Corporate Governance
The retirement of the two directors to our Board.
Mr. Stephen F. Ralbovsky was appointed as a Class II director (standing for election in 2018), filling a vacancy created by the death of John H. Bowles. Mr. Ralbovsky is a certified public accountant and was a partner with PricewaterhouseCoopers, LLP from February 1987 until his retirement in June 2014. He has over 36 years’ experience in taxation, auditing and accounting, where he specialized2022 caused an imbalance in the mining industry. The Corporate Governance and Directors’ Nominating Committee and Board determined that Mr. Ralbovsky was independent under the New York Stock Exchange listing standards. The Board also appointed Mr. Ralbovsky to servenumber of directors on the Audit CommitteeBoard’s three classes of directors. The Company’s Bylaws and the Corporate Governance and Directors’ Nominating Committee.
Mr. George R. Johnson was appointed as a Class I director (standing for election in 2017), to fill a resulting vacancy when the Board increased the size of the Board from six to eight directors. Mr. Johnson is a mining engineer and most recently served as Senior Vice President of Operations at B2Gold Corporation from August 2009 until his retirement in May 2015. Mr. Johnson also held many positions with Hecla in the early 1980’s through 1999 and is very familiar with the Company’s operations. He has over 45 years of foreign and domestic experience in underground and open-pit mine construction and operations management. The Corporate Governance and Directors’ Nominating Committee and Board determined that Mr. Johnson was independent under the New York Stock Exchange listing standards. The Board also appointed Mr. Johnson to serve on the Audit Committee and the Health, Safety, Environmental and Technical Committee.
| 125 Years |
| | 2016 Proxy Statement9 |
Table of Contents
PROPOSAL 1 – ELECTION OF DIRECTORS |
PROPOSAL 1 – ELECTION OF DIRECTORS
In accordance with ourRestated Certificate of Incorporation provide that the Board is divided into three classes. The termsnumber of office of the directors in each class expire at different times. There are three directors whose terms will expire at the 2016 Annual Meeting: Ted Crumley, Terry V. Rogers and Charles B. Stanley.
At a meeting held by the Corporate Governance and Directors’ Nominating Committee in February 2016, the committee determined that the three directors whose terms are expiring - Messrs. Crumley, Rogers and Stanley - were qualified candidates to stand for re-election at the Annual Meeting, and the Board designated Messrs. Crumley, Rogers and Stanley as nominees for re-election as directors of the Company, each for a three-year term expiring in 2019. Each nominee has accepted the nomination and agreed to serve as a director if elected by the Company’s shareholders.
It is intended that the proxies solicited hereby from our shareholders that do not provide voting instructions will be votedFOR the election of Ted Crumley, Terry V. Rogers and Charles B. Stanley. The Board knows of no reason why the nominees will be unable or unwilling to accept election. However, if any nominee becomes unable or is unwilling to accept election, the Board will either reduce the number of directors shall be as nearly equal in number as possible. In order to be elected or select substitute nominees submitted bymaintain balance among the Corporate Governance and Directors’ Nominating Committee. If substitute nominees are selected, proxies that do not provide voting instructions will be voted in favor of such nominees.
Director Qualifications and Biographical Information
Set forth below is biographical informationclasses, Ms. Wong stood for each of the director nominees, including the key qualifications, experience, attributes, and skills that led our Board to the conclusion that each of the director nominees should serve as a director. There are no family relationships among any of our directors or executive officers.
Our Board includes individuals with strong backgrounds in executive leadership and management, accounting and finance, and Company and industry knowledge, and we believe that, as a group, they work effectively together in overseeing our business.
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PROPOSAL 1 – ELECTION OF DIRECTORS |
Current Nominees for Election to the Board – Term Endingelection at the 2016 Annual Meeting |
If elected, the nominees will each serve for a three-year term ending in 2019. The nominees are as follows:
| | | | |
|  | | Ted Crumley
Former Executive Vice President and
Chief Financial Officer
OfficeMax Incorporated
Director since:1995
Board Chairman since 2006
Age:71
Other Directorships:
None
Hecla Committees:
| |
| | ● | Executive
| |
| | | ● | Compensation
| |
Mr. Crumley served as Executive Vice President and Chief Financial Officer of OfficeMax Incorporated, a distributor of office products, from January 2005 until his retirement in December 2005. He was also Senior Vice President of OfficeMax Incorporated from November 2004 to January 2005, and Senior Vice President and Chief Financial Officer of Boise Cascade Corporation, a manufacturer of paper and forest products, from 1994 to 2004.
