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The risk oversight responsibility of the Board and its Committees is enabled by management evaluation and reporting processes that are designed to provide visibility to the Board about the identification, assessment and management of critical risks and management’s risk mitigation
strategies which includes compliance risks.strategies. Management of
day-to-day operational, financial,
and legal
risks and compliance
issuesrisks is the responsibility of operational and executive leadership of the Company.
| | |
| | Energizer Holdings, Inc. 2019 Proxy Statement 7
|
The CompanyManagement has established a comprehensive risk management process that is primarily managedfacilitated by two risk committees, the Executive Compliance and Risk Committee (the “Executive Risk Committee”) and the Compliance and Risk Subcommittee (the “Risk Subcommittee”). Each committee is sponsored by our Chief Financial Officer andco-led by our Chief Compliance Officer and our Vice President, Internal Audit.
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| |
| | Senior Management
|
Executive Risk Committee | | The Executive Risk Committee is made up of members of the executive management team and sets the tone and direction for the risk management program. The Executive Risk Committee provides oversight to the risk management process, ensures adequate focus on high priority risks, reviews Risk Subcommittee reports, and receives updates on significant compliance investigations worldwide. Annually, the Executive Risk Committee meets with the RiskSub-committee to discuss the most significant identified risks and ensure appropriate mitigation actions are being taken.
The Executive Risk Committee reports directly to the Audit Committee and advises the Audit Committee on a quarterly basis regarding the Company’s risk management structure and practices, as well as management’s programs to identify, assess, manage, and mitigate significant enterprise risks of the Company. The Audit Committee, in turn, reports to our Board. The Executive Risk Committee also presents directly to the Board with regard to these matters on an annual basis.
|
| | |
Risk
Subcommittee
| | The Risk Subcommittee is made up of a cross functional team of emerging leaders that are one to three organizational levels below our senior executives who can provide a perspective on the practical implementation of our compliance and risk management programs. The purpose of the Risk Subcommittee is to:
• establish the risk management process;
• identify and evaluate risks based on both their perceived impact on our Company and likelihood of occurrence, which include, among others, economic, industry, enterprise, operational, compliance and financial risks;
• identify and verify actions that would reasonably mitigate risks;
• verify the results of the risk analysis and mitigation efforts with the appropriate levels of management; and
• ensure regulatory and compliance issues are being addressed.
The Risk Subcommittee reports directly to and provides quarterly reports to the Executive Risk Committee.
|
Audit and our Senior Director of Global Ethics and Compliance and includes our Global Executive Team, which consists of a cross functional team of senior leaders and executives. Semi-annually, top risks are identified, assessed and key mitigation strategies developed by the risk owners. At least annually, the Board or relevant Committee reviews the top risk areas and receives reports more regularly for certain risk areas to ensure risks are being adequately managed.
At Energizer, our values areculture is the foundation for all that we do, and we work hard to be the best and play by the rules, while valuing every colleague and partner that makes up our team. Our Code of Conduct is based on one of our Company values — integrity — thatculture and serves as the foundation for our individual actions and decisions as colleagues. Our Code of Conduct is periodically reviewed and amended by the Board. We requireapplies to all colleagues, including our directors,Board and senior management, and we require our Board and all colleagues, to read andincluding our senior management, to adhere to the Code of Conduct in discharging their work-related responsibilities and annually acknowledge their review of and compliance on an annual basis.with the Code. Our Code of Conduct is periodically reviewed and amended by the Board.
Our Ethics & Compliance program underis directed by our Senior Director of Global Ethics & Compliance, who oversees the direction of our Chief Compliance Officer, administers training on and enforcesenforcement of the Code of Conduct. We provide additional live andweb-based training on specific aspects of the Code of Conduct and specific ethics and compliance risk areas. Colleagues are expected to report any conduct they believe in good faith to be a violation of the Code of Conduct. Conduct, and we do not tolerate retaliation against anyone who makes such a report. Colleagues have multiple avenues to ask questions and share concerns, including speaking with their direct supervisor, contacting Human Resources, or calling the 24/7 ethics and compliance help line staffed by an independent third party and available in 14 languages.
The Code of Conduct is posted on our website at https://investors.energizerholdings.com/corporate-governance. We will disclose on our website any future amendments of the Code of Conduct or any waivers granted to our executive officers from any provision of the Code of Conduct.
Our commitment to our
valuesculture will help us continue to lead in the markets where we work and make our brand globally known and respected.
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8 Energizer Holdings, Inc. 2019 Proxy Statement
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We also have a Supplier Code of Conduct which sets forth our Company’s basic expectations for environmental, labor, supplier working conditions and ethical practices that suppliers are expected to meet in order to do business with our Company. We hold our suppliers to a high standard and use a risk-based approach to audit suppliers for ongoing compliance.
CORPORATE RESPONSIBILITY
To us, corporate responsibility boils down to “Docompliance with the right thing” – this provides a tremendous opportunity to make a positive impact on the well-beingSupplier Code of our communities, environment and shareholders
Conduct.8 Energizer Holdings, Inc. 2022 Proxy Statement | | | | | | | | |
Reducing the impact of our Company and products on theenvironment
| | | | Safety – of our communities,
colleagues and products – is
important to us
| | | | Our efforts support the financial
health of the company and
reduce risk
|
– Long history of leading environmentally responsible standards – in the 1970s our wastewater effluent standards became the model for the U.S. EPA; led the industry in eliminating mercury and cadmium from household batteries in the 1990s
– By working with third-party recycling companies, we divert millions of pounds annually from landfills
– Sites in Asheboro, North Carolina are now approaching landfill-free
– Work to educate consumers on making smarter choices and maximizing efficiency
| | | | – Involvement in programs like “change your clock, change your battery” and emergency preparation programs
– First to voluntarily develop coin lithium battery packaging that complies with child-resistant packaging standards
– Three of our North American worksites have been recognized by OSHA for safety programs, colleague engagement and low injury rates; these same programs are used globally
| | | | – Providing opportunities for colleagues to participate incolleague-led grassroots programs and volunteer efforts are part of our recruitment and retention program
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COMMUNICATING CONCERNS TO THE BOARD
Shareholders may contact our Board, any director (including the Independent Chairman), or any Committee. Communications will be received and processed by management before being forwarded to the Board, a Committee or a director, as designated in your message.
| | Shareholders and other interested parties may communicate directly with our Board, any Committee of our Board, any individual Director (including the Independent Chairman and the Committee Chairs) or the non-employee Directors as a group, by writing to: | |
| | | | | | | 533 Maryville University Drive
St. Louis, MO 63141 |
Concerns relating to our financial statements, accounting practices, internal controls or violations of our Code of Conduct should be addressed in accordance with the procedures outlined in our Code of Conduct, which is available on our website at http://investors.energizerholdings.com/corporate-governance.
| | | | |
| | | | | | | | | | | |
| | Energizer’s Corporate Secretary reviews all correspondence addressed to our Directors and provides the Board with copies of all communications that deal with the functions of our Board or its Committees, or that otherwise require Board attention. Concerns relating to our financial statements, accounting practices, internal controls or violations of our Code of Conduct are addressed in accordance with the procedures outlined in our Code of Conduct, which is available on our website at https://investors.energizerholdings.com/corporate-governance and are forwarded to the Chair of the Audit Committee. | |
| Energizer Holdings, Inc. 20192022 Proxy Statement 9 |
Board of DirectorsTABLE OF CONTENTS
Energizer, a global branded consumer products company, is one of the world’s largest manufacturers and distributors of primary batteries, portable lights and auto care appearance, performance, refrigerant and fragrance products. The Nominating and Governance Committee is responsible for recommending candidates for election to our Board of Directors, consistent with the
skills and experience required of the Board in exercising its oversight function and strategic priorities in addition to the requirements for membership set forth in our Corporate Governance Principles.
Prior to the creation of the Nominating and Governance Committee, the Human Capital Committee held this responsibility. We have
eleventen nominees for the Board of Directors,
nineall of whom serve on our current Board of
Directors and two nominees who are standing to replace W. Patrick McGinnis and J. Patrick Mulcahy.Directors. Mr.
McGinnis and Mr. Mulcahy haveArmstrong has decided to not stand for
re-election to the Board of Directors when
theirhis term expires at
this year’sthe 2023 Annual
Shareholders’ Meeting.
Following Mr. Armstrong’s retirement, the size of our Board will be reduced from 11 to 10 directors. We thank Mr.
McGinnis and Mr. MulcahyArmstrong for
theirhis many years of service and substantial contributions to the Board, the Company and our shareholders.
CRITERIA, QUALIFICATIONS, EXPERIENCE AND INDEPENDENCE For all directors, we require integrity, energy, forthrightness, analytical skills and commitment to devote the necessary time and attention to the Company’s affairs. In evaluating the suitability of individual director candidates, our Board considers many factors, including educational and professional background; personal accomplishments; industry experience; and diversity of thought as well as background, including on the basis of race, color, national origin, gender, religion, disability and sexual orientation. The Nominating and Governance Committee works with our search firm to ensure the candidate slate provided to the Committee includes diverse candidates.
Directors should be able to devote sufficient time to the affairs of the Company and be diligent in fulfilling the responsibilities of a director and Board Committee member, including developing and maintaining sufficient knowledge of the Company and its industries; reviewing and analyzing reports and other information important to the Board and Committee responsibilities; preparing for, attending and participating in Board and Committee meetings; and satisfying appropriate orientation guidelines. The Nominating and Governance Committee is also responsible for articulating and refining specific criteria for Board and Committee membership to supplement the more general criteria. | | | KEY CRITERIA | |
| | ✔ Engaged | |
| | ✔ High personal integrity | |
| | ✔ Diversity of backgrounds and experience | |
| | ✔ Free of potential conflicts of interest | |
| | ✔ Willingness to challenge and stimulate management | |
| | ✔ Ability to devote sufficient time to serve | |
| | ✔ Commitment to representing the interests of all shareholders | |
The Board does not believe that directors should expect to be re-nominated annually. In fiscal 2019,determining whether to recommend a director for re-election, the Human Capital Committee continued to identify director candidates through the use of an external search firm. Ms. Frankiewicz and Mr. Abrams-Rivera were identified by an external search firm for inclusion as director candidates, following the Human Capital Committee’s evaluation and nomination. The Nominating and Governance Committee also considers the director’s participation in and contributions to the activities of the Board, the results of the most recent Board self-assessment (including any peer feedback), and meeting attendance.
When the Nominating and Governance Committee recruits new director candidates, proposed by directors, management,that process typically involves either a search firm or a member of the Nominating and our shareholders.Governance Committee contacting a prospective candidate to assess interest and availability. Candidates then meet with members of the Board and the Chief Executive Officer, and, as appropriate, with members of management. At the same time, the Committee and the search firm will contact references for the candidate. A background check is completed before a final candidate recommendation is made to the Board.
10 Energizer Holdings, Inc. 2022 Proxy Statement | |
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The Nominating and Governance Committee also considers shareholder recommendations for candidates for the Board of Directors using the same criteria described below. Additional information can be found in the section “
Shareholder Proposals for the 20212024 Annual Shareholders’ MeetingMeeting.”
.At the 2017 Annual Shareholders’ Meeting, the shareholders voted to amend and restate the Amended and Restated Articles of Incorporation of the Company that resulted in aphased-in elimination of the classified board. Beginning with the 2020 Annual Shareholders’ Meeting, our shareholders will be electing all Board members on an annual basis.
DIRECTOR QUALIFICATIONS
The Nominating and Governance Committee works with our Board to determine the characteristics, skills, and experience for the Board with the objective of having a board with diverse backgrounds, skills, and experience.
For all directors, we require independence, integrity, energy, forthrightness, analytical skills and commitment to devote the necessary time and attention to the Company’s affairs. In evaluating the suitability of individual director candidates, our Board considers many factors, including educational and professional background; personal accomplishments; industry experience; and diversity on the basis of race, color, national origin, gender, religion, disability and sexual orientation.
Directors should be able to devote sufficient time to the affairs of the Company and be diligent in fulfilling the responsibilities of a director and Board Committee member, including developing and maintaining sufficient knowledge of the Company and its industries; reviewing and analyzing reports and other information important to the Board and Committee responsibilities; preparing for, attending and participating in Board and Committee meetings; and satisfying appropriate orientation guidelines.
The Nominating and Governance Committee is also responsible for articulating and refining specific criteria for Board and Committee membership to supplement the more general criteria.
Mr. Klein, who is currently 74, has been a director on our Board since 2015. During Mr. Klein’s service, he has continued to enhance the Board’s oversight of management, given his extensive experience of the industry and the Company, and has provided an invaluable perspective for both the Board and management. Although Mr. Klein has reached the retirement age of 72 set forth within our Corporate Governance Principles, the Board has requested that Mr. Klein stand for nomination forre-election to our Board at our 2020 Annual Shareholders’ Meeting.
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10 Energizer Holdings, Inc. 2019 Proxy Statement
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DIRECTOR INDEPENDENCE
Having an independent board is a critical element of our corporate governance. Our Corporate Governance Principles provide that a majority of our directors be independent. Our Board has adopted director independence guidelines to assist in determining each director’s independence. The guidelines either meet or exceed the independence requirements of the NYSE.
NYSE and SEC.
Each year, and before a new director is appointed, the Board must affirmatively determine a director has no relationship that would interfere with the exercise of independent judgment in carrying out his or her responsibilities as a director. Annually, each director completes a detailed questionnaire that provides information about relationships that might affect the determination of independence. Management provides the Nominating and Governance Committee and Board with relevant known facts and circumstances of any relationship bearing on the independence of a director or nominee. The Nominating and Governance Committee then completes an assessment of each director and nominee, considering all known relevant facts and circumstances concerning any relationship bearing on the independence of a director or nominee. This process includes evaluating whether any identified relationship otherwise adversely affects a director’s independence and affirmatively determining that the director has no material relationship with the Company, another director, or as a partner, shareholder, or officer of an organization that has a relationship with the Company.
Based on
The Board has determined that all of our nominees, other than Mr. LaVigne, are independent within the reviewmeaning of Energizer’s independence standards (which may be found in our Corporate Governance Principles) and applicable NYSE and SEC rules and regulations.
The Company’s Corporate Governance Principles provide that the Board will not nominate individuals for election or re-election as directors after they have attained age 75. On the recommendation
byof the Nominating and Governance Committee, the Board
analyzedmay waive these requirements on an annual basis as to any director if there are unusual circumstances that warrant a waiver to retain needed continuity and expertise or for other business reasons that are in the
independencebest interests of
each nominee and determined that all nominees with the
exception of Mr. Hoskins, our Chief Executive Officer, meet the standards of independence under our Corporate Governance Principles.Company.
| Energizer Holdings, Inc. 2022 Proxy Statement 11 |
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OUR DIRECTOR NOMINEES
Of our eleven (11) director nominees:
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12 10 | | are independent
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5 | | are current and formerChief Executive Officers
|
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5 | | haveinternational experience
|
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6 | | haveserved on another public company board in the last five years
|
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8 | | haveconsumer packaged goods experience
|
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3 | | arewomen
|
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3 | | areethnically diverse
|
Our eleven (11) director nominees:
represent diverse backgrounds and viewpoints;
have served as senior leaders in the areas of operations, finance, corporate development, legal, technology and human capital;
have proven leadership skills; and
strengthen our Board’s oversight capabilities by providing historical and new perspectives about our Company.
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| | Energizer Holdings, Inc. 20192022 Proxy Statement 11 | |
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| | PROPOSAL
1 | |
| | |
PROPOSAL
1
| | Resolution to Elect Directors ✓
| |
| | ✔ The Board recommends a voteFOR each of the nominees listed in this proposal. | |
| | | |
Set forth in this section are each nominee’s name, age,
as of our Annual Shareholders’ Meeting, principal occupation, business experience, and other current and prior public company directorships held during the past five years. We also discuss the qualifications and skills that led our Board to nominate each person for election as a director. All of the nominees agreed to be named in this Proxy Statement and to serve if elected.
INFORMATION ABOUT NOMINEES
Carlos Abrams-Rivera
Executive Vice President & President, North America, Kraft Heinz Company
| | Age: 55 | | | Director since 2020 | |
Age:52
|
Independent Director
Energizer Committees:
Finance and Oversight
Committee
Nominating and
Governance Committee
Other Public Company
Board:
• None | | | Mr. Abrams-Rivera has served as Executive Vice President & President, North America at The Kraft Heinz Company, one of the largest global food and beverage companies, since December 2021. Prior to his current role he served as U.S. Zone President at Kraft Heinz from February 2020 to November 2021. Prior to joining Kraft Heinz, Mr. Abrams-Rivera served as Executive Vice President of Campbell Soup Company a multi-national food company, since November 2019 and as President, of Campbell Snacks a $4 billion business since 2018.from 2018 to 2020. Prior to that, Mr. Abrams-Rivera joined Campbell Soup Company inwas President, Pepperidge Farm from 2015 as President of Pepperidge Farmto 2018, where he led the turnaround of the business and led the strategic work that led to develop the Company’scompany’s snack strategy and the acquisition of Snyder’s Lance, Inc.Lance. Mr. Abrams-Rivera previously spent 21 years in leadership roles with the business that is today known as Mondelēz International, which encompasses the former Kraft Foods global snack and food brands. His prior roles included President of Gum & Candy for Mondelēz Latin America and President of Mondelēz Mexico. | |
| | | | | | |
| | | |
| | | | | • Executive Management | | | • Consumer Products Industry | |
| | | | | • Financial Literacy | | | • Public Relations | |
| | | | | • Public Company Experience | | | • Retail Industry | |
| | | | | • M&A/Capital Markets | | | • Marketing/Sales | |
| | | | | • Corporate Governance | | | • Analytics | |
| | | | | • International | | | • E-Commerce | |
| | | | | • Business Operations • Consumer Packaged Goods
• International
• M&A
• Marketing/Sales
• Strategy
| | | | |
| | | | | | | | | |
| | | | | Mr. Abrams-Rivera’s rich international experience, strong consumer packaged goods background and expertise in launching new products, brand-building, marketing and partnership with customers across sales channels provides a perspective needed forcritical to helping Energizer build long-term shareholder value. | |
Cynthia J. Brinkley
Retired Chief Administrative and Markets Officer, Centene Corporation
| | Age: 63 | | | Director Since 2015 | |
12 Energizer Holdings, Inc. 2019 Proxy Statement
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|
| | |
Age:71
Energizer Committees:Audit
Human Capital Committee | | Director Since 2015
Mr. Armstrong is a private equity investor. From 2001 to 2004, Mr. Armstrong served as Executive Vice President and Chief Operating Officer at Cargill Animal Nutrition. Prior to his employment with Cargill, Mr. Armstrong served as Chief Operating Officer of Agribrands International, Inc., an international agricultural products business, and as Executive Vice President of Operations of the international agricultural products business of Ralston Purina Company. He also served as managing director of Ralston’s Philippine operations, and during his tenure there, was a director of the American Chamber of Commerce.
Skills and Experience:
• Financial Literacy
• Public Company Experience
• Business Operations
• Consumer Packaged Goods
• International
• Marketing/Sales
• Consumer Packaged Goods Experience
As a result of Mr. Armstrong’s international and operational background, as well as his extensive experience with corporate transactions, he provides a global perspective to the Board, which has become increasingly important as our international operations represent a significant portion of our annual sales.
|
| | |
Age:60
Independent Director
Energizer Committees:
Human Capital Committee
Nominating and
Other Public Company
• Ameren Corporation | | Director Since 2015
| Ms. Brinkley was Chief Administrative and Markets Officer for Centene Corporation, a government services managed care company from June 2018 until February 2019. Ms. Brinkley served as President and Chief Operating Officer of Centene from November 2017 until June 2018, Executive Vice President, Global Corporate Development of Centene from January 2016 until November 2017 and as Executive Vice President, International Operations and Business Integration of Centene from November 2014 until January 2016. At Centene, Ms. Brinkley had responsibility for overseeing global corporate development, integration and international operations. Prior to joining Centene in 2014, Ms. Brinkley was Vice President of Global Human Resources for General Motors from 2011 to 2013. Prior to GM, she was Senior Vice President of Talent Development and Chief Diversity Officer for AT&T from 2008 to 2011. Ms. Brinkley worked for SBC Communications from 1986 to 2008, lastly as President of SBC / AT&T Missouri, when SBC Communications acquired AT&T. | |
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| | | |
| | | | | • Corporate Governance | | | • Risk Management/Compliance | |
| | | | | • Financial Literacy | | | • International | | | • Human Capital Management | |
| | | | | • Public Company Experience | | | | | | • Legal/Regulatory | |
| | | | | | | | • Public Relations • Human Capital Management
| | | | |
| | | | | | |
| | | | | Ms. Brinkley brings significant experience in communications and human capital management as well as extensive experience as a senior executive at Fortune 10 and Fortune 20050 companies to our Board of Directors and provides the Board with a unique perspective on high-profile issues facing our core businesses. | |
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| | Energizer Holdings, Inc. 20192022 Proxy Statement 13
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Rebecca D. Frankiewicz
Chief Commercial Officer, President North America, ManpowerGroup North America
| | Age: 51 | | | Director since 2020 | |
Age:48
|
Independent Director
Energizer Committees:
Audit Committee
Human Capital Committee
Other Public Company
Board:
• None | | In 2017,
| Ms. Frankiewicz joinedhas served as the Chief Commercial Officer, President North America, responsible for over $10B in revenue and over 4,000 employees of ManpowerGroup Inc., a world leader in innovativeinnovation workforce solutions, since June 2022. Prior to her current position, Ms. Frankiewicz served as the President, of ManpowerGroup North America a $3 billion segment comprised of 4,000 employees and 11,000 clients.from July 2017 to May 2022. Before joining ManpowerGroup, Ms. Frankiewicz held a variety of different roles, including leading Quaker Foods North America for PepsiCo. She held roles in innovation, strategy, marketing/sales and finance functions at PepsiCo from 2006 to 2017. Prior to PepsiCo, Ms. Frankiewicz served as a consultant at Deloitte Consulting and Andersen Consulting and began her career at Procter & Gamble Company. | |
| | | |
| | | |
| | | | | • Executive Management | | | | | | • Consumer Packaged Goods• Marketing/Sales
• Innovation
• Strategy
• Human Capital Management
| |
| | | | | • Financial Literacy | | | • Consumer Products Industry | | | • Marketing/Sales | |
| | | | | • Public Company Experience | | | • Public Relations | | | • Analytics | |
| | | | | • M&A/Capital Markets | | | • Risk Management/Compliance | | | • Innovation | |
| | | | | • International | | | • Retail Industry | | | • Supplier to Consumer Packaged Goods Industry | |
| | | | | | |
| | | | | Ms. Frankiewicz’Frankiewicz’s extensive senior leadership experience advising international consumer goods companies on complex management and strategy matters provides unique perspective and expertise to the board’sBoard’s strategic planning process. Additionally, Ms. Frankiewicz’Frankiewicz’s leadership role at one of the leading global workforce solutions companiescompany provides the Board with insight on human capital management challenges,issues, including recruitment, retention and inclusion and diversity. | |
Kevin J. Hunt
Retired Chief Executive Officer and President, Ralcorp Holdings, Inc.
| | Age: 71 | | | Director Since 2015 | |
Age:58
| Independent DirectorEnergizer Committee:Committees: Finance and Oversight Committee | | Director Since 2015
Mr. Hoskins has been Chief Executive Officer of Energizer Holdings, Inc. since July 2015. Prior to his current position, he served as President and Chief Executive Officer, Energizer Household Products of our former parent company, a position he held since April 2012. Mr. Hoskins held several leadership positions including Vice President, Asia-Pacific, Africa and Middle East from 2008 to 2011, Vice President, North America Household Products Division from 2005 to 2008, Vice President, Sales and Trade Marketing from 1999 to 2005, and Director, Brand Marketing from 1996 to 1999. He started his career at Union Carbide in 1983 following several years in the retailer, wholesaler and broker industry.
Skills and Experience:
• Strategy
• Business Operations
• Consumer Packaged Goods
• Public Relations
• International
• Marketing/Sales
• Consumer Packaged Goods Experience
• Retail Industry
• Analytics
Mr. Hoskins is very knowledgeable about the dynamics of our business and the categories in which we compete. His experience with the complex financial and operational issues of consumer products businesses brings critical financial, operational and strategic expertise to our Board of Directors.
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14 Energizer Holdings, Inc. 2019 Proxy Statement
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Age:68
Energizer Committees:
Finance and Oversight
Committee (Chair)
Human Capital Committee
Other Public Company
Board:
• Clearwater Paper | | Director Since 2015
| Mr. Hunt served as President and Chief Executive Officer of Ralcorp Holdings, Inc., a private-brand food and food service products company, from January 2012 to January 2013 upon its acquisition by ConAgra Foods, Inc. Mr. Hunt previously served as Co-Chief Executive Officer and President of Ralcorp Holdings from 2003 to 2011 and Corporate Vice President from 1995 to 2003. Prior to joining Ralcorp Holdings, he was Director of Strategic Planning for Ralston Purina and before that he was employed in various roles in international and domestic markets and general management by American Home Products Corporation. | |
| | | |
| | He currently servespreviously served as a Senior Advisor to C.H. Guenther & SonSons, Inc. and previously served as a consultant to Treehouse Foods and on the advisory Board of theVi-Jon Company, owned by Berkshire Partners. Mr. Hunt also serves on the Board of Directors of the American Youth Foundation. | |
| | | |
| | | |
| | | | | • Business Operations• Consumer Packaged Goods
Products Industry | |
| | • International Financial Literacy | | | • Public Relations | |
| | | | | • Public Company Experience | | | • Risk Management/Compliance | |
| | | | | | | | • Marketing/Sales Retail Industry | |
| | | | | • Corporate Governance | | | • Human Capital Management | |
| | | | | • International | | | • Marketing/Sales | |
| | | | | • Business Operations | | | | |
| | | | | | |
| | | | | As a former Chief Executive Officer and President of a NYSE-listed company, Mr. Hunt brings his considerable experience to our Board and the Committees thereof on which he serves. | |
James C. Johnson
Retired General Counsel, Loop Capital Markets LLC
| | Age: 70 | | | Director Since 2015 | |
Age:67
| Independent Director
Energizer Committee: Committee:Nominating and Governance Committee (Chair)
Other Public Company
Boards:
• Ameren Corporation
• Hanesbrands Inc.
• Former parent company, Edgewell Personal Care Company | | Director Since 2015
| Mr. Johnson served as General Counsel of Loop Capital Markets LLC, a financial services firm, from November 2010 until his retirement in January 2014. From 1998 to 2009, Mr. Johnson served in a number of positions at The Boeing Company, an aerospace and defense firm, including Vice President, Corporate Secretary and Assistant General Counsel from 2003 until 2007, and Vice President and Assistant General Counsel, Commercial Airplanes from 2007 to his retirement in Marchuntil 2009. In February 2018, Mr. Johnson completed the NACD Cyber-Risk Oversight Program and earned the CERT Certificate in Cybersecurity Oversight, demonstrating his commitment to board-level cyber-risk oversight. | |
| | | |
| | | |
| | • Executive Management | | | • Business Operations | |
| | • Financial Literacy | | | • Risk Management/Compliance | |
| | • Public Company Experience | | | • M&A/Capital Markets• Corporate Governance
• Human Capital Management
| |
| | • Corporate Governance | | | • Legal/Regulatory • Risk Management/Compliance
| |
| | | | | | |
| | | | | As a former General Counsel of a financial services firm and a former Vice President, Corporate Secretary and Assistant General Counsel of an aerospace and defense firm, Mr. Johnson provides our board with extensive executive management and leadership experience, as well as strong legal, compliance, risk management, corporate governance and compensation skills. | |
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| | 14 Energizer Holdings, Inc. 20192022 Proxy Statement 15
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Mark S. LaVigne
President and Chief Executive Officer, Energizer Holdings, Inc.
| | Age: 51 | | | Director Since 2021 | |
Age:74
Independent Director
|
Energizer Committees:Audit Committee
Committee: Finance and Oversight
Other Public Company Boards: Board:
• Embrex, Inc.• Former parent company, Edgewell Personal Care Company
None | | Director Since 2015
| Mr. KleinLaVigne has served as Energizer’s Chief Executive Officer since January 2021, and as its President of Randolph Collegesince 2019. Mr. LaVigne served as Energizer’s Chief Operating Officer from 2007 to 2013. Previously, Mr. Klein2015 through December 2020. He previously served as Executive Vice Chancellor for Administration, Washington UniversityPresident from 2015 to 2019. Mr. LaVigne was with our former parent company since 2010. Mr. LaVigne led our Spin-off from our former parent company in St. Louis from 20042015, in addition to 2007. From 1985 to 2003, Mr. Klein servedserving as Vice President, General Counsel and Chief Executive Officer, Bunge North America, Inc.Secretary. Prior to joining the Company, Mr. LaVigne was a partner at Bryan Cave LLP from 2007 to 2010, where he advised our former parent company on several strategic acquisitions. | |
| | | |
| | Skills and Experience: | |
| | | | | • Executive Management | | | • Business Operations | |
| | | | | • Financial Literacy | | | • Consumer Products Industry | |
| | | | | • Public Company Experience | | | • Public Relations | |
| | | | | • M&A/Capital Markets | | | • Risk Management/Compliance | |
| | | | | • Corporate Governance | | | • Legal/Regulatory | |
| | | | | • International | | | • E-Commerce | |
| | | | | | |
| | | | | Mr. LaVigne’s long tenure at the Company, deep understanding of the consumer-packaged goods industry and the Company’s businesses, his appointmentinstrumental role in leading the Spin-off and his leadership role as Chief Executive Officer he served in various senior executive positions for Bunge North America,enable him to provide valuable contributions with respect to strategy, growth and earlier in his career, in a variety of positions internationally for Bunge, Ltd.Mr. Klein earned a law degree and practiced law in New York City for several years before joining Bunge Ltd. He is also a Trustee of the American University of Paris.
Skills and Experience:
• Financial Literacy
• Business Operations
• Corporate Governance
• Legal/Regulatory
• Human Capital Management
• Risk Management/Compliance
Mr. Klein has significant executive management and administrative experience in agribusiness and higher education and brings the benefits of his diverse legal, international, operational and administrative background and experience to our Board.
long-range plans. | |
Patrick J. Moore
Independent Chairman, Energizer Holdings, Inc.
| | Age: 68 | | | Director Since 2015 | |
Age:65
|
Independent DirectorOther Public CompanyBoard:
• Archer Daniels Midland Company Past Public Company Boards:
• Exelis, Inc.
• Rentech, Inc.
| | Director Since 2015
| Mr. Moore has served as the Company’s Chairman since November 2018. He is also President and Chief Executive Officer of PJM Advisors, LLC, a private equity investment and advisory firm. Prior to PJM, Mr. Moore served as Chairman and Chief Executive Officer of Smurfit-Stone Container Corporation, a leader in integrated containerboard and corrugated package products and paper recycling, from 2002 to 2011 upon its acquisition by RockTenn Company. | |
| | | |
| | During his 24-year tenure at Smurfit, Mr. Moore also served as Chief Financial Officer, Vice President—Treasurer and General Manager of the Company’s Industrial Packaging division. Smurfit-Stone Container Corp voluntarily filed for Chapter 11 bankruptcy in January 2009 and emerged in June 2010. Mr. Moore previously held positions in corporate lending, international banking and corporate administration at Continental Bank in Chicago. He is on the board of Archer Daniels Midland Company and serves as Chairman of the North American Review Board of American Air Liquide Holdings, Inc. | |
| | | |
| | | |
| | | | | • Executive Management | | | • Business Operations | |
| | | | | • Financial ExpertiseLiteracy | | | • Business Operations Public Relations | |
| | | | | • Public Company Experience | | | • Risk Management/Compliance | |
| | | | | | | | • Human Capital Management | |
| | | | | | | | • Public Relations• Supplier to Consumer Packaged Goods
Industry | |
| | | | | • Risk Management/Compliance• Strategy
International | | | | |
| | | | | | |
| | | | | Mr. Moore’s experience and financial expertise contribute to the oversight of overall financial performance and reporting by our Board as well as operational and strategic oversight. | |
| | |
16Energizer Holdings, Inc. 20192022 Proxy Statement
| |
15 |
TABLE OF CONTENTS
Donal L. Mulligan
Retired Executive Vice President and Chief Financial Officer, General Mills, Inc.
| | Age: 61 | | | Director Since 2021 | |
Age:48
|
Energizer Committees:Committees: Finance and Oversight Committee
Other Public Company
Boards:
• Tennant Company
• Herbalife Nutrition Ltd. | | | Mr. Mulligan served as Chief Financial Officer of General Mills, Inc., a global manufacturer and marketer of branded consumer foods, from 2007 until his retirement in 2020. Mr. Mulligan joined General Mills in 2001 and held various senior management positions including Vice President, Financial Operations for the International division, Vice President, Financial Operations for Operations and Technology and Vice President and Treasurer. Prior to joining General Mills, Mr. Mulligan gained extensive experience in financial management, operations, and international administration in positions with Pillsbury, PepsiCo and YUM! Brands. | |
| | | |
| | Skills and Experience: | |
| | • Executive Management | | | • International | |
| | • Financial Literacy | | | • Business Operations | |
| | | | | • Public Company Experience | | | • Consumer Products Industry | |
| | | | | • M&A/Capital Markets | | | • Risk Management/Compliance | |
| | | | | • Corporate Governance | | | | |
| | | | | | |
| | | | | Mr. Mulligan brings deep financial expertise and leadership experience in the consumer-packaged goods industry to the Board, as well as demonstrated strength in business analytics and global expansion. | |
Nneka L. Rimmer
Retired President, Global Flavors and Extracts, McCormick & Company, Inc.
| | Age: 51 | | | Director Since 2018 | |
| |
Independent Director
Energizer Committees:
Audit Committee
Human Capital Committee
Other Public Company
Board:
• Constellation Energy | | Director Since 2018
| Ms. Rimmer is Senior Vicewas President Business Transformation- Global Flavors and Extracts at McCormick & Company, Inc., a global leader in flavor, seasonings and spices, where she iswas responsible for shaping overall corporate strategiesaccelerating growth for the company’s global business in compound and leading the delivery of strategic business enablersencapsulated flavors, extracts, reaction flavor materials, and value-producing business services across the company.fragrances from August 2020 until her retirement in April 2021. Ms. Rimmer provides strategic directionpreviously served as SVP, Business Transformation for mergersMcCormick and acquisitionsheld other roles of increasing responsibility within the company, including SVP, Strategy and is responsible for shaping the corporate-wide portfolio strategy. In addition, she oversees McCormick’s Global Enablement Information Technology, Corporate Development and SVP, Corporate Strategy Teams.and Development. | |
| | | |
| | Prior to joining McCormick in 2015, Ms. Rimmer was a Partner and Managing Director with the Boston Consulting Group. While at Boston Consulting Group for 13 years, she executed large-scale transformation initiatives working with large, global consumer goods corporations. Her areas of strategic expertise include trade, competition, international growth, go-to-market as well as organizational development. Ms. Rimmer also serves as a Director at Constellation Energy and a Trustee of the University of Baltimore Foundation.Maryland, Baltimore. | |
| | | |
| | | |
| | | | | • Executive Management | | | • Business Operations | |
| | | | | • Financial Literacy | | | • Consumer Products Industry | |
| | | | | • Public Company Experience | | | • Retail Industry | |
| | | | | | | | • Financial Literacy Analytics | |
| | | | | • Information Technology Corporate Governance | | | • Human Capital Management Innovation | |
| | | | | • Consumer Packaged Goods International | | | • Retail Industry• E-Commerce
• Analytics
• Innovation
Technology/IT Systems | |
| | | | | | |
| | | | | Ms. Rimmer brings to the Company significant brand-building expertise. Her current and prior executive leadership roles enable her to provide valuable contributions with respect to creativity and vision for long-term growth. Ms. Rimmer’s extensive consumer products background allow her to contribute valuable insights regarding the Company’s industry, operations, and strategy. | |
16 Energizer Holdings, Inc. 2022 Proxy Statement | |
TABLE OF CONTENTS
Robert V. Vitale
President and Chief Executive Officer, Post Holdings, Inc.
| | Age: 56 | | | Director Since 2017 | |
 |
Age:53
Energizer Committees:Committees: Finance and Oversight Committee
Other Public Company
• BellRing Brands, Inc. | | Director Since 2017
| Mr. Vitale has served as President and Chief Executive Officer of Post Holdings, Inc. since 2014. Post is a consumer packagedconsumer-packaged goods holding company operating in the center-of-the store,center-of-the-store, refrigerated, food service and food ingredient refrigerated convenient nutrition and private brand food categories. RobMr. Vitale joined Post in 2011 as its Chief Financial Officer. Mr. Vitale also serves as Chairman of the Board of Directors of BellRing Brands, Inc., a Company that spun-off from Post. In March 2022, Post completed the spin-off of 80.1% of its interest in BellRing through a distribution of BellRing common stock to Post shareholders. As of November 25, 2022, Post no longer holds any equity interest in BellRing.
| |
| | Prior to joining Post, RobMr. Vitale led AHM Financial Group, LLC (2006-2011), an insurance brokerage and wealth management firm, and was a partner in Westgate Equity Partners, LLC, a consumer products private equity firm (1996-2006). He managed Corporate Finance at Boatmen’s Bancshares (1994-1996) and started his career at KPMG in 1987. | |
| | | |
| | | |
| | | | | • Corporate Governance | |
| | • Financial Literacy | | | • International | |
| | | | | • Public Company Experience | | | • Consumer Products Industry | |
| | | | | • M&A/Capital Markets • Financial Literacy / Expertise
• Consumer Packaged Goods
• International
• Corporate Governance
|
| | | | |
| | | | | | | | |
| | | | | Board Commitments | |
| | | | | We understand that some of our shareholders may have policies or practices that differ from Energizer’s regarding the number of boards on which a director who is also a current public company named executive officer may serve. To help Energizer better understand investors’ voting policies and to provide an opportunity to share with investors the specific facts and circumstances supporting Mr. Vitale’s service on Energizer’s Board, Energizer and its Nominating & Governance Committee Chairman invited and/or participated in several constructive shareholder engagements this year. These discussions sought to promote a mutual understanding of priorities both for our shareholders and Energizer and provided helpful insights to our Nominating & Governance Committee as they holistically considered Mr. Vitale’s service on Energizer’s Board and determined that his continued membership on the Board was in the best interest of the Company and its shareholders.
