UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant x
Filed by a Party other than the Registrant ¨
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| ¨ | Preliminary Proxy Statement | |||
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| x | Definitive Proxy Statement | |||
| ¨ | Definitive Additional Materials | |||
| ¨ | Soliciting Material Pursuant to §240.14a-12 |
EDGEWELL PERSONAL CARE COMPANY
(Name of the Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
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Notice of 2017 Annual Meeting
and
Proxy Statement
ENERGIZER HOLDINGS, INC.January 27, 2017
533 Maryville University Drive8:30 a.m. Central Time
St. Louis,1350 Timberlake Manor Parkway
Chesterfield, Missouri 6314163017
EDGEWELL PERSONAL CARE COMPANY
1350 Timberlake Manor Parkway
Chesterfield, Missouri 63017
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of Energizer Holdings, Inc.Edgewell Personal Care Company to be held at 8:30 a.m. Central Time on Monday,Friday, January 26, 201527, 2017 at Energizer World Headquarters, 533 Maryville University Drive, St. Louis,Edgewell Personal Care Company, 1350 Timberlake Manor Parkway, Chesterfield, Missouri 63141.63017.
In connection with the Annual Meeting, we have prepared a Notice of Annual Meeting of Shareholders, a Proxy Statement, and our 20142016 Annual Report. On or about December 11, 2014,16, 2016, we began mailing to our shareholders these materials or a Notice of Availability of Proxy Materials containing instructions on how to access these materials online.
If you plan to attend the Annual Meeting, please bring the 2015 Annual Meeting Admission Ticket and proof of identification (such as a driver’s license or other photo identification).
Whether you plan to attend the Annual Meeting or not, we encourage you to read the Proxy Statement and vote your shares. You may vote over the Internet, as well as by telephone, or, if you received or requested to receive printed proxy materials, by signing, dating and returning the proxy card enclosed with the proxy materials as soon as possible in the postage-paid envelope provided. However you decide to vote, we would appreciate you voting as soon as possible.
WARD M. KLEIN
Regards, |
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DAVID P. HATFIELD |
Chairman, President and Chief Executive Officer |
December 11, 201416, 2016
ENERGIZER HOLDINGS, INC.
533 Maryville University DriveEDGEWELL PERSONAL CARE COMPANY
St. Louis,1350 Timberlake Manor Parkway
Chesterfield, Missouri 6314163017
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders:
The Annual Meeting of Shareholders of Energizer Holdings, Inc.Edgewell Personal Care Company will be held at 8:30 a.m. Central Time on Monday,Friday, January 26, 201527, 2017 at Energizer World Headquarters, 533 Maryville University Drive, St. Louis,1350 Timberlake Manor Parkway, Chesterfield, Missouri 63141.63017.
The purpose of the meeting is:
| 1) | to elect |
| 2) | to ratify the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for fiscal |
| 3) | to |
| 4) | to cast a non-binding advisory vote on |
and to act upon such other matters as may properly come before the meeting.
| 5) | to act upon such other matters as may properly come before the meeting. |
Important Notice Regarding the Internet Availability of Proxy Materials for the 20152017 Annual Meeting.We are mailing to many of our shareholders a notice of availability over the Internet of the proxy materials, rather than mailing the proxy materials. The notice of availability contains instructions on how to access our proxy materials on the Internet, as well as instructions on obtaining a paper copy. All shareholders who do not receive such a notice of availability, and any shareholders who request to receive a paper copy of the proxy materials, will receive a full set of paper proxy materials by U.S. mail. This process will reduce our costs to print and distribute our proxy materials.
You may vote if you are a shareholder of record on November 26, 2014.28, 2016. It is important that your shares be represented and voted at the Annual Meeting. Please vote in one of the following ways:
| • | VISIT |
This Notice, the Proxy Statement, and the Company’s 20142016 Annual Report to Shareholders have also been posted atwww.cstproxy.com/energizer/2014www.proxyvote.com.
By Order of the Board of Directors,
Mark S. LaVigne
Vice President, General Counsel &
By Order of the Board of Directors, |
|
Manish R. Shanbhag |
Chief Legal Officer, Chief Compliance Officer and Secretary |
December 11, 201416, 2016
| Page | ||||
| 1 | ||||
| 4 | ||||
The Board of Directors and | ||||
Corporate Governance, Risk Oversight and Director Independence | ||||
Compensation Policies and Practices as They Relate to Risk Management | ||||
Item 3. Approval of Executive Officer Bonus Plan Performance-Based Criteria | 47 | |||
| 51 | ||||
| 52 | ||||
Exhibit A: Amended and Restated Executive Officer Bonus Plan | A-1 | |||
(i)
This summary highlights certain information contained in this Proxy Statement. This summary does not contain all of the information that you should consider, and you should read the entire Proxy Statement carefully before voting.
| Annual Meeting of Shareholders | • Time and date: 8:30 a.m., Central Time, January
• Place:
• Record Date: November
• Voting: Shareholders as of the record date are entitled to vote. Each share of common stock is entitled to one vote for each director nominee and one vote for each of the other proposals to be voted | |
| Voting matters with Board recommendation in parentheses | • Election of
• Ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for fiscal • Approval of Executive Officer Bonus Plan Performance-Based Criteria (FOR)
• Advisory vote on executive compensation (FOR)
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| Board nominees | Standing for
•
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• Daniel J. Heinrich
• Carla C. Hendra, Global Chairman of OgilvyRED. Director since 2015. • R. David Hoover
• John C. Hunter, III
•
•
•
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(ii)
Independent registered public accounting firm | The Board recommends that shareholders | |
| Executive officer bonus plan performance-based criteria | The Board recommends that shareholders vote FOR approval of the performance-based criteria for the bonus plan for the Company’s executive officers. | |
i
| Advisory vote on executive compensation | The Board recommends that shareholders approve, on | |
| Key elements of our 2016 compensation program | Fiscal 2016 was our first year as a stand-alone personal care company following the separation of the Household Products business from the Company in fiscal 2015 (the “Separation”). Our Nominating and Executive Compensation Committee (“NECC”) worked to structure appropriate executive officer compensation in this new environment. Our primary goal is to instill a “pay for performance” culture throughout our organization, with a significant portion of targeted compensation for our named executive officers dependent upon achievement of performance goals aligned with operating results and execution of significant initiatives and forfeited if goals are not achieved. We seek to align the compensation received by our named executive officers with the returns received by our shareholders. | |
• Aggregate pay package. Our aggregate pay packages are targeted at the 50th percentile for our peer group.
•
share (50% of the bonus target);
bonus target); and
For the fiscal 2016 annual bonus program, the combined weighted payout ratio for each of our named executive officers was 137.43% of the target amount.
•
• Supplemental retirement plans. Our executives participate in the retirement plans available for all • Severance plan. In fiscal 2016, we adopted an executive severance plan in which our named executive officers participate which provides them with certain benefits in the event of involuntary termination without cause or a voluntary termination as a result of good reason. The plan was adopted as a means to attract and retain key executives in line with market practice at peer companies.
• Severance and other benefits following change of control. We have change of control employment agreements with each of | ||
(iii)ii
PROXY STATEMENT—VOTING PROCEDURES
YOUR VOTE IS VERY IMPORTANT
The Board of Directors is soliciting proxies to be used at the 20152017 Annual Meeting. This proxy statement, the form of proxy and the Company’s 20142016 Annual Report to Shareholders will be available at www.cstproxy.com/energizer/2014www.proxyvote.com beginning on or about December 11, 2014.16, 2016. A Notice Regarding the Availability of Proxy Materials will be mailed to shareholders on or about December 11, 2014.16, 2016.
How to Receive Printed Materials
We have elected to take advantage of the Security and Exchange Commission’s (the “SEC”) rule that allows us to furnish proxy materials to you online. We believe electronic delivery will expedite shareholders’ receipt of materials, while lowering costs and reducing the environmental impact of our Annual Meeting by reducing printing and mailing of full sets of materials. On or about December 11, 2014,16, 2016, we mailed to many of our shareholders a Notice containing instructions on how to access our proxy statement and annual report online. If you received a Notice by mail, you will not receive a printed copy of the proxy materials unless you specifically request one. However, theThe Notice contains instructions on how to receive a paper copy of the materials.
Who Can Vote
Record holdersShareholders of Energizer Holdings, Inc.Edgewell Personal Care Company common stock on November 26, 201428, 2016 may vote at the meeting and any adjournment or postponement thereof. On November 26, 2014,28, 2016, there were 62,124,45957,690,075 shares of common stock outstanding. The shares of common stock held in our treasury will not be voted.
How You Can Vote
There are four voting methods for record holders:shareholders:
Voting by Mail. If you choose to vote by mail, complete a proxy card, date and sign it, and return it in the postage-paid envelope provided (if you received a paper copy of the proxy materials).
Voting by Telephone. You can vote your shares by telephone by calling 1-866-894-0537 and using the identification code indicated on the Notice Regarding the Availability of Proxy Materials or
| • | Voting by Mail. If you received a paper copy of the proxy materials, and if you choose to vote by mail, then complete a proxy card, date and sign it, and return it in the postage-paid envelope provided. |
| • | Voting by Telephone. You can vote your shares by telephone by calling 1-800-690-6903 and using the identification code indicated on the Notice Regarding the Availability of Proxy Materials or the proxy card mailed to you. Voting is available 24 hours a |
| • | Voting by |
| • | Voting by written ballot at the meeting. |
VotingVotes submitted electronically over the Internet or by written ballot at the meeting.telephone must be received by 11:59 p.m. Eastern Time on January 26, 2017.
Please note that if you are a record holdershareholder and plan to vote in person at the meeting, you should bring the attached 2015 Annual Meeting Admission Ticket with you, as well as proof of identification (such as a driver’s license or other form of photo identification). If you are representing an entity that is a shareholder, you should provide written evidence that you are authorized to act for such shareholder.
If your shares are held in the name of a bank, broker or other holder of record, you must obtain a proxy, executed in your favor, from the holder of record. You must bring such proxy and proof of identification with you to attend, and be able to vote at, the meeting. In order to vote such shares otherwise, you must follow the instructions given to you by such bank, broker or other holder of shares. See “Beneficial Owners and Broker Non-Votes” below.
If you vote by telephone or via the Internet, you should not return a proxy card.
How You May Revoke or Change Your Vote
You can revoke theyour proxy at any time before it is voted at the Annual Meeting by:
sending written notice of revocation to our Secretary;
submitting another proper proxy by telephone, Internet or mail; or
attending the Annual Meeting and voting in person.
General Information on Voting
You are entitled to cast one vote for each share of common stock you own on the record date. If you are
a shareholder of record and you do not submit a proxy or vote in person, no votes will be cast on your behalf on any of the items of business at the Annual Meeting. The presence at the meeting, in person or by proxy, of the holders of a majority of the shares of the Company’s common stock entitled to vote at the meeting is necessary to constitute a quorum.
The election of each director nominee, the ratification of the Company’s independent registered public accounting firm for 2015,2017, the approval of the Executive Officer Bonus Plan performance-based criteria, and the approval of executive compensation by non-binding vote and the adoption of the shareholder proposal must be approved by a majority of the voting power represented at the Annual Meeting in person or by proxy and entitled to vote on the matter.
Shareholders do not have the right to vote cumulatively in electing directors. Shares represented by a proxy marked “against” or “abstain” on any matter will be considered present at the meeting for purposes of determining a quorum and for purposes of calculating the vote, but will not be considered to have voted in favor of the proposal or director nominee. Therefore, any proxy marked “against” or “abstain” will have the effect of a vote against a nominee and against each proposal.
While the shareholder vote on executive compensation is advisory and not binding on the Company, the Board of Directors and the Nominating and Executive Compensation Committee, which is responsible for administering the Company’s executive compensation programs, are interested in the opinions expressed by our shareholders in their vote on this proposal and will consider the outcome of the vote when making future compensation decisions for our named executive officers.
All shares for which proxies have been properly submitted—whether by telephone, Internet or mail—and not revoked, will be voted at the Annual Meeting in accordance with your instructions. If you sign a proxy card but do not give voting instructions, the shares represented by that proxy will be voted as recommended by our Board of Directors.
If any other matters are properly presented at the Annual Meeting for consideration, the persons named in your properly submitted proxy card will have the discretion to vote on those matters for you. As of the
date this Proxy Statement went to press, no other matters had been raised for consideration at the Annual Meeting.
Beneficial Owners and Broker Non-Votes
If your shares are held by a bank, broker or other nominee, you are considered the “beneficial owner” of the shares, which are held in “street name.” If you hold your shares in street name, you can instruct the broker, bank or other nominee who is the shareholder of record how to vote these shares by using the voting instructions given to you by the broker, bank, or other nominee.
The broker, bank, or other nominee may vote the shares in the absence of your voting instructions only with regard to “routine” matters. The election of directors, the advisory vote on executive compensation and the vote onapproval of the shareholder proposalExecutive Officer Bonus Plan performance-based criteria are considered “non-routine” matters and, accordingly, if you do not instruct your broker, bank or other nominee how to vote in these matters, no votes will be cast on your behalf with respect to these matters.
Your broker, bank or other nominee does, however, have discretion to vote any uninstructed shares on the ratification of the appointment of our accounting firm (Item 2 of this Proxy Statement).firm. If the broker, bank or other nominee votes the uninstructed shares on the ratification of the accounting firm (either personally or by proxy), these shares may be considered as “present” for quorum purposes but will not be deemed voted on other matters and will be considered “broker non-votes” with respect to such other matters.
Such broker non-votes shall have no effect on the votes on election of directors, the advisory vote on executive compensation andor the shareholder proposal.
Voting By Participants in the Company’s Savings Investment Plan
If you participate in our savings investment plan and had an account in the Energizer common stock fund on November 19, 2014, you will receive a full setapproval of the proxy materials in the mail and the proxy card included with such materials will also serve as voting instructions to the trustee for that plan, VanguardExecutive Officer Bonus Plan performance-based criteria.
Fiduciary Trust Company, an affiliate of The Vanguard Group of Investment Companies, for the shares of our common stock credited to your account on that date. If the trustee does not receive directions with respect to the shares of common stock credited to your account by January 23, 2015, it will vote those shares in the same proportion as it votes shares for which directions were received.
Costs of Solicitation
We will pay for preparing, printing and mailing this proxy statement. We have engaged MacKenzie Partners, Inc. and Georgeson & Company, Inc. to help solicit proxies from shareholders (in person, by phone or otherwise) for a fee of $14,175 plus
expenses. Proxies may also be solicited personally or by telephone by our employees without additional compensation. We will also reimburse banks, brokers and other custodians, nominees and fiduciaries for their costs of sending the proxy materials to the beneficial owners of our common stock.
Section 16(a) Beneficial Ownership Reporting Compliance
To the best of our knowledge, all filings of stock ownership and changes in stock ownership by our directors and executive officers and beneficial owners of more than 10% of our stock, which are required by rules of the SEC, were made on a timely basis in fiscal 2014.2016 with the exception of one Form 4 filing for Mr. Anthony Bender, whose February 13, 2016 vesting of a restricted stock equivalent was reported on July 6, 2016.
Our Board of Directors currently consists of teneight members, and twoall eight directors are nominated for electionre-election at the 20152017 Annual Meeting. At the 20142015 Annual Meeting, theour shareholders voted to approve and adopt amended and restated Articles of Incorporation that resulted in a phased-in elimination of theour classified board.Board of Directors. Our Board of Directors currentlyno longer consists of three classes: one class consistingmultiple classes; all of four directors whoseour current directors’ terms of service expire at the 2017 Annual Meeting, one class containing four directors whose termsMeeting.
On April 26, 2016, Ward M. Klein, who was the then-current Executive Chairman of service expire at the 2016 Annual Meeting,Board of Directors, informed the Board that he was retiring as an officer and one class consistingemployee of two directors,the Company and was resigning as a resultmember of the Board effective on July 6, 2016. On April 27, 2016, the Board appointed David Hatfield, President and Chief Executive Officer of the Company and a member of the Board, to succeed Mr. Klein as Chairman of the Board effective upon Mr. Klein’s resignation. On June 22, 2016, the Board elected Elizabeth Valk Long as a member of the Board effective upon the retirement of Pamela M. Nicholson in March 2014, nominated for election atMr. Klein. The Board selected Ms. Long after her being introduced to the 2015 Annual Meeting. If elected, following this Annual Meeting, six directors will have terms expiring atBoard by then-current members of the 2016 Annual Meeting.Board.
TwoEight directors will be elected at the 20152017 Annual Meeting to serve for a one-year term expiring at our Annual Meeting in 2016.2018. The Board has nominated Bill G. ArmstrongMessrs. Hatfield, Heinrich, Hoover, Hunter, Johnson and J. Patrick MulcahySachdev and Mss. Hendra and Long for election as directors at this meeting. Each nominee is currently serving as a director and has consented to serve for the one-year term. Each nominee elected as a director will continue in office until his or her successor has been elected and qualified. As discussed below under “Additional Information—Information Regarding the Spin-Off”, we are pursuing a plan to spin-off our Household Products business and thereby create two independent, publicly traded companies. In connection with the spin-off, we anticipate that some of our directors may become directors of the household products company, and therefore will resign from our Board of Directors. We may, at any time and for any reason until the proposed spin-off is complete, abandon the spin-off or modify or change its terms. We can make no assurance that any spin-off transaction will ultimately occur, or if one does occur, the terms or timing of a transaction.
We do not know of any reason why any of the nominees for director named herein would be unable to serve; however, if any nominee is unable to serve as a director at the time of the Annual Meeting, your proxy may be voted for the election of another person the Board may nominate in his or her place, unless you indicate otherwise.
Vote Required. The affirmative vote of a majority of the voting power represented in person or by proxy and entitled to vote is required for the election of each director.
The Board of Directors recommends a vote THE BOARD OF DIRECTORS RECOMMENDS A VOTEFOR the election of these nominees as directors of the Company. THE ELECTION OF THESE NOMINEES AS DIRECTORS OF THE COMPANY.
INFORMATION ABOUT NOMINEES AND OTHER DIRECTORSFOR DIRECTOR
Please review the following information about the nominees, and other directors continuingwho are all standing for re-election at this meeting for a term expiring in office.2018. The ages shown are as of December 31, 2014.2016.
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DAVID P. HATFIELD,Director Since
Mr.
Mr. Hatfield has over 25 years of | |
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| DANIEL J. HEINRICH,Director Since 2012, Age
Mr. Heinrich
Mr. Heinrich has extensive experience in financial management. Prior to his employment with The Clorox Company, he was Senior Vice President and Treasurer of Transamerica Finance Corporation. Prior to that, he served in the financial services group of the Ford Motor Company, including as Senior Vice President-Controller of Ford Motor Company’s banking subsidiary and as Senior Vice President-Treasurer and Controller of Granite Management Corporation. He began his career at Ernst & Young LLP where he spent over eight years in both audit and tax
Mr. Heinrich’s extensive knowledge of consumer packaged goods, strategy, business development, operations, financial management, accounting principles and financial reporting rules and regulations provides | |
| CARLA C. HENDRA, Director Since 2015, Age 60 Ms. Hendra has served as the Global Chairman of OgilvyRED, the strategic consulting and innovation group of Ogilvy & Mather (advertising, marketing and public relations), since 2010. Ms. Hendra is Vice-Chairman of the Ogilvy & Mather Worldwide Board and sits on the Ogilvy & Mather Executive Committee. From 2005 to 2010, she was Co-Chief Executive Officer of Ogilvy North America and Chairman of Ogilvy New York from 2007 to 2010. In 1998, she created Ogilvy’s North America strategic consulting group and co-founded Ogilvy Entertainment in 2007. In 1996, she joined Ogilvy & Mather and was named President of OgilvyOne in 1998. From 1992 to 1996, Ms. Hendra was Executive Vice President of Grey Direct, a division of Grey Advertising. From 1981 to 1992, she was employed by CRM Agency Barry Blau & Partners, departing as General Manager in 1992. Ms. Hendra has been a member of the board of Caleres, Inc. (a global footwear company formerly known as Brown Shoe Company, Inc.) since 2005. She is also a member of the advisory board of Reye Partners, LLC, an investment management firm. Ms. Hendra served on the Board of Directors of Unica Corporation until its acquisition by IBM in 2010. She was a director for non-profit Dress for Success from 2007 to 2011, and has been an advisor for education non-profits PENCIL and Schools That Can in New York. Ms. Hendra’s extensive experience in marketing, advertising and strategic consulting give her insights into commercial issues such as brand strategy, digital marketing, data and analytics, and long-term planning that provide valuable benefits to the Board. Ms. Hendra serves on Edgewell’s Nominating and Executive Compensation Committee. | |
| R. DAVID HOOVER,Director Since 2000, Age
Mr. Hoover served as Chairman of Ball Corporation
Mr. Hoover | |
| JOHN C. HUNTER, III, Director Since 2005, Age 67
Mr. Hunter served as Chairman, President and Chief Executive Officer of Solutia, Inc. (chemical products) from 1999 to 2004. He is now retired. Solutia and certain subsidiaries filed voluntary petitions for bankruptcy in 2003, and emerged from bankruptcy in 2008.
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 | JAMES C. JOHNSON, Director Since 2013, Age
Mr. Johnson served as General Counsel of Loop Capital Markets LLC (financial services firm) from November 2010 until
Mr. Johnson has extensive executive management and leadership experience as the General Counsel of a financial services | |
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Ms. Long was Executive Vice President of Time Inc. from May 1995 until her retirement in August 2001. Working for Time Inc. from 1979 until 2001, she was the first female to be named publisher at the company, and during her tenure served as such for Life, People and Time magazines. Since 1997, Ms. Long has served on the board of directors of The J.M. Smucker Co., where she chairs the executive compensation committee and is a member of the audit committee. She also served on the board of Steelcase Inc. from 2000 to 2015 where she chaired the nominating and governance committee and, during her tenure, was a member of the audit, compensation and executive committees. She was a director and chairman of the executive compensation committee at Belk Inc. from 2004 until 2015. She also served as a director on the boards of Wachovia and Jefferson Pilot. Ms. Long received her BA from Hollins University in 1972 and her MBA from Harvard Business School in 1979. She is Trustee Emerita at Hollins University, where she served as board chair for four of her 19 years as trustee. She currently chairs the board of St. Timothy’s School and is a director of The Summit Charter School Foundation. Ms. Long’s experience at Time Inc. and as a director of a variety of public companies across a range of business sectors provides her with marketing and communications expertise and a breadth of corporate experience that she brings to our Board. In addition, her experience as a member (and former member) of multiple compensation and audit committees makes her a valuable addition to Edgewell’s Audit and Nominating and Executive Compensation Committees, where she currently serves as a member. | |
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Mr. Mr. Sachdev serves on the board of directors of Platform Specialty Products and Regal Beloit Corporation. He serves as
Mr. | |
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THE BOARD OF DIRECTORS AND ENERGIZER’SEDGEWELL’S CORPORATE GOVERNANCE
STANDING COMMITTEES AND MEETINGS
From October 1, 2015 through July 6, 2016:
Board Member | Board | Audit | Executive | Nominating and Executive Compensation | Finance and Oversight | |||||
Bill G. Armstrong | ü | ü | ü | |||||||
Daniel J. Heinrich | ü | ü | ü | |||||||
R. David Hoover | ü | ü* | ||||||||
John C. Hunter | ü | ü* | ||||||||
James C. Johnson | ü | ü | ||||||||
John E. Klein | ü | ü | ü | |||||||
Ward M. Klein | ü | ü | ü | |||||||
W. Patrick McGinnis | ü | ü | ü | |||||||
J. Patrick Mulcahy | ü* | ü* | ü | |||||||
John R. Roberts | ü | ü* | ü | ü | ||||||
Meetings held in fiscal 2014 | 7 | 6 | 0 | 5 | 5 |
Board Member | Board | Audit | Nominating and Executive Compensation | Finance and Oversight | ||||
David P. Hatfield |  | | ||||||
Daniel J. Heinrich | | * | | |||||
Carla C. Hendra | | | ||||||
R. David Hoover | ** | * | ||||||
John C. Hunter, III | | * | ||||||
James C. Johnson | | | | |||||
Ward M. Klein | * | | ||||||
Rakesh Sachdev | | |
| * | Chairperson |
| ** | Lead Independent Director |
From July 6, 2016 through September 30, 2016:
Board Member | Board | Audit | Nominating and Executive Compensation | Finance and Oversight | ||||
David P. Hatfield | * | | ||||||
Daniel J. Heinrich | | * | | |||||
Carla C. Hendra | | | ||||||
R. David Hoover | ** | * | ||||||
John C. Hunter, III | | * | ||||||
James C. Johnson | | | | |||||
Elizabeth Valk Long | | | | |||||
Rakesh Sachdev | | |
| * | Chairperson |
| ** | Lead Independent Director |
| Board | Audit | Nominating and Executive Compensation | Finance and Oversight | |||||
Meetings held in Fiscal 2016 | 7 | 10 | 7 | 4 |
Audit: Reviews auditing, accounting, financial reporting and internal control functions. Responsible for engaging and supervising our independent accountants, resolving differences between management and our independent accountants
regarding financial reporting, pre-approving all audit and non-audit services provided by our independent accountants, and establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters. Receives reports from the head of our internal audit department. Our Board has determined that all members are independent and financially literate in accordance with the criteria established by the SEC and the New York Stock Exchange (the “NYSE”). Our Board has elected John R. RobertsDaniel J. Heinrich as chair of the Audit Committee, and has determined that he is bothall members of the committee are independent and anthat Mr. Heinrich and Ms. Long are audit committee financial expert,experts, as defined by SEC guidelines. The Audit Committee’s charter can be viewed on the Company’s website,www.energizerholdings.comwww.edgewell.com, click on “Investors,” then “Corporate Governance,” then “Audit Committee Charter.” Information on our website does not constitute a part of this document.
Executive: May act on behalf of the Board in the intervals between Board meetings.
Nominating and Executive Compensation: Sets compensation of our executive officers, administers our 2000incentive stock plans and 2009 Incentive Stock Plans and grants
equity-based awards, including performance-based awards, under those plans. Administers and approves performance-based awards under our executive officer bonus plan. Establishes performance criteria for performance-based awards and certifies as to their achievement. Monitors management compensation and benefit programs, and reviews principal employee relations policies. Recommends nominees for election as directors or executive officers to the Board, as well as committee memberships and compensation and benefits for directors. Administers our stock ownership guidelines. Conducts the annual self-assessment process of the Board and its committees, and regular review of our Corporate Governance Principles. Our Board has determined that all members are non-employee directors, and are independent, as defined in the listing standards of the NYSE. The Nominating and Executive Compensation Committee’s charter can be viewed on the Company’s website,www.energizerholdings.comwww.edgewell.com, click on “Investors,” then “Corporate Governance,” then “Nominating and Executive Compensation Committee Charter.” Information on our website does not constitute a part of this document.
Finance and Oversight: Reviews our financial condition, objectives and strategies, and acquisitions and other major transactions, and makes recommendations to the Board concerning financing requirements, our stock repurchase program and dividend policy, foreign currency management and pension fund performance. The Finance and Oversight Committee’s charter can be viewed on the
Company’s website, www.energizerholdings.com,www.edgewell.com, click on “Investors,” then “Corporate Governance,” then “Finance and Oversight Committee Charter.” Information on our website does not constitute a part of this document.
During fiscal 2014,2016, all directors attended 75% or more of the Board meetings and meetings of the committees on which they served duringat the time of their period of service. Under our Corporate Governance Principles, each director is highly encouraged to attend our annual meeting of shareholders each year, preferably in person. All directors in office during the 20142016 Annual Meeting attended the meeting in accordance with the Company’s Corporate Governance Principles.Annual Meeting.
CORPORATE GOVERNANCE, RISK OVERSIGHT AND DIRECTOR INDEPENDENCE
Board Leadership Structure
Our Board regularly considers the appropriate leadership structure for the Company and has concluded that the Company and its shareholders are best served by not having a formal policy on whether the same individual should serve as both chief executive officer and chairman of the Board. This flexibility allows the Board to utilize its considerable experience and knowledge to elect the most qualified director as chairman of the Board, while maintaining the ability to separate the chairman and chief
executive officer roles when necessary. Currently, Mr. Hatfield holds the roles of chairman of the Board and chief executive officer. As the chairman of the Board and chief executive officer are separate.is currently employed by the Company, the Board has also determined it is appropriate to have a lead independent director of the Board who provides, in conjunction with the chairman, leadership and guidance to the Board. The Board believes this structure is currently the optimal structure for providing leadership that is both independent in its oversight of management and closely attuned to our specific business. TheMr. Hatfield, as chief executive officer and chairman of the Board, is responsible for setting the strategic direction for the Company and the day-to-day leadership and performance of the Company, while the chairman of the Board provides guidance and setsalso setting the agenda for Board meetings in consultation with the chief executive officer,lead independent director and presidespresiding over meetings of the full Board. The Chairman oflead independent director serves as a liaison on Board-related issues between the Board alsochairman and the independent directors, presides over non-management executive sessions of the Board.Board and at such other times as the Board shall determine and sets the agenda for such sessions, meets with the chairman to discuss matters arising from such meetings, and performs such other functions as the Board may direct. The Board periodically evaluates the structure most appropriate for the environment in which we operate. In connection with the proposed plan to spin-off the Household Products business, the Board will also evaluate the future leadership structure of the Household Products business.
