UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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ENERGIZER HOLDINGS, INC.
(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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2018 Energizer® Holdings, Inc. Notice of Annual Shareholders’ Meeting and Proxy Statement
Letter to our Shareholders from Our Independent Chairman and our President and Chief Executive Officer December 13, 2018 Dear Fellow Shareholders, On behalf of our Board of Directors, we are pleased to invite you to attend our Annual Shareholders’ Meeting on Monday, January 28, 2019 at 8:00 a.m., Central Time, at our global headquarters located at 533 Maryville University Drive, St. Louis, MO 63141. A notice of the meeting and our Proxy Statement containing important information about the matters to be voted upon and instructions on how you can vote your shares follow this letter. Your vote is important to us. Please vote as soon as possible even if you plan to attend the meeting. Thank you for your continued investment. Our Board remains committed to building long-term value in the Company for our shareholders. It is a privilege for our Board to serve on your behalf. Sincerely, | Patrick J. Moore Chairman Alan R. Hoskins President and CEO | |||||||
Patrick J. Moore | Alan R. Hoskins | |||||||
Independent Chairman | President and CEO | |||||||
OUR PURPOSE
Energizer Holdings, Inc.
is leading the charge to connect our
brands, our people and the products we
offer to the world better than anyone else.
With a passion for winning, we’re building
a bright future that’s focused on delivering
long-term value to our shareholders,
consumers and customers.
OUR VALUES
INTEGRITY I RESPECT I TEAMWORK I INITIATIVE I PASSION I CHALLENGE
OUR BRANDS
ENERGIZER HOLDINGS, INC.
533 Maryville University Drive
St. Louis, Missouri 63141
Dear Shareholder:Notice of 2019 Annual Shareholders’ Meeting
You are cordially invited to attend the Annual Meeting of Shareholders of Energizer Holdings, Inc., to be held
DATE AND TIME:
Monday, January 28, 2019 at 8:00 a.m., Central Time on Monday, January 30, 2017, at Energizer World Headquarters,
PLACE:
Energizer’s global headquarters, 533 Maryville University Drive, St. Louis, Missouri 63141.
In connection with the Annual Meeting, we have prepared a Notice of Annual Meeting of Shareholders, a Proxy Statement, and our 2016 Annual Report. On or about December 13, 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.
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. If you plan to attend the Annual Meeting, please bring the 2017 Annual Meeting Admission Ticket and proof of identification (such as a driver’s license or other photo identification).
Thank you for your investment in Energizer!
ALAN R. HOSKINS
Chief Executive Officer
December 13, 2016
ENERGIZER HOLDINGS, INC.
533 Maryville University Drive
St. Louis, Missouri 63141
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders:
The Annual Meeting of Shareholders of Energizer Holdings, Inc. will be held at 8:00 a.m. Central Time on Monday, January 30, 2017 at Energizer World Headquarters, 533 Maryville University Drive, St. Louis, Missouri 63141.
The purpose of the meeting is:MATTERS TO BE VOTED UPON:
To elect |
To cast an advisory,non-binding vote on our executive compensation |
3. | To ratify the appointment of |
To act upon any other business that |
and to act upon such other matters as may properly come before our Annual Shareholders’ Meeting
RECORD DATE:
The Board of Director has fixed November 23, 2018 as the record date for the meeting. Only shareholders as of the close of business on that date are entitled to this notice of the meeting and to vote at the meeting.
Important Notice RegardingHOW TO VOTE:
Shareholders of record can vote their shares by using the Internet Availability of Proxy Materialsor the telephone or by attending the meeting in person and voting by ballot. Instructions for the 2017 Annual Meeting.We are mailing to many of our shareholders a notice of availability overvoting by using the Internet or the telephone are set forth in the Notice of the proxy materials, rather than mailing the proxy materials. The noticeInternet Availability that has been provided to you. Shareholders of availability contains instructions on how to access our proxy materials on the Internet, as well as instructions on obtaining a paper copy. All shareholdersrecord who do not receive such a notice of availability, and any shareholders who request to receivereceived a paper copy of the proxy materials will receive a full set of paper proxy materialsmay also vote their shares 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 recordmarking their votes on November 30, 2016. It is important that your shares be represented and voted at the Annual Meeting. Please vote in one of the following ways:
This Notice, the Proxy Statement,meeting in person and the Company’s 2016 Annual Report to Shareholders have also been posted atwww.cstproxy.com/energizer/2016.voting by ballot.
By Order of the Board of Directors,
Hannah H. Kim
Benjamin J. Angelette
Deputy General Counsel & Corporate Secretary
December 13, 20162018
Important notice regarding the availability of proxy materials for the 2019 Annual Shareholders’
Meeting:Our Proxy Statement and 2018 Annual Report to shareholders are available at
http://investors.energizerholdings.com. We commenced mailing and
making available this Proxy Statement on December 13, 2018.
Proxy Summary
EXECUTIVE SUMMARY
Item | Proposal |
Board’s
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Page
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1 |
Election of nine (9) directors
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✓ |
FOR each director nominee
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9 | ||||
2 |
Advisory,non-binding approval of our executive compensation
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✓ |
FOR |
47 | ||||
3 |
Ratification of the appointment of our independent registered public accounting firm for fiscal 2019
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✓ |
FOR |
49 |
TABLE OF CONTENTSCompany Highlights
Delivered strong organic revenue and Adjusted EBITDA growth thepast three years | Global batterymarket share gain of 4.9% in the last four years(1) | |||||||
#1 in battery category(1) Current global share of37.2%(1) | ||||||||
$218M of run-rate savings with 2013 restructuring project | ||||||||
Energizer has built a foundation for delivering long-term value to shareholders, customers
and consumers
Leading with Innovation is Key to Success | ||
• Energizer Bunny is now Bigger, Better & Bunnier • Innovation across all battery segments, auto fragrance and appearance | ||
Effectively Executing Category Fundamentals | ||
• Delivered three (3) consecutive years of organic revenue growth and market share gains | ||
Continuous Improvements Drive Productivity Gains | ||
• Embedded a cost conscious mindset through zero-based budgeting • Continuous improvement mindset since separation |
(1) | Market share data based on value; Nielsen Global Track through August 2018, World Monthly Markets |
Energizer Holdings, Inc. 2018 Proxy Statement |
Proxy Summary
Our Board Nominees
Name |
Age |
Director |
Primary Occupation |
Committee Membership | ||||||||
Audit |
Finance & |
Human Capital | ||||||||||
Patrick J. Moore |
64 |
2015
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Independent Chairman, Energizer Holdings, Inc.
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M, F
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Bill G. Armstrong
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70
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2015
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Retired Executive Vice President and Chief Operating Officer, Cargill Animal Nutrition
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M
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M
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Alan R. Hoskins
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57
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2015
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President and Chief Executive Officer, Energizer Holdings, Inc.
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M
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Kevin J. Hunt
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67
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2015
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Retired Chief Executive Officer and President, Ralcorp Holdings, Inc.
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M
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M
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James C. Johnson
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66
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2015
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Retired General Counsel, Loop Capital Markets LLC
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C
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W. Patrick McGinnis
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71
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2015
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Retired Chairman of the Board, Nestlé Purina PetCare Company
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C
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J. Patrick Mulcahy
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74
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2015
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Former Independent Chairman, Energizer Holdings, Inc.
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M
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Nneka L. Rimmer
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47
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2018
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Senior Vice President, Strategy and Global Enablement, McCormick & Company, Inc.
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M
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Robert V. Vitale
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52
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2017
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Chief Executive Officer, Post Holdings, Inc.
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C, F
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M
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M: Member C: Chair F: Financial Expert
At our 2017 Annual Shareholders’ Meeting, our shareholders approved to amend and restate our Articles of Incorporation tophase-in the elimination of the classified board structure. Cynthia J. Brinkley and John E. Klein are in the class of directors whose terms of service expire at the 2020 Annual Shareholders’ Meeting. Beginning in 2020, all of our directors will serve for aone-year term.
Corporate Governance Highlights
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| 11 | |||
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This summary highlights 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. directors are independent
| • |
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Term expiring in 2019:
Energizer Holdings, Inc.2016 Proxy Statement(i)
2016 PROXY SUMMARY
• Our Audit and Human Capital Committees are comprised solely of | |||||
Independent Chairman | • We have an Independent Chairman, selected by the independent directors • The Independent Chairman serves as liaison between management and the other independent directors | ||||
Executive | • Executive sessions of | ||||
Oversight of Risk Management | • Our Board has principal responsibility for oversight of the Company’s risk management process and understanding of the overall risk profile, including cyber risk |
Energizer Holdings, Inc. 2018 Proxy Statement |
Proxy Summary
Not standing for re-election due to retirement age:
Board Practices | • Annual self-assessment process for the Board and • Added two new directors to the Board in the past two years • Majority voting standard for all directors • Beginning in 2020, annual election of all directors • No poison pill • Active Board engagement in succession planning of executive officers • Commitment to Board refreshment and director succession | |||
Ethics and Compliance | • From manufacturing quality products to meeting our customers’ needs, we work hard to be the best and play by the rules, while valuing every colleague and partner that makes up our team |
Executive Compensation Highlights
Our primary compensation strategy is “Pay for Performance” which drives a mindset of accountability and productivity. Our compensation guiding principles are to structure executive compensation that is simple, aligned and balanced. We believe our guiding principles are strongly aligned with our corporate strategic priorities and our vision for shareholder value creation.
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Package
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| • Our aggregate pay packages are targeted at the 50th percentile for our peer |
(ii)Energizer Holdings, Inc.2016 Proxy Statement
2016 PROXY SUMMARY
Annual Program | In fiscal |
| 25% related to adjusted free cash flow; |
| 25% related to adjusted net sales; |
| 25% related to adjusted SG&A as % of net sales; and |
| 25% related to adjusted operating |
Equity Awards | • In fiscal |
Supplemental Retirement Plans | • Certain of our executives participate in the retirement plans available for all employees; the supplemental retirement plans restore retirement benefits otherwise limited by federal |
Energizer Holdings, Inc. 2018 Proxy Statement |
Table of Contents
PROXY STATEMENT TABLE OF CONTENTS
Energizer Holdings, Inc. 2018 Proxy Statement |
THE BOARD OF DIRECTORS AND ENERGIZER’S CORPORATE GOVERNANCE
Energizer Holdings, Inc.2016 Proxy Statement(iii)
PROXY STATEMENT—VOTING PROCEDURESBOARD LEADERSHIP STRUCTURE
YOUR VOTE IS VERY IMPORTANT
TheOur Board of Directors is soliciting proxies to be used atregularly considers the 2017 Annual Meeting. This proxy statement,appropriate leadership structure for the form of proxyCompany and has concluded that the Company’s 2016 Annual Report to Shareholders will be available atwww.cstproxy.com/energizer/2016 beginningCompany and its shareholders are best served by not having a formal policy on December 13, 2016. A Notice Regardingwhether the Availability of Proxy Materials will be mailed to shareholders on or about December 13, 2016.
How to Receive Printed Materials
We have elected to take advantagesame individual should serve as both Chief Executive Officer and Chairman of the SecuritiesBoard. This flexibility allows the Board to utilize its considerable experience and Exchange Commission’s (the “SEC”) rule that allows usknowledge to furnish proxy materials to you online. We believe electronic delivery will expedite shareholders’ receipt of materials, while lowering costs and reducingelect the environmental impact of our Annual Meeting by reducing printing and mailing of full sets of materials. On or about December 13, 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 copymost qualified director as Chairman of the proxy materials unless you specifically request one. However,Board, while maintaining the Notice contains instructions on howability to receive a paper copyseparate the Chairman and Chief Executive Officer roles when appropriate. Currently, we have an Independent Chairman of the materials.
Who Can Vote
Record holdersBoard who is appointed annually by the independent directors. The roles of Energizer Holdings, Inc. common stock on November 30, 2016 may vote atChairman and Chief Executive Officer have been separate since 2015. Our Chief Executive Officer has primary responsibility for the meetingoperational leadership and any adjournment or postponement thereof. On November 30, 2016, there were 61,933,991 sharesstrategic direction of common stock outstanding. The sharesthe Company, while our Independent Chairman facilitates our Board’s independent oversight of common stock held in our treasury will not be voted.
How You Can Vote
There are four voting methods for record holders:management.
Independent Chairman Duties Mr. Moore currently serves as Independent Chairman of the Board. Key responsibilities include: �� • Calling meetings of the Board and independent directors • Chairing executive sessions of the independent directors • Establishing Board culture • Setting the Board meeting agenda in consultation with the other directors, the Chief Executive Officer and the Corporate Secretary • Acting as an advisor to the Chief Executive Officer • Leading the annual self-assessment of the Board |
Please note that if you are a record holder and plan to vote in person at the meeting, you should bring the attached 2017 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 the proxy at any time before it is voted at the Annual Meeting by:
Energizer Holdings, Inc.2016 Proxy Statement1
PROXY STATEMENT—VOTING PROCEDURES
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 anyAs of the itemsdate of business atthis Proxy Statement, our Board has eleven (11) directors and the Annual Meeting.following three (3) Board Committees: (1) Audit, (2) Human Capital, and (3) Finance and Oversight. The presence atcurrent membership and the meeting, in person or by proxy,function of each of the holders of a majorityBoard committees are described below. Each of the shares of the Company’s common stock entitled to vote at the meeting is necessary to constitutecommittees operates under a quorum.
The election of each director nominee, the ratification of the Company’s independent registered public accounting firm for 2017 and the approval of executive compensation by non-binding vote 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.
The amendment and restatement of the Company’s Amended and Restated Articles of Incorporation must be approvedwritten charter adopted by the holders of record of two-thirds of the outstanding shares of common stock of the Company then entitled to vote generally in the election of directors.Board. During fiscal 2018, our Board held eight (8) meetings.
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,In fiscal 2018, the Board of Directors and therenamed its Nominating and Executive Compensation Committee as the Human Capital Committee. The Board has long recognized that our colleagues are one of our most important assets and is engaged with management on ensuring that our Company is an employer of choice for the most talented employees in our industry. While the full Board discusses human capital management with regards to its role in overseeing our overall long-term strategy, our Human Capital Committee has responsibility for overseeing human capital management.
Energizer Holdings, Inc. 2018 Proxy Statement 1 |
Corporate Governance
COMMITTEE COMPOSITION
Audit Committee | ||
Members: Bill G. Armstrong John E. Klein Patrick J. Moore Nneka L. Rimmer Robert V. Vitale (Chair) Meetings in Fiscal 2018:5 The Board has determined that each member of the Audit Committee is independent within the meaning of Energizer’s independence standards and applicable New York Stock Exchange (“NYSE”) and Securities and Exchange Commission (“SEC”) rules and regulations, and Mr. Moore and Mr. Vitale are audit committee financial experts. | • Reviews internal auditing, accounting, financial reporting, internal control and risk management functions • Responsible for engaging and supervising our independent accountants, resolving differences between management and our independent accountants regarding financial reporting,pre-approving all audit andnon-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 • Reviews (i) management’s programs to identify, assess, manage, and mitigate significant enterprise risks of the Company, including both strategic and operational risks, and (ii) the Company’s risk management structures and practices, including cyber risk • Exercises oversight of the Company’s compliance program, with direct access to the Company’s Chief Compliance Officer |
Human Capital Committee | ||
Members: Bill G. Armstrong Cynthia J. Brinkley Kevin J. Hunt James C. Johnson (Chair) Meetings in Fiscal 2018:6 The Board has determined that each member of the Human Capital Committee is independent within the meaning of Energizer’s independence standards and applicable NYSE and SEC rules and regulations. Committee Interlocks and Insider Participation No member of the Human Capital Committee is or has been an officer or employee of the Company or any of its subsidiaries. In addition, no member of the Human Capital Committee had any relationships with the Company or any other entity that require disclosure under the proxy rules and regulations promulgated by the SEC. | • Oversight of the Company’s culture • Sets compensation of our executive officers, administers our Equity Incentive Plan and grants equity-based awards, including performance-based awards, under the plan • 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 • Recommends to the Board nominees for election as directors • Has responsibility for the Corporate Governance Principles |
Finance and Oversight Committee | ||
Members: Alan R. Hoskins Kevin J. Hunt John E. Klein W. Patrick McGinnis (Chair) J. Patrick Mulcahy Robert V. Vitale Meetings in Fiscal 2018:7 | • Reviews our financial condition, objectives and strategies, and acquisitions and other major transactions and capital expenditures • Makes recommendations to the Board concerning financing requirements, our share repurchase program and dividend policy, foreign currency management and pension fund performance • Reviews casualty and liability insurance programs and requirements • Reviews performance of defined benefit plan investment managers and trustees and the investment objectives |
2 Energizer Holdings, Inc. 2018 Proxy Statement |
Corporate Governance
COMMITTEE COMPOSITION
The Company’s Corporate Governance Principles and all of the Board Committee charters are available on the Company’s website,www.energizerholdings.com if you click on “Investors,” then “Corporate Governance”, then “Overview”.