As an experienced CEO with substantial understanding of Energizer’s business, Mr. Vitale is an exceptional director who is actively engaged and highly valued by the Board of Directors. In particular, Mr. Vitale’s strong leadership, deep M&A and capital markets expertise, accounting and financial background, and significant knowledge of consumer products businesses brings critical expertise to our Board. Additionally, and as noted below, the specific facts and circumstances of Mr. Vitale’s service on the Post, BellRing, and Energizer boards of directors, demonstrate that Mr. Vitale is well-positioned to serve as a member of Energizer’s Board. In particular:
• Mr. Vitale’s time commitments have not changed. Mr. Vitale’s service on BellRing’s Board is simply a continuation of the roles in which he served before Post’s spin-off of BellRing in March 2022. Mr. Vitale’s involvement with, and time commitment to, BellRing remains the same as it was in prior years, with no expectation that Mr. Vitale will spend a materially different amount of time dedicated to BellRing than in prior years.
• Mr. Vitale already knows the BellRing business. Mr. Vitale has existing knowledge of the BellRing business, stemming from his oversight role of Post’s active nutrition business before Post’s 2019 IPO of BellRing. Mr. Vitale’s involvement with BellRing is the same as it was before the BellRing IPO, but with a formal title due to the separation of the two companies.
• Board logistics continue to facilitate Mr. Vitale’s service on all three Boards. Energizer, Post, and BellRing all hold regular board meetings in St. Louis, Missouri. Post’s and BellRing’s headquarters are also in St. Louis, Missouri. These logistics facilitate Mr. Vitale’s attendance, and greatly reduce the travel time that many directors face. Since he joined Energizer’s board in 2017, Mr. Vitale has attended more than 98% of the regularly scheduled Board meetings of Energizer, and he has a documented record of director commitment and engagement.
For these reasons, we are confident that Mr. Vitale’s service on the Boards of Post and BellRing will not negatively impact or interfere with his service on Energizer’s Board. We are confident that Mr. Vitale will continue to meet his commitments and be a valuable contributor to our Board of Directors. | |
| Energizer Holdings, Inc. 20192022 Proxy Statement 17 |
TABLE OF CONTENTS
Our Board holds regularly scheduled quarterly meetings.
Additionally, there is generallyThe Board reviews strategic planning on an annual
strategy planning meeting which includes presentationsbasis and
discussionsdiscusses with senior management
about the Company’s long-term strategy. During fiscal
2019,2022, all directors attended 75% or more of the Board meetings and meetings of the Committees on which they served during their period of service. Under our Corporate Governance Principles, each director is encouraged to attend our Annual Shareholders’ Meeting. All of our directors attended the
20192022 Annual Shareholders’
Meeting.Meeting, which was held in a virtual format.
DIRECTOR SHARE OWNERSHIP REQUIREMENTS
To help align the financial interests of our non-employee directors with those of our shareholders, our Corporate Governance Principles provide that our non-employee directors must maintain ownership of our common stock with a value of at least five times the directors’ annual cash retainer for Board service. For purposes of this determination, stock ownership includes shares of our common stock that are owned directly or by family members residing with the director or by family trusts, vested and deferred restricted stock equivalents and units, unvested restricted stock equivalents and units (other than stock equivalents or units subject to achievement of performance targets) and common stock units credited to a director under the Company’s deferred compensation plan. Newly appointed directors are required to retain at least 50% of restricted stock upon vesting until they become compliant with our ownership guidelines and are given a period of five years to attain full compliance with the requirements. As of September 30, 2022, all of our non-employee directors complied with the requirements.
DIRECTOR COMPENSATION
We provided several elements of compensation to ournon-employee directors for service on our Board during fiscal 2019.
The
Human CapitalNominating & Governance Committee, which makes recommendations to the full Board regarding director compensation, strives to set director compensation
ataround the 50
th percentile of
theour peer group.
ThisOur peer
group,groups for fiscal 2022 and 2023, which can be found under “
Executive Compensation Peer Group,”
has beenwere selected for purposes of evaluating our executive and director compensation based on market data provided by the Human Capital Committee’s independent consultant,
Farient Advisors (for fiscal 2023) and Mercer
LLC.RetainersLLC (for fiscal 2022). Our 2020 Plan includes a $1,000,000 annual compensation limit on all forms of compensation for non-employee directors, and Meeting Feesthis limit remains included in our 2023 Plan, which is presented to shareholders for approval in this proxy statement.
Our non-employee director compensation program for service on our Board during fiscal 2022 included the elements described below. In addition, we provide transportation and lodging for out-of-town directors attending Board and Committee meetings, coverage under our general directors’ and officers’ liability insurance policies and, consistent with a benefit broadly provided to our colleagues, matching contributions to charitable organizations from the Energizer charitable foundation (up to $5,000 in any year). Directors may also, from time to time during the fiscal year, be provided with samples of our products, with an incremental cost of less than $50.
During fiscal
2019, all2022, each of the directors, other than Mr.
Hoskins,LaVigne, received
the following compensation packagea $100,000 annual retainer for serving on the Board and its Committees. Mr.
Hoskins,LaVigne, our Chief Executive Officer,
receivesreceived no additional compensation for
his service on the Board and the Finance and Oversight Committee.
| | | | | | |
| | | | | | |
| | | | | | |
| Non-Employee Director Compensation | |
| |
Annual retainer | | $ | 100,000 | |
| |
Fee for each Board meeting in excess of six (6) meetings | | $ | 1,500 | |
| |
Fee for each Committee meeting in excess of six (6) meetings | | $ | 1,500 | |
The Chairs of the Committees also received an additional annual retainer of $20,000 for their service, and the Independent Chairman of the Board received an additional annual retainer of $100,000 for his service as Chairman. In November 2019, the Board approved the eliminationmembers serving a portion of a per meeting fee of $1,500 for meetings in excess of six (6) during the fiscal year.
year receive a pro rata portion of the annual retainer. The directors do not receive meeting fees.
Deferred Compensation PlanDEFERRED COMPENSATION PLANNon-management directors are permitted to defer all or a portion of their retainers and fees under the terms of our deferred compensation plan. Deferrals may be made into (a) the Energizer common stock unit fund, which tracks the value of our common stock;stock, or (b) the prime rate fund option under which deferrals are credited with interest at the prime rate quoted by The Wall Street Journal. Deferrals invested in the stock unit fund in the deferred compensation plan are currently paid out in Energizer stock and deferrals invested in the prime rate fund in the deferred compensation plan are currently paid out in a lump sum in cash, or Energizer stockin each case within 60 days following the director’s termination of service on the Board.
18 Energizer Holdings, Inc. 2022 Proxy Statement | |
TABLE OF CONTENTS
Restricted Stock EquivalentsRESTRICTED STOCK UNITSInitial Grant.New,non-management directors who were appointed or elected to the Board received a grant of restricted stock equivalents with a grant-date value of $200,000, which vest three years from the date of grant or upon certain other vesting events. Directors had the option to defer delivery of shares upon vesting of this award until retirement from the Board. In November 2019, the Board approved elimination of thisone-time grant to newly appointed directors.
Annual Grant.
On the first business day of January each year, each
non-employee director is credited with a restricted stock
equivalentunit award with a
grant-dategrant date value of
$110,000 under$145,000. Grants in fiscal 2022 were made pursuant to our
20152020 Plan. This award vests one year from the date of grant or upon certain other vesting events. Directors have the option to defer the delivery of shares upon vesting of this award until retirement from the Board.
In November 2019,Board members serving a portion of the
Board approved increasingfiscal year will receive a pro rata portion of the annual restricted stock
equivalent award with a grant-date valueunit award. Upon retirement, directors receive 100% of
$145,000.all granted, but unvested, annual restricted stock unit awards.The following table sets forth the compensation paid to non-management directors for fiscal 2022.
| | | |
18 Energizer Holdings, Inc. 2019 Proxy Statement
| |
|
Director Share Ownership Requirements.
In order to help align the financial interests of ournon-employee directors with those of our shareholders, our Corporate Governance Principles provide that ournon-employee directors must maintain ownership of our common stock with a value of at least five times the directors’ annual retainer. For purposes of this determination, stock ownership includes shares of our common stock which are owned directly or by family members residing with the director or by family trusts, as well as vested options, vested and deferred restricted stock equivalents, unvested restricted stock equivalents (other than stock equivalents subject to achievement of performance targets) and common stock equivalents credited to a director under the Company’s deferred compensation plan. Newly appointed directors are required to retain at least fifty percent (50%) of vesting restricted stock until they become compliant and are given a period of five years to attain full compliance with the requirements. As of September 30, 2019, each of our directors was in compliance with the requirements.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
|
| DIRECTOR COMPENSATION TABLE |
| | | | | | | |
| Name | | Fees Earned or
Paid in Cash
(1) | | Stock Awards
(2)(3) | | Option Awards
(4) | | Non-Equity
Incentive
Plan
Compensation | | Change in Pension
Value and Non-
Qualified Deferred
Compensation
Earnings | | All Other
Compensation
(5)(6) | | Total |
| | | | | | | |
B.G. Armstrong | | | $ | 103,000 | | | | $ | 110,011 | | | | $ | 0 | | | | $ | 0 | | | | $ | 0 | | | | $ | 0 | | | | $ | 213,011 | |
| | | | | | | |
C.J. Brinkley | | | $ | 104,833 | | | | $ | 110,011 | | | | $ | 0 | | | | $ | 0 | | | | $ | 0 | | | | $ | 0 | | | | $ | 214,844 | |
| | | | | | | |
K.J. Hunt | | | $ | 101,500 | | | | $ | 110,011 | | | | $ | 0 | | | | $ | 0 | | | | $ | 0 | | | | $ | 0 | | | | $ | 211,511 | |
| | | | | | | |
J.C. Johnson | | | $ | 121,500 | | | | $ | 110,011 | | | | $ | 0 | | | | $ | 0 | | | | $ | 0 | | | | $ | 0 | | | | $ | 231,511 | |
| | | | | | | |
J.E. Klein | | | $ | 103,000 | | | | $ | 110,011 | | | | $ | 0 | | | | $ | 0 | | | | $ | 0 | | | | $ | 0 | | | | $ | 213,011 | |
| | | | | | | |
W.P. McGinnis | | | $ | 121,500 | | | | $ | 110,011 | | | | $ | 0 | | | | $ | 0 | | | | $ | 0 | | | | $ | 0 | | | | $ | 231,511 | |
| | | | | | | |
P.J. Moore | | | $ | 191,500 | | | | $ | 110,011 | | | | $ | 0 | | | | $ | 0 | | | | $ | 0 | | | | $ | 0 | | | | $ | 301,511 | |
| | | | | | | |
J.P. Mulcahy | | | $ | 114,000 | | | | $ | 110,011 | | | | $ | 0 | | | | $ | 0 | | | | $ | 0 | | | | $ | 0 | | | | $ | 224,011 | |
| | | | | | | |
N.L. Rimmer | | | $ | 103,000 | | | | $ | 110,011 | | | | $ | 0 | | | | $ | 0 | | | | $ | 0 | | | | $ | 0 | | | | $ | 213,011 | |
| | | | | | | |
R.V. Vitale | | | $ | 120,500 | | | | $ | 110,011 | | | | $ | 0 | | | | $ | 0 | | | | $ | 0 | | | | $ | 0 | | | | $ | 230,511 | |
| | C. Abrams-Rivera | | | $100,000 | | | $145,004 | | | $0 | | | $0 | | | $245,004 | |
| | B.G. Armstrong | | | $100,000 | | | $145,004 | | | $0 | | | $0 | | | $245,004 | |
| | C.J. Brinkley | | | $120,000 | | | $145,004 | | | $0 | | | $0 | | | $265,004 | |
| | R. D. Frankiewicz | | | $100,000 | | | $145,004 | | | $0 | | | $0 | | | $245,004 | |
| | K.J. Hunt | | | $120,000 | | | $145,004 | | | $0 | | | $0 | | | $265,004 | |
| | J.C. Johnson | | | $120,000 | | | $145,004 | | | $0 | | | $0 | | | $265,004 | |
| | P.J. Moore | | | $200,000 | | | $145,004 | | | $0 | | | $0 | | | $345,004 | |
| | D.L. Mulligan | | | $100,000 | | | $145,004 | | | $0 | | | $0 | | | $245,004 | |
| | N.L. Rimmer | | | $100,000 | | | $145,004 | | | $0 | | | $0 | | | $245,004 | |
| | R.V. Vitale | | | $120,000 | | | $145,004 | | | $0 | | | $0 | | | $265,004 | |
(1)
| This column reflects retainers for Board and meeting feesCommittee service earned during fiscal 2019. 2022. |
(2)
| ForDirectors are permitted to defer a portion or all directors this column reflectsof their cash retainers under the aggregateterms of the Company’s deferred compensation plan. During fiscal 2022, Ms. Frankiewicz and Mr. Vitale deferred 100% of their cash retainers into the Energizer stock fund of the deferred compensation plan. As of September 30, 2022, the number of units held by each director in the Energizer stock fund was as follows: Mr. Armstrong, 48,892; Ms. Brinkley, 4,612; Ms. Frankiewicz, 7,370; Mr. Johnson, 179; and Mr. Vitale, 14,792.
|
(3)
| Consistent with ASC Topic 718, the amounts in the table reflect the grant date fair value in accordance with Financial Accounting Standards Board (“FASB”), Accounting Standards Codification (“ASC”) Topic 718, of the restricted stock equivalent awardour awards to each of our directors of 3,561 RSUs on January 2, 20193, 2022 under our 2015 Plan valued at approximately $110,000 as described in the narrative above.2020 Plan. The award was valued based on the grant date fair value of $44.72.$40.72 per share. These RSUs were the only unvested outstanding stock awards for each of the directors as of September 30, 2022, and they will each vest on January 3, 2023. |
(3)(4)
| The number of vested but deferred stock equivalentsRSUs held by aeach director as of September 30, 20192022 is as follows: Mr. Abrams-Rivera, 2,772; Ms. Brinkley, 5,589;9,022; Ms. Frankiewicz, 6,205; Mr. Johnson, 16,341; Mr. Klein, 22,941;25,221; Mr. Moore, 13,449; Mr. Mulcahy, 20,50822,329; and Mr. Vitale, 3,259. 16,331. |
(4) | No options were granted to directors in fiscal year 2019. There were no outstanding shares of underlying stock options held by any director as of September 30, 2019.
|
(5) | Directors may also, from time to time during the fiscal year, be provided with samples of our products, with an incremental cost of less than $50.
|
(6) | The following items are not considered perquisites and are not included within the above disclosure of director compensation:
|
| (i) | The directors are covered under the terms of our general directors’ and officers’ liability insurance policies, the premiums for which are a general expense of the Company—we do not obtain a specific policy for each director, or for the directors as a group.
|
| (ii) | We provide transportation and lodging forout-of-town directors attending Board and Committee meetings at our headquarters.
|
| (iii) | The directors may make requests for matching contributions to charitable organizations from the Energizer charitable foundation, which we have funded from time to time, and the directors of that foundation, all of whom are colleagues of the Company, have determined to honor such requests which are in accordance with the charitable purpose of the foundation, and which do not exceed $5,000 in any year. All contributions are made out of the funds of the foundation and are not made in the name of the requesting director.
|
| | |
| | Energizer Holdings, Inc. 20192022 Proxy Statement 19
|
Audit Committee MattersTABLE OF CONTENTS
Our Audit Committee, in accordance with authority granted in its charter
as approved by the Board, appointed PricewaterhouseCoopers LLP (“PwC”) as independent auditor for the current fiscal year. PwC has served as our independent auditor since our
Spin-Off from Edgewell Personal Care Company (“Edgewell”) and served as Edgewell’s independent auditor for every fiscal year since 2000. PwC has begun certain work related to the fiscal
20202023 audit, as approved by the Audit Committee. Information on independent auditor fees for the last two fiscal years is set forth below. The Board and the Audit Committee believe that the retention of PwC to serve as independent auditor is in the best interests of the Company and its shareholders. In making this determination, the Board and the Audit Committee considered a number of factors, including:
Audit Committee members’ assessment of PwC’s performance
Management’s assessment of PwC’s performance
PwC’s independence and integrity
PwC’s fees and the quality of services provided to the Company
PwC’s global capabilities and knowledge of our global operations
A representative of PwC is expected to be present at the
20202023 Annual Shareholders’ Meeting and will have an opportunity to make a statement, if desired, as well as to respond to appropriate questions. Although NYSE listing standards require that the Audit Committee be directly responsible for selecting and retaining the independent auditor, we are providing shareholders with the means to express their views on this issue. Although this vote will not be binding, in the event the shareholders fail to ratify the appointment of PwC, the Audit Committee will reconsider its appointment. Even if the appointment is ratified, the Audit Committee, in its discretion, may direct the appointment of a different independent auditing firm at any time during the year if the Audit Committee determines that such a change would be in the best interests of the Company and its shareholders.
20 Energizer Holdings, Inc. 2022 Proxy Statement | |
TABLE OF CONTENTS
| | |
PROPOSAL
2 | |
PROPOSAL
2
| | Ratification of Selection of our Independent Registered Public Accounting
Firm for Fiscal 2020✓2023
| |
| | ✔ The Board recommends a voteFOR this proposal. |
| | |
20 Energizer Holdings, Inc. 2019 Proxy Statement
| |
|
PwC’s aggregate fees for professional services rendered for the indicated fiscal 2018 and 2019, as applicable,years were:
| | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | |
Fees Paid to PwC (in thousands) | | | | FY18 | | | FY19 | |
| | | |
Audit Fees | | | | $ | 3,605 | | | $ | 6,696 | |
| | | |
Audit-Related Fees | | | | $ | 28 | | | $ | 13 | |
| | | |
Tax Fees: | | | | | | | | | | |
| | |
Tax Compliance / Preparation | | $ | 2 | | | $ | 3 | |
| | |
Other Tax Services | | $ | 184 | | | $ | 226 | |
| | | |
Total Tax Fees | | | | $ | 186 | | | $ | 229 | |
| | | |
All Other Fees | | | | $ | 0 | | | $ | 0 | |
| | | |
TOTAL FEES | | | | $ | 3,819 | | | $ | 6,938 | |
| | Audit Fees | | | $5,389 | | | $5,239 | |
| | Audit-Related Fees | | | $13 | | | $13 | |
| | Tax Fees: | | | | | | | |
| | Tax Compliance / Preparation | | | $0 | | | $0 | |
| | Other Tax Services | | | $146 | | | $187 | |
| | Total Tax Fees | | | $146 | | | $187 | |
| | All Other Fees | | | $0 | | | $0 | |
| | TOTAL FEES | | | $5,548 | | | $5,439 | |
Services Provided by PwCSERVICES PROVIDED BY PWCThe table above discloses fees paid to PwC during the last
two fiscal
yearyears for the following professional services:
Audit Fees: These are fees for professional services performed by PwC for the audit of our annual financial statements and review of financial statements included in our Form10-Q filings, and services that are normally provided in connection with statutory and regulatory filings or engagements. Our audit Fees for fiscal 2019 increased significantly in connection with the audit services performed in connection with the Acquisitions.engagements, as well as fees and expenses related to offerings and debt agreements.
Audit-Related Fees: These are fees for assurance and related services performed by PwC that are reasonably related to the performance of the audit or review of our financial statements.
Tax Fees: These are fees for professional services performed by PwC with respect to tax compliance, tax advice and tax planning. This includes preparation of original and amended tax returns for the Company and our consolidated subsidiaries; refund claims; payment planning; and tax audit assistance.
AUDIT COMMITTEE
PRE-APPROVAL POLICY
The Audit Committee has a formal policy concerning approval of all services to be provided by our independent auditor, including audit, audit-related, tax and other services. The policy requires that all services the auditor may provide to us must be
pre-approved by the Audit Committee. The Chair of the Audit Committee has the authority to
pre-approve permitted services that require action between regular Audit Committee
meetings;meetings, provided
that he reports to the Audit Committee at the next regular meeting. Early in each fiscal year, the Audit Committee approves the list of planned audit and
non-audit services to be provided by the auditor during that year, as well as a budget estimating spending for such services for the fiscal year. Any proposed services exceeding the maximum fee levels set forth in that budget must receive specific
pre-approval by the Audit Committee. As applicable, the Audit Committee
pre-approved all fees and services paid by Energizer for fiscal
20192022 and fiscal
2020, to date.2021. | | |
| | Energizer Holdings, Inc. 20192022 Proxy Statement 21
|
TABLE OF CONTENTS
| |
The Audit Committee of the Company’s Board of Directors consists entirely of five, non-employee directors that are independent, as defined in Section 303A.02 ofunder the NYSE Listed Company Manual.listing standards, our Corporate Governance Principles, and applicable SEC rules and regulations. | |
| | | |
| | The Audit Committee is responsible for the duties set forth in its charter, but is not responsible for preparing the financial statements, implementing or assessing internal controls or auditing the financial statements. Management is responsible for the Company’s internal controls and the financial reporting process. The independent accountants are responsible for performing an independent audit of the Company’s consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States) (the “PCAOB”) and issuing a report thereon. The Audit Committee’s responsibility is to monitor and oversee these processes. | |
| | | |
| | As part of its oversight of the Company’s financial statements, the Audit Committee reviews and discusses with both management and the Company’s independent registered public accountants, PricewaterhouseCoopers LLP (“PwC”), all annual and quarterly financial statements prior to their issuance. With respect to the Company’s audited financial statements for the Company’s fiscal year ended September 30, 2019,2022, management of the Company has represented to the Committee that the financial statements were prepared in accordance with generally accepted accounting principles. The Audit Committee has reviewed and discussed those financial statements with management and PwC, including a discussion of critical accounting policies, the quality, not just the acceptability, of the accounting principles followed, the reasonableness of significant judgments reflected in such financial statements and clarity of disclosures in the financial statements. The Audit Committee has also discussed with PwC the matters required to be discussed by the applicable requirements of the PCAOB and the SEC.PCAOB. | |
| | | |
| | In fulfilling its oversight responsibilities for reviewing the services performed by Energizer’s independent registered public accountants, the Audit Committee retains sole authority to select, evaluate and replace the outside auditors, discussdiscusses with the independent registered public accountants the overall scope of the annual audit and the proposed audit fees, and annually evaluates the qualifications, performance and independence of the independent registered public accountants and its lead audit partner. Annually, the Audit Committee oversees a process to assess the performance of the auditor and utilizes the results of that assessment when considering their reappointment. The Audit Committee also annually discusses PwC’s internal quality review process and the PCAOB’s inspection report on PwC, as well as the results of any internal quality reviews or PCAOB inspections of key engagement team members. In accordance with SEC rules, lead audit partners are subject to rotation requirements to limit the number of consecutive years an individual partner may provide service to the Company. For lead and concurring partners, the maximum number of consecutive years of service is five years. The process for selection of the Company’s lead audit partner pursuant to this rotation policy involves a meeting between the Chair of the Audit Committee and the candidate for the role, as well as discussion by the full Committee and with management. | |
| | |
| | The Audit Committee has received the written disclosures from PwC required by the applicable requirements of the PCAOB Rule 3526 (Communication with Audit Committees Concerning Independence),concerning independence, as modified or supplemented, and has discussed the independence of PwC with members of that firm. In doing so, the Committee considered whether the non-audit services provided by PwC were compatible with its independence. In fiscal 2019,2022, the Audit Committee met sevenfive times with the internal auditors and PwC, with and without management present, to discuss the results of their examination, the evaluations of the Company’s internal controls and the overall quality of the Company’s financial reporting. | |
| | | |
| | In addition, the Audit Committee reviewed key initiatives and programs aimed at maintaining the effectiveness of the Company’s internal and disclosure control structure. As part of this process, the Audit Committee continued to monitor the scope and adequacy of the Company’s internal auditing program, reviewing internal audit department staffing levels and steps taken to maintain the effectiveness of internal procedures and controls. | |
| | | |
| | Based on the review and discussions referred to above, the Audit Committee recommended to the Company’s Board of Directors that the audited financial statements for the fiscal year ended September 30, 20192022, be included in the Company’s Annual Report on Form 10-K for that year and has selected PwC as the Company’s independent registered public accountants for fiscal year 2020.2023. | |
| | | |
| | Submitted by the Audit Committee members of the Board: | |
| | | |
| | Bill G. Armstrong John E. Klein
Rebecca D. Frankiewicz
| | | Donal L. Mulligan
| |
| | |
22 Energizer Holdings, Inc. 20192022 Proxy Statement | |
|
TABLE OF CONTENTS
| | PROPOSAL
3 | |
| | |
PROPOSAL
3
| | Advisory Resolution to Approve Executive Compensation (Say on Pay) ✓
| |
| | ✔ The Board recommends a voteFOR this proposal. | |
| | | |
We are providing an advisory vote and seeking
As approved by our shareholders at the 2022 Annual Shareholders’ Meeting, each year we seek the approval of our
executive compensation for fiscal 2019. At our 2016 Annual Shareholders’ Meeting,shareholders in a
majority of shareholders voted to have a Say on Pay vote each year. As a result, we will conduct annon-binding, advisory vote,
onof our executive
compensation annually at least until the next shareholder advisory vote on the frequency of such votes.compensation. Although the Say on Pay vote is advisory and is not binding on our Board,non-binding, our Human Capital Committee takes into considerationvalues the outcomeopinions of our shareholders and considers the results of the most recent Say on Pay vote when making futurein determining our executive compensation policies and making executive compensation decisions.
At the
20192022 Annual Shareholders’ Meeting,
more than 97%approximately 98.3% of the votes
were cast
favoredin favor of our Say on Pay proposal. The Human Capital Committee considered this result,
andas well as input from
various stakeholders,our ongoing shareholder engagement, and in light of the strong support,
maintaineddecided to largely maintain our executive compensation program in fiscal 2022. In fiscal 2022, our Human Capital Committee updated our long-term performance metrics to include relative total shareholder return, aligning executive compensation with investor experience and giving shareholders insight into our shareholder returns relative to a
consistent overall approach for fiscal 2019.relevant group of peers. See “Shareholder Engagement” above.
Our Board believes that the compensation of our executive officers is aligned with
the Company’s performance
and appropriately motivates and retains our executives and is a competitive advantage in attracting and retaining the
executive talent necessary to drive our business forward and build sustainable value for our shareholders. We believe that our current executive compensation program properly aligns the interests of our executive officers with those of our shareholders.
Accordingly, the Board recommends a vote FOR the adoption of the following advisory resolution, which will be presented at the Annual Meeting:
RESOLVED, that the shareholders of the Company approve, on an advisory basis, the compensation of the named executive officers, as disclosed
in the Proxy Statement pursuant to the compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis, the compensation tables and the accompanying footnotes and narratives.
| | |
| | Energizer Holdings, Inc. 2019 Proxy Statement 23
|
Executive Compensation
Compensation Discussion & Analysis
The following Compensation Discussion & Analysis describes the fiscal 2019 compensation program for our named executive officers (“NEOs”). For fiscal 2019, our NEOs were:
Chief Executive Officer
Age: 58
Years at Energizer: 36
President and Chief Operating Officer
Age: 48
Years at Energizer: 9
Executive Vice President and Chief Financial Officer
Age: 59
Years at Energizer: 5
Executive Vice President and Chief Supply Chain Officer
Age: 58
Years at Energizer: 6
Former Vice President and General Counsel(1)
Age: 57
Years at Energizer: 6
(1) | Ms. Boss announced her intention to retire from the Company on November 11, 2019.
|
| | |
24 Energizer Holdings, Inc. 2019 Proxy Statement
| |
|
BUSINESS, STRATEGIC AND FINANCIAL PERFORMANCE
We continued to use free cash flow to return cash to our shareholders
| | | | |
4 | | $300M | | $206M |
| | |
YEARS OF CONTINUED
ORGANIC REVENUE GROWTH(1)
| | RETURNED TO SHAREHOLDERS
THROUGH DIVIDEND PAYMENTS
SINCESPIN-OFF
| | RETURNED TO SHAREHOLDERS
THROUGH SHARE REPURCHASES
SINCE THE YEAR
OF THESPIN-OFF
|
| | | | | | | | | | | | |
| | 1
Lead with Innovation
| | | | 2
Operate
with
Excellence
| | | | 3
Drive Productivity Gains
| | |
| | | | | | | | | | | | |
| | We aim to lead with innovation
supported by smart brand-building
investments to drive long-term
growth and consumer connections
to our products
| | | | We aim to operate with excellence by
focusing on and investing in core category fundamentals such as visibility, distribution and revenue management to drive growth in our brands and create value in our categories
| | | | We aim to drive incremental growth through our global distribution footprint and productivity gains to reduce costs and maximize efficiency to ensure we have adequate reinvestment in our business to deliver future growth
| | |
Fiscal 2019 Pay for Performance Highlights
(1) | Non-GAAP reconciliation can be found in Appendix A.
|
| | |
| | Energizer Holdings, Inc. 2019 Proxy Statement 25
|
2019 EXECUTIVE COMPENSATION HIGHLIGHTS
Our compensation philosophy is to pay for performance over the long term, as well as on an annual basis. Our executive compensation program provides a mix of salary, incentives, and benefits paid over time to align executive officer and shareholder interests. We consider our executive pay program to be instrumental in helping us achieve our business objectives and effective in rewarding our executive officers for their role in achieving strong financial and operational performance. The Human Capital Committee has primary responsibility for approving our compensation strategy and philosophy and the compensation programs applicable to our executive officers.
| | |
Double-Trigger | | We plan to adopt double-trigger equity vesting upon a change of control for all future awards on the approval of our Omnibus Incentive Plan (See Proposal 4).
|
Revised Metrics, Post-
Acquisitions | | In connection with our acquisitions, targets for fiscal 2019 short-term incentive awards and for two existing grants of long-term incentive awards were revised to reflect our operating plan and growth expectations. These aggressive profitability targets were expected to be achieved while continuing to make strategic investments in brand development, innovation and research and development.
|
Equity Issuances | | In January 2019, we issued:
• 5.3 million shares of common stock to Spectrum in connection with the acquisition of the global auto care business
• 4.7 million shares of common stock in a public offering
• 2.2 million shares of Series A Mandatory Convertible Preferred Stock that will convert automatically on the mandatory conversion date, which is expected to be January 15, 2022, into between 1.7892 and 2.1739 shares of common stock, per share of preferred stock, subject to certain anti-dilution and other adjustments
The stock issuances had an impact on our Cumulative Adjusted Earnings per Share metric which is one of the metrics for our performance-based equity awards. Additional information on our equity issuances can be found in our filings with the SEC.
|
RESPONSIVENESS TO 2019 SAY ON PAY VOTE
We conduct shareholder engagement throughout the year and provide shareholders with an opportunity to cast an annual, advisory Say on Pay vote. Our historical Say on Pay results influenced our decision to maintain a consistent approach to our executive compensation program for fiscal 2019. Last year, our shareholders overwhelmingly approved our executive compensation. The Human Capital Committee will continue to consider shareholder feedback and the outcome of Say on Pay vote results in making future compensation decisions.
Shareholder feedback influenced the Human Capital Committee’s decision to adopt double-trigger equity vesting upon a change of control for all future awards on the approval of our Omnibus Incentive Plan.
| | |
26 Energizer Holdings, Inc. 2019 Proxy Statement
| |
|
PAY FOR PERFORMANCE AND COMPENSATION PHILOSOPHY
| | |
WHAT WE DO | | WHAT WE DON’T DO |
✓ Pay for performance, with approximately 60% of our executive officers’ total compensation performance-based
✓ Establish threshold, target and maximum awards under our annual and long-term incentive programs
✓ Use balanced performance metrics for annual and long-term incentive programs
✓ Use rigorous goal setting aligned to our externally disclosed annual and multi-year targets
✓ Have stock ownership requirementsfor our executive officers
✓ Limit perquisitesto items that serve a reasonable business purpose
✓ Closely monitor risksassociated with our compensation programs and individual compensation decisions
✓ Have a clawback policy for all incentive compensation earned by our executive officers
| | ×Pay taxgross-ups on any compensation
× Allow speculative trading, hedging or pledging transactions by our colleagues
× Enter into employment agreements with our executive officers
× Provide executive officer severance payments and benefits exceeding 2x salary and annual incentive award
×Guarantee salary increases
|
The Human Capital Committee allocates pay in a manner designed to place performance at the forefront of our overall executive compensation program. Our focus on pay for performance is best demonstrated through the structure of our executive compensation program where the majority of executive pay is at risk and subject to annual and long-term performance requirements.
| | |
| | Energizer Holdings, Inc. 2019 Proxy Statement 27
|
The following chart, prepared by our independent compensation consultant, shows the degree of alignment between the total realizable pay of our CEO and Energizer’s total shareholder return relative to our compensation peer group over the three-year period. Peer group companies are indicated by the blue diamonds in the chart. Companies that fall within the diagonal alignment zone are generally viewed as having pay and performance alignment. As illustrated below, our CEO’s realizable pay was aligned with Energizer’s performance.
