Robert V. Vitale
Robert V. Vitale
Chief Executive Officer, Post Holdings, Inc. | Age: 54 | | | Director Since 2017 | | |
Independent Director
Energizer Committees:
Audit Committee (Chair)
Finance and Oversight
Committee
Other Public Company
Board(s):
• BellRing Brands, Inc. | | | | | Director Since 2017
Mr. Vitale ishas served as President and Chief Executive Officer of Post Holdings, Inc. since 2014. Post is a diversifiedconsumer packaged goods holding company operating in the center-of-the-store, food company with leading positions in ready to eat cereal, value added egg products, sportsservice, food ingredient, refrigerated convenient nutrition and various private brand food 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 BoatmensBoatmen’s 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. | | | | | | | | • Public Company Experience | | | | | | | | | • Finance Financial Literacy / Expertise | | | | | | • Consumer Packaged Goods Experience | | | | | | | | | | | | • Corporate Governance | | | | | | Mr. Vitale’s strong leadership, deep M&A expertise and accounting and financial background, along with his knowledge of consumer products businesses, brings critical expertise to our Board of Directors. | | |
| | | 16 Energizer Holdings, Inc. 2018 Proxy Statement
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Board of Directors
DIRECTOR ATTENDANCE DIRECTOR ATTENDANCE
Our Board holds regularly scheduled quarterly meetings. Additionally, there is generallyThe Board also holds an annual strategy retreat,strategic planning meeting at which includes presentationsit considers and discussionsdiscusses with senior management about the Company’s long-term strategy. During fiscal 2018,2020, all directors attended 75% or more of the Board meetings and meetings of the Committees on which they served during their period of service. Under our Corporate Governance Principles, each director is encouraged to attend our Annual Shareholders’ Meeting. All of our directors attended the 20182020 Annual Shareholders’ Meeting.
THE BOARD OF DIRECTORS AND ENERGIZER’S CORPORATE GOVERNANCE — DIRECTOR COMPENSATION We provided several elements of compensation to our non-employee directors for service on our Board during fiscal 2018.2020. The Human Capital Committee, which makes recommendations to the full Board regarding director compensation, strives to set director compensation at the 50 th percentile of the peer group. This peer group, which can be found under “ Executive Compensation—Executive Compensation Peer Group,” has been selected for purposes of evaluating our executive and director compensation based on market data provided by the Human Capital Committee’s independent consultant, Mercer.Mercer LLC. Retainers and Meeting FeesRETAINERS AND MEETING FEESDuring fiscal 2018, all2020, each of the directors, other than Mr. Hoskins, and Ms. Rimmer, received the following compensation packagea $100,000 annual retainer for serving on the Board and its Committees. Mr. Hoskins, our President and Chief Executive Officer, receives no additional compensation for his service on the Board and its Committees. During fiscal 2018, Ms. Rimmer received a pro rata portion of the below compensation package, as Ms. Rimmer joined our BoardFinance and our Audit Committee, effective July 27, 2018. | | | | | 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 | |
Oversight Committee. The Chairs of the Committees also received an additional annual retainer of $20,000 for their service, and the Independent Chairman of the Board received an additional annual retainer of $100,000 for his service as Chairman. Board members serving a portion of the fiscal year will receive a pro rata portion of the annual retainer. Deferred Compensation PlanDEFERRED COMPENSATION PLANNon-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 EquivalentsRESTRICTED STOCK EQUIVALENTS/UNITSInitial 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.
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| | Energizer Holdings, Inc. 2018 Proxy Statement 17
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Board of Directors
THE BOARD OF DIRECTORS AND ENERGIZER’S CORPORATE GOVERNANCE—DIRECTOR COMPENSATION
Annual Grant. On the first business day of January each year, eachnon-employee director is credited with a restricted stock equivalentunit award with a grant-date value of $110,000 under$145,000 pursuant to our Equity Incentive Plan.equity 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
18 Energizer Holdings, Inc. 2020 Proxy Statement | |
TABLE OF CONTENTS the Board. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 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 | |
Board members serving a portion of the fiscal year will receive a pro rata portion of the annual restricted stock unit award. Upon retirement, all annual restricted stock unit awards become vested. In November 2019, the Board discontinued its previous practice of awarding a one-time equity grant to newly appointed directors.DIRECTOR SHARE OWNERSHIP REQUIREMENTS To help align the financial interests of our non-employee directors with those of our shareholders, our Corporate Governance Principles provide that our non-employee directors must maintain ownership of our common stock with a value of at least five times the directors’ annual retainer. For purposes of this determination, 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 or units, unvested restricted stock equivalents or units (other than stock equivalents or units subject to achievement of performance targets) and common stock equivalents credited to a director under the Company’s deferred compensation plan. Newly appointed directors are required to retain at least fifty percent (50%) of restricted stock upon vesting until they become compliant and are given a period of five years to attain full compliance with the requirements. As of September 30, 2020, each of our directors complied with the requirements. The following table sets forth the compensation paid to non-management directors for fiscal year 2020. | C. Abrams-Rivera | | | $66,667 | | | $132,945 | | | $0 | | | $0 | | | $0 | | | $0 | | | $199,612 | | | B.G. Armstrong | | | $100,000 | | | $145,019 | | | $0 | | | $0 | | | $0 | | | $0 | | | $245,019 | | | C.J. Brinkley | | | $120,000 | | | $145,019 | | | $0 | | | $0 | | | $0 | | | $0 | | | $265,019 | | | R. Frankiewicz | | | $66,667 | | | $132,945 | | | $0 | | | $0 | | | $0 | | | $0 | | | $199,612 | | | K.J. Hunt | | | $117,778 | | | $145,019 | | | $0 | | | $0 | | | $0 | | | $0 | | | $262,797 | | | J.C. Johnson | | | $120,000 | | | $145,019 | | | $0 | | | $0 | | | $0 | | | $0 | | | $265,019 | | | J.E. Klein | | | $100,000 | | | $145,019 | | | $0 | | | $0 | | | $0 | | | $0 | | | $245,019 | | | W.P. McGinnis (1) | | | $35,555 | | | $12,089 | | | $0 | | | $0 | | | $0 | | | $0 | | | $47,644 | | | P.J. Moore | | | $200,000 | | | $145,019 | | | $0 | | | $0 | | | $0 | | | $0 | | | $345,019 | | | J.P. Mulcahy (1) | | | $33,333 | | | $12,089 | | | $0 | | | $0 | | | $0 | | | $0 | | | $45,422 | | | N.L. Rimmer | | | $100,000 | | | $145,019 | | | $0 | | | $0 | | | $0 | | | $0 | | | $245,019 | | | R.V. Vitale | | | $120,000 | | | $145,019 | | | $0 | | | $0 | | | $0 | | | $0 | | | $265,109 | |
(1)
| Mr. McGinnis and Mr. Mulcahy retired from the Board of Directors on January 27, 2020. |
(2)
| This column reflects retainers and meeting fees earned during fiscal 2018.2020. |
(2)(3)
| 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”) SectionTopic 718, of the restricted stock equivalent award on January 2, 20182020 under our Equity Incentive2015 Plan valued at approximately $110,000$145,000 as described in the narrative above. The award was valued based on the grant date fair value of $47.88. $48.55. Awards granted to Mr. Abrams-Rivera and Ms. Frankiewicz were granted on January 27, 2020 and valued based on the grant date fair value of $47.96. |
(3)(4)
| The number of vested but deferred stock equivalents held by a director as of September 30, 2020 is as follows: Ms. Brinkley, 5,589; Mr. Johnson, 18,801; Mr. Klein, 25,401; Mr. Moore, 15,909; and Mr. Vitale, 9,911. |
(5)
| No options were granted to directors in fiscal year 2018.2020. There were no outstanding shares of underlying stock options held by any director as of September 30, 2018.2020. |
(4)(6)
| 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)(7)
| The following items are not considered perquisites and are not included within the above disclosure of director compensation: |
(i)
| (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)
| (ii) | We provide transportation and lodging forout-of-town directors attending Board and Committee meetings at our headquarters. |
(iii)
| (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 employeescolleagues 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.
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| | | 18 Energizer Holdings, Inc. 2018 Proxy Statement
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Executive Compensation
Compensation Discussion and Analysis
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:
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| | Alan R. Hoskins
President and Chief Executive
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| | Mark S. LaVigne
Executive Vice President and
Chief Operating Officer
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| | Timothy W. Gorman
Executive Vice President and
Chief Financial Officer
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| | Gregory T. Kinder
Executive Vice President and
Chief Supply Chain Officer
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| | Emily K. Boss
Vice President and General Counsel
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| | Energizer Holdings, Inc. 2018 Proxy Statement 19
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Executive Compensation
EXECUTIVE COMPENSATION
Fiscal 2018 Financial Performance
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 continued 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
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| | | | | We are focused on operating with excellence with continued distribution gains, portfolio optimization and pricing
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| | | | | We are driving productivity gains by investing in continuous improvement initiatives to drive further efficiencies in our business
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Non-GAAP reconciliation can be found in Appendix A
(1) | Separation from our former parent company on July 1, 2015 (“Spin-Off”)
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| | | 20 Energizer Holdings, Inc. 2018 Proxy Statement
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Executive 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 Human Capital Committee has primary responsibility for approving our compensation strategy and philosophy and the compensation programs applicable to 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 consistent with our pay for performance 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 outcome 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
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| | Energizer Holdings, Inc. 2018 Proxy Statement 21
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Executive Compensation
PAY FOR PERFORMANCE
PAY FOR PERFORMANCE
The Human Capital Committee allocates pay in a manner designed to place performance at the forefront of our overall executive compensation program. Our focus on pay for performance is best demonstrated through the structure of our executive compensation programs where the majority of executive pay is at risk and subject to annual and long-term performance requirements.
Further, consistent with our pay for performance philosophy, as illustrated in the graph below, the Company’s performance, with respect to total shareholder return over a three-year period was in the top third among the companies in our executive compensation peer group.
| | | 22 Energizer Holdings, Inc. 2018 Proxy Statement
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Executive 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 same principles that govern the compensation of all our salaried colleagues apply to the compensation of our executive officers. Within this framework, we observe the following, guiding principles:
| | | | | | | | | | | What we Believe | | | | 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
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| | Energizer Holdings, Inc. 2018 Proxy Statement 23
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Executive Compensation
PAY FOR PERFORMANCE
Fiscal 2018 Pay Components
| | | | | 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,
experience, and market comparable
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
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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
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:
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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| | Energizer Holdings, Inc. 2018 Proxy Statement 25
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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”
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 | | Personal Care | | Food and Beverage | The Clorox Company
Spectrum Brands Holdings, Inc.
Hasbro Inc.
Central Garden & Pet Co.
The ScottsMiracle-Gro Company
Tupperware Brands Corporation
| | Church & Dwight Inc.
Revlon, Inc.
Helen of Troy Ltd.
| | Lancaster Colony Corporation
Hain Celestial Group, Inc.
Monster Beverage Corporation
Post Holdings, Inc.
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Total Compensation
The Human Capital Committee targets total compensation to near the 50th percentile of our peer group’s total compensation. The following table shows how we compared to our peer group companies based on revenue for the most recently reported fiscal year and number of employees as of September 2018.
| | | | | | | | | | | | | Company Revenue (in millions) | | Employees | 75th Percentile | | | | 5,109 | | | | | 10,055 | | 50th Percentile | | | | 2,694 | | | | | 5,400 | | 25th Percentile | | | | 2,155 | | | | | 3,450 | | Energizer | | | | 1,798 | | | | | 4,000 | |
| | | 26 Energizer Holdings, Inc. 2018 Proxy Statement
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Executive Compensation
HOW WE DETERMINE COMPENSATION
Chief 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 Human 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
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Compensation Process for Executive Officers
For the other executive officers, the Chief Executive Officer makes recommendations to the 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 Human 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
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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 annual 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 (i) projected base or wage compensation, projected recurrent cash allowances, and actual cash bonus payments for
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| | Energizer Holdings, Inc. 2018 Proxy Statement 27
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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 | |
ELEMENTS OF COMPENSATION
| Primary Elements of our Executive Compensation Program
• Base Salary
• Annual Incentive Program
• Long-Term Incentive Program
– Performance Share Awards
– Time-Based Restricted Share Awards
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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 the median of our peer group) and individual position and performance.
Alan R. Hoskins Other Executive Officer Average Compensation
| | | 28 Energizer Holdings, Inc. 2018 Proxy Statement
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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 peer group, adjusted for other factors such as individual performance and responsibilities. While we are cognizant of the competitive 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 market median. The Human Capital Committee considers adjustments to base salaries for the executive officers on an annual basis. For fiscal 2018, the Human Capital Committee felt that an increase to the base salaries of our executive officers in 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 for our named executive officers. The base salary adjustments for fiscal 2018 were effective 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.
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| | Energizer Holdings, Inc. 2018 Proxy Statement 29
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Executive Compensation
ELEMENTS OF COMPENSATION
Annual Incentive Program
The overall design of our fiscal 2018 annual incentive program was the same as the fiscal 2017 program. The annual incentive program is based on performance against certain metrics determined by the Human Capital Committee. Our fiscal 2018 annual incentive award was designed to measure performance against four metrics:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Driving Shareholder Value | | Weighting of Bonus Target | | Threshold (50% of Bonus Target) | | Target (100% of Bonus Target) | | Stretch (200% of Bonus Target) | | Actual Achievement | 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 Tax Cuts and Jobs Act of 2017.
Each metric for the annual incentive plan was 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.
Bonuses 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
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Executive Compensation
ELEMENTS OF COMPENSATION
The performance goals for each metric were set at the beginning of the fiscal year, and each executive officer was assigned individual bonus targets based on individual performance and market practice information provided by the independent compensation consultant. For fiscal 2018, the following bonus targets, defined as a percentage of the individual’s base pay, were assigned as follows:
| | | | | | | | | | Bonus Target
| | | A.R. Hoskins
| | 115% | | | T.W. Gorman
| | 75% | | | M.S. LaVigne
| | 80% | | | G.T. Kinder
| | 60% | | | E.K. Boss
| | 60% |
Long-Term Incentive Program
Our 2015 Equity Incentive Plan authorizes the Human Capital Committee to grant various types of equity awards. The Human 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 “Potential Payments Upon Termination of Change in Control”. In November 2017, the Human Capital Committee awarded three-year incentive awards with a performance-based component constituting approximately 70% of the restricted stock equivalents vesting at Target achievement and a time-based component constituting approximately 30% of the award value at target of the award.
Timing and Procedures for Grants in Fiscal 2018
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 executive officers granted in November 2017 was based on 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 our independent compensation consultant.
Time-Based Restricted Stock Units
The number of restricted stock equivalents awarded in November 2017 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 executive officer is shown in the “Grants of Plan-Based Awards Table”.
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| | Energizer Holdings, Inc. 2018 Proxy Statement 31
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Executive Compensation
ELEMENTS OF COMPENSATION
Long-Term Performance Awards
In November 2017, the Human Capital Committee granted long-term equity incentive awards to our executive officers. These awards potentially vest in November 2020 based on the achievement of the following, two performance metrics.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Driving Shareholder Value | | | | Weighting of Bonus Target | | | | Threshold (50% of Target) | | | | Target (100% of Target) | | | | Stretch (200% of Target) | | | | | | | | | | | | | | 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% | | |
The Human Capital Committee adopted performance metrics that usenon-GAAP financial measures, which exclude certain items that the Human Capital Committee believes are not reflective of the Company’s ongoing operating performance, such as costs related to acquisition and integration costs, and gain on sale of real estate. The Human Capital Committee believes these performance metrics more accurately reflect Energizer’s underlying financial and operating results.
Each metric for the long-term incentive 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, unusual ornon-recurringnon-cash accounting impacts, and variations 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 those long-term performance incentive awards that were granted in 2015 were measured over a three-year vesting period and were tied to cumulative adjusted earnings per share and cumulative free cash flow as a percentage of adjusted net sales. The Company had outstanding results over the three-year vesting period. Based on these results, the long-term performance incentive grants paid out at 200% of target.
OTHER PAY PRACTICES
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 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”.
In 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 practice, facilitates ease in integrating plans in the event of a merger or acquisition, and reduces compliance requirements.
| | | 32 Energizer Holdings, Inc. 2018 Proxy Statement
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Executive Compensation
OTHER PAY PRACTICES
Deferred Compensation Plan
Our colleagues do not have the opportunity to defer portions of their salary and bonus compensation under the terms of our deferred compensation plan, 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, the 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 usingpre-defined termination programs for NEOs.
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| | Energizer Holdings, Inc. 2018 Proxy Statement 33
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Executive 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 Human 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;
such costs will be triggered only if the new controlling entity involuntarily terminates the impacted executives, or the executives resign for good reason, during the protected period;
the agreements includenon-compete andnon-solicitation covenants binding on the executives, which can provide significant considerations to 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 2018 and all of the NEOs 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 Human Capital Committee’s evaluation of the retentive value of these benefits.
Success Incentive Agreement
In 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
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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 Human Capital Committee determines such executive officer’s misconduct was a significant contributing factor to the need for a restatement.
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;
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;
purchasing Energizer securities on margin, pledging Energizer securities, or holding Energizer securities in margin accounts;
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.
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| | Energizer Holdings, Inc. 2018 Proxy Statement 35
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Executive Compensation
EXECUTIVE COMPENSATION TABLE
SUMMARY COMPENSATION TABLE
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and Principal Position | | 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 | | | | 2018 | | | | $ | 994,167 | | | | $ | 0 | | | | $ | 4,000,056 | | | | $ | 0 | | | | $ | 1,510,837 | | | | $ | 65,680 | | | | $ | 164,495 | | | | $ | 6,735,235 | | President & Chief | | | | 2017 | | | | $ | 961,833 | | | | $ | 0 | | | | $ | 3,860,069 | | | | $ | 0 | | | | $ | 1,647,424 | | | | $ | 41,918 | | | | $ | 159,629 | | | | $ | 6,670,873 | | Executive Officer | | | | 2016 | | | | $ | 923,625 | | | | $ | 0 | | | | $ | 3,600,024 | | | | $ | 0 | | | | $ | 1,586,561 | | | | $ | 68,875 | | | | $ | 125,028 | | | | $ | 6,304,113 | | Timothy W. Gorman | | | | 2018 | | | | $ | 520,000 | | | | $ | 0 | | | | $ | 850,054 | | | | $ | 0 | | | | $ | 755,385 | | | | $ | 0 | | | | $ | 50,336 | | | | $ | 2,175,775 | | Executive Vice President & | | | | 2017 | | | | $ | 341,342 | | | | $ | 0 | | | | $ | 275,008 | | | | $ | 0 | | | | $ | 318,940 | | | | $ | 0 | | | | $ | 38,306 | | | | $ | 973,596 | | Chief Financial Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Mark S. LaVigne | | | | 2018 | | | | $ | 570,897 | | | | $ | 0 | | | | $ | 1,320,033 | | | | $ | 0 | | | | $ | 603,545 | | | | $ | 4,549 | | | | $ | 79,942 | | | | $ | 2,578,966 | | Executive Vice President | | | | 2017 | | | | $ | 555,621 | | | | $ | 0 | | | | $ | 1,312,526 | | | | $ | 0 | | | | $ | 661,461 | | | | $ | 3,485 | | | | $ | 83,761 | | | | $ | 2,616,854 | | & Chief Operating Officer | | | | 2016 | | | | $ | 539,438 | | | | $ | 0 | | | | $ | 1,312,501 | | | | $ | 0 | | | | $ | 740,395 | | | | $ | 4,327 | | | | $ | 67,802 | | | | $ | 2,664,463 | | Gregory T. Kinder | | | | 2018 | | | | $ | 449,873 | | | | $ | 0 | | | | $ | 875,027 | | | | $ | 0 | | | | $ | 356,699 | | | | $ | 926 | | | | $ | 50,449 | | | | $ | 1,732,974 | | Executive Vice President & | | | | 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 | | | | 2018 | | | | $ | 440,978 | | | | $ | 0 | | | | $ | 600,060 | | | | $ | 0 | | | | $ | 349,646 | | | | $ | 157 | | | | $ | 49,357 | | | | $ | 1,440,198 | | 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 Company performance measures established at the beginning of a performance period. Consequently, the value of all bonuses earned during the fiscal year have been included in the“Non-Equity Incentive Plan Compensation” column of this table. See footnote (3) below.
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(2) | The amounts listed in the column include a performance-based restricted stock equivalent grant awarded in November 2017 to the executive officers. The value of the performance-based award reflects the most probable outcome award value at the date of its grant in accordance with FASB ASC Section 718. The award was valued based on the grant date fair value of $44.20. Refer to Note 11, Share-Based Payments of the Notes to Consolidated Financial Statements on our Annual Report on Form10-K for the year ended September 30, 2018 for further discussion. The Company records estimated expense for the performance-based awards based on target achievement for the three-year period unless evidence exists that a different outcome is likely to occur. Following is the maximum award value, if paid, for the performance-based awards granted in November 2017, based on the grant date fair value, A. Hoskins—$5,600,052; T. Gorman—$1,190,041; M. LaVigne—$1,848,002; G. Kinder—$1,225,047; and E. Boss—$840,065. The grant date fair value of the performance-based awards included in the table is as follows:
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| | | | | Mr. Hoskins, $2,800,026
| | Mr. LaVigne, $924,001
| | Ms. Boss, $420,033
| Mr. Gorman, $595,020
| | Mr. Kinder, $612,524
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| 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:
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| | | | | Mr. Hoskins, $1,200,030
| | Mr. LaVigne, $396,032
| | Ms. Boss, $180,027
| Mr. Gorman $255,034
| | Mr. Kinder, $262,503
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(3) | The amounts reported in this column reflect bonuses earned by the NEOs during the fiscal year under the applicable annual cash bonus program, and the success incentive agreement entered into by Mr. Gorman and valued at $240,000 is included is in this amount.
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(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 “Pension Benefits Table”. To the extent that payments under the qualified retirement plan exceed limitations imposed by the IRS, the excess will be paid under the terms of thenon-qualified supplemental executive retirement plan.
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(5) | The amounts reported in this column with respect to fiscal 2018 consist of the following:
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| (i) | Company matching contributions in our 401(k) plan:
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| | | | | Mr. Hoskins, $16,693
| | Mr. LaVigne, $16,500
| | Ms. Boss, $16,500
| Mr. Gorman, $15,100
| | Mr. Kinder, $16,566
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| (ii) | Company matching contributions or accruals in our executive savings investment plan:
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| | | | | Mr. Hoskins, $141,802
| | Mr. LaVigne, $57,442
| | Ms. Boss, $32,857
| Mr. Gorman, $35,236
| | Mr. Kinder, $33,883
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| 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.
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| | | 36 Energizer Holdings, Inc. 2018 Proxy Statement
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Executive Compensation
EXECUTIVE COMPENSATION TABLE
| (ii) | The incremental cost to the Company of the following perquisites provided to the executive officers:
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| 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:
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| | | Mr. Hoskins, $6,000
| | Mr. LaVigne, $6,000
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| 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.
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| 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)2020 Proxy Statement 19 and are included in the grant date fair value for the restricted stock equivalent grants.
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EQUITY COMPENSATION PLAN INFORMATIONTABLE OF CONTENTS
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 Reflected in Column (1), 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) | The number of securities to be issued upon exercise of outstanding options, warrants and rights shown above, as of September 30, 2018, includes 1,314,052 restricted stock equivalents which have been granted under the terms of the Energizer Holdings, Inc. Equity Incentive Plan (including our former parent company stock awards reissued and converted into Energizer stock awards in connection with theSpin-Off). This number reflects target payout on performance awards. If the awards were to pay out at stretch, the number of securities to be issued upon issuance would be 1,888,647. As of November 16, 2018, of the outstanding stock equivalents granted, approximately 427,000 have vested and converted into outstanding shares of our common stock. An additional 318,000 restricted stock equivalents have been granted, including 190,000 performance shares granted at target payout. Of the aggregate, approximately 867,000 outstanding stock equivalents under our equity incentive plan (i) vest over varying periods of time following grant, and at that time, convert, on aone-for-one basis, into shares of common stock, or (ii) have already vested but conversion into shares of our common stock has been deferred, at the election of the recipient, until retirement or termination of employment. An additional 765,000 stock equivalents granted at target will vest only upon achievement of three-year performance measures.