One of the Board’s primary responsibilities is to oversee the development of appropriate executive-level talent to successfully execute the Company’s strategy. Management succession is regularly discussed by the independent directors in executive session and with the Chief Executive Officer. The Board reviews candidates for all senior executive positions to confirm that qualified successor-candidates are available for all positions and that development plans are being utilized to strengthen the skills and qualifications of successor-candidates.
Our Independent Chairman oversees the process for the Chief Executive Officer succession and leads, at least annually, the Board’s discussion of Chief Executive Officer succession planning. Our Chief Executive Officer reviews with the Board development plans for successors of the other executive officer roles. Directors engage with potential Chief Executive Officer and senior management talent at Board and Committee meetings and in less formal settings to enable directors to personally assess candidates. The Board reviews management succession in the ordinary course of business as well as contingency planning.
BOARD AND COMMITTEE ASSESSMENT
The Board and each Committee conducts an annual self-evaluation to assess effectiveness and consider opportunities for improvement. The self-evaluation process is managed by the Human Capital Committee. The Independent Chairman of the Board as well as each Committee Chair leads the Board and Committee in a robust assessment on an annual basis.
Matters considered in the self-evaluation include the following:
• The effectiveness of the Board’s leadership and Committee structure • Dynamics between the Board and management • Engagement of and preparation by Board and Committee members | • Board and Committee skills, composition and diversity and Board succession planning • Board and Committee culture and dynamics, including the effectiveness of discussion and debate at Board and Committee meetings • Quality of Board materials and agendas |
Energizer Holdings, Inc. 2018 Proxy Statement 3 |
Corporate Governance
BOARD OVERSIGHT OF RISK
The Board, acting both directly and through its Committees, is actively involved in oversight of the significant risks affecting our business. The Board and its Committees’ risk oversight activities are informed by our management’s risk assessment and risk management processes. In particular, our Board and each Committee focuses on overseeing the following risks:
Board | Audit Committee | Human Capital Committee | Finance and Oversight | |||
• Strategic risks, including cyber risk • Company culture of compliance and risk management • CEO and Executive Officer management performance and succession planning • Board governance and practices • Independence of the Company’s risk management functions | • Internal and external fraud • Financial reporting risk • Expense risk • Oversight of internal audit and compliance functions • Oversight of the Company’s risk management structures and practices, including cyber risk | • Compensation and benefits risk • Talent risk • Board governance and practices • Lobbying expenses and political contributions • Corporate responsibility risk | • Market risk • Insurance risk • Liquidity risk • Credit risk |
Structure of Risk Oversight and Risk Management
The Board’s role in risk oversight is consistent with the Company’s leadership structure, with management havingday-to-day responsibility for assessing and managing the Company’s risk exposure and the Board, directly and through its committees, providing oversight in connection with those efforts, with particular focus on the most significant risks facing the Company. Management meets regularly to discuss our business strategies, challenges, risks and opportunities and reviews those items with the Board at regularly scheduled meetings.
The risk oversight responsibility of the Board and its Committees is enabled by management evaluation and 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 as well as compliance matters. Management ofday-to-day operational, financial and legal risks and compliance issues is the responsibility of operational and executive leadership of the Company.
The Company has established a comprehensive risk management process that is primarily managed by two risk committees, the Executive Compliance and Risk Committee (the “Executive Risk Committee”) and the Compliance and Risk Subcommittee (the “Risk Subcommittee”). Each committee is sponsored by our Chief Financial Officer, andco-led by our Chief Compliance Officer and our Vice President, Internal Audit. Executive Risk Committee The Executive Risk Committee is made up of members of the executive management team, and sets the tone and direction for the risk management program. The Executive Risk Committee provides oversight to the risk management process, ensures adequate focus on high priority risks, reviews Risk Subcommittee reports, and receives updates on significant compliance investigations worldwide. The committeeco-leads meet annually with Executive Risk Committee members who are high priority risk owners in order to discuss the identified risks and ensure appropriate mitigation actions are being taken. The Executive Risk Committee reports directly to the Audit Committee and advises the Audit Committee on a quarterly basis regarding the Company’s risk management structure and practices, as well as management’s programs to identify, assess, manage, and mitigate significant enterprise risks of the Company. The Audit Committee, in turn, reports to our Board. The Executive Risk Committee also presents directly to the Board with regard to these matters on an annual basis. |
4 Energizer Holdings, Inc. 2018 Proxy Statement |
Corporate Governance
BOARD OVERSIGHT OF RISK
Risk Subcommittee The Risk Subcommittee is made up of a cross functional team of emerging leaders that are one to three organizational levels below our senior executives who can provide a perspective on the practical implementation of our compliance and risk management programs. The purpose of the Risk Subcommittee is to: • establish the risk management process; • identify and evaluate risks based on both their perceived impact on our Company and likelihood of occurrence, which include, among others, economic, industry, enterprise, operational, compliance and financial risks; • identify and verify actions that would reasonably mitigate risks; • verify the results of the risk analysis and mitigation efforts with the appropriate levels of management; and • ensure regulatory and compliance issues are being addressed. The Risk Subcommittee reports directly to and provides quarterly reports to the Executive Risk Committee. |
At Energizer, our values are the foundation for all that we do, and we work hard to be the best and play by the rules, while valuing every colleague and partner that makes up our team. Our Code of Conduct is based on one of our Company values — integrity — that serves as the foundation for our individual actions and decisions as colleagues.
Our commitment to our values will help us continue to lead in the markets where we work and make our brand globally known and respected.
We also have a Supplier Code of Conduct which 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 hold our suppliers to a high standard and use a risk-based approach to audit suppliers for ongoing compliance.
Our approach to corporate responsibility all boils down to one simple thought: “Do the right thing”, and we have developed a three-part approach to execute.
First is a focus on reducing the impact our Company and products have on the environment. Through various efforts including product development, packaging, recycling and outreach programs, we are careful to make choices with environmental benefit in mind. | ||||
The second part reflects the fact that we care about society. We focus on making a positive impact on our local communities, including providing safe work environments for our colleagues and participating in various partnerships,colleague-led grassroots programs and volunteer efforts globally. | ||||
Third, but equally as important, is our commitment to our shareholders. All of our efforts on behalf of the environment and our communities are also designed to complement and support the overall financial health of the Company. |
Energizer Holdings, Inc. 2018 Proxy Statement 5 |
Corporate Governance
COMMUNICATING CONCERNS TO THE BOARD
COMMUNICATING CONCERNS TO THE BOARD
Shareholders may contact our Board, any director (including the Independent Chairman), or any Committee. Communications will be received and processed by management before being forwarded to the Board, a Committee or a director, as designated in your message.
Corporate Secretary Energizer Holdings, Inc. 533 Maryville University Drive St. Louis, MO 63141 |
Concerns relating to our financial statements, accounting practices, internal controls or violations of our Code of Ethics should be addressed in accordance with the procedures outlined in our Code of Conduct, which is available on our website athttp://investors.energizerholdings.com/corporate-governance.
6 Energizer Holdings, Inc. 2018 Proxy Statement |
The Human Capital Committee 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 decisionsrecommending candidates 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 byelection to our Board of Directors.Directors, consistent with the requirements for membership set forth in our Corporate Governance Principles.
If any other matters are properly presented atIn fiscal 2018, the Annual MeetingHuman Capital Committee continued to identify director candidates through the use of an external search firm. Ms. Rimmer was identified by an external search firm for consideration,inclusion as a director candidate and was appointed to the persons named in your properly submitted proxy card will haveBoard, following 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 OwnersHuman Capital Committee’s evaluation and Broker Non-Votes
If your shares are heldnomination. The Human Capital Committee also considers candidates proposed 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.directors, management, and our shareholders.
The broker, bank, or other nominee may voteHuman Capital Committee also considers shareholder recommendations for candidates for 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 to amend and restate the Company’s Amended and Restated Articles of Incorporation 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
2Energizer Holdings, Inc.2016 Proxy Statement
PROXY STATEMENT—VOTING PROCEDURES
appointment of our accounting firm (Item 2 of this Proxy Statement). 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 and the advisory vote on executive compensation, but will have the effect of votes “against” the amendment and restatement of the Company’s Amended and Restated Articles of Incorporation.
Costs of Solicitation
We will pay for preparing, printing and mailing this proxy statement. We have engaged Laurel Hill to help solicit proxies from shareholders (in person, by phone or otherwise) for a fee of $9,500 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 2016.
Energizer Holdings, Inc.2016 Proxy Statement3
Our Board of Directors currently consists of ten members and is divided into three classes, with each class consisting of three members other thanusing the class upsame criteria described below. Additional information can be found in the section “Shareholder Proposals for re-election at the 20192020 Annual Shareholders’ Meeting which has four members. The terms of service of the classes expire at successive annual meetings. Having reached the Board retirement age, John R. Roberts will not stand for re-election at”.
At the 2017 Annual Meeting.
Our Board has approved a proposal for shareholder approval atShareholders’ Meeting, the 2017 Annual Meetingshareholders voted to amend and restate the Amended and Restated Articles of Incorporation of the Company that resulted in orderaphased-in elimination of the classified board. Our Board of Directors currently consists of two (2) classes: one class consisting of two (2) directors whose terms of service expire at the 2020 Annual Shareholders’ Meeting and one class consisting of nine (9) directors whose terms of service expire at the 2019 Annual Shareholders’ Meeting. Beginning with the 2020 Annual Shareholders’ Meeting, our shareholders will be electing all Board members on an annual basis.
The Human Capital Committee works with our Board to providedetermine the characteristics, skills, and experience for the staged declassificationBoard with the objective of having a board with diverse backgrounds, skills, and experience.
For all directors, we require independence, integrity, energy, forthrightness, analytical skills and commitment to devote the necessary time and attention to the Company’s affairs. In evaluating the suitability of individual director candidates, our Board considers many factors, including educational and professional background; personal accomplishments; industry experience; and diversity on the basis of race, color, national origin, gender, religion, disability and sexual orientation.
Directors should be able to devote sufficient time to the affairs of the Company and be diligent in fulfilling the responsibilities of a director and Board Committee member, including developing and maintaining sufficient knowledge of the Company and its industries; reviewing and analyzing reports and other information important to the Board and Committee responsibilities; preparing for, attending and participating in Board and Committee meetings; and satisfying appropriate orientation guidelines.
The Human Capital Committee is also responsible for articulating and refining specific criteria for Board and Committee membership to supplement the more general criteria.
Mr. Mulcahy, who is currently 74, has been a director on our Board since 2015 and was unanimously appointed by the independent directors to serve as the Independent Chairman of our Board from 2015 until 2018. During Mr. Mulcahy’s service, he has continued to enhance the Board’s oversight of Directors. For more information regarding this proposal, see “Item 4. Proposal to Amend and Restate the Company’s Amended and Restated Articles of Incorporation to Provide for the Declassificationmanagement, given his extensive experience of the industry and the Company, and has provided an invaluable perspective for both the Board and management. Although Mr. Mulcahy has reached the retirement age set forth within our Corporate Governance Principles, the Board has requested that Mr. Mulcahy stand for nomination forre-election to our Board at our 2019 Annual Shareholders’ Meeting to provide continuity and a smooth transition of the Chairman role, and Mr. Mulcahy has accepted this request.
Energizer Holdings, Inc. 2018 Proxy Statement 7 |
Board of Directors” below.
Two
DIRECTOR INDEPENDENCE
Having an independent board is a critical element of our corporate governance. Our Corporate Governance Principles provide that a majority of our directors will be elected at the 2017 Annual Meeting to serve for a three-year term expiring at our Annual Meeting in 2020. Theindependent. Our Board has nominated Cynthia J. Brinkleyadopted director independence guidelines to assist in determining each director’s independence. The guidelines either meet or exceed the independence requirements of the NYSE.
Each year and John E. Klein for election as directors at this meeting. Each nomineebefore a new director is currently serving asappointed, the Board must affirmatively determine a director and has consented to serve forno relationship that would interfere with the three-year term. Each nominee elected as a director will continueexercise of independent judgment in office untilcarrying out his or her successor has been electedresponsibilities as a director. Annually, each director completes a detailed questionnaire that provides information about relationships that might affect the determination of independence. Management provides the Human Capital Committee and qualified.
We do not knowBoard with relevant known facts and circumstances of any reason whyrelationship bearing on the independence of a director or nominee. The Human Capital Committee then completes an assessment of each director, considering all known relevant facts and circumstances concerning any relationship bearing on the independence of a director or nominee. This process includes evaluating whether any identified relationship otherwise adversely affects a director’s independence and affirmatively determining that the nominees for director named herein would be unable to serve; however, if any nominee is unable to servehas no material relationship with the Company, another director, or as a director atpartner, shareholder, or officer of an organization that has a relationship with the time ofCompany.
Based on the Annual Meeting, your proxy may be voted forreview and recommendation by the election of another personHuman Capital Committee, the Board may nominate in his place, unless you indicate otherwise.
Vote Required. The affirmative vote of a majority ofanalyzed the voting power represented in person or by proxy and entitled to vote is required for the electionindependence of each director.director and determined that all nominees with the exception of Mr. Hoskins, our President and Chief Executive Officer, meet the standards of independence under our Corporate Governance Principles.
The Board of Directors recommends a vote FOR the election of these nominees as directors of the Company.
4Energizer Holdings, Inc.2016 Proxy Statement
INFORMATION ABOUT NOMINEES AND OTHER DIRECTORS
Please review the following information about the nominees and other directors continuing in office. The ages shown are as of December 31, 2016.
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directors haveinternational experience | |
9 | directors haveserved on another public company board in the | |
6 | directors haveconsumer packaged goods experience | |
2 | directors arewomen | |
2 | directors areAfrican-American
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Our nine (9) director nominees:
Energizer Holdings, Inc.2016 Proxy Statement5represent diverse backgrounds and viewpoints;
INFORMATION ABOUT NOMINEES AND OTHER DIRECTORShave served as senior leaders in the areas of legal, operations, finance, corporate development, technology and human resources;
have proven leadership skills; and
strengthen our Board’s oversight capabilities by providing historical and new perspectives about our Company.
8 Energizer Holdings, Inc. 2018 Proxy Statement
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Board of Directors
ELECTION OF DIRECTORS
6Proposal 1: Election of DirectorsEnergizer Holdings, Inc.2016
Set forth in this section are each nominee’s and each director’s name, age as of our Annual Shareholders’ Meeting, principal occupation, business experience, other current and prior public company directorships held during the past five years. We also discuss the qualifications and skills that led our Board to nominate each person for election as a director. All of the nominees are current directors, and each agreed to be named in this Proxy Statement and to serve if elected.
INFORMATION ABOUT NOMINEES AND OTHER DIRECTORS
| Bill G. Armstrong
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Energizer Holdings, Inc.2016 Proxy Statement7
INFORMATION ABOUT NOMINEES AND OTHER DIRECTORS
Mr. Armstrong is a private equity investor. From 2001 to 2004, Mr. Armstrong served as Executive Vice President and Chief Operating Officer at Cargill Animal Nutrition. Prior to his employment with Cargill, Mr. Armstrong served as Chief Operating Officer of Agribrands International, Inc., an international agricultural products business, and as Executive Vice President of Operations of the international agricultural products business of Ralston Purina Company. He also served as managing director of Ralston’s Philippine operations, and during his tenure there, was a director of the American Chamber of Commerce.
