UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule14a-101)
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant ☒ Filed by a Party other than the Registrant ☐
Check the appropriate box:
☐ | Preliminary Proxy Statement | |
☐ | Confidential, for Use of the Commission Only (as permitted by Rule14a-6(e)(2)) | |
☒ | Definitive Proxy Statement | |
☐ | Definitive Additional Materials | |
☐ | Soliciting Material under §240.14a-12 |
STANDEX INTERNATIONAL CORPORATION
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
☒ | No fee required. | |||
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Fee paid previously with preliminary materials. | ||||
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Guide to Standex’s Proxy StatementGUIDETO STANDEX’S PROXY STATEMENT
2 | Invitation to 2019 Annual Meeting of Shareholders | INDEX OF FREQUENTLY REQUESTED INFORMATION | ||||
3 | Notice of Annual Meeting of Shareholders | |||||
4 | Proxy Statement Summary | |||||
9 | Proposal One: Election of Directors | 17 | Auditor’s Fees | |||
15 | Proposal Two: Advisory Vote on Executive Compensation | 19 | Board Leadership Structure | |||
16 | Proposal Three: Ratification of Independent Auditor | 45 | CEO Pay Ratio | |||
18 | Governance | 46 | Clawback Provision | |||
18 | 34 | Compensation Consultant | ||||
19 | 19 | Director Attendance | ||||
19 | 9 | Directors | ||||
19 | 19 | Director Independence | ||||
19 | 46 | Hedging Policy | ||||
20 | 28 | Stock Ownership | ||||
20 | 34 | Peer Group | ||||
20 | 44 | Perquisites | ||||
21 | 46 | Pledging Policy | ||||
22 | 21 | Risk Oversight | ||||
23 | 57 | Shareholder Proposals | ||||
23 | Compensation Committee Interlocks and Insider Participation in Compensation Decisions | 45 | Stock Ownership Guidelines | |||
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INDEX OF COMMONLY USED ACRONYMS | |||||
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25 | BPP | Balanced Performance Plan | ||||
25 | CHRO | Chief Human Resources Officer | ||||
27 | CIC | Change in Control | ||||
28 | CLO | Chief Legal Officer | ||||
30 | Compensation Discussion & Analysis | EBIT | Earnings Before Income Tax | |||
30 31 | EBITDA | Earnings Before Income Tax, Depreciation & Amortization | ||||
34 | EPS | Earnings Per Share | ||||
35 | GAAP | Generally Accepted Accounting Principles | ||||
45 | IRC | Internal Revenue Code | ||||
47 | IRR | Internal Rate of Return | ||||
48 | Compensation Tables | IRS | Internal Revenue Service | |||
48 | LTIP | Long-Term Incentive Plan | ||||
50 | MSPP | Management Stock Purchase Plan | ||||
51 | N&CG | Nominating & Corporate Governance | ||||
51 | NEO | Named Executive Officer | ||||
52 | NYSE | New York Stock Exchange | ||||
52 | OIP | 2018 Omnibus Incentive Plan | ||||
53 | PCAOB | Public Company Accounting Oversight Board | ||||
56 | PSUs | Performance Share Units | ||||
56 | ROIC | Return on Invested Capital | ||||
57 | RSAs | Restricted Stock Awards | ||||
57 | RSUs | Restricted Stock Units | ||||
58 | SEC | Securities and Exchange Commission | ||||
58 | TSR | Total Shareholder Return | ||||
60 | TRIR | Total Recordable Incident Rate |
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Communications, Shareholder Proposals & Nominations and Company Documents | 63 | |||
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Invitation to 2019 Annual Meeting of ShareholdersINVITATIONTO 2022 ANNUAL MEETINGOF SHAREHOLDERS
Tuesday, October 22, 201925, 2022
9:00 a.m., local time
Standex International Corporation Corporate Headquarters
1123 Keewaydin Drive, Suite 300, Salem, New Hampshire 03079
Dear Shareholder,
We cordially invite you to attend Standex’s Annual Meeting of Shareholders. We hope that you will join me, our Board of Directors, and other shareholders at the meeting. The attached Notice of Annual Meeting of Shareholders and Proxy Statement contain information about the business that will be conducted at the meeting. Following the meeting, I will present information on Standex’s operations and welcome any questions from shareholders.
Your vote is important to us! If you plan on attending the meeting, you may vote your shares in person. If you cannot vote in person, we urge you to vote via your proxy card, over the phone or on the Internet prior to the meeting. Detailed instructions on how to vote are found on page 56.62.
Thank you in advance for voting your shares, and thank you for your continued support of Standex.
Sincerely,
David Dunbar President/CEO Chair, Board of Directors |
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Notice of Annual Meeting of ShareholdersNOTICEOF ANNUAL MEETINGOF SHAREHOLDERS
The 20192022 Annual Meeting of Shareholders (the “Annual Meeting”) of Standex International Corporation (the “Company” or “Standex”) will be held on Tuesday, October 22, 201925, 2022 at 9:00 a.m., local time, at the Company’s Corporate Headquarters, located at 1123 Keewaydin Drive, Suite 300, Salem, New Hampshire 03079.
You are receiving these proxy materials in connection with the solicitation of proxies by the Board of Directors (the “Board”) of Standex, International Corporation, a Delaware corporation, to be voted at the 20192022 Annual Meeting and any continuation, adjournment or postponement thereof.
Shareholders of record at the close of business on August 30, 201931, 2022 are entitled to vote at the meeting, either in person or by proxy, on the following matters, as well as the transaction of any other business properly presented at the Annual Meeting:
Item 1 The election of two directors to hold office for three-year terms ending on the date of the annual meeting in 2022; Item 2 An advisory vote on the Company’s executive compensation;Item 3 Ratification of the appointment of Grant Thornton LLP as the Company’s independent auditor for FY 2020.
On September 11, 2019,9, 2022, we began to mail our shareholders either a notice containing instructions on how to access this Proxy Statement and our Annual Report through the Internet, or a printed copy of these materials. We have provided each shareholder with a Notice of Internet Availability of Proxy Materials (the “Notice”), which encourages shareholders to review all proxy materials and our annual report and vote online atwww.envisionreports.com/sxi. We believe that reviewing materials online reduces our costs, eliminates surplus printed materials and generally reduces the environmental impact of our Annual Meeting. If you would like to receive a printed copy of our proxy materials, please follow the instructions contained in the Notice.
All proxy solicitation costs are paid by the Company. In addition to proxy solicitations made by mail, the Company’s directors and officers may solicit proxies in person or by telephone.
Your vote is important. Whether or not you plan to attend the Annual Meeting, we hope that you will vote your shares as soon as possible. We encourage you to vote via the Internet, since it is convenient and significantly reduces postage and processing costs. You may also vote via telephone or by mail if you received paper copies of the proxy materials. Instructions regarding the methods of voting are included in the Notice, the proxy card and this Proxy Statement on page 62.
By Order of the Proxy Statement.Board of Directors,
Alan J. Glass, Secretary
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IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SHAREHOLDER MEETING TO BE HELD ON OCTOBER | As permitted by the SEC, the |
Proxy Statement SummaryPROXY STATEMENT SUMMARY
This summary contains a general overview of this Proxy Statement. It highlights information contained elsewhere in this Proxy Statement and is meant to be used as a quick reference. This summary does NOT contain all of the information that you should consider before voting. You should read the entire Proxy Statement carefully before voting.
2019 Annual Meeting
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You are receiving these proxy materials in connection with the solicitation of proxies by the Board of Directors of Standex International Corporation, a Delaware corporation, to be voted at the 20192022 Annual Meeting and any continuation, adjournment or postponement thereof.
On September 11, 2019,9, 2022, we began to mail our shareholders either a notice containing instructions on how to access this Proxy Statement and our Annual Report through the Internet, or a printed copy of these materials. The Notice explains how you may access and review the proxy materials and how you may submit your proxy via the Internet. If you would like to receive a printed copy of our proxy materials, please follow the instructions contained in the Notice.
All proxy solicitation costs are paid by the Company. In addition to proxy solicitations made by mail, the Company’s directors and officers may solicit proxies in person or by telephone.
Agenda and Voting Recommendations
AGENDAAND VOTING RECOMMENDATIONS |
Item | Proposals | Board Vote Recommendation | ||
1 | Election of Directors | FOR | ||
2 | Advisory Vote on Executive Compensation | FOR | ||
3 | Ratification of Auditors | FOR |
How to Vote If you hold shares as of the Record Date (Aug. 30, 2019), you can vote your shares using any of the following methods: By telephone at By completing, By appearing in person and either delivering By internet at 1-800-652-VOTE signing and returning a completed proxy card or voting by ballot at www.envisionreports.com/sxi (8683) your proxy card the Annual Meeting
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BOARD NOMINEES & CONTINUING DIRECTORS |
Age | Years of Tenure | Term Expiration | Committee Memberships | |||||||||
Name |
A | C | N&CG | |||||||||
THOMAS E. CHORMAN INDEPENDENT Chief Executive Officer, Solar LED Innovations, LLC | 68 | 18 | 2022 | |||||||||
THOMAS J. HANSEN LEAD INDEPENDENT DIRECTOR Former Executive Vice Chairman, Illinois Tool Works, Inc. | 73 | 9 | 2022 | |||||||||
CHARLES H. CANNON, JR. INDEPENDENT Former Executive Chairman and Chief Executive Officer, JBT Corporation | 70 | 18 | 2023 | |||||||||
DAVID DUNBAR President and Chief Executive Officer, Standex International Corporation | 61 | 8 | 2023 | |||||||||
MICHAEL A. HICKEY INDEPENDENT Former Executive Vice President and President of Global Institutional, Ecolab, Inc. | 61 | 5 | 2023 | |||||||||
ROBIN J. DAVENPORT INDEPENDENT Vice President of Corporate Finance, Parker Hannifin Corporation | 60 | 1 | 2024 | |||||||||
JEFFREY S. EDWARDS* INDEPENDENT Chairman and Chief Executive Officer, Cooper Standard Holdings, Inc. | 60 | 8 | 2024 | |||||||||
B. JOANNE EDWARDS* INDEPENDENT Former Senior Vice President and General Manager, Eaton Corporation Plc. | 66 | 4 | 2024 |
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C Compensation Committee | N&CG Nominating & Corporate Governance Committee | Chair Member | |||
* Jeffrey S. Edwards and B. Joanne Edwards are not related. |
Class & Term Expiration | Name | Age | Director Since | Independence | Committee Memberships | |||||||||
Audit | Comp. | N&CG* | ||||||||||||
Class III Nominee – 2019 | Thomas E. Chorman | 65 | 2004 | Independent Director | ● | ● | Chair | |||||||
Class III Nominee – 2019 | Thomas J. Hansen | 70 | 2013 | Lead Independent Director | Chair | |||||||||
Class II – 2020 | David Dunbar | 58 | 2014 | Standex CEO/ Not Independent | ||||||||||
Class II – 2020 | Michael A. Hickey | 58 | 2017 | Independent Director | ● | |||||||||
Class II – 2020 | Daniel B. Hogan | 76 | 1983 | Independent Director | ● | |||||||||
Class I – 2021 | Charles H. Cannon, Jr. | 67 | 2004 | Independent Director | ● | ● | ||||||||
Class I – 2021 | Jeffrey S. Edwards** | 57 | 2014 | Independent Director | Chair | ● | ||||||||
Class I – 2021 | B. Joanne Edwards** | 63 | 2018 | Independent Director | ● | ● |
* Nominating & Corporate Governance Committee
** Jeffrey S. Edwards and B. Joanne Edwards are not related.
Director Snapshot
Average director tenure 11.4 YEARS Average age of directors 65 Tenure of fewer than 5 years 2 DIRECTORS 7 of our 8 directors are independent
Corporate Governance Highlights
CORPORATE GOVERNANCE HIGHLIGHTS |
We are committed to strong corporate governance practices, which promote the long-term interests of shareholders, strengthen financial integrity and hold our Board and management accountable. The highlights of our corporate governance practices include the following:
All non-employee directors are independent |
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Named Executive Officer | Actual Salary ($) | Stock Awards ($) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($) | Total ($) 1 | |||||||||||||||
David Dunbar President & CEO | 869,130 | 3,435,322 | 675,770 | 155,513 | 5,135,735 | |||||||||||||||
Ademir Sarcevic Vice President, CFO & Treasurer | 449,798 | 679,507 | 447,954 | 29,098 | 1,606,357 | |||||||||||||||
Alan J. Glass Vice President, CLO & Secretary | 375,984 | 607,643 | 148,003 | 51,037 | 1,182,666 | |||||||||||||||
Paul C. Burns Vice President of Business Development & Strategy | 375,984 | 451,256 | 265,769 | 20,164 | 1,113,173 | |||||||||||||||
Flavio Maschera Chief Innovation & Technology Officer | 348,312 | 432,713 | 123,056 | 14,753 | 918,834 |
Note: | This table provides the summary compensation information for FY 2022. The Summary Compensation Table and associated footnotes may be found starting on page 53. |
1 | As reported in the Summary Compensation Table. |
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2022 PROXY STATEMENT | 7 |
Checklist of Compensation Practices What we do What we don’t do Executive compensation is tied to performance Caps on incentive payouts Strategic performance metrics Compensation Committee has the right to “claw back” awards Benchmarks determined based on peers of comparable size, complexity & industry Encourage long range planning No excise tax gross-up provisions No single-trigger change in control severance benefits No hedging or pledging of shares Our incentive programs do not encourage excessive risk taking No excessive perquisites
AUDIT |
The Audit Committee has approved Deloitte & Touche LLP (“Deloitte”) to serve as our independent registered public accounting firm for the 2023 fiscal year. Deloitte has served as the Company’s independent auditors since August 26, 2020. During this time, there have been no disagreements between the Company and Deloitte on any matter of accounting principles or practices, financial statement disclosures or auditing scope or procedure. Also, during this time, Deloitte’s report on the Company’s financial statements did not contain any adverse opinion or a disclaimer of opinion, nor was it qualified or modified as to uncertainty, audit scope or accounting principles.
The following are the aggregate audit and non-audit fees billed to Standex by Deloitte, the member firms of Deloitte Touche Tohmatsu, and their respective affiliates for FY 2021 and FY 2022. A full explanation of the types of fees and Deloitte’s role is contained in “Ratification of Independent Auditors” starting on Compensation Program Designpage 15.
Type of Fees | FY 2021 ($)* | FY 2022 ($)* | ||||||
Audit Fees | 1,371,000 | 1,422,000 | ||||||
Audit-Related Fees | - | - | ||||||
Tax Fees | 94,000 | 34,000 | ||||||
All Other Fees | - | 113,000 | ||||||
Total Fees | 1,465,000 | 1,569,000 |
* | Amounts have been rounded to the nearest thousand. |
8 | 2022 PROXY STATEMENT |
Our Board currently consists of eight directors. We have three classes of directors, with each class being as equal in size as possible. The term of each class is three years and class terms expire on a rolling basis, so that one class of directors is elected each year.
The two director nominees, Thomas E. Chorman and Thomas J. Hansen, are current members of the Board. Their term is set to expire at the 2022 Annual Meeting. The Board believes that Mr. Chorman and Mr. Hansen possess the skills, abilities and experience to continue serving as directors and has nominated them to serve on the Board for an additional three-year term, to expire at the 2025 annual meeting.
For the foregoing, the Board recommends that shareholders elect Mr. Chorman and Mr. Hansen as Class III directors for a three-year term, expiring at the 2025 annual meeting.
BOARDOF DIRECTORS MEMBERSHIP CRITERIA
The Board and the Nominating and Corporate Governance Committee believe that there are general qualifications that all directors must exhibit and other key qualifications and experiences that should be represented on the Board as a whole, but not necessarily by each individual director.
QUALIFICATIONS REQUIREDOF ALL DIRECTORS
The Board and the Nominating and Corporate Governance Committee require that each director be a recognized person of high integrity with a proven record of success in his or her field, and be able to devote the time and effort necessary to fulfill his or her responsibilities to the Company. Each director must demonstrate innovative thinking, familiarity with and respect for corporate governance requirements and practices, an appreciation of multiple global cultures and a commitment to sustainability and to dealing responsibly with social issues. In addition, potential director candidates are interviewed to assess intangible qualities, including the individual’s ability to engage in constructive deliberations, by asking difficult questions, working collaboratively, and respecting differing views of other Board members.
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Compensation Mix
CEO COMPENSATION MIX AVERAGE NEO COMPENSATION MIX 20% 17% 24% 19% 42% 30% 26% At Risk At Risk 58% 76% 22% Base Salary Annual Incentive LTIP PSU LTIP RSU Fixed Pay At Risk
2019 Compensation Summary
Name & Principal Position | Salary ($) | Stock Awards ($) | Non-Equity Incentive Plan Compensation ($) | Change in Value & Non-Qualified | All Other Compensation ($) | Total ($) | ||||||
David Dunbar President & CEO
| 821,246
| 2,042,329
| 240,177
| (2,274)
| 144,820
| 3,246,298
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Thomas D. DeByle Vice President, CFO & Treasurer | 420,786 | 838,916 | 82,040 | 11,514 | 68,456 | 1,421,712 | ||||||
Alan J. Glass Vice President, CLO & Secretary | 347,443 | 426,772 | 53,226 | 231 | 14,787 | 842,460 | ||||||
Paul C. Burns Vice President of Strategy & Business Development | 342,068 | 609,530 | 165,088 | 527 | 22,337 | 1,139,550 | ||||||
Annemarie Bell Vice President of Human Resources | 207,240 | 21,443 | 29,646 | - | 7,474 | 265,803 | ||||||
Ross McGovern Former Vice President & CHRO | 296,934 | 209,378 | - | (1,033) | 6,259 | 511,538 |
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The following are the aggregate audit andnon-audit fees billed to Standex by Grant Thornton LLP (“Grant Thornton”) for FYs 2018 and 2019. A full explanation of the types of fees and Grant Thornton’s role is contained in “Proposal Three: Ratification of Independent Auditor” on starting on page 16.
Type of Fees | 2018 ($) * | 2019 ($) * | ||||||||||
Audit Fees | 1,560,000 | 1,713,000 | ||||||||||
Audit-Related Fees | 251,000 | 361,000 | ||||||||||
Tax Fees | 24,000 | 21,000 | ||||||||||
All Other Fees | 2,000 | 2.000 | ||||||||||
Total Fees | 1,837,000 | 2,096,000 |
* Amounts have been rounded to the nearest thousand.
What our Audit Committee considered when engaging Grant Thornton:
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Class III Director NomineesBOARD COMPOSITION & REFRESHMENT
The Board regularly reviews the skills, experience and background that it believes are desirable to be represented on the Board. On an annual basis, the Board reviews each director’s skills and assesses whether there are gaps that need to be filled. As a result, recruitment is an ongoing activity. A snapshot of our directors’ skills, including director nominees, is below, while the full skills matrix can be found under “Board Self-Assessment & Skills Matrix” on page 22.
The Board aims to strike a balance between the experience that comes from long-term service on the Board with the new perspective that new Board members bring, while being sensitive to the benefits of gender and racial diversity. The Board also has a mandatory retirement policy, under which no director may stand for re-election if he or she has reached the age of 75. We believe this balanced approach creates a renewed perspective that is beneficial to shareholders. Please refer to “Identifying and Evaluating Candidates for Board Membership” on page 23 for further information.
SNAPSHOTOF 2022 DIRECTOR NOMINEESAND CONTINUING DIRECTORS
DEMOGRAPHICS
SKILLS
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Class II Directors – Term Expiring 2020
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Class I Directors – Term Expiring 2021
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Required Vote & Recommendation2022 DIRECTOR NOMINEES
The following is biographical information for each director nominee and each continuing director. The information includes names, ages, principal occupations for at least the past five years, the year in which each director joined our Board and certain other information. The information is current as of September 9, 2022, except for each director’s age, which is current as of October 25, 2022.
CLASS III DIRECTORS - TERM EXPIRING 2025:
REQUIRED VOTE & RECOMMENDATION
OurBy-Laws require that, in an uncontested election, each director be elected by a majority of the votes cast. A majority of votes cast means that the number of sharesvotes cast “FOR” a director’s election exceeds the number of votes cast “AGAINST” that director. Shareholders that either mark “ABSTAIN” on the proxy card or otherwise abstain from voting will not be counted as either “FOR” or “AGAINST.” Brokernon-votes will not be counted as either “FOR” or “AGAINST.”
In the event that there is a contested election, each director will be elected by a plurality of the votes cast, which means the directors receiving the largest number of “FOR” votes will be elected to the open positions.
In the event that any nominee becomes unavailable, the Board may either choose a substitute or postpone filling the vacancy until a qualified candidate is identified. If there is a substitute, the individuals acting under your proxy may vote for the election of a substitute. The nominees have indicated their willingness to serve as directors and we have no reason to believe that anyeither nominee will become unavailable.
The Board of Directors recommends that you vote “FOR” the election of each nominee and set the number of directors at 8.nominee.
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CONTINUING DIRECTORS
CLASS II DIRECTORS - TERM EXPIRING 2023:
12 |
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CLASS I DIRECTORS - TERM EXPIRING 2024:
Although this vote isnon-binding, the Board values the opinions of the Company’s shareholders and will consider the outcome of the vote when making future compensation decisions for our named executive officers.
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2022 PROXY STATEMENT | 13 |
Required Vote
At each annual meeting, the Board provides shareholders with the opportunity to cast an advisory vote to approve the compensation of our named executive officers. Please see the “Summary Compensation Table” starting on page 53 for full details. This proposal, commonly known as a “Say on Pay” proposal, gives our shareholders the opportunity to endorse or not endorse our executive compensation programs and policies and the total compensation paid to our named executive officers. This advisory vote does not address any specific element of compensation, but rather the overall compensation of our named executive officers and our compensation philosophy, policies and practices, as detailed in the “Compensation Discussion & RecommendationAnalysis” starting on page 36.
Although this vote is non-binding, the Board values the opinions of the Company’s shareholders and will consider the outcome of the vote when making future compensation decisions for our named executive officers.
As described in more detail in the Compensation Discussion and Analysis (“CD&A”) section, we have designed our executive compensation programs to align the long-term interests of our executives with those of our shareholders, attract and retain talented individuals and reward current performance. A large portion of the compensation is tied to the Company’s performance and is paid in both performance and time-based equity. This closely aligns both the short-term and long-term interests of our executives with those of shareholders and drives the creation of shareholder value.
We encourage shareholders to review the CD&A, which describes our philosophy and business strategy underpinning the programs, the individual elements of the compensation programs and how our compensation plans are administered.
REQUIRED VOTE & RECOMMENDATION
Approval of this advisory proposal will require the affirmative vote of a majority of the votes cast in person or represented by proxy. Abstentions will not count as votes cast on this proposal, so abstentions will have no effect on the outcome. Brokernon-votes will not be considered to have voted on this proposal, so will have no effect on the outcome.
The advisory vote on executive compensation isnon-binding, therefore, our Board will not be obligated to take any compensation actions or adjust our executive compensation programs or policies as a result of the vote. Notwithstanding, the resolution will be considered passed with the affirmative vote of the majority of the votes cast at the Annual Meeting.
The Board recommends that you vote “FOR”“FOR” the followingnon-binding resolution: resolution:
RESOLVED, that the compensation of the Company’s named executive officers, as disclosed pursuant to Item 402 of RegulationS-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby APPROVED.
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Independent Auditor’s Fees
The following table summarizesAudit Committee has approved Deloitte & Touche LLP (“Deloitte”) to serve as our independent registered public accounting firm for the aggregate fees2023 fiscal year. Deloitte was appointed on August 26, 2020. The Company did not engage Deloitte at any time during the two years before the appointment for Grant Thornton’sany accounting-related matter. In the time since Deloitte’s appointment, Deloitte’s reports on the Company’s financial statements did not contain any adverse opinion or a disclaimer of opinion, nor was Deloitte’s opinion qualified or modified as to uncertainty, audit scope or accounting principles.
We are asking our shareholders to ratify the appointment of Deloitte as our independent registered public accounting firm. Although shareholder ratification is not required, the Board is submitting the proposal because we value our shareholders’ views on the Company’s independent auditor and as a matter of good corporate practice. In the event that our shareholders fail to ratify the appointment, the Audit Committee will investigate the reasons and consider selecting a different firm. Even if the selection is ratified, the Audit Committee may select a different independent auditor at any time during the year if it determines such a change would be in the best interests of the Company and its shareholders.
A representative from Deloitte will be available at the Annual Meeting to, as requested, make a statement, speak with shareholders or respond to appropriate questions.