Board Qualification and Skills:
High Level of Financial Experience: Substantial financial experience gained from a long career with OfficeMax Incorporated and Boise Cascade Corporation.
Senior Leadership/Executive Officer Experience: Has over 30 years’ experience in management, finance and accounting in the natural resources industry. Served in numerous senior leadership positions, including Executive Vice President and Chief Financial Officer of OfficeMax Incorporated and Senior Vice President and Chief Financial Officer of Boise Cascade Corporation.
Significant Public Company Board Experience: Over 20 years of service on Hecla’s Board, including as Chairman since 2006.
Extensive Knowledge of the Company’s Business and Industry: With over 20 years’ of service on Hecla’s Board, Mr. Crumley understands all aspects of our business, including the mining elements.
Designations: Mr. Crumley received his Bachelor of Business Administration with a major in Accounting from Idaho State University College of Business in 1969.
| | | | |
|  | | Terry V. Rogers, C. Dir., H.R.C.C.C.
Former Senior Vice President and Chief Operating Officer
Cameco Corporation
Director since:2007
Age: 69
Other Directorships:
Centerra Gold Inc.
Hecla Committees:
| |
| | ● | Health, Safety, Environmental and Technical (Chair)
| |
| | ● | Compensation
| |
| | ● | Audit
| |
| | | ● | Executive
| |
Mr. Rogers served as Senior Vice President and Chief Operating Officer of Cameco Corporation, a uranium producer, from February 2003 until his retirement in June 2007. He is a former President of Kumtor Operating Company, a gold producing company and a subsidiary of Cameco Corporation, where he served from 1999 to 2003 and has served on the Board of Directors of Centerra Gold Inc., a gold mining company, since February 2003.
Board Qualification and Skills:
High Level of Financial Experience: Financial experience gained from his senior leadership/executive officer experience with Cameco Corporation and Kumtor Operating Company.
Senior Leadership/Executive Officer Experience: Has experience in management in the mining industry. Served in numerous senior leadership positions, including Senior Vice President and Chief Operating Officer of Cameco Corporation, and former President of Kumtor Operating Company (a subsidiary of Cameco Corporation).
Significant Public Company Board Experience: In addition to serving on the Board of Hecla, has over 12 years of service on the Board of Centerra Gold Inc., including as independent lead director, chairman of the human resources and compensation committee, and a member of the audit committee.
Extensive Knowledge of the Company’s Business and Industry: Over 30 years’ experience in the mining industry, including, opencast, open-pit and underground operations in coal, gold, and uranium mines around the world.
Designations: Mr. Rogers received an Associate degree in Applied Science from the Superior Technical Institute in Wisconsin in 1972. He also obtained a Chartered Director (C. Dir.) designation from The Directors College in 2011, as well as a Human Resources and Compensation Committee Certified (H.R.C.C.C.) designation from The Directors College in 2013.
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| | 2016 Proxy Statement11 |
Table of Contents
PROPOSAL 1 – ELECTION OF DIRECTORS |
| | | | |
|  | | Charles B. Stanley
Chief Executive Officer, President and Chairman of the Board
QEP Resources, Inc.
Director since:2007
Age: 57
Other Directorships:
QEP Resources, Inc.
Hecla Committees:
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| | ● | Audit (Chair)
| |
| | ● | Health, Safety, Environmental and Technical
| |
| | | ● | Corporate Governance and Directors’ Nominating
| |
Mr. Stanley has been Chief Executive Officer and President of QEP Resources, Inc., an independent natural gas and oil exploration and production company, since May 2010. He was appointed Chairman of the Board of QEP Resources, Inc. in May 2012. He also served as Chairman, Chief Executive Officer, President and Director of QEP Midstream Partners, LP, a master limited partnership that owns, operates, acquires and develops midstream energy assets, from May 2013 to December 2014. He served as Chief Operating Officer of Questar Corporation, a Western U.S. natural gas-focused exploration and production, interstate pipeline and local distribution company, from March 2008 to June 2010; and Executive Vice President and Director of Questar Corporation from February 2002 to June 2010.
