UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14ASCHEDULE14A
(RULE 14A-101)
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
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MYERS INDUSTRIES, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
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1293 South Main Street — Akron, Ohio 44301
March 20, 20182019
Dear Fellow Shareholders,
On behalf of the Board of Directors of Myers, I am pleasedIt is a privilege to update you about our work on behalf of Myers shareholders as Chairman of its Board of Directors. I am writing to update you on our work.
During the shareholders of the company, in my secondpast year, as Chairman.
The Myers management team is relatively new, with CEO David Banyard having assumed that role in December 2015 and CFOwe had a few transitions among our executive team. Matteo Anversa having joinedleft his position to return to the automotive industry, joining a larger company as CFO. We wish him well in December 2016. Theyhis new role. We are ably supported by a strong corporate team offortunate that our longtime Chief Accounting Officer (and former interim CFO) Kevin Brackman Vice President of Investor Relations and Treasurer Monica Vinay, and Kevin Gehrt, Vice President of Human Resources.
As withwas able to step seamlessly into this role in December. Last year, we were also pleased to have Andrean Horton join the management team, your Board is a relatively newMyers team as well. FiveChief Legal Officer. Her prior experience serving as Chief Legal Officer and Secretary of a global enterprise, combined with her expertise in handling complex legal matters, make her an excellent addition to our executive team. Prior to this position being created, we were fortunate to have the current ninewise counsel of Mark Helm from Munger, Tolles and Olson.
To succeed the two directors havewho did not stand for re-election at last year’s annual meeting, we appointed two new directors during the year: Ron DeFeo and Lori Lutey. Ron, who joined in August, is the former Executive Chairman and CEO of Kennametal, Inc. and was also Chairman and CEO of Terex. He brings strong operations expertise to the board along with insights that come from successfully running large, global industrial companies. Lori joined the board in September, after a distinguished career as CFO of Schneider National and VP, Finance at FedEx Services. She strengthens the pastboard’s accounting and financial expertise, given her extensive experience in new product and customer pricing analysis. Both Ron and Lori are already making very positive contributions to the board. Our eight independent directors -- three years; two board membersof whom are women. women -- contribute a broad range of expertise in strategy, M&A, operations, financials, and capital allocation.
We will continue to reviewincorporate best practices in our corporate governance. For example, we conduct annual elections for all directors; ensure there is an independent board chair and upgradecommittees comprised exclusively of independent board members; and utilize the services of an independent third party to facilitate annual self-evaluations of our board performance.
The committee system is central to our governance compensation plans, and corporate controls and compliance. Our objective is to ensure that Myers outperforms companies of similar and larger size, and we believe that we are meeting that goal.
As of this year’s Annual Meeting, our board will be shrinking as John Crowe and Dan Lee have both decided not to stand for re-election. John joined the board in 2009 and has distinguished himself as the chair of the Corporate Governance and Nominating Committee through both our CEO and board transitions over the past few years. After a nine-year career with us, he has decided to retire. Dan joined in 2016 in his second stint with our board but has decided to focus more on his other business interests. We thank both John and Dan for their commitment to Myers.
Our Committees are a critical part of our governance structure, and all of them have a key role in the organization.structure. Each of the Audit and Compensation Committees reviews and approves all proposed charges and adjustments (affecting earnings and employee compensation) at their respective committee meetings on a quarterly basis. During
Our Compensation Committee continues to work to optimize the year, thecompany’s compensation program, ensuring that management’s short- and long-term incentives are properly aligned with shareholders’ interests. The Governance and Nominating Committee was responsible for successfully recruiting our new directors, and also is charged with overseeing board training and evaluation. The Audit Committee extended its contractcontinued to work closely with our external auditors,outside independent accounting firm and internal financial staff, including our new CFO, to ensure the quality of our financial controls. We also created a Finance Committee as an ad hoc committee of the board in 2018 to review optimal financial structures for the company.
Myers sold new stock in August, which strengthenedimproved the balance sheet and substantially lowered the company’s leverage ratio (several directors purchased stock in the open market after this relationshipoffering). We have been careful stewards of this new capital and lowered our costs substantially. The Compensation Committee hired a new consultant, and we will continue to be diligent in evaluating shareholder-friendly formsare keenly aware of executive and employee compensation.relative valuations of alternative uses of these funds.
Just as we ask much of our management team, as
As a board, we hold ourselves accountable to a high standard of excellence.the highest standards. We continue to self-evaluate. For example,As previously noted, we use an independent party to evaluate our peers,every board member, each committee, and the board as a whole. To maximize the effectiveness of these independent evaluations, we discuss thethis feedback—in both board and committee and board meetings—meetings — and establish objectives for continuous improvement. In addition,Just as we promote individualvalue peer evaluations, the board believes director education.education is valuable. Last fall, for example, one meeting began with a presentation on the entireboard’s proper role in M&A, delivered by a corporate director who is a leading M&A lawyer and former CEO.
Your board spent half a day during the beginning of a scheduled board meeting in an intensive education effort highlighting current topics affecting corporate governance and other current topics, including cybersecurity and tax policy, affecting the company and Corporate America.
The board continues to workworks closely with management to evaluate and define Myers’ enterprise strategy. We are confident that the company has made significant strides in implementing its strategy, which was articulatedfirst presented to the investment community in early 2017. Buildingtwo years ago. Our long-term strategy is guided by three key operating principles: a winning culture is a key partniche market focus; flexible operations through the use of executingan asset-light business model; and strong cash flow growth. More recently, we announced actions required for the successful transformation of our strategy. Distribution segment.
As a board, we have been deeply involved with management in defining Myers’ culture as one that is results-characterized by a “winning” mentality and action-oriented.a results-based orientation. We are committed to transparency and candor, while remaining flexible, and consistently attentive to both our customers’ needs.needs and our employees’ safety. We also strongly believe inwant our employees to act and feel like owners, while operating with the highest possible ethical standards and promoting diversity of all kinds throughout the organization.
Environmental stewardship and corporate responsibility are likewise very important to the company — and something about which several shareholders have inquired. We incorporate environmental consciousness into all aspects of our organization.operations by, among other measures, recycling and reprocessing plastic scrap in our factories. We believealso manufacture returnable packaging products and implement and maintain recycling programs. Of course, we conserve energy whenever we can, and encourage our customers to focus on sustainability, as well. At the beginning of each board meeting, we review the previous quarter’s safety record (which, thankfully, remains well below the industry average).
Effective last year, we modified the method (but not the actual dollar equivalent) of director pay. For a director’s stock retainer, rather than issuing the stock portion of our annual retainer to directors at the end of a year of service (at the annual meeting) we began issuing restricted stock at the beginning of the year of service (when directors are elected at the annual meeting), which will not vest until the first anniversary of the grant. In our case, directors received their restricted stock grant for their 2018 term of service at the annual meeting date in April 2018 (at a price above $24/share) and such shares will vest in April 2019. This change was made to be more consistent with current best practices. In this year’s proxy statement, it will appear that stressing such an environmentthe stock portion of our director retainer doubled. In next year’s proxy statement, the “director stock retainer” portion will be approximately half of the amount appearing this year. I wanted to alert you to what is, important for customers and employees alike, as well as for long-term shareholder value.in effect, a bookkeeping change, even though there is no actual economic change in the stock retainer portion paid to directors.
For the secondthird consecutive year, we reached out to our shareholders. Specifically, last fall we contacted all shareholders who owned more than 1% of our company to solicit their opinions on our corporate governance and compensation practices. From September through January, Compensation(Compensation Committee Chair Sarah Coffin, Treasurer Monica Vinay, and I spokeoffered to meet with each shareholder owning more than 1% of the company). This year, we met with shareholders representing about 33% of Myers’ shares (last year, shareholders who owned about 65% of the company wished to speak with us). We continue to appreciate these frank conversations with our shareholders, who offered usand once again gained valuable insights about their opinions on their governance views. We have already taken action as a result of these conversations -- and will continue to do so.
views on other matters.
We are alsowere gratified by the results of the “say on pay” proposal at last year’s annual meeting, when more thanalmost 25 million shares voted for and only about 220,000260,000 shares voted against. This was a substantial improvement over last yeartwo years ago when about 6.7 million shares voted against this same “say on pay” proposal.
WeAs always, we welcome feedback from our shareholders. Shareholders may send communication by email to governance@myersind.com,, or by mail or courier delivery addressed as follows: Board of Directors (or Committee Chair, Board Member, or Non-Management Directors, as the case may require), c/o Chief FinancialLegal Officer and Corporate Secretary, Myers Industries, Inc., 1293 South Main Street South, Akron, Ohio 44301, as outlined more fully outlinedcompletely in our Communication Procedures for Interested Parties and Shareholders available on the Company’scompany’s website www.myersind.com.www.myersindustries.com.
Although we recognize
In last year’s letter, I was pleased to report that it is a very short period of time, we are cognizant of and encouragedMyers’ stock outperformed during 2017 (up by about 40%, compared to almost 22% for the S&P 500). Unfortunately, Myers’ stock price performance during 2017; Myers stock began the year trading at $14.30/share and ended at $19.50/share. Including dividends, the total shareholder return for Myerswas disappointing last year wasyear: down by about 40% -- compared to almost 22% return20% vs. about -4% for the S&P 500 Index. Of course, this is not a prediction of future performance, and500. We continue to believe that one year is not an appropriate gauge of long-term performance. But we are certainly pleased by the market’s reaction, to date, to our results and articulated strategy.
Please rest assured that yourYour board remains very active and engaged, and that we begin 20182019 with renewed enthusiasm and a continuedfirm commitment to building long-term shareholder value at Myers. Thank you for your support of the company and confidence in our efforts on your behalf.
Sincerely,
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F. Jack Liebau, Jr. |
Chairman of the Board |
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The Board of Directors of Myers Industries, Inc. (“Myers Industries” or the “Company”) has fixed the close of business on March 1, 20187, 2019 as the record date for the determination of shareholders entitled to notice of and to vote at the Annual Meeting.Meeting of Shareholders to be held on April 24, 2019 (the “Annual Meeting”). This Proxy Statement, together with the related proxy card and our 20172018 Annual Report to Shareholders, is being mailed to our shareholders on or about March 20, 2018.2019. To be sure that your shares are properly represented at the Annual Meeting, whether or not you intend to attend the Annual Meeting via live webcast or in person, please complete and return the enclosed proxy card, or follow the instructions to vote by telephone or internet, as soon as possible.
If you have any questions or need assistance in voting your shares, please contact our Investor Relations Department at (330) 761-6212.
By Order of the Board of Directors, |
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R. DAVID BANYARD |
President and Chief Executive Officer |
Akron, Ohio
March 20, 20182019
THE 20172018 ANNUAL REPORT TO SHAREHOLDERS ACCOMPANIES THIS NOTICE
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to be held on April 25, 2018 (the “Annual Meeting”): Meeting: This Proxy Statement and the Company’s 20172018 Annual Report to Shareholders are available on Myers Industries’ website at at:
http://investor.myersindustries.com/investor-relations/financial-information/default.aspx.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Date: | Wednesday, April |
Time: | 9:00 A.M. |
Location: | The live webcast of the meeting will be available on the Investor Relations section of the Company’s website at www.myersindustries.com and the meeting will be held in person at: 1554 South Main Street, Akron, OH 44301
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Record Date: | March |
Items of Business
1. To elect the | 4. To consider such other business as may be properly brought before the meeting or any adjournments thereof. |
2. To
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The Board of Directors recommends that you vote “FOR” each of the director nominees included in Proposal No.Number 1 and “FOR” each of Proposal Nos.Numbers 2 3 and 4.3. The full text of these proposals is set forth in the accompanying Proxy Statement.
How to Vote
| By Telephone |
| By Internet |
| By Mail |
| Via Webcast or In Person |
You may vote by calling 1-800-690-6903. | You may vote online at www.proxyvote.com. | You may vote by completing and returning the enclosed proxy card. | All shareholders are cordially invited to attend the Annual Meeting via live webcast or in person. | ||||
PROXY STATEMENTSTATEMENT SUMMARY
Below are the highlights of important information you will find in this Proxy Statement. As this is only a summary, we request you please review the full Proxy Statement before casting your vote.
General Meeting Information | |
| Wednesday, April 9:00 a.m. EDT |
Place | In-person: 1554 South Main Street, Akron, OH 44301 Online: The live webcast of the meeting will be available on the Investor Relations section of the Company’s website at www.myersindustries.com |
Record Date | March |
Voting |
Shareholders as of the record date are entitled to vote. Each share of common stock is entitled to one vote for the election of directors and one vote for each of the proposals to be voted on.
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Voting Matters and Board Recommendations | |||||
Proposal | Voting Options | Vote Required for Approval | Effect of Abstentions and Broker | Board Recommendation | |
| Election of Directors | “FOR” all nominees or “WITHHOLD” your vote for one or more of the nominees | Nominees for election as directors who receive the greatest number of votes cast |
| FOR EACH NOMINEE |
2. | Advisory Vote to Approve Executive Compensation | “FOR” or “AGAINST” or “ABSTAIN” from voting | Affirmative vote of the holders of a majority of the common stock represented in person or by proxy at the Annual |
| FOR |
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Appointment of Independent Registered Public Accounting Firm
| “FOR” or “AGAINST” or “ABSTAIN” from voting | Affirmative vote of the holders of a majority of the common stock represented in person or by proxy at the Annual |
| FOR | |
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PROXY STATEMENT SUMMARY (CONTINUED)
Recent Highlights and Achievements
The Company’s management and its Board of Directors of the Company (the “Board” or “Board of Directors”) have together developed a strategic vision for the Company.Company, which they have focused on implementing for the past several years. This long-term strategy is guided by three key operating principles:
Niche market focus
Flexible operations through the use of an asset-light business model
Strong cash flow growth
The Company’s mission is to instill a culture where safety and efficiency are part of every aspect of the business and where employees are empowered to act like owners. The Company’s management and Board of Directors work hand-in-hand to develop our strategic vision and together review the Company’s strategy and performance periodically throughout the year.
Myers Industries has made meaningful progress executing its long-term strategy. The Company’s key achievements in 20172018 included, among others:
Strong commercial execution in three key niche markets:
Double-digitGenerated double-digit year-over-year sales growth in our Consumer and Food & Beverage marketsmarket, leading to an increase in net sales of 6.6% in our Material Handling Segment and 3.6% for the enterprise
High single-digit year-over-yearLaunched a new product in our Consumer market that is expected to drive mid-single-digit sales growth in our Vehiclethat market in 2019
Progress towards transforming into an asset-light operating modelExpanded our gross margin by 280 basis points to 31.6% as a result of pricing initiatives and 80/20 and lean continuous improvement actions, combined with the benefits of the strategic footprint realignment that we completed in 2017
Restructured ourImproved adjusted operating footprint eliminating three facilitiesincome from $31.5 million in 2017 to $40.4 million in 2018, a 28.5% increase (excluding $33.3 million of charges related to the 2015 sale of the Company’s Lawn and generating labor, overhead and transportation savings
Divested our Brazil operations, which were non-strategic and generated negative cash flowGarden business)
Reduced total debt by $38.5$74.2 million, or 49.2%
Reduced working capitalour leverage ratio to 1.2x as defined by $10 million despite higher sales volumeour current debt agreements
Increased cash flow fromprovided by operating activities of continuing operations by 45% vs. 201622.9% to $49$60.4 million, driven by a reduction in working capital of $5.9 million, or 21.6%, despite higher sales
Established an acquisition pipeline, giving us the ability to deploy future cash flow towards higher growthCompleted public offering of 4.6 million shares of our common stock at $18.50 per share with net proceeds of approximately $79.5 million.
In addition, we also announced a set of strategic transformation actions for our Distribution segment. The actions are expected to be implemented by the end of 2019 and include a new go-to-market strategy, a contribution margin improvement initiative, and an overhead and logistics optimization plan. The goal of the transformation is to reach a 10% EBITDA margin run-rate in 2020.
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PROXY STATEMENT SUMMARY (CONTINUED)
Governance Highlights
Myers Industries is committed to applying sound corporate governance practices. We believe sound governance practices are in the best interests of our shareholders and strengthen accountability within the organization.
Annual Elections |
| Yes |
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| Stock Ownership Guidelines for Executives |
| Yes |
Independent Board Chair |
| Yes |
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| Anti-Hedging and Anti-Pledging |
| Yes |
Board Independence |
| 89% |
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| Code of Conduct and Ethics |
| Yes |
Committee Independence |
| 100% |
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| Board Member Recruiting Guidelines |
| Yes |
Number of Financial Experts |
| 4 |
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| Executive Sessions of the Board |
| Yes |
Board Diversity |
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| Anonymous Reporting |
| Yes |
Board and Committees Complete Annual Self-Evaluations |
| Yes |
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| Clawback Policy |
| Yes |
Over-Boarding Policy |
| Yes |
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Myers Industries’ commitment to sound corporate governance practices has been illustrated through a number of actions taken over the years, as shown below.
2018 | |||
• | Shareholders approved Employee Stock Purchase Plan | ||
• | Continued shareholder outreach efforts | ||
• | Board evaluations facilitated by outside counsel | ||
• | Enhanced director education | ||
2017 |
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• | Shareholders approved Amended and Restated 2017 Incentive Stock Plan | ||
• | Enhanced proxy disclosure | ||
• | Continued shareholder outreach efforts | ||
• | Adoption of an over-boarding policy for directors | ||
• | Board evaluations conducted by a third party | ||
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2016 |
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• | Board evaluations conducted by a third party | ||
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2009
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• | Adoption of the Board Member Recruiting Guidelines | ||
• | Adoption of a clawback policy | ||
• | Adoption of Stock Ownership Guidelines | ||
• | Appointment of an independent chairman | ||
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PROXY STATEMENT SUMMARY (CONTINUED)
Director Nominees
You are being asked to vote on the election of the following seven director candidates. The candidates listed below are the nominees recommended by the Governance and Nominating Committee (the “Governance Committee”) and approved by the Board to serve for a one-year term. Detailed information on each director is available starting on page 9.
Two of our current directors, John Crowe and Daniel Lee, who served as directors during 2017, are not standing for re-election to the Board. Both Mr. Crowe and Mr. Lee will continue to serve as a director of the Company until the 2018 Annual Meeting. Effective with the Annual Meeting, the size of the Board of Directors will be reduced from nine (9) to seven (7) directors. The Company thanks Messrs. Crowe and Lee for their service on the Board and thanks Mr. Crowe for his leadership as Chair of the Corporate Governance and Nominating Committee.
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Name | Age | Director Since | Experience | Independent | Audit | Compensation | Corporate Governance | Age | Director Since | Experience | Independent | Audit | Compensation | Governance | ||
R. David Banyard | 49 | 2016 | President, CEO, Myers Industries. Inc. | No |
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| 50 | 2016 | President, CEO, Myers Industries. Inc. | No |
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Sarah R. Coffin | 65 | 2010 | Former CEO, Aspen Growth Strategies, LLC | Yes | ● | CHAIR |
| 66 | 2010 | Former CEO, Aspen Growth Strategies, LLC | Yes | ● | CHAIR |
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Ronald M. De Feo | 67 | 2018 | Former President, Chief Executive Officer and Executive Chairman of Kennametal, Inc. (NYSE: KMT) and a founding partner of Nonantum Capital Partners, LLC | Yes |
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William A. Foley | 70 | 2011 | Chairman of the Board and CEO, Libbey Inc. (NYSE: LBY) | Yes |
| ● | ● | 71 | 2011 | Chairman of the Board and CEO, Libbey Inc. (NYSE: LBY) | Yes |
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F. Jack Liebau, Jr. Chairman* | 54 | 2015 | Former President and CEO of Roundwood Asset Management | Yes | ● | ● | ● | 55 | 2015 | Former President and CEO of Roundwood Asset Management | Yes | ● | ● | ● | ||
Bruce M. Lisman** | 71 | 2015 | Former Chairman of the Global Equity Division, JP Morgan Chase & Co. (NYSE: JPM) | Yes |
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Bruce M. Lisman | 72 | 2015 | Former Chairman of the Global Equity Division, JP Morgan Chase & Co. (NYSE: JPM) | Yes |
| ● | CHAIR | |||||||||
Lori Lutey | 54 | 2018 | Former Executive Vice President and Chief Financial Officer of Schneider National (NYSE: SNDR) | Yes | ● |
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Jane Scaccetti | 63 | 2016 | CEO and founding partner of Drucker & Scaccetti | Yes | ● |
| ● | 64 | 2016 | CEO and founding partner of Drucker & Scaccetti | Yes | ● |
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Robert A. Stefanko | 75 | 2007 | Former Chairman and EVP of Finance and Administration of A. Schulman, Inc. (NASDAQ) | Yes | CHAIR | ● |
| 76 | 2007 | Former Chairman and EVP of Finance and Administration of A. Schulman, Inc. (NASDAQ) | Yes | CHAIR | ● |
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*Mr. Liebau is an ex officio member of each of the Company’s committees.
**Mr. Lisman will be named the Chair of the Corporate Governance and Nominating Committee following Mr. Crowe’s retirement.
Board Overview
Myers Industries has an experienced and effective Board focused on shareholder value creation. The Board is currently composed of nine members, eight of whom are independent. The charts below highlight the Board’s composition and experience.