PRE-APPROVAL POLICY
All services incurredperformed in FY 2022 were pre-approved by the Company. The Audit Committeepre-approved all of these audit andnon-audit fees in accordance with the Audit Committee’s charter. The pre-approval policy described above.requires the independent auditor to submit an itemization of the services to be provided and fees to be incurred during the fiscal year. The Audit Committee approves the scope and timing of the external audit plan and focuses on any matters that may affect the scope of the audit or the independence of the independent auditor. In that regard, the Audit Committee receives certain representations from the independent auditor regarding its independence and the permissibility, under the applicable laws and regulations, of any services provided.
2018 ($) * | 2019 ($) * | |||||||
Audit Fees(1) | 1,560,000 | 1,713,000 | ||||||
Audit-Related Fees(2) | 251,000 | 361,000 | ||||||
Tax Fees(3) | 24,000 | 21,000 | ||||||
All Other Fees(4) | 2,000 | 2,000 | ||||||
TOTAL FEES | 1,837,000 | 2,096,000 |
* Amounts haveOnce the initial audit plan has been roundedapproved, any requests for additional services or fees must be submitted to the nearest thousand.Audit Committee for approval. These additional services may not commence until the Audit Committee reviews and approves the request.
These requests for approval are normally evaluated during regularly scheduled Audit Committee meetings. However, if a request is submitted between meeting times, the Chair of the Audit Committee may approve the request pursuant to a delegation of authority. For the Chair of the Audit Committee, the approval authority is limited to services valued at less than $100,000. Any requests for services exceeding $100,000 must be approved by the full Audit Committee. If the Chair has exercised their approval authority, they must disclose all approval determinations to the full Audit Committee at the next regularly scheduled meeting. RELATIONSHIPWITH INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
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Relationship with Independent Registered Public Accounting Firm
The Audit Committee reviews all relationships between Grant Thorntonthe independent auditor and the Company, including the provision ofnon-audit services. Grant Thornton providesDeloitte has provided limitednon-audit services to the Company which are made up of agreed upon procedures performed in Ireland in connection with a government grant.related to tax compliance and tax advisory services.
The Audit Committee considered the effect of Grant Thornton’sDeloitte’s non-audit services in assessing its independence. After discussion with Company management and Grant Thornton,Deloitte, the Audit Committee concluded that the provision of these services was permitted under the rules and regulations concerning auditor independence.
Required Vote
2022 PROXY STATEMENT | 15 |
INDEPENDENT AUDITOR’S FEES
The following table summarizes the aggregate fees for audit and non-audit services incurred by the Company. The Audit Committee pre-approved all of these audit and non-audit fees in accordance with the pre-approval policy described above.
Type of Fees | FY 2021 ($)* | FY 2022 ($)* | Description | |||||||
Audit Fees | 1,371,000 | 1,422,000 | Fees for audit services performed during FY 2021 and FY 2022 relate to professional services rendered in connection with the annual audit of our consolidated financial statements and internal control over financial reporting; the reviews of the condensed consolidated financial statements performed in connection with each of our Quarterly Reports on Form 10-Q; and statutory audits required by foreign jurisdictions. | |||||||
Audit-Related Fees | - | - | ||||||||
Tax Fees | 94,000 | 34,000 | Fees for tax services during FY 2021 and FY 2022 consisted of fees billed for permissible professional services performed by Deloitte Tax LLP and its global member firm affiliates, an affiliate of Deloitte, for tax compliance, planning and advice. | |||||||
All Other Fees | - | 113,000 | All other fees relate to fees billed during FY 2022 related to transaction diligence services. | |||||||
Total Fees | 1,465,000 | 1,569,000 |
* | Amounts have been rounded to the nearest thousand. |
REQUIRED VOTE & RecommendationRECOMMENDATION
Approval of this advisory proposal will require the affirmative vote of a majority of the votes cast in person or represented by proxy. Abstentions will not count as votes cast on this proposal, so abstentions will have no effect on the outcome. Brokernon-votes will be considered as a vote “FOR” this proposal.
The Board recommends that you vote “FOR”“FOR” the ratification of the appointment of Grant ThorntonDeloitte & Touche LLP as the Company’s independent registered public accounting firm for the 20202023 fiscal year.
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The purpose of corporate governance is to ensure that we maximize shareholder value consistent with both applicable law and a business model of integrity, ethical practices and ethical practices. compliance with all applicable law.
As part of its duties to the Company, the Board monitors and oversees the proper safeguarding of the assets of the Company, the maintenance of appropriate financial and other internal controls and the Company’s compliance with applicable laws and regulations. Additionally, the Board monitors and oversees the governance practices of the CEO and senior management.
In order to serve the best interests of shareholders while carrying out its purpose, the Board has established internal guidelines — the Corporate Governance Guidelines — designed to promote effective oversight of the Company’s governance program and principles.
The Corporate Governance Guidelines set parameters forprinciples, beginning with the director recruiting process and the composition of Board committees. They also determine the formal review of the CEO, individual directors and the overall Board’s performance. These guidelines further establish targets for director equity ownership and age and retirement requirements. The guidelines also include delineated duties for the Lead Independent Director. The Board reviews these guidelines, the corporate laws of Delaware, the rules and listing standards of the NYSE and SEC regulations, as well as best practices recognized by governance authorities to benchmark the standards under which it operates.
Key Governance Materials Certification of Incorporation Charter for each Board committee By-Laws Code of Business Conduct Corporate Governance Guidelines Code of Ethics for Senior Financial Managementitself. You can access these materials in the Governance section of our website at by going to ir.standex.com in the “Governance” section. and clicking on “Governance.” See page 6064 for instructions on receiving copies of theseour corporate governance materials. Governance Highlights 7 out of 8 of our directors are independent Regular executive sessions of independent directors Audit, Compensation and Nominating and Corporate Governance committees are comprised solely of independent directors Annual board and committee self-evaluations Risk oversight by the full board and committees 62.5% of the directors are new since 2013 Ongoing review of optimal Board composition Board members participate in our Company-wide compliance and ethics training programs Corporate Governance Guidelines Independent compensation cnsultant reports directly to the compensation committee Lead Independent Director Stock ownership guidelines for directors and executive officers Policy against hedging and pledging of Company stock Code of Conduct applies to directors and all employees Annual advisory approval of executive compensation Board and committees may engage outside advisors independently of management
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Board Leadership StructureBOARD LEADERSHIP STRUCTURE
The Board recognizes that one of its key responsibilities is to evaluate and determine its optimal leadership structure in order to best serve shareholders’ interests. To ensure an efficient and high-functioning board, in 2016, the Board elected our President and CEO, David Dunbar, to serve as Chair of the Board. In its determination that Mr. Dunbar should serve in this role, our Board examined several factors and believed that Board independence and management oversight were effectively maintained through the Board’s composition of independent directors, the committee system and a seasoned and engaged Lead Independent Director. A combined CEO and Chair role serves as an effective bridge between the Board and senior management and also provides strong unified leadership of the Company.
Optimal Board leadership structure may change as circumstances warrant. The Board reviews its determination annually in accordance with the Corporate Governance Guidelines. This annual review allows the Board to maintain flexibility and promote the execution of the Company’s strategy, the independent oversight of senior management and the best interests of shareholders. In the event the Board determines that a different leadership structure is in the best interests of the Company and its shareholders, the Board will consider a change.
The delineated duties of the Lead Independent Director include calling and leading the executive sessions of independent directors; leading Board discussions regarding the CEO’s compensation and CEO succession planning; liaising betweenWithin the Board leadership structure are three distinct roles with specific duties and the CEO on particular issues brought up by the independent directors; providing feedback on information flow from management to the Board; and such otherresponsibilities. These duties and responsibilities are described below and are set forth in the Company’s By-Laws and Corporate Governance Guidelines.
CHAIROFTHE BOARD
u | Presides over meetings of the Board. |
u | Presides over meetings of shareholders. |
u | Consults and advises the Board and its committees on the business and affairs of the Company. |
u | Performs such other duties as may be assigned by the Board. |
CHIEF EXECUTIVE OFFICER
u | In charge of the affairs of the Company, subject to the overall direction and supervision of the Board and its committees and subject to such powers as reserved by the Board. |
LEAD INDEPENDENT DIRECTOR
u | Presides at all meetings of the Board at which the Chair of the Board is not present, including all executive sessions of independent directors. |
u | Encourages and facilitates active participation of all directors. |
u | Serves as a liaison between the independent directors and the Chair of the Board on particular issues brought up by independent directors. |
u | Calls and leads the executive sessions of independent directors. |
u | Leads the Board discussions regarding the CEO’s annual evaluation and succession planning. |
u | Provides feedback on information flow from management to the Board. |
u | Available to advise committee chairs in fulfilling their designated roles and responsibilities. |
u | Available for consultation and communication with shareholders, where appropriate and upon reasonable request. |
u | Performs such other functions as the Board or other directors may request. |
18 | 2022 PROXY STATEMENT |
The Board maintains four Committees:
Only independent directors are eligible to serve on the Audit, Compensation and Nominating & Corporate Governance (“N&CG”) Committees. Each committee is governed by a written charter. To view the charters of these committees, please go to ir.standex.com, click on “Governance,” then “Committee Charters.”
During FY 2022, the Board may request from timealso had an informal committee that met and discussed innovation and technology.
The Board recognized the significance of innovation and growth to time.the Company’s future and long-term strategy, and therefore decided to formally create the Innovation & Technology Committee at its July 2022 Board meeting. Since the committee was not formed until the beginning of FY 2023, the committee did not formally meet in FY 2022.
Meetings of the Board: Director Attendance
MEETING ATTENDANCE
Under our Corporate Governance Guidelines, directors have a duty to attend, whenever possible, all Board meetings and all committee meetings wherefor committees on which the director is a member.serves. The Board held 4 regular meetings in FY 2019.2022, while the committees of the Board held a total of 15 meetings. Each director attended at least 75%75 % of the meetings of the Board and each of the committees on which such director served during FY 2019.2022. All Board members attended the Company’s 20182021 annual meeting of shareholders. The Company anticipates that all of the Board members will attend the 20192022 Annual Meeting.
COMMITTEE STRUCTUREAND MEMBERSHIP
LEAD INDEPENDENT DIRECTOR CHAIR OF THE BOARD & CEO INDEPENDENT DIRECTORS
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Under our Corporate Governance Guidelines, theOur Board requires that at least a majority of directors either meet or exceed the independence requirements of the NYSE. These rules provide that, in order to be considered independent, each director or nominee does not have a material relationship with the Company, either directly or as a partner, shareholder, or officer of an organization that has a relationship with the Company. Furthermore, directorsdesignates Committee members and nominees cannot have any prohibited relationships, such as certain employment relationships, with the Company, its independent auditor or another organization that has an affiliated relationship with the Company.
The Board undertakes an annual evaluation of director independence. At its meeting on July 25, 2019, the Board affirmatively determined that, other than David Dunbar, the Company’s President and CEO, each member of the Board, including each nominee, meets the independence standards. In addition, all members of the Audit Committee satisfy the enhanced independence criteria required for members of audit committees, and all members of the Compensation Committee satisfy the enhanced independence criteria required for members of compensation committees.
Certain Relationships and Related Party Transactions
Daniel B. Hogan is the son of Daniel E. Hogan, who was aco-founder of the Company and served in various capacities with the Company, including President and CEO, through 1985, and then as a consultant from 1985 until his death in 1991. The Board determined that this familial relationship has not compromised Mr. Hogan’s ability to exercise independent judgment or to serve as a director.
Any transaction between the Company and its directors, executive officers, beneficial owners, and their immediate family members, is monitored closely. Proposed transactions in excess of $120,000 must be disclosed to the CLO. Furthermore, in the event a transaction is completed without the CLO’s knowledge, the transaction must be disclosed in an annual questionnaire that is completed and submitted to the CLO. During the past fiscal year and all prior periods, there have not been any such related party transactions.
Additionally, the Code of Conduct requires that all directors, executive officers and employees avoid engaging in any activity that might create a conflict of interest. All individuals are required to report any proposed transaction that might reasonably be perceived as creating a conflict of interest to their supervisor and/or the CLO. During the past fiscal year and all prior periods, there have not been any reports of such transactions.
Corporate Social Responsibility/Standex CARES
Standex is committed to corporate social responsibility through our own actions and through the actions of our supply chain. We have a Supplier Code of Conduct, available atir.standex.com, which sets forth our expectations for our suppliers. Specifically, we expect suppliers to conduct their businesses in an ethical manner, to act with integrity and to engage in behavior that respects human rights, promotes a safe and healthy work environment and is environmentally responsible and efficient.
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During the past fiscal year, nearlyone-third of all U.S. employees participated in the Standex CARES program. Our employees helped build homes and assembled beds for families and children exiting homelessness, and served meals for hungry neighbors at community kitchens, food pantries and homeless shelters. Additionally, our employees spent countless hours supporting local schools by coaching STEM teams, mentoring engineering club projects and donating school supplies to students in need. Standex applauds all of these efforts and congratulates our employees for their enthusiastic community spirit.
Additionally, almost 60% of our U.S. locations participated in Manufacturing Day, a day supported by the National Association of Manufacturers, in which our facilities open their doors to area students in order to show our communities what we do, and to inspire the next generation of employees who may consider a career opportunity at the Company.
We will continue to work with our employees to grow these engagement initiatives.
During the fiscal year, the Company continued its journey toward developing more sustainable facilities. We increased our awareness and efforts around recycling, energy efficiency, reduction of waste and process improvement. Construction of the new Electronics headquarters outside Cincinnati, Ohio was done using “green” materials and included exclusively LED lighting; low emissions windows; state of the art insulation and HVAC, along with other intiatives. Our Operational Excellence standard work processes continue to yield results for both improvements in production and employee focus on safety.
We place a particular emphasis on employee safety, with responsibility and accountability residing with each employee. Monthly safety calls with the Company CEO emphasizes this principle. Our footprint is global, and we continue to be aware of, and focusChairs based on the change that we can affect when we focus on improvements to our facilities and work practices.
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The CEO and other members of senior management are primarily responsible for managing the risks the Company faces. Our Enterprise Risk Management process is driven by our Corporate Governance Officer (a senior member of our internal legal department), in cooperation with the Company’s Director of Internal Audit, Risk Manager, CFO and other members of senior management. Risks that are identified are categorized by classes, where Class 1 risks are high risks that are known, obvious and are actively being managed; Class 2 risks are risks that have a high potential impact but have lower visibility and lower residual risk; and Emerging risks are risks that are a potential threat and are being monitored closely for any developments. In the past fiscal year, velocity (how quickly an identified risk could affect each business) was also examined. Further, each business, through an iterative process, was required to assess and rank its top ten business risks and develop mitigation plans. This risk assessment was presented to the full Board for review and discussion.
The Board’s responsibility regarding risk management is to oversee the Company’s risk management policies and procedures and provide guidance on the overall effectiveness of the policies and procedures. To fulfill this responsibility, the Audit Committee receives reports, on a quarterly basis, regarding the risks that have been identified and the measures that are being taken. The Audit Committee also receives reports on a regularly scheduled quarterly basis, which can be more frequent in the event of a material concern. These reports are presented by our Corporate Governance Officer and our CLO regarding material litigation, legal loss contingencies and calls received on our whistleblower hotline. The Board is regularly informed through the Audit Committee’s reports and through direct communications from senior management.
The Board and each committee’s risk oversight roles, as provided in their respective charters, are evaluated on an annual basis to determine whether the risk oversight responsibilities are being discharged effectively. The Board undertook this evaluation in FY 2019 and found that changing the current structure of risk oversight was not warranted.
BOARD OF DIRECTORS Oversees Major Risks Strategic & Competitive Financial Operational Legal & Regulatory Cybersecurity Succession Planning Audit Committee Primary Risk Oversight Financial statement integrity & reporting Major financial & other business risk exposure Oversight of the independent auditor Legal, regulatory & compliance Internal controls Compensation Committee Primary Risk Oversight Employee compensation practices and policies Administration of compensation policies and programs CEO Succession planning Nominating & Corporate Governance Committee Primary Risk Oversight Governance structure and processes Legal and policy matters concerning corporate governance Board membership candidacy MANAGEMENT Key Risk Responsibilities Business units identify and manage business risks Design of risk framework, including risk appetite and boundaries Internal Audit provides independent assurance regarding the design and effectiveness of our internal controls
Audit Committee Thomas J. Hansen, Chair Charles H. Cannon, Jr. Thomas E. Chorman B. Joanne Edwards N&CG Committee Thomas E. Chorman, Chair B. Joanne Edwards Jeffrey S. Edwards Daniel B. Hogan Board of Directors Jeffrey S. Edwards, Chair Charles H. Cannon, Jr. Thomas E. Chorman Michael A. Hickey
The Board maintains an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee (“N&CG Committee”). Only independent directors are eligible to serve on these Board committees. Each committee is governed by a written charter. The charters of the Audit Committee, Compensation Committee and N&CG Committee are available on the Company’s website atir.standex.com in the “Governance” section.
recommendations. The following table shows the composition of each committee for FY 2019:2022:
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DAVID DUNBAR |
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CHARLES H. CANNON, JR. INDEPENDENT | ||||||||||||
THOMAS E. CHORMANINDEPENDENT | ||||||||||||
ROBIN J. DAVENPORTINDEPENDENT | ||||||||||||
B. JOANNE EDWARDSINDEPENDENT | ||||||||||||
JEFFREY S. EDWARDSINDEPENDENT | ||||||||||||
THOMAS J. HANSENINDEPENDENT | ||||||||||||
MICHAEL A. HICKEYINDEPENDENT |
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C Compensation Committee | Governance Committee | Member |
Under our long-term incentive plans, the Compensation Committee may delegate some decision-making authority regarding awards to the CEO. This authority is limited to granting and approving awards for designated individuals, as long as such individuals are not officers of the Company, as determined by the Board. Currently, the Compensation Committee has delegated authority to Mr. Dunbar to grant such awards subject to a pool limit authorized by the Committee. The Compensation Committee has not delegated any other of its authority to any individual.
Compensation Committee Interlocks and Insider Participation in Compensation Decisions
During FY 2019, the members of the Compensation Committee were Charlie H. Cannon, Jr., Thomas E. Chorman, Jeffrey S. Edwards and Michael A. Hickey. None of these directors have ever been an employee or officer of the Company. None of our executive officers serve as a member of the board of directors or on the compensation committee of any other entity that has had any executive officer serving as a member of our Board or Compensation Committee.
Report of the Compensation Committee
COMMITTEE CHAIR ROTATIONS
The CompensationN&CG Committee has reviewedrecommended, and discussed the Compensation Discussion and Analysis contained on page 30 in this Proxy Statement with management. Based on that review and discussion, the Compensation Committee has recommended to the Board approved, that all committee chairs be periodically rotated in order to maintain a fresh perspective for each committee. Following the Compensation Discussion2022 Annual Meeting, the new chairs will be: Ms. Davenport (Audit); Mr. Hickey (Compensation); Ms. Edwards (N&CG) and Analysis be included in this Proxy Statement.
COMPENSATION COMMITTEE
Jeffrey S. Edwards, Chair
Charles H. Cannon, Jr.
Thomas E.Mr. Chorman,
Michael A. Hickey if elected (Innovation & Technology).
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19 |
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REPORTOFTHE AUDIT COMMITTEE
The Company’s internal controls and financial reporting are a multi-faceted undertaking, monitored and overseen by the Audit Committee. The Company’s management has the primary responsibility for the Company’s internal controls and financial reporting process. The independent auditors are responsible for performing an independent audit of the Company’s consolidated financial statements and reporting on the Company financial statements’ conformity with generally accepted accounting principles. Additionally, the independent auditors are responsible for providing an attestation on management’s assessment of the Company’s internal controls over financial reporting. The Audit Committee’s responsibility is to monitor and oversee all of these processes on behalf of the Board. This responsibility includes engaging the independent auditors,pre-approving their annual audit plan and reviewing their annual audit report.
In this context, the Audit Committee has reviewed and discussed the consolidated financial statements with management and Grant Thornton.Deloitte. The Audit Committee has also reviewed management’s assessment of the effectiveness of the Company’s internal controls over financial reporting and Grant Thornton’sDeloitte’s evaluation of these controls. The Audit Committee further discussed matters required to be discussed by standards, includingthe applicable requirements of the PCAOB Auditing Standard No. 1301, Communications with Audit Committees. Grant Thorntonand the SEC. Deloitte has provided to the Audit Committee the written disclosures and the letter required by the PCAOB and has discussed with the Audit Committee its independence from the Company and Company management. Finally, the Audit Committee considered whether Grant Thornton’sDeloitte’s provision ofnon-audit services to the Company was compatible with maintaining its independence.
Based on these reviews and discussions, the Audit Committee has recommended to the Board that the audited consolidated financial statements be included in the Company’s Annual Report on Form10-K for the year ended June 30, 20192022 for filing with the SEC.SEC on August 5, 2022.
AUDIT COMMITTEE
Thomas J. Hansen, Chair
Charles H. Cannon, Jr.
Thomas E. Chorman
B. Joanne Edwards
Hansen, Chair |
Cannon, Jr. | Thomas E. Chorman | Robin J. Davenport | Michael A. Hickey |
20 | 2022 PROXY STATEMENT |
Compensation Committee 2022 Members: Jeffrey S. Edwards (Chair) Thomas E. Chorman Independence: 1 Meetings held in 2022: Charles H. Cannon, Jr. Michael A. Hickey 4 out of 4 5 Key Responsibilities Retaining or terminating compensation consultants; Reviewing and approving corporate goals and objectives regarding CEO compensation; Recommending salary structures and compensation plans to the Board; Reviewing and approving performance and operating goals under incentive plans for senior management; Reviewing and approving senior management's employment agreements, severance agreements and CIC agreements; Recommending changes to non-employee director compensation to the Board; Reviewing management's Compensation Discussion and Analysis to be included in the Proxy Statement; and Reviewing the results of the say-on-pay resolution and other input received from our shareholders on compensation practices. 1 The Board has determined that each member of the Compensation Committee meets the independence standards set forth in the SEC rules and required by the NYSE
Under our long-term incentive plans, the Compensation Committee may delegate some decision-making authority regarding awards to the CEO. This authority is limited to granting and approving awards for designated individuals, as long as such individuals are not officers of the Company, as determined by the Board, or directly report to the CEO. Currently, the Compensation Committee has delegated authority to Mr. Dunbar to grant such awards subject to a pool limit authorized by the Committee. The Compensation Committee has not delegated any of its other authority to any individual.
The report of the Compensation Committee can be found on page 52 at the end of the Compensation Discussion & Analysis.
Report of the Nominating and Corporate Governance Committee
REPORTOFTHE NOMINATING & CORPORATE GOVERNANCE COMMITTEE
The duties and responsibilities of the Nominating and Corporate Governance Committee are broad. The N&CG Committee operates pursuant to the Corporate Governance Charter. In fulfilling the responsibilities and duties contained therein, the N&CG Committee actively reviews all Board principles, guidelines and charters. The N&CG Committee also maintains responsibility for overseeing senior management’s compliance with the Code of Business Conduct and Ethics.Code of Ethics for Senior Financial Management. The N&CG Committee further identifies and evaluates candidates for Board membership, evaluates Board committee membership and recommends Company employees for election to Company officer roles. The N&CG Committee is also responsible for overseeing the Company’s ESG strategy. Lastly, the N&CG Committee establishes and maintains a Board performance review process and recommends changes to the Board based on the review.
Code of Business Conduct and EthicsBOARD SELF-ASSESSMENT & SKILLS MATRIX
Management has the primary responsibility for creating, maintaining and administering programs to ensure employees’ compliance with the Code of Business Conduct and the Code of Ethics for Senior Financial Management, (the “Codes”), both of which are available on Standex’s website in the “Governance” section. The N&CG Committee routinely receives updates from the Corporate Governance Officer on the existing programs and any proposed programs.
During the past fiscal year, the Company utilized an online interactive compliance training program to educate employees on the Codes as well as other regulatory and workplace compliance topics. Employees are assigned training modules on a quarterly basis to promote ongoing awareness of ethics issues. The Company divisions routinely customize the modules to address ethics issues specific to their organizations.
The N&CG Committee is also responsible for evaluatinghas developed and approving requests for waiversimplemented a prescribed self-evaluation process to assess the configuration and enhance the functionality of the Codes. Any request must be submitted,Board and each of its committees. This process identifies current Board members’ attributes, expertise and experiences and creates a skills matrix, which is used to identify areas of improvement within Board structure and committee configuration. The self-evaluation is instrumental in writing,evaluating the future needs of the Board in relation to the ChairCompany’s strategic goals and identifying the qualifications that a future candidate should have to aid in the achievement of those strategic goals. The matrix shown below details the N&CG Committee, who then reports the submission to the whole N&CG Committee. The N&CG Committee then provides their recommendation on the request to the Board. Any waivers granted to executive officersskills that are disclosed to shareholders as soon as practicable via the Company’s website. No waivers have been granted during FY 2019 or during any prior period.evaluated, a description of those skills and how many Board members and nominees are proficient in a particular skill.