Risk Oversight and Risk Management
The Board of Directors, acting both directly and through its committees, is actively involved in oversight of the significant risks affecting our business. The Board of Directors and its committees’ risk oversight activities are informed by our management’s risk assessment and risk management processes.
Structure of Risk Oversight and Risk Management
The Board’s role in risk oversight is consistent with the Company’s leadership structure, with management having day-to-day responsibility for assessing and managing the Company’s risk exposure and the Board and its committees providing oversight
in connection with those efforts, with particular focus on the most significant risks facing the Company.
The risk oversight responsibility of the Board and its committees is enabled by management reporting processes that are designed to provide visibility to the Board about the identification, assessment and management of critical risks and management’s risk mitigation strategies. Management of day-to-day operational, financial and legal risks is the responsibility of operational and executive leadership of the Company. The Company maintains a Risk Committee of senior personnel in a number of functional areas. The Risk Committee is sponsored jointly by our chief financial officer and general counsel.executive officer. The purposes of the Risk Committee are:
to identify and rate risks with input from various areas of management; |
The Risk Committee meets quarterly to evaluatereview risk mitigation strategies; and
Risks that are identified by the Risk Committee as significant in accordance with the process above are then reported to the appropriate Board committee. The Audit Committee performs a central oversight role with respect to financial and compliance risks, and meets with our independent auditors outside the presence of senior management. It also regularly receives reports regarding our internal controls and compliance risks viewed as most significant, along with management’s processes for seeking to maintain
compliance within an internal controls environment. The Nominating and Executive Compensation Committee is responsible for conducting appropriate reviews of compensation practices as they relate to risk management. The Risk Committee engages with the Board with respect to significant risks, and submits a risk report to the Board on an annual basis.
Our Company manages risk in several key areas, each of which is described in more detail below:
financial and internal control risk
legal and regulatory risk
operational risk
strategic risk
governance risk
event risk
compensation policies and practices risk
Financial and Internal Control Risk
The Risk Committee evaluates the Company’s exposure to financial and internal control risks, including risks related to foreign currencies, capital markets, cash flows, pension plans, and taxes. Management has put in place internal controls and conducts internal audits with respect to the Company’s financial statements. The Company has a hotline that can be used to report any financial or accounting fraud, and uses financial and internal controls and monitoring in an effort to prevent inadequate, incomplete or misleading disclosures in press releases and the Company’s SEC filings.
Legal and Regulatory Risk
The Company’s legal department, led by our general counsel, monitors the Company’s exposure to legal and regulatory risks, including intellectual property maintenance and infringement, global regulatory compliance, and, with the environmental group, environmental matters. The Board is kept informed of the commencement and status of significant litigation.
Operational Risk
The Risk Committee, our global operations team, and our commercial organization monitor the Company’s exposure to operational risks, including
manufacturing, supply chain disruption and category and competitive pressures. The Company’s information technology group evaluates identified risks related to the Company’s information technology systems, such as the impact of significant information technology changes, cyber-attacks or hacking, the potential failure of the Company’s information technology systems or loss or theft of data. The Board is kept informed of the status of major manufacturing, supply chain, commercial or information technology system changes.
Strategic Risk
Strategic Risk includes risks faced by our Company related to mergers, acquisition and divestures, strategic planning, major initiatives such as restructurings or the proposed spin-off transaction, economic and geopolitical risks, our internal and external communications strategies and our organizational structure and incentives. The Risk Committee, with input from our executive leadership, evaluates strategic risks and reports to the appropriate committee of the Board or the Board as a whole on the status of major initiatives as well as other major developments in strategic risk.
Governance Risk
The Company strives to optimize shareholder communications to convey valuable information to our shareholders. Senior executives and members of the Board periodically meet with shareholders to discuss the Company’s performance and governance. The Board also annually evaluates its governance structures. The Nominating and Executive Compensation Committee annually reviews the Company’s Corporate Governance Principles and recommends amendments to the Board. Each committee of the Board annually reviews its charter and recommends any changes for adoption by the Board. The Board also annually reviews the Company’s succession plans for all senior executive positions.
Event Risk
The Risk Committee evaluates the Company’s exposure to certain event risks, such as natural disasters and political or economic instability. The Board is kept informed of major developments in event risk.
Compensation Policies and Practices Risk
As part of its responsibilities, the Nominating and Executive Compensation Committee annually reviews the Company’s compensation policies and practices for all employees, including executive officers, to determine whether the Company’s compensation programs encourage excessive risk-taking likely to have a material adverse effect on the Company. As described below under “—Determining Executive Compensation,” the committee also employs an independent compensation consultant who advises and consults with the committee to determine both the structure and amounts of executive compensation. For further information, please see “Executive Compensation—Compensation Policies and Practices as They Relate to Risk Management” below.
Although we have devoted significant resources to develop our risk management policies and procedures, these policies and procedures, as well as our risk management techniques, may not be fully effective. In addition, there may be risks that exist, or that develop in the future, that we have not appropriately anticipated, identified or mitigated. In either case, we could suffer losses and our results and financial position could be materially adversely affected.
Sustainability
Our Company places a high priority on operating in a responsible and respectful manner. We believe that sustainable operations are both financially beneficial and critical to the health of the communities in which we operate. Our Company’s Sustainable Development Mission is to “do the right thing” in conducting our business in an effort to ensure that we preserve the environment for future generations and provide a safe and healthy working environment for colleagues while promoting the continued success of our commercial enterprise. Our Company’s sustainable development missionSustainable Development Mission is derived directly from our organizational values and is one of our leadership strategies. At the core of our sustainability efforts are three pillars:
Environmental—reducing the impact our organization has on the environment in an effort to ensure the availability of natural resources for generations to come
Social—People—providing our colleagues with a safe, healthy working environmentenvironments as well as making a positive contribution to the communities in which we operate, while expectinggoverning our supplierspartnerships with codes of conduct.
Economic—strivingour manufacturing operations to ensure we deliver on the environmental and social pillars while simultaneously delivering on shareholder expectations
Our Company hasWe have established sustainable development goals to focus our conservation efforts across four key areas: energy, greenhouse gas emissions, solid waste and water usage. In addition, we are actively developing and incorporating “design for sustainability” tools into our product development process. “Design for sustainability” proactively addresses environmental, social and economic considerations from the earliest stages of the product development process throughout the product lifecycle. The goal is to design products that minimize energy consumption and waste generation and increase utilization of high recovery materials, and use “design for disassembly” principles to enhance recyclability.materials.
Our Business Practices and Standards of Conduct isare designed to provide guidance on and articulate our commitment to several key matters such as safety and health, protecting the environment, use of Company resources, and promoting a
harassment-free work environment. It also addresses certain legal and ethical facets of integrity in business dealings with suppliers, customers, investors and the governments that regulate us. We assess global compliance with this policy annually.
Our Supplier Code of Conduct sets forth our Company’s basic expectations for environmental, labor, supplier working conditions and ethical practices that suppliers are expected to meet in order to do business with our Company. We believe we hold our suppliers to a high standard and use a risk-based approach to audit suppliers for ongoing compliance.
Compensation Committee Interlocks and Insider Participation
No member of the Nominating and Executive Compensation Committee is or has been an officer or
employee of the Company or any of its subsidiaries. In addition, no member of the committee had any relationships with the Company or any other entity that require disclosure under the proxy rules and regulations promulgated by the SEC.
Determining Executive Compensation
At the beginning of each fiscal year, the Nominating and Executive Compensation Committee reviews and approves compensation for our executive officers, including any merit increases to base salary, our annual cash bonus program, long-term equity incentive awards, and performance targets under those programs and awards. The committee members base these determinations on their review of competitive market data from our peer group, shareholder views, including the results of the most recent advisory vote on executive compensation, and the recommendations of the chief executive officer and our human resources department. Meridian Compensation Partners LLC (“Meridian”), the committee’s compensation consultant, conducts an in-depth annual review of our compensation practices, and those of our peer group, in order to support the committee’s review process. Meridian also advises the committee during its review of compensation for non-employee directors and the competitiveness of our executive compensation programs. For more information on the committee’s review process and Meridian’s assistance to the committee, as well as on compensation consultants retained by the Company, see “Executive Compensation—Compensation Discussion and Analysis” below.Analysis.”
Committee Charters, Governance and Codes of Conduct
The charters of the committees of our Board of Directors and our Corporate Governance Principles have been posted on our website atwww.energizerholdings.comwww.edgewell.com, under “Investors”.“Investors,” then “Corporate Governance.” Information on our website does not constitute part of this document. Our code of business conduct and ethics applicable to the members of the Board of Directors, as well as the code applicable to theour officers and employees, have eachalso been posted on our website as well.website. You can view our Codes of Conduct on the Company’s website,www.energizerholdings.comwww.edgewell.com, under “Company”,“Company,” click on “Sustainability”, then click on “Social”“Sustainability,” then click “Codes of Conduct.”
Copies of the committee charters, the Corporate Governance Principles and the codes of conduct will be provided, without charge, to any shareholder upon request directed in writing to the Secretary, Energizer Holdings, Inc., 533 Maryville University Drive, St. Louis,Edgewell Personal Care Company, 1350 Timberlake Manor Parkway, Chesterfield, Missouri 63141.63017.
Director Independence
Our Corporate Governance Principles, adopted by our Board, provide that a majority of the Board, and the entire membership of the Audit and the Nominating and Executive Compensation Committees of the Board, shallwill consist of independent, non-employee directors who meet the criteria for independence required by the NYSE listing standards. In addition, our Corporate Governance Principles provide that there may not be at any time more than two employee directors serving on the Board.
A director will be considered independent if he or she does not have a material relationship with us, as determined by our Board. To that end, the Board, in the Corporate Governance Principles, has established guidelines for determining whether a director is independent, consistent with the listing standards of the NYSE. A director will not be considered independent if:
within the last three years, the director was employed by us or one of our subsidiaries, or an immediate family member of the director was employed by us or one of our subsidiaries as an executive officer;
(A)(i) the director is a current partner or employee of a firm that is our internal or external auditor; (B)(ii) the director has an immediate family member who is a current partner of such a firm; (C)(iii) the director has an immediate family member who is a current employee of such a firm and personally works on our audit; or (D) the director or an immediate family member was within the last three years a partner or employee of such a firm and personally worked on our audit within that time; or
family member who is a current employee of such a firm and personally works on our audit; or (iv) the director or an immediate family member was within the last three years a partner or employee of such a firm and personally worked on our audit within that time; or |
any of our present executive officers served on the compensation committee of another company that employed the director or an
immediate family member of the director as an executive officer within the last three years.
|
The following relationships will be considered material:
a director or an immediate family member is an executive officer, or the director is an employee, of another company which has made payments to, or received payments from, us and the payments to, or amounts received from, that other company in any of the last three fiscal years, exceed the greater of $1 million or 2% of such other company’s consolidated gross revenues;
a director or an immediate family member, during any twelve-month period within the last three years, received more than $120,000 in direct compensation from us, other than director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service);
a director is an executive officer of a charitable organization and our annual charitable contributions to the organization (exclusive of gift-match payments), in any single fiscal year within any of the last three years, exceed the greater of $1,000,000 or 2% of such organization’s total charitable receipts;
a director is a partner of or of counsel to a law firm that, in any of the last three years, performed substantial legal services to us on a regular basis; or
a director is a partner, officer or employee of an investment bank or consulting firm that, in any of the last three years, performed substantial services to us on a regular basis.
For relationships not described above or otherwise not covered in the above examples, a majority of our independent directors, after considering all of the relevant circumstances, may make a determination whether or not such relationship is material and whether the director may therefore be considered
independent under the NYSE listing standards. We have also considered and determined that members of our Audit Committee and Nominating and Executive Compensation Committee satisfy the additional independence requirements of the NYSE and SEC for such committees.
Director affiliations and transactions are regularly reviewed to ensure that there are no conflicts or relationships with the Company that might impair a director’s independence. Every year, we submit a questionnaire to each director and executive officer, in addition to conducting our own internal review, for the purpose of identifying certain potentially material transactions or relationships between each director, or any member of his or her immediate family, and the Company, its senior management and its independent auditor.
Pursuant to that review, the Board has considered the independence of:
In addition, the Board considered the independence of
Accordingly, based on the responses to the 20142016 questionnaire and the results of its review, the Board has affirmatively determined that all directors, other than Ward M. Klein,David Hatfield, are independent from management. The following are the non-employee directors deemed to be independent: Bill G. Armstrong, Daniel J. Heinrich,Heinrich; Carla C. Hendra; R. David Hoover,Hoover; John C. Hunter, III; James C. Johnson, John E. Klein, W. Patrick McGinnis, J. Patrick Mulcahy,Johnson; Elizabeth Valk Long; and John R. Roberts.Rakesh Sachdev.
Director Nominations
The Nominating and Executive Compensation Committee is responsible for recommending candidates for election to our Board of Directors, consistent with the requirements for membership set forth in our Corporate Governance Principles. Those requirements include integrity, independence, diligence, diversity, energy, forthrightness, analytical skills and a willingness to challenge and stimulate management, and the ability to work as part of a team in an environment of trust. The principles also indicate the Board’s belief that each director should have a basic understanding of (i) our principal operational and financial objectives, and plans and strategies, (ii) our results of operations and financial condition, and (iii) the relative standing of the Company and our business segments in relation to our competitors. In addition to those standards, the committee seeks directors who will effectively represent the interests of our shareholders, and who bring to the Board a breadth of experience from a variety of industries, geographies and professional disciplines. Although the Company does not have a formal policy with respect to diversity matters, the Board also considers factors such as diversity on the basis of race, color, national origin, gender, religion, disability and sexual orientation. The committee reviews its effectiveness in balancing these considerations when assessing the composition of the Board. The committee is also responsible for articulating and refining specific criteria for Board and committee membership to supplement, as appropriate, the more general criteria set forth in our Corporate Governance Principles.
The committee expects a high level of commitment from Board members and evaluates each candidate’s leadership and experience, skills, expertise and character traits, including the candidate’s ability to devote sufficient time to Board and committee meetings in light of other professional commitments. The committee also reviews whether a potential candidate meets Board and/or committee
membership requirements, as set forth in our Corporate Governance Principles, determines whether a potential candidate is independent according to the Board’s established criteria, and evaluates the potential for a conflict of interest between the director and the Company.
Historically, when vacancies have occurred, or when our Board determined that increasing its size was appropriate, candidates have been recommended to the committee by other Board members or the chief executive officer. The committee, however, will consider and evaluate any shareholder-recommended candidates by applying the same criteria used to evaluate candidates recommended by directors or management. The committee also has authority to retain a recruitment firm if it deems it advisable. Shareholders who wish to suggest an individual for consideration for election to the Board of Directors may submit a written nomination to the Corporate Secretary of the Company, 533 Maryville University Drive, St. Louis,1350 Timberlake Manor Parkway, Chesterfield, Missouri 63141,63017, along with the shareholder’s name, address and number of shares of common stock beneficially owned; the name of the individual being nominated and number of shares of common stock beneficially owned by the nominee; the candidate’s biographical information, including age, business and residential addresses, and principal occupation for the previous five years, and the nominee’s consent to being named as a nominee and to serving on the Board. A description of factors qualifying or recommending the nominee for service on the Board would also be helpful to the committee in its consideration. To assist in the evaluation of shareholder-recommended candidates, the committee may request that the shareholder provide certain additional information required to be disclosed in our proxy statement under Regulation 14A of the Securities Exchange Act of 1934 (the “Exchange Act”). If the committee determines a candidate, however proposed, is suitable for Board membership, it will make a recommendation to the Board for its consideration.
Under our bylaws, shareholders may also nominate candidates for election at an annual meeting of shareholders. SeeShareholder “Shareholder Proposals for 20162018 Annual MeetingMeeting” for details regarding the procedures and timing for the submission of such nominations.
Director nominees submitted through this process will be eligible for election at the annual meeting, but will not be included in the Company’s proxy materials prepared for the meeting.
Stock Ownership Guidelines
In order to help align the financial interests of our non-employee directors with those of our shareholders, our Corporate Governance Principles provide that our non-employee directors must maintain ownership of our common stock with a value of at least five times the director’s annual retainer. New directors are given a period of five years to attain full compliance with these requirements.
For purposes of these determinations, stock ownership includes shares of our common stock which are owned directly or by family members residing with the director, or by family trusts, as well as vested options, vested and deferred restricted stock equivalents and unvested restricted stock equivalents, unless they are subject to achievement of performance targets, and common stock or stock equivalents credited to a director under our savings investment plan or our deferred compensation plan. At the current time, all of our directors are in compliance with these guidelines.
Communicating Concerns to the Board
We have established several means for shareholders or others to communicate their concerns to our Board. If the concern relates to our financial statements, accounting practices or internal controls, the concern should be submitted in writing to Mr. John R. Roberts,Daniel J. Heinrich, the chairman of our Audit Committee, in care of the Corporate Secretary of the Company at our headquarters address. If the concern relates to our governance practices, business ethics or corporate conduct, the concern may be submitted in writing to Mr. John C. Hunter, III, the chairman of the Nominating and Executive Compensation Committee, or Mr. R. David Hoover, our Lead Independent Director and the chairman of the Finance and Oversight Committee, in care of the Corporate Secretary of the Company at our headquarters address. If the shareholder is unsure as to which category his or her concern relates, he or she may communicate it to R. David Hoover, our Lead Independent Director, or any one of the independent directors in care of the Company’s Corporate Secretary at our headquarters address.
Our “whistleblower” policy prohibits the Company or any of its employees from retaliating or taking any adverse action against anyone for raising a concern. If a shareholder or employee nonetheless prefers to
raise his or her concern in a confidential or anonymous manner, he or she may call Global Compliance Services’ AlertLine, our outside service provider, toll-free at 877-521-5625,855-405-6557, or leave a confidential message at our web address: https://energizer.alertline.com. Confidential letters may also be sent to any independent director at:
AlertLine
PMB 3767
13950 Ballantyne Corporate Place
Charlotte, North Carolina 28273
U.S.A.www.edgewell.ethicspoint.com.
We provided several elements of compensation to our directors for service on our Board during fiscal 2014.2016. The Nominating and Executive Compensation Committee, which makes recommendations to the full Board regarding director compensation, strives to set director compensation at the 50th percentile of the peer group. This peer group, which can be found under “Executive Compensation—Compensation Discussion and Analysis—Implementation of the Compensation Program,” has been selected for purposes of evaluating our executive compensation based on market data provided by the committee’s independent consultant, Meridian. The committee and the Board approved changes to director fees that were effective as of December 31, 2013, described below under “—Retainers and Meeting Fees.”
Retainers and Meeting Fees
From October 1, 2013 to December 31, 2013, all theAll directors, other than Mr. Ward KleinHatfield and Mr. James Johnson,Klein, received an annual retainer of $100,000 for serving on the Board and its committees in fiscal 2016. Mr. Hatfield and Mr. Klein received no compensation other than their compensation as the President and Chief Executive Officer and Executive Chairman, respectively, for their service on the Board and its committees. Ms. Long joined our Board on July 6, 2016 and received a pro rata portion of the following compensation package for serving onannual retainer.
From October 1, 2015 through December 31, 2015, members of the Board or its committeesalso received:
Fee for each Board meeting in excess of six meetings per year | $ | 1,500 | ||
Fee for each Committee meeting in excess of six meetings per year | $ | 1,500 |
The fee paid for fiscal 2014. Mr. Klein receives no compensation other than his compensation as the Chief Executive Officer for his service on theattendance at Board and its committees. Mr. Johnson joinedCommittee meetings was discontinued effective December 31, 2015 to acknowledge that our Boarddirectors provide valuable services to our Company outside as well as during meetings and our Nominating and Executive Compensation Committee after fiscal 2013 and began receiving fees for fiscal 2014 after he joined our Board on November 3, 2013.to lessen the administrative burden of the number of payments that were required to be processed per director each year.
Annual retainer | $ | 65,000 | ||
Fee for each Board meeting | $ | 1,500 | ||
Fee for each committee meeting | $ | 1,500 |
The lead independent director receives an additional $50,000 annual retainer. The chairpersons of the committees also receivedreceive an additional annual retainer of $15,000$20,000 for each committee that they chaired, and the chairman of the Board received an additional annual retainer of $35,000 for his services as chairman.chair.
In connection with their annual review of director compensation, the Board and the Nominating and Executive Compensation Committee approved certain changes to director compensation effective December 31, 20132016 to increasereduce the annual retainer paid to each director, and to reduce fees paid per Board and committee meeting to only pay directors a fee for meetings exceeding a certain threshold per year. The Board and the committee believed that these changes regularize director compensation by reflecting that our directors provide valuable services to our Company outside as well as during meetings. Elimination of a fee for each meeting also lessens the administrative burden of the number of payments that must be processed perlead independent director each year. The Board and the committee also approved an increase to the annual retainer paid to the chairman of the Board and the chairpersons of the committees, so that such fees would be commensurate to what is paid by our peer companies.$25,000.
From January 1, 2014, all directors, other than Mr. Ward Klein, received a pro rata portion of the following compensation package for serving on the Board or its committees in fiscal 2014. Mr. Klein receives no compensation other than his compensation as the Chief Executive Officer for his service on the Board and its committees.
Annual retainer | $ | 100,000 | ||
Fee for each Board meeting in excess of six meetings per year | $ | 1,500 | ||
Fee for each committee meeting in excess of six meetings per year | $ | 1,500 |
The chairpersons of the committees also received a pro rata portion of an additional annual retainer of $20,000 for each committee that they chaired, and the chairman of the Board received an additional annual retainer of $50,000 for his services as chairman.
Deferred Compensation Plan
Non-employee directors are permitted to defer all or a portion of their retainers and fees under the terms of our deferred compensation plan. Deferrals may be made into (a) the Energizer common stock unit fund, which tracks the value of our common stock; (b) the
prime rate option under which deferrals are credited with interest at the prime rate quoted by The Wall Street Journal; or (c) any of the measurement fund options which track the performance of the Vanguard investment funds offered under our savings investment plan, a 401(k) savings plan available generally to our salaried U.S. employees. Deferrals in the deferred compensation plan are paid out in a lump sum in cash within 60 days following the director’s termination of service on the Board. Effective April 1, 2014, option (c) above was no longer available as a deferral option for non-employee directors.
Restricted Stock Equivalents
Initial Grant. New non-employee directors that may be appointed or elected to the Board receive a grant of restricted stock equivalents with a grant-date value of $100,000, which equivalents vest three years from the date of grant. In connection with hisher appointment to the Board effective November 3, 2013, Mr. JohnsonJuly 6, 2016, Ms. Long received this grant.a grant of 1,187 restricted stock equivalents, with a value of approximately $100,000.
Annual Grant. On the first business day of January of each year, each non-employee director is credited with a restricted stock equivalent award under our Second Amended and Restated 2009 Incentive Stock Plan. The value of the award as of January 2, 20141, 2016 was $110,000. This award vests one year from the date of grant. Directors have the option to defer the delivery of shares upon vesting of this award.
Notwithstanding the terms and provisions of our non-employee director compensation policy, the Board unanimously agreed that its members should not receive an annual restricted stock equivalent award for the 2016 fiscal year. The Board determined that a portion of the one-time restricted stock equivalent award received by its members at the time of the Separation in July 2015 (having a value of $200,000 and with vesting three years from the date of grant) was in lieu of the fiscal year 2016 annual grant. In connection with her appointment to the Board effective July 6, 2016, Ms. Long received a grant of 653 restricted stock equivalents, with a value of approximately $55,000, representing a pro rata portion of the annual restricted stock equivalent award.
In connection with their annual review of director compensation, the Board and the Nominating and Executive Compensation Committee approved changes to director compensation effective December 31, 2016 to increase the annual grant of restricted stock equivalents to each non-employee director by $15,000 to $125,000.
Deferred Compensation Plan
Non-employee directors are permitted to defer all or a portion of their retainers and fees under the terms of our deferred compensation plan. Deferrals may be made into (i) the Edgewell common stock unit fund, which tracks the value of our common stock; or (ii) the prime rate option under which deferrals are credited with interest at the prime rate quoted by The Wall Street Journal. Deferrals in the deferred compensation plan are paid out in a lump sum in cash within 60 days following the director’s termination of service on the Board.
Personal Use of Company-Owned Aircraft
For fiscal 2014,2016, until his retirement on July 6, 2016, Mr. Ward Klein, the chiefour former executive officer and a member of the Board,chairman, was permitted to use our aircraft for personal travel for up to 40 flight hours per year when the aircraft werewas not being used on business related trips. Family members and guests arewere authorized to accompany him on business or personal flights on our aircraft. However, Mr. Klein iswas not reimbursed for any taxes associated with (i) his personal use of the aircraft, or (ii) the personal use by his family members and guests. In fiscal 2014,2016, the value of Mr. Klein’s personal use of our company-owned aircraft was $141,675.
As noted under “—Director Independence” above,$75,224. We jointly own our aircraft are jointly owned with one other corporation in order to share the fixed costs associated with such ownership, although we pay all variable operating costs associated with each flight.
NON-EMPLOYEE DIRECTOR COMPENSATION TABLEFOR FISCAL 2016
| Name | Fees Earned or Paid in Cash (3) | Stock Awards (4)(5)(6) | Option Awards (7) | Non-Equity Incentive Plan Compensation | Change in Pension Value and Non- Qualified Deferred Compensation Earnings | All Other Compensation (8)(9) | Total | |||||||||||||||||||||
B.G. Armstrong | $ | 100,250 | $ | 110,000 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 210,250 | ||||||||||||||
D.J. Heinrich | $ | 100,250 | $ | 110,000 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 210,250 | ||||||||||||||
R.D. Hoover | $ | 114,500 | $ | 110,000 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 224,500 | ||||||||||||||
J.C. Hunter | $ | 116,000 | $ | 110,000 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 226,000 | ||||||||||||||
James C. Johnson(1) | $ | 89,972 | $ | 210,000 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 299,972 | ||||||||||||||
J.E. Klein | $ | 98,750 | $ | 110,000 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 208,750 | ||||||||||||||
W.P. McGinnis | $ | 95,750 | $ | 110,000 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 205,750 | ||||||||||||||
J.P. Mulcahy | $ | 142,000 | $ | 110,000 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 252,000 | ||||||||||||||
P.M. Nicholson(2) | $ | 39,185 | $ | 110,000 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 149,185 | ||||||||||||||
J.R. Roberts | $ | 119,000 | $ | 110,000 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 229,000 | ||||||||||||||
Name
| Fees Earned or (2)
| Stock Awards (3)(4)(5)
| Option Awards (6)
| Non-Equity Incentive Plan Compensation
|
Change in Pension Value and Non- Qualified Deferred Compensation Earnings
| All Other Compensation (7)
| Total
| |||||||||||
Daniel J. Heinrich
|
|
$127,500
|
|
$0
|
$0
|
$0
|
$0
|
$0
|
|
$127,500
|
| |||||||
Carla C. Hendra
|
|
$103,000
|
|
$0
|
$0
|
$0
|
$0
|
$0
|
|
$103,000
|
| |||||||
R. David Hoover
|
|
$160,500
|
| $0
|
$0
|
$0
|
$0
|
$0
|
|
$160,500
|
| |||||||
John C. Hunter, III
|
|
$123,000
|
| $0
|
$0
|
$0
|
$0
|
$0
|
|
$123,000
|
| |||||||
James C. Johnson
|
|
$107,500
|
| $0
|
$0
|
$0
|
$0
|
$0
|
|
$107,500
|
| |||||||
Elizabeth Valk Long (1)
|
|
$ 25,000
|
| $155,000
|
$0
|
$0
|
$0
|
$0
|
|
$180,000
|
| |||||||
Rakesh Sachdev
|
|
$106,000
|
| $0
|
$0
|
$0
|
$0
|
$0
|
|
$106,000
|
| |||||||
| (1) |
| This column reflects retainers |
| (3) | This column reflects the aggregate grant date fair value, in accordance with Financial Accounting Standards Board (“FASB”), Accounting Standards Codification (“ASC”) Section 718, of the restricted stock equivalent |
| (4) | The number of vested but deferred stock equivalents held by a director as of September 30, |
| years of the date of grant, up to a limit per individual. This program was discontinued in 2003. |
| (5) | Upon |
| (6) | No stock options were granted to non-employee directors in fiscal year |
| The following items |
| (i) | The directors are covered under the terms of our general directors’ and officers’ liability insurance policies, the premiums for which are a general expense of the |
| (ii) | We provide transportation and lodging for out-of-town directors attending Board and committee |
| (iii) | The directors may make requests for contributions to charitable organizations from the |
| time. The trustees of that trust, all employees of the Company, have determined to honor such requests which are in accordance with the charitable purpose of the trust, and which do not exceed $10,000 in any year. The directors may request contributions in |
| excess of that amount, but such requests are at the sole discretion of the trustees. All contributions are made out of the funds of the trust, and are not made in the name of the requesting director. The Company will continue to honor requests under the charitable trust guidelines as long as funds exist at an appropriate level to do so. |
| (iv) | The non-employee directors may be provided from time to time with samples of our products with an incremental cost of less than $50. |
ITEM 2. RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITOR
Our Audit Committee, in accordance with authority granted in its charter by the Board, appointed PricewaterhouseCoopers LLP (“PwC”) as independent auditor for the current fiscal year. PwC has served as our independent auditor for every fiscal year since 2000, and PwC has begun certain work related to the 20152017 audit as approved by the Audit Committee. Information on independent auditor fees for the last two fiscal years is set forth below. The Board and the Audit Committee believe that the retention of PwC to serve as independent auditor is in the best interests of the Company and its shareholders. In making this determination, the Board and the Audit Committee considered a number of factors, including:
Audit Committee members’ assessment of PwC’s performance
Management’s assessment of PwC’s performance
PwC’s independence and integrity
PwC’s fees and the quality of services provided to the Company
PwC’s global capabilities and knowledge of our global operations
A representative of PwC will be present at the 20152017 Annual Meeting and will have an opportunity to make a statement, if desired, as well as to respond to appropriate questions.