PROXY STATEMENT SUMMARY (CONTINUED)
Board Composition
Director Qualifications
Directors (number / %)
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| Skill | Directors (number / %)
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9 |
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9 |
| 100% |
| Public Board Experience |
| 100% |
| Executive Leadership | |
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8 |
| 88% |
| Investor Relations | |||||
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7 |
| 78% |
| M&A | |||||
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7 |
| 78% |
| Global Experience |
| 78% |
| Other Public Board Experience | |
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6 |
| 66% |
| Brand and Marketing |
| 67% |
| Investor Relations | |
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3 |
| 33% |
| Mergers & Acquisitions | |||||
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5 |
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3 |
| 33% |
| Brand and Marketing | |||||
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4 |
| 44% |
| Financial Expert |
| 44% |
| Audit Committee Financial Expert | |
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4 |
| 44% |
| Industry Experience / Operational Expertise | |||||
5 |
| 56% |
| Industry Experience / Operational Expertise | |||||
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PROXY STATEMENT SUMMARY (CONTINUED)
Shareholder Engagement
Shareholder Outreach
We believe engaging in shareholder outreach is an important element of strong corporate governance. In 2017, in a continuation of the Company’s shareholder outreach efforts in 2016, membersOne of our Boardkey priorities is conducting robust engagement with our shareholders in order to provide transparency into our business and determine which issues are important to our shareholders. Participants in our engagement programs include executive management, acted on this belief and contacted the top 12 shareholders who own 1% or greater of outstanding shares and represent approximately 71% of total shares outstanding. Following this outreach, conference calls were conducted with 4 of the 12 shareholders initially approached who had indicated interest in having a conversation with our management and directors, whose ownership represented approximately 33% of total shares outstanding. During our outreach meetings, we discussed with shareholders corporate governance matters (including the Company’s shareholder outreach efforts through discussions and through the Company’s proxy statement), the correlation between the Company’s executive compensation practices and the Company’s strategy, safety, environmental and social policies and reporting practices of the Company and other items of shareholder interest.
The Company values the input received from these discussions with shareholders. Following these conversations, the Company has continued to emphasize the importance of safety in our operations and has renewed its focus on enhancing sustainable business practices and incorporating environmental consciousness throughout our operations. Additionally, the Compensation Committee of the Company regularly evaluates the Company’s compensation program and considers shareholders’ input when developing changes to the compensation program.
In addition, each spring, we mail all shareholders a copy of the Company’s Annual Report and Proxy Statement.
At any time during the year shareholders may access our Annual Report, Proxy Statement, financial presentations, and corporate governance guidelines at www.myersindustries.com. Shareholders may contact any director, committee of the board, non-management director or the Board through the following:
via U.S. Mail at:
Myers Industries, Inc.
c/o Corporate Secretary
1293 South Main Street
Akron, Ohio 44301
via e-mail at:
governance@myersind.com
A toll-free hotline has also been established if an interested party wishes to contact a director, a committeemembers of the Board a non-management director or the Board by phone. The number is (877) 285-4145of Directors and is available worldwide 24 hours a day, seven days a week.
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PROXY STATEMENT SUMMARY (CONTINUED)
Executive Compensation Overview
Myers Industries’ executive compensation program, set forth by the Compensation Committee, is designed to implement our executive pay philosophy to:Investor Relations personnel. Our methods of engagement include:
Attract and retain talented and experienced executives and other key employeesEarnings conference calls
Ensure that the actual compensation paid to our executive officers is aligned and correlated with financial performance and changes in shareholder value (“pay for performance”)Investor conferences
Motivate our executive officers to achieve short-termOne-on-one investor meetings and long-term Company goals that will increase shareholder valueone-on-one investor conference calls
Reward executives whose knowledge, skillsOutreach calls and performance are crucial to our success
Compensation Practices
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PROXY STATEMENT SUMMARY (CONTINUED)
Elements of Compensation for 2017
Our 2017 executive compensation program was designed to reinforce the relationship between the interests of our named executive officers (or “NEOs”) and our shareholders. The objectives and key characteristics of each element of our 2017 executive compensation are summarized below:
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PROXY STATEMENT SUMMARY (CONTINUED)
2017 NEO Pay Mix
2017 CEO Compensation Mix
2017 CFO Compensation Mix
2017 CAO Compensation Mix
* “Fixed” compensation includes salary and service-based restricted stock; “variable” compensation includes annual bonuses, performance stock units and stock options; “long-term” compensation includes stock options, performance stock units and restricted stock, and “short-term” compensation includes salary and annual bonuses.
x
TABLE OF CONTENTS OF PROXY STATEMENT
1
Corporate Governance and Compensation Practices and Policies
The Board of Directors is committed to maintaining soundmeetings with shareholders’ corporate governance and compensation structures that promote the best interests of our shareholders. departments
Corporate Governance Guidelines
The Company has adopted “Corporate Governance Guidelines” and a “Code of Business Conduct and Ethics” for the Company’s directors, officers and employees. Each of our corporate governance policies is available on the “Corporate Governance” page accessed from the “Investor Relations” page of our website at www.myersindustries.com.
Corporate Governance and Compensation Practices
Below is a discussion of our corporate governance and compensation practices and policies.
Shareholder OutreachClawback Policy
Yes
Over-Boarding Policy
Yes
Myers Industries’ commitment to sound corporate governance practices has been illustrated through a number of actions taken over the years, as shown below.
iii
PROXY STATEMENT SUMMARY (CONTINUED)
Director Nominees
You are being asked to vote on the election of the following director candidates. The candidates listed below are the nominees recommended by the Governance and Nominating Committee (the “Governance Committee”) and approved by the Board to serve for a one-year term. Detailed information on each director is available starting on page 9.
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| Committee Memberships | ||||
Name | Age | Director Since | Experience | Independent | Audit | Compensation | Governance | ||
R. David Banyard | 50 | 2016 | President, CEO, Myers Industries. Inc. | No |
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| ||
Sarah R. Coffin | 66 | 2010 | Former CEO, Aspen Growth Strategies, LLC | Yes | ● | CHAIR |
| ||
Ronald M. De Feo | 67 | 2018 | Former President, Chief Executive Officer and Executive Chairman of Kennametal, Inc. (NYSE: KMT) and a founding partner of Nonantum Capital Partners, LLC | Yes |
| ● | ● | ||
William A. Foley | 71 | 2011 | Chairman of the Board and CEO, Libbey Inc. (NYSE: LBY) | Yes |
| ● | ● | ||
F. Jack Liebau, Jr. Chairman* | 55 | 2015 | Former President and CEO of Roundwood Asset Management | Yes | ● | ● | ● | ||
Bruce M. Lisman | 72 | 2015 | Former Chairman of the Global Equity Division, JP Morgan Chase & Co. (NYSE: JPM) | Yes |
| ● | CHAIR | ||
Lori Lutey | 54 | 2018 | Former Executive Vice President and Chief Financial Officer of Schneider National (NYSE: SNDR) | Yes | ● |
| ● | ||
Jane Scaccetti | 64 | 2016 | CEO and founding partner of Drucker & Scaccetti | Yes | ● |
| ● | ||
Robert A. Stefanko | 76 | 2007 | Former Chairman and EVP of Finance and Administration of A. Schulman, Inc. (NASDAQ) | Yes | CHAIR | ● |
| ||
*Mr. Liebau is an ex officio member of each of the Company’s committees.
Board Overview
Myers Industries has an experienced and effective Board focused on shareholder value creation. The Board is currently composed of nine members, eight of whom are independent. The charts below highlight the Board’s composition and experience.
iv
PROXY STATEMENT SUMMARY (CONTINUED)
Board Composition
Director Qualifications
Directors (number / %)
|
| Skill | ||
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|
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9 |
| 100% |
| Executive Leadership |
|
|
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|
7 |
| 78% |
| Other Public Board Experience |
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|
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6 |
| 67% |
| Investor Relations |
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|
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|
3 |
| 33% |
| Mergers & Acquisitions |
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|
|
5 |
| 56% |
| Global Experience |
|
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|
|
3 |
| 33% |
| Brand and Marketing |
|
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|
4 |
| 44% |
| Audit Committee Financial Expert |
|
|
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|
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5 |
| 56% |
| Industry Experience / Operational Expertise |
v
PROXY STATEMENT SUMMARY (CONTINUED)
Shareholder Engagement
One of our key priorities is conducting robust engagement with our shareholders in order to provide transparency into our business and determine which issues are important to our shareholders. Participants in our engagement programs include executive management, members of the Board of Directors and Investor Relations personnel. Our methods of engagement include:
Earnings conference calls
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Committee Independence: All members of the Company’s Audit Committee, Compensation Committee and Corporate Governance and Nominating Committee (the “Governance Committee”) have been determined to be independent directors. In addition, the Board has determined that the members of the Audit Committee and Compensation Committee meet the additional independence criteria required for such committee membership under the applicable NYSE listing standards
Investor conferences
One-on-one investor meetings and one-on-one investor conference calls
Outreach calls and meetings with shareholders’ corporate governance departments
Other Relationships: Except as set forth in this Proxy Statement, neither the Company nor any of the Board nominees or any of their associates have or will have any arrangements or understandings with any person with respect to any future employment by the Company or its affiliates or with respect to any future transactions to which the Company or any of its affiliates will or may be a party
Director Resignation Policy
Pursuant to the Company’s director resignation policy, in an uncontested election, any incumbent director who receives a greater number of votes “Withheld” or “Against” his or her election than votes “For” his or her election (and with respect to such incumbent director’s election at least 25% of the Company’s shares outstanding and entitled to vote thereon were “Withheld” or voted “Against” the election of such director) shall submit an offer of resignation to the Board of Directors
The Governance Committee will then recommend to the Board whether to accept or reject any tendered resignations, and the Board will decide whether to accept or reject such tendered resignations
The Board’s decision will be publicly disclosed in a Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”)
If an incumbent director’s tendered resignation is rejected, he or she will continue to serve until his or her successor is elected, or until his or her earlier resignation, removal from office, or death. If an incumbent director’s tendered resignation is accepted, then the Board will have the sole discretion to fill any resulting vacancy to the extent permitted by the Company’s Amended and Restated Code of Regulations
3
The Company has adopted a policy that the maximum number of public company boards on which a non-CEO director may sit is five (including the Company’s board) and the maximum number of public company boards on which a CEO director may sit is three (including the Company’s board).
Board Role in Risk Oversight
The Board annually reviews the Company’s strategic plan, which addresses, among other things, the Company’s risks and opportunities. Certain areas of oversight are delegated to the relevant Committees of the Board and the Committees regularly report back on their deliberations. This oversight is enabled by reporting processes that are designed to provide visibility to the Board about the identification, assessment, monitoring and management of enterprise-wide risks. Every year, management conducts an enterprise-wide risk assessment of the Company and each of its business segments and presents the assessment to the Board for review. The focus of this assessment includes a review of strategic, financial, operational, compliance, reputational and technology (IT) objectives and risks for the Company. In addition:
Audit Committee: The Audit Committee maintains primary responsibility for oversight of risks and exposures pertaining to the accounting, auditing and financial reporting processes of the Company
Compensation Committee: The Compensation Committee maintains primary responsibility for risks and exposures associated with oversight of the administration and implementation of our compensation policies
Governance Committee: The Governance Committee maintains primary responsibility for risks and exposures associated with corporate governance and succession planning
Each committee also considers the reputational risk implicated by the oversight responsibilities described above.
Clawback Policy
Yes
Over-Boarding Policy
Yes
Myers Industries’ commitment to sound corporate governance practices has been illustrated through a number of actions taken over the years, as shown below.
2018 | |||
• | Shareholders approved Employee Stock Purchase Plan | ||
• | Continued shareholder outreach efforts | ||
• | Board evaluations facilitated by outside counsel | ||
• | Enhanced director education | ||
2017 | |||
• | Shareholders approved Amended and Restated 2017 Incentive Stock Plan | ||
• | Enhanced proxy disclosure | ||
• | Continued shareholder outreach efforts | ||
• | Adoption of an over-boarding policy for directors | ||
• | Board evaluations conducted by a third party | ||
2016 | |||
• | Established an email address through which shareholders can reach out to the Board directly | ||
• | Outreach with shareholders representing approximately 75% of outstanding shares | ||
• | Board evaluations conducted by a third party | ||
2009 - 2015 | |||
• | Adoption of the Board Member Recruiting Guidelines | ||
• | Adoption of a clawback policy | ||
• | Adoption of Stock Ownership Guidelines | ||
• | Appointment of an independent chairman | ||
iii
PROXY STATEMENT SUMMARY (CONTINUED)
Director Nominees
You are being asked to vote on the election of the following director candidates. The candidates listed below are the nominees recommended by the Governance and Nominating Committee (the “Governance Committee”) and approved by the Board to serve for a one-year term. Detailed information on each director is available starting on page 9.
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| Committee Memberships | ||||
Name | Age | Director Since | Experience | Independent | Audit | Compensation | Governance | ||
R. David Banyard | 50 | 2016 | President, CEO, Myers Industries. Inc. | No |
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Sarah R. Coffin | 66 | 2010 | Former CEO, Aspen Growth Strategies, LLC | Yes | ● | CHAIR |
| ||
Ronald M. De Feo | 67 | 2018 | Former President, Chief Executive Officer and Executive Chairman of Kennametal, Inc. (NYSE: KMT) and a founding partner of Nonantum Capital Partners, LLC | Yes |
| ● | ● | ||
William A. Foley | 71 | 2011 | Chairman of the Board and CEO, Libbey Inc. (NYSE: LBY) | Yes |
| ● | ● | ||
F. Jack Liebau, Jr. Chairman* | 55 | 2015 | Former President and CEO of Roundwood Asset Management | Yes | ● | ● | ● | ||
Bruce M. Lisman | 72 | 2015 | Former Chairman of the Global Equity Division, JP Morgan Chase & Co. (NYSE: JPM) | Yes |
| ● | CHAIR | ||
Lori Lutey | 54 | 2018 | Former Executive Vice President and Chief Financial Officer of Schneider National (NYSE: SNDR) | Yes | ● |
| ● | ||
Jane Scaccetti | 64 | 2016 | CEO and founding partner of Drucker & Scaccetti | Yes | ● |
| ● | ||
Robert A. Stefanko | 76 | 2007 | Former Chairman and EVP of Finance and Administration of A. Schulman, Inc. (NASDAQ) | Yes | CHAIR | ● |
| ||
*Mr. Liebau is an ex officio member of each of the Company’s committees.
Board Overview
Myers Industries has an experienced and effective Board focused on shareholder value creation. The Board is currently composed of nine members, eight of whom are independent. The charts below highlight the Board’s composition and experience.
iv
PROXY STATEMENT SUMMARY (CONTINUED)
Board Composition
Director Qualifications
Directors (number / %)
|
| Skill | ||
|
|
|
|
|
9 |
| 100% |
| Executive Leadership |
|
|
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|
7 |
| 78% |
| Other Public Board Experience |
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6 |
| 67% |
| Investor Relations |
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3 |
| 33% |
| Mergers & Acquisitions |
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5 |
| 56% |
| Global Experience |
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|
3 |
| 33% |
| Brand and Marketing |
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|
|
4 |
| 44% |
| Audit Committee Financial Expert |
|
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|
|
5 |
| 56% |
| Industry Experience / Operational Expertise |
v
PROXY STATEMENT SUMMARY (CONTINUED)
Shareholder Engagement
One of our key priorities is conducting robust engagement with our shareholders in order to provide transparency into our business and determine which issues are important to our shareholders. Participants in our engagement programs include executive management, members of the Board of Directors and Investor Relations personnel. Our methods of engagement include:
Earnings conference calls
Investor conferences
One-on-one investor meetings and one-on-one investor conference calls
Outreach calls and meetings with shareholders’ corporate governance departments
Shareholder Outreach
We believe engaging in shareholder outreach is an important element of strong corporate governance. In 2018, in a continuation of the Company’s shareholder outreach efforts that began in 2016, members of our Board and executive management acted on this belief and contacted the top 14 shareholders who own 1% or greater of outstanding shares and represent collectively approximately 73% of total shares outstanding. Following this outreach, conference calls were conducted with two of the 14 shareholders initially approached who had expressed interest in having a conversation with our management and directors. During our outreach meetings, we discussed corporate governance matters, board diversity, the safety, environmental and social policies and reporting practices of the Company, and other items of shareholder interest.
The Company values the input received from these discussions with shareholders. Following these conversations, the Company has continued to emphasize the importance of safety in our operations and has renewed its focus on enhancing sustainable business practices and incorporating environmental consciousness throughout our operations. Additionally, the Compensation Committee of the Company regularly evaluates the Company’s compensation programs and considers shareholder input in evaluating the programs.
At any time during the year shareholders may access our Annual Report, Proxy Statement, financial presentations, and corporate governance guidelines at www.myersindustries.com.
Shareholder Communications
Shareholders may contact any director, committee of the board, non-management director or the Board through the following:
via U.S. Mail at:
Myers Industries, Inc.
c/o Secretary
1293 South Main Street
Akron, Ohio 44301
via e-mail at:
governance@myersind.com
A toll-free hotline has also been established if an interested party wishes to contact a director, a committee of the Board, a non-management director or the Board by phone. The number is (877) 285-4145 and is available worldwide 24 hours a day, seven days a week.
vi
PROXY STATEMENT SUMMARY (CONTINUED)
Executive Compensation Overview
Myers Industries’ executive compensation program, set forth by the Compensation Committee, is designed to implement our executive pay philosophy to:
Attract and retain talented and experienced executives and other key employees
Ensure that the actual compensation paid to our executive officers is aligned and correlated with financial performance and changes in shareholder value (“pay for performance”)
Motivate our executive officers to achieve short-term and long-term Company goals that will increase shareholder value
Reward executives whose knowledge, skills and performance are crucial to our success
Compensation Practices
What We Do | What We Don't Do |
Link Pay to Performance | Enter into Employment Contracts |
Limited Post-Employment/Change in Control Provisions | Offer Tax Gross-Ups |
Grant Awards with Double Trigger Change in Control Provisions | Reprice Underwater Options |
Impose Stock Ownership Guidelines | Allow Cash Buyouts of Underwater Options |
Retain an Independent Compensation Advisor | Permit Short Sales by Directors, Officers, or Employees |
Tally Sheets to Evaluate and Monitor NEO Compensation | Provide Perquisites |
Maintain an Executive Compensation Clawback Policy | Allow Hedging or Pledging of Company |
vii
PROXY STATEMENT SUMMARY (CONTINUED)
Elements of Compensation for 2018
Our 2018 executive compensation program was designed to reinforce the relationship between the interests of our named executive officers (or “NEOs”) and our shareholders. The objectives and key characteristics of each element of our 2018 executive compensation are summarized below:
Type of Pay & Form | Performance Periods | Objectives | ||||
Fixed | Base Pay (cash) | 1 year | • Compensation for | |||
• Recognizes individual skills, competencies, and experience | ||||||
• Generally determined based on an individual’s time in the | ||||||
• May be influenced/changed as a result of changes in the executive’s responsibilities, an | ||||||
At Risk | Annual Bonus (cash) | 1 year | • Variable cash compensation tied to the | |||
• Aligns interests of executives with shareholders, with amount earned dependent on Company performance objectives designed to enhance shareholder value | ||||||
Long-Term Incentives (performance stock unit awards, stock options, and | 3 years | • Motivates and rewards leaders for increasing shareholder value and returns while promoting our long-term interests by aiding in the retention of high-quality executives | ||||
• Reflects the belief that a significant component of executive compensation should be at risk where the amount earned depends on achieving Company performance objectives (the Company’s three-year cumulative EBITDA and three-year total free cash flow as a percentage of sales) designed to | ||||||
• Helps build executive stock ownership, consistent with our stock ownership objectives | ||||||
• Encourages retention through multi-year vesting | ||||||
viii
PROXY STATEMENT SUMMARY (CONTINUED)
2018 NEO Target Compensation Mix
2018 CEO Target Compensation Mix
2018 CFO Target Compensation Mix
* “Fixed” compensation includes salary and service-based restricted stock; “variable” compensation includes annual bonuses, performance stock units and stock options; “long-term” compensation includes stock options, performance stock units and restricted stock, and “short-term” compensation includes salary and annual bonuses.
ix
Myers Industries, Inc.
Proxy Statement
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2
Corporate Governance and Compensation Practices and Policies
The Board of Directors is committed to maintaining sound corporate governance and a compensation structure that promotes the best interests of our shareholders.
Corporate Governance Guidelines
The Company has adopted “Corporate Governance Guidelines” and a “Code of Business Conduct and Ethics” for the Company’s directors, officers and employees. Each of our corporate governance policies is available on the “Corporate Governance” page accessed from the “Investor Relations” page of our website at www.myersindustries.com.
Corporate Governance and Compensation Practices
In 2018, the Company and members of the Board continued to conduct considerable shareholder outreach, through which we have requested input from our largest institutional investors and other shareholders collectively holding approximately 73% of our outstanding shares.
Following this outreach, discussions were ultimately conducted with two of the shareholders initially approached who had indicated interest in having a conversation with our management and directors. The Company received feedback on:
corporate governance matters
Board diversity
safety, environmental and social policies and reporting practices of the Company
We value shareholder views and insights and expect to continue to dialogue with our shareholders.
In accordance with best practices, all of our directors are elected annually.
