Washington, D.C. 20549
(Amendment No. )
The Board of Directors of Steelcase Inc. (the "Company"“Company”) cordially invites all shareholders to attend the Company’s 20162022 Annual Meeting of Shareholders as follows:
The Annual Meeting is being held to allow you to vote on the following proposals and any other mattermatters properly brought before the shareholders:
Every vote is important, and we urge you to vote your shares as soon as possible.
Lizbeth S. O’Shaughnessy
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| P.O. Box 1967 | Steelcase.com |
| Grand Rapids, MI 49501-1967 | |
| United States | |
PROXY STATEMENT
TABLE OF CONTENTS
QUESTIONS AND ANSWERS
How can I attend the Meeting, and can I ask questions during the Meeting?
Our 20162022 Annual Meeting of Shareholders (the "Meeting")(which we refer to as the Meeting) will be a virtual meeting, conducted via live webcast only, to allow all of our shareholders the opportunity to participate in the Meeting no matter where they are located. No physical meeting will be held. ShareholdersHolders of record of Class A Common Stock or Class B Common Stock at the close of business on May 16, 2016 (the “Record Date”)2022 (which we refer to as the Record Date) will be able to attend the Meeting by logging in at www.virtualshareholdermeeting.com/SCS2022 at 11:00 a.m. Eastern Daylight Time on July 13, 2022 via an internet web browser. In order to vote and submit questionsor ask a question during the Meeting, by logging on to www.virtualshareholdermeeting.com/scs2016 atshareholders must log into the Meeting date and time using their 12-digit16-digit Control Number provided with the notice of the Meeting. These proxy materials were first sent or made available to shareholdersIf you encounter any difficulties accessing the Meeting, please call the technical support number that will be posted on or about June 1, 2016.the Meeting login page.
The Board of Directors has adopted procedures to provide for a fair and orderly proceeding, and these procedures will be accessible during the Meeting. These procedures include guidelines for the submission of questions, and all questions that meet the stated guidelines will be answered during the Meeting, time permitting.
Can I listen to the Meeting if I cannot attend it live?
If you are not able to attend the Meeting while it is being conducted, an audio replay of the Meeting will be available on our website shortly after the conclusion of the Meeting and for at least 90 days thereafter. You will be able to find the replay under "Events“News & Events - Events & Presentations” in the Investor Relations section of our website, located at ir.steelcase.com.
On what am I voting?
You are being asked to vote on the following mattersproposals and any other businessmatters properly coming before the Meeting:
Proposal 1: Election of teneleven nominees to the Board of Directors
Proposal 2: Advisory vote to approve named executive officer compensation
Proposal 3: Ratification of our independent registered public accounting firm
The Board of Directors recommends that you vote FOR each of the nominees listed in Proposal 1 and FOR Proposals 2 and 3. As of June 1, 2016,2022, we do not know of any other mattermatters to be considered at the Meeting.
Who is entitled to vote, and how many votes does each shareholder have?
ShareholdersHolders of record of Class A Common Stock or Class B Common Stock at the close of business on the Record Date may vote at the Meeting. At the close of business on the Record Date, there were 87,640,41588,089,980 shares of Class A Common Stock and 31,536,15424,650,511 shares of Class B Common Stock outstanding. Each shareholder has one vote per share of Class A Common Stock and ten votes per share of Class B Common Stock owned.
How can I vote?
If you are a registered shareholder (that is, you hold your Steelcase stock directly in your name), you may vote by telephone, Internetmail, internet or mail or by attending the Meeting via the Internet and voting online during the Meeting.
To vote by telephone: Please follow the instructions on the proxy card. The deadline for voting by telephone is 11:59 p.m. Eastern Daylight Time on July 12, 2016.2022.
To vote by mail: Please complete, sign and date the accompanying proxy card and return it in the enclosed postage-paid envelope. If you have not received a proxy card, you will need to request one be sent to you by following the instructions included in the Notice of Internet Availability of Proxy
Materials.Meeting notice. Only proxy cards received and processed before 11:00 a.m. Eastern Daylight Time on July 13, 20162022 will be voted.
To vote by Internet:
Before the Meeting:internet: Please follow the instructions on the proxy card. The deadline for voting by Internetinternet before the meetingMeeting is 11:59 p.m. Eastern Daylight Time on July 12, 2016.2022.
DuringTo vote online during the Meeting: Please log on to www.virtualshareholdermeeting.com/scs2016SCS2022 at the Meeting date and time11:00 a.m. Eastern Daylight Time on July 13, 2022, using your 12-digit16-digit Control Number provided with the Meeting notice, ofand follow the Meeting.instructions for voting shares.
Whether you vote by telephone, Internetmail, internet or mail, or by attendingonline during the Meeting, via the Internet, you may specify whetherhow your shares should be voted for all, some or nonewith respect to each of the nominees for director.proposals. If you use the proxy card provided by us and you do not specify a choice, your shares will be voted FOR the election of each of the nominees listed in Proposal 1 and and FOR each of Proposals 2 and 3. For any other mattermatters that properly comescome before the Meeting, your shares will be voted in the discretion of the proxy holders.
If you hold your stock in “street name” (that is, your shares are registered in the name of a bank, broker or other nominee, which we will collectively refer to as your “broker”)broker), you must vote your shares in the manner required by your broker. If you use a ballot card supplied by your broker and you do not specify a choice, the rules of the New York Stock Exchange, or NYSE, provide that your broker (i) may not vote your shares on Proposals 1 or 2 and (ii) may vote your shares on Proposal 3.
What should I do if I received more than one proxy card?
If you received more than one proxy card, it is likely that some of your shares are registered differently than the others or areyou hold shares in more than one account. You should complete, sign and return all proxy cards, or make sure that you complete the voting instructions for each card if voting by telephone or Internet,internet, to ensure all of your shares are voted.
May I revoke my proxy?
If you appoint a proxy, you may revoke it at any time before it is exercised by notifying our corporate secretary in writing, by delivering a later-dated proxy to our corporate secretary or by attending the Meeting online and voting online during the Meeting.
What is the quorum requirement for the Meeting?
Michigan law and our By-laws require a quorum for the Meeting, which for our company means that holders of a majority of the voting power entitled to vote at the Meeting must be present or represented by proxy in order to transact business at the Meeting. Withheld votes and abstentionsAbstentions will be counted in determining whether a quorum has been reached.
How many votes are needed to approve the proposals?
Assuming a quorum has been reached, the following votes are needed to approve each of the proposals:
•For Proposal 1, in order to be elected, a nominee must receive the affirmative vote of a majority of the votes cast at the Meeting with respect to such nominee. If any incumbent director receives more “against” than “for” votes, our By-laws require the director to tender their resignation, and the Nominating and Corporate Governance Committee must make a recommendation to the Board of Directors regarding whether or not to accept such resignation.
•In order to be approved, Proposals 2 and 3 must receive the affirmative vote of the majority of the votes cast for that proposal. Proposals 2 and 3 are advisory votes which are not binding on our company or our Board of Directors. In order to be approved, each of these proposals must receive the affirmative vote of the majority of the votes cast at the Meeting for that proposal.
How will broker non-votes and abstentions be treated?
Under the rules of the New York Stock Exchange, or NYSE, rules, brokers who hold shares on behalf of their customers (i.e., shares held in street name) can vote on certain items when they do not receive instructions from their customers. However, brokers are not authorized to vote on non-routine matters if they do not receive instructions from their customers. Proposals 1 and 2 are non-routine matters under NYSE rules.Therefore,rules; therefore, if you fail todo not give your broker voting instructions on how to vote on Proposal 1 or 2,those proposals, your shares will not be treated as votes cast in determining the outcome of those matters. Proposal 3 is considered a routine matter under NYSE rules, and therefore, your broker may vote your shares on that proposal if it does not receive instructions from you.
If you abstain from voting on a matter,proposal, your shares will not be counted as voting for or against that matter,proposal, and therefore abstentions will have no effect on the adoption of the proposal.
Why didn’t I receive printed copies of this proxy statement and the annual report?
We make our proxy materials available to our shareholders electronically via the Internetinternet and send youthem a Notice of Internet Availability of Proxy Materialsnotice which lists the address of a website where youthey can view, print or request printed copies of our proxy materials and submit your voting instructions. The notice also provides an email address and toll-free telephone number that you can use to requestfor requesting printed copies of our proxy materials. Unless you request otherwise, you will not receive a printed copy of our proxy materials. If you wish to receive printed copies of our proxythese materials each year, you can make a permanent request.
What if I have the same address as another shareholder?
We send a single copy of our Notice of Internet Availability of Proxy Materialsnotice to any household at which two or more shareholders reside if they appear to be members of the same family. This practice is known as “householding” and helps reduce our printing and mailing costs. Any shareholder residing at the same address as another shareholder who wisheswould like to receiverequest a single document or separate documents should call 1-866-540-7095 or write to Broadridge Financial Solutions, Householding Department, 51 Mercedes Way, Edgewood, New York 11717, to express their preference, and we will deliver theany requested documents promptly.
Who will pay for this proxy solicitation?
We will bear the cost of soliciting proxies, which may be done by e-mail, mail, telephone or in person by our directors, officers and employees, who will not be additionally compensated for those activities. We may also reimburse banks, brokers nominees and other fiduciaries for reasonable expenses they incur in forwarding
these proxy materials at our request to the beneficial owners of Class A Common Stock and Class B Common Stock. Proxies will beare being solicited on behalf of our Board of Directors.
When and how are shareholder proposals for next year’s Annual Meeting to be submitted?
We must receive any shareholder proposals to be included in our proxy statement for the 2017our 2023 Annual Meeting of Shareholders by February 1, 2017. Shareholder2023. Other shareholder proposals to be presented during the 20172023 Annual Meeting must be received no earlier than April 14, 20172023 and no later than May 4, 2017.2023. All shareholder proposals must be sent in the manner and meet the requirements specified in our By-laws.
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PROPOSAL 1 - ELECTION OF DIRECTORS
OurAll of the members of our Board of Directors has eleven members, and all of our directors are elected annually. One of our directors, R. David Hoover, is retiring from the Board when his term expires at the Meeting. Upon his retirement, the size of the Board will reduce to ten members.
There are teneleven nominees for election this year, each of whom is currently a member of the Board. The Board of Directors recommends that you vote FOR each of the nominees.
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| | Lawrence J. BlanfordSara E. Armbruster Director since 20122021
Mr. Blanford wasMs. Armbruster has been President and Chief Executive Officer of Green Mountain Coffee Roasters,Steelcase Inc., a specialty coffee and coffeemaker company, from 2007 to December 2012, and also since October 2021. She served as our Executive Vice President from April 2021 to October 2021, Vice President, Strategy, Research and Digital Transformation from 2018 to April 2021 and Vice President, Strategy, Research and New Business Innovation from 2014 to 2018. She joined Steelcase in 2007. Ms. Armbruster is a director of Green Mountain from 2007 to 2013.Winnebago Industries, Inc. Age 62.51.
Mr. Blanford'sMs. Armbruster’s role as our President and Chief Executive Officer and her experience as the chief executive officer, or CEO, of a consumer products organization and leading a publicin various leadership positions at our company in a challenging environment and his qualification as an audit committee financial expert led the Board of Directors to recommend that he shouldshe serve as a director.
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| | William P. CrawfordTimothy C. E. Brown Director since 19792016
Mr. Crawford held various positions at SteelcaseBrown has been Chair and Co-Chief Executive Officer of IDEO LP, a global innovation and design firm, since April 2022. He served as Executive Chair of IDEO from 1965 until his retirement in 2000, including President2019 to April 2022 and as Chief Executive Officer and President of the Steelcase Design Partnership.IDEO from 2000 to 2019. Age 73.
59.
Mr. Crawford’sBrown’s global experience, background with ourinnovation and technology and experience as the chief executive officer of a global company having served as a director for more than 35 years and as an employee for 35 years, and his understanding of the long-term interests of our company and its shareholders led the Board of Directors to recommend that he should serve as a director. |
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| | Connie K. Duckworth Director since 2010
Ms. Duckworth has beenwas Chairman and Chief Executive Officer of ARZU, Inc., a non-profit organization that helpsempowers Afghan women weavers by sourcing and selling the rugs they weave, since 2003. Ms. Duckworthfrom 2003 to 2019. She is a trustee of Equity Residential and The Northwestern Mutual Life Insurance Company.a director of MP Materials Corp. Age 61.
67.
Ms. Duckworth’s experience as a former partner and managing director of Goldman Sachs, serving on other public companythe boards of directors of other public companies and as a non-profit entrepreneur led the Board of Directors to recommend that she should serve as a director. |
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| | David W. JoosTodd P. Kelsey Director since 20012017
Mr. Joos was Chairman of the Board of CMS Energy Corporation, an energy company,Kelsey has been Chief Executive Officer and its primary electric utility, Consumers Energy Company, from 2010 to May 2016. Mr. Joos is a director of AECOM Technology Corporation.Plexus Corp., an electronics design, manufacturing and aftermarket services company, since 2016, and he also served as Plexus’s President from 2016 to January 2022. He joined Plexus in 1994. Age 63.
57.
Mr. Joos’Kelsey’s global experience, technology background and current role as a former CEOthe chief executive officer of a publicly tradedglobal company his leadership and analytical skills and his qualification as an audit committee financial expert led the Board of Directors to recommend that he should serve as a director. |
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| | James P. KeaneJennifer C. Niemann Director since 20132017
Mr. KeaneMs. Niemann has been the President and Chief Executive Officer of Forward Space, LLC, an independent Steelcase Inc.dealership, since March 2014. Mr. Keane served as our President and Chief Operating Officer from April 2013From 1992 to March 2014, Chief Operating Officer from November 2012 to April 2013, and President,she held various positions at Steelcase, Group from October 2006 to November 2012. Mr. Keane joined Steelcase in 1997. Mr. Keane is a director of Rockwell Automation, Inc. Age 56.
Mr. Keane's role as our President andincluding Chief Executive Officer of Red Thread, a Steelcase-owned dealership, from 2011 to 2014. Age 53.
Ms. Niemann’s experience with our company, having served as an employee for more than 20 years and his experience inas current owner of a Steelcase dealership, and her understanding of and commitment to creating long-term, sustainable value for our company and our various leadership roles atstakeholders as a member of one of the founding families of our company led the Board of Directors to recommend that he shouldshe serve as a director. |
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| | Robert C. Pew III Director since 1987
Mr. Pew III has been a private investor since 2004. From 1974 to 1984 and from 1988 to 1995, Mr. Pew IIIhe held various positions at Steelcase, including President, Steelcase North America and Executive Vice President, Operations. During the period fromFrom 1984 to 1988, Mr. Pew III was a majority owner of an independent Steelcase dealership. Mr. Pew III has served as Chair of our Board of Directors since June 2003. Age 65.
71.
Mr. Pew’s experience with our company, having served as a director for more than 2530 years, as an employee for more than 15 years and as an owner of a Steelcase dealership for four years, and his understanding of and commitment to creating long-term, sustainable value for our company and our various stakeholders as a member of one of the long-term interestsfounding families of our company and its shareholders led the Board of Directors to recommend that he should serve as a director. Mr. Pew is the brother of Kate Pew Wolters. |
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| | Cathy D. Ross Director since 2006
Ms. Ross was Executive Vice President and Chief Financial Officer of Federal Express Corporation, an express transportation company and subsidiary of FedEx Corporation, from September 2010 to July 2014. Ms. RossShe is a director of Ball Corporation and was a director of Avon Products, Inc. from 2016 to 2018. Age 58.
64.
Ms. Ross’Ross’s experience in senior management of a global public company, her experience serving on the boards of directors of other public companies and her qualification as an audit committee financial expert led the Board of Directors to recommend that she should serve as a director. |
| | Catherine C. B. Schmelter Director since 2019
Ms. Schmelter was Senior Vice President, Chief Transformation Officer of TreeHouse Foods, Inc., a manufacturer of packaged food and beverages, from February 2020 to January 2022. She joined TreeHouse in 2016 and served as Senior Vice President, Division President, Meal Solutions from 2019 to 2020, President, Condiments and Head of Sales - Foodservice & Canada from 2017 to 2019 and President, Meals from 2016 to 2017. Age 53. Ms. Schmelter’s experience in strategy, branding, sales, marketing, innovation and finance led the Board of Directors to recommend she serve as a director. |
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| | Peter M. Wege II Director since 1979
Mr. Wege II has been ChairmanPresident of the Board of Directors of Contract Pharmaceuticals Limited,Moodoos Inc., a manufacturer and distributor of prescription and over-the-counter pharmaceuticals,family-owned investment firm, since 2000. From 1981 to 1989, he held various positions at Steelcase, including President of Steelcase Canada Ltd. Age 67.
73.
Mr. Wege’s experience with our company, having served as a director for more than 3540 years and as an employee for 8 years, and his understanding of and commitment to creating long-term, sustainable value for our company and our various stakeholders as a member of one of the long-term interestsfounding families of our company and its shareholders led the Board of Directors to recommend that he should serve as a director. |
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| | P. Craig Welch, Jr.Linda K. Williams Director since 19792020
Mr. Welch, Jr.Ms. Williams has been ManagerVice President, Global Head of Go-to-Market Finance, Google Cloud of Google LLC since June 2021. Prior to joining Google, she was with Hewlett Packard Enterprise, serving as Senior Vice President, HPE Products and Services Chief Financial Officer from February to May 2021, Chief Audit Executive and Vice President of Enterprise Risk Management from 2019 to February 2021 and Vice President and Chief Financial Officer, HPE Pointnext Services Division from 2015 to 2019. Age 52.
Ms. Williams’ experience in a membervariety of Honzo Fund LLC, an investment/venture capital firm, since 1999. From 1967 to 1987, Mr. Welch, Jr. held various positionsfinancial, audit and risk management roles at Steelcase, including Director of Information Servicesglobal public companies and Director of Production Inventory Control. Age 71.
Mr. Welch’s experience with our company, having served as a director for more than 35 years andher qualification as an employee for 20 years, and his understanding of the long-term interests of our company and its shareholdersaudit committee financial expert led the Board of Directors to recommend that he shouldshe serve as a director.
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| | Kate Pew Wolters Director since 2001
Ms. Wolters has been engaged in philanthropic activities since 1996. She is President of the Kate and Richard WoltersKRW Foundation and a community volunteer and advisor. She serves as Chair of the Board of Trustees of the Steelcase Foundation. Age 59.
65. Ms. Wolters’ experience in philanthropic activities and community involvement and her understanding of and commitment to creating long-term, sustainable value for our company and our various stakeholders as a member of one of the long-term interestsfounding families of our company and its shareholders led the Board of Directors to recommend that she should serve as a director. Ms. Wolters is the sister of Robert Pew. |
Related Directors
Robert C. Pew III and Kate Pew Wolters are brother and sister and are cousins of William P. Crawford and P. Craig Welch, Jr., and Mr. Crawford and Mr. Welch, Jr. are cousins of each other.
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BOARD DEMOGRAPHICS
The following charts set forth certain demographic information for our Board of Directors.
DIRECTOR INDEPENDENCE
Our Board of Directors has determined that Lawrence J. Blanford, Connie K. Duckworth, R. David Hoover, David W. Joos, Robert C. Pew III, Cathy D. Ross, Peter M. Wege II, P. Craig Welch, Jr.all of our director nominees other than Sara Armbruster and Kate Pew WoltersJennifer Niemann are independent. Elizabeth Valk Long, who served as a director during a portion of fiscal year 2016, was also determined to be independent. James P. KeaneMs. Armbruster is not considered independent because he currently serves as our President and CEO, and William P. Crawfordshe is an executive officer of Steelcase. Ms. Niemann is not considered independent because his daughtershe is the majority owner of an independent Steelcase dealership, as described under "Relatedin Related Person Transactions." All ofTransactions. In addition, the members of our Audit, Compensation andBoard previously determined that Lawrence Blanford, who retired from the Board in July 2021, was independent.
On an annual basis, the Nominating and Corporate Governance Committees are independent.
Committee assesses the independence of our directors by reviewing and considering all relevant facts and circumstances and presents its findings and recommendations to our Board of Directors. The independence of our directors is assessed using the listing standards of the NYSE, and our Board adopted categorical standards to guide the determination of each director’s independence. A copy of these categorical standards for director independence is also available in the Investor Relations section of our website, located at ir.steelcase.com, and found under “Corporate“ESG - Corporate Governance.”
On an annual basis,For fiscal year 2022, the Nominating and Corporate Governance Committee assessesconsidered that, during the independenceyear:
•Timothy Brown and Linda Williams were executive officers of, or employed by, companies which purchased products and/or services from us or our directors by reviewingdealers and/or from which we purchased services; and considering all relevant facts and circumstances and presents its findings and recommendations to our Board of Directors. For fiscal year 2016, the following relationships were considered by the Committee in assessing the independence of our directors:
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Director | Relationships Considered |
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William P. Crawford | As described under “Related Person Transactions,” Mr. Crawford's daughter, Jennifer C. Niemann, is the majority owner and President and CEO of Forward Space, LLC, an independent Steelcase dealership to which we sold approximately $53.3 million in products and services and paid approximately $312,000 in dealer incentives and rebates, and from which we purchased approximately $5,000 in services, in fiscal year 2016. These transactions were made in the ordinary course of business on terms substantially similar to those offered to other independent dealers in the U.S. |
Connie K. Duckworth | Ms. Duckworth is the pro bono Chairman and Chief Executive Officer of ARZU, Inc., a non-profit organization from which we purchased approximately $43,000 in products in fiscal year 2016. The transactions were made in the ordinary course of business on an arm's-length basis. |
P. Craig Welch, Jr. | As described under "Related Person Transactions," Mr. Welch, Jr.’s brother-in-law is a 25% owner of the parent company of A&K Finishing, Inc., a supplier from which we purchased approximately $138,000 in products and/or services in fiscal year 2016. The transactions were made in the ordinary course of business on an arm's-length basis. |
In addition, the Committee considered that •immediate family members of Directors Blanford,Timothy Brown, Connie Duckworth, Joos, RossTodd Kelsey, Robert Pew, Catherine Schmelter, Peter Wege and WegeLinda Williams were owners, directors and/or employees of companies which purchased products and/or services from us or our dealers and/or from which we purchased servicesproducts and/or services.
In each case, the transactions were conducted in the ordinary course of business on an arm's-length basis. In each case, the purchasesarm’s-length basis and involved less than the greater of $1 million or 1% of the other company’s annual gross revenues.
The Committee determined that each of the relationships it considered, other than thesuch relationship with Forward Space, LLC, fell within the categorical standards adopted by the Board and, as a result, the relationships were not considered material.
The Steelcase Foundation
The Steelcase Foundation is a charitable organization operating under Section 501(c)(3) of the Internal Revenue Code which was established in 1951 by our company to give back to the communities that have been instrumental to our operations and growth by making grants to non-profit organizations, projects and programs in those communities. From time to time, we donate a portion of our earnings to the Foundation, as determined by our Board of Directors. The following directors also serve as Foundation trustees: James P. Keane,Sara Armbruster, Robert C. Pew III and Kate Pew Wolters, who serves as Chair of the Board of Trustees.Trustees of the Foundation. The other trustees of the Foundation are Brian Cloyd, Mary Anne Hunting, Mary Goodwillie Nelson (sisterCraig Niemann (husband of Director Peter M. Wege II)Jennifer Niemann), Craig M. Niemann (son-in-lawCary Pew (son of Director William P. Crawford)Robert Pew) and Elizabeth Welch.
RELATED PERSON TRANSACTIONS
Related Person Transactions Policy
We have a written Related Person Transactions Policy under which the Nominating and Corporate Governance Committee is responsible for reviewing and approving transactions with us in which certain “related persons,” as defined in the policy, have a direct or indirect material interest. Related persons include our directors and executive officers, members of their immediate family and persons who beneficially own more than 5% of any class of our voting securities. A copy of our Related Person Transactions Policy is posted in the Investor Relations section of our website, located at ir.steelcase.com, and found under “Corporate“ESG - Corporate Governance.”
Under the policy, our General Counsel determines whether any identified potential related person transaction requires review and approval by the Nominating and Corporate Governance Committee, in which case the transaction is presented at the next Committee meeting for approval, ratification or other action. In those instances where it is not practicable or desirable to wait until the next meeting, the Committee has delegated authority to the Committee Chair to consider the transaction in accordance with the policy. If management becomes aware of an existing related person transaction which has not been approved by the Committee, the transaction is presented for appropriate action at the next Committee meeting.
The Nominating and Corporate Governance Committee is authorized to approve related person transactions which are in, or are not inconsistent with, the best interests of our company and our shareholders. Certain categories of transactions have been identified as permissible without approval by the Committee, as the transactions involve no meaningful potential to cause disadvantage to us or to give advantage to the related person. These categories of permissible transactions include, for example, the sale or purchase of products or services at prevailing prices in the ordinary course of business if (1) the amount involved diddoes not exceed 5% of our gross revenues or the gross revenues of the related person, (2) our sale or purchase decision wasis not influenced by the related person while acting in any capacity for us and (3) the transaction diddoes not result in a commission, enhancement or bonus or other direct benefit to an individual related person.
In considering any transaction, the Nominating and Corporate Governance Committee considers all relevant factors, including, as applicable:
•the benefits to us,us;
•the impact on a director’s independence,independence;
•the availability of other sources for comparable products or services,services;
•the terms of the transactiontransaction; and
•the terms available to unrelated third parties, or to employees generally, for comparable transactions.
Related Person Transactions
Purchases from A&K Finishing, Inc.
During fiscal year 2016, we purchased approximately $138,000 in products and/or services from A&K Finishing, Inc. Robert Corl is a 25% owner and director of A&K Finishing and the brother-in-law of P. Craig Welch, Jr., one of our directors and a beneficial owner of more than 5% of our Class A Common Stock and Class B Common Stock. The amounts paid to A&K Finishing represent less than 5% of its annual revenues and our annual revenues, and the purchases were made in the ordinary course of business on an arm's-length basis. This supply relationship is continuing in fiscal year 2017.
Purchases from Fifth Third Bancorp
During fiscal year 2016, we paid approximately $257,000 in fees to Fifth Third Bancorp and its subsidiaries, or Fifth Third, for cash management services, letter of credit fees, credit facilities, investment fees and retirement plan services. Fifth Third is a record holder of more than 5% of our Class A Common Stock and Class B Common Stock. The amounts paid to Fifth Third represent less than 5% of its annual revenues and our annual revenues, and the purchases were made in the ordinary course of business on an arm's-length basis. We continue to purchase such services from Fifth Third in fiscal year 2017.
Related person employeesemployee
We employ Barry Brennand as a Sales Consultant - Educational Solutions, which is not an executive officer position. Mr. Brennand is the husband of Gale Moutrey, our Vice President, Communications. For fiscal year 2016, Mr. Brennand earned $145,059 in total compensation, which included his base salary, an annual cash award under our Employee Bonus Plan, amounts earned under our Sales Incentive Plan, company retirement plan contributions, the incremental cost of a company car, and tax return preparation costs and tax equalization payments relating to work performed in the U.S. He also participated in other benefit programs on the same terms as other Canadian employees in comparable situations. We continue to employ Mr. Brennand in fiscal year 2017.
We employ Mary-Louise Hooker as a Senior Consultant, Channel Development, which is not an executive officer position. Ms. Hooker is the sister of Lizbeth S. O'Shaughnessy,O’Shaughnessy, our Senior Vice President, Chief Administrative Officer, General Counsel and Secretary. For fiscal year 2016,2022, Ms. Hooker earned $138,388$147,706 in total compensation, which included her base salary, an annual cash award under our Employee Bonus Plan, company retirement plan contributions and life insurance premiums paid by us. She also participated in other benefit programs on the same terms as other U.S. employees of Steelcase in comparable positions. We continue to employ Ms. Hooker in fiscal year 2017.2023.
Sales to and purchases fromTransactions with Forward Space, LLC
Forward Space, LLC is an independent Steelcase dealer, and Jennifer C. Niemann is the majority owner, President and CEOChief Executive Officer of Forward Space. Ms. Niemann is the daughter of William P. Crawford, one of our directors and a beneficial owner of more than 5% of our Class B Common Stock. Our transactions with Forward Space during fiscal year 20162022 consisted of (1) of:
•the sale by us of approximately $53.3$33.6 million in products and services to Forward Space, (2) Space;
•the purchase by us of approximately $5,000$4,000 in delivery installation and storageinstallation services from Forward SpaceSpace; and (3)
•the payment by us of approximately $312,000$2.0 million in dealercommissions and incentives and rebates to Forward Space. Our
These transactions with Forward Space were made in the ordinary course of business on terms substantially similar to those offered to other independent dealers in the U.S. This, and this dealer relationship is continuing in fiscal year 2017.2023. We have also entered into a sublease agreement with Forward Space under which it will sublease approximately 5,965 square feet of showroom space in Chicago, Illinois, from us for $12,427 per month from July 2022 to February 2025.
