UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No.)
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United Rentals, Inc.
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UNITED RENTALS, INC.
100 First Stamford Place, Suite 700
Stamford, Connecticut 06902
March 21, 201722, 2023
Dear Fellow Stockholders:
You are cordially invited to attend this year’s annual meetingAnnual Meeting of stockholders,Stockholders (the “2023 Annual Meeting”), which will be held on Thursday, May 4, 2017, at the Boston Marriott Cambridge, 50 Broadway, Cambridge, Massachusetts. The meeting will start2023, at 9:00 a.m., Eastern daylight time.
Upon consideration of various factors, including cost savings and efficiency gains related to annual meetings conducted solely by means of remote communications and the increased accessibility for stockholders and other stakeholders afforded by a virtual meeting compared to an in-person meeting, the 2023 Annual Meeting will be a virtual meeting conducted exclusively online via a live webcast. Please note there is no in-person meeting this year for you to attend.
Under U.S. Securities and Exchange Commission rules that allow companies to furnish proxy materials to stockholders over the Internet, we have elected to deliver our proxy materials to the majority of our stockholders over the Internet. This delivery process allows us to provide stockholders with the information they need, while at the same time conserving natural resources and lowering the cost of delivery. On March 21, 2017,22, 2023, we mailed to our stockholders a Notice and Access to Internet Availability of Proxy Materials (the “Notice”) containing instructions on how to access our 20172023 proxy statement and annual report for the fiscal year ended December 31, 2016.2022. The Notice also provides instructions on how to cast your vote online or over the telephone and includes instructions on how to receive, free of charge, a paper copy of the proxy materials by mail.
Details of the business expected to come before the annual meeting are provided in the enclosed Notice of Annual Meeting of Stockholders and proxy statement. Your vote is important. Whether or not you intendplan to be present atattend the meeting,2023 Annual Meeting, it is important that your shares be represented. In addition to voting in person, stockholdersStockholders of record may vote via a toll-free telephone numberthe Internet or over the Internet.telephone via a toll-free number. Stockholders who received a paper copy of the proxy materials by mail may also vote by promptly completing, signing and mailing the enclosed proxy card in the return envelope provided.envelope. While you are encouraged to vote your shares prior to the meeting, the Notice provides information on casting your vote via the Internet during the meeting.
Thank you for your continued support.
Sincerely,
| MICHAEL J. KNEELAND | MATTHEW J. FLANNERY | |
| President and Chief Executive Officer |
UNITED RENTALS, INC.
100 First Stamford Place, Suite 700
Stamford, Connecticut 06902
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Our Stockholders:
The annual meeting of stockholders of United Rentals, Inc. (the “Annual Meeting”) will be held virtually via live webcast at the Boston Marriott Cambridge, 50 Broadway, Cambridge, Massachusetts, www.virtualshareholdermeeting.com/URI2023 on Thursday, May 4, 2017,2023 at 9:00 a.m., Eastern daylight time, for the following purposes:
The meeting may be adjourned or postponed from time to time. At any reconvened or rescheduled meeting, action with respect to the matters specified in this notice may be taken without further notice to stockholders, except as may be required by ourBy-Laws. Stockholders of record at the close of business Eastern daylight time on March 7, 2017,2023, are entitled to notice of, and to vote on, all matters at the meeting and any reconvened or rescheduled meeting following any adjournment or postponement.
We are pleased to take advantage of U.S. Securities and Exchange Commission rules that allow issuers to furnish proxy materials to their stockholders onover the Internet. We believe these rules allow us to provide you with the information you need while lowering the costs of printing and delivering proxy materials and reducing the environmental impact of the Annual Meeting.
March 21, 201722, 2023
By Order of the Board of Directors, |
JOLI L. GROSS |
Corporate Secretary |
Important Notice Regarding the Availability of Proxy Materials for the BoardAnnual Meeting of Directors,
JOLI L. GROSS
Corporate Secretary
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON THURSDAY, MAYStockholders to be held on Thursday, May 4, 2017.2023. Prior to May 4, 2017,2023, the Notice and Proxy Statement for the 20172023 Annual Meeting of Stockholders and the Company’s 20162022 Annual Report to Stockholders are available electronically at https://materials.proxyvote.com/911363.911363. These materials are also available at https://www.unitedrentals.com/en/our-company/investor-relations/annual-reports-proxy-statements.
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Cautionary note regarding forward-looking statements
Certain statements in this Proxy Statement are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, known as the PSLRA. These statements can generally be identified by the use of forward-looking terminology such as “believe,” “expect,” “may,” “will,” “should,” “seek,” “plan,” “intend” or “anticipate,” or the negative thereof or comparable terminology, or by discussions of vision, strategy, outlook, targets or goals (including but not limited to our environmental and social goals). These statements are based on current plans, estimates and projections, and, therefore, you should not place undue reliance on them. No forward-looking statement can be guaranteed, and actual results may differ materially from those projected. See our Form 10-K for the year ended December 31, 2022 for a summary of factors that could cause actual results to differ materially from those projected.
Note regarding website and links
References to our website or other links to our publications or other information are provided for the convenience of our stockholders. None of the information or data included on our websites or accessible at these links is incorporated into, and will not be deemed to be a part of, this Proxy Statement or any of our other filings with the Securities and Exchange Commission.
Proxy Statement Summary
This summary highlights information about United Rentals, Inc. (the “Company” or “United Rentals”) and certain information contained elsewhere in this proxy statement (“Proxy Statement”) for our 20172023 annual meeting of stockholders.stockholders (the “Annual Meeting”). This summary does not contain all of the information that you should consider in voting your shares. You should read the entire Proxy Statement carefully before voting.
Voting Matters and Board Recommendations
Proposal | Board Vote Recommendation | Page Reference | ||||||
Proposal 1 | – | Election of Directors | FOR each nominee | 13 | ||||
Proposal 2 | – | Ratification of Appointment of Public Accounting Firm | FOR | 68 | ||||
Proposal 3 | – | Advisory Approval of Executive Compensation | FOR | 70 | ||||
Proposal 4 | – | Advisory Vote on Frequency of Executive Compensation Vote | EVERY YEAR | 72 | ||||
Proposal 5 | – | Company Proposal to Amend the Company’s Restated Certificate of Incorporation to Remove Supermajority Voting Requirements | FOR | 73 | ||||
Proposal 6 | – | Stockholder Proposal on Special Shareowner Meetings | AGAINST | 75 | ||||
Proposal 7 | – | Company Proposal to Amend the Company’s Restated Certificate of Incorporation to Allow Amendment toBy-Laws Granting Stockholders Holding 25% or More the Ability to Call Special Meetings of Stockholders | FOR | 77 |
Casting Your Vote
Voting Matters and Board Recommendations | |||
Proposal | Board Vote | Page | |
Proposal 1 – | Election of Directors | FOR each nominee | 15 |
Proposal 2 – | Ratification of Appointment of Public Accounting Firm | FOR | 94 |
Proposal 3 – | Advisory Approval of Executive Compensation | FOR | 96 |
Proposal 4 – | Advisory Vote on Frequency of Executive Compensation Vote | EVERY YEAR | 99 |
Proposal 5 – | Company Proposal to Improve Shareholder Written Consent (Amend Certificate of Incorporation to Reduce Threshold to 15%) | FOR | 100 |
Proposal 6 – | Stockholder Proposal to Improve Shareholder Written Consent | AGAINST | 101 |
How to Vote | Stockholder of Record (Shares registered in your name with American Stock | Street Name Holders (Shares held through a Broker, Bank or Other Nominee) | ||||||
Via the Internet: Visit the applicable voting website and follow the on-screen instructions: | www.proxyvote.com | Refer to voting | ||||||
| 1-800-690-6903 |
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| Refer to voting instruction form. | ||||
By Mail: To the extent you have requested paper copies of proxy materials, sign, date and return your completed proxy card by mail. | ||||||||
During the Meeting: For instructions on attending the | ||||||||
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Board Leadership Structure
Our current Board of Directors (“Board”) leadership structure consists of our non-executive Chair; Lead Independent Director; and President and Chief Executive Officer (“CEO”). The following is a summary of how the three roles interact and overlap with respect to Board leadership responsibilities:
Non-Executive Chair Michael Kneeland | Lead Independent Director Bobby Griffin | President and CEO Matthew Flannery | ||
• Presides over Board meetings • Provides advice and counsel to the CEO • Focuses on Board oversight and governance matters • Sets the Board agenda and leads the materials review process | • Liaison between independent directors and Chair • Acts as an independent resource to the CEO • Chairs executive sessions of independent directors • Participates in the Board agenda and materials review process | • Drives business to align with the Board’s overall perspective and the Company’s long-term strategy • Implements strategic initiatives • Develops robust management team • Participates in the Board agenda and materials review process |
We believe this structure enables each person to focus on different aspects of Company leadership and reinforces the independence of our Board as a whole. We have had a Lead Independent Director role since May 2019, when Mr. Kneeland, our former CEO, retired and became non-executive Chair. For additional information about this structure see “Corporate Governance Matters—Board Leadership Structure and Role of Our Lead Independent Director.”
Board Nominees
You are being asked to vote on the following 911 nominees for director. All directors are elected annually by a majority of the votes cast. All nominees meet the New York Stock Exchange (“NYSE”(the “NYSE”) governance standards for director independence, except for Mr.Messrs. Kneeland and Flannery, who isare not independent due to his position as an executive officer.their employment (or, in the case of Mr. Kneeland, former employment) with the Company. Information about each director’s experiences, qualifications, attributes and skills can be found beginning on page 14.18.
Name | Age | Director Since | Principal Occupation | Independent | Board Committee Membership* | Age | Director Since | Principal Occupation | Independent | Current | |||||
José B. Alvarez | 54 | 2009 | Faculty, Harvard Business School, Retired Executive Vice President-Global Business Development, Royal Ahold NV | Yes | NC, SC | 60 | 2009 | Faculty, Tuck School of Business at Dartmouth and Harvard Business School, Retired Executive Vice President–Global Business Development, Royal Ahold NV | Yes | NC, SC | |||||
Jenne K. Britell, Ph.D. | 74 | 2006 | Chairman, United Rentals, Inc., formerly Chairman and Chief Executive Officer, Structured Ventures, Inc. | Yes | |||||||||||
Marc A. Bruno | 51 | 2018 | Chief Operating Officer, U.S. Food & Facilities, Aramark Corporation | Yes | CC, NC | ||||||||||
Larry D. De Shon | 63 | 2021 | Retired President and Chief Executive Officer, Avis Budget Group, Inc. | Yes | NC, SC | ||||||||||
Matthew J. Flannery | 58 | 2019 | President and CEO, United Rentals, Inc. | No | SC | ||||||||||
Bobby J. Griffin | 68 | 2009 | Retired President-International Operations, Ryder System, Inc. | Yes | AC, NC, SC | 74 | 2009 | Retired President–International Operations, Ryder System, Inc. | Yes | NC | |||||
Kim Harris Jones | 63 | 2018 | Retired Senior Vice President and Corporate Controller, Mondelez International | Yes | AC, CC | ||||||||||
Terri L. Kelly | 61 | 2018 | Retired President and Chief Executive Officer, W. L. Gore & Associates | Yes | CC, NC, SC | ||||||||||
Michael J. Kneeland | 63 | 2008 | President and Chief Executive Officer, United Rentals, Inc. | No | SC | 69 | 2008 | Chair and Retired CEO, United Rentals, Inc. | No | N/A | |||||
Singleton B. McAllister | 65 | 2004 | Of Counsel, Husch Blackwell | Yes | CC, SC | ||||||||||
Jason D. Papastavrou, Ph.D. | 54 | 2005 | Chief Executive Officer and Chief Investment Officer, ARIS Capital Management | Yes | AC | ||||||||||
Filippo Passerini | 59 | 2009 | OperatingExecutive-U.S. Buyouts, Carlyle Group and Former President, Global Business Services and Chief Information Officer, Procter & Gamble | Yes | AC, CC | ||||||||||
Donald C. Roof | 65 | 2012 | Retired Executive Vice President and Chief Financial Officer, Joy Global, Inc. | Yes | AC, CC, NC | ||||||||||
Francisco J. Lopez-Balboa | 62 | 2022 | Executive Vice President and Chief Financial Officer, Cumulus Media Inc. | Yes | AC, CC | ||||||||||
Gracia C. Martore | 71 | 2017 | Retired President and Chief Executive Officer, TEGNA Inc., formerly known as Gannett Co., Inc. | Yes | AC, CC | ||||||||||
Shiv Singh | 39 | N/A | Senior Vice President, Global Head of Digital and Marketing Transformation, Visa, Inc. | Yes | N/A | 45 | 2017 | Chief Marketing & Customer Experience Officer, LendingTree, Inc. | Yes | AC, NC, SC | |||||
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* AC – Audit Committee; CC – Compensation Committee; NC – Nominating and Corporate Governance Committee; SC – Strategy Committee | * AC – Audit Committee; CC – Compensation Committee; NC – Nominating and Corporate Governance Committee; SC – Strategy Committee |
* AC – Audit Committee CC – Compensation Committee NC – Nominating
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Board Refreshment
Board composition remains a priority for the Company as evidenced by its continuing refreshment efforts. Our Board has engaged an independent consulting and Corporate Governance Committee
SC – Strategy Committee
The Board intendssearch firm since 2016 to assist in developing a long-term succession plan to identify, recruit and appoint Gracia C. Martore asnew directors whose qualifications bring further strength to our Board. In particular, the Board’s long-term succession plan is informed by a list of prioritized director aftercompetencies which was first developed in 2016 and is regularly reviewed by the Company’sBoard. See “Proposal 1” for our director skills and diversity matrix, which presents the competencies of each director. As a result of the Board’s refreshment efforts, seven long-serving directors did not stand for re-election from 2017 annual meeting of stockholders.to 2022. In addition, Mr. Singh and Ms. Martore is currently Presidentjoined the Board in 2017; Mr. Bruno and Mses. Kelly and Harris Jones joined the Board in 2018; Mr. Flannery joined the Board in 2019 upon his appointment to the position of Chief Executive Officer of TEGNA Inc. (“TEGNA”), but is expected to retirethe Company; Mr. De Shon joined the Board in 2021; and Mr. Lopez-Balboa joined the first halfBoard in 2022. While not part of 2017. Because Ms. Martore sits on another public company’s board of directors, she is not available to joinour refreshment initiative, Donald Roof resigned from the Company’s board until she retires from TEGNA. Accordingly, we are unable to include Ms. Martore as a director nomineeBoard in this Proxy Statement and you are not being asked to vote on her. We include this disclosure to be transparent with our stockholders and to highlight our continued focus on board refreshment. See “Board Matters—New Director to be Appointed After Annual Meeting”2021 for Ms. Martore’s biography and additional information.
Corporate Governance Highlights
We are committed to the highest standards of ethics, business integrity and corporate governance. We are focused on increasing stockholder value and understand our ethical obligations to our stockholders, employees, customers, suppliers, and the communities in which we operate. Our governance practices are designed to establish and preserve management accountability, provide a structure that allows the Board to set objectives and monitor performance, ensureencourage the efficient use and accountability of resources, and enhance stockholder value.
Board Independence | Board Performance | |
• 9 of | • Risk Oversight |
• Lead Independent Director | • Robust Board Evaluations |
• Required Committees are Fully Independent | • Commitment to Board Refreshment |
• Focus on Management Succession Planning |
Other Board and | Stockholder Rights | |||
• Separate Chair and CEO | • Proxy Access | |||
• No Hedging or Pledging of Company Shares | • Stockholder Right to Call Special Meetings | |||
• Robust Stock Ownership Guidelines | • Stockholder Right to Act by Written Consent | |||
• Authority to Retain Outside Advisors | • No Poison Pill | |||
• Director Retirement Age Policy | • Simple Majority Voting Requirements | |||
• Director Overboarding Policy | • Annual Election of All Directors | |||
• Diverse in Gender, Ethnicity, Experience and Perspective | • Majority Voting for Director Elections |
Stockholder EngagementBoard Oversight of Environmental and Social Matters
Pursuant to its charter, our Board’s Nominating and Corporate Governance (“N&CG”) Committee holds primary responsibility for overseeing the Company’s environmental and social policies and practices. In furtherance of this responsibility, the N&CG Committee engages on environmental and social matters several times a year, including reviewing the Company’s annual corporate responsibility report and reviewing the Company’s key environmental and social policies. During 2022, the N&CG Committee’s oversight included, among other items, review of: the Company’s health and safety practices and performance; the Company’s diversity, equity and inclusion (“DE&I”) strategy, practices and disclosure; results from the Company’s employee experience survey; the Company’s lobbying report, human rights policy statement, supplier code of conduct and health safety and environmental policy; investor feedback on environmental, social and governance (“ESG”) matters; the Company’s climate and sustainability strategy; and progress against the Company’s environmental and social goals, including the Company’s greenhouse gas (“GHG”) emissions intensity reduction goal. The N&CG Committee also receives regular updates from the Sustainability Steering Committee, comprised of leaders from across the Company. In addition, the full Board periodically reviews environmental and social matters, such as talent management
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and DE&I and the other three Board committees oversee specific ESG topics. The Audit Committee oversees our cybersecurity programs and enterprise risk management and considers related risks. The Compensation Committee evaluates CEO and senior management compensation and therein considers ESG performance. The Strategy Committee advises on overall Company strategy, which increasingly includes consideration of sustainability matters and innovation which will be key to certain environmental initiatives. For additional information see “Environmental and Social Highlights—Environmental and Social Risk Management” and our latest corporate responsibility report available on our website at http://www.unitedrentals.com under the “Company—About Us” tab.
2022 Proposals Regarding Special Shareholder Meeting Right
At our 2022 annual meeting, our stockholders voted on a stockholder proposal to lower the ownership threshold for stockholders to be able to call special meetings from 25% to 10% and a competing Company proposal to lower the ownership threshold from 25% to 15%. The Company proposal passed and the stockholder proposal did not pass. The Company’s By-Laws were amended immediately following stockholder approval at the 2022 annual meeting to lower the ownership threshold for stockholders to be able to call special meetings from 25% to 15%. The N&CG Committee and Board considered the voting results from our 2022 annual meeting and related investor feedback during the 2022 Outreach Program (discussed below) and determined not to lower the threshold below the now current 15% threshold.
Investor Engagement
We value our stockholders’investors’ perspective on our business and each year we proactively interact with stockholdersinvestors through numerous stockholder engagement activities. In 2016,2022, these included our biennial investor day, our annual stockholder meeting, quarterly earnings calls and various investor conferences and several(non-deal) road shows. We also conducted engagement callsIn addition, at the Board’s request, management continued the momentum from the Company’s prior stockholder outreach programs with several large institutional investors and proxy advisory firms to discuss their perspectives on our corporate governance practices and executive compensation programs.another outreach program in 2022, as detailed below. These engagement activities, and the feedback we receive, are informative and helpful to us in our ongoing effort to increase stockholder value.
Our We welcome additional feedback and our Investor Relations department is the contact point for stockholderinvestor interaction with United Rentals. StockholdersAdditionally, investors may also access investor information about the Company through our website. For questions concerning Investor Relations, please contact Ted Grace, Executive Vice President and Chief Financial Officer, at203-618-7122.
2016The purpose of our 2022 Stockholder Outreach Program (our “2022 Outreach Program”) was to engage with our top stockholders about key ESG and compensation topics specific to the Company, and about other topics and trends our stockholders wished to discuss with us. During 2022, we contacted governance and investment professionals at 25 of our top holders, representing over 50% of total outstanding shares. Of the 25 holders contacted in 2022, we had calls with 10 holders, representing approximately 21% of total outstanding shares. The Chair of the N&CG Committee participated in one of these calls and the Board remains willing to make an independent director available for direct discussion with investors, upon investor request and as appropriate. For informationabout how to communicate directly with our Board, see “Corporate Governance Matters—Direct Communications with Directors.” The following is a summary of topics that were discussed during our 2022 engagements and results of the feedback.
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What Was Discussed | Results |
During the calls, we spent a significant amount of time discussing: • the Company’s new external environmental and social goals, including safety and workforce diversity goals; • progress against the Company’s existing GHG emissions intensity reduction goal; • the Company’s business model and the environmental benefits of that model; • Board composition and refreshment and the Board’s overboarding policy adopted in 2022; • workforce diversity and related disclosures, including our EEO-1 report; • the Company’s employee experience survey results; • the stockholder proposal voted on at our 2022 annual meeting regarding the threshold for the stockholder right to call special meetings, which did not pass, and the competing Company proposal, which did pass; • the ESG modifier included in our annual incentive compensation plan for 2022; and • our compensation plans. | • The results of our engagements were reported to the N&CG Committee and Compensation Committee and elevated to the Board, as necessary. • Based on feedback, we are including an individual director skills and diversity matrix in this Proxy Statement. The N&CG Committee also considered whether any changes needed to be made to the Board’s list of prioritized director competencies based on feedback from investors or regulatory developments. • We are currently in the process of developing our 2022 corporate responsibility report. We are responding to stockholder feedback for more transparency by incorporating a more robust Task Force on Climate-Related Financial Disclosures (TCFD) response into the report, including an overview of the climate scenario analysis engagement we are undergoing with a third party consultant. • The Compensation Committee considered a range of feedback from investors regarding the inclusion of ESG metrics in compensation plans, including feedback from some investors that noted that they like to see ESG included as a component of executive compensation, but believe performance measures should primarily focus on growth and returns, as our incentive plans do. |
2022 Business HighlightsOverview
The Company generated solid resultsIn 2022, we marked our first 25 years in business by delivering the best financial performance in our history. It was another year of strong demand for 2016,equipment rental services, driven by major tailwinds in our end-markets. We leaned into that opportunity, continuing to invest in the business and growing rental revenue by over 20% in both our general rental and specialty segments.
Importantly, we converted our 2022 growth into record profitability, margins and returns for our shareholders. At the same time, we invested in long-term growth with $2.3 billion of acquisitions, 35 specialty cold-starts, $3.4 billion of rental fleet purchases and ongoing investments in safety, customer service and sustainability. Based on our durable cash generation and strong balance sheet, we announced in January 2023 that we would reactivate our share repurchase program and initiate a quarterly dividend. Together, these decisions are expected to return a total of $1.4 billion of capital to our stockholders this year.
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For the full year 2022, we delivered a record $11.6 billion of total revenue, including $10.1 billion of $5.76 billion;equipment rental revenue, reflecting a mix of investments in organic growth and acquisitions to serve growing market demand. Below the revenue line, we achieved strong flow-through through a combination of diligent cost management and operational excellence, driving a net income margin(1) of 18.1%, and an adjusted EBITDA1 margin(1) of $2.7648.3%. In addition, we generated $4.4 billion at a margin of 47.9%;net cash from operating activities, and record$1.8 billion of free cash flow2(1) after purchasing $3.4 billion of $1.18 billion. Economic profit improvement (“EPI”)3 declined by $60 million year-over-year. Returnrental fleet to serve our expanding customer base.
We deployed these resources strategically to achieve market share gains and generate superior returns. Our return on invested capital (“ROIC”)4(2) for 2022 was 8.3%a record 12.7%, solidly above our cost of capital, and our net leverage ratio was 2.0x at year-end 2022, down from 2.2x at year-end 2021. Total liquidity was $2.9 billion at year-end 2022, after completing our $2 billion acquisition of Ahern Rentals, Inc. (”Ahern”) in December.
Ahern was our largest acquisition in 2022, and we completed it at an ideal time to expand our resources. While it had little impact on our financial results for 2016. The modest declinesthe year, as the acquisition was completed in December 2022, it enabled us to begin integrating acquired operations in 30 states at year-end ahead of seasonal demand. In total, revenue, adjusted EBITDAthe strategic investments we made throughout the year increased our service capacity to approximately 24,600 employees and ROIC were largely attributable to four headwinds: global economic concerns inmore than 1,500 branches as of the first quarter, which caused some uncertainty in our end markets; the ongoing drag from the upstream oil and gas sector; continued weakness in the Canadian economy; and industry over-fleeting. Despite these constraints, our total revenue, adjustedof 2022.
Notably, the Company’s specialty rental operations of Trench Safety, Power & HVAC, and Pump Solutions experienced solid growth in 2016, with year-over-year increases in rental revenue of 9%, 15% and 3%, respectively. While we opened 14 specialty rental branches in 2016, the bulk of the revenue increase came from same-store performance. This was primarily driven by standalone demand for our specialty services and by cross-selling our specialty fleet to our general rental customers. Additional achievements in 2016 included one of the safest years on record for Company operations, and the launch of an innovative digital platform to expand our market reach.
For more information regarding our 2016 performance, please refer to our Annual Report onForm 10-K for the fiscal year ended December 31, 2016 (the “Form10-K”2022. Please refer to the Form 10-K for the reconciliations to GAAP and for the reasons why management believes the non-GAAP financial measures provide useful information to investors about the Company's operating performance and liquidity. Net income and adjusted EBITDA margin represent net income or adjusted EBITDA divided by total revenue.
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In addition, our people-centric culture is a pillar of our growth strategy. Our Board monitors Company progress on matters of corporate social and environmental responsibility and fosters our culture through a focus on corporate governance. In 2022, we:
Executive Compensation Overview
Our Compensation Philosophy
The foundation of our compensation philosophy is to ensure that our executive compensation program aimsis designed to attractalign with the Company’s business strategy and retain high-caliber management talent to lead our businessdrive long-term stockholder value. Our compensation philosophy is supported by three pillars: stockholder alignment, market competitiveness, and reward them for outstanding performance.internal balance. Our compensation philosophy is supported by the following principal elements of pay:
Principal Elements of Pay:Our program emphasizes variable pay that aligns compensation with performance and stockholder value and has three key elements: base salary, annual incentive compensation and long-term incentive compensation. Each of these elements serves a specific purpose in our compensation strategy.
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Pay Element | How It’s Paid | Purpose | ||
Base Salary | Cash (Fixed) | Provide a competitive base salary | ||
Annual Incentive Compensation Plan (“AICP”) | Cash and Vested Shares of Company Stock (Variable) | Focus executives on achieving annual financial and strategic objectives that promote growth, profitability, ESG outcomes, and returns. | ||
Long-Term Incentive Plan (“LTIP”) | Equity (Variable) | Provide incentive for executives to reach financial goals and align their long-term economic interests with those of stockholders through meaningful use of equity compensation. |
Pay Mix:TheOur executive compensation program emphasizes variable pay that aligns compensation with performance and stockholder value. For our named executive officers (“NEOs”), the mix of paycompensation elements is heavily leveragedweighted toward variable, performance-based compensation. For 2016,compensation with a balanced focus on growth, profitability, and returns. The CEO’s compensation has a greater emphasis on variable compensation than that of the other NEOs because his actions have a greater influence on the performance of the Company as a whole. The significant majority of named executive officer (“NEO”)NEO pay wascontinues to be variable: 87%88% for the Chief Executive Officer (“CEO”)CEO and an average of 72%74% for our other NEOs, excluding Ms. Graziano and Mr. Fenton who are no longer employed by the Company, based upon annual target total direct compensation (“TTDC”) for fiscal year 2022 and not including any one-time supplemental RSU grants or awards made in March 2016.outside of annual TTDC.
Stockholder Support:At the Company’s 20162022 annual meeting of stockholders, we received substantial support for our executive compensation program, with over 95%approximately 92% of the stockholders who voted on the advisory “say on pay” proposal approving the compensation of our NEOs.NEOs, which was consistent with the positive feedback we received in discussions with our stockholders throughout the year. We interpreted this exceptionally strong level of support as affirmation of the structure of our program and our approach to making compensation decisions. As a result, we did not make substantive changes to the program design in 2016.2022, aside from the adjustment to the strategic factors framework used in our AICP to add certain ESG objectives, which adjustment was previewed in our 2022 proxy statement.
Compensation Governance:Our program is built on the foundation of the following best practices and policies:
What We Do | What We Don’t Do | |||||||
| • Heavy emphasis on variable(“at-risk”) compensation |
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| • Stock ownership guidelines supported by net share retention requirements |
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| • Double-trigger equity vesting upon a change in control |
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| • Clawback • Engage an independent compensation consultant • Annual risk assessment of compensation practices |
| • No significant perquisites • No supplemental executive retirement plans • No repricing or exchange of underwater options without stockholder approval • No option or stock appreciation rights granted below fair market value | |||||
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| • No taxgross-ups other than for qualified relocation expenses • No guaranteed incentive payments |
20162022 Pay Decisions:The Compensation Committee took the following compensation-related actions for fiscal 2016:2022:
For specificfurther details about the executive compensation program, please refer to the Compensation Discussion & Analysis (“CD&A”)&A starting on page 3146 of this Proxy Statement.
Company Awards
Company Awards | ||
RECENT AWARDS AND RECOGNITIONS | ||
2022 National Diversity Excellence Award Association of Builders and Contractors |
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2022 Military Times Best for Vets | 2023 Military Friendly Supplier Diversity Program G.I. Jobs | |
2022 VETS Indexes 5 Star Employer | 2023 Military Friendly Spouse Employer G.I. Jobs | |
2023 America’s Most Responsible Companies (Rank 43 of 500) Newsweek | 2023 Top Workplaces USA (Rank 17 in Large Company category) Energage | |
2023 Glassdoor Best Places to Work - Top 100 | 2022 HireVets Medallion Award Program Gold Award, Large Employer | |
2023 Military Friendly Company (Gold) G.I. Jobs | 2022 Forbes World’s Best Employers | |
2023 JUST Capital JUST 100 List | 2022 Newsweek Most Trustworthy Companies | |
Proud Sponsor of the United Compassion Fund, an employee-funded 501(c)(3) program for assisting United Rentals employees in need |
9
UNITED RENTALS, INC.
100 First Stamford Place, Suite 700
Stamford, Connecticut 06902
March 21, 201722, 2023
Proxy Statement
Annual Meeting of Stockholders
We are providing this Proxy Statement in connection with the solicitation by the Board of Directors (the “Board”) of United Rentals, Inc. (the “Company”) of proxies to be voted at our 20172023 annual meeting of stockholders (the “Annual Meeting”) to be held at the Boston Marriott Cambridge, 50 Broadway, Cambridge, Massachusetts,virtually via live webcast on Thursday, May 4, 2017,2023, at 9:00 a.m., Eastern daylight time, at www.virtualshareholdermeeting.com/URI2023, and at any reconvened or rescheduled meeting following any adjournment or postponement.
This Proxy Statement contains important information for you to consider when deciding how to vote. Please read this information carefully.
Internet Availability of Proxy Materials
We are making this Proxy Statement and our 20162022 annual report to stockholders available to our stockholders onover the Internet. On March 21, 2017,22, 2023, we mailed our stockholders a Notice and Access to Internet Availability of Proxy Materials (the “Notice”) containing instructions on how to access our proxy materials, including this Proxy Statement and our 20162022 annual report. Stockholders will be able to access all proxy materials over the Internet free of charge, with such materials being searchable readable and printable. The Notice also provides instructions on how to vote over the Internet, by telephone or by mail. If you received the Notice by mail, you will not receive a printed copy of the proxy materials in the mail unless you specifically request these materials.
Internet distribution of proxy materials is designed to expedite receipt by stockholders, lower the cost of our annual meetings,Annual Meeting, and reduce the environmental impact of such meetings.meeting. However, if you received the Notice by mail and would like to receive a printed copy of our proxy materials, free of charge, please follow the instructions for requesting such materials contained in the Notice.
Record Date
The record date for determining stockholders entitled to notice of, and to vote at, the annual meetingAnnual Meeting (and at any reconvened or rescheduled meeting following any adjournment or postponement) has been established as the close of business, Eastern daylight time, on March 7, 2017.2023.
Voting Securities Outstanding on Record Date
As of the record date, there were 84,455,33469,385,039 shares of our common stock outstanding and entitled to vote. From April 20 to May 3, 2017,In accordance with Delaware law, a list of the stockholders entitled to vote at the annual meetingAnnual Meeting will be available for inspection during ordinary business hours at our principal executive offices located at 100 First Stamford Place, Suite 700, Stamford, Connecticut. The list will also be available atby appointment with the annual meeting.Company beginning 10 days prior to the Annual Meeting.
Right to Vote
With respect to each matter properly brought before the annual meeting,Annual Meeting, each holder of our common stock as of the record date will be entitled to one vote for each share held on the record date.
10
Voting
Voting
Voting Before the Annual Meeting
If you are a stockholder of record, meaning that you hold your shares in certificate form or through an account with our transfer agent, American Stock Transfer & Trust Company, you have three options to vote before the annual meeting:Annual Meeting:
If you indicate a choice with respect to any matter to be acted upon when voting via the Internet (or by telephone or on your returned proxy card, if applicable) and you do not validly revoke it, your shares will be voted in accordance with your instructions. If you do not vote via the Internet or by telephone, or sign, date and return a proxy card prior to the deadlines set forth above, you must attendmay vote via the annual meeting in person in order to vote.Internet during the Annual Meeting.
If you hold your shares in “street name” through an account with a bank or broker, you will receive voting instructions from your bank or broker.
If you are a participant in the United Rentals 401(k) Plan, you should have received a separate proxy voting instruction card from the plan trustee, and you have the right to provide voting instructions to the plan trustee by submitting your voting instruction card for those shares that are held by the plan and allocated to your plan account. For your voting instructions to be processed, they must be received by 11:59 p.m., Eastern time, on Monday, May 1, 2017.
Voting atDuring the Annual Meeting
If you are a stockholder of record, you may attend and vote your shares atduring the annualAnnual Meeting. You can attend the meeting if you attend in person. If you intend to vote your shares atby accessing www.virtualshareholdermeeting.com/URI2023 and entering the annual meeting, you will need to bring valid picture identification with you. We will confirm that you were a stockholder of record16-digit control number on the record date and will provide you with a blank proxy card which will serve as a ballot on which to record your vote.or Notice you previously received.
If you hold your shares in “street name,”name” (i.e. through an account at a broker or other nominee) and want to attend or vote your shares during the Annual Meeting, please follow the instructions you must obtain a legal proxyreceived from your bankbroker or brokernominee to obtain your 16-digit control number in order to vote atadvance of the annual meeting. A legal proxy is an authorization from your bank or broker to vote the shares it holds in its name. In addition to a legal proxy, you will need to bring with you valid picture identification and a recent account statement from your bank or broker, confirming your holdings on the recordAnnual Meeting date. Based on these documents, we will confirm that you have proper authority to vote and will provide you with a blank proxy card to serve as a ballot.
If you are a participant in the URI 401(k) Plan, you may not vote plan shares in person at the annual meeting because the plan trustee submits one proxy to vote all shares held by the plan.
Even if you plan to attend the annual meeting,Annual Meeting, we encourage you to vote your shares before the meeting via the Internet, by telephone or by mail.
Directions to the annual meeting are available by calling the Boston Marriott Cambridge at1-617-494-6600 or visiting its website at http://www.marriott.com/hotels/maps/travel/boscb-boston-marriott-cambridge/.
11
Failure to Provide Specific Voting Instructions
If you are a stockholder of record and you properly sign, date and return a proxy card, but do not indicate how you wish to vote with respect to a particular nominee or proposal, then your shares will be voted:voted as follows:
If you hold your shares in “street name” through an account with a bank or broker, you will receive voting instructions from your bank or broker. Banks and brokers have the authority under New York Stock Exchange (“NYSE”)NYSE rules to vote shares for which their customers do not provide voting instructions on routine matters. The proposal to ratify the appointment of our independent registered public accounting firm is considered a routine matter under NYSE rules. This means that banks and brokers may vote in their discretion on this matter on behalf of clients who have not furnished voting instructions at least ten10 days before the date of the annual meeting.Annual Meeting. However, some brokers will only vote uninstructed shares in the same proportion as all other shares are voted with respect to a proposal. Unlike the proposal to ratify the appointment of our independent registered public accounting firm, proposals 1, 3, 4, 5 6 and 76 are eachnon-routine matters for which brokers do not have discretionary voting power and for which specific instructions from beneficial owners are required. As a result, brokers are not allowed to vote on these proposals on behalf of beneficial owners if such owners do not return specific voting instructions.
If you are a participant in the URI 401(k) Plan, you should have received a separate proxy voting instruction card from the plan trustee. If you sign and return the voting instruction card but otherwise leave it blank or if you do not otherwise provide voting instructions to the plan trustee by mail, Internet or telephone, your shares will be voted by the plan trustee:Quorum
Quorum
The presence at the annual meeting,Annual Meeting, in person or represented by proxy, of the holders of a majority of the outstanding shares entitled to vote will constitute a quorum for the transaction of business. If a share is deemed present at the annual meetingAnnual Meeting for any matter, it will be deemed present for all other matters. Abstentions and brokernon-votes are treated as present for quorum purposes.
Right to Revoke Proxies
If you are a stockholder of record (even if you voted via the Internet, by telephone or by mail), you retain the power to revoke your proxy or change your vote. You may revoke your proxy or change your vote at any time prior to its exercise by (i) sending a written notice of such revocation or change to United Rentals, Inc., 100 First Stamford Place, Suite 700, Stamford, Connecticut 06902, Attention: Corporate Secretary, which notice must be received by 5:00 p.m., Eastern daylight time, on Wednesday, May 3, 2017,2023, (ii) voting in person atduring the annual meeting,Annual Meeting, (iii) submitting a new proxy via the Internet or by telephone that is received by 11:59 p.m., Eastern daylight time, on Wednesday, May 3, 2017,2023, or (iv) executing and mailing a later-dated proxy card to American Stock Transfer & Trust Company, Operations Center, 6201 15th Avenue, Brooklyn, New York 11219,Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717, which proxy card must be received by 5:00 p.m., Eastern daylight time, on Wednesday, May 3, 2017.2023.
“Street name” stockholders who wish to revoke a proxy already returned on their behalf must direct the institution holding their shares to do so.
Participants in the URI 401(k) Plan who wish to revoke or change voting instructions provided to the plan trustee must follow the instructions of the trustee in order to do so.
12
Method and Cost of Solicitation
In addition to solicitation by mail, our directors, officers and employees may solicit proxies by telephone, electronic communication or other means. We have also retained Innisfree M&A Incorporated, a proxy solicitation firm, to assist us in soliciting proxies, for an estimated fee of $22,500, plus reimbursement of reasonableout-of-pocket expenses and disbursements. Our directors, officers and employees receive no additional compensation for solicitation of proxies.
We will bear all costs associated with soliciting proxies for the annual meeting.Annual Meeting. We will, upon request, and in accordance with applicable regulations, reimburse banks, brokers, other institutions, nominees and fiduciaries for their reasonable expenses in forwarding solicitation materials to beneficial owners.
Matters to Be Acted Upon
As discussed in more detail under “Proposal 1—Election of Directors,” each director is required to be elected by a majority of votes cast with respect to such director, i.e., the number of votes cast “for” must exceed the number of votes cast “against.” Abstentions and shares not represented at the meeting will have no effect on the election of directors. Brokers are not entitled to vote on director elections if not furnished voting instructions by their client. As a result, brokernon-votes will not be treated as votes cast and will have no effect on the election of directors.
The matter described in “Proposal 2—Ratification of Appointment of Public Accounting Firm” is required to be approved by the affirmative vote of the majority of shares present in person or represented by proxy at the annual meetingAnnual Meeting and entitled to vote on the matter. Abstentions will have the same effect as a vote against this proposal, whereas shares not represented at the meeting will not be counted for purposes of determining whether such matter has been approved. Brokers may vote in their discretion on this proposal on behalf of clients who have not furnished voting instructions. As a result, brokernon-votes will not arise in connection with, and thus will have no effect on, this proposal.
With respect to “Proposal 3—Advisory Approval of Executive Compensation,” the affirmative vote of a majority of shares present in person or represented by proxy at the annual meetingAnnual Meeting and entitled to vote
on the matter is required for approval of the compensation of our named executive officers. Voting for Proposal 3 is being conducted on an advisory basis and, therefore, the voting results will not be binding on the Company, the Board or the Compensation Committee. Abstentions will have the same effect as a vote against this proposal, whereas shares not otherwise represented at the meeting will have no effect on the outcome of this proposal. Brokers are not entitled to vote on Proposal 3 if not furnished voting instructions by their client. As a result, brokernon-votes will have no effect on the outcome of Proposal 3. Voting for Proposal 3 is being conducted on an advisory basis and, therefore, the voting results will not be binding on the Company, the Board or the Compensation Committee.
With respect to “Proposal 4—Advisory Vote on Frequency of Executive Compensation Vote,” we are asking stockholders whether the advisory vote on executive compensation should occur every three years, every two years, or every year. The option of once every three years, once every two years or once every year that receives the greatest number of votes will be the frequency approved by stockholders. Voting on Proposal 4 is being conducted on an advisory basis and, therefore, the voting results will not be binding on the Company, the Board or the Compensation Committee. Abstentions and shares not otherwise represented at the meeting will have no effect on the outcome of Proposal 4. Brokers are not entitled to vote on Proposal 4 if not furnished voting instructions by their client. As a result, brokernon-votes will have no effect on the outcome of Proposal 4.