Since October 2009, the Company has maintained an independent Chairman. F. Jack Liebau, Jr. has served as the independent Chairman since the 2016 Annual Meeting of Shareholders
The Company believes this leadership structure is appropriate as it further aligns the interests of the Company and our shareholders by ensuring independent leadership of the Board
The independent Chairman serves as a liaison between our directors and the Company’s management and helps to maintain open communication and discussion by the Board
Our independent Chairman is an ex officio member of each of our standing committees
Duties of the Chairman are specified in the Charter of the Chairman of the Board of Directors and include serving in a presiding capacity, coordinating the activities of the Board, and such other duties and responsibilities as the Board may determine from time-to-time. This charter is available on the “Corporate Governance” page accessed from the “Investor Relations” page on our website at www.myersindustries.com.
3
Board and Committee Independence
Periodic Review of Director Independence: The Board of Directors reviews the independence of each director using the current standards for “independence” established by the New York Stock Exchange (“NYSE”) and other applicable regulations and considers any other material relationships a director may have with the Company as disclosed in annual director and officer questionnaires. The Company’s Corporate Governance Guidelines provide that a majority of the Board of Directors be comprised of independent directors and the charters of each of the Board’s committees require that all committee members be independent
Independence Determination: The Board has determined that Mses. Coffin, Lutey and Scaccetti and Messrs. De Feo, Foley, Liebau, Lisman and Stefanko (all of its current members except for Mr. Banyard, our President and Chief Executive Officer) are independent under these standards. The determination of whether a director is “independent” is based upon the Board’s review of the relationships between each director and the Company, if any, under the Company’s “Board of Directors Independence Criteria” policy, and the corporate governance listing standards of the NYSE. In connection with the Board’s determination regarding the independence of each non-management director and nominee, the Board considered any transactions, relationships and arrangements as required by our independence guidelines. In particular, the Board considered the following relationships:
Committee Independence: All members of the Company’s Audit Committee, Compensation Committee and Governance Committee have been determined to be independent directors. In addition, the Board has determined that the members of the Audit Committee and Compensation Committee meet the additional independence criteria required for such committee membership under the applicable NYSE listing standards
Other Relationships: Except as set forth in this Proxy Statement, neither the Company nor any of the Board nominees or any of their associates have or will have any arrangements or understandings with any person with respect to any future employment by the Company or its affiliates or with respect to any future transactions to which the Company or any of its affiliates will or may be a party
Pursuant to the Company’s director resignation policy, in an uncontested election, any incumbent director who receives a greater number of votes “Withheld” from his or her election than votes “For” his or her election (and with respect to such incumbent director’s election at least 25% of the Company’s shares outstanding and entitled to vote thereon were “Withheld” from the election of such director) shall submit an offer of resignation to the Board of Directors
The Governance Committee will then recommend to the Board whether to accept or reject any tendered resignations, and the Board will decide whether to accept or reject such tendered resignations
The Board’s decision will be publicly disclosed in a Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”)
If an incumbent director’s tendered resignation is rejected, he or she will continue to serve until his or her successor is elected, or until his or her earlier resignation, removal from office, or death. If an incumbent director’s tendered resignation is accepted, then the Board will have the sole discretion to fill any resulting vacancy to the extent permitted by the Company’s Amended and Restated Code of Regulations
The Company has adopted a policy that the maximum number of public company boards on which a non-CEO director may sit is five (including the Company’s board) and the maximum number of public company boards on which a CEO director may sit is three (including the Company’s board).
4
The Board annually reviews the Company’s strategic plan, which addresses, among other things, the Company’s risks and opportunities. Certain areas of oversight are delegated to the relevant Committees of the Board and the Committees regularly report back on their deliberations. This oversight is enabled by reporting processes that are designed to provide visibility to the Board about the identification, assessment, monitoring and management of enterprise-wide risks. Every year, management conducts an enterprise-wide risk assessment of the Company and each of its business segments and presents the assessment to the Board for review. The focus of this assessment includes a review of strategic, financial, operational, compliance, reputational and technology (IT) objectives and risks for the Company. In addition:
Audit Committee: The Audit Committee maintains primary responsibility for oversight of risks and exposures pertaining to the accounting, auditing and financial reporting processes of the Company
Compensation Committee: The Compensation Committee maintains primary responsibility for risks and exposures associated with oversight of the administration and implementation of our compensation policies
Governance Committee: The Governance Committee maintains primary responsibility for risks and exposures associated with corporate governance and succession planning
Each committee also considers the reputational risk implicated by the oversight responsibilities described above.
The Company maintains a “Clawback Policy” that provides for the recoupment of certain incentive compensation in the event of an accounting restatement resulting from material noncompliance (whether or not based upon misconduct) with financial reporting requirements under the federal securities laws. The Clawback Policy is administered by the Compensation Committee and applies to current and former executive officers and such other employees who may from time to time be deemed subject to the policy by the Compensation Committee.
Our Board, in coordination with the Governance Committee, oversees succession planning for the CEO and other officers of the Company. As part of its succession planning oversight, the Board reviews the senior management team’s experience, skills, competence and potential, to help assess which executives have the ability to develop the attributes that the Board believes are necessary to lead and execute the Company's strategic vision.
The Company maintains “Stock Ownership Guidelines” whereby our executive officers and non-employee directors are expected to hold a specified amount of our common stock. These expectations are as follows:
CEO:5X annual base salary
CFO and CLO:3X annual base salary
Vice Presidents: 1X annual base salary
Non-Employee Directors:5X annual cash Board retainer
The executive officers and non-employee directors have five years from the date they become subject to the guidelines to attain the ownership requirement. These “Stock Ownership Guidelines” are available on the “Corporate Governance” page accessed from the “Investor Relations” page of the Company’s website at www.myersindustries.com.
Anti-Hedging and Pledging Policy
The Company prohibits directors, officers and employees from engaging in any hedging or pledging transactions with respect to Company shares.
5
Board Member Recruiting Guidelines
The Company’s Board Member Recruiting Guidelines outline the process for nominating potential director candidates for consideration by the Governance Committee. These recruiting guidelines are available on the “Corporate Governance” page accessed from the “Investor Relations” page of the Company’s website at www.myersindustries.com.
Executive Sessions of the Board and Committees
The Board has a policy requiring the non-management directors, both as to the Board and Committees, to meet regularly in executive session without any management personnel or employee directors present. During 2018, the Board and each Committee met regularly in executive session as follows: Board, eight times; Audit Committee, six times; Compensation Committee, four times; and the Governance Committee, four times.
The Chairman of each Committee was selected as the Presiding Director for each Committee executive session.
The Audit Committee maintains procedures, including a worldwide telephone “hotline,” which allows employees and interested parties to report any financial or other concerns anonymously as further detailed under “Shareholder Communication with Directors” below.
We have a “Code of Business Conduct and Ethics,” which incorporates a “Code of Ethical Conduct for the Finance Officers and Finance Department Personnel,” which embodies our commitment to ethical and legal business practices, as well as satisfying the NYSE requirements to implement and maintain such policies. The Board expects all of our officers, directors and other members of our workforce to act ethically at all times. This policy is available on the “Corporate Governance” page accessed from the “Investor Relations” page on our website at www.myersindustries.com.
Annual Board and Committee Self-Assessments
The Board conducts annual self-assessments of the Board, as well as of the Audit Committee, the Compensation Committee, and the Governance Committee, to assist in determining whether the Board and its Committees are functioning effectively. In early 2016 and 2017, evaluations were conducted by an independent third party through telephone interviews and feedback was provided to the Board, committees and individual directors. In late 2017 through 2018 and in early 2019, the Board conducted self-assessment evaluations with the assistance of outside counsel and reviewed the results as a Board.
Shareholder Communication with Directors
Our Board provides the following methods for interested parties and shareholders to send communications to a director, to a Committee of the Board, to the non-management directors, or to the Board:
6
Interested parties may send such communications by e-mail to governance@myersind.com or by mail or courier delivery addressed as follows:
Board of Directors (or Committee Chairman, Director or Non-Management Directors, as the case may be)
c/o Secretary
Myers Industries, Inc.
1293 South Main Street
Akron, Ohio 44301
All communications directed to the “Board of Directors” or to the “Non-Management Directors” will be forwarded unopened or unread to the Chairman of the Governance Committee. The Chairman of the Governance Committee in turn determines whether the communications should be forwarded to the appropriate members of the Board and, if so, forwards them accordingly. For communications addressed to a particular director or the Chairman of a particular Committee of the Board, however, the Secretary will forward those communications, unopened or unread, directly to the person or Committee Chairman in question.
The Company maintains a “hotline” for receiving, retaining and addressing complaints from any interested party regarding accounting, internal accounting controls and auditing matters, and procedures for the anonymous submission of these concerns.
The hotline is maintained by an independent third party. Interested parties may also use this hotline to communicate with the Board.
Any interested party may contact a director, a Committee of the Board, the non-management directors, or the Board through the toll free hotline at (877) 285-4145.
The hotline is available worldwide, 24 hours a day, seven days a week. Note that all reports made through the hotline are directed to the Chairman of the Audit Committee and the Secretary. We do not permit any retaliation of any kind against any person who submits a complaint or concern under these procedures.
At Myers Industries, we are committed to helping our customers make the world a safer and more efficient place. We provide bulk packaging that is more easily cleaned than other solutions. We provide stronger, rigid packaging for safe stacking and storage of food and beverage products. We provide a wide selection of storage bins to help our customers organize their workplace and drive efficiency. We also provide world-leading tire pressure monitoring systems so that our end users have the proper and safest pressure in their car tires. Not only do we incorporate health, safety and environmental consciousness into our products, but into all aspects of our operations.
The health and safety of our employees, our customers and our end-users is at the forefront of each business decision we make.
We maintain an Environmental Health and Safety Policy and Principles that all of our employees are expected to understand and promote (this policy is available on the “Corporate Governance” page accessed from the “Investor Relations” page of our website at www.myersindustries.com)
Our ultimate goal is to achieve zero injuries through continued focus on our core safety programs
All of our manufacturing sites and distribution centers maintain safety committees that strive to identify and implement best practices in environmental health and safety
We engage employees, provide training and ensure competency in safe work practices and procedures
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• | We utilize the DuPont™ STOP™ safety training observation program and, in 2018, our locations completed 2,489 DuPont™ STOP™ observations |
Our OSHA recordable incident rate is well below the industry average and has been for a number of years
The Company incorporates environmental consciousness into all aspects of our operations by doing, among other things, the following:
Manufacturing returnable packaging products that promote sustainability
Recycling and reprocessing plastic scrap in our factories
Ensuring that colorants used in our plastics manufacturing do not contain lead or any other heavy metals
Implementing and maintaining recycling programs in our offices and factories
Conserving energy wherever possible in order to prevent water, air and land pollution (including through the use of new efficient plant water cooling systems and motion control water valves at certain locations)
Using tools, such as thermal imaging to improve machine cycle times, LED lighting, lighting motion sensors and high efficiency motors to reduce energy consumption
Encouraging our customers to focus on sustainability by providing alternative solutions in manufacturing materials, transportation methods, and product end-uses
We are committed to being active members of the communities where we operate. By contributing financially and through volunteer work, we strive to help build stronger communities and create a better environment for our employees, our customers and the general public. Our primary focus areas for our charitable contribution program include education and youth development, community and civic development, health and social services and environmental efforts. We offer several programs to encourage employees to positively impact our communities, including a Company matching gift program and Company provided days off for employee volunteering.
Employee Relations and Workplace Environment
We are committed to providing a safe and open work environment where we empower our employees to achieve their full potential, regardless of differences in gender, age, ethnic background, culture, religion, sexual orientation, or physical ability. We strive to provide our employees with financial, personal and physical well-being through our comprehensive and highly competitive pay and benefits packages as well as by providing access to a variety of innovative, flexible and convenient employee health and wellness programs. We also invest in our people through annual employee development and engagement programs, including web-based training solutions.
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PROPOSAL NO. 1 — ELECTION OF DIRECTORS
Set forth below for each nominee for election as a director is a brief statement, including the age, principal occupation and business experience for at least the past five years, and any directorships held with public companies. The members of the Governance Committee have recommended, and the independent members of the Board of Directors have nominated, the persons listed below as nominees for the Board of Directors.
Each of the below nominees has consented:
to serve as a nominee,
to being named as a nominee in this Proxy Statement, and
to serve as a director if elected.
If any nominee should become unavailable for any reason, it is intended that votes will be cast for a substitute nominee designated by the Board. There is no reason to believe that the nominees named will be unable to serve if elected. Proxies cannot be voted for a greater number of nominees than the number named in this Proxy Statement.
THE BOARD OF DIRECTORS RECOMMENDS THE ELECTION OF THESE NOMINEES
Name | Age | Director Since | Independent | Occupation |
R. David Banyard | 50 | 2016 | No | President and CEO Myers Industries, Inc. |
Sarah R. Coffin | 66 | 2010 | Yes | Former CEO of Aspen Growth Strategies, LLC |
Ronald M. De Feo | 67 | 2018 | Yes | Former President, Chief Executive Officer and Executive Chairman of Kennametal, Inc. (NYSE: KMT) and a founding partner of Nonantum Capital Partners, LLC |
William A. Foley | 71 | 2011 | Yes | Chairman of the Board and CEO, Libbey Inc. (NYSE: LBY) |
F. Jack Liebau, Jr. | 55 | 2015 | Yes | Former President and CEO of Roundwood Asset Management |
Bruce M. Lisman | 72 | 2015 | Yes | Former Chairman of the Global Equity Division, JP Morgan Chase & Co. |
Lori Lutey | 54 | 2018 | Yes | Former Executive Vice President and Chief Financial Officer of Schneider National (NYSE: SNDR) |
Jane Scaccetti | 64 | 2016 | Yes | CEO and founding partner of Drucker & Scaccetti |
Robert A. Stefanko | 76 | 2007 | Yes | Former Chairman and EVP of Finance and Administration of A. Schulman, Inc. |
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| Business Experience: Age: 67 Director since: 2018 Committees: Compensation Governance • Founding partner of Nonantum Capital Partners, LLC, a private equity firm • Former President, Chief Executive Officer, and Executive Chairman of Kennametal, Inc. (NYSE: KMT), a supplier of tooling and industrial materials • Former Chief Executive Officer of Terex Corporation (NYSE: TEX), manufacturer of lifting and material handling solutions for a variety of industries • Various marketing and leadership positions at Case Corporation, Tenneco Inc. (NYSE: TEN), and Procter & Gamble (NYSE: PG) Current and Former Directorships: • Trustee for Iona College • Former Executive Chairman and Director of Kennametal, Inc. • Former Chairman of Terex Corporation Skills and Expertise: • Over 20 years of senior management and industrial experience • Extensive experience with public and private company boards, corporate governance, mergers and acquisitions, brand and marketing WILLIAM A. FOLEY Age: 71 Principal Occupation: Chairman of the Board and Chief Executive Officer of Libbey Inc. (NYSE: LBY), a producer of consumer and industrial glassware Director since: 2011 Committees: Compensation Governance Business Experience: • Former Chairman and Chief Executive Officer of Blonder Home Accents, a distributor of wallcoverings and home accents • Former Chairman and Chief Executive Officer of Thinkwell Incorporated • Former President of Arhaus Incorporated, a private brand name furniture company • Former Chairman, President and Chief Executive Officer of Lesco Incorporated, a manufacturer, distributor and retailer of professional lawn care and golf course management products Skills and Expertise: • Over 30 years of senior management experience, both domestic and international • Provides wide-ranging acquisition, joint venture, business and market development experience • Extensive experience in broad scale plastics manufacturing, as well as consumer and distribution businesses • Experience with best practices on public company boards, particularly in governance, compensation and leadership Age: 55 Director since: 2015 Chairman of the Board Committees: Audit* Compensation* Governance* *ex officio Business Experience: • Former President and Chief Executive Officer of Roundwood Asset Management, a subsidiary managing public equities for Alleghany Corporation’s insurance companies • Former President and Founder, Liebau Asset Management Company, which managed money for individuals, foundations, and corporations • Former Partner and Portfolio Manager for Davis Funds and Primecap Management Company, investment management firms Current and Former Directorships: • Non-Executive Chairman of the Board and Member of Special Investigations Limited Company, a private, Virginia-based professional services company and government contractor in the information technology, cybersecurity, investigations, and intelligence sectors • Former Director of The Pep Boys, a nationwide auto parts retailer • Former Director of Herley Industries, Inc., a defense technology company • Former Director of Media General, Inc., then an owner of newspapers and television stations • Former Vice President of Andover Alumni Council • Current Director and CFO of the Edwin Gregson Foundation • Former Director and Finance Committee Chair of Kidspace Children’s Museum Skills and Expertise: • Vast financial, strategic, executive and investment experience working with companies in a wide range of industries • Experience in corporate governance and in serving on both corporate and non-profit boards • Experience • Extensive financial experience, including qualification under SEC rules as an Audit Committee Financial Expert BRUCE M. LISMAN Age: 72 Director since: 2015 Committees: Compensation Governance (Chair) Business Experience: • Former Chairman of the Global Equity Division, JP Morgan Chase & Co. (NYSE: JPM), a global financial services firm and banking institution • Former Co-Head of the Global Institutional Equity Division, Bear Stearns Companies, Inc. Current and Former Directorships: • Director of Associated Capital Group (NYSE: AC), a diversified global financial services company • Lead Director • Director of National Life Group, a mutual life insurance company • Member of the board of American Forests • Former Director of The Pep Boys, a nationwide auto parts retailer • Former Director of Central Vermont Public Service (now part of Green Mountain Power), a public energy company • Former Director of Merchants Bancshares, a bank holding company (now part of Community Bank System, Inc.) • Former member of the boards of BRUT, Inc., Vermont Electric Power Company, Inc. Skills and Expertise: • Experience as a chair, vice chair, and committee chair/member in a broad range of businesses and civic organizations • Extensive executive and investment experience 12 Lori Lutey Age: 54 Director since: 2018 Committees: Audit Governance Business Experience: • Former Executive Vice President and Chief Financial Officer of Schneider National (NYSE: SNDR) • Former Vice President of Finance of FedEx Services • Former Vice President and Chief Financial Officer of FedEx Trade Networks • Former Vice President of Finance and Administration of FedEx Supply Chain Services Current and Former Directorships: • Director of PS Logistics, a private flatbed transportation solution provider • Director, Inner Explorer, a non-profit organization whose mission is to provide mindfulness to PreK-12 classrooms Skills and Expertise: • Extensive experience with strategic and financial management and leadership of overall company performance • Extensive financial and accounting experience, including qualification under SEC rules as an Audit Committee Financial Expert JANE SCACCETTI Age: 64 Director since: 2016 Committees: Audit Governance Principal Occupation: Chief Executive Officer and founding partner of Drucker & Scaccetti, an accounting and tax advisory firm Business Experience: • Former partner at Laventhol & Horwath, a national accounting firm Current and Former Directorships: • Chair of the Audit Committee, Penn National Gaming, Inc. (NASDAQ: PENN), an operator of casinos and racetracks • Director of Mathematica Policy Research, Inc., a non-partisan research organization focused on policy research, data collections and data analytics • Trustee and member of Compliance, Investment and Strategic and Long Term Planning Committees of Temple University • Former Chair of the Board of Temple University Hospital and Temple University Health System • Former member of the board and Chair of the Audit Committee of Nutrition Management Services Company, a provider of comprehensive healthcare food service and facilities management nationwide • Former Chair of the Audit Committee and a member of the Nominations and Governance Committee of The Pep Boys, a nationwide auto parts retailer • Former Director of Keystone Health Plan East, the for-profit Health Maintenance Organization of Independence Blue Cross Skills and Expertise: • Experience as a chair, vice chair, and committee chair/member in a broad range of businesses • Extensive financial and accounting experience, including qualification under SEC rules as an Audit Committee Financial Expert | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Director since: 2007 Committees: Audit (Chair) Compensation | Business Experience: | |
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Each of the foregoing nominees is recommended by the Governance Committee. The Governance Committee believes that each of the nominees possesses certain key attributes that the Governance Committee believes to be important for an effective Board. There are, and during the past ten years there have been, no legal proceedings material to an evaluation of the ability of any director, nominee, or executive officer of Myers Industries to act in such capacity or concerning his or her integrity. There are no family relationships among any of the directors and executive officers.
The Board of Directors recommends that you vote “FOR” each of the director nominees listed above
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The Governance Committee reviews and evaluates individuals for nomination to stand for election as a director who are recommended to the Governance Committee: in writing by any of our shareholders or by our current or past directors, executive officers, or identified by professional search firms retained by the Governance Committee.