Sales to shareholders
The following companies are, or were during fiscal year 2022, beneficial owners of more than 5% of our Class A Common Stock, and they or Class B Common Stock and their respective affiliates purchased products and related services from us or our dealers, in the following amounts, during fiscal year 2016:2022:
The Bank of New York Mellon Corporation•Fifth Third Bancorp - approximately $6.3 million$435,000; and
Fifth Third - approximately $2.5 million
•The Vanguard Group Inc. - approximately $304,000$2.4 million.
In each case, the purchases represent less than 5% of our annual revenues and the shareholders'applicable shareholder’s annual revenues, and the purchases were made in the ordinary course of business at prevailing prices not more favorable to the shareholdersshareholder than those available to other customers for similar purchases.
Other transactions
In addition to the transactions detailed on the previous page, during fiscal year 2022, we entered into commercial transactions, either directly or indirectly through our dealers, with companies of which our directors, executive officers or their respective family members are owners or serve as directors, executive officers or employees. All of such transactions were entered into in the ordinary course of business on an arm’s‑length basis and represented an immaterial percentage of both our and the other party’s revenues, and the applicable related person did not receive any direct personal benefit from the transactions. Accordingly, we do not believe that any of the applicable related persons had a material interest in any of these transactions.
Review and Approval of Transactions
The Nominating and Corporate Governance Committee reviewed each of the transactions described above,detailed on the previous page, and following such review, the Committee approved the purchase of products and/or services from A&K Finishing, Inc., the employment of Mr. Brennand and Ms.Mary-Louise Hooker, and the payment of related compensation to each of themher and the sale and purchase of products and/or services to and fromtransactions with Forward Space, LLC. In each case, the director (if any) relatedPursuant to the person or entity involved in the transaction did not participate in theour Related Person Transactions Policy, approval of the transaction by the Nominating & Corporate Governance Committee. Approval of the transactions with Fifth Third The Bank of New York Mellon CorporationBancorp and The Vanguard Group Inc. was not required pursuant to our Related Person Transactions Policy, because such parties are institutional shareholders holding our stock with no apparent purpose or effect of changing or influencing control of our company.
BOARD MEETINGS
Our Board of Directors met eightnine times during fiscal year 2016.2022. Each of our directors attended at least 75% of the total number of meetings of the Board and the committees on which they served during the year. Our Board’s policy is that each director is expected to attend our annual meeting of shareholders, and each of our directors attended our 20152021 Annual Meeting.
COMMITTEES OF THE BOARD OF DIRECTORS
FourFive standing committees assist our Board of Directors in fulfilling its responsibilities: Audit, Compensation, Corporate Business Development, Executive, and Nominating and Corporate Governance. During fiscal year 2016, the Audit Committee met eight times, the Compensation Committee met six times, the Executive Committee did not meet, and the Nominating and Corporate Governance Committee met twice.
The following table indicates the current membership of each of the Board of Directors’ committees. All of the members of the Audit, Compensation, and Nominating and Corporate Governance Committees are independent.
|
| | | | |
Director | Audit Committee | Compensation Committee | Executive Committee | Nominating and Corporate Governance Committee |
| | | | |
Lawrence J. Blanford | Chair | | X | |
William P. Crawford | | | | |
Connie K. Duckworth | | X | X | Chair |
R. David Hoover | | Chair | X | X |
David W. Joos | X | X | | |
James P. Keane | | | X | |
Robert C. Pew III | | | Chair | |
Cathy D. Ross | X | | | |
Peter M. Wege II | X | | | X |
P. Craig Welch, Jr. | | X | | X |
Kate Pew Wolters | | X | | |
The Audit, CompensationBusiness Development, and Nominating and Corporate Governance Committees operate under written charters adopted by the Board of Directors that are reviewed and assessed at least annually. Their current charters are available in the Investor Relations section of our website, located at ir.steelcase.com, and found under “Corporate“ESG - Corporate Governance.”
The following table indicates the current membership of each of the Board of Directors’ committees and the number of meetings held during fiscal year 2022. All of the members of the Audit, Compensation, and Nominating and Corporate Governance Committees are independent.
| | | | | | | | | | | | | | | | | |
| Director | Audit Committee | Compensation Committee | Corporate Business Development Committee | Executive Committee | Nominating and Corporate Governance Committee |
| | | | | |
| Sara E. Armbruster | | | | X | |
| Timothy C. E. Brown | | | Chair | X | X |
| Connie K. Duckworth | | X | | X | Chair |
| Todd P. Kelsey | Chair | | X | X | |
| Jennifer C. Niemann | | | X | | |
| Robert C. Pew III | | | | Chair | |
| Cathy D. Ross | X | Chair | | X | |
| Catherine C. B. Schmelter | | X | | | X |
| Peter M. Wege II | X | | X | | |
| Linda K. Williams | X | | | | X |
| Kate Pew Wolters | | X | | | X |
| Meetings held in fiscal year | 8 | 9 | 4 | 0 | 4 |
Audit Committee
The Audit Committee was established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)(which we refer to as the Exchange Act).
The Its principal responsibilities of the Audit Committee are:
•appointing theour independent auditor, andevaluating its independence, reviewing and approving its services and fees in advance;
advance, reviewing theits performance of our independent auditor and, if circumstances warrant, making decisions regarding its replacement or termination;
evaluating the independence of the independent auditor;
•reviewing and concurring with the appointment, replacement, reassignment or dismissal of the head of our internal audit group, reviewing his or hertheir annual performance evaluation and reviewing the group’s budget and staffing;
•reviewing the scope of the internal and independent annual audit plans and monitoring progress and results;
•reviewing our critical accounting policies and practices;
•reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures;
•reviewing our financial reporting, including our annual and interim financial statements, as well as the type and presentation of information included in our earnings press releases;
•reviewing the process by which we monitor, assess and manage our exposure to risk;
•reviewing and concurring with the appointment, replacement, reduction in pay, reassignment or dismissal of the head of our corporate compliance function;
•reviewing compliance with our Global Business Standards and legal and regulatory requirements, as well as legalthe progress and regulatory compliance.results of corporate compliance projects; and
•overseeing our information technology systems and security.
The Board of Directors has designated each of Lawrence J. Blanford, David W. JoosTodd Kelsey, Cathy Ross and Cathy D. RossLinda Williams as an “auditaudit committee financial expert,”experts, as defined by the rules and regulations of the Securities and Exchange Commission, or the SEC, based on their respective financial and accounting education and experience. Mr. Blanford, Mr. Joos, Ms. Ross andAll of the other members of the Audit Committee, including Mr. Kelsey, Ms. Ross and Ms. Williams, are independent, as independence of audit committee members is defined by the listing standards of the NYSE.
Compensation Committee
The principal responsibilities of the Compensation Committee are:
•establishing our executive compensation philosophy;
•reviewing and approving the compensation of our executive officers, and submitting the compensation of our Chief Executive Officer, or CEO, to the Board of Directors for ratification;
•reviewing executive and non-executive compensation programs and benefit plans to assess their competitiveness, reasonableness and alignment with our compensation philosophy;
•making awards, approving performance targets, certifying performance againstcompared to targets and taking other actions under our incentive compensation plan;programs; and
•reviewing the Compensation Discussion and Analysis and other executive compensation disclosures contained in our annual proxy statements.
Delegation of Authority
Pursuant to its charter, the Compensation Committee may delegate its authority to subcommittees, provided that any such subcommittee must consist of at least two members, and the Committee may delegate appropriate responsibilities associated with our benefit and compensation plans to members of management.
The Compensation Committee has delegated to our CEO the authority to grant stock options, restricted stock and restricted units to employees. Under this delegated authority, our CEO cannot grant options to acquire more than 5,000 shares, more than 2,000 shares of restricted stock or more than 2,000 restricted units in any year to any one individual, and heshe cannot grant, in the aggregate, options to acquire more than 100,000 shares, more than 40,000 shares of restricted stock or more than 40,000 restricted units in any year. Also, ourOur CEO cannot grant any stock options, restricted stock or restricted units to any executive officer.
Our CEO has the authority to designate those employees who will participate in our Management Incentive Plan; however, the Compensation Committee is required to approve participation in such plan by any executive officer or anyone else who directly reports to our CEO. In addition, the Committee delegated to our CEO the authority to modify the size of the target awards granted under our Management Incentive Plan in fiscal years 2022 and 2023 to each of the other named executive officers by up to 10% of the officer’s base salary, positively or negatively, at the end of the fiscal year based on her assessment of the officer’s performance during the year.
The Compensation Committee has delegated certain responsibilities with regard to our Retirement Plan to an investment committee consisting of directors and members of management and to an administrative committee, each consisting of members of management. The Committee also has delegated to our executive officers all responsibilities associated with our broad-based health and welfare and retirement plans, including without limitation amending, merging and terminating plans and declaring discretionary, non-discretionary and matching contributions under our Retirement Plan.
Role of Executive Officers in Determining or Recommending Compensation
Our CEO develops and submits to the Compensation Committee hisher recommendation for the compensation of each of the named executive officers, other than himself,herself, in connection with annual reviews of their performance. The Compensation Committee reviews and discusses the recommendations made by our CEO, approves the compensation for each named executive officer, for the coming year and approves and submits the compensation of our CEO to the Board of Directors for ratification. In addition, our Chief Financial Officer and other members of our finance, internal audit, human resources and compensation teams assist the
Committee with establishing performance targets and payout scales for performance-based compensation, as well as with the calculation of actual financial performance and comparison to the performance targets, each of which requires the Committee’s approval. See Compensation Discussion and Analysis for more discussion regarding the role of executive officersour CEO in determining or recommending the amount or form of executive compensation.
Role of Compensation Consultants
Pursuant to its charter, the Compensation Committee has the sole authority to retain and terminate independent compensation consultants of its choosing to assist the Committee in carrying out its responsibilities. The Committee has appointed Exequity LLP or Exequity, to serve as its independent compensation consultant reporting directly to the Committee. Exequity is responsible for providing information, insight and perspective for the Compensation Committee’s use in making decisions on all elements of executive compensation. See Compensation Discussion and Analysis on pages 30-31 under the heading “Compensation Consultant” for more detail regarding the nature and scope of Exequity’s assignment and the material elements of the instructions or directions given to them with respect to the performance of their duties.assignment. We have not purchased any additional services from Exequity beyond those provided to the Compensation Committee, and no potential conflicts of interestsinterest have been identified with regard to the work performed by Exequity.Exequity for the Committee.
Compensation Risk Assessment
During fiscal year 2016,2022, our management conducted an assessment of our employee compensation policies and practices and concluded that any risks arising from such policies and practices are not reasonably likely to have a material adverse effect on our company. The assessment was reviewed and discussed with the Compensation Committee, which concurred with management’s conclusions.
Compensation Committee Interlocks and Insider Participation
None of the members of our Compensation Committee was an officer or employee of our company during the fiscal year or was formerly an officer of our company, and none of our executive officers served on (1) the compensation committee (or its equivalent) or board of directors of another entity whose executive officer served on our Compensation Committee or (2) the compensation committee (or its equivalent) of another entity whose executive officer served on our Board of Directors.
Corporate Business Development Committee
The principal responsibilities of the Corporate Business Development Committee are (1) reviewing and overseeing the development and implementation of our growth strategies and (2) reviewing and making recommendations to our Board of Directors with respect to investments in our growth strategies and business acquisitions or our Compensation Committee. See Related Person Transactionsdivestitures for a discussion of a transaction between our company and a relative of Director P. Craig Welch, Jr., who serves on our Compensation Committee.which Board approval is required.
Executive Committee
The Executive Committee is authorized to exercise the powers of our Board of Directors when necessary between regular meetings, subject to any legal or regulatory limitations, and performs such other duties as assigned by the Board of Directors from time to time. The members of the Executive Committee consist of theour Board Chair, our CEO and the Chairs of each of the Audit, Compensation, Corporate Business Development, and Nominating and Corporate Governance Committees and James P. Keane.Committees.
Nominating and Corporate Governance Committee
The principal responsibilities of the Nominating and Corporate Governance Committee are:
•establishing procedures for identifying and evaluating potential director nominees and recommending nominees for election to our Board of Directors;
•reviewing the suitability for continued service of directors when their terms are expiring or a significant change in responsibility occurs, including a change in employment;
•reviewing annually the composition of our Board to ensure it reflects an appropriate balance of knowledge, experience, skills, expertise and diversity;
•making recommendations to our Board regarding its size, the frequency and structure of its meetings and other aspects of its governance procedures;
•making recommendations to our Board regarding the functioning and composition of Board committees;
•reviewing our Corporate Governance Principles and Code of Business Conduct at least annually and recommending appropriate changes to our Board;
•overseeing our strategy and policies with respect to environmental, social and governance, or ESG matters, including sustainability and corporate social responsibility factors, and periodically reviewing our performance against our ESG goals;
•considering and making recommendations to the Board regarding any corporate governance issues that may arise from time to time;
•overseeing the annual self-evaluation of our Board and annual evaluation of our CEO;
•reviewing director compensation and recommending appropriate changes to our Board;
•administering our Related Person Transactions Policy and the Board’s policy on disclosing and managing conflicts of interest, including reviewing and approving any related person transactions under our Related Person Transactions Policy;
•considering any waiver requests under our Code of Ethics and Code of Business Conduct; and
•reviewing the annual budget established for the Board and monitoring the spending against such budget.
OTHER CORPORATE GOVERNANCE MATTERS
Corporate Governance Principles
Our Board of Directors is committed to monitoring the effectiveness of policypolicy- and decision makingdecision-making at the Board and management levels. Fundamental to its corporate governance philosophy is the Board’s commitment to upholding our reputation for honesty and integrity. Equally fundamental is its commitment to serving as an independent overseer of our management and operations. Our Board adopted a set of Corporate Governance Principles, a copy of which can be found in the Investor Relations section of our website, located at ir.steelcase.com, and found under “Corporate“ESG - Corporate Governance.”
Board of Directors Leadership Structure
The leadership structure of our Board of Directors involves a Board Chair who is not our principal executive officer. Robert C. Pew III serves as non-executive Board Chair, of the Board, and James P. KeaneSara Armbruster serves as our CEO. OurAs a matter of practice, our Board of Directors has chosen to keep the roles of Board Chair of the Board and CEO
separate as a matter offor many years, reflecting sound corporate governance practices and a balance ofbalancing responsibilities, with an
independent director serving as Chair of the Board.our Board Chair. This structure allows Mr. KeaneMs. Armbruster to focus on the day-to-day leadership of our business, while Mr. Pew is able to focus on the leadership of our Board of Directors and its oversight of our company.
Executive Sessions of Non-Management Directors
Our Board of Directors regularly meets in executive session without any members of management present. During these sessions, Robert Pew, as our Board Chair, presides. Our Corporate Governance Principles provide that if our Board Chair were to be a member of management, the outside directors would designate a member to preside at executive sessions.
Risk Oversight
Our risk assessment and management practices are led by our Enterprise Risk Management Committee, which includes our CEO, our Chief Financial Officer, our General Counsel, our Chief Technology Officer and other senior members of our finance, legal and strategy teams. Our Board of Directors administers its oversight of risk assessment and management practices in several ways. Our Chief Financial Officer oversees our risk assessment and management practices. On a quarterly basis, the Audit Committee reviews a business risk profile prepared by managementreport from our Enterprise Risk Management Committee which summarizesdetails the keytop enterprise risks faced by the Company and the likelihood and anticipated financial impact of each risk materializing,we face, as well as any significant changes in the risk profile from the previous quarter.report. On an annual basis, the Compensation Committee reviews a risk assessment of our employment compensation policies and practices prepared by management. In addition, risk identification and risk management are discussed by the Board of Directors on a regular basis as part of its review of our financial performance and business and strategic planning.
We believe our Board of Directors’Board’s oversight of risk management is strengthened by having an independent director serve as Chairour Board Chair.
One area of risk management that is a particular area of focus for our Board of Directors is cybersecurity risk. Our Audit Committee receives an update on cybersecurity risk management at least twice each year, and any significant cybersecurity events are reviewed with our Board as appropriate. We use a cybersecurity scorecard that follows the Board.National Institute of Standards and Technology’s Cybersecurity framework to identify and mitigate our cybersecurity risks. We have a dedicated team that oversees and implements our cybersecurity management, compliance with applicable legal and third party data protection and data privacy requirements, and our incident response and crisis management plans. The team also provides ongoing cybersecurity awareness education and annual cybersecurity training for our employees.
Executive Sessions of Non-Management DirectorsESG Matters
Our Board meets quarterly in executive session without any members of management present. During these sessions, Robert C. Pew III, as Chair ofWe focus not only on generating long-term value for our shareholders but also on providing long-term value for all stakeholders, including our customers, employees, suppliers, partners and local communities. This inclusive, sustainable approach reaffirms our long-held commitment that business can be a force for good and that we all have an important role to play. To that end, the Board, presides. OurNominating and Corporate Governance Principles provide that if the Chair of the BoardCommittee has oversight over our ESG strategy and policies, including (1) our progress against our science-based targets for reducing greenhouse gas emissions, (2) our social innovation practice to drive scalable, systemic and sustainable social change by reducing inequity, ensuring inclusive and equitable quality education and combating climate change and its impact and (3) our progress against our diversity, equity and inclusion goals. More information about our goals and progress can be found in our Impact Report, which is a member of management, the outside directors will designate a member to presideavailable on our website at executive sessions. ir.steelcase.com, and found under “ESG.”
Consideration of Candidates for Director
The Nominating and Corporate Governance Committee considers candidates suggested by its members, other directors and senior management in anticipation of potential or expected vacancies on our Board vacancies.of Directors. After identifying a potential candidate, the Committee collects and reviews publicly available information to assess whether he or shethey should be considered further. If the candidate
warrants further consideration, the Chair or another member of the Committee will initiate a contact. Generally, if the person expresses a willingness to be considered, the Committee requests information from the candidate, reviews his or hertheir qualifications and accomplishments and conducts one or more interviews with the candidate. Committee members may also contact references or others who have personal knowledge of the candidate’s accomplishments.
Nominees for director are selected on the basis of several criteria, the most fundamental of which is integrity. Directors are expected to be curious and demanding independent thinkers, whoand they must possess appropriate business judgment and arebe committed to representing the interests of our shareholders. Directors must possess knowledge, experience, skills or expertise that will enhance our Board’sBoard of Directors’ ability to direct our business.business, and they must be willing and able to spend the time and effort necessary to effectively perform their responsibilities. Our Board is committed to diversity, and a candidate’s ability to add to the diversity of our Board is also considered. Directors must be willingOur Nominating and able to spend the timeCorporate Governance Committee and effort necessary to effectively perform their responsibilities, and they should volunteer to resign from our Board in the event theydo not have a significant changepolicy with regard to the consideration of diversity in responsibilities, including a change in employment, in accordance with ouridentifying director nominees.
The Nominating and Corporate Governance Principles.
The Committee will consider candidates recommended by shareholders for nomination by the Board of Directors, taking into consideration the needs of the Board and the qualifications of the candidate. Shareholders must submit recommendations to our corporate secretary in writing and include the following information:
•the recommending shareholder’s name and evidence of ownership of our stock, including the number of shares owned and the length of time owned; and
•the candidate’s name, resumerésumé or a listing of qualifications to be a director of our company and the candidate’s consent to be named as a director if selected by the Nominating and Corporate Governance Committee and nominated by the Board.
Shareholders may also make their own nominations for director by following the process specified in our By-laws. Any shareholder who intends to nominate a director to be elected at our 20172023 Annual Meeting of Shareholders must give written notice of such intent, delivered no earlier than April 14, 20172023 and no later than May 4, 2017.2023.
To comply with the universal proxy rules (once they are effective), shareholders who intend to solicit proxies for our 2023 Annual Meeting of Shareholders in support of director nominees other than those nominated by our Board of Directors must provide notice to us by no later than May 14, 2023. Such notice must include the information required by Rule 14a-19 under the Exchange Act.
Shareholder Communications
Our Board of Directors has adopted a process for interested parties to send communications to the Board. To contact the Board, any of its committees, theour Board Chair of the Board (or the lead non-management director, if one iswere to be subsequently appointed) or any of our other directors, please send a letter addressed to: Board of Directors, c/o Lizbeth S. O’Shaughnessy, Secretary, Steelcase Inc., P.O. Box 1967, Grand Rapids, MI 49501-1967.
All such letters will be opened by the corporate secretary. Any contents that are not advertising, promotions of a product or service or patently offensive material will be forwarded promptly to the addressee. In the case of communications to the Board of Directors or any committee or group of directors, the corporate secretary will make sufficient copies of the contents and send them to each director who is a member of the committee or group to which the envelope is addressed.
Code of Ethics and Code of Business Conduct
Our Board of Directors adopted a Code of Ethics applicable to our chief executive and senior financial officers, as well as a Code of Business Conduct that applies to all of our employees and directors. Only our Nominating and Corporate Governance Committee may grant any waivers of either code for a director or executive officer. Each of these codes is available in the Investor Relations section of our website, located at ir.steelcase.com, and found under “Corporate“ESG - Corporate Governance."” If any amendment to, or waiver from, a provision of our Code of Ethics is made for our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions, we will also post such information in the Corporate Governance section of our website. To date, no such waivers have been requested or issued.
Available Information
The following materials are available on our website at ir.steelcase.com, and found under "Corporate Governance"“ESG - Corporate Governance”:
•Code of Ethics for Chief Executive and Senior Financial Officers;
•Code of Business Conduct,Conduct;
•Corporate Governance Principles,Principles; and
•the charters of our Audit, Committee Charter,
Compensation, Committee CharterCorporate Business Development, and
Nominating and Corporate Governance Committee Charter.Committees.
We will send you a copy of any of these materials upon request and without charge. Please send any such request to us either by email at ir@steelcase.com or by mail at: Steelcase Inc., Investor Relations, GH-3E, P.O. Box 1967, Grand Rapids, MI 49501-1967.
DIRECTOR COMPENSATION
Standard Arrangements
Our standard compensation arrangements for our non-employee directors for fiscal year 20162022 were as follows:
| | | | | | | | | | | |
| Type of Compensation | Director | Board Chair |
| | | |
| Board Annual Retainer | $ | 215,000 | | | $ | 322,500 | |
| Committee Chair Annual Retainers: | | | |
| Audit Committee | $ | 20,000 | | | |
| Compensation Committee | $ | 15,000 | | | |
| Corporate Business Development Committee | $ | 15,000 | | | |
| Nominating and Corporate Governance Committee | $ | 15,000 | | | |
| Audit Committee Member Annual Retainer | $ | 10,000 | | | |
|
| | | | | | | |
| Type of Compensation | Director | Board Chair |
| | | | |
| Board Annual Retainer | $ | 180,000 |
| | $ | 270,000 |
|
| Committee Chair Annual Retainers: | | | |
| Audit Committee | $ | 15,000 |
| | |
| Compensation Committee | $ | 10,000 |
| | |
| Nominating and Corporate Governance Committee | $ | 10,000 |
| | |
| Audit Committee Member Annual Retainer | $ | 5,000 |
| | |
BoardThe board, board chair and committee chair retainers arefor fiscal year 2022 were payable 40% in cash and 60% in shares of our Class A Common Stock, and Audit Committee member retainers arewere payable in cash. AEach director maywas permitted to elect to receive all or a part of the cash portion of his or her Boardtheir board, board chair and committee chair retainers in shares of our Class A Common Stock. All shares granted to our directors as part of their non-cash director compensation arewere granted in the form of our Class A Common Stock under our Incentive Compensation Plan. The number of shares issued iswas based on the fair market value of the Class A Common Stock on the date the shares arewere issued.
Neither Sara Armbruster nor James P. Keane (who was a member of our President and CEO, is a director, but he does not receive anyBoard of Directors until his retirement in January 2022) received additional compensation for histheir service as a directordirectors or committee membermembers because he is an employee.they were employees.
All directors (including committee chairs and the Board Chair) are reimbursed for reasonable out-of-pocket expenses incurred to attend Board and committee meetings.
Outside directors who are not retirees of our company are eligible to participate in our Benefit Plan for Outside Directors, which provides access to medical, dental and vision coverage for the directors and their qualifying dependents that is comparable to the health insurance benefits provided to U.S. employees under our Employee Benefit Plan. Participating directors are responsible for paying the applicable premiums for all coverage elected under the plan.
The Nominating and Corporate Governance Committee reviews and evaluates the reasonableness and competitiveness of our compensation and benefit programs and practices for our non-employee directors on an annual basis, utilizing data from peer groups of similarly sized companies. The data includes information regarding board annual retainers, committee chair annual retainers and other fees as well as prevalence of amounts paid in shares or cash and benefits provided. The Committee reviews the comparison data to assess whether or not the non-employee director compensation and benefits are within a competitive range and also determines if the structure is reasonable. The Committee’s recommendations with regard to non-employee director compensation and benefits are reviewed and approved by the full Board of Directors.
Non-Employee Director Deferred Compensation Plan
Each of our outside directors is eligible to participate in our Non-Employee Director Deferred Compensation Plan. Under this plan, directors may defer all or part of their retainers and/or committee fees until they no longer serve on our Board.Board of Directors. A participating director may elect to have the deferred amount deemed invested in Class A Common Stock or several other investment funds.funds, but any portion which would have otherwise been payable in shares of our Class A Common Stock must be deferred as a deemed investment in Class A Common Stock.
Director Stock Ownership Guidelines
OurEach non-employee directors aredirector is required to be paid at least 60%own and maintain shares of their board and committee chair annual retainers in the form of eitherour Class A Common Stock, issued underClass B Common Stock or deemed shares invested in our Incentive Compensation Plan or elect a deemed investment in Class A Common Stock under our Non-Employee Director Deferred Compensation Plan. Each directorPlan equal in value to at least five times the portion of the board annual retainer which is requiredpayable in cash. This requirement must be achieved within five years from the director’s initial appointment to beneficially own a total numberthe Board of sharesDirectors. All of Steelcase Inc. Class A Common Stock and/our non-employee directors who have served on the Board for five years or Class B Common Stock which equals or exceedsmore are in compliance with the total number stock ownership guidelines.
Director Compensation Table
The following table shows the compensation earned by each of our non-employee directors in fiscal year 2022.
2016.
Fiscal Year 20162022 Director Compensation Table
| | | | | | | | | | | | | | | | | |
| Name | Fees Earned
or Paid
in Cash (1) | Stock
Awards (2) | Total |
| | | | | |
| Lawrence J. Blanford (3) | $ | 47,000 | | | $ | 70,500 | | | $ | 117,500 | |
| Timothy C. E. Brown | $ | 92,000 | | | $ | 138,000 | | | $ | 230,000 | |
| Connie K. Duckworth | $ | 92,000 | | | $ | 138,000 | | | $ | 230,000 | |
| Todd P. Kelsey | $ | 97,000 | | | $ | 138,000 | | | $ | 235,000 | |
| Jennifer C. Niemann | $ | 86,000 | | | $ | 129,000 | | | $ | 215,000 | |
| Robert C. Pew III | $ | 129,000 | | | $ | 193,500 | | | $ | 322,500 | |
| Cathy D. Ross | $ | 102,000 | | | $ | 138,000 | | | $ | 240,000 | |
| Catherine C. B. Schmelter | $ | 91,000 | | | $ | 129,000 | | | $ | 220,000 | |
| Peter M. Wege II | $ | 96,000 | | | $ | 129,000 | | | $ | 225,000 | |
| Linda K. Williams | $ | 96,000 | | | $ | 129,000 | | | $ | 225,000 | |
| Kate Pew Wolters | $ | 86,000 | | | $ | 129,000 | | | $ | 215,000 | |
_____________
(1)The amounts shown in this column reflect the portion of the directors’ retainers payable in cash, including any of such amounts which our directors elected to defer under our Non-Employee Director Deferred Compensation Plan.
