Shareholder Proposals

Shareholders who desire to have proposals included in the Notice for the 20182024 Annual Meeting of Shareholders must submit their proposals to the Company at its offices on or before June 1, 2018.May 17, 2024.

The form of proxy for the Annual Meeting of Shareholders grants authority to the persons designated therein as proxies to vote in their discretion on any matters that come before the meeting, or any adjournment or postponement thereof, except those set forth in the Company’sCompany’s Proxy Statement and except for matters as to which adequate notice is received.  In order for a notice to be deemed adequate for the 20182024 Annual Shareholders’ Meeting, it must be received prior to August 15, 2018.July 31, 2024.  If there is a change in the anticipated date of next year’s annual meeting or if these deadlines change by more than 30thirty days, wethe Company will notify youshareholders of this change through ourits SEC filings.

2023 ANNUAL MEETING PROPOSALS

Proposal 1. Election of Directors

In accordance with the Company's Regulations each Director is elected for a one-year term.  The terms of the Company’s Directors expire at the 2017 Annual Meeting of Shareholders.

The Nominating and Corporate Governance Committee of the Board has nominated for reelectionre-election the seven current members of the Board of Directors: Robert P. Beech, Gary P. Kreider, John K. Morgan,Ronald D. Brown, James A. Clark, Amy L. Hanson, Chantel E. Lenard, Ernest W. Marshall, Jr. and Wilfred T. O'Gara, James P. Sferra, Robert A. Steele and Dennis W. Wells.  Proxies solicited byO'Gara. Please see the “Nominees for Board will be votedof Directors” section of this Proxy Statement for the election of these seven nominees. additional information about each nominee.

All Directorsindividuals elected at the 2023 Annual Meeting will be elected to hold office for one yeara one-year term expiring at the 2024 Annual Meeting and until their successors are elected and qualified.  In voting to elect Directors, shareholdersqualified or until their earlier resignation, retirement or removal.  Shareholders are entitled to one vote for each share held of record.  Proxies solicited by the Board will be voted FOR the election of the seven nominees. Shareholders are not entitled to cumulate their votes in the election of members of the Board of Directors. If any of the nominees become unable to serve, proxies will be voted for any substitute nominee designated by the Board.  

Recommendation of the Board of Directors

The Board of Directors recommends a vote FOR each of the seven Directorsindividuals nominated in this Proxy Statement.  The seven nominees receiving the greatest number of votes will be elected.

Proposal 2. Ratification of Appointment of Independent Registered Public Accounting Firm

The Audit Committee of the Board of Directors has appointed Grant Thornton LLP as the Company’sCompany’s independent registered public accounting firm for fiscal 2018.2024.  Grant Thornton LLP has been the independent registered public accounting firm for the Company since September 8, 2009 and had also previously served the Company in this capacity from April 2002 to December 2005.  Although not required by law, the Board is seeking shareholder ratification of its selection.appointment of Grant Thornton.  If ratification of the appointment is not obtained, the Audit Committee intends to continue the employment of Grant Thornton LLP at least through fiscal 2018.2024. However, the Audit Committee reserves the right to terminate the engagement of Grant Thornton at any time.

Representatives of Grant Thornton LLP are expected to be present at the Annual Shareholders' Meeting and will be given an opportunity to make a statement, if they so desire, and to respond to appropriate questions that may be asked by shareholders.

Audit Fees

Aggregatequestions. The aggregate fees billed to the Company by Grant Thornton LLP for the fiscal years ended June 30, 20162023 and 2017June 30, 2022 were as follows:

Audit fees represent fees and out-of-pocket expenses related to the audit of the Company’s financial statements; review, documentation and testing of the Company's system of internal controls; filing of the Form 10-K; services related to review of the Company’s quarterly financial statements and Form 10-Q’s; and attendance at the Company’s quarterly Audit Committee meetings.  Audit-related fees represent fees for consultation related to accounting and regulatory filing matters, acquisition due diligence services, and to audits of the Company’s qualified retirement plan.  matters.  Tax fees represent fees for services and out-of-pocket expenses related to tax compliance (or filing of the Company’s various income and franchise tax returns), tax planning, tax advice, and tax advice.  due diligence for acquisitions.  All other fees represent fees related to services and consultation on various planningfinancial acquisition due diligence matters.

RecommendationPlease see the “Committees of the BoardBoard” section of Directorsthis Proxy Statement for additional information about the Audit Committee.

The Board of Directors recommends a vote FOR Proposal 2. this proposal. The affirmative vote of a majority of Common Shares voting at the Annual Meeting is required to approve this proposal.

Proposal 3. Advisory Vote on Executive Compensation

The Dodd-Frank Wall Street Reform and Consumer Protection Act, enacted in July 2010, provides LSI Industries’the Company’s shareholders the opportunity at the Annual Meeting to vote on an advisory resolution on ourthe compensation of the Company’s named executive compensation program,officers. This advisory vote is commonly known as “Say-on-Pay,” as described in“Say-on-Pay”. Please see the “Executive Compensation” section beginning on page .of this Proxy Statement for additional information regarding the Compensation Committee and fiscal 2023 executive compensation. Since yourthe vote is advisory, it will not be binding uponon the Compensation Committee or the Board of Directors; however, the Compensation Committee and the Board of Directors will take the outcomeresults of the vote into account when considering futurereviewing the Company’s executive compensation arrangements.plan and programs.

OurThe Compensation Committee is committed to creating anmaintaining executive compensation programplans and programs that enables usenable the Company to attract and retain a superior management team with incentives targeted incentives to build long-term value for our shareholders.shareholder value. The Company’sCompany’s compensation package utilizesplans and programs utilize a mixturemix of base salary, short-term annual cash incentive awards and equitylong-term equity-based incentive awards to align executive compensation with ourthe Company’s annual and long-term performance. This program reflectsThese plans and programs reflect the Compensation Committee’s philosophy that executive compensation should provide greater rewards for superior performance, as well as accountability for underperformance. At the same time, we believe our program doesthe Compensation Committee believes the Company’s executive compensation plans and programs do not encourage excessive risk-taking by management. The Board of Directors believes that ourthis philosophy and practicespractice have resulted in executive compensation decisions that are appropriate and that have benefited the Company over time.

