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| Preliminary Proxy Statement | ||
| ☐ | Confidential, 14a-6(e)(2)) |
| ☒ | Definitive Proxy Statement |
| ☐ | Definitive Additional Materials |
| ☐ | Soliciting Material §240.14a-12 |
Crane Co.
Other Thanother than the Registrant)PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):☑☒ No fee required. ☐ Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.1) Title of each class of securities to which transaction applies:2) Aggregate number of securities to which transaction applies:3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):4) Proposed maximum aggregate value of transaction:5) Total fee paid:☐Fee paid previously with preliminary materials:materials.☐ Check box if any part of the fee is offset as providedRule 0-11(a)(2) Rules identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing.
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CRANE NXT, CO. 950 WINTER STREET, 4TH FLOOR WALTHAM, MA 02451 Dear Fellow Stockholders: | This Proxy Statement and the 2022 Annual Report to Stockholders are available at www.investors.cranenxt.com/ar | |||
CRANE CO.100 FIRST STAMFORD PLACESTAMFORD CONNECTICUT 06902
Crane NXT, Co. (“Crane NXT”), cordially invites you to attend theits virtual Annual Meeting of Stockholders, of Crane Co.,which will be held online via live webcast at 10:00 a.m., Eastern Daylight Time, on Monday, June 5, 2023. There will be no physical location for the Annual Meeting. Crane NXT stockholders will be able to attend the Annual Meeting online, and, with a control number appearing on your proxy card, vote shares electronically and submit questions during the Annual Meeting by visiting www.meetnow.global/MDWD6FQ at the meeting date and time.
As the new Chairman of Crane NXT, I couldn’t be more excited about the strength of the business today, and about the many incremental opportunities we are pursuing. Today, Crane NXT is a premier industrial technology company and a trusted partner to governments and businesses around the world for security, authentication, and automation solutions. We have deep expertise and proprietary capabilities with sensing technologies for verification and authentication, micro-optics technology for visual authentication, as well as related managed services and software. These capabilities underpin our strong business today, support opportunities for growth in our core, and provide the foundation for growth into near-adjacencies both organically and through acquisitions. I am confident that Crane NXT is well positioned to drive long-term profitable growth for the benefit of all of our stakeholders.
As a reminder, in March 2022, we announced our plan to separate Crane Holdings, Co. into two independent, publicly traded companies through the distribution to our stockholders of all of our businesses, other than our Payment & Merchandising Technologies segment. We completed the separation transaction on April 23, 20183, 2023. Upon completion of the separation transaction, Crane Holdings, Co. was renamed “Crane NXT, Co.” and continues to operate the businesses that were within the former Payment & Merchandising Technologies segment. The new company distributed to Crane Holdings, Co. stockholders at separation, Crane Company, holds our former Aerospace & Electronics and Process Flow Technologies global growth platforms, as well as our Engineered Materials segment.
References in this Proxy Statement to Crane Holdings, Co. (including “Crane Holdings” or “Holdings”) refer to our pre-separation Company, references to Crane NXT, Co. refer to our post-separation Company, and references to Crane Company refer to the First Floor Conference Room at 200 First Stamford Place, Stamford, Connecticut.company we distributed to our stockholders. References to the “Company” or “we” include both Holdings pre-separation and Crane NXT post-separation, as the context dictates, and references to “Crane” generally, refer to the entire Crane organization, encompassing all entities.
The Notice of Annual Meeting and Proxy Statement on the following pages describe the matters to be presented at the meeting. Management will report on current operations, and there will be an opportunity to ask questions regarding Crane Co.NXT and its activities. Our 2017 Annual Report to Stockholders accompanies this Proxy Statement.
It is important that your shares be represented at the meeting, regardless of the size of your holdings. If you are unable to attend, in person, I urge you to participate by voting your shares by proxy. You may do so by filling out and returning the enclosed proxy card, or by using the internet address or the toll-free telephone number onset forth in this Proxy Statement, or by requesting a printed copy of the proxy card.materials and completing and returning by mail the proxy card you receive in response to your request.
Sincerely,
R.S. Evans
John S. Stroup
Chairman of the BoardMarch 15, 2018
This Proxy Statementand the 2017 Annual Report to Stockholdersare available at www.craneco.com/arApril 21, 2023
2018 Proxy Statement
1
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS JUNE 5, 2023 | ||||||||
Notice of Annual Meetingof StockholdersApril 23, 2018
To the Stockholders of Crane NXT, Co.:
THE 2018The 2023 ANNUAL MEETING OF STOCKHOLDERS OF CRANE NXT, CO. will be held virtually for the following purposes:
| WHEN: |
June 5, 2023
Monday 10:00 a.m.
Eastern Daylight Time
 | WHERE: |
Online via live webcast at www.meetnow.global/MDWD6FQ
HOW TO VOTE:
 | By Phone |
800-652-VOTE (8683)
in the United States,
United States territories,
and Canada
 | By Mail |
Complete, sign, and return
the proxy card.
 | By Internet |
www.envisionreports.com/cxt
 | Live Webcast |
Stockholders at the close of
business on April 10, 2023,
are entitled to vote at the
Annual Meeting virtually.
 | By Scanning |
You can vote your shares
online by scanning the QR
code on your proxy card.
Proposal | Board Recommendation | |||
Item 1 | To elect | FOR each director u Page 10 | ||
Item 2 | To consider and vote on a proposal to ratify the selection of Deloitte & Touche LLP as independent auditors for Crane | FOR u Page 34 | ||
Item 3 | To consider and vote on a proposal to approve, by a non-binding advisory vote, the compensation paid by the Company to certain executive | FOR u Page 38 | ||
Item 4 | To consider and vote on a proposal to approve, by a non-binding advisory vote, the | |||
u Page 83 | ||||
In addition, any other business properly presented may be acted upon at the meeting.
In order to assure a quorum at the meeting,virtual 2023 Annual Meeting of Stockholders of Crane NXT (the “Annual Meeting”), it is important that stockholders who do not expect to attend the meeting in person fill in, sign, date and return the enclosed proxy card in the accompanying envelope, or usevirtually vote by using the internet address or the toll-free telephone number onlisted in this Proxy Statement. If you have requested paper copies of the proxy materials, you can vote by completing and returning the proxy card enclosed proxy card.in those materials.
Any stockholder of Crane NXT, any past or present associate, and other invitees may attend the Annual Meeting.
The Board of Directors has fixed the close of business on February 28, 2018April 10, 2023, as the record date for the meeting. Stockholders at that date and time are entitled to notice of and to vote at the meetingAnnual Meeting or any postponement or adjournment of the meeting. Annual Meeting. Each share is entitled to one vote. You will be able to attend and participate in the Annual Meeting online, vote your shares electronically and submit your questions prior to and during the meeting by visiting: www.meetnow.global/MDWD6FQ at the meeting date and time described in this Proxy Statement. There is no physical location for the Annual Meeting.
This Notice of Annual Meeting of Stockholders and related Proxy Statement are first being distributed or made available to stockholders on or about April 21, 2023.
We previously mailed a Notice of Internet Availability of Proxy Materials to all Crane NXT stockholders as of the record date. The notice advised such stockholders that they could view the Proxy Statement and Annual Report online at www.envisionreports.com/cxt, or request in writing a paper or e-mail copy of the proxy materials at no cost.
A complete list of stockholders as of the record date will be open to the examination ofby any stockholder during regular business hours at the offices of Crane Co., 100 First Stamford Place, Stamford, Connecticut 06902, for ten days beforeNXT, 950 Winter Street, 4th Floor, Waltham, MA 02451, on the meeting,day of the Annual Meeting, as well as at the meeting.Annual Meeting by visiting www.meetnow.global/MDWD6FQ on the meeting day and time, entering your control number and joining the Annual Meeting as a “Shareholder.”
By Order of the Board of Directors,
Anthony M. D’IorioSecretaryMarch 15, 2018
IF YOU EXPECT TO ATTEND THE MEETING IN PERSON, PLEASE CONTACT THE CORPORATE SECRETARY,CRANE CO., 100 FIRST STAMFORD PLACE, STAMFORD, CONNECTICUT 06902,OR BY EMAIL TO ADIORIO@CRANECO.COM.
2018 Proxy Statement 3Paul G. Igoe
Secretary
April 21, 2023
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Proxy Summary
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Voting Matters
Director Nominees and Continuing Directors
Director Nominees
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Director Nominees
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Michael Dinkins Retired Executive Vice President and Chief Financial Officer, Integer Holdings Corporation | 69 | 2019 |
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| William Grogan Senior Vice President and Chief Financial Officer, IDEX Corporation | 44 | 2023 |
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Cristen Kogl Chief Legal Officer, Zebra Technologies Corporation | 57 | 2023 |
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Ellen McClain President, Year Up | 58 | 2013 |
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Max H. Mitchell President and Chief Executive Officer of Crane Company | 59 | 2014 |
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Aaron W. Saak President and Chief Executive Officer of Crane NXT | 49 | 2023 |
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John S. Stroup Operating Advisor, Clayton, Dublier & Rice | 56 | 2020 |
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James L. L. Tullis Chairman, Tullis Health Investors, Inc. | 75 | 1998 |
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4 Crane Co. 3
Proxy Summary
Continuing Directors
Board Snapshot
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Corporate Governance Highlights
Recent Governance Enhancements
As stated in our Corporate Governance Guidelines, the Board has a leadership responsibilityis responsible for helping to help create a culture of high ethical standards.standards and is committed to continually improving its corporate governance process, practices and procedures. Accordingly, the Board has adopted the following best practices in corporate governance.
Recent Governance Enhancements
Annual election of directors:Following the recommendation of the Board, stockholders approved at our 2017 annual meeting of stockholders amendments to declassify the Board of Directors. Beginning with the 2017 annual meeting, directors are elected to serve one year terms expiring at the following annual meeting.See page 10 for additional information, including the effect on continuing directors serving the remainder of their terms.
Board renewal (sixand composition (eleven new directors in the last fiveten years): In connection with the separation transaction, the members of the Crane NXT Board were chosen with the intention of providing an optimal balance between continuity (by including a number of Crane Holdings, Co. directors), with independence and relevant market focused experience to drive growth. The Board, specifically through the Nominating and Governance Committee, continually evaluates the skills, expertise, integrity, diversity, and other qualities believed to enhance the Board’s ability to manage and direct in an effective manner, the affairs and business of the Company. Since 2013, the Board has added sixeleven new directors.See additional information beginning on page 12 about our Board nominees and continuing directors.directors to accomplish these goals.
New disclosures:For this 2018 Proxy Statement, we have undertaken a thorough review of our proxy disclosures with the intent to provide a more reader-friendly document focused on information most important to our stockholders. In this regard, we have added new content on certain governance practices, including Board oversight of management succession planning, stockholder engagement, our Board evaluation process, director education and CEO pay ratio.See pages 21, 24, 25, and 64 for additional information.
2018 Proxy Statement 5
Proxy Summary
| Ongoing Board Governance Practices | ||||||
•Separate Chairman and CEO roles | • 100% independent Audit, Nominating and Governance, and Management Organization and Compensation committees • Regular executive sessions of non-management directors • Annual Board and committee performance self-evaluations • Over 90% Board and committee attendance in 2022 • Offer of resignation upon significant change in primary job responsibilities • Directors are elected annually •Majority voting and director resignation policy for directors in uncontested elections | |||
•Stringent conflict of interest policies | ||||
•Directors subject to | ||||
• Director retirement policy | ||||
•Strict over-boarding policy for directors • Diverse Board with the appropriate mix of skills, experience and perspective • Comprehensive director nomination and Board refreshment process • Oversight of sustainability and human capital matters impacting our business |
20172022 Performance Highlights
GivenUpon the consistent focuseffectiveness of the Management Organizationseparation transaction, Crane NXT is comprised of the Payment and Compensation Committee (the “Compensation Committee”) on aligning pay withMerchandising Technologies and Currency businesses of Crane Holdings, Co. However, this Proxy Statement summarizes the pre-separation performance all variable elementsin 2022 of management’s compensation increased comparedthose businesses as well as the Aerospace & Electronics, Process Flow Technologies and Engineered Materials segments that now comprise Crane Company. We expect Crane NXT to grow and expand within the prior year.markets where it competes today, as well as in adjacent markets where its technologies and capabilities have application; and we expect Crane NXT to continue to be guided by the same core values and disciplined execution that has been a hallmark of the Crane organization for over 160 years.
Crane Holdings, Co. 2017 TSR Better than Benchmark Indices
Continued to Execute on Near-Term Priorities in 2017
In 2017, the Company delivered strong financial performance and operating results during 2022, setting new records for segment profit and segment margins. We delivered these strong results even though some of Crane Holdings’ largest end markets, most notably commercial aerospace and certain Crane Payment Innovations (CPI) verticals, remained depressed, with demand still below 2019 pre-novel coronavirus (“COVID-19”) levels. Further, these record results were achieved despite numerous challenges during the year including persistent and substantial inflation and ongoing supply chain disruptions. In addition to generating strong financial results, Crane Holdings continued its consistent investment in line withnumerous strategic growth initiatives to ensure that the Crane businesses remain positioned to deliver profitable and
4
Proxy Summary
sustainable above-market growth over the long-term. We believe that our operating plan objectives. Specifically:performance is evidence of our consistent, differentiated, best-in-class execution capabilities enabled by the cadence and discipline of the Crane Business System, Crane’s strong and unique culture, and the performance of Crane’s experienced and highly capable senior management team.
In addition to our strong financial performance, during 2022, we announced three major strategic actions that we believe will unlock significant stockholder value.
On March 30, 2022, Holdings announced its intention to separate into two independent, publicly traded companies to optimize investment and capital allocation in order to accelerate growth. Holdings’ Board of Directors and management believe that the creation of two market focused companies with distinct product and service offerings will better position each business to deliver long-term growth and create value for all stakeholders, including customers, investors and our associates. |
| • | On April 25, 2022, Holdings announced an agreement to divest Crane Supply, the Company’s Canadian distribution business, to further demonstrate our commitment to reshaping our portfolio to accelerate growth and provide a greater focus on manufacturing highly engineered products for our core markets. |
| • | On August 15, 2022, Holdings announced the sale of a subsidiary holding all asbestos liabilities and related insurance assets to permanently remove all asbestos related liabilities and obligations from its balance sheet. We believe this transaction eliminates uncertainty about the potential magnitude of this liability, and will result in higher annual free cash flow available for investment in our business and/or return to stockholders. |
Taken together, these three actions position the Company for substantial value creation entering 2023 and beyond.
The market’s view of Holdings’ strong performance, continued investment for growth, and strategic actions is reflected in Holdings’ stock performance, with total stockholder return (share price appreciation plus reinvested dividends) (“TSR”) outpacing the most relevant benchmark indices during the last one-year (2022) and two-year (2021-2022) periods. Three-year (2020-2022) TSR trailed that of the most relevant benchmark indices, which reflects outperformance in 2021 and 2022 that was more than offset by the stock’s relative underperformance in 2020.
Crane Holdings, Co. TSR for Periods Ending December 31, 2022
| * | See “Non-GAAP Reconciliation” beginning on page 86 for more detail regarding Special Items impacting Adjusted EPS, free cash flow and adjusted operating margins, as well as a reconciliation of the non-GAAP measures used herein. |
Strong Financial Results Despite Ongoing Market Challenges
Final 2022 financial and operational results, adjusted for strategic actions, were substantially above the announced financial targets for the year, driven by a combination of a better-than-expected recovery in certain end markets, consistent and strong operational execution, and substantial benefits from strategic growth investments. Specifically:
| • | Holdings reported GAAP earnings per diluted share |
5
Proxy Summary
| • | Cash used for operating activities in 2022 was $152 million, compared to | |
| 2022 included outflows of $605 million related to the strategic divestiture of asbestos-related assets and liabilities and other portfolio actions. Capital expenditures in 2022 were $58 million, compared to $54 million last year. Free cash flow (cash provided by operating activities less capital spending) in 2022 was |
| • | Operating margins declined to 10.9% in 2022, compared to 15.5% in 2021, driven primarily by a | |
| • | Sales of $3,375 million decreased 1% compared to 2021. The decrease in sales was comprised of a 4% impact from the divestiture of Crane Supply and a 3% impact from unfavorable foreign |
In addition to delivering strong financial results during 2022, Holdings continued to execute on key strategic growth initiatives to ensure that Crane is positioned for long-term, sustainable stockholder value creation. Notable accomplishments included:
| • | Holdings continued to |
| • | Holdings continued to invest in the | |
6 Crane Co.
Proxy Summary
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2017
| • | The combination of new product development and advances in technology capabilities resulted in continued growth across the Company’s portfolio despite supply-chain and pandemic related disruptions. |
| • | Holdings completed repositioning actions in Process Flow Technologies initiated at the end of 2019 which involved facility consolidations to better geographically align our manufacturing footprint with customer needs, and to improve our cost position. |
In addition to the three strategic actions detailed in the Performance Highlights above, during the first two quarters of 2022, Holdings also completed a $300 million share repurchase program that was announced in October 2021. The repurchases reflected the strength of our balance sheet position, challenges deploying capital on acquisitions in the current market environment, and management and the Board’s strong conviction in Crane’s medium- and long-term outlook.
A substantial majority of the compensation for Holdings’ named executive officers (“NEOs”) is performance-based and thus varies with the Company’s actual results. Consistent with the Management Organization and Compensation HighlightsCommittee’s continued focus on aligning pay with performance, annual bonus payouts were above target but at lower levels than 2021 while performance-based restricted share units (“PRSUs”) for the 2020-2022 performance period paid out at a higher level than the prior year PRSUs as a result of improved TSR relative to peers.
6
Proxy Summary
Specifically, annual bonuses for our CEO and other corporate NEOs, which are linked to Crane’s earnings per share and free cash flow, were 133.3% of target in 2022 compared to 200% in 2021, and 13% for the CEO (as calculated) and 50% for the NEO’s (as adjusted)* in 2020. The PRSUs granted to our NEOs for the three-year period 2020-2022 vested at 52.6% of target which reflects the percentile ranking of the Company’s TSR relative to the TSR’s of the other constituent companies in the S&P Midcap 400 Capital Goods Group. In 2021, the PRSUs granted for the three-year period 2019-2021 vested at 25% of target. In 2020, the PRSUs granted for the three-year period 2018-2020 vested at 0% of target due to below threshold performance resulting in no payout. 2022 performance and compensation actions include three NEOs who are no longer officers of Crane NXT. Going forward, the compensation actions for Crane NXT NEOs are expected to align more closely with Crane NXT’s peers.
| * | The 2020 compensation metrics and performance targets were established prior to (and before Holdings could anticipate) the global disruption and impact of the COVID-19 pandemic. In lieu of making mid-year plan adjustments during the COVID-19 pandemic, the Management Organization and Compensation Committee instead chose to exercise its discretion at the low end of target range for the 2020 annual incentive plan payments to reconcile the low formulaic payout based on actual, pandemic-impacted financial performance with the quick and decisive actions taken by management to protect the Company’s associates, stabilize the Company’s finances, meet customer demand in a difficult operating environment, and position the Company to emerge stronger in 2021. No adjustments were made to long-term incentive awards, and there were no pandemic-related adjustments made to 2021 annual incentive plan payments. |
2022 Compensation Highlights
Compensation Best Practices
The Management Organization and Compensation Committee is firmly committed to implementing aan executive compensation program that aligns management and stockholder interests, encourages executives to drive sustainable stockholder value creation, and helps retain key personnel. Moreover, despite continued widespread global supply chain disruptions and inflationary pressure in 2022, we remained committed to maintaining our core compensation plan design. Key elements of our pay practices are as follows:
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•Pay for performance, aligning executive pay with Company results and stockholder returns | • Require significant stock ownership by executives, including an above-market 6x base salary requirement for the CEO • Majority of executive variable pay is delivered in long-term equity-based awards •Appropriate mix of fixed and variable pay to balance employee retention with Company goals, both annual and long-term | |||
• Incentive compensation subject to clawback | ||||
• Management Organization and Compensation Committee retains independent compensation consultant |
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• No excise tax gross-ups upon change in control | • No multi-year guaranteed incentive awards • No fixed-duration employment contracts with executive officers • No hedging or pledging of Company stock permitted • No excessive perquisites for executives | ||
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• No repricing of options | |||
• No discounted stock options |
WHAT WE DON’T DO2018
7
Proxy Summary
Aspects of Compensation Unique to the Separation Transaction
This Proxy Statement 7
Tablesummarizes the compensation decisions made by Holdings in 2022, reflecting the performance of ContentsHoldings and the compensation paid to its NEOs during that fiscal year. But it also reflects the disciplined preparation and planning for the separation transaction, including the hiring by Holdings of Mr. Saak in November 2022 to serve as Chief Executive Officer of Crane NXT after the separation. It is important to note that, while the information contained herein reflects the compensation paid to Holdings’ NEOs including Mr. Saak during 2022, Messrs. Mitchell, Maue and D’Iorio will remain with Crane Company, and the compensation decisions of Crane NXT reflected in next year’s Proxy Statement and financials will not include the compensation paid to those individuals subsequent to the separation transaction. It is also significant that, in light of the pending separation of Holdings as a public company generating $3.4 billion in revenue and delivering strong EPS and Free Cash Flow results, Mr. Mitchell’s compensation was held flat for 2023, to be reassessed by the Board of Crane Company next year as he leads that company post-separation.
Proxy Summary
Pay andfor Performance Alignment
Over 80%85% of CEO Target Pay is Performance-Based
The following table summarizes the major elements of our CEO compensation program.program, which is designed to link pay and performance (based on 2022 pay to Holdings’ CEO).
Totals may not sum due to rounding.
8
Proxy Summary
Our Philanthropy, Sustainability and Equality Highlights
See additional details on the Company’s efforts and performance with respect to philanthropy, sustainability, and equality, at www.investors.cranenxt.com/esg.
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 | ITEM 1: ELECTION OF DIRECTORS | |||||||
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8 Crane Co.
Proxy Statement
2018 Proxy Statement 9
PROPOSAL 1
 | The Board recommends votingFOR each of theDirector Nominees |  |
Crane Co.NXT Board of DirectorsComposition
Our Corporate Governance Guidelines provide that the Board should generally have from nine to twelve directors, a substantial majority of whom must qualify as independent directors under the listing standards of the NYSE.
The Board In addition, the Guidelines provide that any director who has attained the age of Directors currently consists75 as of 12 members, 11 of whom are independent.
Prior to the 2017record date for the annual meeting of stockholders shall tender his/her resignation from the Board.
The Board currently consists of eight members, six of whom are independent, and five were previously directors of Crane Holdings, Co. The company is continuing its efforts to identify an additional Board member and expects to appoint a ninth director after this year’s Annual Meeting. James L.L. Tullis, who has been a member of the Board since 1998 and Chairman since 2020, has attained the age of Directors was divided into three classes75 as of the Record Date and, in accordance with staggered three year terms. At the 2017 annual meeting, stockholders votedCompany’s Director retirement policy, indicated his intention to declassifyretire from the Board effective as of Directorsthe Annual Meeting. The Board reviewed Mr. Tullis’ proposed resignation giving due consideration to Mr. Tullis’ skills, expertise and provideleadership and governance experience. Due to his significant contributions and current involvement in director recruitment and other governance matters, and the significant benefits to the Company from leadership stability and continuity following the Company’s recently completed separation transaction, the Board requested that Mr. Tullis stand for re-election for a one-year term at the annual electionAnnual Meeting. Mr. Tullis, however, will no longer serve as Chairman of directors, without reducing the term of any then incumbent director. There are sevenCrane NXT.
The eight directors whose terms will expire at the time of the Annual Meeting, and four directors whose termsbut will expire at the annual meeting of stockholders in 2019.
The seven directors whose terms will expire at the time of the Annual Meeting are Martin R. Benante, Donald G. Cook, R.S. Evans, Ronald C. Lindsay, Philip R. Lochner, Jr., Charles G. McClure, Jr. and Max H. Mitchell. The Board of Directors has nominated each of them for re-election by the stockholders for a one year term to expire at the 2019 annual meeting of stockholders.
E. Thayer Bigelow, who has been a member of the Board since 1984, has reached the mandatory retirement age under our Corporate Governance Guidelines and will retire from the Board as of the time of the Annual Meeting.
Peter Scannell, who has been a member of the Board since 2015 and whose term would expire in 2019, has informed the Corporate Secretary that he intends to retire from the Board as of the time of the Annual Meeting.
The three remaining directors, Ellen McClain, Jennifer M. Pollino and James L. L. Tullis, who are not standing for election at the Annual Meeting, will continue to serve for the remainder of the terms for which they were elected, which will expire at the 2019 annual meeting of stockholders, and until their successors are duly elected and qualified.qualified, are Michael Dinkins, William Grogan, Cristen Kogl, Ellen McClain, Max H. Mitchell, Aaron W. Saak, John S. Stroup, and James L. L. Tullis. Messrs. Tullis and Mitchell are expected to remain on the Crane NXT Board for a short transitionary period so the Company may benefit from their respective insights and experience. It is anticipated that Ms. McClain and Ms. Kogl, and Messrs. Dinkins, Grogan and Stroup will serve beyond a transitionary period on the Crane NXT Board.
The Board has nominated each of the eight directors for re-election by the stockholders for a one-year term to expire at the 2024 annual meeting of stockholders. The Board has determined that all directors other than Mr. Mitchell and Mr. Saak are independent directors.
The Company believes a board with between nine to twelve directors is appropriate to generate a manageable diversity of thought, perspective and insight in a cost-efficient manner, and will continue its efforts to appoint a ninth member of the Board after the Annual Meeting.
Director Nominating Procedures
The Board believes that a company’s directors should possess and demonstrate, individually and as a group, an effective and diverse combination of skills and experience to guide the management and direction of the Company’s business and affairs.affairs and to align with our long-term strategic vision. The Board has charged the Nominating and Governance Committee with responsibility for evaluating the mix of skills, experience and experiencediversity of background of the Company’s directors and director nominees, as well as leading the evaluation process for the Board and its committees.
Criteria for Board membership take into account skills, expertise, integrity, diversity in thought, ethnicity, and gender, and other qualities which are expected to enhance the Board’s ability to manage and direct Crane Co.’sNXT’s business and affairs. In general, nominees for director should have an understanding of the workings of large business organizations such as Crane Co.,NXT and senior level executive experience as well asleadership experience. In addition, nominees should have the ability to make independent, analytical judgments, the ability toand they should be an effective communicator andcommunicators with the ability and willingness to devote the time and effort required to be an effective and contributing member of the Board.
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Item 1: Election of Directors
A director who serves as a chief executive officer shouldmay not serve on more than two public company boards in addition to our Board, and other directors should not sit on more than four public company boards in addition to our Board. The members of the Audit Committee shouldmay not serve on more than two other audit committees of public companies.
10 Crane Co.
Item 1: Election of Directorsthe director nominees are in compliance with these requirements.
The Nominating and Governance Committee has proposed, and the Board of Directors recommends, that each of the seveneight nominees be elected to the Board. If, before the meeting,Annual Meeting, any nominee becomes unavailable for election as a director, the persons named in the enclosed form of proxy will vote for whichever nominee, if any,elected directors may make an interim vacancy appointment to the Board of Directors recommends to fillafter the vacancy,Annual Meeting, or the Board of Directors may reduce the number of directors to eliminate the vacancy.
Board Composition
Our Board takes an active and thoughtful approach to board composition and is focused on building and maintaining a diverse board. In conducting its annual review of director skills and Board composition, the Nominating and Governance Committee determined and reported to the Board its judgment that the Board as a whole demonstrates a diversity of organizational experience,and professional experience, education, and other background, viewpoint, skills, and other personal qualities and attributes that enablesenable the Board to perform its duties in a highly effective manner. The NominatingCompany is proud to have such a diverse Board, including with respect to gender and Governance Committee also considers the Board’s overall diversity of experience, education, background, skills and attributes when identifying and evaluating potential director nominees.ethnicity.
Board Snapshot
 Age
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Board Skills and Experience
Our individual Board members have a wide range of skills and experience from within and outside our industry, giving them diverse perspectives from which to oversee the Company’s strategy of manufacturingbeing a diverse rangemanufacturer of highly engineered industrial technology in a broad range of products in the payment, security technology and brand authentication markets where we have competitive differentiation and scale, and growing the business globally organically and through domestic and international acquisitions. Our Board members possess expertise in, among other things, acquisitions and other business combinations, diversified industrial operations and manufacturing, international business, corporate finance, human capital management, and organizational leadership.
2018 Proxy Statement
11
Item 1: Election of Directors
Summary of Board Skills and ContinuingExperience
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Public company multinational CEO experience | ● | ● | ● | |||||||||||||
Public company multinational CFO experience | ● | ● | ||||||||||||||
General finance acumen | ● | ● | ● | ● | ● | ● | ● | ● | ||||||||
Corporate governance/board experience | ● | ● | ● | ● | ● | ● | ||||||||||
Mergers & acquisitions | ● | ● | ● | ● | ● | ● | ● | ● | ||||||||
Manufacturing operations | ● | ● | ● | ● | ● | |||||||||||
Expertise with one or more of our end markets | ● | ● | ● | ● | ● | |||||||||||
Intellectual capital development (human capital) | ● | ● | ● | ● | ● | ● | ● | ● | ||||||||
Cyber/Information Security skills | ● | ● | ● | ● | ● | ● | ||||||||||
Independent |  | | | | | | ||||||||||
Self-Identified Race/Ethnicity | ||||||||||||||||
African American | ● | ● | ||||||||||||||
White Caucasian | ● | ● | ● | ● | ● | ● | ||||||||||
Self-Identified Gender | ||||||||||||||||
Male | ● | ● | ● | ● | ● | ● | ||||||||||
Female | ● | ● | ||||||||||||||
The Board Composition and Board Skills and Experience sections above reflect the Board’s eight director nominees.
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Item 1: Election of Directors
Board of Directors Nominees
Nominees to be Elected for Terms to Expire in 20192024
Note: Age calculations for all directors are as of the Record Date.
 | ||||||||
 | MICHAEL DINKINS Age: 69 Director Since: 2019 | Crane NXT Committees: Audit (chair); Nominating and Governance; Executive | ||||||
Retired Other Directorships: • The Shyft Group since 2020 • Community Health Systems, Inc. since 2017 | ||||||||
Relevant Skills and Experience: • Sophisticated financial expertise acquired through public company chief financial officer, chief executive officer and • Significant experience with complex leveraged refinancing and equity financing (initial public offering and secondary markets) transactions • CEO of a • Expertise in the global integration of • National Association of | ||||||||
 | ||||||||
 | WILLIAM GROGAN Age: Director Since: | Crane | ||||||
12 Crane Co.
Item 1: Election of Directors
 | ||
 | ||
2018 Proxy Statement 13
Item 1: Election of Directors
 | ||||||||
Other Directorships: • None. | ||||||||
Relevant Skills and Experience: • Financial expertise | ||||||||
 | ||||||||
• Extensive experience in • Proficiency with capital | ||||||||
14 Crane Co.
13
Item 1: Election of Directors
 | ||||||||
 | CRISTEN KOGL Age: 57 Director Since: 2023 | Crane NXT Committees: Nominating and Governance | ||||||
Chief Legal Officer, General Counsel and Corporate Secretary, Zebra Technologies Corporation, Downers Grove, Ill. (a global leader in enterprise asset intelligence) Other Directorships: • None. | ||||||||
Relevant Skills and Experience: • Operational and organizational expertise as an in-house lawyer/corporate generalist for 25+ years managing global legal and compliance teams • Personal and organizational commitment to diversity, equity and inclusion; Member of Leadership Council on Legal Diversity • Mergers & acquisitions, intellectual property, U.S. public company governance and Securities & Exchange Commission regulations, commercial contracting, enterprise risk management, litigation management, labor and employment relations, government affairs, and compliance functions | ||||||||
 | ELLEN MCCLAIN Age: 58 Director Since: 2013 | Crane NXT Committees: Management Organization and Compensation (chair); Nominating and Governance | ||||||
President | ||||||||
Continuing Directors Whose Terms Expire in 2019
 | ||||||||
Other Directorships: • Crane Company since 2023 • Horseracing Integrity and Safety Authority since 2021 | ||||||||
Relevant Skills and Experience: •Financial, operational and organizational expertise gained as | ||||||||
2018 Proxy Statement 15
Item 1: Election of Directors
 | ||||||||
•Broad experience as | ||||||||
14
Item 1: Election of Directors
 | MAX H. MITCHELL Age: 59 Director Since: 2014 | Crane NXT Committees: None | ||||||
President and Other Directorships: • Crane Company since 2023 • Lennox International, Inc. from 2016 to 2022 • Manufacturers Alliance for Productivity and Innovation | ||||||||
Relevant Skills and Experience: • Chief Executive Officer of a global publicly-traded company • Comprehensive knowledge of the Company’s culture and operations gained from successive leadership positions of increasing responsibility • Demonstrated expertise • Extensive knowledge of, and experience with, the global end markets in • Broad international and • Extensive experience with intellectual/human capital management process to drive a performance-based culture | ||||||||
 | AARON W. SAAK Age: 49 Director Since: 2023 | Crane NXT Committees: Executive | ||||||
President and Chief Executive Officer of the Company since 2023; President and CEO of Mobility Solutions and President of Gilbarco Veeder-Root, a subsidiary of Vontier Corporation (a global technology leader serving the retail convenience market) from February 2018 to November 2022. Other Directorships: • None. | ||||||||
Relevant Skills and Experience: • Significant experience leading global, complex engineered technology businesses for world class industrial organizations • Extensive experience with strategic business development and execution, organically and through acquisitions • Built strong teams with a • Customer focused, process-driven, with a continuous improvement mindset, applying a metrics-oriented approach to driving business performance • Proven leader at | ||||||||
 | ||||||||
15
Item 1: Election of Directors
 | JOHN S. STROUP Age: 56 Director Since: 2020 | Crane NXT Committees: Executive (Chair);Audit | ||||||
Operating Advisor, Clayton, Dubilier & Rice (a global private equity manager that invests in and builds businesses) since 2020. Former President, Chief Executive Officer, and Other Directorships: • Crane Company since • Zurn Elkay Water Solutions Corporation from 2008 to 2023 (resignation effective with May 2023 annual meeting)* • Tenneco from 2020 to 2022 • Belden, Inc. from 2005 to May 2021; Chairman from 2016 to 2020; Executive Chairman from 2020 to May 2021 | ||||||||
Relevant Skills and • More than 30 years of experience in industrial manufacturing of highly engineered products and • Proven leadership skills with over 15 years of experience as president, chief executive officer and director of a global leader in signal transmission and security solutions | ||||||||
* In October 2021, Regal Beloit Corporation and Rexnord Corporation effected a corporate spin-off transaction resulting in two entities, Regal Rexnord Corporation and Zurn Water. The entity formerly known as Rexnord Corporation was renamed Zurn Water, now named Zurn Elkay Water Solutions Corporation as a result of a February 2022 merger with Elkay Manufacturing Company and affiliates. | ||||||||
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Item 1: Election of Directors
 | JAMES L. L. TULLIS Age: 75 Director Since: 1998 | Crane NXT Committees: Nominating and Governance; Management Organization and Compensation | ||||||
Chairman, Tullis Health Investors, LLC, | ||||||||
from 1988 to the present. Other Directorships: • Crane Company since 2023 • Alphatec Holdings, Inc. since 2018 • Exagen Diagnostics, Inc. from 2015 to 2023 (resignation effective with June 2023 annual meeting) •Lord Abbett & Co. Mutual Funds since • electroCore, Inc. from 2018 to 2020 | ||||||||
Relevant Skills and Experience: • Executive leadership, financial and organizational expertise gained as • Significant experience and expertise in management, strategy and governance matters gained as director of several public and private companies, | ||||||||
Vote Required
VOTE REQUIRED
Our By-laws provide that nominees for director and directors running for re-election to the Board without opposition must receive the affirmative vote of a majority of votes cast. Any director who fails to receive the required number of votes for re-election is required by Crane Co.NXT policy to tender his or her written resignation to the Chairman of the Board for consideration by the Nominating and Governance Committee.
16 Crane Co.
17
Item 1: Election of Directors
Independent Status of Directors
Standards for Director Independence
NoThe listing standards of the NYSE, as well as Crane NXT’s Corporate Governance Guidelines, require that a majority of the Board be comprised of independent directors. In order for a director qualifiesto qualify as independent, unless the Board must affirmatively determinesdetermine that the director has no material relationship with Crane Co.NXT. The Board has adopted the standards set forth below in order to assist the Nominating and Governance Committee and the Board itself in making determinations of director independence. Any of the following relationships would preclude a director from qualifying as an independent director:
The director is or was an employee, or the director’s immediate family member is or was an executive officer, of Crane |
The director is an employee, or the director’s immediate family member is an executive officer, of an organization (other than a charitable organization) that in any of the last three completed fiscal years made payments to, or received payments from, Crane |
The director has received, or the director’s immediate family member has received, direct compensation from Crane |
The director is a current partner of or employed by, or the director’s immediate family member is a current partner of, or an employee who personally works on the audit of Crane |
The director is or was employed, or the director’s immediate family member is or was employed, as an executive officer of another organization, and any of Crane |
The director is a member of a law firm, or a partner or executive officer of any investment banking firm, that has provided services to Crane |
The existence of any relationship of the type referred to above, but at a level lower than the thresholds referred to, does not, if entered into in the ordinary course of business, preclude a director from being independent. The Nominating and Governance Committee and the Board review all relevant facts and circumstances before concluding that a relationship is not material or that a director is independent. Specifically, the Committee’s evaluation process includes the review of (i) direct and indirect relationships between directors and the Company, (ii) a report of transactions with director affiliated entities, (iii) director responses to annual questionnaires, and (iv) Code of Business Conduct and Ethics compliance certifications. In addition, the Nominating and Governance Committee reviews and must approve all charitable contributions in excess of $10,000 made by the Company or its affiliatedthrough one of the following three independent charitable funds: Crane Fund, Crane Fund for Widows and Children, or Crane Foundation, to any organization for which a director or his or her spouse or other immediate family member serves as a trustee, director, or officer or in any similar capacity. There were no such contributions in 2017.2022.
Crane Co.’sNXT’s Standards for Director Independence, along with its Corporate Governance Guidelines and Code of Business Conduct and Ethics, which appliesapply to Crane Co.’sNXT’s directors and to all officers and other employees, including our chief executive officer, chief financial officerChief Executive Officer, Chief Financial Officer and controller,Controller, are available on our website atwww.craneco.com/governance.Crane Co. intends to satisfy any disclosure requirements concerning amendments to, or waiverswww.investors.cranenxt.com/governance. See “Code of the Code of Ethics by posting such information at that website address.Business Conduct and Ethics” on page 28.
2018 Proxy Statement 17
18
Item 1: Election of Directors
Independence of Directors
The Nominating and Governance Committee has reviewed whether any of the directors other than Mr. Mitchell,Saak, who is the current Chief Executive Officer of Crane NXT, and Mr. Mitchell, who served as Chief Executive Officer of Crane Holdings, Co., until the completion of the separation transaction on April 3, 2022, has any relationship that, in the opinion of the Committee, (i) is material (either directly or as a partner, stockholder, director, or officer of an organization that has a relationship with Crane Co.)NXT) and, as such, would be reasonably likely to interfere with the exercise by such person of independent judgment in carrying out the responsibilities of a director or (ii) would otherwise cause such person not to qualify as an “independent” director under the rules of the NYSE and, in the case of members of the Audit Committee and the Management Organization and Compensation Committee, the additional requirements under SectionSections 10A and 10C, respectively, of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the associated rules. The Nominating and Governance Committee determined that, other than Mr. Saak and Mr. Mitchell, all of Crane Co.’sNXT’s current directors and all persons who served as a director of Crane Co. at any time during 20172022 are independent in accordance with the foregoing standards, and the Board of Directors has reviewed and approvedaccepted the determinations of the Nominating and Governance Committee.
In evaluating the independence of all directors, the Board considered all transactions in which the Company and any director had an interest, including all purchases and sales with other companies on which a director served on that company’s board. The Board determined in each case that such purchases and sales were de minimis, comprising less than 0.1% of the Company’s revenues. The Board evaluated these transactions that arose in the ordinary course of business and on the same terms and conditions available to other customers and suppliers. Furthermore, in reaching their determinations regarding the independence of the other directors (other than Mr. Saak and Mr. Mitchell), the Committee and the Board applied the Standards for Director Independence described above and determined that there were no transactions that were likely to affect the independence of any director’s judgment.
Board RenewalRefreshment
At the 2017 annual meeting, our stockholders voted to declassify the Board, of Directors, reducing the term of office for directors from three years to one year. In connection with this change, the Corporate Governance Guidelines were amended to increase the retirement age for directors from 72 to 75. Each director who has attained the age of 75 as of the record date for an annual meeting of stockholders or who has served on the Board for 15 years, is required to tender his or her resignation from the Board. The Corporate Governance Guidelines also require a director to tender his or her resignation from the Board if there is a significant change in his or her primary job responsibilities.responsibilities that could impact the skills or perspectives they bring to the Board. The Nominating and Governance Committee then makes a recommendation to the Board, based on a review of all the circumstances, whether the Board should accept the resignation or ask the director to continue on the Board. Mr. Tullis, who has been a member of the Board since 1998 and Chairman since 2020, has attained the age of 75 as of the Record Date and, in accordance with the Company’s Director retirement policy, indicated his intention to retire from the Board effective as of the Annual Meeting. The Board reviewed Mr. Tullis’ proposed resignation giving due consideration to Mr. Tullis’ skills, expertise and leadership and governance experience. Due to his significant contributions and current involvement in director recruitment and other governance matters, and the significant benefits to the Company from leadership stability and continuity following the Company’s recently completed separation transaction, the Board requested that Mr. Tullis stand for re-election for a one-year term at the Annual Meeting. Mr. Tullis, however, will no longer serve as Chairman of Crane NXT.
The Nominating and Governance Committee will, from time to time, seek to identify potential candidates for director to sustain and enhance the composition of the Board with thean appropriate balance of knowledge, experience, skills, expertise, and diversity.diversity of thought, ethnicity, and gender, to enable Crane NXT to formulate and implement its strategic plan. In this process, the Committee will consider potential candidates proposed by other members of the Board, by management, or by stockholders, and the Committee has the sole authority to retain a search firm to assist in this process, at Crane Co.’sNXT’s expense.