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Age:70 Independent Director Energizer Committees: Audit Committee Human Capital Committee Past Public Company Boards: • Ralcorp Holdings, Inc. • Former parent company, Edgewell Personal Care Company | Skills and Experience: • Executive Management • Public Company Experience • Business Operations • International • M&A/Capital Markets • Marketing/Sales • Consumer Packaged Goods Experience | |||
As a result of Mr. Armstrong’s international and operational background, as well as his extensive experience with corporate transactions, he provides a global perspective to the Board, which has become increasingly important as our international operations represent a significant portion of our annual sales. |
Energizer Holdings, Inc. 2018 Proxy Statement 9 |
Board of Directors
ELECTION OF DIRECTORS
Cynthia J. Brinkley Chief Administrative and Markets Officer, Centene Corporation Continuing in office, term expiring in 2020 | ||||
Director Since 2015 Ms. Brinkley is Chief Administrative and Markets Officer for Centene Corporation, a government services managed care company. At Centene, Ms. Brinkley has had responsibility for overseeing global corporate development, integration and international operations. Prior to joining Centene in 2014, Ms. Brinkley was Vice President of Global Human Resources for General Motors from 2011 to 2013. Prior to GM, she was Senior Vice President of Talent Development and Chief Diversity Officer for AT&T from 2008 to 2011. Ms. Brinkley worked for SBC Communications from 1986 to 2008, lastly as President of SBC / AT&T Missouri, when SBC Communications acquired AT&T. | ||||
Age:59 Independent Director Energizer Committee: Human Capital Committee | Skills and Experience: • Executive Management • Public Company Experience • Business Operations • M&A/Capital Markets • International • Public Relations • Human Capital Management Ms. Brinkley brings significant experience in communications and human capital management as well as extensive experience as a senior executive at Fortune 10 and Fortune 200 companies to our Board of Directors and provides the Board with a unique perspective on high-profile issues facing our core businesses. |
Alan R. Hoskins President and Chief Executive Officer, Energizer Holdings, Inc. | ||||
Director Since 2015 Mr. Hoskins has been President and Chief Executive Officer of Energizer Holdings, Inc. since July 2015. Prior to his current position, he served as President and Chief Executive Officer, Energizer Household Products of Edgewell Personal Care Company, our former parent company, a position he held since April 2012. Mr. Hoskins held several leadership positions including Vice President, Asia-Pacific, Africa and Middle East from 2008 to 2011, Vice President, North America Household Products Division from 2005 to 2008, Vice President, Sales and Trade Marketing from 1999 to 2005, and Director, Brand Marketing from 1996 to 1999. He started his career at Union Carbide in 1983 following several years in the retailer, wholesaler and broker industry. | ||||
Age:57 Energizer Committee: Finance and Oversight Committee | Skills and Experience: • Executive Management • Public Company Experience • Business Operations • Public Relations • International • Marketing/Sales • Consumer Packaged Goods Experience | |||
Mr. Hoskins is very knowledgeable about the dynamics of our business and the categories in which we compete. His experience with the complex financial and operational issues of consumer products businesses brings critical financial, operational and strategic expertise to our Board of Directors. |
10 Energizer Holdings, Inc. 2018 Proxy Statement |
Board of Directors
ELECTION OF DIRECTORS
Kevin J. Hunt Retired Chief Executive Officer and President, Ralcorp Holdings, Inc. | ||||
Director Since 2015 Mr. Hunt served as President and Chief Executive Officer of Ralcorp Holdings, Inc., a private-brand food and food service products company, from January 2012 to January 2013 upon its acquisition by ConAgra Foods, Inc. Mr. Hunt previously served asCo-Chief Executive Officer and President of Ralcorp Holdings from 2003 to 2011 and Corporate Vice President from 1995 to 2003. Prior to joining Ralcorp Holdings, he was Director of Strategic Planning for Ralston Purina and before that he was employed in various roles in international and domestic markets and general management by American Home Products Corporation. He currently serves as a Senior Advisor to C.H. Guenther & Son Inc. and previously served as a consultant to Treehouse Foods and on the advisory Board of theVi-Jon Company, owned by Berkshire Partners. |
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Age:67 Energizer Committees: Finance and Oversight Committee Human Capital Committee Other Public Company Board: • Clearwater Paper Company Past Public Company Board: • Ralcorp Holdings, Inc. |
Skills and Experience: • Executive Management • Public Company Experience • Business Operations • M&A/Capital Markets • Marketing/Sales • Consumer Packaged Goods Experience As a former Chief Executive Officer and President of a NYSE-listed company, Mr. Hunt brings his considerable experience to our Board and the Committees thereof on which he serves. |
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Director Since 2015 Mr. Johnson served as General Counsel of Loop Capital Markets LLC, a financial services firm, from November 2010 until his retirement in January 2014. From 1998 to 2009, Mr. Johnson served in a number of positions at The Boeing Company, an aerospace and defense firm, including Vice President, Corporate Secretary and Assistant General Counsel from 2003 until 2007, and Vice President and Assistant General Counsel, Commercial Airplanes from 2007 to his retirement in March 2009. | ||||
Age:66 Independent Director Energizer Committee: Human Capital Committee (Chair) Other Public Company Boards: • Ameren Corporation • Hanesbrands Inc. • Edgewell Personal Care Company |
Skills and Experience: • Public Company Experience • M&A/Capital Markets • Corporate Governance • Human Capital Management • Legal/Regulatory • Risk Management/Compliance | |||
As a former General Counsel of a financial services firm and a former Vice President, Corporate Secretary and Assistant General Counsel of an aerospace and defense firm, Mr. Johnson provides our board with extensive executive management and leadership experience, as well as strong legal, compliance, risk management, corporate governance and compensation skills. |
8Energizer Holdings, Inc.2016 Proxy Statement
INFORMATION ABOUT NOMINEES AND OTHER DIRECTORS
Energizer Holdings, Inc. 2018 Proxy Statement 11 |
Board of Directors
ELECTION OF DIRECTORS
John E. Klein Retired President, Randolph College Continuing in office, term expiring in 2020 | ||||
Mr. Klein earned a law degree and practiced law in New York City for several years before joining Bunge Ltd. He is also a Trustee of the American University of Paris. | ||||
Age:73 Independent Director Energizer Committees: Audit Committee Finance and Oversight Committee Past Public Company Boards: • Embrex, Inc. • Former parent company, Edgewell Personal Care Company | Skills and Experience: • Executive Management • Business Operations • International • Corporate Governance • Legal/Regulatory • Risk Management/Compliance | |||
Mr. Klein has significant executive management and administrative experience in agribusiness and higher education and brings the benefits of his diverse legal, international, operational and administrative background and experience to our Board. |
W. Patrick McGinnis Retired Chairman of the Board, Nestlé Purina PetCare Company | ||||
Director Since 2015 Mr. McGinnis | ||||
Age:71 Independent Director Energizer Committee: Finance and Oversight Committee (Chair) Other Public Company Board: • Caleres, Inc. Past Public Company Board: • Former parent company, Edgewell Personal Care Company | Skills and • Executive Management • Public Company Experience • M&A/Capital Markets • Business Operations • International Business • Public Relations • Marketing/Sales • Consumer Packaged Goods Experience | |||
Mr. McGinnis has over forty years of experience in consumer products industries, including almost twenty years as chief executive of the Purina pet food business. As a result, he has expertise with respect to marketing and other commercial issues, competitive challenges, and long-term strategic planning, as well as valuable perspectives with respect to potential acquisitions of consumer products businesses that make him an invaluable member of our Board. |
12 Energizer Holdings, Inc. 2018 Proxy Statement |
Board of Directors
ELECTION OF DIRECTORS
Patrick J. Moore Chairman, Energizer Holdings, Inc.
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Mr. Moore has served as the Company’s Chairman since
During his 24 year tenure at Smurfit, Mr. Moore also served as Chief Financial Officer, Vice President—Treasurer and General Manager of the Company’s Industrial Packaging division. Smurfit-Stone Container Corp voluntarily filed for Chapter 11 bankruptcy in January 2009 and emerged in June 2010. Mr. Moore previously held positions in corporate lending, international banking and corporate administration at Continental Bank in Chicago. He is on the board of Archer Daniels Midland Company and serves on the North American Review Board of American Air Liquide Holdings, Inc. as well as the St. Louis Zoological Society and the Big Shoulders Fund. | |||
Age:64 Energizer Committee: Audit Committee Other Public Company Board: • Archer Daniels Midland Company Past Public Company Boards: • Ralcorp Holdings, Inc. • Exelis, Inc. • Rentech, Inc. | Skills and Experience: • Executive Management • Finance • Public Company Experience • Business Operations • International • M&A/Capital Markets • Corporate Governance • Public Relations • Risk Management/Compliance | |||
Mr. Moore’s experience and financial expertise contribute to the oversight of overall financial performance and reporting by our Board as well as operational and strategic oversight. |
Energizer Holdings, Inc. 2018 Proxy Statement 13 |
Board of Directors
ELECTION OF DIRECTORS
J. Patrick Mulcahy Former Chairman, Energizer Holdings, Inc. |
Director Since 2015 Mr. Mulcahy served as Chairman of Energizer’s Board of Directors since July 2015 until November 2018 and served as Chairman of the Board of Edgewell Personal Care Company, our former parent company, from 2007-2015. He served as Vice Chairman of the Board of our former parent company from January 2005 to January 2007, and prior to that time served as Chief Executive Officer of our former parent company from 2000 to 2005, and as Chairman of the Board and Chief Executive Officer of Eveready Battery Company, Inc. from 1987 until his retirement in 2005. | ||||
Age:74 Independent Director Energizer Committee: Finance and Oversight Committee Past Public Company Boards: • Ralcorp Holdings, Inc. • Solutia, Inc. • Hanesbrands Inc. • Former parent company, Edgewell Personal Care Company | Skills and Experience: • Executive Management • Public Company Experience • Business Operations • Public Relations • International • Marketing/Sales • M&A/Capital Markets • Consumer Packaged Goods Experience | |||
Mr. Mulcahy has over 40 years of experience in consumer products industries, including almost 20 years as chief executive of Energizer’s battery business. He is very knowledgeable about the dynamics of our business and the categories in which we compete. His experience with the complex financial and operational issues of consumer products businesses brings critical financial, operational and strategic expertise to our Board of Directors. |
14 Energizer Holdings, Inc. 2018 Proxy Statement |
Board of Directors
ELECTION OF DIRECTORS
Nneka L. Rimmer Senior Vice President, Strategy and Global Enablement, McCormick & Company, Inc. | ||||
Director Since 2018 Ms. Rimmer is Senior Vice President, Strategy and Global Enablement at McCormick & Company, Inc. where she is responsible for shaping overall corporate strategies and leading the delivery of strategic business enablers and value-producing business services across the company. Ms. Rimmer provides strategic direction for mergers and acquisitions and is responsible for shaping the corporate-wide portfolio strategy. In addition, she oversees McCormick’s Global Enablement, Information Technology, Corporate Development and Corporate Strategy Teams. Prior to joining McCormick in 2015, Ms. Rimmer was a Partner and Managing Director with the Boston Consulting Group. While at Boston Consulting Group for 13 years, she executed large-scale transformation initiatives working with large, global consumer goods corporations. Her areas of strategic expertise includes trade, competition, international growth,go-to-market as well as organizational development. | ||||
Age:47 Independent Director Energizer Committee: Audit Committee | Skills and Experience: • Executive Management • Public Company Experience • M&A/Capital Markets • Finance • Information Technology • Human Capital Management • Consumer Packaged Goods Experience • Business Operations • Analytics | |||
Ms. Rimmer brings to the Company significant brand-building expertise. Her current and prior executive leadership roles enable her to provide valuable contributions with respect to creativity and vision for long-term growth. Ms. Rimmer’s extensive consumer products background allow her to contribute valuable insights regarding the Company’s industry, operations, and strategy. |
Energizer Holdings, Inc. 2018 Proxy Statement 15 |
Board of Directors
ELECTION OF DIRECTORS
Robert V. Vitale Chief Executive Officer, Post Holdings, Inc. | ||||
Director Since 2017 Mr. Vitale is President and Chief Executive Officer of Post Holdings, Inc. Post is a diversified food company with leading positions in ready to eat cereal, value added egg products, sports nutrition and various private brand categories. Rob joined Post in 2011 as its Chief Financial Officer. Prior to joining Post, Rob led AHM Financial Group, LLC (2006-2011), an insurance brokerage and wealth management firm, and was a partner in Westgate Equity Partners, LLC, a consumer products private equity firm (1996-2006). He managed Corporate Finance at Boatmens Bancshares (1994-1996), and started his career at KPMG in 1987. | ||||
Age:52 Independent Director Energizer Committees: Audit Committee (Chair) Finance and Oversight Committee Other Public Company Board: • Post Holdings, Inc. | Skills and Experience: • Executive Management • Public Company Experience • M&A/Capital Markets • Finance • Consumer Packaged Goods Experience • International
Mr.
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16Energizer Holdings, Inc. |
Board of Directors
THE BOARD OF DIRECTORS AND ENERGIZER’S CORPORATE GOVERNANCEDIRECTOR ATTENDANCE
STANDING COMMITTEES AND MEETINGS
Board Member | Board | Audit | Nominating and Executive Compensation | Finance and Oversight | ||||||||||
Bill G. Armstrong | ✓ | ✓ | ✓ | |||||||||||
Cynthia J. Brinkley | ✓ | ✓ | ||||||||||||
Alan R. Hoskins | ✓ | ✓ | ||||||||||||
Kevin J. Hunt | ✓ | ✓ | ✓ | |||||||||||
James C. Johnson | ✓ | ✓* | ||||||||||||
John E. Klein | ✓ | ✓ | ✓ | |||||||||||
W. Patrick McGinnis | ✓ | ✓* | ||||||||||||
Patrick J. Moore | ✓ | ✓ | ||||||||||||
J. Patrick Mulcahy | ✓* | ✓ | ||||||||||||
John R. Roberts | ✓ | ✓* | ||||||||||||
Meetings held in fiscal year 2016 | 7 | 5 | 7 | 4 |
Audit: Reviews auditing, accounting, financial reporting, internal control and risk management 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. Reviews (i) management’s programs to identify, assess, manage, and mitigate significant enterprise risks of the Company, including both strategic and operational risks, and (ii) the Company’s risk management structures and practices. 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”). John R. Roberts served as chair of the Audit Committee, and our Board determined that he is both independent and an audit committee financial expert, as defined by SEC guidelines. Having reached the Board retirement age, John R. Roberts will not stand for re-election at the 2017 Annual Meeting. Following Mr. Roberts’ retirement, the Board intends to appoint Patrick J. Moore as the chair of the Audit Committee. The Audit Committee’s charter can be viewed on the Company’s website,www.energizerholdings.com, click on “Investors,” then “Corporate Governance,” then “Audit Committee Charter.”
Nominating and Executive Compensation: Sets compensation of our executive officers, administers our Equity Incentive Plan and grants equity-based awards, including performance-based awards, under the plan. 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. James C. Johnson served as chair of the Nominating and Executive Company Committee. The Nominating and Executive Compensation Committee’s charter can be viewed on the Company’s website,www.energizerholdings.com, click on “Investors,” then “Corporate Governance, then “Nominating and Executive Compensation Committee Charter.”
10DIRECTOR ATTENDANCEEnergizer Holdings, Inc.2016 Proxy Statement
THE BOARD OF DIRECTORS AND ENERGIZER’S CORPORATE GOVERNANCE
Finance
Our Board holds regularly scheduled quarterly meetings. Additionally, there is generally an annual strategy retreat, which includes presentations 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 currencydiscussions with senior management and pension fund performance. W. Patrick McGinnis served as chair of the Finance and Oversight Committee. The Finance and Oversight Committee’s charter can be viewed onabout the Company’s website,www.energizerholdings.com, click on “Investors,” then “Corporate Governance, then “Finance and Oversight Committee Charter.”
long-term strategy. During fiscal 2016,2018, all directors attended 75% or more of the Board meetings and meetings of the committeesCommittees on which they served during their period of service. Under our Corporate Governance Principles, each director is encouraged to attend our annual meeting of shareholders each year.