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(2) | The weighted average exercise price does not take into account securities which will be issued upon conversion of outstanding restricted stock equivalents.
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(3) | This number only reflects securities available under the Equity Incentive Plan. Under the terms of that plan, any awards other than options, phantom stock options or stock appreciation rights are to be counted against the reserve available for issuance in a 2 to 1 ratio. This number reflects the target equivalents that could potentially be paid out. If payout numbers were at stretch, the number of shares available for issuance would be 2,965,142.
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| | Energizer Holdings, Inc. 2018 Proxy Statement 37
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AUDIT COMMITTEE MATTERS
Executive Compensation
EXECUTIVE COMPENSATION TABLE
GRANTS OF PLAN-BASED AWARDS
Awards to the NEOs, and to other key executives, were made in fiscal 2018 under two separate plans or programs:
• | | potential cash awards under our annual cash bonus program, dependent upon achievement of performance measures established at the beginning of the fiscal year, as described in more detail in “Compensation Discussion and Analysis—Annual Incentive Program”; and
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• | | three-year restricted stock equivalent awards under the terms of our equity incentive plan, which include a performance component and a time-vesting component, as described in more detail in “Long-Term Incentive Program”
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GRANTS OF PLAN-BASED AWARDS TABLE
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards ($) | | | Estimated Future Payouts Under Equity Incentive Plan Awards (#) | | | | | | | | | | | | | | Name | | Type of Award | | Grant Date | | | Threshold | | | Target | | | Maximum | | | Threshold | | | Target | | | Maximum | | | All Other Stock Awards: Number of Shares of Stock (#) | | | All Other Option Awards: Number of Shares Underlying Options (#) | | | Exercise or Base Price of Option Awards ($/Sh) | | | Grant Date Fair Value of Stock and Option Awards(4) | | A.R. Hoskins | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Bonus: Annl.Perf.(1) | | | 11/13/17 | | | $ | 575,000 | | | $ | 1,150,000 | | | $ | 2,300,000 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | Perf. Award(2) | | | 11/13/17 | | | | — | | | | — | | | | — | | | | 31,675 | | | | 63,349 | | | | 126,698 | | | | — | | | | — | | | | — | | | $ | 2,800,026 | | | | Perf. Awd.: Time Based(3) | | | 11/13/17 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 27,150 | | | | — | | | | — | | | $ | 1,200,030 | | | | | | | | | | | | | | | T.W. Gorman | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Bonus: Annl.Perf.(1) | | | 11/13/17 | | | $ | 195,000 | | | $ | 390,000 | | | $ | 780,000 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | Perf. Award(2) | | | 11/13/17 | | | | — | | | | — | | | | — | | | | 6,731 | | | | 13,462 | | | | 26,924 | | | | — | | | | — | | | | — | | | $ | 595,020 | | | | Perf. Awd: Time Based(3) | | | 11/13/17 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 5,770 | | | | — | | | | — | | | $ | 255,034 | | M.S. LaVigne | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Bonus: Annl.Perf.(1) | | | 11/13/17 | | | $ | 229,473 | | | $ | 458,946 | | | $ | 917,891 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | Perf. Award(2) | | | 11/13/17 | | | | — | | | | — | | | | — | | | | 10,453 | | | | 20,905 | | | | 41,810 | | | | — | | | | — | | | | — | | | $ | 924,001 | | | | Perf. Awd.: Time Based(3) | | | 11/13/17 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 8,960 | | | | — | | | | — | | | $ | 396,032 | | | | | | | | | | | | | | | G.T. Kinder | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Bonus: Annl.Perf.(1) | | | 11/13/17 | | | $ | 135,620 | | | $ | 271,240 | | | $ | 542,480 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | Perf. Award(2) | | | 11/13/17 | | | | — | | | | — | | | | — | | | | 6,929 | | | | 13,858 | | | | 27,716 | | | | — | | | | — | | | | — | | | $ | 612,524 | | | | Perf. Awd. Time Based(3) | | | 11/13/17 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 5,939 | | | | — | | | | — | | | $ | 262,504 | | | | | | | | | | | | | | | E.K. Boss | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Bonus: Annl.Perf.(1) | | | 11/13/17 | | | $ | 133,043 | | | $ | 266,086 | | | $ | 532,172 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | Perf. Award(2) | | | 11/13/17 | | | | — | | | | — | | | | — | | | | 4,752 | | | | 9,503 | | | | 19,006 | | | | — | | | | — | | | | — | | | $ | 420,033 | | | | Perf. Awd.: Time Based(3) | | | 11/13/17 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 4,073 | | | | — | | | | — | | | $ | 180,027 | |
(1) | These amounts represent the estimated possible payouts of annual cash awards for fiscal 2018 under our annual cash bonus program for each of our NEOs. The actual amounts earned under the annual cash bonus program for fiscal 2018 are disclosed in the “Summary Compensation Table” above as part of the column entitled “Non-Equity Incentive Plan Compensation”.
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(2) | Vesting of these restricted stock equivalents (the performance-linked component), awarded under the three-year performance awards, is subject to achievement ofpre-established performance criteria for cumulative earnings per share and cumulative free cash flow as a percentage of net sales over the three-year period commencing October 1, 2018, the beginning of our fiscal 2018. See “Annual Incentive Awards”.
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(3) | These restricted stock equivalents (the time-vesting component) will vest three years from the date of grant, if the executive officer remains employed with us at that time. The grant date fair value of the amount calculated in accordance with accounting guidance is included in the “Stock Awards” column of the “Summary Compensation Table”.
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(4) | These amounts represent the grant date fair value calculated in accordance with FASB ASC Section 718, excluding forfeiture assumptions. For the three-year performance awards, the value includes the grant date fair value of the awards computed in accordance with FASB ASC Section 718, applying the same valuation model and assumptions applied for financial reporting purposes, excluding forfeiture assumptions. These amounts may not correspond to the actual value realized by the NEOs. These amounts include awards granted at target. For the three-year time-vesting awards, these amounts represent the grant date fair value calculated in accordance with FASB ASC Section 718, excluding forfeiture assumptions. The value includes 100% of such awards, with no reduction for potential forfeiture.
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| | | 38 Energizer Holdings, Inc. 2018 Proxy Statement
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Executive Compensation
EXECUTIVE COMPENSATION TABLE
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
The following types of equity awards have been granted to the executive officers, and remain unvested as of September 30, 2018.
• | | Restricted stock equivalents, the vesting of which is subject to the achievement of performance-linked and time-vesting conditions over a three year period, as described in “Long-Term Incentive Awards”. Vesting of restricted stock equivalents will accelerate, however, upon death, disability and upon a change of control of the Company. A portion will also vest upon voluntary retirement if the awards have been held for at least twelve months and the officer is age 55 with at least 10 years of service, including service with our former parent prior toSpin-Off. Unvested restricted stock equivalent awards are included under “Stock Awards—Number of Shares or Units of Stock That Have Not Vested”, in the table below. The performance-based awards have similar terms and vest upon achievement of cumulative adjusted earnings per share and cumulative adjusted free cash flow as a percentage of sales goals. See “Incentive Award Program”.
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Specialone-time restricted stock equivalents granted by Energizer that will vest ratably on each of the five anniversaries from the date of grant. Vesting of all of the restricted stock equivalents will accelerate, however, upon death, disability and upon a change of control of the Company. A portion will also vest upon voluntary retirement if the awards have been held for at least twelve months and the officer is age 55 with at least 10 years of service and upon involuntary termination (other than for cause).
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| | Energizer Holdings, Inc. 2018 Proxy Statement 39
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Executive Compensation
EXECUTIVE COMPENSATION TABLE
The following table and footnotes set forth information regarding outstanding restricted stock equivalent awards, as of September 30, 2018 for the executive officers. The market value of shares that have not vested was determined by multiplying $58.65, the closing market price of the Company’s stock on the last trading day of fiscal 2018, by the number of shares.
| | | | | | | | | | | | | | | | | | | | | | | Stock Awards | | Name | | Grant Date (1)(2)(3)(4) | | | Number of Shares or Units of Stock That Have Not Vested (#) | | | Market Value of Shares or Units of Stock That Have Not Vested ($) | | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(5)(6) | | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | | | | | | | | A.R. Hoskins | | | 07/08/2015 | | | | 80,469 | | | $ | 4,719,507 | | | | — | | | | — | | | | | 11/16/2015 | | | | 28,924 | | | $ | 1,696,393 | | | | — | | | | — | | | | | 11/14/2016 | | | | 26,415 | | | $ | 1,549,240 | | | | 123,268 | | | $ | 7,229,668 | | | | | 11/13/2017 | | | | 27,150 | | | $ | 1,592,348 | | | | 126,698 | | | $ | 7,430,838 | | Total | | | | | | | 162,958 | | | $ | 9,557,488 | | | | 249,966 | | | $ | 14,660,506 | | | | | | | | T.W. Gorman | | | 07/08/2015 | | | | 5,588 | | | $ | 327,736 | | | | — | | | | — | | | | | 11/16/2015 | | | | 2,812 | | | $ | 164,924 | | | | — | | | | — | | | | | 11/14/2016 | | | | 1,882 | | | $ | 110,379 | | | | 8,782 | | | $ | 515,064 | | | | | 11/13/2017 | | | | 5,770 | | | $ | 338,411 | | | | 26,924 | | | $ | 1,579,093 | | Total | | | | | | | 16,052 | | | $ | 941,450 | | | | 35,706 | | | $ | 2,094,157 | | | | | | | | M.S. LaVigne | | | 07/08/2015 | | | | 33,026 | | | $ | 1,936,975 | | | | — | | | | — | | | | | 11/16/2015 | | | | 10,545 | | | $ | 618,464 | | | | — | | | | | | | | | 11/14/2016 | | | | 8,982 | | | $ | 526,794 | | | | 41,914 | | | $ | 2,458,256 | | | | | 11/13/2017 | | | | 8,960 | | | $ | 525,504 | | | | 41,810 | | | $ | 2,452,157 | | Total | | | | | | | 61,513 | | | $ | 3,607,737 | | | | 83,724 | | | $ | 4,910,413 | | | | | | | | G.T. Kinder | | | 07/08/2015 | | | | 11,176 | | | $ | 655,472 | | | | — | | | $ | — | | | | | 11/16/2015 | | | | 7,231 | | | $ | 424,098 | | | | — | | | | — | | | | | 11/14/2016 | | | | 6,159 | | | $ | 361,225 | | | | 28,742 | | | $ | 1,685,718 | | | | | 11/13/2017 | | | | 5,939 | | | $ | 348,322 | | | | 27,716 | | | $ | 1,625,543 | | Total | | | | | | | 30,505 | | | $ | 1,789,117 | | | | 56,458 | | | $ | 3,311,261 | | E.K. Boss | | | 07/08/2015 | | | | 11,176 | | | $ | 655,472 | | | | — | | | $ | — | | | | | 11/16/2015 | | | | 4,018 | | | $ | 235,656 | | | | — | | | | — | | | | | 11/14/2016 | | | | 3,525 | | | $ | 206,741 | | | | 16,448 | | | $ | 964,675 | | | | | 11/13/2017 | | | | 4,073 | | | $ | 238,881 | | | | 19,006 | | | $ | 1,114,702 | | Total | | | | | | | 22,792 | | | $ | 1,336,750 | | | | 35,454 | | | $ | 2,079,377 | |
(1) | Restricted stock equivalents granted 7/8/2015 vest ratably on each anniversary of the grant date for five (5) years.
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(2) | Restricted stock equivalents granted 11/16/2015 vested on 11/16/2018.
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(3) | Restricted stock equivalents granted 11/14/2016 vest on 11/14/2019.
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(4) | Restricted stock equivalents granted 11/13/2017 vest on 11/13/2020.
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(5) | Performance-based restricted stock equivalent awards each vest on the date the Company publicly releases earnings results for the third fiscal year of the performance period.
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(6) | The amount of the awards is based on payout, assuming results meet stretch performance level at the conclusion of the performance period.
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| | | 40 Energizer Holdings, Inc. 2018 Proxy Statement
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Executive Compensation
EXECUTIVE COMPENSATION TABLE
STOCK VESTED TABLE
| | | | | | | | | | | | | Stock Awards | Name | | Number of Shares Acquired on Vesting (1) | | Value Realized on Vesting ($) | | | | | | | | | | | | | | | A. R. Hoskins | | | | 175,211 | | | | $ | 10,486,152 | | | | | T. W. Gorman | | | | 15,918 | | | | $ | 948,175 | | | | | M.S. LaVigne | | | | 65,723 | | | | $ | 3,940,852 | | | | | G. T. Kinder | | | | 39,332 | | | | $ | 2,335,991 | | | | | E. K. Boss | | | | 24,336 | | | | $ | 1,456,476 | |
(1) | In fiscal 2018, 20% of the time-based restricted stock equivalents granted to each of the officers at the time of ourSpin-Off from our former parent company vested in accordance with the terms of the awards. On 9/30/2018, 200% of the performance restricted stock equivalent awards granted in fiscal 2016 vested in accordance with the terms of the amended and restated award agreements.
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PENSION BENEFITS TABLE
| | | | | | | | | | | | | | | | | | | | Name | | Plan Name | | Number of Years Credited Service (#) (1) | | Present Value of Accumulated Benefit ($) (2) | | Payments During Last Fiscal Year ($) | | | | | | | | | | | | A.R. Hoskins | | Energizer Retirement Plan | | | | 31 | | | | $ | 1,085,245 | | | $0 | | | | | Supplemental Executive Retirement Plan | | | | 30 | | | | $ | 1,287,161 | | | $0 | | | | | | | | | M.S. LaVigne | | Energizer Retirement Plan | | | | 4 | | | | $ | 83,446 | | | $0 | | | | | Supplemental Executive Retirement Plan | | | | 4 | | | | $ | 81,707 | | | $0 | | | | | | | | | G.T. Kinder | | Energizer Retirement Plan | | | | 0.5 | | | | $ | 27,514 | | | $0 | | | | | Supplemental Executive Retirement Plan | | | | 0.5 | | | | $ | 6,125 | | | $0 | | | | | | | | | E.K. Boss | | Energizer Retirement Plan | | | | 0.25 | | | | $ | 5,691 | | | $0 | | |
(1) | The number of years of credited service reflects years of actual service prior to the pension plan being frozen. For Mr. Hoskins 15 of the years shown were with Edgewell, our former parent company, and the remainder were with Ralston Purina Company, Edgewell’s former parent. In February of 2009, in order to reduce cash outlays and bolster the Company’s compliance with its debt covenants, the Human Capital Committee, on aone-time basis, suspended accrual of benefits for officers in the Supplemental Executive Retirement Plan for the calendar year, and in lieu of those and other benefits, Mr. Hoskins was granted a 2009 performance award.
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(2) | Based on age, benefits are available without reduction. Assumptions utilized in the valuations are set forth in “Note 11, Pension Plans” of the Notes to Consolidated Financial Statements of our Annual Report on Form10-K for year ended September 30, 2018.
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NON-QUALIFIED DEFERRED COMPENSATION
We have adopted several plans or arrangements that provide for the deferral of compensation on a basis that is nottax-qualified.
Deferred Compensation Plan — Under the terms of our deferred compensation plan, an unfunded,non-qualified plan that assumed the liabilities under our former parent’s plan in connection with theSpin-Off, prior to January 1, 2013, executives could elect to have up to 100% of their annual cash bonus deferred until their retirement or other termination of employment, or for a shorter, three-year period (at the executive’s election, in advance). All funds are invested in the Prime Rate fund, which credits account balances on a daily basis, at the prime rate quoted by The Wall Street Journal as of the first business day of the given
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| | Energizer Holdings, Inc. 2018 Proxy Statement 41
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Executive Compensation
EXECUTIVE COMPENSATION TABLE
quarter. For fiscal 2018, the rate credited under this fund ranged from 4.25% to 5.25%. Balances in the plan are vested and may be paid out in a lump sum in cash six months following termination, or in five-orten-year increments commencing the year following termination of employment, as previously elected by the participant.
Executive Savings Investment Plan — Under the terms of our executive savings investment plan, our excess 401(k) plan, amounts that would be contributed, either by an executive or by us on the executive’s behalf, to the 401(k) plan but for limitations imposed by the IRC, are credited to thenon-qualified executive savings investment plan. Under that plan, executives may elect to defer their contributions into any of the measurement fund options which track the performance of the Vanguard investment funds offered under our qualified savings investment plan. Deferrals and vested Company contributions may be transferred to different investment options at the executive’s discretion. Deferrals in the executive savings investment plan, adjusted for the net investment return, are paid out in a lump sum payment, or in five or ten annual installments, following retirement or other termination of employment, as previously elected by the participant.
NON-QUALIFIED DEFERRED COMPENSATION TABLE
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name | | Plan | | Executive Contributions in Last FY ($)(1) | | Registrant Contributions in Last FY ($)(2) | | Aggregate Earnings in Last FY ($)(3) | | Aggregate Withdrawals/ Distributions ($) | | Aggregate Balance at Last FYE ($)(4) | | | | | | | | | | | | | | | | | | | | A.R. Hoskins | | Def’d Comp. Plan | | | $ | 0 | | | | $ | 0 | | | | $ | 210,876 | | | | $ | 0 | | | | $ | 4,771,088 | | | | | | | | | | | Exec. S.I.P. | | | $ | 158,670 | | | | $ | 141,802 | | | | $ | 189,941 | | | | $ | 0 | | | | $ | 1,833,113 | | | | | | | | | | | Total | | | $ | 158,670 | | | | $ | 141,802 | | | | $ | 400,817 | | | | $ | 0 | | | | $ | 6,604,201 | | | | | | | | | T.W. Gorman | | Def’d Comp. Plan | | | $ | 0 | | | | $ | 0 | | | | $ | 0 | | | | $ | 0 | | | | $ | 0 | | | | | | | | | | | Exec. S.I.P. | | | $ | 50,336 | | | | $ | 35,236 | | | | $ | 16,797 | | | | $ | 0 | | | | $ | 259,305 | | | | | | | | | | | Total | | | $ | 50,336 | | | | $ | 35,236 | | | | $ | 16,797 | | | | $ | 0 | | | | $ | 259,305 | | | | | | | | | M.S. LaVigne | | Def’d Comp. Plan | | | $ | 0 | | | | $ | 0 | | | | $ | 24,795 | | | | $ | 0 | | | | $ | 560,994 | | | | | | | | | | | Exec. S.I.P. | | | $ | 74,025 | | | | $ | 57,442 | | | | $ | 156,608 | | | | $ | 0 | | | | $ | 1,448,575 | | | | | | | | | | | Total | | | $ | 74,025 | | | | $ | 57,442 | | | | $ | 181,403 | | | | $ | 0 | | | | $ | 2,009,569 | | | | | | | | | G.T. Kinder | | Def’d Comp. Plan | | | $ | 0 | | | | $ | 0 | | | | $ | 0 | | | | $ | 0 | | | | $ | 0 | | | | | | | | | | | Exec. S.I.P. | | | $ | 50,514 | | | | $ | 33,883 | | | | $ | 19,049 | | | | $ | 0 | | | | $ | 349,687 | | | | | | | | | | | Total | | | $ | 50,514 | | | | $ | 33,883 | | | | $ | 19,049 | | | | $ | 0 | | | | $ | 349,687 | | | | | | | | | E.K. Boss | | Def’d Comp. Plan | | | $ | 0 | | | | $ | 0 | | | | $ | 0 | | | | $ | 0 | | | | $ | 0 | | | | | | | | | | | Exec. S.I.P. | | | $ | 49,432 | | | | $ | 32,857 | | | | $ | 31,265 | | | | $ | 0 | | | | $ | 354,344 | | | | | | | | | | | Total | | | $ | 49,432 | | | | $ | 32,857 | | | | $ | 31,265 | | | | $ | 0 | | | | $ | 354,344 | |
(1) | The officer contributions to our executive savings investment plan during fiscal 2018 consist of deferrals of salary earned with respect to fiscal 2018.
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(2) | Contributions and accruals to our executive savings investment plan consist of Company contributions which would have otherwise been contributed to the 401(k) plan but for limitations imposed by the IRS. These amounts, in their entirety, are included in the All Other Compensation column of the “Summary Compensation Table”.
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(3) | Aggregate earnings/(losses) shown in this column consist of:
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| – | amounts credited to each executive under the investment options of each of the plans, reflecting actual earnings, including appreciation and depreciation, on investment funds offered under our qualified 401(k) plan with returns during fiscal 2018 ranging from-7.55% to 21.28%; and
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| – | in the case of the prime rate option of our deferred compensation plan, interest at the prime rate, quoted by the Wall Street Journal.
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(4) | Of the aggregate balances shown in this column with respect to the executive savings investment plan, the following amounts were previously reported as compensation in the “Summary Compensation Table” of our proxy statement for our 2018 Annual Shareholders’ Meeting:
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| | | 42 Energizer Holdings, Inc. 2018 Proxy Statement
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Executive Compensation
EXECUTIVE COMPENSATION TABLE
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
We have not entered into general employment agreements with any of our NEOs. We have adopted an executive severance plan providing for certain benefits in connection with a qualifying termination, as described below. We have also entered into change of control employment agreements with our NEOs and certain of our other key employees which provide for severance compensation, acceleration of vesting and a lump sum payout in lieu of a continuation of benefits upon qualified termination of employment following a change of control. Additionally, equity awards under our Equity Incentive Plan, including awards previously granted by our former parent company that have been converted into equity awards that relate to Energizer’s common stock, provide for acceleration of vesting of certain awards in the event of certain terminations of employment.
The information below reflects the value of acceleration or incremental compensation which each executive officer would receive upon the termination of his or her employment or upon a change in control. Because the value of awards and incremental compensation depend on several factors, actual amounts can only be determined at the time of the event.
The information is based on the following assumptions:
the event of termination (death, permanent disability, involuntary termination without cause, or voluntary termination), or a change of control of the Company, occurred on September 30, 2018, the last day of our fiscal year;
the market value of our common stock on that date was $58.65 (the actual closing price on September 28, 2018, the last trading day of the fiscal year); and
each of the executive officers were terminated on that date.
The information does not reflect benefits that are provided under our plans or arrangements that do not discriminate in favor of executive officers and are available generally to all salaried employees—such as amounts accrued under our 401(k) plan, accumulated and vested benefits under our retirement plans (including our pension restoration plan and executive savings investment plan), health, welfare and disability benefits, and accrued vacation pay. For amounts accrued under retirement plans, see“Pension Benefits Table”.
The information also does not include amounts under our deferred compensation plan or executive savings investment plan that would be paid, as described in the “Non-Qualified Deferred Compensation Table”, except to the extent that an executive officer is entitled to an accelerated benefit as a result of the termination.
Executive Severance Plan
On July 1, 2015, we adopted an executive severance plan which provides benefits to our senior executives, including each of the NEOs, in the event of a “qualifying termination” as defined in the plan, which means an involuntary termination without “cause” or a voluntary termination as a result of “good reason.” Post-termination benefits for the senior executives consist of:
A lump sum payment of one or two times his or her annual base salary at the time of the qualifying termination, which will be two times for Messrs. Hoskins, Gorman and LaVigne and one time for Mr. Kinder and Ms. Boss;
For Messrs. Hoskins, Gorman and LaVigne, apro-rata bonus payment based on the number of days during the bonus year the participant was employed and the amount of annual bonus which the participant would have received if he had remained employed, based on actual Company performance; and
outplacement services for up to 12 months for each of the NEOs.
The payment of benefits under the plan is conditioned upon the executive officer executing a general release in favor of the Company, as well as confidentiality,non-solicitation,non-disparagement andnon-competition obligations. In addition, no benefits will be paid to the extent duplicative of benefits under a change in control or similar agreement with the Company.
