensation Committee assigns a percentage weight to the various measures that are applied when determining the total bonus to be paid to each executive. The Compensation Committee concurrently determines specific goals for each of these performance measures. Most performance measures for business unit performance have three goals to which achievement is compared, defined as “threshold,” “target” and “maximum,” with “target” goals generally being equal to the Company’sCSI’s budget for that performance measure.

GivenIn light of the continuing uncertainty about effect the COVID-19 coronavirus will have on the Company’s 2020 operations, the Company hasproposed transaction with Pineapple Energy LLC, CSI did not yet adoptedadopt a 20202021 Bonus Plan, but is focusing its effort on retaining key employees and looking for strategic opportunities that may present themselves.Plan.

Bonus Compensation of the CSI Named Executive Officers

The potential bonuses for the Chief Executive Officerchief executive officer and Chief Financial Officerchief financial officer were based on overall Company consolidated performance. Each Business Unit Leader is typically paid a bonus based on the performance of the business unit he or she manages. Whether and to what extent bonus compensation is paid to him or her is determined following the end of the annual period. A comparison of achievement to performance goals is made after twelve months. With respect to these measures, we compare annual results to goals, and a bonus is paid if achievement is at least 80% of the target goal for that performance measure.

Concurrent with determining and assigning weight to the various performance measures, and the goals against which achievement is measured, the Compensation Committee determines a “target” bonus opportunity and a “maximum” bonus opportunity that may be earned by each executive as a percentage of his or her base salary if actual performance exceeds applicable threshold performance goals. In 2019,2020, the “target” annual bonus opportunity for the Senior ExecutivesCSI senior executives ranged from 40%25% to 231%65% of their respective base salaries, and their respective “maximum” bonus opportunities were approximately 60%37.5% to 347%97.5% of their respective target bonus opportunities if actual achievement equaled or

exceeded maximum performance goals. The target annual bonus for the CEO and CFO were based on consolidated targets for revenue and operating income, sales per employee and SG&A as a percentage of sales.income.

The following table presents for 2019:2020: (i) the performance measures for the CSI, Electronics & Software (E&S) Segment, and JDL business units; (ii) the relative weight assigned to each of the performance measures in

determining overall performance of the business units; (iii) target achievement levels for each performance measure selected; and (iv) actual 20192020 achievement as a percentage of the target goal.

Bonuses Paid Pursuant to the 20192020 Annual Bonus Plan

The table below presents the bonus opportunity under the Annual Bonus Plan for the threefour CSI NEOs as a percentage of their respective base salaries upon achievement of “target” goals for each performance measure (weighted as indicated above), the dollar value of the opportunity at target achievement, and the actual amount paid in cash to the CSI NEOs based on actual achievement in relation to goals for performance measures under the Company’s 2019CSI’s 2020 Annual Bonus Plan.

Discretionary Bonuses

The Compensation Committee and the Board believe the most appropriate approach to paying annual bonus compensation is one in which executives are measured against predetermined objective performance measures and performance goals. However, from time to time, in limited and extraordinary circumstances, the Compensation Committee and the Board also believe, it is in the best interest of the Company and its shareholders to pay discretionary bonuses. FollowingDuring late fiscal 2020, the conclusion of fiscal 2019, theCompensation Committee determined it was desirable and in the best interest of the Company to pay discretionary bonuses to certain employees based on the Compensation Committee’s judgment that those individuals made important contributions to the Company or a business unit or segment that should be rewarded apart from achievement in comparison to goals under performance measures. This included a $25,000 discretionary bonusesbonus paid to the following Named Executive Officers: Mr. Lacey, $120,000 and Mr. Fandrich, $50,000.recognizing his leadership of the Company as COO and CFO in 2020 during the Covid-19 pandemic.

Overview of Long-Term Incentive Compensation

Our Senior ExecutivesCSI senior executives have been given, over the last several years, the opportunity to earn long-term, incentive compensation by means of the following forms of incentive awards:

Long-term incentive compensation opportunities for our CSI NEOs and other Senior ExecutivesCSI senior executives are determined under a two-step process. First, the Compensation Committee determines the total “target” opportunity (expressed as a percentage of base compensation) for each Senior Executive to earn long-term incentive compensation (the “Total Target LTI Opportunity”). Over the last several years this percentage has ranged from 20% to 100%206% of the Senior Executive’s base compensation. Second, an allocation of the Total Target LTI Opportunity is then made to LTI Awards and Stock Options.

LTI Awards

LTI Awards may be “Performance Share Units” or “Performance Cash Units.” LTI Awards that are performance-based and payable in stock following the end of the three-year period are defined as “Performance Share Units” or “PSUs” under our incentive compensation plan. The number of PSUs awarded to each NEO is determined by dividing the dollar value of the NEO’s LTI Award by the average price of the Company’sCSI’s stock over a 20-business-day period beginning on or about March 1 of each year. Each PSU represents the potential issuance of one share of common stock; the number of PSUs actually issued as shares of stock depends on actual achievement in relation to performance goals for the three-year period.

LTI Awards that are performance-based and payable in cash following the end of a three-year period are defined as “Performance Cash Units” or “PCUs” under our incentive compensation plan. Each PCU represents the potential to be paid $1.00, and the number of PCUs that are paid in dollars depends on actual achievement in relation to performance goals for the three-year period.