With respect to “Proposal 5—Company Proposal to Amend the Company’s RestatedImprove Shareholder Written Consent (Amend Certificate of Incorporation to Remove Supermajority Voting Requirements,Reduce Threshold to 15%),” the affirmative vote of holders of at least66-2/3% 50% of the voting power of all shares of capital stock of the Company entitled to vote generally for the election of directors is required for approval. Abstentions will have the same effect as a vote against this proposal, whereas shares not otherwise represented at the meeting will have no effect on the outcome of this proposal. Brokers are not entitled to vote on Proposal 5 if not furnished voting instructions by their client. As a result, brokernon-votes will have no effect on the outcome of Proposal 5. If stockholders vote to approve Proposal 5, itchanges to our Certificate of Incorporation will be effective upon the filing of ana certificate of amendment to the Restatedand amended and restated Certificate of Incorporation with the Secretary of State of Delaware. WeDelaware, which we intend to file the amendmentdo immediately after the requisite vote is obtained during the annual meeting and prior to the vote on Proposals 6 and 7. Then, after confirmation of receipt from the Secretary of State of Delaware, we will proceed with Proposals 6 and 7.meeting.
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With respect to “Proposal 6—Stockholder Proposal on Special Shareowner Meetings,to Improve Shareholder Written Consent,” the affirmative vote of holders of a majority of shares present in person or represented by proxy at the annual meetingAnnual Meeting and entitled to vote on the matter is required for approval. Abstentions will have the same effect as a vote against this proposal, whereas shares not otherwise represented at the meeting will have no effect on the outcome of this proposal. Brokers are not entitled to vote on Proposal 6 if not furnished voting instructions by their client. As a result, brokernon-votes will have no effect on the outcome of Proposal 6. The voteVoting for Proposal 6 is being conducted on an advisory basis and, therefore, the voting results will not be binding on the Company.
With respect to “Proposal 7—Company Proposal to Amend the Company’s Restated Certificate of Incorporation to Allow Amendment toBy-Laws Granting Stockholders Holding 25% or More the Ability to Call Special Meetings of Stockholders,” if Proposal 5 passes and we file the related amendment to the Company’s Restated Certificate of Incorporation during the annual meeting prior to voting on Proposal 7, the affirmative vote of holders of at least 50% of the voting power of all shares of capital stock of the Company entitled to vote generally for the election of directors is required for approval. If Proposal 5 does not pass or if we do not file the amendment to the Company’s Restated Certificate of Incorporation during the annual meeting, the affirmative vote of holders of at least66-2/3% of the voting power of all shares of capital stock of the Company entitled to vote generally for the election of directors is required for approval. Abstentions will have the same effect as a vote against this proposal, whereas shares not otherwise represented at the meeting will have no effect on the outcome of this proposal. Brokers are not entitled to vote on Proposal 7 if not furnished voting instructions by their client. As a result, brokernon-votes will have no effect on the outcome of Proposal 7.
The Board unanimously recommends that you vote:
14
ELECTION OF DIRECTORS
General
Our Board is currently comprised of the following 11 members: Jenne K. Britell,directors: José B. Alvarez, Marc. A Bruno, Larry D. De Shon, Matthew J. Flannery, Bobby J. Griffin, Kim Harris Jones, Terri L. Kelly, Michael J. Kneeland, Singleton B. McAllister, Brian D. McAuley, John S. McKinney, Jason D. Papastavrou, Filippo Passerini, DonaldFrancisco J. Lopez-Balboa, Gracia C. RoofMartore and Keith Wimbush.Shiv Singh. All directors, except for Mr. Lopez-Balboa, were elected annuallyat the 2022 annual meeting forone-year terms, which expire at the 2017 annual meeting.Annual Meeting. Mr. Lopez-Balboa was appointed to the Board on October 7, 2023, and his term expires at the Annual Meeting.
The Board, upon the recommendation of our Nominating and Corporate Governancethe N&CG Committee, has nominated eightall current directors Jenne K. Britell, José B. Alvarez, Bobby J. Griffin, Michael J. Kneeland, Singleton B. McAllister, Jason D. Papastavrou, Filippo Passerini and Donald C. Roof, to stand forre-election at the 2017 annual meeting, and one new director, Shiv Singh, to stand for election at the 2017 annual meeting.Annual Meeting: José B. Alvarez, Marc A. Bruno, Larry D. De Shon, Matthew J. Flannery, Bobby J. Griffin, Kim Harris Jones, Terri L. Kelly, Michael J. Kneeland, Francisco J. Lopez-Balboa, Gracia C. Martore and Shiv Singh. Each director elected at the 2017 annual meetingAnnual Meeting will hold office until our 20182024 annual meeting of stockholders (the “2024 Annual Meeting”) and, subject to the resignation policy described below, until such director’s successor is elected and qualified. As part of our board refreshment efforts, three current directors, Brian D. McAuley, John S. McKinney and Keith Wimbush, will not stand forre-election, and immediately following the 2017 annual meeting, the size of our Board will be reduced to 9 members until Ms. Martore retires from TEGNA. We thank Mr. McAuley, Mr. McKinney and Mr. Wimbush for their years of service on the Board and their dedication to the Company.
Voting
OurBy-Laws require a director to be elected by a majority of votes cast with respect to such director in uncontested elections. The number of votes cast “for” a director must exceed the number of votes cast “against” that director. Abstentions and shares not represented at the meeting have no effect on the election of directors. Directors will continue to be elected by a plurality of votes cast in contested elections. A “contested election” takes place at any meeting in respect of which (i) our corporate secretaryCorporate Secretary receives a notice pursuant to ourBy-Laws that a stockholder intends to nominate a director or directors and (ii) such proposed nomination has not been withdrawn by such stockholder on or prior to the tenth10th day preceding the date on which the Company first mails its notice of meeting for such meeting to its stockholders.
If a nominee who is serving as a director is not elected at the annual meeting,Annual Meeting, under Delaware law, the director would continue to serve on the Board as a “holdover director” until his or her successor is elected and qualified. However, under our Corporate Governance Guidelines, any director who fails to be elected by a majority vote must offer to tender his or her resignation to the Board on the date of the certification of the election results. The Nominating and Corporate GovernanceN&CG Committee will then consider the resignation offer and make a recommendation to the Board on whether to accept or reject the resignation, or whether other action should be taken. The Board will accept such resignation unless it determines that the best interests of the Company and its stockholders would not be served in doing so. The Board will act on the Nominating and Corporate GovernanceN&CG Committee’s recommendation within 90 days from the date of the certification of the election results, unless such action would cause the Company to fail to comply with any requirement of the NYSE or any rule or regulation under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), in which event the Company will take action as promptly as is practicable while continuing to meet those requirements. The Board will promptly disclose its decision and the rationale behind it in a Form8-K report furnished to the Securities and Exchange Commission (“SEC”). The director who offers to tender his or her resignation will not participate in the Nominating and Corporate GovernanceN&CG Committee’s recommendation or in the Board’s decision.
If a nominee who is not already serving as a director is not elected at an annual meeting,Annual Meeting, under Delaware law, that nominee would not be a “holdover director” and the process described above would not apply.
EightAll 11 of the nominees for election at the 2017 annual meetingAnnual Meeting are currently serving on the Board. Each person nominated has agreed to continue to serve if elected. If any nominee becomes unavailable for any reason to serve as a director at the time of the annual meeting,Annual Meeting, then the shares represented by each proxy may be voted for such other person as may be determined by the holders of such proxy.
The Board unanimously recommends a vote FOR the election of each of Drs. BritellMses. Harris Jones, Kelly and Papastavrou, Ms. McAllisterMartore and Messrs. Alvarez, Bruno, De Shon, Flannery, Griffin, Kneeland, Passerini, RoofLopez-Balboa and
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Singh to hold office until the 2018 annual meeting of stockholders2024 Annual Meeting (designated as Proposal 1) and until such director’s successor is elected and qualified.
Information Concerning DirectorsDirector Nominees and Board Consideration of Director Nominee Experience and Qualifications
In addition to the independence matters described under “Corporate Governance Matters – Matters—Director Independence”,Independence,” the Board and the Nominating and Corporate GovernanceN&CG Committee considered the specific qualifications, experience, qualifications,skills, background, judgment, diversity and other attributes and skills of the directorsdirector nominees named herein and concluded that based on the aforementioned factors, and including each director’sdirector nominee’s demonstrated business acumen, ability to exercise sound judgment, integrity and collegiality, such directorsindividuals should serve as directors of the Company. Following, for
Director Skills and Diversity Matrix
The matrix below presents the prioritized competencies possessed by each director nominee,and certain demographic information. This matrix is intended to provide a summary of our director nominees’ qualifications and demographics and is not a complete list of each director nominee’s strengths or contributions to the Board. Additional details on each director nominee’s experiences, qualifications, skills and attributes are set forth in their biographies. Following the matrix are definitions of each of the Board’s prioritized competencies.
|
Alvarez |
Bruno |
De Shon |
Flannery |
Griffin |
Jones |
Kelly |
Kneeland |
Lopez-Balboa |
Martore |
Singh |
Total/Average | |
Skills and Experience |
|
|
|
|
|
|
|
|
|
|
|
| |
| Public Company CEO |
|
| ● | ● |
|
|
| ● |
| ● |
| 4 |
| P&L Owner | ● | ● | ● | ● | ● |
| ● | ● | ● | ● |
| 9 |
| Financial Acumen & Capital Market Experience |
|
|
| ● | ● | ● |
| ● | ● | ● |
| 6 |
| Digital |
|
| ● |
|
|
|
|
|
| ● | ● | 3 |
| Sales & Marketing | ● | ● | ● | ● |
|
|
| ● |
| ● | ● | 7 |
| Product Development & Distribution | ● | ● | ● | ● | ● |
| ● | ● |
| ● | ● | 9 |
| Rental Industry |
|
| ● | ● | ● |
|
| ● |
|
|
| 4 |
| Capital Intensive Industry | ● |
| ● | ● | ● | ● | ● | ● | ● | ● |
| 9 |
| International Experience | ● | ● | ● |
| ● | ● | ● |
|
|
| ● | 7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demographics |
|
|
|
|
|
|
|
|
|
|
|
| |
African American or Black |
|
|
|
| ● | ● |
|
|
|
|
| 2 | |
Alaskan Native or Native American |
|
|
|
|
|
|
|
|
|
|
| 0 | |
Asian |
|
|
|
|
|
|
|
|
|
| ● | 1 | |
Hispanic | ● |
|
|
|
|
|
|
| ● |
|
| 2 | |
Native Hawaiian or Pacific Islander |
|
|
|
|
|
|
|
|
|
|
| 0 | |
White |
| ● | ● | ● |
|
| ● | ● |
| ● |
| 6 | |
LGBTQ+ |
|
|
|
|
|
|
|
|
|
|
| 0 | |
Age | 60 | 51 | 63 | 58 | 74 | 63 | 61 | 69 | 62 | 71 | 45 | 61 | |
Gender Identity | M | M | M | M | M | F | F | M | M | F | M | 3F/8M | |
|
|
|
|
|
|
|
|
|
|
|
|
|
16
|
Alvarez |
Bruno |
De Shon |
Flannery |
Griffin |
Jones |
Kelly |
Kneeland |
Lopez-Balboa |
Martore |
Singh |
Total/Average |
Tenure and Independence |
|
|
|
|
|
|
|
|
|
|
|
|
Tenure (years) | 13 | 4 | 1 | 3 | 13 | 4 | 4 | 14 | 0(1) | 5 | 5 | 6 |
Independence | ● | ● | ● |
| ● | ● | ● |
| ● | ● | ● | 9 |
Tenure 6 years average tenure of nominees | Age 61 years average age of nominees | Gender 27% of nominees self-identify as women | Racial/Ethnic Diversity 45% of nominees self-identify as racially/ethnically diverse |
Definitions of Prioritized Competencies
| Public Company CEO | Current or recently retired CEO of a public company of scale |
| P&L Owner | A President or executive with P&L ownership in a company of scale with experience and a strong ability to think strategically and critically assess and act on opportunities and threats (experience in M&A integration a plus). Able to develop effective strategies in the context of macroeconomic conditions |
| Financial Acumen & Capital Market Experience | A current or retired (last ten years) CFO, banker or public company qualified financial expert or recently retired audit partner from a big four accounting firm with experience in accounting, reporting, capital allocation, financial markets, M&A and post-merger integration |
| Digital | Executives with a millennial/next generation “futurist” mindset as well as an understanding of social media, e-commerce and leveraging technology platforms for business innovation and transformation |
| Sales & Marketing | A chief marketing officer or other senior executive with experience leading and executing sales and marketing strategies in a business-to-business environment with an industrial business, with preference for those that have developed digital strategies |
| Product Development & Distribution | A current or retired executive with experience in either: (i) designing, developing, and marketing newly-created products and services; or (ii) managing highly complex logistics and supply chains |
| Rental Industry | A current or retired executive from the equipment rental industry (or relevant major customer, original equipment manufacturer, or related industry) with a strong understanding of its operations (including multi-location complexity, logistics, distribution and supply chain) and ideally deep insight into the non-residential construction business |
| Capital Intensive Industry | Experience as a C-level executive (preference for a P&L owner) working in a capital-intensive industry where utilization of capital equipment is a key business driver (e.g. airlines, rental cars); service vs. equipment mentality |
| International Experience | Experience leading (as a P&L owner) a global business and understanding the challenges of entering new markets and navigating local and regional geopolitical sensitivities, especially in Asia and Europe |
17
Individual Director Biographies
The following is a summary of the age, period of service as a director, current committee membership, business experience, attributes and skills and other directorships.directorships for each director nominee.
| ||
Independent Director
Age: 60
Director Since:
Board Committees: • N&CG
| • Strategy | BACKGROUND:
|
|
ATTRIBUTESAND SKILLS: Mr. Alvarez OTHER PUBLIC COMPANY DIRECTORSHIPS: Mr. Alvarez also serves as a director of The TJX Companies, Inc. from 2011 to 2013. |
Marc A. Bruno | ||
Independent Director Age: 51 Director Since: 2018 Board Committees: • Compensation • N&CG | BACKGROUND: Mr. Bruno is the Chief Operating Officer, U.S. Food and Facilities for Aramark Corporation (“Aramark”), a role he has held since 2019, and leads Aramark’s ten US food and facilities businesses, driving the Company’s hospitality culture and growth. Since joining Aramark as a campus hire, Mr. Bruno has risen through the ranks by serving in a variety of sales and operating roles in the U.S. and internationally. Mr. Bruno also leads Aramark’s Olympic projects, for which the company has served as the dining and catering services provider for 17 Olympic Games. His involvement with the project spans eight Olympics, dating back to the 1996 Atlanta Games. In 2010, SportsBusiness Journal named Mr. Bruno to its annual global list of “Forty Under 40,” recognizing the best and brightest young executives in the sports business industry. Mr. Bruno is a graduate of the Cornell University School of Hotel Administration and earned an MBA from the Harvard Business School. Mr. Bruno serves on the board of directors of Special Olympics of Pennsylvania and Alex’s Lemonade Stand Foundation. |
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Previously, Mr. Bruno served on the board of directors of the San Antonio Spurs and Boston University School of Hospitality. ATTRIBUTESAND SKILLS: Mr. Bruno has extensive P&L oversight and reports directly to the Chief Executive Officer of Aramark. In addition to logistics operations, he has also overseen construction projects at Aramark. Over the course of his career, Mr. Bruno has successfully demonstrated Aramark’s commitment to service excellence and played a vital role in earning new business. OTHER PUBLIC COMPANY DIRECTORSHIPS: None. |
Larry D. De Shon | |
Independent Director Age: 63 Director Since: 2021 Board Committees: • N&CG • Strategy | BACKGROUND: Mr. De Shon’s career spans more than 40 years in the aviation and transportation industries, most recently as President and Chief Executive Officer of Avis Budget Group, Inc. (“Avis”), a role he held from January 2016 until his retirement in December 2019. Prior to this and beginning in October 2006, he served as President of Avis Budget Group International, among other positions, with oversight of the Avis, Budget, Zipcar, Payless, Maggiore and Apex businesses in Europe, the Middle East, Africa, Asia, Australia and New Zealand. Prior to Avis, he served in various executive roles during 28 years with UAL Corporation (now United Continental Holdings, Inc.) where he led United Airlines’ global airport operations, including safety, customer service, logistics, product development and internal communications. ATTRIBUTESAND SKILLS: Mr. De Shon has extensive leadership and corporate governance experience, deep operating skills and international expertise. While at Avis, he was instrumental in leading an organizational transformation to respond to changing consumer preferences and to open up new revenue streams and business models through initiatives that included creating the first end-to-end digital car rental experience and building one of the largest connected car fleets in the world. Mr. De Shon also successfully led Avis through times of disruption and global transformations, developed innovative solutions to strengthen positions in the marketplace and modernized systems for better customer and employee experiences. Mr. De Shon’s background and experience as a public company chief executive officer provide him with the leadership, business, financial, governance, management and digital skills that will benefit the Company and the Board. Mr. De Shon holds degrees in communications and sociology from the University of Missouri. OTHER PUBLIC COMPANY DIRECTORSHIPS: Mr. De Shon also serves as a director of The Hartford Financial Services Group, Inc. and Air New Zealand Limited. |
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Matthew J. Flannery | |
Director, President and CEO Age: 58 Director Since: 2019 Board Committees: • Strategy | BACKGROUND: Mr. Flannery was appointed to the position of Chief Executive Officer of United Rentals, and was elected as a director of the Company, in May 2019, while remaining as President, a position he has held since March 2018. From April 2012 until March 2018, he was Executive Vice President and Chief Operating Officer. Mr. Flannery has extensive experience in all areas of the Company’s operations, having previously served as Executive Vice President—Operations and Sales, Senior Vice President—Operations East and in two regional vice president roles in aerial operations. Mr. Flannery has also served as a district manager, district sales manager and branch manager of the Company. Mr. Flannery joined the Company in 1998 as part of the Company’s acquisition of Connecticut-based McClinch Equipment. Mr. Flannery graduated from Hofstra University. ATTRIBUTESAND SKILLS: Mr. Flannery has over three decades of sales, management and operations experience in the rental industry, including a number of senior management positions with the Company. He has extensive experience and knowledge in all areas of the Company’s operations and of the competitive environment in which the Company operates. Further, he has demonstrated strategic, operational and financial acumen that the Board believes has been of significant value to the Company. OTHER PUBLIC COMPANY DIRECTORSHIPS: None. |
Bobby J. Griffin | ||
Lead Independent Director Age: Director Since: 2009 Board Committees: • N&CG
| BACKGROUND: Mr. Griffin has served as a director of the Company since January 2009 and was appointed Lead Independent Director in May 2019. From March 2005 to March 2007, Mr. Griffin served as ATTRIBUTESAND SKILLS: Mr. Griffin has notable business experience in the areas of transportation, logistics and supply chain management, including extensive international experience, due to his past senior leadership positions with Ryder System, Inc. In addition to these attributes, Mr. Griffin’s public company directorship experience provides a valuable perspective for the Board and the Company. OTHER PUBLIC COMPANY DIRECTORSHIPS: As of March 2023, Mr. Griffin also serves as a director of Hanesbrands Inc., WESCO International, Inc. and Atlas Air Worldwide Holdings, Inc. |
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Kim Harris Jones | |
Independent Director Age: 63 Director Since: 2018 Board Committees: • Audit • Compensation | BACKGROUND: Ms. Harris Jones most recently served as Senior Vice President and Corporate Controller of Mondelez International (“Mondelez”) from 2012 until 2015. She previously served as Senior Vice President and Corporate Controller at Kraft Foods Inc. from 2009 until 2012 before Mondelez was formed by Kraft’s split into two domestic and international publicly-traded corporations. Prior to her time at Kraft, Ms. Harris Jones had a 17-year career at Chrysler LLC, where she started as a Senior Manager, Labor Relations in Benefits Finance then served in a variety of leadership positions, most notably as Senior Vice President and Corporate Controller from 2008 to 2009. Before Chrysler, she spent six years at General Motors. Ms. Harris Jones earned a BBA in accounting and an MBA in finance from the University of Michigan. Ms. Harris Jones serves on the board of Ethiopian North American Health Professionals Association and the finance committee of the Consortium for Graduate Study in Management and is a member of the Executive Leadership Council. ATTRIBUTESAND SKILLS: Ms. Harris Jones was named to the list of “25 Women to Watch” by CFO Magazine, to the list of “75 Most Powerful Women in Business” by Black Enterprise Magazine and to the list of “The 2021 Most Influential Black Corporate Directors” by Savoy magazine. She is an experienced former finance executive who has spent time in automotive and consumer businesses. More recently, she has accumulated experience as a board director. Ms. Harris Jones has extensive management, financial and business experience at large complex corporations undergoing significant corporate growth and change. OTHER PUBLIC COMPANY DIRECTORSHIPS: Ms. Harris Jones also serves as a director of and Fossil Group, Inc. |
Terri L. Kelly | ||
Independent Director Age: 61 Director Since: 2018 Board Committees: • Compensation • N&CG • Strategy | BACKGROUND: Ms. Kelly is the former President and CEO of W.L. Gore & Associates (“Gore”), a highly innovative, privately-held family-owned enterprise with more than $3 billion in annual revenues, serving in this capacity from 2005 to 2018. Gore specializes in advanced materials that are utilized in a wide array of high-value products including GORE-TEX® fabric, implantable medical devices, venting products, and electronic cables. Gore is well known for its unique management philosophy and culture, and is consistently recognized as a top workplace across the globe. Ms. Kelly joined Gore as an Engineer in 1983 and has expertise across multiple industries including consumer products, defense, industrial, medical devices, and pharmbio. As CEO, she led this global organization of close to 10,000 associates with over 45 manufacturing and sales locations. Ms. Kelly graduated summa cum laude from the University of Delaware with a bachelor’s degree in mechanical engineering. Ms. Kelly serves as a Trustee of the Alfred I. duPont Charitable Trust, whose beneficiary is the Nemours Foundation (one of the nation’s leading children’s health systems), and serves as a Trustee for the University of Delaware. She is also a member of the Management Executive Society and the International Women’s Forum. She previously |
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served as a member of the Economic and Advisory Council for the Federal Reserve Bank of Philadelphia ATTRIBUTESAND SKILLS: Ms. Kelly has strong business and technical acumen with key competencies in creating a collaborative and empowered work environment to achieve successful business outcomes. She is adept at leading an organization through significant transformation, and evolving the culture and behaviors to meet changing business needs. Ms. Kelly possesses strong organizational and communication skills with experience integrating across multiple functions to maximize success. Her other areas of expertise include new product development, innovation, portfolio management, brand management, associate engagement and leadership development. OTHER PUBLIC COMPANY DIRECTORSHIPS: Ms. Kelly also serves as a Supervisory Board member of ASML, a manufacturer of semiconductor equipment based in the Netherlands. |
Michael J. Kneeland | ||
Director and Chair
Director Since: 2008 Board Committees:
| BACKGROUND:
In 2020, Mr. Kneeland ATTRIBUTESAND SKILLS: Mr. Kneeland served in a variety of positions in the equipment rental industry for over |
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strategic and operational acumen that the Board believes has been of significant value to the Company. OTHER PUBLIC COMPANY DIRECTORSHIPS:
2019. |
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Independent Director Age: Director Since: Board Committees:
• Audit | • Compensation | BACKGROUND:
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Mr. |
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ATTRIBUTESAND SKILLS: Mr. Lopez-Balboa’s finance, leadership and operational expertise, as well as his understanding of dynamics of scale and customer service in a large networked business oriented toward growth, will benefit the Company and the Board. OTHER PUBLIC COMPANY DIRECTORSHIPS: None. |
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Gracia C. Martore | |
Independent Director Age: 71 Director Since: 2017 Board Committees: • Audit • Compensation | BACKGROUND: Ms. Martore most recently served as President and Chief Executive Officer and director of
ATTRIBUTESAND SKILLS: Ms. Martore has financial expertise, broad business experience and OTHER PUBLIC COMPANY DIRECTORSHIPS: Ms. Martorealso serves as a director of Omnicom Group, Inc. and WestRock Company. |
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Shiv Singh | ||
Independent Director Age: Director Since: Board Committees: • Audit
| • N&CG • Strategy | BACKGROUND: Mr. Singh ATTRIBUTESAND SKILLS: Mr. Singh has significant experience in marketing, OTHER PUBLIC COMPANY DIRECTORSHIPS: None. |
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EXECUTIVE OFFICERS
General
The tabletables below identifies,identify, and providesprovide certain information concerning, our current executive officers other than our chief executive officercurrent President and CEO, whose information is included above.
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Executive Vice President and Chief Age: Current Position Since: 2019 With Company Since: 1998 | Mr. |
Executive Vice President and Chief Operating Officer
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Executive Vice President—Business Services and Chief Information Officer
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William E. (Ted) Grace | ||
Executive Vice President and Chief Financial Officer Age: 51 Current Position Since: 2022 With Company Since: 2016 | William (Ted) Grace was appointed Executive Vice President and Chief Financial Officer in November 2022, after having served as the Company’s Interim Chief Financial Officer since July 2022. In his current role, Mr. Grace is responsible for oversight of the Company’s accounting, treasury, risk management and financial planning and analysis departments and investor relations. He previously served as the Company’s Vice President of Investor Relations since joining the Company in 2016, with responsibility for managing all aspects of communications between the Company’s leadership and its investors and the broader financial community. Since joining the Company, he has been an integral member of the senior corporate finance leadership team contributing across financial planning and analysis, capital markets, mergers and acquisitions, and capital allocation. Prior to joining the Company, Mr. Grace spent over 20 years in financial services, most recently as a research analyst at Susquehanna International Group covering the industrial machinery and building materials sectors. He previously held the same responsibilities at Avondale Partners and Goldman Sachs & Co. Earlier in his career, he served in the investment banking departments of predecessor organizations at Bank of America and JPMorgan Chase & Co. Mr. Grace holds BA degrees in economics and political science from Bucknell University and an M.B.A. from Cornell University. |
Craig A. Pintoff | ||
Executive Vice
Age: 53
Current Position Since: 2017 With Company Since: 2003 | Mr. Pintoff was promoted to |
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Age: Current Position Since: 2018 With Company Since: 2017 |
accountant, received a degree in business administration from the University of Vermont. |
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BOARD MATTERS
General
Our Board is currently comprised of the following 11 members: Jenne K. Britell,directors: José B. Alvarez, Marc A. Bruno, Larry D. De Shon, Matthew J. Flannery, Bobby J. Griffin, Kim Harris Jones, Terri L. Kelly, Michael J. Kneeland, Singleton B. McAllister, Brian D. McAuley, John S. McKinney, Jason D. Papastavrou, Filippo Passerini, DonaldFrancisco J. Lopez-Balboa, Gracia C. RoofMartore and Keith Wimbush. All directors are elected annually forone-year terms.
Shiv Singh. The Board, upon the recommendation of the Nominating and Corporate Governance Committee (the “N&CG Committee”), has nominated Drs. Britell and Papastavrou, Ms. McAllister and Messrs. Alvarez, Griffin, Kneeland, Passerini and Roof to stand forre-election at the annual meeting. In addition, as a result of the Board’s board refreshment project, the Board, upon recommendation of the N&CG Committee, has nominated Mr. Singhall of the current directors to stand for election as a new director.re-election. All directors will be elected annually for one-year terms.
New Director to be Appointed After Annual Meeting
Our Board intends to appoint Gracia C. Martore as a director after the Company’s annual meeting of stockholders. Ms. Martore is currently President and Chief Executive Officer of TEGNA Inc., but is expected to retire in the first half of 2017. Because Ms. Martore sits on another public company’s board of directors, she is not available to join our Board until she retires from TEGNA. While we are unable to include Ms. Martore as a director nominee in this Proxy Statement, we are including disclosure about the planned post-meeting director appointment to be transparent with our stockholders and to highlight our continued focus on board refreshment.
Ms. Martore was appointed President and Chief Executive Officer of TEGNA, formerly known as Gannett Co., Inc., in October 2011. Prior to that and beginning in 1985, she served in various other management positions with TEGNA, including as President and Chief Operating Officer and Executive Vice President and Chief Financial Officer. It has been announced that Ms. Martore will retire from TEGNA inmid-2017. Prior to TEGNA, Ms. Martore worked for 12 years in the banking industry. Ms. Martore has financial expertise, broad business experience and extensive management, leadership and operational expertise as a result of her 32 years of experience in a variety of senior leadership roles at TEGNA. Ms. Martore’s background, experience and judgment as chief executive officer and chief financial officer of a major publicly traded company provide her with leadership, business, financial and governance skills that will benefit the Company and its board of directors. Ms. Martore is also a director of TEGNA Inc., WestRock Company, The Associated Press and FM Global. In July 2016, she was also elected to the Board of Trustees of Wellesley College.
Meetings of the Board and its Committees
During 2016,2022, the Board met fiveseven times. During 2016,2022, each then-current member of the Board attended 100% of the aggregate of (i) the total number of Board meetings held during the period for which he or she was a director and (ii) the total number of meetings of each committee of the Board on which the director served during the period for which he or she was on the committee, except for one director who attended 93.75%95% of the aggregate of (x) the total number of Board meetings held during the period for which heshe was a director and (y) the total number of meetings of each committee of the Board on which heshe served during the period for which heshe was on the committee.
Committees of the Board
The following table summarizes the current composition (as of March 22, 2023) of the four current standing committees of the Board: the Audit Committee, the Compensation Committee, the N&CG Committee, and the Strategy Committee. Our Chairman, Dr. Britell,Board Chair is not a member of any of the Board’s standing committees. However, shethe Board Chair usually attends meetings of the Board’s committees, as all directors are invited.
Audit Committee | Compensation Committee | N&CG Committee | Strategy Committee | |||||||||||
José B. Alvarez | Chair | X | ||||||||||||
Marc A. Bruno | X | X | ||||||||||||
Larry D. De Shon | X | X | ||||||||||||
Matthew J. Flannery | X | |||||||||||||
Bobby J. Griffin | X | |||||||||||||
| Chair | X | ||||||||||||
| X | X | Chair | |||||||||||
| X | X | ||||||||||||
| X | Chair | ||||||||||||
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| X | |||||||||||||
| ||||||||||||||
| X | X |
Compensation Committee Interlocks and Insider Participation
None of the current members of the Compensation Committee has ever been an officer or employee of the Company or its subsidiaries or had any relationship with the Company requiring disclosure as a related party transaction under applicable rules of the SEC. During fiscal year 2016,2022, none of our executive officers served as a member of the compensation committee of another entity, one of whose executive officers served on our Compensation Committee; none of our executive officers served as a director of another entity, one of whose executive officers served on our Compensation Committee; and none of our executive officers served as a member of the compensation committee of another entity, one of whose executive officers served as a member of our Board.
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Audit Committee
We have a separately-designated Audit Committee established in accordance with the Exchange Act. The Audit Committee operates pursuant to a charter that complies with the corporate governance standards of the NYSE. You can access this document on our website athttp://www.unitedrentals.com (under “Corporate Governance” in the Our Company—Investor Relations section) (go to “Company” tab → “Investor Relations” → “Governance”) or in print upon written request to our corporate secretaryCorporate Secretary at United Rentals, Inc., 100 First Stamford Place, Suite 700, Stamford, Connecticut 06902.
The general purposespurpose of the Audit Committee areis to:
The Audit Committee also has the sole authority to appoint or replace the independent auditorregistered public accounting firm (subject if applicable, to stockholder ratification) and to approve compensation arrangements for the independent auditor.
The current members of the Audit Committee are Dr. Papastavrou and Messrs. Griffin, McKinney, Passerini and Roof.shown in the table on page 28. Each member of the Audit Committee meets the general independence requirements of the NYSE and the additional independence requirements for audit committees specified by Rule10A-3 under the Exchange Act. The Board has determined that each of Messrs. Griffin, McKinneyMses. Harris Jones and RoofMartore and Dr. PapastavrouMr. Lopez-Balboa qualifies as an “audit committee financial expert” as defined by the SEC and has “accounting or related financial management expertise” within the meaning of the corporate governance standards of the NYSE, and that each member of the Audit Committee is financially literate within the meaning of the corporate governance standards of the NYSE.
In 2016,2022, the Audit Committee met six times.
Compensation Committee
The Compensation Committee operates pursuant to a charter that complies with the corporate governance standards of the NYSE. You can access this document on our website athttp://www.unitedrentals.com (under “Corporate Governance” in the Our Company—Investor Relations section) (go to “Company” tab → “Investor Relations” → “Governance”) or in print upon written request to our corporate secretaryCorporate Secretary at United Rentals, Inc., 100 First Stamford Place, Suite 700, Stamford, Connecticut 06902.
The general purpose of the Compensation Committee is to to:
For additional information concerning the Compensation Committee, see “Executive Compensation—Compensation Discussion and Analysis.”
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The current members of the Compensation Committee are Messrs. Wimbush, Passerini and Roof and Ms. McAllister. Effective March 8, 2017, Mr. Roof replaced Mr. Wimbush as Chairman.shown in the table on page 28. Each member of the Compensation Committee meets the independence requirements of the NYSE. In addition, each member qualifies as an “outsidea “non-employee director” within the meaning of Internal Revenue Code Section 162(m) and as a“non-employee director” within the meaning of Rule16b-3 under the Exchange Act.
The Compensation Committee may select and retain outside compensation consultants to advise with respect to director, chief executive officerCEO or executive officer compensation; it may also terminate engagements with outside compensation consultants. The Compensation Committee also has the authority to obtain advice and assistance from internal or external legal, accounting and other advisors. Although the Company pays for any compensation consultant, the Compensation Committee, in its sole discretion, approves the fees and other terms related to the consultant’s engagement. The Compensation Committee’s use of compensation consultants is described below under the “Executive Compensation—Compensation Discussion and Analysis.”Analysis” section of this Proxy Statement.
The Compensation Committee may delegate all or any portion of its duties and responsibilities to a subcommittee consisting of one or more members of the Compensation Committee.
In 2016,2022, the Compensation Committee met fivesix times.
Nominating and Corporate GovernanceN&CG Committee
The N&CG Committee operates pursuant to a charter that complies with the corporate governance standards of the NYSE. You can access this document on our website athttp://www.unitedrentals.com (under “Corporate Governance” in the Our Company—Investor Relations section) (go to “Company” tab → “Investor Relations” → “Governance”) or in print upon written request to our corporate secretaryCorporate Secretary at United Rentals, Inc., 100 First Stamford Place, Suite 700, Stamford, Connecticut 06902.
The general responsibilitiespurpose of the N&CG Committee include:is to:
For additional information concerning this committee, see “Corporate Governance Matters—Director Nomination Process.”
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The current members of the N&CG Committee are Messrs. McAuley, Alvarez, Griffin (since July 20, 2016), McKinney, Roof (since July 20, 2016) and Wimbush. Effective March 8, 2017, Mr. Alvarez replaced Mr. McAuley as Chairman.shown in the table on page 28. Each member of the N&CG Committee meets the independence requirements of the NYSE.
In 2016,2022, the N&CG Committee met sevenfour times.
Strategy Committee
Pursuant to its charter, theThe Strategy Committee assists management and the Board in overseeing the development and facilitatingimplementation of the Company’s corporate strategy. You can access the Strategy Committee’s charter on our website at http://www.unitedrentals.com (go to “Company” tab → “Investor Relations” → “Governance”) or in print upon written request to our Corporate Secretary at United Rentals, Inc., 100 First Stamford Place, Suite 700, Stamford, Connecticut 06902.
The general purpose of the Strategy Committee is to:
The current members of the Strategy Committee are Messrs. Griffin, Alvarez and Kneeland and Ms. McAllister.shown in the table on page 28.
In 2016,2022, the Strategy Committee met three times.
Risk Oversight
The Board has overall responsibility for risk oversight, including, as a part of regular Board and committee meetings, general oversight of the way the Company’s executives manage risk. A fundamental part of risk oversight is not only understanding the material risks the Company faces and the steps management is taking to manage those risks, but also understanding what level of risk is appropriate for the Company. Our Board’s involvement in reviewing our business strategy is integral to the Board’s assessment of management’s tolerance for risk and also its determination of what constitutes an appropriate level of risk for the Company. As part of its risk oversight responsibility, the Board regularly covers legal and regulatory matters; finance; compensation; cybersecurity; and climate, environmental, health and safety concerns, among others. The Board has also empowered its committees with risk oversight responsibilities as noted below.
The Compensation Committee has responsibility for reviewing incentive compensation arrangements to confirm that incentive pay does not encourage unnecessary risk taking and oversees the relationship between risk management policies and practices, corporate strategy and senior executive compensation.
The Audit Committee shares responsibility for risk management with senior management and the Company’s Enterprise Risk Management Council (the “ERM Council”), which is comprised of senior representatives from field operations and from each of the primary corporate functions. Risks are initially identified by each department and then communicated to senior management and the ERM Council for the development of appropriate risk management programs and policies which are subsequently implemented at the department or other appropriate level within the Company. The Audit Committee oversees the process by which management identifies and assesses the Company’s exposure to risk including(including, but not limited to, financial risk and cybersecurity risk), helps ensure that the risk management infrastructure established by management is capable of managing those risks. In addition, the Audit Committee periodically reviews and assesses critical risk management policies and infrastructure implemented by managementrisks and recommends improvements where appropriate.as needed. The Audit Committee coordinates communications regarding risk among the various Board committees and keeps risk on both the full Board’s and management’s agenda on a regular basis.
The Compensation Committee has responsibility for overseeing the assessment of risks related to the Company’s compensation policies and programs, including reviewing incentive compensation
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arrangements to confirm that incentive pay does not encourage unnecessary risk taking. The Compensation Committee also oversees the relationship between risk management policies and practices, corporate strategy and senior executive compensation.
The N&CG Committee has responsibility for reviewing the Company’s ESG policies and practices, including review of related current and emerging trends that may affect the Company’s business activities, performance or reputation. The N&CG Committee is also responsible for reviewing, as needed, risks related to corporate governance, and corporate social responsibility matters and providing guidance to the Board and management with respect to those risks.
In addition to the work done by the Compensation Committee, Audit Committee, ERM Council and senior management, the Company’s Internal Audit department conducts an annual risk assessment. Such assessment consists of reviewing the risks identified by the Audit Committee and the ERM Council, as well as risks identified during the prior year’s risk assessment and the audit work performed during the year. In addition, the Internal Audit department collaborates with the ERM Council to identify discrete risks and common risk themes to be considered in developing the internal audit plan.
The Board, Audit Committee, ERM Council and senior management also devote significant resources to cybersecurity and risk management processes to adapt to the changing cybersecurity landscape and respond to emerging threats in a timely and effective manner. This includes, but is not limited to, taking steps to reduce the potential for fraud and service disruptions. The Company has been focused on, among other matters, expandingcontinued to expand investments in information technology security, expandingincluding additional end-user training, using layered defenses, identifying and protecting critical assets, strengthening monitoring and alerting, and engaging experts. We also continuously test defenses by performing simulations and drills at both a technical and management level. Further, we conduct external assessments of our cybersecurity capabilities annually. These tests and assessments are useful tools for ensuring that we maintain a robust cybersecurity program to protect our investors, customers, employees, vendors, and intellectual property. The Company’s Chief Information Officer is responsible for developing and implementing an information security program and reporting on cybersecurity matters to the Board.
In addition to cybersecurity, we value customer and employee privacy and have implemented various policies and procedures that are designed to protect the data we collect. Our multi-layered approach to data privacy and security is designed to identify and mitigate the risk of potential threats through regular testing of our systems, use of the latest software and tools and tabletop incident simulations. Our privacy policy describes how we use and disclose the data we collect, and provides options for controlling personal data, including opting-out, accessing, updating or deleting it. We regularly review our policy to ensure compliance with all applicable data privacy regulations throughout the world. In recognition of the importance of data protection to our operations, we have implemented measures designed to safeguard the security, confidentiality and privacy of personal information. The Company’s General Counsel is responsible for our global privacy program and works closely with outside privacy counsel and a cross functional internal team, including our IT security team, our manager of compliance and our data privacy officer for the European Union, to develop and implement strategies and processes to protect customers’ and employees’ data and information in compliance with applicable privacy laws and our privacy policy. Further information can be found on our website at: www.unitedrentals.com/legal/privacy-policy.
The Audit Committee performs an annual review of the Company’s cybersecurity program, which includes discussion of management’s actions to identify and detect threats, as well as planned actions in the event of a response or recovery situation. The Audit Committee’s annual review also includes review of recent enhancements to the Company’s defenses and engaging experts.management’s progress on its cybersecurity strategic roadmap. In addition, the Board receives quarterly reports on cybersecurity, which include a review of key performance indicators, test results and related remediation, and recent threats and how the Company is managing those threats. Further, at least annually, the Board receives updates on the Company’s Crisis Management Plan which covers, among other things, potential cybersecurity incidents, data privacy and its compliance programs. To aid the Board with its cybersecurity and data privacy oversight responsibilities, the Board periodically hosts experts for presentations on these topics, as discussed below under “Director Orientation and Continuing Education.”