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| | Energizer Holdings, Inc. 2018 Proxy Statement 43
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Executive Compensation
EXECUTIVE COMPENSATION TABLE
Death, Disability or Termination of Employment (Other than Upon a Change of Control)
Upon an executive officer’s death, permanent disability, involuntary termination other than for cause (defined as termination for gross misconduct), and, in some cases, retirement, the following plans or programs provide for acceleration of certain awards. Awards are accelerated for retirement after attainment of age 55 with 10 years of service (including service with our former parent companies) if granted 12 or more months prior to retirement date. No awards are accelerated upon other voluntary termination or involuntary termination for cause. Performance awards vesting upon retirement are paid when results for the Performance Period are met.
| | | | | | | | | | | | | | Award | | Involuntary
Termination
| | Death
| | Disability
| | Retirement
After Age 55 with
10 years of service
| | | | | | Five-year restricted stock awards granted 7/8/15
| | Pro Rata Vesting | | Accelerated | | Accelerated | | Pro Rata Vesting | | | | | | Three-year restricted stock awards granted 11/16/15
| | Forfeited | | Accelerated | | Accelerated | | Pro Rata Vesting | | | | | | Three-year restricted stock awards granted 11/14/16
| | Forfeited | | Accelerated | | Accelerated | | Pro Rata Vesting | | | | | | Three-year performance awards granted 11/14/16
| | Forfeited | | Accelerated | | Pro Rata Vesting | | Pro Rata Vesting | | | | | | Three-year restricted stock award granted 11/13/17
| | Forfeited | | Accelerated | | Accelerated | | Pro Rata Vesting | | | | | | Three-year performance awards granted 11/13/17
| | Forfeited | | Accelerated | | Pro Rata Vesting | | Pro Rata Vesting |
Upon termination of employment for any reason, vested account balances in our deferred compensation plan are paid out in cash to the participant in either a lump sum, or over a five or ten year period, commencing six months from the date of termination as previously elected by the participant.
The value of awards which would be accelerated for our NEOs upon death, disability, involuntary termination or retirement as of September 30, 2018 is shown in the following chart. The value of accelerated restricted stock equivalents reflects a stock price of $58.65, the closing market price of the Company’s stock on September 30, 2018. Stock market changes since September 30, 2018 are not reflected in these valuations.
| | | | | | | | | | | | | | | | | | Restricted Stock Equivalent Awards Accelerated upon Termination Events* | | | | | | | Officer | | Death | | | Permanent Disability | | | Involuntary Termination other Than for Cause | | | Retirement Following Attainment of Age 55 with 10 Years of Service | | | | | | | A.R. Hoskins | | $ | 17,568,486 | | | | $13,581,608 | | | | $625,249 | | | | $5,792,595 | | | | | | | T.W. Gorman | | $ | 2,053,820 | | | | $ 1,398,074 | | | | $ 43,422 | | | | $0 | | | | | | | M.S. LaVigne | | $ | 6,315,547 | | | | $ 4,986,309 | | | | $256,612 | | | | $0 | | | | | | | G.T. Kinder | | $ | 3,576,938 | | | | $ 2,685,230 | | | | $ 86,841 | | | | $0 | | | | | | | E.K. Boss | | $ | 2,471,091 | | | | $ 1,895,473 | | | | $ 86,841 | | | | $0 | |
* | —The value of accelerated restricted stock equivalents in the chart above is calculated based on the number of stock equivalents that will vest in accordance with the termination provisions of the agreements valued at $58.65, the closing market price of the Company’s stock on September 30, 2018. This calculation differs from the calculation of accelerated vesting for purposes of Code Section 280G and 4999 as reported in the “Estimated Payments and Benefits” table below.
|
If an executive officer is terminated for one of the following events,
an involuntary termination of an employee’s employment without “cause”; or
a voluntary termination of employment by an employee as a result of “good reason”,
| | | 44 Energizer Holdings, Inc. 2018 Proxy Statement
| |
|
Executive Compensation
EXECUTIVE COMPENSATION TABLE
then the following payments will be made in accordance with the Executive Severance Plan:
| | | | | | | | | | | | | | | | Name
| | Lump Sum
Severance Payment
| | | | Outplacement
Services
| | | Pro-Rata Bonus Payment
| A.R. Hoskins
| | Two Times Base Salary | | | |
| Up to 12
months
|
| | Determined by multiplying the amount the executive officer would have received for the year of termination based upon actual Company performance by a fraction, the numerator is the days in the bonus year during which the executive officer was employed and the denominator is the days in the bonus year.
| T.W. Gorman
| | Two Times Base Salary | | | M.S. LaVigne
| | Two Times Base Salary | | | G.T. Kinder
| | One Times Base Salary | | | | NoPro-Rata Bonus Payment
| E.K. Boss
| | One Times Base Salary | | | | | | |
No benefit will be paid to an employee under the plan to the extent that benefits would otherwise be paid to the employee under the terms of a Change in Control Employment Agreement (or other similar agreement).
Change of Control of the Company
Our change of control employment agreements with each of the NEOs have terms of two or three years from July 1, 2015, subject to certain automatic renewal provisions. For Messrs. Hoskins and LaVigne, the term is three years. For Messrs. Gorman and Kinder and for Ms. Boss, the term is two years. The agreement provides that the executive officer will receive severance compensation in the event of certain termination events (as provided in the agreement), other than for cause, death or disability, or within specified periods following a change in control of the Company, as such terms are defined in the agreement.
Under the agreements, a change of control is generally defined as an acquisition of more than 50% of the total voting power of the Company, a person beneficially owning more than 20% of the total voting power of the Company, or an unapproved change in the majority of the Board.
Under the agreements, upon a change of control, each executive officer will receive a pro rata annual bonus for the portion of the year occurring prior to a change of control. If the executive officer is terminated under the termination events defined in the agreement within specified periods of the change of control, the severance compensation payable under the agreement consists of:
a payment equal to a multiple of the executive officer’s annual base salary and target bonus (defined as the most recent five year actual bonus percentages multiplied by the greater of base salary at either termination or change of control), which will be three times in the case of Messrs. Hoskins and LaVigne and two times in the case of Messrs. Gorman, Kinder and Ms. Boss;
a pro rata portion of the executive officer’s target annual bonus for the year of termination; and
alump-sum payment intended to assist with health and welfare benefits for a period of time post-termination.
Following termination of employment, each executive officer is bound by a one year covenant not to compete, a one yearnon-solicitation covenant, and a covenant of confidentiality. No severance payments under the agreements would be made in the event that an executive officer’s termination is voluntary (other than for good reason), is due to death, disability or normal retirement, or is for cause. Under the agreements, in the event that it is determined that a “golden parachute” excise tax is due under the Internal Revenue Code, we will reduce the aggregate amount of the payments payable to an amount such that no such excise tax will be paid if the resulting amount would be greater than theafter-tax amount if the payments were not so reduced.
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| | Energizer Holdings, Inc. 2018 Proxy Statement 45
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Executive Compensation
EXECUTIVE COMPENSATION TABLE
The agreements also provide that upon a change of control, outstanding equity awards held by each executive officer will accelerate and vest in accordance with the terms of the awards, even if the awards have a higher threshold for a “change of control”. Our equity awards generally define a “change of control” as an acquisition of 50% or more of the outstanding shares of our common stock. The terms of our outstanding equity awards vary as to the portion of the unvested award that will accelerate and vest upon a change of control, as indicated below:
| | | Award | | Vesting | | Five-year time based awards granted 7/8/15
| | 100% vest upon change of control
| | | Three-year time based awards granted 11/16/15
| | 100% vest upon change of control
| | | Three-year time based awards granted 11/14/16
| | 100% vest upon change of control
| | | Three-year performance awards granted 11/14/16
| | The greater of (i) the number of stock equivalents granted at target or (ii) the amount of target performance stock equivalents which would have vested had the performance period ended on the date the change of control occurs
| | | Three-year time based awards granted 11/13/17
| | 100% vest upon change of control
| | | Three-year performance awards granted 11/13/17
| | The greater of (i) the number of stock equivalents granted at target or (ii) the amount of target performance stock equivalents which would have vested had the performance period ended on the date the change of control occurs
|
Payments of cash would be made in a lump sum no sooner than six months following termination of employment.
Estimated Payments and Benefits
Based on the assumptions set out above, the following chart sets forth estimated payments to our NEOS upon termination following a change of control. If a change of control occurs but their employment is not terminated, the agreements provide a more limited value. The value of accelerated restricted stock equivalents and performance awards reflects a stock price of $58.65 (the closing price of our common stock on the last trading day of fiscal 2018). Stock market declines and vesting and forfeitures of unvested restricted stock equivalents since September 30, 2018 are not reflected in these valuations. Upon a change of control, retirement benefits under the executive savings investment plan vest to the extent not already vested.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name | | Cash Severance | | Retirement Benefits | | Restricted Stock Equivalent Awards | | Benefits | | Excise Tax Reduction | | Total | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | A.R. Hoskins | | | $ | 8,942,497 | | | | $ | 0 | | | | $ | 17,568,486 | | | | $ | 33,954 | | | | $ | 0 | | | | $ | 26,544,937 | | | | | | | | | T.W. Gorman | | | $ | 2,262,990 | | | | $ | 0 | | | | $ | 2,053,820 | | | | $ | 31,526 | | | | $ | 0 | | | | $ | 4,348,336 | | | | | | | | | M.S. LaVigne | | | $ | 4,226,526 | | | | $ | 0 | | | | $ | 6,315,547 | | | | $ | 31,900 | | | | ($ | 506,862 | )(1) | | | $ | 10,067,111 | | | | | | | | | G.T. Kinder | | | $ | 2,047,696 | | | | $ | 0 | | | | $ | 3,576,938 | | | | $ | 32,866 | | | | $ | 0 | | | | $ | 5,657,500 | | | | | | | | | E.K. Boss | | | $ | 1,988,299 | | | | $ | 0 | | | | $ | 2,471,091 | | | | $ | 20,359 | | | | ($ | 722,121 | )(1) | | | $ | 3,757,628 | |
(1) | Under Internal Revenue Code Section 280G, executive officer will incur an excise tax on portions of these payments if the parachute value of payments due upon certain events, including a termination of employment, exceeds a specified threshold in connection with a change in control. The Company determines whether a named executive officer is better off receiving the full payment due and paying the excise tax, or receiving a reduced payment that falls just below the excise tax threshold, which is referred to as a “best of net” provision. For this hypothetical payment as of September 30, 2018, it has been estimated that Mr. LaVigne and Ms. Boss would be better off receiving the reduced payouts. The other named executive officers are better off receiving the full payment and paying the excise tax.
|
| | | 46 Energizer Holdings, Inc. 2018 Proxy Statement
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|
Executive Compensation
HUMAN CAPITAL COMMITTEE REPORT
HUMAN CAPITAL COMMITTEE REPORT
The Human Capital Committee reviewed and discussed the Compensation Discussion and Analysis with management. Based on this review and discussion, the Human Capital Committee recommended to the Board that the Compensation Discussion and Analysis be included in the proxy statement and incorporated by reference into the Annual Report on Form10-K for the year ended September 30, 2018.
Submitted by the Human Capital Committee members of the Board:
James C. Johnson—Chairman
Bill G. Armstrong
Cynthia J. Brinkley
Kevin J. Hunt
Proposal 2: Approving Our Executive Compensation Program (an Advisory,Non-binding “Say on Pay” Resolution)
We are providing an advisory vote and seeking approval of our executive compensation for fiscal 2018. At our 2016 Annual Shareholders’ Meeting, a majority of shareholders voted to have a Say on Pay vote each year. As a result, we will conduct an advisory vote on executive compensation annually at least until the next shareholder advisory vote on the frequency of such votes.
Although the Say on Pay vote is advisory and is not binding on our Board, our Human Capital Committee takes into consideration the outcome of the vote when making future executive compensation decisions. At the 2018 Annual Shareholders’ Meeting, more than 97% of the votes cast favored our Say on Pay proposal. The Human Capital Committee considered this result and input from various stakeholders, and in light of the strong support, maintained a consistent overall approach for fiscal 2018.
Our Board believes that our current executive compensation program appropriately links compensation realized by our executive officers to our performance and properly aligns the interests of our executive officers with those of our shareholders. The details of this compensation for fiscal 2018, and the reasons we awarded it, are described in our Proxy Statement.
Our Board recommends a vote FOR approving our executive compensation (an advisory, nonbinding Say on Pay resolution).
| | |
| | Energizer Holdings, Inc. 2018 Proxy Statement 47
|
AUDIT COMMITTEEPRE-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 bepre-approved by the Audit Committee. The Chair of the Audit Committee has the authority topre-approve permitted services that require action between regular Audit Committee meetings; provided, he reports to the Audit Committee at the next regular meeting. Early in each fiscal year, the Audit Committee approves the list of planned audit andnon-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 specificpre-approval by the Audit Committee. As applicable, the Audit Committeepre-approved all fees and services paid by Energizer for fiscal 2018 and 2019.
AUDIT COMMITTEE REPORT
| | | | | | | The Audit Committee of the Company’s Board of Directors consists entirely ofnon-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 ended September 30, 2018, management of the Company has represented to the Committee that 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.
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| | | 48 Energizer Holdings, Inc. 2018 Proxy Statement
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|
Audit Committee Matters
AUDIT COMMITTEE REPORT
| | | | | | | 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 thenon-audit services provided by PwC were compatible with its independence. In fiscal 2018, 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, 2018 be included in the Company’s Annual Report on Form10-K for that year and has selected PwC as the Company’s independent registered public accountants for fiscal year 2019.
Submitted by the Audit Committee members of the Board:
Patrick J. Moore —Chairman
Bill G. Armstrong
John E. Klein
Nneka L. Rimmer
Robert V. Vitale
| | |
Proposal 3: Ratification of Appointment of Independent Auditor
Our Audit Committee, in accordance with authority granted in its charter as approved by the Board, appointed PwCPricewaterhouseCoopers LLP (“PwC”) as independent auditor for the current fiscal year. PwC has served as our independent auditor since ourSpin-Off from Edgewell Personal Care Company (“Edgewell”) and served as Edgewell’s independent auditor for every fiscal year since 2000. PwC has begun certain work related to the fiscal 20192021 audit, as approved by the Audit Committee. Information on independent auditor fees for the last two fiscal years is set forth below. The Board and the Audit Committee believe that the retention of PwC to serve as independent auditor is in the best interests of the Company and its shareholders. In making this determination, the Board and the Audit Committee considered a number of factors, including: Audit Committee members’ assessment of PwC’s performance Management’s assessment of PwC’s performance PwC’s independence and integrity PwC’s fees and the quality of services provided to the Company PwC’s global capabilities and knowledge of our global operations A representative of PwC is expected to be present at the 20192021 Annual Shareholders’ 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. 20 Energizer Holdings, Inc. 2020 Proxy Statement | |
TABLE OF CONTENTS
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
| PROPOSAL
2 | | | Ratification of Appointment of our Independent Registered Public Accounting Firm for Fiscal 2021 | | | ✔ The Board recommends a vote FOR this proposal. | | | | |
PwC’s aggregate fees for professional services rendered for fiscal 2019.2019 and 2020, as applicable, were: | | | |
| | Energizer Holdings, Inc. 2018 Proxy Statement 49
|
| Audit Fees | | | $6,696 | | | $6,007 | | | Audit-Related Fees | | | $13 | | | $22 | | | Tax Fees:
| | | | | | | | | Tax Compliance / Preparation | | | $3 | | | $0 | | | Other Tax Services | | | $226 | | | $158 | | | Total Tax Fees | | | $229 | | | $158 | | | All Other Fees | | | $0 | | | $0 | | | TOTAL FEES | | | $6,938 | | | $6,187 | |
Audit Committee Matters
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITOR
| | | | | | | | | | | | Fees Paid to PWC (in thousands) | | FY17 | | | FY18 | | | | | Audit Fees | | $ | 3,230 | | | $ | 3,605 | | | | | Audit-Related Fees | | $ | 49 | | | $ | 28 | | | | | Tax Fees: | | | | | | | | | | | | Tax Compliance/preparation | | $ | 93 | | | $ | 2 | | | | | Other Tax Services | | $ | 158 | | | $ | 184 | | | | | Total Tax Fees | | $ | 251 | | | $ | 186 | | | | | All Other Fees | | $ | 0 | | | $ | 0 | | | | | TOTAL FEES | | $ | 3,530 | | | $ | 3,819 | |
Services Provided bySERVICES PROVIDED BY PWC
The table above discloses fees paid to PwC during the last fiscal year for the following professional services:
Audit Fees: These are fees for professional services performed by PwC for the audit of our annual financial statements and review of financial statements included in our Form10-Q filings, and services that are normally provided in connection with statutory and regulatory filings or engagements.
Audit-Related Fees: These are fees for assurance and related services performed by PwC that are reasonably related to the performance of the audit or review of our financial statements.
Tax Fees: These are fees for professional services performed by PwC with respect to tax compliance, tax advice and tax planning. This includes preparation of original and amended tax returns for the Company and our consolidated subsidiaries; refund claims; payment planning; 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 Audit Committee. The Chair of the Audit Committee has the authority to pre-approve permitted services that require action between regular Audit Committee meetings; provided, he reports to the Audit Committee at the next regular meeting. Early in each fiscal year, the Audit 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 Audit Committee pre-approved all fees and services paid by Energizer for fiscal 2019 and fiscal 2020. | | | 50Energizer Holdings, Inc. 20182020 Proxy Statement
| | 21 |
Additional InformationTABLE OF CONTENTS | The Audit Committee of the Company’s Board of Directors consists entirely of five, non-employee directors that are independent, as defined under the NYSE listing standards, our Corporate Governance Principles, and applicable SEC rules and regulations. | | | | | | 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 Audit Committee’s responsibility is to monitor and oversee these processes. | | | | | | As part of its oversight of the Company’s financial statements, the Audit 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 ended September 30, 2020, management of the Company has represented to the Committee that the financial statements were prepared in accordance with generally accepted accounting principles. The Audit 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 the applicable requirements of 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 Audit 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 the applicable requirements of the PCAOB 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 2020, 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 Audit 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, 2020 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 2021. | | | | | | Submitted by the Audit Committee members of the Board: | | | | | | Robert V. Vitale — Chair
Bill G. Armstrong
Rebecca Frankiewicz
| | | John E. Klein
Nneka L. Rimmer | |
22 Energizer Holdings, Inc. 2020 Proxy Statement | |
TABLE OF CONTENTS | PROPOSAL
3 | | | Advisory Non-Binding Vote on Executive Compensation (Say on Pay) | | | ✔ The Board recommends a vote FOR this proposal. | | | | |
As approved by our shareholders in 2016, each year we seek the approval of our shareholders, in a non-binding, advisory vote, of our executive compensation. Although the vote is non-binding, our Human Capital Committee values the opinions of our shareholders and considers the results of the most recent Say on Pay vote in determining our executive compensation policies and making executive compensation decisions. At the 2020 Annual Shareholders’ Meeting, 99% of the votes were cast in favor of our Say on Pay proposal. The Human Capital Committee considered this result, as well as input from our ongoing shareholder engagement, and in light of the strong support, decided not to make any significant changes in our executive compensation program in fiscal 2020. See “Shareholder Engagement” section above. Our Board believes that the compensation of our executive officers is aligned with the Company’s performance and is a competitive advantage in attracting and retaining the executive talent necessary to drive our business forward and build sustainable value for our shareholders. We believe that our current executive compensation program properly aligns the interests of our executive officers with those of our shareholders. Accordingly, the Board recommends a vote FOR the adoption of the following advisory resolution, which will be presented at the Annual Meeting: RESOLVED, that the shareholders of the Company approve, on an advisory basis, the compensation of the named executive officers, as disclosed pursuant to the compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis, the compensation tables and the accompanying footnotes and narratives. | Energizer Holdings, Inc. 2020 Proxy Statement 23 |
TABLE OF CONTENTS Compensation Discussion & Analysis The following Compensation Discussion & Analysis describes the fiscal 2020 compensation program for our named executive officers (“NEOs”). For fiscal 2020, our NEOs were: Alan R. Hoskins
Chief Executive Officer(1)
Age: 59
Years at Energizer: 37 Mark S. LaVigne
President and Chief Operating Officer(2)
Age: 49
Years at Energizer: 10 Timothy W. Gorman
Executive Vice President and Chief Financial Officer
Age: 60
Years at Energizer: 6 Hannah H. Kim
Chief Legal Officer and Corporate Secretary
Age: 42
Years at Energizer: 2 John Drabik
Senior Vice President, Corporate Controller
Age: 48
Years at Energizer: 19 Our NEOs also include Gregory T. Kinder, our former Executive Vice President and Chief Supply Chain Officer, who retired in April 2020. (1)
| Mr. Hoskins will retire as CEO, effective January 1, 2021. See “Retirement Transition Agreements” below. |
(2)
| Mr. LaVigne will become CEO, effective January 1, 2021. |
24 Energizer Holdings, Inc. 2020 Proxy Statement | |
TABLE OF CONTENTS BUSINESS, STRATEGIC AND FINANCIAL PERFORMANCE We continued to use free cash flow to return cash to our shareholders 5 | | | $410M | | | ~5.7M | YEARS OF CONTINUED
ORGANIC REVENUE GROWTH(1) | | | RETURNED TO SHAREHOLDERS
THROUGH DIVIDEND PAYMENTS
SINCE SPIN-OFF | | | SHARES REPURCHASED
SINCE THE YEAR
OF THE SPIN-OFF |
| 1 | | | 2 | | | 3 | | | Lead with Innovation | | | Operate
with
Excellence | | | Drive Productivity Gains | | | We aim to lead with innovation supported by smart brand-building investments to drive long-term growth and consumer connections to our products | | | We aim to operate with excellence by focusing on and investing in core category fundamentals such as visibility, distribution and revenue management to drive growth in our brands and create value in our categories | | | We aim to drive incremental growth through our global distribution footprint and productivity gains to reduce costs and maximize efficiency to ensure we have adequate reinvestment in our business to deliver future growth | |
FISCAL 2020 PAY FOR PERFORMANCE HIGHLIGHTS (1)
| Non-GAAP reconciliation can be found in Appendix A. |
| Energizer Holdings, Inc. 2020 Proxy Statement 25 |
TABLE OF CONTENTS 2020 EXECUTIVE COMPENSATION HIGHLIGHTS | SHAREHOLDER APPROVAL OF OMNIBUS INCENTIVE PLAN | | | At our Annual Shareholders’ Meeting in January 2020, our shareholders approved the Energizer Holdings, Inc. Omnibus Incentive Plan, which includes double-trigger vesting of equity awards upon a change of control and involuntary termination of employment. | | | NO COVID-19 RELATED ADJUSTMENTS TO PERFORMANCE METRICS | | | We made no adjustments or restatements to our fiscal 2020 performance metrics to account for the impact of the COVID-19 global pandemic and the resulting economic downturn on our business. | | | EXERCISE OF NEGATIVE DISCRETION | | | In November 2020, the Human Capital Committee exercised negative discretion to reduce the final payout amounts to the NEOs under the Annual Incentive Plan for fiscal 2020. | |
RESPONSIVENESS TO 2020 SAY ON PAY VOTE We conduct shareholder engagement throughout the year and annually provide shareholders with an opportunity to cast a nonbinding, advisory Say on Pay vote. The overwhelming approval of our shareholders in the Say on Pay vote at our 2020 Annual Shareholders’ Meeting influenced our decision to maintain a consistent approach to our executive compensation program for fiscal 2020. The Human Capital Committee will continue to consider shareholder feedback and the outcome of Say on Pay vote results in making future compensation decisions. PAY FOR PERFORMANCE AND COMPENSATION PHILOSOPHY 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 Human Capital Committee, which is comprised entirely of independent directors, has primary responsibility for approving our compensation strategy and philosophy and the compensation programs applicable to our executive officers. | ✔ Pay for performance, with approximately 64.5% of our CEO’s total compensation performance-based and approximately 55% of our other NEOs’ total compensation performance-based
✔ Establish threshold, target and maximum awards under our annual and long-term incentive programs
✔ Use balanced performance metrics for annual and long-term incentive programs
✔ Use rigorous goal setting aligned to our externally disclosed annual and multi-year targets
✔ Have stock ownership requirements for our executive officers
✔ Limit perquisites to items that serve a reasonable business purpose
✔ Closely monitor risks associated with our compensation programs and individual compensation decisions
✔ Have a clawback policy for all incentive compensation earned by our executive officers
| | | ✘ Pay tax gross-ups on any compensation
✘ Allow speculative trading, hedging or pledging transactions by our colleagues
✘ Enter into employment agreements with our executive officers
✘ Provide executive officer severance payments and benefits under the Executive Serverance Plan exceeding 2x salary and annual incentive award
✘ Guarantee salary increases | |
26 Energizer Holdings, Inc. 2020 Proxy Statement | |
TABLE OF CONTENTS The Human Capital Committee allocates pay in a manner designed to place the Company’s performance at the forefront of our overall executive compensation program. Our focus on pay for performance is best demonstrated through the structure of our executive compensation program, where the majority of annual executive pay is at risk and subject to annual and long-term performance requirements. CEO COMPENSATION 64.5% OF COMPENSATION IS AT-RISK
|
OTHER NEO AVERAGE COMPENSATION 55% OF COMPENSATION IS AT-RISK
|
The following chart, prepared by our independent compensation consultant, shows the degree of alignment between the total realizable pay of our CEO and Energizer’s total shareholder return relative to our executive compensation peer group over the five-year period. Peer group companies are indicated by the blue diamonds in the chart. Companies that fall within the diagonal alignment zone are generally viewed as having pay and performance alignment. As illustrated below, our CEO’s realizable pay was aligned with Energizer’s performance. | Energizer Holdings, Inc. 2020 Proxy Statement 27 |
TABLE OF CONTENTS The philosophy underlying our executive compensation program is to pay compensation that is simple, aligned and balanced. Equally important, we view compensation practices as a way to communicate our goals and standards of conduct and performance, and to motivate and reward colleagues in relation to their achievements. Overall, the same principles that govern the compensation of all our salaried colleagues apply to the compensation of our executive officers. Within this framework, we observe the following, guiding principles: | SIMPLE | | | Compensation methods should be transparent, provide a clear link between performance metrics and Company strategy and minimize perquisites | | | • | | | 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 2020) | | | ALIGNED | | | The interests of our executive officers should be aligned with those of our shareholders | | | • | | | Provided approximately 59% of all executive officers’ total compensation as performance-based pay | | | • | | | Adopted a clawback policy, anti-hedging and pledging 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 | |
FISCAL 2020 PAY COMPONENTS Our fiscal 2020 pay components remained the same as fiscal 2019. | BASE SALARY | | | Determined based on job scope, experience, market comparable positions and operating results | | | Provides fixed income to attract and retain top talent | | | Semi-monthly cash payment
through fiscal 2020 | | | 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 2020 | | | LONG-TERM INCENTIVE PROGRAM | | | We use two programs to ensure a strong link between incentive compensation opportunities and longer-term objectives: | | | 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 and other benefit plans sponsored by the Company on the same terms and conditions applicable to all eligible colleagues | | | Provide retirement and other benefits to attract and retain top talent | | | In accordance with the terms of the plans | |
28 Energizer Holdings, Inc. 2020 Proxy Statement | |
TABLE OF CONTENTS | 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 2020, 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 used to determine payouts under the annual and long-term incentive programs | | | • | | | 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 | |
STOCK 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. Our Corporate Governance Principles require our NEOs to meet the stock ownership requirements presented below. During fiscal 2020, the Nominating and Governance Committee approved increasing the Chief Executive Officer’s stock ownership requirement from 5x to 6x base salary, to bring our requirement in line with the median requirement of our executive compensation peer group. | Chief Executive Officer | | | 6x base salary | | | All Other Executive Officers | | | 3x base salary | |
Newly appointed executive officers are required to retain at least fifty percent (50%) of restricted stock upon vesting 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, 2020, each of our executive officers complied with the requirements. HEDGING AND PLEDGING PROHIBITION Under our securities trading policy, directors, officers and all colleagues 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; 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 colleague by Energizer as part of the compensation of the colleagues or member of the Board of Directors; or (2) held, directly or indirectly, by the director, officer or colleague; purchasing Energizer securities on margin, pledging Energizer securities, or holding Energizer securities in margin accounts; engaging in “short-sales” of Energizer securities—i.e., selling Energizer stock not owned at the time of the sale; and 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 material non-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. | Energizer Holdings, Inc. 2020 Proxy Statement 29 |
TABLE OF CONTENTS 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 Human Capital Committee determines such executive officer’s misconduct was a significant contributing factor to the need for a restatement. HOW WE DETERMINE COMPENSATION PAY EVALUATION AND DECISION PROCESS Each year, the Human Capital Committee reviews our executive officers’ performance using a balanced and disciplined approach to determine their base salaries and variable compensation awards. The approach for fiscal 2020 included a full-year assessment of financial results and progress delivering on our three strategic priorities: Lead with Innovation, Operate with Excellence and Drive Productivity. The Human Capital Committee considers various factors that collectively indicate successful management of our business, including: Company performance, including financial and non-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 ROLE OF INDEPENDENT COMPENSATION CONSULTANT To help determine executive pay, the Human Capital Committee retains an independent compensation consultant, Mercer LLC, 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 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, (5) executive officer succession planning, and (6) other compensation-related matters as requested by the Human Capital Committee. The Human Capital Committee annually reviews the independence of Mercer LLC in light of SEC rules and NYSE Listed Company Rules regarding compensation consultant independence and has affirmatively concluded that Mercer has no conflicts of interest relating to its engagement by the Human Capital Committee. During fiscal 2020, the aggregate fees paid to Mercer LLC for services related to executive compensation were approximately $252,028. In fiscal 2020, Mercer LLC 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, benchmarking below the executive officer level and insurance. The aggregate fees paid for those other services in fiscal 2020 were approximately $1,283,133. The Human Capital Committee and the Board of Directors did not review or approve the other services provided to management by Mercer LLC 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 LLC that the reporting relationship and compensation of the Mercer LLC consultants who perform executive compensation consulting services for the Human Capital Committee are separate from, and are not determined by reference to, Mercer LLC’s or Marsh & McLennan’s other lines of business or their other work for us. A representative of Mercer LLC attends committee meetings and serves as a resource to the Human Capital Committee on executive and director compensation matters. Additionally, to encourage independent review and discussion of executive compensation, the committee meets with Mercer LLC in executive session. The Human Capital Committee also annually reviews the performance of Mercer LLC. 30 Energizer Holdings, Inc. 2020 Proxy Statement | |
TABLE OF CONTENTS Executive Compensation Peer Group 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 Similar number of employees Global company For fiscal 2020, based on these criteria and the advice of its independent compensation consultant, the Human Capital Committee determined that the 2019 peer group remained appropriate with the exception of removing Tupperware Brands Corporation due to its decline in market capitalization over the past several years. | The Clorox Company
Spectrum Brands Holdings, Inc.