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, the roles of chairman of the Board and chief executive officer are separate. The chief executive officer 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 sets the agenda for Board meetings, in consultation with the chief executive officer, and presides over meetings of the full Board. The Chairman of the Board also
presides over non-management executive sessions of the Board. The Board periodically evaluates the structure most appropriate for the environment in which we operate.
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 evaluation and 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 as well as compliance matters. Management of day-to-day operational, financial and legal risks and compliance issues is the responsibility of operational and executive leadership of the Company.
The primary management group responsible for the identification and management of risks within our Company is the Compliance and Risk Management Committee (the “CRMC”). Our CFO sponsors the CRMC and our General Counsel and VP, Internal Audit co-lead the group.
We believe that the active involvementAnnual Shareholders’ Meeting. All of our senior leaders indirectors attended the CRMC sets a tone at the top, demonstrating the commitment that our executives have to creating a culture of compliance and risk oversight.
2018 Annual Shareholders’ Meeting.
Energizer Holdings, Inc.2016 Proxy Statement11
THE BOARD OF DIRECTORS AND ENERGIZER’S CORPORATE GOVERNANCE
At the same time, we recognize the importance of how our compliance policies and risk identification and mitigation strategies are being implemented within our daily operations globally.
As a result, we have established two subcommittees of the CRMC:
Each Subcommittee is populated with emerging leaders one to three organizational levels below our senior executives, who can provide a perspective on the practical implementation of our compliance and risk management programs.
The purpose of the Risk Subcommittee is to:
The purpose of the Compliance Subcommittee is to:
The Risk Subcommittee and the Compliance Subcommittee provide monthly reports to the CRMC related to their separate scopes.
The CRMC then reports directly to the Audit Committee and advises the Audit Committee on a quarterly basis regarding the Company’s risk management structures and practices, as well as management’s programs to identify, assess, manage, and mitigate significant enterprise risks of the Company. The Audit Committee, in turn, reports to our Board of Directors. The CRMC also presents directly to the Board with regard to these matters on an annual basis.
Evaluation of Risks
Our Company manages risk in several key areas, each of which is described in more detail below:
Strategic Risk
Strategic Risk includes risks faced by our Company related to mergers, acquisition and divestures, strategic planning, major initiatives such as restructurings, economic and geopolitical risks, our internal and external communications strategies and our organizational structure and incentives. The Risk Subcommittee, with input from our executive leadership, evaluates strategic risks and reports to the Finance and Oversight Committee, the Audit Committee, or other 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
Our 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
12 — DIRECTOR COMPENSATIONEnergizer Holdings, Inc.2016 Proxy Statement
THE BOARD OF DIRECTORS AND ENERGIZER’S CORPORATE GOVERNANCE
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.
Commercial and Marketing Risk
The Risk Committee and our commercial organization monitor the Company’s exposure to commercial and marketing risks, including category and competitive pressures and events that could impact our brand reputation. The Board is kept informed of the status of major commercial developments.
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 compliance issues, including 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.
The Audit Committee performs a central oversight role with respect to financial and control 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 Finance and Oversight Committee also regularly reviews our policies and practices related to foreign currencies, capital markets, insurance, pension plans, and taxes.
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.
Information Technology Risk
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 information technology system changes.
Operations and Supply Chain Risk
The global operations team monitors the Company’s exposure to operational risks, including manufacturing and supply chain disruption. The global operations team, the information technology group and the Risk Subcommittee evaluate the Company’s exposure to certain event risks, such as natural disasters and political or economic instability. The Board is kept informed of the status of major manufacturing and supply chain changes as well as event risk.
Employment 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
Energizer Holdings, Inc.2016 Proxy Statement13
THE BOARD OF DIRECTORS AND ENERGIZER’S CORPORATE GOVERNANCE
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.
Risk Management
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. For a more detailed description of material risks to our results of operations or financial position, you should review the sections entitled “Risk Factors” in our Annual Report on Form 10-K for fiscal 2016, as updated from time to time in the Company’s public filings.
Codes of Conduct
Our Code of Conduct is 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 the legal and ethical facets of integrity in business dealings with suppliers, customers, investors and governments. 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
The Nominating and Executive Compensation Committee reviews and approves compensation for our executive officers at the beginning of each fiscal year, including any merit increases to base salary, our annual cash bonus program,
14Energizer Holdings, Inc.2016 Proxy Statement
THE BOARD OF DIRECTORS AND ENERGIZER’S CORPORATE GOVERNANCE
long-term equity incentive awards, and performance targets under those programs and awards. The committee members expect to 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. Mercer, 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. Mercer 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 Mercer’s assistance to the committee, as well as on compensation consultants retained by the Company, see “Executive Compensation—Compensation Discussion and Analysis” below.
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.com, under “Investors” then “Corporate Governance.” Information on our website does not constitute part of this document. Our code of conduct and ethics applicable to the members of the Board of Directors, officers and employees has been posted on our website as well. You can view our Code of Conduct on the Company’s website,www.energizerholdings.com, under “Investors” then “Corporate Governance” and click on “Energizer Code of Conduct Manual”.
Copies of the committee charters, the Corporate Governance Principles, the codes of conduct, and the Annual Report on Form 10-K will be provided, without charge, to any shareholder upon request directed in writing to the Corporate Secretary, Energizer Holdings, Inc., 533 Maryville University Drive, St. Louis, Missouri 63141.
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, will 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:
Energizer Holdings, Inc.2016 Proxy Statement15
THE BOARD OF DIRECTORS AND ENERGIZER’S CORPORATE GOVERNANCE
The following relationships will be considered material:
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.
Accordingly, based on the responses to the 2016 questionnaire and the results of its review, the Board has affirmatively determined that all directors, other than Mr. Hoskins, are independent from management. The following are the non-employee directors deemed to be independent: Bill G. Armstrong, Cynthia J. Brinkley, Kevin J. Hunt, James C. Johnson, John E. Klein, W. Patrick McGinnis, Patrick J. Moore, J. Patrick Mulcahy, and John R. Roberts.
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
16Energizer Holdings, Inc.2016 Proxy Statement
THE BOARD OF DIRECTORS AND ENERGIZER’S CORPORATE GOVERNANCE
operational and financial objectives, 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.
We expect that, when vacancies occur, or when our Board determines that increasing its size is appropriate, candidates will be 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, Missouri 63141, 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. See “Shareholder Proposals for 2018 Annual Meeting” below 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
Energizer Holdings, Inc.2016 Proxy Statement17
THE BOARD OF DIRECTORS AND ENERGIZER’S 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 deferred compensation plan. As of December 13, 2016, 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 the chairperson 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 the chairperson of our Nominating and Executive Compensation Committee, or to the chairperson of our 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 any one of the independent directors in care of the Company’s Corporate Secretary at our headquarters address. The Corporate Secretary will review all communications so addressed and will forward to the addressee(s) all communications determined to bear substantively on the business, management, or governance of the Company.
Our non-retaliation policy prohibits the Company, or any of its employees, from retaliating or taking any adverse action against anyone for raising a good faith concern. If a shareholder or employee prefers to raise his or her concern in a confidential or anonymous manner, he or she may call the Energizer Hotline provided by the EthicsPoint System and operated by a third-party provider, NAVEX Global, in North America at toll-free 877-521-5625, or leave a confidential message at our web addresswww.energizer.ethicspoint.com. Additional international phone numbers, contact details, and languages are available atwww.energizer.ethicspoint.com.
We provided several elements of compensation to ournon-employee directors for service on our Board during fiscal 2016.2018. The Nominating and Executive CompensationHuman Capital 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—Executive Compensation Discussion and Analysis—Implementation of the Compensation ProgramPeer Group,” has been selected for purposes of evaluating our executive compensation based on market data provided by the committee’sHuman Capital Committee’s independent consultant, Mercer.
Retainers and Meeting Fees
During fiscal year 2016,2018, all the directors, other than Mr. Alan R. Hoskins and Ms. Rimmer, received the following compensation package for serving on the Board orand its committees.Committees. Mr. Hoskins, our President and Chief Executive Officer, receives no additional compensation for his service on the Board and its committees.Committees. During fiscal 2018, Ms. Rimmer received a pro rata portion of the below compensation package, as Ms. Rimmer joined our Board and our Audit Committee, effective July 27, 2018.
| ||||||
| ||||||
|
18Energizer Holdings, Inc.2016 Proxy Statement
THE BOARD OF DIRECTORS AND ENERGIZER’S CORPORATE GOVERNANCE
Non-Employee Director Compensation | ||||
Annual retainer | $ | 100,000 | ||
Fee for each Board meeting in excess of six (6) meetings | $ | 1,500 | ||
Fee for each Committee meeting in excess of six (6) meetings | $ | 1,500 |
The chairpersonsChairs of the committeesCommittees also received an additional annual retainer of $20,000 for each committee that they chaired,their service, and the chairmanIndependent Chairman of the Board received an additional annual retainer of $100,000 for his servicesservice as chairman.Chairman.
Deferred Compensation Plan
Non-employeeNon-management 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; or (b) 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 currently paid out in a lump sum in cash or Energizer stock within 60 days following the director’s termination of service on the Board.
Restricted Stock Equivalents
Initial Grant. New,non-management directors that may be appointed or elected to the Board receive a grant of restricted stock equivalents with a grant-date value of $200,000, which vest three years from the date of grant or upon certain other vesting events. Directors have the option to defer delivery of shares upon vesting of this award until retirement from the Board.
Energizer Holdings, Inc. 2018 Proxy Statement 17 |
Board of Directors
THE BOARD OF DIRECTORS AND ENERGIZER’S CORPORATE GOVERNANCE—DIRECTOR COMPENSATION
Annual Grant. On the first business day of January of each year, eachnon-employee director is credited with a restricted stock equivalent award with a grant-date value of $110,000 under our Equity Incentive Plan. This award vests one year from the date of grant or upon certain other vesting events. Directors have the option to defer the delivery of shares upon vesting of this award until retirement from the Board.
Energizer Holdings, Inc.2016 Proxy Statement19
THE BOARD OF DIRECTORS AND ENERGIZER’S CORPORATE GOVERNANCE
DIRECTOR COMPENSATION TABLE
DIRECTOR COMPENSATION TABLE | |||||||||||||||||||||||||||||||||||
Name | Fees Earned or Paid in Cash (1) | Stock Awards (2)(6) | Option Awards (3) | Non-Equity Incentive Plan Compensation | Change in Pension Value and Non- Qualified Deferred Compensation Earnings | All Other Compensation (4)(5) | Total | ||||||||||||||||||||||||||||
J.P. Mulcahy
|
$
|
204,500
|
|
$
|
110,028
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
$
|
314,528
|
| ||||||||||||||
B.G. Armstrong
|
$
|
103,000
|
|
$
|
110,028
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
$
|
213,028
|
| ||||||||||||||
C.J. Brinkley
|
$
|
103,000
|
|
$
|
110,028
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
$
|
213,028
|
| ||||||||||||||
K.J. Hunt
|
$
|
104,500
|
|
$
|
110,028
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
$
|
214,528
|
| ||||||||||||||
J.C. Johnson
|
$
|
123,000
|
|
$
|
110,028
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
$
|
233,028
|
| ||||||||||||||
J.E. Klein
|
$
|
103,000
|
|
$
|
110,028
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
$
|
213,028
|
| ||||||||||||||
W.P. McGinnis
|
$
|
123,000
|
|
$
|
110,028
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
$
|
233,028
|
| ||||||||||||||
P.J. Moore
|
$
|
123,000
|
|
$
|
110,028
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
$
|
233,028
|
| ||||||||||||||
N.L. Rimmer (6)
|
$
|
18,037
|
|
$
|
247,702
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
$
|
265,739
|
| ||||||||||||||
R.V. Vitale
|
$
|
104,500
|
|
$
|
110,028
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
$
|
214,528
|
|
Name | Fees Earned or Paid in Cash (1) | Stock Awards (2) | Option Awards (3) | Non-Equity Incentive Plan Compensation |
Change in Pension Value and Non- Qualified Deferred Compensation Earnings | All Other Compensation | Total | |||||||||||||||||||||
J.P. Mulcahy | $201,500 | $110,034 | $0 | $0 | $0 | $0 | $311,534 | |||||||||||||||||||||
B.G. Armstrong | $103,000 | $110,034 | $0 | $0 | $0 | $0 | $213,034 | |||||||||||||||||||||
C.J. Brinkley | $103,000 | $110,034 | $0 | $0 | $0 | $0 | $213,034 | |||||||||||||||||||||
K.J. Hunt | $103,000 | $110,034 | $0 | $0 | $0 | $0 | $213,034 | |||||||||||||||||||||
J.C. Johnson | $123,000 | $110,034 | $0 | $0 | $0 | $0 | $233,034 | |||||||||||||||||||||
J.E. Klein | $101,500 | $110,034 | $0 | $0 | $0 | $0 | $211,534 | |||||||||||||||||||||
W.P. McGinnis | $121,500 | $110,034 | $0 | $0 | $0 | $0 | $231,534 | |||||||||||||||||||||
P.J. Moore | $101,500 | $110,034 | $0 | $0 | $0 | $0 | $211,534 | |||||||||||||||||||||
J.R. Roberts | $121,500 | $110,034 | $0 | $0 | $0 | $0 | $231,534 |
(1) | This column reflects retainers and meeting fees earned during fiscal |
(2) | For all directors other than Ms. Rimmer, 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 award on January |
(3) | No options were granted to directors in fiscal year |
(4) | Directors may also, from time to time during the fiscal year, be provided with samples of our products, with an incremental cost of less than $50. |
(5) | The following items are not considered perquisites and are not included within the above disclosure of director compensation: |
(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 Company—we do not obtain a specific policy for each director, or for the directors as a group. |
(ii) | We provide transportation and lodging forout-of-town directors attending Board and |
(iii) | The directors may make requests for matching contributions to charitable organizations from the Energizer charitable foundation, which we have funded from time to time, and the directors of that foundation, all of whom are employees of the Company, have determined to honor such requests which are in accordance with the charitable purpose of the foundation, and which do not exceed $5,000 in any year. All contributions are made out of the funds of the foundation, and are not made in the name of the requesting director. |
(6) | Ms. Rimmer was appointed to the Board effective July 27, 2018. Upon her appointment, Ms. Rimmer was granted an award of 3,131 restricted stock equivalents, representing theone-time grant of restricted stock equivalents with a value of approximately $200,000 made to all newnon-management directors, which vests three years from the date of grant. Ms. Rimmer was also granted 746 restricted stock equivalents representing a pro rata share of the annual grant for 2018 with a value of approximately $47,700 detailed in footnote (2) above. Both awards had a grant date fair value of $63.89. |
18 Energizer Holdings, Inc. 2018 Proxy Statement |
ExecutiveCompensation | 20 | |||
Pay for Performance and Compensation Philosophy —How our pay for performance, relative to our peers, provide value to shareholders | 22 | |||
How we Determine Compensation —How the Human Capital Committee governs our executive compensation program, the process for determining executive compensation and the independent compensation consultant’s role | 25 | |||
Elements of Compensation —Describes each form of compensation and how our compensation program is tied strongly to performance | 28 | |||
Other Pay Practices —Information on other aspects of our compensation program | 32 | |||
Executive Compensation Tables | 36 | |||
Human Capital Committee Report | 47 |
The following Compensation Discussion & Analysis describes the fiscal 2018 compensation program for our named executive officers (“NEOs”). For fiscal 2018, our named executive officers were:
Alan R. Hoskins President and Chief Executive | ||
Mark S. LaVigne Executive Vice President and Chief Operating Officer | ||
Timothy W. Gorman Executive Vice President and Chief Financial Officer | ||
Gregory T. Kinder Executive Vice President and Chief Supply Chain Officer | ||
Emily K. Boss Vice President and General Counsel |
20Energizer Holdings, Inc.2016 Proxy Statement
Energizer Holdings, Inc. 2018 Proxy Statement 19 |
Executive Compensation
ITEM 2. RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITOREXECUTIVE COMPENSATION
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 since our Spin-Off from our former parent company, and served as our former parent company’s independent auditor for every fiscal year since 2000. PwC has begun certain work related to the 2017 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:
A representative of PwC will be present at the 2017 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.Fiscal 2018 Financial Performance 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 recommend a vote FOR ratification of the appointment of PwC as the Company’s independent auditor for fiscal year 2017.