For these reasons, the Board of Directors requests ourthat shareholders approve the compensation of the Company’sCompany’s named executive officers as described in this Proxy Statement pursuant to SEC disclosure rules, including the Compensation Discussion and Analysis, the executive compensation tables and the related footnotes and narrativenarratives accompanying the tables.

Recommendation of the Board of Directors

The Board of Directors recommends a vote “FOR” Proposal 3.FOR this proposal. The Board of Directors will give due consideration to the outcomeresult of this non-binding advisory vote.

Proposal 4. Advisory Vote on Frequency of Future Advisory Votes on Executive CompensationNOMINEES FOR BOARD OF DIRECTORS

The Dodd-Frank Act also provides LSI Industries’ shareholders the opportunity at the Annual Meeting to cast a non-binding advisory vote on the frequency of future “Say-on-Pay” votes, such as Proposal 3, indicating a preferencefollowing individuals have been nominated for such votes either to be held every one, two or three years. Since your vote is advisory, it will not be binding upon the Board; however, the Compensation Committee orelection by the Board of Directors will takeas recommended by the outcome of the vote into account when determining the frequency of future Say-on-Pay votes.

After discussion, the Board has concluded that an advisory vote every year on executive compensation would be the most suitable for LSI based onNominating and Corporate Governance Committee. Each nominee is currently a number of considerations, including:

For these reasons, we believe that the analysis and recommendations from our shareholders and their proxy advisors will be more effective and valuable if the vote is held every year. However, shareholders should note that the Board of Directors and the Compensation Committee must have sufficient time to implement any changes to our executive compensation policies and procedures in response to the shareholder advisory votes and that, following any such changes, investors will require a period of time to evaluate the effectiveness of our compensation programs and the related business results.

This vote is advisory and not binding on the Company or our Board in any way. The Board and the Compensation Committee will carefully review the voting results and take such results into account in determining the frequency of future advisory votes on executive compensation. Notwithstanding the Board's recommendation and the outcome of the shareholder vote, the Board may in the future decide to conduct advisory votes on a more or less frequent basis and may vary its practice based on factors such as discussions with shareholders and the adoption of material changes to compensation programs.

Shareholders may cast a vote on the preferred voting frequency by selecting the option of every one year, two years, or three years (or abstain) when voting in response to this Proposal 4.

Recommendationmember of the Board of DirectorsDirectors.

The Board of Directors recommends a vote on Proposal 4FOR each of the seven nominees. The seven nominees receiving the greatest number of votes will be elected.

Robert P. Beech (age 70) has been a Director since July 2013. Mr. Beech is currently the President of PentaBeech, LLC, a privately held strategy and innovation advisory firm. Mr. Beech was formerly the Executive Chairman of Eccrine Systems, Inc., a privately held Cincinnati-based biotechnology company that he co-founded in 2013. Mr. Beech was engaged as Entrepreneur-in-Residence for life sciences at CincyTechUSA from 2013 to 2020. From 2004 through 2012 he was a ONE YEAR frequency for future advisory votes onsenior executive compensation. at Precigen, Inc. (formerly Intrexon Corporation), when it was a privately held biotechnology company based in Maryland. Prior to 2003, he was Chief Executive Officer of Digineer, Inc., an international healthcare IT software and services company he founded in 1986 and led until 2002. The advisory voteBoard believes that Mr. Beech’s substantial experience leading high-technology ventures as a CEO or senior corporate executive qualify him to serve on the frequencyBoard. He serves as Chair of future advisory votes on executive compensation (every one, two, or three years)the Company’s Nominating and Corporate Governance Committee and is a plurality vote, and we will consider shareholders to have expressed a non-binding preference formember of the frequency option that receives the most favorable votes. Abstentions will have the same effect as not expressing a preference.Audit Committee.

Other MattersRonald D. Brown

Approval (age 70) has been a Director since November 6, 2018. He served as Interim Chief Executive Officer of any other matters considered at the Annual Meeting, including postponement or adjournment, will requireCompany from April 23, 2018 to November 1, 2018. Mr. Brown served as Interim President & CEO of Cincinnati Incorporated from July 2020 to December 2020. Cincinnati Incorporated is a privately owned machine tool company. He served from March 2017 to 2018 as Vice Chairman of The Armor Group, Inc. which he joined in 2013 as chief operating officer. The Armor Group, Inc. is a certified woman-owned corporation that manufactures equipment and products and provides related services to a variety of industrial markets. Mr. Brown was Chairman and Chief Executive Officer of Milacron Inc. (NYSE) from 2001 to 2008 and President and Chief Operating Officer of Milacron Inc. from 1999 through 2001. Milacron is a supplier of plastic processing and metalworking fluid technologies. Mr. Brown has served as a director of A. O. Smith Corporation (NYSE) since 2001 and is the affirmative votechairperson of its Personnel and Compensation Committee and a member of its Nominating and Governance Committee. A. O. Smith manufactures and markets comprehensive lines of water heaters and water treatment products. He also joined the James Advantage Funds Trust in 2014 as an independent trustee and serves on its Audit and Governance and Compensation Committees. The Board believes that Mr. Brown’s experience as the chief executive officer and chairman of a majoritypublicly held company provides valuable insight as to the issues and opportunities facing the Company. Further, he has international and manufacturing experience with The Armor Group and in his previous positions at Milacron. In addition, Mr. Brown has experience as a chief financial officer and a corporate attorney. The Board also believes that his legal background makes him well-suited to address legal and governance requirements of Common Shares entitled to vote at the meeting.SEC and NASDAQ. Mr. Brown serves on the Company’s Executive and Compensation Committees.