Hasbro Inc.
Central Garden & Pet Co.
The Scotts Miracle-Gro Company | | | Church & Dwight Inc.
Revlon, Inc.
Helen of Troy Ltd. | | | Lancaster Colony Corporation
Hain Celestial Group, Inc.
Monster Beverage Corporation
Post Holdings, Inc. | |
Setting Total Compensation The Human Capital Committee targets total compensation near the 50th percentile of our peer group’s total compensation. The following table shows how we compared to our peer group companies based on revenue for the most recently reported fiscal year and number of employees. | 75th Percentile | | | $4,875 | | | 8,375 | | | 50th Percentile | | | $3,763 | | | 5,450 | | | 25th Percentile | | | $2,065 | | | 3,472 | |
| Energizer | | | $2,701 | | | 5,900* | |
*
| As of September 30, 2020. |
CEO Assessment, Compensation Process for Executive Officers and Annual Timeline CEO Assessment With respect to our Chief Executive Officer’s pay, the Human 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: | Analysis of the Chief Executive Officer’s performance with respect to performance goals approved by the Human Capital Committee, the effectiveness of his leadership, and his experience | | | Returns to shareholders | | | As provided by the independent compensation consultant | |
| Energizer Holdings, Inc. 2020 Proxy Statement 31 |
TABLE OF CONTENTS Compensation Process for Executive Officers For the other executive officers, the Chief Executive Officer makes recommendations to the 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 Human Capital Committee also obtains market data from its independent compensation consultant and then reviews, discusses, modifies, and approves these recommendations, as appropriate. Annual Timeline The diagram below summarizes the Human Capital Committee’s annual process for setting executive pay. | • 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 | | • 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 | | • Quarterly review of CEO performance assessment
• Quarterly update on Annual and Long-Term Incentive Program metrics and performance
• Executive Compensation peer group analysis | |
| PRIMARY ELEMENTS OF OUR EXECUTIVE COMPENSATION PROGRAM | | | • Base Salary | | | • Annual Incentive Program | | | • Long-Term Incentive Program | | | — Performance Share Awards | | | — Time-Based Restricted Share Awards | | | • Retirement and Other Benefits | |
The Human Capital Committee believes these pay components align the interests of our executives with those of 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 the median of our peer group) and individual position and performance. The general guideline for determining salary levels for our executive officers, including the Chief Executive Officer, is to target the 50th percentile of our executive compensation peer group, adjusted for other factors such as individual performance and responsibilities. While we are cognizant of the competitive range, our primary goal is to compensate our executive officers at a level that is consistent with our compensation philosophy, even if this results in actual pay for some positions that may be higher or lower than the market median. The Human Capital Committee considers adjustments to base salaries for the executive officers on an annual basis. For fiscal 2020, the Human Capital Committee felt that an increase to the base salaries of our executive officers in line with the increases provided to our colleagues generally was reasonable in light of the Company’s operating results in fiscal 2020. To remain competitive with the market, the Human Capital Committee also considered the effect of the increased salaries for our executive officers in relation to the median of our peer group. 32 Energizer Holdings, Inc. 2020 Proxy Statement | |
TABLE OF CONTENTS The table below sets forth the base salaries for our NEOs. The base salary adjustments for fiscal 2020 were effective December 1, 2019. | | | | 2019 | | | 2020 | | | Increase (%) | | | A.R. Hoskins | | | $1,030,000 | | | $1,060,900 | | | 3% | | | M.S. LaVigne | | | $590,892 | | | $684,050 | | | 16% | | | T.W. Gorman | | | $561,600 | | | $578,448 | | | 3% | | | H.H. Kim | | | $252,105 | | | $400,000 | | | 59% | | | J.J. Drabik | | | $314,987 | | | $340,000 | | | 8% | | | G.T. Kinder | | | $465,629 | | | $479,598 | | | 3% | |
During fiscal 2020, the Human Capital Committee increased Mr. LaVigne’s salary due to his promotion to President and Chief Operating Officer and increased Ms. Kim’s salary due to her promotion to Chief Legal Officer and Corporate Secretary and to remain competitive with market median data for both positions. The overall design of our fiscal 2020 annual incentive program was the same as the fiscal 2019 program. The annual incentive program is based on performance against certain metrics determined by the Human Capital Committee. Our fiscal 2020 annual incentive award was designed to measure performance against the four, equally weighted metrics set forth in the table below (dollars in millions): | Adjusted Net
Sales | | | Net Sales measures revenue and encourages development of consumer-relevant innovation and in-store execution to drive product sales | | | 25% | | | $2,597 | | | $2,734 | | | $2,871 | | | $2,750 | | | 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% | | | 17.7% | | | 16.7% | | | 15.7% | | | 16.3% | | | Adjusted Operating Profit | | | Operating profit measures underlying business profit and encourages selling products, generating strong gross margins and maintaining tight cost controls | | | 25% | | | $434 | | | $482 | | | $530 | | | $438 | | | 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% | | | $302 | | | $335 | | | $369 | | | $405 | |
Adjustments to the actual achievement metrics vary from reported figures to address the impacts of currency. Our performance target-setting philosophy is consistent with prior years, with performance goals or targets tied to our annual business plan for the fiscal year and aligned with our long-term strategic plan. The performance goals for each metric are set at the beginning of the fiscal year. Each metric for the annual incentive plan reflects adjustments to financial data derived from our financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and intended to exclude certain items that the Human Capital Committee believes are not reflective of the Company’s ongoing operating performance. These items include acquisition and integration costs, unusual or nonrecurring non-cash accounting impacts, and variations in the exchange rate between foreign currencies and budget exchange rates. | Energizer Holdings, Inc. 2020 Proxy Statement 33 |
TABLE OF CONTENTS The Human Capital Committee believes these performance metrics more accurately reflect Energizer’s underlying financial and operating results. For a reconciliation of these non-GAAP components to the most comparable GAAP components, see “Reconciliation of Non-GAAP Financial Measures” set forth in Appendix A. Our Human Capital Committee also reserves the right to exercise negative discretion to reduce the payout for our executive officers below what would otherwise have been earned or paid solely through application of the achievement of the four performance metrics. Bonuses increase proportionately in 1/10th of 1% increments corresponding to final results between the established goals indicated with a maximum bonus at the Stretch goal. 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. Each executive officer was assigned individual bonus targets based on individual performance and market practice information provided by the independent compensation consultant. For fiscal 2020, the following bonus targets, defined as a percentage of the individual’s base pay, were assigned as follows: | A.R. Hoskins | | | 115% | | | M.S. LaVigne | | | 80% | | | T.W. Gorman | | | 75% | | | H.H. Kim | | | 60% | | | J.J. Drabik | | | 60% | | | G.T. Kinder | | | 60% | |
COVID-19-related Annual Incentive Plan ADJUSTMENTS in Fiscal 2020 During fiscal 2020, the Committee considered, but decided not to make any, adjustments to the performance metrics under the Annual Incentive Plan to account for the impact of increased expenses that the Company incurred in response to the COVID-19 pandemic to prioritize the health and safety of our colleagues and our business continuity. In November 2020, the Human Capital Committee exercised negative discretion to reduce the final payout amounts to the NEOs under the Annual Incentive Plan for fiscal 2020. Specifically, the Committee decreased the percentage payout from 125% of the bonus target, which would otherwise have been paid out based on the actual achievement of the bonus metrics in fiscal 2020, to 100% of the bonus target for each of the NEOs. The Committee reached its decision after considering a number of factors, including the impact on the Company’s business of the COVID-19 pandemic, which resulted in higher than anticipated costs and in fourth quarter earnings per share and Adjusted EBITDA that were lower than previously provided guidance, despite strong organic sales growth under challenging global economic conditions and the generation of adjusted free cash flow significantly higher than the Stretch goal. The Committee took into account the impact of such reductions in the amount of equity awards granted to the executive officers for fiscal 2021 and determined that it was appropriate that the ultimate opportunity for payout of such reductions be provided as a risk based opportunity based on both the achievement of long-term Company performance goals and continued employment with the Company, as described below. Long-Term Incentive Program At our 2020 Annual Shareholders’ Meeting, shareholders approved the Omnibus Incentive Plan, which replaced and superseded the 2015 Energizer Holdings, Inc. Equity Incentive Plan (the “2015 Plan”). The terms of the 2015 Plan will continue to govern all awards granted under that plan, and no further grants of equity awards have been or will be made under that plan. Our Omnibus Incentive Plan authorizes the Human Capital Committee to grant various types of equity awards. Consistent with prior years, the Human Capital Committee grants to key executives restricted stock unit 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 “Potential Payments Upon Termination or Change of Control”. In November 2019, the Human Capital Committee awarded three-year incentive awards with a performance-based component constituting approximately 70% of the restricted stock equivalents vesting at target achievement and a time-based component constituting approximately 30% of the award value at target of the award. 34 Energizer Holdings, Inc. 2020 Proxy Statement | |
TABLE OF CONTENTS Timing and Procedures for Grants in Fiscal 2020 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 (calendar quarter ending December 31), when the Human Capital Committee determines salary levels and bonus programs for the new fiscal year. The size of equity awards granted in November 2019 for our executive officers was based on several factors, including officers’ individual performance, current dilution rates, market run-rate for equity grants among our peer group, and benchmark data from our peer group provided by our independent compensation consultant. Time-Based Restricted Stock Units The number of restricted stock equivalents awarded in November 2019 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 executive officer is shown in the “Grants of Plan-Based Awards Table”. Long-Term Performance Awards In November 2019, the Human Capital Committee granted long-term equity incentive awards to our executive officers. These awards potentially vest in November 2022 based on the achievement of the two performance metrics set forth in the table below. | 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% | | | Cumulative
Adjusted Free
Cash Flow | | | Measures free cash flow relative to net sales, encouraging a sustained focus on maximizing cash flow over the long term | | | 50% | |
Similar to performance metrics under the Annual Incentive Program, the Human Capital Committee adopted performance metrics that use non-GAAP financial measures, which exclude certain items that the Human Capital Committee believes are not reflective of the Company’s ongoing operating performance. The Human Capital Committee believes these performance metrics more accurately reflect Energizer’s underlying financial and operating results. See Appendix A for a description and reconciliation of the non-GAAP financial measures. 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 payout is capped at 200% for Company performance at, or above, Stretch performance. Long-Term Shareholder Value Over the past three years, we believe we have provided significant value to our shareholders. The results we achieved for our shareholders are consistent with the results obtained under our incentive plans. Similarly, the performance measures associated with the long-term performance incentive awards that were granted in November 2017 were measured over a three-year vesting period and were tied to cumulative adjusted earnings per share and cumulative adjusted free cash flow as a percentage of adjusted net sales. Based on the Company’s results over the three-year performance period ending September 30, 2020, these November 2017 long-term performance incentive awards paid out at 133% of target in November 2020. | Cumulative
Adjusted
Earnings per Share | | | 50% | | | $8.14 | | | $9.04 | | | $9.94 | | | $8.68 | | | $8.42 | | | 66% | | | Cumulative
Adjusted Free
Cash Flow | | | 50% | | | 9.5% | | | 10.5% | | | 11.5% | | | 12.8% | | | 12.6% | | | 200% | | | Total | | | | | | | | | | | | | | | | | | | | | 133% | |
*
| The Human Capital Committee exercised negative discretion to address the impact of The Tax Cuts and Jobs Act. |
| Energizer Holdings, Inc. 2020 Proxy Statement 35 |
TABLE OF CONTENTS 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 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 the non-qualified defined contribution executive savings investment plan. Details of the executive savings investment plan, including the contributions, earnings, and year-end balances, are set forth in the “Non-Qualified Deferred Compensation Table.” In fiscal 2017, we adopted an amendment to the Executive Savings Investment Plan, aligning this plan with 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 practice, facilitates ease in integrating plans in the event of a merger or acquisition, and reduces compliance requirements. Deferred Compensation Plan Our colleagues do not have the opportunity to defer portions of their salary and bonus compensation under the terms of our deferred compensation plan, 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 before the Spin-Off had their account balances under our former parent company’s deferred compensation plan transferred to our deferred compensation plan. Only Mr. Hoskins and Mr. LaVigne have benefits under the terms of our deferred compensation plan. Details of the deferred compensation program, including the earnings, and year-end balances, are set forth in the “Non-Qualified Deferred Compensation Table”. Energizer established a new retirement plan that acquired the assets and assumed the liabilities of our former parent’s plans in connection with the Spin-Off. Prior to January 1, 2014, our former parent company’s retirement plan covered essentially all U.S. colleagues of Energizer after they became eligible. Pension benefits are provided under a tax qualified defined benefit plan (the “Energizer Holdings, Inc. Retirement 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. Mr. Hoskins, Mr. LaVigne, Mr. Drabik and Mr. Kinder have pension benefits. Details of pension benefits under the Supplemental Executive Retirement Plan are set forth in the “Pension Benefits Table,” including the accompanying narrative. The plans were frozen as of December 31, 2013, which is the end of the first quarter of our former parent company’s fiscal 2014 and future retirement service benefits are no longer accrued under this retirement program. The freeze includes both the qualified and non-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 the 30-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 were frozen as of the end of calendar year 2009: Pension Equity Plan (“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 an after-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 and Mr. Drabik. 36 Energizer Holdings, Inc. 2020 Proxy Statement | |
TABLE OF CONTENTS We offer a limited number of perquisites for our executive officers. The only perquisite is 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 the executive is employed by the Company 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 Human Capital Committee’s evaluation of the retentive value of these benefits. Severance and Other Benefits Following a Change of Control We have not entered into employment agreements with our executives. However, the Human Capital Committee approved an executive severance plan and change of control agreements for each of our executive officers, as discussed under “Potential Payments upon Termination or Change of Control” to align with the market practice of using pre-defined termination programs for NEOs. The change of control agreements are designed to provide executives with increased security in the event of a change of control. The Human Capital Committee annually reviews the cost and terms of the agreements with input provided by Mercer LLC. 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: the protections are common among companies of our size, and allow us to offer a competitive compensation package; the costs will be triggered only if the new controlling entity involuntarily terminates the impacted executives, or the executives resign for good reason, during the protected period; the agreements include non-compete and non-solicitation covenants binding on the executives, which can provide significant considerations to completion of a potential transaction; and the individuals who have agreements are carefully selected by the Board of Directors, and we believe these executives 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 a transaction. We do not permit tax gross-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 2020 and all of the NEOs were terminated on that date, is provided under “Potential Payments upon Termination or Change of Control”. Retirement Transition Agreements Gregory T. Kinder On February 26, 2020, the Company and Mr. Kinder entered into a Retirement Transition Agreement (the “Kinder Transition Agreement”). The Kinder Transition Agreement provided for certain modified compensation and benefits to Mr. Kinder in lieu of what would have been payable under the executive severance plan in connection with Mr. Kinder’s orderly transition of his knowledge, duties and responsibilities prior to his retirement. The Kinder Transition Agreement, among other things, provided for: Mr. Kinder’s retirement effective as of April 30, 2020; Mr. Kinder received his FY20 base salary and benefits through his retirement date; A pro rata cash transition bonus payable on or about November 30, 2020 which is calculated based on a 60% target bonus and using the same methodology under the terms of the Annual Incentive Plan, if, and to the extent that the performance goals are achieved under the terms of the Plan; A pro rata portion of his 2017, 2018 and 2019 performance restricted stock equivalent awards, to the extent the performance goals are achieved at the end of the relevant performance period; Mr. Kinder’s 2017, 2018 and 2019 time-based restricted stock equivalent awards will continue to vest and become payable under the terms of his award agreements as though Mr. Kinder had remained employed with the Company through the applicable vesting periods; and | Energizer Holdings, Inc. 2020 Proxy Statement 37 |
TABLE OF CONTENTS Mr. Kinder’s Spin-Off restricted stock equivalent awards that were scheduled to vest on July 8, 2020 fully vested and became payable on July 8, 2020. Dividend equivalents will continue to accrue and are payable upon vesting of the pro rata portions of the performance-based awards and the time-based restricted stock equivalent awards granted to Mr. Kinder. The Kinder Transition Agreement contains customary confidentiality, cooperation, non-competition, non-solicitation and non-disparagement provisions as well as an Affirmation Agreement releasing all claims between the Company and Mr. Kinder. In addition, Mr. Kinder’s Change of Control Employment Agreement, dated July 1, 2015, terminated effective April 30, 2020. Alan R. Hoskins On November 20, 2020, the Human Capital Committee of the Board approved, and the Company entered into, a Retirement Transition Agreement (the “Hoskins Retirement Agreement”), as well as a grant to Mr. Hoskins of restricted stock units having a grant-date value of $350,000, in connection with Mr. Hoskins’ retirement as the Company’s CEO in support of a successful CEO transition, which will occur on January 1, 2021, and service as special advisor to the Company during the Transition Period (defined below). The Hoskins Retirement Agreement, among other things, provides for the following: Mr. Hoskins will remain employed by the Company as a Special Advisor to support the leadership transition by providing advice, guidance and assistance during the period beginning on January 1, 2021 through September 30, 2021 (or a date determined in accordance with the terms of the Hoskins Retirement Agreement) (the “Retirement Date”), this period is referred to as the “Transition Period”, and he will continue to receive his base salary during the Transition Period; The November 2020 equity award consists of 70% performance-linked RSUs and 30% time-based RSUs; All of Mr. Hoskins’ unvested time-based restricted stock equivalents (under the 2015 Plan) and RSUs (under the Omnibus Incentive Plan) will remain outstanding during the Transition Period and following his retirement and will vest according to their original vesting dates; All of Mr. Hoskins’ unvested performance-linked restricted stock equivalents (granted under the 2015 Plan) and RSUs (granted under the Omnibus Incentive Plan) will remain outstanding during the Transition Period and following his retirement and will vest according to the Company’s financial results for applicable periods and subject to certain additional conditions; Mr. Hoskins will not participate in the Executive Officer Bonus Plan during fiscal year 2021; however, he will be eligible to receive a transitional cash bonus equal to 115% of his base salary for fiscal year 2020, which is equivalent to the target annual bonus that would have been payable under the terms of the Annual Incentive Plan had Mr. Hoskins been a participant for fiscal year 2021; If the Company terminates Mr. Hoskins’ services without cause prior to September 30, 2021, he will remain entitled to the same bonus payment and vesting of the time-based and performance-linked RSUs that he would have received if he had continued to serve as Special Advisor until his Retirement Date; and Mr. Hoskins’ Change of Control Employment Agreement dated July 1, 2015, will continue through the Retirement Date, and will be terminated as of the Retirement Date, provided he is not entitled to duplicate payments or benefits under such agreement and the Hoskins Retirement Agreement. Dividend equivalents will continue to accrue and are payable upon vesting of the performance-based awards and the time-based restricted stock equivalent and RSU awards granted to Mr. Hoskins. The Hoskins Retirement Agreement also contains customary confidentiality, cooperation and non-disparagement provisions, which are perpetual, and non-competition and non-solicitation provisions, which expire on September 30, 2024 (or the date falling three years after the end of the Transition Period, whichever is sooner), as well as a mutual release of claims between the Company and Mr. Hoskins. 38 Energizer Holdings, Inc. 2020 Proxy Statement | |