Board Qualification and Skills:
High Level of Financial Experience: Substantial financial experience gained from a long career with QEP Resources, Inc. and Questar Corporation.
Extensive Senior Leadership/Executive Officer Experience: In addition to his current position as Chief Executive Officer and President of QEP Resources, Mr. Stanley served in numerous other senior leadership positions, including Chief Executive Officer and President of QEP Midstream Partners, LP, and Chief Operating Officer of Questar Corporation.
Significant Public Company Board Experience: In addition to serving on the Board of Hecla, has served on the board of QEP Resources, Inc. the past 5 years and as Chairman of the Board since 2012. Prior to serving on QEP’s board, Mr. Stanley served on the board of Questar Corporation. He also serves on the boards of various natural gas industry trade organizations, including the American Exploration and Production Council and America’s Natural Gas Alliance.
Extensive Knowledge of the Company’s Business and Industry: Over 32 years’ experience in the international and domestic upstream and midstream oil and gas industry. He is a geologist with an extensive background in natural resources.
Designations: Mr. Stanley received a Bachelor of Science degree in Geology in 1981, as well as a Master of Science degree in Geology in 1983 from Virginia Tech.
 | The Board recommends that shareholders vote “FOR” the election of Ted Crumley, Terry V. Rogers and Charles B. Stanley
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PROPOSAL 1 – ELECTION OF DIRECTORS |
Our directors whose terms are not expiring this year follow. They will continue to serve as directors for the remainder of their terms or until their respective successors are appointed or elected.
Continuing Members of the Board – Term Ending at the 2017 Annual Meeting |
| | | | |
|  | | Phillips S. Baker, Jr.
President and Chief Executive Officer
Director since:2001
Age: 56
Other Directorships:
QEP Resources, Inc.
Hecla Committees:
| |
| | | ● | Executive (Chair)
| |
Mr. Baker has been our CEO since May 2003 and has served as our President since November 2001. He has served as a Director of QEP Resources, Inc., an independent natural gas and oil exploration and production company, since May 2010, as well as serving as a Director for Questar Corporation, a Western U.S. natural gas-focused exploration and production, interstate pipeline and local distribution company, from February 2004 through June 2010.
Board Qualification and Skills:
High Level of Financial Experience: Substantial financial experience gained in his roles of President, CEO, and previously as Chief Financial Officer and Chief Operating Officer of the Company.
Extensive Senior Leadership/Executive Officer Experience: In addition to serving as Hecla’s President and CEO, served as Chief Financial Officer and Chief Operating Officer. Has 18 years’ management experience in the mining industry.
Significant Public Company Board Experience: In addition to serving on the Board of Hecla, has served on the board of QEP Resources for 11 years. He serves as chair of the audit committee and as a member of the governance committee for QEP Resources, Inc.
Extensive Knowledge of the Company’s Business and Industry: Over 29 years’ experience in the mining industry.
Designations: Mr. Baker received a Bachelor of Business Administration in Accounting from Texas A & M University in 1981, and a law degree and Master of Business Administration from the University of Houston in 1985. He became a member of the State Bar of Texas in 1985, and received his Certified Public Accountant designation in 1986 from the Texas State Board of Public Accounting.
| | | | |
|  | | Dr. Anthony P. Taylor
President, Chief Executive Officer and Director
Selex Resources Ltd.
Director since:2002
Age: 74
Other Directorships:
Caughlin Preschool Co.
Hecla Committees:
| |
| | ● | Corporate Governance and Directors’ Nominating (Chair)
| |
| | ● | Health, Safety, Environmental and Technical
| |
| | | ● | Compensation
| |
Dr. Taylor has served as President, Chief Executive Officer and Director of Selex Resources Ltd., a private Ontario Corporation engaged in mineral exploration, since January 2012. Since October 2001, he has served as President and Director of Caughlin Preschool Co., a private Nevada corporation that operates a preschool, which he co-founded. He previously served as Executive Chairman of Crown Gold Corporation, a public Canadian minerals exploration company, from August 2010 to August 2012, after serving as Chief Executive Officer and Director of Gold Summit Corporation, a public Canadian minerals exploration company, from October 2003 to August 2010.