Compensation Philosophy
The philosophy underlying our executive compensation program is to pay compensation that is simple, aligned and balanced. Equally important, we view compensation practices as a means for communicating our goals and standards of conduct and performance, and for motivating and rewarding colleagues in relation to their achievements. Overall, the same principles that govern the compensation of all our salaried colleagues apply to the compensation of our executive officers. Within this framework, we observe the following, guiding principles:
| | | | | | | | |
| | What We Believe
| | | | What We’ve Done
| | |
| | | | |
Simple | | Compensation methods should be transparent, provide a clear link between performance metrics and Company strategy and minimize perquisites
| | | | • Used straightforward annual and long-term incentive plan metrics that are directly tied to business performance
• Froze pension accruals
• Limited the use of all perquisites (<.001% of total compensation for executive officers in fiscal 2019)
| | |
| | | | |
Aligned | | The interests of our executive officers should be aligned with those of our shareholders
| | | | • Provided approximately 58% of our executive officers’ total compensation as performance-based pay
• Adopted a clawback policy, anti-hedging and pledging policy and stock ownership requirements
| | |
| | | | |
Balanced | | Components of compensation should complement each other and offset risk of overemphasis on any one metric or time period
| | | | • Used a combination of pay elements that reward achievement of objectives across annual and long-term time periods
• Balanced annual and long-term incentive plans to drive results in the short term without sacrificing long-term value creation
| | |
| | |
28 Energizer Holdings, Inc. 2019 Proxy Statement
| |
|
Fiscal 2019 Pay Components
Our fiscal 2019 pay components remained the same as fiscal 2018.
| | | | |
Description
| | Driving Shareholder Value
| | How it Pays
|
Base Salary
|
Determined based on job scope,
experience, market comparable
positions and operating results
| | Provides fixed income to
attract and retain top talent
| | Semi-monthly cash payment
through fiscal 2019
|
Annual Incentive Program
|
Provides short-term variable
pay for performance
| | Motivates executives to achieve the
Company’s annual strategic and
financial goals
| | Single cash payment in
November 2019
|
Long-Term Incentive Program
|
We use two programs to ensure a strong link between incentive compensation opportunities and longer-term objectives:
|
Restricted stock awards that
vest only on achievement of
pre-determined performance targets
with a three-year vesting period
Represents 70% of equity award
| | Rewards achievement of long-term
growth goals and creation of
shareholder value
| | Vests upon the achievement of
specific metrics over three-year
performance period
|
Time-based stock awards that
track stock price performance
over a three-year vesting period
Represents 30% of equity award
| | Promotes long-term retention and
supports stock ownership and
alignment with shareholders
| | Vests upon the three-year
anniversary of grant date
|
Retirement and Other Benefit Plans
|
Retirement and other benefit plans
sponsored by the Company on the
same terms and conditions applicable
to all eligible colleagues
| | Provide retirement and other
benefits to attract and retain
top talent
| | In accordance with the
terms of the plans
|
Annual Compensation-Related Risk Evaluation
We monitor the risks associated with our compensation program on an ongoing basis. Our compensation risk assessment occurs in two parts: a review of the Company’s compensation programs and a review of compensation decisions and payments, with a focus on our executive officers. In October 2019, with input from the Human Capital Committee’s independent compensation consultant, the Human Capital Committee conducted a review of our compensation programs, including the executive compensation program, to assess the risks arising from our compensation policies and practices. The Human Capital Committee agreed with the review’s findings that these risks were within our ability to effectively monitor and manage and that these compensation programs do not encourage unnecessary or excessive risk-taking and do not create risks that are reasonably likely to have a material adverse effect on the Company. In particular, the Human Capital Committee determined that the following design features reduce the risk within our compensation policies and practices:
Compensation program design provides a balanced mix of cash and equity, annual and longer-term incentives
Maximum payout levels for bonuses and performance awards are capped
Multiple performance metrics are used to determine payouts under the annual and long-term incentive programs
Executive officers are subject to stock ownership and retention guidelines
The Company has adopted anti-hedging and anti-pledging policies
The Company has adopted a clawback policy related to incentive compensation earned by our executive officers
| | |
| | Energizer Holdings, Inc. 2019 Proxy Statement 29
|
Share Ownership Requirements
Our stock ownership and retention requirements align executive officer and shareholder interests by linking the value realized from equity-based awards to sustainable Company performance. Beginning with awards granted in fiscal 2015, our Corporate Governance Principles require our NEOs to meet the following stock ownership requirements:
| | | | | |
| | Stock Ownership Requirements
|
Chief Executive Officer
| | 5x base salary
|
All Other Executive Officers
| | 3x base salary
|
Newly appointed executive officers are required to retain at least fifty percent (50%) of vesting restricted stock until they become compliant and are given a period of five years to attain full compliance with the requirements. For purposes of this determination, stock ownership includes shares of our common stock which are owned directly or by family members residing with the executive officer or by family trusts, as well as vested options, vested and deferred restricted stock equivalents and unvested restricted stock equivalents (other than stock equivalents subject to achievement of performance targets). As of September 30, 2019, each of our executive officers was in compliance with the requirements.
Hedging and Pledging Prohibition
Under our securities trading policy, directors, officers and colleagues or their designees are prohibited from engaging in speculative trading, hedging or pledging transactions in Energizer securities, including prohibitions on:
investing or trading in market-traded options on Energizer securities—i.e., puts and calls;
purchasing financial instruments (including prepaid variable forward contracts, equity swaps, collars, and exchange funds) that are designed to profit from, hedge or offset any change in the market value of equity securities (1) granted to the director, officer or colleague by Energizer as part of the compensation of the colleagues or member of the Board of Directors; or (2) held, directly or indirectly, by the director, officer or colleague;
purchasing Energizer securities on margin, pledging Energizer securities, or holding Energizer securities in margin accounts;
engaging in “short-sales” of Energizer securities—i.e., selling Energizer stock not owned at the time of the sale; and
speculating on relatively short-term price movements of Energizer securities—i.e., engage in a purchase and sale of Energizer stock within a short period of time.
The policy prohibits the transfer of funds into or out of Energizer stock equivalent funds in Energizer’s benefit plans while in possession or aware of materialnon-public information, or engaging in any other transaction involving Energizer securities, including pledging, that suggests the misuse of information that is unavailable to the general public.
HOW WE DETERMINE COMPENSATION
Pay Evaluation and Decision Process
Each year, the Human Capital Committee, comprised entirely of independent directors, reviews our executive officers’ performance using a balanced and disciplined approach to determine their base salaries and variable compensation awards. The approach for fiscal 2019 included a full-year assessment of financial results and progress delivering on our three strategic priorities: Lead with Innovation, Operate with Excellence and Drive Productivity.
The Human Capital Committee considers various factors that collectively indicate successful management of our business, including:
Company performance, including financial andnon-financial measures
The manner in which results are achieved, adherence to risk policies, and the quality of earnings
Year-over-year performance
Company performance relative to our executive compensation peer group
| | |
30 Energizer Holdings, Inc. 2019 Proxy Statement
| |
|
Role of Independent Compensation Consultant
To help determine executive pay, the Human Capital Committee retains an independent compensation consultant, Mercer LLC, for advice regarding the general competitive landscape and trends in executive compensation. While the Human Capital Committee meets with the consultant from time to time, the Chair of the Human Capital Committee also communicates directly with the consultant between Human Capital Committee meetings. The independent compensation consultant advises the Human Capital Committee on several matters, including (1) competitive analysis (including in relation to our peer group), (2) incentive plan design, (3) updates on trends in executive and director compensation, (4) peer group composition, and (5) other compensation-related matters as requested by the Human Capital Committee.
The Human Capital Committee annually reviews the independence of Mercer LLC in light of SEC rules and NYSE Listed Company Rules regarding compensation consultant independence and has affirmatively concluded that Mercer has no conflicts of interest relating to its engagement by the Human Capital Committee.
During fiscal 2019, the aggregate fees paid to Mercer LLC for services related to executive compensation were approximately $200,209. In fiscal 2019, Mercer LLC and its Marsh & McLennan affiliates were also retained by our management to provide services unrelated to executive compensation, including providing advice regarding our global pension programs in the areas of compliance, administration and funding and global compensation consulting, benchmarking below the executive officer level and insurance. The aggregate fees paid for those other services in fiscal 2019 were approximately $1,366,902. The Human Capital Committee and the Board of Directors did not review or approve the other services provided to management by Mercer LLC and its Marsh & McLennan affiliates, as those services were approved by our management in the normal course of business. We have been advised by Mercer LLC that the reporting relationship and compensation of the Mercer LLC consultants who perform executive compensation consulting services for the Human Capital Committee is separate from, and is not determined by reference to, Mercer LLC’s or Marsh & McLennan’s other lines of business or their other work for us. A representative of Mercer LLC attends committee meetings and serves as a resource to the Human Capital Committee on executive and director compensation matters. Additionally, to encourage independent review and discussion of executive compensation matters, the committee meets with Mercer LLC in executive session.
The Human Capital Committee also reviews the performance of Mercer, LLC.
Executive Compensation Peer Group
The Human Capital Committee selects the members of our peer group and periodically examines whether peers continue to meet the criteria for inclusion described below. As part of this process, the Human Capital Committee receives advice from its independent compensation consultant and selects a peer group that includes companies that have the following characteristics:
US-based, publicly traded consumer packaged goods company with “brand identity”
Similar number of employees
For fiscal 2019, based on these criteria and the advice of its independent compensation consultant, the Human Capital Committee determined that the 2018 peer group remained appropriate with no revisions.
| | | | |
Household Products | | Personal Care | | Food and Beverage |
The Clorox Company
Spectrum Brands Holdings, Inc.
Hasbro Inc.
Central Garden & Pet Co.
The ScottsMiracle-Gro Company
Tupperware Brands Corporation
| | Church & Dwight Inc.
Revlon, Inc.
Helen of Troy Ltd.
| | Lancaster Colony Corporation
Hain Celestial Group, Inc.
Monster Beverage Corporation
Post Holdings, Inc.
|
| | |
| | Energizer Holdings, Inc. 2019 Proxy Statement 31
|
Total Compensation
The Human Capital Committee targets total compensation near the 50th percentile of our peer group’s total compensation. The following table shows how we compared to our peer group companies based on revenue for the most recently reported fiscal year and number of employees as of September 2019.
| | | | | | | | | | |
| | | Company Revenue (in millions) | | Employees |
75th Percentile | | 4,363 | | 9,450 |
50th Percentile | | 3,156 | | 5,600 |
25th Percentile | | 2,186 | | 3,950 |
Energizer | | 2,495 | | 7,500 |
CEO Assessment, Compensation Process for Executive Officers and Annual Timeline
CEO Assessment
With respect to our Chief Executive Officer’s pay, the Human Capital Committee conducts an annual performance assessment of the Chief Executive Officer and determines appropriate adjustments to all elements of his pay based on the following factors:
| | | | |
Individual Performance
| | Company Performance
| | Market Practices
|
Analysis of the Chief Executive Officer’s performance against performance goals approved by the Human Capital
Committee, the effectiveness of his
leadership, and his experience
| | Returns to shareholders
| | As provided by the independent compensation consultant
|
Compensation Process for Executive Officers
For the other executive officers, the Chief Executive Officer makes recommendations to the Human Capital Committee for all elements of pay. These recommendations are based on an assessment of the individual’s roles, responsibilities, experience and individual performance. The Human Capital Committee also obtains market data from its independent compensation consultant and then reviews, discusses, modifies, and approves these recommendations, as appropriate.
Annual Timeline
The diagram below summarizes the Human Capital Committee’s annual process for setting executive pay.
| | | | | | | | |
Fall
• Annual CEO performance assessment
• Annual update on Annual and Long-Term Incentive Program metrics and performance
• Review of executive compensation and regulatory environment trends
• Approve executive pay
• Review compensation risk assessment
• Approve compensation plan
| | 
| | Winter
• Quarterly review of CEO performance assessment
• Quarterly update on Annual and Long-Term Incentive Program metrics and performance
• Planning for annual compensation risk assessment and approach
• Review of compensation guidelines of institutional shareholders and proxy advisors
• Annual review of Change of Control benefits
| | 
| | Spring and Summer
• Quarterly review of CEO performance assessment
• Quarterly update on Annual and Long-Term Incentive Program metrics and performance
• Executive Compensation peer group analysis
|
| | |
32 Energizer Holdings, Inc. 2019 Proxy Statement
| |
|
ELEMENTS OF COMPENSATION
|
Primary Elements of our Executive Compensation Program
• Base Salary
• Annual Incentive Program
• Long-Term Incentive Program
– Performance Share Awards
– Time-Based Restricted Share Awards
• Retirement and Other Benefits
|
The Human Capital Committee believes these pay components align the interests of our executives with those of our shareholders by basing a significant portion of total pay on performance and achievement of our short- and long-term goals. The specific mix among the individual components reflects market comparisons (primarily with respect to the median of our peer group) and individual position and performance.
Base Salary
The general guideline for determining salary levels for our executive officers, including the Chief Executive Officer, is to target the 50th percentile of our executive compensation peer group, adjusted for other factors such as individual performance and responsibilities. While we are cognizant of the competitive range, our primary goal is to compensate our executive officers at a level that best achieves our compensation philosophy, even if this results in actual pay for some positions that may be higher or lower than the market median. The Human Capital Committee considers adjustments to base salaries for the executive officers on an annual basis. For fiscal 2019, the Human Capital Committee felt that an increase to the base salaries of our executive officers in line with the increases provided to our colleagues generally was reasonable in light of the Company’s operating results in fiscal 2019. To remain competitive with the market, the Human Capital Committee also considered the effect of such increased salaries for our executive officers in relation to the median of our peer group.
The table below sets forth the base salaries for our NEOs. The base salary adjustments for fiscal 2019 were effective December 1, 2018.
| | | | | | | | | | | | | | | |
| | | Base Salary Levels for 2018 and 2019 and % Change |
| | | |
| | | 2018 | | 2019 | | Increase (%) |
| | | |
A.R. Hoskins | | | $ | 1,000,000 | | | | $ | 1,030,000 | | | 3% | |
| | | |
M.S. LaVigne | | | $ | 573,682 | | | | $ | 590,892 | | | 3% | |
| | | |
T.W. Gorman | | | $ | 520,000 | | | | $ | 561,600 | | | 8% | |
| | | |
G.T. Kinder | | | $ | 452,067 | | | | $ | 465,629 | | | 3% | |
| | | |
E.K. Boss | | | $ | 443,477 | | | | $ | 456,781 | | | 3% | |
The Human Capital Committee increased Mr. Gorman’s salary to keep it competitive with market median data.
| | |
| | Energizer Holdings, Inc. 2019 Proxy Statement 33
|
Annual Incentive Program
The overall design of our fiscal 2019 annual incentive program was the same as the fiscal 2018 program. The annual incentive program is based on performance against certain metrics determined by the Human Capital Committee. Our fiscal 2019 annual incentive award was designed to measure performance against the four metrics set forth in the table below:
| | | | | | | | | | | | |
| | | | | | |
| | | Driving Shareholder Value | | Weighting | | Threshold (50% of
Bonus
Target) | | Target (100% of
Bonus
Target) | | Stretch (200% of
Bonus
Target) | | Actual
Achievement |
| | | | | | |
Adjusted Net Sales | | Net Sales measures revenue and encourages development of consumer-relevant innovation andin-store execution to drive product sales | | 25% | | $2,428 | | $2,556 | | $2,683 | | $2,512.1 |
| | | | | | |
Adjusted Selling, General & Administrative (SG&A) Expense as a Percentage of Net Sales | | This metric measures the overhead costs that we incur as a percentage of sales and encourages expense management | | 25% | | 18.5% | | 17.5% | | 16.5% | | 17.4% |
| | | | | | |
Adjusted Operating Profit | | Operating profit measures underlying business profit and encourages selling products, generating strong gross margins and maintaining tight cost controls | | 25% | | $385 | | $428 | | $471 | | $423.1 |
| | | | | | |
Adjusted Free Cash Flow | | Free cash flow measures the cash generated by our Company; the metric encourages execution of sales goals and expense targets as well as prudent management of capital expenditures and working capital | | 25% | | $200 | | $222 | | $245 | | $256.2 |
Adjustments to the actual achievement metrics vary from reported figures to address the impacts of currency and accounting reclassifications from the adoption of ASU2017-12,Targeted Improvements to Accounting for Hedging Activities.
Our Human Capital Committee exercised negative discretion to reduce our actual performance of Adjusted Operating Profit to remove the positive effect of certain accounting reclassifications. The impact of the exercise of negative discretion impacted the Operating Profit negatively by $8.4 million.
Our Human Capital Committee addressed the impacts of currency to the Net Sales and Operating Profit metrics. The adjustment increased the Operating Profit metric by $4.6 million and the Net Sales metric by $17.6 million.
Each metric for the annual incentive plan was subject to adjustment for certain limited matters, including the effects of acquisitions, divestitures or recapitalizations, extraordinary transactions such as mergers or spin-offs, unusual ornon-recurringnon-cash accounting impacts, and variations in the exchange rate between foreign currencies and budget exchange rates.
Bonuses increase proportionately in 1/10th of 1% increments for final results between the goals indicated with maximum bonus at stretch. No bonuses tied to performance are paid for results below the Threshold goal. The maximum bonus payout is capped at 200% for Company performance at, or above, the Stretch goal.
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34 Energizer Holdings, Inc. 2019 Proxy Statement
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The performance goals for each metric were set at the beginning of the fiscal year and subsequently revised after the Acquisitions. Each executive officer was assigned individual bonus targets based on individual performance and market practice information provided by the independent compensation consultant. For fiscal 2019, the following bonus targets, defined as a percentage of the individual’s base pay, were assigned as follows:
| | | | | |
| |
| | Bonus Target |
| |
A.R. Hoskins
| | 115% |
| |
M.S. LaVigne
| | 80% |
| |
T.W. Gorman
| | 75% |
| |
G.T. Kinder
| | 60% |
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E.K. Boss
| | 60% |
Long-Term Incentive Program
Our 2015 Plan authorizes the Human Capital Committee to grant various types of equity awards. The Human Capital Committee grants to key executives primarily restricted stock equivalent awards, with achievement of Company performance targets over three years as a condition to vesting of the majority of the award, and continued employment with the Company over the same period as a condition to vesting of the remainder of the award. See “Potential Payments Upon Termination or Change of Control”. In November 2018, the Human Capital Committee awarded three-year incentive awards with a performance-based component constituting approximately 70% of the restricted stock equivalents vesting at target achievement and a time-based component constituting approximately 30% of the award value at target of the award.
Timing and Procedures for Grants in Fiscal 2019
Other than in exceptional cases, such as promotions or new hires, long-term incentive awards are granted in the first quarter of the fiscal year (October through December), at the time when salary levels and bonus programs for the new fiscal year are also determined.
The size of equity awards granted in November 2018 for our executive officers was based on several factors, including officers’ individual performance, current dilution rates, marketrun-rate for equity grants among our peer group, and benchmark data from our peer group provided by our independent compensation consultant.
Time-Based Restricted Stock Units
The number of restricted stock equivalents awarded in November 2018 was based on the corresponding grant date value of the restricted stock equivalents. The restricted stock equivalent awards are stock-settled at the end of the three-year period, when they convert into unrestricted shares of our common stock if and to the extent that the vesting requirements are met. The number of restricted stock equivalents granted to each executive officer is shown in the “Grants of Plan-Based Awards Table”.
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| | Energizer Holdings, Inc. 2019 Proxy Statement 35
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Long-Term Performance Awards
In November 2018, the Human Capital Committee granted long-term equity incentive awards to our executive officers. These awards potentially vest in November 2021 based on the achievement of the two performance metrics set forth in the table below.
| | | | | | | | | | |
| | | | | |
| | | Driving Shareholder Value | | Weighting | | Threshold (50% of
Target) | | Target (100% of
Target) | | Stretch (200% of
Target) |
| | | | | |
| Cumulative Adjusted Earnings per Share | | Aligns executive officers with shareholders through a shared focus on the earnings that accrue to a shareholder in our stock | | 50% | | $9.35 | | $10.39 | | $11.43 |
| | | | | |
| Cumulative Adjusted Free Cash Flow | | Measures free cash flow relative to net sales, encouraging a sustained focus on maximizing cash flow over the long term | | 50% | | 10.3% | | 11.3% | | 12.3% |
The Human Capital Committee adopted performance metrics that usenon-GAAP financial measures, which exclude certain items that the Human Capital Committee believes are not reflective of the Company’s ongoing operating performance, such as costs related to acquisition and integration costs, and gain on sale of real estate. The Human Capital Committee believes these performance metrics more accurately reflect Energizer’s underlying financial and operating results.
Each metric for the long-term incentive program is subject to adjustment for certain limited matters, including the effects of acquisitions, divestitures or recapitalizations, extraordinary transactions such as mergers or spin-offs, unusual ornon-recurringnon-cash accounting impacts, and variations in the exchange rate between foreign currencies and budget exchange rates.
The number of units granted to each NEO is shown in the “Grants of Plan-Based Awards Table”. No vesting of performance based long-term incentive awards occurs for results below the Threshold goal, and the maximum bonus payout is capped at 200% for Company performance at, or above, Stretch performance.
Long-Term Shareholder Value
Over the past three years, we believe we have provided significant value to our shareholders. These results we achieved for our shareholders are consistent with the results obtained under our incentive plans. Similarly, the performance measures associated with those long-term performance incentive awards that were granted in 2016 were measured over a three-year vesting period and were tied to cumulative adjusted earnings per share and cumulative adjusted free cash flow as a percentage of adjusted net sales. The Company had outstanding results over the three-year vesting period. Based on these results, the long-term performance incentive grants paid out at 200% of target during fiscal 2019.
Executive Savings Investment Plan
On July 1, 2015, we adopted an executive savings investment plan, our excess 401(k) plan, in which certain executive officers, including our NEOs, participate. Under the plan, amounts that would be contributed, either by an executive or by the Company on the executive’s behalf, to the Company’s qualified defined contribution plan (the “401(k) plan”) but for limitations imposed by the IRS, will be credited to thenon-qualified defined contribution executive savings investment plan. Details of the executive savings investment plan, including the contributions, earnings, andyear-end balances, are set forth in the “Non-Qualified Deferred Compensation Table”.
In fiscal 2017, we adopted an amendment to the Executive Savings Investment Plan, aligning this plan with the terms of our 401(k) plan by revising the four-year vesting schedule to immediate vesting of the Company match. This amendment, effective January 1, 2018, aligns the plan with market practice, facilitates ease in integrating plans in the event of a merger or acquisition, and reduces compliance requirements.
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36 Energizer Holdings, Inc. 2019 Proxy Statement
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Deferred Compensation Plan
Our colleagues do not have the opportunity to defer portions of their salary and bonus compensation under the terms of our deferred compensation plan, or to invest in the Energizer common stock unit fund within the deferred compensation plan. However, certain executives who were employed at our former parent company prior to theSpin-Off had their account balances under our former parent company’s deferred compensation plan transferred to our deferred compensation plan. Only Mr. Hoskins and Mr. LaVigne have benefits under the terms of our deferred compensation plan. Details of the deferred compensation program, including the contributions, earnings, andyear-end balances, are set forth in the “Non-Qualified Deferred Compensation Table”.
Pension Benefits
Energizer established a new retirement plan that acquired the assets and assumed the liabilities of our former parent’s plans in connection with theSpin-Off. Prior to January 1, 2014, our former parent company’s retirement plan covered essentially all U.S. colleagues of Energizer after they became eligible. Pension benefits are provided under a tax qualified defined benefit plan (the “Energizer Holdings, Inc. Retirement Plan”) that is subject to maximum pay and benefit limits under the tax rules. Pension benefits are also provided under a pension restoration plan (the “Supplemental Executive Retirement Plan”) that provides a supplement to an executive’s pension benefit equal to the amount that the executive would have received but for the tax limitations. Mr. Hoskins, Mr. LaVigne, Mr. Kinder and Ms. Boss have pension benefits. Details of pension benefits under the Supplemental Executive Retirement Plan are set forth in the “Pension Benefits Table,” including the accompanying narrative. As of December 31, 2013, which is the end of the first quarter of our former parent company’s fiscal 2014, the plans were frozen and future retirement service benefits are no longer accrued under this retirement program. The freeze includes both the qualified andnon-qualified plans.
The Retirement Accumulation Account that was effective from January 1, 2010 to December 31, 2013, included the future retirement benefits of the participants in our former parent company’s qualified defined benefit pension plan, including the NEOs, which were determined in accordance with a retirement accumulation formula. The participants received monthly credits equal to 6% of their eligible benefit earnings for each month, which amounts were credited with monthly interest equal to the30-year Treasury rate that is reset annually. Certain older, longer-tenured participants, including the NEOs with age and years of service totaling at least 60 but not more than 74 as of December 31, 2009 received an additional monthly credit equal to 2% of eligible benefit earnings. Participants receive credit for years of service with our former parent company. Other older, longer-tenured participants with age and years of service totaling 75 or more as of December 31, 2009 received an additional monthly credit equal to 4% of their eligible benefit earnings. These transition credits were available to eligible plan participants through 2013 (or, if earlier, their termination of employment with the Company).
The defined benefit plan has used the following other benefit calculation formulas, all of which have been frozen as of the end of calendar year 2009:
Pension Equity Plan (“PEP”) benefit formula. Under PEP, an executive is entitled to a benefit (payable in lump sum or as a monthly annuity) based on five-year average annual earnings, which were multiplied by “pension equity credits” earned with years of service. The benefit was subject to a three-year vesting period. PEP was applied to Mr. Hoskins.
PensionPlus Match Account (“PPMA”). The PPMA generally provided a 325% match under our retirement plan to those participants who made anafter-tax contribution of 1% of their annual earnings to our 401(k) plan. To the extent an officer’s PPMA benefit was unavailable due to the IRC limits, the benefit was restored under our excess savings investment plan and not the pension restoration plan for executives. The benefit was generally subject to a three-year vesting requirement. The PPMA benefit was available through the end of the calendar year 2009 for Mr. Hoskins.
Perquisites
We offer a limited number of perquisites for our executive officers. The primary perquisite or executive benefit consists of the executive financial planning program, which provides reimbursement for 80% of the costs incurred for qualifying financial planning, legal, and tax preparation services up to a maximum of $8,000 in the first calendar year the executive is employed by the Company and $6,000 in subsequent calendar years. This benefit partially offsets costs incurred by our executive officers in connection with their regulatory compliance obligations as public company executives. We regularly review the benefits provided to our executives and make appropriate modifications based on peer group analysis and the Human Capital Committee’s evaluation of the retentive value of these benefits.
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| | Energizer Holdings, Inc. 2019 Proxy Statement 37
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Severance and Other Benefits Following a Change of Control
We have not entered into employment agreements with our executives. However, the Human Capital Committee approved an executive severance plan and change of control agreements for each of our executive officers, as discussed under “PotentialPayments upon Termination or Change of Control” to align with the market practice of usingpre-defined termination programs for NEOs.
The change of control agreements are designed to provide executives with increased security in the event of a change of control. The Human Capital Committee annually reviews the cost and the terms of the agreements with input provided by Mercer LLC. We believe that the retention value provided by the agreements, and the benefit to us when the executive is provided the opportunity to focus on the interests of shareholders and not the executive’s own personal financial interests, outweighs the potential cost, given that:
such protections are common among companies of our size, and allow us to offer a competitive compensation package;
such costs will be triggered only if the new controlling entity involuntarily terminates the impacted executives, or the executives resign for good reason, during the protected period;
the agreements includenon-compete andnon-solicitation covenants binding on the executives, which can provide significant considerations to completion of a potential transaction; and
the individuals who have agreements are carefully selected by the Board of Directors, and we believe these executives are critical to the process of evaluating or negotiating a potential change of control transaction or in the operation of our business during the negotiations or integration process, so that their retention would be critical to the success of any such transaction.
We do not permit taxgross-up payments relating to severance payments for change of control employment agreements entered into with our executive officers.
A description of the projected cost, if a change of control were to have occurred on the last day of fiscal 2019 and all of the NEOs were terminated on that date, is provided under “Potential Payments upon Termination or Change of Control”.
PAY PRACTICES AND POLICES
Tax Deductibility of Compensation
Prior to 2018, a public company was limited by the Internal Revenue Code to a $1 million deduction for compensation paid to its Chief Executive Officer or any of its three other most highly compensated executive officers (other than the Chief Financial Officer) who were employed atyear-end. This limitation did not apply to compensation that met the tax code requirements for qualifying performance-based compensation. Changes in tax law effective January 1, 2018 limit a public company’s deductions to $1 million for compensation paid to its Chief Executive Officer, Chief Financial Officer, and each of its three other most highly compensated executive officers, as well as to any individual who was subject to the $1 million deduction limitation in 2017 or any later year.
Under the revised law, there is no exception for qualifying performance-based compensation unless it is pursuant to a written binding contract in effect as of November 2, 2017. Certain incentive awards made on or prior to November 2, 2017 may satisfy the requirements for deductible compensation. The Human Capital Committee’s policy is to maximize the tax deductibility of executive compensation without compromising the essential framework of the existing total compensation program. The Human Capital Committee continues to retain the discretion to make awards and pay amounts that do not qualify as deductible.
Clawback Policy
Under our annual incentive awards and long-term incentive awards, in the event of a restatement of financial results to correct a material error, the Human Capital Committee is authorized to reduce or recoup an executive officer’s award, as applicable, to the extent that the Human Capital Committee determines such executive officer’s misconduct was a significant contributing factor to the need for a restatement.
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38 Energizer Holdings, Inc. 2019 Proxy Statement
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HUMAN CAPITAL COMMITTEE REPORT
The Human Capital Committee reviewed and discussed the Compensation Discussion and Analysis with management. Based on this review and discussion, the Human Capital Committee recommended to the Board that the Compensation Discussion and Analysis be included in the proxy statement and incorporated by reference into the Annual Report on Form10-K for the year ended September 30, 2019.
Submitted by the Human Capital Committee members of the Board:
Cynthia J. Brinkley — Chair
Bill G. Armstrong
Kevin J. Hunt
Nneka Rimmer
EXECUTIVE COMPENSATION TABLES
SUMMARY COMPENSATION TABLE
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| | | | | | | | | | | | | | | | | | | |
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| | | | | | | | | | |
| Name and Principal Position | | Fiscal
Year | | Base
Salary | | Bonus | | Stock
Awards (1) | | Option
Awards | | Non-Equity
Incentive
Plan
Comp. (2) | | Change in
Pension Value
and Nonqualified
Deferred
Comp. Earnings (3) | | All Other
Compensation
(4) | | Total |
Alan R. Hoskins | | | | 2019 | | | | $ | 1,025,000 | | | | $ | 0 | | | | $ | 4,120,076 | | | | $ | 0 | | | | $ | 1,439,530 | | | | $ | 72,162 | | | | $ | 158,150 | | | | $ | 6,814,918 | |
Chief Executive Officer | | | | 2018 | | | | $ | 994,167 | | | | $ | 0 | | | | $ | 4,000,056 | | | | $ | 0 | | | | $ | 1,510,837 | | | | $ | 65,680 | | | | $ | 164,495 | | | | $ | 6,735,235 | |
| | | | 2017 | | | | $ | 961,833 | | | | $ | 0 | | | | $ | 3,860,069 | | | | $ | 0 | | | | $ | 1,647,424 | | | | $ | 41,918 | | | | $ | 159,629 | | | | $ | 6,670,873 | |
Mark S. LaVigne | | | | 2019 | | | | $ | 588,024 | | | | $ | 0 | | | | $ | 1,320,077 | | | | $ | 0 | | | | $ | 574,492 | | | | $ | 5,023 | | | | $ | 77,494 | | | | $ | 2,565,110 | |
President & | | | | 2018 | | | | $ | 570,897 | | | | $ | 0 | | | | $ | 1,320,033 | | | | $ | 0 | | | | $ | 603,545 | | | | $ | 4,549 | | | | $ | 79,942 | | | | $ | 2,578,966 | |
Chief Operating Officer | | | | 2017 | | | | $ | 555,621 | | | | $ | 0 | | | | $ | 1,312,526 | | | | $ | 0 | | | | $ | 661,461 | | | | $ | 3,485 | | | | $ | 83,761 | | | | $ | 2,616,854 | |
Timothy W. Gorman | | | | 2019 | | | | $ | 554,667 | | | | $ | 0 | | | | $ | 1,000,090 | | | | $ | 0 | | | | $ | 508,024 | | | | $ | 0 | | | | $ | 76,837 | | | | $ | 2,139,618 | |
Chief Financial Officer | | | | 2018 | | | | $ | 520,000 | | | | $ | 0 | | | | $ | 850,054 | | | | $ | 0 | | | | $ | 755,385 | | | | $ | 0 | | | | $ | 50,336 | | | | $ | 2,175,775 | |
| | | | 2017 | | | | $ | 341,342 | | | | $ | 0 | | | | $ | 275,008 | | | | $ | 0 | | | | $ | 318,940 | | | | $ | 0 | | | | $ | 38,306 | | | | $ | 973,596 | |
Gregory T. Kinder | | | | 2019 | | | | $ | 463,369 | | | | $ | 0 | | | | $ | 875,011 | | | | $ | 0 | | | | $ | 339,529 | | | | $ | 1,023 | | | | $ | 61,204 | | | | $ | 1,740,136 | |
Chief Supply Chain Officer | | | | 2018 | | | | $ | 449,873 | | | | $ | 0 | | | | $ | 875,027 | | | | $ | 0 | | | | $ | 356,699 | | | | $ | 926 | | | | $ | 50,449 | | | | $ | 1,732,974 | |
| | | | 2017 | | | | $ | 437,158 | | | | $ | 0 | | | | $ | 900,036 | | | | $ | 0 | | | | $ | 390,928 | | | | $ | 710 | | | | $ | 57,948 | | | | $ | 1,786,780 | |
Emily K. Boss | | | | 2019 | | | | $ | 454,564 | | | | $ | 0 | | | | $ | 600,030 | | | | $ | 0 | | | | $ | 333,078 | | | | $ | 173 | | | | $ | 49,849 | | | | $ | 1,437,694 | |
Former Vice President & General | | | | 2018 | | | | $ | 440,978 | | | | $ | 0 | | | | $ | 600,060 | | | | $ | 0 | | | | $ | 349,646 | | | | $ | 157 | | | | $ | 49,357 | | | | $ | 1,440,198 | |
Counsel | | | | 2017 | | | | $ | 427,107 | | | | $ | 0 | | | | $ | 515,076 | | | | $ | 0 | | | | $ | 381,647 | | | | $ | 120 | | | | $ | 55,107 | | | | $ | 1,379,057 | |
(1) | The amounts listed in the column for fiscal 2019 include a performance-based restricted stock equivalent grant awarded in November 2018 to the executive officers. The value of the performance-based award reflects the most probable outcome award value at the date of its grant in accordance with FASB ASC Topic 718. The award was valued based on the grant date fair value of $60.25. Refer to Note 11, Share-Based Payments of the Notes to Consolidated Financial Statements in our Annual Report on Form10-K for the year ended September 30, 2019 for further discussion. The Company records estimated expense for the performance-based awards based on target achievement for the three-year period unless evidence exists that a different outcome is likely to occur. Following is the maximum award value, if paid, for the performance-based awards granted in November 2018, based on the grant date fair value, A. Hoskins—$5,768,094; M. LaVigne—$1,848,109; T. Gorman—$1,400,090; G. Kinder—$1,225,003; and E. Boss—$840,006. The grant date fair value of the performance-based awards included in the table is as follows:
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Mr. Hoskins, $2,884,047
| | Mr. Gorman, $700,045
| | Ms. Boss, $420,003
|
Mr. LaVigne, $924,054
| | Mr. Kinder, $612,502
| | |
| The amounts listed in the column for fiscal 2019 also include time-based restricted stock equivalent awards granted by the Human Capital Committee in November 2018 that vest over three years assuming that the officer remains employed with the Company. The award was granted using grant date fair value of the awards as follows:
|
| | | | |
Mr. Hoskins, $1,236,029
| | Mr. Gorman, $300,045
| | Ms. Boss, $180,027
|
Mr. LaVigne, $396,023
| | Mr. Kinder, $262,509
| | |
(2) | The amounts reported in this column reflect annual incentive awards earned by the NEOs during the fiscal year under the applicable annual incentive plan.
