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 |
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MESSAGE FROM YOUR BOARD OF DIRECTORS
Board of Directors From left: Catherine J. Boggs, Charles B. Stanley, Phillips S. Baker, Jr., Alice Wong, George R. Johnson, and Stephen F. Ralbovsky | ||||||
Our philosophy is to operate mines safely and successfully by promoting a deeply rooted, values based culture, leveraging mining skills developed over the Company’s long history, and applying innovative new practices. Our responsibility is to the safety and health of our people and the communities that we call home, and the environment in which we operate. |
Dear Fellow Shareholder:
Hecla has been in business for more than 130 years, and is the oldest precious metals mining company listed on the New York Stock Exchange. We produce more than 40% of the silver in the U.S., making us the largest U.S. silver miner, with significant gold production, as well as zinc and lead production.
As your Board of Directors, we are pleased to report that operationally, financially, and strategically, Hecla had a strong year in 2022 thanks to our dedicated employees. In September 2022, we acquired the Keno Hill property located in Canada’s Yukon Territory. The Keno Hill silver district hosts some of the highest-grade silver deposits in the world, which puts us in a position to be the largest silver producer in Canada in upcoming years. We also have some exploration projects in world-class silver and gold mining districts throughout North America. Our operating mines are located in Alaska (Greens Creek), Idaho (Lucky Friday), Quebec, Canada (Casa Berardi) and in the Yukon Territory, Canada, where we expect that Keno Hill will commence production in the third quarter 2023.
2022 Performance Highlights
• Completed the acquisition of Alexco Resource Corp., adding nearly 50 million ounces of silver reserves at Keno Hill, which has the highest-grade and largest primary silver reserves in Canada. • Produced 14.2 million ounces of silver, our second highest annual production of silver, and 175,807 ounces of gold. • Had record silver reserves of 241 million ounces, gold reserves of 2.6 million ounces at December 31, 2022. • Record lead production of 49,000 tons and zinc production of 65,000 tons. • Achieved record throughput milestones at all three of our operations. • Entered into a new credit agreement with less pledged collateral and better overall terms than our previous bank credit agreement. | • Reported sales of $718.9 million with 67% from our Greens Creek and Lucky Friday mines. • Returned $12.9 million, or • Continued our trend of strong safety performance, with an all-injury frequency rate of 1.22 for 2022, and 42% below the U.S. average. • Negotiated and signed a six-year agreement with the union at our Lucky Friday Mine. • Added seven female leaders and professionals to the 64 we had in 2021. • Third highest total shareholder return among our peers in 2022. | |||
Our People
For over 130 years, our people have been our most valuable asset. As of December 31, 2022, we directly employed approximately 1,850 people. The vast majority of our employees are full-time, and approximately 15% are covered by a collective bargaining agreement. Since we are often among the largest private-sector employer in the communities in which we operate, it is important that we fairly compensate our employees. For many decades we have offered competitive wages and among the highest-valued benefits where we operate. In addition to competitive base wages, we offer retirement benefits, health insurance benefits, incentive plans, and paid time off. Our retirement benefits, which include both defined benefit and defined contribution plans for U.S.-based employees, set us apart from many other employers.
Creating greater gender diversity in a predominantly male industry is among the priorities of Hecla in the coming years. Management is working to increase the representation of women, local and Indigenous people (where applicable) and other diverse people throughout our workforce.
Health and Safety
The safety and health of our employees is of paramount importance. We invest in effective ways to operate our mines more safely. Our goal is to achieve world-class safety and health performance by promoting a deeply rooted values based culture of safety, and utilizing technology and innovation to continually improve the safety at our operations. We invest in our people with training and workforce development programs that focus on safety first. All employees receive training that complies with or exceeds applicable safety and health regulations as set by the applicable regulator where each operation is located. As part of our commitment to safety, we track a variety of safety performance indicators, including injuries, near misses, observations, and equipment damages. Company-wide, our all-injury frequency rate dropped by 56% from 2017 to 2022. In 2022, our all-injury frequency rate was 1.22, which equals a prior Company record and is 42% below the U.S. average.
2023 Proxy Statement i
Message from Your Board of Directors
Approach to Sustainability and Advancing on Environmental, Social and Governance (“ESG”)
Our focus has been on responsible mining practices throughout more than 130 years of operation. At each of our sites, we are committed to responsible mining practices that protect the safety of our workforce, minimize the environmental impact of our operations, and respect the communities where we have operations. We provide large economic and social benefits to rural communities, yet our geographic and environmental footprint is small. We are proud of the way our employees maintain their commitment to responsible mining. In 2022, we received the American Exploration and Mining Association 2022 Environmental and Sustainability Excellence Award for exemplary reclamation activities at our San Sebastian Mine, located in Durango State, Mexico. To develop a pipeline of talent, we partner with local organizations on programs specifically geared toward training students for mining careers. In 2022, our ESG emissions intensity achieved a ranking within the lowest decile among peers in our industry subgroup.
Active Board Refreshment
Since 2016, 67% of the Board of Directors has changed as we have welcomed four new directors, including two women. Last year, we said goodbye to Terry V. Rogers and Ted Crumley, who retired after the 2022 Annual Meeting. With their departure, our average tenure decreased from 12 years to 10 years. Mr. Rogers and Mr. Crumley left us with a wealth of contributions and experience, and we remain committed to recruiting additional independent directors who will expand our Board of Director’s skillsets, perspectives, and capabilities, with the objective of having a Board of Directors with expansive and diverse experience, a deep understanding of the challenges and opportunities associated with our business, and a focus on value and sustainability for the benefit of all stakeholders.
Annual Meeting
During 2020 and 2021, we held our annual meetings virtually. In 2022, we took a hybrid (virtual and in-person) approach by having a combined live and virtual meeting, and we plan the same for the 2023 Annual Meeting.
As your Board of Directors, we want to thank you for your continued confidence in Hecla. We appreciate the opportunity to serve Hecla on your behalf as we continue to navigate through these unprecedented times, but with excitement for what the future holds for the largest U.S. silver producer.
Catherine J. Boggs
Board Chair
Stephen F. Ralbovsky
Director
Charles B. Stanley
Director
George R. Johnson
Director
Phillips S. Baker, Jr.
Chief Executive Officer, President and Director
Alice Wong
Director
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PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
MAY 23, 2023
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Current Class I Nominees for Election to the Board – Terms Ending at the 2023 Annual Meeting | 25 | |||||
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Shareholder proposals to be included in next year’s Proxy Statement | 82 | |||
Security Ownership of Certain Beneficial Owners and Management | 82 | |||
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2023 Proxy Statement iii
NOTICE OF 20162023 ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders of Hecla Mining Company:
NOTICE IS HEREBY GIVEN that the 2016this year’s Annual Meeting of Shareholders (“Annual Meeting”) of Hecla Mining Company (“we,” “our,” “us,” “Hecla,” or the “Company”) will be held in a hybrid (virtual and in-person) meeting format. The Annual Meeting will be held in-person at the Eric A. Johnston Auditorium at the Northwest Museum of Arts & Culture, located at 2316 W. 1st Avenue, Spokane, Washington, and virtually, via www.virtualshareholdermeeting.com/HL2023, on Thursday,Tuesday, May 19, 2016,23, 2023, beginning at 10:00 a.m., Pacific Daylight Time, for PDT. During the following purposes:meeting, shareholders will be asked to:
Proposal 1 – | Elect | ||
Proposal 2 – | |||
Ratify the | |||
Proposal 3 – | Approve, on an advisory basis, named executive officer compensation | ||
Proposal 4 – | Approve, on an advisory basis, the | ||
Shareholders will also transact such other business as may be brought properly before the meeting and all adjournments or postponements thereof.
Whether you plan to attend the Annual Meeting, or any postponement or adjournment thereof, you are urged to submit your proxy as soon as possible so that your shares can be voted at the meeting in accordance with your instructions. To participate and vote your shares during the meeting, please see Attending the Virtual Meeting or Attending the Meeting in Person on page 85 for additional information.
The Board of Directors (“Board”) has fixed the close of business on March 23, 201624, 2023, as the record date for the determination of shareholders entitled to notice of, and to vote at, the Annual Meeting and at any adjournment or postponement thereof (“Record Date”).
On or about April 4, 2016, we began mailing our A list of the shareholders of record asentitled to vote at the Annual Meeting will be available for review by any shareholder, for any purpose related to the meeting, between 7:00 a.m. and 4:30 p.m. PDT at Hecla Mining Company, 6500 N. Mineral Dr., Suite 200, Coeur d’Alene, Idaho 83815, for ten days prior to the meeting. The list will also be available to shareholders at www.virtualshareholdermeeting.com/HL2023 during the Annual Meeting.
PLEASE REVIEW THE PROXY STATEMENT AND VOTE IN ONE OF FOUR WAYS:
VIA THE INTERNET Visit www.proxyvote.com Follow instructions provided on your proxy card or voting instruction form | BY MAIL Sign, date and return your proxy card or voting instruction form | |||||||
BY TELEPHONE Call the telephone number on your proxy card, | IN PERSON Vote at the meeting by completing a ballot |
Important Notice Regarding the Availability of Proxy Materials for the Record Date, either a NoticeAnnual Meeting to be held on May 23, 2023. This Proxy Statement and our 2022 Annual Report are available at www.hecla.com, and at www.proxyvote.com.
We are mailing our “Notice of Internet Availability of Proxy Materials (“Notice”) containingMaterials” to shareholders on or about April 11, 2023, which contains instructions on how to access thisour Proxy Statement and our 20152022 Annual Report (“Proxy Materials”) online,online. We are also mailing a full set of our Proxy Materials to shareholders who previously requested paper copies of the materials. Our Proxy Materials can also be viewed on our website at www.hecla.com under “Investors” and then selecting “Shareholder Information,” or a printed copy of these Proxy Materials.at www.proxyvote.com.
By Order of the Board of Directors
Michael B. White
Corporate Secretary
April 4, 201611, 2023
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PROXY STATEMENTANNUAL MEETING OF SHAREHOLDERSMAY 19, 2016
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Dear Fellow Shareholder:
It is the responsibility of the Board to maintain sound corporate governance practices and to oversee the Company’s strategic and operational activities in a manner that protects and creates long-term shareholder value. Your Board is committed to fulfilling these duties and to keeping the interests of our shareholders and employees at the center of our priorities.
Corporate Strategy
We are also committed to the Company’s strategic approach to creating shareholder value - consistent, long-lived production that increases and improves over time. This means we need long-life assets to profit from higher metals prices, strong geological understanding to increase reserves, and operating expertise to reduce costs and lower risks.
As the Company weathers the current decline of metals prices, our strong financial position should enable us to continue to grow the Company, and we are confident that we are well positioned to create long-term shareholder value.
Governance
The Board, directly and through its Corporate Governance and Directors’ Nominating Committee, seeks to maintain corporate governance practices that are aligned with our strategic financial and operational goals. We do this by conducting processes at least annually to evaluate, optimize and update governance and practice guidelines.
Shareholder Outreach
The Board places great value on the feedback it receives from our current and potential shareholders, particularly with respect to our executive compensation program, as we believe in maintaining a high level of transparency in that area. One of the primary sources of feedback is through our shareholder outreach efforts pursuant to which we elicit the viewpoints of large shareholders and certain proxy advisory firms. In part because of the feedback we have received through our shareholder outreach efforts, we have implemented certain changes in our executive compensation program. We believe those changes helped us obtain a favorable vote of 83% on our say-on-pay proposal in 2015, which was 30% more favorable than our 2013 say-on-pay vote.
Our shareholder outreach program also seeks to identify corporate governance matters that are of concern to our shareholders, as well as the major proxy advisory firms.
During our shareholder outreach in 2015, two corporate governance issues were discussed with our shareholders: (i) the ability of shareholders to call special meetings, and (ii) the 80% supermajority voting requirement on certain amendments to our Certificate of Incorporation and Bylaws impacting special meetings. At our 2014 Annual Meeting, we asked shareholders to vote on a proposal to amend our Certificate of Incorporation and Bylaws to permit shareholders to call special meetings under certain circumstances. Under our Certificate of Incorporation, this change required the approval by holders of 80% of our outstanding shares of common stock, yet we only received approval from 41%. We are again including this proposal on the ballot for the Annual Meeting. In addition, we are including another proposal to amend our Certificate of Incorporation and Bylaws to change the required approval of amendments to the Certificate of Incorporation and Bylaws relating to the calling of special meetings from 80% to a two-thirds voting standard.
Board Composition
In December 2015, we were saddened to announce the passing of John H. Bowles, a director of the Company. John served on the Board of Hecla for over nine years following his retirement as a partner at PricewaterhouseCoopers LLP. He chaired the Audit Committee, and was also a member of the Executive Committee and Health, Safety, Environmental and Technical Committee. He leaves a long, distinguished legacy in our industry and as a member of our Board for which we are eternally grateful.
Shareholders continue to express a genuine and legitimate interest in finding effective ways to ensure thatboards of directors are comprised of the right people, with the right skills and qualifications, to effectively represent their interests. The issue of Board composition and refreshment is a priority of our shareholders, and we agree that refreshing the Board with new perspectives and new ideas is critical to a well-functioning Board. Accordingly, we have been actively pursuing new members.
In seeking new directors, the Board is also very conscious of the benefits of diversity on the Board. We have sought and continue to seek qualified candidates that would enhance our Board’s diversity.
Your participation and your votes are important to the future of our Company. We encourage you to vote your shares in accordance with the Board’s recommendations. Details of the items to be voted upon are provided throughout this Proxy Statement.
Ted CrumleyChairman
A MESSAGE FROM THE PRESIDENT ANDCHIEF EXECUTIVE OFFICER
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Dear Fellow Shareholder:
On behalf of your entire Board and the management team, I deeply appreciate your support and faith in our Company. I also want to express my gratitude to our Board for its guidance and support as we execute our strategy, which we expect to yield long-term shareholder value. To all our employees, please accept my appreciation for your readiness to adapt, your responsiveness, creativity and willingness to work together towards attaining that success.
Our Responsibility
At Hecla, our Integrated Corporate Responsibility Policy (“ICR”) begins with the belief that a safe mine is a productive mine – each day, each shift, home safely. We will strive to guard the health and safety of our employees and the community. Second, we will be responsible environmental stewards and strive to minimize environmental effects during exploration, development and operations, and then reclaim our projects to productive post-mining land uses. Third, we believe that by being responsive to community needs, the Company builds trust and relationships that foster our social license to operate. This encompasses taking a mutually-beneficial approach to issues affecting the community, treating others with respect, and engaging in open and honest communication. Each of these aspects is fully integrated into our business planning as they are considered key to our core business strategy.
Our Strategy and 2015 Accomplishments
Our simple strategy is to explore, develop and operate properties that have consistent, long-lived production that grows and whose margins improve over time.
Despite lower metals prices in 2015, we finished the year strongly, with the most silver and silver equivalent production in our history. The Company also, for the 10th consecutive year, grew silver reserves to the most in our history, despite using lower price assumptions. We ended the year with $155 million of cash on the balance sheet, which was consistent with our expectations and using our balance sheet strength to invest in expanding mine life and increasing production.
In 2015, our key achievements included the following:
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Into the Future
2016 marks Hecla’s 125th anniversary. We believe our strategy and accomplishments will give shareholders value in all price environments, both compared to peers and when metals prices increase, and for what we hope is another 125 years.
We sincerely hope you will be able to attend and participate in our Annual Meeting. We welcome the opportunity to meet with many of you and give you a firsthand report on our progress, as well as express our appreciation for your confidence and support.
Phillips S. Baker, Jr.President and Chief Executive Officer
This summary highlights information contained elsewhere in this Proxy Statement. This summaryIt does not contain all of the information that you should consider and youconsider. You should read the entire Proxy Statement carefully before voting. For more complete information regarding the Company’s 2022 performance, please review our Annual Report and Form 10-K.
Agenda and Voting Recommendations
Proposal 1 Election of Class I Directors Board Vote Recommendation FOR Page 24 | Proposal 3 Approve, on an Advisory Basis, Named Executive Board Vote Recommendation FOR Page 34 | |||
Proposal 2 Ratify the Appointment of Independent Auditors Board Vote Recommendation FOR Page 31 | Proposal 4 Approve, on an Advisory Basis, the Frequency of our Say-on-Pay Votes for Named Executive Officer Compensation Board Vote Recommendation ONE YEAR Page 81 |
2022 Performance Highlights
Operational Highlights | Financial Highlights | Strategic | ||
• Record silver reserves of 241 million ounces and gold reserves of 2.6 million ounces. • Produced 14.2 million ounces of silver, Hecla’s second highest annual production of silver, and 175,807 ounces of gold. • Increased Lucky Friday Mine silver production by 25% to 4.4 million ounces using the Underhand Closed Bench (“UCB”) mining method. • Achieved record mill throughput milestones at three of our operations. • The Lucky Friday Mine received the Society for Mining, Metallurgy & Exploration (“SME”) Murray Innovation Award for 2023 for the pioneering of the UCB mining method. • Negotiated and signed a six-year agreement with the union at our Lucky Friday Mine. | • Sales of $718.9 million with 67% from our Greens Creek and Lucky Friday mines. • Adjusted EBITDA of $217.5 million, net debt to adjusted EBITDA ratio of 1.9.1 • Strong balance sheet with $104.7 million in cash and cash equivalents with approximately $247 million in available liquidity. • Returned $12.9 million, or 14%, of cash flow from operations to our common stock shareholders through dividends. • Third best performing stock in our peer group in 2022, based on total shareholder return. • Entered into a new credit agreement with less pledged collateral and better overall terms than our previous credit agreement. | • Completed the acquisition of Alexco Resource Corp. (Keno Hill) adding nearly 50 million ounces of silver reserves; possessing the highest grade and largest primary silver reserves in Canada. |
1 | A non-GAAP measurement. See Appendix A for a reconciliation to GAAP. |
2023 Proxy Statement 1
Proxy Statement Summary
2022 ESG Highlights
Environmental/Safety | Social | Governance | ||
• Strong safety performance with an all-injury frequency rate of 1.22, and 42% below the U.S. average. • Company-wide, our all-injury frequency rate dropped by 56% from 2017 to 2022. • Our San Sebastian Mine received the 2022 Environmental and Sustainability Excellence Award given by the American Exploration & Mining Association. • Scope 1 and Scope 2 greenhouse gas emissions reduced 30% from 2019 baseline level to 94,593 tonnes CO2e. • In 2022, 86% of our electricity used at our mines was line power. Of that, 72% was generated from renewable sources. | • Women comprise 11% of Hecla’s workforce, and 20% of our managerial positions. • In 2022, Hecla became strategic partners to the Women in Mining (“WIM”) national organization. We support the efforts of WIM to improve gender diversity industry-wide. • In 2022, the Hecla Charitable Foundation donated more than $312,950 toward education, youth activities, community programs, and health services activities in communities in which we operate. • Hecla has two operations and one exploration project in Canada that have benefit agreements in place with the First Nations – Abitibiwinni at our Casa Berardi Mine in Quebec, the First Nation Na-Cho Nyak Dun at our Keno Hill operation in the Yukon, and the Gitanyow at our Kinskuch property in British Columbia. | • Four of our six directors joined the Board after 2016, including one in 2021. • One director retired in 2021, and two directors retired after the 2022 Annual Meeting, dropping the average Board tenure from 12 years to 10 years. • 33% of our directors are women. • Our Board appointed its first woman Board Chair in 2022. • Our Board Chairis independent of our Chief Executive Officer. • Directors who receive more “Against” votes than “For” votes must tender their resignation to the Board for consideration. |
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SHAREHOLDER ENGAGEMENT
We have long believed that the delivery of long-term value requires regular dialogue with, and accountability to, our shareholders. As a result, our management team participates in numerous investor meetings throughout the year to discuss our business and strategic priorities. Our core shareholder engagement team includes our Senior Vice President – ElectionChief Administrative Officer (“SVP – CAO”), Senior Vice President and Chief Financial Officer (“SVP – CFO”), Vice President – General Counsel, Vice President – Corporate Development & Sustainability, Vice President – Investor Relations and Treasurer, and Assistant Secretary. If requested by a shareholder, our chairpersons of Directors (page 10)each committee of the Board are available to join any shareholder engagement. These meetings include in-person, telephone, and webcast engagements, as well as investor conferences and can occur in a group or one-on-one settings.
Winter Engagement | Proxy Statement | Year-Round Engagement | Annual Meeting | |||||||||||||||||||||||
Solicit and receive feedback from shareholders on governance practices and trends, board composition, executive compensation, sustainability, human capital management and other shareholder priorities. | Hecla engagement team reports to Board and committees to review shareholder feedback and use information gathered from the winter engagement to, when appropriate, enhance disclosures and revise governance practices, executive compensation program, sustainability practices or other programs and policies. | Engage with institutional holders, analysts, and other investors during the year on other topics of interest. In 2022, management conducted approximately 18 presentations for analysts and investors, held approximately 50 one-on-one group meetings with investors, and hosted four quarterly conference calls with investors and analysts allowing for questions and answers with management. In addition, the Company responds to questions from investors and analysts by telephone and email throughout the year. | Receive and publish voting results from annual meeting which help shape our ongoing improvements and developments in governance practices, executive compensation, sustainability, and other shareholder interest areas. |
In November 2022, we sought engagement with 33 of our largest shareholders (representing approximately 281.5 million shares) and the two proxy advisory firms. We had three shareholders request a meeting (representing approximately 45 million shares) and seven responded that they did not need to meet. The two proxy advisory firms did not respond to our invitation to engage.
During our 2022 engagement, we discussed:
the Board’s continued refreshment with adding four new directors between 2016 to 2021, and our continued search for additional directors;
our diversity and inclusion aspirations, as well as employee retention;
our sustainability initiatives; and
our amended Bylaws that now conform to the new universal proxy rules and clarified that “plurality” voting applies to contested elections.
Say-on-Pay
In 2022, our Say-on-Pay proposal received 98% support of shares voted. During our outreach this year, no shareholders raised any concerns about our executive compensation practices and programs.
2023 Proxy Statement 3
Shareholder Engagement
ESG Matters
Additional topics discussed with shareholders focused on net zero carbon emission levels, and our gap and materiality analysis to reporting frameworks (Sustainability Accounting Standards Board – metals and mining standards, Task Force on Climate-Related Financial Disclosures, and Global Reporting Initiative, as well as our Canadian operations benchmarking against the Towards Sustainability Mining protocols). See Sustainability on page 5.
Corporate Governance
In our 2022 and 2023 shareholder outreach, we discussed changes to our Bylaws reflecting the new universal proxy rules, and board composition. We added two new directors in 2016, one new director in 2017, and one new director in 2021, thereby reducing the average tenure of the Board. We also had two long-term directors retire from the Board in 2022 due to mandatory retirement, thus allowing us the opportunity to further refresh the Board. We are actively seeking additional members to our Board and hope to add one or more directors in the near future.
We also discussed three of our corporate governance features that may have an anti-takeover effect on the Company: (i) the inability of shareholders to call special meetings; (ii) our classified Board structure; and (iii) supermajority voting provisions in our Restated Certificate of Incorporation and Bylaws. In prior years we have proposed amendments to our Restated Certificate of Incorporation and Bylaws to revise these three provisions, but the voting results have never been close to sufficient to implement change. The required vote is 80% of outstanding shares voted in favor of any such change, and we have never obtained higher than 56% of outstanding shares voted in favor. The shareholders we spoke with unanimously told us that due to the repeated failure of proposals to change these provisions at past annual meetings, and the desire to improve the format and readability of our Proxy Statement and the resources involved in printing and mailing a lengthier Proxy Statement, they would not object if we did not include these proposals at our Annual Meeting.
The Board will continue to assess evolving best practices in corporate governance matters, including the subjects of the prior proposals discussed above. In future years, we may again include one or more of these proposals on the agenda for an Annual Meeting. Furthermore, the Board will continue to consider any formal proposals and other feedback that we receive from shareholders. And, we will continue our shareholder outreach efforts so that we can understand and appropriately react to the Corporate Governanceevolving viewpoints of our shareholders on corporate governance and Directors’ Nominating Committee believeother matters.
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SUSTAINABILITY
We are committed to meeting the highest standards of environmental stewardship across our operations, respecting human rights in all our business practices, and prioritizing the health, safety and well-being of our workforce and host communities where we operate. We recognize that the three director nominees (Crumley, Rogerslong-term success of the Company and Stanley) possesssustainable value creation for us are dependent on integrating the necessary qualificationsESG performance factors that are most important to provide effective oversight ofour stakeholders and to our business into our business strategies. Thus, we measure our ESG performance against the following benchmarks:
• | the Sustainability Accounting Standards Board (“SASB”) – metals and mining standards; |
• | relevant aspects of the Task Force on Climate-Related Financial Disclosures, Global Reporting Initiative; and |
• | Mining Association of Canada’s Towards Sustainable Mining protocols. |
We have also prioritized the United Nations Foundation Sustainable Development Goals that most directly align with our business, corporate strategy, and quality advicematerial sustainability issues.
On our website at www.hecla.com, you can find Hecla’s ESG reporting and counseldata and view our 2021 Sustainability Report. We expect our 2022 Sustainability Report to be available on our website prior to the Company’s management.Annual Meeting.
Director Nominees Recommended byGovernance is discussed in the next section of this Proxy Statement, so this section primarily focuses on the 2022 highlights around the areas of environment, safety and health, human capital management, and community engagement.
Board Oversight and Management of Sustainability
Primarily, two committees of the Board of Directors
Name | Age | Director Since | Experience/Qualification | Independent (Yes/No) | Committee Memberships | Other Current Public Directorships | ||||||||
Ted Crumley Board Chairman | 71 | 1995 | Former Executive Vice President and Chief Financial Officer of OfficeMax Incorporated | Yes | EC CC | None | ||||||||
Terry V. Rogers | 69 | 2007 | Former Senior Vice President and Chief Operating Officer of Cameco Corporation | Yes | HSET (Chair) AC CC EC | Centerra Gold Inc. | ||||||||
Charles B. Stanley | 57 | 2007 | Chief Executive Officer, President and Chairman of the Board of QEP Resources, Inc. | Yes | AC (Chair) HSET CG&DNC | QEP Resources, Inc. | ||||||||
Continuing Members of the Board | ||||||||||||||
Name | Age | Director Since | Experience/Qualification | Independent (Yes/No) | Committee Memberships | Other Current Public Directorships | ||||||||
Term Ending at the 2017 Annual Meeting | ||||||||||||||
Phillips S. Baker, Jr. | 56 | 2001 | President and Chief Executive Officer of Hecla Mining Company | No | EC (Chair) | QEP Resources, Inc. | ||||||||
Dr. Anthony P. Taylor | 74 | 2002 | President, Chief Executive Officer and Director of Selex Resources Ltd. | Yes | CG&DNC (Chair) HSET CC | None | ||||||||
George R. Johnson | 67 | 2016 | Former Senior Vice President of Operations of B2Gold Corporation | Yes | AC HSET | None | ||||||||
Term Ending at the 2018 Annual Meeting | ||||||||||||||
George R. Nethercutt, Jr. | 71 | 2005 | Chairman of The George Nethercutt Foundation and Of Counsel for Lee & Hayes PLLC | Yes | CC (Chair) CG&DNC | ARCADIS Corporation | ||||||||
Stephen F. Ralbovsky | 62 | 2016 | Former Partner with PricewaterhouseCoopers LLP | Yes | AC CG&DNC | None |
EC: Executive CommitteeAC: Audit CommitteeCC: Compensation CommitteeCG&DNC: Corporate Governance and Directors’ Nominating CommitteeHSET:provide ESG oversight. The Health, Safety, Environmental and Technical Committee of Hecla’s Board is tasked with overseeing ESG risks, strategic plans, and progress on issues that may potentially adversely impact Hecla’s operations, activities, plans, strategies, or reputation. The focus is primarily on internal matters and the technical requirements of ESG matters. The Governance and Social Responsibility Committee (“Governance Committee”) is tasked with reviewing and making recommendations to the Board for ESG matters that focus primarily on policy and external matters. Each committee relies on the activities of the other.
At the executive level, the Senior Vice President and Chief Operating Officer (“SVP – COO”), Vice President – Corporate Development and Sustainability, and SVP – CAO report directly to our Chief Executive Officer (“CEO”) and are responsible for implementing the Company’s ESG programs. At our operations, our Vice Presidents – General Managers, and other employees work toward achieving sustainability goals.
Environment
Our metals, especially silver and zinc, are critical components to green energy technologies and national security. Demand for responsibly sourced metals is growing. As the largest silver producer in the United States, Hecla is proud to supply an essential metal used in critically important markets including renewable energy technology, medical products, and military defense technology. At the same time, we recognize the importance of responsible mining to ensure that we minimize the impacts of our activities on the environment where we live and work. At each of our sites, we have implemented programs to reduce freshwater and energy consumption, reduce our carbon footprint, maintain local water quality backed by rigorous testing and monitoring, and reclaim the land once mining is complete.
We work to minimize the environmental impact of our operations through improvement of our processes. We set reduction targets for greenhouse gas (“GHG”) emissions and energy use capturing and tracking environmental data to benchmark our operations against industry standards to provide accountability and transparency in our progress against our goals.
Sustainability Targets
✓ | with the addition of Keno Hill our 30% reduction of combined GHG emissions (Scope 1 and Scope 2) from our 2019 baseline emissions of 135,301 tonnes CO2e by 2030 will have to be changed, but we expect to maintain a net zero (Scope 1 and Scope 2) carbon footprint through the purchase of carbon emission reduction credits; |
✓ | committed to a 5% reduction in energy intensity in our operations from 2020 baseline levels; and |
2023 Proxy Statement 5
Sustainability
✓ | continually improve our climate change disclosure by incorporating climate-related risks and opportunities into our risk management and strategic planning processes aligned with the Task Force on Climate-Related Financial Disclosures framework. |
Risk Management
Environmental Policies, Management System, and Training
Hecla’s Environmental Policy states our commitment to complying with all applicable federal, state/provincial, and local environmental laws and regulations that govern our facilities and going beyond them when minimal compliance does not meet Hecla’s values. Employees and contractors are also expected to comply with all applicable internal policies, programs, standards, and procedures as outlined in our Code of Conduct, and we conduct structured environmental reviews and audits to assess compliance at least annually.
We utilize our Environmental Management System (“EMS”) to provide consistency in our environmental programs company-wide and promote a culture of environmental awareness, innovation, and accountability across all our operations. The EMS is a 13-element program that promotes continuous improvement around issues including obligation registers, management of change, air quality, water and waste management, energy management, training, and reporting. The EMS program, which is benchmarked against ISO-14001 and complements Canada’s Towards Sustainable Mining program, is reviewed annually through internal audits and third-party reviews.
As part of our environmental management programs, we are committed to ensuring that our employees receive training to raise awareness of environmental issues and our processes to reduce environmental impact. In 2022, employees’ company-wide received more than 3,227 hours, and contractors received 360 hours of environmental training, focusing on job-specific environmental awareness, hazardous material management, spill response, and reporting.
Climate Change and Net Zero Targets
Hecla recognizes that the impacts of climate change may create greater potential risks for our operations, including risks posed by frequent and extreme weather events such as droughts and intense rainfalls. Potential risks to our operations include higher volumes of mine contact water requiring storage and treatment, increased requirements for stormwater diversion and associated water management systems, and reduced availability of freshwater. As part of our enterprise risk management processes, we are committed to incorporating climate-related risks and opportunities into our risk management and strategic planning processes aligned with the Task Force on Climate-Related Financial Disclosures framework.
At least every three years, we conduct structured high-level risk assessments (“HLRAs”) that include climate change considerations and appropriate materiality re-assessments. From these assessments, we develop site-specific management action plans that are assigned to the site management team for resolution. Each key risk identified in the HLRA response action plan is matched with an appropriate performance metric against which progress can be measured. Management and relevant employees meet quarterly with the Health, Safety, Environmental and Technical Committee of our Board to present project updates, including results from HLRAs and progress on material HLRA action plans.
Hecla is committed to reducing our carbon footprint. To demonstrate our commitment, we have set targets for reductions in Scope 1 and Scope 2 GHG emissions. Company-wide, we achieved a 30% reduction in Scope 1 and Scope 2 GHG emissions (94,593 tonnes CO2e) from 2019 (135,301 tonnes CO2e) and have seen the GHG Intensity score (Total Metric Tonnes GHG Emissions / Total Revenues US$M) reduced by 35% since 2019. We achieved a carbon neutral or net zero emissions level in 2022 for our Scope 1 and Scope 2 emissions by purchasing and retiring an equivalent emission tonnage of Certified Emission Reduction credits associated with the Tatay Hydroelectric Project in Cambodia, the Hedcor Sibulan Hydroelectric Power Project in the Philippines, the Luoi Power Project in Vietnam, and a Gas-Steam Combined Cycle Power Plant project in China.
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Sustainability
Environmental Highlights | ||||||
Climate Change: • 30% reduction in Scope 1 and Scope 2 emissions from our 2019 baseline levels. Total Energy Intensity: • We continue to reduce our energy intensity, exceeding our multi-year 5% energy intensity reduction goal. | Integrated Environmental Working Groups: • Each of our sites has a Tailings, Waste and Water Working Group that considers, among other aspects, climate change-related impacts that could affect site operations which are then integrated into design of mine facility infrastructure. Renewable Energy: • In 2022, 86% of our electricity used at our mines was line power. Of that, 84% was generated from renewable sources. Awards: • Our San Sebastian Mine received the 2022 Environmental and Sustainability Excellence Award for exemplary reclamation activities at the mine site located in Durango State, Mexico. The award was given by the American Exploration & Mining Association (“AEMA”), which recognizes commitment to the highest environmental and sustainability standards. |
Table of ContentsSafety and Health
Proposal 2 – Approval of AmendmentsHecla’s commitment to the safety and health of our workforce has been an essential part of our corporate culture for over 130 years, and has enabled us to build the highest reputation for safety with our employees, our communities, and within the industry. We work to operate our mines safely by promoting a deeply rooted, values based culture, leveraging mining expertise developed over the Company’s Certificatelong history, and innovating new practices that improve safety while increasing productivity. As an example, 2021 saw the development of Incorporationthe Underhand Closed Bench (“UCB”) mining method at the Lucky Friday Mine. The UCB method has improved our ability to manage seismicity at the mine.
| Safety and Health Highlights | |||||
All-Injury Frequency Rate of 1.22, 42% lower than U.S. National Average, and a 56% decrease between 2017 and 2022: | Zero Fatalities: • In 2022, we had zero employee or contractor fatalities. Safety Awards: • Our Fire Creek Mine was awarded the Sentinels of Safety Award from the National Mining Association. • Our Nevada Operations were awarded the Certificate of Achievement in Safety from the U.S. Mine Safety and Health Administration. |
2023 Proxy Statement 7
Sustainability
Human Capital Management
Hecla’s human capital management is dedicated to investing continuously in the technology, training, systems, and Bylawsprograms that help protect and support our people. We also strive to Remove Certain 80% Supermajority Voting Provisions (page 26)have our workforce mirror the local demographic diversity, including but not limited to gender, ethnicity, and local Indigenous people (where applicable). As of December 31, 2022, Hecla employed approximately 1,850 people, of which approximately 970 were employed in the United States, 850 in Canada, and 30 in Mexico. The vast majority of Hecla’s employees are full-time, and approximately 15% of our employees are covered by a collective bargaining agreement. Creating greater gender diversity in a predominantly male industry is among the priorities of Hecla in the coming years.
Our CertificateAt the executive level, the SVP – CAO reports directly to the CEO and is responsible for implementing the Company’s human capital management program. The position is an executive-level position to reflect the priority we place on utilizing our human capital resources to meet our business strategy. At the local level, each operating site has a human resource professional whose primary role is to manage the Company’s human capital management program at that site.
Human Capital Management Highlights | ||||||
Gender Diversity: • 11% of our workforce are women, and women hold 20% of our managerial positions. Hiring Local: • 70% of our workforce is local to our operations. Hiring First Nations: • In 2022, approximately 100 First Nations workers worked at Casa Berardi. Hecla encourages its suppliers to hire Indigenous workers and remain committed to providing opportunities to the Abitibiwinni First Nation businesses. | Protecting Human Rights: • We conduct business in jurisdictions where human rights laws are respected and promoted, and strive to conduct our business in a manner consistent with the United Nations Universal Declaration of Human Rights and the United Nations Guiding Principles on Business and Human Rights. Education: • We offer a tuition reimbursement program to assist with educational expenses for employees who are interested in furthering their education. |
8 www.hecla.com
Sustainability
Community Engagement
Over our 130-year history, Hecla has always been a strong partner in the communities where we operate. Through the continued growth of Incorporation currently requires the approval of 80% of shares outstanding in order to make certain amendmentsour responsible mining operations, we provide significant social and economic benefits to our Certificatelocal communities. We are the largest private-sector employer and taxpayer in Juneau, Alaska, near our Greens Creek Mine, in Wallace/Mullan, Idaho, near our Lucky Friday Mine, and in La Sarre, Quebec, near our Casa Berardi Mine. These operations have been part of Incorporationthe community for generations.
We engage with stakeholders at all of our sites during every stage of the mining life cycle to become a community partner and Bylaws affectingdeepen our understanding of local concerns and issues. We communicate information through a variety of methods including community meetings, local and social media, and flyers, with all materials available in the abilitylocal language with translation provided if necessary. We disclose the results of environmental, economic, and social impact assessments and partner with local stakeholders. We also work with local stakeholders to call special meetings of shareholders. This provision would be revised downwardidentify opportunities for the Hecla Charitable Foundation to a two-thirds vote requirement. If approved, the Companyintends to take the remaining steps required to implement the proposed amendments.provide support for community initiatives.
Proposal 3 – Approval of Amendments to the Company’s Certificate of Incorporation and Bylaws to Permit Shareholders to Call Special Meetings of Shareholders Under Certain Circumstances (page 29)
We are seeking the approval of our shareholders to amend our Certificate of Incorporation and Bylaws to add a right permitting shareholders who have held at least a 25% “net long position” in our outstanding common stock for at least 120 days to call special meetings of shareholders, subject to the conditions set forth in our Bylaws. Establishing a 25% “net long position” threshold for the right to call a special meeting would ensure that matters proposedfor consideration have significant support among our shareholders. If approved, the Company intends to take the remaining steps required to implement the proposed amendments.
Proposal 4 – Ratification of the Appointment of BDO USA, LLP as the Company’s Independent Registered Public Accounting Firm (page 31)
The Audit Committee and the Board believe that the continued retention of BDO USA, LLP to serve as the independent registered public accounting firm for the calendar year ending December 31, 2016, is in the best interests of the Company and its shareholders. As a matter of good corporate governance, shareholders are beingasked to ratify the Audit Committee’s selection of the independent auditor.
Proposal 5 – Approval of Named Executive Officer Compensation (page 77)
The Company seeks a non-binding advisory vote from its shareholders to approve the compensation of its named executive officers (“NEOs”) as described in theCompensation Discussion and Analysis section beginning on page 34 and the compensation tables beginning on page 62. The Board values shareholders’ opinions and the Compensation Committee will take into account the outcome of the advisory vote when considering future executive compensation decisions.
Community Engagement Highlights | ||||||
Supplier Code of Conduct: • The Company has a Supplier Code of Conduct that sets out the minimum standards of conduct expected from all suppliers wishing to do business with, or on behalf of, Hecla and its subsidiaries. Indigenous Relations: • With the purchase of Alexco Resources, Hecla now has two operations and one exploration project in Canada that have benefit agreements in place with the First Nations. This includes the Abitibiwinni at the Casa Berardi Mine in Quebec, the First Nation Na-Cho Nyak Dun at Keno Hill in the Yukon, and the Gitanyow at the Kinskuch property in British Columbia. | Supporting Communities through the Hecla Charitable Foundation: • In 2022, the Hecla Charitable Foundation donated more than $312,950 toward education, youth activities, community programs, and health services activities in communities in which we operate. Engaging with Stakeholders: • Our San Sebastian Mine won the American Exploration & Mining Association Environmental and Sustainability Excellence award in 2022. Building a Skilled Workforce: • At our Greens Creek Mine in Alaska, we have partnered with multiple entities to create a skilled local workforce. • At Prince William Sound College in Alaska, we have created a Millwright program, including full scholarships. • At AVTEC in Alaska, we provided scholarships and internships to Diesel and Electrical Tech students. • We continue to use the MAPTS Delta Mine Training Center in Alaska to train employees new to mining. |
2023 Proxy Statement 9
Governance HighlightsCORPORATE GOVERNANCE
We are committed to goodeffective corporate governance that reflects our values and supports our strategic and financial objectives and performance. Our corporate governance practices and believe that Proposals 2 and 3 are generally reflected in the best interests of our shareholders. We believe that if passed they would enhance Board and management accountability and help build public trust in the Company. In addition to Proposals 2 and 3 described beginning on pages 26 and 29, respectively, theBylaws, Corporate Governance Guidelines, Code of Conduct, Whistleblower Policy, and Related Matters section beginning on page 18 further describes our currentboard level committee charters.
Electronic Access to Corporate Governance Documents
Our corporate governance framework, which includes the following highlights:
Over the last few years we have undertaken significant shareholder outreach efforts in order to elicit and understand the concerns of our shareholders. In advance of our 2015 Annual Meeting, a management team (excluding NEOs) held one-on-one discussions with shareholders holding over 15% of our common stock and obtained constructive feedbackdocuments are available on our executive compensation program. The Compensation Committee, with assistance from managementwebsite at www.hecla.com by selecting the tab titled “Company” and its compensation consultant, consideredthen selecting the opinionstab titled “Governance and specific requests expressed during these meetings, as well as the analysis provided by proxy advisory firms. After implementing certain changes in 2014 and 2015, our 2015 say-on-pay vote received 83% support. The Compensation Committee believes the changes made in 2014 and 2015 impacted the vote because they were responsive to the feedback from investors and proxy advisory firms, and enhanced the performance orientation of our executive compensation program. The current frequency of shareholder advisory votes on executive compensation is every year.Ethics.” These include:
Once again, in advance of our 2016 Annual Meeting, we engaged with our shareholders and others to seek their feedback. Our management team (excluding NEOs) again held one-on-one discussions with shareholders holding over 10% of our common stock, as well as one-on-one discussions with two proxy advisory firms. The response was overwhelmingly supportive of the changes we made to our executive compensation program in 2014 and 2015. The results of this engagement and the Compensation Committee’s ongoing efforts to ensure a strong alignment between executive pay and Company performance, led the committee to make no substantivechanges to its executive compensation program. However, in December 2015, due to budget reductions for 2016, our Chief Executive Officer’s (“CEO”) base salary was reduced by 20%, and base salary for all other NEO’s was reduced by 10% effective through all of calendar year 2016. In addition, our Board’s annual cash payments were reduced by 10% through all of calendar year 2016.
In addition to seeking input on our compensation practices, our shareholder outreach program seeks to identify corporate governance matters that are of concern primarily to our shareholders, but also to the major proxy advisory firms.Bylaws
During our shareholder outreach in 2015, two corporate governance issues were discussed with our shareholders: (i) the ability of shareholders to call special meetings, and (ii) the 80% supermajority voting requirement to amend provisions in ourRestated Certificate of Incorporation and Bylaws impacting special meetings. At our 2014 Annual Meeting, we asked shareholders to vote on a proposal to amend our Certificate
Corporate Governance Guidelines
Whistleblower Policy
Code of Incorporation and Bylaws to permit shareholders to call special meetings under certain circumstances. Under our CertificateConduct
Code of Incorporation, this change required the approval by holders of 80% of our outstanding shares of common stock, yet we only received approval from 41%. We are again submitting this proposal at this year’s Annual Meeting. In addition, we are adding another proposal to amend our Certificate of Incorporation and Bylaws to change the required approval of certain amendments to the Certificate of Incorporation and Bylaws relating to the ability to call a special meeting from 80% to a two-thirds voting standard.
Key Compensation Actions Taken in 2015 and 2016
Below is a brief summary of actions taken by the Compensation Committee in 2015 and 2016. The compensation of our NEOs for 2015 is more fully described in theCompensation Discussion and Analysis section of this Proxy Statement, starting on page 34 and in the compensation tables starting on page 62.
Adoption of Clawback Provisions in our Incentive Plans (page 53). In February 2013, the Compensation Committee adopted a clawback policy with respect to incentive awards to executive officers. In December 2015, the Compensation Committee amended our incentive plans (Annual Incentive Plan, Long-term Incentive Plan, Key Employee Deferred Compensation Plan, and 2010 Stock Incentive Plan) to each include a clawback provision.
Reduction in Base Salaries for theEthics: CEO and other NEOs (page 55). Effective January 1, 2016, the Compensation Committee approved base salary reductions for our NEOs. Our CEO’s base salary was reduced by 20%,Senior Financial Officers
Supplier Code of Conduct
Human Rights Statement
Safety and all other NEOs’ base salaries were reduced by 10%.Health Policy
ReductionBribery and Anti-Corruption Policy (included in Annual Cash Compensation for our Board (page 17). The Compensation Committee recommended and the Board approved a 10% reduction in our Board’s annual cash compensation in 2016.Code of Conduct)
Annual Incentive Plan (“AIP”) (page 44). For 2015, the quantitative corporate performance factors (generally weighted in the aggregate at 50%Charters of the award) were divided proportionally into three factors: production (20%), adjusted EBITDA (20%)Audit, Compensation, Governance and cash (10%). For 2015, based on the assessment by the Compensation CommitteeSocial Responsibility, and Health, Safety, Environmental and Technical Committees of the Company’s overall performance on both qualitativeBoard
Shareholders may also request a free copy of these documents from: Investor Relations, Hecla Mining Company, 6500 N. Mineral Drive, Suite 200, Coeur d’Alene, Idaho 83815-9408; (208) 769-4100.
Corporate Governance Guidelines and quantitative measures underCode of Conduct
The Board has adopted Corporate Governance Guidelines and a Code of Conduct in accordance with the AIP, the committee determined Company performance to be at 115% of target. The 115% was measured by quantitative achievement at 50%, qualitative achievement at 35%, and discretionary at 30%.
2013 – 2015 Long-term Incentive Plan (“LTIP”) (page 47). The 2013-2015 LTIP has a maximum potential unit value of $300. The Compensation Committee assessed performance under the 2013-2015 LTIP as follows:
Performance Measure | Target | Actual Performance | % of Target | Value Earned Per Unit | ||||||
Silver Reserve Growth | 30.0 silver oz. added (millions) | 25.4 silver oz. added (millions) | 85% | $20.50 | ||||||
Production Growth | 54.1 silver oz. (millions) | 59.2 silver oz. (millions) | 109% | $43.50 | ||||||
Cash Flow | $848.49 cash flow (millions) | $884.98 cash flow (millions) | 104% | $31.50 | ||||||
Total Shareholder Return | 50% Hecla ranking vs. peers | 69.2% Hecla ranking vs. peers | 138% | $34.50 | ||||||
#4 Shaft Completion | Shaft Completed by 2/15/16 | 10/26/16 completion date | 0% | No Payout | ||||||
Total Earned Per Unit | $130.00 |
During the three-year period, performance in production, cash flow generation, and Total Shareholder Return (“TSR”) exceeded the target, and silver reserve growth exceeded the threshold, but was below target, and #4 Shaft completion was below the threshold. As a result, with a range in potential value per unit of $0 to $300, in February 2016, the Compensation Committee determined that the total 2013-2015 LTIP payout was $130.00 per unit. The Compensation Committee further approved payout of the LTIP awards to be 50% in cash and 50% in Hecla common stock issued under the 2010 Stock Incentive Plan.
CEO Total Direct Compensationfor 2015 - $3,373,250
Set forth on the following page is the 2015 compensation for each NEO as determined underU.S. Securities and Exchange Commission (“SEC”) rules. Total compensation, as reported in theSummary Compensation Table and calculated under SEC rules, includes several items that are driven by accounting and actuarial assumptions. Accordingly, it is not necessarily reflective of the compensation our NEOs actually realized in 2015. To supplement that disclosure we have added the “W-2/T4 Realized Comp.” column to the right of the table below to compare our NEOs’ 2015 compensation as determined under SEC rules with W-2/T4 income for 2015, which is the federally taxable compensation our NEOs received in 2015 inclusive of vested stock and exercised stock options, if any.
This supplemental table is not designed to replace theSummary Compensation Table for 2015 found on page 62, but rather to provide additional, supplemental compensation disclosure.
The differences between this supplemental table and theSummary Compensation Table are (i) the supplemental table includes compensation related to stock awards that became fully vested in 2015, whereas theSummary Compensation Table includes compensation for stock awards as it is expensed for financial accounting purposes; (ii) the supplemental table does not reflect the FASB ASC Topic 718 expense associated with equity awards; (iii) the supplemental table includes compensation related to bonuses that were paid in 2015, whereas theSummary Compensation Table includes bonuses as they are expensed for financial accounting purposes; and (iv) the supplemental table does not include the change in pension value and the Company matching contribution for individual 401(k) deferral. For more information on total compensation as calculated under SEC rules, see the narrative and footnotes accompanying theSummary Compensation Table for 2015 on page 62.
2015 Summary Compensation and Realized Compensation | |||||||||||||||||||
Name and Principal Position | Salary ($) | Stock Awards ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Non-Qualified Deferred Compensation Earnings ($) | All Other Compensation ($) | SEC Total ($) | SEC Total Without Change in Pension Value ($) | W-2/T4 Realized Comp.1 ($) | |||||||||||
Phillips S. Baker, Jr. | 605,000 | 1,727,174 | 1,768,250 | 599,477 | 15,900 | 4,715,801 | 4,116,324 | 2,777,810 | |||||||||||
President and CEO | |||||||||||||||||||
James A. Sabala | 380,000 | 583,700 | 822,000 | 174,075 | 15,900 | 1,975,675 | 1,801,600 | 1,585,582 | |||||||||||
Senior Vice President | |||||||||||||||||||
and CFO | |||||||||||||||||||
Lawrence P. Radford | 380,000 | 556,694 | 890,000 | 105,114 | 15,900 | 1,947,708 | 1,842,594 | 1,480,083 | |||||||||||
Senior Vice President – | |||||||||||||||||||
Operations | |||||||||||||||||||
Dr. Dean W. A. McDonald | 275,000 | 480,468 | 580,000 | 110,743 | 15,900 | 1,462,111 | 1,351,368 | 1,504,5582 | |||||||||||
Senior Vice President – | |||||||||||||||||||
Exploration | |||||||||||||||||||
David C. Sienko | 250,000 | 289,933 | 397,000 | 36,365 | 15,900 | 989,198 | 952,833 | 900,897 | |||||||||||
Vice President – | |||||||||||||||||||
General Counsel | |||||||||||||||||||
Don Poirier* | 226,000 | 314,950 | 401,500 | 82,950 | 15,900 | 1,041,300 | 958,350 | 1,036,9022 | |||||||||||
Former Vice President – | |||||||||||||||||||
Corporate Development |
Board of Directors Selection Process
Our current Bylaws requireNew York Stock Exchange (“NYSE”) corporate governance standards. The Corporate Governance Guidelines were adopted by the Board to ensure the Board is independent from management, that the Board adequately performs its function as the overseer of management, and to help ensure that the interests of the Board and management align with the interests of our shareholders.
We believe that operating with honesty and integrity has earned trust from our shareholders, credibility within our communities and dedication from our employees. Our directors, officers and employees are required to abide by our Code of Conduct to promote the conduct of our business in a consistently legal and ethical manner. Our Code of Conduct covers many topics, including conflicts of interest, confidentiality, fair dealing, proper use of the Company’s assets, and compliance with laws, rules, and regulations. In addition to the Code of Conduct for directors, officers and employees, our CEO, and SVP – CFO are also bound by a separate Code of Ethics.
The Governance Committee has adopted procedures to receive, retain, and react to complaints received regarding possible violations of the Code of Conduct, and to allow for the confidential and anonymous submission by employees of concerns regarding possible violations of the Code of Conduct. Our employees may submit any concerns regarding apparent violations of the Code of Conduct to their supervisor, our Vice President and General Counsel, the Chair of the Governance Committee, or through our anonymous telephone hotline.
Whistleblower Policy
We have not less than fivea Whistleblower Policy adopted by our Audit Committee that encourages our employees, suppliers, contractors, shareholders, customers, or other stakeholders (collectively, “stakeholders”) to report to appropriate Company representatives, without fear of retaliation, any information relating to possible fraud or questionable accounting, internal controls, or auditing matters. Stakeholders may confidentially submit any concerns to the Company’s Vice President and General Counsel, or through an anonymous third-party telephone hotline and online reporting system (ConfidenceLine). The goal of this policy is to discourage illegal activity and business conduct that damages Hecla’s reputation, business interests, and our relationship with stakeholders.
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Corporate Governance
In 2022, we received three anonymous reports through our secure online reporting system established as part of our Whistleblower Policy. The reports were all similar in nature and dealt with an alleged “conflict of interest” at one of our operations. One of the reports also alleged a regulatory compliance issue. The Company’s Vice President – General Counsel investigated the reports, including through several employee interviews and reported back to the Governance Committee. His report concluded there was neither evidence of an actual conflict of interest nor more than nineof failure to comply with applicable regulations. A response was also sent to the reporting parties through the same secure third-party reporting service.
Communications with the Board
Stakeholders wishing to communicate with our Board Chair or with the independent directors as a group may do so by delivering or mailing the communication in writing to: Board Chair, c/o Corporate Secretary, Hecla Mining Company, 6500 N. Mineral Drive, Suite 200, Coeur d’Alene, Idaho 83815. Concerns relating to accounting, internal controls or auditing matters are immediately brought to the attention of our internal auditor and overseen in accordance with procedures established by the Audit Committee with respect to such matters. From time to time, the Board may change the process by which stakeholders may communicate with the Board or its members. Please refer to our website at www.hecla.com, selecting the tab titled “Company” and then the tab titled “Governance and Ethics,” for any changes in this process.