Stock Options

The number of shares covered by Stock Options granted to each NEO is determined by dividing the dollar value of the Total Target LTI Opportunity allocated to Stock Options by a value for an option to purchase one share of our stock as determined by the Compensation Committee. Typically, the Compensation Committee has used the Black Scholes methodology to determine the value of one option based on a share price of the Company’sCSI’s stock as of a specific date during the second half of March in each year; the share exercise price of Stock Options is fair market value on the date of grant.

20192020 Long term Incentive Compensation Awards

On March 26, 2019,May 6, 2020, pursuant to the Company’sCSI’s Long Term Incentive Compensation Plan (the “LTI Plan”) the Compensation Committee determined, and the Company’s BoardCSI board of directors ratified and approved, the overall design and other features of the Company’sCSI’s LTI Plan for 20192020 as applied to the CSI NEOs.

As noted above under the section “Special Committee to Explore Strategic Options, onOn May 23, 2018, the BoardCSI board of Directors of the Companydirectors announced the formation of a Special Committeespecial committee to explore Company strategic options. As a result of the initiative, the CompanyCSI sold substantially all the operational assets of the Company’sCSI’s wholly owned subsidiary Suttle in two separate transactions that closed on April 5, 2019 and March 11, 2020. The Company has included a detailed description of these two transactions2020 and related matters in its reports withcompleted the Securities2020 Ecessa and Exchange Commission.IV Desk Acquisitions. In light of these initiatives, in determining the April 2019 Suttle transaction and uncertainty and continuing strategic opportunities for the remainder of the Suttle business, in granting the 20192020 LTI awards for CSI NEOs and other members of Senior Management,CSI senior management, the Compensation Committee and BoardCSI board of Directorsdirectors decided on a combination of RSUs, stock options and cash, rather than the PSUs based primarily on the operating results of the Company’s Suttle, Transition Networks and JDLCSI’s subsidiaries.

The Compensation Committee first determined that the following CSI NEOs would be awarded the total opportunities for long termlong-term executive compensation as a percentage of their respective base compensation as follows:

Other Compensation

In addition to participating in Company-wide plans providing health, dental and life insurance on the same basis as all of our other U.S.-based employees, our Senior ExecutivesCSI senior executives receive other compensation in various forms, primarily the following:

The amount of this other compensation for our Named Executive Officersthe CSI named executive officers is presented in the column titled “All Other Compensation” under the “Summary of Executive Compensation Table” and the “Other Compensation Table.”

Employment Agreements

None of our NEOs have a written employment agreement.

Stock Ownership GuidelinesAgreement

The Company has adopted guidelines for stock ownership by our Senior Executives. For ourand Chief Executive Officer Anita Kumar entered into an employment agreement effective as of December 1, 2020. Under this “at-will” employment agreement, the guideline is beneficial ownershipCompany agreed to pay Mrs. Kumar a base salary of shares valued at three times base salary; for our Chief Financial Officer the guideline is beneficial ownership$280,000 and she was eligible to earn a bonus up to 55% of shares valued at two times base salary; and, for all other Senior Executives, guideline beneficial ownership of shares having a value equal to one timesher base salary. Stock ownership includes shares held directly and shares beneficially held in the Company’s ESOP, but does not include unexercised stock options or shares potentially payable under Incentive Awards. The Company annually reviews each executive’s progress towards achieving ownership equalalso entered into a change of control agreement with her, as described below. The employment agreement also provided that if the Company terminated her employment prior to the ownership guidelines.December 31, 2021 without a change of control, she would be entitled to receive a guaranteed separation payment equivalent to six months base salary.

Consideration of Risk in Compensation

The Company believes placing substantial emphasis on long-term incentive compensation encourages executives to direct their efforts to promote the creation of long-term shareholder value and that promoting the creation of long-term value discourages behavior that leads to excessive risk. The CommitteeCSI compensation committee believes that the following features of our compensation programs provide incentives for the creation of long-term shareholder value and encourage high achievement by our executive officers without encouraging inappropriate or unnecessary risk taking:

Because of our stock ownership guidelines officers and key employees require all executives to make progress towards owning stock equal to at least one times their base compensation, we believe our CSI NEOs are less likely to expose the Company to inappropriate or unnecessary risks.

The financial metrics used in our incentive compensation programs are measures the Compensation Committee believes drive long-term shareholder value. Moreover, the CommitteeCSI compensation committee attempts to set ranges for these measures that encourage success without encouraging excessive risk taking to achieve short term results. In addition, all forms of incentive compensation specify a maximum amount that cannot exceed two times the target amount, no matter how much financial performance exceeds the ranges established at the beginning of the year.

SUMMARY COMPENSATION TABLESummary Compensation Table

The following table presents information regarding compensation earned in 20192020 and 20182019 for services as executive officers (and in the case of Anita Kumar all capacitiescompensation as an employee in 2020), by the Company’s Chief Executive Officer Roger H.D. Lacey the Company’s Chief Financial OfficerCSI’s chief executive officer until November 30, 2020, Anita Kumar, CSI’s chief executive officer beginning December 1, 2020, Mark Fandrich, CSI’s chief financial officer, and the other most highly compensated executive officersofficer of the Company in 20192020 (together referred to as the “Named Executive Officers”“CSI named executive officers” or “NEOs”“CSI NEOs”).

Non-Equity Incentive Plan Compensation Table

The following table provides a breakdown of information under the column “Non-Equity Incentive Plan Compensation” in the preceding Summary Compensation Table.

Other Compensation Table

The following table provides a breakdown of information under the column “Other Compensation” above.

Outstanding Equity Awards at Fiscal Year-End

The following table sets forth information concerning outstanding equity awards held by Named Executive OfficersCSI NEOs as of December 31, 2019.2020.