Senior management and the Board and its committees also devote significant resources to the identification and management of climate-related risks, as well as climate-related opportunities.
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Management is currently working with a third party consultant on a climate risk assessment aligned with TCFD recommendations, which includes climate scenario analysis. The assessment addresses both physical and transitional impacts from climate change and will inform strategic climate risk management responses. Results from the engagement will be shared with the ERM Council and Board.
Director Attendance at Previous Annual Meeting
We encourage our directors to attend the annual meeting of stockholders, and we typically schedule Board and committee meetings to coincide with the annual meeting. All of our currentthen-current directors attended the 20162022 annual meeting of stockholders.
Board and Committee Self-Evaluations
Our Board recognizes that a robust and constructive Board and committee evaluation process is an important component of board effectiveness. As such, our Board and committees conduct an annual evaluation, which in some cases is facilitated by an independent third party, aimed at continually enhancing Board, committee and individual director performance. The process is overseen by the N&CG Committee in conjunction with the Lead Independent Director and Board Chair and varies year-to-year. The following is an overview of the process:
Planning | The N&CG Committee discusses the effectiveness of prior evaluations and determines which evaluation method is most appropriate for the upcoming year. Recent evaluation methods have included: • In each of 2022 and 2021: Individual director evaluations conducted by a third party and including interviews with directors and management • 2020: Self-evaluation discussions during executive session, aided by question lists • 2019: Anonymous written questionnaires completed by each director and a discussion regarding the results facilitated by an independent third party In the case of individual interviews, discussion topics are prepared by the independent third party and reviewed by the N&CG Committee Chair, Board Chair, Lead Independent Director and management prior to distribution. In the case of advance written questionnaires, questions are prepared by the independent third party and reviewed by the N&CG Committee Chair, Board Chair, Lead Independent Director and management and by the N&CG Committee. |
Evaluation | Topics covered during evaluations typically include, among other matters, Board composition and structure, Board committees and their leadership, meeting topics and process, information flow, Board oversight of strategic planning and risk management, access to management and how each of the Board and its committees functions as a unit. The evaluations and the results of such evaluations are delivered during executive sessions. In the case of advance written questionnaires or interviews, feedback is collected and reviewed by the independent third party in advance of Board and committee discussion. In the case of self-evaluation discussions during executive session, the Board Chair and each committee chair commence self-evaluation discussions during the executive session of their respective meetings, using a question list as a guide. After the initial discussion, chairs follow-up with individual Board or committee members for additional feedback and then each committee and the |
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Board completes self-evaluations during executive session at the next regularly scheduled meeting. | |
Presentation of Findings | Preliminary evaluation results are discussed with N&CG Chair, Board Chair, CEO and Lead Independent Director and previewed with management as needed. Final evaluation results and recommendations are discussed with the Board and committees during executive session and, in some cases, privately with individual directors. |
Follow-Up and Accountability | Policies, practices, and the composition of our Board and its committees are modified, as appropriate, based on evaluation findings and ongoing feedback, and follow-up items are discussed at subsequent Board and committee meetings. |
Director Orientation and Continuing Education
All new directors participate in an extensive director orientation program which enables them to quickly become active, knowledgeable and effective members of the Company’s Board. The program includes, among other things, receiving extensive written materials covering the Company, meetings with key members of management, meetings with the chairs of the committees the new director will be joining, and a branch visit. The process is tailored to take into account the individual needs of each new director, including their experience level and the committees to which they have been assigned.
The N&CG Committee is responsible for overseeing the new director orientation program. The Executive Vice President—Chief Administrative Officer and Senior Vice President, General Counsel and Corporate Secretary are responsible for administering the program and reporting to the N&CG Committee the status of the orientation process with respect to each new director. The orientation process is designed to provide new directors with comprehensive information about the Company’s business, strategic plan, financial performance and compensation practices, as well as the policies, procedures and responsibilities of the Board and its committees. The new director orientation materials are also shared with the existing directors.
The Board also provides continuing education for all directors through individual speakers. Director education presentations are typically made in connection with regularly scheduled Board and committee meetings, although they are occasionally made outside of regularly scheduled meetings as needed. During 2022, the Board hosted: (i) an expert to discuss developments in the cybersecurity threat landscape; (ii) a speaker to discuss the scope and implications of the SEC’s proposed climate-related disclosure rules, (iii) speakers who discussed digital, technology and innovation trends across industries; (iv) a customer representative who discussed the customer’s sustainability initiatives; (v) representatives from an investment bank to discuss stockholder activism; and (vi) an advisor to discuss capital allocation trends and strategies. Descriptions of topics covered in prior years are included in our previously filed proxy statements.
The Company receives feedback from the directors on potential topics that would be useful for these presentations. In addition to facilitating these customized in-house programs, we also provide opportunities for directors to attend commercial director education seminars hosted by third parties. The N&CG Committee reviews the company’s director education process periodically to ensure that the continuing education provided remains relevant and helpful.
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CORPORATE GOVERNANCE MATTERS
Board Leadership Structure and Role of Our Lead Independent Director
Our Board has separated the roles of Chair of the Board and CEO. We believe that separating the roles of Chair and CEO better enables the Board to provide oversight and guidance to management, especially in relation to the Board’s essential role in risk management oversight. Furthermore, this separation provides for focused engagement between these two roles in their respective areas of responsibility, while still providing for collaborative participation.
In light of our Chair not being an independent director, considering Mr. Kneeland’s previous service as CEO, our independent directors appointed Bobby Griffin to become Lead Independent Director in May 2019. As Lead Independent Director, Mr. Griffin’s responsibilities include:
We believe this structure of a separate Chair and CEO, combined with a Lead Independent Director, enables each person to focus on different aspects of our Company’s leadership and reinforces the independence of our Board as a whole. We believe this structure also results in an effective balancing of responsibilities, experience and independent perspective; establishes and preserves management accountability; provides a structure that allows the Board to set objectives and monitor performance; and enhances stockholder value.
Corporate Governance Guidelines
We have adopted Corporate Governance Guidelines to promote the effective functioning of the Board. The guidelines address, among other things, criteria for selecting directors and director duties and responsibilities. WeIn 2022, we amended the guidelines in 2016 to add a director retirement ageoverboarding policy which states that, including the Company Board, no non-employee director should serve on more than four public company boards and no employee director should serve on more than two public company boards, with consideration given to public company leadership roles and outside commitments. The overboarding policy also states that the N&CG Committee will complete an annual review of director commitments under the policy. The director retirement age policy provides that directors reaching the age of 76 will not stand for reelection.
We have also adopted categorical independence standards (in addition to the requirements of the NYSE) by which we assess the independence of our directors. You can access these documents on our website athttp://www.unitedrentals.com (under “Corporate Governance” in the Our Company—Investor Relations section) (go to “Company” tab → “Investor Relations” → “Governance”) or in print upon written request to our corporate secretaryCorporate Secretary at United Rentals, Inc., 100 First Stamford Place, Suite 700, Stamford, Connecticut 06902.
Code of BusinessEthical Conduct
We have adopted a Code of BusinessEthical Conduct (the “Code”) for our employees, officers and directors. You can access this document on our website athttp://www.unitedrentals.com under “Corporate Governance” in the Our Company—Investor Relations section. (go to “Company” tab → “Investor Relations” → “Governance”). This document is also available in print to any stockholder upon written request to our corporate secretaryCorporate Secretary at United Rentals, Inc., 100 First Stamford Place, Suite 700,
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Stamford, Connecticut 06902. The Code constitutes a “code of ethics” as defined by the rules of the SEC. We intend to satisfy the disclosure requirement under Item 5.05 of Form8-K relating to amendments to the Code of Business Conduct or waivers from any provision of the Code of Business Conduct applicable to our principal executive officer, principal financial officer and controller by posting such information on our website at the location set forth above within four business days following the date of such amendment or waiver. The Board reviews the Code annually. In addition, we actively monitor internal compliance with the Code through a biennial survey, which is given to (i) all salaried employees and (ii) hourly employees in a financial, information technology or sourcing role. We also adopted the goals that 100% of our employees complete Code training every other year and 100% of new hires complete Code training course within six months of hire.
Statement on Modern Slavery and Human Trafficking
We have adopted a Statement on Modern Slavery and Human Trafficking, which highlights the policies and measures we have implemented under the United Kingdom Modern Anti-Slavery Act of 2015. The statement was approved by our Board and can be accessed on our website at http://www.unitedrentals.com (go to “Company” tab → “Investor Relations” → “Governance”).
Human Rights Policy
We have adopted a Human Rights Policy, which highlights the policies and measures we have implemented with respect to our workplace commitment to human rights. The statement can be accessed on our website at http://www.unitedrentals.com (go to “Company” tab → “Investor Relations” → “Governance”).
Health, Safety & Environmental Policy
We have adopted a Health, Safety & Environmental (“HSE”) Policy, which highlights the policies and measures we have implemented with respect to our commitment to the health and safety of our employees, our customers and our communities and our commitment to the environment. The HSE Policy can be accessed on our website at http://www.unitedrentals.com (go to “Company” tab → “Investor Relations” → “Governance”).
Proxy Access
On September 8, 2016, theThe Board previously approved amendments to the Company’sBy-Laws effective immediately, to implement proxy access, which provides stockholders the ability to nominate individuals for election as a director and to have the nominee included in the Company’s proxy statement and proxy. The Board’s adoption ofCompany’s proxy access followed a careful evaluation by the N&CG Committee and Board over the course of several meetings of stockholder views, policies and votes at other companies on proxy access, evolving practices at other large corporations, relevant academic research, the potential impact on the Company of the adoption of proxy access, alternatives to proxy access and proxy access frameworks adopted by other companies. New Section 3.10 of the Company’sBy-Lawsprovision permits a stockholder, or a group of up to 20 stockholders, owning at least 3% of the Corporation’sCompany’s outstanding common stock continuously for at least three years to nominate and include in the Corporation’sCompany’s proxy materials director nominees constituting up to the greater ofof: (i) 20% of the Board, or (ii) two directors, provided that the stockholders and the nominees satisfy the requirements specified in theBy-Laws.
Simple Majority Voting Requirements
The Board’s adoptionCompany’s certificate of proxy access enhanced stockholders’ rights without taking away anyincorporation was previously amended to remove supermajority voting requirements. Any voting requirement in the certificate of incorporation is now a simple majority requirement.
Stockholders’ Ability to Call Special Meetings of Stockholders
At our 2022 annual meeting, our stockholders voted on a stockholder proposal to lower the ownership threshold for stockholders to be able to call special meetings from 25% to 10% and a competing Company proposal to lower the ownership threshold from 25% to 15%. Stockholders rejected the stockholder proposal while approving the Company proposal. The Company’s By-Laws were amended, effective immediately following stockholder approval at the 2022 annual meeting, to lower the ownership threshold for stockholders to be able to call special meetings from 25% to 15%.
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Stockholders’ Right to Act by Written Consent
In response to a stockholder proposal that passed at our 2019 annual meeting and additional feedback received from stockholders, the Company’s Certificate of Incorporation and By-Laws were amended in 2020 to enable stockholder action by written consent. The right to act by written consent contains certain procedural requirements including that a minimum of 25% or more of outstanding shares of common stock of the Company is required to commence the written consent process by requesting a record date.
At our 2021 annual meeting, our stockholders rejected a stockholder proposal concerning lowering the ownership threshold for our existing stockholder right to act by written consent from 25% to 10%.
This Proxy Statement includes a stockholder proposal which again seeks to lower the ownership threshold required for stockholders to request a record date for written consent from 25% to 10% (Proposal 6) and a competing Company proposal which seeks to lower the ownership threshold to 15% (Proposal 5). The Board believes that the Company’s competing proposal strikes the appropriate balance between enhancing the rights of stockholders had to nominate directors.
Board Leadership Structure
Our Board has separatedand the roles of Chairman of the Board and Chief Executive Officer. The current Chairman, Dr. Jenne Britell, is an independent director. We believe that an independent Chairman is better able to provide oversight and guidance to management, especially in relation to the Board’s essential role in risk management oversight, and to ensure the efficient use and accountability of resources. Furthermore, this separation provides for focused engagement between these two roles in their respective areas of responsibility, while still providing for collaborative participation. The separation of the Chairman and Chief Executive Officer roles, together with our other comprehensive
Company’s corporate governance practices, are designedand provides stockholders with a meaningful ability to establishinitiate stockholder action by written consent, while protecting against abuse or misuse of the right and preserve management accountability, provide a structureavoiding administrative burdens, costs and distractions to the Company that allowswould arise in connection with matters that may not be broadly in the Board to set objectives and monitor performance, and enhance stockholder value.best interests of all of our stockholders.
Director Independence
In assessing director independence, we follow the criteria of the NYSE. In addition, and without limiting the NYSE independence requirements, we apply our own categorical independence standards. Under these standards, we do not consider a director to be independent if he or she she:
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For purposes of these independence standards, the “Company” includes United Rentals, Inc. and any of its subsidiaries.
A substantial majority of our directors must be independent under our Corporate Governance Guidelines, which are more stringent than NYSE rules in this regard. TenNine of our eleven11 current directors have been determined by the N&CG Committee and the Board to be independent under those criteria: Jenne K. Britell;the criteria of the NYSE: José B. Alvarez; Marc A. Bruno; Larry D. De Shon; Bobby J. Griffin; Singleton B. McAllister; Brian D. McAuley; John S. McKinney; Jason D. Papastavrou; Filippo Passerini; DonaldKim Harris Jones; Terri L. Kelly; Francisco J. Lopez-Balboa; Gracia C. RoofMartore; and Keith Wimbush.Shiv Singh. In addition, the Board has determined that each of these directors and director nominees also meets the categorical independence standards described above. MichaelMatthew J. Kneeland, our chief executive officer,Flannery is not considered independent because of his employment with the Company. Michael J. Kneeland is not considered independent because of his former employment as the Company’s Chief Executive Officer. Although Mr. Kneeland meets the bright-line independence criteria outlined in both the NYSE and Company standards because he ishas not been an employee of the Company.Company within the last three years, the Board determined that Mr. Kneeland is not independent given his more than 20 years of employment with the Company and more than ten years of service as the Company’s Chief Executive Officer from 2008 to 2019.
In accordance with SEC regulations, with respect to the directors that we have identified as being independent under NYSE rules, we discuss below any relationships considered by the Board in making its independence determinations. Given the size of the Company and the nature of its business, it has purchase, finance and other transactions and relationships in the normal course of business with companies with which certain Company directors or their relatives are associated, but which are not material to the Company, the directors or the companies with which the directors are associated. Each such transaction and relationship was determined by the Board to be an “immaterial relationship” that would not disqualify the particular director from being classified as an independent director.
In particular, the N&CG Committee and the Board took into accountconsidered that Marc Bruno is Chief Operating Officer, U.S. Food & Facilities at Aramark Corporation (“Aramark”) and that the factCompany pays fees to and generates revenue from Aramark. Neither the annual fees that Filippo Passerini is an Operating Executive atthe Company paid to Aramark nor the annual revenue that the Company generated from Aramark in 2022 exceeded 2% of Aramark’s consolidated gross revenues. The Carlyle Group, an investment manager with, as of December 31, 2016, $158 billion in assets under control across 281 investment vehicles. Because of the size of The Carlyle GroupN&CG Committee and the natureBoard also considered that José Alvarez is on the faculty of its business, The Carlyle Group has ownership in certain entities with whichTuck School of Business at Dartmouth (”Dartmouth”) and that the Company made purchases or sales. In all instances,generates revenue from Dartmouth. The annual fees the amountCompany received from Dartmouth in 2022 did not exceed 2% of payments madeDartmouth’s 2022 total revenues and received by each entity represented less than $1 million.other support. The Board and the N&CG Committee believe that all of these transactions and relationships during fiscal year 20162022 were onarm’s-length terms that were reasonable and competitive and the directors, respectively, did not personally benefit from such transactions.
Because of the Company’s extensive operations, the number of Company store locations and employees, and the thousands of products rented and sold by each store location, transactions and relationships of this nature are expected to take place in the ordinary course of business in the future.
In addition, the N&CG Committee and the Board considered that José B. Alvarez is a director of Daily Table, anon-profit organization to which the Company made an equipment donation in 2016. The donated equipment was worth less than $20,000. The Board determined that the donation was not “significant” or “material” and that the relationship did not disqualify Mr. Alvarez from being classified as an independent director under the NYSE rules or our guidelines.
Executive Sessions of the Board
Our Corporate Governance Guidelines currently provide that ournon-management directors should meet at least twice a year in executive sessions without the presence of management. Non-management directors who do not qualify as “independent” within the meaning of the rules of the NYSE may participate in these meetings. However, at least twice a year, the independent directors should meet in an executive session that includes only independent directors. The purpose of such executive sessions is to facilitate free and open discussion among the participants. The ChairmanChair of the Board (or, in the absence of the Chairman,Chair, the Chairman of the Audit CommitteeLead Independent Director or such other independent director as may be selected by the Board) should preside over executive sessions and, as required, provide feedback to the chief executive officer,Chair and toCEO and such other officers as is appropriate, based upon the matters discussed at such meetings. During 2022, our independent directors met in executive session four times.
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Director Nomination Process
General
The Board has established the N&CG Committee, as described above. The responsibilities of this Committeecommittee include, among other things: (i) developing criteria for evaluating prospective candidates to the Board or its committees; (ii) identifying individuals qualified to become members of the Board or its committees; and (iii) recommending to the Board those individuals that should be nominees for election orre-election to the Board or otherwise appointed to the Board or its committees (with authority for final approval remaining with the Board).
For information on how stockholders may submit director recommendations, see “Other Matters—Submission of Stockholder Proposals for the 20182024 Annual Meeting—Stockholder Nominees for Inclusion in the 2024 Proxy Statement (Proxy Access)” and “Other Matters—Submission of Stockholder Proposals for the 2024 Annual Meeting—Other Stockholder Proposals or Nominees for Presentation at the 20182024 Annual Meeting (Advance Notice)” and “Other Matters—Submission of Stockholder Proposals for the 2018 Annual Meeting—Stockholder Nominees for Inclusion in the 2018 Proxy Statement (Proxy Access).”
Process for Identifying and Evaluating Candidates
The N&CG Committee may identify potential Board candidates from a variety of sources, including recommendations from current directors or management, recommendations of security holders or any other source the N&CG Committee deems appropriate. The N&CG Committee may also engage a search firm to assist in identifying director candidates. The N&CG Committee has been given sole authority to select, retain and terminate any such search firm and to approve its fees and other retention terms.
In considering candidates for the Board, the N&CG Committee evaluates the entirety of each candidate’s credentials. In accordance with our Corporate Governance Guidelines, the N&CG Committee considers, among other things: (i) business or other relevant experience; (ii) expertise, skills and knowledge; (iii) contacts in the communities in which the Company does business and in the Company’s industry or other industries relevant to the Company’s business; (iv) personal qualities and characteristics, accomplishments, integrity and reputation in the business community; (v) the extent to which the candidate will enhance the objective of having directors with diverse viewpoints, backgrounds, experience, expertise, skills and other demographics;demographics (including gender, age, race and ethnicity); (vi) willingness and ability to commit sufficient time to Board and committee duties and responsibilities;responsibilities (including whether such candidate also serves on the boards of directors of other public companies and the number of such positions and whether such candidate is in compliance with the Board’s director overboarding policy outlined in the Company’s Corporate Governance Guidelines); and (vii) qualification to
serve on Board committees, such as the Audit Committee or the Compensation Committee. The N&CG Committee recommends candidates based on its consideration of each individual’s specific skills and experience and its annual assessment of the composition and needs of the Board as a whole, including with respect to diversity. Consideration of diversity as one of many attributes relevant to a nomination to the Board is implemented through the N&CG Committee’s standard evaluation process. In particular, the N&CG Committee obtains and reviews questionnaires, interviews candidates as appropriateprofiles and engages in thorough discussions at Committee meetings in an effort to identify the best candidates. Once preliminary candidates are identified, the N&CG Committee Chair, the Chair, the Lead Independent Director and/or CEO conduct preliminary interviews with those individuals. After the preliminary interview stage, final candidates interview with all members of the Board, which the Board believes creates “buy-in” from all parties and helps attract quality candidates and to populate an effective Board. The effectiveness of the Board’s diverse mix of viewpoints, backgrounds, experience, expertise, skills and other demographics is considered as part of the N&CG Committee’s assessment.
The 911 nominees for election as directors at the 2017 annual meetingAnnual Meeting are: Jenne K. Britell, who has been a director since December 2006; José B. Alvarez, who has been a director since January 2009; Marc A. Bruno, who has been a director since May 2018; Larry D. De Shon, who has been a director since August 2021; Matthew J. Flannery, who has been a director since May 2019; Bobby J. Griffin, who has been a director since January 2009;2009 and who became Lead Independent Director in May 2019; Kim Harris Jones, who has been a director since September 2018; Terri L. Kelly, who has been a director since May 2018; Michael J. Kneeland, who has been a director since August 2008; Singleton B. McAllister,2008 and who became Chair in May 2019; Francisco J. Lopez-Balboa, who has been a director since April 2004; Jason D. Papastavrou,October 2022; Gracia C. Martore, who has been a director since June 2005; Filippo Passerini,2017; and Shiv Singh, who has
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been a director since January 2009; Donald C. Roof, who has been a director since April 2012; and Shiv Singh, a new director nominee. In making its recommendation to the Board, theMay 2017. The N&CG Committee reviewed and evaluated, in addition to each nominee’s background and experience and other criteria set forth in the Company’s Corporate Governance Guidelines, each director’s independence, each incumbent director’s performance during his or her recent tenure with the Board, and whether each was likely to continue to contribute positively to the Board. The N&CG Committee also considered each director nominee's positions, if any, on other public company boards and the number of such positions in accordance with the Board’s overboarding policy.
Board Refreshment and Director Tenure
Board composition and refreshment remains a priority for the Company.Company as evidenced by its continuing refreshment efforts. We strive to maintain a Board composed of directors who bring diverse viewpoints, perspectives and areas of expertise, exhibit a variety of key skills and relevant professional experiences, and effectively represent the long-term interests of our stockholders. We believe that longer-serving directors, in particular, bring critical skills to the boardroom due to their experience, institutional knowledge and understanding of the challenges facing the Company; however,Company. However, we are also cognizant of the need to maintain a balanced mix of tenures.
Director succession presents an opportunity for the Company to expand and replace key skills and experience, build on ourits record of boardBoard diversity and bring fresh perspectives to the boardroom. Accordingly, in addition to commencing a robust self-evaluation of its members, our Board engaged an independent consulting and search firm (the “Firm”) beginning in 2016 to assist in developing a long-term succession plan to identify, recruit and appoint new directors whose qualifications would bring further strength to our Board. During 2016, the Firm interviewed each then-current director and members of senior management and worked with the Board to identify key Company strategies and related prioritized competencies for directors. The prioritized competencies were then used to develop a skills matrix for directors and a long-term succession plan, both of which have been used to guide new director appointments since 2016. The Board reviews the list of prioritized competencies regularly to confirm that it reflects the Company’s latest strategy, and makes updates as needed. The current prioritized competencies are listed in the Board skills and diversity matrix appearing in the “Proposal 1—Election of Directors” section of this Proxy Statement, and will be used to inform any future director searches.
In addition, in furtherance of our commitment to boardBoard refreshment, on October 17, 2016, we previously amended our Corporate Governance Guidelines to add a director retirement age policy. The director retirement age policy provides that directors reaching the age of 76 will not stand for reelection.
As a result of this change and our ongoing board refreshment initiative,initiatives:
Board Diversity
Our Company embraces and encourages a culture of inclusion and diversity, beginning with the Board. While our Board does not establish specific goals with respect to Board diversity, diversity is an important consideration in the director upon her retirement from TEGNA.nomination process and the Board is committed to actively seeking women and racially/ethnically diverse director candidates.
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As a general matter, the Board believes that its members should collectively possess a broad and diverse range of experience, skills, expertise, knowledge, contacts, personal attributes and diversity of opinion useful to the effective oversight of the Company’s business. To achieve this objective, and recognizing that the Company’s businesses, operations and customers are diverse in nature, the N&CG Committee and the Board consider a wide range of attributes when determining and assessing director nominees and new candidates, including personal and professional backgrounds, gender, race and tenure of Board service.
As summarized in the “Proposal 1—Election of Directors—Information Concerning Director Nominees and Board Consideration of Director Nominee Experience and Qualifications” section of this Proxy Statement, each of our directors brings to the Board a variety of qualifications and skills and, collectively, these qualifications form a depth of broad and diverse experiences that help the Board effectively oversee our activities and operations. The list of Board nominees includes three female directors and four ethnically diverse male directors out of 11 total directors. Further, all of our Board committees are chaired by either a female director or an ethnically diverse male director, and our Lead Independent Director is ethnically diverse. In addition, the tenure of our Board is mixed, which brings varying perspectives to our Board functionality.
Direct Communications with Directors
We have adopted procedures to enable our security holders and other interested parties to communicate with the Board or with any individual director or directors. If you wish to send a communication, you should do so in writing. Security holders and other interested parties may send communications to the Board or the particular director or directors, as the case may be, in the manner described in the Company’s written policy available on its website athttp://www.unitedrentals.com (go to “Company” tab → “Investor Relations” → “Governance”).
Environmental and Social Highlights
Management and our Board understand the importance of acting responsibly as a business, an employer and a corporate citizen, and we are committed to incorporating environmental and social considerations into how we do business. In furtherance of this commitment, the N&CG Committee charter notes that the committee is responsible for oversight of the Company’s environmental and social policies and practices, including review of related metrics.
Each year, we publish a corporate responsibility report highlighting our commitment to balancing the social, economic and environmental aspects of our business. Our 2021 corporate responsibility report (“CRR”) is available on our website at http://www.unitedrentals.com under “Corporate Governance”the “Company—About Us” tab or using the following link: https://www.unitedrentals.com/our-company/corporate-responsibility-report.
The following information is intended to be a summary of our CRR. For further details about our commitment to improving the social, economic and environmental aspects of our business, please see our CRR.
Environment
We believe that our primary business—the rental of equipment—is a more resource and cost efficient business model than individual ownership of equipment. It results in environmental benefits such as reduced overall equipment needs as one rental asset can fill the role of multiple customer owned assets, lowering material consumption and reducing emissions and pollutants within both the manufacturing and distribution processes. It also reduces the GHG emissions intensity of equipment that is used as short equipment replacement cycles in the rental model drive down inventory age and drive up fuel efficiency. These aspects of our business model, however, do not eliminate our responsibility to reduce our environmental impacts and to take an active role in the collective fight against climate change.
As highlighted in our CRR, we are committed to reducing our environmental footprint as we grow and leveraging our influence to help drive improvements across our value chain. To further this objective, we adopted a GHG emissions intensity reduction goal – to reduce the GHG emissions intensity from our business (scopes 1 and 2 emissions and scope 3 emissions from third party haulers) by 35% by 2030, using 2018 as the baseline. We also adopted a goal for 95% of our North American operations to have
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lighting retrofit complete by 2025 and a separate goal to divert 70% of our waste from landfills by 2030. In addition to these goals, we are committed to engaging with original equipment manufacturers and customers to bring more low- and zero-emissions equipment opportunities to market. We are also developing customer-focused initiatives to reduce scope 3 emissions, enhance our value proposition and enable our key customers to execute on their own sustainability goals. We have also created a Sustainability Steering Committee, which meets monthly and is comprised of leaders across the organization, to drive progress toward our environmental goals and commitments.
To support our GHG emissions intensity reduction goal, we are exploring ways to acquire more efficient and technologically advanced trucks for our delivery fleet, which contributes the most to our scope 1 and 2 emissions. Logistics optimization for our delivery fleet is a key strategy for reducing fuel usage and our carbon footprint. Our Company—Investor Relations section.
Other energy management efforts for our business include a heating, ventilating and air conditioning (HVAC) preventive maintenance program for increased efficiency, and a lighting retrofit program at our branch locations. We also track energy consumption and associated GHG emissions at all our locations, including the fuel usage for our delivery fleet. Each branch monitors usage on an electronic scorecard to evaluate performance over time and identify potential areas of improvement. Additionally, our drivers’ idling times are reviewed to drive improvement. We have also developed a renewable energy strategy with support from a consulting firm.
To support our customers and their sustainability initiatives, we are committed to increasing our offerings of low- and zero-emissions equipment in our rental fleet and are collaborating with our original equipment manufacturer suppliers to do so. We closely monitor trends across equipment categories and listen to customers to better assess interest in, and opportunities for, electric, hybrid or lower-carbon equipment. We are also developing customer-focused initiatives to help customers manage their own environmental footprint. For example, in 2022, we launched a new innovative solution within our Total Control® platform that tracks and reports on GHG and source pollutant emissions estimates to help customers monitor and manage their environmental impact.
Social
To support our key human capital objectives of attracting, retaining and developing talent, our human resources programs highlighted below are designed to: keep people safe and healthy; enhance the Company’s culture through efforts aimed at making the workplace more inclusive; acquire and retain diverse talent; reward and support employees through competitive pay and benefit programs; develop talent to prepare them for critical roles and leadership positions; and facilitate internal talent mobility to create a high-performing workforce.
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Environmental and Social Risk Management
A cross-functional core team consisting of leaders from various departments including, but not limited to, human resources, legal, environmental, safety, strategy and operations, sets corporate responsibility objectives and identifies issues that may impede our ability to advance these objectives. In addition, we established a Sustainability Steering Committee in 2021, comprised of senior leaders and subject matter experts from across the Company, which meets monthly. This committee’s purpose is to provide high-level oversight and to ensure strong companywide communication and coordination in the implementation of our climate strategy, including achieving our GHG emissions intensity reduction goal.
Further, the Board oversees environmental and social issues and addresses stakeholder concerns through a number of processes and advises on potential risks and opportunities. The Board and the N&CG Committee have a formal schedule for consideration of social and environmental matters. One of the Board’s primary responsibilities is to oversee the development of executive level talent to successfully execute the Company’s strategy. Management succession is regularly discussed by the Board, including during the Board’s executive sessions. The Board reviews candidates for all senior executive positions to confirm that qualified and diverse successor-candidates are available for all positions and that development plans are being utilized to strengthen the skills and qualifications of successor-candidates. The Board’s investment in people development does not stop with management succession planning. It actively takes an interest in making sure all employees are fully engaged and realizing their potential. To accomplish this, the Board annually reviews workplace diversity and receives monthly updates on diversity metrics. The Board also reviews results from all employee experience surveys.
In addition, the N&CG Committee regularly discusses environmental matters, including reviewing the Company’s climate change strategy and progress against the Company’s public ESG goals such as the Company’s GHG emissions intensity reduction goal. The N&CG Committee also reviews current and emerging environmental and social trends that may affect the Company’s business activities, performance or reputation. The N&CG Committee is also responsible for reviewing, as needed, risks and matters related to corporate governance and corporate social responsibility, and providing guidance to the Board and management with respect to such risks and matters.
Senior management and the Board and its committees also devote significant resources to the identification and management of climate-related risks, as well as climate-related opportunities. Management is currently working with a third party consultant on a climate risk assessment aligned with TCFD recommendations, which includes climate scenario analysis. The assessment addresses both physical and transitional impacts from climate change and will inform strategic climate risk management responses. Results from the engagement will be shared with the Company’s ERM Council and the Board.
Environmental and social risks are also part of our ERM Council’s comprehensive risk management program, which is discussed in the “Board Matters—Risk Oversight” section of this Proxy Statement. As part of this program, the Board reviews the effectiveness of the Company’s risk management and due diligence processes related to environmental and social topics. In addition, the Board actively considers environmental and social issues in connection with the Board’s involvement in the Company’s strategic planning process.
Political Activities and Public Policy Participation
The Company’s policy on political activities prohibits political contributions by the Company of any kind (money, time, goods or services), directly or indirectly, even when permitted by law. This includes a prohibition on Company contributions to any candidate, campaign, political party, political committee, 501(c)(4) organization and any other tax-exempt organization that may use the Company’s contribution
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for political purposes. In addition, the Company is restricted from financially supporting events where a portion of the funds will be used, directly or indirectly, to fund political candidates or political parties, election campaigns or related expenses, such as communications. Moreover, the Company does not make payments to trade associations or other industry groups to be used specifically for political purposes, and it is the Company’s policy to instruct trade associations not to use Company funds for contributions to federal, state, or local candidates, independent campaign expenditures, or for other election related purposes or activities. This policy does not prohibit trade associations from using a portion of Company funds for lobbying expenditures that are not used for political contributions.
The Company may make expenditures to advocate particular viewpoints on public policy issues or support intermediaries, such as lobbyists, that advocate on the Company’s behalf. The Company’s legal department oversees this type of advocacy on behalf of the Company. Pursuant to its charter, the N&CG Committee oversees the Company’s policy on political spending and receives an annual report from management about any Company lobbying expenditures. In addition, the Company publishes an annual Lobbying Report which can be found on its website at http://www.unitedrentals.com (go to “Company” tab → “Investor Relations” → “Governance”).
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EXECUTIVE COMPENSATION
Compensation Discussion and Analysis (“CD&A”)
Our executive compensation program aims to attract, retain, and reward high caliber management talent who will lead our business and execute our strategy for long-term profitable growth. This CD&A outlines our 20162022 executive compensation philosophy and objectives, describes the elements of our executive compensation program, and explains how the Compensation Committee (the “Committee”) of the Company’s Board of Directors (the “Board”) arrived at its compensation decisions for our 20162022 named executive officers (“NEOs”) listed below:
NEO | Principal Position and Title | |
| President and Chief Executive Officer (CEO) | |
William | Executive Vice President, | |
Dale Asplund | Executive Vice President, | |
Craig Pintoff | Executive Vice President, Chief Administrative Officer | |
Andrew Limoges | Vice President, Controller and Principal Accounting Officer | |
Jessica Graziano | Former Executive Vice President, Chief Financial Officer(2) | |
Jeffrey Fenton | Former Senior Vice President, Business | |
|
EXECUTIVE SUMMARYThe Board appointed William (Ted) Grace as Interim Chief Financial Officer, effective July 29, 2022 upon the departure of Jessica Graziano. Following a thorough search process, Mr. Grace officially assumed the role of Executive Vice President and Chief Financial Officer effective November 3, 2022. Prior to his appointment as Chief Financial Officer, Mr. Grace served for six years as United Rentals’ Vice President of Investor Relations and has been an integral leader across all aspects of the finance function during his tenure.
2016Executive Summary
2022 Business HighlightsOverview
The Company generated solid resultsIn 2022, we marked our first 25 years in business by delivering the best financial performance in our history. It was another year of strong demand for 2016,equipment rental services, driven by major tailwinds in our end-markets. We leaned into that opportunity, continuing to invest in the business and growing rental revenue by over 20% in both our general rental and specialty segments.
Importantly, we converted our 2022 growth into record profitability, margins and returns for our shareholders. At the same time, we invested in long-term growth with $2.3 billion of acquisitions, 35 specialty cold-starts, $3.4 billion of rental fleet purchases and ongoing investments in safety, customer service and sustainability. Based on our durable cash generation and strong balance sheet, we announced in January 2023 that we would reactivate our share repurchase program and initiate a quarterly dividend. Together, these decisions are expected to return a total of $1.4 billion of capital to our stockholders this year.
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For the full year 2022, we delivered a record $11.6 billion of total revenue, including $10.1 billion of $5.76 billion;equipment rental revenue, reflecting a mix of investments in organic growth and acquisitions to serve growing market demand. Below the revenue line, we achieved strong flow-through through a combination of diligent cost management and operational excellence, driving a net income margin(1) of 18.1%, and an adjusted EBITDA margin(1) of $2.7648.3%. In addition, we generated $4.4 billion at a margin of 47.9%;net cash from operating activities, and record$1.8 billion of free cash flow(2)(1) after purchasing $3.4 billion of $1.18 billion. Economic profit improvement (“EPI”)(3)declined by $60 million year-over-year. Returnrental fleet to serve our expanding customer base.
We deployed these resources strategically to achieve market share gains and generate superior returns. Our return on invested capital (“ROIC”)(2) for 2022 was 8.3%a record 12.7%, solidly above our cost of capital, and our net leverage ratio was 2.0x at year-end 2022, down from 2.2x at year-end 2021. Total liquidity was $2.9 billion at year-end 2022, after completing our $2 billion acquisition of Ahern Rentals, Inc. (”Ahern”) in December.
Ahern was our largest acquisition in 2022, and we completed it at an ideal time to expand our resources. While it had little impact on our financial results for 2016(4). The modest declinesthe year as the acquisition was completed in December 2022, it enabled us to begin integrating acquired operations in 30 states at year-end ahead of seasonal demand. In total, revenue, adjusted EBITDAthe strategic investments we made throughout the year increased our service capacity to approximately 24,600 employees and ROIC were largely attributable to four headwinds: global economic concerns inmore than 1,500 branches as of the first quarter, which caused some uncertainty in our end markets; the ongoing drag from the upstream oil and gas sector; continued weakness in the Canadian economy; and industry over-fleeting. Despite these constraints, our total revenue, adjustedof 2022.
In addition, our people-centric culture is a pillar of our revised guidance,growth strategy. Our Board monitors Company progress on matters of corporate social and environmental responsibility and fosters our fleetculture through a focus on rent (based on original equipment cost or “OEC”) increased year-over-year.corporate governance. In 2022, we:
Notably,
47
Much of this success can be attributedWork and being named to the skilled implementationJUST 100, a ranking of America’s largest publicly traded companies on ESG issues;
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Stock Performance
The chart below shows that the Company continues to outpace both the S&P 500 Index and its Peer Group (defined on page 55 of this Proxy Statement). It shows the total cumulative three-year return of the Company’s stock sincebased on the December 31 2013,share price from 2017 through 2022, compared with the S&P 500 Index and the Peer Group. The chart includes reinvestment of dividends for companies in the S&P 500 Index and the Peer Group; the Company did not pay dividends during the time period. On January 25, 2023, the Board approved a quarterly dividend program and declared the first dividend under that program, which was paid on February 22, 2023 to holders of record as of the close of business on February 8, 2023.
For more information regarding the Company’s 2016 Executive Compensation Peer Group (as defined on page 37)performance and operations, please refer to the Form 10-K and our website (www.unitedrentals.com).
20162022 Incentive Compensation Highlights
DespiteBased on our solid performance in 2016, we underachieved against our internal business plan. As a result, thestrong results, funding was below targetachieved for both our Annual Incentive Compensation Plan (“AICP”) was 200% of target and our Long-Term Incentive Plan (“LTIP”). This is largely attributable to the combination of the external factors
described above and the plans’ performance goals, which are intended to be challenging each year. Annual bonuses were funded at 74.2% of target, and LTIP awards were earned at 78.0%200% of target. target, both of which reflect maximum attainment.
The Committee has a general philosophy of setting challenging, yet attainable, performance goals in both the AICP and the LTIP. In setting the 2022 performance goals under both the AICP and the LTIP, the Committee reviewed historical AICP and LTIP funding levels and performance relative to the Peer Group. Over the last nine years, average AICP funding has been at the 53rd percentile of our Peer Group and average LTIP funding has been at the 54th percentile of the Peer Group, demonstrating challenging, yet reasonable targets. Over that same nine-year period, our relative Total Shareholder Return (“TSR”) was above the 90th percentile of the Peer Group.
For incentive compensation details, please refer to “The 20162022 Executive Compensation Program in Detail” section starting on page 37.57 of this Proxy Statement.
2016 Pay Mix
Our executive compensation program emphasizes variable pay that aligns compensation with performance and stockholder value. For the NEOs, the mix of compensation elements is heavily weighted toward variable, performance-based compensation. The CEO’s compensation, in particular, has a greater emphasis on variable compensation than that of the other NEOs because his actions have a greater influence on the performance of the Company as a whole.49
As shown below, the significant majority of NEO pay continues to be variable (87% for the CEO and an average of 72% for our other NEOs, excludingone-time supplemental RSU awards made in March 2016) based upon actual fiscal year 2016 compensation.
20162022 “Say on Pay” Results and Changes for 2017Investor Engagement
At the Company’s 20162022 annual meeting of stockholders, we received substantial support for our executive compensation program, with over 95%approximately 92% of the stockholders who voted on the advisory “say on pay” proposal approving the compensation of our NEOs. This is consistent with the positive feedback we received in discussions with our stockholders throughout the year.
We interpretedvalue our investors’ perspective on our business and each year proactively interact with investors through numerous engagement activities. In 2022, these included our annual meeting of stockholders, quarterly earnings calls, various investor conferences, and several (non-deal) road shows. In addition, management conducted the 2022 Outreach Program to engage with stockholders about, among other topics, key compensation topics. Details about our 2022 Outreach Program are outlined beginning on page 4 of this exceptionally strong levelProxy Statement.
Overall, our stockholders continued to be broadly supportive of support as an affirmation of our current program and our approach to making compensation decisions. To this end, we did not make any significant changes to the executive compensation, program for 2016.