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| | Energizer Holdings, Inc. 2019 Proxy Statement 39
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(3) | The amounts reported in this column consist of aggregate changes in the actuarial present value of accumulated benefits under the applicable retirement plan and the supplemental executive retirement plan, our pension restoration plan, which are the applicable defined benefit pension plans described in the narrative to the “Pension Benefits Table”. To the extent that payments under the qualified retirement plan exceed limitations imposed by the IRS, the excess will be paid under the terms of thenon-qualified supplemental executive retirement plan.
|
(4) | The amounts reported in this column with respect to fiscal 2019 consist of the following:
|
| (i) | Company matching contributions in our 401(k) plan:
|
| | | | |
Mr. Hoskins, $16,923
| | Mr. Gorman, $16,550
| | Ms. Boss, $16,800
|
Mr. LaVigne, $16,800
| | Mr. Kinder, $16,862
| | |
| (ii) | Company matching contributions or accruals in our executive savings investment plan:
|
| | | | |
Mr. Hoskins, $135,227
| | Mr. Gorman, $60,287
| | Ms. Boss, $31,453
|
Mr. LaVigne, $54,694
| | Mr. Kinder, $32,342
| | |
| These amounts include benefits which were accrued by the NEOs in our executive savings investment plan in lieu of the pension plus match account in our retirement plan (as described in the narrative to the “Pension Benefits Table”) due to certain limits imposed by the IRC on accruals in our retirement plan.
|
| (iii) | The incremental cost to the Company of the following perquisites provided to the executive officers:
|
| Executive Financial Planning Program. We reimburse the executives for 80% of the cost of personal financial advisory services, up to certain annual maximums. During fiscal 2019, the following reimbursement payments were made:
|
| | |
Mr. Hoskins, $6,000
| | Mr. Kinder, $12,000
|
Mr. LaVigne, $6,000
| | Ms. Boss, $1,596
|
| The Executive Financial Planning Program is administered on a calendar basis. Mr. Kinder received $6,000 reimbursement in December 2018 for financial planning services performed in calendar year 2018 and $6,000 reimbursement in June 2019 for financial planning services performed in calendar year 2019, both of which fell during fiscal 2019.
|
| The above list of perquisites does not include any contributions made by our charitable foundation which may have been made at the request of any of the NEOs. The directors of that foundation, all of whom are colleagues of the Company, review requests for contributions to charitable organizations from colleagues, officers and the community at large, and, in their sole discretion, authorize contributions in accordance with the purposes of the foundation. Executive officers are also eligible to participate in the charitable foundation matching gift program, which is generally available to U.S. colleagues. Under this program, the foundation matches 100% of charitable donations of a minimum of $25 made to eligible charities, up to a maximum of $5,000 per year for each individual.
|
| Dividend Equivalent Payments Not Included. Holders of restricted stock equivalents have the right to receive cash dividend equivalent payments on restricted stock equivalents but only if the underlying restricted stock equivalents vest. The amounts of such dividends are reflected in the closing price of Energizer Holdings, Inc. common stock on the NYSE (or the common stock of our former parent company prior to theSpin-Off)2022 Proxy Statement 23 and are included in the grant date fair value for the restricted stock equivalent grants.
|
GRANTSTABLE OF PLAN-BASED AWARDSCONTENTS
Awards to the NEOs, and to other key executives, were made in fiscal 2019 under two separate plans or programs:
• | PROPOSAL
4 | potential cash awards under our annual cash bonus program, dependent upon achievement of performance measures established at the beginning
| | Approval of the fiscal year, as described in more detail in “Annual2023 Omnibus Incentive Program”; and |
•Plan | | three-year restricted stock equivalent awards under the terms of our 2015 Plan, which include a performance component and a time-vesting component, as described in more detail in “Long-Term Incentive Program”.
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40 Energizer Holdings, Inc. 2019 Proxy Statement
| ✔The Board recommends a vote FOR this proposal. |
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GRANTS OF PLAN-BASED AWARDS TABLE
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| | | | | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards ($) | | Estimated Future Payouts Under Equity Incentive Plan Awards (#) | | | | | | | | |
| | | | | | | | | | | | | |
| Name | | Type of Award | | Grant
Date | | Threshold | | Target | | Maximum | | Threshold | | Target | | Maximum | | All Other
Stock
Awards:
Number of
Shares of
Stock (#) | | All Other
Option
Awards:
Number of
Shares
Underlying
Options (#) | | Exercise
or
Base
Price
of
Option
Awards
($/Sh) | | Grant
Date
Fair
Value
of Stock
and Option
Awards
(4) |
| | | | | | | | | | | | |
A.R. Hoskins | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Bonus: Annl.Perf.(1) | | | | 11/12/18 | | | | $ | 589,375 | | | | $ | 1,178,750 | | | | $ | 2,357,500 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | |
| | Perf. Award(2) | | | | 11/12/18 | | | | | — | | | | | — | | | | | — | | | | | 23,934 | | | | | 47,868 | | | | | 95,736 | | | | | — | | | | | — | | | | | — | | | | $ | 2,884,047 | |
| | | Perf.Awd.:Time Based(3) | | | | 11/12/18 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | 20,515 | | | | | — | | | | | — | | | | $ | 1,236,029 | |
M.S. LaVigne | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Bonus: Annl.Perf.(1) | | | | 11/12/18 | | | | $ | 235,209 | | | | $ | 470,419 | | | | $ | 940,838 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | |
| | Perf. Award(2) | | | | 11/12/18 | | | | | — | | | | | — | | | | | — | | | | | 7,669 | | | | | 15,337 | | | | | 30,674 | | | | | — | | | | | — | | | | | — | | | | $ | 924,054 | |
| | | Perf. Awd:Time Based(3) | | | | 11/12/18 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | 6,573 | | | | | — | | | | | — | | | | $ | 396,023 | |
T.W. Gorman | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Bonus: Annl.Perf.(1) | | | | 11/12/18 | | | | $ | 208,000 | | | | $ | 416,000 | | | | $ | 832,000 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | |
| | Perf. Award(2) | | | | 11/12/18 | | | | | — | | | | | — | | | | | — | | | | | 5,810 | | | | | 11,619 | | | | | 23,238 | | | | | — | | | | | — | | | | | — | | | | $ | 700,045 | |
| | | Perf. Awd:Time Based(3) | | | | 11/12/18 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | 4,980 | | | | | — | | | | | — | | | | $ | 300,045 | |
G.T. Kinder | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Bonus: Annl.Perf.(1) | | | | 11/12/18 | | | | $ | 139,011 | | | | $ | 278,021 | | | | $ | 556,042 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | |
| | Perf. Award(2) | | | | 11/12/18 | | | | | — | | | | | — | | | | | — | | | | | 5,083 | | | | | 10,166 | | | | | 20,332 | | | | | — | | | | | — | | | | | — | | | | $ | 612,502 | |
| | | Perf. Awd:Time Based(3) | | | | 11/12/18 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | 4,357 | | | | | — | | | | | — | | | | $ | 262,509 | |
E.K. Boss | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Bonus: Annl.Perf.(1) | | | | 11/12/18 | | | | $ | 136,369 | | | | $ | 272,738 | | | | $ | 545,476 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | |
| | Perf. Award(2) | | | | 11/12/18 | | | | | — | | | | | — | | | | | — | | | | | 3,486 | | | | | 6,971 | | | | | 13,942 | | | | | — | | | | | — | | | | | — | | | | $ | 420,003 | |
| | | Perf. Awd:Time Based(3) | | | | 11/12/18 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | 2,988 | | | | | — | | | | | — | | | | $ | 180,027 | |
(1) | These amounts represent the estimated possible payouts of annual cash awards for fiscal 2019 under our annual cash incentive program for each of our NEOs. The actual amounts earned under the annual cash bonus program for fiscal 2019 are disclosed in the “Summary Compensation Table” above as part of the column entitled “Non-Equity Incentive Plan Compensation”.
|
(2) | Vesting of these restricted stock equivalents (the performance-linked component), awarded under the three-year performance awards, is subject to achievement ofpre-established performance criteria for cumulative adjusted earnings per share and cumulative adjusted free cash flow as a percentage of net sales over the three-year period commencing October 1, 2018, the beginning of our fiscal 2019. See “Long-Term Incentive Program”.
|
(3) | These restricted stock equivalents (the time-vesting component) will vest three years from the date of grant, if the executive officer remains employed with us at that time. The grant date fair value of the amount calculated in accordance with accounting guidance is included in the “Stock Awards” column of the “Summary Compensation Table”.
|
(4) | These amounts represent the grant date fair value calculated in accordance with FASB ASC Topic 718, excluding forfeiture assumptions. For the three-year performance awards, the value includes the grant date fair value of the awards computed in accordance with FASB ASC Topic 718, applying the same valuation model and assumptions applied for financial reporting purposes, excluding forfeiture assumptions. These amounts may not correspond to the actual value realized by the NEOs. These amounts include awards granted at target. For the three-year time-vesting awards, these amounts represent the grant date fair value calculated in accordance with FASB ASC Topic 718, excluding forfeiture assumptions. The value includes 100% of such awards, with no reduction for potential forfeiture.
|
For further discussion regarding the fiscal year 2019 grants under our annual incentive program see “Annual Incentive Program” and for further discussion regarding the timing and procedures for the fiscal year 2019 grants ofperformance-based and time-based long-term incentive awards, See “Long-Term Incentive Program.”
| | |
| | Energizer Holdings, Inc. 2019 Proxy Statement 41
|
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
The following types of equity awards have been granted to the executive officers and remain unvested as of September 30, 2019.
• | | Restricted stock equivalents, the vesting of which is subject to the achievement of performance-linked and time-vesting conditions over a three-year period, as described in “Long-Term Incentive Program”. Vesting of restricted stock equivalents will accelerate, however, upon death, disability and upon a change of control of the Company. A portion will also vest upon voluntary retirement if the awards have been held for at least 12 months and the officer is age 55 with at least 10 years of service, including service with our former parent prior toSpin-Off. Unvested restricted stock equivalent awards are included under “Stock Awards—Number of Shares or Units of Stock That Have Not Vested”, in the table below. The performance-based awards have similar terms and vest upon achievement of cumulative adjusted earnings per share and cumulative adjusted free cash flow as a percentage of sales goals. See “Long-Term Incentive Program”.
|
Specialone-time restricted stock equivalents granted by Energizer that will vest ratably on each of the five anniversaries from the date of grant. Vesting of all of the restricted stock equivalents will accelerate, however, upon death, disability or upon a change of control of the Company. A portion will also vest upon voluntary retirement if the awards have been held for at least 12 months and the officer is age 55 with at least 10 years of service and upon involuntary termination (other than for cause).
The following table and footnotes set forth information regarding outstanding restricted stock equivalent awards, as of September 30, 2019 for the executive officers. The market value of shares that have not vested was determined by multiplying $43.58, the closing market price of the Company’s stock on the last trading day of fiscal 2019, by the number of shares.
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | |
| |
| | | Stock Awards |
| | | | | |
| Name | | Grant Date
(1)(2)(3)(4) | | Number of
Shares or
Units of
Stock That
Have Not
Vested (#) | | Market Value
of Shares or
Units of
Stock That
Have Not
Vested
($) | | Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested (#)(5)(6) | | Equity
Incentive
Plan
Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights
That Have
Not Vested ($) |
A.R. Hoskins | | | | 07/08/2015 | | | | | 40,234 | | | | $ | 1,753,398 | | | | | — | | | | | — | |
| | | | 11/14/2016 | | | | | 26,415 | | | | $ | 1,151,166 | | | | | 123,268 | | | | $ | 5,372,019 | |
| | | | 11/13/2017 | | | | | 27,150 | | | | $ | 1,183,197 | | | | | 63,349 | | | | $ | 2,760,749 | |
| | | | 11/12/2018 | | | | | 20,515 | | | | $ | 894,044 | | | | | 47,868 | | | | $ | 2,086,087 | |
Total | | | | | 114,314 | | | | $ | 4,981,804 | | | | | 234,485 | | | | $ | 10,218,856 | |
M.S. LaVigne | | | | 07/08/2015 | | | | | 16,513 | | | | $ | 719,637 | | | | | — | | | | | — | |
| | | | 11/14/2016 | | | | | 8,982 | | | | $ | 391,436 | | | | | 41,914 | | | | $ | 1,826,612 | |
| | | | 11/13/2017 | | | | | 8,960 | | | | $ | 390,477 | | | | | 20,905 | | | | $ | 911,040 | |
| | | | 11/12/2018 | | | | | 6,573 | | | | $ | 286,451 | | | | | 15,337 | | | | $ | 668,386 | |
Total | | | | | | | | | 41,028 | | | | $ | 1,788,001 | | | | | 78,156 | | | | $ | 3,406,038 | |
T.W. Gorman | | | | 07/08/2015 | | | | | 2,794 | | | | $ | 121,763 | | | | | — | | | | | — | |
| | | | 11/14/2016 | | | | | 1,882 | | | | $ | 82,018 | | | | | 8,782 | | | | $ | 382,720 | |
| | | | 11/13/2017 | | | | | 5,770 | | | | $ | 251,457 | | | | | 13,462 | | | | $ | 586,674 | |
| | | | 11/12/2018 | | | | | 4,980 | | | | $ | 217,028 | | | | | 11,619 | | | | $ | 506,356 | |
Total | | | | | 15,426 | | | | $ | 672,265 | | | | | 33,863 | | | | $ | 1,475,750 | |
G.T. Kinder | | | | 07/08/2015 | | | | | 5,588 | | | | $ | 243,525 | | | | | — | | | | $ | — | |
| | | | 11/14/2016 | | | | | 6,159 | | | | $ | 268,409 | | | | | 28,742 | | | | $ | 1,252,576 | |
| | | | 11/13/2017 | | | | | 5,939 | | | | $ | 258,822 | | | | | 13,858 | | | | $ | 603,932 | |
| | | | 11/12/2018 | | | | | 4,357 | | | | $ | 189,878 | | | | | 10,166 | | | | $ | 443,034 | |
Total | | | | | | | | | 22,043 | | | | $ | 960,634 | | | | | 52,766 | | | | $ | 2,299,542 | |
E.K. Boss | | | | 07/08/2015 | | | | | 5,588 | | | | $ | 243,525 | | | | | — | | | | $ | — | |
| | | | 11/14/2016 | | | | | 3,525 | | | | $ | 153,620 | | | | | 16,448 | | | | $ | 716,804 | |
| | | | 11/13/2017 | | | | | 4,073 | | | | $ | 177,501 | | | | | 9,503 | | | | $ | 414,141 | |
| | | | 11/12/2018 | | | | | 2,988 | | | | $ | 130,217 | | | | | 6,971 | | | | $ | 303,796 | |
Total | | | | | 16,174 | | | | $ | 704,863 | | | | | 32,922 | | | | $ | 1,434,741 | |
| | |
42 Energizer Holdings, Inc. 2019 Proxy Statement
| |
|
STOCK VESTED TABLE
| | | | | | | | | | |
| | | |
| | |
| | | Stock Awards |
| | | |
| Name | | Number of Shares Acquired on Vesting
(1) | | Value Realized on Vesting ($) |
| | |
A. R. Hoskins | | | | 69,159 | | | | $ | 3,065,193 | |
| | |
M.S. LaVigne | | | | 27,058 | | | | $ | 1,191,747 | |
| | |
T. W. Gorman | | | | 5,606 | | | | $ | 253,002 | |
| | |
G. T. Kinder | | | | 12,819 | | | | $ | 586,306 | |
| | |
E. K. Boss | | | | 9,606 | | | | $ | 425,752 | |
| (1) | In fiscal 2019, 20% of the time-based restricted stock equivalents granted to each of the officers at the time of ourSpin-Off from our former parent company vested in accordance with the terms of the awards. On November 16, 2018, 100% of the time-based restricted stock equivalent awards granted in fiscal 2016 vested in accordance with the terms of the award agreements.
|
PENSION BENEFITS TABLE
| | | | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | |
| Name | | Plan Name (1) | | Number of Years Credited Service (#) (2) | | | Present Value of Accumulated Benefit ($) (3) | | | Payments During Last Fiscal Year ($) | |
| | | | |
A.R. Hoskins | | Energizer Retirement Plan | | | 31 | | | $ | 1,118,258 | | | $ | 0 | |
| | | | |
| | Supplemental Executive Retirement Plan | | | 30 | | | $ | 1,326,311 | | | $ | 0 | |
| | | | |
M.S. LaVigne | | Energizer Retirement Plan | | | 4 | | | $ | 85,984 | | | $ | 0 | |
| | | | |
| | | Supplemental Executive Retirement Plan | | | 4 | | | $ | 84,192 | | | $ | 0 | |
| | | | |
G.T. Kinder | | Energizer Retirement Plan | | | 0.5 | | | $ | 28,351 | | | $ | 0 | |
| | | | |
| | Supplemental Executive Retirement Plan | | | 0.5 | | | $ | 6,311 | | | $ | 0 | |
| | | | |
E.K. Boss | | Energizer Retirement Plan | | | 0.25 | | | $ | 5,864 | | | $ | 0 | |
(1) | The Energizer Retirement Plan is frozen. It includes several benefit formulas applicable at different periods, as explained in the detailed narrative. One formula was the Retirement Accumulation Account, a cash balance benefit effective from January 1, 2010 through December 31, 2013 when the entire plan was frozen. This applies to all four executives. Two prior formulas, the Pension Equity Plan and the PensionPlus Match Account, were frozen as of December 31, 2009. Mr. Hoskins’ benefit value also includes these two additional formulas. The Supplemental Executive Retirement Plan was also frozen as of December 31, 2013. The plan provided benefits based on the same formulas as the Energizer Retirement Plan (with the exception of the PensionPlus Match Account) but reflected compensation above the maximum compensation limit.
|
(2) | The number of years of credited service shown for each executive reflects years of actual service prior to the pension plan being frozen, which are less than each executive’s actual years of service with the Company. For Mr. Hoskins 15 of the years shown were with Edgewell, our former parent company, and the remainder were with Ralston Purina Company, Edgewell’s former parent. Mr. Hoskins’ service in the Supplemental Executive Retirement Plan is less than his years under the Energizer Retirement Plan due to aone-time action by the Human Capital Committee in February of 2009. In order to reduce cash outlays and bolster the Company’s compliance with its debt covenants, accrual of benefits for officers in the Supplemental Executive Retirement Plan were suspended for the calendar year, and in lieu of those and other benefits, Mr. Hoskins was granted a 2009 performance award.
|
(3) | The value of benefits shown equal the account balances under the plans and benefit formulas in which the named executive officer participates. The account balances grow with a monthly interest credit based on the30-year Treasury rate reset annually. The value is available on termination without reduction. Assumptions used in the valuations are set forth in “Note 11, Pension Plans” of the Notes to Consolidated Financial Statements of our Annual Report on Form10-K for year ended September 30, 2019.
|
| | |
| | Energizer Holdings, Inc. 2019 Proxy Statement 43
|
NON-QUALIFIED DEFERRED COMPENSATION TABLE
| | | | | | | | | | | | |
| | | | | | |
| Name | | Plan | | Executive Contributions in Last FY ($)(1) | | Registrant Contributions in Last FY ($)(2) | | Aggregate Earnings in Last FY ($)(3) | | Aggregate Withdrawals/ Distributions ($) | | Aggregate Balance at Last FYE ($)(4) |
| | | | | | |
A.R. Hoskins | | Def’d Comp. Plan | | $ 0 | | $ 0 | | $259,403 | | $0 | | $5,030,491 |
| | | | | | |
| | Exec. S.I.P. | | $152,150 | | $135,227 | | $ 16,331 | | $0 | | $2,136,821 |
| | | | | | |
| | Total | | $152,150 | | $135,227 | | $275,734 | | $0 | | $7,167,312 |
| | | | | | |
M.S. LaVigne | | Def’d Comp. Plan | | $ 0 | | $ 0 | | $ 30,501 | | $0 | | $ 591,495 |
| | | | | | |
| | Exec. S.I.P. | | $ 71,494 | | $ 54,694 | | $(21,979) | | $0 | | $1,552,783 |
| | | | | | |
| | | Total | | $ 71,494 | | $ 54,694 | | $ 8,522 | | $0 | | $2,144,278 |
| | | | | | |
T.W. Gorman | | Def’d Comp. Plan | | $ 0 | | $ 0 | | $ 0 | | $0 | | $ 0 |
| | | | | | |
| | Exec. S.I.P. | | $ 64,203 | | $ 60,287 | | $ 3,735 | | $0 | | $ 387,530 |
| | | | | | |
| | Total | | $ 64,203 | | $ 60,287 | | $ 3,735 | | $0 | | $ 387,530 |
| | | | | | |
G.T. Kinder | | Def’d Comp. Plan | | $ 0 | | $ 0 | | $ 0 | | $0 | | $ 0 |
| | | | | | |
| | Exec. S.I.P. | | $ 49,204 | | $ 32,342 | | $ 21,268 | | $0 | | $ 452,500 |
| | | | | | |
| | | Total | | $ 49,204 | | $ 32,342 | | $ 21,268 | | $0 | | $ 452,500 |
| | | | | | |
E.K. Boss | | Def’d Comp. Plan | | $ 0 | | $ 0 | | $ 0 | | $0 | | $ 0 |
| | | | | | |
| | Exec. S.I.P. | | $ 48,253 | | $ 31,453 | | $ 7,621 | | $0 | | $ 441,669 |
| | | | | | |
| | Total | | $ 48,253 | | $ 31,453 | | $ 7,621 | | $0 | | $ 441,669 |
(1) | The officer contributions to our executive savings investment plan during fiscal 2019 consist of deferrals of salary earned with respect to fiscal 2019.
|
(2) | Contributions and accruals to our executive savings investment plan consist of Company contributions which would have otherwise been contributed to the 401(k) plan but for limitations imposed by the IRS. These amounts, in their entirety, are included in the All Other Compensation column of the “Summary Compensation Table”.
|
(3) | Aggregate earnings/(losses) shown in this column consist of:
|
| – | amounts credited to each executive under the investment options of each of the plans, reflecting actual earnings, including appreciation and depreciation, on investment funds offered under our qualified 401(k) plan with returns during fiscal 2019 ranging from-8.01% to 10.45%; and
|
| – | in the case of the prime rate option of our deferred compensation plan, interest at the prime rate, quoted by the Wall Street Journal ranging from 5.0% – 5.5%.
|
(4) | Of the aggregate balances shown in this column with respect to the executive savings investment plan, the following amounts were previously reported as compensation in the “Summary Compensation Table” of our proxy statement for our 2019 Annual Shareholders’ Meeting:
|
We have adopted several plans or arrangements that provide for the deferral of compensation on a basis that is nottax-qualified.
Deferred Compensation Plan — Under the terms of our deferred compensation plan, an unfunded,non-qualified plan that assumed the liabilities under our former parent’s plan in connection with theSpin-Off, prior to January 1, 2013, executives could elect to have up to 100% of their annual cash incentive award deferred until their retirement or other termination of employment, or for a shorter, three-year period (at the executive’s election, in advance). All funds are invested in the Prime Rate fund, which credits account balances on a daily basis, at the prime rate quoted by The Wall Street Journal as of the first business day of the given quarter. For fiscal 2019, the rate credited under this fund ranged from 5.0% to 5.5%. Balances in the plan are vested and may be paid out in a lump sum in cash six months following termination, or infive-or10-year increments commencing the year following termination of employment, as previously elected by the participant.
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44 Energizer Holdings, Inc. 2019 Proxy Statement
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|
Executive Savings Investment Plan — Under the terms of our executive savings investment plan, our excess 401(k) plan, amounts that would be contributed, either by an executive or by us on the executive’s behalf, to the 401(k) plan but for limitations imposed by the IRC, are credited to thenon-qualified executive savings investment plan. Under that plan, executives may elect to defer their contributions into any of the measurement fund options which track the performance of the Vanguard investment funds offered under our qualified savings investment plan. Deferrals and vested Company contributions may be transferred to different investment options at the executive’s discretion. Deferrals in the executive savings investment plan, adjusted for the net investment return, are paid out in a lump sum payment, or in five or 10 annual installments, following retirement or other termination of employment, as previously elected by the participant.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL
We have not entered into general employment agreements with any of our NEOs. We have adopted an executive severance plan providing for certain benefits in connection with a qualifying termination, as described below. We have also entered into change of control employment agreements with our NEOs and certain of our other key employees which provide for severance compensation, acceleration of vesting and a lump sum payout in lieu of a continuation of benefits upon qualified termination of employment following a change of control. Additionally, equity awards under our 2015 Plan provide for acceleration of vesting of certain awards in the event of certain terminations of employment.
The information below reflects the value of acceleration or incremental compensation which each executive officer would receive upon the termination of his or her employment or upon a change of control. Because the value of awards and incremental compensation depend on several factors, actual amounts can be determined only at the time of the event.
The information is based on the following assumptions:
the event of termination (death, permanent disability, involuntary termination without cause, or voluntary termination), or a change of control of the Company, occurred on September 30, 2019, the last day of our fiscal year;
the closing price of our common stock on the last trading day of the fiscal year was $43.58; and
each of the executive officers was terminated on that date.
The information does not reflect benefits that are provided under our plans or arrangements that do not discriminate in favor of executive officers and are available generally to all salaried colleagues—such as amounts accrued under our 401(k) plan, accumulated and vested benefits under our retirement plans (including our pension restoration plan and executive savings investment plan), health, welfare and disability benefits, and accrued vacation pay. For amounts accrued under retirement plans, see“Pension Benefits Table”.
The information also does not include amounts under our deferred compensation plan or executive savings investment plan that would be paid, as described in the “Non-Qualified Deferred Compensation Table”, except to the extent that an executive officer is entitled to an accelerated benefit as a result of the termination.
Executive Severance Plan
On July 1, 2015, we adopted an executive severance plan which provides benefits to our senior executives, including each of the NEOs, in the event of a “qualifying termination” as defined in the plan, which means an involuntary termination without “cause” or a voluntary termination as a result of “good reason.” Post-termination benefits for the senior executives consist of:
A lump sum payment of one or two times his or her annual base salary at the time of the qualifying termination, which will be two times for Messrs. Hoskins, Gorman and LaVigne and one time for Mr. Kinder and Ms. Boss;
For Messrs. Hoskins, Gorman and LaVigne, apro-rata bonus payment based on the number of days during the bonus year the participant was employed and the amount of annual bonus which the participant would have received if he had remained employed, based on actual Company performance; and
outplacement services for up to 12 months for each of the NEOs.
The payment of benefits under the plan is conditioned upon the executive officer executing a general release in favor of the Company, as well as confidentiality,non-solicitation,non-disparagement andnon-competition obligations as set forth in the release. In addition, no benefits will be paid to the extent duplicative of benefits under a change of control or similar agreement with the Company.
| | |
| | Energizer Holdings, Inc. 2019 Proxy Statement 45
|
If an executive officer is terminated for one of the following events,
an involuntary termination of an employee’s employment without “cause”; or
a voluntary termination of employment by an employee as a result of “good reason”,
then the following payments will be made in accordance with the Executive Severance Plan:
| | | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Name | | Lump Sum
Severance Payment
| | | Outplacement
Services
| | | Pro-Rata Bonus Payment
|
A.R. Hoskins
| | | 2x Base Salary | | | | | | | Determined by multiplying the amount the executive officer would have received for the year of termination based upon actual Company performance by a fraction, the numerator is the days in the bonus year during which the executive officer was employed and the denominator is the days in the bonus year. |
M.S. LaVigne
| | | 2x Base Salary | | | | | |
T.W. Gorman
| | | 2x Base Salary
| | | | Up to 12 | |
| | months | |
G.T. Kinder
| | | 1x Base Salary | | | | | | | NoPro-Rata Bonus Payment |
E.K. Boss
| | | 1x Base Salary | | | | | |
No benefit will be paid to an employee under the plan to the extent that benefits would otherwise be paid to the employee under the terms of a Change of Control Employment Agreement (or other similar agreement).
Assuming the qualifying termination was as of September 30, 2019 each of our executive officers would have received the following payments:
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Name | | Lump Sum
Severance Payment | | | Outplacement
Services | | | Pro-
Rata Bonus Payment | | | Total | |
A.R. Hoskins | | $ | 2,060,000 | | | $ | 40,000 | | | $ | 1,510,837 | | | $ | 3,610,837 | |
M.S. LaVigne | | $ | 1,181,784 | | | $ | 40,000 | | | $ | 603,545 | | | $ | 1,825,329 | |
T.W. Gorman | | $ | 1,123,200 | | | $ | 40,000 | | | $ | 515,385 | | | $ | 1,678,585 | |
G.T. Kinder | | $ | 465,629 | | | $ | 40,000 | | | | — | | | $ | 505,629 | |
E.K. Boss | | $ | 340,642 | | | $ | 40,000 | | | | — | | | $ | 380,642 | |
Upon termination of employment for any reason, vested account balances in our deferred compensation plan are paid out in cash to the participant in either a lump sum, or over a five or 10 year period, commencing six months from the date of termination as previously elected by the participant.
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46 Energizer Holdings, Inc. 2019 Proxy Statement
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|
Death, Disability or Termination of Employment (Other than Upon a Change of Control)
Upon an executive officer’s death, permanent disability, involuntary termination other than for cause (defined as termination for gross misconduct), and, in some cases, retirement, other than upon or following a change of control, the following plans or programs provide for acceleration of certain awards. Awards are accelerated for retirement after attainment of age 55 with 10 years of service (including service with our former parent companies) if granted 12 or more months prior to retirement date. No awards are accelerated upon other voluntary termination or involuntary termination for cause. Performance awards vesting upon retirement are paid when results for the Performance Period are met.
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | |
Award | | Involuntary
Termination (Other
than for Cause)
| | | Death
| | | Permanent
Disability
| | | Retirement
After Age 55 with
10 years of service
| |
Five-year restricted stock awards granted 7/8/15
| | | Pro Rata Vesting
| | | | Accelerated
| | | | Accelerated
| | | | Pro Rata Vesting
| |
Three-year restricted stock awards granted 11/14/16, 11/13/17 and 11/12/2018
| | | Forfeited | | | | Accelerated | | | | Accelerated | | | | Pro Rata Vesting | |
Three-year performance awards granted 11/14/16, 11/13/17 and 11/12/2018
| | | Forfeited | | | | Accelerated | | | | Pro Rata Vesting | | | | Pro Rata Vesting | |
The value of awards which would be accelerated for our NEOs upon death, disability, involuntary termination or retirement other than upon or following a change of control as of September 30, 2019 is shown in the following chart. Stock market changes since September 30, 2019 are not reflected in these valuations.
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Restricted Stock Equivalent Awards Accelerated upon Termination Events* | |
| Officer | | Death | | | Permanent Disability | | | Involuntary
Termination other
Than for Cause | | | Retirement Following
Attainment of Age 55 with 10
Years of Service | |
A.R. Hoskins | | $ | 10,405,215 | | | $ | 7,919,677 | | | $ | 485,725 | | | $ | 4,349,967 | |
M.S. LaVigne | | $ | 3,573,054 | | | $ | 2,767,129 | | | $ | 199,353 | | | $ | 0 | |
T.W. Gorman | | $ | 1,850,282 | | | $ | 1,277,100 | | | $ | 33,731 | | | $ | 0 | |
G.T. Kinder | | $ | 2,119,388 | | | $ | 1,585,157 | | | $ | 67,461 | | | $ | 0 | |
E.K. Boss | | $ | 1,505,315 | | | $ | 1,138,976 | | | $ | 67,461 | | | $ | 0 | |
* | The value of accelerated restricted stock equivalents in the chart above is calculated based on the number of stock equivalents that will vest in accordance with the termination provisions of the agreements valued at $43.58, the closing market price of the Company’s stock on September 30, 2019. This calculation differs from the calculation of accelerated vesting for purposes of Code Section 280G and 4999 as reported in the “Estimated Payments and Benefits” table below.
|
Change of Control of the Company
Our change of control employment agreements with each of the NEOs have terms of two or three years from July 1, 2015, subject to certain automatic renewal provisions. For Messrs. Hoskins and LaVigne, the term is three years. For Messrs. Gorman and Kinder and for Ms. Boss, the term is two years. The agreement provides that the executive officer will receive severance compensation in the event of certain termination events including termination by the company without cause or by the executive for good reason within specified periods following a change of control of the Company or upon death or disability after a change of control of the Company, as such terms are defined in the agreement.
Under the agreements, a change of control is generally defined as an acquisition of more than 50% of the total voting power of the Company, a person beneficially owning more than 20% of the total voting power of the Company, or an unapproved change in the majority of the Board.
| | |
| | Energizer Holdings, Inc. 2019 Proxy Statement 47
|
Under the agreements, upon a change of control, each executive officer will receive a pro rata annual bonus for the portion of the year occurring prior to a change of control. The prorated bonus will be calculated as executive’s target bonus for the fiscal year in which the change of control occurs, or, if greater, the actual bonus awarded to executive under any short-term incentive plan(s) of the company for the fiscal year immediately preceding the fiscal year in which the change of control occurs, divided by 365 and multiplied by the number of calendar days in the year immediately up to the day on which the change of control occurs. If the executive officer is terminated following the change of control under the termination events defined in the agreement within specified periods of the change of control, or in the event of death or disability after a change of control, the severance compensation payable under the agreement consists of:
a payment equal to a multiple of the executive officer’s annual base salary and target bonus (defined as the most recent five-year actual bonus percentages multiplied by the greater of base salary at either termination or change of control), which will be three times in the case of Messrs. Hoskins and LaVigne and two times in the case of Messrs. Gorman, Kinder and Ms. Boss;
a pro rata portion of the executive officer’s target annual bonus for the year of termination; and
alump-sum payment intended to assist with health and welfare benefits for a period of time post-termination.
Additionally, if approved by the Company’s Chief Executive Officer, perquisites and fringe benefits enjoyed by an executive immediately prior to termination may continue for the period approved.
Following termination of employment, each executive officer is bound by aone-year covenant not to compete, aone-yearnon-solicitation covenant, and a covenant of confidentiality. No severance payments under the agreements would be made in the event that an executive officer’s termination is voluntary (other than for good reason), is due to normal retirement, or is for cause. Under the agreements, in the event that it is determined that a “golden parachute” excise tax is due under the Internal Revenue Code, we will reduce the aggregate amount of the payments payable to an amount such that no such excise tax will be paid if the resulting amount would be greater than theafter-tax amount if the payments were not so reduced.
The agreements also provide that upon a change of control, outstanding equity awards held by each executive officer will accelerate and vest in accordance with the terms of the awards, even if the awards have a higher threshold for a “change of control”. Our equity awards generally define a “change of control” as an acquisition of 50% or more of the outstanding shares of our common stock. The terms of our outstanding equity awards vary as to the portion of the unvested award that will accelerate and vest upon a change of control, as indicated below:
| | |
| | |
| | |
Award | | Vesting |
Five-year time-based
awards granted 7/8/15
| | 100% vest upon change of control |
Three-year time-based
awards granted 11/14/16,
11/13/17 and 11/12/18
| | 100% vest upon change of control |
Three-year performance
awards granted 11/14/16,
11/13/17 and 11/12/18
| | The greater of (i) the number of stock equivalents granted at target or (ii) the amount of target performance stock equivalents which would have vested had the performance period ended on the date the change of control occurs |
Payments of cash would be made in a lump sum no sooner than six months following termination of employment.
| | |
48 Energizer Holdings, Inc. 2019 Proxy Statement
| |
|
Estimated Payments and Benefits
If a change of control had occurred on September 30, 2019 and an executive officer’s employment was not terminated, our executive officers would have received the following pro rata annual bonus amounts: Mr. Hoskins $1,510,837, Mr. LaVigne $603,545, Mr. Gorman $515,385, Mr. Kinder $356,699, and Ms. Boss $349,646.
Based on the assumptions set out above, the following chart sets forth estimated payments to our NEOs upon termination by the Company without cause or by the executive for good reason following a change of control or upon death or disability after a change of control. The value of accelerated restricted stock equivalents and performance awards reflects a stock price of $43.58 (the closing price of our common stock on the last trading day of fiscal 2019). Stock market declines and vesting and forfeitures of unvested restricted stock equivalents since September 30, 2019 are not reflected in these valuations. Upon a change of control, retirement benefits under the executive savings investment plan vest to the extent not already vested.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Name | | Cash Severance | | Retirement Benefits | | Accelerated
Vesting of Restricted Stock Equivalent Awards | | Benefits
(1) | | Excise Tax
Reduction | | Total |
A.R. Hoskins | | | $ | 9,237,959 | | | | $ | 0 | | | | $ | 10,405,215 | | | | $ | 30,947 | | | | $ | 0 | | | | $ | 19,674,121 | |
M.S. LaVigne | | | $ | 4,338,365 | | | | $ | 0 | | | | $ | 3,573,054 | | | | $ | 28,530 | | | | $ | 0 | | | | $ | 7,939,949 | |
T.W. Gorman | | | $ | 2,591,615 | | | | $ | 0 | | | | $ | 1,850,282 | | | | $ | 29,459 | | | | $ | -938,020 | (2) | | | $ | 3,533,336 | |
G.T. Kinder | | | $ | 2,077,168 | | | | $ | 0 | | | | $ | 2,119,388 | | | | $ | 30,230 | | | | $ | 0 | | | | $ | 4,226,786 | |
E.K. Boss | | | $ | 2,001,111 | | | | $ | 0 | | | | $ | 1,505,315 | | | | $ | 19,494 | | | | $ | 0 | | | | $ | 3,525,920 | |
(1) | Amounts in this column include health insurance, dental insurance and life insurance.
|
(2) | Under Internal Revenue Code Section 280G, executive officers will incur an excise tax on portions of these payments if the parachute value of payments due upon certain events, including a termination of employment, exceeds a specified threshold in connection with a change of control. The Company determines whether a named executive officer is better off receiving the full payment due and paying the excise tax or receiving a reduced payment that falls just below the excise tax threshold, which is referred to as a “best of net” provision. For this hypothetical payment as of September 30, 2019, it has been estimated that Mr. Gorman would be better off receiving the reduced payout. The other named executive officers are better off receiving the full payment and paying the excise tax.
|
CEO Pay Ratio
We believe that compensation must be competitive in the marketplace for the role, internally consistent, and equitable in order to motivate our colleagues to deliver consistent and sustainable operating results for our shareholders.
