NOTICE OF ANNUAL MEETING
AND
PROXY STATEMENT
2020
SP PLUS CORPORATION
SP+ CORPORATION 2020 PROXY STATEMENT |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
Securities Exchange Act of 1934 (Amendment
(Amendment No. )
Filed by the Registrant ☒ Filed by a Party other than the Registrant ☐
Check the appropriate box:
| Preliminary Proxy Statement | ||
| ☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
| ☒ | Definitive Proxy Statement | |
| ☐ | Definitive Additional Materials | |
| ☐ | Soliciting Material under §240.14a-12 | |
SP PLUS CORPORATION
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
| No fee required. | ||||
| ☐ | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. | |||
| (1) | Title of each class of securities to which transaction applies: | |||
| (2) | Aggregate number of securities to which transaction applies: | |||
| (3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): | |||
| (4) | Proposed maximum aggregate value of transaction: | |||
| (5) | Total fee paid: | |||
| ☐ | Fee paid previously with preliminary materials. | |||
| ☐ | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. | |||
| (1) | Amount Previously Paid: | |||
| (2) | Form, Schedule or Registration Statement No.: | |||
| (3) | Filing Party: | |||
| (4) | Date Filed: | |||
NOTICE OF ANNUAL MEETING
AND
PROXY STATEMENT
2020
SP PLUS CORPORATION
SP+ CORPORATION 2020 PROXY STATEMENT |
 | ||||
SP PLUS CORPORATION
200 E. Randolph Street, Suite 7700
Chicago Illinois 60601-7702
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Date: | Time: May | |||||
1:00 p.m. Central time | Place: AON Center 200 East Randolph Street 70th Floor Chicago, IL 60601* | Record Date: March 13, 2020 | ||||
Dear Stockholders:
We are pleased to invite you to the SP Plus Corporation 2020 Annual Meeting of Stockholders.
Proposals:
To | ||
| Board of Directors: G Marc Baumann, | ||
| Karen M. Garrison, | ||
| Alice M. Peterson, Gregory A. Reid, | ||
| Wyman T. Roberts | ||
| and Douglas R. Waggoner |
| Item 2: | ||
To consider |
| Item 3: | ||
To ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for fiscal year | ||
Stockholders will alsomay transact any other business that may be properly brought before the meeting. At this time, our Board of Directors knows of no other proposalsmeeting, or matters to be presented.
Stockholders of record at the close of business on March 31, 2017 will be13, 2020 are entitled to notice of, and to vote at, anythe meeting or any adjournments or postponements thereof. On the record date, there were 22,997,061 shares of common stock of SP Plus Corporation issued and outstanding and entitled to vote at the meeting. A list of stockholders entitled to vote at the meeting will be available for inspection at our headquarters for at least 10 days prior to the meeting and will also be available for inspection at the meeting.
Your vote is important! We strongly encourage you to exercise your right to vote as a stockholder, whether in person or by proxy. Whether or not you expect to be present at the meeting, so that we can ensure that your vote will be counted, please complete, sign and date the enclosed proxy card and return it promptly in the envelope provided, or vote via the Internet or the telephone according to the instructions on the proxy card. Stockholders attending the meeting may vote in person even if they have previously returned proxy cards. You may vote by any one of the following methods.
Voting Methods:
Telephone
Internet
Written ballot—Complete and return proxy card in the mail
In person—Attend and vote at the meeting
On behalf of the Board of Directors:
Ritu Vig
Chief Legal Officer, Corporate Secretary
Chicago, March 20, 2020
| * | |
Due to concerns about the coronavirus or COVID-19, we are planning for the possibility that the Annual Meeting may be held solely by means of remote communication (i.e., a virtual-only meeting). If we take this step, we will publicly announce the decision in a press release and post additional information on our Investor Relations website at ir.spplus.com. Please check this website in advance of the | |
 | |
Important Notice Regarding the Availability of Proxy Materials for
the Stockholders
The Proxy Statement and annual reportthe 2019 Annual Report to stockholdersStockholders are available at
http://www.cstproxy.com/spplus/2017
On this site, you will be able to access our 2020 Proxy Statement and returningour Annual Report on Form10-K for the enclosed proxy card.fiscal year ended December 31, 2019, and all amendments or supplements to the foregoing materials that are required to be furnished to stockholders.
SP+ CORPORATION 2020 PROXY STATEMENT |
SP+ CORPORATION 2020 PROXY STATEMENT iSP PLUS CORPORATION200 E. Randolph Street, Suite 7700Chicago, Illinois 60601-7702PROXY STATEMENT2017 ANNUAL MEETING OF STOCKHOLDERSTABLE OF CONTENTSi
| TABLE OF CONTENTS | ||||
SP+ CORPORATION 2020 PROXY STATEMENT |
ii
| TABLE OF CONTENTS | ||||
SP+ CORPORATION 2020 PROXY STATEMENT |
iii
SP+ is a leading provider of technology-driven mobility solutions. We are onefacilitate the efficient movement of people, vehicles and personal belongings with the leading providersgoal of enhancing the consumer experience while improving bottom line results for our clients. We provide professional parking management, ground transportation, remote baggagecheck-inand other ancillary services to commercial, institutional and municipal clients in the United States, Puerto Rico and Canada. Our services include a comprehensive set of on-site parking management and ground transportation services, which includehandling, facility maintenance, security, services, training, schedulingevent logistics, and supervising all service personnel as well as providing customer service, marketing,other technology-driven mobility solutions to aviation, commercial, hospitality, healthcare and accounting and revenue control functions necessary to facilitate the operation of our clients’ facilities. We also provide a range of ancillary services such as airport shuttle operations, valet services, taxi and livery dispatch services and municipal meter revenue collection and enforcement services.government clients across North America. As of December 31, 2016 ,2019, we managed 3,686 parking facility locations containinghad approximately 2.0 million parking spaces23,900 employees and operated in 357hundreds of cities operated 78 parking-related service centers serving 73 airports, operated a fleet of approximately 700 shuttle buses carrying approximately 42.3 million passengers per year, operated 652 valet locations and employed a professional staff of approximately 22,500 people.
A copy of our 2019 Annual Report to Stockholders (the “Annual Report”), which includes ourForm 10-K for the year ended December 31, 2016,2019, accompanies this Proxy Statement and has been posted on the Internet with this Proxy Statement.
Our main website address is
www.spplus.com. We make available free of charge on the Investor Relations section of our website, our Annual Report onForm 10-K, Quarterly Reports onForm 10-Q, Current Reports onForm 8-K, and all amendments to those reports, as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission (the “SEC”). We also make available through our website other reports filed with or furnished to the SEC under the Securities Exchange Act of 1934 (the “Exchange Act”), including our proxy statements and reports filed by officers and directors under Section 16(a) of that Act, as well as ourThe SEC also maintains an Internet site that contains reports, proxy statements and other information regarding issuers, like us, that file electronically with the SEC. The address of that website is
We use the terms “SP Plus,” “SP+,” “our company,” “the Company,” “we,” “our” and “us” in this Proxy Statement to refer to SP Plus Corporation and its consolidated subsidiaries including Central, unless the context otherwise requires.
| Q: | Why am I receiving these materials? |
| A: | Our Board of Directors (the “Board”) is soliciting your proxy for use at the 2020 Annual Meeting of Stockholders (the “Annual Meeting”) to be held on May 6, 2020. Under rules adopted by the SEC, we are now furnishing proxy materials on the Internet athttp://www.cstproxy.com/spplus/2020 in addition to mailing paper copies of the Notice of Internet Availability and Proxy Card. These proxy materials are first being made available via the Internet on or about March 20, 2020, to holders of record of our common stock at the close of business on March 13, 2020 (the “Record Date”). Please note that SP Plus will commence mailing of the Notice of Internet Availability and proxy cards on or about March 20, 2020. |
| Q: | When is the Annual Meeting? |
| A: | We will hold the Annual Meeting on May 6, 2020 at 1:00 p.m., Central time, subject to any adjournments or postponements. |
| Q: | Where will the Annual Meeting be held? |
| A: | The Annual Meeting will be held at the AON Center, 200 East Randolph Street, 70th Floor, Chicago, IL 60601. |
| Q: | What materials are being provided? |
| A: | The Company is making available the following: |
this Proxy Statement for the 2020 Annual Meeting;
a copy of our Annual Report to Stockholders, which includes ourForm 10-K for the year ended December 31, 2016, as filed with the SEC on February 24, 2017 (the “Annual Report”);2019; and
a proxy card and votevoting instruction form for the Annual Meeting.
Stockholders may obtain free of charge a copy of the exhibits to ourForm 10-K by making a written request to our Investor Relations Team at SP Plus Corporation, Investor Relations, 200 E. Randolph Street, Suite 7700, Chicago Illinois 60601-7702, or by email atinvestor_relations@spplus.com.
| Q: |
Where can I find the 2019 audited financial statements for SP Plus? |
| A: | The audited financial statements for our year ended December 31, 2019 are included in our Annual Report, which is available atwww.cstproxy.com/spplus/2020 together with this Proxy Statement. You may also access these materials through our main website atwww.spplus.com. |
SP+ CORPORATION 2020 PROXY STATEMENT |
1
| GENERAL INFORMATION | ||||
| Q: | What items will be voted on at the Annual Meeting? |
| A: | Stockholders will vote on three items at the Annual Meeting: |
tore-elect the 2016 audited financial statements for SP Plus?
to approve 2016 executive compensation (Proposal No. 2);consider and cast anon-binding
to ratify the appointment of Ernst & Young LLP’s appointmentLLP as our independent registered public accounting firm for 2017fiscal year 2020 (Proposal No. 4)3).
| Q: | What are the Board’s voting recommendations? |
| A: | The Board recommends that you vote your shares: |
“FOR” each of the nominees named in this Proxy Statement to the Board (Proposal No. 1);
“FOR” the approval of the non-binding advisory a resolution approving, in anon-binding advisory vote, the 2019 compensation paid to our 2016named executive compensationofficers (Proposal No. 2); and
“FOR” the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for 2017fiscal year 2020 (Proposal No. 4)3).
| Q: | What other matters might arise at the meeting? |
| A: | At the date of this Proxy Statement, the Board does not know of any matters to be raised at the Annual Meeting other than those referred to in this Proxy Statement. The proxies named in the proxy card are authorized to vote in their discretion upon such other matters as may properly come before the Annual Meeting or any adjournment or postponement thereof. |
| Q: | What happens if a director nominee is unable to stand for election? |
| A: | If a nominee is unable to stand for election, the Board of Directors may either reduce the number of directors to be elected or select a substitute nominee. If a substitute nominee is selected, the proxy holders may vote your shares for the substitute nominee. |
| Q: | Who may vote at the Annual Meeting? |
| A: | Each share of our common stock has one vote on each matter. Only stockholders of record as of the close of business on the Record Date are entitled to receive notice of, to attend, and to vote at the Annual Meeting. As of the Record Date, there were approximately 22,997,061 shares of our common stock outstanding. |
| Q: | What is the difference between a stockholder of record and a beneficial owner of shares held in street name? |
| A: | Stockholder of Record. If shares of our common stock are registered directly in your name with our transfer agent, you are considered the stockholder of record with respect to those shares of our common stock. |
Beneficial Owner of Directors may either reduce the number of directors to be elected or select a substitute nominee. If a substitute nominee is selected, the proxy holders may vote your shares for the substitute nominee.
| Q: | If I am a stockholder of record of the Company’s shares, how do I vote? |
| A: | Our stockholders of record may vote in person at the Annual Meeting or by proxy. There are three ways to vote by proxy: |
| • |
|
| • |
|
| • |
|
In order for your proxy to be validly submitted and for your shares to be voted in accordance with your proxy, we must receive the mailed proxy card prior to the start of the Annual Meeting. Additionally, telephone and Internet voting for stockholders will close at 7:0011:59 p.m., Eastern Time,time, on May 8, 2017.5, 2020.
SP+ CORPORATION 2020 PROXY STATEMENT |
2
| GENERAL INFORMATION | ||||
| Q: | If I hold my shares in street name, how do I vote? |
| A: | If you hold your shares in street name, you may vote by following the instructions provided by your broker or, in order to vote in person at the Annual Meeting, you must comply with the procedures described below. |
| Q: | What is the quorum requirement for the Annual Meeting? |
| A: | A majority of the shares entitled to vote at the Annual Meeting must be present at the Annual Meeting in person or by proxy for the transaction of business. This is called a quorum. Your shares will be counted as present for purposes of determining if there is a quorum if you: |
are entitled to vote and you are present at the Annual Meeting; or
have properly voted on the Internet, by telephone or by submitting a proxy card form by mail.
If a quorum is not present, the Annual Meeting will be adjourned until a quorum is obtained. For purposes of determining a quorum, abstentions and brokernon-votes are counted as represented.
| Q: | How are proxies voted? |
| A: | All shares represented by valid proxies received prior to the Annual Meeting will be voted and, where a stockholder specifies by means of the proxy a choice with respect to any matter to be acted upon, the shares will be voted in accordance with the stockholder’s instructions. |
| Q: | What happens if I do not give specific voting instructions? |
| A: | Stockholders of Record. If you are a stockholder of record and you signed and returned a proxy card without giving specific voting instructions, then the persons named as proxy holders, Ritu Vig and Jerome L. Pate, will vote your shares in the manner recommended by the Board on all matters presented in this Proxy Statement and as the proxy holders may determine in their discretion with respect to any other matters properly presented for a vote at the Annual Meeting. |
Beneficial Owners of Shares Held in Street Name. If you are a beneficial owner of shares held in street name and do not provide the organization that holds your shares with specific voting instructions, then, under applicable rules, the organization that holds your shares may generally vote on “routine” matters but cannot vote on “non-routine”“non-routine” matters. If the organization that holds your shares does not receive instructions from you on how to vote your shares on anon-routine matter, that organization will informindicate on the inspector of electionproxy card that it does not have the authority to vote on this matter with respect to your shares. This is generally referred to as a “brokernon-vote.”
| Q: | Which ballot measures are considered “routine” or“non-routine”? |
| A: | The ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for fiscal year 2020 (Proposal No. 3) is a matter considered routine under applicable rules. A broker or other nominee may generally vote on routine matters, and, therefore, no brokernon-votes are expected to occur with respect to Proposal No. 3. |
The election of directors (Proposal No. 1) and thenon-binding advisory vote to approve compensation paid to our 2019 named executive officers (Proposal No. 2) are considerednon-routine matters under applicable rules. A broker or other nominee may generallynot vote without instructions on routinenon-routine matters, and, therefore, no brokernon-votes are expected to exist in connection may occur with Proposal No. 4.
| Q: | What is the voting requirement to approve each of the proposals? |
| A: | With respect to the election of directors (Proposal No. 1), our bylaws currently provide for a plurality voting standard. Accordingly, under the plurality voting standard, the six nominees receiving the highest number of affirmative votes will be elected as directors to serve until the next annual meeting of stockholders and until their successors are duly elected and qualified. In other words, because there are no other nominees for election as directors other than the persons named in the enclosed proxy card and assuming each of those persons receives at least one vote, all of them will bere-elected to our Board. A properly executed proxy marked “Withhold Authority” with respect to the election of one or more directors will not be voted with respect to the director or directors indicated. |
The affirmative vote of the holders of a majority of the shares represented in person or by proxy and entitled to vote will be required to approve, by in anon-binding advisory vote, the compensation paid to our 2019 named executive compensationofficers (Proposal No. 2),. Although the advisory vote on Proposal No. 2 isnon-binding, our Board will review the voting results and, consistent with our record of stockholder engagement, will take it into account when making future compensation decisions for our named executive officers.
SP+ CORPORATION 2020 PROXY STATEMENT |
3
| GENERAL INFORMATION | ||||
The affirmative vote of the holders of a majority of the shares represented in person or by proxy and entitled to vote will be required to ratify the appointment of our independent registered public accounting firm (Proposal 4).
| Q: | How are brokernon-votes and abstentions treated? |
| A: | Brokernon-votes and abstentions are counted for purposes of determining whether a quorum is present. With respect to the election of directors (Proposal No. 1), brokernon-votes and abstentions would have no effect on determining the nominees elected. However, with respect to Proposals No. 2 and No. 3, abstentions have the same effect as votes cast AGAINST each such matter. If a broker indicates on the proxy that it does not have discretionary authority as to certain shares to vote on a particular matter, those shares will be considered as present and entitled to vote, but will have no effect on the vote with respect to that matter. |
| Q: | Can I change my vote after I have voted? |
| A: | You may revoke your proxy and change your vote at any time before the final vote at the Annual Meeting. You may change your vote via the Internet or by telephone (in which case only your latest Internet or telephone proxy submitted prior to the Annual Meeting will be counted), by signing and returning a new proxy card with a later date, or by attending the Annual Meeting and voting in person. However, your attendance at the Annual Meeting will not automatically revoke your proxy unless you properly vote at the Annual Meeting or specifically request that your prior proxy be revoked by delivering to our Chief Legal Officer at 200 E. Randolph Street, Suite 7700, Chicago, Illinois 60601-7702, a written notice of revocation prior to the Annual Meeting. |
| Q: | As a stockholder, do I have dissenters’ or appraisal rights if I object to any of the proposals? |
| A: | No. Our stockholders do not have rights of appraisal or similar rights of dissenters with respect to any of the proposals being presented at the Annual Meeting. |
| Q: | Who will serve as the inspector of election? |
| A: | Continental Stock Transfer and Trust, our transfer agent, has agreed to act as our Inspector of Election at the Annual Meeting and to assist us in tabulating stockholder votes. |
| Q: | Is my vote confidential? |
| A: | Proxy instructions, ballots and voting tabulations that identify individual stockholders are handled in a manner that protects your voting privacy. Your vote will not be disclosed either within our company or to third parties, except: |
as necessary to meet applicable legal requirements;
to allow for the tabulation and certification of votes; and
to facilitate a successful proxy solicitation.
Occasionally, stockholders provide written comments on their proxy cards, which may be forwarded to our management and the Board.
| Q: | Who is paying for the cost of this proxy solicitation? |
| A: | We are paying the costs of the solicitation of proxies. We have engaged Morrow Sodali LLC to assist in the solicitation of proxies for the Annual Meeting and will payMorrow Sodali LLC an estimated fee of $6,000, plus any disbursements. The address of Morrow Sodali LLC is 470 West Avenue, Stamford, Connecticut 06902. |
In addition to this notice, the voting results of the Annual Meeting?
| Q: | How can I attend the Annual Meeting? |
| A: | Only stockholders as of the Record Date are entitled to attend the Annual Meeting. You must present valid identification containing a photograph, such as a driver’s license or passport. If you are the stockholder of record, your name will be verified against a list of stockholders of record on the Record Date prior to being admitted to the Annual Meeting. If you hold your shares indirectly through a broker, you must bring (i) an acceptable form of identification, such as a driver’s license, (ii) a “legal proxy” form from the broker, and (iii) an account statement or other acceptable evidence showing that you were the beneficial owner of shares of our common stock on the Record Date. |
Due to concerns about the coronavirus or COVID-19, we are planning for the possibility that the Annual Meeting may be held solely by means of remote communication (i.e., a virtual-only meeting). If we take this step, we will publicly announce the decision in a press release and post additional information on our Investor Relations website at ir.spplus.com on how to participate. We encourage you to vote your shares prior to the Annual Meeting, even if you plan to attend the Annual Meeting. Admission will be on a first-come, first-served basis. You must present valid identification containing a photograph, such as a driver’s license or passport. If you are the stockholder of record, your name will be verified against a list of stockholders of record on the record date prior to being admitted to the Annual Meeting.meeting.
SP+ CORPORATION 2020 PROXY STATEMENT |
4
| GENERAL INFORMATION | ||||
| Q: | What is the deadline to propose actions for consideration or to nominate individuals to serve as directors at the next annual meeting of stockholders? |
| A: | Requirements for Stockholder Proposals to Be Considered for Inclusion in our 2021 Proxy Materials. Stockholder proposals to be considered for inclusion in the form of proxy relating to the 2021 annual meeting of stockholders must be received no later than November 20, 2020. In addition, all proposals will need to comply with Rule14a-8 under the Exchange Act, which lists requirements for the inclusion of stockholder proposals in company-sponsored proxy materials. Stockholder proposals must be delivered to our company’s Chief Legal Officer by mail at 200 E. Randolph Street, Suite 7700, Chicago, Illinois 60601-7702. |
Requirements for Stockholder Proposals to Be Brought Before the Next Annual Meeting of Stockholders and Director Nominations. Notice of any proposal that a stockholder intends to present at the 20182021 annual meeting of stockholders, but does not intend to have included in the proxy statement and form of proxy relating to the 20182021 annual meeting of stockholders, as well as any director nominations, must be delivered to theour company’s General CounselChief Legal Officer by mail at 200 E. Randolph Street, Suite 7700, Chicago, Illinois 60601-7702, not earlier than the close of business on November 23, 2017December 7, 2020 and not later than the close of business on December 23, 2017.January 6, 2021. In addition, the notice must set forth the information required by the company’sour bylaws with respect to each director nomination or other proposal that the stockholder intends to present at the 2018our 2021 annual meeting of stockholders.
| Q: | Where are our principal executive offices located and what is our main telephone number? |
| A: | Our headquarters are located at 200 E. Randolph Street, Suite 7700, Chicago, Illinois 60601-7702. Our telephone number in Chicago is312-274-2000. You may contact our Investor Relations Team at this address or by email atinvestor_relations@spplus.com. |
| Q: | What is our company’s fiscal year? |
| A: | Our fiscal year is the calendar year beginning on January 1 and ending on December 31. |
SP+ CORPORATION 2020 PROXY STATEMENT |
5
The first proposal to be voted on at the Annual Meeting is the election of eightsix directors. Our Board of Directors (our “Board”) currently consists of eightsix members who are elected annually. On March 8, 2017, the Board set the number of directors to be elected at our 2017 Annual Meeting at eight. The Nominating and Corporate Governance Committee recommended, and on March 8, 2017, our Boardfollowing individuals are being nominated G Marc Baumann, Karen M. Garrison, Gregory A. Reid, Robert S. Roath, Wyman T. Roberts, Douglas R. Waggoner, Jonathan P. Ward and Gordon H. Woodward to serve as ourdirectors:
| G Marc Baumann | Alice M. Peterson | Wyman T. Roberts | ||
| Karen M. Garrison | Gregory A. Reid | Douglas R. Waggoner |
All of the nominees are current SP Plus directors. If elected, all nomineeseach director will serve a one-year term until ourthe next annual meeting.meeting of stockholders and until a successor is elected and qualified, or until such director’s earlier resignation, removal or death. You may cast your vote in favor of electing the nominees as directors or withhold your vote on one or more nominees.
 | OURBOARDRECOMMENDSA | |||
If any nominee is unwilling or unable to serve as a director, then the Board will propose another person in place of that original nominee, and the individuals designated as your proxies will vote to appoint that proposed person, unless the Board decides tomay either reduce the number of directors constitutingto be elected or select a substitute nominee. If a substitute nominee is selected, the full Board.proxy holders may vote your shares for the substitute nominee. It is currently anticipated that all of the nominees will be willing and able to serve as directors.
SP+ CORPORATION 2020 PROXY STATEMENT |
6
| BOARD MATTERS | ||||
The biographies of our eightsix director nominees as of March 1, 2017 are set forth below.