Board Leadership Structure
Currently, the positions of CEO and Board Chair are held by separate persons. The Board believes this structure is optimal for the Company at this time because it allows the CEO to focus on leading the Company’s business and operations, and the Board Chair to serve as a sounding board and advisor to the CEO, and to lead the activities of the Board. The Board has also determined that having this structure ensures a greater role for the independent directors in the oversight of the Company, and it enhances the Board’s independence and, we believe, senior management’s accountability to the Board.
In the future, if the individual elected as Board Chair also were to be the CEO, the independent directors would elect a Lead Independent Director for a one-year term. This would help ensure continued robust independent leadership of the Board.
Currently, our Board Chair oversees meetings of the Board, as well as the executive sessions with independent members of the Board. The Board Chair’s duties include:
chairing annual shareholder meetings;
overseeing the preparation of agendas for Board meetings;
preparing for executive sessions of the Board and providing feedback to the CEO;
staying current on developments to determine when it may be appropriate to alert the Board to significant pending developments; and
serving as a liaison between independent directors and the CEO with respect to sensitive issues.
Executive sessions of independent directors are included on the agenda for every regularly scheduled Board meeting and were held at each Board meeting in 2022. The executive sessions are chaired by the Board Chair. Our independent directors meet in executive sessions without management present unless the independent directors request their attendance. For the foregoing reasons, we have determined that our leadership structure is appropriate in the context of our specific circumstances.
Board Refreshment
In accordance with our Corporate Governance Guidelines, the Governance Committee reviews annually the composition and size of the Board, may be increased or decreased within that range from time-to-time by resolution approved byrecognizing the affirmative voteimportance of refreshment to maintain a majoritybalance of tenure, diversity, skill sets and experience on our Board. Our Board currently consists of six members, five of whom the Board has affirmatively determined are independent. There are two Class I directors whose terms will expire at the Annual Meeting: Phillips S. Baker, Jr. and George R. Johnson.
Since 2016, we have recruited four new Board members. These four additions to our Board are consistent with our objective to have a Board with expansive and diverse experience, a deep understanding of the Board.challenges and opportunities associated with our business and a focus on value and sustainability for the benefit of all
2023 Proxy Statement 11
Corporate Governance
stakeholders. With the retirement of two of our directors in 2022, our director recruitment efforts are ongoing and further additions to the Board are anticipated.
Identifying and Evaluating Nominees for Director
Director Selection Process
1 | Candidate Recommendations | 2 | Governance Committee | 3 | Board of Directors | 4 | Shareholders
| |||||||||||||||||||
From shareholders, management, directors, and search firms | • Evaluates the Board’s needs and screens and interviews candidates • Reviews qualifications and expertise, tenure, regulatory requirements, and diversity • Recommends nominees to the Board | Discusses, analyzes independence, and selects nominees for election | Vote on nominees at Annual Meeting |
The Corporate Governance and Directors’ Nominating Committee uses a variety of methods for identifying and evaluating nominees for director. The committeeGovernance Committee is responsible for ensuring that the composition of the Board accurately addresses the needs of our business. In the event vacancies are anticipated, or arise, the committeeGovernance Committee considers various potential candidates for director. Candidates may come to the attention of the committeeGovernance Committee through current Board members, professional search firms, shareholders, or other persons. Consideration of new director nominee candidates typically involves a series of internal discussions, review of information concerning candidates and interviews with selected candidates. The committeeGovernance Committee then determines the best qualified candidates based on the established criteria and recommends those candidates to the Board for appointment until such time as they stand for election atby our shareholders.
While the next annual meetingGovernance Committee and our Board prioritize maintaining a board that is comprised of shareholders (or sooner when appropriate).directors with a diverse set of skills, backgrounds, experiences, and perspectives, they also recognize the importance of balancing these qualifications with the overall tenure of directors in their long-term approach to board refreshment. The fresh viewpoints and philosophies newer directors bring, coupled with the valuable experience and institutional knowledge the longer-tenured directors possess, benefits the Board and its overall contribution to the Company and our shareholders.
The Board has appointed four highly qualified directors since 2016 who bring insight to areas such as mining, international business, acquisitions, operations, legal, risk management, geology, engineering, finance, and tax. To supplement our newer directors, our two longer-tenured directors have extensive knowledge of our operations and have the perspective of overseeing our business activities through economic cycles and across differing competitive environments.
We hold the view that the continuing service of qualified incumbents promotes stability and continuity in the boardroom, contributing to the Board’s ability to work as a collective body, while giving us the benefit of familiarity and insight into our affairs that our directors have accumulated during their tenure. Recent additions to the Board provide new perspectives and diversity, while directors who have served for a number of years bring experience, continuity, institutional knowledge, and insight into the Company’s business and industry. Directors with relevant business and leadership experience provide the Board with a useful perspective on business strategy and significant risks, and an understanding of the challenges facing the business. Accordingly, the process for identifying nominees reflects our practice of re-nominating incumbent directors who (i) continue to satisfy the committee’sGovernance Committee’s criteria for membership on the Board, (ii) the committeeGovernance Committee believes continue to make important contributions to the Board, and (iii) consent to continue their service on the Board. Directors should also be able to commit the requisite time for preparation and attendance at regularly scheduled Board and committee meetings, as well as be able to participate in other matters necessary to ensure good corporate governance is practiced.
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Corporate Governance
The committeeGovernance Committee reviews annually with the Board the composition of the Board as a whole and recommends, if necessary, measures to be taken so that the Board reflects the appropriate balance of knowledge, experience, skills, expertise, and diversity required for the Board as a whole, and contains at least the minimum number of independent directors required by applicable laws and regulations.
Board members should possess such attributes and experience as are necessary for the Board as a whole and contain a broad range of personal characteristics, including diversity of backgrounds, management skills, mining, accounting, finance, and business experience. Directors should be able to commit the requisite timeOur current directors exhibit an effective mix of skills, experience, diversity, and perspective. Summarized below is a description of why each core competency is important for preparation and attendance at regularly scheduled Board and committee meetings, as well as be able to participate in other matters necessary to ensure good corporate governance is practiced.service on Hecla’s Board.
Knowledge, Skills and Experience | ||||||||||||
Audit Committee Financial Expert | ∎ | |||||||||||
Board Service on Public Companies We value individuals who understand public company reporting responsibilities and have experience with the issues commonly faced by public companies. Four of our directors have served on boards of other public companies. | ∎ | ∎ | ∎ | ∎ | ||||||||
CEO Experience These skills are important to gain a practical understanding of organizations and drivers of individual growth and development. Five of our directors have had some experience in the administration of a multijurisdictional company. Two of our directors have experience as a chief executive officer. | ∎ | ∎ | ||||||||||
Corporate Governance Experience with governance principles and policies. All of our directors have had experience in corporate governance. | ∎ | ∎ | ∎ | ∎ | ∎ | ∎ | ||||||
Environmental and Social Responsibility Experience with environmental and social responsibility initiatives, including sustainability, diversity, and inclusion. All of our directors have experience in environmental and social responsibility. | ∎ | ∎ | ∎ | ∎ | ∎ | ∎ | ||||||
Finance We believe that an understanding of finance and financial reporting processes is important for our directors to monitor and assess the Company’s operating and strategic performance and to ensure accurate financial reporting and robust controls. It is important to have experience in capital markets, corporate finance, accounting, and financial reporting and several of our director’s satisfy the “accounting or related financial management experience” criteria set forth in the NYSE listing standards. Two of the six directors satisfy the “audit committee financial expert” criteria set forth in regulations of the SEC, but only one of those directors sits on the Audit Committee. All of our directors have financial knowledge and are financially literate. | ∎ | ∎ | ∎ | ∎ | ∎ | ∎ | ||||||
Geology, Mining and Engineering It is important that some of our directors have experience in open-pit and underground mines, as well as knowing the science and technology of extracting minerals, exploration, geology, metallurgy, and geotechnical engineering experience. Two of our directors have experience managing mining operations, and experience in geology, mining, and/or engineering. | ∎ | ∎ | ||||||||||
Industry Experience Having experience in our industry or a similar industry contributes to a deeper understanding of our business strategy, operations, key performance indicators and competitive environment. All of our directors have experience in mining or a similar industry. | ∎ | ∎ | ∎ | ∎ | ∎ | ∎ | ||||||
Industry Association Participation Experience in organizations that support companies and employers in the mining industry and protect their rights. All of our directors have chaired an industry organization. All of our directors have a long and highly regarded reputation in the industry. | ∎ | ∎ | ∎ | ∎ | ∎ | ∎ | ||||||
International Business With operations in Mexico and Canada and prospects for further expansion, international experience helps us understand opportunities and challenges. All of our directors have international business experience. | ∎ | ∎ | ∎ | ∎ | ∎ | ∎ | ||||||
Senior Leadership Experience serving as CEO or a senior business executive, as well as direct leadership experience in core management areas, such as strategic and operational planning, financial reporting, compliance, risk management and leadership development, provides a practical understanding of how organizations like Hecla function. All of our directors have senior business leadership experience. | ∎ | ∎ | ∎ | ∎ | ∎ | ∎ | ||||||
Legal and Compliance Hecla is subject to a broad array of government regulations. Mining is impacted by changes in law or regulation in areas such as safety, environmental and disclosure. Several of our directors have experience in regulated industries, providing them with insight and perspective in working constructively and proactively with governments and agencies. All of our directors have formal legal education or experience in government regulations and understand the legal risks and obligations of the Company. | ∎ | ∎ | ∎ | ∎ | ∎ | ∎ |
2023 Proxy Statement 13
Corporate Governance
Knowledge, Skills and Experience | ||||||||||||
Reputation in the Industry | ∎ | ∎ | ∎ | ∎ | ∎ | ∎ | ||||||
Risk Management Considering the Board’s role in risk oversight, we seek directors who can contribute to the identification, assessment and prioritization of risks facing the Company. All of our directors have experience with our business to understand key areas of risk. | ∎ | ∎ | ∎ | ∎ | ∎ | ∎ | ||||||
Strategic Planning, Business Development, Business Operations Experience defining and driving strategic direction and growth and managing the operations of a business or large organization. All of our directors have experience in setting and managing the strategic direction of a business. | ∎ | ∎ | ∎ | ∎ | ∎ | ∎ |
Gender Diversity | Racial/Ethnic Diversity | Independence | ||||||
33% 2 Females (1 of whom chairs a standing | 16% 1 racial/ethnic minority | 5 of 6 Are independent | ||||||
Board Refreshment | Average Board Tenure | Industry and Operational Experience | ||||||
4 New directors added since 2016 | 10 years | 100% Have industry and operational experience | ||||||
Average Age of Directors | ||||||||
67 |
In general, and as more fully outlined in our Bylaws and Corporate Governance Guidelines, in evaluating director candidates for election to our Board, the committeeGovernance Committee will: (i) consider if the candidate satisfies the minimum qualifications for director candidates as set forth in the Corporate Governance Guidelines; (ii) consider factors that are in the best interests of the Company and its shareholders, including the knowledge, experience, integrity and judgment of each candidate; (iii) consider the contribution of each candidate to the diversity of backgrounds, experience and competencies which the Board desires to have represented, with such diversity being considered among the other desirable attributes of the Board; (iv) assess the performance of an incumbent director during the preceding term; (v) consider each candidate’s ability to devote sufficient time and effort to his or her duties as a director; (vi) consider a candidate’s independence and willingness to consider all strategic proposals; (vii) consider any other criteria established by the Board and any core competencies or technical expertise necessary to manage and direct the affairs and business of the Company, including, when applicable, to enhance the ability of committees of the Board to fulfill their duties; and (viii) determine whether there exists any special, countervailing considerations against nomination of the candidate.
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Table of ContentsCorporate Governance
Director Qualifications, Evaluation, and Nomination
The committee will consider persons recommended by shareholders as nominees for election as directors. Our Bylaws provide that any shareholder who is entitled to vote for the election of directors at a meeting called for such purpose may nominate persons for election to the Board by following the procedures set forth on page 87. Shareholders who wish to submit a proposed nominee to the committee should send written notice to the Corporate Governance and Directors’ Nominating Committee Chairman, c/o Corporate Secretary, Hecla Mining Company, 6500 N. Mineral Drive, Suite 200, Coeur d’Alene, Idaho 83815-9408, within the time period set forth on page 87. The notification should set forth all information relating to the nominee that is required to be disclosed in solicitations of proxies for elections of directors pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (“Exchange Act”), including the nominee’s written consent to being named in the Proxy Statement as a nominee and to serving as a director if elected; the name and address of the shareholder or beneficial owner making the nomination or on whose behalf the nomination is being made; and the class and number of shares of stock of the Company owned beneficially and of record by such shareholder or beneficial owner. The committee will consider shareholder nominees on the same terms as nominees selected by the committee.
Regardless of how a candidate is brought to the committee, qualified candidates are subjected to one or more interviews with appropriate members of the Board. Chosen candidates are extended invitations to join the Board. If a candidate accepts, he or she is formally nominated.
The committee believes that nominees for election to the Board should also possess certain minimum qualifications and attributes. The nominee must: (i) exhibit strong personal integrity, character and ethics, and a commitment to ethical business and accounting practices; (ii) not be involved in ongoing litigation with the Company or be employed by an entity that is engaged in such litigation; and (iii) not be the subject of any ongoing criminal investigations in the jurisdiction of the United States, or any state, thereof,or internationally, including investigations for fraud or financial misconduct. Our Bylaws and Corporate Governance Guidelines provide that directors will not be nominated for re-election after their 72nd birthday.
In connection with the director nominees who are up for re-electionelection at the Annual Meeting, the committeeGovernance Committee also considered the nominees’ rolesnominee’s role in: (i) overseeing the Company’s efforts in complying with its SEC disclosure requirements; (ii) assisting in improving the Company’s internal controls and disclosure controls; (iii) assisting with the development of the strategic plan of the Company; and (iv) working with management to implement the Company’s strategic plangoals and mission statement.plans. Directors are expected to exemplify high standards of personal and professional integrity and to constructively challenge management through their active participation and questioning. Our Bylaws and Corporate Governance Guidelines provide that a director will not be nominated for re-election after their 75th birthday.
In addition to fulfilling the above criteria, each nominee for election to the Board at the upcoming Annual Meeting brings a strong and unique background and set of skills to the Board, giving the Board as a whole competence and experience in a wide variety of areas, including corporate governance, executive management,senior leadership, legal, geology, accounting, finance, mining, exploration, and board service. The committeeGovernance Committee has reviewed the nominees’ overall service to the Company during their terms, including the number of meetings attended, level of participation and quality of performance.
TableMajority Voting for Directors and Director Resignation Policy
Our directors are elected by majority vote (plurality in the case of Contents
a contested election). Our Corporate Governance Guidelines include a director resignation policy. The policy provides that any director who is not elected by a majority of votes cast shall tender his or her resignation to the Governance Committee. The Governance Committee will recommend to the Board whether to accept or reject the resignation offer, or whether another action should be taken. In December 2015, we were saddeneddetermining whether to announcerecommend that the passingBoard accept any resignation offer, the Governance Committee will consider all factors believed relevant by it. The Board will act on the Governance Committee’s recommendation within 90 days following certification of one of our directors, John H. Bowles. After Mr. Bowles’ passing, we reducedthe election results. In deciding whether to accept the resignation offer, the Board will consider the factors considered by the Governance Committee and any additional information and factors that the Board finds relevant. If the Board accepts a director’s resignation offer pursuant to this process, the Governance Committee will recommend to the Board and the Board will thereafter determine whether to fill such vacancy or reduce the size of the Board. Any director who tenders their resignation pursuant to this provision will not participate in the proceedings of either the Governance Committee or the Board with respect to their own resignation offer. If a director’s resignation is not accepted by the Board, the director shall continue to serve until the next annual meeting of shareholders or until their successor is duly elected and qualified, or their earlier resignation or removal.
Diversity
The Company’s Corporate Governance Guidelines provide the Board should include individuals with a diverse range of experiences to give the Board depth and breadth in the mix of skills represented. The Board seeks to include diversity in professional experience, skills, industry background, race/ethnicity, national origin, and gender, as well as the ability of directors (and candidates for director) to devote sufficient time to performing their duties in an effective manner.
Size of the Board of Directors
Our Bylaws require the Board to six. After many discussions with potential director candidates, and careful consideration, on March 1, 2016, the Corporate Governance and Directors’ Nominating Committee recommended andhave not less than five nor more than nine members. The size of the Board may be increased or decreased within that range from time-to-time by resolution approved an increase inby the affirmative vote of a majority of the Board. On May 26, 2022, the Board decreased the size of the Board from eight members to six members due to eight and appointedthe retirement of two newdirectors.
2023 Proxy Statement 15
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.
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.
If elected, the nominees will each serve for a three-year term ending in 2019. The nominees are as follows:
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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.
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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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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.
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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.
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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.
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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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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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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.
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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.
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.
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.
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 $76,000
of additional stock to the directors as part of their compensation. The Board approved the additional award, and each of the directors received 31,148 additional shares under the 2010 Stock Incentive Plan in July 2015.
As described more fully above, the following chart summarizes the annual cash and equity compensation for our non-management directors during 2015.
Non-Management Director Compensation for 2015
Fees | ||||||||||||||||
Director | Annual Retainer ($) | 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 |
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.
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.
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.
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.
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.
16 www.hecla.com
Corporate Governance
The Charters for each of these committees, can be found at www.hecla.com, and then selecting the tab titled “Company” and then selecting “Governance and Ethics.”
2023 Proxy Statement 17
Corporate Governance
Succession Planning
The Compensation Committee is responsible for overseeing the Company’s succession planning process for our CEO and other key senior executives, and annually reviews the Company’s succession plans for all key senior executives with input from the CEO and SVP – CAO. The criteria used when assessing the qualifications of potential CEO successors include, among others, strategic vision and leadership, operational experience, financial management, executive officer leadership development, ability to motivate employees, and an ability to develop an effective working relationship with the Board.
Emergency Succession Plan
Our Corporate Governance Guidelines provide among other things, that in the event of the death, resignation, removal or incapacitation of the President and CEO, the Board Chair will haveact as the President and CEO until a majoritysuccessor is duly elected.
They also provide that in the event of directorsthe death, resignation, removal or incapacitation of our Board Chair, the President and CEO will act as Board Chair until a successor is duly elected.
In the event of an unexpected executive departure, the emergency succession plan provides for a transfer of responsibilities to an individual who meetmay or may not be permanently appointed to the criteria for independence required bynew role.
In the NYSE. In determining independence each year, the Corporate Governance and Directors’ Nominating Committee affirmatively determines whether directors have any “material relationship” with the Company. When assessing the “materiality”event of a director’s relationshipsenior executive’s departure, both internal and external candidates may be considered for permanent appointment to such role.
Long-Term Succession Plan
The long-term succession plan is intended to develop a pipeline of qualified talent for key roles.
The planning process includes a discussion of internal succession candidates, assessment of relevant skills and planning for professional development where necessary. Multiple internal succession candidates may be identified for an individual role and provided with the Company, the committee considers all relevant facts and circumstances, not merelygrowth opportunities. The Board gains insight through direct exposure to internal succession candidates from the director’s standpoint, but from that of the persons or organizations with which the director has an affiliation. The committee also reviews the frequency or regularity of services or transactions between the Company and directors, whether the services or transactions are being carried out at arm’s length in the ordinary course of business and whether the services or transactions are being provided substantially on the same termstheir presentations to the Company as those prevailing at the time from unrelated parties for comparable services or transactions. Material relationships can include commercial, banking, industrial, consulting, legal, accounting, charitable and familial relationships. To guide its determination of whether a director is independent, the Board, has adopted the following NYSE listing standards:
A director will not be independent if:
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Pursuant to our Corporate Governance Guidelines, the committee undertook its annual review of director independence in February 2016. During this review, the committee considered transactions and relationships between each director or any member of his immediate family and Hecla and our subsidiaries and affiliates, including relationships described below and any reported on page 25 underCertain Relationships and Related Transactions. The committee also examined transactions and relationships betweenwork with individual directors or Board committees, and participation in Board activities.
The Company’s short- and long-term business strategy will be considered when evaluating internal succession candidates and their affiliates and members of our senior management or their affiliates. As provided in the Corporate Governance Guidelines, the purpose of this review was to determine whether any such relationships or transactions were inconsistent with a determination that the director is independent.skills.
Based upon an assessment of all facts and circumstances known to the committee, including, among other things, a review of questionnaires submitted by our directors, the committee and the Board affirmatively determined that the following directors are independent of the Company and its management under the standards set forth by the NYSE:
Messrs. Stanley and Baker both serve as members of the board of directors of QEP Resources, Inc., of which Mr. Stanley is also the chief executive officer. The committee reviewed this relationship with the Board, and the Board made the affirmative decision that this relationship did not disqualify Mr. Stanley from being independent. Neither Mr. Baker nor Mr. Stanley serves on the Compensation Committee of either Hecla or QEP Resources, Inc.
Mr. Baker is our President and CEO. As such, he cannot be deemed independent under the NYSE listing standards.
Directors are expected to immediately inform the Board of any material change in their circumstances or relationships that may impact their independence.
There are currently no family relationships between the directors or executive officers of Hecla.
Board Leadership and Executive Sessions
Currently, the positions of CEO and Chairman of the Board (“Chairman”) are held by separate persons. The Board believes this structure is optimal for the Company at this time because it allows the CEO to focus on leading the Company’s business and operations, and the Chairman to serve as a sounding board and advisor to the CEO, and to lead the activities of the Board. The Board has also determined that having a non-management director serve as Chairman is in the best interest of shareholders. This structure ensures a greater role for the independent directors in the oversight of the Company and it enhances the Board’s independence and, we believe, senior management’s accountability to the Board.
Mr. Ted Crumley chairs meetings of the Board, as well as the executive sessions with independent members of the Board. His duties include chairing annual meetings of shareholders, overseeing the preparation of agendas forBoard meetings, preparing for executive sessions of the Board and providing feedback to the CEO, staying current on developments to determine when it may be appropriate to alert the Board to significant pending developments, serving as a liaison between independent directors and the CEO with respect to sensitive issues, and other matters. Executive sessions of non-management directors are included on the agenda for every regularly scheduled Board meeting and during 2015, executive sessions were held at each regularly scheduled Board meeting. The executive sessions are chaired by the Chairman. Our non-management directors meet in executive sessions without management present, unless the non-management directors request their attendance.
For the foregoing reasons we have determined that our leadership structure is appropriate in the context of our specific circumstances.
Each year, the Board conducts a self-evaluation of its performance and effectiveness. As part of this process, each director completes an evaluation form on specific aspects of the Board’s role, organization and meetings. The collective comments are then presented by the chair of the Corporate Governance and Directors’ NominatingCommittee to the whole Board. As part of the evaluation, the Board assesses the progress in the areas targeted for improvement a year earlier, and develops actions to take to enhance the Board’s effectiveness over the next year. Additionally, each committee conducts an annual self-evaluation of its performance through a similar process.
Committees of the Board and Committee Assignments
The Board has fivesix standing committees: Audit; Compensation; Corporate Governance and Directors’ Nominating;Social Responsibility; Health, Safety, Environmental &and Technical; Executive; and Executive.Non-Executive Stock Award. Information regarding these committees is provided below. WithExcept for the exception of the Executive Committee and Non-Executive Stock Award Committee, all committees are composed entirely of independent directors. With the exception of the Executive Committee, the charters of each of the other committees are available on the Company’s website at http://www.hecla-mining.com under “Investors” by selecting “Corporate Governance.” You may also obtain copies of these charters by contacting the Company’s Investor Relations Department. The members of the Board on the date of this Proxy Statement, and the committees of the Board on which they serve,each committee are identified below, along with the number of meetings held in 2015.2022.
In 2015, the Audit Committee consisted of John H. Bowles (Chair), Charles B. Stanley, and Terry V. Rogers. After the death of Mr. Bowles in December 2015, the Corporate Governance and Directors’ Nominating Committee recommended and the Board approved the appointment of Charles B. Stanley as the Chair and also appointed Ted Crumley to the Audit Committee. As of the filing of our financial statements in our Annual Report on Form 10-K for the year ended December 31, 2015, on February 23, 2016, the committee members consisted of Charles B. Stanley (Chair), Ted Crumley and Terry V. Rogers.
At a meeting held in February 2016, the Corporate Governance and Directors’ Nominating Committee recommended and the Board approved the appointment of George R. Johnson and Stephen F. Ralbovsky to the Audit Committee, effective March 1, 2016. Mr. Johnson was also appointed to the Health, Safety, Environmental and Technical Committee, effective March 1, 2016. Mr. Ralbovsky was also appointed to the Corporate Governance and Directors’ Nominating Committee, effective March 1, 2016.
At the effective time of the appointments of Messrs. Johnson and Ralbovsky to the Audit Committee on March 1, 2016, Mr. Crumley withdrew as a member of the Audit Committee.
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Audit Committee |
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Meetings in 2022: 5 |
| Primary Responsibilities • assist the Board in fulfilling its oversight • review the integrity of our financial • review the independent auditor’s qualifications and • review the performance of our internal auditor and the independent • review our compliance with laws and regulations, including disclosure controls and • review financial risks; • oversee the performance of the Company’s independent registered public accounting firm and internal auditor; • review the qualifications and independence of the Company’s independent registered public accounting firm; and • oversee the effectiveness of the Company’s internal control over financial reporting. See Report of the Audit Committee | ||||||||
2022 Meeting Attendance: 100% | ||||||||||
Current Committee Members Stephen F. Ralbovsky, Chair ∎ George R. Johnson Catherine J. Boggs Alice Wong ∎ = Financial Expert All members of the Audit Committee are financially literate No members on the Audit Committee serve on the audit committee of any other public companies Committee consists of four independent directors |
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Corporate Governance
| Compensation Committee |
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Primary Responsibilities • discharge the Board’s responsibilities relating to compensation of the Company’s executive officers; • approve the design of our compensation program; • approve compensation levels and programs for the executive officers, including the • administer the Company’s cash-based and equity- based incentive compensation plans; and • administer our stock-based See The Compensation Committee Process and the | 40 for more information.
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2022 Meeting Attendance: 100% | |||||||||
Current Committee Members Charles B. Stanley, Chair George R. Johnson Catherine J. Boggs Committee consists of three independent directors |
Responsibility Committee | |||||||||
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Meetings in 2022: 4 |
| Primary Responsibilities • periodically review our Corporate Governance Guidelines, Code of Conduct, and other corporate procedures to ensure compliance with laws and • review any director candidates, including those nominated or recommended by • identify individuals qualified to become directors consistent with criteria approved by the • recommend to the Board the director nominees for the next annual meeting of shareholders, any special meeting of shareholders, or to fill any vacancy on the • review the appropriateness of the size of the Board relative to its various • recommend committee assignments and committee • recommend policies, programs, practices, metrics, performance indicators and progress concerning ESG matters to the Board; and • recommend to the Board | any action on ESG and related matters that may be required or considered advisable.
| See Sustainability and Corporate Governance on pages 5 and 10 for more information. | |||||
2022 Meeting Attendance: 100% | |||||||||
Current Committee Members Alice Wong, Chair Stephen F. Ralbovsky Catherine J. Boggs Committee consists of three independent directors |
2023 Proxy Statement 19
Corporate Governance
Health, Safety, Environmental |
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Meetings in 2022: 4 |
| Primary Responsibilities • review operational and exploration performance; • review operational, reserve, and other technical risks; • review and monitor health, safety, and environmental • review the implementation and effectiveness of compliance • review the effectiveness of health, safety and environmental policies, systems, and monitoring • review audit results and updates from management with respect to health, safety, and environmental • review emerging health, safety and environmental trends in legislation and proposed regulations affecting the • review the technical activities of the • make recommendations to the Board concerning the advisability of proceeding with the exploration, development, acquisition, or divestiture of mineral properties and/or | ||||||
2022 Meeting Attendance: 100% | ||||||||
Current Committee Members George R. Johnson, Chair Stephen F. Ralbovsky Charles B. Stanley Alice Wong |
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Executive Committee | |
Meetings in 2022: None |
Primary Responsibilities • empowered with the same authority as the Board in the management of our business, except for certain matters enumerated in our Bylaws and Delaware law, which are specifically reserved to the whole Board. | |
2022 Meeting Attendance: N/A | ||
Current Committee Members Phillips S. Baker, Jr., Chair Catherine J. Boggs |
Non-Executive Stock Award Committee | ||
Meetings in 2022: 1* | Primary Responsibilities • empowered with the authority to make awards under the Hecla Mining Company 2010 Stock Incentive Plan to employees of the Company or any of its direct and indirect subsidiaries who are not executive officers of the Company or otherwise subject to the requirements of Section 16 of the Securities Exchange Act of 1934, as amended. | |
2022 Meeting Attendance: N/A | ||
Current Committee Members Phillips S. Baker, Jr., Chair |
* | By Unanimous Consent |
While the 20 www.hecla.com
Corporate Governance
Board has not adopted a formal policy on diversity, the Company’sand Committee Independence; Audit Committee Financial Expert
Our Corporate Governance Guidelines provide that the Board will have a majority of directors who meet the criteria for independence as defined in the NYSE rules. Based on information solicited from each director, and upon the advice and recommendation of the Governance Committee, our Board annually determines the independence of each of our directors in connection with the nomination process. Further, in connection with the appointment of any new director to the Board during the year, our Board makes the same determination. In making its recommendation to the Board, the Governance Committee, with assistance from the Company’s Corporate Secretary, evaluates responses to a whole,questionnaire completed by each director regarding relationships and possible conflicts of interest between such director, the Company, management, the independent registered public accounting firm, and the internal audit firm. In its review of director independence, the Governance Committee considers the commercial, industrial, banking, consulting, legal, accounting, charitable, and familial relationships any director may have with the Company, management, the independent registered public accounting firm, and the internal auditor.
Our Board has affirmatively determined that all current directors (other than Mr. Baker) have no material relationship with the Company and are independent according to the NYSE listing standards. The Board has determined that each member of the Audit, Compensation, and Governance Committees has no material relationship with the Company and they each satisfy the independence criteria (including the enhanced qualifications with respect to members of the Audit Committee and Compensation Committee) set forth in the applicable NYSE listing standards and SEC rules. In addition, the Board has determined that Mr. Stephen F. Ralbovsky qualifies as an “Audit Committee financial expert,” as such term is defined by the rules of the SEC.
Directors are expected to immediately inform the Board of any material change in their circumstances or relationships that may impact their independence.
Compensation Committee Procedures
The Compensation Committee has the sole authority to set compensation for our executive officers, including annual compensation amounts and Short-term Incentive Plan and Long-term Incentive Plan criteria, evaluate the performance of our executive officers, and make awards to our executive officers under our stock incentive plans. The Compensation Committee also reviews and approves any proposed plan or arrangement providing for incentive, retirement or other compensation to our executive officers and oversees our assessment of whether our compensation practices are likely to expose the Company to material risks. In addition, the Compensation Committee annually recommends to the Board the slate of officers for the Company, periodically reviews the functions of our officers, and makes recommendations to the Board concerning those functions.
2022 Board Meetings and Attendance
Directors are expected to make every effort to attend the Annual Meeting, all Board meetings, and the meetings of the committees on which they serve. During 2022, there were seven meetings of the Board. In 2022, each director attended 100% of the Board meetings and the committee meetings in which they are a member. All members of the Board attended last year’s Annual Meeting of Shareholders, which was held in May 2022.
Director Orientation and Continuing Education
New directors undergo a comprehensive orientation program that introduces them to the Company, including our business operations, strategy, financial position, key members of management and governance structure. Directors also are encouraged to enroll in director education programs. Directors have contact with leaders throughout the organization and visit our mine sites, where they tour the facilities and interact directly with the personnel responsible for our day-to-day operations. These activities collectively help to ensure that new directors become, and existing directors remain, knowledgeable about the most important issues affecting our Company and our business.
2023 Proxy Statement 21
Corporate Governance
Board and Committee Self-Evaluation Process
Our Board recognizes that a thorough, constructive evaluation process enhances our Board’s effectiveness and is an essential element of good corporate governance. Accordingly, every year, our Board and each committee of the Board conducts a self-evaluation of its performance and effectiveness. The Governance Committee oversees the annual self-evaluation process on behalf of the Board. Our Board and committee evaluations cover the following topics:
Board and committee composition, including skills, background, and experience;
review of key areas of focus for the Board and committees, and effectiveness in overseeing those responsibilities;
satisfaction of director performance, including that of the Board Chair;
Board and committee information needs, and quality of materials presented;
areas where the Board should include individualsincrease its focus;
satisfaction with a diverse range of experience to give the Board depth and breadth incommittee schedules, agendas, time allocated for topics and encouragement of open communication and discussion;
access to management, experts, and internal and external resources;
oversight of financial reporting process and internal control procedures;
ethics and compliance;
Company’s strategic direction and annual operating plan;
succession planning;
selection and evaluation process of Board candidates; and
understanding risks.
Evaluation Process
1 | Corporate Governance Review | 2 | Annual Board and Committee Evaluations | 3 | Summary of Evaluations | 4 | Board and Committee Review
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Our self-evaluation process is conducted on an anonymous basis, using our board portal. We have found by using an anonymous evaluation process, the Board and committee members have a level of comfort in being able to critique the Board and/or the committees. | The Board and each committee conduct annual self-evaluations through the use of electronic questionnaires in the board portal that cover the topics discussed above. | Hecla’s Corporate Secretary uses our board portal to generate a summarized report of our directors’ anonymous responses to the electronic questionnaires and submits the report to the appropriate chair of each committee of the Board for review before the next quarterly Board and/or committee meeting. | Using the summaries of the self-evaluations as guides, our chair of the Governance Committee reviews the results of the Board evaluation, and each committee chair reviews the results of each committee evaluation. The self-evaluations and summaries are shared and discussed with the full Board and each committee. The objective is to allow the Board and each committee to share their perspectives and consider any necessary adjustments in response to the collective feedback from the self-evaluations. |
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Corporate Governance
Shareholder Proposals for the mix2024 Annual Shareholders’ Meeting
Our Bylaws establish procedures governing the nomination and eligibility of skills represented. Thenominees for election to our Board, seeksand the proposal of business to includebe considered by our shareholders at an arrayannual meeting of skills and experience in its overall composition ratherthan requiring every director to possess the same skills, perspective, and interests. This guideline is implemented by seeking to identify candidates who bring diverse skill sets, backgrounds, and experiences, including ethnic and gender diversity, to the Board when director candidates are needed.
Shareholdersshareholders. For nominations or other interested parties wishingbusiness to communicate withbe properly brought before an annual meeting of shareholders by a shareholder, the Chairman or with the independent directors as a group may do so by delivering or mailing the communicationshareholder must have given timely notice thereof in writing to: Chairman of the Board, c/oto our Corporate Secretary. To be timely, a shareholder’s notice must be delivered to our:
Corporate Secretary Hecla Mining Company,
6500 N. Mineral Drive, Suite 200
Coeur d’Alene, Idaho 83815-9408. Concerns relating83815-9408
Ø | not less than 90 days nor more than 120 days prior to the first anniversary of the preceding year’s annual meeting of shareholders; provided, however, that in the event the date of the annual meeting of shareholders is advanced by more than 30 days or delayed by more than 60 days from such anniversary date, notice by the shareholder to be timely must be delivered not earlier than the 120th day prior to such annual meeting of shareholders and not later than the close of business on the later of the 90th day prior to such annual meeting of shareholders or the 10th day following the day on which public announcement of the date of such meeting is first made. Adjournment of a meeting shall not commence a new time period for giving shareholder’s notice as described above. Such shareholder’s notice must include the information specified in our Bylaws. |
Ø | the deadline for providing notice to the Company under Rule 14a-19, the SEC’s universal proxy rule, of a shareholder’s intent to solicit proxies in support of nominees submitted under the Company’s advance notice Bylaws is March 27, 2024. |
Ø | the applicable time period for timely shareholder submissions pursuant to the above provisions for the 2024 Annual Meeting of Shareholders is January 24, 2024 (the 120th day preceding the anniversary of the 2023 Annual Meeting) to February 23, 2024 (the 90th day preceding such anniversary). |
The Board Chair of the meeting shall have the power and duty to accounting, internal controlsdetermine whether a nomination or auditing matters are immediatelyany business proposed to be brought to theattention of our internal auditor and handledbefore the meeting was made in accordance with the procedures establishedset forth in the Bylaws and, if any proposed nomination or business is not in compliance with the Bylaws, to declare that such defective proposal shall be disregarded. The foregoing time limits also apply in determining whether notice is timely for purposes of rules adopted by the Audit CommitteeSEC relating to the exercise of discretionary voting authority.
2023 Proxy Statement 23
PROPOSAL 1
ELECTION OF CLASS I DIRECTORS
In accordance with respect to such matters. From time to time,our Restated Certificate of Incorporation, the Board may changeis divided into three classes. The terms of office of the process by which shareholders may communicate withdirectors in each class expire at separate times. There are two Class I directors whose terms will expire at the Annual Meeting: Phillips S. Baker, Jr. and George R. Johnson.
The Governance Committee determined that each of Mr. Baker and Mr. Johnson are qualified candidates to stand for election at the Annual Meeting, and the Board or its members. Please refer to our website at http://www.hecla-mining.com under the tab entitled “Investors” and then select the tab entitled “Corporate Governance”designated them for any changes in this process.
In lightelection as directors of the critical importanceCompany, for three-year terms expiring in 2026.
It is intended that the proxies solicited hereby from our shareholders that do not provide voting instructions will be voted FOR the election of executive leadershipPhillips S. Baker, Jr. and George R. Johnson. If Mr. Baker or Mr. Johnson become unable or is unwilling to accept election, the Board will either reduce the number of directors to be elected or select substitute nominees submitted by the Governance Committee. If substitute nominees are selected, proxies that do not provide voting instructions will be voted in favor of such nominees.
Biographical Information
Set forth below is biographical information for the director nominees, including the key qualifications, experience, attributes, and skills that led our Board to the Company’s success, the Compensation Committee is chargedconclusion that such nominees should serve as a director. There are no family relationships among any of our directors or executive officers.
Our Board includes individuals with the responsibilitystrong backgrounds in senior leadership and management, legal, geology, accounting, finance, and company and industry knowledge, and we believe that, as a group, they work effectively together in overseeing our business.
24 www.hecla.com
Proposal 1 — Election of developing a processClass I Directors
Current Class I Nominees for identifying and evaluating candidates to succeed our CEO and to report annuallyElection to the Board on– Terms Ending at the status of2023 Annual Meeting
If elected, the succession plan, including issues related to the preparednessnominees will serve for the possibility of an emergency situation involving senior management and assessment of the long-term growth and development of the senior management team.
a three-year term ending in 2026. The CEO and Director of Human Resources make a formal succession planning presentation to the Compensation Committee annually. The Compensation Committee reviews recommended candidates for senior management positionsnominees are as part of the process to identify and gauge the availability of qualified candidates for those positions and receives reports concerning development plans that are utilized to strengthen the skills and qualifications of the candidates. The criteria used when assessing the qualifications of potential CEO successors include, among others, strategic vision and leadership, operational excellence, financial management, executive officer leadership development, ability to motivate employees, and an ability to develop an effective working relationship with the Board.
In 2015, the Compensation Committee conducted a full executive talent review of all NEOs, with an emphasis on CEO succession. In connection with that review, the Compensation Committee identified potential successors to the CEO.
In conjunction with the succession review, management also reviewed potential successors for the top management roles across Hecla. In connection with that review, we concluded that “ready now” potential successors exist for approximately one-third of those roles, which represents an increase in the level of readiness of our talent compared to previous years. We created development plans for the potential successors who were identified as being ready in one to two years or three to five years. By the end of 2015, we had greater visibility into our talent pool and we used that information to build the succession plans for the next tier of critical roles.
Our Corporate Governance Guidelines also provide that in the event of the death, resignation, removal or incapacitation of the President and CEO, the Chairman will act as the President and CEO until a successor is duly elected. In addition, our Corporate Governance Guidelines and Bylaws provide that in the event of the death, resignation, removal or incapacitation of our current Chairman, the President and CEO will act as Chairman until his successor is duly elected.follows:
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Electronic Access to Corporate Governance Documents
Our corporate governance documents are available by accessing our website at http://www.hecla-mining.com under the tab entitled “Investors” and then selecting the tab entitled “Corporate Governance.” These include:
Phillips S. Baker, Jr. | |||||
President and Chief Executive Officer | |||||
Age: 63 Director since: 2001 Other Directorships: None | Hecla Committees: • Executive (Chair) • Non-Executive Stock Award Committee | ||||
Mr. Baker has been our Chief Executive Officer since May 2003 and | |||||
Board Qualification and Skills: Mr. Baker began his career in the mining industry in 1986 and has been an officer or director of |
Shareholders may also request a free copy of these documents from: Investor Relations, Hecla Mining Company, 6500 N. Mineral Drive, Suite 200, Coeur d’Alene, Idaho 83815-9408; (208) 769-4100.
Corporate Governance Guidelines
The Corporate Governance Guidelines were adopted by the Board to ensure that the Board is independent from management, that the Board adequately performs its function as the overseer of management, and to help ensure that the interests of the Board and management align with the interests of our shareholders. In December 2014, the Corporate Governance and Directors’ Nominating Committee and the Board amended the Corporate Governance Guidelines to more precisely track statutory requirements to improve its clarity and functionality, as well as to more closely match the Company’s evolving practices.
Code of Business Conduct and Ethics
We believe that operating with honesty and integrity has earned trust from our shareholders, credibility within our community, and dedication from our employees. Our directors, officers and employees are required to abide by our Code of Business Conduct and Ethics to promote the conduct of our business in a consistently legal and ethical manner. Our Code of Business Conduct and Ethics covers many topics, including conflicts of interest, confidentiality, fair dealing, proper use of the Company’s assets, and compliance with laws, rules and regulations. In addition to the Code of Business Conduct and Ethics for directors, officers and employees, our CEO, Chief Financial Officer and Controller are also bound by a Code of Ethics for the Chief Executive Officer and Senior Financial Officers.
The Corporate Governance and Directors’ Nominating Committee has adopted procedures to receive, retain, and react to complaints received regarding possible violations of the Code of Business Conduct and Ethics, and to allow for the confidential and anonymous submission by employees of concerns regarding possible violations of the Code of Business Conduct and Ethics. Our employees may submit any concerns regarding apparent violations of the Code of Business Conduct and Ethics to their supervisor, our General Counsel, the Chair of the Corporate Governance and Directors’ Nominating Committee, or through an anonymous telephone hotline.
We have a Whistleblower Policy adopted by our Audit Committee that encourages our employees to report to appropriate Company representatives, without fear of retaliation, certain accounting information relating to possible fraud. Our employees may submit any concerns regarding financial statement disclosures, accounting, internal accounting controls or auditing matters to the Audit Committee, our General Counsel, or through an anonymous telephone hotline. The goal of this policy is to discourage illegal activity and business conduct that damages Hecla’s reputation, business interests, and our relationship with shareholders.
George R. Johnson | ||||
Age: 74 Director since: 2016 Other Directorships: B2Gold Corporation | Hecla Committees: • Health, Safety, Environmental and Technical (Chair) • Audit • Compensation |
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Board Qualification and Skills: Mr. Johnson has over 45 years of foreign and domestic experience in underground and open pit mine construction and operations management as a mining engineer. |
Certain Relationships and Related TransactionsRequired Vote
We review all relationships and transactions with related persons to determine whether such persons have a direct or indirect material interest. Transactions with related persons are those that involve our directors, executive officers, director nominees, greater than 5% shareholders, immediate family members of these persons, or entities in which one of these persons has a direct or indirect material interest. Transactions that are reviewed as related party transactions by us are transactions that involve amounts that would exceed $120,000 (the current threshold required to be disclosed in the Proxy Statement under SEC regulations) and certain other transactions. Pursuant to our Code of Business Conduct and Ethics, employees and directors have a duty to report any potential conflicts of interest to the appropriate level of management or to the Corporate Governance and Directors’ Nominating Committee. We evaluate these reports along with responses to our annualBylaws, each director and officer questionnaires for any indication of possible related party transactions. Our legal staff is primarily responsible for the development and implementation of processes and controls to obtain information from the directors and executive officers with respect to related party transactions. If a transaction is deemed by us to be a related party transaction, the information regarding the transaction is discussed with the Board. As required under the SEC rules, transactions that are determined to be directly or indirectly material to Hecla or a related party are disclosed in our Proxy Statement.
In December 2007, we created the Hecla Charitable Foundation (the “Foundation”). We have made and intend to continue to make charitable contributions to the Foundation, which in turn has provided and intends to continue to provide grants to other organizations for charitable and educational purposes. James A. Sabala and Dr. Dean W.A. McDonald (our Senior Vice President and Chief Financial Officer and Senior Vice President – Exploration, respectively) serve as directors of the Foundation. In December 2007, our Board made a contribution of 550,000 shares of our common stock to the Foundation. Since 2007, the Foundation has sold 279,860 shares of our common stock. Cash contributions totaling $2.0 million and $1.5 million were made by the Company to the Foundation during 2011 and 2010, respectively. The funds from the sale of the shares and the additional cash were put into various investment accounts. The Foundation is currently operating in a self-sufficient manner. The Company gave no additional funds to the Foundation during 2015. The Foundation holds 270,140 shares of our common stock as of December 31, 2015. The value of those shares based on the closing price of our common stock on the NYSE on December 31, 2015 ($1.89), was $510,565. In 2015, the Foundation gave $331,575.13 in donations.
In 2015, we did not make any contribution to any charitable organization, of which a director served as an executive officer, which exceeded the greater of $1 million or 2% of the charitable organization’s consolidated gross revenues.
PROPOSAL 2 – APPROVAL OF AMENDMENTS TO THE COMPANY’S CERTIFICATE OF INCORPORATION AND BYLAWS TO REMOVE CERTAIN 80% SUPERMAJORITY VOTING PROVISIONS
There are certain provisions in our Certificate of Incorporation (the “Certificate”) and Bylaws that can only be revised through the affirmative vote of the holders of at least 80% of the voting power of the then outstanding shares of our capital stock entitled to vote generally in the election of directors. We refer to these shares as “Voting Stock” and to this voting requirement as “80% supermajority” throughout this Proposal 2 and Proposal 3. Certain of these provisions relate to the authority to call special meetings of shareholders, and currently, only our Board has such authority.
We are seeking the approval of our shareholders to amend our Certificate and Bylaws to remove those 80% supermajority voting requirements that impact who may call special meetings of shareholders, and replace them with two-thirds voting standards. We refer to this lower voting requirement as “two-thirds vote” throughout this Proposal 2 and Proposal 3. If approved, this proposal would become effective upon the filing of an amendment to our Certificate with the Secretary of State of Delaware, which we intend to do promptly after the required shareholder approval is obtained, at which time the related amendment to our Bylaws would also become effective.
As described more fully below under Proposal 3, in 2014, we sought the approval of our shareholders to amend the Certificate and Bylaws to add a right permittingshareholders who have held at least a 25% “net long position” in our outstanding common stock for at least 120 days to call special meetings of shareholders, subject to the conditions set forth in our Bylaws (we refer to this as the “Special Meeting Proposal”). In order to implement the Special Meeting Proposal, an 80% supermajority vote of our shareholders was required. The 80% supermajority vote was not obtained in 2014 and as a result we were unable to implement the Special Meeting Proposal.
We are again proposing the Special Meeting Proposal at our 2016 Annual Meeting of Shareholders. It is described in Proposal 3 below.
We believe that the 80% supermajority vote requirement is an impediment to implementing the Special Meeting Proposal because of the difficulty in getting the holders of that many shares to vote at a shareholders meeting. If instead of the 80% supermajority provisions, the required vote to implement the Special Meeting Proposal was two-thirds of the Voting Stock, we believe the Special Meeting Proposal would have a better chance to be approved by our shareholders. However, even with the change to the lower two-thirds vote requirement, there is no assurance that the Special Meeting Proposal will be approved by the required vote of our shareholders. SeeRequired Vote, Our Board’s Recommendation and Additional Informationon page 28.
Current Provisions in Certificate and Bylaws
Currently, the Certificate states that shareholders can alter, amend or repeal certain Bylaws relating to calling a special meeting of shareholders, only if that action is approved by at least 80% supermajority rate (this supermajority voting provision is in Article V of the Certificate). Likewise, the Certificate currently states that at least 80% supermajority vote is necessary to alter, amend or repeal Article VII of the Certificate, which provides that special meetings of shareholders can only be called by our Board. Finally, the Bylaws also contain a similar provision regarding amending the provision therein concerning calling special meetings of shareholders.
Set forth below are the relevant provisions of the Certificate and Bylaws:
ARTICLE V.
Bylaws
In furtherance and not in limitation of the powers conferred by law, the Board is expressly authorized to make, repeal, alter, amend and rescind the bylaws of the Corporation by a majority vote of the entire Board at any regular or special meeting of the Board;provided, however that, notwithstanding anything contained in this Certificate of Incorporation or the Bylaws of the Corporation to the contrary, the affirmative vote of the holders of at least 80% of the voting power of the then outstanding shares of Voting Stock, voting together as a single class, shall be required to (i) alter, amend or repeal any provision of the Bylaws which is substantially identical to and/or implements the last sentence of Article IV or Articles VI, VII or VIII, of this Certificate of Incorporation, or (ii) alter, amend or repeal any provision of this proviso to Article V.
ARTICLE VII.
Actions by Shareholders
Any action required or permitted to be taken by the shareholders of the Corporation must be effected at a duly called annual or special meeting of shareholders of the Corporation and may not be effected by any consent in writing by such shareholders.Special meetings of shareholders of the Corporation may be called only by the Board pursuant to a resolution approved by a majority of the entire Board. Notwithstanding anything contained in this Certificate of Incorporation to the contrary, the affirmative vote of the holders of at least 80% of the voting power of the then outstanding shares of Voting Stock, voting together as a single class, shall be required to alter, amend or repeal this Article VII.
ARTICLE VI.
Amendments
These Bylaws may be altered or repealed and Bylaws may be made at any annual meeting of the shareholders or at any special meeting thereof if notice of the proposed alteration or repeal of Bylaws to be made be contained in the notice of such meeting, by the affirmative vote of the holders of a majority of the total voting power of all outstanding shares of the voting stock of the Corporation. These Bylaws may also be altered or repealed and Bylaws may be madeelected by the affirmative vote of a majority of votes cast at the Board of Directors, at any annualAnnual Meeting, whether in person or regular meeting ofby proxy. See What Votes are Required for the Board of Directors, or at any special meeting ofProposals on page 88.
You may vote “FOR,” “AGAINST,” OR “ABSTAIN” on the Board of Directors if notice of the proposed alteration or repeal, or Bylaws or Bylaws to be made, be contained in the notice of such special meeting.nominees for election as directors.
Notwithstanding anything contained in these Bylaws to the contrary, the affirmative vote of the holders of at least 80% of the voting power of all of the shares of the capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class, shall be required to alter, amend or repeal Section 4 or 6 of Article II, or Section 1, 2 or 3 of Article III, of these Bylaws.
Proposed Amendments to Certificate and Bylaws
This Proposal 2 proposes to amend the Certificate and Bylaws so that future amendments to certain provisions within the Certificate and the Bylaws can be approved by a two-thirds vote of the outstanding shares rather than an 80% supermajority vote. Specifically, in this Proposal 2, we propose:
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Required Vote, Our Board’s Recommendation and Additional Information
Our Board is committed to good governance practices and this Proposal 2 is the result of our Board’s ongoing review of our corporate governance principles. As part of that review, our Board recognizes that the chances of obtaining shareholder approval of the Shareholder Meeting Proposal described below in Proposal 3 in the future (if it is not approved at the 2016 Annual Meeting) may be improved if the changes to the Certificate and Bylaws described in this Proposal 2 are approved by our shareholders. Although Proposal 2 and Proposal 3 will each require the affirmative vote of holders of at least 80% of our outstanding shares of common stock, the approval of one of these proposals is not conditioned on the other, and if Proposal 2 is passed but Proposal 3 is not, then if in the future we again seek approval of the Special Meeting Proposal, it would only need to be approved by the lower two-thirds vote rather than the current 80% supermajority vote.
After receiving shareholder input and the advice of management and outside advisors, our Board considered the relative weight of the arguments in favor of and opposed to maintaining the 80% supermajority voting requirements described herein. As a result, and based upon the recommendation of the Corporate Governance and Directors’ Nominating Committee, our Board, at its meeting on February 20, 2016, approved and declaredadvisable and in our shareholders’ best interests, the amendments to the Certificate and Bylaws described in this Proposal 2.
The above description is a summary, and is qualified by and subject to the full text of the proposed amendments to our Certificate and Bylaws, which are set forth inAppendix A andAppendix B, respectively. Additions of text contained in the appendices are indicated by underlining and deletions of text are indicated by strikeouts.
According to our current Certificate and Bylaws, approval of this proposal requires the affirmative vote of holders of at least 80% of our outstanding shares of common stock.
2023 Proxy Statement 25
TableProposal 1 — Election of Contents
PROPOSAL 3 – APPROVAL OF AMENDMENTS TO THE COMPANY’S CERTIFICATE OF INCORPORATION AND BYLAWS TO PERMIT SHAREHOLDERS TO CALL SPECIAL MEETINGS OF SHAREHOLDERS UNDER CERTAIN CIRCUMSTANCESClass I Directors
We are seeking the approval of our shareholders to amend our Certificate and Bylaws to add a right permitting shareholders who have held at least a 25% “net long position” in our outstanding common stock for at least 120 days to call special meetings of shareholders, subject to the conditions set forth in our Bylaws, as described below. Currently, shareholders do not have the right to call special shareholder meetings; only our Board can call such meetings. If approved, this proposal would become effective upon the filing of an amendment to our Certificate with the Secretary of State of Delaware, which we intend to do promptly after the required shareholder approval is obtained, at which time the related amendment to our Bylaws would also become effective.