We identified our median colleague using data as of September 30, 2019, by examining individuals employed by us as of that date, the (i) projected base or wage compensation, projected recurrent cash allowances, and actual cash bonus payments for permanent colleagues, and (ii) actual base or wage compensation, actual recurrent cash allowances, and actual cash bonus payments for temporary colleagues.
As permitted by the SEC rules, we are excluding from our CEO pay ratio approximately 3,500 colleagues who were previously employed by the global auto care and global battery and lights businesses of Spectrum Brands Holdings, Inc. which we acquired during fiscal 2019. Additionally, of the remaining 4,000 colleagues, under the de minimis exception to the Dodd- Frank Act reporting rules, we excluded 128 colleagues based in Malaysia and 61 colleagues based in the Philippines, which represented approximately 4.78% of the Company’s total colleague population (exclusive of the colleagues who were previously employed by Spectrum Brands Holdings, Inc.) as of September 30, 2019. Therefore, an aggregate population of approximately 3,800 colleagues, whether employed on a full-time or part-time basis, was considered in determining our median employee.
We estimate that the compensation of our Chief Executive Officer in fiscal 2019 was approximately 192 times the median of the annual total compensation of all of our other colleagues.
| | |
| | Energizer Holdings, Inc. 2019 Proxy Statement 49
|
The SEC’s rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, apply certain exclusions, and make reasonable estimates and assumptions that reflect their employee populations and compensation practices. As a result, the pay ratio reported by other companies, including our compensation peer group, may not be comparable to the pay ratio reported above.
| | | | | | | | |
| | | CEO to Median Colleague Pay Ratio | |
| | | CEO | | | Median Employee | |
Annual Total Compensation | | | $6,814,918 | | | | $35,464 | |
| | |
50 Energizer Holdings, Inc. 2019 Proxy Statement
| |
|
You are being asked to approve the Energizer Holdings, Inc. 2023 Omnibus Incentive Plan (“2023 Plan”) at the Annual Shareholders’ Meeting to be held on January 27, 2020. The Plan replaces and supersedes the 2015 Energizer Holdings, Inc. Equity Incentive Plan (“2015 Plan”).30, 2023. A copy of the 2023 Plan is attached asAppendix B hereto. Upon approval of the 2023 Plan, no new awards will be granted under the 2015Omnibus Incentive Plan (the “2020 Plan”), though the terms of the 20152020 Plan will continue to govern all awards previously granted under that plan. Shares of our stock that are subject to outstanding awards under the 2015 Plan that expire, are forfeited or otherwise terminate unexercised may be subject to new awards under the2020 Plan. Likewise, shares of stock that were available for grant under the 2015 Plan’s share reserve as of November 29, 2019 will be added to this Plan’s share reserve and may be subject to new awards under the Plan.
The Board unanimously recommends thethat shareholders approve the Plan Proposal.2023 Plan.
Overview
We are asking our shareholders to support this proposal because it is critical to the successful operation of our Company, the continued growth of our Company and our ability to recruit and retain highly skilled and experienced individuals. The
2023 Plan is designed to provide a means by which
the Companywe may attract and retain key individuals and to provide
a means by which such individuals
canan opportunity to acquire ownership in our Company and earn incentive
compensation. | | |
| |
PROPOSAL
4
| | Approval of the Omnibus Incentive Plan
✓ The Board recommends a voteFOR this proposal.
|
compensation in a way that aligns their interests with the interests of our shareholders.
Equity awards are a key component of total compensation not only for our NEOs and directors, but for our broader employee population as well. If shareholders do not approve this proposal, we would need to shift more of our compensation structure away from equity and toward cash to maintain competitive compensation packages. As we believe the use of equity awards better aligns the interests of our employees with the interests of our shareholders and directly supports our long-term strategy, we are requesting your approval of the 2023 Plan. Please refer to “Grant Practices” below for additional information on our historical approach to granting equity within our organization.
The following table summarizes the number of
sharesshares* that would be authorized after
November 29, 2019January 30, 2023 if this Proposal is
approved. | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Outstanding RSUs
& PSUs (at
maximum payout)
as of
September 30,
2019(1) | | RSUs and PSUs
(at maximum
payout) granted
in November
2019)(2) | | RSUs and PSUs
vested in
November 2019 | | RSUs & PSUs
Forfeited | | RSUs and PSUs
(at maximum
payout)
outstanding
as of
November 29,
2019(3) | | Shares
Available for
new grants
as of
November 29,
2019(4) | | Additional
Shares
requested
under this
proposal | | Total Shares
Authorized for
issuance after
November 29,
2019 (if
Proposal
approved) |
1,863,214 | | 828,230 | | 573,653 | | 1,140 | | 2,116,651 | | 300,808 | | 6,500,000 | | 6,800,808 |
| | Number of shares remaining available for future issuance under the 2020 Plan as of September 30, 2022 | | | 4,300,000(1) | |
| | minus | | | RSUs and PSUs outstandinggranted under the 2020 Plan from October 1, 2022 through November 21, 2022 | | | 2,300,000(2) | |
| | plus | | | RSUs and PSUs forfeited from October 1, 2022 through November 21, 2022 | | | 1,000,000(3) | |
| | Number of shares remaining available for future issuance under the 2020 Plan as of November 29, 2019 vest21, 2022 | | | 3,000,000(1) | |
| | plus | | | Additional shares requested under this proposal | | | 4,300,000 | |
| | Total number of shares authorized for issuance under the 2023 Plan (if this proposal is approved) | | | 7,300,000 (1) | |
*
| Share amounts in this table have been rounded to the nearest 100,000. |
(1)
| Assumes all outstanding PSUs granted under the 2020 Plan will pay out at maximum payout level.performance. |
(2)
| This isAssumes all PSUs will payout at maximum performance. Grants of PSUs and RSUs reduce the additional number2020 Plan’s share reserve at a rate of shares that would be issued if PSUs outstanding as of November 29, 2019 converted at 200% of the target amount upon vesting.
2:1. |
(3)
| ThereReflects actual number of RSUs and PSUs forfeited from October 1, 2022 through November 21, 2022. RSUs and PSUs that are no outstanding options underforfeited are returned to the 2015 Plan.
|
(4) | PSUs and RSUs granted go against the2020 Plan’s share reserve at a rate of 2:1 ratio.
and become available for future awards. |
The closing price of our stock as reported by the New York Stock Exchange on November
29, 201930, 2022 was
$49.89$34.09 per share, and a total of
69,241,71571,405,885 shares of our common stock were outstanding.
Reasons to Vote for the Proposal
Long-Term Equity Incentives are a Key Component of our Compensation Program
Our overall compensation objective is to compensate our personnel in a manner that attracts and retains the highly talented employees necessary to manage and staff our Company. Our employees are our most valuable asset, and we strive to provide them with compensation packages that are competitive, that reward personal and company performance and that help meet our retention needs. Equity awards, the value of which depends on our stock and Company performance, and which generally require continued service over time before any value can be realized, help achieve these objectives and are
| | |
| | 24 Energizer Holdings, Inc. 20192022 Proxy Statement 51
| |
Key FeaturesTABLE OF CONTENTS
a key element of our compensation program. Equity awards also incentivize our employees to manage our business as owners, aligning their interests with those of our shareholders. We believe we must continue to use equity compensation on a broad basis to help attract, retain and motivate employees to continue to grow our business, develop new products and ultimately increase shareholder value. As of November 21, 2022, approximately 330 of our employees, former employees and directors held outstanding equity awards.
We Require Additional Shares to meet our Forecasted Needs
Awards under our equity incentive plans (including the
Omnibus Incentive2023 Plan,
The Plan allows us to grant a variety of types of awards, including: options, stock appreciation rights (“SARs”), restricted stock and restricted stock units (time-based or performance-based), other stock awards and cash-based awards.
The Plan provides for administration if approved by ourshareholders) are determined by the Human Capital Committee, though our Board exercises discretion with respect to awards granted to directors.
Except forofficers, employees or other service providers other than directors, and by our Board with respect to director grants. Because awards the Plan has a minimum vesting period of not less than one year, thoughare determined by the Human Capital Committee mayor the Board, as applicable, in their discretion, it is not possible to predict the awards that will be made to particular officers, employees, directors or other service providers in the future. However, based on our historical share usage as described in “Grant Practices” below, we project that the number of shares remaining available for grant awardsunder the 2020 Plan (approximately 3 million shares of upour common stock as of November 21, 2022) will only be sufficient to 5%meet our needs for the next year, taking into account the fungible ratio of the Plan. If the 2023 Plan is approved by our shareholders, the approximately 7.3 million shares authorizedof our common stock available for future grants under the 2023 Plan with(which includes the shares remaining available for issuance under the 2020 Plan as of the date the 2023 Plan is approved by our shareholders) should enable us to continue to grant equity as a portion of employee compensation for the next three years.
We Manage Our Equity Award Use Carefully
We manage our long-term shareholder dilution by limiting the number of equity awards granted annually and limiting the awards we grant to what we believe is the appropriate amount of equity necessary to attract, reward and retain our employees. Additionally, as discussed in “Grant Practices” below, a substantial portion of the equity awards granted to our officers are performance-based, and we have historically granted performance-based equity awards to certain of our non-officer employees as well. We have also consistently managed run rates within 1.5% of our outstanding shares despite increases in the size of our workforce. Our three-year average run rate (calculated as equity-based awards granted under our equity compensation plan for the relevant year, divided by average basic common shares outstanding for that year) was 1.4% for fiscal years 2020 through 2022 (see “Grant Practices” below for detailed calculations of our three-year run rates).
The 2023 Plan Incorporates Good Compensation and Governance Practices
| • | Administration. The 2023 Plan is administered by our Human Capital Committee, which is comprised entirely of independent non-employee directors, and with respect to awards granted to directors, our Board. |
| • | Eligibility. We grant equity awards to a broad range of our employees. |
| • | Minimum vesting. The 2023 Plan provides for a minimum vesting period of not less than one year, though our Human Capital Committee may grant awards of up to 5% of the shares authorized under the 2023 Plan with a shorter vesting or exercise period. |
| • | Full-value awards count 2-to-1 in reducing the share reserve. Awards other than options and stock appreciation rights (“SARs”) are counted against the 2023 Plan’s share reserve in a 2-to-1 ratio. |
| • | No evergreen feature. The 2023 Plan does not contain an “evergreen” provision, but instead reserves a fixed maximum number of shares of common stock available for issuance. Shareholder approval is required to increase the number of shares of common stock available for issuance under the 2023 Plan. |
| • | No repricing. The 2023 Plan prohibits the repricing, cash-out or other exchange of underwater stock options and SARs rights without prior shareholder approval. |
| • | No discounted options or SARs. The 2023 Plan requires that stock options and SARs issued under the 2023 Plan must have an exercise price equal to at least the fair market value of our common stock on the date the award is granted, except in certain situations in which the stock options or SARs are assumed or replaced in connection with a corporate transaction. |
| • | No dividends or dividend equivalents paid on unvested restricted stock or restricted stock units (“RSUs”). Dividends or dividend equivalents are not payable with respect to options and SARs, and dividends or dividend equivalents may not be paid on unearned shares of restricted stock or RSU awards. |
| • | Limited share recycling and other share-counting provisions. In general, if an award granted under the 2023 Plan expires, is forfeited, terminates, or is settled in cash, the shares of common stock reserved for that award are returned to the share |
| Energizer Holdings, Inc. 2022 Proxy Statement 25 |
TABLE OF CONTENTS
reserve and become available for future awards. However, if shares of common stock are tendered to us or withheld by us to pay a stock option’s or SAR’s exercise period.
The Plan doesprice or to satisfy such award’s tax withholding obligations, those shares of common stock do not contain a “liberal” change of control definition.
Awards vest upon a change of control and involuntary termination (double-trigger) orbecome available for future awards. Also, if a buyerSAR is exercised, we subtract from the 2023 Plan share reserve the full number of our business does not assume outstanding awards.
Awards areShares subject to our general clawback policy and our anti-hedging and anti-pledging policy (the Plan makes reference to these policies).
The Plan places caps on annual amounts granted with respect to options, SARs, performance-based and time-based awards, cash bonus awards andnon-employee director grants.
The Plan restricts the recyclingportion of shares under options and SARs.
Dividends or dividend equivalents are not payable with respect to options and SARs, and dividends or dividend equivalents may not be paid on unearnedthe SAR actually exercised, regardless of how many shares of restrictedcommon stock or restricted stock equivalent awards.
Awards other than options and SARs are counted againstactually were used to settle the share reserve in a2-to-1 ratio.
SAR.| • | Annual limits. The 2023 Plan places caps on annual amounts granted with respect to options, SARs, performance-based and time-based awards, cash bonus awards and non-employee director grants. |
| • | No tax gross-ups. The 2023 Plan does not provide for any tax gross-ups. |
| • | Clawback. Awards are subject to clawback under the terms of our clawback policy and pursuant to applicable laws, regulations and stock exchange listing requirements. Awards are also subject to our securities trading policy, which includes prohibitions on hedging and pledging. |
The Plan prohibits the repricing of any options, SARs or other stock-based award absent shareholder approval.
Grant PracticesThe Plan has flexible share usage provisions.
GRANT PRACTICES
The Company hasWe have a history of granting restricted stock units (also known as restricted stock equivalents)RSUs to our executives, non-management directors and employees throughout ournon-management directors. Restricted stock units (“RSUs”), organization. RSUs, as full-value awards, are less dilutive to shareholders than stock options or SARs, as the Companywe may grant fewer of such awards to achieve the intended economic effect. Awards granted to our executives in fiscal 2022 generally condition vesting of the majority70% of the award on the achievement of Company performance targets over three years and 30% of the award on continued employment with the Companyus over the same period asperiod. We have also historically granted a conditionmix of performance-based and time-based awards to vestingcertain of the remainder of theaward. Non-managementour non-executive employees based on their role within our organization. Non-employee directors receive annual grants whichthat generally vest after one year. We do not anticipate making any material changes in our grant practices.
practices when making grants under the 2023 Plan.
Our gross average share usage rate, sometimes referred to as
burnrun rate, over the three years ended September 30,
20192022 (calculated as equity-based awards granted under our equity compensation plan for the relevant year, divided by average basic common shares outstanding for that year) is approximately
1.1%1.4%. Based on the gross average share usage rate of
1.1%1.4%, the
6,500,000approximately 7.3 million shares
of our common stock available for future grants under the
2023 Plan
(which includes the shares remaining available for issuance under the 2020 Plan as of the date the 2023 Plan is approved by our shareholders) should enable us to continue to grant equity as a portion of employee compensation for the next
four to fivethree years. The following
data,data*, as disclosed in our Annual Reports on Form
10-K for fiscal years
2017-2019,2020 through 2022, was used for the
burnrun rate calculation for the last three years:
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
Fiscal Year | | Options Granted | | Full-Value Shares
Granted | | Weighted-Average Number
of Common Shares
Outstanding, Basic | | Share-Based Burn
Rate |
2019 | | | | — | | | | | 500,000 | | | | | 66,400,000 | | | | | 0.75 | % |
2018 | | | | — | | | | | 900,000 | * | | | | 59,800,000 | | | | | 1.51 | % |
2017 | | | | — | | | | | 700,000 | | | | | 61,700,000 | | | | | 1.13 | % |
| | 2022 | | | — | | | 1,200,000 | | | 69,900,000 | | | 1.7% | |
| | 2021 | | | — | | | 900,000 | | | 68,200,000 | | | 1.3% | |
| | 2020 | | | — | | | 900,000 | | | 68,800,000 | | | 1.3% | |
*
| 2018 includes approximately 200,000 shares grantedShare amounts in connection with an unfunded deferred compensation plan that was modifiedthis table have been rounded to be paid out in shares rather than cash.
the nearest 100,000. |
| | |
52 Energizer Holdings, Inc. 2019 Proxy Statement
| |
|
The potential dilution resulting from issuing all of the 6,500,0004,300,000 shares of common stock authorized under the 2023 Plan, combined with (i) shares subject to outstanding awards under the 20152020 Plan and (ii) shares that were available for future grants under the 2015 Plan which will be rolled into the Plan’s share reserveor any predecessor plan would be 11.5%12.6% on a fully-dilutedfully diluted basis as of November 29, 2019.21, 2022. No additional awards will be made under the 20152020 Plan upon approval of the 2023 Plan by our shareholders.
FORECASTED SHARE USAGE
Awards under
Summary of the 2023 Plan are determined by
Our Board approved the
Human Capital Committee, with respect to executive awards, and by our Board with respect to director grants, in its discretion. It is therefore not possible to predict the awards that will be made to particular officers, employees or directors in the future under the Plan. Pursuant to our current director compensation program, ournon-management directors are awarded RSUs representing $145,000 per year.SUMMARY OF THE OMNIBUS INCENTIVE PLAN
We adopted the2023 Plan on November 11, 2019,7, 2022, subject to and effective upon the approval of our shareholders. The following is a summary of the material aspects of the 2023 Plan. This summary is subject to the more complete description of the terms and conditions of the 2023 Plan contained in the full text of the plan document, which is attached hereto asAppendix B.B.
26 Energizer Holdings, Inc. 2022 Proxy Statement | |
TABLE OF CONTENTS
The purpose of the
2023 Plan is to provide a means through which we and our affiliates may attract capable persons to enter and remain in our employ and to provide a means whereby our employees, directors, advisors and consultants can acquire and maintain ownership of our common stock, thereby strengthening their commitment to our welfare, the welfare of our affiliates and promoting a common interest between shareholders and these individuals. The
2023 Plan is an omnibus document authorizing the establishment of
sub-plans which enables us to offer awards to our employees in
non-U.S. jurisdictions, subject to compliance with local laws applicable to the offering of awards to such employees.
The
2023 Plan is generally administered by our Human Capital
Committee.Committee or its delegate. It is required that the directors appointed to serve on the
committeeHuman Capital Committee be “independent directors,” as determined under the NYSE rules, as well as
“Non-Employee “Non-Employee Directors,” within the meaning of Rule
16b-3 under the Exchange Act. Subject to the terms of the
2023 Plan, the Human Capital Committee has the authority to grant awards, to determine the number of shares of our common stock for which each award may be granted and to determine any terms and conditions pertaining to the exercise, vesting or forfeiture of each award. The Human Capital Committee has the power, in its sole discretion, to accelerate the exercisability or vesting of any award and to remove any restriction on any restricted stock or RSU granted under the
2023 Plan. The
committeeHuman Capital Committee also has full power to construe and interpret the
2023 Plan and any award agreement executed pursuant to the
2023 Plan and to establish, amend, suspend or waive any rules for the proper administration of the
2023 Plan. The determination of the Human Capital Committee on all matters relating to the
2023 Plan or any award agreement will be conclusive.
To the extent awards are granted to our directors, our Board will determine the amount, type and terms of each award granted, and in those cases, references in this summary to the Human Capital Committee will mean instead our Board as the context requires.
Our officers, employees, directors, advisors and consultants and those of our subsidiaries or affiliates
(a(as of November 21, 2022, a total of approximately
8five executive officers, 10 board members and
369235 colleagues, totaling
387 eligibleapproximately 250 individuals) are eligible to be designated as participants under the
2023 Plan. The Human Capital Committee and our Board have the authority to determine the participants to whom awards will be granted.
| | |
| | Energizer Holdings, Inc. 2019 Proxy Statement 53
|
Number of Shares Authorized
Under the
2023 Plan, awards
for amay be granted in the aggregate equal to the total
ofof: (x) the number of shares of our common stock
remaining available for grant under the
20152020 Plan as of
November 29, 2019the date the 2023 Plan is approved by our shareholders plus (y)
6,500,0004.3 million new shares of our common
stock, may be granted in the aggregate.stock. As of November
29, 2019, 300,80821, 2022, approximately 3.0 million shares
of our common stock were still available for grant under the
20152020 Plan. As of November
29, 2019,21, 2022, we had outstanding
2,116,651 full value awards (i.e., RSUs)approximately another 3.0 million shares of
our common stock
underlying RSUs and performance-based awards (“PSUs”) granted under our
2015 Plan;2020 Plan and any predecessor plan (assuming that all PSUs granted under the 2020 Plan will payout at maximum performance); no options or SARs are outstanding under
thatthe 2020 Plan or any predecessor plan. Any shares of our stock subject to an award
under our 2015 Plan that expires, is forfeited, otherwise terminates, or is settled in cash,
including with respect to any award under our 2020 Plan, will again be available for future grant under
thisthe 2023 Plan.
Awards other than options and SARs will be counted against the reserve in a2-to-1 ratio.Any dividends or dividend equivalents paid in cash in connection with outstanding awards, shares subject to an award that is forfeited, cancelled, terminated, expires or lapses for any reason, shares and awards granted through the settlement, assumption, or substitution of outstanding awards previously granted, or through obligations to grant future awards, as a result of a merger, consolidation,spin-off or acquisition of the employing company with or by us will not be applied to the share limitation described above. Awards payable in cash will not be counted against the share reserve unless actual payment is made in shares of our stock. If an award is to be settled in cash, the number of shares on which the award is based will not be counted against the share reserve unless payment is made in shares rather than cash.
In addition, other than with respect to options and SARs, shares delivered or withheld in satisfaction of the purchase price or applicable tax withholding obligations with respect to an award (including awards granted under our 2015 Plan)2020 Plan or any predecessor plan) will also be available for future grants.
Awards other than options and SARs will be counted against the 2023 Plan’s share reserve in a 2-to-1 ratio.
Any dividends or dividend equivalents paid in cash in connection with outstanding awards, shares of common stock and awards granted through the settlement, assumption, or substitution of outstanding awards previously granted, or through obligations to grant future awards, as a result of a merger, consolidation, spin-off or acquisition of the employing company with or by us and awards payable or settled in cash will not be applied to the share limitation described above.
With respect to options and SARs, shares delivered or withheld in satisfaction of the purchase price or applicable tax withholding obligations with respect to an award (including awards granted under our 2015 Plan)2020 Plan or any predecessor plan), shares of common stock subject to SARs (including SARs granted under our 2015 Plan)2020 Plan or any predecessor plan) that are not issued in connection with its stock settlement or exercise and shares of common stock reacquired by us on the open market or otherwise using cash proceeds from the exercise of options (including options awarded under our 2015 Plan)2020 Plan or any predecessor plan) will not be added back to the number of shares reserved for issuance under the 2023 Plan and will not be available for future grants.
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The
2023 Plan will have a term of 10 years from the date it is approved by our shareholders, and no further awards may be granted after that date.
Terms and Conditions of Awards
Under the
2023 Plan, the Human Capital Committee is authorized to grant awards of nonqualified stock options (“NSOs”), incentive stock options (“ISOs”), SARs, restricted stock, RSUs (including PSUs), stock bonus awards, cash bonus awards or
performance basedperformance-based awards. Our Board may grant
NSOs, SARs, restricted stock, RSUs, and stock bonus awardsany type of award authorized under the 2023 Plan to our
directors.directors other than ISOs.
Options.
Options to purchase shares of common stock are either “qualified,” meaning they are intended to satisfy the requirements of Section 422 of the Internal Revenue Code (“Code”of 1986, as amended (the “Code”), for incentive stock options,ISOs, or “nonqualified,” meaning they are not intended to satisfy the requirements of Section 422 of the Code. An option provides a participant with the right to purchase, within a specified period of time, a stated number of shares of our common stock at the price specified in the award agreement. Options granted under the 2023 Plan will be subject to the terms, including the exercise price and the conditions and timing of exercise, not inconsistent with the 2023 Plan, determined by the Human Capital Committee and specified in the applicable award agreement. The maximum term of an option granted under the 2023 Plan will be ten years from the date of grant (or five years in the case of an ISO granted to a 10.0%10% shareholder).The exercise price per share paid by a participant will be determined by the Human Capital Committee at the time of grant but will not be less than
100.0%100% of the fair market value of one share on the date the option is granted (or no less than
110.0%110% of such fair market value in the case of an ISO granted to an employee who is a
10.0%10% shareholder), with the exception of options granted as substitute awards. Payment in respect of the exercise of an option may be made in cash, except that the Human Capital Committee may, in its discretion, allow such payment to be made by surrender of unrestricted shares of our common stock (at their fair market value on the date of exercise), or by such other method as the
committeeHuman Capital Committee may determine and that is permitted by law. The Human Capital Committee may, in its discretion and to the extent permitted by law, allow such payment to be made through a broker-assisted cashless exercise mechanism. In no event are dividends or dividend equivalents payable with respect to any option award.
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SARs. A SAR is a contractual right that allows a participant to receive, either in the form of cash, shares of our common stock or both, the appreciation, if any, in the value of one share of our common stock over a certain period of time. An option granted under the 2023 Plan may include SARs, either on the date of grant or, except in the case of an ISO, by subsequent amendment. The Human Capital Committee may also award SARs to a participant independent of the grant of an option. SARs granted in connection with an option will become exercisable, be transferable and will expire according to the same vesting schedule, transferability rules and expiration provisions as the corresponding option. If SARs are granted independent of an option, the SARs will become exercisable, be transferable and will expire in accordance with the vesting schedule, transferability rules and the expiration provisions established by the committeeHuman Capital Committee and reflected in the award agreement. In no event are dividends or dividend equivalents payable with respect to any SAR award.
Restricted Stock.
An award of restricted stock is a grant of shares subject to conditions and restrictions set by the Human Capital Committee. The grant or the vesting of an award of restricted stock may be conditioned upon service to us or our affiliates or upon the attainment of performance goals or other factors, as determined in the discretion of the committee.Human Capital Committee. The Human Capital Committee may also, in its discretion, provide for the lapse of restrictions imposed upon an award of restricted stock. Holders of an award of restricted stock will have, with respect to the restricted stock granted, all of the rights of a shareholder, including the right to vote and to receive dividends; however, any dividends paid with respect to unvested shares will be withheld by the Company and only paid (without interest) to the participant if the underlying shares become vested.Restricted Stock Units.
RSUs. An award of RSUs is a grant valued in terms of our common stock. The Human Capital Committee establishes the terms, conditions and restrictions applicable to each award in an award agreement, including the time or times at which awards will be granted or vested and the number of “units” to be covered by each award; a “unit” represents one share of our common stock. To the extent provided in an award agreement, each unit awarded to a participant will be credited with an amount equal to the cash or stock dividends paid by the Company in respect of one share of our common stock (“dividend equivalents”). Dividend equivalents will be withheld by us for the participant’s account. Upon expiration of the vesting period with respect to any units covered by an award, we will deliver to the participant (i) one share of our common stock or, at the election of the Human Capital Committee, an amount in cash equal to the fair market value of that number of shares at the expiration of the period over which the units are to be earned with respect to which the vesting period has expired and (ii) cash or shares of common stock equal to the dividend equivalents credited with respect to each unit. Interest will not be credited on any dividend equivalents withheld.
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Stock Bonus Awards.
TheSubject to the minimum vesting requirements, the Human Capital Committee may, in its discretion, grant an award of unrestricted shares of our common stock, including, without limitation, fully-vestedfully vested deferred stock units, either alone or in tandem with other awards, under such terms and conditions as the committeeHuman Capital Committee in its sole discretion may decide. A stock bonus award will be granted as, or in payment of, a bonus, or to provide special incentives or recognize special achievements or contributions.
Cash Bonus Awards.
The Human Capital Committee may grant cash bonus awards. Any such award may be subject to a performance period, performance goals or such other terms and conditions as the committee,Human Capital Committee, in its sole discretion, may decide.
Performance-Based Awards.
The Human Capital Committee may grant any award under the 2023 Plan in the form of a PSU (including a cash bonus award) by conditioning the vesting of the award on the satisfaction of one or more performance goals, including but not limited to:including: earnings per share, net earnings per share or growth in such measures,measures; revenue, net revenue, income, net income or growth in revenue or income (all either before or after taxes),; return measures (including, but not limited to, return on assets, capital, investment, equity, revenue or sales),; cash flow return on investments, which equals net cash flows divided by owners’ equity,equity; controllable earnings (a division’s operating profit, excluding the amortization of goodwill and intangible assets, less a charge for the interest cost for the average working capital investment by the division),; operating earnings or net operating earnings,earnings; costs or cost control measures,measures; share price (including, but not limited to, growth measures),; total shareholder return (stock price appreciation plus dividends),; economic value added, EBITDA,added; EBITDA; operating margin or growth in operating margin,margin; market share or growth in market share,share; cash flow, cash flow from operations, free cash flow, or growth in such measures,measures; sales revenue or volume or growth in such measures,measures; gross margin or growth in gross margin, productivity,margin; productivity; brand contribution,contribution; product quality,quality; corporate value measures,measures; goals related to acquisitions, divestitures or customer satisfaction, diversity,satisfaction; diversity; index comparisons,comparisons; debt-to-equity ordebt-to-stockholders’ equity ratio,ratio; working capital,capital; risk mitigation,mitigation; sustainability and environmental impact,impact; employee retention,retention; expense or expense control measures (including, but not limited to average unit cost, selling, general, and administrative expenses),; and any other objective or subjective criterion or criteria that the committeeHuman Capital Committee may select from time to time. | | |
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Performance may be measured on an individual, corporate group, business unit, subsidiary, division, department, region, function, market or consolidated basis and may be measured absolutely, relatively to our peers or with a performance goal established by combining two or more performance goals. In establishing the performance goals, the committeeHuman Capital Committee may provide that the performance goals will be adjusted to account for the effects of acquisitions, divestitures, extraordinary dividends, stocksplit-ups, stock dividends or distributions, issuances of any targeted stock, recapitalizations, warrants or rights issuances or combinations, exchanges or reclassifications with respect to any outstanding class or series of common stock, or a corporate transaction, any consolidationtransactions, consolidations of the Company and another corporation into another corporation, any separationseparations of the Company or its business units (including a spinoff or other distribution of stock or property by the Company), any reorganizationreorganizations of the Company, or any partial or complete liquidation by the Company, or sale of all or substantially all of the assets of the Company, or exclusion ofnon-consolidated subsidiaries, or measures intended to account for variations in the exchange rate between foreign currencies and budgeted exchange rates, or other extraordinary items or any other event or circumstance the committeeHuman Capital Committee deems appropriate. The Human Capital Committee, in its discretion, may adjust any earned award.
Stock-Related Deferred Compensation
The Human Capital Committee may, in its discretion, permit the deferral of payment of an employee’s award in the form of either common stock or common stock equivalents (with each such equivalent corresponding to a share of our common stock), under such terms and conditions as it may prescribe in the award agreement or a separate election form, or pursuant to the terms of any deferred compensation plan under which such common stock equivalents may be granted. In addition, the committeeHuman Capital Committee may, in any fiscal year, provide for an additional matching deferral to be credited to an employee’s account under any such deferred compensation plan. The committeeHuman Capital Committee may also permit hypothetical account balances of other cash or mutual fund equivalents maintained pursuant to any such deferred compensation plan to be converted, at the discretion of the participant, into the form of common stock equivalents, or to permit common stock equivalents to be converted into account balances of such other cash or mutual fund equivalents, upon the terms set forth in such plans as well as such other terms and conditions as the committeeHuman Capital Committee may, in its discretion, determine. The Human Capital Committee may, in its discretion, determine whether any deferral in the form of common stock equivalents, including deferrals under the terms of any deferred compensation plan of ours, will be paid on distribution in the form of cash or in shares of our stock. Any such deferrals are intended to comply with Section 409A of the Code.
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The maximum number of shares of common stock that may be subject to options and/or SARs granted to an individual during any fiscal year may not exceed 1,000,000 shares.
The maximum number of shares of common stock that may be subject to performance-based awards granted to an individual during any fiscal year is limited to 1,000,000 shares (or the cash equivalent).
The maximum number of shares of common stock that may be subject to time-based awards granted to an individual during any fiscal year is limited to 1,000,000 shares (or the cash equivalent).
The maximum amount payable in any fiscal year to any participant pursuant to a cash bonus under ourthe 2023 Plan is $10,000,000.
The maximum number of shares of common stock subject to awards granted during a single calendar year to any director, taken together with any cash fees paid during the calendar year, in respect of such director’s service as a member of our Board, shallmay not have an aggregate fair market value in excess of $1,000,000 (determined as of the date of grant).
Awards granted in a fiscal year but cancelled during that same year will continue to be applied against the annual limit for that year, despite cancellation.
Impact of Recapitalization
In the event of changes in the outstanding stock or capital structure of the Company (such as a stock split, recapitalization or other transactions or events as described in the
2023 Plan), awards granted under the
2023 Plan as well as the maximum number of shares of our common stock which may be delivered under the
2023 Plan
or to any one individual, will be subject to adjustment or substitution, as determined by the Human Capital Committee in its sole discretion, as to the number, price or kind of a share of common stock or other consideration subject to such award, or as otherwise determined by the
committeeHuman Capital Committee to be equitable.
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Other than in connection with equitable adjustments for certain corporate events or in connection with a change of control, the
2023 Plan prohibits the repricing of options, SARs or other stock-based awards granted under the
2023 Plan and the cash buyout of underwater options, SARs or other stock-based awards without shareholder approval.
Minimum Vesting
Except for director awards, awards
Awards settled in shares of our common stock must have a minimum vesting or exercise schedule of not less than one year, though the Human Capital Committee may grant awards of up to 5 percent of the shares authorized under the
2023 Plan with a shorter vesting or exercise period. This limitation does not preclude the Human Capital Committee from granting awards that vest or become exercisable earlier due to circumstances such as death, retirement,
disability or involuntary termination of
employment,service (other than a termination for cause) or the achievement of performance objectives over a period of at least one year.
Change of Control
Awards held by a participant who is involuntarily terminated within 12 months following a change of control or who is terminated in contemplation
In the event of a change of control, shall become fullythe Human Capital Committee may, in its discretion, cancel any outstanding award, whether vested or unvested, and, immediately exercisable, any restricted period will end atin exchange for such cancellation, pay the timeholder in cash or stock (or a combination of such termination,cash and all incomplete performance periods will endstock) the value of the award based on the dateprice per share of suchcommon stock received by other shareholders in connection with the change of control. The 2023 Plan further requires automatic vesting if a buyer of our business does not assume outstanding awards.
In addition, the Human Capital Committee will determine the extent to which performance goals with respect to an award have been met based upon such audited or unaudited financial information then available, as it deems relevant, cause to be paid to the applicable participant partial or full awards with respect to performance goals for each award based upon the
committee’sHuman Capital Committee’s determination of the degree of attainment of performance goals, and cause the award, if previously deferred, to be settled in full as soon as possible.
The Human Capital Committee may,
Awards held by a participant who is involuntarily terminated within 12 months following a change of control or who is terminated in its discretion, cancelcontemplation of a change of control will become fully vested and immediately exercisable, any outstanding vested awardrestricted period will end at the time of such termination, and pay the holder in cash and/or stock the value of the award basedall incomplete performance periods will end on the price per sharedate of common stock received by other shareholders in connection with thesuch change of control. The Plan further requires automatic vesting if a buyer of our business does not assume outstanding awards.
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280G Modified Cutback.
In the event any payment or the value of any benefit received or to be received by a participant in connection with or contingent upon a change of control is determined, under Plan provisions, to be subject to an excise tax imposed by Section 4999, then we will reduce the aggregate amount of the payments payable to the participant so that no excise tax will be payable by the individual and the payments will not cease to be deductible by us by reason of Section 280G of the Code. However, we will not reduce the aggregate amount of the payments payable to the participant if theafter-tax amount of the unreduced payments is greater than theafter-tax amount that would have been paid had we reduced the payments in accordance with the foregoing sentence.
Clawback,
Non-Compete and
Hedging/Hedging and Pledging Restrictions
Awards will be subject to:
Deduction and clawback pursuant to our clawback policy and pursuant to applicable laws, regulations and stock exchange listing requirements, and our Company policy.
requirements.Forfeiture if a participant engages in competition with the Company.
The Company’s securities trading policy, which includes prohibitions on hedging and pledging policy.
pledging.Generally, each award may be exercised,
to the extent applicable, during the participant’s lifetime only by the participant or, if permissible under applicable law, by the participant’s guardian or legal representative, and
sucheach award may not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by a participant other than by will or by the laws of descent and distribution.