G Marc Baumann Age: | Mr. Baumann has served as our President since March 2014 and as Chief Executive Officer and a director since January 1, 2015. Mr. Baumann served as our Chief Operating Officer from March 2014 through December 2014, Chief Financial Officer and Treasurer from October 2000 to March 2014, President of Urban Operations from October 2012 to March 2014, and Executive Vice President from October 2000 to October 2012. | |||||
Qualifications: In addition to the qualifications described above, our Board believes that Mr. Baumann’s extensive industry knowledge in transportation and mobility and his deep knowledge of the Company allow him to contribute unique strategic insights to the Board. | ||||||
Karen M. Garrison Age: 71 Chairman of the Board Board Committees: • Compensation Committee • Executive Committee(Chair) • Nominating and Corporate Governance | Ms. Garrison has served as a director since June 2004 and as our Chairman of the Board since January | |||||
Qualifications:In addition to the qualifications described | ||||||
SP+ CORPORATION 2020 PROXY STATEMENT |
8
| BOARD MATTERS | ||||
Alice M. Peterson Age: 67 Board Committees: • Audit Committee(Chair) • Executive Committee | Ms. Peterson has served as a director since March 2018. She Ms. Peterson served as a director of RIM Finance, LLC, a wholly owned subsidiary of Research in | |||||
| Qualifications: In addition to the qualifications described above, our Board believes that Ms. Peterson’s financial and accounting, corporate governance, securities and capital markets, executive leadership, strategy development and risk management, and operating experience are particularly important attributes for a director of our company. | ||||||
Gregory A. Reid Age: Board Committees: • Audit Committee • Compensation Committee | Mr. Reid has served as a director since May 2017. He has served as president of BoomDeYada, LLC, a brand development consultancy group, since October 2011. Prior to founding BoomDeYada, Mr. Reid held various marketing and sales positions at YRC Worldwide, Inc., a transportation and global logistics company, since January 1997, most recently as executive vice president and chief marketing officer from January 2007 to December 2011. Mr. Reid holds a Bachelor of Business Administration degree in Marketing from the University of Cincinnati. | |||||
Qualifications:In addition to the qualifications described | ||||||
SP+ CORPORATION 2020 PROXY STATEMENT |
9
| BOARD MATTERS | ||||
Wyman T. Roberts Age: 60 Committee(Chair)Board Committees: • Compensation • Executive Committee • Nominating and Corporate Governance Committee | Mr. Roberts has served as a director since April 2015. He currently serves as | |||||
Qualifications:In addition to the qualifications described | ||||||
Douglas R. Waggoner Age: 61 Committee(Chair)Board Committees: • Audit Committee • Executive Committee • Nominating and Corporate Governance | Mr. Waggoner has served as a director since April 2015. He has served as | |||||
Qualifications:In addition to the qualifications described | ||||||
When the accompanying proxy is properly executed and returned, the shares it represents will be voted in accordance with the directions indicated thereon or, if no direction is indicated, the shares will be voted in favor of the election of the eightsix nominees identified above. We expect each nominee to be able to serve if elected, but, if any nominee notifies us before the Annual Meeting that he or she is unable to do so, then the proxies will be voted for the remainder of those nominated and, as designated by the directors, may be voted (i) for a substitute nominee or nominees, or (ii) to elect such lesser number to constitute the whole Board as equals the number of nominees who are able to serve.
SP+ CORPORATION 2020 PROXY STATEMENT |
10
In evaluating candidates for Board membership, the Nominating and Corporate Governance Committee has assessed the contribution that the candidate’s skills and expertise will make with respect to guiding and overseeing our strategy and operations. ThisThe Nominating and Corporate Governance Committee seeks candidates who have the ability to develop a deep understanding of our business and the time and the judgment to effectively carry out their responsibilities as a member of our Board.
The Nominating and Corporate Governance Committee charter provides that thisthe committee should consider candidates for our Board who are gender and age diverse and also possess a diversity of professional experience, education and other individual qualities and attributes in an effort to contribute to Board heterogeneity.
All of the nominees with the exception of Mr. Reid, are current SP Plus directors. Mr. Reid was recommended toWhen our Board has a director opening, the Nominating and Corporate Governance Committee aftermay retain an extensive and careful search was conducted by an executive search firm. The Nominating and Corporate Governance Committee retained this executive search firm to assist the Board with identifying and evaluating director candidates. The primary functions served by the executive search firm includedinclude identifying potential candidates who meet the key attributes, experience and skills described under “Criteria for Board Membership” below, as well as compiling information regarding each candidate’s attributes, experience, skills and independence and conveying the information to the Nominating and Corporate Governance Committee. Numerous candidates wereare considered as a result of this search. Mr. Reid has been nominated to replace James A. Wilhelm, who currently serves on our Board and is not being nominated for election at the Annual Meeting.
If you would like to recommend a future nominee for Board membership, you can submit a written recommendation with the name and other pertinent information of the nominee to: Karen M. Garrison,Douglas R. Waggoner, Chair of the Nominating and Corporate Governance Committee, c/o SP Plus Corporation, 200 E. Randolph Street, Suite 7700, Chicago, Illinois 60601-7702, Attention: General Counsel and Secretary.
The Nominating and Corporate Governance Committee has established certain minimum qualification criteria for our director nominees, including:
the highest personal and professional ethics, integrity, and honesty, and a commitment to acting in the best interest of the stockholders;
an inquisitive and objective perspective and mature judgment;
sufficient time available to fulfill all Board and committee responsibilities;
diverse viewpoints and background and diverse experience at policy-making levels in business, government, education and technology, and in areas that are relevant to our activities; and
experience in positions with a high degree of responsibility and leadership roles in the companies or institutions with which they are affiliated.
SP+ CORPORATION 2020 PROXY STATEMENT |
11
Our business is managed by our employees under the direction and oversight of our Board. Except for Mr. Baumann, none of our directors is currently an employee of our company. We keep Board members informed of our business through discussions with management, materials we provide to them, visits to our offices, and their participation in Board and Board committee meetings.
Our Board has adopted Corporate Governance Guidelines for the Board of Directors (“Governance Guidelines”) that, along with the charters of the principal Board committees and our CodesCode of Business Conduct and Code of Ethics for Certain Executives, provide the framework for the governance of our company. A complete copyComplete copies of our Corporate Governance Guidelines, the charters of our principal Board committees, our Code of Business Conduct, Code of Ethics and other corporate governance documents may be found on our Investor Relations page at
We believe that open, effective, and accountable corporate governance practices are key to our relationship with our stockholders. To help our stockholders understand our commitment to this relationship and our governance practices, our Board has adopted a set of Corporate Governance Guidelines to set a framework within which our Board will conduct its business. The Corporate Governance Guidelines are summarized below along withand certain other of our governance practices.
The rules of the NASDAQ Stock Market LLC (“NASDAQ”) require listed companies to have a board of directors with at least a majority of independent directors. These rules have both objective tests and a subjective test for determining who is an “independent director.” Our Board has determined that each of the following director nominees is independent under the applicable NASDAQ listing rules and under our The Board limits membership on the Audit Committee, the Compensation Committee, Executive Committee, and the Nominating and Corporate Governance In accordance with our SP+ CORPORATION 2020 PROXY STATEMENT 12Director IndependenceThe objective tests state, for example, that a director is not considered independent if he or she is an employee of the company, or is a partner in, or a controlling stockholder or executive officer of, an entity to which the company made, or from which the company received, payments in the current or any of the past three fiscal years that exceed 5% of the recipient’s consolidated gross revenue for that year. The subjective test requires our Board to affirmatively determine that a director does not have a relationship that would interfere with the director’s exercise of independent judgment in carrying out his or her responsibilities. On an annual basis, each member of our Board is required to complete a questionnaire designed to provide information to assist the Board in determining whether the director is independent under NASDAQ listing standards and our Corporate Governance Guidelines, and whether members of our Audit Committee and Compensation Committee satisfy additional SEC and NASDAQ independence requirements. Our Board has adopted guidelines setting forth certain categories of transactions, relationships and arrangements that it has deemed immaterial for purposes of making its determination regarding a director’s independence, and does not consider any such transactions, relationships, and arrangements in making its subjective determination.Corporate Governance Guidelines: Karen M. Garrison, Alice M. Peterson, Gregory A. Reid, Robert S. Roath, Wyman T. Roberts and Douglas R. Waggoner and Jonathan P. Ward. Our Board determined thatWaggoner. Mr. Baumann is not considered independent because he is our President and Chief Executive Officer. and Nominating Committee to independent directors, and all directors serving on thesesuch committees have been determined to be independent. Our Corporate Governance Guidelines require any director who has previously been determined to be independent to inform the Chairman and our Corporate Secretary of any change in his or her principal occupation or status as a member of the Board of any other public company, or any change in circumstance that may cause his or her status as an independent director to change.Board Leadership Structure and Lead Independent Directorby-laws,bylaws, our Board elects our Chairman and our Chief Executive Officer, or CEO.“CEO”. Our Corporate Governance Guidelines do not require that the roles of Chairman and CEO be held by separate individuals, giving the Board flexibility to make a determination when it elects a new Chairman or CEO. However, Ms. Garrison currently serves as our Chairman, and Mr. Baumann currently serves as our CEO. The Board believes that the separation of the offices of the Chairman and CEO is appropriate at present as it aids in the Board’s oversight of management and it allows our CEO to focus primarily on his management responsibilities.
Board committees help our Board run effectively and efficiently and supplement, but do not replace, the oversight of our Board as a whole. There are currently four principal Board committees: the Audit Committee, the Compensation Committee, the Executive Committee and the Nominating and Corporate Governance Committee. The Audit Committee, the Compensation Committee, and the Nominating and Corporate Governance meet regularly; the Executive Committee meets on anas-needed basis. Each committee has a written charter that has been approved by our Board. In addition, at each regularly scheduled Board meeting, a member of each committee reports on any significant matters addressed by the committee since the last Board meeting. Each committee performs an annual self-assessment to evaluate its effectiveness in fulfilling its obligations.
Risk is inherent within every business, and how well a business manages risk can ultimately determine its success. We face a number of risks, including economic, financial, legal and regulatory, operational, and other risks, such as the impact of competition.competition and climate change. Management is responsible for theday-to-day management of the risks that we face, while the Board, as a whole and through its committees, has responsibility for the oversight of risk management. In its risk oversight role, the Board is responsible for satisfying itself that the risk management framework and supporting processes as implemented by management are adequate and functioning as designed.
While the Board is ultimately responsible for risk oversight, the Board has delegated to the Audit Committee the primary responsibility for the oversight of risks facing our business. The Audit Committee’s charter provides that it will discuss our major risk exposures, including financial, operational, privacy, security, competition,business continuity, legal, and regulatory risks, and the steps we have taken to detect, monitor, and actively manage such exposures. The Audit Committee reviews with our Director of Internal Audit significant legal, compliance and regulatory matters that could have a material impact on our financial statements or our business, including material notices to, or inquiries received from, governmental agencies.
In addition to the general oversight responsibility that has been delegated to the Audit Committee, other committees review the risks within their areas of responsibility and expertise. For example, the Compensation Committee reviews the risks associated with our compensation policies and practices and our succession planning process, and the Nominating and Corporate Governance Committee reviews the risks associated with our overall corporate governance.
Our Director of Internal Audit, or DIA, is responsible for our internal audit function and our risk governance framework, which includes risk assessment, monitoring, and reporting. The DIA reports directly to the Audit Committee. The DIA facilitates the Audit Committee’s review and approval of the internal audit plan and provides regular reporting on audit activities. In addition, through consultation with management, the DIA periodically assesses the major risks facing theour company and coordinates with the executives responsible for such risks through the risk governance process. The DIA periodically reviews with the Audit Committee the major risks facing theour company and the steps management has taken to detect, monitor, and manage those risks within the agreed risk tolerance.tolerances. The executive responsible for managing a particular risk may also report to the Audit Committee on how the risk is being managed and progress towards agreed mitigation goals.
Our management has assessed the compensation policies and practices for our employees and concluded that they do not create risks that are reasonably likely to have a material adverse effect on our company. This analysis was presented to the Audit Committee and the Compensation Committee, both of which agreed with this conclusion. All directors are expected to attend our annual meeting of stockholders unless a Board meeting is not scheduled immediately following the annual meeting of stockholders. Our last annual meeting of stockholders was held SP+ CORPORATION 2020 PROXY STATEMENT 13Risk Assessment of Compensation Policies and PracticesWe haveAttendance at Annual Meetingsin April 2016, but aon May 8, 2019, and five out of the six director nominees who were serving on our Board meeting was not scheduled afteras of that date attended this meeting. Mr. Baumann and Mr. Wilhelm attended the 2016 annual meeting and Ms. Garrison attended telephonically.meeting.
As part of each regularly scheduled Board meeting, the outside directors have the opportunity to meet without our management or the other directors. Formerly, the Lead Independent Director led such discussions; after the elimination of this position effective January 1, 2017, theany director who is not independent. The Chairman will leadleads these sessions.
Board compensation is determined by the Compensation Committee and consists of a mixture of equity compensation and cash compensation. The Compensation Committee reviews boardBoard compensation annually. A more detailed description of current Board compensation can be found under the heading “Director“Non-Employee Director Compensation” below.
Our Board and each of its principal committees may retain outside advisors and consultants of their choosing at the company’sour expense. Our Board need not obtain management’s consent to retain outside advisors. In addition, the principal committees need not obtain either our Board’s or management’s consent to retain outside advisors.
We expect our directors, executive officers, and other employees to conduct themselves with the highest degree of integrity, ethics, and honesty. Our credibility and reputation depend upon the good judgment, ethical standards, and personal integrity of each director, executive, and employee. Our Corporate Governance Guidelines prohibit directorsa director from serving on the board, or in a senior executive role, of another company that would create a significant conflict of interest. In order to better protect our stockholders and us, we regularly review our Corporate Governance Guidelines, Code of Business Conduct, Code of Ethics and relatedother corporate governance policies to ensure that they provide clear guidance to our directors, executives, and employees. In addition, on an annual basis, each director and each executive officer is obligated to complete a director and officer questionnaire that requires disclosure of any transaction with us in which the director or executive officer, or any member of his or her immediate family, havehas a direct or indirect material interest.
It is important that the Board and its committees are performing effectively and in the best interests of theour company and our stockholders. The Board typically performs an annual self-assessment, led by the Chairman, (formerly, the Lead Independent Director), to evaluate its effectiveness in fulfilling its obligations. As part of this annual self-assessment, directors are able to provide feedback on the performance of other directors. The Chairman then follows up on this feedback and takes such further action with directors receiving comments and other directors as he or she deems appropriate.
Our Board recognizes the importance of effective executive leadership to our success, and we review succession plans for our senior leadership positions at least annually. As part of this process, our Board reviews and discusses the capabilities of our senior leadership, as well as succession planning and potential successors for members of our executive staff, including theour CEO. In conducting this review, the Board considers, among other factors, organizational and operational needs, competitive challenges, leadership/management potential and development, and emergency situations. The Board has also developed a set of guiding principles relating to Board membership, including the addition of directors with highly relevant professional experience.
We have taken a number of steps to ensure continued independence of our outside independent registered public accounting firm. Our independent registered public accounting firm reports directly to the Audit Committee, and we limit the use of our independent registered public accounting firm fornon-audit services. The fees for services provided by our independent registered public accounting firm in 20162019 and 20152018 and our policy onpre-approval ofnon-audit services are described under “Proposal No. 4-Ratification of Independent Registered Public Accounting Firm”“Audit Committee Disclosure” below.
SP+ CORPORATION 2020 PROXY STATEMENT |
14
As part of its oversight responsibilities, the charter of our Audit Committee requires that the Audit Committee review all related-party transactions for potential conflicts of interest. In addition, our Board has adopted a formal policy for related-party transactionsour Related Party Transaction Policy that requires the Audit Committee to review all transactions between our company and our executive officers, directors, nominees, principal stockholders and other related persons for potential conflicts involving amounts in excess of $5,000. This policy is available on the Investor Relations portion of our website.
We have adopted a code of ethics as part of our compliance program. The code of ethics applies to our Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer and Corporate Controller.all other persons performing similar functions on behalf of our company. In addition, we have adopted a code of business conduct that applies to all of our officers and employees.otheremployees. Any amendments to, or waivers from, our code of ethics for any executive officer will be posted on our
investor_relations@spplus.com.
Our insider trading policy prohibits directors, officers, employees, consultants and certain of their family members (“Covered Persons”) from purchasing or selling any typetransactions involving securities, other than certain excluded transactions (such as certain stock option exercises, vesting of securityrestricted stock and gifts), whether such securities were issued by us or another company, while such personCovered Person is aware of materialnon-public information relating to the issuer of the security or from providing such materialnon-public information to any person who may trade while aware of such information. Trades in our securities by directors and executive officers are prohibited during certain prescribed blackout periods and are required to bepre-cleared by appropriate SP Pluscompany personnel.
Our insider trading policy prohibits directors, executive officers, and other employeesCovered Persons from entering into any hedging or monetization transactions relating to our securities or otherwise trading in any instrument relating to the future price of our securities, such as a put or call option, futures contract, short sale, collar, or other derivative security. The policy also prohibits directors and executive officersCovered Persons from pledging SP Plus common stock as collateral for any loans.
Our Board welcomes your questions and comments. If you would like to communicate directly with our Board, or our independent directors as a group, then you may submit your communication to our General Counsel and Secretary,Chief Legal Officer, SP Plus Corporation, 200 E. Randolph Street, Suite 7700, Chicago, Illinois 60601-7702. All appropriate communications and concerns will be forwarded to our Chairman or our independent directors as a group, as applicable.
We have established a corporate hotline and an internalweb-based reporting application to allow any employee to confidentially and anonymously lodge a complaint about any accounting, environmental, internal control, auditing, or (where legally permissible) other matters of concern. A copy of our whistleblower policy is set forth on the Investor Relations section of our website.
SP+ CORPORATION 2020 PROXY STATEMENT |
15
Our Board expects that its members will diligently prepare for, attend and participate in all Board and applicable committee meetings. Directors are also expected to become familiar with our management team and operations as a basis for discharging their oversight responsibilities. During 20162019, our Board held six meetings, oneseven meetings. Each of which was held by teleconference. Directorsthe directors who served during 20162019 attended 100%all of our Board meetings except Paul Halpern who missed one meeting prior toheld during his resignation on December 14, 2016.
In 20162019 our Board had four standing committees to facilitate and assist our Board in the execution of its responsibilities: the Audit Committee, the Compensation Committee, the Executive Committee and the Nominating and Corporate Governance Committee. Each of thesethose committees operates pursuant to a written charter, which is available in the Corporate Governance section of our website, accessible through our Investor Relations page atwww.spplus.com.
The Audit Committee has fourthree members: KarenAlice M. Garrison, Robert S. Roath,Peterson, who serves as Chair, Wyman T. RobertsGregory A. Reid, and Douglas R. Waggoner. Our Board has determined that each of its members meets NASDAQ’s financial literacy and independence requirements, and that Ms. GarrisonPeterson and Messrs. Roath, Roberts andMr. Waggoner each qualify as an “audit committee financial expert” for purposes of the rules and regulations of the SEC. We limit the number of public-company audit committees on which any Audit Committee member may serve to three. Ms. Garrison serves on the audit committee of Tenet Healthcare. Our Board will continue to monitor and assess the audit committee memberships of our Audit Committee members on a regular basis.
The Audit Committee’s primary duties and responsibilities are to:
meet with our independent registered public accounting firm to review the results of the annual audit and to discuss our financial statements, including the independent registered public accounting firm’s judgment about the quality of accounting principles, the reasonableness of significant judgments, the clarity of the disclosures in our financial statements, our internal control over financial reporting, and management’s report with respect to internal control over financial reporting;
meet with our independent registered public accounting firm to review the interim financial statements prior to the filing of our Quarterly Reports onForm 10-Q;
recommend to our Board the independent registered public accounting firm to be retained by us;
oversee the independence of the independent registered public accounting firm;
evaluate the independent registered public accounting firm’s performance;
review and approve the feesservices of the independent registered public accounting firm;
receive and consider the independent registered public accounting firm’s comments as to controls, adequacy of staff and management performance and procedures in connection with audit and financial controls, including our system to monitor and manage business risks and legal and ethical compliance programs;
approve the Audit Committee Report for inclusion in our proxy statement;
approve audit andnon-audit services provided to us by our independent registered public accounting firm;
consider conflicts of interest and review all transactions with related persons involving executive officers or Board members that are reasonably expected to exceed specified thresholds;
meet with our General CounselChief Legal Officer to discuss legal matters that may have a material impact on our financial statements or our compliance policies and with other members of management to discuss other areas of risk to our company; and
review and approve our policies and decisions about using and entering into swaps.
A complete description of the Audit Committee’s function may be found in its charter, which may be accessed through the Corporate Governance section of our main website, accessible through our Investor Relations page at
www.spplus.com.The Audit Committee held fivesix meetings in 2016, all2019. Each of which were held by teleconference. Directorsthe directors who served on the Audit Committee during 20162019 attended 100%all of the meetings held during their tenure, except Mr. Waggoner who missed one meeting.his or her tenure.
SP+ CORPORATION 2020 PROXY STATEMENT |
16
The Compensation Committee consists of fourthree directors: Karen M. Garrison, Robert S. Roath,Gregory A. Reid, and Wyman T. Roberts, who serves as Chair, Wyman T. Roberts and Jonathan P. Ward.Chair. Our Board has determined that all members of this committeethe Compensation Committee are independent. The Compensation Committee’s primary duties and responsibilities are to:
review and discuss with management the Compensation Discussion and Analysis section of the proxy statement;
assist in defining a total compensation policy for our executives that supports our overall business strategy and objectives, attracts and retains key executives, links total compensation with business objectives and organizational performance, and provides competitive total compensation opportunities at a reasonable cost;
act on behalf of our Board in setting executive compensation policy, administer compensation plans approved by our Board and stockholders, and make decisions or develop recommendations for our Board with respect to the compensation of key executives;
review and determine the annual base salary levels, annual incentive opportunity levels, long-term incentive opportunity levels, executive perquisites, employment agreements, change in control and severance provisions/agreements, benefits, and supplemental benefits of the named executive officers;officers (“NEOs”);
review and approve corporate goals and objectives relevant to the Chief Executive Officer’s compensation, evaluate the Chief Executive Officer’s performance in light of those goals and objectives, and determine the Chief Executive Officer’s compensation level based on this evaluation; evaluate the Chief Executive Officer’s and other key executives’ compensation levels and payouts againstpre-established performance goals and objectives, an appropriate peer group, and the awards given to the Chief Executive Officer or other executives in past years;
review compensation policies and practices applicable to all employees as they relate to risk management and determine whether the risks arising from these compensation policies and practices are reasonably likely to have a material adverse effect;
approve all compensation consultant engagement fees and terms, including engagements with compensation consultants involving services in addition to executive and director compensation; and
prepare a report to be included in our proxy statement and provide other regular reports to our Board.
A complete description of the Compensation Committee’s function may be found in its charter, which may be accessed through the Corporate Governance section of our main website, accessible through our Investor Relations page at
www.spplus.com.The Compensation Committee held three meetings in 2016, two2019. Each of which were held by teleconference. Directorsthe directors who served on the Compensation Committee during 20162019 attended 100%all of the meetings held during theirhis or her tenure.