(2)The amounts shown in this column reflect the portion of the directors’ retainers payable in shares of our Class A Common Stock, including any of such amounts which our directors elected to defer under our Non-Employee Director Deferred Compensation Plan. |
| | | | | | | | | | | |
| Name | Fees Earned or Paid in Cash (1) | Stock Awards (2) | Total |
| | | | | | |
| Lawrence J. Blanford | $ | 78,000 |
| | $ | 117,000 |
| | $ | 195,000 |
|
| William P. Crawford | $ | 72,000 |
| | $ | 108,000 |
| | $ | 180,000 |
|
| Connie K. Duckworth | $ | 75,059 |
| | $ | 112,441 |
| | $ | 187,500 |
|
| R. David Hoover | $ | 76,079 |
| | $ | 113,921 |
| | $ | 190,000 |
|
| David W. Joos | $ | 77,000 |
| | $ | 108,000 |
| | $ | 185,000 |
|
| Elizabeth Valk Long (3) | $ | 40,500 |
| | $ | 57,000 |
| | $ | 97,500 |
|
| Robert C. Pew III | $ | 108,037 |
| | $ | 161,963 |
| | $ | 270,000 |
|
| Cathy D. Ross | $ | 77,000 |
| | $ | 108,000 |
| | $ | 185,000 |
|
| Peter M. Wege II | $ | 77,025 |
| | $ | 107,975 |
| | $ | 185,000 |
|
| P. Craig Welch, Jr. | $ | 72,025 |
| | $ | 107,975 |
| | $ | 180,000 |
|
| Kate Pew Wolters | $ | 72,025 |
| | $ | 107,975 |
| | $ | 180,000 |
|
| |
(1) | The amounts shown in this column reflect the portion of the directors’ retainers payable in cash, including any of such amounts which our directors elected to receive in shares of our Class A Common Stock or defer under our Non-Employee Director Deferred Compensation Plan. Shown in the following table are: |
•the number of shares of our Class A Common Stock issued to those directors who elected to receivereceived all or a part of this portion of their retainers in the form of shares; and
•the number of shares deemed credited under the Non-Employee Director Deferred Compensation Plan to those directors who elected to defer all or a part of this portion of their retainers as a deemed investment in Class A Common Stock.
|
| | | | | |
Director | Shares Issued | Deferred Stock Credited |
| | | |
Lawrence J. Blanford | — |
| | 4,277 |
|
David W. Joos | — |
| | 4,222 |
|
Elizabeth Valk Long | — |
| | 2,236 |
|
| |
(2) | The amounts shown in this column reflect the portion of the directors’ retainers payable in shares of our Class A Common Stock, including any of such amounts which our directors elected to defer under our Non-Employee Director Deferred Compensation Plan. Shown in the following table are: |
the number of shares of our Class A Common Stock issued to those directors who received all or a part of this portion of their retainers in the form of shares; and
the number of shares deemed credited under the Non-Employee Director Deferred Compensation Plan to those directors who elected to defer all or a part of this portion of their retainers as a deemed investment in Class A Common Stock.
The grant date fair value of the shares of Class A Common Stock issued was calculated using the closing price of our Class A Common Stock on the payment date multiplied by the number of shares issued.issued in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, or ASC Topic 718. The assumptions made in the valuation of such awards are disclosed in Note 1617 to the consolidated financial statements included in our annual report on Form 10-K for fiscal year 20162022 filed with the SEC on April 15, 2016.
2022.
|
| | | | | | | | | | |
| Director | Shares Issued | Deferred Stock Credited |
| | | |
| Lawrence J. Blanford | — |
| | 6,4144,542 |
|
William P. CrawfordTimothy C. E. Brown | — |
| | 5,9219,993 |
|
| Connie K. Duckworth | 6,1669,990 |
| | — |
|
R. David Hoover | 6,246 |
| Todd P. Kelsey | — |
| | 10,047 | |
David W. JoosJennifer C. Niemann | 9,340 | | | — |
| | 5,921 |
|
Elizabeth Valk Long | — |
| | 3,147 |
|
| Robert C. Pew III | 8,88014,010 |
| | — |
|
| Cathy D. Ross | — |
| | 5,9219,993 |
|
| Catherine C. B. Schmelter | — | | | 9,341 | |
| Peter M. Wege II | 5,9209,340 |
| | — |
|
P. Craig Welch, Jr.Linda K. Williams | 5,9209,340 |
| | — |
|
| Kate Pew Wolters | 5,9209,340 |
| | — |
|
| |
(3) | Ms. Long retired from our Board of Directors in July 2015. |
(3)Lawrence Blanford retired from our Board of Directors in July 2021.
Holdings of Deferred Stock
The following table indicates the total number of shares deemed credited under our Non-Employee Director Deferred Compensation Plan as of the end of fiscal year 20162022 to those directors who have deferred all or a portion of their retainer and/or fees as a deemed investment in Class A Common Stock:
|
| | | | |
| Director | Deferred Stock as of FYFiscal Year End |
| |
Lawrence J. BlanfordTimothy C. E. Brown | 38,55951,750 |
|
WilliamTodd P. CrawfordKelsey | 56,96547,657 |
|
David W. Joos | 173,407 |
|
Elizabeth Valk Long | 28,562 |
|
| Cathy D. Ross | 57,201131,528 |
|
| Catherine C. B. Schmelter | 22,497 | |
| Peter M. Wege II | 5,0686,235 |
|
P. Craig Welch, Jr. | 58,391 |
|
| Kate Pew Wolters | 1,8462,271 |
|
Other Benefits
During fiscal year 2016, each of our outside directors who is not a retiree of our company was eligible to receive healthcare coverage under our Benefit Plan for Outside Directors, which provides coverage comparable to the Steelcase Inc. Employee Benefit Plan generally available to U.S. employees of Steelcase Inc. The cost of participating in this plan is reported as taxable income for the director. The following table shows, for each outside director who participated in the plan during fiscal year 2016, the amount of taxable income relating to such participation.
|
| | | |
| Participating Directors | Fiscal Year 2016 Taxable Income |
| | |
| Lawrence J. Blanford | $ | 17,825 |
|
| R. David Hoover | $ | 1,196 |
|
| Robert C. Pew III | $ | 12,494 |
|
| Peter M. Wege II | $ | 12,494 |
|
| P. Craig Welch, Jr. | $ | 12,494 |
|
| Kate Pew Wolters | $ | 5,951 |
|
Other Payments Received by Directors
William P. Crawford currently receives payments under our Executive Supplemental Retirement Plan and is entitled to receive payments under a deferred compensation arrangement that was in effect when his employment with us ended. Mr. Crawford also participates in our retiree healthcare benefit plans on the same terms as other U.S. retirees. His rights to receive those payments and benefits are not conditioned on continued service on our Board.
STOCK OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The tables on this page and the following pages show the amount of Class A Common Stock and Class B Common Stock beneficially owned by certain persons. Generally, a person “beneficially owns” shares if the person has or shares with others the right to vote or dispose of those shares, or if the person has the right to acquire voting or disposition rights within 60 days (for example, by exercising options). Except as stated in the notes following the tables, each person has the sole power to vote and dispose of the shares shown in the tables as beneficially owned.
Each share of Class B Common Stock can be converted into one share of Class A Common Stock at the option of the holder. Ownership of Class B Common Stock is, therefore, deemed to be beneficial ownership of Class A Common Stock under the SEC’s rules and regulations. However, the number of shares of Class A Common Stock and the percentages shown for Class A Common Stock in the following tables do not account for this conversion right in order to avoid duplications in the number of shares and percentages that would be shown in the tables.
Directors and Executive Officers
This table shows the amount of common stock beneficially owned as of May 16, 20162022 by (a) each director, (b) each of the executive officers named in the Summary Compensation Table and (c) all of our directors and current executive officers as a group. The address of each director and executive officer is 901 44th Street SE, Grand Rapids, MI 49508.
In addition to the amounts shown below, certain of our directors also have deemed investments in our Class A Common Stock under our Non-Employee Director Deferred Compensation Plan, as discussed in Director Compensation on page 21 under the heading “Holdings of Deferred Stock.”
| | | | | | | | | | | | | | |
| Name | Class A Common Stock (1) | Class B Common Stock |
| Shares Beneficially Owned | Percent of Class | Shares Beneficially Owned | Percent of Class |
| | | | |
| Sara E. Armbruster | 67,076 | | * | — | | — |
| Timothy C. E. Brown | 265 | | * | — | | — |
| Connie K. Duckworth | 89,737 | | * | — | | — |
| James P. Keane | 927,658 | | 1.1 | % | — | | — |
| Todd P. Kelsey | 3,020 | | * | — | | — |
| Robert G. Krestakos | 46,672 | | * | — | | — |
| James N. Ludwig | 31,731 | | * | — | | — |
| Jennifer C. Niemann (2) | 24,216 | | * | 2,079,131 | | 8.4 | % |
| Lizbeth S. O’Shaughnessy | 238,043 | | * | — | | — |
| Robert C. Pew III (3) | 297,854 | | * | 4,817,854 | | 19.5 | % |
| Cathy D. Ross | 3,611 | | * | — | | — |
| Catherine C. B. Schmelter | — | | — | — | | — |
| Eddy F. Schmitt | 89,021 | | * | — | | — |
| Allan W. Smith, Jr. | 48,629 | | * | — | | — |
| David C. Sylvester | 453,783 | | * | — | | — |
| Peter M. Wege II | 231,279 | | * | — | | — |
| Linda K. Williams | 17,260 | | * | — | | — |
| Kate Pew Wolters (4) | 227,419 | | * | 5,731,354 | | 23.3 | % |
Directors and current executive officers
as a group (17 persons) (5) | 1,764,070 | | 2.0 | % | 12,628,339 | | 51.2 | % |
|
| | | | | | | | |
| Name | Class A Common Stock (1) | Class B Common Stock |
| Shares Beneficially Owned | Percent of Class | Shares Beneficially Owned | Percent of Class |
| | | | | |
| Sara E. Armbruster | 85,714 |
| * |
| — |
| — |
|
| Lawrence J. Blanford | — |
| — |
| — |
| — |
|
| William P. Crawford (2) | 358,154 |
| * |
| 2,172,245 |
| 6.9 | % |
| Connie K. Duckworth | 35,287 |
| * |
| — |
| — |
|
| R. David Hoover | 38,891 |
| * |
| — |
| — |
|
| David W. Joos (3) | 11,400 |
| * |
| — |
| — |
|
| James P. Keane (4) | 439,823 |
| * |
| — |
| — |
|
| Lizbeth S. O'Shaughnessy | 153,872 |
| * |
| — |
| — |
|
| Robert C. Pew III (5) | 132,750 |
| * |
| 5,635,458 |
| 17.9 | % |
| Cathy D. Ross | 3,611 |
| * |
| — |
| — |
|
| Eddy F. Schmitt | 4,739 |
| * |
| — |
| — |
|
| David C. Sylvester | 277,550 |
| * |
| — |
| — |
|
| Peter M. Wege II | 310,908 |
| * |
| — |
| — |
|
| P. Craig Welch, Jr. (6) | 84,587 |
| * |
| 6,281,121 |
| 19.9 | % |
| Kate Pew Wolters (7) | 55,979 |
| * |
| 6,031,354 |
| 19.1 | % |
Directors and executive officers as a group (23 persons) (8) | 2,138,310 |
| 2.4 | % | 20,120,178 |
| 63.8 | % |
_____________
* Less than 1%
| |
(1) | If the number of shares each director or executive officer could acquire upon conversion of his or her Class B Common Stock were included as shares of Class A Common Stock beneficially owned, the following directors and executive officers would be deemed to beneficially own the number of shares of Class A Common Stock and the percentage of the total shares of Class A Common Stock listed opposite their names: |
(1)If the number of shares each director or executive officer could acquire upon conversion of their Class B Common Stock were included as shares of Class A Common Stock beneficially owned, the following directors and executive officers would be deemed to beneficially own the number of shares of Class A Common Stock and the percentage of the total shares of Class A Common Stock listed opposite their names:
| | | | | | | | |
| Name | Number of Shares | Percent of Class A |
| | |
| Jennifer C. Niemann | 2,103,347 | | 2.3 | % |
| Robert C. Pew III | 5,115,708 | | 5.5 | % |
| Kate Pew Wolters | 5,958,773 | | 6.4 | % |
| Directors and current executive officers as a group (17 persons) | 14,392,409 | | 14.3 | % |
|
| | | | |
| Name | Number of Shares | Percent of Class A |
| | | |
| William P. Crawford | 2,530,399 |
| 2.8 | % |
| Robert C. Pew III | 5,768,208 |
| 6.2 | % |
| P. Craig Welch, Jr. | 6,365,708 |
| 6.8 | % |
| Kate Pew Wolters | 6,087,333 |
| 6.5 | % |
| Directors and executive officers as a group (23 persons) | 22,258,488 |
| 20.7 | % |
* Less than 1%
(2)Includes 100 shares of Class A Common Stock and 101,143 shares of Class B Common Stock of which Ms. Niemann shares the power to vote and dispose.
(3)Includes (a) 500 shares of Class A Common Stock of which Mr. Pew shares the power to vote and dispose and (b) 3,073,618 shares of Class B Common Stock of which Mr. Pew shares the power to dispose.
(4)Includes 2,931,428 shares of Class B Common Stock of which Ms. Wolters shares the power to dispose.
(5)Includes all eleven directors (one of whom is an executive officer) and all six other current executive officers, only four of whom are named in the table. The numbers shown include the shares described in notes 2 through 4 above.
| |
(2) | Includes (a) 357,744 shares of Class A Common Stock and 51,957 shares of Class B Common Stock of which Mr. Crawford shares the power to vote and dispose and (b) 186,964 shares of Class B Common Stock of which Mr. Crawford shares the power to dispose. Of the shares reported, 306,154 shares of Class A Common Stock and 421,611 shares of Class B Common Stock are pledged as security. |
| |
(3) | Includes 11,400 shares of Class A Common Stock of which Mr. Joos shares the power to vote and dispose. |
| |
(4) | Includes 118,027 shares of Class A Common Stock of which Mr. Keane shares the power to vote and dispose. |
| |
(5) | Includes (a) 500 shares of Class A Common Stock of which Mr. Pew III shares the power to vote and dispose and (b) 3,073,618 shares of Class B Common Stock of which Mr. Pew III shares the power to dispose. Of the shares reported, 50,000 shares of Class A Common Stock and 1,041,904 shares of Class B Common Stock are pledged as security. |
| |
(6) | Includes (a) 3,550,501 shares of Class B Common Stock of which Mr. Welch, Jr. shares the power to dispose and (b) 1,422 shares of Class A Common Stock and 2,046,220 shares of Class B Common Stock of which Mr. Welch, Jr. shares the power to vote and dispose. |
| |
(7) | Includes 2,931,428 shares of Class B Common Stock of which Ms. Wolters shares the power to dispose. |
| |
(8) | Includes all eleven current directors (one of whom is an executive officer) and all twelve other current executive officers, only four of whom are named in the table. The numbers shown include the shares described in notes (2) through (7) above and a total of 570 shares of Class A Common Stock of which two of the other executive officers share the power to vote and dispose. |
Beneficial Owners of More than Five Percent of Our Common Stock
ThisThe following table shows the amount of common stock beneficially owned as of May 16, 20162022 by each person, other than our directors and executive officers, who is known by us to beneficially own more than 5% of our Class A Common Stock or more than 5% of our Class B Common Stock. The information set forth in this table is based on the most recent Schedule 13D or 13G filing made by such persons with the SEC, except where we know of any changes in their beneficial ownership after the date of such filings.as otherwise noted.
The percentages listed in the Percent of Class column for Class B Common Stock set forth in the tables on the previous and following page add up to more than 100% because (1) as described in the notes to the table,tables, some of the persons listed in the tabletables share the power to vote and dispose of shares of Class B Common Stock with one or more of the other persons listed in the table and (2) for many persons listed in the table,tables, the number of Shares Beneficially Owned is based on filings by such persons with the SEC as of December 31, 20152021 or earlier but the Percent of Class is calculated based on the total number of shares of Class B Common Stock outstanding on May 16, 2016.
2022.
| | | | | | | | | | | | | | |
| Name | Class A Common Stock (1) | Class B Common Stock |
| Shares Beneficially Owned | Percent of Class | Shares Beneficially Owned | Percent of Class |
| | | | |
Fifth Third Bancorp, Fifth Third Financial Corporation and Fifth Third Bank, National Association (2) | 1,570,598 | | 1.8 | % | 12,478,102 | | 50.6 | % |
| EARNEST Partners, LLC (3) | 7,767,670 | | 8.8 | % | — | | — |
| The Vanguard Group (4) | 7,699,404 | | 8.7 | % | — | | — |
| BlackRock, Inc. (5) | 7,654,969 | | 8.7 | % | — | | — |
| Pzena Investment Management, LLC (6) | 7,010,227 | | 8.0 | % | — | | — |
| P. Craig Welch, Jr. (7) | 1,229,901 | | 1.4 | % | 4,430,192 | | 18.0 | % |
| LSV Asset Management (8) | 4,806,409 | | 5.5 | % | — | | — |
| Anne Hunting (9) | 242,487 | | * | 4,351,970 | | 17.7 | % |
ABJ Investments, Limited Partnership
and Olive Shores Del, Inc. (10) | 1,258,491 | | 1.4 | % | 3,000,000 | | 12.2 | % |
| James T. Osborne (11) | — | | — | 1,574,468 | | 6.4 | % |
| CRASTECOM B Limited Partnership (12) | — | | — | 1,459,753 | | 5.9 | % |
|
| | | | | | | | |
| Name | Class A Common Stock (1) | Class B Common Stock |
| Shares Beneficially Owned | Percent of Class | Shares Beneficially Owned | Percent of Class |
| | | | | |
| Fifth Third Bancorp (2) | 2,529,564 |
| 2.9 | % | 17,089,209 |
| 54.2 | % |
| WEDGE Capital Management L.L.P. (3) | 4,839,974 |
| 5.5 | % | — |
| — |
|
| The Vanguard Group, Inc. (4) | 5,797,364 |
| 6.6 | % | — |
| — |
|
| LSV Asset Management (5) | 4,806,409 |
| 5.5 | % | — |
| — |
|
| Anne Hunting (6) | 242,487 |
| * |
| 4,351,970 |
| 13.8 | % |
ABJ Investments, Limited Partnership and Olive Shores Del, Inc. (7) | 1,258,491 |
| 1.4 | % | 3,000,000 |
| 9.5 | % |
_____________
* Less than 1%
(1)If the number of shares each shareholder could acquire upon conversion of their Class B Common Stock were included as shares of Class A Common Stock beneficially owned, the following holders of Class B Common Stock would be deemed to beneficially own the number of shares of Class A Common Stock and the percentage of the total shares of Class A Common Stock listed opposite their names: | | | Name | Number of Shares | Percent of Class A | Name | Number of Shares | Percent of Class A |
| | | |
| Fifth Third Bancorp | 19,618,773 |
| 18.7 | % | |
Fifth Third Bancorp, Fifth Third Financial Corporation and Fifth Third Bank, National Association | | Fifth Third Bancorp, Fifth Third Financial Corporation and Fifth Third Bank, National Association | 14,048,700 | | 14.0 | % |
| P. Craig Welch, Jr. | | P. Craig Welch, Jr. | 5,660,093 | | 6.1 | % |
| Anne Hunting | 4,594,457 |
| 5.0 | % | Anne Hunting | 4,594,457 | | 5.0 | % |
| ABJ Investments, Limited Partnership and Olive Shores Del, Inc. | 4,258,491 |
| 4.7 | % | ABJ Investments, Limited Partnership and Olive Shores Del, Inc. | 4,258,491 | | 4.7 | % |
| James T. Osborne | | James T. Osborne | 1,574,468 | | 1.8 | % |
| CRASTECOM B Limited Partnership | | CRASTECOM B Limited Partnership | 1,459,753 | | 1.6 | % |
| |
(2) | The address of Fifth Third Bancorp is Fifth Third Center, Cincinnati, OH 45263. Includes (a) 294,709 shares of Class A Common Stock and 4,711,069 shares of Class B Common Stock of which Fifth Third Bancorp shares the power to vote and (b) 2,325,710 shares of Class A Common Stock and 13,770,837 shares of Class B Common Stock of which Fifth Third Bancorp shares the power to dispose. |
(2)The address of Fifth Third Bancorp, Fifth Third Financial Corporation and Fifth Third Bank, National Association (which we refer to collectively as Fifth Third) is Fifth Third Center, 38 Fountain Square Plaza, Cincinnati, OH 45263. Includes (a) 370,997 shares of Class A Common Stock and 990,447 shares of Class B Common Stock which Fifth Third has the sole power to vote, (b) 257,500 shares of Class A Common Stock and 1,026,442 shares of Class B Common Stock which Fifth Third shares the power to vote and (c) 1,449,601 shares of Class A Common Stock and 11,676,919 shares of Class B Common Stock of which Fifth Third shares the power to dispose.
We believe there is substantial duplication between the shares which Fifth Third Bancorp beneficially owns and the shares which are beneficially owned by some of the other persons listed in this table and the previous table, because, among other reasons, Fifth Third Bancorp or its affiliates serves as a co-trustee of a number of trusts of which our directors and other beneficial owners of more than 5% of our common stock serve as co-trustees; however, we are not able to determine the extent of such duplication based on the information reported by Fifth Third Bancorp.Third.
| |
(3) | The address of WEDGE Capital Management L.L.P. is 301 S. College Street, Suite 2920, Charlotte, NC 28202-6002. WEDGE Capital Management L.L.P. has the sole power to vote only 4,126,574 shares of Class A Common Stock. |
| |
(4) | The address of The Vanguard Group, Inc. is 100 Vanguard Blvd., Malvern, PA 19355. The Vanguard Group, Inc. has the sole power to vote only 187,204 shares of Class A Common Stock, the shared power to vote 5,700 shares of Class A Common Stock and the shared power to dispose of 187,304 shares of Class A Common Stock. |
| |
(5) | The address of LSV Asset Management is 1 N. Wacker Drive, Suite 4000, Chicago, IL 60606. |
| |
(6) | The address of Ms. Hunting is 1421 Lake Road, Lake Forest, IL 60045. Includes 4,476,971 shares of which Ms. Hunting shares the power to vote and dispose. The information reported for Ms. Hunting is based upon a Schedule 13G amendment dated December 31, 2001 and a subsequent conversion of Class B Common Stock into Class A Common Stock. No further shareholding information has been reported by Ms. Hunting after December 31, 2001. |
(3)The address of EARNEST Partners, LLC is 1180 Peachtree Street NE, Suite 2300, Atlanta, GA 30309. EARNEST Partners has the sole power to vote only 5,268,549 shares of Class A Common Stock.
| |
(7) | (4)The address of The Vanguard Group is 100 Vanguard Blvd., Malvern, PA 19355. The Vanguard Group has the sole power to vote no shares of Class A Common Stock, the shared power to vote 72,230 shares of Class A Common Stock and the shared power to dispose of 155,419 shares of Class A Common Stock. (5)The address of BlackRock, Inc. is 55 East 52nd St., New York, NY 10055. BlackRock has the sole power to vote only 7,130,193 shares of Class A Common Stock. (6)The address of Pzena Investment Management, LLC is 320 Park Avenue, 8th Floor, New York, NY 10022. Pzena Investment Management has the sole power to vote only 5,532,964 shares of Class A Common Stock. (7)The address of Mr. Welch is 901 44th Street SE, Grand Rapids, MI 49508. Includes (a) 2,244,592 shares which Mr. Welch shares the power to vote and (b) 5,660,093 shares of which Mr. Welch shares the power to dispose. (8)The address of LSV Asset Management is 1 N. Wacker Drive, Suite 4000, Chicago, IL 60606. (9)The address of Ms. Hunting is 1421 Lake Road, Lake Forest, IL 60045. Includes 4,476,971 shares of which Ms. Hunting shares the power to vote and dispose. The information reported for Ms. Hunting is based upon a Schedule 13G amendment dated December 31, 2001 and a subsequent conversion of Class B Common Stock into Class A Common Stock. No further shareholding information has been reported by Ms. Hunting after December 31, 2001. (10)The address of ABJ Investments, Limited Partnership and Olive Shores Del, Inc. is P.O. Box 295, Cimarron, CO 81220. Olive Shores Del is the sole general partner of ABJ Investments. The information reported for ABJ Investments Limited Partnership, or ABJ, and Olive Shores Del Inc., or Olive Shores, is P.O. Box 295, Cimarron, CO 81220. Olive Shores is the sole general partner of ABJ. The information reported for ABJ and Olive Shores is based upon a Schedule 13G amendment dated December 31, 2007 in which those entities reported that they had ceased to be the beneficial owner of more than 5% of our Class A Common Stock and thus were no longer subject to reporting on Schedule 13G. No further shareholding information has been reported by ABJ or Olive Shores after December 31, 2007. |
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires our directors, executive officers and those who beneficially own more than 10% of our Class A Common Stock and thus were no longer subject to file reportsreporting on Schedule 13G. No further shareholding information has been reported by ABJ Investments or Olive Shores Del after December 31, 2007.
(11)The address of initial ownershipJames T. Osborne is 881 Private Rd., Winnetka, IL 60093. Mr. Osborne has the sole power to vote and changes in their beneficial ownershipdispose of 82,926 shares of Class AB Common Stock withand the SEC. Based on our reviewshared power to vote and dispose of the reports filed with the SEC, and written representations that no Form 5 reports were required, we believe that165,900 shares of Class B Common Stock. The information provided for transactions during fiscal year 2016, all Section 16(a) reports were filed onMr. Osborne is based upon a timely basis.Schedule 13G dated December 31, 1998. No further shareholding information has been reported by Mr. Osborne after such date.
(12)The address of CRASTECOM B Limited Partnership is 1134 Taylorsport Ln., Winnetka, IL 60093.
24
PROPOSAL 2 – ADVISORY VOTE
TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION
The Dodd-Frank Wall Street Reform and Consumer Protection Act and Section 14A of the Exchange Act require that we allow our shareholders the opportunity to vote to approve the compensation of our named executive officers as set forth in this proxy statement. ThisAt our 2017 annual meeting, our shareholders approved our proposal to have an annual vote is advisory, which meansto approve the compensation of our named executive officers. Taking into account the results of that vote, the Board of Directors determined that it is not binding onin the best interests of our company orand our Boardshareholders to hold an annual vote to approve named executive officer compensation until the next advisory vote on the frequency of Directors.such a vote. The affirmativenext vote of a majority of the votes castto approve named executive officer compensation will be held at the Meeting for this proposal is required to approve this Proposal 2.2023 annual meeting.
The compensation of our named executive officers is set forth in the Executive Compensation, Retirement Programs and Other Arrangementssection.. The Compensation Discussion and Analysis, or or CD&A, section describes our executive compensation policies and practices and analyzes the compensation received by our named executive officers in fiscal year 2016.2022. As described in the CD&A, our executive compensation philosophy is to reward performance and motivate collective achievement of strategic objectives that will contribute to our company’s success. Our Board of Directors believes the compensation programs for our named executive officers effectively meet the primary objectives of attracting and retaining highly qualified executives, motivating our executives to achieve our business objectives, rewarding our executives appropriately for their individual and collective contributions and aligning our executives’ interests with the long-term interests of our shareholders, and our Board believes our programs are reasonable when compared to compensation at similar companies.
At our 2011 annual meeting, a majority of the votes cast by our shareholders were cast in favor of one year as the frequency of a shareholder advisory vote on compensation of our named executive officers. Taking into account the results of such vote, the Board of Directors determined that it is in the best interests of the Company and our shareholders to hold an annual advisory vote to approve named executive officer compensation until the next advisory vote on the frequency of such a vote. Thus, the next advisory vote to approve named executive officer compensation will be held at the 2017 annual meeting.
The vote on this resolutionproposal is not intended to address any specific element of executive compensation. Instead, the vote relates to the executive compensation of our named executive officers, as set forth in this proxy statement pursuant to the rules of the SEC. This vote is advisory and not binding on our company or our Board of Directors, but in the event of any significant vote against this proposal, the Compensation Committee will consider whether any actions are appropriate to respond to shareholder concerns.
Accordingly, our Board of Directors asks our shareholders to vote on the following resolution at the Meeting:
RESOLVED, that the compensation paid toof the Company’s named executive officers, as disclosed in the Company’s Proxy Statement for the 20162022 Annual Meeting of Shareholders pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby approved.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS AS DISCLOSED IN THIS PROXY STATEMENT.
25
COMPENSATION COMMITTEE REPORT
We reviewed and discussed with management the Compensation Discussion and Analysis which follows this report. Based on such review and discussions, we recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement for filing with the Securities and Exchange Commission and distribution to the Company’s shareholders.
Compensation Committee
R. David HooverCathy D. Ross (Chair)
Connie K. Duckworth
David W. Joos
P. Craig Welch, Jr.Catherine C. B. Schmelter
Kate Pew Wolters
COMPENSATION DISCUSSION AND ANALYSIS
This section discusses our policies and practices relating to executive compensation and presents a review and analysis of the compensation earned in fiscal year 2016 by our CEO, our Chief Financial Officerawarded to and our three other most highly paid executive officers. We refer to these five individuals as the “named executive officers.” The amounts of compensation earned by these executives in fiscal year 2016 are detailedthe executive officers named in the Summary Compensation Table on page 46 in Executive Compensation, Retirement Programs and Other Arrangementsin fiscal year 2022. We refer to these individuals as the “named executive officers.” The compensation of each of the named executive officers in fiscal year 2022 is detailed in the Summary Compensation Table and the other tables which follow it.it starting on page 46.
Executive Summary
We have designed the compensation programs for our named executive officers to provide competitive pay opportunities while aligning the incentive compensation realized by our named executive officersthey earn with the interests of our shareholders by linking payincentive compensation with company and stock performance. The primary elements of our executive compensation programs are base salaries, short-term and long-term incentive compensation (both cash and equity-based)awards, and retirement programsplans and benefits.