We proposed these same amendments for shareholder approval at our 2014 Annual Shareholder Meeting. While shareholders owning almost 41% of our Voting Stock voted in favor of these amendments in 2014, the level of support was not sufficient to approve the amendments. SeeRequired Vote, Our Board’s Recommendation andAdditional Information below. Because our Board continues to believe that these amendments are appropriate, we are again asking shareholders to vote “For” these proposed amendments. In addition, under Proposal 2, we are seeking the approval of our shareholders to amend our Certificate and Bylaws to remove all 80% supermajority voting requirements that impact who may call special meetings of shareholders (other 80% supermajority voting requirements will be unaffected), and replace them with two-thirds voting standards. If Proposal 2 is passed, we believe it will improve the chances that an amendment permitting shareholders to call special meetings of shareholders under certain circumstances, if proposed in the future, would be adopted (if Proposal 3 is not adopted at the 2016 Annual Meeting). However, even if Proposal 2 is approved by the required vote of our shareholders, there is no assurance that this Proposal 3 will be approved by the required vote of our shareholders. SeeRequired Vote, Our Board’s Recommendation and Additional Informationon page 30.
Proposed Amendments to Certificate and Bylaws
This Proposal 3 proposes to amend the Certificate and Bylaws to implement the right of shareholders who have held at least a 25% “net long position” in our outstanding common stock for at least 120 days to call special meetings of shareholders, subject to compliance with the requirements set forth in our Bylaws, as proposed to be amended.
Our Board believes that establishing an ownership threshold of at least 25% in order for a shareholder (or group of shareholders) to request a special meeting strikes an appropriate balance between enhancing shareholder rights and avoiding the situations that could arise if the threshold were set so low that a small minority of shareholders, including shareholders with special interests, could force the Company to incur the time and expense of convening a special meeting to consider a matter of little or no interest to other shareholders. Organizing and preparing for a special meeting involves significant attention of our Board and management, which could divert their attention from performing their primary functions: to oversee and operate our business in the best interests of
our shareholders. In addition, for every special meeting of shareholders, the Company incurs significant costs. Wedirectors whose terms are not expiring this year follow. They will continue to maintain our existing governance mechanisms that afford management and ourserve as directors for the remainder of their terms or until their respective successors are appointed or elected.
Continuing Class II Members of the Board – Terms Ending at the 2024 Annual Meeting
Stephen F. Ralbovsky | ||||
Founder and Principal of Wolf Sky Consulting LLC | ||||
Age: 69 Director since: 2016 Other Directorships: None | Hecla Committees: • Audit (Chair) • Governance and Social Responsibility • Health, Safety, Environmental and Technical | |||
Mr. Ralbovsky has been the Founder and Principal of Wolf Sky Consulting LLC since June 2014. Prior to that, he was a partner with PricewaterhouseCoopers LLP from February 1987 until his retirement in June 2014, where he concentrated his practice on public companies operating in the mining industry. He is a part-time Professor of Practice at the University of Arizona’s James E. Rogers College of Law. Mr. Ralbovsky is also a member of several organizations, including the Association of International Certified Professional Accountants, Arizona Society of CPAs, National Mining Association, and Society for Mining, Metallurgy and Exploration. | ||||
Board Qualification and Skills: Mr. Ralbovsky is a CPA and has over 40 years’ experience in taxation, auditing, and accounting, where he was specifically heavily involved in the mining industry with an emphasis in global mining tax and royalty policy. He has held leadership positions, including U.S. Mining Leader, U.S. Mining Tax Leader, Global Mining Tax Leader, and Tax Partner while employed with PricewaterhouseCoopers LLP. |
Catherine “Cassie” J. Boggs | ||||
Former General Counsel at Resource Capital Funds | ||||
Age: 68 Director since: 2017 Board Chair since: 2022 Other Directorships: Capital Limited | Hecla Committees: • Governance and Social Responsibility • Audit • Compensation • Executive | |||
Ms. Boggs served as the General Counsel at Resource Capital Funds from January 2011 until her retirement in February 2019. Since 2019, she has been serving as an Intermittent Expert in mining with the US Department of Commerce’s Commercial Law Development Program. She was a board member of Funzeleo from January 2016 to September 2021, as well as serving as President of the Foundation for Natural Resources and Energy Law (formerly known as the Rocky Mountain Mineral Law Foundation) from July 2012 to July 2013. She briefly served on the board of US Energy Corp. from June 2019 to December 2019. She has also served as a board member of Capital Limited (a global drilling company, listed on the London Stock Exchange) since September 2021, and is an Adjunct Professor at the University of Denver, Sturm College of Law. | ||||
Board Qualification and Skills: Ms. Boggs has over 39 years’ experience as an attorney in the mining and natural resources sectors, in both domestic and international mining. She has extensive experience in leadership in the mining industry, having worked for Barrick Gold Company, serving in a variety of leadership roles, including serving as the CEO of Tethyan Copper Company, interim President of the African Business Unit, and as interim General Counsel of African Barrick Gold. She also has experience in due diligence, country and political risk assessments, and the structuring and implementation of risk mitigation strategies. |
26 www.hecla.com
Proposal 1 — Election of Class I Directors
Continuing Class III Members of the Board – Terms Ending at the 2025 Annual Meeting
Charles B. Stanley | ||||
Managing Member of Cutthroat Energy, LLC | ||||
Age: 64 Director since: 2007 Other Directorships: None | Hecla Committees: • Compensation (Chair) • Health, Safety, Environmental and Technical | |||
Mr. Stanley has been the Managing Member of Cutthroat Energy, LLC, a private oil, and gas producer, since 2019. Prior to that, Mr. Stanley served as Chief Executive Officer and President of QEP Resources, Inc., from 2010 until his retirement in 2019. He was also Chairman of the Board of QEP Resources, Inc. from May 2012 until his retirement in January 2019. | ||||
Board Qualification and Skills: Mr. Stanley has over 40 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. He gained his extensive financial experience from a lengthy career with QEP Resources, Inc., and prior companies. In addition to his former position at QEP Resources, Inc., 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. He served on the board of QEP Resources, Inc., for eight years and as Chairman of the Board from 2012 until his retirement in 2019. Prior to serving on QEP’s board, Mr. Stanley served on the board of Questar Corporation for eight years and has served on the boards of various oil and gas industry trade organizations. |
Alice Wong, ICD.D | ||||
Senior Vice President and Chief Corporate Officer Cameco Corporation | ||||
Age: 63 Director since: 2021 Other Directorships: SaskEnergy Incorporated | Hecla Committees: • Governance and Social Responsibility (Chair) • Audit • Health, Safety, Environmental and Technical | |||
Ms. Wong has served as Senior Vice President and Chief Corporate Officer of Cameco Corporation since 2011. She was Cameco’s Vice President of Safety, Health, Environment, Quality and Regulatory Relations from 2008 to 2011, and Vice President of Investor, Corporate and Government Relations from 2005 to 2008. She has been a board member of the following organizations: SaskEnergy Incorporated since 2016, Mining Association of Canada since 2016, Canadian Nuclear Association since 2013, and Saskatchewan Mining Association since 2013. In 2021, Ms. Wong was named a Catalyst Honours Champion in recognition of her significant contributions to advancing women and championing inclusion in the workplace and being a role model for inclusive leadership in corporate Canada. | ||||
Board Qualification and Skills: Ms. Wong has been with Cameco for more than 35 years in increasingly senior leadership roles and has gained a wealth of experience from her diverse responsibilities. In her current role as Senior Vice President and Chief Corporate Officer, she provides executive oversight for human resources, safety, health, environment, quality, regulatory relations, business technology services, supply chain management, internal audit, and corporate ethics. She obtained her Corporate Directors Designation (ICD.D) from the Institute of Corporate Directors. |
2023 Proxy Statement 27
COMPENSATION OF NON-MANAGEMENT DIRECTORS
The Compensation Committee (“committee”) of the Board is responsible for recommending to the independent members of the Board the ability to respond to proposalsform and concernsamount of all shareholders, regardlesscompensation for our non-management directors. The independent members of the levelBoard consider the committee’s recommendation and make the final determination of share ownership.non-management director compensation.
EstablishingCompensation for non-management directors is designed to reflect current market trends and developments with respect to compensation of Board members. It consists of a 25% “net long position” threshold forcombination of cash retainers and an equity award.
Compensation Consultant and Peer Group Benchmarking
In 2022, the rightcommittee did not retain an independent compensation consultant to call a special meeting would ensure that matters proposed for consideration have significant support among our shareholders. A shareholder’s “net long position” is generally defined as the amount of common stock in which the shareholder holds a positive (also known as “long”) economic interest, reduced by the amount of common stock in which the shareholder holds a negative (also known as “short”) economic interest.review director compensation. In addition, requiring that shareholders must have held their stock for at least 120 days helps to ensure that their economic interest in2022, the Company’s affairshuman resources department analyzed our non-management director compensation against our peer group. The human resources department recommended changes to the non-management director compensation, other than the Board Chair, based on its analysis as follows: (i) the annual cash retainer be increased from $98,000 to $105,000, (ii) the annual equity award be increased from $120,000 to $125,000, (iii) the cash retainer for chairing a committee (Audit, Compensation, and Health, Safety, Environment and Technical) be increased from $12,000 to $15,000, (iv) the cash retainer for chairing the Governance Committee be increased from $8,000 to $15,000. The changes to the non-management director compensation were made effective July 1, 2022. The human resources department also recommended that the Board Chair’s annual retainer be increased from $120,000 to $180,000, and the equity award increased from $120,000 to $125,000. The committee recommended and the Board approved the changes.
Components of Non-Management Director Compensation
Compensation Element | Current Value | |||
Annual Board Retainer | $ | 105,000 | ||
Annual Board Chair Retainer | $ | 180,000 | ||
Annual Committee Chair Retainer for: |
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• Health, Safety, Environmental & Technical Committee | $ | 15,000 | ||
• Audit Committee | $ | 15,000 | ||
• Compensation Committee | $ | 15,000 | ||
• Governance Committee | $ | 15,000 | ||
• Executive Committee | $ | — | ||
• Non-Executive Stock Award Committee | $ | — | ||
Annual Equity | $ | 125,000 |
Annual cash retainers are paid in quarterly installments. Other than annual cash retainers and equity, no other attendance fees are paid to the non-management directors.
Equity Compensation
We maintain the Hecla Mining Company Stock Plan for Nonemployee Directors (“Director Stock Plan” or “plan”). The plan is more than transitory. Also during the required 120 day holding period, the Company will continuecurrently scheduled to make disclosure through its statutory filings, which may provide shareholders with information that might avoid an unnecessary call for special meetings of shareholders.
The proposed amendmentterminate on May 15, 2027 and is subject to our Bylaws contains procedural and information requirements for shareholders to call a special meeting, including, without limitation, that (i) no business may be conducted at the special meeting except as set forth in the Company’s notice of meeting, (ii) a special meeting will not be held if similar business is to be covered at an annual or special meeting calledtermination by the Board at any time. Pursuant to be held within 90 days after the special meeting requestplan, before September 30 of each year, each non-management director is receivedcredited with a number of shares determined by dividing the annual equity retainer payable to each non-management director for service on the Board for the following year by the Secretary, (iii) no shareholder special meeting requestaverage closing price for Hecla’s common stock on the NYSE for the prior calendar year (the “Stock Retainer”). A minimum of 25% of the annual Stock Retainer under the Director Stock Plan is contributed to a grantor trust established by the Company. Each director may be made during the period commencing 90 dayselect, prior to the first anniversaryday of the applicable year, to have a greater percentage contributed to the grantor trust for that year. The remaining portion of the Stock Retainer will be transferred to the non-management director as soon as practicable. Non-management directors joining the Board after September 30 of any year will be credited with a pro rata grant of shares when they join the Board.
28 www.hecla.com
Compensation of Non-Management Directors
The shares held in the grantor trust are subject to the claims of our creditors until delivered under the terms of the Director Stock 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’s service for any other reason; (iv) a change in control of the Company (as defined in the Director Stock Plan); or (v) a time elected by the director, except shares must be held in the trust for at least two years prior to delivery. As of December 31, 2022, there were 2,170,959 shares remaining available for issuance under the Director Stock Plan.
The following chart summarizes the annual cash and equity compensation for our non-management directors during 2022.
Non-Management Director Compensation for 2022
Director | Fees Earned or Paid in Cash ($) | Stock Awards(1) ($) | All Other Compensation(2) ($) | Total ($) | ||||||||||||
Catherine J. Boggs, Board Chair | 143,000 | 83,367 | — | 226,367 | ||||||||||||
George R. Johnson | 115,000 | 83,367 | 7,500 | 205,867 | ||||||||||||
Stephen F. Ralbovsky | 115,000 | 83,367 | — | 198,367 | ||||||||||||
Charles B. Stanley | 109,000 | 83,367 | — | 192,367 | ||||||||||||
Alice Wong | 109,000 | 83,367 | — | 192,367 | ||||||||||||
Ted Crumley | 109,000 | (3) | — | 90,000 | (4) | 199,000 | ||||||||||
Terry V. Rogers | 55,000 | (3) | — | 78,750 | (4) | 133,750 |
(1) | The amounts shown in this column represent the aggregate grant date fair value computed in accordance with Financial Accounting Standards Board ASC Topic 718. For a description of the assumptions used in valuing the awards please see Note 12 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. The stock awards column represents the aggregate grant date fair value of the stock granted to each non-management director under the Director Stock Plan in 2022 as computed in accordance with ASC Topic 718. For each director, the number of common shares granted was determined by dividing $125,000 by the average closing price for Hecla’s common stock on the NYSE for the prior calendar year ($6.3576) ($125,000 ÷ $6.3576 = 19,662). On June 28, 2022, each non-management director received 19,662 shares of our common stock under the terms of the Director Stock Plan. Based on our closing stock price on the NYSE on the date of grant of June 28, 2022 ($4.24), the grant date fair value for each grant of 19,662 shares was $83,367. (This amount does not reflect the actual amount that may be realized by each director). |
(2) | Includes the following: |
NEO | Matching Contribution under Charitable Matching Gift Program ($) | Consulting Fee ($) | Total ($) | |||||||||
Crumley | — | 90,000 | 90,000 | |||||||||
Johnson | 7,500 | — | 7,500 | |||||||||
Rogers | 3,750 | 75,000 | 78,750 |
(3) | Messrs. Crumley and Rogers retired from the Board in May 2022. They received no additional non-management director compensation after their retirement date. |
(4) | After their retirement from the Board in May 2022, Messrs. Crumley and Rogers each entered into a consulting agreement with the Company to act as independent contractors for the Board. Mr. Crumley’s consulting fee is $180,000, to be paid in equal quarterly installments from July 2022 to May 2023. Mr. Roger’s consulting fee is $150,000, to be paid in equal quarterly installments from July 2022 to May 2023. |
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 Hecla Charitable Foundation matches contributions made to qualifying nonprofit organizations. Beyond these items, no other compensation was paid to any non-management director.
2023 Proxy Statement 29
Compensation of Non-Management Directors
Non-Management Director Stock Ownership Guidelines
To more closely align the Company’s independent directors’ financial interests with those of our shareholders, in June 2012, the committee and Board adopted stock ownership guidelines for our independent directors. Under these guidelines, each independent director is required to own shares of common stock (which includes shares held under the Hecla Mining Company Stock Plan for Nonemployee Directors) valued at three times their annual cash retainer within five years of their appointment to the Board. In the event an independent director’s cash retainer increases, they will have three years from the date of the immediately preceding annual meetingincrease to acquire any additional shares needed to meet these guidelines.
Because of fluctuations in the Company’s stock price, in February 2016, the committee and endingthe Board amended the stock ownership guidelines to provide a valuation methodology that consists of valuing the shares held by using the average closing price of the Company’s common stock on the dateNYSE for the previous calendar year. Because share prices of all companies are subject to market volatility, the Board believes that it would be unfair to require a director to buy more shares simply because Hecla’s stock price drops. In the event there is a significant decline in Hecla’s stock price that causes a director’s holdings to fall below the applicable threshold, the director will not be required to purchase additional shares to meet the threshold, but they generally may not sell or transfer any shares until the threshold has again been achieved.
All non-management directors met the guidelines, except for Ms. Wong, who has until February 2026 to satisfy the requirements of the next annual meeting, (iv) a special meeting request cannot cover business substantially similar to what was covered at an annual or special meetingownership guidelines.
Additional information regarding shares held not more than 120 days before the special meeting request was received by the Secretary, (v) any shares beneficially owned or held of record as of the date of the request and sold by the requesting holder prior to the meeting will be treated as a revocation of the request to the extent of the shares sold, and (vi) the requesting shareholder’s notice must include information (as specifiednon-management directors is included in the amendment to the Bylaws) as to the business proposed to be conducted, as to each nominee (if applicable),Security Ownership of Certain Beneficial Owners and as to the shareholder giving notice and the beneficial owner, if any,Management table on whose behalf the proposal is made.page 82.
Required Vote, Our Board’s Recommendation and Additional Information
Our Board is committed to good governance practices and this Proposal 3 is the result of our Board’s ongoing review of our corporate governance principles. After receiving shareholder input and the advice of management and outside advisors, our Board considered the relative weight of the arguments in favor of and opposed to the ability of shareholders, under certain circumstances, to call special meetings as described herein. As a result, and based upon the recommendation of the Corporate Governance and Director’s Nominating Committee, our Board, at its meeting on February 20, 2016, approved and declared advisable and in our shareholders’ best interests the amendments to the Certificate and Bylaws described in this Proposal 3.30 www.hecla.com
The above description is a summary, and is qualified by and subject to the full text of the proposed amendments to our Certificate and Bylaws, which are set forth inAppendix C andAppendix D, respectively. Additions of text contained in the appendices are indicated by underlining and deletions of text are indicated by strikeouts.
Our Board has approved this proposal, and according to our current Certificate and Bylaws, approval of this proposal requires the affirmative vote of holders of at least 80% of our outstanding shares of common stock.
RATIFY THE APPOINTMENT OF BDO USA, LLP AS THE COMPANY’SOUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 20162023
The Audit Committee is directlysolely responsible for the appointment, compensation, retention, evaluation, and oversighttermination, if necessary, of the independent registered public accounting firm retained to audit our financial statements. The committeeAudit Committee appointed BDO USA, LLP (“BDO”) as the independent registered public accounting firm for Hecla for the calendar year ending December 31, 2016.2023. BDO has been retained in that capacity since 2001. The committeeAudit Committee is aware that a long-tenured auditor may be believed by some to pose an independence risk. To address these concerns, our committee:the Audit Committee:
• | reviews all non-audit services and engagements provided by BDO, specifically with regard to the impact on the firm’s independence; | ||
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conducts a quarterly assessment of BDO’s service quality, and its working relationship with our management;
conducts regular private meetings separately with each of BDO and our management;
interviews and approves the selection of BDO’s new lead engagement partner with each rotation;
at least annually, obtains and reviews a report from BDO, describing all relationships between the independent auditor and Hecla; and
reviews data relating to audit quality and performance, including the most recent Public Company Accounting Oversight Board (“PCAOB”) reports on BDO and its peer firms.
The members of the committeeAudit Committee believe that the continued retention of BDO to serve as our independent registered public accounting firm is in the best interests of Hecla and itsour shareholders.
Although ratification is not required, the Board isand the Audit Committee are submitting the appointment of BDO to our shareholders for ratification because we value our shareholders’ views on the Company’sour independent registered public accounting firm, and as a matter of good corporategovernance practice. In the event that our shareholders fail to ratify the appointment, it will be considered as a direction to the Board and to the committeeAudit Committee to consider the appointment of a different firm. Even if the appointment is ratified, the committeeAudit Committee in its discretion may select a different independent registered public accounting firm at any time during the year if it determines that such change would be in the best interest of the Company and ourits shareholders.
Representatives of BDO are expected to be present at the Annual Meeting with the opportunity to make statements and respond to appropriate questions from shareholders present at the meeting.
Required Vote
Under the Sarbanes-Oxley Act of 2002, the Audit Committee has the sole authority to appoint the independent registered public accounting firm for the Company. However, the Board feels that it is important for the shareholders to ratify the selection of BDO USA, LLP. This proposal requires the affirmative vote of a majority of votes cast at the Annual Meeting, whether in person or by proxy. See What Votes are Required for the Proposals on page 88.
You may vote “FOR,” “AGAINST,” or “ABSTAIN” on the proposal to ratify the appointment of BDO USA, LLP as our independent registered public accounting firm for 2023.
The Audit Committee and Board recommend |
2023. | ||||
2023 Proxy Statement 31
TableProposal 2 — Ratify the Appointment of ContentsBDO USA, LLP as Our Independent Registered Public Accounting Firm for 2023
Pre-Approval Process
The Audit Committee is responsible for reviewing and, if appropriate, pre-approving all audit, audit-related and non-audit services to be performed by our independent registered public accounting firm. The Audit Committee charter authorizes the Audit Committee to establish a policy and related procedures regarding the pre-approval of audit, audit-related and non-audit services to be performed by our independent registered public accounting firm.
The Audit Committee has delegated its pre-approval authority to the Chair of the Audit Committee,
The committee’s principal functions are who is authorized to assist the Board in fulfilling its oversight responsibilities, andpre-approve services to specifically review: (i) the integrity ofbe performed by our financial statements; (ii) the independent auditor’s qualifications and independence; (iii) the performance of our internal auditorregistered public accounting firm and the independent auditor; and (iv) our compliance with laws and regulations, including disclosure controls and procedures. During 2015,compensation to be paid for such services until the committee worked with management, our internal auditor and our independent auditor to address Sarbanes-Oxley Section 404 internal control requirements. The committee met eight times in 2015.
The committee acts under a written charter as amended on December 1, 2015. You may obtain a copy of the charter in the “Investors” section of http://www.hecla-mining.com under “Corporate Governance.”
In performing its functions, the Audit Committee:
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Based on the review and discussions described in this report, and subject to the limitations on the role and responsibilitiesnext regularly-scheduled meeting of the Audit Committee, referredprovided that in such case, the Chair shall provide a report to above and in the Audit Committee Charter,at its next regularly scheduled meeting of any services and compensation approved by the committee recommendedChair pursuant to the Board thatdelegated authority. On a periodic basis, management reports to the audited financial statements be included in our Annual Report on Form 10-K for the calendar year ended December 31, 2015, for filing with the SEC.
Respectfully submitted byThe Audit Committee of theBoard of Directors actual spending for projects and services compared to the approved amounts.
Charles B. Stanley, Chairman6Terry V. RogersTed Crumley7
The following table representspresents fees for professional audit services rendered by BDO for the audit of our annual financial statements for the calendar years ended December 31, 20152022 and December 31, 2014,2021, and fees for other services rendered by BDO during those periods.
2015 | 2014 | ||||||
Audit Fees1 | $698,500 | $577,700 | |||||
Audit Related Fees2 | 87,000 | 87,000 | |||||
Tax Fees3 | 3,600 | 17,800 | |||||
All Other Fees | — | — | |||||
Total | $789,100 | $682,500 |
2022 | 2021 | |||||||
Audit Fees(1) | $ | 1,135,250 | $ | 975,800 | ||||
Audit Related Fees(2) | $ | 98,000 | $ | 93,000 | ||||
Tax Fees | — | — | ||||||
All Other Fees | — | — | ||||||
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Total | $ | 1,233,250 | $ | 1,068,800 | ||||
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Relates to services rendered in connection with the annual audit of our consolidated financial statements, quarterly reviews of financial statements included in our quarterly |
Consists of fees for | |
Report of the Audit Committee
The committee’s current practice requires pre-approvalAudit Committee acts under a written charter. You may obtain a copy of all audit servicesthe charter in the “Company” section of www.hecla.com under “Governance and permissible non-audit services to be provided byEthics.”
In the performance of its oversight responsibilities, the Audit Committee (1) reviewed and discussed with management and the independent registered public accounting firm. The committee reviews each non-audit servicefirm the Company’s audited financial statements for the calendar year ended December 31, 2022; (2) discussed with the Company’s independent registered public accounting firm the matters required to be provided and assessesdiscussed by the impactapplicable requirements of the service onPCAOB and SEC; (3) received the written disclosures and the letter from the Company’s independent registered public accounting firm required by the applicable requirements of the PCAOB regarding the independent accountant’s communications with the Audit Committee regarding independence; and (4) discussed with the Company’s independent registered public accounting firm any relationships that may impact its objectivity and independence and satisfied itself as to the firm’s independence. OnDuring 2022, the Audit Committee worked with management, our internal auditor, and our independent auditor to address Sarbanes-Oxley Section 404 internal control requirements. The Audit Committee met five times in 2022.
Company management is responsible for the assessment and determination of risks associated with the Company’s business, financial reporting, operations, and contractual obligations. The Audit Committee, together with the Board of Directors, is responsible for oversight of the Company’s management of risks. As part of its responsibilities for oversight of the Company’s management of risks, the Audit Committee has reviewed and discussed the Company’s enterprise-wide risk assessment, and the Company’s policies with respect to risk assessment and risk management, including discussions of individual risk areas as well as an annual summary of the overall process.
32 www.hecla.com
Proposal 2 — Ratify the Appointment of BDO USA, LLP as Our Independent Registered Public Accounting Firm for 2023
The Audit Committee has discussed with both Hecla’s internal auditor and independent registered public accounting firm the overall scope of the plans for their respective audits. The Audit Committee regularly meets with a periodic basis,representative of the firm hired to serve as Hecla’s internal auditor and representatives of the independent registered public accounting firm, in regular and executive sessions, to discuss the results of their examinations, their evaluations of the Company’s internal controls, and the overall quality of Hecla’s financial reporting and compliance programs.
Management is responsible for the Company’s financial reporting process, including establishing and maintaining adequate internal control over financial reporting and the preparation of the Company’s financial statements. The Company’s independent registered public accounting firm is responsible for performing an independent audit of the Company’s consolidated financial statements and expressing an opinion on the conformity of the Company’s audited financial statements with U.S. generally accepted accounting principles. The Company’s independent registered public accounting firm also is responsible for performing an independent audit of the effectiveness of the Company’s internal controls over financial reporting and issuing a report thereon. The Audit Committee relies, without independent verification, on the information provided to it and on the representations made by management reportsand the Company’s independent registered public accounting firm. Based on the review and discussion and the representations made by management and the Company’s independent registered public accounting firm, the Audit Committee recommended to the committeeBoard that the audited consolidated financial statements for the calendar year ended December 31, 2022, be included in the Company’s Annual Report on Form 10-K for the calendar year ended December 31, 2022, and filed with the SEC.
The material contained in this Audit Committee Report does not constitute soliciting material, is not deemed filed with the SEC, and is not incorporated by reference into any other Company filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (“Exchange Act”), whether made on, before, or after the date of this Proxy Statement and irrespective of any general incorporation language in such filing, except to the extent that the Company specifically incorporates this Audit Committee Report by reference therein.
Respectfully submitted by
The Audit Committee of the
Board of Directors
Stephen F. Ralbovsky, Chair
Catherine J. Boggs
George R. Johnson
Alice Wong
2023 Proxy Statement 33
PROPOSAL 3
APPROVAL, ON AN ADVISORY BASIS, OF OUR NAMED EXECUTIVE OFFICER COMPENSATION
Our Board seeks your vote to approve, on an advisory basis, the compensation paid to our named executive officers (“NEOs”) for 2022 as set forth under the heading Compensation Discussion and Analysis (“CD&A”) on page 36 and in the accompanying compensation tables starting on page 61, and related material. The Board believes that our current executive compensation program is right for the Company and our shareholders. Our executive compensation program is designed to attract, retain, and motivate talented individuals who possess the executive experience and the leadership skills needed by the Company to maintain and increase shareholder value. We seek to provide executive compensation that is competitive with that provided by companies in our peer group within the mining industry. We also seek to provide both short- and long-term financial incentives to our executives that reward them for superior performance, and achieving financial results and strategic objectives that are expected to contribute to increased long-term shareholder value.
Underlying these incentives is a strong philosophy of “pay-for-performance” that forms the foundation of decisions regarding the actual spending forprojectscompensation of our NEOs. This compensation philosophy, which has been consistent over many years, is designed to align the interests of our NEOs with the interests of our shareholders and services comparedis central to our ability to attract, retain and motivate executive leaders to guide the Company through market challenges over the long term.
The primary methods we use to align the interests of our NEOs with our shareholders include:
✓ | placing a vast majority (80.7%) of the CEO’s total compensation at-risk; |
✓ | targeting total direct compensation of our NEOs at approximately the 50th percentile of peer compensation; |
✓ | striking the right balance between short- and long-term results; and |
✓ | selecting appropriate performance metrics, including market-based measures such as total shareholder return, annual financial and operational goals such as production and EBITDA, and individual performance goals that drive our long-term business strategy. |
Some highlights of our 2022 executive compensation program include:
✓ | our 2022 Short-term Incentive Plan aligns payments to actual performance on pre-established targets, effectively linking the Company’s financial performance to NEO pay; and |
✓ | we achieved above threshold, but below target levels for reserves and production under our 2020-2022 Long-term Incentive Plan and fell below threshold for the mine site operating cash flow less capital. However, we achieved a TSR ranking of second against the peer group, which resulted in a 250% multiplier, and the overall LTIP performance was $123.75 per unit. |
In 2022, our shareholders voted 98% in favor of our executive compensation program. In considering how to vote on this proposal, we urge you to review the relevant disclosures in this Proxy Statement, particularly the Compensation Discussion and Analysis section, which contains detailed information about our executive compensation program. We have held our “Say-on-Pay” advisory vote annually since 2011, and our Board recommends shareholders continue to vote for Every Year for the frequency of holding our Say-on-Pay vote See Proposal 4 on page 81.
The Board and the Compensation Committee value the opinions of our shareholders and to the approved amounts. In addition,extent there is any significant vote against the committee has delegated authorityNEO compensation as disclosed in this Proxy Statement, the Compensation Committee will carefully review and consider the voting results when evaluating our executive compensation program.
34 www.hecla.com
Proposal 3 — Approval, on an Advisory Basis, of Our Named Executive Officer Compensation
We are asking shareholders to grant certain pre-approvalsapprove the following resolution at the Annual Meeting:
“RESOLVED, that the compensation paid to the committee chair. Pre-approvals grantedCompany’s NEOs, as disclosed pursuant to Item 402 of Regulation S-K, described in the CD&A, Summary Compensation Table for 2022, and the related compensation tables and narrative in the Proxy Statement for the Company’s 2023 Annual Shareholders’ Meeting, is hereby APPROVED.”
Required Vote
The advisory vote on executive compensation will require the affirmative vote of a majority of votes cast at the Annual Meeting, whether in person or by proxy. See What Votes are Required for the committee chair are reportedProposals on page 88.
You may vote “FOR,” “AGAINST,” or “ABSTAIN” on the proposal to approve the full committee at its next regularly scheduled meeting.compensation of our NEOs.
The Board recommends that you vote “FOR” approval of the compensation of our NEOs. | ||||
2023 Proxy Statement 35
COMPENSATION DISCUSSION AND ANALYSIS
Table of Contents to Compensation Discussion and Analysis
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COMPENSATION DISCUSSION AND ANALYSISThis CD&A describes and analyzes our executive compensation philosophy and program in the context of the compensation paid during the last calendar year to our CEO, SVP – CFO, and our three other most highly compensated executive officers during 2022, and any additional individuals for whom disclosure would have been provided, but for the fact that the individuals were not serving as executive officers at the end of the last completed calendar year.
Our Compensation Committee (“committee”) strives to design a fair and competitive compensation program for executive officers that will attract, motivate, and retain highly qualified and experienced executives, rewardprovide incentives based on our performance and provide incentives that are based on ourreward performance, with an overall emphasis to maximizeon maximizing our long-term shareholder value. Our executive compensation program consists of several components, including base salary, annualshort- and long-term performance awards (paid in cash or equity), equity awards, a deferred compensation plan and retirement benefits. ThisCompensation Discussion and Analysis (“CD&A”) provides information regarding our compensation objectives, the relationship between the components of our compensation program and our objectives and factors considered by the committee in establishing compensation levels for our NEOs. The NEOs who are discussed throughout this CD&A and in the compensation tables are:
Name | Age | Principal Position | |||||||
Phillips S. Baker, Jr. | 63 | President and CEO (“CEO”) | |||||||
Lauren M. Roberts | 57 | Sr. Vice President and COO (“SVP – COO”) | |||||||
Russell D. Lawlar | 43 | Sr. Vice President and CFO (“SVP – CFO”) | |||||||
Michael L. Clary | 53 | Sr. Vice President and Chief | |||||||
Robert D. Brown | |||||||||
36 www.hecla.com
Compensation Discussion and Analysis
Glossary of CD&A Terms | ||||||||||
committee | Compensation Committee | NEOs | Named Executive Officers | |||||||
STIP | Short-term Incentive Plan | 2010 Stock Plan | 2010 Stock Incentive Plan | |||||||
LTIP | Long-term Incentive Plan | KEDCP | Key Employee Deferred Compensation Plan | |||||||
PSUs | Performance-based Units | Retirement Plan | Hecla Mining Company Retirement Plan, a defined benefit retirement plan | |||||||
RSUs | Restricted Stock Units | SERP | Supplemental Excess Retirement Plan | |||||||
TSR | Total Shareholder Return | SEC | Securities and Exchange Commission | |||||||
GAAP | Generally Accepted Accounting Principles in the United States | ESG UCB | Environmental, Social and Governance Underhand Closed Bench mining method | |||||||
Dodd-Frank Act | Dodd-Frank Wall Street Reform and Consumer Protection Act | NYSE | New York Stock Exchange | |||||||
AISC | All-In Sustaining Cost After By-Product Credits | AIFR | All-Injury Frequency Rate | |||||||
401(k) Plan | Hecla’s Capital Accumulation Plan, a defined contribution retirement plan | AEMA AgEq | American Exploration & Mining Association Silver Equivalent Ounces | |||||||
SME | Society for Mining, Metallurgy & Exploration | LTI | Long-term Incentive Components (LTIP, RSUs and PSUs) |
Hecla is a leadingWe are the largest primary low-cost silver producer within the United States – and the oldest NYSE-listed precious metals mining company in North America. We produce more than 40% of all silver in the United States, and have operating silver mines in Alaska (Greens Creek), Idaho (Lucky Friday), and Mexico (San Sebastian) and is a gold producer with an operating mine in Quebec, Canada (Casa Berardi)., and our recently acquired operation in the Yukon Territory, Canada (Keno Hill), is expected to begin production in the third quarter. We also produce lead and zinc. In addition to our diversified silver and gold operating cash-flow generating base, we have a number ofown several exploration properties and pre-development projects in six world-class silver and gold mining districts inthroughout North America. With an active exploration
Overall, 2022 was a strong year for Hecla. We had strong production and pre-development program,cash flow despite difficulties with a tight labor market, supply chain challenges, and inflation. Strategically, we have consistently growncompleted the acquisition of Alexco Resource Corp. and its Keno Hill project, adding nearly 50 million ounces of silver reserves, which are the highest-grade and largest primary silver reserves in Canada.
Operationally, we produced 14.2 million ounces of silver, Hecla’s second highest, and 175,807 ounces of gold. We also had record lead production of 49,000 tons and zinc production of 65,000 tons. The Lucky Friday Mine increased its silver production by 24% to 4.4 million ounces using the UCB mining method. Our AIFR was 1.22, which was 42% below the U.S. average. We finished the year with record silver reserves of 241 million ounces, and gold reserves of 2.6 million ounces.
We had sales of $718.9 million with 67% from our reserve base for future production.Greens Creek and Lucky Friday mines. Our balance sheet was strong with $104.7 million in cash and cash equivalents and with approximately $247 million in available liquidity. We paid dividends to our shareholders in the amount of $12.9 million, or 14% of cash flow from our operations.
Our stock price is heavily influenced by silver and gold prices,ESG performance for the year had notable highlights, including (i) our AIFR was 1.22, which fluctuate widely and are primarily driven by economic, political and regulatory factors that are difficult to predict and outside of our control. Silver, gold, and lead prices declined to annual averages of $15.70, $1,160, and $0.81, respectively in 2015, from average prices of $19.08 for silver, $1,266 for gold, and $0.95 for lead in 2014, and $23.79 for silver, $1,410 for gold, and $0.97 for lead in 2013. Average prices of zinc in 2015 decreased to $0.88 from $0.98 in 2014, and were slightly higher than the average of $0.87 in 2013. The decrease in metals prices negatively impacted our operating results in spite of increased production of silver, gold, and zinc in 2015 compared to 2014.
We believe the drop in the prices was largely related to macroeconomic forces such as interest rates (actual and anticipated), strength of42% below the U.S. dollaraverage; (ii) our San Sebastian Mine received the 2022 Environmental and Sustainability Excellence Award given by AEMA; (iii) our Lucky Friday Mine received the lack of realized or anticipated inflation. AsSME Murray Innovation Award for 2023 for pioneering the U.S.UCB mining method; and other economies displayed signs of improvement, investor preference appears to have trended away from commodity-based silver(iv) we negotiated and gold mining stocks toward potentially higher yields, furtheringsigned a six-year agreement with the decline in silver and gold industry market capitalization. As Hecla’s stock price is highly correlated and dependent on silver and gold prices, we were not immune to the industry shift. However, relative tounion at our peers, we performed slightly above average (54th percentile). The chartLucky Friday Mine.
Based on the next page showsCompany’s strong 2022 performance, the change in our share price in 2015 compared to eachcommittee determined the STIP corporate performance was 135% of the companies in our peer group.target. Our 2020-2022 LTIP performance was $123.75 per unit out of a targeted value of $90 per unit.
2023 Proxy Statement 37
2015 Stock Price ChangeCompensation Discussion and Analysis
Key Operating and Significant Financial Results
In 2015, our business faced a challenging silver and gold price environment. We aggressively reduced costs while continuing to focus on safety and sustainability. During the year, we delivered on our production targets, improved operational efficiencies and kept all key projects on target and on budget.
The mining business requires long-term planning and implementation of operating strategies over several years to deliver successful operating and financial results. Accordingly, in the table below and summary that follows, we set forth our key operating and financial results for years 2015, 20142022, 2021 and 2013.2020.
As of and for the Year Ended December 31, | |||||||||||||
Key Results | 2015 | 2014 | 2013 | ||||||||||
Silver (ounces) produced | 11,591,603 | 11,090,506 | 8,919,728 | ||||||||||
Gold (ounces) produced | 189,327 | 186,997 | 119,989 | ||||||||||
Lead (tons) produced | 39,965 | 40,255 | 30,374 | ||||||||||
Zinc (tons) produced | 70,073 | 67,969 | 61,406 | ||||||||||
Sales of products | $ | 443,567 | $ | 500,781 | $ | 382,589 | |||||||
Net income (loss) | $ | (86,968 | ) | $ | 17,824 | $ | (25,130 | ) | |||||
Basic income (loss) per common share | $ | (0.23 | ) | $ | 0.05 | $ | (0.08 | ) | |||||
EBITDA8 | $ | 107,316 | $ | 151,532 | $ | 69,130 | |||||||
Cash from operating activities (in millions) | $ | 106.4 | $ | 83.1 | $ | 26.6 | |||||||
Cash and cash equivalents (in millions) | $ | 155.2 | $ | 209.7 | $ | 212.2 |
As of and for the Year Ended December 31, | ||||||||||||
Key Results | 2022 | 2021 | 2020 | |||||||||
Silver (ounces) produced | 14,182,987 | 12,887,240 | 13,542,957 | |||||||||
Gold (ounces) produced | 175,807 | 201,327 | 208,962 | |||||||||
Lead (tons) produced | 48,713 | 43,010 | 34,127 | |||||||||
Zinc (tons) produced | 64,748 | 63,617 | 63,112 | |||||||||
Sales (in millions) | $ | 718.9 | $ | 807.5 | $ | 691.9 | ||||||
Net (loss) income (in millions) | $ | (37.3 | ) | $ | 35.1 | $ | (9.5 | ) | ||||
Basic (loss) income per common share | $ | (0.07 | ) | $ | 0.06 | $ | (0.02 | ) | ||||
Adjusted EBITDA (in millions)2 | $ | 217.5 | $ | 220.1 | $ | 203.3 | ||||||
Cash from operating activities (in millions) | $ | 89.9 | $ | 220.3 | $ | 180.8 | ||||||
Cash and cash equivalents (in millions) | $ | 104.7 | $ | 210.0 | $ | 129.8 |
Despite lower metals prices in 2015 compared to 2014, we significantly improved our operating performance. Our overall operating and financial results are more fully described inManagement’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K filed with the SEC on February 23, 2016. Our 2015 results were strong relative to our 2014 results. In 2015, we achieved the following:
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Shareholder Outreach and 2015 Advisory Vote on Executive Compensation
Over the last three years, we have undertaken significant shareholder outreach efforts in an effort to elicit and understand the concerns17, 2023. Some of our shareholders. In responsekey achievements during 2022 were as follows:
Operational:
record silver reserves of 241 million ounces;
gold reserves of 2.6 million ounces;
produced 14.2 million ounces of silver, Hecla’s second highest, and 175,807 ounces of gold;
record lead production of 49,000 tons and zinc production of 65,000 tons;
achieved silver cost guidance with total silver cost of sales of $349.3 million and AISC of $11.25 per silver ounce;
increased Lucky Friday Mine silver production by 24% to shareholder concerns gleaned4.4 million ounces using the UCB mining method; and
achieved record mill throughput milestones at all three operations.
Financial:
reported sales of $718.9 million with 67% from our shareholder outreach, we made changes to our executive compensation program in 2014Greens Creek Mine and 2015, and we believe as a result of those changes, last year’s say-on-pay vote achieved 83% support. We believe that open dialogue with our shareholders and reflecting their feedback in our compensation decisions was critical to our success in achieving such a high percentage of support.Lucky Friday Mine;
In 2015, and in advance of our 2016 Annual Meeting, we continued to reach out to our shareholders. We contacted investors that collectively held over 45% of our commonstock. We also held one-on-one discussions with the two major proxy advisory firms. The purpose of these meetings was to gain feedback on the changes we made to our executive compensation in 2014 and 2015 and to discuss any further concerns. A management team (excluding NEOs) held one-on-one discussions with shareholders holding over 10% of our common stock. During our discussions, all of the changes made to our executive compensation program in 2014 and 2015 were well-received. The one common issue raised during our conversations was to see more pay-for-performance disclosure in our Proxy Statement. We are constantly trying to improve our compensation disclosures, including with respect to pay-for-performance.
Oversight and Determination of the Executive Compensation Program
Role of the Compensation Committee. The committee, consisting entirely of independent members (Nethercutt, Crumley, Rogers and Taylor), has primary responsibility for executive compensation decisions. The committee carries out its responsibilities under a charter approved by the Board. In 2014, the committee and the Board amended the committee’s charter to provide that the committeehas the authority to approve all executive compensation, including our CEO’s (but not that of our independent directors, which remains decided by the full Board). The committee receives assistance from its independent executive compensation consultant, Mercer, and uses this information in making decisions and conducting its annual review of the Company’s executive compensation program.
Role of Independent Compensation Consultant. Mercer performs executive compensation services solely on behalf of the committee, is engaged by and reports directly to the committee, meets separately with the committee with no members of management present, and consults with the committee chair between meetings.
The committee has assessed Mercer’s independence in light of SEC rules and NYSE listing standards, and has determined that Mercer’s work does not raise any conflicts of interest or independence concerns. The Mercer consultants that worked with the committee were Tracy Bean, project manager, who was assisted by Raphael Katsman, a principal of Mercer.
Pursuant to a written agreement dated January 7, 2015, between Mercer and the Compensation Committee, below are the material aspects of the committee’s instructions to Mercer concerning the services the committee asked it to perform with respect to executive compensation and related matters in 2015:
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In addition to providing technical support and input on market practices, the committee’s goal in using compensation and benefits consultants is to provide external benchmark information for assessing compensation relative to our compensation philosophy. As described on page 38 underBenchmarking Using Compensation Peer Groups, Mercer assisted the committee in identifying the appropriate companies to be included in our peer group for executive and director compensation and pay practices, and in benchmarking our executive and director pay against the peer group.
In July 2015, Mercer performed a competitive analysis and presented its findings and recommendations to the committee. The competitive analysis provided detailed comparative data for each executive officer position and assessed each component of pay, including base salary, short- and long-term incentives and total target compensation, as well as the mix of compensation among these pay elements. We compared this information to our executives’ compensation by similarity of position. The committee also reviewed our performance and carefully evaluated each executive’s performance during the year against established goals, leadership qualities, operational performance, business responsibilities, career with Hecla, current compensation arrangements and longterm potential.
The committee has established procedures that it considers adequate to ensure that Mercer’s advice to the committee remains objective and is not influenced by Company management. These procedures include: a direct reporting relationship between the Mercer consultant and the committee; a provision in the committee’s engagement letter with Mercer specifying the information and recommendations that can and cannot be shared with management; an annual update to the committee on Mercer’s financial relationship with Hecla, including a summary of the work performed for Hecla during the preceding 12 months; and written assurances from Mercer that within the Mercer organization, the Mercer consultants who perform services for Hecla has a reporting relationship determined separately from Mercer’s other lines of business and from its other work for Hecla.
• | loss applicable to common stockholders of $37.9 million or $0.07 per share, and adjusted net income3 of $27.8 million or $0.05 per share; |
strong balance sheet with $104.7 million in cash and cash equivalents with approximately $247 million in available liquidity; and
Tabledividends of Contents$12.9 million, or 14% of cash flow from operations.
Environmental, Social, Governance:
strong safety performance with an AIFR of 1.22, which equals a prior Company record and is 42% below the U.S. Average;
the San Sebastian Mine received the 2022 Environmental and Sustainability Excellence Award given by AEMA;
the Lucky Friday Mine received the SME Murray Innovation Award for 2023 for pioneering the UCB mining method; and
• | negotiated and signed a six-year agreement with the union at our Lucky Friday Mine. |
Adjusted EBITDA less capital is a non-GAAP measurement. See Appendix A for a reconciliation to GAAP. |
3 | Adjusted net income is a non-GAAP measurement. See Appendix A for a reconciliation to GAAP. |
The total amount of fees for executive compensation consulting services Mercer provided to the committee in 2015 was $108,688.
During 2015, management hired Mercer or its affiliates to provide consulting services on our benefit plans, including support under the Affordable Care Act. The total amount of fees for these additional consulting services in 2015 was $150,011. The decision to engage Mercer or its affiliates for these additional consulting services was made38 www.hecla.com
Compensation Discussion and Analysis
Benchmarking and Competitive Analyses
We have adopted a pay-for-performance philosophy that incentivizes performance by management, and neither the committee nor the Board approved these other services.
Role of Management. The committee considers input from the CEO in making determinations regarding our executive compensation program and the individual compensation of each executive officer (other than himself). As part of our annual review process, the CEO reviews the performance of each member of the executive team (other than the CEO), and their contribution to the overall performance of the Company. Approximately mid-year, the CEO presents recommendations to the committee regardingtargeting base salary adjustments, target annual incentive awards, stock-based grants, and long-term performance unit grants, based on a thorough analysis of relevant market compensation data comparing Hecla with an applicable peer group within the mining industry. The CEO and senior management also make recommendations to the committee regarding our annual and long-term quantitative goals and annual qualitative goals for the executive officers (other than the CEO), as well as recommendations regarding the participation in our stock-based compensation plans and amendments to the plans, as necessary.
Benchmarking Using Compensation Peer Groups. To attract and retain key executives, our goal is to provide competitive compensation. We generally align our NEO total compensation tosalaries slightly below the median of our peer companiesgroup but targeting incentives above the peer median. The total direct compensation of our NEOs is targeted at approximately the 50th percentile. The process of setting targeted compensation includes consideration of a NEO’s skills, experience, knowledge, and survey composite data. However, we allow total compensation to exceedreputation in the median when ourindustry, as well as Company performance and individual experience, responsibilities and performance warrant.needs.
Central to the pay review process is the selection of a relevant peer group. Because we operate in a global business that is dominated by Canadian companies, ourpeer group reflects this with only five U.S. companies among our peer group.group includes only two U.S. companies. In addition, we have a corporate office in Vancouver, British Columbia, where one of our NEOs works. The committee reviews and determines the composition of our peer group on an annual basis, based on recommendations from Mercer.basis. In 2015,May 2022, the committee assisted by Mercer, removed one peer from the 2014 peer group (Allied Nevada Gold),Equinox Gold, Oceana Gold, Yamana Gold, and identified two new peers (B2Gold and Primero). For 2015, Hecla’sPretium Resources, as these companies were no longer similar to Hecla in total revenue, total assets and/or market capitalization.
In 2022, our peer group was made up of the following 17 companies, whose aggregate profile was comparable to Hecla in terms of size, industry and competition for executive talent.13 companies:
Company | Annual Revenue1 ($ millions US) | Market Cap1 ($ millions US) | Total Assets1 ($ millions US) | Corporate Location | ||||||
IAMGOLD Corporation | 1,008 | 1,019 | 4,223 | Canada | ||||||
AuRico Gold Inc. | 291 | 828 | 2,282 | Canada | ||||||
Centerra Gold Inc. | 763 | 1,229 | 1,629 | Canada | ||||||
Pan American Silver Corporation | 752 | 1,400 | 2,018 | Canada | ||||||
New Gold Inc. | 726 | 2,168 | 3,882 | Canada | ||||||
Coeur Mining Inc. | 636 | 528 | 1,333 | United States | ||||||
Stillwater Mining Company | 944 | 726 | 1,399 | United States | ||||||
B2Gold Corp. | 487 | 1,501 | 2,119 | Canada | ||||||
Alamos Gold Inc. | 170 | 910 | 880 | Canada | ||||||
Detour Gold Corporation | 536 | 1,290 | 2,517 | Canada | ||||||
Tahoe Resources Inc. | 350 | 2,053 | 976 | United States | ||||||
Primero Mining | 275 | 622 | 915 | Canada | ||||||
Silver Standard Resources Inc. | 300 | 405 | 986 | Canada | ||||||
Thompson Creek Metals Company | 807 | 356 | 2,846 | United States | ||||||
Royal Gold, Inc. | 237 | 4,916 | 2,892 | United States | ||||||
Endeavour Silver Corp. | 197 | 223 | 266 | Canada | ||||||
First Majestic Silver Corp. | 246 | 590 | 771 | Canada | ||||||
Median | 487 | 910 | 1,629 | |||||||
Hecla Mining Company | 501 | 1,025 | 2,262 | United States |
Company | Annual Revenue(1) ($US millions) | Market Cap(1) ($US millions) | Total Assets(1) ($US millions) | Corporate Location | ||||||||||
Alamos Gold Inc. (NYSE: AGI) | 824 | 3,014 | 3,622 | Canada | ||||||||||
B2Gold Corporation (NYSE: BTG) | 1,762 | 4,151 | 3,561 | Canada | ||||||||||
Centerra Gold Inc. (NYSE: CGAU) | 900 | 2,282 | 2,677 | Canada | ||||||||||
Coeur Mining Inc. (NYSE: CDE) | 833 | 1,295 | 1,734 | United States | ||||||||||
Eldorado Gold Corporation (NYSE: EGO) | 941 | 1,708 | 4,931 | Canada | ||||||||||
First Majestic Silver Corp. (NYSE: AG) | 584 | 2,890 | 2,125 | Canada | ||||||||||
IAMGOLD Corporation (NYSE: IAG) | 876 | 1,493 | 3,972 | Canada | ||||||||||
New Gold Inc. (NYSE: NGD) | 746 | 1,022 | 2,477 | Canada | ||||||||||
NOVAGOLD Resources Inc. (NYSE: NG) | — | 2,282 | 199 | Canada | ||||||||||
Pan American Silver Corporation (Nasdaq: PAAS) | 1,633 | 5,256 | 3,519 | Canada | ||||||||||
Royal Gold, Inc. (Nasdaq: RGLD) | 654 | 6,902 | 2,757 | United States | ||||||||||
SSR Mining Inc. (Nasdaq: SSRM) | 1,474 | 3,751 | 5,211 | Canada | ||||||||||
Torex Gold Resources Inc. (OTC: TORXF) | 856 | 890 | 1,359 | Canada | ||||||||||
Median | 856 | 2,282 | 2,757 |
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Hecla Mining Company (NYSE: HL) | 807 | 2,808 | 2,729 | United States |
In $US millions as of year-end |
The peer group is composed entirely of publicly held companies, most of which are engaged in the business of mining precious metals, with revenue, market capitalization and total assets within a reasonable range of Hecla’s. We believe these peer companies are appropriate because they are in the same industry, compete with us for executive talent, have executives in positions similar to ours, and are considered by the committee to be comparable to Hecla.
During our shareholder outreach discussions, many of our largest shareholders have informed us that, compared to peer groups selected by proxy advisory firms, they consider the peer group chosen by us to be the most relevant and appropriate for compensation and performance benchmarking purposes. The peer group selected last year by Glass Lewis included 10 of our 17 selected peers. The peer group selected by Institutional Shareholder Services (“ISS”) included only two of our 17 selected peers. The rest of the peer group selected by ISS contained U.S.-based companies in an acceptable rangethe industrial and specialty chemicals, plastics, coatings, nickel and cobalt-based alloys, steel products and other industries – companies and industries whose market fundamentals are materially different from that of the precious metals mining industry. We understand that ISS’s internal policies prohibit its inclusion of Canadian companies (which account for 11 of our peers) and require that Hecla be
2023 Proxy Statement 39
Compensation Discussion and Analysis
compared to companies having only similar revenue instead of similar market capitalization and/or total assets compared to Hecla.assets. We believe that a fair compensation peer group, in terms of both industry profile and size, should not be selected for Hecla without including Canadian mining companies.
