DEF 14A of Patrick Industries Inc
Filed Apr 1, 2025 · FY20240000076605-25-000113
Aligning Pay to Differentiated Performance
Aligning Pay to Differentiated Performance Our leaders understand and are motivated to meet key metrics that drive growth, profitability and ultimately shareholder value in both the short and long term. Our Compensation Committee recommends compensation decisions to the Board which support this philosophy. The plan design is brought to life through understanding each compensation element and the impact of the individual’s and the team’s performance as outlined below. Each compensation component, relative to peer group and general industry data, supports our philosophy of rewarding differentiated performance by emphasizing each executive’s variable pay elements. •Base Salary, though lower than peer base compensation, is designed in alignment with the philosophy of focusing on performance-dependent variable pay. •The annual Short-Term Cash Compensation Plan provides for enhanced payouts for performance above plan up to a maximum of 200% of target compensation at 115% of plan and incorporates a threshold payout of 50% of target compensation at 75% of plan. •The annual Long-Term Incentive Compensation Plan is designed to drive the executive’s focus on long-term profitability through both organic and inorganic growth over a three-year award performance period. This equity plan is also designed to motivate leadership to perform above plan with a maximum payout of 200% of target compensation at 120% of plan and a threshold payout of 50% of target compensation at 80% of plan.
Aligning Pay to Differentiated Performance
| Compensation Element | Percentile Positioning vs. Peer Proxy and General Industry Data | | Base Salary | 25th - 50th | | Short-Term Incentive | 50th - 75th | | Total Target Cash | 50th - 75th | | Long-Term Incentive | 25th - 50th | | Total Target Compensation | 50th - 75th |
Election Of Directors
Election Of Directors There are nine nominees for election to the Board, seven of which are current members of our Board. Each of the following nominees was elected to his or her present term of office at the Annual Meeting of Shareholders held on May 16, 2024, with the exception of Blake W. Augsburger and Natalie A. Brown, who were approved on February 25, 2025 as nominees for election to the Board at the 2025 Annual Meeting. Each of the nominees at the 2025 Annual Meeting will be elected to hold office until the 2026 Annual Meeting or until their successors are duly elected and qualified. It is intended that the proxies will be voted for the nominees listed below, unless otherwise indicated on the proxy form. It is expected that these nominees will serve, but, if for any unforeseen cause any such nominee should decline or be unable to serve as a director, the proxies will be voted to fill any vacancy so arising in accordance with the discretionary authority of the persons named in the proxies. The Board does not anticipate that any nominee will be unable or unwilling to serve. The Board of Directors recommends shareholders vote FOR the election of the nominees to the Board of Directors.
Election Of Directors
| 2024 Board Composition and Governance Highlights | | | | | Size of Board | 9 | Diverse Board Committee Chairs | ✓ | | Average Age (in years) of Directors | 60 | Independent Directors Meet Without Non- Independent Directors Present | ✓ | | Number of Independent Directors | 7/9 | Board Orientation and Continuing Education | ✓ | | Directors that are Gender or Racially/ Ethnically Diverse | 33% | Board-level Oversight of Environmental, Social & Governance (ESG) Matters | ✓ | | Audit Committee Expertise | 60% | Annual Review of Committee Charters, Code of Ethics & Governance Guidelines | ✓ | | Average Tenure (in years) on Board | 11.9 | Succession Planning | ✓ | | Lead Independent Director | ✓ | Sustainability Reporting Framework: SASB | ✓ | | Annual Election of All Directors | ✓ | | |
Election Of Directors
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for Election
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| | Biography Blake W. Augsburger, age 61, is the founder and has served as Chief Executive Officer of LEA Professional since 2019, a global supplier of audio amplifiers and digital signal processing solutions for the Professional, Commercial, and Residential A/V markets. Prior to that, Mr. Augsburger held leadership positions at Harman International Industries, Inc., including Executive Vice President, President of the Harman Professional Division, and North America's Country Manager from 2006 to 2016, and President of Crown International from 2001 to 2006. Mr. Augsburger has served as a director of Lakeland Financial Corporation from 2011 to present. | | Blake W. Augsburger Age 61 New Director Nominee Committees None Other Public Board Directorships Lakeland Financial Corporation | Qualifications Mr. Augsburger has extensive experience with strategic planning, sales and marketing, manufacturing and new product development, acquisitions, and operations and risk management. |