Incentive Awards Made in Fiscal Year 2022
In fiscal year 2016,2022, we awarded fourthree types of incentive compensation opportunities to our named executive officers:
•cash awards under our Management Incentive Plan, or MIP awards, earned based on our (1) return on invested capital, or ROIC, (2) net income and (3) diversity, equity and inclusion, or DEI, performance for fiscal year 2016,2022;
•performance units which willto be earned over fiscal year 2022 through fiscal year 2024 with a three-year average payout multiple based on performance achievement in each of three consecutive one-year performance periods, modified based on our average ROIC for fiscal years 2016 through 2018,
performance units which will be earned based on ourthree-year total shareholder return, or TSR, performance relative to companies in the S&P 400 Midcap Index for fiscal years 2016 through 2018a comparator group; and
•restricted units which willthat vest at the end of fiscal year 2018.2024.
Fiscal Year 2022 Financial Results
In fiscal year 2022, we reported revenue of $2.8 billion, which represented a 7% increase compared to the prior year, driven by improved demand for our products as customers restarted paused projects and made investments in support of their workplace strategies. Despite the improved demand, we recorded operating income of $20.1 million and an operating income margin of 0.7% in fiscal year 2022, compared to $43.0 million and 1.7% in fiscal year 2021. The decrease was driven by (1) significant inflation, net of pricing benefits, (2) higher freight and labor costs and inefficiencies due to broad-based supply chain disruptions and (3) higher operating expenses, partially offset by the benefits of the higher revenue and the impact of restructuring costs and a goodwill impairment charge recorded in fiscal year 2021. We posted net income of $4.0 million and diluted earnings per share of $0.03 in fiscal year 2022, compared to $26.1 million and $0.22 in fiscal year 2021.
Incentive Compensation Earned in Fiscal Year 2022
In fiscal year 2022, the incentive compensation realizedearned by our named executive officers other than Eddy F. Schmitt, forconsisted of the fiscal year 2016 consisted of:
the2022 MIP awards, earned based on fiscal year 2016 ROIC performance,
performance units granted in fiscal year 20142020 and earned based on our average ROIC for fiscal years 2014 through 2016,
over a three-year performance units granted in fiscal year 2014period and earned based on our TSR performance, relative to the industrial subset of companies within the S&P MidCap 400 Index, for fiscal years 2014 through 2016 and
restricted units granted in fiscal year 20142020 which vested at the end of fiscal year 2016.2022.
The incentive compensation realizedMIP awards were earned as follows:
Fiscal Year 2022 MIP Awards Earned
| | | | | |
| Performance Measure | Earned
(% of Target) |
| |
| ROIC | 10% |
| Net Income | 0% |
| DEI | 100% |
| Overall* | 16% to 23% |
_____________
* Varies by Eddy F. Schmitt for fiscal year 2016 consistedofficer due to differences in weighting of a MIP award and restricted units consistent with the other named executive officers, plus (1) a cash-based award granted in fiscal year 2014 and earned based onmeasures.
The following charts show our average ROICactual performance for fiscal years 2014 through 2016 and (2) the final payment from his long-term MIP award earned in fiscal year 2013. The incentive compensation awards granted to Mr. Schmitt in fiscal years 2013 and 2014 differs from those grantedcompared to the other named executive officers because he was a participant in our long-term incentive programtargets for management employees at the time of grants.
In fiscal year 2016, we recorded $3.1 billion of revenue and $170.3 million of net income or diluted earnings per share of $1.36. This represented year-over-year revenue growth of less than 1% and an increase of 98% in net income. The year-over-year comparison of net income was positively impacted by the reversal of a valuation allowance recorded against net deferred tax assets in France and a gain from the partial sale of an investment in an unconsolidated affiliate. These significant items, net of the associated variable compensation expense and income tax expense, had a combined favorable impact on net income of approximately $53 million and on diluted earnings per share of approximately $0.42. The net income comparison was also positively impacted by restructuring charges which were $20.7 million lower in fiscal year 2016 compared to fiscal year 2015. Restructuring charges and the impact of the tax valuation allowance reversal are being spread equally over periods ranging from two to three years when calculating ROICfinancial performance under our compensation programs,measures applicable to the extent approved by the Compensation Committee. Our fiscal year 2016 results reflected strong operating performance in the Americas and the Other category, partially offset by higher costs in EMEA associated with manufacturing footprint changes and other operational challenges.
AsMIP awards, each as calculated under our MIP and adjusted by the Compensation Committee as described on pages 35-36 under the heading “Incentive Compensation Awards - Fiscal Year 2022 MIP Awards.” DEI performance was based on the Committee’s assessment that management met expectations for the stated DEI objective.
The performance units were earned over fiscal year 2020 through fiscal year 2022 with a three-year average payout multiple based on performance achievement in each of three consecutive one-year performance periods, modified based on our ROICthree-year TSR performance relative to the companies in the S&P MidCap 400 Index. These units were earned at 70% of target, as set forth in the following table. The charts below show our actual performance compared to the targets for the performance measures used for fiscal year 2016 was 15.83%, which was above our2020 and fiscal year 2016 MIP target of 11%. As a result,2022, each as adjusted by the MIP awards for our named executive officers were earned at 148% of target. As calculatedCompensation Committee as described on page 42 under our Incentivethe heading “Incentive Compensation Plan, our average ROIC forAwards - Fiscal Year 2020 Performance Units and Restricted Units Earned in Fiscal Year 2022." For fiscal years 2014 through 2016 was 13.49% which was above our target of 11%. As a result,year 2021, the performance units grantedachievement was based on the Committee’s assessment of management’s performance in a number of specific areas, which we refer to our named executive officers, other than Eddy F. Schmitt,as the “FY21 Performance Measures.” The FY21 Performance Measures included performance in the areas of (1) cash flow and the cash-based award granted to Mr. Schmitt in fiscal year 2014 were earned at 150% of target.
Our TSR expressed as a compound annual rate for fiscal years 2014 through 2016 was 0.2%, which ranked at the 43rd percentileworking capital, (2) management of the TSR peer group. As a result, the performance units granted to our named executive officers, other than Eddy F. Schmitt, in fiscal year 2014 were earned at 82.5%COVID-19 crisis, (3) product launch, (4) customer satisfaction, (5) employee satisfaction and human resources management and (6) implementation of target.certain critical projects and processes and strategic business criteria.
Fiscal Year 2020 Performance Units Earned
| | | | | |
| Performance Measures | Earned
(% of Target) |
| |
| Fiscal Year 2020 | 140% |
| Fiscal Year 2021 | 100% |
| Fiscal Year 2022 | 22% |
| 3-Year Average | 87% |
| Relative TSR Modifier | x 80% |
| Total Earned (% of Target) | 70% |
CEO Transition
Our say-on-pay advisory voteIn October 2021, Sara Armbruster succeeded James Keane as our President and CEO. In connection with this transition:
•In April 2021, Ms. Armbruster was approved at our 2015 annual shareholders’ meeting,promoted to Executive Vice President and her base salary and MIP award target were increased. Upon her promotion to President and CEO in October 2021, her base salary was further increased. Ms. Armbruster also received a special restricted unit award in connection with 99.2%each promotion.
•We entered into a Retention Award Agreement with David Sylvester, under which Mr. Sylvester is eligible to receive a cash retention payment in April 2023. The award was provided to support retention of a key leader during the CEO transition.
•As part of the votes casttransition in favor.leadership, Allan Smith was promoted to Senior Vice President, Chief Revenue Officer in October 2021. In connection with his promotion, his base salary and MIP award target were increased, and he received a special restricted unit award.
•Eddy Schmitt received a special restricted unit award. The award was provided for engagement of a key leader during the CEO transition.
•We entered into a Voluntary Mutual Separation Agreement with James Ludwig, under which Mr. Ludwig’s employment with us ended in December 2021. Under that agreement, Mr. Ludwig is eligible to receive a severance payment and payment of certain health insurance premiums.
•Mr. Keane served as Vice Chair from October 2021 until his retirement in January 2022. His compensation was not changed during this time.
Compensation Philosophy and Objectives
Our philosophy for the compensation of all of our employees, including the named executive officers, is to value the contribution of our employees, motivate achievement of strategic objectives that will contribute to our company’s success and share profits through broad-based incentive arrangements designed to reward performance and motivate collective achievement of strategic objectives that will contribute to our company’s success.performance.
The primary objectives of the compensation programs for our named executive officers are to:
•attract and retain highly qualified executives,executives;
•motivate our executives to achieve our business objectives,objectives;
•reward our executives appropriately for their individual and collective contributions,contributions;
•align our executives’ interests with the long-term interests of our shareholders,shareholders;
•ensure that executive compensation opportunities are reasonable when compared to compensation at similar companiescompanies; and
•achieve internal pay equity.
Compensation Consultant
The Compensation Committee has engaged Exequity LLP to serve as an independent compensation consultant reporting directly to the Committee. Exequity is responsible for providing information, insight and perspective for the Committee’s consideration in making decisions on all elements of executive compensation. Specifically, Exequity supports the Committee by: (1) reviewing various elements of executive compensation including base salary, incentive plan targets and awards, (2) providing input on proxy disclosures, (3) attending Committee meetings, (4) providing perspective on current trends and developments in executive compensation and (5) completing additional projects, studies and analyses as
requested by the Committee. Exequity also works cooperatively with management on behalf of the Compensation Committee. Exequity does not provide any services to our company other than executive compensation consulting to the Committee.
Annual Review
Our executive compensation programs fall within three general categories: (1) base salaries, (2) short-term and long-term incentive compensation awards and (3) retirement programsplans and benefits. The Compensation Committee reviews and approves the base salary and incentive compensation awards for each of our executive officers each year, taking into account the recommendations of our CEO (except as to himself)the CEO’s own compensation), the individual performance of each executive officer and our compensation philosophy and objectives described above.on page 30. Following approval by the Compensation Committee, the compensation of our CEO is submitted to our
Board of Directors for ratification. The amount of incentive compensation actually earned by each officer depends on the performance of our company as a whole against the targets established for the particular award. None of the named executive officers has an employment agreement with us.
In order to evaluate the reasonableness and competitiveness of our compensation programs and practices for fiscal year 2016,2022, the Compensation Committee used pay data from Willis Towers Watson'sWatson’s general industry executive survey, excluding financial services, not-for-profit and energy companies, to reflect a sizable peerlarge comparator group of companies. Due to the differences in revenue among the companies in the survey, regression analysis was used to adjust the data to reflect our size in fiscal year 2020 (our most recent full fiscal year prior to the date of the analysis) based on annual revenues of approximately $3.0$3.7 billion. The survey presents information regarding base salaries, annual bonus targets, annualized expected values of long-term incentive compensation and target total direct compensation. The Compensation Committee does not specifically target each element of compensation of the named executive officers against the comparison group. Instead, the Compensation Committee reviews the comparison data to assess whether or not each of these components of compensation and the total compensation of each of the named executive officers is within a competitive range, and inrange. In making its assessment, the Committee considersconsiders: (a) any difference between the role and responsibilities of each officer compared to the benchmark position in the survey results, (b) the specific contributions the officer has made to the successful achievement of our company goals, (c) the relative experience level of the officer and his or hertheir tenure with our company and (d) the performance of the Company,our company, including stock price performance.
Our say-on-pay shareholder advisory vote received 99.2%98.4% approval at our 20152021 annual shareholdersshareholders’ meeting. No changes were made to our executive compensation policies and practices in fiscal year 20162022 in response to our 20152021 say-on-pay shareholder advisory vote.
Base Salary
The base salary of each of our named executive officers is reviewed and approved annually by the Compensation Committee as part of its overall review of executive compensation, and our Board of Directors ratifies any changes to our CEO’s base salary.compensation. As a general rule, base salaries for the named executive officers are set at levels which will allow us to attract and retain highly qualified executives. In addition to the annual reviews, the base salary of a particular executive may be adjusted during the course of a fiscal year in connection with a promotion or other material change in the executive’s role or responsibilities.
During fiscal year 2022, the base salaries of the named executive officers were increased as follows:
•2016In April 2021, Sara Armbruster’s base salary was increased from $466,600 to $650,000 in connection with her promotion to Executive Vice President. When she became President and CEO in October 2021, her base salary was increased to $825,000.
•,In May 2021, each of the named executive officers except James P. Keane,other than Sara Armbruster received a meritan annual increase to his or her base salary that was within a historically normal range. James P. Keane’s
•In October 2021, Allan Smith’s base salary was increased by 12.5%, from $800,000$425,000 to $900,000 due$500,000 in connection with his promotion to his performance in his first year as CEO.Senior Vice President, Chief Revenue Officer.
Incentive Compensation
Awards
In fiscal year
2016, we awarded four types of incentive
Incentive compensation opportunities toawards for our named executive officers: (1) cash awards under our MIP which were earned based on our ROIC results for the fiscal year, (2) performance units which will be earned based on our average ROIC over three fiscal years, (3) performance units which will be earned based on our TSR performance relative to a peer group over three fiscal years and (4) restricted units which will vest at the end of three fiscal years. The performance units and restricted units will be settled in shares of Class A Common Stock at the end of the applicable performance period or vesting. These four types of awards in combination with other equity-based awards granted in prior fiscal years create overlapping award cycles that are designed to encourage retention, provide a mix of cash and equity-based incentives and balance short-term and long-term performance.
As an illustration, the following chart shows the mix of compensation for fiscal year 2016 for our CEO compared to the average of the four other named executive officers valuing the MIP awards at the target level of performance and the restricted unit and performance unit awards at the grant date market price per share of our Class A Common Stock (valuing the performance units at the target level of performance). The chart also notes the portion of the target total compensation denominated in the form of cash or equity and the portion based on ROIC or TSR performance. The mix of compensation for the CEO was more heavily weighted to performance and equity, particularly performance unit awards, although performance-based equity was also a significant component for the other named executive officers.
Short-Term Cash Incentive Awards
Philosophy and Practice
As described above, in fiscal year 2016, each of our named executive officers received a cash award under our MIP which may be earned based on the achievement of certain ROIC results. ROIC equals our net operating profit after tax, or NOPAT, divided by average invested capital. NOPAT is calculated by taking net income and adding back after-tax interest expense, and adjusting for after-tax interest income related to average liquidity (cash, short-term investments and the cash surrender value of company-owned life insurance policies) in excess of $200 million. Average invested capital is calculated by adding average shareholders' equity and average long-term debt, adjusted for average liquidityin excess of $200 million and the impact of other adjustments to the extent approved by the Compensation Committee. Restructuring charges, goodwill impairment charges or other items to the extent approved by the Compensation Committee may be amortized over a period of two to five years in the calculation of NOPAT and average invested capital. No awards can be earned to the extent they would result in our company recording a net loss for the fiscal year unless the Committee determines otherwise.
In addition to the named executive officers, other management employees received annual awards under the MIP for fiscal year 2016, and the majority of our other employees also received annual incentive compensation based on our ROIC results for fiscal year 2016.
Fiscal Year 2016 Awards
The ROIC performance required to earn the minimum, target and maximum level of the fiscal year 2016 MIP awards are set forth in the following chart. In setting the ROIC target for fiscal year 2016, the Compensation Committee considered our compensation philosophy and objectives, our estimated cost of capital, our annual financial plan, industry conditions, the overall economic environment and the desire to motivate our employees to achieve our business objectives. Target performance was set at ROIC of 11.0%, an increase of one percentage point compared to the target set for MIP awards granted in fiscal year 2015, based on the philosophy of driving continuous improvement and increasing the target during periods of expected stronger financial performance.
The levels of ROIC performance that will result in an award of the threshold, target or maximum amount are as shown in the following table, with interpolation used in the event that the actual results do not fall directly on one of the performance levels.
|
| | | | |
Performance Level | ROIC Performance | Amount Earned |
| | | | |
Threshold | 1.0% | | 0% of target | |
Target | 11.0% | | 100% of target | |
Maximum | 21.0% | | 200% of target | |
MIP target awards for the named executive officers are reviewed and approved each year by the Compensation Committee and, in the case of our CEO, ratified by the Board. The named executive officers’ target MIP awards for fiscal year 2016 were as follows:
|
| |
Name | Target Award |
| |
James P. Keane | 100% of base salary |
David C. Sylvester | 80% of base salary |
Lizbeth S. O'Shaughnessy | 60% of base salary |
Sara E. Armbruster | 60% of base salary |
Eddy F. Schmitt | 50% of base salary |
In determining the size of target MIP awards to be granted, our CEO presented to the Compensation Committee his recommendations for the size of award for each named executive officer other than himself, taking into consideration the factors described above under the heading “Annual Review.” The Committee reviewed the value of the target awards as a percentage of the officer’s base salary relative to the 25th percentile, median and 75th percentile levels of annual incentive compensation shown in the market comparison study and relative to each officer.
Awards Earned andLink to Company Performance
Our actual ROIC performance for fiscal year 2016 was 15.83%, resulting in the MIP awards being earned at 148% of target. The following chart depicts the performance scale for these awards and our actual fiscal year 2016 ROIC performance and MIP payout level.
Long-Term Equity Incentive Awards
Philosophy and Practice
Each of our named executive officers typically receives long-term equity incentive awards under our Incentive Compensation Plan each year, in accordance with our compensation philosophies of linking pay to performance, encouraging retention and aligning the interests of our executives with those of our shareholders. All awards are approved by the Compensation Committee, and in the case of our CEO, ratified by our Board of Directors, typically at a regularly scheduled meetingmeetings at the beginning of each fiscal year, but awards may also be approved at any other regularly scheduled meeting or at a special meeting. We do not have any program or practice to time the grant of equity-based awards relative to the release of any material non-public information.
In fiscal year 2022, we awarded three types of incentive compensation to our named executive officers as part of our regular annual incentive compensation cycle:
•MIP awards earned based on our ROIC, net income and DEI performance for fiscal year 2022, with the potential for adjustment to the ROIC portion by the CEO for individual performance for the named executive officers other than the CEO;
•performance units to be earned over fiscal year 2022 through fiscal year 2024 with a three-year average payout multiple based on performance achievement in each of three consecutive one-year performance periods, modified based on our three-year TSR performance relative to a comparator group; and
•restricted units that vest at the end of fiscal year 2024.
These awards, in combination with similar awards made in prior fiscal years, create overlapping award cycles that are designed to provide a mix of cash and equity-based incentives, balance short-term and long-term performance and encourage retention.
As an illustration, the following chart shows the mix of compensation for fiscal year 2022 for James Keane, who served as CEO until October 2021 and as Vice Chair from October 2021 to January 2022, and Sara Armbruster, who served as Executive Vice President from April to October 2021 and as CEO thereafter, compared to the average of David Sylvester, Allan Smith, Lizbeth O’Shaughnessy and Robert Krestakos, the four other named executive officers who were executive officers at the end of the fiscal year. The MIP awards and performance units are valued at the target level of performance, and the restricted units and performance units are valued using the market price per share of our Class A Common Stock on the date the awards were approved. The chart does not include the special awards described on the following page. The chart also notes the portion of the target total compensation denominated in the form of cash or equity and the portion to be earned based on achievement relative to various performance measures. The mix of compensation for Mr. Keane and Ms. Armbruster was more heavily weighted to performance and equity, although performance-based and equity awards were also significant components for the other officers.
In addition to granting annual equityissuing incentive awards from time to time at the request of our CEO,annually, the Compensation Committee considers granting special awards to our named executive officers in connection with promotions or other changes in responsibilities or in recognition of particular contributions to our company’s performance.
During fiscal year 2022, the Committee approved the following special incentive awards to our named executive officers:
•In April 2021, in connection with her promotion to Executive Vice President, Sara Armbruster received an award of 100,000 restricted units which will vest on the third anniversary of the grant date. In October 2021, in connection with her promotion to President and CEO, Ms. Armbruster received an award of 150,000 restricted units which will vest in equal thirds on the first, second and third anniversary of the grant date.
•In April 2021, we entered into a Retention Award Agreement with David Sylvester, under which he is eligible to receive a cash retention award of $577,900 in April 2023, subject to him remaining in good standing and being employed by us. The award was provided to support retention of a key leader during the CEO transition.
•In April 2021, Eddy Schmitt received an award of 8,500 restricted units which vested one year from the award date. The award was provided for engagement of a key leader during the CEO transition.
•In September 2021, in connection with his promotion to Senior Vice President, Chief Revenue Officer, Allan Smith received an award of 18,500 restricted units which will vest on the third anniversary of the grant date.
Fiscal Year 20162022 MIP Awards
In fiscal year 2016,2022, each of our named executive officers received a MIP award which was earned based on our (1) ROIC, (2) net income, and (3) DEI performance for fiscal year 2022. In addition, the Compensation Committee delegated to our CEO the authority to modify the size of the target award for the portion earned based on our ROIC results for each of the officers other than the CEO. The CEO was permitted to modify the awards by up to 10% of the applicable officer’s base salary, positively or negatively, at the end of the fiscal year based on the CEO’s assessment of the officer’s performance during the year. This award design was intended to (1) balance our broad-based profit-sharing philosophy with accountability for the achievement of our financial plan, (2) incorporate a focus on our commitment to DEI and (3) provide our CEO with an opportunity to further differentiate compensation for
the officers other than the CEO based on their performance. The MIP performance targets and payout levels are summarized in the following table, followed by a discussion of each performance measure.
Fiscal Year 2022 MIP Awards Performance Measures
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Performance Level | ROIC | Net Income | DEI |
| Performance | Amount Earned
(% of target) | Performance
(% of plan) | Amount Earned
(% of target) | Amount Earned
(% of target) |
| | | | | | | | | |
| Threshold | 0.0% | | 0% | | 50% | | 50% | | 0% |
| Target | 8.25% | | 100% | | 87.5% to 112.5% | | 100% | | 100% |
| Maximum | 18.25% | | 200% | | 150% | | 200% | | 125% |
ROIC equals our net operating profit after tax divided by average invested capital. Net operating profit after tax represents our net income plus after-tax interest expense, adjusted to the extent approved by the Compensation Committee. Average invested capital represents our average shareholders’ equity and average long-term debt, as adjusted to the extent approved by the Committee. The Committee selected ROIC as a performance measure for the MIP awards to include a profit-sharing component in our incentive compensation program. The ROIC performance required to earn the threshold, target and maximum level of the ROIC portion of the MIP awards is shown in the table above, with interpolation used if the actual results do not fall directly on one of the performance levels. In setting the target at 8.25%, the Committee used our estimated weighted average cost of capital. As a profit-sharing company, the threshold performance level was set at zero percent, and the maximum performance level was set at ten percentage points above target.
Net income is net income as reported in our fiscal year 2022 financial statements, adjusted to the extent approved by the Compensation Committee. The Committee selected net income as a percentage of plan net income as a performance measure for the MIP awards to support the current year’s strategic goals and motivate our executives to achieve our business objectives. The net income performance required to earn the threshold, target and maximum level of the net income portion of the MIP awards is shown in the table above, with interpolation used if the actual results do not fall directly on one of the performance levels. The target was set based on the target net income in our fiscal year 2022 financial plan of $43.9 million, adjusted to the extent approved by the Committee. The Committee established a range for the target performance level based on market prevalence and to minimize the impact of immaterial items.
DEI performance is a measurement of management’s performance relative to a stated objective of driving progress across our broad set of short-term and long-term initiatives to advance diversity, equity and inclusion globally against our goals of (1) building diverse teams that reflect our communities, (2) ensuring equitable development opportunities and (3) creating a culture of inclusion. The Compensation Committee selected DEI as a performance measure for the MIP awards to emphasize our commitment to DEI on a global basis. The DEI performance scale ranges from a threshold of 0% of target to a maximum of 125% of target with a final multiple in an increment of 25%. DEI performance results are not based on a formula but judged holistically based on the Committee’s assessment of management’s progress toward the DEI objective.
James Keane, who was our CEO when the awards were made, presented to the Compensation Committee his recommendations for the size of the MIP awards for each named executive officer other than Sara Armbruster and himself, taking into consideration the factors described on page 31 under the heading “Annual Review.” In determining the size of the awards to be made to each officer, the Committee took into account Mr. Keane’s recommendations and reviewed the value of the awards as a percentage of the officer’s base salary relative to (1) the 25th percentile, median and 75th percentile
levels of annual incentive compensation shown in the market comparison study and (2) the value of the awards proposed for each other officer.
The size of the named executive officers’ MIP awards for fiscal year 2022 were established as follows, as a percent of the applicable officer’s base salary:
Fiscal Year 2022 MIP Awards Size
| | | | | | | | | | | | | | | | | | | | | | | |
| Name | Portion Based on ROIC * | Portion Based on Net Income | Portion Based on DEI | Total |
| | | | | | | |
| Sara E. Armbruster | | | | | | | |
| 2/27/2021 to 4/14/2021 | 30 | % | | 20 | % | | 10 | % | | 60 | % |
| 4/15/2021 to 2/25/2022 | 30 | % | | 50 | % | | 20 | % | | 100 | % |
| David C. Sylvester | 30 | % | | 40 | % | | 10 | % | | 80 | % |
| Allan W. Smith, Jr. | | | | | | | |
| 2/27/2021 to 10/3/2021 | 30 | % | | 20 | % | | 10 | % | | 60 | % |
| 10/4/2021 to 2/25/2022 | 30 | % | | 40 | % | | 10 | % | | 80 | % |
| Lizbeth S. O’Shaughnessy | 30 | % | | 20 | % | | 10 | % | | 60 | % |
| Robert G. Krestakos | 30 | % | | 15 | % | | 5 | % | | 50 | % |
| James N. Ludwig | 30 | % | | 15 | % | | 5 | % | | 50 | % |
| Eddy F. Schmitt | 30 | % | | 15 | % | | 5 | % | | 50 | % |
| James P. Keane | 30 | % | | 70 | % | | 20 | % | | 120 | % |
_____________
* Subject to modification by our CEO, as described on page 33.
Our actual ROIC performance, as adjusted by the Compensation Committee, for fiscal year 2022 was 0.80%, which resulted in the portion of the awards based on ROIC performance being earned at 10% of target. The Committee approved adjustments to fiscal year 2022 ROIC for the following items:
•a gain from the sale of land;
•a gain from a cost-method investment; and
•the incremental increase in compensation for Sara Armbruster associated with her promotions to Executive Vice President and President and CEO.
The following chart depicts the ROIC performance scale for the awards and our actual ROIC performance for fiscal year 2022.
Our CEO elected not to modify the size of the target awards for the ROIC portion for the other named executive officers based on their individual performance.
Our actual net income performance for fiscal year 2022, as adjusted by the Compensation Committee, was granted two types$4.0 million, or 8.6% of the target net income in our financial plan, as adjusted by the Committee, of $43.5 million, which resulted in the portion of the awards based on net income performance being earned at 0% of target. The Committee approved adjustments to fiscal year 2022 net income for the following items:
•estimated currency translation effects;
•the impact of acquisitions;
•a gain from a cost-method investment; and
•the incremental increase in compensation for Sara Armbruster associated with her promotions to Executive Vice President and President and CEO.
The following chart depicts the net income performance scale for the awards and our actual net income performance for fiscal year 2022.
The Compensation Committee determined that our actual DEI performance met expectations, which resulted in the portion of the award based on DEI performance being earned at 100% of target. The Committee utilized a detailed scorecard provided by management to inform its assessment of management’s progress against the DEI objective.
The following table shows the target amount compared to the amount earned by each named executive officer under their MIP awards for fiscal year 2022:
Fiscal Year 2022 MIP Awards Earned
| | | | | | | | | | | | | | | | | |
| Name | Target | Earned | Earned
(% of Target) |
| | | | | |
| Sara E. Armbruster | $671,932 | | $154,062 | | 23% |
| David C. Sylvester | $473,557 | | $76,953 | | 16% |
| Allan W. Smith, Jr. | $311,368 | | $58,832 | | 19% |
| Lizbeth S. O’Shaughnessy | $302,014 | | $65,436 | | 22% |
| Robert G. Krestakos | $203,209 | | $32,513 | | 16% |
| James N. Ludwig | $163,082 | | $26,093 | | 16% |
| Eddy F. Schmitt | $207,429 | | $33,189 | | 16% |
| James P. Keane | $1,105,549 | | $211,897 | | 19% |
Long-Term Incentive Awards Made in Fiscal Year 2022
The long-term incentive awards made to our named executive officers in fiscal year 2022 were entirely equity-based and awarded 60% in the form of performance unit awardsunits and one type40% in the form of restricted unit award. units in order to more closely align the interests of our executive officers with those of our shareholders. James Keane, who was our CEO when the awards were made, presented to the Compensation Committee his recommendations for the awards for each officer other than Sara Armbruster and himself, taking into account the factors described on page 31 under the heading “Annual Review.” In determining the size of the awards to be made to each officer, the Committee took into account Mr. Keane’s recommendations and reviewed (1) the estimated value of the recommended performance units and restricted units (using a recent average closing price for shares of our Class A Common Stock), calculated as a percentage of the officer’s base salary and relative to the median level of long-term incentive compensation shown in the market comparison study, and (2) the estimated expense for the awards.