MANAGEMENTJames A. Clark (age 59) has been Chief Executive Officer since November 2018 and a Director since January 2019. Mr. Clark previously served as President and CEO at Alliance Tire Americas, Inc. (a KKR portfolio company) and as Managing Director at Dunes Point Capital.  Mr. Clark has over 25 years of experience as a senior operating executive in global manufacturing and product services companies. Prior to joining Dunes Point Capital, he served as Vice President of Strategy and Corporate Development at Rexel Holdings USA, where he was responsible for the strategic planning and M&A activities for REXEL’s $3.5 billion of revenues in U.S. operations. Prior to joining REXEL, Mr. Clark served in several senior executive positions with United Technologies Corporation (UTC) and General Electric (GE), including President of Electronic Security Products Group and CMO- VP of Global Sales for GE Security. He holds a BA in Business from The State University of New York – Regents and participated in postgraduate study programs at Northwestern University - Kellogg School of Business and the University of Virginia - Darden School of Business. The Board believes that Mr. Clark's substantial management and operating experience, as well as his position as our Chief Executive Officer, qualify him to serve on the Board. Mr. Clark is a member of the Company’s Executive Committee.

DirectorsAmy L. Hanson (age 65) has been a Director of the Company since January 2019. Ms. Hanson is currently the CEO of Amy Hanson Advisory Services, a retail management strategic services consulting firm, since April 2016. Ms. Hanson also serves on the boards of Messer, Inc. (one of the of the Midwest’s largest construction companies), Strivve, Inc. (formerly Switch Inc.), a Seattle based fin-tech start up, Charge Enterprises, Inc., a company engaged in telecommunications and electrical vehicle charging infrastructure, and Credit First National Association (CFNA), a bank subsidiary of Bridgestone Americas.  Prior to that she was an Executive OfficersVice President and Corporate Officer for Macy’s Inc., a leading department store retailer with over 680 stores throughout the US for over 30 years. Ms. Hanson had responsibilities for leading financial, credit and customer services for Macy’s. During her career at Macy’s, she also had direct responsibilities for procurement, real estate, store planning, design and construction as well as serving as Vice Chairman for Macy’s North. The Board believes that Ms. Hanson’s insight and experience in finance, strategic planning, and leadership through times of change, acquisitions and mergers for Macy’s qualify her to serve on the Board, as well as chair the Audit Committee, and as a member of the Nominating and Corporate Governance Committee.

Chantel E. Lenard (age 54) has been a Director of the Company since June 2020. Ms. Lenard presently serves as a Lecturer of Marketing in the MBA program at the University of Michigan Ross School of Business. Ms. Lenard retired from Ford Motor Company (NYSE: F) in 2017, having served as the top marketing executive for Ford in both the U.S. and Asia. From 2013 to 2017, Ms. Lenard held the position of U.S. Chief Marketing Officer, leading the organization’s pricing, promotions, media, digital marketing, product strategy, and consumer experience activities. From 2010 to 2013, Ms. Lenard was based in Shanghai, China, as Vice President of Marketing for Ford’s Asia Pacific and Africa operations, where she led the marketing activities for 11 countries across the region. In addition to her marketing roles, Ms. Lenard held a number of leadership positions in strategy, sales, finance, and purchasing during her 25-year career with Ford. Ms. Lenard presently serves as a member of the Board of Directors of TTM Technologies Inc. (NASDAQ: TTMI) and executive officers of LSI Industries are:Charge Enterprises (NASDAQ: CRGE), and served as a Director for Uni-Select, Inc. (TSX: UNS) until its acquisition by LKQ Corp. in 2023. The Board believes that Ms. Lenard’s substantial marketing and management experience, particularly her leadership positions in strategy, sales, finance, and purchasing, qualify her to serve on the Board as well as on the Audit Committee and Compensation Committee.

Ernest W. Marshall, Jr. (age 54) was elected as a member of the Board effective August 17, 2022. Mr. Marshall, Jr. has served as the Executive Vice President and Chief Human Resources Officer at Eaton Corporation located in Cleveland, Ohio since July 2018. He was Vice President of Human Resources of GE Aviation at the General Electric Company from August 2013 to April 2018. Mr. Marshall, Jr. has served as a director of Republic Bancorp (Nasdaq: RBCAA) since 2020.The Board believes that Mr. Marshall, Jr.’s substantial experience in human resources management qualifies him to serve on the Board as well as on the Compensation Committee.

Information

Wilfred T. O'Gara (age 66) has been a Director since January 1999 and was appointed Chairman in August 2018. Mr. O’Gara is the Managing Director of Buffalo Fork Holdings, LLC, an investment company. He previously served as Chief Executive Officer of Isoclima SpA from July 2017 to August 2018. Isoclima SpA produces transparent armor and other specialized glass and polycarbonate products for military and civilian armored vehicles. Prior to joining Isoclima, Mr. O'Gara served as Vice Chairman of The O’Gara Group, a security and defense related firm, from 2016 until July 2017 and he was the President and Chief Executive Officer from 2003 to 2017. Mr. O’Gara has been identified as an “audit committee financial expert” under SEC guidelines given his understanding of accounting and financial reporting, disclosures and controls. The Board believes that Mr. O’Gara’s independence from management, experience as a successful principal executive and his designation as an audit committee financial expert make his service integral to the Board. He serves on the Company’s Executive Committee and the Nominating and Corporate Governance Committee.

Board Qualifications and Succession Planning

The Nominating and Corporate Governance Committee periodically reviews the skills, experience and characteristics required of Board members in the context of the current make-up of the Board and screens and recommends nominees for director to the full Board. Its assessment includes the skills of Board candidates, such as an understanding of technologies pertinent to the Company’s businesses, manufacturing, marketing, finance, regulation and public policy, experience, age, diversity and ability to provide strategic insight and direction on the Company’s key strategic initiatives. In addition to skills and experience, Board candidates are considered based upon various criteria, such as their personal integrity and judgment, business and social perspective, and concern for the long-term interests of the Company’s shareholders. After receiving recommendations for nominations from the Committee, the Board nominates candidates for Director. The Committee, or other members of the Board of Directors, may identify a need to add new members to the Board of Directors with specific skills or to fill a vacancy on the Board. At that time, the Committee would initiate a search, seeking input from Board members and senior management and, to the extent it deems appropriate, engaging a search firm. An initial qualified candidate or a slate of qualified candidates may be identified through this process and presented to the Committee for its evaluation and approval. The Committee would then seek full Board approval of the selected candidate.