Fees Paid to PricewaterhouseCoopers LLP(1)
(in thousands)
FY 15 | FY 16 | |||||||
Audit Fees | $ | 1,373 | $ | 3,964 | ||||
Audit-Related Fees | 14 | 18 | ||||||
Tax Fees: | ||||||||
Tax Compliance/preparation | 76 | 21 | ||||||
Other Tax Services | 195 | 276 | ||||||
|
|
|
| |||||
Total Tax Fees | 271 | 297 | ||||||
All Other Fees | 0 | 0 | ||||||
|
|
|
| |||||
Total Fees | $ | 1,658 | $ | 4,279 | ||||
|
|
|
|
In fiscal 2018, we continued to execute against our strategic priorities with strong organic revenue growth
3 | $432M | 76% | ||
YEARS OF CONTINUED ORGANIC REVENUE GROWTH | RETURNED TO SHAREHOLDERS THROUGH SHARE REPURCHASES AND DIVIDEND PAYMENTS SINCE SPIN-OFF(1) | INCREASE IN ADJUSTED FREE CASH FLOW SINCE THE YEAR OF THE SPIN-OFF(1) |
Energizer Holdings, Inc.2016 Proxy Statement21continued to deliver solid financial and operational results in fiscal 2018. Our results were achieved by continuing to focus on executing against our three strategic priorities – lead with innovation, operate with excellence and drive productivity gains.
Innovation is a key component of our strategy. Our innovation pipeline also remains strong across our businesses as we continue to invest behind both product performance and improved shopper experiences |
We are focused on operating with excellence with continued distribution gains, portfolio optimization and pricing |
We are driving productivity gains by investing in continuous improvement initiatives to drive further efficiencies in our business |
Non-GAAP reconciliation can be found in Appendix A
(1) | Separation from our former parent |
20 Energizer Holdings, Inc. 2018 Proxy Statement |
Services Provided by PricewaterhouseCoopers LLPExecutive Compensation
2018 Executive Compensation Highlights
Our compensation philosophy is to pay for performance over the long-term, as well as on an annual basis. Our executive compensation program provides a mix of salary, incentives, and benefits paid over time to align executive officer and shareholder interests. We consider our executive pay program to be instrumental in helping us achieve our business objectives and effective in rewarding our executive officers for their role in achieving strong financial and operational performance. The table above discloses fees paidHuman Capital Committee has primary responsibility for approving our compensation strategy and philosophy and the compensation programs applicable to PwC during the last fiscal year for the following professional services:our executive officers.
Our compensation program design has been consistent for more than three years and has received positive support each year from our shareholders since 2016
Pay decisions are feesconsistent with our pay for professional services performed by PwCperformance philosophy and fiscal 2018 Company performance
Over 66% of Mr. Hoskins’ fiscal 2018 compensation was performance-based
Say on Pay Results
We conduct shareholder engagement throughout the year and provide shareholders with an opportunity to cast an annual, advisory Say on Pay vote. Our historical Say on Pay results influenced our decision to maintain a consistent approach to our executive compensation program for fiscal 2018. Last year, our shareholders overwhelmingly approved our executive compensation. The Human Capital Committee will continue to consider shareholder feedback and the auditoutcome of Say on Pay vote results for future compensation decisions.
WHAT WE DO | WHAT WE DON’T DO | |
✓ Pay for performance ✓ Establish threshold, target and maximum awards under our annual and long-term incentive programs ✓ Use balanced performance metrics for annual incentive and long-term incentive programs ✓ Use rigorous goal setting aligned to our externally disclosed annual and multi-year targets ✓ Approximately 60% of our executive officers’ total compensation is performance based ✓ Have stock ownership requirementsfor our executive officers ✓ Limit perquisitesto items that serve a reasonable business purpose ✓ Closely monitor risksassociated with our compensation program and individual compensation decisions ✓ Have a clawback policy for all incentive compensation earned by our executive officers | × Stock options ×Pay taxgross-ups on any compensation ×Speculative trading, hedging or pledging transactions by our colleagues ×Employment agreements with our executive officers ×Executive officer severance payments and benefits exceeding 2x salary and annual incentive award ×Guarantees for salary increases |
Energizer Holdings, Inc. 2018 Proxy Statement 21 |
Executive Compensation
PAY FOR PERFORMANCE
The Human Capital Committee allocates pay in a manner designed to place performance at the forefront 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.
Further, consistent with our pay for professional services performed by PwCperformance philosophy, as illustrated in the graph below, the Company’s performance, with respect to tax compliance, tax advice and tax planning. This includes preparation of original and amended tax returns fortotal shareholder return over a three-year period was in the Company andtop third among the companies in our consolidated subsidiaries; refund claims; payment planning; and tax audit assistance.
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. The chairman of the 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 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. As applicable, the committee pre-approved all fees and services paid by Energizer for fiscal 2016.
The Audit Committee of the Company’s Board of Directors consists entirely of non-employee directors that are independent, as defined in Section 303A.02 of the New York Stock Exchange Listed Company Manual.
The Audit Committee is responsible for the duties set forth in its charter, but is not responsible for preparing the financial statements, implementing or assessing internal controls or auditing the financial statements. Management is responsible for the Company’s internal controls and the financial reporting process. The independent accountants are responsible for performing an independent audit of the Company’s consolidated financial statements in accordance with the standards of 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.
As part of its oversight of the Company’s financial statements, the Committee reviews and discusses with both management and the Company’s independent registered public accountants, PricewaterhouseCoopers LLP (“PwC”), all annual and quarterly financial statements prior to their issuance. With respect to the Company’s audited financial statements for the Company’s fiscal year
22Energizer Holdings, Inc.2016 Proxy Statement
22 Energizer Holdings, Inc. 2018 Proxy Statement |
ended September 30, 2016, managementExecutive Compensation
PAY FOR PERFORMANCE
Compensation Philosophy
The philosophy underlying our executive compensation program is simple, aligned and balanced. Equally important, we view compensation practices as a means for communicating our goals and standards of conduct and performance, and for motivating and rewarding colleagues in relation to their achievements. Overall, the Company has representedsame principles that govern the compensation of all our salaried colleagues apply to the Committee thatcompensation of our executive officers. Within this framework, we observe the financial statements were prepared in accordance with generally accepted accounting principles. The Committee has reviewed and discussed those financial statements with management and PwC, including a discussion of critical accounting policies, the quality, not just the acceptability, of the accounting principles followed, the reasonableness of significant judgments reflected in such financial statements and clarity of disclosures in the financial statements. The Audit Committee has also discussed with PwC 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. Annually the Audit Committee oversees a process to assess the performance of the auditor and utilizes the results of that assessment when considering their reappointment. The Committee also annually discusses PwC’s internal quality review process and the PCAOB’s inspection report on PwC, as well as the results of any internal quality reviews or PCAOB inspections of key engagement team members. In accordance with SEC rules, lead audit partners are subject to rotation requirements to limit the number of consecutive years an individual partner may provide service to the Company. For lead and concurring partners, the maximum number of consecutive years of service is five years. The process for selection of the Company’s lead audit partner pursuant to this rotation policy involves a meeting between the Chair of the Audit Committee and the candidate for the role, as well as discussion by the full Committee and with management.
The Audit Committee has received the written disclosures from PwC required by PCAOB Rule 3526 (Communication with Audit Committees Concerning Independence), as modified or supplemented, 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. In fiscal 2016, the Audit Committee met five times with the internal auditors and 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.
In addition, the Audit Committee reviewed key initiatives and programs aimed at maintaining the effectiveness of the Company’s internal and disclosure control structure. As part of this process, the Committee continued to monitor the scope and adequacy of the Company’s internal auditing program, reviewing internal audit department staffing levels and steps taken to maintain the effectiveness of internal procedures and controls.
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, 2016 be included in the Company’s Annual Report on Form 10-K for that year and has selected PwC as the Company’s independent registered public accountants for fiscal year 2017, subject to shareholder ratification.following, guiding principles:
What We’ve Done | ||||||||
Simple | ||||||||
• Compensation methods should be transparent, link between performance metrics and Company strategy should be clear and perquisites should be minimized | • Used straightforward annual and long-term incentive plan metrics that are directly tied to business performance • Froze pension accruals • Limited the use of all perquisites (<.001% of total compensation for executive officers in fiscal 2018) | |||||||
Aligned | • The interests of our executive officers should be linked with those of our shareholders | • Approximately 60% of our executive officers’ total compensation is performance-based • Adopted a clawback policy and stock ownership requirements | ||||||
Balanced | • Components of compensation should complement each other and offset risk of overemphasis on any one metric or time period | • Used a combination of pay elements that reward achievement of objectives across annual and long-term time periods • Balanced annual and long-term incentive plans to drive results in the short-term without sacrificing long-term value creation |
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 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.
Energizer Holdings, Inc.2016 Proxy Statement23
The following narratives and tables discuss the compensation paid in fiscal 2016 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” or “NEOs”. Our named executive officers for fiscal 2016 were:
Our named executive officers were determined based on the compensation earned during the 2016 fiscal year, as shown in the 2016“Summary Compensation Table” below.
COMPENSATION DISCUSSION AND ANALYSIS
Overview
Energizer Holdings, Inc. (“Energizer”), through its operating subsidiaries, is one of the world’s largest manufacturers, marketers and distributors of household batteries, specialty batteries and lighting products, and a leading designer and marketer of automotive fragrance and appearance products.
On July 1, 2015, Energizer completed the legal separation from our former parent company, Edgewell Personal Care Company (“Edgewell” or “former parent company”), via a tax free spin-off (the “Spin-Off”). Under the terms of the Spin-Off, Edgewell common shareholders of record as of the close of business on June 16, 2015, the record date for the distribution, received one share in Energizer for each share of Edgewell common stock they held. Edgewell completed the distribution of Energizer common stock to its shareholders on July 1, 2015, the distribution date.
Energizer now operates as an independent, publicly traded company on the New York Stock Exchange, trading under the symbol “ENR.”
In fiscal 2016, our Nominating and Executive Compensation Committee (the “NECC” or the “committee”) took into consideration the unique circumstances arising from the Company’s emergence as a stand-alone operating company in structuring appropriate compensation that would best balance the goals of incenting, retaining and attracting highly talented executives while maintaining a “pay for performance” culture.
Energizer is committed to building compensation programs that align our business strategy with our shareholders’ interests. Our compensation guiding principles are to structure executive compensation that is:
Our primary compensation strategy is “Pay for Performance,” which drives a culture of accountability and productivity. Underlying all of our decisions regarding compensation is our commitment to delivering consistent and sustainable operating results and earnings to our shareholders. We strongly
24Energizer Holdings, Inc.2016 Proxy Statement
EXECUTIVE COMPENSATION
believe that our performance-based compensation programs which incentivize the attainment of Energizer’s short- and long-term financial objectives are the most effective approach to delivering on that commitment.
This“Compensation Discussion and Analysis” explains and analyzes compensation awarded to or earned by our named executive officers during fiscal 2016. This“Compensation Discussion and Analysis” should be read in conjunction with the tabular disclosures below.
Energizer Holdings, Inc.2016 Proxy Statement25
EXECUTIVE COMPENSATION
Key Elements of Executive Compensation in Fiscal 2016
The elements of our executive compensation program in 2016 as well as the purpose of each item are shown in the following table:
Executive Compensation Elements
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26Energizer Holdings, Inc.2016 Proxy Statement
EXECUTIVE COMPENSATION
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Key Changes to
Executive Compensation
In fiscal 2016, the NECC took several important actions regarding executive compensation, described below.
Adoption of annual bonus program and long-term equity incentive award metrics
The annual bonus program adopted by the NECC for fiscal 2016 included four performance metrics:
Energizer Holdings, Inc.2016 Proxy Statement27
EXECUTIVE COMPENSATION
The long-term equity incentive awards granted in November 2015 by the NECC included two performance metrics:
The NECC develops targets for the annual bonus program and the long-term equity incentive awards to align executive compensation with the achievement of Energizer’s strategic goals as well as the short- and long-term financial objectives that we have communicated to our shareholders.
Spotlight—Why is a Free Cash Flow metric used in both our short-term and our long-term incentive plans?
As our investors know, maximizing cash flow is our #1 priority as a business. We believe that free cash flow is important for a number of reasons:
We use free cash flow in our annual bonus plan to reward delivery of the cash flow amounts called for by our annual plans, and free cash flow as a percentage of sales in our long-term incentive plan to incentivize management to create a business culture that generates strong cash flow year after year.
Changes to executive benefits and corporate policies in fiscal 2016
Objectives of Energizer’s Compensation Philosophy
The key objective of our compensation philosophy is to reward management based on their success in increasing our shareholder value. With a focus on achieving this overarching goal, our overall executive compensation program is designed to provide a compensation package that enables us to attract and retain highly talented executives and maintain a performance-oriented culture.
28Energizer Holdings, Inc.2016 Proxy Statement
EXECUTIVE COMPENSATION
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. However, because a majority of our compensation is performance-based, actual cash compensation paid to our named executive officers could vary from that paid to executive officers in our peer group, based on achievement of performance targets.
In fiscal 2016, a significant portion of targeted compensation for our named executive officers was variable—not fixed—compensation, rewarding the named executive officers for the achievement of outstanding and sustained performance, which builds shareholder value. Target compensation consisted of the annual cash bonus and equity awards granted by the NECC. We believe this compensation structure offers high potential rewards for superior performance, and significantly lower compensation for results below target.
In November 2015, our NECC approved the mix of total fiscal year 2016 target compensation (comprised of base salary, annual cash bonus and equity-based incentive compensation) for our NEOs as shown below:
Competitive Total Compensation Package
Our executive officers are highly experienced, with average industry experience of over 20 years. Because of management’s level of experience and successful track record, as well as the value of maintaining continuity in senior executive positions, we view retention of key executives as important to the ongoing success of our operations. Consequently, we:
Alignment with Shareholder Interests
In order to align the interests of our executive officers with those of our shareholders, we use a combination of equity-based incentives, stock ownership guidelines, and “pay for performance” compensation models. A significant portion of our executive officers’ compensation package consists of equity grants. By tying a significant portion of the officers’ personal wealth to the performance of our common stock, it aligns our officers’ interests with those of our shareholders. In addition, our compensation programs use short- and long-term performance metrics that incentivize thePAY FOR PERFORMANCE
Energizer Holdings, Inc.Fiscal 2018 Pay Components2016 Proxy Statement29
EXECUTIVE COMPENSATION
achievement of critical operational, financial and strategic goals for the Company. We strongly believe that such performance-based compensation drives the attainment of our corporate financial goals and aligns our executive officer compensation with the interests of our shareholders.
Compensation Benchmarking
At the Spin-Off on July 1, 2015, Mercer, the compensation consultant for the NECC, with input from the committee, developed a customized peer group of 16 companies 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, employees, geographic scale and breadth of distribution channels.
Mercer used that peer group data to provide a market comparison for our executive compensation program as an input to the determination of compensation of our named executive officers for fiscal 2016. Total compensation opportunities were targeted at the 50th percentile of our peer group for comparable positions. The market comparison was made for each key component of compensation, including base pay, target annual bonus, target total cash compensation and grant-date value of long-term incentives. Mercer also analyzed the aggregate equity utilization as compared to the peer group. In addition, Mercer reviewed the terms of our change-in-control program for our executives for consistency with market practices.
The peer group used by Mercer, and approved by the NECC, for its review of fiscal 2016 compensation consisted of the following companies. The industries in which the companies are engaged are noted: (1) household products; (2) personal care; (3) food and beverage; and (4) apparel.