Additionally, a third-party global, multi-language hotline is available 24/7 at every Company location worldwide, for anonymous reporting of financial, accounting, auditing or other employee concerns. This communication tool is a beneficial outlet for employees to express concerns.
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Identifying and Evaluating Candidates for Board MembershipIDENTIFYINGAND EVALUATING CANDIDATESFOR BOARD MEMBERSHIP
The N&CG Committee is responsible for recommending candidates for Board membership when the N&CG Committee has identified a need to add new members or when there is a vacancy. The N&CG Committee has not established specific, minimum qualifications for director nominees. However, the N&CG Committee strives to find candidates whose skills complement the needs presented by the global, multi-sector, engineered manufacturing operations of the Company and whose skills include analytical financial expertise and strategic planning. Candidates must also possess characteristics, such as integrity and sound judgment, that would enable the Board to function cohesively and effectively. The N&CG Committee also evaluates whether a particular candidate has the capacity and desire to make a significant time commitment to serving on the Board. Finally, the Committee focuses on prioritizing the identification of candidates with gender, ethnic and racial diversity who will lend nuanced perspectives to Board discussions.
To identify such candidates, the N&CG Committee has the authority to retain a third-party search firm and to consider suggestions byfrom directors, shareholders and management. The N&CG Committee ensures that the pool of candidates reflects a range of professional experience and expertise as well as diversity of gender, race and ethnicity by instructing the search firm to seek out and present diverse candidates who may expand the perspectives of the Board. The N&CG Committee views diversity expansively and considers depth and breadth of relevant business experience, leadership performance and strategic acumen alongside other immutable characteristics that a candidate may possess.
The N&CG Committee reviews and evaluates each candidate by taking into account all available information concerning the candidate. All candidates, whether identified by a third-party search firm, the directors, management or shareholders, are evaluated based on the same criteria. The candidates must also fit within the existing composition of the Board to be recommended to the Board as a prospective nominee.
Shareholders may submit recommendations for future candidates by notifying the N&CG Committee, in writing, using the process described under “Shareholder Proposals and Nominations” on page 57. Please attach any appropriate supporting materials. Shareholdersshareholders may submit direct nominations for inclusion in the Company’s Proxy Statement by followingusing the processprocesses described under “Shareholder Proposals and Nominations”“How Can I Submit a Shareholder Proposal or Director Nomination?” on page 57.
63.Board Self-Assessment Please attach any appropriate supporting materials.
The N&CG Committee has developed and implemented a prescribed self-evaluation process to assess the configuration and enhance the functionality of the Board and each of its committees. This process identifies current Board members’ attributes, expertise and experiences and creates a skills matrix, which is used to identify areas of improvement within Board structure and committee configuration. The self-evaluation is instrumental in evaluating the future needs of the Board in relation to the Company’s strategic goals and identifying the qualifications a future candidate should have to aid in the achievement of those strategic goals.
NOMINATING & CORPORATE GOVERNANCE COMMITTEE
Thomas E. Chorman, Chair
B. Joanne Edwards
Jeffrey S. Edwards
Daniel B. Hogan
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2022 PROXY STATEMENT | 23 |
The key responsibilities of the Board, as a whole, include oversight of business strategy; oversight of risk management; oversight of ESG strategy and initiatives; oversight of cybersecurity; oversight of human capital management; and oversight of compliance.
OVERSIGHTOF STRATEGY
Oversight of the Company’s business strategy and strategic planning is a key responsibility of the Board. The Board believes that overseeing and monitoring strategy is a continuous process-one that involves constant assessment to ensure that Company performance in the short and long term are consistent with creating and maximizing shareholder value. The Company’s management, on the other hand, is tasked with executing the business strategy. The Board receives regular updates and actively engages with senior management to monitor execution of the business strategy.
OVERSIGHTOF BUSINESS RISKS
The CEO and other members of senior management are primarily responsible for managing the risks the Company faces. The Board’s responsibility regarding risk management is to oversee the Company’s risk management policies and procedures and provide guidance on the overall effectiveness of these policies and procedures. To fulfill this responsibility, the Audit Committee receives reports, on a quarterly basis, regarding the risks that have been identified and the measures that are being taken. Additionally, the Audit Committee receives reports on a regularly scheduled quarterly basis, presented by our Corporate Governance Officer and our Chief Legal Officer regarding material litigation, legal loss contingencies and calls received on our whistleblower hotline. The Board is regularly informed through the Audit Committee’s reports and through direct communications from senior management.
The Board and each committee’s risk oversight roles, as provided in their respective charters, are evaluated on an annual basis to determine whether the risk oversight responsibilities are being discharged effectively. The Board undertook this evaluation in FY 2022 and found that changing the current structure of risk oversight was not warranted. With the addition of the Innovation & Technology Committee at the beginning of FY 2023, the structure of risk oversight will be adjusted and reflected in next year’s proxy statement. Other risk factors facing the Company are described in the Annual Report on Form 10-K, filed on August 5, 2022, under the Part I Section entitled “Item IA. Risk Factors.”
ENTERPRISE RISK MANAGEMENT PROGRAM
Our Enterprise Risk Management process is driven by our Corporate Governance Officer (a senior member of our internal legal department), in cooperation with the Company’s Director Compensationof Internal Audit, risk management department, CFO and other members of senior management. Risks are assessed and categorized in order to put in place appropriate mitigation plans. Risk factors are reviewed and rated according to their likelihood of occurrence, financial and intangible impact if occurrence took place, and velocity (how quickly the risk could affect the business). Mitigation plans are developed for the top identified risks. These risk assessments and mitigation plans are presented annually to the full Board for review and discussion.
24 | 2022 PROXY STATEMENT |
We have formalized responsibility for oversight of our ESG program with two of our Board committees. Our Board’s N&CG Committee maintains responsibility for oversight of our ESG strategy, while the Audit Committee is responsible for oversight of the integrity of those ESG related metrics that we publicly disclose. Both of these committees provide pertinent updates to the full Board.
A management-level ESG Steering Committee has responsibility for implementing the Company’s ESG strategy and reporting on its effectiveness and accomplishments. This ESG Steering Committee provides an update to the N&CG Committee at each of its regularly scheduled meetings.
As our ESG Strategy matures into the establishment of specific goals and the reporting of achievement against these goals, the ESG Steering Committee will periodically review with the Audit Committee the processes for measuring such achievements. The Audit Committee will also receive input from the Company’s internal audit function on the integrity of such processes.
The information contained herein outlines our approach to ESG and also highlights some of the key facets of our ESG programs. Additional information can also be found on our website at Directorwww.standex.com, by clicking on “Environment, Social & Governance.”
RESPONSIBLE BUSINESS PRACTICES
We conduct our business fairly and ethically and in a manner consistent with all applicable legal and industry code requirements. Strict compliance, high standards of ethical conduct and a strong values-based corporate culture define how we operate in our work environment, business practices and relationships with external stakeholders.
HUMAN RIGHTS
Standex is committed to high standards of integrity, ethics and sustainability throughout our operations and supply chain. We support human rights, labor rights and anti-slavery in our own operations and within our supply chain. Our Supplier Code of Conduct explicitly requires all suppliers who currently do business with us, or seek to do business with us, to not engage in any activities that violate human rights or labor rights.
ANTI-CORRUPTION
Standex conducts business honestly, fairly, ethically, free from corruption and in a manner consistent with all applicable legal and industry standards. We do not engage in or tolerate bribery or corruption of any kind. We require our employees, suppliers and other business partners to comply with all applicable anti-bribery and anti-corruption laws through our Code of Conduct, Supplier Code of Conduct and our Gifts & Gratuities Policy. We also regularly employ compliance training on these topics to ensure our employees are aware of prohibited practices and the legal requirements.
POLITICAL ACTIVITIES & LOBBYING
Our Code of Conduct prohibits the use of company funds, assets, property or personnel to contribute to or support political campaigns. Standex, as a company, generally does not engage in any political lobbying. Standex is, however, a member of the various organizations, such as the National Association of Manufacturers, which does periodically lobby in the interests of its members as a whole.
COMMUNITY OUTREACH
Standex CARES is the Company’s community partnership program, which provides our employees the opportunity for service leadership and engagement. CARES stands for Connect, Act, Reach, Engage and Serve. In our vision statement, we commit to “encourage a culture of giving that is a way of life at Standex, extending beyond the walls of our facilities through engagement in our communities and dedicated partnerships that reflect the spirit of our employees.” We execute this vision through our mission statement, in which we “pledge to support local programs that benefit our communities through the four key areas of education, workforce readiness, humanitarian relief, and community engagement to improve the lives of people in our communities.”
2022 PROXY STATEMENT | 25 |
ENVIRONMENT, SUSTAINABILITY & CLIMATE
We share the same world, and it is our priority to bring sustainable practices to our business operations. We are continuing our evolution to improve recycling, increase energy efficiency, reduce waste and improve processes. We are actively seeking, and using, alternatives to critical mineral raw materials that are mined, and we continuously monitor our supply chain to ensure transparent and ethical sourcing.
In FY 2022, we began measuring, on a global basis, the following metrics to set a baseline against which improvement can be measured:
u | Electricity consumption |
u | Natural gas consumption |
u | Heating oil consumption |
u | Solid waste generation |
u | Recycling |
u | Water consumption |
u | Waste water disposal |
CLIMATE
We believe that focused and sustained action is required to address climate change and its implications. We recognize that climate change poses risks to businesses, industries, and broader society. As part of our commitment to operate sustainably, we are taking action to understand climate-related risks and opportunities. We have embedded climate change risks into our Enterprise Risk Management process, and both risks and opportunities into our business strategy planning process at all of our divisions. We have also incorporated energy and waste reduction into the strategic goals for key operations leaders.
This year we completed measurement of the above listed metrics at all of our sites globally. With this starting point, we have set energy and waste reduction targets to reduce our impact on the environment. The effort to measure and reduce our Scope 1 & 2 greenhouse gas emissions is underway.
We are mindful that the transition to a low carbon global economy will require deep collaboration at many levels. We will continue to collaborate with our customers, suppliers and partners to find innovative approaches to minimizing the collective impact we have on the environment.
RESPONSIBLE SOURCING
Standex is committed to high standards of integrity, ethics, and sustainability throughout our supply chain. To this end, we have been evolving a robust responsible sourcing initiative. The critical components to this initiative include our Supplier Code of Conduct, our Conflict Minerals Program, and the work of our Responsible Sourcing Council.
In FY 2022, we began an initiative through a third-party partner to engage with each of our suppliers in order to gain their commitment to comply with our Supplier Code of Conduct.
26 | 2022 PROXY STATEMENT |
CYBERSECURITY & DATA PRIVACY
CYBERSECURITY
Protecting our digital assets and the security of our information systems is a top priority for us. Historically, the nature and scope of our IT applications and systems was almost as diverse as the array of companies that comprised the Standex portfolio. With our transformation into a more focused, high performance operating company over the past several years, we have been rationalizing and standardizing our approach to IT. As a critical component of this effort, we have improved and continue to enhance our IT security controls and protocols.
While management has oversight of cybersecurity execution, the Board and the Audit Committee regularly oversee the general cybersecurity strategy and the efficacy of IT controls. To this end, during FY 2021, a Chief Information Officer (“CIO”) was appointed for the Company. The CIO oversees and implements the Company’s IT strategy and, with respect to IT security, is responsible for ensuring the effectiveness of access and security controls, the deployment and use of effective security tools, applications and policies and the training of all employees on applicable IT policies and procedures. The CIO periodically presents to the Board on the status of and plans for IT security.
Starting in FY 2021, we adopted BitSight as our measurement standard to evaluate our cybersecurity program. We had set a goal to reach 740 within their measurement system for FY 2022. By April 2022, we surpassed that goal by reaching 780 and we continue to work on and improve our cybersecurity measures.
In FY 2022, we enhanced our cybersecurity training for all employees with computer access. We have also periodically launched targeted e-mails simulating phishing attacks to educate our employees and address potential vulnerabilities. We also implemented managed endpoint detection and response.
Please refer to our website, www.standex.com/corporate-responsibility/information-data-security for more information.
DATA PRIVACY
We value the right to privacy of our employees, customers and business partners. We are committed to protecting the information we receive by collecting, processing, storing, transmitting and using the data in a lawful manner, consistent with legitimate business reasons. Our employees undergo continuous training on data privacy. Business risks and opportunities related to data privacy and cybersecurity are evaluated annually as part of our Enterprise Risk Management process.
2022 PROXY STATEMENT | 27 |
HUMAN CAPITAL MANAGEMENT
CULTURE & EMPLOYEE ENGAGEMENT
Standex is committed to creating and sustaining a culture built on mutual respect, inclusion, trust and transparency where employees feel valued and supported for the unique people they are, the skills and experiences they bring to the table and the contributions they make. We believe building a great culture is the foundation for cultivating successful relationships with our employees, customers and shareholders.
In FY 2021, we engaged in a new process with a third-party partner to define, develop and measure a cultural blueprint that would help Standex attract, retain and develop the best talent; instill a continuous improvement mindset and discipline across the company; develop processes and systems that facilitate and support achievement of our strategic goals and objectives; and ensure we keep the promises we make to our customers, shareholders and employees.
During the first phase of the initiative (Strategy Phase), we conducted a pulse survey and facilitated two virtual workshops with the Company’s top seventy-five leaders, using an applied framework to identify the most critical dimensions of our desired culture that best enable our journey to becoming a high performance operating company and employer of choice, while creating long-term and sustained growth in existing and emerging markets.
During the second phase of the initiative (Measurement Phase), we launched a baseline pulse survey to a third of our global employees to quickly identify and then prioritize gaps and areas of concern. A full culture survey was developed from this initial data and fine tuned with deeper, more probing questions focused on the areas identified from the results of the baseline pulse survey. The Culture Survey was sent to all 3,800 of our employees in seventeen languages. There was a 67 % response rate with a total of 3,800 responsive comments.
The results of the Culture Survey were evaluated at the Company, business, region and site location level and were assessed against an external aspirational benchmark. In the spirit of transparency and continuous improvement, Company level results were shared during the Company’s Q3 All Employee Webcast, and business segment results were shared with those segment employees.
Phase 3 of the initiative (Actioning Phase), involved initiating two concurrent tracks of actioning. The “centralized” track focused on actioning the top areas of greatest organizational impact for the Company, initiated by the senior leadership team of Standex, inclusive of corporate officers and business segment presidents. This process included incorporating areas of focus into the Company’s FY 2022 Corporate Strategic Goals. The “local” track focused on business segments, functions and sites independently actioning the top areas of greatest impact unique to their specific survey results.
A follow up culture survey was deployed globally to all employees in February 2022, measuring progress against the 2021 results and comparing results to an external aspirational benchmark. All business segments were required to develop an actioning plan to focus on priority opportunities for improvement specific to their business and to each facility. Progress against goals is reviewed during the Company’s formal quarterly business reviews. Additionally, the results of the 2022 Culture Survey were reviewed on our global All Employee Webcast and discussed as part of the annual talent review with the Company’s Board during the April 2022 Board meeting.
Participation in the FY 2022 survey increased by 8 % from the FY 2021 survey and a total of 5,900 comments were received. The results were generally similar to those received in FY 2021, with small increases and decreases in varying dimensions. Two business segments saw improvements in every dimension.
28 | 2022 PROXY STATEMENT |
SUCCESSION PLANNING & TALENT DEVELOPMENT
The Board believes that one of its primary responsibilities is to oversee the development and retention of senior talent and to ensure that an appropriate succession plan is in place for our CEO and other members of senior management. To this end, the Board undergoes an annual review process with the CEO and senior management to develop, evaluate and make adjustments to succession plans.
Our talent strategy is focused on attracting and retaining the best talent, recognizing individual and team contributions and investing in the ongoing development of our employees at all levels and at every stage of their careers. We are an organization that values continuous learning and personal development.
In furtherance of the foregoing, we developed a formal leadership development curriculum in FY 2022. Starting with senior leadership, we delivered customized training courses over a six-month period. We intend to further develop the curriculum and the scope of participants in the coming fiscal year. All of our employees also undergo annual performance management and development reviews.
DIVERSITY & INCLUSION
We are committed to ensuring that Diversity, Equity and Inclusion (“DE&I”) is a top priority across our global organization. For us, DE&I begins first with valuing every employee for the unique individual they are and the skills and experiences they bring to Standex. We strive to create an environment where people feel welcomed and appreciated for the contributions they make every day. We prohibit any form of discrimination, harassment or intolerance and we train employees to understand and recognize these issues. We have policies and processes to address reports of such behavior, including an anonymous hotline managed by an external third party, which reports to our Corporate Governance Officer.
In FY 2022, we established an Inclusion Advisory Council (“IAC”) to function as a collective advisor to the senior leadership team, the business unit leadership teams and the global human resources community, with a primary focus on identifying goals and actions to increase inclusivity and continue building a listening culture. The IAC consists of employees, at all levels, from every reporting business segment, from all over the globe and from a variety of functional areas (corporate, finance, human resources, management, and production).
EMPLOYEE WELLNESS
We view employee wellness as a key component of a strong corporate culture. Our programs have historically included free smoking cessation programs, on-site biometric screenings, health and diet coaching, subsidized gym memberships and flu shots. Providing our employees with the tools to improve their wellbeing – not just physical wellbeing, but also mental, emotional and financial wellbeing – is of paramount importance. This is why, in FY 2022, we partnered with Virgin Pulse, a nationally recognized wellness partner, to enhance our employee wellness offerings. The program is initially only being offered to US employees, but our plans include expanding participation to include our employees all over the globe as well.
SAFETY
Employee safety is a long-standing, top priority. Responsibility and accountability resides with each employee and fosters a spirit of community co-dependence. Monthly safety calls with the Company CEO emphasizes this principle. All locations across the globe are subject to the same standards. Since the beginning of 2020, our global TRIR has consistently been below 0.7, a world class metric of achievement that our employees have diligently pursued. Our footprint is global, and we continue to be aware of, and focus on, the change that we can affect when we focus on improvements to all of our worldwide facilities and work practices.
2022 PROXY STATEMENT | 29 |
OTHER RISKAND GOVERNANCE MATTERS
COMPLIANCE
We view compliance with applicable laws and regulations as a foundational minimum for ethical business practices. The Board oversees our compliance policies and procedures to ensure the effective performance of management’s duties. Having our Code of Conduct apply to all employees globally, as well as the Board, sends the message that we are all committed to doing the right thing. Our specific compliance policies detail the ethical framework found in the Code of Conduct. Together, these compliance efforts assure that we act effectively and efficiently in the best interests of shareholders.
CODEOF CONDUCTAND CODEOF ETHICSFOR SENIOR FINANCIAL MANAGEMENT
Management has the primary responsibility for creating, maintaining and administering programs to ensure employees’ compliance with the Code of Conduct and the Code of Ethics for Senior Financial Management, (the “Codes”), both of which are available by going to ir.standex.com, clicking on “Governance,” and then clicking on “Policies.” The N&CG Committee routinely receives updates from the Corporate Governance Officer on the existing programs and any proposed programs. On an annual basis, employees are presented with a copy of the Code of Conduct and must affirm their compliance with it.
The Company also utilizes an online interactive compliance training program to educate employees on the Codes as well as other regulatory and workplace compliance topics. Employees are assigned training modules on a regular basis to promote ongoing awareness of ethics issues. The Company divisions routinely customize the modules to address ethics issues specific to their organizations.
The N&CG Committee is also responsible for evaluating and approving requests for waivers of the Codes. Any request must be submitted, in writing, to the Chair of the N&CG Committee, who then reports the submission to the whole N&CG Committee. The N&CG Committee then provides their recommendation on the request to the Board. Any waivers granted to executive officers are disclosed to shareholders as soon as practicable via the Company’s website. No waivers have been granted during FY 2022 or during any prior period.
Additionally, a third-party global, multi-language hotline is available 24/7 at every Company location worldwide, for anonymous reporting of financial, accounting, auditing or other employee concerns. This communication tool is a beneficial outlet for employees to express concerns.
CONFLICTSOF INTEREST
The Code of Conduct requires that all directors, executive officers and employees avoid engaging in any activity that might create a conflict of interest. All individuals are required to report any proposed transaction that might reasonably be perceived as creating a conflict of interest to their supervisor and/or the CLO. During the past fiscal year and for all prior periods, there have not been any reports of such transactions.
RELATED PARTY TRANSACTIONS
The Board has adopted a written policy for the review of certain related party transactions between any director, director nominee, executive officer, beneficial owner of more than 5% of any class of the Company’s securities, or any immediate family member of any of the foregoing (any of the foregoing being a “Related Party”) and the Company. For purposes of the policy, a “related party transaction” is any transaction, arrangement or relationship in which (a) the aggregate amount involved will or may be expected to exceed $120,000 in any fiscal year; (b) the Company or any subsidiary is a participant; and (c) any Related Party has or will have a direct or indirect material interest.
This policy is administered by the Audit Committee, which will only approve a related party transaction if it is, in its judgment, not inconsistent with the best interests of the Company and its shareholders. The Audit Committee may, in its sole discretion, impose such terms and conditions as it deems appropriate in connection with its approval. No director may participate in the discussion or approval of a transaction in which that director, or their immediate family member, has a direct or indirect interest.
When a related party transaction is ongoing and has been approved by the Audit Committee, the Audit Committee will annually review the transaction and determine if it is in the best interests of the Company and its shareholders to continue, modify or terminate such transaction.
Since July 1, 2021, there has not been, nor is there currently proposed, any related party transaction.
30 | 2022 PROXY STATEMENT |
ANTI-HEDGINGAND ANTI-PLEDGING POLICIES
The Company’s anti-hedging and anti-pledging policy prohibits any officer, director or key employee from engaging in the following transactions involving the Company’s securities:
u | short-term trading, defined as selling Standex stock within six months of purchasing Standex stock on the open market; |
u | short sales; |
u | buying or selling put or call options, or other derivative securities; |
u | hedging transactions, such as zero-cost collars and forward sale contracts; |
u | holding Standex stock in a margin account; or |
u | pledging Standex stock as collateral. |
For information regarding our Named Executive Officers’ compliance with such policies, refer to “Policy Concerning Transactions Involving Company Securities (Anti-Hedging Policy & Anti-Pledging Policy)” on page 49 of the Compensation ElementsDiscussion and Analysis.
SHAREHOLDER ENGAGEMENT
The Board has established a process to facilitate communication by shareholders and other interested parties with directors. Communications can be addressed to directors by emailing boardofdirectors@standex.com, or by writing to:
Standex International Corporation
23 Keewaydin Drive, Suite 300
Salem, New Hampshire 03079
Attention: Corporate Governance Officer
Communications with the Board are distributed by the Corporate Governance Officer. At the direction of the Board, all mail received may be opened and screened for security purposes. The Corporate Governance Officer uses his or her discretion in determining whether to forward communications to the Board. Communications that are unrelated to the duties and responsibilities of the Board will not be distributed. Such items include, but are not limited to:
u | spam |
u | junk mail and mass mailings |
u | product complaints or inquiries |
u | new product suggestions |
u | resumes and other forms of job inquiries |
u | surveys |
u | business solicitations or advertisements |
In addition, material that is trivial, obscene, unduly hostile, threatening or illegal or similarly unsuitable items will be excluded; however, any communication that is excluded will be made available to any independent, non-employee director upon request.
VIEW THE COMPANY’S GOVERNANCE MATERIALS
You can view the Company’s governance materials, including the Certificate of Incorporation, By-Laws, Corporate Governance Guidelines and Board committee charters on the Company’s website, ir.standex.com, by clicking on “Governance” and then selecting the specific Company material. Instructions on how to obtain copies of these materials are included on page 64.
2022 PROXY STATEMENT | 31 |
The compensation elements and amounts are established by the Board after a review of data prepared by the Compensation Committee’s independent compensation consultant. The data and report show competitive director compensation levels for peer companies and the Company’s peer group. More information about the Compensation Committee’s independent consultant report and the methods for determining competitive compensation can be found under “Basis for Determining Executive Compensation” on page 34.51.
In FY 2019,2022, the Compensation Committee undertook a review of the compensation paid to our non-employee directors received, as applicable,relative to the following:Company’s peer group. Based on this review, the Committee determined that an increase in the annual long-term equity grants was warranted for FY 2022, effective with the grants made on October 26, 2021.
DIRECTOR COMPENSATION ELEMENTS The FY 2022 compensation elements are shown in the adjacent table. | ||||||
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Directors may choose to defer up to 100% of their annual cash retainer into the MSPP, which is described in detail on page 42 under “Management Stock Purchase Plan.”Plan” on page 43. The equity portion ofnon-employee director compensation is granted in the form of shares of restricted stock having a $100,000$120,000 fair market value at the time of grant, which is established using the closing price of the Company’s stock on the date of the Annual Meeting.annual meeting. These shares of restricted stock vest 3 years after the grant date.date, are considered beneficially owned by the director and accrue dividend equivalents, which are paid upon vesting. Upon the retirement of a director or a change in control of the Company, all unvested shares of restricted stock are subject to acceleration and immediate vesting.