As our business environment continues to evolve,and we are committed to ensuringkeeping our program aligned with our business strategy and investor expectations. During our engagements, and consistent with conversations in recent years, we saw continued interest in ESG matters from several stockholders. We also heard from other stockholders that ournoted that they generally like to see ESG included as a component of executive compensation, program is aligned with market practices; continues to support our emphasisbut believe performance measures should primarily focus on growth and returns; addresses any stakeholder concerns;returns, as our incentive plans do.
Given our strategic focus on ESG factors and strongly reinforcesto further align our compensation philosophy. To alignprogram with these objectives,expectations for continued progress on ESG commitments, as previewed in our 2022 proxy statement, the Committee took several actionsapproved adjustments to the AICP for 2022 to use a consistent framework of pre-determined strategic factors linked to ESG objectives to measure the collective performance of the NEOs, in addition to individual key objectives tied to their individual areas of responsibility as defined in their annual performance reviews. Based on collective achievements against the ESG factors in the strategic framework and individual contributions to performance, the Committee may, in its own discretion, decide to adjust each NEO’s funding level upward or downward in the range of 90% to 110% of the initial funding amount that impactis based on the quantitative financial metrics and weightings under boththat drive our AICP. We believe this framework strikes the right balance between incorporating ESG factors into our incentive plans as a modifier to the initial funding level in the AICP and LTIP incentive plansremaining primarily focused on growth and returns in accordance with recent stockholder feedback.
The table below outlines the categories and metrics for fiscal year 2017.the strategic/ESG framework for 2022. Supporting each key element are underlying quantitative goals for evaluation by the Committee as they apply their discretion in the adjustment of the initial funding amount. None of the metrics or goals are dispositive or individually weighted. Please refer to the “2022 Strategic/ESG Factors Framework” section starting on page 60 of this Proxy Statement for details, including our 2022 goals and performance.
Category | 2022 Metrics | |
Environment Reducing the environmental footprint of our operations through climate action and resource conservation | GHG Emissions Intensity Reduction: 2022 progress toward achieving our 2030 GHG emissions intensity reduction goal | |
Social Measures Building a safe, diverse and engaged team and inclusive workplace | Employee Safety: Total Recordable Incident Rate (TRIR) | |
Diversity: Improvement in diversity at all levels of sales and management | ||
Employee Experience: Improvement in year-over-year employee experience survey results | ||
Employee Retention: Improvement in overall employee retention | ||
Customer Sustainability Supporting our customers and innovating to offer solutions | Customer Experience: Net Promoter Score (NPS) | |
Customer Digital Adoption: Percentage of total company revenue where a customer used a digital tool within the last 90 days | ||
Individual Key Objectives | Individual discretionary goals tied to the executive’s area of responsibility as defined in the annual performance review |
Weightings: ● Adjusted EBITDA is more heavily weighted to emphasize growth while continuing strong accountability for returns ● ROIC modifier has been eliminated ● Maximum award opportunity has decreased from 225% to 200% of target ● EPI no longer overlaps with LTIP ● Revenue is more heavily weighted, and EPI has been replaced by ROIC to emphasize growth while continuing strong accountability for returns ● ROIC modifier has been eliminated ● Maximum award opportunity has decreased from 300% to 200% of target ● EPI no longer overlaps with AICP502017 Incentive Plan Highlights Plan: AICP LTIP Metrics: Adjusted EBITDA EPI Revenue ROIC 70% 30% 70% 30% Key Points:
Summary of Our Executive Compensation Practices
What We Do | What We Don’t Do | |||||||
| • Heavy emphasis on variable(“at-risk”) compensation |
| ||||||
| • Stock ownership guidelines supported by net share retention requirements |
| ||||||
| • Double-trigger equity vesting upon a change in control |
| ||||||
| • Clawback • Engage an independent compensation consultant • Annual risk assessment of compensation practices |
| • No significant perquisites • No supplemental executive retirement plans • No repricing or exchange of underwater options without stockholder approval • No option or stock appreciation rights granted below fair market value | |||||
|
| • No taxgross-ups other than for qualified relocation expenses • No guaranteed incentive payments |
WHAT GUIDES OUR PROGRAMWhat Guides Our Program
Our Compensation Philosophy
The foundation of our compensation philosophy is to ensure that our executive compensation program is designed to align with the Company’s business strategy and drive long-term stockholder value. Our compensation philosophy is supported by three pillars: stockholder alignment, market competitiveness, and internal balance. These pillars are reinforced by the following objectives:
Stockholder Alignment | Market Competitiveness | Internal Balance | ||
• Align the interests of executives
• Make efficient use of equity-based compensation
• Encourage significant management ownership and retention of our common stock |
• Attract, retain, and motivate a leadership team capable of maximizing the Company’s performance
• Set target total direct compensation (“TTDC”) at competitive levels
• Be competitive with the programs |
• Link substantial portions of compensation to Company, business unit, and individual performance
• Reward the appropriate balance of short-term and long-term financial and strategic business results
• Maintain alignment of incentive compensation metrics across senior executives and the general employee population |
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The Principal Elements of Pay: Total Direct Compensation (“TDC”)
Our compensation philosophy is supported by the following principal elements of pay:
Pay Element | How It’s Paid | Purpose | ||
Base Salary | Cash (Fixed) | Provide a competitive base salary | ||
AICP | Cash and Vested Shares of Company Stock (Variable) | Focus executives on achieving annual financial and strategic objectives that promote growth, profitability, ESG outcomes, and returns | ||
LTIP | Equity (Variable) | Provide incentive for executives to reach financial goals and align their long-term economic interests with those of stockholders through meaningful use of equity compensation |
As discussed below, we also provide our NEOs with a 401(k) retirement plan, limited perquisites and other personal benefits, as well as severance and change in control protection.
20162022 Pay Mix
Our executive compensation program emphasizes variable pay that aligns compensation with performance and stockholder value. For the NEOs, the mix of compensation elements is heavily weighted toward variable, performance-based compensation with a balanced focus on growth, profitability, and returns. The CEO’s compensation has a greater emphasis on variable compensation than that of the other NEOs because his actions have a greater influence on the performance of the Company as a whole.
As shown below, the significant majority of NEO pay continues to be variable: 88% for the CEO and an average of 74% for our other NEOs, excluding Ms. Graziano and Mr. Fenton who are no longer employed by the Company, based upon annual TTDC as of December 31, 2022. These charts do not include any one-time grants or awards outside of annual TTDC.
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A Closer Look at the Performance Measures in Our Incentive Plans
At the beginning of each performance year, the Committee approves the performance metrics for our incentive plans. Under these plans, variable pay is based on a balanced portfolio of financial metrics, which promote an even weighting between growth and returns given our position in the business cycle. Under the AICP, awards are also tied to the NEOs’ collective achievement on ESG objectives related to the environment, social measures and customer sustainability, that apply to all of the NEOs, in addition to individual achievement against key objectives tied to the NEOs’ individual areas of responsibility as defined in their annual performance review. The chart below provides an overview of the metrics under each of the plans, their weightings, and how they are defined.
A Closer Look at the Performance Measures In Our Incentive Plans | |||||
Plan |
| AICP | LTIP | ||
Financial Metrics |
| Adjusted EBITDA | EPI | Revenue | ROIC |
Financial Metrics: Weightings |
| 50% | 50% | 50% | 50% |
Financial Metrics: Key Points |
| • Adjusted EBITDA focuses on growth, while continuing to provide strong accountability for returns. • EPI is the year-over-year improvement in our economic profit, assuming a constant weighted cost of capital. We use EPI because it: o Reflects management’s ability to grow the business year-over-year and generate profitable returns. EPI measures the year-over-year spread between ROIC and the Company’s assumed weighted cost of capital; o Measures how successfully we maximize profit while minimizing capital investments; and o Places a spotlight on our ability to manage cash and generate earnings, which is especially important given our capital intensive, cyclically-driven business. • When calculating EPI for the AICP, we assume a constant weighted cost of capital of 10% to focus on driving returns, not the cost of capital. | • Revenue ensures we remain focused on growth. • ROIC, which is calculated as after-tax operating income for the trailing 12 months divided by average stockholders’ equity, debt and deferred taxes, net of average cash, reinforces the importance of returns on capital. • We use ROIC because it focuses on efficient use of assets, which is important given our capital intensive cyclically-driven business.
| ||
Strategic/ESG Factors |
| Adjustment of 90-110% of initial funding amount based on the NEOs’ collective achievement against strategic factors linked to ESG objectives related to the environment, social measures, and customer sustainability, in addition to individual achievement against key objectives tied to each of the NEO’s individual areas of responsibility. | Not applicable |
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2022 Target Total Direct Compensation (TTDC)
The following table shows the 2016 target total direct compensation (“TDC”)2022 TTDC opportunity for each of the NEOs.active NEOs as of December 31, 2022. This table does not include any one-time grants or awards outside of annual TTDC.
NEO |
| Base Salary(2) | TTDC(1) Target AICP | Target LTIP | Total | ||||
Matthew Flannery |
| $1,050,000 |
| $1,575,000 |
| $6,000,000 |
| $8,625,000 |
|
William (Ted) Grace(3) |
| $590,000 |
| $531,000 |
| $1,300,000 |
| $2,421,000 |
|
Dale Asplund |
| $700,650 |
| $700,650 |
| $2,500,000 |
| $3,901,300 |
|
Craig Pintoff |
| $637,501 |
| $573,751 |
| $1,820,000 |
| $3,031,252 |
|
Andrew Limoges |
| $360,000 |
| $216,000 |
| $275,000 |
| $851,000 |
|
NEO | Target TDC(1) | Total | ||||||||||||||
Base Salary(2) | Target AICP | Target LTIP | ||||||||||||||
Michael Kneeland | $950,000 | $1,425,000 | $6,250,000 | $8,625,000 | ||||||||||||
William Plummer | $599,872 | $539,885 | $1,500,000 | $2,639,757 | ||||||||||||
Matthew Flannery | $599,872 | $539,885 | $1,500,000 | $2,639,757 | ||||||||||||
Dale Asplund | $523,623 | $471,261 | $1,000,000 | $1,942,521 | ||||||||||||
Craig Pintoff | $475,010 | $427,509 | $900,000 | $1,755,018 |
Our Decision-Making Process
The Role of the Compensation Committee
The Committee is made up of independent, non-employee members of the Board and oversees the executive compensation program for our NEOs and is made up of independent,non-employee members of the Board.NEOs. The Committee works very closely with management and its independent compensation consultant and management to evaluate the effectiveness of the Company’s executive compensation program throughout the year. The Committee’s specific responsibilities are set forth in its charter, which can be found on the Company’s website athttp://www.unitedrentals.comunder “Corporate Governance” in the Investor Relations section.(go to “Company” tab → “Investor Relations” → “Governance”).
The Committee makes all final compensation and equity award decisions regarding our NEOs. The Committee seeks to ensure that the total compensation paid to our NEOsNEOs: is fair, reasonable, and competitive,competitive; provides an appropriate balance of base pay and short-term and long-term incentives,incentives; and does not cause unnecessary risk-taking.
The Role of Senior Management
Our CEO, CFO, and Executive Vice President—Chief Administrative and Legal Officer haveSenior management has two key responsibilities with respect to the executive compensation program:
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The Role of the Independent Compensation Consultant
The Committee has engaged Pearl Meyer & Partners, LLC (“Pearl Meyer”) as its independent compensation consultant. Pearl Meyer reports directly to the Committee and does not provide any other services to the Company. In May 2016,2022, the Committee performed an independence assessment of Pearl Meyer pursuant to SEC and NYSE rules and standards. In performing its evaluation, the Committee took into consideration a letter from Pearl Meyer certifyingconfirming its independence.independence based on factors set forth in the NYSE rules for compensation committee advisors. At the culmination of the evaluation, the Committee determined that Pearl Meyer is an independent advisor.
As the Committee’s compensation consultant, Pearl Meyer generally reviews, analyzes, and provides advice about the Company’s executive compensation programs for senior executives. Pearl Meyer considers the objectives of these programs, compares the programs to designated Executive Compensation Peer Grouppeer group companies (discussed below under “The Role of Benchmarking and the Executive Compensation Peer Group”) and best practices, and provides information and advice on competitive compensation practices and trends, along with specific views on the Company’s compensation programs. In 2016,2022, Pearl Meyer also provided advice to the Committee on director compensation and related market practices. Pearl Meyer reports directly to the Committee and regularly attends Committee meetings. Pearl Meyermeetings and also responds on a regular basis to questions from members of the Committee, and providesproviding them with analysis and insights with respect to the design and implementation of current or proposed compensation programs.
In 2016, Meridian Compensation Partners was engaged by management to provide additional support and analysis with respect to a specific executive incentive compensation project.
The Role of Benchmarking and the Executive Compensation Peer Group
The Company competes with business entities across multiple industries for top executive-level talent. To this end, the Committee regularly evaluates, on an annual basis, industry-specific and general market compensation practices and trends to ensure that our program and NEO pay opportunities remain appropriately competitive.competitive (but the Company does not target a specific benchmarking level).
The Committee compares each component of the total compensation package to the compensation components of comparable executive positions of a peer group of publicly traded companies (the
“Executive Compensation Peer “Peer Group”). If information for a sufficient number of comparable positions in the Executive Compensation Peer Group for the applicable year is not publicly available, the Committee will also consider comparisons with general industry executive compensation benchmarking data from Towers Watson’s U.S. CDB General Industry Executive Database.
The companies that make up the Executive Compensation Peer Group and the General Industry Executive Database may vary from year to year. While the Committee does not use a specific formula to determine the allocation between performance-based and fixed compensation, it does review total compensation and competitive benchmarking when determining such allocation.
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In setting 20162022 target compensation levels for itsthe NEOs, the Company used the Executive Compensation Peer Group detailed below. This Peer Group was determined by the Committee based on an in-depth review by its independent compensation consultant, Pearl Meyer, which included an assessment of potential comparators to evaluate the degree to which the current peers have kept pace with the Company’s growth and evolution and an examination of the broader marketplace to identify appropriate and relevant additions to the peer group. The 2016 target annual TDC2022 TTDC opportunities, consisting of base salary, target AICP, and annual long-term incentiveLTIP awards, were determined to be, on average, competitive with the market median.
Peer Group | ||
| Ryder System, Inc. | |
Cintas Corporation | Stanley Black & Decker, Inc. | |
| Trane Technologies plc | |
| Waste Management, Inc. | |
J.B. Hunt Transport Services, Inc. | Waste Connections, Inc. | |
Masco Corporation | WESCO International, Inc. | |
| W.W. Grainger, Inc. | |
| Xylem Inc. | |
Rockwell Automation Inc. |
Peer Data ($M)(1) | |||||||||||||
Peer Group Data ($M)(1) | Peer Group Data ($M)(1) | ||||||||||||
Percentile | Annual Revenue | Market Cap | Enterprise Value |
| Annual Revenue |
| Market Cap |
| Enterprise Value | ||||
75th | $8,882 | $9,950 | $17,195 |
| $15,834 |
|
| $36,163 |
| $41,173 | |||
50th | $6,595 | $6,270 | $10,877 |
| $12,249 |
|
| $22,848 |
| $29,032 | |||
25th | $5,194 | $5,055 | $8,530 |
| $8,169 |
|
| $15,526 |
| $16,937 | |||
URI(2) | $6,000 | $8,835 | $16,729 |
| $10,940 |
|
| $25,556 |
| $35,920 | |||
% Rank | 33rd | 57th | 71st | ||||||||||
Percentile Rank |
| 45th | 55th | 60th |
THE 2016 EXECUTIVE COMPENSATION PROGRAM IN DETAIL
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The 2022 Executive Compensation Program in Detail
Base Salary
Base salary represents annual fixed compensation and is a standard element of compensation necessary to attract and retain talent. Base salary levels are reviewed annually. When making adjustments, the Committee considers the Company’s overall performance; the executive’s individual performance; the executive’s experience, career potential, and tenure with the Company; the applicable terms, if any, of the executive’s employment agreement; and competitive market practices. Decisions are generally made during the first quarter of the fiscal year and effective in April. For 2016,
During the first quarter of 2022, based on the annual review, the Committee determined to increase base salaries for Mr. Flannery, Ms. Graziano and Messrs. Asplund and Pintoff by $50,000, $22,890, $25,650, and $23,338, respectively, effective April 1, 2022. Mr. Fenton’s salary did not increase because he gave notice of retirement before salary decisions were made in 2022. See below for a discussion of the appropriatebase salaries of Messrs. Grace and Limoges, both of whom were not NEOs in 2021. The table below shows the updates to the NEOs’ base salary rates:
NEO |
| 2021 | 2022 | % Increase | ||||||
Matthew Flannery |
|
| $1,000,000 |
|
| $1,050,000 |
|
| 5.0% |
|
William (Ted) Grace(1) |
|
| — |
|
| $590,000 |
|
| N/A |
|
Dale Asplund |
|
| $675,000 |
|
| $700,650 |
|
| 3.8% |
|
Craig Pintoff |
|
| $614,163 |
|
| $637,501 |
|
| 3.8% |
|
Andrew Limoges(2) |
|
| — |
|
| $360,000 |
|
| N/A |
|
Jessica Graziano(3) |
|
| $602,110 |
|
| $625,000 |
|
| 3.8% |
|
Jeffrey J. Fenton(4) |
|
| $433,746 |
|
| $433,746 |
|
| 0% |
|
table below.2021 so his 2021 base salary is not disclosed. Mr. Pintoff’sLimoges’ base salary was increased, effective January 11, 2016April 1, 2022, to $315,000, and was further raised, effective August 1, 2022, to $360,000 to reflect an increase in connection with his promotionjob responsibilities and duties.
NEO | 2015 | 2016 | % Increase | |||||||||
Michael Kneeland | $950,000 | $950,000 | 0 | % | ||||||||
William Plummer | $582,400 | $599,872 | 3 | % | ||||||||
Matthew Flannery | $582,400 | $599,872 | 3 | % | ||||||||
Dale Asplund | $508,372 | $523,623 | 3 | % | ||||||||
Craig Pintoff | $424,008 | $475,010 | 12 | % |
During the first quarter of 2017,2023, based on the annual review, the Committee determined to increase base salaries for Messrs. Plummer, Flannery, Grace, Asplund, Pintoff and PintoffLimoges by $18,128, $50,128, $26,378$50,000, $29,500, $35,033, $31,875 and $25,000,$40,000, respectively, effective April 1, 2017. Mr. Flannery received an above average base salary increase to improve his competitive position relative to our peer group. Mr. Kneeland’s base salary was not increased, and has not increased since October 22, 2012.2023.
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Annual Incentive Compensation Plan
20162022 AICPAt-A-Glance
20162022 AICP Targets
Target bonus opportunities are expressed as a percentage of base salary and are established based on the NEO’s level of responsibility and ability to impact the Company’s overall results. The Committee also considers market data in setting target award amounts. In May 2016, the Committee determined to increase the target award opportunity for Messrs. Asplund and Pintoff to 90% (from 80%), effective January 1, 2016 in light of increased responsibilities. Following those increases,NEO target award opportunities for 2016as of December 31, 2022 were as follows:
NEO | Target AICP (as a % of Base Salary) | ||||
| 150 | % | |||
William | 90 | % | |||
| 100 | % | |||
| 90 | % | |||
| 60 | % | |||
Jessica Graziano(2) | 90 | % | |||
Jeffrey J. Fenton(3) | 80 | % |
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2016
2022 Funding Levels and Results
The following chart below shows the 20162022 goals set for adjusted EBITDA and EPI, as well as actual results. Adjusted
|
|
|
|
| 2022 Performance Metrics ($M)(1) | ||||
Payout Level |
| % of Target |
|
| Adjusted EBITDA(2) (50% weighting) |
|
| EPI(2) (50% weighting) | |
Maximum |
| 200% |
| $5,400 |
|
| $456 |
| |
Target |
| 100% |
| $5,100 |
|
| $219 |
| |
Threshold |
| 50% |
| $4,600 |
|
| $(176) |
| |
Actual Results(2)(3) |
| $5,633 |
|
| $540 |
| |||
| 200% of Target |
|
| 200% of Target | |||||
Funded Amount | 200% of Target |
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Payout Level
| % of Target
| 2016 Performance Metrics ($M)
| ||||||
Adjusted EBITDA
| EPI
| |||||||
Maximum | 150 | % | $2,970 | $23 | ||||
Target | 100 | % | $2,850 | $(12) | ||||
Threshold | 50 | % | $2,610 | $(82) | ||||
$2,757 | $(57) | |||||||
Actual(1)(2) |
| 80.6% of Target | 67.9% of Target | |||||
Earned Amount
|
| 74.2% of Target
|
2022 Strategic/ESG Factors Framework and Results
Given our strategic focus on ESG factors and to further align our program with expectations for continued progress on ESG commitments, for 2022, the Committee approved adjustments to the AICP to use a consistent framework of pre-determined strategic factors linked to ESG objectives across three categories – environment, social measures and customer sustainability – to measure the collective performance of the NEOs, in addition to individual key objectives tied to their individual areas of responsibility as defined in their annual performance reviews. The table below outlines the key elements of the Strategic/ESG framework for 2022. Supporting each key element are underlying quantitative metrics and goals for evaluation by the Committee as they apply their discretion in the adjustment of the initial funding amount. None of the objectives are dispositive or individually weighted.
Category | 2022 Metrics | 2022 Goals | 2022 Results |
Environment Minimizing the | GHG Emissions Intensity Reduction: 2022 progress toward achieving our 2030 GHG emissions intensity reduction goal | 14.0% reduction in GHG emission intensity from 2018 baseline | Exceeded goal; achieved16.8% reduction in GHG intensity from 2018 baseline |
Social Measures Building a safe, diverse* and engaged team and inclusive workplace *for purposes of the diversity metric, goals and results presented and referenced in this table, diverse means women and/or Hispanic, Black or African American, Native Hawaiian or Pacific Islander, Asian, Native American or Alaska Native, or two or more races | Employee Safety: Total Recordable Incident Rate (TRIR) | TRIR at or below company goal of 0.60 | Fell short of stretch goal with 0.76 TRIR; however, we improved year-over-year against strong performance in 2021, while onboarding 8,000 new employees |
Diversity: Improvement in diversity at all levels of sales and management | Increase diverse employees as a percentage of all sales and management positions by at least 2 percentage points, from 31.3% in 2021, with additional sub goals for gender and ethnic diversity | Exceeded goals; achieved 33.5% in diverse representation in sales and management job groups, reflecting a 2.2 percentage point increase from 2021. Also exceeded sub goals | |
Employee Experience: Improvement in year-over-year employee experience survey results | This is our first year using a new employee experience survey provider. While year-over-year results are difficult to benchmark given the differences in questions, the results were strong, placing the Company in the top 10% of its benchmark group. The strong survey results were consistent with the awards and recognitions we received from third parties, such as Glassdoor’s Top 100 Places to Work and Energage’s list of Top Workplaces | ||
Employee Retention: Improvement in overall employee retention | 10% reduction in voluntary turnover from 2021 | Fell short of stretch goal; however, we improved year-over-year, with voluntary turnover decreasing 3% from 13.5% in 2021 to 13.1% in 2022. In 2022, we operated in a challenging labor market while integrating numerous acquisitions | |
Customer Sustainability Supporting our customers and innovating to offer solutions | Customer Experience: Net Promoter Score (NPS) | NPS score greater than or equal to 80 | Fell short of stretch goal and decreased slightly year-over-year; however, our overall performance continues to be very strong, with a score above 75 in each of 2021 and 2022 |
Customer Digital Adoption: Percentage of total company revenue where a customer used a digital tool within the last 90 days | 60% adoption rate | Exceeded goal; achieved 61.8% adoption rate | |
Individual Key Objectives | Individual discretionary goals tied to the executive’s area of responsibility as defined in the annual performance review |
For 2016, the AICP also included a multiplier based on ROIC (excluding goodwill from the denominator), which provided for a maximum upside opportunity of 225% of target. Achievement of ROIC above 12% would result in applying a multiplier ranging from 1 to 1.5 to the amount otherwise earned, calculated based on straight-line interpolation, with the multiplier rounded down rather than applied at an amount beyond the first decimal point (e.g., if ROIC performance would extrapolate to a 1.27 multiplier, the multiplier would be rounded down to 1.2). No multiplier was achieved for 2016.
2016 Individual Performance Adjustment60
Once the initial level of incentive funding is determined basedBased on the achievement of adjusted EBITDA, EPINEOs’ collective achievements against the metrics in the framework and ROIC as described above,their individual contributions to performance, the Committee may, in its own discretion, decide to adjust each NEO’s funding level byupward or downward in the range of 90% to 110% basedof the initial funding amount. For purposes of the discussion below, Mr. Fenton was an active NEO through his retirement on the achievement of individual performance goals. The Committee retains discretionJune 30, 2022, while Ms. Graziano was not an active NEO during 2022 due to further adjust the award downward or upward basedher resignation on its overall assessment of performance.
July 29, 2022. To assess individual performance for 2022, the Committee selected qualitativeconsidered achievements against the following individual goals tied to key strategic initiatives, as well asfor each NEO’sof the NEOs, respective of their areas of responsibility. responsibility:
operations; and our digital strategy.
20162022 AICP Pay Outcomes
Based on the above adjusted EBITDA and EPI and ROIC results thediscussed above, funding of the annual incentive amounts was set at 74.2%200% of each NEO’s applicable bonus target, subject to adjustment up or down between 90% and 110% of the funded amount based on the achievement against the strategic/ESG factors and individual key objectives. In determining whether or not to adjust the funded amount, the Committee considered 2022 results under the strategic/ESG framework, including strong performance on the GHG emissions intensity reduction, diversity, employee experience and customer digital adoption metrics and goals balanced against mixed performance on stretch goals for safety, employee retention and customer experience, and performance against individual discretionary goals tied to each NEO’s areas of responsibility as defined in the specificannual performance metrics assignedreview. The Committee also considered that funding based on the adjusted EBITDA and EPI results was set at 200% of target, reflecting maximum attainment. After consideration of all relevant factors, the Committee determined not to adjust the NEO.NEOs’ funding from the 200% funding.
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To further align the economic interests of our NEOs with those of our stockholders, earned annual incentive amounts were generally delivered as 58%76% in cash and 42%24% in vested shares of the
Company’s common stock for 2016.2022. The following table lists the actual awards and bonuses earned by our active NEOs for 2022 (and paid in 2023).
|
| Actual Payout |
|
| Actual Payout ($) | ||||
NEO |
| (as a % of Funded Amount) |
|
| Cash(1) |
| Vested Shares(2) | ||
Matthew Flannery |
| 100% |
| 2,365,891 |
|
| 747,313 |
| |
William (Ted) Grace(3) |
| 100% |
| 526,491 |
|
| 166,592 |
| |
Dale Asplund |
| 100% |
| 1,055,375 |
|
| 333,655 |
| |
Craig Pintoff |
| 100% |
| 864,229 |
|
| 272,948 |
| |
Andrew Limoges |
| 100% |
| 301,110 |
|
| 95,532 |
| |
Jeff Fenton(4) |
| 100% |
| 344,145 |
|
| — |
|
NEO
| Actual Payout (As a % of
| Actual Payout ($)
| ||||
Cash(2)
| Vested Shares(2)
| |||||
Michael Kneeland | 110% | $674,590 | $488,496 | |||
William Plummer(1) | 110% | $274,087 | $166,567 | |||
Matthew Flannery | 110% | $255,579 | $185,075 | |||
Dale Asplund(1) | 115%(3) | $275,455 | $126,669 | |||
Craig Pintoff | 115%(3) | $211,581 | $153,213 |
As discussed below under “Stock Ownership Guidelines,”nearest dollar.
Long-Term Incentive Plan (LTIP)(“LTIP”) (Equity Compensation)
Equity compensation directly aligns the interests of the NEOs with those of our stockholders. In 2016,2022, the Company granted annual equity compensation awards under our Second Amended and Restated 2010the 2019 Long-Term Incentive Plan (“2010 LTIP”) as follows:follows (these charts do not include any one-time grants or awards):
Performance-based RSUsrestricted stock units (“PRSUs”) are earned and vest only when a specified performance level is achieved. Time-based RSUsrestricted stock units (“RSUs”) vest ratably over a three-year period based solely on continued service. Time-based RSUs help to secure and retain executives and instill an ownership mentality. Historically, the Company’s PRSUs and time-based RSUs have not earned any dividend equivalents. However, on January 25, 2023, in connection with our decision to initiate a quarterly dividend, the Board approved an amendment to all outstanding employee PRSUs and RSUs to provide for dividend equivalents. Accordingly, all such awards by the NEOs were amended to provide for payment of cash dividend equivalent amounts if and to the extent the corresponding units are earned, vested and settled.
2016
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2022 LTIP Target Award GrantsAwards
In determining the size of each equity award granted, the Committee considers a variety of factors, including benchmarking data on competitive long-term incentive values, the percentage of long-term incentive value to be allocated to performance-based RSUsPRSUs and time-based RSUs, and the NEO’s position within the Company.
The actual number of PRSUs and time-based RSUs (both performance-based and time-based)
granted is calculated by dividing the dollar value of the target award by the closing price of the Company’s stock on the equity award grant date. The closing price of the Company’s stock on March 3, 2022 (the date of the grant) was $328.64. The table below shows the target awardsPRSUs and time-based RSUs awarded for fiscal 20162022 for each of the NEOs:
NEO | Target Number of RSUs | |||
2016 Performance-Based RSUs(1) | 2016 Time-Based RSUs(2) | |||
Michael Kneeland | 83,543 | 20,866 | ||
William Plummer | 17,544 | 7,519 | ||
Matthew Flannery | 17,544 | 7,519 | ||
Dale Asplund | 11,696 | 5,013 | ||
Craig Pintoff | 10,527 | 4,512 |
(1) Earned PRSUs vest in one-third increments annually, subject to the satisfaction of the performance criteria described in the next section, “A Closer Look at Performance-Based RSUs (“PRSUs”).” (2) Except for the 2022 grant |
In addition, Mr. Pintoff received an additional 8,203Fenton discussed below, time-based RSUs vest in one-third increments on January 11, 2016each anniversary of the grant date, generally subject to continued employment.
A Closer Look at Performance-Based RSUs (PRSUs)(“PRSUs”)
Performance-based RSUsPerformance criteria for our PRSUs measure year-over-year performance over the course of a three-year period, rather than a single measurementmeasuring performance once at the end of three years,the three-year period, to better account for the dynamic nature of our business. Accordingly,one-third of our NEOs’ performance-based RSUsPRSUs are eligible to vest each year, in an amount ranging from 0% to 300%200% of target, based on achievement of annual performance metrics and generally subject to the NEO’s continued employment through fiscalyear-end. We measure performance annually because we operate in a highly cyclical and volatile business environment in which forecasting multi-year performance is extremely difficult and possibly counterproductive. By reestablishing goals annually, we ensure that we always have the appropriate criteria and rigor tied to the incentive performance targets. We maintain a long-term perspective by requiring multi-year vesting and denominating our awards in stock, which, coupled with our robust stock ownership guidelines, effectively aligns management’s long-term interests with those of our stockholders.
For 2016, the Committee selected total revenue and EPI as the relevant performance metrics. The chart below shows the performance goals set for total revenue and EPI, as well as actual results. Total revenue and EPI were weighted equally. Consistent with our program structure, these metrics applied to the first tranche of performance-based RSUs awarded in 2016; the second tranche of performance-based RSUs awarded in 2015; and the third tranche of performance-based RSUs awarded in 2014.63
Payout Level | % of Target | 2016 Performance Metrics ($M) | ||||||
Total Revenue (50% weighting)(1) | EPI (50% weighting)(1) | |||||||
Maximum | 200 | % | $6,051 | $23 | ||||
Target | 100 | % | $5,851 | $(12) | ||||
Threshold | 50 | % | $5,451 | $(82) | ||||
Below Threshold | 37.5 | % | N/A | $(116) | ||||
Actual(1)(2) |
| $5,757 | $(57) | |||||
88.3% of Target | 67.9% of Target | |||||||
Earned Amount |
| 78.0% of Target |
Understanding the Differences: Reported PRSUs in the Summary Compensation Table vs. Target PRSUs Approved by the Committee As discussed above, PRSUs vest annually over a three-year period based on the attainment of performance goals that are set and measured in each year of the three-year period. While the annual goal-setting feature is appropriate due to the highly-cyclical and volatile business environment in which we operate, it can result in differences between the reported PRSU award grant date fair value (“GDFV”) in the Summary Compensation Table and the target PRSU award GDFV that is approved by the Committee based on targeted market position and performance. The differences in GDFVs are due to the SEC requirement that PRSU award values disclosed in the Summary Compensation Table reflect the GDFV of the PRSU as determined under SEC accounting rules, which stipulate that grant date is established when the underlying terms of the award are fixed. Because our PRSU goals are set on an annual basis, the grant date and associated award fair value are established annually over the three-year performance period—resulting in differences between what is reported in the Summary Compensation Table (further described in footnote 4 thereto) and the amount of the award the Committee originally awarded. In years when the stock price declines, the reported PRSU award GDFV will be lower than the target GDFV. In years when the stock price increases, the reported PRSU award GDFV will exceed the target GDFV. 2022 CEO Impact: The reported PRSU award GDFV in the 2022 Summary Compensation Table for Mr. Flannery of $7,040,783 compared to |
Performance-based RSUs are also subject to a multiplier based on ROIC (excluding goodwill from the denominator), which provides for a maximum upside opportunity of 300% of target. Achievement of ROIC above 12% would result in applying a multiplier ranging from 1 to 1.5 to the amount otherwise earned, calculated based on straight-line interpolation with the multiplier rounded down, rather than applying at an amount beyond the first decimal point (e.g., if ROIC performance would extrapolate to a 1.27 multiplier, the multiplier would be rounded down to 1.2). No multiplier was achieved for 2016.
2016 LTIP2022 PRSU Outcomes
Based on 2016 performance2022 results, the Committee determined that 78.0%200% of the target performance-based RSUsPRSUs were earned for the performance cycle. These PRSUs were settled in shares of the Company’s common stock in the first quarter of 2017.
One-Time Supplemental RSU Awards
The Committee also determined to awardone-time supplemental RSU awards to certain key employees, including our NEOs, in March 2016. These grants, designed to retain and incentivize our key leadership, will cliff vest and be settled in shares in 2019, subject to continued employment (and no retirement vesting treatment), in order to further promote leadership continuity. In its determination to make these supplemental awards,2023. For 2022, the Committee consideredselected total revenue and ROIC (as defined on page 47 of this Proxy Statement) as the retentive valuerelevant performance metrics. The chart below shows the performance goals set for total revenue and ROIC, as well as actual results. Consistent with our program structure, these metrics applied to the first tranche of currently outstanding awardsPRSUs awarded in 2022, the second tranche of PRSUs awarded in 2021, and the fact thatthird tranche of PRSUs awarded in 2020.
|
|
|
| 2022 Performance Metrics ($M)(1) | ||
Payout Level | % of Target |
|
| Total Revenue (50% weighting)(2) | ROIC (50% weighting)(2) | |
Maximum | 200% |
| $11,433 | 12.50% |
| |
Target | 100% |
| $10,933 | 11.30% |
| |
Threshold | 50% |
| $10,100 | 9.25% |
| |
Actual(2)(3) |
| $11,676 | 12.75% |
| ||
| 200% of Target | 200% of Target | ||||
Earned Amount |
| 200% of Target |
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Other Practices, Policies and 6,684 for Mr. Pintoff.Guidelines
OTHER PRACTICES, POLICIES AND GUIDELINES
Stock Ownership Guidelines
Stock ownership guidelines are a key vehicle for aligning the interests of management and the Company’s stockholders. A meaningful direct ownership stake by our NEOs demonstrates to our investors that each NEO has a strong commitment to the Company’s success. The Committee maintains stock ownership guidelines for our NEOs and other Company officers with a title of vice president and above. For 2016,2022, our stock ownership guidelines were as follows:
Title | Multiple of Base Salary | |||
CEO | 6.0x | |||
| 3.0x | |||
Senior Vice Presidents | 2.0x | |||
Vice Presidents and Region Vice Presidents | 1.0x |
Shares that count toward meeting these ownership guidelines include: shares directly owned by the executive; shares beneficially owned by the executive, such as shares held in “street name” through a broker or shares held in trust; amounts credited to the executive’s deferred compensation or to 401(k) accounts that are invested or deemed invested in the Company’s common stock;and unvested restricted stock or RSUs that vest solely based on continued service; and the value of the spread (the difference between the exercise price and the full market value of the Company’s common stock) of fully vested stock options.service.
Until the guidelines are met, NEOs and other officers are required to retain 50% of the net shares of the Company’s common stock received upon the exercise, vesting or payment of equity-based awards granted by the Company. Each of the NEOs had satisfied the stock ownership guidelines when their holdings were measured as of March 2017.
In March 2017, the Committee approved the following changes to our stock ownership guidelines:
| ||||
| ||||
| ||||
|
The new guidelines are effective for 2017, but ourfuture vestings. NEOs and other Company officers have five years to come into compliance whenfrom becoming a covered employee or moving to a position with a higher ownership level or fromto come into compliance with the dateguidelines. Each of a higher ownership level for the same position.NEOs was in compliance with these guidelines as of December 31, 2022.
Anti-Hedging Policy; Anti-Pledging Policy
The Company’s insider trading policy prohibits directors, officers, employees and consultants (including each of our NEOs) as well as certain of the covered person’s family members, others living in the covered person’s household, or entities whose transactions in Company prohibitssecurities are subject to the covered person’s influence or control from trading in securities of the Company (or securities of any other company with which the Company does business) while in possession of material nonpublic information, other than in connection with a Rule 10b5-1 plan adopted in compliance with the policy. Such individuals are also restricted from engaging in hedging transactions designed to limit or eliminate economic risks to our NEOs from owningon the Company’s common stock, suchpledging Company common stock as collateral for a margin loan, or from engaging in short sale transactions, involvingcredit default swaps and transactions in options (other than the exercise of stock options granted under the Company’s equity incentive plans), puts, calls or other derivative securities tied to Company securities.
In addition, before any director or executive officer engages in a transaction involving Company securities, such director or executive officer must obtain pre-clearance and approval of the transaction from the Company’s common stock. On an annual basis, we also ask our directorsGeneral Counsel.
Clawback Policy
The Committee approved a standalone and executivecentralized clawback policy effective February 15, 2021 that applies to all Section 16 officers and other individuals as designated by the Board or Committee. The policy expanded the prior “injurious conduct provision” that already applied to identify any shares ofall equity awards granted by the Company common stock pledged in a margin brokerage account or otherwise used as collateral to support a borrowing. In response, no such directors or executive officers reported any shares pledged for such purpose in 2016. Further, in 2016, we amended our insider trading policy to prohibit the pledging of Company stock,since 2009, including use as collateral for a margin loan,those held by directors, officers, employees and consultantseach of the CompanyNEOs, to include AICP awards. The lookback was extended to apply to covered compensation that was paid to, and its subsidiaries.
Clawback
We include “clawback” provisionsreceived by, the covered employee on or after the date which is one year prior to the date the injurious conduct occurred. The policy also includes an updated “mandatory restatement” provision (currently included in our NEOs’ equity award agreements and certainthe Company’s employment agreements with certain NEOs) that generally requirerequires reimbursement of amounts paid under performance provisions (in the case of cash incentives and performance-based RSUs)compensation if amounts were paid or shares vested based on financial results that subsequently become subject to certain “mandatory”mandatory restatements that would have led to lower payments or forfeiture(or zero) payment. The Company expects to adopt a revised clawback policy regarding accounting restatements in accordance with the SEC’s adoption of all or a portionnew rules to implement
65
Section 954 of shares subject to an award.the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 once final rules are adopted by the NYSE.
As summarized above, the Company’s updated clawback policy consolidated and expanded the policies that the Company previously had in place. For all PRSU, time-based RSU and stock option awards sincegranted after 2009 including both time-based and performance-based RSUs,before the 2021 clawback policy went into effect, the award formsagreements include an “injurious conduct” provision that requires forfeiture of the award or, to the extent the award has vested or been exercised within six months prior to the occurrence of the relevant conduct, mandates reimbursement of shares or amounts realized. The injurious conduct concept is generally focused on actions that would constitute “cause” under an employment agreement, namely, actions that are in material competition with the Company or breach the executive’s duty of loyalty to the Company.
Termination and Change in Control Benefits
The provision of reasonable severance benefits is common among similar companies and is essential to recruiting and retaining key executives. Accordingly, the employment agreements with our NEOs generally provide for varying levels of severance in the event that the Company terminates the executive’s employment without “cause” or the executive resigns withfor “good reason” (each as defined in the applicable employment agreement, with the executive, as set forthdescribed in more detail under “Benefits upon Termination of Employment”). Upon a qualifying termination, Mr. KneelandFlannery would receive 450%a severance payment equal to 200% of his annual base salary and target incentive opportunity for the then-current fiscal year paid over a two-year period; Mr. Grace would receive a severance payment equal to 100% of his annual base salary and target incentive opportunity for the then-current fiscal year paid over a one-year period; Mr. Asplund would receive a severance payment equal to 100% of his annual base salary paid over atwo-year one-year period; Mr. PlummerPintoff would receive 190%a severance payment equal to 100% of his annual base salary and target incentive opportunity paid over a one-year period; and Mr. Limoges would receive a severance payment equal to 100% of his annual base salary paid over aone-year period; period. Prior to his retirement from the Company, upon a qualifying termination, Mr. FlanneryFenton would receive 380% of his base salary paid overhave received atwo-year period; Mr. Asplund would receive severance payment equal to 100% of his annual base salary and target incentive opportunity paid over aone-year period; and period. Upon a qualifying termination, the Company would also provide each NEO, other than Mr. Pintoff would receive 180% of his base salary paid over aone-year period. The Company also typically provides each NEOLimoges, with COBRA continuation coverage for a 1212- to 18 month18-month period.