Once a person has been identified by the Nominating and Governance Committee as a potential candidate, the Committee, as an initial matter, may collect and review publicly available information regarding the person to assess whether the person should be considered further. Generally, if the person expresses a willingness to be considered and to serve on the Board, and the Committee believes that the person has the potential to be a good candidate, the Committee would seek to gather information from or about the person, review the person’s accomplishments and
19
Item 1: Election of Directors
qualifications in light of any other candidates that the Committee might be considering, and, as appropriate, conduct one or more interviews with the person. In certain instances, Committee members may contact one or more references provided by the candidate or may contact other members of the business community or other persons that may have greater first-hand knowledge of the candidate’s background, skills and accomplishments. The Committee’s evaluation process does not vary based on whether or not a prospective candidate is recommended by a stockholder, although,stockholder.
Board Effectiveness
Our Board, led by our Nominating and Governance Committee, evaluates the size and composition of our Board at least annually, giving consideration to evolving skills, diversity, perspective, and experience needed on our Board to perform its governance and oversight role as stated below, the Board may take into consideration the number of shares held by the recommending stockholderbusiness grows and evolves and the length of time that such shares have been held.underlying risks change over time. Below are steps our Board has recently taken to proactively improve our Board effectiveness.
18 Crane Co.
STEPS TO IMPROVE BOARD EFFECTIVENESS • Identify director candidates with diverse backgrounds and experiences • Annual Board and committee performance self-evaluations • Alignment of director strengths with the Company’s strategic goals and objectives • Director retirement policy • Strict over-boarding policy for directors • Adjust the size of the Board as appropriate to meet the governance needs of the Company | ||||||||
 | ||||||||
OUTCOMES
• Significant international M&A experience • Public company CEO experience • Public company CFO experience • Cyber/Information security skills | ||||||||
Item 1: Election of Directors
Nominations by Stockholders
In considering candidates submitted by stockholders, the Nominating and Governance Committee will take into consideration the needs of the Board and the qualifications of the candidate. A stockholder proposing to nominate a director must provide the followingcertain information about the nominating stockholder and the director nominee, including the following information and must update such information as of the record date for the meeting:
the number of shares of Company stock, including details regarding any derivative securities, held by the nominating stockholder and the director nominee and any of their respective affiliates or associates; |
a description of any agreement regarding how the director nominee would vote, if elected, on a particular matter, including a representation that there are no other |
a description of any agreement with respect to compensation as a director from any person other than |
a representation that the director nominee will comply with all publicly disclosed Board policies, including those relating to confidentiality; |
20
Item 1: Election of Directors
a completed questionnaire similar to the one required of existing directors, a copy of which the Corporate Secretary will provide upon request; |
a description of any material interest the nominating stockholder has in any such nomination; and |
any other information about the proposed candidate that would, under the |
Such notice must also be accompanied by a written consent of each proposed nominee to being named as a nominee and to serve as a director, if elected. A complete description of the requirements relating to a stockholder nomination is set forth in our By-laws (as defined below).
Any stockholder recommendation for next year’s Annual Meeting,annual meeting, together with the information described above, must be sent to the Corporate Secretary at 100 First Stamford Place, Stamford, CT 06902950 Winter Street, 4th Floor, Waltham, MA 02451 and, in order to allow for timely consideration, must be received by the Corporate Secretary no earliernot less than December 24, 2018, and no later90 days nor more than January 23, 2019.120 days prior to June 5, 2024.
Majority Voting for Directors and Resignation Policy
Our By-laws provide that nominees for director and directors running for re-election to the Board without opposition must receive a majority of votes cast. Any director who fails to receive the required number of votes for re-election is required by Crane Co.NXT policy to tender his or her written resignation to the Chairman of the Board for consideration by the Nominating and Governance Committee. The Committee will consider such tendered resignation and make a recommendation to the Board concerning the acceptance or rejection of the resignation. In determining its recommendation to the Board, the Committee will consider all factors deemed relevant by the members of the Committee including, without limitation, the stated reason or reasons why stockholders voted against such director’s re-election, the qualifications of the director, and whether the director’s resignation from the Board would be in the best interests of the Company and its stockholders.
2018 Proxy Statement 19
Item 1: Election of Directors
Board’s Role and Responsibilities
The Board is responsible for, and is committed to, overseeing the business and affairs of the Company and providing guidance for sound decision making, accountability and accountability.ethical professional conduct. It reviews the performance of our management and establishes guidelines and performance targets for our executive compensation program. The Board has adopted a comprehensive set of Corporate Governance Guidelines that set forth the Company’s governance philosophy, policies, and practices, and provide a framework for the conduct of the Board’s business.
Strategic Oversight
Our Board takes an active role in overseeing management’s formulation and implementation of its strategic plan. It receives a comprehensive overview of management’s strategic plan for all of the Company’s businesses at least annually, receives regular updates from consultants and other experts on the global capital markets and industrial technology environment, and receives periodic updates from individual businesses on their strategic plans at other regularly scheduled Board meetings throughout the year. The Board provides insight and feedback to senior management, and, if necessary, challenges management on the Company’s strategic direction. The Board also monitors and evaluates, with the assistance of the Chief Executive Officer, the Company’s strategic results, and approves all significantmaterial capital allocation decisions.
Environmental, Social and Governance (“ESG”) Oversight
ESG strategies and initiatives are overseen by the Board. Our Board takes an active role in its oversight by reviewing ESG matters relevant to the Company’s business, including environmental sustainability, corporate governance and diversity, equity, and inclusion. At least annually, the Board receives a comprehensive review of management’s plan for the Company with respect to philanthropy, sustainability, and equality initiatives and reviews the Company’s prior year efforts and performance on these important issues. (See “Corporate Governance and Sustainability” on page 30). Our Board also receives periodic reports from management regarding the Company’s efforts, initiatives, and performance
21
Item 1: Election of Directors
with respect to these metrics and is not only responsible for the oversight of the Company’s ESG commitments, but for periodically reviewing the Company’s policies and practices regarding ESG matters.
Cyber and Information Security Risk Oversight
Tone at the Top
Our approach to cybersecurity begins with our desire to maintain strong governance and controls to effectively manage and reduce security risks. Security begins with our “tone at the top”, where Company leadership consistently communicates the requirements for vigilance and compliance throughout the organization, and then leads by example. The cybersecurity program is led by Crane NXT’s Chief Information Security Officer, who provides periodic updates to the Audit Committee of our Board of Directors, annual updates to the full Board of Directors, and regular reports to the Executive Management Team about the program, including information about cyber risk management governance and the status of ongoing efforts to strengthen cybersecurity effectiveness. The entire board of directors ultimately is responsible for overseeing management’s risk assessment and risk management processes designed to monitor and mitigate information security risks, including cyber risks. The Company maintains cyber risk and related insurance policies as a measure of added protection.
Our Team and Capabilities
Our cybersecurity program is staffed by a team of highly skilled cybersecurity professionals, including over 20 dedicated internal cybersecurity resources. Several members of the security team currently have Certified Information Systems Security Professional (CISSP) credentials, many hold one or more Global Information Assurance Certification (GIAC)/The Sans Institute (SANS) cybersecurity certificates, and in total the team has several dozen security and network certifications. Our response team members are located in various global locations to ensure 24/7 monitoring and response capabilities and are backed by a 24/7 Managed Security Services Provider (MSSP) who monitors cybersecurity alerts. The program incorporates industry standard frameworks, policies and practices designed to protect the privacy and security of our sensitive information, backed by a suite of best-in-breed security technologies and tools to implement and automate security protections for our networks, employees, and customers.
Our Program and Results
We utilize a risk-based, multi-layered information security approach following the National Institute of Standards and Technology (NIST) Cybersecurity Framework (CSF) and the Center for Internet Security (CIS) critical security controls. We have adopted and implemented an approach to identify and mitigate information security risks that we believe is commercially reasonable for manufacturing companies of our size and scope and commensurate with the risks we face. During the past 5 years, no attempted cyber-attack or other attempted intrusion on our information technology networks has resulted in a material adverse impact on our operations or financial results, in any penalties or settlements, or in the loss or exfiltration of Company data. In the event an attack or other intrusion were to be successful, we have a response team of internal and external resources engaged and prepared to respond.
Education and Awareness
We educate and share best practices globally with our employees to raise awareness of cybersecurity threats. As part of our internal training process, we maintain an annual training for all employees on cybersecurity standards, as well provide monthly trainings on how to recognize and properly respond to phishing, social engineering schemes and other cyber threats. The Company uses advanced systems to block and analyze all email for threats, as well as equip our employees with an intuitive mechanism to easily report suspicious emails which are analyzed by our security systems and dedicated incident response team. Monthly “test” phishing emails are sent to our associates. Any failures trigger a retraining exercise if not properly reported and a monthly training vignette on cybersecurity awareness. To round out our robust awareness program, we have specific and regular training for our IT professionals, and we regularly engage independent third parties to test our information security processes and systems as part of our overall enterprise risk management program.
22
Item 1: Election of Directors
Risk Oversight
The Board recognizes its duty to assure itself that the Company has effective procedures for assessing and managing risks to the Company’s operations, financial position, and reputation, including compliance with applicable laws and regulations. The Board has charged the Audit Committee with responsibility for monitoring the Company’s processes and procedures for risk assessment, risk management, and compliance, includingwhich includes receiving regular reports on material litigation, environmental remediation activities, and on any violations of law or Company policies and consequentresultant corrective action. The Audit Committee receives presentations regarding these matters from management at each in-person meeting (at least quarterly). The Company’s Director of Compliance and Ethics, as well as the Chief Audit Executive, hashave regular independent communications with the Audit Committee. The Chair of the Audit Committee reports any significant matters to the Board as part of his reports on the Committee’s meetings and activities.
The Board receives an annual presentation by management on the Company’s risk management practices. The Board also receives reports from management at each meeting regarding operating results, the Company’s asbestos liability, pending and proposed acquisition and divestiture transactions (each of which must be approved by the Board before completion), capital expenditures (material capital expenditures require Board approval), and other matters.
In addition, the Management Organization and Compensation Committee of the Board has established a process for assessing the potential that the Company’s compensation plans and practices may encourage executives to take risks that are reasonably likely to have a material adverse effect on the Company. The conclusions of this assessment are set forth in the Compensation Discussion and Analysis section under the heading “Compensation Risk Assessment” on page 47.58.
20 Crane Co.
Item 1: Election of Directors
Coordination Among Board Committees Regarding Risk Oversight
| AUDIT COMMITTEE | MANAGEMENT ORGANIZATION AND COMPENSATION COMMITTEE | NOMINATING AND GOVERNANCE COMMITTEE | |||||||
•Financial reporting risk •Legal and compliance risk • Selection, performance assessment and compensation of the independent auditor • Cyber/Information security risk •Fraud risk • Environmental risk | •Performance assessment and compensation of the CEO and other executive officers •Management succession planning •Risk review of incentive compensation arrangements | •Governance risk • Independence of directors •Board succession planning •Board and committee performance evaluation | |||||||
Management Succession Planning and Intellectual Capital
We have a comprehensive Intellectual Capital (“IC”) process at Crane Co.NXT that encompasses careful and rigorous talent selection, systematic training and personalized development, and an annual assessment of performance and potential. Our Board and the Management Organization and Compensation Committee take an important role in our human capital management and the IC process. The Management Organization and Compensation Committee has the primary responsibilities for (i) assuring that the Company’s management development and succession planning policies and procedures are sound and effective, (ii) evaluating the performance of the Chief Executive Officer and other members of senior management, and (iii) regularly reporting its findings and recommendations to the Board. A key element of the IC process is the identification of management succession needs and opportunities, whether arising from natural career growth and development, voluntary turnover, retirements, or other causes. Such management succession planning
23
Item 1: Election of Directors
forms part of our annual strategy review process for each of our businesses, and the senior management levels are reviewed with the Board annually. The Board’s oversight and involvement in the annual review of senior management level succession needs and opportunities promotes the identification and development of a pipeline of strong performance-focused senior leaders that possess diverse skills and talents.
Stockholder Engagement
The CompanyCrane NXT regularly meets with current and potential stockholders, both to provide transparency about its operations and results, and to better understand the investment community’s perception of the Company’s performance and corporate strategy. During 2017, the Company attended meetings with more than 100 different investors at conferences, during investor roadshows, and at industry events. Crane Co. alsoNXT typically hosts an annual halfinvestor day investor event in New York City during the first quarter of the year to provide a thorough review of the prior year’s results, to discuss the Company’s outlook for the current year, and to review the Company’s corporate strategyportfolio and capital allocation policies.strategies. In 2022, our investor day event was held on March 30, concurrent with the initial announcement of our intent to separate into two independent companies.
During 2022, the Company also participated in meetings, phone calls and video conference calls with approximately 195 different investors at conferences, during investor roadshows, and in response to direct investor inquiries, an increase of approximately 70% from the prior year. The substantial increase in investor interaction during 2022 reflected our efforts to ensure thorough and transparent communications about the separation transaction to our current and potential future investors.
Our Vice President of Investor Relations and/or our Chief Financial Officer provide feedback from the investor and analyst meetings formally to the Board on a quarterly basis. Additional viewpoints and commentary from investors and analysts are incorporated into our comprehensive strategic review which is presented to the Board at least annually, and on an ad hoc basis as appropriate.
Stockholder Communications with Directors
The Board has established a process to receive communications from stockholders and other interested parties. Stockholders and other interested parties may contact any member (or all members) of the Board, any Board committee, or any Chair of any such committee by mail or electronically. To communicate with the Board, of Directors, any individual director or any group or committee of directors, correspondence should be addressed to the Board of Directors or any individual director or group or committee of directors by either name or title. All such correspondence should be sent to Crane Co.,NXT c/o Corporate Secretary, 100 First Stamford Place, Stamford, CT 06902.950 Winter Street, 4th Floor, Waltham, MA 02451. To communicate with any of our directors electronically, stockholders should use the following e-mail address: adiorio@craneco.com.corpsec@cranenxt.com.
All communications received as set forth in the preceding paragraph will be opened by the office of the Corporate Secretary for the sole purpose of determining whether the contents representthey contain a message to our directors. Any contents will be forwarded promptly to the addressee unless they are in the nature of advertising or promotion of a product or service, or are patently offensive or irrelevant. To the extent that the communication involves a request for information, such as an inquiry about Crane Co.NXT or stock-related matters, the Corporate Secretary’s office may handle the inquiry directly. In the case of communications to the Board or any group or committee of directors, the Corporate Secretary’s office will make sufficient copies of the contents to send to each director who is a member of the group or committee to which the envelope or e-mailcommunication is addressed.
2018 Proxy Statement 21
24
Item 1: Election of Directors
Board Structure
Board Leadership Structure
Our Corporate Governance Guidelines do not require that the roles of Chairman of the Board and Chief Executive Officer be held by different individuals, as the Board believes that effective board leadership structure can be highly dependent on the experience, skills, and personal interaction between persons in leadership roles. Theseroles and the needs of the Company at the time. Prior to the separation transaction, these leadership roles are currentlywere filled separately by our non-executivenon-employee Chairman of the Board, R.S. Evans,James L. L. Tullis, who possesses extensive experience with the Company and its operations, and by our Chief Executive Officer, Max H. Mitchell. Since the closing of the separation transaction, these leadership roles continue to be filled separately by our non-employee Chairman of the Board, John S. Stroup, who has extensive industry experience and public company board service, and by our Chief Executive Officer of Crane NXT, Aaron W. Saak. To assist in defining this leadership structure, the Board adopted a position description for the role of the non-executivenon-employee Chairman of the Board, which is incorporated into our Corporate Governance Guidelines. The principal duties are as follows:
Provide leadership to the Board and ensure that each director is making an appropriate contribution; |
Guide the Board’s discharge of its duties, including reviewing corporate strategy, monitoring risk management and compliance activities, and evaluating senior management performance and succession planning; |
Maintain an effective relationship with the Chief Executive Officer and act as a liaison between the Chief Executive Officer and the Board; |
| • | Chair meetings of the Board |
Organize and approve the agendas for Board meetings based on input from directors and the Chief Executive Officer; and |
Conduct a performance evaluation of the Board. |
The Board believes thiswill continue to monitor and assess its leadership structure has affordedto ensure it best serves the needs of the Company an effective combinationand its stockholders.
25
Item 1: Election of management and non-management experience, continuity and independence that has served the Board and the Company well.Directors
Committees of the Board
The Board of Directors has established an Audit Committee, a Management Organization and Compensation Committee, and a Nominating and Governance Committee. The Board of Directors has also established an Executive Committee, which meets when a quorum of the full Board of Directors cannot be readily convened. The memberships of these committees during 2017 wereprior to and since the closing of the separation transaction are as follows:
Roles and Responsibilities The Audit Committee is the Board’s principal agent in fulfilling legal and fiduciary obligations with respect to matters involving Crane Independence All members of the Audit Committee meet the independence and expertise requirements of the Following the closing of the separation transaction, the Board has determined that each of Mr. Dinkins, Mr. Stroup and | ||||||
Audit Committee
Current Chair M. Dinkins Current Members W. Grogan J. S. Stroup Pre-Separation Chair M. R. Benante Pre-Separation Members M. Dinkins R. E. McClain J. | ||||||
22 Crane Co.
Item 1: Election of Directors
| | Roles and Responsibilities The duties of the Management Organization and Compensation Committee include: coordinating the annual evaluation of the Chief Executive Officer; recommending to the Board Independence All members of the Management Organization and Compensation Committee, prior to and following the closing of the separation transaction, meet the independence requirements of the | |||||
Management Organization and Compensation Committee
Current Chair E. McClain Current Members W. Grogan J. L. L. Tullis |
Pre-Separation Chair J. M. Pollino Pre-Separation Members E. McClain C. G. McClure, Jr. J. S. Stroup J. L. L. Tullis | ||
26
Item 1: Election of Directors
Roles and Responsibilities The duties of the Nominating and Governance Committee include developing criteria for selection of and identifying potential candidates for service as directors, policies regarding tenure of service and retirement for members of the Board, Independence All members of the Nominating and Governance Committee, prior to and following the closing of the separation transaction, meet the independence requirements of the | ||||||
Nominating and Governance Committee
Current Chair J. L. L. Tullis Current Members M. Dinkins C. Kogl E. McClain Pre-Separation Chair R. C. Lindsay Pre-Separation Members M. R. Benante M. Dinkins C. G. McClure, Jr. |
2018 Proxy Statement 23
J. M. Pollino
Item 1: Election of Directors
Roles and Responsibilities The Board | ||||||
Executive Committee
Current Chair J. S. Current Members M. Dinkins A. W. Saak Pre-Separation Chair J. L. L. Tullis Pre-Separation Members M. H. Mitchell J. M. Pollino | ||||||
27
Item 1: Election of Directors
Executive Sessions of Non-Management Directors
ThreeAll nine of the meetings of the Board during 20172022 included executive sessions without management present, presided over by R. S. Evans,James L. L. Tullis, Chairman of the Board. Crane’s Corporate Governance Guidelines require our non-management directors to meet in executive session without management on a regularly scheduled basis, but not less than two times a year. The Chairman of the Board presides at executive sessions, unless he or she is a member of management, in which case the presiding person at executive sessions rotates on an annual basis among the Chairs of the Nominating and Governance Committee, the Audit Committee, and the Management Organization and Compensation Committee. If the designated person is not available to chair an executive session, then the non-management directors select a person to preside.
Board Meetings and Attendance
The Board of Directors met eightnine times during 2017.2022. Each director, other than Mr. Dinkins, who was unable to attend one Board meeting due to an unexpected, urgent personal matter, attended over 80%100% of the Board and Committee meetings held in the period during which he or she was a director and Committee member. In addition, it is Crane Co.’sNXT’s policy that each of our directors attend the Annual Meeting;our annual meetings either in person, virtually or telephonically; all then serving members of the Board were present at the 20172022 annual meeting except Ms. Pollino, who was unable to attend due to illness.meeting.
Board and Committee Evaluation Process
Board and committee evaluations play a critical role in ensuring the effective functioning of the Board. It is essential to monitor the Board, committee, and individual director performance and consider and act upon the feedback provided by each Board member. The Nominating and Governance Committee, in consultation with the Chairman of the Board, is charged with overseeingfacilitating an annual self-assessment of the Board’s performance, as well as an annual self-assessment undertaken by each committee of the Board. The multi-stepmultistep evaluation process begins with a questionnaire, and includes one-on-one discussions with the Chairman and individual Board members, and one-on-one discussions withbetween Committee Chairs and the members of eachtheir respective committee. The results are provided to the full Board, and the Board’s policies and practices are updated as appropriate to reflect director feedback.
24 Crane Co.
Item 1: Election of Directors
Director Education
It is important for directors to stay current and informed on developments in corporate governance best practices in order to effectively discharge their duties. Our directors are provided updates on corporate governance developments at regularly scheduled board meetings receive a focused, in-house governance and compliance training session annually, and are encouraged to participate in programs offered by nationally recognized organizations that specialize in director education. The Company reimburses its directors for their reasonable costs and attendance fees to participate in such programs.
Code of Business Conduct and Ethics
Crane NXT is committed to conducting its business in compliance with all applicable laws, rules and regulations and in accordance with the highest standards of business ethics. Accordingly, the directors, officers and all Company employees are required to act in accordance with Crane NXT’s Code of Business Conduct and Ethics. Our Code of Business Conduct and Ethics covers many areas of professional ethical conduct, including the protection and proper use of Company assets, confidentiality, conflicts of interest, compliance with laws and fair dealing with competitors, employees and other Company stakeholders. A copy of the Code of Business Conduct and Ethics is available on our website at www.investors.cranenxt.com/governance.
28
Item 1: Election of Directors
Conflicts of Interest; Transactions with Related Persons
Crane Co.NXT has established two Conflict of Interest Policies: CP-103, to which all officers and salaried employees are subject, and CP-103D, to which non-employee directors are subject. Those who are subject to the policies are required to disclose to the General Counsel in writing each outside relationship, activity, and interest that creates a potential conflict of interest, including prior disclosure of transactions with third parties. The General Counsel will determine whether the matter does or does not constitute an impermissible conflict of interest, or may in his or her discretion refer the question to the Audit Committee, which is responsible for reviewing significant conflicts of interest involving directors or executive officers and/or the Nominating and Governance Committee, which is responsible for reviewing director nominee independence requirements. The respective Committees will review the facts and make a recommendation to the Board. All directors, executive officers, and other salaried employees are required to certify in writing each year whether they are personally in compliance with CP-103 or CP-103D, as applicable, and whether they have knowledge of any other person’s failure to comply. In addition, each director and executive officer is required to complete an annual questionnaire which calls for disclosure of any transactions above a stated amount in which the director or officer or any member of his or her family has a direct or indirect material interest. The Board of Directors is of the opinion that these procedures in the aggregate are sufficient to allow for the review, approval, or ratification of any “Transactions with Related Persons” that would be required to be disclosed under applicable SecuritiesSEC rules.
Company Policy Regarding Hedging Transactions
Crane NXT’s Policy on Trading in Company Stock prohibits members of the Board of Directors, executive officers, and Exchange Commission rules.certain other employees designated as “Employee Insiders” (generally, employees involved in compiling or having access to monthly operating forecasts or other Company-wide financial information) from engaging in any hedging transactions. The policy applies to any transaction that allows the individual to continue to own the covered securities, but without the full risks and rewards of ownership, such as zero-cost collars and forward sale contracts. The policy applies to any Company stock owned by the individual, whether acquired through equity compensation awards or otherwise.
Corporate Governance Documents
The Board of Directors has adopted Corporate Governance Guidelines which reflect the Board’s commitment to monitor the effectiveness of policy-making and decision-making at both at the Board and management level,levels, with a view to enhancing long-term stockholder value. The Corporate Governance Guidelines are available on our website atwww.craneco.com/GovernanceGuidelineswww.investors.cranenxt.com/governance.
Copies of the charters of the Board committees are available on our website atwww.craneco.com/CharterAudit; www.craneco.com/www.investors.cranenxt.com/CharterAudit; www.investors.cranenxt.com/CharterCompensation; andwww.craneco.com/www.investors.cranenxt.com/CharterNominating, respectively.
2018 Proxy Statement 25
29
Item 1: Election of Directors
Corporate Governance and Sustainability
We value global diversity, respect human rights and the rule of law, and recognize environmental management among our highest priorities throughout the corporation. In embracing this important topic, we have established a senior management committee and created a management position to identify and track metrics on philanthropy, sustainability and equality. This committee publishes a separate report on the Company’s efforts and performance against established targets with respect to philanthropy, sustainability, and equality, which can be found at www.investors.cranenxt.com/esg. In summary of the details found in that report, following are examples of our actions and policies aimed at health and safety, philanthropy, diversity and inclusion, protecting the environment, governance and ethics, and supply chain management.
Health & Safety | • Strongly committed to the health and safety of our associates, and strive to continuously reduce the incidence and severity of job-related injuries • Utilize safe technologies, training programs, effective risk management practices, and sound science in our operations to minimize risk to our associates | |
Philanthropy | • Embrace philanthropy around the world, providing paid time off during the workday for our associates to volunteer and support charitable causes important to them • Annually facilitate the donation of approximately $19 million through three independent charitable funds (the largest of which is also our largest shareholder), to former associates in need, to local organizations in the communities in which our businesses operate, and in support of important global relief efforts | |
Diversity & Inclusion | • Commitment to diversity on our Board, and across our global workforce, with a focus on developing an inclusive and high-performance culture with trust and respect • Focused development for our associates leveraging a structured intellectual capital process with constructive reviews and various talent/leadership development initiatives endorsed by the executive management team | |
Protecting the Environment | • Comply with all applicable environmental laws governing the use, storage, discharge, and disposal of hazardous or toxic material • Seek to improve the sustainable operation of our facilities through the efficient use of energy, and commitment to reducing emissions, waste and water consumption | |
Governance & Ethics | • Annual review of Corporate Governance Guidelines by the Board and outside experts • Code of Business Conduct and Ethics adopted by our Board, as well as anti-bribery policies, and policies prohibiting the Company from engaging in the political process (associates, however, are encouraged to participate in the political process privately if they wish, on their own time and using their own resources) • Mandatory annual training for associates on ethics and anti-bribery • Maintain an actively managed, anonymous ethics hotline | |
Supply Chain Management | • Regularly audit and assess our supply chain • Maintain a strict supplier code of conduct that sets expectations about supplier behavior with respect to compensation, hours of labor, coercion and harassment, discrimination, workplace safety, environmental protection, and commercial bribery | |
30
Item 1: Election of Directors
Compensation of Directors
Director Compensation Program
Our director compensation program is reviewed annually by the Management Organization and Compensation Committee’s independent consultant and all changes are intended to align the program with the peer group median. The members of the Board, of Directors, other than Mr. Mitchell (who did not receive compensation for his service as a director while serving as Chief Executive Officer of Crane Holdings, Co. prior to the separation transaction) and Mr. Saak (who does not receive compensation for his service as a director), receive the following compensation:
A retainer of |
A retainer of $25,000 per year |
A retainer of |
Aretainer of $10,000 per year for each member of the Audit Committee other than the Chair; $7,500 per year for each member of the Management Organization and Compensation Committee or the Nominating |
No meeting fees will be paid unless the total number of meetings exceeds three more than the regularly scheduled meetings of the Board of Directors and the relevant committees. The compensation of Mr. Mitchell, who iswas Chief Executive Officer until the closing of the separation transaction on April 3, 2023, in addition to having been a director since January 31, 2014, is shown in the 2022 Summary Compensation Table on page 52.64.
Mr. Evans,Tullis, the non-executivenon-employee Chairman of the Board, receivesserving in that role until the closing of the separation transaction on April 3, 2023, received the same annual retainer as a non-employee director plus an incremental retainer of $110,000,$130,000 per year, payable in cash (or up to 100% in DSUs or fully vested shares, at the election of the Chairman), pursuant to an agreement under which the Company also provides him with an office, office assistant and technical support. Prior to the 2017 annual meeting, the incremental retainer was $100,000.. The Company also hashad a time-sharing agreement with Mr. EvansTullis under which he iswas permitted personal use of the corporate aircraft, for which he reimbursesreimbursed the Company the aggregate incremental cost.cost, until the closing of the separation transaction on April 3, 2023. See “Other Arrangements with our Named Executive Officers—Use of Company Aircraft” on page 49.61.
Deferred Stock UnitsThe Management Organization and Compensation Committee, which is composed solely of independent directors, has the primary responsibility for reviewing and considering any revisions to our director compensation program. The Management Organization and Compensation Committee undertook its annual review of the type and form of compensation paid to our non-employee directors in connection with their service on the Board and its committees for fiscal year 2022, and considered the results of an independent analysis completed by Frederic W. Cook & Co., Inc. (“FW Cook”). As part of this analysis, FW Cook reviewed non-employee director compensation trends and data from companies comprising the same compensation peer group used by the Management Organization and Compensation Committee in connection with its review of executive compensation. Pursuant to this compensation review process, and after considering FW Cook’s advice on industry best practice regarding the timing of equity grants, the Committee determined that no changes in the retainers for Board members were required, and maintained the current retainers set forth above. Further pursuant to this review, the Committee determined that no changes in the retainers for Committee Chairpersons and members were required, and maintained the current retainers set forth above. In addition, the Management Organization and Compensation Committee reviewed FW Cook’s advice, including peer group data and the substantive role of the Chairman of the Board, similarly determining that no changes in the Chairman’s compensation were required and maintained the current retainer set forth above.
DSUs are issued each year, generally as of the date of the annual meeting;meeting and pro rata if necessary; are forfeitable if the director ceases to remain a director until Crane Co.’sNXT’s next annual meeting, except in the case of death, disability, or change in control; and entitle the director to receive an equivalent number of shares of Crane Co.NXT stock, plus accumulated dividends, upon the director’s ceasing to be a member of the Board. In April 2017,May 2022, each non-employee
31
Item 1: Election of Directors
director received DSUs pursuant to this plan:plan as follows: Ms. McClain received 1,745 DSUs, Mr. EvansMcClure, Jr., received 3,915 DSUs, one director who had elected to receive the entire retainer in DSUs received 2,5032,043 DSUs, and the remaining non-employee directors each received 1,5401,546 DSUs. In connection with the separation, each Holdings DSU was adjusted by issuance of an additional Crane Company DSU under Crane Company’s stock incentive plan with substantially the same terms and conditions as the Holdings DSU. As a result, directors who held Crane Holdings, Co. DSUs now have both Crane NXT and Crane Company DSUs. The Crane Company DSUs will be payable at the same time as the corresponding Crane NXT DSUs after the director ceases to be a member of the Board.
Stock Ownership Guidelines for Directors
The Board of Directors has adopted stock ownership guidelines whichthat require each director to hold shares of Crane Co.NXT stock having a fair market value not less than five times the cash portion of the annual retainer for directors currently $75,000.(currently $90,000). A director must have attained this ownership level by the fifth anniversary of his or her first election as a director. As of the Record Date, all directors who had attained their fifth anniversary of service were in compliance with this ownership guideline, and each other director is making what the Board believes to be reasonable progress towards compliance with this ownership guideline.
26 Crane Co.
Item 1: Election of Directors
Director Compensation in 20172022
The following table shows the actual compensation in 20172022 of all directors except for Mr. Mitchell, ourSaak, who was hired by Holdings in November 2022 to serve as the Crane NXT Chief Executive Officer whoseupon completion of the separation transaction, and Mr. Mitchell, Holdings’ Chief Executive Officer until the completion of the separation transaction. As NEOs for 2022, their compensation is shown in the 2022 Summary Compensation Table on page 52.64.
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Total ($) | ||||||
| M. R. Benante | $ | 83,750 | $ | 125,525 | $ | 209,275 | |||
| E. T. Bigelow | $ | 95,750 | $ | 141,430 | $ | 237,180 | |||
| D. G. Cook | $ | 96,250 | $ | 141,430 | $ | 237,680 | |||
| R. S. Evans | $ | — | $ | 328,977 | $ | 328,977 | |||
| R. C. Lindsay | $ | 63,750 | $ | 134,853 | $ | 198,603 | |||
| P. R. Lochner, Jr. | $ | 91,250 | $ | 149,199 | $ | 240,449 | |||
| E. McClain | $ | 91,250 | $ | 130,591 | $ | 221,841 | |||
| C. G. McClure, Jr. | $ | 59,167 | $ | 120,695 | $ | 179,862 | |||
| J. M. Pollino | $ | 91,250 | $ | 130,591 | $ | 221,841 | |||
| P. O. Scannell | $ | 7,500 | $ | 202,606 | $ | 210,106 | |||
| J. L. L. Tullis | $ | 88,750 | $ | 141,430 | $ | 230,180 | |||
Name | Fees Earned or Paid in Cash(1) ($) | Stock Awards(2) ($) | Total ($) | |||||||||
M. R. Benante | 55,875 | 165,252 | 221,127 | |||||||||
M. Dinkins | 105,000 | 152,338 | 257,338 | |||||||||
R. C. Lindsay | 110,000 | 179,536 | 289,536 | |||||||||
E. McClain | 87,500 | 190,351 | 277,851 | |||||||||
C. G. McClure, Jr. | 58,750 | 206,488 | 265,238 | |||||||||
J. M. Pollino | 114,750 | 171,735 | 286,485 | |||||||||
J. S. Stroup | 100,000 | 146,209 | 246,209 | |||||||||
J. L. L. Tullis | 223,250 | 188,766 | 412,016 | |||||||||
| (1) | Amounts in this column include the cash value of vested shares of Crane Holdings, Co. common stock received in lieu of cash retainers at the election of the director. |
| (2) | Amounts shown in this column reflect the grant date fair value |
1,546 DSUs to each of Messrs. Benante, |
| • | An aggregate of |
32
Item 1: Election of Directors
Director Stock Ownership
All of the Company’s directors own stock in the Company. For more information regarding each director’s overall beneficial ownership, see “Beneficial Ownership of Common Stock by Directors and Management” on page 84.
33
| ITEM 2: RATIFICATION OF THE SELECTION OF AUDITORS | ||||||||
The grant date fair value of each DSU granted on April 24, 2017 was $77.91. The assumptions on which this valuation is based are set forth in Note 12 to the audited financial statements included in Crane Co.’s annual report on Form 10-K filed with the Securities and Exchange Commission on February 27, 2018.
At December 31, 2017, each non-employee director held the following number of DSUs:
| ||
2018 Proxy Statement 27
PROPOSAL 2
Item 2: Ratification of the Selection of Auditors
| The Board recommends votingFOR theRatification of the Selection of Deloitte & Touche LLP as the Company’s independent auditors for 2023 | |
|
The Board of Directors proposes and recommends that the stockholders ratify the Audit Committee’s selection of the firm of Deloitte & Touche LLP as independent auditors for Crane NXT Co. for 2018.2023. Deloitte & Touche LLP has been Crane Co.’sCrane’s independent auditor since 1979. Although ratification of this selection is not required by law, the Board of Directors believes it is desirable as a matter of corporate governance. If the stockholders do not ratify the selection of Deloitte & Touche LLP, the Audit Committee will reconsider the appointment of Deloitte & Touche LLP as Crane Co.’sCrane’s independent auditor. We expect that representatives of Deloitte & Touche LLP will attend the Annual Meeting, where they will have an opportunity to make a statement if they wish to do so and to respond to appropriate questions.
Unless otherwise directed by the stockholders, proxies that are properly executed and returned or submitted electronically will be voted for approval of the ratification of Deloitte & Touche LLP to audit our consolidated financial statements for 2018.2023.
Annual Evaluation and Selection of Auditors
The Audit Committee (the “Committee”) is responsible to select, in its sole discretion, the firm of independent auditors to audit Crane Co.’sCrane’s financial statements for each fiscal year. The Committee is also directly responsible for the appointment, compensation, retention, and oversight of the work of the independent auditors, including resolution of any disagreements whichthat arise between management and the auditor regarding financial reporting or other audit, review or attest services for the Company. The independent auditors report directly to the Audit Committee.
The Committee annually reviews and evaluates the performance of the Company’s independent auditors. In evaluating the independent auditors, the Audit Committee considers, among other things, the quality of the independent auditor’s service, the sufficiency of its resources, its independence and objectivity, and the length of time the firm has been engaged as Crane Co.’sCrane’s independent auditors.
Principal Accounting Firm Fees
Set forth below is a summary of the fees paid for the years ended December 31, 20172022, and 20162021 to Crane Co.’sCrane’s principal accounting firm, Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu, and their respective affiliates:
| 2017 | 2016 | |||||
| (in thousands) | ||||||
| Audit fees(a) | $ | 5,545 | $ | 6,869 | ||
| Audit-related fees(b) | $ | 400 | $ | 279 | ||
| Tax fees(c) | $ | 784 | $ | 552 | ||
| All other fees(d) | $ | 2 | $ | 2 | ||
| Total | $ | 6,731 | $ | 7,702 | ||
| 2022 | 2021 | |||||||||||
|
| (in thousands) | |||||||||||
Audit fees(a) | $ | 10,019 |
|
|
| $ | 5,540 | |||||
Audit-related fees(b) | $ | 275 |
|
|
| $ | 224 | |||||
Tax fees(c) | $ | 596 |
|
|
| $ | 863 | |||||
All other fees(d) | $ | 3 |
|
|
| $ | 3 | |||||
Total | $ | 10,893 |
|
|
| $ | 6,630 | |||||
| (a) | Audit services |
| (b) | Audit-related services consisted of: (i) benefit plan audits; (ii) agreed-upon procedures reports; and (iii) financial accounting and reporting consultations. |
28 Crane Co.
Item 2: Ratification of the Selection of Auditors
| (c) | Fees for tax compliance services totaled |
| (d) | Fees for all other services billed consisted of fees for software licenses. |
| 2017 | 2016 | ||||
| Ratio of tax planning and advice fees and all other fees to audit fees, | |||||
| audit-related fees and tax compliance fees | 2.6 | % | 1.6 | % | |
| Percentage of non-audit services approved by the Audit Committee | 100 | % | 100 | % |
34
Item 2: Ratification of the Selection of Auditors
|
| 2022 | 2021 | ||||||
Ratio of tax planning and advice fees and all other fees to audit fees, audit-related fees, and tax compliance fees | 1 | % | 6 | % | ||||
Percentage of non-audit services approved by the Audit Committee | 100 | % | 100 | % | ||||
Pre-Approval Policy and Procedures
Securities and Exchange CommissionSEC rules under the Sarbanes-Oxley Act of 2002 prohibit independent auditors of public companies from providing certain non-audit services, and require that other non-audit services be approved by the Audit Committee. The Company’s policy implementing this requirement has been in place since January 2003. That policy:
specifies certain types of services that our independent auditors are prohibited from performing; |
requires that management prepare a budget for non-prohibited services at the beginning of each |
requires that any expenditure outside of the budget also be approved by the Audit Committee in advance. |
Vote Required
Approval
VOTE REQUIRED
Ratification of the above resolutionselection of the auditors requires the affirmative vote of a majority of the votes cast on this question at the Annual Meeting of Stockholders by holders of shares of common stock present in person or represented by proxy and entitled to vote at the meeting. (See Questions and Answers aboutAbout These Proxy Materials and the Annual Meeting, page 76)90).
35
Item 2: Ratification of the Selection of Auditors
Report of the Audit Committee
In accordance with its written charter adopted by the Board, of Directors, the Audit Committee (the “Committee”) assists the Board of Directors in fulfilling its responsibility for oversight of the quality and integrity of the accounting, auditing, and financial reporting practices of Crane NXT, Co. All of the members of the Committee qualify as “independent” under the provisions of Section 10A of the Securities Exchange Act of 1934 and the rules of the Securities and Exchange CommissionSEC thereunder.
The members of the Committee are not professionally engaged in the practice of auditing or accounting and are not, and do not represent themselves to be, performing the functions of auditors or accountants. Members of the Committee rely without independent verification on the information provided to them and on the representations made by management and the independent auditors. Accordingly, the Committee’s oversight does not provide an independent basis to determine that management has maintained appropriate accounting and financial reporting principles or appropriate internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. Furthermore, the Committee’s considerations and discussions referred to below do not assure that the audit of Crane Co.’sCrane’s financial statements has been carried out in accordance with the standards of the Public Company Accounting Oversight Board (United States), that the financial statements are presented in accordance with generally accepted accounting principles, or that Crane Co.’sCrane’s auditors are in fact “independent.”
In discharging its oversight responsibility as to the audit process, the Committee:
received the written disclosures and the letter from the independent auditors required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent auditors’ communications with the Committee concerning independence; |
2018 Proxy Statement 29
Item 2: Ratification of the Selection of Auditors
discussed with the independent auditors their independence, and any activities that may impact their objectivity and independence, including fees for non-audit services, and satisfied itself as to the auditors’ independence; |
received a report on the quality control procedures of the independent auditors; |
received and discussed a report on critical audit matters; |
| • | discussed with management, the internal auditors, and the independent auditors the quality and adequacy of |
reviewed with the independent auditors and the internal auditors their respective audit plans and audit scope; |
reviewed with management the risk assessment and risk management procedures of Crane, |
discussed the results of the internal audit examinations; |
discussed with the independent auditors the matters required to be discussed |
discussed and reviewed, both with and without members of management present, the independent auditors’ examination of the financial statements. |
The Committee reviewed the audited financial statements of Crane Co. as of and for the year ended December 31, 2017,2022, with management and the independent auditors. Management is responsible for the preparation, presentation, and integrity of Crane Co.’sCrane’s financial statements, Crane Co.’sCrane’s internal controls and financial reporting process and the procedures designed to assure compliance with accounting standards and applicable laws and regulations. Crane Co.’sCrane’s independent auditors are responsible for performing an independent audit of Crane Co.’sCrane’s financial statements and expressing an opinion as to their conformity with generally accepted accounting principles.
Based on the above-mentioned review and discussions with the independent auditors, the Committee recommended to the Board of Directors that Crane Co.’sCrane’s audited financial statements be included in its Annual Report on Form 10-K for the year ended December 31, 2017,2022, for filing with the Securities and Exchange Commission.SEC.
The Committee approved a policy regarding services by Crane Co.’sCrane’s independent auditors, effective January 1, 2003. Under this policy, the independent auditors are prohibited from performing certain services in accordance with Section 202 of the Sarbanes-Oxley Act of 2002. With respect to non-prohibited services to be provided by the independent auditors,
36
Item 2: Ratification of the Selection of Auditors
the policy requires that a budget for such services be prepared by management and approved by the Committee at the beginning of each fiscal year, and any expenditure outside of the budget must also be approved by the Committee in advance. Pursuant to this policy, the Committee reviewed and approved the budget for the audit and other services to be provided by Deloitte & Touche LLP in 2018.2023. The Committee also approved the reappointment of Deloitte & Touche LLP to serve as independent auditors; the Board of Directors concurred in such appointment and directed that this action be presented to stockholders for ratification.