Recruiting Guidelines and Director Qualifications
The Company’s Board Member Recruiting Guidelines outline the process for the Governance Committee to recruit and evaluate potential director candidates. These guidelines are available on the “Corporate Governance” page accessed from the Investor Relations page of the Company’s website at www.myersindustries.com. In considering these potential candidates for nomination to stand for election, the Governance Committee will consider:
The current composition of the Board and how well it functions as a group
The talents, personalities, strengths,EVP of Finance & Administration of A. Schulman, Inc. (NASDAQ until August 21, 2018), an international supplier of plastic compounds and weaknesses of current directorsresins
The value of contributions made by individual directors
The need for a person with specific skills, experiences or background relevant to the Company’s strategy to be added to the Board
Any anticipated vacancies due to retirement or other reasons
Other factors that may enter into the nomination decision
The Governance Committee endeavors to select nominees that contribute unique skillsCurrent and professional experiences in order to advance the performanceFormer Directorships:
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Former Director and member of the BoardAudit and Compensation Committees of DirectorsOMNOVA Solutions, Inc. (NYSE), an innovator of emulsion polymers, specialty chemicals and establishdecorative and functional surfaces
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Former Director of The Davey Tree Expert Company, a well-rounded Board with diverse views that reflect the interests of our shareholders. The Governance Committee considers diversity as one of a number of factors in identifying nominees for directors; however, there is no formal policy in this regard. The Governance Committee views diversity broadly to include diversity of experience, skillstree, shrub and viewpoint, in addition to traditional concepts of diversity such as race and gender.lawn care company
When considering an individual candidate’s suitability for the Board, the Governance Committee will evaluate each individual on a case-by-case basis. The Governance Committee does not prescribe minimum qualifications or standards for directors, however, the Governance Committee looks for directors who have personal characteristics, educational backgrounds and relevant experience that would be expected to help further the goals•
Former Chair of the Company. In addition, the GovernanceFinance/Audit Committee will review the extentand a Director of the candidate’s demonstrated excellenceAkron General Hospital
Skills and successExpertise:
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Extensive involvement in his or her chosen business, profession, orpublic company matters, including international, compensation, audit, financial, legal, and various other careermatters
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Extensive financial and the skills and talents that the candidate would be expected to add to the Board. The Governanceaccounting experience, including qualification under SEC rules as an Audit Committee may choose, in individual cases, to conduct interviews with the candidate and/or contact references, business associates, other members of boards on which the candidate serves or other appropriate persons to obtain additional information. The Governance Committee will make its determinations on whether to nominate an individual candidate based on the Board’s then-current needs, the merits of that candidate and the qualifications of other available candidates.Financial Expert
Shareholder Recommendation Policy•
The Governance Committee will consider individuals for nomination to stand for electionExperience as a director who are recommended to it in writing by any of our shareholders that strictly follow the below procedures. Shareholders making recommendations for directors must:other public company boards
Certify that the person making the recommendation is a shareholder of the Company (including the number of shares held as of the date of the recommendation)
Provide the full name and address of the proposed nominee as well as a biographical history setting forth past and present directorships, employment, occupations and civic activities for at least the past five
Each of the foregoing nominees is recommended by the Governance Committee. The Governance Committee believes that each of the nominees possesses certain key attributes that the Governance Committee believes to be important for an effective Board. There are, and during the past ten years there have been, no legal proceedings material to an evaluation of the ability of any director, nominee, or executive officer of Myers Industries to act in such capacity or concerning his or her integrity. There are no family relationships among any of the directors, director nominees and executive officers.
The Board of Directors recommends that you vote “FOR” each of the director nominees listed above.
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The Governance Committee reviews and evaluates individuals for nomination to stand for election as a director who are recommended to the Governance Committee: in writing by any of our shareholders or by our current or past directors, executive officers, or identified by professional search firms retained by the Governance Committee. The Governance Committee also engaged a professional search firm during 2018 to assist the Committee and the Board in connection with the identification of Mr. De Feo and Ms. Lutey as potential director candidates.
Recruiting Guidelines and Director Qualifications
The Company’s Board Member Recruiting Guidelines outline the process for the Governance Committee to recruit and evaluate potential director candidates. These guidelines are available on the “Corporate Governance” page accessed from the “Investor Relations” page of the Company’s website at www.myersindustries.com. In considering these potential candidates for nomination to stand for election, the Governance Committee will consider:
The current composition of the Board and how well it functions as a group
The talents, personalities, and strengths of current directors
The value of contributions made by individual directors
The need for a person with specific skills, experiences or background relevant to the Company’s strategy to be added to the Board
Any anticipated vacancies due to retirement or other reasons
Other factors that may enter into the nomination decision
The Governance Committee endeavors to select nominees that contribute unique skills and professional experiences in order to advance the performance of the Board of Directors and establish a well-rounded Board with diverse views that reflect the interests of our shareholders. The Governance Committee considers diversity as one of a number of factors in identifying nominees for directors; however, there is no formal policy in this regard. The Governance Committee views diversity broadly to include diversity of experience, skills and viewpoint, in addition to traditional concepts of diversity such as race and gender.
When considering an individual candidate’s suitability for the Board, the Governance Committee will evaluate each individual on a case-by-case basis. The Governance Committee does not prescribe minimum qualifications or standards for directors, however, the Governance Committee looks for directors who have personal characteristics, educational backgrounds and relevant experience that would be expected to help further the goals of the Company. In addition, the Governance Committee will review the extent of the candidate’s demonstrated excellence and success in his or her chosen business, profession, or other career and the skills and talents that the candidate would be expected to add to the Board. The Governance Committee may choose, in individual cases, to conduct interviews with the candidate and/or contact references, business associates, other members of boards on which the candidate serves or other appropriate persons to obtain additional information. The Governance Committee will make its determinations on whether to nominate an individual candidate based on the Board’s then-current needs, the merits of that candidate and the qualifications of other available candidates.
Shareholder Recommendation Policy
The Governance Committee will consider individuals for nomination to stand for election as a director who are recommended to it in writing by any of our shareholders that strictly follow the below procedures. Shareholders making recommendations for directors must:
Certify that the person making the recommendation is a shareholder of the Company (including the number of shares held as of the date of the recommendation)
Provide the full name and address of the proposed nominee as well as a biographical history setting forth past and present directorships, employment, occupations and civic activities for at least the past five years
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• | Provide a signed written statement from the proposed nominee consenting to be named as a candidate and, if nominated and elected, consenting to serve as a director
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Submit a signed written statement that the shareholder making the recommendation and the proposed nominee will make available to the Governance Committee all information reasonably requested in furtherance of the Governance Committee’s evaluation
Provide a letter of recommendation to the following address: Corporate Governance and Nominating Committee, c/o Secretary, Myers Industries, Inc., 1293 South Main Street, Akron, Ohio 44301
Submit all required information before the close of business on or before November 15th of the year prior to our next Annual Meeting of shareholders
In accordance with our Amended and Restated Code of Regulations, a shareholder may directly nominate a candidate for election as a director of the Company only if written notice of such intention is received by the Secretary not less than sixty (60) days nor more than ninety (90) days prior to the date of such Annual Meeting of shareholders or special meeting of shareholders for the election of directors. In the event that the date of such meeting to elect directors is not publicly disclosed at least seventy (70) days prior to the date of such meeting, written notice of such shareholder’s intent to nominate a candidate must be received by the Secretary not later than the close of business on the tenth (10th) day following the date on which notice of such meeting is first provided to the shareholders. A shareholder wishing to directly nominate an individual to serve as a director must follow the procedure outlined in Article I, Section 12 of our Amended and Restated Code of Regulations, titled “Advance Notice of Director Nomination” and then send a signed letter of nomination to the following address: Corporate Governance and Nominating Committee, c/o Secretary, Myers Industries, Inc., 1293 South Main Street, Akron, Ohio 44301. Our Amended and Restated Code of Regulations is available on the “Corporate Governance” page accessed from the “Investor Relations” page of the Company’s website at: www.myersindustries.com.
There were a total of 15 regularly scheduled and special meetings of the Board of Directors in 2018. During 2018, all directors attended at least 75% of the aggregate total number of the meetings of the Board and committees on which they served. In 2018, all of our then current directors and then nominees attended our Annual Meeting. Although we do not have a formal policy requiring directors to attend the Annual Meeting, our directors are encouraged to attend.
The Board has three standing committees: the Audit Committee, the Compensation Committee, and the Governance Committee. Set forth below are the current committee memberships.
Director | Audit Committee | Compensation Committee | Governance Committee |
Sarah R. Coffin | X | Chair | |
Ronald M. De Feo | X | X | |
William A. Foley | X | X | |
F. Jack Liebau, Jr.* | X | X | X |
Bruce M. Lisman | X | Chair | |
Lori Lutey | X | X | |
Jane Scaccetti | X | X | |
Robert A. Stefanko | Chair | X |
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*Mr. Liebau is an ex officio member of each of the Company’s committees.
In addition to the standing Audit Committee, Compensation Committee and Governance Committee, from time to time, the Board has established, and may establish in the future, special committees to address particular matters. In 2018, the Board established a Finance Committee as a temporary Ad-Hoc Board committee to provide oversight and guidance with respect to the Company’s May 2018 public offering of 4,000,000 shares of its common stock. The Finance Committee held 8 meetings in 2018. The Company disbanded the Finance Committee for 2019.
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7 Meetings Held in 2018 | |||
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The Audit Committee assists our Board in the oversight and integrity of our financial statements, ensures our structure meets legal and regulatory requirements, and oversees our internal auditing functions, controls, and procedures. The Board has determined that based on their extensive financial background and expertise, F. Jack Liebau, Jr. (ex officio), Lori Lutey, Jane Scaccetti and Robert A. Stefanko meet the criteria of a “financial expert” under SEC rules. None of our Audit Committee members serve on more than two other public company audit committees.
Audit Committee Functions:
Engages the independent registered public accounting firm and is responsible for the appointment, compensation and oversight of external auditor
Approves all audit and accounting engagements (audit and non-audit)
Reviews the results of the audit and interim reviews
Evaluates the independence of the independent registered public accounting firm
Reviews the financial results of the Company with the independent registered public accounting firm prior to their public release and filling of reports with the SEC
Directs and supervises special investigations
Oversees accounting, internal accounting controls, auditing matters, reporting hotline and corporate compliance programs
See the Audit Committee Report on page 50 for further information regarding the Audit Committee’s activities.
12 Meetings Held in 2018 | |||
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The Compensation Committee administers our executive incentive compensation programs and determines, either as a committee or together with the other independent board members, annual base salaries and incentive compensation awards for our executive officers.
Compensation Committee Functions:
Review and approve compensation of executive officers of the Company
Review and approve the CEO’s compensation-related corporate goals
Evaluate the CEO’s performance
Establish and administer the Company’s policies, programs and procedures for compensating its executive officers and directors
Review and approve equity award grants
Review, assess and monitor the Company’s Stock Ownership Guidelines
Oversee regulatory compliance with respect to compensation matters
Oversee shareholder communications regarding executive compensation matters
Retain outside consultants regarding executive compensation and other matters
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Corporate Governance and Nominating Committee
5 Meetings Held in 2018 | |||
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*Mr. Crowe will be retiring from the Board immediately following the Annual Meeting.
**Mr. Liebau is an ex officio member of each of the Company’s committees.
***Mr. Lisman will be named the Chair of the
The Governance Committee following Mr. Crowe’s retirement.
In addition to the standing Audit Committee, Compensation Committee and Governance Committee, from time to time, the Board has established, and may establish in the future, special committees to address particular matters.
Audit Committee assists the Board in developing and implementing corporate governance guidelines, identifying potential director candidates, determining the size and composition of our Board and its committees, and evaluating the overall effectiveness of our Board.
Governance Committee Functions:
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The Audit Committee assists our Board in the oversight and integrity of our financial statements, ensures our structure meets legal and regulatory requirements, and oversees our internal auditing functions, controls, and procedures. The Board has determined that based on their extensive financial background and expertise, Daniel R. Lee, F. Jack Liebau, Jr., Jane Scaccetti and Robert A. Stefanko meet the criteria of a “financial expert” under SEC rules. None of our Audit Committee members serve on more than two other public company audit committees.
Audit Committee Functions:
Engages the independent registered public accounting firm and is responsible for the appointment, compensation and oversight of external auditor
Approves all audit and accounting engagements (audit and non-audit)
Reviews the results of the audit and interim reviews
Evaluates the independence of the independent registered public accounting firm
Reviews the financial results of the Company with the independent registered public accounting firm prior to their public release and filling of reports with the SEC
Directs and supervises special investigations
Oversees accounting, internal accounting controls, auditing matters, reporting hotline and corporate compliance programs
See the Audit Committee Report on page 58 for further information regarding the Audit Committee’s activities.
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The Compensation Committee administers our executive incentive compensation programs and determines, either as a committee or together with the other independent board members, annual base salaries and incentive compensation awards for our executive officers.
Compensation Committee Functions:
Review and approve compensation of executive officers of the Company
Review and approve the CEO’s compensation-related corporate goals
Evaluate the CEO’s performance
Establish and administer the Company’s policies, programs and procedures for compensating its executive officers
Evaluate new director candidates and incumbent directors
Review and approve equity award grants
Review, assess and monitor the Company’s Stock Ownership Guidelines
Oversee regulatory compliance with respect to compensation matters
Oversee shareholder communications regarding executive compensation matters
Retain outside consultants regarding executive compensation and other matters
Corporate Governance and Nominating Committee
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The Governance Committee assists the Board in developing and implementing corporate governance guidelines, identifying potential director candidates, determining the size and composition of our Board and its committees, and evaluating the overall effectiveness of our Board.
Governance Committee Functions:
Evaluate new director candidates and incumbent directors
Recommend nominees to serve on the Board as well as members of the Board’s committees to the independent directors of the Board
Recommend and monitor participation in continuing education programs by the directors
Committee Charters and Policies
The Board has adopted written charters for each of the Audit Committee, the Compensation Committee and the Governance Committee. Each committee reviews and evaluates the adequacy of its charter at least annually and recommends any proposed changes to the Board for approval. Each of the written charters and policies of the Audit Committee, the Compensation Committee, and the Governance Committee are available on the “Corporate Governance” page accessed from the “Investor Relations” page of the Company’s website at: www.myersindustries.com.
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Recommend nominees to serve on the Board as well as members of the Board’s committees to the independent directors of the Board
Recommend and monitor participation in continuing education programs by the directors
Committee Charters and Policies
The Board has adopted written charters for each of the Audit Committee, the Compensation Committee and the Governance Committee. Each committee reviews and evaluates the adequacy of its charter at least annually and recommends any proposed changes to the Board for approval. Each of the written charters and policies of the Audit Committee, the Compensation Committee, and the Governance Committee are available on the “Corporate Governance” page accessed from the “Investor Relations” page of the Company’s website at: www.myersindustries.com.
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The Company has structured its non-employee director compensation to attract and retain highly qualified directors and to compensate directors for their service, while also aligning the interests of the directors to the long-term interests of the Company’s shareholders.
In addition to the compensation provided to our non-employee directors, which is described below, our Amended and Restated Code of Regulations provides that we will indemnify, to the fullest extent then permitted by law, any of our directors or former directors who was or is a party or is threatened to be made a party to any matter, whether civil or criminal, by reason of the fact that the individual is or was a director of the Company, or serving at our request as a director of another entity. We have entered into indemnity agreements with each of our directors contractually obligating us to provide such protection. We also currently have in effect director and officer insurance coverage.
2017 Non-Employee Director Compensation
Under our 2017 Incentive Stock Plan of Myers Industries, Inc., as Amended and Restated (the “2017 Plan”), each non-employee director who holds such position until the date of the Annual Meeting of the shareholders, and has been a director for the entire period since the Annual Meeting of shareholders of Myers Industries that was held in the immediately preceding calendar year, will be awarded annually, on the date of the Annual Meeting of shareholders, shares of our common stock at a value recommended by the Compensation Committee and approved by the Board. The value of common stock awarded at the 2017 Annual Meeting was $72,500 for each director entitled to an award. A director compensation to attract and retain highly qualified directors and to compensate directors for their service, while also aligning the interests of the directors to the long-term interests of the Company’s shareholders.
In addition to the compensation provided to our non-employee directors, which is described below, our Amended and Restated Code of Regulations provides that we will indemnify, to the fullest extent then permitted by law, any of our directors or former directors who was or is a party or is threatened to be made a party to any matter, whether civil or criminal, by reason of the fact that the individual is or was a director of the Company, or serving at our request as a director of another entity. We have entered into indemnity agreements with each of our directors contractually obligating us to provide such protection. We also currently have in effect director and officer insurance coverage.
2018 Non-Employee Director Compensation
The Company’s non-employee director compensation program maintained in 2018 reflected the recommendations of the Compensation Committee’s compensation consultant based on the consultant’s assessment of market competitiveness. The analysis included pay levels and prevalent practices for retainers, fees, equity-based compensation, and stock ownership guidelines, and affirmed that the Company’s non-employee director compensation program is structured in a manner consistent with good governance, continues to be aligned with best practices, and meets the needs of the Board.
For 2018, each non-employee director received an annual cash retainer of $55,000 and an equity based award under our 2017 Incentive Stock Plan of Myers Industries, Inc., as Amended and Restated (the “2017 Plan”) of $75.000. Directors who are employees of the Company do not receive any annual retainer. Director cash retainers are paid quarterly in arrears.
Until 2018, the equity based award was granted annually in arrears at the end of the non-employee directors’ terms in connection with our Annual Meeting of Shareholders. In 2018, the Compensation Committee recommended, and the Board agreed, to adopt a more customary practice of granting the equity based award at the beginning of the directors’ terms upon election at our Annual Meeting of Shareholders, subject to vesting on the first anniversary of the grant, conditioned on each director’s continued service through the vesting date. Accordingly, in 2018 each non-employee director received an equity based award for their prior year of service which vested immediately, and an equity based award for their upcoming year of service which is subject to vesting at the 2019 Annual Meeting of Shareholders. The target value of each equity based award in 2018 was $75,000, based on the fair market value of our common stock on the grant date. Directors may elect to receive an equivalent number of stock units rather than shares of common stock, with payment to be made with respect to such stock unit when such director ceases to be a member of the Board. For non-employee directors who join the Board between annual meeting dates, the annual equity award is prorated for the portion of the term that such director serves.
The cash portions of our non-employee directors’ annual, committee member, and committee chair retainers for 2018 is set forth below. In 2018, the Board established a Finance Committee as a temporary Ad-Hoc Board committee to provide oversight and guidance with respect to the Company’s May 2018 public offering of 4,000,000 shares of its common stock. The Compensation Committee determined, and the Board approved, the annual retainers set forth below for participation in this and other future Ad Hoc committees, pro rated for the duration of service on such committees over a calendar year.
Compensation Type | 2018 Director Compensation | |
Annual Cash Retainer | $55,000 | |
Annual Equity Based Award | $75,000 | |
Supplemental Annual Cash Retainer | ||
Committee Members | $10,000 | |
Chair of Audit Committee | $20,000 | |
Chair of Compensation Committee | $20,000 | |
Chair of Governance & Nominating Committee | $16,000 | |
Board Chair | $90,000 (including committee fees) | |
Ad-Hoc Committee Members | $10,000 | |
Ad-Hoc Committee Chairman | $15,000 |
The following table shows the compensation paid to our non-employee directors during fiscal year 2018.
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NON-EMPLOYEE DIRECTOR COMPENSATION FOR FISCAL YEAR 2018
Name |
| Fees Earned or Paid in Cash ($) |
| Stock Awards ($)(1) |
| Non-Equity Incentive Plan Compensation ($) |
| Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) |
| All Other Compensation ($) |
| Total ($) |
Sarah R. Coffin |
| 83,875 |
| 150,044(2) |
| — |
| — |
| — |
| 233,919 |
John B. Crowe |
| 44,938(3) |
| 75,022 |
| — |
| — |
| — |
| 119,960 |
Ronald M. De Feo |
| 10,598(4) |
| 55,985 |
| — |
| — |
| — |
| 66,583 |
William A. Foley |
| 74,375 |
| 150,044(5) |
| — |
| — |
| — |
| 224,419 |
Daniel R. Lee |
| 42,026(6) |
| 75,022 |
| — |
| — |
| — |
| 117,048 |
F. Jack Liebau, Jr. |
| 146,875(7) |
| 150,044 |
| — |
| — |
| — |
| 296,919 |
Bruce M. Lisman |
| 91,963(8) |
| 150,044 |
| — |
| — |
| — |
| 242,007 |
Lori Lutey |
| 3,872(9) |
| 49,997 |
| — |
| — |
| — |
| 53,869 |
Jane Scaccetti |
| 74,375 |
| 150,044 |
| — |
| — |
| — |
| 224,419 |
Robert A. Stefanko |
| 93,875(10) |
| 150,044 (11) |
| — |
| — |
| — |
| 243,919 |
(1) | Except as otherwise noted, Stock Award amounts do not reflect compensation actually received by the directors. For non-employee directors who served on the Board in both 2017 and 2018, the amounts shown reflect the equity compensation for both of those years of service. The amounts shown reflect the fair market value of (i) 3,081 shares of common stock awarded in arrears on April 25, 2018 to the non-employee directors for their service for the prior year, and (ii) 3,081 restricted stock units awarded to the non-employee directors on April 25, 2018, with respect to their current service commencing on that date until the 2019 Annual Meeting of Shareholders, at which time their awards will vest. |
(2) | Ms. Coffin deferred the receipt of common stock for her Stock Award in fiscal years 2017 and 2018, and instead received stock units. On the date that she ceases to be a member of the
(3) |
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(4) | Fees paid to Mr. De Feo for his service for the period beginning August 2, 2018. The amount of Stock Awards shown reflects the fair market value of 2,574 restricted stock units awarded to Mr. De Feo, pro rata for fiscal year 2018, with respect to his current service commencing on August 2, 2018 until the 2019 Annual Meeting of Shareholders, at which time his awards will |
(5) | Mr. Foley deferred the receipt of common stock for his Stock Award in fiscal years 2017 and 2018, and instead received stock units. On the date that he ceases to be a member of the |
(6) | Fees paid to Mr. Lee for his service until the 2018 Annual Meeting of Shareholders. |
(7) | Fees Earned or Paid in Cash includes fees in the amount of $10,000 for Mr. Liebau’s service as a member of the Finance Committee, an Ad Hoc committee established for 2018. |
(8) | Fees Earned or Paid in Cash includes fees in the amount of $15,000 for Mr. Lisman’s service as Chairman of the Ad-Hoc Finance Committee, an Ad Hoc committee established for 2018. |
(9) | Fees paid to Ms. Lutey for her service for the period beginning September 12, 2018. The amount of Stock Awards shown reflects the fair market value of 2,123 restricted stock units awarded to Ms. Lutey, pro rata for fiscal year 2018, with respect to her current service commencing on September 12, 2018 until the 2019 Annual Meeting of Shareholders, at which |
(10) | Fees Earned or Paid in Cash includes fees in the |
(11) | Mr. Stefanko deferred the receipt of common stock for his Stock Award in fiscal years 2017 and 2018, and instead received stock units. On the date that he ceases to be a member of
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PROPOSAL NO. 2 — ADVISORY VOTE TOO APPROVE EXECUTIVE COMPENSATION
Myers Industries provides, pursuant to Section 14A of the Securities Exchange Act of 1934, shareholders with the opportunity to cast an annual advisory vote on executive compensation (“Say-on-Pay”). The Compensation Committee has designed an executive compensation program (described further in the Compensation Discussion & Analysis (“CD&A”) and tabular disclosures of this Proxy Statement) designed as follows:
Executive Compensation Objectives |
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2017 Pay for Performance Highlights
In deciding how to cast your vote on this proposal, the Board requests that you consider the structure of the Company's executive compensation program as it aligned with our 2017 performance.