Compensation Committee Interlocks and Insider Participation
. DuringIn addition, no twonone of our directors serve together on both the SP Plus Board and any other public company boards or any committee thereof.
The Executive Committee currently consists of twofour directors: Karen M. Garrison, who serves as Chair, Alice M. Peterson, Wyman T. Roberts and Robert S. Roath.Douglas R. Waggoner. Our Board has determined that all members of this committeethe Executive Committee are independent. The Executive Committee’s primary duties and responsibilities include:
exercising some or all powers of our Board between regularly scheduled meetings;
serving as a sounding board for management on emerging issues, problems and initiatives; and
reporting to our Board at the Board’s next meeting on any official actions it has taken.
SP+ CORPORATION 2020 PROXY STATEMENT |
17
| BOARD COMMITTEES AND MEETINGS | ||||
Notwithstanding the foregoing, the Executive Committee does not have the powers of our Board for:
those matters whichthat are expressly delegated to another committee of our Board;
approving or adopting, or commending to the stockholders, any action or matter expressly required by the DGCLGeneral Corporation Law of Delaware (“DGCL”) or theour Certificate of Incorporation (the “Certificate”) to be submitted to the stockholders;
adopting, amending or repealing any of our By-Laws;
electing officers or filling vacancies on our Board or any committee of our Board; and
declaring a dividend, authorizing the issuance of stock (except pursuant to specific authorization by our Board), or such other powers as our Board may from time to time eliminate.eliminate; and
any other matters that, under the DGCL, the Certificate or our bylaws cannot be delegated by our Board to a committee.
A complete description of the Executive Committee’s function may be found in its charter, which may be accessed through the Corporate Governance section of our main website, accessible through our Investor Relations page atwww.spplus.com.
The Executive Committee held fourdid not hold any meetings in 2016, all of which were held by teleconference. Directors who served on the Executive Committee during 2016 attended 100% of the meetings held during their tenure.
The Nominating and Corporate Governance Committee consists of fourthree directors: Karen M. Garrison, Wyman T. Roberts and Douglas R. Waggoner, who serves as Chair, Robert S. Roath, Douglas R. Waggoner and Gordon H. Woodward.Chair. Our Board has determined that all members of this
have general responsibility for Board selection, including the identification of qualified candidates for Board membership, taking into account gender and age diversity as well as diversity of professional experience, education and other individual qualities and attributes that will contribute to Board heterogeneity;
recommend to our Board the directors to serve on each committee of our Board;
develop and recommend to our Board for its approval a set of corporate governance guidelines that it will review at least annually and recommend any proposed changes to our Board for its approval;
approve all director search firm engagement fees and terms; and
prepare a report to be included in our proxy statement and provide reports to our Board.
A complete description of the Nominating and Corporate Governance Committee’s function may be found in its charter, which may be accessed through the Corporate Governance section of our main website, accessible through our Investor Relations page at
www.spplus.com.The Nominating and Corporate Governance Committee held four meetings in 2016, two of which were held by teleconference.2019. Each of the directors who served on the Nominating and Corporate Governance Committee during 20162019 attended 100%at least 75% of the meetings held during theirhis or her tenure.
SP+ CORPORATION 2020 PROXY STATEMENT |
18
The table below sets forth certain information as of March 1, 2017 regarding our executive officers that are not identified in the table under “Board and Corporate Governance Matters-Nominees for Director.”
Name | Age | Position | |||||
Kristopher H. Roy | |||||||
Robert A. Miles | 58 | President of Bags | |||||
John Ricchiuto | 63 | President of Airport Division | |||||
Robert M. Toy | 63 | President of Commercial | |||||
Kristopher H. Royhas served as Chief Financial Officer & Treasurer since September 2019. Mr. Roy served as Senior Vice President and Corporate Controller from 2015 through August 2019. He joined our company in 2013 as Vice President and Assistant Controller. Prior to joining the company, Mr. Roy served as Global Director of Accounting, Consolidation, and Financial Systems at CNH Industrial N.V. and its predecessor from March 2013 to December 2013. He was a Senior Manager with Ernst & Young, LLP from 2009 until 2013. Mr. Roy is a Certified Public Accountant and earned his Bachelor of Arts degree from Michigan State University.
Robert A. Mileshas served as President, Bags since 2013. Prior to joining Bags in 2013, Mr. Miles served as Senior Vice President of Strategy, Business, Development & External Affairs for Orlando Health from 2005 to 2013. Mr. Miles was the Executive Vice President/Chief Financial Officer/Chief Operating Office for Test Rite Products Corporation from 2003 to 2005. From 2000 to 2002, Mr. Miles served as the Chief Operating Officer for Saull Enterprises, Inc. Mr. Miles served as the Chief Financial Officer for National Healing Corporation between 1998 and 2000 and as Director of Finance for Orlando Health from 1993 to 1998. From 1985 to 1992, Mr. Miles served as a Manager at Ernst & Young. Mr. Miles earned his Bachelor of Science degree and Master of Accountancy from Florida State University.
John Ricchiuto has served as President, Airport Division since May 2019. Mr. Ricchiuto served as Executive Vice President, Operations since July 2014. He served as our Senior Vice President for the greater New York metropolitan area from October 2012 following the Central Merger through June 2014. Prior to joining our company, he worked for Central Parking in a variety of capacities beginning in November 1997, including regional manager from December 2003 to October 2005, regional vice president from October 2005 to August 2007 and then as senior vice president for the greater New York Metropolitan Area beginning in August 2007. Mr. Chevalier began working in the parking business as a parking attendant with Kinney Systems Inc., eventually becoming regional vice president until Central Parking acquired the parent company of Kinney Systems in November 1997. Mr. Chevalier earned his degree in Military Leadership, Strategy and Law at Academia Militar 2 de Marzo in the Dominican Republic in 1986.
Robert M. Toy
has served as President,SP+ CORPORATION 2020 PROXY STATEMENT |
19
COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion & Analysis (this “CD&A”) describes the material components of the executive compensation program applicable to our NEOs. While the discussion in the CD&A focuses on our NEOs, many of our executive compensation programs apply broadly across our executive ranks.
Our NEOs for the fiscal year ended December 31, 2019 were:
G Marc Baumann, our President and Chief Executive Officer and a member of our Board;
Kristopher H. Roy, our Chief Financial Officer;
John Ricchiuto, our President, Airport Division;
Robert M. Toy, our President, Commercial Division;
Robert N. Sacks, our General Counsel; and
| • | Vance C. Johnston, our former Chief Financial Officer.1 |
Our compensation program is designed to reward employees for producing sustainable growth for our stockholders and to attract, motivate and retain top talent in the industry. Like most companies, we use a combination of fixed and variable, “at-risk”“at-risk” compensation programs to help align the interests of our executives with our stockholders. This “pay-for-performance”“pay-for-performance” philosophy forms the foundation of our Compensation Committee’s decisions regarding compensation. Underlying these decisions is the Compensation Committee’s beliefbeliefs that the labor market for the type of talent we require is limited, and that our executives are among the most capable and highest performing in the industry.
The compensation realized by our executives is closely related to our business performance. The impact of such business performance upon pay actually realized by our Chief Executive Officer and other named executive officersNEOs is described below to help our stockholders to better understand our executive compensation program and the key business factors that impact the design and ultimate payments made under our executive compensation program.
| Year Ended December 31, 2016 | Year Ended December 31, 2015 | ||||||||||||
| In millions except per share | Reported | Adjusted (3) | Reported | Adjusted (3) | |||||||||
| Gross profit (1) | $ | 176.4 | $ | 177.2 | $ | 170.1 | $ | 173.2 | |||||
| General and administrative expenses (1) | $ | 90.0 | $ | 83.0 | $ | 97.3 | $ | 88.4 | |||||
| EBITDA (1)(3) | $ | 83.6 | $ | 91.3 | $ | 69.9 | $ | 82.3 | |||||
| Net income attributable to SP Plus (1) | $ | 23.1 | $ | 29.8 | $ | 17.4 | $ | 21.8 | |||||
| Earnings per share (1) | $ | 1.03 | $ | 1.32 | $ | 0.77 | $ | 0.97 | |||||
| Free cash flow (2)(3) | $ | 42.4 | $ | 46.4 | $ | 27.1 | $ | 36.9 | |||||
| 1 | Mr. Johnston served as our Chief Financial Officer until his resignation effective April 18, 2019. |
SP+ CORPORATION 2020 PROXY STATEMENT |
20
| COMPENSATION DISCUSSION AND ANALYSIS | ||||
Year Ended December 31, 2019 | Year Ended December 31, 2018 | |||||||||||||||||||
Inmillionsexceptpershare | Reported | Adjusted (1) | Reported | Adjusted (1) | ||||||||||||||||
Gross profit (2) | $ | 228.1 | $ | 228.1 | $ | 184.0 | $ | 184.1 | ||||||||||||
General and administrative expenses (2) | $ | 109.0 | $ | 107.7 | $ | 91.0 | $ | 83.0 | ||||||||||||
Net income attributable to SP Plus (2) | $ | 48.8 | $ | 60.5 | $ | 53.2 | $ | 57.6 | ||||||||||||
Earnings per share (2) | $ | 2.20 | $ | 2.73 | $ | 2.35 | $ | 2.55 | ||||||||||||
EBITDA (1)(2) | $ | 116.2 | $ | 117.5 | $ | 89.8 | $ | 97.9 | ||||||||||||
Net cash provided by operating activities | $ | 76.0 | NA | $ | 70.9 | NA | ||||||||||||||
Free cash flow (1) | $ | 60.3 | NA | $ | 62.2 | NA | ||||||||||||||
| (1) | Refer to the financial tables set forth in Appendix A for a reconciliation of allnon-GAAP financial measures to U.S. GAAP. |
| (2) | Adjusted gross profit, adjusted general and administrative expenses, adjusted net income attributable to SP Plus, adjusted earnings per share attributable to SP Plus (“adjusted EPS”), and adjusted earnings before interest, income taxes, depreciation and amortization |
Our solid performance was reflected in the following elements of compensation earned or awarded to executives in 2016:
Our annual bonus plan primarily rewards a combination of budget attainment and year-over-year growth in Company Adjusted EBITDA, and the annual bonus awards paid an average of 93.3%115% of the target for our named executive officers, prior to adjustments.NEOs.
Each named executive officerNEO earned a significant amount of compensation tied to the performance of our stock through a performance-based incentive program under our Long-Term Incentive Plan that began in 2014 (the “Performance Share Program”), whereby we issue performance share units (“PSUs”) to named executive officersNEOs and others that represent shares potentially issuable in the future based on cumulative adjusted free cash flow over a three-year period, as well as previous grants and required stock holdings.
As part of 2016 named executive officer2019 NEO compensation, for the first time, the Compensation Committee approved and paid out shares of SP Plus common stock under the Performance Share Program that vest at the end of three-year performance periods. The realized value was 136.4%110% of target based upon cumulative adjusted free cash flow of $186.3246.2 million over the 2014-20162017-2019 performance cycle.
In March 2019, the Compensation Committee approved an increase in the CEO’s annual incentive target from $600,000 to $800,000 and Performance share target from $800,000 to $1.1M to address anon-going gap in market competitiveness for this key position.
In March 2019, the Compensation Committee approved an RSU grant to our current CFO to address a gap in our market competitiveness, The current CFO received RSU representing 10,155 shares with a grant date fair value of $ $341,817 that vests, if at all, on December 31, 2021.
We manage our pay structure and make compensation decisions using a combination of policies, practices and inherent logic. We have a “pay-for-performance”“pay-for-performance” culture as exemplified by our management of salaries, bonus compensation and equity compensation. Base salaries may be adjusted to provide market-based increases, and our executives’ true upside potential has been provided through bonuses and stock-based award opportunities available under our annual cash and long-term incentive plans. After considering all components of the compensation paid to the named executive officers,NEOs, the Compensation Committee has determined that the compensation arrangements are reasonable and appropriate given the success of the Bags Acquisition, our overall performance, market for talent, executive retention and business strategy.
In November 2018, the Compensation Committee authorized Willis Towers Watson to conduct a risk assessment of our executive compensation policies and practices. In March 2019, Willis Towers Watson reported its findings to the Compensation Committee. Based on this risk review, Willis Towers Watson concluded that we do not compensate or incentivize our executives in a manner that creates risks that are reasonably likely to have a material adverse impact on our company. The review consisted of an evaluation of the degree of Board oversight, pay philosophy and structure, plan design, performance metrics,
SP+ CORPORATION 2020 PROXY STATEMENT |
21
| COMPENSATION DISCUSSION AND ANALYSIS | ||||
and pay plan oversight. Willis Towers Watson concluded that, on an overall basis, our executive compensation program aligns with current market practices, contains an appropriate balance of risks versus rewards, and incorporates appropriate risk mitigating factors.
The Dodd-Frank Wall Street Reform and Consumer Protection Act requires public companies to provide their stockholders with an advisory vote to approve executive compensation at least once every three years. At our annual meeting of stockholders in 2017, our stockholders approved a proposal to hold a stockholder advisory vote on executive compensation every year.
This proposal, commonly known as a“Say-on-Pay” proposal, gives stockholders the opportunity to endorse or not endorse our executive pay program and policies. In connection with Proposal No. 2 set forth in this Proxy Statement, the Board has again recommended that stockholders consider and cast anon-binding advisory vote on a resolution approving 2019 NEO compensation. We are providing this stockholder advisory vote on our executive compensation in accordance with Section 14A of the Exchange Act and Exchange Act Rule14a-21(a).
Our Board values our stockholders’ feedback and pays careful attention to communications from our stockholders regarding our executive compensation practices. Our executive compensation program is designed to pay for performance and to align the long-term interests of our named executive officersNEOs and other members of our management team with the long-term interests of our stockholders, as discussed in more detail throughout this Proxy Statement. We believe these design and alignment principles help to ensure an appropriate balance between risk and reward; while our incentive compensation arrangements do not encourage employees to take unnecessary or excessive risks, our employees are rewarded for executing on our financial and strategic objectives. Further, the Compensation Committee and the Board of Directors believe that the compensation policies and procedures articulated in this Proxy Statement are effective in furthering our achievement of short-term, medium-term and long-term business goals, and that the compensation of our named executive officersNEOs reported in this Proxy Statement, which is structured to motivate superior individual performance, has supported and contributed to our success.
At our last annual meeting, our advisory vote to approve named executive officer 2015 compensation paid to our 2018 NEOs received the strong support of our stockholders (approximately 96.7%91.3% of the shares represented in person or by proxy and entitled to vote). Based on the results of last year’sSay-on-Pay vote, our Compensation Committee determined to keep the structure of our executive compensation program for 20162020 substantially similar to the structure of the executive compensation program for 2015,2019, including the Performance Share Program described below. As we continue to refine our compensation program, policies and practices going forward, we will continue to consider stockholder feedback.
Our Compensation Committee has administered our executive compensation program since this committee was established in conjunction with our initial public offering in June 2004.offering. Broadly stated, the Compensation Committee’s overall role is to oversee all of our compensation plans and policies, administer our equity plans and policies, approve equity grants to our executive officers and review and approve all compensation decisions relating to the named executive officers. InNEOs. As in the past, our Compensation Committee has engaged Willis Towers Watson in 2019 as a consultant to assist in addressing and discharging its duties and obligations. As required by the SEC, the Compensation Committee has determined Willis Towers Watson has no conflicts of interest with our company and is independent.
Our Chief Executive Officer and Chief Administrative Officer regularly and routinely work with our Compensation Committee throughout the year, with input as appropriate from our outside legal counsel, as well as from the Compensation Committee’s compensation consultant. Our Chief Executive Officer plays an integral and instrumental role in making specific recommendations to the Compensation Committee regarding the compensation for all of the named executive officersNEOs other than the Chief Executive Officer himself. Our Board decides the compensation of our Chief Executive Officer following recommendations made by the Compensation Committee.
SP+ CORPORATION 2020 PROXY STATEMENT |
22
| COMPENSATION DISCUSSION AND ANALYSIS | ||||
Our overall compensation philosophy is governed by three fundamental objectives:Compensation Objectives
attracting and retaining qualified key executives, many of whom are responsible for developing, nurturing and maintaining the client relationships that are critical to our business;
motivating performance to achieve specific strategic and operating objectives of our company; and
aligning executives’ interests with the long-term interests of our stockholders.
The primary elements of our executive compensation program are:
Compensation Element | Compensation Objective | Performance Metric | Characteristics | Time Horizon | ||||
Base Salary | •Attract and retain qualified executives | • | • Market-competitive, fixed level of compensation | •Annual | ||||
Management Incentive Compensation Program | •Attract and retain qualified executives • | • Company Adjusted | •At target, annual incentive provides market-competitive total cash opportunity • At-risk | •Annual | ||||
Performance Share Program | •Attract and retain qualified executives • • | •Cumulative Company Adjusted Free Cash Flow | •PSU awards paid in shares of SP Plus common stock • At-risk | •Three | ||||
Stock-Based Grants | •Attract and retain qualified executives • • | • • PSUs-Company Adjusted Company EBITDA | • Typically | • | ||||
Career Restricted Stock Units (closed) | •Attract and retain qualified executives • • | • | • One-time grants in 2008 to help retain, for their full careers, high-caliber senior management • | • |
The Compensation Committee reviews the executive compensation program and named executive officerNEO compensation on an annual basis. The use and relative contribution of each compensation element is based on a discretionary
SP+ CORPORATION 2020 PROXY STATEMENT |
23
Our Compensation Committee believes that the compensation of our named executive officersNEOs must be closely aligned with our performance, on both a short-short and long-term basis, at responsible levels that are consistent with our cost-conscious culture. At the same time, this Committee recognizes that our compensation programs must be designed to attract and retain key executives, many of whom are responsible for developing, nurturing and maintaining the client relationships that are important to producing superior results for our stockholders.
As the independent consultant to the Compensation Committee, Willis Towers Watson periodically conducts market-based assessments as to the competitiveness of our officers’ total pay opportunities. Over several years, theseThis competitive analyses have generallyanalysis found, for both the named executive officersNEOs and the broader management team, the following:
Our cash compensation (base and target bonus) is generally competitive with market norms with two named executive officers falling abovethe exception of the CFO, which fell below market median. This is due to the fact that our current CFO was recently promoted to the role.
Annualized long-term incentive compensation is generally below market median for all named executives.NEOs.
Total direct compensation levels (both actual and target) vary in competitiveness from individual to individual. Two outFour of five named executive officers,our NEOs, including our CEO and our current CFO, are positioned below the market median,median. One of our NEOs is at market median. This is largely due to the lower annualized long-termlong term incentive values. Three named executive officers were positioned between market median and the 75th percentile.
We continue to use published survey data as a broad indicator of market performance, but we do not benchmark against specific companies through a “peer group” or within such surveys. We operate in a large and fragmented industry with no direct public competitors. Accordingly, we do not use data that are specific to any company within the surveys. These surveys represent a broad group of general industry and service industry companies. We believe that the aforementioned survey sample is appropriate because it provides a significant sample size, includes reasonably accurate executive position matches for benchmarking purposes, and includes companies from other industries from which we might potentially recruit.
For compensation planning purposes, Willis Towers Watson has recommended that the most reasonable approach is to evaluate our pay practices for senior executives against this survey data scoped to reflect companies with revenues of approximately $2.0$2.1 billion. While this is larger than our reported revenue, the revenue we manage for clients is more than double our reported revenue, and the corresponding infrastructure necessary to support the business model more closely resembles a company with more than $2.0$2.1 billion in revenue.
Given the information obtained from the current and previous compensation studies, the Compensation Committee has informally adopted a guideline that targets total cash compensation in the 50th percentile range for executive officers. This range, however, is merely a guideline because the Compensation Committee does not believe in fixing compensation levels based only on market comparables. Rather, the Compensation Committee believes that other factors should be considered and weighted appropriately, including, but not limited to:
the history underlying our current compensation levels;
relative compensation levels among our senior executives;
pay levels in the parking industry; and
our overall performance in relation to the performance of other parking companies.
Our actual cash compensation practice is to target the market median when our company performance is in line with our financial goals.
Our NEO compensation SP+ CORPORATION 2020 PROXY STATEMENT 24Compensation Program Components to the named executive officers consists primarily of the following elements: base salary; compensation under our Management Incentive Compensation Program; compensation under our Long-Term Incentive Plan, which includes the Performance Share Program, stock-based grants and Career Restricted Stock Units; perquisites and personal benefits; and retirement benefits and deferred compensation opportunities.
Base salary is a critical element of named executive officerNEO compensation because it is the source of an officer’s consistent income stream and is the most visible barometer of evaluationvis-à-vis the employment market. In establishing and reviewing base salaries, the Compensation Committee considers various factors that include the executive’s qualifications and experience, scope of responsibilities, internal pay equity, past performance and achievements, future expectations that include the executive’s ability to impact short-term and long-term results, as well as the salary practices at other comparable companies. We strive to provide our named executive officersNEOs with a competitive base salary that is in line with their roles and responsibilities when compared to companies of comparable size.
Our named executive officersNEOs participate in our Management Incentive Compensation Program, which provides for an annual cash incentive bonus. Our Compensation Committee oversees this program, and it creates annual performance criteria that are flexible and that change with the needs of our business. By creating target awards and setting performance objectives at the beginning of each fiscal year, our named executive officersNEOs have the proper incentives to attain key performance metrics. The target bonus opportunities are fixed and subject to change only via approval of the Compensation Committee.
The target bonuses, metrics, weightings, level of achievement and awards are reported in the tables set forth under “2016“2019 Annual Incentive Compensation Payouts and Performance Analysis”,Analysis,” below.
Because one of our basic compensation objectives is to align our executives’ interests with the long-term interests of our stockholders, all shares issuedwe implemented stock ownership requirements for our senior executives in January 2007. On March 6, 2019, our Board adopted new, more robust executive stock ownership requirements, as described under our Long-Term Incentive Plan since January 2007 have holding restrictions once the shares vest. Once shares are issued upon vesting, the executive may sell enough unrestricted shares to enable payment of the state and federal income taxes. Of the remaining unrestricted shares, individuals are expected to comply with the Senior Executive Officercaption “Executive Stock Ownership Guidelines. See “Executive Share Ownership Requirements”, below.
For purposes of the Performance Share Program, reported free cash flow for each performance period will be adjusted for anyone-time expenses, benefits, cash payments or receipts made for acquisitions, joint ventures or other transactions;one-time expenses and benefits related to the sale or disposition of assets; legal costs forone-time,non-recurring items that arenon-core; cash taxes paid; significant refinancing costs and expenses (
e.g., credit agreement); and expenses, benefits and cash payments related to the Central Merger indemnification obligations, including expenses or cash payments for structural repairs.The number of performance shares set aside at the onset of the performance period is determined by dividing the stock price at the beginning of the performance period into the annual award values established for our named executive officers.NEOs. The
The target bonuses, metrics and awards are reported in the tables set forth under “2016“2019 Long-Term Incentive Plan Payouts and Performance Analysis”,Analysis,” below.
SP+ CORPORATION 2020 PROXY STATEMENT |
25
| COMPENSATION DISCUSSION AND ANALYSIS | ||||
regardless of stock price. Although stock options may also be issued under our Long-Term Incentive Plan, in the last threeten years our company has not issued any options and no options are currently outstanding. The Long-Term Incentive Plan expressly forbids option repricing without stockholder approval and expressly forbids exchanges of underwater options for cash.
