☐ | Preliminary Proxy Statement | |
☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
☒ | Definitive Proxy Statement | |
☐ | Definitive Additional Materials | |
☐ | Soliciting Material Pursuant to § 240.14a-12 |
☒ | No fee required. | |||
☐ | Fee paid previously with preliminary materials. | |||
☐ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and0-11 |
Notice of Annual Meeting of Stockholders
To be held April 27, 202325, 2024
March 17, 202318, 2024
To Our Stockholders:
We cordially invite you to attend the 20232024 annual meeting of stockholders of Saia, Inc. The meeting will be held in a virtual format on April 27, 2023,25, 2024, at 10:30 a.m., Eastern Daylight Time. Stockholders will not be able to attend the annual meeting physically but will be able to participate by submitting questions and voting online. To be admitted to the virtual annual meeting at www.meetnow.global/MHNFHPW,MT7RVRY, you must enter the control number found on your proxy card, voter instruction form or the notice. A list of stockholders entitled to vote will be available via electronic link during the whole time of the annual meeting once you are admitted to the meeting room. We look forward to your participation.
The purpose of the meeting is to:
1. | Elect |
2. | Vote on an advisory basis to approve the compensation of Saia’s Named Executive Officers; |
3. | Vote on an |
4. | Ratify the appointment of KPMG LLP as Saia’s independent registered public accounting firm for fiscal year |
5. | Transact any other business that may properly come before the meeting and any postponement or adjournment of the meeting. |
Only stockholders of record at the close of business on March 6, 20234, 2024 may vote at the meeting or any postponements or adjournments of the meeting.
By order of the Board of Directors,
Douglas L. Col
Secretary
Please complete, date, sign and return the accompanying proxy card, voter instruction card, or vote by telephone or the internet. The enclosed return envelope requires no additional postage if mailed in either the United States or Canada. Alternatively, you may vote electronically via the internet. Go to www.investorvote.com/saia and follow the steps outlined on the secure website.
If you are a registered stockholder, you may elect to have next year’s proxy statement and annual report made available to you via the internet. We strongly encourage you to enroll in this service. It is a cost-effective way for us to send you proxy materials and annual reports.
Your vote is very important. Please vote whether or not you plan to attend the meeting.
Proxy Summary
This summary highlights certain information contained elsewhere in this proxy statement. This summary does not contain all of the information that you should consider and you should read the entire proxy statement before voting. For more complete information regarding the 20222023 performance of Saia, Inc. (the “Company”), please review the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022.2023.
20232024 Annual Meeting of Stockholders
Date and Time:
April 27, 2023,25, 2024, 10:30 a.m., Eastern Daylight Time
Virtual:
Attend the annual meeting online, including voting and submitting questions at:
www.meetnow.global/MHNFHPWMT7RVRY
Record Date:
March 6, 20234, 2024
Voting Matters and Board Recommendations
Our Board’s Recommendation | ||||||
Election of | FOR each Director Nominee | |||||
Advisory Vote to Approve Executive Compensation (page | FOR | |||||
| ||||||
Ratification of Appointment of Independent Registered Public Accounting Firm (page | FOR |
20222023 Business Highlights
In 2022,2023, the Company continued to effectively execute its long-term strategic plan and delivered strong operating results. The following tables illustrate the three-year directional relationship between Company performance, based on three of the Company’s key operating and financial metrics, and the compensation (as defined in the Summary Compensation table on page 40) of Saia’s Chief Executive Officer.
SAIA, INC. | i |
PROXY SUMMARY
Director Nominees (page 2)
Saia is phasing out its classified Board of Directors. The Board of Directors currently consists of ten directors, divided into two classes. Theand the terms of the Class IIIthese directors will expire at the upcoming annual meeting. The Board of Directors has nominated the following persons as Class I directors for terms expiring at the 20242025 annual meeting of stockholders. IfEach nominee is currently a director of Saia and if elected at the upcoming annual meeting, these nominees will join the existing Class I ofcontinue as directors. Proxies cannot be voted for a greater number of persons than the seventen nominees named herein. Each nominee is currently a director of Saia.herein
Name | Age | Director Since | Primary Occupation | Committee Memberships | Age | Director Since | Primary Occupation | Committee Memberships | ||||||||||||
Di-Ann Eisnor* | 51 | 2017 | Chief Executive Officer of Journey Builders, Inc. d/b/a Crews by Core | Compensation and Human Capital | ||||||||||||||||
Donna E. Epps* | 58 | 2019 | Retired Partner, Deloitte | Audit, Nominating and Governance | 59 | 2019 | Retired Partner, Deloitte LLP | Audit, Nominating and Governance | ||||||||||||
John P. Gainor, Jr.* | 66 | 2016 | Retired Chief Executive Officer and President of International Dairy Queen, Inc. | Audit, Nominating and Governance | 67 | 2016 | Retired Chief Executive Officer and President of International Dairy Queen, Inc. | Nominating and Governance | ||||||||||||
Kevin A. Henry* | 55 | 2021 | Chief People Officer at BlueLinx Holdings Inc. | Compensation | 56 | 2021 | Executive Vice President and Chief People Officer at PulteGroup, Inc. | Audit, Compensation and Human Capital | ||||||||||||
Frederick J. Holzgrefe, III | 55 | 2019 | President & Chief Executive Officer of Saia, Inc. | None | 56 | 2019 | President & Chief Executive Officer of Saia, Inc. | None | ||||||||||||
Donald R. James* | 50 | 2021 | Chief Executive Officer at Solero Technologies | Audit | 51 | 2021 | Chief Executive Officer at Solero Technologies, LLC | Audit | ||||||||||||
Randolph W. Melville*± | 64 | 2015 | Retired Senior Vice President and General Manager, Western Division of Frito-Lay North America | Compensation, Nominating and Governance | 65 | 2015 | Retired Senior Vice President and General Manager, Western Division of Frito-Lay North America | Compensation and Human Capital, Nominating and Governance | ||||||||||||
Richard D. O’Dell | 61 | 2006 | Chairman of the Board and Retired Chief Executive Officer of Saia, Inc. | None | 62 | 2006 | Chairman of the Board and Retired Chief Executive Officer of Saia, Inc. | None | ||||||||||||
Jeffrey C. Ward* | 65 | 2006 | Vice President & Partner at A.T. Kearney, Inc. | Compensation and Human Capital, Nominating and Governance | ||||||||||||||||
Susan F. Ward* | 63 | 2019 | Retired VP and Chief Accounting Officer of United Parcel Service, Inc. | Audit |
* | Independent Director |
± | Lead Independent Director for |
Management Proposals (pages 59-62)60-64)
1. | Advisory Vote to Approve Executive Compensation. We are asking stockholders to approve on an advisory basis our Named Executive Officer compensation. The Board recommends a FOR vote because it believes that our compensation policies and practices are effective in attracting, motivating and retaining talented executive officers and aligning the executives’ long-term interests with those of our stockholders. |
2. |
|
3. | Ratification of Appointment of Independent Registered Public Accounting Firm. As a matter of good governance, we are asking our stockholders to ratify the selection of KPMG LLP as our auditors for |
ii | SAIA, INC. |
PROXY SUMMARY
Corporate Governance (page 13)
The following are highlights of Saia’s corporate governance practices:
• | Separate Chief Executive Officer and Chairman of the Board. Maintaining separate roles allows the Chairman to devote his time and attention to matters of Board oversight and governance and allows the Chief Executive Officer to focus his time and energy managing the business. |
• | The Board has a Lead Independent Director. The Lead Independent Director position ensures the Board has a director in a leadership position that is “independent” under applicable rules of the Nasdaq Global Select Market. The Lead Independent Director is elected annually by the independent directors. For |
• | Saia has a Diverse Board. Of the ten members of Saia’s Board, three are women and four are ethnically diverse. |
• | Commitment to Board Refreshment. Of the ten members of Saia’s Board, five have joined the Board in the last |
• |
|
• | Board Oversight of Risk Management. The Board executes its oversight responsibility both through active review and discussion of key risks facing the Company and by delegating certain oversight responsibilities to Board Committees. |
• | Majority Voting for Director Elections. Saia’s Bylaws require that, in an uncontested election, a nominee to the Board must receive more votes cast for than against his or her election in order to be elected to the Board. If an incumbent director fails to receive a majority of the vote for reelection in an uncontested election, the Nominating and Governance Committee recommends to the full Board whether to accept or reject the nominee’s previously submitted resignation, and the full Board makes the final determination. We believe the ability of stockholders to vote for or against a director, as opposed to merely withholding a vote for a director, increases accountability to stockholders. The election of directors at the |
• | Three Standing Committees of the Board of Directors: the Audit Committee, the Compensation and Human Capital Committee and the Nominating and Governance Committee. Saia’s Board Committees are comprised entirely of independent directors. Saia’s Committee charters are available free of charge on the Company’s website (www.saia.com) under the |
• | Stock Ownership Guidelines. The Company has adopted stock ownership guidelines that apply to all officers who are eligible to receive long-term incentives, including all Named Executive Officers, and to Saia’s directors. |
• | Annual Board and Committee Evaluations. The Board conducts annual Board and Committee performance evaluations that are intended to determine whether the Board and each of its Committees are functioning effectively and to provide them with an opportunity to reflect on and improve processes and effectiveness. |
• | Clawback |
• | Policy Against Hedging and Pledging of Saia Stock. Directors and employees subject to the Company’s insider trading |
SAIA, INC. | iii |
PROXY SUMMARY
Executive Compensation Highlights (page 24)
• |
|
|
3-YEAR CEO TOTAL DIRECT COMPENSATION (1) VS. 3-YEAR TOTAL STOCKHOLDER RETURN(2)
|
|
2023 |
PROXY SUMMARY
2022 Compensation Summary
Below is a summary of compensation awarded to, earned by or paid to the Named Executive Officers for services rendered in all capacities within Saia during the fiscal year ended December 31, 2022.2023.
Name & Principal Position | Salary | Bonus ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($) | Total ($) | Salary | Bonus ($) | Stock Awards ($) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($) | Total ($) | |||||||||||||||||||||||||||||
Frederick J. Holzgrefe, III President & Chief Executive Officer (PEO) | 875,000 | — | 1,916,617 | 477,691 | 1,152,397 | 102,167 | 4,523,872 | 910,000 | — | 3,382,889 | 1,277,276 | 160,694 | 5,730,859 | |||||||||||||||||||||||||||||
Douglas L. Col Executive Vice President & Chief Financial Officer (PFO) | 480,000 | — | 584,276 | 146,040 | 442,512 | 65,222 | 1,718,049 | 523,120 | — | 1,070,024 | 533,981 | 82,661 | 2,209,786 | |||||||||||||||||||||||||||||
Raymond R. Ramu Executive Vice President & Chief Customer Officer | 510,000 | — | 724,033 | 180,901 | 503,753 | 62,412 | 1,981,099 | 570,960 | — | 1,414,938 | 582,877 | 88,188 | 2,656,962 | |||||||||||||||||||||||||||||
Patrick D. Sugar Executive Vice President of Operations | 425,016 | — | 482,700 | 120,601 | 391,823 | 53,608 | 1,473,748 | 491,573 | — | 1,218,358 | 501,826 | 68,854 | 2,280,612 | |||||||||||||||||||||||||||||
Anthony R. Norwood Executive Vice President & Chief Human Resources Officer | 304,180 | — | 572,280 | 52,030 | 240,364 | 122,801 | 1,291,656 | |||||||||||||||||||||||||||||||||||
Rohit Lal Executive Vice President & Chief Information Officer | 394,160 | — | 366,516 | 251,500 | 72,539 | 1,084,714 |
See also the narrative and footnotes accompanying the Summary Compensation Table on page 40.
Important Dates for 20242025 Annual Meeting of Stockholders (page 70)72)
Any stockholder who intends to present a proposal (other than nomination of directors) at the annual meeting in 20242025 must deliver such proposal to Saia’s Corporate Secretary at 11465 Johns Creek Parkway, Suite 400, Johns Creek, Georgia 30097:
• | Not later than November 17, |
On or after December 29, 2023,26, 2024, and on or before January 28, 2024,25, 2025, if the proposal is submitted pursuant to Saia’s Bylaws, in which case we are not required to include the proposal in our proxy materials.
iv | SAIA, INC. | 2024 Proxy Statement |
PROXY SUMMARY
Cautionary Note Regarding Forward-Looking Statements
This proxy statement includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical or current facts, made in this proxy statement are forward-looking. Words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “may,” “plan,” “predict,” “believe,” “should” and similar words or expressions are intended to identify forward-looking statements. Investors should not place undue reliance on forward-looking statements and the Company undertakes no obligation to publicly update or revise any forward-looking statements, except as required by law. All forward-looking statements reflect the present expectation of future events of our management as of the date of this proxy statement and are subject to a number of important factors, risks, uncertainties and assumptions that could cause actual results to differ materially from those described in any forward-looking statements. Factors, risks, uncertainties and assumptions that could cause our actual results to differ significantly from management’s expectations are described in our 20222023 Annual Report on Form 10-K. Website references throughout this proxy statement are provided for convenience only, and the content on the referenced websites is not incorporated by reference into this document.
SAIA, INC. | v |
SAIA, INC.
11465 Johns Creek Parkway, Suite 400
Johns Creek, Georgia 30097
20232024 PROXY STATEMENT
The Board of Directors (the “Board”) of Saia, Inc. (“Saia” or the “Company”) is furnishing you this proxy statement in connection with the solicitation of proxies on its behalf for the 20232024 annual meeting of stockholders. The meeting will be held in a virtual format on April 27, 2023,25, 2024, at 10:30 a.m., Eastern Daylight Time. Stockholders will not be able to attend the annual meeting physically. To be admitted to the virtual annual meeting at www.meetnow.global/MHNFHPW,MT7RVRY, you must enter the control number found on your proxy card, voter instruction form or the notice you previously received. At the meeting, stockholders will vote on (a) the election of seventen directors, (b) an advisory basis to approve the compensation of Saia’s Named Executive Officers, (c) an advisory basis on the frequency of future advisory votes on the compensationamendment and restatement of Saia’s Named Executive Officers,certificate of incorporation to limit the liability of certain officers and make various conforming and technical revisions, (d) the ratification of the appointment of KPMG LLP as Saia’s independent registered public accounting firm for fiscal year 2023,2024, and (e) the transaction of any other business that may properly come before the meeting, and any postponement or adjournment of the meeting, although we know of no other business to be presented.
By submitting your proxy (either by signing and returning the enclosed proxy card or by voting electronically on the internet or by telephone), you authorize Frederick J. Holzgrefe, III and Richard D. O’Dell and each of them to represent you and vote your shares at the meeting in accordance with your instructions. They also may vote your shares to adjourn the meeting and will be authorized to vote your shares at any postponements or adjournments of the meeting.
Saia’s Annual Report to Stockholders for the fiscal year ended December 31, 2022,2023, which includes Saia’s audited annual consolidated financial statements, accompanies this proxy statement. Although the Annual Report is being distributed with this proxy statement, it does not constitute a part of the proxy solicitation materials and is not incorporated by reference into this proxy statement.
We are first sending this proxy statement, form of proxy and accompanying materials to stockholders on or about March 17, 2023.18, 2024.
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE PROMPTLY SUBMIT YOUR PROXY EITHER IN THE ENCLOSED ENVELOPE, VIA THE INTERNET OR BY TELEPHONE.
SAIA, INC. | 1 |
Proposal 1 – Election of Directors
Stockholders approved the phased elimination of the staggered election of directors at the Company’s 2021 annual meeting of stockholders. StartingCommencing with the election of directors at the 20222024 annual meeting, of stockholdersthe Company’s Board is no longer staggered and continuing at each annual meeting thereafter, including at the 2023 annual meeting, all directors whose terms are expiring will be elected for a one yearone-year term. The Board of Directors currently consists of ten directors divided into two classes (Class I and Class III). The terms of the Class III directors will expire at the upcoming annual meeting. Following the 2023 annual meeting of stockholders, only Class I will remain.directors.
The Board of Directors has nominatedDi-Ann Eisnor, Donna E. Epps, John P. Gainor, Jr., Kevin A. Henry, Frederick J. Holzgrefe, III, Donald R. James, Randolph W. Melville, and Richard D. O’Dell, Jeffrey C. Ward and Susan F. Ward for election as Class I directors for terms expiring at the 20242025 annual meeting of stockholders. Each nominee currently serves as a director.
Each nominee has consented to being named in this proxy statement and has agreed to serve if elected. If a nominee is unable to stand for election, the Board of Directors may either reduce the number of directors to be elected or select a substitute nominee. If a substitute nominee is selected, the proxy holders will vote your shares for the substitute nominee, unless you vote “against” or “abstain”. Proxies cannot be voted for a greater number of persons than the seventen nominees named herein.
In addition to the information presented below regarding the specific experience, qualifications, attributes and skills of each nominee and continuing director that led the Board of Directors to the conclusion that such person should serve as a director, the Board also believes that all of the nominees and continuing directors have a reputation for high personal and professional ethics, integrity, values and character. Each nominee and continuing director brings a strong and unique background and set of skills to the Board of Directors, giving the Board as a whole competence and experience in a wide variety of areas, including corporate governance and board service, executive and operations management, strategic planning, sales and marketing, the less-than-truckload (“LTL”) and transportation industry, accounting and finance, and risk assessment. They have demonstrated business acumen and an ability to exercise sound judgment, as well as a commitment of service to the Company and the Board. Each nominee and continuing director is committed to achieving, monitoring and improving on the Company’s business strategy.
|
Your Board of Directors unanimously recommends that you vote “FOR” the election of each of the |
2 | SAIA, INC. |
PROPOSAL 1 – ELECTION OF DIRECTORS
Board Nomination Process
• | Number of New Directors in Last |
• | Average Tenure of Directors: |
• | Average Age of Directors: |
• | Percentage of Woman Directors: 30% |
• | Percentage of Ethnically Diverse Directors: 40% |
• | Percentage of Independent Directors: 80% |
The Nominating and Governance Committee is responsible for recommending director candidates to the Board of Directors. The Nominating and Governance Committee will apply the criteria set forth in the Corporate Governance Guidelines when considering whether to recommend any candidate as a director nominee, including candidates recommended by stockholders. The Nominating and Governance Committee seeks nominees with a broad range of experience, professions, skills, geographic representation and backgrounds. The Nominating and Governance Committee believes that the backgrounds and qualifications of the directors, considered as a group, should provide a significant composite mix of experience, knowledge and abilities that will allow the Board to fulfill its responsibilities.
The Corporate Governance Guidelines include director qualification standards that provide as follows:
A majority of the members of the Board of Directors must qualify as independent directors in accordance with the rules of The Nasdaq Global Select Market;
No member of the Board of Directors should serve on the Board of Directors of more than three other public companies;
No person may stand for election as a director of the Company after reaching age 72; and
No director shall serve as a director, officer or employee of a competitor of the Company.
While the selection of qualified directors is a complex, subjective process that requires consideration of many intangible factors, the Corporate Governance Guidelines provide that directors and candidates for director generally should, at a minimum, meet the following criteria:
Directors and candidates should have high personal and professional ethics, integrity, values and character and be committed to representing the best interests of the Company and its stockholders;
Directors and candidates should have experience and a successful track record at senior policy-making levels in business, government, technology, accounting, law and/or administration;
Directors and candidates should have sufficient time to devote to the affairs of the Company and to enhance their knowledge of the Company’s business, operations and industry; and
Directors and candidates should have expertise or a breadth of knowledge about issues affecting the Company that is useful to the Company and complementary to the background and experience of other Board members.
If a vacancy arises or the Board decides to expand its membership, the Nominating and Governance Committee may seek recommendations of potential candidates from a variety of sources (including incumbent directors, stockholders, the Company’s management and professional recruitment firms). The Nominating and Governance Committee evaluates each potential candidate’s educational background, employment history, outside commitments and other relevant factors to determine whether he or she is potentially qualified to serve on the Board. The Nominating and Governance Committee seeks to identify and recruit the best available candidates. The Committee evaluates qualified candidates recommended by stockholders on the same basis as those submitted by other sources. Stockholders who wish to recommend a candidate for director or nominate a candidate for election at an annual meeting should follow the procedures described on page 70.71.
SAIA, INC. | 3 |
PROPOSAL 1 – ELECTION OF DIRECTORS
Board Diversity
The Board is committed to having diverse individuals from different backgrounds with varying perspectives, professional experience, education and skills serving as members of the Board. The Board believes that a diverse membership with a variety of perspectives and experiences is an important feature of a well-functioning board, and the composition of the Board reflects the Board’s commitment to diversity. When identifying candidates for the Board, the Board endeavors to search for highly qualified women and individuals from minority groups to include in the pool from which directors are chosen. Of the ten members of Saia’s Board, three are women and four are ethnically diverse.