The Company has developed a long-term strategic vision for the Company and the Company’s compensation program is designed to compensate the Company’s NEOs in a manner consistent with the Company’s mission and long-term strategic vision. 2017 was a transformative year for Myers Industries in which we made meaningful progress towards executing our strategy centered on a niche market focus, flexible operations through the use of an asset-light business model, and strong cash flow growth. Our accomplishments in 2017, among others, were:
Generated double-digit year-over-year sales growth in our niche Consumer and Food & Beverage markets and generated high single-digit year-over-year sales growth in our niche Vehicle market
Restructured our operating footprint eliminating three facilities and generating labor, overhead and transportation savings
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Reduced debt by $38.5 million
Reduced working capital by $10 million despite higher sales volume
Increased cash flow from continuing operations by 45% vs. 2016 to $49 million
Incentive payouts were commensurate with the business and financial achievements described above. Based on the Company’s operating growth in 2017 of 6.7% and the achievement of personal performance targets established for the Company’s NEOs, annual incentive awards were earned at 82.5% of the targeted level for the CEO and at 92.5% of the targeted level for the other NEOs. For the Company’s long-term incentive program period ending in 2017, the Company established a three-year performance objective based on the Company’s average ROIC over such period. For the three-year period of 2015 through 2017, the Company achieved a three-year average ROIC of 10.0%. Based on this result, long-term incentive awards were earned at 68% of the targeted level.
Result of 2017 Advisory Vote on Executive Compensation
At the 2017 Annual Meeting of shareholders, approximately 94% of the votes cast on the say-on-pay proposal were voted in favor of the compensation of Myers Industries’ named executive officers.
2018 Advisory Vote on Executive Compensation
We are presenting the following proposal, which gives you, as a shareholder, the opportunity to endorse or not endorse our compensation program for our NEOs by voting “FOR” or “AGAINST” the following resolution.
“RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion & Analysis, compensation tables, and narrative discussion is hereby APPROVED.”
Although the advisory vote is non-binding, the Board values shareholders’ opinions. The Compensation Committee will review the results of the vote and will consider shareholders’ concerns and take into account the outcome of the vote when considering future decisions concerning our executive compensation program.
The advisory Say-on-Pay vote occurs annually, and the next advisory vote will occur at the Annual Meeting in 2019.
The Board of Directors recommends that you vote “FOR” Proposal 2 relating to the approval of the Company’s executive compensation
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EXECUTIVE COMPENSATION AND RELATED INFORMATION
Compensation Discussion and Analysis
In this section, we describe the material components of our executive compensation program for our named executive officers (“NEOs”), whose compensation is set forth in the 2017 Summary Compensation Table and other compensation tables contained in this Proxy Statement.
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The role of the Compensation Committee is to oversee our executive compensation plans and policies, administer our equity plans and approve all compensation for our NEOs.
Compensation Philosophy
The Compensation Committee believes that the Company’s NEOs should be paid in a manner that attracts the best-available talent, drives performance, encourages an appropriate sensitivity to risk and rewards and motivates increases in shareholder value. This philosophy is achieved through the Company’s long-term incentive plan, annual bonus opportunity, base salary and other benefits, which are described in greater detail later in this Proxy Statement. Myers Industries’ NEOs are compensated in a manner consistent with the Company’s strategy, competitive practice, sound compensation governance principles and shareholder interests.
The Compensation Committee’s goals are to:
Attract and retain talented and experienced executives and other key employees whose knowledge, skills and performance are crucial to our success
Ensure
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Base salary
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Annual bonus opportunities
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Long-term incentives, such as equity based long-term performance awards
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Benefits
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Align our executives with shareholders to help ensure that the actual compensation paid to our executive officers is correlatedcorrelates with financial performance and changes in shareholder value (“pay for performance”)
Motivate our executive officers and reward them for achieving short-term and long-term Company goals that will increase shareholder value
Our Strategy and Pay for Performance Approach to Executive Compensation
The Company’s mission is to instill a culture where safety and efficiency are part of every aspect of the business and where employees are empowered to act like owners. The Company has developed a long-term strategic vision for the Company, guided by three key operating principles:
Niche market focus
Flexible operations through the use of an asset-light business model
Strong cash flow growth
The Company’s compensation program is designed to compensate the Company’s NEOs in a manner consistent with the Company’s mission and long-term strategic vision. The Company’s compensation program achieves this through the mixture of base pay, long and short-term incentives, and the provision of other benefits. Base pay and other benefits act to provide sufficient compensation to attract and retain talent. Long-term incentives, which in 2017 comprised approximately 40-60% of our NEOs’ compensation and which are primarily comprised of equity awards, result in executives with an ownership stake in the Company (emphasizing the “act like owners” principle of the Company) and act to drive long-term shareholder value creation. Further, long-term incentive awards are based on performance metrics (EBITDA and free cash flow as a percentage of sales) that support the achievement of the Company’s operating principles. In turn, short-term incentives are tied to the achievement of Company growth and, to a lesser extent, the achievement of individualized performance targets, which targets are created to advance the long-term strategic vision of the Company.
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Performance Highlights and Key Achievements in 2017
2017 was a transformative year for Myers Industries in which we made meaningful progress towards executing our strategy centered on a niche market focus, flexible operations through the use of an asset-light business model, and strong cash flow growth. Our accomplishments in 2017, among others, were:
Generated double-digit year-over-year sales growth in our niche Consumer and Food & Beverage markets and generated high single-digit year-over-year sales growth in our niche Vehicle market
Restructured our operating footprint eliminating three facilities and generating labor, overhead and transportation savings
Divested our Brazil operations, which were non-strategic and generated negative cash flow
Reduced debt by $38.5 million
Reduced working capital by $10 million despite higher sales volume
Increased cash flow from continuing operations by 45% vs. 2016 to $49 million
TSR of the Company outperformed the TSR of the S&P 500 from December 31, 2015 through December 31, 2017, as shown in the chart below:
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As a result of these business and financial achievements, the highlights of our 2017 NEO compensation program were as follows:
Achievement of Performance Objectives: Incentive payouts were commensurate with the business and financial achievements described above
Based on the Company’s operating growth in 2017 of 6.7% and the achievement of personal performance targets established for the Company’s NEOs, annual incentive awards were earned at 82.5% of the targeted level for the CEO and at 92.5% of the targeted level for the other NEOs
For the Company’s long-term incentive program period ending in 2017, the Company established a three-year performance objective based on the Company’s average ROIC over such period. For the three-year period of 2015 through 2017, the Company achieved a three-year average ROIC of 10.0%. Based on this result, long-term incentive awards were earned at 68% of the targeted level
Implementation of Revised Long-Term Performance Metrics and Awards: As disclosed in last year’s Proxy Statement, for the 2017-2019 performance cycle, performance will be determined using three-year cumulative EBITDA (50% weighting) and three-year total free cash flow as a percentage of sales (50% weighting). Additionally, the long-term incentive award mix for executive management is focused on stock price and stock ownership and awards for such performance period are comprised solely of forms of equity (performance restricted stock units, stock options, and restricted stock units)
Checklist of Compensation Practices
Our success depends largely on the contributions of motivated, focused and energized executives all working to achieve our strategic objectives. The Compensation Committee and senior management, with assistance from our independent compensation advisor, develop competitive pay programs for our executives and we follow the basic tenets set forth below:
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Elements of Compensation for 2017
Our executive compensation program consists of several elements designed to provide an integrated and competitive total pay package: base salary, annual bonus, long-term incentives and benefits. A majority of the compensation package for NEOs is performance-based and the metrics are focused on paying for growth.
Description of Compensation Elements
Our 2017 executive compensation program was designed to reinforce the relationship between the interests of our NEOs and our shareholders and is comprised of three primary components: base pay (salary), annual cash bonus and long-term incentives. The objectives and key characteristics of each element of our 2017 executive compensation are summarized below:
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How Compensation is Determined
The Company believes its practices are consistent with the practices of a company of its size, reflect best practices regarding the governance of executive pay programs and reflect the executive pay program’s objectives of delivering competitive and appropriate pay aligned with our shareholders’ interests.
The Compensation Committee refers to market data to benchmark and help establish pay opportunities for the NEOs that are competitive for a company of our size in our industry, and for the role and experience of the individual executive. The Compensation Committee generally considers a range around the market median when establishing compensation levels for the NEOs.
For purposes of establishing target compensation opportunity for fiscal years 2016 and 2017, due to the challenges in determining an appropriate peer group, the Compensation Committee referenced Mercer’s 2014 Q4 Executive Remuneration Survey to assess the competitiveness of the compensation paid to our NEOs. Historically, it has been difficult to establish a peer group of companies that is comparable to the Company in terms of both enterprise size and business complexity.
As part of its annual review and consideration of the benchmarking process used to assess the Company’s pay levels and pay programs for its executives, the Compensation Committee and its independent compensation consultant developed a peer group comprised of companies operating in the Company’s industries and of comparable size, focus and/or complexity. This peer group will be used for executive compensation benchmarking purposes starting in fiscal year 2018.
$ in millions
Company Name | Industry | Revenue | Market Cap |
Park-Ohio Holdings Corp. | Industrial Machinery | $1,413 | $527 |
Advanced Drainage Systems, Inc. | Building Products | $1,324 | $1,482 |
Milacron Holdings Corp. | Industrial Machinery | $1,234 | $1,501 |
Standard Motor Products, Inc. | Auto Parts & Equipment | $1,116 | $1,081 |
Neenah, Inc. | Paper Products | $980 | $1,348 |
Dorman Products, Inc. | Auto Parts & Equipment | $903 | $2,434 |
Chart Industries, Inc. | Industrial Machinery | $988 | $1,851 |
Alamo Group Inc. | Construction Machinery & Heavy Trucks | $912 | $1,321 |
Altra Industrial Motion Corp. | Industrial Machinery | $876 | $1,360 |
TriMas Corporation | Industrial Machinery | $818 | $1,193 |
Stoneridge, Inc. | Auto Parts & Equipment | $824 | $692 |
OMNOVA Solutions Inc. | Specialty Chemicals | $783 | $482 |
Commercial Vehicle Group, Inc. | Construction Machinery & Heavy Trucks | $720 | $328 |
Lindsay Corporation | Agricultural & Farm Machinery | $511 | $990 |
Motorcar Parts of America, Inc. | Auto Parts & Equipment | $421 | $403 |
The Gorman-Rupp Company | Industrial Machinery | $380 | $765 |
Core Molding Technologies, Inc. | Commodity Chemicals | $162 | $143 |
For purposes of the 2018 peer group analysis:
| 2017 Revenue | 2017 Market Cap |
Myers Industries | $547 | $662 |
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Consistent with the objectives of our executive pay philosophy of attracting and retaining talented and experienced executives and other key employees, paying for performance, motivatingmotivate our executive officers to achieve short-term and long-term Company goals that will increase shareholder value by providing:
O Short-term performance incentives with objective performance goals through an annual bonus plan focused on operating performance
O Long-term performance incentives that provide rewards for achieving long-term strategic initiatives through the use of performance based stock units, stock option grants, and rewardingother service based awards under our 2017 Plan
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Long-term incentives, such as equity based performance awards, stock option grants, and other service based awards
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Annual cash bonus opportunities
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Reward executives whose knowledge, skills and performance are crucial to our success actual compensation may be above
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Base salary
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Annual bonus opportunities
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Long-term incentives, such as equity based performance awards
Result of 2018 Advisory Vote on Executive Compensation
At the 2018 Annual Meeting of shareholders, over 98% of the votes cast on the Say-on-Pay proposal were voted in favor of the compensation of our named executive officers.
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2019 Advisory Vote on Executive Compensation
We are presenting the following proposal, which gives you, as a shareholder, the opportunity to endorse or not endorse our compensation program for our NEOs by voting “FOR” or “AGAINST” the following resolution.
“RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion & Analysis, compensation tables, and narrative discussion is hereby APPROVED.”
Although the advisory vote is non-binding, the Board values shareholders’ opinions. The Compensation Committee will review the results of the vote and will consider shareholders’ concerns and take into account the outcome of the vote when considering future decisions concerning our executive compensation program.
Our advisory Say-on-Pay vote occurs annually, and the next advisory vote will occur at the Annual Meeting in 2020.
The Board of Directors recommends that you vote “FOR” Proposal 2 relating to the approval of the Company’s executive compensation
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EXECUTIVE COMPENSATION AND RELATED INFORMATION
Compensation Discussion and Analysis
In this section, we describe the material components of our executive compensation program for our named executive officers (“NEOs”), whose compensation is set forth in the 2018 Summary Compensation Table and other compensation tables contained in this Proxy Statement.
NAMED EXECUTIVE OFFICERS (“NEOs”) | |
R. David Banyard | President and Chief Executive Officer |
Matteo Anversa | Former Executive Vice President, Chief Financial Officer and Corporate Secretary(1) |
Kevin Brackman | Executive Vice President and Chief Financial Officer(1) |
Andrean Horton | Executive Vice President, Chief Legal Officer and Secretary(2) |
(1)Mr. Anversa served as Executive Vice President & Chief Financial Officer and as Corporate Secretary through December 11, 2018 and October 8, 2018, respectively, at which time he resigned from those offices. Mr. Brackman served as Vice President and Chief Accounting Officer through December 11, 2018 at which time he was appointed Executive Vice President and Chief Financial Officer. | |
(2)Ms. Horton was employed by the Company as Executive Vice President, Chief Legal Officer and Secretary on October 8, 2018. | |
The main role and responsibilities of the Compensation Committee is to oversee our executive compensation plans and policies, administer our equity plans, and approve all compensation for our NEOs.
The Compensation Committee believes that the Company’s NEOs should be paid in a manner that attracts the best-available talent, drives performance, encourages an appropriate sensitivity to risk, and encourages and rewards increases in shareholder value. This philosophy is achieved through the Company’s base salary, annual bonus opportunity, long-term incentive plan and other benefits, which are described in greater detail later in this Proxy Statement. Myers Industries’ NEOs are compensated in a manner consistent with the Company’s strategy, competitive practice, sound compensation governance principles, and shareholder interests.
The Compensation Committee’s goals are to:
Attract and retain talented and experienced executives and other key employees whose knowledge, skills and performance are crucial to our success
Ensure that the actual compensation paid to our executive officers correlates with financial performance (“pay for performance”)
Motivate our executive officers to pursue, and reward them for achieving, short-term and long-term Company goals that are intended to deliver shareholder value
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Our Strategy and Pay for Performance Approach to Executive Compensation
The Company’s mission is to instill a culture where safety and efficiency are part of every aspect of the business and where employees are empowered to act like owners. The Company has developed a long-term strategic vision for the Company, guided by three key operating principles:
Niche market focus
Flexible operations through the use of an asset-light business model
Strong cash flow growth
The Company’s compensation program is designed to compensate the Company’s NEOs in a manner consistent with the Company’s mission and near and long-term strategic vision. The Company’s compensation program seeks to achieve this through the mixture of base pay, short and long-term incentives, and the provision of other benefits. Base pay and other benefits provide appropriate compensation to attract and retain talent. Short-term incentives are tied to the achievement of Company growth with targets intended to advance the long-term strategic vision of the Company. Long-term incentives, which in 2018 comprised approximately 40-60% of our NEOs’ compensation and which are primarily comprised of equity awards, provide executives with an ownership stake in the Company (emphasizing the “act like owners” principle of the Company) and help drive long-term shareholder value creation. Further, long-term incentive awards are based on performance metrics (EBITDA and free cash flow as a percentage of sales) that support the achievement of the Company’s operating principles.
Performance Highlights and Key Achievements in 2018
In 2018, we continued to execute on our strategy centered on a niche market focus, flexible operations through the use of an asset-light business model, and strong cash flow growth. As a result, we achieved the following:
Generated double-digit year-over-year sales growth in our Food & Beverage market, leading to an increase in net sales of 6.6% in our Material Handling Segment and 3.6% overall
Launched a new product in our Consumer market that is expected to drive mid-single-digit sales growth in that market in 2019
Expanded our gross margin by 280 basis points to 31.6% as a result of pricing initiatives and 80/20 and lean continuous improvement actions, combined with the benefits of the strategic footprint realignment that we completed in 2017
Improved adjusted operating income from $31.5 million in 2017 to $40.4 million in 2018, a 28.5% increase (excluding $33.3 million of charges related to the 2015 sale of the Company’s Lawn and Garden business)
Reduced total debt by $74.2 million, or 49.2%
Reduced our leverage ratio to 1.2x as defined by our current debt agreements
Increased cash provided by operating activities of continuing operations by 22.9% to $60.4 million, driven by a reduction in working capital of $5.9 million, or 21.6%, despite higher sales
Completed public offering of 4.6 million shares of our common stock at $18.50 per share with net proceeds of approximately $79.5 million.
In addition, we also announced a set of strategic transformation actions for our Distribution segment. The actions are expected to be implemented by the end of 2019 and include a new go-to-market strategy, a contribution margin improvement initiative, and an overhead and logistics optimization plan. The goal of the transformation is to reach a 10% EBITDA margin run-rate in 2020.
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As a result of these business and financial achievements, the highlights of our 2018 NEO compensation program were as follows:
Achievement of Performance Objectives: Incentive payouts were commensurate with the business and financial achievements described above:
Based on the Company’s adjusted operating income growth in 2018 of 28.5% compared to the growth goals of 8.0% at target and 23.0% at maximum, incentive awards under our 2018 Incentive Plan were earned at 200.0% of the targeted level for the CEO and at 200.0%% of the targeted level for the other NEOs.
For the Company’s long-term incentive program three-year performance period ending in 2018, the Company achieved a one-year ROIC of 13% and a three-year average ROIC of 10.7% which, based on the target level of 13.7%, resulted in vesting of our long-term incentive awards at 70% of the three year targeted level.
Revised Long-Term Performance Metrics and Awards: Beginning with the three-year performance cycle ending in 2019, long-term incentive performance will be determined using three-year cumulative EBITDA and three-year total free cash flow as a percentage of sales, with each metric weighted at 50%. Additionally, the long-term incentive awards for such performance period are comprised solely of forms of equity (performance restricted stock units, stock options, and time-based restricted stock units)
Checklist of Compensation Practices
Our success depends largely on the contributions of motivated, focused and energized executives all working to achieve our strategic objectives. The Compensation Committee and senior management, with assistance from our independent compensation advisor, develop competitive pay programs for our executives and we follow the basic tenets set forth below:
WHAT WE DO | WHAT WE DON’T DO |
Link Pay to Performance | Enter into Employment Contracts |
Limited Post-Employment/Change in Control Provisions | Offer Tax Gross-Ups |
Grant Awards with Double Trigger Change in Control Provisions | Reprice Underwater Options |
Impose Stock Ownership Guidelines | Allow Cash Buyouts of Underwater Options |
Retain an Independent Compensation Advisor | Permit Short Sales by Directors, Officers, or |
Tally Sheets to Evaluate and Monitor NEO Compensation | Offer Perquisites |
Maintain an Executive Compensation Clawback Policy | Allow Hedging or Pledging of Company Stock |
Elements of Compensation for 2018
Our executive compensation program consists of several elements designed to provide an integrated and competitive total pay package: base salary, annual bonus, long-term incentives and benefits. A majority of the compensation package for NEOs is performance-based and the metrics are focused on paying for growth.