Additionally, in March 2019, the Compensation Committee awarded our current CFO, who was serving as our Senior Vice President and Corporate Controller prior to his promotion to CFO, aone-time
We provide our named executive officersNEOs with certain perquisites and personal benefits. We believe that perquisites are often a way to provide the named executive officersNEOs with additional annual compensation that supplements their base salaries and bonus opportunities and are intended to ensure productivity. Perquisites include such things as parking and club memberships. When determining each named executive officer’sNEO’s base salary, we take the value of each named executive officer’sNEO’s perquisites and personal benefits into consideration.
The perquisites and personal benefits paid to each named executive officerNEO in 20162019 are reported in column (i) of the Summary Compensation Table, below, and further described in the footnotes thereto.
Deferred compensation is atax-advantaged means of providing certain named executive officersNEOs with additional compensation that supplements their base salaries and bonus opportunities, including our 401(k) plan. In addition, we have entered into various agreements over the years with certain named executive officersNEOs that provide for various retirement benefits and deferred compensation opportunities. These plans grew out of a perceived need to provide some form of retirement income to executives and are intended to provide a modest payment towards retirement.
Historically, we have maintained employment agreements with all of our named executive officers.NEOs. It is customary in our industry for senior executives to have employment agreements because it encourages employment continuity and is a practical means to insure that client relationships are protected through the legal enforcement of protective covenants, including the covenant not to compete and the covenant not to solicit customers and employees. Moreover, these agreements were created in part to ensure executive continuity because we had no programs with substantial executive retention value through the creation of forfeiture risk (e.g., pension plan, restricted stock, etc.) until 2007. Hence, executive retention and protection of our interests have been created in part through the use of employment agreements.
In general, the employment agreements of the named executive officersNEOs have provisions that are triggered if they are terminated for various reasons. Please see the “Payments and Potential Payments Upon Termination orChange-in-Control” section below for a description of the potential payments that may be made to the named executive officersNEOs in connection with their termination of employment or achange-in-control, and "Executive Compensation—Employment Agreements"“Executive Compensation-Employment Agreements” for a more detaildetailed description of the employment agreementagreements of our named executive officers.
The Compensation Committee approved the following principal compensation elements for 2016:2019: base salary, annual incentive bonus target, performance share unit grants, and performance share unit awards under the Long-Term Incentive Plan.
SP+ CORPORATION 2020 PROXY STATEMENT |
26
The Compensation Committee made recommendations to the Board for Mr. Baumann’s 20162019 compensation following the process and using the pay components described above. Mr. Baumann’s 2016 compensation was governed largely by his employment agreement with us. Mr. Baumann earned a base salary of $700,000did not increase in fiscal 2016, which was the same in 2015.2019. The Compensation Committee approved an annual incentive payment of $373,200$880,000 for 2016,2019, an increase of $99,200,$270,400, or 36%44.4%, from 2015 as 2018, reflecting better performance from the prior year and an increased bonus target. Asdescribed in detail below under “2016“2019 Annual Incentive Compensation Payouts and Performance Analysis.” Inaddition, the Compensation Committee approved the issuance of common stock valued at $204,538$440,423 under the 2014-20162017-2019 PSU cycle as described below under “2016“2019 Long-Term Incentive Plan Payouts and Performance Analysis.”
Taking into consideration his actual salary, actual annual incentive bonus payout, and actual stock awards for the 2017-2019 PSU cycle, Mr. Baumann earned $2,120,454 in 2019, which is 106% of his 2019 annual total target compensation ($2,000,000).
|
| |
2019 Target CEO Annual Compensation | 2019 Actual CEO Annual Compensation | |
Other compensation, including perquisites, totaled $125,759.
The Compensation Committee made 20162019 compensation recommendations to the BoardBoard.
Our CFO received a 13% salary increase from $265,000 to $300,000 effective March 1, 2019 to address market competitiveness in his then current position and another salary increase of 16.67% from $300,000 to $350,000 in conjunction with his promotion to CFO effective September 1, 2019. In addition, our current CFO received aone-time payment of $50,000 reflecting consideration for his role as interim CFO until he was formally appointed to the four other named executive officers following the processrole.
Mr. Ricchiuto and using the pay components described above. Mr. Sacks received a 1.3% and a 3.02% salary increase respectively.
SP+ CORPORATION 2020 PROXY STATEMENT |
27
| COMPENSATION DISCUSSION AND ANALYSIS | ||||
All of our other named executive officersNEOs have entered into employment agreements with us, and their compensation is governed largely by their respective employment agreements. The 20152018 and 20162019 base salary earned and annual incentive compensation payout for these named executive officersNEOs is set forth below together with the percentage increase.
| Name | 2015 Salary($) | 2016 Salary($) | % Increase | 2015 Annual Incentive Payout | 2016 Annual Incentive Payout | % Increase | |||||||
| Vance C. Johnston | 400,000 | 440,000 | 10.0 | 137,000 | 186,600 | 36.2 | |||||||
| William H. Bodenhamer, Jr. | 476,957 | 476,957 | — | 107,545 | 139,484 | 29.7 | |||||||
| Thomas L. Hagerman | 467,388 | 467,388 | — | 82,200 | 142,399 | 73.2 | |||||||
| Robert M. Toy | 447,288 | 521,895 | 16.7 | 102,750 | 168,873 | 64.4 | |||||||
Name | 2018 Salary($) | 2019 Salary($) | % Increase (Decrease) | 2018 Annual Incentive Payout($) | 2019 Annual Incentive Payout($) | % Increase (Decrease) | ||||||||||||||||||
Kristopher H. Roy | 265,000 | 350,000 | 32 | % | 81,280 | 139,333 | 71.4 | % | ||||||||||||||||
Robert N. Sacks | 375,000 | 385,500 | 2.8 | % | 152,400 | 165,000 | 8.3 | % | ||||||||||||||||
John Ricchiuto | 434,595 | 440,000 | 1.3 | % | 258,064 | 280,500 | 8.7 | % | ||||||||||||||||
Robert M. Toy | 550,000 | 550,000 | — | 190,500 | 294,938 | 55 | % | |||||||||||||||||
Vance C. Johnston* | 500,000 | 500,000 | — | 254,000 | — | — | ||||||||||||||||||
| * | Mr. Johnston served as our Chief Financial Officer until his resignation became effective on April 18, 2019. As such, he was not eligible to receive an incentive payout in 2019. |
For more detailed information, see “2016“2019 Annual Incentive Compensation Payouts and Performance Analysis.”
In addition, the Compensation Committee approved the issuance of common stock to these named executive officersNEOs under the 2014-20162017-2019 PSU cycle, rangingwhich ranged in value from $136,330$55,032 to $204,538.$165,138. For more detailed information, see “2016“2019 Long-Term Incentive Plan Payouts and Performance Analysis.”
Taking into consideration the actual salary, actual annual incentive bonus payout, and actual long-term incentivestock awards for the 2017-2019 PSU cycle, as well as aone-time RSU award for the 2014-2016 PSU cycle,our CFO, these named executive officersNEOs earned the following percentage of their total annual target compensation in 2016:2019: Mr. Johnston—111.8%Roy 196%, Mr. Bodenhamer—91.9%Sacks 103%, Mr. Hagerman—110.5%Ricchiuto 112%, and Mr. Toy—101.7%Toy 106%.
Awards made to our named executive officersNEOs in 20162019 under the Management Incentive Compensation Program were based on the weightings and metrics set forth in the table below:
| Actual Results | |||||||||||||
| Name | Metrics | Weighting | Threshold Metrics($) | Target Metrics($) | Maximum Metrics($) | Actual Metrics($) | |||||||
| G Marc Baumann | Adjusted Company EBITDA | 100 | % | 81,940,375 | 90,151,753 | 96,050,591 | 89,540,217 | ||||||
| Chief Executive Officer; President | |||||||||||||
| Vance C. Johnston | Adjusted Company EBITDA | 100 | % | 81,940,375 | 90,151,753 | 96,050,591 | 89,540,217 | ||||||
| Executive Vice President; | |||||||||||||
| Chief Financial Officer | |||||||||||||
| William H. Bodenhamer, Jr. | Adjusted Company EBITDA | (2) | 81,940,375 | 90,151,753 | 96,050,591 | 89,540,217 | |||||||
| Executive Vice President, Operations | Adjusted Business Unit EBITDA | 7,072,622 | 8,840,778 | 10,166,895 | 8,003,359 | ||||||||
| Thomas L. Hagerman | Adjusted Company EBITDA | 100 | % | 81,940,375 | 90,151,753 | 96,050,591 | 89,540,217 | ||||||
| Executive Vice President, Operations | |||||||||||||
| Robert M. Toy | Adjusted Company EBITDA | (2) | 81,940,375 | 90,151,753 | 96,050,591 | 89,540,217 | |||||||
| President of Commercial Operations | Adjusted Business Unit EBITDA | 82,734,471 | 103,418,090 | 118,930,802 | 101,150,645 | ||||||||
| Actual Results | ||||||||||||||||||||||
Name | Metrics | Weighting | Threshold Metrics($) | Target Metrics($) | Maximum Metrics($) | Actual Metrics($) | ||||||||||||||||
G Marc Baumann | Company Adjusted EBITDA | 100 | % | 105,000,000 | 114,294,000 | 121,696,485 | 116,832,344 | |||||||||||||||
Kristopher H. Roy | Company Adjusted EBITDA | 100 | % | 105,000,000 | 114,294,000 | 121,696,485 | 116,832,344 | |||||||||||||||
Robert N. Sacks | Company Adjusted EBITDA | 100 | % | 105,000,000 | 114,294,000 | 121,696,485 | 116,832,344 | |||||||||||||||
John Ricchiuto | Company Adjusted EBITDA | (1) | 105,000,000 | 114,294,000 | 121,696,485 | 116,832,344 | ||||||||||||||||
| Business Unit Adjusted EBITDA | 24,544,332 | 30,680,416 | 38,350,520 | 33,764,426 | ||||||||||||||||||
Robert M. Toy | Company Adjusted EBITDA | (1) | 105,000,000 | 114,294,000 | 121,696,485 | 116,832,344 | ||||||||||||||||
| Business Unit Adjusted EBITDA | 81,224,662 | 101,555,828 | 126,944,785 | 102,439,903 | ||||||||||||||||||
Vance C. Johnston | Company Adjusted EBITDA | 100 | % | 105,000,000 | 114,294,000 | 121,696,485 | 116,832,344 | |||||||||||||||
| * | Mr. Johnston resigned from the Company effective April 18, 2019 and as such did not receive a bonus. |
| (1) | The target bonus |
SP+ CORPORATION 2020 PROXY STATEMENT |
28
| COMPENSATION DISCUSSION AND ANALYSIS | ||||
EXAMPLE: Target Bonus ($150,000) multiplied by the companyour Company Adjusted EBITDA achievement percentage (70%(105%) = adjusted bonus target ($105,000)157,500) multiplied by the business unit attainment percentage (110%) = $115,500$173,250 total bonus.
Payouts can range from 0% to 150% of “adjusted” target (after applying the company performance factor) with the lowestnon-zero payout of 50% of the “adjusted” target, depending on a combination of corporate and business unit financial performance:
Awards made to our named executive officersNEOs in 20162019 under the Management Incentive Compensation Program, based on their individual achievement of their respective performance goals, ranged from $139,484$139,333 to $373,200,$880,000, as set forth in the table below:
| Name | Base Salary ($) | Target Bonus ($) | Target Bonus (%) | Metrics | Weighting (%) | Threshold Bonus ($) | Maximum Bonus ($) | Actual Bonus ($) | Actual Bonus as % of Target (%) | |||||||||
| G Marc Baumann | 700,000 | 400,000 | 57.1 | Adjusted Company EBITDA | 100 | 40,000 | 600,000 | 373,200 | 93.3 | |||||||||
| Vance C. Johnston | 440,000 | 200,000 | 45.5 | Adjusted Company EBITDA | 100 | 20,000 | 300,000 | 186,600 | 93.3 | |||||||||
| William H. Bodenhamer, Jr. | 476,939 | 200,000 | 41.9 | Adjusted Company EBITDA | (2) | 20,000 | 450,000 | 139,484 | 69.7 | |||||||||
| Thomas L. Hagerman | 467,370 | 150,000 | 32.1 | Adjusted Company EBITDA | 100 | 15,000 | 337,500 | 139,950 | 93.3 | |||||||||
| Robert M. Toy | 521,895 | 200,000 | 38.3 | Adjusted Company EBITDA | (2) | 20,000 | 450,000 | 168,873 | 84.4 | |||||||||
Name | Base Salary ($) | Target Bonus ($) | Target Bonus (%) | Metrics | Weighting (%) | Threshold Bonus ($) | Maximum Bonus ($) | Actual Bonus ($) | Actual Bonus as % of Target (%) | |||||||||||||||||||||||||
G Marc Baumann | 800,000 | 800,000 | 100 | Company Adjusted EBITDA | 100 | 400,000 | 1,200,000 | 880,000 | 110.0 | |||||||||||||||||||||||||
Kristopher H. Roy | 350,000 | 126,667 | 36 | Company Adjusted EBITDA | 100 | 63,334 | 190,000 | 139,333 | 110.0 | |||||||||||||||||||||||||
Robert N. Sacks | 385,500 | 150,000 | 39 | Company Adjusted EBITDA | 100 | 75,000 | 225,000 | 165,000 | 110.0 | |||||||||||||||||||||||||
John Ricchiuto | 440,000 | 200,000 | 45.5 | Company Adjusted EBITDA | (1) | 100,000 | 300,000 | 280,500 | 140.0 | |||||||||||||||||||||||||
Robert M. Toy | 550,000 | 250,000 | 45.5 | Company Adjusted EBITDA | (1) | 125,000 | 375,000 | 294,938 | 118.0 | |||||||||||||||||||||||||
Vance C. Johnston | 500,000 | * | * | Company Adjusted EBITDA | * | * | * | * | ||||||||||||||||||||||||||
| * | Mr. Johnston resigned from the Company effective April 18, 2019 and as such did not receive a bonus. |
| (1) | See explanation in footnote (1) above. |
The Compensation Committee believes that the Company Adjusted Company EBITDA measure for our Chief Executive OfficerCEO and the other named executive officersNEOs that participate in the program is the appropriate measure of performance at this time. This measure will likely evolve and ultimatelymay be modified as circumstances warrant, including possible adjustments due to acquisitions and other atypical events.
Payouts under the Performance Share Program, introducedwhich was first adopted under the Plan in 2014, that vest at the end of three-year performance periods. Payouts for the 2014-2016 PSU2017-2019 performance share unit cycle were based upon our Cumulative Adjusted Free Cash Flow during 2014-2016the cycle.
The target value and target number of shares were determined at the start of the performance period.
The realized value is a function of the number of shares earned, adjusted for cumulative adjusted free cash flow and the stock price when shares are released.
For the three-year performance period from 2014-2016, cumulative adjusted free cash flow2017-2019, Cumulative Adjusted Free Cash Flow was $186.3$246.2 million, placing the award at 125%75% of the target shares.
As a result, the realized value of performance share awards was 136.4%110% of target value.
| Name | Target Value ($) | Target Shares(1) | Shares Awarded | Actual Value ($)(2) | Realized Value as % of Target (%) | |||
| G Marc Baumann | $150,000 | 5,813 | 7,266 | 204,538 | 136.4 | |||
| Vance C. Johnston | $150,000 | 5,813 | 7,266 | 204,538 | 136.4 | |||
| William H. Bodenhamer, Jr. | $100,000 | 3,875 | 4,843 | 136,330 | 136.4 | |||
| Thomas L. Hagerman | $100,000 | 3,875 | 4,843 | 136,330 | 136.4 | |||
| Robert M. Toy | $100,000 | 3,875 | 4,843 | 136,330 | 136.4 | |||
SP+ CORPORATION 2020 PROXY STATEMENT |
29
| Name | 2016-2018 Threshold ($) | 2016-2018 Threshold (#)(1) | 2016-2018 Target ($) | 2016-2018 Target (#)(1) | 2016-2018 Maximum ($) | 2016-2018 Maximum (#)(1) | ||||||
| G Marc Baumann | 200,000 | 8,333 | 400,000 | 16,666 | 800,000 | 33,333 | ||||||
| Vance C. Johnston | 75,000 | 3,125 | 150,000 | 6,250 | 300,000 | 12,500 | ||||||
| William H. Bodenhamer, Jr. | 50,000 | 2,083 | 100,000 | 4,166 | 200,000 | 8,333 | ||||||
| Thomas L. Hagerman | 50,000 | 2,083 | 100,000 | 4,166 | 200,000 | 8,333 | ||||||
| Robert M. Toy | 62,500 | 2,422 | 125,000 | 5,208 | 250,000 | 10,416 | ||||||
Name | Target Value ($) | Target Shares (#) (1) | Shares Awarded (#) | Actual Value ($) (2) | Realized Value as % of Target (%) | |||||||||||||||
G Marc Baumann | 400,000 | 13,840 | 10,380 | 440,423 | 110.0 | |||||||||||||||
Kristopher H. Roy | 50,000 | 1,730 | 1,297 | 55,032 | 110.0 | |||||||||||||||
Robert N. Sacks | 100,000 | 3,460 | 2,595 | 110,106 | 110.0 | |||||||||||||||
John Ricchiuto | 100,000 | 3,460 | 2,595 | 110,106 | 110.0 | |||||||||||||||
Robert M. Toy | 150,000 | 5,190 | 3,892 | 165,138 | 110.0 | |||||||||||||||
Vance C. Johnston | 150,000 | 5,190 | * | * | * | |||||||||||||||
| * | Mr. Johnston forfeited all of his unvested awards upon the effectiveness of his resignation on April 18, 2019. |
| (1) |
| Name | 2016 Base Salary($) | 2017 Base Salary($) | 2017 Salary Increase($) | 2016 Target Bonus($) | 2017 Target Bonus($) | 2017 Total Target Cash Compensation ($) | |||||||
| G Marc Baumann | 700,000 | 700,000 | — | 400,000 | 400,000 | 1,100,000 | |||||||
| Vance C. Johnston | 440,000 | 440,000 | — | 200,000 | 200,000 | 640,000 | |||||||
| Thomas L. Hagerman | 467,370 | 467,370 | — | 150,000 | 150,000 | 617,370 | |||||||
| Robert M. Toy | 525,000 | 550,000 | 25,000 | 200,000 | 200,000 | 750,000 | |||||||
| Name(1) | 2017-2019 Threshold ($) | 2017-2019 Threshold (#) | 2017-2019 Target ($) | 2017-2019 Target (#)(2) | 2017-2019 Maximum ($) | 2017-2019 Maximum (#) | ||||||
| G Marc Baumann | 200,000 | 6,920 | 400,000 | 13,840 | 800,000 | 27,681 | ||||||
| Vance C. Johnston | 75,000 | 2,595 | 150,000 | 5,190 | 300,000 | 10,380 | ||||||
| Thomas L. Hagerman | 50,000 | 1,730 | 100,000 | 3,460 | 200,000 | 6,920 | ||||||
| Robert M. Toy | 75,000 | 2,595 | 150,000 | 5,190 | 300,000 | 10,380 | ||||||
Target shares are calculated by dividing the stock price at the beginning of the performance period ($28.90 on January 3, 2017) into the target value established for our |
| (2) | Based on the closing price per share of |
2019-2021 Performance Share Unit Cycle
The Performance Share Program provides participating executives with the opportunity to earn vested common stock if performance targets for cumulative Adjusted Free Cash Flow are achieved over the cumulative three-year period and recipients satisfy service-based vesting requirements. These PSUs will vest, if at all, on December 31, 2021, depending on whether the performance target exceeds the threshold performance level. On March 3, 2019, the Compensation Committee established the payout formula for the 2019-2021 PSU cycle under the Performance Share Program equal to 1 percent for every $3 million of cumulative three-year Adjusted Free Cash Flow over $266 million up to a $398 million cap with $333 million as the target.
| Performance Level | Cumulative Three- Year Free Cash Flow (millions)($) | Performance Payout* (%) | ||||||
Maximum | 398.0 | 200 | ||||||
Target | 333.0 | 100 | ||||||
Threshold | 266.0 | 0 | ||||||
| * | If our cumulative three-year Adjusted Free Cash Flow falls between performance levels, the |
On March 6, 2019, the Compensation Committee also established the threshold, target and maximum payout levels for our NEOs under the 2019-2021 PSU cycle. The table below provides information about the value of the awards based on threshold, target and maximum payout levels for the cumulative three years of the performance period:
| Name | 2019-2021 Threshold ($) | 2019-2021 Threshold (#) (1) | 2019-2021 Target ($) | 2019-2021 Target (#) (1) | 2019-2021 Maximum ($) | 2019-2021 Maximum (#) (1) | ||||||||||||||||||
G Marc Baumann | 550,000 | 18,619 | 1,100,000 | 37,237 | 2,200,000 | 74,474 | ||||||||||||||||||
Kristopher H. Roy | 37,500 | 1,269 | 75,000 | 2,538 | 150,000 | 5,076 | ||||||||||||||||||
Robert N. Sacks | 62,500 | 2,116 | 125,000 | 4,231 | 250,000 | 8,462 | ||||||||||||||||||
John Ricchiuto | 100,000 | 3,385 | 200,000 | 6,770 | 400,000 | 13,540 | ||||||||||||||||||
Robert M. Toy | 150,000 | 5,078 | 300,000 | 10,155 | 600,000 | 20,310 | ||||||||||||||||||
Vance C. Johnston | 200,000 | * | 400,000 | * | 600,000 | * | ||||||||||||||||||
| * | Mr. Johnston forfeited all rights to future LTIP grants upon the effectiveness of his resignation on April 18, 2019. |
| (1) | The number of performance shares set aside at onset of the performance period is determined by dividing the stock price at the beginning of the performance period ($29.54 on December 31, 2018) into the annual award values established for our NEOs. |
In order to align the interests of our senior executives with those of our stockholders, we implemented sharestock ownership guidelinesrequirements for our senior executives in January 2007. Subject2007, and, at December 31, 2019, all of our NEOs who were then-serving as
SP+ CORPORATION 2020 PROXY STATEMENT |
30
| COMPENSATION DISCUSSION AND ANALYSIS | ||||
senior executives were in compliance with these executive stock ownership requirements. On March 6, 2019, our Board adopted new, more robust executive stock ownership requirements for the same purpose, and also to limited exceptions, these guidelines requirehelp attract, motivate, and retain a talented and creative executive team while further promoting our key executivescommitment to maintainsound corporate governance. Under the new stock ownership requirements, our CEO is required to own and continuously hold a number of shares of our common stock and RSUs with a total value at least sixty percent (60%)equal to three times his base salary. Our other executive officers and senior executive officers are required to own and continuously hold a number of shares of our common stock and RSUs with a total value at least equal to two times his or her base salary. Our current NEOs are expected to achieve these ownership requirements by March 6, 2022, the third anniversary of the “net” shares they acquire fromdate the exercise of stock options or the vesting of restricted stock, restricted stock units or performance share units granted under our Long-Term Incentive Plan after January 2007. “Net” shares are deemed to be those shares that remain after any acquired shares are sold or netted to pay (if applicable) any associated withholding taxes.
| Name | Net Shares Acquired Under LTIP since January 2007 | 60% Requirement | Proportion of Requirement Met (%) | |||
| G Marc Baumann | 37,700 | 22,620 | 162 | % | ||
| Vance C. Johnston | 4,888 | 2,933 | 167 | % | ||
| Thomas L. Hagerman | 12,838 | 7,703 | 119 | % | ||
| Robert M. Toy | 3,473 | 2,084 | 167 | % | ||
We measure stock-based compensation expense at the grant date, based on the fair value of the award, and the expense is recognized over the requisite employee service period (generally, the vesting period) for awards expected to vest (considering estimated forfeitures). Accounting rules also require us to record cash compensation as an expense at the time the obligation is accrued.