Board Diversity Matrix

Our Nominating and Corporate Governance Committee is committed to promoting diversity on our Board of Directors. We have surveyed our current directors and asked each director to self-identify their race, ethnicity, and gender using one or more of the below categories. The results of this survey as of September 1,8, 2017 2023 are included in the matrix below.

The following are the Company’s current executive officers (not including our CEO, James A. Clark, whose biographical information is set forth above under “Nominees for Board of Directors”) and the named executive officers as identified in the compensation tables in the Compensation Discussion and Analysis section of this proxy statement.

Dennis W. WellsJeffery S. Bastian is(age 63) has been Vice President and Chief ExecutiveAccounting Officer since June 2017, and President.prior to that he was the Company’s Vice President and Controller since 2004. He has served the Company for thirty years in various finance and accounting roles. Prior to LSI, he was with Touche Ross and Company from 1986 to 1989. He graduated from Eastern Kentucky University with a BS degree in Environmental Sciences and obtained an MBA from Wright State University.

Thomas A. Caneris (age 61) joined the Company as its Senior Vice President, Human Resources and General Counsel and Secretary in August 2019. He was appointed Chief Operating Officer on October 1, 2014 and promoted to CEO on October 22, 2014. He was appointednamed as an Executive Vice President on October 29, 2014. Mr. Wells was appointed to the LSI Board in August 2015.2021. Prior to his service with LSI,joining the Company, Mr. WellsCaneris served as the Chief Operating Officer of Glantz Dynamic Solutions, a privately-owned supplier of digital signage supplies since 2013. Prior to that, Mr. Wells served as Chief Operating Officer of Fulham, Inc., a privately-owned global manufacturer and supplier of lighting solutions, from 2010 to 2013. Prior to that, Mr. Wells served as aSenior Vice President at Acuity Brands Lighting, Inc. and Schneider Electric.Human Resources, General Counsel & Secretary of PharMerica Corporation, a pharmacy services provider from August 2007 to April 2019. Mr. Caneris received his J.D. from the University of Cincinnati College of Law.

James E. Galeesewas appointed (age 66) joined the Company as its Executive Vice President and Chief Financial Officer of the Company effectivein June 12, 2017. Mr. Galeese, from 2014 to June 2017, served as Vice President, Chief Financial Officer, and as a Director of privately held Universal Trailer Holding Corporation (manufacturer of trailers for the hauling requirements of businesses and individuals). He was with Philips Electronics NV from 1998 to 2014 as Senior Vice President and Chief Financial Officer for its North American Lighting business and its Electronics business. Prior to that Mr. Galeese served in the financial Controllership organization of Square D Company / Schneider Electric. He graduated from Miami University with a degree in Business Administration and obtained an MBA from Xavier University.

Ronald S. Stowell has served as Chief Financial Officer from December 1992 to June 2017, at which time he was appointed Chief Financial Officer Emeritus. He was appointed Treasurer in November 1993 and Vice President in November 1997.  From 1985 to November 1992, Mr. Stowell served as Corporate Controller of Essef Corporation (a NASDAQ listed company), headquartered in Chardon, Ohio, a manufacturer of high performance composite and engineered plastics products.

Shawn M. Toney served as President of the LSI Lighting Segment from August 2014 to August 2017 and as Senior Vice President of LSI Lighting Sales since June 2009. Mr. Toney is the nephew of Ronald S. Stowell. Mr. Toney’s employment with the Company terminated on August 15, 2017.

Jeff A. Croskey has served as President of the LSI Graphics Segment since October 2015 when he joined the Company. Prior to that, he was Vice President and General Manager of Creative Sign Designs of Tampa, Florida from February 2010 to October 2015. Previous employers include Image International Corp., McNicholas Company, and The Goodyear Tire & Rubber Company.

Andrew J. Foerster was appointed Executive Vice President and Chief Technology Officer effective March 2, 2015. From 2010 to 2015, Mr. Foerster served as Residential and Wiring Devices Division Engineering Director at Eaton Corporation. Before his service with Eaton, Mr. Foerster held various positions with Creative Energy Control LLC, Masco Technical Innovations, Piller Inc., Schneider Electric (Square D Company) and General Electric. Mr. Foerster began his career as a nuclear submarine officer in the U.S. Navy.

Howard E. Japlon was appointed Executive Vice President, Human Resources and General Counsel effective March 13, 2017. He was also appointed Secretary of the Company effective April 26, 2017. Prior to joining LSI, Mr. Japlon served as Vice President, General Counsel & Secretary of ACE Hardware Corporation from May 2013 to March 2017. Prior thereto he served as Vice President & General Counsel of RG Steel, LLC from April 2011 to December 2012 and as Sr. Vice President and General Counsel of Schneider Electric Americas. Mr. Japlon received his undergraduate degree from Fordham University, New York City and a J.D. from the University of Illinois College of Law, Champaign - Urbana.

Jeffery S. Bastian was appointed Vice President and Chief Accounting Officer effective June 13, 2017. He had been Vice President and Corporate Controller since 2004. During Mr. Bastian’s 28-year tenure with the Company, he has assumed increasing levels of responsibility in the Accounting and Controllership functional areas. Mr. Bastian is a Certified Public Accountant and started his career with Touche Ross & Company.