In making compensation decisions theThe committee also reviews survey data provided by Mercer from the following mining and general industry survey sources:
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Base salaries are targeted between the 25th percentile and median (50th percentile), with incentive opportunities that can provide above-median total compensation based on performance. Compensation for NEOs within this group may be positioned higher or lower than market median where the committee believes appropriate, considering each executive’s roles and responsibilities and experience in their position within Hecla.
Mercer provided the committee with a report summarizingreviewed an analysis of executive compensation levels at the 25th, 50thmedian and 75th percentiles of the peer group and the survey data for positions comparable to those held by each of our NEOs. The committee also received an analysis from Mercer comparingcompared the target total cash compensation (base salary plus target annual incentive)STIP) and target total direct compensation (base salary plus target annual incentiveSTIP plus the value of long-term incentives)LTIP target) for each of the NEOs against these benchmarks. For retention and competitive considerations, in comparison to the peer group data or survey data applicable to each NEO’s position, we generally target each NEO’s total cashdirect compensation at the median level and the total target compensation at or above the median level and deliver compensation above or below these levels when warranted by performance.
In 2015, target2022, total direct compensation (base salary, short- and long-term incentives) for our NEOs was betweentargeted at the approximate median and the 75th percentile of both the peer group and survey data.group.
The committee suggests that the following consideration be kept in mind regarding comparisons of our NEO compensation and Company performance against external benchmarks:
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In 2015,2022, the committee also approved a separate peer group to be used specifically with regard to TSR. The TSR, peer group is as follows:for purposes of our performance-based equity awards (PSUs), discussed on page 54, which consisted of the following companies/funds:
Alamos Gold Inc. | Coeur Mining, Inc. (NYSE: CDE) | New Gold Inc. (NYSE: NGD) | ||
B2Gold Corp. (NYSE: BTG) | First Majestic Silver Corp. (NYSE: AG) | |||
Centerra Gold Inc. (NYSE: CGAU) | ||||
| Van Eck Gold | |||
Pan American Silver | ||||
(Nasdaq: SSRM) | Eldorado Gold Corporation (NYSE: EGO) | |||||
Equinox Gold Corp. (NYSE: EQX) | Oceana Gold Corp. (OTCM: OCANF) | iShares Silver Trust (ARCX: SLV) | ||||
Fresnillo PLC (OTC: FNLPF) | Hochschild Mining plc (OTCM: HCHDF) | SPDR Gold Shares (ARCX: GLD) | ||||
Torex Gold Resources Inc. (OTC: TORXF) | Fortuna Silver Mines Inc. (NYSE: FSM) |
The Compensation Committee Process and the Role of Management and Human Resources Department
Role of the Committee. The committee, consisting entirely of independent members (Stanley, Johnson, and Boggs), has primary responsibility for executive compensation decisions. The committee carries out its responsibilities under a charter approved by the Board. The committee has the authority to approve all executive compensation, including our CEO’s (but not that of our independent directors, which is decided by the full Board). In 2022, the committee did not receive assistance from an independent executive compensation consultant. The committee assessed the Company’s compensation arrangements to determine if their provisions and operation created undesired or unintentional risks of a material nature. The committee found that our compensation policies and practices do not create inappropriate or unintended material risk to the Company as a whole. See Compensation Risk Analysis on page 59.
Role of Human Resources Department. In 2022, the committee determined the Company’s human resources department had the capacity to review and evaluate our executive compensation program and develop comparisons with the programs and NEO compensation levels of our peer companies. In 2022, the human resources department performed the following services:
evaluated the competitiveness of the total direct compensation package provided to Hecla’s executive officers; and specifically, compared Hecla’s current executive officer compensation with compensation provided to executives in similar roles at comparable peer group companies listed in the table on page 39;
reviewed updated information regarding Hecla’s executive compensation program and the positions to be benchmarked, including organization charts, position descriptions, current total compensation, and other relevant data;
reviewed last year’s peer group to determine if the included companies continue to be appropriate and if any additional companies should be considered for inclusion, or removed from the peer group due to a merger, acquisition, etc.;
collected and analyzed compensation data from the most recent proxy filings of the peer group and summarized the market pay data and compared Hecla’s executive compensation levels to the peer group proxies;
analyzed the year-over-year change in compensation levels for Hecla compared to each market data source;
analyzed Hecla’s long-term incentive and equity practices compared to peers;
prepared a report to the committee summarizing the methodology used and findings; and
assisted the committee in meeting its obligation to issue a Compensation Committee Report recommending inclusion of the CD&A in the Proxy Statement.
In June 2022, Hecla’s human resources department presented its competitive analysis findings and recommendations to the committee. The competitive analysis provided detailed comparative data for each executive officer position and assessed each component of pay, including base salary, short- and long-term
40 www.hecla.com
TableCompensation Discussion and Analysis
incentives and total target compensation, as well as the mix of Contentscompensation among these pay elements. The committee compared this information to the executives’ compensation by similarity of position. The committee also reviewed the Company’s performance and carefully evaluated each executive’s performance during the year against established goals, leadership qualities, operational performance, business responsibilities, career with Hecla, current compensation arrangements and long-term potential.
Role of Management. The committee considers input from the CEO in making determinations regarding our executive compensation program and the individual compensation of each NEO (other than the CEO). As part of our annual review process, the CEO reviews the performance of the other NEOs and their contribution to the overall performance of the Company. Approximately mid-year, the CEO presents recommendations to the committee regarding base salary adjustments, target STIP awards, stock-based grants, and LTIP unit grants, based on a thorough analysis of relevant market compensation data comparing Hecla with an applicable peer group within the mining industry. The CEO and SVP – CAO also make recommendations to the committee regarding the Company’s short-term quantitative and qualitative goals, and long-term goals for the NEOs (other than the CEO), as well as recommendations regarding the participation in the Company’s stock-based compensation plans and amendments to the plans, as necessary.
Compensation Philosophy and Objectives
WeManagement and the Board recognize that the mining industry is cyclical, influenced by market factors, and can include wide swings in the prices for precious metals, which are beyond our management’s control, that can significantly influence our profitability and share price. Further, we operate in a competitive and challenging industry. Over the past decade, a worldwide mining boom has significantly increased the demand for executives with mining-related skillsindustry, and experience. In addition, the supply of mining executives is very limited, particularly in the United States. As a result, having a viable compensation strategy is critical to our success.
We expect top-level performance from our executive management team during downturns in our industry and during periods of Company expansion. Accordingly, the criteria the committee has established for our performance-based awards have sometimes been particularly challenging to achieve. Nevertheless, even in years for which we have incurred a net loss, we have often performed better than most of our industry peers in key respects (e.g., reserves and resources). The committee considers this and other factors in evaluating discretionary awards.
Our compensation philosophy is to pay our NEOs competitive levels of compensation that best reflect their individual responsibilities and contributions to the Company, while providing incentives to achieve our business and financial objectives. While comparisons to compensation levels at companies in our peer group are helpful in assessing the overall competitiveness of our compensation program, we believe that our executive compensation program must also must be internally consistent and equitable in order for the Company to achieve our corporate objectives.
The pay-for-performance philosophy of our executive compensation programs described in this Proxy Statement plays a significant role in our ability to produce strong operating, exploration, strategic, and financial results. It enables us to attract and retain a highly experienced and successful team to manage our business. Our payThe programs strongly support our business objectives and are aligned with the value provided to our shareholders. Further, as an executive’s level of
responsibility within our organization increases, so does the percentage of totalcompensation thattotal compensation we link to performance – through the annual incentiveshort- and long-term incentive programs, as well as share price performance.
In setting policies and practices regarding compensation, the guiding philosophy of the committee is to:
• | have compensation that is primarily at-risk and based on strategic objectives and tactical activities; and | ||
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acquire, retain, and motivate talented executives.
The committee believes that a mix of both cash and equity incentives is appropriate, as annual cash incentives reward executives for achieving both short- and long-term quantitative and qualitative goals, while equity incentives align the interests of our executives with those of otherour shareholders. In determining the amount of the cash and equity incentives, the committee considers each officer’s total compensation on both a short- and long-term basis to assess the retention and incentive value of his or hertheir overall compensation.
The committee conducts its annual review process near the end of each calendar year in order to align each executive’s compensation awards with the Company’s operational, financial
2023 Proxy Statement 41
Compensation Discussion and strategic results for the calendar year.Analysis
We also maintain (or avoid) the following pay practices that we believe enhance our pay-for-performance philosophy and further align our NEOs’ interests with those of shareholders:
We DO Have these Practices
our shareholders have the opportunity annually to cast an advisory vote on our executive compensation;
incentive award metrics that are generally objective and tied to Company performance;
80.7% of the CEO’s |
64% of total compensation for the CEO is performance-based;
59.1% of total compensation for the other NEOs is performance-based;
• | we grant PSUs that have value based on our TSR rank within our selected peer group and have no value if the share performance does not achieve the 50th percentile in the peer group; |
rigorous stock ownership requirements for our executive officers and directors;
our change in control agreements contain double trigger payments and upon a change of control there is no excise tax gross up;
all of the CEO’s target STIP compensation is tied solely to Company performance;
time-based equity awards that generally vest over a three-year period to promote retention;
our Insider Trading Policy provides that directors and officers are prohibited from hedging or pledging any securities of the Company;
each of the Company’s incentive plans (STIP, LTIP, KEDCP, and 2010 Stock Plan) have clawback provisions;
our NEOs, including our CEO, generally must remain employed with the Company through the payment date of their short- and long-term awards, or the awards are forfeited, except in the cases of death, disability, or in some cases retirement;
• | our Insider Trading Policy prohibits all directors, executive officers, and certain other employees from purchasing or selling any Company |
compensation programs designed to discourage unnecessary or imprudent risk taking;
ongoing engagement with institutional shareholders regarding compensation policies and practices;
caps on performance-based cash and equity incentive compensation;
annual review and approval of executive compensation strategy; and
no strict benchmarking of compensation to a specific percentile of compensation peer group.
We DO NOT Have these Practices
× | repricing of stock options; |
× | perquisites; |
× | excise tax gross ups; and |
× | |||
single-trigger change in control | |||
arrangements. |
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Table of ContentsCompensation Discussion and Analysis
Elements of Total Compensation
We have a multifaceted compensation program. For the year ended December 31, 2015,2022, our executive compensation program consisted of the following elements:
Pay Element | Metrics / Objectives | ||||||
Base Salary | Objective:Provide a fixed level of cash compensation for performing day-to-day Key Feature: Designed to be at
Terms:Paid semi-monthly. |
(STIP) | Objective:Focus executives on achieving the Company’s short-term goals, and the performance steps necessary to achieve longer-term objectives. | |||||
Key Features: individual performance. | ||||||
Terms:Determined by the committee and paid in a single payment following the performance | ||||||
Long-Term Incentive Pay
| Objective:Focus executives on longer-term value creation as determined by the specific targets of the plan. | |||||
Key Features:Based on corporate goals achieved over a three-year performance period. A new three-year performance period begins each calendar year and performance units are granted in the first half of each year. Each three-year plan identifies key long-term objectives that are expected to create long-term value for shareholders such as returns. | ||||||
Terms:Determined by the committee and paid in a single payment following the three-year performance period. Awarded in the first | ||||||
2023 Proxy Statement 43
Compensation Discussion and Analysis
Pay Element | Metrics / Objectives | |||||
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RSUs | Objective: Align management’s interests with those of shareholders and provide incentive for NEOs to remain with the Company for the long term. | |||||
Key Features: | ||||||
Terms:
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PSUs | Objective: Provide incentive for | |||||
Key Features: | ||||||
Terms: |
KED CP | Objective:Increased exposure to the Company to the extent deferred compensation is tied to the value of Hecla stock, while also providing a tax deferral opportunity and encouraging financial planning. | |||
Key Features:Allows for the voluntary deferral of base salary, | ||||
Terms: |
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Benefits | Objective: Attract and retain highly qualified executives. | |||
Key Features:Participation in retirement plans, partial company-paid health, dental and vision insurance, life insurance, and accidental death and dismemberment insurance. | ||||
Terms:Same terms for all | U.S.-based executives. Non-U.S. executives receive similar benefits. |
TotalTargeted Compensation Mix
Our executive compensation program – composed primarily of base salary, short- and long-term incentives, and equity awards – is intended to align the interests of our NEOs with the long-term interests of our shareholders. The program is designed to accomplish this by rewarding performance that results in an increase in the value of our shareholders’ investment in Hecla. We believe that the proportion of at-risk, performance-based compensation should comprise a significant portion of executive pay.
2022 Target Compensation Structure
The following table lists total 2022 target compensation for the NEOs.
NEO | Base Salary ($) | STIP Target Award ($) | LTIP Target Award ($) | Equity(1) ($) | Total ($) | |||||||||||||||
Baker | 750,000 | 937,500 | 900,000 | 1,300,000 | 3,887,500 | |||||||||||||||
Roberts | 420,000 | 420,000 | 450,000 | 500,000 | 1,790,000 | |||||||||||||||
Lawlar | 330,000 | 330,000 | 315,000 | 325,000 | 1,300,000 | |||||||||||||||
Clary | 300,000 | 300,000 | 297,000 | 300,000 | 1,197,000 | |||||||||||||||
Brown | 300,000 | 210,000 | 283,500 | 285,000 | 1,078,500 |
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Compensation Discussion and Analysis
(1) | Consists of the target values for RSUs and PSUs as follows: |
NEO | RSUs ($) | PSUs ($) | Total Equity Award | ||||||||||||
Baker | 650,000 | 650,000 | 1,300,000 | ||||||||||||
Roberts | 300,000 | 200,000 | 500,000 | ||||||||||||
Lawlar | 195,000 | 130,000 | 325,000 | ||||||||||||
Clary | 180,000 | 120,000 | 300,000 | ||||||||||||
Brown | 170,000 | 115,000 | 285,000 |
(2) | Number of shares awarded is determined by dividing the value of the RSUs and PSUs awarded by the closing price of our common stock on the NYSE on June 21, 2022 ($4.43). |
Total Compensation Mix
The mix of compensation for our CEO and other NEOs, which we believe is similar to our peer group, is shown below.
2015 Target Compensation Structure. The following table lists total 2015 target compensation for the NEOs.
CEO Mix of Target Pay
Other NEO Mix of Target Pay
NEO | Base Salary ($) | Annual Incentive Target Award ($) | Long-term Incentive Plan Target Award ($) | Equity ($) | Total ($) | |||||||
Baker | 605,000 | 605,000 | 950,000 | 1,000,0001 | 3,160,000 | |||||||
Sabala | 380,000 | 304,000 | 340,000 | 345,000 | 1,369,000 | |||||||
Radford | 380,000 | 304,000 | 340,000 | 335,000 | 1,369,000 | |||||||
McDonald | 275,000 | 220,000 | 260,000 | 300,000 | 1,055,000 | |||||||
Sienko | 250,000 | 150,000 | 190,000 | 154,000 | 744,000 | |||||||
Poirier | 226,000 | 135,600 | 205,000 | 200,000 | 766,600 |
Individual base salaries and annual incentive targets for the NEOs are based on the scope of each NEO’s responsibilities, individual performance and market data. At the beginning of each year, we also define the keystrategic objectives each NEO is expected to achieve during that year, which are evaluated and approved by the committee.
CEO Mix of Target Pay | ||
Overview of our Compensation Decisions and Results for 20152022
Design. PursuantSummary
In 2022:
base salaries of our NEOs were increased an average of 12.1% in response to our market positioning policy, peer group analysis;
the assessment of our STIP corporate performance was 135% of target with quantitative factors contributing 60% (target of 60%), qualitative factors contributing 35% (target of 20%) and discretionary factors contributing 40% (target of 20%);
the 2020-2022 LTIP resulted in a payout to the NEOs of $123.75 per unit; and
• | PSU performance against the peer group achieved above target results, and our TSR ranked 2nd among the 21 peers in our group for the 2020-2022 period. As a result, the PSUs awarded in 2020 were issued to our NEOs. See 2020-2022 PSU Results on page 55 for further information. |
Base Salary
Design. The committee targets NEO base salaries betweenat approximately the 2550th percentile and median ofamong Hecla’s peer group for our NEOs.group. An individual NEO’s base salary may be set above or below this market range for that particular position, depending on the committee’s subjective assessment of the individual NEO’s experience, recent performance and expected future contribution, retention concerns, and the recommendation of our CEO (other than for himself). The committee does not use any type ofa quantitative formula to determine the base salary levellevels of any of the NEOs. The committee reviews NEO salaries at least annually as partof its overall competitive market assessment, as described above.previously described. Typically, the committee makes annual salary adjustments in the middle of each calendar year, effective for the 12-month period from July 1 to June 30.
2023 Proxy Statement 45
Compensation Discussion and Analysis
Analysis and Decision. In July 2015,June 2022, the committee reviewed a marketan analysis prepared by Mercer.the Company’s human resources department. The base salaries for allCommittee adjusted each of our NEOs remained unchanged asthe NEOs’ compensation to better align their salaries were comparablecompensation levels to the base salaries of other executives in ourcurrent peer group. Our NEOs base salaries have remained unchanged since July 1, 2014.group medians for 2022.
The following table shows annual base salaries for all NEO’sNEOs from July 1, 20142021 through December 31, 2015:2022:
Base Salary for NEOs July 1, 20142021 through December 31, 20152022
NEO | 7/1/14 to 6/30/15 Salary ($) | 7/1/15 to 12/31/15 Salary ($) | Percentage Increase (%) | |||||
Phillips S. Baker, Jr. | 605,000 | 605,000 | 0 | |||||
James A. Sabala | 380,000 | 380,000 | 0 | |||||
Lawrence P. Radford | 380,000 | 380,000 | 0 | |||||
Dr. Dean W.A. McDonald | 275,000 | 275,000 | 0 | |||||
David C. Sienko | 250,000 | 250,000 | 0 | |||||
Don Poirier | 226,000 | 226,000 | 0 |
Company Performance and Relationship to NEOCompensation. Our incentive compensation plans include the Hecla Mining Company Annual
NEO | 7/1/21 thru 6/30/2022 Salary | 7/1/2022 thru 12/31/2022 Salary ($) | ||||||||
Baker | 700,000 | 750,000 | ||||||||
Roberts | 380,000 | 420,000 | ||||||||
Lawlar | 265,000 | 330,000 | ||||||||
Clary | 265,000 | 300,000 | ||||||||
Brown | 264,000 | 300,000 |
Incentive Plan and the Hecla Mining Company Executive and Senior Management Long-Term Performance Payment Plan. The plans include performance measures of the most important factors we believe contribute to Hecla’s sustained long-term success that can lead to improved stock price performance.Plans
Hecla Mining Company Annual Incentive Plan (“AIP”). STIP
Consistent with Hecla’s pay-for-performance philosophy, substantially all salaried employees, including our NEOs, are eligible to participate in the AIP. Late in the prior year, or early in the current year,STIP. In February 2022, the committee approvesreviewed and approved the proposed 2022 STIP goals. In February 2023, the committee reviewed the Company performance, and approved a company-wide, short-term incentiveSTIP pool that is available for payment to salaried employees, including the NEOs, the amount of which is based on Company performance during the prior year.performance.
AIP Components. In 2014, the AIP was amended to use a more formulaic approach to awards, with less committee discretion. The AIP includes the following components and relative weights:
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While each component can achieve two and a half times the target (250%) with respect to the component, the maximum total payout is limited to two times the target award level (200%).
For 2015, the quantitative corporate performance factors were divided into three factors (including weighting): production (20%), adjusted EBITDA (20%) and cash (10%).
The production factor converts gold, lead and zinc to silver equivalent at a ratio of 71 oz. silver to 1 oz. gold, 19.2 lb. lead to 1 oz. silver, and 17.25 lb. zinc to 1 oz.silver. Our production target requires that we achieve 35 million silver equivalent ounces. Maximum payout is attained if production achieves 37 million ounces. The minimum payout requires 32 million ounces. To achieve targeted payout a 2% increase over 2014 silver equivalent production levels was necessary, while the maximum payout requires a 7% increase.
Production Goal Metrics
The adjusted EBITDA target was $155 million. Maximum payout is achieved if adjusted EDITDA is $170 million, which is $15 million more than target or approximately a 10% improvement in adjusted EBITDA. There is no payout if EBITDA is less than $130 million.
Adjusted EBITDA Goal Metrics
The cash position target is $175 million, adjusted for acquisitions at year-end. Maximum payout is achieved if our cash position at year-end is at or above $200 million, which was the cash position at the beginning of 2015. The threshold payout level is $160 million, below which no payout is earned.
Cash Goal Metrics
Target Opportunities. Each NEO has a target STIP award opportunity expressed as a percentage of base salary, along with minimum and maximum award levels.salary. The target award opportunities areis determined based on the following: market assessments and the committee’s market positioning policy; the individual NEO’s organization level, scope of responsibility and ability to impact Hecla’s overall performance; and internal equity among the NEOs. ActualawardsActual awards are paid after the end of each annualSTIP performance period (usually end of March or beginning of April) and can range from 0% to 200% of the target awards, based on the committee’s assessment of ourthe Company’s actual performance and the achievement of an individual NEO’s goals. Having a limit on our maximum awardSTIP awards reduces the likelihood of windfalls to executives and encourages financial discipline. It is also competitiveconsistent with typical peer group practice.
For 2015,2022, target AIPSTIP award opportunities for the NEOs were as follows:
NEO | Target (% of base salary) | |||||
Phillips S. Baker, Jr. | | 125 | % | |||
Lauren M. Roberts | 100 | % | ||||
Russell D. Lawlar | 100 | % | ||||
Michael L. Clary | 100 | % | ||||
Robert D. Brown | 70 | % | ||||
The market analysis prepared by Mercer in July 2015 indicated that annual incentives were generally at the median of peers.
Performance Measures and Components. Our management develops proposed targets and goals for each Company performance measure based on a variety of factors, including historical corporate performance, internal budgets, forecasts and growth targets, market expectations and strategic objectives. The committee reviews the targets and adjusts them, as it deems appropriate. The committee believes that linking annual incentive awards to pre-established goals, and then creates a performance-based compensation strategy consistent with shareholder interests. The committee also believesthatbelieves incentive compensation targets should be established to drive real and sustainable improvements in operating performance and the strategic position of the Company.
2015 AIP –
46 www.hecla.com
Compensation Discussion and Analysis
The STIP includes the following components and Decisions. The committee reviewedrelative weights:
quantitative corporate performance factors (measured from January to December) comprising 60% of the performance versustargeted award;
qualitative goals (measured from February 2022 to February 2023) comprising 20% of the AIP goals on targeted award; and
a quarterly basis. For 2015, based on the assessmentdiscretionary factor (measured from February 2022 to February 2023) as determined by the committee comprising 20% of the Company’s overalltargeted award.
Each component can achieve two times the target percentage, with the maximum total payout limited to two times the total target award level (200%).
Quantitative Corporate Performance Factors. For 2022, the quantitative corporate performance on both qualitative and quantitative measures as well as relevant discretionary factors under the AIP,STIP were divided into four factors (including weighting): production (15%), Adjusted EBITDA less mine site capital (20%), Exploration (10%), and ESG (15%).
2022 Production Metrics
2022 Production in Silver Equivalent Ounces (includes all metals) | ||||||||||||
Production Result | Factor Value | |||||||||||
105% | Maximum | 30 | % |
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100% | Target | 15 | % |
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<94.7% | Minimum | 0 | % |
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The production factor converts gold, lead, and zinc to silver equivalent at ratios of 82.5 oz. silver to 1 oz. gold, 22.0 lbs. lead, and 17.0 lbs. of zinc. We exceeded the committee determined Company performancebudgeted production in silver, but fell slightly behind for gold, lead, and zinc. The combined metal production results were approximately 98% of budget. We converted gold, lead, and zinc to beequivalent silver ounces at 115%year-end actual prices. In summary, 2022 was a good year for Hecla. We had good production despite underperformance at our Casa Berardi Mine. Production at our Greens Creek Mine was strong, and the Lucky Friday Mine produced more silver ounces than at any time in the past 20 years. Both our Greens Creek Mine and the Lucky Friday Mine achieved record mill throughput in 2022. The 2022 production goals resulted in 98% of the target (outlevel, and a factor value of a possible range of 0-200%)10.5%. The 115% measure was determined as described below and on pages 47 and 48.
For 2015, Company performance for quantitative AIP purposes was as follows:2022 Adjusted EBITDA Less Capital Metrics
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$180 mm | Maximum | 40 | % | |||||||||||||
$ | Target | 20 | % | |||||||||||||
<$60 mm | Minimum | 0 | % |
The Adjusted EBITDA less capital goal measures the cash generation of the Company. The Adjusted EBITDA less capitaltarget was $90 million.4 Maximum payout would have been achieved if Adjusted EBITDA less capital was at least $180 million. There would have been no payout if Adjusted EBITDA less capital was less than $60 million. Actual adjusted EBITDA less capital was $65.0 million, which is between minimum and target levels. The Adjusted EBITDA less capital metric resulted in a 3.5% factor value.
Exploration Metrics
The 2022 exploration program was a three-part goal: (1) adding reserves, (2) adding resources to non-operating properties, and (3) drilling new exploration targets. Minimum was set at maintaining both reserves and resources and testing 16 drill targets. Target was set at adding 15M AgEq ounces to reserves, 10M AgEq ounces to resources, and testing 22 drill targets. Maximum was set at adding 45M AgEq ounces to reserves, 30M AgEq ounces to resources, and testing 26 drill targets.
If minimum was met for all three components, then the maximum payout can be earned. The individual component with the highest payout will be used to calculate overall payout. The factor value is targeted at 10% and can go as high as 20%. Failure to achieve threshold results in zero payout.
4 | Adjusted EBITDA less capital is a non-GAAP measurement. See Appendix A for a reconciliation to GAAP. |
2023 Proxy Statement 47
Compensation Discussion and Analysis
In 2022, we added 41M AgEq ounces to reserves, which achieved between target and maximum; we added 54.5M AgEq ounces to the resources from non-operating properties, which exceeded the maximum threshold, and we tested 26 drill targets which achieves the maximum threshold. As a result, the Exploration goal achieved 20% of target.
Environmental, Social and Governance (“ESG”) Metrics
The final quantitative goals are related to ESG metrics with four components. The first was a safety goal that focused on advancing an 8-year trend of reducing our AIFR. The second was an environmental goal focused on reducing our diesel fuel per silver ounce produced. The third goal was focused on increasing our ESG score, and the final goal related to diversity among our management and professional staff. Each of these four goals was targeted at 3.75% each.
AIFR
The AIFR target was set at a 5% reduction from the three-year trailing average. Hecla’s year end 2021 three-year trailing average was 1.43. Minimum, Target, and Maximum rates were 1.43 (0% reduction), 1.39 (2.5% reduction), and 1.36 (5% reduction), respectively. Hecla’s actual AIFR for 2022 was 1.22%, which was a reduction of 14.6% and resulted in a factor value of 7.5%.
Reduction in AIFR | Factor Value | |||||||||||
5% | Maximum | 7.5 | % |
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2.5% | Target | 3.75 | % |
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0% | Minimum | 0 | % |
Decrease in GHG Emissions Per Revenue Dollar
The purpose of this goal is to improve Hecla’s Scope 1 and 2 Greenhouse Gas (“GHG”) equivalent emissions. The emissions were summarized at year-end 2022 on a GHG emissions intensity (total GHG tonnes*1000/US$ Revenue) basis. The target was set at the lowest quartile GHG intensity score amongst our industry subgroups, while a GHG intensity score in the lowest decile as compared to our industry subgroup would be the maximum payout. Scoring below the median GHG intensity subgroup scoring would result in zero payout. We achieved a ranking within the lowest decile among peers in the industry subgroup. The result is a factor value of 7.5%
Decrease in GHG Emissions | Factor Value | |||||||||||
Lowest Decile | Maximum | 7.5 | % | |||||||||
Lowest Quartile | Target | 3.75 | % | |||||||||
Below Median | Minimum | 0 | % |
As reflectedIncrease in ESG Scores
The purpose of this goal was to improve the table above, onlyESG scores as provided by Sustainalytics. The scores were summarized at year-end 2022 and compared to the production portionESG scores of the AIPPrecious Metals Mining Peer Group. Target was achieved and it exceeded the threshold required forset as an improvement in total ESG score by one quartile against our industry subgroup, an increase by two quartiles would be the maximum level. payout. Failing to climb at least one quartile would result in zero payout. We achieved a one quartile improvement in ESG scores, resulting in a factor value of 3.5%.
ESG Score Improvement | Factor Value | |||||||||||
2 Quartile improvement | Maximum | 7.5 | % | |||||||||
1 Quartile improvement | Target | 3.75 | % | |||||||||
No improvement | Minimum | 0 | % |
48 www.hecla.com
Compensation Discussion and Analysis
Diversity of Management and Professional Staff
The adjusted EBITDApurpose of this goal is to increase the number of female leaders within our management and cash performance factors were both below threshold level. Therefore,professional staff. An increase of 5% was established as target, and an increase of 10% would be the committee determined thatmaximum. Minimum was set at no increase and would result in zero payout. In 2022, we added 7 female leaders and professionals to the quantitative64 we had in 2021. This resulted in an increase of 10.9%, and a factor accounted for 50%value of the target 2015 AIP award (out of a possible 0 to 125% of the target 2015 award)7.5%.
Increase in Diversity | Factor Value | |||||||||||
10% | Maximum | 7.5 | % |
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5% | Target | 3.75 | % |
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0% | Minimum | 0 | % |
Qualitative Corporate Performance Factors. In addition to quantitative corporate performance factors, our AIPSTIP has a component that is based on qualitative and other goals relating not only to Hecla as a whole, but also to each NEO. This component is targeted to account for 25%20% of the total AIP targetoverall potential STIP award but can account for 00% to 62.5%40% of the target award.
For our 2015 AIP, qualitativeQualitative objectives for NEOs included thoseare over two hundred initiatives and tasks related to most aspects of Hecla’s business including, but not limited to: (i) safety and health, (ii) environmental, tailings, and environment, (ii) process improvement,permitting, (iii) sustainability, (iv) technical services, (v) operations, (iv) financial condition, (v) growth, (vi) development projects,financial/treasury/accounting/tax, (vii) exploration, (viii) legal, (ix) investor relations, (viii) human resources, (ix) information technology, (x) human capitalinternal affairs, (xi) governmental affairs, (xii) closed operations, (xiii) mine life extension, exploration, and reserve growth, (xiv) corporate development, (xv) legal, and (xi) government and community relations – with quantifiable targets within those categories where applicable. The specific objectives for each NEO are chosen to reflect each NEO’s individual responsibilities, with shared goals where appropriate. While most(xvi) board.
We met or exceeded many of the key qualitative goals are subjectiveand made substantial progress towards others in nature, to the extent possible, objective and quantifiable targets are set in order to improve accountability for results.
For 2015, the2022. The committee assessed qualitative performance under this component at 35% of the target award (above the 25% target and within the possible range of 0-62.5%). The committee based its assessment on more than two hundred goals and initiatives, and the following factors:are some that were achieved:
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finalized plan for permit extensions at San Sebastian;
held an investor day, highlighting the Lucky Friday Mine’s new UCB mining method;
advanced work on the flotation recovery enhancement concept;
established effective ore production and modeling reconciliation procedures at the Lucky Friday Mine;
published the 2021 Sustainability Report before our 2022 Annual Shareholder Meeting; and
acquired Alexco Resource Corp. and the Keno Hill operations in the Yukon.
Discretionary Factors. The final component of our AIPSTIP is at the discretion of the committee (based on Company and individual performance) and it is targeted to account for 25%20% of the total AIP targetSTIP award but can account for 00% to 62.5%40% of the target award. For 2015,2022, the committee determined the discretionary factor performance value to be at 30% of the target award (above the 25% target and within the possible range of 0-62.5%)40%. The committee based its assessment primarily on the following significant performance results by Hecla in 2015:2022:
achieved the second highest TSR among our peers for the 2020-2022 period;
successfully refinanced the credit agreement with less security and better overall terms;
completed a company-wide Suicide Awareness training campaign;
scaled down our Nevada operations, while successfully placing key staff members into vacancies within the organization;
recovered $4.2 million in insurance proceeds from insurers;
negotiated the elimination of the Keno Hill silver stream;
achieved significant progress in ESG reporting;
strong say on pay results (98% in favor), and favorable shareholder outreach;
consolidated volumes of concentrates from the Greens Creek Mine and Lucky Friday Mine on ships to save on shipping costs;
our Greens Creek Mine set new daily, monthly, quarterly, and yearly tonnage records through the mill;
our San Sebastian operation was awarded the Mine Environmental and Sustainability Excellence Award;
had two Nevada employees selected for individual safety awards by the Nevada Mining Association; and
successfully repaired a large landslide and road washouts at our Greens Creek Mine due to inclement weather.
2023 Proxy Statement 49
Compensation Discussion and Analysis
Summary of 2022 STIP Results
Results |
Value | |||||||||
Quantitative |
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Production | 10.5 | % |
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Adjusted EBITDA less capital | 3.5 | % |
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Exploration | 20.0 | % |
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Environmental, Social & Governance | 26.0 | % |
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• AIFR (7.5%) |
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• Decrease in GHG Emissions (7.5%) |
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• Increase in ESG Scores (3.5%) |
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• Diversity of Management and Professional Staff (7.5%) |
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Qualitative | 35.0 | % | ||||||||
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Total Performance Value | 135.0 | % |
In additionNEO Year-end 2022 Individual Performance. The STIP qualitative, quantitative, and discretionary factors resulted in a corporate performance that the committee concluded to be 135% of target. NEOs’ performance is based on a combination of corporate performance, individual goals, and the strong performance realized by our NEOs within their functional area and as part of the executive team, each NEO made significant contributions to Hecla’s 2015 performance.
Messrs. Baker, Radford and McDonald were instrumental in getting the San Sabastian mine into production by fourth quarter 2015.impact they have on shareholder value. The committee believes that our NEOs’ performance goals should support and help achieve the startupCompany’s strategic objectives and be tied to their areas of responsibility. Individual performance goals for each NEO, except the CEO, were proposed by the CEO and reviewed and approved by the committee.
After the end of the San Sebastian mine wasyear, our CEO reviews each of the other NEO’s progress against their individual performance goals and makes a tremendous accomplishmentrecommendation to the committee. When making its award determinations, the committee did not assign a specific weighting to any of the individual’s goals, but instead reviewed each NEO’s progress against their individual goals in the aggregate. The following is a summary description of the performance goal results for each of the Company.NEOs for 2022, except our CEO, who is discussed separately on the following page.
Mr. Roberts | Year-end 2022 Performance Results | |
• matched best Company AIFR; • achieved record mill throughput rates at each operating mine; • led an optimization program to position our Lucky Friday Mine for record silver production in 2023; and • successfully integrated the Keno Hill Mine into Hecla’s portfolio. | ||
Mr. Lawlar | Year-end 2022 Performance Results | |
• refinanced the credit agreement and added new trading counterparties; • added new customers for Lucky Friday Mine concentrates; • held analyst tour at the Lucky Friday Mine; and • structured the Alexco Resource purchase transaction to preserve tax attributes totaling approximately $297 million. | ||
Mr. Clary | Year-end 2022 Performance Results | |
• negotiated and signed a six-year labor agreement with the United Steel Workers; • created an improved college recruiting program; • led a successful human capital integration following the acquisition of Alexco Resources; and • streamlined the administrative process for the Hecla Charitable Foundation. | ||
Mr. Brown | Year-end 2022 Performance Results | |
• managed the acquisition of Alexco Resources; • negotiated the buyout of the silver stream previously encumbering the Keno Hill Mine; • instrumental in developing and advancing our ESG program; and • successfully led the effort to achieve net zero Scope 1 and Scope 2 CO2e emissions. |
50 www.hecla.com
Compensation Discussion and Analysis
CEO Year-end 2022 Performance. Under Mr. Radford’sBaker’s leadership was also instrumental in developing the organization and acquiring the work force needed to get the San Sebastian mine into2022, we achieved good production achieving higher recoveriesresults. Silver production at our Greens Creek reducing geotechnical riskMine was strong, and the Lucky Friday Mine produced more silver ounces than at any time in underground operations, advancing the open-pit project at Casa Berardi,past 20 years, while both Greens Creek and combined operations achieving higher production.
Dr. McDonald oversees the exploration program that helpedLucky Friday mines achieved record mill throughput in 2022. Hecla also acquired Alexco Resource in September 2022, putting the Company makein a position to be the decisionlargest silver producer in Canada in upcoming years. The Company ended the year with a strong balance sheet with over $100 million in cash and added significantly to start upour reserves, ending the San Sebastian mineyear with the highest silver reserves in the Company’s history. Most importantly, Hecla achieved the third highest TSR among its peers in 2022. The committee awarded Mr. Baker 175% of his targeted STIP award due to his leadership and continued to increase reserves.the overall strong performance of the Company.
Mr. Sabala was instrumentalThe committee evaluated each NEO’s performance in managing Hecla’s cash position in 2015, effectively managing working capital, implementing creative methods for pension funding, taking a lead role inhis or her functions, the acquisition of Revett Mining Company, negotiating credit agreements and improving capital market relationships.
Mr. Sienko was successful in resolving several significant regulatory and legal cases involving environmental, health and safety, and litigation issues, while also supporting acquisition activities related to Revett Mining Company,progress he or she made towards his or her individual goals and the fundingCompany’s goals as discussed above, and the overall success of pension plans.the Company in 2022. The NEOs completed various goals during the year, and the overall performance of the Company exceeded expectations during 2022. As a result, the committee determined each of the NEO’s performance under the STIP to be between 127% and 186% of target.
Mr. Poirier was instrumental in the acquisition of Revett Mining Company, as well as the assessment of several potential large scale acquisitions.2022 STIP Award Summary
Set forth in the table below is each NEO’s target award and actual award, which was paid 50% in cash and 50% in Hecla common stock issued under the 2010 Stock Incentive Plan.cash.
Name | Base Salary (12/31/15) ($) | Base Salary Factor (%) | Target Annual Incentive ($) | % to Target1 (%) | Actual Award2 ($) | Cash Received ($) | Equity Received3 (#) | ||||||||
Phillips S. Baker, Jr. | 605,000 | 100 | 605,000 | 115 | 695,750 | 347,875 | 147,404 | ||||||||
James A. Sabala | 380,000 | 80 | 304,000 | 125 | 380,000 | 190,000 | 80,508 | ||||||||
Lawrence P. Radford | 380,000 | 80 | 304,000 | 165 | 500,000 | 250,000 | 105,932 | ||||||||
Dr. Dean W.A. McDonald | 275,000 | 80 | 220,000 | 110 | 242,000 | 121,000 | 51,271 | ||||||||
David C. Sienko | 250,000 | 60 | 150,000 | 100 | 150,000 | 75,000 | 31,780 | ||||||||
Don Poirier | 226,000 | 60 | 135,600 | 99.56 | 135,000 | 67,500 | 28,602 |
Name | Base Salary ($) | Base Salary Factor (%) | Target STIP ($) | % to Target(1) (%) | Actual Award(2) ($) | ||||||||||||||||||||
Phillips S. Baker, Jr. | 750,000 | 125 | 937,500 | 175 | 1,640,625 | ||||||||||||||||||||
Lauren M. Roberts | 420,000 | 100 | 420,000 | 130 | 546,000 | ||||||||||||||||||||
Russell D. Lawlar | 330,000 | 100 | 330,000 | 127 | 419,100 | ||||||||||||||||||||
Michael L. Clary | 300,000 | 100 | 300,000 | 175 | 525,000 | ||||||||||||||||||||
Robert D. Brown | 300,000 | 70 | 210,000 | 186 | * | 390,000 |
Rounded (actual = Brown, 185.71%) |
(1) | The percentages listed for each of the NEOs |
The amount reported in this column was paid in cash | |
Hecla Mining Company Executive and Senior Management Long-Term Performance Payment Plan (“LTIP”).LTIP
We use the LTIP to focus executivesemployees on meeting long-term (three-year) corporate performance goals. The LTIP is also designed to attract and retain executivesemployees in a highly competitive talent market. The committee takes into accountconsiders mining and general industry market practices, as well as the long-term objectives of the LTIP,Company, when determining the terms and conditions of long-term incentive goals, such as resource additions, production, and cash flow generation.
Under the LTIP, a new performance period begins each calendar year and runs for three years. The three-year performance period recognizes that some value-creating activities require a significant period of time to be implemented and for measurable results to accrue. Starting a new performance period each year also gives the committee flexibility to adjust for new business conditions, circumstances, or priorities in setting the performance metrics and goals for each three-year cycle. Performance units are assigned to each NEO at the beginning of each three-year period and provide the basis for the amount of awards made to each NEO under the LTIP. Performance units are designed to encourage management to deliver long-term value. Performance units reinforce Hecla’s business strategy by clearly establishing our key performance elements (e.g., reserve and resource growth, production growth, and cash flow, #4 Shaft completion, and relative TSR)flow) and the associated long-term performanceobjectivesperformance objectives that must be met for us to be successful and create value for shareholders.
The 2013-2015 LTIP units have a target value of $125 each, and a maximum potential value of $300 each. Performance unitsawards are paid out as soon as practicable afterin the first half of the year following the end of each performance period, upon approval by the committee. At the discretion of the committee, the payouts may be in the form of cash, common stock, restricted stock units, or a combination of these forms.both.
2013-2015 LTIP.Summary of 2020-2022 LTIP. In March 2020, the committee approved the 2020-2022 LTIP, which has a target value of $90 per unit and a maximum potential value of $525 per unit. The tables below summarize2020-2022 LTIP consists of three performance goals, plus a TSR multiplier. Payout under the LTIP takes place in late March or early April of the year
2023 Proxy Statement 51
Compensation Discussion and Analysis
following the three-year LTIP period, upon approval by the committee. At the discretion of the committee, the payouts may be in the form of cash, equity, or a combination of both.
The measured performance unit valuation rangesgoals for the 2020-2022 LTIP were silver-equivalent reserve growth, production growth, and mine site operating cash flow, #4 Shaft completion, and TSR for the 2013-2015 plan period – the five performanceflow. The committee concluded these goals approved by the committee in February 2013. These arewere important goals for the following reasons:
• | Silver equivalent reserve | ||
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Production growth. One of the most important components of value creation is demonstrable production | |
• | Mine site operating cash flow less capital. We endeavor to ensure that each operating site generates free cash flow, and this net cash contribution goal reflects that operating philosophy. The silver and gold costs per ounce, production and capital expenditures at each mine site were those contained in our long-range plan for the |
2013-2015 Performance Unit ValuationTSR is a key element of the LTIP because it provides a relative performance metric to our peers. This component of the LTIP is different than the other components in that the TSR serves as a multiplier (either positive or negative). This component insures alignment of the results of the other components with share performance. If our relative TSR performance is in the mid-range (7th – 9th), the multiplier is 100% of the value achieved by the other three components, and thus has no positive or negative affect on the unit value earned. If our relative TSR is in the top 6, the multiplier is positive, and thus would enhance the unit value because the relative TSR was strong. If our relative TSR is in the bottom six, the multiplier is negative. If the relative TSR is in the top three, the TSR multiplier is 250%. Regardless of the unit value earned by the unit value factors, in the event the absolute TSR is negative, the multiplier is limited to no greater than 100% of the value earned by the unit value factors. In order to achieve maximum levels, we must maintain a positive TSR on an absolute basis.
Silver Reserve Growth | ||||||
Ounce Target (millions) | Additional Reserve (millions) | Unit Value | ||||
250 | 100 | $ | 100.00 | |||
200 | 50 | $ | 50.00 | |||
180 | 30 | $ | 25.00 | |||
160 | 10 | $ | 5.00 |
Cash Flow | |||||
% of Target | Unit Value | ||||
115% | $ | 50.00 | |||
110% | $ | 42.50 | |||
105% | $ | 32.50 | |||
100% | $ | 25.00 | |||
95% | $ | 22.50 | |||
90% | $ | 20.00 | |||
85% | $ | 17.50 | |||
80% | $ | 15.00 | |||
75% | $ | 12.50 | |||
70% | $ | 10.00 | |||
65% | $ | 7.50 | |||
60% | $ | 0.00 |
2020-2022 LTIP Targets and Results
Measured Performance Goal | Target Amount | Actual Amount | ||||||||||
Silver-equivalent reserve growth (includes only gold) | 30 million AgEq | 15.7 million AgEq | ||||||||||
Production growth | 90 million AgEq | 91.9 million AgEq | ||||||||||
Mine site operating cash flow less capital | $ | |||||||||||
Silver Production Growth | |||||
Target (in mm ozs.) | Average Annual Target (in mm ozs.) | Performance Unit Value | |||
65.1 | 21.7 | $50.00 | |||
56.1 | 18.7 | $40.00 | |||
24.1 | 18.0 | $25.00 | |||
51.6 | 17.2 | $10.00 |
Total Shareholder Return | |||||
%ile rank within Peer Group Companies | Unit Value | ||||
100% | $ | 50.00 | |||
90% | $ | 45.00 | |||
80% | $ | 40.00 | |||
70% | $ | 35.00 | |||
60% | $ | 30.00 | |||
50% | $ | 25.00 | |||
25% | $ | 15.00 | |||
<25% | $ | 0.00 |
273 million | ($16.9) million | |||||||||||
TSR | Median | 90th percentile |
TableReserve Growth. Growth in the reserves suffered in 2020 due in part to an adjustment to the cutoff grade at our Greens Creek Mine, as well as the inability to engage in exploration drilling as a result of ContentsCOVID-19 restrictions. In 2021, reserves increased 40 million AgEq. In 2022 reserves grew 27 million AgEq primarily due to the acquisition of Keno Hill in the third quarter of 2022. Over the three years, we replaced both production (92 million AgEq) and reserves losses and increased our total reserve by 15.7 million AgEq ounces from the beginning reserve. The additional 15.7 million AgEq ounces resulted in a payout of $20.50 per unit.
2013-2015Production Growth. Production growth was above target during 2020 and 2021, but below target in 2022, resulting in 92 million AgEq or 2% above target for the three-year term of the LTIP. However, because annual production decreased from 2020 to 2021, and from 2021 to 2022, by approximately one million AgEq ounces in each year, the unit value was reduced by 10% in each respective year. The unit value after deducting the annual production decline was $29 per unit.
Cash Flow. Cash flows for each year of the three-year LTIP – Analysisperiod were below threshold. The threshold result was primarily due to the fact that we used fixed metals prices and Decisions.actual expenditures in measuring performance during the LTIP period. Therefore, the plan was harmed by the effects of COVID and inflation but did not recognize the benefits of increased metals prices. The committee assessed performance under the 2013-2015 LTIP as follows:
Performance Measure | Target | Actual Performance | % of Target | Value Earned Per Unit | ||||||
Silver Reserve Growth | 30.0 silver oz. | 25.4 silver oz. | 85% | $20.50 | ||||||
added (millions) | added (millions) | |||||||||
Production Growth | 54.1 silver oz. | 59.2 silver oz. | 109% | $43.50 | ||||||
(millions) | (millions) | |||||||||
Cash Flow | $848.49 cash | $884.98 cash | 104% | $31.50 | ||||||
flow (millions) | flow (millions) | |||||||||
Total Shareholder Return | 50% Hecla | 69.2% Hecla | 138% | $34.50 | ||||||
ranking vs. peers | ranking vs. peers | |||||||||
#4 Shaft Completion | Shaft Completed | 10/26/16 | 0% | No Payout | ||||||
by 2/15/16 | completion date | |||||||||
Total Earned Per Unit | $130.00 |
During this three-year period, performance in production, mine site cash flow generation, and TSR exceeded the target, and silver reserve growth exceeded the threshold, butless capital was below target, while #4 Shaft completion was below the threshold. As a result, with a range in potential value per unit of $0 to $300, in February 2016, the committeedetermined that the total 2013-2015 LTIP($16.9 million). The payout was $130.00$0 per unit.
52 www.hecla.com
Compensation Discussion and Analysis
TSR. Hecla’s relative TSR over the 3-year LTIP period ranked 2nd among the 22 peer companies (inclusive of Hecla) or a 250% multiple. The committee and the Board further approved payouttotal unit value of the$49.50, multiplied by 250% results in a total unit value of $123.75.
2020-2022 LTIP awards to be 50% in cash and 50% in Hecla common stock issued under the 2010 Stock Incentive Plan.Award Summary
The following chart shows the number of performance units awarded in 20132020 to each NEO, the unit value achieved, the total amount of the award (number of units x $130.00$123.75 = amount received)total award value), and the amount of cash and number of shares received.
Name | 2013-2015 Performance Units (#) | Unit Value ($) | Total Amount of Award1 ($) | Cash Received ($) | Equity Received2 (#) | |||||||
Phillips S. Baker, Jr. | 8,250 | 130.00 | 1,072,500 | 536,250 | 227,225 | |||||||
James A. Sabala | 3,400 | 130.00 | 442,000 | 221,000 | 93,644 | |||||||
Lawrence P. Radford | 3,000 | 130.00 | 390,000 | 195,000 | 82,627 | |||||||
Dr. Dean W.A. McDonald | 2,600 | 130.00 | 338,000 | 169,000 | 71,610 | |||||||
David C. Sienko | 1,900 | 130.00 | 247,000 | 123,500 | 52,331 | |||||||
Don Poirier | 2,050 | 130.00 | 266,500 | 133,250 | 56,462 |
Name | 2020-2022 Performance Units (#) | Unit Value ($) | Total of Award ($) | ||||||||||||
Phillips S. Baker, Jr. | 8,000 | 123.75 | 990,000 | ||||||||||||
Lauren M. Roberts | 4,000 | 123.75 | 495,000 | ||||||||||||
Russell D. Lawlar | 2,067 | (1) | 123.75 | 255,791 | |||||||||||
Michael L. Clary | 2,050 | 123.75 | 253,688 | ||||||||||||
Robert D. Brown | 3,000 | 123.75 | 371,250 |
Mr. Lawlar’s 2020-2022 LTIP units were prorated because he was | |
RestrictedEquity
We have no program, plan, or practice to time the grant of stock-based awards relative to the release of material non-public information or other corporate events. All equity grants to executive officers are approved by the committee at regularly scheduled meetings or, in limited cases involving key recruits or promotions, by a special meeting or unanimous written consent. The grant date is the meeting date, or a fixed, future date specified at the time of the grant. Under the terms of our 2010 Stock Units. RestrictedPlan, the fair market value of any award is determined by the closing price of our common stock units (“RSUs”)on the NYSE on the date of grant or a fixed, future date specified at the time of grant. In addition, the committee typically makes equity grants to NEOs in the first half of the year.
RSUs
RSUs are granted to the NEOs under the Key Employee Deferred Compensation Plan and/or the 2010 Stock Incentive Plan. RSUs are used to retain our NEOs and align their interests with the long-term interests of our shareholders. The committee awarded RSUs to each NEO RSUs in July 2015.June 2022. The RSUs vest in three equal amounts with vesting dates of June 21, 2016,2023, June 21, 2017,2024, and June 21, 2018.2025. SeeGrants of Plan-Based Awards for 20152022 on page 64.63.
In December 2014, the committee amended the 2010 Stock Incentive Plan and Key Employee Deferred Compensation PlanKEDCP so that any RSUs vesting after 2014 would no longer be credited with dividend equivalents. In order to incentivize RSU recipients to continue working for the Company, RSU awards require both an age and years of service trigger in order to qualify for vesting of the RSUs as of the employee’s retirement. The 2010 Stock Plan provides that for purposes of the RSU awards, RSU recipients who retire under the Retirement Plan must be at least age: (i) 60 and have 15 or more years of service with the Company; (ii) 65 and have seven or more years of service with the Company; or (iii) 68, in order to receive their unvested RSUs after retirement. If one of the above requirements is met, the recipients will receive their RSUs on the applicable vesting dates.
2023 Proxy Statement 53
Compensation Discussion and Analysis
In 2015,2022, we granted RSUs to 96approximately 123 employees including all NEOs, under the 2010 Stock Incentive Plan.Plan, including the NEOs as follows:
NEO | Value of RSUs ($) | Number of Shares(1) (#) | ||||||||
Phillips S. Baker, Jr. | 650,000 | 146,726 | ||||||||
Lauren M. Roberts | 300,000 | 67,720 | ||||||||
Russell D. Lawlar | 195,000 | 44,018 | ||||||||
Michael L. Clary | 180,000 | 40,632 | ||||||||
Robert D. Brown | 170,000 | 38,374 |
Number of shares was determined by dividing the value of the RSUs awarded by the closing price of our common stock on the NYSE on June 21, 2022 ($4.43). |
We grant PSUs to certain executive officers, including our NEOs. The value of Contentsthe awards is based on the ranking of the TSR performance of our common stock relative to the TSR performance of the common stock of a group of peer companies over a three-year measurement period. The number of shares to be issued is based on the target value of the awards divided by the share price at grant date. The compensation cost is measured using a Monte Carlo simulation to estimate their value at grant date.
Performance-based Shares. In July 2015,June 2022, the committee and the independent Board members granted 204,918 performance-based sharesPSUs to our CEO,NEOs with a grant date value of $500,000, comprising one-half of his total equity awards in 2015.the target values listed below. The value of these performance-basedsharesPSUs will be based on the TSR of our common stock for the three-year period from January 1, 20152022, through December 31, 2017,2024, based on the following percentile rank listed below within a group of peer companies:companies.