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Description of Compensation Elements
Our 2018 executive compensation program was designed to reinforce the relationship between the interests of our NEOs and our shareholders and is comprised of three primary components: base pay (salary), annual cash bonus and long-term incentives. The objectives and key characteristics of each element of our 2018 executive compensation are summarized below:
Type of Pay & Form | Performance Periods | Objectives | |||||
Fixed | Base Pay (cash) | 1 year | • | Compensation for | |||
• | Recognizes individual skills, competencies, and | ||||||
• | Generally determined based on an | ||||||
• | May be influenced/changed as | ||||||
At Risk | Annual Bonus (cash) | 1 year | • | Variable cash compensation tied to the achievement of annual corporate operational goals (the Company’s adjusted operating income growth and three-year average ROIC) established by the Compensation Committee each fiscal year to support long-term value creation | |||
• | Aligns interests of executives | ||||||
Long-Term Incentives (performance stock unit awards, stock options, and restricted stock unit awards) | 3 years | • | Motivates and rewards leaders for increasing shareholder value and returns while promoting our long-term interests by aiding in the retention of high-quality executives | ||||
• | Reflects the belief that a significant component of executive compensation | ||||||
• | Helps build executive stock ownership, consistent with | ||||||
Encourages retention through multi-year vesting | |||||||
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We believe in linking pay for performance. The following graphs indicate the percentage of each NEO’s total target direct compensation that is attributable to base salary, target bonus, and target long-term incentives. For Mr. Anversa the percentages shown were applicable during his service as Chief Financial Officer through December 11, 2018, for Mr. Brackman the percentages shown are as adjusted effective December 11, 2018 in connection with his appointment as Chief Financial Officer, and for Ms. Horton, the percentages shown are those effective for 2019 -- Ms. Horton did not receive any long-term incentive awards in 2018 due to her employment commencement date of October 8, 2018.
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How Compensation is Determined
The Company believes its practices are consistent with the practices of a company of its size, reflect best practices regarding the governance of executive pay programs and reflect the executive pay program’s objectives of delivering competitive and appropriate pay aligned with our shareholders’ interests.
The Compensation Committee refers to market data to benchmark and help establish pay opportunities for the NEOs that are competitive for a company of our size in our industry, and for the role and experience of the individual executive. The Compensation Committee generally considers a range around the market median when establishing compensation levels for the NEOs.
As part of its annual review and consideration of the benchmarking process used to assess the Company’s pay levels and pay programs for its executives, the Compensation Committee and its independent compensation consultant conduct an executive compensation market analysis that draws from third-party compensation surveys and publicly available data for a group of peer companies. For fiscal 2018, the compensation peer group was developed with consideration to various quantitative and qualitative criteria, including: (1) companies within 1/3x to 3x the Company’s revenue, (2) companies operating within the Company’s industries and end-markets, and (3) companies with similar focus and/or business complexity. Our Compensation Committee regards the Company’s comparison to these companies as reference points only because finding direct publicly-traded peers within the lower end of our revenue range is difficult and does not seek to establish any specific benchmark in reference to these companies or to require changes in our executive compensation to match changes in these companies’ compensation.
This peer group will continue to be used for executive compensation benchmarking purposes for fiscal year 2019.
$ in millions
Company Name | Industry | Revenue | Market Cap |
Park-Ohio Holdings Corp. | Industrial Machinery | $1,618 | $373 |
Advanced Drainage Systems, Inc. | Building Products | $1,365 | $1,386 |
Milacron Holdings Corp. | Industrial Machinery | $1,272 | $841 |
Chart Industries, Inc. | Industrial Machinery | $1,210 | $2,029 |
Standard Motor Products, Inc. | Auto Parts & Equipment | $1,085 | $1,086 |
Neenah, Inc. | Paper Products | $1,038 | $994 |
Alamo Group Inc. | Construction Machinery & Heavy Trucks | $996 | $907 |
Dorman Products, Inc. | Auto Parts & Equipment | $941 | $2,966 |
Altra Industrial Motion Corp. | Industrial Machinery | $930 | $1,621 |
Stoneridge, Inc. | Auto Parts & Equipment | $863 | $702 |
Commercial Vehicle Group, Inc. | Construction Machinery & Heavy Trucks | $862 | $176 |
TriMas Corporation | Industrial Machinery | $861 | $1,250 |
OMNOVA Solutions Inc. | Specialty Chemicals | $765 | $329 |
Lindsay Corporation | Agricultural & Farm Machinery | $535 | $1,035 |
Motorcar Parts of America, Inc. | Auto Parts & Equipment | $443 | $315 |
The Gorman-Rupp Company | Industrial Machinery | $406 | $846 |
Core Molding Technologies, Inc. | Commodity Chemicals | $235 | $58 |
| 2018 Revenue | 2018 Market Cap |
Myers Industries | $567 | $534 |
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Consistent with the objectives of our executive pay philosophy of attracting and retaining talented and experienced executives and other key employees, paying for performance, motivating our executive officers to achieve short-term and long-term Company goals that will increase shareholder value and rewarding executives whose knowledge, skills and performance are crucial to our success, actual compensation may be above or below the median for executives in similar roles at companies of similar size and complexity, depending on an evaluation of several factors including, but not limited to, time-in-position, experience, performance, and future potential. We believe this approach is appropriate as it attracts and retains key executives, but does not position our compensation costs out of line with performance.
Base salary provides a fixed element of compensation that competitively rewards our NEOs’ individual skills, competencies, experience and performance. Additionally, the base salaries provide our NEOs with income regardless of the Company’s stock price performance, which acts as a risk-balancing measure in that it helps to avoid incentives to create short-term stock price fluctuations. Furthermore, it helps mitigate elements beyond the control of the Company, like general economic and stock market conditions unrelated to Company performance.
The Company does not have written employment agreements with our NEOs. The Board and Compensation Committee annually review the performance of the CEO and the CEO’s corporate goals and objectives and, in connection with this review, may recommend a merit-based increase to the CEO’s base salary.
For the other NEOs, base salary adjustments are based on recommendations by the CEO to the Compensation Committee. In making such adjustments, the Company’s performance and the individual NEO’s scope of work, performance and competitive benchmarks are considered.
In 2018, Mr. Brackman was the only NEO who received a base salary increase as shown in the table below. Neither Mr. Banyard nor Mr. Anversa received an increase in base salary in 2018 based on peer benchmarking. Ms. Horton’s base salary was established at $375,000 upon her appointment as Executive Vice President, Chief Legal Officer and Secretary on October 8, 2018.
2018 NEO Base Salary Increases
Name | Date | Reason | % Increase | Salary |
Kevin Brackman(1) | March 2018 | Merit and Adjustment(1) | 5.9% | $278,400 |
| December 2018 | Promotion | 25.7% | $350,000 |
(1) Mr. Brackman’s base salary increase included a 2.8% merit-based increase and a 3.1% adjustment upon the elimination of his eligibility to receive reimbursement for automobile related expenses.
The Company’s annual incentive plan is a cash incentive plan in which our NEOs, alongside other senior level employees, participate. The annual incentive plan is intended to reward management primarily for annual business growth that will help us achieve our long-term objectives.
Annual Bonus Performance Metrics
For 2018 annual bonuses, performance was determined using the following metric:
Measure | Alignment with Business Strategy | Weighting |
Operating Income Growth | Operating income growth supports the Company’s objective of cash flow growth and allows the Company to reward business performance | 100% |
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Annual Bonus Performance – 2018 Objectives and Achievements
The Compensation Committee annually approves a target bonus opportunity for each NEO. Annual performance targets were established for achieving operating income growth. As part of the annual bonus performance goal-setting process, the Board annually reviews and approves management’s business and financial plan for the Company. The minimum and maximum ranges are intended to appropriately reward for results that exceed or fall short of target expectations. Bonuses can range from 0% to 200% of target, depending on actual performance, a practice that is consistent with the range of annual bonus opportunities of other companies our size.
Goals are intended to reward for growth and business performance, consistent with the Company’s strategy, and motivate management with additional compensation opportunities without encouraging excessive risk-taking. We reward our executives with higher levels of cash compensation for results that substantially exceed target results. Conversely, we pay relatively lower levels of cash compensation for results that fail to meet minimally acceptable performance expectations.
Our 2018 goals were set first by establishing that growth is a critical element of success. As a step toward a long term trajectory in growth for 2018, the company set an 8% growth goal target and a 23% growth goal maximum. To incentivize our team to provide growth, we also set a threshold of 0%, which is above our industry’s historical performance level of -2% at the 25th percentile.
The following table illustrates the Company’s 2018 adjusted operating income growth results and impact on the Company’s annual incentive plan payout:
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| Fiscal Year 2018 Goals (%) |
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Performance Metric |
| Threshold |
| Target |
| Maximum |
| 2018 Actual Results |
| Payout |
Operating Income Growth (%) |
| 0% |
| 8% |
| 23% |
| 28.5% |
| 200.0% |
For recent years prior to 2018, the Compensation Committee had considered the individual performance of each named executive officer based on achievement against individual performance objectives. For 2018, the Compensation Committee eliminated this individual performance element and based 100% of the annual bonus opportunity on the objective financial metric of operating income growth.
Based on the Compensation Committee’s determination of the results above, the named executive officers earned bonus awards for 2018 as follows:
Name |
| Base Salary | Target Award (% of Base | Weighted Achievement Level (% of Target) | Actual Earned Award | |||
R. David Banyard | $718,940.00 | 100% | 200% | $ 1,437,880 | ||||
Matteo Anversa | $425,000.00 | 70% | 0% | $ 0(1) | ||||
Kevin Brackman | $278,400.00 $350,000.00 | 60% 60% | 200% | $ 339,023(2) | ||||
Andrean Horton | $375,000.00 | 60% | 200% | $ 104,795(3) |
(1) | Mr. Anversa was not eligible to receive a |
(2) | Mr. Brackman’s award earned was pro-rated to reflect the
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Annual Bonus – 2019 Structure and Objectives
For the 2019 annual bonus plan, the Compensation Committee has determined to retain a single objective financial performance metric based on growth in operating income and has increased the goals for that metric to encourage continued corporate improvement consistent with the Company’s business and financial plans. The plan goals for 2019 are 11.6% growth in operating income at target (100%), 34.0% growth at maximum (200%), and a 0% threshold (for maintaining our 2018 operating income level of $40.4 million). Our goal is to continue to drive above-market levels of growth, and the Company has determined that the targeted growth level exceeds comparable recent performance levels of our peer group. The Compensation Committee has also determined to reintroduce in 2019 a qualitative element for each named executive officer based on personal performance goals established for the executive at a weighting of 20% of each executive’s total annual bonus opportunity. Payouts under this qualitative element will be based on evaluations of individual performance relative to each executive’s qualitative performance goals also within a range of 0% to 200% for this element. The Committee well understands the need to align incentive compensation with objective financial performance, but also believes that including a qualitative element allows both the Committee and executive management to guide and assess continuous improvement in personal performance of the Company’s leadership team.
The Company’s long-term incentive plan was established to, among other things, encourage management to drive long-term shareholder value and to align management’s interests with shareholders’ interests, emphasizing the “act like owners” principle of the Company. The long-term incentive plan is intended to motivate and reward leaders for increasing shareholder value and returns. The Company believes the Company’s shareholders and employees are both best served by having our NEOs focused on and rewarded based on the achievement of longer-term results of the Company. To accomplish this, the Board has, over the years, awarded a blend of stock options, service-based restricted stock units, performance restricted stock units, and performance-based long-term cash incentives to NEOs. In particular, the use of stock options, service-based restricted stock units and performance restricted stock units are designed to meet specific reward objectives:
50% Weighting: Long-term performance restricted stock units are intended to reward our executives for achieving financial goals over a multi-year period. Long-term performance restricted stock units vest at the end of the three-year period and are based on the achievement of pre-established objectives over a three-year period
30% Weighting: Stock options align our executives' interests with those of our shareholders because options only produce rewards to our executives if our stock price increases after options are granted. We believe options are performance-based awards, because the stock price appreciation that produces gains to the executive can generally be achieved if the Company's operating and financial results improve. In addition, options help build long-term executive stock ownership. Stock options vest ratably on the first three anniversaries of the grant and are exercisable within ten years following their grant, consistent with our historical terms for option grants
20% Weighting: Service-based restricted stock unit grants help retain our key executives. Restricted stock units also align our executives to the total returns earned by our investors. Service-based restricted stock unit grants vest ratably over a three year period, are tied to continued service, and provide a strong device for retaining our executives
The Company had previously included long-term performance cash awards in addition to the long-term equity awards. Starting in 2017, the Company stopped granting long-term performance cash awards as part of its long-term incentive plan and moved to a long-term incentive award mix for executive management (including NEOs) solely comprised of equity awards (performance-based restricted stock units, stock options and restricted stock units). However, certain NEOs may be entitled to payouts on long-term performance cash awards under prior performance periods that have not concluded.
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Prior to 2017, our long-term incentive performance metrics were based on a single metric. In 2017 the Compensation Committee revised the long-term incentive performance metrics (as described below). These metrics were adopted to better align with the Company’s strategy, drive consistent performance over time toward achieving objective financial metrics with strong alignment with shareholder value, and to more effectively correlate this performance to compensation. Additionally, these metrics are used by management to assess operating performance of the business.
The following table shows the performance periods for the Company’s long-term incentive programs outstanding as of the end of 2018:
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| 2021 | 3-year cumulative EBITDA | 3-year total free cash flow as a
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For the 2016-2018 performance cycle, average return on invested capital (“ROIC”) targets were adopted to support a focus on returning greater than our cost of capital over time and to supplement the metrics used in the Company’s annual bonus plan.
For the 2017-2019 and 2018-2020 performance cycles, the Compensation Committee changed the long-term performance metrics from three-year average ROIC to three-year cumulative EBITDA and three-year total free cash flow as a percentage of sales. Cumulative EBITDA acts as a measure of the Company’s operating performance with an emphasis on growth, and relates strongly to shareholder return, creating greater alignment between executive compensation and enhancing shareholder value. Free cash flow is defined as cash flow from continuing operations less capital expenditures. Free cash flow as a percentage of sales recognizes the importance of the efficient use of cash to the Company’s ability to fund ongoing investments in our business while incentivizing management to create a business culture that generates strong cash flow year after year. We also believe that cash flow is the strongest measurement of success and has a strong correlation over the long-term to shareholder value.
2018 Long-Term Incentive Mix
Once target values are developed, awards for each long-term element are based on an individual’s position, experience, future potential, organizational level, scope of responsibilities, their ability to impact results, and any special recruiting and retention needs. For the NEOs, the Compensation Committee aimed to emphasize performance-based elements (long-term performance stock and cash incentives) and options over service-based elements (restricted stock units).
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For the Company’s NEOs, the following mix of target long-term incentives were set for 2018:
Long-Term Incentive Performance-Objectives and Achievements for the Three-Year Period Ended in 2018
For the three-year period ending in 2018, as described above, the Company established three-year ROIC performance objectives ranging from 8.7% (minimum) to 18.7% (maximum), with target results achieved at 13.7%. The method for determining the corresponding awards are as follows:
Return on Invested Capital (ROIC): Calculation of Award (Percentage of Target Award): Less than 8.7% 0% 8.7% 50% 8.71%-13.69% 100%, minus the amount, expressed as a percentage, determined by dividing (x) the number of percentage points (not to exceed 5 percentage points) by which the three year average ROIC is lower than 13.7% by (y) 10% 13.7% 100% 13.71%-18.69% 100%, plus the amount, expressed as a percentage, determined by dividing (x) the number of percentage points (not to exceed 5 percentage points) by which the three year average ROIC exceeds 13.7% by (y) 5% 18.7% or more 200% 31
Target ROIC performance reflected the Compensation Committee’s view of an appropriate benchmark based on the Company budget presented to the Committee by management. The Compensation Committee set a reasonable target in the preceding years to challenge management to continuously strive for and drive greater shareholder return.
For the three-year period ending in 2018, the Company achieved a three-year average ROIC of 10.7%, resulting in a settlement percentage of 70% of target. This applies to the cash-based performance award granted to Mr. Brackman in 2016, and a performance share award granted to Mr. Banyard in 2016.
As noted above, for the 2017-2019 and 2018-2020 performance cycles, performance will be determined using three-year cumulative EBITDA (50% weighting) and three-year total free cash flow as a percentage of sales (50% weighting). Additionally, the long-term incentive award mix will be comprised solely of equity and will no longer include long-term cash incentives.
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Invested Capital (ROIC): |
| Calculation of Award (Percentage of Target Award): |
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Less than 8.5% |
| 0% |
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8.5% |
| 50% |
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8.51%-13.49% |
| 100%, minus the amount, expressed as a percentage, determined by dividing (x) the number of percentage points (not to exceed 5 percentage points) by which the ROIC is lower than 13.5% by (y) 5% |
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13.5% |
| 100% |
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13.51%-18.49% |
| 100%, plus the amount, expressed as a percentage, determined by dividing (x) the number of percentage points (not to exceed 5 percentage points) by which the ROIC exceeds 13.5% by (y) 5% |
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18.5% or more |
| 200% |
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Target ROIC performance reflects the Compensation Committee’s view of an appropriate benchmark based on the Company budget presented to the Committee by management. The Compensation Committee set a reasonable target in the preceding years to challenge management to continuously strive for and drive greater shareholder return.
For the three-year period ending in 2017, the Company achieved a three-year ROIC of 10.0%, resulting in the Company’s CAO being awarded 2015-2017 performance cash of 68% of target. Given the CEO’s and CFO’s start dates in December 2015 and December 2016, respectively, they were not eligible for such performance awards.
As noted above, for the 2017-2019 performance cycle, performance will be determined using three-year cumulative EBITDA (50% weighting) and three-year total free cash flow as a percentage of sales (50% weighting). Additionally, the long-term incentive award mix will be comprised solely of equity and will no longer include long-term cash incentives.
2017 Long-Term Incentive Mix
Once target values are developed, awards for each long-term element are based on an individual’s position, experience, future potential, organizational level, scope of responsibilities, their ability to impact results, and any special recruiting and retention needs. For the NEOs, the Compensation Committee aimed to emphasize performance-based elements (long-term performance stock and cash incentives) and options over service-based elements (restricted stock units).
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For the Company’s NEOs, the following mix of target long-term incentives were set for 2017:
Other Benefits
NEOs also participate in broad-based benefit plans that are available to all employees. These benefits are not tied to individual or Company performance, which is the same approach used for other employees. Moreover, changes to executives’ benefits reflect the changes to the benefits of other employees.
The Company’s NEOs participate in the following broad-based benefit plans that provide basic health, life and income security:
The Company maintains qualified and nonqualified retirement programs to provide our NEOs with the basic needs described above. NEOs participate in our qualified retirement plan (a tax-qualified 401(k) plan, pursuant to which all participants are eligible to receive matching contributions from the Company) on the same terms as all of our other employees
Beginning in 2018, each of our NEOs is eligible to participate in the Executive Nonqualified Excess Plan, which is a nonqualified retirement savings plan that allows for deferrals above the IRS limits on qualified plans. This plan is intended to restore deferred compensation benefits that would have been earned under the tax-qualified 401(k) plan but for certain limitations imposed by the Code
NEOs also participate in broad-based benefit plans that are available to all employees, including health insurance and life and disability insurance
The Company provides no executive perquisites, other than a legacy car allowance benefit for one NEO.
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Long-Term Incentive Plan – 2019 Structure and Objectives
For 2019, as the third year of the three-year cycle begun in 2017, the Compensation Committee has determined to continue the general structure of our long-term incentive plan consisting of 50% performance-based restricted stock units, with equally weighted metrics of three-year cumulative EBITDA and three-year total free cash flow as a percentage of sales, 30% stock options, and 20% time-based restricted stock units subject to pro rata three year vesting. The threshold, target and maximum goals established for the 2019 performance based awards exceed the levels of our 2017 and 2018 awards and will be disclosed upon the completion of the three-year performance period ending at December 31, 2021. These rigorous goals are intended to continue to drive the Company’s continued growth and long-term financial success. The Compensation Committee will continue to consider, with input from Semler-Brossy, alternative performance metrics which align with shareholder interests for the performance-based component of the Company’s long-term incentive plan for years after 2019.
NEOs also participate in broad-based benefit plans that are available to all employees. These benefits are not tied to individual or Company performance, which is the same approach used for other employees. Moreover, changes to executives’ benefits reflect the changes to the benefits of other employees.
The Company’s NEOs participate in the following broad-based benefit plans that provide basic health, life and income security:
The Company maintains qualified and nonqualified retirement programs to provide our NEOs with the basic needs described above. NEOs participate in our qualified retirement plan (a tax-qualified 401(k) plan, pursuant to which all participants are eligible to receive matching contributions from the Company) on the same terms as all of our other employees
Beginning in 2018, each of our NEOs is eligible to participate in the Executive Nonqualified Excess Plan, which is a nonqualified retirement savings plan that allows for deferrals above the IRS limits on qualified plans. This plan is intended to restore deferred compensation benefits that would have been earned under the tax-qualified 401(k) plan but for certain limitations imposed by the federal tax laws
NEOs also participate in broad-based benefit plans that are available to all employees, including health insurance and life and disability insurance
The Company provides no executive perquisites.