Although NYSE listing standards require that the Audit Committee be directly responsible for selecting and retaining the independent auditor, we are providing shareholders with the means to express their views on this issue. Although this vote will not be binding, in the event the shareholders fail to ratify the appointment of PwC, the Audit Committee will reconsider its appointment. Even if the appointment is ratified, the Audit Committee in its discretion may direct the appointment of a different independent auditing firm at any time during the year if the Audit Committee determines that such a change would be in the best interests of the Company and its shareholders.
Vote Required. The affirmative vote of a majority of the voting power represented in person or by proxy and entitled to vote is required for ratification.
THE MEMBERS OF THE AUDIT COMMITTEE AND THE BOARD OF DIRECTORS
The members of the Audit Committee and the Board of Directors recommend a vote RECOMMEND A VOTEFOR ratification of the appointment of PwC as the Company’s independent auditor for fiscal year 2015. RATIFICATION OF THE APPOINTMENT OF
Fees Paid to PricewaterhouseCoopers LLPPWC AS THE COMPANY’S INDEPENDENT AUDITOR FOR FISCAL YEAR 2017.
(in thousands)
| FY 13 | FY 14 | |||||||
Audit Fees | $ | 4,383 | $ | 4,852 | ||||
Audit-Related Fees | 31 | 950 | (1) | |||||
Tax Fees: | ||||||||
Tax Compliance/preparation | 104 | 72 | ||||||
Other Tax Services | 1,363 | 937 | ||||||
|
|
|
| |||||
Total Tax Fees | 1,467 | 1,009 | ||||||
All Other Fees | 0 | 0 | ||||||
|
|
|
| |||||
Total Fees | $ | 5,881 | $ | 6,811 | ||||
|
|
|
| |||||
Services Provided by PricewaterhouseCoopers LLP
The table above discloses fees paid to PwC during the last two fiscal years for the following professional services:
Audit Fees—These are fees for professional services performed by PwC for the audit of our annual financial statements and review of financial statements included in our 10-Q filings, and services that are normally provided in connection with statutory and regulatory filings or engagements.
Audit-Related Fees—These are fees for assurance and related services performed by PwC that are reasonably related to the performance of the audit or review of our financial statements. This includes: employee benefit and compensation plan audits; due diligence related to mergers and acquisitions; internal control reviews; attestations by PwC that are not required by statute or regulation; and consulting on financial accounting/
|
Tax Fees—These are fees for professional services performed by PwC with respect to tax compliance, tax advice and tax planning. This includes preparation of original and amended tax returns for the Company and our consolidated subsidiaries; refund claims; payment planning; tax audit assistance; and tax work stemming from “Audit-Related” items.
All Other Fees—These are fees for other permissible work performed by PwC that does not meet the above category descriptions. This includes litigation assistance, tax filing and planning for individual employees involved in our expatriate program, tax advice on international compensation issues and various local engagements that are permissible under applicable laws and regulations.
Audit Fees Paid to Other Firms
(in thousands)
| FY 13 | FY 14 | |||||||
Audit Fees | $ | 578 | $ | 644 | ||||
Audit Committee Pre-Approval Policy
The Audit Committee has a formal policy concerning approval of all services to be provided by our independent auditor, including audit, audit-related, tax and other services. The policy requires that all services the auditor may provide to us must be pre-approved by the committee.Audit Committee. The chairman of the committeeAudit Committee has the authority to pre-approve permitted services that require action between regular committee meetings, provided he reports to the
committee at the next regular meeting. Early in each fiscal year, the committeeAudit Committee approves the list of planned audit and non-audit services to be provided by the auditor during that year, as well as a budget estimating spending for such services for the fiscal year. Any proposed services exceeding the maximum fee levels set forth in that budget must receive specific pre-approval by the Audit Committee. The committeeAudit Committee approved all services provided by PwC during fiscal 2014.2016 and fiscal 2015.
Services Provided by PricewaterhouseCoopers LLP
The following table discloses fees paid to PwC during the last two fiscal years for the following professional services:
Fees Paid to PricewaterhouseCoopers LLP (in thousands)
| ||||||||
Type
|
FY 2015
|
FY 2016
| ||||||
Audit Fees
|
| $6,253
|
|
| $3,361
|
| ||
Audit-Related Fees
|
| 2,460
|
|
| 31
|
| ||
Tax Fees
|
| 766
|
|
| 312
|
| ||
All Other Fees
|
| 0
|
|
| 662
|
| ||
Total Fees
|
| $9,479
|
|
| $4,366
|
| ||
The Audit Committee of the Company’s Board of Directors assists the Board in its oversight of corporate governance by overseeing the quality and integrity of the accounting, auditing, and reporting practices of the Company. The Audit Committee operates in accordance with a written charter, which was adopted by the Board. A copy of that charter is available on the Company’s website, www.edgewell.com, click on “Investors,” then “Corporate Governance,” then “Audit Committee Charter.” The Audit Committee consists entirely of non-employee directors that are independent, as defined in Section 303A.02required by the listing standards of the New York Stock Exchange Listed Company Manual.NYSE and the rules and regulations of the SEC.
Management is responsible for the Company’s internal controls and the financial reporting process. The Company’s independent accountants, PricewaterhouseCoopers LLP (“PwC”), are responsible for performing an independent audit of the Company’s consolidated financial statements and internal control over financial reporting in accordance with the standards ofestablished by the Public Company Accounting Oversight Board (United States) (the “PCAOB”) and issuing a report thereon. The committee’s responsibility is to monitor and oversee these processes.processes on behalf of the Board.
The Audit Committee has oversight responsibilities for reviewing the services performed by PwC and retains sole authority to select, evaluate and replace the outside auditors. In fulfilling its oversight responsibilities, the committee discusses PwC’s overall scope and execution of the annual audit, as well as other matters required to be discussed by PCAOB auditing standards. The Audit Committee is responsible for approval of the proposed audit fees and annually evaluates the qualifications, performance and independence of PwC and its lead audit partner. Further, in conjunction with the mandated rotation of the independent auditor’s lead audit partner, the Audit Committee is directly involved in the selection of the new lead audit partner.
The Audit Committee has received the written disclosures from PwC required by the applicable standards of the PCAOB regarding the independent accountant’s communications with the Audit Committee concerning independence, and has discussed the independence of PwC with members of that firm. In doing so, the committee considered whether the non-audit services provided by PwC were compatible with its independence. The committee concluded that the independent auditors’ independence has not been impaired.
The Audit Committee selected PwC as the Company’s independent registered public accountants for fiscal year 2017, subject to shareholder ratification. PwC has served as the Company’s independent registered public accounting firm since 2000. The Audit Committee considered several factors in selecting PwC, including the firm’s independence and internal quality controls, the overall depth of talent, their experience with the Company’s industry, and their familiarity with the Company’s business and internal control over financial reporting.
With respect to the Company’s audited financial statements for the Company’s fiscal year ended September 30, 2014,2016, management of the Company has represented to the committee that the financial statements were prepared in accordance with generally accepted accounting principles and theprinciples. The committee has reviewed and discussed those financial statements with management and PricewaterhouseCoopers LLP, the Company’s independent accountants. The Audit Committee has also discussed with PricewaterhouseCoopers LLP the matters required to be discussed by Auditing Standard No. 16, as adopted by the PCAOB.
In fulfilling its oversight responsibilities for reviewing the services performed by Energizer’s independent registered public accountants, the Audit Committee retains sole authority to select, evaluate and replace the outside auditors, discusses with the independent registered public accountants the overall scope of the annual audit and the proposed audit fees, and annually evaluates the qualifications, performance and independence of the independent registered public accountants and its lead audit partner.
The Audit Committee has received the written disclosures from PricewaterhouseCoopers LLP required by PCAOB Rule 3526 (Communication with Audit Committees Concerning Independence), as modified or supplemented, and has discussed the independence of PricewaterhouseCoopers LLP with members of that firm. In doing so, the committee considered whether the non-audit services provided by PricewaterhouseCoopers LLP were compatible with its independence. The Audit Committee met with the internal auditors and PricewaterhouseCoopers LLP,PwC, with and without management present, to discuss the results of their examination, the evaluations of the Company’s internal controls and the overall quality of the Company’s financial reporting. This review included a discussion of the quality and the acceptability of the Company’s financial reporting and system of internal controls, including the clarity of disclosures in the financial statements, reasonableness of significant accruals, reserves and allowances, critical accounting policies and estimates and risk assessment.
Based on the review and discussions referred to above, the Audit Committee recommended to the Company’s Board of Directors that the audited financial statements for the fiscal year ended September 30, 20142016 be included in the Company’s Annual Report on Form 10-K for that year and has selected PricewaterhouseCoopers LLP asfor filing with the Company’s independent registered public accountants for fiscal year 2015, subject to shareholder ratification.SEC.
Respectfully submitted,
Daniel J. Heinrich, Chairman James C. Johnson Elizabeth Valk Long Rakesh Sachdev
| ||
|
No portion of this Audit Committee Report shall be deemed to be incorporated by reference into any filing under the Securities Act of 1933 as amended (the “Securities Act”), the Securities Exchange Act of 1934 (the “Exchange Act”), or through any general statement incorporating by reference in its entirety the Proxy Statement in which this report appears, except to the extent that the Company specifically incorporates this report or a portion of it by reference. In addition, this report shall not be deemed to be filed under either the Securities Act or the Exchange Act.
The following narratives and tables discuss the compensation paid in fiscal 20142016 to our chief executive officer, chief financial officer, and our other three most highly compensated executive officers, whom we refer to collectively as our “named executive officers”.officers.” Our named executive officers for 20142016 were:
Ward M. Klein, Chief Executive Officer;
Daniel J. Sescleifer, Executive Vice President and Chief Financial Officer;
David P. Hatfield, Chairman (since July 6, 2016), President and Chief Executive Officer;
Alan R. Hoskins, PresidentChief Compliance Officer and Chief Executive Officer, Energizer Household Products; and
Mark S. LaVigne, Vice President, General Counsel & Secretary
COMPENSATION DISCUSSION AND ANALYSIS
Principles of the EnergizerEdgewell Compensation Program
Our commitment to maintaining competitive compensation practices has resulted in strong shareholder support of our compensation philosophy, with over 93%approximately 91% of the votes cast in favor of the advisory resolution on executive compensation at our 20142016 Annual Meeting. TheMeeting of Shareholders. Discussed below are the principles we follow are:that underlie our compensation philosophy.
Pay for Performance
OurThe primary goal of our compensation program is to instill a “pay for performance” culture throughout our organization, with a significant portion of targeted compensation for our named executive officers dependent upon achievement of performance goals and forfeited if goals are not achieved.
Competitive Total Compensation Packages
We strive to attract and retain strong executive leaders, with competitive total compensation opportunities near the 50th percentile of our peer group. Our compensation program is designed to motivate these leaders withthrough incentive awards for the achievement of objectives aligned with operating results and execution of significant initiatives.
Alignment with Shareholder Interests
AIn order to align the compensation received by our executives with the returns received by our shareholders, a substantial portion of the named executive officers’ total compensation ishas historically been in the form of restricted stock equivalents and we havestock options. We further align the interests of our executive officers and shareholders through our use of stock ownership guidelines for executive officers and prohibitions on the hedging of Company stock, in order to align the compensation received by executives with the returns received by our shareholders.stock.
Summary of Key Elements of Executive Compensation in Fiscal 20142016
In the beginning of fiscal 2013, ourOur Nominating and Executive Compensation Committee (the “NECC” or the “committee”) made several significant changesis responsible for determination of executive officer compensation. As a general principle, the NECC seeks to provide an annual compensation program that includes, in addition to base salary, a combination of short-term and long-term incentive programs based on Company performance as measured by certain financial performance metrics, thus linking executive officer compensation in order to improve its linkage to shareholder value and streamlinevalue.
In determining executive compensation programs.
Continued enhancements to the long-term incentive program
Beginning infor fiscal 2013,2016, the NECC adopted three metrics fortook into account the long-term incentive program, replacingunique circumstances of the Adjusted EPS metric usedprevious fiscal year, when the mid-year Separation of the Household Products business from the Company created an enhanced need to use compensation to retain executives during a time of uncertainty and change.
Base Salary. Traditionally, we set the salaries of our executive officers at the beginning of each fiscal year. In fiscal 2016, we set salaries in past years. AtNovember 2015, at the start of the fiscal 2014,year. In determining executive officer salaries at that time, the NECC reviewedtook into consideration that these salaries had been recently adjusted in July 2015, at the compensation elementstime of the Separation, and determined thatto make no changes to the base salaries of the named executive officers other than Ms. Sheldon, who was granted a 5% increase to bring her base salary more in-line with market compensation elements adopted infor her position.
Annual Cash Bonus. Traditionally, we establish an annual short-term incentive program at the start of each fiscal 2013 continuedyear, to be consistent withmeasured at the conclusion of the fiscal year based on performance against metrics determined at the beginning of the year by the NECC. In fiscal 2016, we established an annual bonus program for our compensation philosophy and approvedexecutive officers effective October 1, 2015, the samestart of the fiscal year, utilizing three metrics for fiscal 2014:to measure performance:
adjusted return on invested capital (ROIC),Restricted Stock Equivalent and Option Awards. Traditionally, we have granted long-term incentive awards in the first quarter of the fiscal year. In the past few fiscal years, we have increasingly awarded restricted stock equivalents tied to support the Company’s focus on cash flow, including improved working capital performance, and to emphasize the importance of capital allocation decisions;
cumulative adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), to emphasize growth in core operating earnings; and
relative total shareholder return to further ensure that realized results are aligned with shareholder value creation results from ROIC and EBITDA can be further impacted by relative total shareholder return.
For fiscal 2014, to continueperformance-based metrics or stock options to enhance the emphasis on Company performance,performance. During fiscal 2015, the NECC adjusted the mix ofawarded time-based restricted stock equivalents by increasingin November 2014, pursuant to the performance-based portion to 75% of theusual award timing, but also awarded both time-based restricted stock equivalents availableand stock options in July 2015 in connection with the Separation, in recognition of the efforts of the named executive officers in executing the Separation, encouraging their retention, and aligning their interests with those of the shareholders. At that time, the NECC indicated its intention to be earnednot grant long-term incentive awards for fiscal 2016, reflecting its view that a portion of the July 2015 grant represented an acceleration of what would otherwise have been granted at target. This is an increase from 54%the start of the 2016 fiscal year. For information on the July 2015 grants, see the “Summary Compensation Table.” Accordingly, for fiscal 2016, the NECC did not grant any long-term incentive program awards of either restricted stock equivalents at target inor stock options to our executive officers. The NECC did indicate its view that it would likely reinstitute annual first quarter long-term incentive award grants to executive officers during fiscal 2013.2017, which could consist of time-based restricted stock equivalents, performance-based restricted stock equivalents, stock options, or some combination of these awards.
Multiple metrics of the short-term incentive programExecutive Severance Plan
Beginning in fiscal 2013,. In September 2016, the NECC also approved four metricsadopted an Executive Severance Plan for certain of our executives, including the named executive officers. The Executive Severance Plan provides benefits to measure performanceparticipants in the short-term incentive program, replacingevent of an involuntary termination without “cause” or a voluntary termination as a result of “good reason,” as such terms are defined in the Adjusted EPS metric used in past years. Atplan. In adopting the start of fiscal 2014,plan, the NECC reviewed the compensation elements and determinedconsidered that the compensation elements adoptedCompany does not provide employment agreements to its executives, and that market practice at peer companies is to provide executives with certain benefits in fiscal 2013 continuedthe event of such terminations, and the NECC therefore concluded that the plan would be a significant benefit to be consistent with our compensation philosophy and approved the same metrics for fiscal 2014:
Company-wide cost savings associated with restructurings, which constitutes 20% of the weighting, to focus on delivering the three-year global cost savings to investors announced by the Company to be paid annually as cost savings for the multi-year restructuring project are achieved;in attracting and retaining key executives.
adjusted earnings per share (EPS), which constitutes 30% of the weighting, to encourage executives to deliver on bottom-line results;
Company-wide pre-tax adjusted operating profit, which constitutes 30% of the weighting, to reward operating performance; and
adjusted net working capital as a percentage of sales (NWC), which constitutes 20% of the weighting, to encourage improved management of working capital.
Elements of Compensation
The elements of our fiscal 20142016 executive compensation program as well as the purpose of each item are shown in the following table:
Compensation Element | Description | Purpose | ||
Base Salary | Annual fixed salary, payable in cash. | Helps attract and retain key
| ||
| Bonuses are payable in cash upon achievement of • Adjusted EPS •
• Adjusted Net Working Capital | Promotes achievement of Company-wide performance goals. | ||
Awards | For performance-based awards, promotes achievement of
Provides a direct link to
Vesting requirements help to | |||
Option Awards | No awards made in fiscal 2016 as a result of awards made at the time of Separation. We anticipate option awards to be made in fiscal 2017. | Provides a direct link to shareholder interests by tying a significant portion of executive’s personal wealth to the performance of our common stock. Vesting requirements help to retain key employees. | ||
Supplemental Retirement Plans | Executives participate in the retirement plans available for all employees; the supplemental retirement plans restore retirement benefits otherwise limited by federal statute. | Ensures that the executives receive the same relative value compared to other employees who are not subject to these limits. | ||
Executive Severance Plan | Executives are entitled to benefits in the event they are involuntarily terminated without cause or they resign for good reason. | Helps attract and retain key executives by offering a competitive total compensation package. | ||
Change of Control Severance Agreements | Executives are entitled to benefits in the event of a change of control only if they are involuntarily terminated | Allows executives to make decisions focusing on the interests of shareholders while using a control plus termination) to avoid a windfall. | ||
Objectives
The key objective of our compensation philosophy is to reward management based upon their success in increasing shareholder value.value and achieving operational results. With a focus on achieving this overarching goal, the overall executive compensation program is designed to provide a compensation package that will enable us to attract and retain highly talented executives and maintain a performance-oriented culture.
Pay for Performance
Our goal is to instill a “pay for performance” culture throughout our operations, with total compensation opportunities targeted near the 50th percentile of our peer group.
In 2014,Traditionally, a significant portion of targeted compensation for our named executive officers, consisting of the annual cash bonus, restricted stock equivalent awards, and three-year equityoption awards, wasis variable—not fixed—compensation, rewarding the named executive officers for the achievement of outstanding and sustained Company performance, which builds shareholder value. We believe this compensation structure offers high potential rewards for superior performance, and significantly lower compensation for results below target.
Competitive Total Compensation Package
Our executive officers are highly experienced, with average industry experience of over 2025 years, and have been successful in diversifying our businesses, improving operating results and sustaining long-term adjusted EPS growth.growth in earnings per share (“EPS”). Because of management’s level of experience and successful track record, as well as the value of maintaining continuity in senior executive positions, particularly in light of the Separation, we view retention of key executives as critical to the ongoing success of our operations. Consequently, we:
| • | target total compensation packages near the 50th percentile of our peer group of companies to help retain key executives and remain competitive in attracting new employees; and |
establish vesting periods for our time-based equity-based awards, to provide additional retention incentives.
Our executive compensation program also includes features to address other compensation-related issues such as retirement concerns of employees, which we believe have played an important role in our executive compensation structure.
Alignment with Shareholder Interests
A significant portion of our traditional compensation program consists of equity grants that align our officers’ interests with those of shareholders by tying a significant portion of the officers’ personal wealthcompensation to the performance of our common stock.
Our In recent years, our incentive compensation program focusesfocused on a combination of short- and long-term profitability metrics and other metrics which motivate the achievement of significant corporate project goals. Specifically, in the short-term incentive plan, we use two profitability metrics, with a combined weighing at 60% of the total annual bonus opportunity, and two project metrics, with a combined weighting at 40% of the total bonus opportunity.
Profitability Metrics
Adjusted EPS (30% weighting), aligned with overallCompany’s performance
Adjusted Operating Profit (30% weighting), aligned with underlying operational performance
Project Metrics
Company-Wide Three-Year Global Cost Savings (20% weighting), supporting our 2013 restructuring
Net Working Capital as a Percentage of Sales (20% weighting), supporting our net working capital initiative
During fiscal 2014, the long-term incentive plan performance restricted stock equivalents, approved in November 2011, vested based on compound annual growth in adjusted EPS over the three year performance period, which aligned targets. Alignment with shareholder interests in adjusted EPS growth andis one of the key factors underlying our grant of stock option awards, as the NECC believes that the award of options at the then-current market price aligns management with shareholder desire for stock price appreciation during the performance period.appreciation.
Implementation of the Compensation Program
Our Board of Directors has delegated authority to the NECC to approve all compensation and benefits for our executive officers. The committee sets executive salaries and bonuses, reviews executive benefit programs, including change in control severance agreements, and grants cash bonus awards to our executive officers under our cash bonus program, as well as equity awards to executivesour executive officers under our Second Amended and Restated 2009 Incentive Stock Plan. For those employees below the executive officer level, compensation and benefits are determined by management of the Company, under a delegation of authority from the NECC.
To assist the NECC in evaluating our executive officer and director compensation programs, on a competitive market basis, the committee has directly retained an outsideindependent consultant, Meridian Compensation Partners LLC (“Meridian”), which is asked to:
provide comparative market data for our peer group (and other companies, as needed) with respect to the compensation of the named executive officers andas well as the outside directors;
analyze our compensation and benefit programs relative to our peer group;
advise the committee on trends in compensation and governance practices and on management proposals with respect to executive compensation.
The NECC has reviewed the independence of Meridian and has determined that Meridian has no conflicts of interest. In particular:
Meridian does not provide any other services to the Company.
The committee has sole authority to retain or replace Meridian in its role as its consultant.
The committee regularly reviews the performance and independence of Meridian, as well as fees paid.
Management has retained a separate consultant, Willis Towers Watson, which advises management (but not the committee) on market trends in executive compensation, provides ad hoc analysis and recommendations, and reviews and comments on compensation proposals.
We believe that having separate consultants promotes Meridian’s independence.
A representative of Meridian attends committee meetings as requested to serve as a resource on executive officer and director compensation matters. In order to encourage independent review and discussion of executive compensation matters, the committee meets with Meridian in executive session.
Meridian, with inputdirection from the committee, hasNECC, developed a customizedcustom peer group of 24 companies from which the NECC benchmarks our compensation program. Peer companies were selected based on a variety of criteria, including consumer products businesses, businesses with a strong brand focus, competitors for executive talent, and similarly-sized businesses in terms of revenues and market capitalization. The NECC reviewed and approved the use of this custom peer group.
Meridian uses data provided by that peer group to determine a market comparison for our executiveMarket compensation program. Total compensation opportunitiesvalues are targeted at the 50th percentilebased on practices of the peer group. The market comparison is made for eachEach key component of compensation, including base pay, target annual bonus, target total cash compensation and target grant-date value of long-term incentives. Meridian also analyzesincentives, is benchmarked against the aggregate equity utilization as compared to the50th percentile of this custom peer group. In addition, Meridian reviews the terms of our change-in-control program for our executives for consistency with market practices.
The custom peer group utilized by Meridian, and approved by the NECC for its review ofuse for fiscal 2014 executive compensation consists2016 was comprised of the following companies. The industries in whichcompanies, and is identical to the companies are engaged are noted: (1) household products; (2) personal care; (3) food and beverage; and (4) apparel.custom peer group adopted by the NECC at the time of Separation:
Church & Dwight Co., Inc. | ||||||
| Elizabeth | ||||||
Hasbro, Inc. | ||||||
| Mead Johnson Nutrition | Newell Brands, Inc. | |||||
Nu Skin Enterprises, Inc. | Perrigo Company PLC | Prestige Brands Holdings, Inc. | Revlon, Inc. | |||
Spectrum Brands Holdings, Inc. | The | |||||
| Tupperware Brands |
The following table provides an overview of how we compared to our peer group companies based on revenue:
| ||||
| ||||
| ||||
| ||||
Results of 20142016 Advisory Vote to Approve Executive Compensation
At our 20142016 Annual Meeting of Shareholders on January 27, 2014,25, 2016, we submitted a proposal to our shareholders for ana non-binding advisory vote on our fiscal year 20132015 compensation awarded to our named executive officers. Our shareholders approved the proposal with approximately 93.7%91% of the votes cast in favor of the proposal. We believe that the outcome of our say-on-pay vote signals our shareholders’ support of the NECC’s approach to executive compensation, specifically our efforts to attract, retain, and motivate our named executive officers.
We were pleased with our shareholders’ support of our fiscal 20132015 compensation program, and the committee continues to review our executive compensation practices to further align our compensation practices with our pay-for-performance philosophy and shareholder interests. We value the opinions of our shareholders and will continue to consider the outcome of future say-on-pay votes, as well as feedback received throughout the year, when making compensation decisions for our named executive officers.
Elements of Compensation
Base Pay
We benchmark base pay against our peer group annually as a guide to setting compensation for key positions, including the named executive officers, in the context of prevailing market practices. Our management and the committee believe an important benchmarkreference point for base salaries is the 50th percentile for the peer group, but also that it is important to consider the interplay of all of the benchmarkedvarious components of total compensation as well as the individual’s performance.
At the beginning of each fiscal year, the committee establishes the salaries of the executive officers (other than the chief executive officer) based on recommendations of the chief executive officer. These recommendations are based on an assessment of the individual’s responsibilities, experience, and individual performance. Where the recommendations of the
chief executive officer and the compensation consultant for the salaries of executives remain within the targeted range relative to the peer group, and the NECC concurs with the assessment of performance, the NECC has historically approvedgiven considerable deference to the recommendations made by the chief executive officer.officer, although the NECC has made adjustments to the recommendations when it feels such revisions are appropriate.
The salary of the chief executive officer is set by the NECC, taking into account the recommendation of the committee’s compensation consultant. In connection with that review,those reviews, Meridian, without input from management, provides the NECC with a range of possible salary and long-term incentive award levels. The NECC uses this information, along with its analysis of the performance and contributions of the chief executive officer against performance goals, to determine an appropriate salary.
The NECC evaluated the annual base salaries of the individuals then serving as executive officers at its November 2015 meeting and determined to make no changes to the base salaries of the named executive officers at its November 2013 meeting andother than Ms. Sheldon, who was granted a 5% increase to bring her base salary more in-line with market compensation for her position. The NECC accordingly set the base salaries of the following named executive officers for fiscal 2014effective November 1, 2016 as follows: Mr. Klein—$1,100,000; Mr. Sescleifer—$550,000; Mr. Hatfield—$550,000; Mr. Hoskins—$460,000 and Mr. LaVigne—$440,000.
| Name | Title | Annual Base Salary | ||||
Mr. Hatfield | Chairman, President and Chief Executive Officer | $900,000 | ||||
Ms. Sheldon | Chief Financial Officer | $525,000 | ||||
Mr. Conrad | Chief Administrative Officer | $390,002 | ||||
Mr. Robertson | Chief Marketing Officer | $418,729 | ||||
Mr. Shanbhag | Chief Legal Officer, Chief Compliance Officer and Secretary | $400,000 | ||||
Incentive Programs
The NECC has annuallytraditionally approved aan annual two-tier incentive compensation structure for our key executives, consisting of an annual performance program, paid in cash, and a three-yearlong-term performance program, generally paid in equity, such as restricted stock equivalents.equivalents or stock options. As noted above, in fiscal 2016, the NECC determined to make no awards under the long-term performance program, in recognition of having made significant long-term performance program awards at the time of Separation in fiscal 2015, a portion of which the NECC viewed as an acceleration of what would otherwise have been granted in fiscal 2016. See the “Summary Compensation Table” for information on the July 2015 grants. Consistent with the requirements for performance-based compensation under Section 162(m) of the Internal Revenue Code of 1986, as amended (the “IRC”), awards to officers under our annual performance program arehave been made under the terms of our shareholder-approved executive officer bonus plan, and the three-yearlong-term performance awards are granted under the terms of our Second Amended and Restated 2009 Incentive Stock Plan.
Annual Cash Bonus Program
Annual cash bonuses to our named executive officers are based on a percentage of the executive’s annual salary, and adjusted based on performance onas compared to metrics determined by the NECC. The 2014 annual bonus program for fiscal 2016 was designed to measure Company-wide performance against fourthree metrics:
Adjusted EPS (30%(50% of the bonus target);
The metrics and targets for the fiscal 2016 annual bonus program for our named executive officer’s bonus target)
officers were chosen based on fulfilling the Company’s business plan for fiscal 2016. The Adjusted Operating Profit (30%EPS metric was chosen to emphasize profit growth and alignment with shareholder interests; the Organic Net Sales Growth metric was selected to emphasize top line growth in our first year as a stand-alone personal care company; and the Adjusted Net Working Capital as a Percent of the named executive officer’s bonus target)Sales metric was utilized to emphasize balance sheet management and improvement.