NEO | Target Value of ($) | Number of Shares(1) (#) | ||||||||
Phillips S. Baker, Jr. | 650,000 | 146,726 | ||||||||
Lauren M. Roberts | 200,000 | 45,146 | ||||||||
Russell D. Lawlar | 130,000 | 29,345 | ||||||||
Michael L. Clary | 120,000 | 27,088 | ||||||||
Robert D. Brown | 115,000 | 25,959 |
(1) | Number of shares was determined by dividing the target value of the PSUs by the closing price of our common stock on the NYSE on June 21, 2022 ($4.43). |
Company TSR Rank Among Peers | TSR Performance Multiplier | ||||
50thpercentile | Threshold award at 50% of target | ||||
60thpercentile | Target award at grant value | ||||
100thpercentile | Maximum award at 200% of target |
If Hecla’s performance is below the 50thpercentile, the award is zero. If Hecla’s performance is between the 50thand 100thpercentile, the award is prorated. For any award, the number of shares issued in 2018 at the conclusion of the three-year performance period (December 31, 2024), will be baseddetermined by using the share price on the date of original grant date share price (July 1, 2015)(June 21, 2022) of $2.44.$4.43.
Hecla’s TSR performance versus that of our peer group will be based on a comparison of the average closing share price over the last sixty (60) calendar days prior to January 1, 2015, as2022 (the base price) with the base price and average closing share price over the last sixty (60) calendar days of the three-year performance period to determine relative share value performance and ranking among peers.
For 2015, theThe industry peer group used for purposes of the 2022-2024 TSR performance-based awardPSUs discussed above is listed on page 39.
2013 – 2015 Performance-based Shares –
54 www.hecla.com
Compensation Discussion and Analysis and Decision.On June 21, 2013,
2020-2022 PSU Results
In February 2023, the committee and independent memberscertified the results of the Board of DirectorsPSUs granted 170,648 performance-based shares of Hecla’s common stock, whichin 2020 to our executive officers. These PSUs had a target value of $500,000three-year performance period ended December 31, 2022, with the potential of up to 200% of this target value (subject to specific performance termsvesting and conditions established for these shares) to our CEO under the Key Employee Deferred Compensation Plan. These performance-based shares were awardedpayout based on the Company’s TSR compared to our TSR peer group (consisting of Hecla common stock for the three-year period21 companies) from January 1, 20132020 through December 31, 2015, using2022. The following table shows the following percentile rank withincalculation of the PSU results at the end of the three-year performance period on December 31, 2022. During this three-year performance period, Hecla ranked first among the 21 peer group companies:companies based on TSR from 2020 through 2022, which resulted in a payout percentage of 200% of the executives’ targeted PSU award values.
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To determine the relative share performance, Hecla’s TSR performance versus that of TSR peer group companies was based on a comparison of the average closing share price over the last sixty (60) calendar days prior to January 1, 2013, as the2020 (the base price, comparedprice) with the average closing share price over the last sixty (60) calendar days of the three-year performance period (ending(ended December 31, 2015)2022).
The following table showsbelow details the calculationvalue of the performance-based share results at the end of the three-year performance period on December 31, 2015. Hecla’s TSR ranked 5th among the 13 companies in the peer group based on TSR from 2013 through 2015, including dividends paid during that period. Ranking 5th places Hecla at 69.2% among the peer companies, which equates to an award value of $692,000 or 236,177 shares at the $2.93 closing price of Hecla’s common stock on June 21, 2013.
TOTAL SHAREHOLDER RETURN – January 1, 2013 through December 31, 2015 | ||||||||||||||
Peer Name | Average Stock Price over 60-day period leading up to 1/1/2013 ($) | Average Stock Price over 60-day period leading up to 12/31/15 ($) | Dividends Paid (1/1/13 thru 12/31/15) ($) | TSR thru 12/31/15 (%) | Rank (#) | Payout ($) | ||||||||
Centerra Gold | 9.33 | 7.69 | 0.48 | -17.58 | 1 | 1,000,000 | ||||||||
Stillwater Mining | 11.48 | 8.98 | -21.78 | 2 | 923,000 | |||||||||
Pan American Silver | 19.16 | 8.16 | 1.28 | -57.44 | 3 | 846,000 | ||||||||
Silver Standard | 14.23 | 5.39 | -62.12 | 4 | 769,000 | |||||||||
Hecla | 5.79 | 2.00 | 0.04 | -65.46 | 5 | 692,000 | ||||||||
New Gold | 10.57 | 3.12 | -70.48 | 6 | 615,000 | |||||||||
Endeavour Silver | 8.25 | 1.95 | -76.36 | 7 | 538,000 | |||||||||
TARGET PAYOUT | 500,000 | |||||||||||||
Eldorado Gold | 13.99 | 3.30 | 0.16 | -76.44 | 8 | 462,000 | ||||||||
First Majestic Silver | 22.01 | 4.36 | -80.19 | 9 | 385,000 | |||||||||
Alamos Gold | 18.52 | 3.50 | 0.26 | -81.10 | 10 | 308,000 | ||||||||
THRESHOLD PAYOUT | 250,000 | |||||||||||||
IAMGOLD | 12.31 | 1.62 | 0.13 | -86.88 | 11 | |||||||||
Coeur d’Alene Mines | 24.09 | 2.59 | -89.25 | 12 | ||||||||||
Golden Star Resources | 1.79 | 0.19 | -89.39 | 13 | ||||||||||
Allied Nevada Gold | 30.30 | 0.00 | -100.00 | 14 |
Stock Options.The ability to grant stock options under the 1995 Stock Incentive Plan expired in May 2010. All outstanding stock options granted under that plan expired on May 5, 2015. In June 2010, our shareholders approved the 2010 Stock Incentive Plan. Any stock options granted under this plan will be issued with an exercise pricePSUs based on the fair market value (the closing sales priceestimated outcome as of our common stock on the NYSE on the date of grant).
Ingrant. These values for the past five years, we have not issued any stock options to2020 PSUs are reflected in the applicable Grants of Plan-Based Awards for 2020 tablefrom our NEOs (or any other employee). Before that time, we granted stock options to key employees during2021 Proxy Statement, and the second quarterrealized value of the calendar year and made occasional grants to new employeescommon stock received upon hire.settlement of the awards on February 24, 2023.
Executive | Target Number of (#) | Value of Awards ($) | Number of 2020 PSUs (#) | Realized Value of ($) | ||||||||||||||||
Baker | 132,013 | 81,848 | 264,026 | 1,314,849 | ||||||||||||||||
Roberts | 49,505 | 30,693 | 99,010 | 493,070 | ||||||||||||||||
Lawlar(3) | — | — | — | — | ||||||||||||||||
Clary(3) | — | — | — | — | ||||||||||||||||
Brown | 34,653 | 21,485 | 69,306 | 345,144 |
(1) | Consistent with the requirements of FASB ASC Topic 718, the value of PSUs is based on the estimated outcome as of the date of grant. In accordance with FASB ASC Topic 718, this result is based on a relative TSR result modeled using a Monte Carlo simulation. The amounts in this column reflect the aggregate grant date fair value of the PSUs for accounting purposes determined in accordance with SEC rules, and do not reflect the actual economic value that was realized by the NEO at the end of the relevant three-year performance period. |
(2) | Reflects the closing price of our common stock on February 24, 2023 ($4.98), the date on which the executive’s received shares underlying their 2020 PSUs. |
(3) | Messrs. Lawlar and Clary did not receive any PSUs in 2020. |
Other
Nonqualified Deferred Compensation Plan.Plan. We maintain the Key Employee Deferred Compensation Plan (the “KEDCP”),KEDCP, a nonqualified deferred compensation plan, under which participants may defer all or a portion of their annual base salary, performance-based compensation awarded under our AIPSTIP and LTIP, RSUs and RSUsPSUs granted under the 2010 Stock Incentive Plan. Participants may elect to have their deferred base salary, and AIPSTIP (cash or common stock) or LTIP awards valued based on Hecla(cash or common stock andstock) awards credited to aan investment (cash award) or stock account.account (for stock awards only). Deferred RSUs areand PSUs may also be credited to a stock account. The KEDCP provides for discretionary matching contributions on base salary, AIP and LTIP amounts deferred to a stock account and discretionary company contributions that are credited to a participant’s stock account. The deferral features promote alignment of the interests of participants with those of our shareholders. Investment accounts are credited monthly with an amount based on the prime rate for corporate borrowers. Participants receive distributions from their accounts only upon separation from service with us, a fixed date or schedule selected by the participant, death, disability, an unforeseeable emergency, or a change in control, as these events are defined under Section 409A of the Internal Revenue Code. The amounts deferred are unfunded and unsecured obligations of Hecla, receive
no preferential standing, and are subject to the same risks as any of our other general obligations. Additional details about the KEDCP are described in the narrative accompanying theNonqualified Deferred Compensation for 20152022 table on page 67.69.
Benefits.Benefits. We provide our employees with a benefits package that is designed to attract and retain the talent needed to manage Hecla. As part of that all U.S.benefits package, most U.S salaried employees, including the U.S. NEOs, are eligible to participate in the Hecla Mining Company Retirement Plan, (the “Retirement Plan”), the Capital Accumulation Plan (aour 401(k) plan, which includes matching contributions by Hecla of up to 6%), health, vision, and dental coverage, and paid time off, including vacations and holidays. All Canadian salaried employees, including
2023 Proxy Statement 55
Compensation Discussion and Analysis
NEOs are eligible to participate in a similar benefits package. NEOs are eligible to receive certain additional benefits, as described below. The committee intends for the type and value of such benefits offered to be competitive with general market practices.
Other Qualified and Nonqualified Benefit Plans.Plans. Under the Final Average Salary Retirement Plan, which is a defined benefit plan, upon normal retirement, each participant isparticipants are eligible to receive a monthly benefit equal to a certain percentage of their final average annual earningsAverage Annual Earnings for each year of credited service. Participants in the Cash Balance Retirement Plan are eligible to take a lump sum distribution of their benefits. Additional details about the Retirement PlanPlans are in the narrative accompanying thePension Benefitstable on page 76.67. Under Hecla’s unfunded Supplemental Excess Retirement Plan,the SERP, the amount of any benefits not payable under the Retirement Plan by reasonbecause of the limitations imposed by the Internal Revenue Code and/or the Employee Retirement Income Security Act (“ERISA”), and the reductioncertain reductions of benefits, if any, due to a deferral of salary made under our KEDCP, willmay be paid out of our general funds, or a rabbi trust, to any employeeemployees who may beare adversely affected. The Retirement Plan and Supplemental Excess Retirement PlanSERP define earnings for purposes of the plans to include base salary plus any other cash incentives up until July 1, 2013, after which only base salary plus one-half of AIPSTIP compensation is included (no LTIP compensation is included).
Personal Benefits.Benefits. We do not provide company-paid cars, country club memberships, or other similar perquisites to our executives. The only material personal benefit provided by Hecla is a relocation benefit, which is offered as needed to meet specific recruitment needs.
Stock Ownership Guidelines for NEOs
We believe that it is important to encourage our executive officers to hold a material amount of our common stock and to link their long-term economic interest directly to that of our shareholders. To achieve this goal, in June 2012, the committee and Board established stock ownership guidelines for the Company’s senior management. The guidelines for the CEO are six times base salary, and for the other executive officers, two times base salary. These guidelines must be achieved by the later of (i) June 2017 or (ii) five years after the executive officer is hired to such position. Unvested RSUs and shares held directly are considered owned for purposes of the guidelines. If an executive officer becomes subject to a greater ownership amount due to a promotion or an increase in base salary, they must meet the higher ownership requirement within three years.
Because of fluctuations in the Company’s stock price, in February 2016, the committee and the Board amended the stock ownership guidelines to provide a valuation methodology that consists of valuing the shares held by using the average closing price of the Company’s common stock on the NYSE for the previous calendar year. Because share prices of all companies are subject to market volatility, the Board believes that it would be unfair to require an executive to buy more shares simply because Hecla’s stock price drops. In the event there is a significant decline in Hecla’s stock price that causes an executive’s holdings to fall below the applicable threshold, the executive will not be required to purchase additional shares to meet the threshold, but they generally may not sell or transfer any shares until the threshold has again been achieved.
With the exception of Mr. Lawlar, who was appointed SVP – CFO on March 1, 2021, as of December 31, 2022, all NEOs met the guidelines. In the calculations for our NEOs, we include shares directly held, shares held in their 401(k) account, and unvested RSUs. We do not include unexercised stock options or unvested performance-based shares.
Additional information regarding shares held by our NEOs is included in the Security Ownership of Certain Beneficial Owners and Management table on page 82.
Clawback Policy
At itsIn February 2013, meeting, the Compensation Committeecommittee adopted a clawback policy with respect to incentive awards to executive officers. The policy provides that in the event of a restatement of our financial results as a result of material non-compliance with financial reporting requirements, the Board will review incentive compensation that was paid to our current and former executive officers under the Company’s AIPSTIP and LTIP (or any successor plans) based solely on the achievement of specific corporate financial goals (“Incentive Award”) during the period of the restatement. If any Incentive Award would have been lower had it been calculated based on the Company’s restated financial results, the Board will, as and to the extent it deems appropriate, including with respect to intent
56 www.hecla.com
Compensation Discussion and Analysis
or level of culpability of the relevant individual(s), seek to recover from any executive whose conduct is determined by the Board to be the cause or partial cause of the restatement,officer, any portion of an Incentive Award paid in excess of what would have been paid based on the restated financial results. The policy does not apply in any situation where a restatement is not the result of material non-compliance with financial reporting requirements, such as any restatement due to a change in applicable accounting rules, standards or interpretations, a change in segment designations or the discontinuance of an operation.
In December 2015, the Compensation Committeecommittee amended each of itsour incentive plans (AIP,(STIP, LTIP, KEDCP, and 2010 Stock Incentive Plan) to include a clawback provision consistent with the Clawback Policy.clawback policy described above.
We intend to amend the clawback policy in 2023 to comply with new SEC and NYSE rules.
Insider Trading Policy
Our insider trading policy prohibits all directors, executive officers (as defined under Section 16 of the Exchange Act) and certain other employees designated as insiders from purchasing or selling any Company securities three weeks before through two days after the public release of any of our periodic results (including the filing of any Form 10-Q or Form 10-K), or at any other time during the year while in possession of material non-public information about the Company. In addition, directors and officers are prohibited from short-term trading, short sales, options trading, trading on margin, hedging or pledging any securities of the Company.
We have entered into a change in control agreementagreements (“CIC Agreement”Agreements”) with each of our NEOs. Under the terms of our CIC Agreements, the CEO and the other NEOs are entitled to payments and benefits upon the occurrence of specified events, including termination of employment (with or without cause) following a change in control of the Company. The specific terms of these arrangements, as well as an estimate of the compensation that would have been payable had they been triggered as of fiscal calendar year-end, are described in detail in the section entitledtitled Potential Payments Upon Termination or Change in Control and Terminationon page 68.
The termination of employment provisions of the CIC Agreements were entered into to address competitive concerns when the NEOs were recruited to Hecla by providing these individuals with a fixed amount of compensation that would offset the risk of leaving their prior employer or foregoing other opportunities to join the Company. At the time of entering into these arrangements, the committee considered the aggregate potential obligations of the Company in the context of the desirability of hiring the individual and the expected compensation upon joining Hecla.
In March 2015, the committee approved an amendment to the CIC Agreement with each of our NEOs to eliminate the excise tax gross-up provision and to include a provision for a “Best Net After Tax Payment,” which reduces the amount received by the NEO upon a change in control if the NEO would receive a greater after-tax benefit than he would receive if full several benefits were paid, taking into account all applicable taxes including any excise tax.70.
The committee believes that these CIC Agreements are important for a number of reasons, including providing reasonable compensation opportunities in the unique circumstances of a change in control that are not provided by other elements of our compensation program. Further, change in control benefits, if structured appropriately, serve to minimize the distraction caused by a potential transaction and reduce the risk that key executives will leave Hecla before a transaction closes. The committee also believes that these agreements motivate the executives to make decisions that are in the best interests of our shareholders in the event of a pending change in control. These agreements provide executives with the necessary job stability and financial security during a change in control transaction and the subsequent period of uncertainty to help them stay focused on managing Hecla rather than on their own personal employment situation. The committee believes that all of these objectives (i) serve our shareholders’ interests. The committee also believes that change in control provisionsinterests, (ii) are an essential component of the executive compensation program and, (iii) are necessary to attract and retain senior talent in the highly competitive talent market in which we compete.
The change in control provisions were developed by the Company and the committee based on market and industry competitive practices. The Company and the committee periodically review the benefits provided under the CIC Agreements to ensure that they serve our interests in retaining our key executives, are consistent with market and industry practice, and are reasonable.
Tax and Accounting Considerations
Our compensation programs are affected by each of the following:
Accounting for Stock-Based Compensation. We take into accountconsider certain requirements of GAAP in determining changes to policies and practices for our stock-based compensation programs.
Section 162(m) of the Internal Revenue Code. Section 162(m) of the Internal Revenue Code of 1986, as amended (“Code Section 162(m)”), generally provides generally that compensation in excess of $1 million paid to the CEO or to anyand certain other NEO (other than the chief financial officer)employees, including NEOs (“covered employees”), of a public company will not be deductible for U.S. federal income tax purposes unless such compensation is paid pursuant to one of the enumerated exceptions set forth in Code Section 162(m).purposes.
2023 Proxy Statement 57
Compensation Discussion and Analysis
Our primary objective in designing and administering our compensation policies is to support and encourage the achievement of our strategic goals and to enhance long-term shareholder value. We also believe that it is important to preserve flexibility in administering compensation programs. For these and other reasons, the committee has determined that it will not necessarily seek to limit executive compensation to the amount that would be fully deductible under Code Section 162(m). Further, although we received shareholder approval for our 2010 Stock Incentive Plan at our 2010 Annual Meeting, there is no assurance that such approval satisfied or continues to satisfy the shareholder approval requirements under Code Section 162(m) necessary for amounts awarded under that plan to be fully deductible by Hecla. As a result of the foregoing, amounts awarded or paid under any of our compensation programs,
including salaries, annual incentive awards, performance awards, stock options and RSUs, may not qualify as performance-based compensation that is excluded from the limitation on deductibility.
The committee will continue to monitor developments and assess alternatives for preservingmanaging the deductibility of compensation payments and benefits to the extent reasonably practicable, as determined by the committee to be consistent with our compensation policies and in the best interests of the Company and our shareholders.
In 2015, Mr. Baker, our President and CEO, and Mr. Radford, our Senior Vice President – Operations, earned amounts subject to Section 162(m) in excess of $1 million, therefore a portion of each of those officer’s total compensation is not deductible by Hecla.
Section 409A of the Internal Revenue Code.Code. Section 409A imposes additional significant taxes in the event that an executive officer or director receives “deferred compensation” that does not satisfy the requirements of Section 409A. We believe that we have designed and operated ourOur plans appropriatelyare intended to be exempt from, or comply with, Section 409A.
Base Salaries for 201658 www.hecla.com
In December 2015, due to budget reductions for 2016, our CEO’s base salary was reduced by 20%, and all other NEO’s base salary was reduced by 10%, effective through all of calendar year 2016.
NEO | 1/1/16 to 12/31/16 Salary ($) | Percentage Decrease (%) | |||
Phillips S. Baker, Jr. | 484,000 | 20 | |||
James A. Sabala | 342,000 | 10 | |||
Lawrence P. Radford | 342,000 | 10 | |||
Dr. Dean W.A. McDonald | 247,500 | 10 | |||
David C. Sienko | 225,000 | 10 | |||
Don Poirier* | 0 | — |
* Mr. Poirier departed the Company at the end of 2015.
In February 2016, the committee approved the 2016 AIP goals. The AIP factors were divided into the following components, which may be modified by the committee from time to time, including with respect to the relative weights:
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While each component can achieve two and a half times the target (250%), the maximum total payout is limited to two times the target award level (200%).
For the 2016 AIP, the quantitative corporate performance factors are divided into four factors (including weighting): adjusted EBITDA (15%), production (15%), cash (15%) and work-related injury rate reduction (5%).
Table of ContentsCOMPENSATION RISK ANALYSIS
The adjusted EBITDA target is $150 million. Maximum payout is achievedcommittee has engaged in a thorough risk analysis of our compensation plans, programs, policies, and practices for all employees. This includes advice from the Company’s SVP – CAO describing the executive compensation program, and describing risk mitigation characteristics, if adjusted EBITDA is $225 million, which is $75 million more than target. There is no payout if adjusted EBITDA is less than $100 million. Further, this component of the AIP does not assume fixed metals prices. For AIP purposes, “adjusted EBITDA” is defined as our earnings before interest, taxes, depreciation, and amortization, with additional adjustments for items which we believe are not indicativeany, of the Company’s ongoing operations.short- and long-term incentive programs. For the following reasons, the committee believes that the design of our compensation programs, the governance of our programs, and our risk oversight process guard against imprudent risk taking that could have a material adverse effect on the Company.
Adjusted EBITDA Goal MetricsCompensation Program Design Protections
Our base pay programs consist of competitive salaries that provide a fixed level of income on a regular basis. This mitigates incentives on the part of our executives and employees to take unnecessary or imprudent risks.
The production factor converts gold, leadBoard reviews the Company’s strategic plan and zinclong-term financial and operational plans, and approves the capital budget, that serve as the basis for setting short- and long-term incentive goals. Goals are intended to silver equivalent atdrive shareholder value and are set relative to the approved budget, historical and future expected performance, and a ratioreasonable amount of 78 oz. silver to 1 oz. gold, 19.0 lb. lead to 1 oz. silver, and 20.7 lb. zinc to 1 oz. silver. stretch so they do not encourage imprudent risk taking.
Our production target requires that we achieve 42.6 million silver equivalent ounces. Maximum payout is attained if production achieves 44 million ounces. The threshold payout requires production of 39 million ounces, below which no payout is earned. Achievement of target requires a 9% increase over 2015 silver equivalent production, whileshort-term incentive program provides variable pay opportunities for certain position levels based on achievement of the maximum payout requiresmultiple short-term performance goals. Goals are set at reasonable levels and payouts are managed as a 15% increase.percentage of pay.
Production Goal Metrics
The cash targetmaximum awards that may be paid to executive officers under the short- and long-term incentive programs are capped, and the committee retains the discretion to reduce payouts under the plans.
The largest amount of executive incentive compensation opportunity is $100 million in cash on hand at December 31, 2016. Maximum payout is achieved if our cash position at year-end is at or above $155 million, which isgenerally tied to long-term incentive compensation that emphasizes sustained Company performance over time. This reduces the cash positionincentive for executives and other employees to take risks that might increase short-term compensation at the beginningexpense of 2016. The threshold payout level is $75 million, below which no payout is earned.longer-term Company results.
Equity awards have multi-year vesting, and RSU awards for executives are counted towards their stock ownership guidelines. This aligns the long-term interests of our NEOs and other executives with those of our shareholders and discourages taking short-term risks at the expense of longer-term performance.
Cash Goal Metrics2023 Proxy Statement 59
The work-related injury rate reduction target is a reduction in injury rates of 15% at year-end 2016 from 2015 results. Maximum payout is achieved if there is a 35% reduction in injury rates at year-end. The threshold payout level is 5%, below which no payout is earned.
Work-Related Injury Rate Reduction Metrics
2016 AIFR Metrics | % Performance Value | ||||||
35% | Maximum | 10 | % | ||||
25% | 7.5 | % | |||||
15% | Target | 5 | % | ||||
5% | Minimum | 2.5 | % | ||||
<5% | 0 | % |
The qualitative/other goals are recommended by management, approved by the committee, and cover the areas of safety and health, operations, financial and cost controls, development projects, exploration, growth, legal, investor relations, industry visibility, human capital development and government and community affairs.
In February 2014, the committee approved the 2014-2016 LTIP, which has a target unit value of $125. The 2014-2016 LTIP has three major changes from the 2013-2015 LTIP:
| |
| |
|
Except as noted, the 2014-2016 LTIP includes the same components as the 2013-2015 LTIP, and increases the maximum potential payout from $300 to $375 per unit.
2014-2016 Performance Unit Valuation
Silver Equivalent Reserve Growth | ||||||
Ounce Target (millions) | Additional Reserve (millions) (replacement in situ) | Unit Value | ||||
400 | 103 (191) | $ | 100.00 | |||
337 | 40 (128) | $ | 50.00 | |||
327 | 30 (118) | $ | 25.00 | |||
307 | 10 (98) | $ | 5.00 |
Silver Equivalent Production Growth | ||||||
Target (in mm ozs.) | Average Annual Target (in mm ozs.) | Unit Value | ||||
75.0 | 25.0 | $ | 50.00 | |||
72.0 | 24.0 | $ | 40.00 | |||
70.5 | 23.5 | $ | 25.00 | |||
68.0 | 22.6 | $ | 10.00 |
Cash Flow | |||||
% of Target | Unit Value | ||||
115% | $ | 75.00 | |||
110% | $ | 50.00 | |||
105% | $ | 35.00 | |||
100% | $ | 25.00 | |||
95% | $ | 22.50 | |||
90% | $ | 20.00 | |||
85% | $ | 17.50 | |||
80% | $ | 15.00 | |||
#4 Shaft Completion | |||||
100% Completion Date | Unit Value | ||||
12/31/15 | $ | 50.00 | |||
5/1/16 | $ | 25.00 | |||
After 8/1/16 | $ | 0.00 |
Total Shareholder Return | |||||
%ile rank within Peer Group Companies | Unit Value | ||||
100% | $ | 100.00 | |||
90% | $ | 75.00 | |||
80% | $ | 50.00 | |||
70% | $ | 35.00 | |||
60% | $ | 25.00 | |||
50% | $ | 15.00 | |||
<50% | $ | 0.00 |
In March 2015, the committee approved the 2015-2017 LTIP, which has a target unit value of $100. The 2015-2017 LTIP has the same factors as the 2014-2016 LTIP, with the exception of the #4 Shaft completion metric, which was removed as the project nears completion. The only other factor that is different from the 2014-2016 LTIP is as follows:
|
Except as noted, the 2015-2017 LTIP includes the same components as the 2014-2016 LTIP, with a maximum potential payout of $375 per unit.
2015-2017 Performance Unit Valuation
Silver Equivalent (includes Gold) Reserve Growth | |||||||
Ounce Target (millions) | Additional Reserve (millions) (replacement in situ) | Unit Value | |||||
420 | 100 (175) | $ | 100.00 | ||||
360 | 40 (115) | $ | 50.00 | ||||
350 | 30 (105) | $ | 25.00 | ||||
320 | 0 (75) | $ | 5.00 |
Silver Equivalent (includes Gold) Production Growth | ||||||
Target (in mm ozs.) | Average Annual Target (in mm ozs.) | Unit Value | ||||
82.5 | 27.5 | $ | 75.00 | |||
78.5 | 26.2 | $ | 50.00 | |||
77.0 | 25.7 | $ | 25.00 | |||
74.5 | 24.8 | $ | 10.00 |
Cash Flow | |||||
% of Target | Unit Value | ||||
115% | $ | 100.00 | |||
110% | $ | 50.00 | |||
105% | $ | 35.00 | |||
100% | $ | 25.00 | |||
95% | $ | 22.50 | |||
90% | $ | 20.00 | |||
85% | $ | 17.50 | |||
80% | $ | 15.00 |
Total Shareholder Return | |||||
%ile rank within Peer Group Companies | Unit Value | ||||
100% | $ | 100.00 | |||
90% | $ | 75.00 | |||
80% | $ | 50.00 | |||
70% | $ | 35.00 | |||
60% | $ | 25.00 | |||
50% | $ | 15.00 | |||
<50% | $ | 0.00 |
In February 2016, the committee approved the 2016-2018 LTIP, which has a target unit value of $100. The 2016-2018 LTIP has the same factors as the 2015-2017 LTIP, with a maximum potential payout of $375 per unit.
2016-2018 Performance Unit Valuation
Silver Equivalent (includes Gold) Reserve Growth | |||||||
Ounce Target (millions) | Additional Reserve (millions) (replacement in situ) | Unit Value | |||||
423 | 100 (184) | $ | 100.00 | ||||
363 | 40 (124) | $ | 50.00 | ||||
353 | 30 (114) | $ | 25.00 | ||||
323 | 0 (84) | $ | 5.00 | ||||
Cash Flow | |||||||
% of Target | Unit Value | ||||||
115% | $ | 100.00 | |||||
110% | $ | 50.00 | |||||
105% | $ | 35.00 | |||||
100% | $ | 25.00 | |||||
90% | $ | 15.00 |
Silver Equivalent (includes Gold) Production Growth | |||||||
Target (in mm ozs.) | Average Annual Target (in mm ozs.) | Unit Value | |||||
93.0 | 31.0 | $ | 75.00 | ||||
89.5 | 29.5 | $ | 50.00 | ||||
87.0 | 29.0 | $ | 25.00 | ||||
84.0 | 28.0 | $ | 10.00 |
Total Shareholder Return | |||||
%ile rank within Peer Group Companies | Unit Value | ||||
100% | $ | 100.00 | |||
90% | $ | 75.00 | |||
80% | $ | 50.00 | |||
70% | $ | 35.00 | |||
60% | $ | 25.00 | |||
50% | $ | 15.00 | |||
<50% | $ | 0.00 |
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committeecommittee are set forth in theCompensation Committee Report.Report. There are no members of the Compensation Committeecommittee who were officers or employees of Hecla or any of our subsidiaries during the fiscalcalendar year, formerly were officers of Hecla or any of our subsidiaries or had any relationship otherwise requiring disclosure under the proxy rules promulgated by the SEC or the NYSE.
The Compensation Committeecommittee has reviewed and discussed theCompensation Discussion and Analysis CD&A with Hecla’s managementCEO and its independent compensation consultant. BasedSVP – CAO, and based on its review and discussions, the committee recommended to the Board, and the Board has approved, theCompensation Discussion and Analysis CD&A included in this Proxy Statement and incorporated by reference in Hecla’s Annual Report on Form 10-K for the year ended December 31, 2015.2022.
Respectfully submitted by
The Compensation Committee of the
Board of Directors
Charles B. Stanley, Chair
Catherine J. Boggs
George R. Johnson
60 www.hecla.com
COMPENSATION OF NAMED EXECUTIVE OFFICERS
Summary Compensation Table for 20152022
The following compensation tables provide information regarding the compensation of our CEO, SVP – CFO, and fourthree other NEOs who were the most highly compensated inofficers for the calendar year ended December 31, 2015.2022, determined in accordance with SEC rules.
Name and Principal Position | Year | Salary1 ($) | Bonus2 ($) | Stock Awards3 ($) | Option Awards3 ($) | Non-Equity Incentive Plan Compensation4 ($) | Change in Pension Value and Non-Qualified Deferred Compensation Earnings5 ($) | All Other Compensation ($) | Total ($) | |||||||||||||
Phillips S. Baker, Jr. | 2015 | 605,000 | — | 1,727,174 | 6 | — | 1,768,250 | 599,477 | 15,900 | 7 | 4,715,801 | |||||||||||
President and CEO | 2014 | 605,000 | — | 1,438,288 | — | 2,303,538 | 164,099 | 15,600 | 4,526,525 | |||||||||||||
2013 | 575,208 | — | 1,073,874 | — | 1,497,375 | 692,922 | 15,300 | 3,854,679 | ||||||||||||||
James A. Sabala | 2015 | 380,000 | — | 583,700 | — | 822,000 | 174,075 | 15,900 | 7 | 1,975,675 | ||||||||||||
Senior Vice President | 2014 | 366,458 | — | 887,623 | — | 954,800 | 279,690 | 15,600 | 2,504,171 | |||||||||||||
and CFO | 2013 | 341,458 | — | 344,999 | — | 825,750 | 268,474 | 15,300 | 1,795,981 | |||||||||||||
Lawrence P. Radford | 2015 | 380,000 | — | 556,694 | — | 890,000 | 105,114 | 15,900 | 7 | 1,947,708 | ||||||||||||
Senior Vice President – | 2014 | 366,458 | — | 709,326 | — | 886,775 | 98,277 | 15,600 | 2,076,436 | |||||||||||||
Operations | 2013 | 341,458 | — | 300,000 | — | 589,950 | 91,197 | 15,300 | 1,337,905 | |||||||||||||
Dr. Dean W. A. McDonald9 | 2015 | 275,000 | — | 480,468 | — | 580,000 | 110,743 | 15,900 | 8 | 1,462,111 | ||||||||||||
Senior Vice President - | 2014 | 275,000 | — | 562,276 | — | 721,875 | 214,384 | 15,600 | 1,789,135 | |||||||||||||
Exploration | 2013 | 279,443 | — | 300,000 | — | 455,400 | 183,417 | 16,210 | 1,234,470 | |||||||||||||
David C. Sienko | 2015 | 250,000 | — | 289,933 | — | 397,000 | 36,365 | 15,900 | 7 | 989,198 | ||||||||||||
Vice President and | 2014 | 250,000 | — | 376,900 | — | 543,725 | 78,318 | 15,600 | 1,264,543 | |||||||||||||
General Counsel | 2013 | 241,875 | — | 154,001 | — | 387,900 | 60,693 | 15,300 | 859,769 | |||||||||||||
Don Poirier9 | 2015 | 226,000 | — | 314,950 | — | 401,500 | 82,950 | 15,900 | 8 | 1,041,300 | ||||||||||||
Vice President – | 2014 | 226,000 | — | 412,820 | — | 459,800 | 165,348 | 15,600 | 1,279,568 | |||||||||||||
Corporate Development | 2013 | 233,080 | — | 199,999 | — | 370,620 | 130,940 | 16,210 | 950,849 |
Name and Principal Position | Year | Salary(1) ($) | Stock Awards(2) ($) | Non-Equity Incentive Plan Compensation(3) ($) | Change in Pension Value and Non-Qualified Deferred Compensation Earnings(4) ($) | All Other Compensation ($) | Total ($) | |||||||||||||||||||||
.Phillips S. Baker, Jr. President and CEO | 2022 | 722,917 | 1,205,255 | (5) | 2,630,625 | — | 21,069 | (8) | 4,579,866 | |||||||||||||||||||
2021 | 664,792 | 1,370,005 | 885,500 | 824,973 | 19,830 | 3,765,100 | ||||||||||||||||||||||
2020 | 635,000 | 937,292 | 1,970,300 | 1,628,345 | 19,571 | 5,190,508 | ||||||||||||||||||||||
Lauren M. Roberts(6) Sr. Vice President and COO | 2022 | 398,336 | 470,849 | (5) | 1,041,000 | 133,033 | 21,069 | (8) | 2,064,287 | |||||||||||||||||||
2021 | 380,000 | 486,004 | 418,000 | 314,706 | 19,830 | 1,618,540 | ||||||||||||||||||||||
2020 | 380,000 | 511,878 | 829,563 | 275,046 | 9,151 | 2,005,638 | ||||||||||||||||||||||
Russell D. Lawlar Sr. Vice President and CFO | ||||||||||||||||||||||||||||
2022 | 294,792 | 306,052 | (5) | 674,891 | | — | | 20,818 | (8) | 1,296,553 | ||||||||||||||||||
2021 | 245,209 | 361,398 | 185,500 | 39,682 | 19,270 | 851,059 | ||||||||||||||||||||||
Michael L. Clary(9) Sr. Vice President and CAO | 2022 | 281,042 | 282,509 | (5) | 778,688 | — | 20,711 | (8) | 1,362,950 | |||||||||||||||||||
Robert D. Brown(10) Vice President – Corporate Develop. & Sustainability | 2022 | 282,000 | 268,235 | (5) | 761,250 | — | (7) | 20,415 | (8) | 1,331,900 | ||||||||||||||||||
2021 | 264,000 | 342,705 | 237,600 | 73,393 | 19,440 | 937,138 | ||||||||||||||||||||||
2020 | 264,000 | 363,661 | 404,280 | 111,007 | 19,065 | 1,162,013 |
Salary amounts include |
Represents RSUs awarded, and PSUs granted in each of | |
2020. The amounts |
2023 Proxy Statement 61
TableCompensation of ContentsNamed Executive Officers
This column represents the |
Name | Year | AIP Award ($) | LTIP Plan Period | LTIP Units (#) | Unit Value ($) | LTIP Award ($) | Total AIP and LTIP ($) | Total AIP and LTIP Paid in Cash ($) | Total AIP and LTIP Paid in Shares (#) | ||||||||||||||
Baker | 2015 | 695,750 | 2013-2015 | 8,250 | 130.00 | 1,072,500 | 1,768,250 | 884,125 | 374,629 | * | |||||||||||||
2014 | 919,600 | 2012-2014 | 8,250 | 167.75 | 1,383,938 | 2,303,538 | 1,727,653 | 173,983 | |||||||||||||||
2013 | 544,500 | 2011-2013 | 8,250 | 115.50 | 952,875 | 1,497,375 | 684,750 | 237,610 | |||||||||||||||
Sabala | 2015 | 380,000 | 2013-2015 | 3,400 | 130.00 | 442,000 | 822,000 | 411,000 | 174,153 | * | |||||||||||||
2014 | 418,000 | 2012-2014 | 3,200 | 167.75 | 536,800 | 954,800 | 716,100 | 72,115 | |||||||||||||||
2013 | 479,250 | 2011-2013 | 3,000 | 115.50 | 346,500 | 825,750 | 283,125 | 158,662 | |||||||||||||||
Radford | 2015 | 500,000 | 2013-2015 | 3,000 | 130.00 | 390,000 | 890,000 | 445,000 | 188,559 | * | |||||||||||||
2014 | 467,400 | 2012-2014 | 2,500 | 167.75 | 419,375 | 886,775 | 665,081 | 66,977 | |||||||||||||||
2013 | 399,375 | 2011-2013 | 1,650 | 115.50 | 190,575 | 589,950 | 215,625 | 109,452 | |||||||||||||||
McDonald | 2015 | 242,000 | 2013-2015 | 2,600 | 130.00 | 338,000 | 580,000 | 290,000 | 122,881 | * | |||||||||||||
2014 | 302,500 | 2012-2014 | 2,500 | 167.75 | 419,375 | 721.875 | 541,406 | 54,522 | |||||||||||||||
2013 | 247,500 | 2011-2013 | 1,800 | 115.50 | 207,900 | 455,400 | 193,125 | 76,689 | |||||||||||||||
Sienko | 2015 | 150,000 | 2013-2015 | 1,900 | 130.00 | 247,000 | 397,000 | 198,500 | 84,110 | * | |||||||||||||
2014 | 225,000 | 2012-2014 | 1,900 | 167.75 | 318,725 | 543,725 | 407,794 | 41,067 | |||||||||||||||
2013 | 180,000 | 2011-2013 | 1,800 | 115.50 | 207,900 | 387,900 | 165,000 | 65,175 | |||||||||||||||
Poirier | 2015 | 135,000 | 2013-2015 | 2,050 | 130.00 | 266,500 | 401,500 | 200,750 | 85,064 | * | |||||||||||||
2014 | 124,300 | 2012-2014 | 2,000 | 167.75 | 335,500 | 459,800 | 344,850 | 34,728 | |||||||||||||||
2013 | 162,720 | 2011-2013 | 1,800 | 115.50 | 207,900 | 370,620 | 157,800 | 62,228 | |||||||||||||||
*Shares were valued based on the closing price of Hecla’s common stock on the NYSE on February 19, 2016 ($2.36). |
Name | Year | STIP Award ($) | LTIP Plan Period | LTIP Units (#) | Unit Value ($) | LTIP Award ($) | Total STIP and LTIP ($) | |||||||||||||||||||||
Baker | 2022 | 1,640,625 | 2020-2022 | 8,000 | 123.75 | 990,000 | 2,630,625 | |||||||||||||||||||||
2021 | 885,500 | 2019-2021 | 10,000 | — | — | 885,500 | ||||||||||||||||||||||
2020 | 1,206,500 | 2018-2020 | 11,400 | 67.00 | 763,800 | 1,970,300 | ||||||||||||||||||||||
Roberts | 2022 | 546,000 | 2020-2022 | 4,000 | 123.75 | 495,000 | 1,041,000 | |||||||||||||||||||||
2021 | 418,000 | 2019-2021 | 3,222 | (i) | — | — | 418,000 | |||||||||||||||||||||
2020 | 703,000 | 2018-2020 | 1,889 | (i) | 67.00 | 126,563 | 829,563 | |||||||||||||||||||||
Lawlar | 2022 | 419,100 | 2020-2022 | 2,067 | (ii) | 123.75 | 255,791 | 674,891 | ||||||||||||||||||||
2021 | 185,500 | 2019-2021 | 1,267 | (ii) | — | — | 185,500 | |||||||||||||||||||||
Clary | 2022 | 525,000 | 2020-2022 | 2,050 | 123.75 | 253,688 | 778,688 | |||||||||||||||||||||
Brown | 2022 | 390,000 | 2020-2022 | 3,000 | 123.75 | 371,250 | 761,250 | |||||||||||||||||||||
2021 | 237,600 | 2019-2021 | 3,000 | — | — | 237,600 | ||||||||||||||||||||||
2020 | 203,280 | 2018-2020 | 3,000 | 67.00 | 201,000 | 404,280 |
(i) | Mr. Robert’s 2018-2020 and 2019-2021 LTIP units were prorated because he joined the Company in August 2019. |
(ii) | Mr. Lawlar’s 2019-2021 and 2020-2022 LTIP units were prorated because he was not appointed SVP – CFO until March 2021. |
(4) | The amounts |
Includes: (i) |
Mr. Roberts deferred the amount of $491,400 to the KEDCP in 2022. The amount reported in this table is the total amount of base salary and/or STIP and LTIP cash compensation he received before his deferrals. See Nonqualified Deferred Compensation for 2022 on page 69 for further information. |
(7) | As a non-U.S. citizen, Mr. Brown is not a participant in the Retirement Plan, but he does participate in the SERP. In lieu of participation in the Retirement Plan, Mr. Brown is expected to receive a similar supplemental benefit as if he had participated in this plan. See Retirement Plan on page 67 for a description of non-U.S. employee’s retirement benefits. |
(8) | Includes the |
NEO | Matching 401(k) Contribution ($) | Annual Life Insurance Premium ($) | Total ($) | |||||||||
Baker | 18,300 | 2,769 | 21,069 | |||||||||
Roberts | 18,300 | 2,769 | 21,069 | |||||||||
Lawlar | 18,300 | 2,518 | 20,818 | |||||||||
Clary | 18,300 | 2,411 | 20,711 | |||||||||
Brown | 18,300 | (i) | 2,115 | (ii) | 20,415 |
This amount was paid to Mr. Brown in lieu of |
(ii) | Life insurance premium is paid in |
Mr. |
(10) | Mr. Brown receives his compensation in Canadian funds. The |
62 www.hecla.com
TableCompensation of ContentsNamed Executive Officers
The following table shows all plan-based awards granted to the NEOs during 2015.2022.
Grants of Plan-Based Awards for 20152022
Long-Term Performance Plan Units (#) | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | Estimated Future Payouts Under Equity Incentive Plan Awards | Other Stock Awards: Number of Shares of Stock or Units (#) | Closing Market Price on Date of Grant ($) | Grant Date Fair Value of Stock and Option Awards1 ($) | ||||||||||||||||||||
Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | ||||||||||||||||||
Phillips S. Baker, Jr. | |||||||||||||||||||||||||
Common Shares2 | 3/5/15 | 173,983 | 3.31 | 575,884 | |||||||||||||||||||||
Restricted Stock3 | 7/1/15 | 204,918 | 2.44 | 500,000 | |||||||||||||||||||||
Performance Shares | 7/1/15 | 102,4594 | 204,9184 | 409,8364 | 2.44 | 651,290 | |||||||||||||||||||
LTIP5 | 9,500 | 0 | 1,187,500 | 3,562,500 | |||||||||||||||||||||
AIP6 | 0 | 605,000 | 1,210,000 | ||||||||||||||||||||||
James A. Sabala | |||||||||||||||||||||||||
Common Shares2 | 3/5/15 | 72,115 | 3.31 | 238,701 | |||||||||||||||||||||
Restricted Stock3 | 7/1/15 | 141,393 | 2.44 | 344,999 | |||||||||||||||||||||
LTIP5 | 3,400 | 0 | 425,000 | 1,275,000 | |||||||||||||||||||||
AIP6 | 0 | 304,000 | 608,500 | ||||||||||||||||||||||
Lawrence P. Radford | |||||||||||||||||||||||||
Common Shares2 | 3/5/15 | 66,977 | 3.31 | 221,694 | |||||||||||||||||||||
Restricted Stock3 | 7/1/15 | 137,295 | 2.44 | 335,000 | |||||||||||||||||||||
LTIP5 | 3,400 | 0 | 425,000 | 1,275,000 | |||||||||||||||||||||
AIP6 | 0 | 304,000 | 608,500 | ||||||||||||||||||||||
Dr. Dean W.A. McDonald | |||||||||||||||||||||||||
Common Shares2 | 3/5/15 | 54,522 | 3.31 | 180,468 | |||||||||||||||||||||
Restricted Stock3 | 7/1/15 | 122,950 | 2.44 | 300,000 | |||||||||||||||||||||
LTIP5 | 2,600 | 0 | 325,000 | 975,000 | |||||||||||||||||||||
AIP6 | 0 | 300,000 | 600,000 | ||||||||||||||||||||||
David C. Sienko | |||||||||||||||||||||||||
Common Shares2 | 3/5/15 | 41,067 | 3.31 | 135,932 | |||||||||||||||||||||
Restricted Stock3 | 7/1/15 | 63,115 | 2.44 | 154,001 | |||||||||||||||||||||
LTIP5 | 1,900 | 0 | 237,500 | 712,500 | |||||||||||||||||||||
AIP6 | 0 | 150,000 | 300,000 | ||||||||||||||||||||||
Don Poirier | |||||||||||||||||||||||||
Common Shares2 | 3/5/15 | 34,728 | 3.31 | 114,950 | |||||||||||||||||||||
Restricted Stock3 | 7/1/15 | 81,967 | 2.44 | 200,000 | |||||||||||||||||||||
LTIP5 | 2,050 | 0 | 256,250 | 768,750 | |||||||||||||||||||||
AIP6 | 0 | 135,600 | 271,200 |
Estimated Future 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 (#) | Grant Date Fair Value of Stock and Option Awards(1) ($) | |||||||||||||||||||||||||||||||||
Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | |||||||||||||||||||||||||||||
Phillips S. Baker, Jr. | ||||||||||||||||||||||||||||||||||||
RSUs(2) | 6/21/22 | 146,726 | 649,996 | |||||||||||||||||||||||||||||||||
PSUs(3) | 6/21/22 | 73,363 | 146,726 | 293,452 | 146,726 | 555,259 | ||||||||||||||||||||||||||||||
LTIP(4) | — | 900,000 | 5,250,000 | |||||||||||||||||||||||||||||||||
STIP(5) | — | 937,500 | 1,875,000 | |||||||||||||||||||||||||||||||||
Lauren M. Roberts | ||||||||||||||||||||||||||||||||||||
RSUs(2) | 6/21/22 | 67,720 | 300,000 | |||||||||||||||||||||||||||||||||
PSUs(3) | 6/21/22 | 22,573 | 45,146 | 90,292 | 45,146 | 170,849 | ||||||||||||||||||||||||||||||
LTIP(4) | — | 450,000 | 2,625,000 | |||||||||||||||||||||||||||||||||
STIP(5) | — | 420,000 | 840,000 | |||||||||||||||||||||||||||||||||
Russell D. Lawlar | ||||||||||||||||||||||||||||||||||||
RSUs(2) | 6/21/22 | 44,018 | 195,000 | |||||||||||||||||||||||||||||||||
PSUs(3) | 6/21/22 | 14,673 | 29,345 | 58,690 | 29,345 | 111,052 | ||||||||||||||||||||||||||||||
LTIP(4) | — | 315,000 | 1,837,500 | |||||||||||||||||||||||||||||||||
STIP(5) | — | 330,000 | 660,000 | |||||||||||||||||||||||||||||||||
Michael L. Clary | ||||||||||||||||||||||||||||||||||||
RSUs(2) | 6/21/22 | 40,632 | 180,000 | |||||||||||||||||||||||||||||||||
PSUs(3) | 6/21/22 | 13,544 | 27,088 | 54,176 | 27,088 | 102,509 | ||||||||||||||||||||||||||||||
LTIP(4) | — | 297,000 | 1,732,500 | |||||||||||||||||||||||||||||||||
STIP(5) | — | 300,000 | 600,000 | |||||||||||||||||||||||||||||||||
Robert D. Brown | ||||||||||||||||||||||||||||||||||||
RSUs(2) | 6/21/22 | 38,374 | 169,997 | |||||||||||||||||||||||||||||||||
PSUs(3) | 6/21/22 | 12,980 | 25,959 | 51,918 | 25,959 | 98,238 | ||||||||||||||||||||||||||||||
LTIP(4) | — | 283,500 | 1,653,750 | |||||||||||||||||||||||||||||||||
STIP(5) | — | 210,000 | 420,000 |
The RSU amounts represent the aggregate grant date fair value of the awards granted to each NEO computed in accordance with stock-based accounting rules (FASB ASC Topic 718). Assumptions used in the calculation of these amounts are included in Note 11 – Stockholders’ Equity to our calendar year 2022 consolidated financial statements, which is included in our Annual Report on Form 10-K filed with the SEC on February 17, 2023 (the “Form 10-K”). RSUs generally vest in three substantially equal annual installments beginning on June 21 in the year following the date of grant. Consistent with the requirements of FASB ASC Topic 718, | |
Represents the number of RSUs granted on |
2023 Proxy Statement 63
Compensation of Named Executive Officers
Represents the number of |
• | 100thpercentile rank = maximum award at 200% of target; |
• | 60thpercentile rank = target award at grant value; |
• | 50thpercentile rank = threshold award at 50% of target. |
Hecla’s TSR performance versus that of TSR peer group companies will be based on a comparison of the average share price over the last 60 calendar days prior to January 1, |
Represents the potential value of the payout for each NEO under the |
NEO | 2022-2024 LTIP Units (#) | |||
Baker | 10,000 | |||
Roberts | 5,000 | |||
Lawlar | 3,500 | |||
Clary | 3,300 | |||
Brown | 3,150 |
(5) | Represents the potential value of the payout for each NEO under the |
64 www.hecla.com
Compensation of Named Executive Officers
The following table provides information on the current holdings of stock awards by the NEOs. This table includes unvested RSUs and performance-based shares. There were no unexercised stock options held by any NEO at year-end.unvested PSUs.
Outstanding Equity Awards at Calendar Year-End for 20152022
Option Awards | Stock Awards | |||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Grant Date | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested1 (#) | Market Value of Shares or Units of Stock That Have Not Vested as of 12/31/152 ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested3 ($) | |||||||||||||
Phillips S. Baker, Jr. | — | 362,811 | 685,713 | |||||||||||||||||||
151,515 | 4 | 286,363 | ||||||||||||||||||||
204,918 | 5 | 387,295 | ||||||||||||||||||||
James A. Sabala | — | 121,228 | 229,121 | |||||||||||||||||||
Lawrence P. Radford | — | 265,101 | 501,041 | |||||||||||||||||||
Dr. Dean W. A. McDonald | — | 217,686 | 411,427 | |||||||||||||||||||
David C. Sienko | — | 111,747 | 211,202 | |||||||||||||||||||
Don Poirier | — | 145,124 | 274,284 |
Stock Awards | ||||||||||||||||
Name | Number of Shares or Units of Stock That Have Not Vested(1) (#) | Market Value of Shares or Units of Stock That Have Not Vested(2) ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: | ||||||||||||
Phillips S. Baker, Jr. | 233,032 | 1,295,658 |
|
|
|
|
|
| ||||||||
63,452 | (4) | 352,793 | ||||||||||||||
146,726 | (5) | 815,797 | ||||||||||||||
Lauren M. Roberts | 111,507 | 619,979 |
|
|
|
|
|
| ||||||||
19,036 | (4) | 105,840 | ||||||||||||||
45,146 | (5) | 251,012 | ||||||||||||||
Russell D. Lawlar | 65,000 | 361,400 | ||||||||||||||
13,959 | (4) | 77,612 | ||||||||||||||
29,345 | (5) | 163,158 | ||||||||||||||
Michael L. Clary | 77,016 | 428,209 | ||||||||||||||
13,959 | (4) | 77,612 | ||||||||||||||
27,088 | (5) | 150,609 | ||||||||||||||
Robert D. Brown | 69,511 | 386,481 | ||||||||||||||
13,325 | (4) | 74,087 | ||||||||||||||
25,959 | (5) | 144,332 |
The following table shows the dates on which the |
Number of Unvested Restricted Stock Units | |||||||||||||||
Vesting Date | Baker | Sabala* | Radford | McDonald | Sienko | Poirier | |||||||||
6/21/16 | 56,883 | 39,249 | 34,130 | 34,130 | 17,520 | 22,753 | |||||||||
6/21/16 | 68,306 | 47,131 | 45,765 | 40,983 | 21,038 | 27,322 | |||||||||
6/25/16 | 50,505 | 34,848 | 33,838 | 30,303 | 15,556 | 20,202 | |||||||||
8/5/16 | — | — | 26,000 | — | — | — | |||||||||
6/21/17 | 68,306 | — | 45,765 | 40,983 | 21,038 | 27,322 | |||||||||
6/25/17 | 50,505 | — | 33,838 | 30,303 | 15,556 | 20,202 | |||||||||
6/21/18 | 68,306 | — | 45,765 | 40,984 | 21,039 | 27,323 | |||||||||
Total | 362,811 | 121,228 | 265,101 | 217,686 | 111,747 | 145,124 |
Number of Unvested Restricted Stock Units | ||||||||||||||||||||
Vesting Date | Baker | Roberts | Lawlar | Clary | Brown | |||||||||||||||
June 21, 2023 | 114,063 | 56,843 | 28,463 | 42,737 | 37,160 | |||||||||||||||
June 21, 2024 | 70,060 | 32,090 | 21,864 | 20,735 | 19,559 | |||||||||||||||
June 21, 2025 | 48,909 | 22,574 | 14,673 | 13,544 | 12,792 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total | 233,032 | 111,507 | 65,000 | 77,016 | 69,511 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
(2) |
The market value of the RSUs is based on the closing market price of our common stock on the NYSE as of December |
The market value of the |
Award of | |
The following table shows information concerning the exercise of stock options and the number of stock awards that vested during calendar year 2015 for each of the NEOs, and the value realized on the exercise of options and vesting of stock awards during calendar year 2015.