TABLE OF CONTENTS HUMAN CAPITAL COMMITTEE REPORT | The Human Capital Committee reviewed and discussed the Compensation Discussion and Analysis with management. Based on this review and discussion, the Human Capital Committee recommended to the Board that the Compensation Discussion and Analysis be included in the proxy statement and incorporated by reference into the Annual Report on Form 10-K for the year ended September 30, 2020. | | | | | | Submitted by the Human Capital Committee members of the Board: | | | | | | Cynthia J. Brinkley — Chair
Bill G. Armstrong
Rebecca C. Frankiewicz
Kevin J. Hunt
Nneka L. Rimmer | |
| Energizer Holdings, Inc. 2020 Proxy Statement 39 |
TABLE OF CONTENTS EXECUTIVE COMPENSATION TABLES SUMMARY COMPENSATION TABLE | Alan R. Hoskins
Chief Executive Officer
| | | 2020 | | | $1,055,750 | | | $0 | | | $4,243,626 | | | $0 | | | $1,214,111 | | | $50,564 | | | $154,762 | | | $6,718,813 | | | 2019 | | | $1,025,000 | | | $0 | | | $4,120,076 | | | $0 | | | $1,439,530 | | | $72,162 | | | $158,150 | | | $6,814,918 | | | 2018 | | | $994,167 | | | $0 | | | $4,000,056 | | | $0 | | | $1,510,837 | | | $65,680 | | | $164,495 | | | $6,735,235 | | | Mark S. LaVigne
President and Chief Operating Officer
| | | 2020 | | | $674,170 | | | $0 | | | $1,770,074 | | | $0 | | | $538,893 | | | $3,609 | | | $76,728 | | | $3,063,474 | | | 2019 | | | $588,024 | | | $0 | | | $1,320,077 | | | $0 | | | $574,492 | | | $5,023 | | | $77,494 | | | $2,565,110 | | | 2018 | | | $570,897 | | | $0 | | | $1,320,033 | | | $0 | | | $603,545 | | | $4,549 | | | $79,942 | | | $2,578,966 | | | Timothy W. Gorman
Chief Financial Officer
| | | 2020 | | | $575,640 | | | $0 | | | $1,000,049 | | | $0 | | | $431,730 | | | $0 | | | $63,029 | | | $2,070,448 | | | 2019 | | | $554,667 | | | $0 | | | $1,000,090 | | | $0 | | | $508,024 | | | $0 | | | $76,837 | | | $2,139,618 | | | 2018 | | | $520,000 | | | $0 | | | $850,054 | | | $0 | | | $755,385 | | | $0 | | | $50,336 | | | $2,175,775 | | | Hannah H. Kim
Chief Legal Officer and Corporate Secretary
| | | 2020 | | | $384,314 | | | $0 | | | $520,045 | | | $0 | | | $230,062 | | | $0 | | | $16,134 | | | $1,150,555 | | | John J. Drabik
Senior Vice President, Corporate Controller
| | | 2020 | | | $337,253 | | | $0 | | | $400,055 | | | $0 | | | $202,259 | | | $4,593 | | | $32,372 | | | $976,532 | | | Gregory T. Kinder
Former Chief Supply Chain Officer
| | | 2020 | | | $290,349 | | | $0 | | | $875,059 | | | $0 | | | $167,859 | | | $735 | | | $42,632 | | | $1,376,634 | | | 2019 | | | $463,369 | | | $0 | | | $875,011 | | | $0 | | | $339,529 | | | $1,023 | | | $61,204 | | | $1,740,136 | | | 2018 | | | $449,873 | | | $0 | | | $875,027 | | | $0 | | | $356,699 | | | $926 | | | $50,449 | | | $1,732,974 | |
(1)
| The amounts listed in the column for fiscal 2020 include a performance-based restricted stock equivalent grant awarded in November 2019 to the executive officers. The value of the performance-based award reflects the most probable outcome award value at the date of its grant in accordance with FASB ASC Topic 718. The award was valued based on the grant date fair value of $43.10. Refer to Note 8, Share-Based Payments of the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended September 30, 2020 for further discussion. The Company records estimated expense for the performance-based awards based on target achievement for the three-year period unless evidence exists that a different outcome is likely to occur. Following is the maximum award value, if paid, for the performance-based awards granted in November 2019, based on the grant date fair value, A. Hoskins—$5,941,076; M. LaVigne—$2,478,078; T. Gorman—$1,400,060; H. Kim —$728,045, J. Drabik—$560,041, and G. Kinder—$1,225,074. The grant date fair value of the performance-based awards included in the table is as follows: |
| Mr. Hoskins, $2,970,538 | | | Mr. Gorman, $700,030 | | | Mr. Drabik, $280,021 | | | Mr. LaVigne, $1,239,039 | | | Ms. Kim, $364,023 | | | Mr. Kinder, $612,537 | |
The amounts listed in the column for fiscal 2020 also include time-based restricted stock equivalent awards granted by the Human Capital Committee in November 2019 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, $1,273,088 | | | Mr. Gorman, $300,019 | | | Mr. Drabik, $120,034 | | | Mr. LaVigne, $531,035 | | | Ms. Kim, $156,022 | | | Mr. Kinder, $262,522 | |
(2)
| The amounts reported in this column reflect annual incentive awards earned by the NEOs during the fiscal year under the applicable annual incentive plan. |
(3)
| 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 “Pension Benefits Table”. To the extent that payments under the qualified retirement plan exceed limitations imposed by the IRS, the excess will be paid under the terms of the non-qualified supplemental executive retirement plan. |
(4)
| The amounts reported in this column with respect to fiscal 2020 consist of the following: |
(i)
| Company matching contributions in our 401(k) plan: |
| Mr. Hoskins, $17,236 | | | Mr. Gorman, $15,567 | | | Mr. Drabik, $17,166 | | | Mr. LaVigne, $16,800 | | | Ms. Kim, $16,134 | | | Mr. Kinder, $10,431 | |
(ii)
| Company matching contributions in our executive savings investment plan: |
| Mr. Hoskins, $131,526 | | | Mr. Gorman, $47,462 | | | Mr. Drabik, $13,707 | | | Mr. LaVigne, $53,928 | | | Ms. Kim, $0 | | | Mr. Kinder, $32,201 | |
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. 40 Energizer Holdings, Inc. 2020 Proxy Statement | |
TABLE OF CONTENTS (iii)
| The incremental cost to the Company of the following perquisites provided to the executive officers: |
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 2020, the following reimbursement payments were made: | Mr. Hoskins, $6,000 | | | Mr. Drabik, $1,499 | | | 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 colleagues of the Company, review requests for contributions to charitable organizations from colleagues, 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. colleagues. Under this program, the foundation matches 100% of charitable donations of a minimum of $25 made to eligible charities, up to a maximum of $5,000 per year for each individual. Dividend Equivalent Payments 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 the Spin-Off) and are included in the grant date fair value for the restricted stock equivalent grants. GRANTS OF PLAN-BASED AWARDS Awards to the NEOs, and to other key executives, were made in fiscal 2020 under two separate plans or programs: cash awards under our annual cash incentive program, with payouts determined based on achievement of performance measures established at the beginning of the fiscal year, as described in more detail in “Compensation Discussion & Analysis – Elements of Compensation – Annual Incentive Program”; and three-year restricted stock equivalent awards under the terms of our 2015 Plan, which include a performance component and a time-vesting component, as described in more detail in “Compensation Discussion & Analysis – Elements of Compensation – Long-Term Incentive Program”. | Energizer Holdings, Inc. 2020 Proxy Statement 41 |
TABLE OF CONTENTS GRANTS OF PLAN-BASED AWARDS TABLE | A.R. Hoskins | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Bonus: Annl.Perf.(1) | | | 11/11/19 | | | $607,056 | | | $1,214,111 | | | $2,428,222 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Perf. Award(2) | | | 11/11/19 | | | — | | | — | | | — | | | 34,461 | | | 68,922 | | | 137,844 | | | — | | | — | | | — | | | $2,970,538 | | | Perf.Awd.:Time Based(3) | | | 11/11/19 | | | — | | | — | | | — | | | — | | | — | | | — | | | 29,538 | | | — | | | — | | | $1,273,088 | | | M.S. LaVigne | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Bonus: Annl.Perf.(1) | | | 11/11/19 | | | $269,447 | | | $538,893 | | | $1,077,786 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Perf. Award(2) | | | 11/11/19 | | | — | | | — | | | — | | | 14,374 | | | 28,748 | | | 57,496 | | | — | | | — | | | — | | | $1,239,039 | | | Perf. Awd:Time Based(3) | | | 11/11/19 | | | — | | | — | | | — | | | — | | | — | | | — | | | 12,321 | | | — | | | — | | | $531,035 | | | T.W. Gorman | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Bonus: Annl.Perf.(1) | | | 11/11/19 | | | $215,865 | | | $431,730 | | | $863,460 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Perf. Award(2) | | | 11/11/19 | | | — | | | — | | | — | | | 8,121 | | | 16,242 | | | 32,484 | | | — | | | — | | | — | | | $700,030 | | | Perf. Awd:Time Based(3) | | | 11/11/19 | | | — | | | — | | | — | | | — | | | — | | | — | | | 6,961 | | | — | | | — | | | $300,019 | | | H.H. Kim | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Bonus: Annl.Perf.(1) | | | 11/11/19 | | | $115,031 | | | $230,062 | | | $460,124 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Perf. Award(2) | | | 11/11/19 | | | — | | | — | | | — | | | 4,223 | | | 8,446 | | | 16,892 | | | — | | | — | | | — | | | $364,023 | | | Perf. Awd:Time Based(3) | | | 11/12/18 | | | — | | | — | | | — | | | — | | | — | | | — | | | 3,620 | | | — | | | — | | | $156,022 | | | J.J. Drabik | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Bonus: Annl.Perf.(1) | | | 11/11/19 | | | $101,130 | | | $202,259 | | | $404,518 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Perf. Award(2) | | | 11/11/19 | | | — | | | — | | | — | | | 3,249 | | | 6,497 | | | 12,994 | | | — | | | — | | | — | | | $280,021 | | | Perf. Awd:Time Based(3) | | | 11/11/19 | | | — | | | — | | | — | | | — | | | — | | | — | | | 2,785 | | | — | | | — | | | $120,034 | | | G.T, Kinder | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Bonus: Annl.Perf.(1) | | | 11/11/19 | | | $83,930 | | | $167,859 | | | $335,718 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Perf. Award(2)(4) | | | 11/11/19 | | | — | | | — | | | — | | | 7,106 | | | 14,212 | | | 28,424 | | | — | | | — | | | — | | | $612,537 | | | Perf. Awd:Time Based(3)(5) | | | 11/11/19 | | | — | | | — | | | — | | | — | | | — | | | — | | | 6,091 | | | — | | | — | | | $262,522 | |
(1)
| These amounts represent the estimated possible payouts of annual cash awards for fiscal 2020 under our annual cash incentive program for each of our NEOs. The actual amounts earned under the annual cash bonus program for fiscal 2020 are disclosed in the “Summary Compensation Table” above as part of the column entitled “Non-Equity Incentive Plan Compensation”. |
(2)
| Vesting of these restricted stock equivalents (the performance-linked component), awarded under the three-year performance awards, is subject to achievement of pre-established performance criteria for cumulative adjusted earnings per share and cumulative adjusted free cash flow as a percentage of net sales over the three-year period commencing October 1, 2019, the beginning of our fiscal 2020. See “Compensation Discussion & Analysis – Elements of Compensation – Long-Term Incentive Program”. |
(3)
| These restricted stock equivalents (the time-vesting component) will vest three years from the date of grant, if the executive officer remains employed with us at that time. The grant date fair value of the amount calculated in accordance with accounting guidance is included in the “Stock Awards” column of the “Summary Compensation Table”. |
(4)
| In accordance with the Kinder Transition Agreement, Mr. Kinder is entitled to a pro rata portion of his performance-based restricted stock equivalent awards, to the extent the performance goals are achieved at the end of the relevant performance period. Such pro rata estimated future payouts (in number of shares) are 1,185 (Threshold), 2,369 (Target) and 4,738 (Maximum). See “Compensation Discussion & Analysis – Elements of Compensation – Retirement Transition Agreements,” above. |
(5)
| Mr. Kinder’s time-based restricted stock equivalent awards will continue to vest and become payable under the terms of his award agreements as though Mr. Kinder had remained employed with the Company through the applicable vesting periods, in accordance with the Kinder Transition Agreement. See “Compensation Discussion & Analysis – Elements of Compensation – Retirement Transition Agreements,” above. |
(6)
| These amounts represent the grant date fair value calculated in accordance with FASB ASC Topic 718, excluding forfeiture assumptions. For the three-year performance awards, the value includes the grant date fair value of the awards computed in accordance with FASB ASC Topic 718, applying the same valuation model and assumptions applied for financial reporting purposes, excluding forfeiture assumptions. These amounts may not correspond to the actual value realized by the NEOs. These amounts include awards granted at target. For the three-year time-vesting awards, these amounts represent the grant date fair value calculated in accordance with FASB ASC Topic 718, excluding forfeiture assumptions. The value includes 100% of such awards, with no reduction for potential forfeiture. |
For further discussion regarding the fiscal year 2020 grants under our annual incentive program see “Annual Incentive Program” and for further discussion regarding the timing and procedures for the fiscal year 2020 grants of performance-based and time-based long-term incentive awards, See “Compensation Discussion & Analysis – Elements of Compensation – Long-Term Incentive Program.” 42 Energizer Holdings, Inc. 2020 Proxy Statement | |
TABLE OF CONTENTS OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END The following table and footnotes set forth information regarding outstanding, unvested equity awards of our NEOs as of September 30, 2020. All of such awards are in the form of restricted stock equivalents, the vesting of which is, for performance-based awards, subject to the achievement of cumulative financial metrics over a three-year period, and, for time-based awards, generally over a three-year period, subject to acceleration of vesting in certain limited circumstances as contemplated under our equity incentive plans. See “Compensation Discussion & Analysis – Elements of Compensation – Long-Term Incentive Program.” OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END TABLE | A.R. Hoskins | | | 11/13/2017 | | | 27,150 | | | $1,062,651 | | | 84,255 | | | $3,297,741 | | | 11/12/2018 | | | 20,515 | | | $802,957 | | | 47,868 | | | $1,873,554 | | | 11/11/2019 | | | 29,538 | | | $1,156,117 | | | 34,461 | | | $1,348,804 | | | Total | | | | | | 77,203 | | | $3,021,725 | | | 166,584 | | | $6,520,099 | | | M.S. LaVigne | | | 11/13/2017 | | | 8,960 | | | $350,694 | | | 27,804 | | | $1,088,249 | | | 11/12/2018 | | | 6,573 | | | $257,267 | | | 15,337 | | | $600,290 | | | 11/11/2019 | | | 12,321 | | | $482,244 | | | 14,374 | | | $562,598 | | | Total | | | | | | 27,854 | | | $1,090,205 | | | 57,515 | | | $2,251,137 | | | T.W. Gorman | | | 11/13/2017 | | | 5,770 | | | $225,838 | | | 17,905 | | | $700,802 | | | 11/12/2018 | | | 4,980 | | | $194,917 | | | 11,619 | | | $454,768 | | | 11/11/2019 | | | 6,961 | | | $272,454 | | | 8,121 | | | $317,856 | | | Total | | | | | | 17,711 | | | $693,209 | | | 37,645 | | | $1,473,426 | | | H.H. Kim | | | 06/25/2018 | | | 1,008(7) | | | $39,453 | | | — | | | $— | | | 11/12/2018 | | | 778(7) | | | $30,451 | | | 1,038 | | | $40,627 | | | 11/11/2019 | | | 3,620 | | | $141,687 | | | 4,223 | | | $165,288 | | | Total | | | | | | 5,406 | | | $211,591 | | | 5,261 | | | $205,915 | | | J.J. Drabik | | | 11/13/2017 | | | 1,697 | | | $66,421 | | | 5,267 | | | $206,150 | | | 11/12/2018 | | | 1,245 | | | $48,729 | | | 2,905 | | | $113,702 | | | 11/11/2019 | | | 2,785 | | | $109,005 | | | 3,249 | | | $127,166 | | | Total | | | | | | 5,727 | | | $224,155 | | | 11,421 | | | $447,018 | | | G.T. Kinder | | | 11/13/2017 | | | 5,939 | | | $232,452 | | | 15,873 | | | $621,269 | | | 11/12/2018 | | | 4,357 | | | $170,533 | | | 5,083 | | | $198,949 | | | 11/11/2019 | | | 6,091 | | | $238,402 | | | 1,185 | | | $46,381 | | | Total | | | | | | 16,387 | | | $641,387 | | | 22,141 | | | $866,599 | |
(1)
| Restricted stock equivalents granted on 11/13/2017 vested on 11/13/2020. |
(2)
| Restricted stock equivalents granted on 11/12/2018 vest on 11/12/2021. |
(3)
| Restricted stock equivalents granted on 11/11/2019 vest on 11/11/2022. |
(4)
| Performance-based restricted stock equivalent awards each vest on the date the Human Capital Committee certifies the results of the third fiscal year of the performance period for the respective award. |
(5)
| The market value of awards that have not vested was determined by multiplying $39.14, the closing market price per share of the Company’s stock on September 30, 2020, by the number of restricted stock equivalents. |
(6)
| Performance-based restricted stock equivalent awards granted on 11/13/2017 vested on November 16, 2020, the date the Human Capital Committee certified the results of fiscal 2020, the last period of the performance period for such awards, at 133\%. Performance-based restricted stock equivalent awards granted on 11/12/2018 and 11/11/2019 reflect the number of share equivalents calculated based on achieving performance goals at the target level and threshold level, respectively. |
(7)
| Represent time-based restricted stock equivalents that vest ratably each year over a four-year period. |
| Energizer Holdings, Inc. 2020 Proxy Statement 43 |
TABLE OF CONTENTS STOCK VESTED DURING FISCAL YEAR 2020 The following table sets forth information on restricted stock units and performance restricted stock units that vested during fiscal year 2020 for the NEOs. STOCK VESTED TABLE | A. R. Hoskins | | | 189,917 | | | $9,179,109 | | | M.S. LaVigne | | | 67,409 | | | $3,257,114 | | | T. W. Gorman | | | 13,458 | | | $650,478 | | | H.H. Kim | | | 765 | | | $34,509 | | | J.J. Drabik | | | 14,001 | | | $677,341 | | | G.T. Kinder | | | 40,489 | | | $1,958,145 | |
(1)
| In fiscal 2020, 20% of the time-based restricted stock equivalents granted to each of the officers at the time of our Spin-Off from our former parent company vested in accordance with the terms of the awards. The number of equivalents that vested for each executive officer at a market price of $48.01 is as follows: Mr. Hoskins, 40,234; Mr. LaVigne, 16,513; Mr. Gorman, 2,794; Mr. Drabik, 1,397; and Mr. Kinder, 5,588. |
(2)
| On June 25, 2020, 25% of the time-based restricted stock equivalent award granted on June 25, 2018 to Ms. Kim vested. A total of 505 equivalents vested at a market price of $46.71. |
(3)
| On November 12, 2019, 25% of the time-based restricted stock equivalent award granted on November 12, 2018 to Ms. Kim vested. A total of 260 equivalents vested at a market price of $42.00. |
(4)
| On November 13, 2019, 200% of the performance-based restricted stock equivalent awards granted in fiscal 2017 vested in accordance with the terms of the award agreements. The number of equivalents that vested for each executive officer at a market price of $48.38 is as follows: Mr. Hoskins, 123,268; Mr. LaVigne, 41,914, Mr. Gorman, 8,782; Mr. Drabik, 10,380; and Mr. Kinder, 28,742. |
(5)
| On November 14, 2019, 100% of the time-based restricted stock equivalent awards granted in fiscal 2017 vested in accordance with the terms of the award agreements. The number of equivalents that vested for each executive officer at a market price of $48.60 is as follows: Mr. Hoskins, 26,415; Mr. LaVigne, 8,982, Mr. Gorman, 1,882; Mr. Drabik, 2,224; and Mr. Kinder, 6,159. |
44 Energizer Holdings, Inc. 2020 Proxy Statement | |
TABLE OF CONTENTS PENSION BENEFITS The following table provides the present value of accumulated benefits in the Company’s pension plans in which the NEO’s participate. The table also includes years of credited service and any payments made during the fiscal year. PENSION BENEFITS TABLE | A.R. Hoskins | | | Energizer Retirement Plan | | | 31 | | | $1,140,699 | | | $0 | | | Supplemental Executive Retirement Plan | | | 30 | | | $1,354,433 | | | $0 | | | M.S. LaVigne | | | Energizer Retirement Plan | | | 4 | | | $87,807 | | | $0 | | | Supplemental Executive Retirement Plan | | | 4 | | | $85,978 | | | $0 | | | T.W. Gorman | | | Energizer Retirement Plan | | | — | | | — | | | — | | | Supplemental Executive Retirement Plan | | | — | | | — | | | — | | | H.H. Kim | | | Energizer Retirement Plan | | | — | | | — | | | — | | | Supplemental Executive Retirement Plan | | | — | | | — | | | — | | | J.J. Drabik | | | Energizer Retirement Plan | | | 8 | | | $214,811 | | | $0 | | | Supplemental Executive Retirement Plan | | | 4 | | | $6,432 | | | $0 | | | G.T. Kinder | | | Energizer Retirement Plan | | | .5 | | | $28,952 | | | $0 | | | Supplemental Executive Retirement Plan | | | .5 | | | $6,445 | | | $0 | |
(1)
| The Energizer Retirement Plan is frozen. It includes several benefit formulas applicable at different periods, as explained in the detailed narrative. One formula was the Retirement Accumulation Account, a cash balance benefit effective from January 1, 2010 through December 31, 2013 when the entire plan was frozen. This applies to all four executives. Two prior formulas, the Pension Equity Plan and the PensionPlus Match Account, were frozen as of December 31, 2009. Mr. Hoskins’ and Mr. Drabik benefit values also includes these two additional formulas. The Supplemental Executive Retirement Plan was also frozen as of December 31, 2013. The plan provided benefits based on the same formulas as the Energizer Retirement Plan (with the exception of the PensionPlus Match Account) but reflected compensation above the maximum compensation limit. Mr. Gorman and Ms. Kim are not eligible to participate in either the Energizer Retirement Plan or the Supplemental Executive Retirement Plan. |
(2)
| The number of years of credited service shown for each executive reflects years of actual service prior to the pension plan being frozen, which are less than each executive’s actual years of service with the Company. For Mr. Hoskins 15 of the years shown were with Edgewell, our former parent company, and the remainder were with Ralston Purina Company, Edgewell’s former parent. Mr. Hoskins’ service in the Supplemental Executive Retirement Plan is less than his years under the Energizer Retirement Plan due to a one-time action by the Human Capital Committee in February of 2009. In order to reduce cash outlays and bolster the Company’s compliance with its debt covenants, accrual of benefits for officers in the Supplemental Executive Retirement Plan were suspended for the calendar year, and in lieu of those and other benefits, Mr. Hoskins was granted a 2009 performance award. |
(3)
| For Mr. Drabik, 3 years of service credited in the Energizer Retirement Plan were with Edgewell, our former parent company. |
(4)
| The value of benefits shown equal the account balances under the plans and benefit formulas in which the named executive officer participates. The account balances grow with a monthly interest credit based on the 30-year Treasury rate reset annually. The value is available on termination without reduction. Assumptions used in the valuations are set forth in “Note 14, Pension Plans” of the Notes to Consolidated Financial Statements of our Annual Report on Form 10-K for year ended September 30, 2020. |