Severance payments to the NEOs are conditioned on the execution of a release of claims in favor of the Company. In addition, each of the NEOs is subject tonon-competition andnon-solicitation restrictions for a period of time following their termination, as described in more detail under “Benefits
upon Termination of Employment.”
All unvested PRSUs, time-based RSUs and stock options granted to each of the NEOs since 2011 provide for forfeiture on the NEO’s termination of employment for any reason, except in the case of a qualifying termination following a change in control or upon death, disability or retirement, each as described below. UponFollowing a termination without cause or a resignation for good reason, vested stock options will remain outstanding and exercisable for 30 days following such termination, and will remain outstanding and exercisable for one year following a termination as a result of death or permanent disability, a pro rata portion ofdisability.
For PRSU awards, upon an awardee’s death, all units that could have been earned for the awardsperformance period in which the death occurs will vest based on target performance, and upon an awardee’s permanent disability, all units that could have been earned for the number of days between the beginning of the applicable performance period andin which the datedisability occurs will vest based on actual performance. The time-based RSU awards provide for vesting of termination. For awards made beginning in 2016,all outstanding units upon death or permanent disability.
Upon a termination as a result of retirement, time-based RSUs awarded will vest and be delivered on the normal settlement schedule,upon such retirement. Outstanding PRSU awards will remain outstanding and performance-based RSUs will vest based on actual performance for the full performance period and be delivered on the normal settlement schedule.
For the NEOs, other than Mr. Kneeland, retirement requires: (1) attainment of age 60; (2) age plus years of continuous service equal to at least 70; and (3) at least one year’s prior written notice of retirement. For Mr. Kneeland, retirement treatment is only available for grants outstanding for at least six months prior to retirement and requires attainment of age 65.unless otherwise determined by the Committee.
The prospect of a change in control of the Company can cause significant distraction and uncertainty for executive officers and, accordingly, the Committee believes that appropriate change in control provisions
66
are important tools for aligning executive interests in change in control scenarios with those of stockholders. In addition, changes to the Company following a change in control may affect the ability to achieve previously set performance measures. Consequently, outstanding RSUs and stock option awards held by the NEOs provide for “double trigger” treatment upon a change in control. A “change in control” for this purpose is defined in the employment agreement with the executive orfor Mr. Flannery, in the applicable award agreement or in the LTIP, as set forth in more detail under “Benefits upon a Change in Control.” If the change in control results in shares of common stock of the Company (or any direct or indirect parent entity) being publicly traded and the grantee’s employment is terminated by the Company without “cause” or by the individual for “good reason” within the 12 months following the change in control, then all such RSUs and stock options will vest in full, and all performance conditions for performance-based RSUsPRSUs will be deemed satisfied at the target level, only if there is also a termination by the Company without “cause” or by the individual for “good reason” within 12 months following the change in control.level. However, in the limited circumstances that the change in control results in none of the common stock of the Company (or any direct or indirect parent entity) being publicly traded following a change in control, then all such RSUs and stock optionsoutstanding awards will vest in full, and all performance conditions for performance-based RSUsPRSUs will be deemed satisfied at their target level upon the date of such change in control.
The Internal Revenue Code imposes an excise tax on the value of certain payments that are contingent upon a change in control, referred to as parachute payments, which exceed a safe harbor amount. The Company does not provide any executive with agross-up for any excise tax that may be triggered. Mr. Kneeland’sThe employment agreement for Mr. Flannery provides that if hethe executive receives payments that would result in the imposition of the excise tax, such payments will be reduced to the safe harbor amount so that no excise tax is triggered if the netafter-tax benefit to him is greater than the netafter-tax benefit that he would receive if no reduction occurred.
The severance and change in control provisions of our NEOs’ employment agreements and other arrangements are described in detail in the sections “Benefits upon Termination of Employment” and “Benefits upon a Change in Control,” respectively.
Employment Agreements
We have entered into employment agreements with each of the NEOs: for Mr. Kneeland,Flannery, effective August 22, 2008;May 8, 2019; for Mr. Plummer,Grace, effective December 1, 2008; for Mr. Flannery, effective March 12, 2010;July 29, 2022, and amended November 3, 2022; for Mr. Asplund, effective April 28, 2008;2008, and amended April 3, 2013; for Mr. Pintoff, effective January 20, 2016.2016, and amended April 23, 2021; and for Mr. Limoges, effective October 12, 2018.
The employment agreements for Messrs. Flannery and Pintoff generally provide that the NEOsthey are entitled to participate in the Company’s benefit plans and programs, to the extent otherwisesuch NEO is eligible under the terms thereof, the benefit plans and programs, and receive the benefits and perquisites generally provided by us to our executives, including family medical insurance (subject to applicable employee contributions). Upon a termination of employment or(including, for Mr. Flannery, a termination following a change in control of the Company,Company), the employment agreements provide for the benefits described above under
“Termination “Termination and Change in Control Benefits,” and below under “Benefits upon Termination of Employment” and “Benefits upon a Change in Control.”
The employment agreements also generally provide that, during the period of employment, the NEO shall not engage in any activity that would conflict with the executive’s duties and cannot engage in any other employment. In addition, the employment agreements generally provide fortwo-year(one-year indefinite confidentiality obligations as well as post-termination non-compete and non-solicit restrictions for two years for Messrs. PlummerFlannery, and Pintoff)non-competeAsplund, andnon-solicit restrictions. one year for Messrs. Grace, Pintoff and Limoges.
Indemnification Agreements
We have entered into indemnification agreements with each of the NEOs. These agreements provide, among other things, for us to indemnify and advance expenses to the NEOs against specified claims and liabilities that may arise in connection with each NEO’s services to the Company.
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Other Benefits and Perquisites
Nonqualified Deferred Compensation Plan
The Company’s nonqualified deferred compensation plan, the Executive Nonqualified Excess Plan (“ENEP”), is an unfunded plan. The participants in the plan are unsecured general creditors of the Company. The ENEP permits a select group of management and other highly compensated employees, including the NEOs, and independent contractors of the Company to defer all or part of their base salary and annual incentive compensation. Deferred amounts are credited with earnings (or losses) based on the investment experience of measurement indices selected by the participant from among the choices offered by the plan. The ENEP also provides for additional credits that are discretionary on the part of the Company. The Company did not make any contributions to the ENEP in 2016.2022.
Retirement Benefits
The Company maintains a 401(k) plan for all nonunion employees that reside in the United States, and certain union employees that reside in the United States as outlined in their collective bargaining agreements, and provides discretionary employer-matching contributions (subjectan Employer Safe Harbor Matching Contribution based on an employee’s contribution election. The employer match is subject to certain limitations, including for 2022 an annual limitmaximum of $3,000 for 2016 foremployees deemed to be highly compensated employees (including our NEOs) based on an employee’s contributions..
Perquisites and Other Personal Benefits
We maintain various employee benefit programs, including health and medical benefits, for all of our employees, including our NEOs. In addition, all executives who are senior vice presidents or above, including the NEOs, are eligible to participate inreceive an Executive Wellness Program.annual wellness exam.
The Company does not have a formal perquisite policy, although the Committee periodically reviews perquisites for our NEOs. Rather, thereThere are certain specific perquisites and benefits with whichthat the Company has agreed to compensateprovide to particular executives based on their specific situations. Among these are relocation costs, including temporary housing and living expenses, and use of Company vehicles. In order to make travel time
Please see the “All Other Compensation” column of the “Summary Compensation Table” on page 71 of this Proxy Statement for more conducive to work-related activities, we may periodically provide our executives with business-class travel on commercial airlines when traveling for work-related matters.information.
Tax and Accounting Considerations
When reviewing compensation matters, theThe Committee considers certain tax implications when designing the anticipated tax and accounting treatmentCompany’s executive compensation programs, including the deductibility of various payments; the impactcompensation paid to the Company; and, when relevant, to the executive.
our NEOs. Section 162(m) of the Internal Revenue Code of 1986, as amended, generally limits to $1 million the annual tax deduction for compensation paid to each of the chief executive officer and the three other highest-paid executive officers employed at the end of the year (other than the chief financial officer). However, compensation that does not exceed $1 million during any fiscal year or that qualifies as
“performance-based compensation” (as defined under applicable tax regulations) is deductible. The Committee considers these requirements when designing compensation programs for our NEOs.
Both the AICP and the 2010 LTIP are designed to allow for the issuance of awards that satisfy the “performance-based compensation” exception under Section 162(m). These plans operate separately and each permits payment in both cash and stock-based awards, so as to maximize the Company’s flexibility to award deductible compensation while maintaining a pay structure consistent with our compensation philosophy. In the first quarter of 2016, the Committee established performance criteria and set 0.313% of adjusted EBITDA (defined as set forth on page 24 of the Company’s Form10-K for the year ended December 31, 2016) as the Section 162(m)-compliant maximum for the aggregate amount of incentives awarded to the NEOs under the AICP for the 2016 performance period. This limit does not serve as a basis for the Committee’s compensation decisions for our NEOs, but rather provides for the maximum amount oftax-deductible incentive compensation that the Committee can award to the NEOs under the AICP, with the Committee retaining the discretion to pay less than the maximum. Once the maximum amount was established, actual award levels were determined based on achievement under the Company’s 2016 incentive program. Similarly, for Section 162(m) purposes, the Committee established a minimum adjusted EBITDA metric as a prerequisite for funding of the 2016 performance-based RSUs at maximum, with actual award levels determined based on achievement under the 2016 incentive program.
Although the Company has plans that permit the award of deductible compensation under Section 162(m), the Committee does not necessarily limit executive compensation to the amount deductible under that provision. Rather, it considers the available alternatives and acts to preserve the deductibility of compensation paid to certain executive officers in excess of $1 million during a year. The Committee believes that tax deductibility is only one of several relevant considerations in setting compensation, and that the tax deduction limitation should not be permitted to compromise the Committee's ability to structure its discretioncompensation to the extent reasonably practicableattract, retain and consistent with its other compensation objectives. In certain situations, the Committee may in its discretion approve compensation that will not meet these requirements when it determines that such payments are in the best interests ofappropriately motivate executive officers, thus providing benefits to the Company and ourits stockholders such asthat outweigh the potential benefit of the tax deduction. Accordingly, the Committee has discretion to ensure competitive levels of totalapprove and authorize compensation that is not deductible for the NEOs, or for other reasons.
Compensation and Risk Management
The Committee performs an annual risk assessment of our executive compensation programs. In 2016,2022, the Committee considered both risk mitigators and risk aggravators—that is, elements of the executive compensation architecture that potentially mitigate excessive risk or encourage risk-taking, respectively. On balance, the Committee found that the sum total of the risk mitigators greatly outweighed the risk aggravators. The risk mitigators include: the opportunity for stockholders to cast advisory votes on executive compensation, stock ownership guidelines for executives, an independent compensation committee and compensation consultant, clawback provisions in employment and equity award agreements, a clearly defined pay philosophy, peer group and market positioning to support the
68
Company’s business objectives, provisions enabling the use of negative discretion in certain payouts, and an effective balance of cash and equity compensation.
In performing its assessment, the Committee took into account the annualsenior management’s risk review of the Company’s compensation programs led by the Enterprise Risk Management Council comprised of senior representatives from field operations and from each of the primary corporate functions.
The Enterprise Risk Management Council leads a review ofhuman capital programs. Senior management reviews the Company’s compensationhuman capital policies and practices annually(including compensation) to ensure that they appropriately balance short-term and long-term goals and risks and rewards. Specifically, thisthe review includes the annual cash incentive program that covers all senior management and a broad employee population, and equity compensation. These plans are designed to focus senior management and employees on increasing stockholder value and enhancing financial results. Based on thisthe Committee’s comprehensive review in 2016,2022, we concluded that our compensation program does not encourage excessive risk-taking.risk-taking and is not reasonably likely to have a material adverse effect on the Company. We are confident that our program is aligned with the interests of our stockholders and appropriately rewards for performance.
69
Compensation Committee Report
The Compensation Committee has reviewed the Compensation Discussion & Analysis required by Item 402(b) of RegulationS-K and discussed that analysis with management and with the Compensation Committee’s independent compensation consultant. Based on this review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion & Analysis be included in the Company’s annual report on Form10-K and in this Proxy Statement.
THE COMPENSATION COMMITTEE | ||
Gracia C. Martore, Chair Marc A. Bruno Kim Harris Jones Terri L.
|
70
Summary Compensation Table
The table below summarizes the total compensation paid to or earned by each of the NEOs for the fiscal years ended December 31, 2016, 20152022, 2021 and 2014.2020.
Name and |
| Year |
|
Salary ($) |
| Bonus ($)(1) |
| Stock Awards ($)(2)(3)(4) |
| Option Awards ($) |
| Non-Equity Incentive Plan Compensation ($) |
| All Other Compensation ($)(5) |
| Total ($) | |
Matthew Flannery |
| 2022 |
| 1,037,671 | (6) |
| — |
| 8,240,977 |
| — |
| 3,113,203 |
| 22,317 |
| 12,414,168 |
President and Chief |
| 2021 |
| 987,681 |
|
| — |
| 9,137,915 |
| — |
| 2,568,187 |
| 22,317 |
| 12,716,100 |
Executive Officer |
| 2020 |
| 925,167 |
|
| 330,747 |
| 4,881,735 |
| — |
| 377,052 |
| 11,505 |
| 6,526,206 |
William (Ted) Grace |
| 2022 |
| 456,525 | (7) |
| — |
| 1,238,004 |
| — |
| 693,083 |
| 3,000 |
| 2,390,612 |
Executive Vice President, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chief Financial Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dale Asplund |
| 2022 |
| 694,325 | (8) |
| — |
| 3,515,791 |
| — |
| 1,389,030 | (13) | 13,245 |
| 5,612,391 |
Executive Vice President, |
| 2021 |
| 659,347 |
|
| — |
| 2,772,421 |
| — |
| 1,319,017 |
| 13,245 |
| 4,764,030 |
Chief Operating Officer |
| 2020 |
| 607,093 |
|
| 179,489 |
| 1,641,239 |
| — |
| 171,291 |
| 3,000 |
| 2,602,112 |
Craig Pintoff |
| 2022 |
| 631,746 | (9) |
| — |
| 2,302,123 |
| — |
| 1,137,177 |
| 12,822 |
| 4,083,868 |
Executive Vice President, |
| 2021 |
| 606,952 |
|
| — |
| 2,567,561 |
| — |
| 1,092,565 |
| 12,822 |
| 4,279,900 |
Chief Administrative Officer |
| 2020 |
| 580,681 |
|
| 171,680 |
| 1,596,806 |
| — |
| 163,839 |
| 3,000 |
| 2,516,006 |
Andrew Limoges |
| 2022 |
| 330,164 | (10) |
| — |
| 297,748 |
| — |
| 396,642 |
| 3,000 |
| 1,027,554 |
Vice President, Controller |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and Principal Accounting Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jessica Graziano |
| 2022 |
| 353,945 | (11) |
| — |
| 2,096,066 |
| — |
| — |
| 7,882 |
| 2,457,893 |
Former Executive Vice |
| 2021 |
| 588,613 |
|
| — |
| 2,320,639 |
| — |
| 1,059,590 |
| 12,532 |
| 3,981,374 |
President, Chief Financial Officer |
| 2020 |
| 537,293 |
|
| 126,936 |
| 1,276,093 |
| — |
| 144,707 |
| 3,000 |
| 2,088,029 |
Jeffrey Fenton |
| 2022 |
| 323,690 | (12) |
| — |
| 974,089 |
| — |
| 344,145 | (14) | 15,410 |
| 1,657,334 |
Former Senior Vice President, |
| 2021 |
| 430,129 |
|
| — |
| 1,316,613 |
| — |
| 688,343 |
| 15,410 |
| 2,450,495 |
Business Development |
| 2020 |
| 416,043 |
|
| 91,529 |
| 869,590 |
| — |
| 104,344 |
| 3,000 |
| 1,484,506 |
________________
Assumptions used to calculate these amounts are set forth in footnote 2 to “Grants of Plan-Based Awards in 2022” below and in “Notes to Consolidated Financial Statements—2. Summary of Significant Accounting Policies—Stock-Based Compensation” in the Company’s Form 10-K for the year ended December 31, 2022.
71
72
Name and | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1)(2)(3) | Option Awards ($)(1) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($)(6) | Total ($) | ||||||||||||||||||||||||
Michael Kneeland | 2016 | 950,000 | (7) | — | 9,522,541 | (5) | — | 1,163,086 | 3,000 | 11,638,27 | ||||||||||||||||||||||
President and | 2015 | 950,000 | — | 6,353,954 | (4) | — | 770,925 | 3,000 | 8,077,879 | |||||||||||||||||||||||
Chief Executive Officer | 2014 | 950,000 | — | 5,555,756 | — | 1,894,063 | 3,000 | 8,402,819 | ||||||||||||||||||||||||
William Plummer | 2016 | 595,504 | (8) | — | 2,184,882 | (5) | — | 440,654 | 3,000 | 3,224,040 | ||||||||||||||||||||||
Executive Vice | 2015 | 576,800 | — | 1,372,779 | (4) | — | 283,571 | 3,000 | 2,236,150 | |||||||||||||||||||||||
President and Chief | 2014 | 551,221 | — | 1,219,938 | — | 803,880 | 3,000 | 2,578,039 | ||||||||||||||||||||||||
Financial Officer | ||||||||||||||||||||||||||||||||
Matthew Flannery | 2016 | 595,504 | (9) | — | 2,184,882 | (5) | — | 440,654 | 3,000 | 3,224,040 | ||||||||||||||||||||||
Executive Vice | 2015 | 576,800 | — | 1,372,779 | (4) | — | 283,571 | 3,000 | 2,236,150 | |||||||||||||||||||||||
President and Chief | 2014 | 548,668 | — | 1,219,938 | — | 803,880 | 3,000 | 2,575,486 | ||||||||||||||||||||||||
Operating Officer | ||||||||||||||||||||||||||||||||
Dale Asplund | 2016 | 519,807 | (10) | — | 1,474,422 | (5) | — | 402,124 | 3,000 | 2,399,353 | ||||||||||||||||||||||
Senior Vice President | 2015 | 503,779 | — | 956,418 | (4) | — | 242,025 | 3,000 | 1,705,222 | |||||||||||||||||||||||
Business Services and | 2014 | 479,343 | — | 963,885 | — | 667,205 | 3,000 | 2,113,433 | ||||||||||||||||||||||||
Chief Information Officer | ||||||||||||||||||||||||||||||||
Craig Pintoff | 2016 | 473,046 | (11) | — | 1,634,691 | — | 364,794 | 3,000 | 2,475,531 | |||||||||||||||||||||||
Senior Vice President, | ||||||||||||||||||||||||||||||||
General Counsel and | ||||||||||||||||||||||||||||||||
Human Resources |
Grants of Plan-Based Awards in 20162022
The table below summarizes the equity andnon-equity awards granted to the NEOs in 2016.2022.
Name |
| Grant Date |
| Estimated Future Payouts Under Non-Equity Incentive Plan Awards |
| Estimated Future Payouts Under Equity Incentive Plan Awards |
| All Other Stock Awards: Number of Shares of Stock or Units (#)(1) |
| All Other Option Awards: Number of Securities Underlying Options (#) |
| Exercise or Base Price of Option Awards ($/Sh) |
| Grant Date Fair Value of Stock and Option Awards ($)(2) | |||||||||
|
|
|
|
| Threshold ($)(3) |
| Target ($)(3) |
| Maximum ($)(3) |
| Threshold (#)(4) |
| Target (#)(4) |
| Maximum (#)(4) |
|
|
|
|
|
|
|
|
Matthew Flannery |
| 3/3/2022 |
|
| — |
| — |
| — |
| 5,634 |
| 11,268 |
| 22,536 |
| — |
| — |
| — |
| 3,703,116 |
|
| 3/3/2022 |
|
| — |
| — |
| — |
| 2,644 |
| 5,288 |
| 10,576 |
| — |
| — |
| — |
| 1,737,848 |
|
| 3/3/2022 |
|
| — |
| — |
| — |
| 2,434 |
| 4,868 |
| 9,736 |
| — |
| — |
| — |
| 1,599,820 |
|
| 3/3/2022 |
|
| — |
| — |
| — |
| — |
| — |
| — |
| 3,652 |
| — |
| — |
| 1,200,193 |
|
|
|
|
| 778,253 |
| 1,556,507 |
| 3,424,315 |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
William (Ted) Grace |
| 3/3/2022 |
|
| — |
| — |
| — |
| 269 |
| 538 |
| 1,076 |
| — |
| — |
| — |
| 176,808 |
| 3/3/2022 |
|
| — |
| — |
| — |
| 116 |
| 231 |
| 462 |
| — |
| — |
| — |
| 75,916 | |
|
| 3/3/2022 |
|
| — |
| — |
| — |
| 107 |
| 213 |
| 426 |
| — |
| — |
| — |
| 70,000 |
|
| 3/3/2022 |
|
| — |
| — |
| — |
| — |
| — |
| — |
| 274 |
| — |
| — |
| 90,047 |
|
| 8/1/2022 |
|
| — |
| — |
| — |
| — |
| — |
| — |
| 1,017 |
| — |
| — |
| 325,115 |
|
| 11/3/2022 |
|
| — |
| — |
| — |
| — |
| — |
| — |
| 1,581 |
| — |
| — |
| 500,118 |
|
|
|
|
| 173,188 |
| 346,375 |
| 762,026 |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
Dale Asplund |
| 3/3/2022 |
|
| — |
| — |
| — |
| 1,408 |
| 2,815 |
| 5,630 |
| — |
| — |
| — |
| 925,122 |
|
| 3/3/2022 |
|
| — |
| — |
| — |
| 771 |
| 1,542 |
| 3,084 |
| — |
| — |
| — |
| 506,763 |
|
| 3/3/2022 |
|
| — |
| — |
| — |
| 888 |
| 1,775 |
| 3,550 |
| — |
| — |
| — |
| 583,336 |
|
| 3/3/2022 |
|
| — |
| — |
| — |
| — |
| — |
| — |
| 2,283 |
| — |
| — |
| 750,285 |
|
| 3/3/2022 |
|
| — |
| — |
| — |
| — |
| — |
| — |
| 2,283 |
| — |
| — |
| 750,285 |
|
|
|
|
| 347,163 |
| 694,325 |
| 1,527,516 |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
Craig Pintoff |
| 3/3/2022 |
|
| — |
| — |
| — |
| 1,363 |
| 2,725 |
| 5,450 |
| — |
| — |
| — |
| 895,544 |
| 3/3/2022 |
|
| — |
| — |
| — |
| 663 |
| 1,326 |
| 2,652 |
| — |
| — |
| — |
| 435,777 | |
| 3/3/2022 |
|
| — |
| — |
| — |
| 646 |
| 1,292 |
| 2,584 |
| — |
| — |
| — |
| 424,603 | |
|
| 3/3/2022 |
|
| — |
| — |
| — |
| — |
| — |
| — |
| 1,662 |
| — |
| — |
| 546,200 |
|
|
|
|
| 284,286 |
| 568,572 |
| 1,250,858 |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
Andrew Limoges |
| 3/3/2022 |
|
| — |
| — |
| — |
| 153 |
| 305 |
| 610 |
| — |
| — |
| — |
| 100,235 |
| 3/3/2022 |
|
| — |
| — |
| — |
| 77 |
| 154 |
| 308 |
| — |
| — |
| — |
| 50,611 | |
|
| 3/3/2022 |
|
| — |
| — |
| — |
| 98 |
| 195 |
| 390 |
| — |
| — |
| — |
| 64,085 |
|
| 3/3/2022 |
|
| — |
| — |
| — |
| — |
| — |
| — |
| 252 |
| — |
| — |
| 82,817 |
|
|
|
|
| 99,049 |
| 198,099 |
| 435,817 |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
Jessica Graziano |
| 3/3/2022 |
|
| — |
| — |
| — |
| 1,228 |
| 2,456 |
| 4,912 |
| — |
| — |
| — |
| 807,140 |
|
| 3/3/2022 |
|
| — |
| — |
| — |
| 606 |
| 1,211 |
| 2,422 |
| — |
| — |
| — |
| 397,983 |
|
| 3/3/2022 |
|
| — |
| — |
| — |
| 593 |
| 1,186 |
| 2,372 |
| — |
| — |
| — |
| 389,767 |
|
| 3/3/2022 |
|
| — |
| — |
| — |
| — |
| — |
| — |
| 1,525 |
| — |
| — |
| 501,176 |
|
|
|
|
| 160,018 |
| 320,035 |
| 704,077 |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
Jeffrey Fenton |
| 3/3/2022 |
|
| — |
| — |
| — |
| 717 |
| 1,434 |
| 2,868 |
| — |
| — |
| — |
| 471,270 |
|
| 3/3/2022 |
|
| — |
| — |
| — |
| 309 |
| 617 |
| 1,234 |
| — |
| — |
| — |
| 202,771 |
|
| 3/3/2022 |
|
| — |
| — |
| — |
| — |
| — |
| — |
| 913 |
| — |
| — |
| 300,048 |
|
|
|
|
| 86,036 |
| 172,072 |
| 378,559 |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
________________
73
Name | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | Estimated Future Payouts Under Equity Incentive Plan Awards | All Other Stock Awards: Number of Shares of Stock or Units (#)(1) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($)(2) | |||||||||||||||||||||||||||||||||||||
Threshold ($)(3) | Target ($)(3) | Maximum ($)(3) | Threshold (#)(4) | Target (#)(4) | Maximum (#)(4) | |||||||||||||||||||||||||||||||||||||||
Michael Kneeland | 1/26/2016 | — | — | — | — | — | — | 32,659 | — | — | 1,857,971 | |||||||||||||||||||||||||||||||||
3/7/2016 | — | — | — | — | — | — | 62,657 | — | — | 3,750,021 | ||||||||||||||||||||||||||||||||||
3/7/2016 | — | — | — | 13,924 | 27,848 | 83,541 | — | — | — | 1,666,703 | ||||||||||||||||||||||||||||||||||
3/7/2016 | — | — | — | 9,206 | 18,412 | 55,236 | — | — | — | 1,101,958 | ||||||||||||||||||||||||||||||||||
3/7/2016 | — | — | — | 9,573 | 19,146 | 57,438 | — | — | — | 1,145,888 | ||||||||||||||||||||||||||||||||||
712,500 | 1,425,000 | 3,526,875 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
William Plummer | 1/26/2016 | — | — | — | — | — | — | 5,905 | — | — | 335,935 | |||||||||||||||||||||||||||||||||
3/7/2016 | — | — | — | — | — | — | 17,545 | — | — | 1,050,068 | ||||||||||||||||||||||||||||||||||
3/7/2016 | — | — | — | 2,924 | 5,848 | 17,544 | — | — | 350,003 | |||||||||||||||||||||||||||||||||||
3/7/2016 | — | — | — | 1,740 | 3,480 | 10,440 | — | — | — | 208,278 | ||||||||||||||||||||||||||||||||||
3/7/2016 | — | — | — | 2,010 | 4,020 | 12,060 | — | — | — | 240,597 | ||||||||||||||||||||||||||||||||||
269,942 | 539,885 | 1,336,215 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Matthew Flannery | 1/26/2016 | — | — | — | — | — | — | 5,905 | — | — | 335,935 | |||||||||||||||||||||||||||||||||
3/7/2016 | — | — | — | — | — | — | 17,545 | — | — | 1,050,068 | ||||||||||||||||||||||||||||||||||
3/7/2016 | — | — | — | 2,924 | 5,848 | 17,544 | — | — | 350,003 | |||||||||||||||||||||||||||||||||||
3/7/2016 | — | — | — | 1,740 | 3,480 | 10,440 | — | — | — | 208,278 | ||||||||||||||||||||||||||||||||||
3/7/2016 | — | — | — | 2,010 | 4,020 | 12,060 | — | — | — | 240,597 | ||||||||||||||||||||||||||||||||||
269,942 | 539,885 | 1,336,215 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Dale Asplund | 1/26/2016 | — | — | — | — | — | — | 4,200 | — | — | 238,938 | |||||||||||||||||||||||||||||||||
3/7/2016 | — | — | — | — | — | — | 11,697 | — | — | 700,065 | ||||||||||||||||||||||||||||||||||
3/7/2016 | — | — | — | 1,950 | 3,899 | 11,697 | — | — | — | 233,355 | ||||||||||||||||||||||||||||||||||
3/7/2016 | — | — | — | 903 | 1,805 | 5,415 | — | — | — | 108,029 | ||||||||||||||||||||||||||||||||||
3/7/2016 | — | — | — | 281 | 562 | 1,686 | — | — | — | 33,636 | ||||||||||||||||||||||||||||||||||
3/7/2016 | — | — | — | 1,340 | 2,680 | 8,040 | — | — | — | 160,398 | ||||||||||||||||||||||||||||||||||
235,629 | 471,257 | 1,166,361 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Craig Pintoff | 1/11/2016 | — | — | — | — | — | — | 8,203 | — | — | 500,055 | |||||||||||||||||||||||||||||||||
3/7/2016 | — | — | — | — | — | — | 11,195 | — | — | 670,021 | ||||||||||||||||||||||||||||||||||
3/7/2016 | — | — | — | 1,755 | 3,509 | 10,527 | — | — | — | 210,014 | ||||||||||||||||||||||||||||||||||
3/7/2016 | — | — | — | 1,354 | 2,707 | 8,121 | — | — | — | 162,014 | ||||||||||||||||||||||||||||||||||
3/7/2016 | — | — | — | 774 | 1,547 | 4,641 | — | — | — | 92,588 | ||||||||||||||||||||||||||||||||||
237,505 | 427,509 | 1,058,085 | — | — | — | — | — | — | — |
|
Outstanding Equity Awards at FiscalYear-End
The table below summarizes the amount of unexercisedunvested RSUs and unvested stock options and unvested RSUsPRSUs for each NEO as of December 31, 2016.2022. No amounts are reflected for Ms. Graziano because her RSU awards were forfeited upon her resignation from the Company effective July 29, 2022. The vesting schedule for each grant can be found in the footnotes to this table, based on the grant date.
Name |
| Number of Securities Underlying Unexercised Options Exercisable (#) |
| Number of Securities Underlying Unexercised Options Unexercisable (#) |
| Option Exercise Price ($) |
| Option Expiration Date |
| Number of Shares or Units of Stock That Have Not Vested (#)(1) |
| Market Value of Shares or Units of Stock That Have Not Vested ($)(1)(2) |
| Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(3) |
| Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(2)(3) | |
Matthew Flannery |
| — |
| — |
| — |
| — |
| 51,961 | (4) |
| 18,467,979 |
| 15,026 |
| 5,340,541 |
William (Ted) Grace |
| — |
| — |
| — |
| — |
| 5,301 | (5) |
| 1,884,081 |
| 658 |
| 233,866 |
Dale Asplund |
| — |
| — |
| — |
| — |
| 19,358 | (6) |
| 6,880,220 |
| 5,093 |
| 1,810,154 |
Craig Pintoff |
| — |
| — |
| — |
| — |
| 14,654 | (7) |
| 5,208,325 |
| 3,912 |
| 1,390,403 |
Andrew Limoges |
| — |
| — |
| — |
| — |
| 1,824 | (8) |
| 648,286 |
| 546 |
| 194,059 |
Jessica Graziano |
| — |
| — |
| — |
| — |
| — |
|
| — |
| — |
| — |
Jeffrey Fenton |
| — |
| — |
| — |
| — |
| 5,015 | (9) |
| 1,782,431 |
| 617 |
| 219,294 |
________________
Name | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(1)(2) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(3) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(1)(2) | ||||||||||||||||||||||||
Michael Kneeland | 48,345 | — | 53.78 | 3/7/2023 | 127,849 | (4) | 13,498,297 | 74,841 | 7,901,713 | |||||||||||||||||||||||
32,007 | — | 41.25 | 2/16/2022 | |||||||||||||||||||||||||||||
38,580 | — | 31.49 | 3/8/2021 | |||||||||||||||||||||||||||||
84,431 | — | 8.32 | 3/10/2020 | |||||||||||||||||||||||||||||
William Plummer | 12,722 | — | 53.78 | 3/7/2023 | 32,893 | (5) | 3,472,843 | 15,717 | 1,659,401 | |||||||||||||||||||||||
9,602 | — | 41.25 | 2/16/2022 | |||||||||||||||||||||||||||||
13,500 | — | 31.49 | 3/8/2021 | |||||||||||||||||||||||||||||
85,000 | — | 8.32 | 3/10/2020 | |||||||||||||||||||||||||||||
100,000 | — | 3.38 | 3/13/2019 | |||||||||||||||||||||||||||||
Matthew Flannery | 12,722 | — | 53.78 | 3/7/2023 | 32,893 | (6) | 3,472,843 | 15,717 | 1,659,401 | |||||||||||||||||||||||
9,602 | — | 41.25 | 2/16/2022 | |||||||||||||||||||||||||||||
10,000 | — | 31.49 | 3/8/2021 | |||||||||||||||||||||||||||||
Dale Asplund | — | — | — | — | 21,986 | (7) | 2,321,282 | 10,477 | 1,106,162 | |||||||||||||||||||||||
Craig Pintoff | — | — | — | — | 29,824 | (8) | 3,148,818 | 8,894 | 939,029 |
74
|
Option Exercises and Stock Vested in 20162022
The table below summarizes, for each NEO, the number of shares acquired upon the exercise of stock options (with the value realized based on the difference between the closing price per share on the NYSE of our common stock and the exercise price on the date of exercise) and the vesting of stock awards in 20162022 (with the value realized based on the closing price per share on the NYSE of our common stock on the date of vesting). There were no outstanding options in 2022, and therefore no option exercises.
|
| Option Awards |
|
| Stock Awards | ||||||||||
Name |
| Number of Shares Acquired on Exercise (#) |
|
| Value Realized on Exercise ($) |
|
| Number of Shares Acquired on Vesting (#) |
|
| Value Realized on Vesting ($) | ||||
Matthew Flannery |
|
| — |
|
|
| — |
|
|
| 60,898 |
|
|
| 18,845,909 |
William (Ted) Grace |
|
| — |
|
|
| — |
|
|
| 3,597 |
|
|
| 1,120,205 |
Dale Asplund |
|
| — |
|
|
| — |
|
|
| 22,130 |
|
|
| 6,815,559 |
Craig Pintoff |
|
| — |
|
|
| — |
|
|
| 17,260 |
|
|
| 5,357,993 |
Andrew Limoges |
|
| — |
|
|
| — |
|
|
| 2,326 |
|
|
| 728,042 |
Jessica Graziano |
|
| — |
|
|
| — |
|
|
| 15,617 |
|
|
| 4,848,879 |
Jeffrey Fenton |
|
| — |
|
|
| — |
|
|
| 10,285 |
|
|
| 3,117,373 |
Name | Option Awards | Stock Awards | ||||||||||||||
Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | |||||||||||||
Michael Kneeland | 20,000 | 1,971,160 | 52,353 | 3,016,554 | ||||||||||||
William Plummer | — | — | 12,452 | 720,927 | ||||||||||||
Matthew Flannery | — | — | 12,452 | 720,927 | ||||||||||||
Dale Asplund | — | — | 7,590 | 438,185 | ||||||||||||
Craig Pintoff | — | — | 6,711 | 449,746 |
Pension Benefits
The Company does not maintain any defined benefit pension plans.
Nonqualified Deferred Compensation in 20162022
The ENEP is an unfunded plan and the participants in the plan are unsecured general creditors of the Company. The ENEP permits a select group of management and other highly compensated employees and independent contractors of the Company to defer all or part of their base salary, service-based bonus and performance-based compensation. Deferred amounts are credited with earnings (or losses) based on the investment experience of measurement indices selected by the participant from among the choices offered by the plan. The ENEP also providesallows for additional creditscontributions that are discretionary on the part of
75
the Company. The Company did not make any contributions to the ENEP in 2016.2022. Participants must elect to begin receiving distributions on a date at least two years following the end of the year of contribution and may receive payment of his or her vested account balance either in a single lump sum or in a series of annual installments over a period not to exceed five years. The entire vested account balance is paid out in a lump sum once a participant separates from service with the Company, unless the participant is 65 or older, in which case the participant may elect that the balance be paid out as a series of annual installments over a period not to exceed 10 years. The deferrals reflected in the following table below were made under the ENEP.
Name |
| Executive Contributions in Last Fiscal Year ($)(1) (2) |
|
| Aggregate Earnings in Last Fiscal Year ($)(3) |
|
| Aggregate Withdrawals/ (Distributions) ($) |
|
| Aggregate Balance at Last Fiscal Year End ($) | |||||
Matthew Flannery |
| — |
|
|
|
| — |
|
|
| — |
|
|
| — |
|
William (Ted) Grace |
| — |
|
|
|
| — |
|
|
| — |
|
|
| — |
|
Dale Asplund |
| 298,536 |
|
|
|
| (474,899) |
|
|
| — |
|
|
| 1,748,690 | (4) |
Craig Pintoff |
| — |
|
|
|
| — |
|
|
| — |
|
|
| — |
|
Andrew Limoges |
| — |
|
|
|
| — |
|
|
| — |
|
|
| — |
|
Jessica Graziano |
| — |
|
|
|
| — |
|
|
| — |
|
|
| — |
|
Jeffrey Fenton |
| 44,709 |
|
|
|
| (730,384) |
|
|
| — |
|
|
| 2,387,621 | (5) |
________________
| ||||||||||||||||
| ||||||||||||||||
| ||||||||||||||||
| ||||||||||||||||
| ||||||||||||||||
|
Benefits upon Termination of Employment
We summarize below the benefits in effect as of December 30, 2016 (the last business day of31, 2022, which the fiscal year), which thecurrent NEOs would receive upon a termination of employment.
If the employment of any of the current NEOs is terminated by us without “cause” or by the executive for “good reason,”reason” (each, a “qualifying termination”), the executivesNEOs would be entitled to the following benefits, subject in each case to the execution of a release of claims in favor of the Company:
76
If the employment of any of the NEOs is terminated due to death or disability, the executive (or his spouse or estate) would be entitled to the following benefits:
Ms. Graziano resigned from her role as Executive Vice President, Chief Financial Officer effective July 29, 2022. Ms. Graziano’s RSU awards were forfeited upon her resignation from the Company and she did not receive any additional compensation in connection with her resignation.
Mr. Fenton retired from his role as Senior Vice President, Business Development on June 30, 2022. In connection with his retirement, Mr. Fenton’s outstanding RSUs vested in full upon such retirement (with the exception of the RSUs granted on March 3, 2022, which vested in full on March 3, 2023) and were settled on June 30, 2022 in an aggregate amount of $278,131 (representing 1,145 RSUs) based on a price per share of the Company’s common stock on the NYSE of $242.91 on June 30, 2022, and he was not entitled to any other benefits. Mr. Fenton’s outstanding PRSU awards will remain outstanding and vest based on actual performance for the full performance period (which, based on target performance, would vest at an aggregate amount of $1,457,932 (representing 4,102 PRSUs) based on a price per share of the Company’s common stock on the NYSE of $355.42 on December 31, 2022) and be delivered on the normal settlement schedule. Mr. Fenton is subject to non-competition and non-solicitation restrictions for a period of one year following his retirement, as well as indefinite confidentiality obligations.
Each of the current NEOs is subject tonon-competition andnon-solicitation restrictions for a period of time following the termination of their employment equal toof two years in the case of Messrs. Kneeland, Flannery and Asplund, and one year in the case of Messrs. PlummerGrace, Pintoff and Pintoff.
The table below summarizes the compensation that the current NEOs would have received had they been terminated as of December 30, 2016.31, 2022.