Board Qualification and Skills:
Extensive Knowledge of the Company’s Business and Industry: Over 51 years’ experience in the mining industry in all levels of exploration from a field geologist to senior management. Has extensive experience in lead, zinc, nickel, copper, diamond, gold and silver exploration from his work in Europe, Australia, South Africa, and North and South America.
Extensive Senior Leadership/Executive Officer Experience: Has extensive experience in management in the mining industry. Served in numerous senior leadership positions, including Executive Chairman of Crown Gold Corporation and Chief Executive Officer and Director of Gold Summit Corporation.
Significant Public Company Board Experience: Over 13 years of service on Hecla’s Board.
Designations: Dr. Taylor received his Bachelor of Science (with honors) in Geology from Durham University (U.K.) in 1964, and his Ph.D in Geology from Manchester University (U.K.) in 1974.
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| | 2016 Proxy Statement13 |
Table of Contents
PROPOSAL 1 – ELECTION OF DIRECTORS |
| | | | |
|  | | George R. Johnson
Former Senior Vice President of Operations
B2Gold Corporation
Director since:2016
Age: 67
Other Directorships:
None
Hecla Committees:
| |
| | | ● | Health, Safety, Environmental and Technical
| |
| | | ● | Audit
| |
Mr. Johnson served as Senior Vice President of Operations of B2Gold Corporation, a Canadian-based gold producing company, from August 2009 until his retirement in May 2015. He is a former Senior Vice President of Russian Operations of Kinross Gold Corporation, a senior gold mining company, from March 2007 to August 2009, and Senior Vice President of Operations of Bema Gold Corporation, a gold producing company, from October 1999 to March 2007.
Board Qualification and Skills:
Extensive Knowledge of the Company’s Business and Industry: Over 45 years of foreign and domestic experience in underground and open-pit mine construction and operations management. Served as Vice President – Metal Mining for Hecla from May 1996 to 1999 where he was responsible for performance of Hecla’s metals division, including mines operated by Hecla and joint ventures with other companies, exploration programs, business development, capital projects and corporate technical services. He held various other positions with Hecla from 1983 to 1990, including as general manager of Hecla’s Lucky Friday mine from July 1986 to February 1989; mine superintendent from November 1984 to June 1986, and development foreman from October 1983 to 1984.
Senior Leadership/Executive Officer Experience: Has extensive experience in management in the mining industry. Served in numerous senior leadership positions including Senior Vice President of Operations for B2Gold Corporation, Senior Vice President of Russian Operations for Kinross Gold Corporation, and Senior Vice President of Operations for Bema Gold Corporation.
Designations: Mr. Johnson received a Bachelor of Science with a major in Mining Engineering from the University of Washington in 1972.
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PROPOSAL 1 – ELECTION OF DIRECTORS |
Continuing Members of the Board – Term Ending at the 2018 Annual Meeting |
| | | | |
|  | | George R. Nethercutt, Jr.
Chairman of The George Nethercutt Foundation and Of Counsel for Lee & Hayes PLLC
Director since:2005
Age: 71
Other Directorships:
Washington Policy Center
ARCADIS Corporation
Juvenile Diabetes Research Foundation
International (Board of Chancellors)
Hecla Committees:
| |
| | ● | Compensation (Chair)
| |
| | | ● | Corporate Governance and Directors’ Nominating
| |
Mr. Nethercutt has served as Chairman of The George Nethercutt Foundation, a non-profit student leadership and civics education charity, since 2007, and was appointed Of Counsel for Lee & Hayes PLLC, a law firm, in September 2010. He has been a board member of Washington Policy Center, a public policy organization providing analysis on issues relating to the free market and government regulation, since January 2005; board member of ARCADIS Corporation, an international company providing consultancy, engineering and management services, since May 2005; and Board of Chancellors, Juvenile Diabetes Research Foundation International, a charity and advocate of juvenile diabetes research worldwide, since June 2011. He was a Principal of Nethercutt Consulting LLC, a strategic planning and consulting firm, from January 2007 to January 2012, and served as a member on the board of IP Street, a software company, from May 2011 to January 2015. He also served as U.S. Chairman of the Permanent Joint Board on Defense - U.S./Canada from April 2005 to December 2009; Member, U.S. House of Representatives from 1995 to 2005; Member, Subcommittee on Interior, Agriculture and Defense Appropriations from 1995 to 2005; Member, Committee on Science and Energy from 1998 to 2005; and Vice Chairman, Defense Subcommittee on Appropriations from 2000 to 2004.