The size of the named executive officers’ target long-term incentive awards for fiscal year 2022 were established as follows and based on the applicable officer’s base salary at the time the awards were made and used the 20-trading day average closing price for shares of our Class A Common Stock for the period ending one week prior to the approval of the award by the Compensation Committee:
Fiscal Year 2022 Long-Term Incentive Awards Size
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name | Total Long-Term Incentive Awards | Performance Units (60%) | Restricted Units (40%) |
| % of Salary | Value | Number | Value | Number | Value |
| | | | | | | | | | | |
| Sara E. Armbruster | 250% | | $1,627,080 | | 65,500 | | $975,950 | | 43,700 | | $651,130 |
| David C. Sylvester | 180% | | $1,041,510 | | 41,900 | | $624,310 | | 28,000 | | $417,200 |
| Allan W. Smith, Jr. | 130% | | $536,400 | | 21,600 | | $321,840 | | 14,400 | | $214,560 |
| Lizbeth S. O’Shaughnessy | 130% | | $643,680 | | 25,900 | | $385,910 | | 17,300 | | $257,770 |
| Robert G. Krestakos | 80% | | $317,370 | | 12,800 | | $190,720 | | 8,500 | | $126,650 |
| James N. Ludwig | 70% | | $263,730 | | 10,600 | | $157,940 | | 7,100 | | $105,790 |
| Eddy F. Schmitt | 100% | | $406,770 | | 16,400 | | $244,360 | | 10,900 | | $162,410 |
| James P. Keane | 500% | | $5,200,100 | | 209,400 | | $3,120,060 | | 139,600 | | $2,080,040 |
Performance Units
The performance units will be earned over fiscal year 2022 through fiscal year 2024 with a three-year average payout multiple based on performance achievement in each of three consecutive one-year performance periods, modified based on our three-year TSR performance relative to the companies in the S&P MidCap 400 Index. This design recognizes the recession risk during a three-year performance period, while sustaining performance against annual goals, and is consistent with the design of performance units awarded in fiscal years 2020 and 2021. The performance measures, weightings, target levels and the restrictedperformance scale for each one-year performance period will be determined by the Compensation Committee within the first three months of each fiscal year in the three-year period. This design and the relationship of these performance units to the performance units awarded in fiscal years 2020 and 2021 are illustrated in the following chart:
The Compensation Committee selected relative TSR performance as a modifier for the performance units to align the compensation of the named executive officers with the interests of our shareholders. Our TSR performance will vestbe measured relative to the TSR performance of the companies in the S&P MidCap 400 Index over the three-year period. The performance units earned will be modified by up to 20%, either positively or negatively, based on the following scale, with interpolation used if the actual results do not fall directly on one of the performance levels.
Fiscal Year 2022 Performance Units Modifier Scale
| | | | | |
| Relative TSR Performance | Modifier |
| |
| 25th percentile or below | 80% |
| 50th percentile | 100% |
| 75th percentile or above | 120% |
The Compensation Committee established the following performance measures as the Year 1 performance measures for these awards: (1) fiscal year 2022 operating income relative to the target set forth in our financial plan, with a weighting of 75%, and (2) fiscal year 2022 revenue relative to the target set forth in our financial plan, with a weighting of 25%, each as adjusted to the extent approved by the Committee. The Committee selected these performance measures to reward performance relative to our strategic objectives and financial plan for fiscal year 2022. The Committee also established these performance measures, using the same targets and weighting, as the Year 2 performance measures for the three-year performance units awarded in fiscal year 2021 and as the Year 3 performance measures for the performance units awarded in fiscal year 2020.
The fiscal year 2022 operating income and revenue performance levels required to earn the threshold, target and maximum levels of performance units are shown in the following table, with interpolation used if the actual results do not fall directly on one of the performance levels. The targets were set based on the operating income and revenue in our fiscal year 2022 financial plan of $77.2 million and $2.775 billion, respectively, subject to adjustment by the Compensation Committee. The Committee established the ranges for the performance levels based on market prevalence. Additionally, the Committee established a range for the target performance level for operating income to minimize the impact of immaterial items relative to the financial plan.
Fiscal Year 2022 Performance Units - Year 1 Performance Measures
| | | | | | | | | | | | | | | | | | | | | | | |
| Performance Level | Fiscal Year 2022 Operating Income
(75% Weighting) | Fiscal Year 2022 Revenue
(25% Weighting) |
Performance
(% of plan) | Amount Earned
(% of target) | Performance
(% of plan) | Amount Earned
(% of target) |
| | | | | | | |
| Threshold | 50% | | 50% | | 90% | | 0% |
| Target | 87.5% to 112.5% | | 100% | | 100% | | 100% |
| Maximum | 150% | | 200% | | 110% | | 200% |
Based on fiscal year 2022 actual performance (as adjusted by the Compensation Committee as detailed below), the payout multiple for the first year of the three-year performance period was 22% of target, as shown in the following table. The performance units are not earned until the payout multiples are determined for each of the three one-year performance periods and the three-year relative TSR modifier is determined and applied at the end of threethe three-year period.
Fiscal Year 2022 Performance Units - Year 1 Performance Results
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Performance Period | Performance Measure | Performance | Payout
(% of Target) | Weight | Payout Multiple
(% of Target) |
Plan
($ in millions) | Actual
($ in millions) | Actual
(% of Plan) |
| | | | | | | | | | | | |
| Fiscal Year 2022 | | | | | | | | | | | | |
| Operating Income | $76.7 | | $19.3 | | 25.2% | | 0% | | 75% | | 22% |
| Revenue | $2,804.0 | | $2,772.7 | | 98.9% | | 88% | | 25% | |
The Compensation Committee approved adjustments to fiscal years. All three typesyear 2022 revenue and operating income for the following items:
•estimated currency translation effects;
•the impact of awardsacquisitions;
•a gain from a cost-method investment; and
•the incremental increase in compensation for Sara Armbruster associated with her promotions to Executive Vice President and President and CEO.
At the end of the performance period, the performance units will be settled in shares of our Class A Common Stock at the end of the applicable vesting or performance period.Stock. Dividend equivalents on the performance units will be based on dividends declared and paid on our Class A Common Stock during the performance period and paid only on the number of shares actually earned at the end of the performance period.
Restricted Units
The restricted units granted in fiscal year 2022 will vest in full at the end of fiscal year 2024 and be settled in shares of our Class A Common Stock.Dividend equivalents on the restricted units will be based on dividends declared and paid on our Class A Common Stock during the vesting period and will be paid during the vesting period.
Fiscal Year 2021 Performance Units to be Earned in Fiscal Year 2023
The first set ofthe named executive officers received a performance unit awards willaward to be earned based upon our average ROIC over fiscal years 2016year 2021 through 2018. Targetfiscal year 2023 with a design consistent with the performance was set at average ROIC of 12.0%. The levels of average ROICunits awarded in fiscal year 2022. During fiscal year 2022, the Compensation Committee established the same performance that will result in an awardmeasures, targets and weightings for the Year 2 performance measures for the fiscal year 2021 performance units as were used for the Year 1 performance measures for the fiscal year 2022 performance units. A summary of the threshold, target or maximum number of shares under theseperformance and payout scales set for the Year 1 and the Year 2 performance measures for the fiscal year 2021 performance units are shown in the following table.
Fiscal Year 2021 Performance Units - Year 1 and 2 Performance Measures
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Performance Period | Performance Measure | Weight | Threshold | Target | Maximum |
Performance
(% of Plan) | Payout
(% of Target) | Performance
(% of Plan) | Payout
(% of Target) | Performance
(% of Plan) | Payout
(% of Target) |
| | | | | | | | | | | | | | |
| Fiscal Year 2021 | | | | | | | | | | | | | | |
| FY21 Performance Measures | 100% | | Committee Assessment | | 0% | | Committee Assessment | | 100% | | Committee Assessment | | 125% |
| Fiscal Year 2022 | | | | | | | | | | | | | | |
| Operating Income | 75% | | 50% | | 50% | | 87.5% to 112.5% | | 100% | | 150% | | 200% |
| Revenue | 25% | | 90% | | 0% | | 100% | | 100% | | 110% | | 200% |
Based on the Compensation Committee’s assessment of management’s performance in fiscal year 2021 and fiscal year 2022 actual performance (as adjusted by the Committee as described above under the heading “Incentive Compensation Awards - Long-Term Incentive Awards Made in Fiscal Year 2022 - Performance Units”), the payout multiples for the first and second years of the three-year performance period were 100% of target and 22% of target, respectively, as shown in the following table, with interpolation used intable. The performance units are not earned until the event that the actual results do not fall directly on onepayout multiples are determined for each of the three one-year performance levels.
|
| | | |
Performance Level | Three-Year Average ROIC Performance | Number of Shares Earned |
| | | |
Threshold | 7.0% | | 0% of target |
Target | 12.0% | | 100% of target |
Maximum | 17.0% | | 200% of target |
The Compensation Committee selected three-year average ROIC as the performance measure for the first set of performance unit awards in order to provide an element of incentive compensation based on a long-term company performance metric focused on profitabilityperiods and the efficient usethree-year relative TSR modifier is determined and applied at the end of capitalthe three-year period.
Fiscal Year 2021 Performance Units - Year 1 and 2 Performance Results
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Performance Period | Performance Measure | Performance | Payout
(% of Target) | Weight | Payout Multiple
(% of Target) |
Plan
($ in millions) | Actual
($ in millions) | Actual
(% of Plan) |
| | | | | | | | | | | | |
| Fiscal Year 2021 | | | | | | | | | | | | |
| FY21 Performance Measures | | | Committee Assessment | | | | 100% | | 100% | | 100% |
| Fiscal Year 2022 | | | | | | | | | | | | |
| Operating Income | $76.7 | | $19.3 | | 25.2% | | 0% | | 75% | | 22% |
| Revenue | $2,804.0 | | $2,772.7 | | 98.9% | | 88% | | 25% | |
Fiscal Year 2020 Performance Units and Restricted Units Earned in Fiscal Year 2022
In settingfiscal year 2022, the target and performance scale for the ROIC performance units, the Compensation Committee considered our compensation philosophy and objectives, our estimated cost of capital, various scenarios for our ROIC performance over the performance period, industry conditions, the overall economic environment, the cyclical nature of our industry and the desire to motivate ournamed executive officers to achieve our business objectives. The target average ROIC for the fiscal year 2016earned two long-term incentive awards was set at 12.0%, an increase of one percentage point compared to the target set for the performance unit awards grantedwhich were made in fiscal year 2015. This increase was based on the philosophy of driving continuous improvement and increasing the target during periods of expected stronger financial performance. The ROIC2020: performance units will beand restricted units. The restricted units vested at the end of fiscal year 2022 and settled in shares of our Class A Common Stock to further align the compensation of the named executive officers with the interests of our shareholders.Stock.
The second setperformance units were earned over fiscal year 2020 through fiscal year 2022 with a three-year average payout multiple based on performance achievement in each of three consecutive one-year performance unit awards will be earnedperiods and modified based uponon our three-year TSR performance relative to the companies in the S&P MidCap 400 Index over fiscal years 2016 through 2018.Index. The levels of relative TSR performance that will result in an award of the threshold, target or maximum number of shares undermeasures used for these performance units are set forth below. The FY21 Performance Measures are described on page 29 under the heading “Executive Summary - Incentive Compensation Earned in Fiscal Year 2022.”
Fiscal Year 2020 Performance Units - Year 1, 2 and 3 Performance Measures
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Performance Period | Performance Measure | Weight | Threshold | Target | Maximum |
Performance
(% of Plan) | Payout
(% of Target) | Performance
(% of Plan) | Payout
(% of Target) | Performance
(% of Plan) | Payout
(% of Target) |
| | | | | | | | | | | | | | |
| Fiscal Year 2020 | | | | | | | | | | | | | | |
| Operating Income | 75% | | 80% | | 50% | | 95% to 105% | | 100% | | 120% | | 200% |
| Revenue | 25% | | 90% | | 0% | | 100% | | 100% | | 110% | | 200% |
| Fiscal Year 2021 | | | | | | | | | | | | | | |
| FY21 Performance Measures | 100% | | Committee Assessment | | 0% | | Committee Assessment | | 100% | | Committee Assessment | | 125% |
| Fiscal Year 2022 | | | | | | | | | | | | | | |
| Operating Income | 75% | | 50% | | 50% | | 87.5% to 112.5% | | 100% | | 150% | | 200% |
| Revenue | 25% | | 90% | | 0% | | 100% | | 100% | | 110% | | 200% |
Our actual performance for fiscal years 2020 through 2022 (as adjusted by the Compensation Committee as showndetailed on the following page), resulted in the fiscal year 2020 performance units being earned at 70% of target, as set forth in the following table, with interpolation used in the event that the actual results do not fall directly on one of the percentile ranks. If relative TSR performance falls below the threshold, no shares would be earned.
|
| | | |
Performance Level | Relative TSR Performance | Number of Shares Earned |
| | | |
Threshold | 30th percentile
| | 50% of target |
Target | 50th percentile
| | 100% of target |
Maximum | 80th percentile
| | 200% of target |
table. The Compensation Committee selected TSR as the performance measure for the second set of performance unit awards to align the compensation of the executive officers with the interests of our shareholders. It chose the companies in the S&P MidCap 400 Index for the measurement of relative TSR because the Committee desired a large enough group to mitigate the impact of any one-time events that may be experienced by a company within the group, and the group includes companies with reasonably similar market capitalization to our company. In developing the performance scale for the TSRearned performance units the Compensation Committee utilized the same scale that was used in fiscal year 2015, which was reviewed based on survey data and market prevalence of TSR scales used by other companies. The TSR performance units will bewere settled in
shares of our Class A Common Stock, and dividend equivalents were paid on the earned shares based on the dividends declared and paid on our Class A Common Stock during the performance period.
Fiscal Year 2020 Performance Units - Total Performance Results
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Performance Period | Performance Measure | Performance | Payout
(% of Target) | Weight | Payout Multiple
(% of Target) |
Plan
($ in millions) | Actual
($ in millions) | Actual
(% of Plan) |
| | | | | | | | | | | | |
| Fiscal Year 2020 | | | | | | | | | | | | |
| Operating Income | $220.8 | | $249.8 | | 113.1% | | 154% | | 75% | | 140% |
| Revenue | $3,728.0 | | $3,723.7 | | 99.9% | | 99% | | 25% | |
| Fiscal Year 2021 | | | | | | | | | | | | |
| FY21 Performance Measures | | | Committee Assessment | | | | 100% | | 100% | | 100% |
| Fiscal Year 2022 | | | | | | | | | | | | |
| Operating Income | $76.7 | | $19.3 | | 25.2% | | 0% | | 75% | | 22% |
| Revenue | $2,804.0 | | $2,772.7 | | 98.9% | | 88% | | 25% | |
| Three-Year Average | | | | | | | | | | | 87% |
| Fiscal Years 2020-2022 | Relative TSR | | | 14th Percentile | | | | Modifier | | | | x 80% |
| Total Performance Result | | | | | | | | | | | 70% |
The Committee approved adjustments to further align the fiscal year 2022 performance measures as described on page 40 under the heading “Incentive Compensation Awards - Long-Term Incentive Awards Made in Fiscal Year 2022 - Performance Units.” The Committee approved adjustments to the fiscal year 2020 performance measures for the following items:
•estimated currency translation effects;
•a gain from the sale of PolyVision;
•an adjustment to an earn-out arrangement related to an acquisition; and
•an impairment of a cost-method investment.
Fiscal Year 2023 Changes
For fiscal year 2023, the incentive compensation opportunities awarded to our named executive officers were consistent with the types of awards made in fiscal year 2022 and consisted of (1) MIP awards, (2) performance units which will be earned over fiscal year 2023 through fiscal year 2025 and (3) restricted units that vest at the end of fiscal year 2025. The MIP award and performance units utilize performance measures which are similar to the awards made in fiscal year 2022. The Compensation Committee approved the following changes for fiscal year 2023 for the named executive officers with the interests of our shareholders.who were executive officers in April 2022:
•Base Salary: Effective May 30, 2022, Sara Armbruster’s base salary was increased to $925,000 and Allan Smith’s base salary was increased to $600,000. The restricted units were awarded in conjunction with the two performance unit awards to encourage retention while aligning the compensation of theother named executive officers received annual increases ranging from 5.9% to 6.7% of their base salary.
•MIP Awards: Sara Armbruster received a MIP award with a total target of 110% of her base salary, and Robert Krestakos received a MIP award with a total target of 60% of his base salary. The targets for the MIP awards granted to the other named executive officers were consistent with fiscal year 2022.
•Long-Term Incentive Awards: Sara Armbruster received long-term incentive awards with a value of 400% of her base salary, Allan Smith received long-term incentive awards with a value of
180% of his base salary, and Robert Krestakos received long-term incentive awards with a value of 100% of his base salary. The other named executive officers received long-term incentive awards with values as a percent of their base salaries which were consistent with the interests of our shareholders.awards made in fiscal year 2022.
In determining the number of performance units and restricted units to be granted, our CEO presented to the Compensation Committee his recommendations for the awards for each named executive officer other than himself, taking into account the factors described above under the heading “Annual Review.” The Committee reviewed the estimated value of the recommended total target level of performance units and the restricted units (using a recent average closing price for shares of our Class A Common Stock) as a percentage of the officer’s base salary relative to the median level of long-term incentive compensation shown in the market comparison study and the estimated expense of the awards. For each•Special Restricted Unit Awards: Each of the named executive officers other than the CEO, the equity awards were allocated as follows: 67%Sara Armbruster received a special restricted unit award with a value of 33% of their base salary which will vest in performance units (one half in ROIC-based performance units and the other half in TSR-based performance units) and 33% in restricted units. The awards granted to the CEO were allocated 75% in performance units (one half in ROIC-based performance units and the other half in TSR-based performance units) and 25% in restricted units, to provide greater emphasis on alignment with the long-term interests of our shareholders and to link pay to TSR and company performance. Over the last several years, it has been the Compensation Committee's practice to provide the CEO with long-term incentive equity awards that are more heavily weighted on performance conditions than those granted to the other named executive officers.
Awards Earned in Fiscal Year 2016 and Link to Company Performance
The performance period for the performance units granted to the named executive officers in fiscal year 2014 ran from the beginning of fiscal year 2014 throughfull at the end of fiscal year 2016.2024. These awards require continued employment until the vesting date and are forfeitable if the officer retires prior to vesting. The first set of performance unit awards were earned based on our three-year average ROIC. Our actual ROICdesigned to assist with engagement and retention given the challenging business environment and high competition for fiscal years 2014 through 2016 resulted in shares being earned at 150%. The following chart depicts the performance scale for these awards and our actual fiscal year 2014 to 2016 average ROIC performance and performance unit payout level.talent.
The performance period for the cash-based award granted to Eddy F. Schmitt in fiscal year 2014 ran from the beginning of fiscal year 2014 through the end of fiscal year 2016 and was earned based on our three-year average ROIC, using the same performance scale shown on the previous page for the performance unit awards earned based on three-year average ROIC. As a result, this award was earned at 150%.
The second set of performance unit awards were earned based on our TSR performance relative to the companies in the industrial subset of the S&P MidCap 400 Index. Our actual TSR performance for fiscal years 2014 through 2016 resulted in shares being earned at 82.5% of target. The following chart depicts the performance scale for these awards and our actual fiscal year 2014 to 2016 relative TSR performance and performance unit payout level.
Retirement Plans and Benefits
Each of the named executive officers is eligible to participate in the following retirement benefit plans:
•our Retirement Plan,Plan;
•our Restoration Retirement PlanPlan; and
•our Deferred Compensation Plan.
Our Retirement Plan is a tax-qualified defined contribution plan, open to alleligible U.S.-based employees of Steelcase Inc. and certain of its subsidiaries and affiliates. Participants may elect to contribute a portion of their earnings to the 401(k) component of the Retirement Plan each year, and we made a non-discretionary contribution of 5% of each participant’s eligible pay foryear. For fiscal year 2016. In addition,2022, we matched 50% of the first 6% of eligible pay each participant contributed, and we made a contribution of 2% of each participant’s eligible pay to the Retirement Plan during the fiscal year.Plan.
Our Restoration Retirement Plan is a non-qualified defined contribution plan which is unfunded. Participants in our Management Incentive Plan, or MIP, for whom contributions to our Retirement Plan are limited by eligible pay caps under Section 401(a)(17) of the Internal Revenue Code may participate in the Restoration Retirement Plan. In fiscal year 2016,2022, we made matching contributions and an annual contribution to participants’ bookkeeping accounts under the Restoration Retirement Plan at the same rate of contribution as our Retirement Plan.
Our Deferred Compensation Plan is a non-qualified defined contribution plan which is unfunded. In fiscal year 2016,2022, participants could elect to defer up to 50% of their base salary and/or up to 75% of their short-termMIP award under the MIP into an unfunded account with our company on a tax-deferred basis. Our company does not make any contributions to the Deferred Compensation Plan.
Each of the named executive officers, other than Eddy F. Schmitt, participates in our Executive Supplemental Retirement Plan, which was originally adopted in 1981. This plan was intended to assist us with attracting and retaining highly qualified executives and to enable them to devote their full-time best efforts to our company. This plan was closed to new participants as of the beginning of fiscal year 2016. We do not have a policy or practice of granting our executive officers extra years of service credit under this or any other plan.
Each of these plans, other than our Retirement Plan, is discussed in Executive Compensation, Retirement Programs and Other Arrangements on pages 54-56 under the headings “Pension Benefits” and “Deferred Compensation.”
In addition to these retirement and deferred compensation plans, upon a qualifying retirement (generally when the age at retirement and number of years of continuous service with our company equals 80 or more), each of the named executive officers hired before July 22, 2002 is eligible to receive retiree healthcare benefits, including medical, dental and vision insurance programs, in the same manner as all other U.S. employees of
Steelcase Inc. who are qualified retirees. We currently allow eligible U.S. retirees to continue to receive healthcare benefits, for life, but we reserve the right to change or eliminate this benefit at any time. Retirees under age 65 are required to pay a portion of the cost of the medical coverage based on the participant's retirement date, age and years of service.coverage. All retirees pay the full cost of dental and vision.vision coverage. Retirees age 65 or older and eligible for Medicare receive a fixed amount that can be used for reimbursement of any supplemental healthcare premiums and other eligible out-of-pocket expenses.
Severance and Change in Control Benefits
During fiscal year 2016,2022, each of the named executive officers participated in our Executive Severance Plan, which provides for certain benefits in the event of certain terminations of employment with our company. In connection with our CEO transition, effective October 4, 2021, James Keane was no longer a participant in the Executive Severance Plan. This plan is intended to provide clarity to shareholders and executive management in the event of a severance and/or change in control, align the interests of executive management with the long-term interests of our shareholders, reinforce behavior that promotes maximum value in the event of any merger or acquisition activity and attract and retain executive management by maintaining competitive compensation programs. The value of the potential benefits under the Executive Severance Plan for each of the named executive officers who were employed by us as of the end of fiscal year 20162022 is detailed in Executive Compensation, Retirement Programs and Other Arrangements on pages 56-60 under the heading “Termination or Change in Control Payments.”
In September 2021, we entered into a Voluntary Mutual Separation Agreement with James Ludwig, under which Mr. Ludwig’s employment with us ended on December 31, 2021. Under the agreement, we agreed to pay Mr. Ludwig one year of his base salary and health insurance premiums, and Mr. Ludwig agreed that he will not compete with us for twelve months following the end of his employment. In connection with his voluntary separation, Mr. Ludwig will not receive any benefits under our Executive Severance Plan, but he is eligible to receive benefits as a qualified retiree under our various compensation and benefit plans.
Other Programs and Practices
Perquisites and Other Benefits
Our company provides very limited perquisites or other personal benefits to our named executive officers. The only perquisites received in fiscal year 20162022 by the named executive officers werewere: (1) an optional annual executive physical examination, (2) personal travel on our corporate aircraft by immediate family membersin the case of certain named executive officers who accompanied the officers on business travel,Sara Armbruster only, a home security system and monitoring, (3) in the case of James P. Keane only, home security costsmonitoring, a Steelcase chair that he received in connection with his retirement and reimbursement for the payment of taxes related to his receipt of the chair, and (4) in the case of Eddy F. Schmitt only, round trip airfare for annual home leave for him and his family, pursuant to an agreement we entered into with him in fiscal year 2014. The aggregate incremental cost to our company of the perquisites or other personal benefits received by the named executive officers, other than Sara Armbruster, in fiscal year 20162022 was less than $10,000 per officer.
The named executive officers also may elect to participate in other benefit programs on the same terms as other U.S. employees of our company. These programs includecompany, including, but not limited to, medical, dental, vision, life and disability insurance, wellbeing offerings, charitable gift matching and discounts on company products.
Stock Ownership Guidelines
The Compensation CommitteeOur Board of Directors established stock ownership guidelines to encourage stock ownership among our executives to further the objective of aligning our executives’ interests with those of our shareholders.shareholders and has delegated to the Compensation Committee the authority to oversee, interpret, amend and restate the guidelines. Under theseour current guidelines, our CEO is expected to own shares of our common stock having a current market value of not less than five times histheir base salary, and the other named executive
officers are expected to own shares having a current market value of not less than two or three times their respective base salaries, depending on their position. The amount of holdings required by the guidelines was developed based on market comparisons and the premise that an executive should be able to satisfy the holding requirements by retaining shares awarded to the executive as compensation and without purchasing additional shares, assuming the applicable performance criteria for the share awards are satisfied. New executive officers are given a period of five fiscal years from their first annual equity award to meet their holding requirements in order to allow them an appropriate period of time to build their holdings through annual equity awards. Similarly, ourawards, and an executive officer who is appointed CEO wasis given a period of five fiscal years from his appointmenttheir first equity award received as CEO to meet histheir increased holding requirement.
In addition to shares owned by our executives, holdings which count toward satisfaction of their holding requirements include restricted units and performance units at target award levels during the performance period held by the executives. The Compensation Committee reviews compliance with the stock ownership guidelines annually. All of the named executive officers who are currently executive officers are in compliance with our stock ownership guidelines.
Hedging, Speculative Transactions and Stock Pledging
We prohibit our employees, officers and directors from engaging in any hedging transactions with regard to our stock, including prepaid variable forwards, equity swaps, collars, exchange funds or any other transactions in which the employee, officer or director continues to own the securities without the full risks and rewards of ownership. Our directors and executive officers are also prohibited from engaging in speculative transactions involving our stock, including excessive trading, short sales or buying or selling puts or calls. In addition, our
Our executive officers are prohibited from purchasing Companyour company’s securities on margin, borrowing against Companyour company’s securities in a margin account or otherwise pledging Companyour company’s securities as collateral for a loan. Directors are also prohibited from engaging in such transactions unless (1) the applicable lender has agreed in writing that the securities will not be sold during any trading blackout period applicable to the director and (2) the specific transaction has been approved by the Nominating and Corporate Governance Committee or the Chair of that committee. Any pledge arrangements by directors which were in place prior to the adoption of this prohibition in fiscal year 2013 may be continued in accordance with their terms; however, any renewals, extensions or modifications thereof will be subject to the requirements set forth in our Corporate Governance Principles.
Non-Compete and Other Forfeiture Provisions
One of the basic principles of the various compensation plans and programs which provide benefits to our named executive officers during or after their employment with us is that certain compensation or benefits will be forfeited or returned if the participant competes with us during a specified period after they leave our employment.
In addition, our Executive Severance Plan provides that in the event our financial results are materially restated, the Compensation Committee may review the circumstances surrounding the restatement and determine whether and which participants will forfeit the right to receive any future benefits and/or repay any prior benefits received under the plan. In the event of a material restatement due to fraud, if the Committee determines that a participant was responsible for or participated in the fraud, that participant will be required to forfeit any future benefits and repay any prior benefits paid in excess of the amounts that would have been paid based on our restated financial results. These are
called “clawback” provisions, and the MIP and theour Incentive Compensation Plan, or ICP, have similar clawback provisions which apply only to those participants who also participate in the Executive Severance Plan.
Tax Considerations
In making decisions regarding executive compensation, the Compensation Committee considers the tax deductibility of the amounts payable. Section 162(m) of the Internal Revenue Code generally limits the tax deductibility of annual compensation paid to certain officers to $1 million unless certain conditions are satisfied. The Committee’s goal is to structure the compensation paid to these individuals to maximize deductibility for federal income tax purposes; however, when deemed necessary, the Committee may authorize compensation that may not be deductible under Section 162(m) to promote incentive and retention goals.