Company-wide Three-Year Global Cost Savings (20% of the named executive officer’s bonus target)
Adjusted NWC (20% of the named executive officer’s bonus target)
The performance goals for each metric were set by the NECC at the beginning of the fiscal year. The committee assigned individual “bonus targets” to each of the executive officers, based upon individual performance and prevailing market practice information provided by the committee’s consultant. For fiscal 2014, theThe following “bonus targets,” defined as a percentage of the individual’s base pay for the term of the bonus program, were assigned to the named executive officers:following individuals at the NECC’s November 2015 meeting as follows:
| Name | Title | Bonus Target as a Percentage of Base Salary | ||||||
Mr. Hatfield | Chairman, President and Chief Executive Officer | 110% | ||||||
Ms. Sheldon | Chief Financial Officer | 75% | ||||||
Mr. Conrad | Chief Administrative Officer | 65% | ||||||
Mr. Robertson | Chief Marketing Officer | 55% | ||||||
Mr. Shanbhag | Chief Legal Officer, Chief Compliance Officer and Secretary | 60% | ||||||
Mr. Klein - 115%
Mr. Sescleifer - 80%
Mr. Hatfield - 80%
Mr. Hoskins - 80%
Mr. LaVigne - 65%
Under the annual cash bonus program, ourOur named executive officers are eligible to receive overall bonus payouts, if any, only upon achievement of results compared against pre-determined company performance established by the NECC. The NECC has the discretionary authority to reduce bonuses otherwise earned under the company performance metrics described below, and therecash bonus program. No amount of bonus payout to our executive officers is notied to individual performance component ofobjectives.
For the payout. Due to changes inannual bonus program for fiscal 2016, the compensation of the named executives for the period covered by the Cost Savings pool (one of the performance metrics), however, the calculation of the overall bonus payouts differed slightly for each named executive. For fiscal 2014, the following combined weighted payout ratio for each of these named executive officers was 137.43% of the executives was:
Mr. Klein - 171%
Mr. Sescleifer - 167%
Mr. Hatfield - 167%
Mr. Hoskins - 167%
Mr. LaVigne - 156%
These payouts aretarget amount, based on outcomes under the following three performance metrics.
Adjusted EPS
Adjusted EPS means diluted earnings per share, determined in accordance with U.S. generally accepted accounting principles (“GAAP”), subject to adjustment for certain limited matters, including the effects of
acquisitions, divestitures, extraordinary dividends, stock splits or stock dividends, recapitalizations, extraordinary transactions such as mergers or spin-offs, reorganizations, unusual or non-recurring non-cash accounting impacts and costs associated with restructurings.
The threshold, target and stretch achievement levels, and the percent payout at each level, are as follows:
FY14 Annual Bonus
(30% of Bonus Target) | Threshold
35% Payout | Target
100% Payout | Stretch
200% Payout | |||||||||
| Threshold | Target | Stretch | ||||||||||
| (50% of Bonus Target) | 35% Payout | 100% Payout | 200% Payout | |||||||||
Adjusted EPS | $6.90 | $7.30 | $7.70 | $2.95 | $3.28 | $3.61 | ||||||
Bonuses indicated increase proportionately in 1/10th of 1% increments for final results between the goals indicated with maximum bonus at stretch. No bonuses tied to the Company performance are paid for results below the Thresholdthreshold goal. The maximum bonus payout is capped at 200% for Company performance at, or above, the stretch goal.
The NECC, in consultation with management, considered whether to adjust forthe Company’s fiscal 2016 GAAP earnings per share to reflect the negative financial impact (or whether to exercise its negative discretion to disregard the impact) of the followingvarious events when determining the achievement of targets: (i) costs associated with restructuring operations, (ii) costs associated with our efforts to effect our previously announced spin-off of our household products business, and (iii) various integration and transaction costs.the Adjusted EPS target. The NECC revieweddetermined to make adjustments to fiscal 2016 GAAP earnings per share to reflect costs related to the adjustments and, throughSeparation, restructuring costs, charges related to the use of its negative discretion, reduced the adjusted EPS we reported of $7.32 to $7.26, which reduced the amountsale of the Industrial blade business, non-core inventory obsolescence charges and the tax impact on unusual items. After taking into account these adjustments, the NECC determined that, for purposes of the plan, Adjusted EPS for the period was $3.49, resulting in awards payable under the annual bonus plan to 93.5%at 162.1% of target.
Adjusted Operating ProfitOrganic Net Sales Growth
Adjusted Operating ProfitOrganic Net Sales Growth means the percentage growth in Organic Net Sales in the 2016 fiscal year as compared to the 2015 fiscal year. “Net Sales” means net earnings plus taxes and interest expense, subjectsales, as determined in accordance with GAAP, adjusted to adjustmentaccount for certain limited matters, including the effectsimpact of changes in foreign currency, the impact of acquisitions and divestitures, extraordinary dividends, stock splits or stock dividends, recapitalizations, extraordinary transactions such as mergers or spin-offs, reorganizations, and unusual or non-recurring non-cash accounting impacts and costs associated with restructuring.restructurings. “Organic Net Sales” excludes Net Sales from the Company’s former Industrial blade business and in the Company’s
Venezuela operations, which were deconsolidated in the 2015 fiscal year. Organic Net Sales for the 2015 fiscal year are calculated as the sum of (a) Organic Net Sales for the Company’s Personal Care division for the first three quarters of the fiscal year, and (b) Organic Net Sales for the Company in the fourth quarter of the fiscal year (after the Separation of the Household Products business).
The threshold, target and stretch achievement levels, and the percent payout at each level, are as follows:
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| Threshold | Target | Stretch | ||||
| (25% of Bonus Target) | 35% Payout | 100% Payout | 200% Payout | |||
Organic Net Sales Growth | -1.1% | 0.4% | 3.0% |
Bonuses indicated increase proportionately in 1/10th of 1% increments for final results between the goals indicated with maximum bonus at stretch. No bonuses tied to the Company performance are paid for results below the Thresholdthreshold goal. The maximum bonus payout is capped at 200% for Company performance at, or above, the stretch goal.
The NECC in consultation with management, considered whether to adjustdetermined Organic Net Sales Growth for the negative financial impact (or whether to exercise its negative discretion to disregard the impact) of the following events when determining the achievement of targets: (i) costs associated with restructuring operations, (ii) costs associated with our efforts to effect our previously announced spin-off of our household products business, and (iii) various integration and transaction costs. The NECC reviewed the adjustments and, through the use of its negative discretion, reduced the amount of theperiod was 1.4%, resulting in awards and amounts payable under the annual bonus plan from $764.1 to $753.6 resulting in a payout of 44.9%at 138.2% of target.
Company-wide Three-Year Global Cost Savings
Our Company-wide Three-Year Global Cost Savings bonus metric was adopted by the NECC in support of Energizer’s multi-year restructuring program, under which we expected to realize gross annualized pre-tax cost savings of approximately $200 million by fiscal 2015.
Because the restructuring program encompasses a three-year period, the cost savings bonus metric is a pool comprised of 20% of each named executive officer’s total bonus for the three years of the restructuring program. For fiscal 2014, no bonus payment would have been made unless cost savings generated by the restructuring program exceeded $45 million. To the extent cost savings exceeded $45 million; the cost savings generated by the restructuring program would be divided by $200 million, and then multiplied by 100 to give the percentage payout of the three-year pool. In order to encourage performance beyond the initial program targets, if cost savings generated by the program was greater than $200 million but less than $250 million, the portion of the individual’s bonus target attributable to cost savings will be equal to the stretch payout factor (cost savings minus $200 million, divided by $50 million), multiplied by 20% of the individual’s annual bonus target multiplied by 3 (the number of years in the pool), in addition to the amount above. Payout under this program was approved at stretch. In fiscal 2014, the restructuring program generated cost savings of $255 million. Accordingly, the 20% portion of the annual bonus program attributable to Cost Savings paid out 148.4% of the three year pool target, which comprised the remainder of the pool following the initial payout of the pool in fiscal 2013.
Adjusted NWC
Our Adjusted NWC metric was adopted by the NECC in support of Energizer’s working capital management initiative, under which we are committed to improving working capitalNet Working Capital as a percentPercent of sales in excessSales
Adjusted Net Working Capital as a Percent of 400 basis points, over the fiscal 2011 baseline metric of 22.9% which we estimate would result in a reduction of more than $200 million of working capital.
“Adjusted NWC”Sales means Average Net Working Capital divided by net salesNet Sales for the performance period, as adjusted for the effect of restructuring events such as plant closings, sales of facilities or operations and business restructurings;restructurings, and expressed as a percentage.
“Average “Average Net Working Capital” means, as of the end of the performance period, the average of the last four quarter end balances for each of (i) receivables, as reported, less the portion of accrued liabilities representing trade allowance, plus (ii) Inventories,inventories, as reported, minus (iii) accounts payable.
The threshold, target and stretch achievement levels, and the percent payout at each level, are as follows:
FY14 Annual Bonus Proposed
Metric (20% of Bonus Target) | Threshold
35% Payout | Target
100% Payout | Stretch
200% Payout | |||
Adjusted NWC | 17.5% | 16.5% | 15.0% |
Threshold
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Target
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Stretch
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(25% of Bonus Target)
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35% Payout
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100% Payout
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200% Payout
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Adjusted Net Working Capital as a Percent of Sales
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17.3%
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17.0%
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16.2%
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Bonuses indicated increase proportionately in 1/10th of 1% increments for final results between the goals indicated with maximum bonus at stretch. No bonuses tied to the Company performance are paid for results below the threshold goal. The maximum bonus payout is capped at 200% for Company performance at, or above, the stretch goal.
The NECC in consultation with management, considered whether to adjustdetermined Adjusted Net Working Capital as a Percent of Sales for the negative financial impact (or whether to exerciseperiod was 16.1%. While this measure was in excess of the stretch target, and would have resulted in an award pay out under the plan at 200% of target, the NECC exercised its negative discretion and reduced the award pay out with respect to disregard the impact)this metric to 87.3% of the effect of restructuring events when determining the achievement of targets.target. The NECC reviewed the adjustments and determined that the 15% adjusted NWCtarget for Adjusted Net Working Capital as reporteda Percent of Sales should not be reduced andmore appropriately have been set at 16.0%, rather than 17.0%, at the payout understart of fiscal 2016, based on further analysis of Adjusted Net Working Capital during fiscal 2016. The NECC then measured the Adjusted NWC metric was 200%actual performance of 16.1% against this revised target of 16.0% to yield an award of 87.3% of target.
One-Time Cash Bonus
In November 2015, the NECC approved a one-time cash bonus for Ms. Sheldon in the amount of $25,000. The NECC viewed this as an important retention action, given Ms. Sheldon’s critical role at the Company and historical knowledge. This, along with the 5% increase in Ms. Sheldon’s base salary (the only salary increase for the named executive officers), was viewed by the NECC as necessary to correctly set Ms. Sheldon’s compensation at the appropriate pay level for chief financial officers in the competitive marketplace.
Equity Awards (Restricted Stock Equivalents and Options)
Our Second Amended and Restated 2009 Incentive Stock Plan authorizes the NECC to grant various types of equity awards. Since 2005,Under this Plan, the NECC has granted to key executives primarily restricted stock equivalent awards, withconsisting of performance-based awards and time-based awards. Performance-based restricted stock equivalent awards are tied to both achievement of Company performance targets over a set time period (for the Company, typically three years as a condition to vesting of the majority of the award,years) and continued employment with the Company over the same period as conditions to vesting of the awards. Time-based restricted stock equivalent awards are tied solely to continued employment with the Company over a set time period as the condition to vesting of the remainderawards. The NECC has also granted to key executives stock option awards under this Plan, tied to continued employment with the Company over a set time period as the condition to vesting of the award. See “Executive Compensation—Potential Payments Upon Termination of Change in Control.” In November 2013, the NECC continued this practice, awarding three-year incentive awards with a performance based component constituting 75% of the restricted stock equivalents available to be awarded at target and a time-vesting component constituting 25% at target of the award.
Timing and Procedures for Grants
Other than in exceptional cases, such as the Separation, promotions or new hires, long-term incentive awards are generally granted in the first quarter of the fiscal year (October through December), at the time when salary levels and bonus programs for the new fiscal year are determined. The NECC and management have agreed that it is also an appropriate time to review and consider additional awards as part of the total compensation packages.
The size of equity awards for the executive officers granted in November 2013 wasis based in part upon benchmarked data from our peer group provided by Meridian valued on the date of grant. The size of awards also reflects other factors, such as officers’ individual performance, current dilution rates, and the market run-rate for equity grants among the peer group.
The number of restricted stock equivalents and stock options awarded, as well as the mix between restricted stock equivalent and stock option awards and between time-based and performance-based restricted stock equivalent awards, are based on the amounts targeted to be delivered after three years,the applicable vesting period, and the corresponding grant date value of the restricted stock equivalents.awards. The restricted stock equivalent awards are stock-settled at the endtime of the three-year period,vesting, when they convert into unrestricted shares of our common stock. Performance-based restricted stock if and to the extent that the vesting requirements are met. Performance sharesawards are earned based on performance over the 3-year performance cyclevesting period against pre-established goals. In addition togoals, so that the earned award fluctuatingfluctuates directly with our performance against these goals,goals. Upon vesting, stock option awards become exercisable for the purchase of shares of our common stock at a price per share established at the time of grant, so that the option will have no financial value unless the price of our common stock appreciates following the date of grant. The value of the shares also mayall of our equity awards fluctuate based on performance of the Company’s common stock over time. This combination of financial performance and stock price performance enhances the alignment with shareholders.
The chief executive officer recommends to the committee the number of shares, options or share units to be awarded for each named executive officer (other than the chief executive officer). With respect to awards to the chief executive officer, Meridian, without input from the chief executive officer or other members of management, provides a range of potential awards to the NECC. However, the NECC considers alternatives outside the range and determines the award considering the competitive posture, performance of the Company, returns to shareholders and experience and effectiveness of the chief executive officer’s leadership, as well as the input from Meridian.
Performance Awards VestingRestricted Stock Equivalent and Option Grants during Fiscal 2016
As noted above, in 2014
In fiscal 2014,July 2015, in connection with the three-year vesting period for performance awardsSeparation, the NECC granted in November 2011 ended. The committee exercised its discretion to adjust the fiscal 2014 adjusted EPS result down from a reported amount of $7.32 to $7.26 per share, representing a compound adjusted EPS growth for that period of 8.3%. This resulted in vesting of 126% of the awards granted at target.
Grants During Fiscal 2014
The NECC approved the grant of two types ofnamed executive officers time-based restricted stock equivalent awards toand option awards, in recognition of the efforts of the named executive officers in executing the Separation, encouraging their retention, and aligning their interests with those of the shareholders. For information on such grants, see the “Summary Compensation Table.” When making such grants, the NECC indicated its intention to not grant long-term incentive awards in fiscal 2014,2016, as they considered a portion of the July 2015 grant to be an acceleration of what would otherwise have been granted at the start of the 2016 fiscal year. Accordingly, for fiscal 2016, the NECC did not grant any long-term incentive program awards of either restricted stock equivalents or options to the executive officers. The NECC did indicate its view that it would likely reinstitute annual first quarter long-term incentive award grants to executive officers during fiscal 2017, which could consist of time-based awards, which vest three years from the daterestricted stock equivalents, performance-based restricted stock equivalents, stock options, or some combination of grant and can increase in value if Energizer’s stock price rises, and performance-basedthese awards. The performance-based awards granted in 2014 measure performance against two metrics:
adjusted ROIC, to support the Company’s focus on cash flow, including improved working capital performance, and to emphasize the importance of capital allocation decisions; and
cumulative adjusted EBITDA, to reward growth in core operating earnings.
Once the initial award amount is determined, the performance equivalent awards will then be subject to adjustment based on a third metric, the Company’srelative total shareholder return during the three-year performance period based on a relevant group of industrial and consumer goods companies.
The number of units granted to each named executive officer is shown in the “Grants of Plan-Based Awards” table.
Other Equity Awards
The NECC has, from time to time, and most recently in 2009, granted non-qualified stock options as well as restricted stock equivalent awards which vest over time. No such grants were made to named executive officers in fiscal 2014.
Supplemental Retirement Plans
In fiscal 2014,2016, our named executive officers were covered, like other employees, by our defined benefit pension plan. As a qualified plan, it is subject to maximum pay and benefit limits under the tax rules. The pension restorationOur supplemental executive retirement plan (the executive supplemental retirement plan) provides a supplement to an executive’s pension benefit equal to the amount that the executive would have received but for the tax limitations. Details of pension benefits under the pension restorationsupplemental executive retirement plan are set forth in the “Pension Benefits Table,” including the accompanying narrative.
Our named executive officers were also covered by our qualified defined contribution 401(k) plan and entitled to a Company match on a portion of their deferrals to the plan. The amounts which may be deferred on a tax preferred basis into the qualified plan, as well as the amount of the matching contributions, are also subject to IRS limitations. We have also established supplemental plans to compensate executives for these limits. The excess 401(k)Our executive savings investment plan permits executives to defer any excess contributions and matching payments not permitted into the qualified 401(k) plan. According to market data provided by Meridian, these types of benefits are generally offered by our peer group, described above, often with enhanced benefit formulas (which we do not provide).
Details of the excess 401(k)executive savings investment plan, including the contributions, earnings, and year-end balances, are set forth in the “Non-qualified Deferred Compensation Table.”
Effective January 1, 2014, the pension benefit earned to date by active participants under the Company’s legacy Energizer U.S. pension plan was frozen and future retirement service benefitsaccruals are no longer accrued.provided. When the pension plan was frozen, the supplemental executive retirement plan was similarly frozen. The elimination of the U.S. pension benefit was partially offset by an increase in the Company match to contributions made by participants into our defined contribution 401(k) and excess contribution 401(k)executive savings investment plans. When
Executive Severance Plan
On September 23, 2016, the pensionNECC adopted an executive severance plan for the Company. The plan provides benefits to a number of the Company’s executives, including the named executive officers, in the event of a qualifying termination, which includes an involuntary termination without cause or a voluntary termination as a result of good reason (as such terms are defined in the plan). Unlike many other public companies, we have not offered employment agreements to our executives, and the plan was frozen,adopted to provide the pension restoration plan for executives was similarly frozen. Account balanceswith certain benefits in the pension plans are creditedevent of a qualifying termination. In adopting the plan, the NECC considered that the market practice at peer companies is to provide executives with interest based oncertain benefits in the 30 year treasury rate measuredevent of such terminations, and therefore concluded that the plan would be a significant benefit to the Company in Augustattracting and retaining key executives by offering a competitive total compensation package.
Post-termination benefits for participating employees consist of each yeara lump sum payment equal to:
Such benefits are subject to reduction under certain circumstances, including to the extent necessary to avoid certain federal excise taxes. In addition, no benefits will be paid to the extent duplicative of benefits under a change in control or similar agreement with the Company.
The payment of benefits under the Plan is conditioned upon, among other things, the employee executing a general release in favor of the Company, which shall include confidentiality, non-solicitation, non-disparagement and non-competition obligations of the employee in favor of the Company.
A description of the projected cost, if all of the named executive officers were terminated on September 30, 2016, is provided under “Potential Payments upon Termination or Change of Control.”
Severance and Other Benefits Following a Change of Control
Unlike many other public companies, we have not offered employment agreements to our executives. However, we have ongoing change of control agreements with each of our named executive officers, as discussed under “Potential Payments upon Termination or Change of Control.”
The change of control agreements are designed to provide executives with increased security in the event of a change of control, and allow them to weigh alternative future courses for the Company focused on the interests of shareholders. The NECC annually reviews the cost and the terms of the agreements in light of advice provided by Meridian, based upon surveys of Fortune 500 companies as well as our peer group, and its own internal data and expertise. We believe that the retention value provided by the agreements, and the benefit to us when the executive is provided the opportunity to focus on the interests of shareholders and not the executive’s own personal financial interests, outweighs the potential cost given that:
such protections are common among companies of our size, and allow us to offer a competitive compensation package;
Meridian has advised that the aggregate projected cost of the agreements is at the lower end of prevailing practice;
The NECC has, from time to time in the last several years, initiated further limitations on the benefits provided. In November 2011, the Board of Directors, upon the recommendation of the committee,NECC, adopted a policy pursuant to which we will not include tax gross-up payments relating to severance payments, and instead adopt the “best-of-net” approach for change inof control employment agreements entered into with executive officers after that date. Of the named executive officers, Mr. Klein, Mr. Sescleifer, Mr. Hatfield and Mr. LaVigneConrad have agreements including the prior tax gross-up treatment, and Ms. Sheldon, Mr. Hoskins hasRobertson and Mr. Shanbhag have agreements providing the best-of-net treatment.
Prior to the Separation, change of control agreements granted to executive officers had a three-year term, with benefits generally covering a three-year period. In connection with the Separation, the NECC and the Board of Directors determined that new executive officers receiving change of control agreements would have agreements with two year terms, with benefits generally covering a two-year period. All of these agreements provide for automatic extension every year for an additional year unless the NECC elects to terminate an agreement providingat least 90 days prior to renewal. Of the “best-of-net” treatment.named executive officers, Mr. Hatfield and Mr. Conrad have agreements with three year terms, and Ms. Sheldon, Mr. Robertson and Mr. Shanbhag have agreements with two year terms.
A description of the projected cost, if a change of control were to have occurred on the last day of fiscal 20142016 and all of the named executive officers were terminated without cause on that date, is provided under “Potential Payments upon Termination or Change of Control.”
Strategic Transaction Incentive Agreements.
In connection with the previously announced plan to spin-off household products and thereby create two independent, publicly traded companies, the NECC approved Strategic Transaction Incentive Agreements for each of Mr. LaVigne and Mr. Sescleifer due to the leadership role each individual will have in the execution of the spin-off of our household products business. The agreements provide that upon the completion of the spin-off, Mr. LaVigne and Mr. Sescleifer will be entitled to receive a special cash bonus equal to $660,000 and $550,000, respectively; provided, that each of them completes performance objectives related to leadership of the execution of the spin-off.
The agreements contain non-compete provisions that prohibit Mr. LaVigne and Mr. Sescleifer from competing against the Company for one year after termination. The agreements also contain non-solicitation, non-interference and confidentiality obligations. The agreements also provide that if the Company is subject to a change of control or if the recipient is terminated without cause prior to the completion of the spin-off, the recipient will be entitled to receive a pro-rated portion of the payment.
Perquisites
We offer a limited number of perquisites for our executive officers. Our Board of Directors has authorized the personal use of our Company-owned aircraft for up to 40 flight hours per year by the chief executive officer, but does not permit reimbursement of taxes associated with the chief executive officer’s personal use of the aircraft. In fiscal 2014, the value of this perquisite to Mr. Klein was $141,675. The Board has also authorized individualsour chief executive officer to bring family members and guests alongwith him on business flights.flights on our company-owned aircraft in certain circumstances. The remaining perquisites or executive benefits consist of the executive financial planning program, executive long-term disability plan, and executive excess liability plan. In addition, Mr. Hatfield is reimbursed for commuting expenses as a result of his assignment to our office in Connecticut, but he is not reimbursed for taxes associated with that reimbursement. We regularly review the benefits provided to our executives and make appropriate modifications based on peer group analysis and the committee’s evaluation of the retentive value of these benefits.
Stock Ownership Requirements
Our stock ownership guidelines provide that the chief executive officer must maintain ownership of our common stock with a value of at least five times his base salary, and other executive officers must maintain common stock ownership with a value of at least three times their base salaries. New executive officers are given a period of five years to attain full compliance with the guidelines.
For purposes of this determination, stock ownership includes shares of our common stock which are owned directly or by family members residing with the executive or by family trusts, as well as vested options, vested and deferred restricted stock equivalents, unvested restricted stock equivalents (other than equivalents subject to achievement of performance targets), and
common stock or stock equivalents credited to an officer under our defined contribution 401(k) plan, our excess 401(k)executive savings investment plan, or our deferred compensation plan. As of September 30, 2014,2016, each of our named executive officers was in compliance with thethese guidelines.
Trading in EnergizerEdgewell Stock
Under our insider trading policy, directors, officers and employees or their designees are prohibited from engaging in speculative trading or hedging transactions in EnergizerEdgewell securities, including prohibitions on:
Investinginvesting or trading in market-traded options on EnergizerEdgewell securities—i.e., puts and calls; or
Purchasingpurchasing financial instruments (including prepaid variable forward contracts, equity swaps, collars, and exchange funds) that are designed to profit from, hedge or offset any change in the market value of equity securities (1) granted to the director, officer or employee by EnergizerEdgewell as part of the compensation of the employee or member of the Board of Directors; or (2) held, directly or indirectly, by the director, officer or employee; or
Engagingengaging in “short-sales” of EnergizerEdgewell securities—i.e., selling EnergizerEdgewell stock not owned at the time of the sale; or
Speculatingentering into a “sale against the box” transaction (loaning Edgewell stock to another individual and receiving cash back as security for the loan); or
The policy also prohibits the transfer of funds into or out of Energizer stock equivalent funds in Energizer’s benefit plans while in possession or aware of material non-public information; or engaging in any other transaction involving EnergizerEdgewell securities that suggests the misuse of information that is unavailable to the general public.
Deductibility of Certain Executive Compensation
U.S. tax laws set a limit on deductible compensation of $1,000,000 per year per person for the chief executive officer and the next three highest paid officers (other than the chief financial officer). Performance-based awards, which meet certain requirements, are excluded when determining whether such an executive has received compensation in excess of this limit. The applicable plan provisions give the NECC authority to require the deferral of certain bonus and salary payments to such officers in order to preserve the deductibility of those payments. By making payments under the annual cash bonus program and annual restricted stock equivalent grants generally contingent upon achievement of shareholder-approved performance goals, such payments may be deductible under the U.S. tax laws. We believe a significant portion of the compensation paid to the named executive officers may remain deductible as performance-based awards under shareholder-approved plans in the future. However, the NECC reserves the flexibility to approve compensation arrangements that are not fully tax deductible where the NECC considers such arrangements to be appropriate and in the best interests of the Company.
The committee intends to continue to review and monitor its policy with respect to the deductibility of compensation.
COMPENSATION POLICIES AND PRACTICES AS THEY RELATE TO RISK MANAGEMENT
As stated above under “Corporate Governance, Risk Oversight and Director Independence—Risk Oversight and Risk Management—Compensation Policies and Practices Risk,” as part of its responsibilities, the Nominating and Executive Compensation Committee annually reviews the Company’s compensation policies and practices for all employees, including executive officers, to determine whether, in its judgment, our compensation programs encourage risk-taking likely to have a material adverse effect on the Company. In particular, there are several design features of those programs that the committee believes reduces the likelihood of excessive risk-taking:
the executive compensation program design provides a balanced mix of cash and equity,equity;
for the executive compensation program, maximum payout levels for bonuses and performance awards are capped;
performance metrics for the Company does not grant stock options on a regular basis;executive compensation program are tied to key, auditable measures;
executive officers are subject to share ownership and retention guidelines.
The committee determined that, for all employees, the Company’s compensation programs do not encourage excessive risk and instead encourage behavior that supports sustainable value creation.
NOMINATING AND EXECUTIVE COMPENSATION COMMITTEE REPORT
The Nominating and Executive Compensation Committee of the Company’s Board of Directors consists entirely of non-employee directors that are independent under the NYSE listing standards. The Committee has reviewed and discussed the Company’s Compensation Discussion and Analysis with management. Based on these reviews and discussions, the Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2014.2016.
Respectfully submitted,
John C. Hunter, III, Chairman Carla C. Hendra James C. Johnson Elizabeth Valk Long
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No portion of this Nominating and Executive Compensation Committee Report shall be deemed to be incorporated by reference into any filing under the Securities Act, the Exchange Act, or through any general statement incorporating by reference in its entirety the Proxy Statement in which this report appears, except to the extent that the Company specifically incorporates this report or a portion of it by reference. In addition, this report shall not be deemed to be filed under either the Securities Act or the Exchange Act.
EQUITY COMPENSATION PLAN INFORMATION
The following table gives information about the Company’s common stock that may be issued upon the exercise of options, warrants and rights under all of the Company’s existing compensation plans as of September 30, 2014:2016:
| Plan Category | (1) Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights | (2) Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights | (3) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (1), and as Noted Below) | (1) Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights | (2) Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights | (3) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (1), and as Noted Below) | ||||||||||||||||||
Equity compensation plans approved by security holders | 1,725,602 | $ | 65.14 | 6,219,613 | 1,297,004 | $ | 100.68 | 6,383,067 | ||||||||||||||||
Equity compensation plans not approved by security holders | None | N/A | None | None | N/A | None | ||||||||||||||||||
Total | 1,725,602 | $ | 65.14 | 6,219,613 | 1,297,004 | $ | 100.68 | 6,383,067 | ||||||||||||||||
| (1) | The number of securities to be issued upon exercise of outstanding options, warrants and rights shown above, as of September 30, |
Since September 30, 2014, no additional options granted under either plan have been exercised.