Option Exercises and Stock Vested for 2015
Option Awards1 | Stock Awards | ||||||||||
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | |||||||
Phillips S. Baker, Jr. | — | — | 173,983 | 2,7 | — | ||||||
137,069 | 3 | 636,000 | |||||||||
56,883 | 4,7 | — | |||||||||
35,920 | 5 | 101,294 | |||||||||
50,505 | 6,7 | — | |||||||||
James A. Sabala | — | — | 72,115 | 2 | 238,701 | ||||||
39,249 | 4 | 112,645 | |||||||||
23,491 | 5 | 66,245 | |||||||||
34,849 | 6 | 98,274 | |||||||||
Lawrence P. Radford | — | — | 66,977 | 2 | 221,694 | ||||||
34,130 | 4 | 97,953 | |||||||||
15,948 | 5 | 44,973 | |||||||||
33,839 | 6 | 95,426 | |||||||||
Dr. Dean W.A. McDonald | — | — | 54,522 | 2 | 180,468 | ||||||
34,130 | 4 | 97,953 | |||||||||
21,121 | 5 | 59,561 | |||||||||
30,303 | 6 | 85,454 | |||||||||
David C. Sienko | — | — | 41,067 | 2 | 135,932 | ||||||
17,520 | 4 | 50,282 | |||||||||
11,063 | 5 | 31,198 | |||||||||
15,555 | 6 | 43,865 | |||||||||
Don Poirier | — | — | 34,728 | 2 | 114,950 | ||||||
22,753 | 4 | 65,301 | |||||||||
13,865 | 5 | 39,099 | |||||||||
20,202 | 6 | 56,970 |
(5) | Award of PSUs, the value of which will be determined |
2023 Proxy Statement 65
Compensation of Named Executive Officers
The following table shows the number of stock awards that vested during calendar year 2022 for each of the NEOs, and the value realized on the vesting of stock awards during calendar year 2022.
Stock Vested in 2022
Stock Awards | ||||||||
Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | ||||||
Phillips S. Baker, Jr. | 72,463 | (1) | 321,011 | |||||
44,004 | (2) | 194,938 | ||||||
21,151 | (3) | 93,699 | ||||||
264,026 | (4) | 1,314,849 | ||||||
Lauren M. Roberts | 37,313 | (1) | 165,297 | |||||
24,752 | (2) | 109,651 | ||||||
9,518 | (3) | 42,165 | ||||||
99,010 | (4) | 493,070 | ||||||
Russell D. Lawlar | 9,058 | (1) | 40,127 | |||||
6,601 | (2) | 29,242 | ||||||
7,192 | (3) | 31,861 | ||||||
Michael L. Clary | 14,492 | (1) | 64,200 | |||||
22,002 | (2) | 97,469 | ||||||
7,192 | (3) | 31,861 | ||||||
Robert D. Brown | 27,174 | (1) | 120,381 | |||||
17,602 | (2) | 77,977 | ||||||
6,769 | (3) | 29,987 | ||||||
69,306 | (4) | 345,144 |
Messrs. Baker, Lawlar, Clary and Brown were granted these RSUs on June |
The NEOs were granted these RSUs on June |
The NEOs were granted these RSUs on June |
For Messrs. Baker, |
66 www.hecla.com
OTHER BENEFITS
Pension Benefits
The following table shows pension information under the Retirement Plan and the SERP for the NEOs as of December 31, 2022. The terms and conditions for participation in, and payments from, these plans are described below. The actuarial present value of the accumulated benefit is determined using the same assumptions used for financial reporting purposes except that retirement age is assumed to be the normal retirement age of 65, or the current age if eligible for early retirement. These assumptions in Note 6 to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.
Name | Plan Name | Number of Years Credited Service (#) | Present Value of Accumulated Benefit ($) | Payments During Last Calendar Year ($) | ||||||||||
Phillips S. Baker, Jr. | Retirement Plan | 21 | 1,084,117 | — | ||||||||||
SERP | 8,360,461 | — | ||||||||||||
Lauren M. Roberts | Retirement Plan | 11 | 251,662 | — | ||||||||||
SERP | 554,955 | — | ||||||||||||
Russell D. Lawlar | Retirement Plan | 12 | 123,229 | — | ||||||||||
SERP | 6,067 | — | ||||||||||||
Michael L. Clary | Retirement Plan | 28 | 682,827 | — | ||||||||||
SERP | 162,526 | — | ||||||||||||
Robert D. Brown | Retirement Plan |
|
|
| N/A | N/A | ||||||||
SERP | 5 | 274,584 | (1) | — |
(1) | As a non-U.S. citizen, Mr. Brown is not a participant in the |
Retirement Plan
Our NEOs, except for those who are not U.S. citizens, participate in the Retirement Plan, which is a defined benefit plan. Canadian NEOs participate in Canada’s public retirement income system, which includes the following components: (i) the Canada (or Quebec) Pension Plan, which is a contributory, earnings-related social insurance program, and (ii) the Old Age Security program. In addition, the Registered Retirement Savings Plan is a tax-deferred individual savings plan available to Canadian employees. Mexican employees participate in Mexico’s public retirement income system, which is based on contributions the employee, employer and the government submit to the retirement savings system. The system is administered through savings accounts managed by private fund managers selected by the participant.
Contributions to the Retirement Plan, and the related expense or income, are based on general actuarial calculations and, accordingly, no portion of our contributions, and related expenses or income, is specifically attributable to our officers. The Company also offers the SERP under which the amount of any benefits not payable under the Retirement Plan by reason of the limitations imposed by the Internal Revenue Code and/or the Employee Retirement Income Security Act, as amended (the “Acts”), and the loss, if any, due to a deferral of salary made under our KEDCP will be paid out of our general funds to any employee covered by the SERP who may be adversely affected. Under the Acts, the current maximum annual pension benefit payable by the Retirement Plan to any employee is $245,000 (for 2022), subject to specified adjustments, and is calculated using earnings not more than $305,000. Upon reaching the normal retirement age of 65, each participant is eligible to receive annual retirement benefits in monthly installments for life equal to, for each year of credited service, 1% of final average annual earnings (defined as the highest average earnings of such employee for any 36 consecutive calendar months for participants hired on or before June 30, 2013, and as the highest average earnings of such employee for any 60 consecutive calendar months, for participants hired after June 30, 2013, during the final 120 calendar months of service) up to the applicable covered compensation level (which level is based on the Social Security maximum taxable wage base) and 1.75% of the difference, if any, between final average annual earnings and the
2023 Proxy Statement 67
applicable covered compensation level. The Retirement Plan and SERP define earnings for purposes of Contentsthe plans to be “a wage or salary for services of employees inclusive of any bonus or special pay including gain-sharing programs, contract miners’ bonus pay and the equivalent,” except that on or after July 1, 2013, earnings are defined as “base salary or wages for personal services and elective deferrals plus (i) elective deferrals not includable in the gross income of the employee under Code Sections 125, 132(f)(4), 402(e)(3), 402(h), 403(b) and 457, (ii) one-half (1/2) of any performance-based or STIP bonus, (iii) one-half (1/2) of any safety incentive award, (iv) paid time off, other than pay while on disability leave, (v) any post-employment payment for services performed during the course of employment that would have been paid to the employee prior to the severance from employment if the employee had continued in employment with Hecla, and (vi) compensation for overtime at the employee’s regular rate of pay.”
The following table shows estimated aggregate annual benefits under the Retirement Plan and the SERP payable upon retirement to a participant who retires in 2022 at age 65 having the years of service and final average annual earnings as specified. The table assumes Social Security covered compensation levels in effect on January 1, 2022.
Estimated Annual Retirement Benefits
Final Average Annual Earnings | Years of Credited Service | |||||||||||||||||||||||||||
5 | 10 | 15 | 20 | 25 | 30 | 35 | ||||||||||||||||||||||
$ 100,000 | $ | 5,089 |
| $ | 10,179 |
| $ | 15,268 |
| $ | 20,357 |
| $ | 25,446 |
| $ | 30,536 |
| $ | 35,625 |
| |||||||
150,000 |
| 9,464 |
|
| 18,929 |
|
| 28,393 |
|
| 37,857 |
|
| 47,321 |
|
| 56,786 |
|
| 66,250 |
| |||||||
200,000 |
| 13,839 |
|
| 27,679 |
|
| 41,518 |
|
| 55,357 |
|
| 69,196 |
|
| 83,036 |
|
| 96,875 |
| |||||||
250,000 |
| 18,214 |
|
| 36,429 |
|
| 54,643 |
|
| 72,857 |
|
| 91,071 |
|
| 109,286 |
|
| 127,500 |
| |||||||
300,000 |
| 22,589 |
|
| 45,179 |
|
| 67,768 |
|
| 90,357 |
|
| 112,946 |
|
| 135,536 |
|
| 158,125 |
| |||||||
350,000 |
| 26,964 |
|
| 53,929 |
|
| 80,893 |
|
| 107,857 |
|
| 134,821 |
|
| 161,786 |
|
| 188,750 |
| |||||||
400,000 |
| 31,339 |
|
| 62,679 |
|
| 94,018 |
|
| 125,357 |
|
| 156,696 |
|
| 188,036 |
|
| 219,375 |
| |||||||
450,000 |
| 35,714 |
|
| 71,429 |
|
| 107,143 |
|
| 142,857 |
|
| 178,571 |
|
| 214,286 |
|
| 250,000 |
| |||||||
500,000 |
| 40,089 |
|
| 80,179 |
|
| 120,268 |
|
| 160,357 |
|
| 200,446 |
|
| 240,536 |
|
| 280,625 |
| |||||||
550,000 |
| 44,464 |
|
| 88,929 |
|
| 133,393 |
|
| 177,857 |
|
| 222,321 |
|
| 266,786 |
|
| 311,250 |
| |||||||
600,000 |
| 48,839 |
|
| 97,679 |
|
| 146,518 |
|
| 195,357 |
|
| 244,196 |
|
| 293,036 |
|
| 341,875 |
| |||||||
650,000 |
| 53,214 |
|
| 106,429 |
|
| 159,643 |
|
| 212,857 |
|
| 266,071 |
|
| 319,286 |
|
| 372,500 |
| |||||||
700,000 |
| 57,589 |
|
| 115,179 |
|
| 172,768 |
|
| 230,357 |
|
| 287,946 |
|
| 345,536 |
|
| 403,125 |
| |||||||
750,000 |
| 61,964 |
|
| 123,929 |
|
| 185,893 |
|
| 247,857 |
|
| 309,821 |
|
| 371,786 |
|
| 433,750 |
| |||||||
800,000 |
| 66,339 |
|
| 132,679 |
|
| 199,018 |
|
| 265,357 |
|
| 331,696 |
|
| 398,036 |
|
| 464,375 |
| |||||||
850,000 |
| 70,714 |
|
| 141,429 |
|
| 212,143 |
|
| 282,857 |
|
| 353,571 |
|
| 424,286 |
|
| 495,000 |
| |||||||
900,000 |
| 75,089 |
|
| 150,179 |
|
| 225,268 |
|
| 300,357 |
|
| 375,446 |
|
| 450,536 |
|
| 525,625 |
| |||||||
950,000 |
| 79,464 |
|
| 158,929 |
|
| 238,393 |
|
| 317,857 |
|
| 397,321 |
|
| 476,786 |
|
| 556,250 |
| |||||||
1,000,000 |
| 83,839 |
|
| 167,679 |
|
| 251,518 |
|
| 335,357 |
|
| 419,196 |
|
| 503,036 |
|
| 586,875 |
|
Benefits listed in the pension table are not subject to any deduction for Social Security or other offset amounts. As of December 31, 2022, the following NEOs have completed the indicated number of full years of credited service: Mr. Baker, 21 years; Mr. Roberts, 11 years; Mr. Lawlar, 12 years; Mr. Clary, 28 years; and Mr. Brown, 5 years.
68 www.hecla.com
Other Benefits
The table below provides information on the nonqualified deferred compensation of the NEOs in 2015.2022.
Nonqualified Deferred Compensation for 201512022
Name | Executive Stock Contributions in Last FYE2 (#) | Registrant Contributions in Last FYE ($) | Aggregate Earnings in Last FYE ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance of Stock at Last FYE (#) | |||||||
Phillips S. Baker, Jr. | 299,488 | — | — | — | 299,488 | |||||||
James A. Sabala | — | — | — | — | — | |||||||
Lawrence P. Radford | — | — | — | — | — | |||||||
Dr. Dean W. A. McDonald3 | — | — | — | — | — | |||||||
David C. Sienko | — | — | — | — | — | |||||||
Don Poirier3 | — | — | — | — | — |
Name | Executive Contributions in Last FY ($) | Registrant Contributions in Last FY ($) | Aggregate Earnings in Last FY ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance of Stock At Last FYE ($)(1) | |||||||||||||||
Phillips S. Baker, Jr. | — | — | — | — | 9,985,560 | |||||||||||||||
Lauren M. Roberts | 491,400 | (2) |
|
|
| — | — | 1,885,502 | ||||||||||||
Russell D. Lawlar | — | — | — | — | — | |||||||||||||||
Michael L. Clary | — | — | — | — | — | |||||||||||||||
Robert D. Brown(3) | — | — | — | — | — |
Total amount of deferred | |
Mr. Roberts deferred a portion of his 2022 STIP cash award to the KEDCP (90% of $546,000 = $491,400). The deferred executive contribution cash amount is reported in the Summary Compensation Table for 2022 on page 61 as part of Mr. Roberts total 2022 compensation. |
(3) | Canadian employees are not eligible to participate in our deferred compensation plan. |
Pursuant to the Company’s KEDCP, executives and key employees, including the NEOs, may defer all or a portion of their base salary, andcash or equity awards earned under the LTIP and AIP (including common stock),STIP, and any vested RSUs or vested PSUs granted under the 2010 Stock Incentive Plan. Deferral elections are made by the individual generally in the year prior to the beginning of the plan year for amounts to be earned or granted in the following year. Base salary, AIPSTIP and LTIP amounts deferred under the KEDCP are credited to either an investment account or a stock account at the participant’s election. Amounts credited to an investment account are valued in cash, credited with deemed interest, and distributed with deemed interest in cash upon a distributable event. RSUs and other common stock awarded (PSUs) under the 2010 Stock Incentive Plan and deferred by a participant are credited to a stock account. Amounts credited to the stock account of a participant are valued based upon our common stock and are delivered to the participant in shares of our common stock upon a distributable event.
The KEDCP also provides for corporate matching amounts where the participants elect to have their base salary, AIPSTIP or LTIP cash awards credited to a stock account. Matching contributions are also valued based on our common stock and distributed upon a distributable event in stock. The ability to defer compensation into a company stock account promotes alignment of the interests of participants with those of our common shareholders. It also provides for corporate discretionary allocations of amounts valued based upon our common stock and credited to a stock account.
As of the end of the last day of each calendar month, an additional amount is credited to the investment account of the participant equal to the product of (i) the average dailybalancedaily balance of the investment account for the month, multiplied by (ii) the annual prime rate for corporate borrowers quoted at the beginning of the quarter byThe Wall Street Journal(or (or such other comparable interest rate as the Compensation Committeecommittee may designate from time to time).
The amounts credited to the investment or stock account of a participant under the KEDCP are distributable or payable within 75 days of the earliest to occur of the following distribution events: (i) the date on which the participant separates from service with us, with the distribution delayed for six months for certain “specified employees”;employees;” (ii) “disability” as defined in Section 409A of the Internal Revenue Code; (iii) the participant’s death; (iv) a fixed date or fixed schedule selected by the participant at the time the deferral election was made; (v) an “unforeseeable emergency,” as defined in Section 409A of the Internal Revenue Code; (vi) a “change in control” of the Company, as defined in regulations issued by the Internal Revenue Service;Service under Section 409A of the Internal Revenue Code; and (vii) termination of the KEDCP.
The KEDCP is at all times considered to be entirely unfunded both for tax purposes and for purposes of Title I of the Employee Retirement Income Security Act of 1974, as amended, and no provision will at any time be made with respect to segregating our assets for the payment of any amounts under the KEDCP. Any funds that may be
2023 Proxy Statement 69
Other Benefits
invested for purposes of fulfilling our promises under the KEDCP are for all purposes to be part of our general assets and available to general creditors in the event of a bankruptcy or insolvency of the Company. Nothing contained in the KEDCP will constitute a guarantee by us that any funds or assets will be sufficient to pay any benefit under the KEDCP.
Potential Payments Upon Termination or Change in Control and Termination
We have a change in control agreement (“CIC Agreement”) with each of our NEOs (Messrs. Baker, Sabala, McDonald, Poirier, RadfordRoberts, Lawlar, Clary, and Sienko)Brown).
In March 2015, the Compensation Committee approved an amendment to each CIC Agreement eliminating the excise tax gross-up provision and adding a “Best Net After Tax Payment,” which reduces the amount received by the NEO upon a change in control if the NEO would receive a greater after-tax benefit than he would if full severance benefits were paid, taking into account all applicable taxes including any excise tax. SeePayments Made Upon a Change in Control on next page.
The CIC Agreements provide that each of the NEOs shallwill serve in such executive position as the Board may direct. The CIC Agreements become effective only upon a change in control of the Company (the date of such change in control is referred to as the “Effective Date”). The term of employment under the CIC Agreements is threetwo years from the Effective Date (except for Mr. RadfordBaker, who has a term of twothree years from the Effective Date). Any CIC Agreements entered into with newly hired executives will contain an employment term of two years from the Effective Date. The CIC Agreements automatically extend for an additional year on each anniversary date of the agreements unless we give notice of nonrenewal 60 days prior to the anniversary date. Under the CIC Agreements, a change in control is, with certain limitations, deemed to occur if: (i) an individual or entity (including a “group” under Section 13(d)(3) of the Exchange Act) becomes the beneficial owner of 20% or more of either the then outstanding shares of common stock of the Company or the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors; (ii) as the result of a tender offer, merger, proxy fight or similar transaction, the persons who were previously directors of the Company cease to constitute a majority of the Board; (iii) consummation of the sale of all, or substantially all, of the assets of the Company (with certain limitations) occurs; or (iv) the approval of a plan of dissolution or liquidation.
The CIC Agreements are intended to ensure, among other things, that in the event of a change in control, each NEO will continue to focus on adding shareholder value. We seek to accomplish this by assuring that each NEO continues to receive payments and other benefits equivalent to those he was receivingbeing received at the time of a change in control for the duration of the employment term under of the CIC Agreement. The CIC AgreementsalsoAgreements also provide that should an NEO’s employment be terminated either (i) by the NEO for good reason, or (ii) by the Company (other than for cause or disability) after the Effective Date of the CIC Agreement, hethe NEO would receive from us a lump-sum defined amount generally equivalent to three times the aggregate of his thenthe annual base salary rate, the highest STIP and his highest annual incentivethe prorated LTIP during the three-year period, prior to the Effective Date. For Mr. RadfordMessrs. Roberts, Lawlar, Clary, and Brown, and any other CIC Agreements entered into hereafter, the lump-sum defined amount is generally equivalent to two times.
The NEOs would also be entitled to lump-sum payments representing the difference in pension and supplemental retirement benefits to which they would be entitled on (i) the date of actual termination, and (ii) the end of the three-year (or two-year where applicable) employment period under the CIC Agreements. We would also maintain such NEO’s participation in all benefit plans and programs (or provide equivalent benefits if such continued participation waswere not possible under the terms of such plans and programs).
AnA NEO whose employment has terminated would not be required to seek other employment in order to receive the defined benefits.
70 www.hecla.com
Other Benefits
The following table starting on page 70 reflectssummarizes the circumstances under which our NEOs would receive severance benefits upon termination or a change in control.
Compensation Element | Termination Following a Change in Control(1) | Termination due to Death or Disability | Involuntary Not For Cause or Voluntary Termination | For Cause Termination | Retirement | |||||
Base Salary | Mr. Baker receives three times his annual base salary. Messrs. Roberts, Lawlar, Clary, and Brown receive two times their annual base salary. | N/A | N/A | N/A | N/A | |||||
STIP | Mr. Baker receives three times the highest STIP paid in the last three years. Messrs. Roberts, Lawlar, Clary, and Brown receive two times the highest STIP paid in the last three years. | N/A | N/A | N/A | N/A | |||||
LTIP | Mr. Baker receives three times the highest LTIP paid in the last three years. Messrs. Roberts, Lawlar, Clary, and Brown receive two times the highest LTIP paid in the last three years. | Each NEO would receive a prorated portion of any LTIP plan in which the NEO was a participant. The surviving spouse or other beneficiary would receive the payment based on actual performance. | N/A | N/A | To qualify for vesting of long-term award benefits, the employee must retire under the Retirement Plan and be at least age: (i) 60 and have 15 or more years of service with the Company; (ii) 65 and have 7 or more years of service with the Company; or (iii) 68. If the participant meets these age and years of service requirements, their prorated portion for outstanding plan periods will be paid after the completion of those plan periods based on actual performance. |
2023 Proxy Statement 71
Other Benefits
Compensation Element | Termination Following a Change in Control(1) | Termination due to Death or Disability | Involuntary Not For Cause or Voluntary Termination | For Cause Termination | Retirement | |||||
RSUs | All unvested RSUs will vest upon a change in control.(2) | All unvested RSUs would vest immediately as of the date of such disability or death and would be delivered to the NEO, spouse, or beneficiary. | N/A | N/A | If an employee retires before their RSUs have vested, they must meet certain requirements for their RSUs to continue to vest based on the applicable vesting schedule. To qualify for vesting of RSUs, the employee must retire under the Retirement Plan and be at least age: (i) 60 and have 15 or more years of service with the Company; (ii) 65 and have 7 or more years of service with the Company; or (iii) 68. | |||||
PSUs | All unearned PSUs will immediately become earned and vested at 100% of target level as of the date of the change in control.(2) | The TSR performance goal would be deemed achieved at 100% of target level as of the date of such disability or death and would be delivered to the NEO, spouse, or beneficiary. | N/A | N/A | To qualify for vesting of unearned PSUs, the employee must retire under the Retirement Plan and be at least age: (i) 60 and have 15 or more years of service with the Company; (ii) 65 and have 7 or more years of service with the Company; or (iii) 68. | |||||
Health and Welfare Benefits | Mr. Baker would receive three years of health and welfare benefits and disability and life insurance premiums would be paid for such three-year period. For Messrs. Roberts, Lawlar, Clary, and Brown the same would apply, but for two years. In addition to any earned, but unused vacation, all NEOs would be eligible for up to $20,000 in outplacement assistance and the 401(k) match would be deposited in their accounts. | Unused vacation and the 401(k) match would be deposited in their account. | N/A | N/A | Unused vacation and the 401(k) match would be deposited in their accounts. |
(1) | This means an involuntary termination without cause or voluntary termination for good reason within the stated period (three or two years) after the change in control. |
(2) | Our 2010 Stock Plan provides for a double-trigger vesting. |
72 www.hecla.com
Other Benefits
The following tables reflect the amount of compensation payablethat would be paid to each of theour NEOs in the event of a termination of suchthe NEO’s employment under the terms of the NEO’s CIC Agreement. That table also shows the amount of compensation payable to each NEO upon voluntary termination; involuntary not for cause termination; for cause termination; termination following a change in control; andscenarios listed in the event of disability or death oftables and should be read in conjunction with the NEO.disclosure above. The amounts shown assume that such termination was effective as of December 31, 2015,2022 and thus include amounts earned through such time, and are estimates of the amounts whichthat would be paid out to each NEO upon such NEO’s termination. The tables only include additional benefits that result from the NEOs upon their termination.termination and do not include any amounts or benefits earned, vested, accrued, or owing under any plan for any other reason. Please see Grants of Plan-Based Awards for 2022 on page 63, Outstanding Equity Awards at Calendar Year-End for 2022 on page 65, Pension Benefits table on page 67, and the section titled Nonqualified Deferred Compensation for 2022 on page 69 for additional information. The actual amounts to be paid out can only be determined at the time of such NEO’s separation from Hecla.
Payments Made Upon Termination. For voluntary and involuntary not for cause terminations, NEOs may receive: (i) a prorated portion of short-term performance compensation; (ii) any amounts due under matured long-term performance compensation plans; (iii) one month of health and welfare benefits; and (iv) any earned, but unused vacation. Neither of these terminations would impact their vested retirement plans and the 401(k) match would be deposited in their accounts.
Termination Payments and Benefits for Phillips S. Baker, Jr. | Termination Following a Change in Control ($) | Death or Disability ($) | ||||||
Base Salary(1) |
| 2,250,000 |
|
| — |
| ||
STIP(2) |
| 4,921,875 |
|
| — |
| ||
Unvested RSUs(3) |
| 1,295,658 |
|
| 1,295,658 |
| ||
Unearned PSUs(4) |
| 1,168,590 |
|
| 1,168,590 |
| ||
LTIP |
| 2,970,000 | (5) |
| 1,829,997 | (6) | ||
Benefits: | ||||||||
Health and Welfare Benefits(7) |
| 61,350 |
|
| — |
| ||
Life Insurance Benefits(8) |
| 13,166 |
|
| — |
| ||
Outplacement |
| 20,000 |
|
| — |
| ||
|
|
|
| |||||
Total |
| 12,700,639 |
|
| 4,294,245 |
| ||
|
|
|
|
Termination Payments and Benefits for Lauren M. Roberts | Termination Following a Change in Control ($) | Death or Disability | ||||||
Base Salary(1) |
| 840,000 |
|
| — |
| ||
STIP(2) |
| 1,406,000 |
|
| — |
| ||
Unvested RSUs(3) |
| 619,979 |
|
| 619,979 |
| ||
Unearned PSUs(4) |
| 356,852 |
|
| 356,852 |
| ||
LTIP |
| 990,000 | (5) |
| 884,997 | (6) | ||
Benefits: | ||||||||
Health and Welfare Benefits(7) |
| 35,089 |
|
| — |
| ||
Life Insurance Benefits(8) |
| 8,777 |
|
| — |
| ||
Outplacement |
| 20,000 |
|
| — |
| ||
|
|
|
| |||||
Total |
| 4,276,697 |
|
| 1,861,828 |
| ||
|
|
|
|
2023 Proxy Statement 73
Other Benefits
Termination Payments and Benefits for Russell D. Lawlar | Termination Following a Change in Control ($) | Death or Disability | ||||||
Base Salary(1) |
| 660,000 |
|
| — |
| ||
STIP(2) |
| 838,200 |
|
| — |
| ||
Unvested RSUs(3) |
| 361,400 |
|
| 361,400 |
| ||
Unearned PSUs(4) |
| 240,770 |
|
| 240,770 |
| ||
LTIP |
| 511,582 | (5) |
| 540,790 | (6) | ||
Benefits: | ||||||||
Health and Welfare Benefits(7) |
| 45,986 |
|
| — |
| ||
Life Insurance Benefits(8) |
| 8,777 |
|
| — |
| ||
Outplacement |
| 20,000 |
|
| — |
| ||
|
|
|
| |||||
Total |
| 2,686,715 |
|
| 1,142,960 |
| ||
|
|
|
|
Termination Payments and Benefits for Michael L. Clary | Termination Following a Change in Control ($) | Death or Disability | ||||||
Base Salary(1) |
| 600,000 |
|
| — |
| ||
STIP(2) |
| 1,050,000 |
|
| — |
| ||
Unvested RSUs(3) |
| 428,209 |
|
| 428,209 |
| ||
Unearned PSUs(4) |
| 228,221 |
|
| 228,221 |
| ||
LTIP |
| 507,376 | (5) |
| 532,687 | (6) | ||
Benefits: | ||||||||
Health and Welfare Benefits(7) |
| 58,895 |
|
| — |
| ||
Life Insurance Benefits(8) |
| 8,323 |
|
| — |
| ||
Outplacement |
| 20,000 |
|
| — |
| ||
|
|
|
| |||||
Total |
| 2,901,024 |
|
| 1,189,117 |
| ||
|
|
|
|
Termination Payments and Benefits for Robert D. Brown | Termination Following a Change in Control ($) | Death or Disability | ||||||
Base Salary(1) |
| 600,000 |
|
| — |
| ||
STIP(2) |
| 780,000 |
|
| — |
| ||
Unvested RSUs(3) |
| 386,481 |
|
| 386,481 |
| ||
Unearned PSUs(4) |
| 218,419 |
|
| 218,419 |
| ||
LTIP |
| 742,500 | (5) |
| 645,750 | (6) | ||
Benefits: | ||||||||
Health and Welfare Benefits(7) |
| 5,406 |
|
| — |
| ||
Life Insurance Benefits(8) |
| 7,033 |
|
| — |
| ||
Outplacement |
| 20,000 |
|
| — |
| ||
|
|
|
| |||||
Total |
| 2,759,839 |
|
| 1,250,650 |
| ||
|
|
|
|
Represents three times annual base salary for Mr. Baker. Represents two times annual base salary for Messrs. Roberts, Lawlar, Clary, and Brown. |
Payments Made Upon Retirement. The NEOs could receive a prorated portion of any short-term performance compensation and a prorated portion of any long-term compensation in effect at the time of their retirement. They would also receive one month of health and welfare benefits and any earned but unused vacation, and the 401(k) match would be deposited in their accounts. As of December 31, 2015, Mr. Baker was the only NEO that qualified for early or regular retirement from the Hecla Mining Company Retirement Plan.
Payments Made Upon Death or Disability. Upon death or disability, the NEOs would receive a prorated portion of any short-term performance compensation, as well as a prorated portion of any long-term compensation plans in which the NEO was a participant. In both cases, retirement payments would be reduced in accordance with the terms of the plans and, in the case of death, the surviving spouse or other beneficiary would receive the payments. They would also receive one month of health and welfare benefits and any accrued, but unused vacation and the 401(k) match would be deposited in their accounts.
Payments Made Upon a Change in Control. If a change in control occurs as defined in the NEOs’ CIC Agreements, they would be eligible for a prorated portion of any short-term performance compensation and a prorated portion of any long-term performance compensation as though they had been employed for an additional three years. They would also receive three years of health and welfare benefits and disability and life insurance premiums would be paid for such three year period. In addition to any earned, but unused vacation, they would be eligible for up to $20,000 in outplacement assistance and the 401(k) match would be deposited in their accounts. Payment would be as if the NEO had been employed for an additional two years under the CIC Agreement with Mr. Radford and any other CIC Agreements entered into hereafter.
The CIC Agreements provide for specified payments and other benefits if the NEO’s employment is terminated either (i) by the NEO for good reason, or (ii) by Hecla or its successor other than for cause, death or disability, withinthe three years (two years for Mr. Radford) following a change in control, or prior to a change in control if it can be demonstrated that the termination was related to a potential change in control. These payments and benefits include the following:
| |
|
74 www.hecla.com
Other Benefits
(3) | In the event of a qualifying termination following a change in control, |
| |
|
(4) | For unearned PSUs, the values included in the |
In addition, the CIC Agreements, in conjunction with our equity compensation plans, provide for immediate vesting of all stock options and restricted stock awards in the event that, following a change in control, the NEO is terminated without cause or leaves for good reason (i.e., a “double trigger”). In such a situation, the LTIP would also pay out a prorated award based on target performance, regardless of actual performance. However, this payment directly offsets the cash severance payment by the same amount. These plan provisions are intended to recognize the value of the NEO’s long-term contribution to Hecla and to permit management decisions to be made without undo concern about possible termination following a change in control.
(5) |
Potential Payments Upon Termination or Change in Control
Executive Benefits and Payments Upon Termination | Voluntary Termination on 12/31/15 ($) | Involuntary Not For Cause Termination on 12/31/15 ($) | For Cause Termination on 12/31/15 ($) | Termination Following a Change in Control on 12/31/15 ($) | Disability on 12/31/15 ($) | Death on 12/31/15 ($) | |||||||||
Phillips S. Baker, Jr. | |||||||||||||||
Short-term Performance Compensation | 695,750 | 695,750 | — | 2,758,800 | 1 | 695,750 | 695,750 | ||||||||
Stock Options | — | — | — | — | — | — | |||||||||
Restricted Stock | — | — | — | 685,713 | — | — | |||||||||
Long-term Performance Compensation | 1,072,500 | 1,072,500 | 1,072,500 | 4,151,814 | 2 | 2,022,500 | 2,022,500 | ||||||||
Benefits & Perquisites: | |||||||||||||||
Retirement Plans3 | 4,131,441 | 4,131,441 | 4,131,441 | 6,862,316 | 6,923,561 | 4,579,218 | |||||||||
Deferred Compensation4 | 566,032 | 566,032 | 566,032 | 566,032 | 566,032 | 566,032 | |||||||||
Health and Welfare Benefits5 | 1,513 | 1,513 | 1,513 | 54,462 | 1,513 | 1,513 | |||||||||
Disability Income6 | — | — | — | — | 740,329 | — | |||||||||
Life Insurance Benefits7 | — | — | — | 11,103 | — | 325,000 | |||||||||
Change in Control Payment8 | — | — | — | 1,815,000 | — | — | |||||||||
Earned Vacation Pay9 | 46,536 | 46,536 | 46,536 | 46,536 | 46,536 | 46,536 | |||||||||
Outplacement | — | — | — | 20,000 | — | — | |||||||||
Total | 6,513,772 | 6,513,772 | 5,818,022 | 16,971,776 | 10,996,221 | 8,236,549 | |||||||||
James A. Sabala | |||||||||||||||
Short-term Performance Compensation | 380,000 | 380,000 | — | 1,437,750 | 1 | 380,000 | 380,000 | ||||||||
Stock Options | — | — | — | — | — | — | |||||||||
Restricted Stock | — | — | — | 229,121 | — | — | |||||||||
Long-term Performance Compensation | 442,000 | 442,000 | 442,000 | 1,610,400 | 2 | 782,000 | 782,000 | ||||||||
Benefits & Perquisites: | |||||||||||||||
Retirement Plans3 | 1,250,532 | 1,250,532 | 1,250,532 | 2,245,585 | 1,275,181 | 899,095 | |||||||||
Health and Welfare Benefits5 | 1,051 | 1,051 | 1,051 | 37,833 | 1,051 | 1,051 | |||||||||
Disability Income6 | — | — | — | — | 418,489 | — | |||||||||
Life Insurance Benefits7 | — | — | — | 11,103 | — | 325,000 | |||||||||
Change in Control Payment8 | — | — | — | 1,140,000 | — | — | |||||||||
Earned Vacation Pay9 | 21,922 | 21,922 | 21,922 | 21,922 | 21,922 | 21,922 | |||||||||
Outplacement | — | — | — | 20,000 | — | — | |||||||||
Total | 2,095,505 | 2,095,505 | 1,715,505 | 6,753,714 | 2,878,643 | 2,409,068 | |||||||||
Lawrence P. Radford | |||||||||||||||
Short-term Performance Compensation | 500,000 | 500,000 | — | 1,000,000 | 1 | 500,000 | 500,000 | ||||||||
Stock Options | — | — | — | — | — | — | |||||||||
Restricted Stock | — | — | — | 501,041 | — | — | |||||||||
Long-term Performance Compensation | 390,000 | 390,000 | 390,000 | 838,750 | 2 | 730,000 | 730,000 | ||||||||
Benefits & Perquisites: | |||||||||||||||
Retirement Plans3 | 336,228 | 336,228 | 336,228 | 497,606 | 544,166 | 355,787 | |||||||||
Health and Welfare Benefits5 | 1,513 | 1,513 | 1,513 | 36,308 | 1,513 | 1,513 | |||||||||
Disability Income6 | — | — | — | — | 779,908 | — | |||||||||
Life Insurance Benefits7 | — | — | — | 7,402 | — | 325,000 | |||||||||
Change in Control Payment8 | — | — | — | 760,000 | — | — | |||||||||
Earned Vacation Pay9 | 21,922 | 21,922 | 21,922 | 21,922 | 21,922 | 21,922 | |||||||||
Outplacement | — | — | — | 20,000 | — | — | |||||||||
Total | 1,249,663 | 1,249,663 | 749,663 | 3,683,029 | 2,577,509 | 1,934,222 |
Executive Benefits and Payments Upon Termination | Voluntary Termination on 12/31/15 ($) | Involuntary Not For Cause Termination on 12/31/15 ($) | For Cause Termination on 12/31/15 ($) | Termination Following a Change in Control on 12/31/15 ($) | Disability on 12/31/15 ($) | Death on 12/31/15 ($) | |||||||||
Dr. Dean W.A. McDonald | |||||||||||||||
Short-term Performance Compensation | 242,000 | 242,000 | — | 907,500 | 1 | 242,000 | 242,000 | ||||||||
Stock Options | — | — | — | — | — | — | |||||||||
Restricted Stock | — | — | — | 411,427 | — | — | |||||||||
Long-term Performance Compensation | 338,000 | 338,000 | 338,000 | 1,258,125 | 2 | 598,000 | 598,000 | ||||||||
Benefits & Perquisites: | |||||||||||||||
Retirement Plans3 | 990,271 | 990,271 | 990,271 | 1,643,021 | 1,186,681 | 813,909 | |||||||||
Health and Welfare Benefits5 | 388 | 388 | 388 | 13,968 | 388 | 388 | |||||||||
Disability Income6 | — | — | — | — | 363,769 | — | |||||||||
Life Insurance Benefits7 | — | — | — | 7,674 | — | 189,000 | |||||||||
Change in Control Payment8 | — | — | — | 825,000 | — | — | |||||||||
Earned Vacation Pay9 | 15,865 | 15,865 | 15,865 | 15,865 | 15,865 | 15,865 | |||||||||
Outplacement | — | — | — | 20,000 | — | — | |||||||||
Total | 1,586,524 | 1,586,524 | 1,344,524 | 5,102,580 | 2,406,703 | 1,859,162 | |||||||||
David C. Sienko | |||||||||||||||
Short-term Performance Compensation | 150,000 | 150,000 | — | 675,000 | 1 | 150,000 | 150,000 | ||||||||
Stock Options | — | — | — | — | — | — | |||||||||
Restricted Stock | — | — | — | 211,202 | — | — | |||||||||
Long-term Performance Compensation | 247,000 | 247,000 | 247,000 | 956,175 | 2 | 437,000 | 437,000 | ||||||||
Benefits & Perquisites: | |||||||||||||||
Retirement Plans3 | 252,798 | 252,798 | 252,798 | 380,971 | 702,777 | 423,004 | |||||||||
Health and Welfare Benefits5 | 447 | 447 | 447 | 16,097 | 447 | 447 | |||||||||
Disability Income6 | — | — | — | — | 952,799 | — | |||||||||
Life Insurance Benefits7 | — | — | — | 9,531 | — | 251,000 | |||||||||
Change in Control Payment8 | — | — | — | 750,000 | — | — | |||||||||
Earned Vacation Pay9 | 14,423 | 14,423 | 14,423 | 14,423 | 14,423 | 14,423 | |||||||||
Outplacement | — | — | — | 20,000 | — | — | |||||||||
Total | 664,668 | 664,668 | 514,668 | 3,033,399 | 2,257,446 | 1,275,874 | |||||||||
Don Poirier* | |||||||||||||||
Short-term Performance Compensation | 135,000 | 135,000 | — | 488,160 | 1 | 135,000 | 135,000 | ||||||||
Stock Options | — | — | — | — | — | — | |||||||||
Restricted Stock | — | — | — | 274,284 | — | — | |||||||||
Long-term Performance Compensation | 266,500 | 266,500 | 266,500 | 1,006,500 | 2 | 471,500 | 471,500 | ||||||||
Benefits & Perquisites: | |||||||||||||||
Retirement Plans3 | 710,480 | 710,480 | 710,480 | 1,183,558 | 992,656 | 664,225 | |||||||||
Health and Welfare Benefits5 | 388 | 388 | 388 | 13,968 | 388 | 388 | |||||||||
Disability Income6 | — | — | — | — | 425,116 | — | |||||||||
Life Insurance Benefits7 | — | — | — | 8,500 | — | 226,000 | |||||||||
Change in Control Payment8 | — | — | — | 678,000 | — | — | |||||||||
Earned Vacation Pay9 | 13,038 | 13,038 | 13,038 | 13,038 | 13,038 | 13,038 | |||||||||
Outplacement | — | — | — | 20,000 | — | — | |||||||||
Total | 1,125,406 | 1,125,406 | 990,406 | 3,686,008 | 2,037,698 | 1,510,151 |
Represents three times the highest |
(6) | Represents |
Reflects the estimated lump-sum |
Reflects the estimated lump-sum | |
each NEO. |
EQUITY COMPENSATION PLAN INFORMATIONCEO Pay Ratio
As of December 31, 2015, the Company has three equity incentive compensation plans that have been approved by the shareholders under which shares of the Company’scommon stock have been authorized for issuance to directors, officers, employees, and consultants. All outstanding awards relate to our Common Stock.
Our NEOs participate in the Hecla Mining Company Qualified Retirement Plan (the “Retirement Plan”), which covers substantially all of our employees, except for certain hourly employees who are covered by separate plans. Contributions to the Retirement Plan, and the related expense or income, are based on general actuarial calculations and, accordingly, no portion of our contributions, and related expenses or income, is specifically attributable to our officers. We also have an unfunded Supplemental Excess Retirement Plan adopted in November 1985 (the “SERP”) under which the amount of any benefits not payable under the Retirement Plan by reason of the limitations imposed by the Internal Revenue Code and/or the Employee Retirement Income Security Act, as amended (the “Acts”), and the loss, if any, due to a deferral of salary made under our KEDCP and/or our 401(k) Plan will be paid out of our general funds to any employee who may be adversely affected. Under the Acts, the current maximum annual pension benefit payable by the Retirement Plan to any employee is $210,000, subject to specified adjustments, and is calculated using earnings not in excess of $265,000. Upon reaching the normal retirement age of 65, each participant is eligible to receive annual retirement benefits in monthly installments for life equal to, for each year of credited service, 1% of final average annual earnings (defined as the highestaverage earnings of such employee for any 36 consecutive calendar months during the final 120 calendar months of service) up to the applicable covered compensation level (which level is based on the Social Security maximum taxable wage base) and 1.75% of the difference, if any, between final average annual earnings and the applicable covered compensation level. The Retirement Plan and SERP define earnings for purposes of the plans to be “a wage or salary for services of employees inclusive of any bonus or special pay including gain-sharing programs, contract miners’ bonus pay and the equivalent,” except that on or after July 1, 2013, earnings are defined as “base salary or wages for personal services and elective deferrals plus (i) elective deferrals not includable in the gross income of the Employee under Code Sections 125, 132(f)(4), 402(e)(3), 402(h), 403(b) and 457, (ii) one-half (1/2) of any performance based or annual incentive bonus, (iii) one-half (1/2) of any safety incentive award, (iv) paid time off, other than pay while on disability leave, (v) any post-employment payment for services performed during the course of employment that would have been paid to the Employee prior to the severance from employment if the Employee had continued in employment with an Employer, and (vi) compensation for overtime at the Employee’s regular rate of pay.”
The following table shows estimated aggregate annual benefits under our Retirement Plan and the SERP payable upon retirement to a participant who retires in 2015 at age 65 having the years of service and final average annual earnings as specified. The table assumes Social Security covered compensation levels as in effect on January 1, 2015.
Estimated Annual Retirement Benefits
Final Average | Years of Credited Service | ||||||||||||||||||||||||
Annual Earnings | 5 | 10 | 15 | 20 | 25 | 30 | 35 | ||||||||||||||||||
$ | 100,000 | $ | 5,931 | $ | 11,862 | $ | 17,792 | $ | 23,723 | $ | 29,654 | $ | 35,585 | $ | 41,515 | ||||||||||
150,000 | 10,306 | 20,612 | 30,917 | 41,223 | 51,529 | 61,835 | 72,140 | ||||||||||||||||||
200,000 | 14,681 | 29,362 | 44,042 | 58,723 | 73,404 | 88,085 | 102,765 | ||||||||||||||||||
250,000 | 19,056 | 38,112 | 57,167 | 76,223 | 95,279 | 114,335 | 133,390 | ||||||||||||||||||
300,000 | 23,431 | 46,862 | 70,292 | 93,723 | 117,154 | 140,585 | 164,015 | ||||||||||||||||||
350,000 | 27,806 | 55,612 | 83,417 | 111,223 | 139,029 | 166,835 | 194,640 | ||||||||||||||||||
400,000 | 32,181 | 64,362 | 96,542 | 128,723 | 160,904 | 193,085 | 225,265 | ||||||||||||||||||
450,000 | 36,556 | 73,112 | 109,667 | 146,223 | 182,779 | 219,335 | 255,890 | ||||||||||||||||||
500,000 | 40,931 | 81,862 | 122,792 | 163,723 | 204,654 | 245,585 | 286,515 | ||||||||||||||||||
550,000 | 45,306 | 90,612 | 135,917 | 181,223 | 226,529 | 271,835 | 317,140 | ||||||||||||||||||
600,000 | 49,681 | 99,362 | 149,042 | 198,723 | 248,404 | 298,085 | 347,765 | ||||||||||||||||||
650,000 | 54,056 | 108,112 | 162,167 | 216,223 | 270,279 | 324,335 | 378,390 | ||||||||||||||||||
700,000 | 58,431 | 116,862 | 175,292 | 233,723 | 292,154 | 350,585 | 409,015 | ||||||||||||||||||
750,000 | 62,806 | 125,612 | 188,417 | 251,223 | 314,029 | 376,835 | 439,640 | ||||||||||||||||||
800,000 | 67,181 | 134,362 | 201,542 | 268,723 | 335,904 | 403,085 | 470,265 | ||||||||||||||||||
850,000 | 71,556 | 143,112 | 214,667 | 286,223 | 357,779 | 429,335 | 500,890 | ||||||||||||||||||
900,000 | 75,931 | 151,862 | 227,792 | 303,723 | 379,654 | 455,585 | 531,515 | ||||||||||||||||||
950,000 | 80,306 | 160,612 | 240,917 | 321,223 | 401,529 | 481,835 | 562,140 | ||||||||||||||||||
1,000,000 | 84,681 | 169,362 | 254,042 | 338,723 | 423,404 | 508,085 | 592,765 |
Benefits listed in the pension table are not subject to any deduction for Social Security or other offset amounts. As of December 31, 2015, the following executive officers have completed the indicated number of full years of credited service: P. Baker, 14 years; J. Sabala, 7 years; L. Radford, 4 years; D. McDonald, 9 years; D. Sienko, 5 years; and D. Poirier, 8 years.
The following table shows pension information under the Hecla Mining Company Retirement Plan and the SERP for the NEOs as of December 31, 2015. The terms and conditions for participation in, and payments from, these plans are described above under “Retirement Plan.” The actuarial present value of accumulated benefit isdetermined using the same assumptions used for financial reporting purposes except that retirement age is assumed to be the normal retirement age of 65, or the current age if eligible for early retirement. These assumptions are described in the pension footnotes to our financial statements included in our Annual Report on Form 10-K.
Name | Plan Name | Number of Years Credited Service (#) | Present Value of Accumulated Benefit ($) | Payments During Last Calendar Year ($) | ||||||
Phillips S. Baker, Jr. | Hecla Mining Company Retirement Plan | 14 | 415,383 | — | ||||||
Hecla Mining Company Supplemental Excess | ||||||||||
Retirement Plan | 3,716,058 | — | ||||||||
James A. Sabala | Hecla Mining Company Retirement Plan | 7 | 316,695 | — | ||||||
Hecla Mining Company Supplemental Excess | ||||||||||
Retirement Plan | 933,837 | — | ||||||||
Lawrence P. Radford | Hecla Mining Company Retirement Plan | 4 | 125,114 | — | ||||||
Hecla Mining Company Supplemental Excess | ||||||||||
Retirement Plan | 211,114 | — | ||||||||
Dr. Dean W.A. McDonald | Hecla Mining Company Retirement Plan | 9 | 341,029 | — | ||||||
Hecla Mining Company Supplemental Excess | ||||||||||
Retirement Plan | 649,242 | — | ||||||||
David C. Sienko | Hecla Mining Company Retirement Plan | 5 | 121,159 | — | ||||||
Hecla Mining Company Supplemental Excess | ||||||||||
Retirement Plan | 131,639 | — | ||||||||
Don Poirier | Hecla Mining Company Retirement Plan | 8 | 280,758 | — | ||||||
Hecla Mining Company Supplemental Excess | ||||||||||
Retirement Plan | 429,722 | — |
PROPOSAL 5 – APPROVAL OF NAMED EXECUTIVE OFFICER COMPENSATION
Our Board, pursuant to Section 14A of the Securities Exchange Act of 1934, seeks your vote to approve, on an advisory basis, the compensation of our NEOs as set forth under the headingCompensation Discussion and Analysis on page 34 and in the accompanying compensation tables on page 62, and related material. The Board believes strongly that the Company’s current executive compensation program is right for the Company and our shareholders at the current time. The Company’s executive compensation program is designed to attract, retain, and motivate talented individuals who possess the executive experience and the leadership skills needed by the Company in order to maintain and increase shareholder value. The Company seeks to provide executive compensation that is competitive with that provided by companies in our peer group within the mining industry. The Company also seeks to provide both near-term and long-term financial incentives to our executives that reward them for good performance and achieving financial results and strategic objectives that are expected to contribute to increased long-term shareholder value.
Underlying these incentives is a strong philosophy of “pay-for-performance” that forms the foundation of decisions regarding the compensation of our NEOs. This compensation philosophy, which has been consistent over many years, is designed to align the interests of our NEOs with the interests of our shareholders and is central to our ability to attract, retain and motivate executive leaders to guide the Company through market challenges over the long-term.
The Company has demonstrated consistent strong financial performance both in the short-term and in the long-term. The Company believes that its NEOs have contributed significantly to these achievements. Their tenure with the Company ranges from 5 years to 14 years, providing the Company with consistent, steady and experienced leadership that has been able to guide the Company to consistent strong financial performance over multi-year periods.
The Board strongly believes in the effectiveness and appropriateness for the Company of its executive compensation program. We believe this confidence is shared by our shareholders, as evidenced by the favorable vote of 83% of our shareholders on the similar proposal presented at last year’s annual meeting. Our compensation practices did not change materially from calendar year 2014 to calendar year 2015 and the Board hopes that our shareholders will continue to believe in the effectiveness and appropriateness of our executive compensation program should be internally consistent and equitable to motivate our employees to create shareholder value. Our committee strives to design a fair and competitive compensation program that will expressattract, motivate, and retain employees, reward performance, and provide incentives based on our performance. As required by SEC rules, the committee reviewed a comparison of CEO pay to the pay of our “median employee.” As permitted by SEC rules we can use the same median employee in 2022 that belief throughwe identified in 2021 for calculating our CEO pay ratio unless there have been changes in the employee population or employee compensation arrangements that we reasonably believe would result in a favorable vote on this proposal at this Annual Meeting.significant change in our pay ratio disclosure. The total compensation for the median employee was calculated in the same manner as our CEO for 2022.
The voteBelow is advisory(i) the calendar year 2022 annual total compensation of our CEO, Mr. Baker; (ii) the calendar year 2022 annual total compensation of our median employee; and therefore not binding on(iii) the ratio of the annual total compensation of our CEO to that of our median employee.
CEO PAY RATIO | ||||
2022 CEO Annual Total Compensation | $ | 5,239,132 | ||
2022 Median Employee Annual Total Compensation | $ | 100,870 | ||
CEO to Median Employee Pay Ratio | 52 to 1 |
2023 Proxy Statement 75
We are asking shareholders to approve the following resolution at the 2016 Annual Meeting:
“RESOLVED, that the compensation paid towith the Company’s named executive officers, as disclosed pursuantperformance, refer to Item 402 of Regulation S-K, described in the Compensation Discussion and Analysis Summary Compensation Table for 2015, and the related compensation tables and narrative in thesection of this Proxy Statement for the Company’s 2016 Annual Shareholders’ Meeting, is hereby APPROVED.”