| Energizer Holdings, Inc. 2020 Proxy Statement 45 |
TABLE OF CONTENTS NON-QUALIFIED DEFERRED COMPENSATION PLANS We have adopted several plans or arrangements that provide for the deferral of compensation on a basis that is not tax-qualified. Under the terms of our deferred compensation plan, an unfunded, non-qualified plan that assumed the liabilities under our former parent’s plan in connection with the Spin-Off, prior to January 1, 2013, executives could elect to have up to 100% of their annual cash incentive award deferred until their retirement or other termination of employment, or for a shorter, three-year period (at the executive’s election, in advance). All funds are invested in the Prime Rate fund, which credits account balances on a daily basis, at the prime rate quoted by The Wall Street Journal as of the first business day of the given quarter. For fiscal 2020, the rate credited under this fund ranged from 3.25% to 5%. Balances in the plan are vested and may be paid out in a lump sum in cash six months following termination, or in five-or 10-year increments commencing the year following termination of employment, as previously elected by the participant. Under the terms of our executive savings investment plan, our excess 401(k) plan, amounts that would be contributed, either by an executive or by us on the executive’s behalf, to the 401(k) plan but for limitations imposed by the IRC, are credited to the non-qualified executive savings investment plan. Under that plan, executives may elect to defer their contributions into any of the measurement fund options which track the performance of the Vanguard investment funds offered under our qualified savings investment plan. Deferrals and vested Company contributions may be transferred to different investment options at the executive’s discretion. Deferrals in the executive savings investment plan, adjusted for the net investment return, are paid out in a lump sum payment, or in five or 10 annual installments, following retirement or other termination of employment, as previously elected by the participant. NON-QUALIFIED DEFERRED COMPENSATION TABLE | A.R. Hoskins | | | Def’d Comp. Plan | | | $0 | | | $0 | | | $204,116 | | | $0 | | | $5,234,607 | | | Exec. S.I.P. | | | $139,108 | | | $131,526 | | | $221,218 | | | $0 | | | $2,596,847 | | | | | | Total | | | $139,108 | | | $131,526 | | | $425,334 | | | $0 | | | $7,831,454 | | | M.S. LaVigne | | | Def’d Comp. Plan | | | $0 | | | $0 | | | $24,001 | | | $0 | | | $615,496 | | | Exec. S.I.P. | | | $74,920 | | | $53,928 | | | $226,636 | | | $0 | | | $1,898,477 | | | | | | Total | | | $74,920 | | | $53,928 | | | $250,637 | | | $0 | | | $2,513,973 | | | T.W. Gorman | | | Def’d Comp. Plan | | | $0 | | | $0 | | | $0 | | | $0 | | | $0 | | | Exec. S.I.P. | | | $65,020 | | | $47,462 | | | $22,917 | | | $0 | | | $508,875 | | | | | | Total | | | $65,020 | | | $47,462 | | | $22,917 | | | $0 | | | $508,875 | | | H.H. Kim | | | Def’d Comp. Plan | | | $0 | | | $0 | | | $0 | | | $0 | | | $0 | | | Exec. S.I.P. | | | $18,000 | | | $0 | | | $1,269 | | | $0 | | | $19,269 | | | | | | Total | | | $18,000 | | | $0 | | | $1,269 | | | $0 | | | $19,269 | | | J.J. Drabik | | | Def’d Comp. Plan | | | $0 | | | $0 | | | $0 | | | $0 | | | $0 | | | Exec. S.I.P. | | | $31,672 | | | $13,707 | | | $22,511 | | | $0 | | | $339,474 | | | | | | Total | | | $31,672 | | | $13,707 | | | $22,511 | | | $0 | | | $339,474 | | | G.T. Kinder | | | Def’d Comp. Plan | | | $0 | | | $0 | | | $0 | | | $0 | | | $0 | | | Exec. S.I.P. | | | $37,793 | | | $32,201 | | | $46,317 | | | $0 | | | $562,115 | | | | | | Total | | | $37,793 | | | $32,201 | | | $46,317 | | | $0 | | | $562,115 | |
(1)
| The officer contributions to our executive savings investment plan during fiscal 2020 consist of deferrals of salary earned with respect to fiscal 2020. |
(2)
| Contributions to our executive savings investment plan consist of Company contributions which would have otherwise been contributed to the 401(k) plan but for limitations imposed by the IRS. These amounts, in their entirety, are included in the All Other Compensation column of the “Summary Compensation Table”. |
46 Energizer Holdings, Inc. 2020 Proxy Statement | |
TABLE OF CONTENTS (3)
| Aggregate earnings/(losses) shown in this column consist of: |
–
| amounts credited to each executive under the investment options of each of the plans, reflecting actual earnings, including appreciation and depreciation, on investment funds offered under our qualified 401(k) plan with returns during fiscal 2020 ranging from -12.36% to 49.32%; and |
–
| in the case of the prime rate option of our deferred compensation plan, interest at the prime rate, quoted by the Wall Street Journal ranging from 3.25% to 5%. |
(4)
| Of the aggregate balances shown in this column with respect to the executive savings investment plan, the following amounts were previously reported as compensation in the “Summary Compensation Table” of our proxy statement for our 2020 Annual Shareholders’ Meeting: |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL We have not entered into general employment agreements with any of our NEOs, and the only agreements that we have entered into with our NEOs are the Retirement Transition Agreements with Mr. Kinder and Mr. Hoskins. See “Retirement Transition Agreements” above. We have adopted an executive severance plan providing for certain benefits in connection with a qualifying termination, as described below. We have also entered into change of control employment agreements with our NEOs and certain of our other key employees which provide for severance compensation, acceleration of vesting and a lump sum payout in lieu of a continuation of benefits upon qualified termination of employment following a change of control. Additionally, equity awards under our 2015 Plan and our Omnibus Incentive Plan provide for acceleration of vesting of certain awards in the event of certain terminations of employment. The information below reflects the value of acceleration or incremental compensation which each executive officer would receive upon the termination of his or her employment or upon a change of control. Because the value of awards and incremental compensation depend on several factors, actual amounts can be determined only at the time of the event. The information is based on the following assumptions: the event of termination (death, permanent disability, involuntary termination without cause, or voluntary termination), or a change of control of the Company, occurred on September 30, 2020, the last day of our fiscal year; the closing price of our common stock on the last trading day of the fiscal year was $39.14; and each of the NEOs, other than Mr. Kinder, was terminated on that date. The information does not reflect benefits that are provided under our plans or arrangements that do not discriminate in favor of executive officers and are available generally to all salaried colleagues—such as amounts accrued under our 401(k) plan, accumulated and vested benefits under our retirement plans (including our pension restoration plan and executive savings investment plan), health, welfare and disability benefits, and accrued vacation pay. For amounts accrued under retirement plans, see “Pension Benefits Table”. The information also does not include amounts under our deferred compensation plan or executive savings investment plan that would be paid, as described in the “Non-Qualified Deferred Compensation Table”, except to the extent that an executive officer is entitled to an accelerated benefit as a result of the termination. Executive Severance Plan On July 1, 2015, we adopted an executive severance plan which provides benefits to our senior executives, including each of the NEOs, in the event of a “qualifying termination” as defined in the plan, which means an involuntary termination without “cause” or a voluntary termination as a result of “good reason.” Post-termination benefits for the senior executives consist of: A lump sum payment of one or two times his or her annual base salary at the time of the qualifying termination, which will be two times for Messrs. Hoskins, Gorman and LaVigne and one time for Ms. Kim and Mr. Drabik; For all NEOs, a pro-rata bonus payment based on the number of days during the bonus year the participant was employed and the amount of annual bonus which the participant would have received if he had remained employed, based on actual Company performance; and Outplacement services for up to 12 months for each of the NEOs. | Energizer Holdings, Inc. 2020 Proxy Statement 47 |
TABLE OF CONTENTS The payment of benefits under the plan is conditioned upon the executive officer executing a general release in favor of the Company, as well as confidentiality, non-solicitation, non-disparagement and non-competition obligations as set forth in the release. In addition, no benefits will be paid to the extent duplicative of benefits under a change of control or similar agreement with the Company. If an executive officer is terminated for one of the following events, an involuntary termination of an employee’s employment without “cause”; or a voluntary termination of employment by an employee as a result of “good reason”, then the following payments will be made in accordance with the Executive Severance Plan: | M.S. LaVigne | | | 2x Base Salary | | | Up to 12
months | | | Determined by multiplying the amount the executive officer would have received for the year of termination based upon actual Company performance by a fraction, the numerator is the days in the bonus year during which the executive officer was employed and the denominator is the days in the bonus year. | | | T.W. Gorman | | | 2x Base Salary | | | H.H. Kim | | | 1x Base Salary | | | J.J. Drabik | | | 1x Base Salary | |
Mr. Hoskins is not eligible for a payment under the Executive Severance Plan pursuant to the terms of the Hoskins Retirement Agreement. No benefit will be paid to an employee under the plan to the extent that benefits would otherwise be paid to the employee under the terms of a Change of Control Employment Agreement (or other similar agreement). Assuming the qualifying termination was as of September 30, 2020, each of our named executive officers would have received the following payments: | M.S. LaVigne | | | $1,368,100 | | | $40,000 | | | $547,240 | | | $1,955,340 | | | T.W. Gorman | | | $1,156,896 | | | $40,000 | | | $433,836 | | | $1,630,732 | | | H.H. Kim | | | $400,000 | | | $40,000 | | | $240,000 | | | $680,000 | | | J.J. Drabik | | | $340,000 | | | $40,000 | | | $204,000 | | | $584,000 | |
Upon termination of employment for any reason, vested account balances in our deferred compensation plan are paid out in cash to the participant in either a lump sum, or over a five- or 10- year period, commencing six months from the date of termination as previously elected by the participant. See “Retirement Transition Agreements” above for additional information regarding Mr. Hoskins and Mr. Kinder. 48 Energizer Holdings, Inc. 2020 Proxy Statement | |
TABLE OF CONTENTS Death, Disability or Termination of Employment (Other than Upon a Change of Control) Upon an executive officer’s death, permanent disability, involuntary termination other than for cause (defined as termination for gross misconduct), and, in some cases, retirement, other than upon or following a change of control, the following plans or programs provide for acceleration of certain awards. Awards are accelerated for retirement after attainment of age 55 with 10 years of service (including service with our former parent companies) if granted 12 or more months prior to retirement date. No awards are accelerated upon other voluntary termination or involuntary termination for cause. Performance awards vesting upon retirement are paid when results for the Performance Period are met. | Four-year restricted stock award granted 6/25/2018 and 11/12/2018 | | | Forfeited | | | Accelerated | | | Accelerated | | | Pro Rata Vesting | | | Three-year restricted stock awards granted 11/13/17, 11/12/18 and 11/11/2019 | | | Forfeited | | | Accelerated | | | Accelerated | | | Pro Rata Vesting | | | Three-year performance awards granted 11/13/17, 11/12/18 and 11/11/2019 | | | Forfeited | | | Accelerated | | | Pro Rata Vesting | | | Pro Rata Vesting | |
The value of awards which would be accelerated for our NEOs upon death, disability, involuntary termination or retirement other than upon or following a change of control as of September 30, 2020 is shown in the following chart. Stock market changes since September 30, 2020 are not reflected in these valuations. | A.R. Hoskins | | | $7,971,811 | | | $5,322,991 | | | $0 | | | $2,941,949 | | | M.S. LaVigne | | | $2,949,457 | | | $2,374,234 | | | $0 | | | $0 | | | T.W. Gorman | | | $1,871,910 | | | $1,242,617 | | | $0 | | | $0 | | | H.H. Kim | | | $604,344 | | | $352,168 | | | $0 | | | $0 | | | J.J. Drabik | | | $619,289 | | | $393,706 | | | $0 | | | $0 | |
*
| The value of accelerated restricted stock equivalents in the chart above is calculated based on the number of stock equivalents that will vest in accordance with the termination provisions of the agreements valued at $39.14, the closing market price of the Company’s stock on September 30, 2020. This calculation differs from the calculation of accelerated vesting for purposes of Code Section 280G and 4999 as reported in the “Estimated Payments and Benefits” table below. |
TERMINATION AFTER Change of Control of the Company Our change of control employment agreements with each of the NEOs have terms of two or three years from July 1, 2015, subject to certain automatic renewal provisions. For Messrs. Hoskins and LaVigne, the term is three years. For Mr. Gorman and Ms. Kim the term is two years and for Mr. Drabik the term is one year. The agreement provides that the executive officer will receive severance compensation in the event of certain termination events including termination by the company without cause or by the executive for good reason within specified periods following a change of control of the Company or upon death or disability after a change of control of the Company, as such terms are defined in the agreement. Under the agreements, a change of control is generally defined as an acquisition of more than 50% of the total voting power of the Company, a person beneficially owning more than 20% of the total voting power of the Company, or an unapproved change in the majority of the Board. Under the agreements, upon a change of control, each executive officer will receive a pro rata annual bonus for the portion of the year occurring prior to a change of control. The prorated bonus will be calculated as executive’s target bonus for the | Energizer Holdings, Inc. 2020 Proxy Statement 49 |
TABLE OF CONTENTS fiscal year in which the change of control occurs, or, if greater, the actual bonus awarded to executive under any short-term incentive plan(s) of the company for the fiscal year immediately preceding the fiscal year in which the change of control occurs, divided by 365 and multiplied by the number of calendar days in the year immediately up to the day on which the change of control occurs. If the executive officer is terminated following the change of control under the termination events defined in the agreement within specified periods of the change of control, or in the event of death or disability after a change of control, the severance compensation payable under the agreement consists of: a payment equal to a multiple of the executive officer’s annual base salary and target bonus (defined as the most recent five-year actual bonus percentages multiplied by the greater of base salary at either termination or change of control), which will be three times in the case of Messrs. Hoskins and LaVigne and two times in the case of Mr. Gorman and Ms. Kim and one time in the case of Mr. Drabik. a pro rata portion of the executive officer’s target annual bonus for the year of termination; and a lump-sum payment intended to assist with health and welfare benefits for a period of time post-termination. Additionally, if approved by the Company’s Chief Executive Officer, perquisites and fringe benefits enjoyed by an executive immediately prior to termination may continue for the period approved. Following termination of employment, each executive officer is bound by a one-year covenant not to compete, a one-year non-solicitation covenant, and a covenant of confidentiality. No severance payments under the agreements would be made in the event that an executive officer’s termination is voluntary (other than for good reason), is due to normal retirement, or is for cause. Under the agreements, in the event that it is determined that a “golden parachute” excise tax is due under the Internal Revenue Code, we will reduce the aggregate amount of the payments payable to an amount such that no such excise tax will be paid if the resulting amount would be greater than the after-tax amount if the payments were not so reduced. The agreements also provide that upon a change of control, outstanding equity awards held by each executive officer will accelerate and vest in accordance with the terms of the awards, even if the awards have a higher threshold for a “change of control”. Our equity awards generally define a “change of control” as an acquisition of 50% or more of the outstanding shares of our common stock. The terms of our outstanding equity awards vary as to the portion of the unvested award that will accelerate and vest upon a change of control, as indicated below: | Four-year time-based
awards granted 6/25/18 & 11/12/18 | | | 100% vest upon change of control | | | Three-year time-based awards granted
11/13/17, 11/12/18 and 11/11/19 | | | 100% vest upon change of control | | | Three-year performance awards granted
11/13/17, 11/12/18 and 11/11/19 | | | The greater of (i) the number of stock equivalents granted at target or (ii) the amount of target performance stock equivalents which would have vested had the performance period ended on the date the change of control occurs | |
Payments of cash would be made in a lump sum no sooner than six months following termination of employment. Estimated Payments and Benefits If a change of control had occurred on September 30, 2020 and an executive officer’s employment was not terminated, our executive officers would have received the following pro rata annual bonus amounts: Mr. Hoskins $1,439,530, Mr. LaVigne $574,492, Mr. Gorman $508,024, Ms. Kim $240,000 and Mr. Drabik $204,000. 50 Energizer Holdings, Inc. 2020 Proxy Statement | |
TABLE OF CONTENTS Based on the assumptions set out above, the following chart sets forth estimated payments to our NEOs upon termination by the Company without cause or by the executive for good reason following a change of control or upon death or disability after a change of control. The value of accelerated restricted stock equivalents and performance awards reflects a stock price of $39.14 (the closing price of our common stock on September 30, 2020). Stock market declines and vesting and forfeitures of unvested restricted stock equivalents since September 30, 2020 are not reflected in these valuations. Upon a change of control, retirement benefits under the executive savings investment plan vest to the extent not already vested. | A.R. Hoskins | | | $9,440,532 | | | $0 | | | $7,971,811 | | | $35,223 | | | $0 | | | $17,447,566 | | | M.S. LaVigne | | | $4,879,104 | | | $0 | | | $2,949,457 | | | $31,197 | | | $0 | | | $7,859,758 | | | T.W. Gorman | | | $2,662,139 | | | $0 | | | $1,871,911 | | | $32,113 | | | $-167,172(2) | | | $4,398,991 | | | H.H. Kim | | | $1,375,495 | | | $0 | | | $604,406 | | | $32,707 | | | $0 | | | $2,012,608 | | | J.J. Drabik | | | $777,863 | | | $0 | | | $619,289 | | | $16,417 | | | $0 | | | $1,413,569 | |
(1)
| Amounts in this column include health insurance, dental insurance and life insurance. |
(2)
| Under Internal Revenue Code Section 280G, executive officers will incur an excise tax on portions of these payments if the parachute value of payments due upon certain events, including a termination of employment, exceeds a specified threshold in connection with a change of control. The Company determines whether a named executive officer is better off receiving the full payment due and paying the excise tax or receiving a reduced payment that falls just below the excise tax threshold, which is referred to as a “best of net” provision. For this hypothetical payment as of September 30, 2020, it has been estimated that Mr. Gorman would be better off receiving the reduced payout. The other named executive officers are better off receiving the full payment and paying the excise tax. |
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. We identified our median colleague using data as of September 30, 2020, by examining individuals employed by us as of that date, the (i) projected base or wage compensation, projected recurrent cash allowances, and actual cash bonus payments for permanent colleagues, and (ii) actual base or wage compensation, actual recurrent cash allowances, and actual cash bonus payments for temporary colleagues. As permitted by the SEC rules, we are excluding from our CEO pay ratio approximately 12 colleagues who were previously employed by CAE which we acquired during fiscal 2020. Additionally, of the remaining approximately 5,900 colleagues, under the de minimis exception to the Dodd- Frank Act reporting rules, we excluded 192 colleagues based in Guatemala, 49 colleagues based in Honduras and 30 colleagues based in El Salvador, which represented approximately 4.61% of the Company’s total colleague population as of September 30, 2020. Therefore, an aggregate population of approximately 5,600 colleagues, whether employed on a full-time or part-time basis, was considered in determining our median employee. We estimate that the compensation of our Chief Executive Officer in fiscal 2020 was approximately 129 times the median of the annual total compensation of all of our other colleagues (except those colleagues excluded under the de minimis and acquisition exclusions noted above). 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, apply certain exclusions, and 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. | Annual Total Compensation | | | $6,718,813 | | | $52,013 | |
| Energizer Holdings, Inc. 2020 Proxy Statement 51 |
TABLE OF CONTENTS STOCK OWNERSHIP INFORMATION
Five Percent Owners of Common Stock The following table shows, as of November 23, 2018,December 4, 2020, the holdings of the Company’s common stock by any entity or person known to the Company to be the beneficial owner of more than 5% of the outstanding shares of the Company’s common stock: | | | | | | | | | | | | | | Name and Address of Beneficial Owner | | Amount and Nature of Beneficial Ownership | | Percent of Class Outstanding(1) | | | | BlackRock, Inc. 55 East 52nd Street, New York, NY 10055 | | | | 5,323,593 | (2) | | | | 8.9 | % | | | | The Vanguard Group 100 Vanguard Blvd., Malvern, PA 19355 | | | | 5,221,356 | (3) | | | | 8.7 | % | | | | Ceredex Value Advisors, LLC 3333 Piedmont Road NE, Suite 1500, Atlanta, GA 30305 | | | | 3,929,760 | (4) | | | | 6.6 | % | | | | J.P. Morgan Chase & Co. 270 Park Avenue, New York, NY 10017 | | | | 3,657,864 | (5) | | | | 6.1 | % |
| FMR LLC
245 Summer Street
Boston, Massachusetts 02210 | | | 8,531,813(2) | | | 12.4% | | | J.P. Morgan Chase & Co.
383 Madison Avenue
New York, NY 10179 | | | 6,492,484(3) | | | 9.5% | | | BlackRock, Inc.