Board Diversity Matrix (As of March 1, 2023) | ||||||||||||||||||||||||||||||||||||
Board Diversity Matrix (As of March 1, 2024) | Board Diversity Matrix (As of March 1, 2024) | |||||||||||||||||||||||||||||||||||
Total Number of Directors | 10 | 10 | ||||||||||||||||||||||||||||||||||
Male | Female | Non-Binary | Did Not Disclose Gender | Male | Female | Non-Binary | Did Not Disclose Gender | |||||||||||||||||||||||||||||
Part I: Gender Identity | ||||||||||||||||||||||||||||||||||||
Number of directors based on gender identity | 7 | 3 | 0 | 0 | 7 | 3 | 0 | 0 | ||||||||||||||||||||||||||||
Part II: Demographic Background | ||||||||||||||||||||||||||||||||||||
African American or Black | 3 | 0 | 0 | 0 | 3 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
Alaskan Native or American Indian | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
Asian | 0 | 1 | 0 | 0 | 0 | 1 | 0 | 0 | ||||||||||||||||||||||||||||
Hispanic or Latinx | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
Native Hawaiian or Pacific Islander | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
White | 4 | 3 | 0 | 0 | 4 | 3 | 0 | 0 | ||||||||||||||||||||||||||||
Two or More Races or Ethnicities | 0 | 1 | 0 | 0 | 0 | 1 | 0 | 0 | ||||||||||||||||||||||||||||
LGBTQ+ | 0 | 0 | ||||||||||||||||||||||||||||||||||
Undisclosed | 0 | 0 |
Board Diversity Matrix (As of March 1, 2022) | ||||||||||||||||||||||||||||||||||||
Board Diversity Matrix (As of March 1, 2023) | Board Diversity Matrix (As of March 1, 2023) | |||||||||||||||||||||||||||||||||||
Total Number of Directors | 10 | 10 | ||||||||||||||||||||||||||||||||||
Male | Female | Non-Binary | Did Not Disclose Gender | Male | Female | Non-Binary | Did Not Disclose Gender | |||||||||||||||||||||||||||||
Part I: Gender Identity | ||||||||||||||||||||||||||||||||||||
Number of directors based on gender identity | 7 | 3 | 0 | 0 | 7 | 3 | 0 | 0 | ||||||||||||||||||||||||||||
Part II: Demographic Background | ||||||||||||||||||||||||||||||||||||
African American or Black | 3 | 0 | 0 | 0 | 3 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
Alaskan Native or American Indian | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
Asian | 0 | 1 | 0 | 0 | 0 | 1 | 0 | 0 | ||||||||||||||||||||||||||||
Hispanic or Latinx | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
Native Hawaiian or Pacific Islander | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
White | 4 | 3 | 0 | 0 | 4 | 3 | 0 | 0 | ||||||||||||||||||||||||||||
Two or More Races or Ethnicities | 0 | 1 | 0 | 0 | 0 | 1 | 0 | 0 | ||||||||||||||||||||||||||||
LGBTQ+ | 0 | 0 | ||||||||||||||||||||||||||||||||||
Undisclosed | 0 | 0 |
4 | SAIA, INC. |
PROPOSAL 1 – ELECTION OF DIRECTORS
Director Skills
Skills | Number of Directors | ||
Previous or Current Senior Executive | 8 | ||
Trucking or Logistics Experience | 7 | ||
Strategic Planning | 9 | ||
Operations Experience | 8 | ||
Financial or Accounting | 5 | ||
Enterprise Risk Management | 7 | ||
Information Technology or Cybersecurity | 3 | ||
Human Capital Management | 4 | ||
Health & Safety | 3 | ||
Sales & Marketing | 3 | ||
Environmental | 3 | ||
Innovation, Engineering & Disruptive Technologies | 4 | ||
Equipment Operations | 3 | ||
Investor Relations & Communications | 5 | ||
Commercial Real Estate | 2 |
Board Refreshment
In the past fourfive years, the Company has refreshed its Board by adding five new directors, four of whom are independent. The Company believes that it benefits from having longer tenured directors, including our Chairman, on the Board who are familiar with the Company’s business. We believe the average tenure of our directors of seveneight years reflects the balance the Board seeks between different perspectives brought by longer-serving directors and new directors.
SAIA, INC. | 5 |
PROPOSAL 1 – ELECTION OF DIRECTORS
INFORMATION CONCERNING DIRECTOR NOMINEES AND CONTINUING DIRECTORS
The following tables set forth certain information regarding each nominee for director and continuing director of the Company. The information presented includes information provided to the Company by each nominee and continuing director including such person’s name, age, principal occupation and business experience for at least the past five years, the names of other publicly-held companies of which such person currently serves as a director or has served as a director during the past five years and the year in which the nominee or continuing director first became a director of Saia.
NOMINEES FORDI-ANN EISNOR
Director Since: 2017 Age: 51 Committee Membership: • Compensation and Human Capital |
Qualifications:
Ms. Eisnor is the co-founder and serves as Chief Executive Officer of Journey Builders, Inc. d/b/a Crews by Core, a venture-backed construction labor marketplace, since 2019. Ms. Eisnor was an executive of The We Company, a real estate leasing company and a part of the We Work Companies, from February 2019 until her departure in October 2019. In this position, she was responsible for development of their cities platform. Prior to that time, she was Director of Growth of Waze Inc., a crowd-sourced navigation and real-time traffic application owned by Alphabet, Inc. Ms. Eisnor was with Waze starting in 2009, when she founded its U.S. office. Prior to joining Waze, Ms. Eisnor was co-founder and Chief Executive Officer of Platial Inc., a collaborative, user-generated cartographic website. Ms. Eisnor brings to the Board significant entrepreneurial experience with disruptive technologies focused on the transportation industry and in building and leading marketing services and geo-mapping businesses.
Other Public Company Directorships
Current: Ms. Eisnor serves as an independent director and member of the audit committee, nominating and corporate governance committee and chair of the compensation committee of CXApp Inc. (formerly KINS Technology Group).
6 | SAIA, INC. | 2024 Proxy Statement |
PROPOSAL 1 – ELECTION AS CLASS IOF DIRECTORS
FOR A ONE-YEAR TERM EXPIRING AT THE 2024 ANNUAL MEETING
DONNA E. EPPS
Director Since: 2019
Age:
Committee Membership: • Audit • Nominating and Governance |
Qualifications:
Ms. Epps was with Deloitte LLP, a multi-national professional services network, for over 31 years. Ms. Epps served as an attest Partner of Deloitte LLP from 1998 through 2003 and as a Risk and Financial Advisory Partner of Deloitte LLP from 2004 until her retirement in 2017. Ms. Epps brings to the Board significant audit, governance, risk and compliance experience as a provider of attest and consulting services to private and public companies across multiple industries. Ms. Epps qualifies as an “audit committee financial expert.”
Other Public Company Directorships
Current:Ms. Epps serves as an independent director and member of the nominating and corporate governance committee and chair of the audit committee of Texas Pacific Land Corporation and as an independent director and chair of the audit committee and member of the compensation and nominating and corporate governance compensation and audit committees of Texas Roadhouse, Inc.
SAIA, INC. | 7 |
PROPOSAL 1 – ELECTION OF DIRECTORS
JOHN P. GAINOR, JR.
Director Since: 2016
Age:
Committee Membership: •
|
Qualifications:
Mr. Gainor served as the President and Chief Executive Officer of International Dairy Queen, Inc., a multi-national fast food chain and a subsidiary of Berkshire Hathaway, from 2008 until his retirement in 2017. Mr. Gainor was with International Dairy Queen starting in 2003 and served as its Chief Supply Chain Officer prior to being named President and CEO. From 2000-2003, Mr. Gainor was President and Co-Founder of Supply Solutions, Inc., a company that focused on designing and implementing supply chain solutions and business expansion models for major restaurant chains and consumer products companies. Mr. Gainor has also held various executive positions focusing on logistics, supply chain and transportation with Consolidated Distribution Corporation, AmeriServe Distribution Corporation, and Warner Lambert Corporation. Mr. Gainor brings significant business experience to the Board as the former President and Chief Executive Officer of an internationally-known fast food restaurant chain, and based on over 40 years’ of experience in logistics, supply chain and transportation. Mr. Gainor qualifies as an “audit committee financial expert.”
Other Public Company Directorships
Current:Previous: Mr. Gainor servesHe previously served as an independent director and member of the nominating and governance committee of Bloomin’ Brands, Inc.
Previous: from 2020 to 2023. He previouslyalso served as an independent director and member of the audit and finance committees of Jack in the Box Inc. from 2019 to 2021. He also previously served as an independent director and member of the compensation committee of TreeHouse Foods, Inc. from 2021 to 2022.
SAIA, INC. | 2024 Proxy Statement |
PROPOSAL 1 – ELECTION OF DIRECTORS
KEVIN A. HENRY
Director Since: 2021
Age:
Committee Membership: • Audit • Compensation and Human Capital |
Qualifications:
Mr. Henry has served as Executive Vice President and Chief People Officer at PulteGroup, Inc., a residential home construction company, since June 2023. He was previously Chief People Officer at BlueLinx Holdings Inc., a wholesale distributor of building and industrial products, sincefrom March 2022. He was previously2022 to June 2023 and Executive Vice President and Chief Human Resources Officer at Extended Stay America, a national hotel company, from 2014 to 2022. From 2010 to 2014, Mr. Henry served as Senior Vice President and Chief Human Resources Officer of Snyder’s-Lance, Inc., a national snack food company. Prior to that, Mr. Henry served in a variety of positions at Coca-Cola Bottling Co. Consolidated, a beverage manufacturer and distributor, including as Chief Human Resources Officer from 2007 to 2010 and Senior Vice President of Human Resources from 2001 to 2007. Mr. Henry brings to the Board significant experience in employee relations, organizational development and human capital management.
FREDERICK J. HOLZGREFE, III
Director Since: 2019
Age:
Committee Membership: • None |
QualificationsQualifications:
Mr. Holzgrefe has been President and Chief Executive Officer of Saia, Inc. since April 2020. He served as President and Chief Operating Officer of Saia, Inc. from May 2019 to April 2020 and as President, Chief Operating Officer and Chief Financial Officer from January 2019 to May 2019. Previously, he was Executive Vice President and Chief Financial Officer of the Company from July 2017 to January 2019. Mr. Holzgrefe joined the Company in September 2014 as Vice President and Chief Financial Officer of the Company. Mr. Holzgrefe’s prior experience includes tenure in food and technology businesses and banking and financial advisory services. Mr. Holzgrefe brings extensive knowledge about the Company and its operations to the Board. He also has significant operational and financial experience in a broad range of industrial and distribution related businesses.
SAIA, INC. | 9 |
PROPOSAL 1 – ELECTION OF DIRECTORS
DONALD R. JAMES
Director Since: 2021
Age:
Committee Membership: • Audit |
Qualifications:
Dr. James joinedhas served as the Chief Executive Officer of Solero Technologies, LLC, a global supplier of solenoids, accumulators and control modules to the automotive industry and industrial sector, in March 2022 and became Chief Executive Officer of that company insince April 2022. Previously, he was President of the Americas for Joyson Safety Systems, a provider of safety components and systems to automotive and non-automotive markets, from 2019 to 2021. Dr. James was with Continental A.G., a multi-national automotive parts manufacturing company, starting in 2005 and led various functional areas primarily related to automotive safety, technology development and production. He served as Continental A.G.’s Vice President of Hydraulic Brake Systems for North America from 2017 to 2019. Dr. James brings to the Board significant commercial vehicle industry experience in the technology space around alternative fuels, vehicle safety and autonomy. In addition, he brings experience with sustainability and green initiatives.
10 | SAIA, INC. | 2024 Proxy Statement |
PROPOSAL 1 – ELECTION OF DIRECTORS
RANDOLPH W. MELVILLE
Director Since: 2015
Age:
Committee Membership: • Compensation and Human Capital • Nominating and Governance |
Qualifications:
Mr. Melville was the Senior Vice President and General Manager for the Western Division of PepsiCo’s Frito-Lay North America, a manufacturer, marketer and seller of convenience foods, until his retirement in 2017. In that position, he was accountable for all aspects of the company’s western division performance, including sales, operations, supply chain, finance, human resources and strategic planning. Prior to his 20-plus years at Frito-Lay, Mr. Melville served as a Senior Vice President at Maytag Corporation from 1999-2001 and held various sales and marketing leadership positions with Procter & Gamble Distributing Company from 1981 to 1993. Mr. Melville brings significant national sales, marketing, operations and supply chain experience to the Board. Mr. Melville also has substantial expertise in the areas of distribution, international business and human resources. Mr. Melville serves as Saia’s Lead Independent Director.
Other Public Company Directorships
Current: Mr. Melville serves on the Board of Trustees and is a member of the distribution and technology committee and human resources, nominating and corporate governance committee of The Northwestern Mutual Life Insurance Company and serves as an independent director and member of the audit and nominating and governance committees of GMS, Inc.
Previous: Mr. Melville previously served as an independent director and member of the compensation committee of Interline Brands, Inc.
PROPOSAL 1 – ELECTION OF DIRECTORS
RICHARD D. O’DELL
Director Since: 2006
Age:
Committee Membership: • None |
Qualifications:
Mr. O’Dell is Non-Executive Chairman of the Board of Directors of Saia, Inc. He served as Chief Executive Officer of Saia, Inc. from December 2006 until his retirement in April 2020. Mr. O’Dell joined the Company in 1997 and served in various executive and financial positions until his appointment as Chief Executive Officer. Mr. O’Dell brings extensive knowledge and understanding of the Company and the LTL industry to the Board through his experience as the former Chief Executive Officer of the Company. Additionally, he has experience in public accounting as a certified public accountant.
SAIA, INC. | 11 |
PROPOSAL 1 – ELECTION OF DIRECTORS
CLASS I DIRECTORS CONTINUING IN OFFICE WHOSE TERMS EXPIRE
AT THE 2024 ANNUAL MEETING
DI-ANN EISNOR
|
Qualifications:
Ms. Eisnor is the co-founder and serves as Chief Executive Officer of Core, a venture-backed construction labor marketplace, since 2019. Ms. Eisnor was an executive of The We Company, a part of the We Work Companies, from February 2019 until her departure in October 2019. In this position, she was responsible for development of their cities platform. Prior to that time, she was Director of Growth of Waze Inc., a crowd-sourced navigation and real-time traffic application owned by Alphabet, Inc. Ms. Eisnor was with Waze starting in 2009, when she founded its U.S. office. Prior to joining Waze, Ms. Eisnor was co-founder and Chief Executive Officer of Platial Inc., a collaborative, user-generated cartographic website. Ms. Eisnor brings to the Board significant entrepreneurial experience with disruptive technologies focused on the transportation industry and in building and leading marketing services and geo-mapping businesses.
Other Public Company Directorships
Current: Ms. Eisnor serves as an independent director and member of the audit committee and chair of the compensation committee of KINS Technology Group.
JEFFREY C. WARD
Director Since: 2006
Age:
Committee Membership: • Compensation and Human Capital • Nominating and Governance |
Qualifications:
Mr. Ward is a Vice President and Partner of A.T. Kearney, Inc., a global management consulting firm. Mr. Ward joined A.T. Kearney, Inc. in 1991. Mr. Ward’s experience at A.T. Kearney is focused on the North American transportation market. Additionally, he has experience in a privately-held LTL company. Mr. Ward brings to the Board significant knowledge in the areas of transportation, corporate and marketing strategy, post-merger integration, restructuring and privatization, network operations, mergers and acquisitions and operations effectiveness.
PROPOSAL 1 – ELECTION OF DIRECTORS
SUSAN F. WARD
Director Since: 2019
Age:
Committee Membership: • Audit |
Qualifications:
Ms. Ward served as Vice President and Chief Accounting Officer of United Parcel Service, Inc., a multi-national shipping and supply chain management company, from 2015 until her retirement in 2019. Prior to her appointment as Chief Accounting Officer she served in various finance- andfinance-and accounting-related positions during her 27 years at UPS. Prior to UPS, Ms. Ward spent 10 years at Ernst & Young in Assurance Services. Ms. Ward brings years of industry experience as a senior financial executive of a multi-national transportation business, as well as public accounting and non-profit board experience. Ms. Ward qualifies as an “audit committee financial expert.”
Other Public Company Directorships
Current: Ms. Ward serves as an independent director and chair of the audit committee of Ecovyst Inc. and as an independent director, member of the risk management & compliance committee and chair of the audit & finance committee of Global Business Travel Group, Inc.
12 | SAIA, INC. |
CORPORATE GOVERNANCE
Corporate Governance Guidelines and Code of Business Conduct and Ethics
The Board has adopted Corporate Governance Guidelines establishing guidelines and standards with respect to Board governance and meetings, Board composition and diversity, selection and election of directors, director responsibility, director access to management and independent advisors and non-employee director compensation. The Nominating and Governance Committee of the Board regularly reviews and assesses corporate governance developments and recommends to the Board modifications to the Corporate Governance Guidelines as warranted.
The Company has adopted a Code of Business Conduct and Ethics applicablethat applies to all directors, officers and employees, including its principal executive officer, principal financial officer, and principal accounting officer. The Company’s Code of Business Conduct and Ethics, is filed as Exhibit 14.1 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014, and incorporated by reference into the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the Securities and Exchange Commission. Thewell as its Corporate Governance Guidelines, and the Code of Business Conduct and Ethics are posted at the “Investor Relations – Governance” page ofavailable on the Company’s website, (www.saia.com).www.saia.com/about-us/investor-relations/governance.
Director Independence
In February 2023,2024, the Board, with the assistance of the Nominating and Governance Committee, conducted an evaluation of director independence based on the rules and regulations of the Nasdaq Global Select Market (“Nasdaq”) and determined that each of Di-Ann Eisnor, Donna E. Epps, John P. Gainor, Jr., Kevin A. Henry, Donald R. James, Randolph W. Melville, Jeffrey C. Ward, and Susan F. Ward qualifies as an independent director under such rules and regulations. Mr. O’Dell, as a result of serving as Chief Executive Officer until April 2020, and Mr. Holzgrefe, as a result of his current service as President and Chief Executive Officer, are not independent.
Director Compensation
Our non-employee directors receive annual compensation as shown in the tables below for service on the Board. Director compensation is approved by the Board based on the recommendation of the Compensation and Human Capital Committee, except the Compensation and Human Capital Committee sets the number of shares of restricted stock to be issued to non-employee directors each year. In order toTo assist the Compensation and Human Capital Committee in its recommendation, the Committee’s executive compensation consultant conducts an annual review of Saia’s non-employee director compensation program to assess the competitiveness of the compensation program for non-employee directors and advises the Committee of recent market trends as to director compensation. As part of the review, the consultant analyzes Saia’s non-employee director compensation relative to a composite of peer group data and relevant cross-industry survey data. Based in part on the consultant’s study, the Compensation and Human Capital Committee annually makes a recommendation concerning non-employee director compensation for approval by the full Board.
The amounts payable to non-employee directors for 20222023 are indicated below:
Annual retainer of $65,000
Additional annual retainers for the following:
– | Chairman - $100,000 |
– | Lead Independent Director - $20,000 |
– | Audit Committee Chair - $15,000 |
– | Audit Committee Member - $10,000 |
– | Compensation and Human Capital Committee Chair - $15,000 |
– | Compensation and Human Capital Committee Member - $7,500 |
– | Nominating and Governance Committee Chair - $10,000 |
SAIA, INC. | 13 |
CORPORATE GOVERNANCE
|
– | Nominating and Governance Committee Member - $5,000 |
Grant of shares of restricted stock with a target value of $110,000
There are no separate fees paid for meeting attendance. If a director serves on more than one Committee, additional compensation is paid for each Committee. All non-employee directors are reimbursed for travel and other out-of-pocket incidental expenses related to meetings.
As a result of the assessment of non-employee director compensation by the Compensation and Human Capital Committee in December 2023, the Board has approved increases in the Chair retainer from $100,000 to $125,000, the Lead Independent Director retainer from $20,000 to $30,000, and the retainer for Nominating and Governance Committee members from $5,000 to $7,500. These increases will be effective immediately after the annual meeting of stockholders in April 2024. In addition, the Compensation and Human Capital Committee has approved an increase in the target value of stock to be issued to non-employee directors from $110,000 to $160,000, effective in May 2024. These are the first increases in non-employee director compensation since 2020. These future compensation increases are intended to align Saia’s non-employee director compensation with the market median.
The 2018 Omnibus Incentive Plan governedgoverns grants of restricted stock to non-employee directors in 2022 and will continue to do so in 2023.directors. Under the 2018 Omnibus Incentive Plan, each non-employee director has the option to receive up to 100% of his or her annual Board and Committee retainers in shares of common stock in lieu of cash, with the value of the shares to be computed by reference to the fair market value of Saia’s common stock on the date of grant.
Under the 2018 Omnibus Incentive Plan, the Compensation and Human Capital Committee is to approve an annual grant of restricted stock to each non-employee director, with the value on the grant date not to exceed $500,000. The shares of restricted stock are issued on May 1st each year, or the first business day after May 1st each year. For 2022,2023, each non-employee director serving as of May 2, 2022,1, 2023, received 396379 shares of restricted stock. This number was determined by the Compensation and Human Capital Committee based on its decision to award non-employee directors restricted stock with a value of $110,000 using the closing stock price on February 7, 2022,8, 2023, which was the date of the Committee’s decision.