Submitted by:
The Audit Committee of the
Board of Directors of Crane NXT, Co.
E. Thayer Bigelow, Michael Dinkins, ChairMartin R. BenantePhilip R. Lochner, Jr.Ellen McClainCharles G. McClure, Jr.Jennifer M. Pollino
William Grogan
John S. Stroup
Incorporation by Reference.The Audit Committee Report in this Proxy Statement shall not be deemed incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act of 1933, as amended (the “Securities Act”) or the Securities Exchange Act, of 1934, and shall not be deemed filed under those Acts, except to the extent that Crane Co. specifically incorporates any such matter in a filed document by reference.
30 Crane Co.
37
| ITEM 3: ADVISORY VOTE ON COMPENSATION OF NAMED EXECUTIVE OFFICERS | ||||||||
Item 3: Advisory Vote on Compensation of Named Executive Officers
| ||
| PROPOSAL 3 The Board recommends votingFORtheAdvisory Vote to Approve the Compensation of our | |
|
This Proposal describes executive compensation for the Crane Holdings named executive officers for 2022. It is important to note that Mr. Saak was hired by Holdings in November 2022, with a view towards the planned separation and his eventual role as Chief Executive Officer of Crane NXT; his 2022 compensation reflects the transitional nature of this pre-separation role within Holdings. Upon the effectiveness of the separation transaction, and as of the Record Date, Mr. Mitchell’s compensation as an officer is no longer paid by Crane NXT, nor is that of Mr. Maue and Mr. D’Iorio.
Based on the recommendation of stockholders at the Company’s 2017 annual meeting of stockholders, and the Board’s consideration of that recommendation, the Company has determined that it will hold a non-binding advisory vote to approve the compensation paid by the Company to its named executive officers every year, until the next required stockholder vote to recommend the frequency of such votes.votes (see Proposal 4 in this Proxy Statement). Accordingly, unless the Board modifies its policy on the frequency of future advisory votes, the next advisory vote to approve our named executive compensation will occur at the 2024 annual meeting of stockholders. In accordance with the requirements of Section 14A of the Exchange Act and the related SEC rules, we are asking stockholders to express their opinion on the compensation of the named executive officers in 2017,2022, as described in the pages that follow in this Proxy Statement. This vote is non-binding and advisory, however, the Board will give due consideration to the opinion of the Company’s stockholders as expressed by their vote.
We believe that the compensation of our executive officers should be:
closely linked to the performance of the Company as a whole, the executive’s business unit (as applicable), and the individual executive; |
aligned with the Company’s annual operating plan and long-term strategic plans and objectives; |
attractive in the markets in which we compete for executive talent; and |
structured so as to reward actions in accordance with the Company’s values and standards and to discourage the taking of inappropriate risks, and thereby to uphold |
The Compensation Discussion and Analysis beginning on page 3340 explains in detail the elements of the Company’s executive compensation program with respect to our “named executive officers,” and the steps taken by the Company to ensure that the program, as implemented in 2017,2022, was aligned with these core principles. Balancing annual and long-term compensation elements, the program directly links incentive compensation for executives with increases in stockholder value, principally by means of annual cash bonuses based on achievement of performance goals set by the Management Organization and Compensation Committee at the beginning of the year, performance-based restricted share units whichthat vest in accordance with the Company’s total stockholder return relative to the S&P Mid-CapMidcap 400 Capital Goods Group over a three yearthree-year period, and stock options and time-based restricted share units that vest over a four-year period. The Company believes that this system, as put into practice under the supervision of the Management Organization and Compensation Committee, is instrumental in enabling the Company to achieve superior financial performance and investor returns.
2018 Proxy Statement 31
Item 3: Advisory Vote on Compensation of Named Executive Officers
The Board strongly endorses the Company’s actions in this regard, and recommends that stockholders vote for the following resolution:
RESOLVED, that the 20172022 compensation of the named executive officers as disclosed in thethis Proxy Statement is approved.approved by the stockholders on an advisory basis.
38
Item 3: Advisory Vote on Compensation of Named Executive Officers
Unless otherwise directed by the stockholders, proxies that are properly executed and returned will be voted for the resolution. Abstentions and broker non-votes will not count as votes for or against the proposal and will not be included in calculating the number of votes in favor of the proposal.
Vote Required
VOTE REQUIRED
Approval of the above resolution requires the affirmative vote of a majority of the votes cast on this question at the Annual Meeting of Stockholders by holders of shares of common stock present in person or represented by proxy and entitled to vote at the meeting. (See Questions“Questions and Answers aboutAbout These Proxy Materials and the Annual Meeting,Meeting”, beginning on page 76.90.) In accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and the related Securities and Exchange Commission rules, the resolution is non-binding and advisory; however, the Board will give due consideration to the opinion of the Company’s stockholders as expressed by their votes.
32 Crane Co.
39
Compensation Discussion and Analysis
| COMPENSATION DISCUSSION AND ANALYSIS | ||||||||
We believe that compensation should be directly linked to performance and highly correlated to stockholder value. This section of the Proxy Statement explains how, under the guidance of our Management Organization and Compensation Committee (the “Committee” or “Compensation Committee”), our executive compensation program is designed and operated with respect to our “named executive officers” or “NEOs”,“NEOs,” whose compensation is set forth in the Summary Compensation Table and other compensation tables contained in this Proxy Statement:Statement. The information presented relates primarily to decisions and performance outcomes of Crane Holdings, Co. before closing of the separation transaction, and the NEOs include those individuals who were serving as executive officers of Holdings as of December 31, 2022, as well as Mr. Saak, who was hired by Holdings in November 2022 to serve as Chief Executive Officer of Crane NXT after the closing of the separation transaction. It is expected that Crane NXT will mirror this compensation philosophy, and the practices and metrics described below will be adopted and used by Crane NXT, subject to future adjustments as the Crane NXT Compensation Committee determines to be appropriate.
Max H. Mitchell | President and Chief Executive Officer, Crane Holdings, Co., through April 3, 2023 | |
Richard A. Maue | Senior Vice President | |
Aaron W. Saak | President and Chief Executive Officer, Crane NXT, Co., effective April 3, 2023 | |
Anthony M. D’Iorio | Senior | |
| Vice President, General Counsel and Secretary | ||
Kurt F. Gallo | Senior Vice President | |
| * | Mr. Mitchell assumed the role of President and Chief Executive Officer of Crane Company on April 3, 2023, upon the separation transaction. |
Executive Compensation Index
| SECTION | PAGE | |||
| EXECUTIVE SUMMARY | 41 | |||
This section details compensation highlights and business activities in the past year that have an impact on compensation, and a high-level overview of our compensation practices. | ||||
| COMPENSATION PRINCIPLES | 47 | |||
This section describes our pay for performance philosophy and the principles by which our Compensation Committee has designed the incentive compensation programs. | ||||
| ELEMENTS OF COMPENSATION AND 2022 DECISIONS | 48 | |||
This section provides a detailed description of the elements that make up our compensation program and the rationale behind the metrics and corresponding performance targets. We also explore the principal conclusions for the Committee’s decisions. | ||||
| COMPENSATION DECISION-MAKING PROCESS | 55 | |||
This section outlines roles, responsibilities, and the process behind compensation decisions, as well as the means by which our peer group is reviewed and selected. | ||||
| POLICIES AND PRACTICES RELATED TO OUR EXECUTIVE COMPENSATION PROGRAM | 58 | |||
This section details our compensation risk assessment and varying policies in place to reinforce our commitment to the highest standards of compensation-related governance. | ||||
| OTHER ARRANGEMENTS WITH OUR NAMED EXECUTIVE OFFICERS | 60 | |||
This section describes other important agreements between Crane NXT and the NEOs. | ||||
40
Compensation Discussion and Analysis
Executive Summary
During 2017,This Compensation Discussion & Analysis summarizes the compensation decisions made by Holdings in 2022, reflecting the performance of Holdings and the compensation paid to its NEOs during that fiscal year. It is important to note that Mr. Saak was hired in November 2022 in support of the planned separation and to serve as Chief Executive Officer of Crane NXT, and his compensation in 2022 reflects the preparatory nature of that role within Holdings. It is also worth noting that, as of the Record Date, Messrs. Mitchell, Maue and D’Iorio’s compensation is no longer paid by Crane NXT.
The Crane NXT Board and Management are steeped in the broader Crane culture and Crane Business System. While we met or exceededexpect Crane NXT to grow and expand creatively and opportunistically within the markets where it competes, we also expect Crane NXT to continue to be guided by the same focus and discipline that has been a hallmark of the Crane organization for over 160 years.
Crane Holdings, Co. delivered strong financial performance and operating results during 2022, setting new records for segment profit and segment margins. Holdings delivered these strong results even though some of its largest end markets, most notably commercial aerospace and certain Crane Payment Innovations (CPI) verticals, remained depressed, with demand still below 2019 pre-novel coronavirus (“COVID-19”) levels. Further, these record results were achieved despite numerous challenges during the year including persistent and substantial inflation and ongoing supply chain disruptions. In addition to generating strong financial results, Holdings continued its consistent investment in numerous strategic growth initiatives to ensure that our businesses remain positioned to deliver profitable and sustainable above-market growth over the long-term. We believe that our performance is evidence of our consistent, differentiated, best-in-class execution capabilities enabled by the cadence and discipline of the Crane Business System, Crane’s strong and unique culture, and the performance of Crane’s experienced and highly capable senior management team.
In addition to strong financial objectives, delivering solid operational performance, while continuingduring 2022, Holdings announced three major strategic actions that we believe will unlock significant stockholder value.
| • | On March 30, 2022, Holdings announced its intention to separate into two independent, publicly traded companies to optimize investment and capital allocation, and to accelerate growth. Holdings’ Board of Directors and management believe that the creation of two market focused companies with distinct product and service offerings will better position each business to deliver long-term growth and create value for all stakeholders, including customers, investors and our associates. |
| • | On April 25, 2022, Holdings announced an agreement to divest Crane Supply, its Canadian distribution business. |
| • | On August 15, 2022, Holdings announced the sale of a subsidiary holding all asbestos liabilities and related insurance assets to permanently remove all asbestos related liabilities and obligations from the Company’s balance sheet. |
Taken together, these three actions position Crane Co.both companies for long-term stockholdersubstantial value creation. Thiscreation entering 2023.
The market’s view of Holdings’ strong performance, drove Crane Co.’scontinued investment for growth, strategic actions, and preparations for the separation transaction is reflected in its stock price higher,performance, with 2017 total stockholder return above(share price appreciation plus reinvested dividends) (“TSR”) outpacing the most relevant benchmark indices during the last one-year (2022) and two-year (2021-2022) periods. Three-year (2020-2022) TSR trailed that of the most relevant benchmark stock index.indices which reflects outperformance in 2021 and 2022 that was more than offset by the stock’s relative underperformance in 2020.
41
Compensation Discussion and Analysis
Crane Holdings, Co. 2017 TSR Better than Benchmark Indicesfor Periods Ending December 31, 2022
Given
A substantial majority of the compensation for our NEOs is performance-based and thus varies with the Company’s actual performance, consistent with the Management Organization and Compensation Committee’s consistentcontinued focus on aligning pay with performance, all variable elementsperformance. Please see the “Pay for Performance Alignment” section on page 46 for a more detailed discussion of management’s compensation increased compared to 2017, reflectingthis alignment.
2022 Performance Highlights
Strong Financial Results Despite Ongoing Market Challenges
Final 2022 financial and operational results, adjusted for strategic actions, were substantially above our original financial targets for the improved business performanceyear, driven by a combination of a better-than-expected recovery in certain end markets, consistent and total stockholder return compared to the prior year.strong operational execution, and substantial benefits from strategic growth investments. Specifically:
2018 Proxy Statement 33
Compensation Discussion and Analysis
2017 Performance Highlights
Continued to Execute on Near-Term Priorities in 2017
In 2017, the Company delivered strong financial results that exceeded our operating plan objectives. Specifically:
We reported GAAP earnings per diluted share (“EPS”) of |
| • | Cash used for operating activities in | |
| 2022 was $152 million, compared to cash provided by operating activities of $499 million in 2021. Cash used for operating activities in 2022 included outflows of $605 million related to the strategic divestiture of asbestos-related assets and liabilities and other portfolio actions. Capital expenditures in 2022 were $58 million, compared to $54 million last year. Free cash flow (cash provided by operating activities less capital spending) in 2022 was |
| • | Operating margins declined to 10.9% in 2022, compared to 15.5% in 2021, driven primarily by a | |
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Continue*See “Non-GAAP Reconciliation” beginning on page 86 for more detail regarding Special Items impacting Adjusted EPS, free cash flow and adjusted operating margins, as well as a reconciliation of the non-GAAP measures used herein.
42
Compensation Discussion and Analysis
Continued to PursueExecute Against Consistent Long-Term Organic Growth Strategy
Crane Co. isDespite continued widespread global supply chain disruptions and inflationary pressure during 2022, our long-term strategy remains unchanged, and each post-separation company will continue to follow the core of that business growth strategy. We are a diversified manufacturer of highly engineered industrial technology products. We choose to compete in markets where we have competitive differentiation and scale. We will continue to leverage our resources as an integrated operating company, and to reinvest in our three global growth platforms—Fluid Handling, Payment Technologies and Commercial Aerospace—platforms, both organically and through strategic acquisitions.acquisitions, while also pursuing near-adjacencies for additional growth. We believe that this strategy will enable us to deliver above-median, strong free cash flow and EPS growth over time.
We will continue to execute this strategy while remaining committed to the values of our founder, R.T. Crane, who resolved to conduct business “in the strictest honesty and fairness; to avoid all deception and trickery; to deal fairly with both customers and competitors; to be liberal and just toward employees; and to put my whole mind upon the business.”
34 Crane Co.
Compensation Discussion and Analysis
With this framework, we continued to position the Company for long-term sustainable growth in 2017. Specificacross our businesses during 2022 with some significant accomplishments, includedincluding the following:
NEW PRODUCT DEVELOPMENT AND GROWTH INITIATIVES
Crane Holdings, Co. successfully introduced a number of new products and solutions in each segment during the last three years and experienced growth across most of its portfolio in 2022. Some notable examples, among others:
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| • | Continued to execute on a | ||
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| • | Experiencing continued growth in | ||
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43
Compensation Discussion and Analysis
|
| • | Process Flow Technologies |
| • | The process valve business within thissegment continued to expand the breadth of its product portfolio, successfully launching products to broaden its valve portfolio. During 2022, the most notable product launch was the L-TORQ next generation sleeved plug valve for specialty chemical and other applications with abrasive and corrosive media. The L-TORQ valve simplifies operations and repairability, complies with the newest fugitive emissions standards, and requires 50% less torque which substantially reduces the size and cost of associated actuation. We also successfully launched a line of next-generation digital transducers, with testing currently underway for OEMs in hydrogen applications. The process valve business is also making substantial progress on the development of a bellow-sealed globe valve, one of its first offerings for the high-graph liquid hydrogen market. The process valve business also continued to successfully commercialize other products launched over the last few years including its polypropylene-lined large diameter pipe product line, a growing range of metal seated ball valves, the FK-TrieX™ valve for severe service applications, and a family of digital pressure transmitters. Outside of the process business, our Crane Pumps & Systems business continues to commercialize its recently introduced line of envie3™air-filled motors that materially expand the range of addressable applications for its pump solutions, as well as expanding its portfolio of SITHE™ chopper and BLADE™ grinder pump products. Our Building Services & Utilities business also continues to expand its MK3™ line of pressure independent control valves with associated connectivity, and its portfolio of restrained water couplings. |
| • | 2022 core sales growth of 8% included substantial contribution from numerous growth initiatives, including recent new product introductions and a consistent focus on commercial execution including our key account and channel management processes. An example of the benefits of new product introductions paired with commercial execution is our nearly 50% growth in 2022 for municipal wastewater pumps utilizing our new high-efficiency motor and superior non-clog technology which drive |
Strategic and Portfolio Actions To Unlock Stockholder Value
Management also took substantial actions during 2022 to strategically position Holdings for continued profitable growth and stockholder value creation. These strategic decisions were enabled by years of profitable growth that gave us the scale and financial strength to take bold steps to transform the structure and growth profile of the Company. Specific actions included:
| • | On March 30, 2022, Holdings announced its intention to separate into two independent, publicly traded companies to optimize investment and capital allocation, and to accelerate growth. Holdings’ Board of Directors and management believed, and continue to believe, that the creation of two market focused companies with distinct product and service offerings will better position the Companies’ businesses to deliver long-term growth and create value for customers, investors and our associates, with each post-separation company benefiting from: |
| • | Deeper operational focus, accountability and flexibility to meet customer requirements; |
| • | Increased operating and financial flexibility to pursue growth opportunities; |
| • | Tailored capital allocation strategies aligned with each company’s distinct business strategies and industry specific dynamics; |
44
Compensation Discussion and Analysis
| • | Enhanced ability to attract a shareholder base aligned with each company’s clear value proposition; and, |
| • | Enhanced ability to pursue accretive M&A opportunities, with the benefit of an independent equity currency reflective of the strength of each company. |
| • | On April 25, 2022, Holdings announced an agreement to divest Crane Supply, the Company’s Canadian distribution business, to further demonstrate our commitment to reshaping our portfolio to accelerate growth and provide a |
| • | On August 15, 2022, Holdings announced the sale of a subsidiary holding all asbestos liabilities and related insurance assets to permanently remove all asbestos related liabilities and obligations from Holdings’ balance sheet. This transaction provided finality and certainty to investors regarding asbestos obligations, and we believe it removed certain investor and management distractions related to asbestos related risks. Further, eliminating ongoing payments for asbestos-related defense and indemnity costs will |
2018 Proxy Statement 35
Compensation Discussion and Analysis
| • | During the first two quarters of 2022, Holdings also completed a $300 million share repurchase program that was announced in October 2021. The repurchases reflected the strength of Holdings’ balance sheet position, challenges deploying capital on acquisitions in the current market environment, and management and the Board’s strong conviction in Holdings’ medium- and long-term outlook. |
Taken together, we believe that theour execution on growth initiatives, and as well as our strategic actions, taken during 2017 position the Company for years of profitable growth and the combination of our core, underlying business prospects, along with the recent acquisitions and repositioning initiatives, is expected to lay the groundwork for average adjusted EPS growth in excess of 10% annually for the next several years.stockholder value creation.
Compensation Framework
The mix of target total direct compensation (base salary, target annual incentive awards, and long-term incentive awards) for 20172022 was structured to deliver the following approximate proportions of total direct compensation to our Chief Executive OfficerCEO and the other NEOs (on average) if target levels of performance are achieved.achieved and is expected to continue into 2023 for Mr. Saak.
Over 80%85% of CEO and 70% of other NEOs Target Pay is Performance-Based
Chief Executive Officer
Totals may not sum due to rounding. 45
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| 60% | 40% |
| PRSUs | Stock Options |
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| 50% | 35% | 15% |
| PRSUs | Stock Options | TRSUs |
36 Crane Co.
Compensation Discussion and Analysis
Other NEOs
Totals may not sum due to rounding.
Graph excludes Mr. Saak’s compensation as he was hired by Holdings in November 2022 to serve as Chief Executive Officer of Crane NXT and his 2022 TRSU grant is not representative of the Company’s full year aggregate incentive programs.
Pay for Performance Alignment
Strong Correlation betweenBetween Pay and Performance.A substantial majority of the compensation for our Named Executive OfficersNEOs is performance-based and thus varies with the Company’s actual performance. AnnualBased on the Company’s strong financial performance and TSR in 2022, the annual cash bonuses for our CEO and other corporate NEOs which are linkedwere above target. PRSU vesting was affected by underperformance on TSR in 2019 and 2020, with the tranche of PRSUs tied to the Company’s TSR from 2020-2022 vesting at 52.6%, an increase from 2019-2021 vesting at 25% of target and 2018-2020 vesting at 0% of target.
Annual Bonus Directly Tied to Crane’s EPS and free cash flow, were 48% of target in 2015, 124% of target in 2016Free Cash Flow
Annual Period | Minimum | Target | Maximum | |||
2022 |  | |||||
2021 |  | |||||
2020* |  | |||||
| * | The 2020 compensation metrics and performance targets were established prior to (and before we could anticipate) the global disruption and impact of the COVID-19 pandemic. In lieu of making mid-year plan adjustments during the COVID-19 pandemic, the Compensation Committee instead chose to exercise its discretion at the low end of target range for the 2020 annual incentive bonus payments (50% for corporate NEOs other than the CEO who received a 13% payout) to reconcile the low formulaic payout based on actual, pandemic-impacted financial performance with the quick and decisive actions taken by management to protect the Company’s associates, stabilize the Company’s finances, meet customer demand in a difficult operating environment, and position the Company to emerge stronger in 2021. No adjustments were made to long-term incentive awards, and there were no pandemic-related adjustments made to 2021 or 2022 annual incentive bonus payments. |
46
Compensation Discussion and 104.3% of target in 2017.Analysis
PRSU Vesting of performance-based restricted share units (PRSUs) granted to our NEOs was 86% of target for the three year period 2013-2015, 115% of target for the three year period 2014-2016 and 170% of target for the three year period 2015-2017, as shown in the chart below. Vesting of PRSUs is based on the percentile ranking of the Company’s total stockholder return (TSR) relative to the TSRs of the other constituent companies in the S&P MidCap 400 Capital Goods Group.
PRSU Payout Directly Tied to Crane’s Relative TSR
Three-year period | Threshold (25th percentile) | Target (50th percentile) | Maximum (75th percentile) | |||
2020-2022 |  | |||||
2019-2021 |  | |||||
2018-2020 |  | |||||
Percentile Rank of Crane Co. TSR vs. TSRs of All OtherCompanies in S&P MidCap 400 Capital Goods Group
Stockholder Feedback For the annual advisory non-binding vote regarding compensation of our NEOs at the 2022 annual meeting of stockholders, more than 96% of the votes cast were in favor of the resolution approving NEO compensation in 2021. The Company believes the level of support from its stockholders reflected by this vote is evidence that the Company’s pay for performance policies are working and are aligned with its stockholders’ interests. | Say-On-Pay Vote
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Stockholder Feedback
For the annual advisory non-binding vote regarding compensation of our NEOs at the 2017 annual meeting, more than 97% of the votes cast were in favor of the resolution approving NEO compensation in 2016.
Compensation Best Practices
The Committee is firmly committed to implementing a compensation program that aligns management and stockholder interests, encourages executives to drive sustainable stockholder value creation, and helps retain key personnel. Key elements of our pay practices are set forth in the Proxy SummaryStatement and explained in more detail in the “Policies and Practices Related to ourOur Executive Compensation Program” section below.
2018 Proxy Statement 37
Tablebeginning on page 58. See “Compensation Best Practices” chart on page 7 for a summary of Contentsour compensation best practices.
Compensation Discussion and Analysis
Compensation Principles
We believe that compensation should be directly linked to performance and highly correlated to stockholder value. The principles that guide us as we make decisions involving executive compensation are that compensation should be:
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| 1 | Based on performance:
| 2 | Aligned with the annual operating plan and longer term strategic plans and objectives to build sustainable value for stockholders | 3 | Competitive given relevant and appropriate market conditions in order to attract and retain highly qualified executives | 4 | Consistent with high standards of corporate governance and designed to avoid encouraging executives to take risks that are reasonably likely to have a material adverse effect on the Company or to behave in ways that are inconsistent with the Company’s objectives, values, and standards of behavior
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We also believe that it is important for our NEOs and other executives to have an ongoing long-term investment in the Company as outlined below under “Stock Ownership Guidelines.”Guidelines” on page 58.
We design our performance-based incentive compensation so that variation in performance will result in meaningful variation in the earned compensation paid to our NEOs and other key executives. Thus, actual compensation amounts
47
Compensation Discussion and Analysis
will vary above or below targeted levels depending on performance of the Company and/or business unit and achievement of individual performance goals.
The principal performance measures selected by the Committee to drive annual incentive compensation are, for the Chief Executive Officer and other corporate executives including Mr. Maue and Mr. duPont in 2017, earnings per share and free cash flow (cash provided by operating activities less capital spending) for the Company as a whole and, for executives with direct or supervisory operating unit responsibility including Messrs. Ellis and Pinkham in 2017, operating profit and free cash flow for their respective business units. These performance criteria were chosen for the variable incentive plans because they focus our executive officers on the Company’s long-term strategic goal of driving profitable growth in our businesses, both organically and through acquisitions, which we believe will increase stockholder value. For our PRSUs, the performance measure is total stockholder return (TSR) for the Company over a three year period relative to the TSR of the constituent companies in the S&P Midcap 400 Capital Goods Group, a meaningful measure of stockholder value.
38 Crane Co.
Compensation Discussion and Analysis
Elements of Compensation and 2022 Decisions
The following table summarizes the major elements of our executive officer compensation program.
Compensation Element | Principal Objectives | Key Characteristics | |||
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Base Salary | To provide a fixed amount for performing the duties and responsibilities of the position |  | •Determined based on overall performance, level of responsibility, competitive compensation data, and comparison to other Company executives | ||
Annual | To motivate executive officers to achieve |  | •Payment based on achievement of business unit and Company-wide performance goals relative to annual pre-established targets | ||
Performance-Based Restricted | To motivate executive officers to drive long-term profitable growth |  | • Number of shares actually earned based on relative •Earned shares vest upon conclusion of the | ||
Stock | To attract and retain executive officers and align their interests with long-term stockholder interests |  | •Grants vest ratably over four years •Value realized dependent on Company stock price appreciation | ||
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Time-Based | To retain executive officers and drive profitable growth |  | • Grants vest ratably over four years •Value realized varies with Company stock price performance | ||
To enhance performance incentives, long-term awards to the CEO are comprised solely of PRSUs (60%) and stock options (40%). The CEO does not receive TRSUs.
| * | PRSUs and TRSUs may be collectively referred to in this Proxy Statement as “RSUs.” |
For annual bonus and long-term stock-based compensation, the Committee calibrates award values for targeted performance by reference to the 50th percentile of competitive peer company compensation, recognizing that the competitive range of the median is +/- 15% of the benchmarking data. Within that range, the competitive positioning for individual executives may vary above or below the median based on factors such as tenure, experience, proficiency in role and criticality to the organization. As noted above, the Committee may determine to increase or decrease long-term stock-based compensation based on Company and/or individual performance during the previous year, the Company’s stock price relative to historical stock price trends, availability of shares in the Company’s Stock Incentive Plan and other factors.
Base Salary
Base salary is fixed compensation paid to each executive for performing normal duties and responsibilities. We determine the amount at the date of hire based on competitive market data, current salary levels within the Company, and the compensation valuesalary level needed to attract the particular executive. We review and determine the amount annually based on the executive’s overall performance, competitive compensation data, level of responsibility, and comparison to other Company executives.
Base salaries for certain executive officers were increased effective January 30, 2017.25, 2022, in connection with annual merit increases. After giving effect to annual meritsuch increases, in January 2017 averaging 4.5% for all executive officers, the base salaries for most of our named executive officersNEOs were all within the competitive range of +/- 15% in relation to the 50th50th percentile of competitive market data per the Company’sCommittee’s independent compensation consultants, Frederic W. Cook & Co., Inc. (“consultant, FW Cook”).Cook. In light of the pending separation transaction, Mr. Mitchell’s compensation was held flat for 2023, to be reassessed by the Board of Crane Company (where he will serve as President and Chief Executive Officer) as he leads that company post-separation.
2018 Proxy Statement 39
48
Compensation Discussion and Analysis
| * | Mr. Saak was hired on November 28, 2022, to serve as Chief Executive Officer of Crane NXT, and, effective as of the separation date, Messrs. Mitchell, Maue and D’Iorio are no longer officers of Crane NXT. |
Annual Incentive Compensation
We pay our executive officers cash bonuses based on the attainment of Company and business unit performance goals established at the beginning of the yearin January and an assessment of individual performance conducted at the end of the year.
Early in the year, the Committee establishes and approves the annual target bonus objectives and award opportunities for each of our named executive officers,NEOs, subject to review and approval by the Board in the case of the Chief Executive Officer.
In making these determinations about performance targets, the Committee considers a variety of factors including financial elements of the annual operating plan, comparison to prior year results, the general business outlook for the coming year, and the opinions of analysts who follow the Company, and our diversified industrial manufacturing peers.
Our Chief Executive Officer and other officers participate in the discussions regarding annual incentive objectives so they can provide their input and understand the expectations of each incentive plan component. Each participating executive receives a confirmation of his or her annual bonus objectives and payout range after it has been approved by the Committee.Committee (the Board in the case of the Chief Executive Officer). Annual incentive plan objectives are not modified during the year, although the Committee may determine to exclude certain special items impacting earnings per shareEPS or free cash flow, either known at the beginning of the year or occurring during the year.
Because Mr. Saak was hired late in 2022, he was not eligible for a 2022 annual incentive award. The following discussion regarding 2022 annual incentive compensation therefore does not apply to Mr. Saak.
The Committee reviews the performance results for the Annual Incentive Plan, including Company and business unit results and individual performance, at its regularly scheduled January meeting, which is generally the first meeting following the end of the Company’s fiscal year.year in order that full-year performance may be considered. Based on this review, the Committee determines and approves the annual cash bonuses for each of our executive officers.
49
Compensation Discussion and Analysis
Competitive Positioning of Incentive Awards |
For annual bonus and long-term stock-based compensation, the Committee calibrates award values for targeted performance by reference to the 50th percentile of the market data for similarly sized companies, recognizing that the competitive range of the median is +/- 15% of the benchmarking data. The competitive positioning for individual executives may vary above or below the median based on factors such as tenure, experience, proficiency in role, and criticality to the organization. As noted above, the Committee may determine to increase or decrease long-term stock-based compensation based on Company and/or individual performance during the previous year, the Company’s stock price relative to historical stock price trends, availability of shares in the Company’s Stock Incentive Plan, and other factors. |
Annual Incentive Objectives for 2017—2022—CEO and Other Corporate NEOs
Performance metrics for 20172022 consisted of earnings per shareEPS and free cash flow (cash provided(each as adjusted for special items by operating activities less capital spending)the Committee for bonus calculation purposes under the Annual Incentive Plan, and which adjustments may in some cases differ from the adjustments made for reporting purposes), weighted 75% / 25% respectively, for the Chief Executive Officer and other corporate NEOs. In addition to the targeted performance goals, for each performance metric, the Committee set minimum threshold and maximum cap values, so that actual payouts could range from 0% to 200% of the target award amounts. The weighting of these metrics, the same as in 2015 and 2016, was designed for profitable growth as the primary objective but with a significant ancillary objective in maintaining a strong and efficient balance sheet.
For earnings per share,In January 2022, the Committee established aan EPS target of $4.53$7.48 to align with our annual operating plan. The Committee also established a payout range for earnings per shareEPS from $3.62$5.98 (0% payout) to $5.44$8.98 (200% payout). For free cash flow, the Committee established a target of $250 million. For this performance metric, the Committee established$352.9 million with a payout range from $175$247.0 million (0% payout) to $325$458.8 million (200% payout). Actual performance compared to annual incentive objectives for this group were as follows:
Corporate Objectives | Target ($) | Actual ($) | Performance relative to Target Range | Weight | Calculated Payout (%) | |||||||||||||||
Adjusted EPS | 7.48 | 7.87 | 125.9% | 75% | 94.4% | |||||||||||||||
Adjusted free cash flow | 352.9M | 412.0M | 155.6% | 25% | 38.9% | |||||||||||||||
Weighted payout % |
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| 133.3% | |||||||
The graphs below show the performance targets and related ranges set by the Committee in February 2017January 2022 and the actual performance in 2017 for the2022. These corporate financial metrics asare adjusted for special items by the Committee for bonus calculation purposes of bonuses under the Annual Incentive Plan.Plan, which adjustments may in some cases differ from the adjustments made for reporting purposes.
 |  |
40 Crane Co.
50
Compensation Discussion and Analysis
Performance Targets and Bonuses for Operations NEOs in 20172022
For Messrs. Pinkham and Ellis,Mr. Gallo, Senior Vice PresidentsPresident with responsibility for certain business operations (Aerospacethe Payment & Electronics, Crane Payment Innovations, Crane Merchandising SystemsTechnologies and Engineered Materials in the case of Mr. Pinkham, and our Fluid Handling businesses, in the case of Mr. Ellis), performance metrics for 20172022 were operating profit (70% of target bonus) and free cash flow (30% of target bonus) based on results of the businesses for which they werehe was responsible. While Mr. Maue has operational responsibility for the Aerospace & Electronics segment, his bonus is based solely on his performance as Chief Financial Officer and not his operational responsibilities.
Kurt F. Gallo, Senior Vice President
The performance metrics approved by the Committee for Mr. PinkhamGallo were aggregate operating profit of our Aerospacethe Payment & Electronics, Crane Payment Innovations, Crane Merchandising SystemsTechnologies and Engineered Materials businesses, with a target of $373.8$351.5 million (100% payout) and a payout range from $299.1$281.2 million (0% payout) to $428.0$421.9 million (200% payout), and aggregate free cash flow from such businesses, with a target of $216.2$292.7 million (100% payout) and a payout range from $171.9$234.1 million (0% payout) to $250.6$351.2 million (200% payout).
The Actual performance metrics approved by the Committee for Mr. Ellis were aggregate operating profit ofGallo’s businesses compared to these annual incentive objectives are set forth in the Fluid Handling businesses, with a target of $115.7 million (100% payout) and a payout range from $89.6 million (0% payout) to $135.7 million (200% payout), and aggregate free cash flow from such businesses, with a target of $75.0 million (100% payout) and a payout range from $57.4 million (0% payout) to $88.0 million (200% payout).tables immediately below.
Operations Objectives—K. F. Gallo (Payment & Merchandising Technologies and Engineered Materials) | Target ($) | Actual ($) | Performance relative to Target Range | Weight | Calculated Payout (%) | |||||||||||||||
Operating profit | 351.5M | 382.0M | 143.4% | 70% | 100.4% | |||||||||||||||
Free cash flow | 292.7M | 381.0M | 200% | 30% | 60% | |||||||||||||||
Weighted payout % |
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| 160.4% | |||||||
Named Executive Officers’ Bonuses for 20172022
In January 2018,2023, the Committee reviewed management’s reports on the performance of the Company, the relevant business units, and the individual named executive officersNEOs in 20172022 against the relevant bonus objectives. In considering Company performance, and consistent with past practice, the Committee excluded certain special items as reported (relating to certain merger and acquisition expenses, repositioning costs and effects of the 2017 revisions to the Internal Revenue Code) from earnings per share and free cash flow. The resulting calculations resulted in a corporate percentage payout percentage of 104.3%133.3% (for Mr. Gallo, see the section entitled “Performance Targets and Bonuses for Operations NEOs” on page 51).
The approved payout percentages and cash bonuses for our corporate and operations NEOs for 20172022 are as follows:
| Corporate Objectives | Target | Actual (adjusted) | Performance relative to Target | Weight | Payout % | |||||||||||
| Earnings per share | $ | 4.53 | $ | 4.48 | 94.5 | % | 75 | % | 70.9 | |||||||
| Free cash flow | $ | 250.0 | M | $ | 275.2 | M | 133.6 | % | 25 | % | 33.4 | |||||
| Weighted payout % | 104.3 | |||||||||||||||
| Operations Objectives—Louis Pinkham | Target | Actual (adjusted) | Performance relative to Target | Weight | Payout % | |||||||||||
| Operating profit | $ | 373.8 | M | $ | 371.7 | M | 97.6 | % | 70 | % | 68.3 | |||||
| Free cash flow | $ | 216.2 | M | $ | 236.9 | M | 160.6 | % | 30 | % | 48.2 | |||||
| Weighted payout % | 116.5 | |||||||||||||||
| Operations Objectives—Brad Ellis | Target | Actual (adjusted) | Performance relative to Target | Weight | Payout % | |||||||||||
| Operating profit | $ | 115.7 | M | $ | 121.5 | M | 129.2 | % | 70 | % | 90.4 | |||||
| Free cash flow | $ | 75.0 | M | $ | 84.2 | M | 171.2 | % | 30 | % | 51.4 | |||||
| Weighted payout % | 141.8 | |||||||||||||||
| Named Executive Officer | Bonus % of Salary | Bonus Target | Bonus Paid | ||||||
| M. H. Mitchell | 110 | % | $ | 1,072,500 | $ | 1,118,618 | |||
| R. A. Maue | 75 | % | $ | 405,000 | $ | 422,415 | |||
| L. V. Pinkham | 70 | % | $ | 357,000 | $ | 415,941 | |||
| B. L. Ellis | 70 | % | $ | 308,000 | $ | 436,652 | |||
| A. I. duPont | 70 | % | $ | 305,612 | $ | 318,753 | |||
2018 Proxy Statement 41
Named Executive Officer | Bonus Target (% of Salary) | Bonus Target ($) | Payout (%) | Bonus Paid ($) | ||||||||||||
M. H. Mitchell | 120% | 1,440,000 | 133.3 | 1,919,520 | ||||||||||||
R. A. Maue | 80% | 575,877 | 133.3 | 767,644 | ||||||||||||
A. W. Saak* | — | — | — | — | ||||||||||||
A. M. D’Iorio | 70% | 367,527 | 133.3 | 489,913 | ||||||||||||
K. F. Gallo | 70% | 368,301 | 160.4 | 590,755 | ||||||||||||
| * | Mr. Saak joined the Company in November 2022 and was not eligible for a 2022 incentive bonus payout. He was granted a cash sign-on bonus of $700,000 to compensate for the 2022 bonus forfeited from his current employer. The bonus was payable $350,000 upon signing and $350,000 in March 2023 and is subject to clawback and other provisions pursuant to the terms of his employment agreement. The portion of this sign-on bonus paid in 2022 is disclosed in the Summary Compensation Table. |
Compensation Discussion and Analysis
Long-Term Equity Incentive Compensation
The Stock Incentive Plan is used to provide long-term incentive compensation through stock options and performance-based restricted share units,PRSUs, as well as retention of employees through time-based restricted share units.TRSUs. We believe that employees approach their responsibilities more like owners as their holdings of, and potential to own, stock increase.
The Committee determined an overall target dollar value for long-term equity incentive awards for each of the NEOs. In determining these amounts, the Committee considered the competitive market data compiled by FW Cook, Company
51
Compensation Discussion and Analysis
and individual performance in 2021, and our historical grant practices including the number of shares and the fair market value of the stock. The Committee then allocated the total target dollar amount among the applicable award types, as follows: for our Chief Executive Officer, 55% as PRSUs, 25% as stock options and 20% TRSUs; and for each of the other NEOs, 50% as PRSUs, 25% as stock options, and 25% as TRSUs. To determine the target number of PRSUs and the number of stock options and TRSUs, the Committee divided the applicable dollar amount by the closing price of our common stock for the PRSUs and TRSUs and by the Black-Scholes accounting value for the stock options (rounded in each case to the nearest whole share) on the date the awards were approved.
Mr. Saak received only an award of TRSUs (no PRSUs or Options), to compensate him for equity forfeited at his former employer.
The table below sets forth, for each of our named executive officers,NEOs, the dollar value used by the Committee and resulting number of shares and dollar value of stock options and performance-based RSUs and total stock-based compensation granted in January 2017. for the awards.
| Long-Term Incentive | ||||||||||||||||||||||||||||||||||||||||
| Stock Options | PRSUs* | TRSUs** | LTI Total | |||||||||||||||||||||||||||||||||||||
Named Executive Officer | $ | # |
| $ | # |
| $ | # |
| ($) | ||||||||||||||||||||||||||||||
M. H. Mitchell | 1,340,000 | 41,218 |
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| 2,948,000 | 28,982 |
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| 1,072,000 | 10,539 |
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| 5,360,000 | ||||||||||||||||||||||||
R. A. Maue | 325,000 | 9,997 |
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| 650,000 | 6,390 |
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| 325,000 | 3,195 |
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| 1,300,000 | ||||||||||||||||||||||||
A. W. Saak | — | — |
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| — | — |
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| 2,200,000 | 20,893 |
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| 2,200,000 | ||||||||||||||||||||||||
A. M. D’Iorio | 200,000 | 6,152 |
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| 400,000 | 3,932 |
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| 200,000 | 1,966 |
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| 800,000 | ||||||||||||||||||||||||
K. F. Gallo | 162,500 | 4,998 |
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| 325,000 | 3,195 |
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| 162,500 | 1,598 |
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| 650,000 | ||||||||||||||||||||||||
| * | As noted above, the Committee determined the target number of PRSUs using the dollar amount shown above divided by $101.72, the closing price of our common stock on the date the awards were approved. In contrast, the amounts included in the 2022 Summary Compensation Table and 2022 Grants of Plan-Based Awards table are based on the grant date fair value of the PRSUs determined using financial accounting assumptions as required to be disclosed by SEC rules, determined to be $120.68 per share. As a result, the value of the PRSUs included in those tables differs from the values shown above. See footnote 1 to the “2022 Summary Compensation Table” on page 64 and footnote 5 to the “2022 Grants of Plan-Based Awards” table on page 67 for additional information on the grant date fair value of the PRSUs. |
| ** | The closing price of our common stock on November 28, 2022, the date of Mr. Saak’s award, was $105.30. |
Selection of Performance Measures for Incentive Awards |
For our PRSUs, the performance measure is Holdings’ TSR over a three-year period relative to the TSR of the constituent companies in the S&P Midcap 400 Capital Goods Group, a meaningful measure of stockholder value. As discussed elsewhere in this Compensation Discussion and Analysis, the principal performance measures selected by the Committee to drive annual incentive compensation are, for the Chief Executive Officer and other corporate executives including Messrs. Maue and D’Iorio in 2022, adjusted EPS and free cash flow for the Company as a whole and, for certain executives with direct or supervisory operating unit responsibility including Mr. Gallo in 2022, adjusted operating profit and free cash flow for his business units (see “Annual Incentive Compensation” beginning on page 49). These performance criteria were chosen because they are aligned with the Company’s long-term strategic goal of driving profitable growth, both organically and through acquisition, which we believe will increase stockholder value. The relative weighting of these metrics was designed to ensure an appropriate balance between profit achievement and maintaining a strong and efficient balance sheet. |
PRSU Awards – 3-Year Performance Period Based on Relative TSR
The stockCommittee grants also included time-based RSUs for NEOs other than our Chief Executive Officer.
| Long-Term Incentive | |||||||||||||||||
| NEO | Options | PRSUs | TRSUs | LTI Total | |||||||||||||
| # | $ | # | $ | # | $ | ||||||||||||
| M. H. Mitchell | 117,103 | $ | 1,520,000 | 28,500 | $ | 2,280,000 | — | — | $ | 3,800,000 | |||||||
| R. A. Maue | 26,965 | 350,000 | 6,250 | 500,000 | 2,030 | 150,000 | $ | 1,000,000 | |||||||||
| L. V. Pinkham | 20,223 | 262,500 | 4,688 | 375,000 | 1,522 | 112,500 | $ | 750,000 | |||||||||
| B. L. Ellis | 16,179 | 210,000 | 3,750 | 300,000 | 1,218 | 90,000 | $ | 600,000 | |||||||||
| A. I. duPont | 15,100 | 196,000 | 3,500 | 280,000 | 1,137 | 84,000 | $ | 560,000 | |||||||||
PRSUs
Beginning in 2011, the Committee has granted to NEOs and other senior executives PRSUs with three yearthree-year performance vesting conditions based on relative total stockholder return as described below, thus directly linking this form of stock-based compensation to returns received by our stockholders relative to comparator industrial companies. See “Pay for
Shown below is
52
Compensation Discussion and Analysis
Performance Alignment” in the Executive Summary of this discussion regarding actual payout curve of PRSUs according toresults for recent PRSU awards, including the current design, andaward covering the payout curve for grants prior to 2016.2020-2022 performance period.
| PRSU Grants (current) | Prior to 2016 | |||||||||
| Performance Level | CR Relative TSR | Shares Earned % of Target | CR Relative TSR | Shares Earned % of Target | ||||||
| Below Threshold | < 25thpercentile | 0 | % | < 35thpercentile | 0 | % | ||||
| Threshold | 25thpercentile | 25 | % | 35thpercentile | 50 | % | ||||
| Target | 50thpercentile | 100 | % | 50thpercentile | 100 | % | ||||
| Maximum | 75thpercentile | 200 | % | 70thpercentile | 175 | % | ||||
| PRSU Grants | ||||||||
Performance Level | CR Relative TSR | Shares Earned % of Target | ||||||
Below Threshold | <25th percentile | 0 | % | |||||
Threshold | 25th percentile | 25 | % | |||||
Target | 50th percentile | 100 | % | |||||
Maximum | ≥75th percentile | 200 | % | |||||
The vesting of PRSUs awarded to members of the senior leadership team in January 20172022 will be based on a relative measurement of total stockholder return (share price change plus reinvested dividends), or TSR for Crane Co.the Company over the three yearthree-year period January 1, 20172022, through December 31, 20192024 (with the share price for such purpose being defined as the averagepercentage return of the 20-day trading average closing prices forprice on the last 20 trading days in 2016 and 2019, respectively)day of the three-year period, versus the 20-day trading average closing price prior to the first trading day of the period), compared to TSRs of the other companies in the S&P Midcap 400 Capital Goods Group (approximately 40 companies, including seven of the companies in our bench-marking peer group for compensation purposes).Group. Vesting of the PRSUs as shares of Crane Co.Company common stock will be determined by the formula indicated above for new grants. See “Adjustments to Equity Awards in Connection with Separation” on page 54 for additional information.