55 East 52nd Street
New York, NY 10055 | | | 6,023,229(4) | | | 8.8% | | | The Vanguard Group
100 Vanguard Blvd.
Malvern, PA 19355 | | | 5,965,595(5) | | | 8.7% | | | Ceredex Value Advisors LLC
301 E. Pine St., Suite 500
Orlando, FL 32801 | | | 3,933,999(6) | | | 5.7% | | | Aqua Capital, Ltd
Wickhams Cay 1
Vanterpool Plaza, 2nd Floor
Road Town, Tortola D8, British Virgin Islands | | | 3,550,000(7) | | | 5.2% | |
(1)
| On November 23, 2018,December 4, 2020, there were 59,894,94868,536,381 shares of the Company’s common stock outstanding. |
(2)
| As reported in a statement on Schedule 13G/A filed with the SEC on February 7, 2020, FMR LLC and related entities reported sole voting power over 96,858 of such shares and sole power to dispose or direct the disposition of over 8,531,813 of such shares. |
(3)
| As reported in a statement on Schedule 13G/A filed with the SEC on January 29, 2018, BlackRock, Inc.13, 2020, J.P. Morgan Chase & Co. and related entities reported, as of December 31, 2017,2019, sole voting power over 5,043,8266,353,830 of such shares and sole dispositive power over 5,323,5936,491,862 of such shares. |
(3)(4)
| As reported in a statement on Schedule 13G/A filed with the SEC on February 9, 2018, The Vanguard Group10, 2020, BlackRock, Inc. and related entities reported, as of December 31, 2017,2019, sole voting power over 33,434 of such shares, shared voting power over 8,364, sole dispositive power over 5,184,306 of such shares and shared dispositive power over 37,050 of such shares. |
(4) | As reported in a statement on Schedule 13G filed with the SEC on February 12, 2018, Ceredex Value Advisors, LLC and related entities reported, as of December 31, 2017, sole voting power over 3,110,7605,769,558 of such shares and sole dispositive power over 3,829,7606,023,229 of such shares.
|
(5)
| As reported in a statement on Schedule 13G/A filed with the SEC on January 19, 2018, J.P. Morgan Chase & Co.February 12, 2020, The Vanguard Group and related entities reported, as of December 29, 2017,31, 2019, sole voting power over 3,563,48332,918 of such shares and sole dispositive power over 3,657,8645,923,020 of such shares and shared voting power over 18,490 of such shares and shared dispositive power over 42,575 of such shares. |
(6)
| As reported in a statement on Schedule 13G/A filed with the SEC on February 10, 2020, Ceredex Value Advisors, LLC. and related entities reported, as of December 31, 2019, sole voting power over 3,672,899 of such shares and sole dispositive power over 3,933,999 of such shares. |
(7)
| As reported in a statement on Schedule 13G/A filed with the SEC on February 13, 2020, Aqua Capital, Ltd. and related entities reported, as of December 31, 2019, shared voting power over 3,550,000 of such shares and shared dispositive power over 3,550,000 of such shares. |
| | 52 Energizer Holdings, Inc. 20182020 Proxy Statement 51
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TABLE OF CONTENTS
Additional Information
STOCK OWNERSHIP INFORMATION
Ownership of Directors and Executive Officers The table below contains information regarding beneficial common stock ownership of directors, nominees and executive officers as of November 23, 2018.December 4, 2020. It does not reflect any changes in ownership that may have occurred after that date. In general, “beneficial ownership” includes those shares a director, nominee or executive officer has the power to vote or transfer, as well as shares owned by immediate family members that reside with the director, nominee or executive officer. Unless otherwise indicated, directors, nominees and executive officers named in the table below have sole voting and investment power with respect to the shares set forth in the table and none of the stock included in the table is pledged. The table also indicates shares that may be obtained within 60 days upon the exercise of options, or upon the conversion of vested stock equivalents into shares of common stock. | | | | | | | | | | | | | | | | | | | | Directors And Executive Officers | | Shares Beneficially Owned | | Stock Equivalents held in the Deferred Compensation Plan | | % of Shares Outstanding (A) (*denotes less than 1%) | | | | | | | Bill G. Armstrong | | | | 24,685 | (C) | | | | 48,892 | | | | | * | | | | | | Cynthia J. Brinkley | | | | 13,449 | (C) | | | | 2,127 | | | | | * | | | | | | Alan R. Hoskins | | | | 256,620 | (C) | | | | 0 | | | | | * | | | | | | Kevin J. Hunt | | | | 13,449 | (C) | | | | 0 | | | | | * | | | | | | James C. Johnson | | | | 16,341 | (C) | | | | 179 | | | | | * | | | | | | John E. Klein | | | | 25,332 | (C) | | | | 22,311 | | | | | * | | | | | | W. Patrick McGinnis | | | | 36,423 | (C) | | | | 17,866 | | | | | * | | | | | | Patrick J. Moore | | | | 13,449 | (C) | | | | 0 | | | | | * | | | | | | J. Patrick Mulcahy | | | | 566,939 | (B)(C) | | | | 106,304 | | | | | 1.12 | % | | | | | Nneka L. Rimmer | | | | 746 | | | | | 0 | | | | | * | | | | | | Robert V. Vitale | | | | 14,719 | (C) | | | | 2,209 | | | | | * | | | | | | Emily K. Boss | | | | 22,495 | (C) | | | | 0 | | | | | * | | | | | | Timothy W. Gorman | | | | 34,274 | (C) | | | | 0 | | | | | * | | | | | | Gregory T. Kinder | | | | 30,170 | (C) | | | | 0 | | | | | * | | | | | | Mark S. LaVigne | | | | 61,989 | (C) | | | | 0 | | | | | * | | | | | | All Executive Officers and Directors as a Group (16 persons) | | | | 1,153,942 | (C) | | | | 199,888 | | | | | 2.25 | % |
| Carlos Abrams-Rivera | | | 3,772(B) | | | 0 | | | * | | | Bill G. Armstrong | | | 31,132(B) | | | 48,892 | | | * | | | Cynthia J. Brinkley | | | 18,896(B) | | | 4,612 | | | * | | | Rebecca C. Frankiewicz | | | 2,772(B) | | | 1,716 | | | * | | | Alan R. Hoskins | | | 482,207(B) | | | 0 | | | * | | | Kevin J. Hunt | | | 18,896(B) | | | 0 | | | * | | | James C. Johnson | | | 21,788(B) | | | 179 | | | * | | | Patrick J. Moore | | | 18,896(B) | | | 0 | | | * | | | Nneka L. Rimmer | | | 6,193(B) | | | 0 | | | * | | | Robert V. Vitale | | | 33,123(B) | | | 8,007 | | | * | | | John Drabik | | | 12,731 | | | 0 | | | * | | | Timothy W. Gorman | | | 80,587 | | | 0 | | | * | | | Hannah H. Kim | | | 1,045 | | | 0 | | | * | | | Gregory T. Kinder | | | 52,809 | | | 0 | | | * | | | Mark S. LaVigne | | | 134,082 | | | 0 | | | * | | | All Executive Officers and Directors as a Group (15 persons) | | | 913,162 | | | 63,406 | | | 1.41% | |
(A)
| The number of shares outstanding for purposes of this calculation was the number outstanding as of November 23, 2018,December 4, 2020, equivalents that vest within 60 days, or upon retirement, and the number of stock equivalents held in the deferred compensation plan. |
(B)
| Mr. Mulcahy disclaims beneficial ownership of 12,500 shares of common stock owned by his wife and 111 shares owned by his step-daughter.
|
(C) | Includes vested stock equivalents which will convert to shares of common stock upon the individual’s retirement, resignation from the Board or termination of employment with the Company. The number of vested stock equivalents credited to each individual executive officer or director is as follows: Mr. Mulcahy, 18,210; Ms. Brinkley, 5,589; Mr. Johnson, 14,043; Mr. Klein, 20,643;18,801; Mr. Moore, 11,151;15,909; and Mr. Vitale, 961.9,911. This amount also includes unvested stock equivalents that vest upon a director’s retirement from the Board or upon attainment of certain vesting provisions, in accordance with the time basedtime-based restricted stock equivalent awards, upon retirement or termination for the executive officers. The number of unvested stock equivalents credited to each director and executive officer is as follows: Mr. Abrams-Rivera, 2,772; Mr. Armstrong, 2,298;2,987; Ms. Brinkley, 2,298;2,987; Ms. Frankiewicz, 2,772; Mr. Hoskins, 42,691;52,598; Mr. Hunt, 2,298;2,987; Mr. Johnson, 2,298; Mr. Klein, 2,298; Mr. McGinnis, 2,298;2,987; Mr. Moore, 2,298; Mr. Mulcahy, 2,298;2,987; Ms. Rimmer, 7462,987 and Mr. Vitale, 2,298; Mr. LaVigne, 6,880; Mr. Gorman, 1,164; Mr. Kinder, 2,328; Ms. Boss, 2,3282,987. |
| Energizer Holdings, Inc. 2020 Proxy Statement 53 |
TABLE OF CONTENTS 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, 2020: | Equity compensation plans approved by security holders | | | 1,255,225 | | | N/A | | | 8,259,325 | | | Equity compensation plans not approved by security holders | | | None | | | N/A | | | None | | | Total | | | 1,255,225 | | | N/A | | | 8,259,325 | |
(1)
| The number of securities to be issued upon exercise of outstanding options, warrants and allrights shown above, as of September 30, 2020, includes 1,255,225 restricted stock equivalents which have been granted under the terms of the 2015 or Omnibus Incentive Plans (including our former parent company stock awards reissued and converted into Energizer stock awards in connection with the Spin-Off). This number reflects target payout on performance awards. If the awards were to pay out at stretch, the number of securities to be issued upon issuance would be 1,956,521. As of December 7, 2020, of the outstanding stock equivalents granted, approximately 469,000 have vested and converted into outstanding shares of our common stock. An additional 472,000 restricted stock equivalents have been granted, including 278,000 performance shares granted at target payout. |
(2)
| The weighted average exercise price does not take into account securities which will be issued upon conversion of outstanding restricted stock equivalents. |
(3)
| This number only reflects securities available under the Omnibus Incentive Plan. Under the terms of that plan, any awards other executive officers, 1,746.than options, phantom stock options or stock appreciation rights are to be counted against the reserve available for issuance in a 2 to 1 ratio. This number reflects the target equivalents that could potentially be paid out. If payout numbers were at stretch, the number of shares available for issuance would be 6,856,733. |
DELINQUENT SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE16(A) REPORTS Section 16(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) requires our directors, executive officers, and anyone holding 10% or more of a registered class of our equity securities (reporting persons) to file reports with the SEC showing their holdings of, and transactions in, Energizer securities. Based solely on a review of copies of such reports, and written representations from each reporting person that no other reports are required, we believe that for 20182020 all reporting persons filed the required reports on a timely basis under Section 16(a).
| | | 5254 Energizer Holdings, Inc. 20182020 Proxy Statement
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TABLE OF CONTENTS
Additional Information
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Our Board has adopted a written policy regarding the review and approval or ratification of transactions involving the Company and our directors, nominees for directors, executive officers, immediate family members of these individuals, and shareholders owning five percent or more of our outstanding common stock, each of whom is referred to as a related party. The policy covers any related party transaction, arrangement or relationship where a related party has a direct or indirect material interest and the amount involved exceeds $100,000 in any calendar year. Under the policy, the Audit Committee is responsible for reviewing and approving, or ratifying, the material terms of any related party transactions. The Audit Committee is charged with determining whether the terms of the transaction are any less favorable than those generally available from unaffiliated third parties and determining the extent of the related party’s interest in the transaction. In adopting the policy, the Board reviewed certain types of related party transactions described below and determined that they should be deemed to be pre-approved, even if the aggregate amount involved might exceed $100,000: Officer or director compensation which would be required to be disclosed under Item 402 of the SEC’s compensation disclosure requirements, and expense reimbursements to these individuals in accordance with our policy; Transactions with another company at which a related party serves as an employee,a colleague, director, or holder of less than 10% of that company’s outstanding stock, if the aggregate amount involved does not exceed the greater of $1 million or 2% of that company’s consolidated gross revenues; Charitable contributions to a charitable trust or organization for which a related party serves as an employee,a colleague, officer or director, if the annual contributions by us do not exceed the greater of $100,000 or 2% of the organization’s total annual receipts; and Transactions in which all of our shareholders receive proportional benefits, the rates or charges involved are determined by competitive bids, the transaction involves obtaining services from a regulated entity at rates fixed by law, or the transaction involves bank services as a depositary of funds, transfer agent or registrar, or similar services. Our legal department is primarily responsible for the development and implementation of processes and procedures to obtain information from our directors and executive officers with respect to related party transactions. During fiscal 2018,2020, there were no transactions with executive officers, directors or their immediate family members which were in an amount in excess of $100,000, and in which any such person had a direct or indirect material interest. Transactions Related to the Acquisitions Following the completion of the acquisitions with Spectrum Brands Holdings, Inc. (“Spectrum”), the Company and Spectrum entered into transition service agreements (“TSAs”) and reverse TSAs. Under the agreements, the Company and Spectrum provided each other certain specified back office support services on a transitional basis, including among other things, payroll and other human resource services, information systems as well as accounting support. During the twelve months ended September 30, 2020, the Company incurred expense of $8.4 in SG&A and $0.4 in Cost of products sold. The Company also recorded income of $0.9 in Other items, net related to the reverse transaction services agreements provided for the twelve months end period. On January 28, 2019, in connection with the closing of acquisition of the Acquired Auto Care Business, the Company entered into a Shareholder Agreement (the “Shareholder Agreement”) with Spectrum. The Shareholder Agreement includes, among other things, a 24-month standstill provision from the closing date, registration rights and certain restrictions on Spectrum’s ability to transfer any of the Company’s common stock or other equity securities, or engage in certain hedging transactions, subject to certain exceptions and limitations contained in the Shareholders Agreement, and certain repurchase rights of the Company. In addition, subject to certain limitations and qualifications contained in the Shareholder Agreement, for a period of 18 months following the closing date, Spectrum will be required to vote in favor of the Board’s director nominees and in accordance with the Board’s recommendations identified on the Company’s proxy or information statement on all other matters at any meeting of the Company’s shareholders, including the Annual Meeting. “Additional information can be found in “Note 21, Related Party Transactions” of the Notes to Consolidated Financial Statements of our Annual Report on Form 10-K for year ended September 30, 2020.
| Energizer Holdings, Inc. 2020 Proxy Statement 55 |
TABLE OF CONTENTS Availability of Proxy Materials We are furnishing proxy materials to our shareholders primarily via the Internet instead of mailing printed copies of those materials to each shareholder. By doing so, we save costs and reduce the environmental impact of our Annual Shareholders’ Meeting. On December 13, 2018,21, 2020, we mailed a Notice of Internet Availability of Proxy Materials to certain of our shareholders. The Notice contains instructions about how to access our proxy materials and vote online or vote by telephone. If you would like to receive a paper copy of our proxy materials, please follow the instructions included in the Notice of Internet Availability of Proxy Materials. If you previously chose to receive our proxy materials electronically, you will continue to receive access to these materials via email unless you elect otherwise.
Record holders of Energizer Holdings, Inc. common stock on November 23, 2018December 4, 2020 may vote at the meeting. On November 23, 2018,December 4, 2020, there were 59,894,94868,536,381 shares of common stock outstanding.outstanding, each of which entitled the holder to one vote for each matter to be voted on at our Annual Shareholders’ Meeting. The shares of common stock held in our treasury will not be voted. | | |
| | Energizer Holdings, Inc. 2018 Proxy Statement 53
| Holders of our 7.50% Series A Mandatory Convertible Preferred Stock are not entitled to vote at the meeting.
Additional Information
VOTING PROCEDURES
How to attend the virtual annual Meeting Energizer will be hosting the Annual Shareholders’ Meeting in PersonYou are entitledonline. A summary of the information you need to attend the Annual Meeting online is provided below:
Any shareholder can attend the Annual Shareholders’ Meeting only ifby visiting www.virtualshareholdermeeting.com/ENR2021 We encourage you were a shareholder as of the close of business on November 23, 2018, the record date, or hold a valid proxy for the meeting. In order to be admitted toaccess the Annual Shareholders’ Meeting online prior to its start time The Annual Meeting starts at 8:00 a.m. Central Time Shareholders may vote electronically and submit questions online while attending the Annual Shareholders’ Meeting Please have the Control Number we have provided to you must present proof of ownership of Energizer stock onto join the record date. This can be anyAnnual Shareholders’ Meeting • | Instructions on how to attend and participate in the Annual Shareholders’ Meeting, including how to demonstrate proof of stock ownership, are available at www.virtualshareholdermeeting.com/ENR2021 |
What If I Have Technical Difficulties or Trouble Accessing the following:Virtual Meeting Website? A brokerage statement or letter from a bank or broker indicating ownership on November 23, 2018
The Notice of Internet Availability of Proxy Materials
A printout of the proxy distribution email (if you received your materials electronically)
A voting instruction form
A legal proxy provided by your broker, bank, or nominee
Shareholders and proxy holders must also present a form of photo identification such as a driver’s license. We will have technicians ready to assist you with any technical difficulties you may have accessing the virtual meeting. If you encounter any difficulties accessing the virtual meeting during the meeting, please call toll free: 1-844-986-0822, or if calling internationally, please call: 1-303-562-9302.
How can I ask questions? You can submit questions in writing to the virtual meeting website during the annual meeting. You must first join the meeting with your 16-digit control number. We intend to answer questions pertinent to company matters as time allows during the meeting. Questions that are substantially similar may be unablegrouped and answered once to admit anyone who does not present identification or refuses to comply with our security procedures.avoid repetition. Guidelines for submitting written questions during the meeting will be available in the rules of conduct for the Annual Shareholders’ Meeting.
56 Energizer Holdings, Inc. 2020 Proxy Statement | |
TABLE OF CONTENTS There are four voting methods for record holders: | MAIL | | | | | | | Mail | | If you choose to vote by mail, complete a proxy card, date and sign it, and return it in the postage-paid envelope provided (if you received a paper copy of the proxy materials) or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. | | | | TELEPHONE | | Telephone | | You can vote your shares by telephone by calling 1-800-690-6903 and using the identification code indicated on the Notice Regarding the Availability of Proxy Materials or the proxy card mailed to you. Voting is available 24 hours a day. | | | | INTERNET
VOTING | | Internet | | You can also vote via the Internet at www.proxyvote.com. Your identification code for Internet voting is on the Notice Regarding the Availability of Proxy Materials or the proxy card mailed to you, and voting is available 24 hours a day. | | | | VOTING DURING
MEETING | | Written Ballot | | You can vote by submitting a written ballot at
During the Annual Shareholders’ Meeting.Meeting, you can vote, using the Control Number we have provided to you. | | |
Vote Required; Effect of Abstentions and BrokerNon-Votes The holders of record of shares representing a majority of the voting power of our issued and outstanding shares of common stock entitled to vote at the Annual Shareholders’ Meeting, present in person or represented by proxy, will constitute a quorum for the transaction of business. The shares of a shareholder whose ballot on any or all proposals is marked as “abstain” will be included in the number of shares present at the Annual Shareholders’ Meeting to determine whether a quorum is present. If you are the beneficial owner of shares held by a broker or other custodian, you may instruct your broker how to vote your shares through the voting instruction form included with this Proxy Statement. If you wish to vote the shares you own beneficially at the meeting, you must first request and obtain a “legal proxy” from your broker or other custodian. If you choose not to provide instructions or a legal proxy, your shares are referred to as “uninstructed shares”. Whether your broker or custodian has the discretion to vote these shares on your behalf depends on the ballot item. The following table summarizes the votes required for passage of each proposal and the effect of abstentions and uninstructed shares held by brokers. | | | 54 Energizer Holdings, Inc. 2018 Proxy Statement
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Additional Information
VOTING PROCEDURES
Brokers and custodians can no longer vote uninstructed shares on your behalf in director elections. For your vote to be counted, you must submit your voting instruction form to your broker or custodian. | | | | Item
| | Votes Required for Approval
| | Abstentions | Abstentions | | | | | | 1. | | | 1.
| | | Majority of Voting Power (1)Power(1) | | No Effect | Vote Against | | | | | | 2. | | | 2. Advisory,Non-Binding Vote to Approve Executive Compensation | | Majority of Voting Power (1)
| | No Effect | | Not Voted/No Effect | | | | | 3.
Ratification of Appointment of Independent Auditor | | | Majority of Voting Power (1)Power(1) | | No Effect | Vote Against | | | | |
(1) | "
3. | | | Advisory, Non-Binding Vote to Approve Executive Compensation | | | Majority of Voting Power"Power(1) | | | Vote Against | | | Not Voted/No Effect | |
(1)
| “Majority of Voting Power” in table relates to shares present in person or represented by proxy, and entitled to vote.vote on the proposal. |
You may revoke your proxy and change your vote at any time before the voting polls close at our Annual Shareholders’ Meeting by submitting a properly executed proxy of a later date, a written notice of revocation (of your previously executed proxy) sent to our Corporate Secretary, or a vote cast in person at our Annual Shareholders’ Meeting (however, attending the meeting without voting will not revoke a proxy).
The Board of Directors is soliciting the proxy accompanying this Proxy Statement. We will pay the cost of soliciting proxies. Proxies may be solicited by executive officers, directors, and employeescolleagues of the Company, none of whom will receive any additional compensation for their services. Georgeson,Morrow Sodali LLC may solicit proxies for a fee of $7,500$10,000 plus expenses. These solicitations may be made personally or by mail, facsimile, telephone, messenger, email, or the Internet. 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. | Energizer Holdings, Inc. 2020 Proxy Statement 57 |
TABLE OF CONTENTS To reduce costs and reduce the environmental impact of our Annual Shareholders’ Meeting, a single Proxy Statement and Annual Report, along with individual proxy cards or individual Notices of Internet Availability, will be delivered in one envelope to certain shareholders having the same last name and address and to individuals with more than one account registered at our transfer agent with the same address unless contrary instructionsaddress. If a shareholder would like to receive separate copies of proxy materials that have been received from an affected shareholder.subject to householding, please contact Broadridge Financial Solutions, Inc. at the contact information below to receive separate copies. Shareholders participating in householding will continue to receive separate proxy cards. If you are a registered shareholder and would like to enroll in this service or receive individual copies of this year’s and/or future proxy materials, please contact our transfer agent, Broadridge Financial Solutions, Inc., at 866-741-8213, by email at shareholder@broadridge.com or in writing to 51 Mercedes Way, Edgewood, NY 11717. If you are a beneficial shareholder, you may contact the broker or bank where you hold the account.