Board Qualification and Skills:
Extensive Knowledge of the Company’s Business and Industry: Served as a U.S. Congressman and focused on natural resource policies, mining legislation and environmental policies on public lands.
Extensive Government Leadership Experience: Has extensive political background, including working as a staff member in the U.S. Senate in Washington, D.C., where he focused on issues relating to oil and gas, natural resources, mining and commerce. Served as chief of staff to a U.S. Senator from Alaska, working on such issues as agriculture, fisheries, timber and mining. He had his own consulting business which consisted of representing clients with mining and natural resource issues.
Significant Public Company Board Experience: Over 10 years of service on Hecla’s Board.
Designations: Mr. Nethercutt received his Bachelor of Arts in English from Washington State University in 1967, and a law degree from Gonzaga University Law School in 1971. He has been a member of the Washington State Bar Association since 1972.
| | | | |
|  | | Stephen F. Ralbovsky
Former Partner with PricewaterhouseCoopers LLP
Director since:2016
Age: 62
Other Directorships:
None
Hecla Committees:
| |
| | ● | Audit
| |
| | | ● | Corporate Governance and Directors’ Nominating
| |
Mr. Ralbovsky was a partner with PricewaterhouseCoopers LLP, an accounting firm, from February 1987 until his retirement in June 2014, where he concentrated his practice on public companies operating in the mining industry. He previously served on the Board and as Treasurer of the American Heart Association – Arizona Affiliate, a non-profit organization dedicated to fighting heart disease, from July 1991 to June 1995; Board member (and President for one year) of Southwest Human Development, a non-profit dedicated to early childhood development, from June 1990 to June 1996; and Advisory Board member of Diocese of Phoenix Catholic Cemeteries and Mortuaries, a non-profit organization, from July 2009 to July 2012. Mr. Ralbovsky is also a member of several organizations, including: AICPA, Arizona Society of CPAs, National Mining Association, and Society for Mining, Metallurgy and Exploration.
Board Qualification and Skills:
High Level of Financial Experience: Over 36 years’ experience in taxation, auditing and accounting.
Extensive Knowledge of the Company’s Business and Industry: Over 36 years’ experience in accounting, where he was heavily involved in the mining industry with emphasis in global mining tax and royalty policy.
Extensive Senior Leadership Experience: Has extensive experience in leadership in the accounting industry. Served in numerous senior leadership positions, including US Mining Leader, US Mining Tax Leader, Global Mining Tax Leader and Tax Partner for PricewaterhouseCoopers LLP.
Designations: Mr. Ralbovsky received a Bachelor of Business Administration with a major in Accounting from Siena College in 1975. He also received a law degree from Albany Law School in 1978. He is licensed in D.C. and Arizona as a Certified Public Accountant.
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| | 2016 Proxy Statement15 |
Table of Contents
COMPENSATION OF NON-MANAGEMENT DIRECTORS |
COMPENSATION OF NON-MANAGEMENT DIRECTORS
The Compensation Committee of the Board is responsible for recommending to the Board the form and amount of compensation for our non-management directors. The compensation program is designed to provide pay that is competitive with directors in the Company’s peer group, which is described on page 38 of this Proxy Statement in theCompensation Discussion and Analysis. It consists of a combination of cash retainers and equity awards.