For TSR between the 25th and 50th percentiles and between the 50th and 75th percentiles, the vesting is interpolated on a straight linestraight-line basis. If Crane Co.’sthe Company’s TSR for the three yearthree-year period is negative, the maximum vesting is capped at 100% regardless of performance relative to peers. In addition, the maximum value that can be earned under the PRSUs (total shares earned multiplied by the final share price) is capped at four times the original grant value. Holders of PRSUs are not entitled to receive dividends or dividend equivalent payments during the performance period, nor do dividends accrue, prior to vesting.
42 Crane Co.
Compensation Discussion and Analysis
OptionsStock Option Awards – Vest 25% Per Year Over Four Years
Under the Stock Incentive Plan, stock options must be granted with a per-share exercise price at no less than fair market value on the date of grant and are subject to vesting terms as established by the Committee (generally(currently 25% per year over four years). Stock option awards comprise 25% of the annual long-term incentive grant value for each NEO vest ratably over four years and have 10-year terms. Accordingly, employees can realize a gain only if the share price increases from the date of grant, directly linking this component of incentive compensation to increases in stockholder value. Although broad market dynamics can strongly influence our share price, the Committee believes that with stock options our senior level management employees are motivated to take actions that improve the share price, such as profitable sales growth through organic growth as well as acquisitions, improvement in operating margins to generate increased operating profit and drive higher multiple valuations, and prudent use of free cash flow through capital expenditures, dividends, acquisitions, and stock repurchases.
TRSUs
53
Compensation Discussion and Analysis
TRSU Awards – Vest 25% Per Year Over Four Years
The Stock Incentive Plan also authorizes the Committee to grant time-based restricted share units, or RSUs,TRSUs, subject to such terms and conditions as the Committee may deem appropriate. The Committee grants time-based restricted share units, orLike the stock options, the TRSUs vesting 25% per yeargranted to our NEOs vest ratably over four years, and dividends are paid on TRSUs prior to key employees for retention purposes.vesting.
Adjustments to Equity Awards in Connection with Separation
In determiningconnection with the sizeseparation transaction, equity awards held by the Company’s NEOs (other than Mr. Saak) and non-employee directors were adjusted using the “shareholder method” in which each pre-separation Crane Holdings, Co. award was adjusted into a Crane NXT equity award and a Crane Company equity award, with one Crane Company share for each pre-distribution Crane Holdings, Co. share. Option exercise prices were proportionately adjusted to reflect the relative values of each company as of the RSUseparation transaction. The adjusted awards were intended to have a combined intrinsic value immediately following the separation transaction equal to the intrinsic value of the outstanding Crane Holdings, Co. awards immediately before the separation transaction. For Mr. Saak, given his hire date and stock option grantsrole, his awards are adjusted under the “replacement method” rather than the “shareholder method.” Under this method, the awards remain designated solely in January 2017, the Committee considered the competitive market data compiled by FW Cook, Company and individual performance in 2016, and our historical grant practices includingCrane NXT shares, the number of shares andwhich are adjusted to ensure the fair marketintrinsic value of the stock.
Retirement Benefitsawards immediately before the separation is the same immediately after the separation.
The NEOsvesting and other than terms of the adjusted awards remain substantially unchanged. Service with the applicable post-separation employer determines vesting. PRSUs remain subject to relative TSR performance over the same performance period against the same peer group as the original award, but adjusted to apply as if each of Crane NXT and Crane Company had been separate companies over the entire performance period.
Unless otherwise noted, information in this Proxy Statement regarding Crane Holdings, Co. equity awards before the separation transaction reflect share numbers, exercise price, and award value before these adjustments. Any such information after the separation transaction reflects such information only as to the Crane NXT awards after the adjustments and does not include the adjusted awards under the Crane Company stock incentive plan.
Retirement Benefits
Messrs. MaueMitchell and PinkhamD’Iorio have accrued retirement benefits under the Company’sCrane Holdings, Co. defined benefit pension plan, which was closed to employees hired after 2005 and then frozen with no further benefit accruals effective December 31, 2012. In connection with the separation transaction, this plan was retained by Crane Company, and no Crane NXT NEO will participate in the Defined Benefit Pension Plan. Messrs. Mitchell, Maue, Saak, D’Iorio and Pinkham,Gallo, and theany other NEOspreviously disclosed named executive officer beginning infrom 2014, participate in atax-qualified defined contribution retirement plan under which the Company contributes 3% of salary and bonus annually (the contribution rate was 2% prior to 2014), subject to the limitations on contributions to tax-qualified retirement plans under applicable federal tax regulations. Crane Company retained sponsorship of this plan in connection with the separation transaction, and Crane NXT adopted a “mirror” defined contribution plan for its employees.
The NEOs also participate in ourthe Company’s Benefit Equalization Plan, which is designed only to restore retirement benefits under the Company’s regular defined benefit pension plan that are limited by the tax code; there is no supplemental benefit based on deemed service or enhanced compensation formulas. Benefits accrued under this plan are not funded or set aside in any manner. In the event of retirement at age 62 with 10 years of service, a participating executive would be eligible to receive benefits under that plan without the reduction factor set forth in the Company’s tax-qualified pension plan of three percent3% per year prior to age 65. The NEOsonly NEO with a defined benefit accountsaccount in this plan areis Mr. Mitchell, Mr. duPont and Mr. Ellis.Mitchell. This plan was also frozen as to defined benefit accruals effective December 31, 2012. Like the defined benefit pension plan, this plan was retained by Crane Company in the separation transaction. Effective January 1, 2014, the Benefit Equalization Plan was amended to cover participants’ benefits under the defined contribution retirement plan referenced above, and the Committee extended the participation in this Planplan to 21certain senior leadership executives, including all of the named executive officers.NEOs. Like the tax-qualified defined contribution plan, sponsorship of the Benefit Equalization Plan was retained by Crane Company in the separation transaction, and Crane NXT adopted a “mirror” plan for its eligible employees.
54
Compensation Discussion and Analysis
Other Compensation
The “All Other Compensation” and “Change in Pension Value and Nonqualified Deferred Compensation Earnings” columns of the 2022 Summary Compensation Table and the accompanying footnotes set forth the details of other compensation received by the named executive officers.NEOs. In certain cases, such as the Crane Co.Company’s contributions to defined contribution plans and the increase in actuarial value of the defined benefit pension, such compensation is determined on the same basis as that used for all other employees. In other cases, such as automobile allowances, executive health exams, cybersecurity protection in the executive’s home network environment, and other personal benefits, the compensation is only provided to certain key employees (including the named executive officers)NEOs), and we have determined it to be reasonable and competitive compensation for the named executive officers in relation to general industry practices. For example, our NEOs are eligible for reimbursement for the cost of their executive physicals bi-annually, subject to an expense cap of $2,500. This benefit provides our NEOs with additional flexibility to proactively manage their health and wellness. Our executives bear all taxes associated with such benefits.
2018 Proxy Statement 43
TablePrior to the completion of Contents
Compensation Discussion and Analysis
In the case ofseparation transaction, personal use of the corporate aircraft this benefit iswas restricted to the Chief Executive Officer and the Chairman of the Board. Our Chief Executive Officer, Mr. Mitchell hashad an agreement with Crane Co.the Company pursuant to which he iswas not required to reimburse the Company for personal use until the aggregate incremental cost reachesreached $100,000, and thereafter he iswas required to reimburse the Company for all incremental cost incurred above that amount. With the permission of the Chief Executive Officer, limited use of the corporate aircraft by Mr. Maue for personal travel was permitted during 2022 as reflected in the “Other Compensation” table on page 64. The net incremental cost to Crane Co.the Company above the reimbursed amount for Mr. Mitchell is included in the “All Other Compensation” column of the 2022 Summary Compensation Table. The Board of Directors has approved this personal use of the aircraft for Mr. Mitchell because the Board believes that such personal use of the aircraft permits the most efficient use of time by Mr. Mitchell and thereby benefits Crane Co.the Company. For more information regarding the use of the Company aircraft, see the section captioned “Use of Company Aircraft” on page 49.61.
Compensation Decision-Making Process
Committee’s Role
The Committee is responsible for oversight of our executive compensation program. With respect to the compensation of our Chief Executive Officer, the Committee determines his compensation, subject to review and approval by the Board of Directors.Board. With respect to our other executive officers, the Committee determines their compensation after reviewing the recommendations of the Chief Executive Officer. The Committee administers the Annual Incentive Plan, reviewing and setting the performance targets for the CEOChief Executive Officer and other corporate officers subject to review by the Board, of Directors, setting performance targets for all other participants after reviewing the recommendations of the Chief Executive Officer, and reviewing and approving the annual bonuses based upon actual performance. The annual bonus calculations are also reviewed by our independent auditors. The Committee also administers the Stock Incentive Plan and approves all grants of stock options and restricted share units.RSUs.
The Committee is assisted in these responsibilities by its independent compensation consultant, FW Cook. Although Crane Co.the Company pays the fees and expenses of FW Cook, the firm is retained by the Committee. FW Cook does not perform any other compensation related services for Crane Co.the Company. The Committee reviews the independence of FW Cook each year and has concluded that its work for the Committee has not raised any conflict of interest.
Role of CEO and Management
The Chief Executive Officer and certain other senior corporate officers play an important role in supporting the Committee in the discharge of its responsibilities. Management maintains records and provides historical compensation data to the Committee and FW Cook, as well as the annual operating plan and the actual performance results from which annual bonuses are determined. The Chief Executive Officer, together with other senior corporate officers, presents recommendations to the Committee regarding performance targets under the Annual Incentive Plan and long-term equity incentives under the Stock Incentive Plan. The Chief Executive Officer and other officers participate in the discussions regarding annual and long-term incentive objectives so they can provide their input and understand the expectations for each incentive plan component.
44 Crane Co.
55
Compensation Discussion and Analysis
Compensation Consultant and Peer Group AnalysisMarket Data
Each year, FW Cook reviews the Company’s compensation peer group against certain size-related metrics and alignment with the Company’s business segments and complexity of operations. When and as appropriate, FW Cook proposes the addition of other companies to the compensation peer group to replace companies that have been acquired or made substantial changes to their business portfolio.portfolio, or when the Company’s profile has materially changed due to mergers or acquisitions. The 18 company19-company peer group below was used by FW Cook in 2021 to develop comparative compensation data for the Committee in setting 20172022 compensation targets.
Compensation Peer Group for 2017
The Notably, at the time the Company’s comparatorpeer group for PRSUs granted in 2017 iswas approved, their trailing fourth quarter revenues ranged from $1.4 billion to $6.9 billion with a median of $3.1 billion, which compared to the S&P Midcap 400 Capital Goods Group, consistingCompany’s revenue of approximately 40 companies and including seven of the companies in our compensation peer group. The Committee selected the larger comparator group for PRSU purposes based on the view (with which FW Cook concurs) that a larger group is appropriate for measuring relative TSR over a three year period because it is less likely to be meaningfully affected by the loss of constituent companies during the period.$3.0 billion. In addition, the S&P Midcap 400 Capital Goods Group ispeer group’s market cap ranged from $2.9 billion to $21.8 billion, with a regularly published listingmedian of $8.1 billion compared with all$5.6 billion for the necessary data to make the required calculations.Company.
| Crane Holdings’ Compensation Peer Group for 2022 |
Carlisle Companies Incorporated Colfax Corporation Curtiss-Wright Corporation Donaldson Company, Inc. Dover Corporation Flowserve Corporation | Hubbell Incorporated IDEX Corporation ITT Inc. Kennametal, Inc. Pentair, plc Regal Rexnord Corporation | Snap-On Incorporated SPX Flow Teledyne Technologies Incorporated The Timken Company Woodward, Inc. Xylem Inc. Zurn Elkay Water Solutions Corporation | ||
FW Cook provides the Committee with comparative compensation data on the peer companies from publicly available sources and, in addition, comparative compensation data compiled from a broad group of general industry companiessurveys with revenues ranging from $1.0 billion to $5.0 billion, appropriately size-adjusted to determine market values for companies of comparable size to the Company or business unit, as applicable. This data includes base salary, target bonus opportunity, and long-term incentive compensation for the named executive officers.NEOs. The Committee uses this comparative data during its review of salaries, annual target cash incentive compensation, and aggregate stock option and RSU grant values for Mr. Mitchell and the other NEOs, with the view that all elements of target total direct compensation should be calibrated by reference to the 50th percentile of competitive market data for targeted performance, with significant upside potential for performance that exceeds target and lesser (or zero) payouts if performance is below target. The Committee may use its judgment and discretion to vary the award values, based on Company and individual performance during the previous year, historical stock price trends, the impact of unforeseen events beyond Management’s control, and other factors.
Self-AssessmentThe Company’s comparator group for PRSUs granted in January of 2022 is the S&P Midcap 400 Capital Goods Group, consisting of approximately 40 companies, with roughly a quarter of those companies in our compensation peer group. The Committee selected the larger comparator group for PRSU purposes based on the view (with which FW Cook concurs) that a larger group is appropriate for measuring relative TSR over a three-year period because (1) company size is less relevant for TSR comparisons than benchmarking target pay levels, (2) the larger group best represents the universe of companies with which Crane competes for investor capital and (3) it is less likely to be meaningfully affected by the loss of constituent companies during the period. In addition, the S&P Midcap 400 Capital Goods Group is a regularly published listing with all the necessary data to make the required calculations.
Following the same selection methodology outlined above, the Committee approved the following peer group for the purposes of establishing compensation ranges for the Chief Executive Officer (Mr. Saak), and other senior leaders of Crane NXT, and for all other relevant compensation actions for Crane NXT:
| Crane NXT’s Compensation Peer Group for 2022 |
Advanced Energy Industries, Inc. Albany International Corp. Altra Industrial Motion Corp.* Brady Corporation Cognex Corporation Deluxe Corporation | Diebold Nixdorf Inc. ESCO Technologies Inc. Graco Inc. Helios Technologies, Inc. Itron, Inc. Methode Electronics, Inc. | Nordson Corporation nVent Electric plc OSI Systems, Inc. Viavi Solutions Inc. Vontier Corp. |
| * | As of December 31, 2022, it had been announced that Altra Industrial Motion was to be acquired by Regal Rexnord. The transaction had not closed at the time of the peer group comparisons related to Mr. Saak’s compensation ranges. |
56
Compensation Discussion and Analysis
CEO Assessment Process and Principal Conclusions
Each year, the Chief Executive Officer proposes a set of goals and objectives for himself, which are reviewed and approved by the Board as part of an annual self-assessment and review process managed by the Committee. The goals and objectives include quantitative goals based on the annual operating plan and related metrics, as well as certain qualitative objectives relating to business strategy, organization, and intellectual capital development. At the end of each year, our Chief Executive Officer prepares and delivers to the Committee a self-assessment of his performance during that year, with reference to the goals and objectives established at the beginning of the year as well as challenges and opportunities that arose during the year. This self-assessment is shared with the other members of the Board, of Directors, and their responses and other observations are compiled by the Chair of the Committee and discussed with our Chief Executive Officer, who then responds to the full Board.
2018 Proxy Statement 45
 | Max H. Mitchell Age: 59 | President and Chief Executive Officer through April 3, 2023 | ||||||
Principal Conclusions Outcomes for 2022, which shaped the Committee’s compensation decisions in January 2023: (1) Under Mr. Mitchell’s leadership, the Company, in an uncertain economic environment with higher than predicted inflation and significant supply chain disruptions, again over-delivered on key financial metrics, including EPS and free cash flow, benefitting shareholders, and driving a substantial relative outperformance vs. peers in in total shareholder return during 2022. (2) The Company executed on a transformative transaction that resulted in the defeasement of its asbestos liability, eliminating that liability from the Company’s balance sheet and positioning the Company for continued growth and improved cash flow metrics. (3) Under Mr. Mitchell’s leadership, the Company embarked on a separation transaction, which, when completed, is expected to drive significant shareholder value, and will result in two, independent, publicly traded companies poised for substantial growth in their respective end markets. (4) Mr. Mitchell continued to streamline the Company’s portfolio of businesses, executing on the sale of the Crane Supply business, and actively pursuing attractive M&A opportunities. (5) Mr. Mitchell continued to invest in new product development across all of the Company’s businesses and drove innovation in technology and manufacturing excellence. (6) Mr. Mitchell continued to lead by example, reinforcing the Company’s core values of doing business ethically and with unwavering integrity, and creating an environment where the Company’s associates are treated with trust and respect. Outcomes for 2021, which shaped the Committee’s compensation decisions in January 2022: (1) Under Mr. Mitchell’s leadership, the Company significantly over-delivered on key financial metrics, including EPS and free cash flow, materially benefitting stockholders, and driving a substantial increase in total stockholder return. (2) Mr. Mitchell acted early and decisively to prepare the Company for an environment with substantial inflation and supply chain disruptions; consequently, the Company avoided the significant profitability and delivery challenges experienced by many peers and across a wide range of companies and industries. (3) Mr. Mitchell provided admirable financial stewardship, reducing the Company’s debt and increasing its M&A capacity, while at the same time positioning the Company to return cash to stockholders through an announced authorization to repurchase up to $300 million in Company stock. (4) Mr. Mitchell continued to streamline the Company’s portfolio of businesses and reached an agreement to sell the Company’s Engineered Materials segment, which will provide additional financial resources to focus on acquisitions to strengthen the Company’s core Aerospace & Electronics and Process Flow Technologies businesses. (5) Under Mr. Mitchell’s leadership, the Company continued to invest in new product development across all the Company’s businesses, with a focus on driving profitable growth and delivering superior products and services to our customers. (6) Mr. Mitchell continued to lead the Company through the pandemic with compassion and integrity, with a continued focus on the safety of our associates and providing financial support and other accommodations for those impacted by the COVID-19 virus. | ||||||||
57
Compensation Discussion and Analysis
The principal conclusions of this assessment process for 2016 (which shaped the Committee’s compensation decisions in January 2017) were as follows: (1) Mr. Mitchell led the Company to solid operating performance in 2016 with EPS up 3.0% over the prior year, significantly increased cash flow to $267 million and achieved core sales growth of 2.0%; (2) Mr. Mitchell drove a thorough process to evaluate a range of acquisition opportunities within a comprehensive portfolio strategy focused on increasing total shareholder return; (3) Mr. Mitchell strengthened the management team through rigorous application of the intellectual capital process, including realigning roles of key leaders and attention to succession planning needs; and (4) Mr. Mitchell generated increased confidence and credibility with the Board of Directors and investors based on transparent communication and performance exceeding expectations.
The principal conclusions of this assessment process for 2017 (which shaped the Committee’s compensation decisions in January 2018) were as follows: (1) under Mr. Mitchell’s leadership, the Company executed well across all of its businesses in a mixed end market environment, achieving record adjusted operating margins of 15.2%, with adjusted EPS up 7% over the prior year, and delivered free cash flow of $269 million; (2) created significant stockholder value, increasing the Company’s stock price by 24%, slightly ahead of the Company’s PRSU peer group; (3) Mr. Mitchell led a disciplined acquisition process, completing the acquisitions of Westlock Controls Corporation and Microtronic AG in the first half of 2017, reaching agreement to acquire Crane & Co. (“Crane Currency”) in December (which was completed in January 2018), and actively engaging in the review of a range of other potential acquisition opportunities; (4) Mr. Mitchell drove the development of innovative technology and engineering excellence in the businesses, resulting in new products or significant product enhancements across all of the Company’s segments; and (5) Mr. Mitchell continued to lead with integrity, and communicated openly and frequently with the Company’s senior leadership teams and associates about his unwavering commitment to the highest standards of ethics in the workplace.
The Committee took these observations into account, along with the competitive data supplied by FW Cook, in approving Mr. Mitchell’s bonuses for 20162021 and 20172022 under the Annual Incentive Plan and in determining Mr. Mitchell’s stock-based incentive compensation grants in January 20172022 and January 2018.2023. The CEO does not participate in any deliberations regarding his own compensation.
A similar process is followed for each of the Company’s other NEOs except that it is the Chief Executive Officer who reviews the self-assessment by such executive officer and provides the conclusions and findings that help guide the compensation decisions affecting such officer; for the other NEOs, annual incentive compensation, though largely formula-based, is subject to adjustment by the CEO, and subject to review and approval by the Committee, based on assessment of individual performance.
Say-on-Pay Vote in 20172022
In accordance with the Dodd-Frank Act and related rules adopted by the Securities and Exchange Commission, we presented a “Say-on-Pay”“Say-on-Pay” item to stockholders in 2017,2022, which called for an advisory, non-binding vote regarding the compensation of our named executive officersNEOs in 20162021 as described in the proxy statement. On this item, 97%over 96% of the votes cast were in favor of the resolution. In light of strong stockholder support, the Committee concluded that no revisions were necessary to our executive officer compensation program in direct response to the vote. Stockholders were also asked to vote on the frequency with which say-on-pay votes should be conducted, and 89% of the votes cast were in favor of continuing to conduct the say-on-pay vote annually.
46 Crane Co.
Compensation Discussion and Analysis
Policies and Practices Related to ourOur ExecutiveCompensation Program
Compensation Risk Assessment
The Committee has established a process for assessing the potential that our compensation plans and practices may encourage our executives to take risks that are reasonably likely to have a material adverse effect on the Company. A senior management team led by the Senior Vice President-CBS, People and PerformancePresident, Chief Human Resources Officer conducts a review of the operation and effect of our compensation plans and practices which is presented to the Committee for discussion at its February meeting. With the assistance of FW Cook, the Committee concluded that our compensation plans and practices do not encourage excessive or unnecessary risk-taking for the following reasons:
Our incentive plans have a mix of performance measures, including Company-wide and business unit financial measures, operational measures, and individual objectives. |
Our compensation programs contain a balance of annual and long-term incentive opportunities. |
We cap incentive plan payouts within a reasonable range. |
The range of payouts from threshold to maximum payout (performance slope) under our annual incentive plan and |
Our stock ownership guidelines link the interests of our executive officers to those of our stockholders. |
Our clawback policy provides a means for the Company to recover the value of incentive awards in the event any of our executive officers engage in misconduct resulting in a financial restatement. |
The mix of |
Stock Ownership Guidelines
The Company’s stock ownership guidelines for executive officers business unit presidents and other key employees, which were updated in October 2016, are expressed as a multiple of base salary:
Executive Level | Minimum Ownership Level | |||
CEO | 6 x Base Salary | |||
CFO | 5 x Base Salary | |||
Executive Officers-CEO Direct Reports | 4 x Base Salary | |||
Other Executive Officers | 3 x Base Salary | |||
2018 Proxy Statement 47
58
Compensation Discussion and Analysis
Shares that count toward the satisfaction of the guidelines are (i) shares owned by the executive, (ii) shares held in the executive’s 401(k) account, and (iii) the after-tax value (65%) of TRSUs held by the executive. Neither unearned or unvested PRSUs nor unexercised stock options count for purposes of the guideline.guidelines. The policy permits executives to sell up to 50% of the net shares realized upon an option exercise or vesting of RSUs (i.e., the total shares covered by the option exercised or the RSU grant vesting less the number of shares surrendered to pay the exercise price and satisfy tax withholding obligations), while retaining at least 50% of such net shares in order to meet the stock ownership guidelines. Once such guidelines are met, the policy permits executives to sell any shares held above the required ownership guidelines. As of February 28, 2018 all of the NEOs either held the requisite number of shares or were complying with the retention ratio for option exercises and RSU vestings in accordance with the guidelines.
As of April 10, 2023, Mr. Saak and Mr. Gallo (all of the NEOs who have continued with Crane NXT) either held the requisite number of shares or were complying with the above-referenced retention ratio in accordance with the guidelines. | ||
Policies with Respect to Timing of Stock-Based Awards and Exercise Price of Stock Options
Annual grantsawards of stock options and RSUs to executive officers are madeapproved at the Committee’s regular January meeting.meeting, in order that full-year performance may be considered, and the awards are granted 10 business days later, after the Company’s full year earnings have been released, to better align grant date value with the stockholders’ experience. The Committee also grants stock options and RSUs at other dates to newly hired or promoted executives. TheAll options must be granted at an exercise price of stock options under the Stock Incentive Planthat is at least equal to 100% of the fair market value at the date of grant, determined on the basis of the closing priceCompany’s common stock on the date of grant. Fair market value on a given day is defined as the closing market price on that day.
Policy with Respect to Hedging and Pledging of Company Stock
In May 2012,Certain forms of hedging or monetization transactions allow an individual to lock in much of the value of his or her stock holdings, often in exchange for all or part of the potential for upside appreciation in the stock, allowing the benefit of continued ownership of the stock without the full risks and rewards of ownership. When that occurs, the individual may no longer have the same objectives as the Company’s other stockholders. For this reason, the Board adoptedhas maintained a longstanding policy prohibiting any director, or executive officer, of the Companyor any other designated employee who qualifies as an insider from (1) entering into any hedging or other transaction to limit the risk of ownership of Company stock andor (2) pledging Company stock to secure any loan or advance of credit. During 2017,2022, none of our directors and executive officers engaged in any such transactions.
Clawback Policy
The Company’s Compensation “Clawback” Policy provides a means for the recovery of certain incentive compensation awards if the Company’s financial statements are restated due to fraud or similar misconduct by any executive officers. Under the Company’s “clawback”clawback policy, the Company may recoup from the Chief Executive Officer, the Chief Financial Officer, the General Counsel, Controller, Treasurer and any other executive officers (including all the named executive officers)NEOs), who are determined to have participated in the misconduct: (1) the annual incentive bonusescompensation awards and amounts realizedother bonus compensation, and (2) all proceeds from stock option exercises and vestingor sales of shares received in settlement of RSUs and PRSUs based uponwithin one year after the filing of the financial statementsstatement that are subsequently restated, as a result of fraud or similar misconduct by such executives. The Committee administersis later restated. Under this policy, the Committee is authorized by the Board to pursue a financial recovery against the offending officers when the Board determines that a triggering event has occurred. In 2022, the SEC adopted final rules related to clawbacks under the Dodd-Frank Wall Street Reform and has the discretionConsumer Protection Act. The rules direct securities exchanges to determine when it isimplement listing standards that will require public companies to be applied, to whommaintain and to which compensation.disclose a clawback policy that meets specified requirements. The Compensation Committee intends to review thisreevaluate the Company’s clawback policy when the regulationsin light of the Securitiesfinal rules, after the NYSE publishes the applicable listing standards and Exchange Commission implementingin accordance with the provisions of the Dodd-Frank Act relating to clawbackrequired deadlines.
59
Compensation Discussion and the rules of the New York Stock Exchange thereunder are effective.Analysis
Impact of Internal Revenue Code Section 162(m)
Internal Revenue Code Section 162(m) limits the deductibility of compensation in excess of $1 million paid to any one NEO in any calendar year. Under the tax rules in effect before 2018, compensation that qualified as “performance-based” under Section 162(m) was deductible without regard to this $1 million limit. In 2017 and prior years, the Committee designed awards under the Annual Incentive Plan, as well as PRSUs and stock options granted under equity incentive plans, that were intended to qualify for this performance-based compensation exception. However, the Tax Cuts and Jobs Act (TCJA), which was signed into law December 22, 2017, eliminated this performance-based compensation exception effective January 1, 2018, subject to a special rule that “grandfathers” certain awards and arrangements that were in effect on or before November 2, 2017. As a result, compensation that the Committee structured in 2017 and prior years with the intent of qualifying as performance-based compensation under Section 162(m) that is paid on or after January 1, 2018, may not be fully deductible, depending on the application of the special grandfather rules. Moreover, from and after January 1, 2018, compensation awarded in excess of $1 million to our NEOs generally will not be deductible. While the Tax Cuts and Jobs ActTCJA will limit the deductibility of compensation paid to the NEOs, the Committee will—will — consistent with its past practice—practice — design compensation programs that are in the best long-term interests of Crane Co.the Company and our stockholders, with deductibility of compensation being one of a variety of considerations taken into account.
48 Crane Co.
Compensation Discussion and Analysis
Other Arrangements with ourOur Named Executive Officers
Change in Control Provisions
Each of the Company’s executive officers has an agreement which,that, in the event of a change in control of Crane Co.,the Company, provides for continued employment for a period of three years or until normal retirement following the change in control. Upon termination within such employment period after a change in control, either by the employer without cause or by the executive with “Good Reason” for constructive termination, the executive is entitled to receive a multiple of base salary and average annual bonus payments based on the number of years in the employment period, and certain other benefits. The annual incentive plans, stock options, and restricted stock and RSUs contain similar features which accelerate vesting in the event of termination following a change in control. The change in control agreements do not provide for any tax gross-ups, and instead cap the payments to the employee to the extent that such payments, together with accelerated vesting of stock options restricted stock and RSUs, would trigger any excise tax under Section 4999 of the Internal Revenue Code resulting from such payments (and if capping the payments provides the employee with a larger after-tax payment).
As set forth below under “Potential Payments upon Termination or Change in Control,” the aggregate payments to the named executive officersNEOs under the change in control agreements, including the estimated value of continuation for three years (or until normal retirement age) of the individual’s medical coverage and other benefits, had a change of control taken place on December 31, 2022, and had employment been terminated immediately thereafter, would range from $7,558,132$27,885,761 for Mr. Mitchell to $2,857,493$4,554,788 for Mr. duPont.Saak. The Board of Directors has approved these agreements and other provisions to assure the continuity of management in the event of a change in control and considers these agreements and provisions to be competitive with terms offered by other companies with which we compete for executive talent. The agreement with the NEOs who were employed by Crane Company following the separation were assigned to and assumed by Crane Company. The separation transaction did not constitute a change in control for purposes of these agreements.
Indemnification Agreements
Crane Co.The Company has entered into indemnification agreements with Mr. Mitchell, each other director, Messrs. Maue, Pinkham, Ellis,Saak, D’Iorio and duPont,Gallo, and the sevenfive other executive officers of Crane Co.,the Company, the form of which was approved by stockholders at the 1987 annual meeting. After separation, the Company will continue to indemnify its Directors, CEO, CFO, General Counsel, Chief Human Resource Officer, Chief Accounting Officer and Senior Vice President. The indemnification agreements require Crane Co.the Company to indemnify the officers or directors to the full extent permitted by law against any and all expenses (including advances of expenses), judgments, fines, penalties, and amounts paid in settlement incurred in connection with any claim against the indemnified person arising out of services as a director, officer, employee, trustee, agent, or fiduciary of Crane Co.the Company or for another entity at the request of Crane Co.,the Company, and either to maintain directors and officers liability insurance coverage or to the full extent permitted by law to indemnify such person for the lack of such insurance. Indemnification agreements with the NEOs who were employed by Crane Company following the separation were assigned to and assumed by Crane Company.
60
Compensation Discussion and Analysis
Use of Company Aircraft
Prior to the separation transaction, Crane Holdings, Co. has entered into time share agreements with Mr. EvansMessrs. Tullis and Mr. Mitchell regarding personal use of the corporate aircraft, including aircraft leased by Crane Holdings, Co. from a third partythird-party operator. Under the agreements, Crane Holdings, Co. agreesagreed to lease the aircraft to the executive pursuant to federal aviation regulations and to provide a qualified flight crew, and the executive agreesagreed to pay Crane Holdings, Co. for each flight. The agreement with Mr. EvansTullis provides that he pay the aggregate incremental cost of aircraft operation. Such incremental costs include fuel, landing fees, parking fees, temporary hangar charges, flight crew meals and lodging, and, for chartered aircraft, the entire charter fee. The agreement with Mr. Mitchell provides that he is not required to reimburse the Company for personal use until the aggregate incremental cost reaches $100,000, and thereafter is required to reimburse the Company for all incremental cost incurred above that amount. During 2017,2022, the aggregate incremental cost to Crane Holdings, Co. for personal use of the aircraft by Messrs. EvansTullis and Mitchell, less amounts paid by them under the time share agreements, was nil$92,462 and $100,000, respectively.
2018 Proxy Statement 49The time sharing agreements were assigned to Crane Company and Crane Company entered into a new Lease arrangement for the aircraft, all effective in February 2023, after which date Crane NXT had no obligations under either the time sharing agreements or the aircraft lease.
61
Compensation Discussion and Analysis
Management Organization and Compensation Committee Report
The Management Organization and Compensation Committee of the Board of Directors has submitted the following report for inclusion in this Proxy Statement:
The Committee has reviewed and discussed with management the Compensation Discussion and Analysis set forth in this Proxy Statement.Statement/Prospectus. Based on our review and discussions with management, the Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement, and incorporated by reference in Crane Co.’sthe Company’s Annual Report on Form 10-K for the year ended December 31, 2017.2022.
Submitted by:
The Management Organization and Compensation
Committee of the Board of Directors of Crane NXT, Co.
Ellen McClain, Chair
William Grogan
James L. L. Tullis ChairDonald G. CookRonald C. LindsayJennifer M. Pollino
50 Crane Co.
62
| 2022 EXECUTIVE COMPENSATION TABLES | ||||||||
2017 Executive Compensation Tables
Annual Compensation of the Named Executive Officers
This discussion should be read together with the 20172022 Summary Compensation Table and the 20172022 Grants of Plan-Based Awards table below.
Base Salary— The annual base annual salary of the Chief Executive Officer, Mr. Mitchell, is determined by the Compensation Committee and approved by the Board of Directors.Board. The base annual salary of each of the other NEOs is recommended by the Chief Executive Officer and approved by the Compensation Committee.
Based on the base salaries of the named executive officers, as well as the fair value of equity awards, non-equity incentive plan awards and other compensation granted to them in 2017, base Base salary and bonus accounted for approximately 22.1%27% of the aggregate total compensation of the NEOs.
Stock Awards—PRSUsAwards (PRSUs and TRSUsTRSUs)— In 2017January 2022, the Compensation Committee made grants of performance-based restricted share units (“PRSUs”)PRSUs to certain key executives, including the named executive officers.NEOs. The PRSUs will vest, if at all, at the end of 2019,2024, as determined with reference to the percentile ranking of the total stockholder return (share price appreciation plus reinvested dividends), or “TSR,”TSR of Crane Co.the Company’s common stock for the period from January 1, 20172022, through December 31, 2019,2024, as compared to the TSRs of the other companies in the S&P Midcap 400 Capital Goods Group. The Committee also made grants of time-based restricted share units (“TRSUs”),TRSUs to certain key executives, including the NEOs, which will vest as to one-fourth of the awardratably on the first, second, third, and fourth anniversaries of the date of grant.
The grants were made pursuant to the 20132018 Stock Incentive Plan. See “Potential Payments Upon Termination or Change in Control” beginning on page 72 for a description of treatment of the PRSUs upon termination of employment.
See, also, “Adjustments to Equity Awards in Connection with Separation” in the Compensation Discussion and Analysis for additional information about the treatment of these awards in connection with the separation transaction.
Option Awards— In January 2017,2022, consistent with previous practice, Crane Co. made annual grants of stock options to executives and other key employees including the named executive officers.NEOs pursuant to the 2018 Stock Incentive Plan. Options become exercisable 25% per year over four years, and expire, unless exercised, ten10 years after grant. The exercise price of the options granted on January 30, 201724, 2022, was $73.90,$101.72, which was the fair market value of Crane Co. stock on the date of grant, calculated in accordance with the terms of the 20132018 Stock Incentive Plan by taking the closing price on the grant date. See “Potential Payments Upon Termination or Change in Control” beginning on page 72 for a description of treatment of the options upon termination of employment. See, also, “Adjustments to Equity Awards in Connection with Separation” in the Compensation Discussion and Analysis for additional information about the treatment of these awards in connection with the separation transaction.
Non-Equity Incentive Plan Compensation— In January 2017,2022, the Compensation Committee made target bonus awards pursuant to the Annual Incentive Plan to each of the Company’s executive officers (including the named executive officers)NEOs). The awards became payable in cash in the first quarter of 20182023 to the extent that certain performance targets were met during 2017.2022. The target awards are shown in the 20172022 Grants of Plan-Based Awards table beginning on page 55;66; the amounts shown in the 2022 Summary Compensation Table under “Non-Equity“Non-Equity Incentive Plan Compensation” for 20172022 are the actual amounts paid.
Other Compensation— The amounts appearing in the 2022 Summary Compensation Table under the caption “All Other Compensation” are disaggregated in footnote 5 to the table.
2018 Proxy Statement 51
63
20172022 Executive Compensation Tables
2022 Summary Compensation Table
The table below summarizes the compensation for 2017, 20162022, 2021 and 20152020 earned by Crane Co.’sCrane’s Chief Executive Officer, its Chief Financial Officer, and each of the three other most highly paid executive officers (as determined pursuant to Securities and Exchange CommissionSEC rules) who were serving as executive officers aton December 31, 2017.2022.
Stock Awards— Amounts shown in the column headed “Stock Awards” consist of PRSUs, which vested or will vest, if at all, at the end of 2019, 2018 and 2017, respectively, based on the total stockholder return of Crane Co.’s stock relative to the S&P Midcap 400 Capital Goods Group over a three year period; for NEOs other than Mr. Mitchell, this column also includes grants of TRSUs.