For 2023,2024, shares of restricted stock will be issued to non-employee directors under the 2018 Omnibus Incentive Plan. On February 8, 2023, theThe Compensation and Human Capital Committee approved a grant of 379301 shares of restricted stock to each non-employee director based on its decision to award restricted stock with a value of $110,000$160,000 using the closing stock price on that date.February 6, 2024. These shares of restricted stock are to be issued on May 1, 2023.2024.
The restricted stock issued in 20222023 is subject to a one-year cliff vesting restriction and the shares of restricted stock to be issued in 2023May 2024 will also be subject to a one-year cliff vesting restriction. In each case, any unvested shares will become fully vested upon cessation of the director’s service on the Board (other than for cause) or upon a change in control of the Company.
Under the Director’s Deferred Fee Plan, non-employee directors may defer all or a portion of annual fees earned. The deferrals are converted into phantom stock units equivalent to the value of Company common stock. Upon the director’s termination, death or disability, accumulated deferrals are distributed in the form of Company common stock in accordance with elections made by the directors. The following non-employee directors held phantom stock units under the Director’s Deferred Fee Plan as of December 31, 2022,2023, for the following number of shares: Ms. Epps 548; Mr. Gainor 16,595;17,215; Mr. Henry 1,227;1,890; Mr. Melville 21,518;22,284; Mr. Ward 55,39256,072 and Ms. Ward 2,104.
Directors who are Company employees do not receive any additional compensation for their service as directors. Mr. Holzgrefe, as an employee of Saia, did not receive any compensation for his service as a director in 2022.2023.
14 | SAIA, INC. |
CORPORATE GOVERNANCE
The following table sets forth all compensation earned by the Company’s non-employee directors for service as a director for the year ended December 31, 2022.2023. Mr. Holzgrefe’s compensation is shown in the “Summary Compensation Table” herein.
DIRECTOR COMPENSATION
Name | Fees Earned or Paid in Cash ($)(1)(2) | Stock Awards ($)(3) | Total ($) | Fees Earned or Paid in Cash ($)(1)(2) | Stock Awards ($)(3) | Total ($) | ||||||||||||||||||
Di-Ann Eisnor | — | 155,205 | 155,205 | — | 182,635 | 182,635 | ||||||||||||||||||
Donna E. Epps | 80,000 | 82,720 | 162,720 | 80,000 | 110,221 | 190,221 | ||||||||||||||||||
John P. Gainor, Jr. | — | 172,752 | 172,752 | — | 180,308 | 180,308 | ||||||||||||||||||
Kevin A. Henry | — | 155,205 | 155,205 | — | 192,814 | 192,814 | ||||||||||||||||||
Donald R. James | 75,000 | 82,720 | 157,720 | 75,000 | 110,221 | 185,221 | ||||||||||||||||||
Randolph W. Melville | — | 195,312 | 195,312 | — | 222,768 | 222,768 | ||||||||||||||||||
Richard D. O’Dell | 165,000 | 82,720 | 247,720 | 165,000 | 110,221 | 275,221 | ||||||||||||||||||
Jeffrey C. Ward | — | 160,219 | 160,219 | — | 197,758 | 197,758 | ||||||||||||||||||
Susan F. Ward | 90,000 | 82,720 | 172,720 | 90,000 | 110,221 | 200,221 |
(1) | Amounts represent cash payments in |
(2) | Amount of cash fees deferred under the Director’s Deferred Fee Plan with phantom stock units in |
(3) | This column represents the dollar amount of |
Saia provides customary liability insurance for its directors and officers. The annual cost of this coverage for 20222023 was $1.0$0.9 million.
Director Stock Ownership Guidelines
In order to align non-employee directors’ interests with those of the Company and its stockholders, the Board has approved stock ownership guidelines for the Company’s non-employee directors. Under the guidelines, non-employee directors have three years from the date they joined the Board to acquire shares of the Company’s common stock valued at five times the then-current annual retainer for non-employee directors. Units held in the Company’s Director’s Deferred Fee Plan are included as units of stock for the purposes of the guidelines. Under Company policy, non-employeedirectors are precluded from selling shares earned as a director until the director is in compliance with the stock ownership guidelines. All of our non-employeedirectors have met or are on track to meet their objectives within the three-year time requirement.
Majority Voting Standard for Director Elections
The election of directors at the 20232024 annual meeting of stockholders is an uncontested election under the Company’s Bylaws. Because this is an uncontested election, a nominee for director is elected to the Board if the votes cast for such nominee’s election exceed the votes cast against such nominee’s election. Abstentions will not affect the election of directors. In tabulating the voting results for the election of directors, only “FOR” and “AGAINST” votes are counted. If an incumbent director fails to receive a majority of the vote for re-election in an uncontested election, the Nominating and Governance Committee of the Board will act on an expedited basis to determine whether to accept the director’s previously tendered irrevocable resignation and will submit such recommendation for prompt consideration by the Board. In considering whether to accept or reject the tendered resignation, the Nominating and Governance Committee and the Board will consider any factors they deem relevant. Any director who fails to receive a majority of the vote for re-election will not participate in the Nominating and Governance Committee recommendation or Board decision whether to accept the tendered resignation.
SAIA, INC. | 15 |
CORPORATE GOVERNANCE
Election to the Company’s Board of Directors in a contested election is by a plurality of the votes cast at any meeting of stockholders having a quorum. An election will be considered contested if (i) the Secretary of the Company receives a notice that a stockholder has nominated a person for election to the Board of Directors in compliance with the advance notice requirements for stockholder nominees for director set forth in the Company’s Bylaws and (ii) such nomination has not been withdrawn by such stockholder on or before the 10th day before the Company first mails its notice of meeting for such meeting to the stockholders. If directors are to be elected by a plurality of the votes cast, stockholders are not permitted to vote against a nominee.
Board Meetings, Committees of the Board and Board Leadership Structure
Attendance at Board and Committee Meetings; Executive Sessions
The Board of Directors held sevenfive meetings in 2022.2023. Each director attended at least 75% of the meetings convened by the Board and the applicable Committees during such director’s service on the Board during 2022.2023.
Executive sessions of non-employee directors and executive sessions of independent directors are held as part of each regularly scheduled meeting of the Board. The sessions of the independent directors are chaired by the Lead Independent Director.
Annual Evaluation Process of the Board and Committees
With oversight by the Nominating and Governance Committee, the Board of Directors and each of its Committees conducts annual performance evaluations that are intended to determine whether the Board and its Committees are functioning effectively and to provide the directors the opportunity to reflect upon and improve processes and effectiveness. The evaluation is conducted through the completion by each director of a questionnaire assessing the performance of the Board and each Committee of which the director is a member. Each Committee and the full Board reviews and discusses the results of the Committee and Board evaluations. The goal is to use the results of the assessment process to enhance the functioning of the Board and the Committees as well as the ability ofand assist the Board and Committees to carry out their oversight functions.
Director Orientation and Continuing Education
The Company conducts an orientation program for each new director that includes, among other things, a review of the Company’s business strategy and operations, technology, financial condition, legal and regulatory framework and other relevant topics. The Company also provides continuing education opportunities and programs for current directors. These programs include presentation by outside subject matter experts, participation in governance and industry seminars and visits to Company facilities.
Board Leadership Structure
Saia’s Board structure provides for a Chief Executive Officer separate from the Chairman of the Board. The Board believes maintaining separate roles allows the Chairman to devote his time and attention to matters of Board oversight and governance and allows the Chief Executive Officer to focus his time and energy managing the business.
The Board of Directors designates a director to serve as Chairman of the Board and selected Richard D. O’Dell to serve as Chairman. The primary responsibilities of the Chairman are to:
Preside at all meetings of the Board and provide leadership in Board deliberations;
Preside at all stockholder meetings;
Prepare, in collaboration with the Chief Executive Officer and Lead Independent Director, Board meeting schedules and agendas;
Provide support and advice to the Chief Executive Officer;
• | Participate in the identification and recruitment of potential non-employee directors; |
Support the Chief Executive Officer in serving as an ambassador for the Company with stockholders, customers and industry groups;
With the Lead Independent Director, provide input concerning the performance of the Chief Executive Officer and participate in discussions with the Chief Executive Officer concerning performance; and
16 | SAIA, INC. |
CORPORATE GOVERNANCE
Participate in planning for Chief Executive Officer succession.
Because the Chairman is not independent under Nasdaq rules and regulations, the Board also utilizes a Lead Independent Director, who is selected by the independent directors. The independent directors elected Randolph W. Melville as Lead Independent Director for 2022.2023. The primary responsibilities of the Lead Independent Director are to:
Prepare, in collaboration with the Chief Executive Officer and Chairman, Board meeting schedules and agendas;
• | Advise the Chairman as to the quality, quantity and timeliness of the flow of information to the non-employee directors; |
Chair all meetings of the Board at which the Chairman is not present;
Coordinate, develop the agenda for, chair and moderate meetings of independent directors, and generally act as principal liaison between the independent directors and the Chairman;
With the Chairman, provide input concerning the performance of the Chief Executive Officer and participate in discussions with the Chief Executive Officer concerning performance; and
Provide input to the Nominating and Governance Committee regarding the appointment of chairs and members of the various Committees.
In addition, the Lead Independent Director has the authority to call meetings of independent directors. If requested by major stockholders, the Lead Independent Director will make himself reasonably available for direct communication.
Board’s Role in Corporate Strategy
The Board is actively involved in overseeing, reviewing and guiding the Company’s corporate strategy. The Board formally reviews the Company’s business strategy, including the risks and opportunities facing the Company and its business, at an annual strategic planning session. In addition, long-range strategic issues are discussed as a matter of course at regular Board meetings. The Board regularly discusses corporate strategy throughout the year with management formally as well as informally and during executive sessions of the Board as appropriate. As discussed in “Board’s Role in Risk Management Process” below, the Board views risk management and oversight as an integral part of the strategic planning process, and provides oversight of management’s process to identify, manage and mitigate risks inherent in the Company’s strategic plans.
Board’s Role in Risk Management Process
The Company’s senior management has the responsibility to develop and implement the Company’s strategic plans and to identify, evaluate, manage, and mitigate the risks inherent in those plans. It is the responsibility of the Board to oversee the development and execution of the Company’s strategic plans and to understand the associated risks and the steps that senior management is taking to manage and mitigate those risks. As part of its risk management oversight, the full Board, based on input from management and the Nominating and Governance Committee, conducts reviews throughout the year to assess the Company’s strategy and risk management, including a review of specific risks, ranking of the likelihood and significance of those risks, and a review of mitigation plans. The Board also periodically receives briefings from outside experts on key risks facing the Company and has full access to management, as well as the ability to engage independent advisors.
The Board executes its oversight responsibility both through active review and discussion of key risks facing the Company and by delegating certain oversight responsibilities to the Board Committees, each of which reports regularly to the full Board. The full Board has retained responsibility for oversight of strategic risks as well as risks not otherwise delegated to one of the Committees, including cybersecurity sustainability and climate change risks,safety, in order to keep the full Board directly apprised of these matters and to utilize the expertise of the full Board.
SAIA, INC. | 17 |
CORPORATE GOVERNANCE
The following is a summary of the general risk oversight functions of the Committees:
COMMITTEE RISK OVERSIGHT
Audit Committee | Nominating and Governance Committee | Compensation and Human Capital | ||||||||
The Audit Committee oversees Company risks relating to accounting and financial reporting, and
To satisfy these responsibilities, the Committee meets regularly with the Company’s Chief Financial Officer,
The Committee receives regular reports relating to issues such as the status and findings of audits being conducted by the internal and independent auditors, the status of material litigation and other contingent liabilities, and changes in accounting requirements or practices that could affect the content or presentation of the Company’s financial statements.
The Committee is also responsible for reviewing any “hot-line” or other reports concerning accounting, internal controls or auditing matters. | The Nominating and Governance Committee oversees risks relating to board leadership and effectiveness, and corporate governance matters. The Committee also oversees the overall enterprise risk management
To assist the Committee in discharging its responsibilities, it | The Compensation and Human Capital Committee oversees risks relating to the Company’s compensation and benefits programs and reviews annually policies and practices to determine whether they are reasonably likely to meet the Committee’s objectives for executive pay and to ensure that the Company’s compensation practices present no risk of a material adverse effect on the Company. The Committee also assists the Board in its oversight of the Company’s human capital management strategies and practices, which may include employee engagement, culture, recruitment and retention, development, training and talent management, employee wellness and safety, pay equity practices and such other functions as it shall deem relevant.
To assist it in satisfying these oversight responsibilities, the Committee has retained its own independent compensation consultant and meets regularly with management to |
Succession Planning
Succession planning and leadership development are key priorities for the Board and management. The Board regularly reviews the Company’s human capital related activities in support of the Company’s business strategy, which includes a discussion of the Company’s training and development programs, leadership bench and succession plans with a focus on key positions at the senior executive level and other critical roles. The Board also has regular and direct exposure to high potential leaders through formal Board and Committee presentations and informal events.
Board Committees
The Board of Directors has an Audit Committee, a Compensation and Human Capital Committee and a Nominating and Governance Committee, each of which is comprised entirely of independent directors. Current Committee memberships are as follows:
Audit Committee | Compensation and Human Capital Committee | Nominating and Governance Committee | ||||||||||||||||
Susan F. Ward, Chair Donna E. Epps
Donald R. James | Randolph W. Melville, Chair Di-Ann Eisnor Kevin A. Henry Jeffrey C. Ward |
Donna E. Epps John P. Gainor, Jr. Randolph W. Melville
|
18 | SAIA, INC. |
CORPORATE GOVERNANCE
Each of the Committees acts pursuant to a written charter adopted by the Board. A copy of each Committee charter is posted at the “Investor Relations – Governance” page ofavailable on the Company’s website, (www.saia.com).www.saia.com/about-us/investor-relations/governance.
Audit Committee
The Audit Committee has been established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “Securities Exchange Act of 1934”). The Audit Committee held five meetings in 2022.2023. The functions of the Audit Committee are described in the Audit Committee Charter and include, among others, the following:
Review the adequacy and quality of Saia’s accounting and internal control systems;
Review Saia’s financial reporting process on behalf of the Board of Directors;
Oversee the entire audit function, both internal and independent, including the selection and compensation of the independent registered public accounting firm;
Review the Company’s major financial reporting exposures concerning risk assessment and management and the steps management has taken to monitor and control such exposures;
Review the Company’s legal and regulatory compliance; and
Provide an effective communication link between the auditors (internal and independent) and the Board of Directors.
The Board of Directors has determined that Ms. Ward and Ms. Epps and Mr. Gainor are “audit committee financial experts,” as defined by applicable rules of the Securities and Exchange Commission, and all members of the Audit Committee have accounting and related financial expertise and are independent in accordance with Nasdaq rules.Commission.
Compensation and Human Capital Committee
The Compensation and Human Capital Committee held fiveseven meetings in 2022.2023. The functions of the Compensation and Human Capital Committee are described in the Compensation and Human Capital Committee Charter and include, among others, the following:
Determine the salaries, bonuses and other remuneration and terms and conditions of employment of the Named Executive Officers of Saia, except as to the Chief Executive Officer, the Committee makes a recommendation as to compensation, which is then finally determined by the Board;
Supervise the administration of Saia’s incentive compensation and equity-based compensation plans and approve grants under those plans;
• | Establish Saia’s executive officer compensation policies and recommend to the Board the compensation of non-employee directors; and |
Assist the Board in its oversight of the Company’s human capital management strategies and practices.
Each member of the Compensation and Human Capital Committee qualifies as (i) an independent director under applicable Nasdaq rules and Rule 10C-1 of the Securities Exchange Act of 1934; and (ii) a “non-employee director” for purposes of Rule 16b-3 of the Securities Exchange Act of 1934.
The Compensation and Human Capital Committee has retained Mercer US LLC as its executive compensation consultant to provide information, analysis and recommendations regarding executive and director compensation. Mercer reports directly to the Compensation and Human Capital Committee and takes direction from the Committee. The Committee periodically meets with the Mercer consultant outside the presence of management to discuss executive compensation philosophy and specific levels of compensation and to ensure that Mercer receives from management the information required to perform its duties on a timely basis. The Compensation and Human Capital Committee formally evaluates the performance of Mercer on an annual basis and may terminate the services of Mercer at any time.
For 2022,2023, the Company paid Mercer $0.1$0.2 million for executive and director compensation services rendered to the Compensation and Human Capital Committee. Mercer is a wholly-owned subsidiary of Marsh & McLennan Companies, Inc. (“MMC”).
CORPORATE GOVERNANCE
Since 2010, including during 2022,2023, the Company has used Marsh USA, Inc., an affiliate of MMC, to provide insurance brokerage services, based on a determination made by management of the expertise of Marsh USA, Inc. in providing insurance brokerage services for the transportation industry. The Company paid Marsh USA, Inc. approximately $3.2$1.9 million in fees in 20222023 for such insurance brokerage services (this amount does not include insurance premiums that are paid through Marsh USA, Inc. to insurance carriers on behalf of Saia).
2024 Proxy Statement | SAIA, INC. | 19 |
CORPORATE GOVERNANCE
In connection with the Compensation and Human Capital Committee’s consideration of the independence of Mercer, the Committee confirmed with Mercer that:
The Mercer consultant receives no incentive or other compensation based on the fees charged to the Company for other services provided by Mercer or any of its affiliates;
The Mercer consultant is not responsible for selling other Mercer or affiliate services to the Company;
Mercer’s professional standards prohibit the individual consultant from considering any other relationships Mercer or any of its affiliates may have with the Company in rendering their advice and recommendations;
The Mercer consultant has no business or personal relationships with any members of Saia management or the Board other than providing executive compensation consulting; and
The Mercer consultant and his immediate family members own no shares of Saia’s common stock.
In its evaluation of the relationship with Mercer, the Compensation and Human Capital Committee also reviewed the protocols used by the Committee in its dealings with Mercer which include:
The Committee has sole authority to retain and terminate Mercer at any time;
The Mercer consultant has direct access to the Committee without management intervention;
The Committee has in place a process to formally evaluate the quality and objectivity of the services provided by Mercer each year and determine whether to continue to retain Mercer;
The Committee has in place rules for the engagement which limit how the individual Mercer consultant may interact with management; and
The Committee periodically meets with the Mercer consultant outside the presence of management to discuss executive compensation philosophy and specific levels of compensation and ensure that Mercer receives from management the information required to perform its duties in a timely manner.
Following this assessment of the relationship of Mercer and its affiliates with the Company, the Compensation and Human Capital Committee concluded that Mercer’s work for the Committee does not raise any conflict of interest and that Mercer qualified as independent.
Nominating and Governance Committee
The Nominating and Governance Committee held one meetingthree meetings in 2022.2023. The functions of the Nominating and Governance Committee are described in the Nominating and Governance Committee Charter and include, among others, the following:
Review the size and composition of the Board and make recommendations to the Board as appropriate;
Advise and make recommendations to the Board on corporate governance matters;
Review criteria for election to the Board and recommend candidates for Board membership. In identifying candidates for the Board, the Committee is to search for highly qualified women and individuals from minority groups to include in the pool from which directors are chosen;
Review the structure and composition of Board committees and make recommendations to the Board as appropriate;
Develop and oversee an annual self-evaluation process for the Board and its committees;
Review the Company’s major enterprise risk assessment and management processes, for matters other than financial reportingincluding sustainability and climate change risks but excluding risk matters;elements retained by the full Board or designated to a Board committee;
CORPORATE GOVERNANCE
Provide oversight of corporate ethics issues and at least annually assess the adequacy of the Company’s Code of Business Conduct and Ethics; and
Provide oversight on management succession issues.
20 | SAIA, INC. | 2024 Proxy Statement |
CORPORATE GOVERNANCE
Each member of the Nominating and Governance Committee meets the definition of an independent director under applicable Nasdaq rules.
Corporate Responsibility at Saia
We are committed to being a good corporate citizen, and we embrace our responsibility to the environment, our employees and the communities we serve. Our management is focused on developing and implementing strategies and initiatives that address each of these areas and the Board provides direct oversight of management’s execution of those strategies and initiatives.
Environmental Initiatives
We seek to meet or exceed environmental standards in all areas where we operate. We are focused on improving energy efficiency and lowering our greenhouse gas emissions through maintaining and continuously investing in our tractor and trailer fleet and improving our freight terminals.
Since 2016, we have improved our fleet miles per gallon through significant investments in new, more energy-efficient tractors and trailers.
• | We continued to maintain high marks in the EPA’s SmartWay Carrier Performance Rankings for LTL carriers for carbon dioxide, nitrogen oxide and particulate matter emissions per ton-mile. |
• | Trailer skirts and more fuel efficient tires are installed and maintained on all of our 53-foot and 28-foot trailers. |
Engine idling has been reduced through an automatic engine shutoff system.
Our drivers and dock workers are trained on the proper handling of hazardous materials to prevent incidents, and we have implemented programs to quickly address environmental incidents in the event that they occur.