The committee periodically engages its compensation consultant to review compensation of the Company’s Board compared to the Company’s peer group. The following discussion of compensation applies only to our non-management directors, and does not apply to Mr. Baker who, as an employee of the Company, is compensated as an executive officer and does not receive additional compensation for his service as a director.
2015 Compensation Changes for Non-Management Directors
As a result of its periodic review of Board compensation, in 2015, the Compensation Committee recommended and the Board approved an increase in the annual equity award under the 2010 Stock Incentive Plan from $61,000 to $76,000.
Cash Compensation
Each non-management director receives an annual cash retainer for his service on the Board in the amount of $66,000. The Chairman of the Board receives an additional annual cash retainer in the amount of $90,000. For service on Board committees or as chair of the committees: (i) each non-management member of the Audit and Compensation Committees receives an annual fee of $12,000; (ii) each non-management member of the Executive, Corporate Governance and Directors’ Nominating, and Health Safety, Environmental and Technical Committees receives an annual fee of $8,000; (iii) the committee chair for each of the Audit andCompensation Committees receives an additional annual fee of $12,000; and (iv) the committee chair for each of the Health, Safety, Environmental and Technical and Corporate Governance and Directors’ Nominating Committees receives an additional annual fee of $8,000.
All of the above annual fees are paid in quarterly installments. No other attendance fees are paid to the non-management directors. The non-management directors do not receive stock options, non-equity incentive plan compensation, or any other compensation, except as described below.
Equity Compensation
In March 1995, we adopted the Hecla Mining Company Stock Plan for Nonemployee Directors, which became effective following shareholder approval on May 5, 1995. The plan was amended July 18, 2002, February 25, 2004, May 6, 2005, December 10, 2007, and May 24, 2012. The plan terminates July 17, 2017, and is subject to termination by the Board at any time. Pursuant to the plan, on May 30 of each year, each non-management director is credited with a number of shares determined by dividing $24,000 by the average closing price for Hecla’s common stock on the New York Stock Exchange (“NYSE”) for the prior calendar year. Non-management directors joining the Board after May 30 of any year are credited with a pro rata number of shares based upon the date they join the Board. These shares are held in a grantor trust, the assets of which are subject to the claims of our creditors, until delivered under the terms of the plan. Delivery of the shares from the trust occurs upon the earliest of: (i) death or disability; (ii) retirement from the Board; (iii) a cessation of the director’sservice for any other reason; (iv) a change in control of the Company (as defined in the plan); or (v) at the election of the director at any time, provided, however, that shares must be held in the trust for at least two years prior to delivery. Subject to certain restrictions, directors may elect delivery of the shares on such date or in annual installments thereafter over 5, 10 or 15 years. The maximum number of shares of common stock which may be credited pursuant to the plan is 1,000,000. As of December 31, 2015, there were 506,921 shares remaining under the plan.
In February 2010, we adopted the 2010 Stock Incentive Plan for executive officers, employees, directors, and certain consultants, which was approved by shareholders in June 2010, and became effective on August 25, 2010. Pursuant to the 2010 Stock Incentive Plan, directors may be awarded grants of stock options, restricted stock units, restricted stock, or stock. In July 2015, the Compensation Committee recommended that the Board award $76,000
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COMPENSATION OF NON-MANAGEMENT DIRECTORS |
of additional stock to the directors as part of their compensation. The Board approved the additional award, and each of the directors received 31,148 additional shares under the 2010 Stock Incentive Plan in July 2015.
As described more fully above, the following chart summarizes the annual cash and equity compensation for our non-management directors during 2015.