Average Summary Compensation Table Total for Non-PEO NEOs (3) ($) | Average Compensation Actually Paid to Non-PEO NEOs (4) ($) | Value of Initial Fixed $100 Investment Based On: | ||||||||||||||||||||||||||||||
Year | Summary Compensation Table Total for PEO (1) ($) | Compensation Actually Paid to PEO (2) ($) | Total Shareholder Return (5) ($) | Peer Group Total Shareholder Return (6) ($) | Net (Loss) Income (millions) (7) ($) | Adjusted EBITDA Less Capital (thousands) (8) ($) | ||||||||||||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | ||||||||||||||||||||||||
2022 | 4,579,866 | 6,145,949 | 1,459,386 | 1,725,457 | 166.27 | 117.47 | (37.3 | ) | 69,841 | |||||||||||||||||||||||
2021 | 3,765,100 | 3,177,762 | 915,927 | 305,615 | 155.48 | 135.75 | 35.1 | 169,925 | ||||||||||||||||||||||||
2020 | 5,190,508 | 7,046,358 | 1,631,356 | 2,457,104 | 191.63 | 132.26 | (9.5 | ) | 130,745 |
(2) | This column represents the amount of “compensation actually paid” to Mr. Baker, as computed in accordance with Item 402(v) of Regulation S-K. The amounts do not reflect the actual amount of compensation earned by or paid to Mr. Baker during the applicable year. In accordance with the requirements of Item 402(v) of RegulationS-K, the following adjustments were made to Mr. Baker’s total compensation for each year to determine the “compensation actually paid”: |
Year | Reported Summary Compensation Table Total for PEO (a) ($) | Reported Summary Compensation Table Value of PEO Equity Awards (b) ($) | Adjusted Value of Equity Awards (c) ($) | Reported Summary Compensation Table Change in Value of Pension Benefits (d) ($) | Pension Benefits Adjustments (e) ($) | Compensation Actually Paid to PEO ($) | ||||||||||||||||||
2022 | 4,579,866 | (1,205,255 | ) | 2,455,862 | — | 315,476 | 6,145,949 | |||||||||||||||||
2021 | 3,765,100 | (1,370,005 | ) | 1,153,661 | (824,973 | ) | 453,979 | 3,177,762 | ||||||||||||||||
2020 | 5,190,508 | (937,292 | ) | 3,967,769 | (1,628,345 | ) | 453,718 | 7,046,358 |
This column represents the amount of total compensation reported for Mr. Baker for each corresponding year in the “Total” column of the Summary Compensation Table. Please refer to the Summary Compensation Table in this Proxy Statement |
(b) | This column represents the grant date fair value of equity awards reported in the “Stock Awards” column in the Summary Compensation Table for the applicable year. Please refer to the Summary Compensation Table in this Proxy Statement on page 61. |
(c) | This column represents an adjustment to the amounts in the “Stock Awards” column in the Summary Compensation Table for the applicable year (a “Subject Year”). For a Subject Year, the adjusted amount replaces the “Stock Awards” column in the Summary Compensation Table for Mr. Baker for that Subject Year. The adjusted amount is determined by adding (or subtracting, as applicable) the following for that Subject Year: (i) the year-end fair value of any equity awards granted in the Subject Year that are outstanding and unvested as of the end of the Subject Year; (ii) the amount of change as of the end of the Subject Year (from the end of the prior calendar year) in the fair value of any awards granted in prior years that are outstanding and unvested as of the end of the Subject Year; (iii) for awards that are granted and vest in the Subject Year, the fair value as of the vesting date; (iv) for awards granted in prior years that vest in the Subject Year, the amount equal to the change as of the vesting date (from the end of the prior calendar year) in the fair value; (v) for awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the Subject Year, a deduction for the amount equal to the fair value at the end of the prior calendar year; and (vi) the dollar value of any dividends or other earnings paid on stock awards in the Subject Year prior to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total compensation for the Subject Year. The amounts added or subtracted to determine the adjusted amount are as follows: |
Guidelines and Timing
Year | Year End Fair Value of Equity Awards Granted in the Year ($) | Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards at FYE Granted in Prior Years ($) | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year ($) | Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year ($) | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year ($) | Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation in the Summary Compensation Table for the Year ($) | Adjusted Value of Equity Awards ($) | |||||||||||||||||||||
2022 | 1,822,337 | 460,994 | — | 172,531 | — | — | 2,455,862 | |||||||||||||||||||||
2021 | 751,905 | 177,778 | — | 223,978 | — | — | 1,153,661 | |||||||||||||||||||||
2020 | 2,194,058 | 1,851,672 | — | (77,961 | ) | — | — | 3,967,769 |
In an effort to more closely align the Company’s non-management directors’ financial interests with those of the shareholders, in June 2012, the Compensation Committee and Board adopted stock ownership guidelines for our non-management directors. Under these guidelines, each non-management director is encouraged to own shares of common stock (which includes shares held under the Hecla Mining Company Stock Plan for Nonemployee Directors and the 2010 Stock Incentive Plan) valued at three times their annual cash retainer and should comply with the guidelines within five years of the adoption of the guidelines. Any directors appointed or elected after June 2012 are expected to achieve their expected value requirement within five years of their appointment or election to the Board.
In the event a non-management director’s cash retainer increases, he or she will have three years from the date of the increase to acquire any additional shares needed to meet these guidelines.
Similarly, we believe that it is important to encourage our executive officers to hold a material amount of our common stock and to link their long-term economic interest directly to that of our shareholders. To achieve this goal, in June 2012, the Compensation Committee and Board established stock ownership guidelines for the Company’s senior management. The guidelines for the CEO are six times base salary, which should be achieved within five years of the adoption of the guidelines. The guidelines for all other executive officers are two times base salary, which should be achieved within five years of the adoption of the guidelines. Unvested shares of restricted stock units and shares held directly are considered owned for purposes of the guidelines. Any executive officer employed after June 2012 is required to achieve his or her expected value requirement within five years of the date that the executive officer assumes his or her position. If an NEO becomes subject to a greater ownership amount due to a promotion or an increase in base salary, the NEO is expected to meet the higher ownership threshold within three years.
Because of fluctuations in the Company’s stock price, in February 2016, the Compensation Committee and the Board of Directors amended the stock ownership guidelines to provide a valuation methodology that consists of valuing the shares held by using the average closing price of the Company’s common stock on the NYSE for the previous calendar year. Because share prices of all companies are subject to market volatility, the Board believes that it would be unfair to require an executive or Board member to buy more shares simply because Hecla’s stock price drops. In the event there is a significant decline in Hecla’s stock price that causes an executive’s or Board member’s holdings to fall below the applicable threshold, the executives or Board members will not be required to purchase additional shares to meet the threshold, but they generally may not sell or transfer any shares until the threshold has again been achieved. The stock ownership guidelines also provide that if any executive or Board member falls below their required holdings, they shall have three years to achieve the required ownership level.
The following tables summarize the non-management directors and NEO’s stock ownership guidelines and their status as of December 31, 2015, based on the average closing price of our common stock on the NYSEapplicable measurement date and (2) for PSU awards, a Monte Carlo simulation as of the applicable measurement date.
(d) | The amounts included in this column are the amounts reported in the “Change in Pension and Nonqualified Deferred Compensation” column of the Summary Compensation Table for each applicable year. Please refer to the Summary Compensation Table in this Proxy Statement on page 61. |
(e) | The total pension benefit adjustments for each applicable year include the aggregate of two components: (i) the actuarially determined service cost for services rendered by Mr. Baker during the applicable year (the “service cost”); and (ii) the entire cost of benefits granted in a plan amendment (or initiation) during the applicable year that are attributed by the benefit formula to services rendered in periods prior to the plan amendment or initiation (the “prior service cost”), in each case calculated in accordance with U.S. GAAP. The amounts deducted or added in calculating the pension benefit adjustments are as follows: |
Year | Service Cost ($) | Prior Service Cost ($) | Total Pension Benefit Adjustments ($) | |||||
2022 | 315,476 | — | 315,476 | |||||
2021 | 453,979 | — | 453,979 | |||||
2020 | 453,718 | — | 453,718 |
(3) | This column represents the average of the amounts reported for the Company’s NEOs as a group (excluding Mr. Baker) in the “Total” column of the Summary Compensation Table in each applicable year. Please refer to the Summary Compensation Table in the Company’s Proxy Statement on page 61 for the applicable year. The names of each of the NEOs (excluding Mr. Baker) included for purposes of calculating the average amounts in each applicable year are as follows: (i) for 2022, Messrs. Roberts, Lawlar, Brown, Sienko and Clary; (ii) for 2021, Messrs. Roberts, Lawlar, Brown, Sienko and Hall; and (iii) for 2020, Messrs. Roberts, Lawlar, Brown, Sienko and Hall. |
(4) | This column represents the average amount of “compensation actually paid” to the NEOs as a group (excluding Mr. Baker), as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the NEOs as a group (excluding Mr. Baker) during the applicable year. In accordance with the requirements of Item 402(v) of RegulationS-K, the following adjustments were made to average total compensation for the NEOs as a group (excluding Mr. Baker) for each year to determine the “compensation actually paid”, using the same adjustment methodology described above in Note 2(c): |
Year | Average Reported Summary Compensation Table Total for Non-PEO NEOs (a) ($) | Average Reported Summary Compensation Table Value of Non-PEO NEOEquity Awards (b) ($) | Average Non- PEO NEO Adjusted Value of Equity Awards (c) ($) | Average Reported Summary Compensation Table Change in Value of Pension Benefits for Non- PEO NEOs ($) | Pension Benefits Adjustments for Non-PEO NEOs($) | Average Compensation Actually Paid to Non-PEO NEOs($) | ||||||||||||||||||
2022 | 1,459,386 | (319,176 | ) | 561,672 | (26,607 | ) | 50,182 | 1,725,457 | ||||||||||||||||
2021 | 915,927 | (302,821 | ) | (248,745 | ) | (130,636 | ) | 71,890 | 305,615 | |||||||||||||||
2020 | 1,631,356 | (432,168 | ) | 1,381,713 | (200,467 | ) | 76,670 | 2,457,104 |
(a) | This column represents the average of the amounts reported for the Company’s NEOs as a group (excluding Mr. Baker) in the “Total” column of the Summary Compensation Table in each applicable year. Please refer to the Summary Compensation Table in the Company’s Proxy Statement on page 61 for the applicable year. |
(b) | This column represents the average of the total amounts reported for the NEOs as a group (excluding Mr. Baker) in the “Stock Awards” column in the Summary Compensation Table in each applicable year. Please refer to the Summary Compensation Table in the Company’s Proxy Statement on page 61 for the applicable year. |
(c) | This column represents an adjustment to the average of the amounts reported for the NEOs as a group (excluding Mr. Baker) in the “Stock Awards” column in the Summary Compensation Table in each applicable year determined using the same methodology described above in Note 2(c). For each year, the adjusted amount replaces the “Stock Awards” column in the Summary Compensation Table for each NEO (excluding Mr. Baker) for that year. The amounts added or subtracted to determine the adjusted average amount are as follows: |
Year | Average Year End Fair Value of Equity Awards Granted in the Year to Non-PEO NEOs ($) | Average Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards at FYE Granted in Prior Years ($) | Average Fair Value as of Vesting Date of Equity Awards Granted in the Year and Vested in the Year ($) | Average Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year ($) | Average Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year ($) | Average Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation in the Summary Compensation Table for the Year ($) | Adjusted Average Value of Equity Award ($) | |||||||||||||||||||||
2022 | 465,379 | 94,528 | — | 1,765 | — | — | 561,672 | |||||||||||||||||||||
2021 | 171,652 | (11,051 | ) | — | 56,886 | (466,232 | ) | — | (248,745 | ) | ||||||||||||||||||
2020 | 828,835 | 584,044 | — | (31,166 | ) | — | — | 1,381,713 |
(d) | The amounts included in this column represent the average of the amounts reported in “Change in Pension and Nonqualified Deferred Compensation” column of the Summary Compensation Table for the NEOs as a group (excluding Mr. Baker) in each applicable year. Please refer to the Summary Compensation Table in the Company’s Proxy Statement on page 61 for the applicable year. |
(e) | The total pension benefit adjustments for each applicable year are the aggregate of two components, averaged for the NEOs as a group (excluding Mr. Baker) in each applicable year: (i) the actuarially determined service cost for services rendered by the applicable NEO during the applicable year (the “service cost”); and (ii) the entire cost of benefits granted in a plan amendment (or initiation) during the applicable year that are attributed by the benefit formula to services rendered in periods prior to the plan amendment or initiation (the “prior service cost”), in each case calculated in accordance with U.S. GAAP. The amounts deducted or added in calculating the pension benefit adjustments are as follows: |
Year | Service Cost ($) | Prior Service Cost ($) | Total Pension Benefit Adjustments ($) | |||||||
2022 | 50,182 | — | 50,182 | |||||||
2021 | 71,890 | — | 71,890 | |||||||
2020 | 76,670 | — | 76,670 |
(5) | This column represents cumulative Company TSR. TSR is calculated by dividing the sum of the cumulative amount of dividends for each measurement period (2020, 2020-2021 and 2020-2022), assuming dividend reinvestment, and the difference between the Company’s share price at the end and the beginning of the measurement period by the Company’s share price at the beginning of the measurement period. |
(6) | This column represents cumulative peer group TSR computed in accordance with Note 5. The peer group used for this purpose is the following published industry index: S&P 500 Gold Index. |
(7) | This column represents the amount of net income reflected in the Company’s audited financial statements for the applicable year. |
(8) | Adjusted EBITDA Less Capital is calculated as net (loss) income before the following items: interest expense, income tax benefit, depreciation, depletion, and amortization expense, ramp-up and suspension costs, loss on disposition of properties, plants, equipment and mineral interests, , foreign exchange gain, unrealized (gain) loss on derivative contracts, provisional price loss gain), provision for closed operations and environmental matters, stock-based compensation, unrealized loss on investments, adjustment of inventory to net realizable value, monetization of zinc hedges and other income (“adjusted EBITDA”) less capital expenditures at the Company’s operations. |
PROPOSAL 4
APPROVAL, ON AN ADVISORY BASIS, OF THE FREQUENCY OF OUR SAY-ON-PAY VOTES ON NAMED EXECUTIVE OFFICER COMPENSATION
Pursuant to Section 14A of the guidelines. InExchange Act and the calculationsDodd-Frank Act, we are required to provide shareholders with the opportunity to vote, on a non-binding, advisory basis, for their preference as to how frequently to vote on future advisory votes on the compensation of our NEOs we include shares directly(commonly referred to as “Say-on-Pay”). Shareholders may indicate whether they would prefer that the Company conduct future advisory votes on executive compensation once every one, two or three years (commonly referred to as “Say-on-Frequency”).
At our 2011 and 2017 annual meetings, shareholders voted for annual Say-on-Pay advisory votes on NEO compensation. The Company has held advisory Say-on-Pay votes on the compensation of our NEOs at every subsequent annual meeting. We are required to hold a Say-on-Frequency vote every six years.
The Board has determined that an advisory vote on NEO compensation that occurs every year is the most appropriate alternative for the Company and unvested RSUs. We dorecommends shareholders vote for that option. In determining the recommendation that shareholders vote for a frequency of every year, the Board considered that it would allow for frequent input from our shareholders on our compensation philosophy, policies, and practices. Similarly, any shareholder concerns about our NEO compensation program can be expressed through a vote without having to wait two or three years.
The vote on the frequency of Say-on-Pay is advisory only. This means that the Say-on-Frequency vote is not include unexercised stock optionsbinding on the Company, the Board, or performance-based shares.
In June 2014,the Compensation Committee. The Company recognizes shareholders may have different views as to the best approach for the Company. The Board and the Compensation Committee recommendedwill take into account the outcome of the vote; however, when considering the frequency of future advisory votes on executive compensation, the Board may decide it is in the best interests of our shareholders and the BoardCompany to hold an advisory vote on executive compensation more or less frequently than the frequency receiving the most votes cast by our shareholders.
Shareholders may cast a vote on the preferred voting frequency by selecting the option of one year, two years, or three years (or abstain) when voting.
The frequency option – one year, two years, or three years – that receives the most votes “FOR” of all votes cast on the proposal will be the frequency option approved increases to cash retainersby the shareholders.
Required Vote
The advisory vote on the frequency of our Say-on-Pay votes for NEO compensation requires the affirmative vote of a majority of votes cast at the Annual Meeting, whether in person or by proxy. See What votes are required for the ChairmanProposals on page 88. In the event that none of the Board, and for each chairfrequency options – one year, two years, or three years – receives a majority of votes cast on the committees. Dueproposal at the Annual Meeting, whether in person or by proxy, we will deem the frequency option that receives the most affirmative votes of all votes cast on the proposal to these increases in 2014, Mr. Crumley has until June 2017 to comply withbe the stock ownership guidelines.frequency option preferred by the shareholders.
You may vote “ONE YEAR,” “TWO YEARS,” “THREE YEARS,” or “ABSTAIN” on the proposal.
The Board recommends that you vote for the option of “ONE YEAR” as the preferred frequency for advisory votes on the frequency of our Say-on-Pay votes on NEO compensation. | ||||
2023 Proxy Statement 81
Certain Relationships and Related Party Transactions
Transactions with related persons are those that involve our directors, executive officers, director nominees, greater than 5% shareholders, immediate family members of Contents
Non-Management Director Stock Ownershipthese persons, or entities in which one of these persons has a direct or indirect material interest. Transactions that are reviewed as related party transactions by us are transactions that involve amounts that would exceed $120,000 (the current threshold required to be disclosed in the Proxy Statement under SEC and NYSE rules) and certain other transactions. Pursuant to our Code of Conduct, employees and directors have a duty to report any potential conflicts of interest to the appropriate level of management or to the Governance Committee. Our Board and NEOs respond to a quarterly related party transaction questionnaire prepared by our corporate legal department. We then evaluate these quarterly reports along with responses to our annual director and officer questionnaires for any indication of possible related party transactions. Our legal staff is primarily responsible for the development and implementation of processes and controls to obtain information from the directors and executive officers with respect to related party transactions. If a transaction is deemed by us to be a related party transaction, the information regarding the transaction is discussed with the Board. As required under the SEC rules, transactions that are determined to be directly or indirectly material to Hecla or a related party are disclosed in our Proxy Statement. In 2022, we had no related party transactions and, as of December 31, 2015
Director | Annual Retainer ($) | X Annual Retainer | Total Value of Shares to be Held ($) | Shares Held Directly (#) | Shares Held in Directors Trust1 (#) | Total Shares (#) | Total Value of Shares Held by Director ($2.6071) ($)2 | Meets Guidelines | ||||||||||
Bowles* | 66,000 | 3x | 198,000 | 88,263 | 48,233 | 136,496 | 355,859 | Yes | ||||||||||
Crumley | 156,000 | 3x | 468,000 | 99,263 | 74,349 | 173,612 | 452,624 | No | ||||||||||
Nethercutt | 66,000 | 3x | 198,000 | 83.263 | 49,648 | 132,911 | 346,512 | Yes | ||||||||||
Rogers | 66,000 | 3x | 198,000 | 83,263 | 43,396 | 126,659 | 330,213 | Yes | ||||||||||
Stanley | 66,000 | 3x | 198,000 | 83,263 | 43,396 | 126,659 | 330,213 | Yes | ||||||||||
Taylor | 66,000 | 3x | 198,000 | 56,648 | 3 | 67,810 | 124,458 | 324,474 | Yes |
Executive Stock Ownership asthe date of December 31, 2015this Proxy Statement, no related party transactions are proposed.
NEO | Annual Base Salary ($) | X Annual Base Salary | Total Value of Shares to be Held ($) | Shares Held Directly (#) | Unvested RSUs (#) | Total Shares (#) | Total Value of Shares Held by NEO at 12/31/15 ($2.6071)1 ($) | Meets Guidelines | ||||||||||
Baker | 605,000 | 6x | 3,630,000 | 1,925,770 | 362,811 | 2,288,581 | 5,966,560 | Yes | ||||||||||
Sabala | 380,000 | 2x | 760,000 | 261,472 | 250,338 | 511,810 | 1,334,340 | Yes | ||||||||||
Radford | 380,000 | 2x | 760,000 | 255,371 | 265,101 | 520,472 | 1,356,923 | Yes | ||||||||||
McDonald | 275,000 | 2x | 550,000 | 276,103 | 217,686 | 493,789 | 1,287,357 | Yes | ||||||||||
Sienko | 250,000 | 2x | 500,000 | 167,788 | 111,747 | 279,535 | 728,776 | Yes | ||||||||||
Poirier | 226,000 | 2x | 452,000 | 210,644 | 145,124 | 355,768 | 927,523 | Yes |
Political Contributions and Engagement Government policy is one of |
Additional information regarding shares held by the non-management directorsmost powerful external forces affecting Hecla today. New laws and changes to existing laws can fundamentally impact the Company’s operations and the markets where we do business – and in turn, our bottom line, thereby affecting us and our NEOsemployees, retirees, communities, and shareholders. It is important for government leaders to understand the impact of such actions. Because the impact of government policy is so critical to our survival and success, we participate in the political process and advocate in a responsible and constructive manner on issues that advance the Company’s goals and protect shareholder value. We are committed to the highest standard of ethical conduct in our involvement in policymaking and political process. We maintain the Hecla Mining Company Political Action Committee (“Hecla PAC”), which is a forum for our employees and directors to voluntarily contribute to a fund that supports the election of candidates to Congress that support a regulatory and legislative environment constructive to the operation and development of our mines. The Hecla PAC is organized under the provisions of the Federal Election Campaign Act of 1971, as amended. Decisions about contributions to specific federal candidates are made by members of the Hecla PAC. In total, our employees contributed approximately $27,650, and our directors $7,500 to the Hecla PAC in 2022. The Hecla PAC then contributed those funds to federal candidates, state and local parties, and associations who are advocates for the natural resources industry. We file all required Hecla PAC contribution reports with the Federal Election Commission.
Shareholder proposals to be included in next year’s Proxy Statement
We will comply with Rule 14a-8 under the Exchange Act with respect to any shareholder proposals that meet that rule’s requirements. We will review shareholder proposals intended to be included in our Proxy Statement for the 2024 Annual Meeting of Shareholders which are received by us at our principal executive offices located at 6500 N. Mineral Drive, Suite 200, Coeur d’Alene, Idaho 83815-9408, no later than December 13, 2023. Such proposals must be submitted in writing and should be sent to the attention of our Corporate Secretary.
You may contact the Corporate Secretary at our principal executive offices for a copy of the relevant Bylaw provisions regarding the requirements for making shareholder proposals and nominating director candidates.
Security Ownership of Certain Beneficial Owners and Management table on the following page.
Security Ownership of Certain Beneficial Owners and Management
The following table shows the number and percentage of the shares of common stock beneficially owned by each current director and each named executive officer named in the Summary Compensation Table for 2022 beneficially owned as of Hecla, andMarch 24, 2023, our record date for the Annual Meeting, as well as the number owned by all current directors and executive officers as a group, as of March 23, 2016.group. On thatthe record date, all of such persons together beneficially owned an aggregate of lessthan one percent1.3% of the outstanding shares of our common stock. Except as otherwise indicated, the directors, nominees and officers have sole voting and investment power with respect to the shares listed, including shares which the individual has the right to acquire, by exercising stock options but has not done so.
82 www.hecla.com
Other Matters
Title of Class | Shares Beneficially Owned | Percent of Class | ||||||||||||
Name of Beneficial Owner | Number | Nature | ||||||||||||
Phillips S. Baker, Jr. President and CEO | 3,022,163 | (1) | Direct(2) | |||||||||||
48,373 | 401(k) Plan | |||||||||||||
233,032 | RSU(3) | |||||||||||||
1,795,964 | Deferred(4) | |||||||||||||
210,178 | PSU(5) | |||||||||||||
|
| |||||||||||||
Common | 5,309,710 | * | ||||||||||||
Robert D. Brown | 323,134 | Direct(2) | ||||||||||||
Vice President – Corporate Development & Sustainability | — | 401(k) Plan | ||||||||||||
69,511 | RSU(3) | |||||||||||||
39,284 | PSU(5) | |||||||||||||
|
| |||||||||||||
Common | 431,929 | * | ||||||||||||
Michael L. Clary Sr. Vice President and CAO | 64,468 | (6) | Direct(2) | |||||||||||
4,401 | 401(k) Plan | |||||||||||||
77,016 | RSU(3) | |||||||||||||
41,047 | PSU(5) | |||||||||||||
|
| |||||||||||||
Common | 186,932 | * | ||||||||||||
Russell D. Lawlar Sr. Vice President and CFO | 19,801 | Direct(2) | ||||||||||||
8,614 | 401(k) Plan | |||||||||||||
65,000 | RSU(3) | |||||||||||||
43,304 | PSU(5) | |||||||||||||
|
| |||||||||||||
Common | 136,719 | * | ||||||||||||
Lauren M. Roberts Sr. Vice President and COO | 317,717 | Direct(2) | ||||||||||||
8,450 | 401(k) Plan | |||||||||||||
111,507 | RSU(3) | |||||||||||||
339,119 | Deferred(4) | |||||||||||||
64,182 | PSU(5) | |||||||||||||
|
| |||||||||||||
Common | 840,975 | * | ||||||||||||
Catherine J. Boggs Director | 119,425 | Direct(2) | ||||||||||||
110,961 | Indirect(7) | |||||||||||||
|
| |||||||||||||
Common | 230,386 | * | ||||||||||||
George R. Johnson Director | 17,273 | Direct(2) | ||||||||||||
197,379 | Indirect(7) | |||||||||||||
|
| |||||||||||||
Common | 214,652 | * | ||||||||||||
Stephen F. Ralbovsky Director | 20,870 | Direct(2) | ||||||||||||
182,632 | Indirect(7) | |||||||||||||
|
| |||||||||||||
Common | 203,502 | * | ||||||||||||
Charles B. Stanley Director | — | Direct(2) | ||||||||||||
238,765 | Indirect(7) | |||||||||||||
|
| |||||||||||||
Common | 238,765 | * | ||||||||||||
Alice Wong Director | Direct(2) | |||||||||||||
49,287 | Indirect(7) | |||||||||||||
|
| |||||||||||||
Common | 49,287 | * | ||||||||||||
All current directors, director nominees and executive officers as a group (10 individuals) | Common | 7,842,857 | 1.3 | % |
* |
Shares Beneficially Owned | ||||||||||
Name of Beneficial Owner | Title of Class | Number | Nature | Percent of Class | ||||||
Phillips S. Baker, Jr. | 1,862,4591 | Direct2 | ||||||||
President and CEO | 362,811 | RSU3 | ||||||||
674,117 | Deferred Shares4 | |||||||||
356,433 | Performance-based Shares5 | |||||||||
Common | 3,255,820 | * | ||||||||
Dr. Dean W.A. McDonald | 340,370 | Direct2 | ||||||||
Senior Vice President – Exploration | 217,686 | RSU3 | ||||||||
Common | 558,056 | * | ||||||||
Don Poirier | 295,708 | Direct2 | ||||||||
Former Vice President – Corporate Development | 145,124 | RSU3 | ||||||||
Common | 440,832 | * | ||||||||
Lawrence P. Radford | 377,650 | Direct2 | ||||||||
Senior Vice President – Operations | 265,101 | RSU3 | ||||||||
Common | 642,751 | * | ||||||||
James A. Sabala | 374,3426 | Direct2 | ||||||||
Senior Vice President and Chief Financial Officer | 250,338 | RSU3 | ||||||||
Common | 624,680 | * | ||||||||
David C. Sienko | 221,369 | Direct2 | ||||||||
Vice President and General Counsel | 111,747 | RSU3 | ||||||||
Common | 333,116 | * | ||||||||
Ted Crumley | 99,263 | Direct2 | ||||||||
Director | 74,349 | Indirect7 | ||||||||
Common | 173,612 | * | ||||||||
George R. Johnson | ||||||||||
Director | Common | 2,010 | Indirect7 | * | ||||||
Stephen F. Ralbovsky | ||||||||||
Director | Common | 2,010 | Indirect7 | * | ||||||
George R. Nethercutt, Jr. | 83,263 | Direct2 | ||||||||
Director | 49,648 | Indirect7 | ||||||||
Common | 132,911 | * | ||||||||
Terry V. Rogers | 83,263 | Direct2 | ||||||||
Director | 43,396 | Indirect7 | ||||||||
Common | 126,659 | * | ||||||||
Charles B. Stanley | 83,263 | Direct2 | ||||||||
Director | 43,396 | Indirect7 | ||||||||
Common | 126,659 | * | ||||||||
Dr. Anthony P. Taylor | 54,148 | Direct2 | ||||||||
Director | 2,500 | IRA | ||||||||
67,810 | Indirect7 | |||||||||
Common | 124,458 | * | ||||||||
All current directors, nominee directors and officers as a group | ||||||||||
(15 individuals) | Common | 6,754,617 | 1.8% |
Represents beneficial ownership of less than one percent, based upon |
Includes |
2023 Proxy Statement 83
Other Matters
“Direct” means shares held of record and any shares beneficially owned through a trust, broker, financial institution, or other nominee, and with respect to which the officer or director has sole or shared voting power. |
“RSU” means restricted stock units awarded under the |
“Deferred Shares” means stock that has vested or been awarded but is deferred until a distributable event under the terms of the KEDCP. See Nonqualified Deferred Compensation for 2022 on page 69. |
“ |
Includes 7,566 shares |
“Indirect” means shares credited to each independent director, all of which are held indirectly in trust pursuant to our Stock Plan for Nonemployee Directors. Each director disclaims beneficial ownership of all shares held in trust under the stock plan. SeeCompensation of Non-Management Directors on page |
To our knowledge, as of March 23, 2016,24, 2023, the only “beneficial owners” (as such term is defined in Rule 13d-3 under the Exchange Act) of more than 5% of our common stock entitled to vote at the Annual Meeting are shown in the table below:
Title of Class | Name & Address of Beneficial Owner | Amount & Nature of Beneficial Ownership | Percent of Class | ||||||
Common | Van Eck Associates Corporation1 | 47,063,834 | 12.4 | % | |||||
666 Third Ave. – 19thFloor | |||||||||
New York, NY 10017 | |||||||||
Common | The Vanguard Group, Inc.2 | 25,273,086 | 6.6 | % | |||||
100 Vanguard Blvd. | |||||||||
Malvern, PA 19355 | |||||||||
Common | BlackRock, Inc.3 | 20,427,903 | 5.4 | % | |||||
55 East 52ndStreet | |||||||||
New York, NY 10055 |
Title of Class | Name & Address of Beneficial Owner | Amount & Nature of Beneficial Ownership | Percent of Class | |||||||
Common | The Vanguard Group, Inc.(1) 100 Vanguard Blvd. Malvern, PA 19355 | 56,328,352 | 9.4 | % | ||||||
Common | Van Eck Associates Corporation(2) 666 Third Ave. – 9th Floor New York, NY 10017 | 55,225,222 | 9.2 | % | ||||||
Common | BlackRock, Inc.(3) 55 East 52nd Street New York, NY 10055 | 42,687,071 | 7.1 | % | ||||||
Common | Wheaton Precious Metals Corp.(4) Suite 3500 – 1021 Hastings St. Vancouver, British Columbia V6E 0C3 Canada | 34,800,989 | 5.8 | % | ||||||
Common | Dimensional Fund Advisors LP(5) Building One 6300 Bee Cave Rd. Austin, TX 78746 | 32,853,571 | 5.5 | % |
Based solely on a Schedule 13G/A filed on February |
(2) | Based solely on a Schedule 13G/A filed on February 14, 2023, with the SEC by Van Eck Associates Corporation. Van Eck Associates Corporation has sole voting and dispositive power with respect to all shares. |
Based solely on a Schedule 13G/A filed on January |
(4) | On July 4, 2022, Wheaton Precious Metals Corp. (“Wheaton”) entered into a Stream Termination Agreement (the “Stream Termination Agreement”) with the Company, pursuant to which Wheaton agreed to terminate its silver streaming interest in the Keno Hill silver mine owned by Alexco Resource Corp. (“Alexco”), in connection with the acquisition of Alexco by the Company. Pursuant to the terms of the Stream Termination Agreement, the Company issued 34,800,989 shares of common stock to Wheaton Precious Metals Corp. upon the closing of the Company’s acquisition of Alexco on September 7, 2022. Wheaton filed a Schedule 13G on September 13, 2022, with the SEC. Wheaton has sole voting power and sole dispositive power with respect to the 34,800,989 shares. |
(5) | Based solely on a Schedule 13G/A filed on February 10, 2023, with the SEC by Dimensional Fund Advisors LP. Dimensional Fund Advisors LP has sole voting power with respect to 32,472,432 shares and sole dispositive power with respect to 32,853,571 shares. |
84 www.hecla.com
FREQUENTLY ASKED QUESTIONS
How can I attend the Annual Meeting?
Attending the Annual Meeting in Person
When: Tuesday,May 23, 2023, at 10:00 a.m. PDT Where: Eric A. Johnston Auditorium at the Northwest Museum of Arts & Culture, located at 2316 W. 1st Avenue, Spokane, Washington |
Table of ContentsThis year, the Annual Meeting will be conducted in-person and virtually via live webcast. All shareholders are invited to participate either in person or online. If participating in person we look forward to seeing you in Spokane, Washington. To participate in the Annual Meeting, please arrive at the Eric A. Johnson Auditorium by 9:45 a.m. Pacific Daylight Time and present yourself at the registration desk. Shareholders wishing to vote in-person during the Annual Meeting may pick up a ballot when they check in to the Annual Meeting.
Attending the Virtual Meeting
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires our directors, executive officers and holders of more than 10% of our common stock to file with the SEC reports regarding their ownership and changes in their ownership of our stock. These persons are required by the SEC to furnish us with copies of all Section 16(a) forms they file.
Based solely on our review of copies of such forms, or written representations from certain reporting persons that no such forms were required, we believe that during the calendar year ended December 31, 2015, all filing requirements applicable to our officers, directors and greater than 10% owners of our common stock were complied with.
When:Tuesday,May 23, 2023, at 10:00 a.m. PDT Where:Live webcast online at http://www.virtualshareholdermeeting.com/HL2023 |
GENERAL INFORMATION ABOUT THE MEETING
Record Date, Shares Outstanding and Quorum
If you were a holder of Hecla common stock either as a“shareholder of record”or asparticipating virtually, participants are encouraged to submit questions during the“beneficial owner”of shares held in street name as of the Record Date, you may vote your shares Annual Meeting by visiting www.virtualshareholdermeeting.com/HL2023. Your attendance at the Annual Meeting does not automatically revoke a proxy previously submitted by you and we encourage shareholders to cast their votes by proxy even if they intend to participate in the Annual Meeting. Shareholders wishing to vote electronically during the Annual Meeting must follow the instructions for voting by logging in to www.virtualshareholdermeeting.com/HL2023.
To participate in the Annual Meeting, you will need the 16-digit control number included on your proxy card or your voting instruction form. The Annual Meeting will begin promptly at 10:00 a.m. PDT and we encourage you to access the website prior to the start time. Online access will be available beginning at 9:45 a.m. PDT.
The virtual Annual Meeting platform is fully supported across web browsers (Microsoft Edge, Firefox, Chrome, and Safari) and devices (desktops, laptops, tablets, and cell phones) running the most updated version of applicable software and plugins. Participants should ensure they have a strong Internet connection wherever they intend to participate in the virtual Annual Meeting. Participants should also allow plenty of time to login to ensure that they can hear streaming audio prior to the start of the Annual Meeting.
If you wish to submit a question, you may do so in two ways. If you want to ask a question before the meeting, then beginning at 10:00 a.m. PDT on May 19, 2023, and until 11:59 p.m. PDT on May 22, 2023, you may log into www.proxyvote.com and enter your 16-digit control number. Once past the login screen, click on “Question for Management,” type in your question, and click “Submit.” Alternatively, if you want to submit your question during the meeting, log into the virtual meeting platform at www.virtualshareholdermeeting.com/HL2023, type your question into the “Ask a Question” field, and click “Submit.”
Questions pertinent to meeting matters will be answered during the meeting, subject to time constraints. Questions regarding personal matters, including those related to other matters that are not pertinent to the meeting, may not be answered. Any questions pertinent to meeting matters that cannot be answered during the meeting due to time constraints can be sent to our Company email address at hmc-info@hecla-mining.com. We will answer your questions as soon as practical after the meeting.
If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the Virtual Shareholder Meeting log-in page.
2023 Proxy Statement 85
Frequently Asked Questions
What is a “shareholder of record”?
A shareholder of record or registered shareholder (“record owner”) is a shareholder whose ownership of Hecla stock is reflected directly on the books and records of our transfer agent, American Stock Transfer & Trust Company. If you hold Hecla stock through a bank, broker, or other intermediary, you are not a shareholder of record. Instead, you hold your stock in “street name,” and the record owner of your shares is usually your bank, broker, or other intermediary. If you are not a record owner, please understand that Hecla does not know that you are a shareholder, or how many shares you own.
I want to attend the 2023 Annual Meeting. What procedures must I follow?
The Annual Meeting will be conducted in-person and virtually. All shareholders will be able to attend the Annual Meeting via webcast by entering the 16-digit control number included on the Notice of Internet Availability of Proxy Materials, on your proxy card, or on the instructions that accompanied your proxy materials at www.virtualshareholdermeeting.com/HL2023 (“Annual Meeting Website”). If you do not have a control number, you will be able to register as a guest; however, you will not be able to vote or submit questions before or during the meeting.
No recording of the Annual Meeting is allowed, including audio and video recording.
What can I do if I need technical assistance during the Annual Meeting?
If you encounter any difficulties accessing the annual Meeting webcast, please call the technical support number that will be posted on the Annual Meeting Website log-in page.
Are there Rules of Conduct for the Annual Meeting?
Yes, the Rules of Conduct for the Annual Meeting will be available on the Annual Meeting Website on the date of the Annual Meeting, and at the place of the in-person Annual Meeting. The Rules of Conduct will provide information regarding the rules and procedures for participating in the Annual Meeting.
What is the “record date” for the Annual Meeting?
March 24, 2023
How many shares of Hecla stock are outstanding?
As of the Record Date, 380,842,223March 24, 2023, there were 602,191,096 shares of common stock were outstanding and entitled to vote at the Annual Meeting.be voted. Shares of our common stock that are held by us in our treasury are not counted as shares outstanding and will not be voted. Each shareholder has one vote for each share of common stock held as of the Record Date.
I understand that a “quorum” of shareholders is required for Hecla to transact business at the Annual Meeting. What constitutes a quorum?
A quorum must be present in order for business to be conducted at the Annual Meeting. A quorum consists of the presence at the Annual Meeting, in personin-person or represented by proxy, of a majority of the outstanding shares of our common stock as of the Record Date. Shares represented by proxies marked “Abstain” and “broker non-votes” are counted in determining whether a quorum is present for the transaction of business at the Annual Meeting. A
Which Hecla shares will be entitled to vote at the Annual Meeting?
Hecla’s common stock ($0.25 par value capital stock) is the only class of security entitled to vote at the Annual Meeting. Each record owner and each shareholder who holds stock in street name at the close of business as of the record date is entitled to one vote for each share held at the meeting, or any adjournment or postponement.
How can I vote my shares?
If your shares are held in your name, you have the right to vote your shares at the Annual Meeting by following the instructions listed below. If your shares are held in a brokerage account or by another nominee, you are
86 www.hecla.com
Frequently Asked Questions
considered the beneficial owner of shares held in street name. Since a beneficial owner is not the shareholder of record, you may not vote your shares at the Annual Meeting unless you obtain a “legal proxy” from your broker or nominee that holds your shares, giving you the right to vote the shares at the Annual Meeting.
Whether you hold shares directly as a shareholder of record or beneficially in street name, you may vote without participating in the Annual Meeting. You may vote by granting a proxy or, for shares held beneficially in street name, by submitting voting instructions to your broker or nominee. In most cases, you will be able to do this by using the Internet, by telephone, or by mail if you received a printed set of the Proxy Materials.
To vote by mail:
Mark, sign, and date your proxy card; and
Return your proxy card in the enclosed postage-paid envelope.
To vote by proxy over the Internet:
Have your proxy card or Notice available;
Log on to the Internet and visit the website noted on your proxy card or Notice (www.proxyvote.com);
Follow the instructions provided; and
Do not mail your proxy card.
To vote by proxy by telephone:
Have your proxy card available;
• | Call the toll-free number listed on your proxy card (1-800-690-6903); |
Follow the recorded instructions; and
Do not mail your proxy card.
To vote during the Annual Meeting:
Shares may be voted at the meeting by completing a ballot online during the meeting at www.virtualshareholdermeeting.com/HL2023;and
• | Shares may be voted in-person at the meeting by completing a ballot during the meeting. |
To vote your 401(k) Plan shares:
If you participate in the Hecla Mining Company Capital Accumulation Plan (“401(k) Plan”) and hold shares of our common stock in your 401(k) Plan account as of the Record Date, you will receive a request for voting instructions from the plan trustee (“Vanguard”) with respect to your 401(k) Plan shares. You are entitled to direct Vanguard how to vote your 401(k) Plan shares. If you do not provide voting instructions to Vanguard by 11:59 p.m., Eastern Daylight Time, on May 18, 2023, the Hecla shares in your 401(k) Plan account will be voted by Vanguard in the same proportion as the shares held by Vanguard for which voting instructions have been received from other participants in the 401(k) Plan.
May I change or revoke my proxy?
Yes. If you are a shareholder of record, you may revoke your proxy and change your vote at any time before your proxy is voted at the Annual Meeting, in any of the following ways:
By sending a written notice of revocation to our Corporate Secretary, if such notice is received prior to the vote at the Annual Meeting, at our principal executive offices: Hecla Mining Company, Attn: Corporate Secretary, 6500 N. Mineral Dr., Suite 200, Coeur d’Alene, ID 83815-9408;
By submitting a later-dated proxy to our Corporate Secretary prior to the vote at the Annual Meeting; or
• | By voting online during the meeting if you are a “shareholder of record” or a “beneficial owner.” |
If you hold your shares in street name, you should contact your broker for information on how to revoke your voting instructions and provide new voting instructions.
If you hold your shares in the 401(k) Plan, you may revoke your previously provided voting instructions by filing with Vanguard either a written notice of revocation or a properly executed proxy bearing a later date prior to the deadline for voting your 401(k) Plan shares. If you hold your Hecla shares outside of the 401(k) Plan, you may vote those shares separately.
2023 Proxy Statement 87
Frequently Asked Questions
Will my votes be confidential?
Yes. All shareholder meeting proxies, ballots, and tabulations that identify individual shareholders are kept confidential and are not available for examination. In addition, the identity or the vote of any shareholder is not disclosed except as required by law.
What is “broker non-vote” occursdiscretionary voting”?
This refers to the NYSE rule allowing brokers to vote their customers’ shares on certain “routine” matters in the Proxy Statement at the brokers’ discretion when athey have not received timely voting instructions from their customers. The NYSE rules on broker discretionary voting prohibit banks, brokers, and other intermediaries from voting uninstructed shares on certain “routine” matters, including the election of directors. Therefore, if you hold your stock in street name and you do not instruct your bank, broker, or other nominee holding shares forintermediary how to vote on any proposal that is considered a beneficial owner does“routine “ matter, no votes will be cast on your behalf with respect to such proposals. It is important that you cast your vote.
Are abstentions and broker non-votes counted as votes cast?
No. Abstentions and broker non-votes are not counted as votes cast and will have no effect on the outcome of the vote.
How can I contact Hecla’s transfer agent?
Contact our transfer agent either by writing American Stock Transfer & Trust Company, 6201 15th Avenue, Brooklyn, New York 11219, or by telephoning 1-800-937-5449.
What happens if I do not vote on a particular proposal becauseon the brokerproxy card?
If you properly sign and return your proxy card or nominee does not have discretionary voting powercomplete your proxy via the telephone or Internet, your shares will be voted as you direct. If you sign and has not received instructions from the beneficial owner.
Votes Required for the Proposals
Under NYSE rules, if our shares are held in “street name” and youreturn your proxy card but do not indicatespecify how you wish to vote, your broker is only permitted to exercise its discretion to votewant your shares on certain “routine” matters. Proposal 1 (Election of Directors), Proposal 2 (Approval of Amendments to the Company’s Certificate of Incorporation and Bylaws to Remove Certain 80% Supermajority Voting Provisions), Proposal 3 (Approval of Amendments to the Company’s Certificate of Incorporation and Bylaws to Permit Shareholders to Call Special Meetings of Shareholders Under Certain Circumstances), and Proposal 5 (Approval of Executive Compensation), are not “routine” matters, whereas Proposal 4 (Ratification of Appointment of BDO USA, LLP) is a “routine” matter. Accordingly, if you do not direct your broker how to vote for a director in Proposal 1 or how to vote for Proposals 2, 3 and 5, your broker is not permitted to exercise discretion and is not permitted to vote your shares on such matters. This is called a “broker non-vote.”
Proposal 1 – Election of Directors. Pursuant to our Bylaws, each directorvoted they will be elected by a majority of votes cast at the Annual Meeting, whether in person or by proxy. A properly executed proxy card marked “WITHHOLD” with respect tovoted FOR (i) the election of directors will not be voted (and therefore will not be considered a vote cast) and will not count “FOR” the nominee or nominees for which the vote was withheld. Any shares not voted (whether by abstentions, broker non-votes or otherwise) have the same impact as an instruction to withhold authority in the election of directors, and will not affect the election of directors.
You may vote “FOR” the nominees for electionDirector as directors, or you may “WITHHOLD” authority to vote for one or moreset forth under Election of Class I Directors; (ii) ratification of the nominees.
Please note that this election of directors is an uncontested election, meaning that there is only one candidate for each of the three directorships to be elected at the Annual Meeting. In the future, if an election for a board seat is contested at an annual or special meeting, the candidate who receives the most “FOR” votes would be the winner of the election (assuming a quorum is present at the meeting) because instructions to withhold authority, abstention and broker non-votes are not considered to be votes cast for purposes of determining a majority vote under our Bylaws. As a result, all director elections under our Bylaws are effectively determined in the same manner as would be the case under a “plurality” voting standard.
Proposal 2 – Approval of Amendments to the Company’s Certificate of Incorporation and Bylaws to Remove Certain 80% Supermajority Voting Provisions. Approval of this proposal requires the affirmative vote of 80% of our outstanding shares of common stock. Abstentions and broker non-votes have the effect of a vote against this proposal.
Proposal 3 – Approval of Amendments to the Company’s Certificate of Incorporation and Bylaws to Permit Shareholders to Call Special Meetings of Shareholders Under Certain Circumstances. Approval of this proposal requires the affirmative vote of 80% of our outstanding shares of common stock. Abstentions and broker nonvotes have the effect of a vote against this proposal.
Proposal 4 – Ratification of the Appointment of BDO USA, LLP as Independent Auditors. This proposal requires the affirmative vote of a majority of votes cast at the Annual Meeting, whether in person or by proxy. Abstentions or shares that are not voted are not counted as cast for this purpose.
The appointment of ourthe independent registered public accounting firmaccountants; (iii) approval, on an advisory basis, of our executive compensation; and (iv) approval, on an advisory basis, of the frequency of our Say-on-Pay votes for calendar year 2016executive officer compensation (One-Year).
What is considered a “routine” matter and brokers that are not directed how to vote are permitted to vote shares held in street name for their clients on this item.
You may vote “FOR,” “AGAINST,” or “ABSTAIN” on the proposal to ratify the appointment of BDO USA, LLP as our independent registered public accounting firm for 2016.
Proposal 5 – Advisory Vote to Approve Executive Compensation. The advisory vote on executive compensation requires the affirmative vote of a majority of votes cast at the Annual Meeting, whether in person or by proxy. Abstentions or shares that are not voted are not counted as cast for this purpose.
Even though your vote is advisory and therefore will not be binding on the Company, the Board’s Compensation Committee will review the voting results and take them into consideration when making future decisions regarding executive compensation.
A “proxy” is your legal appointment in a written document of another person to vote the shares that you own in accordance with your instructions. The persons you appoint to vote your shares are also called proxies. We have designated Phillips S. Baker, Jr., our President and CEO, and Michael B. White, our Corporate Secretary, asproxiesas proxies for the Annual Meeting. When you sign the proxy card, you appoint Phillips S.each of Messrs. Baker Jr. and Michael B. White as your representatives at the Annual Meeting. As your representatives, they will vote your shares at the Annual Meeting (including any adjournment or postponement) as you have instructed them on your proxy card.
Proxies Submitted but not VotedWhat Votes are Required for the Proposals?
If you properly sign and return your proxy card or complete your proxy via the telephone or Internet, your shares will be voted as you direct. If you sign and return your proxy but do not specify how you want your shares voted they will be voted FOR the election of all nominees for Director as set forth under “Election of Directors,” FOR the amendments to the Company’s Certificate of Incorporation and Bylawsto remove certain 80% supermajority voting provisions, FOR the amendments to the Company’s Certificate of Incorporation and Bylaws to permit shareholders to call special meetings of shareholders under certain circumstances, FOR ratification of the appointment of the independent registered public accountants, and FOR the advisory vote on executive compensation,
IfUnder NYSE rules, if your shares are held in yourstreet name and you have the rightdo not indicate how you wish to vote, in personyour broker is only permitted to exercise its discretion to vote your shares on certain “routine” matters. Proposal 2 (Ratification of the Appointment of BDO USA, LLP) is a “routine” matter. Proposal 1 (Election of Class I Directors), Proposal 3 (Approval, on an advisory basis, of our named executive officer compensation), and Proposal 4 (Approval, on an advisory basis, of the frequency of our Say-on-Pay votes for named executive officer compensation) are “non-routine” matters. Accordingly, if you do not direct your broker how to vote for Proposals 1, 3, or 4, your broker is not permitted to exercise discretion and is not permitted to vote your shares on such matters. This is called a “broker non-vote.”
Proposal 1 – Election of two Class I Directors. Pursuant to our Bylaws, each director will be elected by the affirmative vote of a majority of votes cast at the Annual Meeting. If your shares are held in a brokerage accountMeeting, whether in-person or by anotherproxy. Under a majority of votes cast standard, the shares voted “for” a nominee youmust exceed the number voted “against” that nominee. Shareholders may vote “FOR,” “AGAINST” or “ABSTAIN” with respect to this proposal. Abstentions and broker non-votes are not counted as votes cast, and thus will have no effect on the outcome of the vote. A properly
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Frequently Asked Questions
executed proxy card marked “AGAINST” with respect to the election of directors will have an effect on the outcome of the vote. If the votes cast “against” an incumbent director exceed the number of votes cast “FOR” the director, the director will not be elected, will remain on the board as a holdover director and must stand for election at the next annual meeting of shareholders, absent his or her earlier resignation or removal. See Majority Voting for Directors and Director Resignation Policy on page 15 for a description of our director resignation policy.
You may vote “FOR,” “AGAINST,” or “ABSTAIN” on each nominee for election as a director.
Proposal 2 – Ratify the Appointment of BDO USA, LLP as our Independent Registered Public Accounting Firm for 2023. Under the Sarbanes-Oxley Act of 2002, the Audit Committee has the sole authority to appoint the independent registered public accounting firm for the Company. However, the Board feels that it is important for the shareholders to approve the selection of BDO USA, LLP. This proposal requires the affirmative vote of a majority of votes cast at the Annual Meeting, whether in-person or by proxy. Abstentions and broker non-votes are not counted as votes cast, and thus will have no effect on the outcome of the vote. Votes marked “AGAINST” will have an effect on the outcome of the vote. The appointment of our independent registered public accounting firm for calendar year 2023 is considered the beneficial owner ofa “routine” matter and brokers that are not directed how to vote are permitted to vote shares held in street name. Sincename for their customers on this proposal.
You may vote “FOR,” “AGAINST,” or “ABSTAIN” on the proposal to ratify the appointment of BDO USA, LLP as our independent registered public accounting firm for 2023.
Proposal 3 – Approval, on an Advisory Basis, of our Named Executive Officer Compensation. For more information on approval of our executive compensation see “Proposal 3 – Approval, on an Advisory Basis, of our Named Executive Officer Compensation” beginning on page 34. The advisory vote on name executive officer compensation will require the affirmative vote of a beneficial owner is not the shareholdermajority of record, you may not vote these shares in personvotes cast at the Annual Meeting, unless you obtainwhether in-person or by proxy. Under a “legal proxy” frommajority of votes cast standard, the shares voted “FOR” Proposal 3 must exceed the number voted “AGAINST” Proposal 3 for the proposal to be approved. Abstentions and broker non-votes are not counted as votes cast for this purpose and will have no effect on the outcome of the vote. Votes marked “AGAINST” will have an effect on the outcome of the vote. Even though your brokervote is advisory and therefore will not be binding on the Company, the Board’s Compensation Committee will review the voting results and take them into consideration when making future decisions regarding executive compensation.
You may vote “FOR,” “AGAINST,” or nominee that holds your shares, giving you“ABSTAIN” on the rightproposal to approve the compensation of our NEOs.
Proposal 4 – Approval, on an Advisory Basis, of the Frequency of our Say-on-Pay Votes on Named Executive Officer Compensation. For more information on approval of our advisory vote on frequency of our Say-on-Pay vote for named executive officer compensation, see “Proposal 4 – Approval, on an Advisory Basis, of the sharesFrequency of our Say-on-Pay Votes for Named Executive Officer Compensation” beginning on page 81. Proposal 4 will require the affirmative vote of a majority of votes cast at the Annual Meeting.
Whether you hold shares directlyMeeting, whether in-person or by proxy. Abstentions and broker non-votes are not counted as votes cast for this purpose and will have no effect on the outcome of the vote. In the event that none of the frequency options – one year, two years, or three years – receives a shareholdermajority of record or beneficially in street name, you may vote without attendingvotes cast on the proposal at the Annual Meeting. You may voteMeeting, whether in-person or by granting a proxy, or, for shares held beneficially in street name,we will deem the frequency option that receives the most affirmative votes of all votes cast on the proposal to be the frequency option preferred by submitting voting instructions to your broker or nominee. In most cases, youthe shareholders. Brokers will not be able to do this by using the Internet, by telephone, or by mailcast votes if you received a printed set of the Proxy Materials.
To vote by mail:
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To vote by proxy over the Internet:
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To vote by proxy by telephone:
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To vote in person if you are a registered shareholder of record:
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To vote in person if you hold your shares in “street name” (through a broker, financial institution or other nominee):
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To vote your 401(k) Plan shares:
If you participate in the Hecla Mining Company Capital Accumulation Plan and hold shares of our common stock in your plan account as of the Record Date, you will receive a request for voting instructions from the plan trustee (“Vanguard”) with respect to your plan shares. You are entitled to direct Vanguard how to vote your plan shares. If youclients do not provide voting instructions to Vanguardon this proposal. Even though your vote is advisory and therefore will not be binding on the Company, the Board’s Compensation Committee will review the voting results and take them into consideration when making future decisions regarding the frequency of advisory votes on named executive officer compensation.