Name and Principal Position | Year | Salary ($) | Bonus ($)(1) | Stock Awards ($)(2) | Option Awards ($)(3) | Non-Equity Incentive Plan Compensation ($)(4) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(5) | All Other Compensation ($)(6) | Total ($) | |||||||||||||||||||||||||||
Max H. Mitchell President and Chief Executive Officer | 2022 | 1,200,000 |
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| 4,569,575 | 1,339,997 | 1,919,520 | 0 | 287,464 | 9,316,556 | |||||||||||||||||||||||||
| 2021 | 1,177,990 |
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| 3,956,400 | 1,274,996 | 2,880,000 | 0 | 195,104 | 9,484,490 | ||||||||||||||||||||||||||
| 2020 | 857,475 |
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| 3,156,256 | 1,890,003 | 156,663 | 185,206 | 116,063 | 6,361,666 | ||||||||||||||||||||||||||
Richard A. Maue Senior Vice President and Chief Financial Officer | 2022 | 717,209 |
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| 1,096,141 | 325,002 | 767,644 | — | 104,466 | 3,010,462 | |||||||||||||||||||||||||
| 2021 | 681,258 |
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| 966,767 | 312,508 | 1,028,352 | — | 70,313 | 3,059,198 | ||||||||||||||||||||||||||
| 2020 | 609,551 |
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| 848,037 | 420,002 | 247,200 | — | 65,759 | 2,190,549 | ||||||||||||||||||||||||||
Aaron W. Saak Chief Executive Officer Crane NXT | 2022 | 46,154 | 350,000 | 2,200,033 |
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Anthony M. D’Iorio Senior Vice President, General Counsel and Secretary | 2022 | 523,115 |
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| 674,495 | 200,002 | 489,913 | 0 | 69,267 | 1,956,792 | |||||||||||||||||||||||||
| 2021 | 494,740 |
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| 541,368 | 174,992 | 700,050 | 0 | 51,491 | 1,962,641 | ||||||||||||||||||||||||||
| 2020 | 416,852 |
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| 459,316 | 227,507 | 158,025 | 50,818 | 47,604 | 1,360,122 | ||||||||||||||||||||||||||
Kurt F. Gallo Senior Vice President | 2022 | 524,587 |
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| 548,121 | 162,485 | 590,755 | — | 72,657 | 1,898,605 | |||||||||||||||||||||||||
| 2021 | 502,900 |
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| 502,711 | 162,500 | 708,271 | — | 51,430 | 1,927,812 | ||||||||||||||||||||||||||
| 2020 | 451,634 |
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| 459,316 | 227,507 | 342,160 | — | 42,786 | 1,523,403 | ||||||||||||||||||||||||||
Non-Equity Incentive Compensation Awards— Amounts shown in the column headed “Non-Equity Incentive Plan Compensation” are the amounts that were paid early in the following year under the Annual Incentive Plan, in respect of the performance of the business during the indicated year, as measured against objective targets which had been set in January or February of the indicated year.
| Name and Principal Position | Year | Salary ($) | Stock Awards ($)(1) | Option Awards ($)(2) | Non-Equity Incentive Plan Compensation ($)(3) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(4) | All Other Compensation ($)(5) | Total ($) | ||||||||||||||||
| Max H. Mitchell President and Chief Executive Officer | 2017 | 970,385 | $ | 2,280,000 | $ | 1,519,997 | $ | 1,118,618 | $ | 136,293 | $ | 192,082 | $ | 6,217,375 | ||||||||||
| 2016 | $ | 915,000 | $ | 2,130,003 | $ | 1,419,997 | $ | 1,138,077 | $ | 48,545 | $ | 154,257 | $ | 5,805,879 | ||||||||||
| 2015 | $ | 925,096 | (6) | $ | 2,010,007 | $ | 1,340,004 | $ | 439,374 | $ | — | $ | 173,741 | $ | 4,888,222 | |||||||||
| Richard A. Maue Vice President, Finance and Chief Financial Officer | 2017 | 537,742 | $ | 650,017 | $ | 350,006 | $ | 422,415 | $ | 1,527 | $ | 61,438 | $ | 2,023,145 | ||||||||||
| 2016 | $ | 509,870 | $ | 584,986 | $ | 315,001 | $ | 476,351 | $ | 1,064 | $ | 51,285 | $ | 1,938,557 | ||||||||||
| 2015 | $ | 508,033 | (6) | $ | 520,002 | $ | 280,004 | $ | 180,297 | $ | — | $ | 53,741 | $ | 1,542,077 | |||||||||
| Louis V. Pinkham Senior Vice President | 2017 | 508,840 | $ | 487,516 | $ | 262,495 | $ | 415,941 | $ | 1,087 | $ | 53,657 | $ | 1,729,536 | ||||||||||
| 2016 | $ | 493,806 | $ | 654,979 | $ | 245,002 | $ | 430,903 | $ | 806 | $ | 49,613 | $ | 1,875,109 | ||||||||||
| 2015 | $ | 489,740 | (6) | $ | 454,993 | $ | 245,001 | $ | — | $ | — | $ | 55,321 | $ | 1,245,055 | |||||||||
| Bradley L. Ellis Senior Vice President | 2017 | 436,970 | $ | 390,010 | $ | 210,003 | $ | 436,652 | $ | 174,481 | $ | 48,515 | $ | 1,696,631 | ||||||||||
| 2016 | $ | 399,423 | $ | 390,020 | $ | 210,003 | $ | 348,793 | $ | 55,346 | $ | 347,477 | $ | 1,751,062 | ||||||||||
| 2015 | $ | 392,237 | (6) | $ | 325,038 | $ | 174,995 | $ | 455,551 | $ | — | $ | 53,170 | $ | 1,400,991 | |||||||||
| Augustus I. duPont Vice President, General Counsel and Secretary | 2017 | 435,931 | $ | 364,024 | $ | 195,998 | $ | 318,754 | $ | 38,791 | $ | 53,198 | $ | 1,406,696 | ||||||||||
| 2016 | $ | 427,382 | $ | 363,994 | $ | 195,998 | $ | 372,667 | $ | 51,734 | $ | 52,152 | $ | 1,463,927 | ||||||||||
| 2015 | $ | 426,524 | (6) | $ | 364,042 | $ | 195,997 | $ | 141,053 | $ | — | $ | 56,113 | $ | 1,183,729 | |||||||||
| (1) | This amount reflects the portion of the cash sign-on bonus paid to Mr. Saak in 2022 in connection with his acceptance of employment with Holdings in November 2022. The terms of the cash sign-on bonus are described in more detail in the section entitled “Named Executive Officers’ Bonuses for 2022” above. |
| (2) | Amounts shown in this column reflect the grant date fair value computed in accordance with FASB ASC Topic 718, with respect to awards of TRSUs and PRSUs made during |
Amounts shown in this column reflect the grant date fair value computed in accordance with FASB ASC Topic 718, with respect to awards of options to purchase Crane |
52 Crane Co.
2017 Executive Compensation Tables
Amounts shown in this column for all |
64
2022 Executive Compensation Tables
For |
| Year Ended December 31, | Pension Plan for Eligible Employees | Benefit Equalization Plan | |||||||||
| M. H. Mitchell | 2015 | $ | (10,762 | ) | $ | (20,636 | ) | ||||
| B. L. Ellis | 2015 | $ | (21,675 | ) | $ | (27,058 | ) | ||||
| A. I. duPont | 2015 | $ | (4,625 | ) | $ | (127,122 | ) | ||||
|
| Year Ended December 31, | Pension Plan for Eligible Employees ($) | Benefit Equalization Plan ($) | |||||||||
M. H. Mitchell | 2022 | (118,959 | ) | (245,774 | ) | |||||||
A. M. D’Iorio | 2022 | (104,192 | ) | — | ||||||||
| (6) |
|
Amounts in this column for |
| Dividends Paid on Restricted Stock/RSUs* | Personal Use of Company Aircraft** | Personal Use of Company- Provided Car | Company Contribution to Benefit Equalization Plan*** | Company Contribution to 401(k) Plan | Insurance Premiums | Total | ||||||||||||||||
| M. H. Mitchell | $ | — | $ | 100,000 | $ | 18,763 | $ | 55,154 | $ | 16,200 | $ | 1,965 | $ | 192,082 | ||||||||
| R. A. Maue | $ | 7,599 | — | $ | 14,219 | $ | 22,323 | $ | 16,200 | $ | 1,097 | $ | 61,438 | |||||||||
| L. V. Pinkham | $ | 10,606 | — | $ | 5,696 | $ | 20,092 | $ | 16,200 | $ | 1,063 | $ | 53,657 | |||||||||
| B. L. Ellis | $ | 5,807 | — | $ | 10,229 | $ | 15,473 | $ | 16,145 | $ | 861 | $ | 48,515 | |||||||||
| A. I. duPont | $ | 4,790 | — | $ | 15,131 | $ | 16,158 | $ | 16,200 | $ | 919 | $ | 53,198 | |||||||||
|
| Dividends Paid on Restricted Stock/RSUs* ($) | Personal Use of Company Aircraft** ($) | Personal Use of Company- Provided Car ($) | Company Contribution to Benefit Equalization Plan*** ($) | Company Contribution to 401(k) Plan ($) | Insurance Premiums ($) | Cyber ($) | Total ($) | ||||||||||||||||||||||||
M. H. Mitchell | 38,115 | 100,000 | 13,547 | 113,250 | 18,300 | 2,002 | 2,250 | 287,464 | ||||||||||||||||||||||||
R. A. Maue | 15,402 | 5,631 | 18,522 | 43,217 | 18,300 | 1,144 | 2,250 | 104,466 | ||||||||||||||||||||||||
A. W. Saak | 9,820 | — | — | — | — | 1,334 | — | 11,154 | ||||||||||||||||||||||||
A. M. D’Iorio | 8,471 | — | 14,115 | 27,545 | 18,300 | 836 | — | 69,267 | ||||||||||||||||||||||||
K. F. Gallo | 8,809 | — | 14,618 | 27,836 | 18,300 | 844 | 2,250 | 72,657 | ||||||||||||||||||||||||
| * | Dividends are paid on shares of restricted stock and TRSUs at the same rate as on all other shares of Common Stock. Dividends are not accrued or paid on PRSUs until the awards are earned and shares of Common Stock are issued. |
| ** | The method of computing the cost of personal use of the Crane Co. aircraft is described under the caption “Use of Company Aircraft” on page |
| *** | Includes the Company contribution to the defined contribution benefit under the Benefit Equalization Plan; see |
65
|
2018 Proxy Statement 53
20172022 Executive Compensation Tables
2022 Grants of Plan-Based Awards
The following table gives further details of 20172022 compensation as disclosed in the second, third“Stock Awards,” “Option Awards” and fourth“Non-Equity Incentive Plan Compensation” columns of the 2022 Summary Compensation Table. See, also, “Adjustments to Equity Awards in Connection with Separation” in the Compensation Discussion and Analysis for additional information about the treatment of outstanding equity awards in connection with the separation transaction.
In the table below, the rows labeled “Annual Incentive Plan” disclose target bonuses set in February 2017,2022, at which time business performance targets were also fixed. The column headings in relation to the Annual Incentive Plan are as follows:
“Threshold” is the amount |
“Target” is the amount |
“Maximum” is the amount |
Note that the amount shown in the 2022 Summary Compensation Table for 20172022 under the heading “Non-Equity“Non-Equity Incentive Plan Compensation” is the cash bonus actually paid, which was determined entirely by the performance of the business as compared to the targets set at the beginning of 2017.2022.
The rows labeled “Performance RSU”“PRSU” disclose the target numbers of shares whichthat may vest at the end of 20192024 in respect of grants made in January 2017.2022. Vesting will be based on the Company’s TSR of Crane Co. stock relative to the TSR of other companies in the S&P Midcap 400 Capital Goods Group over the three yearthree-year period 2017—2019.2022 – 2024. The column headings in relation to the Performance RSUsPRSUs are as follows:
“Threshold” is the number of shares |
“Target” is the number of shares |
“Maximum” is the number of shares |
In no event will the aggregate value of the shares earned exceed four times the value of the target number of shares determined at the beginning of the performance period.
The column headed “Grant Date Fair Value” shows the grant date fair value of the Performance RSUs,PRSUs, calculated using a formula based on the probability of various outcomes. This amount also appears in the 2022 Summary Compensation Table under the heading “Stock Awards”; please see footnote 1 to the 2022 Summary Compensation Table.Table on page 64. The value of the shares that actually vest at the end of 2019,2024, if any, may be higher or lower than the grant date fair value.
54 Crane Co.
2017 Executive Compensation Tables
The rows labeled “Stock Option” disclose the number of shares underlying stock options granted in January 2017,2022, in respect of the executive’s performance during the previous year and as an incentive for performance during future years. The amount under the heading “Grant Date Fair Value,” calculated using the Black-Scholes formula, also appears in the 2022 Summary Compensation Table under the heading “Option Awards”; please see footnote 2 to the 2022 Summary Compensation Table.
| Estimated future payouts under equity incentive plan awards(3) | All Other | All other option awards: Number of securities underlying options (#) | Exercise or base price of option awards ($/sh)(4) | Grant date fair value of stock and option awards(5) | ||||||||||||||||||||||||
| Name | Type of Award | Grant Date(1) | Threshold | Target | Max. | Threshold | Target | Max. | |||||||||||||||||||||
| M. H. Mitchell | Annual Incentive Plan | 2/27/2017 | $ | — | $ | 1,072,500 | $ | 2,145,000 | |||||||||||||||||||||
| Performance RSU | 1/30/17 | 7,125 | 28,500 | 57,000 | $ | 2,280,000 | |||||||||||||||||||||||
| Stock Option | 1/30/17 | 117,103 | $ | 73.90 | $ | 1,519,997 | |||||||||||||||||||||||
| R. A. Maue | Annual Incentive Plan | 2/27/2017 | $ | — | $ | 405,000 | $ | 810,000 | |||||||||||||||||||||
| Performance RSU | 1/30/17 | 1,563 | 6,250 | 12,500 | $ | 500,000 | |||||||||||||||||||||||
| Time-Based RSU | 1/30/17 | 2,030 | $ | 150,017 | |||||||||||||||||||||||||
| Stock Option | 1/30/17 | 26,965 | $ | 73.90 | $ | 350,006 | |||||||||||||||||||||||
| L. V. Pinkham | Annual Incentive Plan | 2/27/2017 | $ | — | $ | 357,000 | $ | 714,000 | |||||||||||||||||||||
| Performance RSU | 1/30/17 | 1,172 | 4,688 | 9,376 | $ | 375,040 | |||||||||||||||||||||||
| Time-Based RSU | 1/30/17 | 1,522 | $ | 112,476 | |||||||||||||||||||||||||
| Stock Option | 1/30/17 | 20,223 | $ | 73.90 | $ | 262,495 | |||||||||||||||||||||||
| B. L. Ellis | Annual Incentive Plan | 2/27/2017 | $ | — | $ | 308,000 | $ | 616,000 | |||||||||||||||||||||
| Performance RSU | 1/30/17 | 938 | 3,750 | 7,500 | $ | 300,000 | |||||||||||||||||||||||
| Time-Based RSU | 1/30/17 | 1,218 | $ | 90,010 | |||||||||||||||||||||||||
| Stock Option | 1/30/17 | 16,179 | $ | 73.90 | $ | 210,003 | |||||||||||||||||||||||
| A. I. duPont | Annual Incentive Plan | 2/27/2017 | $ | — | $ | 305,612 | $ | 611,224 | |||||||||||||||||||||
| Performance RSU | 1/30/17 | 875 | 3,500 | 7,000 | $ | 280,000 | |||||||||||||||||||||||
| Time-Based RSU | 1/30/17 | 1,137 | $ | 84,024 | |||||||||||||||||||||||||
| Stock Option | 1/30/17 | 15,100 | $ | 73.90 | $ | 195,998 | |||||||||||||||||||||||
66
2022 Executive Compensation Tables
As noted under “Adjustments to Equity Awards in Connection with Separation” in the Compensation Discussion and Analysis, the information in this table is based on the equity award terms as in effect on December 31, 2022 before adjustment for the separation transaction and does not include information about Crane Company awards that are outstanding as a result of the adjustments for the separation transaction.
| Type of Award | Grant Date(1) | Estimated possible payouts under non-equity incentive plan awards(2) ($) | Estimated future payouts under equity incentive plan awards(3) (#) | All Other Stock Awards: Number of shares of stock or units (#) | All other option awards: Number of securities underlying options (#) | Exercise or base price of option awards ($/sh)(4) | Grant date fair value of stock and option awards ($)(5) | |||||||||||||||||||||||||||||||||||||||||||||||
Name | Threshold | Target | Max. |
| Threshold | Target | Max. |
| ||||||||||||||||||||||||||||||||||||||||||||||
M. H. Mitchell | AIP |
|
|
| — | 1,440,000 | 2,880,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
| PRSU | 2/7/2022 |
|
|
|
|
|
|
|
|
|
|
|
| 7,246 | 28,982 | 57,964 |
|
|
|
|
|
|
|
|
|
|
|
| 3,497,548 | ||||||||||||||||||||||||
| TRSU | 2/7/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 10,539 |
|
|
|
|
|
| 1,072,027 | ||||||||||||||||||||
|
| Options | 2/7/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 41,218 | 101.72 | 1,339,997 | ||||||||||||||||||||||
R. A. Maue | AIP |
|
|
| — | 575,877 | 1,151,754 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
| PRSU | 2/7/2022 |
|
|
|
|
|
|
|
|
|
|
|
| 1,598 | 6,390 | 12,780 |
|
|
|
|
|
|
|
|
|
|
|
| 771,145 | ||||||||||||||||||||||||
| TRSU | 2/7/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 3,195 |
|
|
|
|
|
| 324,995 | ||||||||||||||||||||
|
| Options | 2/7/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 9,997 | 101.72 | 325,002 | ||||||||||||||||||||||
A. W. Saak | AIP |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
| PRSU |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
| TRSU | 11/28/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 20,893 |
|
|
|
|
|
| 2,200,033 | ||||||||||||||||||||
|
| Options |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
| ||||||||||||||
A. M. D’Iorio | AIP |
|
|
| — | 367,527 | 735,054 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
| PRSU | 2/7/2022 |
|
|
|
|
|
|
|
|
|
|
|
| 983 | 3,932 | 7,864 |
|
|
|
|
|
|
|
|
|
|
|
| 474,514 | ||||||||||||||||||||||||
| TRSU | 2/7/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1,966 |
|
|
|
|
|
| 199,982 | ||||||||||||||||||||
|
| Options | 2/7/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 6,152 | 101.72 | 200,002 | ||||||||||||||||||||||
K. F. Gallo | AIP |
|
|
| — | 368,301 | 736,602 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
| PRSU | 2/7/2022 |
|
|
|
|
|
|
|
|
|
|
|
| 799 | 3,195 | 6,390 |
|
|
|
|
|
|
|
|
|
|
|
| 385,573 | ||||||||||||||||||||||||
| TRSU | 2/7/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1,598 |
|
|
|
|
|
| 162,549 | ||||||||||||||||||||
|
| Options | 2/7/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 4,998 | 101.72 | 162,485 | ||||||||||||||||||||||
| (1) | All grants of PRSUs, TRSUs and stock options were effective as of the grant date |
|
| (2) | On January |
| (3) | Amounts shown are the estimated number of shares |
2018 Proxy Statement 55
2017 Executive Compensation Tables
| (4) | The exercise price of options is the fair market value of |
| (5) | The grant date fair values of PRSUs, TRSUs, and stock options are as follows, |
| Type of Equity Award | Value | Method of Valuation | ||||
| Performance RSUs | $ | 80.00 | Monte Carlo pricing model | |||
| Time-based RSUs | $ | 73.90 | Closing trading price on grant date | |||
| Stock Options | $ | 12.98 | Black-Scholes pricing model | |||
Type of Equity Award | Value ($) | Method of Valuation | ||||
PRSUs | 120.68 | Monte Carlo pricing model | ||||
TRSUs (2/7/2022) | 101.72 | Closing trading price on grant date | ||||
TRSUs (11/28/2022) | 105.30 | Closing trading price on grant date | ||||
Stock Options | 32.51 | Black-Scholes pricing model | ||||
67
2022 Executive Compensation Tables
2022 Option Exercises and Stock Vested
The following table provides information on all exercises of stock options, and all vestingsvesting of restricted stock, TRSUs and PRSUs,RSUs, for each of the named executive officersNEOs during 2017.2022. Mr. Saak was hired in November 2022, and did not have any options exercised or stock vested in the period.
The value realized on exercise of options is computed by multiplying the number of shares acquired upon exercise by the difference between the market price of the shares on the applicable exercise date (calculated as the closing price on that date, or, if the shares received were concurrently sold, as the price actually obtained), and the exercise price of the options. The value realized on vesting of TRSUs and PRSUs is computed by multiplying the number of shares by the closing price on the applicable vesting date.
| Option Awards | Stock Awards | |||||||||
| Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares/Units Acquired on Vesting (#) | Value Realized on Vesting ($) | ||||||
| M. H. Mitchell | 50,000 | $ | 1,149,500 | 33,912 | $ | 2,506,097 | ||||
| R. A. Maue | — | $ | — | 8,258 | $ | 611,839 | ||||
| L. V. Pinkham | 34,948 | $ | 625,773 | 8,970 | $ | 665,724 | ||||
| B. L. Ellis | — | $ | — | 4,403 | $ | 326,388 | ||||
| A. I. duPont | — | $ | — | 6,923 | $ | 512,658 | ||||
56 Crane Co.
| Option Awards | Stock Awards | |||||||||||||||||||
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) |
| Number of Shares/Units Acquired on Vesting (#) | Value Realized on Vesting ($) | |||||||||||||||
M. H. Mitchell | 117,103 | 3,572,040 |
|
|
| 11,945 | 1,216,790 | |||||||||||||
R. A. Maue | 68,555 | 1,457,826 |
|
|
| 4,734 | 482,734 | |||||||||||||
A. W. Saak | 0 | 0 |
|
|
| 0 | 0 | |||||||||||||
A. M. D’Iorio | 5,680 | 261,848 |
|
|
| 2,281 | 231,272 | |||||||||||||
K. F. Gallo | 0 | 0 |
|
|
| 2,493 | 257,820 | |||||||||||||
68
20172022 Executive Compensation Tables
2022 Outstanding Equity Awards at Fiscal Year-End
The following table shows for each named executive officer,NEO, as of December 31, 2017:2022: (i) under the heading “Option Awards,” the number of unexercised options, whether exercisable or unexercisable, with the exercise price and expiration date of each grant; (ii) in the first and second columns under the heading “Stock Awards,” the number and market value of unvested shares of restricted stock, unvested time-based RSUsTRSUs and unvested retirement shares; and (iii) in the third and fourth columns under the heading “Stock Awards,” the number and market value of unearned performance-based RSUs.PRSUs. No such awards have been transferred by any of the named executive officers.NEOs. As noted under “Adjustments to Equity Awards in Connection with Separation” in the Compensation Discussion and Analysis, the information in this table is based on the outstanding equity awards as of December 31, 2022 before adjustment for the separation transaction and does not include information about Crane Company awards that are outstanding as a result of the adjustments for the separation transaction.
| Option Awards | StockAwards | |||||||||||||||||||
| Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable(1) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(2) | Market Value of Shares or Units of Stock That Have Not Vested ($)(3) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(4) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(3) | ||||||||||||
| M. H. Mitchell | 40,765 | 0 | $ | 48.59 | 1/28/2019 | — | — | 202,261 | $ | 18,045,736 | ||||||||||
| 69,212 | 23,071 | (5) | $ | 64.78 | 1/27/2024 | |||||||||||||||
| 67,951 | 67,952 | (6) | $ | 58.47 | 1/26/2025 | |||||||||||||||
| 54,447 | 163,344 | (7) | $ | 43.57 | 1/25/2026 | |||||||||||||||
| 0 | 117,103 | (8) | $ | 73.90 | 1/30/2027 | |||||||||||||||
| R. A. Maue | 17,471 | 0 | $ | 48.59 | 1/28/2019 | 5,757 | $ | 513,640 | 42,505 | $ | 3,792,279 | |||||||||
| 13,574 | 4,525 | (5) | $ | 64.78 | 1/27/2024 | |||||||||||||||
| 14,199 | 14,199 | (6) | $ | 58.47 | 1/26/2025 | |||||||||||||||
| 12,078 | 36,235 | (7) | $ | 43.57 | 1/25/2026 | |||||||||||||||
| 0 | 26,965 | (8) | $ | 73.90 | 1/30/2027 | |||||||||||||||
| L. V. Pinkham | 13,156 | 4,386 | (5) | $ | 64.78 | 1/27/2024 | 8,035 | $ | 716,883 | 33,792 | $ | 3,014,935 | ||||||||
| 12,424 | 12,424 | (6) | $ | 58.47 | 1/26/2025 | |||||||||||||||
| 9,394 | 28,183) | (7) | $ | 43.57 | 1/25/2026 | |||||||||||||||
| 0 | 20,223 | (8) | $ | 73.90 | 1/30/2027 | |||||||||||||||
| B. L. Ellis | 11,763 | 0 | $ | 48.59 | 1/28/2019 | 4,399 | $ | 392,479 | 27,040 | $ | 2,412,528 | |||||||||
| 6,786 | 2,263 | (5) | $ | 64.78 | 1/27/2024 | |||||||||||||||
| 8,874 | 8,874 | (6) | $ | 58.47 | 1/26/2025 | |||||||||||||||
| 8,052 | 24,157 | (7) | $ | 43.57 | 1/25/2026 | |||||||||||||||
| 0 | 16,179 | (8) | $ | 73.90 | 1/30/2027 | |||||||||||||||
| A. I. duPont | 16,396 | 0 | $ | 48.59 | 1/28/2019 | 3,629 | $ | 323,779 | 26,534 | $ | 2,367,358 | |||||||||
| 11,778 | 3,926 | (5) | $ | 64.78 | 1/27/2024 | |||||||||||||||
| 9,939 | 9,939 | (6) | $ | 58.47 | 1/26/2025 | |||||||||||||||
| 7,515 | 22,546 | (7) | $ | 43.57 | 1/25/2026 | |||||||||||||||
| 0 | 15,100 | (8) | $ | 73.90 | 1/30/2027 | |||||||||||||||
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable(1) | Option Exercise Price ($) | Option Expiration Date |
| Number of Shares or Units of Stock That Have Not Vested (#)(2) | Market Value of Shares or Units of Stock That Have Not Vested ($)(3) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(4) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(3) | |||||||||||||||||||||||||||
M. H. Mitchell | 83,193 | — | 93.40 | 1/29/28 |
|
|
| 20,274 | 2,036,523 | 147,190 | 14,785,227 | |||||||||||||||||||||||||
| 87,219 | 29,074 | (5) | 79.14 | 1/28/29 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
| 59,136 | 59,137 | (6) | 83.58 | 1/27/30 |
|
|
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|
|
| ||||||||||||||||
| 15,309 | 45,930 | (7) | 78.59 | 1/25/31 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
|
| — | 41,218 | (8) | 101.72 | 2/7/32 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
R. A. Maue | — | 6,650 | (5) | 79.14 | 1/28/29 |
|
|
| 8,119 | 815,554 | 32,462 | 3,260,823 | ||||||||||||||||||||||||
| 13,141 | 13,142 | (6) | 83.58 | 1/27/30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
| 3,752 | 11,258 | (7) | 78.59 | 1/25/31 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
| — | 9,997 | (8) | 101.72 | 2/7/32 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
|
| — | — | — | — |
|
|
|
|
|
|
|
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|
|
|
|
|
|
| |||||||||||||||||
A. W. Saak | — | — | — | — |
|
|
| 20,893 | 2,098,702 | — | — | |||||||||||||||||||||||||
|
| — | — | — | — |
|
|
|
|
|
|
|
|
|
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|
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|
|
| |||||||||||||||||
A. M. D’Iorio | 7,704 | — | 73.90 | 1/30/27 |
|
|
| 4,506 | 452,628 | 18,815 | 1,889,976 | |||||||||||||||||||||||||
| 9,837 | — | 93.40 | 1/29/28 |
|
|
|
|
|
|
|
|
|
|
|
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| |||||||||||||||||
| 9,975 | 3,325 | (5) | 79.14 | 1/28/29 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
| 7,118 | 7,119 | (6) | 83.58 | 1/27/30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
| 2,101 | 6,304 | (7) | 78.59 | 1/25/31 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
|
| — | 6,152 | (8) | 101.72 | 2/7/32 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
K. F. Gallo | 7,455 | — | 58.47 | 1/26/25 |
|
|
| 4,538 | 455,842 | 16,705 | 1,678,026 | |||||||||||||||||||||||||
| 11,325 | — | 73.90 | 1/30/27 |
|
|
|
|
|
|
|
|
|
|
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|
|
|
| |||||||||||||||||
| 8,263 | — | 93.40 | 1/29/28 |
|
|
|
|
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|
|
|
|
|
|
|
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|
| |||||||||||||||||
| 7,481 | 2,494 | (5) | 79.14 | 1/28/29 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
| 7,118 | 7,119 | (6) | 83.58 | 1/27/30 |
|
|
|
|
|
|
|
|
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|
|
|
|
|
| ||||||||||||||||
| 1,951 | 5,854 | (7) | 78.59 | 1/25/31 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
|
| — | 4,998 | (8) | 101.72 | 2/7/32 |
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| ||||||||||||||||
| (1) | Options vest on the dates indicated in the corresponding footnote; options also vest (or continue to vest per schedule in case of retirement for certain awards) upon death, disability, retirement, or termination after a change in control. Retirement for this purpose |
2018 Proxy Statement 57
69
20172022 Executive Compensation Tables
| (2) | Figures in this column include time-based RSUs |
| Vesting Date | Mitchell | Maue | Pinkham | Ellis | duPont | ||||||
| January 25, 2018 | — | 775 | 1,750 | 517 | 482 | ||||||
| January 26, 2018 | — | 513 | 449 | 320 | 359 | ||||||
| January 27, 2018 | — | 377 | 365 | 189 | 326 | ||||||
| January 30, 2018 | — | 507 | 380 | 304 | 284 | ||||||
| January 25, 2019 | — | 774 | 1,750 | 516 | 482 | ||||||
| January 26, 2019 | — | 513 | 449 | 321 | 360 | ||||||
| January 30, 2019 | — | 508 | 381 | 305 | 285 | ||||||
| January 25, 2020 | — | 775 | 1,750 | 517 | 482 | ||||||
| January 30, 2020 | — | 507 | 380 | 304 | 284 | ||||||
| January 30, 2021 | — | 508 | 381 | 305 | 285 |
Vesting Date | Mitchell | Maue | Saak | D’Iorio | Gallo | |||||||||||||||
January 25, 2023 | 3,245 | 994 | — | 557 | 517 | |||||||||||||||
January 27, 2023 | — | 538 | — | 292 | 292 | |||||||||||||||
January 28, 2023 | — | 569 | — | 285 | 214 | |||||||||||||||
February 7, 2023 | 2,634 | 798 | — | 491 | 399 | |||||||||||||||
March 29, 2023 | — | 296 | — | — | 591 | |||||||||||||||
November 28, 2023 | — | — | 5,223 | — | — | |||||||||||||||
January 25, 2024 | 3,245 | 994 | — | 557 | 517 | |||||||||||||||
January 27, 2024 | — | 539 | — | 292 | 292 | |||||||||||||||
February 7, 2024 | 2,635 | 799 | — | 492 | 400 | |||||||||||||||
November 28, 2024 | — | — | 5,223 | — | — | |||||||||||||||
January 25, 2025 | 3,245 | 994 | — | 557 | 517 | |||||||||||||||
February 7, 2025 | 2,635 | 799 | — | 491 | 399 | |||||||||||||||
November 28, 2025 | — | — | 5,223 | — | — | |||||||||||||||
February 7, 2026 | 2,635 | 799 | — | 492 | 400 | |||||||||||||||
November 28, 2026 | — | — | 5,224 | — |
|
|
| |||||||||||||
For all grants, vesting also occurs (or continues to occur per schedule in case of retirement for certain awards) upon death, disability, or retirement, or upon a change in control. Retirement for this purpose generally means termination of employment after age 65, or after age 62 with at least |
| (3) | Computed using a price of |
| (4) | The PRSUs granted in |
| (5) | This option grant will |
| (6) | This option grant will |
| (7) | This option grant will |
| (8) | This option grant will |
Employees Hired Prior to 2006 (defined benefit)— All employees of Crane Co.the Company hired before January 1, 2006, including Messrs. Mitchell Ellis and duPont,D’Iorio, have accrued retirement benefits under the Company’s defined benefit pension plan, which was closed to employees hired after 2005 and then frozen with no further benefit accruals effective December 31, 2012. For all eligible salaried employees, including all of the executive officers, Crane Co.the Company provides a retirement benefit equal to three percent of covered compensation, subject to Internal Revenue Code limits as described below, which amount is invested in the Crane Co.Company’s Savings and Investment Plan (401(k) plan), a defined contribution retirement plan, at the direction of the employee. As noted earlier, Crane Company retained sponsorship of the defined benefit plan and the 401(k) plan in connection with the separation transaction. Crane NXT employees do not participate in the defined benefit plan, and Crane NXT adopted its own 401(k) plan that mirrors the Company’s pre-separation 401(k) plan.
Effective January 1, 2013, all executive officers and other employees who were participants in the pension plan receive annual pension benefits payable under the pension plan equal to 1-2/3% per year of service of the participant’s average annual compensation during the five highest compensated consecutive years (prior to 2013) of the 10 years of service
70
2022 Executive Compensation Tables
immediately preceding retirement less 1-2/3% per year of service of the participant’s Social Security benefit, up to a maximum deduction of 50% of the Social Security benefit. Compensation for purposes of the pension plan is defined as total W-2 compensation plus employee contributions made under salary reduction plans lessless: (i) reimbursements or other expense allowances; (ii) cash and noncash fringe benefits (including automobile allowances); (iii) moving expenses (including “home allowances”); (iv) deferred compensation; (v) welfare benefits; (vi) severance pay; (vii) amounts realized from the exercise of a non-qualified stock option or the sale, exchange or other disposition of stock acquired under a qualified stock option; and (viii) amounts realized when restricted stock (or property) held by the employee is recognized in the employee’s taxable income under Section 83 of the Internal Revenue Code. However, the tax code limits the total compensation taken into account for any participant under the pension plan. That limit was $270,000$305,000 for 2017,2022 and is subject to adjustment in future years.
58 Crane Co.
2017 Executive Compensation Tables
Benefit Equalization Plan— The NEOs also participate in the Benefit Equalization Plan, a non-qualified, non-elective deferred compensation plan. Under the Benefit Equalization Plan, participating executives receive a benefit intended to restore retirement benefits under the Company’s regular pension plan that are limited by the Internal Revenue Code cap on the amount of compensation that can be considered in determining benefits under tax-qualified pension plans. There is no supplemental benefit based on deemed service or enhanced compensation formulas. Benefits accrued under this plan are not funded or set aside in any manner. The NEOsonly NEO with defined benefit accountsaccount in this plan areis Mr. Mitchell, Mr. Ellis and Mr. duPont.Mitchell. This plan was also frozen as to defined benefit accruals effective December 31, 2012. Like the defined benefit pension plan, this plan was retained by Crane Company as part of the separation transaction. Effective January 1, 2014, the Benefit Equalization Plan was amended to cover participants’ benefits under the defined contribution retirement plan referenced above, and the Committee extended the participation in this Planplan to 21certain senior leadership executives based on title and position, including all of the NEOs. Like the 401(k) plan, sponsorship of the Benefit Equalization Plan was retained by Crane Company as part of the separation transaction, and Crane NXT adopted a mirror plan for its eligible employees.
See “Nonqualified Deferred Compensation Benefits” below, regarding certain employer contributions to the Benefit Equalization Plan for the year 20132014 and after.
The table below sets forth the number of years of credited service and the present value at December 31, 20172022, of the accumulated benefit under the Pension Planpension plan and the Benefit Equalization Plan for each of the named executive officersNEOs covered by those plans.
| Name | Plan Name | Number of Years Credited Service (#) | Present Value of Accumulated Benefit ($)(1) | Payments During Last Fiscal Year ($) | |||||
| M. H. Mitchell | Crane Co. Pension Plan for Eligible Employees | 9 | $ | 309,384 | — | ||||
| Crane Co. Benefit Equalization Plan | 9 | $ | 750,778 | — | |||||
| B. L. Ellis | Crane Co. Pension Plan for Eligible Employees | 16 | $ | 467,049 | — | ||||
| Crane Co. Benefit Equalization Plan | 16 | $ | 685,907 | — | |||||
| A. I. duPont | Crane Co. Pension Plan for Eligible Employees | 17 | $ | 810,388 | — | ||||
| Crane Co. Benefit Equalization Plan | 17 | $ | 1,142,842 | — | |||||
Name | Plan Name | Number of Years Credited Service (#) | Present Value of Accumulated Benefit ($)(1) | Payments During Last Fiscal Year ($) | ||||||||||
M. H. Mitchell | Crane Co. Pension Plan for Eligible Employees | 9 | 288,681 | — | ||||||||||
|
| Crane Co. Benefit Equalization Plan | 5 | 727,813 | — | ||||||||||
A. M. D’Iorio | Crane Co. Pension Plan for Eligible Employees | 8 | 246,439 | — | ||||||||||
(1) | The actuarial present value of each participant’s accumulated pension benefit is determined using the same assumptions and pension plan measurement date used for financial statement reporting purposes. The actual retirement benefit at normal retirement date payable under the |
2018 Proxy Statement 59
2017 Executive Compensation Tables
Nonqualified Deferred Compensation Benefits
The Benefit Equalization Plan was amended effective January 1, 2014, to add a defined contribution component that restores the tax-limited portion of the non-matching company contribution under the Company’s 401(k) plan. That benefit is currently three percent of a participant’s annual salary plus bonus in excess of the Internal Revenue Code compensation limit that applies under the 401(k) plan. Contributions earn interest during a plan year at a rate equal to
71
2022 Executive Compensation Tables
the average 10-year Treasury Constant Maturities for the month of December immediately preceding such plan year. The contributions become vested based on the participant’s years of service at the rate of 20% per year over five years. Vested contributions, as adjusted for interest, are payable in a lump sum cash payment six months after termination of employment. As noted above, sponsorship of the Benefit Equalization Plan was retained by Crane Company as part of the separation transaction, and Crane NXT adopted a mirror plan for its eligible employees.
The following table shows information about the participation by each named executive officerNEO in the Benefit Equalization Plan with respect to this employer contribution. The named executive officersNEOs do not participate in any other defined contribution nonqualified deferred compensation plans.
20172022 Nonqualified Deferred Compensation
| Name | Executive Contributions in 2017 ($) | Employer Contributions in 2017(1) ($) | Aggregate Earnings in 2017(2) ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at December 31, 2017 ($) | ||||||||
| M. H. Mitchell | — | $ | 55,154 | $ | 3,273 | — | $ | 189,860 | |||||
| R. A. Maue | — | $ | 22,323 | $ | 1,527 | — | $ | 85,161 | |||||
| L. V. Pinkham | — | $ | 20,092 | $ | 1,087 | — | $ | 64,846 | |||||
| B. L. Ellis | — | $ | 15,473 | $ | 1,324 | — | $ | 69,981 | |||||
| A. I. duPont | — | $ | 16,158 | $ | 1,207 | — | $ | 65,836 | |||||
Name | Executive Contributions in 2022 ($) | Employer Contributions in 2022(1) ($) | Aggregate Earnings in 2022 ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at December 31, 2022 ($) | |||||||||||||||
M. H. Mitchell | — | 113,250 | 5,848 | — | 516,924 | |||||||||||||||
R. A. Maue | — | 43,217 | 2,625 | — | 224,379 | |||||||||||||||
A. W. Saak | — | — | — | — | — | |||||||||||||||
A. M. D’Iorio | — | 27,545 | 648 | — | 72,279 | |||||||||||||||
K. F. Gallo | — | 27,836 | 1,979 | — | 164,413 | |||||||||||||||
| (1) | Amounts in this column are included in “All Other Compensation” in the 2022 Summary Compensation Table. |
Potential Payments Upon Termination or Change in Control
The named executive officersNEOs would have received certain payments or other benefits in the following circumstances, assuming that each had taken place on December 31, 2017:2022:
the executive resigns voluntarily; |
the executive is involuntarily terminated, either directly or constructively; |
the executive retires; |
the executive dies or becomes permanently disabled while employed; or |
a change in control of | ||
| the executive is terminated |
60 Crane Co.
2017 Executive Compensation Tables
Such payments or other benefits would be due to the named executive officersNEOs under the following plans and agreements:
Severance Pay
Our stated severance policy is to pay salaried employees one week per year of service upon termination of employment by the Company for the convenience of Crane Co.;the Company; however, our prevailing practice on severance in the case of executive officers is to pay the executive an amount equal to one year’s base salary, either in a lump sum or by continuation of biweekly payroll distributions, at the election of the executive, with medical, dental, and other welfare benefits and retirement benefits continuing during such period. Under this practice, if each of the named executive officersNEOs had been terminated by Crane for the convenience of Crane as of December 31, 2017,2022, the severance to which they would have been entitled (including the estimated value of continuation of welfare benefits) would have been as follows:
| M. H. Mitchell | $ | 1,001,941 |
| R. A. Maue | $ | 567,021 |
| L. V. Pinkham | $ | 523,595 |
| B. L. Ellis | $ | 465,837 |
| A.I. duPont | $ | 455,608 |
M. H. Mitchell | $ | 1,225,312 | ||
R. A. Maue | $ | 744,731 | ||
A. W. Saak | $ | 818,695 | ||
A. M. D’Iorio | $ | 525,954 | ||
K. F. Gallo | $ | 545,833 | ||
72
2022 Executive Compensation Tables
Stock Options
Voluntary Resignation | Unvested options cancelled; vested options remain exercisable for a period following termination of employment, as stated in the applicable award agreement, generally | |
Involuntary Termination | Unvested options cancelled; vested options remain exercisable for a period following termination of employment, as stated in the applicable award agreement, generally | |
Retirement | Options continue to become vested and exercisable in accordance with | |
Death or Permanent | Unvested options become immediately exercisable | |
Change in Control | No change | |
Termination After | Vesting is accelerated only if employment is terminated, involuntarily or for Good Reason, within two years after the change in control | |
If the then unvested stock options of each of the named executive officersNEOs had become exercisable as of December 31, 2017,2022, and assuming the value of Crane Co.the Company’s stock to be $89.22$100.45 per share, the closing price on the last trading day of 2017,2022, the aggregate value to each of the named executive officersNEOs of exercising the unvested options on that date would have been as follows:
| M. H. Mitchell | $ | 11,904,051 |
| R. A. Maue | $ | 2,614,442 |
| L. V. Pinkham | $ | 2,085,602 |
| B. L. Ellis | $ | 1,678,813 |
| A. I. duPont | $ | 1,662,133 |
2018 Proxy Statement 61
M. H. Mitchell | $ | 2,621,238 | ||
R. A. Maue | $ | 609,517 | ||
A. W. Saak | $ | — | ||
A. M. D’Iorio | $ | 328,759 | ||
K. F. Gallo | $ | 301,213 | ||
2017 Executive Compensation Tables
Restricted Share Units and Performance Restricted Share Units
Voluntary Resignation | Forfeited | |
Involuntary Termination | Forfeited | |
Retirement(1) | Continue to vest in accordance with the regular schedule, subject to compliance with a covenant not to compete with the Company | |
Death or Permanent | Immediate vesting(2) | |
Change in Control | No change | |
Termination After | Accelerated vesting only if employment is terminated, involuntarily or for Good Reason, within two years after the change in control(3) | |
| (1) | Retirement for this purpose generally means termination of employment after age 65, or after age 62 with at least |
| Vesting of PRSUs is not determined until after the applicable performance period based on the actual performance results. Amounts in the table immediately below assume 52.6% for 2020 and 200% for the 2021 and 2022 grant (based on performance through the end of the last fiscal year). |
| (2) | Vesting of PRSUs is not determined until after the applicable performance period based on the actual performance results. Amounts in the table immediately below assume 52.6% for 2020 and 200% for the 2021 and 2022 grant (based on performance through the end of the last fiscal year). |
| (3) | For PRSUs vesting in connection with a change in control, the number of shares vesting is generally based on performance results determined through the date immediately before the change in control, except that if the change in control occurs during the first half of the performance period, the number of PRSUs vesting is based on target performance. Amounts in the table immediately below assume 52.6% for 2020, 200% for the 2021 grant (based on performance through the end of the last fiscal year), and 100% (target) for the 2022 grant. |
73
2022 Executive Compensation Tables
If the then unvested RSUs (including PRSUs) owned by each of the named executive officersNEOs had become vested as of December 31, 2017,2022, and assuming the value of Crane Co. stock to be $89.22$100.45 per share, the closing price on the last trading day of 2017,2022, the aggregate value to each of the named executive officersNEOs would have been as follows:
| M. H. Mitchell | $ | 10,783,665 |
| R. A. Maue | $ | 2,814,445 |
| L. V. Pinkham | $ | 2,489,287 |
| B. L. Ellis | $ | 1,885,308 |
| A. I. duPont | $ | 1,717,039 |
Retirement Shares.Prior to 2008, the Committee administered a program using periodic, discretionary awards of restricted stock (“retirement shares”) to make up the shortfall in executive officer and key employee pension benefits imposed by certain federal tax policies which limit the amount of compensation that can be considered in determining benefits under tax-qualified pension plans. This plan was discontinued in 2008 when, at the recommendation of the Committee, the Board of Directors adopted the Benefit Equalization Plan. Mr. Ellis held 800 retirement shares which vested on January 28, 2018, and would also have vested earlier in the event of his retirement, death or disability, or a change in control of Crane Co. If the retirement shares had become vested as of December 31, 2017, and assuming the value of Crane Co. stock to be $89.22 per share, the value of those retirement shares would have been $71,376.
|
| Retirement, Death or Disability ($) | Termination after Change in Control ($) | ||||||
M. H. Mitchell | 16,821,751 | 13,910,509 | ||||||
R. A. Maue | 4,076,377 | 3,434,501 | ||||||
A. W. Saak | 2,098,702 | 2,098,702 | ||||||
A. M. D’Iorio | 2,342,603 | 1,947,634 | ||||||
K. F. Gallo | 2,133,868 | 1,812,930 | ||||||
Benefit Equalization Plan
Each of the named executive officersNEOs participates in the Benefit Equalization Plan described in the Compensation Discussion and Analysis at page 43 and under the caption “Retirement Benefits” on page 59.70. Assuming their separation from service as of December 31, 2017,2022, they would have become entitled to the following benefits under the defined benefit and defined contribution portions of the Benefit Equalization Plan, respectively. In the event of a participant’s death, one-half of the benefit would be payable to the participant’s beneficiary.
| Defined Benefit | Defined Contribution | |||||
| M. H. Mitchell | $ | 750,778 | $ | 189,860 | ||
| R. A. Maue | 0 | $ | 85,161 | |||
| L. V. Pinkham | 0 | $ | 64,846 | |||
| B. L. Ellis | $ | 685,907 | $ | 69,981 | ||
| A. I. duPont | $ | 1,142,842 | $ | 65,836 | ||
62 Crane Co.
|
| Defined Benefit ($) | Defined Contribution ($) | ||||||
M. H. Mitchell | 727,813 | 516,924 | ||||||
R. A. Maue |
|
|
| 224,379 | ||||
A. W. Saak |
|
|
| — | ||||
A. M. D’Iorio |
|
|
| 72,279 | ||||
K. F. Gallo |
|
|
| 164,413 | ||||
2017 Executive Compensation Tables
Change in Control Agreements
Each of the named executive officersNEOs has an agreement which,that, in the event of a change in control of Crane Co.,the Company, provides for the continuation of the employee’s then current base salary, bonus plan, and benefits for the three yearthree-year period following the change in control. The agreements are for a three yearthree-year period, but are automatically extended annually by an additional year unless Crane Co.the Company gives notice that the period shall not be extended. As noted above, for the NEOs who remained with Crane Company in the separation transaction, these agreements were assumed by Crane Company.