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Stock Ownership Guidelines | • | A key objective of our pay program in general and our long-term incentive awards in particular is to encourage stock ownership. As a result, we have maintained Stock Ownership Guidelines since 2010 |
• | Under the Stock Ownership Guidelines, our NEOs and non-employee directors are expected to hold a specified amount of our common stock. These expectations are as follows: CEO: 5X annual base salary CFO and CLO: 3X annual base salary Vice Presidents: 1X annual base salary Non-Employee Directors:
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• | The NEOs and non-employee directors have five years from becoming subject to the guidelines to attain the ownership requirement | |
• | In determining stock ownership for purposes of our ownership guidelines, shares owned outright, including shares owned jointly with a spouse or separately by a spouse and/or children that live in the NEO’s household, vested and unvested time-based restricted stock and | |
Accounting and Tax Considerations | • | In December 2017, the Tax Cuts and Jobs Act (the “2017 Tax Act”) was signed into law. Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), as further amended by the 2017 Tax Act, restricts deductibility for federal income tax purposes of annual individual compensation in excess of $1 million to the NEOs, effective for tax years beginning after 2017, subject to a transition rule for written binding contracts which were in effect on November 2, 2017, and which were not modified in any material respect on or after such date |
• | Prior to the adoption of the 2017 Tax Act, Section 162(m)’s deductibility limitation was subject to an exception for compensation that qualified as “performance-based”. In 2013, our shareholders approved the Performance Bonus Plan which was designed to permit us to grant incentive awards that may qualify as “qualified performance-based compensation” for purposes of Section 162(m) of the Code | |
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Risk Assessment of Compensation Practices
In the design and approval of the Company’s executive compensation program, the Compensation Committee considers risks that may be inherent in such program. The Compensation Committee has designed the Company’s compensation program to guard against excessive risk taking. The following are some features of the compensation program that are designed to help the Company manage compensation-related risk:
Using a variety of vehicles for providing compensation, including salary, bonus, and equity-based compensation, comprised of cash and equity based incentives with different vesting periods, which act to focus executives on specific objectives under the Company’s business plan while creating alignment with shareholders
Providing a mixture of fixed and variable, annual and long-term, and cash and equity compensation to encourage behavior and actions that are in the long-term interests of the Company and our shareholders
Placing an emphasis on performance-based awards more than service-based awards to further align the interests of our employees with those of our shareholders
Placing an emphasis on performance-based awards more than service-based awards to further align the interests of our employees with those of our shareholders
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• | Establishing, and reviewing on an annual basis, base salaries to be consistent with an employee’s responsibilities |
Diversifying incentive-based risk by using differing performance measures, including Company financial performance
Determining and awarding incentive award grants based on a review of multiple indicators of performance that diversify the risk associated with any single indicator of performance
As a result, the Compensation Committee believes that the design of the Company’s compensation programs does not encourage our employees to take unnecessary or excessive risks that could harm the long‑term value of Myers Industries.
Timeline and Components of Compensation Decision-Making
The Compensation Committee oversees our executive compensation plans and policies, administers our equity plans, and approves all compensation for our NEOs. An example of the Compensation Committee’s annual agenda is set forth below:
Late Winter/Spring | |||||
• | Establish/approve annual incentive plan goals or targets | • | Approve upcoming year’s annual incentive plan and long-term incentive plan thresholds, targets and maximum goals | ||
• | Approve long-term performance payouts and awards for applicable period | • | Review proxy advisory firm’s pay for performance reports and proxy recommendations | ||
• | Approve long-term incentive plan award levels for NEOs and share pool for all equity awards | • | Review proxy advisory firm feedback | ||
• | Grant of equity incentive awards (generally in late February or early March) | • | Review NEO performance criteria | ||
• | Value of equity awards is determined | ||||
Summer | Fall | ||||
• | Review the results of the Company’s “Say-on-Pay” vote (and any other compensation-related items voted upon at the annual meeting) | • | Review long-term incentive performance metrics | ||
• | Review peer group composition and compensation | ||||
• | Review the Company’s compensation program and consider any changes | ||||
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Parties Involved in Compensation Decision-Making
Role of Compensation Committee | • | Five independent directors comprise our Compensation Committee, which is responsible for overseeing our executive pay plans and policies, administering our equity plans and approving all compensation for our NEOs | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | The Compensation Committee routinely requests information from senior management regarding the Company’s performance, pay and programs to assist it in its actions | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | The Compensation Committee has the authority to retain outside advisors as needed to assist it in reviewing and modifying the Company’s programs and providing competitive pay levels and terms | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | In arriving at its decision on NEO compensation, the Compensation Committee | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | The Compensation Committee annually reviews and establishes the goals used for our annual and long-term incentive plans. The Compensation Committee assesses the performance of the
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• | The Compensation
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• | Finally, the Compensation Committee provides guidance and final approval to the CEO with regard to the determination of
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• | The Company’s CFO and/or CLO may participate as necessary or at the Compensation Committee’s request | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | The Company’s management normally provides the Compensation Committee with information regarding the Company’s performance as well as information regarding executives who participate in | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Management provides input regarding the recommendations made by independent advisors or the Compensation Committee | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Management implements, communicates and administers the programs approved by the Compensation Committee, reporting back to it any | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | The CEO annually evaluates the performance of the | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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• | The Compensation Committee has the authority to retain independent advisors and compensation
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In August of 2017, the Compensation Committee | ||
• | Semler Brossy’s lead consultant reports directly to the Compensation Committee Chair, who approves Semler Brossy’s annual work plan | |
• | In addition, the lead consultant interacted with management as needed to complete the work requested by the Compensation Committee | |
• | Semler Brossy did not provide other services to the Company during 2018 and received no compensation other than with respect to the services provided to the Compensation Committee | |
• | The work of Semler Brossy has not raised any conflicts of interest |
Compensation Committee Interlocks and Insider Participation
At the end of fiscal year 2018, the following directors were members of the Compensation Committee: Sarah R. Coffin, Ronald DeFeo, William A. Foley, Bruce M. Lisman, and Robert A. Stefanko. Chairman F. Jack Liebau, Jr. participates on the Compensation Committee in an ex officio capacity. None of the Compensation Committee’s members have at any time been an officer or employee of the Company. In the past fiscal year, none of our NEOs have served as a member of the board of directors or compensation committee of any entity that has one or more NEOs serving on the Company’s Board or Compensation Committee.
Compensation Committee Report on Executive Compensation
The information contained in this report shall not be deemed to be “soliciting material” or “filed” with the SEC or subject to the liabilities of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), except to the extent that we specifically incorporate it by reference into a document filed under the Securities Act of 1933, as amended (the “Securities Act”) or the Exchange Act.
The Compensation Committee, in the performance of its duties and responsibilities, has reviewed and discussed with management the information provided under the section titled “Compensation Discussion and Analysis.” Based on discussions with management and our review of the “Compensation Discussion and Analysis” disclosure, we have recommended to the Board that the “Compensation Discussion and Analysis” be included in this Proxy Statement and incorporated by reference in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.
The foregoing report has been furnished by the current members of the Compensation Committee, being:
Sarah R. Coffin, Chair and Presiding Director, Ronald DeFeo, William A. Foley, F. Jack Liebau, Jr. (ex officio), Bruce M. Lisman and Robert A. Stefanko.
Summary of Cash and Certain Other Compensation
The following table summarizes the compensation paid by us to our named executive officers, as determined in accordance with SEC rules, for the years ended December 31, 2018, 2017 and 2016.
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Name and Principal Position | Year | Salary | Bonus | Stock Awards(1)(2) | Option Awards(2) | Non-Equity Incentive Plan Compensation(3) | All Other Compensation(4) | Total |
R. David Banyard, President & Chief Executive Officer | 2018 | $718,940 | $0 | $1,258,145 | $539,205 | $1,437,880 | $122,782 | $4,076,952 |
2017 | $708,067 | $0 | $1,238,823 | $692,323 | $593,210 | $46,741 | $3,279,164 | |
2016 | $693,846 | $0 | $1,421,126 | $278,760 | $0 | $44,899 | $2,438,631 | |
Matteo Anversa Former Executive Vice President, Chief Financial Officer and Corporate Secretary(5) | 2018 | $425,000 | $0 | $357,000 | $153,000 | $0 | $21,392 | $956,392 |
2017 | $425,000 | $0 | $362,062 | $202,339 | $275,193 | $10,800 | $1,275,393 | |
2016 | $27,788 | $100,000(6) | $149,996 | $0 | $0 | $0 | $277,784 | |
Kevin Brackman, Executive Vice President, Chief Financial Officer(5) | 2018 | $277,850 | $0 | $137,892 | $59,096 | $372,903 | $20,787 | $868.528 |
2017 | $258,678 | $0 | $135,779 | $75,878 | $178,686 | $23,715 | $672,736 | |
2016 | $234,231 | $76,500(7) | $27,888 | $26,565 | $0 | $86,126 | $451,310 | |
Andrean Horton, Executive Vice President, Chief Legal Officer and Secretary(5) | 2018 | $79,327 | $0 | $0 | $0 | $104,795 | $2,163 | $186,285 |
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| |
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(1) | Amounts shown do not reflect compensation actually received by the executive officers. Instead the amounts shown are reported at grant date fair value in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standard Codification Topic 718, Compensation — Stock Compensation (referred to herein as “FASB ASC Topic 718”). The assumptions used for this calculation are fully described in the footnote titled “Stock Compensation” of the Notes to Consolidated Financial Statements under Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC. The
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(3) | For 2018, the amounts set forth in this column represent (i) incentive bonuses that were earned during 2018 and paid early in 2019, and (ii) long-term cash incentives that were earned based on average return on invested capital for the three-year period beginning in 2016 and ending in 2018, which were paid early in 2019. |
(4) | The amounts set forth in this column include: (i) Company contributions under our 401(k) plan and non-qualified deferred compensation
Company. The amounts are listed in the following table:
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| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(6) | This amount represents relocation expenses and other expenses included in Mr. Anversa’s sign-on package. |
(7) | This amount represents a special bonus for Mr. Brackman in recognition for his service as interim CFO from March 18, 2016 until December 1, 2016. |
39
The following table contains information concerning the grants of plan based awards to the NEOs under the 2017 Incentive Stock Plan of Myers Industries, Inc., as Amended and Restated (the “2017 Plan”). The actual value and gains, if any, on an option exercise are dependent upon the future performance of our common stock and overall market conditions. The option awards and unvested portion of stock awards identified in the table below are also reported in the Outstanding Equity Awards at Fiscal 2018 Year-End table below.
Grants of Plan Based Awards During Fiscal Year 2018
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| Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) |
| Estimated Future Payouts Under Equity Incentive Plan Awards |
| All Other Stock Awards: Number of Shares of Stock or Units(2) (#) |
|
| All Other Option Awards: Number of Securities Underlying Options(3) (#) |
| Exercise or Base Price of Option Awards ($/Sh) |
| Grant Date Fair Value of Stock and Option Award ($) | ||||||||||
Name |
| Grant Date |
|
| Threshold ($) |
| Target ($) |
| Maximum ($) |
| Threshold (#) |
| Target (#) |
| Maximum (#) |
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| ||||||
R. David Banyard |
| 3/8/2018 |
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| 718,940 |
| 1,437,880 |
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| ||
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| 3/8/2018 |
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| 0 |
| 42,191(4) |
| 84,382(4) |
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| 21.30 |
| 898,675(5) | ||
|
| 3/8/2018 |
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| 16,877 |
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| 21.30 |
| 359,470 | ||
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| 3/8/2018 |
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| 99,119 |
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| 539,205 | ||
Matteo Anversa |
| 3/8/2018 |
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| 297,500 |
| 595,000 |
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| |
|
| 3/8/2018 |
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| 0 |
| 11,972(4) |
| 23,944(4) |
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| 21.30 |
| 255,000(5) | |
|
| 3/8/2018 |
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| 4,789 |
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| 21.30 |
| 102,000 | |
|
| 3/8/2018 |
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| 28,125 |
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| 153,000 | |
Kevin Brackman |
| 3/8/2018 |
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| 169,512 |
| 339,023 |
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|
| 3/8/2018 |
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|
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| 0 |
| 4,624(4) |
| 9,428(4) |
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| 21.30 |
| 98,494(5) | ||
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| 3/8/2018 |
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| 1,850 |
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| 21.30 |
| 39,398 | ||
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| 3/8/2018 |
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| 10,864 |
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| 59,096 | ||
Andrean Horton |
| 10/8/2018 |
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| 52,397 |
| 104,795 |
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(1) | Represents estimated future payout for annual cash bonuses. The payouts are based on results of operating income growth. |
(2) | Represents restricted stock units which vest ratably in three annual installments on each anniversary date of the grant. |
(3) | Represents grants of non-qualified stock options which vest ratably in three annual installments on each anniversary date of the grant. |
(4) | Represents target payout of restricted performance shares that will vest on the third anniversary date of the grant. The payout will be based on cumulative adjusted EBITDA and free cash flow as a percentage of sales for the performance period of 2018-2020. |
(5) | Represents 100% payout based on the share price on the date of the grant. |
40
Outstanding Equity Awards at Fiscal Year End
The following table shows all outstanding equity awards held by the NEOs at the end of fiscal year 2018 that have not been exercised or that have not vested. Certain of the awards identified in the table below are also reported in the “Grants of Plan Based Awards During Fiscal Year 2018” table above.
Outstanding Equity Awards at Fiscal 2018 Year-End
Name | Option Awards | Stock Awards | |||||||||
Number of securities underlying unexercised options (#) exercisable | Number of securities underlying unexercised options (#) unexercisable | Equity incentive plan awards: number of securities underlying unexercised unearned options (#) | Option exercise price ($) | Option expiration date | Number of shares or units of stock that have not vested (#) | Market value of shares or units of stock that have not vested ($)(1) | Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (#) | Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested ($)(1) | |||
R. David Banyard | 53,867 | 26,933(2) |
| 11.62 | 3/2/2026 |
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51,627 | 103,255(3) | 14.30 | 3/2/2027 |
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| 99,119(4) | 21.30 | 3/8/2028 |
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| 10,200(5) | 154,122 | 91,700(8) | 1,385,587 | ||||
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| 16,501(6) | 249,330 | 61,879(9) | 934,992 | ||||
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| 16,877(7) | 255,011 | 42,191(10) | 637,506 | ||||
Matteo Anversa | 15,089 | 0 |
| 14.30 | 3/2/2027 | 0 | |||||
Kevin Brackman | 4,500 | 0 |
| 17.95 | 3/23/2025 |
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5,133 | 2,567(2) |
| 11.62 | 3/2/2026 |
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5,658 | 11,317(3) |
| 14.30 | 3/2/2027 |
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| 10,863(4) |
| 21.30 | 3/8/2028 |
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| |||
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| 800(5) | 12,088 |
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| |||
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| 1,809(6) | 27,334 | 6,782(9) | 102,476 | |||
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| 1,850(7) | 27,954 | 4,624(10) | 69,869 | |||
Andrean Horton | - | - |
| - | - | - | - | - | - | ||
(1) | This is calculated by multiplying $15.11, the closing market price of our common stock on December 31, 2018 by the number of unvested restricted shares and |
(2) | These stock options were granted on March 2, 2016 with unexercisable shares vesting in March 2019. |
(3) | These stock options were granted on March 2, 2017 with unexercisable options vesting in equal installments in March 2019 and March 2020. |
(4) | These stock options were granted on March 8, 2018 with unexercisable options vesting in equal installments in March 2019, March 2020 and March 2021. |
(5) | Represents unvested service based restricted stock units that were granted on March 2, 2016. The remaining units will vest in March 2019. |
(6) | Represents unvested service based restricted stock units that were granted on March 2, 2017. These units will vest in equal installments in March 2019 and March 2020. |
(7) | Represents unvested service based restricted units that were granted on March 8, 2018. The remaining units will vest in equal installments in March 2019, March 2020 and March 2021. |
(8) | Represents unvested performance based restricted stock units that were granted on March 2, 2016. The remaining units will vest in March 2019 based applicable performance conditions. The |
(9) | Represents unvested performance based restricted stock units that were granted on March 2, 2017. The remaining units will vest in March 2020 based on applicable performance conditions. The units shown indicate the number of shares that would be paid out if 100% of the performance target is achieved. |
(10) | Represents unvested performance based restricted stock units that were granted on March 8, 2018. The remaining units will vest in March 2021 based on applicable performance conditions. The units shown indicate the number of shares that would be paid out if 100% of the performance target is achieved. |
41
Option Exercises and Stock Vested for Fiscal Year End 2018
The following table shows the options that were exercised and the restricted stock grants that vested for the NEOs during fiscal year 2018.
Name |
| Option Awards |
| Stock Awards | |||
| Number of shares acquired on exercise (#) | Value realized on exercise ($) |
| Number of shares acquired on vesting (#) | Value realized on vesting ($) | ||
R. David Banyard |
| 0 |
|
| 51,324 | $893,323 | |
Matteo Anversa |
| 0 |
|
| 7,730 | $132,225 | |
Kevin Brackman |
| 0 |
|
| 2,204 | $43,428 | |
Andrean Horton |
| - |
|
| - | - | |
42
Employment Arrangements Including Change in Control
Event Triggering Payment or Provision of Benefits | Benefit | R. David Banyard, President and | Kevin Brackman, Executive Vice President and Chief Financial Officer | Andrean Horton, Executive Vice President and Chief Legal Officer | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Termination without cause or NEO terminates for good reason, including within 180 days following a change in control(1) | Severance Benefits – Cash Payment | Amount equal to the sum of
| Amount equal to the sum of | Amount equal to the sum of (A) 2X her then-current annual base salary in lump sum within 30 days and (B) 2X her annual bonus at the
If Mr. Banyard and/or his surviving spouse and dependents properly elect continued medical coverage in accordance with Code Section 4980B, the Company shall pay the entire cost of the | Any amounts payable under any employee benefit plan of the Company in accordance with the terms of such plan. If Mr. | Any amounts payable under any employee benefit plan of the Company in accordance with the terms of such plan. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Termination with cause or voluntary resignation | Other Terms | If Mr. Banyard is terminated by the Company for cause or resigns other than for good reason, then he is entitled only to compensation earned prior to the date of termination that has not yet been paid, and is subject to a two year non-compete agreement. | If Mr. Brackman is terminated by the Company for cause or resigns other than for good reason, then he is entitled only to compensation earned prior to the date of termination that has not yet been paid, and is subject to a one year non-compete agreement. | If Ms. Horton is terminated by the Company for cause or resigns other than for good reason, then she is entitled only to compensation earned prior to the date of termination that has not yet been paid. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(1) With respect to Ms. Horton these benefits apply only in the event of her termination without cause or for good reason within 180 days following a change in control.
43
Summary of Potential Termination Payments and Benefits
The following table summarizes the value of the termination payments and benefits that each of our NEOs would receive if he had terminated employment on December 31, 2018 under the circumstances shown.
Name |
| Termination for Cause or Voluntary Resignation(1) |
| Termination without Cause or for Good Reason |
| Retirement(2) |
| Death |
| Disability(3) |
| Termination without Cause or Resignation for Good Reason in connection with a Change of Control |
| Actual Termination Amounts Received |
R. David Banyard |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Severance |
| - |
| 1,437,880 |
| - |
| 13,826 |
| 13,826 |
| 1,437,880 |
| - |
Bonus Severance |
| - |
| 1,437,880 |
| - |
| - |
| - |
| 1,437,880 |
| - |
Other Benefits |
| - |
| 72,043 |
| - |
| 302,109 |
| 52,109 |
| 72,043 |
| - |
Equity Acceleration(3) |
| - |
| 4,075,806 |
| - |
| 4,075,806 |
| 4,075,806 |
| 4,075,806 |
| - |
Total |
| - |
| 7,023,609 |
| - |
| 4,391,741 |
| 4,141,741 |
| 7,023,609 |
| - |
Matteo Anversa |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Severance |
| - |
| - |
| - |
| - |
| - |
| - |
| - |
Bonus Severance |
| - |
| - |
| - |
| - |
| - |
| - |
| - |
Other Benefits |
| - |
| - |
| - |
| - |
| - |
| - |
| - |
Equity Acceleration |
| - |
| - |
| - |
| - |
| - |
| - |
| - |
Total |
| - |
| - |
| - |
| - |
| - |
| - |
| - |
Kevin Brackman |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Severance |
| - |
| 350,000 |
| - |
| 7,212 |
| 7,212 |
| 350,000 |
| - |
Bonus Severance |
| - |
| 210,000 |
| - |
| - |
| - |
| 210,000 |
| - |
Other Benefits |
| - |
| 35,536 |
| - |
| 785,592 |
| 35,592 |
| 35,536 |
| - |
Equity Acceleration(4) |
| - |
| 320,316 |
| - |
| 320,316 |
| 320,316 |
| 320,316 |
| - |
Total |
| - |
| 915,852 |
| - |
| 1,113,120 |
| 363,120 |
| 915,852 |
| - |
Andrean Horton |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Severance |
| - |
| - |
| - |
| 7,212 |
| 7,212 |
| 750,000 |
| - |
Bonus Severance |
| - |
| - |
| - |
| - |
| - |
| 450,000 |
| - |
Other Benefits |
| - |
| - |
| - |
| 250,000 |
| - |
| 19,979 |
| - |
Equity Acceleration |
| - |
| - |
| - |
| - |
| - |
| - |
| - |
Total |
|
|
|
|
|
|
| 257,212 |
| 7,212 |
| 1,219,979 |
|
|
(1) | Mr. Anversa’s employment terminated effective December 31, 2018 upon his voluntarily resignation and he received no severance benefits. |
(2) | None of the NEOs were eligible for retirement benefits as of December 31, 2018. |
(3) | Values for these amounts are based on an assumption of total |
(4) | Values for these amounts are based on the closing price of our
|
Policies and Procedures with Respect to Related Party Transactions
The Board is committed to upholding the highest legal and ethical conduct in fulfilling its responsibilities and recognizes that related party transactions can present a heightened risk of potential or actual conflicts of interest. Accordingly, it is our preference, as a general rule, to avoid related party transactions. No related party transactions occurred during fiscal year 2018.