LED lighting has been installed in our new terminals and we have replaced older lighting with LED lights in approximately half of our terminals.
We have conductedbeen conducting pilot programs usinginvolving the use of alternative fuel vehicles since 2021,fuels for our operations, including bothtesting of tractors powered by compressed natural gas and battery electric vehicle technologies,electricity since 2021 and plan to continue those investments in 2023.2024.
We are exploring additional technologies that will further reduce our carbon footprint, such as hydrogen fuel cell and solar.
Social Responsibility
The success of Saia is fundamentally connected to the well-being of our people. We strive to attract, engage, develop and retain employees who feel valued and included, have opportunities to grow and who are driven to succeed. Saia’s human capital management strategies and initiatives are overseen at the Board level by the Compensation and Human Capital Committee.
Safety. Our highest priority is the safety of our employees and the communities we serve. We have invested in the latest safety technologies and we provide our employees with extensive safety training. Saia has repeatedly been recognized by the American Trucking Associations’ Safety Council for our outstanding safety record.
• | As part of our ongoing replacement and growth of the tractor fleet, we are adding the latest accident avoidance technology in our new over-the-road tractors, including active braking assistance, adaptive cruise control, lane departure warning systems and roll stability control. |
Our tractor fleet is equipped with extensive safety technology, including video recording systems which enable managers to provide coaching and feedback to drivers throughout the year.
We have moreMore than 300 of our drivers also serve as driver trainers whoto assist in providing all new drivers with over 40 hours of training. We annually train drivers in defensive driving processes with emphasis on special operations in addition to weekly safety training through various mediums, including videos and group and individual presentations on a broad range of safety topics.
SAIA, INC. | 21 |
CORPORATE GOVERNANCE
Employee Development and Training. We place a premium on finding and developing the right people and we invest significant effort and resources on developing and training our employees.
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• | Our new dockworkers receive on-boarding training that is supplemented with on-going safety and job training. |
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We offer a “Driver Academy” program that provides our employees who desire the opportunity to earn their commercial driver certifications to further their careers.
New customer service representatives receive 20 days of training.
• | We provide on-going sales and management training programs. |
We continue to develop our succession planning process.
Workplace Culture. Creating and maintaining a strong and positive employee culture is critical to our success. We pride ourselves on the fair treatment of our employees and strive to have a high level of employee satisfaction and productivity. Saia is committed to fostering adeveloping talent and prioritizing employee well-being. We continuously evaluate and work environment thatto improve the employee experience by taking our people, our core values and promotes diversity and inclusion.the diverse needs of customers into account.
We provide a competitive compensationIn addition to comprehensive health/vision/dental coverage, we offer financial wellness programs, including 401(k) plans, employee assistance programs, and benefits package toscholarships for our employees including an industry-leading medical insurance program.and their families.
We have establishedincreased our efforts in the area of employee engagement through comprehensive training, the creation of a Diversity Council that focusessteering committee focused on promotingdiversity and employee engagement and by establishing company-sponsored Employee Resource Groups, which we call employee networks. Our first employee network, Saia Women, was launched, with the objectives of enhancing personal and career development, building social and professional connections and creating a culture where individual differences are respected and all employees are valued for the skills and contributions they bring to the Company.sense of community.
Our voluntary wellness program promotes healthier lifestyles through proactive evaluation and management of major health and wellness indicators.
We have an extensive employee communications program, which starts with an employee’s manager and is supplemented through a monthly employee magazine, quarterly reports on performance by senior executives and annual employee engagement surveys.
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We provide employee recognition and rewards programs that recognizes the special contributions of our employees and milestone anniversaries.
We have been named one of Women in Trucking’s “2022 Top“Top Companies for Women to Work For in Transportation” in 2022 and 2023 in recognition of the importance of women in the success of Saia and our appreciation of the unique experiences, skills, and knowledge women bring to their roles.
For more information about the Company’s Corporate Responsibility matters please visit the Company’s website at www.saia.com.
Stockholder Communications with the Board of Directors
Stockholders seeking to communicate with the Board of Directors should submit their written correspondence to the Secretary of the Company, Saia, Inc., 11465 Johns Creek Parkway, Suite 400, Johns Creek, Georgia 30097. The Secretary of the Company will forward all such communications (excluding routine advertisements and business solicitations and communications whichthat the Secretary of the Company, in his or her sole discretion, deems to be a security risk or for harassment purposes) to each member of the Board of Directors, or if applicable, to the individual director(s) named in the correspondence. Subject to the following, the Chairman of the Board and the Lead Independent Director will receive copies of all stockholder communications, including those addressed to individual directors. The Secretary will consider each communication to determine whether it should be forwarded promptly or compiled and sent with other communications and other Board materials in advance of the next scheduled Board meeting.
Stockholders also have an opportunity to communicate with the Board of Directors at the Company’s annual meeting of stockholders. The Company’s Corporate Governance Guidelines provide that absent unusual circumstances, directors are expected to attend all annual meetings of stockholders. All members of the Board of Directors attended the 20222023 annual meeting of stockholders.
22 | SAIA, INC. |
Stock Ownership
Directors and Executive Officers
The following table sets forth the amount of Saia’s common stock beneficially owned by each director and each executive officer named in the Summary Compensation Table on page 40 and all directors and executive officers as a group, as of January 15, 2023.2024. Unless otherwise indicated, beneficial ownership is direct and the person indicated has sole voting and investment power.
Common Stock Beneficially Owned | Amount and nature of beneficial ownership | |||||||||||||||||||||||||||||||||||||||
Name of Beneficial Owner | Shares Beneficially Owned(1) | Rights to Acquire Beneficial Ownership(2) | Total | Percent of Class(3) | Shares Held Under Deferral Plans(4) | Shares Beneficially Owned(1) | Rights to Acquire Beneficial Ownership(2) | Total | Percent of Class(3) | Shares Held Under Deferral Plans(4) | ||||||||||||||||||||||||||||||
Di-Ann Eisnor | 5,835 | — | 5,835 | * | — | 5,071 | — | 5,071 | * | — | ||||||||||||||||||||||||||||||
Donna E. Epps | 2,014 | — | 2,014 | * | 548 | 1,983 | — | 1,983 | * | 548 | ||||||||||||||||||||||||||||||
John P. Gainor, Jr. | 400 | — | 400 | * | 16,595 | 400 | — | 400 | * | 17,215 | ||||||||||||||||||||||||||||||
Kevin A. Henry | — | — | — | * | 1,227 | — | — | — | * | 1,890 | ||||||||||||||||||||||||||||||
Frederick J. Holzgrefe, III | 7,383 | 21,282 | 28,665 | * | 6,566 | 3,573 | 18,248 | 21,821 | * | 7,435 | ||||||||||||||||||||||||||||||
Donald R. James | 690 | — | 690 | * | — | 1,069 | — | 1,069 | * | — | ||||||||||||||||||||||||||||||
Randolph W. Melville | — | — | — | * | 21,518 | — | — | — | * | 22,284 | ||||||||||||||||||||||||||||||
Richard D. O’Dell | 8,110 | 42,008 | 50,118 | * | — | 5,989 | 10,000 | 15,989 | * | — | ||||||||||||||||||||||||||||||
Jeffrey C. Ward | 7,079 | — | 7,079 | * | 55,392 | 7,079 | — | 7,079 | * | 56,072 | ||||||||||||||||||||||||||||||
Susan F. Ward | 396 | — | 396 | * | 2,104 | 379 | — | 379 | * | 2,104 | ||||||||||||||||||||||||||||||
Douglas L. Col | — | 7,367 | 7,367 | * | 3,836 | — | 5,307 | 5,307 | * | 3,836 | ||||||||||||||||||||||||||||||
Raymond R. Ramu | 22 | 13,399 | 13,421 | * | 8,488 | 22 | 6,160 | 6,182 | * | 8,488 | ||||||||||||||||||||||||||||||
Patrick D. Sugar | 2,089 | 4,592 | 6,681 | * | 381 | 2,412 | 3,841 | 6,253 | * | 381 | ||||||||||||||||||||||||||||||
Anthony R. Norwood | — | 176 | 176 | * | — | |||||||||||||||||||||||||||||||||||
Rohit Lal | 5,952 | 4,277 | 10,229 | * | 7,846 | |||||||||||||||||||||||||||||||||||
All directors and executive officers as a group (15 persons)(5) | 38,255 | 96,675 | 134,930 | 0.5 | % | 124,501 | 33,929 | 48,349 | 82,278 | 0.3 | % | 128,099 |
* | Denotes less than 1% |
(1) | Includes common stock owned directly and indirectly. |
(2) | Number of shares that can be acquired on January 15, |
(3) | Based on the number of shares outstanding on January 15, |
(4) | Represents shares of common stock from phantom stock units on an as converted basis as of January 15, |
(5) | Includes one executive officer |
SAIA, INC. | 23 |
Compensation Discussion and Analysis
This Compensation Discussion and Analysis describes our executive compensation philosophy and programs, the decisions the Compensation and Human Capital Committee has made under those programs and the factors considered in making those decisions. This Compensation Discussion and Analysis focuses on the compensation of our Named Executive Officers for 2022,2023, who were:
Frederick J. Holzgrefe, III, President & Chief Executive Officer
Douglas L. Col, Executive Vice President & Chief Financial Officer
Raymond R. Ramu, Executive Vice President & Chief Customer Officer
Patrick D. Sugar, Executive Vice President Operations
Anthony R. Norwood,Rohit Lal, Executive Vice President & Chief Human ResourcesInformation Officer
Executive Summary
The following provides an overview of our compensation philosophy and programs, including the focus on pay for performance, best practice pay programs and alignment of the interests of Saia’s executives with those of Saia’s stockholders. Details about the compensation awarded to Saia’s Named Executive Officers can be found in the Summary Compensation Table and related compensation tables in this proxy statement.
• | Saia relates pay to performance to incent executives to achieve corporate objectives. |
The Company’s executive compensation program is designed to link pay with performance by requiring that a significant portion of each executive’s target compensation is at risk and is earned based on achieving corporate financial and operating targets, total stockholder return and stock price appreciation.
• | Saia aligns executives’ interests with those of our stockholders. |
All significant elements of long-term compensation are paid through equity awards in the form of performance stock units and restricted stock and for 2022 and prior years, stock options.stock. The Company maintains stock ownership guidelines for the executive officers to further align the interests of our executive officers with our stockholders.
• | Saia annually assesses its executive compensation programs. |
The Compensation and Human Capital Committee designs the Company’s executive compensation program to attract, motivate, reward and facilitate the retention of executive talent to achieve corporate objectives. The program is comprised of base salary, cash-based annual incentive awards, equity-based long-term incentive awards, customary benefits and perquisites and severance benefits. Elements of the program are generally designed to provide target compensation opportunity around the 50th percentile of the peer group, but can be higher or lower based on individual performance, tenure, additional responsibility and for executive retention and succession planning purposes. The Committee works with Mercer, US LLC, its executive compensation consultant, each year to assess our program against our transportation industry peers and general industry.
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In accordance with the recommendations of our stockholders, Saia holds a stockholder advisory “say-on-pay” vote on an annual basis. In 2022,2023, holders of 94.7%95.8% of Saia’s stock voting on the matter approved, on an advisory basis, the compensation paid to Saia’s Named Executive Officers as described in the 20222023 proxy statement. The Compensation and Human Capital Committee believes that this vote demonstrates strong support by our stockholders of our compensation philosophy and goals and the compensation decisions made by the Committee. Based on these favorable results, the Compensation and Human Capital Committee was encouraged to continue its practices in determining executive compensation.
24 | SAIA, INC. |
COMPENSATION DISCUSSION AND ANALYSIS
Key Features of Saia’s Executive Compensation Program
What Saia Does | What Saia Doesn’t Do | |
✓ Links a significant portion of pay to Company performance | û No “single-trigger” change-of-control cash payments | |
✓ Encourages stock ownership by using stock ownership guidelines for all officers at two to five times their base salary | û No stock option repricing or option grants below market value | |
✓ Mitigates risk taking by emphasizing long-term equity incentives and placing caps on potential payments | û No hedging transactions, pledges or margin accounts with respect to Company stock | |
✓ Assesses executive compensation against a representative and relevant peer group to assist in setting compensation | û No excessive perquisites | |
✓ Maintains | û No significant Company cash payments upon death or disability | |
✓ | û No tax gross-up provisions |
Financial and Operating Performance
The following graphs highlight Saia’s financial and operating performance for fiscal years 2020-2022:
2021-2023:
(1) | Operating ratio is the calculation of operating expenses divided by operating revenue. |
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Executive Compensation Oversight
Role of Compensation and Human Capital Committee
Saia’s executive compensation program is designed and administered by the Compensation and Human Capital Committee, which is made up entirely of independent directors. The Compensation and Human Capital Committee, with the assistance of Mercer, its independent compensation consultant, annually reviews the Company’s compensation philosophy, the overall design of the compensation program and the elements of each component of compensation. In making decisions about compensation for the Named Executive Officers, as described in the compensation tables in this proxy statement, the Compensation and Human Capital Committee takes the following factors into consideration, among others, although none of these factors is determinative individually:
The competitive environment for recruiting and retaining senior executives, including compensation trends, best practices, and executive compensation paid by our industry peers;
SAIA, INC. | 25 |
COMPENSATION DISCUSSION AND ANALYSIS
The individual’s performance, experience and future advancement potential;
The Company’s past financial and operating performance, as well as the strategic plan for future periods;
The current economic conditions and the competitive market environment in which the Company operates;
The Company’s stock ownership and retention policies;
Each Named Executive Officer’s historical total compensation, including the value of all outstanding equity awards granted to the Named Executive Officer, and future compensation opportunities based on tally sheets;opportunities; and
Internal pay equity.
The Compensation and Human Capital Committee reviews and approves all elements of our executive compensation program, other than Mr. Holzgrefe’s compensation, which is approved by the Board, based on an assessment of his performance conducted by the Board and based on the recommendation of the Compensation and Human Capital Committee. Mr. Holzgrefe makes recommendations to the Compensation and Human Capital Committee as to elements of compensation for his direct reports and provides performance reviews to assist the Compensation and Human Capital Committee in setting executive compensation.
Role of Compensation Consultant
The Compensation and Human Capital Committee enters into a consulting agreement with its outside consultant on an annual basis. The Compensation and Human Capital Committee retained Mercer as its executive compensation consultant to provide information and analysis of executive compensation trends and practices and to make recommendations regarding executive and director compensation. Mercer reports directly to the Compensation and Human Capital Committee and takes direction from the Committee. The Committee periodically meets with the Mercer consultant outside the presence of management to discuss executive compensation philosophy and specific levels of compensation and to ensure that Mercer receives from management the information required to perform its duties on a timely basis. The Committee formally evaluates the performance of Mercer on an annual basis and may terminate the services of Mercer at any time.
Additional Information
Additional information about the structure and practices of the Compensation and Human Capital Committee and role of the compensation consultant is presented under the headings Corporate Governance – Board Meetings, Committees of the Board and Leadership Structure and Board Committees – Compensation and Human Capital Committee in this proxy statement.
Executive Compensation Philosophy
The Compensation and Human Capital Committee believes that the executive compensation program should link pay with performance and should attract, motivate, reward and facilitate the retention of the executive talent required to achieve corporate objectives and to create value for the Company’s stockholders. We seek to align the interests of our executives with those of our stockholders through an annual incentive plan based on annual operating income and operating ratio because we believe those metrics are important in determining our stock price, and through long-term equity incentives in the form of performance stock units and restricted stock and for 2022 and prior years, stock options.stock. Our compensation program has achieved strong support from our stockholders with over 94.7%95.8% of the shares voting on the matter at the 20222023 annual stockholders meeting having voted in favor of approval of the compensation of our Named Executive Officers, as disclosed in the 20222023 proxy statement.
26 | SAIA, INC. |
COMPENSATION DISCUSSION AND ANALYSIS
Executive Compensation Components
The specific components, key characteristics and objectives of Saia’s executive compensation program are:
Component | Key Characteristics | Objective | ||
Base Salary — Cash | Fixed compensation component. Reviewed annually and adjusted if and when appropriate. | Provide a fixed form of executive compensation for performing daily responsibilities. | ||
Annual Incentives — Cash | Variable compensation component. Performance-based award opportunity, payable upon attaining specific corporate annual operating income and operating ratio targets. | Motivate and reward executives for corporate achievement of specific annual performance objectives. | ||
Long-Term Incentives — Stock | Variable compensation component. Performance-based award opportunity, generally granted annually as a combination of performance stock units and restricted | Motivate and reward executives over a | ||
Other Benefits and Perquisites — Various Forms | Fixed compensation component. | Provide employee benefits consistent with those provided by our peers and for executive retention. | ||
Post-Employment Compensation — Cash and Benefits | Fixed compensation component. | Promote recruitment and retention and support non-competition, non-disclosure and non-solicitation agreements. |
Pay equity
To create stockholder value and motivate its employees, the Company is committed to internal and external pay equity. To assess internal pay equity, the Compensation and Human Capital Committee annually reviews the relationship between the compensation of the Chief Executive Officer to that of other Named Executive Officers and salaried employees generally. During the past three years, the Chief Executive Officer’s total direct compensation (salary and short- and long-term incentive awards) has been approximately 2.142.28 times the total direct compensation of the next highest paid Named Executive Officer, which the Committee believes is an appropriate multiple based on the additional responsibilities of the Chief Executive Officer. See also CEO Pay Ratio, elsewhere in this proxy statement. To test external pay equity, the Committee annually reviews compensation data for similar positions at peer group companies, described below, in the transportation industry with revenue levels comparable to Saia’s and data from general industry surveys.
Compensation Review Peer Group
To assist the Compensation and Human Capital Committee in determining the design, components and levels of compensation for the Company’s executive officers, the Committee annually reviews compensation data for similar positions at U.S. publicly-traded transportation companies with annual revenues of approximately one-half to three times Saia’s revenues. The Committee focuses on these transportation peers because it believes transportation companies with a scale comparable to Saia’s are our primary competitors for executive talent and provides a sound basis to assess Saia’s executive compensation.
SAIA, INC. | 27 |
COMPENSATION DISCUSSION AND ANALYSIS
The peer group used in 20212022 to assist in setting compensation for 20222023 was:
Company | Transportation Business | ||||||||
Landstar System, Inc. | Trucking | $ | |||||||
Knight-Swift Transportation Holdings Inc. | Trucking | $ | |||||||
Schneider National, Inc. | Trucking | $ | |||||||
Old Dominion Freight Line, Inc. | Trucking | $ | |||||||
Hub Group, Inc. | Air Freight & Logistics | $ | |||||||
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Some of the peer group companies have substantial stock ownership by executives. If the stock ownership amounts were disclosed by the peer group company to have a material impact on their executive compensation levels, the specific compensation element is excluded from the competitive data and associated analysis as decided by Mercer.
EXECUTIVE COMPENSATION DECISIONS FOR 2022
Pay Mix
The following graph sets forth the key components of compensation and pay mix for the Named Executive Officers based on target payout levels for 2022:
COMPENSATION DISCUSSION AND ANALYSIS
Base Salary
Saia provides market competitive base salaries to attract and retain outstanding talent and to provide a fixed component of pay for our Named Executive Officers for performing daily responsibilities. The Compensation Committee uses the median of the peer group companies as the general reference point for base salaries because it believes the median is the best representation of competitive base salary levels in the market for similar roles and talent. In setting base salary for an executive, the Compensation Committee adjusts the salary as it deems appropriate. Typical reasons for adjusting an individual officer’s base salary above or below the market median include tenure of the officer in the position, job performance, pay mix, internal pay equity, additional responsibilities of the officer, executive retention and succession planning.
Changes made to base salaries of the Named Executive Officers for 2022 were as follows:
Mr. Holzgrefe’s base salary was increased from $825,000 to $875,000 effective January 2022, based on Mr. Holzgrefe’s strong performance and to maintain his base compensation approximately at the median compensation paid to chief executive officers by peer group companies and in general industry.
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Mr. Ramu’s base salary was increased from $477,335 to $510,000 based on his execution and leadership in managing Saia’s commercial strategies.
Mr. Sugar’s base salary was increased from $385,000 to $425,016 based on Mr. Sugar’s leadership and management of the operations group during a period of significant operational challenges.
Mr. Norwood’s base salary was set at $365,000 upon his appointment as Executive Vice President & Chief Human Resources Officer in March 2022.
Annual Cash Incentives
Annual cash incentive awards are used to reward executives for achievement of corporate annual operating income and operating ratio targets for the year. The annual cash incentive awards provide for threshold, target and maximum payouts as a percentage of base salary for each executive. The Committee elected not to change the methodology used in the annual incentive plan for 2022.