Paul T. FosterSECURITY OWNERSHIP joined LSI on February 9, 2015

The following table sets forth the beneficial ownership of the Company’s Common Shares as of September 6, 2023 by each person or group known by the Company to beneficially own more than five percent of the outstanding Common Shares, each Director, each Named Executive Vice PresidentOfficer, and all Directors and Named Executive Officers as a group. Unless otherwise indicated, the holders of LSI Business Systemall shares shown in the table have sole voting and served as Secretaryinvestment power with respect to such shares. In determining the number and percentage of shares beneficially owned by each person, shares that may be acquired by such person pursuant to stock options within sixty days of September 6, 2023 are deemed outstanding for purposes of determining the number of outstanding shares for such person and are not deemed outstanding for such purpose for any other shareholder. Unless otherwise indicated below, the address of each beneficial owner is c/o LSI Industries from March 2015 to April 2017.  Mr. Foster was previously responsible for the Company’s Lean Integration activities and for its Human Resources Department. He is currently responsible for the Company’s foreign sourcing activities and distribution strategy. Prior to joining the Company, Mr. Foster served as Vice President Product Development and Vice President Supply Chain for Fulham Company, Inc. from 2010 to 2015.  Prior to Fulham, Mr. Foster held the position of Vice President Sourcing for Acuity Brands Lighting from 1998 to 2008. , 10000 Alliance Road, Cincinnati, Ohio 45242.

*Less than 1%

Robert P. Beech has been a Director since July 2013.(1) Based on Schedule 13G/A filed on or about February 10, 2023.

(2) Based on Schedule 13G filed on or about February 13, 2023.

(3) Based on Schedule 13D/A filed on or about September 23, 2021. Includes 1,580,360 shares held directly by Accretive Capital Partners, LLC (“ACP”) and 61,071 shares held directly by Accretive Capital Catalyst, LLC (“ACC”), of which Accretive Capital Management, LLC (“ACM”) is the manager, and Mr. BeechFearon is currently the Executive Chairmanmanaging member of Eccrine Systems, Inc., a privately held, Cincinnati-based biotechnology company that he co-foundedAccretive Capital Management, LLC. ACM shares voting and dispositive power with respect to 1,641,431 shares. ACP shares voting and dispositive power with respect to 1,580,360 shares. ACC shares voting and dispositive power with respect to 61,071 shares. Fearon shares voting and dispositive power with respect to 2,287,998 shares.

(4) Amounts in 2013. Mr. Beech has been engaged as Entrepreneur-in-Residence for biosciences at CincyTechUSA since 2013. From 2004 through 2012 he was a senior executive at Intrexon Corporation, when it was a privately held biotechnology company based in Maryland. Prior to 2003, he was CEOthe table include shares of Digineer, Inc., an international healthcare IT softwarecommon stock which may be acquired upon the exercise of stock options which have vested or will have vested within 60 days of September 6, 2023: Clark – 576,271; Galeese – 209,574; Caneris – 195,332; Bastian – 108,714; Directors and services company he founded in 1986 and led until 2002. The Board believes that Mr. Beech’s substantial experience leading high-technology venturesNEOs as a CEO or senior corporate executive qualify him to serve on the Board, as well as the Audit, Compensation, and Nominating and Corporate Governance Committees.

Gary P. Kreider has been a Director since April 2002 and was elected Chairman in November 2014.  For over five years Mr. Kreider had been a senior partner in the Cincinnati law firm of Keating Muething & Klekamp PLL, the Company’s outside counsel.  He is now retired from Keating Muething & Klekamp PLL. His primary practice areas were securities law, mergers and acquisitions, and general corporate law, and he had been with Keating Muething & Klekamp since 1963.  Effective October 1, 2005 Mr. Kreider no longer had a vote or partnership interest in the firm’s earnings although his affiliation with the firm continues.  Mr. Kreider’s present activities consist of personal investing, serving as trustee of various trusts and as a director of LSI.  He has also served as an adjunct professor of law in securities regulations at the University of Cincinnati, College of Law and is a past chairman of the Ohio State Bar Association Corporation Law Committee.  The Board believes that Mr. Kreider’s legal experience as a prominent corporate and securities practitioner and his corporate and public-company board experience make him well qualified to serve on the Board, which must deal with the myriad issues presented by virtue of the Company being publicly-traded.

John K. Morgan has been a Director of the Company since April 20, 2016. Mr. Morgan served as the Chairman, President and Chief Executive Officer of Zep Inc., a specialty chemicals company, from October 2007 until his retirement in June 2015. From July 2007 to October 2007, he served as Executive Vice President of Acuity Brands and President and Chief Executive Officer of Acuity Specialty Products, just prior to its spin-off from Acuity Brands, Inc. From 2005 to July 2007, he served as President and Chief Executive Officer of Acuity Brands Lighting. He also served Acuity Brands as President and Chief Development Officer from 2004 to 2005, as Senior Executive Vice President and Chief Operating Officer from 2002 to 2004, and as Executive Vice President from 2001 to 2002. Mr. Morgan has served on the Board of Directors of Wesco International, a provider of electrical, industrial, and communications MRO and OEM products, construction materials, and advanced supply chain management and logistics services, since 2008 and is currently the Chairman of Wesco's Compensation Committee. The Board believes that Mr. Morgan’s insight and experience with corporate governance, executive compensation, business and operating management issues, gained through experience at various levels of corporate management and on boards, and his status as an independent director, qualify him to serve on the Board, as well as the Compensation Committee.

Wilfred T. O'Gara has been a Director since January 1999.  Mr. O’Gara has been Chief Executive Officer of Isoclima SpA, a company that makes transparent armor and other specialized glass and polycarbonate products, since 2017. Mr. O'Gara was the President and Chief Executive Officer of The O'Gara Group, Inc., a security and defense related firm, from 2003 to 2017.  Mr. O’Gara has been identified as an “audit committee financial expert” under SEC guidelines given his understanding of accounting and financial reporting, disclosures and controls. The Board believes that Mr. O’Gara’s independence from management, experience as a successful principal executive and his designation as an audit committee financial expert make his service integral to the Board as well as to the Audit, Compensation, and Nominating and Corporate Governance Committees given the frequency with which these bodies must deal with complex matters.group – 1,089,891.

James P. Sferra shared in the formation of the Company and has been a Director since 1976.  Mr. Sferra served as Corporate Vice President of Manufacturing from November 1989 to November 1992, and as Executive Vice President-Manufacturing from November 1992 to March 2015.  Prior to that, he served as Vice President-Manufacturing of LSI Lighting Systems, a division of the Company.  In 1996 he was appointed Secretary of the Company and served in that capacity until March 2015.  The Board believes that Mr. Sferra is uniquely qualified to serve on the Board given his long-standing tenure with the Company and his familiarity with the integral manufacturing component of its operations.