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| | Biography Natalie A. Brown, age 54, has been the Chief Executive Officer of Mesirow Financial Holdings, Inc. ("Mesirow") since July 2022. Prior to that, Ms. Brown was President of Mesirow from April 2021 to July 2022 and Chief Financial Officer from August 2018 to April 2021. She has served on Mesirow’s Board of Directors since 2019. She also held various leadership positions within finance and accounting at Nuveen Investments from 1999 to 2018. | | | Qualifications Ms. Brown has extensive experience in banking, finance and auditor relations, organizational development, succession planning and talent identification, acquisitions, and strategic planning. | | Natalie A. Brown Age 54 New Director Nominee Committees None | |
for Election
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| | Biography Joseph M. Cerulli, age 65, has been employed by Tontine Associates, LLC, an investment management firm (together with its affiliates, “Tontine”), since January 2007. | | | Qualifications Mr. Cerulli possesses extensive knowledge with respect to business operations, strategic planning, financial and investment matters, including investment banking, capital markets, and mergers and acquisitions strategy. He has been determined by our Board to be an “audit committee financial expert” under the rules and regulations of the Securities and Exchange Commission (the “SEC”). | | Joseph M. Cerulli Age 65 Director since 2008 Committees Corporate Governance and Nominations (Chair) • Audit | |
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| | Biography Todd M. Cleveland, age 57, previously served as Chairman of the Board from January 2023 to May 2024 and Executive Chairman of the Board from January 2020 to December 31, 2022. Prior to that, Mr. Cleveland was Chairman of the Board from May 2018 to December 2019 and our Chief Executive Officer from February 2009 to December 2019. Mr. Cleveland was President of the Company from May 2008 to December 2015 and Chief Operating Officer of the Company from May 2008 to March 2013. Mr. Cleveland has served as a Director of IES Holdings, Inc. (“IES”) from 2017 to the present, and he has been the chairman of IES’ Human Resources and Compensation Committee since February 2019 and a member of IES’s Audit Committee since February 2021. | | Todd M. Cleveland Age 57 Director since 2008 Committees None Other Public Board Directorships IES Holdings, Inc. | | | | Qualifications Mr. Cleveland has over 34 years of RV, marine, manufactured housing, and industrial experience in various operating capacities. He also has extensive knowledge of our Company and the industries to which we sell our products. Mr. Cleveland’s experience includes management development and leadership, acquisitions, strategic planning, finance and capital allocation, and the manufacturing and sales of our products. |
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| | Biography John A. Forbes, age 65, has been a partner with Full Sails LLC, a firm engaged in strategic business consulting, since June 2017. In addition, Mr. Forbes served as the interim Chief Financial Officer of our Company from June 2020 to November 2020. Previously, Mr. Forbes was the President of Utilimaster, a business unit of Shyft Group (formerly known as Spartan Motors USA, Inc.), from July 2010 to June 2017. Prior to that time, he was the Chief Financial Officer of Utilimaster from May 2009 to July 2010, the Chief Financial Officer of Nautic Global Group, LLC from 2007 to 2009 and the Chief Financial Officer of Adorn, LLC from 2003 to 2007. Mr. Forbes has served as a director of Chase Packaging Corporation since March 2019. | | John A. Forbes Age 65 Director since 2011 Lead Independent Director since 2024 Committees Compensation • Corporate Governance and Nominations Other Public Board Directorships Chase Packaging Corporation | | | | Qualifications Mr. Forbes has over 38 years of experience in serving various manufacturing industries, having held senior financial leadership roles. Mr. Forbes also has extensive experience with operations and talent management, acquisitions, strategic planning, risk management and banking relations. |