Non-Management Director Compensation for 2015
| | | Fees | | | | | | | |
| | Director | | Annual
Retainer
($) | | Committee
Meeting
Fees
($) | | Committee
Chairman
Fees
($) | | Totals Fees Paid in
Cash
($) | | Stock
Awards1
($) | | All Other
Compensation
($) | | Total
($) | |
| Ted Crumley, | | 156,000 | | 20,000 | | 0 | | 176,000 | | 25,0072
| | 0 | | 277,008 | |
| Chairman | | | | | | | | | | 76,0013 | | | | | |
| John H. Bowles | | 66,000 | | 28,000 | | 12,000 | | 106,000 | | 25,0072 | | 0 | | 207,008 | |
| | | | | | | | | | | 76,0013 | | | | | |
| George R. Nethercutt, Jr. | | 66,000 | | 20,000 | | 12,000 | | 98,000 | | 25,0072 | | 0 | | 199,008 | |
| | | | | | | | | | | 76,0013 | | | | | |
| Terry V. Rogers | | 66,000 | | 32,000 | | 8,000 | | 106,000 | | 25,0072 | | 0 | | 207,008 | |
| | | | | | | | | | | 76,0013 | | | | | |
| Charles B. Stanley | | 66,000 | | 28,000 | | 0 | | 94,000 | | 25,0072 | | 0 | | 195,008 | |
| | | | | | | | | | | 76,0013 | | | | | |
| Dr. Anthony P. Taylor | | 66,000 | | 28,000 | | 8,000 | | 102,000 | | 25,0072 | | 0 | | 203,008 | |
| | | | | | | | | | | 76,0013 | | | | | |
1 | The amounts shown in this column represent the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. For a description of the assumptions used in valuing the awards please see Note 9 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. |
2 | On May 29, 2015, each non-management director received 8,041 shares of our common stock under the terms of the Stock Plan for Nonemployee Directors. Based on our closing stock price on the NYSE on May 29, 2015 ($3.11), the grant date fair value for each grant of 8,041 shares credited to Messrs. Crumley, Bowles, Nethercutt, Rogers, Stanley and Taylor on May 29, 2015, was $25,007. (The amounts do not reflect the actual amounts that may be realized by the directors.) |
3 | On July 1, 2015, each non-management director received 31,148 shares of our common stock under the terms of the 2010 Stock Incentive Plan. Based on our closing stock price on the NYSE on July 1, 2015 ($2.44), the grant date fair value for each grant of 31,148 shares credited to Messrs. Crumley, Bowles, Nethercutt, Rogers, Stanley and Taylor on July 1, 2015, was $76,001. (The amounts do not reflect the actual amounts that may be realized by the directors.) |
2016 Compensation Changes for Non-Management Directors
Effective January 1, 2016, the Compensation Committee recommended and the Board approved a 10% reduction in the annual cash compensation paid to non-management directors in 2016.
Other
The Company covers directors under its overall director and officer liability insurance policies, as well as reimbursing them for travel, lodging, and meal expenses incurred in connection with their attendance at Board and committee meetings, meetings of shareholders, and for traveling to visit our operations. Directors are eligible, on the same basis as Company employees, to participate in the Company’s matching gift program, pursuant to which the Company matches contributions made to qualifying nonprofit organizations. The aggregate annual limit per participant is $5,000. Beyond these items, no other cash compensation was paid to any non-management director.
Retirement Age
The Company has no current retirement plan for non-management directors. Our Bylaws and Corporate Governance Guidelines provide that directors will not be nominated for re-election after their 72nd birthday (this policy was waived in 2014 when Dr. Anthony P. Taylor was nominated for re-election after his 72nd birthday). As of December 31, 2015, the average age of members of our Board was approximately 68 and the average tenure of our Board was approximately 11 years. With the addition of two new members to the Board in February 2016, the average age of members of our Board is now approximately 67 and the average tenure of our Board is approximately 8 years.
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| | 2016 Proxy Statement17 |
Table of Contents
CORPORATE GOVERNANCE AND RELATED MATTERS |
CORPORATE GOVERNANCE AND RELATED MATTERS
We believe that good corporate governance practices reflect our values and support our strong strategic and financial objectives and performance. Our corporate governance practices are generally reflected in our Bylaws, Corporate Governance Guidelines, and committee charters, which can be found at http://www.hecla-mining.com. The charters of each committee spell out the committees’ roles and responsibilities assigned to each by the Board. In addition, the Board has established policies and procedures that address matters such as chief executive officer succession planning, transactions with related persons, risk oversight, communications with the Board by shareholders and other interested parties, as well as the independence and qualifications of our directors. This corporate governance section provides insights into how the Board has implemented these policies and procedures to benefit Hecla and our shareholders.