Upon termination within three years after a change in control, by Crane Co.the Company without “Cause” or by the employee with “Good Reason” (as defined in the agreement), the employee is immediately entitled to a proportionate amount of the greater of the last year’s bonus or the average bonus paid in the three prior years, plus three times the sum of his or her annual salary and the greater of the last year’s bonus or the average of the previous three years’ bonuses. All accrued deferred compensation and vacation pay, employee benefits, medical coverage, and other benefits also continue for three years (or until normal retirement) after termination.
“Cause” under the change in control agreements generally includes, among other things, personal dishonesty or certain breaches of fiduciary duty; repeated, willful, and deliberate failure to perform the executive’s specified duties; the commission of a criminal act related to the performance of duties; distributing proprietary confidential information about the Company; habitual intoxication by alcohol or other drugs during work hours; or conviction of a felony.
“Good Reason” under the change in control agreements includes, among other things, any action by Crane Co. whichthat results in a diminution in the position, authority, duties, or responsibilities of the employee.
74
2022 Executive Compensation Tables
If a change in control had taken place on December 31, 2017,2022, and employment had terminated immediately thereafter, each of the named executive officersNEOs would have become entitled to the following benefits under this provision:
| Cash Payment | Estimated value of continuation for three years (or until normal retirement) of medical coverage and other benefits | |||||
| M. H. Mitchell | $ | 7,477,308 | $ | 80,824 | ||
| R. A. Maue | $ | 3,125,404 | $ | 81,063 | ||
| L. V. Pinkham | $ | 3,253,612 | $ | 40,785 | ||
| B. L. Ellis | $ | 3,046,175 | $ | 77,510 | ||
| A. I. duPont | $ | 2,800,435 | $ | 57,058 | ||
|
| Cash Payment ($) | Estimated value of continuation for three years (or until normal retirement) of medical coverage and other benefits ($) | ||||||
M. H. Mitchell | 11,278,080 | 75,935 | ||||||
R. A. Maue | 5,230,114 | 74,654 | ||||||
A. W. Saak | 2,400,000 | 56,086 | ||||||
A. M. D’Iorio | 3,534,766 | 2,749 | ||||||
K. F. Gallo | 3,941,452 | 59,067 | ||||||
Aggregate Benefit Amounts
The table below reflects the estimated aggregate compensation that each of the named executive officersNEOs would receive in the event of his voluntary resignation, involuntary termination, normal retirement at age 65, death or disability, change in control, and termination following a change in control. The amounts shown assume that such termination was effective as of December 31, 2017,2022, and include amounts earned through that date. They are therefore not equivalent to the amount that would be paid out to the executive upon termination at another time.
| Name | Voluntary Resignation | Involuntary Termination | Retirement | Death or Disability | Change in Control | Change in Control and Termination | |||||||||||
| M. H. Mitchell | $— | $ | 1,001,941 | $ | 22,687,715 | $ | 22,687,715 | $ | — | $ | 30,245,848 | ||||||
| R. A. Maue | $— | $ | 567,021 | $ | 5,428,887 | $ | 5,428,887 | $ | — | $ | 8,635,353 | ||||||
| L. V. Pinkham | $— | $ | 523,595 | $ | 4,574,889 | $ | 4,574,889 | $ | — | $ | 7,869,287 | ||||||
| B. L. Ellis | $— | $ | 465,837 | $ | 3,564,120 | $ | 3,564,120 | $ | 71,376 | $ | 6,687,805 | ||||||
| A. I. duPont | $— | $ | 455,608 | $ | 3,379,171 | $ | 3,379,171 | $ | — | $ | 6,236,665 | ||||||
2018 Proxy Statement 63
Name | Voluntary Resignation ($) | Involuntary Termination ($) | Retirement ($) | Death or Disability ($) | Change in Control ($) | Termination after Change in Control ($) | ||||||||||||||||||
M. H. Mitchell | — | 1,225,312 | 19,442,989 | 19,442,989 | — | 27,885,761 | ||||||||||||||||||
R. A. Maue | — | 744,731 | 4,685,894 | 4,685,894 | — | 9,348,786 | ||||||||||||||||||
A. W. Saak | — | 818,695 | 2,098,702 | 2,098,702 | — | 4,554,788 | ||||||||||||||||||
A. M. D’Iorio | — | 525,954 | 2,671,362 | 2,671,362 | — | 5,813,908 | ||||||||||||||||||
K. F. Gallo | — | 545,833 | 2,435,081 | 2,435,081 | — | 6,114,662 | ||||||||||||||||||
Equity Compensation Plan Table
As of December 31, 2022: | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | Weighted average exercise price of outstanding options (b) | Number of securities remaining available for future issuance under equity compensation plans (c) | |||||||||
Equity compensation plans approved by security holders: |
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2018 Stock Incentive Plan (and predecessor plans) | 2,148,776 | (*) | $ | 75.45 | — | |||||||
2018 Amended and Restated Stock Incentive Plan | 436,752 | $ | 101.72 | 4,520,597 | ||||||||
Equity compensation plans not approved by security holders | — | — | — | |||||||||
Total | 2,585,528 | $ | 77.19 | 4,520,597 | ||||||||
* Includes 386,078 RSUs, 120,260 DSUs and 387,678 PRSUs, assuming the maximum potential payout percentage. Actual numbers of shares may vary, depending on actual performance. If the PRSUs included in this total vest at the target performance level as opposed to the maximum level, the aggregate awards outstanding would be 2,391,689. Column (b) does not take RSUs, PRSUs or DSUs into account because they do not have an exercise price.
75
2017
As permitted by SEC rules, we used the same median employees (worldwide and United States) for 2022 as identified for 2021 and 2020, because there were no significant changes to our workforce or pay design for 2022.
10,749 employees for 2020.
A new equity compensation planTables
The following table shows information regarding our equity compensation plans as of December 31, 2017:
| Number of securities to be issued upon exercise of outstanding options, warrants and rights(1) | Weighted average exercise price of outstanding options(2) | Number of securities remaining available for future issuance under equity compensation plans | |||||
| Equity compensation plans approved by security holders: | |||||||
| 2013 Stock Incentive Plan (and predecessor plans) | 3,623,918 | $ | 56.45 | 3,865,736 | |||
| Equity compensation plans not approved by security holders | 0 | NA | 0 | ||||
| Total | 3,623,918 | $ | 56.45 | 3,865,736 | |||
64 Crane Co.
Item 4: Proposal to Approve 2018 Stock Incentive Plan
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Ascompensation-setting discussed elsewhere in the Compensation Discussion and Analysis section of this Proxy Statement (“CD&A”), not in replacement. Additional information on how the Compensation Committee makes compensation decisions and aligns pay with performance can be found in the “Compensation Decision-Making Process” section of the CD&A.
Performance Metric | Impact on CAP | |
Adjusted EPS | ||
| Earnings from continuing operations per diluted share excluding Special Items | Determines 75% of the annual incentive payout for the PEO and other corporate NEOs | |
Adjusted Free Cash Flow | ||
| Cash provided by operating activities, less capital spending | Determines 25% of annual incentive payout for the PEO and other corporate NEOs | |
Relative Total Shareholder Return | ||
| Stock price performance versus a comparator group (S&P 400 MidCap Capital Goods Index) | Determines 100% of the PRSU payout, which represents 55% of the annual LTI grant value for the PEO and 50% for other NEOs | |
Summary Compensation Table | Compensation Actually Paid | |
The SCT includes a mix of both compensation earned during the year (i.e., base salary and annual incentives) and estimated future contingent pay opportunities (i.e., LTI and pension benefits). The SCT uses accounting conventions to estimate the fair value of LTI awards on the grant date. This value can significantly differ from the value ultimately realized by the NEO. Further, the SCT includes a change in the present value of pension benefits that are impacted by various economic actuarial assumptions that do not necessarily represent the additional benefit earned by the NEO during the year. | Like the SCT, CAP includes a mix of both compensation earned during the year (i.e., base salary and annual incentives) and estimated future contingent pay opportunities (i.e., LTI and pension benefits). CAP uses the same accounting conventions used for the SCT to estimate the value of LTI. However, the CAP LTI values represent a year-over-year change in the accounting values of all previously granted unvested LTI awards, and LTI awards that vested during the year. For stock options and appreciation rights, this accounting value at vest does not represent the actual value realized by the NEO, which will ultimately be realized when the NEO exercises their options. CAP also includes the pension benefit service cost, which seeks to neutralize the effect of certain economic actuarial assumptions. | |
Calculations | ||
| Base salary paid during the year | Base salary paid during the year | |
| Annual incentives earned for the applicable year’s performance | Annual incentives earned for the applicable year’s performance | |
| Grant date accounting fair value of LTI awarded during the year | Change in accounting fair value of all LTI awards that are unvested as of year-end, that vested or were forfeited during the year, plus any cash dividends paid on those awards during the year | |
| All other compensation | All other compensation | |
Changes in the actuarial present value of pension benefits + above market earnings of non-qualified deferred compensation | Current year service cost of pension benefits and any prior year service cost of pension benefits (if a plan amendment occurred during the year) + above market earnings of non-qualified deferred compensation | |
Year (1) (a) | Summary Compensation Table Total for PEO (Mitchell) (2) (b) | Compensation Actually Paid to PEO (Mitchell) (3) (c) | Average Summary Compensation Table Total for Non-PEO NEOs (4) (d) | Average Compensation Actually Paid to Non-PEO NEOs (5) (e) | Value of Initial Fixed $100 Investment Based on: | Net Income (GAAP) (8) (h) | Adjusted EPS (9) (i) | |||||||||||||||||||||||||
Total Shareholder Return (6) (f) | Peer Group Total Shareholder Return (7) (g) | |||||||||||||||||||||||||||||||
| 2022 | $ | 9,316,556 | $ | 10,823,056 | $ | 2,368,300 | $ | 2,520,280 | $ | 124 | $ | 133 | $ | 401.1 | $ | 7.87 | ||||||||||||||||
| 2021 | $ | 9,484,490 | $ | 13,917,645 | $ | 2,183,277 | $ | 2,995,405 | $ | 123 | $ | 150 | $ | 435.4 | $ | 7.08 | ||||||||||||||||
| 2020 | $ | 6,361,666 | $ | 2,420,223 | $ | 1,595,008 | $ | 1,044,106 | $ | 92 | $ | 118 | $ | 181.0 | $ | 3.84 | ||||||||||||||||
| (1) | The Pay Versus Performance table reflects required disclosures for fiscal years 2022, 2021, and 2020. |
| (2) | For fiscal years 2022, 2021, and 2020, Mr. Mitchell was the Principal Executive Officer (PEO) for the Company. |
| (3) | Compensation Actually Paid (CAP) is calculated from the PEO’s SCT compensation total, less the amounts reported in the SCT equity awards (i.e., RSUs, PRSUs, and stock options); adding the fair value as of the end of the covered fiscal year of all awards granted during the fiscal year that are outstanding and unvested as of the fiscal year-end; adding the amount equal to the change in fair value as of the end of the covered fiscal year, whether positive or negative, of any awards granted in any prior fiscal year that are outstanding and unvested as of the end of the covered fiscal year; adding the amount equal to the change in fair value as of the vesting date, whether positive or negative, of any award granted in any prior fiscal year for which all applicable vesting conditions were satisfied at the end of or during the covered fiscal year. The following table shows the relationship between SCT compensation and CAP: |
Year | Salary | Bonus and Non-Equity Incentive Compensation | All Other Compensation (i) | Stock Awards | Options Awards | Change in Pension Value and Nonqualified Deferred Compensation Earnings | SCT Total | Deductions from SCT Total (ii) | Additions to SCT Total (iii) | CAP | ||||||||||||||||||||||||||||||
| 2022 | $ | 1,200,000 | $ | 1,919,520 | $ | 287,464 | $ | 4,569,575 | $ | 1,339,997 | $ | 0 | $ | 9,316,556 | ($ | 5,909,572 | ) | $ | 7,416,072 | $ | 10,823,056 | |||||||||||||||||||
| 2021 | $ | 1,177,990 | $ | 2,880,000 | $ | 195,104 | $ | 3,956,400 | $ | 1,274,996 | $ | 0 | $ | 9,484,490 | ($ | 5,231,396 | ) | $ | 9,664,551 | $ | 13,917,645 | |||||||||||||||||||
| 2020 | $ | 857,475 | $ | 156,663 | $ | 116,063 | $ | 3,156,256 | $ | 1,890,003 | $ | 185,206 | $ | 6,361,666 | ($ | 5,231,465 | ) | $ | 1,290,022 | $ | 2,420,223 | |||||||||||||||||||
| i. | Reflects the PEO’s All Other Compensation reported in the SCT for each year shown. |
| ii. | Represents the grant date fair value of equity-based awards granted each year and change in pension value. |
| iii. | Additions to the SCT Total reflect the value of equity calculated in accordance with the SEC methodology for determining CAP for each year shown. The equity awards were revalued using the Monte Carlo values for the PRSUs (which vest based on relative TSR) and the Black-Scholes values for the options. Because the Company includes the amount of cash dividends paid with respect to unvested TRSUs as compensation in the All Other Compensation column of the SCT, no adjustments were made for purposes of calculating CAP. Dividends or dividend equivalents do not accrue on stock options of PRSUs. There were no service cost additions to be made with respect to pension values because the Company’s pension plan was previously frozen. |
Year | Year End Fair Value of Equity Awards Granted in the Year | Year over Year Change in Fair Value of Outstanding Unvested Equity Awards Granted in Prior Years | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | Total Equity Value Included in CAP | ||||||||||||
| 2022 | $ | 6,122,264 | $ | 1,872,556 | ($ | 578,748 | ) | $ | 7,416,072 | |||||||
| 2021 | $ | 7,744,303 | $ | 3,173,397 | ($ | 1,253,149 | ) | $ | 9,664,551 | |||||||
| 2020 | $ | 3,908,297 | ($ | 1,061,793 | ) | ($ | 1,556,482 | ) | $ | 1,290,022 | ||||||
| (4) | Each of the three fiscal years presented include the average SCT totals of the Non-PEO Named Executive Officers (NEOs) as applicable in each reporting year. Fiscal year 2022 includes: Mr. Maue, Mr. D’Iorio, Mr. Gallo, and Mr. Saak. Fiscal years 2020 and 2021 include: Mr. Maue, Mr. D’Iorio, Mr. Gallo, and Mr. Alejandro Alcala. |
| (5) | Average CAP is calculated by averaging the following (each year) for the non-PEO NEOs; SCT total, less the amounts reported in the SCT equity awards (i.e., RSUs, PRSUs, and stock options); adding the fair value as of the end of the covered fiscal year of all awards granted during the fiscal year that are outstanding and unvested as of the fiscalyear-end; adding the amount equal to the change in fair value as of the end of the covered fiscal year, whether positive or negative, of any awards granted in the prior fiscal year that are outstanding and unvested as of the end of the covered fiscal year; adding the amount equal to the change in fair value as of the vesting date, whether positive or negative, of any award granted in any prior fiscal year for which all applicable vesting conditions were satisfied at the end of or during the covered fiscal year. The following table shows the relationship between SCT compensation and CAP: |
Year | Salary | Bonus and Non-Equity Incentive Compensation | Other Compensation (i) | Stock Awards | Options Awards | Change in Pension Value and Nonqualified Deferred Compensation Earnings | SCT Total | Deductions from SCT Total (ii) | Additions to SCT Total (iii) | CAP | ||||||||||||||||||||||||||||||
| 2022 | $ | 452,766 | $ | 549,578 | $ | 64,386 | $ | 1,129,697 | $ | 171,872 | $ | 0 | $ | 2,368,300 | ($ | 1,301,570 | ) | $ | 1,453,550 | $ | 2,520,280 | |||||||||||||||||||
| 2021 | $ | 535,698 | $ | 773,177 | $ | 55,676 | $ | 618,725 | $ | 200,002 | $ | 0 | $ | 2,183,277 | ($ | 818,727 | ) | $ | 1,630,855 | $ | 2,995,405 | |||||||||||||||||||
| 2020 | $ | 473,430 | $ | 238,771 | $ | 51,190 | $ | 547,660 | $ | 271,252 | $ | 12,705 | $ | 1,595,008 | ($ | 831,617 | ) | $ | 280,715 | $ | 1,044,106 | |||||||||||||||||||
| i. | Reflects the average of all the NEOs’ All Other Compensation reported in the SCT for each year shown. |
| ii. | Represents the average of the NEOs’ grant date fair value of equity-based awards granted each year and average change in pension value. |
| iii. | Additions to the SCT Total reflect the value of equity calculated in accordance with the SEC methodology for determining CAP for each year shown. The equity awards were revalued using the Monte Carlo values for the PRSUs (which vest based on relative TSR) and the Black-Scholes values for the options. Because the Company includes the amount of cash dividends paid with respect to unvested TRSUs as compensation in the All Other Compensation column of the SCT, no adjustments were made for purposes of calculating CAP. Dividends or dividend equivalents do not accrue on stock options of PRSUs. There were no service cost additions to be made with respect to pension values because the Company’s pension plan was previously frozen. |
Year | Year End Fair Value of Equity Awards Granted in the Year | Year over Year Change in Fair Value of Outstanding Unvested Equity Awards Granted in Prior Years | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | Total Equity Value Included in CAP | ||||||||||||
| 2022 | $ | 1,300,604 | $ | 216,426 | ($ | 63,480 | ) | $ | 1,453,550 | |||||||
| 2021 | $ | 1,206,172 | $ | 498,361 | ($ | 73,678 | ) | $ | 1,630,855 | |||||||
| 2020 | $ | 655,526 | ($ | 151,542 | ) | ($ | 223,269 | ) | $ | 280,715 | ||||||
| (6) | The amount represents the value of an initial fixed $100 investment in Company stock on December 31, 2019, assuming reinvestment of all dividends. |
| (7) | Peer group companies include those comprising the S&P 400 MidCap Capital Goods Index, which Crane also uses in its stock performance graph disclosure in the Form 10-K. The amount represents the value of an initial fixed $100 investment in the index on December 31, 2019, assuming reinvestment of all dividends. |
| (8) | Represents the Company’s Net Earnings (Loss) Attributable to Crane (in millions) for each applicable fiscal year-end. |
| (9) | Adjusted EPS is calculated as Earnings from continuing operations per diluted share excluding special items, as used for determining annual incentive compensation awards. |
The Board of Directors believes that grants of equity-based compensation to key executives are a vital factor in attracting and retaining effective and capable personnel who contributestrongly correlated to the growthCompany’s absolute and successrelative stock price performance, which meaningfully impacts CAP. We consider Adjusted EPS to be among the most important financial measures used to link pay with performance in 2022 because it determines a significant portion of Crane Co.NEOs’ variable, and in establishing a direct link between the financial interests of such individuals and of our stockholders.
The Board of Directors believes that Crane Co.’s equity program for its key employees and non-employee directors should be reviewed periodically to determine whether it remains a viable source of incentivethus total, compensation both in terms of the number of shares of stock available for awards and, in general, in terms of its design. The Compensation Committee, with the assistance of FW Cook, has recommended to the Board the adoption of the 2018 Stock Incentive Plan, a copy of which appears as Appendix A to this Proxy Statement (the "2018 Plan"). Stockholder approval of the 2018 Plan is required in order to meet the listing requirements of the New York Stock Exchange.
The current 2013 Stock Incentive Plan (the "2013 Plan") was approved by the Board of Directors and stockholders at the annual meeting in 2013. The 2013 Plan originally authorized the issuance of up to 9,500,000 shares of stock pursuant to awards under the plan. As of February 28, 2018, the record date for the 2018 Annual Meeting, there were 3,143,702 shares available for future grants under the 2013 Plan.
In view of the limited number of shares remaining available under the 2013 Plan, the Board of Directors approved and believes that it is desirable that the stockholders approve the 2018 Plan, which authorizes the issuance of up to 6,500,000 shares of Crane Co. stock, plus shares added to the reserve in connection with the expiration, forfeiture or termination of outstanding awards under predecessor plans, reduced for grants of equity-based compensation as described below, with special rules regarding how “full value awards” are counted for this purpose (see below). If the 2018 Plan is approved, no further awards will be made under the 2013 Plan.
On January 29, 2018, the Board approved the 2018 Plan, subject to stockholder approval.
2018 Proxy Statement 65
Item 4: Proposal to Approve 2018 Stock Incentive Plan
Principal Provisions of Crane Co. 2018 Stock Incentive Plan
This summary of the terms of the 2018 Plan is qualified in its entirety by reference to the text of the plan, a copy of which appears as Appendix A to this Proxy Statement.
Key Features of the 2018 Plan
The following features of the 2018 Plan will protect the interests of our stockholders:
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Administration
The 2018 Plan, like the 2013 Plan, is administered by the Compensation Committee, or such other committee composed of at least three members of the Board as may be designated by the Board from time to time. Awards available for granting under the 2018 Plan are as described in the section below titled “Types of Awards.” Participants in the 2018 Plan are non-employee directors of the Company, and such key employees of Crane Co. and its subsidiaries as the Compensation Committee may designate. As of February 28, 2018, approximately 415 individuals were eligible to receive awards under the 2018 Plan, including 11 executive officers and 11 non-employee directors. All awards granted under the 2018 Plan will be evidenced by agreements in a form designated by the Compensation Committee, and subject to the terms and conditions of the 2018 Plan.
Shares Available
As described in the Introduction, the sum of 6,500,000 shares is reserved for issuance and available for awards under the 2018 Plan. This number is reduced for any awards granted under the 2013 Plan on or after February 1, 2018 and before the 2018 Annual Meeting (with options reducing the share pool on a one-to-one basis, and full value awards reducing the share pool on a 3.85-to-1 basis for this purpose). The following share counting rules apply under the 2018 Plan:
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66 Crane Co.
Item 4: Proposal to Approve 2018 Stock Incentive Plan
| PROPOSAL 4 The Board recommends a vote of | |
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Shares to be issued or purchased under the 2018 Stock Incentive Plan will be authorized but unissued shares of Crane Co. common stock or shares of common stock reacquired by Crane Co., including shares purchased in the open market. Shares of Common Stock purchased on the open market with stock option exercise proceeds are not added back to the shares available for grant under the 2018 Plan.Introduction
Similar to the 2013 Plan, no share-based awards may be granted under the 2018 Plan during any one calendar year to a non-employee director that exceed, together with any cash compensation received for such service, (i) $750,000 for a non-employee director not serving as the Chairman, and (ii) $1,000,000 for a non-employee director serving as the Chairman, in either case based on the grant date fair value for accounting purposes in the case of stock options or SARs and based on the fair market value of the common stock underlying the award on the grant date for other equity-based awards. The 2018 Plan permits disinterested members of the Board to make individual exceptions to this limit in extraordinary circumstances.
Types of Awards
The 2018 Plan provides for the grant of stock options, stock appreciation rights, restricted shares and restricted share units, deferred stock units, and other stock-based awards.
Stock Options
Employees receiving options (“optionees”) have the right to purchase a specified number of shares of stock at a specified exercise price, subject to the terms and conditions established by the Compensation Committee and specified in an agreement memorializing the grant. All options must be granted at an exercise price that is at least equal to 100% of the fair market value of Crane Co. common stock on the date of grant. Fair market value on a given day is defined as the closing market price on that day.
The Compensation Committee may grant to a participant who is an employee options that qualify as incentive stock options, non-qualified stock options or a combination of incentive and non-qualified stock options. No more than an aggregate of 6,500,000 incentive stock options may be granted under the 2018 Plan. No participant may be granted incentive stock options that would result in shares with an aggregate value (measured on the date of grant) of more than $100,000 first becoming exercisable in any one calendar year.
Stock options must be exercised within a period fixed by the Compensation Committee that may not exceed ten years from the date of grant. The optionee must pay the exercise price for shares to be purchased in full at the time of exercise in cash or, in whole or in part, by tendering (either actually or by attestation) shares of Crane Co. common stock. Upon approval, options may be exercised in the form of a “cashless exercise” through a broker based on the broker’s agreement to deliver sufficient funds to pay the applicable exercise price and tax withholding, if any, or through such other means as the Compensation Committee may authorize.
Stock Appreciation Rights
An award of stock appreciation rights entitles the employee to receive, upon its exercise, a payment equal to (i) the excess of the fair market value of a share of common stock on the exercise date over the exercise price of the award, multiplied by (ii) the number of shares of common stock with respect to which the award is exercised. All stock appreciation rights must be granted at an exercise price that is at least equal to 100% of the fair market value of Crane Co. common stock on the date of grant. All of the other terms and conditions
2018 Proxy Statement 67
Item 4: Proposal to Approve 2018 Stock Incentive Plan
of the stock appreciation right are established by the Compensation Committee and specified in an agreement memorializing the grant.
Stock appreciation rights must be exercised within a period fixed by the Compensation Committee that may not exceed ten years from the date of grant. Upon exercise of a stock appreciation right, payment may be made in cash, shares of Crane Co. common stock or a combination of cash and common stock.
Restricted Shares and Restricted Share Units
Restricted share awards entitle recipients to acquire shares of Crane Co. common stock, and restricted share unit awards entitle recipients to receive a notional account settled as described below, subject to forfeiture (and, in the case of performance awards, to increase or decrease) in the event that the conditions specified in the applicable award agreement are not satisfied prior to the end of the applicable restriction period established for the award.
Each restricted share or restricted share unit award will be granted pursuant to an agreement that will specify the terms pursuant to which Crane Co.’s right of forfeiture will lapse and such other provisions as the Compensation Committee may establish not inconsistent with the 2018 Plan. These terms may be based on performance standards, periods of service, the recipient’s retention of ownership of specified shares of Crane Co. common stock, or other criteria, as the Compensation Committee may establish. Restricted share units will, in general, be settled either in the form of a cash payment or in shares of Crane Co. common stock.
As under the 2013 Plan, awards of restricted shares or restricted share units under the 2018 Plan may be granted, vested or otherwise conditioned on one or more performance conditions. The Compensation Committee may use such business criteria and other measures of performance as it may deem appropriate, which may include specified levels of one or more of the following (in absolute terms or relative to one or more other companies or indices): (i) net sales; sales of a particular product or line of products; (ii) gross profit; ratio of gross profit to sales; (iii) operating profit; ratio of operating profit to sales (in each case before or after taxes and before or after allocation of corporate overhead and bonuses); (iv) net income; earnings per share; (v) adjusted earnings (including earnings before taxes, earnings before interest and taxes, or earnings before interest, taxes, depreciation and amortization); (vi) cash flow from operations; free cash flow; (vii) return on equity, assets, net assets, total capital, or total invested capital; economic value added models or equivalent metrics; (viii) share price; total shareholder return (in each case either absolutely or as compared with a peer group or stock market index); (ix) financial statement items such as cash, total debt, shareholders’ equity, working capital, material costs and engineering, selling and administrative expenses (in each case either absolutely or in proportion to another financial statement item such as assets or sales); or (x) implementation, completion or attainment of measurable objectives with respect to specific operational goals and targets, such as: (A) environmental, health and/or safety goals (including lost workday rates); (B) customer satisfaction; (C) inventory turns; (D) lead time; (E) on-time delivery; (F) purchase price index; (G) days sales outstanding; (H) quality; (I) research and development, (J) specific products/projects (including new product introductions); and (K) recruitment or retention of personnel. The Compensation Committee can specify the extent to which the performance condition will be calculated by excluding certain events, such as accounting changes, acquisitions/divestitures, settlements and other special items, all as specified in the 2018 Plan.
Deferred Stock Units (DSUs)
As described under “Compensation of Directors” at page 26 above, our non-employee directors receive annual grants of DSUs as a key element of their compensation for service on the Board. DSUs are a type of restricted share unit award under the 2018 Plan. Under the current design of our non-employee director compensation program, DSUs are awarded each year as of the date of the Annual Meeting, are forfeitable if the director ceases to remain a director until Crane Co.’s next Annual Meeting (with certain exceptions such as for death or disability), accrue dividend equivalents at the same rate as Crane Co. shares, and entitle the director to receive an equivalent number of shares of Crane Co. stock upon the director’s ceasing to be a member of the Board.
68 Crane Co.
Item 4: Proposal to Approve 2018 Stock Incentive Plan
Other Stock-Based Awards
The Compensation Committee may grant equity-based or equity-related awards, referred to as “other stock-based awards,” other than options, stock appreciation rights, restricted shares, restricted share units or deferred stock units. The terms and conditions of each other stock-based award granted under the 2018 Plan are to be set forth in an agreement which will contain provisions as determined by the Compensation Committee that are not inconsistent with the 2018 Plan. Payment under any other stock-based awards will be made in common stock or cash, as determined by the Compensation Committee.
Transferability of Awards
The 2018 Plan generally prohibits the transfer of awards other than in connection with the participant’s death, although the plan does permit the transfer of options without consideration during the participant’s life to certain immediate family members (or related estate planning entities) to the extent permitted by the Compensation Committee.
Dividend Equivalents
The Compensation Committee may provide for the payment of dividends or dividend equivalents with respect to any shares of common stock subject to an award of restricted shares, restricted share units or other stock-based award under the 2018 Plan, under such terms and conditions as the Compensation Committee may establish inIn accordance with the 2018 Plan. No dividendsDodd-Frank Act and the related SEC rules, the Board is asking stockholders to express their opinion as to how frequently the advisory vote on compensation should be solicited: every year, every second year, or dividend equivalents are permitted for awardsevery third year. An annual vote is consistent with the approach preferred by stockholders in 2017, which the Board believes has served the Company well during the past six years. The Board believes that an annual advisory vote on executive compensation, providing the Board with timely information on stockholders’ views of stock options or stock appreciation rights.
As ofCrane NXT’s compensation practices each year, is the record datebest approach for the Annual Meeting, approximately 415 individuals were eligible to receive awards under the 2018 Plan, including Crane Co.’s 11 non-employee directors and 11 executive officers. The granting of awards under the 2018 Plan is discretionary. As such,Company. Accordingly, the Board cannot now determinerecommends that stockholders vote in favor of holding the number, value or type of awards to be granted in the future for any individual or group of individuals. As of the Record Date, the closing price per share of Crane Co. stock was $92.31.
Term; Amendments; Restrictions
The 2018 Plan was approved by the Board of Directorsadvisory vote on January 29, 2018, and will become effective if it is approvedcompensation annually. Unless otherwise directed by the stockholders, atproxies that are properly executed and returned will be voted for annual advisory votes on compensation.
Vote Required: The alternative which receives the 2018 Annual Meeting. The 2018 Planlargest number of votes, even if not a majority, will remain in effect until terminated bybe considered the preference of the Company’s stockholders. In accordance with the Dodd-Frank Act and the related SEC rules, the resolution is non-binding and advisory; however, the Board will give due consideration to the opinion of Directors, provided that no awards may be granted under the 2018 Plan after the date that is ten years from the date of such approval. The Board may amend, rescind or terminate the 2018 Plan at any time in its discretion, provided that:Company’s stockholders as expressed by their votes.
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2018 Proxy Statement 69
Item 4: Proposal to Approve 2018 Stock Incentive Plan
No Repricing
The 2018 Plan specifically prohibits the repricing of stock options or stock appreciation rights without stockholder approval. For this purpose, a “repricing” means any of the following (or any other action that has the same effect as any of the following):
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Such cancellation and exchange would be considered a “repricing” regardless of whether it is treated as a “repricing” under generally accepted accounting principles and regardless of whether it is voluntary on the part of the participant.
Withholding for Payment of Taxes
The 2018 Plan provides for the withholding and payment by a participant of any payroll or withholding taxes required by applicable law. The 2018 Plan, like the 2013 Plan, permits a participant to satisfy this requirement, with the approval of the Compensation Committee and subject to the terms of the plan, by having Crane Co. withhold from the participant a number of shares of Crane Co. common stock otherwise issuable under the award having a fair market value equal to the amount of applicable payroll and withholding taxes.
Changes in Capitalization and Similar Changes
In the event of any corporate event or transaction such as a merger, consolidation, reorganization, recapitalization, separation, partial or complete liquidation, stock dividend, stock split, reverse stock split, split up, spin-off, or other distribution of stock or property of Crane Co., a combination or exchange of Crane Co. common stock, dividend in kind, or other like change in capital structure or the number of outstanding shares of Crane Co. common stock, distribution (other than normal cash dividends) to stockholders of Crane Co., or any similar corporate event or transaction, the Compensation Committee, in order to prevent dilution or enlargement of participants’ rights under the 2018 Plan, will make equitable and appropriate adjustments and substitutions, as applicable, to the number and kind of shares subject to outstanding awards, the exercise price for such shares, the number and kind of shares available for future issuance under the 2018 Plan and the maximum number of shares in respect of which awards can be made to any participant in any calendar year, and other determinations applicable to outstanding awards. The Compensation Committee will have the power and sole discretion to determine the amount of the adjustment to be made in each case.
The 2018 Plan provides that the Committee may, in its sole discretion, provide for acceleration of time periods, or waiver of other conditions, relating to vesting, exercise, payment or distribution of an award in the event of constructive or actual termination of a participant’s employment as a result of a “change in control” of Crane Co. (as defined in the 2018 Plan).
Federal Income Tax Consequences
The federal income tax consequences of the issuance and exercise or settlement of awards under the 2018 Plan are as described below. The following information is only a summary of the tax consequences of the awards. This summary does not address all aspects of U.S. federal taxation that may be relevant to a particular participant in light of his or her personal circumstances. Participants should consult with their own tax advisors with respect to the tax consequences inherent in the ownership and exercise of the awards, and the ownership and disposition of any underlying securities.
70 Crane Co.
Item 4: Proposal to Approve 2018 Stock Incentive Plan
Nonqualified Stock Options. A participant who is granted a nonqualified stock option will not recognize any income for federal income tax purposes on the grant of the option. Generally, on the exercise of the option, the participant will recognize taxable ordinary income equal to the excess of the fair market value of the shares on the exercise date over the exercise price for the shares. Upon disposition of the shares purchased pursuant to the stock option, the participant will recognize long-term or short-term capital gain or loss, as the case may be, equal to the difference between the amount realized on such disposition and the basis for such shares, which basis equals the fair market value of the shares on the exercise date.
Incentive Stock Options. A participant who is granted an incentive stock option will not recognize any taxable income for federal income tax purposes on either the grant or exercise of the incentive stock option. If the participant disposes of the shares purchased pursuant to the incentive stock option more than two years after the date of grant and more than one year after the exercise of the option by the participant (the required statutory “holding period”), (a) the participant will recognize long-term capital gain or loss, as the case may be, equal to the difference between the selling price and the exercise price; and (b) Crane Co. will not be entitled to a deduction with respect to the shares of stock so issued. If the holding period requirements are not met, any gain realized upon disposition will be taxed as ordinary income to the extent of the lesser of (i) the excess of the fair market value of the shares at the time of exercise over the exercise price, and (ii) the gain on the sale. Also in that case, Crane Co. will be entitled to a deduction in the year of disposition in an amount equal to the ordinary income recognized by the participant. Any additional gain will be taxed as short-term or long-term capital gain depending upon the holding period for the stock. A sale for less than the exercise price results in a capital loss. The excess of the fair market value of the shares on the date of exercise over the exercise price is, however, includable in the participant’s income for alternative minimum tax purposes.
Stock Appreciation Rights. A participant who is granted stock appreciation rights will normally not recognize any taxable income on the receipt of the award. Upon the exercise of a stock appreciation right, the participant will recognize ordinary income equal to the amount received (the increase in the fair market value of one share of Crane Co. common stock from the date of grant of the award to the date of exercise).
Restricted Shares. A participant will not be taxed at the date of an award of restricted shares, but will be taxed at ordinary income rates on the fair market value of any restricted shares as of the date that the restrictions lapse, unless the participant, within 30 days after transfer of such restricted shares to the participant, elects under Section 83(b) of the Internal Revenue Code to include in income the fair market value of the restricted shares as of the date of such transfer. Any disposition of shares after restrictions lapse will be subject to the regular rules governing long-term and short-term capital gains and losses, with the basis for this purpose equal to the fair market value of the shares at the end of the restricted period (or on the date of the transfer of the restricted shares, if the employee makes an election under Section 83(b) to be taxed on the fair market value upon such transfer).
Restricted Share Units. A participant will normally not recognize taxable income upon an award of restricted share units, and Crane Co. will not be entitled to a deduction until the lapse of the applicable restrictions. Upon the lapse of the restrictions and the receipt of cash or the issuance of the underlying shares, the participant will recognize ordinary taxable income in an amount equal to the cash received or the fair market value of the common stock received. Any disposition of shares received after restrictions lapse will be subject to the regular rules governing long-term and short-term capital gains and losses, with the basis for this purpose equal to the fair market value of the shares at the end of the restricted period.
Deferred Stock Units. A director will normally not recognize taxable income upon an award of Deferred Stock Units, and the Company will not be entitled to a deduction until the lapse of the applicable restrictions and settlement of the Deferred Stock Units following the director’s termination of Board service. Upon the lapse of the restrictions and the issuance of the Deferred Stock Units in shares, the director will recognize ordinary taxable income in an amount equal to the fair market value of the common stock received. Any disposition of shares after restrictions lapse will be subject to the regular rules governing long-term and short-term capital gains and losses, with the basis for this purpose equal to the fair market value of the shares at the end of the restricted period.
2018 Proxy Statement 71
Item 4: Proposal to Approve 2018 Stock Incentive Plan
Dividends. To the extent dividends are payable during the restricted period under the applicable restricted share or restricted share unit award agreement, any such dividends will be taxable to the participant at ordinary income tax rates, unless the participant has elected to be taxed on the fair market value of the restricted shares upon transfer, in which case they will thereafter be taxable to the employee as dividends and will not be deductible by Crane Co.
Other Stock-Based Awards. A participant will normally not recognize taxable income upon the grant of other stock-based awards. Subsequently, when the conditions and requirements for the grants have been satisfied and the award is settled, any cash received and the fair market value of any common stock received will constitute ordinary income to the participant.
Tax Consequences to Crane Co. In the foregoing cases, we generally will be entitled to a deduction at the same time, and in the same amount, as a participant recognizes ordinary income, subject to certain limitations imposed under the Internal Revenue Code, including Section 162(m).
Information on Equity Compensation Plans as of January 31, 2018
The information included in this Proxy Statement and our Annual Report on Form 10-K for the fiscal year ending December 31, 2017 is updated by the following information regarding all existing equity compensation plans as of January 31, 2018:
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Vote Required
Approval of the 2018 Stock Incentive Plan requires the affirmative vote of a majority of the votes cast on this proposal at the meeting. See “Questions and Answers about These Proxy Materials and the Annual Meeting,” page 76.