The Compensation Committee uses the median of annual incentives of the peer group companies as the general reference point for target annual cash incentives because it believes the median is the best representation of competitive annual cash incentive levels in the market for similar roles and talent. In setting an individual officer’s target annual cash incentive level, the Compensation Committee has the discretion to adjust the target level as it deems appropriate. Typical reasons for adjusting an individual officer’s target annual incentive level above or below the market median include tenure of the officer in the position, job performance, additional responsibilities of the officer, internal pay equity, executive retention and succession planning. At the highest level of achievement, the annual cash incentive opportunity was 200% of the target in 2022. At a threshold level of performance, the incentive opportunity was 25% of the target in 2022, with no incentive earned if performance was below the threshold achievement level.
The Committee seeks to set the threshold, target and maximum performance goals at levels such that the relative likelihood that Saia will achieve such goals remains consistent from year to year. It is the intent of the Committee that the threshold goals should be attainable a majority of the time, target goals should, on average, be reasonably expected to be achieved and maximum goals should be attained a minority of the time. Establishing the expected performance goals relative to these criteria is inherently subject to considerable judgment on the part of the Committee.
The Committee did not change the annual cash incentive targets for the Named Executive Officers for 2022, except as follows:
Mr. Sugar’s target annual incentive was increased from 55% to 70% of base salary for 2022 based on his leadership and management of the operations group during a period of significant operational challenges.
COMPENSATION DISCUSSION AND ANALYSIS
Mr. Norwood’s target annual incentive was set at 50% of base salary following his appointment as Executive Vice President & Chief Human Resources Officer in March 2022.
For 2022 the potential payout levels under the annual incentive awards for the Named Executive Officers were as follows:
Potential Payouts of Annual Cash Incentives for 2022
Payout as a % of Base Salary | ||||||||||||||
Named Executive Officer | Title | Threshold | Target | Maximum | ||||||||||
Frederick J. Holzgrefe, III | President & Chief Executive Officer | 25 | % | 100 | % | 200 | % | |||||||
Douglas L. Col | Executive Vice President & Chief Financial Officer | 18 | % | 70 | % | 140 | % | |||||||
Raymond R. Ramu | Executive Vice President & Chief Customer Officer | 19 | % | 75 | % | 150 | % | |||||||
Patrick D. Sugar | Executive Vice President of Operations | 18 | % | 70 | % | 140 | % | |||||||
Anthony R. Norwood | Executive Vice President & Chief Human Resources Officer | 13 | % | 50 | % | 100 | % |
Performance Targets and Actual Performance for 2022
For 2022, the annual cash incentive awards for the Named Executive Officers were based 50% on achieving an annual operating income target and 50% on achieving an annual operating ratio target. The Compensation Committee believes using an operating income target rather than an earnings per share target more closely reflects actual performance of management for the year by eliminating the impact of changes to the effective tax rate. Saia uses operating ratio as a performance goal because it is an objective measure of profitability of Saia’s business, is a common measure of profitability within the industry and can have a direct impact on Saia’s stock price. Operating ratio is defined as operating expenses divided by operating revenue. Real estate gains and losses, one-time charges and integration charges are excluded from the calculation at the discretion of the Compensation Committee.
The operating income and operating ratio performance targets for 2022 were set by the Compensation Committee considering past performance, the strategic plan, current economic conditions and other forecasts of performance for the year. The performance targets and actual performance for 2022 were as follows:
Threshold | Target | Maximum | Actual | |||||||||||||
Operating income (in millions) (50% weighting) | $ | 379.0 | $ | 438.1 | $ | 517.0 | $ | 470.5 | ||||||||
Operating ratio (50% weighting)(1) | 85.9 | % | 83.6 | % | 80.7 | % | 83.1 | % |
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Based on operating income and operating ratio results for 2022, the final payout of the annual incentive plan was 131.7% of target for 2022. See the “2022 Grants of Plan-Based Awards Table” that follows the Summary Compensation Table for additional information about annual cash incentive awards granted to the Named Executive Officers for 2022.
Long-Term Equity Incentives
The Compensation Committee provides long-term equity awards to the executive officers to align the interests of the executives with the interests of our stockholders, reward executives for achieving stockholder valuation increases over a multi-year period, and encourage executive retention. The long-term equity awards are provided through performance stock units, restricted stock and for 2022 and prior years, stock options.
Long-term equity awards are typically granted in early February each year on the third trading day following the release of the Company’s financial results for the prior fiscal year. For new hires receiving equity grants, the grant date is typically on or around their hire date.
COMPENSATION DISCUSSION AND ANALYSIS
Long-Term Equity Incentive Plan Targets
The Committee grants long-term equity awards for each Named Executive Officer based on a target percentage of base salary. The Compensation Committee uses the median of long-term incentives of the peer group companies as the general reference point for target long-term equity awards because it believes the median is the best representation of competitive long-term equity incentive levels in the market for similar roles and talent. In setting target equity incentive levels for an executive, the Compensation Committee has discretion to adjust the target level as it deems appropriate. Typical reasons for adjusting an individual officer’s target equity incentive level above or below the market median include tenure of the officer in the position, job performance, additional responsibilities of the officer, internal pay equity, executive retention and succession planning.
Changes made to the long-term equity incentive targets as a percentage of base salary for the Named Executive Officers for 2022 were as follows:
Mr. Holzgrefe’s target long-term equity incentive was increased from 250% to 270% of base salary for 2022 based on his performance as Chief Executive Officer and to approximate median long-term incentives offered to chief executive officers of peer group companies and in general industry.
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Mr. Ramu’s target long-term equity incentive was increased from 140% to 175% of base salary for 2022 based on his execution and leadership in managing Saia’s commercial strategies.
Mr. Sugar’s target long-term equity incentive was increased from 100% to 140% of base salary for 2022 based on his leadership and management of the operations group during a period of significant operational challenges.
Mr. Norwood’s target long-term equity incentive was set at 70% of base salary for 2022 upon his appointment as Executive Vice President & Chief Human Resources Officer in March 2022.
For 2022 the target long-term equity incentives as a percentage of base salary for the Named Executive Officers were as follows:
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COMPENSATION DISCUSSION AND ANALYSIS
Components of Long-Term Equity Incentive Awards
For 2022, 50% of a Named Executive Officer’s long-term equity incentive opportunity was granted in performance stock units, 25% in stock options and 25% in restricted stock.
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The long-term equity incentive awards made to the Named Executive Officers in 2022 were as follows:
Performance Stock Units
For 2022, 50% of the Named Executive Officers’ long-term equity incentive opportunity was awarded in performance stock units, which are paid in shares of Saia stock. The role of performance stock units is to reward executives for long-term value creation relative to other transportation companies. The Compensation Committee believes that measuring Saia stock performance against that of a broad group of transportation companies over a multi-year period provides a key metric for assessing the long-term performance of Saia’s Named Executive Officers. Providing a significant portion of long-term compensation on this basis also aligns the interests of the Named Executive Officers with the interests of our stockholders and helps insure against executives taking excessive or unnecessary risks that might threaten the long-term value of the Company.
The number of shares of stock that are earned by a participant is based on the total stockholder return of Saia compared to the total stockholder return (assuming reinvestment of dividends) of the companies in the broader transportation group over a three-year performance period. At the end of the performance period, the percentile rank of the Company’s total stockholder return is calculated relative to the total stockholder return of each of the companies in the group. Because the performance period for each grant of performance stock units is three years, participants can have overlapping three-year award opportunities at any time.
Since the size of the companies is not critical in assessing relative total stockholder returns, the group used for comparison purposes for performance stock units (the “PSU Group”) is comprised of U.S. publicly-traded companies in the broader transportation industry, regardless of revenues. The Committee believes using performance of the PSU
COMPENSATION DISCUSSION AND ANALYSIS
Group provides a wider spectrum from which to assess management performance. The companies included in the PSU Group for open performance periods are as follows:
Air Transport Services Group, Inc.
ArcBest Corporation
Atlas Matson, Inc.
Werner Enterprises, Inc.
Kirby Corporation
U.S. Xpress Enterprises, Inc
Air WorldwideTransport Services Group, Inc.
Universal Logistics Holdings Inc.
CH Robinson Worldwide, Inc.
Covenant Transport, Inc.
Daseke, Inc.
Echo Global Logistics, Inc.
FedEx Corporation
Forward Air Corporation
Heartland Express, Inc.
Hub Group, Inc.
J.B. Hunt Transport Services, Inc.
Kansas City Southern (through December 27, 2021)
Kirby Corporation
Knight – Swift Transportation Holdings, Inc.
Landstar System, Inc.
Marten Transport, Ltd.
Norfolk Southern Corporation
Old Dominion Freight Line,Saia, Inc.
P.A.M. Transportation Services, Inc.
Some of the peer group companies have substantial stock ownership by executives. If the stock ownership amounts were disclosed by the peer group company to have a material impact on their executive compensation levels, the specific compensation element is excluded from the competitive data and associated analysis as decided by Mercer.
EXECUTIVE COMPENSATION DECISIONS FOR 2023
Pay Mix
The following graph sets forth the key components of compensation and pay mix for the Named Executive Officers based on target payout levels for 2023:
Roadrunner Transportation Services, Inc.
Rush Enterprises, Inc.
Ryder System, Inc.
Schneider National, Inc.
Union Pacific Corporation
United Parcel Service, Inc.
Universal Logistics Holdings, Inc.
US Xpress, Inc. (effective January 1, 2019)
USA Truck Inc.
Werner Enterprises, Inc.
XPO Logistics, Inc.
YRC Worldwide, Inc.
For the performance periods beginning in 2020, 2021 and 2022, the payouts of performance stock units are determined
28 | SAIA, INC. | 2024 Proxy Statement |
COMPENSATION DISCUSSION AND ANALYSIS
Base Salary
Saia provides market competitive base salaries to attract and retain outstanding talent and to provide a fixed component of pay for our Named Executive Officers for performing daily responsibilities. The Compensation and Human Capital Committee uses the median of the peer group companies as the general reference point for base salaries because it believes the median is the best representation of competitive base salary levels in the market for similar roles and talent. In setting base salary for an executive, the Compensation and Human Capital Committee adjusts the salary as it deems appropriate. Typical reasons for adjusting an individual officer’s base salary above or below the market median include tenure of the officer in the position, job performance, pay mix, internal pay equity, additional responsibilities of the officer, executive retention and succession planning.
Changes made to base salaries of the Named Executive Officers for 2023 were as follows:
Mr. Holzgrefe’s base salary was increased from $875,000 to $910,000 effective January 2023, consistent with across the board compensation increases generally paid by the Company and to approximate base compensation paid to chief executive officers of peer group companies and in general industry.
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Mr. Ramu’s base salary was increased from $510,000 to $570,960 based on his execution and leadership in managing Saia’s commercial strategies.
Mr. Sugar’s base salary was increased from $425,016 to $491,573 based on Mr. Sugar’s leadership and management of the operations group during a period of significant operational challenges and based on his additional tenure in the position.
Mr. Lal’s base salary was increased from $356,400 to $394,160 based on Mr. Lal’s strong performance as the leader of the Company’s information technology team and to maintain his base compensation at approximately the median compensation paid to chief information officers by peer group companies and in general industry.
Annual Cash Incentives
Annual cash incentive awards are used to reward executives for achievement of corporate annual operating income and operating ratio targets for the year. The annual cash incentive awards provide for threshold, target and maximum payouts as a percentage of base salary for each executive. The Committee elected not to change this methodology used in the annual incentive plan for 2023.
The Compensation and Human Capital Committee uses the median of annual incentives of the peer group companies as the general reference point for target annual cash incentives because it believes the median is the best representation of competitive annual cash incentive levels in the market for similar roles and talent. In setting an individual officer’s target annual cash incentive level, the Compensation and Human Capital Committee has the discretion to adjust the target level as it deems appropriate. Typical reasons for adjusting an individual officer’s target annual incentive level above or below the market median include tenure of the officer in the position, job performance, additional responsibilities of the officer, internal pay equity, executive retention and succession planning. At the highest level of achievement, the annual cash incentive opportunity was 200% of the target in 2023. At a threshold level of performance, the incentive opportunity was 25% of the target in 2023, with no incentive earned if performance was below the threshold achievement level.
The Committee seeks to set the threshold, target and maximum performance goals at levels such that the relative likelihood that Saia will achieve such goals remains consistent from year to year. It is the intent of the Committee that the threshold goals should be attainable a majority of the time, target goals should, on average, be reasonably expected to be achieved and maximum goals should be attained a minority of the time. Establishing the expected performance goals relative to these criteria is inherently subject to considerable judgment on the part of the Committee.
Changes made to annual cash incentives for the Named Executive Officers for 2023 were as follows:
Mr. Holzgrefe’s target annual incentive was increased from 100% to 110% of base salary for 2023 based on Mr. Holzgrefe’s strong performance in the position, to reflect his additional tenure and to maintain his annual incentive target approximately at the median of annual incentive compensation paid to chief executive officers by peer group companies and in general industry. | Incentive | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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In 2022, the Company granted performance stock units for 8,668 shares (at target) to the Named Executive Officers, representing 69% of the total target units granted at that time. See the “2022 Grants of Plan-Based Awards Table” that follows the Summary Compensation Table for additional information about performance stock units granted to the Named Executive Officers in 2022.
2024 Proxy Statement | SAIA, INC. | 29 | | |
COMPENSATION DISCUSSION AND ANALYSIS
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Mr. Ramu’s target annual incentive was increased from 75% to 80% of base salary for 2023 based on his execution and leadership in managing Saia’s commercial strategies.
Mr. Sugar’s target annual incentive was increased from 70% to 80% of base salary for 2023 based on Mr. Sugar’s leadership and management of the operations group during a period of significant operational challenges and based on his additional tenure in the position.
In addition, for 2023, the Committee modified the annual incentive plan for the Named Executive Officers (and other direct reports to the CEO) with the goal of increasing the number of diverse candidates who are interviewed for management level positions at Saia. As modified, if interview pools during the year for 90% or more of open positions for director-level employee positions and above do not have at least one diverse candidate, the annual incentive payouts for all the Named Executive Officers (and other direct reports to the CEO) for the year would be reduced across the board by ten percentage points. The requirement was met for 2023 and there was no such reduction of the annual incentive payouts for the year.
For 2023 the potential payout levels under the annual incentive awards for the Named Executive Officers were as follows:
Potential Payouts of Annual Cash Incentives for 2023
Payout as a % of Base Salary | ||||||||||||||
Named Executive Officer | Title | Threshold | Target | Maximum | ||||||||||
Frederick J. Holzgrefe, III | President & Chief Executive Officer | 27.5 | % | 110.0 | % | 220.0 | % | |||||||
Douglas L. Col | Executive Vice President & Chief Financial Officer | 20.0 | % | 80.0 | % | 160.0 | % | |||||||
Raymond R. Ramu | Executive Vice President & Chief Customer Officer | 20.0 | % | 80.0 | % | 160.0 | % | |||||||
Patrick D. Sugar | Executive Vice President of Operations | 20.0 | % | 80.0 | % | 160.0 | % | |||||||
Rohit Lal | Executive Vice President & Chief Information Officer | 12.5 | % | 50.0 | % | 100.0 | % |
Performance Targets and Actual Performance for 2023
For 2023, the annual cash incentive awards for the Named Executive Officers were based 50% on achieving an annual operating income target and 50% on achieving an annual operating ratio target. The Compensation and Human Capital Committee believes using an operating income target rather than an earnings per share target more closely reflects actual performance of management for the year by eliminating the impact of changes to the effective tax rate. Saia uses operating ratio as a performance goal because it is an objective measure of profitability of Saia’s business, is a common measure of profitability within the industry and can have a direct impact on Saia’s stock price. Operating ratio is defined as operating expenses divided by operating revenue. Real estate gains and losses, one-time charges and integration charges are excluded from the calculation at the discretion of the Compensation and Human Capital Committee.
30 | SAIA, INC. | 2024 Proxy Statement |
COMPENSATION DISCUSSION AND ANALYSIS
The operating income and operating ratio performance targets for 2023 were set by the Compensation and Human Capital Committee considering past performance, the strategic plan, current economic conditions and other forecasts of performance for the year. The performance targets and actual performance for 2023 were as follows:
Threshold | Target | Maximum | Actual | |||||||||||||
Operating income (in millions) (50% weighting) | $359.2 | $426.7 | $516.8 | $460.5 | ||||||||||||
Operating ratio (50% weighting)(1) | 87.3 | % | 84.9 | % | 81.7 | % | 84.0 | % |
(1) | Operating ratio is the
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Based on operating income and operating ratio results for 2023, the final payout of the annual incentive plan was 127.6% of target for 2023. See the “2023 Grants of Plan-Based Awards Table” that follows the Summary Compensation Table for additional information about annual cash incentive awards granted to the Named Executive Officers for 2023.
Long-Term Equity Incentives
The Compensation and Human Capital Committee provides long-term equity awards to the executive officers to align the interests of the executives with the interests of our stockholders, reward executives for achieving stockholder valuation increases over a multi-year period and encourage executive retention. The long-term equity awards are provided through performance stock units and restricted stock.
Long-term equity awards are typically granted in early February each year after the third trading day following the release of the Company’s financial results for the prior fiscal year. For new hires receiving equity grants, the grant date is typically on or around their hire date.
Long-Term Equity Incentive Plan Targets
The Committee grants long-term equity awards for each Named Executive Officer based on a target percentage of base salary. The Compensation and Human Capital Committee uses the median of long-term incentives of the peer group companies as the general reference point for target long-term equity awards because it believes the median is the best representation of competitive long-term equity incentive levels in the market for similar roles and talent. In setting target equity incentive levels for an executive, the Compensation and Human Capital Committee has discretion to adjust the target level as it deems appropriate. Typical reasons for adjusting an individual officer’s target equity incentive level above or below the market median include tenure of the officer in the position, job performance, additional responsibilities of the officer, internal pay equity, executive retention and succession planning.
Changes made to the long-term equity incentive targets as a percentage of base salary for the Named Executive Officers for 2023 were as follows:
Mr. Holzgrefe’s target long-term equity incentive was increased from 270% to 300% of base salary for 2023 based on his performance as Chief Executive Officer, to reflect his additional tenure in the position and to approximate median long-term incentives offered to chief executive officers of peer group companies and in general industry.
• | Mr. Col’s target long-term equity incentive |
Mr. Ramu’s target long-term equity incentive was increased from 175% to 200% of base salary for 2023 based on his execution and leadership in managing Saia’s commercial strategies.
Mr. Sugar’s target long-term equity incentive was increased from 140% to 200% of base salary for 2023 based on his leadership and management of the operations group during a period of significant operational challenges and to reflect his additional tenure in the position.
Mr. Lal’s target long-term equity incentive was increased from 70% to 75% of base salary for 2023 based on his performance as leader of the Company’s information technology team and to maintain his long-term equity incentive compensation at approximately the median long-term equity incentive compensation paid to chief information officers by peer group companies and in general industry.
2024 Proxy Statement | SAIA, INC. | 31 |
COMPENSATION DISCUSSION AND ANALYSIS
For 2023, the target long-term equity incentives as a percentage of base salary for the Named Executive Officers were as follows:
Named Executive Officer | Title | Target as a % of Base Salary | ||||
Frederick J. Holzgrefe, III | President & Chief Executive Officer | 300 | % | |||
Douglas L. Col | Executive Vice President & Chief Financial Officer | 165 | % | |||
Raymond R. Ramu | Executive Vice President & Chief Customer Officer | 200 | % | |||
Patrick D. Sugar | Executive Vice President of Operations | 200 | % | |||
Rohit Lal | Executive Vice President & Chief Information Officer | 75 | % |
Components of Long-Term Equity Incentive Awards
For 2023, 50% of a Named Executive Officer’s long-term equity incentive opportunity was granted in performance stock units and 50% in restricted stock.
Why performance stock units? | Why restricted stock? | |
• Performance-based because the number of shares earned depends on stock price performance and the value of the shares fluctuates based on the stock price. | • Inherent value upon issuance mitigates significant employee compensation swings. | |
• The number of shares earned is tied to total stockholder return of the Company |
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• Rewards executives for increasing Saia’s total | • Aligns executives’ interests with
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Performance Stock Units
For 2023, 50% of Plan-Based Awards Table” that follows the Summary Compensation Table for additional information on restricted stock grants made to the Named Executive Officers in 2022. See the “Potential Payments Upon Termination or Change in Control” section for a description of the effect a termination of employment or a change in control of the Company have on the restricted stock granted to the Named Executive Officers’ long-term equity incentive opportunity was awarded in performance stock units, which are paid in shares of Saia stock. The role of performance stock units is to reward executives for long-term value creation relative to other transportation companies. The Compensation and Human Capital Committee believes that measuring Saia stock performance against that of a broad group of transportation companies over a multi-year period provides a key metric for assessing the long-term performance of Saia’s Named Executive Officers. Providing a significant portion of long-term compensation on this basis also aligns the interests of the Named Executive Officers with the interests of our stockholders and helps insure against executives taking excessive or unnecessary risks that might threaten the long-term value of the Company.
The number of shares of stock that are earned by a participant is based on the total stockholder return of Saia compared to the total stockholder return (assuming reinvestment of dividends) of the companies in the broader transportation group over a three-year performance period. At the end of the performance period, the percentile rank of the Company’s total stockholder return is calculated relative to the total stockholder return of each of the companies in the group. Because the performance period for each grant of performance stock units is three years, participants can have overlapping three-year award opportunities at any time.