Robert A. Steele has been a Director since July 18, 2016. Mr. Steele retired from Procter & Gamble in 2011 as the company’s Vice Chairman Health Care. During his 35-year tenure with Procter & Gamble, he served in a variety of executive leadership positions, including Vice Chairman Global Health and Well-being, Group President Global Household Care, and Group President of North American Operations. Mr. Steele has served on the board of Berry Plastics Group since 2014, where he is a member of its Nominating & Corporate Governance Committee. Mr. Steele was previously a member of the Board of Directors of Beam Inc., Keurig Green Mountain and Kellogg Company. The Board believes that Mr. Steele’s insight and experience with corporate governance, leadership and operating experience in a public company, and his status as an independent director qualify him to serve on the Board of Directors.

Delinquent Section 16(a) Beneficial Ownership Reporting ComplianceReports

Section 16(a) of the Securities Exchange Act of 1934 requires the Company’sCompany’s officers, Directors, and persons who own more than ten percent of the Company’s Common Shares to file reports of ownership and changes in ownership with the Securities and Exchange Commission.  Such persons are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file within two days of a transaction in shares of the Company.  Based solely upon its review of copies of such forms received by it, and upon written representations from certain reporting persons that no Form 5 was required for those persons, the Company believes that during fiscal 20172023 all filing requirements were met except that a Form 4 was filed late by three business days by Robert Steele with respect to the acquisition of 920 shares.met.

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

This Compensation Discussion and Analysis section discussesreviews the Company’s compensation philosophy and analyzes theexecutive compensation awarded to, earned by, or paidand arrangements for fiscal 2023 that apply to the executive officers set forthCompany’s current Named Executive Officers (“NEOs”):

Fiscal 2023 Financial Performance Summary and Growth

The Company experienced organic revenue growth of nine percent (9%) in fiscal 2023, despite the on-going headwinds of supply chain disruptions lingering from the COVID-19 pandemic in the Summary Compensation Tablefirst half of fiscal 2023 and continuing inflationary pressures. The Company achieved impressive results by also growing adjusted Net Income, adjusted EBITDA and adjusted Earnings Per Share (“EPS”) while also significantly improving Return on page 18 (collectively, the “named executive officers” or “NEOs”Net Assets (“RONA”).  It also discusses the principles underlying our policies and decisions.

Executive Summary

In spite of difficult market conditions and inflationary pressures, fiscal 2017 represented a year of significant progress for LSI. We continued to invest in our LED Lighting portfolio and Digital Signage business with positive results. Our lean efforts are providing meaningful savings, although masked by a soft market and significant inflation. We completed the highly- strategic acquisition of Atlas Lighting Products, broadening our scope into the stock and flow portion of the market. Our targeted internal investments are also generating sales growth in important, fast growing segments.

Key performance highlights for fiscal 2017:

As a result of challenging financialThe Company also reduced long-term debt by over 50% to $35.2 million. The Company was able to build on the strong fiscal 2022 performance results for fiscal 2017, and to demonstrate our commitment to pay-for-performance alignment, our CEO’s annual cash incentive was down 76% from last fiscal year. Our other NEOs saw decreases to their annual cash incentive payouts of between 54% and 69%. In addition, the performance-based stock options issueddeliver another excellent year in fiscal 2017 were forfeited due2023, which resulted in higher levels of compensation paid to NEOs, including short term incentive payments to NEOs at the Company’s failure to achieve the minimum performance goals. To continue to show alignment with shareholders, there were no base salary increases for fiscal year 2018 due to fiscal year 2017 performance.maximum achievement level of 150%.

Overview of the Company's Executive Compensation Philosophy and Design

Our pay-for-performance philosophyThe Company’s executive compensation program is designed to compensate executivesdrive a pay-for-performance culture. The program strives to align corporate performance with executive pay, delivering competitive total compensation upon the achievement of the Company’s performance objectives. The achievement of those objectives in turn will create long-term shareholder value. The executive compensation program is also designed to attract, retain and motivate leaders who focus on the creation of long-term shareholder value. The Company’s pay-for-performance philosophy for their contributions toward achieving the Company's operating and business goals. Through the useexecutive compensation program employs a mix of compensation elements consisting of base salary, annual cashshort-term incentives and long-term equity incentives (inthat link executive compensation to Company performance for the formpurpose of stock optionsclearly aligning executive interests with shareholder interests.

Responsiveness to 2022 Say-on-Pay Vote

At the 2022 Annual Meeting of Shareholders, approximately 99% percent of the votes cast were in favor of the advisory vote to approve executive compensation. We believe that these vote results, together with feedback received during the Company’s ongoing shareholder engagement efforts, reflect that shareholders are pleased with the structure of the Company’s compensation programs put into place by the Compensation Committee for fiscal year 2022. The Compensation Committee considered this support when reviewing compensation for fiscal year 2023, particularly with respect to the design and structure of the Company’s executive compensation program. The Compensation Committee continued with the same structure used in 2022 that includes two equity-based components: performance share units (“PSUs”) and restricted stock units) we seek to attract and retain skilled and experienced senior executives. Our compensation program isunits (“RSUs”). The award of PSUs was intended to aligncreate long-term performance alignment for the economic interests of our executive officers with those of our shareholders.team based on achieving critical operating performance results based on three-year goals related to return on net assets (“RONA”) and cumulative adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”) over a three-year performance cycle. The fiscal 2023 PSU awards will cliff vest on the third anniversary grant date if specified three-year RONA and EBITDA objectives are achieved. 

Who overseesWith respect to fiscal year 2024 incentive compensation, the Company’sCompensation Committee continued its focus on aligning the Company’s executive compensation program?program with shareholder value creation and continued to use PSUs as a meaningful component of executive compensation.