Our fiscal 2018 pay components remained the same as fiscal 2017. | ||||
Description | Driving Shareholder Value | How it Pays | ||
Base Salary | ||||
Determined based on job scope,
positions | Provides fixed income to attract and retain top talent | Semi-monthly cash payment through fiscal 2018 | ||
Annual Incentive Program | ||||
Provides short-term variable pay for performance | Motivates executives to achieve the Company’s annual strategic and financial goals | Single cash payment in November 2018 | ||
Long-Term Incentive Program | ||||
To ensure a strong link between our incentive compensation opportunities and our longer-term objectives, we use two specific programs | ||||
Restricted stock awards that vest only on achievement of pre-determined performance targets with a three-year vesting period Represents 70% of equity award | Rewards achievement of long-term growth goals and creation of shareholder value | Vests upon the achievement of specific metrics over three-year performance period | ||
Time-based stock awards that track stock price performance over a three-year vesting period Represents 30% of equity award | Promotes long-term retention and supports stock ownership and alignment with shareholders | Vests upon the three-year anniversary of grant date | ||
Retirement and Other Benefit Plans | ||||
Retirement plans sponsored by the Company on the same terms and conditions applicable to all eligible colleagues | Provide welfare and retirement benefits to attract and retain top talent | In accordance with the terms of the plans |
Share Ownership Requirements
Our stock ownership and retention requirements align executive officer and shareholder interests by linking the value realized from equity-based awards to sustainable Company performance. Beginning with awards granted in fiscal 2015, our Corporate Governance Principles require:
Stock Ownership Requirements | ||
Chief Executive Officer | 5x base salary | |
All Other Executive Officers | 3x base salary |
Newly appointed executive officers are required to retain at least fifty percent (50%) of vesting restricted stock until they become compliant and are given a period of five years to attain full compliance with the requirements. 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 officer or by family trusts, as well as vested options, vested and deferred restricted stock equivalents and unvested restricted stock equivalents (other than stock equivalents subject to achievement of performance targets). As of September 30, 2018, each of our executive officers was in compliance with the requirements.
24 Energizer Holdings, Inc. 2018 Proxy Statement
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Executive Compensation
HOW WE DETERMINE COMPENSATION
Pay Evaluation and Decision Process
Each year, the Human Capital Committee, comprised entirely of independent directors, reviews our executive officers’ performance using a balanced and disciplined approach to determine their base salaries and variable compensation awards. The approach for fiscal 2018 included a full-year assessment of financial results and progress delivering on our three strategic priorities.
The Human Capital Committee considers various factors that collectively indicate successful management of our business, including:
Company performance, including financial andnon-financial measures
The manner in which results are achieved, adherence to risk policies, and the quality of earnings
Year-over-year performance
Company performance relative to our executive compensation peer group
Annual Compensation-Related Risk Evaluation
We monitor the risks associated with our compensation program on an ongoing basis. Our compensation risk assessment occurs in two parts: a review of the Company’s compensation programs and a review of compensation decisions and payments, with a focus on our executive officers. In October 2018, with input from the Human Capital Committee’s independent compensation consultant, the Human Capital Committee conducted a review of our compensation programs, including the executive compensation program, to assess the risks arising from our compensation policies and practices. The Human Capital Committee agreed with the review’s findings that these risks were within our ability to effectively monitor and manage and that these compensation programs do not encourage unnecessary or excessive risk-taking and do not create risks that are reasonably likely to have a material adverse effect on the Company. In particular, the Human Capital Committee determined that the following design features reduce the risk within our compensation policies and practices:
Compensation program design provides a balanced mix of cash and equity, annual and longer-term incentives
Maximum payout levels for bonuses and performance awards are capped
Multiple performance metrics are utilized to determine payouts under the annual and long-term incentive programs
The Company does not grant stock options
Executive officers are subject to stock ownership and retention guidelines
The Company has adopted anti-hedging and anti-pledging policies
The Company has adopted a clawback policy related to incentive compensation earned by our executive officers
Performance Highlights
The Human Capital Committee considered the following progress on our three strategic priorities when evaluating performance in fiscal 2018:
Lead with Innovation
Operate with Excellence
Drive Productivity Gains
Role of Independent Compensation Consultant
To help determine executive pay, the Human Capital Committee retains an independent compensation consultant, Mercer, for advice regarding the general competitive landscape and trends in executive compensation. While the Human Capital Committee meets with the consultant from time to time, the Chair of the Human Capital Committee also communicates directly with the
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Executive Compensation
HOW WE DETERMINE COMPENSATION
consultant between Human Capital Committee meetings. The independent compensation consultant advises the Human Capital Committee on several matters, including (1) competitive analysis (including in relation to our peer group), (2) incentive plan design, (3) updates on trends in executive and director compensation, (4) peer group composition, and (5) other compensation-related matters as requested by the Human Capital Committee.
Executive Compensation Peer Groups
The Human Capital Committee selects the members of our peer group and periodically examines whether peers continue to meet the criteria for inclusion described below. As part of this process, the Human Capital Committee receives advice from its independent compensation consultant and selects a peer group that includes companies that have the following characteristics:
US-based, publicly traded consumer packaged goods company with “brand identity”
Similar revenue
Market capitalization
Number of employees
Global
For fiscal 2018, based on these criteria and the advice of its independent compensation consultant, the Human Capital Committee removed Snyders-Lance Inc. from its peer group as a result of the acquisition by Campbell Soup.
Household Products |
| Food and Beverage | ||
The Clorox Company Spectrum Brands Holdings, Inc. Hasbro Inc. Central Garden & Pet Co. | ||||
The Tupperware Brands Corporation | Church & Dwight Inc.
Helen of Troy Ltd. |
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| Hain Celestial Group, Inc. Monster Beverage Corporation | Post Holdings, Inc. |
Total Compensation
The Human Capital Committee targets total compensation to near the 50th percentile of our peer group’s total compensation. The following table provides an overview ofshows how we compared to our peer group companies based on revenue for the most recentrecently reported fiscal year and number of employees as of September 2016.2018.
(dollars in millions) | Revenue | Employees | ||||||||||||||||
Company Revenue (in millions) | Employees | |||||||||||||||||
75th Percentile | $ | 4,951 | 13,625 | 5,109 | 10,055 | |||||||||||||
50thPercentile | $ | 3,210 | 7,104 | 2,694 | 5,400 | |||||||||||||
25th Percentile | $ | 2,191 | 4,850 | 2,155 | 3,450 | |||||||||||||
Energizer | $ | 1,634 | 4,800 | 1,798 | 4,000 |
Elements of Compensation
26 Energizer Holdings, Inc. 2018 Proxy Statement |
Base Pay
In November 2015, we benchmarked our executives’ base pay against our peer group. We benchmark salaries, as well as other components of our executive compensation, 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 NECC believe that an important benchmark 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 benchmarked components of total compensation as well as the individual’s performance.Executive Compensation
30Energizer Holdings, Inc.2016 Proxy Statement
EXECUTIVEHOW WE DETERMINE COMPENSATION
AtChief Executive Officer Assessment, Compensation Process for Executive Officers and Annual Timeline
Chief Executive Officer Assessment
With respect to our Chief Executive Officer’s pay, the beginning of each fiscal year, the NECC establishes the salariesHuman Capital Committee conducts an annual performance assessment of the Chief Executive Officer and determines appropriate adjustments to all elements of his pay based on the following factors:
Individual Performance | Company Performance | Market Practices | ||||||||||||||
including analysis of his performance against his performance goals approved by the Human Capital Committee; effectiveness of the Chief Executive Officer’s leadership; and the Chief Executive Officer’s experience | including returns to shareholders | as provided by the independent compensation consultant |
Compensation Process for Executive Officers
For the other executive officers, (other than the chief executive officer) withChief Executive Officer makes recommendations fromto the chief executive officer.Human Capital Committee for all elements of pay. These recommendations are based on an assessment of the individual’s roles, responsibilities, experience and individual performance. The salaryHuman Capital Committee also obtains market data from its independent compensation consultant and then reviews, discusses, modifies, and approves, as appropriate, these recommendations.
Annual Timeline
The diagram below summarizes the Human Capital Committee’s annual process for setting executive pay.
Fall • Annual CEO performance assessment • Annual update on Annual and Long-Term Incentive Program Metrics and Performance • Review of executive compensation and regulatory environment trends • Approve executive pay • Review compensation risk assessment • Approve compensation plan | Winter • Quarterly review of CEO performance assessment • Quarterly update on Annual and Long-Term Incentive Program Metrics and Performance • Planning for annual compensation risk assessment and approach • Review of compensation guidelines of institutional shareholders and proxy advisors • Annual review of Change of Control benefits | |||||||||
Summer • Quarterly review of CEO performance assessment • Quarterly update on Annual and Long-Term Incentive Program Metrics and Performance | Spring • Quarterly review of CEO performance assessment • Quarterly update on Annual and Long-Term Incentive Program Metrics and Performance • Executive Compensation Peer Group Analysis |
CEO Pay Ratio
We believe that compensation must be competitive in the marketplace for the role, internally consistent, and equitable in order to motivate our colleagues to deliver consistent and sustainable operating results for our shareholders. In fiscal 2018, the Human Capital Committee reviewed a comparison of our Chief Executive Officer pay to the median pay of all our colleagues other than the Chief Executive Officer. We estimate that the compensation for our Chief Executive Officer in fiscal 2018 was approximately 198 times the median of the chief executive officer is setannual total compensation of all of our other colleagues.
We identified our median colleague utilizing data as of July 1, 2018, by examining, for individuals employed by us as of that date, the NECC, with input(i) projected base or wage compensation, projected recurrent cash allowances, and actual cash bonus payments for
Energizer Holdings, Inc. 2018 Proxy Statement 27 |
Executive Compensation
HOW WE DETERMINE COMPENSATION
permanent colleagues, and (ii) actual base or wage compensation, actual recurrent cash allowances, and actual cash bonus payments for temporary colleagues. We included approximately 4,051 colleagues, whether employed on a full-time or part-time basis. Under the de minimis exception to the Dodd-Frank Act reporting rules, we excluded 118 colleagues based in Malaysia and 62 colleagues based in the Philippines, which represented approximately 4.4% of the Company’s total colleague population as of July 1, 2018.
The SEC’s rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. As a result, the pay ratio reported by other companies, including our compensation peer group, may not be comparable to the pay ratio reported above.
CEO to Median Colleague Pay Ratio | ||||||||
President and CEO | Median Employee | |||||||
Annualized Total Compensation | $6,735,235 | $33,962 |
Primary Elements of our Executive Compensation Program • Base Salary • Annual Incentive Program • Long-Term Incentive Program – Performance Share Awards – Time-Based Restricted Share Awards |
The Human Capital Committee believes these pay components align the interests of our executives and our shareholders by basing a significant portion of total pay on performance and achievement of our short- and long-term goals. The specific mix among the individual components reflects market comparisons (primarily with respect to prevailing market practices from the committee’smedian of our peer group) and individual position and performance.
Alan R. Hoskins Other Executive Officer Average Compensation
28 Energizer Holdings, Inc. 2018 Proxy Statement |
Executive Compensation
ELEMENTS OF COMPENSATION
Base Salary
The general guideline for determining salary levels for our executive officers, including the Chief Executive Officer, is to be around the 50th percentile of our executive compensation consultant. The NECC uses this information, along with its analysispeer group, adjusted for other factors such as individual performance and responsibilities. While we are cognizant of the performance and contributions ofcompetitive range, our primary goal is to compensate our executive officers at a level that best achieves our compensation philosophy, whether or not this results in actual pay for some positions that may be higher or lower than the chiefmarket median. The Human Capital Committee considers adjustments to base salaries for the executive officer against performance goals,officers on an annual basis. For fiscal 2018, the Human Capital Committee felt that an increase to determine an appropriate salary.
In November 2015, as part of its annual review, the NECC evaluated the base salaries of the namedour executive officers and setin line with the increases provided to our colleagues generally was reasonable in light of the Company’s operating results in fiscal 2018. To remain competitive with the market, the Human Capital Committee also considered the effect of such increased salaries for our executive officers in relation to the median of our peer group.
The table sets forth the base salaries of the named executive officers for fiscal 2016 as follows: Mr. Hoskins—$927,000; Mr. LaVigne—$540,750; Mr. Hamm—$540,750; Mr. Kinder—$418,000 and Ms. Boss—$412,000.
Incentive Programs
In November 2015, the NECC approved an incentive compensation structure for our key executives, consisting of an annual performance program, paid in cash, and a three-year performance program, through the grant of restricted stock equivalents. Consistent with the requirements for performance-based compensation under Section 162(m) of the Internal Revenue Code of 1986, as amended, awards to officers under our annual performance program are made under the terms of our shareholder-approved executive officer bonus plan, and the three-year performance awards are granted under the terms of our shareholder-approved 2015 Equity Incentive Plan.
Cash Bonus Program
The cash bonuses to Energizer’s key executives, including our named executive officers,officers. The base salary adjustments for fiscal 2018 were based on a percentageeffective December 1, 2017.
2017 | 2018 | Increase (%) | ||||||||
A.R. Hoskins | $ | 965,000 | $ | 1,000,000 | 3.6% | |||||
T.W. Gorman1 | $ | 520,000 | $ | 520,000 | — | |||||
M.S. LaVigne | $ | 556,973 | $ | 573,682 | 3% | |||||
G.T. Kinder | $ | 438,900 | $ | 452,067 | 3% | |||||
E.K. Boss | $ | 428,480 | $ | 443,477 | 3.5% |
1 | Mr. Gorman was appointed Chief Financial Officer in June 2017, and the Human Capital Committee re-evaluated his base salary in August 2017. |
Energizer Holdings, Inc. 2018 Proxy Statement 29 |
Executive Compensation
ELEMENTS OF COMPENSATION
Annual Incentive Program
The overall design of our fiscal 2018 annual incentive program was the executive’ssame as the fiscal 2017 program. The annual salary, and adjustedincentive program is based on performance against certain metrics determined by the NECC.Human Capital Committee. Our 2016fiscal 2018 annual bonus programincentive award was designed to measure performance against four metrics:
Driving Shareholder Value |
Weighting of |
Threshold (50% of
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Target (100% of |
Stretch (200% of |
Actual | ||||||||||||||||||||||
Adjusted Net Sales |
Net Sales measures revenue and encourages development of consumer-relevant innovation andin-store execution to drive product sales
| 25% | $1,706 | $1,796 | $1,886 | $1,811.0 | |||||||||||||||||||||
Adjusted Selling, General & Administrative (SG&A) Expense as a Percentage of Net Sales |
This metric measures the overhead costs that we incur as a percentage of sales and encourages expense management
| 25% | 21.2% | 20.2% | 19.2% | 19.9% | |||||||||||||||||||||
Adjusted Operating Profit |
Operating profit measures underlying business profit and encourages selling products, generating strong gross margins and maintaining tight cost controls
| 25% | $290 | $322 | $355 | $333.3 | |||||||||||||||||||||
Adjusted Free Cash Flow |
Free cash flow measures the cash generated by our Company; the metric encourages execution of sales goals and expense targets as well as prudent management of capital expenditures and working capital
| 25% | $196 | $218 | $240 | $230.9 |
Actual achievement metrics vary from reported figures to address the impacts of currency and the named executive officer’s bonus target);
Each metric for the named executive officer’s bonus target);
The performance goals for each metric were set at the beginning of the fiscal year. Each officerannual incentive plan was assigned individual bonus targets based upon individual performance and prevailing market practice information provided by the compensation consultant to the NECC. For fiscal 2016, the following bonus targets, defined as a percentage of the individual’s base pay, were assigned to our named executive officers:
The named executive officers received overall bonus payouts based 100% on the company performance metrics described below, and there was no individual performance component or non-performance-based component of the payout.
Energizer Holdings, Inc.2016 Proxy Statement31
EXECUTIVE COMPENSATION
The payouts under the Cash Bonus Program were made by us in November 2016 following certification of the results by the NECC.
These payouts were based on outcomes under the following performance metrics:
Adjusted Net Sales
Adjusted Net Sales means net sales as reported by Energizer, subject to adjustment for certain limited matters, including the effects of acquisitions, divestitures or recapitalizations, extraordinary transactions such as mergers or spin-offs, unusual ornon-recurringnon-cash accounting impacts, and variations in the exchange rate between foreign currencies and budget exchange rate.