72 Crane Co.
Beneficial Ownership of Common Stock by Directors and Management
Crane Co. believes that officers and other key employees, in order to focus their attention on growth in stockholder value, should have a significant equity stake in the Company. We therefore encourage our officers and key employees to increase their ownership of and to hold Crane Co.the Company’s stock through the Stock Incentive Plan and the Savings and Investment Plan, as discussed in the Compensation Discussion and Analysis atbeginning on page 47.40. Directors also receive a majority of their annual retainer, and may elect to receive the entire retainer, in the form of Deferred Stock UnitsDSUs issued under the Stock Incentive Plan. Beneficial ownership of stock by the non-executive directors, and nominees, the executive officers named in the 2022 Summary Compensation Table, all other executive officers as a group and all directors, nominees, and executive officers of Crane Co.the Company as a group as of JanuaryMarch 31, 20182023 is as follows:
Amount and Nature of Beneficial Ownership | |||||||||||||||
Title of Class | Name of | Shares | Stock Options, | Shares in | Total Shares | Percent | Share Units | ||||||||
| Common | |||||||||||||||
| Stock | M. R. Benante | — | 5,658 | — | 5,658 | * | — | ||||||||
| E. T. Bigelow | 27,160 | 23,431 | — | 50,591 | * | — | |||||||||
| D. G. Cook | 2,725 | 18,931 | — | 21,656 | * | — | |||||||||
| R. S. Evans | 448,984 | 20,915 | — | 469,899 | * | — | |||||||||
| R. C. Lindsay | — | 12,398 | — | 12,938 | * | — | |||||||||
| P. R. Lochner, Jr. | 350 | 23,378 | — | 23,728 | * | — | |||||||||
| E. McClain | — | 9,135 | — | 9,135 | * | — | |||||||||
| C. G. McClure, Jr. | — | 1,559 | — | 1,559 | * | — | |||||||||
| M. H. Mitchell | 128,053 | 232,375 | 2,628 | 363,056 | * | — | |||||||||
| J. M. Pollino | — | 9,135 | — | 9,135 | * | — | |||||||||
| P. O. Scannell | — | 7,364 | — | 7,364 | * | — | |||||||||
| J. L. L. Tullis | 610 | 27,431 | — | 28,041 | * | — | |||||||||
| R. A. Maue | 38,863 | 87,766 | 1,589 | 128,218 | * | 5,352 | |||||||||
| L. V. Pinkham | 27,945 | 34,442 | 451 | 62,838 | * | 6,376 | |||||||||
| B. L. Ellis | 154,280 | 54,272 | 7,076 | 215,628 | * | 3,199 | |||||||||
| A. I. duPont | 86,598 | 65,814 | 5,087 | 157,499 | * | 2,177 | |||||||||
| Other Executive | |||||||||||||||
| Officers (5 persons) | 87,261 | 163,953 | 2,897 | 254,111 | * | 11,658 | |||||||||
| Total—Directors, | |||||||||||||||
| Nominees and | |||||||||||||||
| Executive Officers | |||||||||||||||
| as a Group | |||||||||||||||
| (21 persons) | 1,002,829 | 797,958 | 19,728 | 1,820,514 | 3.0 | % | 28,762 | ||||||||
| Amount and Nature of Beneficial Ownership | ||||||||||||||||||||||||||
Title of Class | Name of Beneficial Owner | Shares Owned Directly or Beneficially(1) | Stock Options, DSUs, and RSUs that Have Vested or Will Vest Within 60 Days | Shares in Company Savings Plan (401(k)) | Total Shares Beneficially Owned(2) | Percent of Class | Share Units Under Incentive Stock Plans Vesting After 60 Days(3) | |||||||||||||||||||
Common Stock | M. Benante | 1,070 | 14,933 | 0 | 16,003 | * | 0 | |||||||||||||||||||
| M. Dinkins | 0 | 7,308 | 0 | 7,308 | * | 0 | |||||||||||||||||||
| W. Grogan(4) | 0 | 0 | 0 | 0 | * | 0 | |||||||||||||||||||
| C. Kogl(4) | 0 | 0 | 0 | 0 | * | 0 | |||||||||||||||||||
| R. C. Lindsay | 591 | 23,351 | 0 | 23,942 | * | 0 | |||||||||||||||||||
| E. McClain | 0 | 19,152 | 0 | 19,152 | * | 0 | |||||||||||||||||||
| C. G. McClure, Jr. | 295 | 12,712 | 0 | 13,007 | * | 0 | |||||||||||||||||||
| M. H. Mitchell | 360,123 | 329,113 | 2,939 | 692,175 | 1.22 | % | 23,350 | ||||||||||||||||||
| J. M. Pollino | 0 | 18,765 | 0 | 18,765 | * | 0 | |||||||||||||||||||
| J. S. Stroup | 0 | 3,799 | 0 | 3,799 | * | 0 | |||||||||||||||||||
| J. L. L. Tullis | 6,241 | 27,969 | 0 | 34,210 | * | 0 | |||||||||||||||||||
| A. W. Saak | 0 | 0 | 0 | 0 | * | 29,247 | |||||||||||||||||||
| R. A. Maue | 86,935 | 10,300 | 1,762 | 98,997 | * | 7,639 | |||||||||||||||||||
| A. M. D’Iorio | 21,508 | 26,254 | 1,225 | 48,987 | * | 4,761 | |||||||||||||||||||
| K. F. Gallo | 28,298 | 45,174 | 1,439 | 74,911 | * | 3,882 | |||||||||||||||||||
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| Other Executive Officers (3 persons) | 26,370 | 55,961 | 286 | 82,617 | * | 10,818 | |||||||||||||||||||
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| Total—Directors and Executive Officers as a Group (18 persons) | 531,431 | 594,790 | 7,652 | 1,133,873 | 2.00 | % | 79,697 | ||||||||||||||||||
| * | Less than one percent. |
| (1) | Includes |
| (2) | Does not include 7,778,416 shares of Common Stock owned by The Crane Fund (see |
2018 Proxy Statement 73
Beneficial Ownership of Common Stock by Directors and Management
subsidiaries, which shares may be voted and disposed of in the discretion of the trustees unless the sponsor of a particular plan directs otherwise. |
| (3) | Includes time-based RSUs vesting more than 60 days after the Record Date, which are subject to vesting as shown in footnote 2 to the |
74 Crane Co.
| (4) | Appointed to the Board effective April 3, 2023. |
84
Principal Stockholders of Crane Co.
| PRINCIPAL STOCKHOLDERS OF CRANE CO. | ||||||||
The following table sets forth the ownership by each person who owned of record or was known by Crane Holdings, Co. to own beneficially more than 5% of our common stock on Januaryas of March 31, 2018.2022.
| Title of Class | Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class | |
| Common Stock | The Crane Fund(1) | |||
| 100 First Stamford Place | ||||
| Stamford, CT 06902 | 7,778,416 | 13.0% | ||
| Common Stock | UBS Group | |||
| AG Bahnhofstrasse 45 | ||||
| PO Box CH-8021 Zurich, Switzerland | 4,885,264 | (2) | 8.2% | |
| Common Stock | BlackRock, Inc. | |||
| 40 East 52nd Street New York, NY 10022 | 4,209,820 | (3) | 7.1% | |
| Common Stock | The Vanguard Group | |||
| 100 Vanguard Blvd. Malvern, PA 19355 | 4,166,790 | (4) | 7.0% | |
| Common Stock | GAMCO Investors, Inc. | |||
| One Corporate Center Rye, NY 10580-1435 | 3,659,848 | (5) | 6.1% | |
Title of Class | Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class | |||||||
Common Stock | The Crane Fund(1) 140 Sylvan Ave, #5 Englewood Cliffs, NJ 07632 | 7,778,416 | 13.7 | % | ||||||
Common Stock | FMR, LLC(2) 245 Summer Street Boston, MA 02210 | 6,303,535 | 11.1 | % | ||||||
Common Stock | The Vanguard Group(3) 100 Vanguard Blvd. Malvern, PA 19355 | 4,728,523 | 8.3 | % | ||||||
Common Stock | BlackRock, Inc.(4) 55 East 52nd Street New York, NY 10022 | 4,024,721 | 7.1 | % | ||||||
| (1) | The Crane Fund, a trust established for the benefit of former employees in need (the “Crane Fund”), is managed by trustees appointed by the Board of |
| (2) | As reported in a Schedule 13G filed on February |
| (3) | As reported in a Schedule 13G filed on February 9, 2023, by The Vanguard Group, directly and on behalf of certain subsidiaries, giving information on shareholdings as of December 31, 2022. According to the Schedule 13G, The Vanguard Group, an investment adviser, has shared voting power over 16,641 shares, sole dispositive power over 4,669,753 shares, and shared dispositive power over 58,770 shares of Crane Holdings, Co. stock. |
| (4) | As reported in a Schedule 13G filed on January |
85
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| NON-GAAP RECONCILIATION | ||||||||
The Company reports its financial results in accordance with U.S. generally accepted accounting principles (“GAAP”). However, certain non-GAAP measures have been provided in this Proxy Statement/Prospectus to facilitate comparison with the prior year.
The Company believes that non-GAAP financial measures which exclude certain items present additional useful comparisons between current results and results in prior operating periods, providing investors with a supplemental view of the underlying trends of the business. The Company also uses these non-GAAP financial measures in making financial, operating, planning and compensation decisions and in evaluating the Company’s performance.
A description of each of the non-GAAP financial measures used by the Company is as follows:
“Net Sales before Special Items (Adjusted)” adds back to Net Sales deferred revenue related to performance obligations which were assumed by Crane as part of its acquisition of Cummins-Allison on December 31, 2019. In accordance with ASC 805, Business Combinations, the Company remeasured this liability based on the cost to fulfill the obligations plus a normal profit margin. The valuation of deferred revenue was based on the timeline over which the deferred revenue acquired was anticipated to be earned, or one year. We believe that using this non-GAAP financial measure provided an important perspective of the historical baseline revenue of the recently acquired business, and such baseline was useful to investors in their forecasting of future revenue.
“Adjusted Operating Profit” and “Adjusted Operating Margin” add back to Operating Profit items which are outside of our core performance, some of which may or may not be non-recurring, and which we believe may complicate the interpretation of the Company’s underlying earnings and operational performance. These items include income and expense such as: the loss on divestiture of asbestos-related assets and liabilities, transaction related expenses, and repositioning related (gains) charges. These items are not incurred in all periods, the size of these items is difficult to predict, and none of these items are indicative of the operations of the underlying businesses. We believe that non-GAAP financial measures that exclude these items provide investors with an alternative metric that can assist in predicting future earnings and profitability that are complementary to GAAP metrics.
“Adjusted Net Income” and “Adjusted EPS” exclude items which are outside of our core performance, some of which may or may not be non-recurring, and which we believe may complicate the presentation of the Company’s underlying earnings and operational performance. These measures include income and expense items that impacted Operating Profit such as: the loss on divestiture of asbestos-related assets and liabilities, transaction related expenses, and repositioning related (gains) charges. Additionally, these non-GAAP financial measures exclude income and expense items that impacted Net Income and Earnings per Diluted Share such as: interest expense on the 364 Day Credit Agreement related to the asbestos transaction, tax benefit related to the divestiture of asbestos-related assets and liabilities, the impact of pension curtailments and settlements, gain on the sale of business, deferred tax adjustment related to sale of business, discrete tax reserve adjustment and gain on the sale of property. These items are not incurred in all periods, the size of these items is difficult to predict, and none of these items are indicative of the operations of the underlying businesses. We believe that non-GAAP financial measures that exclude these items provide investors with an alternative metric that can assist in predicting future earnings and profitability that are complementary to GAAP metrics.
“Free Cash Flow” and “Adjusted Free Cash Flow” provide supplemental information to assist management and investors in analyzing the Company’s ability to generate liquidity from its operating activities. The measure of free cash flow does not take into consideration certain other non-discretionary cash requirements such as, for example, mandatory principal payments on the Company’s long-term debt. Free Cash Flow is calculated as cash provided by or used for operating activities less capital spending. Adjusted Free Cash Flow is calculated as Free Cash Flow adjusted for certain cash items which we believe may complicate the interpretation of the Company’s underlying free cash flow performance such as certain transaction related cash flow items related to 2022 portfolio actions and the divestiture of asbestos-related assets and liabilities. These items are not incurred in all periods, the size of these items is difficult to predict, and none of these items are indicative of the operations of the underlying businesses. We believe that non-GAAP financial measures that exclude these items provide investors with an alternative metric that can assist in predicting future cash flows that are complementary to GAAP metrics.
86
Non-GAAP Reconciliation
Non-GAAP financial measures, which may be inconsistent with similarly captioned measures presented by other companies, should be viewed in addition to, and not as a substitute for, the Company’s reported results prepared in accordance with GAAP.
Non-GAAP Financial Measures (in millions, except per share data)
| Twelve Months Ended December 31, | Percent Change December 31, 2022 | Percent Change December 31, 2021 | ||||||||||||||||||||||||||
Income Items | 2022 | 2021 | 2020 |
| Twelve Months |
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Net sales – GAAP | $ | 3,374.9 | $ | 3,408.0 | $ | 2,936.9 |
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Acquisition-related deferred revenue | — | — | 10.2 |
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Net sales before special items (adjusted) | $ | 3,374.9 | $ | 3,408.0 | $ | 2,947.1 |
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Operating profit – GAAP | $ | 369.5 | $ | 529.2 | $ | 262.9 |
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Operating profit margin (GAAP) | 10.9 | % | 15.5 | % | 9.0 | % |
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Special items impacting operating profit: |
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Acquisition-related deferred revenue | $ | — | $ | — | $ | 10.2 |
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Acquisition-related and integration charges | — | — | 12.9 |
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Loss on divestiture of asbestos-related assets and liabilities | 162.4 | — | — |
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Transaction related expenses | 49.8 | 8.2 | — |
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Repositioning related (gains) charges, net | 14.9 | (9.6 | ) | 37.4 |
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Operating profit before special items (adjusted) | $ | 596.6 | $ | 527.8 | $ | 323.4 |
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Operating profit margin before special items (adjusted) | 17.7 | % | 15.5 | % | 11.0 | % |
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Net income attributable to common shareholders (GAAP) | $ | 401.1 | $ | 435.4 | $ | 181.0 |
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Per Share | $ | 7.01 | $ | 7.36 | $ | 3.08 |
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Totals may not sum due to rounding.
87
Non-GAAP Reconciliation
Special Items, Net of Tax, Impacting Net Income Attributable To Common Stockholders: | Twelve Months Ended December 31, | Percent Change December 31, | Percent Change December 31, 2021 | |||||||||||||||||||||||||
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Acquisition-related deferred revenue | — | — | 7.5 |
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Acquisition-related and integration charges | — | — | 9.9 |
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Loss on divestiture of asbestos-related assets and liabilities | 162.4 | — | — |
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Interest expense on 364-Day Credit Agreement related to asbestos transaction | $ | 5.3 | — | — |
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Impact of pension curtailments and settlements | 8.5 | (0.1 | ) | (0.7 | ) |
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Per share | $ | 0.15 | $ | (0.00 | ) | $ | (0.01 | ) |
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Gain on sale of business | (184.5 | ) | — | — |
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Per share | $ | (3.22 | ) |
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Deferred tax adjustment related to sale of business | 20.7 | (21.5 | ) | — |
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Per share | $ | 0.36 | $ | (0.37 | ) |
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Discrete tax reserve adjustment | (10.3 | ) | — | — |
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Per share | $ | (0.18 | ) |
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Gain on sale of property | — | (4.5 | ) | — |
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Per share |
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| $ | (0.08 | ) |
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Net income from continuing operations, net of tax, attributable to common shareholders before special items (adjusted) | $ | 450.8 | $ | 407.2 | $ | 225.9 |
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| 10.7 | % |
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| 80.3 | % | ||||||||||||
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Per diluted share | $ | 7.88 | $ | 6.88 | $ | 3.84 |
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| 15.0 | % |
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| 79.2 | % | ||||||||||||
Per basic share | $ | 7.99 | $ | 6.97 | $ | 3.87 |
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| 14.6 | % |
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| 80.1 | % | ||||||||||||
Totals may not sum due to rounding.
88
Non-GAAP Reconciliation
| Twelve Months Ended December 31, | ||||||||||||
Special Items Impacting Provision for Income Taxes | 2022 | 2021 | 2020 | |||||||||
Provision for income taxes (GAAP) | $ | 161.9 | $ | 67.4 | $ | 43.4 | ||||||
Tax effect of acquisition-related deferred revenue | — | — | 2.7 | |||||||||
Tax effect of acquisition-related and integration charges | — | — | 3.0 | |||||||||
Tax effect of transaction related expenses, net | (0.9 | ) | 1.2 | — | ||||||||
Tax effect of repositioning related (gains) charges, net | 4.2 | (0.5 | ) | 9.2 | ||||||||
Tax effect of interest expense on 364-Day Credit Agreement related to asbestos transaction | 1.9 | — | — | |||||||||
Tax effect of benefit related to divestiture of asbestos-related assets and liabilities | 6.5 | — | — | |||||||||
Tax effect of pension curtailments and settlements | 2.2 | (0.1 | ) | (0.2 | ) | |||||||
Tax effect of gain on sale of business | (48.0 | ) | — | — | ||||||||
Tax effect of deferred tax adjustment related to sale of business | (20.7 | ) | 21.5 | — | ||||||||
Tax effect of discrete tax reserve adjustment | 10.3 | — | — | |||||||||
Tax effect of gain on sale of property | — | (1.2 | ) | — | ||||||||
Provision for income taxes before special items (adjusted) | $ | 117.4 | $ | 88.3 | $ | 58.1 | ||||||
Totals may not sum due to rounding.
Free Cash Flow (in millions)
| Twelve Months Ended December 31, | ||||||||||||
Cash Flow Items: | 2022 | 2021 | 2020 | |||||||||
Cash provided by (used for) operating activities | $ | (151.6 | ) | $ | 498.5 | $ | 309.5 | |||||
Less: Capital expenditures | (58.4 | ) | (53.9 | ) | (34.1 | ) | ||||||
Free cash flow | $ | (210.0 | ) | $ | 444.6 | $ | 275.4 | |||||
Cash flow items related to 2022 portfolio actions and asbestos entity sale transaction | 604.6 | — | — | |||||||||
Adjusted free cash flow1 | $ | 394.6 | $ | 444.6 | $ | 275.4 | ||||||
Totals may not sum due to rounding.
|
2018 Proxy Statement 75
89
| QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND THE ANNUAL MEETING | ||||||||
Section 16(a) Beneficial Ownership Reporting Compliance
For the year ended December 31, 2017, based solely upon our review of the reports filed by our directors and executive officers under Section 16(a) and representations provided to us by our directors and executive officers, we believe that each director and executive officer filed all required reports under Section 16(a) of the Securities Exchange Act of 1934 on time.
Questions and Answers about These Proxy Materials and the Annual Meeting
Why did I receive these materials?
Crane Co.NXT is sending this Proxy Statement and form of proxy card, together with its Annual Report, to you and all of our stockholders, to ask you to appoint proxies to represent you at the Annual Meeting of Stockholders on April 23, 2018.June 5, 2023.
If a quorum does not attend the meeting virtually or is not represented by proxy, the meeting will have to be adjourned and rescheduled. In order to avoid unnecessary expense, the Board of Directors of the Company is asking you to submit a proxy for your shares so that even if you do not attend the meeting virtually, your shares will be counted as present at the meeting, and voted according to your instructions.
Unless you expect to attend the meeting virtually, please submit a proxy for your shares in person, pleaseany of the following manners: sign, date, and return the enclosed proxy in the envelope provided,provided; vote your shares online by scanning the QR code on your proxy card; or use the internet address or the toll-free telephone number on the proxy card.listed in this Proxy Statement/Prospectus. Please return your proxy in any manner described in this paragraph promptly to ensure that your shares are voted at the meeting, no matter how large or how small your holdings may be.
What is the agenda for the Annual Meeting?
At the Annual Meeting, stockholders will vote on four matters:
| (1) | the election of each of |
| (2) | a proposal to ratify the selection of Deloitte & Touche LLP as our independent auditors for |
| (3) | a proposal to approve, by a non-binding advisory vote, the compensation paid by the Company to certain executive |
| (4) | a proposal to approve, by a non-binding advisory vote, the |
Our management will also make a brief presentation about the business of Crane Co.,NXT, and representatives of Deloitte & Touche LLP will make themselves available to respond to any appropriate questions fromat the floor.Annual Meeting.
The Board does not know of any other business that will be presented at the Annual Meeting. The form of proxy gives the proxies discretionary authority with respect to any other matters that come before the Annual Meeting, which means that if any such matter arises, the individuals named in the proxy will vote according to their best judgment.
76 Crane Co.
Questions and Answers About These Proxy Materials and the Annual Meeting
How does the Board of Directors recommend that I vote?
The Board unanimously recommends that you vote for each of the nominees for director; for ratification of the selection of Deloitte & Touche LLP to continue as our independent auditors; and for the non-binding advisory votevotes regarding executive compensation;compensation and the frequency with which we will ask stockholders to approve the compensation paid by the Company to certain executive officers.
When and where is the Annual Meeting?
The Annual Meeting will be held virtually and is scheduled to be held online via live webcast at 10:00 a.m. Eastern Daylight Time, on Monday, June 5, 2023.
To access the Annual Meeting, please visit www.meetnow.global/MDWD6FQ. To login to the Annual Meeting as a Registered Holder (as defined below), you have two options: Join as a “Guest” or Join as a “Shareholder”. If you join as a “Shareholder” you will be required to enter the control number on your proxy card.
You can view the Annual Meeting agenda, rules of conduct and procedures, and proxy materials for approvalthe Annual Meeting on the virtual meeting platform.
90
Questions and Answers About these Proxy Materials and the Annual Meeting
Will there be technical support for the Annual Meeting?
The virtual meeting platform is fully supported across browsers (MS Edge, Firefox, Chrome and Safari) and devices (desktops, laptops, tablets and cell phones) running the most up-to-date version of applicable software and plugins. Please note that Internet Explorer is not a supported browser. Participants should ensure that they have a strong Wi-Fi connection wherever they intend to participate in the 2018 Stock Incentive Plan.Annual Meeting. We encourage you to access the Annual Meeting prior to the start time. For further assistance should you need it, you may call (888) 724-2416.
Who can attend the Annual Meeting?
Any stockholder of Crane Co.,NXT, any past or present employee, and other invitees may attend the Annual Meeting. If you are a stockholder of Crane NXT as of the close of business on the Record Date, you or your proxy holder may participate, vote and submit questions, as further described below. No physical meeting will be held. We recommend that you carefully review the procedures needed to gain admission in advance. If you do not comply with the procedures described for attending the Annual Meeting via the virtual meeting platform, you will not be able to participate online.
If your shares are registered directly in your name with Crane NXT’s transfer agent, Computershare, you are considered the stockholder of record, or registered holder (a “Registered Holder”), with respect to those shares. For Registered Holders to attend the Annual Meeting, vote their shares during the Annual Meeting or submit questions, the control number appearing on the proxy card mailed to you should be used to access the virtual meeting platform at www.meetnow.global/MDWD6FQ. If you are a Registered Holder and do not have your control number, you may contact Computershare at (877) 373-6374 to obtain it. Without a control number, you may attend the Annual Meeting as a guest (non-stockholder), but you will not have the option to vote your shares or ask questions during the Annual Meeting.
If you hold a valid legal proxy for the Annual Meeting because you are a beneficial holder and hold your shares through an intermediary, such as a brokerage firm, bank, or other custodian (a “Beneficial Holder”), and want to attend the Annual Meeting online by webcast (with the ability to ask a question and/or vote, if you choose to do so), you have two options:
| 1) | Registration in Advance of the Annual Meeting |
Submit proof of your proxy power (“Legal Proxy”) from your broker or bank reflecting your Crane NXT common stock holdings along with your name and email address to Computershare.
Requests for registration as set forth in (1) above must be labeled as “Legal Proxy” and be received no later than 5:00 p.m., Eastern Daylight Time, on Wednesday, May 11, 2022. You will receive a confirmation of your registration by email after Computershare receives your registration materials.
Requests for registration should be directed to Computershare at the following:
By email: Forward the email from your broker granting you a Legal Proxy, or attach an image of your Legal Proxy, to legalproxy@computershare.com.
By mail:
Computershare
Crane NXT Legal Proxy
P.O. Box 43001
Providence, RI 02940-3001
| 2) | Register at the Annual Meeting |
Beneficial Holder Access to Virtual Meetings 2023 Proxy Season
For the 2023 proxy season, an industry solution has been agreed upon to allow Beneficial Holders to register online at the Annual Meeting to attend, ask questions, and vote. We expect that the vast majority of Beneficial Holders will be able to fully participate using the control number received with their voting instruction form. Please note, however, that this option is intended to be provided as a convenience to Beneficial Holders only, and there is no guarantee this option will be available for every type of Beneficial Holder voting control number. The inability to provide this option to any or all Beneficial Holders shall in no way impact the validity of the Annual Meeting. Beneficial Holders may choose the Register in Advance of the Annual Meeting option above, if they prefer to use the traditional, paper-based option.
91
Questions and Answers About these Proxy Materials and the Annual Meeting
In any event, please go to www.meetnow.global/MDWD6FQ for more information on the available options and registration instructions.
The online meeting will begin promptly at 10:00 a.m. Eastern Daylight Time, on Monday, June 5, 2023. We encourage you to access the meeting prior to the start time leaving ample time for the check in. Please follow the registration instructions as outlined in this Proxy Statement/Prospectus.
Who can vote at the Annual Meeting?
Anyone who owned shares of our Common Stock at the close of business on February 28, 2018,April 10, 2023, the “RecordRecord Date,” is entitled to notice of and to vote at the Annual Meeting or any postponement or adjournment of the meeting. Each share is entitled to one vote.
A complete list of stockholders as of the Record Date will be open to the examination of any stockholder during regular business hours at the offices of Crane Co., 100 First Stamford Place, Stamford, Connecticut, for ten days beforeNXT, 950 Winter Street, 4th Floor, Waltham, MA 02451, on the day of the meeting, as well as at the meeting.meeting by visiting www.meetnow.global/MDWD6FQ on the meeting day and time, entering your control number and joining the Annual Meeting as a “Shareholder”.
If you are a Registered Holder, please follow the instructions on the proxy card that you received to access the Annual Meeting. If you are a Beneficial Holder, please see the registration options set forth in numbers (1) and (2) above.
Registration is only required if you are a Beneficial Holder, as set forth above.
How many votes are required for each question to pass?
Nominees for the Board of Directors will be elected if more votes are cast in favor of the nominee than are cast against the nominee by the holders of shares present in person (including virtual attendance) or represented by proxy and entitled to vote at the meeting.Annual Meeting.
In the vote on the frequency with which we will ask stockholders to approve the compensation paid to certain shareholders, the alternative which receives the largest number of votes, even if not a majority, will be considered to be the recommendation of the stockholders.
Each other matter to be voted upon at the meetingAnnual Meeting requires the affirmative vote of a majority of the votes cast by the holders of shares of common stock present in person (including virtual attendance) or represented by proxy and entitled to vote at the meeting.Annual Meeting.
What are “Broker non-votes”?
Under the rules of the New York Stock Exchange,NYSE, brokers holding shares for customers have authority to vote on certain matters even if the broker has not received instructions from the customer, but they do not have such authority as to other matters. For the questions on the agenda for this year’s Annual Meeting, member firms of the New York Stock ExchangeNYSE may vote without specific instructions from beneficial owners on the ratification of the selection of auditors, but not on the election of directors or the approval of the compensation paid by the Company to certain executive officers or the frequency of the approval of the 2018 Stock Incentive Plan.compensation paid by the Company to certain executive officers.
“Broker non-votes” are shares held in record name by brokers or nominees, as to which the broker or nominee (i) has not received instructions from the beneficial owner or person entitled to vote, (ii) does not have discretionary voting power under New York Stock ExchangeNYSE rules or the document under which it serves as broker or nominee, and (iii) has indicated on the proxy card, or otherwise notified us, that it does not have authority to vote the shares on the question.
What will be the effect of abstentions and broker non-votes?
Stockholders may abstain from voting on any proposal expected to be brought before the meeting.Annual Meeting.
Abstentions and broker non-votes will have no effect on the election of directors, as each nominee will be elected if the number of votes cast in favor of such nominee exceeds the number of votes cast against such nominee. Abstentions are not treated as votes cast.cast for such proposal.
92
Questions and Answers About these Proxy Materials and the Annual Meeting
Abstentions and broker non-votes will have no effect on any of the other three proposals, because they will not count as votes cast for or against the question and will not be included in calculating the number of votes necessary for adoption and approval.
2018 Proxy Statement 77
Questions and Answers About These Proxy Materials and the Annual Meeting
What constitutes a quorum for the meeting?
According to the Company’s amended By-laws, of Crane Co., a quorum for a meeting of stockholders consists of the holders of a majority of the shares of common stock issued and outstanding and entitled to vote, present in person or by proxy. Virtual attendance at the Annual Meeting constitutes “in person” attendance for purposes of establishing a quorum. On the Record Date, there were 59,816,16956,725,307 shares of common stock issued and outstanding, so at least 29,908,08528,362,654 shares must be represented at the meeting for business to be conducted. If a quorum does not attend or is not represented, the Annual Meeting will have to be postponed.
Shares of common stock represented by a properly signed and returned proxy are treated as present at the Annual Meeting for purposes of determining a quorum, whether the proxy is marked as casting a vote or abstaining. Shares represented by “broker non-votes” are also treated as present for purposes of determining a quorum.
Who will count the votes?
A representative of our transfer agent, Computershare Trust Company, N.A., will tabulate the votes.
How can I cast my vote?
YouIn addition to the other options listed below, where applicable, you can vote by completing and mailing the enclosed proxy. We ask you to mark your choices, sign, date, and return the proxy as soon as possible in the enclosed postage prepaid envelope.
All stockholders of record, and many street name holders, can also give voting instructions at the website www.investorvote.com/cr www.envisionreports.com/cxt using the instructions on the enclosed proxy card or by scanning the QR code on their proxy card or by touchtone telephone from the United States and Canada using the toll-free number listed on the proxy card, proving their identity by using the Personal Identification Numbercontrol number shown on the proxy card. Both procedures allowEach procedure allows stockholders to appoint the designated proxies to vote their shares and to confirm that their instructions have been properly recorded.
You can attend the Annual Meeting and vote your shares in person;virtually at the Annual Meeting; if you choose to vote your shares virtually at the Annual Meeting via the Annual Meeting website, please follow the instructions on your proxy card.
How do you should bringI submit questions at the enclosed proxy card with youAnnual Meeting?
Every Crane NXT stockholder has an opportunity during the Annual Meeting to submit questions, both on the proposals being presented to stockholders and on general matters relating to Crane NXT and its business. Stockholders may do so by accessing the virtual meeting platform as proofdescribed above, before and during the Annual Meeting, and submitting questions in the space provided therein. Representatives of Crane NXT will review the questions during the appropriate portion of the numberAnnual Meeting and answers to appropriate questions will be provided during the Annual Meeting by a member of shares you owned on the Record Date.management or a director.
What if I submit a proxy but don’t mark it to show my preferences?
If you return a properly signed proxy without marking it, it will be voted in accordance with the Board’s recommendations on all proposals.
What if I submit a proxy and then change my mind?
If you submit a proxy, you can revoke it at any time before it is voted by submitting a written revocation to the Corporate Secretary, or by submitting a new proxy, or by voting in personvirtually at the Annual Meeting. However, if you have shares held through a brokerage firm, bank, or other custodian, you can revoke an earlier proxy only by following the custodian’s procedures.
93
Questions and Answers About these Proxy Materials and the Annual Meeting
Who is paying for this solicitation of proxies?
Crane Co.NXT will pay the cost of this solicitation of proxies for the Annual Meeting. In addition to soliciting proxies through the mail using this Proxy Statement,Statement/Prospectus, we may solicit proxies by telephone, facsimile, electronic mail, and personal contact. These solicitations will be made by our regular employees without additional compensation. We have also engaged The Proxy Advisory Group,Alliance Advisors LLC to assist in this solicitation of proxies, and we have agreed to pay that firm $17,000, plus disbursements.approximately $18,000. Banks, brokerage houses, and other institutions, nominees, and fiduciaries will be asked to forward the proxy materials to the beneficial owners of the common stock they hold of record, and will be reimbursed for their reasonable expenses in forwarding such material.
78 Crane Co.
Questions and Answers About These Proxy Materials and the Annual Meeting
Where can I learn the outcome of the vote?
The Corporate Secretary will announce the preliminary voting results at the meeting, and we will publish the final results in a Current Report on Form 8-K filed with the Securities and Exchange CommissionSEC within four business days after the meeting.
How and when can I propose that an item be considered at next year’s Annual Meetingannual meeting and included in next year’s proxy statement?
The By-lawsCrane NXT amended and restated by-laws, dated as of April 3, 2023, which are on file with the SEC (as Exhibit 3.3 to Crane NXT’s Current Report on Form 8-K filed on April 3, 2023), provide that the Annual MeetingCrane NXT annual meeting of Stockholdersstockholders will be held on the fourth Monday in April in each year unless otherwise determinedsuch date and at such time as shall be designated from time to time by the BoardCrane NXT board of Directors. Appropriate proposalsdirectors. Under the Crane NXT amended and restated by-laws, written notice of security holders intendedstockholder nominations to the Crane NXT board of directors or any other business proposed by a stockholder that is not to be presented at the 2019 Annual Meeting must be received for inclusionincluded in the proxy statement and formmust be delivered to Crane NXT’s secretary (a) not later than 90 days nor earlier than 120 days prior to the first anniversary of proxy relating to thatthe preceding year’s annual meeting, on or before November 15, 2018. In addition, under the By-laws, if security holders intend to nominate directors or present proposals at the 2019 Annual Meeting other than through inclusion of such proposals(b) in the proxy materials forevent that next year’s annual meeting thenis not held within 25 days before or after the anniversary date of the immediately preceding annual meeting, the earlier of (i) at least 90 days prior to the date of the Crane Co.NXT annual meeting of stockholders or, (ii) the close of business 10 days following the day on which notice of the date of the annual meeting was mailed to stockholders or public disclosure of the date of the annual meeting was made. Assuming that Crane NXT’s 2024 annual meeting of stockholders is held within 25 days of the anniversary of the 2023 annual meeting of stockholders, Crane NXT must receive written notice of such nominations or proposals no earlier than December 24, 2018(containing the information specified in Crane NXT’s amended and no later than January 23, 2019.restated by-laws) to Crane NXT’s secretary between February 6, 2024 and March 7, 2024. If we doCrane NXT does not receive notice by that date, then such proposals may not be presented at the 2019 Annual Meeting.Crane NXT 2024 annual meeting of stockholders.
Stockholders may also submit proposals for inclusion in the proxy materials in connection with the Crane NXT 2024 annual meeting of stockholders through Rule 14a-8 of the Exchange Act. Stockholders who wish to present such proposals must submit their proposals to Crane NXT’s secretary on or before December 23, 2023.
* * * * *
We urge stockholders who do not expect to attend in personthe Annual Meeting virtually to sign, date, and return the enclosed proxy in the envelope provided, or tovote their shares online by scanning the QR code on their proxy card, or use the internet address or the toll-free telephone number listed on the enclosed proxy card.Notice of Annual Meeting. In order to avoid unnecessary expense, we ask your cooperation in voting your proxy promptly, no matter how large or how small your holdings may be.
By Order of | |
2018 Proxy Statement 79
CRANE CO. 2018 STOCK INCENTIVE PLAN
1. PURPOSE AND ADOPTION OF THE PLAN
The purpose of the Crane Co. 2018 Stock Incentive Plan (as the same may be amended from time to time, the “Plan”) is (i) to attract and retain key employees and Non-Employee Directors (as defined below) of Crane Co. (the “Company”) and its Subsidiaries (as defined below) who are and will be contributing to the success of the business; (ii) to motivate and reward key employees and Non-Employee Directors who have made significant contributions to the success of the Company and encourage them to continue to give their best efforts to its future success; (iii) to provide competitive incentive compensation opportunities; and (iv) to further opportunities for stock ownership by such key employees and Non-Employee Directors in order to increase their proprietary interest in the Company and their personal interest in its continued success.
The Plan was approved by the Board of Directors, of the Company (the “Board”) on January 29, 2018 and shall become effective upon approval by the stockholders of the Company (the “Effective Date”). The Plan shall remain in effect until terminated by action of the Board; provided, however, that no Award shall be granted after the date that is ten (10) years from the Effective Date. Upon the Plan becoming effective, no further awards shall be made under the Crane Co. 2013 Stock Incentive Plan.
2. DEFINITIONS
For the purposes of this Plan, capitalized terms shall have the following meanings:
(a) “Award” means any grantPaul G. Igoe
Secretary
94
Your vote matters – here’s how to a Participant of one or a combination of Non-Qualified Stock Options or Incentive Stock Options described in Section 6, Stock Appreciation Rights described in Section 7, Restricted Shares or Restricted Share Units described in Section 8 and Other Stock-Based Awards described in Section 9.
(b) “Award Agreement” means a written agreement between the Company and a Participant or a written notice from the Company to a Participant specifically setting forth the terms and conditions of an Award granted under the Plan.
(c) “Beneficiary” means an individual, trust or estate who or which, by a written designation of the Participant filed with the Companyvote! You may vote online or by operationphone instead of law, succeeds to the rights and obligations of the Participant under the Plan and an Award Agreement upon the Participant’s death.
(d) “Board” shall have the meaning given to such term in Section 1.
(e) “Change in Control” means the occurrence of one of the following: (i) a “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becoming the “beneficial owner” (as that term is defined in Rule 13d-3 under the Exchange Act) of more than 50% of the outstanding shares of the Common Stock calculatedmailing this card. Votes submitted electronically must be received by 8:00 a.m. Eastern Daylight Time on June 5, 2023, except as provided in paragraph (d) of said Rule 13d-3; (ii) the consummation of a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other corporation or other entity, other than a merger or consolidation (a “Non-CIC Merger”) which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or being converted into voting securities of the surviving entity) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; (iii) the consummation of any sale, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all the assets of the Company other than to an entity at least fifty percent (50%) of the total voting power of which is owned, directly or indirectly, by the Company or by stockholders of the Company in substantially the same proportions as their ownership of voting securities of the Company immediately prior to such sale, exchange or other transfer; or (iv) the following individuals cease for any reason to constitute a majority of the members of the Board: individuals
2018 Proxy Statement A-1
Appendix A
who,set forth on the Effective Date, constitute the Board and any new director whose appointment or election is endorsed by a majority of the members of the Board then still in office who either were directors on the Effective Date or whose appointment or election was previously so endorsed (each, an “Incumbent Director”).
For purpose of clause (i) above, a “person” shall not include any entity that becomes such a beneficial owner in connection with a Non-CIC Merger. For purposes of clause (ii) above, the “surviving entity” includes, if applicable, the ultimate parent entity that directly or indirectly has beneficial ownership of sufficient voting securities eligible to elect a majority of the members of the board of directors (or the analogous governing body) of the surviving entity. For purposes of clause (iv) above, any director whose initial assumption of office occurs as a result of an actual or threatened election contestreverse with respect to Crane NXT, Co. Savings and Investment Plan Shares. Online Go to www.envisionreports.com/CXT or scan the election or removalQR code — login details are located in the shaded bar below. Phone Call toll free 1-800-652-VOTE (8683) within the USA, US territories and Canada Save paper, time and money! Sign up for electronic delivery at www.envisionreports.com/CXT Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. 2023 Annual Meeting Proxy Card 1234 5678 9012 345 qIF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q A Proposals — The Board of directors or other actual or threatened solicitationDirectors recommends a vote FOR all the nominees listed, FOR Proposals 2 and 3, and EVERY YEAR on Proposal 4. 1. Election of proxies or consents by or on behalf of a person other than the Board shall not be considered an Incumbent Director.
Notwithstanding the foregoing, if it is determined that an Award hereunder is subject to the requirements of Section 409ADirectors: + For Against Abstain For Against Abstain For Against Abstain 01—Michael Dinkins 02—William Grogan 03—Cristen Kogl 04—Ellen McClain 05—Max H. Mitchell 06—Aaron W. Saak 07—John S. Stroup 08—James L. L. Tullis For Against Abstain For Against Abstain 2. Ratification of the Codeselection of Deloitte & Touche LLP as the 3. Say on Pay – An advisory vote to approve the compensation Company’s independent auditors for 2023. paid to certain executive officers. Every Every Every Abstain Year 2 Years 3 Years 4. Say on Frequency – An advisory vote to approve the frequency with which we will ask stockholders to approve the compensation paid to certain executive officers. B Authorized Signatures — This section must be completed for your vote to count. Please date and the Change in Control, is a “payment event” under Section 409A of the Code for such Award, the Company will not be deemed to have undergone a Change in Control unless the Company is deemed to have undergone a “change in control event” pursuant to the definition of such term in Section 409A of the Code.
(f) “Code” means the Internal Revenue Code of 1986,sign below. Please sign exactly as amended. References to a section of the Code include that section and any comparable sectionname(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or sections of any future legislation that amends, supplements or supersedes said section.
(g) “Committee” means the Management Organization and Compensation Committee of the Board or such other committee composed of at least three members of the Board as may be designated by the Board from time to time.
(h) “Company” shall have the meaning given to such term in Section 1.
(i) “Common Stock” means Common Stock, par value $1.00 per share, of the Company.
(j) “Date of Grant” means thecustodian, please give full title. Date (mm/dd/yyyy) — Please print date as of which the Committee grants an Award. If the Committee contemplates an immediate grant to a Participant, the Date of Grant shall be the date of the Committee’s action. If the Committee contemplates a date on which the grant is to be made other than the date of the Committee’s action, the Date of Grant shall be the date so contemplated and set forth in or determinable from the records of action of the Committee; provided, however, that the Date of Grant shall not precede the date of the Committee’s action.
(k) “Dividend Equivalent Account” means a bookkeeping account in accordance with Section 12(h) and related to an Award (other than an Option or a Stock Appreciation Right) that is credited with the amount of any cash dividends or stock distributions that would be payable with respect to the shares of Common Stock subject to such Awards had such shares been outstanding shares of Common Stock.
(l) “Effective Date” shall have the meaning given to such term in Section 1.
(m) “Exchange Act” means the Securities Exchange Act of 1934, as amended.
(n) “Exercise Price” means, with respect to Options, the amount established by the Committee in the Award Agreement in accordance with Section 6(b) which is required to purchase each share of Common Stock upon exercise of the Option, or with respect to a Stock Appreciation Right, the amount established by the Committee in the Award Agreement in accordance with Section 7(b) which is to be subtracted from the Fair Market Value on the date of exercise in order to determine the amount of the payment to be made to the Participant.