Compensation Committee Oversight of Executive Compensation Program

The Compensation Committee oversees our totalthe Company’s executive compensation philosophy and the design and implementation of its executive compensation programs, equity incentive plan,program. The Committee reviews and is responsible for reviewing and approving,approves, or recommendingrecommends that the Board of Directors approve, all componentselements of ourthe Company’s executive compensation program. NewAny new executive compensation plans and programsplan or program must be approved by the full Board based on recommendations made bythe recommendation of the Compensation Committee. The Compensation Committee reviews and recommendssets the compensation of our Chief Executive Officer, and our independent directors, acting as a group, approve the amounts to be awarded to him. After considering the assessment and recommendation of the Chief Executive Officer (“CEO”).

The CEO annually reviews the performance of the other NEOs. After considering the CEO’s assessment and recommendations, the Compensation Committee determines and approves the compensation of all other named executive officers.

Our Chief Executive Officer annually reviews the performance of the other named executive officers, after which the Chief Executive Officer presents his conclusions and recommendations to the Compensation Committee for approval.NEOs. The Compensation Committee has absolute discretion as to whether it approvesapprove the recommendations of the Chief Executive OfficerCEO or makesto make adjustments as itthe Committee deems appropriate. The Chief Executive Officer may alsoCEO and other executive officers from time-to-time work with the Compensation Committee to gather and compile data needed for benchmarking purposes or for other analysis conducted by the Compensation Committee’s independent consultants and advisors.

The Compensation Committee engaged theor Committee’s independent compensation consulting firm, of Pay Governance LLC (“Pay Governance”) to act as the Committee’s independent compensation consultant to assist the Committee with establishing the fiscal year 2017 compensation program. The Committee assessed the independence of Pay Governance and concluded that no conflict of interest existed that would prevent Pay Governance from providing independent advice to the Committee regarding executive compensation matters. Pay Governance delivered to the Committee and the Chief Executive Officer of the Company advisory reports that benchmarked the annual base salaries and other elements of total compensation of the Company’s NEOs. Additionally, Pay Governance provided advice to the Committee and the Chief Executive Officer of the Company as to the structure, content and performance metrics of the fiscal 2017 STIP (short term incentive plan – cash bonus) and the fiscal 2017 LTIP (long-term incentive plan – stock compensation) for the Company’s NEOs.

In March 2017, the Compensation Committee retained Frederic W. Cook & Co., Inc. (“FW Cook”), an independent compensation consulting firm,.

The Compensation Committee retained FW Cook to provide advice on executive compensation matters, including the types and levels of executive compensation and the competitiveness of ourthe Company’s executive compensation programs as comparedprogram relative to our competitors for executive talent. FW Cook reports directly to the Compensation Committee and interacts with management at the Compensation Committee’s direction. The Compensation Committee and its chairperson have regular opportunities to meet with FW Cook in executive sessionssession without management present. The Compensation Committee considered the independence of FW Cook in light of current SEC rules and NASDAQ listing standards and concluded that no conflict of interest exists that would prevent FW Cook from independently advising the Compensation Committee.

What are the results of last year’s say-on-pay vote?

At our 2016 Annual Shareholders’ Meeting, LSI held an advisory vote on the compensation of its NEOs, commonly referred to as a say-on-pay vote. Our shareholders supported the compensation of our named executive officers, with over 96% of votes cast in favor of our 2016 say-on-pay resolution. Our Compensation Committee considered this high level of stockholder support when determining the compensation for fiscal 2017, and decided not to make any significant changes to the structure of our compensation program. The Committee concluded that the Company’s compensation program should continue to emphasize the performance, alignment and retention objectives of the Company.

How does theCompensation Committee evaluateCompensation Committee Evaluation of Executive Compensation Philosophy and update LSI’s executive compensation philosophy and structure?

In setting our compensation program, the Committee strives to enhance the Company’s overall fundamental objective of providing long-term value for our shareholders and employees.  The Committee also places emphasis on retaining current management and incentivizing key managers to align their interests to make them consistent with the Company’s strategies.  The Committee believes that the interests of management and shareholders can be more closely aligned by providing executives with competitive levels of compensation that will enable us to attract and retain key executives by rewarding exceptional individual performance, and by tying executive pay to overall corporate performance.Design

The Compensation Committee reviews competitive market data for comparable executive level positions in the market. External market data is used by the Compensation Committee as a point of reference in its executive pay decisions in conjunction withcompensation decisions. The Committee also reviews the Company’s financial performance, individual NEO performance, and individual performance data. In considering the Company’s competitive environment, theenvironment. The Committee reviewsconsiders compensation information disclosed by a peer group of comparatively sizedcompanies and industry reference companies with which we competethe Company competes for business and executive talent andtalent. The Committee also considers information derived from published survey data that compares the elements of each executive officer’sNEO’s target total direct compensation to the market information for executives with similar roles. The Committee’s independent compensation consultantFW Cook compiles this information for the Committee and size-adjustsadjusts the published survey data to reflect ourthe Company’s revenue size in relation to the survey participants to more accurately reflect the scope of responsibility for each executive officer.NEO.

The Compensation Committee’s prior compensation consultant, Pay Governance, worked with the Committee to develop a peer group of public companies of similar size and in the same or a similar industry for purposes of executive compensation pay benchmarking. The peer group companies, which operate in similar or related industries, or which serve similar primary markets or which are comparable in size to LSI, consisted of the following companies:

AAON Inc.

Ameresco, Inc.

AZZ Inc.

Communications Systems Inc.

Continental Materials Corp.

Daktronics Inc.

Lighting Science Group Corp.

Littelfuse Inc.

Maxwell Technologies, Inc.

Orion Energy Systems, Inc.

Planar Systems Inc.

Power Integrations Inc.

Powell Industries, Inc.

PowerSecure International

Pulse Electronics Corp.

Revolution Lighting Technologies

Universal Display Corp.

Vicor Corp.

The Compensation Committee, with input from its current independent compensation consultant FW Cook selected a new peer group for fiscal 2018. The peer companies were selected primarily based upon the following criteria: (i) similar business operations/industry/competitors for investor capital, (ii) sales and market capitalization between approximately 1/3 and 3 to 4 times ourthe Company’s sales and market capitalization, and (iii) competitors for executive talent. The Compensation Committee, with input from FW Cook, continued to use the same peer group that was used in the prior year, except for CPI Aerostructures, Inc. which was delisted and Encore Wire Corporation, which was removed because its revenue was deemed too large for inclusion in the peer group.