Fiscal Year 2017 Changes
In fiscal year 2017, a change was made to the types of long-term awards granted to our executive officers. Each executive officer received three types of long-term incentive awards: (1) a cash-based award earned based on our average ROIC over three fiscal years, (2) performance units earned based on our TSR performance relative to a peer group over three fiscal years, and (3) restricted units. The cash-based awards represent a change from our previous practice of granting performance units earned based on our average ROIC over three fiscal years and the change was made to strengthen the correlation between our ROIC performance and the value of the awards realized at the end of the performance period. In addition, this change more closely aligns the design of the long-term incentive compensation of our executive officers with other management employees who participate in our long-term incentive compensation program and allows for a smoother transition of compensation programs when individuals move into executive positions. This design continues to support our compensation philosophy of linking pay to performance, encouraging retention and aligning the interests of our executives with those of our shareholders. The proportion of performance-based and time-based awards granted to our executive officers in fiscal year 2017 was consistent with the awards granted in fiscal year 2016.
38
EXECUTIVE COMPENSATION, RETIREMENT PROGRAMS AND OTHER ARRANGEMENTS
This section and the tables in this section should be read in conjunction with the more detailed description of our executive compensation plans and arrangements included in the Compensation Discussion and Analysis.
Summary Compensation Table
The following table shows compensation information for the fiscal years indicated for (1) James P. Keane,Sara Armbruster, our CEO, (2) David C. Sylvester, our Chief Financial Officer, and (3) our three other most highly paid executive officers as of the end of fiscal year 2016.2022, (4) two other individuals, each of whom was an executive officer during fiscal year 2022 and would have been one of our three other most highly paid executive officers if they had been an executive officer at the end of the year, and (5) James P. Keane, our former CEO. In this proxy statement, we refer to these fiveeight executive officers collectively as the “named executive officers.”
Summary Compensation Table
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name and Principal Position | Fiscal Year | Salary (1) | Stock
Awards (2) | Non-Equity Incentive Plan Compensation (3) | Change in Pension Value and Nonqualified Deferred Compensation Earnings (4) | All Other Compensation (5) | Total |
| | | | | | | | | | | | | |
| Sara E. Armbruster | 2022 | | $ | 697,395 | | | $ | 4,462,068 | | | $ | 154,062 | | | $ | — | | | $ | 107,021 | | | $ | 5,420,546 | |
| President and Chief Executive Officer | 2021 | | $ | 398,405 | | | $ | 570,971 | | | $ | 235,413 | | | $ | 79,595 | | | $ | 55,164 | | | $ | 1,339,548 | |
| 2020 | | $ | 472,977 | | | $ | 269,747 | | | $ | 741,278 | | | $ | 405,293 | | | $ | 78,934 | | | $ | 1,968,229 | |
| | | | | | | | | | | | | |
| David C. Sylvester | 2022 | | $ | 592,040 | | | $ | 1,089,981 | | | $ | 76,953 | | | $ | — | | | $ | 52,503 | | | $ | 1,811,477 | |
Senior Vice President,
Chief Financial Officer | 2021 | | $ | 493,438 | | | $ | 1,241,011 | | | $ | 446,344 | | | $ | 14,738 | | | $ | 84,696 | | | $ | 2,280,227 | |
| 2020 | | $ | 585,744 | | | $ | 599,013 | | | $ | 1,287,708 | | | $ | 198,345 | | | $ | 122,326 | | | $ | 2,793,136 | |
| | | | | | | | | | | | | |
| Allan W. Smith, Jr. | 2022 | | $ | 453,038 | | | $ | 752,843 | | | $ | 58,832 | | | $ | — | | | $ | 33,233 | | | $ | 1,297,946 | |
Senior Vice President,
Chief Revenue Officer | 2021 | | $ | 351,785 | | | $ | 504,989 | | | $ | 203,436 | | | $ | 46,613 | | | $ | 48,437 | | | $ | 1,155,260 | |
| 2020 | | $ | 417,615 | | | $ | 283,801 | | | $ | 616,425 | | | $ | 235,110 | | | $ | 68,488 | | | $ | 1,621,439 | |
| | | | | | | | | | | | | |
| Lizbeth S. O’Shaughnessy | 2022 | | $ | 503,423 | | | $ | 673,040 | | | $ | 65,436 | | | $ | — | | | $ | 40,861 | | | $ | 1,282,760 | |
Senior Vice President,
Chief Administrative Officer, General Counsel & Secretary | 2021 | | $ | 421,373 | | | $ | 723,797 | | | $ | 302,172 | | | $ | 14,132 | | | $ | 61,214 | | | $ | 1,522,688 | |
| 2020 | | $ | 500,202 | | | $ | 370,455 | | | $ | 804,987 | | | $ | 111,921 | | | $ | 87,512 | | | $ | 1,875,077 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Robert G. Krestakos | 2022 | | $ | 406,490 | | | $ | 331,969 | | | $ | 32,513 | | | $ | — | | | $ | 28,575 | | | $ | 799,547 | |
Vice President,
Global Operations | | | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | | |
| James N. Ludwig (6) | 2022 | | $ | 326,231 | | | $ | 276,081 | | | $ | 26,093 | | | $ | — | | | $ | 430,686 | | | $ | 1,059,091 | |
Former Vice President,
Global Design and Product Engineering | | | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Eddy F. Schmitt (7) | 2022 | | $ | 414,923 | | | $ | 547,490 | | | $ | 33,189 | | | $ | — | | | $ | 31,066 | | | $ | 1,026,668 | |
Senior Vice President,
Americas | | | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | | |
| James P. Keane (8) | 2022 | | $ | 930,045 | | | $ | 5,057,410 | | | $ | 211,897 | | | $ | — | | | $ | 125,631 | | | $ | 6,324,983 | |
Former President and
Chief Executive Officer; Former Vice Chair | 2021 | | $ | 740,000 | | | $ | 4,808,704 | | | $ | 1,609,208 | | | $ | 17,965 | | | $ | 231,297 | | | $ | 7,407,174 | |
| 2020 | | $ | 1,050,385 | | | $ | 2,400,000 | | | $ | 3,883,539 | | | $ | 143,324 | | | $ | 307,940 | | | $ | 7,785,188 | |
| | | | | | | | | | | | |
_____________
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Name and Principal Position | Fiscal Year | Salary (1) | Stock Awards (2) | Non-Equity Incentive Plan Compensation (3) | Change in Pension Value and Nonqualified Deferred Compensation Earnings (4) | All Other Compensation (5) | Total |
| | | | | | | | | | | | | | |
| James P. Keane | 2016 | | $ | 882,692 |
| | $ | 3,546,838 |
| | $ | 1,284,429 |
| | $ | 321,554 |
| | $ | 142,456 |
| | $ | 6,177,969 |
|
President and Chief Executive Officer | 2015 | | $ | 800,000 |
| | $ | 3,268,038 |
| | $ | 900,000 |
| | $ | 369,237 |
| | $ | 28,748 |
| | $ | 5,366,023 |
|
| 2014 | | $ | 609,832 |
| | $ | 3,346,656 |
| | $ | 651,408 |
| | $ | 94,016 |
| | $ | 39,943 |
| | $ | 4,741,855 |
|
| | | | | | | | | | | | | |
|
| David C. Sylvester | 2016 | | $ | 512,404 |
| | $ | 1,011,951 |
| | $ | 606,589 |
| | $ | 71,301 |
| | $ | 81,094 |
| | $ | 2,283,339 |
|
Senior Vice President, Chief Financial Officer | 2015 | | $ | 500,000 |
| | $ | 1,169,806 |
| | $ | 500,000 |
| | $ | 203,545 |
| | $ | 28,748 |
| | $ | 2,402,099 |
|
| 2014 | | $ | 479,134 |
| | $ | 891,034 |
| | $ | 454,711 |
| | $ | 52,675 |
| | $ | 28,198 |
| | $ | 1,905,752 |
|
| | | | | | | | | | | | | |
|
| Lizbeth S. O'Shaughnessy | 2016 | | $ | 430,419 |
| | $ | 614,106 |
| | $ | 382,151 |
| | $ | 92,662 |
| | $ | 79,690 |
| | $ | 1,599,028 |
|
Senior Vice President, Chief Administrative Officer, General Counsel & Secretary | 2015 | | $ | 414,510 |
| | $ | 654,695 |
| | $ | 310,752 |
| | $ | 211,923 |
| | $ | 28,748 |
| | $ | 1,620,628 |
|
| | | | | | | | | | | | |
|
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
|
| Sara E. Armbruster | 2016 | | $ | 416,781 |
| | $ | 461,090 |
| | $ | 370,061 |
| | $ | — |
| | $ | 58,065 |
| | $ | 1,305,997 |
|
Vice President, Strategy, Research and New Business Innovation | 2015 | | $ | 410,000 |
| | $ | 533,940 |
| | $ | 307,500 |
| | $ | 180,903 |
| | $ | 140,407 |
| | $ | 1,572,750 |
|
| 2014 | | $ | 401,301 |
| | $ | 630,577 |
| | $ | 285,679 |
| | $ | 12,873 |
| | $ | 71,019 |
| | $ | 1,401,449 |
|
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| Eddy F. Schmitt | 2016 | | $ | 362,904 |
| | $ | 281,367 |
| | $ | 544,873 |
| | $ | — |
| | $ | 59,361 |
| | $ | 1,248,505 |
|
Senior Vice President, Americas | | | | | | | | | | | | |
|
| | | | | | | | | | | | |
|
(2)The amounts shown in this column are the aggregate grant date fair values computed in accordance with ASC Topic 718 for performance units and restricted units granted during the applicable fiscal year.
| |
(1) | Fiscal years 2015 and 2016 included 52 weeks, and fiscal year 2014 included 53 weeks. |
| |
(2) | The amounts shown in this column are the aggregate grant date fair values computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 for performance units and restricted units granted during the applicable fiscal year. |
•The amounts shown for fiscal year 2022 relate to: (a) one-third of the performance units granted in fiscal year 2022, (b) one-third of the three-year performance units granted in fiscal year 2021, (c) one-third of the performance units granted in fiscal year 2020 and (d) restricted units granted in fiscal year 2022.
◦The grant date fair value of the performance units to be earned based on three-year average ROIC performance was calculated using a Monte Carlo simulation valuation performed as of the closing pricedate of our Class A Common Stock ongrant. The performance conditions for these awards are set annually for each one-year period of the grant date multiplied byawards’ three-year performance periods. Consistent with the requirements of ASC Topic 718, the values included for fiscal year 2022 represent the value of one-third of the total target number of shares that mayunits awarded in fiscal years 2022, 2021 and 2020, reflective of the portion of each award considered granted in fiscal year 2022. The performance measures for the remaining portions of the awards will be earned.established by the Compensation Committee in subsequent fiscal years, and those portions of the awards will be reported in the Summary Compensation Table for those fiscal years. Assuming that the highest level of performance conditions will be achieved, the value of these performance units,awards using the grant date market price per share of our Class A Common Stock,fair values would be as follows: James P. Keane, $2,391,900; David C. Sylvester, $618,448; Lizbeth S. O'Shaughnessy, $375,290; Sara E. Armbruster, $281,792; and Eddy F. Schmitt, $171,838.
The grant date fair value▪For year 1 of the performance units to be earned based on three-year TSR performance relative to a peer group was calculated using a Monte Carlo simulation fair value onfiscal year 2022 awards: $679,006 for Sara Armbruster; $434,374 for David Sylvester; $223,920 for Allan Smith; $268,486 for Lizbeth O’Shaughnessy; $132,704 for Robert Krestakos; $109,876 for James Ludwig; $170,024 for Eddy Schmitt and $2,170,780 for James Keane.
▪For year 2 of the datefiscal year 2021 awards: $267,904 for Sara Armbruster; $597,324 for David Sylvester; $237,104 for Allan Smith; $368,704 for Lizbeth O’Shaughnessy; $182,000 for Robert Krestakos; $151,200 for James Ludwig; $232,400 for Eddy Schmitt and $2,581,600 for James Keane.
▪For year 3 of grant multiplied by the target number of shares that may be earned.fiscal year 2020 awards: $152,295 for Sara Armbruster; $339,065 for David Sylvester; $134,553 for Allan Smith; $208,921 for Lizbeth O’Shaughnessy; $103,584 for Robert Krestakos; $85,895 for James Ludwig; $131,897 for Eddy Schmitt; and $1,328,000 for James Keane.
◦The grant date fair value of the restricted units was calculated using the closing price of our Class A Common Stock on the grant date multiplied by the number of shares underlying the restricted units.
•The amounts shown for fiscal year 2021 relate to: (a) one-year performance units granted in fiscal year 2021, (b) one-third of the three-year performance units granted in fiscal year 2021, (c) one-third of the performance units granted in fiscal year 2020 and (d) restricted units granted in fiscal year 2021.
◦The grant date fair value of the one-year performance units was calculated using the closing price of our Class A Common Stock on the grant date multiplied by the target number of shares that may be earned.
◦The grant date fair value of the other performance units was calculated using a Monte Carlo simulation valuation performed as of the date of grant. The performance conditions for these awards are set annually for each one-year period of the awards’ three-year performance periods. Consistent with the requirements of ASC Topic 718, the values included for fiscal year 2021 represent the value of one-third of the total target number of
units awarded in fiscal years 2021 and 2020, reflective of the portion of each award considered granted in fiscal year 2021.
◦The grant date fair value of the restricted units was calculated using the closing price of our Class A Common Stock on the grant date multiplied by the number of shares underlying the restricted units.
•The amounts shown for fiscal year 2020 relate to: (a) one-third of the performance units granted in fiscal year 2020 and (b) restricted units granted in fiscal year 2020.
◦The performance conditions for the first year of the performance units granted in fiscal year 2020 were established in fiscal year 2020, and the grant date fair value of the performance units was calculated using a Monte Carlo simulation valuation performed as of the date of grant. Consistent with the requirements of ASC Topic 718, the values included for fiscal year 2020 represent the value of one-third of the total target number of units awarded in fiscal year 2020, reflective of the portion of the award considered granted in fiscal year 2020.
◦The grant date fair value of the restricted units was calculated using the closing price of our Class A Common Stock on the grant date multiplied by the number of shares underlying the restricted units.
The assumptions made in the valuation of such awards are disclosed in Note 1617 to the consolidated financial statements included in our annual report on Form 10-K for fiscal year 20162022 filed with the SEC on April 15, 2022.
(3)2016The amounts shown in this column represent:
•.
| |
(3) | The amounts shown in this column represent the sum of: |
| |
(a) | short-term MIP awards earned in the applicable fiscal year and |
| |
(b) | for Eddy F. Schmitt only, (1) the amount earned under a cash-based award granted in fiscal year 2014 which was earned based on our average ROIC performance over fiscal years 2014 through 2016 and (2) earnings for fiscal year 2016 on the remaining balance of a long-term MIP award earned in fiscal year 2013. |
The short-termfor fiscal year 2022, MIP awards were paidearned and payable in cash shortly after the end of the fiscal year; and
•for fiscal year 2021 and fiscal year 2020, the sum of (a) MIP awards earned and payable in cash shortly after the end of the applicable fiscal year. Mr. Schmitt'syear and (b) cash-based awardawards which were earned based on our average ROIC performance over fiscal years 2019 through 2021 and the remaining balance of his long-term MIP award were paidfiscal years 2018 through 2020, and payable in cash shortly after the end of fiscal years 2021 and 2020, respectively.
(4)The amounts shown in this column represent the net change in actuarial present value of the applicable officer’s accumulated benefit under our Executive Supplemental Retirement Plan. These changes are primarily driven by compensation, plan provisions and the discount rate and reflect the following: (a) in fiscal year 2016. We maintained2022, an increase in the unpaid amountdiscount rate from 2.0% to 3.0%, (b) in fiscal year 2021, a decrease in the discount rate from 2.2% to 2.0%, and (c) in fiscal year 2020, a decrease in the discount rate from 3.9% to 2.2%. For fiscal year 2022, the change in actuarial present value of Mr. Schmitt's long-term MIP awardaccumulated benefit under the Executive Supplemental Retirement Plan were reductions as follows: Sara Armbruster, $143,572; David Sylvester, $71,547; Allan Smith, $65,287; Lizbeth O’Shaughnessy, $68,566; Robert Krestakos, $63,790; James Ludwig, $26,772 and James Keane, $87,433, so the amounts are reflected as zero in an unfunded account which was creditedaccordance with an annual rate of return.
| |
(4) | The amounts shown in this column represent the net change in actuarial present value of the applicable officer’s accumulated benefit under our Executive Supplemental Retirement Plan. These changes are primarily driven by the applicable officer's period of service and changes in the terms of the plan, compensation and the discount rate and reflect the following: (a) in fiscal year 2016, an increase in the discount rate from 3.2% to 3.7%, (b) in fiscal year 2015, a decrease in the discount rate from 3.6% to 3.2% and changes to the terms of the plan, and (c) in fiscal year 2014, an increase in the discount rate from 3.1% to 3.6%. For fiscal year 2016, the change in actuarial present value of the accumulated benefit under the Executive Supplemental Retirement Plan for Sara E. Armbruster was a reduction of $16,340, so the amount is reflected as zero in accordance with the SEC'sthe SEC’s rules and regulations. Eddy F. Schmitt is not a participant in the Executive Supplemental Retirement Plan. Earnings under our Deferred Compensation Plan are not included because they are not earned at a preferential rate. |
| |
(5) | The amounts shown in this column for fiscal year 2016 include the following:
|
|
| | | | | | | | | | | |
| Name | Company Contributions under Retirement or Pension Plans | Life Insurance Premiums | Total All Other Compensation |
| | | | | | |
| James P. Keane | $ | 142,308 |
| | $ | 148 |
| | $ | 142,456 |
|
| David C. Sylvester | $ | 80,946 |
| | $ | 148 |
| | $ | 81,094 |
|
| Lizbeth S. O'Shaughnessy | $ | 79,542 |
| | $ | 148 |
| | $ | 79,690 |
|
| Sara E. Armbruster | $ | 57,917 |
| | $ | 148 |
| | $ | 58,065 |
|
| Eddy F. Schmitt | $ | 59,213 |
| | $ | 148 |
| | $ | 59,361 |
|
The amounts shown in the Company Contributions under Retirement or Pension Plans column of the above table reflect a higher rate of contributions made under our Restoration Retirement Plan and Deferred Compensation Plan are not included because they are not earned at a preferential rate.
(5)The amounts shown in this column for fiscal year 2016 compared to prior years.
2022 include the following:
| | | | | | | | | | | | | | | | | | | | | | | |
| Name | Company Contributions under Retirement or Pension Plans | Life Insurance Premiums | Other | Total All Other Compensation |
| | | | | | | |
| Sara E. Armbruster | $ | 46,296 | | | $ | 560 | | | $ | 60,165 | | | $ | 107,021 | |
| David C. Sylvester | $ | 51,903 | | | $ | 600 | | | $ | — | | | $ | 52,503 | |
| Allan W. Smith, Jr. | $ | 32,739 | | | $ | 494 | | | $ | — | | | $ | 33,233 | |
| Lizbeth S. O’Shaughnessy | $ | 40,268 | | | $ | 593 | | | $ | — | | | $ | 40,861 | |
| Robert G. Krestakos | $ | 28,100 | | | $ | 475 | | | $ | — | | | $ | 28,575 | |
| James N. Ludwig | $ | 23,170 | | | $ | 376 | | | $ | 407,140 | | | $ | 430,686 | |
| Eddy F. Schmitt | $ | 30,580 | | | $ | 486 | | | $ | — | | | $ | 31,066 | |
| James P. Keane | $ | 122,996 | | | $ | 500 | | | $ | 2,135 | | | $ | 125,631 | |
For Sara Armbruster, the amount shown in the “Other” column relates to a home security system and monitoring. For James Ludwig, the amount shown in the “Other” column represents the amounts payable to him under the Voluntary Mutual Separation Agreement described in Compensation Discussion and Analysis on page 44 under the heading “Severance and Change in Control Benefits.” For James Keane, the amount shown in the “Other” column represents the amount reimbursed for the payment of taxes related to a Steelcase chair we gave Mr. Keane in connection with his retirement.
(6) James Ludwig’s employment with us ended on December 31, 2021.
(7) Eddy Schmitt served as an executive officer until October 3, 2021, but he continues to serve as our Senior Vice President, Americas.
(8) James Keane served as our President and CEO until October 3, 2021, and he then served as our Vice Chair until he retired on January 7, 2022.
Incentive Compensation Awards
The following table shows the awards granted to the named executive officers during fiscal year 20162022 under our incentive compensation plans.
Fiscal Year 20162022 Grants of Plan-Based Awards
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name | Grant
Date (1) | Approval Date (1) | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | Estimated Future Payouts Under Equity Incentive
Plan Awards | All Other Stock Awards | Grant Date Fair Value of Stock and Option Awards |
| Threshold | Target | Maximum | Threshold | Target | Maximum |
| | | | | | | | | | |
| Sara E. Armbruster | 4/15/21 (2) | 4/15/21 | $ | 164,971 | | $ | 671,932 | | $ | 1,256,027 | | | | | | |
| 4/15/21 (3) | 4/9/19 | | | | 1,720 | | 5,734 | | 13,761 | | | $ | 76,148 | |
| 4/15/21 (4) | 5/4/20 | | | | 2,870 | | 9,568 | | 22,963 | | | $ | 133,952 | |
| 4/15/21 (5) | 4/15/21 | | | | 6,549 | | 21,833 | | 52,399 | | | $ | 339,503 | |
| 4/15/21 (6) | 4/15/21 | | | | | | | 43,700 | | $ | 631,465 | |
| 4/15/21 (6) | 4/15/21 | | | | | | | 100,000 | | $ | 1,445,000 | |
| 10/13/21(6) | 10/13/21 | | | | | | | 150,000 | | $ | 1,836,000 | |
| | | | | | | | | | |
| David C. Sylvester | 4/15/21 (2) | 4/15/21 | $ | 118,389 | | $ | 473,557 | | $ | 1,021,107 | | | | | | |
| 4/15/21 (3) | 4/9/19 | | | | 3,829 | | 12,766 | | 30,638 | | | $ | 169,532 | |
| 4/15/21 (4) | 5/4/20 | | | | 6,399 | | 21,333 | | 51,199 | | | $ | 298,662 | |
| 4/15/21 (5) | 4/15/21 | | | | 4,190 | | 13,967 | | 33,520 | | | $ | 217,187 | |
| 4/15/21 (6) | 4/15/21 | | | | | | | 28,000 | | $ | 404,600 | |
| | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name | Grant
Date (1) | Approval Date (1) | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | Estimated Future Payouts Under Equity Incentive
Plan Awards | All Other Stock Awards | Grant Date Fair Value of Stock and Option Awards |
| Threshold | Target | Maximum | Threshold | Target | Maximum |
| Allan W. Smith, Jr. | 4/15/21 (2) | 4/15/21 | $ | 65,173 | | $ | 311,368 | | $ | 679,306 | | | | | | |
| 4/15/21 (3) | 4/9/19 | | | | 1,519 | | 5,066 | | 12,158 | | | $ | 67,276 | |
| 4/15/21 (4) | 5/4/20 | | | | 2,540 | | 8,468 | | 20,323 | | | $ | 118,552 | |
| 4/15/21 (5) | 4/15/21 | | | | 2,160 | | 7,200 | | 17,280 | | | $ | 111,960 | |
| 4/15/21 (6) | 4/15/21 | | | | | | | 14,400 | | $ | 208,080 | |
| 9/22/21 (6) | 9/22/21 | | | | | | | 18,500 | | $ | 246,975 | |
| | | | | | | | | | |
| Lizbeth S. O’Shaughnessy | 4/15/21 (2) | 4/15/21 | $ | 50,336 | | $ | 302,014 | | $ | 666,949 | | | | | | |
| 4/15/21 (3) | 4/9/19 | | | | 2,359 | | 7,866 | | 18,878 | | | $ | 104,460 | |
| 4/15/21 (4) | 5/4/20 | | | | 3,950 | | 13,168 | | 31,603 | | | $ | 184,352 | |
| 4/15/21 (5) | 4/15/21 | | | | 2,589 | | 8,633 | | 20,719 | | | $ | 134,243 | |
| 4/15/21 (6) | 4/15/21 | | | | | | | 17,300 | | $ | 249,985 | |
| | | | | | | | | | |
| Robert G. Krestakos | 4/15/21 (2) | 4/15/21 | $ | 30,481 | | $ | 203,209 | | $ | 472,462 | | | | | | |
| 4/15/21 (3) | 4/9/19 | | | | 1,170 | | 3,900 | | 9,360 | | | $ | 51,792 | |
| 4/15/21 (4) | 5/4/20 | | | | 1,950 | | 6,500 | | 15,600 | | | $ | 91,000 | |
| 4/15/21 (5) | 4/15/21 | | | | 1,280 | | 4,267 | | 10,240 | | | $ | 66,352 | |
| 4/15/21 (6) | 4/15/21 | | | | | | | 8,500 | | $ | 122,825 | |
| | | | | | | | | | |
| James N. Ludwig | 4/15/21 (2) | 4/15/21 | $ | 24,462 | | $ | 163,082 | | $ | 379,166 | | | | | | |
| 4/15/21 (3) | 4/9/19 | | | | 970 | | 3,234 | | 7,761 | | | $ | 42,948 | |
| 4/15/21 (4) | 5/4/20 | | | | 1,620 | | 5,400 | | 12,960 | | | $ | 75,600 | |
| 4/15/21 (5) | 4/15/21 | | | | 1,059 | | 3,533 | | 8,479 | | | $ | 54,938 | |
| 4/15/21 (6) | 4/15/21 | | | | | | | 7,100 | | $ | 102,595 | |
| | | | | | | | | | |
| Eddy F. Schmitt | 4/15/21 (2) | 4/15/21 | $ | 31,114 | | $ | 207,429 | | $ | 482,272 | | | | | | |
| 4/15/21 (3) | 4/9/19 | | | | 1,489 | | 4,966 | | 11,918 | | | $ | 65,948 | |
| 4/15/21 (4) | 5/4/20 | | | | 2,490 | | 8,300 | | 19,920 | | | $ | 116,200 | |
| 4/15/21 (5) | 4/15/21 | | | | 1,640 | | 5,467 | | 13,120 | | | $ | 85,012 | |
| 4/15/21 (6) | 4/15/21 | | | | | | | 10,900 | | $ | 157,505 | |
| 4/15/21 (6) | 4/15/21 | | | | | | | 8,500 | | $ | 122,825 | |
| | | | | | | | | | |
| James P. Keane | 4/15/21 (2) | 4/15/21 | $ | 322,452 | | $ | 1,105,549 | | $ | 2,072,906 | | | | | | |
| 4/15/21 (3) | 4/11/19 | | | | 15,000 | | 50,000 | | 120,000 | | | $ | 664,000 | |
| 4/15/21 (4) | 5/4/20 | | | | 27,660 | | 92,200 | | 221,280 | | | $ | 1,290,800 | |
| 4/15/21 (5) | 4/15/21 | | | | 20,940 | | 69,800 | | 167,520 | | | $ | 1,085,390 | |
| 4/15/21 (6) | 4/15/21 | | | | | | | 139,600 | | $ | 2,017,220 | |
_____________
(1)The grant date represents the date on which the applicable award was granted under ASC Topic 718, and the approval date represents the date on which the applicable award was approved by the Compensation Committee (or, as applicable, the date on which the award was ratified by the Board of Directors).
(2)These lines show the potential payout opportunity for MIP awards for fiscal year 2022. Following the end of fiscal year 2022, actual performance resulted in these awards being earned as follows and paid in cash: (a) the portion based on ROIC performance was earned at 10% of target, (b) the portion based on net income performance was earned at 0% of target and (c) the portion based on DEI performance was earned at 100% of target. Our CEO did not modify the size of the target awards for the portion earned based on ROIC performance. The actual amounts earned in fiscal year 2022 were: Sara Armbruster, $154,062; David Sylvester, $76,953; Allan Smith, $58,832; Lizbeth O’Shaughnessy, $65,436; Robert Krestakos, $32,513; James Ludwig, $26,093; Eddy Schmitt, $33,189; and James Keane, $211,897.