Our Governance Committee reviews all relationships and transactions in which we and our directors, nominees for director and executive officers or their immediate family members are participants to determine whether such persons have a direct or indirect material interest. In addition, under Code of Business Conduct and Ethics, our Audit Committee is responsible for reviewing and investigating any matters pertaining to our ethical codes of conduct, including conflicts of interest.
44
As a result of rules adopted under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the SEC has adopted a rule requiring annual disclosure of the ratio of the median employee’s annual total compensation to the total annual compensation of the principal executive officer (in the Company’s case, the CEO). In determining the median employee, a listing of all employees (the Company’s full employee population, but excluding the CEO) as of December 17, 2018 was prepared and the Company applied a “consistently applied compensation measure” to determine the median employee. For the consistently applied compensation measure, the Company looked to annual base salaries of employees for 2018. We used an annual base salary as our consistently applied compensation measure as it represents the primary compensation component paid to all of our employees. Non-U.S. employees were included in the determination of the median employee compensation, with the salary amounts of such non-U.S. employees converted to U.S. dollars using the applicable exchange rate as of December 17, 2018.
Mr. Banyard, the Company’s CEO, had 2018 annual total compensation of $4,076,952, as reflected in the Summary Compensation Table included in this Proxy Statement. The annual total compensation for 2018 of our median employee (other than the CEO) was calculated in accordance with the requirements of the Summary Compensation Table and determined to be $39,810. Mr. Banyard’s annual total compensation was approximately 102.41 times that of our median employee in 2018.
The SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices. Accordingly, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
45
Security Ownership of Certain Beneficial Owners and Management
The following table shows the number of shares of our common stock beneficially owned as of March 11, 2019 (unless otherwise indicated) by:
Each shareholder known by us to be the beneficial owner of more than 5% of our common stock;
Each of the Company’s directors and director nominees;
Each named executive officer in our summary compensation table; and
All of our current directors and officers as a group,
A beneficial owner of stock is a person who has sole or shared voting power, meaning the power to control voting decisions, or sole or shared investment power, meaning the power to cause the sale of the stock. All individuals listed in the table have sole voting and investment power over the shares unless otherwise noted. The Company had no preferred stock issued or outstanding.
|
| Shares Beneficially Owned |
|
| Percent of Shares Outstanding(1) | ||
Greater Than 5% Owners(2) |
|
|
|
|
|
|
|
GAMCO Investors, Inc.(3) |
| 7,162,144 |
|
| 20.24% | ||
One Corporate Center 401 Theodore Frems Ave. Rye, NY 10580-1422 |
|
|
|
|
|
|
|
T. Rowe Price Associates, Inc.(4) |
| 4,723,123 |
|
| 13.35% | ||
100 East Pratt Street Baltimore, Maryland 21202 |
|
|
|
|
|
|
|
BlackRock, Inc.(5) |
| 5,137,165 |
|
| 14.52% | ||
55 East 52nd Street New York, NY 10055 |
|
|
|
|
|
|
|
The Vanguard Group(6) |
| 2,232,015 |
|
| 6.31% | ||
100 Vanguard Blvd. Malvern, PA 19355 |
|
|
|
|
|
|
|
Directors, Nominees, and Named Executive Officers(7,8) |
|
|
|
|
|
|
|
Matteo Anversa |
| 5,233 |
|
| * | ||
R. David Banyard |
| 170,318 |
|
| * | ||
Kevin Brackman |
| 4,078 |
|
| * | ||
Sarah R. Coffin(9) |
| 20,029 |
|
| * | ||
Ronald M. De Feo(10) |
| 0 |
|
| * | ||
William A. Foley(11) |
| 18,020 |
|
| * | ||
Andrean Horton |
| 0 |
|
| * | ||
F. Jack Liebau, Jr. (12) |
| 28,957 |
|
| * | ||
Bruce Lisman(13) |
| 19,057 |
|
| * | ||
Lori Lutey(14) |
| 0 |
|
| * | ||
Jane Scaccetti(15) |
| 17,171 |
|
| * | ||
Robert A. Stefanko(16) |
| 13,744 |
|
| * | ||
All Directors, Nominees and Named Executive Officers as a group (12 persons) |
| 296,607 |
|
| * | ||
* | Less than 1% ownership |
(1) | The percentage of shares beneficially owned is based on 35,388,140 shares of common stock outstanding as of March 11, 2019. Beneficial ownership is determined in accordance with the rules and regulations of the SEC. Shares of common stock subject to options that are currently exercisable or exercisable within 60 days after March 11, 2019 are deemed to be outstanding and beneficially owned by the person holding such options for the purpose of computing the number of shares beneficially owned and the percentage ownership of |
(2) | According to filings made with the SEC, this party or an affiliate has dispositive and/or voting power over the shares. Number of shares of common stock beneficially owned |
46
| According to
Schedule 13D/A
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(4) | According to the Schedule 13G/A filed February 14, 2019, these securities are owned by various individual and
|
(5) | According to a Schedule 13G/A dated January 29, 2019, Blackrock, Inc. possessed sole power to vote with respect to 5,072,758 of these shares, sole power to direct the |
(6) | According to a Schedule 13G/A filed February 11, 2019, The Vanguard Group possessed sole power to vote with respect to 72,700 of these shares, sole power to direct the disposition of 2,161,511 of these shares, shared power to vote with respect to 1,702 of these shares, and shared power to direct the disposition of 70,504 of these shares. |
(7) | Unless otherwise noted, the beneficial owner uses the same address as the address of the principal office of the Company |
(8) | According to
|
(9) | The table does not reflect (i) 11,678 share awards that have been deferred by this director that will be converted into common stock
|
(10) | The table does not reflect 2,574 restricted stock units awarded to this director for a pro rata portion of the 2018-2019 term in connection with his appointment to the Board until the 2019 Annual Meeting of Shareholders, at which time his awards will vest. |
(11) | The table does not reflect (i) 9,687 share awards that have been deferred by this director that will be converted into common stock
|
(12) | The table does not reflect 3,081 restricted stock units awarded to |
(13) | The table does not reflect 3,081 restricted stock units awarded to this director on April 25, 2018, with respect to his current service commencing on that date until the |
(14) The table does not reflect 2,123 restricted stock units awarded to this director for a pro rata portion of the 2018-2019 term in connection with her appointment to the Board until the 2019 Annual Meeting of Shareholders, at which time her awards will vest.
(15) | The table does not reflect 3,081 restricted stock units awarded to
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(16) The table does not reflect (i) 19,563 share awards that have been deferred by this director that will be converted into common stock upon the lapse of the deferral period, or (ii) 3,081 restricted stock units awarded to this director on April 25, 2018, with respect to his current service commencing on that date until the 2019 Annual Meeting of Shareholders, at which time his awards will vest.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires Myers Industries’ directors, officers and persons who own more than ten percent of its common stock (“Section 16 Filers”) to file reports of ownership and changes in ownership with the SEC and to furnish Myers Industries with copies of all such forms they file. These reports can be viewed on the SEC’s website at www.sec.gov. For the year ended December 31, 2018, based solely on the review of copies of reports furnished to us or written representations that no reports were required, we believe that all Section 16(a) filing requirements were met in the last fiscal year by our Section 16 Filers.
47
PROPOSAL NO. 3 — RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee is responsible for the appointment, compensation, retention and oversight of the Company’s independent registered public accounting firm. In accordance with these responsibilities, the Audit Committee appointed Ernst & Young LLP (“EY”) as the Company’s independent registered public accounting firm to audit the Company’s consolidated financial statements for the year ended December 31, 2018. Additional information regarding the services provided to the Company by EY during 2018 is set forth below, under the section titled “Matters Relating to the Independent Registered Public Accounting Firm.”
In selecting EY as the Company’s independent registered public accounting firm, the Audit Committee considered a variety of factors, including:
The firm’s independence and internal quality controls
The overall depth of talent
EY’s experience with the Company’s industry and companies of similar scale and size
In determining whether to reappoint EY as the Company’s independent registered public accounting firm for the year ending December 31, 2019, the Audit Committee again took those factors into consideration along with its evaluation of the past performance of EY and EY’s familiarity with the Company’s business and internal control over financial reporting. EY’s audit report appears in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018.
In accordance with SEC rules and EY policies, audit partners are subject to rotation requirements to limit the number of consecutive years an individual partner may provide audit service to our company. For lead and concurring review audit partners, the maximum number of consecutive years of service in that capacity is five years. The process for selection of the lead audit partner under this rotation policy involves discussions with EY regarding qualified audit experience and ability to devote the time necessary to serve as lead audit partner. The current EY lead audit partner at EY for the Company was appointed in 2017.
The Audit Committee believes that the continued retention of EY as our independent registered public accounting firm is in the best interest of the Company and our shareholders and, although shareholder ratification is not required under the laws of the State of Ohio, we are asking shareholders to ratify the selection of EY as our independent registered public accounting firm for 2019, in order to provide a means by which our shareholders may communicate their opinions to the Audit Committee. If our shareholders do not ratify the appointment of EY, the Audit Committee will reconsider the appointment, but is not obligated to change the appointment, and may for other reasons be unable to make another appointment.
The Board of Directors recommends that you vote “FOR” Proposal 3
relating to the ratification of the appointment of Ernst & Young LLP
48
Matters Relating to the Independent Registered Public Accounting Firm
EY Representatives at Annual Meeting
EY audited the books and records of the Company for the years ended December 31, 2018 and 2017. Representatives of EY are expected to be available at the Annual Meeting to respond to appropriate questions and will be given the opportunity to make a statement if they desire to do so.
A description of the fees billed to the Company by EY for the years ended December 31, 2018 and 2017 is set forth in the table below.
EY was first retained by the Audit Committee in 2011. The Audit Committee reviewed the non-audit services provided by EY during the year ended December 31, 2018, and determined that the provision of such non-audit services was compatible with maintaining its independence (see “Audit Committee Report” on page 50).
|
| 2018 |
| 2017 |
| |
Audit Fees(1) | $ | 1,795,500 |
| $ | 1,950,000 |
|
Audit Related Fees(2) | $ | — |
| $ | — |
|
Tax Fees (3) | $ | 57,000 |
| $ | 320,000 |
|
All Other Fees(4) |
| — |
|
| 2,000 |
|
Total Fees | $ | 1,852,500 |
| $ | 2,272,000 |
|
(1) | Professional fees for the audit of the |
|
|
|
|
|
|
Pre-Approval Policy
The Audit Committee’s Pre-Approval Policy requires the pre-approval of all audit and permissible non-audit services provided by the independent registered public accounting firm. These services may include audit services, audit-related services, tax services and other services. Pre-approval is provided for up to one year and any pre-approval is detailed as to the particular service or category of services and is generally subject to a specific fee range or budget. The independent registered public accounting firm and management are required to periodically report to the Audit Committee regarding the extent of services provided by the independent registered public accounting firm in accordance with this policy, and the fees for the services performed to date. During 2017, all services were pre-approved by the Audit Committee in accordance with the policy. The Pre-Approval Policy is available on the “Corporate Governance” page accessed from the Investor Relations page of our website at: www.myersindustries.com.
57
The information contained in this report shall not be deemed to be “soliciting material” or “filed” with the SEC or subject to the liabilities of Section 18 of the Exchange Act, except to the extent that we specifically incorporate it by reference into a document filed under the Securities Act or Exchange Act.
The Audit Committee, which is composed of five independent directors, is responsible for assisting the Board in fulfilling its oversight responsibilities pertaining to the accounting, auditing and financial reporting processes of the Company. The duties and responsibilities of the Audit Committee are set forth in the Audit Committee Charter, which is published on the Company’s website (www.myersindustries.com) on the “Corporate Governance” page under the Investor Relations section (and can be found directly here: http://s2.q4cdn.com/555961355/files/doc_downloads/corp-gov/2017/Audit-Committee-Charter-Amended-11-2-2017.pdf).
Management is responsible for establishing and maintaining the Company’s internal control over financial reporting and for preparing financial statements in accordance with accounting principles generally accepted in the United States of America. The Audit Committee is directly responsible for the appointment, oversight, compensation and retention of EY, the independent registered public accounting firm for the Company. EY is responsible for performing an independent audit of the Company’s annual financial statements and expressing an opinion on:
The conformity, in all material respects,the review of the Company’squarterly financial statements with accounting principles generally accepted in the United States of Americastatements.
(2) | Fees for assurance and related services reasonably related to merger and acquisition activities. |
|
|
(4) | Fees for all other products and services. |
The Audit Committee’s Pre-Approval Policy requires the pre-approval of all audit and permissible non-audit services provided by the independent registered public accounting firm. These services may include audit services, audit-related services, tax services and other services. Pre-approval is provided for up to one year and any pre-approval is detailed as to the particular service or category of services and is generally subject to a specific fee range or budget. The independent registered public accounting firm and management are required to periodically report to the Audit Committee regarding the extent of services provided by the independent registered public accounting firm in accordance with this policy, and the fees for the services performed to date. During 2018, all services were pre-approved by the Audit Committee in accordance with the policy. The Pre-Approval Policy is available on the “Corporate Governance” page accessed from the “Investor Relations” page of our website at: www.myersindustries.com.
49
The information contained in this report shall not be deemed to be “soliciting material” or “filed” with the SEC or subject to the liabilities of Section 18 of the Exchange Act, except to the extent that we specifically incorporate it by reference into a document filed under the Securities Act or Exchange Act.
The Audit Committee, which is composed of five independent directors, is responsible for assisting the Board in fulfilling its oversight responsibilities pertaining to the accounting, auditing and financial reporting processes of the Company. The duties and responsibilities of the Audit Committee are set forth in the Audit Committee Charter, which is published on the Company’s website (www.myersindustries.com) on the “Corporate Governance” page under the Investor Relations section (and can be found directly here: http://s2.q4cdn.com/555961355/files/doc_downloads/corp-gov/2017/Audit-Committee-Charter-Amended-11-2-2017.pdf).
Management is responsible for establishing and maintaining the Company’s internal control over financial reporting and for preparing financial statements in accordance with accounting principles generally accepted in the United States of America. The Audit Committee is directly responsible for the appointment, oversight, compensation and retention of EY, the independent registered public accounting firm for the Company since 2011. For additional information regarding the Audit Committee’s assessment of EY and tenure of EY as the Company’s independent registered public accounting firm, see “Proposal No. 3 – Ratification of Appointment of Independent Registered Public Accounting Firm beginning on page 48. EY is responsible for performing an independent audit of the Company’s annual financial statements and expressing an opinion on:
The conformity, in all material respects, of the Company’s financial statements with accounting principles generally accepted in the United States of America and
The effectiveness of internal control over financial reporting
Each member of the Audit Committee is financially literate and independent as defined under the Board of Directors Independence Criteria policy and the independence standards set by the NYSE for both directors and audit committee members. The Board has identified each of Daniel R. Lee, F. Jack Liebau, Jr.(ex officio), Lori Lutey, Jane Scaccetti and Robert A. Stefanko as an “audit committee financial expert.”
The Audit Committee’s responsibility is one of oversight. Members of the Audit Committee rely on the information provided and the representations made to them by management, which has primary responsibility for establishing and maintaining appropriate internal control over financial reporting, and for the Company’s financial statements and reports; and by the independent registered public accounting firm, which is responsible for performing an audit in accordance with Standards of the Public Company Accounting Oversight Board — United States (“PCAOB”) and expressing an opinion on:
The conformity, in all material respects, of the Company’s financial statements with accounting principles generally accepted in the United States of America
The effectiveness of internal control over financial reporting
In the performance of our duties we have:
Reviewed and discussed with management the Company’s audited financial statements as of and for the year ended December 31, 2017
Discussed with EY, the independent registered public accounting firm for the Company, among other matters, the fair and complete presentation of the Company’s results, the assessment of the Company’s internal control over financial reporting, significant accounting policies applied in the Company’s financial statements, as well as, when applicable, alternative accounting treatments and the matters required to be discussed by Auditing Standard No. 16 (PCAOB 2012-01) and the rules of the SEC
58
|
The conformity, in all material respects, of the Company’s financial statements with accounting principles generally accepted in the United States of America The effectiveness of internal control over financial reporting In the performance of our duties we have: Reviewed and discussed with management the Company’s audited financial statements as of and for the year ended December 31, 2018 Discussed with EY, among other matters, the fair and complete presentation of the Company’s results, the assessment of the Company’s internal control over financial reporting, significant accounting policies applied in the Company’s financial statements, as well as, when applicable, alternative accounting treatments and the matters required to be discussed by Auditing Standard No. 16 (PCAOB 2012-01) and the rules of the SEC 50
|
The Audit Committee also considered whether the independent registered public accounting firm’s provision of non-audit services to the Company is compatible with the auditor’s independence
The Audit Committee concluded that the independent registered public accounting firm is independent from the Company and its management
Based on the reviews and discussions referred to above, and exercising our business judgment, we recommended to the Board that the financial statements referred to above be included in this Proxy Statement and incorporated by reference in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. We have selected EY as the Company’s independent registered public accounting firm for fiscal 2019, and have approved submitting the selection of the independent registered public accounting firm for ratification by the shareholders.
The foregoing report has been furnished by the current members of the Audit Committee, being:
Robert A. Stefanko, Chair and Presiding Director, Sarah R. Coffin, F. Jack Liebau, Jr. (ex officio), Lori Lutey, and Jane Scaccetti
51
General Information About the Meeting and Voting
Meeting Time and Applicable Dates | This Proxy Statement is furnished in connection with the solicitation by the Board of Myers Industries, an Ohio corporation, of the accompanying proxy to be voted at the Annual Meeting to be held on Wednesday, April 24, 2019, at 9:00 A.M. (EDT), and at any adjournment thereof. The close of business on March 7, 2019, has been fixed as the record date for the determination of the shareholders entitled to notice of and to vote at the meeting. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Attending the Meeting Online | Myers Industries will host the 2019 Annual Meeting live via the internet and in person at 1554 South Main Street, Akron, Ohio 44301. Any shareholder can listen to and participate in the Annual Meeting live via the internet on the Shareholders may vote and You will need the information printed in the
52
Executive Officers of the Company Disclosure regarding the executive officers of the Company is set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, Shareholder Proposals for Inclusion in Proxy Statement Any shareholder who intends to present a proposal at the Company’s next Annual Meeting to be held in April Not later than November Not earlier than January In accordance with our Amended and Restated Code of Regulations, a shareholder may submit notice of a shareholder proposal that it intends to raise at our Annual Meeting (and not desiring to be included in the Company’s proxy statement) only if advance written notice of such intention is received by the The submission of such a notice does not ensure that a proposal can be raised at our Annual Meeting. The Compensation Committee Report and the Audit Committee Report (including reference to the independence of the Audit Committee members) are not deemed filed with the SEC or subject to the liabilities of Section 18 of the Exchange Act, and shall not be deemed incorporated by reference into any prior or future filings made by us under the Securities Act, or the Exchange Act, except to the extent that we specifically incorporate such information by reference. The section of this proxy entitled “Compensation Discussion and Analysis” is specifically incorporated by reference in the Company’s Annual Report on Form 10-K for the year ended December 31,
54
The accompanying proxy is solicited by and on behalf of the Board, whose notice of meeting is attached to this Proxy Statement, and the entire cost of such solicitation will be borne by Myers Industries. In addition to the use of the mail, proxies may be solicited by personal interview and telephone by directors, officers and employees of Myers Industries. Arrangements will be made with brokerage houses and other custodians, nominees and fiduciaries for the forwarding of solicitation material to the beneficial owners of stock held of record by such persons, and Myers Industries will reimburse them for reasonable out-of-pocket expenses incurred by them in connection therewith. Although a copy of the Annual Report on Form 10-K is provided to you at the time of delivery of the definitive Proxy Statement, we will mail without charge, upon written request, a copy of our Annual Report on Form 10-K for the year ended December 31, Notice Regarding Delivery of Security Holder Documents The SEC now permits companies to send a single set of annual disclosure documents to any household at which two or more shareholders reside, unless contrary instructions have been received, but only if the Company provides advance notice and follows certain procedures. In such cases, such shareholders continue to receive a separate notice of the meeting and proxy card. This “householding” process reduces the volume of duplicate information and reduces printing and mailing expenses. We have not instituted householding for shareholders of record; however, a number of brokerage firms may have instituted householding for beneficial owners of the Company’s shares of common stock held through such brokerage firms. If your family has multiple accounts holding shares of common stock of the Company, you already may have received householding notification from your broker. Please contact your broker directly if you have any questions or require additional copies of the annual disclosure documents. The broker will arrange for delivery of a separate copy of this Proxy Statement or our Annual Report promptly upon your written or oral request. You may decide at any time to revoke your decision to household, and thereby receive multiple copies. Myers Industries, Inc.® is a registered trademark of the Company.
VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com MYERS INDUSTRIES, INC.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Annual
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