You may vote for “ONE YEAR,” TWO YEARS,” or “THREE YEARS” on the proposal.
Discretionary voting by 11:59 p.m., Eastern Daylight Time,proxies on May 18, 2016,other matters. Aside from the Hecla shares in your plan account will be voted by Vanguard in the same proportion as the shares held by Vanguard for which voting instructionsproposals discussed above, no other proposals have been received fromtimely submitted in accordance with our Bylaws, and we do not know of any other participants in the plan.
The deadline for voting by telephone or electronically is 11:59 p.m., Eastern Time, on May 18, 2016. If you are a registered shareholder and attend the meeting, youproposal that may deliver your completed proxy card in person. “Street name” shareholders who wish to votebe presented at the meeting will need to obtain a proxy form from the institution that holds their shares.
If you are a shareholder of record, you may revoke your proxy and change your vote atAnnual Meeting. However, if any time before your proxyother business is votedproperly presented at the Annual Meeting, your proxy gives authority to Phillips S. Baker, Jr., and Michael B. White to vote on such matters at their discretion.
2023 Proxy Statement 89
Frequently Asked Questions
Assuming there is a proper quorum of shares represented at the Annual Meeting, how many shares are required to approve the proposals being voted upon in any of the following ways:this Proxy Statement?
Proposal | Vote Required |
as votes cast? | Is broker discretionary voting allowed? | |||
Election of | Majority of votes cast | No | No | |||
Ratify the | Majority of votes cast | No | Yes | |||
Advisory Vote on Executive Compensation * | Majority of votes cast | No | No | |||
Advisory Vote on Frequency of Say-on-Pay Votes on Named Executive Officer * | Majority of votes cast | No | No |
* | Advisory and non-binding |
Hecla Mining CompanyAttn: Corporate Secretary6500 N. Mineral Drive, Suite 200Coeur d’Alene, ID 83815-9408
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If you hold your shares in street name, you should contact your broker for information on how to revoke your voting instructions and provide new voting instructions.
If you hold your shares in the Hecla Mining Company Capital Accumulation Plan, you may revoke your previously provided voting instructions by filing with Vanguard either a written notice of revocation or a properly executed proxy bearing a later date prior to the deadline for voting plan shares. If you hold your Hecla shares outside of the plan, you may vote those shares separately.
We will bear all costs and expenses relating to the solicitation of proxies, including the costs of preparing, assembling, printing, mailing and distributing these Proxy Materials. We have hired Broadridge to assist us in mailing these Proxy Materials. Additionally, we have retained Morrow & Co., LLC, 470 West Ave., Stamford, Connecticut to assist in the solicitation of votes for an estimated fee of $8,000, plus reimbursement of certain out-of-pocket expenses. Solicitations may be made personally or by mail, facsimile, telephone, or via the Internet. However, if you choose to access the Proxy Materials over the Internet, youare responsible for any Internet access charges you may incur. Arrangements will be made with brokerage firms and other custodians, nominees and fiduciaries for forwarding solicitation materials to the beneficial owners of the shares of common stock held by such persons, and we will reimburse such brokerage firms, custodians, nominees and fiduciaries for reasonable out-of-pocket expenses incurred by them in connection with such activities.
Resultsresults of the Annual MeetingMeeting?
Preliminary voting results will be announced at the Annual Meeting. We will publish finalthe results in a Current Report on Form 8-K that we expect to file with the SEC within four business days of the Annual Meeting. After the Form 8-K is filed, you may obtain a copy by visiting the SEC’s website at www.sec.gov,www.sec.gov/edgar, visiting our website at www.hecla-mining.comwww.hecla.com under “Investors,” and then selecting “Annual Reports & Filings,” or contacting our Investor Relations Department by writing to Investor Relations Department, Hecla Mining Company, 6500 N. Mineral Dr., Suite 200, Coeur d’Alene, ID 83815-9408 or by sending an email to hmc-info@hecla-mining.com.
Annual ReportI received a Notice of Internet Availability of Proxy Materials. What does this mean?
OurConsistent with widespread practice and in accordance with SEC rules, Hecla is distributing proxy materials to some shareholders over the Internet by sending a Notice of Internet Availability of Proxy Materials (“Notice”) that explains how to access our Proxy Materials and vote online. If you received a Notice and would like a printed copy of the proxy materials (including the Annual Report, Proxy Statement, and a proxy card in the case of record owners, or a voting instruction form in the case of shareholders holding shares in street name), please follow the instructions included in your Notice.
I received my proxy materials in hard copy. How may I arrange to Shareholders, consistingreceive electronic delivery of our Form 10-K for the year ended December 31, 2015, and other information, is being made available to shareholders with this Proxy Statement. Shareholders may obtain a copy of our Annual Report for the calendar year ended December 31, 2015, without cost, by written or oral request to:
Hecla Mining CompanyAttention: Jeanne DuPont6500 N. Mineral Drive, Suite 200Coeur d’Alene, Idaho 83815-9408Telephone: 208-769-4100
You can also access our SEC filings, including ourMaterials, Annual Reports, on Form 10-K,News Releases, and all amendments thereto, ondocuments filed with the SEC website at https://www.sec.gov/edgar.shtml orSEC?
We want to communicate with you in the way that is most convenient for you. Our Proxy Materials are available on our website at http://www.hecla-mining.com.
Householdingwww.hecla.com. Instead of receiving paper copies of next year’s Proxy Materials by mail, you can elect to receive an email message that will provide a link to those documents online. By opting to access your Proxy Materials online, you will:
gain faster access to your Proxy Materials;
save us the cost of producing and mailing documents to you; and
help preserve environmental resources.
If you are a shareholder of record, you may request and consent to electronic delivery of future Proxy Materials by following the instructions on your proxy card or by visiting our website at www.hecla.com under “Investors,” and then selecting “Electronic Proxy Request.” If your shares are held in street name, please contact your broker, and ask about the availability of electronic delivery. If you select electronic delivery, we will discontinue mailing the Proxy Materials to you beginning next year and you will be sent an email message notifying you of the Internet address or addresses where you may access the Proxy Materials. You can receive a free paper or email copy of this year’s Proxy Materials by requesting prior to May 9, 2023. If you would like to request a copy of the Proxy Materials for this and/or future shareholder meetings, you may (i) visit www.proxyvote.com, (ii) call 1-800-579-1639, or (3) send an
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Frequently Asked Questions
email to sendmaterial@proxyvote.com. If sending an email, please include your control number (indicated on your Notice) in the subject line. Your consent to electronic delivery will remain in effect until you revoke it. If you selected electronic delivery last year, we would not mail the Proxy Materials to you this year and you will receive an email message with the Internet address where you may access the Proxy Materials for the current year.
Shareholders may also elect to receive notice of our filings with the SEC, annual reports, and news releases by email. You may sign up for this service by visiting our website at www.hecla.com under “News & Media” and selecting “Subscribe.”
What is “householding” and does Hecla do this?
Many brokerage firms, financial institutions and transfer agents have instituted “householding” procedures for beneficial owners and shareholders of record. Householding is when a single copy of our Proxy Materials is sent to a household in which two or more shareholders reside if they appear to be members of the same family. This practice is designed to reduce duplicate mailings and save significant printing and postage costs, as well as natural resources.
If you are a beneficial owner, you may have received householding information from your broker, financial institution, or other nominee shareholder in the past. Please contact the shareholder of record directly if you have questions, require additional copies of our Proxy Materials,or wish to revoke your decision to household and thereby receive multiple copies. You should also contact the shareholder of record if you wish to institute householding. These options are available to you at any time.
Shareholders of record who share an address and would like to receive a separate copy of our Proxy Materials for future annual meetings, or have questions regarding the householding process, may contact our transfer agent, American Stock Transfer & Trust Company, either by written request or by telephone at the address and telephone number listed above.at: American Stock Transfer & Trust Company, 6201 15th Avenue, Brooklyn, New York 11219 – Telephone: 1-800-937-5449. By contacting American Stock Transfer & Trust Company, shareholders of record sharing an address can also request delivery of multiple copies of our Proxy Materials in the future.
Electronic DeliveryWho is making this proxy solicitation and approximately how much will these solicitation activities cost?
We will bear all costs and expenses relating to the solicitation of proxies, including the costs of preparing, assembling, printing, mailing, and distributing these Proxy Materials. We have hired Broadridge to assist us in mailing these Proxy Materials. Additionally, we have retained Morrow Sodali LLC, 333 Ludlow Street, Fifth Floor, South tower, Stamford, Connecticut to assist in the solicitation of votes for an estimated fee of $9,000, plus reimbursement of certain out-of-pocket expenses. Solicitations may be made personally or by mail, facsimile, telephone, or via the Internet. However, if you choose to access the Proxy Materials over the Internet, you are responsible for any Internet access charges you may incur. Arrangements will be made with brokerage firms and other custodians, nominees, and fiduciaries for forwarding solicitation materials to the beneficial owners of the shares of common stock held by such persons, and we will reimburse such brokerage firms, custodians, nominees, and fiduciaries for reasonable out-of-pocket expenses incurred by them in connection with such activities.
Where can I get a copy of Hecla’s Annual Report?
Our Annual Report to Shareholders, consisting of our Form 10-K for the year ended December 31, 2022, and other information, is being made available to shareholders with this Proxy Statement. Shareholders may obtain a copy of our Annual Report for the calendar year ended December 31, 2022, without cost, by written or oral request to: Hecla Mining Company, Attention: Investor Relations, 6500 N. Mineral Dr., Suite 200, Coeur d’Alene, Idaho 83815-9408 – Telephone: 208-769-4100.
You can also access our SEC filings, including our Annual Reports News Releaseson Form 10-K, and Documents Filed withall amendments thereto, on the Securities and Exchange Commission
We want to communicate with you in the way that is most convenient for you. You may choose to receive either a full set of printed materials – which will include an Annual Report, Proxy Statement, and proxy card (“Proxy Materials”) –SEC website at www.sec.gov/edgar or an email with instructions for how to view the materials and vote online. If you are a shareholder of record, you may request and consent to electronic delivery of future Proxy Materials by following the instructions on your proxy card or by visiting our website at http://www.hecla-mining.comwww.hecla.com under “Investors,” selecting “Annual Reports,” and then selecting “Electronic“Annual Reports & Filings.”
2023 Proxy Request.” If your shares are held in street name, please contact your broker and askStatement 91
Frequently Asked Questions
Where can I find additional information about the availability of electronic delivery. If you select electronic delivery, we will discontinue mailing the Proxy Materials to you beginning next year and you will be sent an email messagenotifying you of the Internet address or addresses where you may access the Proxy Materials. Your consent to electronic delivery will remain in effect until you revoke it. If you selected electronic delivery last year, we will not mail the Proxy Materials to you this year and you will receive an email message with the Internet address where you may access the Proxy Materials for the current year. This process is designed to expedite shareholders’ receipt of Proxy Materials, lower the cost of the Annual Meeting, and help conserve natural resources.Hecla?
Shareholders may also elect to receive noticeThe principal executive office of our filings with the SEC, annual reports and news releases by email. You may sign up for this service by visiting our website at http://www.hecla-mining.com under “Investors” and selecting “Subscribe for Updates”.
A list of shareholders eligible to vote at the meeting will be available for examination by any shareholder for any purpose relevant to the meeting during ordinary business hours for at least ten days prior to May 19, 2016, at Hecla’scorporate offices,Company is located at 6500 N. Mineral Dr., Suite 200, Coeur d’Alene, Idaho 83815. Our telephone number at this address is 208-769-4100. Our common stock is traded on the NYSE under the symbol “HL.”
We file annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-Kand other information with the SEC. As an electronic filer, our public filings are maintained on the SEC’s Internet site that contains reports, proxy statements, and other information regarding issuers that file electronically with the SEC. The address of that website is www.sec.gov/edgar.
Our annual report for the year ended December 31, 2022, including financial statements and schedules, is included with this Proxy Statement.
We maintain a company website at www.hecla.com from which you can alternatively access the reports we file with the SEC. Our committee charters and other important corporate governance documents are also available on our website.
Other than the items in the Proxy Statement, what other items of business will be addressed at the offices of Paine Hamblen LLP, located at 717 West Sprague Avenue, Suite 1200, Spokane, Washington.
PROVISIONS OF HECLA’S BYLAWS WITH RESPECT TO SHAREHOLDER PROPOSALS AND NOMINATIONS FOR ELECTION AS DIRECTORS
You may submit proposals for consideration at future annual shareholder meetings, including director nominations, as follows:
Shareholder proposals at the 2017 Annual Meeting of Shareholders
Our Bylaws establish procedures governing the eligibility of nominees for election to our Board, and the proposal of business to be considered by our shareholders at an Annual Meeting of Shareholders. For nominations or other business to be properly brought before an Annual Meeting of Shareholders by a shareholder, the shareholder must have given timely notice thereof in writing to our Corporate Secretary. To be timely, a shareholder’s notice shall be delivered to our Corporate Secretary at our principal executive offices located at 6500 N. Mineral Drive, Suite 200, Coeur d’Alene, Idaho 83815-9408, not less than 90 days nor more than 120 days prior to the first anniversary of the preceding year’s Annual Meeting of Shareholders;provided, however, that in the event the date of the Annual Meeting of Shareholders is advanced by more than 30 days or delayed by more than 60 days from such anniversary date, notice by the shareholder to be timely must be delivered not earlier than the 120th day prior to such Annual Meeting of Shareholders and not later than the close of business on the later of the 90th day prior to such Annual Meeting of Shareholders or the 10th day following the day on which public announcement of the date of such meeting is first made. Adjournment of a meeting shall not commence a new time period for giving shareholder’s notice as described above. Such shareholder’s notice shall set forth:
The applicable time period for timely shareholder submissions pursuant to the above provisions for the 2017 Annual Meeting of Shareholders is January 19, 2017 (the 120th day preceding the anniversary of the 2016 Annual Meeting) to February 18, 2017 (the 90th day preceding such anniversary).
The chairman of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made in accordance with the procedures set forth in the Bylaws and, if any proposed nomination or business is not in compliance with the Bylaws, to declare that such defective proposal shall be disregarded. The foregoing time limits also apply in determining whether notice is timely for purposes of rules adopted by the SEC relating to the exercise of discretionary voting authority.
Shareholder proposals to be included in next year’s Proxy Statement
In addition to the foregoing section, we will comply with Rule 14a-8 under the Exchange Act with respect to any shareholder proposals that meet that rule’s requirements. We will review shareholder proposals intended to be included in our Proxy Statement for the 2017 Annual Meeting of Shareholders which are received by us at our principal executive offices located at 6500 N. Mineral Drive, Suite 200, Coeur d’Alene, Idaho 83815-9408, nolater than December 5, 2016. Such proposals must be submitted in writing and should be sent to the attention of our Corporate Secretary.
You may contact the Corporate Secretary at our principal executive offices for a copy of the relevant Bylaw provisions regarding the requirements for making shareholder proposals and nominating director candidates.
As of the date of this Proxy Statement, the Board is not aware of any matters that will be presented for action at the Annual Meeting other than those described above. However, should other business properly be brought before the Annual Meeting, the proxies will be voted thereon at the discretion of the persons acting thereunder.
By Order of the Board of Directors |
Michael B. White Corporate Secretary |
April 4, 201611, 2023
Certificate of Incorporation
ARTICLE V
Bylaws
In furtherance and not in limitation of the powers conferred by law, the Board is expressly authorized to make, repeal, alter, amend and rescind the Bylaws of the Corporation by a majority vote of the entire Board at any regular or special meeting of the Board; provided, however that, notwithstanding anything contained in this Certificate of Incorporation1933 or the BylawsSecurities Exchange Act of 1934, the Corporationsections of this proxy statement titled Compensation Committee Report and Audit Committee Report (to the extent permitted by SEC rules) will not be deemed incorporated, unless specifically provided otherwise in such filing.
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APPENDIX A
Reconciliation of Non-GAAP Measures to the contrary, the affirmative voteGAAP
Reconciliation of the holdersCash Provided by Operating Activities (GAAP) to Free Cash Flow (non-GAAP)
The non-GAAP measure of at least 80%free cash flow is calculated as net cash provided by operating activities (GAAP) less additions to properties, plants, equipment, and mineral interests (GAAP). Management believes that, when presented in conjunction with comparable GAAP measures, free cash flow is useful to investors in evaluating our operating performance. The following table reconciles net cash provided by operating activities to free cash flow:
Dollars are in thousands | December 31, 2022 | |||
Net cash provided by operating activities (GAAP) | $ | 89,890 | ||
Less: Additions to properties, plants, equipment, and mineral interests (GAAP) | (149,378 | ) | ||
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Free cash flow5 | $ | (59,488 | ) | |
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Reconciliation of the voting powerMine Site Cash Provided by Operating Activities (GAAP) to Mine Site Operating Cash Flow Less Capital (non-GAAP)
The non-GAAP measure of the then outstanding shares of Voting Stock, voting together as a single class, shall be required to (i) alter, amend or repeal any provision of the Bylawsmine site operating cash flow less capital, which is substantially identical to and/or implements the last sentence inSection 4 of Article IV, or Articles VI, VII (subject to the proviso at the end of this sentence) or VIII, of this Certificate of Incorporation, or (ii) alter, amend or repeal any provision of this proviso to Article V;further provided that, notwithstanding anything contained in this Certificate of Incorporation or the Bylaws of the Corporation to the contrary, the affirmative vote of the holders of at least 66.67% of the voting power of the then outstanding shares of Voting Stock, voting togethera performance measure for our LTIP, is calculated as a single class, shall be required to (i) alter, amend or repeal any provision of the Bylaws which is substantially identical to and/or implements the last sentence of Article VII of this Certificate of Incorporation, or (ii) alter, amend or repeal this further proviso to Article V.
ARTICLE VII.
Actions by Shareholders
Any action required or permitted to be taken by the shareholders of the Corporation must be effected at a duly called annual or special meeting of shareholders of the Corporation and may not be effected by any consent in writing by such shareholders. Special meetings of shareholders of the Corporation may be called only by the Board pursuant to a resolution approved by a majority of the entire Board.Except as set forth in the final sentence of this Article VII, andNnotwithstanding anythingelse contained in this Certificate of Incorporation to the contrary, the affirmative vote of the holders of at least 80% of the voting power of the then outstanding shares of Voting Stock, voting together as a single class, shall be required to alter, amend or repeal this Article VII.Notwithstanding anything contained in this Certificate of Incorporation to the contrary, the affirmative vote of the holders of at least 66.67% of the voting power of the then outstanding shares of Voting Stock, voting together as a single class, shall be required to alter, amend or repeal the second and final sentences of this Article VII.
BYLAWS
ARTICLE VI.
Amendments
These Bylaws may be altered or repealed and Bylaws may be made at any annual meeting of shareholders or at any special meeting thereof if notice of the proposed alteration or repeal of Bylaws to be made be contained in the notice of such meeting, by the affirmative vote of the holders of a majority of the total voting power of all outstanding shares of the voting stock of the Corporation. These bylaws may also be altered or repealed and Bylaws may be made by the affirmative vote of a majority of the Board of Directors, at any annual or regular meeting of the Board of Directors, or at any special meeting of the Board of Directors if notice of the proposed alteration or repeal, or Bylaw or Bylaws to be made,, be contained in the notice of such special meeting.
Notwithstanding anything contained in these Bylaws to the contrary,(i) the affirmative vote of the holders of at least 80% of the voting power of all of the shares of the capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class, shall be required to alter, amend or repeal Section 4, (subject to clause (ii) below) or 6 of Article II, Section 1, 2 or 3 of Article III, of these Bylaws,and (ii) notwithstanding the foregoing, the affirmative vote of the holders of at least 66.67% of the voting power of all of the shares of the capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class, shall be required to alter, amend or repeal the first sentence of Section 4 of Article II of these Bylaws.
CERTIFICATE OF INCORPORATION
ARTICLE VII.
Actions by Shareholders
Any action required or permitted to be taken by the shareholders of the Corporation must be effected at a duly called annual or special meeting of shareholders of the Corporation and may not be effected by any consent in writing by such shareholders. Special meetings of shareholders of the Corporation may be called only by the Board pursuant to a resolution approved by a majority of the entire Board,except as otherwise permitted by the Bylaws of the Corporation. Notwithstanding anything contained in this Certificate of Incorporation to the contrary, the affirmative vote of the holders of at least 80% of the voting power of the then outstanding shares of Voting Stock, voting together as a single class, shall be required to alter, amend or repeal this Article VII.
BYLAWS
ARTICLE II.
Meetings of Shareholders
Section 1.Annual Meetings. Annual meetings of shareholders for the election of directors and for such other business as may be stated in the notice of the meeting, shall be held at such place, either within or without the State of Delaware, and at such time and date as the Board of Directors by resolution, shall determine and as set forth in the notice of the meeting. In the event the Board of Directors fails so to determine the time, date and place of meeting, the annual meeting of shareholders shall be held at the principal executive office of the Corporation at 10:00 a.m. on the first Wednesday in May. If the date of the annual meeting shall fall upon a legal holiday, the meeting shall be held on the next succeeding business day. The annual meeting may be adjourned by the chairman of the meeting from time to time and place to place. At any adjourned annual meeting the Corporation may transact any business which might have been transacted at the original annual meeting. The Board of Directors acting by resolution may postpone and reschedule any previously scheduled annual meeting of shareholders upon public notice or disclosure given prior to the date previously scheduled for such meeting of shareholders.
Section 2.Voting. Each shareholder who is entitled to vote pursuant to the terms of the Certificate of Incorporation and these Bylaws, or who is entitled to vote pursuant to the laws of the State of Delaware, shall be entitled to vote in person or by proxy, but no proxy shall be voted after three years from its date unless such proxy provides for a longer period. All elections for directors and all other questions shall be decided by majority vote except as otherwisemine site cash provided by the Certificateoperating activities, less additions to properties, plants, equipment, and mineral interests. Management believes that, when presented in conjunction with comparable GAAP measures, mine site operating cash flow less capital is useful to investors in evaluating our operating performance. The following table reconciles mine site cash provided by operating activities to mine site operating cash flow less capital:
Dollars are in thousands | December 31, 2022 | |||
Mine site cash provided by operating activities | $ | 350,241 | ||
Additions to properties, plants equipment and mineral interests | (367,145 | ) | ||
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Mine site operating cash flow less capital | $ | (16,904 | ) | |
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Reconciliation of Incorporation, these Bylaws or the laws of the State of Delaware.
A complete list of the shareholders entitledNet Income (Loss) (GAAP) to vote at any meeting of shareholders at which directors are to be elected, arranged in alphabetical order, with the address of each,Earnings Before Interest, Taxes, Depreciation, and the number of shares held by each, shall be open to the examination of any shareholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any shareholder who is present.Amortization (non-GAAP)
The CEO shall appoint three Inspectors of Election prior to each meeting of shareholders. Upon his or her appointment, each such Inspector shall take and sign an oath faithfully to execute the duties of Inspector at such meeting with strict impartiality and to the best of his or her ability. Such Inspectors shall determine the number of shares outstanding, the voting power of each such share, the number of shares present at the meeting and whether a quorum is present at such meeting. The Inspectors shall receive votes and ballots and shall determine all challenges and questions as to the right to vote and shall thereafter count and tabulate all votes and ballots and determine the result. Such Inspectors shall do such further acts as are proper to conduct the elections of directors and the vote on other matters with fairness to all shareholders. The Inspectors shall make a certificate of the results of the elections of directors and the vote on other matters. No Inspector shall be a candidate for election as a director of the Corporation nor shall any such candidate be appointed an Inspector.
Section 3.Quorum. Except as otherwise required by law, by the Certificate of Incorporation or by these Bylaws, the presence, in person or by proxy, of shareholders holding a majority of the voting power of the outstanding stock of the Corporation shall constitute a quorum at all meetings of the shareholders. In case a quorum shall not be present at any meeting, a majority in interest of the shareholders entitled to vote thereat, present in person or by proxy or the chairman of the meeting, shall have the power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until the requisite amount of stock entitled to vote shall be present; provided, however, that if such adjournment is for more than thirty days, or if after such adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each shareholder of record entitled to vote at
such adjourned meeting. At any such adjourned meeting at which the requisite amount of stock entitled to vote shall be represented, any business may be transacted which might have been transacted at the meeting as originally noticed; but only those shareholders entitled to vote at the meeting as originally noticed shall be entitled to vote at any adjournment or adjournments thereof unless the Board of Directors shall have fixed a new record date for such adjournment or adjournments pursuant to Section 4 of Article V of these Bylaws.
Section 4.Special Meetings.
(A) General.
Special meetings of shareholders may be called only by(i) the Board of Directors pursuant to a resolution approved by a majority of the entire Board of Directors, or (ii) solely to the extent required by Section 4(B), the Secretary of the Corporation. Special meetings of shareholders may be held at such place, either within or without the State of Delaware, and at such time and date as shall be stated in the notice of the meeting. The special meeting may be adjourned by the chairman of the special meeting from time to tie and place to place. At any adjourned special meeting the Corporation may transact any business which might have been transacted at the original special meeting. The Board of Directors acting by resolution approved by a majority of the entire Board of Directors may postpone and reschedule any previously scheduled special meeting of shareholders upon public notice or disclosure given prior to the date previously scheduled for such meeting of shareholders.
(B)Shareholder Requested Special Meetings.
Section 5.Notice of Meetings. Written notice, stating the place, date and time of any annual or special meeting of shareholders, and the general nature of the business to be considered thereat, shall be given to each shareholder entitled to vote at such meeting at his address as it appears on the records of the Corporation, not less than ten nor more than sixty days before the date of the meeting.
Section 6.Shareholder Action. Any action required or permitted to be taken by the shareholders of the Corporation must be effected at a duly called annual or special meeting of shareholders of the Corporation and may not be effected by any consent in writing by such shareholders.
Section 7.Chairman of a Meeting. At each meeting of the shareholders the Chairman of the Board, or if he shall be absent therefrom, the President, or if he shall be absent therefrom, another officer of the Corporation chosen by the Board of Directors, shall act as chairman of the meeting or preside thereat.
Section 8.
(A)Annual Meetings of Shareholders.
delivered to the Secretary of the Corporation at the principal executive offices of the Corporation not later than the close of business on the 10th day following the day on which such public announcement is first made by the Corporation.
(B)Special Meetings of Shareholders. Only such business shall be conducted at a special meeting of shareholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting. Nominations of persons for election to the Board of Directors may be made at a special meeting of shareholders at which directors are to be elected pursuant to the Corporation’s notice of meeting (1) by or at the direction of the Board of Directors or (2)provided that the Board of Directors has determined that directors shall be elected at such special meeting, by any shareholder of the Corporation who is a shareholder of record at the time of giving of notice provided for in this By-Law, who shall be entitled to vote at the meeting andwho (y) in the case of a special meeting of shareholders called pursuant to clause (i) of the first sentence of Section (4)(A) of Article II of these Bylaws, complies with the notice procedures set forth in this By-Law, or (z) in the case of a Shareholder Requested Special Meeting, complies with the requirements set forth in section 4(B) of Article II of these Bylaws. In the event the Corporation calls a special meeting of shareholders for the purpose of electing one or more directors, any such shareholder may nominate a person or persons (as the case may be), for election to such position(s) as specified in the Corporation’s notice of meeting, if(i) in the case of a special meeting of shareholders called pursuant to clause (i) of the first sentence of Section (4)(A) of Article II of these Bylaws, the shareholder’s notice required by paragraph (A)(2) of this By-Law shall be delivered to the Secretary at the principal executive offices of the Corporation not earlier than the 120th day prior to such special meeting and not later than the close of business on the later of the 90th day prior to such special meeting or the 10th day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting, or (ii) in the case of a Shareholder Requested Special Meeting, the shareholder complies with the requirements set forth in Section 4(b) of Article II of these Bylaws. In no event shall the public announcement of an adjournment of a special meeting commence a new time period for the giving of a shareholder’s notice as described above.
(C) General.
Reconciliation of Non-GAAP Measures to GAAP
The non-GAAP measure of earnings before interest, taxes, depreciation, and amortization (“EBITDA”) is calculated as net income (loss) before the following items: interest expense, income tax benefit provision, (benefit), and depreciation, depletion, and amortization expense. Management believes that, when presented in conjunction with comparable GAAP measures, EBITDA is useful to investors in evaluating our operating performance. The table below presents reconciliations between the non-GAAP measure EBITDA to the GAAP measure of net income (loss)loss to the non-GAAP measure EBITDA for the years ended December 31, 2015, 20142022, 2021 and 20132020 (in thousands).
Year ended December 31, | ||||||||||||
2015 | 2014 | 2013 | ||||||||||
Net income (loss) (GAAP) | $ | (86,968 | ) | $ | 17,824 | $ | (25,130 | ) | ||||
Interest expense, net of amount capitalized1 | 25,389 | 26,775 | 21,689 | |||||||||
Income tax provision (benefit) | 56,310 | (5,240 | ) | (9,795 | ) | |||||||
Depreciation, depletion, and amortization | 112,585 | 112,173 | 82,366 | |||||||||
EBITDA | $ | 107,316 | $ | 151,532 | $ | 69,130 |
Year ended December 31, | ||||||||||||
2022 | 2021 | 2020 | ||||||||||
Net income (loss) (GAAP) | $ | (37,348 | ) | $ | 35,095 |
| $ | (9,457 | ) | |||
Interest expense |
| 42,793 |
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| 41,945 |
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| 49,569 |
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Income tax (benefit) provision |
| (7,566 | ) |
| (29,569 | ) |
| 8,199 |
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Depreciation, depletion, and amortization |
| 143,938 |
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| 171,793 |
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| 155,006 |
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EBITDA | $ | 141,817 |
| $ | 219,264 |
| $ | 203,317 |
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Free cash flow is calculated as cash provided by operating activities (GAAP) less additions to properties, plans and equipment. Free cash flow is a measure used by management to evaluate the Company’s operating performance but should not be considered as an alternative to cash flow from operations, as that term is defined by GAAP. |
2023 Proxy Statement A-1
Appendix A
Reconciliation of Net Income (Loss) (GAAP) to Adjusted EBITDA Less Capital (non-GAAP)
The non-GAAP measure of Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”)EBITDA less capital for use in STIP performance measurement is calculated as net lossincome (loss) before the following items: interest expense, income tax provision,benefit, depreciation, depletion, and amortization expense, exploration expense, pre-development expense, acquisition costs, loss (gain) on disposition of properties, plants, equipment and mineral interests, suspension costs, foreign exchange gains, gainsloss (gain), unrealized loss (gain) on derivative contracts, provisional price gains,(gains) losses, provisions for closed operationsexpense,operations expense, stock-based compensation, unrealized losses on investments, interest and other income, and lossincome/expense, gain on sale of investments. Management believes that, when presented in conjunction with comparable GAAP measures, Adjusted EBITDA is useful to investors in evaluatinginvestments (“adjusted EBITDA”) less capital expenditures at our operating performance. operations.
The following table reconciles net loss to adjusted EBITDA less capital (in thousands):
Year Ended December 31, | ||||||||||||
2022 | 2021 | 2020 | ||||||||||
Net (loss) income | $ | (37,348 | ) | $ | 35,095 |
| $ | (9,457 | ) | |||
Interest expense, net of amount capitalized |
| 42,793 |
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| 41,945 |
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| 49,569 |
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Income and mining taxes |
| (7,566 | ) |
| (29,569 | ) |
| 8,199 |
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Depreciation, depletion, and amortization |
| 143,938 |
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| 171,793 |
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| 155,006 |
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EBITDA |
| 141,817 |
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| 219,264 |
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| 203,317 |
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Ramp-up and suspension costs | 24,114 | 23,012 | 24,911 | |||||||||
Loss on disposition of properties, plants, equipment, and mineral interests | 16 | 87 | 572 | |||||||||
Foreign exchange (gain) loss | (7,211 | ) | (417 | ) | 4,605 | |||||||
Unrealized (gain) loss on derivative contracts | (844 | ) | 11,903 | 5,578 | ||||||||
Provisional price loss (gain) | 20,839 | (9,349 | ) | (8,008 | ) | |||||||
Provision for closed operations and environmental matters | 8,793 | 17,964 | 6,189 | |||||||||
Stock-based compensation | 6,012 | 6,081 | 6,458 | |||||||||
Unrealized loss (gain) on investments | 5,632 | 4,295 | (10,272 | ) | ||||||||
Adjustments of inventory to net realizable value | 2,646 | 6,524 | — | |||||||||
Monetization of zinc hedges | 16,664 | — | — | |||||||||
Other |
| (986 | ) |
| (584 | ) |
| (2,666 | ) | |||
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Adjusted EBITDA6 |
| (217,492 | ) |
| 278,780 |
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| 230,684 |
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Capital expenditures at operating mines |
| (147,651 | ) |
| (108,855 | ) |
| (99,939 | ) | |||
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Adjusted EBITDA less capital expenditures | $ | 69,841 |
| $ | 169,925 |
| $ | 130,745 |
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6 | Adjusted EBITDA is a measure used by management to evaluate the Company’s operating performance but should not be considered an alternative to net (loss) income or cash provided by operating activities as those terms are defined by GAAP and does not necessarily indicate whether cash flows will be sufficient to fund cash needs. In addition, the Company may use it when formulating performance goals and targets under its incentive program. |
A-2 www.hecla.com
Reconciliation of Income Applicable to Common Stockholders to Adjusted EBITDANet Income (Loss) (GAAP)
Adjusted net income and adjusted net income (loss) per share, are indicators of our performance. They exclude certain impacts which are of a nature which we believe are not reflective of our underlying performance. Management believes that adjusted net income (loss) per common share provides investors with the ability to better evaluate our underlying operating performance.
The following table reconciles adjusted net income (loss) (in thousands):
Year Ended December 31, 2015 | ||||
Net (loss) | $ | (86,968 | ) | |
Plus: Interest expense, net of amount capitalized | 25,389 | |||
Plus: Income taxes | 56,310 | |||
Plus: Depreciation, depletion and amortization | 111,489 | |||
Plus: Exploration expense | 17,745 | |||
Plus: Pre-development expense | 4,213 | |||
Plus: Acquisition costs | 2,162 | |||
(Less): Foreign exchange (gain) | (24,551 | ) | ||
Less: Gains on derivative contracts | (8,252 | ) | ||
(Less): Provisional price (gains) | (634 | ) | ||
Plus: Provision for closed operations and environmental matters | 12,036 | |||
Plus: Stock-based compensation | 5,425 | |||
Plus: Unrealized losses on investments | 3,333 | |||
(Less): Other | (872 | ) | ||
Adjusted EBITDA | $ | 116,825 |
Year Endd December 31, 2022 | ||||
Net loss applicable to common shareholders (GAAP) | $ | (37,900 | ) | |
Adjusted for items below: | ||||
Derivative contracts gains | (844 | ) | ||
Provisional pricing losses | 20,839 | |||
Unrealized losses on equity investments | 5,632 | |||
Environmental accruals | 2,874 | |||
Foreign exchange gain | (7,211 | ) | ||
Ramp-up and suspension costs | 24,114 | |||
Loss on disposition of properties, plants, equipment and mineral interests | 16 | |||
Adjustments of inventory to net realizable value | 2,646 | |||
Monetization of Zinc Hedges | 16,664 | |||
Other | 939 | |||
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Adjusted net income | 27,769 | |||
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Weighted average shares – basic | 557,344 | |||
Adjusted net income (loss) per common stock (in cents) | 0.05 |
2023 Proxy Statement A-3
The tables below present reconciliations between the non-GAAP measures of Cash Cost, Before By-product Credits Per Silver/Gold Ounce and Cash Cost, After By-product Credits Per Silver/Gold Ounce to the GAAP measure of cost of sales and other direct production costs and depreciation, depletion and amortization for our operations for the year ended December 31, 2015 (in thousands, except costs per ounce and gold ounces produced).
Cash Cost, After By-product Credits Per Silver/Gold Ounce is an important operating statistic that we utilize to measure each mine’s operating performance. It also allows us to benchmark the performance of each of our mines versus those of our competitors. As a primary silver mining company, we also use the statistic on an aggregate basis - aggregating the Greens Creek, Lucky Friday and San Sebastian mines, but not Casa Berardi, which is a primary gold mine - tocompare our performance with that of other primary silver mining companies. Similarly, the statistic is useful in identifying acquisition and investment opportunities as it provides a common tool for measuring the financial performance of other mines with varying geologic, metallurgical and operating characteristics.
Cash Cost, Before By-product Credits Per Silver/Gold Ounce include all direct and indirect operating cash costs related directly to the physical activities of producing metals, including mining, processing and other plant costs, third-party refining expense, on-site general and administrative costs, royalties and mining production taxes. By-product credits include revenues earned from all metals other than the primary metal produced at each unit. Cash Cost, After By-product Credits, per Silver/Gold Ounce, provides management and investors an indication
of operating cash flow, after consideration of the average price, received from production. Management also uses this measurement for the comparative monitoring of performance of our mining operations period-to-period from a cash flow perspective. Cash Cost, After By-product Credits, per Silver/Gold Ounce is a measure developed by precious metals companies (including the Silver Institute) in an effort to provide a uniform standard for comparison purposes. There can be no assurance, however, that our reporting of this non-GAAP measure is the same as that reported by other mining companies.
The Casa Berardi section below reports Cash Cost, After By-product Credits, per Gold Ounce for the production of gold, its primary product, and by-product revenues earned from silver, which is a by-product at Casa Berardi. Only costs and ounces produced relating to units with thesame primary product are combined to represent Cash Cost, After By-product Credits, per Ounce. Thus, the gold produced at our Casa Berardi unit is not included as a by-product credit when calculating Cash Cost, After By-product Credits, per Silver Ounce for the total of Greens Creek, Lucky Friday and San Sebastian, our combined silver properties.
As depicted in the Total, Greens Creek, Lucky Friday and San Sebastian Unit tables below, by-product credits comprise an essential element of our silver unit cost structure distinguishing our silver operations due to the polymetallic nature of their orebodies. By-product credits included in our presentation of Cash Cost, After Byproduct Credits, per Silver Ounce include:
Total, Greens Creek. Lucky Friday and San Sebastian Units | |||||||||
In thousands (except per ounce amounts) | Year ended December 31, | ||||||||
2015 | 2014 | 2013 | |||||||
By-product value, all silver properties: | |||||||||
Zinc | $ | 87,383 | $ | 95,7016 | $ | 77,616 | |||
Gold | 59,019 | 61,871 | 66,907 | ||||||
Lead | 55,955 | 66,082 | 48,973 | ||||||
Total by-product credits | $ | 202,357 | $ | 223,654 | $ | 193,496 | |||
By-product credits per silver ounce, all silver properties | |||||||||
Zinc | $ | 7.56 | $ | 8.65 | $ | 8.71 | |||
Gold | 5.10 | 5.59 | 7.51 | ||||||
Lead | 4.84 | 5.97 | 5.50 | ||||||
Total by-product credits | $ | 17.50 | $ | 20.21 | $ | 21.72 |
By-product credits included in our presentation of Cash Cost, After By-product Credits, per Gold Ounce for our Casa Berardi Unit include:
Casa Berardi Unit3 | ||||||
In thousands (except per ounce amounts) | Year ended December 31, | |||||
2015 | 2014 | 2013 | ||||
Silver by-product value | 457 | 464 | 262 | |||
Silver by-product credits per gold ounce | 3.57 | 3.62 | 4.19 |
Cost of sales and other direct production costs and depreciation, depletion and amortization is the most comparable financial measure calculated in accordance with GAAP to Cash Cost, After By-product Credits. The sum of the cost of sales and other direct production costs and depreciation, depletion and amortization forour operating units in the tables below is presented in our Consolidated Statement of Operations and Comprehensive (Loss) (in thousands) included in our audited financial statements which are included in our Annual Report on Form 10-K for the calendar year ended December 31, 2015.
Total, Greens Creek, Lucky Friday | ||||||||||||
In thousands (except per ounce amounts) | Year ended December 31, | |||||||||||
2015 | 2014 | 2013 | ||||||||||
Cash Cost, Before By-product Credits1 | $ | 269,971 | $ | 276,842 | $ | 254,460 | ||||||
By-product credits | (202,357 | ) | (223,654 | ) | (193,496 | ) | ||||||
Cash Cost, After By-product Credits | 67,614 | 53,188 | 60,964 | |||||||||
Divided by silver ounces produced | 11,562 | 11,065 | 8,907 | |||||||||
Cash Cost, Before By-product Credits, per Silver Ounce | 23.35 | 25.02 | 28.56 | |||||||||
By-product credits per silver ounce | (17.50 | ) | (20.21 | ) | (21.72 | ) | ||||||
Cash Cost, After By-product Credits, per Silver Ounce | $ | 5.85 | $ | 4.81 | $ | 6.84 | ||||||
Reconciliation to GAAP: | ||||||||||||
Cash Cost, After By-product Credits | $ | 67,614 | $ | 53,188 | $ | 60,964 | ||||||
Depreciation, depletion and amortization | 67,815 | 72,936 | 63,098 | |||||||||
Treatment costs | (80,239 | ) | (82,639 | ) | (76,823 | ) | ||||||
By-product credits | 202,357 | 223,654 | 193,496 | |||||||||
Change in product inventory | 1,632 | (1,649 | ) | (246 | ) | |||||||
Reclamation and other costs | 1,319 | 2,046 | 2,100 | |||||||||
Cost of sales and other direct production costs and | ||||||||||||
depreciation, depletion and amortization (GAAP) | $ | 260,498 | $ | 267,536 | $ | 242,589 |
Greens Creek Unit | ||||||||||||
In thousands (except per ounce amounts) | Year ended December 31, | |||||||||||
2015 | 2014 | 2013 | ||||||||||
Cash Cost, Before by-Product Credits1 | $ | 196,443 | $ | 199,247 | $ | 203,496 | ||||||
By-product credits | (163,394 | ) | (176,650 | ) | (170,563 | ) | ||||||
Cash Cost, After By-product Credits | 33,049 | 22,597 | 32,933 | |||||||||
Divided by silver ounces produced | 8,452 | 7,826 | 7,448 | |||||||||
Cash Cost, Before By-product Credits, per Silver Ounce | 23.24 | 25.46 | 27.32 | |||||||||
By-product credits per silver ounce | (19.33 | ) | (22.57 | ) | (22.90 | ) | ||||||
Cash Cost, After By-product Credits, per Silver Ounce | $ | 3.91 | $ | 2.89 | $ | 4.42 | ||||||
Reconciliation to GAAP: | ||||||||||||
Cash Cost, After By-product Credits | $ | 33,049 | $ | 22,597 | $ | 32,933 | ||||||
Depreciation, depletion and amortization | 56,553 | 63,505 | 55,265 | |||||||||
Treatment costs | (63,284 | ) | (63,313 | ) | (67,341 | ) | ||||||
By-product credits | 163,394 | 176,650 | 170,563 | |||||||||
Change in product inventory | 4,222 | (1,706 | ) | (159 | ) | |||||||
Reclamation and other costs | 1,342 | 1,949 | 1,947 | |||||||||
Cost of sales and other direct production costs and depreciation, | ||||||||||||
depletion and amortization (GAAP) | $ | 195,276 | $ | 199,682 | $ | 193,526 |
Lucky Friday Unit | ||||||||||||
In thousands (except per ounce amounts) | Year ended December 31, | |||||||||||
2015 | 2014 | 2013 | ||||||||||
Cash Cost, Before By-product Credits1 | $ | 72,052 | $ | 77,595 | $ | 50,964 | ||||||
By-product credits | (38,035 | ) | (47,004 | ) | (22,933 | ) | ||||||
Cash Cost, After By-product Credits | 34,017 | 30,591 | 28,031 | |||||||||
Divided by silver ounces produced | 3,028 | 3,239 | 1,459 | |||||||||
Cash Cost, Before By-product Credits, per Silver Ounce | 23.79 | 23.95 | 34.93 | |||||||||
By-product credits per silver ounce | (12.56 | ) | (14.51 | ) | (15.72 | ) | ||||||
Cash Cost, After By-product Credits, per Silver Ounce | $ | 11.23 | $ | 9.44 | $ | 19.21 | ||||||
Reconciliation to GAAP: | ||||||||||||
Cash Cost, After By-product Credits | $ | 34,017 | $ | 30,591 | $ | 28,031 | ||||||
Depreciation, depletion and amortization | 11,262 | 9,431 | 7,833 | |||||||||
Treatment costs | (16,915 | ) | (19,326 | ) | (9,482 | ) | ||||||
By-product credits | 38,035 | 47,004 | 22,933 | |||||||||
Change in product inventory | (1,154 | ) | 57 | (405 | ) | |||||||
Reclamation and other costs | (23 | ) | 97 | 153 | ||||||||
Cost of sales and other direct production costs and depreciation, | ||||||||||||
depletion and amortization (GAAP) | $ | 65,222 | $ | 67,854 | $ | 49,063 |
San Sebastian Unit2 | ||||||||||
In thousands (except per ounce amounts) | Year ended December 31, | |||||||||
2015 | 2014 | 2013 | ||||||||
Cash Cost, Before By-product Credits1 | $ | 1,476 | $ | — | $ | — | ||||
By-product credits | (928 | ) | — | — | ||||||
Cash Cost, After By-product credits | 548 | — | — | |||||||
Divided by silver ounces produced | 82 | — | — | |||||||
Cash Cost, Before By-product Credits, per Silver Ounce | 18.07 | — | — | |||||||
By-product credits per silver ounce | (11.36 | ) | — | — | ||||||
Cash Cost, After By-product Credits, per Silver Ounce | $ | 6.71 | $ | — | $ | — | ||||
Reconciliation to GAAP: | ||||||||||
Cash Cost, After By-product Credits | $ | 548 | $ | — | $ | — | ||||
Treatment costs | (40 | ) | — | — | ||||||
By-product credits | 928 | — | — | |||||||
Change in product inventory | (1,436 | ) | — | — | ||||||
Cost of sales and other direct production costs and depreciation, | ||||||||||
depletion and amortization (GAAP) | $ | — | $ | — | $ | — |
Casa Berardi Unit3 | ||||||||||||
In thousands (except ounce and per ounce amounts) | Year ended December 31, | |||||||||||
2015 | 2014 | 2013 | ||||||||||
Cash Cost, Before By-product Credits1 | $ | 99,129 | $ | 106,438 | $ | 59,717 | ||||||
By-product credits | (457 | ) | (464 | ) | (262 | ) | ||||||
Cash Cost, After by-product credits | 98,672 | 105,974 | 59,455 | |||||||||
Divided by gold ounces produced | 127,891 | 128,244 | 62,532 | |||||||||
Cash Cost, Before By-product Credits, per Gold Ounce | 775.11 | 829.97 | 954.98 | |||||||||
By-product credits per gold ounce | (3.57 | ) | (3.62 | ) | (4.19 | ) | ||||||
Cash Cost, After By-product Credits, per Gold Ounce | $ | 771.54 | $ | 826.35 | $ | 950.79 | ||||||
Reconciliation to GAAP: | ||||||||||||
Cash Cost, After By-product Credits | $ | 98,672 | $ | 105,974 | $ | 59,455 | ||||||
Depreciation, depletion and amortization | 43,674 | 38,198 | 18,030 | |||||||||
Treatment costs | (670 | ) | (564 | ) | (268 | ) | ||||||
By-product credits | 457 | 464 | 262 | |||||||||
Change in product inventory | 1,970 | 3,151 | (3,766 | ) | ||||||||
Reclamation and other costs | 455 | 820 | 142 | |||||||||
Cost of sales and other direct production costs and depreciation, depletion | ||||||||||||
and amortization (GAAP) | $ | 144,558 | $ | 148,043 | $ | 73,855 |
Total, All Locations | ||||||||||||
In thousands | Year ended December 31, | |||||||||||
2015 | 2014 | 2013 | ||||||||||
Reconciliation to GAAP: | ||||||||||||
Cash Cost, After By-product Credits | $ | 166,286 | $ | 159,162 | $ | 120,419 | ||||||
Depreciation, depletion and amortization | 111,489 | 111,134 | 81,128 | |||||||||
Treatment costs | (80,909 | ) | (83,203 | ) | (77,092 | ) | ||||||
By-product credits | 202,814 | 224,118 | 193,758 | |||||||||
Change in product inventory | 3,602 | 1,502 | (4,012 | ) | ||||||||
Reclamation and other costs | 1,774 | 2,867 | 2,242 | |||||||||
Cost of sales and other direct production costs and depreciation, depletion | ||||||||||||
and amortization (GAAP) | $ | 405,056 | $ | 415,580 | $ | 316,443 |
MEETING TO BE HELD AT:
Eric A. Johnston AuditoriumNorthwest Museum of Arts & Culture2316 W. 1st AvenueSpokane, Washington
For directions contact (509) 456-3931
HECLA MINING COMPANY6500 N. MINERAL DRIVE, SUITE 200COEUR D'ALENE, ID 83815
VOTE BY INTERNET - www.proxyvote.comUse the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALSIf you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.
VOTE BY PHONE - 1-800-690-6903Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAILMark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
HECLA MINING COMPANY 6500 N. MINERAL DRIVE SUITE 200 COEUR D'ALENE, ID 83815-9408 |
VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 p.m. Eastern Time on May 22, 2023 for shares held directly and by 11:59 p.m. Eastern Time on May 18, 2023 for shares held in a Plan. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting - Go to www.virtualshareholdermeeting.com/HL2023 You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 p.m. Eastern Time on May 22, 2023 for shares held directly and by 11:59 p.m. Eastern Time on May 18, 2023 for shares held in a Plan. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way,Edgewood, NY 11717. |
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
V01674-P88944 KEEP THIS PORTION FOR YOUR RECORDS
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DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
HECLA MINING COMPANY | ||||||||||||||||||
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE NOMINEES FOR DIRECTOR LISTED IN ITEM 1 AND "FOR" PROPOSALS 2 AND 3, |
"1 YEAR" ON PROPOSAL 4 |
1. ELECTION OF CLASS I DIRECTORS | ||||||||||||||||||||
Nominees: | Against | Abstain | ||||||||||||||||||
1a. Phillips S. Baker, Jr. | ☐ | ☐ | ||||||||||||||||||
1b. George R. Johnson | ☐ | ☐ | ☐ | For | Against | Abstain | ||||||||||||||
2. Proposal to ratify and approve the selection of BDO USA, LLP, as our independent auditors of the | ☐ | ☐ | ☐ | |||||||||||||||||
3. Advisory resolution to approve named executive officer compensation. | ☐ | ☐ | ☐ | |||||||||||||||||
1 Year | 2 Years | 3 Years | Abstain | |||||||||||||||||
4. Advisory vote on the frequency of our say-on-pay votes for named executive officer compensation. | ☐ | ☐ | ☐ | ☐ | ||||||||||||||||
5. In their discretion on all other business that may properly come before the meeting or any adjournment or adjournments thereof. | ||||||||||||||||||||
This | ||||||||||||||||||||
IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE PLEASE MARK, SIGN, DATE, AND PROMPTLY RETURN THE PROXY CARD USING THE ENCLOSED ENVELOPE. | ||||||||||||||||||||
NOTE: The Proxy must be signed exactly as your |
Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) | Date |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.
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V01675-P88944
HECLA MINING COMPANY |
ANNUAL MEETING OF SHAREHOLDERS |
May 23, 2023 |
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS |
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE NOMINEES FOR CLASS I DIRECTOR LISTED IN ITEM 1 AND "FOR" PROPOSALS 2 AND 3, AND FOR "1 YEAR" ON PROPOSAL 4 |
The undersigned, revoking any previous proxies, hereby appoints PHILLIPS S. BAKER, JR. and MICHAEL B. WHITE, and each of them, proxies of the undersigned, with full power of substitution, to attend the Company's Annual Meeting of Shareholders on May 23, 2023, and any adjournments or postponements thereof, and there to vote the undersigned's shares of Common Stock of the Company on the following matters as described in the Board of Directors Proxy Statement for such meeting, a copy of which has been received by the undersigned. |
You may attend the meeting in person or via the Internet and vote electronically during the meeting. Have the information that is printed on the box marked by the arrow available and follow the instructions. |
Shares represented by this Proxy will be voted as directed by the shareholder. If no such directions are indicated, the Proxies will have authority to vote "FOR" each of the nominees for Class I director, "FOR" Proposals 2 and 3, and "1 Year" on Proposal 4. |
In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting. |
Continued and to be signed on reverse side |
HECLA MINING COMPANYEric A. Johnston AuditoriumNorthwest Museum of Arts & Culture2316 W. 1st AvenueSpokane, Washington
ANNUAL MEETING OF SHAREHOLDERSMay 19, 2016
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE NOMINEES FOR DIRECTOR LISTED IN ITEM 1 AND "FOR" PROPOSALS 2, 3, 4 AND 5
The undersigned, revoking any previous proxies, hereby appoints PHILLIPS S. BAKER, JR. and MICHAEL B. WHITE, and each of them, proxies of the undersigned, with full power of substitution, to attend the Company's Annual Meeting of Shareholders on May 19, 2016, and any adjournments or postponements thereof, and there to vote the undersigned's shares of Common Stock of the Company on the following matters as described in the Board of Directors Proxy Statement for such meeting, a copy of which has been received by the undersigned.
This Proxy will be voted as specified. If no specification is made, this Proxy will be voted FOR the election of the three nominees for Director and FOR the approval of Proposals 2, 3, 4 and 5. This proxy also delegates discretionary authority to vote with respect to any other business which may properly come before the meeting or any adjournment or postponement thereof.
Continued and to be signed on reverse side