(3)These lines show one-third of the performance unit awards made under our ICP which are to be earned based on a three-year average payout multiple for performance in three consecutive one-year
|
| | | | | | | | | | | | | | | | | | | | | |
| Name | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | Estimated Future Payouts Under Equity Incentive Plan Awards | All Other Stock Awards | Grant Date Fair Value of Stock and Option Awards |
| Threshold | Target | Maximum | Threshold | Target | Maximum |
| | | | | | | | | | |
| James P. Keane | 4/15/2015 (1) | $ | — |
| $ | 867,857 |
| $ | 1,735,714 |
| | | | | |
| 4/15/2015 (2) | | | | — |
| 63,750 |
| 127,500 |
| | $ | 1,195,950 |
|
| 4/15/2015 (3) | | | | 31,875 |
| 63,750 |
| 127,500 |
| | $ | 1,553,588 |
|
| 4/15/2015 (4) | | | | | | | 42,500 |
| $ | 797,300 |
|
| | | | | | | | | | |
| David C. Sylvester | 4/13/2015 (1) | $ | — |
| $ | 409,857 |
| $ | 819,714 |
| | | | | |
| 4/13/2015 (2) | | | | — |
| 16,616 |
| 33,232 |
| | $ | 309,224 |
|
| 4/13/2015 (3) | | | | 8,308 |
| 16,616 |
| 33,232 |
| | $ | 398,119 |
|
| 4/13/2015 (4) | | | | | | | 16,368 |
| $ | 304,608 |
|
| | | | | | | | | | |
| Lizbeth S. O'Shaughnessy | 4/13/2015 (1) | $ | — |
| $ | 258,210 |
| $ | 516,420 |
| | | | | |
| 4/13/2015 (2) | | | | — |
| 10,083 |
| 20,166 |
| | $ | 187,645 |
|
| 4/13/2015 (3) | | | | 5,042 |
| 10,083 |
| 20,166 |
| | $ | 241,589 |
|
| 4/13/2015 (4) | | | | | | | 9,934 |
| $ | 184,872 |
|
| | | | | | | | | | |
| Sara E. Armbruster | 4/13/2015 (1) | $ | — |
| $ | 250,041 |
| $ | 500,082 |
| | | | | |
| 4/13/2015 (2) | | | | — |
| 7,571 |
| 15,142 |
| | $ | 140,896 |
|
| 4/13/2015 (3) | | | | 3,786 |
| 7,571 |
| 15,142 |
| | $ | 181,401 |
|
| 4/13/2015 (4) | | | | | | | 7,458 |
| $ | 138,793 |
|
| | | | | | | | | | |
| Eddy F. Schmitt (5) | 4/13/2015 (1) | $ | — |
| $ | 181,432 |
| $ | 362,864 |
| | | | | |
| 4/13/2015 (2) | | | | — |
| 3,316 |
| 6,632 |
| | $ | 61,711 |
|
| 4/13/2015 (3) | | | | 1,658 |
| 3,316 |
| 6,632 |
| | $ | 79,451 |
|
| 4/13/2015 (4) | | | | | | | 3,268 |
| $ | 60,817 |
|
| 7/14/2015 (2) | | | | — |
| 1,298 |
| 2,596 |
| | $ | 24,208 |
|
| 7/14/2015 (3) | | | | 649 |
| 1,298 |
| 2,596 |
| | $ | 31,308 |
|
| 7/14/2015 (4) | | | | | | | 1,280 |
| $ | 23,872 |
|
(4)These lines show one-third of the performance unit awards made under our ICP which are to be earned based on a three-year average payout multiple for performance in three consecutive one-year performance periods from fiscal year 2021 through fiscal year 2023 and modified based on our TSR performance relative to a peer group over the three-year period. The amounts shown represent one-third of such awards as the performance measures and targets for only the second one-year performance period were approved during fiscal year 2022. The performance measures for fiscal year 2022 for these awards are 75% based on operating income and 25% based on revenue. The grant date fair value was calculated using a Monte Carlo simulation fair value on the date of grant multiplied by the target number of shares that may be earned.
(5)These lines show one-third of the performance unit awards made under our ICP which are to be earned based on a three-year average payout multiple for performance in three consecutive one-year performance periods from fiscal year 2022 through fiscal year 2024 and modified based on our TSR performance relative to a peer group over the three-year period. The amounts shown represent one-third of such awards as the performance measures and targets for only the first one-year performance period were approved during fiscal year 2022. The performance measures for fiscal year 2022 for these awards are 75% based on operating income and 25% based on revenue. The grant date fair value was calculated using a Monte Carlo simulation fair value on the date of grant multiplied by the target number of shares that may be earned.
| |
(1) | These lines show the potential payout opportunity for short-term MIP awards for fiscal year 2016. Following the end of fiscal year 2016, actual performance resulted in these awards being earned at 148% of target and paid in cash. The actual amounts earned were: James P. Keane, $1,284,429; David C. Sylvester, $606,589; Lizbeth S. O'Shaughnessy, $382,151; Sara E. Armbruster, $370,061; and Eddy F. Schmitt, $268,520.
|
| |
(2) | These lines show performance unit awards made under our Incentive Compensation Plan which are to be earned based on three-year average ROIC performance.(6)These lines show restricted unit awards made under our ICP. The grant date fair value was calculated using the closing price of our Class A Common Stock on the grant date multiplied by the target number of shares that may be earned. |
| |
(3) | These lines show performance unit awards made under our Incentive Compensation Plan which are to be earned based on three-year TSR performance relative to a peer group. The grant date fair value was calculated using a Monte Carlo simulation fair value on the date of grant multiplied by the target number of shares that may be earned. |
| |
(4) | These lines show restricted unit awards, made under our Incentive Compensation Plan. The grant date fair value was calculated using the closing price of our Class A Common Stock on the grant date multiplied by the number of shares underlying the restricted units. |
| |
(5) | A second set of equity awards was granted to Eddy F. Schmitt on July 14, 2015 because there was an error in the calculation of the number of shares included in the equity awards granted to him on April 13, 2015, which resulted in less shares being granted than was intended by our Compensation Committee. After becoming aware of the error, a second set of awards was granted to cover the shortfall. |
MIP awards
The short-term MIP awards granted for fiscal year 2016 were based on ROIC achievement compared to a target of 11%. In March 2016, the Compensation Committee certified the performance results, and the awards were earned at 148% of target.
Performance unit awards
In fiscal year 2016, each of the named executive officers was granted performance unit awards as described below.
The first set of performance unit awards granted in fiscal year 2016 will be earned based on the achievement of our average ROIC over fiscal years 2016 through 2018. ROIC equals our net operating profit after tax divided by average invested capital. The levels of average ROIC performance that would result in the award of threshold, target or maximum number of shares are as shown in the following table, with interpolation used in the event that the actual result does not fall directly on a percentage listed in the table. If average ROIC performance falls below the threshold, no shares would be earned.
|
| | | |
| Performance Measure | Threshold | Target | Maximum |
| | | | |
| Three-Year Average ROIC | 7.0% | 12.0% | 17.0% |
The second set of performance unit awards granted in fiscal year 2016 will be earned based on the achievement of certain TSR levels for fiscal years 2016 through 2018 relative to the companies within the S&P MidCap 400 Index. TSR includes the change in trading price and dividends paid during the performance period, and the trading price change is calculated using a 90-day average immediately prior to the beginning and end of the performance period. The levels of relative TSR performance that would result in the award of the threshold, target or maximum number of shares are as shown in the following table, with interpolation used in the event that the actual percentile does not fall directly on a percentile listed in the table. If relative TSR performance falls below the threshold, no shares would be earned.
|
| | | |
Performance Measure | Threshold | Target | Maximum |
| | | |
Relative TSR | 30th percentile
| 50th percentile
| 80th percentile
|
At the end of fiscal year 2018, the number of performance units, if any, earned under each set of performance units will be settled in shares of our Class A Common Stock. Dividend equivalents will be paid on the number of shares actually earned at the end of the performance period.
Restricted unit awards
Each of the named executive officers received a restricted unit award in fiscal year 2016 which will vest in full and be settled in shares of our Class A Common Stock at the end of fiscal year 2018. Dividend equivalents will be paid on the grant date multiplied by the number of shares underlying the restricted units.
The material terms of the MIP awards, performance units and restricted units duringreflected in the vesting period.Summary Compensation Table can be found in Compensation Discussion and Analysis on pages 32-42 under the heading "Incentive Compensation Awards."
Outstanding Equity Awards
The following table shows the equity awards granted to the named executive officers under our Incentive Compensation PlanICP which remained outstanding at the end of fiscal year 2016,2022, consisting of
unvested restricted units and unearned performance units. The market values shown in the table are based on the closing price of our Class A Common Stock at the end of fiscal year 20162022 of $12.54$12.39 per share.
Fiscal Year 20162022 Outstanding Equity Awards at Fiscal Year-End
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| | | | | | | | | | | |
Name | Stock Awards |
| Number of Shares or Units of Stock That Have Not Vested | 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 |
| | | | | | | | |
| James P. Keane: | | | | | | | |
| Restricted units | 42,500 (1) | | $ | 532,950 |
| | | | |
| Restricted units | 42,500 (2) | | $ | 532,950 |
| | | | |
| Restricted units | 50,000 (3) | | $ | 627,000 |
| | | | |
| Performance units | | | | | 127,500 (4) | | $ | 1,598,850 |
|
| Performance units | | | | | 127,500 (5) | | $ | 1,598,850 |
|
| Performance units | | | | | 127,500 (6) | | $ | 1,598,850 |
|
| Performance units | | | | | 63,750 (7) | | $ | 799,425 |
|
| | | | | | | | |
| David C. Sylvester: | | | | | | | |
| Restricted units | 20,460 (1) | | $ | 256,568 |
| | | | |
| Restricted units | 16,368 (2) | | $ | 205,255 |
| | | | |
| Performance units | | | | | 41,540 (4) | | $ | 520,912 |
|
| Performance units | | | | | 41,540 (5) | | $ | 520,912 |
|
| Performance units | | | | | 33,232 (6) | | $ | 416,729 |
|
| Performance units | | | | | 16,616 (7) | | $ | 208,365 |
|
| | | | | | | | |
| Lizbeth S. O'Shaughnessy: | | | | | | | |
| Restricted units | 11,451 (1) | | $ | 143,596 |
| | | | |
| Restricted units | 9,934 (2) | | $ | 124,572 |
| | | | |
| Performance units | | | | | 23,248 (4) | | $ | 291,530 |
|
| Performance units | | | | | 23,248 (5) | | $ | 291,530 |
|
| Performance units | | | | | 20,166 (6) | | $ | 252,882 |
|
| Performance units | | | | | 10,083 (7) | | $ | 126,441 |
|
| | | | | | | | |
| Sara E. Armbruster: | | | | | | | |
| Restricted units | 9,339 (1) | | $ | 117,111 |
| | | | |
| Restricted units | 7,458 (2) | | $ | 93,523 |
| | | | |
| Performance units | | | | | 18,960 (4) | | $ | 237,758 |
|
| Performance units | | | | | 18,960 (5) | | $ | 237,758 |
|
| Performance units | | | | | 15,142 (6) | | $ | 189,881 |
|
| Performance units | | | | | 7,571 (7) | | $ | 94,940 |
|
| | | | | | | | |
| Eddy F. Schmitt: | | | | | | | |
| Restricted units | 5,445 (1) | | $ | 68,280 |
| | | | |
| Restricted units | 4,548 (2) | | $ | 57,032 |
| | | | |
| Performance units | | | | | 11,054 (4) | | $ | 138,617 |
|
| Performance units | | | | | 11,054 (5) | | $ | 138,617 |
|
| Performance units | | | | | 9,228 (6) | | $ | 115,719 |
|
| Performance units | | | | | 4,614 (7) | | $ | 57,860 |
|
| | | | | | | | | | | | | | | | | | | | | | | |
(1)
Name | These restricted units will vest at the endStock Awards |
Number of fiscal year 2017.Shares or Units of Stock That Have Not Vested | 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 |
| | | | | | | |
(2)Sara E. Armbruster | These restricted units will vest at the end of fiscal year 2018. |
| | | | | |
(3)Restricted units | These restricted units will vest on October 9, 2016.19,200 (1) |
| $ | 237,888 | | | | | |
(4)Restricted units | These performance units will be earned based on our three-year average ROIC performance over fiscal years 2015 through 2017 and, if earned, will vest in full at the end of fiscal year 2017. Because the performance as of the end of fiscal year 2016 was above the target performance goal for these awards, the number of shares and market values shown in the Equity Incentive Plan Awards columns are based upon the maximum number of shares under the award in accordance with the SEC’s rules and regulations. The maximum number of shares will only be earned if our three-year average ROIC performance over the performance period equals or exceeds 16%.43,700 (2) |
| $ | 541,443 | | | | | |
(5)Restricted units | These performance units will be earned based on our TSR performance relative to a peer group over fiscal years 2015 through 2017 and, if earned, will vest in full at the end of fiscal year 2017. Because the performance as of the end of fiscal year 2016 was above the target performance goal for these awards, the number of shares and market values shown in the Equity Incentive Plan Awards columns are based upon the maximum number of shares under the award in accordance with the SEC’s rules and regulations. The maximum number of shares will only be earned if our TSR performance equals or exceeds the 80th percentile of the peer group.100,000 (3) |
| $ | 1,239,000 | | | | | |
(6)Restricted units | These performance units will be earned based on our three-year average ROIC performance over fiscal years 2016 through 2018 and, if earned, will vest in full at the end of fiscal year 2018. Because the performance as of the end of fiscal year 2016 was above the target performance goal for these awards, the number of shares and market values shown in the Equity Incentive Plan Awards columns are based upon the maximum number of shares under the award in accordance with the SEC’s rules and regulations. The maximum number of shares will only be earned if our three-year average ROIC performance over the performance period equals or exceeds 17%.150,000 (4) |
| $ | 1,858,500 | | | | | |
| Performance units | | | | | 19,134 (7) | These performance | $ | 237,070 | |
Performance units will be earned based on our TSR performance relative to a peer group over fiscal years 2016 through 2018 and, if earned, will vest in full at the end | | | | | 21,833 (8) | | $ | 270,511 | |
| | | | | | | |
| David C. Sylvester | | | | | | | |
| Restricted units | 42,700 (1) | | $ | 529,053 | | | | | |
| Restricted units | 28,000 (2) | | $ | 346,920 | | | | | |
| Performance units | | | | | 42,666 (7) | | $ | 528,632 | |
| Performance units | | | | | 13,967 (8) | | $ | 173,051 | |
| | | | | | | |
| Allan W. Smith, Jr. | | | | | | | |
| Restricted units | 16,900 (1) | | $ | 209,391 | | | | | |
| Restricted units | 14,400 (2) | | $ | 178,416 | | | | | |
| Restricted units | 18,500 (5) | | $ | 229,215 | | | | | |
| Performance units | | | | | 16,934 (7) | | $ | 209,812 | |
| Performance units | | | | | 7,200 (8) | | $ | 89,208 | |
| | | | | | | |
| Lizbeth S. O’Shaughnessy | | | | | | | |
| Restricted units | 26,300 (1) | | $ | 325,857 | | | | | |
| Restricted units | 17,300 (2) | | $ | 214,347 | | | | | |
| Performance units | | | | | 26,334 (7) | | $ | 326,278 | |
| Performance units | | | | | 8,633 (8) | | $ | 106,963 | |
| | | | | | | |
| Robert G. Krestakos | | | | | | | |
| Restricted units | 13,000 (1) | | $ | 161,070 | | | | | |
| Restricted units | 8,500 (2) | | $ | 105,315 | | | | | |
| Performance units | | | | | 13,000 (7) | | $ | 161,070 | |
| Performance units | | | | | 4,267 (8) | | $ | 52,868 | |
| | | | | | | |
| James N. Ludwig | | | | | | | |
| Restricted units | 10,800 (1) | | $ | 133,812 | | | | | |
| Restricted units | 7,100 (2) | | $ | 87,969 | | | | | |
| Performance units | | | | | 10,800 (7) | | $ | 133,812 | |
| Performance units | | | | | 3,533 (8) | | $ | 43,774 | |
| | | | | | | |
| Eddy F. Schmitt | | | | | | | |
| Restricted units | 16,600 (1) | | $ | 205,674 | | | | | |
| Restricted units | 10,900 (2) | | $ | 135,051 | | | | | |
| Restricted units | 8,500 (6) | | $ | 105,315 | | | | | |
| Performance units | | | | | 16,600 (7) | | $ | 205,674 | |
| Performance units | | | | | 5,467 (8) | | $ | 67,736 | |
| | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
Name | Stock Awards |
Number of fiscal year 2018. Because the performance asShares or Units of the endStock That Have Not Vested | Market Value of fiscal year 2016 was below the target performance goal for these awards, the numberShares or Units of shares and market values shown in the Stock That Have Not Vested | Equity Incentive Plan Awards columns are based upon the target numberAwards: Number of shares under the award in accordance with the SEC’s rules and regulations. The target numberUnearned Shares, Units or Other Rights That Have Not Vested | Equity Incentive Plan Awards: Market or Payout Value of shares will only be earned if our TSR performance equalsUnearned Shares, Units or exceeds the 50th percentile of the peer group.Other Rights That Have Not Vested |
| James P. Keane | | | | | | | |
| Restricted units | 184,400 (1) | | $ | 2,284,716 | | | | | |
| Restricted units | 139,600 (2) | | $ | 1,729,644 | | | | | |
| Performance units | | | | | 184,400 (7) | | $ | 2,284,716 | |
| Performance units | | | | | 69,800 (8) | | $ | 864,822 | |
_____________
(1)These restricted units will vest at the end of fiscal year 2023.
(2)These restricted units will vest at the end of fiscal year 2024.
(3)These restricted units will vest on April 15, 2024.
(4)These restricted units will vest in thirds on October 13, 2022, October 13, 2023 and October 14, 2024.
(5)These restricted units will vest on September 22, 2024.
(6)These restricted units will vest on April 15, 2022.
(7)These performance units will be earned based on a three-year average payout multiple for performance in three consecutive one-year performance periods from fiscal year 2021 through fiscal year 2023 and modified based on our TSR performance relative to a peer group over fiscal years 2021 through 2023 and, if earned, will vest in full at the end of fiscal year 2023. The amounts shown represent two-thirds of such awards as the performance measures and targets for only the first two one-year performance periods were established by the end of fiscal year 2022. Because the performance as of the end of fiscal year 2022 was below the target performance goal for these awards, the number of shares and market values shown in the Equity Incentive Plan Awards columns are based upon the target number of shares under the award in accordance with the SEC’s rules and regulations.
(8)These performance units will be earned based on a three-year average payout multiple for performance in three consecutive one-year performance periods from fiscal year 2022 through fiscal year 2024 and modified based on our TSR performance relative to a peer group over fiscal years 2022 through 2024 and, if earned, will vest in full at the end of fiscal year 2024. The amounts shown represent one-third of such awards as the performance measures and targets for only the first one-year performance period were established by the end of fiscal year 2022. Because the performance as of the end of fiscal year 2022 was below target performance for these awards, the number of shares and market values shown in the Equity Incentive Plan Awards columns are based upon the target number of shares under the award in accordance with the SEC’s rules and regulations.
Stock Award Vesting
The following table shows the stock awards (consisting of restricted units and/orand performance units) previously granted to the named executive officers which vested during fiscal year 2016. The named executive officers did not exercise any stock options during fiscal year 2016.
Fiscal Year 2016 Stock Vested2022.
|
| | | | | | |
| Name | Stock Awards |
| Number of Shares Acquired on Vesting | Value Realized on Vesting (1) |
| | | | |
| James P. Keane | 238,710 |
| | $ | 4,175,236 |
|
| David C. Sylvester | 72,076 |
| | $ | 1,020,273 |
|
| Lizbeth S. O'Shaughnessy | 39,919 |
| | $ | 565,074 |
|
| Sara E. Armbruster | 51,008 |
| | $ | 722,045 |
|
| Eddy F. Schmitt | 7,390 |
| | $ | 108,221 |
|
| |
(1) | The amounts shown in this column are calculated by multiplying (a) the closing market price of our Class A Common Stock on the date of vesting by (b) the number of shares vested. These values do not reflect any deduction for shares forfeited to cover applicable tax withholding. |
Fiscal Year 2022 Stock Vested
| | | | | | | | | | | |
| Name | Stock Awards |
| Number of Shares Acquired on Vesting | Value Realized on Vesting (1) |
| | | |
| Sara E. Armbruster | 23,540 | | | $ | 288,891 | |
| David C. Sylvester | 52,310 | | | $ | 641,955 | |
| Allan W. Smith, Jr. | 23,740 | | | $ | 291,691 | |
| Lizbeth S. O’Shaughnessy | 32,320 | | | $ | 396,645 | |
| Robert G. Krestakos | 17,990 | | | $ | 221,012 | |
| James N. Ludwig | 15,290 | | | $ | 187,881 | |
| Eddy F. Schmitt | 26,430 | | | $ | 325,069 | |
| James P. Keane | 205,000 | | | $ | 2,515,800 | |
_____________
(1)The amounts shown in this column are calculated by multiplying (a) the closing market price of our Class A Common Stock on the date of vesting by (b) the number of shares vested. These values do not reflect any deduction for shares forfeited to cover applicable tax withholding.
Pension Benefits
The following table shows information regarding eachour only plan that provides for payments or other benefits to the named executive officers at, following or in connection with retirement.
Fiscal Year 20162022 Pension Benefits
| | | | | | | | | | | | | | |
| Name | Plan Name | Number of Years Credited Service (1) | Present Value of Accumulated Benefit (2) |
| | | | |
| Sara E. Armbruster | Executive Supplemental Retirement Plan | 9 | | $ | 1,704,723 | |
| David C. Sylvester | Executive Supplemental Retirement Plan | 14 | | $ | 2,230,317 | |
| Allan W. Smith, Jr. | Executive Supplemental Retirement Plan | 9 | | | $ | 1,904,468 | |
| Lizbeth S. O’Shaughnessy | Executive Supplemental Retirement Plan | 11 | | $ | 2,075,146 | |
| Robert G. Krestakos | Executive Supplemental Retirement Plan | 10 | | $ | 1,826,555 | |
| James N. Ludwig | Executive Supplemental Retirement Plan | 10 | | $ | 1,764,676 | |
| Eddy F. Schmitt | None | — | | | $ | — | |
| James P. Keane | Executive Supplemental Retirement Plan | 20 | | | $ | 3,057,123 | |
_____________
(1)The numbers shown in this column represent the number of full years the executive officer has participated in the plan as of the end of fiscal year 2022. Benefits under this plan are based on age and years of service with our company, as well as a vesting schedule, as described in the narrative following this table.
(2)The amounts shown in this column represent the actuarial present value of the executive officer’s accumulated benefits under the plan as of the end of fiscal year 2022. These amounts were calculated using the same assumptions used for financial reporting purposes under generally accepted accounting principles, which assumptions include that retirement will occur at normal retirement age or, if earlier, the time when retirement benefits are fully vested and the executive officer becomes eligible for early retirement. |
| | | | | |
| Name | Plan Name | Number of Years Credited Service (1) | Present Value of Accumulated Benefit (2) |
| | | | |
| James P. Keane | Executive Supplemental Retirement Plan | 14 | $ | 2,689,579 |
|
| David C. Sylvester | Executive Supplemental Retirement Plan | 8 | $ | 1,887,950 |
|
| Lizbeth S. O'Shaughnessy | Executive Supplemental Retirement Plan | 5 | $ | 1,774,065 |
|
| Sara E. Armbruster | Executive Supplemental Retirement Plan | 3 | $ | 1,145,183 |
|
| Eddy F. Schmitt | none | — | $ | — |
|
| |
(1) | The numbers shown in this column represent the number of full years the executive officer has participated in the plan as of the end of fiscal year
2016. Benefits under this plan are based on age and years of service with our company, as well as a vesting schedule, as described in the narrative following this table.
|
| |
(2) | The amounts shown in this column represent the actuarial present value of the executive officer’s accumulated benefits under the plan as of the end of fiscal year 2016. These amounts were calculated using the same assumptions used for financial reporting purposes under generally accepted accounting principles, which assumptions include that retirement will occur at normal retirement age or, if earlier, the time when retirement benefits under the plan may be received without a reduction in benefits.
|
Executive Supplemental Retirement Plan
Our Executive Supplemental Retirement Plan, or SERP, is an unfunded plan that provides certain defined benefits to participants who are approved by the Compensation Committee. Participants do not
make contributions to the SERP, which pays the following benefits following a qualifying retirement, death or total disability:
•five annual payments equal to the sum of (1) 70% of the participant’s average base salary for the three consecutive calendar years through calendar year 2015 or through the participant'sparticipant’s final vesting year, if later, plus (2) $50,000, followed by
•ten annual payments of $50,000.
A participant is eligible for normal retirement under the SERP at age 65. A participant is eligible for early retirement under the SERP when the participant’s age plus years of service with our company equals or exceeds 80. None of the named executive officers meet the requirements for normal or early retirement.
Participants are fully vested in the SERP after seven years of participation in the plan, with partial vesting beginning at 20% after three years of participation and increasing 20% per year thereafter. For example, after five years of participation in the SERP, a participant is 60% vested and would receive payments equal to 60% of the amounts described above if he or shethey died, became totally disabled or qualified for retirement and retired at that point.
A participant is eligible for normal retirement from our company under the SERP at age 65. A participant is eligible for early retirement from our company under the SERP when the participant’s age plus years of service with our company equals or exceeds 80. None of the named executive officers is age 65 or older, but David Sylvester, Allan Smith, Lizbeth O’Shaughnessy and Robert Krestakos meet the requirements for early retirement. James Keane and James Ludwig met the requirements for early retirement at the time of their separations in fiscal year 2022 and will receive benefits beginning in fiscal year 2023.
Deferred Compensation
The following table shows information for fiscal year 20162022 regarding each plan under which compensation may be deferred on a basis that is not tax-qualified.
Fiscal Year 20162022 Nonqualified Deferred Compensation
| | | | | | | | | | | | | | | | | | | | | | | |
| Name | Executive Contributions in Last FY (1) | Registrant Contributions in Last FY (2) | Aggregate Earnings in Last FY (3) | Aggregate Balance at Last FYE (4) |
| | | | | | | |
| Sara E. Armbruster | $ | — | | | $ | 31,796 | | | $ | 30,854 | | | $ | 693,395 | |
| David C. Sylvester | $ | 28,433 | | | $ | 37,403 | | | $ | 46,120 | | | $ | 1,429,172 | |
| Allan W. Smith, Jr. | $ | — | | | $ | 18,239 | | | $ | 20,692 | | | $ | 549,705 | |
| Lizbeth S. O’Shaughnessy | $ | — | | | $ | 25,768 | | | $ | 30,350 | | | $ | 587,473 | |
| Robert G. Krestakos | $ | — | | | $ | 13,600 | | | $ | 4,965 | | | $ | 405,805 | |
| James N. Ludwig | $ | — | | | $ | 9,222 | | | $ | 63,208 | | | $ | 641,836 | |
| Eddy F. Schmitt | $ | — | | | $ | 16,080 | | | $ | (668) | | | $ | 316,473 | |
| James P. Keane | $ | — | | | $ | 113,463 | | | $ | 53,847 | | | $ | 1,971,862 | |
_____________
(1)The amounts shown in this column are the amounts deferred by the officers under our Deferred Compensation Plan. Of the total amount shown, $28,433 for David Sylvester was reported as compensation in fiscal year 2021 in the Summary Compensation Table.
(2)The amounts shown in this column are the amounts we contributed to the officers’ accounts under our Restoration Retirement Plan for fiscal year 2022. All of such amounts are reported as compensation for the officers in fiscal year 2022 in the All Other Compensation column of the Summary Compensation Table.
(3)The amounts shown in this column are the earnings in the officers’ accounts under both our Deferred Compensation Plan and our Restoration Retirement Plan during fiscal year 2022. These amounts are not reported in the Summary Compensation Table because the earnings are not preferential.
|
| | | | | | | | | | | | | | | | | | | |
| Name | Executive Contributions in Last FY (1) | Registrant Contributions in Last FY (2) | Aggregate Earnings in Last FY (3) | Aggregate Withdrawals/Distributions | Aggregate Balance at Last FYE (4) |
| | | | | | | | | | |
| James P. Keane | $ | — |
| | $ | 121,108 |
| | $ | (10,416 | ) | | $ | — |
| | $ | 407,993 |
|
| David C. Sylvester | $ | — |
| | $ | 59,746 |
| | $ | (9,572 | ) | | $ | — |
| | $ | 162,504 |
|
| Lizbeth S. O'Shaughnessy | $ | — |
| | $ | 58,342 |
| | $ | (11,608 | ) | | $ | — |
| | $ | 129,053 |
|
| Sara E. Armbruster | $ | 473 |
| | $ | 36,717 |
| | $ | (14,870 | ) | | $ | — |
| | $ | 196,432 |
|
| Eddy F. Schmitt | $ | — |
| | $ | 38,013 |
| | $ | (5,698 | ) | | $ | — |
| | $ | 69,430 |
|
| |
(1) | The amounts shown in this column are the amounts deferred by the officers under our Deferred Compensation Plan. None of the amounts shown were reported as compensation in fiscal year 2016 in the Summary Compensation Table. |
| |
(2) | The amounts shown in this column are the amounts we contributed to the officers’ accounts under our Restoration Retirement Plan for fiscal year 2016. All of such amounts are reported as compensation for the officers in fiscal year 2016 in the All Other Compensation column of the Summary Compensation Table. We made a credit of $20,287 to the account of Lizbeth S. O'Shaughnessy in our Restoration Retirement Plan which was intended to compensate for benefits lost in connection with changes to our Executive Supplemental Retirement Plan and which will vest five years from the date of credit.
|
| |
(3) | The amounts shown in this column are the earnings in the officers’ accounts under both our Deferred Compensation Plan and our Restoration Retirement Plan. These amounts are not reported in the Summary Compensation Table because the earnings are not preferential. |
| |
(4) | The amounts shown in this column are the combined balance of the applicable executive officer’s accounts under our Deferred Compensation Plan and our Restoration Retirement Plan. Of the amounts contributed to these plans, $143,889 for James P. Keane, $64,590 for David C. Sylvester, $10,400 for Lizbeth S. O'Shaughnessy and $67,164 for Sara E. Armbruster were reported as compensation in Summary Compensation Tables in our proxy statements for previous fiscal years. |
Deferred Compensation Plan
Under our Deferred Compensation Plan, participants may elect to defer up to 50% of their base salary and/or up to 75% of their short-termMIP award under our MIP into an unfunded account with our company on a tax-deferred basis. Our company doesWe do not make any contributions to the Deferred Compensation Plan. Funds deferred under the Deferred Compensation Plan are deemed invested in one or more investment funds selected by the participant and are payable to the participant after termination of employment in either a lump sum or installments, at the election of the participant.