Termination by the Company without cause or by the executive for good reason | Death or disability | |||||||||||||||||||||||
Executive | Cash severance ($)(1) | COBRA payments ($)(2) | Total ($) | COBRA payments ($)(2) | Accelerated vesting of RSUs and stock options ($)(3) | Total ($) | ||||||||||||||||||
Michael Kneeland | 4,275,000 | 21,330 | 4,296,330 | 21,330 | 7,070,271 | 7,091,601 | ||||||||||||||||||
William Plummer | 1,139,757 | 19,685 | 1,159,442 | 19,685 | 1,648,585 | 1,668,271 | ||||||||||||||||||
Matthew Flannery | 2,279,514 | 19,685 | 2,299,199 | 19,685 | 1,648,585 | 1,668,271 | ||||||||||||||||||
Dale Asplund | 523,632 | 14,220 | 537,839 | 14,220 | 1,090,305 | 1,104,525 | ||||||||||||||||||
Craig Pintoff | 855,000 | 18,727 | 873,727 | 18,727 | 1,145,291 | 1,164,018 |
77
|
| Termination by the Company Without Cause or by the Executive for Good Reason |
|
| Death or Disability | |||||||||||||||||
Executive |
| Cash severance ($)(1) |
|
| COBRA payments ($)(2) |
|
| Total ($) |
|
| COBRA payments ($)(2) |
|
| Accelerated vesting of RSUs and PRSUs ($)(3) |
| Total ($) | ||||||
Matthew Flannery |
|
| 5,250,000 |
|
|
| 36,850 |
|
|
| 5,286,850 |
|
|
| 36,850 |
|
|
| 10,853,461 |
|
| 10,890,311 |
William (Ted) Grace |
|
| 1,121,000 |
|
|
| 24,238 |
|
|
| 1,145,238 |
|
|
| 24,238 |
|
|
| 1,535,059 |
|
| 1,559,297 |
Dale Asplund |
|
| 700,650 |
|
|
| 18,624 |
|
|
| 719,274 |
|
|
| 18,624 |
|
|
| 4,700,785 |
|
| 4,719,409 |
Craig Pintoff |
|
| 1,211,252 |
|
|
| 24,567 |
|
|
| 1,235,819 |
|
|
| 24,567 |
|
|
| 3,309,316 |
|
| 3,333,883 |
Andrew Limoges |
|
| 360,000 |
|
|
| — |
|
|
| 360,000 |
|
|
| — |
|
|
| 415,841 |
|
| 415,841 |
________________
For each of Messrs. Kneeland, Plummer, Flannery, Asplund and Pintoff,the NEOs, “cause” generally includes, among other things, and subject to compliance with specified procedures: his willful misappropriation or destruction of our property;property; his conviction of a felony or other crime that materially impairs his ability to perform his duties or that causes material harm to us;us; his engagement in willful conduct that constitutes a breach of fiduciary duty to us and results in material harm to us; andus; or his material failure to perform his duties;duties; and “good reason” includes, among other things: demotion from the position set forth in the executive’s employment agreement;agreement; a decrease in compensation provided for under such agreement;agreement; a material diminution of the executive’s duties and responsibilities;responsibilities; or required relocation to another facility that is based more than 50 miles from Stamford, Connecticut.the executive’s principal work location.
The definitions summarized above vary in some respects among the NEOs’ agreements and are described in greater detail in such agreements, which have previously been filed as exhibits to our periodic reports with the SEC.
Benefits upon a Change in Control
We summarize below the benefits in effect as of December 30, 201631, 2022 that the current NEOs would receive upon a change in control.
If we terminate Mr. Kneeland’sFlannery’s employment without “cause” or he resigns for “good reason” within 12 months following a change“change in controlcontrol” (each as defined in Mr. Flannery’s employment agreement) of the Company, Mr. KneelandFlannery would receive the following benefits:
If we terminate the employment of any of the current NEOs other than Mr. KneelandFlannery without “cause” or the NEO resigns for “good reason” within 12 months following, regardless of whether a change in control of the Company,has occurred, the NEO would receive the following benefits:
78
Pursuant to theirthe applicable award agreements, all of the outstanding options and RSUsequity awards granted to our current NEOs would become fully vested:vested (with the performance levels under outstanding PRSUs deemed met at target level as of the date of such change in control):
The table below summarizes the compensation that the current NEOs would have received in the event of a change in control of the Company as of December 30, 2016.31, 2022. Because the calculations in the table are based upon SEC disclosure rules and made as of a specific date, there can be no assurance that an actual change in control, if one were to occur, would result in the same or similar compensation being paid.
|
|
| Termination by the Company Without Cause or by the Executive for Good Reason within 12 months of a |
|
| Change in Control that Results in the to be Publicly Traded | |||||||||||||||||||
Executive |
|
| Accelerated vesting of RSUs and PRSUs ($)(1) |
|
| Cash severance ($)(2) |
|
| COBRA payments ($)(3) |
|
| Total ($) |
|
| Accelerated vesting of RSUs and PRSUs ($)(1) |
|
| Total ($) | |||||||
Matthew Flannery |
|
|
| 23,808,520 |
|
|
| 7,848,750 |
|
|
| 36,850 |
|
|
| 31,694,120 |
|
|
|
| 23,808,520 |
|
|
| 23,808,520 |
William (Ted) Grace |
|
|
| 2,117,948 |
|
|
| 1,121,000 |
|
|
| 24,238 |
|
|
| 3,263,186 |
|
|
|
| 2,117,948 |
|
|
| 2,117,948 |
Dale Asplund |
|
|
| 8,690,374 |
|
|
| 700,650 |
|
|
| 18,624 |
|
|
| 9,409,648 |
|
|
|
| 8,690,374 |
|
|
| 8,690,374 |
Craig Pintoff |
|
|
| 6,598,728 |
|
|
| 1,211,252 |
|
|
| 24,567 |
|
|
| 7,834,547 |
|
|
|
| 6,598,728 |
|
|
| 6,598,728 |
Andrew Limoges |
|
|
| 842,345 |
|
|
| 360,000 |
|
|
| — |
|
|
| 1,202,345 |
|
|
|
| 842,345 |
|
|
| 842,345 |
________________
Executive | Accelerated vesting of RSUs and stock options upon a change in control that results in the Company ceasing to be publicly traded ($)(1) | Cash severance upon termination by the Company without cause or by the executive for good reason within 12 months following a change in control ($)(2) | COBRA payments upon termination by the Company without cause or by the executive for good reason within 12 months following a change in control ($)(3) | Total ($) | ||||||||||||
Michael Kneeland | 21,400,010 | 7,101,250 | 21,330 | 28,522,591 | (4) | |||||||||||
William Plummer | 5,132,244 | 1,139,757 | 19,685 | 6,291,686 | ||||||||||||
Matthew Flannery | 5,132,244 | 2,279,514 | 19,685 | 7,431,443 | ||||||||||||
Dale Asplund | 3,427,444 | 523,632 | 14,220 | 3,965,295 | ||||||||||||
Craig Pintoff | 4,087,846 | 855,018 | 18,727 | 4,961,591 |
For purposes of the NEOs’ grants, a “change in control” generally includes a person or entity acquiring more than 50% of the total voting power of the Company’s outstanding voting securities, as well as any merger, sale or disposition by the Company of all or substantially all of its assets, or business combination involving the Company (other than a merger or business combination that leaves the voting securities of the Company outstanding immediately prior thereto continuing to represent—either by remaining outstanding or by being converted into voting securities of the surviving entity—more than 50% of the total voting power represented by the voting securities of the Company or such surviving entity outstanding immediately after such merger or business combination). This definition varies
79
PAY VERSUS PERFORMANCE
As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation actually paid and certain financial performance measures of the Company. For further information concerning the Company’s variable pay-for-performance philosophy and how the Company aligns executive compensation with the Company’s performance, refer to “Executive Compensation – Compensation Discussion and Analysis.”
Pay versus Performance Table - Compensation Definitions
The table below presents the SEC-defined “Compensation Actually Paid,” or CAP, and provides a comparison of CAP to various financial measures used to gauge performance at the Company. Salary, Bonus, Non-Equity Incentive Plan Compensation, and All Other Compensation are each calculated in some respects among the NEOs’ agreementssame manner for purposes of both CAP and the Summary Compensation Table (SCT). The primary difference between the calculation of CAP and SCT total compensation is the treatment of “Stock Awards” as summarized below:
Pay Versus Performance Table
The following table sets forth information concerning the compensation of our NEOs for each of the fiscal years ended December 31, 2020, 2021 and 2022, and our financial performance for each such fiscal year:
Year |
| Summary Compensation Table Total for PEO(1) |
| Compensation Actually Paid to PEO(2) |
| Average Summary Compensation Table Total for non-PEO NEOs(3) |
| Average Compensation Actually Paid to non-PEO NEOs(2) |
| Value of Initial Fixed $100 Investment Based On: | Net Income ($ Mil.)(6) |
| Adj. EBITDA ($ Mil.)(7) | ||||
|
|
|
|
|
|
|
|
|
| Total Shareholder Return(4) | Peer Group Total Shareholder Return(5) |
|
|
| |||
2022 |
| $12,414,168 |
|
| $18,142,201 |
| $2,871,609 |
| $3,711,821 |
| $213 | $121 |
| $2,105 |
|
| $5,618 |
2021 |
| $12,716,100 |
|
| $23,414,061 |
| $3,868,950 |
| $6,547,280 |
| $199 | $130 |
| $1,386 |
|
| $4,414 |
2020 |
| $6,526,206 |
|
| $10,792,904 |
| $2,258,222 |
| $3,231,065 |
| $139 | $109 |
| $890 |
|
| $3,932 |
80
|
| PEO |
| Average Non-PEO NEO | ||||||||
|
| 2022 |
| 2021 |
| 2020 |
| 2022 |
| 2021 |
| 2020 |
Total Compensation from SCT |
| $12,414,168 |
| $12,716,100 |
| $6,526,206 |
| $2,871,609 |
| $3,868,950 |
| $2,258,222 |
Subtractions: |
|
|
|
|
|
|
|
|
|
|
|
|
Stock Awards from SCT |
| ($8,240,977) |
| ($9,137,915) |
| ($4,881,735) |
| ($1,737,303) |
| ($2,244,309) |
| ($1,359,513) |
Adjustments (addition (subtraction)): |
|
|
|
|
|
|
|
|
|
|
|
|
Fair value at year-end of awards granted during the covered fiscal year that are outstanding and unvested at year-end |
| $7,354,351 |
| $7,467,442 |
| $7,377,155 |
| $1,802,967 |
| $2,062,303 |
| $2,126,898 |
Fair value as of the vesting date of awards granted in the covered fiscal year for which vesting conditions were satisfied during such year |
| $616,529 |
| $354,042 |
| $348,048 |
| $198,115 |
| $113,778 |
| $139,297 |
Year-over-year change in fair value of awards granted in any prior fiscal year that are outstanding and unvested at year-end or were forfeited during the year |
| $7,381,219 |
| $11,604,650 |
| $1,907,618 |
| $813,577 |
| $2,560,584 |
| $264,928 |
Change as of the vesting date (from the end of the prior fiscal year) in fair value of awards granted in any prior fiscal year for which vesting conditions were satisfied during such year |
| ($1,383,089) |
| $409,742 |
| ($484,388) |
| ($237,144) |
| $185,974 |
| ($198,767) |
Compensation Actually Paid |
| $18,142,201 |
| $23,414,061 |
| $10,792,904 |
| $3,711,821 |
| $6,547,280 |
| $3,231,065 |
Financial Performance Measures
As described in greater detail in “Executive Compensation – Compensation Discussion and Analysis,” the Company’s executive compensation program reflects a variable pay-for-performance philosophy. The metrics that the Company uses for both our long-term and short-term incentive awards are selected to incentive our NEOs to increase the value of our enterprise for our shareholders. The most important financial performance measures used by the Company to link executive compensation actually paid to the Company’s NEOs to the Company’s performance, for the most recently completed fiscal year, were as follows:
81
Relationship between CAP and Cumulative TSR
The graph below reflects the relationship between the CAP, for the PEO and Average Non-PEO NEOs, and the Company’s cumulative Total Shareholder Return (“TSR”), (assuming an initial fixed investment of $100 on December 31, 2019) for the fiscal years ended December 31, 2020, 2021 and 2022.
Compensation Actually Paid and Cumulative TSR
Relationship between CAP and Adjusted EBITDA
The graph below reflects the relationship between the CAP, for the PEO and Average Non-PEO NEOs, and the Company’s adjusted EBITDA for the fiscal years ended December 31, 2020, 2021 and 2022:
Compensation Actually Paid and Adjusted EBITDA
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Relationship between CAP and Net Income
The graph below reflects the relationship between the CAP, for the PEO and Average Non-PEO NEOs, and the Company’s net income for the fiscal years ended December 31, 2020, 2021 and 2022:
Compensation Actually Paid and Net Income
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CEO PAY RATIO
Set forth below is the annual total compensation of our median employee, the annual total compensation of Mr. Flannery and the ratio of those two values for 2022:
In determining the median employee for 2022, we used our employee population as of December 31, 2022 and, in accordance with SEC rules, excluded (i) the CEO, (ii) employees from acquisitions during the year(1) and (iii) employees from certain non-U.S. countries representing in aggregate less than 5% of our employee base(2), to arrive at the median employee consideration pool. We then measured compensation for this population based on taxable earnings for the period January 1, 2022—December 31, 2022 (as reported in each employee’s Form W-2 or Canadian T4 Statement of Remuneration Paid, as applicable). For Canadian employees, we converted the amounts reported in the T4 Statement of Remuneration Paid to U.S. dollars using the exchange rate published by the Bank of Canada at the close of business on December 30, 2022. We also annualized taxable earnings for those permanent full-time and part-time employees who were not employed for the full January 1, 2022— December 31, 2022 period. Using this methodology for 2022, we determined that the “median employee” was a full-time, hourly employee located in the U.S.
We calculated 2022 annual total compensation for both our median employee and Mr. Flannery using the same methodology that we use to determine our NEOs’ annual total compensation for the Summary Compensation Table.
This pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records and the methodology described above. The SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices. As such, agreements. In particular, earlier award agreementsthe pay ratio reported by other companies may containnot be comparable to the pay ratio reported above, as other companies may have different definitions.
________________
DIRECTOR COMPENSATION
Director Fees
Directors who are executive officers of the Company are not paid additional compensation for serving as directors. Effective May 5, 2022, changes were made to increase the annual equity compensation payable to non-management directors from $150,000 to $160,000 while maintaining cash compensation at the same level as in 2021.
For 2016,2022, the Company’snon-management directors (other than itsnon-executive Chairman) Chair) received the following compensation (as applicable):
For 2016,During 2022, the Company’s non-management directors (other than its non-executive chairman Chair) received an annual equity grant of $160,089 (because the number of RSUs granted is rounded up to the nearest whole share of common stock, this amount varies slightly from the annual equity compensation payable amount noted above) in fully vested RSUs, generally to be settled after three years (subject to acceleration and further deferral in certain circumstances)
During 2022, Michael Kneeland received total annual compensation of $460,055, with (i) $200,000 paid in cash, in arrears, quarterly, at the same time that othernon-management directors receive the cash component of their pay (as described below), and (ii) $260,055 paid in fully vested RSUs, granted on the date of the Company’s annual meeting and, subject to acceleration in certain circumstances, settled three years after the date of grant. For any partial year, apro-rata portion of such compensation is paid.$500,000 for his service as non-executive Chair. Such compensation is in lieu of any other pay (e.g., annual equity and retainer fees and meeting attendance fees). The compensation was paid in cash, quarterly in arrears. In connection with Mr. Kneeland’s retirement from his role as CEO on May 8, 2019, Mr. Kneeland’s outstanding RSUs granted on March 11, 2019 continued to vest based on his service as a non-employee director of the Company, with the final amount of RSUs having vested on March 11, 2022. Additionally, Mr. Kneeland’s outstanding PRSU awards continued to vest based on actual performance for the full performance period, with the final tranche having vested in January 2022.
The Board believes stock ownership guidelines are a key vehicle for aligning the interests ofnon-management directors and the Company’s stockholders and hasstockholders. In October 2018, the Board amended its previously adopted stock ownership guidelines forto provide that non-management directors. Under these directors hold a target dollar value of $600,000 in the Company’s common stock. Then current directors had five years (from October 2018) to achieve the revised ownership threshold, and any new directors have five years from joining the Board to achieve the revised ownership threshold. Until the revised guidelines become effective in October 2023, non-management directors are required to comply with the prior guidelines, which state that within four years after joining the Board, (or May 1, 2006 in the case of existing members), eachnon-management member of the Board director is required to hold five times the annual cash retainer in the Company’s common stock. The following shares count towards meeting these ownership guidelines: shares that are directly owned by thenon-management director; shares that are beneficially owned by thenon-management director, such as shares held in “street name” through a broker or shares held in trust; amounts credited to thenon-management director’s deferred compensation account that are invested or deemed invested in the Company’s common stock; and unvested restricted stock or RSUs that vest based on continued service; and the valueservice. Each of the spread (the difference between the exercise price and the full market value of the Company’s common stock) of fully vested stock options. Each of thenon-management directors had satisfiedwas in compliance with the stock ownership guidelines when their holdings were measured as of December 31, 2016.2022.
Directors are subject to the Company’s anti-pledging and anti-hedging policy, which is described above under “Executive Compensation—Compensation Discussion and Analysis—Anti-Hedging Policy; Anti-Pledging Policy.”
The Company also maintains a medical benefits program, comparable to that offered to its employees, in which its directors are eligible to participate at their own cost.
The Company provides directors with transportation and accommodations in connection with their travel to and from Board, committee and stockholder meetings and other travel related to their functions and duties as directors. Such transportation may include business class travel on commercial airlines.
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The Company believes its compensation arrangements fornon-management directors are comparable to the compensation levels fornon-management directors at the majority of its peer companies and Pearl Meyer has advised us that ournon-management director arrangements are reasonable compared to our peers.
Deferred Compensation Plan for Directors
The Company maintains the United Rentals, Inc. Deferred Compensation Plan for Directors, under which itsnon-management directors may elect to defer receipt of the fees that would otherwise be payable to them. Deferred fees are credited to a book-keeping account and are deemed invested, at the director’s option, in either a money market fund or shares of the Company’s common stock. In such event,If the director’sdirector elects to defer fees, his or her account either is credited with either shares in the money market fund or RSUs equal to the deferred amount, and the account is fully vested at all times. In addition,non-management directors have the ability to elect to further defer the settlement of their vested RSUs for at least five years beyond the originally scheduled settlement date in a manner consistent with Section 409A of the Internal Revenue Code and the applicable regulations. See “Security Ownership of Certain Beneficial Owners and Management” for information regarding the outstanding RSUs held by the Company’snon-management directors.
Director Compensation for Fiscal Year 20162022
The table below summarizes the compensation paid by the Company tonon-management directors for the fiscal year ended December 31, 2016.2022.
Name(1) |
| Fees Earned or Paid in Cash in 2022 ($) |
| Stock Awards(2)(3) ($) |
| Total ($) | ||
José B. Alvarez |
| 135,000 |
|
| 160,089 |
|
| 295,089 |
Marc A. Bruno |
| 120,000 | (4) |
| 160,089 |
|
| 280,089 |
Larry D. De Shon |
| 120,000 |
|
| 160,089 |
|
| 280,089 |
Bobby J. Griffin |
| 160,000 |
|
| 160,089 |
|
| 320,089 |
Kim Harris Jones |
| 145,000 |
|
| 160,089 |
|
| 305,089 |
Terri L. Kelly |
| 135,000 |
|
| 160,089 |
|
| 295,089 |
Michael J. Kneeland |
| 500,000 |
|
| — |
|
| 500,000 |
Francisco J. Lopez-Balboa |
| 28,273 | (5) |
| 93,348 |
|
| 121,621 |
Gracia C. Martore |
| 140,000 |
|
| 160,089 |
|
| 300,089 |
Filippo Passerini |
| 41,095 | (6) |
| — |
|
| 41,095 |
Shiv Singh |
| 120,000 |
|
| 160,089 |
|
| 280,089 |
________________
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Name(1) | Fees Earned in Cash in 2016 ($) | Stock Award(2)(3) ($) | Total ($) | |||||||||
Jenne K. Britell, Ph.D. | 200,000 | 260,055 | 460,055 | |||||||||
José B. Alvarez | 100,500 | 135,043 | 235,543 | |||||||||
Bobby J. Griffin | 121,381 | (4) | 135,043 | 256,424 | ||||||||
Singleton B. McAllister | 102,500 | 135,043 | 237,543 | |||||||||
Brian D. McAuley | 98,000 | 135,043 | 233,043 | |||||||||
John S. McKinney | 105,500 | 135,043 | 240,543 | |||||||||
Jason D. Papastavrou, Ph.D. | 110,000 | 135,043 | 245,043 | |||||||||
Filippo Passerini | 107,500 | 135,043 | 242,543 | |||||||||
Donald C. Roof | 113,881 | 135,043 | 248,924 | |||||||||
Keith Wimbush | 115,500 | 135,043 | 250,543 |
EQUITY COMPENSATION PLAN INFORMATION
The following table sets forth information regarding outstanding options and shares reserved for future issuance under the Company’s executive compensation plans in effect as of December 31, 2016:
2022:
Plan Category | (a) Number of Securities to be Issued Upon Exercise of Outstanding Options, and Rights | (b) Weighted Average Exercise Price of Outstanding Options, and Rights | (c) Number ofSecurities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) | |||||||||
Equity compensation plans approved by security holders | 468,554(1) | $ | 80.45(1) | 1,313,912(2) |
________________
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following tables set forth, to the best of the Company’s knowledge and belief, certain information regarding the beneficial ownership of the Company’s common stock by (i) each person or entity known to the Company to be the beneficial owner of more than 5% of the Company’s outstanding common stock, (ii) each director and certain named executive officersofficer of the Company, and (iii) all of the Company’s current directors and executive officers as a group.
Security Ownership of Certain Beneficial Owners
The following table sets forth certain information concerning each person or entity known to the Company who may be considered a beneficial owner of more than 5% of the Company’s outstanding common stock as of March 9, 2023.
Name and Address of Beneficial Owner |
| Amount and Nature of Beneficial Ownership |
| Percent of Class | ||
BlackRock, Inc. |
| 5,556,323 | (1) |
| 8.0% | (1) |
The Vanguard Group |
| 8,110,194 | (2) |
| 11.7% | (2) |
________________
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| ||||||||
| ||||||||
|
Security Ownership by Management
Direct and indirect ownership of common stock by each of the directors, each of the named executive officers and by all current executive officers and directors as a group is set forth in the following table as of March 7, 2017,9, 2023, except where noted, together with the percentage of total shares outstanding at such time represented by such ownership. For purposes of this table, beneficial ownership has been determined in accordance with the provisions of Rule13d-3 under the Exchange Act, under which, in general, a person is deemed to be the beneficial owner of a security if he or she has or shares the power to vote or to direct the voting of the security or the power to dispose or to direct the disposition of the security, or if he or she has the right to acquire the beneficial ownership of the security within 60 days.
Name and Address of Beneficial Owner(1) |
| Amount and Nature of Beneficial Ownership(2) |
| Percent of Class(2) | |
Matthew J. Flannery |
| 94,544 | (3) |
| * |
William E. (Ted) Grace |
| 3,387 | (4) |
| * |
Dale A. Asplund |
| 14,156 | (5) |
| * |
Craig A. Pintoff |
| 13,256 | (6) |
| * |
Andrew B. Limoges |
| 1,977 | (7) |
| * |
Jessica T. Graziano |
| 17,969 | (8) |
| * |
Jeffrey J. Fenton |
| 21,900 | (9) |
| * |
Michael J. Kneeland |
| 107,163 | (10) |
| * |
José B. Alvarez |
| 10,659.99 | (11) |
| * |
Marc A. Bruno |
| 5,770 | (12) |
| * |
Larry D. De Shon |
| 849 | (13) |
| * |
Bobby J. Griffin |
| 42,587 | (14) |
| * |
Kim Harris Jones |
| 4,017 | (15) |
| * |
Francisco J. Lopez-Balboa |
| 331 | (16) |
| * |
Terri L. Kelly |
| 6,346 | (17) |
| * |
Gracia C. Martore |
| 7,099 | (18) |
| * |
Shiv Singh |
| 6,993 | (19) |
| * |
All current executive officers and directors as a group (15 persons) |
| 319,134.99 | (20) |
| * |
________________
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CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS
TheBoard has adopted a written policy for the review and approval of any “related party transaction,transaction.” whichUnder the policy, a “related party transaction” is defined under the policy as any relationship, arrangement, transaction or series of similar transactions, betweenarrangements or relationships in which (A) the Company is or will be a participant, (B) the aggregate amount involved (or reasonably expected to be involved) exceeds $120,000 in any 12-month period, and one of our executive officers, directors, director nominees (or their respective immediate family members), 5% stockholders(C) any “Related Party” has or an entity in which any of the foregoing haswill have a direct or indirect material interest including transactions requiring disclosure under Item 404(a) of RegulationS-Kunder the Securities Exchange Act of 1934, other thanthan:
Related Party’s interest arises solely from the ownership of securities of the Company and all holders of the security receive the same benefit on a pro rata basis; • transactions involving director or executive officer retention, services, benefits or compensation (including the reimbursement of reasonable business and travel expenses incurred in the ordinary course of business) approved or recommended by the Board’s Compensation Committee or |
Any proposed related party transaction will be reviewed and, if deemed appropriate, approved by the Board;
The Audit Committee. When practicable, theCommittee will review all materials facts and approval will occur prior to entry intocircumstances of any proposed Related Party Transaction and either approve or disapprove the transaction. If the General Counsel of the Company determines that advance review and approval is not practicable,feasible, then the transaction may be preliminarily entered into upon approval of the Audit Committee will review, and, if deemed appropriate, ratifyChair (if Chair is not independent from the transaction.transaction, then Lead Independent Director instead of Chair), after notice to both, provided that neither the Audit Committee Chair nor Lead Independent Director may approve a Related Party Transaction involving himself or herself or an Immediate Family Member. When a Related Party Transaction is preliminarily approved in such manner, the Related Party Transaction must be considered for ratification at the Audit Committee’s next regularly scheduled meeting. In either case, the Audit Committee will take into account, among other factors deemed appropriate, whether the transaction is fair to the Company and on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the related party’s interest in the transaction. The Board has also delegated to the Chairman of the Audit Committee Chair the authority to approvepre-approve or ratify related party transactions in which the aggregate amount involved is reasonably expected to be less than $1 million, subject to reporting any such pre-approval or ratification at the next Audit Committee meeting any such approval or ratification.
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AUDIT COMMITTEE REPORT
The Audit Committee operates pursuant to a written charter, which complies with the corporate governance standards of the NYSE. The Audit Committee reviews and reassesses its charter annually, and recommends any proposed changes to the full Board for approval. The Audit Committee charter was most recently revised in December 2016.2021. A copy of the current charter is available on our website athttp://www.unitedrentals.com under “Corporate Governance” in the Our Company—Investor Relations section. (go to “Company” tab → “Investor Relations” → “Governance”).
Pursuant to its charter, the Audit Committee assists the Board in monitoring, among other things, the integrity of the Company’s financial statements and the performance of the Company’s internal audit function and independent registered public accounting firm. The Audit Committee is also responsible for approving compensation arrangements with the Company’s independent registered public accounting firm. In conjunction with the mandated rotation of Ernst & Young LLP’s (“EY”) lead engagement partner, the Audit Committee and the Chair of the Audit Committee are directly involved in the rotation of the audit partners and selecting EY’s new lead engagement partner.
Management is responsible for the Company’s financial reporting process, the system of internal controls, including internal controls over financial reporting, and procedures designed to ensure compliance with accounting standards and applicable laws and regulations. The Company’s independent registered public accounting firm, Ernst & Young LLP (“EY”),EY, is responsible for the integrated audit of the consolidated financial statements and internal controls over financial reporting.
In the discharge of its responsibilities, the Audit Committee has reviewed and discussed with management and EY the Company’s audited consolidated financial statements as of and for the fiscal year ended December 31, 2016.2022.
The Audit Committee has also discussed and reviewed with EY all communications required under the standards of the Public Company Accounting Oversight Board (the “PCAOB”), and the Securities and Exchange Commission, including the matters required to be discussed by EY with the Audit Committee under PCAOB standards.
In addition, EY provided to the Audit Committee a formal written statement describing all relationships between EY and the Company that might bear on EY’s independence as required by the applicable requirements of the PCAOB regarding an independent registered public accounting firm’s communications with the audit committee concerning independence. The Audit Committee reviewed and discussed with EY any relationships that may impact EY’s objectivity and independence from the Company and management, including the provision ofnon-audit services to the Company, and satisfied itself as to EY’s objectivity and independence.
The Audit Committee also has discussed and reviewed with the Company’s vice president—internal audit(“VP-IA”) and EY, with and without management present, the Company’s work in complying with the requirements of Section 404 under the Sarbanes-Oxley Act of 2002 regarding internal controls over financial reporting. In connection therewith, the Audit Committee also discussed with theVP-IA, with and without other members of management present, management’s assessment of the effectiveness of internal controls over financial reporting as of December 31, 2016. The2022. Additionally, the Audit Committee also discussed EY’s audit report on internal controls over financial reporting as of December 31, 20162022 with management and EY.
Based upon the reviews and discussions outlined above, the Audit Committee recommended to the Board that the Company’s audited consolidated financial statements as of and for the fiscal year ended December 31, 20162022 be included in the Company’s annual report on Form10-K for such fiscal year for filing with the SEC.
THE AUDIT COMMITTEE | ||
Kim Harris Jones, Chair | ||
Francisco J. Lopez-Balboa | ||
Gracia C. Martore | ||
Shiv Singh |
Jason D. Papastavrou, Chairman93
Bobby J. Griffin
John S. McKinney
Filippo Passerini
Donald C. Roof
RATIFICATION OF APPOINTMENT OF PUBLIC ACCOUNTING FIRM
General
The Audit Committee is directly responsible for the appointment, compensation, retention and oversight of our independent registered public accounting firm retained to audit our financial statements and internal controls over financial reporting. The Audit Committee hasre-appointed EY as independent registered public accounting firm to audit the financial statements and the internal controls over financial reporting of the Company for 2017,2023, subject to ratification by stockholders. EY has served as the Company’s independent registered public accounting firm since the Company was formed in 1997. TheIn order to ensure continuing auditor independence, the Audit Committee annually evaluates the performance of the current independent registered public accounting firm, and determines whether to reengage or consider other firms. Based on its evaluation, the members of the Audit Committee believesbelieve that retaining EY to serve as independent registered public accounting firm for the fiscal year ended December 31, 20172023 is in the best interest of the Company and its stockholders.
In the event that our stockholders fail to ratify this appointment, or an engagement letter is not finalized, another independent registered public accounting firm will be appointed by the Audit Committee. Even if this appointment is ratified, the Audit Committee, in its discretion, may appoint a new independent registered public accounting firm at any time during the year if the Audit Committee believes that such a change would be in the best interest of the Company and its stockholders.
A representative of EY is expected to be present at the 2017 annual meetingAnnual Meeting with an opportunity to make a statement if he or she so desires and will be available to respond to questions.
Information Concerning Fees Paid to Our Independent Registered Public Accounting Firm
The Audit Committee is responsible for the audit fee negotiations associated with the Company’s retention of EY. The following table sets forth the fees for professional services provided by EY for fiscal years 20162022 and 2015.2021.
2016 | 2015 |
| 2022 |
| 2021 | |||||||
Audit Fees | $3,180,000 | $2,810,750 |
| $3,734,800 |
| $4,000,000 | ||||||
Audit-Related Fees | $62,000 | $78,000 |
| $68,000 |
| $63,000 | ||||||
Tax Fees | $10,000 | $37,592 |
| $487,000 |
| $197,000 | ||||||
All Other Fees | $2,015 | $2,015 |
| $95,200 |
| $5,200 | ||||||
|
| |||||||||||
Total | $3,254,015 | $2,928,357 |
| $4,385,000 |
| $4,265,200 |
________________
assistance in 2022, compared with $131,000 for tax compliance and $66,000 for tax advice, tax planning, and tax audit assistance in 2021.
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Policy on Audit CommitteePre-Approval of Audit andNon-Audit Services of Independent Registered Public Accounting Firm
The charter of the Audit Committee requires that the committeepre-approve all auditing services and permittednon-audit services (including the fees and terms thereof) to be performed for the Company by its independent registered public accounting firm, subject to the de minimis exceptions fornon-audit services described in Section 10A(i)(1)(B) of the Exchange Act and Rule2-01 of RegulationS-X thereunder. The Audit Committeepre-approved 100% of the auditing services and permittednon-audit services rendered by EY in fiscal years 20162022 and 2015.
The Audit Committee’s policy is to eitherpre-approve specific services or specific categories of services. In each case, a fee budget is approved for the service or category, as the case may be, and such budget may not be exceeded without further approval by the Audit Committee. When a category of service ispre-approved, sufficient details must be provided to enable the members of the Audit Committee to understand the nature of the services being approved. In addition, the categories must be sufficiently narrow that management will not later be placed in the position of deciding the scope of the services that have beenpre-approved.
TheBy its Charter, the Audit Committee may delegate itspre-approval authority to a subcommittee consisting of one or more members of the Audit Committee; provided that anypre-approval by an individual member is required to be reported to the full committee for its review at its next scheduled meeting. The ChairmanAudit Committee has delegated its pre-approval authority to the Chair of the Audit Committee exercises such delegatedpre-approval authority on behalf of the Audit Committee.
Policy on Hiring Current or Former Employees of Independent Registered Public Accounting Firm
The Audit Committee has adopted a policy regarding the hiring of current or former employees of the Company’s independent registered public accounting firm. Pursuant to this policy, the Company generally will not hire or permit to serve on the Board any person who is concurrently a partner, principal, shareholder or professional employee of its independent registered public accounting firm or, in certain cases, an immediate family member of such a person. In addition, the Company generally will not hire a former partner, principal, shareholder or professional employee of its independent registered public accounting firm in a financial reporting oversight role if he or she was a member of the audit engagement team who provided more than ten hours of audit, review or attest services for the Company without waiting for a requiredtwo-year“cooling-off” two-year “cooling-off” period to elapse. Further, the Company generally will not hire a former partner, principal, shareholder or professional employee of its independent registered public accounting firm in an accounting role or a financial oversight role if he or she remains in a position to influence the independent registered public accounting firm’s operations or financial policies, has capital balances in the independent registered public accounting firm or maintains certain other financial arrangements with the independent registered public accounting firm.
This policy is subject to certain limited exceptions, such as with respect to individuals employed by the Company as a result of a business combination between an entity that is also an audit client of the independent registered public accounting firmfirm; and individuals employed by the Company in an emergency or under other unusual circumstance,circumstances, provided that the Audit Committee determines that the relationship is in the best interest of the Company’s stockholders.
Voting
Ratification of the appointment of EY as independent registered public accounting firm to audit the financial statements of the Company for 20172023 requires the affirmative vote of a majority of the shares present in person or represented by proxy at the annual meetingAnnual Meeting and entitled to vote on the matter. Abstentions will have the same effect as a vote against such ratification, whereas shares not represented at the meeting will not be counted for purposes of determining whether such ratification has been approved.
The Board unanimously recommends a vote FOR the ratification of the appointment of EY as independent registered public accounting firm of the Company (designated as Proposal 2).
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PROPOSAL 3
ADVISORY APPROVAL OF EXECUTIVE COMPENSATION
As required by Exchange Act rules, we are holding an advisory vote to give our stockholders the opportunity to express their views on the compensation of our named executive officers.NEOs. At our 20112017 annual meeting, our stockholders voted (on anon-binding basis) in favor of holding an advisory vote on executive compensation every year, consistent with the recommendation of our Board. After consideration of these results, we have decided to hold future advisory votes on executive compensation each year until the next advisory vote on frequency occurs.occurs (such vote is occurring this year, as addressed in Proposal 4 below). Under this policy, the nextwe are holding an advisory vote to approve executive compensation is being held this year.
This vote is not intended to address any specific item of compensation, but rather the overall compensation of the named executive officersNEOs and the executive compensation philosophy, policies and programs described in this Proxy Statement. This proposal is advisory, and therefore not binding on the Company, the Board or the Compensation Committee. We ask that you support the compensation of our named executive officersNEOs as disclosed under the heading “Executive Compensation,” including the “Compensation Discussion and Analysis” section and the accompanying compensation tables and related narrative disclosure.
We seek to align executive compensation with the achievement of the Company’s business objectives and to attract, reward and retain talented executive officers. The Board believes the Company’s compensation program strikes the appropriate balance between utilizing responsible, measured pay practices and incentivizing the named executive officersNEOs to create value for our stockholders. A substantial percentage of our compensation is performance-based, compensation, including performance-based securities that are directly linked to, and vest based on, the Company’s financial performance metrics. We set challenging metrics, as demonstrated by below target payouts for 2016 annual incentives and LTIP awards, despite our strong performance in a difficult business environment.
Financial performance and stockholder return.performance. The Company’s key financial performance metrics in 20162022 included:
________________
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Operational highlights. The Company’s key operational highlights in 2022 included:
Best practices and strong governance standards. Our compensation program includes the best practices and governance features discussed below:below.
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Strong stockholder support. Every year since the initial vote in 2011, our stockholders have supported the Company’s executive compensation program by voting overwhelmingly in favor of thesay-on-pay proposals approving the compensation paid to the named executive officers.NEOs. Last year, over 95%approximately 92% of the stockholders who voted on the“say-on-pay” “say-on-pay” proposal supported the compensation of our named executive officers.NEOs.
You are encouraged to read the information detailed under “Executive Compensation” beginning on page 3146 of this Proxy Statement for additional details about our executive compensation programs.
The Board strongly endorses the Company’s executive compensation program and recommends that stockholders vote in favor of the following resolution:
“RESOLVED, that the Company’s stockholders approve, on an advisory basis, the compensation paid to the Company’s named executive officers,NEOs, as disclosed in the Company’s Proxy Statement for the 2017 Annual Meeting of Stockholders pursuant to Item 402 of RegulationS-K, including the “Compensation Discussion and Analysis,” compensation tables and narrative discussion.”
The Board unanimously recommends a vote FOR the approval of the compensation paid to our named executive officers,NEOs, as disclosed in this Proxy Statement pursuant to the compensation disclosure rules of the SEC (designated as Proposal 3).
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PROPOSAL 4
ADVISORY VOTE ON FREQUENCY OF EXECUTIVE COMPENSATION VOTE
At our 20112017 Annual Meeting, we first provided our stockholders with the opportunity to cast an advisory vote on how frequently they would like to vote on our executive compensation, which, as described in Proposal 3, is commonly referred to as“Say-on-Pay. “Say-on-Pay.” Based on the voting results at our 20112017 Annual Meeting, our Board determined to holdSay-on-Pay votes annually. SEC rules require us to ask our stockholders, at least every six years, how often they would like for us to holdSay-on-Pay votes. Accordingly, we are requesting your advisory vote this year to determine the frequency of our futureSay-on-Pay votes.
As required by Exchange Act rules, which were adopted pursuant to the Dodd-Frank Act, we are holding an advisory vote on whether future advisory votes on executive compensation of the nature reflected in Proposal 43 should occur every year, every two years or every three years. The option that receives the highest number of votes cast by the Company’s stockholders will be the option that has been selected by stockholders. However, because this vote is advisory, it is not binding on the Company, the Board or the Compensation Committee in any way.
After careful consideration of this proposal, the Board has determined that an annual advisory vote on executive compensation is the most appropriate alternative for the Company, and therefore, the Board recommends that you vote for aone-year interval for the advisory vote on executive compensation. Please note that you are not being asked to approve or disapprove the Board’s recommendation, but rather to indicate your own preference for an annual, biannualbiennial or triennial advisory vote.
The Board recognizes that an annual advisory vote on executive compensation will allow the Company’s stockholders to provide us with their direct input on our compensation philosophy, policies and practices as disclosed in the proxy statement every year. However, stockholders should note that because the advisory vote on executive compensation occurs well after the beginning of the compensation year, and because the different elements of our executive compensation program are designed to operate in an integrated manner and to complement one another, in many cases it may not be appropriate or feasible to change our executive compensation programs in consideration of any one year’s advisory vote on executive compensation by the time of the following year’s annual meeting of stockholders.
An annual advisory vote on executive compensation is consistent with the Board’s desire to take a “best practices” approach to corporate governance, including by seeking input from, and engaging in discussions with, our stockholders on corporate governance matters and our executive compensation philosophy, policies and programs. We understand that stockholders may have different views as to what may be the best approach for the Company with respect to this proposal, and we look forward to hearing our stockholders’ views.
When casting your vote on your preferred voting frequency in response to the resolution set forth below, you may choose one of the following four options: “every year,” “every two years,” “every three years” or “abstain”:
“RESOLVED, that the option of once every year, once every two years or once every three years that receives the highest number of votes cast for this resolution will be determined to be the stockholders’ preferred frequency with which the Company is to hold a stockholder vote to approve the compensation paid to the named executive officers, as disclosed pursuant to Item 402 ofRegulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion.”
The Board unanimously recommends a vote for the option of EVERY YEAR as the frequency with which stockholders are provided an advisory vote on executive compensation, as disclosed pursuant to the compensation disclosure rules of the SEC (designated as Proposal 4).