The threshold, target and stretch achievement levels, and the percent payout at each level, were as follows:
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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 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.
Our Human Capital Committee recognized that the impact of the Tax Cuts and Jobs Act of 2017 was an unusual item and outside the influence of the officers. As a result, our Human Capital Committee exercised negative discretion to reduce our actual performance of our Adjusted Free Cash Flow and Adjusted Earnings per Share metrics to remove the positive effect of the Tax Cuts and Jobs Act of 2017.
30 Energizer Holdings, Inc. 2018 Proxy Statement |
Executive Compensation
ELEMENTS OF COMPENSATION
The NECC considered whether to exercise negative discretion when determiningperformance goals for each metric were set at the achievement of targets, and determined that no negative discretion should be exercised. The Adjusted Net Salesbeginning of the Company in fiscal 2016 were $1,610.4 million which madeyear, and each executive officer was assigned individual bonus targets based on individual performance and market practice information provided by the amount ofindependent compensation consultant. For fiscal 2018, the awards payable under the annualfollowing bonus plan 200% of target.
Adjusted SG&A as a Percentage of Net Sales
Adjusted SG&A as a Percentage of Net Sales (SG&A % Sales) means selling, general and administrative expensestargets, defined as a percentage of net sales, subject to adjustment for certain limited matters, including the effects of acquisitions, divestitures, extraordinary transactions such as mergers or spin-offs, and variations in the exchange rate between foreign currencies and budget exchange rate.
The threshold, target and stretch achievement levels, and the percent payout at each level,individual’s base pay, were as follows:
FY16 Cash Bonus Plan Metrics
(25% of Bonus Target) | Threshold
50% Payout | Target
100% Payout | Stretch
200% Payout | |||
Adjusted SG&A % Sales | 21.30% | 20.30% | 19.80% |
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 performance are paid for results below the Threshold goal.
The NECC considered whether to exercise negative discretion when determining the achievement of targets, and determined that no negative discretion should be exercised. The Adjusted SG&A % Sales of the Company in fiscal 2016 were 20.6% which made the amount of the awards payable under the annual bonus plan 84.6% of target.
Adjusted Operating Profit
Adjusted Operating Profit means gross profit less spend associated with A&P, R&D, SG&A, and amortization expense, subject to adjustment for certain limited matters, including the effects of
32Energizer Holdings, Inc.2016 Proxy Statement
EXECUTIVE COMPENSATION
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, costs associated with restructurings, and variations in the exchange rate between foreign currencies and budget exchange rate.
The threshold, target and stretch achievement levels, and the percent payout at each level, wereassigned as follows:
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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 performance are paid for results below the Threshold goal.
The NECC considered whether to exercise negative discretion when determining the achievement of targets, and determined that no negative discretion should be exercised. The Adjusted Operating Profit of the Company in fiscal 2016 was $256.3 million which made the amount of the awards payable under the annual bonus plan 200% of target.
Adjusted Free Cash Flow
Adjusted Free Cash Flow means net earnings plus depreciation and amortization plus share based payments plus changes in working capital plus changes in other assets and liabilities minus capital expenditures, subject to adjustment for certain limited matters, including the effects of acquisitions, divestitures, or recapitalizations, extraordinary transactions such as mergers or spin-offs, reorganizations, unusual or non-recurring non-cash accounting impacts, and costs associated with events such as plant closings, sales of facilities or operations, and business restructurings.
Working capital is measured at the beginning and the end of the relevant performance period, and consists of (i) accounts receivables less the portion of accrued liabilities representing trade allowance, (ii) inventories, and (iii) accounts payable.
The threshold, target and stretch achievement levels, and the percent payout at each level, were as follows:
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A.R. Hoskins | 115% | |||||||||
T.W. Gorman | 75% | |||||||||
M.S. LaVigne | 80% | |||||||||
G.T. Kinder | 60% | |||||||||
E.K. Boss | 60% |
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 performance are paid for results below the Threshold goal.
The NECC considered whether to exercise negative discretion when determining the achievement of targets, and determined that no negative discretion should be exercised. The Adjusted Free Cash Flow of the Company in fiscal 2016 was $184.7 million which made the amount of the awards payable under the annual bonus plan 200% of target.
Energizer Holdings, Inc.Long-Term Incentive Program2016 Proxy Statement33
EXECUTIVE COMPENSATION
Equity Awards
Our 2015 Equity Incentive Plan authorizes the NECCHuman Capital Committee to grant various types of equity awards. The NECCHuman Capital Committee grants to key executives primarily restricted stock equivalent awards, with achievement of Company performance targets over three years as a condition to vesting of the majority of the award, and continued employment with the Company over the same period as a condition to vesting of the remainder of the award. See “Executive Compensation—Potential Payments Upon Termination of Change in Control”.” In November 2015,2017, the NECCHuman Capital Committee awarded three-year incentive awards with a performance-based component constituting approximately 70% of the restricted stock equivalents vesting at targetTarget achievement and a time-vestingtime-based component constituting approximately 30% of the award value at target of the award.
Timing and Procedures for Grants in Fiscal 20162018
Other than in exceptional cases, such as promotions or new hires, long-term incentive awards are 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 also determined.
The size of equity awards for our named executive officers granted in November 20152017 was based in part upon benchmarkedon several factors, including officers’ individual performance, current dilution rates, marketrun-rate for equity grants among our peer group, and benchmark data from our peer group provided by Mercer, asour independent compensation consultant to the NECC, valued on the date of grant. The size of awards also reflected other factors, such as officers’ individual performance, current dilution rates, and the market run-rate for equity grants among our peer group. consultant.
Time-Based Restricted Stock Units
The number of restricted stock equivalents awarded in November 20152017 was based on the corresponding grant date value of the restricted stock equivalents. The restricted stock equivalent awards are stock-settled at the end of the three-year period, when they convert into unrestricted shares of our common stock if and to the extent that the vesting requirements are met. The number of restricted stock equivalents granted to each named executive officer is shown in the “Grants of Plan-Based Awards Table”.”
Our chief executive officer makes a recommendation to the NECC for the number of restricted stock equivalents to be granted to each named executive officer (other than the chief executive officer), based on market data as well as the roles, responsibilities and individual performance of each officer. With respect to awards to the chief executive officer, Mercer provides a range of potential awards to the NECC based on market comparisons. However, the NECC considers alternatives and determines the award considering the competitive posture, our company’s performance, returns to shareholders and experience and effectiveness of the chief executive officer’s leadership, as well as the input from Mercer.
Energizer Holdings, Inc. 2018 Proxy Statement 31 |
Executive Compensation
ELEMENTS OF COMPENSATION
Long-Term Performance Awards
In November 2015,2017, the NECCHuman Capital Committee granted long-term equity incentive awards to our executive officers. These awards potentially vest in November 20182020 based on the achievement of the following, two performance metrics:metrics.
Driving Shareholder Value | Weighting of Bonus Target | Threshold (50% of
| Target (100% of
| Stretch (200% of
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Cumulative Adjusted Earnings per Share
| Aligns executive officers with shareholders through a shared focus on the earnings that accrue to a shareholder in our stock | 50% | 8.73 | 9.70 | 10.67 | |||||||||||||||
Cumulative Free Cash Flow as a Percentage of Adjusted Net Sales
| Measures free cash flow relative to net sales, encouraging a sustained focus on maximizing cash flow over the long term | 50% | 11.5% | 12.5% | 13.5% |
real estate. The number of units granted to each named executive officer is shown inHuman Capital Committee believes these performance metrics more accurately reflect Energizer’s underlying financial and operating results.
Each metric for the “Grants of Plan-Based Awards Table.” No vesting of performance based long-term incentive awards occurs for results below the Threshold goal.
34Energizer Holdings, Inc.2016 Proxy Statement
EXECUTIVE COMPENSATION
Cumulative Adjusted Earnings per Share
Adjusted Cumulative Earnings per Share means the cumulative “Diluted earnings per share” (determined in accordance with Generally Accepted Accounting Principles) as publicly reported by Energizer over the three year performance period, 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 events such as plant closings, sales of facilities or operations, and business restructurings.
Cumulative Free Cash Flow as a Percentage of Adjusted Net Sales
Cumulative Free Cash Flow as a Percentage of Adjusted Net Sales (FCF % Sales) means free cash flow, defined as net earnings plus depreciation and amortization plus share based payments plus changes in working capital plus changes in other assets and liabilities minus capital expenditures, as a percentage of net sales,program is subject to adjustment for certain limited matters, including the effects of acquisitions, divestitures or recapitalizations, extraordinary transactions such as mergers or spin-offs, reorganizations, unusual or non-recurring non-cashnon-recurringnon-cash accounting impacts, and costsvariations in the exchange rate between foreign currencies and budget exchange rate.
The number of units granted to each NEO is shown in the “Grants of Plan-Based Awards Table”. No vesting of performance based long-term incentive awards occurs for results below the Threshold goal, and the maximum bonus payout is capped at 200% for Company performance at, or above, Stretch performance.
Value Provided to Shareholders
Over the past three years, we have provided significant value to our shareholders, with total shareholder return of 56.4%. These results we achieved for our shareholders are consistent with the results obtained under our incentive plans. Similarly, the performance measures associated with events such as plant closings, sales of facilities or operations, and business restructurings.
Working capital isthose long-term performance incentive awards that were granted in 2015 were measured at the beginning and the end of the relevant performanceover a three-year vesting period and consistswere tied to cumulative adjusted earnings per share and cumulative free cash flow as a percentage of (i) accounts receivables lessadjusted net sales. The Company had outstanding results over the portionthree-year vesting period. Based on these results, the long-term performance incentive grants paid out at 200% of accrued liabilities representing trade allowance, (ii) inventories, and (iii) accounts payable.target.
Executive Savings Investment Plan
On July 1, 2015, we adopted an executive savings investment plan, our excess 401(k) plan, in which certain executive officers, including our named executive officers,NEOs, participate. Under the plan, amounts that would be contributed, either by an executive or by the Company on the executive’s behalf, to the Company’s qualified defined contribution plan (the “401(k) plan”) but for limitations imposed by the IRS, will be credited to thenon-qualified defined contribution executive savings investment plan. Details of the executive savings investment plan, including the contributions, earnings, andyear-end balances, are set forth in the “Non-Qualified Deferred Compensation Table”.”
AccordingIn fiscal 2017, we adopted an amendment to the Executive Savings Investment Plan, aligning this plan to the terms of our 401(k) plan by revising the four-year vesting schedule to immediate vesting of the Company match. This amendment, effective January 1, 2018, aligned the plan with market data provided by Mercer, these typespractice, facilitates ease in integrating plans in the event of benefits are generally offered by our peer group described above, often with enhanced benefit formulas which we do not provide.a merger or acquisition, and reduces compliance requirements.
32 Energizer Holdings, Inc. 2018 Proxy Statement |
Executive Compensation
OTHER PAY PRACTICES
Deferred Compensation Plan
Our employeescolleagues do not have the opportunity to defer portions of their salary and bonus compensation under the terms of our deferred compensation plan, that provides certain benefits to our directors, or to invest in the Energizer common stock unit fund within the deferred compensation plan. However, certain executives who were employed at our former parent company prior to theSpin-Off had their account balances under our former parent company’s deferred compensation plan transferred to our deferred compensation plan. Details of the deferred compensation program, including the contributions, earnings, andyear-end balances, are set forth in the “Non-Qualified Deferred Compensation Table”.”
Pension Benefits
Energizer established a new retirement plan that acquired the assets and assumed the liabilities of our former parent’s plans in connection with theSpin-Off. Prior to January 1, 2014, our former parent company’s retirement plan covered essentially all U.S. employees of Energizer after they became eligible. Pension benefits are provided under a tax qualified defined benefit plan that is subject to maximum pay and benefit limits under the tax rules. Pension benefits are also provided under a pension restoration plan (the “Supplemental Executive Retirement Plan”) that 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 Supplemental Executive Retirement Plan are set forth in the “Pension Benefits Table,” including the accompanying narrative. As of December 31, 2013, which is the end of the first quarter of our former parent company’s 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 andnon-qualified plans.
The Retirement Accumulation Account that was effective from January 1, 2010 to December 31, 2013, included the future retirement benefits of the participants in our former parent company’s qualified defined benefit pension plan, including the NEOs, 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 the30-year Treasury rate that is reset annually. Certain older, longer-tenured participants, including the NEOs with age and years of service totaling at least 60 but not more than 74 as of December 31, 2009 received an additional monthly credit equal to 2% of eligible benefit earnings. Participants receive credit for years of service with our former parent company. Other older, longer-tenured participants with age and years of service totaling 75 or more as of December 31, 2009 received an additional monthly credit equal to 4% of their eligible benefit earnings. These transition credits were available to eligible plan participants through 2013 (or, if earlier, their termination of employment with the Company).
The defined benefit plan has used the following other benefit calculation formulas, all of which have been frozen as of the end of calendar year 2009:
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 to Mr. Hoskins.
PensionPlus Match Account (“PPMA”). The PPMA generally provided a 325% match under our retirement plan to those participants who made anafter-tax contribution of 1% of their annual earnings to our 401(k) plan. To the extent an officer’s PPMA benefit was unavailable due to the IRC limits, the benefit was restored under our excess savings investment plan and not the pension restoration plan for executives. The benefit was generally subject to a three-year vesting requirement. The PPMA benefit was available through the end of the calendar year 2009 for Mr. Hoskins.
Severance and Other Benefits Following a Change of Control
We have not entered into employment agreements with our executives. However, our NECCthe Human Capital Committee approved an executive severance plan and change of control agreements with each of our executive officers, as discussed under “PotentialPayments upon Termination or Change of Control” to align with the market practice of utilizing usingpre-defined termination programs for NEOs.
Energizer Holdings, Inc. |
EXECUTIVE COMPENSATIONExecutive Compensation
OTHER PAY PRACTICES
The change of control agreements are designed to provide executives with increased security in the event of a change of control. The NECCHuman Capital Committee annually reviews the cost and the terms of the agreements with input provided by Mercer. 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;
the agreements includenon-compete andnon-solicitation covenants binding on the executives, which can provide significant benefitconsiderations to the new controlling entity;completion of a potential transaction; and
the individuals with the agreements are carefully selected by the Board of Directors, and we believe they are critical to the process of evaluating or negotiating a potential change of control transaction or in the operation of our business during the negotiations or integration process, so that their retention would be critical to the success of any such transaction.
We do not permit taxgross-up payments relating to severance payments for change of control employment agreements entered into with our executive officers.
A description of the projected cost, if a change of control were to have occurred on the last day of fiscal 20162018 and all of the named executive officersNEOs were terminated on that date, is provided under “Potential Payments upon Termination or Change of Control”.”
Tax Deductibility of Compensation
Prior to 2018, a public company was limited by the Internal Revenue Code to a $1 million deduction for compensation paid to its Chief Executive Officer or any of its three other most highly compensated executive officers (other than the Chief Financial Officer) who were employed atyear-end. This limitation did not apply to compensation that met the tax code requirements for qualifying performance-based compensation. Changes in tax law effective January 1, 2018 limit a public company’s deductions to $1 million for compensation paid to its Chief Executive Officer, Chief Financial Officer, and each of its three other most highly compensated executive officers, as well as to any individual who was subject to the $1 million deduction limitation in 2017 or any later year.
Under the revised law, there is no exception for qualifying performance-based compensation unless it is pursuant to a written binding contract in effect as of November 2, 2017. Certain incentive awards made on or prior to November 2, 2017 may satisfy the requirements for deductible compensation. The Human Capital Committee’s policy is to maximize the tax deductibility of executive compensation without compromising the essential framework of the existing total compensation program. The Human Capital Committee continues to retain the discretion to make awards and pay amounts that do not qualify as deductible.
Perquisites
We offer a limited number of perquisites for our executive officers. The primary perquisite or executive benefit consists of the executive financial planning program, which provides reimbursement for 80% of the costs incurred for qualifying financial planning, legal, and tax preparation services up to a maximum of $8,000 in the first calendar year and $6,000 in subsequent calendar years. This benefit partially offsets costs incurred by our executive officers in connection with their regulatory compliance obligations as public company executives. We regularly review the benefits provided to our executives and make appropriate modifications based on peer group analysis and the committee’sHuman Capital Committee’s evaluation of the retentive value of these benefits.