32 | SAIA, INC. | 2024 Proxy Statement |
COMPENSATION DISCUSSION AND ANALYSIS
COMPENSATION DISCUSSION AND ANALYSIS
Since the size of the companies is not critical in assessing relative total stockholder returns, the group used for comparison purposes for performance stock units (the “PSU Group”) is comprised of U.S. publicly-traded companies in the broader transportation industry, regardless of revenues. The Committee believes using performance of the PSU Group provides a wider spectrum from which to assess management performance. The companies included in the PSU Group for open performance periods are as follows:
Air Transport Services Group, Inc.
ArcBest Corporation
Atlas Air Worldwide Holdings, Inc.
CH Robinson Worldwide, Inc.
Covenant Transport, Inc.
Daseke, Inc.
Echo Global Logistics, Inc.
FedEx Corporation
Forward Air Corporation
Heartland Express, Inc.
Hub Group, Inc.
J.B. Hunt Transport Services, Inc.
Kansas City Southern (through December 27, 2021)
Kirby Corporation
Knight – Swift Transportation Holdings, Inc.
Landstar System, Inc.
Marten Transport, Ltd.
Norfolk Southern Corporation
Old Dominion Freight Line, Inc.
P.A.M. Transportation Services, Inc.
Roadrunner Transportation Services, Inc.
Rush Enterprises, Inc.
Ryder System, Inc.
Schneider National, Inc.
Union Pacific Corporation
United Parcel Service, Inc.
Universal Logistics Holdings, Inc.
US Xpress, Inc.
USA Truck Inc.
Werner Enterprises, Inc.
XPO Logistics, Inc.
For the performance periods beginning in 2021, 2022 and 2023, the payouts of performance stock units are determined as follows:
| Payout Percentage of
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At 75th percentile or higher | 200% | |
At 50th percentile | 100% | |
At 25th percentile | 25% | |
Below 25th percentile | 0% |
The payout associated with the Company’s percentile rank is based on the chart above with payouts interpolated for performance between the 25th and 50th percentiles and the 50th and 75th percentiles.
If the Company’s total stockholder return for the three-year performance period is negative, any payouts of the incentive are reduced by half. For example, if the Company’s total stockholder return over the three-year period is negative, but the Company’s total stockholder return compared to the PSU Group is at the 50th percentile, the associated payout percentage will be 50% of target, not 100%. Given the cyclical nature of the transportation industry, the Compensation and Human Capital Committee includes this provision to provide an incentive under the plan in the case of an economic downturn affecting the entire industry, to conform to peer group practice generally and for executive retention.
The following table details the payout percentages compared to target of the performance stock units paid out the last three years:
Payout Month | Performance Period | Payout Percentage of
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February 2024 | 2021 to | 200% | ||
February 2023 | 2020 to | 200% | ||
February 2022 | 2019 to | 200% |
In early 2023, the Company granted total performance stock units of 10,350 shares (at target) for the 2023 to 2025 performance period to the Named Executive Officers, representing 73% of the total target units granted at that time. See the “2023 Grants of Plan-Based Awards Table” that follows the Summary Compensation Table for additional information about performance stock units granted to each of the Named Executive Officers in 2023.
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COMPENSATION DISCUSSION AND ANALYSIS
See the “Potential Payments Upon Termination or Change in Control” section for a description of the effect a termination of employment or a change in control of the Company would have on the performance stock units awarded to the Named Executive Officers.
Restricted Stock Awards
The Committee uses restricted stock as a part of the long-term equity incentive plan to help reduce significant executive compensation swings that can occur as a result of the cyclical nature of the trucking business, for executive retention and to better align the Company’s long-term compensation practices with its peers. The value of restricted stock grants in 2023 under the long-term equity incentive plan was equal to 50% of the target long-term equity incentive award for the executive. In early 2023, the Company granted a total of 10,350 shares of restricted stock to the Named Executive Officers, representing 73% of the total restricted stock awards granted at that time. These restricted stock grants vest ratably over three years subject to earlier vesting upon death, disability, retirement, and upon a change in control of Saia.
The Company also uses restricted stock grants from time to time to address concerns about long-term executive retention, as part of a total compensation package granted to an executive upon initial hiring or to recognize the significant promotion of an executive or outstanding performance. These restricted stock grants have historically vested over a five-year period in order to promote executive retention.
See the “2023 Grants of Plan-Based Awards Table” that follows the Summary Compensation Table for additional information on restricted stock grants made to each of the Named Executive Officers in 2023. See the “Potential Payments Upon Termination or Change in Control” section for a description of the effect a termination of employment or a change in control of the Company would have on the restricted stock granted to the Named Executive Officers.
Other Benefits and Perquisites
Benefits
The Company provides customary employee benefits to substantially all employees, including the Named Executive Officers. These benefits include paid holidays and vacation, medical, disability and life insurance and a defined contribution retirement plan. The defined contribution retirement plan is a 401(k) savings plan to which employees may elect to make pre-tax contributions. The Company has the discretion to match 50% of all employee contributions, up to a maximum employee contribution of 6% of annual salary.
Deferred Compensation Plan
The Company has established for officers (including all of the Named Executive Officers) and certain other employees a Capital Accumulation Plan, which is a non-qualified deferred compensation plan. The Capital Accumulation Plan was implemented to motivate and retain key employees by providing them with greater flexibility in structuring the timing of their compensation and tax payments. The Compensation and Human Capital Committee believes that the Capital Accumulation Plan provides a valuable benefit to senior executives with minimal cost to the Company.
The Capital Accumulation Plan allows a participant to make an elective deferral each year of up to 50% of base salary and up to 100% of any annual incentive plan payment. The Company typically makes an annual discretionary contribution under the Capital Accumulation Plan for each participant equal to 5% of his or her base salary and annual incentive payment, which contribution is subject to a five-year vesting period. In addition, to the extent a participant’s contribution to the 401(k) savings plan is limited under restrictions placed on “Highly Compensated Employees” under ERISA, the participant may elect to contribute the amount so limited to the Capital Accumulation Plan. To the extent the Company is unable to match participant contributions under the 401(k) savings plan because of the ERISA limitations, the matching contributions will be made by the Company to the Capital Accumulation Plan.
The types and amounts of perquisites provided to the Named Executive Officers are determined by the Compensation Committee with input from Mercer based on perquisites granted to comparable officers by companies in the executive compensation peer group. The Company provides perquisites because many companies in the peer group provide similar perquisites to their Named Executive Officers and because the Committee believes they are important for executive retention. However, the perquisites that the Company provides are generally fewer and less costly than those provided by members of the peer group. The value of the perquisites provided to the Named Executive Officers for 2022
34 | SAIA, INC. | 2024 Proxy Statement |
COMPENSATION DISCUSSION AND ANALYSIS
The Capital Accumulation Plan provides the same investment options to participants as are available under the 401(k) savings plan, except that participants may also elect to invest in Saia stock under the Capital Accumulation Plan. Participants may elect to transfer balances between investment options without restriction at any time throughout the year, except that any investment in Saia stock is an irrevocable election and upon distribution that investment will be paid out in Saia stock, rather than cash. Vested plan balances become distributable to the participant upon termination of employment subject to Section 409A of the Internal Revenue Code.
Perquisites
The types and amounts of perquisites provided to the Named Executive Officers are determined by the Compensation and Human Capital Committee with input from Mercer based on perquisites granted to comparable officers by companies in the executive compensation peer group. The Company provides perquisites because many companies in the peer group provide similar perquisites to their Named Executive Officers and because the Committee believes they are important for executive retention. However, the perquisites that the Company provides are generally fewer and less costly than those provided by members of the peer group. The value of the perquisites provided to the Named Executive Officers for 2023 are set forth in the “All Other Compensation” column of the Summary Compensation Table.
Post-Employment Compensation
Severance Agreements
Each of the Named Executive Officers is subject to non-competition and employee and customer non-solicitation provisions, as well as provisions designed to protect Saia’s intellectual property. To provide an incentive for executives to agree to the restrictive covenants, the Company entered into a severance agreement with each Named Executive Officer (other than the Chief Executive Officer) that generally provides for severance payments equal to base salary over the non-compete period in the event the executive’s employment is involuntarily terminated without cause as defined in the agreements. To receive the severance payments, the executive must sign a general release of claims against the Company and must comply with the executive’s obligations under any other agreement with the Company, including the restrictive covenants. Mr. Holzgrefe’s severance arrangements are governed by the terms of his employment agreement and Change in Control Agreement (referred to below).
COMPENSATION DISCUSSION AND ANALYSIS
Double Trigger Change in Control Agreements
The Company has change in control agreements with each of the Named Executive Officers (the “Change in Control Agreements”). The Compensation and Human Capital Committee believes the Change in Control Agreements are an important part of Saia’s overall compensation program for the Named Executive Officers because they help secure the continued employment and dedication of the Named Executive Officers notwithstanding any concern the executive might have regarding their own continued employment in the event of a potential change in control transaction.
The Change in Control Agreements include a “double trigger,” meaning they provide for severance payments and other benefits only if there is a change in control of the Company and only if after the change in control the executive’s employment is terminated involuntarily (other than for cause) or voluntarily with good reason within two years after the change in control. The Change in Control Agreements are reviewed periodically by the Committee to ensure they are consistent with the Company’s compensation philosophy. The Committee also receives input from Mercer and outside legal counsel to confirm that the agreements remain generally consistent with competitive practices.
The amount of the severance payments and benefits under these agreements are based on peer group and general industry practices and are described in the “Potential Payments Upon Termination or Change in Control” section of this proxy statement.
2024 Proxy Statement | SAIA, INC. | 35 |
COMPENSATION DISCUSSION AND ANALYSIS
Employment Agreement
To promote executive retention, continuity and stability in the Company’s leadership and help support certain non-competition and non-solicitation provisions, the Company entered into an employment agreement with Mr. Holzgrefe at the time he was named Chief Executive Officer in April 2020. The employment agreement is for a two-year initial term (renewing daily) and provides for a minimum base salary that is to be reviewed annually, participation in the Company’s annual and long-term incentive plans, other benefits that are provided to senior executives of Saia and severance benefits in the event of Mr. Holzgrefe’s employment termination under certain circumstances. All severance benefits under the employment agreement are conditioned upon Mr. Holzgrefe’s compliance with the non-disclosure, non-competition and employee and customer non-solicitation provisions of the employment agreement. The material terms of the employment agreement are reviewed periodically by the Committee with input from Mercer and outside legal counsel to confirm that they remain generally consistent with competitive practices. The payments to be made to Mr. Holzgrefe under his employment agreement upon termination of employment or a change in control of the Company are described in the “Potential Payments Upon Termination or Change in Control” section of this proxy statement.
Risk Assessment in Compensation Programs
The Compensation and Human Capital Committee regularly assesses the Company’s executive and broad-based compensation and benefits programs, policies and practices to determine if they create undesired or unintended risk of a material nature. Although the Committee reviews all executive compensation programs, it focuses on those programs with variability of payout, and reviews the ability of a participant to directly affect payout, the controls on participant action and actual payouts.
Based on that assessment, the Compensation and Human Capital Committee concluded that the Company’s compensation programs are designed and administered with an appropriate balance of risk and reward in relation to the Company’s business strategy and do not encourage executives to take unnecessary or excessive risks. The following features of the compensation programs help to mitigate risk taking:
A mix of short- and long-term compensation, particularly incentive compensation, to encourage executives to focus on goals consistent with the interests of Saia stockholders.
Short-term incentives in the form of an annual cash bonus based on annual Company performance, with caps to eliminate windfall payouts.
Long-term incentives awarded in performance stock units based on Company stock price performance over a three-year period relative to Company peers stock options and restricted stock, rewarding longer-term financial performance consistent with the interests of Saia stockholders.
COMPENSATION DISCUSSION AND ANALYSIS
Performance stock units that are settled in common stock of the Company with a cap on the number of shares that can be awarded.
Stock ownership guidelines that encourage executives to retain significant amounts of Saia common stock, thereby aligning the long-term interests of management with those of the stockholders.
A Clawback Policy applicable to certain current and former executive officers that complies with new Nasdaq listing standards and an Incentive Compensation Recovery Policy applicable to certain current and former officers, senior managers and executives granting Saia discretion to clawback incentive compensation if such individual engages in “Improper Conduct” or if the result of a performance measure upon which incentive compensation was based is subsequently restated or otherwise adjusted in a manner that would reduce the size of the award.
A policy that prohibits executives from engaging in short sales of Saia common stock or in transactions involving puts, calls, or other derivative securities of the Company or in hedging transactions with respect to the Company’s stock. The policy also restricts executives from holding stock in margin accounts and from pledging stock of the Company.
Stock ownership guidelines that encourage executives to retain significant amounts of Saia common stock, thereby aligning the long-term interests of management with those of the stockholders.
A clawback policy to provide for the recovery of incentive compensation awarded to an officer or executive of Saia if the result of a performance measure upon which the award was based is subsequently restated or otherwise adjusted in a manner that would reduce the size of the award. The clawback policy also provides for recoupment under certain circumstances involving improper conduct by the executive.
A policy that prohibits executives from engaging in short sales of Saia common stock or in transactions involving puts, calls, or other derivative securities of the Company or in hedging transactions with respect to the Company’s stock. The policy also restricts executives from holding stock in margin accounts and from pledging stock of the Company.
| 2024 Proxy Statement |
COMPENSATION DISCUSSION AND ANALYSIS
Other Compensation Policies
Stock Ownership Guidelines
Because the Company is committed to aligning the executives’ interests with those of Saia stockholders, the Board has adopted stock ownership guidelines for all officers who are eligible to receive long-term incentives, including all of the Named Executive Officers. The number of shares each officer is required to retain is determined by multiplying his or her current base salary by the multiple noted below and dividing by the current share price, rounded down to the nearest dollar. The current guidelines for the Named Executive Officers are as follows:
Name | Title | Multiple of Salary | Compliance(1) | |||||||
Frederick J. Holzgrefe, III | President & Chief Executive Officer | 5 | Yes | |||||||
Douglas L. Col | Executive Vice President & Chief Financial Officer | 2.5 | Yes | |||||||
Raymond R. Ramu | Executive Vice President & Chief Customer Officer | 2 | Yes | |||||||
Patrick D. Sugar | Executive Vice President of Operations | 2 | Yes | |||||||
Anthony R. Norwood | Executive Vice President & Chief Human Resources Officer | 2 | (2 | ) |
Name | Title | Multiple of Salary | Compliance(1) | |||||||
Frederick J. Holzgrefe, III | President & Chief Executive Officer | 5 | Yes | |||||||
Douglas L. Col | Executive Vice President & Chief Financial Officer | 2.5 | Yes | |||||||
Raymond R. Ramu | Executive Vice President & Chief Customer Officer | 2 | Yes | |||||||
Patrick D. Sugar | Executive Vice President of Operations | 2 | Yes | |||||||
Rohit Lal | Executive Vice President & Chief Information Officer | 2 | Yes |
(1) | As of December 31, 2023. |
Executives are to satisfy the guidelines within five years of becoming subject to the guidelines. Until the guidelines are met, executives are encouraged to hold 75% of the realized share value (net of taxes) attributable to option exercises, performance stock unit payouts and vesting in restricted stock. The Compensation and Human Capital Committee monitors the progress toward, and continued compliance with, the stock ownership guidelines on a regular basis. The types of equity counted for purposes of the stock ownership guidelines are common stock, including restricted stock, and Company stock units held in the deferred compensation plan. Performance stock units and stock options are not counted for purposes of the guidelines.
Although there are no formal penalties for not fulfilling the requirements of the ownership guidelines, non-compliance may affect future equity awards. The foregoing sets forth the Company’s current ownership guidelines for executives. The Board (or any committee designated by the Board) may, at any time, amend, modify or terminate the guidelines in full or in part. The Board (or any committee designated by the Board) may also grant waivers of the guidelines in the event of special circumstances or as otherwise determined advisable or in the best interest of the Company in given circumstances.
Prohibition Against Short Sales, Hedging and Margin Accounts
Under the Company’s insider trading policy, Saia employees, including the Named Executive Officers, and Saia directors, are prohibited from engaging in short sales of Saia common stock or in transactions involving puts, calls, or other derivative securities or in hedging transactions (such as zero-cost collars and forward sale contracts) with respect to the Company’s stock. Additionally, such employees, including the Named Executive Officers, and directors are prohibited from holding Saia stock in a margin account and from pledging Saia common stock as collateral for indebtedness.
Clawback Policies
The Board of Directors has adopted a Clawback Policy that complies with new Nasdaq listing standards, which obligates the Company to demand recovery of certain excess incentive compensation awarded to certain current and former executive officers if the result of a performance measure upon which the award was based is subsequently restated or otherwise adjusted in a manner that would reduce the size of the award.
2024 Proxy Statement | SAIA, INC. | 37 |
COMPENSATION DISCUSSION AND ANALYSIS
In addition, the Company also maintains an Incentive Compensation Recovery Policy applicable to all current and former officers, senior managers and executives who participate in Saia’s incentive compensation plans and programs providing that if such individual engages in “Improper Conduct” (as defined under the Incentive Compensation Recovery Policy) or if the result of a performance measure upon which incentive compensation was based is subsequently restated or otherwise adjusted in a manner that would reduce the size of the award, Saia may, within three years following the payment or vesting of incentive compensation, seek recovery of such incentive compensation. In such instance, in accordance with the Incentive Compensation Recovery Policy, the Company may also cancel any unpaid or unvested incentive compensation. The Compensation and Human Capital Committee has discretion under the Incentive Compensation Recovery Policy to determine whether to seek recovery in a given situation based on a number of factors, including an assessment of the relative costs and benefits of seeking the recovery, whether seeking the recovery may violate applicable law or otherwise prejudice Saia’s interests, and such other factors as it deems relevant.
Tax Policies
Historically, the Compensation and Human Capital Committee structured annual and long-term incentives with the intention of satisfying the performance-based exemption from Section 162(m) of the Internal Revenue Code in order to deduct for tax purposes compensation paid to certain executive officers in excess of $1 million. Federal legislation signed into law on December 22, 2017, referred to as the Tax Cuts and Jobs Act, repealed the exemption from Section 162(m)’s deduction limit for performance-based compensation, effective for taxable years beginning after December 31, 2017. As a result, compensation granted or paid in 2018 or thereafter to the Named Executive Officers may not be fully deductible for income tax purposes.
In establishing the compensation for executive officers, the Compensation and Human Capital Committee believes that the potential deductibility of the compensation should be only one of a number of relevant factors taken into consideration, and not the sole or primary factor. The Committee believes that executive compensation must be maintained at the requisite level to attract and retain the executive officers essential to Saia’s financial success and, as a result, retains the flexibility to award compensation that it determines to be consistent with the goals of our executive compensation program even if the compensation is not deductible by Saia for tax purposes.
Section 409A of the Internal Revenue Code regulates deferred compensation that was not earned and vested prior to 2005. The Committee considers Section 409A in determining the form and timing of compensation paid to executives.
Sections 280G and 4999 of the Internal Revenue Code limit Saia’s ability to take a tax deduction for certain “excess parachute payments” (as defined in Code Sections 280G and 4999) and impose excise taxes on each executive that receives “excess parachute payments” related to his or her severance from the Company in connection with a change in control. The Committee considers the adverse tax liabilities imposed by Code Sections 280G and 4999, as well as other competitive factors, in structuring certain post-termination compensation payable to the Named Executive Officers. The potential adverse tax consequences to the Company and/or the executive, however, are not necessarily determinative factors in such decisions.
Accounting Policies
The Company accounts for its employee stock-based compensation awards in accordance with ASC Topic 718, Compensation-Stock Compensation. ASC Topic 718 requires that all employee stock-based compensation is recognized as a cost in the financial statements and that for equity-classified awards such costs are measured at the grant date fair value of the award.
38 | SAIA, INC. | 2024 Proxy Statement |
Compensation Committee Report of Saia, Inc.
The Compensation and Human Capital Committee of the Board of Directors of the Company has submitted the following report for inclusion in this Proxy Statement:
Our Committee has reviewed and discussed the Compensation Discussion and Analysis contained in this Proxy Statement with management. Based on the Committee’s review of and the discussions with management with respect to the Compensation Discussion and Analysis, the Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Company’s Annual Report on Form 10-K and in this Proxy Statement.
The foregoing report is provided by the following directors, who constitute the Committee:
Compensation and Human Capital Committee Members
Randolph W. Melville, Chair
Di-Ann Eisnor
Kevin A. Henry
Jeffrey C. Ward
2024 Proxy Statement | SAIA, INC. | 39 |
Summary Compensation Table
The following table sets forth the compensation awarded to, earned by or paid to the Named Executive Officers for services rendered in all capacities within Saia during the fiscal years ended December 31, 2023, 2022 and 2021.