Directors do not receive fees for attending Board or committee meetings. Directors also do not receive benefits under Standex retirement plans or any perquisites.
Under the Company’s Corporate Governance Guidelines, allnon-employee directors must ownare expected to accumulate shares of Company stock with a value of at least five times the value of their annual cash retainer. Until a director has the requisite number of shares, they are required to retain at least 50% of the share units they are awarded. As of June 30, 2019,2022, allnon-employee directors are presentlywere in compliance with this requirement. Additionally, the Company has a policy concerning transactions involving Company securities. The policy is explained under “Policy Concerning Transactions Involving Company Securities”“Anti-Hedging and Anti-Pledging Policy” on page 46.31. None of the directors have engaged in any of the prohibited transactions during FY 20192022 or any prior periods.
32 | 2022 PROXY STATEMENT |
Director Compensation TableDIRECTOR COMPENSATION TABLE
The following table sets forth certain information with respect to ournon-employee director compensation for FY 2019.2022. Compensation information for Mr. Dunbar is detailed in the Compensation Discussion & Analysis and Compensation Tables sections of this Proxy Statement. Mr. Dunbar did not receive any compensation solely for his service as a director.
Name | Fees Earned or Paid in Cash ($) (1) | Stock Awards ($) (2) | All Other Compensation ($) (3) | Total ($) | Fees Earned or
| Stock Awards
| All Other
| Total ($)
| ||||||||||||||||||||||||
Charles H. Cannon, Jr. | 73,000 | 100,000 | 3,158 | 176,158 |
|
87,500
|
|
|
120,000
|
|
|
2,736
|
|
|
210,236
|
| ||||||||||||||||
Thomas E. Chorman | 81,000 | 100,000 | 1,491 | 182,491 |
|
97,500
|
|
|
120,000
|
|
|
2,736
|
|
|
220,236
|
| ||||||||||||||||
Robin J. Davenport
|
|
60,000
|
|
|
120,000
|
|
|
-
|
|
|
180,000
|
| ||||||||||||||||||||
B. Joanne Edwards | 50,500 | 100,000 | - | 150,500 |
|
55,500
|
|
|
157,897
|
|
|
2,736
|
|
|
216,133
|
| ||||||||||||||||
Jeffrey S. Edwards | 73,000 | 100,000 | 2,741 | 175,741 |
|
90,000
|
|
|
120,000
|
|
|
2,736
|
|
|
212,736
|
| ||||||||||||||||
Thomas J. Hansen | 32,000 | 186,543 | 3,158 | 221,701 |
|
45,000
|
|
|
228,278
|
|
|
4,814
|
|
|
278,092
|
| ||||||||||||||||
Michael A. Hickey | 5,000 | 186,543 | - | 191,543 |
|
87,500
|
|
|
120,000
|
|
|
3,773
|
|
|
211,273
|
| ||||||||||||||||
Daniel B. Hogan | 18,000 | 164,907 | 1,908 | 184,815 |
This column includes the annual cash retainer and fees earned for serving as Lead Independent Director, Chair or member of any committee, less the portion of the annual cash retainer that the director elected to defer pursuant to the MSPP. |
This column includes the aggregate grant date fair value of the annual equity stock grant and the RSUs granted under a director’s deferment election under the MSPP. The annual equity stock grants were made on October |
This column consists of |
As of June 30, 2019,
As of June 30, 2022, the aggregate number of unvested shares or share units held by each director was as follows: |
Name
| Unvested Stock (#)
| Name
| Unvested Stock (#)
| |||||||||
Charles H. Cannon, Jr.
|
|
4,204
|
|
Thomas E. Chorman
|
|
4,204
|
| |||||
Robin J. Davenport
|
|
1,118
|
|
B. Joanne Edwards
|
|
4,550
|
| |||||
Jeffrey S. Edwards
|
|
4,204
|
|
Thomas J. Hansen
|
|
7,942
|
| |||||
Michael A. Hickey
|
|
6,952
|
|
Under our Corporate Governance Guidelines, the Board requires that at least a majority of directors either meet or exceed the independence requirements of the NYSE. These rules provide that, in order to be considered independent, each director wasor nominee does not have a material relationship with the Company, either directly or as follows:a partner, shareholder, or officer of an organization that has a relationship with the Company. Furthermore, directors and nominees cannot have any prohibited relationships, such as certain employment relationships, with the Company, its independent auditor or another organization that has an affiliated relationship with the Company.
The Board undertakes an annual evaluation of director independence. At its meeting on July 28, 2022, the Board affirmatively determined that each member of the Board and each nominee, (other than David Dunbar, the Company’s President and CEO), meets the independence standards. In addition, all members of the Audit Committee satisfy the enhanced independence criteria required for members of audit committees, and all members of the Compensation Committee satisfy the enhanced independence criteria required for members of compensation committees.
Name | Unvested Stock | Name | Unvested Stock | |||||||||
Charles H. Cannon, Jr. | 3,975 | Thomas E. Chorman | 3,165 | |||||||||
B. Joanne Edwards | 1,035 | Jeffrey S. Edwards | 4,436 | |||||||||
Thomas J. Hansen | 5,646 | Michael A. Hickey | 2,379 | |||||||||
Daniel B. Hogan | 5,025 |
2022 PROXY STATEMENT | 33 |
Stock Ownership InformationSHARE OWNERSHIP
Section 16(a) Beneficial Ownership Reporting ComplianceDELINQUENT SECTION 16(A) REPORTS
Section 16(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) requires Standex directors, executive officers and other persons who beneficially own more than 10%10 % of our common stock, to file reports with the SEC regarding their initial stock ownership and any changes in their stock ownership.
Based solely on a review of the reports filed for FY 20192022 and related written representations, we believe that all of our executive officers and directors filed the required reports on a timely basis under Section 16(a), with the exception of the Form 3 filing for Ms. Bell upon her appointment as an executive officer in June 2019. Such delay was caused by technical difficulties in obtaining necessary filer codes in order to make the EDGAR filing with the SEC..
DirectorDIRECTOR & Management Stock OwnershipMANAGEMENT STOCK OWNERSHIP
The following table shows, as of July 31, 2019,2022, the number of shares of our common stock beneficially owned by each of our current directors, director nomineenominees and Named Executive Officers, and all directors and executive officers as a group.
Name of Beneficial Owner | Common Stock Beneficially Owned (1) | Percent of Outstanding Shares | Common Stock Beneficially Owned 1 | Percent of Outstanding Shares | ||||||
Annemarie Bell | 631 | * | ||||||||
Paul C. Burns | 13,256 | * | 18,344 | * | ||||||
Charles H. Cannon, Jr. (2) | 24,065 | * | ||||||||
Charles H. Cannon, Jr. 2 | 18,991 | * | ||||||||
Thomas E. Chorman | 9,680 | * | 13,394 | * | ||||||
Thomas D. DeByle(3) | 69,229 | * | ||||||||
David Dunbar(4) | 72,849 | * | ||||||||
Robin J. Davenport | 1,118 | * | ||||||||
David Dunbar 3 | 124,746 | 1.04% | ||||||||
B. Joanne Edwards | 1,035 | * | 5,239 | * | ||||||
Jeffrey S. Edwards | 6,646 | * | 10,850 | * | ||||||
Alan J. Glass | 7,044 | * | 19,514 | * | ||||||
Thomas J. Hansen | 8,791 | * | 9,790 | * | ||||||
Michael A. Hickey | 2,379 | * | 7,754 | * | ||||||
Daniel B. Hogan (5) | 17,214 | * | ||||||||
All Directors & Executive Officers | 232,819 | 1.81% | ||||||||
Flavio Maschera | 12,832 | * | ||||||||
Ademir Sarcevic | 19,930 | * | ||||||||
All Directors & Executive Officers 4 | 274,363 | 2.28% |
* | Less than 1% of outstanding common stock |
“Beneficially Owned” means having the sole or shared power to vote, and/or the sole or shared power to invest the shares of common stock. The column contains stock which is, as of July 31, |
Mr. Cannon has |
|
Mr. Dunbar has |
|
34 |
|
|
Stock Ownership of Certain Beneficial OwnersSTOCK OWNERSHIPOF CERTAIN BENEFICIAL OWNERS
Based on the most recent Schedule 13G filings, the following table sets forth information about the number of shares of our common stock held by persons we know to be the beneficial owners, as determined in accordance with Rule13d-3 of the Exchange Act, of more than 5%5 % of the Company’s issued and outstanding common stock.
Name and Address | Common Stock Beneficially Owned (1) | Percent of Outstanding Shares as of the Record Date | ||||
Black Rock Inc. 55 East 52nd Street New York, New York 10055 | 1,874,997 | 14.6% | ||||
The Vanguard Group 100 Vanguard Blvd. Malvern, Pennsylvania 19355 | 1,302,643 | 10.15% | ||||
Champlain Investment Partners, LLC 180 Battery Street Burlington, Vermont 05401 | 679,020 | 5.29% |
Name and Address
| Common Stock Beneficially Owned 1
| Percent of Outstanding Shares as of the Dates Specified in their Respective Filings | ||
BlackRock Inc. 2 | ||||
55 East 52nd Street | 1,910,953 | 15.7% | ||
NewYork, NewYork 10055
| ||||
The Vanguard Group 3 | ||||
100 Vanguard Blvd. | 1,383,684 | 11.33% | ||
Malvern, Pennsylvania 19355
| ||||
Champlain Investment Partners, LLC 4 | ||||
180 Battery Street | 665,735 | 5.45% | ||
Burlington, Vermont 05401 |
This column shows shares beneficially owned by the named owner as follows: |
Black Rock (a) | Vanguard (b) | Champlain (c) | BlackRock
| Vanguard
| Champlain
| |||||||||||||||||
Sole voting power | 1,835,448 | 23,687 | 463,030 |
|
1,878,664
|
|
|
-
|
|
|
517,570
|
| ||||||||||
Shared voting power | 0 | 2,181 | 0 |
|
-
|
|
|
9,954
|
|
|
-
|
| ||||||||||
Sole investment power | 1,874,997 | 1,277,826 | 679,020 |
|
1,910,953
|
|
|
1,362,854
|
|
|
665,735
|
| ||||||||||
Shares investment power | 0 | 24,817 | 0 | |||||||||||||||||||
Shared investment power
|
|
-
|
|
|
20,830
|
|
|
-
|
|
The foregoing information is based solely on:
Information on BlackRock is based on a Schedule 13G/A filed by |
Information on Vanguard is based on a Schedule 13G/A filed by Vanguard |
Information on Champlain is based on a Schedule 13G/A filed by Champlain |
The following sections contain our Compensation Discussion and Analysis. This CD&A provides an overview and analysis of our executive compensation program and policies and the material compensation decisions we have made for our chief executive officer, chief financial officer and our other executive officers named in the “Summary Compensation Table” starting on page 48.53. This group is collectively referred to as our “Named Executive Officers” or “NEOs.” During FY 2019,2022, our NEOs were:
David Dunbar, President and Chief Executive Officer (“CEO”); |
|
Alan J. Glass, Vice President, |
Paul C. Burns, Vice President of Strategy and Business Development; and |
|
|
Mr. McGovern’s employment with the Company terminated on October 5, 2018. Ms. Bell served as interim Vice President of Human Resources following the departure of Mr. McGovern andMaschera was promoted to Vice President of Human Resources and elected asnominated a corporate officer in June 2019. As previously announced, Ademir Sarcevic joinedOctober 2021. Prior to his promotion and nomination, Mr. Maschera was the Company on September 9, 2019 as CFO and Mr. DeByle will be leavingPresident of the Company effective September 20, 2019 to pursue another opportunity.Standex Engraving Group.
Business HighlightsBUSINESS HIGHLIGHTS
Year overOur 2022 fiscal year sales increased by 2.7%built upon the momentum we had built in 2021 as growth from strategic acquisitions and new business opportunities was largely offset by unexpected market softness, especially in our Electronics and Refrigeration businesses. These market conditions, together with the direct and indirect impact of U.S. tariffs on China, resulted in a decrease in adjusted operating income of 7.7%. Despite our lower earnings, however, we increased cash flow by $20M due to improvements in working capital turns driven by improved management practices. We continued our business development strategy to seek and develop salesemergence as a growth laneways which are new avenues of business that evolve from our development of new products and/or markets. Our three FY 2019 acquisitions delivered $28.3M in sales growth in our higher margin Electronics and Engraving businesses, and we made progress on the rationalization of our portfoliooriented, industrial operating company with the successful divestiture of the lower-margin Cooking Solutions Group at an attractive price.
Our Compensation Program Aligns Pay with Performance
The Compensation Committee designs the executive compensation program to deliver pay in accordance with performance.solid operational execution. As a result, a large percentagedespite global supply chain and inflationary headwinds, we ended the year with five consecutive quarters of our Named Executive Officers’ total target compensation is“at- risk,” tied to performance-based annual incentive awards and long-term equity awards which also have a performance-based component. The Compensation Committee sets performance metrics and strategic goals that are rigorous and will drive sustainable creationrecord adjusted operating margins. Overall, net sales for FY 2022 of shareholder value.
On an annual basis, the Compensation Committee reviews an independent report, provided$735.3 million increased by the Compensation Committee’s external compensation consultant on realizable pay for performance to ensure that our executives’ realizable pay is in line with overall Company performance and is also competitive$79.1 million or 12.1% when compared to the Company’s peer group. This approach has createdprior year, and income from operations of $88.3 million increased by $29.1 million or 49.2%. Organic growth was the primary driver of our sales increase, while the increase in operating income reflected the increase in organic sales and improved operational performance in addition to the absence of a compensation program wherebyloss from the Named Executive Officers’ pay is in line with shareholder value creation, as shown in the adjacent graph with respect to our CEO’s compensation.
* Adjusted EPS excludesnon-cash charges, gains or losses associated with theFY 2021 sale of excess real estate,a business. Our GDP+ growth process resulted in a second consecutive year of record sales to new applications in Electronics and mergers, acquisitionsthe introduction of new products in most of our business units; and divestitures related costs that were incurred during thatour year-end backlog of $301.5 million represents a 22% increase over the previous year. Our balance sheet remains robust as we ended the fiscal year. Prior year EPS does not include contribution fromwith a net debt to EBITDA ratio of 0.98 (as defined under our revolving credit facility) and an available borrowing capacity of approximately $312 million. With an acceleration of ongoing development projects and continued focus on organic growth across the divested Cooking Solutions Group.
** CEO Pay representscompany, we close the CEO’s total compensation disclosed in the Summary Compensation Table set forth on page 48 of this proxy statement, less any earnings or losses reported in theNon-Qualified Deferred Compensation column.
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Good Compensation Practicesyear optimistic about FY 2023.
In addition to providing compensation for performance, the Compensation Committee strives to design the Company’s compensation program to include what is considered good practices in the industry. Much like our corporate governance practices, we believe that good compensation practices increase shareholder value, strengthen our business and encourage us to manage risk properly. The checklist below provides a highlight of our compensation practices.
Checklist of Compensation Practices What we do What we don’t do ✓ Executive compensation is tied to performance ✓ Caps on incentive payouts ✓ Strategic performance metrics ✓ Benchmarks determined based on peers of comparable size, complexity & industry ✓ Compensation Committee has the right to “claw back” awards ✓ Independent compensation consultant ✓ Stock ownership guidelines ✓ Encourage long-range planning ✓ Compensation Committee is comprised solely of independent directors No excise taxgross-up provisions No single-trigger change in control severance benefits No hedging or pledging of Company shares Our incentive programs do not encourage excessive risk taking No excessive perquisites
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The aforementioned principles have been established by the Compensation Committee to further the objectives and guide the design and administration of specific plans, agreements and arrangements for our executives, including the Named Executive Officers.
Incentive Compensation Should Be Performance-Based
INCENTIVE COMPENSATION SHOULD BE PERFORMANCE-BASED
The Compensation Committee believes that a significant portion of the compensation received by executives, including our Named Executive Officers, should be tied to the performance of the Company relative to established financial objectives and to individual strategic metrics. The elements of the executive compensation program embody this principle by linking the annual incentive opportunity and long-term equity grants directly to such performance.
Incentive Compensation Should RepresentOn an annual basis, the Majority of Total Target Compensation
The Compensation Committee believesreviews an independent report, provided by the external compensation consultant, on realizable pay for performance to ensure that our executives’ realizable pay is in line with overall Company performance and is also competitive when compared to the majority of an executive’s compensation should be “at risk,” as an incentive to drive the creation of sustainable shareholder value and align the interests of our executives with those of our shareholders. In 2019, our Named Executive Officers’ incentive compensation amounted to 58% of their total target compensation, on average. The Committee believes that the CEO’s incentive compensation should be a higher percentage of total compensation given the CEO’s strategic position and responsibility to drive company performance. In 2019, the CEO’s incentive compensation was 76% of his total target compensation. The following table presents the percentage of total target compensation that was“at-risk” for each Named Executive Officer, and the graph represents the mix of the Named Executive Officers’ total target compensation.Company’s peer group.
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CEO COMPENSATION MIX 20% 24% 30% 26% At Risk 76% Base Salary Annual Incentive AVERAGE NEO COMPENSATION MIX 17% 42% 19% At Risk 58% 22% LTIP PSU LTIP RSU Fixed Pay At Risk
The Compensation Committee believes that the majority of an executive’s compensation should be “at risk,” as an incentive to drive the creation of sustainable shareholder value and align the interests of our executives with those of our shareholders. In FY 2022, our Named Executive Officers’ incentive compensation amounted to 64% of their total target compensation, on average. The Committee believes that the CEO’s incentive compensation should be a higher percentage of total compensation given the CEO’s strategic position and responsibility to drive company performance. In FY 2022, the CEO’s incentive compensation was 79% of his total target compensation. The adjacent table presents the percentage of total target compensation that was “at-risk” for each Named Executive Officer, and the graph represents the mix of the Named Executive Officers’ total target compensation. | Name | Percent of FY 2022 Pay “At Risk” (%) | ||||||||
David Dunbar |
| 79.2% | ||||||||
Ademir Sarcevic | 68.3% | |||||||||
Alan J. Glass | 60.8% | |||||||||
Paul C. Burns | 60.8% | |||||||||
Flavio Maschera | 52.4% | |||||||||
2022 PROXY STATEMENT | 37 |
Incentive Compensation Should Balance Short-Term and Long-Term Performance
INCENTIVE COMPENSATION SHOULD BALANCE SHORT-TERMAND LONG-TERM PERFORMANCE
The Compensation Committee believes that driving sustained shareholder value creation requires that executive incentive compensation be appropriately balanced between short and long-term objectives. In addition, the Compensation Committee believes that such balancing discourages excessive risk taking that otherwise could drive short-term results at the expense of sustained long-term performance. Our executive compensation program promotes this objective by balancing the long-term incentive components in the form of equity-based awards, such as restricted stock awards and contingent performance shares, with short-term annual cash incentive opportunities.
The value of long-term incentive components is tied, in part, to our stock price, thereby aligning executives’ interests with those of shareholders. However, the Compensation Committee recognizes that our share price is an incomplete measure of Company performance in the short-term,short term, as other factors may significantly impact stock prices. Accordingly, the annual cash incentive opportunity component of executive compensation emphasizes current or short-term corporate performance and the realization of short-term defined business and financial objectives. The Compensation Committee has determined that the balance between annual cash incentive opportunities and long-term equity incentives encourages our Named Executive Officers to focus on creating short and long-term shareholder value, while fulfilling business objectives and strategic goals.
Long-Term Incentives Should Balance Stock Price Appreciation and Business/Financial-Based Achievements as well as Shareholder Return Relative to Other Industrial Manufacturing Companies
LONG-TERM INCENTIVES SHOULD BALANCE STOCK PRICE APPRECIATIONAND BUSINESS/FINANCIAL-BASED ACHIEVEMENTSASWELLAS SHAREHOLDER RETURN RELATIVETO OTHER INDUSTRIAL MANUFACTURING COMPANIES
Our FY 20192022 long-term incentive awards for NEOs other than the CEO are equally weighted between restricted stock awards and contingent performance shares. For our CEO, the FY 2022 mix is 40% weighted towards restricted stock awards and 60% weighted towards contingent performance shares. The restricted stock awards cliffcomponent will vest at the end ofon a3-year service period. pro-rata basis over three years. The contingent performance shares vest at the end of a3-year performance period based on achievement againstpre-established financial performance criteria. With respect to FY 20192022 PSU awards, ultimate award payouts will be adjusted by a relative TSR measure over the3-year performance period to reflect performance relative to other industrial companies in the S&P 600 Capital
Goods Index. The Compensation Committee has determined that this long-term incentive mix appropriately encourages long-term equity ownership, promotes a balance between stock price appreciation and financial-based achievement, aligns the interests of our Named Executive Officers with shareholders and aids in retention of our Named Executive Officers.
Compensation Levels Should be Competitive
COMPENSATION LEVELS SHOULDBE COMPETITIVE
The Compensation Committee reviews market compensation data compiled and prepared by the Compensation Committee’s independent executive compensation consultant to evaluate whether our executive compensation program is market competitive. The Compensation Committee uses this data to benchmark our executives’ base salary, annual incentive opportunities and long-term incentive compensation. Generally, the Compensation Committee then sets target compensation at approximately the market median. However, the Compensation Committee considers other relevant factors in setting each Named Executive
Officer’s total target compensation, including the Named Executive Officer’s scope of responsibilities and duties, experience, tenure with the Company, and individual performance as well as competitive market data, Company performance and internal pay equity. As a result, the Compensation Committee may set a Named Executive Officer’s total target compensation or an individual component of total target compensation below or above market median. By taking into account market data and other relevant considerations, the Compensation Committee is able to set each Named Executive Officer’s compensation at an appropriate level that enables us to attract and retain the highly qualified executives necessary to drive long-term enhancement of shareholder value.
The Executive Compensation Program Should be Reviewed Annually
THE EXECUTIVE COMPENSATION PROGRAM SHOULDBE REVIEWED ANNUALLY
The Compensation Committee believes that it is prudent to review and evaluate the executive compensation program annually in light of evolving market practices, regulatory requirements, the competitive market for executives and our executive compensation philosophy. This process is repeated in a structured manner annually.
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Basis for Determining Executive Compensation
The Compensation Committee uses a multi-faceted approach to designing the executive compensation program. The approach includes the use of the independent compensation consultant to advise the Compensation Committee on the selection of an appropriate peer group, analysis of the peer group’s practices and compensation levels and recommendations for the Compensation Committee to consider. Compensation levels for specific executives are based on various factors, including the executive’s experience, individual accomplishments and the breadth of the executive’s organizational responsibilities. The Compensation Committee discusses the program with the CEO and the VP of Human Resources to determine the effectiveness of the program in terms of achieving our stated objectives, including whether the current program is achieving desired motivational effects and properly incentivizing the executives.
Executive Compensation ConsultantCOMPONENTSOF EXECUTIVE COMPENSATION
In FY 2019, the Compensation Committee retained the same independent compensation consultant, Meridian Compensation Partners, LLC (“Meridian”),OVERVIEW
We provide three elements of total direct compensation: base salary, annual incentives and long-term incentives, which has assisted the Compensation Committee since 2015. Meridian is an internationally recognized executive compensation consulting firm. No other compensation consultant was engaged in FY 2019.
Meridian was retained to assist the Compensation Committee in the development of a compensation peer groupare described below. We also provide limited perquisites (see page 48) and to advise the Compensation Committee on our existing executive compensation program. Meridian provided research, data analyses, survey informationstandard retirement and design expertise as part of its services. Meridian also notified the Compensation Committee of regulatory developments and market trends relating to executive compensation practices. Meridian did not determine nor recommend the exact amount of compensation for any Named Executive Officer. From time to time, Meridian also performs an analysis of independent director compensation.
For FY 2019, Meridian conducted a competitive assessment of our executive compensation program (including, design, features and target pay opportunities) against our compensation peer group. Based on Meridian’s assessment, the Compensation Committee determined that our executive compensation program is reasonable and appropriate when compared to our peer group.
The Compensation Committee, in determining whether to continue retaining Meridian for FY 2019, assessed Meridian’s independence under the NYSE’s listing standards. Meridian provided the Compensation Committee with confirmation of its independent status under the NYSE’s standards. As such, the Compensation Committee believes that Meridian is independent and that there is no conflict of interest between Meridian and the Company, the Company executives, the Compensation Committee or its members.
Peer Group
The following selection criteria were used to establish the Company’s Fiscal 2019 compensation peer group:
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Based on this selection criteria, our FY 2019 peer group consisted of the following 20 companies:benefit plans (see page 47).