Section 162(m) of the Internal Revenue Code limits the deductibility of compensation paid to certain executive officers to $1,000,000$1 million per year unlessyear. Historically, compensation that qualified as “performance-based compensation” under Section 162(m) of the Internal Revenue Code was not subject to this $1 million limit and, although we reserved the right to pay compensation qualifiesthat did not qualify as performance-based.performance based from time to time, our compensation programs were designed to permit us to deduct compensation expense under Section 162(m) of the Internal Revenue Code. The ability to rely on this performance-based exception was eliminated in 2017 (generally, and subject to certain transition rules, effective in 2018 and beyond), and the limitation on deductibility was generally expanded to include all NEOs. The Compensation Committee doeshas and will continue to take into consideration Section 162(m) in establishing compensation of our executives but considers other factors and business needs as well. Interpretations of and changes in applicable tax laws and regulations as well as other factors beyond our control also can affect deductibility of compensation. For these and other reasons, the Compensation Committee has determined that it will not necessarily seek to limit executive compensation to the amount that is deductible under Section 162(m) of the Code.
The Compensation Committee has concluded that it is not reasonably likely that the risks arising from our compensation policies and practices would have a material adverse effect on our company. In reaching this conclusion, the Compensation Committee considered the following factors:
in March 2019, Willis Towers Watson concluded that on an overall basis, our executive compensation program aligns with current market practices, contains an appropriate balance of risks versus rewards, and incorporates appropriate risk mitigating factors;
our compensation program is designed to provide a mix of both fixed and variable incentive compensation with no one component of pay providing a disproportionate segment of the whole; and
our compensation is balanced between a variety of different measures and both short-term and long-term incentives are designed to reward execution of our short-term and long-term corporate strategies.
We believe that it is in the best interests of our company and our stockholders to maintain a culture that emphasizes integrity and accountability, including as to financial reporting matters. Accordingly, on March 6, 2019, our Board adopted a clawback policy. This policy provides for the recoupment of certain executive officer compensation in the event of an accounting restatement resulting from material noncompliance with financial reporting requirements under Section 304 of the Sarbanes-Oxley Act of 2002,federal securities laws. This policy will be administered by the Compensation Committee, and it applies to Incentive Compensation paid, granted or otherwise awarded to our current and former executive officers. “Incentive Compensation” means annual bonusbonuses and other short- and long-term cash incentive compensation must be forfeited by our company’s chief executive officerawards, stock options, restricted stock awards and the chief financial officer if, during the 12-month period
SP+ CORPORATION 2020 PROXY STATEMENT |
31
The Compensation Committee of the Board of Directors has reviewed and discussed with management the foregoing “Compensation Discussion and Analysis,” and, based on such review and discussion, the Compensation Committee recommended to the Board of Directors that the “Compensation Discussion and Analysis” be included in this Proxy Statement on Schedule 14A for filing with the SEC.
| By the Compensation Committee, | |||
| Karen M. Garrison | |||
| Gregory A. Reid | |||
SP+ CORPORATION 2020 PROXY STATEMENT |
32
The following table sets forth the compensation earned, awarded or paid for services rendered to us in all capacities for the fiscal years ending December 31, 2016, 20152019, 2018 and 20142017 by our Principal Executive Officer (PEO), our Principal Financial Officer (PFO), and the three other highest paid executive officers other than the PEO and PFO. These persons are referred to, collectively, as the “named executive officers.”
Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Option Awards ($)(2) | Non-Equity Incentive Plan Compensation ($)(3) | All Other Compensation ($) | Total ($) | |
| (a) | (b) | (c) | (d) | (e) | (f) | (g) | (i) | (j) | |
| G Marc Baumann | 2016 | 700,027 | — | 393,984 | — | 373,200 | 125,759(4) | 1,592,943 | |
| Chief Executive Officer; | 2015 | 694,395 | — | 366,993 | — | 274,000 | 132,025 | 1,467,413 | |
| President (PEO) | 2014 | 560,540 | — | 150,000 | — | 102,250 | 126,158 | 938,948 | |
| Vance C. Johnston | 2016 | 438,350 | — | 147,750 | — | 186,600 | 13,424(5) | 786,124 | |
| Executive Vice President; | 2015 | 400,015 | — | 137,622 | — | 137,000 | 17,716 | 692,353 | |
| Chief Financial Officer (PFO) | 2014 | 314,458 | — | 350,000 | — | 81,800 | 132,494 | 878,752 | |
| William H. Bodenhamer, Jr.(6) | 2016 | 476,957 | — | 98,484 | — | 139,484 | 11,332(7) | 726,257 | |
| Exec. Vice President, Operations | 2015 | 476,957 | — | 91,748 | — | 107,545 | 11,332 | 687,582 | |
| 2014 | 473,183 | — | 100,000 | — | 80,198 | 11,182 | 664,563 | ||
| Thomas L. Hagerman | 2016 | 467,388 | — | 98,484 | — | 139,950 | 19,541(8) | 725,363 | |
| Executive Vice President, Operations | 2015 | 467,388 | — | 91,748 | — | 98,902 | 21,807 | 679,845 | |
| Robert M. Toy | 2016 | 521,895 | — | 123,117 | — | 168,873 | 11,332(9) | 825,547 | |
| President of Commercial Operations | |||||||||
Name and Principal Position (a) | Year (b) | Salary ($) (c) | Bonus ($) (2) (d) | Stock Awards ($) (1) (e) | Option Awards ($) (3) (f) | Non-Equity Incentive Plan Compensation ($) (4) (g) | All Other Compensation ($) (i) | Total ($) (j) | ||||||||||||||||||||||||||||||||
G Marc Baumann | 2019 | 800,031 | — | 1,253,397 | — | 880,000 | 101,506 | (5) | 3,034,934 | |||||||||||||||||||||||||||||||
Chief Executive Officer; President (PEO) | 2018 | 800,031 | — | 1,638,137 | — | 609,600 | 128,066 | 3,175,834 | ||||||||||||||||||||||||||||||||
| 2017 | 729,195 | — | 470,560 | — | 211,600 | 127,869 | 1,539,224 | |||||||||||||||||||||||||||||||||
Kristopher H. Roy | 2019 | 307,434 | 50,000 | 313,307 | — | 139,333 | 8,760 | (6) | 818,834 | |||||||||||||||||||||||||||||||
Chief Financial Officer (PFO) | ||||||||||||||||||||||||||||||||||||||||
Robert N. Sacks | 2019 | 382,214 | — | 142,415 | — | 165,000 | 25,090 | (7) | 714,719 | |||||||||||||||||||||||||||||||
General Counsel | ||||||||||||||||||||||||||||||||||||||||
John Ricchiuto | 2019 | 436,188 | — | 227,878 | — | 280,500 | 12,039 | (8) | 956,605 | |||||||||||||||||||||||||||||||
President of Airport Division | 2018 | 434,612 | — | 476,432 | — | 258,064 | 11,849 | 1,180,957 | ||||||||||||||||||||||||||||||||
| 2017 | 434,612 | — | 117,640 | — | 106,131 | 11,681 | 670,064 | |||||||||||||||||||||||||||||||||
Robert M. Toy | 2019 | 550,021 | — | 341,817 | — | 294,938 | 12,360 | (9) | 1,199,136 | |||||||||||||||||||||||||||||||
President of Commercial Division | 2018 | 543,675 | — | 573,618 | — | 190,500 | 12,210 | 1,320,003 | ||||||||||||||||||||||||||||||||
| 2017 | 542,729 | — | 176,460 | — | 79,086 | 12,060 | 810,335 | |||||||||||||||||||||||||||||||||
Vance C. Johnston | 2019 | 170,839 | — | * | — | * | 5,491 | (10) | 176,330 | |||||||||||||||||||||||||||||||
Former Chief Financial Officer (Former PFO) | 2018 | 500,019 | — | 573,618 | — | 254,000 | 14,264 | 1,341,901 | ||||||||||||||||||||||||||||||||
| 2017 | 457,517 | — | 176,460 | — | 105,800 | 13,682 | 753,459 | |||||||||||||||||||||||||||||||||
| (1) | The amounts shown in column (e) for 2019 represent the aggregate grant date fair value of (i) the 2019-2021 performance share |
The amounts shown in column (e) for 2016 represent the grant date fair value of the 2016-2018 performance share unitPSU awards granted to all NEOs under the Long-Term Incentive Plan. The fair value of these awardsPerformance Share Program is based on the closing price of our common stock ($23.64)33.66) on March 28, 20166, 2019 (grant date), and is calculated at the target share payout for the cumulative three years of the performance period. For information about the threshold and maximum payout amounts under thesethe PSU awards, see the “Grants of Plan-Based Awards for 2016”2019” table below.
The performance share units for 2016 were granted effective January 1, 2016, and they mayfair value of Mr. Roy’s RSU award is based on the closing price of our common stock ($33.66) on March 6, 2019 (grant date). All of these RSUs vest on December 31, 2021.
The amounts shown in column (e) were computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, not the actual amounts paid to or realized by the NEOs during our 2019, 2018 uponand 2017 fiscal years. An explanation of the attainmentmethodology for payouts under our performance stock and restricted stock awards is discussed in the footnotes to the “Grants of a three-year adjusted free cash flow target. See “Compensation DiscussionPlan-Based Awards for 2019” and Analysis” for more information about the Performance Share Program.“Outstanding Equity Awards at FiscalYear-End
SP+ CORPORATION 2020 PROXY STATEMENT |
33
| EXECUTIVE COMPENSATION | ||||
| (2) | The amount in column (d) reflects aone-time bonus reflecting Mr. Roy’s contribution in an interim role as CFO before his formal promotion. |
| (3) | No |
| (4) | |
The amounts for |
| (5) | |
The amount for |
| (6) | |
The amount for |
| (7) | The amount for 2019 shown in column (i) for Mr. Sacks reflects contributions made by us under our 401(k) plan in the amount of $5,847, $2,661 for group term life insurance, $7,644 in medical reimbursements, $4,116 in club dues, $550 for airline clubs and $4,272 in company-paid parking. |
| (8) | The amount for 2019 shown in column (i) for Mr. Ricchiuto reflects contributions made by us under our 401(k) plan in the amount of $8,400, $3,089 for group term life insurance, and $550 for airline clubs. |
| (9) | The amount for 2019 shown in column (i) for Mr. Toy reflects contributions made by us under our 401(k) plan in the amount of $8,400 and $3,960 for group term life insurance. |
| (10) | The amount for 2019 shown in column (i) for Mr. Johnston reflects contributions made by us under our 401(k) plan in the amount of |
SP+ CORPORATION 2020 PROXY STATEMENT |
34
| EXECUTIVE COMPENSATION | ||||
The following table sets forth summary information regarding performance share unitsRSUs and PSUs granted to our named executive officersNEOs pursuant to our Long-Term Incentive Plan and bonus amounts achievable pursuant to our Management Incentive Compensation Program during 2016.
Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | Grant Date Fair Value of Stock | |||||||||||
| Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | Awards ($)(3) | |||||
| (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | |||||
| G Marc Baumann | 1/1/2016 | 40,000 | 400,000 | 600,000 | |||||||||
| 3/28/2016 | 8,333 | 16,666 | 33,333 | 393,984 | |||||||||
| Vance C. Johnston | 1/1/2016 | 20,000 | 200,000 | 300,000 | |||||||||
| 3/28/2016 | 3,125 | 6,250 | 12,500 | 147,750 | |||||||||
| William H. Bodenhamer, Jr. | 1/1/2016 | 20,000 | 200,000 | 450,000 | |||||||||
| 3/28/2016 | 2,083 | 4,166 | 8,333 | 98,484 | |||||||||
| Thomas L. Hagerman | 1/1/2016 | 15,000 | 150,000 | 337,500 | |||||||||
| 3/28/2016 | 2,083 | 4,166 | 8,333 | 98,484 | |||||||||
| Robert M. Toy | 1/1/2016 | 20,000 | 200,000 | 450,000 | �� | ||||||||
| 3/28/2016 | 2,604 | 5,208 | 10,416 | 123,117 | |||||||||
Estimated Future Payouts UnderNon-Equity Incentive Plan Awards (2)
| Estimated Future Payouts Under Equity Incentive Plan Awards (3)
| All Other Stock Awards: Number of Shares of Stock or | Grant Date Fair Value of Stock | |||||||||||||||||||||||||||||||||||||
Name (a) (1) | Grant Date (b) | Threshold ($) (c) | Target ($) (d) | Maximum ($) (e) | Threshold (#) (f) | Target (#) (g) | Maximum (#) (h) | Units (#) (i) | Awards ($) (j) | |||||||||||||||||||||||||||||||
G Marc Baumann | 1/1/2019 | 400,000 | 800,000 | 1,200,000 | ||||||||||||||||||||||||||||||||||||
| 3/6/2019 | 18,619 | 37,237 | 74,474 | 1,099,981 | ||||||||||||||||||||||||||||||||||||
Kristopher H. Roy | 1/1/2019 | 63,334 | 126,667 | 190,000 | ||||||||||||||||||||||||||||||||||||
| 3/6/2019 | 1,269 | 2,538 | 5,076 | 74,973 | ||||||||||||||||||||||||||||||||||||
| 3/6/2019 | 10,155 | (4) | 341,817 | |||||||||||||||||||||||||||||||||||||
Robert N. Sacks | 1/1/2019 | 75,000 | 150,000 | 225,000 | ||||||||||||||||||||||||||||||||||||
| 3/6/2019 | 2,116 | 4,231 | 8,462 | 124,984 | ||||||||||||||||||||||||||||||||||||
John Ricchiuto | 1/1/2019 | 100,000 | 200,000 | 300,000 | ||||||||||||||||||||||||||||||||||||
| 3/6/2019 | 3,385 | 6,770 | 13,540 | 199,986 | ||||||||||||||||||||||||||||||||||||
Robert M. Toy | 1/1/2019 | 125,000 | 250,000 | 375,000 | ||||||||||||||||||||||||||||||||||||
| 3/6/2019 | 5,078 | 10,155 | 20,310 | 299,973 | ||||||||||||||||||||||||||||||||||||
| (1) | Vance Johnston resigned effective April 18, 2019 and as such did not receive any plan-based awards in 2019. |
| (2) | The amounts included in columns (c), (d) and (e) reflect the cash bonus amounts achievable pursuant to our Management Incentive Compensation Program. See “Compensation Discussion and Analysis” for a discussion of timing of various pay decisions. |
| (3) | |
On March |
| Name | 2016-2018 Threshold ($) | 2016-2018 Target ($) | 2016-2018 Maximum ($) | |
| G Marc Baumann | 200,000 | 400,000 | 800,000 | |
| Vance C. Johnston | 75,000 | 150,000 | 300,000 | |
| William H. Bodenhamer, Jr. | 50,000 | 100,000 | 200,000 | |
| Thomas L. Hagerman | 50,000 | 100,000 | 200,000 | |
| Robert M. Toy | 62,500 | 125,000 | 250,000 | |
Name | 2019-2021 Threshold ($) | 2019-2021 Target ($) | 2019-2021 Maximum ($) | |||||||||
G Marc Baumann | 550,000 | 1,100,000 | 2,200,000 | |||||||||
Kristopher H. Roy | 37,500 | 75,000 | 150,000 | |||||||||
Robert N. Sacks | 62,500 | 125,000 | 250,000 | |||||||||
John Ricchiuto | 100,000 | 200,000 | 400,000 | |||||||||
Robert M. Toy | 150,000 | 300,000 | 600,000 | |||||||||
Vance C. Johnston* | 200,000 | 400,000 | 800,000 | |||||||||
| * | Vance Johnston resigned effective April 18, 2019 and, as such, did not receive any plan-based awards in 2019. |
The Performance Share Program provides participating executives with the opportunity to earn vested common stock if performance targets forpre-tax free cash flow are achieved over the cumulative three-year period and recipients satisfy service-based vesting requirements.
| (4) | |
Column (i) sets forth the number of RSUs granted to Mr. Roy on March 6, 2019 and made effective as of January 1, 2019, all of which vest on December 31, 2021. Column (j) sets forth the grant date fair value of |
SP+ CORPORATION 2020 PROXY STATEMENT |
35
| EXECUTIVE COMPENSATION | ||||
The following table shows stock awards subject to certain restrictions and other contingencies outstanding on December 31, 20192016,2019, the last day of our fiscal year, for our named executive officers.NEOs. No named executive officerNEO held stock options or stock appreciation rights as of December 31, 2016.2019. Stock Awards Name Grant Date/Performance ShareUnit Period(1)Number of UnearnedShares, Units or OtherRights That Have NotVested (#)Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(2) Equity Incentive PlanAwards: Number ofUnearned Shares, Unitsor Other Rights ThatHave Not Vested(3)Equity Incentive PlanAwards: Market orPayout Value ofUnearned Shares, Unitsor Other Rights ThatHave Not Vested($)(2)G Marc Baumann 1/1/14-12/31/16 (4) 7,266 204,538 1/1/15-12/31/17 (5) 16,576 466,614 1/1/16-12/31/18 (6) 16,666 469,148 Vance C. Johnston 3/25/14 7,518(7) 211,632 1/1/14-12/31/16 (4) 7,266 204,538 1/1/15-12/31/17 (5) 6,216 174,980 1/1/16-12/31/18 (6) 6,250 175,938 William H. Bodenhamer, Jr. 1/1/14-12/31/16 (4) 4,843 136,330 1/1/15-12/31/17 (5) 4,144 116,654 1/1/16-12/31/18 (6) 4,166 117,273 Thomas L. Hagerman 7/1/2008 42,000(8) 1,182,300 1/1/14-12/31/16 (4) 4,843 136,330 1/1/15-12/31/17 (5) 4,144 116,654 1/1/16-12/31/18 (6) 4,166 117,273 Robert M. Toy 16,495(9) 464,334 1/1/14-12/31/16 (4) 4,843 136,330 1/1/15-12/31/17 (5) 4,144 116,654 1/1/16-12/31/18 (6) 5,208 146,605
| Stock Awards | ||||||||||||||||||||
Name (1) | Grant Date/ Performance Share Unit Period (2) | Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (3) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (4) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (3) | |||||||||||||||
G Marc Baumann | 1/1/17-12/31/19 | (5) | 10,380 | 440,423 | ||||||||||||||||
| 1/1/18-12/31/20 | (6) | 21,276 | 902,741 | |||||||||||||||||
| 1/1/18-12/31/20 | (6) | 11,968 | 507,802 | |||||||||||||||||
| 1/1/19-12/31/21 | (7) | 37,237 | 1,579,966 | |||||||||||||||||
| 5/4/18 | (8) | 11,968 | 507,802 | |||||||||||||||||
Kristopher H. Roy | 1/1/17-12/31/19 | (5) | 1,297 | 55,032 | ||||||||||||||||
| 1/1/18-12/31/20 | (6) | 1,994 | 84,605 | |||||||||||||||||
| 1/1/19-12/31/21 | (7) | 2,538 | 107,687 | |||||||||||||||||
| 03/6/2019 | (9) | 10,155 | 430,877 | |||||||||||||||||
Robert N. Sacks | 1/1/17-12/31/19 | (5) | 2,595 | 110,106 | ||||||||||||||||
| 1/1/18-12/31/20 | (6) | 3,324 | 141,037 | |||||||||||||||||
| 1/1/19-12/31/21 | (7) | 4,231 | 179,521 | |||||||||||||||||
John Ricchiuto | 7/1/2008 | (10) | 14,000 | 594,020 | ||||||||||||||||
| 1/1/17-12/31/19 | (5) | 2,595 | 110,106 | |||||||||||||||||
| 1/1/18-12/31/20 | (6) | 5,319 | 225,685 | |||||||||||||||||
| 1/1/19-12/31/21 | (7) | 6,770 | 287,251 | |||||||||||||||||
| 5/21/18 | (8) | 7,978 | 338,507 | |||||||||||||||||
Robert M. Toy | 1/1/17-12/31/19 | (5) | 3,892 | 165,138 | ||||||||||||||||
| 1/1/18-12/31/20 | (6) | 7,978 | 338,507 | |||||||||||||||||
| 1/1/19-12/31/21 | (7) | 10,155 | 430,877 | |||||||||||||||||
| 5/21/18 | (8) | 7,978 | 338,507 | |||||||||||||||||
| (1) | Vance Johnston resigned effective April 18, 2019 and forfeited all of his unvested awards on such date. |
| (2) | For a better understanding of this table, we have included an additional column showing the grant dates of RSUs and the associated performance periods for the PSUs. |
| (3) | |
Based on the closing price per share of our common stock on December |
| (4) | |
The shares in the Equity Incentive Plan Awards column represent |
| (5) | |
The performance period for these PSUs ended on December 31, |
| (6) | |
The performance period for these PSUs is scheduled to end on December 31, |
| (7) | |
The performance period for these PSUs is scheduled to end on December 31, |
| (8) |
These RSUs will vest on December |
| (9) | These RSUs will vest on December 31, 2021. |
| (10) | These RSUs will vest on July 1, 2020. |
SP+ CORPORATION 2020 PROXY STATEMENT |
36
| EXECUTIVE COMPENSATION | ||||
The following table provides information on the Stock Vested During 20162019vesting of performance share unitsRSUs and PSUs held by NEOs that vested during 2016.2019. Our company has no outstanding option awards. Stock Awards Name Number ofSharesAcquired onVesting(#)(1)Value Realizedon Vesting($)(2)G Marc Baumann 7,266 204,538 Vance C. Johnston 7,266 204,538 William H. Bodenhamer, Jr. 4,843 136,330 Thomas L. Hagerman 4,843 136,330 Robert M. Toy 4,843 136,330
| Stock Awards | ||||||||
Name (1) | Number of Shares Acquired on Vesting (#) (2) | Value Realized on Vesting ($) (4) | ||||||
G Marc Baumann | 10,380 | 440,423 | ||||||
Kristopher H. Roy | 1,297 | �� | 55,032 | |||||
Robert N. Sacks | 2,595 | 110,106 | ||||||
John Ricchiuto (3) | 16,595 | 704,126 | ||||||
Robert M. Toy | 3,892 | 165,138 | ||||||
| (1) | Vance Johnston resigned effective April 18, 2019 and as such did not receive any plan based awards in 2019. |
| (2) | Comprised of PSUs that converted to shares of common stock on aone-for-one basis upon vesting on December 31, |
| (3) | Comprised of 2,595 PSUs that converted to shares of common stock on aone-for-one basis upon vesting on December 31, 2019 and 14,000 shares underlying RSUs that vested on July 1, 2019. |
Based on the closing price per share of our common stock on December |
We have not engaged in any modifications to, orre-pricings of, any outstanding equity awards during the last three fiscal years.