The Board’s Role and Activities in 2015
Hecla’s Board acts as the ultimate decision-making body of the Company on certain fundamental matters and advises and oversees management, who are responsible for the day-to-day operations and management of the Company. In carrying out its responsibilities, the Board reviews and assesses Hecla’s long-term strategy. During 2015, there were four meetings of the Board. Directors are expected to make every effortto attend the Annual Meeting, all Board meetings and the meetings of the committees on which they serve. All members of the Board attended last year’s Annual Meeting as a Class III director, together with Charles B. Stanley, each with a term to expire at the 2025 annual meeting of Shareholders, which was heldshareholders. Each class of directors now has two members.
Board’s Role in May 2015. In 2015, each director attended over 95%Oversight of Strategy and Risk Management
Our Board is engaged and involved in overseeing our strategy and takes an active role in risk oversight.
The Board oversees the strategic direction of the meetingsCompany, and in doing so considers the potential rewards and risks of our business opportunities and challenges and monitors the development and management of risks that impact our strategic goals.
The Board and the committees of which he wasas a member.
Role of Board in Risk Oversight
Our managementwhole is responsible for risk oversight at the Company, with reviews of certain areas conducted by the relevant Board committees that regularly report to the full Board.
In its risk oversight role, the Board reviews, evaluates and discusses with appropriate members of management whether the risk management processes designed and implemented by management are adequate in identifying, assessing, managing, and reviewingmitigating material risks facing the Company, including without limitation, strategic,financial, operational, financial, compensationsocial, and regulatory risks, and meets regularly as part of such responsibility to review and discuss the Company’s risk exposure. environmental risks.
The Board does not havebelieves that full and open communication between senior management and the directors is essential to effective risk oversight. Our Board Chair regularly meets with our CEO on a standing risk management committee, but rather administers this oversight function directly throughvariety of matters, including business strategies, opportunities, key challenges, and risks facing the Board as a whole,Company, as well as throughmanagement’s risk mitigation strategies. Senior management attends all regularly scheduled Board meetings where they conduct presentations on various standing committees ofmatters involving our operations and are available to address any questions or concerns raised by the Board that address risks inherent in their respective areas of oversight. In particular, the Board is responsible for monitoring and assessing strategicon risk exposure. The Board and its committees periodically receive risk management updates through business reports from management provided at meetings of the Boardmanagement-related or its committees throughout the year.other matters. Following consideration of the information providedpresented by management, the Board provides feedback and makes recommendations, as needed, which is designed to help minimize the Company’s risk exposure. We also believe that our leadership structure and the use of executive sessions aids the Board in risk oversight.
The Audit Committee is responsible for considering and discussing major financial risk exposures and the steps management has taken to monitor and control these exposures. The committee regularly reviews and monitors compliance with securities and financial regulations, in addition to overseeing the audit work performed on behalf of the Company in the area of internal audit for compliance with the Sarbanes-Oxley Act. The committee meets at least quarterly to review the major financial risk exposures in connection with various matters, including the filing of quarterly reports with the SEC.
The Corporate Governance and Directors’ Nominating Committee monitors the effectiveness of the Company’s Corporate Governance Guidelines and other corporate governance matters.
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CORPORATE GOVERNANCE AND RELATED MATTERS |
The Compensation Committee assesses and monitors whether any of the Company’s compensation policies and programs have the potential to encourage excessive risk-taking. In 2015, with the assistance of Mercer (US) Inc. (“Mercer”), a wholly owned subsidiary of Marsh & McLennan Companies, Inc. (a compensation consulting firm engaged by the committee), the committee assessed the Company’s compensation arrangements to determine if their provisions and operation create undesired or unintentional risks of a material nature. The committee found that our compensation policies and practices do not create inappropriate or unintended significant risk to the Company as a whole.
To the extent any risks identified by each standing committee of the Board are material or otherwise merit discussion by the whole Board, the respective committee chair will raise such risks at the next scheduled meeting of the Board, or sooner if merited.
For the foregoing reasons, we have determined that our risk oversight is appropriate in the context of our specific circumstances, risk management efforts, and the Board’s administration of its oversight function. The chart below provides an overview of the allocation of risk management responsibilities among the Board committees.
Director Independence
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