Includes 1,671 restricted stock equivalents granted to individuals that are vested but will not be released until the recipients meet the required six month delay.
| (2) | The weighted average exercise price does not take into account securities which will be issued upon conversion of outstanding restricted stock equivalents. |
| (3) | This number only reflects securities available under the Second Amended and Restated 2009 Incentive Stock Plan. Under the terms of that plan, any awards other than options, phantom stock options or stock appreciation rights are to be counted against the reserve available for issuance in a 1.95 to 1 ratio. |
This Summary Compensation Table sets forth information for compensation relating to fiscal 2016, 2015 and 2014. For a discussion of fiscal 2016 compensation, see “Compensation Discussion and Analysis” above.
Name and Principal Position | Year | Salary | Bonus (1) | Stock Awards (2) | Option Awards | Non-Equity Incentive Plan Comp. (1)(3) | Change in Pension Value and Nonqual’d Deferred Comp. Earnings (4) | All Other Compensation (5) | Total ($) | |||||||||||||||||||||||||||
| Ward M. Klein | 2014 | $ | 1,100,000 | $ | 0 | $ | 4,565,157 | $ | 0 | $ | 2,157,584 | $ | 1,473,804 | $ | 333,893 | $ | 9,630,438 | |||||||||||||||||||
| Chief Executive Officer | 2013 | $ | 1,100,000 | $ | 0 | $ | 4,150,822 | $ | 0 | $ | 1,839,943 | $ | 0 | $ | 387,537 | $ | 7,478,302 | |||||||||||||||||||
| 2012 | $ | 1,091,667 | $ | 0 | $ | 4,000,049 | $ | 0 | $ | 1,676,125 | $ | 2,563,614 | $ | 282,197 | $ | 9,613,652 | ||||||||||||||||||||
| Daniel J. Sescleifer | 2014 | $ | 547,909 | $ | 0 | $ | 1,245,052 | $ | 0 | $ | 732,652 | $ | 104,429 | $ | 82,982 | $ | 2,713,024 | |||||||||||||||||||
| Executive Vice President | 2013 | $ | 525,002 | $ | 0 | $ | 1,037,726 | $ | 0 | $ | 610,892 | $ | 93,464 | $ | 86,973 | $ | 2,354,057 | |||||||||||||||||||
| & Chief Financial Officer | 2012 | $ | 523,752 | $ | 0 | $ | 971,014 | $ | 0 | $ | 556,502 | $ | 77,188 | $ | 50,412 | $ | 2,178,868 | |||||||||||||||||||
| David P. Hatfield | 2014 | $ | 547,897 | $ | 0 | $ | 881,949 | $ | 0 | $ | 732,666 | $ | 156,892 | $ | 91,120 | $ | 2,410,524 | |||||||||||||||||||
| President & CEO, | 2013 | $ | 525,036 | $ | 0 | $ | 830,231 | $ | 0 | $ | 610,932 | $ | 153,189 | $ | 90,444 | $ | 2,209,832 | |||||||||||||||||||
| Energizer Personal Care | 2012 | $ | 523,787 | $ | 0 | $ | 986,318 | $ | 0 | $ | 556,538 | $ | 144,681 | $ | 59,273 | $ | 2,270,597 | |||||||||||||||||||
| Alan R. Hoskins | 2014 | $ | 458,350 | $ | 0 | $ | 830,001 | $ | 0 | $ | 613,425 | $ | 155,681 | $ | 65,710 | $ | 2,123,167 | |||||||||||||||||||
| President & CEO, Energizer | 2013 | $ | 435,832 | $ | 0 | $ | 933,581 | $ | 0 | $ | 511,982 | $ | 133,291 | $ | 1,323,927 | $ | 3,338,613 | |||||||||||||||||||
| Household Products | 2012 | $ | 367,076 | $ | 0 | $ | 450,064 | $ | 0 | $ | 413,400 | $ | 119,167 | $ | 692,171 | $ | 2,041,878 | |||||||||||||||||||
| Mark S. LaVigne | 2014 | $ | 436,665 | $ | 0 | $ | 778,159 | $ | 0 | $ | 446,858 | $ | 32,540 | $ | 56,881 | $ | 1,751,103 | |||||||||||||||||||
| Vice President, General Counsel & Secretary | ||||||||||||||||||||||||||||||||||||
| Name and Principal Position | Year | Salary | Bonus (2) | Stock Awards | Option Awards | Non-Equity Plan Comp. | Change in (3) | All Other (4) | Total | |||||||||||||||||||||||||||
David P. Hatfield(1) |
|
2016 |
|
|
$900,000 |
|
|
$0 |
|
|
$0 |
|
|
$0 |
|
|
$1,360,557 |
|
|
$137,327 |
|
|
$77,543 |
|
|
$2,475,427 |
| |||||||||
Chairman, President & Chief | 2015 | $685,217 | $0 | $4,348,931 | $3,599,990 | $551,708 | $98,813 | $72,911 | $9,357,570 | |||||||||||||||||||||||||||
Executive Officer
|
| 2014
|
|
| $547,897
|
|
| $0
|
|
| $881,949
|
|
| $0
|
|
| $732,666
|
|
| $156,892
|
|
| $91,120
|
|
| $2,410,524
|
| |||||||||
Sandra J. Sheldon |
|
2016 |
|
|
$522,917 |
|
|
$25,000 |
|
|
$0 |
|
|
$0 |
|
|
$541,131 |
|
|
$61,535 |
|
|
$37,064 |
|
|
$1,187,647 |
| |||||||||
Chief Financial Officer
|
| 2015
|
|
| $363,188
|
|
| $311,946
|
|
| $1,613,612
|
|
| $1,300,001
|
|
| $140,923
|
|
| $45,596
|
|
| $28,095
|
|
| $3,803,361
|
| |||||||||
Peter J. Conrad |
|
2016 |
|
|
$390,002 |
|
|
$0 |
|
|
$0 |
|
|
$0 |
|
|
$348,385 |
|
|
$81,170 |
|
|
$43,472 |
|
|
$863,029 |
| |||||||||
Chief Administrative | 2015 | $390,002 | $390,000 | $1,380,359 | $700,003 | $239,330 | $48,993 | $45,597 | $3,194,284 | |||||||||||||||||||||||||||
Officer
| ||||||||||||||||||||||||||||||||||||
Wilbur A. Robertson |
|
2016 |
|
|
$418,729 |
|
|
$0 |
|
|
$0 |
|
|
$0 |
|
|
$316,503 |
|
|
$136,526 |
|
|
$37,183 |
|
|
$908,941 |
| |||||||||
Chief Marketing | 2015 | $417,713 | $0 | $933,286 | $599,998 | $189,895 | $37,291 | $50,105 | $2,228,288 | |||||||||||||||||||||||||||
Officer
| ||||||||||||||||||||||||||||||||||||
Manish R. Shanbhag |
|
2016 |
|
|
$400,000 |
|
|
$0 |
|
|
$0 |
|
|
$0 |
|
|
$329,832 |
|
|
$148 |
|
|
$29,574 |
|
|
$759,554 |
| |||||||||
Chief Legal Officer, Chief | ||||||||||||||||||||||||||||||||||||
Compliance Officer & Secretary
| ||||||||||||||||||||||||||||||||||||
| (1) | Mr. Hatfield became Chairman of the Board of Directors on July 6, 2016. |
| (2) | All awards under our annual cash bonus program are based upon achievement of Company performance measures established at the beginning of a performance period. Consequently, the value of all bonuses earned during the fiscal year under our annual cash bonus program have been included in the Non-Equity Incentive Plan Compensation column of this table. |
| (3) | The amounts reported in this column |
| aggregate changes in the actuarial present value of accumulated benefits under our |
| Name | Change in Value | Above-market Earnings on Non- Qualified Deferred Compensation | Total | |||||||
Mr. Hatfield | $ | 78,734 | $58,593 | $ | 137,327 | |||||
Ms. Sheldon | $ | 37,226 | $24,309 | $ | 61,535 | |||||
Mr. Conrad | $ | 37,168 | $44,002 | $ | 81,170 | |||||
Mr. Robertson | $ | 106,683 | $29,843 | $ | 136,526 | |||||
Mr. Shanbhag | $ | 148 | $0 | $ | 148 | |||||
| (4) | The amounts reported in this column with respect to fiscal |
| Name | Company (i) | Company (i) | Term Life (ii) | Executive Financial Planning Program (iii) | Executive (iv) | Total | ||||||||||||||||||
Mr. Hatfield | $ | 13,222 | $ | 63,565 | $ | 60 | $0 | $ | 696 | $ | 77,543 | |||||||||||||
Ms. Sheldon | $ | 15,986 | $ | 20,322 | $ | 60 | $0 | $ | 696 | $ | 37,064 | |||||||||||||
Mr. Conrad | $ | 15,072 | $ | 21,859 | $ | 60 | $5,785 | $ | 696 | $ | 43,472 | |||||||||||||
Mr. Robertson | $ | 15,810 | $ | 20,617 | $ | 60 | $0 | $ | 696 | $ | 37,183 | |||||||||||||
Mr. Shanbhag | $ | 15,293 | $ | 13,525 | $ | 60 | $0 | $ | 696 | $ | 29,574 | |||||||||||||
| (i) | Company matching contributions or accruals in our |
These amounts include benefits which were accrued by the named executive officers in our executive savings investment plan in lieu of the pension plus match account in our retirement plan (as described in the narrative to the “Pension Benefits Table”) due to certain limits imposed by the IRC on accruals in our retirement plan.
| (ii) |
| (iii) | We reimburse the |
Personal use of Company aircraft. In 2014, Mr. Klein was authorized to use Company-owned aircraft for up to 40 hours of personal travel per year and for travel to meetings of other boards on which he may serve, and to permit, in limited situations, the personal use of the aircraft by officers and employees. See “The Board of Directors and Energizer’s Corporate Governance—Director Compensation” for a description of the calculation of the incremental cost of these flights.
In fiscal 2014, the incremental cost to the Company of Mr. Klein’s personal use of our aircraft, on a variable cost basis, was $103,037, reflecting the assessed charge per flight hour for such use, and the approximate amount of disallowed federal tax deductions associated with such use was $38,638.
Executive Financial Planning Program. We reimburse the executives for 80% of the cost of personal financial advisory services, up to certain annual maximums. During fiscal 2014, the following reimbursement payments were made:
Executive Excess Liability Plan. We pay the annual premium for a group policy providing each executive with personal excess liability coverage in excess of his or her primary personal liability insurance, the cost of which is borne by each executive. During fiscal 2014, we paid $1,202 in premiums for Mr. Klein, and $676 for each of the other named executive officers.
Transportation and Living Expenses. Mr. Hatfield serves as president and chief executive officer of our Energizer Personal Care division, the offices of which are located in Shelton, CT. Because his home and family are in St. Louis, MO, he regularly commutes to Connecticut, and his commuting expenses, as well as meals and lodging in Connecticut, are reimbursed by us. For fiscal 2014, the amount reimbursed to him was $7,563.
The amounts listed in the All Other Compensation column for Mr. Hoskins do not include the amounts he repaid and/or were refunded to the Company for prior year tax equalization associated with his international assignment. The total amount repaid by Mr. Hoskins to the company was $283,835.
| (iv) | The Company pays the annual premium for a group policy providing each executive with personal excess liability coverage in excess of his or her primary personal liability insurance, the cost of which is borne by each executive. |
The above list of perquisites does not include any contributions made by our charitable trust which may have been made at the request of any of the named executive officers. The trustees of that trust, who are employees of the Company, review requests for contributions to charitable organizations from employees, officers, and the community
at large, and, in their sole discretion, authorize contributions in accordance with the purposes of the trust. Officers are also eligible to participate in the charitable trust matching gift program, which is generally available to U.S. employees. Under this program, the foundation matches 100% of charitable donations of a minimum of $25 made to eligible charities, up to a maximum of $5,000 per year for each individual.
Dividend Equivalent Payments
Holders of restricted stock equivalents have The Company will continue to honor requests under the rightcharitable trust guidelines as long as funds exist in an appropriate level to receive cash dividend equivalent payments on restricted stock equivalents but only if the underlying restricted stock equivalents vest. As the Company initiated ado so.
quarterly dividend in fiscal 2012, the amounts of such dividends are reflected in the closing price of Energizer Holdings, Inc. common stock on the NYSE and are included in the grant date fair value for the restricted stock equivalent grants made in fiscal 2013 and 2014; however, cash dividends were not reflected in grant date fair value of the restricted stock equivalents awarded to executive officers prior to fiscal 2013 as the Company historically did not declare regular cash dividends. Accordingly, cash dividend equivalent payments credited to executive officers in fiscal 2012, 2013 and 2014 on unvested restricted stock equivalents awarded prior to fiscal 2013 are included in “All Other Compensation.”
Awards to the named executive officers, and to other key executives, were made in fiscal 2014 under two separate plans or programs:
GRANTS OF PLAN-BASED AWARDS TABLE
Estimated Future Payouts Under Non-Equity Incentive Plan Awards | Estimated Future Payouts Under Equity Incentive Plan Awards (#) | |||||||||||||||||||||||||||||||||||||||||
| Name | Type of Award | Grant Date | Committee Action Date | Threshold | Target | Maximum | Threshold | Target | Maximum | All Other Stock Awards: Number of Shares of Stock(#) | All Other Option Awards: Number of Shares Underlying Options (#) | Exercise Option | Grant Date Fair Value of Stock and Option Awards(4) | |||||||||||||||||||||||||||||
W.M. Klein | Bonus: Annl.Perf.(1) | $ | 442,750 | $ | 1,265,000 | $ | 2,530,000 | |||||||||||||||||||||||||||||||||||
| Perf.Awd. | 11/6/13(2) | 11/4/13 | 12,998 | 32,494 | 64,988 | $ | 3,465,160 | |||||||||||||||||||||||||||||||||||
| Perf.Awd.: Time Vest | 11/6/13(3) | 11/4/13 | 10,831 | $ | 1,099,996 | |||||||||||||||||||||||||||||||||||||
D.J. Sescleifer | Bonus: Annl.Perf.(1) | $ | 154,000 | $ | 440,000 | $ | 880,000 | |||||||||||||||||||||||||||||||||||
| Perf.Awd. | 11/6/13(2) | 11/4/13 | 3,545 | 8,862 | 17,724 | $ | 945,044 | |||||||||||||||||||||||||||||||||||
| Perf.Awd.: Time Vest | 11/6/13(3) | 11/4/13 | 2,954 | $ | 300,008 | |||||||||||||||||||||||||||||||||||||
D.P. Hatfield | Bonus: Annl.Perf. (1) | $ | 154,000 | $ | 440,000 | $ | 880,000 | |||||||||||||||||||||||||||||||||||
| Perf.Awd. | 11/6/13(2) | 11/4/13 | 2,511 | 6,278 | 12,556 | $ | 669,486 | |||||||||||||||||||||||||||||||||||
| Perf.Awd.: Time Vest | 11/6/13(3) | 11/4/13 | 2,092 | $ | 212,464 | |||||||||||||||||||||||||||||||||||||
A.R. Hoskins | Bonus: Annl.Perf. (1) | $ | 128,800 | $ | 368,000 | $ | 736,000 | |||||||||||||||||||||||||||||||||||
| Perf.Awd. | 11/6/13(2) | 11/4/13 | 2,363 | 5,908 | 11,816 | $ | 630,029 | |||||||||||||||||||||||||||||||||||
| Perf.Awd.: Time Vest | 11/6/13(3) | 11/4/13 | 1,969 | $ | 199,972 | |||||||||||||||||||||||||||||||||||||
M.S. LaVigne | Bonus: Annl.Perf. (1) | $ | 100,100 | $ | 286,000 | $ | 572,000 | |||||||||||||||||||||||||||||||||||
| Perf.Awd. | 11/6/13(2) | 11/4/13 | 2,216 | 5,539 | 11,078 | $ | 590,679 | |||||||||||||||||||||||||||||||||||
| Perf.Awd.: Time Vest | 11/6/13(3) | 11/4/13 | 1,846 | $ | 187,480 | |||||||||||||||||||||||||||||||||||||
Estimated Future Payouts Under Non-Equity Incentive Plan Awards | ||||||||||||||||||||||||||||||||||||||||
| Name | Type of Award | Grant Date | Committee Action Date | Threshold $ | Target $ | Maximum $ | All Other Stock Awards: Number of Shares of Stock (#) | All Other Option Awards: Number of Shares Underlying Options (#) | Exercise Option | Grant Date Fair Value of and Option Awards | ||||||||||||||||||||||||||||||
Mr. Hatfield | Bonus: Annl Perf (1) | 11/30/15 | 11/30/15 | $ | 346,500 | $ | 990,000 | $ | 1,980,000 | — | — | — | — | |||||||||||||||||||||||||||
Ms. Sheldon | Bonus: Annl Perf (1) | 11/30/15 | 11/30/15 | $ | 137,813 | $ | 393,750 | $ | 787,500 | — | — | — | — | |||||||||||||||||||||||||||
Mr. Conrad | Bonus: Annl Perf (1) | 11/30/15 | 11/30/15 | $ | 88,725 | $ | 253,500 | $ | 507,000 | — | — | — | — | |||||||||||||||||||||||||||
Mr. Robertson | Bonus: Annl Perf (1) | 11/30/15 | 11/30/15 | $ | 80,605 | $ | 230,301 | $ | 460,602 | — | — | — | — | |||||||||||||||||||||||||||
Mr. Shanbhag | Bonus: Annl Perf (1) | 11/30/15 | 11/30/15 | $ | 84,000 | $ | 240,000 | $ | 480,000 | — | — | — | — | |||||||||||||||||||||||||||
| (1) | These |
|
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
The following types of equity awards have been granted to the named executive officers, and remain unvested, or, in the case of non-qualified stock options, unvested or unexercised, as of September 30, 2014.2016.
Restricted stock equivalents that vest in three years and at vesting convert into non-restricted shares of our common stock which will then be issued to the officer. However, if the officer elected to defer receipt of such shares, they will not convert at vesting and, instead, will be issued following the officer’s retirement or other termination of employment. Vesting of restricted stock equivalents will accelerate, however, upon the death, disability, or involuntary termination (other than for cause) of the officer, and upon a change of control of the Company. A portion will also vest upon voluntary retirement if the awards have been held for at least twelve months and the officer is age 55 with at least 10 years of service. Unvested restricted stock equivalent awards are included under “Stock Awards—Number of Shares or Units of Stock That Have Not Vested,” in the table below.
Restricted stock equivalents, the vesting of which is subject to the achievement of performance-linked and time-vesting conditions over a three year period, as described in “Compensation Discussion and Analysis—Elements of Compensation—Incentive Programs—Equity Awards.” Except as noted below, the performance awards granted in fiscal year 2012 vest based on achievement of compound growth targets for adjusted earnings per share and utilize a base adjusted earnings per share of $5.72. The
|
The fiscal year 2013 and 2014 awards have similar terms but vest upon achievement of adjusted return on invested capital, cumulative adjusted earnings before interest, taxes, depreciation and amortization and relative total shareholder return goals. See “Compensation Discussion and Analysis—Elements of Compensation—Incentive Programs—Equity Awards.”
Until January 2013, voluntary deferrals of cash bonuses under our annual bonus program into the Energizer common stock unit fund of our deferred compensation plan received a Company matching deferral of 25%, provided that the voluntary deferrals are retained in that fund for at least a year. The Company matching deferrals are also credited to the Energizer common stock unit fund, and must remain in that fund until vested, which will occur three years from the date of initial crediting, if the officer remains employed with us at that time. Company matching deferrals will also vest upon an officer’s retirement, involuntary termination, disability or death, and upon a change of control of the Company. Unvested Company matching deferrals as of September 30, 2014 are included under “Stock Awards—Number of Shares or Units of Stock That Have Not Vested,” in the table below. Effective January 1, 2013, the option to defer salary and bonuses and receive the Company match was eliminated.
Non-qualifiednon-qualified stock options restricted stock equivalents, and performance awards were granted under the terms of the Energizer Holdings, Inc.Company’s Second Amended and Restated 2009 Incentive Stock Plan. Company matching contributions have been granted
underIn connection with the Separation, the NECC approved adjustments to the terms of our deferred compensation plan.unvested restricted stock equivalent awards for employees remaining with the Company to preserve the value of the award despite the dilutive effect of the spin-off of the Household Products business on the value of the Company’s common stock. The number of adjusted equivalents was calculated by (i) multiplying the original number of equivalents by the volume weighted average price (“VWAP”) of the Company’s common stock for the five trading days immediately preceding the Separation, then (ii) dividing the resulting total by the VWAP for the five trading days immediately following the Separation. VWAP was calculated by summing the dollars traded for every transaction (price times shares traded) during the applicable period and then dividing by the total shares traded for such period. The five-day pre-Separation VWAP was $134.18 and the five-day post-Separation VWAP was $99.93. Awards under our deferred compensation plan are payable exclusively in cash at retirement or other terminationotherwise remained subject to the terms of employment.the award agreements, including with respect to vesting, and any fractional shares resulting from the conversion were disregarded.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END TABLE
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||||
| Name | Number of (#) | Number of (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Plan Awards: That Have Not Vested ($) | ||||||||||||||||||||||||
W. M. Klein | 38,000 | 0 | $ | 65.63 | 10/11/19 | 59,804 | (1) | $ | 7,368,451 | 179,258 | (6) | $ | 22,086,378 | |||||||||||||||||||
D. J. Sescleifer | 0 | 0 | - | - | 14,705 | (2) | $ | 1,811,803 | 45,142 | (7) | $ | 5,561,946 | ||||||||||||||||||||
D. P. Hatfield | 10,000 | 0 | $ | 65.63 | 10/11/19 | 13,576 | (3) | $ | 1,672,699 | 37,330 | (8) | $ | 4,599,429 | |||||||||||||||||||
A. R. Hoskins | 0 | 0 | - | - | 9,463 | (4) | $ | 1,165,936 | 29,300 | (9) | $ | 3,610,053 | ||||||||||||||||||||
M. S. LaVigne | 0 | 0 | - | - | 10,260 | (5) | $ | 1,264,135 | 28,774 | (10) | $ | 3,545,245 | ||||||||||||||||||||
26,306 restricted stock equivalents granted 11/7/11 vested in full on 11/7/14;
22,667 restricted stock equivalents granted 12/10/12 will vest on 11/5/15; and
10,831 restricted stock equivalents granted 11/6/13 will vest on 11/6/16.
| Option Awards | Stock Awards | |||||||||||||||||||||||||||
| Name | Number of (#) | Number of (#) Unexercisable (2) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value (3) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Plan Awards: That Have Not Vested ($) | ||||||||||||||||||||
Mr. Hatfield | 41,710 | 83,420 | $ | 100.68 | 7/5/2025 |
|
8,429 (4) 2,809 (5) 8,884 (6) 24,017 (7) |
|
$
|
670,274 223,372 706,456 1,909,832 |
| 0 | $0 | |||||||||||||||
Ms. Sheldon | 15,062 | 30,124 | $ | 100.68 | 7/5/2025 |
|
3,470 (4) 1,157 (5) 3,658 (6) 8,673 (7) |
|
$
|
275,934 92,005 290,884 689,677 |
| 0 | $0 | |||||||||||||||
Mr. Conrad | 8,111 | 16,220 | $ | 100.68 | 7/5/2025 |
|
6,941 (4) 2,313 (5) 7,316 (6) 4,670 (7) |
|
$
|
551,948 183,930 581,768 371,358 |
| 0 | $0 | |||||||||||||||
Mr. Robertson | 6,952 | 13,903 | $ | 100.68 | 7/5/2025 |
|
3,470 (4) 1,157 (5) 3,658 (6) 4,003 (7) |
|
$
|
275,934 92,005 290,884 318,319 |
| 0 | $0 | |||||||||||||||
Mr. Shanbhag | 6,952 | 13,903 | $ | 100.68 | 7/5/2025 |
|
2,480 (4) 827 (5) 3,136 (6) 4,003 (7) |
|
$
|
197,210 65,763 249,375 318,319 |
| 0 | $0 | |||||||||||||||
| (1) | Represents stock options granted on 7/6/2015 which vested on 7/6/2016. |
| (2) |
6,084 restricted stock equivalents granted 11/7/11 vested in full on 11/7/14;
5,667 restricted stock equivalents granted 12/10/12 will vest on 11/5/15; and
2,954 restricted stock equivalents granted 11/6/13 will vest on 11/6/16.
| (3) |
866 restricted stock equivalent units in the Energizer common stock fund of our deferred compensation plan granted as Company matching deferrals in 2011 vested on 11/30/14;
6,084 restricted stock equivalents granted 11/7/11 vested in full on 11/7/14;
4,534 restricted stock equivalents granted 12/10/12 will vest on 11/5/15; and
2,092 restricted stock equivalents granted 11/6/13 will vest on 11/6/16.
| (4) |
2,960 restricted stock equivalents granted 11/7/11 vested in full on 11/7/14;
4,534 restricted stock equivalents granted 12/10/12 will vest on 11/5/15; and
1,969 restricted stock equivalents granted 11/6/13 will vest on 11/6/16.
| (5) |
297 restricted stock equivalent units in the Energizer common stock unit fund of our deferred compensation plan granted as Company matching deferrals in 2011 vested on 11/30/14;
532 restricted stock equivalent units in the Energizer common stock unit fund of our deferred compensation plan granted as Company matching deferrals in 2012 will vest on 11/30/15;
3,618 restricted stock equivalents granted 11/7/11 vested in full on 11/7/14;
3,967 restricted stock equivalents granted 12/10/12 will vest on 11/5/15; and
1,846 restricted stock equivalents granted 11/6/13 will vest on 11/6/16.
| (6) |
61,382 restricted stock equivalent units represent the performance-linked component of our performance awards granted 11/7/11—of this amount, 38,670 restricted stock equivalents vested on 11/12/14, based on annual compound growth in adjusted EPS over the preceding three-year period;
52,888 restricted stock equivalents represent the performance-linked component of our performance awards granted 12/10/12; and
64,988 restricted stock equivalents represent the performance-linked component of our performance awards granted 11/6/13.
| (7) |
14,196 restricted stock equivalent units represent the performance-linked component of our performance awards granted 11/7/11—of this amount, 8,943 restricted stock equivalents vested on 11/12/14, based on annual compound growth in adjusted EPS over the preceding three-year period;
13,222 restricted stock equivalents represent the performance-linked component of our performance awards granted 12/10/12; and
17,724 restricted stock equivalents represent the performance-linked component of our performance awards granted 11/6/13.
14,196 restricted stock equivalent units represent the performance-linked component of our performance awards granted 11/7/11—of this amount, 8,943 restricted stock equivalents vested on 11/12/14, based on annual compound growth in adjusted EPS over the preceding three-year period;
10,578 restricted stock equivalents represent the performance-linked component of our performance awards granted 12/10/12; and
12,556 restricted stock equivalents represent the performance-linked component of our performance awards granted 11/6/13.
6,906 restricted stock equivalent units represent the performance-linked component of our performance awards granted 11/7/11—of this amount, 4,350 restricted stock equivalents vested on 11/12/14, based on annual compound growth in adjusted EPS over the preceding three-year period;
10,578 restricted stock equivalents represent the performance-linked component of our performance awards granted 12/10/12; and
11,816 restricted stock equivalents represent the performance-linked component of our performance awards granted 11/6/13.
8,440 restricted stock equivalent units represent the performance-linked component of our performance awards granted 11/7/11—of this amount, 5,317 restricted stock equivalents vested on 11/12/14, based on annual compound growth in adjusted EPS over the preceding three-year period;
9,256 restricted stock equivalents represent the performance-linked component of our performance awards granted 12/10/12; and
11,078 restricted stock equivalents represent the performance-linked component of our performance awards granted 11/6/13.
OPTION EXERCISES AND STOCK VESTED
| Option Awards | Stock Awards | |||||||||||||||
| Name | Number of Shares (#) | Value Realized on Exercise ($) | Number of Shares (#)(1)(2) | Value Realized on ($) | ||||||||||||
W. M. Klein | 45,000 | $ | 2,941,925 | 42,774 | $ | 4,219,194 | ||||||||||
D. J. Sescleifer | 25,000 | $ | 1,281,103 | 10,607 | $ | 1,046,265 | ||||||||||
D. P. Hatfield | 25,000 | $ | 1,435,537 | 10,607 | $ | 1,046,265 | ||||||||||
A. R. Hoskins | 12,500 | $ | 594,089 | 6,489 | $ | 628,702 | ||||||||||
M. S. LaVigne | 0 | $ | 0 | 7,917 | $ | 766,381 | ||||||||||
| Option Awards | Stock Awards | |||||||||||||||
| Name | Number of Shares (#) | Value Realized on ($) | Number of Shares (#) (1) | Value Realized on ($) | ||||||||||||
Mr. Hatfield | 0 | $ | 0 | 18,096 | $ | 1,561,186 | ||||||||||
Ms. Sheldon | 0 | $ | 0 | 7,000 | $ | 602,800 | ||||||||||
Mr. Conrad | 0 | $ | 0 | 7,661 | $ | 651,064 | ||||||||||
Mr. Robertson | 0 | $ | 0 | 5,045 | $ | 430,412 | ||||||||||
Mr. Shanbhag | 0 | $ | 0 | 2,002 | $ | 175,135 | ||||||||||
| (1) | In fiscal |
On 11/5/13, 73.8% of target of the performance restricted stock equivalent awards granted in fiscal 2011 vested in accordance with the terms of the award agreements based on adjusted EPS
growth for the period October 1, 2010 through September 30, 2013 of 6.95%.