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The Human Capital Committee may, in its discretion, however, provide that awards granted under the 2023 Plan that are not ISOs may be transferred by a participant without consideration to certain “permitted transferees”, pursuant to the terms of the 2023 Plan and rules adopted by the committee.
Human Capital Committee.
Our Board may amend, suspend, or terminate the
2023 Plan or any portion thereof at any time. No such action may be taken, however, without shareholder approval if such approval is necessary to comply with any
law or regulatory requirement and no such action that would
materially impair any rights under any previous award will be effective without the consent of the person to whom such award was made. In addition, the Human Capital Committee is authorized to amend the terms of any award granted under the
2023 Plan if the amendment would not
materially impair the rights of any participant without his or her consent.
U.S. Federal Income Tax Consequences
The following is a general summary of the material U.S. federal income tax consequences of the grant, exercise and vesting of awards under the
2023 Plan and the disposition of shares acquired pursuant to the exercise or settlement of such awards and is intended to reflect the current provisions of the Code and the regulations thereunder. This summary is not intended to be a complete statement of applicable law, nor does it address foreign, state, local and payroll tax considerations. Moreover, the U.S. federal income tax consequences to any particular participant may differ from those described herein by reason of, among other things, the particular circumstances of such participant.
Options. The Code requires that, for treatment of an option as a qualified option (ISO),an ISO, shares of our common stock acquired through the exercise of a qualified option cannot be disposed of before the later of (i) two years from the date of grant of the option or (ii) one year from the date of exercise. Holders of qualified options will generally incur no federal income tax liability at the time of grant or upon exercise of those options. However, the spread at exercise will be an “item of tax preference,” which may give rise to “alternative minimum tax” liability for the taxable year in which the exercise occurs. If the holder does not dispose of the shares before two years following the date of grant and one year following the date of exercise, the difference between the exercise price and the amount realized upon disposition of the shares will constitute long-term capital gain or loss, as the case may be. Assuming both holding periods are satisfied, no deduction will be allowed to us for federal income tax purposes in connection with the grant or exercise of the qualified option. If, within two years following the date of grant or within one year following the date of exercise, the holder of shares acquired through the exercise of a qualified option disposes of those shares, the participant will generally realize taxable compensation at the time of such disposition equal to the difference between the exercise price and the lesser of the fair market value of the share on the date of exercise or the amount realized on the subsequent disposition of the shares, and that amount will generally be deductible by us for federal income tax purposes, subject to the possible limitations on deductibility under Sections 280G and 162(m) of the Code for compensation paid to executives designated in those Sections.
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Code. Finally, if an otherwise qualified option becomes first exercisable in any one year for shares having an aggregate value in excess of $100,000 (based on the grant date value), the portion of the qualified option in respect of those excess shares will be treated as a nonqualified stock option for federal income tax purposes. No income will be realized by a participant upon grant of a nonqualified stock option. Upon the exercise of a nonqualified stock option, the participant will recognize ordinary compensation income in an amount equal to the excess, if any, of the fair market value of the underlying exercised shares over the option exercise price paid at the time of exercise, and the participant’s tax basis will equal the sum of the compensation income recognized and the exercise price.
We will be able to deduct this same amount for U.S. federal income tax purposes, but such deduction may be limited under Sections 280G and 162(m) of the Code for compensation paid to certain executives designated in those Sections. In the event of a sale of shares received upon the exercise of a nonqualified stock option, any appreciation or depreciation after the exercise date generally will be taxed as capital gain or loss
and will be long-term gain(long-term or
loss ifshort-term, depending upon the holding period
of the shares sold). We will be able to deduct this same amount for
U.S. federal income tax purposes, but such
shares is more than one year.deduction may be limited under Sections 280G and 162(m) of the Code.
SARs.
No income will be realized by a participant upon grant of a SAR. Upon the exercise of a SAR, the participant will recognize ordinary compensation income in an amount equal to the fair market value of the payment received in respect of the SAR. In the event of a sale of shares received upon the exercise of an SAR, any appreciation or depreciation after the exercise date generally will be taxed as capital gain or loss (long-term or short-term, depending upon the holding period of the shares sold). We will be able to deduct this same amount for U.S. federal income tax purposes, but such deduction may be limited under Sections 280G and 162(m) of the Code for compensation paid to certain executives designated in those Sections.Code. | | |
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Restricted Stock. A participant will not be subject to tax upon the grant of an award of restricted stock unless the participant otherwise elects to be taxed at the time of grant pursuant to Section 83(b) of the Code. On the date an award of restricted stock becomes transferable or is no longer subject to a substantial risk of forfeiture, the participant will have taxable compensation equal to the difference between the fair market value of the shares on that date over the amount the participant paid for such shares, if any, unless the participant made an election under Section 83(b) of the Code to be taxed at the time of grant. If the participant made an election under Section 83(b), the participant will have taxable compensation at the time of grant equal to the difference between the fair market value of the shares on the date of grant over the amount the participant paid for such shares, if any. If the election is made, the participant will not be allowedhave limitations on the ability to take a deduction for the value of any shares whichthat may be subsequently forfeited. Special rules apply to the receipt andSubsequent disposition of restrictedthe shares received by officers and directors who are subject to Section 16(b)will be taxed as capital gain or loss (long-term or short-term, depending upon the holding period of the Exchange Act.shares sold). We will be able to deduct, at the same time as it is recognized by the participant, the amount of taxable compensation to the participant for U.S. federal income tax purposes, but such deduction may be limited under Sections 280G and 162(m) of the Code for compensation paid to certain executives designated in those Sections.Code.
Restricted Stock Units.
RSUs. A participant will not be subject to tax upon the grant of RSUs. Rather, upon the delivery of shares or cash pursuant to the award, the participant will have taxable compensation equal to the fair market value of the number of shares (or the amount of cash) the participant actually receives with respect to the award.award and on subsequent disposition of the shares, the participant will realize a capital gain or loss (long-term or short-term, depending upon the holding period of the shares sold). We will be able to deduct the amount of taxable compensation to the participant for U.S. federal income tax purposes, but the deduction may be limited under Sections 280G and 162(m) of the Code for compensation paid to certain executives designated in those Sections.Code.
Stock Bonus Awards.
A participant will have taxable compensation equal to the difference between the fair market value of the shares on the date the award is made over the amount the participant paid for such shares, if any.any, and on subsequent disposition of the shares, the participant will realize a capital gain or loss (long-term or short-term, depending upon the holding period of the shares sold). We will be able to deduct, at the same time as it is recognized by the participant, the amount of taxable compensation to the participant for U.S. federal income tax purposes, but such deduction may be limited under Sections 280G and 162(m) of the Code for compensation paid to certain executives designated in those Sections.Code.
Cash Bonus Awards.
A participant will have taxable compensation at the time a cash bonus is earned and paid. We will be able to deduct the amount of taxable compensation to the participant for U.S. federal income tax purposes, but the deduction may be limited under Sections 280G and 162(m) of the Code for compensation paid to certain executives designated in those Sections.Code.
It is not possible at this time to determine the benefits that will be received by executive officers, by other employees or by outside directors under the
2023 Plan if the
2023 Plan is approved by
theour shareholders. Such benefits will depend on future actions of the Human Capital Committee or the Board, the fair market value of our common stock at various future dates, the extent to which performance goals set by the
committeeHuman Capital Committee are met
and/or the individual performance of the particular executive officer or employee.
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EQUITY COMPENSATION PLAN INFORMATION
The following table gives information about the Company’s common stock that may be issued upon the exercise of options, warrants and rights under all of the Company’s existing equity compensation plans as of September 30,
2019: | | | | | | | | |
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| Plan Category | | Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights (1) | | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (2) | | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities
Reflected in Column (1), and as Noted Below) (3) |
Equity compensation plans approved by security holders | | 1,233,054 | | N/A | | 3,215,308 |
Equity compensation plans not approved by security holders | | None | | N/A | | None |
Total | | 1,233,054 | | N/A | | 3,215,308 |
| | Equity compensation plans approved by security holders | | | 1,675,085 | | | N/A | | | 6,008,273 | |
| | Equity compensation plans not approved by security holders | | | None | | | N/A | | | None | |
| | Total | | | 1,675,085 | | | N/A | | | 6,008,273 | |
(1)
| The number of securities to be issued upon exercise of outstanding options, warrants and rights shown above, as of September 30, 2019,2022, includes 1,233,054approximately 1,675,085 restricted stock equivalents whichand units that have been granted under the terms of the 2015 Energizer Holdings, Inc. Equity Incentive Plan (including our former parent company stock awards reissued and converted into Energizer stock awards in connection withor theSpin-Off). 2020 Plan. This number reflects target payout on performance awards. If the awards were to pay out at stretch, the number of securities to be issued upon issuancepay out would be 1,863,214. As of November 25, 2019, of the outstanding stock equivalents granted, approximately 574,000 have vested and converted into outstanding shares of our common stock. An additional 521,000 restricted stock equivalents have been granted, including 206,000 performance shares granted at target payout. 2,541,839. |
(2)
| The weighted average exercise price does not take into account securities whichthat will be issued upon conversion of outstanding restricted stock equivalents. equivalents and units. |
(3)
| This number only reflects securities available under the 2015 Energizer Holdings, Inc. Equity Incentive Plan or the 2020 Plan. Under the terms of that plan,those plans, any awards other than options, phantom stock options or stock appreciation rights are to be counted against the reserve available for issuance in a 2 to 1 ratio. This number reflects the target equivalents that could potentially be paid out. If payout numbers were at stretch, the number of shares available for issuance would be 1,954,988. approximately 4,274,765. |
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Additional InformationTABLE OF CONTENTS
Compensation Discussion and analysis The following Compensation Discussion & Analysis describes the fiscal 2022 compensation program for our named executive officers (“NEOs”). For fiscal 2022, our NEOs were:
Mark S. LaVigne
President and Chief Executive Officer
Age: 51
Years at Energizer: 12
John J. Drabik
Executive Vice President, Chief Financial Officer
Age: 50
Years at Energizer: 21
Michael A. Lampman
Executive Vice President, North America & Global Business Units
Age: 57
Years at Energizer: 36
Robin W. Vauth
Executive Vice President, International
Age: 56
Years at Energizer: 15
Susan K. Drath
Chief Human Capital Officer
Age: 52
Years at Energizer: 30
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RESPONSIVENESS TO 2022 SAY ON PAY VOTE
As previously discussed, we conduct shareholder engagement throughout the year and annually provide shareholders with an opportunity to cast a nonbinding, advisory Say on Pay vote. The overwhelming approval of our Say on Pay vote by our shareholders at our 2022 Annual Shareholders’ Meeting influenced our decision to largely maintain our approach to our executive compensation program for fiscal 2022. We updated our long-term performance award metrics to include relative total shareholder return, aligning executive compensation with investor experience and giving shareholders insight into our shareholder returns relative to a relevant group of peers—companies included in the Russell 2000 Consumer Staples Index as of October 1, 2021. The Human Capital Committee will continue to consider shareholder feedback and the outcome of Say on Pay vote results in making future compensation decisions.
PAY FOR PERFORMANCE AND COMPENSATION PHILOSOPHY Our compensation philosophy is to pay for performance over the long term, as well as on an annual basis. Our executive compensation program provides a mix of salary, incentives, and benefits paid over time to align executive officer and shareholder interests. We consider our executive pay program to be instrumental in helping us achieve our business objectives and effective in rewarding our executive officers for their role in achieving financial and operational performance. The Human Capital Committee, which is comprised entirely of independent directors, has primary responsibility for approving our compensation strategy and philosophy and the compensation programs applicable to our executive officers.
| | ✔ Pay for performance, with approximately 70% of our CEO’s total compensation performance-based and approximately 63% of our other NEOs’ total compensation performance-based
✔ Establish threshold, target and maximum awards under our annual and long-term incentive programs
✔ Use balanced performance metrics for annual and long-term incentive programs
✔ Use rigorous goal setting aligned to our externally disclosed annual and multi-year targets
✔ Have stock ownership requirements for our executive officers
✔ Limit perquisites to items that serve a reasonable business purpose
✔ Closely monitor risks associated with our compensation programs and individual compensation decisions
✔ Have a clawback policy for all incentive compensation earned by our executive officers | | | ✘ Pay tax gross-ups on any compensation
✘ Allow speculative trading, hedging or pledging transactions by our colleagues
✘ Enter into employment agreements with our executive officers (unless standard market practice)
✘ Provide executive officer severance payments and benefits exceeding 2x salary and annual incentive award other than in connection with a change of control
✘ Guarantee salary increases | |
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The Human Capital Committee allocates pay in a manner designed to place the Company’s performance at the forefront of our overall executive compensation program. Our focus on pay for performance is best demonstrated through the structure of our executive compensation program, where the majority of annual executive pay is at risk and subject to annual and long-term performance requirements.
The Human Capital Committee has reviewed the pay-for-performance relationship, prepared by our independent compensation consultant, looking at CEO realizable pay and total shareholder return and deemed it to be appropriate.
COMPENSATION PHILOSOPHY
The philosophy underlying our executive compensation program is to pay compensation that is simple, aligned and balanced. Equally important, we view compensation practices as a way to communicate our goals and standards of conduct and performance, and to motivate and reward colleagues in relation to their achievements. Overall, the same principles that govern the compensation of all our salaried colleagues apply to the compensation of our executive officers. Within this framework, we observe the following, guiding principles:
| | SIMPLE | | | Compensation methods should be transparent, provide a clear link between performance metrics and Company strategy and minimize perquisites | | | • | | | Use straightforward annual and long-term incentive plan metrics that are directly tied to business performance | |
| | • | | | Froze pension accruals | |
| | • | | | Limit the use of all perquisites for executive officers in fiscal 2022 | |
| | ALIGNED | | | The interests of our executive officers should be aligned with those of our shareholders | | | • | | | Set a majority of executive officers’ total compensation as performance-based pay | |
| | • | | | Include relative TSR as an LTI metric, aligning executive compensation with investor experience and a market-based measure | |
| | • | | | Have a clawback policy, a securities trading policy with prohibitions on hedging and pledging, and stock ownership requirements | |
| | BALANCED | | | Components of compensation should complement each other and offset risk of overemphasis on any one metric or time period | | | • | | | Use a combination of pay elements that reward achievement of objectives across annual and long-term time periods | |
| | • | | | Balance annual and long-term incentive plans to drive results in the short term without sacrificing long-term value creation | |
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FISCAL 2022 PAY COMPONENTS Our fiscal 2022 pay components remained the same as fiscal 2021.
| | BASE SALARY | |
| | Determined based on job scope, experience, market comparable positions and operating results | | | Provides fixed income to attract and retain top talent | | | Semi-monthly cash payment | |
| | ANNUAL INCENTIVE PROGRAM | |
| | Provides short-term variable pay for performance | | | Motivates executives to achieve the Company’s annual strategic and financial goals | | | Single cash payment following determination of performance | |
| | LONG-TERM INCENTIVE PROGRAM | |
| | We use two programs to ensure a strong link between incentive compensation opportunities and longer-term objectives: | |
| | Restricted stock unit awards that vest only on achievement of pre-determined performance targets with a three-year vesting period
Represents 70% of equity award | | | Rewards achievement of long-term growth goals and creation of shareholder value | | | Vesting upon the achievement of specific metrics over three-year performance period | |
| | Time-based restricted stock unit awards that track stock price performance over a three-year vesting period
Represents 30% of equity award | | | Promotes long-term retention and supports stock ownership and alignment with shareholders | | | Vesting upon the three-year anniversary of grant date | |
| | RETIREMENT AND OTHER BENEFIT PLANS | |
| | Retirement and other benefit plans sponsored by the Company on the same terms and conditions applicable to all eligible colleagues | | | Provides retirement and other benefits to attract and retain top talent | | | In accordance with the terms of the plans | |
| | ANNUAL COMPENSATION-RELATED RISK EVALUATION | |
| | | |
| | We monitor the risks associated with our compensation program on an ongoing basis. Our compensation risk assessment occurs in two parts: a review of the Company’s compensation programs and a review of compensation decisions and payments, with a focus on our executive officers. In October 2022, with input from the Human Capital Committee’s independent compensation consultant, the Human Capital Committee conducted a review of our compensation programs, including the executive compensation program, to assess the risks arising from our compensation policies and practices. The Human Capital Committee agreed with the review’s findings that these risks were within our ability to effectively monitor and manage and that these compensation programs do not encourage unnecessary or excessive risk-taking and do not create risks that are reasonably likely to have a material adverse effect on the Company. In particular, the Human Capital Committee determined that the following design features reduce the risk within our compensation policies and practices: | |
| | • | | | Compensation program design provides a balanced mix of cash and equity, annual and longer-term incentives | |
| | • | | | Maximum payout levels for bonuses and performance awards are capped | |
| | • | | | Multiple performance metrics are used to determine payouts under the annual and long-term incentive programs | |
| | • | | | Executive officers are subject to stock ownership and retention guidelines | |
| | • | | | A clawback policy and securities trading policy, with prohibitions on hedging and pledging, are in place | |
STOCK OWNERSHIP REQUIREMENTS Our stock ownership and retention requirements align executive officer and shareholder interests by linking the value realized from equity-based awards to sustainable Company performance. Our NEOs are required to meet the stock ownership requirements presented below.
| | Chief Executive Officer | | | 6x base salary | |
| | All Other Executive Officers | | | 3x base salary | |
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Newly appointed executive officers are required to retain at least fifty percent (50%) of the shares they receive from the vesting of restricted stock units until they become compliant and are given a period of five years to attain full compliance with the requirements. For purposes of this determination, stock ownership includes shares of our common stock that are owned directly or by family members residing with the executive officer or by family trusts, vested and deferred restricted stock equivalents and unvested restricted stock units (other than stock units subject to achievement of performance targets). As of September 30, 2022, each of our NEOs was in compliance with the stock ownership requirements.
HEDGING AND PLEDGING PROHIBITION Under our Securities Trading Policy, directors, officers, colleagues and their related persons are prohibited from engaging in hedging or monetization transactions with respect to Energizer securities, including:
trading in put or call options, warrants, swaps, forwards and other derivatives or similar instruments on the Company’s securities;
selling the Company’s securities “short”; and
purchasing financial instruments (including prepaid variable forward contracts, equity swaps, collars, and exchange funds) that are designed to profit from, hedge or offset any change in the market value of equity securities (1) granted to the director, officer, or colleague by the Company as part of the compensation of such person, or (2) held, directly or indirectly, by such person.
The policy also prohibits directors, officers, colleagues, and their related persons from holding the Company’s securities in a margin account or otherwise pledging the Company’s securities in any way including as collateral for a loan.
Under our annual incentive awards and long-term incentive awards, in the event of a restatement of financial results to correct a material error, the Human Capital Committee is authorized to reduce or recoup an executive officer’s award, as applicable, to the extent that the Human Capital Committee determines such executive officer’s misconduct was a significant contributing factor to the need for a restatement.
HOW WE DETERMINE COMPENSATION PAY EVALUATION AND DECISION PROCESS Each year, the Human Capital Committee reviews our executive officers’ performance using a balanced and disciplined approach to determine their base salaries and variable compensation awards. The approach for fiscal 2022 included a full-year assessment of financial results. The Human Capital Committee considers various factors that collectively indicate successful management of our business, including:
Company performance, including financial and non-financial measures
The manner in which results are achieved, adherence to risk policies, and the quality of earnings
Year-over-year performance
Company performance relative to our executive compensation peer group
ROLE OF INDEPENDENT COMPENSATION CONSULTANT To help determine executive pay, the Human Capital Committee retains an independent compensation consultant for advice regarding the general competitive landscape and trends in executive compensation. In fiscal 2022, the Human Capital Committee retained a new independent compensation consultant, Farient Advisors (“Farient”). Mercer LLC (“Mercer”) had served as the Human Capital Committee’s independent compensation consultant since the Spin-Off from our former parent company in 2015. While the Human Capital Committee meets with the consultant from time to time, the Chair of the Human Capital Committee also communicates directly with the consultant between Human Capital Committee meetings. The independent compensation consultant advises the Human Capital Committee on several matters, including (1) competitive analysis (including in relation to our peer group), (2) incentive plan design, (3) updates on trends in executive and director compensation, (4) peer group composition, (5) developing strategies for how compensation can support executive officer succession planning, and (6) other compensation-related matters as requested by the Human Capital Committee.
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A representative of Farient attends committee meetings and serves as a resource to the Human Capital Committee on executive and director compensation matters. Additionally, to encourage independent review and discussion of executive compensation, the Committee meets with Farient in executive session.
The Human Capital Committee annually reviews the independence of its compensation consultant in light of SEC rules and NYSE Listed Company Rules regarding compensation consultant independence and has affirmatively concluded that Farient has no conflicts of interest relating to its engagement by the Human Capital Committee.
During fiscal 2022, the aggregate fees paid to Mercer for services related to executive compensation were approximately $105,273. In fiscal 2022, Mercer and its Marsh & McLennan affiliates were also retained by our management to provide services unrelated to executive compensation, including providing advice regarding our global pension programs in the areas of compliance, administration and funding and global compensation consulting, benchmarking below the executive officer level and insurance. The aggregate fees paid for those other services in fiscal 2022 were approximately $1,102,470. The Human Capital Committee and the Board of Directors did not review or approve the other services provided to management by Mercer and its Marsh & McLennan affiliates, as those services were approved by our management in the normal course of business.
The Human Capital Committee also annually reviews the performance of its independent compensation consultant.
EXECUTIVE COMPENSATION PEER GROUP The Human Capital Committee selects the members of our peer group and periodically examines whether peers continue to meet the criteria for inclusion described below. As part of this process, the Human Capital Committee receives advice from its independent compensation consultant and selects a peer group that includes companies that have the following characteristics:
US-based, publicly traded company in relevant industries including household products and personal products
Similar revenue with limited private label business
Similar number of employees
Global company with a diversified brand portfolio
| • | Limited concentration among customers and distribution primarily through 3rd party retailers |
For fiscal 2022 compensation planning, based on these criteria and the advice of its independent compensation consultant, the Human Capital Committee determined that the fiscal 2021 peer group remained appropriate with the exception that Edgewell Personal Care Company was added due to its similar financial profile and colleague base.
| | The Clorox Company
Spectrum Brands Holdings, Inc.
Hasbro Inc.
Central Garden & Pet Co.
The Scotts Miracle-Gro Company | | | Church & Dwight Inc.
Revlon, Inc.
Helen of Troy Ltd.
Edgewell Personal Care Company | | | Lancaster Colony Corporation
Hain Celestial Group, Inc.
Monster Beverage Corporation
Post Holdings, Inc. | |
In connection with preparations for fiscal 2023 compensation planning, the Human Capital Committee, with the assistance of Farient, conducted a full review of the composition of the peer group. When conducting its review, the Human Capital Committee considered the peer group selection characteristics mentioned above. As a result of such review, the Human Capital Committee determined that the majority of the companies listed above remained appropriate peers, but that the composition of the peer group should be modified to more closely align with Energizer’s consumer-branded product focus, business model, and competitive market for business and talent. Accordingly, the Human Capital Committee has added ACCO Brands and Prestige Consumer Healthcare to Energizer’s peer group, and removed Revlon, Inc. and Lancaster Colony Corporation. Below is the peer group that is being used for fiscal 2023 compensation planning:
| | The Clorox Company
Spectrum Brands Holdings, Inc.
Hasbro Inc.
Central Garden & Pet Co.
The Scotts Miracle-Gro Company
ACCO Brands | | | Church & Dwight Inc.
Helen of Troy Ltd.
Edgewell Personal Care Co.
Prestige Consumer Healthcare | | | Hain Celestial Group, Inc.
Monster Beverage Corporation
Post Holdings, Inc. | |
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SETTING TOTAL COMPENSATION The Human Capital Committee targets total compensation near the 50th percentile of the market and reviews size-adjusted market compensation for Energizer’s revenue size.
CEO Assessment, Compensation Process for Executive Officers and Annual Timeline CEO Assessment
With respect to our Chief Executive Officer’s pay, the Human Capital Committee conducts an annual performance assessment of the Chief Executive Officer and determines appropriate adjustments to all elements of his pay based on the following factors:
| | Analysis of the Chief Executive Officer’s performance with respect to performance goals approved by the Human Capital Committee, the effectiveness of his leadership, and his experience | | | Returns to shareholders | | | As provided by the independent compensation consultant | |
Compensation Process for Executive Officers
For the other executive officers, the Chief Executive Officer makes recommendations to the Human Capital Committee for all elements of pay. These recommendations are based on an assessment of the individual’s role, responsibilities, experience and individual performance. The Human Capital Committee also obtains market data from its independent compensation consultant and then reviews, discusses, modifies, and approves these recommendations, as appropriate.
Annual Timeline
The diagram below summarizes the Human Capital Committee’s annual process for setting executive compensation.
| | • Annual CEO performance assessment
• Annual update on Annual and Long-Term Incentive Program metrics and performance
• Review of executive compensation and regulatory environment trends
• Approve executive pay
• Review compensation risk assessment
• Approve compensation plan
| | • Quarterly update on Annual and Long-Term Incentive Program metrics and performance
• Planning for annual compensation risk assessment and approach
• Review of compensation guidelines of institutional shareholders and proxy advisors
• Annual review of Change of Control benefits | | • Quarterly update on Annual and Long-Term Incentive Program metrics and performance
• Executive Compensation peer group analysis | |
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| | PRIMARY ELEMENTS OF OUR EXECUTIVE COMPENSATION PROGRAM | |
| | • Base Salary | |
| | • Annual Incentive Program | |
| | • Long-Term Incentive Program | |
| | — Performance Restricted Stock Unit Awards | |
| | — Time-Based Restricted Stock Unit Awards | |
| | • Retirement and Other Benefits | |
The Human Capital Committee believes these pay components align the interests of our executives with those of our shareholders by basing a significant portion of total pay on performance and achievement of our short- and long-term goals. The specific mix among the individual components reflects market comparisons (primarily with respect to the median of our peer group) and individual position and performance.
The general guideline for determining salary levels for our executive officers, including the Chief Executive Officer, is to target the 50th percentile of the market taking into account other factors such as individual performance, responsibilities and experience. While we are cognizant of the competitive range, our primary goal is to compensate our executive officers at a level that is consistent with our compensation philosophy, even if this results in actual pay for some positions that may be higher or lower than the market median. The Human Capital Committee considers adjustments to base salaries for the executive officers on an annual basis.
For fiscal 2022, the Human Capital Committee determined that an increase to the base salaries of our executive officers in line with the increases provided to our colleagues generally was reasonable in light of the Company’s operating results in fiscal 2021. To remain competitive with the market, the Human Capital Committee also considered the effect of the increased salaries for our executive officers in relation to the median of the market. Separate from the Human Capital Committee’s annual review of and increase to executive officer base salaries in fiscal 2022, the base salaries of certain NEOs were increased prior to the start of fiscal 2022 in connection with promotions to new positions with the Company.
The table below sets forth the fiscal 2022 base salaries for our NEOs as well as the percentage increase for each NEO from their base salary as of October 1, 2021, as determined by the Human Capital Committee during its annual review of executive officer base salaries. The base salary adjustments for fiscal 2022 were effective December 1, 2021.
| | | | | FY2022 Base
Salary | | | Increase (%) | |
| | M.S. LaVigne | | | $970,000 | | | 5% | |
| | J.J. Drabik(1) | | | $577,500 | | | 5% | |
| | M.A. Lampman | | | $474,750 | | | 5% | |
| | R.W. Vauth(2) | | | $442,942 | | | 5% | |
| | S.K. Drath | | | $401,700 | | | 4% | |
(1)
| Effective October 1, 2021, Mr. Drabik’s base salary was increased to $550,000 in connection with his promotion to Executive Vice President and Chief Financial Officer. |
(2)
| The salary presented in the table for Mr. Vauth is shown as converted from Euros to U.S. dollars at the fiscal 2022 average conversion rate used to prepare the Company’s financial statements (1 U.S Dollar = 0.9245 Euros). |
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The annual incentive program is based on performance against certain metrics determined by the Human Capital Committee. The overall design of our fiscal 2022 annual incentive program is similar to the fiscal 2021 program. In fiscal 2022, we moved from four equally-weighted metrics to three equally-weighted metrics: Adjusted Net Sales, Adjusted Operating Profit, and Adjusted Gross Margin. Adjusted Gross Margin, which we report to our shareholders on a quarterly basis, was introduced as a new metric to help incentivize profitable revenue growth across our business. Our fiscal 2022 annual incentive award was designed to measure performance against the three equally-weighted metrics set forth in the table below (dollars in millions):
| | Adjusted
Net
Sales | | | Net Sales measures revenue and encourages development of consumer-relevant innovation and in-store execution to drive product sales | | | 33 1/3% | | | $2,790 | | | $3,016 | | | $3,243 | | | $3,115.6 | | | 143.9% | |
| | Adjusted Operating
Profit | | | Operating profit measures underlying business profit and encourages selling products, generating strong gross margins and maintaining tight cost controls | | | 33 1/3% | | | $369.2 | | | $434.4 | | | $499.6 | | | $467.2 | | | 150.4% | |
| | Adjusted
Gross
Margin Rate | | | Gross margin helps drive profitable revenue growth across our business | | | 33 1/3% | | | 36% | | | 38% | | | 40% | | | 37.7% | | | 92.4% | |
| | Total | | | | | | | | | | | | | | | | | | | | | 128.9% | |
(1)
| Adjustments to the actual achievement metrics vary from reported figures to address the impacts of currency and remove the costs from the flooding of our Brazilian manufacturing facility, the costs of exiting the Russian market and the costs of acquisition, integration and restructuring programs, including acquisition earn outs. See Appendix A for a description and reconciliation of the non-GAAP financial measures. |
Our performance target-setting philosophy is consistent with prior years, with targets tied to our annual business plan for the fiscal year and aligned with our long-term strategic plan. The performance goals for each metric are set at the beginning of the fiscal year. Each metric for the annual incentive plan reflects adjustments to financial data derived from our financial statements prepared in accordance with generally accepted accounting principles (“GAAP”) and intended to exclude certain items that the Human Capital Committee believes are not reflective of the Company’s ongoing operating performance. These items include acquisition and integration costs, unusual or non-recurring items, and variations in the exchange rate between foreign currencies and budget exchange rates. The Human Capital Committee believes these performance metrics more accurately reflect Energizer’s underlying financial and operating results. See Appendix A for a description and reconciliation of the non-GAAP financial measures.
Actual bonuses are interpolated for performance between threshold and maximum performance. No bonuses tied to performance are paid for results below the Threshold goal. The maximum bonus payout is capped at 200% for Company performance at, or above, the Stretch goal.
Each executive officer was assigned individual bonus targets based on individual performance and market practice information provided by the independent compensation consultant. For fiscal 2022, the following bonus targets, defined as a percentage of the individual’s base pay, were assigned as follows:
| | M.S. LaVigne | | | 115% | |
| | J.J. Drabik | | | 85% | |
| | M.A. Lampman | | | 60% | |
| | R.W. Vauth | | | 60% | |
| | S.K. Drath | | | 60% | |
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LONG-TERM INCENTIVE PROGRAM The 2020 Plan authorizes the Human Capital Committee to grant various types of equity awards. Consistent with prior years, the Human Capital Committee grants to key executives restricted stock unit awards, with achievement of Company performance targets over three years as a condition to vesting of the majority of the award, and continued employment with the Company over the same period as a condition to vesting of the remainder of the award. See “Executive Compensation Tables—Potential Payments Upon Termination or Change of Control”. In November 2021, the Human Capital Committee awarded three-year incentive awards with a performance-based component constituting approximately 70% of the restricted stock units vesting at target achievement and a time-based component constituting approximately 30% of the award value at target of the award.
The size of equity awards granted to our executive officers in fiscal 2022 was based on several factors, including officers’ individual performance, retention of executives, market run-rate for equity grants among our peer group, and benchmark data from our peer group provided by our independent compensation consultant.
Timing and Procedures for Grants in Fiscal 2022
Other than in exceptional cases, such as promotions or new hires, long-term incentive awards are granted in the first quarter of the fiscal year (calendar quarter ending December 31), when the Human Capital Committee determines salary levels and bonus programs for the new fiscal year.
Time-Based Restricted Stock Units
The time-based component of the equity awards granted in fiscal 2022 was based on the corresponding grant date value of the restricted stock units. The restricted stock units are stock settled at the end of the three-year period when they convert into unrestricted shares of our common stock if and to the extent that the vesting requirements are met. The number of restricted stock units granted to each executive officer is shown in the “Grants of Plan-Based Awards Table.”
Performance Restricted Stock Units
As previously discussed, in fiscal 2022, we updated our long-term performance award metrics to include relative total shareholder return, aligning executive compensation with investor experience and giving shareholders insight into our shareholder returns relative to a relevant group of peers—companies included in the Russell 2000 Consumer Staples Index as of October 1, 2021. The performance-based component of the equity awards granted in fiscal 2022 potentially vest based on performance for the period October 1, 2021 through September 30, 2024 based on the achievement of the two performance metrics set forth in the table below.
| | Cumulative
Adjusted
Earnings per Share | | | A company performance metric that aligns executive officers with shareholders through a shared focus on the earnings that accrue to a shareholder in our stock | | | 50% | |
| | Relative Total Shareholder Return | | | A newly-added market metric that aligns executive compensation with investor experience and gives shareholders insight into the Company’s shareholder returns relative to companies included in the Russell 2000 Consumer Staples Index as of October 1, 2021 | | | 50% | |
Similar to performance metrics under the Annual Incentive Program, the Human Capital Committee adopted performance metrics that use non-GAAP financial measures, which exclude certain items that the Human Capital Committee believes are not reflective of the Company’s ongoing operating performance. The Human Capital Committee believes these performance metrics more accurately reflect Energizer’s underlying financial and operating results. See Appendix A for a description and reconciliation of the non-GAAP financial measures.
The number of units granted to each NEO is shown in the “Executive Compensation Tables—Grants of Plan-Based Awards Table.” No vesting of performance based long-term incentive awards occurs for results below the Threshold goal, and the maximum vesting percentage is capped at 200% for Company performance at, or above, Stretch performance.
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Long-Term Shareholder Value We design our awards with the intention that the results we achieve for our shareholders are consistent with the results obtained under our incentive plans. The performance measures associated with the long-term performance incentive awards that were granted in November 2019 were measured over a three-year vesting period and were tied to cumulative adjusted earnings per share and cumulative adjusted free cash flow as a percentage of adjusted net sales. Total performance was weighted 50/50 to each metric. The target performance for cumulative adjusted earnings per share for 2022 was $10.90 and the target performance for cumulative adjusted free cash flow for 2022 was 13.2%. Based on the Company’s results over the three-year performance period ended September 30, 2022, neither metric hit the threshold level ($9.81 and 12.2%, respectively) and no payouts were made in November 2022. See Appendix A for a description and reconciliation of the non-GAAP financial measures.
EXECUTIVE SAVINGS INVESTMENT PLAN Certain executive officers, including certain of our NEOs, participate in the Company’s executive savings investment plan, our excess 401(k) plan, a non-qualified defined contribution plan. Under the plan, amounts that would be contributed, either by an executive or by the Company on the executive’s behalf, to the Company’s qualified defined contribution plan (the “401(k) plan”) but for limitations imposed by the IRS, are credited to the executive savings investment plan. The executive savings investment plan provides for immediate vesting of the Company matching contributions. Details of the executive savings investment plan, including the contributions, earnings, and year-end balances, are set forth in the “Non-Qualified Deferred Compensation Table.”
DEFERRED COMPENSATION PLAN Our colleagues no longer have the opportunity to defer portions of their salary and bonus compensation under the terms of our non-qualified deferred compensation plan, or to invest in the Energizer common stock unit fund within the deferred compensation plan. However, certain current and former executives who were employed by our former parent company before the Spin-Off had their account balances under our former parent company’s deferred compensation plan transferred to our deferred compensation plan. Mr. LaVigne and Ms. Drath have benefits under the terms of our deferred compensation plan. Details of the deferred compensation program, including earnings and year-end balances, are set forth in the “Non-Qualified Deferred Compensation Table.”
For colleagues in the United States, pension benefits are provided under the Energizer Holdings, Inc. Retirement Plan, a tax-qualified defined benefit plan that is subject to maximum pay and benefit limits under the tax rules. Pension benefits are also provided under a pension restoration plan, the Supplemental Executive Retirement Plan, a non-qualified plan that provides a supplement to an executive’s pension benefit equal to the amount that the executive would have received but for limitations under the Internal Revenue Code. Mr. LaVigne, Mr. Drabik, Mr. Lampman, and Ms. Drath each have pension benefits. Details of pension benefits under the Supplemental Executive Retirement Plan are set forth in “Executive Compensation Tables—Pension Benefits Table”. The plans were frozen as of December 31, 2013, and future retirement service benefits are no longer accrued under this retirement program. The freeze includes both the qualified and non-qualified plans.