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The Compensation Committee, with Meridian’s assistance, routinely reviews the selection criteria and the peer group companies to achieve a relative size positioning that is within a competitive range of median, that is, between the 40th and 60th percentile of the peer group companies. As a result of its most recent review (applicable for FY 2020), two companies, Hardinge Inc. and Xerium Technologies, Inc., were removed from our peer group as they were both acquired during FY 2019 and no longer publicly disclose their compensation practices. Additionally, as a result of our latest comprehensive analysis, 5 companies were removed and replaced for FY 2020, based largely on those companies no longer meeting the revenue criteria.
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Components of Executive Compensation
Overview
The primary components of the Company’s executive compensation program in FY 2019 are shown in the following table and are discussed in detail below:
Description
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Annual Incentive | ||||||||||||
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Designed to reward results in the prior year. Annual cash incentives based on: u Achievement of Company financial metrics u Individual performance on pre-established strategic goals | ||||||||||||
Long-Term Incentives | Forward-looking equity awards intended to drive future growth and align the interests of NEOs and shareholders. Grants awarded in the form of restricted stock awards and performance share units. Current performance measures include the following metrics and payouts are subject to a relative TSR modifier: u Modified ROIC |
Base Salary
BASE SALARY
Base salary is fixed cash compensation. During the first quarter of each fiscal year, the Compensation Committee reviews and establishes the base salaries of theCompany executives, including the Named Executive Officers. For each Named Executive Officer, the Compensation Committee takes into account a number of factors, including the scope of the executive’s responsibilities and duties, experience, tenure with the Company, and individual performance as well as competitive market data, Company performance and internal pay equity. The Compensation Committee does not assign any relative or specific weights to these factors. Salary levels are reviewed annually and are adjusted when appropriate. Increases in base salary are not automatic or guaranteed in order to promote a performance culture.
Effective October 1st of FYs 20182021 and 2019,2022, the base salary of each Named Executive Officer was set as follows:
Name | FY 2019 Base ($) | FY 2018 Base ($) | Increase | |||||||||
David Dunbar | 827,270 | 803,175 | 3 | % | ||||||||
Thomas D. DeByle | 423,872 | 411,526 | 3 | % | ||||||||
Alan J. Glass | 350,000 | 339,771 | 3 | % | ||||||||
Paul C. Burns(1) | 350,000 | 318,270 | 10 | % | ||||||||
Annemarie Bell(2) | 214,434 | 185,657 | 16 | % | ||||||||
Ross McGovern | 299,112 | 290,400 | 3 | % |
Name | FY 2022 Base ($) | FY 2021 Base ($) | Increase | |||||||||
David Dunbar | 869,130 | 869,130 | - | |||||||||
Ademir Sarcevic | 453,097 | 439,900 | 3% | |||||||||
Alan J. Glass | 378,741 | 367,710 | 3% | |||||||||
Paul C. Burns | 378,741 | 367,710 | 3% | |||||||||
Flavio Maschera 1 | 403,431 | 366,755 | 10% |
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Annual Incentive Opportunity
ANNUAL INCENTIVE OPPORTUNITY
The Compensation Committee establishes the annual cash incentive opportunity for executives including our Named Executive Officers through a detailed performance planning process called the Balanced Performance Plan (“BPP”). During the BPP process, the Compensation Committee establishes (i) the target incentive amounts; (ii) the respective weight of the financial performance measures and strategic goals; (iii) the Company financial performance goals at “threshold,” “target,” and “superior” levels; and (iv) the strategic goals for each Named Executive.Executive Officer. The BPPsfinancial metrics and each strategic goal are reviewed and discussed during the course of two Compensation Committee meetings through the first quarter of each fiscal year before being approved.
BPP PROCESS Step 1 Establish target incentive amounts Step 2 Establish % of target allocated to financial performance measures Establish % of target allocated to strategic goals Step 3 Establish threshold, target and superior levels Allocate percentages between strategic goals Step 4 Quantitatively evaluate performance Qualitatively evaluate performance
2019 Annual Incentive Formula2022 ANNUAL INCENTIVE FORMULA
2019 Annual Incentive Formula Base Salary Target Percentage Financial Achievement Factor* Strategic Achievement Factor* Annual Incentive Amount* These factors are calculated by taking the goal weight and multiplying it by the goal achievement percentage. For example, if the weight of financial goals totals 75%, and the financial achievement percentage is 100%, the financial achievement factor would be 75%.
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Target Incentive AmountsTARGET INCENTIVE AMOUNTS
Each year the Compensation Committee sets the target incentive amount for each Named Executive Officer, expressed as a percentage of the executive’s base salary. The Compensation Committee sets these target incentives based on a number of factors, including the Named Executive Officer’s role and responsibilities, internal pay equity and competitive market data, as provided by Meridian, in consultation with Meridianthe compensation consultant and in adherence to our stated executive compensation objectives and principles. The target annual incentive opportunity for each Named Executive Officer in FY 20192022 is as follows:
Name | | Target Annual Incentive (% of Base Salary) |
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David Dunbar | 105% | 868,634 | ||||||
Thomas D. DeByle | 70% | 296,710 | ||||||
Alan J. Glass | 55% | 192,500 | ||||||
Paul C. Burns | 55% | 192,500 | ||||||
Annemarie Bell (1) | 25% | 53,609 | ||||||
Ross McGovern | 45% | 134,600 |
Name | Target Annual Incentive (% of Base Salary) | Target Annual Incentive Amount ($) | ||||||
David Dunbar | 105 | % | 912,587 | |||||
Ademir Sarcevic | 65 | % | 294,513 | |||||
Alan J. Glass | 55 | % | 208,308 | |||||
Paul C. Burns | 55 | % | 208,308 | |||||
Flavio Maschera 1 | 50 | % | 201,715 |
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Goal Weight within Target IncentiveGOAL WEIGHTWITHIN TARGET INCENTIVE
After establishing a target incentive amount for each executive, the Compensation Committee determines the relative weight of financial performance measures and strategic goals. For FY 2019,2022, the Compensation Committee set the following relative weight of these performance measures (except for Mr. Burns):measures:
75% of the annual incentive opportunity would be based on the achievement of financial performance goals, and |
25% of the annual incentive opportunity would be based on individual achievement of strategic goals. |
The foregoing relative weight represent a 5 percentage point increase with respect to the financial performance goals and a corresponding 5 percentage point decrease with respect to the strategic goals. This change in weight was made to enhance alignment with peer group and shareholder preferences. Payout for the achievement of both financial performance and strategic goals can range between 0% and 200% and total, where performance below threshold levels corresponds to a payout of 0%, while performance at or above superior levels corresponds to a payout of 200%. For example, if the weight of financial goals is 75%, the maximum financial achievement factor would be 150%. Similarly, if the weight of strategic goals is 25%, the maximum strategic achievement factor would be 50%. The combined factors are capped at 200% of the target percentages specified above..
With respect to Mr. Burns, the Compensation Committee determined that 30% of his annual incentive opportunity would be based on achievement of financial performance goals and 70% of his annual incentive opportunity would be based on strategic goals due to the nature of his position as head of the Company’s strategy and business development function.
40 | 2022 PROXY STATEMENT |
Setting Financial Performance MeasuresSETTING FINANCIAL PERFORMANCE MEASURES
The Compensation Committee, working with the CEO, evaluates and establishes financial objectives that correlate to the creation of shareholder value, are aligned with the Company’s annual business plan and are appropriate measures for evaluating executive performance. For FY 2019,2022, the Compensation Committee selected the following twothree financial performance measures: (i) EBITDA, (ii) adjusted EPS, and (ii)(iii) net working capital turns. The Compensation Committee selected these performance measures because it believes they are the most important financial factors in preserving and enhancing shareholder value in the short-term and sustaining growth and stability for the long-term. Last year (and previous fiscal years) the Compensation Committee had selected adjusted EPS and sales as performance measures for the annual incentive plan. For FY 2019, the Compensation Committee therefore lessened the absolute focus on EPS, although achieving a specified EPS target was included in each NEO’s strategic goals.
After determining the performance measures, the Compensation Committee setsets “threshold,” “target,” and “superior” performance goals, which correspondedcorrespond to annual incentive payouts of 50%, 100% or 200% of the target incentive amount, respectively.respectively, except for “entry” for the EBITDA performance measure corresponds to a payout of 25%. If achievedactual performance fellfalls between two performance levels, the amount of the incentive payout would be determined through interpolation. However, no payout would be made if achievedactual performance fellfalls below threshold.entry for the EBITDA performance measure or below threshold for all other measures. The Compensation Committee setsets the “entry” and “threshold” performance levellevels high enough so that achieving the level is not guaranteed, while setting the “superior” performance level high enough so that achieving it is difficult and represents an outstanding accomplishment. The Compensation Committee may adjust the financial performance targets to reflect the impact of special events, such as acquisitions or divestitures, during a fiscal year. These adjustments are made pursuant to established guidelines and are appropriate in light of long-term growth strategies and business operations.
Setting Strategic GoalsFINANCIAL GOALS & RESULTSFOR FY 2022
For FY 2022, the financial performance metrics, weights, achieved performance levels and payout percentages were as follows:
Financial Performance Metric | Entry Threshold Target Superior | Weight | Weighted Achievement | |||||||
Adjusted EBITDA 1 | 40% | 62.1% | ||||||||
Adjusted EPS 2 | 5% | 10% | ||||||||
Net Working Capital Turns Q1 3 | 6% | 12% | ||||||||
Net Working Capital Turns Q2 | 6% | 12% | ||||||||
Net Working Capital Turns Q3 | 6% | 7.2% | ||||||||
Net Working Capital Turns Q4 | 6% | 3.3% | ||||||||
Net Working Capital Turns 5 Point Average 4 | 6% | 6.5% | ||||||||
Financial Goals Weighted Achievement Total | 113.1% |
1 | EBITDA, which stands for earnings before interest, tax, depreciation and amortization, is a non-GAAP financial measure that is determined by the sum of (i) income from continuing operations before income taxes, (ii) interest expense, and (iii) depreciation and amortization. Adjusted EBITDA adjusts for restructuring charges, litigation charges, purchase accounting expenses and acquisition related costs. |
2 | This value, which is greater than the Company’s actual reported diluted earnings per share of $5.07 for FY 2022, adjusts for restructuring charges, purchase accounting expenses, insurance recoveries, discontinued operations, acquisition costs and any income tax impacts thereof, along with one-time tax adjustments. |
3 | Net working capital turns measures the ratio of sales to net working capital. The ratio was calculated by using annualized net sales for the trailing three-months of the listed quarter, and dividing by the net working capital (calculated as net accounts receivable and inventory minus accounts payable) at the end of the listed quarter. |
4 | This five-point average included the net working capital turns for Q1-Q4 of FY 2022 and Q4 of FY 2021. |
2022 PROXY STATEMENT | 41 |
SETTING STRATEGIC GOALS
The Compensation Committee, in consultation with the Board, evaluates and establishes strategic objectives that correlate with the creation of shareholder value, align with the Company’s business plan and are appropriate measures for judging individual executive performance. As with financial performance measures, the Compensation Committee sets relative weights and metrics for each strategic goal. The specific goals are developed based on the individual nature of an executive’s role and responsibilities.
In FY 2019,2022, the Compensation Committee set the following strategic goals for the CEO:
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In consultation with the CEO, the Compensation Committee sets strategic goals for executive officers, including the other Named Executive Officers, that are tied to the completion of specific projects in their functional areas. These projects are important to the Company in that they improve productivity and significantly lower the cost structures of the respective departments, resulting in better processes and reduced costs.
Results forSTRATEGIC GOALS & RESULTSFOR FY 20192022
Financial Goals and Results. For FY 2019, the financial goals, weight, achieved performance levels and payout percentage were as follows:
Financial Performance Metric Threshold (50%) Target (100%) Superior (200%) Weight Payout Percentage EBITDA (1) $117,221 $132,291 $146,995 $165,369 45% 0% Net Working Capital Turns Q1(2) 4.2 4.5 4.7 5.2 0% (3) 0 Net Working Capital Turns Q2 4.5 4.5 5.0 5.5 7.5% 3.75% Net Working Capital Turns Q3 4.7 4.7 5.2 5.7 7.5% 3.75% Net Working Capital Turns Q4 4.8 5.3 5.6 5.8 7.5% 12.0% Net Working Capital Turns 5 Point Average (4) 4.7 4.9 5.3 5.5 7.5% 5.8% Financial Goal Weighted Achievement Total 25.3% (5)
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Strategic Goals and Results. The Compensation Committee met with the CEO to evaluate the performance of each Named Executive Officer (other than the CEO) against their strategic goals. To determine the extent to which each strategic goal was met, the Compensation Committee evaluated several factors including the difficulty of reaching the goal, the work performed to achieve the goal, the quality of the work performed and other factors that influenced the ease or difficulty of meeting the goal. The Compensation Committee determined that each Named Executive Officer achieved greater than target on their strategic goals. For the CEO, the Compensation Committee evaluated his performance based on the following:
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OVERALL ANNUAL INCENTIVE OPPORTUNITY RESULTSFOR NEOS
The following table shows the overall annual incentive opportunity results for FY 2019.
Name | Financial Performance of Target) | Strategic Goals (% of Target) | Total BPP Score | Target Annual Incentive Amount ($) | Annual Incentive Amount ($) | |||||||||||||||
David Dunbar | 25% | 30% | 55% | 868,634 | 480,354 | |||||||||||||||
Thomas D. DeByle | 25% | 30% | 55% | 296,710 | 164,081 | |||||||||||||||
Alan J. Glass | 25% | 30% | 55% | 192,500 | 106,453 | |||||||||||||||
Paul C. Burns | 10% | 97% | 107% | 192,500 | 206,360 | |||||||||||||||
Annemarie Bell | 25% | 30% | 55% | 53,609 | 29,646 | |||||||||||||||
Ross McGovern(1) | 0% | 0% | 0% | 134,600 | 0 |
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2022. Each executive has the opportunity to participate in the Management Stock Purchase Plan, (“MSPP”),described below, under which executives can defer apre-selected percentage of their annual incentive awards into the receipt of RSUs at a 25% discount. More information can be found in the Management Stock Purchase Plan section on page 42.
Long-Term Incentive Plan
In 2008, the Company, with the approval of its shareholders, adopted the 2008 Long Term Incentive Plan (“LTIP”). The purpose of the LTIP is to align executives’ interests with those of shareholders through the annual grant of long-term equity awards. These long-term equity awards reward executives for the Company’s performance over a multi-year period. The LTIP expired in October 2018 and was replaced by the 2018 Omnibus Incentive Plan (“OIP”), which was approved by our shareholders at the October 23, 2018 annual meeting. All long term incentive awards to NEOs for FY 2019 were made in September 2018 under the LTIP.
LTIP Structure
The FY 2019 LTIP consists of two types of equity awards: time-vested restricted stock awards (RSAs) and performance-based performance share units (PSUs). The Compensation Committee selected these equity vehicles for FY 2019 because each aligns the interests of our Named Executive Officers with those of our shareholders, enhances retention of our Named Executive Officers and provides the opportunity to meaningfully increase level of stock ownership by our Named Executive Officers. In addition, the PSUs motivate our NEOs and reward achievement of financial metrics (and share performance) that are aligned to our long-term business strategy and build long-term shareholder value.
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Each RSA vests on the 3rd anniversary of the grant, provided that the RSA holder is employed continuously through the vest date. However, RSAs will immediately vest upon death, disability or retirement. All RSAs under the LTIP are considered beneficially owned by the executive, have voting rights, and earn dividend equivalents, which are paid upon vesting.
Each PSU grant cliff vests over a3-year performance period based on results achieved against Compensation Committee-approved performance metrics. Payouts under the PSU grant may range from 0% to 200% of target award and are settled in shares of common stock. If threshold performance goals are not achieved by the conclusion of the performance period, the PSU award would be forfeited and no shares would be delivered under the award. PSUs are also subject to forfeiture upon termination of employment during the performance period for any reason other than death, disability, or involuntary termination in connection with a change in control.
The Compensation Committee believes that long-term incentive compensation is essential for retaining and motivating executives. It further believes that providing our executives with long-term incentives will encourage them to operate the Company’s business with a view towards building long-term shareholder value. Based on these considerations, the Compensation Committee, in consultation with Meridian, establishes (i) the target incentive amounts, (ii) the percentage of the target award that is granted in the form of RSAs and PSUs, and (iii) the performance measures at “threshold,” “target” and “superior” levels.
FY 2019 Target Incentive Amounts
For FY 2019, the Compensation Committee set the target long-term incentive compensation for each Named Executive Officer, expressed as a percentage of the executive’s base salary based on a number of factors, including the Named Executive Officer’s role and responsibilities, internal pay equity, competitive market data and our stated executive compensation objectives and principles. The Compensation Committee also set the percentage of the total incentive compensation that will be granted in the form of PSUs and RSAs based on the understanding that executives in a position to drive overall Company performance should have a larger portion of their long-term incentive award be awarded in PSUs.
For FY 2019, the Compensation Committee established the following target long-term incentive opportunity and PSU percentage for the Named Executive Officer:
Name | Target LTIP (% of Base Salary) | Target LTIP Amount ($) | Target LTIP Awarded in PSUs | Financial Achievement Factor | Strategic Achievement Factor | Total BPP Score | Target Annual Incentive Amount ($) | Annual Incentive Amount ($) | ||||||||||
David Dunbar | 205% | 1,695,904 | 60% | 113.1 | % | 35.0% | 148.1% | 912,587 | 1,351,541 | |||||||||
Thomas D. DeByle | 170% | 720,582 | 50% | |||||||||||||||
Ademir Sarcevic | 113.1 | % | 39.0% | 152.1% | 294,513 | 447,954 | ||||||||||||
Alan J. Glass | 100% | 350,000 | 50% | 113.1 | % | 29.0% | 142.1% | 208,308 | 296,005 | |||||||||
Paul C. Burns | 100% | 350,000 | 50% | 113.1 | % | 37.0% | 150.1% | 208,308 | 312,670 | |||||||||
Annemarie Bell (1) | 10% | 21,443 | 0% | |||||||||||||||
Ross McGovern | 70% | 209,378 | 50% | |||||||||||||||
Flavio Maschera 1 | 113.1 | % | 32.0% | 145.1% | 201,715 | 292,689 |
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FYs 2017-2019 Performance Goals & Results
The FY 2017 performance share units were subject to the following performance metrics for the3-year period ending on June 30, 2019:
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The first goal,3-year cumulative EBITDA, which stands for earnings before interest, tax, depreciation and amortization, is anon-GAAP financial measure that is determined by the sum of (i) income from continuing operations before income taxes, (ii) interest expense, and (iii) depreciation and amortization. The Compensation Committee selected this financial goal because of its direct correlation to profitability and cash flow. Profitability and cash flow are critical to the Company’s ability to complete acquisitions, invest in its core businesses, declare dividends for shareholders and improve overall liquidity.
The second goal,3-year average return on invested capital, is the average over the three-year period of the Company’s return on invested capital. The Compensation Committee selected average ROIC as the second performance measure because it provides a means of determining whether the Company’s earnings are being invested in a way that optimizes the Company’s returns.
The Compensation Committee may adjust the threshold, target and superior levels to reflect the impact of special events, such as acquisitions or divestitures, during the performance period. These adjustments are made pursuant to established guidelines and are appropriate in light of long-term growth strategies and business operations.
The threshold, target and superior levels, actual performance, weight and weighted total for the 2017-2019 performance period are:
Financial Performance Metric & Goal Threshold (50%) Target (100%) Superior (200%) Weight Payout Percentage EBITDA $347,171 $343,851 $389,509 $404,638 60% 32.2% ROIC 9.9% 9.74% 13.6% 13.8% 40% 20.7% Weighted Achievement Total 52.9%
Given this weighted achievement total, PSUs granted on August 30, 2016 vested at 52.9%, for the following share payouts and value as of the vest date:
Name | Shares granted on August 30, 2016 (#) | Shares Vesting (#) | Value of Shares Vesting ($) (1) | |||||||||
David Dunbar | 11,150 | 5,899 | 405,588 | |||||||||
Thomas D. DeByle | 3,605 | 1,907 | 131,134 | |||||||||
Alan J. Glass | 1,965 | 1,040 | 71,478 | |||||||||
Paul C. Burns | 1,197 | 633 | 43,542 | |||||||||
Annemarie Bell (2) | 0 | 0 | 0 | |||||||||
Ross McGovern(3) | 944 | 0 | 0 |
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FYs 2018-2020 Performance Goals
The performance metrics for the3-year period of FYs 2018-2020 and their respective weights are the same as the FYs 2017-2019 metrics and weights. The threshold, target and superior goal levels differ. This performance period ends at the end of FY 2020 - June 30, 2020. If the goals are met, all earned shares will be delivered to the executives once the Compensation Committee certifies the financial performance results.
FYs 2019-2021 Performance Goals
The performance metric for the3-year period of FYs 2019-2021 is a modified ROIC measure, where goodwill is excluded to eliminate distortion from acquisitions, and accumulated depreciation and amortization is added back into the calculation. The Compensation Committee selected this modified ROIC measure because it reflects the impact of Company efforts to improve the quality of earnings, both organically and inorganically, and supports the Committee’s view that improvement in quality of earnings drives value creation for shareholders. To further reflect performance relative to other industrial companies, the achievement of the measures will be adjusted by a relative TSR measure over the three-year performance period. Specifically, actual achievement would (i) be reduced up to 25% if the Company’s TSR falls in the first quartile of the peer group, (ii) remain unadjusted if the Company’s TSR falls in the second and third quartiles, and (iii) be increased by up to 25% if the Company’s TSR falls within the upper quartile. The peer group selected for this relative TSR modifier is theMANAGEMENT S&P 600 Capital Goods Index which the Committee believes is a reasonable proxy to measuring a broad, and therefore consistent, group of companies that will experience similar market influences over the cycle of the long-term incentive performance period. Our NEOs, therefore, are partially compensated based on how our performance compares to similar investment alternatives when considering total shareholder return performance.
This performance period ends at the end of FY 2021 - June 30, 2021. If the goals are met, and subject to the TSR modifier, all earned shares will be delivered to the executives once the Compensation Committee certifies the financial performance results.
Management Stock Purchase PlanTOCK PURCHASE PLAN
The Compensation Committee believes that while the annual incentive award provides motivation for executives to meet annual performance goals, the Management Stock Purchase Plan (“MSPP”) adds an additional long-term component. Under the MSPP, management at a certain salary level can elect to defer their annual incentive awards into the receipt of RSUsrestricted stock units (RSUs”) at a 25% discount, valued at the lower of (i) the closing price of the Company’s common stock on the last business day of the fiscal year (June 28, 2019)30, 2022) or (ii) the closing price of the Company’s common stock on the date on which the annual incentive award is certified by the Compensation Committee (August 30, 2019)22, 2022). Executives must make their election prior to the beginning of the fiscal year and can defer up to 50% of their annual incentive award. These RSUs cliff vest at the end of a3-year period and the executive receives shares of stock equal to the amount of RSUs granted. Executives accrue dividends, which are paid upon vesting, on the RSUs, but do not have voting rights until the shares underlying the RSUs are delivered. The following table details, for FY 2019,2022, the percent each Named Executive Officer elected to defer under the MSPP, the value of that deferral and the amount of RSUs granted pursuant to the deferral.
Name | Annual Incentive Award Deferred | Amount of the Deferral ($) (1) | RSUs Granted (#) (2) | Annual Incentive Award Deferred (% of Award) | Amount of the Deferral ($) 1 | RSUs Granted (#) 2 | ||||||||||||
David Dunbar | 50% | 240,177 | 4,658 | 50% | 675,770 | 10,627 | ||||||||||||
Thomas D. DeByle | 50% | 82,040 | 1,591 | |||||||||||||||
Ademir Sarcevic | 0% | - | - | |||||||||||||||
Alan J. Glass | 50% | 53,226 | 1,032 | 50% | 148,003 | 2,327 | ||||||||||||
Paul C. Burns | 20% | 41,272 | 800 | 15% | 46,900 | 737 | ||||||||||||
Annemarie Bell(3) | 0% | 0 | 0 | |||||||||||||||
Ross McGovern(4) | 0% | 0 | 0 | |||||||||||||||
Flavio Maschera 3 | 50% | 123,056 | 1,935 |
The amount of the deferral is the dollar value of the annual incentive award that is actually deferred into the receipt of discounted RSUs under the MSPP. |
Based on the closing price of the Company’s common stock on June 30, 2022 ($84.78), the closing price of the Company’s common stock on the last day of the fiscal year, and discounted by 25%. RSUs have been rounded down to the nearest whole unit. |
3 | Mr. Maschera’s MSPP deferral amount is based on his actual annual incentive payout of €246,828 as converted from Euros to USD using the August 23, 2022 exchange rate of 0.9971, the date used for grants under the MSPP. |
2022 PROXY STATEMENT | 43 |
LONG-TERM INCENTIVE PLAN
In 2018, the Company, with the approval of its shareholders, adopted the 2018 Omnibus Incentive Plan (“OIP”). The purpose of the OIP is to align executives’ interests with those of shareholders through the annual grant of long-term equity awards. These long-term equity awards reward executives for the Company’s performance over a multi-year period. All long term incentive awards to NEOs for FY 2022 were made in August 2021 under the OIP.