Our named executive officersNEOs participated in a Deferred Compensation Plan that provided each with the opportunity to defer an amount which, when combined with his 401(k) plan deferral, will equal the maximum allowable deferral pursuant to the IRS section 415 limits. The following table sets forth the nonqualified deferred compensation of our named executive officersNEOs that received such compensation for the fiscal year ending December 31, 2016.
| Name | Executive Contributions in 2016 ($)(1) | Registrant Contributions in 2016 ($)(2) | Aggregate Earnings (loss) in 2016 ($)(3) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at 12/31/16 ($)(4) | |||||
| (a) | (b) | (c) | (d) | (e) | (f) | |||||
| G Marc Baumann | 17,501 | 7,300 | 1,988 | — | 165,267 | |||||
| Vance C. Johnston | 26,301 | 7,300 | 2,053 | — | 66,581 | |||||
| William H. Bodenhamer, Jr. | 97,800 | 7,300 | 7,092 | — | 499,055 | |||||
| Thomas L. Hagerman | — | — | 1,298 | 11,181 | 27,552 | |||||
| Robert M. Toy | 18,226 | 7,300 | 1,621 | — | 125,242 | |||||
Name (a) | Executive Contributions in 2019 ($) (1) (b) | Registrant Contributions in 2019 ($) (2) (c) | Aggregate Earnings (loss) in 2019 ($) (3) (d) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at 12/31/19 ($) (4) | |||||||||||||||
G Marc Baumann | 20,000 | 7,125 | 29,256 | — | 350,965 | |||||||||||||||
Kristopher H. Roy | 44,851 | 7,125 | 34,268 | — | 267,899 | |||||||||||||||
Robert N. Sacks | 30,480 | 4,572 | 15,090 | — | 602,794 | |||||||||||||||
John Ricchiuto | 28,482 | 7,125 | 40,548 | — | 470,431 | |||||||||||||||
Robert M. Toy | 63,896 | 7,205 | 45,846 | — | 380,520 | |||||||||||||||
Vance C. Johnston | 10,250 | 2,458 | 16,522 | 176,469 | — | |||||||||||||||
| (1) | The amounts included in column (b) are included as Salary in column (c) of the Summary Compensation Table. |
| (2) | The amounts included in column (c) are included as All Other Compensation in column (i) of the Summary Compensation Table. |
| (3) | None of the amounts reported in column (d) are reported in the Summary Compensation Table. |
| (4) | Amounts reported in column (f) for each |
SP+ CORPORATION 2020 PROXY STATEMENT |
37
As required by the Dodd-Frank Act and Item 402(u) of RegulationS-K, we are providing the following information about the relationship of the annual total compensation of our median employee to the annual total compensation of our CEO.
As is permitted under the SEC rules, to determine our median employee, we chose “gross wages” as our consistently applied compensation measure. Using a determination date of December 31, 2019, our employee population was comprised of 23,170 people. Under the 5%de minimis rule, we excluded 277non-US employees (approximately 1.2% of our global workforce) in Canada from the employee population used to identify our median employee and calculate the CEO pay ratio. From the remaining 22,893 employees, we identified our median employee. We determined that our median employee’s total compensation was $20,080 calculated in accordance with the SEC rules applicable to the Summary Compensation Table, while our CEO’s total compensation included in the Summary Compensation Table was $3,034,934. Accordingly, our estimated CEO pay ratio is 151 to 1.
This ratio is a reasonable estimate calculated using a methodology consistent with the SEC rules. As the SEC rules allow for companies to adopt a wide range of methodologies, to apply country exclusions and to make reasonable estimates and assumptions that reflect their compensation practices to identify the median employee and calculate the CEO pay ratio, the ratio may not be comparable to the CEO pay ratios presented by other companies.
We entered into an Amended and Restated Executive Employment Agreement with Mr. Baumann dated November 19, 2014,and effective as of JanuaryJune 1, 2015. Pursuant2019, to the terms of thisserve as our Chief Executive Officer. The employment agreement we have agreedcontinues month-to-month until terminated by either party.
The employment agreement provides Mr. Baumann with the following compensation and benefits:
annual base salary of no less than $800,000, subject to payreview annually in accordance with our company’s review policies and practices then in effect;
participation in any annual bonus program maintained by our company for its senior executives with a target of not less than $800,000;
participation in the LTIP;
participation in all compensation and employee benefit plans or programs, and all benefits or perquisites, for which any member of our company’s senior management is eligible under any existing or future plan or program; and
payment of the premiums on certain insurance policies owned by Mr. Baumann until he reaches the age of 65 that will provide an annual cash benefit of $150,000 payable to him for a period of 15 years, beginning in the year in which Mr. Baumann attains age 65.
The current amount of the annual premium is $105,901.
We also have employment agreements with each of our other named executive officers.NEOs. Each executive’s compensation is governed largely by his respective employment agreement, subject to annual review. Each of the employment agreements automatically renews forone-year periods unless either party provides advanced notice of an intention not to renew the employment agreement. As of April 1, 2020, the employment agreements terminate on the following dates, subject automatic renewal unless termination notice is provided by either party:Mr. Roy-August 31, 2020, Mr. Ricchiuto-December 31, 2020,Mr. Toy-October 2, 2020 and Mr. Sacks agreement will terminate on March 31, 2020, upon his retirement.
SP+ CORPORATION 2020 PROXY STATEMENT |
38
| EXECUTIVE COMPENSATION | ||||
Each of the employment agreements provides the NEO with the following compensation and benefits:
a minimum annual base salary, subject to review annually in accordance with our company’s review policies and practices then in effect;
participation in any annual bonus program maintained by our company for its senior executives;
participation in the LTIP; and
participation in all compensation and employee benefit plans or programs, and all benefits or perquisites, for which any member of our company’s senior management is eligible under any existing or future plan or program.
The annual salary for each as of December 31, 20162019 was as follows:Mr. Roy-$350,000, Mr. Sacks-$385,500, Mr. Ricchiuto-$440,000, andMr. Toy-$550,000.
The employment agreement provides each of these NEOs is entitled to continuation of certain salary and benefits upon termination of employment depending upon the reason for termination as follows: Mr. Johnston—$440,000, Mr. Bodenhamer—$476,938, Mr. Hagerman—$467,369described below under “Payments and Mr. Toy—$525,000.
Our employment agreement with Mr. Baumann is terminable by us for cause. If his employment is terminated by reason of his death, we are obligated to pay his estate an amount equal to the base salary earned through the end of the calendar month in which death occurs, plus any earned and unpaid annual bonus, apro-rata portion of the target bonus for the year in which the death occurs, vacation pay and other benefits earned through the date of If Mr. Baumann’s employment is terminated by reason of disability, we are obligated to pay him or his legal representative an amount equal to his annual base salary Upon Mr. Baumann’s termination of employment for cause or by reason of the executive’s voluntary resignation not for good reason, we must pay him the If Mr. Baumann voluntarily resigns for “good reason” (as defined in his employment agreement) or upon our termination of his employment for any reason other than cause, we must If termination of employment is on or before December 31, 2023, we continue to pay the most recent base salary and target annual bonus, for a period of 24 months following termination, If termination of employment is after December 31, 2023, Mr. Baumann would receive his annual base salary through the date of termination the annual bonus for any calendar year ended prior to the termination and any other vested benefits to which he may be entitled including, but not limited to, unpaid vacation as well as the value of anyin-flight equity awards that will vest on the date of termination or later. SP+ CORPORATION 2020 PROXY STATEMENT 39Payments and Potential Payments upon Termination or Change in ControlPotential Payments to Mr. Baumanndeath. death including any vested benefits to which he may be entitled and the value of anyin-flight equity awards that will vest on the date of termination or later.for the duration of the employment period in effect on the date of termination for eighteen (18) months reduced by amounts received under any disability benefit program, plus any earned and unpaid annual bonus,pro-rata portion of the target bonus for the year the date of termination occurs, vacation pay and other benefits earned through the date of termination. termination, including any vested benefits to which he may be entitled and the value of anyin-flight equity awards that will vest on the date of the termination or later.sumannual base salary through the date of $50,000 over a 12-month period.termination, the annual bonus for any calendar year ended prior to termination, and any vested benefits to which he may be entitled.(i) pay him as follows:payments at the rate of his most recentpay any earned but unpaid annual base salary and annual target bonus, and (ii) provide him and/orand /or his family with certain other benefits.benefits including health insurance (medical and dental) for eighteen months and any vested benefits to which he may be entitled as well as the value on anyin-flight equity awards that will vest on the date of termination or later. We will also continue to pay the premiums on certain insurance policies owned by Mr. Baumann until the earlier of his death or his attainment of age 65.
| EXECUTIVE COMPENSATION | ||||
Mr. Baumann is subject tonon-competition andnon-solicitation agreements for 24 months following termination of his employment.
Post-Employment Payments.
The following table describes certain potential payments and benefits payable to Mr. Baumann, our President and Chief Executive Officer, if his employment terminated and a change of control occurred on December 31,| Compensation Component | Voluntary Resignation Not for Good Reason ($) | Voluntary Resignation for Good Reason ($) | Termination by Company Not for Cause ($) | Termination by Company for Cause ($) | Change in Control ($) | ||||||
| Compensation | |||||||||||
| Base salary | 50,000(1) | 1,400,000(2) | 1,400,000(2) | 50,000(1) | 1,400,000(2) | ||||||
| Target cash incentive | — | 800,000(2) | 800,000(2) | — | 800,000(2) | ||||||
| Performance Share Units-Accelerated | — | — | — | — | 1,140,300(3) | ||||||
| Benefits and Perquisites | |||||||||||
| Health Benefits | — | 26,078(4) | 26,078(4) | — | 26,078(4) | ||||||
| Insurance funding | — | 398,902(5) | 398,902(5) | — | 398,902(5) | ||||||
| Total | 50,000 | 2,624,980 | 2,624,980 | 50,000 | 3,765,280 | ||||||
Compensation Component | CEO Voluntary Resignation ($) | CEO Resignation for Good Reason ($) | Company Termination Without Cause ($) | Company Termination for Cause ($) | Change in Control ($) | |||||||||||||||
Compensation | ||||||||||||||||||||
Base salary | — | 1,600,000 | (1) | 1,600,000 | (1) | — | 1,600,000 | (1) | ||||||||||||
Target cash incentive | — | 1,600,000 | (1) | 1,600,000 | (1) | — | 1,600,000 | (1) | ||||||||||||
Restricted Stock Units | — | 507,802 | (2) | 507,802 | (2) | — | 507,802 | (2) | ||||||||||||
Performance Share Units (annual cycles) | — | 2,923,130 | (3) | 2,923,130 | (3) | — | 2,923,130 | (3) | ||||||||||||
Performance Share Units | — | 507,802 | (4) | 507,802 | (4) | — | 507,802 | (4) | ||||||||||||
Benefits and Perquisites | — | — | — | — | — | |||||||||||||||
Health Benefits | — | 31,992 | (5) | 31,992 | (5) | — | 31,992 | (5) | ||||||||||||
Insurance funding | — | 67,466 | (6) | 67,466 | (6) | — | 67,466 | (6) | ||||||||||||
Total | — | 7,238,192 | 7,238,192 | — | 7,238,192 | |||||||||||||||
| (1) |
Payable as salary continuation for 24 months, subject to compliance with covenants not to solicit or compete for 24 months. |
| (2) | The CEO will be entitled to all outstanding RSUs. For purposes of this schedule, the value of the RSUs is calculated by multiplying the closing price per share of common stock on December 31, 2019 ($42.43). |
| (3) | The CEO will be entitled to any and all outstanding equity (i.e. open cycles) provided that the vesting provisions including any performance requirements are met (PSUs). For purposes of this schedule, the value of the PSUs is calculated by multiplying the closing price per share of common stock on December 31, 2019 by the sum of the actual shares issued under 2017-2019 cycle (10,380) plus the target shares issuable under the 2018-2020 cycle and the target shares issuable under the 2019-2021 cycle. In the event of a change of control prior to the end of the performance cycle, the performance period ends as of the date of the change in control and the performance goal is measured through this date with appropriate adjustments to reflect the shortened performance period. |
| (4) | Represents the value of |
| (5) | |
Estimated cost of health insurance coverage continuation for 18 months computed at current premium. |
| (6) | |
Estimated cost of certain life insurance policy payments computed based on |
Each of our employment agreements with Messrs. Johnston, Bodenhamer, HagermanRoy, Sacks, Ricchiuto and Toy is terminable by us for cause. If their employment is terminated by reason of their death, we are obligated to pay their respective estates an amount equal to the base salary earned through the end of the calendar month in which death occurs, plus any earned and unpaid annual bonus, vacation pay and other benefits earned through the date of death. If the employment of Messrs. Johnston, Bodenhamer, HagermanRoy, Sacks, Ricchiuto, or Toy is terminated by reasonus because of the NEO’s disability, we are obligated to pay the named executive officerNEO or his legal representative an amount equal to his annual base salary for the duration of the employment period in effect on the date of termination, reduced by amounts received under any disability benefit program, plus any earned and unpaid annual bonus, vacation pay and other benefits earned through the date of termination. Upon termination of the employment of Messrs. Johnston, Bodenhamer, HagermanSacks, Ricchiuto or Toy for cause or by
SP+ CORPORATION 2020 PROXY STATEMENT |
40
| EXECUTIVE COMPENSATION | ||||
reason of the executive’s voluntary resignation not forwithout good reason, we must pay the executive the sum of $50,000 over a12-month period.
If Messrs. Johnston, Bodenhamer, HagermanSacks, Ricchiuto and Toy voluntarily resigns for “good reason” (as defined in the respective employment agreement) or upon our termination of their employment for any reason other than cause, we must (i) pay the executive, for a period of 24 months following termination, payments at the rate of the executive’s most recent annual base salary and annual target bonus, and (ii) provide the executive and/or his family with certain other benefits. Messrs. Johnston, Bodenhamer, HagermanSacks, Ricchiuto and Toy are subject tonon-competition andnon-solicitation agreements for 24 months following termination of their employment.
Post-Employment Payments.The following table describes certain potential payments and benefits payable to Mr. Johnston, an Executive Vice President andRoy, our current Chief Financial Officer, if his employment terminated and a change of control occurred on December 31, 2016,2019, the last day of the fiscal year.
| Compensation Component | Voluntary Resignation Not for Good Reason ($) | Voluntary Resignation for Good Reason ($) | Termination by Company Not for Cause ($) | Termination by Company for Cause ($) | Change in Control ($) | ||||||
| Compensation | |||||||||||
| Base salary | 50,000(1) | 880,000(2) | 880,000(2) | 50,000(1) | 880,000(2) | ||||||
| Target cash incentive | — | 400,000(2) | 400,000(2) | — | 400,000(2) | ||||||
| Restricted Stock Units-Accelerated | — | — | — | — | 211,632(3) | ||||||
| Performance Share Units-Accelerated | — | — | — | — | 555,456(4) | ||||||
| Benefits and Perquisites | |||||||||||
| Health Benefits | — | 26,078(5) | 26,078(5) | — | 26,078(5) | ||||||
| Total | 50,000 | 1,306,078 | 1,306,078 | 50,000 | 2,073,173 | ||||||
Compensation Component | NEO Voluntary Resignation ($) | NEO Resignation for Good Reason ($) | Company Termination Without Cause ($) | Company Termination for Cause ($) | Change in Control ($) | |||||||||||||||
Compensation | ||||||||||||||||||||
Base salary | 14,583 | (1) | 350,000 | (2) | 350,000 | (2) | 14,583 | (1) | 350,000 | (2) | ||||||||||
Target cash incentive | — | 150,000 | (2) | 150,000 | (2) | — | 150,000 | (2) | ||||||||||||
Restricted Stock Units | — | 143,626 | (3) | 143,626 | (3) | — | 430,877 | (4) | ||||||||||||
Performance Share Units | — | — | — | — | 247,324 | (5) | ||||||||||||||
Benefits and Perquisites | — | — | — | — | — | |||||||||||||||
Health Benefits | — | 21,328 | (6) | 21,328 | (6) | — | 21,328 | (6) | ||||||||||||
Total | 14,583 | 664,953 | 664,953 | 14,583 | 1,199,529 | |||||||||||||||
| (1) | Payable as salary continuation over 12 months, subject to compliance with covenants not to solicit or compete for 12 months. |
| (2) | Payable as salary continuation over 12 months, subject to compliance with covenants not to solicit or compete for 12 months. |
| (3) | Representsone-third of the value of RSUs granted on March 6, 2019 and made effective as of January 1, 2019, all of which vest on December 31, 2021. A pro rata portion of the RSUs is accelerated as a result of (i) the NEO’s death or disability; (ii) the NEO’s voluntary resignation for any reason at any time on or after attaining age 65; (iii) the NEO’s resignation for good reason; or (iv) termination by us without cause. This amount is based on the closing price per share of our common stock on December 31, 2019 ($42.43). |
| (4) | Represents the value of the RSUs granted on March 6, 2019 and made effective as of January 1, 2019, all of which vest on December 31, 2021. Vesting of 100% of these RSUs is accelerated upon the occurrence of a “change in control” under the LTIP and the Restricted Stock Unit Agreement. This amount is based on the closing price per share of our common stock on December 31, 2019 ($42.43). |
| (5) | All rights with respect to any unpaid PSUs terminate if the NEO’s employment terminates; provided, however, that 100% of these PSUs are accelerated and become payable as a result of (i) the NEO’s death or disability; or (ii) the NEO’s voluntary resignation after attaining age 65. In the event of a change in control prior to the end of a performance cycle, the performance period ends as of the date of the change in control, and the performance goals are measured through this |
SP+ CORPORATION 2020 PROXY STATEMENT |
41
| EXECUTIVE COMPENSATION | ||||
| date with appropriate adjustments to reflect the shortened performance period. The value is calculated by multiplying the closing price per share of our common stock on December 31, 2019 ($42.43) by the sum of the actual shares issued under the 2017-2019 PSU cycle plus the target shares issuable under the 2018-2020 cycle and the target shares issuable under the 2019-2021 PSU cycle. |
| (6) | Estimated cost of health insurance coverage continuation for 12 months computed at current premium. |
Post-Employment Payments.The following table describes certain potential payments and benefits payable to Mr. Sacks, our General Counsel, if his employment terminated and a change of control occurred on December 31, 2019, the last day of the fiscal year.
Compensation Component | NEO Voluntary Resignation ($) | NEO Resignation for Good Reason ($) | Company Termination Without Cause ($) | Company Termination for Cause ($) | Change in Control ($) | |||||||||||||||
Compensation | ||||||||||||||||||||
Base salary | 50,000 | (1) | 771,000 | (2) | 771,000 | (2) | 50,000 | (1) | 771,000 | (2) | ||||||||||
Target cash incentive | — | 300,000 | (2) | 300,000 | (2) | — | 300,000 | (2) | ||||||||||||
Restricted Stock Units | — | — | — | — | — | |||||||||||||||
Performance Share Units | — | — | — | — | 430,665 | (3) | ||||||||||||||
Benefits and Perquisites | — | — | — | — | — | |||||||||||||||
Health Benefits | — | — | — | — | — | |||||||||||||||
Total | 50,000 | 1,071,000 | 1,071,000 | 50,000 | 1,501,665 | |||||||||||||||
| (1) | Payable as salary continuation over 12 months, subject to compliance with covenants not to solicit or compete for 24 months. |
| (2) | Payable as salary continuation over 24 months, subject to compliance with covenants not to solicit or compete for 24 months. |
| (3) | All rights with respect to any unpaid PSUs terminate if the |
SP+ CORPORATION 2020 PROXY STATEMENT |
42
| EXECUTIVE COMPENSATION | ||||
Post-Employment Payments.
The following table describes certain potential payments and benefits payable to Mr.| Compensation Component | Voluntary Resignation Not for Good Reason ($) | Voluntary Resignation for Good Reason ($) | Termination by Company Not for Cause ($) | Termination by Company for Cause ($) | Change in Control ($) | ||||||
| Compensation | |||||||||||
| Base salary | 50,000(1) | 953,878(2) | 953,878(2) | 50,000(1) | 953,878(2) | ||||||
| Target cash incentive | — | 400,000(2) | 400,000(2) | — | 400,000(2) | ||||||
| Performance Share Units-Accelerated | — | — | — | — | 370,257(3) | ||||||
| Benefits and Perquisites | |||||||||||
| Health Benefits | — | 4,848(4) | 4,848(4) | — | 4,848(4) | ||||||
| Total | 50,000 | 1,358,726 | 1,358,726 | 50,000 | 1,728,983 | ||||||
Compensation Component | NEO Voluntary Resignation ($) | NEO Resignation for Good Reason ($) | Company Termination Without Cause ($) | Company Termination for Cause ($) | Change in Control ($) | |||||||||||||||
Compensation | ||||||||||||||||||||
Base salary | 50,000 | (1) | 880,000 | (2) | 880,000 | (2) | 50,000 | (1) | 880,000 | (2) | ||||||||||
Target cash incentive | — | 400,000 | (2) | 400,000 | (2) | — | 400,000 | (2) | ||||||||||||
Restricted Stock Units | — | 225,671 | (3) | 225,671 | (3) | — | 338,507 | (4) | ||||||||||||
Career Restricted Stock Units | — | 594,020 | (5) | 594,020 | (5) | — | 594,020 | (5) | ||||||||||||
Performance Share Units | — | — | — | — | 623,042 | (6) | ||||||||||||||
Benefits and Perquisites | — | — | — | — | — | |||||||||||||||
Health Benefits | — | 15,215 | (7) | 15,215 | (7) | — | 15,215 | (7) | ||||||||||||
Total | 50,000 | 2,114,906 | 2,114,906 | 50,000 | 2,850,784 | |||||||||||||||
| (1) |
| Compensation Component | Voluntary Resignation Not for Good Reason ($) | Voluntary Resignation for Good Reason ($) | Termination by Company Not for Cause ($) | Termination by Company for Cause ($) | Change in Control ($) | ||||||
| Compensation | |||||||||||
| Base salary | 50,000(1) | 934,740(2) | 934,740(2) | 50,000(1) | 934,740(2) | ||||||
| Target cash incentive | — | 300,000(2) | 300,000(2) | — | 300,000(2) | ||||||
| Restricted Stock Units-Accelerated | — | — | — | — | 1,182,300(3) | ||||||
| Performance Share Units-Accelerated | — | — | — | — | 370,257(4) | ||||||
| Benefits and Perquisites | |||||||||||
| Health Benefits | — | 17,572(5) | 17,572(5) | — | 17,572(5) | ||||||
| Total | 50,000 | 1,252,312 | 1,252,312 | 50,000 | 2,804,869 | ||||||
Payable as salary continuation over 12 months, subject to compliance with covenants not to solicit or compete for 24 months. |
| (2) | Payable as salary continuation over 24 months, subject to compliance with covenants not to solicit or compete for 24 months. |
| (3) | Representstwo-thirds of the value of RSUs granted on May 21, 2018 and made effective as of January 1, 2018, all of which vest on December 31, 2020. A pro rata portion of the RSUs is accelerated as a result of (i) the NEO’s death or disability; (ii) the NEO’s voluntary resignation for any reason at any time on or after attaining age 65; (iii) the NEO’s resignation for good reason; or (iv) termination by us without cause. Based on the closing price per share of our common stock on December |
| (4) | Represents the value of RSUs granted on May 21, 2018 and made effective as of January 1, 2018, all |
| (5) | Represents 100% of the final installment of the career restricted stock units granted on July 1, 2008, of whichone-third vested on July 1, 2018,one-third vested on July 1, 2019 and the final installment vesting on July 1, 2020. The remaining portion of the career RSUs is accelerated as a result of (i) termination by us without cause; (ii) the NEO’s resignation for good reason; or (iii) the NEO’s death or disability. In addition, 100% of these RSUs are accelerated upon the occurrence of a “change of control” under the LTIP and the Restricted Share Unit |
| (6) | All rights with respect to any unpaid PSUs terminate if the NEO’s employment terminates; provided, however, that 100% of these PSUs are accelerated and become payable as a result of (i) the NEO’s death or disability; or (ii) the NEO’s voluntary resignation after attaining age 65. In the event of a change in control prior to the end of a performance cycle, the performance period ends as of the date of the change in control, and the performance goals are measured through this date with appropriate adjustments to reflect the shortened performance period. The value is calculated by multiplying the closing price per share of our common stock on December |
| (7) | |
Estimated cost of health insurance coverage continuation through December 31, |
SP+ CORPORATION 2020 PROXY STATEMENT |
43
| EXECUTIVE COMPENSATION | ||||
Post-Employment Payments.