(o) “Fair Market Value” of a share of Common Stock as of a particular date shall mean (i) if the Common Stock is listed on a national securities exchange, the closing or last price of the Common Stock on the composite tape or other comparable reporting system for the applicable date, or if the applicable date is not a trading day, the trading day immediately preceding the applicable date, or (ii) if the shares of Common
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Stock are not then listed on a national securities exchange, the closing or last price of the Common Stock quoted by an established quotation service for over-the-counter securities, or (iii) if the shares of Common Stock are not then listed on a national securities exchange or quoted by an established quotation service for over-the-counter securities, or the value of such shares is not otherwise determinable, such value as determined by the Committee in good faith in its sole discretion.
(p) “Family Member” means a person who is a spouse, former spouse, child, stepchild, grandchild, parent, step-parent, grandparent, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother, sister, brother-in-law, or sister-in-law, including adoptive relationships, of the applicable individual, any person sharing the applicable individual’s household (other than a tenant or employee), a trust in which any one or more of these persons have more than fifty percent of the beneficial interest, a foundation in which any one or more of these persons (or the applicable individual) control the management of assets, and any other entity in which one or more of these persons (or the applicable individual) own more than fifty percent of the voting interests.
(q) “Full Value Award” means (i) any Award of Restricted Shares, Restricted Share Units or Other Stock-Based Awards made under the Plan, or (ii) any comparable awards made under a Predecessor Plan.
(r) “Incentive Stock Option” means a stock optionbelow. Signature 1 — Please keep signature within the meaning of Section 422 of the Code.
(s) “Merger” means any merger, reorganization, consolidation, share exchange, transfer of assets or other transaction having similar effect involving the Company.
(t) “Non-Employee Director” means a member of the Board who is not an employee of the Company or its Subsidiaries.
(u) “Non-Qualified Stock Option” means a stock option which is not an Incentive Stock Option.
(v) “Options” means all Non-Qualified Stock Options and Incentive Stock Options granted at any time under the Plan.
(w) “Other Stock-Based Award” means an Award granted in accordance with Section 9.
(x) “Participant” means a person designated to receive an Award under the Plan in accordance with Section 5.
(y) “Plan” shall have the meaning given to such term in Section 1.
(z) “Predecessor Plan” shall mean each of the Company’s 2007 Stock Incentive Plan, 2007 Non-Employee Director Compensation Plan, 2009 Stock Incentive Plan, 2009 Non-Employee Director Compensation Plan and 2013 Stock Incentive Plan.
(aa) “Restricted Shares” means Common Stock subject to restrictions imposed in connection with Awards granted under Section 8.
(bb) “Restricted Share Unit” means a notional bookkeeping entry representing the equivalent of a share of Common Stock, subject to restrictions imposed in connection with Awards granted under Section 8.
(cc) “Stock Appreciation Right” or “SAR” means an Award granted in accordance with Section 7.
(dd) “Subsidiary” means a subsidiary of the Companybox. Signature 2 — Please keep signature within the meaning of Section 424(f) of the Code.box.
(ee) “Substitute Award” means any Award granted in assumption of or in substitution for an award of a company or business acquired by the Company or a Subsidiary or with which the Company or a Subsidiary combines.
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3. ADMINISTRATION
(a) This Plan shall be administered by the Committee, which shall at all times be constituted to comply with the “non-employee director” requirements established from time to time by rules or regulations of the Securities and Exchange Commission under Section 16 of the Exchange Act, and the “independent director” requirements established from time to time under the corporate governance rules of the New York Stock Exchange. The Committee shall have the sole discretionary authority to interpret the Plan, to establish and modify administrative rules for the Plan, to impose such conditions and restrictions on Awards as it determines appropriate, and to take such steps in connection with the Plan and Awards granted hereunder as it may deem necessary or advisable, including without limitation, to waive the forfeiture period and any other conditions set forth in any Award Agreement under appropriate circumstances (including the death, disability or retirement of the Participant or a material change in circumstances arising after the date of an Award) and subject to such terms and conditions as the Committee shall deem appropriate.
(b) Actions taken under the Plan with respect to Awards to Non-Employee Directors that are described herein as actions by the Committee under the terms of the Plan, but which require Board approval under the Committee’s Charter, shall be deemed to include, for purposes of the Plan, such action by the Board.
(c) The Committee may employ attorneys, consultants, accountants or other persons and the Committee and the Company and its officers and directors shall be entitled to rely upon the advice, opinions or valuations of any such persons. All usual and reasonable expenses of the Committee shall be paid by the Company. No Committee member shall receive compensation with respect to his or her services for the Committee except as may be authorized by the Board. All actions taken and all interpretations and determinations made by the Committee in good faith shall be final and binding upon all Participants who have received awards, the Company and all other interested persons. No member of the Committee shall be personally liable for any action, determination or interpretations taken or made in good faith with respect to this Plan or Awards made hereunder, and all members of the Committee shall be fully indemnified and protected by the Company in respect of any such action, determination or interpretation.
4. SHARES
(a) The total number of shares of Common Stock authorized to be awarded under the Plan shall not exceed 6,500,000, less the following number of shares of Common Stock for any awards made under a Predecessor Plan on or after February 1, 2018 but before the Effective Date: (i) for any such awards that are stock options or stock appreciation rights, one share of Common Stock for every one stock option or stock appreciation right, and (ii) for any such awards that are Full Value Awards, 3.85 shares of Common Stock for each one share of Common Stock in connection with such award. For purposes of this Section 4(a), the following share counting rules shall apply: (x) any shares of Common Stock granted in connection with Options and SARs shall be counted against the limit in this Section 4(a) as one share for every one Option or SAR awarded; and (y) any shares of Common Stock granted in connection with Full Value Awards shall be counted against the limit in this Section 4(a) as 3.85 shares of Common Stock for every one share of Common Stock granted in connection with such Award.
(b) Any Award settled in cash shall not be counted as shares of Common Stock for any purpose under this Plan.
(c) If any Award under the Plan expires, or is terminated, surrendered or forfeited, in whole or in part, the unissued Common Stock covered by such Award shall again be available for the grant of Awards under the Plan. For purposes of this Section 4(c), the following share counting rules shall apply: (i) for an Option or SAR, one share of Common Stock shall be added back for every one such Option or SAR that expires, or is terminated, surrendered or forfeited; and (ii) for a Full Value Award, 3.85 shares of Common Stock shall be added back for every one share of Common Stock in connection with such Full Value Award that expires, or is terminated, surrendered or forfeited.
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(d) Shares of Common Stock underlying any outstanding stock option or Full Value Award granted under a Predecessor Plan that, on or after February 1, 2018, expires, or is terminated, surrendered or forfeited, in whole or in part, for any reason without issuance of such shares shall be available for the grant of new Awards under this Plan. For purposes of this Section 4(c), the following share counting rules shall apply: (i) for any such stock option, one share of Common Stock shall be added back for every one such stock option that expires, or is terminated, surrendered or forfeited; and (ii) for any such Full Value Award, 3.85 shares of Common Stock shall be added back for every one share of Common Stock in connection with such Full Value Award that expires, or is terminated, surrendered or forfeited.
(e) For Options, the full number of shares of Common Stock with respect to which the Option is granted shall count against the aggregate number of shares available for grant under the Plan. Accordingly, if in accordance with the terms of the Plan, a Participant pays the Exercise Price for an Option by either tendering previously owned shares or having the Company withhold shares, then such shares surrendered to pay the Exercise Price shall continue to count against the aggregate number of shares available for grant under the Plan set forth in Section 4(a) above. In addition, for share-settled SARs, the full number of shares of Common Stock with respect to which the SAR is granted shall count against the aggregate number of shares available for grant under the Plan (even though a fewer number of shares of Common Stock may in fact be issued upon exercise).
(f) The following share counting provisions shall apply if a Participant satisfies any tax withholding requirement with respect to an Award of Options or SARs under this Plan or any Full Value Award (including for any tax withholding transactions on or after February 1, 2018 for any Full Value Awards that were originally made under a Predecessor Plan) by either tendering previously owned shares or having the Company withhold shares: (i) with respect to Options and SARs, such shares surrendered to satisfy such tax withholding requirements shall continue to count against the aggregate number of shares available for grant under the Plan set forth in Section 4(a) above; and (ii) with respect to Full Value Awards, 3.85 shares of Common Stock shall be added back for every one share of Common Stock in connection with such Full Value Award that is surrendered to satisfy such tax withholding requirements.
(g) In the case of any Substitute Award, such Substitute Award shall not be counted against the number of shares reserved under the Plan.
(h) The maximum number of shares of Common Stock that may awarded as Incentive Stock Options shall be 6,500,000.
(i) The number of shares available for grants under the Plan shall be subject to adjustment in accordance with Section 10. The shares to be offered under the Plan shall be authorized and unissued shares of Common Stock, or issued shares of Common Stock which will have been reacquired by the Company, including shares purchased in the open market. Shares of Common Stock purchased on the open market with stock option exercise proceeds shall not be added back to the shares available for grant under the Plan.
5. PARTICIPATION
(a) Participants in the Plan shall be such key employees of the Company and its Subsidiaries and Non-Employee Directors as the Committee, in its sole discretion, may designate from time to time. For purposes of the Plan, “key employees” shall mean officers as well as other employees (including officers and other employees who are also directors of the Company or any Subsidiary) designated by the Committee in its discretion upon the recommendation of management, but shall not include any employee who, assuming the full exercise of such Option, would own more than 10% of the combined voting power of all classes of stock of the Company or any Subsidiary.
(b) No Awards may be granted under the Plan during any one calendar year to a Grantee who is a Non-Employee Director that exceed, together with any cash compensation received for such service during the applicable year (based on the Fair Market Value of the shares of Common Stock underlying the Award as of the applicable Date of Grant in the case of Full Value Awards, and based on the applicable grant date
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fair value for accounting purposes in the case of Options or SARs): (i) for any Non-Employee Director not serving as Chairman of the Board, $750,000; and (ii) for any Non-Employee Director serving as Chairman of the Board, $1,000,000. The Board may make exceptions to this limit in extraordinary circumstances for individual Non-Employee Directors, as the Board may determine in its discretion, provided that the Non-Employee Director receiving such additional compensation may not participate in the decision to award such compensation.
(c) Options under the Plan may be Incentive Stock Options within the meaning of Section 422 of the Code or Non-Qualified Stock Options, provided that Incentive Stock Options may not be awarded to Non-Employee Directors. Awards granted hereunder shall be evidenced by Award Agreements in such form as the Committee shall approve, which Agreements shall comply with and be subject to the terms and conditions of this Plan.
6. GRANT AND EXERCISE OF STOCK OPTIONS
(a) The Committee may grant to any Participant one or more Awards of Options entitling the Participant to purchase shares of Common Stock from the Company on such terms and subject to such conditions as may be established by the Committee. An Award of Options may be granted in such number, at such Exercise Price, and subject to such waiting periods, exercise dates and restrictions on exercise (including, but not limited to, periodic installments), not inconsistent with the terms of this Plan, as may be determined by the Committee at the time of grant.
(b) The Exercise Price of each share of Common Stock upon exercise of any Option granted under the Plan (except in connection with Substitute Awards) shall not be less than 100% of the Fair Market Value of the Common Stock on the Date of Grant. Each Option shall have a stated term not to exceed ten (10) years from the Date of Grant.
(c) The Exercise Price of the shares purchased upon the exercise of an Option shall be paid in full at the time of exercise in cash or, in whole or in part, by tendering (either actually or by attestation) shares of Common Stock. The value of each share of Common Stock delivered in payment of all or part of the Exercise Price upon the exercise of an Option shall be the Fair Market Value of the Common Stock on the date the Option is exercised. Exercise of Options shall also be permitted, to the extent permitted by the Committee, in accordance with a cashless exercise program under which, if so instructed by a Participant, shares of Common Stock may be issued directly to the Participant’s broker or dealer upon receipt of an irrevocable written notice of exercise from the Participant. In addition, exercise of Options shall be permitted, to the extent permitted by the Committee, (i) by reduction in the number of shares of Common Stock otherwise deliverable upon exercise of such Option with a Fair Market Value equal to the aggregate Exercise Price at the time of exercise, or (ii) in any other form of legal consideration that may be acceptable to the Committee.
(d) Each Option granted under this Plan shall not be transferable by the Participant otherwise than by will or the laws of descent and distribution, and shall be exercisable, during the Participant’s lifetime, only by the Participant. Notwithstanding the foregoing, Non-Qualified Stock Options may be transferable, without payment of consideration, to Family Members to the extent permitted by the Committee.
(e) No Participant may be granted Incentive Stock Options under the Plan (or any other plans of the Company and its Subsidiaries) that would result in shares with an aggregate Fair Market Value (measured on the Date of Grant) of more than $100,000 first becoming exercisable in any one calendar year.
7. GRANT AND EXERCISE OF STOCK APPRECIATION RIGHTS
(a) The Committee may grant to any Participant one or more Awards of Stock Appreciation Rights on such terms and subject to such conditions as may be established by the Committee. An Award of Stock Appreciation Rights may be granted in such number, at such Exercise Price, and subject to such waiting periods, exercise dates and restrictions on exercise (including, but not limited to, periodic installments), not inconsistent with the terms of this Plan, as may be determined by the Committee at the time of grant.
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(b) The Exercise Price of each share of Common Stock upon exercise of any Stock Appreciation Rights granted under the Plan (except in connection with Substitute Awards) shall not be less than 100% of the Fair Market Value of the Common Stock on the Date of Grant. Each Stock Appreciation Right shall have a stated term not to exceed ten (10) years from the Date of Grant.
(c) Upon exercise of a Stock Appreciation Right with respect to a share of Common Stock, the Participant shall be entitled to receive an amount equal to the excess, if any, of (A) the Fair Market Value of a share of Common Stock on the date of exercise over (B) the Exercise Price of such Stock Appreciation Right established in the Award Agreement. Any payment which may become due from the Company by reason of a Participant’s exercise of a Stock Appreciation Right may be paid to the Participant as determined by the Committee and set forth in the applicable Award Agreement (i) all in cash, (ii) all in Common Stock, or (iii) in any combination of cash and Common Stock. In the event that all or a portion of the payment is made in Common Stock, the number of shares of Common Stock delivered in satisfaction of such payment shall be determined by dividing the amount of such payment or portion thereof by the Fair Market Value on the Exercise Date. No fractional share of Common Stock shall be issued to make any payment in respect of Stock Appreciation Rights; if any fractional share would be issuable, the combination of cash and Common Stock payable to the Participant shall be adjusted as directed by the Committee to avoid the issuance of any fractional share.
(d) Each Award of Stock Appreciation Rights granted under this Plan shall not be transferable by the Participant otherwise than by will or the laws of descent and distribution, and shall be exercisable, during the Participant’s lifetime, only by the Participant.
8. GRANT OF RESTRICTED SHARES AND RESTRICTED SHARE UNITS
(a) The Committee may grant to any Participant one or more Awards of Restricted Shares or Restricted Share Units on such terms and subject to such conditions as may be established by the Committee. An Award of Restricted Shares or Restricted Share Units may be granted pursuant to such restrictions and provisions, whether based on performance standards, periods of service, retention by the Participant of ownership of specified shares of Common Stock or other criteria, not inconsistent with the terms of this Plan, as may be established by the Committee.
(b) With respect to Awards of Restricted Shares and Restricted Share Units that are granted, vested or otherwise conditioned on one or more performance conditions, the Committee may use such business criteria and other measures of performance as it may deem appropriate, which may include specified levels of one or more of the following (in absolute terms or relative to one or more other companies or indices): (i) net sales; sales of a particular product or line of products; (ii) gross profit; ratio of gross profit to sales; (iii) operating profit; ratio of operating profit to sales (in each case before or after taxes and before or after allocation of corporate overhead and bonuses); (iv) net income; earnings per share; (v) adjusted earnings (including earnings before taxes, earnings before interest and taxes, or earnings before interest, taxes, depreciation and amortization); (vi) cash flow from operations; free cash flow; (vii) return on equity, assets, net assets, total capital, or total invested capital; economic value added models or equivalent metrics; (viii) share price; total shareholder return (in each case either absolutely or as compared with a peer group or stock market index); (ix) financial statement items such as cash, total debt, shareholders’ equity, working capital, material costs and engineering, selling and administrative expenses(in each case either absolutely or in proportion to another financial statement item such as assets or sales); or (x) implementation, completion or attainment of measurable objectives with respect to specific operational goals and targets, such as: (A) environmental, health and/or safety goals (including lost workday rates); (B) customer satisfaction; (C) inventory turns; (D) lead time; (E) on-time delivery; (F) purchase price index; (G) days sales outstanding; (H) quality; (I) research and development, (J) specific products/projects (including new product introductions); and (K) recruitment or retention of personnel. For any such Awards, the Committee may determine whether or not to adjust any such goals during or after the applicable performance period to take into consideration and/or mitigate the impact of any gains or losses, reserves or other charges to earnings, accounting changes, acquisitions, dispositions and/or divestitures (“special items”), including any of the following that occur during the applicable performance period: (i) asset write-downs or impairment
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charges; (ii) litigation or claim costs, judgments or settlements, including asbestos claims and defense costs; (iii) Superfund environmental costs; (iv) the effect of changes in tax laws, accounting principles or other laws or provisions affecting reported results; (v) restatements occurring as a result of errors that arise from events other than fraud or other misconduct; (vi) provisions for reorganization and restructuring programs; (vii) nonrecurring items as described in management’s discussion and analysis of financial condition and results of operations appearing in the Company’s annual report to shareholders for the applicable year; (viii) acquisitions or divestitures; and (ix) foreign exchange gains and losses.
(c) As soon as practicable after the Date of Grant of a Restricted Share Award by the Committee, the Company shall cause to be transferred on the books of the Company or its agent, shares of Common Stock, registered on behalf of the Participant, evidencing the Restricted Shares covered by the Award, subject to forfeiture to the Company as of the Date of Grant if an Award Agreement with respect to the Restricted Shares covered by the Award is not duly executed by the Participant and timely returned to the Company. Until the lapse or release of all restrictions applicable to an Award of Restricted Shares the share certificates representing such Restricted Shares may be held in custody by the Company or its designee, in physical or book entry form, or, if the certificates bear a restrictive legend, by the Participant. Upon the lapse or release of all restrictions with respect to an Award as described in Section 8(d), one or more share certificates, registered in the name of the Participant, for an appropriate number of shares as provided in Section 8(e), free of any restrictions set forth in the Plan and the related Award Agreement shall be delivered to the Participant.
(d) Beginning on the Date of Grant of a Restricted Share Award and subject to execution of the related Award Agreement as provided in Section 8(b), and except as otherwise provided in such Award Agreement, the Participant shall become a stockholder of the Company with respect to all shares subject to a Restricted Share Award Agreement and shall have all of the rights of a stockholder, including, but not limited to, the right to vote such shares and the right to receive dividends; provided, however, that any shares of Common Stock or other securities distributed as a dividend or otherwise with respect to any Restricted Shares as to which the restrictions have not yet lapsed, shall be subject to the same restrictions as such Restricted Shares and held or restricted as provided in Section 8(b).
(e) Upon expiration or earlier termination of the forfeiture period without a forfeiture and the satisfaction of or release from any other conditions prescribed by the Committee, or at such earlier time as provided under the provisions of Section 3(a) (regarding the Committee’s discretion to waive vesting conditions), the restrictions applicable to the Restricted Shares shall lapse. As promptly as administratively feasible thereafter, subject to the requirements of Section 12(o) (regarding tax withholding), the Company shall deliver to the Participant or, in case of the Participant’s death, to the Participant’s Beneficiary, one or more share certificates for the appropriate number of shares of Common Stock, free of all such restrictions, except for any restrictions that may be imposed by law.
(f) As soon as practicable after the Date of Grant of a Restricted Share Unit Award by the Committee, the Company shall cause to be entered upon its books a notional account for the Participant’s benefit indicating the number of Restricted Share Units awarded, subject to forfeiture as of the Date of Grant if an Award Agreement with respect to the Restricted Share Units covered by the Award is not duly executed by the Participant and timely returned to the Company. Until the lapse or release of all restrictions applicable to a Restricted Share Unit Award, no shares of Common Stock shall be issued in respect of such Awards and no Participant shall have any rights as a stockholder of the Company with respect to the shares of Common Stock covered by such Restricted Share Unit Award, including the right to vote such shares and the right to receive dividends; provided, that the Committee may, in its sole discretion, award a Participant dividend equivalents with respect to a Restricted Share Unit Award in accordance with Section 12(h) of the Plan.
(g) Upon expiration or earlier termination of the forfeiture period without a forfeiture and the satisfaction of or release from any other conditions prescribed by the Committee, or at such earlier time as provided under the provisions of Section 3(a) (regarding the Committee’s discretion to waive vesting conditions), the restrictions applicable to the Restricted Share Units shall lapse. As promptly as administratively feasible thereafter, subject to the requirements of Section 12(o) (regarding tax withholding), the Company shall deliver to the Participant or, in case of the Participant’s death, to the Participant’s
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Beneficiary, either (i) a cash payment equal to the number of Restricted Share Units as to which such restrictions have lapsed multiplied by the Fair Market Value of a share of Common Stock as of the date the restrictions lapsed, or, (ii) solely in the Committee’s discretion, one or more share certificates registered in the name of the Participant, for the appropriate number of shares of Common Stock, free of all restrictions, except for any restrictions that may be imposed by law.
(h) None of the Restricted Shares or Restricted Share Units may be assigned or transferred (other than by will or the laws of descent and distribution or to an inter vivos trust with respect to which the Participant is treated as the owner under Sections 671 through 677 of the Code), pledged or sold prior to the lapse of the restrictions applicable thereto.
(i) A Participant’s Restricted Share or Restricted Share Unit Award shall not be contingent on any payment by or consideration from the Participant other than the rendering of services.
(j) Restricted Shares shall be forfeited and returned to the Company, and Restricted Share Units shall be forfeited, and all rights of the Participant with respect to such Restricted Shares or Restricted Share Units shall terminate unless the Participant continues in the service of the Company or a Subsidiary until the expiration of the forfeiture period for such Restricted Share or Restricted Share Unit Award and satisfied any and all other conditions set forth in the Award Agreement. The Committee shall determine the forfeiture period (which may, but need not, lapse in installments) and any other terms and conditions applicable with respect to any Restricted Share or Restricted Share Unit Award.
9. OTHER STOCK-BASED AWARDS
(a) The Committee may grant to any Participant one or more other stock-based Awards, including without limitation stock purchase rights, Awards of shares of Common Stock, or Awards valued in whole or in part by reference to, or otherwise based on, Common Stock. The Committee shall have sole and complete authority to determine the persons to whom and the time or times at which such Awards shall be made, the number of shares of Common Stock to be granted pursuant to such Awards, and all such other terms and subject to such conditions, not inconsistent with the terms of this Plan, as may be established by the Committee.
(b) In addition to the terms and conditions specified in the Award Agreement, Awards made pursuant to this Section 9 shall be subject to the following:
(i) Any Common Stock subject to Awards made under this Section 9 may not be sold, assigned, transferred, pledged or otherwise encumbered prior to the date on which the shares are issued, or, if later, the date on which any applicable restriction, performance or deferral period lapses;
(ii) If specified by the Committee in the Award Agreement, the recipient of an Award under this Section 9 shall be entitled to receive, currently or on a deferred basis, interest or dividends or dividend equivalents with respect to the Common Stock or other securities covered by the Award, provided that for any such Award that becomes earned based on a performance condition, any such dividends or dividend equivalents shall be earned by the Participant only to the extent the underlying Award is earned; and
(iii) The Award Agreement with respect to any Award shall contain provisions dealing with the disposition of such Award in the event of the Participant’s termination of service with the Company or its Subsidiary prior to the exercise, payment or other settlement of such Award, whether such termination occurs because of retirement, disability, death or other reason, with such provisions to take account of the specific nature and purpose of the Award.
10. ADJUSTMENTS TO REFLECT CAPITAL CHANGES; CHANGE IN CONTROL
(a) In the event of any corporate event or transaction (including, but not limited to, a change in the Common Stock or the capitalization of the Company) such as a merger, consolidation, reorganization, recapitalization, separation, partial or complete liquidation, stock dividend, stock split, reverse stock split, split up, spin-off, or other distribution of stock or property of the Company, a combination or exchange of Common
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Stock, dividend in kind, or other like change in capital structure, number of outstanding shares of Common Stock, distribution (other than normal cash dividends) to shareholders of the Company, or any similar corporate event or transaction, the Committee, in order to prevent dilution or enlargement of Participants’ rights under this Plan, shall make equitable and appropriate adjustments and substitutions, as applicable, to or of the number and kind of shares subject to outstanding Awards, the Exercise Price for such shares, the number and kind of shares available for future issuance under the Plan and the maximum number of shares in respect of which Awards can be made to any Participant in any calendar year, and other determinations applicable to outstanding Awards, including with respect to any applicable performance goals. The Committee shall have the power and sole discretion to determine the amount of the adjustment to be made in each case.
(b) In addition, in the event that the Company is a party to a Merger, outstanding Awards shall be subject to the agreement of merger or reorganization. Such agreement may provide, without limitation, for the continuation of outstanding Awards by the Company (if the Company is a surviving corporation), for their assumption by the surviving corporation or its parent or subsidiary, for the substitution by the surviving corporation or its parent or subsidiary of its own awards for such Awards, for accelerated vesting and accelerated expiration, or for settlement in cash or cash equivalents.
(c) In addition, unless otherwise specifically prohibited under applicable laws, or by the rules and regulations of any governing governmental agencies or national securities exchanges, the Committee may, in its sole discretion, at the time an Award is made hereunder or at any time prior to, coincident with or after the time of a Change in Control take one of the following actions which shall apply only upon the occurrence of a Change in Control or, if later, upon the action being taken:
(i) provide for the acceleration of any time periods, or the waiver of any other conditions, relating to the vesting, exercise, payment or distribution of an Award so that any Award to a Participant whose employment or other service relationship has been terminated as a result of a Change in Control may be vested, exercised, paid or distributed in full on or before a date fixed by the Committee, and in connection therewith the Committee may (i) provide for an extended period to exercise Options (not to exceed the original Option term) and (ii) determine the level of attainment of any applicable performance goals;
(ii) provide for the purchase of any Awards from a Participant whose employment or other service relationship has been terminated as a result of a Change in Control, upon the Participant’s request, for an amount of cash equal to the amount that could have been obtained upon the exercise, payment or distribution of such rights had such Award been currently exercisable or payable; or
(iii) cause the Awards then outstanding to be assumed, or new rights substituted therefore, by the surviving corporation in such Change in Control.
For purposes of sub-paragraphs (i) and (ii) above, any Participant whose employment or other service relationship is either (A) terminated by the Company other than for “cause,” or (B) terminated by the Participant for “good reason” (each as defined in the applicable Award Agreement), in either case upon, or on or prior to the second anniversary of, a Change in Control, shall be deemed to have been terminated as a result of the Change in Control.
11. AMENDMENT AND TERMINATION
This Plan may be amended or terminated at any time by the Board except with respect to any Awards then outstanding, and any Award granted under this Plan may be terminated at any time with the consent of the Participant. The Board may make such changes in and additions to this Plan as it may deem proper and in the best interest of the Company; provided, however, that no such action shall, without the consent of the Participant, materially impair any Award theretofore granted under this Plan; and provided, further, that no such action shall be taken without the approval of the stockholders of the Company if such stockholder approval is required under applicable law or the rules of the New York Stock Exchange. Notwithstanding any provision herein to the contrary, the repricing of Options or Stock Appreciation Rights is prohibited without prior approval of the Company’s stockholders. For this purpose, a “repricing” means any of the following (or any other action that has the same effect as any of the following): (A) changing the terms of an Option
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or Stock Appreciation Right to lower its Purchase or Exercise Price, as applicable; (B) any other action that is treated as a “repricing” under generally accepted accounting principles; and (C) repurchasing for cash or canceling an Option or Stock Appreciation Right at a time when its Purchase or Exercise Price, as applicable, is greater than the Fair Market Value of the underlying shares of Common Stock in exchange for another Award, unless the cancellation and exchange occurs in connection with a change in capitalization or similar change under Section 10 above. Such cancellation and exchange would be considered a “repricing” regardless of whether it is treated as a “repricing” under generally accepted accounting principles and regardless of whether it is voluntary on the part of the Participant. Notwithstanding anything contained herein, the Board may amend or revise this Plan to comply with applicable laws or governmental regulations.
12. GENERAL PROVISIONS
(a) Each Award granted under this Plan shall be evidenced by an Award Agreement containing such terms and conditions as the Committee may require, and no person shall have any rights under any Award granted under this Plan unless and until such Award Agreement has been executed and delivered by the Participant and the Company.
(b) In the event of any conflict between the terms of this Plan and any provision of any Award Agreement, the terms of this Plan shall be controlling.
(c) No Participant or other person shall have any claim or right to be granted an Award under the Plan. Neither the Plan nor any action taken hereunder shall be construed as giving any Participant any right to be retained in the employment or any other service relationship with the Company or any of its Subsidiaries. Unless otherwise agreed by contract, the Company reserves the right to terminate its employment or other service relationship with any person at any time and for any reason.
(d) Income realized as a result of a grant or an exercise of any Award under this Plan shall not be included in the Participant’s earnings for the purpose of any benefit plan in which the Participant may be enrolled or for which the Participant may become eligible unless otherwise specifically provided for in such plan.
(e) The obligation of the Company to sell and deliver shares of Common Stock with respect to any Award granted hereunder shall be subject to, as deemed necessary or appropriate by counsel for the Company, and the Committee shall have the sole discretion to impose such conditions, restrictions and limitations (including suspending exercises of Options or Stock Appreciation Rights and the tolling of any applicable exercise period during such suspension) on the issuance of Common Stock with respect to any Award unless and until the Committee determines that such issuance complies with (i) all applicable laws, rules and regulations and such approvals by any governmental agencies as may be required, including, without limitation, the effectiveness of a registration statement under the Securities Act of 1933, and (ii) the condition that such shares shall have been duly listed on such stock exchanges as the Common Stock is then listed.
(f) Anything in this Plan to the contrary notwithstanding, it is expressly agreed and understood that if any one or more provisions of this Plan shall be illegal or invalid such illegality or invalidity shall not invalidate this Plan or any other provisions thereof, but this Plan shall be effective in all respects as though the illegal or invalid provisions had not been included.
(g) All determinations made and actions taken pursuant to the Plan shall be governed by the laws of the State of Delaware, other than the conflict of laws provisions thereof, and construed in accordance therewith.
(h) For any Award granted under the Plan other than an Option or a Stock Appreciation Right, the Committee shall have the discretion, upon the Date of Grant or thereafter, to provide for the payment of dividend equivalents to the Participant in connection with such Award or to establish a Dividend Equivalent Account with respect to the Award, and the applicable Award Agreement or an amendment thereto shall confirm the terms of such arrangement. For purposes of payment of dividend equivalents or settlement of any Dividend Equivalent Account, the amount to be paid or otherwise settled shall be rounded to the nearest one-hundredth of a dollar ($0.01). If a Dividend Equivalent Account is established, the following terms shall apply:
2018 Proxy Statement A-11
Appendix A
(i) Dividend Equivalent Accounts shall be subject to such terms and conditions as the Committee shall determine and as shall be set forth in the applicable Award Agreement. Such terms and conditions may include, without limitation, for the Participant’s Account to be credited as of the record date of each cash dividend on the Common Stock with an amount equal to the cash dividends which would be paid with respect to the number of shares of Common Stock then covered by the related Award if such shares of Common Stock had been owned of record by the Participant on such record date.
(ii) Dividend Equivalent Accounts shall be established and maintained only on the books and records of the Company and no assets or funds of the Company shall be set aside, placed in trust, removed from the claims of the Company’s general creditors, or otherwise made available until such amounts are actually payable as provided hereunder.
(iii) Dividend equivalents credited to a Dividend Equivalent Account with respect to any Award that becomes earned based on a performance condition shall be earned by the Participant only to the extent the underlying Award is earned.
(i) As a condition to receipt of any Award under the Plan, a Participant shall agree, upon demand of the Company, to do all acts and execute, deliver and perform all additional documents, instruments and agreements which may be reasonably required by the Company, to implement the provisions and purposes of the Plan.
(j) Awards under the Plan may be granted to such employees or Non-Employee Directors of the Company and its Subsidiaries who are residing in foreign jurisdictions as the Committee in its sole discretion may determine from time to time. The Committee may adopt such supplements or subplans to the Plan as may be necessary or appropriate to comply with the applicable laws of such foreign jurisdictions and to afford Participants favorable treatment under such laws; provided, however, that no Award shall be granted under any such supplement with terms or conditions inconsistent with the provision set forth in the Plan.
(k) All notices, elections, requests, demands and all other communications required or permitted by the Committee, the Company or a Participant under the Plan must be in writing and will be deemed to have been duly given when delivered personally, or received by certified or registered mail, return receipt requested, postage prepaid, or any third party delivery service providing guaranteed delivery service at the address of the receiving party. For purposes of this provision, the Company’s and the Committee’s address shall be the Company’s principal offices, and all notices, elections, requests, demands and all other communications shall be sent to the attention of the Company’s Chief Financial Officer, and all notices, elections, requests, demands and all other communications sent to a Participant shall be sent to the Participant’s last known address as reflected in the Company’s personnel records from time to time.
(l) If a Participant or any Beneficiary entitled to receive a payment under this Plan is, in the judgment of the Committee, physically, mentally or legally incapable of receiving or acknowledging receipt of the payment, and no legal representative has been appointed for the individual, the Company may (but is not required to) cause the payment to be made to any one or more of the following as may be chosen by the Company: (i) the Participant’s designated Beneficiary (in the case of the Participant’s incapacity); (ii) the institution maintaining the Participant or the Beneficiary; (iii) a custodian under the Uniform Transfers to Minors Act of any state (in the case of the incapacity of a beneficiary); or (iv) the Participant’s or his or her Beneficiary’s spouse, children, parents or other relatives by blood or marriage. The Company is not required to ensure the proper application of any payment so made, and any such payment completely discharges all claims under this Plan against the Company to the extent of the payment.
(m) The Plan is intended to comply with the requirements of Section 409A of the Code to the extent an Award is intended to be subject to or otherwise exempt from Section 409A. Consistent with that intent, the Plan shall be interpreted in a manner consistent with Section 409A and in the event that any provision that is necessary for the Plan to comply with Section 409A is determined by the Committee, in its sole discretion, to have been omitted, such omitted provision shall be deemed included herein and is hereby incorporated as part of the Plan. In addition, and notwithstanding any provision of the Plan to the contrary, the Company
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reserves the right to amend the Plan or any Award granted under the Plan, by action of the Committee, without the consent of any affected Participant, to the extent deemed necessary or appropriate for purposes of maintaining compliance with Section 409A of the Code and the regulations promulgated thereunder.
(n) To the extent that this Plan provides for or otherwise refers to issuance of certificates to reflect the transfer of shares of Common Stock pursuant to the terms of an Award, the transfer of such shares may be effected, in the Company’s discretion, on a book entry or such other noncertificated basis, to the extent not prohibited by applicable law or the rules of any stock exchange on which such shares are listed.
(o) The Company shall have the power and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy Federal, state, local or other applicable taxes (including the Participant’s FICA obligation or other social taxes) required by law to be withheld with respect to any taxable event arising as a result of this Plan. The Company may cause any such tax withholding obligation to be satisfied by the Company withholding shares of Common Stock otherwise deliverable in connection with the Award that have a Fair Market Value on the date the tax is to be determined not to exceed the maximum statutory total tax which could be imposed on the transaction. In the alternative, the Company may permit Participants to elect to satisfy the tax withholding obligation, in whole or in part, by either (i) having the Company withhold shares of Common Stock having a Fair Market Value on the date the tax is to be determined in an amount not to exceed the maximum statutory total tax which could be imposed on the transaction or (ii) tendering previously acquired, unencumbered shares of Common Stock having an aggregate Fair Market Value in an amount not to exceed the maximum statutory total tax which could be imposed on the transaction. All such elections shall be made in writing, signed by the Participant, and shall be subject to any restrictions or limitations that the Committee, in its sole discretion, deems appropriate.
(p) To the extent permitted by applicable law and as set forth in the applicable Award Agreement, the Committee may determine that an Award shall be subject to the requirements of (i) Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (regarding recovery of erroneously awarded compensation) and any implementing rules and regulations thereunder, (ii) similar rules under the laws of any other jurisdiction, (iii) any compensation recovery policies adopted by the Company to implement any such requirements or (iv) any other compensation recovery policies as may be adopted from time to time by the Company, all to the extent determined by the Committee in its discretion to be applicable to a Participant.
2018 Proxy Statement A-13
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Electronic Voting Instructions
Available 24 hours a day, 7 days a week!
Instead of mailing your proxy, you may choose one of the voting methods outlined below to vote your proxy.
VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR.
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You may automatically receive email notification of Crane NXT., Co. news, SEC filings, and daily closing stock price by clicking “Investors” and then “Investor Alerts” atwww.craneco.com. www.cranenxt.com. Once your name has been added to our distribution list, the Company will automatically email you news and information as it is released.
You may also listen to all earnings releases, dividend releases, corporate news and other important announcements 24 hours a day, seven days a week, on demand by dialing our Crane Co. Shareholder Direct Information Line toll-free at 1-888-CRANE-CR (1-888-272-6327).
investor. You can locate your account number on your stock certificate, dividend check or plan statement.
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ANNUAL MEETING OF STOCKHOLDERS The 2023 Annual Meeting of Stockholders April 23, 2018Thisof Crane NXT, Co. will be held on June 5, 2023 at 10:00 a.m. Eastern Daylight Time virtually via the internet by accessing www.meetnow.global/MDWD6FQ To attend the virtual annual meeting, enter the control number printed in the shaded bar on the reverse side of this form at www.meetnow.global/MDWD6FQ Small steps make an impact. Help the environment by consenting to receive electronic delivery, sign up at www.envisionreports.com/CXT qIF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q CRANE NXT., CO. + Annual Meeting of Stockholders June 5, 2023 Proxy is Solicited on Behalf of theby Board of Directors.
Directors for Annual Meeting The undersigned does hereby appoint and constitute R. S. Evans, M. H. MitchellAaron W. Saak and A. M. D’IorioPaul G. Igoe and each of them, true and lawful agents and proxies of the undersigned, with full power of substitution, and hereby authorizes each of them to vote, as directed on the reverse side of this card, or, if not so directed, in accordance with the Board of Directors’ recommendations, all shares of Crane NXT., Co. held of record by the undersigned at the close of business on February 28, 2018April 10, 2023 at the Annual Meeting of Stockholders of Crane NXT., Co. to be held invirtually via the First Floor Conference Room, 200 First Stamford Place, Stamford, ConnecticutInternet at www.meetnow.global/MDWD6FQ on Monday, April 23, 2018June 5, 2023 at 10:00 a.m., Eastern Daylight Time, or at any adjournment thereof, with all the powers the undersigned would possess if then and there personally present, and to vote, in their discretion, upon such other matters as may come before said meeting.
This proxy also covers all shares, if any, for which the undersigned has the right to give voting instructions to Vanguard Fiduciary Trust Company, Trustee of the Crane NXT., Co. Savings and Investment Plan. If voting instructions for such Savings and Investment Plan shares are not received by the proxy tabulator by April 16, 2018May 31, 2023 it will be treated as directing the Plan’s Trustee to vote shares held in the Plan in the same proportion as the shares for which the Trustee has received timely instructions from others who do vote.
You are encouraged to specify your choices by marking the appropriate boxes (SEE REVERSE SIDE), but you need not mark any boxes if you wish to vote in accordance with the Board of Directors’ recommendations. The Proxies cannot vote your shares unless you sign and return this card or use the toll-free telephone number or internet website on the reverse side.
This proxy, when properly executed, will be voted in the manner directed herein. If no direction is made, this proxy will be voted FOR election of all nominees, and FOR Proposals 2 and 3, and 4.
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| 2. | Ratification of selection of Deloitte & Touche LLP as independent auditors for the Company for 2018. | ☐ | ☐ | ☐ | 3. | Say on Pay - An advisory vote to approve the compensation paid to certain executive officers. | ☐ | ☐ | ☐ | |||||||
| 4. | Approval of the 2018 Stock Incentive Plan. | ☐ | ☐ | ☐ | ||||||||||||
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You may automatically receive email notification of Crane Co. news, SEC filings, and daily closing stock price by clicking “Investors” and then “Investor Alerts” atwww.craneco.com. Once your name has been added to our distribution list, the Company will automatically email you news and information as it is released.
You may also listen to all earnings releases, dividend releases, corporate news and other important announcements 24 hours a day, seven days a week,EVERY YEAR on demand by dialing our Crane Co. Shareholder Direct Information Line toll-free at 1-888-CRANE-CR (1-888-272-6327).
You can locate your account number on your stock certificate, dividend check or plan statement.
Annual Meeting of Stockholders April 23, 2018This Proxy is Solicited on Behalf of the Board of Directors.
The undersigned does hereby appoint and constitute R. S. Evans, M. H. Mitchell and A. M. D’Iorio and each of them, true and lawful agents and proxies of the undersigned, with full power of substitution, and hereby authorizes each of them to vote, as directed on the reverse side of this card, or, if not so directed, in accordance with the Board of Directors’ recommendations, all shares of Crane Co. held of record by the undersigned at the close of business on February 28, 2018 at the Annual Meeting of Stockholders of Crane Co.Proposal 4. (Items to be held in the First Floor Conference Room, 200 First Stamford Place, Stamford, Connecticutvoted appear on Monday, April 23, 2018 at 10:00 a.m., Eastern Daylight Time, or at any adjournment thereof, with all the powers the undersigned would possess if then and there personally present, and to vote, in their discretion, upon such other matters as may come before said meeting.
This proxy also covers all shares, if any, for which the undersigned has the right to give voting instructions to Vanguard Fiduciary Trust Company, Trusteereverse side) C Non-Voting Items Change of the Crane Co. Savings and Investment Plan. If voting instructions for such Savings and Investment Plan shares are not received by the proxy tabulator by April 16, 2018 it will be treated as directing the Plan’s Trustee to vote shares held in the Plan in the same proportion as the shares for which the Trustee has received timely instructions from others who do vote.Address — Please print new address below.
You are encouraged to specify your choices by marking the appropriate boxes (SEE REVERSE SIDE), but you need not mark any boxes if you wish to vote in accordance with the Board of Directors’ recommendations. The Proxies cannot vote your shares unless you sign and return this card.
This proxy, when properly executed, will be voted in the manner directed herein. If no direction is made, this proxy will be voted FOR election of all nominees and FOR Proposals 2, 3 and 4.