OIP STRUCTURE
The FY 2022 OIP awards consist of two types of equity awards: time-vested restricted stock awards (“RSAs”) and performance-based performance share units (“PSUs”). The Compensation Committee selected these equity vehicles for FY 2022 because each aligns the interests of our NEOs with those of our shareholders, enhances retention of our NEOs and provides the opportunity to meaningfully increase the level of stock ownership by our NEOs. In addition, the PSUs motivate our NEOs and reward achievement of financial metrics (and share performance) that are aligned to our long-term business strategy and build long-term shareholder value.
OIP Component | Description | |||
Awards of Restricted Stock (“RSAs”) | Time-based, annual pro-rata vesting over a 3-year period | |||
Performance Share Units (“PSUs”) | Cliff vest at the end of a 3-year period at 0 % to 200 % of award value based on pre-determined financial performance metrics |
For FY 2022 RSAs, the RSAs will vest on a pro-rated basis on the 1st, 2nd and 3rd anniversaries of the grant date, provided that the RSA holder is employed continuously through the particular vest date. Outstanding RSAs from FY 2020 grants will vest on the 3rd anniversary of the grant, provided that the RSA holder is employed continuously through the vest date. The Compensation Committee adjusted the vesting schedule for RSAs granted after FY 2020 based on a review of peer practices and the perspective that pro-rata vesting is a more effective tool in attracting and retaining high potential employees. All RSAs will immediately vest upon death, disability or retirement. All RSAs under the OIP are considered beneficially owned by the executive, have voting rights, and earn dividend equivalents, which are paid upon vesting.
Each PSU grant cliff vests at the end of a 3-year performance period based on results achieved against Compensation Committee-approved performance metrics. Payouts under the PSU grant may range from 0% to 200% of the target award and are settled in shares of common stock. Payout begins at 50% of target for achieving threshold performance goals. If threshold performance goals are not achieved by the conclusion of the performance period, the PSU award would be forfeited and no shares would be delivered under the award. PSUs are also subject to forfeiture upon termination of employment during the performance period for any reason other than death, disability, retirement or involuntary termination in connection with a change in control.
Additionally, the Compensation Committee has the discretion to grant awards of restricted stock for a variety of reasons, including sign-on bonuses to attract talent and discretionary grants to retain and motivate executives.
The Compensation Committee believes that long-term incentive compensation is essential for retaining and motivating executives. It further believes that providing our executives with long-term incentives will encourage them to operate the Company’s business with a view towards building long-term shareholder value. Based on these considerations, the Compensation Committee, in consultation with its external compensation consultant, establishes (i) the target incentive amounts, (ii) the percentage of the target award that is granted in the form of RSAs and PSUs, and (iii) the performance measures at “threshold,” “target” and “superior” levels.
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FY 2022 TARGET INCENTIVE AMOUNTS
For FY 2022, the Compensation Committee set the target long-term incentive compensation for each Named Executive Officer, expressed as a percentage of the executive’s base salary based on a number of factors, including the Named Executive Officer’s role and responsibilities, internal pay equity, competitive market data and our stated executive compensation objectives and principles. Since the CEO is in the best position to drive overall Company performance, the CEO should have a larger portion of his long-term incentive award be awarded in PSUs as opposed to RSAs. The Compensation Committee set the CEO’s percentage of PSUs at 60% of the target award, while the other NEOs’ PSU grants were set at 50% of their target award.
For FY 2022, the Compensation Committee established the following target long-term incentive awards, with the percentage of such award granted as PSUs for each Named Executive Officer:
Name
| Target Award
| Target Award Amount ($)
| Target Award
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David Dunbar | 275% | 2,390,108 | 60% | |||||||||
Ademir Sarcevic | 150% | 679,646 | 50% | |||||||||
Alan J. Glass | 100% | 378,741 | 50% | |||||||||
Paul C. Burns | 100% | 378,741 | 50% | |||||||||
Flavio Maschera 1 | 60% | 242,059 | 50% |
1 | Mr. Maschera’s target incentive amount for FY 2022 OIP grants was based on his FY 2022 base salary of €340,218 as converted from Euros to USD using the June 30, |
PERFORMANCE MEASURES
For the FY 2020-2022, FY 2021-2023 and FY 2022-2024 performance periods, the Compensation Committee set a single modified ROIC measure, as calculated using the 5-point average over the last fiscal year of the particular performance period. The modified ROIC measure is calculated by adjusting the denominator to add accumulated depreciation and accumulated amortization and remove goodwill. This ratio reflects the improved efficiency of the Company’s operating assets to generate profits while reducing distortion from the effects of divestitures and acquisitions. The Compensation Committee selected this modified ROIC measure because it reflects the Company’s efforts to improve the quality of earnings, whether they come from organic actions or through inorganic portfolio moves. The measure supports the Committee’s view that improvement in quality of earnings drives shareholder value creation. To more broadly reflect Standex value creation for shareholders relative to other industrial companies, the achievement of the measure will be adjusted by a relative TSR modifier over the three-year performance period. Specifically, actual awards will be modified up or down as follows:
If TSR over the three-year performance period is: | Then: | |||
At or above the 75th percentile of the comparator group | The award will be increased up to 25% | |||
At or above the 25th and below the 75th percentile of the comparator group | No change to the award | |||
Below the 25th percentile of the comparator group | The award will be decreased up to 25% |
The peer group selected for this relative TSR modifier is the S&P 600 Capital Goods Index which the Committee believes is a reasonable proxy to measuring a broad, and therefore consistent, group of companies that will experience similar market influences during the performance period. Our NEOs, therefore, are partially compensated based on how our performance compares to similar investment alternatives when considering total shareholder return performance.
2022 PROXY STATEMENT | 45 |
STATUSOF LONG TERM INCENTIVE PLAN PROGRAMS
Performance Period and Measure | Performance Levels | Weighted Achievement | Status & Commentary | |||||||
FY 2020-2022 | u Results were certified in August 2022. | |||||||||
Modified ROIC | Threshold Target Superior | 133.0% | u The Modified ROIC, as calculated using a 5-point average from Q4 FY 2021 to Q4 FY 2022, was between target and superior levels. | |||||||
u Company’s 3-year TSR ranked in the 55th percentile amongst the peer group of S&P 600 Capital Goods companies. u Final payout was certified at 133.0 % for Company performance and individual share payouts are in the table below. |
FY 2021-2023 awards will be certified in August 2023, while FY 2022-2024 awards will be certified in August 2024.
As certified by the Compensation Committee, the FY 2020-2022 performance period ended on June 30, 2022 and the PSUs granted on September 6, 2019 vested at 133.0%, for the following share payouts and value as of the date of certification:
Name
| Shares granted on
| Shares Vesting
| Value of Shares
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David Dunbar |
| 18,163 |
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| 24,156 |
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| 2,307,140 |
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Ademir Sarcevic |
| 4,423 |
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| 5,882 |
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| 561,790 |
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Alan J. Glass |
| 2,561 |
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| 3,406 |
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| 325,307 |
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Paul C. Burns |
| 2,561 |
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| 3,406 |
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| 325,307 |
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Flavio Maschera |
| 1,261 |
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| 1,677 |
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| 160,170 |
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1 | Based on the stock price on the date the Compensation Committee certified the |
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Retirement Plans
RETIREMENT PLANS
Standex Retirement Savings PlanSTANDEX RETIREMENT SAVINGS PLAN
The Company offers a qualified savings and investment 401(k) plan to most of ournon-production U.S.-based employees, including our Named Executive Officers.Officers, other than Mr. Maschera, who is an Italian citizen. This plan provides eligible employees an opportunity to save for retirement on both apre-tax andafter-tax basis up to 100% of their eligible pay subject to annual IRS limits. The Company provides eligible employees with a matching contribution equal to:
100% of the employee’s contribution for the first 3% of the employee’s total compensation (base salary plus annual incentive award); and |
50% of the employee’s contribution for the next 2%. |
The Named Executive Officers, andother than Mr. Maschera, as well as employees who are at a location that is covered by thenow-frozen Standex Pension Plan (see below), receive an additional 1% of their eligible pay as a Company contribution regardless of the amount of the employee’s contribution. Some employees receive an additional sliding scaleage-based Company contribution if they were employed with the Company on December 31, 2007 and were of a certain age. All eligible employees are immediately 100% vested in all contributions to this plan.
Standex Deferred Compensation PlanSTANDEX DEFERRED COMPENSATION PLAN
The Standex Deferred Compensation Plan is anon-qualified, “top hat” and unfunded plan maintained for the purpose of permitting a select group of management and highly compensated employees, including Named Executive Officers, other than Mr. Maschera, to continue saving for retirement once they can no longer make contributions to the Retirement Savings Plan. If a highly compensated employee reaches the IRS compensation limit for the Retirement Savings Plan, the Deferred Compensation Plan allows the employee to continue to save for retirement under nearnearly identical terms. Eligible employees may defer up to 50% of their base salaries and 100% of their annual bonuses that combined exceed the IRS compensation limit. All Company contributions (match andnon-match) are made on the same basis as the Retirement Savings Plan described above.
Deferral elections must be made by December 31st of each year for the upcoming calendar year and all deferral elections are irrevocable. All eligible employees are immediately 100% vested in all contributions to this plan. Employees may elect the timing and form of distribution of the accrued benefits provided that the accrued benefit is greater than $10,000. For accrued benefits of less than $10,000, the distribution will be paid in a lump sum. Distributions will be paid no sooner than six months after termination of employment for our Named Executive Officers, pursuant to the IRC.
Pension PlansPENSION PLANS
The Standex Retirement Plan, atax-qualified defined benefit pension plan, and the Standex Supplemental Retirement Plan, anon-qualified defined benefit pension plan for highly compensated employees, are the Company’s two pension plans. Both plans were frozen as to future benefit accruals and new participants on December 31, 2007. All of our Named Executive Officers became employed with the Company after this date or were ineligible to participate and are not accruing benefits under either of these plans.
Perquisites and Other Benefits
PERQUISITESAND OTHER BENEFITS
Employment AgreementsEMPLOYMENT AGREEMENTS
We have entered into employment agreements with each of the Named Executive Officers. Even though each Named Executive Officer has an employment agreement which sets out an initial term that automatically renews, the executives serve at the will of the Board because the agreements may be terminated for any reason with 30 days’ notice.notice, except for Mr. Maschera, whose particular situation is described below. All of the provisions within the employment agreements were crafted to consider the needs of the Company and the executive’s specific circumstances. The Compensation Committee believes that the employment agreements are an important tool to attract and retain highly qualified executives in a competitive marketplace, while also protecting the Company in the event of an executive’s termination.
In addition to severance provisions, our employment agreements also contain restrictive covenants including anon-compete provision, which precludes an executive from engaging, in any active capacity, in any business other than Standex while they are employed with the Company. This term is vital to ensure that an executive’s attention and focus during their employment is solely on the Company’s business. Thenon-compete also precludes the executives from engaging in a business that is competitive with the Company. Thenon-compete clause also contains anon-poaching provision, which restricts a departing executive’s ability to hire then-current employees of the Company. These terms are beneficial to the Company because they safeguard against executives, who know the most about the Company, its businesses, its employees and its markets, using their knowledge to adversely impact the Company after their employment ends.
Mr. Maschera has an employment agreement with the Company that incorporates the above aspects. However, Mr. Maschera is an Italian citizen and the employment relationship between Mr. Maschera and the Company is governed by the Contratto Collettivo Nazionale di Lavoro dei Dirigenti Industria (the “Italian NCBA”) and Italian law. Notice periods, severance in lieu of notice, restrictions on termination, and various termination/severance scenarios are prescribed by the Italian NCBA and Italian law. These are described in detail under “Potential Payments upon Termination or Change in Control” starting on Perquisitespage 58.
PERQUISITES
We provide a limited number of perquisites to certain Named Executive Officers, including the CEO. The Compensation Committee designed these perquisites to be competitive and assist in attracting and retaining highly qualified executives. Furthermore, these perquisites also assist the Named Executive Officers in performing their responsibilities. For FY 2019,2022, we provided the following perquisites to thecertain Named Executive Officers: car allowances, reimbursement of automobile operating expenses (such as gas costs, auto insurance, maintenance and repairs), Mr. Dunbar and Mr. DunbarMaschera received reimbursement for tax return preparation and counseling.counseling services, and Mr. Maschera also received a travel expense allowance, as per the Italian NCBA. We do not provide gross ups for any attributed income relating to these perquisites.
Change in ControlCHANGEIN CONTROL
Our employment agreements rather than a companywide plan, contain provisions governing what happens when there is a change in control. The benefits provided to the Named Executive Officers under these provisions, if payable, are in lieu of any other severance benefits.benefits, except for Mr. Maschera, who remains entitled to certain other severance benefits under the Italian NCBA and Italian law. The Compensation Committee believes that these benefits are important to encourage the executives involved in any negotiation or completion of a change in control transaction to act in the best interest of shareholders, without regard for personal interest.
The severance benefits also promote the financial protection and security of an executive’s long-term incentive compensation arrangements in the event of the loss of their positions following a transaction that involves a change in the ownership or control of the Company. None of the severance benefits are triggered if the executive retains their position or a substantially similar position following a change in control. With equity compensation, if the executive is granted an award that substantially mirrors their then-current award, there is no acceleration of that current equity award. This “double trigger” only provides for a payment of benefits if (i) there is a change in control and (ii) the executive is involuntarily terminated or resigns for a specified “good reason.” The Compensation Committee believes that this is appropriate because if an executive retains their position following a change in control, the impact on the executive is not significant enough to warrant the provision of benefits.
The severance benefits include a lump sum payment equal to a multiple of the executive’s annual base salary and annual incentive bonus, accelerated vesting of all outstanding equity awards under the LTIPOIP and RSUs under the MSPP and a continuation of life insurance and medical plan benefits for a specified period of time. The Compensation Committee believes that these terms and amounts are customary and reasonable. The Compensation Committee, in consultation with its compensation consultant, periodically reviews these terms to evaluate both their effectiveness and competitiveness.
More detailed information concerning the trigger events and the severance benefits of each Named Executive Officer is discussed below under “Potential Payments upon Termination or Change in Control” starting on page 53.58.
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Other Compensation Information
CEO Pay RatioOTHER COMPENSATION INFORMATION
CEO PAY RATIO DISCLOSURE
As required by the SEC rules, we are providing the following information to show the ratio between the annual total compensation of our CEO in FY 2022 and the annual total compensation of the median employee of the Company.
As of June 30, 2022, Standex has approximately 4,4873,800 employees in 7161 locations across 2223 countries. With our global footprint, a majority (approximately 57%)Approximately 68% of our employee population is located outside of the United States. In line with the customary nature of manufacturing organizations, a large segmentStates and approximately 64% of our employeesglobal workforce is operations-based and paid on an hourly basis (approximately 66%). In order to attract and retain employees globally, we pay what we believe to be market competitive ratesbasis. These demographics are not substantially different than those used in each market where we operate. Ourour last CEO pay ratio below is a reasonable estimate that has been calculated in a manner consistent with Item 402(u) of RegulationS-K using the data and assumptions summarized below.
The CEO Pay Ratio was calculated by first identifying the median employee using our global employee population as of June 30, 2019, which included all global full-time, part-time and temporary employees, including newly hired employees, that were employed on that date. In determiningdisclosure, so our median employee wefor FY 2022 is the same employee used base annual salary duringin FY 2021, an hourly employee in our Electronics division, located in the period from July 1, 2018 through June 30, 2019. All international employees’ base annual salaries were converted to USD from local currencies using exchange rates for the month ending June 30, 2019. Once theUnited States.
For FY 2022, our median employee was identified, we calculated the employee’s total compensation was $26,590, calculated in accordance with Item 402(c)(2)(x) of Reg.S-K. The Our CEO’s annual total compensation for our median employeeFY 2022, as reported and our CEO anddetailed in the Summary Compensation Table was $5,135,735. Based on this information, the ratio of these two annual total compensations was estimated to be 193 to 1.
SAY-ON-PAY
Stockholders are afforded the twoopportunity to cast an advisory vote on an annual basis with respect to the total compensation of our Named Executive Officers. At the 2021 annual meeting, 96.6% of the votes cast on the advisory proposal were voted in its favor. After reviewing the results, the Compensation Committee decided to continue to apply the same general philosophy, compensation objectives and governing principles that it used in FY 2021.
CLAWBACK PROVISION
In the event that the Company’s financial results for any reporting period require restatement so that the period’s financial performance measures are not met, and the restatement is as follows:necessary due to the executives’ misconduct, the OIP gives our Board the discretion and authority to “claw-back” or cancel unpaid annual and long-term incentive awards and to recover excess annual and long-term incentive awards that have been paid to any executive officer.
POLICY CONCERNING TRANSACTIONS INVOLVING COMPANY SECURITIES (ANTI-HEDGING POLICY & ANTI-PLEDGING POLICY)
The Company’s anti-hedging and anti-pledging policy prohibits all Named Executive Officers from engaging in certain transactions involving the Company’s securities. Specifically, they are prohibited from engaging in transactions that are intended to offset, in whole or in part, potential loss in value of Company securities. These transactions include, but are not limited to, hedging transactions, buying or selling put or call options, and short sales. In addition, the policy prohibits pledging Company securities. No Named Executive Officer has entered into any such prohibited transaction.
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2022 PROXY STATEMENT | ||||||
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Stock Ownership Guidelines
STOCK OWNERSHIP GUIDELINES
The Compensation Committee believes that Company executives, including the Named Executive Officers, should have at least a minimum level of Company stock ownership to align their interests with those of Company shareholders. The Compensation Committee has adopted stock ownership guidelines through a competitive analysis prepared by management and reviewed by the compensation consultant. These guidelines require the CEO to maintain stock ownership valued at 5five times his or her base salary and require all other executives to maintain stock ownership valued at 2two times their base salary. Additionally, the guidelines require allnon-executive Vice Presidents, Group Presidents and Division Presidents to maintain stock ownership valued at 1one times their base salary. Until an executive has attained the applicablerequisite stock ownership level, the executive is expected to retain at least 50% of the shares they are awarded, net of amounts required to pay taxes. To determine if the guideline amount is met, shares are valued at the average stock price during the 4th4th quarter of the prior fiscal year. Shares that are either owned outright or are unvested RSAs or RSUs are considered owned for the purpose of the guidelines. Neither PSUs awarded under the OIP nor RSUs granted pursuant to a deferral under the MSPP are not considered in the determinationcalculation of stock ownership level.ownership.
The required amount under the guidelines is recalculated annually or whenever an executive receives an increase in pay. The Compensation Committee monitors compliance with these stock ownership guidelines on an ongoing basis. The following table shows the stock ownership requirements for each Named Executive Officer, except Mr. McGovern, who is no longer employed with the Company, as of their most recent Form 4 filing.Officer.
Name | Stock Ownership Guideline Amount (% of Annual Base Salary) | Required Ownership on June 30, 2019 (#) (1) | Actual Stock Ownership (#) | Stock Ownership Guideline Amount (% of Annual Base Salary) | Required Ownership on June 30, 2022 (#) 1 | Actual Stock Ownership as of June 30, 2022 (#) | ||||||||
David Dunbar | 500% | 58,547 | 72,849 |
| 500% |
| 46,401 | 95,933 | ||||||
Thomas D. DeByle | 200% | 11,999 | 69,229 | |||||||||||
Ademir Sarcevic |
| 200% |
| 9,676 | 14,048 | |||||||||
Alan J. Glass | 200% | 9,908 | 7,044 |
| 200% |
| 8,088 | 15,076 | ||||||
Paul C. Burns | 200% | 9,908 | 13,256 |
| 200% |
| 8,088 | 14,139 | ||||||
Annemarie Bell(3) | 200% | 6,070 | 631 | |||||||||||
Flavio Maschera 2 |
| 200% |
| 7,612 | 10,281 |
Based on the average price of the Company’s common stock between April 1, |
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Say-on-PayBASISFOR DETERMINING EXECUTIVE COMPENSATION
Stockholders are affordedThe Compensation Committee uses a multi-faceted approach to designing the opportunity to cast an advisory vote on an annual basis with respect toexecutive compensation program. The approach includes the total compensation of our Named Executive Officers. At the 2018 annual meeting, 97.9%use of the votes cast on the advisory proposal were voted in its favor. After reviewing the results,independent compensation consultant to advise the Compensation Committee decidedon the selection of an appropriate peer group, analysis of the peer group’s practices and compensation levels and recommendations for the Compensation Committee to consider. Compensation levels for specific executives are based on various factors, including the executive’s experience, individual accomplishments and the breadth of the executive’s organizational responsibilities. The Compensation Committee discusses the program with the CEO and the Chief Human Resources Officer to determine the effectiveness of the program in terms of achieving our stated objectives, including whether the current program is achieving desired motivational effects and properly incentivizing the executives.
EXECUTIVE COMPENSATION CONSULTANT
In FY 2022, the Compensation Committee retained the same independent compensation consultant, Meridian Compensation Partners, LLC (“Meridian”), which has assisted the Compensation Committee since 2015. Meridian is an internationally recognized executive compensation consulting firm. No other compensation consultant was engaged in FY 2022.
Meridian was retained to assist the Compensation Committee in the development of a compensation peer group and to advise the Compensation Committee on our existing executive compensation program. Meridian provided research, data analyses, survey information and design expertise as part of its services. Meridian also notified the Compensation Committee of regulatory developments and market trends relating to executive compensation practices. Meridian did not determine or recommend the exact amount of compensation for any Named Executive Officer. From time to time, Meridian also performs an analysis of independent director compensation.
For FY 2022, Meridian conducted a competitive assessment of our executive compensation program (including design, features and target pay opportunities) against our compensation peer group. Based on Meridian’s assessment, the Compensation Committee determined that our executive compensation program is reasonable and appropriate when compared to our peer group.
The Compensation Committee, in determining whether to continue retaining Meridian for FY 2022, assessed Meridian’s independence under the NYSE’s listing standards. Meridian provided the Compensation Committee with confirmation of its independent status under the NYSE’s standards. As such, the Compensation Committee believes that Meridian is independent and that there is no conflict of interest between Meridian and the Company, the Company executives, the Compensation Committee or its members.
PEER GROUP
The following selection criteria were used to applyestablish the same general philosophy,Company’s FY 2022 compensation objectives and governing principles that it used in FY 2018.
Clawback Provisionpeer group:
u | The company should be an industrial and technology manufacturing company; |
u | The company should have revenues between 1⁄3 and 3 times the Company’s revenue; |
u | The company should have multiple business units; and |
u | The company should serve global markets. |
InBased on this selection criteria, our FY 2022 peer group consisted of the event that the Company’s financial results for any reporting period require restatement so that the period’s financial performance measures are not met, and the restatement is necessary due to the executives’ misconduct, the LTIP and OIP give our Board the discretion and authority to “claw-back” or cancel unpaid annual and long-term incentive awards and to recover excess annual and long-term incentive awards that have been paid to any executive officer.
Policy Concerning Transactions Involving Company Securities
(Anti-Hedging Policy & Anti-Pledging Policy)following 19 companies:
The Company’s anti-hedging and anti-pledging policy prohibits all officers, directors and employees from engaging in certain transactions involving the Company’s securities. Specifically, officers, directors and employees are prohibited from engaging in transactions that are intended to offset, in whole or in part, potential loss in value of Company securities. These transactions include, but are not limited to, hedging transactions, buying or selling put or call options, and short sales. In addition, the policy prohibits pledging Company securities without first providing at least two weeks’ advance notice explaining the purpose of the pledge. No Named Executive Officer has entered into any such prohibited transaction.
Albany International Corporation | ESCO Technologies, Inc. | NN, Inc. | ||
|
| Proto Labs, Inc. | ||
Barnes Group, Inc. | Helios Technologies, Inc. | RBC Bearings, Inc. | ||
Chart Industries, Inc. | Hurco Companies, Inc. | TriMas Corporation | ||
CIRCOR International, Inc. | Kadant, Inc. | Welbilt, Inc. | ||
Enerpac Tool Group Corp. | L.B. Foster Company | |||
Enpro Industries, Inc. | Lydall, Inc. |
The Compensation Committee, with Meridian’s assistance, routinely reviews the selection criteria and the peer group companies to achieve a relative size positioning that is within a competitive range of median, that is, between the 40th and 60th percentile of the peer group companies.
FY 2022 compensation was determined based on a peer group that included Lydall, Inc. and Welbilt, Inc. They were later removed (due to actual or pending acquisition) in January 2022 for purposes of FY 2023 compensation.