The following table describes certain potential payments and benefits payable to Mr. Toy, President of Commercial| Compensation Component | Voluntary Resignation Not for Good Reason ($) | Voluntary Resignation for Good Reason ($) | Termination by Company Not for Cause ($) | Termination by Company for Cause ($) | Change in Control ($) | ||||||||||
| Compensation | |||||||||||||||
| Base salary | 50,000(1) | 1,050,000(2) | 1,050,000(2) | 50,000(1) | 1,050,000(2) | ||||||||||
| Target cash incentive | — | 400,000(2) | 400,000(2) | — | 400,000(2) | ||||||||||
| Restricted Stock Units-Accelerated | — | — | — | — | 464,334(3) | ||||||||||
| Performance Share Units-Accelerated | — | — | — | — | 399,589(4) | ||||||||||
| Benefits and Perquisites | |||||||||||||||
| Health Benefits | — | 12,722(5) | 12,722(5) | — | 12,722(5) | ||||||||||
| Total | 50,000 | 1,462,722 | 1,462,722 | 50,000 | 2,291,841 | ||||||||||
Compensation Component | NEO Voluntary Resignation ($) | NEO Resignation for Good Reason ($) | Company Termination Without Cause ($) | Company Termination for Cause ($) | Change in Control ($) | |||||||||||||||
Compensation | ||||||||||||||||||||
Base salary | 50,000 | (1) | 1,100,000 | (2) | 1,100,000 | (2) | 50,000 | (1) | 1,100,000 | (2) | ||||||||||
Target cash incentive | — | 500,000 | (2) | 500,000 | (2) | — | 500,000 | (2) | ||||||||||||
Restricted Stock Units | — | 225,671 | (3) | 225,671 | (3) | — | 338,506 | (4) | ||||||||||||
Performance Share Units | — | — | — | — | 934,521 | (5) | ||||||||||||||
Benefits and Perquisites | — | — | — | — | — | |||||||||||||||
Health Benefits | — | 15,215 | (6) | 15,215 | (6) | — | 15,215 | (6) | ||||||||||||
Total | 50,000 | 1,840,886 | 1,840,886 | 50,000 | 2,888,243 | |||||||||||||||
| (1) | Payable as salary continuation over 12 months, subject to compliance with covenants not to solicit or compete for 24 months. |
| (2) | Payable as salary continuation over 24 months, subject to compliance with covenants not to solicit or compete for 24 months. |
| (3) | Representstwo-thirds of the value of RSUs granted on May 21, 2018 and made effective as of January 1, 2018, all of which vest on December 31, 2020. A pro rata portion of the RSUs is accelerated as a result of (i) the NEO’s death or disability; (ii) the NEO’s voluntary resignation for any reason at any time on or after attaining age 65; (iii) the NEO’s resignation for good reason; or (iv) termination by us without cause. Based on the closing price per share of our common stock on December |
| (4) | Represents the value of RSUs granted on May 21, 2018 and made effective as of January 1, 2018, all |
| (5) | All rights with respect to any unpaid PSUs terminate if the NEO’s employment terminates; provided, however, that 100% of these PSUs are accelerated and become payable as a result of (i) the NEO’s death or disability; or (ii) the NEO’s voluntary resignation after attaining age 65. In the event of a change in control prior to the end of a performance cycle, the performance period ends as of the date of the change in control, and the performance goals are measured through this date with appropriate adjustments to reflect the shortened performance period. The value is calculated by multiplying the closing price per share of our common stock on December |
| (6) | |
Estimated cost of health insurance coverage continuation through December 31, |
SP+ CORPORATION 2020 PROXY STATEMENT |
44
NON-EMPLOYEE DIRECTOR COMPENSATION
The following table sets forth the compensation earned for services rendered to us for the fiscal year ending December 31, 20162019 by ournon-executive directors.
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Option Awards ($)(1)(2) | All Other Compensation ($) | Total ($) | |||||
| Karen M. Garrison | 117,500 | 85,000 | — | — | 202,500 | |||||
| Paul Halpern(3) | 70,000 | 85,000 | — | — | 155,000 | |||||
| Robert S. Roath | 112,500 | 85,000 | — | — | 197,500 | |||||
| Wyman T. Roberts | 67,500 | 85,000 | — | — | 152,500 | |||||
| Douglas R. Waggoner | 71,944 | 85,000 | — | — | 156,944 | |||||
| Jonathan P. Ward | 67,500 | 85,000 | — | — | 152,500 | |||||
| James A. Wilhelm | 95,000 | — | 125,000 | — | 220,000 | |||||
| Gordon H. Woodward | 65,000 | 85,000 | — | — | 150,000 | |||||
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) (1) | Option Awards ($) | All Other Compensation ($) | Total ($) | |||||||||||||||
Karen M. Garrison | 113,517 | 124,986 | — | — | 238,503 | |||||||||||||||
Alice M. Peterson | 90,000 | 84,986 | — | — | 174,986 | |||||||||||||||
Gregory A. Reid | 77,500 | 84,986 | — | — | 162,486 | |||||||||||||||
Wyman T. Roberts | 82,500 | 84,986 | — | — | 167,486 | |||||||||||||||
Douglas R. Waggoner | 78,983 | 84,986 | — | — | 163,969 | |||||||||||||||
| (1) | Represents the aggregate grant date fair value computed in accordance with accounting rules. |
|
2019 directors’ fees paid in cash as stated below are paid only to directors who are not employees of our company.
Fee Category | Annual Rate($) | |||
Annual Cash Retainer (exclusive of Chairman) | 60,000 | |||
Chairman of the Board Service | 95,000 | |||
Audit Committee Membership (exclusive of Chair) | 10,000 | |||
Audit Committee Chair | 30,000 | |||
Compensation Committee Membership (exclusive of Chair) | 7,500 | |||
Compensation Committee Chair | 17,500 | |||
Nominating and Corporate Governance Committee Membership (exclusive of Chair) | 5,000 | |||
Nominating and Corporate Governance Committee Chair | 15,000 | |||
Messrs. On March 6, 2019, our Board adopted new stock ownership requirements for ournon-employee directors. Ournon-employee directors are Our Board recognizes that related person transactions present a heightened risk of conflicts of interest and/or improper valuation (or the perception thereof) and has determined that the Audit Committee is best suited to review and approve related person transactions. Our Audit Committee’s charter requires it to review, on an ongoing basis, related party transactions required to be disclosed in our public filings for potential conflict of interest situations and requires all such transactions to be approved by the SP+ CORPORATION 2020 PROXY STATEMENT 45Non-Employee Director Stock GrantsHalpern, Roath,Reid, Roberts Waggoner, Ward, and WoodwardWaggoner and Ms. GarrisonPeterson each received a fully vested stock grant of 3,7992,573 shares of common stock on April 21, 2016May 8, 2019 for their service as directors. Mr. WilhelmMs. Garrison received a grant of 5,5873,784 shares of phantomcommon stock on April 21, 2016May 8, 2019 for hisher service as a director and Chairman of the Board.Non-Employee Director Stock Ownership Requirementssubjectnow required to ahold common stock ownership guideline requirement equal to three times their annual cash retainer. Information regardingretainer, which was $60,000 in 2019. Assuming that these ownership requirements were in place retroactively during 2019,non-employee directors would be required to hold shares held as a multiple of the annual cash retainer for existing directors who are nominated for reelection is set forth in the table below:Non-EmployeeDirector(1)Required 3x Stock Ownership(#)(2)Shares Held as a Multiple of Annual Cash RetainerK. Garrison4,70032.0xR. Roath7,90039.5xW. Roberts(3)8,1002.8xD. Waggoner(3)8,1002.8x(1)Directors designated by the Central Representative are exempt from the stock ownership guideline requirement.(2)The number of shares of stock required to be held by non-employee directors is determined on the date that the director is first elected to the board, or in the case of Ms. Garrison and Mr. Roath, the date the stock ownership guidelines were adopted (March 3, 2011). The ownership guideline requirement equals three times the director’s annual cash retainer divided by the closing stock price, rounded to the nearest 100 shares. Once established, a director’s guideline requirement is not adjusted for changes to the annual retainer or fluctuations in our common stock price.(3)Became a member of our Board in April 2015. Directors have three years from the date of their first election as director to satisfy the stock ownership requirement.EQUITY COMPENSATION PLAN INFORMATIONThis table provides information about our common stock subjectvalued at $180,000 based on the average daily share price over the last 30 business days of our fiscal year, which was approximately $43.40. Accordingly,non-employee directors would have been expected to equity compensation planshold 4,148 shares of common stock as of December 31, 2016:Equity Compensation Plan Information TablePlan Category Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (a) Weighted-AverageExercise Price ofOutstanding Options,Warrants and Rights(b)Number of SecuritiesRemaining Available forFuture Issuance UnderEquity Compensation Plans(Excluding SecuritiesReflected in Column (a))(c)Equity compensation plans approved by securities holders 666,718 __ 285,521 Equity compensation plans not approved by securities holders ____ __ Total 666,718 __ 285,521 If any2019. Allnon-employee directors have achieved compliance with these stock award expires or otherwise terminates, in whole or in part, without having been exercised in full (or vested in the case of restricted stock), the stock not acquired under such stock award reverts to and again becomes available for issuance under the Plan. If any common stock acquired pursuant to the exercise of an option for any reason is repurchased by us under an unvested share repurchase option provided under the Plan, the stock repurchased by us under such repurchase option will revert to and again become available for issuance under the Plan. The foregoing notwithstanding, common stock that is withheld from an award to pay the exercise price with respect to such award or to pay a participant’s tax obligations with respect to an award shall not again be available for issuance under the Plan.TRANSACTIONS WITH RELATED PERSONS AND CONTROL PERSONSGeneralTRANSACTIONS WITH RELATED PERSONS AND CONTROL PERSONScommittee or another independent body of the Board. The related party transaction described below has been reviewed and approved by the Audit Committee or another independent body of the Board.Settlement with Former Central StockholdersOn December 15, 2016, we settled disputes involving our acquisition on October 2, 2012 of 100% of the outstanding common shares of KCPC Holdings, Inc., which was the ultimate parent of Central Parking Corporation (collectively, “Central”) with, among other parties, each of Kohlberg CPC Rep, L.L.C., KOCO Investors V, L.P., Kohlberg Offshore Investors V, L.P., Kohlberg Investors V, L.P., Kohlberg Partners V, L.P., and Kohlberg TE Investors V, L.P. (collectively, the “Kohlberg Entities”); and each of Versa Capital Fund I, L.P. and Versa Capital Fund I Parallel, L.P. (collectively, the “Versa Entities”); and each of Lubert-Adler Real Estate Fund V, L.P. and Lubert-Adler Real Estate Parallel Fund V, L.P. (collectively, “Lubert-Adler Entities”). As of March 1, 2017, the Kohlberg Entities collectively own approximately 16.1% of our common stock, the Versa Entities collectively own approximately 6.0% of our common stock, and the Lubert-Adler Entities collectively own approximately 2.1% of our common stock. In addition, Paul Halpern, who resigned as a director on December 14, 2016, is affiliated with the Versa Entities; and director Seth H. Hollander and director nominees Jonathan P. Ward and Gordon H. Woodward are affiliated with the Kohlberg Entities. See “Board Matters—Nominations for Director-Board Designees.”The Agreement and Plan of Merger related to the Central Merger (“Merger Agreement”) provided that Central’s former stockholders were entitled to receive cash consideration in the amount equal to $27.0 million three years after closing, subject to indemnification obligations of Central’s former stockholders and other adjustments.Post-closing claims and disputes arose between the parties, including as to indemnification matters. Our company and Central’s former stockholders agreed upon non-binding terms to settle all outstanding matters on September 27, 2016. Pursuant to the settlement, we paid Central’s former stockholders $2.5 million in the aggregate (which effectively reduced the $27.0 million that would have been payable by us to Central’s former stockholders under the Merger Agreement by $24.5 million) to settle all outstanding matters between the parties related to the Central Merger. Pursuant to the settlement, the parties fully released one another for claims relating to the Central Merger, and therefore we have no further obligation to pay any additional cash consideration to Central’s former stockholders.
The following table sets forth information regarding the beneficial ownership of our common stock as of March 1, 2017,the Record Date, by:
each person known by us to beneficially own more than 5% of the outstanding shares of our common stock;
each of the executive officers named in the “Summary Compensation Table” above;
each of our directors and nominees for director; and
all of our current directors and executive officers as a group.
Beneficial ownership is determined in accordance with SEC rules. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of common stock subject to options held by that person that are currently exercisable or exercisable within 60 days of March 1, 2017,the Record Date, are deemed issued and outstanding. These shares, however, are not deemed outstanding for purposes of computing percentage ownership of any other stockholder.
Except as indicated in the footnotes to this table and subject to applicable community property laws, each stockholder named in the table has sole voting and investment power with respect to the shares shown as beneficially owned by them. This table also includes shares owned by a spouse as community property.
Percentage beneficially owned is based on 22,471,04122,997,061 shares of common stock outstanding on March 1, 2017,the Record Date, and is calculated in accordance with SEC rules. Unless otherwise indicated, the address of each of the individuals named below is:
| Beneficial Ownership | ||||||
| Name | Current Shares Beneficially Owned(1) | Rights to Acquire Beneficial Ownership of Shares within 60 days(2) | Percent of Shares Beneficially Owned (%) | |||
| G Marc Baumann | 36,679(3) | — | * | |||
| Vance C. Johnston | 4,888(4) | — | * | |||
| William H. Bodenhamer, Jr.(5) | — | — | * | |||
| Thomas L. Hagerman | 9,170(6) | — | * | |||
| Robert M. Toy | 3,473(7) | — | * | |||
| Karen M. Garrison | 50,186 | — | * | |||
| Seth H. Hollander | —(8) | — | * | |||
| Gregory A. Reid | — | — | * | |||
| Robert S. Roath | 103,933 | —(9) | * | |||
| Wyman T. Roberts | 7,619 | — | * | |||
| Douglas R. Waggoner | 7,619 | — | * | |||
| Jonathan P. Ward | 12,780(10) | — | * | |||
| James A. Wilhelm | 9,848 | —(11) | * | |||
| Gordon H. Woodward | 12,780(12) | — | * | |||
| All current directors and executive officers as a group (16 persons) | 304,700(13) | — | 1.4 | |||
Name and Address of Beneficial Owner (1) | Current Shares Beneficially | Percent of Shares Beneficially Owned (%) | ||||||
5% or Greater Beneficial Owners | ||||||||
BlackRock, Inc. | 1,811,163 | (3) | 7.88 | % | ||||
P2 Capital Partners, LLC | 1,464,881 | (4) | 6.37 | % | ||||
Wellington Management Group LLP | 1,265,612 | (5) | 5.50 | % | ||||
Dimensional Fund Advisors LP | 1,183,270 | (6) | 5.15 | % | ||||
Named Executive Officers & Directors | ||||||||
Alice M. Peterson | 4,901 | * | ||||||
Douglas R. Waggoner | 15,523 | * | ||||||
G Marc Baumann | 49,863 | (7) | * | |||||
Gregory A. Reid | 7,904 | * | ||||||
John Ricchiuto | 21,509 | (8) | * | |||||
Karen M. Garrison | 61,810 | (9) | * | |||||
Kristopher H. Roy | 1,628 | (10) | * | |||||
Robert M. Toy | 19,966 | (11) | * | |||||
Robert N. Sacks | 29,206 | (12) | * | |||||
Vance C. Johnston | 15,682 | * | ||||||
Wyman T. Roberts | 15,523 | * | ||||||
All current directors and executive officers as a group (10 persons) | 198,627 | (13) | ||||||
| * | Less than |
| (1) | Except as otherwise indicated, the address for each beneficial owner listed in the table above is c/o SP Plus Corporation, 200 E. Randolph Street, Suite 7700, Chicago Illinois 60601-7702. |
SP+ CORPORATION 2020 PROXY STATEMENT |
46
| SECURITY OWNERSHIP | ||||
| (2) | Except as otherwise noted and for shares held by a spouse and other members of the person’s immediate family who share a household with the named person, the named persons have sole voting and investment power over the indicated number of shares. Shares represented by restricted stock units cannot be voted at the Annual Meeting. |
| (3) | The address for BlackRock, Inc. is BlackRock, Inc., 55 East 52nd Street, New York, NY 10055. The information with respect to BlackRock, Inc. is based solely on information obtained from a Schedule 13G/A filed by BlackRock, Inc. with the SEC on or about February 6, 2020. The foregoing has been included solely in reliance upon, and without independent investigation of, the disclosures contained in BlackRock, Inc.’s Schedule 13G/A. |
| (4) | The address of P2 Capital Partners, LLC is 590 Madison Avenue, 25th Floor, New York, NY 10022. The information with respect to P2 Capital Partners, LLC is based solely on information obtained from a Schedule 13D/A filed by P2 Capital Partners, LLC with the SEC on or about February 11, 2020, which filing disclosed that P2 Capital Master Fund I, L.P. beneficially owns an aggregate of 667,459 shares and P2 Capital Master Fund VI, L.P. beneficially owns an aggregate of 797,422 shares. The foregoing has been included solely in reliance upon, and without independent investigation of, the disclosures contained in P2 Capital Partners, LLC’s Schedule 13D/A. |
| (5) | The address of Wellington Management Group LLP is 280 Congress Street, Boston, MA 02210. The information with respect to Wellington Management Group LLP is based solely on information obtained from a Schedule 13G/A filed by Wellington Management Group LLP with the SEC on or about January 8, 2020. The foregoing has been included solely in reliance upon, and without independent investigation of, the disclosures contained in Wellington Management Group LLP’s Schedule 13G/A. |
| (6) | The address for Dimensional Fund Advisors LP is Building One, 6300 Bee Cave Road, Austin TX 78746. The information with respect to Dimensional Fund Advisors LP is based solely on information obtained from a Schedule 13G/A filed by Dimensional Fund Advisors LP with the SEC on or about February 12, 2020. The foregoing has been included solely in reliance upon, and without independent investigation of, the disclosures contained in Dimensional Fund Advisors LP’s Schedule 13G/A. |
| (7) | Held jointly with Mr. Baumann’s |
| spouse. Does not include |
| (8) | Held jointly with Mr. Ricchiuto’s spouse. Does not include |
| (9) | Held jointly with Ms. Garrison’s spouse. |
| (10) | Does not include |
| (11) | |
Does not include |
| (12) | Held jointly with Mr. |
| (13) | |
Does not include |
We are unaware of any arrangements, including any pledge by any person of our securities, the operation of which may at a subsequent date result in a change of control of our company.
| Name of Beneficial Owner | Number of Shares Beneficially Owned | Percent Beneficially Owned (%)* | ||
| 2929 CPC Holdco, LLC | 1,341,251(1) | 6.0 | ||
| 2929 Arch Street, Suite 1650 | ||||
| Philadelphia, PA 19104 | ||||
| Kohlberg CPC Rep, L.L.C. | 3,613,167(2) | 16.1 | ||
| 111 Radio Circle | ||||
| Mount Kisco, NY 10549 | ||||
| T. Rowe Price Associates, Inc. | 1,306,790(3) | 5.8 | ||
| 100 E. Pratt Street | ||||
| Baltimore, MD 21202 | ||||
| Wellington Management Group LLP | 2,818,020(4) | 12.5 | ||
| 280 Congress Street | ||||
| Boston, MA 02210 | ||||
SP+ CORPORATION 2020 PROXY STATEMENT |
47
ADVISORY VOTE ON THE 2019 COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
As noted in the preceding extensive and comprehensive discussion, executive compensation is an important matter both to us and, we believe, to our stockholders. At our 20162019 annual meeting of stockholders, the affirmative vote of the holders of approximately 96.7%91.3% of the shares represented in person or by proxy and entitled to vote representedapproved, in person or by proxy and entitled to vote approved, by anon-binding advisory vote, the 20152018 executive compensation of our named executive officers.NEOs. In 20172020, we are again seeking input from stockholders with this advisory vote on the 20162019 compensation of our named executive officersNEOs as disclosed in the Compensation Discussion and Analysis section and the accompanying compensation tables contained in this Proxy Statement in accordance with the executive compensation disclosure rules of the SEC.
The Compensation Committee has overseen the development and implementation of our executive compensation programs. We have designed our compensation programs to directly link a significant portion of the compensation of our named executive officersNEOs to defined performance standards that promote balance between the drive for near-term growth and long-term increase in stockholder value. The Compensation Committee also designed our compensation programs to attract, retain and motivate key executives who are essential to the implementation of our strategic growth and development strategy.
The Compensation Committee bases its executive compensation decisions on our core compensation principles, including the following:
incentivizing our executives to perform with stockholders’ interests in mind;
assembling and maintaining a senior leadership team with the skills necessary to successfully execute our business strategy, maintain our competitiveness, and continue increasing the long-term market value of our company; and
balancing awards earned for short-term results with awards earned for strategic decisions that we expect to sustain our long-term performance.
We believe that our existing compensation programs have been effective at motivating our key executives, including our named executive officers,NEOs, to achieve superior performance and results for our company, effectively aligning compensation with performance results, giving our executives an ownership interest in our company so their interests are aligned with our stockholders, and enabling us to attract and retain talented executives whose services are in key demand in our industry and market sectors. Our 20162019 compensation programs were built on the same general and conservative principles that we have historically followed.
With our core compensation principles in mind, the Compensation Committee took compensation actions in 20162019 including the following:
continuing the Performance Share Program under which future equity awards will be earned by achieving established three-year free cash flow targets, making thisthe program the primary vehicle for new equity awards for existing executive officers; and
placing more emphasis on variable pay (annual incentive) with respect to growth in executive compensation opportunity.
Compensation actions like those described above evidence our philosophy of aligning executive compensation with our performance and increasing long-term stockholder value. We will continue to design and implement our executive compensation programs and policies in line with this philosophy to promote superior performance results and generate greater value for our stockholders.
Although this advisory vote on the compensation of our named executive officersNEOs is not binding on us, as provided by law, our Board orand the Compensation Committee will review and consider the outcome of this advisory vote and, consistent with our record of stockholder engagement, will take it into account when making future compensation decisions for our named executive officers.