For fiscal 20182023 compensation purposes, our peer group consisted of the following 18 companies:13 companies.

Today, the compensation program consists of four elements: a competitive salary benchmarked against a peer group as well as industry reference companies; a short-term incentive plan tiedPractices Implemented to the Company’s annual financial performance results and the employee’s personal performance; a long-term incentive plan utilizing equity in various forms; and customary benefits. The overall program is designed to reward executives with above-market pay for results which exceed established goals and objectives. The annual short-term incentive plan rewards the achievement of corporate and business segment results with metrics that include revenue and profitability. The long-term equity plan consists of a blend of service-based equity (stock options and restricted stock units), as well as performance-based equity (stock options for which the vesting is contingent on meeting pre-established performance goals). Equity compensation is designed to reward performance and encourage stock ownership by management. The company does not offer any meaningful executive perquisites or benefits, other than customary benefits provided to all employees. There are no tax gross-up provisions as part of the compensation structure.Serve Shareholder Long-term Interests

Adjustments to base salaries are generally made as appropriate after a review of competitive benchmarks and based on Company and individual performance. The short-term incentive plan is designed to reward performance while mitigating compensation associated risks.

What are some of the practices we have implemented to serve our shareholders’ long-term interests?

Below wefollowing tables summarize certain executive compensation program and governance practices – boththat the practices we have implemented toCommittee believes will drive financial performance and the practices we avoid because we do not believe they would serve our shareholders’ long-term shareholder interests.

What is

Elements of Executive Compensation

As more fully described below, the Company’s executive compensation program designedconsists of four elements: a competitive base salary benchmarked against a peer group of companies as well as industry reference companies and other relevant market data; a short-term cash incentive plan tied to reward?

Ourthe Company’s annual financial performance results and the NEO’s individual performance; a long-term incentive plan utilizing equity in various forms; and customary benefits. The Company’s executive compensation program is designed to reward bothexecutives with above-market pay for results which exceed the Company’s target performance goals and objectives.

The Committee has engaged FW Cook to assist in benchmarking each NEO’s total direct compensation opportunity, including all elements of executive compensation. The assessment also factors in peer group and industry reference company data and other relevant market data.

In general, the Company seeks to provide target compensation opportunities that are competitive with its peer group companies and individual performance, measuredother compensation data sources, as provided by overall Company resultsFW Cook. There may be instances which indicate the need to pay above target level compensation and the attainment of individual goals.  Each year our Compensation Committee decides whether or notCompany is prepared to grant annual cash incentives to our corporate officers, including the NEOs.do so within reasonable limits. The Committee retains significant discretion with respectapplies a collective, subjective evaluation of the above factors to awarding annual cash incentives. However, these annual cash incentives are designed to rewarddetermine the attainment throughout the yearcompensation level of certain personal goals, as well as the Company’s financial goals. These goals can be based on results achieved by the Company as a whole and/or results achieved by each NEO in light of the Company’s business segments.  performance and such NEO’s individual performance.  The Committee does not utilize a particular objective formula as a means of establishing annual base salary levels or any other element of compensation.

What are the elements of compensation?

The following table below summarizes the elements of ourthe NEO compensation program for our named executive officers.

program.

Each of these elements of compensation is described below in further detail.

The Compensation Committee reviews the risk profile of the pay elements of the Company’sCompany’s executive compensation program, including the performance driversmetrics and objectives used in connection with incentive awards, andawards. The Committee considers the risks ana NEO might be incentivized to take with respect to such elements.elements, metrics and objectives. When establishing the mix among these elements, the Committee is careful notcarefully calibrates the elements to encourageavoid encouraging excessive risk taking. Specifically, the performance drivers contained in theThe Company’s executive compensation program have beenis balanced between annual and long-term incentive compensation to ensure that both components are alignedalignment with short-term objectives and consistent with ourthe Company’s long-term business plan and shareholder interests. The Committee also determines that ourthe overall mix of equity-based awards has been allocated to promote an appropriate combination of retention and incentive and retention objectives.

The Committee believes that the Company’sCompany’s executive compensation program does not incentivizeencourage the NEOs to engage in business activities or other behavior that might threaten the value of the Company or the investments of its shareholders.

shareholder interests. The Committee continues to monitorregularly monitors and evaluate on a regular basisevaluates the mix of compensation, especially equity compensation, awarded to the NEOs and the extent to which such compensation aligns theNEO interests of the NEOs with those of our shareholders.shareholder interests. In connection with this practice, the Committee has, from time to time, reconsidered the structure of the Company’sCompany’s executive compensation program and the relative weighting of various elements of pay.  Please refer to ourthe discussion under “Payin the “Compensation Mix” on page 17.section.

Base SalarySalary

The Compensation Committee reviews theeach NEO’s base salary, the scope of the NEOs and each such officer’sNEO’s level of responsibility and potential, as well as base salary levels offered by competitors and the overall marketplace.  Each executive officer’s particular business segmentBase salary is reviewed (if applicable),set at a level that is market competitive in order to attract and its contributionretain highly qualified leaders. Base salary reflects the NEO’s scope of responsibility, breadth of experience, ability to the overall resultscontribute to, and impact corporate performance, and a demonstrated track record of the Company is assessed.individual performance.

The Committee applies a collective, subjective evaluation of the above factors to determine the annual base salary level of its NEOs in light of the Company’s performance and, in certain cases, the performance of its business segments.  The Committee does not utilize a particular objective formula as a means of establishing annual base salary levels.

For fiscal 2017, the Compensation Committee increasedadjusted the annual base salaries of the NEOs in a rangeFiscal 2023 as follows in light of 2%strong performance outcomes in FY22 and to 6.5%, which was in linealign base salaries with increases approvedthe market median for substantially all LSI non-union employees.their respective positions.