2022 PROXY STATEMENT | 51 |
Risk in Compensation ProgramsRISKIN COMPENSATION PROGRAMS
The Compensation Committee regularly monitors and reviews the executive compensation program to determine the program’s effectiveness at achieving the stated objectives and principles. In August 2019,2022, the Compensation Committee conducted its annual review of the executive compensation policies and practices and assessed whether the current incentives could lead to excessive or inappropriate risk taking by the executives. Following the review, the Compensation Committee concluded that the Company’s executive compensation program elements, when considered both separately and as a whole, are not reasonably likely to have a material adverse effect on the Company. In reaching this conclusion, the Compensation Committee noted the following factors:
Compensation elements are |
Incentive award metrics contain both short and long-term |
Short-term and long-term performance metrics |
Annual incentive awards are |
Long-term incentives are completely |
Long-term performance metrics are based on corporate |
Incentives have performance |
Compensation is |
Compensation can be |
Executives have ownership |
COMPENSATION COMMITTEE INTERLOCKSAND INSIDER PARTICIPATIONIN COMPENSATION DECISIONS
During FY 2022, the members of the Compensation Committee were Charles H. Cannon, Jr., Thomas E. Chorman, Jeffrey S. Edwards and Michael A. Hickey.
None of these directors have ever been an employee or officer of the Company. None of our executive officers serve as a member of the board of directors or on the compensation committee of any other entity that has had any executive officer serving as a member of our Board or Compensation Committee.
REPORTOFTHE COMPENSATION COMMITTEE
The Compensation Committee has reviewed and discussed this Compensation Discussion and Analysis with management. Based on that review and discussion, the Compensation Committee has recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.
Jeffrey S. Edwards, Chair | Charles H. Cannon, Jr. | Thomas E. Chorman | Michael A. Hickey |
|
The following table sets forth compensation information for fiscal years 2017, 20182020, 2021 and 20192022 for our Named Executive Officers – the individuals who served during FY 20192022 as CEO and CFO and three other highly compensated executive officers of the Company, plus Mr. McGovern, who, but for the cessation of his employment in October 2018, would have been a highly compensated executive officer of the Company.
Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock ($) (1) | Non-Equity Incentive Plan Compensation ($) (2) | Change in ($) (3) | All Other ($) (4) | Total ($) | ||||||||||||||||||||
David Dunbar President and CEO | 2019 | 821,246 | - | 2,042,329 | 240,177 | (2,274 | ) (5) | 144,820 | 3,246,298 | |||||||||||||||||||
2018 | 797,327 | - | 2,120,875 | 357,814 | 40,012 | 112,340 | 3,428,368 | |||||||||||||||||||||
2017 | 774,098 | - | 2,113,055 | 155,957 | 54,708 | 112,655 | 3,210,473 | |||||||||||||||||||||
Thomas D. DeByle Vice President, CFO and Treasurer | 2019 | 420,786 | - | 838,916 | 82,040 | 11,514 | (6) | 68,456 | 1,421,712 | |||||||||||||||||||
2018 | 408,530 | - | 790,571 | 120,505 | 33,668 | 58,870 | 1,412,144 | |||||||||||||||||||||
2017 | 395,703 | - | 786,492 | 51,940 | 52,212 | 60,788 | 1,347,135 | |||||||||||||||||||||
Alan J. Glass Vice President, CLO and Secretary | 2019 | 347,443 | - | 426,772 | 53,226 | 231 | 14,787 | 842,460 | ||||||||||||||||||||
2018 | 337,297 | - | 451,045 | 77,383 | - | 22,303 | 888,028 | |||||||||||||||||||||
2017 | 328,656 | - | 446,900 | 32,988 | 19 | 18,610 | 827,173 | |||||||||||||||||||||
Paul C. Burns VP of Strategy & Business Development | 2019 | 342,068 | - | 609,530 | 165,088 | 527 | 22,337 | 1,139,550 | ||||||||||||||||||||
2018 | 315,953 | - | 487,082 | 134,577 | 177 | 16,723 | 954,512 | |||||||||||||||||||||
2017 | 306,750 | - | 249,108 | 54,384 | 301 | 18,213 | 628,756 | |||||||||||||||||||||
Annemarie Bell (7) Vice President, Human Resources | 2019 | 207,240 | - | 21,443 | 29,646 | - | 7,474 | 265,803 | ||||||||||||||||||||
2018 | - | - | - | - | - | - | - | |||||||||||||||||||||
2017 | - | - | - | - | - | - | - | |||||||||||||||||||||
Ross McGovern Former Vice President, CHRO | 2019 | 296,934 | - | 209,378 | - | (1,033 | ) | 6,259 | 511,538 | |||||||||||||||||||
2018 | 283,800 | - | 246,547 | 90,267 | 6,101 | 15,939 | 642,654 | |||||||||||||||||||||
2017 | 258,000 | - | 195,876 | 31,680 | 82 | 11,727 | 497,365 |
Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) 1 | Non-Equity Incentive Plan Compensation ($) 2 | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) 3 | All Other Compensation ($) 4 | Total ($) | ||||||||||||||||||||||||
David Dunbar President and CEO
| 2022 | 869,130 | - | 3,435,322 | 675,770 | - | 155,513 | 5,135,735 | ||||||||||||||||||||||||
2021 | 864,870 | - | 3,681,435 | 772,961 | 355,262 | 110,204 | 5,784,732 | |||||||||||||||||||||||||
2020 | 845,884 | - | 2,631,221 | 335,510 | 86,932 | 105,138 | 4,004,684 | |||||||||||||||||||||||||
Ademir Sarcevic Vice President, CFO and Treasurer
| 2022 | 449,798 | - | 679,507 | 447,954 | - | 29,098 | 1,606,357 | ||||||||||||||||||||||||
2021 | 433,675 | - | 894,037 | 396,649 | 949 | 26,638 | 1,751,948 | |||||||||||||||||||||||||
2020 | 336,521 | 200,000 5 | 1,218,302 | 149,400 | - | 93,896 | 1,998,119 | |||||||||||||||||||||||||
Alan J. Glass Vice President, CLO and Secretary
| 2022 | 375,984 | - | 607,643 | 148,003 | - | 51,037 | 1,182,666 | ||||||||||||||||||||||||
2021 | 365,907 | - | 675,728 | 171,298 | 7,470 | 33,680 | 1,254,084 | |||||||||||||||||||||||||
2020 | 357,875 | - | 471,528 | 74,353 | 539 | 19,422 | 923,717 | |||||||||||||||||||||||||
Paul C. Burns VP of Strategy and Business Development
| 2022 | 375,984 | - | 451,256 | 265,769 | - | 20,164 | 1,113,173 | ||||||||||||||||||||||||
2021 | 365,907 | - | 413,611 | 316,709 | - | 28,732 | 1,124,959 | |||||||||||||||||||||||||
2020 | 357,875 | - | 415,570 | 147,517 | 7,963 | 29,250 | 958,175 | |||||||||||||||||||||||||
Flavio Maschera 6 VP, Chief Innovation & Technology Officer
| 2022 | 348,312 | - | 432,713 | 123,056 | - | 14,753 | 918,834 | ||||||||||||||||||||||||
2021 | - | - | - | - | - | - | - | |||||||||||||||||||||||||
2020 | - | - | - | - | - | - | - |
This column includes the grant date fair value (calculated in accordance with FASB ASC 718) of the long-term incentive awards under the Company’s long-term incentive program (RSAs and PSUs) and RSUs that an executive received pursuant to a deferral election under the MSPP. |
Risk-free interest rate: |
| 2.99% | ||||
Expected life of option grants: | 3 years | |||||
Expected stock value volatility: |
| 43.88% | ||||
Expected quarterly dividends: | $ |
|
|
The grant date fair value of these three separate equity awards is as follows:
Grant Date Fair Value of Annual Incentive Deferred Pursuant to MSPP ($) | Grant Date Fair Value of Restricted Stock Awards under the OIP ($) | Grant Date Fair Value of Performance Share Unit Awards under the OIP ($) | Total ($) | |||||||||||||||||||||||||||||
Grant Date Fair Value of Annual Incentive Deferred Pursuant to MSPP ($) | Grant Date Fair Value of Restricted Stock Awards under the LTIP ($) | Grant Date Fair Value of Performance Share Unit Awards under the LTIP ($) | Total ($) | |||||||||||||||||||||||||||||
David Dunbar | 346,426 | 678,361 | 1,017,542 | 2,042,329 | 1,045,300 | 956,009 | 1,434,013 | 3,435,322 | ||||||||||||||||||||||||
Thomas D. DeByle | 118,333 | 360,291 | 360,291 | 838,916 | ||||||||||||||||||||||||||||
Ademir Sarcevic | 0 | 339,754 | 339,754 | 679,507 | ||||||||||||||||||||||||||||
Alan J. Glass | 76,772 | 175,000 | 175,000 | 426,772 | 228,934 | 189,354 | 189,354 | 607,643 | ||||||||||||||||||||||||
Paul C. Burns | 59,530 | 175,000 | 175,000 | 609,530 (a) | 72,547 | 189,354 | 189,354 | 451,256 | ||||||||||||||||||||||||
Annemarie Bell | - | 21,443 | - | 21,443 | ||||||||||||||||||||||||||||
Ross McGovern | - | 104,689 | 104,689 | 209,378 | ||||||||||||||||||||||||||||
Flavio Maschera a | 190,347 | 121,183 | 121,183 | 432,713 |
Mr. |
2022 PROXY STATEMENT | 53 |
1(continued)
The value of performance-based awards is based on the probable outcome of the performance conditions as of the grant date. The payout for 20172020 grants was 52.9%133.0 % of the target levels shown.levels. The payout for 20182021 and 20192022 grants will be determined in 20202023 and 2021,2024, respectively. The probable outcome for 2017, 20182020, 2021 and 20192022 grants of performance-based awards was estimated at the target payout level, or 100%.100 %. The following table shows the grant date fair value of the performance share units granted in 20192022 at the target level included in the Summary Compensation Table above and the potential maximum grant date fair value:value. As described in the Compensation Discussion and Analysis, awards have a maximum payout level of 200 % and are further subject to the TSR modifier, which, at its maximum level, can increase the payout by a further 25 %, for a combined maximum payout level of 250 % of target.
Grant Date Fair Value of Performance Share Awards under the LTIP ($) | Potential Maximum Grant Date Fair Value ($) | Grant Date Fair Value of Performance Share Awards under the OIP ($) | Potential Maximum Grant Date Fair Value ($) | |||||||||
David Dunbar | 1,017,542 | 2,035,084 |
| 1,434,013 |
|
| 3,585,033 |
| ||||
Thomas D. DeByle | 360,291 | 720,582 | ||||||||||
Ademir Sarcevic |
| 339,754 |
|
| 849,384 |
| ||||||
Alan J. Glass | 175,000 | 350,000 |
| 189,354 |
|
| 473,386 |
| ||||
Paul C. Burns | 175,000 | 350,000 |
| 189,354 |
|
| 473,386 |
| ||||
Annemarie Bell | - | - | ||||||||||
Ross McGovern | 104,689 | 209,378 | ||||||||||
Flavio Maschera a |
| 121,183 |
|
| 302,957 |
|
Mr. Maschera’s PSU grant is based on his FY 2022 base salary as converted from Euros to USD using the June 30, 2021 exchange rate of 1.1858. |
2 | This column shows the amounts earned in cash under our annual incentive opportunity. |
This column includes the above-market earnings of the Named Executive Officer’s accumulated benefit under the Standex Deferred Compensation Plan. None of the Named Executive Officers have any accumulated benefits under thenow-frozen Standex pension plans. |
This column includes the following compensation: |
401(k) ($) | Non-qualified Deferred Compensation Contribution ($) | Life Insurance Premium ($) | Perquisites & Personal Benefits ($) (a) | Total ($) | 401(k) Contributions ($) | Non-qualified Deferred Compensation Contribution ($) | Life Insurance Premium ($) | Perquisites & Personal Benefits ($) a | Total ($) | |||||||||||||||||||||||||||||||
David Dunbar | 9,954 | 98,653 | 10,578 | 25,635 | 144,820 |
| 15,250 |
|
| 105,503 |
|
| 16,236 |
|
| 18,524 |
|
| 155,513 |
| ||||||||||||||||||||
Thomas D. DeByle | 14,433 | 31,091 | 8,548 | 14,384 | 68,456 | |||||||||||||||||||||||||||||||||||
Ademir Sarcevic |
| 8,898 |
|
| 6,490 |
|
| 1,710 |
|
| 12,000 |
|
| 29,098 |
| |||||||||||||||||||||||||
Alan J. Glass | 7,663 | 2,222 | 4,902 | - | 14,787 |
| 12,981 |
|
| 21,153 |
|
| 4,902 |
|
| 12,000 |
|
| 51,037 |
| ||||||||||||||||||||
Paul C. Burns | 9,145 | 10,974 | 2,218 | - | 22,337 |
| 12,981 |
|
| 3,972 |
|
| 3,211 |
|
| - |
|
| 20,164 |
| ||||||||||||||||||||
Annemarie Bell | 4,409 | - | 3,065 | - | 7,474 | |||||||||||||||||||||||||||||||||||
Ross McGovern | 2,159 | 3,783 | 317 | - | 6,259 | |||||||||||||||||||||||||||||||||||
Flavio Maschera |
| - |
|
| - |
|
| 2,605 |
|
| 12,148 |
|
| 14,753 |
|
Mr. Dunbar has an automobile allowance of which he used |
Under his employment agreement, Mr. |
Mr. |
|
|
Grants of Plan-Based AwardsGRANTSOF PLAN-BASED AWARDS
The following table sets forth information with respect to 2019FY 2022 plan-based awards granted to our Named Executive Officers for the year ended June 30, 2019.2022.
Estimated Future Payouts Under Non-Equity Incentive Plan Awards (2) | Estimated Payouts Under Equity Incentive Plan Awards (3) | All Other Stock Awards: Number of Shares of Stock or Units (4) | Total ($) (5) | |||||||||||||||||||||||||||||||||||||
Name | Grant Date | Action Date (1) | Threshold
| Target ($)
| Maximum
| Threshold
| Target (#)
| Maximum
| ||||||||||||||||||||||||||||||||
David Dunbar | ||||||||||||||||||||||||||||||||||||||||
Annual Incentive | 434,317 | 868,634 | 1,737,267 | |||||||||||||||||||||||||||||||||||||
LTIP - PSU | 9/6/18 | 4,672 | 9,344 | 18,688 | 1,017,562 | |||||||||||||||||||||||||||||||||||
LTIP - RSA | 9/6/18 | 6,229 | 678,338 | |||||||||||||||||||||||||||||||||||||
Thomas D. DeByle | ||||||||||||||||||||||||||||||||||||||||
Annual Incentive | 148,355 | 296,710 | 593,421 | |||||||||||||||||||||||||||||||||||||
LTIP - PSU | 9/6/18 | 1,654 | 3,308 | 6,616 | 360,241 | |||||||||||||||||||||||||||||||||||
LTIP - RSA | 9/6/18 | 3,308 | 360,241 | |||||||||||||||||||||||||||||||||||||
Alan J. Glass | ||||||||||||||||||||||||||||||||||||||||
Annual Incentive | 96,250 | 192,500 | 385,000 | |||||||||||||||||||||||||||||||||||||
LTIP - PSU | 9/6/18 | 804 | 1,607 | 3,214 | 175,002 | |||||||||||||||||||||||||||||||||||
LTIP - RSA | 9/6/18 | 1,607 | 175,002 | |||||||||||||||||||||||||||||||||||||
Paul C. Burns | ||||||||||||||||||||||||||||||||||||||||
Annual Incentive | 96,250 | 192,500 | 385,000 | |||||||||||||||||||||||||||||||||||||
LTIP - PSU | 9/6/18 | 804 | 1,607 | 3,214 | 175,002 | |||||||||||||||||||||||||||||||||||
LTIP - RSA | 9/6/18 | 1,607 | 175,002 | |||||||||||||||||||||||||||||||||||||
Discretionary | 9/6/18 | 1,837 | 200,049 | |||||||||||||||||||||||||||||||||||||
Annemarie Bell | ||||||||||||||||||||||||||||||||||||||||
Annual Incentive | 26,804 | 53,609 | 107,217 | |||||||||||||||||||||||||||||||||||||
LTIP - RSA | 9/6/18 | 261 | 28,423 | |||||||||||||||||||||||||||||||||||||
Ross McGovern | ||||||||||||||||||||||||||||||||||||||||
Annual Incentive | 67,300 | 134,600 | 269,201 | |||||||||||||||||||||||||||||||||||||
LTIP - PSU | 9/6/18 | 481 | 961 | 1,922 | 104,653 | |||||||||||||||||||||||||||||||||||
LTIP - RSA | 9/6/18 | 961 | 104,653 |
Grant | Action | Estimated Future Payouts Under Non-Equity Incentive Plan Awards 2 | Estimated Payouts Under Equity Incentive Plan Awards 3 | All Other Number | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Name |
Threshold | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | |||||||||||||||||||||||||||||||||||||||||||||||||||
David Dunbar | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual Incentive |
| 456,293 |
| 912,587 |
| 1,825,173 | |||||||||||||||||||||||||||||||||||||||||||||||||||
OIP - PSU |
| 8/23/21 |
| 7,142 |
| 14,283 |
| 28,566 |
| 1,434,013 | |||||||||||||||||||||||||||||||||||||||||||||||
OIP - RSA |
| 8/23/21 |
| 9,522 |
| 956,009 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Ademir Sarcevic | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual Incentive |
| 147,257 |
| 294,513 |
| 589,026 | |||||||||||||||||||||||||||||||||||||||||||||||||||
OIP - PSU |
| 8/23/21 |
| 1,692 |
| 3,384 |
| 6,768 |
| 339,754 | |||||||||||||||||||||||||||||||||||||||||||||||
OIP - RSA |
| 8/23/21 |
| 3,384 |
| 339,754 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Alan J. Glass | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual Incentive |
| 104,154 |
| 208,308 |
| 416,615 | |||||||||||||||||||||||||||||||||||||||||||||||||||
OIP - PSU |
| 8/23/21 |
| 943 |
| 1,886 |
| 3,772 |
| 189,354 | |||||||||||||||||||||||||||||||||||||||||||||||
OIP - RSA |
| 8/23/21 |
| 1,886 |
| 189,354 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Paul C. Burns | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual Incentive |
| 104,154 |
| 208,308 |
| 416,615 | |||||||||||||||||||||||||||||||||||||||||||||||||||
OIP - PSU |
| 8/23/21 |
| 943 |
| 1,886 |
| 3,772 |
| 189,354 | |||||||||||||||||||||||||||||||||||||||||||||||
OIP - RSA |
| 8/23/21 |
| 1,886 |
| 189,354 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Flavio Maschera | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual Incentive 6 |
| 84,808 |
| 169,616 |
| 339,232 | |||||||||||||||||||||||||||||||||||||||||||||||||||
OIP - PSU 7 |
| 8/23/21 |
| 604 |
| 1,207 |
| 2,414 |
| 121,183 | |||||||||||||||||||||||||||||||||||||||||||||||
OIP - RSA 8 |
| 8/23/21 |
| 1,207 |
| 121,183 |
The date on which the Compensation Committee took action for the grant of all of the plan-based awards was 8/ |
The amounts in these columns indicate the threshold, target and maximum amounts payable under the annual incentive opportunity prior to deducting any amounts the named executive officers elected to defer under the MSPP. Most of our Named Executive Officers elected to defer a portion of their annual incentive opportunity under the MSPP. The annual incentive opportunity amounts are based on the achievement of specific financial performance metrics and individual strategic goals. The annual incentive opportunity metrics are discussed under “Annual Incentive Opportunity” on page |
The amounts in these columns indicate the threshold, target and maximum amounts payable under the |
The amounts shown in this column reflect the number of RSAs granted to each Named Executive Officer pursuant to the |
These amounts represent the grant date fair value, as determined under FASB ASC Topic 718. For the PSU awards under the |
6 | Mr. Maschera’s annual incentive opportunity values are based on his FY 2022 base salary of €340,218 as converted from Euros to USD using the August 23, 2022 exchange rate of 0.9971. |
7 | Mr. Maschera’s PSU grant is based on his FY 2022 base salary of €340,218 as converted from Euros to USD using the June 30, 2021 exchange rate of 1.1858. |
8 | Mr. Maschera’s RSA grant is based on his FY 2022 base salary of €340,218 as converted from Euros to USD using the June 30, 2021 exchange rate of 1.1858. |
| ||||||
55 |
Outstanding Equity Awards at FiscalYear-EndOUTSTANDING EQUITY AWARDSAT FISCAL YEAR END
The following table sets forth information with respect to equity awards that were outstanding as of June 30, 2019.2022. The Company has not awarded stock options since 2003 and there are no outstanding option awards.
Stock Awards | ||||||||||||||||||||||||||||||||
Name | Stock Awards | Number of Shares or Units of Stock That Have Not Vested (#) 1 | Market Value of Shares or Units of Stock That Have Not Vested ($) 2 | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) 3 | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) 4 | |||||||||||||||||||||||||||
Number of Shares or Units of Stock That Have Not Vested (#) (1) | Market Value of Shares or That Have Not Vested ($) (2) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) (3) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (4) | |||||||||||||||||||||||||||||
David Dunbar | 27,275 | 1,293,157 | 21,655 | 1,583,847 |
| 78,928 |
|
| 5,343,028 |
|
| 83,984 |
|
| 7,120,164 |
| ||||||||||||||||
Thomas D. DeByle | 12,015 | 626,575 | 6,969 | 509,713 | ||||||||||||||||||||||||||||
Ademir Sarcevic |
| 19,688 |
|
| 1,532,627 |
|
| 20,792 |
|
| 1,762,746 |
| ||||||||||||||||||||
Alan J. Glass | 5,934 | 324,623 | 3,817 | 279,175 |
| 15,097 |
|
| 981,144 |
|
| 11,586 |
|
| 982,261 |
| ||||||||||||||||
Paul C. Burns | 4,516 | 257,026 | 2,498 | 182,704 |
| 11,163 |
|
| 840,970 |
|
| 11,586 |
|
| 982,261 |
| ||||||||||||||||
Annemarie Bell | 476 | 34,815 | - | - | ||||||||||||||||||||||||||||
Ross McGovern (5) | - | - | - | - | ||||||||||||||||||||||||||||
Flavio Maschera |
| 8,012 |
|
| 472,278 |
|
| 6,300 |
|
| 534,114 |
|
The outstanding stock awards presented in this column include: RSAs awarded under the |
Vest Date | David Dunbar | Thomas D. DeByle | Alan J. Glass | Paul C. Burns | Annemarie Bell | Ross McGovern | ||||||||||||||||
8/30/2019 | 2,478 | 1,190 | 655 | 399 | - | - | ||||||||||||||||
9/6/2019 | 4,604 | 1,818 | 327 | 571 | - | - | ||||||||||||||||
9/15/2019 | - | - | - | - | 110 | - | ||||||||||||||||
9/6/2020 | 9,295 | 4,127 | 2,336 | 1,500 | 105 | - | ||||||||||||||||
9/6/2021 | 10,898 | 4,880 | 2,616 | 2,046 | 261 | �� | - | |||||||||||||||
Total | 27,275 | 12,015 | 5,934 | 4,516 | 476 | - |
Vest Date | David Dunbar | Ademir Sarcevic | Alan J. Glass | Paul C. Burns | Flavio Maschera | |||||||||||||||
8/23/2022 | 3,174 | 1,128 | 628 | 628 | 402 | |||||||||||||||
9/6/2022 | 45,849 | 12,176 | 8,041 | 7,808 | 4,330 | |||||||||||||||
8/23/2023 | 3,174 | 1,128 | 629 | 629 | 402 | |||||||||||||||
9/6/2023 | 12,699 | 2,735 | 2,764 | 1,469 | 1,499 | |||||||||||||||
8/23/2024 | 14,032 | 2,521 | 3,035 | 629 | 1,379 | |||||||||||||||
Total | 78,928 | 19,688 | 15,097 | 11,163 | 8,012 |
The market values in this column are calculated using a price of |
The shares presented in this column are performance share units granted in fiscal years |
The values shown in this column are calculated using a price of |
|
56 | 2022 PROXY STATEMENT |
Options Exercised and Stock VestedOPTIONS EXERCISEDAND STOCK VESTED
The following table sets forth information about option exercises and the vesting of stock during the fiscal year. The Company has not awarded stock options since 2003, so no options are reported. The stock vested during the fiscal year represents PSUs and RSAs granted under the LTIPOIP and RSUs granted from an MSPP deferral.