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PROPOSAL 5
COMPANY PROPOSAL TO AMEND THE COMPANY’S RESTATEDIMPROVE SHAREHOLDER WRITTEN CONSENT (AMEND CERTIFICATE OF INCORPORATION TO REMOVE SUPERMAJORITY VOTING REQUIREMENTSREDUCE THRESHOLD TO 15%)
TheCompany stockholders holding 25% of the Company’s Restated Certificate of Incorporation requires the approval of 66 2/3% of outstanding shares for certain fundamental changesof common stock currently have the right to the Company’s corporate governance.request a record date in connection with a stockholder action by written consent. This Proposal 5 (the “Company Simple MajorityWritten Consent Proposal”) is a result of theour Board’s ongoing review of our corporate governance practices and following a vote atits consideration of the Company’s 2016 annual meeting on a stockholder proposal to adopt a simple majority vote. The stockholders approved the stockholder proposal at the 2016 annual meeting on anon-binding basis.Stockholder Proposal set forth in Proposal 6. After due consideration of corporate governance best practices for our stockholders,and a balancing of the competing interests discussed below, and taking into account the stockholder vote, the Board has determined that it is in the Company stockholders’ best interests to amendof the Company’s Restated Certificate of IncorporationCompany and our stockholders to provide forstockholders with the eliminationopportunity to consider the Company Written Consent Proposal, which would lower the share ownership threshold on the ability of each voting requirement that calls forstockholders to request a greater than simple majority vote (the “Simple Majority Amendment”).
The Board consistently evaluates the implementation of appropriate corporate governance measures. Inrecord date in connection with such practice, the Board has evaluated the Company’s voting requirements in the past and has consistently determined that the retention of a supermajority vote standard for certain fundamental changesstockholder action by written consent from 25% to the Company’s corporate governance is the best way to ensure that the interests of all stockholders are fully protected. The Board has expressed the belief that fundamental changes to corporate governance should have the support of a broad consensus of all stockholders, not a simple majority. If the Company’s Restated Certificate of Incorporation were amended to remove the supermajority provisions, a relatively small number of stockholders could enact significant corporate changes that benefit only a narrow group of stockholders. Supermajority voting requirements on fundamental corporate matters can help to protect stockholders, particularly minority stockholders, against potentially self-interested transactions of short-term investors.15%.
On the other hand, the Board is aware that certain stockholders and institutions disagree. These entities generally argue that a majority stockholder vote should be sufficient for any corporate action requiring stockholder approval, regardless of the considerations outlined above. The Company Simple Majority Proposal reflects the Board’s determination to acknowledge, and address, that difference in perspective.
The Board has declared advisable, and is submitting to Companythe Company’s stockholders for their consideration, an amendment to the Company’s Fifth Amended and Restated Certificate of Incorporation to eliminate each voting requirement that calls for a greater than simple majority vote. Underlower such threshold to 15%. Proposed amendments to the existing provisions of the Company’s Fifth Amended and Restated Certificate of Incorporation are attached to this Proxy Statement as Appendix A.
The Board believes stockholders should be able to act by written consent, but that such ability should be subject to appropriate guardrails to ensure that such right would not be at risk of abuse or misuse by a single stockholder or a small group of stockholders in the approvalpursuit of 66 2/3%narrow or short-term interests that may not be shared more broadly by the Company’s stockholders. Furthermore, in considering the Company’s and the stockholders’ best interests, the Board must also consider the disruption resulting from the Board and management’s attention being diverted from leading and operating our business, as well as the significant administrative burden and costs from overseeing the solicitation of, outstanding shares is required for certain fundamental changesand communication of, information to stockholders and the delivery and examination of written consents.
In light of the above considerations, the Board believes that the 15% ownership threshold in the Company Written Consent Proposal strikes the appropriate balance between enhancing the rights of stockholders and the Company’s corporate governance includingpractices, while preventing the following: (i) removalrisk of directors, (ii) adopting, alteringabuse or repealingmisuse of the Company’sBy-Laws, (iii) amending certain provisionsright to initiate stockholder action by written consent and the waste of corporate assets that would arise if, as the Stockholder Proposal provides, the required ownership threshold were set as low as 10%. In addition, the 15% ownership threshold in the Company Written Consent Proposal would make the requisite ownership threshold to request a record date in connection with a stockholder action by written consent consistent with the 15% threshold approved last year for the stockholder right to call a special meeting.
Furthermore, unlike the Stockholder Proposal, which is nonbinding and would require the necessary amendment to the Company’s Fifth Amended and Restated Certificate of Incorporation including adopting provisions grantingto be considered and approved subsequent to our upcoming 2023 annual meeting, the Company Written Consent Proposal can be approved by stockholders at our upcoming 2023 annual meeting. This would allow the rightBoard to call special meetings orimmediately implement, pursuant to act by written consent;the proposed amendments to the Company’s Fifth Amended and (iv) amending provisions of the Restated Certificate of Incorporation relatingset forth in Appendix A, a 15% ownership threshold with respect to the foregoing items.
If the proposed Simple Majority Amendment is adopted, each of the foregoing supermajority voting requirementsstockholder right to request a record date in connection with a stockholder action by written consent. Such amendment would be removed from the Company’s Restated Certificate of Incorporation. Instead, the foregoing matters will be decided by a majority of the voting power of all sharesbecome effective immediately upon stockholder approval of the Company entitled to voteWritten Consent Proposal at an election of directors. The Company’sBy-Laws do not haveour 2023 annual meeting without any provisions containing supermajority voting requirements.
The text of the proposed Simple Majority Amendment, which would modify Paragraphs A and B of Article V and Paragraph D of Article VI of the Company’s Restated Certificate of Incorporation, is attached as Appendix A, with deletions indicatedfurther action by strikeout and additions indicated by underline.
Vote Required
Approval of the Simple Majority Amendment requires the affirmative vote of the holders of at least 66 2/3% of the total voting power of all outstanding shares of capital stock entitled to vote generally for the election of directors.
The Board continues to believe that the retention of the Company’s existing supermajority voting requirements for certain fundamental changes to the Company’s corporate governance provides stockholders with very meaningful protections against actions that may not be in their best interests. On the other hand, the Board recognizes that certain stockholders and institutions disagree and believes that acknowledgement of this perspective is an important matter of corporate governance. Accordingly, after due consideration of the competing interests discussed above and in recognition of the stockholder vote at the Company’s 2016 annual meeting, the Board has determined to recommend a vote to approve the Simple Majority Amendment.or stockholders.
The Board of Directors recommends that you vote FOR“FOR” the Company’s proposal to amend the Company’s Fifth Amended and Restated Certificate of Incorporation to remove supermajority voting requirementsallow stockholders holding 15% or more of the Company’s outstanding shares of common stock the ability to request a record date in connection with a stockholder action by written consent (designated as Proposal 5).
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PROPOSAL 6
STOCKHOLDER PROPOSAL ON SPECIAL SHAREOWNER MEETINGSTO IMPROVE SHAREHOLDER WRITTEN CONSENT
A stockholder has advised the Company that he plans to present the following proposal at the annual meeting.Annual Meeting. In accordance with SEC rules and the stockholder’s request, the proposal presented below is reproduced verbatim, as submitted to us by the stockholder, proposal is presented below as submittedincluding stockholder-supplied emphasis. The content has not been edited by the stockholder.Company for grammatical or typing errors. The Company disclaims all responsibility for the content of the proposal and the supporting statement, including other sources referenced in the supporting statement. The name and address of, and the number of shares owned by, such stockholder will be provided upon request to the Secretary of the Company.our Corporate Secretary.
FOR THE REASONS STATED IN THE BOARD’S RESPONSE, WHICH FOLLOWS THE STOCKHOLDER PROPOSAL, THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “AGAINST” THE STOCKHOLDER PROPOSAL.
Stockholder Proposal
Proposal 6 – Special Shareowner MeetingsImprove Shareholder Written Consent
RESOLVED, Shareowners ask
Shareholders request that our board toof directors take the steps necessary (unilaterally if possible) to amend our bylaws and each appropriate governing document to give holders in the aggregate ofenable 10% of our outstanding common stock the power to call a special shareowner meeting. This proposal does not impact our board’s current power to call a special meeting.
Delaware law allows 10% of our shares to callrequest a special meeting. Special meetings allow shareownersrecord date to vote on important matters, suchinitiate written consent.
Currently it takes the formal backing 32% of all shares that normally cast ballots at the annual meeting to do so little as electing new directorsto ask for a record date for written consent.
Plus any action taken by written consent would still need 65% supermajority approval from the shares that can arise between annual meetings. Shareowner input onnormally cast ballots at the timing of shareowner meetings is especially important when events unfold quickly and issues may become moot by the next annual meeting. This 65% vote requirement gives overwhelming supermajority protection to management that will remain unchanged.
Enabling 10% of shares to apply for a record date for written consent is importantreasonable because there could be15-months or more betweenscores of companies do not even require 01% of stock ownership to do so little as request a record date.
The current high 32% stock ownership threshold serves as a poison pill to discourage any potential shareholder group from even considering acting by written consent. The current high 32% stock ownership threshold to take the first baby step to act by written consent serves to kill written consent in the crib.
This proposal topic won 48% support at the 2021 United Rentals, annual meetings.
It may be possible to adopt this proposal by incorporating brief text similar to this into our governing documents:
“Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute, may be called by the Chairman of the Board or the President, and shall be called by the Chairman of the Board or President or Secretary upon the order in writing ofmeeting. The 48% support likely means a majority of or by resolution ofvote from the shares that have access to independent proxy voting advice to make a more informed voting decision. The Board of Directors or at the request in writing of stockholders owning 10% of the entire capital stock of the Corporation issued and outstanding and entitled toshould respect this majority vote.”
Please vote to enhance shareholder value:
Special Shareowner Meetings – Proposal 6 - Improve Shareholder Written Consent
Board Response to the Stockholder Proposal
The Board recommends a vote “AGAINST” this stockholder proposal (the “Stockholder Proposal”) and a vote “FOR” Proposal 5 put forth by the Stockholder Special Meeting ProposalCompany for the following reasons:reasons.
TheOur Board agreeshas carefully considered the Stockholder Proposal and recommends a vote “AGAINST” it because the Board believes that providingthe change sought in the Stockholder Proposal is not in the best interests of the Company or our stockholders.
Our stockholders withhave the right to askact by written consent, and in order to request a record date in connection with a stockholder action by written consent, the Boardstockholder(s) seeking to call a special meeting is an important corporate governance practice that enhances stockholder rights. It is well recognized, however,take such action must own not less than 25% of the Company’s outstanding shares of common stock (without any minimum length of ownership requirement). The 25% threshold was implemented in recognition of the
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fact that an unlimited or unrestrained right to call forrequest a special meeting,record date in connection with a stockholder action by written consent, an extraordinary event for any public company, can be disruptive, costly and inconsistent with the best interests of all of our stockholders. However, our Board continually reassesses our corporate governance practices to identify areas in which the Company can help provide greater transparency and accountability for the benefit our stockholders. After balancing these important yet competing interests, the Board has now concluded that itour stockholders should provide stockholders withbe given the opportunity to adopt aby-lawapprove an amendment to the Company’s Fifth Amended and Restated Certificate of Incorporation that permitswould permit holders of 25% (as opposed to 10%)15% of the Company’s outstanding shares of common stock (lowered from the current 25% threshold) to request a record date in connection with a stockholder action by written consent. At the 2023 annual meeting, the Board is requesting stockholders to vote “FOR” Proposal 5 (the “Company Written Consent Proposal”) to lower the share ownership threshold for stockholders to request a record date in connection with a stockholder action by written consent from 25% to 15%.
The 10% threshold set forth in the aggregateStockholder Proposal to request a record date in connection with a stockholder action by written consent (which 10% threshold was also previously proposed by the same stockholder and failed to receive majority support at our 2021 annual meeting) would significantly increase the risk of abuse by a single stockholder or a small group of stockholders in the pursuit of interests that may not be shared more broadly by the Company’s other stockholders. In addition, it would divert the attention of the Board and management from, and cause disruption to, the operation of the Company’s business. The ability to request a record date to initiate stockholder action by written consent should include reasonable safeguards to ensure that its use is limited to those circumstances where a number of stockholders representative of the broader interests of all stockholders believe a matter is sufficiently extraordinary that it must be addressed outside the context of a stockholder meeting.
The Board also believes that the failure of the similar stockholder proposal voted on at our 2021 annual meeting (to lower the ownership threshold in our stockholders’ right to take action by written consent from 25% to 10%) and the overwhelming support at our 2022 annual meeting for the Company’s proposal to lower the ownership threshold with respect to our stockholders’ right to call for a special meeting as set out under “PROPOSAL 7 – COMPANY PROPOSAL TO AMEND THE COMPANY’S RESTATED CERTIFICATE OF INCORPORATION TO ALLOW AMENDMENT TOBY-LAWS GRANTING STOCKHOLDERS HOLDINGfrom 25% OR MORE THE ABILITY TO CALL SPECIAL MEETINGS OF STOCKHOLDERS”.
The Board thus recommends that stockholders voteAGAINST the Stockholder Special Meeting Proposal and in favor of the Company’s Special Meeting Proposal. The Board believes that the 10%15% threshold proposed by the Company will strike the appropriate balance between enhancing the rights of required ownership called for instockholders and the Stockholder Special Meeting Proposal is unduly lowCompany’s corporate governance practices, and would result in disruptionswill provide stockholders with a meaningful ability to initiate stockholder action by written consent, while (i) protecting against abuse or misuse of such right by stockholders with narrow or short-term interests, and (ii) avoiding the administrative burdens, costs and distractions to the Company’s business operations and the costly expense of a special meeting of stockholders, all to considerCompany that would arise from stockholder actions by written consent in connection with matters that may be of little or no interest to, and which may not be broadly in the best interests of all of our stockholders.
Furthermore, stockholder action by written consent should not be viewed as an ordinary course event. Monitoring stockholder action by written consent is still a substantial undertaking and requires considerable use of the Company’s other stockholders. Special meetings can causetime and resources. There is also an additional cost to the Company and its stockholders, as the time and effort associated with overseeing the solicitation of and communication of information to incur substantial expensesstockholders and the delivery and examination of written consents divert Board and management attention away from their primary focus of leading and operating our business.
Our current corporate governance structure promotes transparency and accountability.
The Board believes that lowering the requisite ownership threshold to request a record date in connection with preparing and providing stockholders with proxy materials and can cause significant disruptionsa stockholder action by written consent to 10% is unnecessary given the Company’s normal business operationsstrong corporate governance practices and the opportunity being presented to our stockholders to adopt the 15% ownership threshold by requiring significant attention from our management team, diverting their focus from overseeingapproving the Company Written Consent Proposal. The Company’s corporate governance practices already provide transparency and operating our business inaccountability of the best interestBoard to all of all stockholders. Abusethe Company’s stockholders and demonstrate that the Company is responsive to stockholder concerns, including:
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The Company is committed to the highest standards of corporate governance that promote long-term shareholder value. To that end, we both solicit and value stockholder discussion and input on corporate governance matters and take every step possible to ensure that such input is receivedinclude their own nominees for directors in the ordinary course. Our Investor Relations team maintainsCompany’s proxy materials along with the Board-nominated candidates.
We maintain open and regular lines of direct communication with large and small stockholders, financial analysts and shareholder advisory services about important issues relating to our stockholders,business and wegovernance and regularly incorporate feedback from those engagements into our governing documents, policies, and practices. We have been responsiveno history of materially modifying stockholder rights without prior robust consultation and engagement with shareholders. Stockholders also can and do effectively use our annual meeting to stockholder feedback received incommunicate their views to management, the past. StockholdersBoard, and other interested parties may communicate directly and confidentially with the Board as described under “Corporate Governance Matters—Direct Communications with Directors.” Calling for a special meeting, on the other hand, is not in the ordinary course; it is an extreme and disruptive action for a stockholder to take in order to engage management and the Board. With its nominal ownership threshold of just 10%,stockholders.
In summary, we cannot supportbelieve the Stockholder Special Meeting Proposal.
For these reasons, the Board opposes this proposal and recommends a vote AGAINST the stockholder proposal on special shareowner meetings (designated as Proposal 6).
COMPANY PROPOSAL TO AMEND THE COMPANY’S RESTATED CERTIFICATE OF INCORPORATION TO ALLOW AMENDMENT TOBY-LAWS GRANTING STOCKHOLDERS HOLDING 25% OR MORE THE ABILITY TO CALL SPECIAL MEETINGS OF STOCKHOLDERS
Due to provisionsis unnecessary in light of the Company’s Restated Certificate of Incorporation andBy-Laws limiting the ability of stockholders to call special meetings, Company stockholders do not presently have the right to require the Company to call a special meeting of stockholders. This Proposal 7 (the “Company Special Meeting Proposal”) is a result of the Board’s ongoing review of ourstrong corporate governance practices and its considerationthe more appropriate 15% ownership threshold being presented to our stockholders in the binding Company Written Consent Proposal, and we believe that adoption of the Stockholder Proposal would significantly weaken the procedural protections in place to permit robust stockholder special meeting proposal submitted by a stockholder as set forth in Proposal 6 (the “Stockholder Special Meeting Proposal”). After due consideration of corporate governance best practices for our stockholders and a balancing of the competing interests discussed below, the Board has determined that it is in the Company stockholders’ best interestsengagement while preventing unwarranted distractions to provide stockholders with the opportunity to consider the Company Special Meeting Proposal, which would give Company stockholders the ability to request the Board to call a special meeting, as an alternative to the Stockholder Special Meeting Proposal.
The Board has declared advisable and is submitting to Company stockholders for their consideration an amendment to the Company’s Restated Certificate of Incorporation to eliminate the provisions limiting stockholders’ ability to call special meetings of stockholders, with the stockholder right to request the Board to call a special meeting to be addressed in the proposedby-law amendments discussed below. If the Company Special Meeting Proposal is approved by stockholders, the resulting elimination of the limitation in the Company’s Restated Certificate of Incorporation on the ability to call special meetings of stockholders would allow the Board the flexibility to make the necessary changes to the Company’sBy-Laws to implement the right for stockholders who own at least 25% of the Company’s outstanding shares of common stock to request the Board to call a special meeting of stockholders. The text of the proposed changes to be effected by the amendment to the Restated Certificate of Incorporation in its Article IX is attached to this Proxy Statement as Appendix B,management and the textincurrence of the changes toadditional burdens and unnecessary expenses in connection with matters that may not be implemented in theBy-Laws in their Section 2.03 is attached to this Proxy Statement as Appendix C, with deletions indicated by strikeout and additions indicated by underline.
The Board believes stockholders should be permitted to request special meetings, but in considering the stockholders’ best interests, the Board must also consider the disruption that special meetings cause to the Company’s business operations and the substantial costs they entail. Specifically, organizing and preparing for a special meeting involves substantial expense and requires significant attention from our management team, diverting their focus from performing their primary functions of overseeing and operating our businessbroadly in the best interests of all stockholders. For every special meeting called, we must provide each stockholder with a notice of meeting and proxy materials at significant legal, printing and mailing expenses, as well as incur the other costs normally associated with holding a stockholder meeting.our stockholders.
GivenThe Board believes that special meetings of stockholders would result in such expenses and disruptions to the Company’s business operations, and therefore maythis Stockholder Proposal is not be in the best interests of the stockholders as a whole,our stockholders. Accordingly, the Board believes it is in the stockholders’ best interests if special meetings are only called to consider matters thatrecommends a significant portion of stockholders believe warrant immediate attention and cannot be delayed for consideration until the next annual meeting. In furtherance, the Board believes that the Company Special Meeting Proposal strikes the appropriate balance between enhancing the rights of all stockholders and preventing the disruption and waste of corporate assets that would arise if, asvote “AGAINST” the Stockholder Special Meeting Proposal provides, the required ownership threshold were set so low (i.e., at 10%) that owners of a small minority of shares could call a special meeting to consider a matter of little or no interest to, and which may not be in the best interests of, the Company’s other stockholders.
Furthermore, unlike the Stockholder Special Meeting Proposal, which is nonbinding and will require the necessary amendments to the Restated Certificate of Incorporation andBy-Laws to be considered and approved at a stockholder meeting subsequent to the upcoming 2017 annual meeting of Company stockholders, the Company Special Meeting Proposal can be approved by stockholders at the 2017 annual meeting, which will allow the Board to implement the right for stockholders who own at least 25% of the Company’s outstanding shares of common stock to request the Board to call a special meeting of stockholders pursuant to the proposed amendments to theBy-Laws, which will become effective immediately upon stockholder approval of the Company Special Meeting Proposal without any further action by the Board or stockholders.
The description above of the proposed amendment to our Restated Certificate of Incorporation is qualified in its entirety by reference to and should be read in conjunction with the full text of our certificate of incorporation, as proposed to be amended in Appendix B.
Terms of the ProposedBy-Law Amendments Allowing Stockholders to Call Special Meetings
If the amendment to the Company’s Restated Certificate of Incorporation described above and set forth in Appendix B is approved by the stockholders of the Company, the Board will adopt amendments to theBy-Laws by which the Board will be required to call a special meeting of the stockholders upon the written request of one or more stockholders who own at least 25% of the Company’s outstanding shares of common stock in the aggregate.
The amendments to theBy-Laws as set forth in Appendix C further provide that to be in proper form to call a special meeting of the stockholders, the stockholder request for a meeting must include certain information, including a statement of the purpose of the special meeting as well as an acknowledgement that any sale of shares by the requesting stockholder(s) prior to the special meeting will be deemed a revocation of the special meeting request in respect of the shares so disposed, and that such shares will no longer be counted for purposes of determining whether the 25% ownership requirement has been satisfied.
The amendments to theBy-Laws would also be designed to prevent duplicative and unnecessary meetings. The Board would not be required to call a stockholder requested special meeting if, among other things, (i) the Company receives the stockholder request for a meeting during the period beginning 90 days prior to the first anniversary date of the preceding annual meeting of stockholders and ending on the date of the next annual meeting, (ii) the stockholder request for a meeting relates to an item of business that is not a proper subject for stockholder action under applicable law, (iii) a substantially similar item was presented at any meeting of stockholders held within 120 days prior to the Company’s receipt of the stockholder meeting request or (iv) the proposed item(s) of business are presented at another meeting called by the Board within 90 days after receipt of the stockholder request for such meeting.
In the event the amendment described in the Company Special Meeting Proposal is approved, theseby-law amendments would become effective without any further action by the Board or stockholders. The Company will then file the amendedBy-Laws, as amended to include these provisions, as an exhibit to a filing with the Securities and Exchange Commission.
The description above of the proposed amendments to ourBy-Laws is qualified in its entirety by reference to and should be read in conjunction with the full text of ourBy-Laws, as proposed to be amended in Appendix C.
Voting
As indicated in the “Annual Meeting of Stockholders—Matters to be Acted Upon” section in this Proxy Statement, if stockholders vote to approve Proposal 5, we intend to file the amendment to our Restated Certificate of Incorporation immediately after the requisite vote is obtained during the annual meeting andprior to the vote on Proposal 7. Then, after confirmation of receipt from the Secretary of State of
Delaware, stockholders will proceed to vote on Proposal 7. If Proposal 5 passes at the annual meeting and we file the related amendment to the Company’s Restated Certificate of Incorporation during the annual meetingprior to voting on Proposal 7, the affirmative vote of holders of at least 50% of the voting power of all shares of capital stock of the Company entitled to vote generally for the election of directors is required for approval. If Proposal 5 does not pass or if we do not file the amendment to the Company’s Restated Certificate of Incorporation during the annual meeting, the affirmative vote of holders of at least66-2/3% of the voting power of all shares of capital stock of the Company entitled to vote generally for the election of directors is required for approval.
The Board of Directors recommends that you vote FOR the Company’s proposal to amend the Company’s Restated Certificate of Incorporation to remove the limitations on the stockholders’ ability to call special meetings of stockholders (designated as Proposal 7)6) and a vote “FOR” the Company Written Consent Proposal (designated as Proposal 5).
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OTHER MATTERS
Other Matters to be Presented at the 20172023 Annual Meeting
As of the date of this Proxy Statement, the Board does not know of, or have reason to expect that there will be, any matter to be presented for action at the annual meetingAnnual Meeting other than the proposals described herein. If any other matters not described herein should properly come before the annual meetingAnnual Meeting for stockholder action, it is the intention of the persons named in the accompanying proxy to vote, or otherwise act, in respect thereof in accordance with the Board’s recommendations.
Availability of Annual Report on Form10-K and Proxy Statement
Upon the written request of any record holder or beneficial owner of shares entitled to vote at the annual meeting,Annual Meeting, we will provide, without charge, a copy of our annual report on Form10-K for the fiscal year ended December 31, 2016,2022, as filed with the SEC, including financial statements and financial statement schedules, but excluding exhibits. Such requests should be mailed to United Rentals, Inc., 100 First Stamford Place, Suite 700, Stamford, Connecticut 06902, Attention: Corporate Secretary.
We will only deliver one Notice to multiple stockholders of record sharing an address. Stockholders of record sharing an address who wish to receive separate copies of the Notice, or separate paper copies of the proxy statement and annual report to stockholders, or who wish to begin receiving a single paper copy of such materials, may make such request by following the instructions contained in the Notice and as follows:
Stockholders of record sharing an address who elect to receive a single paper copy of the proxy statement and annual report will continue to receive separate proxy cards, to the extent applicable.
If you would like to receive future stockholder communications via the Internet exclusively, and no longer receive any material by mail, please visithttp://www.amstock.comwww.astfinancial.com, click “Login” and click on “Shareholders/Account Access” to enroll. Please enterthen select “Shareholder Central Login”. Enter your account number and tax identification number to log in, then select “Receive Company Mailings viaE-Mail” and provide youre-mail address.“electronic distribution.”
Incorporation by Reference
To the extent that this Proxy Statement has been, or will be, specifically incorporated by reference into any other filing by the Company under the Securities Act of 1933, as amended, or the Exchange Act, the sections of this Proxy Statement entitled “Compensation Committee Report” and “Audit Committee Report” (to the extent permitted by SEC rules) shall not constitute soliciting materials and should not be deemed filed or so incorporated, except to the extent the Company specifically incorporates such report in such filing.
Section 16(a) Beneficial Ownership Reporting Compliance
The members of the Board, the executive officers and persons who hold more than ten percent of the outstanding Common Stock are subject to the reporting requirements of Section 16(a) of the Exchange Act, which requires them to file reports with respect to their ownership of our common stock and their transactions in such common stock. Based upon a review of (i) the copies of Section 16(a) reports that we have received from such persons or entities for transactions in our common stock and their common stock holdings for the fiscal year ended December 31, 2016 and (ii) the representations
received from one or more of such persons or entities that no annual Form 5 reports were required to be filed by them for the fiscal year ended December 31, 2016, we believe all reporting requirements under Section 16(a) for such fiscal year were met in a timely manner by our directors, executive officers and beneficial owners of more than ten percent of our common stock.
Submission of Stockholder Proposals for the 20182024 Annual Meeting
The ways in which stockholders can submit proposals for our 2024 Annual Meeting are summarized below. In addition, we welcome stockholders to engage with us on governance and other matters outside of the proxy and annual meeting process.
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Stockholder Proposals for the 20182024 Annual Meeting (Exchange Act Rule14a-8)
Rule14a-8 under the Exchange Act permits stockholders to submit proposals for inclusion in our proxy statement if the stockholders and the proposals meet certain requirements specified in that rule. A stockholder proposal submitted according to this rule for business to be brought before the 2018 annual meeting of stockholders2024 Annual Meeting will be acted upon only in the following circumstances:
Stockholder Nominees for Inclusion in the 20182024 Proxy Statement (Proxy Access)
Article III, Section 3.10 of ourBy-Laws permits a stockholder or group of stockholders (up to 20) who have owned at least three percent (3%) of the Company’s common stock for at least three (3) years to submit director nominees (up to the greater of two (2) nominees or twenty percent (20%) of the total number of directors of the Company) for inclusion in our proxy statement if the nominating stockholder(s) satisfies the requirements specified in ourBy-Laws. Notice of director nominees submitted pursuant to our proxy accessby-law By-Law must be submitted to the Corporate Secretary at the principal executive office of the Company no earlier than 150 calendar days and no later than 120 calendar days before the first anniversary of the date that the Company mailed its proxy statement for the prior year’s annual meeting of stockholders. Additional information about the proxy access requirements can be found in ourBy-Laws.
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Other Stockholder Proposals or Nominees for Presentation at the 20182024 Annual Meeting (Advance Notice)
Article II, Section 2.07 of ourBy-Laws requires that any stockholder proposal, including director nominations, that is not to be included in next year’s proxy statement (either under Exchange Act Rule14a-8 or our proxy accessBy-Laws), but is instead sought to be presented directly at the 2018 annual meeting,2024 Annual Meeting, must be delivered to, or mailed and received by, the Corporate Secretary at the principal executive office
of the Company not less than 90 days and not more than 120 days prior to the first anniversary date of the annual meeting for the preceding year. Additional information about the advance notice requirements can be found in ourBy-Laws.
The N&CG Committee will evaluate recommendations from security holders in the same manner that it evaluates recommendations from other sources. You should note that the foregoing process relates only to bringing potential director candidates to the attention of the N&CG Committee. Following this process will not give you the right to directly propose a director nominee at any meeting of stockholders.
APPENDIX AIn addition to satisfying the foregoing requirements under our By-Laws, to comply with the universal proxy rules, stockholders who intend to solicit proxies in support of director nominees other than our nominees must also comply with all applicable requirements of Rule 14a-19 under the Exchange Act. The advance notice requirement under Rule 14a-19 does not override or supersede the longer advance notice requirement under our By-Laws.
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Appendix A
Note: The proposed changes to the Company’s Fifth Amended and Restated Certificate of Incorporation shown below are presented in a blackline format, with a single line through text we propose to delete and a single line underneath text we propose to add.
FIFTHSIXTH AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF UNITED RENTALS, INC.
United Rentals, Inc., a Delaware corporation (the “Corporation”), does hereby certify as follows:
That Amended and Restated Certificate of Incorporation was amended by a Certificate of Elimination filed with the Secretary of State of Delaware on March 16, 2009 and restated by a Restated Certificate of Incorporation filed with the Secretary of State of the State of Delaware on March 16, 2009 (the “
Restated Certificate of Incorporation”). That Restated Certificate of Incorporation was amended by two Certificates of Amendment filed with the Secretary of State of the State of Delaware on May 4, 2017 and restated by the Third Amended and Restated Certificate of Incorporation filed with the Secretary of State of the State of Delaware on May 4, 2017 (the “Third Amended and Restated Certificate of Incorporation”). The Third Amended and Restated Certificate of Incorporation was amended by the Certificate of Change of Registered Agent and Registered Office on June 1, 2017. In addition, on June 1, 2017, a restated Certificate of Incorporation (the “Fourth Restated Certificate of Incorporation”) was filed with the Secretary of State of the State of Delaware, which integrated into a single instrument all of the provisions of the Third Amended and Restated Certificate of Incorporation that were then in effect and operative as a result of having theretofore been filed with the Secretary of State of the State of Delaware as certificates of amendment to the Third Amended and Restated Certificate of Incorporation. The Fourth Restated Certificate of Incorporation was amended by the Certificate of Amendment filed with the Secretary of State of the State of Delaware on [May 11]7, 2020. In addition, on May 7, 2020, a Fifth Amended and Restated Certificate of Incorporation (the “Fifth Amended and Restated Certificate of Incorporation”) was filed with the Secretary of State of the State of Delaware, integrating into a single instrument all of the provisions of the Fourth Restated Certificate of Incorporation which were then in effect and those amendments approved by the stockholders on May 7, 2020.107
ARTICLE I.
The name of the Corporation is United Rentals, Inc.
ARTICLE II.
The address of the Corporation’s registered office in the State of Delaware is United Corporate Services, Inc., 15 East North Street, Dover,Corporation Service Company, 251 Little Falls Drive, Wilmington, Delaware 19901,19808, County of Kent.New Castle. The name of its registered agent at such address is United Corporate Services, Inc.Corporation Service Company.
ARTICLE III.
The authority of the Board of Directors with respect to each series of Preferred Stock shall include, but not be limited to, determination of the following: (a) the number of shares constituting that series and the distinctive designation of that series; (b) the dividend rate on the shares of that series, whether dividends shall be cumulative, and if so, from which date or dates, and the relative rights of priority, if any, of payment of dividends on shares of that series; (c) whether that series shall have voting rights in addition to the voting rights provided by law, and if so, the terms of such voting rights; (d) whether that series shall have conversion privileges, and if so, the terms and conditions of such privileges, including provision for adjustment of the conversion rate in such events as the Board of Directors shall determine; (e) whether or not the shares of that series shall be redeemable, and if so, the terms and conditions of such redemption, including the date or dates upon or after which they shall be redeemable, and the amount per share payable in case of redemption, which amount may vary under different conditions and at different redemption dates; (f) whether that series shall have a sinking fund for the redemption or purchase of shares of that series, and if so, the terms and the amount of such sinking funds; (g) the rights of the shares of that series in the event of voluntary or involuntary liquidation, dissolution or winding up of the Corporation, and the relative rights of priority, if any, of payment of shares of that series; and (h) any other relative rights, preferences and limitations of that series.
ARTICLE IV.
The purpose of the Corporation is to engage in any lawful act or activity for which corporations may now or hereafter be organized under the Delaware General Corporation Law.
ARTICLE V.
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ARTICLE VI.
The business and affairs of the Corporation shall be managed by and under the direction of the Board of Directors (the “Board”). The Board may exercise all such authority and powers of the Corporation and do all such lawful acts and things as are not by statute or this FifthSixth Amended and Restated Certificate of Incorporation directed or required to be exercised or done by the stockholders.
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ARTICLE VII.
TheBy-Laws of the Corporation may provide, without limitation, requirements relating to the notice and conduct of annual meetings, special meetings, and the nomination and election of directors of the Corporation.
ARTICLE VIII.
In furtherance and not in limitation of the powers conferred by law or in thisFifthSixth Amended and Restated Certificate of Incorporation, the Board (and any committee of the Board) is expressly authorized, to the extent permitted by law, to take such action or actions as the Board or such committee may determine to be reasonably necessary or desirable to (a) encourage any person to enter into negotiations with the Board and management of the Corporation with respect to any transaction which may result in a change in control of the Corporation which is proposed or initiated by such person or (b) contest or oppose any such transaction which the Board or such committee determines to be unfair, abusive or otherwise undesirable with respect to the Corporation and its business, assets or properties or the stockholders of the Corporation, including, without limitation, the adoption of plans or the issuance of rights, options, capital stock, notes, debentures or other evidences of indebtedness or other securities of the Corporation, which rights, options, capital stock, notes, evidences of indebtedness and other securities (i) may be exchangeable for or convertible into cash or other securities on such terms and conditions as may be determined by the Board or such committee and (ii) may provide that any holder or class of holders thereof designated by the Board or any such committee will be treated differently than all other holders in respect of the terms, conditions, provisions and rights of such securities.
ARTICLE IX.
Subject to the rights, if any, of holders of any class or series of Preferred Stock then outstanding, (i) stockholders are not permitted to call a special meeting of stockholders or to require the Board or officers of the Corporation to call such a special meeting, (ii) a special meeting of stockholders may only be called by a majority of the Board or by the chief executive officer, (iii) the business permitted to be conducted at a special meeting of stockholders shall be limited to matters properly brought before the meeting by or at the direction of the Board, and (iv) anyAny action required or permitted to be taken by the stockholders must be taken at a duly called and convened annual meeting or special meeting of stockholders and cannotor may be takeneffected by a consent in writing.writing by the stockholders of the Corporation as provided by, and subject to the limitations in, Article XI of this FifthSixth Amended and Restated Certificate of Incorporation.
Meetings of stockholders may be held within or without the State of Delaware, as theBy-Laws may provide. The books of the Corporation may be kept (subject to any provision contained in the statute) outside the State of Delaware at such place or places as may be designated from time to time by the Board or in theBy-Laws of the Corporation.
ARTICLE X.
A director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for any breach of fiduciary duty as a director, except for liability (i) for any breach of the director’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which the director derived an improper personal benefit. If the Delaware General Corporation Law is amended after approval by the stockholders of this Article to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director shall be eliminated or limited to the fullest extent permitted by the Delaware General Corporation Law, as so amended.
IN WITNESS WHEREOF, the Corporation has caused this Restated Certificate of Incorporation to be duly executed this16thday ofMarch, 2009. , 20 .
ARTICLE XI.
RESTATED CERTIFICATE OF INCORPORATION
OF UNITED RENTALS, INC.
United Rentals, Inc., a Delaware corporation (the “Corporation”), does hereby certify as follows:
1. The name of the Corporation is United Rentals, Inc. The Corporation was incorporated under the name “United Rentals Holdings, Inc.” The original Certificate of Incorporation (the “OriginalCertificate”) of the Corporation was filed with the Secretary of State of the State of Delaware on July 20, 1998. The Original Certificate was amended and restated by an Amended and Restated Certificate of Incorporation filed with the Secretary of State of the State of Delaware on August 5, 1998. That Amended and Restated Certificate of Incorporation was amended by a Certificate of Amendment of the Amended and Restated Certificate of Incorporation filed with the Secretary of State of the State of Delaware on September 29, 1998 and a Certificate of Amendment of the Amended and Restated Certificate of Incorporation filed with the Secretary of State of the State of Delaware on June 7, 2007 (as amended, the “Amended and Restated Certificate of Incorporation”).
2. Pursuant to Section 245(a) of the Delaware General Corporate Law, this Restated Certificate of Incorporation integrates into a single instrument all of the provisions of the Amended and Restated Certificate of Incorporation which are in effect and operative as a result of having theretofore been filed with the Secretary of State of the State of Delaware as certificates of amendment to the Amended and Restated Certificate of Incorporation.
3. Pursuant to Section 245(c) of the Delaware General Corporation Law, this Restated Certificate of Incorporation only restates and integrates and does not further amend the provisions of the Amended and Restated Certificate of Incorporation as theretofore amended, and there is no discrepancy between those provisions and the provisions of this Restated Certificate of Incorporation.
4. The terms and provisions of this Restated Certificate of Incorporation have been duly adopted pursuant to the provisions of Section 245 of the Delaware General Corporation Law.
5. The text of the Amended and Restated Certificate of Incorporation is hereby restated to read in its entirety as follows:
ARTICLE I.
The name of the Corporation is United Rentals, Inc.
ARTICLE II.
The address of the Corporation’s registered office in the State of Delaware is United Corporate Services, Inc., 15 East North Street, Dover, Delaware 19901, County of Kent. The name of its registered agent at such address is United Corporate Services, Inc.
ARTICLE III.
The authority of the Board of Directors with respect to each series of Preferred Stock shall include, but not be limited to, determination of the following: (a) the number of shares constituting that series and the distinctive designation of that series; (b) the dividend rate on the shares of that series, whether dividends shall be cumulative, and if so, from which date or dates, and the relative rights of priority, if any, of payment of dividends on shares of that series; (c) whether that series shall have voting rights in addition to the voting rights provided by law, and if so, the terms of such voting rights; (d) whether that series shall have conversion privileges, and if so, the terms and conditions of such privileges, including provision for adjustment of the conversion rate in such events as the Board of Directors shall determine; (e) whether or not the shares of that series shall be redeemable, and if so, the terms and conditions of such redemption, including the date or dates upon or after which they shall be redeemable, and the amount per share payable in case of redemption, which amount may vary under different conditions and at different redemption dates; (f) whether that series shall have a sinking fund for the redemption or purchase of shares of that series, and if so, the terms and the amount of such sinking funds; (g) the rights of the shares of that series in the event of voluntary or involuntary liquidation, dissolution or winding up of the Corporation, and the relative rights of priority, if any, of payment of shares of that series; and (h) any other relative rights, preferences and limitations of that series.
ARTICLE IV.
The purpose of the Corporation is to engage in any lawful act or activity for which corporations may now or hereafter be organized under the Delaware General Corporation Law.
ARTICLE V.
ARTICLE VI.
The business and affairs of the Corporation shall be managed by and under the direction of the Board of Directors (the “Board”)A.
ARTICLE VII.
TheBy-Laws of the Corporation may provide, without limitation, requirements relating to the notice and conduct of annual meetings, special meetings, and the nomination and election of directors of the Corporation.
ARTICLE VIII.
In furtherance and not in limitation of the powers conferred by law or in this Restated Certificate of Incorporation, the Board (and any committee of the Board) is expressly authorized, to the extent permitted by law, to take such action orCertain actions as the Board or such committee may determine to be reasonably necessary or desirable to (a) encourage any person to enter into negotiations with the Board and management of the Corporation with respect to any transaction which may result in a change in control of the Corporation which is proposed or initiated by such person or (b) contest or oppose any such transaction which the Board or such committee determines to be unfair, abusive or otherwise undesirable with respect to the Corporation and its business, assets or properties or the stockholders of the Corporation, including, without limitation, the adoption of plans or the issuance of rights, options, capital stock, notes, debentures or other evidences of indebtedness or other securities of the Corporation, which rights, options, capital stock, notes, evidences of indebtedness and other securities (i) may be exchangeable for or convertible into cash or other securities on such terms and conditions as may be determined by the Board or such committee and (ii) may provide that any holder or class of holders thereof designated by the Board or any such committee will be treated differently than all other holders in respect of the terms, conditions, provisions and rights of such securities.