Restoration Retirement Plan
Our Restoration Retirement Plan is a non-qualified defined contribution plan which is unfunded. Participants in our MIP for whom contributions to our Retirement Plan are limited by Section 401(a)(17) of the Internal Revenue Code may participate in the Restoration Retirement Plan. In fiscal year 2016,2022, we made a matching contribution and an annual contribution to each participant'sparticipant’s bookkeeping account under the Restoration Retirement Plan at the same rate of contribution as our Retirement Plan. The
vesting period for our contributions to the Restoration Retirement Plan is two years.employment with us. Participants select from several investment fund options for their accounts under the plan, and the rate of return is based on those selections. Following termination of employment, a participant’s account balance in the Restoration Retirement Plan, to the extent vested, is paid out to the participant either in a lump sum or installments, at the election of the participant.
Termination or Change in Control Payments
The following table shows the estimated payments that would have been made to the named executive officers other than James Ludwig and James Keane if a termination of employment and/or change in control had happened on February 26, 2016,25, 2022, the last day of our fiscal year 2016.2022. Because James Ludwig and James Keane were no longer employed by us as of the end of fiscal year 2022, the table reflects the amounts payable to each of them in connection with, and as of, the date of their termination of employment with us.
The various circumstances under which payments would have been made, have been paid or are payable are categorized as follows:
•Retirement- meaning the officer voluntarily terminated their employment and was eligible for retirement or early retirement benefits under the applicable plan, which generally occurs when the officer’s age plus continuous years of service equals or exceeds 80. Sara Armbruster and Eddy Schmitt were not eligible to receive retirement or early retirement benefits as of February 25, 2022, so we do not present any information about payments that would be made upon retirement to Ms. Armbruster and Mr. Schmitt.
•Death or disability – meaning the officer died or the officer’s employment terminated due to a “disability” or "total“total disability,"” as defined in the applicable plans.
•Termination without cause – meaning we terminated the officer’s employment without “cause,” as defined in the applicable plans.
•Change in control – meaning a “change in control” of our company, as defined in the applicable plans, had taken place, regardless of whether or not the officer’s employment terminated.
•Termination after change in control – meaning the officer’s employment terminated within two years after a change in control either (a) by us or our successor without cause or (b) by the officer for “good reason,” as defined in the applicable plans. The amounts reflected in the following table for a termination after change in control would be reduced by those amounts which had been paid to the officer upon the change in control which preceded his or hertheir termination.
None of the named executive officers were eligible to receive retirement or early retirement benefits as of February 26, 2016.
Potential Payments upon Termination or Change in Control
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name and Triggering Event | Severance Payment (1) | Long-Term Incentive
Awards (2) | SERP (3) | Other
Benefits (4) | Excise Tax Gross Up (5) | Total |
| | | | | | | | | | | |
| Sara E. Armbruster | | | | | | | | | | | |
| Death or disability | $ | — | | | $ | 4,413,396 | | | $ | 2,096,594 | | | $ | — | | | $ | — | | | $ | 6,509,990 | |
| Termination without cause | $ | 3,300,000 | | | $ | 3,876,831 | | | $ | — | | | $ | 39,240 | | | $ | — | | | $ | 7,216,071 | |
| Change in control | $ | — | | | $ | 5,104,985 | | | $ | — | | | $ | — | | | $ | — | | | $ | 5,104,985 | |
| Termination after change in control | $ | 4,950,000 | | | $ | 5,104,985 | | | $ | 1,836,703 | | | $ | 39,240 | | | $ | 2,456,505 | | | $ | 14,387,433 | |
| | | | | | | | | | | |
| David C. Sylvester | | | | | | | | | | | |
| Retirement | $ | — | | | $ | 1,906,377 | | | $ | 2,230,317 | | | $ | — | | | $ | — | | | $ | 4,136,694 | |
| Death or disability | $ | — | | | $ | 1,623,729 | | | $ | 2,230,317 | | | $ | 577,900 | | | $ | — | | | $ | 4,431,946 | |
| Termination without cause | $ | 1,071,000 | | | $ | 1,906,377 | | | $ | 2,230,317 | | | $ | 28,764 | | | $ | — | | | $ | 5,236,458 | |
| Change in control | $ | — | | | $ | 2,268,411 | | | $ | — | | | $ | 577,900 | | | $ | — | | | $ | 2,846,311 | |
| Termination after change in control | $ | 2,142,000 | | | $ | 2,268,411 | | | $ | 2,230,317 | | | $ | 606,664 | | | $ | — | | | $ | 7,247,392 | |
| | | | | | | | | | | |
| Allan W. Smith, Jr. | | | | | | | | | | | |
| Retirement | $ | — | | | $ | 1,073,508 | | | $ | 1,904,468 | | | $ | — | | | $ | — | | | $ | 2,977,976 | |
| Death or disability | $ | — | | | $ | 935,207 | | | $ | 1,904,468 | | | $ | — | | | $ | — | | | $ | 2,839,675 | |
| Termination without cause | $ | 900,000 | | | $ | 1,073,508 | | | $ | 1,904,468 | | | $ | 34,362 | | | $ | — | | | $ | 3,912,338 | |
| Change in control | $ | — | | | $ | 1,233,895 | | | $ | — | | | $ | — | | | $ | — | | | $ | 1,233,895 | |
| Termination after change in control | $ | 1,800,000 | | | $ | 1,233,895 | | | $ | 1,904,468 | | | $ | 34,362 | | | $ | — | | | $ | 4,972,725 | |
| | | | | | | | | | | |
| Lizbeth S. O’Shaughnessy | | | | | | | | | | | |
| Retirement | $ | — | | | $ | 1,176,537 | | | $ | 2,075,146 | | | $ | — | | | $ | — | | | $ | 3,251,683 | |
| Death or disability | $ | — | | | $ | 1,001,883 | | | $ | 2,075,146 | | | $ | — | | | $ | — | | | $ | 3,077,029 | |
| Termination without cause | $ | 808,800 | | | $ | 1,176,537 | | | $ | 2,075,146 | | | $ | 35,478 | | | $ | — | | | $ | 4,095,961 | |
| Change in control | $ | — | | | $ | 1,400,114 | | | $ | — | | | $ | — | | | $ | — | | | $ | 1,400,114 | |
| Termination after change in control | $ | 1,617,600 | | | $ | 1,400,114 | | | $ | 2,075,146 | | | $ | 35,478 | | | $ | — | | | $ | 5,128,338 | |
| | | | | | | | | | | |
| Robert G. Krestakos | | | | | | | | | | | |
| Retirement | $ | — | | | $ | 580,657 | | | $ | 1,826,555 | | | $ | — | | | $ | — | | | $ | 2,407,212 | |
| Death or disability | $ | — | | | $ | 494,358 | | | $ | 1,826,555 | | | $ | — | | | $ | — | | | $ | 2,320,913 | |
| Termination without cause | $ | 613,110 | | | $ | 580,657 | | | $ | 1,826,555 | | | $ | 32,382 | | | $ | — | | | $ | 3,052,704 | |
| Change in control | $ | — | | | $ | 691,078 | | | $ | — | | | $ | — | | | $ | — | | | $ | 691,078 | |
| Termination after change in control | $ | 1,226,220 | | | $ | 691,078 | | | $ | 1,826,555 | | | $ | 32,382 | | | $ | — | | | $ | 3,776,235 | |
| | | | | | | | | | | |
| James N. Ludwig | $ | 388,000 | | | $ | 457,265 | | | $ | 1,756,691 | | | $ | 19,140 | | | $ | — | | | $ | 2,621,096 | |
| | | | | | | | | | | |
| Eddy F. Schmitt | | | | | | | | | | | |
| Death or disability | $ | — | | | $ | 737,385 | | | $ | — | | | $ | — | | | $ | — | | | $ | 737,385 | |
| Termination without cause | $ | 625,500 | | | $ | 446,040 | | | $ | — | | | $ | 39,096 | | | $ | — | | | $ | 1,110,636 | |
| Change in control | $ | — | | | $ | 989,056 | | | $ | — | | | $ | — | | | $ | — | | | $ | 989,056 | |
| Termination after change in control | $ | 1,251,000 | | | $ | 989,056 | | | $ | — | | | $ | 39,096 | | | $ | — | | | $ | 2,279,152 | |
| | | | | | | | | | | |
| James P. Keane | $ | — | | | $ | 8,417,129 | | | $ | 3,045,016 | | | $ | — | | | $ | — | | | $ | 11,462,145 | |
_____________
|
| | | | | | | | | | | | | | | | | | | |
| Name and Triggering Event | Severance Payment (1) | Stock Awards (2) | SERP (3) | Other Benefits (4) | Total |
| | | | | | | | | | |
| James P. Keane | | | | | | | | | |
| Death or disability | $ | — |
| | $ | 3,384,825 |
| | $ | 2,999,305 |
| | $ | — |
| | $ | 6,384,130 |
|
| Termination without cause | $ | 3,600,000 |
| | $ | 1,692,900 |
| | $ | — |
| | $ | 47,356 |
| | $ | 5,340,256 |
|
| Change in control | $ | — |
| | $ | 3,384,825 |
| | $ | — |
| | $ | — |
| | $ | 3,384,825 |
|
| Termination after change in control | $ | 5,400,000 |
| | $ | 3,384,825 |
| | $ | 2,999,305 |
| | $ | 47,356 |
| | $ | 11,831,486 |
|
| | | | | | | | | | |
| David C. Sylvester: | | | | | | | | | |
| Death or disability | $ | — |
| | $ | 977,076 |
| | $ | 2,183,260 |
| | $ | — |
| | $ | 3,160,336 |
|
| Termination without cause | $ | 927,000 |
| | $ | 461,823 |
| | $ | — |
| | $ | 47,356 |
| | $ | 1,436,179 |
|
| Change in control | $ | — |
| | $ | 977,076 |
| | $ | — |
| | $ | — |
| | $ | 977,076 |
|
| Termination after change in control | $ | 1,854,000 |
| | $ | 977,076 |
| | $ | 2,090,016 |
| | $ | 47,356 |
| | $ | 4,968,448 |
|
| | | | | | | | | | |
| Lizbeth S. O'Shaughnessy | | | | | | | | | |
| Death or disability | $ | — |
| | $ | 563,315 |
| | $ | 1,144,664 |
| | $ | — |
| | $ | 1,707,979 |
|
| Termination without cause | $ | 692,160 |
| | $ | 268,168 |
| | $ | — |
| | $ | 29,132 |
| | $ | 989,460 |
|
| Change in control | $ | — |
| | $ | 563,315 |
| | $ | — |
| | $ | — |
| | $ | 563,315 |
|
| Termination after change in control | $ | 1,384,320 |
| | $ | 563,315 |
| | $ | 1,907,774 |
| | $ | 29,132 |
| | $ | 3,884,541 |
|
| | | | | | | | | | |
| Sara E. Armbruster | | | | | | | | | |
| Death or disability | $ | — |
| | $ | 445,697 |
| | $ | 380,897 |
| | $ | — |
| | $ | 826,594 |
|
| Termination without cause | $ | 669,120 |
| | $ | 210,634 |
| | $ | — |
| | $ | 47,024 |
| | $ | 926,778 |
|
| Change in control | $ | — |
| | $ | 445,697 |
| | $ | — |
| | $ | — |
| | $ | 445,697 |
|
| Termination after change in control | $ | 1,338,240 |
| | $ | 445,697 |
| | $ | 1,382,735 |
| | $ | 47,024 |
| | $ | 3,213,696 |
|
| | | | | | | | | | |
| Eddy F. Schmitt | | | | | | | | | |
| Death or disability | $ | — |
| | $ | 264,075 |
| | $ | — |
| | $ | — |
| | $ | 264,075 |
|
| Termination without cause | $ | 546,210 |
| | $ | 125,312 |
| | $ | — |
| | $ | 47,356 |
| | $ | 718,878 |
|
| Change in control | $ | — |
| | $ | 264,075 |
| | $ | — |
| | $ | — |
| | $ | 264,075 |
|
| Termination after change in control | $ | 1,092,420 |
| | $ | 264,075 |
| | $ | — |
| | $ | 47,356 |
| | $ | 1,403,851 |
|
| |
(1) | Severance Payment: The amounts shown in this column reflect the severance payments that would be made pursuant to our Executive Severance Plan:(1)Severance Payment: The amounts shown in this column represent the severance payments that would be made pursuant to our Executive Severance Plan to each of the named executive officers other than James Ludwig and James Keane.
|
•For our CEO:Sara Armbruster:
| |
◦ | in the event of a termination without cause, two times the sum of (a) his base salary on the date of termination plus (b) his target short-term award under our MIP for the year; and |
| |
◦ | in the event of a termination after change in control, three times the sum of (a) and (b). |
◦in the event of a termination without cause, two times the sum of (a) her base salary on the date of termination plus (b) her target MIP award for the year; and
◦in the event of a termination after change in control, three times the sum of (a) and (b).
•For each of the other named executive officers:
| |
◦ | in the event of a termination without cause, one times the sum of (a) his or her base salary on the date of termination plus (b) his or her target short-term award under our MIP for the year; and |
| |
◦ | in the event of a termination after change in control, two times the sum of (a) and (b). |
| |
(2) | Stock Awards: The amounts shown in this column are the value of the officers’ unvested restricted units and unearned performance units that would vest under certain circumstances pursuant to the Incentive Compensation Plan.
|
| |
(3) | SERP: The amounts shown in this column in the "Death or disability"◦in the event of a termination without cause, the sum of (a) their base salary on the date of termination plus (b) their target MIP award for the year; and ◦in the event of a termination after change in control, two times the sum of (a) and (b). For James Ludwig, the amount shown in this column represents the severance payment that is payable under the Voluntary Mutual Separation Agreement with Mr. Ludwig equal to one year of his base salary on the date of the agreement. (2)Long-Term Incentive Awards: The amounts shown in this column are the value of the officers’ unvested restricted units and unearned performance units that would vest or pay out under certain circumstances pursuant to the ICP. In the case of retirement, an officer’s unvested restricted units and unearned performance units continue to vest and will be earned in accordance with their terms following retirement. For David Sylvester, Allan Smith, Lizbeth O’Shaughnessy and Robert Krestakos, the amounts shown in the “Retirement” row represent the sum of: (a) the number of restricted units held as of February 25, 2022, multiplied by the market price of our Class A Common Stock on that date ,and (b) the value of the performance units held as of February 25, 2022, based on the level of performance through that date compared to the performance goals for those awards, and using the market price of our Class A Common Stock on that date, plus the dividend equivalents that would be payable based on such level of performance. In the case of death or disability, an officer’s unvested restricted units vest, and all or a portion of the officer’s unearned performance units may be earned at target levels depending on the timing of the death or disability relative to the grant date of the awards. The amounts shown in the “Death or disability” row represent the sum of: (a) the number of restricted units held as of February 25, 2022, multiplied by the market price of our Class A Common Stock on that date, and (b) the value of the performance units held as of February 25, 2022, based on the portion of the target awards that would have been earned, and using the market price of our Class A Common Stock on that date, plus the dividend equivalents that would have been earned. In the case of termination without cause, an officer’s unvested restricted units vest, but the officer’s unearned performance units are forfeited unless the officer is eligible for retirement. David Sylvester, Allan Smith, Lizbeth O’Shaughnessy and Robert Krestakos were eligible for retirement, so the amounts shown for them in the “Termination without cause” row are the same as the amounts shown in the “Retirement” row. For Sara Armbruster and Eddy Schmitt, the amounts shown for them in the “Termination without cause” row represent the number of restricted units held as of February 25, 2022, multiplied by the market price of our Class A Common Stock on that date. In the case of a change in control or termination after change in control, the amounts shown reflect the amounts payable in the scenario where the acquiring company does not assume or provide substitution for the long-term incentive awards. Under the terms of the awards, the performance units would have been payable based on the greater of (a) the target level of performance or (b) the actual performance through the end of fiscal year 2022, plus the dividend equivalents that would have been earned.
For James Ludwig and James Keane, following the termination of their employment, their unvested restricted units and unearned performance units continue to vest and will be earned in accordance with their terms. The amounts shown for them in this column represent the sum of: (a) the number of restricted units held as of the date of termination of their employment, multiplied by the market price of our Class A Common Stock on that date, and (b) the value of the performance units held as of the date of termination of their employment, based on the level of performance through that date compared to the performance goals for those awards, and using the market price of our Class A Common Stock on that date, plus the dividend equivalents that would be payable on such level of performance. (3)SERP: The amounts shown in this column in the “Retirement” and “Termination without cause” rows for David Sylvester, Allan Smith, Lizbeth O’Shaughnessy and Robert Krestakos represent the present value of the benefits the officer would receive under our Executive Supplemental Retirement Plan in such events, as shown in the Fiscal Year 2022 Pension Benefits Table on page 54. The amounts shown in this column in the “Death or disability” row for each officer other than Eddy Schmitt represent the present value of the benefits each would receive under the Executive Supplemental Retirement Plan in the event of death or disability. |
The amounts shown in this column in the “Termination after change in control” row for each officer other than Eddy Schmitt are the payments that would be made to the officer pursuant to our Executive Severance Plan with regard to our Executive Supplemental Retirement Plan in the event of a termination after change in control. These payments represent the present value of the benefits the officer would receive under our Executive Supplemental Retirement Plan following retirement, prorated to the extent the officer does not qualify for normal or early retirement at the time of the change in control, but with an additional three years of service and age credited in the case of our CEO or two years of service and age credited in the case of our other named executive officers.
Eddy F. Schmitt is not a participantFor James Ludwig and James Keane, the amounts shown in this column represent the present value of the benefits they will receive under our Executive Supplemental Retirement Plan.Plan as of the date of their termination of employment.
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(4) | (4)Other Benefits: The amounts shown in this column in the “Termination without cause” and “Termination after change in control” rows include: •The amounts shown in this column for each officer are the sum of: |
the estimated cost to our company of outplacement services that would be provided to the officer for up to 18 months following termination pursuant to the Executive Severance PlanPlan; and
a lump sum payment•payments that would be made under the Executive Severance Plan equal to the premiums that the officer would need to pay to continue health plan coverage for himself or herselfthemselves and his or hertheir eligible dependents under our benefit plans for a period of 18 months and are as follows: James P. Keane, $27,356;Sara Armbruster, $30,240; David C. Sylvester, $27,356;$19,764; Allan Smith, $25,362; Lizbeth S. O'Shaughnessy, $9,132; Sara E. Armbruster, $27,024;O’Shaughnessy, $26,478; Robert Krestakos, $23,382; and Eddy F. Schmitt, $27,356.$30,096.
The amounts shown in this column in the “Death or disability,” “Change in control” and “Termination after change in control” rows for David Sylvester also include the cash retention award of $577,900 that would be payable pursuant to the Retention Award Agreement with Mr. Sylvester.
The amounts shown in this column for James Ludwig represent the amount payable to Mr. Ludwig pursuant to the Voluntary Mutual Separation Agreement with him equal to the premiums that he would need to pay to continue health plan coverage for himself and his eligible dependents under our benefit plans for a period of one year.
(5)Excise Tax Gross Up: The amounts shown in this column are the amounts that would be paid under the Executive Severance Plan to cover any excise taxes due by the officers for the payments and benefits received in connection with termination after change in control.
In addition to the amounts shown in the Potential Payments upon Termination or Change in Control table, the named executive officers would or will receive:
•any base salary and vacation pay which had been earned through the end of the fiscal year but not yet paid or used;
•their short-term MIP awards, for fiscal year 2016,restricted units and performance units which were earned and/or vested, but not yet paid, not as severance or an acceleration of benefits but because they were employees foremployed through the full fiscal year;end of the applicable performance and/or vesting period;
•the vested balance of their accounts under our Retirement Plan, which is available generally to all U.S. employees and does not discriminate in favor of the executive officers;
•the vested balance of their accounts under the Restoration Retirement Plan and the balance of their accounts under the Deferred Compensation Plan, both of which are shown as of the end of fiscal year 2022 in the Fiscal Year 20162022 Nonqualified Deferred Compensation table;table on page 55; and
•other welfare benefits, such as a death benefit in the event of death of the employee, which are available generally to all U.S. employees of Steelcase Inc.
Generally, the amounts reflected in the Potential Payments upon Termination or Change in Control table would be paid to the applicable officer in a lump sum following termination of employment or change in control, pursuant to the terms of the applicable plans; however, portions of such amounts would be paid six months after the applicable triggering date and two years after the applicable triggering date. In addition, certain of the amounts reflected in the table are subject to forfeiture in the event the officer competes with us or in the event of certain restatements of our financial statements. See the Compensation Discussion and Analysis on page 45 under the heading “Other Programs and Practices - Non-competeNon-Compete and Other Forfeiture Provisions” for a discussion of these conditions.
CEO Pay Ratio
For fiscal year 2022:
•the annual total compensation of the employee whose compensation was at the median of all employees of our company other than our CEO (we refer to this employee as our median paid employee) was $41,463; and
•the annual total compensation of Sara Armbruster, our President and CEO, annualized as described below, was $5,590,995
Based on this information, the ratio of the annual total compensation of our CEO to the annual total compensation of our median paid employee was approximately 135 to 1. This pay ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K.
For purposes of determining our CEO pay ratio, SEC rules allow us to use the same median paid employee for three years as long as there has been no change in our employee population or employee compensation arrangements that we reasonably believe would result in a significant change to our CEO pay ratio disclosure. We determined that there had been changes in our compensation arrangements from fiscal year 2021 to fiscal year 2022 that we reasonably believe would result in a significant change to our CEO pay ratio disclosure, therefore, we have identified a new median paid employee for this year’s CEO pay ratio disclosure.
To identify our median paid employee for fiscal year 2022, we analyzed our employee population as of December 31, 2021, which was the end of a fiscal month within the last three months of fiscal year 2021. Our total employee population on that date was approximately 11,900. We did not exclude any entities. We identified our median paid employee based on gross earnings for calendar year 2021, which
included gross wages, bonus payments, stock compensation vesting and taxable benefits. Compensation earned in currencies other than U.S. dollars was translated into U.S. dollars using average foreign exchange rates during calendar year 2021.
We determined the median paid employee’s annual total compensation using the methodology for calculating total compensation for the Summary Compensation Table and compared that to the annual total compensation of our CEO, as disclosed in the Summary Compensation Table.
For fiscal year 2022, the total compensation of Ms. Armbruster, as reported in the Summary Compensation Table, was $5,420,546. Because Ms. Armbruster was appointed CEO effective October 4, 2021, in accordance with SEC rules for the CEO pay ratio calculation, we annualized her Base Salary, Non-Equity Incentive Plan Compensation and All Other Compensation as though she served as CEO for the full fiscal year. We did not annualize her Stock Awards because they consisted of annual equity awards made prior to her appointment as CEO as well as special restricted unit awards made in relation to her appointment as CEO.
PROPOSAL 3 – RATIFICATION OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee appoints an independent registered public accounting firm each fiscal year to audit our financial statements and internal control over financial reporting. The Committee has appointed Deloitte & Touche LLP to serve as our independent auditor for fiscal year 2017,2023, and as a matter of good corporate governance, our Board of Directors is asking our shareholders to ratify that appointment. This vote is advisory, which means that it is not binding on our company or our Board of Directors.Board. If our shareholders do not ratify the appointment of Deloitte & Touche LLP, the Audit Committee will reconsider such appointment. The affirmative vote of a majority of the votes cast at the Meeting for this proposal is required to approve this Proposal 3.
Deloitte & Touche LLP served as our independent auditor for fiscal year 20162022 and has been our independent auditor since fiscal year 2010. Representatives of Deloitte & Touche LLP will attend the Meeting, have an opportunity to make a statement if they desire to do so and respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF DELOITTE & TOUCHE LLP AS THE COMPANY'SCOMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL YEAR 2017.2023.
FEES PAID TO PRINCIPAL INDEPENDENT AUDITOR
The fees billed by Deloitte & Touche LLP for fiscal year 20162022 (estimated) and fiscal year 20152021 (actual) for work performed for us are as follows:
| | | Type of Fees | Fiscal Year 2016 (estimated) | Fiscal Year 2015 (actual) | Type of Fees | Fiscal Year 2022
(estimated) | Fiscal Year 2021
(actual) |
| | | | | |
| Audit Fees | $ | 2,062,000 |
| | $ | 2,120,000 |
| Audit Fees | $ | 2,568,000 | | | $ | 2,425,000 | |
| Audit-Related Fees | $ | — |
| | $ | — |
| |
| Tax Fees | $ | 935,000 |
| | $ | 865,000 |
| Tax Fees | 1,044,200 | | | 999,000 | |
| All Other Fees | $ | — |
| | $ | — |
| All Other Fees | 35,000 | | | 3,500 | |
| Total | $ | 2,997,000 |
| | $ | 2,985,000 |
| Total | $ | 3,647,200 | | | $ | 3,427,500 | |
Audit fees consisted of fees relatedrelate to (1) the annual audit of our consolidated financial statements, (2) the annual audit of our internal control over financial reporting, (3) reviews of the financial statements included in our quarterly reports on Form 10-Q, (4) other services related to SEC reporting matters and (5) audits of separate financial statements of our subsidiaries and other consolidated entities.
Tax fees consisted primarily of fees relatedrelate to tax(1) consultation and compliance services for expatriate employees and (2) corporate tax compliance, planning and consulting services, primarily related to our international subsidiaries.All other fees relate to educational sessions provided to our CEO and Audit Committee.
Our Audit Committee determined that providing the services reflected in the above table was compatible with the maintenance of the independence of Deloitte & Touche LLP.
Our Audit Committee has a policy under which it approves in advance audit, audit-related, tax and other services rendered by the principal independent auditor, subject to specific fee limits. If circumstances require hiring the independent auditor for services not previously pre-approved or that would exceed the fee limits previously set, the Audit Committee must pre-approve the new services or fee limits. The Audit Committee Chair may pre-approve specified services between regularly scheduled meetings of the Audit Committee, subject to review by the full Audit Committee at its next scheduled meeting. All of the fiscal year 20162022 services and fees reflected in the above table were pre-approved by the Audit Committee.Committee or Committee Chair.
AUDIT COMMITTEE REPORT
Management is responsible for the Company’s financial reporting process and its internal controls regarding financial reporting, accounting, legal compliance and ethics. Deloitte & Touche LLP, the Company’s independent registered public accounting firm for the fiscal year ended February 26, 201625, 2022 (the “independent auditor”), is responsible for performing independent audits of the Company’s consolidated financial statements and its internal control over financial reporting and issuing opinions on:
•the conformity of those audited financial statements with accounting principles generally accepted in the United States of AmericaAmerica; and
•the effectiveness of the Company’s internal control over financial reporting.
Our Committee’s role is to serve as an independent and objective party to monitor these processes on behalf of the Board of Directors and to review the audit efforts of the Company’s internal and independent auditors.
In this context, we discussed with the independent auditor the matters required to be discussed by the applicable standardsrequirements of the Public Company Accounting Oversight Board.Board and the SEC. In addition, we received the written disclosures and letter from the independent auditor required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent auditor’s communications with the Committee concerning independence, and we reviewed, evaluated and discussed the written report and letter with that firm, as well as its independence with respect to the Company.
We discussed with the Company’s internal and independent auditors the overall scope and plans for their respective audits. We also reviewed and discussed with management the Company’s audited financial statements. We met with the internal and independent auditors, with and without management present, to discuss the results of their examinations, their evaluations of the Company’s internal control, and the overall quality of the Company’s financial reporting.
Based on the review and discussions referred to above, and relying on the representations of the Company’s management and the independent auditor’s report, our Committee recommended to the Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended February 26, 201625, 2022 for filing with the Securities and Exchange Commission.
Audit Committee
Lawrence J. BlanfordTodd P. Kelsey (Chair)
David W. Joos
Cathy D. Ross
Peter M. Wege II
Linda K. Williams
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