Stock Awards | ||||||||||||||
Name | Stock Awards | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) 1 | |||||||||||
Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) (1) | |||||||||||||
David Dunbar | 15,879 | 1,531,101 | 20,565 |
| 1,684,843 |
| ||||||||
Thomas D. DeByle | 6,045 | 577,378 | ||||||||||||
Ademir Sarcevic | 4,630 |
| 459,898 |
| ||||||||||
Alan J. Glass | 2,881 | 244,414 | 4,473 |
| 366,963 |
| ||||||||
Paul C. Burns | 2,940 | 312,005 | 5,740 |
| 536,505 |
| ||||||||
Annemarie Bell | 312 | 29,768 | ||||||||||||
Ross McGovern | 2,319 | 231,418 | ||||||||||||
Flavio Maschera | 2,664 |
| 191,491 |
|
The value realized on vesting for the three stock categories was calculated as follows. For PSUs and RSAs granted under the |
The Company’s two pensions plans, the Standex Retirement Plan and the Standex Supplemental Retirement Plan, were frozen as to future benefit accruals and new participants on December 31, 2007. All of our Named Executive Officers became employed with the Company after this date or were ineligible to participate and are not accruing benefits under either of these plans.
Nonqualified Deferred CompensationNONQUALIFIED DEFERRED COMPENSATION
The following table contains compensation information relating to the Company’s nonqualified deferred compensation plan. For a description of the Standex Deferred Compensation Plan, including material factors, see “Standex Deferred Compensation Plan” on page 43.47.
Name | Executive Contributions in Last FY ($) (1) | Registrant Contributions in Last FY ($) (2) | Aggregate Earnings in Last FY ($) (3) | Aggregate Withdrawals/ Distributions | Aggregate Balance at Last FYE ($) (4) | 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 | ||||||||||||||||||||||||||||||
David Dunbar | 62,858 | 98,653 | (2,274 | ) | - | 643,969 |
| 105,503 |
|
| 105,503 |
|
| (325,091 | ) |
| - |
|
| 1,283,088 |
| |||||||||||||||||||
Thomas D. DeByle | 19,036 | 31,091 | 26,238 | - | 443,500 | |||||||||||||||||||||||||||||||||||
Ademir Sarcevic |
| - |
|
| 6,490 |
|
| (2,081) |
|
| - |
|
| 9,180 |
| |||||||||||||||||||||||||
Alan J. Glass | - | 2,222 | 781 | - | 16,543 |
| 21,153 |
|
| 21,153 |
|
| (14,045 | ) |
| - |
|
| 73,193 |
| ||||||||||||||||||||
Paul C. Burns | 10,974 | 10,974 | 1,432 | - | 27,237 |
| - |
|
| 3,972 |
|
| (8,475 | ) |
| 50,205 |
|
| 34,856 |
| ||||||||||||||||||||
Annemarie Bell | - | - | - | - | - | |||||||||||||||||||||||||||||||||||
Ross McGovern | 3,783 | 3,783 | (1,033 | ) | 12,652 | - | ||||||||||||||||||||||||||||||||||
Flavio Maschera |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
All amounts in this column are included in the salary andnon-equity incentive plan compensation columns of the |
All amounts in this column are included in the other compensation column and detailed in footnote (4) of the |
The |
| ||||
| ||||
| ||||
| ||||
| ||||
|
Additionally, for Mr. Dunbar and Mr. DeByle, the reported amounts do not include the benefit both would have earned on their contributions made in September 2018 that was, due to an administrative error, not properly placed into their respective accounts. The accounts are scheduled to be credited with their contributions during September 2019, at which time the earnings or losses will be determined, and their accounts further credited as if the accounts were correctly credited in September 2018. These amounts will be fully reflected in Standex’s 2020 Proxy Statement.
The aggregate balance includes amounts that were reported in previous Summary Compensation Tables as follows: |
Amounts Previously Reported ($) | ||||
David Dunbar | 1,257,188 | |||
| 4,669 | |||
Alan J. Glass | 42,532 | |||
Paul C. Burns | 88,203 | |||
| - | |||
|
| ||||||
57 |
Potential Payments upon Termination or Change in Control
Employment AgreementsPOTENTIAL PAYMENTSUPON TERMINATIONOR CHANGEIN CONTROL
EMPLOYMENT AGREEMENTS
The following table lists the compensation and benefits that an executive would generally be provided in various scenarios involving a termination of employment. The amounts denoted in the table are for the CEO, Mr. Dunbar. Where the amounts or time periods differ between Mr. Dunbar and the other executives, the differences are explained in a footnote.
| Termination | |||||||||||
Compensation Element | Death | Disability | Retirement | Termination with Cause | Termination
Cause | Termination due to Control | ||||||
|
|
|
|
|
|
| ||||||
Base Salary | Ceases immediately | Continuation for 2 years 6 | Ceases immediately | Ceases immediately | Continuation for 2 years 7 | Ceases immediately | ||||||
Severance Pay8 | None | None | None | None | None | Lump sum equal to 3 times base salary | ||||||
Annual Incentive | Prorated for the year | Prorated for the year | Prorated for the year | None | None | Lump sum equal to 3 times the higher of (i) the most recent annual incentive award or (ii) the current FY’s target incentive award | ||||||
Restricted Stock | Awards vest immediately | Awards vest immediately | Awards vest immediately | Forfeited | Forfeited | Awards vest immediately | ||||||
PSUs | Awards are prorated and vest in normal course | Awards are prorated and vest in normal course | Awards are prorated and vest in normal course | Forfeited | Forfeited | Awards vest immediately | ||||||
Deferred Compensation | Payable immediately | �� | Distributions commence after 6 months per election | Distributions commence after 6 months per participants election | Distributions commence after 6 months per participants election | Distributions commence after 6 months per participants election | Payable immediately | |||||
Health, Welfare and Other Benefits | None | Medical and | None | None | Medical and | Life insurance and |
Disability is defined as a condition where the executive is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months. Disability for Mr. Maschera is defined by the Italian NCBA and covers both temporary and permanent disabilities and illnesses. |
Retirement is defined as a voluntary termination of employment when either (i) the executive has reached age 55 and has at least 10 years of service with Standex, or (ii) the executive has reached age 65. |
Termination with cause, under the terms of the executives’ employment agreements, is defined as a termination by Standex for the executive’s material breach of the employment agreement. A material breach is (i) an act of dishonesty which is intended to enrich the executive at the Company’s expense, or (ii) the willful, deliberate and continuous failure to perform the executive’s duties after being properly demanded to do so. For Mr. Maschera, “termination with cause” is the equivalent to “termination with just cause” as defined under Italian law. |
Termination without cause is a termination by Standex where the executive has not committed a material breach of the employment |
A change in control is defined as an event where (i) any person or group (as used in sections 13(d) and 14(d) of the Exchange Act) becomes the beneficial owner (as defined in Rules13d-3 and13d-5 of the Exchange Act), directly or indirectly, of at least a majority of the equity securities of Standex entitled to vote for members of the Board of Directors; (ii) Standex is a party to a merger or consolidation, which results in Standex voting securities representing less than a majority of the resulting voting securities (less than 80% for Mr. Maschera); (iii) the sale or disposition of all or substantially all of Standex’s assets; (iv) a greater than 75% change (greater than 50% change for Mr. Maschera) in the composition of the Board of Directors during a consecutive 12-month period; or (v) for Mr. Maschera, the approval of a plan of complete liquidation. |
|
party to a merger or consolidation, which results in Standex voting securities representing less than a majority of the resulting voting securities; (iii) the sale or disposition of all or substantially all of Standex’s assets; or (iv) a greater than 75% change in the composition of the Board of Directors during a consecutive12-month period.5 (continued)
An executive would be entitled to the payments described in this column after such a change in control only if, within 2 years of the change in control, either (i) the executive is terminated without cause,(a) or (ii) the executive voluntarily terminates their employment for “good cause.”(b)
(a) | Termination without cause is any termination by Standex other than a termination where there is conclusive evidence of substantial and indisputable intentional personal malfeasance in office, such as a conviction for embezzlement of Standex funds. |
(b) | Good cause for Mr. Dunbar is defined as any of the following: (i) the assignment to any position other than President & CEO; (ii) any change in the reporting relationship such that he is no longer reporting solely to the Board of Directors; (iii) any reduction in the budget which results in him no longer having 100% control over the budget; (iv) any material diminution of base salary or incentive compensation; (v) any change in the location of employment to a location greater than 10 miles from the present location; and (vi) any other action or inaction of Standex that constitutes a material breach of the employment agreement. |
Good cause for Mr. DeByle is defined as any of the following, if it goes unremedied for more than 30 days after Mr. DeByle has provided notice of the event: (i) a significant decrease in his substantive or managerial responsibilities; (ii) a change in the reporting relationship such that he is no longer reporting to the CEO (or someone with such high level of responsibility); (iii) a change in the location of employment to a location greater than 50 miles from the present location; and (iv) a reduction in base salary or incentive compensation.
Good cause for the other executives is defined as any of the following: (i) a change in their general area of responsibility; (ii) a change in their title; (iii) a change in the place of employment; and (iv) a decrease in base salary or diminished benefits.
Mr. Dunbar’s employment agreement provides for a continuation of base salary for a period of 2 years up to the IRS compensation limit specified in IRC Section 401(a)(17), with the excess payable immediately upon termination. Mr. Glass and Mr. Burns’ employment agreements provide for a continuation of base salary for a period of 1 year. Mr. Sarcevic does not receive a continuation of base salary upon termination due to a disability. Under the Italian NCBA and Italian law, Mr. Maschera is entitled to a minimum of 12 months and up to 30 months, depending on the illness or injury, in full salary continuation. If, at the end of such period, Mr. Maschera has not recovered from the illness or injury and can no longer work, the severance payments detailed under footnote (8) are triggered. |
7 | Mr. Dunbar’s employment agreement provides for a continuation of base salary for a period of 2 years up to the IRS compensation limit specified in IRC Section 401(a)(17), with the excess payable immediately upon termination. The other executives’ employment agreements provide for a continuation of base salary for a period of 1 year. Mr. Maschera does not receive a continuation of base salary. Instead, he receives severance pay under the Italian NCBA as detailed below. |
Under the Italian NCBA, Mr. Maschera is entitled to severance pay (“trattamento di fine rapporto”), which is a deferred salary payment calculated as a percentage of his annual salary, in the event of a termination of his employment due to death, disability, termination with or without cause, or termination due to a change in control. Mr. Maschera is also entitled to indemnity in lieu of notice in the amount of 12 months pay in the event of termination of his employment due to death, disability, termination without cause or termination due to a change in control (see footnote (9) for further information about the indemnity in lieu of notice Mr. Maschera is entitled to under a termination due to a change in control). In the event Mr. Maschera is terminated without cause, Mr. Maschera is entitled to an additional 18 to 24 months pay. Further, in the event of a change in control and Mr. Maschera voluntarily terminates his employment within 180 days of the change in control for a reason other than good cause, Mr. Maschera would be entitled to indemnity in lieu of notice in the amount of 4 months pay. |
9 | Mr. Dunbar’s employment agreement provides |
|
|
Included in the |
For PSUs, except in the case of a termination for cause, without cause or due to a change in control, the PSUs are converted to shares of unrestricted stock once the performance period has ended and the Compensation Committee has determined the requisite payout in accordance with the performance levels. The number of PSUs that is converted is prorated to the date of the executive’s termination. |
See the “Standex Deferred Compensation Plan” section on page |
Mr. Dunbar’s employment agreement provides for a continuation of medical and dental benefits for a period of 1 year. The other executives’ employment agreements do not provide for any health or welfare benefit continuation. |
Mr. Dunbar’s employment agreement provides for a continuation of medical and dental benefits for a period of 1 year. The other executives’ employment agreements do not provide for any health or welfare benefit continuation. |
Mr. Dunbar’s employment agreement provides for a continuation of medical and life insurance benefits for a period of 3 years. The other executives’ employment agreements provide for a continuation of medical and life insurance benefits for a period of |
| ||||||
59 |
Quantification of Potential Payments
QUANTIFICATIONOF POTENTIAL PAYMENTS
The following table contains compensation information relating to the potential payments that an executive would receive in the various scenarios described above if the executive hadwas terminated due to a triggering event on June 28, 2019.30, 2022. All such potential payments are largely based on the executive’s employment agreement with the Company, and in the case of Mr. Maschera, the Italian NCBA and Italian law, with the remaining payments based on award agreements under the LTIP. Mr. McGovern’s employment agreement and award agreements expired upon his departure in October 2018.OIP.
Triggering Event | Payout ($) (1) | |||||||||||||||||||||
Compensation Component | David Dunbar | Thomas D. DeByle | Alan J. Glass | Paul C. Burns | Annemarie Bell | |||||||||||||||||
Death |
Acceleration of Outstanding Equity Awards
| 1,293,157 | 626,575 | 324,623 | 257,026 | 34,815 | ||||||||||||||||
Pro-rata Performance Share Vesting
| 799,786 | 257,794 | 140,965 | 90,084 | - | |||||||||||||||||
Total
| 2,092,942 | 884,370 | 465,589 | 347,110 | 34,815 | |||||||||||||||||
Disability |
Termination Payment - Salary
| 1,654,540 | 423,872 | 350,000 | 350,000 | 214,434 | ||||||||||||||||
Acceleration of Outstanding Equity Awards
| 1,293,157 | 626,575 | 324,623 | 257,026 | 34,815 | |||||||||||||||||
Pro-rata Performance Share Vesting
| 799,786 | 257,794 | 140,965 | 90,084 | - | |||||||||||||||||
Health & Welfare Benefits
| 17,004 | - | - | - | - | |||||||||||||||||
Total
| 3,764,487 | 1,308,242 | 815,589 | 697,110 | 249,249 | |||||||||||||||||
Retirement |
Acceleration of Outstanding Equity Awards
| 1,293,157 | 626,575 | 324,623 | 257,026 | 34,815 | ||||||||||||||||
Pro-rata Performance Share Vesting
| 799,786 | 257,794 | 140,965 | 90,084 | - | |||||||||||||||||
Total
| 2,092,942 | 884,370 | 465,589 | 347,110 | 34,815 | |||||||||||||||||
Termination Without Cause by the Company |
Termination Payment - Salary
| 1,654,540 | 423,872 | 350,000 | 350,000 | 214,434 | ||||||||||||||||
Health & Welfare Benefits
| 17,004 | - | - | - | - | |||||||||||||||||
Total
| 1,671,544 | 423,872 | 350,000 | 350,000 | 214,434 | |||||||||||||||||
Termination Payment - Salary
| 2,481,810 | 1,271,616 | 350,000 | 350,000 | 214,434 | |||||||||||||||||
Termination Payment - Annual Incentive
| 2,605,901 | 890,131 | 192,500 | 192,500 | 53,609 | |||||||||||||||||
Change in Control (2) |
Acceleration of Outstanding Equity Awards
| 2,877,003 | 1,136,288 | 603,799 | 439,730 | 34,815 | ||||||||||||||||
Health & Welfare Benefits
| 62,580 | 27,370 | 25,592 | 26,481 | 18,021 | |||||||||||||||||
Total
| 8,027,294 | 3,325,405 | 1,171,891 | 1,008,711 | 320,879 |
Triggering Event | Compensation Component
| Payout ($) 1
| ||||||||||||||||||||
David Dunbar
|
Ademir Sarcevic
|
Alan J. Glass
|
Paul C. Burns
|
Flavio Maschera
| ||||||||||||||||||
Death |
Severance Pay
| - | - | - | - | 572,072 | ||||||||||||||||
Annual Incentive | 1,351,541 | 447,954 | 296,005 | 312,670 | 258,577 | |||||||||||||||||
Acceleration of Outstanding Equity Awards | 5,343,028 | 1,532,627 | 981,144 | 840,970 | 472,278 | |||||||||||||||||
Pro-rata Performance Share Vesting 2
| 5,987,513 | 1,482,626 | 837,016 | 837,016 | 430,043 | |||||||||||||||||
Total | 12,682,082 | 3,463,207 | 2,114,165 | 1,990,655 | 1,732,971 | |||||||||||||||||
Disability 3 | Termination Payment - Salary | 1,738,260 | 453,097 | 378,741 | 378,741 | 891,031 | ||||||||||||||||
Severance Pay
| - | - | - | - | 572,072 | |||||||||||||||||
Annual Incentive | 1,351,541 | 447,954 | 296,005 | 312,670 | 258,577 | |||||||||||||||||
Acceleration of Outstanding Equity Awards | 5,343,028 | 1,532,627 | 981,144 | 840,970 | 472,278 | |||||||||||||||||
Pro-rata Performance Share Vesting 2 | 5,987,513 | 1,482,626 | 837,016 | 837,016 | 430,043 | |||||||||||||||||
Health & Welfare Benefits | 14,183 | - | - | - | - | |||||||||||||||||
Total | 14,434,524 | 3,916,304 | 2,492,906 | 2,369,396 | 2,624,002 | |||||||||||||||||
Retirement | Annual Incentive | 1,351,541 | 447,954 | 296,005 | 312,670 | 258,577 | ||||||||||||||||
Acceleration of Outstanding Equity Awards | 5,343,028 | 1,532,627 | 981,144 | 840,970 | 472,278 | |||||||||||||||||
Pro-rata Performance Share Vesting 2 | 5,987,513 | 1,482,626 | 837,016 | 837,016 | 430,043 | |||||||||||||||||
Total | 12,682,082 | 3,463,207 | 2,114,165 | 1,990,655 | 1,160,899 | |||||||||||||||||
Termination With Cause by the Company |
Severance Pay | - | - | - | - | 215,660 | ||||||||||||||||
Total | - | - | - | - | 215,660 | |||||||||||||||||
Termination Without Cause by the Company |
Termination Payment - Salary | 1,738,260 | 453,097 | 378,741 | 378,741 | - | ||||||||||||||||
Severance Pay | - | - | - | - | 1,284,897 | 4 | ||||||||||||||||
Health & Welfare Benefits | 14,183 | - | - | - | - | |||||||||||||||||
Total | 1,752,443 | 453,097 | 378,741 | 378,741 | 1,284,897 | |||||||||||||||||
Change in Control 5 |
Severance Pay | 2,607,390 | 906,194 | 757,482 | 757,482 | 1,284,897 | ||||||||||||||||
Annual Incentive | 4,637,766 | 991,622 | 685,190 | 633,418 | 258,577 | |||||||||||||||||
Acceleration of Outstanding Equity Awards 6 | 8,903,110 | 2,414,000 | 1,472,275 | 1,332,100 | 739,335 | |||||||||||||||||
Health & Welfare Benefits | 54,113 | 43,953 | 41,612 | 44,946 | 42,622 | |||||||||||||||||
Total | 16,202,379 | 4,355,769 | 2,956,559 | 2,767,946 | 2,325,432 |
The payout values for equity awards are based on the closing price of the Company’s stock on June |
The pro-rata performance share vesting is based on the following: |
For FY 2020 PSU awards, the number of shares used in the calculation is based on the certified performance percentage of 133.0 %.
For FY 2021 PSU awards, the number of shares used in the calculation is based on achievement of superior performance and pro-rated at 2⁄3 since
the termination event is 2⁄3 of the way through the performance period.
For FY 2022 PSU awards, the number of shares used in the calculation is based on achievement of superior performance and pro-rated at 1⁄3 since the termination event is 1⁄3 of the way through the performance period.
60 | 2022 PROXY STATEMENT |
3 | This scenario assumes that Mr. Maschera would be terminated for disability after the maximum period of leave (30 months) as this leave is legally protected leave. During those 30 months, Mr. Maschera would continue to be employed and receive his salary. Mr. Maschera would only be entitled to the severance pay, annual incentive amount and accelerated stock vesting if he is terminated after the protected leave period ends. The values here represent the payments Mr. Maschera would receive over the course of the protected leave and at the time of his termination thereafter. Since it is impossible to know the values of Mr. Maschera’s annual incentive award and stock grants at the end of the 30 months, the values contained herein are as of June 30, 2022. |
4 | This value assumes the maximum amount of additional pay that Mr. Maschera is entitled to, which is the trattamento di fine rapporto (€205,861) plus the indemnity in lieu of notice in the amount of 12 months pay (€340,218) plus 24 months of additional pay (€680,436). |
5 | Upon a change in control, if the termination payments are triggered and exceed the amounts prescribed under IRC Section 280G such that the Company will be required to pay a tax under IRC Section 4999, the payment will be reduced to an amount such that the payment does not exceed IRC Section 280G. |
6 | Upon a change in control, outstanding RSAs under the OIP and RSUs awarded under the MSPP immediately vest at awarded amounts. For PSUs in general, outstanding awards vest at the higher of target or actual performance through the CIC event. For purposes of the calculation, FY 2020 PSU awards, the number of shares is based on the certified performance percentage of 133.0 %, while for FY 2021 and FY 2022 PSU awards, the number of shares is based on target. |
HOWCAN IVOTE
|
How can I vote & how many votes do I have?
Shareholders at the close of business on August 30, 2019 are entitled to vote. As of the record date, there were 12,439,834 shares outstanding. You may vote the shares you own directly in your name as a shareholder of record, shares you hold through Standex benefit plans and shares held for you as a beneficial owner through a broker, bank or other nominee (shares held in “street name”). Each share is entitled to one vote.
Shareholders at the close of business on August 31, 2022 are entitled to vote. As of the record date, there were 11,972,615 shares outstanding. You may vote the shares you own directly in your name as a shareholder of record, shares you hold through Standex benefit plans and shares held for you as a beneficial owner through a broker, bank or other nominee (shares held in “street name”). Each share is entitled to one vote. HOWCAN ICHANGEMYVOTE? You may change your vote by revoking your proxy at any time before it has been exercised by: uDelivering a written notification to our Corporate Secretary that you are revoking your proxy; u Delivering a revised proxy dated later than the proxy you are revoking; uVoting again by Internet or telephone until u Attending the Annual Meeting and voting in person. WHATISA QUORUM? A quorum is necessary to conduct business at the Annual Meeting. A majority of the outstanding shares of common stock entitled to vote at the Annual Meeting and represented either in person or by proxy constitutes a quorum. Your shares are counted as present if you have voted. If you abstain from voting, your shares are counted as present in determining a quorum. Broker non-votes are counted as present in determining a quorum. WHATARE BROKER NON-VOTES? A broker non-vote occurs when a bank, broker or other nominee of share held in street name is represented at the Annual Meeting either in person or by proxy, but has not received instructions from the beneficial owner on how to vote the shares and cannot or chooses not to vote the shares. We strongly encourage shareholders who own shares in street name to instruct their bank, broker or other nominee on how to vote. HOWARETHEVOTESCOUNTED? The Company has engaged D.F. King to assist in soliciting proxies to establish the necessary quorum. Tabulation for the quorum shall be handled by D.F. King, which receives $5,500 as payment for their services, in addition to additional disbursements. Official tabulation of voted proxies will be handled by Computershare, the Company’s transfer agent. How can I change my vote?●●●12:1:00 a.m. CST,ET, on October 22, 2019;25, 2022;●What is a Quorum?A quorum is necessary to conduct business at the Annual Meeting. A majority of the outstanding shares of common stock entitled to vote at the Annual Meeting and represented either in person or by proxy constitutes a quorum. Your shares are counted as present if you have voted. If you abstain from voting, your shares are counted as present in determining a quorum. Brokernon-votes are counted as present in determining a quorum.What are BrokerNon-votes?A brokernon-vote occurs when a bank, broker or other nominee of share held in street name is represented at the Annual Meeting either in person or by proxy, but has not received instructions from the beneficial owner on how to vote the shares and cannot or chooses not to vote the shares. We strongly encourage shareholders who own shares in street name to instruct their bank, broker or other nominee on how to vote.How are the votes counted?The Company has engaged EQ Proxy Services to assist in soliciting proxies to establish the necessary quorum. Tabulation for the quorum shall be handled by EQ Proxy Services, which receives $5,000 as payment for their services, in addition to additional disbursements.Official tabulation of voted proxies will be handled by Computershare, the Company’s transfer agent.
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WHATIS HOUSEHOLDING?
As permitted by the Exchange Act, and to reduce the expenses of delivering duplicate proxy materials, we deliver one Notice and, if applicable, Annual Report on Form 10-K and Proxy Statement, to multiple shareholders sharing the same mailing address unless otherwise requested. This is known as “householding.”
We will promptly send a separate Annual Report on Form 10-K and Proxy Statement to a shareholder at a shared address upon request at no cost. Shareholders with a shared address may also request that we send a single copy in the future if we are currently sending multiple copies to the same address.
Requests related to the delivery of proxy materials may be made by calling Investor Relations at (603) 893-9701 or writing to:
Standex International Corporation
23 Keewaydin Drive, Suite 300
Salem, New Hampshire 03079
Attention: Investor Relations
Shareholders who hold shares in “street name” (as described above) may contact their brokerage firm, bank or other nominee to request information about this householding procedure.
COMMUNICATIONS, SHAREHOLDER PROPOSALS & NOMINATIONSAND COMPANY DOCUMENTS |
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HOW CAN I COMMUNICATEWITHTHE COMPANY’S DIRECTORS?