Stock Ownership RequirementsSuccess Incentive Agreement
Our stock ownership guidelinesIn connection with Mr. Gorman’s appointment as Interim Chief Financial Officer on June 8, 2017, the Human Capital Committee approved the Company’s entry into a Success Incentive Agreement with Mr. Gorman to provide an incentive for Mr. Gorman to
34 Energizer Holdings, Inc. 2018 Proxy Statement |
Executive Compensation
OTHER PAY PRACTICES
assist in the successful transition of the Company during the interim period prior to hiring a permanent Chief Financial Officer. The Success Incentive Agreement provided that upon a successful transition, Mr. Gorman would be entitled to receive a special cash bonus equal to $240,000 on February 1, 2018. Mr. Gorman received the Success Incentive cash bonus on February 1, 2018.
Clawback Policy
Under our annual incentive awards and long-term incentive awards, in the event of a restatement of financial results to correct a material error, the Human Capital Committee is authorized to reduce or recoup an executive officer’s award, as applicable, to the extent that the chiefHuman Capital Committee determines such executive officer must maintain ownership of our common stock withofficer’s misconduct was a value of at least five times his base salary, and other executive officers must maintain common stock ownership withsignificant contributing factor to the need for a value of at least three times their base salaries. Newly appointed executive officers are required to retain at least fifty percent (50%) of vesting restricted stock until they become compliant and are given a period of five years to attain full compliance with the guidelines.restatement.
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 and unvested restricted stock equivalents (other than stock equivalents subject to achievement of performance targets). As of September 30, 2016, each of our named executive officers was in compliance with the guidelines.
36Energizer Holdings, Inc.2016 Proxy Statement
EXECUTIVE COMPENSATION
Trading in Energizer Stock
Under our insider trading policy, directors, officers and employees or their designees are prohibited from engaging in speculative trading, hedging or pledging transactions in Energizer securities, including prohibitions on:
investing or trading in market-traded options on Energizer securities—i.e., puts and calls; or
purchasing 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 Energizer 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
purchasing Energizer securities on margin, pledging Energizer securities, or holding Energizer securities in margin accounts; or
engaging in “short-sales” of Energizer securities—i.e., selling Energizer stock not owned at the time of the sale; or
speculating on relatively short-term price movements of Energizer securities—i.e., engage in a purchase and sale of Energizer stock within a short period of time.
The policy prohibits the transfer of funds into or out of Energizer stock equivalent funds in Energizer’s benefit plans while in possession or aware of materialnon-public information, or engaging in any other transaction involving Energizer securities, including pledging, that suggests the misuse of information that is unavailable to the general public.
Tax Deductibility Limits on Executive Compensation
Section 162(m) of the Internal Revenue Code 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 NECC’s policy is to maximize the tax deductibility of executive compensation without compromising the essential framework of the existing total compensation program. The NECC may elect to forgo deductibility for federal income tax purposes if such action is, in the opinion of the NECC, necessary or appropriate to further the goals of the Company’s executive compensation program, or otherwise is in the Company’s best interests.
Results of 2016 Advisory Vote to Approve Executive Compensation
At our 2016 Annual Meeting of shareholders, we asked our shareholders to vote to approve, on an advisory basis, our fiscal year 2015 compensation paid to our named executive officers, commonly referred to as a “say-on-pay” vote. Our shareholders overwhelmingly approved compensation to our named executive officers, with over 96% of votes cast in favor of our say-on-pay resolution. We value this positive endorsement by our shareholders of our executive compensation policies and believe that the outcome signals our shareholders’ support of our compensation program. As a result, we continued our overall approach to compensation for fiscal 2016 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. We value the opinions of our shareholders and will continue to consider the results from this year’s and future advisory votes on executive compensation, as well as feedback received throughout the year, when making compensation decisions for our named executive officers.
Energizer Holdings, Inc.2016 Proxy Statement37
EXECUTIVE COMPENSATION
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 NECC sets executive salaries and bonuses, reviews executive benefit programs, including change of control severance agreements, and grants cash bonus awards to our executive officers under our cash bonus program, as well as equity awards to executives under our 2015 Equity Incentive Plan.
To assist the NECC in evaluating our executive and director compensation programs on a competitive market basis, the committee has directly retained an outside consultant, Mercer, which is asked to:
The NECC has reviewed the independence of Mercer and has determined that Mercer has no conflicts of interest. In particular:
During fiscal 2016, the aggregate fees paid to Mercer for services related to executive compensation were approximately $161,842. In fiscal 2016, Mercer and its Marsh & McLennan affiliates were also retained by our management to provide services unrelated to executive compensation, including providing advice regarding our global pension programs in the areas of compliance, administration and funding and global compensation consulting and benchmarking below the Executive Officer level. The aggregate fees paid for those other services in fiscal 2016 were approximately $1,761,258. The NECC and the board did not review or approve the other services provided to management by Mercer and its Marsh & McLennan affiliates, as those services were approved by our management in the normal course of business.
We have been advised by Mercer that the reporting relationship and compensation of the Mercer consultants who perform executive compensation consulting services for the NECC is separate from, and is not determined by reference to, Mercer’s or Marsh & McLennan’s other lines of business or their other work for us.
A representative of Mercer attends committee meetings and serves as a resource to the NECC on executive and director compensation matters. Additionally, to encourage independent review and discussion of executive compensation matters, the committee meets with Mercer in executive session.
38Energizer Holdings, Inc.2016 Proxy Statement
EXECUTIVE COMPENSATION
COMPENSATION POLICIES AND PRACTICES AS THEY RELATE TO RISK MANAGEMENT
As stated above under “Corporate Governance, Risk Oversight and Director Independence—Determining Executive Compensation” 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 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, 2016.
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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.
Energizer Holdings, Inc.2016 Proxy Statement39
EXECUTIVE COMPENSATION
TABLE
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, 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) | |||||||
Equity compensation plans approved by security holders | 1,666,966 | N/A | 5,749,928 | |||||||
Equity compensation plans not approved by security holders | None | N/A | None | |||||||
Total | 1,666,966 | N/A | 5,749,928 |
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40Energizer Holdings, Inc.2016 Proxy Statement
EXECUTIVE COMPENSATION
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 Nonqualified Deferred Comp. Earnings (4) | All Other Compensation (5) | Total | Fiscal Year | Base Salary | Annual Incentive Award (1) | Stock Awards (2) | Option Awards | Non- Equity Incentive Plan Comp. (1)(3) | Change in Pension Value and Nonqualified Deferred Comp. Earnings (4) | All Other Compensation (5) | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alan R. Hoskins | 2016 | $ | 923,625 | $0 | $ | 3,600,024 | $0 | $ | 1,586,561 | $ | 68,875 | $ | 125,028 | $ | 6,304,113 | 2018 | $ | 994,167 | $ | 0 | $ | 4,000,056 | $ | 0 | $ | 1,510,837 | $ | 65,680 | $ | 164,495 | $ | 6,735,235 | |||||||||||||||||||||||||||||||||||||||||||||||||
President & Chief | 2015 | $ | 650,007 | $0 | $ | 7,825,107 | $0 | $ | 789,660 | $ | 68,371 | $ | 67,616 | $ | 9,400,761 | 2017 | $ | 961,833 | $ | 0 | $ | 3,860,069 | $ | 0 | $ | 1,647,424 | $ | 41,918 | $ | 159,629 | $ | 6,670,873 | |||||||||||||||||||||||||||||||||||||||||||||||||
Executive Officer | 2014 | $ | 458,350 | $0 | $ | 830,001 | $0 | $ | 613,425 | $ | 155,681 | $ | 65,710 | $ | 2,123,167 | 2016 | $ | 923,625 | $ | 0 | $ | 3,600,024 | $ | 0 | $ | 1,586,561 | $ | 68,875 | $ | 125,028 | $ | 6,304,113 | |||||||||||||||||||||||||||||||||||||||||||||||||
Brian K. Hamm | 2016 | $ | 539,438 | $0 | $ | 1,312,501 | $0 | $ | 740,395 | 5,248 | $ | 59,466 | $ | 2,657,048 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Timothy W. Gorman | 2018 | $ | 520,000 | $ | 0 | $ | 850,054 | $ | 0 | $ | 755,385 | $ | 0 | $ | 50,336 | $ | 2,175,775 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Executive Vice President & | 2015 | $ | 367,503 | $0 | $ | 2,911,288 | $0 | $ | 611,647 | $ | 5,836 | $ | 46,869 | $ | 3,943,143 | 2017 | $ | 341,342 | $ | 0 | $ | 275,008 | $ | 0 | $ | 318,940 | $ | 0 | $ | 38,306 | $ | 973,596 | |||||||||||||||||||||||||||||||||||||||||||||||||
Chief Financial Officer | 2014 | $ | 300,633 | $0 | $ | 363,209 | $0 | $ | 299,650 | $ | 26,724 | $ | 39,930 | $ | 1,030,146 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mark S. LaVigne | 2016 | $ | 539,438 | $0 | $ | 1,312,501 | $0 | $ | 740,395 | 4,327 | $ | 67,802 | $ | 2,664,463 | 2018 | $ | 570,897 | $ | 0 | $ | 1,320,033 | $ | 0 | $ | 603,545 | $ | 4,549 | $ | 79,942 | $ | 2,578,966 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Executive Vice President | 2015 | $ | 461,246 | $0 | $ | 3,633,178 | $0 | $ | 1,070,905 | $ | 4,811 | $ | 63,037 | $ | 5,233,177 | 2017 | $ | 555,621 | $ | 0 | $ | 1,312,526 | $ | 0 | $ | 661,461 | $ | 3,485 | $ | 83,761 | $ | 2,616,854 | |||||||||||||||||||||||||||||||||||||||||||||||||
& Chief Operating Officer | 2014 | $ | 436,665 | $0 | $ | 778,159 | $0 | $ | 446,858 | $ | 32,540 | $ | 56,881 | $ | 1,751,103 | 2016 | $ | 539,438 | $ | 0 | $ | 1,312,501 | $ | 0 | $ | 740,395 | $ | 4,327 | $ | 67,802 | $ | 2,664,463 | |||||||||||||||||||||||||||||||||||||||||||||||||
Gregory T. Kinder | 2016 | $ | 416,250 | $0 | $ | 900,006 | $0 | $ | 429,244 | 882 | $ | 41,656 | $ | 1,788,038 | 2018 | $ | 449,873 | $ | 0 | $ | 875,027 | $ | 0 | $ | 356,699 | $ | 926 | $ | 50,449 | $ | 1,732,974 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Executive Vice President & | 2015 | $ | 375,182 | $0 | $ | 1,325,781 | $0 | $ | 614,538 | $ | 980 | $ | 20,569 | $ | 2,337,050 | 2017 | $ | 437,158 | $ | 0 | $ | 900,036 | $ | 0 | $ | 390,928 | $ | 710 | $ | 57,948 | $ | 1,786,780 | |||||||||||||||||||||||||||||||||||||||||||||||||
Chief Supply Chain Officer | 2016 | $ | 416,250 | $ | 0 | $ | 900,006 | $ | 0 | $ | 429,244 | $ | 882 | $ | 41,656 | $ | 1,788,038 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Emily K. Boss | 2016 | $ | 411,000 | $0 | $ | 500,057 | $0 | $ | 423,083 | $ | 149 | $ | 37,502 | $ | 1,371,791 | 2018 | $ | 440,978 | $ | 0 | $ | 600,060 | $ | 0 | $ | 349,646 | $ | 157 | $ | 49,357 | $ | 1,440,198 | |||||||||||||||||||||||||||||||||||||||||||||||||
Vice President & General Counsel | 2015 | $ | 295,000 | $0 | $ | 1,275,806 | $0 | $ | 578,918 | $ | 166 | $ | 32,052 | $ | 2,181,942 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Vice President & General | 2017 | $ | 427,107 | $ | 0 | $ | 515,076 | $ | 0 | $ | 381,647 | $ | 120 | $ | 55,107 | $ | 1,379,057 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Counsel | 2016 | $ | 411,000 | $ | 0 | $ | 500,057 | $ | 0 | $ | 423,083 | $ | 149 | $ | 37,502 | $ | 1,371,791 |
(1) | All awards under our annual cash bonus program are based upon achievement of |
(2) | The amounts listed in the column include a performance-based restricted stock equivalent grant awarded in November |
The grant date fair value of the performance- based awards included in the table is as follows:
Mr. Hoskins, $2,800,026 | Mr. LaVigne, $924,001 | Ms. Boss, $420,033 | ||
Mr. Gorman, $595,020 | Mr. Kinder, $612,524 |
The amounts listed in the column also include time-based restricted stock equivalent awards granted by the Human Capital Committee in November 2017 that vest over three years assuming that the officer remains employed with the Company. The award was granted using grant date fair value of the awards as follows: |
Mr. Hoskins, $1,200,030 | Mr. LaVigne, $396,032 | Ms. Boss, $180,027 | ||
Mr. Gorman $255,034 | Mr. Kinder, $262,503 |
The amounts listed in the column also include equity awards granted by our NECC in November 2015 that vest over three years assuming that the officer remains employed with the company. The award was granted using grant date fair value of the awards as follows:
Energizer Holdings, Inc.2016 Proxy Statement41
EXECUTIVE COMPENSATION
(3) | The amounts reported in this column reflect bonuses earned by the |
(4) | The amounts reported in this column consist of aggregate changes in the actuarial present value of accumulated benefits under the applicable retirement plan and the supplemental executive retirement plan, our pension restoration plan, which are the applicable defined benefit pension plans described in the narrative to the “ |
(5) | The amounts reported in this column with respect to fiscal |
(i) | Company matching contributions in our 401(k) plan: |
Mr. Hoskins, $16,693 | Mr. LaVigne, $16,500 | Ms. Boss, $16,500 | ||
Mr. Gorman, $15,100 | Mr. Kinder, $16,566 |
(ii) | Company matching contributions or accruals in our |
Mr. Hoskins, $141,802 | Mr. LaVigne, $57,442 | Ms. Boss, $32,857 | ||
Mr. Gorman, $35,236 | Mr. Kinder, $33,883 |
These amounts include benefits which were accrued by the named executive officers
These amounts include benefits which were accrued by the NEOs 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. |
36 Energizer Holdings, Inc. 2018 Proxy Statement |
Executive Compensation
EXECUTIVE COMPENSATION TABLE
(ii) | The incremental cost to the |
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 2016,
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 2018, the following reimbursement payments were made: |
Mr. Hoskins, $6,000 | Mr. LaVigne, $6,000 |
The above list of perquisites does not include any contributions made by our charitable foundation which may have been made at the request of any of the NEOs. The directors of that foundation, all of whom 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 foundation. Executive officers are also eligible to participate in the charitable foundation 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. |
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 the first quarter of fiscal 2016, we paid $696 in premiums for each of the named executive officers. Effective January 1, 2016, the Executive Excess Liability Plan was eliminated.
Dividend Equivalent Payments Not Included. Holders of restricted stock equivalents have the right to receive cash dividend equivalent payments on restricted stock equivalents but only if the underlying restricted stock equivalents vest. The amounts of such dividends are reflected in the closing price of Energizer Holdings, Inc. common stock on the NYSE (or the common stock of our former parent company prior to theSpin-Off) and are included in the grant date fair value for the restricted stock equivalent grants. |
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 equity compensation plans as of September 30, 2018:
Plan Category | Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights (1) | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (2) | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities and as Noted Below) (3) | ||||||||||||
Equity compensation plans approved by security holders
|
| 1,314,052
|
|
| N/A
|
|
| 4,114,332
|
| ||||||
Equity compensation plans not approved by security holders
|
| None
|
|
| N/A
|
|
| None
|
| ||||||
Total
|
| 1,314,052
|
|
| N/A
|
|
| 4,114,332
|
|
(1) |
|
(2) | The weighted average exercise price does not take into account securities which will be issued upon conversion of outstanding restricted stock equivalents. |
(3) |
|