ARTICLE IX.
Subject to the rights, if any, of holders of any class or series of Preferred Stock then outstanding, (i) stockholders are not permitted to call a special meeting of stockholders or to require the Board or officers of the Corporation to call such a special meeting, (ii) a special meeting of stockholders may only be called by a majority of the Board or by the chief executive officer, (iii) the business permitted to be conducted at a special meeting of stockholders shall be limited to matters properly brought before the meeting by or at the direction of the Board, and (iv) anyAny action required or permitted to be taken by the stockholders must be taken at a duly called and convened annual meeting or special meeting of stockholders and cannot be taken by consent in writing.
Meetings of stockholders may be held within or without the State of Delaware, as theBy-Laws may provide. The books of the Corporation may be kept (subject to any provision contained in the statute) outside the State of Delaware at such placean annual or places as may be designated from time to time by the Board or in theBy-Laws of the Corporation.
ARTICLE X.
A director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for any breach of fiduciary duty as a director, except for liability (i) for any breach of the director’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which the director derived an improper personal benefit. If the Delaware General Corporation Law is amended after approval by the stockholders of this Article to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director shall be eliminated or limited to the fullest extent permitted by the Delaware General Corporation Law, as so amended.
IN WITNESS WHEREOF, the Corporation has caused this Restated Certificate of Incorporation to be duly executed this16thday ofMarch,2009.20 .
BY-LAWS
-of-
UNITED RENTALS, INC.
(a Delaware corporation hereinafter called the “Corporation”)
ARTICLE I
Offices
SECTION 1.01. Offices. The Corporation may have offices both within and without the State of Delaware as the Board of Directors may from time to time determine.
ARTICLE II
Meetings of Stockholders
SECTION 2.01. Place of Meetings. Meetings of stockholders may be held at any place, either within or without the State of Delaware, designated by the Board of Directors.
SECTION 2.02. Annual Meeting. The annual meeting of stockholders for election of directors shall be held on such date and at such time as shall be designated by the Board of Directors. Any other proper business may be transacted at the annual meeting.
SECTION 2.03. Special Meetings. Stockholders are not permitted to call a special meeting of stockholders or to require the Board of Directors or officers of the Corporation to call such a special meeting.A special meeting of stockholders may only be called by a majority of the Board of Directors or by the chief executive officer, to be held on such date and at such time and place as may be stated in the notice of the meeting. The business permitted to be conducted at a special meeting of stockholders shall be limited to matters properly brought before the meeting by or at the direction of the Board of Directors. Any action required or permitted to be taken by the stockholders must be taken at a duly called and convened annual meeting or special meeting of stockholders and cannot be taken by consent in writing.
(a)A special meeting of stockholders may be called by a majority of the Board of Directors or by the chief executive officer.
(b)A special meeting of the stockholders shallmay be calledeffected without a meeting by
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Requisite Percentage, then to be valid, the Special Meeting Request must also include documentary evidence (or, if not simultaneously provided with any Special Meeting Request, such documentary evidence must be delivered to the Secretary within ten days after the date on which such Special Meeting Request is delivered to theSecretary) that the beneficial owners on whose behalf the Special Meeting Request is being made“submitted beneficially own” theRequisite Percentage as at least
(c)Special meetingsthen outstanding shares of Common Stock of the stockholdersCorporation), who shall be held on such date and at such time and place as may be stated incontinue to own not less than
(d)NotwithstandingBy-laws of the foregoing provisionsCorporation as though each stockholder submitting such Request was submitting a notice of this Section 2.03, a specialnomination for election to the Board of Directors or of other business to be brought before a meeting requestedof stockholders, (b) the text of the proposal (including the text of any resolutions to be adopted by Consent and the language of any proposed amendment to the By-Laws of the Corporation), and (c) the agreement of the requesting stockholders required by the By-Laws of the Corporation. The Board of Directors may require the stockholders submitting a Request to furnish such other information as it may require to determine the validity of the Request. Stockholders seeking to authorize or take action by Consent shall update the information provided in the Request as required by the By-Laws of the Corporation with respect to information provided concerning nominations for elections to the board or other business at stockholders meetings.
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(e)In determining whether a special meeting of stockholders has been requested by the record holders of shares representing in the aggregate at least the Requisite Percentage, multiple Special Meeting Requests deliveredaction referred to the Secretary will be considered together only if (i) each Special Meeting identifies substantially the same purpose or purposes of the special meeting and substantially the same matters proposed to be acted on at the special meeting (in each case as determined in good faith by the Board of Directors) and (ii) such Special Meeting Requests have been dated and delivered to the Secretarytherein unless, within 60 days of the earliest dated Special Meeting Request identifying substantiallyConsent delivered in the same purposemanner required by Section G of this Article XI, Consents signed by the stockholders holding a sufficient number of shares to authorize or purposes. A Requesting Stockholder may revoke a Special Meeting Request at any time by written revocationtake such action are so delivered to the Corporation.
(f)The business permittedaction to be conducted at a special meetingwhich the Consents relate is the removal or replacement of stockholders shall be limited to matters properly brought before the meeting byone or at the directionmore members of the Board of Directors. AnyDirectors, the Secretary of the Corporation or Other Officer, as the case may be, shall promptly designate two persons, who shall not be members of the Board of Directors, to serve as inspectors (“Inspectors”) with respect to such Consents and such Inspectors shall discharge the functions of the Secretary of the Corporation or Other Officer, as the case may be, under this Article XI. If after such investigation the Secretary of the Corporation, Other Officer, or the Inspectors, as the case may be, shall determine that the action has been duly authorized or taken by the Consents, that fact shall be certified on the records of the Corporation and the Consents shall be filed in such records. In conducting the investigation required by this Section G, the Secretary of the Corporation, Other Officer, or permitted tothe Inspectors, as the case may be, may retain special legal counsel and any other necessary or appropriate professional advisors as such person or persons may deem necessary or appropriate, at the expense of the Corporation, and shall be fully protected in relying in good faith upon the opinion of such counsel or advisors.
SECTION 2.04. Quorum. The holders of a majority of theat which all shares of stock entitled to vote on a matter thereat,thereon were present and voted, in person or represented by proxy, shall constitute a quorum at all meetingsaccordance with law of the stockholders for the transactionState of business except as otherwise provided by law, the certificateDelaware and this
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SECTION 2.05. Organization. Meetings of stockholders shall be presided over by the Chairman, if any, or in his absence (or election not to preside) by the Vice Chairman, if any, or in his absence (or election not to preside) by the President, or in his absence (or election not to preside) by a Vice President, or in the absence of the foregoing persons by a chairman designated byimply that the Board of Directors or inany stockholder shall not be entitled to contest the absencevalidity of any Consent or related revocations, whether before or after such designationcertification by a chairman chosen at the meeting. The Secretary shall act as secretary of the meeting, but in his absence (or election notCorporation, Other Officer, or the Inspectors, as the case may be, or to so act) the chairman of the meeting may appointtake any person to act as secretary of the meeting.
SECTION 2.06. Conduct of Meetings. The Board of Directors may adopt such rules and regulations for the conduct of the meeting of stockholders as it shall deem appropriate. Except to the extent inconsistent with such rules and regulations as adopted by the Board of Directors, the chairman of any meeting of stockholders shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairman, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board of Directors or prescribed by the chairman of the meeting, may include,other action (including, without limitation, the following: (i) the establishmentcommencement, prosecution, or defense of an agenda or order of business for the meeting; (ii) rules and procedures for maintaining order at the meetingany litigation with respect thereto, and the safetyseeking of those present; (iii) limitations on attendance at or participationinjunctive relief in such litigation).
SECTION 2.07. Advance Notification of Nomination of Directors and Other Business to be Transacted at Stockholder Meetings. To be properly brought before the annual or any special meeting of stockholders, nominations of persons for election to the Board of Directors and any other business must be (i) specified in the notice of the meeting (or any supplement or amendment thereto) givenwritten consent by or at the direction of the Board of Directors or any committee appointed by the Board of Directors, (ii) otherwise properly brought before the meeting by or at the direction of the Board of Directors or any committee appointed by the Board of Directors, or (iii) properly brought before the meeting by a stockholder who is a stockholder of record of the Corporation on the date the notice provided for in this Section 2.07 is delivered to, or mailed and received by, the Secretary of the Corporation, who is entitled to vote at the meeting and who complies with the notice procedures and other requirements set forth in this Section 2.07. In addition to any other applicable requirements, for business to be properly brought before any meeting of stockholders by a stockholder, (i) the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation, (ii) in the case of the annual meeting, such business, other than a nomination, must constitute a proper matter for stockholder action, and (iii) in the case of any special meeting, such business shall be limited to the nomination of a person or persons, as the case may be, for election to such position(s) as are specified in the Corporation’s notice of the meeting in the event that the Corporation calls a special meeting of stockholders for the purpose of electing one or more persons to the Board of Directors. To be timely, a stockholder’s notice must be delivered to, or mailed and received by, the Secretary at the principal executive offices of the Corporation (i) in the case of the annual meeting, not less than 90 days nor more than 120 days prior to the first anniversary date of the annual meeting for the preceding year; provided, however, that in the event that the annual meeting is not scheduled to be held within a period that commences within 30 days before such anniversary date and ends 30 days after such anniversary date (an annual meeting date outside such period being referred to herein as an “Other Meeting Date”), for notice by the stockholder to be timely, it must be so delivered, or mailed and received, by the later of the close of business on (i) the day 90 days
prior to such Other Meeting Date or (ii) the tenth day following the day on which such Other Meeting Date is publicly announced or disclosed and (ii) in the case of any special meeting, not later than the close of business on the tenth day following the day on which the date of the special meeting and the nominees proposed by the Board of Directors to be elected at such meeting are publicly announced or disclosed.
Such stockholder’s notice to the Secretary shall set forth: (i) whether the stockholder is providing the notice at the request of a beneficial holder of stock, whether the stockholder, any such beneficial holder or any nominee has any agreement, arrangement or understanding with, or has received any financial assistance, funding or other consideration from, any other person with respect to the investment by the stockholder or such beneficial holder in the Corporation or the matter to which such stockholder’s notice relates, and the details thereof, including the name of such other person (the stockholder, any beneficial holder on whose behalf the notice is being given, any nominees listed in the notice and any persons with whom such agreement, arrangement or understanding exists or from whom such assistance has been obtained are hereinafter collectively referred to as “Interested Persons”), (ii) the name and address of all Interested Persons, (iii) a complete listing of the record and beneficial ownership positions (including number or amount) of all equity securities and debt instruments, whether held in the form of loans or capital market instruments, of the Corporation or any of its subsidiaries held by all Interested Persons, (iv) whether and the extent to which any hedging, derivative or other transaction is in place or has been entered into within the prior six months preceding the date of delivery or receipt of such stockholder’s notice by or for the benefit of any Interested Person with respect to the Corporation or its subsidiaries or any of their respective securities, debt instruments or credit ratings, the effect or intent of which transaction is to give rise to gain or loss as a result of changes in the trading price of such securities or debt instruments or changes in the credit ratings for the Corporation, its subsidiaries or any of their respective securities or debt instruments (or, more generally, changes in the perceived creditworthiness of the Corporation or its subsidiaries), or to increase or decrease the voting power of such Interested Person, and, if so, a summary of the material terms thereof, (v) a representation that the stockholder is a holder of record of stock of the Corporation that would be entitled to vote at the meeting and intends to appear in person or by proxy at the meeting to propose the matter set forth in such stockholder’s notice. The stockholder’s notice shall be updated not later than ten days after the record date for the determination of stockholders entitled to vote at the meeting to provide any material changes in the foregoing information as of the record date.
Any stockholder’s notice relating to the nomination of directors must also contain (i) the information regarding each nominee required by paragraphs (a), (e) and (f) of Item 401 ofRegulation S-K adopted by the Securities and Exchange Commission (or the corresponding provisions of any successor regulation), (ii) each nominee’s signed consent to serve as a director of the Corporation if elected, and (iii) whether each nominee is eligible for consideration as an independent director under the relevant standards contemplated by Item 407(a) ofRegulation S-K (or the corresponding provisions of any successor regulation). The Corporation may also require any proposed nominee to furnish such other information, including completion of the Corporation’s directors questionnaire, as it may reasonably require to determine the eligibility of such proposed nominee to serve as a director of the Corporation, or whether such proposed nominee would be considered “independent” as a director or as a member of the audit or any other committee of the Board of Directors under the various rules and standards applicable to the Corporation. Any stockholder’s notice with respect to a matter other than the nomination of directors must also contain (i) the text of the proposal to be presented, including the text of any resolutions to be proposed for consideration by stockholders and (ii) a brief written statement of the reasons why such stockholder favors the proposal.
In the case of a nomination by a stockholders of a person or persons for election to the Board of Directors at the annual or any special meeting, only persons who are nominated in accordance with the procedures set forth in this Section 2.07 shall be eligible for election as directors of the Corporation. In the case of any other business proposed by a stockholder for transaction at the annual meeting of stockholders, no such business shall be conducted at the annual meeting of stockholders unless it is properly brought before the meeting in accordance with the procedures set forth in this Section 2.07; provided, however, that nothing in this Section 2.07 shall be deemed to preclude discussion by any stockholder of any business properly brought before the meeting in
accordance with the procedures set forth in this Section 2.07. The officer of the Corporation or other person presiding at the meeting shall, if the facts warrant, determine that a nomination was not properly made, or that business was not properly brought before the meeting, in each case in accordance with the provisions of this Section 2.07 and, if he should so determine, he shall so declare to the meeting and the defective nomination shall be disregarded and any such business not properly brought before the meeting shall not be transacted. Notwithstanding the foregoing provisions of this Section 2.07, if the stockholder or a qualified representative of the stockholder does not appear at the annual or special meeting of stockholders of the Corporation to present any such nomination, or make any such proposal, such nomination or proposal shall be disregarded, notwithstanding that proxies in respect of such vote may have been received by the Corporation. In no event shall the postponement or adjournment of an annual meeting already publicly noticed, or any announcement of such postponement or adjournment, commence a new period (or extend any time period) for the giving of notice as provided in this Section 2.07.
For purposes of this Section 2.07, (i) “beneficially owned” has the meaning provided inRules 13d-3 and13d-5 under the Securities Exchange Act of 1934, and (ii) a matter shall be deemed to have been “publicly announced or disclosed” if such matter is disclosed in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission.
This Section 2.07 shall not apply to (i) stockholder proposals made pursuant to Rule14a-8 under the Exchange Act or (ii) the election of directors selected by or pursuant to the provisions of the certificate of incorporation relating to the rights of the holders of any class or series of stock of the Corporation having a preference over the Common Stock as to dividends or upon liquidation to elect directors under specified circumstances.
SECTION 2.08. Compliance with Securities and Exchange Act of 1934. Notwithstanding any other provision of theseBy-laws, the Corporation shall be under no obligation to include any stockholder proposal in its proxy statement materials or otherwise present any such proposal to stockholders at a special or annual meeting of stockholders if the Board of Directors reasonably believes that the proponents thereof have not complied with Sections 13 and 14 of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder, and the Corporation shall not be required to include in its proxy statement material to stockholders any stockholder proposal not required to be included in its proxy material to stockholders in accordance with such Act, rules or regulations.
ARTICLE III
Directors
SECTION 3.01. Number of Directors. The number of directors which shall constitute the entire Board of Directors shall be as set by the Board of Directors from time to time. No reduction in the number of directors constituting the entire Board of Directors shall have the effect of removing any director before that director’s term of office expires.
SECTION 3.02. Term of Office. Subject to the provisions of the certificate of incorporation, each director, including a director elected to fill a vacancy, shall hold office until such director’s successor is elected and qualified or the earlier resignation or removal of such director.
SECTION 3.03. Meetings. The Board of Directors of the Corporation may hold meetings, both regular and special, either within or without the State of Delaware. Regular meetings of the Board of Directors may be held without notice at such time and at such place as may from time to time be determined by the Board of Directors. Special meetings of the Board of Directors may be called by the Chairman, the Vice Chairman, the Chief Executive Officer, the President or the Secretary or by resolution of the Board of Directors. Unless waived, notice of the time and place of special meetings shall be delivered to each director either (i) personally (either orally or in writing),
(ii) by telephone, (iii) by telex, telecopy, facsimile or other electronic transmission (including email), or (iv) by first-class mail, postage prepaid, addressed to a director at that director’s address as it is shown on the records of the Corporation. If the notice is mailed, it shall be deposited in the United States mail at least four days before the time of the holding of the meeting (ten days in the case of a director whose address as shown on the records of the Corporation is outside of the United States of America). If the notice to a director is sent in any other manner, it shall be sent at least 24 hours before the time of the holding of the meeting.
SECTION 3.04. Quorum. At all meetings of the Board of Directors, a majority of the entire Board of Directors shall be necessary and sufficient to constitute a quorum for the transaction of business. In case, at any meeting of the Board of Directors, a quorum shall not be present, the members of the Board of Directors present may adjourn the meeting from time to time until a quorum shall be present.
SECTION 3.05. Organization. Meetings of(b) the Board of Directors shall be presided overentitled to solicit stockholder action by the Chairman, if any, or in his absence by the Vice Chairman, if any, or in the absence of the foregoing persons by a chairman chosen at the meeting. The Secretary shall act as secretary of the meeting, but in his absence (or election not to so act) the chairman of the meeting may appoint any person to act as secretary of the meeting.
SECTION 3.06. Meetings by Conference Telephone or Similar Device. Members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a meeting of the Board of Directors, or any committee, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.
SECTION 3.07. Board Action by Written Consent Without a Meeting. Any action required or permitted to be taken at any meeting of the Board of Directors, or of any committee thereof, may be taken without a meeting if all members of the Board of Directors or such committee, as the case may be, consent thereto in writing and the writing or writings are filed with the minutes of proceedings of the Board of Directors or such committee. Written consents representing actions taken by the Board of Directors or any committee thereof may be executed by telex, telecopy, facsimile or other electronic transmission (including attachments sent by email), and such electronic transmission shall be valid and binding to the same extent as if it were an original.
SECTION 3.08. Election of Directors. Except as provided in the Corporation’s certificate of incorporation, each director shall be elected by the vote of the majority of the votes cast with respect to the director at any meeting for the election of directors at which a quorum is present; provided, however, that the directors shall be elected by a plurality of the votes cast at any meeting at which a quorum is present for which (i) the Secretary of the Corporation receives a notice pursuant to theseBy-Laws that a stockholder intends to nominate a director or directors and (ii) such proposed nomination has not been withdrawn by such stockholder on or prior to the tenth day preceding the date on which the Company first mails its notice of meeting for such meeting to the stockholders. For purposes of this Section 3.08, a majority of the votes cast means that the number of votes cast “for” a director must exceed the number of votes cast “against” that director.
SECTION 3.09. Committees. The Board of Directors may designate one or more committees, each committee to consist of one or more of the directors of the Corporation. Unless the Board of Directors otherwise provides, each committee designated by the Board of Directors may adopt, amend and repeal rules for the conduct of its business. In the absence of a provision by the Board of Directors or a provision in the rules of such committee to the contrary, a majority of the entire authorized number of members of such committee shall constitute a quorum for the transaction of business, the vote of a majority of the members present at a meeting at the time of such vote if a quorum is then present shall be the act of such committee, and in other respects each committee shall conduct its business in the same manner as the Board of Directors conducts its business pursuant to theseBy-laws.
SECTION 3.10. Stockholder Nominations Included in the Corporation’s Proxy Materials.
(a) Inclusion of Stockholder Nominees in Proxy Statement. Subject to the provisions of this Section 3.10, if expressly requested in the relevant Nomination Notice (as defined below), the Corporation shall include in its proxy statement for any annual meeting of stockholders:
(i) the names of any person or persons nominated for election (each, a “Stockholder Nominee”), which shall also be included on the Corporation’s form of proxy and ballot, by any Eligible Holder (as defined below) or group of up to 20 Eligible Holders that has (individually and collectively, in the case of a group) satisfied, as determined by the Board of Directors, all applicable conditions and complied with all applicable procedures set forth in this Section 3.10 (such Eligible Holder or group of Eligible Holders being a “Nominating Stockholder”);
(ii) disclosure about each Stockholder Nominee and the Nominating Stockholder required under the rules of the Securities and Exchange Commission or other applicable law to be included in the proxy statement;
(iii) any statement included by the Nominating Stockholder in the Nomination Notice for inclusion in the proxy statement in support of each Stockholder Nominee’s election to the Board of Directors (subject, without limitation, to Section 3.10(e)(ii)), if such statement does not exceed 500 words and fully complies with Section 14 of the Securities Exchange Act of 1934 (the “Exchange Act”) and the rules and regulations thereunder, including Rule14a-9 (the “Supporting Statement”); and
(iv) any other information that the Corporation or the Board of Directors determines, in their discretion, to include in the proxy statement relating to the nomination of each Stockholder Nominee, including, without limitation, any statement in opposition to the nomination, any of the information provided pursuant to this Section 3.10 and any solicitation materials or related information with respect to a Stockholder Nominee.
For purposes of this Section 3.10, any determination to be made by the Board of Directors may be made by the Board of Directors, a committee of the Board of Directors or any officer of the Corporation designated by the Board of Directors or a committee of the Board of Directors, and any such determination shall be final and binding on the Corporation, any Eligible Holder, any Nominating Stockholder, any Stockholder Nominee and any other person so long as made in good faith (without any further requirements). The chairman of any annual meeting of stockholders, in addition to making any other determinations that may be appropriate to the conduct of the meeting, shall have the power and duty to determine whether a Stockholder Nominee has been nominated in accordance with applicable law.
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UNITED RENTALS, INC. 100 FIRST STAMFORD PLACE - STE 700 STAMFORD, CT 06902 SCAN TO VIEW MATERIALS & VOTE VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com or scan the requirementsQR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of this Section 3.10 and, if not so nominated, shall direct and declare atinformation up until 11:59 p.m. Eastern Time the day before the meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting - Go to www.virtualshareholdermeeting.com/URI2023 You may attend the meeting via the Internet and vote during the meeting. Have the information that such Stockholder Nominee shall not be considered.
(b) Maximum Number of Stockholder Nominees.
(i) The Corporation shall not be required to includeis printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time the day before the meeting date. Have your proxy statement for an annual meetingcard in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. D96626-P84136 For Against Abstain For Against Abstain For Against Abstain ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! UNITED RENTALS, INC. 100 FIRST STAMFORD PLACE - STE 700 STAMFORD, CT 06902 1b. Marc A. Bruno 1a. José B. Alvarez 1f. Kim Harris Jones 1c. Larry D. De Shon 1e. Bobby J. Griffin 1i. Francisco J. Lopez-Balboa 1g. Terri L. Kelly 1h. Michael J. Kneeland 3. Advisory Approval of stockholders moreExecutive Compensation 1j. Gracia C. Martore 1k. Shiv Singh 2. Ratification of Appointment of Public Accounting Firm 5. Company Proposal to Improve Shareholder Written Consent (Amend Certificate of Incorporation to Reduce Threshold to 15%) 6. Stockholder Nominees than that numberProposal to Improve Shareholder Written Consent 4. Advisory Vote on Frequency of directors constituting the greater of (i) two or (ii) 20% of the total number of directors of the Corporation on the last day on which a Nomination Notice may be submitted pursuant to this Section 3.10 (rounded down to the nearest whole number) (the “Maximum Number”). The Maximum Number for a particular annual meeting shall be reduced by: (1) Stockholder Nominees who the BoardExecutive Compensation Vote THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE UNDERSIGNED. IF NO DIRECTION IS GIVEN WITH RESPECT TO A NOMINEE OR PROPOSAL, THIS PROXY WILL BE VOTED "FOR" ALL NOMINEES IN PROPOSAL 1, "FOR" PROPOSAL 2, "FOR" PROPOSAL 3, FOR "EVERY YEAR" ON PROPOSAL 4, "FOR" PROPOSAL 5, AND "AGAINST" PROPOSAL 6. 1. Election of Directors itself decides to nominate for election at such annual meeting; (2) Stockholder Nominees who cease to satisfy,UNITED RENTALS, INC. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH DIRECTOR NOMINEE, "FOR" PROPOSAL 2, "FOR" PROPOSAL 3, FOR "EVERY YEAR" ON PROPOSAL 4, "FOR" PROPOSAL 5, AND "AGAINST" PROPOSAL 6. Note: Please sign exactly as your name or Stockholder Nominees of Nominating Stockholders that cease to satisfy, the eligibility requirements innames appear on this Section 3.10,Proxy. When shares are held jointly, each holder should sign. When signing as determined by the Board of Directors; (3) Stockholder Nominees whose nomination is withdrawn by the Nominating Stockholderexecutor, administrator, attorney, trustee or who become unwilling to serve on the Board of Directors; and (4) the number of incumbent directors who had been Stockholder Nominees with respect to any of the preceding three annual meetings of stockholders and whose
reelection at the upcoming annual meeting is being recommended by the Board of Directors. In the event that one or more vacancies for any reason occurs on the Board of Directors after the deadline for submitting a Nomination Noticeguardian, please give full title as set forth in Section 3.10(d) below but before the date of the annual meeting, and the Board of Directors resolves to reduce the size of the board in connection therewith, the Maximum Number shall be calculated based on the number of directors in office as so reduced.
(ii)such. If the number of Stockholder Nominees pursuant to this Section 3.10 for any annual meeting of stockholders exceeds the Maximum Number then, promptly upon notice from the Corporation, each Nominating Stockholder will select one Stockholder Nominee for inclusion in the proxy statement until the Maximum Number is reached, going in order of the amount (largest to smallest) of the ownership position as disclosed in each Nominating Stockholder’s Nomination Notice, with the process repeated if the Maximum Number is not reached after each Nominating Stockholder has selected one Stockholder Nominee. If, after the deadline for submitting a Nomination Notice as set forth in Section 3.10(d), a Nominating Stockholder or a Stockholder Nominee ceases to satisfy the eligibility requirements in this Section 3.10, as determined by the Board of Directors, a Nominating Stockholder withdraws its nomination or a Stockholder Nominee becomes unwilling to serve on the Board of Directors, whether before or after the mailing or other distribution of the definitive proxy statement, then the nomination shall be disregarded, and the Corporation: (1) shall not be required to include in its proxy statement or on any ballot or form of proxy the disregarded Stockholder Nominee or any successor or replacement Stockholder Nominee proposed by the Nominating Stockholder or by any other Nominating Stockholder and (2) may otherwise communicate to its stockholders, including without limitation by amending or supplementing its proxy statement or ballot or form of proxy, that a Stockholder Nominee will not be included as a Stockholder Nominee in the proxy statement or on any ballot or form of proxy and will not be voted on at the annual meeting.
(c) Eligibility of Nominating Stockholder.
(i) An “Eligible Holder”signer is a person who has either (1) beencorporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a record holderpartnership, please sign in partnership name by authorized person. 1d. Matthew J. Flannery Every 3 Years Every Year Every 2 Years Abstain ! ! ! ! ! ! ! ! ! ! ! ! ! Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
ANNUAL MEETING OF STOCKHOLDERS OF United Rentals May 4, 2023 Important Notice Regarding the Availability of the shares of common stock used to satisfy the eligibility requirements in this Section 3.10(c) continuouslyProxy Materials for the three-year period specified in Subsection (ii) below or (2) provides to the SecretaryAnnual Meeting of the Corporation, within the time period referred to in Section 3.10(d), evidence of continuous ownership of such shares for the three-year period specified in subsection (ii) below from one or more securities intermediaries in a form that the Board of Directors determines would be deemed acceptable for purposes of a shareholder proposal under Rule14a-8(b)(2) under the Exchange Act (or any successor rule).
(ii) An Eligible Holder or group of up to 20 Eligible Holders may submit a nomination in accordance with this Section 3.10 only if the person or group (in the aggregate) has continuously owned at least the Minimum Number (as defined below) of shares of the Corporation’s common stock throughout the three-year period preceding and including the date of submission of the Nomination Notice, and continues to own at least the Minimum Number through the date of the annual meeting. Two or more funds that are (x) under common management and investment control, (y) under common management and funded primarily by a single employer or (z) a “group of investment companies,” as such term is defined in Section 12(d)(1)(G)(ii) of the Investment Company Act of 1940, as amended, shall be treated as one Eligible Holder if such Eligible Holder shall provide together with the Nomination Notice documentation reasonably satisfactory to the Corporation that demonstrates that the funds meet the criteria set forth in (x), (y) or (z) hereof. For the avoidance of doubt, in the event of a nomination by a group of Eligible Holders, any and all requirements and obligations for an individual Eligible Holder that are set forth in this Section 3.10, including the minimum holding period, shall apply to each member of such group; provided, however, that the Minimum Number shall apply to the ownership of the group in the aggregate. Should any stockholder cease to satisfy the eligibility requirements in this Section 3.10, as determined by the Board of Directors, or withdraw from a group of Eligible Holders at any time prior to the annual meeting of stockholders, the group of Eligible Stockholders shall only be deemed to own the shares held by the remaining members of the group.
(iii) The “Minimum Number” of shares of the Corporation’s common stock means 3% of the number of outstanding shares of common stock as of the most recent date for which such amount is given in any filing by the Corporation with the Securities and Exchange Commission prior to the submission of the Nomination Notice.
(iv) For purposes ofSection 2.03 and this Section 3.10,a Requesting Stockholder or an Eligible Holder, as applicable, “owns” only those outstanding shares of the Corporation as to which theRequesting Stockholder or Eligible Holder possesses both:
provided that the number of shares calculated in accordance with clauses (A) and (B) shall not include any shares: (1) purchased or sold by suchRequesting Stockholder orEligible Holder or any of its affiliates in any transaction that has not been settled or closed, (2) sold short by suchRequesting Stockholder orEligible Holder, (3) borrowed by suchRequesting Stockholder orEligible Holder or any of its affiliates for any purpose or purchased by such Requesting Stockholder or Eligible Holder or any of its affiliates pursuant to an agreement to resell or subject to any other obligation to resell to another person, or (4) subject to any option, warrant, forward contract, swap, contract of sale, other derivative or similar agreement entered into by such Requesting Stockholder or Eligible Holder or any of its affiliates, whether any such instrument or agreement is to be settled with shares or with cash based on the notional amount or value of outstanding shares of the Corporation, in any such case which instrument or agreement has, or is intended to have, the purpose or effect of: (x) reducing in any manner, to any extent or at any time in the future, such Requesting Stockholder’s or Eligible Holder’s or any of its affiliates’ full right to vote or direct the voting of any such shares, and/or (y) hedging, offsetting, or altering to any degree, gain or loss arising from the full economic ownership of such shares by such Requesting Stockholder or Eligible Holder or any of its affiliates.
An Eligible Holder “owns” shares held in the name of a Stockholder Nominee or other intermediary so long as the Eligible Holder retains the right to instruct how the shares are voted with respect to the election of directors and possesses the full economic interest in the shares. An Eligible Holder’s ownership of shares shall be deemed to continue during any period in which the Eligible Holder has delegated any voting power by means of a proxy, power of attorney, or other similar instrument or arrangement that is revocable at any time by the Eligible Holder. An Eligible Holder’s ownership of shares shall be deemed to continue during any period in which the Eligible Holder has loaned such shares provided that the Eligible Holder has the power to recall such loaned shares on five business days’ notice, has recalled such loaned shares as of the date of the Nomination Notice and continues to hold such shares through the date of the annual meeting. The terms “owned,” “owning” and other variations of the word “own” shall have correlative meanings. Whether outstanding shares of the Corporation are “owned” for these purposes shall be determined by the Board.
(v) No Eligible Holder shall be permitted to be in more than one group constituting a Nominating Stockholder, and if any Eligible Holder appears as a member of more than one group, it shall be deemed to be a member of the group that has the largest ownership position as reflected in the Nomination Notice.
(d) Nomination Notice. To nominate a Stockholder Nominee, the Nominating Stockholder must, no earlier than 150 calendar days and no later than 120 calendar days before the anniversary of the date that the Corporation mailed its proxy statement for the prior year’s annual meeting of stockholders, submit to the Secretary of the Corporation at the principal executive office of the Corporation all of the following information and documents (collectively, the “Nomination Notice”); provided, however, that if (and only if) the annual meeting is not scheduled to be held within a period that commences 30 days before such anniversary dateon Thursday, May 4, 2023: The Notice and
ends 30 days after such anniversary date (an annual meeting date outside such period being referred to herein as an “Other Meeting Date”), the Nomination Notice shall be given in the manner provided herein by the later of the close of business on the date that is 180 days prior to such Other Meeting Date or the tenth day following the date such Other Meeting Date is first publicly announced or disclosed:
(i) A Schedule 14N (or any successor form) relating to each Stockholder Nominee, completed and filed with the Securities and Exchange Commission by the Nominating Stockholder as applicable, in accordance with rules and regulations of the Securities and Exchange Commission;
(ii) A written notice, in a form deemed satisfactory by the Board of Directors, of the nomination of each Stockholder Nominee that includes the following additional information, agreements, representations and warranties by the Nominating Stockholder (including each group member):
1) does not have any direct or indirect relationship with the Corporation that would cause the Stockholder Nominee to be considered not independent pursuant to the Corporation’s Independence Standards as most recently published on its website and otherwise qualifies as independent under the rules of the primary stock exchange on which the Corporation’s shares of common stock are traded;
2) meets the Audit Committee and Compensation Committee independence requirements under each of (x) the rules of the primary stock exchange on which the Corporation’s shares of common stock are traded and (y) the Corporation’s Corporate Governance Guidelines as most recently published on its website;
3) is a“non-employee director” Proxy Statement for the purposes2023 Annual Meeting of Rule16b-3 under the Exchange Act (or any successor rule);
4) is an “outside director” for the purposes of Section 162(m) of the Internal Revenue Code (or any successor provision);
5) meets the director qualifications set forth in the Corporation’s Corporate Governance Guidelines as most recently published on its website; and
6) is not and has not been subject to any event specified in Rule 506(d)(1) of Regulation D (or any successor rule) under the Securities Act of 1933 or Item 401(f) of RegulationS-K (or any successor rule) under the Exchange Act, without reference to whether the event is material to an evaluation of the ability or integrity of such Stockholder Nominee;
(iii) An executed agreement, in a form deemed satisfactory by the Board of Directors, pursuant to which the Nominating Stockholder (including each group member) agrees:
(iv) An executed agreement, in a form deemed satisfactory by the Board of Directors, by each Stockholder Nominee:
The information and documents required by this Section 3.10(d) to be provided by the Nominating Stockholder shall be: (i) provided with respect to and executed by each group member, in the case of information applicable to group members; and (ii) provided with respect to the persons specified in Instruction 1 to Items 6(c) and (d) of Schedule 14N (or any successor item) in the case of a Nominating Stockholder or group member that is an entity. The Nomination Notice shall be deemed submitted on the date on which all the information and documents referred to in this Section 3.10(d) (other than such information and documents contemplated to be provided after the date the Nomination Notice is provided) have been delivered to or, if sent by mail, received by the Secretary of the Corporation. For purposes of this Section 3.10, a matter shall be deemed to have been “publicly announced or disclosed” if such matter is disclosed in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission.
(e) Exceptions.
(i) Notwithstanding anything to the contrary contained in this Section 3.10, the Corporation may omit from its proxy statement any Stockholder Nominee and any information concerning such Stockholder Nominee (including a Nominating Stockholder’s Supporting Statement) and no vote on such Stockholder Nominee will occur (notwithstanding that proxies in respect of such vote may have been received by the Corporation),Stockholders and the Nominating Stockholder may not, after the last day on which a Nomination Notice would be timely, cure in any way any defect preventing the nomination of such Stockholder Nominee, if:
(ii) Notwithstanding anythingCompany's 2022 Annual Report to the contrary contained in this Section 3.10, the Corporation may omit from its proxy statement, or may supplement or correct, any information, including all or any portion of the Supporting Statement or any other statement in support of a Stockholder Nominee included in the Nomination Notice, if the Board of Directors determines that:
The Corporation may solicit against, and include in the proxy statement its own statement relating to, any Stockholder Nominee.
ARTICLE IV
Officers
SECTION 4.01. General. The officers of the Corporation shall be chosen by the Board of Directors and shall, unless otherwise determined by the Board of Directors, be a Chairman, a Vice Chairman, a Chief Executive Officer, a President, a Chief Financial Officer, and a Secretary. The Board of Directors, in its discretion, may also choose one or more Vice Presidents, Assistant Secretaries, and other officers. Each such officer shall hold office until his successor is elected and qualified or his earlier resignation or removal. The Board of Directors may remove any officer with or without causeStockholders are available electronically at any time, but such removal shall be without prejudice to the contractual rights of such officer, if any, with the Corporation, but the election of an officer shall not of itself create contractual rights.
SECTION 4.02. Powers and Duties of Officers. The chief executive officer of the Corporation shall have such powers in the management of the Corporation as may be prescribed in a resolution by the Board of Directors and, to the extent not so provided, as generally pertain to such office. The chief executive officer shall see that all orders and resolutions of the Board of Directors are carried into effect.
The other officers of the Corporation shall have such powers and duties in the management of the Corporation as may be prescribed in a resolution by the Board of Directors or delegated to them by the chief executive officer and, to the extent not so provided or delegated, as generally pertain to their respective offices, subject to the control of the Board of Directors and the chief executive officer. Without limiting the foregoing, the Secretary shall have the duty to record the proceedings of the meetings of the stockholders, the Board of Directors and any committee thereof in a book to be kept for that purpose.
ARTICLE V
Miscellaneous
SECTION 5.01. Waivers of Notice. Whenever any notice is required by law, the certificate of incorporation or theseBy-laws, to be given to any director, member of a committee or stockholder, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, and, in the case of a waiver of notice of a meeting, whether or not the business to be transacted at or the purposes of such meeting is set forth in such waiver, shall be deemed equivalent thereto. The attendance of any person at any meeting, in person, or, in the case of the meeting of stockholders, by proxy, shall constitute a waiver of notice of such meeting by such person, except where such person attends such meeting for the express purpose of objecting at the beginning of such meeting to the transaction of any business on the grounds that such meeting is not duly called or convened.
SECTION 5.02. Fiscal Year. The fiscal year of the Corporation shall be fixed from time to time by the Board of Directors.
SECTION 5.03. Seal. The corporate seal shall have inscribed thereon the name of the Corporation and shall be in such form as may be approved from time to time by the Board of Directors.
SECTION 5.04. Entire Board. As used in theseBy-laws, “entire Board of Directors” means the total number of directors which the Corporation would have if there were no vacancies in the Board of Directors.
SECTION 5.05. Forum for Adjudication of Disputes. Unless the Corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer, employee or agent of the Corporation to the Corporation or the Corporation’s stockholders, (iii) any action asserting a claim relating to the Corporation arising pursuant to any provision of the Delaware General Corporation Law or the Corporation’s certificate of incorporation or theseBy-laws, or (iv) any action asserting a claim relating to the Corporation governed by the internal affairs doctrine.
☐ ⬛
www.proxyvote.com. D96627-P84136 UNITED RENTALS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
As an alternative to completing this form, you may enter your vote instruction by telephone at1-800-PROXIES 1-800-690-6903, or, before the meeting, via the Internet at WWW.VOTEPROXY.COM and followWWW.PROXYVOTE.COM, or, during the simple instructions.meeting, via WWW.VIRTUALSHAREHOLDERMEETING.COM/URI2023. Use the Company Number and Account Number shown on your proxy card.
The undersigned hereby appoints MichaelMatthew J. Kneeland,Flannery, William B. Plummer,E. Grace, Joli L. Gross or any of them, with full power of substitution, as proxies to represent and to vote at the annual meetingAnnual Meeting of stockholdersStockholders of United Rentals, Inc. (the “Company”) to be held via live webcast at www.virtualshareholdermeeting.com/URI2023 on May 4, 20172023 at 9:00 a.m., Eastern time, at the Boston Marriott Cambridge, 50 Broadway, Cambridge, MassachusettsTime, and at any adjournment or postponement thereof, hereby revoking any proxies heretofore given, all shares of common stock of the Company held or owned by the undersigned as directed on the reverse side, and in their discretion upon such other matters as may come before the meeting.
(Continued (Continued and to be signed and dated on the reverse side)
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ANNUAL MEETING OF STOCKHOLDERS OF
100 First Stamford Place, Suite 700
Stamford, Connecticut 06902
May 4, 2017
Important Notice Regarding the Availability of Proxy Materials
for the Annual Meeting of Stockholders to be Held on Thursday, May 4, 2017:
The Notice of and Proxy Statement for the 2017 Annual Meeting of Stockholders
and the Company’s 2016 Annual Report to Stockholders are available electronically at
https://materials.proxyvote.com/911363.
GO GREEN
e-Consent makes it easy to go paperless. Withe-Consent, you can quickly access your proxy material, statements and other eligible documents online, while reducing costs, clutter and paper waste. Enroll today via www.amstock.com to enjoy online access.
Please sign, date and mail
your proxy card in the
envelope provided as soon
as possible.
i Please detach along perforated line and mail in the envelope provided. i
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