Upon vesting the equivalents converted into shares of our common stock which were then issued to the officers free of any restrictions. If the officers, however,However, if any officer elected in advance to defer receipt of the shares of common stock, conversion will not occur until the officer retires or otherwise terminates his employment with us.
Prior to January 1, 2014, our retirementdefined benefit pension plan covered essentially all U.S. employees of Energizer after one year of service. As a qualified plan, it was subject to maximum pay and benefit limits under the tax rules. Our supplemental executive retirement plan provided a supplement to an executive’s pension benefit equal to the amount that the executive would have received but for the tax limitations. As of December 31, 2013, which iswas the end of the first quarter of our fiscal 2014, the plans were frozen and future retirement service benefits are no longer accrued under this retirement program. The freeze includes both the qualified and non-qualifiedthese plans.
The Retirement Accumulation Account (“RAA”) that was effective from January 1, 2010 to December 31, 2013, included the future retirement benefits of the active participants in our qualified defined benefit pension plan, including the named executive officers, which were determined in accordance with a retirement accumulation formula. The participants received monthly credits equal to 6% of their eligible benefit earnings for each month, which amounts were credited with monthly interest equal to the 30-year Treasury rate that iswas reset annually. As a transition for older/longer-tenured employees, who may have had less time to adjust their retirement planning, including the named executive officers with age and years of service totaling at least 60 but not more than 74 as of December 31, 2009, such employees received an additional monthly credit equal to 2% of eligible benefit earnings for each month, and employees with age and years of service totaling 75 or more as of December 31, 2009, received an additional credit equal to 4% of their eligible benefit earnings for each month. These transition credits were available to eligible plan participants through 2013 (or, if earlier, their termination of employment with the Company).
The defined benefit pension plan has used the following other benefit calculation formulas, all of which have been frozen as of the end of calendar year 2009:
| • | Final Average Pay (FAP). The traditional |
participant’s years of service (to a maximum of 40 years), reduced by a Social Security offset. |
| • | Pension Equity (PEP) benefit formula. Under PEP, an executive is entitled to a benefit (payable in lump sum or as a monthly annuity) based on five-year average annual earnings, which were multiplied by “pension equity credits” earned with years of service. The benefit was subject to a three year vesting period. PEP was applied for all of our named executive |
| • | PensionPlus Match Account (PPMA). The PPMA generally provided a 325% match under our |
| • | Warner-Lambert Benefit. Executives who were participants in the Warner-Lambert Plan on March 28, 2003 have frozen benefits that were transferred to our retirement plan. This benefit applies to Mr. Robertson. |
The RAA, PEP and PPMA all continue to receive interest credits from January 1, 2010 to the date the benefits commence.
We do not have specific policies with regard to granting extra years of credited service, but we generally have not granted such extra credited service. However, the change of control employment agreements, described under “Potential Payments Upon Termination or Change of Control” below, do provide, for purposes of determining the amounts to be paid under the defined benefit pension and supplemental executive retirement plan and the pension restoration plan,plans, that the officers’ respective years of service with us, and their respective ages, will be deemed increased by one to three additional years if they are involuntarily terminated at any time prior to the expiration of the protected period of three years under the agreements.
PENSION BENEFITS TABLE
| Name | Plan Name | Number of (#)(1) | Present Value ($)(2) | Payments During Last ($) | ||||||||||
W.M. Klein | Energizer Retirement Plan | 35 | $ | 1,552,610 | $ | 0 | ||||||||
| Supplemental Executive Retirement Plan | 34 | $ | 11,983,350 | $ | 0 | |||||||||
D.J. Sescleifer | Energizer Retirement Plan | 14 | $ | 439,976 | $ | 0 | ||||||||
| Supplemental Executive Retirement Plan | 13 | $ | 761,034 | $ | 0 | |||||||||
D.P. Hatfield | Energizer Retirement Plan | 29 | $ | 813,656 | $ | 0 | ||||||||
| Supplemental Executive Retirement Plan | 28 | $ | 1,878,833 | $ | 0 | |||||||||
A.R. Hoskins | Energizer Retirement Plan | 31 | $ | 974,240 | $ | 0 | ||||||||
| Supplemental Executive Retirement Plan | 30 | $ | 1,153,322 | $ | 0 | |||||||||
M. S. LaVigne | Energizer Retirement Plan | 4 | $ | 74,769 | $ | 0 | ||||||||
| Supplemental Executive Retirement Plan | 4 | $ | 73,212 | $ | 0 | |||||||||
| Name | Plan Name | Number of Years Credited Service (#)(1) | Present Value of Accumulated Benefit ($)(2) | Payments During Last Fiscal Year ($) | ||||||||||||
Mr. Hatfield | Edgewell Personal Care Company Defined Benefit Plan | 28.08 | $ | 863,904 | $ | 0 | ||||||||||
| Edgewell Personal Care Company Supplemental Executive Retirement Plan | 27.08 | $ | 1,994,864 | $ | 0 | |||||||||||
Ms. Sheldon | Edgewell Personal Care Company Defined Benefit Plan | 27.33 | $ | 870,896 | $ | 0 | ||||||||||
| Edgewell Personal Care Company Supplemental Executive Retirement Plan | 26.33 | $ | 480,723 | $ | 0 | |||||||||||
Mr. Conrad | Edgewell Personal Care Company Defined Benefit Plan | 19.17 | $ | 638,725 | $ | 0 | ||||||||||
| Edgewell Personal Care Company Supplemental Executive Retirement Plan | 18.17 | $ | 710,815 | $ | 0 | |||||||||||
Mr. Robertson | Edgewell Personal Care Company Defined Benefit Plan | 25.42 | $ | 1,095,828 | $ | 0 | ||||||||||
| Edgewell Personal Care Company Supplemental Executive Retirement Plan | 24.42 | $ | 351,391 | $ | 0 | |||||||||||
Mr. Shanbhag | Edgewell Personal Care Company Defined Benefit Plan | .25 | $ | 5,378 | $ | 0 | ||||||||||
| Edgewell Personal Care Company Supplemental Executive Retirement Plan | 0 | $ | 0 | $ | 0 | |||||||||||
| (1) | The number of years of credited service reflects years of actual service. For Messrs. |
| (2) | Based on age, benefits are available without reduction. Assumptions utilized in the valuations are set forth in “Note 11. |
NON-QUALIFIED DEFERRED COMPENSATION
We have adopted several plans or arrangements that provide for the deferral of compensation on a basis that is not tax-qualified.
Deferred Compensation Plan
Under the terms of our deferred compensation plan, an unfunded, non-qualified plan, prior to January 1, 2013, executives could elect to have up to 100% of their annual cash bonus deferred until their retirement or other termination of employment, or for a shorter, three-year period (at the executive’s election, in advance). The amounts deferred under the terms of the plan are credited at the election of the executive, into:
the Energizer common stock unit fund, a stock equivalent fund, with returns (based on stock price appreciation/decline) during fiscal 2014 of 37.66%,
into a prime rate fund, which credits account balances at the prime rate quoted by The Wall Street Journal as
of |
Vanguard measurement funds which track the performancefirst business day of investment funds offered in our savings investment plan, a 401(k) plan, with returns duringthe given quarter. For fiscal 2014 ranging from 1.84% to 24.85%2016, the rate credited under this fund was 3.5%.
Interest equivalents are credited on a daily basis to the prime rate fund, and dividends and other earnings are creditedfund. Previously, executives could elect to also credit amounts under the Vanguard tracking funds and the Energizerplan to a Company common stock unit fund at the time, and to the extent, that they are paid with respect to the
actualor Vanguard funds or with respect to Energizer shares, respectively. Units intracking funds. On November 16, 2014, the Vanguard tracking fundsfund option was eliminated for all non-director participants, and Energizeron December 15, 2014, the Company common stock unit fund can also appreciate in value as our common stock, or the underlying Vanguard funds, appreciate in value. All Vanguard tracking funds, other than the prime rate fund, and the Energizer stock fund were eliminated from the deferred compensation plan on November 14, 2014 for all non-director participants. The Energizer stock fund will be eliminated from the executive savings investment plan on December 15, 2014.was eliminated.
Until January 2013, deferrals of cash bonuses into the EnergizerCompany common stock unit fund during each calendar year were increased by a 25% match from the Company (which vests three years from the date of crediting, provided the deferred bonus is kept in that fund for at least a year). Vesting will accelerate upon an executive’s retirement (which for purposes of this plan means the attainment of age 55 with ten years of service), death, permanent disability, involuntary termination, or a change in control of the Company (defined, for purposes of this plan, as the time when (i) an individual or group acquires more than 20% of our common stock, (ii) our continuing directors no longer constitute a majority of our Board, or (iii) a majority of the continuing directors approve a declaration that a change of control has occurred). Effective January 1, 2013, executives no longer have the opportunity to defer portions of their salary and bonus compensation under the Energizer Holdings, Inc. Deferred Compensation Plan,Company’s deferred compensation plan, or to receive a Company match on the qualifying portion of the deferral.
Deferrals, vested Company matches, and certain restricted stock equivalents (both performance- and time-based) may be transferred to different investment options at the executive’s discretion consistent with our policies related to share ownership and insider trading. Account balances for executives who were employed at our former parent, Ralston Purina Company (“Ralston”), prior to our spin-off in 2000, also generally include amounts credited during that prior employment. Ralston assigned liability for such amounts to us in the spin-off.spin-off of our Company from Ralston. Long-term deferrals in the plan may be paid out in a lump sum in cash six months following termination, or in five or ten-year increments commencing the year following termination of employment.
Executive Savings Investment Plan
Under the terms of our executive savings investment plan, our excess 401(k) plan, amounts that would be contributed, either by an executive or by usthe Company on the executive’s behalf, to our qualified defined contribution401(k) plan (the savings investment plan) but for tax limitations, imposed by the IRC, are credited to the non-qualified executive savings investment plan. Under that plan, executives may elect to defer their contributions and Company contributions in the form of stock equivalents under the Energizer common stock unit fund, which tracks the value of our common stock, or in any of the measurement fund options which track the performance of the Vanguard investment funds offered under our qualified savings investment401(k) plan. Deferrals and vested Company contributions may be transferred to different investment options at the executive’s discretion. Deferrals in the executive savings investment plan, adjusted for the net investment return, are paid out in a lump sum payment, or in five or ten annual installments, following retirement or other termination of employment. The EnergizerCompany stock fund will bewas eliminated from the executive savings investment plan on December 15, 2014.
Deferred Equity Awards
The named executive officers were given the opportunity to elect, in advance, to defer receipt of vested restricted stock equivalent awards which they could be granted in the future. These awards, which have been granted under the terms of our 2000 and 2009 Incentive Stock Plans, provide that upon vesting, the equivalents granted will convert into non-restricted shares of our common stock which are then issued to the officer. If deferral was elected, the equivalents will not convert into shares of our common stock until six months after the officer’s termination of employment with us. In the event that the Company would pay any dividends on its shares of common stock, these officers will also be credited with dividend equivalents with respect to their vested stock equivalents. No other earnings are credited or paid with respect to these deferrals.
NON-QUALIFIED DEFERRED COMPENSATION TABLE
| Name | Plan | Executive ($)(1) | Registrant ($)(2) | Aggregate Last FY ($)(3) | Aggregate Distributions | Aggregate Last FYE | ||||||||||||||||
W. M. Klein | Def’d Comp. Plan | $ | 0 | $ | 0 | $ | 5,307,194 | $ | 0 | $ | 24,839,550 | |||||||||||
| Exec. S.I.P. | $ | 32,000 | $ | 39,400 | $ | 546,506 | $ | 0 | $ | 3,903,240 | ||||||||||||
| Vested Stock Equivs.(4) | $ | 0 | $ | 0 | $ | 4,479,707 | $ | 0 | $ | 16,734,139 | ||||||||||||
| Total | $ | 32,000 | $ | 39,400 | $ | 10,333,407 | $ | 0 | $ | 45,476,929 | ||||||||||||
D.J. Sescleifer | Def’d Comp. Plan | $ | 0 | $ | 0 | $ | 238,945 | $ | 1,090,994 | $ | 3,521,057 | |||||||||||
| Exec. S.I.P. | $ | 215,651 | $ | 45,864 | $ | 188,987 | $ | 0 | $ | 2,331,775 | ||||||||||||
| Vested Stock Equivs.(4) | $ | 0 | $ | 0 | $ | 1,337,059 | $ | 0 | $ | 4,995,098 | ||||||||||||
| Total | $ | 215,651 | $ | 45,864 | $ | 1,764,991 | $ | 1,090,994 | $ | 10,847,930 | ||||||||||||
D. P. Hatfield | Def’d Comp. Plan | $ | 0 | $ | 0 | $ | 1,160,093 | $ | 0 | $ | 9,005,363 | |||||||||||
| Exec. S.I.P. | $ | 52,030 | $ | 37,164 | $ | 71,120 | $ | 0 | $ | 895,515 | ||||||||||||
| Vested Stock Equivs.(4) | $ | 0 | $ | 0 | $ | 1,325,138 | $ | 0 | $ | 4,946,518 | ||||||||||||
| Total | $ | 52,030 | $ | 37,164 | $ | 2,556,351 | $ | 0 | $ | 14,847,396 | ||||||||||||
A.R. Hoskins | Def’d Comp. Plan | $ | 0 | $ | 0 | $ | 476,714 | $ | 6,084 | $ | 4,116,277 | |||||||||||
| Exec. S.I.P. | $ | 43,212 | $ | 29,342 | $ | 16,646 | $ | 0 | $ | 543,640 | ||||||||||||
| Vested Stock Equivs.(4) | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||
| Total | $ | 43,212 | $ | 29,342 | $ | 493,360 | $ | 6,084 | $ | 4,659,917 | ||||||||||||
M.S. LaVigne | Def’d Comp. Plan | $ | 0 | $ | 0 | $ | 107,356 | $ | 0 | $ | 485,244 | |||||||||||
| Exec. S.I.P. | $ | 72,363 | $ | 18,356 | $ | 20,378 | $ | 0 | $ | 225,808 | ||||||||||||
| Vested Stock Equivs.(4) | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||
| Total | $ | 72,363 | $ | 18,356 | $ | 127,734 | $ | 0 | $ | 711,052 | ||||||||||||
| Name | Plan | Executive ($)(1) | Registrant ($)(2) | Aggregate Last FY ($)(3) | Aggregate Distributions | Aggregate Last FYE | ||||||||||||||||
Mr. Hatfield | Deferred Compensation Plan | $ | 0 | $ | 0 | $ | 319,845 | $ | 0 | $ | 9,624,899 | |||||||||||
Executive S.I.P. | $ | 87,102 | $ | 63,565 | $ | 165,077 | $ | 0 | $ | 1,336,483 | ||||||||||||
Deferred Vested Stock Equiv.(4) | $ | 0 | $ | 0 | ($ | 108,655 | ) | $ | 0 | $ | 4,345,781 | |||||||||||
Total | $ | 87,102 | $ | 63,565 | $ | 376,267 | $ | 0 | $ | 15,307,163 | ||||||||||||
Ms. Sheldon | Deferred Compensation Plan | $ | 0 | $ | 0 | $ | 132,941 | $ | 0 | $ | 4,000,234 | |||||||||||
Executive S.I.P. | $ | 72,773 | $ | 20,322 | $ | 60,337 | $ | 0 | $ | 563,148 | ||||||||||||
Deferred Vested Stock Equiv. (4) | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||
Total | $ | 72,773 | $ | 20,322 | $ | 193,278 | $ | 0 | $ | 4,563,382 | ||||||||||||
Mr. Conrad | Deferred Compensation Plan | $ | 0 | $ | 0 | $ | 240,521 | $ | 0 | $ | 7,237,462 | |||||||||||
Executive S.I.P. | $ | 44,496 | $ | 21,859 | $ | 63,627 | $ | 0 | $ | 672,567 | ||||||||||||
Deferred Vested Stock Equiv. (4) | $ | 0 | $ | 0 | ($ | 8,201 | ) | $ | 0 | $ | 329,995 | |||||||||||
Total | $ | 44,496 | $ | 21,859 | $ | 295,947 | $ | 0 | $ | 8,240,024 | ||||||||||||
Mr. Robertson | Deferred Compensation Plan | $ | 0 | $ | 0 | $ | 162,907 | $ | 0 | $ | 4,902,262 | |||||||||||
Executive S.I.P. | $ | 78,537 | $ | 20,617 | $ | 128,675 | $ | 0 | $ | 1,071,447 | ||||||||||||
Deferred Vested Stock Equiv. (4) | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||
Total | $ | 78,537 | $ | 20,617 | $ | 291,582 | $ | 0 | $ | 5,973,709 | ||||||||||||
Mr. Shanbhag | Deferred Compensation Plan | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | |||||||||||
Executive S.I.P. | $ | 36,894 | $ | 13,525 | $ | 9,880 | $ | 0 | $ | 112,242 | ||||||||||||
Deferred Vested Stock Equiv. (4) | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||
Total | $ | 36,894 | $ | 13,525 | $ | 9,880 | $ | 0 | $ | 112,242 | ||||||||||||
| (1) | Since 2012, our officers have no longer been eligible to contribute to the deferred compensation plan. The officer contributions to our executive savings investment plan during fiscal |
The officer contributions of vested stock equivalents during fiscal 2014 consist of vested but deferred restricted stock equivalents granted in previous years. The values shown are as of the date of vesting. None of the named executive officers elected to defer in fiscal year 2014.
| (2) | Our contributions to our executive savings investment plan consist of Company contributions which would have otherwise been contributed to the |
| (3) | Aggregate earnings/(losses) shown in this column consist of: |
amounts credited to each executive under the investment options of each of the plans, reflecting actual earnings on investment funds
|
in the case of the prime rate option of our deferred compensation plan, interest at the prime rate, quoted by the Wall Street Journal,
the appreciation or depreciation in value of each of the investment options in the plans between October 1, 20132015 and September 30, 2014,
in the case of the Energizer common stock unit fund, earnings credited for dividends paid on the Energizer common stock, and
the appreciation or depreciation in value of vested restricted stock equivalents (see footnote 4 below) plus earnings credited for dividends paid on the Energizer common stock between October 1, 2013 and September 30, 2014, or from the date of vesting and September 30, 2013, for awards vesting and deferred during the fiscal year. .
The above-market portion of interest on the prime rate option (in excess of 120% of the APR) is set forth in the column titled “Change in Pension
Value and Non-qualified Deferred Compensation Earnings” of the “Summary Compensation Table.” |
| (4) | The officers |
The values shown are as of September 30, 2014.2016.
| (5) | Of the aggregate balances shown in this column, with respect to the deferred compensation plan, the following amounts were previously reported as compensation in the “Summary Compensation |
The balances in that plan for each of the officers also include amounts deferred by them, Company matching deferrals, and earnings thereon, in years in which they were not named executive officers and their compensation was not included in the “Summary Compensation Table,” and for Messrs. KleinHatfield and Hatfield,Conrad and Ms. Sheldon, include amounts deferred under the terms of the Ralston Purina Company deferred compensation plan, the liabilities of which were assumed by us at the time of our spin-off. The balances also reflect earnings and losses during the past fiscal year.
Of the aggregate balances shown in this column, with respect to our executive savings investment plan, the following amounts were previously reported as compensation in the “Summary Compensation Table” of our proxy statements for prior years:
The balances in that plan for each of the officers also include amounts contributed by them, Company matching contributions, and earnings thereon, in years in which they were not named executive officers and their compensation was not included in the “Summary Compensation Table.” The balances also reflect earnings and losses during the past fiscal year.
Of the aggregate balances shown in this column with respect to the vested stock equivalents set forth in footnote (4) above, the following number of equivalents were previously reported as compensation in the “Summary Compensation Table” of our proxy statements for the years when the awards were granted:granted (as adjusted in connection with the Separation as described in “Outstanding Equity Awards at Fiscal Year End”):
The balances for each of the officers also include vested but deferred equivalents granted in years in which they were not named executive officers and their compensation was not included in the “Summary Compensation Table.”
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
We have not entered into general employment agreements with any of our named executive officers, nor do we have executive severance plans or programs.officers. However, equity awards under our Second Amended and Restated 2009 Incentive Stock Plan as amended and restated, and our deferred compensation plan provide for acceleration of vesting of certain awards in the event of certain terminations of employment. In September 2016, we instituted an executive severance plan in which our named executive officers and certain of our other key employees participate which provides benefits to participants in the event of an involuntary termination without cause or a voluntary termination as a result of good reason, as such terms are defined in the plan, including severance compensation, payment for accrued but unpaid paid time off and payments in respect of the monthly premium cost for group health plan benefits. In addition, we have entered into change of control employment agreements with our named executive officers and certain of our other key employees which provide for severance compensation, acceleration of vesting, tax reimbursement, where applicable, and continuation of benefits upon qualified termination of employment following a change of control.
The information below reflects the value of acceleration or incremental compensation which each officer would receive upon the termination of his or her employment or upon a change inof control. Because the value of awards and incremental compensation depend on several factors, actual amounts can only be determined at the time of the event.
The information is based on the following assumptions:
The information does not reflect benefits that are provided under our plans or arrangements that do not discriminate in favor of executive officers and are available generally to all salaried employees—such as amounts accrued under our savings investment plan, accumulated and vested benefits under our retirement plans (including our pension restorationsupplemental executive retirement plan and executive savings investment plan), health, welfare and disability benefits, and accrued vacation pay.
The information below also does not include amounts under our deferred compensation plan or executive savings investment plan that would be paid, or vested stock equivalents that would be issued, all as described in the “Non-qualified Deferred Compensation Table,” except to the extent that an officer is entitled to an accelerated benefit as a result of the termination.
Any acceleration of equity awards would also include acceleration of dividends payable with respect to such awards, if any.Death, Permanent Disability or Termination of Employment (Other Than Under the Executive Severance Plan or Upon a Change of Control)
Upon an officer’s death, permanent disability, involuntary termination, other than for cause (defined asvoluntary termination for gross misconduct), and, in some cases, retirement, the following plans or programslong-term incentive awards may provide for acceleration of certain awards.vesting. Awards are accelerated on a pro rata basis for retirement after attainment of age 55 with 10 years of service if granted 12 or more months prior to retirement date. No awards are accelerated upon other voluntary termination or involuntary termination for cause. Performance awards vesting upon retirement are paid when results for the Performance Period are met.termination.
| Long-Term Incentive Award | Involuntary or Voluntary | Death | Permanent Disability | Retirement After Age 55 with 10 years of | ||||
| ||||||||
| Three-year restricted stock awards granted | ||||||||
| 11/6/13; Two-year restricted stock awards granted 11/13/14; Three-year restricted stock awards granted 7/8/15 and stock options granted 7/6/15; Three-year performance awards granted 11/ | Forfeited | |||||||
| Accelerated | Accelerated | Pro Rata Vesting |
The value of awards which would be accelerated for our named executive officers upon death, permanent disability or retirement as of September 30, 2016 is shown in the following chart. The value of accelerated restricted stock equivalents reflects a stock price of $79.52 (the closing price of our common stock on September 30, 2016). Stock market changes since September 30, 2016 are not reflected in these valuations.
| Accelerated Restricted Stock Equivalents | ||||||||||
Name
| Death
| Permanent
| Retirement After Service | |||||||
Mr. Hatfield | $ | 3,549,180 | $ | 3,549,180 | $2,456,752 | |||||
Ms. Sheldon | $ | 1,364,679 | $ | 1,364,679 | $0 | |||||
Mr. Conrad | $ | 1,721,304 | $ | 1,721,304 | $1,439,083 | |||||
Mr. Robertson | $ | 993,320 | $ | 993,320 | $ 784,034 | |||||
Mr. Shanbhag | $ | 842,817 | $ | 842,817 | $0 | |||||
Upon termination of employment for any reason, vested account balances in our deferred compensation plan are paid out in cash to the participant in either a lump sum, or over a five or ten yearten-year period, commencing six months from the date of termination.
In the event an officer’s employment is terminated due to permanent disability, he or she may also be entitled to benefits under our executive long-term disability plan, which pays a supplemental benefit equal to 66 2/3% of the amount by which
the officer’s previous year’s salary and bonus exceeded $240,000. (Amounts below that figure are covered by our long-term disability plan, available generally to salaried U.S. employees.) As noted in the “Summary Compensation Table,” the Company pays the premiums for $40,000 of term life insurance for all U.S. employees, including the named executive officers.
Previously, upon retirementExecutive Severance Plan
Our executive severance plan provides benefits to a number of the Company’s executives, including the named executive officers (each an “Eligible Employee”), in the event of a qualifying termination (“Qualifying Termination”), which includes an involuntary termination without cause or death,a voluntary termination as a result of good reason. Under the officer, orplan:
“Cause” includes (i) the failure of an Eligible Employee to make a good faith effort to substantially perform his or her surviving spouse, may have also been entitledduties or Eligible Employee’s insubordination with respect to continued coveragea specific directive; (ii) Eligible Employee’s dishonesty, negligence in the performance of his or her duties or engaging in willful misconduct, which in the case of any such negligence, has caused or is reasonably expected to result in direct or indirect material injury to the Company; (iii) breach by Eligible Employee of any material provision of any written agreement with the Company or material violation of any Company policy; or (iv) Eligible Employee’s commission of a crime that constitutes a felony or other crime of moral turpitude or fraud.
“Good reason” includes (i) a material diminution of an Eligible Employee’s base compensation or bonus opportunity; (ii) a material diminution of the Eligible Employee’s authority, duties, or responsibilities; or (iii) a change in the principal place of Eligible Employee’s employment to a location more than fifty miles distant from the Eligible Employee’s then current principal place of employment.
Post-termination benefits for each named executive officer under our executivethe plan consist of a lump sum payment equal to:
Such benefits are subject to qualify for continued coveragereduction under certain circumstances, including to the extent necessary to avoid certain federal excise taxes. In addition, no benefits will be paid to the extent duplicative of benefits under a change of control or similar agreement with the Company.
The payment of benefits under the executive health plan is conditioned upon, among other things, the covered person must pay for retiree coverage under our underlying medicalofficer executing a general release in favor of the Company, which shall include confidentiality, non-solicitation, non-disparagement and dental insurance plans. Effective December 31, 2012,non-competition obligations of the Energizer Holdings, Inc. Executive Health Plan was terminated. As such, currentofficer in favor of the Company.
Estimated Payments and former executives no longer haveBenefits
Based on the opportunityassumptions set out above, the following sets forth estimated payments to participate in this plan.
The value of awards which would be accelerated for our named executive officers upon death, disability or retirementa Qualifying Termination as of September 30, 2014 is shown in2016 under the following chart. The value of accelerated restricted stock equivalents (both performance- and time-based) and 25% Company match for deferred annual bonus amounts reflects a stock price of $123.21. Stock market changes since September 30, 2014 are not reflected in these valuations.executive severance plan:
| Accelerated Awards | ||||||||||||
Officer Termination Events | Restricted Stock Equivalents, | Unvested 25% Company Match | Total | |||||||||
W. M. Klein: 1 | $ | 18,411,640 | $ | 0 | $ | 18,411,640 | ||||||
W. M. Klein: 2 | $ | 12,360,674 | $ | 0 | $ | 12,360,674 | ||||||
W.M. Klein: 3 | $ | 0 | $ | 0 | $ | 0 | ||||||
W.M. Klein: 4 | $ | 10,525,341 | $ | 0 | $ | 10,525,341 | ||||||
D. J. Sescleifer: 1 | $ | 4,592,776 | $ | 75,443 | $ | 4,668,219 | ||||||
D. J. Sescleifer: 2 | $ | 3,080,004 | $ | 75,443 | $ | 3,155,447 | ||||||
D. J. Sescleifer: 3 | $ | 0 | $ | 75,443 | $ | 75,443 | ||||||
D. P. Hatfield: 1 | $ | 3,865,714 | $ | 105,912 | $ | 3,971,626 | ||||||
D. P. Hatfield: 2 | $ | 2,655,422 | $ | 105,912 | $ | 2,761,334 | ||||||
D. P. Hatfield: 3 | $ | 0 | $ | 105,912 | $ | 105,912 | ||||||
A.R. Hoskins: 1 | $ | 2,970,963 | $ | 156,011 | $ | 3,126,974 | ||||||
A.R. Hoskins: 2 | $ | 1,760,671 | $ | 156,011 | $ | 1,916,682 | ||||||
A.R. Hoskins: 3 | $ | 0 | $ | 156,011 | $ | 156,011 | ||||||
M.S. LaVigne: 1 | $ | 2,934,616 | $ | 98,708 | $ | 3,033,324 | ||||||
M.S. LaVigne: 2 | $ | 1,875,626 | $ | 98,708 | $ | 1,974,334 | ||||||
M.S. LaVigne: 3 | $ | 0 | $ | 98,708 | $ | 98,708 | ||||||
Severance Bonus Health & Welfare Mr. Hatfield Ms. Sheldon Mr. Conrad Mr. Robertson Mr. ShanbhagTermination Events:Name Severance
Salary
Payment
Payment
Benefits Accrued Paid
Time Off Total $ 1,800,000 $ 1,103,416 $ 42,740 $ 26,827 $ 2,972,983 $ 787,500 $ 211,385 $ 10,848 $ 15,649 $ 1,025,382 $ 390,002 $ 239,330 $ 23,195 $ 9,750 $ 662,277 $ 418,729 $ 189,895 $ 25,726 $ 10,468 $ 644,818 $ 400,000 $ 136,185 $ 20,544 $ 8,077 $ 564,806
1—Death;
2—Permanent disability;
3—Involuntary termination of employment other than for cause;
4—Retirement following attainment of age 55 with 10 years of service, 12 months after date of grant.