The Retirement Accumulation Account that was effective from January 1, 2010, to December 31, 2013, included the future retirement benefits of the participants in our former parent company’s qualified defined benefit pension plan, including Mr. LaVigne, Mr. Drabik, Mr. Lampman, and Ms. Drath, which were determined in accordance with a retirement accumulation formula. The participants received monthly credits equal to 6% of their eligible benefit earnings for each month, which amounts were credited with monthly interest equal to the 30-year Treasury rate that is reset annually. Certain older, longer-tenured participants, including the NEOs, with age and years of service totaling at least 60 but not more than 74 as of December 31, 2009, received an additional monthly credit equal to 2% of eligible benefit earnings. Participants receive credit for years of service with our former parent company. Participants with age and years of service totaling 75 or more as of December 31, 2009, received an additional monthly credit equal to 4% of their eligible benefit earnings. These transition credits were available to eligible plan participants through 2013 (or, if earlier, their termination of employment with the Company).
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The defined benefit plan also used the following benefit calculation formulas, all of which were frozen as of the end of calendar year 2009:
Pension Equity Plan benefit formula: Under PEP, an executive is entitled to a benefit (payable in lump sum or as a monthly annuity) based on five-year average annual earnings, which were multiplied by “pension equity credits” earned with years of service. The benefit was subject to a three-year vesting period. PEP was applied to Mr. Drabik, Mr. Lampman, and Ms. Drath.
PensionPlus Match Account: The PPMA generally provided a 325% match under our retirement plan to those participants who made an after-tax contribution of 1% of their annual earnings to our 401(k) plan. To the extent an officer’s PPMA benefit was unavailable due to the Internal Revenue Code of 1986, as amended (“IRC”), limits, the benefit was restored under our excess savings investment plan and not the pension restoration plan for executives. The benefit was generally subject to a three-year vesting requirement. The PPMA benefit was available through the end of the calendar year 2009 for Mr. Drabik, Mr. Lampman, and Ms. Drath.
Mr. Vauth participates in the Wilkinson Pension Plan. Participants in the Wilkinson Pension Plan are eligible to receive old-age pensions, early old-age pensions, disability pensions, and dependents’ pensions (widows’ pensions and widowers’ pensions). Under the terms of the Wilkinson Pension Plan, normal retirement age is 65. As required by local law, for colleagues who receive German social security pensions, the retirement age is 63 or, in certain circumstances, between 60 and 62. In addition, upon experiencing a qualifying disability, participants in the plan are eligible to receive disability benefits after reaching the age of 50 and completing 15 years of service. All pension benefits under the plan are subject to a waiting period of five years of uninterrupted plan participation. As required by local law, a colleague’s accrued pension benefit becomes nonforfeitable after reaching the age of 21 and participating in the plan for at least three years.
The Wilkinson Pension Plan applies the following formulas for determining participant pension benefits:
Old-age pension: The sum of (i) for each year of credited pensionable service, 0.6% of final pensionable salary (up to a maximum pensionable salary equal to the social security wage limit less €500 (the “Wage Limit”)) up to a maximum of 15% of final pensionable salary; plus (ii) for each year of credited pensionable service, 1.2% of final pensionable salary in excess of the Wage Limit, up to a maximum of 30%. Final pensionable salary is the participant’s base pay in the month prior to retirement. Pensionable service is the uninterrupted time of service from the participant’s hiring date to reaching normal retirement age. If a participant terminates employment early prior to a benefit case (death, disability or retirement), then the pension amount for “Old Age Pension”, “Disability Pension”, “Early Old Pension” and “Dependents’ Pension” is prorated by the service until employment termination, divided by the service to normal retirement date (age 65).
Disability pension: The participant’s old-age pension benefit that would be available upon reaching normal retirement age, pro-rated by the ratio of the number of years of the participant’s service until the participant’s qualifying disability to the number of years until normal retirement age.
Early old-age pension: Computed according to the same formula as the disability pension.
Dependents’ pension (widows’, widowers’): (i) in the event of the participant’s death in service, 60% of the participant’s old-age pension benefit; or (ii) in the event of the participant’s death following retirement, 60% of the value of the pension benefit paid immediately before the participant’s death.
We offer a limited number of perquisites for our executive officers. We provide an executive financial planning program, which provides reimbursement for 80% of the costs incurred for qualifying financial planning, legal, and tax preparation services up to a maximum of $8,000 in the first calendar year the executive is employed by the Company and $6,000 in subsequent calendar years. This benefit partially offsets costs incurred by our executive officers in connection with their regulatory compliance obligations as public company executives. In fiscal 2022, to help mitigate increasing cybersecurity risks, the Company provided each NEO with a subscription to DeleteMe and Lifelock at a value of $1,370 per year. Executive officers are also eligible to participate in the Company’s charitable foundation matching gift program, which is generally available to global colleagues. Under this program, the foundation matches 100% of charitable donations of a minimum of $25 made to eligible charities, up to a maximum of $5,000 per year per colleague. We regularly review the benefits provided to our executives and make appropriate modifications based on peer group analysis and the Human Capital Committee’s evaluation of the retentive value of these benefits.
Consistent with local market practice, Mr. Vauth’s employment agreement, as amended, provides that Mr. Vauth is eligible to receive a monthly company car allowance. The Company also provides executive-level Accidental Death & Dismemberment (AD&D) benefit coverage for Mr. Vauth.
| Energizer Holdings, Inc. 2022 Proxy Statement 45 |
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SEVERANCE AND OTHER BENEFITS FOLLOWING A CHANGE OF CONTROL In order to enhance our retention of key executives and, in the event of a change of control, enable them to focus on the interests of shareholders in a potential transaction, we have adopted our Executive Severance Plan and entered into change of control employment agreements with each of our NEOs other than Mr. Vauth, who has an employment agreement in accordance with German law and standard market practice. The individuals who have change of control employment agreements are carefully selected by the Human Capital Committee, and we believe these executives are critical to the process of evaluating or negotiating a potential change of control transaction or in the operation of our business during the negotiations or integration process, so that their retention would be critical to the success of a transaction. Our Executive Severance Plan and change of control employment agreements include post-termination non-competition and non-solicitation covenants, which we believe provide significant value to our shareholders. We do not permit tax gross-up payments relating to severance payments for change of control employment agreements entered into with our executive officers.
The Human Capital Committee annually reviews the cost and terms of these agreements, and in fiscal 2022 with input provided by Farient. In fiscal 2022, the Human Capital Committee modified the change of control employment agreements to provide that an executive officer will only receive a pro rata annual bonus if the executive officer experiences a qualifying termination following a change of control, rather than automatically receiving a pro rata annual bonus upon a change of control. This aligns with our “double trigger” severance under these agreements.
See “Executive Compensation Tables—Potential Payments upon Termination or Change of Control” for a description of these arrangements and the estimated compensation and benefits provided under these arrangements to our NEOs.
46 Energizer Holdings, Inc. 2022 Proxy Statement | |
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HUMAN CAPITAL COMMITTEE REPORT | | The Human Capital Committee reviewed and discussed the Compensation Discussion and Analysis with management. Based on this review and discussion, the Human Capital Committee recommended to the Board that the Compensation Discussion and Analysis be included in the proxy statement and incorporated by reference into the Annual Report on Form 10-K for the year ended September 30, 2022. | |
| | | |
| | Submitted by the Human Capital Committee members of the Board: | |
| | | |
| | Cynthia J. Brinkley — Chair
Bill G. Armstrong
Rebecca D. Frankiewicz
Kevin J. Hunt
Nneka L. Rimmer | |
| Energizer Holdings, Inc. 2022 Proxy Statement 47 |
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EXECUTIVE COMPENSATION TABLES SUMMARY COMPENSATION TABLE | | Mark S. LaVigne
President and Chief
Executive Officer
| | | 2022 | | | $962,500 | | | $0 | | | $6,524,303 | | | $0 | | | $1,426,750 | | | $3,366 | | | $131,521 | | | $9,048,440 | |
| | 2021 | | | $884,842 | | | $0 | | | $3,850,020 | | | $0 | | | $1,140,426 | | | $2,266 | | | $81,181 | | | $5,958,735 | |
| | 2020 | | | $674,170 | | | $0 | | | $1,770,074 | | | $0 | | | $538,893 | | | $3,609 | | | $76,728 | | | $3,063,474 | |
| | John J. Drabik
Executive Vice President,
Chief Financial Officer
| | | 2022 | | | $572,917 | | | $0 | | | $2,090,707 | | | $0 | | | $627,710 | | | $5,380 | | | $44,853 | | | $3,341,567 | |
| | 2021 | | | $368,333 | | | $0 | | | $506,046 | | | $0 | | | $284,858 | | | $3,684 | | | $34,518 | | | $1,197,439 | |
| | 2020 | | | $337,253 | | | $0 | | | $400,055 | | | $0 | | | $202,259 | | | $4,593 | | | $32,372 | | | $976,531 | |
| | Michael A. Lampman
Executive Vice President,
North America and Global
Business Units (6) | | | 2022 | | | $470,625 | | | $0 | | | $1,087,440 | | | $0 | | | $363,977 | | | $21,825 | | | $44,350 | | | $1,988,217 | |
| | Robin W. Vauth
Executive Vice President,
International (5)(6) | | | 2022 | | | $439,081 | | | $0 | | | $1,087,440 | | | $0 | | | $339,585 | | | $10,885 | | | $13,017 | | | $1,890,008 | |
| | Susan K. Drath
Chief Human Capital
Officer
| | | 2022 | | | $399,125 | | | $0 | | | $724,963 | | | $0 | | | $308,682 | | | $15,189 | | | $49,030 | | | $1,469,989 | |
| | 2021 | | | $384,326 | | | $0 | | | $512,837 | | | $0 | | | $297,234 | | | $10,478 | | | $40,966 | | | $1,245,841 | |
(1)
| The amounts reported in the column for fiscal 2022 include a performance-based RSU grant awarded on November 15, 2021 to the executive officers. The value of the performance-based award reflects the most probable performance outcome on the grant date, determined in accordance with FASB ASC Topic 718. Half of the award will vest based on target cumulative adjusted earnings per share performance metrics and half will vest based on relative total shareholder return (“TSR”) performance metrics. The closing stock price on the grant date, $38.75, was used to determine the fair value for the cumulative adjusted earnings per share portion of the award. The Company records estimated expense for the cumulative adjusted earnings per share portion of the award based on target achievement for the three-year performance period unless a different outcome is likely to occur. The portion of the performance-based RSU grant awarded on November 15, 2021 that is contingent on achievement of relative TSR performance metrics has a 45.7% fair value premium added to the closing stock price on the grant date based on a simulation of outcomes under a Monte Carlo valuation model. Refer to Note 8, Share-Based Payments, of the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended September 30, 2022 for further discussion. The following is the maximum award value, if paid, for the full awards granted in fiscal 2022: M. LaVigne—$7,875,008; J. Drabik—$2,523,556; Mr. Lampman—$1,312,540; Mr. Vauth—$1,312,540; and Ms. Drath—$875,053. The grant date fair value of the performance-based awards included in the table is as follows: |
| | Mr. LaVigne, $4,836,779 | | | Mr. Lampman, $806,154 | | | Ms. Drath, $537,452 | |
| | Mr. Drabik, $1,549,951 | | | Mr. Vauth, $806,154 | | | | |
The amounts reported in this column for fiscal 2022 also include a time-based RSU grant awarded on November 15, 2021 to the executive officers that vests three years from the grant date, provided the executive officer remains employed with the Company on the vesting date. The grant date fair value of the time-based awards included in the table, determined in accordance with FASB ASC Topic 718, is as follows:
| | Mr. LaVigne, $1,687,524 | | | Mr. Lampman, $281,286 | | | Ms. Drath, $187,511 | |
| | Mr. Drabik, $540,756 | | | Mr. Vauth, $281,286 | | | | |
(2)
| The amounts reported in this column reflect annual incentive awards earned by the NEOs during the fiscal year under the applicable annual incentive plan. |
(3)
| The amounts reported in this column consist of aggregate changes in the actuarial present value of accumulated benefits under the applicable retirement plan and the supplemental executive retirement plan, our pension restoration plan which are our applicable defined benefit pension plans. To the extent that payments under the qualified retirement plan exceed limitations imposed by the IRS, the excess will be paid under the terms of the non-qualified supplemental executive retirement plan. For Mr. Vauth, this is the change in the actuarial present value from fiscal 2021 to fiscal 2022 of the German defined benefit plan. |
(4)
| The amounts reported in this column with respect to fiscal 2022 consist of the following: |
(i)
| Company matching contributions in our 401(k) plan: |
| | Mr. LaVigne, $17,400 | | | Mr. Lampman, $18,346 | | | Ms. Drath, $18,054 | |
| | Mr. Drabik, $17,874 | | | | | | | |
(ii)
| Company matching contributions in our executive savings investment plan: |
| | Mr. LaVigne, $106,751 | | | Mr. Lampman, $24,634 | | | Ms. Drath, $23,686 | |
| | Mr. Drabik, $24,909 | | | | | | | |
These amounts include benefits that were accrued by the NEOs in our executive savings investment plan due to certain limits imposed by the IRC on contributions to our 401Ik) Plan.
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(iii)
| Company contributions into our German Employee Finance Occupational Pension Scheme with Employer Subsidy for Mr. Vauth in the amount of $716.50. |
(iv)
| The incremental cost to the Company of the following perquisites provided to the executive officers: |
Executive Financial Planning Program. We reimburse the executives for 80% of the cost of personal financial advisory services, up to certain annual maximums. During fiscal 2022, the following reimbursement payments were made:
| | Mr. LaVigne, $6,000 | | | Mr. Drabik, $700 | |
| | | | | Ms. Drath, $5,920 | |
(v)
| In fiscal 2022, to help mitigate cybersecurity risks, we provided each NEO with a subscription to DeleteMe and Lifelock. The cost per NEO is $1,370 annually. |
(vi)
| Mr. Vauth received a company car allowance of $10,812 during fiscal 2022. |
(vii)
| Company contributions for executive-level Accidental Death & Dismemberment (AD&D) coverage for Mr. Vauth in the amount of $118.47. |
(5)
| The base salary, non-equity incentive compensation, changes in pension value and all other compensation values presented in the table for Mr. Vauth are shown as converted from Euros to U.S. dollars at the fiscal 2022 average conversion rate used to prepare the Company’s financial statements (1 U.S Dollar = 0.9245 Euros). |
(6)
| Mr. Lampman and Mr. Vauth were appointed by the Board of Directors to be executive officers of the Company during fiscal 2022 and are NEOs for the first time. As a result, compensation information for prior fiscal years is not required to be presented. |
GRANTS OF PLAN-BASED AWARDS
Awards to the NEOs, and to other key executives, were made in fiscal 2022 under two separate programs:
potential cash awards under our annual cash incentive program, dependent upon achievement of performance measures established at the beginning of the fiscal year, as described in more detail in “Annual Incentive Program;” and
three-year RSU awards under the terms of our 2020 Plan, which include a performance-based component and a time-based component, as described in more detail in “Long-Term Incentive Program.”
GRANTS OF PLAN-BASED AWARDS TABLE
| | M.S. LaVigne | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | Bonus: Annl.Perf.(1) | | | — | | | $553,426 | | | $1,106,853 | | | $2,213,705 | | | — | | | — | | | — | | | — | | | — | |
| | LTI Award: Perf.(2) | | | 11/15/21 | | | — | | | — | | | — | | | 50,807 | | | 101,613 | | | 203,226 | | | — | | | $4,836,779 | |
| | LTI Award: Time(3) | | | 11/15/21 | | | — | | | — | | | — | | | — | | | — | | | — | | | 43,549 | | | $1,687,524 | |
| | J.J. Drabik | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | Bonus: Annl.Perf.(1) | | | — | | | $243,485 | | | $486,969 | | | $973,938 | | | — | | | — | | | — | | | — | | | — | |
| | LTI Award: Perf.(2) | | | 11/15/21 | | | — | | | — | | | — | | | 16,281 | | | 32,562 | | | 65,124 | | | — | | | $1,549,951 | |
| | LTI Award: Time(3) | | | 11/15/21 | | | — | | | — | | | — | | | — | | | — | | | — | | | 13,955 | | | $540,756 | |
| | M.A. Lampman | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | Bonus: Annl.Perf.(1) | | | — | | | $141,184 | | | $282,369 | | | $564,737 | | | — | | | — | | | — | | | — | | | | |
| | LTI Award: Perf.(2) | | | 11/15/21 | | | — | | | — | | | — | | | 8,468 | | | 16,936 | | | 33,872 | | | — | | | $806,154 | |
| | LTI Award: Time(3) | | | 11/15/21 | | | — | | | — | | | — | | | — | | | — | | | — | | | 7,259 | | | $281,286 | |
| | R.W. Vauth | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | Bonus: Annl.Perf.(1)(5) | | | — | | | $131,722 | | | $263,443 | | | $526,886 | | | — | | | — | | | — | | | — | | | — | |
| | LTI Award: Perf.(2) | | | 11/15/21 | | | — | | | — | | | — | | | 8,468 | | | 16,936 | | | 33,872 | | | — | | | $806,154 | |
| | LTI Award: Time(3) | | | 11/15/21 | | | — | | | — | | | — | | | — | | | — | | | — | | | 7,259 | | | $281,286 | |
| | S.K. Drath | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | Bonus: Annl.Perf.(1) | | | — | | | $119,735 | | | $239,471 | | | $478,942 | | | — | | | — | | | — | | | — | | | — | |
| | LTI Award: Perf.(2) | | | 11/15/21 | | | — | | | — | | | — | | | 5,646 | | | 11,291 | | | 22,582 | | | — | | | $537,452 | |
| | LTI Award: Time(3) | | | 11/15/21 | | | — | | | — | | | — | | | — | | | — | | | — | | | 4,839 | | | $187,511 | |
(1)
| These amounts represent the estimated possible payouts of annual cash awards for fiscal 2022 under our annual cash incentive program for each of our NEOs. The actual amounts earned under the annual cash incentive program for fiscal 2022 are disclosed in the “Summary Compensation Table” above as part of the column entitled “Non-Equity Incentive Plan Compensation.” |
(2)
| Vesting of these performance-based RSUs, awarded under the 2020 Plan, is subject to achievement of pre-established performance criteria for cumulative adjusted earnings per share and relative total shareholder return over the three-year period commencing October 1, 2021, subject to the executive officer’s continued employment with the Company on the vesting date. |
(3)
| These time-based RSUs vest three years from the date of grant, subject to the executive officer’s continued employment with the Company on the vesting date. |
| Energizer Holdings, Inc. 2022 Proxy Statement 49 |
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(4)
| These amounts represent the grant date fair value calculated in accordance with FASB ASC Topic 718, excluding forfeiture assumptions. For the three-year performance awards, the value reflects the most probable performance outcome at the date of the awards’ grant. These amounts may not correspond to the actual value realized by the NEOs upon vesting of the awards. For the three-year time-vesting awards, these amounts include 100% of such awards, with no reduction for potential forfeiture. |
(5)
| Mr. Vauth’s bonus values are shown as converted from Euros to U.S. dollars at the fiscal 2022 average conversion rate used to prepare the Company’s financial statements (1 U.S Dollar = 0.9245 Euros). |
For further discussion regarding the fiscal 2022 grants under our annual incentive program see “Compensation Discussion and Analysis—Elements of Compensation—Annual Incentive Program,” and for further discussion regarding the timing and procedures for the fiscal 2022 grants of performance-based and time-based long-term incentive awards, see “Compensation Discussion and Analysis—Elements of Compensation—Long-Term Incentive Program.”
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
The following table and footnotes set forth information regarding outstanding equity awards, as of September 30, 2022, for the NEOs. All such awards are in the form of RSUs, the vesting of which is, for performance-based awards, subject to the achievement of cumulative financial metrics over a three-year period, and, for time-based awards, generally over a three-year period, subject to acceleration of vesting in certain limited circumstances as contemplated under our equity incentive plans. See “Compensation Discussion and Analysis—Elements of Compensation—Long Term Incentive Program.”
| | M.S. LaVigne | | | 11/11/2019 | | | 12,321(2) | | | $309,750 | | | 0(3) | | | $0 | |
| | 11/16/2020 | | | 26,873(4) | | | $675,587 | | | 31,352(5) | | | $788,189 | |
| | 11/15/2021 | | | 43,549(6) | | | $1,094,822 | | | 152,420(7) | | | $3,831,839 | |
| | J.J. Drabik | | | 11/11/2019 | | | 2,785(2) | | | $70,015 | | | 0(3) | | | $0 | |
| | 11/16/2020 | | | 3,532(4) | | | $88,794 | | | 4,121(5) | | | $103,602 | |
| | 11/15/2021 | | | 13,955(6) | | | $350,829 | | | 48,843(7) | | | $1,227,913 | |
| | M.A. Lampman | | | 11/11/2019 | | | 3,133(2) | | | $78,764 | | | 0(3) | | | $0 | |
| | 11/16/2020 | | | 3,141(4) | | | $78,965 | | | 3,665(5) | | | $92,138 | |
| | 11/15/2021 | | | 7,259(6) | | | $182,491 | | | 25,404(7) | | | $638,657 | |
| | R.W. Vauth | | | 11/11/2019 | | | 3,133(2) | | | $78,764 | | | 0(3) | | | $0 | |
| | 11/16/2020 | | | 3,141(4) | | | $78,965 | | | 3,665(5) | | | $92,138 | |
| | 11/15/2021 | | | 7,259(6) | | | $182,491 | | | 25,404(7) | | | $638,657 | |
| | S.K. Drath | | | 11/11/2019 | | | 2,367(2) | | | $59,506 | | | 0(3) | | | $0 | |
| | 11/16/2020 | | | 3,580(4) | | | $90,001 | | | 4,176(5) | | | $104,985 | |
| | 11/15/2021 | | | 4,839(6) | | | $121,652 | | | 16,937(7) | | | $425,796 | |
(1)
| The market value of awards that have not vested was determined by multiplying $25.14, the closing market price per share of the Company’s common stock on September 30, 2022, by the number of RSUs. |
(2)
| Time-based RSUs granted on 11/11/2019 vested on 11/11/2022. |
(3)
| The threshold levels for the performance-based RSUs granted on 11/11/2019 were not met and no payouts were made in November 2022. |
(4)
| Time-based RSUs granted on 11/16/2020 will vest on 11/16/2023, subject to continued service through the vesting date. |
(5)
| Performance-based RSUs granted on 11/16/2020 will vest on the date the Human Capital Committee certifies the results of the full performance period of fiscal 2021 through 2023, subject to achievement of threshold performance and continued service through the vesting date. The shares shown in the table reflect achievement of threshold performance. |
(6)
| Time-based RSUs granted on 11/15/2021 will vest on 11/15/2024, subject to continued service through the vesting date. |
(7)
| Performance-based RSUs granted on 11/15/2021 will vest on the date the Human Capital Committee certifies the results of the full performance period of fiscal 2022 through 2024, subject to achievement of threshold performance and continued service through the vesting date. The shares shown in the table reflect one-half of the award achieved at target performance and one-half of the award achieved at maximum performance. |
50 Energizer Holdings, Inc. 2022 Proxy Statement | |
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STOCK VESTED TABLE
| | M.S. LaVigne | | | 11,021 | | | $424,435 | |
| | J.J. Drabik | | | 2,088 | | | $80,412 | |
| | M.A. Lampman | | | 3,967 | | | $152,775 | |
| | R.W. Vauth | | | 4,175 | | | $160,785 | |
| | S.K. Drath | | | 2,505 | | | $96,471 | |
(1)
| On November 15, 2021, 29% of the performance-based RSUs granted in fiscal 2019 vested in accordance with the terms of the award agreements. The number of RSUs that vested for each executive officer is as follows: Mr. LaVigne, 4,448; Mr. Drabik, 843; Mr. Lampman, 1,601; Mr. Vauth, 1,685; and Ms. Drath, 1,011. |
(2)
| On November 12, 2021, 100% of the time-based RSUs granted in fiscal 2019 vested in accordance with the terms of the award agreements. The number of RSUs that vested for each executive officer is as follows: Mr. LaVigne, 6,573; Mr. Drabik, 1,245; Mr. Lampman, 2,366; Mr. Vauth, 2,490; and Ms. Drath, 1,494. |
(3)
| Calculated by multiplying the number of RSUs vested by the market value of the underlying shares on the vesting date. |
PENSION BENEFITS TABLE
| | M.S. LaVigne | | | Energizer Retirement Plan | | | 4 | | | $90,653 | | | $0 | |
| | Supplemental Executive Retirement Plan | | | 4 | | | $88,764 | | | $0 | |
| | J.J. Drabik | | | Energizer Retirement Plan | | | 12 | | | $223,666 | | | $0 | |
| | Supplemental Executive Retirement Plan | | | 4 | | | $6,641 | | | $0 | |
| | M.A. Lampman | | | Energizer Retirement Plan | | | 27 | | | $814,870 | | | $0 | |
| | Supplemental Executive Retirement Plan | | | — | | | $0 | | | $0 | |
| | R.W. Vauth | | | Wilkinson Pension Plan(6)(7) | | | 15 | | | $97,438 | | | $0 | |
| | S.K. Drath | | | Energizer Retirement Plan | | | 22 | | | $562,850 | | | $0 | |
| | Supplemental Executive Retirement Plan | | | 4 | | | $17,781 | | | $0 | |
(1)
| The Energizer Retirement Plan is frozen. It includes several benefit formulas applicable at different periods, as explained in the “Compensation Discussion and Analysis”. One formula was the Retirement Accumulation Account, a cash balance benefit effective from January 1, 2010 through December 31, 2013 when the entire plan was frozen. This applies to the U.S.-based NEOs. Two prior formulas, the PEP and the PPMA, were frozen as of December 31, 2009. Mr. Drabik’s, Mr. Lampman’s and Ms. Drath’s benefit values also include these two additional formulas. The Supplemental Executive Retirement Plan was also frozen as of December 31, 2013. The plan provided benefits based on the same formulas as the Energizer Retirement Plan (with the exception of the PensionPlus Match Account) but reflected compensation above the maximum compensation limit. |
(2)
| The number of years of credited service shown for each executive reflects years of actual service prior to the pension plan being frozen, which are less than each executive’s actual years of service with the Company. |
(3)
| Mr. LaVigne’s and Mr. Drabik’s years of service credited in the Energizer Retirement Plan were with Edgewell, our former parent company. |
(4)
| For Mr. Lampman and Ms. Drath, 14 years of service shown were with Edgewell, our former parent company, and the remainder were with Ralston Purina Company, Edgewell’s former parent. |
(5)
| The value of benefits shown equal the account balances under the plans and benefit formulas in which the named executive officer participates. The account balances grow with a monthly interest credit based on the 30-year Treasury rate, reset annually. The value is available on termination without reduction. Assumptions used in the valuations are set forth in Note 14, Pension Plans, of the Notes to Consolidated Financial Statements of our Annual Report on Form 10-K for year ended September 30, 2022. |
(6)
| Represents capitalized value under the Wilkinson Pension Plan for Mr. Vauth. The formulas for determining the participant benefits under the old-age, disability, early-age and dependents’ pensions are set forth in “Compensation Discussion and Analysis—Elements of Compensation— Pension Benefits”. |
(7)
| The amounts presented in the table for Mr. Vauth are shown as converted from Euros to U.S. dollars at the fiscal 2022 average conversion rate used to prepare the Company’s financial statements (1 U.S Dollar = 0.9245 Euros). |
| Energizer Holdings, Inc. 2022 Proxy Statement 51 |
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NON-QUALIFIED DEFERRED COMPENSATION TABLE
| | M.S. LaVigne | | | Def’d Comp. Plan | | | $0 | | | $0 | | | $23,440 | | | $0 | | | $658,926 | |
| | Exec. S.I.P. | | | $126,176 | | | $106,751 | | | $(615,117) | | | $0 | | | $2,282,471 | |
| | J.J. Drabik | | | Def’d Comp. Plan | | | $0 | | | $0 | | | $0 | | | $0 | | | $0 | |
| | Exec. S.I.P. | | | $51,466 | | | $24,909 | | | $(69,035) | | | $0 | | | $457,256 | |
| | M.A. Lampman | | | Def’d Comp. Plan | | | $0 | | | $0 | | | $0 | | | $0 | | | $0 | |
| | Exec. S.I.P. | | | $45,743 | | | $24,634 | | | $(29,541) | | | $0 | | | $178,746 | |
| | R.W. Vauth (5) | | | Def’d Comp. Plan | | | $— | | | $— | | | $— | | | $— | | | $— | |
| | Exec. S.I.P. | | | $— | | | $— | | | $— | | | $— | | | $— | |
| | S.K. Drath | | | Def’d Comp. Plan | | | $0 | | | $0 | | | $22,102 | | | $0 | | | $621,304 | |
| | Exec. S.I.P. | | | $41,782 | | | $23,686 | | | $(100,178) | | | $0 | | | $475,098 | |
(1)
| Executive officer contributions to our executive savings investment plan during fiscal 2022 consist of deferrals of salary earned with respect to fiscal 2022. |
(2)
| Contributions and accruals to our executive savings investment plan consist of Company contributions that would have otherwise been contributed to the named executive officer’s 401(k) plan account but for limitations imposed by the IRC. These amounts, in their entirety, are included in the “All Other Compensation” column of the “Summary Compensation Table”. |
(3)
| Aggregate earnings/(losses) shown in this column consist of: |
–
| amounts credited to each executive under the investment options of each of the plans, reflecting actual earnings, including appreciation and depreciation, on investment funds offered under our qualified 401(k) plan with returns during fiscal 2022 ranging from -40.24% to 1.44%; and |
–
| in the case of the prime rate option of our deferred compensation plan, interest at the prime rate, quoted by the Wall Street Journal, ranged from 3.25% to 5.5%. |
(4)
| Of the aggregate balances shown in this column with respect to the executive savings investment plan, the following amounts were previously reported as compensation in the “Summary Compensation Table” of our proxy statement for our 2022 Annual Shareholders’ Meeting: |
(5)
| Mr. Vauth is not eligible to participate in the Company’s non-qualified deferred compensation plans and arrangements. |
We have adopted several plans or arrangements that provide for the deferral of compensation on a basis that is not tax-qualified.
Deferred Compensation Plan — Under the terms of our deferred compensation plan, an unfunded, non-qualified plan that assumed the liabilities under our former parent’s plan in connection with the Spin-Off, prior to January 1, 2013, executives could elect to have up to 100% of their annual cash incentive award deferred until their retirement or other termination of employment, or for a shorter, three-year period (at the executive’s advance election). All funds are invested in the Prime Rate fund, which credits account balances on a daily basis, at the prime rate quoted by The Wall Street Journal as of the first business day of the given quarter. For fiscal 2022, the rate credited under this fund ranged from 3.25% to 5.5%. Balances in the plan are vested and may be paid out in a lump sum in cash six months following the executive’s termination, or in five- or 10-year increments commencing the year following the year of the executive’s termination of employment, as previously elected by the executive.
Executive Savings Investment Plan — Under the terms of our executive savings investment plan, our excess 401(k) plan, amounts that would be contributed, either by an executive or by us on the executive’s behalf, to the 401(k) plan but for limitations imposed by the IRC, are credited to the non-qualified executive savings investment plan. Under that plan, executives may elect to defer their contributions into any of the measurement fund options that track the performance of the Vanguard investment funds offered under our 401(k) plan. Deferrals and vested Company contributions may be transferred to different investment options at the executive’s discretion. Deferrals in the executive savings investment plan, adjusted for the net investment return, are paid out in a lump sum payment, or in five or 10 annual installments, following retirement or other termination of the executive’s employment, as previously elected by the executive.
52 Energizer Holdings, Inc. 2022 Proxy Statement | |
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POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL
We have adopted our Executive Severance Plan to provide for severance and outplacement benefits to our senior executives, including our NEOs (other than Mr. Vauth), in connection with a qualifying termination under the plan. We have also entered into change of control employment agreements with each of our NEOs (other than Mr. Vauth with whom we have entered into an employment agreement in accordance with German law). The change of control employment agreements provide for severance and accelerated vesting of equity awards upon a qualifying termination. Additionally, our equity plans provide for accelerated vesting of equity awards in the event of certain terminations of employment. These arrangements are described further below.
The table below reports the amount of compensation payable to each of our NEOs in the event of termination of such NEO’s employment, including following a change of control of the Company. The amounts shown in the table assume a termination of employment for each NEO, and a change of control, as applicable, in each case, effective as of September 30, 2022. All amounts shown are estimates of the amounts that would be paid out to the NEOs. The actual amounts to be paid out can only be determined at the time of the relevant triggering event.
Amounts shown in the table represent the incremental amounts due to each NEO beyond what the NEO would have been entitled to receive absent a termination of employment. The information does not reflect benefits that are provided under our plans or arrangements that do not discriminate in favor of executive officers and are available generally to all salaried colleagues, including amounts accrued under our 401(k) plan, certain continued participation in our health, welfare and disability benefits and payout of accrued vacation pay. For amounts accrued under our retirement plans (including our pension restoration plan and executive savings investment plan), see “Executive Compensation Tables—Pension Benefits Table”, and for amounts that would be paid under our deferred compensation plan and our executive savings investment plan, see “Executive Compensation Tables—Non-Qualified Deferred Compensation Table”. Upon termination of employment for any reason, vested account balances in our deferred compensation plan are paid out in cash to the participant in either a lump sum, or over a five- or 10- year period, commencing six months from the date of termination as previously elected by the participant. Upon a change of control, benefits under our executive savings investment plan vest to the extent not already vested.
| | M.S. LaVigne | | | | | | | | | | | | | |
| | Severance | | | $3,095,500(4) | | | — | | | — | | | $6,078,543(5) | |
| | Acceleration of Equity(3) | | | — | | | $6,644,624 | | | $4,040,045 | | | $6,644,624 | |
| | J.J. Drabik | | | | | | | | | | | | | |
| | Severance | | | $1,685,875(4) | | | — | | | — | | | $1,557,192(5) | |
| | Acceleration of Equity(3) | | | — | | | $1,629,555 | | | $921,845 | | | $1,629,555 | |
| | M.A. Lampman | | | | | | | | | | | | | |
| | Severance | | | $514,750(4) | | | — | | | — | | | $1,624,941(5) | |
| | Acceleration of Equity(3) | | | $261,250(6) | | | $1,015,683 | | | $615,010 | | | $1,015,683 | |
| | R.W. Vauth | | | | | | | | | | | | | |
| | Severance | | | $2,031,822(7)(8) | | | $239,654(7)(9) | | | $119,869(7)(9) | | | $2,031,822(7)(8) | |
| | Acceleration of Equity(3) | | | — | | | $1,015,683 | | | $615,010 | | | $1,015,683 | |
| | S.K. Drath | | | | | | | | | | | | | |
| | Severance | | | $441,700(4) | | | — | | | — | | | $1,649,624(5) | |
| | Acceleration of Equity(3) | | | — | | | $821,499 | | | $517,257 | | | $821,499 | |
(1)
| Includes a termination by the Company without cause or by the executive for good reason. |
(2)
| Includes a termination by the Company without cause or by the executive for good reason within 36 months for Mr. LaVigne and 24 months for the other NEOs with a change of control employment agreement following a change of control or a termination upon a death or disability at any time following a change of control. |
(3)
| The value attributed to the accelerated restricted stock unit and performance restricted stock unit awards is calculated based on $25.14, the per share closing market price of the Company’s common stock on September 30, 2022. For performance restricted stock units, performance is deemed to be achieved at target. |
| Energizer Holdings, Inc. 2022 Proxy Statement 53 |
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(4)
| Describes benefits provided under our Executive Severance Plan. Includes a lump sum payment of two times base salary for Messrs. LaVigne ($1,940,000) and Drabik ($1,155,000) and one times base salary for Mr. Lampman ($474,750) and Ms. Drath ($401,700), outplacement services of up to 12 months for each of Messrs. LaVigne, Drabik and Lampman and Ms. Drath (valued at $40,000 each) and a pro rata bonus payment for Messrs. LaVigne ($1,115,500) and Drabik ($490,875). |
(5)
| Describes benefits provided under change of control employment agreements. Includes a lump sum payment of three times base salary plus severance bonus for Mr. LaVigne ($6,002,082) and two times base salary plus severance bonus for Messrs. Drabik ($1,929,565) and Lampman ($1,636,849) and Ms. Drath ($1,339,587), a pro rata bonus payment for each of Messrs. LaVigne ($1,140,426), Drabik ($490,875), and Lampman ($291,756) and Ms. Drath ($297,234) and a lump sum payment for benefits for each of Messrs. LaVigne ($34,937), Drabik ($36,008) and Lampman ($37,193) and Ms. Drath ($12,803). Amounts payable to Messrs. LaVigne, Drabik, and Lampman reflect a reduction to an amount such that no excise tax will be paid under the IRC Section 280G. |
(6)
| Reflects accelerated vesting of a pro rata portion of outstanding RSUs and PSUs granted at least 12 months prior to September 30, 2022 upon a voluntary termination of employment under the terms of the applicable RSU and PSU award agreements due to retirement eligibility. |
(7)
| The amounts presented in the table for Mr. Vauth are shown as converted from Euros to U.S. dollars at the fiscal 2022 average conversion rate used to prepare the Company’s financial statements (1 U.S Dollar = 0.9245 Euros). |
(8)
| Consistent with local market practice, commitments have been made to provide Mr. Vauth severance in an amount equal to one month’s salary per year of Mr. Vauth’s service with the Company if Mr. Vauth’s employment with the Company is terminated by the Company without cause. In both the case of a termination absent a change of control and the case of a termination following a change of control, the portion of these amounts that corresponds to the 18-month notice period provided in accordance with Mr. Vauth’s employment agreement is paid monthly during the notice period. |
(9)
| Describes the benefits provided under Mr. Vauth’s employment agreement. Includes continued payment of Mr. Vauth’s base salary for the three-month period following Mr. Vauth’s termination due to death. In the case of temporary incapacity of Mr. Vauth due to illness or any other reason beyond his control, the Company will pay Mr. Vauth the difference between his usual net income and the usual benefits which he receives or would receive from a health fund for a maximum of three weeks. Otherwise, the terms of the Sick Pay Act apply. |
Executive Severance Plan
Our Executive Severance Plan provides for certain severance benefits in the event of a qualifying termination, meaning an involuntary termination of a participant without cause or a resignation of a participant as a result of good reason (as each term is defined in the plan). These benefits include:
a lump sum payment at the time of termination of one or two times the participant’s annual base salary at the time of the qualifying termination;
outplacement services for up to 12 months; and
for the Chief Executive Officer and the Chief Financial Officer, a pro-rata bonus payment based on the number of days during the bonus year the participant was employed and the amount of annual bonus that the participant would have received if the participant had remained employed, based on actual Company performance, payable on the date annual bonuses for the annual bonus year to which such pro rata bonus relates are paid to other executive employees of the Company. Other NEOs are not entitled to a pro rata bonus under the plan.