The Board does not intend to bring any other business before the Annual Shareholders’ Meeting, and so far as is known to our Board, no matters are to be brought before the meeting other than as specified in the notice of meeting. Our bylaws provide that shareholders may nominate candidates for directors or present a proposal or bring other business before an annual meeting only if they give timely written notice of the nomination or the matter to be brought not less than 90 nor more than 120 days prior to the first anniversary of the prior year’s meeting, as described under “ Shareholder Proposals for 2020the 2022 Annual Shareholders’ Meeting”. | | |
| | Energizer Holdings, Inc. 2018 Proxy Statement 55
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Additional Information
SHAREHOLDER PROPOSALS FOR THE 2020 ANNUAL SHAREHOLDERS’ MEETING
SHAREHOLDER PROPOSALS FOR THE 20202022 ANNUAL SHAREHOLDERS’ MEETING Any proposals to be presented at the 20202022 Annual Shareholders’ Meeting must be received by the Company, directed to the attention of the Corporate Secretary, no later than August 15, 201923, 2021 in order to be included in the Company’s Proxy Statement and form of proxy for that meeting under Rule 14a-8 of the Exchange Act. Upon receipt of any proposal, the Company will determine whether or not to include the proposal in the Proxy Statement and proxy card in accordance with regulations governing the solicitation of proxies. The proposal must comply in all respects with the rules and regulations of the SEC and our bylaws. In order for a shareholder to nominate a candidate for director, present a proposal or bring other business before the shareholders under our bylaws, timely notice of the nomination must be received by us in advance of the meeting. Ordinarily, such notice must be received not less than 90, nor more than 120, days before the first anniversary of the prior year’s meeting. For the 20202022 Annual Shareholders’ Meeting, the notice would have to be received between September 30, 2019October 4, 2021 and October 30, 2019.November 3, 2021. However, in the event that the date of the 20202022 Annual Shareholders’ Meeting is more than 30 days before or more than 60 days after the first anniversary of the 20202022 Annual Shareholders’ Meeting, notice must be received no earlier than the 120th day prior to the date of the 20202022 Annual Shareholders’ Meeting and not later than the close of business on the later of the 90th day prior to the date of the 20202022 Annual Shareholders’ Meeting, or the seventh day following the day on which notice of the date of the meeting was mailed or on which public notice of the meeting was given. The notice of nomination must include, as to each person whom the shareholder proposes to nominate for election, information required by our bylaws, including: the nominee’s name, age, business and residential address; the nominee’s principal occupation for the previous five years; the nominee’s consent to being named as a nominee and to serving on the Board; the nominee’s “disclosable interests” as of the date of the notice (which information shall be supplemented by such person, if any, not later than ten days after the record date of the Annual Shareholders’ Meeting to disclose such ownership as of the record date), which includes: –
| – | | shares of common stock; options, warrants, convertible securities, stock appreciation rights, or similar rights with respect to our common stock; any proxy, contract, arrangement, understanding, or relationship conveying a right to vote common stock; |
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| – | | any short interest with respect to common stock; |
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| – | | any derivative instruments held by a partnership in which the nominee has a partnership interest; and |
58 Energizer Holdings, Inc. 2020 Proxy Statement | |
TABLE OF CONTENTS –
| | rights to any performance-related fee based on any increase or decrease in the value of common stock or any related derivative instrument; and |
a description of all monetary or other material agreements, arrangements or understandings between the nominating shareholder and the nominee during the prior three years. In addition, the nominating shareholder must provide their name and address and disclosable interests (as such term is described above). The shareholder must be present at the Annual Shareholders’ Meeting at which the nomination is to be considered, and must provide a completed questionnaire regarding the nominee’s background and qualification and compliance with our corporate governance, conflict of interest, and other pertinent policies and guidelines. To assist in the evaluation of shareholder-recommended candidates, the Human CapitalNominating and Governance Committee may request that the shareholder provide certain additional information required to be disclosed in the Company’s proxy statement under Regulation 14A of the Exchange Act. The shareholder nominating the candidate must also include his or her name and address, and the number of shares of common stock beneficially owned. CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS Energizer Holdings, Inc. (the “Company”) and its management may make certain statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements often use words such as “anticipates,” “targets,” “expects,” “hopes,” “estimates,” “intends,” “plans,” “goals,” “believes,” “continue” and other similar expressions or future or conditional verbs such as “will,” “may,” “might,” “should,” “would” and “could.” Forward-looking statements represent the Company’s current expectations, plans or forecasts of its future results, revenues, expenses, capital measures, strategy, and future business and economic conditions more generally, and other future matters. These statements are not guarantees of future results or performance and involve certain known and unknown risks, uncertainties and assumptions that are difficult to predict and are often beyond the Company’s control. Actual outcomes and results may differ materially from those expressed in these forward looking statements. Factors that could cause actual results or events to differ materially from those anticipated include, without limitation, the matters implied by, any of these forward-looking statements. You should not place undue reliance on any forward-looking statement and should consider the following uncertainties and risks, as well as the risks and uncertainties more fully discussed under Item 1A. Risk Factors of the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on November 17, 2020, 1) market and economic conditions; (2) market trends in the categories in which we compete; (3) uncertainty relating to the impacts of the COVID-19 outbreak, including but not limited to, its impacts on consumer demand, costs, product mix, the availability of our products, our strategic initiatives, our and our partners' global supply chains, operations and routes to market; (4) our ability to integrate businesses, to realize the projected results of the acquired businesses, and to obtain expected cost savings, synergies and other anticipated benefits of the acquired businesses within the expected timeframe, or at all; (5) the impact of the acquired businesses on our business operations; (6) the success of new products and the ability to continually develop and market new products; (7) our ability to attract, retain and improve distribution with key customers; (8) our ability to continue planned advertising and other promotional spending; (9) our ability to timely execute strategic initiatives, including restructurings, and international go-to-market changes in a manner that will positively impact our financial condition and results of operations and does not disrupt our business operations; (10) the impact of strategic initiatives, including restructurings, on our relationships with employees, customers and vendors; (11) our ability to maintain and improve market share in the categories in which we operate despite heightened competitive pressure; (12) financial strength of distributors and suppliers; (13) our ability to improve operations and realize cost savings; (14) the impact of the United Kingdom’s future trading relationships following its exit from the European Union; (15) the impact of foreign currency exchange rates and currency controls, as well as offsetting hedges; (16) the impact of adverse or unexpected weather conditions; (17) uncertainty from the expected discontinuance of LIBOR and the transition to any other interest rate benchmark; (18) the impact of raw materials and other commodity costs; (19) the impact of legislative changes or regulatory determinations or changes by federal, state and local, and foreign authorities, including customs and tariff determinations, as well as the impact of potential changes to tax laws, policies and regulations; (20) costs and reputational damage associated with cyber-attacks or information security breaches or other events; (21) the impact of advertising and product liability claims and other litigation; and (22) compliance with debt covenants and maintenance of credit ratings as well as the impact of interest and principal repayment of our existing and any future debt. The information contained herein is preliminary and based on Company data available at the time of this filing. Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update any forward-looking statement to reflect the impact of circumstances or events that arise after the date the forward-looking statement was made. | | | 56Energizer Holdings, Inc. 20182020 Proxy Statement
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Appendix A
TABLE OF CONTENTS RECONCILIATION OF NON-GAAP FINANCIAL MEASURES RECONCILIATION OFNON-GAAP FINANCIAL MEASURES
The Company reports its financial results in accordance with accounting principles generally accepted in the U.S. (“GAAP”). However, management believes that certain non-GAAP financial measures provide users with additional meaningful comparisonsComparisons to the corresponding historical or future period. These non-GAAP financial measures exclude items that management believes are not reflective of the Company’s on-going operating performance, such as acquisition and integration costs, acquisition inventory step up costs,loss on extinguishment of debt, settlement loss on pension plan terminations, gain on sale of real estate, restructuring activities, costs related to the spin, and income tax adjustments.adjustments and the one-time impact of the CARES Act and The Tax Cuts and Jobs Act. These measures help investors to see year over year comparability when excluding currency fluctuations, acquisition activity as well as other company initiatives that are not on-going. We believe these non-GAAP financial measures are an enhancement to assist investors in understanding our business and in performing analysis consistent with financial models developed by research analysts. Investors should consider non-GAAP measures in addition to, not as a substitute for, or superior to, the comparable GAAP measures. In addition, these non-GAAP measures may not be the same as similar measures used by other companies due to possible differences in method and in the items being adjusted. We provide the followingnon-GAAP measures and calculations, as well as the corresponding reconciliation to the closest GAAP measure: | | | | | | | | | | | | | | | | | | | FY 15 | | | FY 16 | | | FY 17 | | | FY 18 | | Free Cash Flow(in millions) | | | | | | | | | | | | | | | | | Net cash from operating activities | | $ | 161.8 | | | $ | 193.9 | | | $ | 197.2 | | | $ | 228.7 | | Capital expenditures | | | (40.4 | ) | | | (28.7 | ) | | | (25.2 | ) | | | (24.2 | ) | Proceeds from sale of assets | | | 13.7 | | | | 1.5 | | | | 27.2 | | | | 6.1 | | | | | | | | | | | | | | | | | | | Free cash flow—subtotal | | $ | 135.1 | | | $ | 166.7 | | | $ | 199.2 | | | $ | 210.6 | | Acquisition and integration related payments | | | — | | | | 5.6 | | | | 4.3 | | | | 27.2 | | | | | | | | | | | | | | | | | | | Adjusted free cash flow | | $ | 135.1 | | | $ | 172.3 | | | $ | 203.5 | | | $ | 237.8 | | | | | | | FY 2016 | | | FY 2017 | | | FY 2018 | | Reported GAAP Diluted EPS | | | | | | $ | 2.04 | | | $ | 3.22 | | | $ | 1.52 | | Acquisition and integration costs | | | | | | | 0.22 | | | | 0.06 | | | | 1.00 | | Acquisition withholding tax | | | | | | | — | | | | — | | | | 0.10 | | Settlement on Canadian pension plan termination | | | | | | | — | | | | — | | | | 0.17 | | Gain on sale of real estate | | | | | | | — | | | | (0.26 | ) | | | (0.06 | ) | Restructuring | | | | | | | 0.05 | | | | — | | | | — | | Spin | | | | | | | 0.11 | | | | — | | | | — | | Spin restructuring | | | | | | | 0.07 | | | | (0.04 | ) | | | — | | Income tax adjustments | | | | | | | (0.18 | ) | | | — | | | | — | | One-time impact of the new U.S. Tax Legislation | | | | | | | — | | | | — | | | | 0.64 | | | | | | | | | | | | | | | | | | | Adjusted Non-GAAP Diluted EPS | | | | | | $ | 2.31 | | | $ | 2.98 | | | $ | 3.37 | | | | | | | | | | | | | | | | | | | Weighted average shares—Diluted | | | | | | | 62.5 | | | | 62.6 | | | | 61.4 | |
measure.Adjusted Earnings Per Share (EPS) excludes the impact of the costs related to acquisition and integration, the loss on extinguishment of debt, the prior year settlement loss on pension plan termination, gain on sale of real estate, restructuring activities, costs related to the spin, income tax adjustments and the one-time impact of the CARES Act and The Tax Cuts and Jobs Act. Free Cash Flow is defined as net cash provided by operating activities reduced by capital expenditures, net of the proceeds from asset sales. Adjusted Free Cash Flow further excludes the cash payments for acquisition and integration expenses and integration capital expenditures. These expense cash payments are net of the statutory tax benefit associated with the payment. | Free Cash Flow (in millions)
| | | | | | | | | | | | | | | | | | Net Cash from Operating Activities | | | $193.9 | | | $197.2 | | | $228.7 | | | $142.1 | | | $389.3 | | | Capital Expenditures | | | (28.7) | | | (25.2) | | | (24.2) | | | (55.1) | | | (65.3) | | | Proceeds from Sales of Assets | | | 1.5 | | | 27.2 | | | 6.1 | | | 0.2 | | | 6.4 | | | Free Cash Flow — Subtotal | | | $166.7 | | | $199.2 | | | $210.6 | | | $87.2 | | | $330.4 | | | Acquisition and Integration Related Payments | | | 5.6 | | | 4.3 | | | 27.2 | | | 159.2 | | | 33.7 | | | Integration Related Capital Expenditures | | | — | | | — | | | — | | | 9.8 | | | 41.0 | | | Adjusted Free Cash Flow | | | $172.3 | | | $203.5 | | | $237.8 | | | $256.2 | | | $405.1 | |
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| | Energizer Holdings, Inc. 20182020 Proxy Statement A-1
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Appendix A
RECONCILIATIONTABLE OF NON-GAAP FINANCIAL MEASURESCONTENTS
| | | | | | | | | | | | | | | FY 2016 | | | FY 2017 | | | FY 2018 | | | | | | Reported SG&A(in millions) | | $ | 361.4 | | | $ | 361.3 | | | $ | 421.7 | | | | | | Acquisition and integration costs | | | 10.0 | | | | 4.0 | | | | 62.9 | | | | | | Spin | | | 10.0 | | | | — | | | | — | | | | | | | | | | | | | | | | | | | Adjusted SG&A | | $ | 341.4 | | | $ | 357.3 | | | $ | 358.8 | |
| | | | | | | | | | | | | | | FY 2016 | | | FY 2017 | | | FY 2018 | | | | | | Earnings before income taxes(in millions) | | $ | 165.7 | | | $ | 273.3 | | | $ | 175.2 | | | | | | Other items, net | | | (9.1 | ) | | | (5.0 | ) | | | (6.6 | ) | | | | | Interest expense | | | 54.3 | | | | 53.1 | | | | 98.4 | | | | | | Gain on sale of real estate | | | — | | | | (16.9 | ) | | | (4.6 | ) | | | | | Spin restructuring | | | 5.8 | | | | (3.8 | ) | | | — | | | | | | Restructuring | | | 2.5 | | | | — | | | | — | | | | | | Acquisition and integration costs (in SG&A and COGS) | | | 18.1 | | | | 5.1 | | | | 63.1 | | | | | | Spin (in SG&A and COGS) | | | 10.4 | | | | — | | | | — | | | | | | Restructuring (in COGS) | | | 2.4 | | | | — | | | | — | | | | | | | | | | | | | | | | | | | Adjusted Operating Profit | | $ | 250.1 | | | $ | 305.8 | | | $ | 325.5 | |
| | | | | | | | | | | | | | | FY 2016 | | | FY 2017 | | | FY 2018 | | | | | | Net Earnings (in millions) | | $ | 127.7 | | | $ | 201.5 | | | $ | 93.5 | | | | | | Income tax provision | | | 38.0 | | | | 71.8 | | | | 81.7 | | | | | | | | | | | | | | | | | | | Earnings before taxes | | $ | 165.7 | | | $ | 273.3 | | | $ | 175.2 | | | | | | Interest expense | | | 54.3 | | | | 53.1 | | | | 98.4 | | | | | | Depreciation and Amortization | | | 34.3 | | | | 50.2 | | | | 45.1 | | | | | | | | | | | | | | | | | | | EBITDA | | $ | 254.3 | | | $ | 376.6 | | | $ | 318.7 | | | | | | Restructuring | | | 4.9 | | | | — | | | | — | | | | | | Spin Costs | | | 10.4 | | | | — | | | | — | | | | | | Spin Restructuring | | | 5.8 | | | | (3.8 | ) | | | — | | | | | | Gain on Sale of Real Estate | | | — | | | | (16.9 | ) | | | (4.6 | ) | | | | | Acquisition and Integration Costs | | | 10.0 | | | | 8.4 | | | | 42.7 | | | | | | HandStands EBITDA | | | 27.5 | | | | — | | | | — | | | | | | Settlement loss on Canadian Pension Plan Termination | | | — | | | | — | | | | 14.1 | | | | | | Share-Based Payments | | | 20.4 | | | | 24.3 | | | | 28.2 | | | | | | | | | | | | | | | Adjusted EBITDA | | $ | 341.5 | | | $ | 388.6 | | | $ | 399.1 | |
| Reported GAAP Diluted EPS | | | $2.04 | | | $3.22 | | | $1.52 | | | $0.78 | | | $0.44 | | | Acquisition and integration costs | | | 0.22 | | | 0.06 | | | 1.00 | | | 2.06 | | | 0.79 | | | Acquisition withholding tax | | | — | | | — | | | 0.10 | | | — | | | — | | | Settlement on pension plan terminations | | | — | | | — | | | 0.17 | | | 0.05 | | | — | | | Loss on extinguishment of debt | | | — | | | — | | | — | | | — | | | 1.05 | | | Gain on sale of real estate | | | — | | | (0.26) | | | (0.06) | | | — | | | — | | | Restructuring | | | 0.05 | | | — | | | — | | | — | | | — | | | Spin | | | 0.11 | | | — | | | — | | | — | | | — | | | Spin restructuring | | | 0.07 | | | (0.04) | | | — | | | — | | | — | | | Income tax adjustments | | | (0.18) | | | — | | | — | | | — | | | — | | | One-time impact of the new U.S. Tax Legislation | | | — | | | — | | | 0.64 | | | (0.01) | | | — | | | One-time impact of the CARES Act | | | — | | | — | | | — | | | — | | | 0.03 | | | Impact for Diluted Share Calculation(1) | | | — | | | — | | | — | | | 0.12 | | | — | | | Adjusted Non-GAAP Diluted EPS | | | $2.31 | | | $2.98 | | | $3.37 | | | $3.00 | | | $2.31 | |
(1)
| | For FY19, the adjusted weighted average shares assumes conversion of the preferred shares, as these results are more dilutive. The shares have been adjusted for the 4.7 million share conversion and the preferred dividend has been adjusted out. |
| Net Sales (in millions) | | | $1,634.2 | | | $1,755.7 | | | $1,797.7 | | | $2,494.5 | | | $2,744.8 | | | Reported SG&A as a % of Net Sales | | | 22.1% | | | 20.6% | | | 23.5% | | | 20.7% | | | 17.6% | | | Reported SG&A (in millions) | | | 361.4 | | | 361.3 | | | 421.7 | | | 515.7 | | | 483.3 | | | Acquisition and integration costs | | | 10.0 | | | 4.0 | | | 62.9 | | | 82.3 | | | 38.8 | | | Spin | | | 10.0 | | | — | | | — | | | — | | | — | | | Adjusted SG&A | | | 341.4 | | | 357.3 | | | 358.8 | | | 433.4 | | | 444.5 | | | Adjusted SG&A as a % of Net Sales | | | 20.9% | | | 20.4% | | | 20.0% | | | 17.4% | | | 16.2% | |
| Earnings before income taxes (in millions) | | | $165.7 | | | $273.3 | | | $175.2 | | | $73.1 | | | $67.7 | | | Other items, net | | | (9.1) | | | (5.0) | | | (6.6) | | | (14.3) | | | 2.0 | | | Interest expense | | | 54.3 | | | 53.1 | | | 98.4 | | | 226.0 | | | 195.0 | | | Loss on extinguishment of debt | | | — | | | — | | | — | | | — | | | 94.9 | | | Gain on sale of real estate | | | — | | | (16.9) | | | (4.6) | | | — | | | — | | | Restructuring | | | 2.5 | | | — | | | — | | | — | | | — | | | Spin Restructuring | | | 5.8 | | | (3.8) | | | — | | | — | | | — | | | Acquisition and integration costs (in SG&A, COGS and R&D) | | | 18.1 | | | 5.1 | | | 63.1 | | | 142.1 | | | 72.1 | | | Spin-Off (in SG&A and COGS) | | | 10.4 | | | — | | | — | | | — | | | — | | | Restructuring (in COGS) | | | 2.4 | | | — | | | — | | | — | | | — | | | Adjusted Operating Profit | | | $250.1 | | | $305.8 | | | $325.5 | | | $426.9 | | | $431.7 | |
A-2 Energizer Holdings, Inc. 20182020 Proxy Statement
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Appendix A
RECONCILIATIONTABLE OF NON-GAAP FINANCIAL MEASURES CONTENTS
| | | | | | | | | | | | | | | | | | | | | | | | | | | FY 2016 | | | % Chg | | | FY 2017 | | | % Chg | | | FY 2018 | | | % Chg | | | | | | | | | Net Sales - Prior Year (in millions) | | $ | 1,631.6 | | | | | | | $ | 1,634.2 | | | | | | | $ | 1,755.5 | | | | | | | | | | | | | Organic | | | 49.8 | | | | 3.1 | % | | | 49.9 | | | | 3.1 | % | | | 22.5 | | | | 1.3 | % | | | | | | | | Impact of Acquisitions | | | 32.3 | | | | 2.0 | % | | | 83.1 | | | | 5.1 | % | | | 2.3 | | | | 0.1 | % | | | | | | | | Change in Argentina Operations | | | (3.5 | ) | | | (0.2 | %) | | | 2.6 | | | | 0.2 | % | | | (1.9 | ) | | | (0.1 | %) | | | | | | | | Change in Venezuela Operations | | | (8.5 | ) | | | (0.5 | %) | | | — | | | | 0.0 | % | | | — | | | | 0.0 | % | | | | | | | | International go to market | | | (14.7 | ) | | | (0.9 | %) | | | — | | | | 0.0 | % | | | — | | | | 0.0 | % | | | | | | | | Impact of Currency | | | (52.8 | ) | | | (3.3 | %) | | | (14.3 | ) | | | (1.0 | %) | | | 19.1 | | | | 1.1 | % | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Net Sales - Current Year | | $ | 1,634.2 | | | | 0.2 | % | | $ | 1,755.5 | | | | 7.4 | % | | $ | 1,797.5 | | | | 2.4 | % |
| Net Earnings (in millions) | | | $127.7 | | | $201.5 | | | $93.5 | | | $64.7 | | | $46.8 | | | Income tax provision | | | 38.0 | | | 71.8 | | | 81.7 | | | 8.4 | | | 20.9 | | | Earnings before taxes | | | $165.7 | | | $273.3 | | | $175.2 | | | $73.1 | | | $67.7 | | | Interest expense | | | 54.3 | | | 53.1 | | | 98.4 | | | 226.0 | | | 195.0 | | | Loss on extinguishment of debt | | | — | | | — | | | — | | | — | | | 94.9 | | | Depreciation and Amortization | | | 34.3 | | | 50.2 | | | 45.1 | | | 92.8 | | | 111.9 | | | EBITDA | | | $254.3 | | | $376.6 | | | $318.7 | | | $391.9 | | | $469.5 | | | Restructuring | | | 4.9 | | | — | | | — | | | — | | | — | | | Spin-Off Costs | | | 10.4 | | | — | | | — | | | — | | | — | | | Spin-Off Restructuring | | | 5.8 | | | (3.8) | | | — | | | — | | | — | | | Gain on Sale of Real Estate | | | — | | | (16.9) | | | (4.6) | | | — | | | — | | | Acquisition and Integration Costs | | | 10.0 | | | 8.4 | | | 42.7 | | | 122.8 | | | 68.0 | | | Settlement loss on Pension Plan Terminations | | | — | | | — | | | 14.1 | | | 3.7 | | | — | | | Share-Based Payments | | | 20.4 | | | 24.3 | | | 28.2 | | | 27.1 | | | 24.5 | | | Adjusted EBITDA | | | $314.0 | | | $388.6 | | | $399.1 | | | $545.5 | | | $562.0 | |
| Net Sales — Prior Year (in millions) | | | $1,631.6 | | | | | | $1,634.2 | | | | | | $1,755.7 | | | | | | $1,797.7 | | | | | | $2,494.5 | | | | | | Organic | | | 49.8 | | | 3.1% | | | 49.9 | | | 3.1% | | | 22.5 | | | 1.3% | | | 73.4 | | | 4.1% | | | 61.4 | | | 2.5% | | | Impact of Battery Acquisition | | | — | | | 0% | | | — | | | 0% | | | — | | | 0% | | | 338.9 | | | 18.9% | | | 125.5 | | | 5.0% | | | Impact of Auto Care Acquisition | | | — | | | 0% | | | — | | | 0% | | | — | | | 0% | | | 315.8 | | | 17.6% | | | 85.1 | | | 3.4% | | | Impact of Nu Finish Acquisition | | | — | | | 0% | | | — | | | 0% | | | 2.3 | | | 0.1% | | | 5.9 | | | 0.3% | | | — | | | 0% | | | Impact of 2016 Auto Care Acquisition | | | 32.3 | | | 2.0% | | | 83.1 | | | 5.1% | | | — | | | 0% | | | — | | | 0% | | | — | | | 0% | | | Change in Argentina Operations | | | (3.5) | | | -0.2% | | | 2.6 | | | 0.2% | | | (1.9) | | | -0.1% | | | (4.5) | | | -0.3% | | | 1.6 | | | 0.1% | | | Change in Venezuela Operations | | | (8.5) | | | -0.5% | | | — | | | 0% | | | — | | | 0% | | | — | | | 0% | | | — | | | 0% | | | International go to market | | | (14.7) | | | -0.9% | | | — | | | 0% | | | — | | | 0% | | | — | | | 0% | | | — | | | 0% | | | Impact of Currency | | | (52.8) | | | -3.3% | | | (14.1) | | | -1.0% | | | 19.1 | | | 1.1% | | | (32.7) | | | -1.8% | | | (23.3) | | | (1.0)% | | | Net Sales — Current Year | | | $1,634.2 | | | 0.2% | | | $1,755.7 | | | 7.4% | | | $1,797.7 | | | 2.4% | | | $2,494.5 | | | 38.8% | | | $2,744.8 | | | 10.0% | |
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| | Energizer Holdings, Inc. 20182020 Proxy Statement A-3
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TABLE OF CONTENTS
Energizer Holdings, Inc. 533 Maryville University Drive St. Louis, MO 63141 (314) 985-2000 www.energizerholdings.com Energizer® Holdings, Inc.
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DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | The Board of Directors recommends you vote FOR the following:
| | | | | | | | | | | | | | | 1. | | Election of Directors | | | | | | | | | | | | | | | Nominees
| | For
| | Against
| | Abstain
| | | | | | | | | | | 1A | | Bill G. Armstrong | | ☐ | | ☐ | | ☐ | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | For | | Against | | Abstain | | | | | 1B | | Alan R. Hoskins | | ☐ | | ☐ | | ☐ | | | | 1I | | Robert V. Vitale | | ☐ | | ☐ | | ☐ | | | | | 1C
| | Kevin J. Hunt
| | ☐
| | ☐
| | ☐
| | | | The Board of Directors recommends you vote FOR proposals 2 and 3. | | For | | Against | | Abstain | | | | | | | | | | | | | | | | | | 1D | | James C. Johnson | | ☐ | | ☐ | | ☐ | | | | 2 | | advisory, non-binding vote on executive compensation | | ☐ | | ☐ | | ☐ | | | | | | | | | | | | | | | | | | | | 1E | | W. Patrick McGinnis | | ☐ | | ☐ | | ☐ | | | | 3 | | to ratify the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for fiscal 2019 | | ☐ | | ☐ | | ☐ | | | | | | | 1F
| | Patrick J. Moore
| | ☐
| | ☐
| | ☐
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1G
| | J. Patrick Mulcahy
| | ☐
| | ☐
| | ☐
| | | | NOTE: to act upon such other matters as may properly come before the meeting
| | | | | | | | | | | | | | | | | | | | | | | | | | 1H | | Nneka L. Rimmer | | ☐ | | ☐ | | ☐ | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Yes | | No | | | | | | | | | | Please indicate if you plan to attend this meeting | | ☐ | | ☐ | | | | | | | | Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name, by authorized officer.
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2019 ANNUAL SHAREHOLDERS’ MEETING ADMISSION TICKET
| | ENERGIZER HOLDINGS, INC.
| | 2019 ANNUAL SHAREHOLDERS’ MEETING | | January 28, 2019
8:00 a.m. Central Time
Energizer Global Headquarters
533 Maryville University Drive
St. Louis, Missouri 63141
| | Please present this ticket and photo identification for admittance to the Annual Meeting.
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Important Notice Regarding the Availability of Proxy Materials for the Annual Shareholders’ Meeting: The Notice & Proxy Statement, Annual Report are available atwww.proxyvote.com
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| | | | | | | | | | | | | | | | | | ENERGIZER HOLDINGS, INC.
Annual Shareholders’ Meeting
January 28, 2019 8:00 AM Central Time
This proxy is solicited by the Board of Directors
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| | The shareholders hereby appoint A. Hoskins and H. Kim, or either of them, as proxies, each with the power to appoint (his/her) substitute, and hereby authorizes them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Common Stock of ENERGIZER HOLDINGS, INC. that the shareholder(s) is/are entitled to vote at the Annual Shareholders’ Meeting to be held at 8:00 AM, Central Time on January 28, 2019, at Energizer Global Headquarters 533 Maryville University Drive St. Louis, Missouri 63141, and any adjournment or postponement thereof.
This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors’ recommendations.
Continued and to be signed on reverse side
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