Change of Control of the Company
Our change of control employment agreements with each of the named executive officers have a term of either two or three years from their effective date (which term is automatically extended every year beginning the first year for an additional year unless our Nominating and Executive Compensation Committee elects to terminate an agreement at least 90 days prior to renewal). Each of Messrs. Hatfield and Conrad have agreements with three year terms, while each of Ms. Sheldon, Messrs. Robertson and Shanbhag have agreements with two year terms. Each of these agreements provides that the officer will receive severance compensation in the event of his or her involuntary termination (including voluntary termination for “good reason”)good reason), other than for cause, within two years (for two year agreements) or three years (for three year agreements) following a change in control of the Company.
“Termination for cause” means a termination for willful breach of, or failure to perform, employment duties.
“Good reason” means, among other things, certain changes in the officer’s status or duties, failure to pay certain compensation or awards or benefits, relocation of his or her office, or improper termination.
“Change of control” includes, among other things, acquisition of specified amounts of shares by any person, certain changes in the composition of our incumbent Board of Directors, approval of business combinations under certain circumstances, or other matters approved by our Board.
Under the agreements, upon a change of control, each officer, even if not terminated, will receive a pro rata annual bonus (equal to the greater of either the target bonus for the year in which the change of control occurred, or the actual bonus for the preceding year) for the portion of the year occurring prior to a change of control.
The agreements also provide that upon a change of control, outstanding equity awards held by each officer will accelerate and vest in accordance with the terms of the awards, even if the awards have a higher threshold for a “change of control”.control.” Our equity awards generally define a “change of control” as an acquisition of 50% or more of the outstanding shares of our common stock. The termsAll of our outstanding equity awards vary as to the portionoutstanding on September 30, 2016 provide that 100% of the unvested award that will accelerate and vest upon a change of control, as indicated below:control.
If the officer is terminated within 24 months (for two year agreements) or 36 months (for three year agreements) of the change of control, the severance compensation payable under the agreements consists of:
No severance payments under the agreements would be made in the event that an officer’s termination is voluntary (other than for good reason), is due to death, disability or normal retirement, or is for cause. For a period of two years (for two year agreements) or three years (for three year agreements) following termination of employment, the officers are each bound by a covenant not to compete, a non-solicitation covenant, and a covenant of confidentiality.
Other than for Mr. Hoskins,For Messrs. Hatfield and Conrad, in the event that it is determined that a “golden parachute” excise tax is due under the IRC, we will, if total benefits payable to the officer are within 10% of the threshold for benefits at which the excise tax is triggered, reduce benefits to the point at which the tax will no longer be due, or, if total benefits are in excess of 10% of the threshold, reimburse the officer for the amount of such tax, including any excise or income taxes associated with such reimbursement. For Mr. Hoskins,Ms. Sheldon and Messrs. Robertson and Shanbhag, in the event that it is determined that a “golden parachute” excise tax is due under the IRC, we will reduce the aggregate amount of the payments payable to an amount such
that no such excise tax will be paid if the resulting amount would be greater than the after-tax amount if the payments were not so reduced.
Payments of cash would be made in a lump sum no sooner than six months following termination of employment, and benefits would be provided for a two-year period (for two year agreements) or a three-year period (for three year agreements) following termination, or if such continuation of benefits would not be possible under our benefit programs, the value of such benefits would also be paid in lump sum no sooner than six months following termination.
Estimated Payments and Benefits
Based on the assumptions set out above, the following chart sets forth estimated payments to our named executive officers upon termination following a change of control. If a change of control occurs but their employment is not terminated, the agreements provide a more limited value, as shown in the second chart below. The value of accelerated restricted stock equivalents performance awards and 25% Company match reflects a stock price of $123.21$79.52 (the closing price of our common stock on September 30, 2014)2016). Stock market declines and vesting and forfeitures of unvested restricted stock equivalents since September 30, 20142016 are not reflected in these valuations.
| Accelerated or Additional Benefits—Termination following Change of Control | ||||||||||||||||||||||||||||||||
| Cash Severance | Retirement Benefits | 25% Company Match | Restricted Stock Equivs., Three-Year Performance Awards | Pro Rata Transaction Bonus | Benefits | Excise Tax Gross-Up/ Reduction | Total | |||||||||||||||||||||||||
W. M. Klein | $ | 10,451,775 | $ | 445,910 | $ | 0 | $ | 18,411,640 | 0 | $ | 85,209 | $ | 8,163,596 | $ | 37,558,130 | |||||||||||||||||
D. J. Sescleifer | $ | 4,126,276 | $ | 204,906 | $ | 75,443 | $ | 4,592,776 | 130,021 | $ | 85,209 | $ | 2,846,407 | $ | 12,061,038 | |||||||||||||||||
D. P. Hatfield | $ | 4,217,084 | $ | 206,681 | $ | 105,912 | $ | 3,865,714 | 0 | $ | 85,209 | $ | 2,776,838 | $ | 11,257,438 | |||||||||||||||||
A. R. Hoskins | $ | 3,390,100 | $ | 173,163 | $ | 156,011 | $ | 2,970,963 | 0 | $ | 65,477 | $ | -626,061 | (1) | $ | 6,129,653 | ||||||||||||||||
M. S. LaVigne | $ | 2,833,782 | $ | 139,895 | $ | 98,708 | $ | 2,934,616 | 156,025 | $ | 40,024 | $ | 2,124,900 | $ | 8,327,950 | |||||||||||||||||
| Accelerated or Additional Benefits – Termination following Change of Control | ||||||||||||||||||||||||
| Name | Cash Severance | Retirement Benefits | Restricted Stock Equivalents | Benefits | Excise Tax Gross-Up/ Reduction | Total | ||||||||||||||||||
Mr. Hatfield | $ | 6,270,264 | $ | 340,200 | $ | 3,549,180 | $ | 64,109 | $0 | $ | 10,223,753 | |||||||||||||
Ms. Sheldon | $ | 1,965,846 | $ | 110,250 | $ | 1,364,679 | $ | 14,464 | $0 | $ | 3,455,239 | |||||||||||||
Mr. Conrad | $ | 2,267,346 | $ | 115,830 | $ | 1,721,304 | $ | 69,586 | $0 | $ | 4,174,066 | |||||||||||||
Mr. Robertson | $ | 1,687,999 | $ | 77,884 | $ | 993,320 | $ | 51,453 | $0 | $ | 2,810,656 | |||||||||||||
Mr. Shanbhag | $ | 1,402,902 | $ | 72,000 | $ | 842,817 | $ | 41,087 | ($156,491) (1) | $ | 2,202,315 | |||||||||||||
| (1) | It was determined that a “golden parachute” excise tax would be due under the |
For purposes of the calculation of the excise tax gross-up in these charts, the ascribed value of accelerated vesting is based on threetwo assumptions:
Accelerated Awards Upon a Change of Control (No Termination of Employment) | ||||||||||||
| Name | Restricted Stock Equivalents | Excise Tax Gross-Up | Total | |||||||||
Mr. Hatfield | $ | 3,549,180 | $ | 0 | $ | 3,549,180 | ||||||
Ms. Sheldon | $ | 1,364,679 | $ | 0 | $ | 1,364,679 | ||||||
Mr. Conrad | $ | 1,721,304 | $ | 0 | $ | 1,721,304 | ||||||
Mr. Robertson | $ | 993,320 | $ | 0 | $ | 993,320 | ||||||
Mr. Shanbhag | $ | 842,817 | $ | 0 | $ | 842,817 | ||||||
ITEM 3. APPROVAL OF EXECUTIVE OFFICER BONUS PLAN
PERFORMANCE-BASED CRITERIA
In order to preserve the federal tax deductibility of certain performance-based cash bonus awards which may be paid in future years by the Company to its executive officers, you are asked to approve or re-affirm the performance-based criteria (the “Performance Criteria”) applicable to performance-based cash bonuses under the Company’s Amended and Restated Executive Officer Bonus Plan (“Bonus Plan”). Approval of the Performance Criteria by the Company’s shareholders is required under the terms of Section 162(m) of the IRC in order for cash bonuses payable thereunder to be considered “performance-based compensation.” A copy of the Bonus Plan is attached as Exhibit A to this Proxy Statement.
Background
Section 162(m) of the IRC denies an employer a deduction for compensation in excess of $1,000,000 paid to “covered employees” (generally, the chief executive officer and the three other most highly compensated employees (other than the chief financial officer) of a publicly-traded corporation). “Performance-based compensation” is not included when determining if the $1,000,000 limitation has been exceeded for a covered employee. The Section 162(m) regulations generally require that shareholders approve the material terms of compensation performance goals – which include:
At its October 11, 2005 meeting, the Board’s Nominating and continued employment,Executive Compensation Committee (the “Committee”) adopted the Bonus Plan, subject to shareholder approval, in order to qualify performance-related annual cash bonuses to the Executive Officers of the Company as performance-based compensation under Section 162(m) of the IRC. Shareholders of the Company approved the Bonus Plan at the 2006 annual meeting, and reaffirmed their approval of the then-current Performance Criteria at the 2011 annual meeting. The Committee approved the proposed Performance Criteria at its November 3, 2016 meeting, subject to shareholder approval at this annual meeting.
The Bonus Plan authorizes the Committee to administer the Plan, to name eligible participants, and to grant awards under the terms of the Plan. The Committee is composed entirely of individuals who qualify as “outside directors” for purposes of Section 162(m) of the IRC and “independent directors” for purposes of the NYSE Listing Standards.
Under the Bonus Plan, if the Committee grants awards which are subject to Performance Criteria, the performance objectives must be fixed not later than 90 days after the beginning of the performance period to which the objectives relate, and the Committee does not retain any discretion to adjust the objectives in any manner that could increase the amount payable under the awards. The Committee would, however, have authority to reduce the size of an award if it deemed a reduction appropriate for any reason. Before payments are made under the award, the Committee must certify in writing that the Performance Criteria have been valued assumingachieved.
Employees Eligible to Receive Awards
Participants in the Bonus Plan must be executive officers of the Company, as designated by the Board. That group is currently comprised of the Company’s Chairman, President and Chief Executive Officer, David Hatfield; Chief Financial Officer, Sandra Sheldon; Chief Administrative Officer, Peter Conrad; Chief Marketing Officer, Wilbur A. Robertson; Chief Legal Officer, Chief Compliance Officer & Secretary, Manish Shanbhag; Chief Information Officer, Anthony Bender; Vice President, Controller and Chief Accounting Officer, Elizabeth Dreyer; and Vice President, Global Operations, Research, Development & Engineering, David VerNooy.
Award Limitations
Under the terms of the Bonus Plan, the maximum amount which may be paid to a 100% parachute valueparticipant as a single award, whether that award represents performance for a single Bonus Plan year or for multiple Bonus Plan years, is Five Million Dollars ($5,000,000). This limitation, however, represents only an absolute maximum, and the Committee is not required to grant awards of that size.
New Plan Benefits
In November 2016, subject to shareholder approval of the Performance Criteria used for awards under the Bonus Plan, the Committee approved “bonus targets,” defined as a percentage of the individual’s base salary, for the portions of awardsCompany’s fiscal year 2017 annual cash bonus program. The bonus targets are: Mr. Hatfield – 110%; Ms. Sheldon – 75%; Mr. Conrad – 65%; Mr. Robertson – 55%; Mr. Shanbhag – 60%; and a range from 50% to 110% for the Company’s executive officers as a group. It is not currently possible to determine the dollar amounts that will vest.
Performance Criteria
The proposed Performance Criteria established by the Committee provide that Bonus Plan performance goals will be based upon one or more of the following:
Accelerated Awards Upon a Change of Control (No Termination of Employment) | ||||||||||
Restricted Stock Equivalents, Three-Year Performance Awards | Excise Tax Gross-Up | Total | ||||||||
W. M. Klein | $ | 18,411,640 | $0 | $ | 18,411,640 | |||||
D. J. Sescleifer | $ | 4,592,776 | $0 | $ | 4,592,776 | |||||
D. P. Hatfield | $ | 3,865,714 | $0 | $ | 3,865,714 | |||||
A. R. Hoskins | $ | 2,970,963 | $0 | $ | 2,970,963 | |||||
M. S. LaVigne | $ | 2,934,616 | $0 | $ | 2,934,616 | |||||
| a) | earnings per share; |
| b) | income or net income; |
| c) | return measures (including, but not limited to, return on assets, capital, equity or sales); |
| d) | cash flow return on investments which equals net cash flows divided by owner’s equity; |
| e) | controllable earnings (a division’s operating profit, excluding the amortization of goodwill and intangible assets, less a charge for interest cost for the average working capital investment by the division); |
| f) | operating earnings or net operating earnings; |
| g) | cost control; |
| h) | share price (including, but not limited to, growth measures); |
| i) | total shareholder return (stock price appreciation plus dividends); |
| j) | economic value added; |
| k) | EBITDA; |
| l) | operating margin; |
| m) | market share; |
| n) | sales, including total Company, divisional, or product line sales or net sales figures; |
| o) | cash flow from operations; and |
| p) | working capital. |
Performance may be measured on an individual, corporate group, business unit, or consolidated basis and may be measured absolutely or relatively to the Company’s peers. In establishing performance goals, the Committee may account for:
The Performance Criteria may be applicable to the Company and/or any of its subsidiaries or individual business units and may differ from participant to participant.
Federal Income Tax Consequences
Assuming compliance with Section 162(m) of the IRC, the Company is entitled to a tax deduction at the time the participant realizes taxable income. Section 162(m) and the regulations adopted thereunder limit the deductibility of non-qualifying compensation in excess of $1,000,000 paid to covered employees. However, these regulations exempt qualifying performance-based compensation from the deduction limit if certain requirements are met. The Committee aims to maximize the tax deductibility of executive compensation without compromising the essential framework of the existing total compensation program; however, the Committee reserves the flexibility to approve compensation arrangements that are not fully deductible for federal income tax purposes if such action is, in the opinion of the Committee, appropriate to further the goals of the Company’s executive compensation program or otherwise is in the Company’s best interests.
Vote Required. The affirmative vote of a majority of the voting power represented in person or by proxy and entitled to vote is required for approval of the Performance-Based Criteria utilized for awards under the Bonus Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTEFOR
THE APPROVAL OF THE PERFORMANCE-BASED CRITERIA.
ITEM 3.4. ADVISORY VOTE ON EXECUTIVE COMPENSATION
As required by Section 14A of the Exchange Act, we are asking our shareholders to provide non-binding advisory approval of the compensation of our named executive officers, as disclosed pursuant to the compensation disclosure rules of the SEC. We encourage shareholders to review the Compensation“Compensation Discussion and AnalysisAnalysis” for details regarding our executive compensation programs. Our 20142016 shareholder advisory vote on executive compensation was approved by a significant majority of shareholders, with approximately 93.7%91% of the votes cast in favor of the advisory resolution at our 20142016 Annual Meeting.
This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies and practices that we use. We believe that our executive compensation program was designed appropriately and is working to ensure management’s interests are aligned with our shareholders’ interests. Our compensation programs are designed to enable and reinforce our Company’s overall business strategy by aligning pay with achievement of short and long term financial and strategic objectives, while providing a competitive level of compensation which is needed to recruit, retain and motivate talented executives critical to our success. For a more detailed discussion of our fiscal 2016 compensation program, see “Executive Compensation – Compensation Discussion and Analysis.” In particular:
Adjusted earnings per share, |
The Board believes the Company’s overall compensation process effectively implements its compensation philosophy and achieves its goals. Accordingly, the Board recommends a vote FOR the adoption of the following advisory resolution, which will be presented at the Annual Meeting:
RESOLVED, that the shareholders of EnergizerEdgewell approve, on ana non-binding advisory basis, the compensation of the named executive officers, as disclosed pursuant to the compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis, the compensation tables and the accompanying footnotes and narratives.
Vote Required. The affirmative vote of a majority of the voting power represented in person or by proxy and entitled to vote is required for approval of the advisory vote on executive compensation.
The Board of Directors recommends a vote FOR the approval of the executive compensation of our named executive officers as described in this proxy statement under “Executive Compensation”.
THE BOARD OF DIRECTORS RECOMMENDS A shareholder has informed the Company that it intends to present the following proposal at the meeting. The proposal, together with the supporting statement, is presented as received from the shareholder in accordance with SEC rules, and the Company and its Board of Directors disclaim any responsibility for its content. The Company will furnish the name, address and claimed share ownership position of the proponent of this proposal promptly upon written or oral request directed to the Corporate Secretary of the Company, 533 Maryville University Drive, St. Louis, Missouri 63141. The shareholder proposal is required to be voted upon at the annual meeting only if properly presented at the meeting by the shareholder or a qualified representative.
Shareholder Proposal
Concerning Sustainable Palm Oil Sourcing Policy
Whereas: As a leading shave and skin care company in North America, many of Energizer Holdings’ products contain palm oil derivatives. However, the environmental and social impacts of palm oil production make it highly controversial.
Approximately 90% of palm oil is grown in Indonesia and Malaysia. This has led to significant deforestation. Such deforestation and conversion of carbon-rich peatlands contributed to the World Bank ranking Indonesia as the 3rd largest global emitter of greenhouse gases (GHGs). Peatland and forest conversion accounts for more than half of Indonesia’s GHG emissions. In addition to climate change, palm oil plantations that are not sustainably developed and managed devastate habitats of endangered species, such as the orangutan, and cause massive biodiversity loss. Finally, the U.S. Department of Labor lists the palm oil industry as notorious for using child and forced labor. In the Philippines it is estimated almost 25% of palm oil production is linked to child labor. A July, 2013Bloomberg Businessweek exposé documented detailed evidence of slavery on palm plantations by a company that sells palm oil to some of America’s largest palm oil importers.
To address these social and environmental concerns associated with palm oil production, the Roundtable on Sustainable Palm Oil (RSPO) was formed in 2004. Many companies, including some of our company’s competitors, such as Unilever have committed to source 100% certified sustainable palm oil (CSPO) by 2015 or sooner. CSPO is readily available. According to the RSPO website, the supply of CSPO exceeds demand by approximately 50%.
Shareholders are concerned that, absent a comprehensive policy and transparent management system for tracing palm oil sourcing to legally licensed suppliers verified as not contributing to deforestation or human rights abuses, Energizer Holdings may be exposed to significant brand and reputational risks related to its supply chain impacts. Major companies such as Nestle and Kellogg have pledged to develop such traceable, deforestation-free palm oil supply chains. This raises the bar for all companies, heightening the risk of inaction to those failing to take responsibility for their supply chain impacts.
Resolved: Shareholders request that Energizer Holdings develop and implement a comprehensive sustainable palm oil sourcing policy. This policy should be communicated publicly within six months of the 2015 annual meeting.
Supporting Statement: We recommend the palm oil sourcing policy include goals to:
Company Statement in Opposition to Shareholder Proposal
Concerning Sustainable Palm Oil Sourcing Policy
As a global citizen, the Company demonstrates an ongoing commitment to use all environmental resources wisely through responsible sourcing, including with respect to resources like palm oil. We support the development of sustainable sources for palm oil.
We have engaged and will continue to engage with our suppliers and industry organizations to increase the sustainability of our palm oil sourcing. For example, a 2014 survey that we conducted of our suppliers of palm oil and palm oil derivatives found that a significant majority of those suppliers are members of the Roundtable on Sustainable Palm Oil and have sustainability programs in place regarding palm oil sourcing.
We also maintain a Supplier Code of Conduct which sets forth our expectations that all of our suppliers must meet in order to do business with us. Our Supplier Code of Conduct applies to all third parties that provide goods to our Company or any of its subsidiaries, divisions, affiliates or agents. Our Supplier Code of Conduct includes provisions mandating supplier compliance with all environmental laws as well as a list of environmentally conscious practices. The Supplier Code of Conduct also contains prohibitions on supplier use of discrimination, child labor, forced labor, and other human rights violations. The Company also maintains and regularly exercises the right to audit suppliers for compliance with these requirements.
The Board does not believe that it would be an efficient use of Company resources to adopt the palm oil policy suggested by the shareholder proponent. As explained above, the Company has demonstrated that it has a comprehensive approach regarding sustainability across our supply chain. We are committed to acting responsibly and will continue to work with our suppliers to find the best ways to encourage and support the development of sustainable palm oil sources. However, implementation of the proponent’s resolution would entail the commitment of significant resources and incurrence of significant costs to create a program whose benefits are unclear and remote.
Vote Required.VOTEFOR THE APPROVAL OF THE EXECUTIVE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS AS DESCRIBED IN THIS PROXY STATEMENT UNDER “EXECUTIVE COMPENSATION.” The affirmative vote of a majority of the voting power represented in person or by proxy and entitled to vote is required for approval of the shareholder proposal.
The Board of Directors recommends a vote AGAINST the approval of the shareholder proposal.
Five Percent Owners of Common Stock.FIVE PERCENT OWNERS OF COMMON STOCK
The following table shows, as of October 31, 2014,September 30, 2016, the holdings of the Company’s common stock by any entity or person known to the Company to be the beneficial owner of more than 5% of the outstanding shares of the Company’s common stock:stock.
| Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class Outstanding(1) | ||||||
BlackRock, Inc. 40 East 52nd Street, New York, New York 10022(2) | 6,438,491 | (2) | 10.4 | % | ||||
The Vanguard Group 100 Vanguard Blvd., Malvern, PA 19355(3) | 3,566,274 | (3) | 5.8 | % | ||||
| Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class Outstanding (1) | ||||||||
BlackRock, Inc. 55 East 52nd Street, New York, NY 10055 | 7,348,894 (2) | 12.7% | ||||||||
The Vanguard Group 100 Vanguard Blvd., Malvern, PA 19355 | 4,295,954 (3) | 7.4% | ||||||||
GAMCO Investors, Inc. One Corporate Center, Rye,New York 10580-1435 | 2,989,908 (4) | 5.2% | ||||||||
| (1) | On |
| (2) | As reported in a statement on Schedule 13G/A filed with the SEC on |
| (3) | As reported in a statement on Schedule |
| (4) | As reported in a statement on Schedule 13D filed with the SEC on May 25, 2016, GAMCO Investors, Inc. and Mario J. Gabelli reported, as of May 20, 2016, shared voting and dispositive power over 2,989,908 shares of Common Stock. Gabelli Funds, LLC, a wholly-owned subsidiary of GAMCO Investors, Inc., is the beneficial owner of 1,270,400 shares of Common Stock with sole voting and dispositive power over those shares. GAMCO Asset Management Inc., a wholly-owned subsidiary of GAMCO Investors, Inc., is the beneficial owner of 1,711,078 shares of Common Stock with sole voting power over 1,625,778 shares and sole dispositive power over 1,711,078 shares. Gabelli Securities, Inc., a wholly-owned subsidiary of GAMCO Investors, Inc., is the beneficial owner of 500 shares of Common Stock with sole voting and dispositive power over those shares. GGCP, Inc., a wholly-owned subsidiary of GAMCO Investors, Inc., is the beneficial owner of 2,800 shares of Common Stock with sole voting and dispositive power over those shares. GAMCO Investors, Inc. is the beneficial owner of 430 shares of Common Stock with sole voting and dispositive power over those shares. Mario J. Gabelli is the beneficial owner of 4,700 shares of Common Stock with sole voting and dispositive power over those shares. |
Ownership of Directors and Executive Officers.OWNERSHIP BY DIRECTORS AND EXECUTIVE OFFICERS
The table below contains information regarding beneficial common stock ownership ofby directors and executive officers as of November 14, 2014.28, 2016. It does not reflect any changes in ownership that may have occurred after that date. In general, “beneficial ownership” includes those shares a director or executive officer has the power to vote or transfer, as well as shares owned by immediate family members that reside with the director or officer. Unless otherwise indicated, directors and executive officers named in the table below have sole voting and investment power with respect to the shares set forth in the table and none of the stock included in the table is pledged. The table also indicates shares that may be obtained within 60 days upon the exercise of options, or upon the conversion of vested stock equivalents into shares of common stock.
Directors And Executive Officers Shares Beneficially Options 60 Days % of Shares (*denotes Bill G. Armstrong Daniel J. Heinrich R. David Hoover John C. Hunter James C. Johnson John E. Klein W. Patrick McGinnis J. Patrick Mulcahy John R. Roberts Ward M. Klein David P. Hatfield Alan R. Hoskins Daniel J. Sescleifer Mark S. LaVigne All Executive Officers and Directors as a Group (17 persons)
Owned Shares
held in
Savings
Investment
Plan(A)
Exercisable
Within Stock Equivalents
held in the
Deferred
Compensation
Plan
Outstanding
(B)
less than
1%) 11,027(D) 0 0 19,830 * 3,057(D) 0 0 2,276 * 18,027(D) 0 0 30,751 * 3,927(D) 0 0 12,288 * 1,027(D) 0 0 166 * 11,027(D) 0 0 20,706 * 19,382(D) 0 0 8,845 * 547,458(C)(D) 0 0 21,959 * 21,027(D) 0 0 9,123 * 247,958(D) 0 38,000 101,231 * 52,525(D) 410 10,000 5,528 * 4,269(D) 0 0 0 * 56,227(D) 0 0 15 * 7,151(D) 0 0 1,090 * 1,019,417(D) 410 48,000 233,808 2.1%
Directors and Executive Officers | Shares Beneficially Owned | % of Shares (*denotes | ||||||||
| Daniel J. Heinrich (2) | 9,548 | * | ||||||||
| Carla C. Hendra (3) | 0 | * | ||||||||
| R. David Hoover (4) | 48,169 | * | ||||||||
| John C. Hunter, III (5) | 22,213 | * | ||||||||
| James C. Johnson (6) | 3,060 | * | ||||||||
| Elizabeth Valk Long (7) | 0 | * | ||||||||
| Rakesh Sachdev (8) | 0 | * | ||||||||
| David P. Hatfield (9) | 135,213 | * | ||||||||
| Sandra J. Sheldon (10) | 30,828 | * | ||||||||
| Peter J. Conrad (11) | 27,422 | * | ||||||||
| Wilbur A. Robertson (12) | 28,239 | * | ||||||||
| Manish R. Shanbhag (13) | 12,494 | * | ||||||||
| All Executive Officers and Directors as | 366,793 | * | ||||||||
| (1) | The number of shares outstanding for purposes of this calculation was the number outstanding as of November |
| (2) | For Mr. |
| For Ms. Hendra: does not include 2,992 unvested restricted stock equivalents. |
| (4) | For Mr. Hoover: includes (i) 6,883 shares owned by Mr. Hoover; (ii) 10,000 vested restricted stock equivalents deferred until retirement |
| (5) | For Mr. Hunter: includes (i) 4,049 shares owned by Mr. Hunter; (ii) 1,378 vested restricted stock equivalents |
| (6) | For Mr. |
| (7) | For Ms. Long: does not include 1,840 unvested restricted stock equivalents. |
| (8) | For Mr. |
| (9) | For Mr. |
| (10) | For Ms. Sheldon: includes (i) 15,766 shares owned by Ms. Sheldon; and (ii) 15,062 vested but unexercised stock options. Does not include 13,314 unvested restricted stock equivalents, 6,962 unvested performance stock equivalents, or 47,492 unvested stock options. |
| (11) | For Mr. Conrad: includes (i) 10,263 shares owned by Mr. Conrad; (ii) 3,943 vested restricted stock equivalents deferred until retirement; (iii) 5,105 shares held indirectly in an irrevocable family trust with Mr. Conrad’s spouse as trustee; and (iv) 8,111 vested but unexercised stock options. Does not include 6,812 unvested restricted stock equivalents, 3,213 unvested performance stock equivalents, or 24,237 unvested stock options. |
| (12) | For Mr. Robertson: includes (i) 21,287 shares owned by Mr. Robertson; and (ii) 6,952 vested but unexercised stock options. Does not include 6,145 unvested restricted stock equivalents, 3,213 unvested performance stock equivalents, or 21,920 unvested stock options. |
| (13) | For Mr. Shanbhag: includes (i) 5,542 shares owned by Mr. Shanbhag; and (ii) 6,952 vested but unexercised stock options. Does not include 6,591 unvested restricted stock equivalents, 3,884 unvested performance stock equivalents, or 23,588 unvested stock options. |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Our Board of Directors has adopted a written policy regarding the review and approval or ratification of transactions involving the Company and our directors, nominees for directors, executive officers, immediate family members of these individuals, and shareholders owning five percent5% or more of our outstanding common stock, each of whom is referred to as a related party. The policy covers any related party transaction, arrangement or relationship where a related party has a direct or indirect material interest and the amount involved exceeds $100,000 in any calendar year. Under the policy, the Audit Committee of the Board is responsible for reviewing and approving, or ratifying, the material terms of any related party transactions. The committee is charged with determining whether the terms of the transaction are any less favorable than those generally available from unaffiliated third parties, and determining the extent of the related party’s interest in the transaction.