The payment of benefits under the plan is conditioned upon the participant executing a general release of claims in favor of the Company, as well as compliance with confidentiality, non-solicitation, non-disparagement and non-competition obligations as set forth in the release of claims. In addition, no benefits will be paid to the extent duplicative of benefits under a change of control or similar agreement with the Company.
Change of Control Employment Agreements
The change of control employment agreements with each of our NEOs (other than Mr. Vauth) provide for certain benefits in connection with a change of control. In the event of a qualifying termination, meaning a termination by the company without cause or by the executive for good reason within a specified time period following a change of control of the Company (thirty-six months for Mr. LaVigne and twenty-four months for the other NEOs with a change of control employment agreement) or upon death or disability at any time following a change of control of the Company (as each term is defined in the applicable agreement). Severance benefits under the agreements include:
a lump sum payment six months following termination equal to a multiple of the NEO’s annual base salary and severance bonus (defined as the average of the most recent five-year actual bonus percentages multiplied by the greater of the executive’s base salary in effect either immediately prior to the date of termination or the date of the change of control), which is three times in the case of Mr. LaVigne and two times in the case of Mr. Drabik, Mr. Lampman and Ms. Drath;
a lump sum pro-rata bonus payment six months following termination based on target bonus for the year of termination;
a lump sum payment six months following termination intended to assist with health and welfare benefits for a period of time post-termination (thirty-six months for Mr. LaVigne and twenty-four months for the other NEOs with a change of control employment agreement);
54 Energizer Holdings, Inc. 2022 Proxy Statement | |
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outstanding equity awards held by the NEO will accelerate and vest in accordance with their terms (which, currently provide for acceleration in full and, for performance awards, at the greater of target or actual performance as of the date the change of control occurs); and
benefits under our executive savings investment plan vest to the extent not already vested.
Additionally, if approved by the Company’s Chief Executive Officer or, in the case of the Chief Executive Officer, the Human Capital Committee, perquisites and fringe benefits enjoyed by the NEO immediately prior to termination may continue for the period approved. Further, the NEOs are entitled to payment by the Company of all legal fees and expenses as and when incurred by the NEO in connection with the change of control employment agreements, including all such fees and expenses, if any, incurred in contesting or disputing any termination of employment or in seeking to obtain or enforce any right or benefit provided by the change of control employment agreement.
In the event that it is determined that a “golden parachute” excise tax is due under the Internal Revenue Code, we will reduce the aggregate amount of the payments payable to an amount such that no such excise tax will be paid if the resulting amount would be greater than the after-tax amount if the payments were not so reduced.
Following termination of employment, each NEO is bound by a one-year covenant not to compete, a one-year non-solicitation covenant and a covenant of confidentiality.
The change of control employment agreements automatically renew, in the case of Mr. LaVigne, for three-year terms, and in the case of the agreements with Messrs. Drabik and Lampman and Ms. Drath, for two-year terms.
Vauth Employment Agreement
Mr. Vauth’s employment agreement, as amended, provides that Mr. Vauth will be eligible to receive an annual base salary and a target annual bonus opportunity equal to 50% of Mr. Vauth’s base salary, participate in the pension scheme maintained for employees of the Company’s German subsidiaries and use a company-provided car. Mr. Vauth is subject to confidentiality and intellectual property and inventions assignment covenants, and Mr. Vauth may not, in Germany or a German-speaking area, during the 12-month period following his termination of employment, compete with or solicit the employees, customers or business of the Company’s German subsidiaries. If Mr. Vauth breaches any of the restrictive covenants contained in his employment agreement, he must pay a monetary penalty to the Company.
Mr. Vauth’s employment agreement may be terminated by either party for any reason upon 18 months’ advance notice, during which notice period Mr. Vauth will continue to be an employee of the Company and will continue to receive his compensation then in effect. Mr. Vauth’s employment agreement further provides that in the event of Mr. Vauth’s death, the Company will continue to pay to Mr. Vauth’s estate his base salary for the remainder of the month of death and the three months thereafter. In the event of Mr. Vauth’s temporary incapacity due to illness or any other reason outside Mr. Vauth’s control that would prevent him from providing his services to the Company, the Company will pay to Mr. Vauth the difference between his net income and the benefits that Mr. Vauth would receive from his health insurance up to a maximum period of 13 weeks.
Mr. Vauth’s employment agreement does not provide for any severance or change of control benefits other than as described above. Consistent with local market practice, commitments have been made to provide Mr. Vauth severance in an amount equal to one month’s salary for each year of Mr. Vauth’s service with the Company if Mr. Vauth’s employment is terminated by the Company without cause, including following a change of control.
Equity Plans
Under our equity plans, upon an executive officer’s death, restricted stock units and performance restricted stock units are accelerated in full; upon a disability (as defined in the plans), restricted stock units are accelerated in full and performance restricted stock units are accelerated on a prorated basis; and, with respect to awards granted at least 12 months prior to retirement, upon retirement (after attainment of age 55 with 10 years of service, or 20 years of service for Mr. Vauth, including service with our former parent companies), restricted stock units and performance restricted stock units are accelerated on a prorated basis.
| Energizer Holdings, Inc. 2022 Proxy Statement 55 |
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We believe that compensation must be competitive in the marketplace for the role, internally consistent, and equitable in order to motivate our colleagues to deliver consistent and sustainable operating results for our shareholders.
The Company’s total colleague population other than the CEO as of the end of our fiscal year, September 30, 2022, whether employed on a full-time or part-time basis, was considered in determining our median employee. No employees were excluded under the de minimis or any other exemption. We examined the (i) projected base or wage compensation, projected recurrent cash allowances, and actual cash bonus payments for permanent colleagues, and (ii) actual base or wage compensation, actual recurrent cash allowances, and actual cash bonus payments for temporary colleagues for the fiscal year. Compensation for permanent colleagues was annualized (e.g., for colleagues who were hired during the year but did not work for the Company the entire year).
We estimate that the compensation of our Chief Executive Officer in fiscal 2022 was approximately 163 times the median of the annual total compensation of all of our other colleagues.
The SEC’s rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, apply certain exclusions, and make reasonable estimates and assumptions that reflect their employee populations and compensation practices. As a result, the pay ratio reported by other companies, including our compensation peer group, may not be comparable to the pay ratio reported above.
| | Annual Total Compensation | | | $9,048,440 | | | $55,599 | |
56 Energizer Holdings, Inc. 2022 Proxy Statement | |
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STOCK OWNERSHIP INFORMATION
Five Percent Owners of Common Stock The following table shows, as of November
29, 2019,30, 2022, the holdings of the Company’s common stock by any entity or person known to the Company to be the beneficial owner of more than 5% of the outstanding shares of the Company’s common stock:
| | | | | | | | | | |
| | |
| Name and Address of Beneficial Owner | | Amount and Nature of
Beneficial Ownership | | Percent of Class Outstanding (1) |
| | |
The Vanguard Group 100 Vanguard Blvd., Malvern, PA 19355 | | | | 5,611,039 | (2) | | | | 9.36 | % |
| | |
BlackRock, Inc. 55 East 52nd Street, New York, NY 10055 | | | | 5,384,274 | (3) | | | | 9.0 | % |
| | |
Spectrum Brands Holdings, Inc. 3001 Deming Way, Middleton, WI 53562 | | | | 5,278,921 | (4) | | | | 8.1 | % |
| | |
J.P. Morgan Chase & Co. 270 Park Avenue, New York, NY 10017 | | | | 4,754,685 | (5) | | | | 7.9 | % |
| | |
Ceredex Value Advisors, LLC 301 E. Pine St., Suite 500, Orlando, FL 32801 | | | | 4,016,377 | (6) | | | | 6.71 | % |
| | |
Aqua Capital, Ltd Wickhams Cay 1 Vanterpool Plaza, 2nd Floor Road Town, Tortola D8, British Virgin Islands | | | | 3,460,000 | (7) | | | | 5.02 | % |
| | BlackRock, Inc.
55 East 52nd Street
New York, NY 10055 | | | 7,468,877(2) | | | 10.5% | |
| | The Vanguard Group
100 Vanguard Blvd.
Malvern, PA 19355 | | | 6,716,231(3) | | | 9.4% | |
| | J.P. Morgan Chase & Co.
383 Madison Avenue
New York, NY 10179 | | | 5,438,195(4) | | | 7.6% | |
| | Aqua Capital, Ltd.
Wickhams Cay 1
Vanterpool Plaza, 2nd Floor
Road Town, Tortola D8, British Virgin Islands | | | 4,200,000(5) | | | 5.9% | |
(1)
| On November 29, 2019,30, 2021, there were 69,241,71571,405,885 shares of the Company’s common stock outstanding. |
(2)
| As reported in a statement on Schedule 13G/A filed with the SEC on February 11, 2019, The Vanguard Group8, 2022, BlackRock, Inc. and related entities reported, as of December 31, 2018,2021, sole voting power over 30,7517,374,366 of such shares shared voting power over 8,364,and sole dispositive power over 5,577,5407,468,877 of such shares and shared dispositive power over 33,499 of such shares. |
(3)
| As reported in a statement on Schedule 13G/A filed with the SEC on February 4, 2019, BlackRock, Inc.10, 2022, The Vanguard Group and related entities reported, as of December 31, 2018, sole voting power over 5,143,406 of such shares and2021, sole dispositive power over 5,384,2746,532,830 of such shares. |
(4) | As reported in a statement on Schedule 13G filed with the SEC on February 7, 2019, Spectrum Brands Holdings, Inc. and related entities reported, as of January 28, 2019,shares, shared voting power over 5,278,921126,946 of such shares and shared dispositive power over 5,278,921183,401 of such shares.
|
(5)(4)
| As reported in a statement on Schedule 13G/A filed with the SEC on January 24, 2019,10, 2022, J.P. Morgan Chase & Co. and related entities reported, as of December 31, 2018,2021, sole voting power over 4,644,248 of such shares, shared voting power over 24 of such shares, sole dispositive power over 4,754,661 of such shares and shared power to dispose or to direct the disposition over 24 of such shares. |
(6) | As reported in a statement on Schedule 13G filed with the SEC on February 5, 2019, Ceredex Value Advisors, LLC. and related entities reported, as of December 31, 2018, sole voting power over 3,406,5775,348,178 of such shares and sole dispositive power over 3,406,5775,438,004 of such shares.
|
(7)(5)
| As reported in a statement on Schedule 13G13G/A filed with the SEC on October 11, 2019,January 29, 2021, Aqua Capital, Ltd. and related entities reported, as of October 8, 2019,December 31, 2020, shared voting power over 3,460,0004,200,000 of such shares and shared dispositive power over 3,460,0004,200,000 of such shares. |
| Energizer Holdings, Inc. 2022 Proxy Statement 57 |
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Ownership of Directors and Executive Officers The table below contains information regarding beneficial common stock ownership of
our directors,
director nominees,
named executive officers, and all of our directors and executive officers as
a group, in each case as of November
29, 2019.30, 2022. It does not reflect any changes in ownership that may have occurred after that date.
| | |
| | Energizer Holdings, Inc. 2019 Proxy Statement 61
|
In general, “beneficial ownership” includes those shares a director or executive officer (or certain members of such person’s family) has the power to vote or transfer as well as shares owned by immediate family members that reside withor will have the directorpower to vote or executive officer.transfer within 60 days. Unless otherwise indicated, directors and executive officersthose named in the table below have sole voting and investment power with respect to the shares set forth in the table and none of the stock included in the table is pledged. The table also indicates shares that may be obtained within 60 days upon the exercise of options, or upon the conversion of vested stock equivalents into shares of common stock.
| | Carlos Abrams-Rivera | | | 10,766 | | | * | |
| | Bill G. Armstrong | | | 76,518 | | | * | |
| | Cynthia J. Brinkley | | | 30,502 | | | * | |
| | Rebecca D. Frankiewicz | | | 17,136 | | | * | |
| | Kevin J. Hunt | | | 25,890 | | | * | |
| | James C. Johnson | | | 28,961 | | | * | |
| | Patrick J. Moore | | | 25,890 | | | * | |
| | Donal L. Mulligan | | | 5,810 | | | * | |
| | Nneka L. Rimmer | | | 15,318 | | | * | |
| | Robert V. Vitale | | | 58,909 | | | * | |
| | John J. Drabik | | | 16,156 | | | * | |
| | Susan K. Drath | | | 50,466 | | | * | |
| | Mark S. LaVigne | | | 158,990 | | | * | |
| | Michael A. Lampman | | | 2,256 | | | * | |
| | Robin W. Vauth | | | 863 | | | * | |
| | All Current Executive Officers and Directors as a Group (15 persons) | | | 524,431 | | | * | |
| | | | | | | | | | | | | | | |
| | | |
| Directors and Executive Officers | | Shares Beneficially Owned | | Stock Equivalents held in the Deferred Compensation Plan | | % of Shares Outstanding (A) (*denotes
less than 1%) |
Carlos Abrams-Rivera | | | | 0 | | | | | 0 | | | | | * | |
Bill G. Armstrong | | | | 28,145 | (C) | | | | 48,892 | | | | | * | |
Cynthia J. Brinkley | | | | 15,909 | (C) | | | | 4,015 | | | | | * | |
Rebecca C. Frankiewicz | | | | 0 | | | | | 0 | | | | | * | |
Alan R. Hoskins | | | | 385,179 | (C) | | | | 0 | | | | | * | |
Kevin J. Hunt | | | | 15,909 | (C) | | | | 0 | | | | | * | |
James C. Johnson | | | | 18,801 | (C) | | | | 179 | | | | | * | |
John E. Klein | | | | 33,241 | (C) | | | | 22,311 | | | | | * | |
W. Patrick McGinnis | | | | 39,862 | (C) | | | | 17,866 | | | | | * | |
Patrick J. Moore | | | | 15,909 | (C) | | | | 0 | | | | | * | |
J. Patrick Mulcahy | | | | 569,399 | (B)(C) | | | | 107,134 | | | | | * | |
Nneka L. Rimmer | | | | 3,206 | (C) | | | | 0 | | | | | * | |
Robert V. Vitale | | | | 23,944 | (C) | | | | 5,020 | | | | | * | |
Emily K. Boss | | | | 42,431 | (C) | | | | 0 | | | | | * | |
Timothy W. Gorman | | | | 63,727 | (C) | | | | 0 | | | | | * | |
Gregory T. Kinder | | | | 61,703 | (C) | | | | 0 | | | | | * | |
Mark S. LaVigne | | | | 106,084 | (C) | | | | 0 | | | | | * | |
All Executive Officers and Directors as a Group (20 persons) | | | | 1,465,781 | (C) | | | | 205,417 | | | | | 2.4 | % |
(A)*
| Denotes less than 1%. |
(1)
| Includes for each person, RSUs and stock equivalents held by such person that could settle into shares within 60 days of November 30, 2022. As of November 30, 2022, each director and executive officer holds the following number of RSUs and stock equivalents, including those held in the Company’s deferred compensation plan, that could settle into shares within 60 days: Mr. Abrams-Rivera, 6,333; Mr. Armstrong, 52,453; Ms. Brinkley, 17,195; Mr. Drabik, 0; Ms. Drath, 0; Ms. Frankiewicz, 17,136; Mr. Hunt, 3,561; Mr. Johnson, 28,961; Mr. Lampman, 0; Mr. LaVigne, 0; Mr. Moore, 25,890; Mr. Mulligan, 3,561; Ms. Rimmer, 3,561; Mr. Vauth, 0; and Mr. Vitale, 34,684. |
(2)
| The number of shares considered outstanding for purposes of the denominator of this calculation wasis the number outstanding as of November 29, 2019,30, 2022 and, includes for each person, RSUs and stock equivalents held by such person that vestcould settle into shares within 60 days or upon retirement, and the number of stock equivalents heldNovember 30, 2022, in each case in the deferred compensation plan.amounts described in footnote 1. |
(B)58 Energizer Holdings, Inc. 2022 Proxy Statement | Mr. Mulcahy disclaims beneficial ownership of 12,500 shares of common stock owned by his wife and 111 shares owned by his stepdaughter.
|
(C) | Includes vested stock equivalents which will convert to shares of common stock upon the individual’s retirement, resignation from the Board or termination of employment with the Company. The number of vested stock equivalents credited to each individual executive officer or director is as follows: Ms. Brinkley, 5,589; Mr. Johnson, 16,341; Mr. Klein, 22,941; Mr. Moore, 13,449; Mr. Mulcahy, 20,508 and Mr. Vitale, 3,259. This amount also includes unvested stock equivalents that vest upon a director’s retirement from the Board or upon attainment of certain vesting provisions, in accordance with the time-based restricted stock equivalent awards, upon retirement or termination for the executive officers. The number of unvested stock equivalents credited to each director and executive officer is as follows: Mr. Armstrong, 2,460; Ms. Brinkley, 2,460; Mr. Hoskins, 41,703; Mr. Hunt, 2,460; Mr. Johnson, 2,460; Mr. Klein, 2,460; Mr. McGinnis, 2,460 Mr. Moore, 2,460; Mr. Mulcahy, 2,460; Ms. Rimmer, 2,460 and Mr. Vitale 2,460; Mr. LaVigne, 6,880; Mr. Gorman, 1,164; Mr. Kinder, 2,328; Ms. Boss, 2,328 and all other executive officers, 2,328.
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DELINQUENT SECTION
16(a)16(A) REPORTS
Section 16(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) requires our directors, executive officers, and anyone
holdingwho beneficially holds 10% or more of a registered class of our equity securities (reporting persons) to file reports with the SEC showing their holdings of, and transactions in, Energizer securities. Based solely on a review of copies of such reports, and written representations from each reporting person that no other reports are required, we believe that for
2019fiscal 2022 all reporting persons filed the required reports on a timely basis under Section 16(a).
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Our Board has adopted a written policy regarding the review and approval
or ratification of transactions involving the Company and our directors, nominees for directors, executive officers, immediate family members of these individuals, and shareholders owning five percent or more of our outstanding common stock, each of whom is referred to as a related party. The policy covers any related party transaction, arrangement or relationship where a related party has a direct or indirect material interest and the amount involved exceeds $100,000 in any calendar year. Under the policy, the Audit Committee is responsible for
reviewingthe review and
approving, or ratifying,prior approval of the material terms of any related party transactions. The Audit Committee is charged with determining whether the terms of the transaction are any less favorable than those generally available from unaffiliated third parties and determining the extent of the related party’s interest in the transaction.
In adopting the policy, the Board reviewed certain types of related party transactions described below and determined that they should be deemed to be
pre-approved, even if the aggregate amount involved might exceed $100,000:
Officer or director compensation whichthat would be required to be disclosed under Item 402 of the SEC’s compensation disclosure requirements, and expense reimbursements to these individuals in accordance with our policy;
Transactions with another company at which a related party serves as a colleague, director, or holder of less than 10% of that company’s outstanding stock, if the aggregate amount involved does not exceed the greater of $1 million or 2% of that company’s consolidated gross revenues;
Charitable contributions to a charitable trust or organization for which a related party serves as a colleague, officer or director, if the annual contributions by us do not exceed the greater of $100,000 or 2% of the organization’s total annual receipts; and
Transactions in which all of our shareholders receive proportional benefits, the rates or charges involved are determined by competitive bids, the transaction involves obtaining services from a regulated entity at rates fixed by law, or the transaction involves bank services as a depositary of funds, transfer agent or registrar, or similar services.
Our legal department is primarily responsible for the development and implementation of processes and procedures to obtain information from our directors and executive officers with respect to related party transactions.
During fiscal
2019,2022, there were no transactions with executive officers, directors or their immediate family members
which were in an amount in excess of $100,000, and in which any such person had a direct or indirect material interest.Transactions Related to the Acquisitions
Following the completion of the Acquisitions, the Company and Spectrum entered into transition service agreements (“TSAs”) and reverse TSAs. Under the agreements, the Company and Spectrum will provide each other certain specified back office support services on a transitional basis, including among other things, payroll and other human resource services, information systems as well as accounting support.
During the twelve months ended September 30, 2019, the Company paid $0.2 million to Spectrum related to rent for office space at their Middleton, Wisconsin headquarters. In addition, for the twelve months ended September 30, 2019, the Company incurred expense payable to Spectrum of $16.3 millionrequiring disclosure under the TSAs and Spectrum incurred obligations payable to the Company of $1.4 million under the reverse TSAs.
The Company also entered into a supply agreement with Spectrum, ancillary to the acquisition of the Acquired Auto Care Business that became effective upon the consummation of the acquisition. The supply agreement resulted in expense to the Company of $9.8 million for the twelve months ended September 30, 2019 related to these purchases.
On January 28, 2019, in connection with the closing of acquisition of the Acquired Auto Care Business, the Company entered into a Shareholder Agreement (the “Shareholder Agreement”) with Spectrum. The Shareholder Agreement includes, among other things, a 24-month standstill provision from the closing date, registration rights and certain restrictions on Spectrum’s ability to transfer any of the Company’s common stock or other equity securities, or engage in certain hedging transactions, subject to certain exceptions and limitations contained in the Shareholders Agreement, and certain repurchase rights of the Company. In addition, subject to certain limitations and qualifications contained in the Shareholder Agreement, for a period of 18 months following the closing date, Spectrum will be required to vote in favor of the Board’s director nominees and in accordance with the Board’s recommendations identified on the Company’s proxy or information statement on all other matters at any meeting of the Company’s shareholders, including the Annual Meeting.
“Additional information can be found in “Note 21, Related Party Transactions” of the Notes to Consolidated Financial Statements of our Annual Report on Form 10-K for year ended September 30, 2019.
applicable SEC rules.
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Availability of Proxy Materials We are furnishing proxy materials to our shareholders primarily via the Internet instead of mailing printed copies of those materials to each shareholder. By doing so, we save costs and reduce the environmental impact of our Annual Shareholders’ Meeting. On December
17, 2019,15, 2022, we mailed a Notice of Internet Availability of Proxy Materials to certain of our shareholders. The Notice contains instructions about how to access our proxy materials and vote online or vote by telephone. If you would like to receive a paper copy of our proxy materials, please follow the instructions included in the Notice of Internet Availability of Proxy Materials. If you previously chose to receive our proxy materials electronically, you will continue to receive access to these materials via email unless you elect otherwise.
Record holders of Energizer Holdings, Inc. common stock on November
29, 201930, 2022 (the “Record Date”), may vote at the meeting. On
November 29, 2019,the Record Date, there were
69,241,71571,405,885 shares of common stock outstanding, each of which entitled the holder to one vote for each matter to be voted on at our Annual Shareholders’ Meeting.
The shares of common stock held in our treasury will not be voted. Holders of our 7.50% Series A Mandatory Convertible Preferred Stock are not entitled to vote at the meeting.
How to attend the virtual annual meeting
Energizer will be hosting the Annual Shareholders’ Meeting
in PersonYou are entitledonline. A summary of the information you need to attend the Annual Meeting online is provided below:
| • | Any shareholder can attend the Annual Shareholders’ Meeting by visiting www.virtualshareholdermeeting.com/ENR2023 |
We encourage you to access the Annual Shareholders’ Meeting only ifonline at least 15 minutes prior to its start time
The Annual Meeting starts at 8:00 a.m. Central Time
Shareholders may vote electronically and submit questions online while attending the Annual Shareholders’ Meeting
Please have the Control Number we have provided to you were a shareholder asto join the Annual Shareholders’ Meeting
| • | Instructions on how to attend and participate in the Annual Shareholders’ Meeting, including how to demonstrate proof of stock ownership, are available at www.virtualshareholdermeeting.com/ENR2023 |
Questions regarding how to attend and participate in the Annual Shareholders’ Meeting will be answered by calling 1-855-449-0991 on the day of the close of business on November 29, 2019,Annual Shareholders’ Meeting
If I am unable to attend the record date, or hold a valid proxy forvirtual Annual Meeting, can I listen to the meeting. In orderAnnual Meeting by telephone?
Yes. Shareholders unable to access the Annual Shareholders’ Meeting online will be admittedable to call 1-877-328-2502 and listen to the Annual Shareholders’ Meeting if they provide their Control Number. Although shareholders accessing the Annual Shareholders’ Meeting by telephone will be able to listen to the Annual Shareholders’ Meeting, you mustwill not be considered present proof of ownership of Energizer stockat the Annual Shareholders’ Meeting and will not be able to vote unless you also attend the Annual Shareholders’ Meeting online.
What if I have technical difficulties or trouble accessing the virtual meeting website?
We will have technicians ready to assist you with any technical difficulties you may have accessing the virtual meeting. If you encounter any difficulties accessing the virtual meeting during the meeting, please call toll free: 1-855-449-0991, or if calling internationally, please call: 1-720-378-5962.
how can i ask questions?
You can submit questions in writing on the
record date. This canvirtual meeting website during the annual meeting. You must first join the meeting with your 16-digit control number. We intend to answer questions pertinent to Company matters as time allows during the meeting. Questions that are substantially similar may be
any ofgrouped and answered once to avoid repetition. Guidelines for submitting written questions during the
following:A brokerage statement or letter from a bank or broker indicating ownership on November 29, 2019
The Notice of Internet Availability of Proxy Materials
A printout of the proxy distribution email (if you received your materials electronically)
A voting instruction form
A legal proxy provided by your broker, bank, or nominee
Shareholders and proxy holders must also present a form of photo identification such as a driver’s license. Wemeeting will be unable to admit anyone who does not present identification or refuses to comply with our security procedures.available in the rules of conduct for the Annual Shareholders’ Meeting.
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There are four voting methods for record holders:
| | MAIL | | | |
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Mail | | If you choose to vote by mail, complete a proxy card, date and sign it, and return it in the postage-paid envelope provided (if you received a paper copy of the proxy materials) or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. | | |
| | TELEPHONE | |
Telephone
| | You can vote your shares by telephone by calling 1-800-690-6903 and using the identification code indicated on the Notice Regarding the Availability of Proxy Materials or the proxy card mailed to you. Voting is available 24 hours a day. | | |
| | INTERNET | |
Internet
| | You can also vote via the Internet at www.proxyvote.com. Your identification code for Internet voting is on the Notice Regarding the Availability of Proxy Materials or the proxy card mailed to you, and voting is available 24 hours a day. | | |
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Written Ballot
| | You can vote by submitting a written ballot at
During the Annual Shareholders’ Meeting.Meeting, you can vote, using the Control Number we have provided to you. | | |
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64 Energizer Holdings, Inc. 2019 Proxy Statement
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Vote Required; Effect of Abstentions and BrokerNon-Votes
The holders of record of shares representing a majority of the voting power of our issued and outstanding shares of common stock entitled to vote at the Annual Shareholders’ Meeting, present in person or represented by proxy, will constitute a quorum for the transaction of business.
The shares of a shareholder whose ballot on any or all proposals is marked as “abstain” will be included in the number of shares present at the Annual Shareholders’ Meeting to determine whether a quorum is present. If you are the beneficial owner of shares held by a broker or other custodian, you may instruct your broker how to vote your shares through the voting instruction form included with this Proxy Statement. If you wish to vote the shares you own beneficially at the meeting, you must first request and obtain a “legal proxy” from your broker or other custodian. If you choose not to provide instructions or a legal proxy, your shares are referred to as “uninstructed shares”. Whether your broker or custodian has the discretion to vote these shares on your behalf depends on the ballot item. The following table summarizes the votes required for passage of each proposal and the effect of abstentions and uninstructed shares held by brokers.
Brokers and custodians can no longer vote uninstructed shares on your behalf in director elections. For your vote to be counted, you must submit your voting instruction form to your broker or custodian.
Item
| | Votes Required for
Approval
| | Abstentions
| Abstentions | | | Uninstructed
Shares | |
| 1. | Election of Directors | | | “FOR” each nominee to the Board | | | Majority of Voting Power(1)Power (1) | | | Vote Against | | | Not Voted/No Effect | |
| 2. | Ratification of Appointment of Independent Auditor | | | “FOR” | | | Majority of Voting Power(1)Power (1) | | | Vote Against | | | Discretionary Vote | |
| 3. | Advisory,Non-Binding Vote to Approve Executive Compensation | | | “FOR” | | | Majority of Voting Power(1)Power (1) | | | Vote Against | | | Not Voted/No Effect | |
| 4. | Approval of the 2023 Omnibus Incentive Plan | | | “FOR” | | | Majority of Voting Power(1)(2)Power (1) | | | Vote Against | | | Not Voted/No Effect | |
(1)
| “Majority of Voting Power” in table relates to shares present in person or represented by proxy, and entitled to vote on the proposal. |
(2) | In addition, NYSE rules require approval by a majority of the votes cast.
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You may revoke your proxy and change your vote at any time before the voting polls close at our Annual Shareholders’ Meeting by submitting a properly executed proxy of a later date, a written notice of revocation (of your previously executed proxy) sent to our Corporate Secretary, or a vote cast
in person at our Annual Shareholders’ Meeting (however, attending the meeting without voting will not revoke a proxy).
The Board of Directors is soliciting the proxy accompanying this Proxy Statement. We will pay the cost of soliciting proxies. Proxies may be solicited by executive officers, directors, and colleagues of the Company, none of whom will receive any additional compensation for their services. Georgeson,Morrow Sodali LLC may solicit proxies for a fee of $7,500$10,000 plus expenses. These solicitations may be made personally or by mail, facsimile, telephone, messenger, email, or the Internet. We will also reimburse banks, brokers and other custodians, nominees and fiduciaries for their costs of sending the proxy materials to the beneficial owners of our common stock.
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To reduce costs and reduce the environmental impact of our Annual Shareholders’ Meeting, a single Proxy Statement and Annual Report, along with individual proxy cards or individual Notices of Internet Availability, will be delivered in one envelope to certain shareholders having the same last name and address and to individuals with more than one account registered at our transfer agent with the same
address unless contrary instructionsaddress. If a shareholder would like to receive separate copies of proxy materials that have been
received from an affected shareholder.subject to householding, please contact Broadridge Financial Solutions, Inc. at the contact information below to receive separate copies. Shareholders participating in householding will continue to receive separate proxy cards. If you are a registered shareholder and would like to enroll in this service or receive individual copies of this year’s and/or future proxy materials, please contact our transfer agent, Broadridge Financial Solutions, Inc., at
866-741-8213, by email at shareholder@broadridge.com or in writing to 51 Mercedes Way, Edgewood, NY 11717. If you are a beneficial shareholder, you may contact the broker or bank where you hold the account.
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The Board does not intend to bring any other business before the Annual Shareholders’
Meeting,Meeting. If other matters are properly brought before the meeting, the named proxies will vote the proxies they hold in their discretion on such matters; however, and so far as is known to our Board, no matters are to be brought before the meeting other than as specified in the notice of meeting. Our
bylawsBylaws provide that shareholders may nominate candidates for directors or present a proposal or bring other business before an annual meeting only if they give timely written notice of the nomination or the matter to be brought not less than 90 nor more than 120 days prior to the first anniversary of the prior year’s meeting, as described under “
Shareholder Proposals for 2021the 2024 Annual Shareholders’ MeetingMeeting.”
.
SHAREHOLDER PROPOSALS FOR THE
20212024 ANNUAL SHAREHOLDERS’ MEETING
Any proposals to be presented at the
20212024 Annual Shareholders’ Meeting must be received by the Company, directed to the attention of the Corporate Secretary, no later than August
19, 202017, 2023, in order to be included in the Company’s Proxy Statement and form of proxy for that meeting under Rule
14a-8 of the Exchange Act. Upon receipt of any proposal, the Company will determine whether or not to include the proposal in the Proxy Statement and proxy card in accordance with regulations governing the solicitation of proxies. The proposal must comply in all respects with the rules and regulations of the SEC and our
bylaws.Bylaws.
In order for a shareholder to nominate a candidate for director, present a proposal or bring other business before the shareholders under our
bylaws,Bylaws, timely notice must be received by us in advance of the meeting. Ordinarily, such notice must be received not less than 90, nor more than 120, days before the first anniversary of the prior year’s meeting. For the
20212024 Annual Shareholders’ Meeting, the notice would have to be received
between September 29, 2020on or after October 2, 2023, and
October 29, 2020. However, in the event that the date of the 2021 Annual Shareholders’ Meeting is more than 30 dayson or before
or more than 60 days after the first anniversary of the 2021 Annual Shareholders’ Meeting, notice must be received no earlier than the 120th day prior to the date of the 2021 Annual Shareholders’ Meeting and not later than the close of business on the later of the 90th day prior to the date of the 2021 Annual Shareholders’ Meeting, or the seventh day following the day on which notice of the date of the meeting was mailed or on which public notice of the meeting was given.November 1, 2023. The notice of nomination must include, as to each person whom the shareholder proposes to nominate for election, information required by our
bylaws,Bylaws, including:
the nominee’s name, age, business and residential address;
the nominee’s principal occupation for the previous five years;
the nominee’s consent to being named as a nominee and to serving on the Board;
the nominee’s “disclosable interests” as of the date of the notice (which information shall be supplemented by such person, if any, not later than ten days after the record date of the Annual Shareholders’ Meeting to disclose such ownership as of the record date), which includes:
–
| – | | shares of common stock; options, warrants, convertible securities, stock appreciation rights, or similar rights with respect to our common stock; any proxy, contract, arrangement, understanding, or relationship conveying a right to vote common stock; |
–
| – | | any short interest with respect to common stock; |
–
| – | | any derivative instruments held by a partnership in which the nominee has a partnership interest; and |
–
| – | | rights to any performance-related fee based on any increase or decrease in the value of common stock or any related derivative instrument; and |
a description of all monetary or other material agreements, arrangements or understandings between the nominating shareholder and the nominee during the prior three years.
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