Name & Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards | Option Awards | Non-Equity Incentive Plan Compensation | All Other Compensation | Total ($) | ||||||||||||||
Frederick J. Holzgrefe, III President & Chief Executive Officer (PEO) | 2023 | 910,000 | — | 3,382,889 | — | 1,277,276 | 160,694 | 5,730,859 | ||||||||||||||
2022 | 875,000 | — | 1,916,617 | 477,691 | 1,152,397 | 102,167 | 4,523,872 | |||||||||||||||
2021 | 825,000 | — | 1,981,414 | 404,744 | 1,650,000 | 76,358 | 4,937,517 | |||||||||||||||
Douglas L. Col Executive Vice President & Chief Financial Officer (PFO) | 2023 | 523,120 | — | 1,070,024 | — | 533,981 | 82,661 | 2,209,786 | ||||||||||||||
2022 | 480,000 | — | 584,276 | 146,040 | 442,512 | 65,222 | 1,718,049 | |||||||||||||||
2021 | 437,750 | — | 567,678 | 115,910 | 612,864 | 47,893 | 1,782,095 | |||||||||||||||
Raymond R. Ramu Executive Vice President & Chief Customer Officer | 2023 | 570,960 | — | 1,414,938 | — | 582,877 | 88,188 | 2,656,963 | ||||||||||||||
2022 | 510,000 | — | 724,033 | 180,901 | 503,753 | 62,412 | 1,981,099 | |||||||||||||||
2021 | 477,335 | — | 642,818 | 131,573 | 716,904 | 53,891 | 2,022,521 | |||||||||||||||
Patrick D. Sugar Executive Vice President of Operations | 2023 | 491,573 | — | 1,218,358 | — | 501,826 | 68,854 | 2,280,611 | ||||||||||||||
2022 | 425,016 | — | 482,700 | 120,601 | 391,823 | 53,608 | 1,473,748 | |||||||||||||||
2021 | 375,361 | — | 546,298 | 70,799 | 404,653 | 41,566 | 1,438,677 | |||||||||||||||
Rohit Lal Executive Vice President & Chief Information Officer | 2023 | 394,160 | — | 366,516 | — | 251,500 | 72,539 | 1,084,715 | ||||||||||||||
2022 | 356,400 | — | 202,284 | 50,878 | 234,689 | 51,110 | 895,361 | |||||||||||||||
2021 | 345,327 | — | 232,765 | 47,617 | 346,080 | 38,001 | 1,009,789 |
(1) |
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Executives are to satisfy the guidelines within five years of becoming subject to the guidelines. Until the guidelines are met, executives are encouraged to hold 75% of the realized share value (net of taxes) attributable to option exercises, performance stock unit payouts and vesting in restricted stock. The Compensation Committee monitors the progress toward, and continued compliance with, the stock ownership guidelines on a regular basis. The types of equity counted for purposes of the stock ownership guidelines are common stock, including restricted stock, and Company stock units held in the deferred compensation plan. Stock options and performance stock units are not counted for purposes of the guidelines.
Although there are no formal penalties for not fulfilling the requirements of the ownership guidelines, non-compliance may affect future equity awards. The foregoing sets forth the Company’s current ownership guidelines for executives. The Board (or any committee designated by the Board) may, at any time, amend, modify or terminate the guidelines in full or in part. The Board (or any committee designated by the Board) may also grant waivers of the guidelines in the event of special circumstances or as otherwise determined advisable or in the best interest of the Company in given circumstances.
Prohibition Against Short Sales, Hedging and Margin Accounts
Under the Company’s insider trading policy, Saia employees, including the Named Executive Officers, and Saia directors, are prohibited from engaging in short sales of Saia common stock or in transactions involving puts, calls, or other derivative securities or in hedging transactions (such as zero-cost collars and forward sale contracts) with respect to the Company’s stock. Additionally, such employees, including the Named Executive Officers, and directors are prohibited from holding Saia stock in a margin account and from pledging Saia common stock as collateral for indebtedness.
COMPENSATION DISCUSSION AND ANALYSIS
Clawback Policy
The Board of Directors has adopted a policy that authorizes the Company, at the direction of the Compensation Committee, to seek to recover incentive compensation awarded to an officer or executive of Saia if the result of a performance measure upon which the award was based is subsequently restated or otherwise adjusted in a manner that would reduce the size of the award. In addition, if an officer or executive of Saia engages in “Improper Conduct” (as defined under the policy), Saia may, within three years following the payment or vesting of incentive compensation, seek recovery of such incentive compensation. In such instance, the Company may also cancel any unpaid or unvested incentive compensation. The Compensation Committee has discretion to determine whether to seek recovery in a given situation based on a number of factors, including an assessment of the relative costs and benefits of seeking the recovery, whether seeking the recovery may violate applicable law or otherwise prejudice Saia’s interests, and such other factors as it deems relevant.
Tax Policies
Historically, the Compensation Committee structured annual and long-term incentives with the intention of satisfying the performance-based exemption from Section 162(m) of the Internal Revenue Code in order to deduct for tax purposes compensation paid to certain executive officers in excess of $1 million. Federal legislation signed into law on December 22, 2017, referred to as the Tax Cuts and Jobs Act, repealed the exemption from Section 162(m)’s deduction limit for performance-based compensation, effective for taxable years beginning after December 31, 2017. As a result, compensation granted or paid in 2018 or thereafter to the Named Executive Officers may not be fully deductible for income tax purposes.
In establishing the compensation for executive officers, the Compensation Committee believes that the potential deductibility of the compensation should be only one of a number of relevant factors taken into consideration, and not the sole or primary factor. The Committee believes that executive compensation must be maintained at the requisite level to attract and retain the executive officers essential to Saia’s financial success and, as a result, retains the flexibility to award compensation that it determines to be consistent with the goals of our executive compensation program even if the compensation is not deductible by Saia for tax purposes.
Section 409A of the Internal Revenue Code regulates deferred compensation that was not earned and vested prior to 2005. The Committee considers Section 409A in determining the form and timing of compensation paid to executives.
Sections 280G and 4999 of the Internal Revenue Code limit Saia’s ability to take a tax deduction for certain “excess parachute payments” (as defined in Code Sections 280G and 4999) and impose excise taxes on each executive that receives “excess parachute payments” related to his or her severance from the Company in connection with a change in control. The Committee considers the adverse tax liabilities imposed by Code Sections 280G and 4999, as well as other competitive factors, in structuring certain post-termination compensation payable to the Named Executive Officers. The potential adverse tax consequences to the Company and/or the executive, however, are not necessarily determinative factors in such decisions.
Accounting Policies
The Company accounts for its employee stock-based compensation awards in accordance with ASC Topic 718, Compensation-Stock Compensation. ASC Topic 718 requires that all employee stock-based compensation is recognized as a cost in the financial statements and that for equity-classified awards such costs are measured at the grant date fair value of the award.
Compensation Committee Report of Saia, Inc.
The Compensation Committee of the Board of Directors of the Company has submitted the following report for inclusion in this Proxy Statement:
Our Committee has reviewed and discussed the Compensation Discussion and Analysis contained in this Proxy Statement with management. Based on the Committee’s review of and the discussions with management with respect to the Compensation Discussion and Analysis, the Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Company’s Annual Report on Form 10-K and in this Proxy Statement.
The foregoing report is provided by the following directors, who constitute the Committee:
Compensation Committee Members
Randolph W. Melville, Chair
Di-Ann Eisnor
Kevin A. Henry
Jeffrey C. Ward
Summary Compensation Table
The following table sets forth the compensation awarded to, earned by or paid to the Named Executive Officers for services rendered in all capacities within Saia during the fiscal years ended December 31, 2022, 2021 and 2020.
Name & Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Option Awards ($)(2) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($)(3) | Total ($) | ||||||||||||||||||||||||
Frederick J. Holzgrefe, III President & Chief Executive Officer (PEO) | 2022 | 875,000 | — | 1,916,617 | 477,691 | 1,152,397 | 102,167 | 4,523,872 | ||||||||||||||||||||||||
2021 | 825,000 | — | 1,981,414 | 404,744 | 1,650,000 | 76,358 | 4,937,517 | |||||||||||||||||||||||||
2020 | 664,320 | — | 931,511 | 194,596 | 563,137 | 76,575 | 2,430,138 | |||||||||||||||||||||||||
Douglas L. Col Executive Vice President & Chief Financial Officer (PFO) | 2022 | 480,000 | — | 584,276 | 146,040 | 442,512 | 65,222 | 1,718,049 | ||||||||||||||||||||||||
2021 | 437,750 | — | 567,678 | 115,910 | 612,864 | 47,893 | 1,782,095 | |||||||||||||||||||||||||
2020 | 368,445 | — | 842,173 | 71,640 | 211,122 | 41,612 | 1,534,992 | |||||||||||||||||||||||||
Raymond R. Ramu Executive Vice President & Chief Customer Officer | 2022 | 510,000 | — | 724,033 | 180,901 | 503,753 | 62,412 | 1,981,099 | ||||||||||||||||||||||||
2021 | 477,335 | — | 642,818 | 131,573 | 716,904 | 53,891 | 2,022,521 | |||||||||||||||||||||||||
2020 | 463,512 | — | 592,994 | 123,973 | 303,833 | 56,231 | 1,540,542 | |||||||||||||||||||||||||
Patrick D. Sugar Executive Vice President of Operations(4) | 2022 | 425,016 | — | 482,700 | 120,601 | 391,823 | 53,608 | 1,473,748 | ||||||||||||||||||||||||
2021 | 375,361 | — | 546,298 | 70,799 | 404,653 | 41,566 | 1,438,677 | |||||||||||||||||||||||||
Anthony R. Norwood Executive Vice President & Chief Human Resources Officer(5) | 2022 | 304,180 | — | 572,280 | 52,030 | 240,364 | 122,801 | 1,291,656 |
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Name | Perquisites & Other Personal Benefits ($)(a)(b) | Car Allowance ($) | Company Contributions to Defined Contribution Plans (401(k)) ($) | Company Contributions to Defined Contribution Plans (Def. Comp.) ($) | Life Insurance Premiums ($) | ||||||||||||||||||||
Frederick J. Holzgrefe, III | 9,890 | 11,311 | 9,150 | 69,194 | 2,622 | ||||||||||||||||||||
Douglas L. Col | 9,968 | 11,470 | 9,150 | 32,313 | 2,322 | ||||||||||||||||||||
Raymond R. Ramu | 5,899 | 8,526 | 7,688 | 39,058 | 1,242 | ||||||||||||||||||||
Patrick D. Sugar | 6,581 | 11,470 | 9,150 | 25,921 | 486 | ||||||||||||||||||||
Anthony R. Norwood | 110,060 | 8,193 | 3,194 | — | 1,355 | ||||||||||||||||||||
(a) Payment of club dues, relocation, fuel and tax preparation reimbursements. |
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(b) Mr. Norwood’s amount includes $107,110 related to relocation expenses. The value in this column reflects the aggregate incremental cost to us of providing each perquisite to the executive. |
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SUMMARY COMPENSATION TABLE
Summary Compensation Table Narrative
Employment Agreement
The Company is a party to an employment agreement with Mr. Holzgrefe, dated April 28, 2020, that was entered into at the time he became Chief Executive Officer. The employment agreement is for a two year initial term (renewing daily) and provides for a base salary that is to be reviewed annually, with the amount of such base salary not to decrease from the rate then in effect without Mr. Holzgrefe’s consent. The agreement also provides that Mr. Holzgrefe is to participate in the Company’s annual bonus plan, long-term incentive award plan and other benefits that are or may become available to senior executives of Saia. Mr. Holzgrefe’s agreement includes non-competition and customer and employee non-solicitation provisions that continue during the term of Mr. Holzgrefe’s employment and until two years after the date he ceases to be employed by the Company. The agreement also includes provisions designed to protect the intellectual property of Saia. See “Potential Payments Upon Termination or Change in Control — Employment Agreement — Frederick J. Holzgrefe, III” for additional information concerning benefits available upon termination of employment or a change in control.
Stock Awards
Stock Awards are comprised of performance stock units and restricted stock. Participants receiving performance stock units are eligible to receive shares of common stockValuation is based on the total stockholder return of Saia comparedaggregate grant date fair value computed in accordance with FASB ASC Topic 718. See Note 8 to the total stockholder return of a peer group of companies over a three-year performance period. The number of shares of common stock that can be received ranges from zero to 200% ofConsolidated Financial Statements in the target shares. Shares of restricted stock typically vest over three to five years. Stock AwardAnnual Report on Form 10-K for Mr. Norwood also includes a grant of 1,830 shares of restricted stock made in November 2022 based on his performance since joining the Company and to provide an additional retention incentive. See “Grants of Plan-Based Awards” for information regarding performance stock units and restricted stock granted in 2022. See “Compensation Discussion and Analysis” for more information concerning performance stock units and restricted stock. See “Potential Payments Upon Termination or Change in Control” for information concerning benefits available upon termination of employment or a change in control.
Option Awards
The exercise price of stock options is the last sale price of Saia stock on Nasdaq on the grant date. Options vest one-third each year on the anniversary of the grant date and expire seven years after their grant date. See “Grants of Plan-Based Awards” for information on stock options granted in 2022. See “Compensation Discussion and Analysis” for more information on the stock option component of our long-term equity incentive plan. See “Potential Payments Upon Termination or Change in Control” for additional information that could affect the vesting and other terms of the stock options.
Non-Equity Incentive Plan Compensation
Amounts shown in this column represent amounts earned under the Company’s annual cash incentive plan. The plan provides for cash payments to participants based 50% on achieving the Company’s annual operating income target for the year and 50% on achieving the Company’s operating ratio target for the year. See “Compensation Discussion and Analysis” for more information concerning the annual cash incentive plan.
Grants of Plan-Based Awards
The following table sets forth the detail of grants of plan-based awards to Saia’s Named Executive Officers for services rendered in all capacities during the fiscal year ended December 31, 2022.2023 for valuation assumptions used. At maximum performance levels for the performance stock units, these values for Mr. Holzgrefe would be: 2023: $4,036,052; 2022: $2,651,774; 2021: $2,931,469; for Mr. Col would be: 2023: $1,276,623; 2022: $808,445; 2021: $839,764; for Mr. Ramu would be: 2023: $1,688,132; 2022: $1,001,823; 2021: $951,086; for Mr. Sugar would be: 2023: $1,453,597; 2022: $668,090; 2021: $512,650; and for Mr. Lal would be: 2023: $437,282; 2022: $280,086; 2021: $344,241.
(2) |
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(3) | All other compensation amounts received by each Named Executive Officer for 2023 are set forth below: |
Name | Perquisites & Other Personal Benefits | Car Allowance | Company Contributions to Defined Contribution Plans (401(k)) | Company Contributions to Defined Contribution Plans (Def. Comp.) | Life Insurance Premiums | |||||
Frederick J. Holzgrefe, III | 11,039 | 8,706 | 9,900 | 126,147 | 4,902 | |||||
Douglas L. Col | 7,240 | 8,644 | 9,900 | 54,555 | 2,322 | |||||
Raymond R. Ramu | 6,281 | 6,945 | 11,362 | 61,278 | 2,322 | |||||
Patrick D. Sugar | 8,057 | 9,012 | 9,900 | 41,400 | 486 | |||||
Rohit Lal | 15,189 | 8,782 | 9,900 | 35,103 | 3,564 | |||||
(a) Payment of club dues, fuel and tax preparation reimbursements. |
40 | SAIA, INC. | 2024 Proxy Statement |
SUMMARY COMPENSATION TABLE
Summary Compensation Table Narrative
Employment Agreement
The Company is a party to an employment agreement with Mr. Holzgrefe, dated April 28, 2020, that was entered into at the time he became Chief Executive Officer. The employment agreement is for a two-year initial term (renewing daily) and provides for a base salary that is to be reviewed annually, with the amount of such base salary not to decrease from the rate then in effect without Mr. Holzgrefe’s consent. The agreement also provides that Mr. Holzgrefe is to participate in the Company’s annual bonus plan, long-term incentive award plan and other benefits that are or may become available to senior executives of Saia. Mr. Holzgrefe’s agreement includes non-competition and customer and employee non-solicitation provisions that continue during the term of Mr. Holzgrefe’s employment and until two years after the date he ceases to be employed by the Company. The agreement also includes provisions designed to protect the intellectual property of Saia. See “Potential Payments Upon Termination or Change in Control — Employment Agreement — Frederick J. Holzgrefe, III” for additional information concerning benefits available upon termination of employment or a change in control.
Stock Awards
Stock Awards are comprised of performance stock units and restricted stock. Participants receiving performance stock units are eligible to receive shares of common stock based on the total stockholder return of Saia compared to the total stockholder return of a peer group of companies over a three-year performance period. The number of shares of common stock that can be received ranges from zero to 200% of the target shares. Shares of restricted stock typically vest over three to five years. See “Grants of Plan-Based Awards” for information regarding performance stock units and restricted stock granted in 2023. See “Compensation Discussion and Analysis” for more information concerning performance stock units and restricted stock. See “Potential Payments Upon Termination or Change in Control” for information concerning benefits available upon termination of employment or a change in control.
Option Awards
The exercise price of stock options is the last sale price of Saia stock on Nasdaq on the grant date. Options vest one-third each year on the anniversary of the grant date and expire seven years after their grant date. There were no stock options granted in 2023. See “Potential Payments Upon Termination or Change in Control” for additional information that could affect the vesting and other terms of the stock options.
Non-Equity Incentive Plan Compensation
Amounts shown in this column represent amounts earned under the Company’s annual cash incentive plan. The plan provides for cash payments to participants based 50% on achieving the Company’s annual operating income target for the year and 50% on achieving the Company’s operating ratio target for the year. See “Compensation Discussion and Analysis” for more information concerning the annual cash incentive plan.
Estimated Possible Payouts Under Non-Equity Incentive Plan Awards | Estimated Future Payouts Under Equity Incentive Plan Awards | All Other Stock Awards: Number of Shares of Stock or Units(2) (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($)(3) | |||||||||||||||||||||||||||||||||||||||||||
Name | Grant Type(1) | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | ||||||||||||||||||||||||||||||||||||||||
Frederick J. Holzgrefe, III | ACI | 1/31/22 | 218,750 | 875,000 | 1,750,000 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
SO | 2/7/22 | — | — | — | — | — | — | — | 5,070 | 277.86 | 477,691 | |||||||||||||||||||||||||||||||||||||
PSU | 2/7/22 | — | — | — | 1,063 | 4,251 | 8,502 | — | — | — | 1,325,887 | |||||||||||||||||||||||||||||||||||||
RS | 2/7/22 | — | — | — | — | — | — | 2,126 | — | — | 590,730 | |||||||||||||||||||||||||||||||||||||
Douglas L. Col | ACI | 1/31/22 | 84,000 | 336,000 | 672,000 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
SO | 2/7/22 | — | — | — | — | — | — | — | 1,550 | 277.86 | 146,040 | |||||||||||||||||||||||||||||||||||||
PSU | 2/7/22 | — | — | — | 324 | 1,296 | 2,592 | — | — | — | 404,222 | |||||||||||||||||||||||||||||||||||||
RS | 2/7/22 | — | — | — | — | — | — | 648 | — | — | 180,053 | |||||||||||||||||||||||||||||||||||||
Raymond R. Ramu | ACI | 1/31/22 | 95,625 | 382,500 | 765,000 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
SO | 2/7/22 | — | — | — | — | — | — | — | 1,920 | 277.86 | 180,901 | |||||||||||||||||||||||||||||||||||||
PSU | 2/7/22 | — | — | — | 402 | 1,606 | 3,212 | — | — | — | 500,911 | |||||||||||||||||||||||||||||||||||||
RS | 2/7/22 | — | — | — | — | — | — | 803 | — | — | 223,122 | |||||||||||||||||||||||||||||||||||||
Patrick D. Sugar | ACI | 1/31/22 | 74,378 | 297,511 | 595,022 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
SO | 2/7/22 | — | — | — | — | — | — | — | 1,280 | 277.86 | 120,601 | |||||||||||||||||||||||||||||||||||||
PSU | 2/7/22 | — | — | — | 268 | 1,071 | 2,142 | — | — | — | 334,045 | |||||||||||||||||||||||||||||||||||||
RS | 2/7/22 | — | — | — | — | — | — | 535 | — | — | 148,655 | |||||||||||||||||||||||||||||||||||||
Anthony R. Norwood | ACI | 1/31/22 | 38,000 | 152,090 | 304,200 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
SO | 3/2/22 | — | — | — | — | — | — | — | 530 | 287.79 | 52,030 | |||||||||||||||||||||||||||||||||||||
PSU | 3/2/22 | — | — | — | 111 | 444 | 888 | — | — | — | 143,434 | |||||||||||||||||||||||||||||||||||||
RS | 3/2/22 | — | — | — | — | — | — | 222 | — | — | 63,889 | |||||||||||||||||||||||||||||||||||||
RS | 11/2/22 | — | — | — | — | — | — | 1,830 | — | — | 364,957 |
2024 Proxy Statement | SAIA, INC. | 41 |
Grants of Plan-Based Awards
The following table sets forth the detail of grants of plan-based awards to Saia’s Named Executive Officers for services rendered in all capacities during the fiscal year ended December 31, 2023.
