incentive awards encourage executives to focus on and align themselves with the Company’s long-term goals as well. These incentives are based on financial objectives of importance to the Company, including revenue and earnings growth and creation of stockholder value. The Company’s compensation program also accounts for individual performance, which enables the Company to differentiate among executives and emphasize the link between personal performance and compensation.
The Company is committed to the interests of our stockholders and the delivery of long-term value through an executive compensation program and governance actions that
drive outstanding Company performance,
align CEO pay with Company performance,
ensure that no problematic pay practices exist (e.g., benchmarking compensation above peers, re-pricing or backdating of stock options, excessive perquisites, or tax gross-ups), and
• | ensure that no problematic pay practices exist (e.g., benchmarking compensation above peers, re-pricing or backdating of stock options, excessive perquisites, or tax gross-ups), and |
reflect appropriate communication with and responsiveness to stockholders.
As part of this commitment, we maintain a periodic dialogue with our stockholders to address any concerns they may have. Nevertheless, at our annual meeting in September 2021 the say-on-pay proposal received only 25% approval and the two members of our Compensation Committee who were standing for reelection received less than a majority vote.
In response to the say-on-pay proposal at the 2021 annual meeting results andreceiving only 25% approval, as well as feedback received from our stockholders,stockholder after the 2021 annual meeting, two of the members of the Compensation Committee members who received less than a majority vote were replaced, on the Committee, after which the Committee, with the assistance of its outside compensation consultant, reexaminedmade significant changes to the Company’s selected peer group and the compensation program for the Chief Executive Officer and Chief Operating Officer and implementedOfficer. Following the following changes:
Peer Group: The peer group in place asannouncement of those changes, the 2021say-on-pay proposal at our 2022 annual meeting was revised by removing ten companies (AAR, Astronics, CIRCOR International, Cognex, Esterline Technologies, FARO
received 32% approval.Technologies, FLIR Systems, Kulicke and Soffa Industries, MTS Systems and Teledyne Technologies), adding 11 companies (Altra Industrial Motion, BWX Technologies, Donaldson Company, Evoqua Water Technologies, ITT, Kratos Defense & Security, Mercury Systems, Regal Rexnord, Timken, Watts Water Technologies and Woodward), and retaining eight companies (Barnes Group, Crane, Curtiss-Wright, Franklin Electic, Graco, HEICO, Hexcel and Moog). The changes were made to recognizeby the Company’s significantly larger size and scope of business following our acquisition of Dodge IndustrialCompensation Committee in November 2021 while at the same time avoiding the inclusion in our peer group of “aspirational” peers.2022 included:
• | CEO Base Salary: Based on the newPeer Group: The peer group the base compensationin place as of the CEO, Dr. Michael J. Hartnett, for fiscal 20222021 annual meeting was retroactively changed from $775,000revised by removing ten companies (AAR, Astronics, CIRCOR International, Cognex, Esterline Technologies, FARO Technologies, FLIR Systems, Kulicke and Soffa Industries, MTS Systems and Teledyne Technologies), adding 11 companies (Altra Industrial Motion, BWX Technologies, Donaldson Company, Evoqua Water Technologies, ITT, Kratos Defense & Security, Mercury Systems, Regal Rexnord, Timken, Watts Water Technologies and Woodward), and retaining eight companies (Barnes Group, Crane, Curtiss-Wright, Franklin Electric, Graco, HEICO, Hexcel and Moog). The changes were made to $900,000, which is belowrecognize the 50th percentileCompany’s significantly larger size and scope of business following our acquisition of Dodge Industrial in November 2021 while at the same time avoiding the inclusion in our peer group.group of “aspirational” peers.
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• | Equity-Based Compensation: The previous long-term equity incentive program for the CEO and COO, which each year awarded a specific number of shares of restricted stock |
Equity-Based Compensation: The previous long-term equity incentive program for the CEO and COO, which each year awarded a specific number of shares of restricted stock and stock options based on the Company’s performance in the prior fiscal year, was replaced with a new program consisting of one-year performance-based restricted stock awards and three-year performance-based stock awards that deliver a specific amount of compensation based on the Company’s performance in the relevant period, with the first awards under the one-year portion of the new program occurring in fiscal 2023 based on Company performance in fiscal 2022 and the first awards under the three-year portion of the new program to occur in fiscal 2026 based on Company performance for fiscal 2023, 2024 and 2025. This new program, which contains elements found in the equity incentive programs of our peer group, enables the Compensation Committee to predictably tie a particular amount of equity-based compensation to a particular Company performance level and avoid the possibility that our strong stock price could cause equity awards to be worth significantly more than the amount of compensation that the Compensation Committee intended. In addition, the new program marks the first time that a portion of CEO/COO compensation will be tied to a three-year performance cycle.
Because the changes to the CEO and COO’s equity-based compensation program were made after the end of fiscal 2022, Dr. Hartnett and Mr. Bergeron had already earned awards under the old program for fiscal 2022 that would have been worth $16,838,389 and $7,372,114, respectively, but they agreed to forego those awards and instead receive awards under the one-year portion of the new program worth $5,985,000 and $2,344,192, respectively. As a result, Dr. Hartnett and Mr. Bergeron gave up $10,853,389 and $5,027,922, respectively, of equity-based compensation relating to fiscal 2022.
Dr. Hartnett is the Company’s founder and has served as our CEO since 1992. Dr. Hartnett is widely regarded as a technology visionary and one of the industry’s most successful business