SP+ CORPORATION 2020 PROXY STATEMENT |
48
| PROPOSAL NO. 2 |
Thisnon-binding advisory basis, the frequency of the advisory vote on the compensation of our NEOs allows our stockholders to express their opinions about our executive compensation programs. The vote on this resolution is not intended to address any specific element of compensation; rather, the vote is intended to provide our stockholders with the opportunity to approve, on an aggregate basis and in light of our corporate performance, the compensation program for our NEOs as described in this Proxy Statement. Stockholders are asked to approve the following resolution at the Annual Meeting:
“RESOLVED, that the stockholders of the Company approve, on anon-binding advisory basis, the compensation of the Company’s named executive officers listed in the 2019 Summary Compensation Table included in the proxy statement for the 2020 Annual Meeting, as such compensation is disclosed in accordance withpursuant to the executive compensation disclosure rules of the SEC. Stockholders may choose to approve holding an advisory vote onSecurities and Exchange Commission, including the section titled “Compensation Discussion and Analysis,” as well as the compensation of our named executive officers annually, biennially or triennially. Accordingly, we are asking stockholders whether the advisory vote should occur every year, once every two years or once every three years.
| | OURBOARDRECOMMENDSAVOTE“FOR” PROPOSAL NO. 2, THE ADVISORY (NON-BINDING) VOTE APPROVING 2019 NAMED EXECUTIVE OFFICER COMPENSATION. | |||
SP+ CORPORATION 2020 PROXY STATEMENT |
49
RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Proposal 3 is the Board approved the Audit Committee’s recommendation to appoint Ernst & Young LLP as the independent registered public accounting firm to audit our consolidated financial statements for the fiscal year ending December 31, 2017. At the Annual Meeting, our stockholders will be asked to ratifyratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2017.2020. You may cast your vote in favor of or against this proposal, or you may elect to abstain from voting your shares.
We expect that one or more representatives of Ernst & Young LLP will be present at the Annual Meeting. EachMeeting, each of these representativeswhom will have the opportunity to make a statement, if he or she desires, and is expected to be available to respond to any appropriate questions.
| | OUR BOARD RECOMMENDS THAT YOU VOTE | |||
SP+ CORPORATION 2020 PROXY STATEMENT |
50
The Audit Committee of our Board is primarily responsible for the oversight of the quality and integrity of our accounting and reporting practices and controls, and our financial statements and reports; compliance with legal and regulatory requirements; the assessment of our independent registered public accounting firm’s qualifications and independence; and the performance of our internal audit function and independent registered public accounting firm. A completedetailed description of the Audit Committee’s functionfunctions is included above, and a complete description may be found in itsthe Audit Committee’s charter, which may be accessed through the Corporate Governance section of our website, accessible through our Investor Relations page atwww.spplus.com.
The Audit Committee recommended that Ernst & Young LLP bere-appointed as our independent public accounting firm to serve for the 2020 fiscal year, and that the Board submit this appointment to our stockholders for approval.
www.spplus.com.
The Audit Committee, with the approval of the stockholders, engaged Ernst & Young LLP to perform an annual audit of our financial statements for the fiscal year ended December 31, 2016.2019. The following table presents fees for professional services rendered by Ernst & Young LLP for the audit of our annual consolidated financial statements for the years ended December 31, 20162019 and December 31, 2015,2018, the review of our interim consolidated financial statements for each quarter in the fiscal year 2016years 2019 and 20152018 and for tax and all other services rendered by Ernst & Young LLP during thesethose periods.
| Type of Fee | 2,016 | 2015 | |||||
| Audit Fees(1)(4) | $ | 1,495,000 | $ | 1,415,000 | |||
| Audit-Related Fees | — | — | |||||
| Tax Fees(2) | — | — | |||||
| All Other Fees(3) | 2,000 | 2,000 | |||||
| Total | $ | 1,497,000 | $ | 1,404,000 | |||
Type of Fee | 2019 | 2018 | ||||||
Audit Fees (1) | $ | 2,131,000 | $ | 2,114,000 | ||||
Audit-Related Fees (2) | 78,000 | 817,000 | ||||||
Tax Fees (3) | — | — | ||||||
All Other Fees (4) | 7,000 | 6,000 | ||||||
|
|
|
| |||||
Total | $ | 2,216,000 | $ | 2,937,000 | ||||
|
|
|
| |||||
| (1) | Audit Fees include fees associated with the annual audit, including the audit of internal control, the reviews of our quarterly reports on Form10-Q |
| (2) | Audit-Related Fees include fees associated with due diligence in connection with completed and contemplated acquisitions and the issuance of a Service Organization Controls (“SOC”) report recognized under Statement on Standards for Attestation Engagements (“SSAE”) 18(“SOC-1” Report”). |
| (3) | Tax Fees include fees associated with tax compliance including preparation, review and filing of tax returns and assistance with tax audits and appeals. |
| (4) | |
All Other Fees include fees associated with products and |
Pursuant to ourpre-approval policy and procedures, the Audit Committee was responsible for reviewing and approving, in advance, all audit services and permissiblenon-audit services or relationships between our company and our independent registered public accounting firm.Ernst & Young LLP. The Audit Committee has responsibilityis responsible for appointing, setting compensation for and overseeing the work of our independent registered public accounting firm, and has established a policy concerning thepre-approval of services performed by our independent registered public accounting firm. Each proposed engagement not
SP+ CORPORATION 2020 PROXY STATEMENT |
51
The following is the report of the Audit Committee with respect to our audited financial statements for the year ended December 31, 2016.2019. The information contained in this report shall not be deemed “soliciting material” or otherwise considered “filed” with the SEC, and such information shall not be incorporated by reference into any future filing under the Securities Act or the Exchange Act except to the extent that we specifically incorporate such information by reference in such filing.
In connection with the financial statements for the fiscal year ended December 31, 2016,2019, our Audit Committee has been focused on several topics, including:
| (i) | oversaw our Section 404 internal controls project, including a review and assessment of the scope, principles, plans, risk areas and budget for the project and direct discussions with our independent registered public accounting firm and our internal audit department; |
| (ii) | reviewed and assessing our internal audit, controllership and finance functions; |
| (iii) | reviewed our risk management efforts, including our insurance and our compliance and cyber-security programs; |
| (iv) | discussed with Ernst & Young LLP and management accounting topics, proposed rules of the Public Company Accounting Oversight Board, and a review of our critical accounting policies; |
| (v) | monitored the processes by which our Chief Executive Officer, Chief Financial Officer and Corporate Controller certify the information contained in our quarterly and annual filings with the SEC; |
| (vi) | reviewed and approved our policy regarding the retention of an independent registered public accounting firm and considered and approved such retentions as appropriate; |
| (vii) | reviewed our approach toward establishing reserves; |
| (viii) | reviewed and discussed with management each of our quarterly financial statements and our audited financial statements for 2019; |
| (ix) | discussed with Ernst & Young LLP of the matters required to be discussed by the Statement on Auditing Standards No. 1301, issued by the PCAOB; and |
| (ix) | received and reviewed the written disclosures and the letter from Ernst & Young LLP regarding Ernst & Young LLP’s independence, as required by the PCAOB, and discussed with Ernst & Young LLP its independence from our company. |
As part of its oversight role and in reliance upon its reviews and discussions as outlined above, the Audit Committee recommended, and the Board approved the inclusion of our audited financial statements in our Annual Report onForm 10-K for the fiscal year ended December 31, 20162019 for filing with the SEC and presentation to our stockholders. The Audit Committee also recommended that Ernst & Young LLP be re-appointed as our independent public accounting firm to serve for the 2017 fiscal year, and that the Board submit this appointment to our stockholders for approval at the Annual Meeting.
THE AUDIT COMMITTEE
Alice M. Peterson (Chair)
Gregory A. Reid
Douglas R. Waggoner
SP+ CORPORATION 2020 PROXY STATEMENT |
52
DELINQUENT SECTION 16(a) REPORTS
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our directors, executive officers and persons who beneficially own more than 10% of our equity securities to file with the SEC initial reports of beneficial ownership of the common stock and reports of changes in their beneficial ownership and to furnish us with copies of those reports.
To our knowledge, based solely upon a review of copies of reports furnished to us or written representations from certain reporting persons, we believe that during 2016,2019, all Section 16(a) filing requirements applicable to our executive officers, directors and 10% stockholders were met in a timely manner, except in the following instances:
SP+ CORPORATION 2020 PROXY STATEMENT |
53
To the extent that this Proxy Statement is incorporated by reference into any other filing under the Exchange Act or any filing under the Securities Act or the Exchange Act,of 1933, the sections of this Proxy Statement entitled “Report of the Audit Committee” (to the extent permitted by the rules of the SEC) and “Report of the Compensation Committee” will not be deemed incorporated, unless specifically provided otherwise in that other filing.
THE BOARD OF DIRECTORS
SP PLUS CORPORATION
Chicago, March 20, 2020
SP+ CORPORATION 2020 PROXY STATEMENT |
54
SP PLUS CORPORATION RECONCILIATIONS
RECONCILIATION OF NET INCOME ATTRIBUTED TO SP PLUS TO ADJUSTED NET INCOME
ATTRIBUTABLE TO SP PLUS AND ADJUSTED NET INCOME PER SHARE
(millions, except for share and per share data, unaudited)
Year Ended December 31, | ||||||||
| 2019 | 2018 | |||||||
Net income attributable to SP Plus, as reported | $ | 48.8 | $ | 53.2 | ||||
Add: Restructuring, merger and integration costs | 1.3 | 8.0 | ||||||
Add (subtract): Gross profit related to asset sales or dispositions, including earnings from an equity method investee transaction | — | 0.1 | ||||||
Subtract: Equity in earnings from investment in unconsolidated entity | — | (10.1 | ) | |||||
Add: Amortization of acquired intangibles | 15.1 | 6.1 | ||||||
Net tax effect of adjustments | (4.4 | ) | (1.1 | ) | ||||
Add (subtract):Non-routine income tax | (0.3 | ) | 1.3 | |||||
Other, rounding | — | 0.1 | ||||||
|
|
|
| |||||
Adjusted net income attributable to SP Plus | $ | 60.5 | $ | 57.6 | ||||
Net income per share, as reported | ||||||||
Basic | $ | 2.21 | $ | 2.38 | ||||
Diluted | $ | 2.20 | $ | 2.35 | ||||
Adjusted net income per share | ||||||||
Basic | $ | 2.74 | $ | 2.57 | ||||
Diluted | $ | 2.73 | $ | 2.55 | ||||
Weighted average shares outstanding | ||||||||
Basic | 22,080,025 | 22,394,542 | ||||||
Diluted | 22,208,032 | 22,607,223 | ||||||
SP+ CORPORATION 2020 PROXY STATEMENT |
A-1
| Year Ended December 31, | |||||||
| 2016 | 2015 | ||||||
| Net income attributable to SP Plus, as reported | $ | 23.1 | $ | 17.4 | |||
| Add: Non-routine structural and other repairs | 1.1 | 4.6 | |||||
| Add: Restructuring, merger and integration costs and non-routine settlements | 9.3 | 9.2 | |||||
| Add (subtract): Pre-tax income related to asset sales or dispositions | (0.2 | ) | (1.0 | ) | |||
| Add: Equity in losses (income) from investment in unconsolidated entity | 0.9 | 1.7 | |||||
| Add: Costs incurred related to Parkmobile and other contemplated transactions | — | 0.1 | |||||
| Add: Write off of debt issuance costs and original discount on borrowings | — | 0.6 | |||||
| Net tax effect of adjustments | (4.5 | ) | (6.3 | ) | |||
| Add (subtract): Non-routine income tax | 0.1 | (4.6 | ) | ||||
| Other, rounding | — | 0.1 | |||||
| Adjusted net income attributable to SP Plus | $ | 29.8 | $ | 21.8 | |||
| Net income per share, as reported | |||||||
| Basic | $ | 1.04 | $ | 0.78 | |||
| Diluted | $ | 1.03 | $ | 0.77 | |||
| Adjusted net income per share | |||||||
| Basic | $ | 1.34 | $ | 0.98 | |||
| Diluted | $ | 1.32 | $ | 0.97 | |||
| Weighted average shares outstanding | |||||||
| Basic | 22,238,021 | 22,189,140 | |||||
| Diluted | 22,528,122 | 22,511,759 | |||||
| APPENDIX A | ||||
SP PLUS CORPORATION
RECONCILIATION OF NET INCOME ATTRIBUTABLE TO SP PLUS TO EBITDA, ADJUSTED EBITDA
(millions, unaudited)
Year Ended December 31, | ||||||||
| 2019 | 2018 | |||||||
Net income attributable to SP Plus, as reported | $ | 48.8 | $ | 53.2 | ||||
Add (subtract): | ||||||||
Income tax expense | 19.4 | 19.6 | ||||||
Interest expense, net | 18.6 | 9.2 | ||||||
Equity in earnings from investment in unconsolidated entity | — | (10.1 | ) | |||||
Depreciation and amortization expense | 29.4 | 17.9 | ||||||
|
|
|
| |||||
Earnings before interest, taxes, depreciation and amortization (EBITDA) | $ | 116.2 | $ | 89.8 | ||||
Add: EBITDA related to asset sales or dispositions | 1.3 | 8.0 | ||||||
Other, rounding | — | 0.1 | ||||||
|
|
|
| |||||
Adjusted EBITDA | $ | 117.5 | $ | 97.9 | ||||
SP+ CORPORATION 2020 PROXY STATEMENT |
A-2
| Year Ended December 31, | |||||||
| 2016 | 2015 | ||||||
| Net income attributable to SP Plus, as reported | 23.1 | 17.4 | |||||
| Add (subtract): | |||||||
| Income tax expense | 15.8 | 4.8 | |||||
| Interest expense, net | 10.0 | 12.5 | |||||
| Gain on sale of a business | — | (0.5 | ) | ||||
| Equity in losses (income) from investment in unconsolidated entity | 0.9 | 1.7 | |||||
| Depreciation and amortization expense | 33.7 | 34.0 | |||||
| Other, rounding | 0.1 | — | |||||
| Earnings before interest, taxes, depreciation and amortization (EBITDA) | $ | 83.6 | $ | 69.9 | |||
| Add: Non-routine structural and other repairs | 1.1 | 4.6 | |||||
| Add: Restructuring, merger and integration costs and non-routine settlements | 6.8 | 7.8 | |||||
| Add: Merger-related minority interest | — | 0.4 | |||||
| Add (subtract): EBITDA related to asset sales or dispositions | (0.2 | ) | (0.5 | ) | |||
| Add: Parkmobile and other contemplated transaction costs | — | 0.1 | |||||
| Other, rounding | — | — | |||||
| Adjusted EBITDA | $ | 91.3 | $ | 82.3 | |||
| APPENDIX A | ||||
SP PLUS CORPORATION
RECONCILIATION OF FREE CASH FLOW
(millions, unaudited)
Year Ended December 31, | ||||||||
| 2019 | 2018 | |||||||
Net cash provided by operating activities | $ | 76.0 | $ | 70.9 | ||||
Net cash used in investing activities | (12.5 | ) | (268.4 | ) | ||||
plus: Acquisition of business, net of cash acquired | — | 277.9 | ||||||
less: Proceeds from sale of business or equity method investee’s sale of assets, net of cash income taxes paid | — | (14.1 | ) | |||||
Distribution to noncontrolling interest | (3.2 | ) | (3.3 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | 0.1 | (0.6 | ) | |||||
Other, rounding | (0.1 | ) | (0.2 | ) | ||||
|
|
|
| |||||
Free cash flow | $ | 60.3 | $ | 62.2 | ||||
SP+ CORPORATION 2020 PROXY STATEMENT |
A-3
| Year Ended | |||
| December 31, 2016 | |||
| Operating income | $ | 52.7 | |
| Depreciation and amortization | 33.7 | ||
| Net accretion of acquired lease contracts | (1.8 | ) | |
| Non-cash stock-based compensation | 3.4 | ||
| Income tax paid, net | (17.6 | ) | |
| Income attributable to noncontrolling interest | (2.9 | ) | |
| Change in operating assets and liabilities | (2.1 | ) | |
| Purchase of leaseholds, equipment and cost of contracts and contingent purchase payments, net | (13.8 | ) | |
| Cash interest paid | (9.2 | ) | |
| Free cash flow (1) | $ | 42.4 | |
| plus: Cash used for non-routine structural and other repairs and settlement payment | 4.0 | ||
| Other, rounding | — | ||
| Adjusted free cash flow | $ | 46.4 | |
| Year Ended | |||
| December 31, 2016 | |||
| Net cash provided by operating activities | $ | 59.7 | |
| Net cash used in investing activities | (13.8 | ) | |
| less: Cash received from sale of business, net | — | ||
| Distribution to noncontrolling interest | (3.3 | ) | |
| Effect of exchange rate changes on cash and cash equivalents | (0.3 | ) | |
| Other, rounding | 0.1 | ||
| Free cash flow | $ | 42.4 | |
| APPENDIX A | ||||
SP PLUS CORPORATION
RECONCILIATION OF ADJUSTED GROSS PROFIT AND ADJUSTED G&A
(millions, unaudited)
| Year Ended December 31, | ||||||||
| 2019 | 2018 | |||||||
Gross profit | ||||||||
Gross profit, as reported | $ | 228.1 | $ | 184.0 | ||||
Add (subtract): Gross profit related to asset sales or dispositions, including earnings from an equity method investee transaction | — | 0.1 | ||||||
|
|
|
| |||||
Adjusted gross profit | $ | 228.1 | $ | 184.1 | ||||
General and administrative expenses | ||||||||
General and administrative expenses, as reported | $ | 109.0 | $ | 91.0 | ||||
Subtract: Restructuring, merger and integration costs | (1.3 | ) | (8.0 | ) | ||||
|
|
|
| |||||
Adjusted G&A | $ | 107.7 | $ | 83.0 | ||||
SP+ CORPORATION 2020 PROXY STATEMENT |
A-4
YOUR VOTE IS IMPORTANT. PLEASE VOTE TODAY.
Vote by Internet or Telephone - QUICK EASY
IMMEDIATE - 24 Hours a Day, 7 Days a Week or by Mail
SP PLUS CORPORATION
Your telephone or Internet vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed and returned your proxy card. Votes submitted electronically over the Internet or by telephone must be received by 11:59 p.m., Eastern Time, on May 5, 2020.
INTERNET/MOBILE – www.cstproxyvote.com
Use the Internet to vote your proxy. Have your proxy card available when you access the above website. Follow the prompts to vote your shares.
PHONE – 1 (866) 894-0536
Use a touch-tone telephone to vote your proxy. Have your proxy card available when you call. Follow the voting instructions to vote your shares.
MAIL – Mark, sign and date your proxy card and return it in the postage-paid envelope provided.
PLEASE DO NOT RETURN THE PROXY CARD IF YOU ARE VOTING ELECTRONICALLY OR BY PHONE.
FOLD HERE • DO NOT SEPARATE • INSERT IN ENVELOPE PROVIDED
PROXY
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” ALL OF THE NOMINEES LISTED IN PROPOSAL 1 AND “FOR” EACH OF PROPOSALS 2 AND 3.
Please mark your votes ☒
like this
1. To re-elect the following directors to serve on the Board of Directors.
(1) G Marc Baumann
FOR ALL
(2) Karen M. Garrison
WITHHOLD AUTHORITY
(3) Alice M. Peterson *FOR ALL EXCEPT AS MARKED
(4) Gregory A. Reid
(5) Wyman T. Roberts
(6) Douglas R. Waggoner
2. To approve, in a non-binding advisory vote, the 2019 compensation paid to our named executive officers.
FOR
AGAINST
ABSTAIN
3. To ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for fiscal year 2020.
FOR
AGAINST
ABSTAIN
*Instruction: To withhold authority to vote for any individual nominee, strike a line through that nominee’s name in the list above.
Mark here to change your address.
Mark here if you plan to attend the meeting.
CONTROL NUMBER
Signature Signature, if held jointly Date , 2020
Note: Please sign exactly as name appears hereon. When shares are held by joint owners, both should sign. When signing as attorney, executor, administrator, trustee, guardian, or corporate officer, please give title as such.
15653_SP Plus Proxy Card_REV4.indd 1
3/16/20 1:05 PM
Important Notice Regarding the Availability of Proxy Materials for the SP Plus Corporation Annual Meeting of Stockholders to be held on May 6, 2020.
The Proxy Statement, Proxy Card and our 2019 Annual Report to Stockholders are available at this website: http://www.cstproxy.com/spplus/2020.
FOLD HERE • DO NOT SEPARATE • INSERT IN ENVELOPE PROVIDED
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY FOR THE ANNUAL MEETING ON MAY 6, 2020
SP PLUS CORPORATION
The undersigned hereby constitutes and appoints Ritu Vig, Chief Legal Officer and Secretary, and Jerome L. Pate, Vice President and Deputy General Counsel, or either of them acting in the absence of the other, his or her true and lawful agents and proxies, with full power of substitution, and hereby authorizes them to represent the undersigned and to vote for the undersigned as designated on the reverse side, at the Annual Meeting of Stockholders to be held at 200 E. Randolph Street, 70th Floor, Chicago, Illinois, on May 6, 2020, at 1:00 p.m., Central time, and at any adjournments or postponements thereof, on all matters coming before said meeting.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting and proxy statement, both dated March 20, 2020, and hereby revokes any proxy or proxies heretofore given to vote at said meeting or any adjournment thereof.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICE BY MARKING THE APPROPRIATE BOXES ON THE REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS’ RECOMMENDATIONS. THE PROXY HOLDERS CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD. ACTION TAKEN PURSUANT TO THIS PROXY CARD WILL BE EFFECTIVE AS TO ALL SHARES OF SP PLUS CORPORATION COMMON STOCK THAT YOU OWN.
WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED HEREIN. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED “FOR” THE NOMINEES LISTED IN PROPOSAL 1 AND “FOR” EACH OF PROPOSALS 2 AND 3. THIS PROXY WILL BE VOTED, IN THE DISCRETION OF PROXY HOLDERS, UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING OR ANY ADJOURNMENT OR POSTPONEMENT THEREOF.
(Continued, and to be marked, dated and signed, on the other side)
15653_SP Plus Proxy Card_REV4.indd 2
3/16/20 1:05 PM
| Year Ended December 31, | |||||||
| 2016 | 2015 | ||||||
| Gross profit | |||||||
| Gross profit, as reported | $ | 176.4 | $ | 170.1 | |||
| Add: Non-routine structural repairs and other | 1.1 | 4.6 | |||||
| Add (subtract): Gross profit related to asset sales or dispositions | (0.2 | ) | (1.4 | ) | |||
| Other, rounding | (0.1 | ) | (0.1 | ) | |||
| Adjusted gross profit | $ | 177.2 | $ | 173.2 | |||
| General and administrative expenses | |||||||
| General and administrative expenses, as reported | $ | 90.0 | $ | 97.3 | |||
| Subtract: Restructuring, merger and integration costs and non-routine settlements | (6.8 | ) | (7.8 | ) | |||
| Subtract: G&A related to asset sales or dispositions | — | (1.0 | ) | ||||
| Subtract: Parkmobile and other contemplated transaction costs | — | (0.1 | ) | ||||
| Other, rounding | (0.2 | ) | — | ||||
| Adjusted G&A | $ | 83.0 | $ | 88.4 | |||
By Telephone: by calling the toll-free telephone number(866) 894-0536;
By Internet: by visiting www.cstproxyvote.com and following theon-screen instructions; or
By Mail: by marking, signing and dating your proxy card and returning it to us in the envelope provided.