In adopting the policy, the Board reviewed certain types of related party transactions described below and determined that they should be deemed to be pre-approved, even if the aggregate amount involved might exceed $100,000:
Officer or director compensation which would be required to be disclosed under Item 402 of the SEC’s compensation disclosure requirements, and expense reimbursements to these individuals in accordance with our policy;
Transactions with another company at which a related party serves as an employee, director, or holder of less than 10% of that company’s outstanding stock, if the aggregate amount involved
does not exceed the greater of $1 million or 2% of that company’s consolidated gross revenues;
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Charitable contributions to a charitable trust or organization for which a related party serves as an employee, officer or director, if the annual contributions by us do not exceed the greater of $100,000 or 2% of the organization’s total annual receipts;
Transactions in which all of our shareholders receive proportional benefits, the rates or charges involved are determined by competitive bids, the transaction involves obtaining services from a regulated entity at rates fixed by law, or the transaction involves bank services as a depositary of funds, transfer agent or registrar, or similar services; and
Transactions related to our joint ownership of corporate aircraft, including reimbursement of expenses associated with ownership or use of the aircraft, provided that the terms of ownership and reimbursement were previously approved by our Board of Directors.
Our legal department is primarily responsible for the development and implementation of processes and procedures to obtain information from our directors and executive officers with respect to related party transactions.
During fiscal 2014,2016, there were no transactions with executive officers, directors or their immediate family members which were in an amount in excess of $100,000, and in which any such person had a direct or indirect material interest.
INFORMATION REGARDING THE SPIN-OFF
On April 28, 2014, the Board of Directors authorized management to pursue a plan to spin-off the Company’s Household Products business and thereby create two independent, publicly traded companies. The spin-off is planned as a tax-free spin-off to the Company’s shareholders and is expected to be completed by July 1, 2015. The proposed spin-off is subject to further due diligence as appropriate and customary conditions, including receipt of regulatory approvals, an opinion of counsel regarding the tax-free nature of the proposed spin-off transaction, the effectiveness of a Form 10 filing with the SEC, and final approval by the Board of Directors. The Company may, at any time and for any reason until the proposed spin-off is complete, abandon the spin-off or modify or change its terms. The Company can make no assurance that any spin-off transaction will ultimately occur, or if one does occur, the terms or timing of a transaction.
The Board knows of no business which will be presented at the 20152017 Annual Meeting other than that described above. Our bylaws provide that shareholders may nominate candidates for directors or present a proposal or bring other business before an annual meeting only if they give timely written notice of the nomination or the matter to be brought not less than 90 nor more than 120 days prior to the first anniversary of the prior year’s meeting, as described under “Shareholder Proposals for 20162018 Annual Meeting.”
Householding of Annual Meeting Materials. The SEC has approved a rule permitting the delivery of a single Notice Regarding the Availability of Proxy Materials, and set of Annual Reports and Proxy Statements (if paper copies of such documents have been delivered or requested), to any household at which two or more shareholders reside, unless we have received contrary instructions from one or more of the shareholders residing in such household. Each shareholder will continue to receive a separate proxy card. This procedure, referred to as “householding”,“householding,” reduces the volume of duplicate information you receive, as well as our expenses. In order to take advantage of this opportunity, we will deliver only one copy of the Notice Regarding the Availability of Proxy Materials, and this Proxy Statement and related Annual Report (if paper copies of such documents have been delivered or requested), to multiple shareholders who share an address, unless we receive contrary instructions from the impacted shareholders prior to the mailing date. If you prefer to receive separate copies of our Notice Regarding the Availability of Proxy Materials, our Proxy Statement or Annual Report, either now or in the future, we will promptly deliver, upon your written or oral request submitted as set forth below, a separate copy of the Notice Regarding the Availability of Proxy Materials, Proxy Statement or Annual Report, as applicable and as requested, to any shareholder at your address to which a single copy was delivered. If you and other shareholders in your household are currently receiving multiple copies of the Notice Regarding the Availability of Proxy Materials, and this Proxy Statement and our Annual Report (if paper copies of such documents have been delivered or requested), and would like only one copy to be sent to your household, upon your written or oral request, we will discontinue delivering multiple copies of such document(s) to your household and only deliver one copy. Notice should be given to the Corporate Secretary, Energizer Holdings, Inc., 533 Maryville University Drive, St. Louis,Edgewell Personal Care Company, 1350 Timberlake Manor Parkway, Chesterfield, Missouri 63141 (Tel.63017, Telephone No. (314) 985-2000).594-1900.
SHAREHOLDER PROPOSALS FOR 20162018 ANNUAL MEETING
Any proposals to be presented at the 20162018 Annual Meeting of Shareholders, which is expected to be held on January 25, 2016,26, 2018, must be received by the Company, directed to the attention of the Secretary, no later than August 13, 201518, 2017 in order to be included in the Company’s Proxy Statement and form of proxy for that meeting under Rule 14a-8 of the Exchange Act. Upon receipt of any proposal, the Company will determine whether or not to include the proposal in the Proxy Statement and proxy card in accordance with regulations governing the solicitation of proxies. The proposal must comply in all respects with the rules and regulations of the SEC and our bylaws.
In order for a shareholder to nominate a candidate for director under our bylaws, timely notice of the nomination must be received by us in advance of the meeting. Ordinarily, such notice must be received not less than 90, nor more than 120 days before the first anniversary of the prior year’s meeting. For the 20162018 Annual Meeting, the notice would have to be received between September 28, 201529, 2017 and October 28, 2015.29, 2017. However, in the event that (i) no annual meeting is held in 20152017, or (ii) the date of the 20162018 Annual Meeting is more than 30 days before or more than 60 days after the first anniversary of the 20152017 Annual Meeting, notice must be received no earlier than the 120th day prior to the date of the 20162018 Annual Meeting and not later than the close of business on the later of the 90th day prior to the date of 20162018 Annual Meeting, or the seventh day following the day on which notice of the date of the meeting was mailed or on which public notice of the meeting was given. The notice of nomination must include, as to each person whom the shareholder proposes to nominate for election, information required by our bylaws, including:
the nominee’s name, age, business and residential address;
the nominee’s principal occupation for the previous five years;
the nominee’s consent to being named as a nominee and to serving on the Board;
the nominee’s “disclosable interests” as of the date of the notice (which information shall be supplemented by such person, if any, not later than ten days after the record date of the Annual Meeting to disclose such ownership as of the record date), which includes:
shares of common stock; options, warrants, convertible securities, stock appreciation rights, or similar rights with respect to our common stock; any proxy, contract, arrangement, understanding, or relationship conveying a right to vote common stock; |
any short interest with respect to common stock; |
any derivative instruments held by a partnership in which the nominee has a partnership interest; |
rights to any performance-related fee based on any increase or decrease in the value of common stock or any related derivative instrument; and |
a description of all monetary or other material agreements, arrangements or understandings between the nominating shareholder and the nominee during the prior three years.
In addition, the nominating shareholder must provide their name and address and disclosable interests (as such term is described above). The shareholder must be present at the Annual Meeting of Shareholders at which the nomination is to be considered, and must provide a completed questionnaire regarding the nominee’s background and qualification and compliance with our corporate governance, conflict of interest, and other pertinent policies and guidelines. To assist in the evaluation of shareholder-recommended candidates, the Nominating and Executive Compensation Committee may request that the shareholder provide certain additional information required to be disclosed in the Company’s proxy statement under Regulation 14A of the Exchange Act. The shareholder nominating the candidate must also include his or her name and address, and the number of shares of common stock beneficially owned.
In order for a shareholder to bring other business before a shareholder meeting, timely notice must be received by the Company during the same period as director nominations described above. Such notice must include a description of the proposed business and the reasons for the proposal, the name and address of the shareholder making the proposal, any financial or other interests of the shareholder in the proposal made, and the shareholder’s disclosable interests. These requirements are separate from the requirements a shareholder must meet to have a proposal included in the Company’s Proxy Statement.
In each case, the notice must be given to the Secretary of the Company, whose address is 533 Maryville University Drive, St. Louis,1350 Timberlake Manor Parkway, Chesterfield, Missouri 63141.63017. A copy of our bylaws will be provided without charge upon written request to the Secretary.
| By order of the Board of Directors, |
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December 11, 2014
YOUR VOTE IS IMPORTANT. PLEASE VOTE TODAY.
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ENERGIZER HOLDINGS, INC.
Manish R. Shanbhag Chief Legal Officer, Chief Compliance Officer and Secretary December 16, 2016 EDGEWELL PERSONAL CARE COMPANY AMENDED AND RESTATED EXECUTIVE OFFICER BONUS PLAN SECTION 1 ESTABLISHMENT AND PURPOSE 1.1Purpose.Edgewell Personal Care Company (the “Company”) hereby establishes theEdgewell Personal Care Company Executive Officer Bonus Plan(the “Plan”). The Plan is intended to (i) motivate and reward a greater degree of excellence and teamwork among the senior officers of the Company by providing incentive compensation award opportunities; (ii) provide attractive and competitive total cash compensation opportunities for exceptional corporate, business unit and personal performance; (iii) reinforce the communication and achievement of the mission, objectives and goals of the Company; and (iv) enhance the Company’s ability to attract, retain and motivate the highest caliber senior officers. Awards under the Plan which are based upon attainment of Performance Goals are intended to qualify asperformance-based compensation under Section 162(m) of the Code. 1.2Effective Date.Contingent upon shareholder approval of appropriate performance criteria at the Company’s 2006 Annual Meeting of Shareholders, the Plan shall become effective October 1, 2006 and shall continue in effect until terminated by the Board in accordance with Section 7.4. As long as the Plan remains in effect, performance criteria shall be resubmitted to shareholders as necessary to enable Awards under the Plan which are based upon attainment of Performance Goals to continue to qualify as performance-based compensation under Section 162(m) of the Code. SECTION 2 DEFINITIONS The following words and phrases shall have the following meanings unless a different meaning is plainly required by the context: 2.1“Award”means any cash bonus granted under the terms of the Plan. An Award may be expressed as a percentage of an Executive Officer’s Base Salary or a specific dollar amount, as determined by the Committee for each Participant for any Plan Year, or for multiple Plan Years. 2.2“Base Salary”means as to any Plan Year, 100% of the Participant’s annualized salary rate on the last day of the Plan Year. Such Base Salary shall be before both (a) deductions for taxes or benefits, and (b) deferrals of compensation pursuant to Company-sponsored plans. 2.3“Board”means the Company’s Board of Directors. 2.4“Code”means the Internal Revenue Code of 1986, as amended. Reference to a specific Section of the Code shall include such Section, any valid regulation promulgated thereunder, and any comparable provision of any future legislation or regulation amending, supplementing or superseding such Section or regulation. 2.5“Committee”means the Nominating and Executive Compensation Committee of the Board, or any successor committee the Board may designate to administer the Plan. Each member of the Committee shall be (i) an “outside director’’ within the meaning of Section 162(m) of the Code, subject to any transitional rules applicable to the definition of outside director, and (ii) an “independent” director, as defined under the Company’s Corporate Governance Principles and the listing standards of the New York Stock Exchange. 2.6“Company”means Edgewell Personal Care Company, a Missouri corporation. 2.7“Determination Date” means as to any Plan Year, (a) the first day of the Plan Year, or (b) any date on or before the 90th day of the Plan Year. 2.8“Executive Officer”means any individual with the title of Chief Executive Officer, Chief Financial Officer, or President of the Company, and any other individual designated as an Executive Officer of the Company by the Board. 2.9“Maximum Award”means the maximum amount which may be paid to a Participant as a single Award, whether that Award represents performance for a single Plan Year or for multiple Plan Years. The size of the Maximum Award is five million dollars ($5,000,000). 2.10“Participant”means as to any Plan Year (or series of Plan Years), an Executive Officer who has been selected by the Committee for participation in the Plan for that Plan Year (or series of Plan Years). 2.11“Performance Goals”means performance goals established by the Committee with respect to any Potential Award, which goals must be based upon one or more performance-based criteria approved by the shareholders of the Company in accordance with the requirements of Section 162(m) of the Code. 2.12“Plan Year”means the fiscal year of the Company beginning October 1, 2006, and each succeeding fiscal year of the Company. 2.13“Potential Award”means an Award which is potentially payable to a Participant, the terms of which are established by the Committee as of the Determination Date for a Plan Year. The terms of a Potential Award can relate to that Plan Year, or a series of Plan Years, and can be exclusively performance-based, with Performance Goals, or can involve a combination of performance-based criteria and individual performance assessments, as the Committee, in its sole discretion, may determine. The Committee shall have the power to impose any restrictions on Potential Awards subject to this Plan as it may deem necessary or appropriate to ensure that an Award under this Plan, to the extent applicable, satisfies all the requirements for “performance-based compensation” within the meaning of Section 162(m) of the Code, the regulations thereunder, and any successors thereto. SECTION 3 SELECTION OF PARTICIPANTS AND DETERMINATION OF AWARDS 3.1Selection of Participants.On or prior to the Determination Date, the Committee, in its sole discretion, shall select the Executive Officers who shall be Participants for the Plan Year. In selecting Participants, the Committee shall choose officers who are likely to have a significant impact on the performance of the Company. Participation in the Plan is in the sole discretion of the Committee, and on a Plan Year by Plan Year basis. Accordingly, an Executive Officer who is a Participant for a given Plan Year in no way is guaranteed or assured of being selected for participation in any subsequent Plan Year or Years. 3.2Determination of Performance Goals and Potential Awards.On or prior to the Determination Date, the Committee, in its sole discretion, shall establish the terms of the Potential Award for each Participant for the Plan Year, or for multiple Plan Years, commencing on the first day of such Plan Year or multiple Plan Years, and any Performance Goals applicable to all, or a portion of, the Potential Award. To the extent that all, or a portion, of the Participant’s Potential Award is performance-based, such Potential Award shall be contingent upon the attainment of the Participant’s Performance Goals. The Committee may elect to establish alternative payment formulae for the Potential Awards based upon the attainment of alternative Performance Goals for the Plan Year (or Years), and may also elect to establish Potential Awards on a multiple year basis, contingent upon attainment of Performance Goals over multiple years. Each Participant’s Performance Goals and Potential Award shall be set forth in writing and presented to the Participant. The outcome of any Performance Goal must be substantially uncertain at the time it is established by the Committee. 3.3Determination of Awards.After the end of each Plan Year, the Committee shall certify in writing the extent to which the Performance Goals applicable to each Participant for that Plan Year (or series of Plan Years ending with that Year) were achieved or exceeded. For this purpose, approved minutes of a meeting of the Committee shall be treated as written certification. The Committee shall also determine if the criteria for any non-performance-based Potential Awards have been attained. If applicable Performance Goals and other criteria were attained, the Committee shall determine Awards payable to each Participant in accordance with the terms of their Potential Awards. Notwithstanding any contrary provision of the Plan or the terms of the Potential Award, (a) the Committee, in its sole discretion, may eliminate or reduce the Award payable to any Participant below that which otherwise would be payable under the terms of the Potential Award, (b) if a Participant terminates employment with the Company prior to the end of a Plan Year (or series of Plan Years) for which a Potential Award has been established, the Committee may, in its sole discretion, grant an Award proportionately based on the date of termination, provided that applicable Performance Goals for that Plan Year (or Plan Years) are attained, and (c) the Committee may not adjust upwards the amount of an Award nor may it waive the attainment of Performance Goals for the applicable Plan Year or Plan Years. SECTION 4 PAYMENT OF AWARDS 4.1Right to Receive Payment.Each Award that may become payable under the Plan shall be paid solely from the general assets of the Company. Nothing in this Plan shall be construed to create a trust or to establish or evidence any Participant’s claim of any right other than as an unsecured general creditor with respect to any payment to which he or she may be entitled. No Participant or other person shall have any rights with respect to the Plan, or to any Potential Award prior to the completion of the Plan Year (or series of Plan Years) with respect to such Award, and the Committee’s certification as to the attainment of any Performance Goals applicable thereto. Notwithstanding anything to the contrary set forth in the Plan, the Committee, in its sole discretion, may eliminate or reduce an Award payable to any Participant below that which otherwise would be payable under the terms of the Participant’s Potential Award. 4.2Timing of Payment.Payment of each Award shall be made no sooner than the date the Committee certifies that applicable Performance Goals for a Plan Year (or Plan Years) have been attained and no later than March 15 of the year following the Plan Year (or series of Plan Years) during which the Award was earned. Under no circumstances may payment of any Award, including the Awards described in Sections 3.3(b) and 6.2 of this Bonus Plan, be accelerated to an earlier date. 4.3Form of Payment.Each Award shall be paid in cash (or its equivalent) in a single lump sum. 4.4Deferral of Awards.The Committee may permit Participants the opportunity to elect to defer receipt of Awards under the terms of the Company’s Deferred Compensation Plan. SECTION 5 ADMINISTRATION 5.1Grant of Awards.The Committee shall determine (i) those Executive Officers eligible to be Participants, (ii) the amount, type (whether performance-based or non-performance-based) and terms of each Potential Award, and (iii) the amount of each Award, subject to the provisions of the Plan. Awards granted under the Plan shall be evidenced to the extent, and in the manner, if any, prescribed by the Committee from time to time in accordance with the terms of the Plan. In making any determinations under the Plan, including certifications as to attainment of Performance Goals, the Committee shall be entitled to rely on reports, opinions or statements of officers or employees of the Company, as well as those of counsel, public accountants and other professional or expert persons. All determinations, interpretations and other decisions under or with respect to the Plan or any Award by the Committee shall be final, conclusive and binding upon all parties, including without limitation, the Company, any Executive Officer, and any other person with rights to any Award under the Plan, and no member of the Committee shall be subject to individual liability with respect to the Plan or any Awards thereunder. 5.2Committee Authority.The Committee shall have sole authority to administer the Plan and, in connection therewith, it shall have full power to (i) construe and interpret the Plan consistent with the qualification of Awards under the Plan as performance-based compensation under Section 162(m) of the Code, (ii) establish rules and regulations in connection with the administration of the Plan, and (iii) perform all other acts it believes reasonable and proper, including the power to delegate responsibility to others to assist it in administering the Plan. SECTION 6 BENEFICIARY DESIGNATION; DEATH OF AWARDEE 6.1.Designation of Beneficiary.A Participant may file with the Committee a written designation of a beneficiary or beneficiaries (subject to such limitations as to the classes and number of beneficiaries and contingent beneficiaries as the Committee may from time to time prescribe) to receive, in the event of the death of the Participant, an Award. The Committee reserves the right to review and approve beneficiary designations. A Participant may from time to time revoke or change any such designation or beneficiary and any designation of beneficiary under the Plan shall be controlling over any other disposition, testamentary or otherwise. However, if the Committee shall be in doubt as to the right of any such beneficiary to receive any Award, the Committee may determine to recognize only a right to receipt by the legal representative of the Participant, in which case the Company, the Committee and the members thereof shall not be under any further liability to anyone. 6.2Payment of Award.Upon the death of a Participant, any Award payable to that Participant shall be determined by the Committee in its sole discretion, in light of the attainment of applicable Performance Goals, and the Company shall make payment of such Award to the Participant’s designated beneficiary or personal representative or the person or persons entitled thereto by will or in accordance with the laws of descent and distribution. SECTION 7 OTHER GOVERNING PROVISIONS 7.1Transferability.Except as otherwise provided herein, no Award shall be transferable other than by beneficiary designation, will or the laws of descent and distribution, and any right with respect to an Award may be exercised during the lifetime of the Participant receiving such Award only by such Participant or by his/her guardian or legal representative. 7.2.Reservation of Rights of Company.Neither the establishment of the Plan or any Potential Award, nor the granting of an Award, shall confer upon any Executive Officer any right to continue in the employ of the Company or any Affiliate or interfere in any way with the right of the Company or any Affiliate to terminate such employment at any time. The Company expressly reserves the right, which may be exercised at any time during a Plan Year, to terminate any individual’s employment without cause and without regard to the effect such termination might have upon the Participant’s receipt of an Award under the Plan. 7.3Withholding of Taxes.The Company shall deduct from any payment, or otherwise collect from the recipient, any taxes required to be withheld by federal, state or local governments in connection with any Award. 7.4Amendment and Termination of Plan.The Board may amend or terminate the Plan at any time and for any reason; provided, however, that if and to the extent required to ensure the qualification under Section 162(m) of the Code, of Awards granted under the Plan, any such amendment shall be subject to shareholder approval. 7.5Construction of Plan.The place of administration of the Plan shall be in the State of Missouri and the validity, construction, interpretation, administration and effect of the Plan and of its rules and regulations, and rights relating to the Plan, shall be determined solely in accordance with the laws of the State of Missouri, without giving regard to the conflict of laws provisions thereof. 7.6Unfunded Nature of Plan.The Plan shall be unfunded, and the Company shall not be required to segregate any assets which may at any time be awarded under the Plan. Any liability of the Company to any person with respect to any Award under the Plan shall be based solely upon any contractual obligations which may be created by the terms of the Plan or any agreement with respect to an Award entered into pursuant to the Plan. No such obligation of the Company shall be deemed to be secured by any pledge of, or other encumbrance on, any property of the Company. 7.7Successors.All obligations of the Company under the Plan, with respect to any Awards granted hereunder, shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation or otherwise, of all or substantially all of the business and/or assets of the Company. 7.8Severability.In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity will not affect the remaining parts of the Plan and the Plan will be construed and enforced as if the illegal or invalid provision had not been included. 7.9Expenses of Plan.The expenses of administering the Plan will be borne by the Company. Edgewell Personal Care Company 1350 Timberlake Manor Parkway Chesterfield, MO 63017 Tel: 314-594-1900 www.edgewell.com ©2016 Edgewell
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EDGEWELL PERSONAL CARE COMPANY
1350 TIMBERLAKE MANOR PARKWAY
CHESTERFIELD, MO 63017
Voting by telephone or Internet is quick, easy andVOTE BY INTERNET -www.proxyvote.comimmediate.As a shareholder of Energizer Holdings, Inc., you have the option of voting your shares electronically through
Use the Internet or on the telephone, eliminating the need to return the proxy card. Yourtransmit your voting instructions and for electronic vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed, dated and returned the proxy card. Votes submitted electronically over the Internet or by telephone must be received by 7:00 p.m.,delivery of information up until 11:59 P.M. Eastern Standard Time on January 25, 2015.26, 2017. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time on January 26, 2017. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
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ENERGIZER HOLDINGS, INC.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” EACH ITEM:
EDGEWELL PERSONAL CARE COMPANY | ||||||||||||||||||||||||||||||
THEBOARDOFDIRECTORSRECOMMENDSAVOTE“FOR” | ||||||||||||||||||||||||||||||
EACH ITEM: | ||||||||||||||||||||||||||||||
1. | Election of Directors | |||||||||||||||||||||||||||||
Nominees: | ||||||||||||||||||||||||||||||
1a. David P. Hatfield | ☐ | ☐ | ☐ | For | Against | Abstain | ||||||||||||||||||||||||
1b. Daniel J. Heinrich | ☐ | ☐ | ☐ | 2. | Ratification of appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm for 2017. | ☐ | ☐ | ☐ | ||||||||||||||||||||||
1c. Carla C. Hendra | ☐ | ☐ | ☐ | |||||||||||||||||||||||||||
1d. R. David Hoover | ☐ | ☐ | ☐ | 3. | Approval of Executive Officer Bonus Plan performance-based criteria. | ☐ | ☐ | ☐ | ||||||||||||||||||||||
1e. John C. Hunter, III | ☐ | ☐ | ☐ | 4. | Non-binding advisory vote on executive compensation. | ☐ | ☐ | ☐ | ||||||||||||||||||||||
1f. James C. Johnson | ☐ | ☐ | ☐ | NOTE: Such other business as may properly come before | ||||||||||||||||||||||||||
1g. Elizabeth V. Long | ☐ | ☐ | ☐ | |||||||||||||||||||||||||||
1h. Rakesh Sachdev | ☐ | ☐ | ☐ | |||||||||||||||||||||||||||
| Yes | No | |||||||||||||||||||||||||||||
Please indicate if you plan to attend this meeting. | ☐ | ☐ | ||||||||||||||||||||||||||||
Note: Please sign exactly as name appears hereon. When shares are held by joint owners, both should sign. When signing as attorney, executor, administrator, trustee, guardian, or corporate officer, please give title as such. | ||||||||||||||||||||||||||||||
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COMMON STOCK
COMPANY ID:
PROXY NUMBER:
ACCOUNT NUMBER:
SignatureSignature, if held jointlyDate.
Note: Please sign exactly as name appears hereon. When shares are held by joint owners, both should sign. When signing as attorney, executor, administrator, trustee, guardian, or corporate officer, please give title as such.
2015 ANNUAL MEETING ADMISSION TICKET
ENERGIZER HOLDINGS, INC.
2015 ANNUAL MEETING OF SHAREHOLDERS
January 26, 2015
8:30 a.m. local time
Energizer World Headquarters
533 Maryville University Drive
St. Louis, Missouri 63141
Please present this ticket and photo identification for admittance to the Annual Meeting.
Important Notice Regarding the Availability of Proxy Materials
for the Annual Meeting:
The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.
E15424-P84186
EDGEWELL PERSONAL CARE COMPANY
Annual Meeting of Shareholders
January 27, 2017 8:30 AM
This proxy is solicited by the Board of Directors
The shareholder(s) hereby appoint(s) David P. Hatfield and Manish R. Shanbhag, or either of them, as proxies, each with the power to appoint his substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Common Stock of EDGEWELL PERSONAL CARE COMPANY that the shareholder(s) is/are entitled to vote at the Annual Meeting of Shareholders Proxy Statement
and our 2014 Annual Report are available at:
www.cstproxy.com/energizer/2014.
p FOLD HERE AND SEPARATE IF ATTENDING MEETING— INSERT IN ENVELOPE PROVIDED p
ENERGIZER HOLDINGS, INC.
PROXY
This Proxy is Solicited on Behalf of the Board of Directors for the Annual
Meeting of Shareholdersto be held at 8:30 AM, Local Time on January 26, 201527, 2017, at Edgewell Personal Care Company, 1350 Timberlake Manor Parkway, Chesterfield, Missouri 63017, and any adjournment or postponement thereof.
This proxy, when properly executed, will be voted in the manner directed herein by the undersignedShareholder.herein. If no such direction is made, this Proxy will be voted “FOR” all nominees in Item 1, “FOR” Items 2 and 3, and “AGAINST” Item 4 and in the discretion of the proxies on any other business that may properly come before the meeting. The undersigned hereby appoints W.M. Klein and M.S. LaVigne, or either of them, as true and lawful attorneys-in-fact, agents and proxies, with the power of substitution and revocation, to represent and to vote, as designated on the reverse side hereof, all the shares of the undersigned held of record on November 26, 2014, at the Annual Meeting of Shareholders to be held on January 26, 2015 and any adjournments or postponement thereof.
As described more fully in the proxy statement, if shares of Energizer Common Stock are credited to the account of the undersigned in the Energizer Holdings, Inc. Savings Investment Plan as of November 19, 2014, this proxy card will also serve as voting instructions to the trustee for that plan, Vanguard Fiduciary Trust Company, an affiliate of The Vanguard Group of Investment Companies, for such shares. If the trustee does not receive directions with respect to the shares of Energizer Common Stock credited to the undersigned’s account by January 23, 2015, it will vote those shares in the same proportion as it votes shares for which directions were received.
(continued and to be marked, dated and signed, on the other side)
December 11, 2014
Dear Savings Investment Plan Participant:
Enclosed are a proxy statement, a proxy card and an Annual Report for the Annual Meeting of Shareholders of Energizer Holdings, Inc. to be held on January 26, 2015. The enclosed proxy card relates to shares of Energizer Common Stock of which you are the record holder and to shares of Energizer Common Stock credited to your account in the Energizer Holdings, Inc. Savings Investment Plan (the “Plan”).
The Trustee of the Plan will vote all shares of Energizer Common Stock held in the Plan as of November 26, 2014. Shares credited to your account as of November 19, 2014 will be voted in accordance with your instructionsthe Board of Directors’ recommendations.
Continued and to be signed on the enclosed proxy card. Any credited shares for which no instructions are received by the Trustee, and any shares in the Plan that were credited between November 20, 2014 and November 26, 2014, will be voted by the Trustee in the same proportion as the shares for which instructions were received from all participants in that Plan.reverse side
Please complete, sign and date the enclosed proxy card, which also serves as a voting instruction form for the Trustee. It should be returned, in the postage-paid envelope provided, to Continental Stock Transfer & Trust Company, which acts as tabulator. Alternatively, you may vote by telephone or via Internet. However you decide to vote, in order to provide the tabulator sufficient time to tabulate the votes, it has been requested that all proxy cards be returned, or votes be cast, as promptly as possible, but no later than January 23, 2015.
You may also have received (i) a Notice Regarding the Availability of Proxy Materials with instructions about how to access the proxy statement and Annual Report with respect to other shares of Energizer Common Stock held by you and/or (ii) additional proxy statements and proxy cards relating to other shares of Energizer Common Stock held by you. If you received a Notice Regarding the Availability of Proxy Materials, please use that notice to access the proxy statement, Annual Report and instructions regarding how to vote your other shares. If you received additional proxy cards, please be advised that these proxies are not duplicates of the one enclosed and we ask that those other shares also be voted as described in the instructions enclosed with such proxies.
WARD M. KLEIN
Chief Executive Officer