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| | Biography Michael A. Kitson, age 66, served as a fractional Chief Financial Officer at Ascent CFO Solutions, a provider of outsourced financial and accounting services, from May 2022 to March 2023. Prior to that time, Mr. Kitson served as the Chief Financial Officer of oVertone Haircare, Inc. from July 2018 through January 2022. Previously, Mr. Kitson was a principal with AVL Growth Partners, a firm that provides Chief Financial Officer and other financial advisory services, from March 2017 to July 2018. Prior to that, Mr. Kitson was the Chief Financial Officer of MikaTek, Ltd. from January 2016 to July 2016, the Chief Executive Officer of SharpShooter Imaging from March 2015 to January 2016, the Chief Executive Officer of Nautic Global Group (“Nautic”) from March 2011 to October 2013, and the Chief Financial Officer of Nautic from August 2010 to March 2011. | | Michael A. Kitson Age 66 Director since 2013 Committees Audit (Chair) • Compensation | | | | Qualifications Mr. Kitson has over 38 years of experience in serving various manufacturing industries in senior financial leadership roles. Mr. Kitson also has extensive experience with corporate and operations management, finance and capital allocation, strategic planning and risk management. He has been determined by our Board to be an “audit committee financial expert” under the SEC’s rules and regulations. |
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| | Biography Andy L. Nemeth, age 56, has been the Chairman of the Board since May 2024 and the Company’s Chief Executive Officer since January 2020. Prior to that time, Mr. Nemeth was the President from January 2016 to July 2021, Executive Vice President of Finance and Chief Financial Officer from May 2004 to December 2015, and Secretary-Treasurer from 2002 to 2015. He was also the Vice President of Finance and Chief Financial Officer from 2003 to 2004. | | | Qualifications Mr. Nemeth has over 33 years of RV, marine, manufactured housing, and industrial experience in various financial and managerial capacities. Mr. Nemeth also has particular knowledge of our Company and the industries to which we sell our products and has extensive experience with corporate management, development and leadership, acquisitions, strategic planning, risk management, capital allocation, and banking and finance relations. | | Andy L. Nemeth Age 56 Director since 2006 Committees None | |
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| | Biography Denis G. Suggs, age 59, has been the Chief Executive Officer of LCP Transportation, LLC, a non-emergency medical transportation company, since February 2020. Prior to that, Mr. Suggs was the President and Chief Executive Officer of Strategic Materials Corp. from March 2014 to January 2020 and also served as Chairman from 2017 to 2020. Prior to that time, Mr. Suggs was the Global Executive Vice President of Belden, Inc. from 2009 to 2013 and the President of the Americas Division / Vice President of Belden, Inc. from 2007 to 2009. Mr. Suggs has served as a director of Smith & Wesson Brands, Inc. from May 2021 to present. | | Denis G. Suggs Age 59 Director since 2019 Committees Compensation (Chair) • Corporate Governance and Nominations Other Public Board Directorships Smith & Wesson Brands, Inc. | Qualifications Mr. Suggs has over 26 years of experience in leading complex global businesses, having also held senior financial executive leadership roles with Danaher Corporation and Public Storage Corporation. Mr. Suggs also has extensive experience with corporate and operations management, strategic planning, mergers and acquisitions and risk management. Mr. Suggs served as a director of the Education Corporation of America from 2015 to 2018 and of Strategic Materials, Inc. and the Glass Packaging Institute from 2014 to 2020. |
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| | Biography M. Scott Welch, age 65, has been the President and Chief Executive Officer of Welch Packaging Group, a large independently owned corrugated packaging company, since 1985. Prior to establishing Welch Packaging Group, he worked at Northern Box, Performance Packaging and Elkhart Container. Mr. Welch has served as a director of Lakeland Financial Corporation (“Lakeland”) from 1998 to present and a member of the compensation committee since 2012, and he was Lakeland’s lead independent director from 2012 to 2019. He has also served as a trustee of DePauw University since 2005. | | M. Scott Welch Age 65 Director since 2015 Committees Audit • Corporate Governance and Nominations Other Public Board Directorships Lakeland Financial Corporation | Qualifications Mr. Welch has over 43 years of experience in the packaging industry and has extensive experience in sales, marketing, acquisitions, organizational development, strategic planning, finance and capital allocation. He has been determined by our Board to be an “audit committee financial expert” under the SEC’s rules and regulations. |