2023 GRANTS OF PLAN-BASED AWARDS TABLE
Estimated Possible Payouts Under Non-Equity Incentive Plan Awards | Estimated Future Payouts Under Equity Incentive Plan Awards | All Other Stock Awards: Number of Shares of Stock or Units(2) (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($)(3) | |||||||||||||||||||||||||||||||
Name | Grant Type(1) | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | ||||||||||||||||||||||||||||
Frederick J. Holzgrefe, III | ACI | 1/31/23 | 250,250 | 1,001,000 | 2,002,000 | — | — | — | — | — | — | — | ||||||||||||||||||||||||
PSU | 2/8/23 | — | — | — | 1,175 | 4,698 | 9,396 | — | — | — | 2,018,026 | |||||||||||||||||||||||||
RS | 2/8/23 | — | — | — | — | — | — | 4,698 | — | — | 1,364,863 | |||||||||||||||||||||||||
Douglas L. Col | ACI | 1/31/23 | 104,624 | 418,496 | 836,992 | — | — | — | — | — | — | — | ||||||||||||||||||||||||
PSU | 2/8/23 | — | — | — | 372 | 1,486 | 2,972 | — | — | — | 638,311 | |||||||||||||||||||||||||
RS | 2/8/23 | — | — | — | — | — | — | 1,486 | — | — | 431,713 | |||||||||||||||||||||||||
Raymond R. Ramu | ACI | 1/31/23 | 114,192 | 456,768 | 913,536 | — | — | — | — | — | — | — | ||||||||||||||||||||||||
PSU | 2/8/23 | — | — | — | 491 | 1,965 | 3,930 | — | — | — | 844,066 | |||||||||||||||||||||||||
RS | 2/8/23 | — | — | — | — | — | — | 1,965 | — | — | 570,872 | |||||||||||||||||||||||||
Patrick D. Sugar | ACI | 1/31/23 | 98,315 | 393,258 | 786,517 | — | — | — | — | — | — | — | ||||||||||||||||||||||||
PSU | 2/8/23 | — | — | — | 423 | 1,692 | 3,384 | — | — | — | 726,799 | |||||||||||||||||||||||||
RS | 2/8/23 | — | — | — | — | — | — | 1,692 | — | — | 491,560 | |||||||||||||||||||||||||
Rohit Lal | ACI | 1/31/23 | 49,270 | 197,080 | 394,160 | — | — | — | — | — | — | — | ||||||||||||||||||||||||
PSU | 2/8/23 | — | — | — | 127 | 509 | 1,018 | — | — | — | 218,641 | |||||||||||||||||||||||||
RS | 2/8/23 | — | — | — | — | — | — | 509 | — | — | 147,875 |
(1) | Type of Awards |
ACI: Annual Cash Incentive
PSU: Performance Stock Unit
RS: Restricted Stock
SO: Stock Option
Annual Cash Incentive awards were granted under the Saia, Inc. Annual Cash Bonus Plan. All other awards were granted under the Second Amended and Restated Saia, Inc. 2018 Omnibus Incentive Plan. See the Summary Compensation Table Narrative for additional information on these types of awards.
(2) | Shares of restricted stock granted on February 8, 2023 vest one-third on February 8, 2024, one-third on February 8, 2025 and one-third on February 8, 2026. |
(3) | Valuation is based on aggregate grant date fair value computed in accordance with FASB ASC Topic 718. See Note 8 to the Consolidated Financial Statements in the Annual Report on Form 10-K for the year ended December 31, 2023 for valuation assumptions used. |
42 | SAIA, INC. | 2024 Proxy Statement |
GRANTS OF PLAN-BASED AWARDS
Grants of Plan-Based Awards Table Narrative
Estimated Possible Payouts Under Non-Equity Incentive Plan Awards
Amounts shown in this column represent grants under the Company’s annual cash incentive plan. The plan provides for cash payments to participants based 50% on achieving the Company’s annual operating income target for the year and 50% on achieving the Company’s operating ratio target for the year. See “Compensation Discussion and Analysis” for more information concerning the annual cash incentive plan.
Estimated Future Payouts Under Equity Incentive Plan Awards
Amounts shown in this column represent grants of performance stock units. Participants receiving performance stock units are eligible to receive shares of common stock based on the total stockholder return of Saia compared to the total stockholder return of a peer group of companies over a three-year performance period, ending December 31, 2025. Shares of stock to the extent earned will be paid in February 2026. See “Compensation Discussion and Analysis” for more information on the performance stock unit component of our long-term equity incentive plan. See “Potential Payments Upon Termination or Change in Control” for information concerning benefits available upon termination of employment or a change in control.
All Other Stock Awards
Amounts shown in this column represent grants of shares of restricted stock. See “Compensation Discussion and Analysis” for information on the restricted stock component of our long-term equity incentive plan and use of restricted stock for executive recruitment and retention and upon executive promotion. Also see “Potential Payments Upon Termination or Change in Control” for information concerning vesting upon termination of employment or a change in control.
2024 Proxy Statement | SAIA, INC. | 43 |
Outstanding Equity Awards
The following table sets forth information regarding unexercised performance stock units and restricted stock held by the Named Executive Officers at December 31, 2023.
OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2023
Option Awards | Stock Awards | ||||||||||||||||||||||||||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable(1) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock that Have Not Vested (#) | Market Value of Shares or Units of Stock that Have Not Vested ($)(7) | Equity Incentive Plan Awards: Number of Unearned Shares, Units, or Other Rights that Have Not Vested (#)(8) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units, or Other Rights that Have Not Vested ($)(7)(8) | ||||||||||||||||||||||||||||||||||||
Frederick J. Holzgrefe, III | — | 2,154 | — | 200.81 | 2/11/28 | 9,392 | (2) | 4,115,762 | 28,168 | 12,343,781 | |||||||||||||||||||||||||||||||||||
— | 3,380 | — | 277.86 | 2/7/29 | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Douglas L. Col | — | 617 | — | 200.81 | 2/11/28 | 6,009 | (3) | 2,633,264 | 8,506 | 3,727,499 | |||||||||||||||||||||||||||||||||||
— | 1,034 | — | 277.86 | 2/7/29 | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Raymond R. Ramu | — | 700 | — | 200.81 | 2/11/28 | 3,601 | (4) | 1,578,030 | 10,474 | 4,589,916 | |||||||||||||||||||||||||||||||||||
— | 1,280 | — | 277.86 | 2/7/29 | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Patrick D. Sugar | — | 377 | — | 200.81 | 2/11/28 | 4,630 | (5) | 2,028,959 | 7,322 | 3,208,647 | |||||||||||||||||||||||||||||||||||
— | 854 | — | 277.86 | 2/7/29 | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Rohit Lal | 1,440 | — | — | 73.35 | 2/6/25 | 1,035 | (6) | 453,558 | 3,122 | 1,368,123 | |||||||||||||||||||||||||||||||||||
1,790 | — | — | 66.03 | 2/7/26 | — | — | — | — | |||||||||||||||||||||||||||||||||||||
1,480 | — | — | 100.20 | 2/6/27 | — | — | — | — | |||||||||||||||||||||||||||||||||||||
506 | 254 | — | 200.81 | 2/11/28 | — | — | — | — | |||||||||||||||||||||||||||||||||||||
180 | 360 | — | 277.86 | 2/7/29 | — | — | — | — |
All options were issued under the Saia, Inc. Second Amended and Restated 2011 Omnibus Incentive Plan or the Saia, Inc. 2018 Omnibus Incentive Plan. See also “Potential Payouts Upon Termination or Change in Control” for additional information that could affect the vesting of these awards.
(1) | One-third of options vests each year on the anniversary of the grant date. |
(2) | Mr. Holzgrefe’s restricted stock awards will vest as follows: 1,566 on 2/8/2024; 2,568 shares on 2/11/2024; 2,126 shares on 2/7/2025; 1,566 on 2/8/2025; and 1,566 shares on 2/8/2026. |
(3) | Mr. Col’s restricted stock awards will vest as follows: 495 on 2/8/2024; 736 shares on 2/11/2024; 1,046 shares on 7/31/2024; 648 shares on 2/7/2025; 495 shares on 2/8/2025; 2,093 shares on 7/31/2025; and 496 shares on 2/8/2026. |
(4) | Mr. Ramu’s restricted stock awards will vest as follows: 655 shares on 2/8/2024; 833 shares on 2/11/2024; 803 shares on 2/7/2025; 655 shares on 2/8/2025; and 655 shares on 2/8/2026. |
(5) | Mr. Sugar’s restricted stock awards will vest as follows: 564 shares on 2/8/2024; 449 shares on 2/11/2024; 228 shares on 3/9/2024; 1,040 shares on 11/4/2024; 535 shares on 2/7/2025; 564 shares on 2/8/2025; 228 shares on 3/9/2025; 564 shares on 2/8/2026; and 458 shares on 3/9/2026. |
(6) | Mr. Lal’s restricted stock awards will vest as follows: 169 shares on 2/8/2024; 302 shares on 2/11/2024; 224 shares on 2/7/2025; 170 shares on 2/8/2025; and 170 shares on 2/8/2026. |
(7) | Value is based on the closing price of Saia stock of $438.22 on December 31, 2023, as reported on Nasdaq. |
(8) | Reflects the maximum payout opportunity for the 2021 – 2023, 2022 – 2024 and 2023 – 2025 performance periods under the performance stock unit portion of our long-term equity incentive plan. The maximum payout opportunity for the 2021 – 2023 performance period (10,270 units for Mr. Holzgrefe; 2,942 units for Mr. Col; 3,332 units for Mr. Ramu; 1,796 units for Mr. Sugar; and 1,206 units for Mr. Lal), if earned, vest on December 31, 2023. The maximum payout opportunity for the 2022 – 2024 performance period (8,502 units for Mr. Holzgrefe; 2,592 units for Mr. Col; 3,212 units for Mr. Ramu; 2,142 units for Mr. Sugar; and 898 units for Mr. Lal), if earned, will vest on December 31, 2024. The maximum payout opportunity for the 2023 – 2025 performance period (9,396 units for Mr. Holzgrefe; 2,972 units for Mr. Col; 3,930 units for Mr. Ramu; 3,384 units for Mr. Sugar; and 1,018 units for Mr. Lal), if earned, will vest on December 31, 2025. See the Summary Compensation Table Narrative for additional information on |
44 | SAIA, INC. | 2024 Proxy Statement |
2023 Option Exercises and Stock Vested
The following table sets forth information regarding the number and value of stock options exercised and stock awards vested during 2023 for the Named Executive Officers.
Amounts shown in this column represent
Non-Qualified Deferred Compensation The following table sets forth information regarding the executive and Company contributions to the Capital Accumulation Plan, as well as investment earnings on the Capital Accumulation Plan for the Named Executive Officers in 2023. 2023 NON-QUALIFIED DEFERRED COMPENSATION TABLE(1)
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
Payments Upon Termination for Cause or without Good Reason Upon a termination for cause or a termination by Mr. Holzgrefe without Good Reason, Mr. Holzgrefe is entitled to receive base salary and benefits accrued through the termination date. Change in Control Agreements Each of the Named Executive Officers is party to a “double trigger” change in control agreement. Under these agreements the executive will receive compensation as described below in the event of a “change in control” of the Company followed within two years by (i) the termination by Saia of the executive’s employment for any reason other than death, disability, retirement or “cause” or (ii) the resignation of the executive due to an adverse change in title, authority or duties, a transfer to a new location more than 50 miles from the location where the executive was employed immediately prior to the change in control, a reduction in salary, or a reduction in fringe benefits or annual bonus below a level consistent with Saia’s practice prior to the change in control. In the event of a qualifying payment event: (i) the executive will receive on the first day of the seventh month following the executive’s last day of employment a lump sum cash payment equal to two times (three times in the case of Mr. Holzgrefe) the highest base salary and annual cash bonuses paid or payable in any consecutive 12 month period during the three years prior to termination; and (ii) for two years following the executive’s employment termination (three years in the case of Mr. Holzgrefe), the executive is deemed to remain an employee of the Company for purposes of applicable medical, life insurance and long-term disability plans and programs covering key executives of the Company and shall be entitled to receive the benefits available to key employees thereunder. If the executive’s participation under any such program is barred, the Company is required to arrange to provide the executive with substantially similar benefits. In the event of a change in control, all outstanding stock options held by the executive immediately vest and remain exercisable for one year following the change in control (two years in the case of Mr. Holzgrefe). For the purpose of the change in control agreements, a “change in control” will be deemed to have taken place if: (i) a third person, including a “group” as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, purchases or otherwise acquires shares of Saia and as a result thereof becomes the beneficial owner of shares of Saia having 20% or more of the total number of votes that may be cast for the election of directors of Saia; or (ii) as the result of, or in connection with any cash tender or exchange offer, merger or other business combination, or contested election, or any combination of the foregoing transactions, the directors then serving on the Board of Directors cease to constitute a majority of the Board of Directors of Saia or any successor to Saia. Severance Agreements The Company entered into severance agreements with each Named Executive Officer (other than Mr. Holzgrefe, whose severance benefits are covered in his employment agreement) in connection with the agreement by such executives to become subject to noncompetition, employee and customer non-solicitation restrictions and provisions to protect the Company’s intellectual property. These severance agreements provide that if the Named Executive Officer is terminated by the Company without cause, the Named Executive Officer will receive severance payments equal to 12 months of base salary, subject to satisfaction of certain conditions, including execution of a release of claims in favor of the Company and compliance with the employee’s restrictive covenant obligations. In the event the executive breaches any agreement with the Company, all severance obligations will cease and the Named Executive Officer is obligated to repay the Company the amount of any severance payments made. The severance agreements provide that if a Named Executive Officer becomes entitled to receive severance under both the severance agreement and his or her change in control agreement, the Named Executive Officer shall be paid severance under the change in control agreement only. Annual Cash Incentive Plan Each of the Named Executive Officers participates in the annual cash incentive plan. Upon termination of the employment of a Named Executive Officer for any reason prior to the payment date under the plan, the executive forfeits the award, except Mr. Holzgrefe would be entitled to a prorated target bonus to the date of termination, unless such termination is for cause, in which case the award is forfeited. See “Summary Compensation Table Narrative — Non-Equity Incentive Plan Compensation.”
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL Performance Stock Unit Award Agreements Each of the Named Executive Officers is subject to one or more performance stock unit award agreements. See the “Long-Term Equity Incentives — Performance Stock Units” subsection of the “Compensation Discussion and Analysis” section for additional information on how payouts of the performance stock units are calculated. Under these agreements, upon involuntary termination other than for “cause” or termination due to death, total disability or retirement, the executive is entitled to receive a pro rata portion of his or her performance stock unit award if he or she had been employed for at least 50% of the performance period of the agreement, otherwise the award is forfeited. Upon voluntary termination, the executive forfeits the award, except to the extent that the performance period of the agreement has expired before the executive’s voluntary termination, in which case the executive is entitled to payment of the award. Upon termination for cause, the executive forfeits the award regardless of whether the performance period has expired. For purposes of the performance stock unit award agreements, “cause” means gross negligence or gross neglect of duties, commission of a felony or significant misdemeanor involving moral turpitude; or fraud, disloyalty, dishonesty or willful violation of any law or Company policy resulting in an adverse effect on the Company. Under the performance stock unit award agreements, upon a “change in control,” as that term is defined in the 2018 Omnibus Incentive Plan (the “Omnibus Incentive Plan”), the executives would receive the percentage of the target incentive based on total stockholder return calculated as of the date of such change in control, prorated to reflect the actual number of months of service from the date of the grant of the performance stock unit to the date of the change in control. Any performance stock units that an executive is entitled to receive upon a change in control will be paid out in a lump sum concurrently with the change in control. Under the Omnibus Incentive Plan, a “change in control” is generally defined to mean: (i) during any 12-month period any person, including a “group” as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, becomes the beneficial owner of 30% or more of the outstanding shares of Saia common stock, subject to certain exceptions; (ii) during any 12-month period the individuals who, as of the beginning of such period, constitute the Board cease to constitute at least a majority of the Board, subject to certain exceptions; or (iii) the consummation of a merger, consolidation or sale of substantially all the assets of the Company, unless following such transaction the holders of Saia common stock prior to the transaction continue to own 50% or more of the outstanding stock of the resulting corporation, no person becomes the beneficial owner of 30% or more of the outstanding stock of the resulting corporation by reason of such transaction and at least a majority of the members of the board of the corporation resulting from the transaction were members of the Board of Saia prior to the transaction. Stock Option Agreements Each of the Named Executive Officers is subject to one or more non-qualified stock option agreements. See “Summary Compensation Table Narrative — Option Awards”. Under these agreements, in the event of a “change in control” of the Company, as defined in the Omnibus Incentive Plan, any unvested options immediately vest and remain outstanding in accordance with their terms. In addition, the Compensation and Human Capital Committee has the discretion to cancel the outstanding options at the time of the change in control in which case a payment of cash, property or combination thereof would be made to the Named Executive Officer that is determined by the Compensation and Human Capital Committee to be equivalent in value to the consideration to be paid per share of Company common stock in the change in control transaction, less the exercise price of the option and multiplied by the number of outstanding options. If the employment of a Named Executive Officer is terminated by the Company without cause or voluntarily by the executive, then any option then vested remains exercisable for 90 days following termination, but not beyond the expiration date of the option, and all unvested options terminate. If a Named Executive Officer’s employment is terminated for cause, then all options automatically terminate upon the termination date. Upon the retirement after age 55 (the determination of retirement is made by the Compensation and Human Capital Committee) of a Named Executive Officer, the Compensation and Human Capital Committee has the discretion to cancel or vest any unvested options then outstanding and all vested options remain exercisable for 180 days after such retirement or until the expiration date of the option, whichever is first. In the event of a termination of the Named Executive Officer’s employment by reason of death or disability, the option automatically vests and may be exercised for 180 days after the Named Executive Officer’s death or disability or until the expiration date of the option, whichever is first. The vesting of Mr. Holzgrefe’s stock options in certain circumstances is described above under “Employment Agreement — Frederick J. Holzgrefe, III.”
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL Restricted Stock Award Agreements Each of the Named Executive Officers is subject to one or more restricted stock award agreements. See “Compensation Discussion and Analysis — Long-Term Equity Incentives — Restricted Stock Awards.” For restricted stock awards made prior to 2024, in the event of the death, disability or retirement of the executive more than one year after the grant date and prior to the vesting date, a pro rata portion of the award vests and the remainder of the award is forfeited. For restricted stock awards made in 2024, in the event of the death, disability or retirement of the executive more than one year after the grant date and prior to the vesting date, any unvested awards become immediately vested. In the event of an employment termination for any other reason, all unvested shares under the award agreement are forfeited except certain restricted stock held by Mr. Holzgrefe will vest upon termination by the Company without cause or for Good Reason as described above under “Employment Agreement — Frederick J. Holzgrefe, III.” Upon a “change in control” of Saia, as defined in the Omnibus Incentive Plan, all unvested shares under the award agreements automatically vest. The restricted stock agreements for awards granted to the Named Executive Officers (other than the Chief Executive Officer) contain restrictive covenants that are intended to protect the Company’s confidential information and intellectual property and prohibit the award recipient from working for the Company’s LTL competitors in the United States until one year following such Named Executive Officer’s termination. The restricted stock agreements also prohibit the award recipient from soliciting the Company’s customers on behalf of competitors or from soliciting for hire the Company’s employees or independent contractors until two years following such Named Executive Officer’s termination. Saia has the option to extend the non-compete period for one additional year upon payment to the Named Executive Officer of an additional year of base salary. Mr. Holzgrefe is subject to restrictive covenants under his employment agreement rather than his restricted stock agreements that continue for a period of two years following his employment termination. Deferred Compensation The Named Executive Officers are entitled to receive the amount in the Capital Accumulation Plan, including the vested portion of any Company contributions, in the event of termination of the executive’s employment other than due to cause. Termination for cause results in a forfeiture of the employer portion of deferred compensation (whether vested or unvested) under the Capital Accumulation Plan. The Company contributes five percent annually to the Capital Accumulation Plan for all participants, which contribution vests over a 5-year period. See “Compensation Discussion and Analysis — Other Benefits and Perquisites — Deferred Compensation Plan.” Life Insurance Benefits Mr. Holzgrefe has a $1 million term life insurance policy and each other Named Executive Officer has a $500,000 policy. If the Named Executive Officers had died on December 31, 2023, the survivors of Mr. Holzgrefe would have received $1,000,000 and the survivors of the other Named Executive Officers would have received $500,000 each, under these policies.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL Tabular Disclosure Except as otherwise indicated, the amounts shown in the tables below assume that a Named Executive Officer was terminated and, as applicable, a change in control occurred as of December 31, 2023, and that the price of our common stock equals $438.22 which was the closing price on Nasdaq on December 29, 2023 (the last business day of the year). Actual amounts that we may pay to any Named Executive Officer upon termination of employment, however, can only be determined at the time of such Named Executive Officer’s actual separation from Saia.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
Footnotes for Tabular Disclosure
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