Compensation
| Name | Fees Earned Or Paid In Cash (2) | Stock Awards (3) | Other Compensation (4) | Total | | Joseph M. Cerulli | $102,500 | $140,050 | $3,108 | $245,658 | | Todd M. Cleveland (1) | 245,000 | 140,050 | 3,108 | 388,158 | | John A. Forbes | 102,500 | 140,050 | 3,108 | 245,658 | | Michael A. Kitson | 110,000 | 140,050 | 3,108 | 253,158 | | Pamela R. Klyn | 90,000 | 140,050 | 3,108 | 233,158 | | Derrick B. Mayes | 90,000 | 140,050 | 3,108 | 233,158 | | Denis G. Suggs | 105,000 | 140,050 | 3,108 | 248,158 | | M. Scott Welch | 102,500 | 140,050 | 3,108 | 245,658 |
Compensation Committee
Compensation Committee The Board has a Compensation Committee for which Denis G. Suggs serves as Chairman. The Compensation Committee met five times in 2024. The Compensation Committee has a charter, which sets forth the responsibilities of the Compensation Committee, which include: •Reviewing and recommending to the independent members of the Board the overall compensation programs for the officers of the Company; •Oversight authority to attract, develop, promote and retain qualified senior executive management; and •Oversight authority for the stock-based compensation programs. In its oversight of executive officer compensation, the Compensation Committee seeks assistance from Company management and the Company's independent compensation consultant, Willis Towers Watson, as further described below under the heading “Compensation Discussion and Analysis.” Willis Towers Watson’s fees are approved by the Compensation Committee. Willis Towers Watson provides the Compensation Committee with data about the compensation paid by our peer group and industry benchmark groups, updates the Compensation Committee on new developments in areas that fall within the Compensation Committee’s scope and is available to advise the Compensation Committee regarding all of its responsibilities, including best practices, market trends in executive compensation, and pay versus performance disclosures. Our Compensation Committee has assessed the independence of Willis Towers Watson pursuant to SEC and NASDAQ listing rules and determined that their work did not give rise to any conflicts of interest. The Board has determined each of the current members of the Compensation Committee, as of the date of this Proxy Statement, is independent as defined in the NASDAQ listing standards and our Corporate Governance Guidelines. 13
Authorized Amount of Common Stock
Authorized Amount of Common Stock General Background: Our Articles of Incorporation currently authorize 40,000,000 shares of common stock. As of March 21, 2025, there were 33,555,159 shares of common stock issued and outstanding. There are in the aggregate 687,829 shares of common stock reserved for issuance under existing stock options and stock appreciation rights (“SARs”), which are issuable upon the exercise of outstanding options and SARS granted under our existing stock option and SARs plans. In addition, there are an aggregate of 1,314,866 net shares available for future awards under the Patrick Industries, Inc. 2009 Omnibus Incentive Plan (the “Plan”). There are 4,442,146 authorized and unissued shares of common stock that are not reserved for any specific use and are available for future issuance. On February 25, 2025, our Board unanimously adopted a resolution, subject to shareholder approval, to increase the authorized number of shares of common stock from 40,000,000 to 60,000,000. If the shareholders approve this Proposal 4, an increase in our authorized shares of common stock will be effected through the filing of Articles of Amendment to our Articles of Incorporation with the office of the Indiana Secretary of State, amending Article V of our Articles of Incorporation to authorize 60,000,000 shares of common stock and total shares of capital stock of 61,000,000, as soon as practicable following the Annual Meeting, to be effective upon such filing. Upon approval of the proposed amendment to our Articles of Incorporation, Article V would read as follows:
and Analysis
and Analysis We believe our compensation plan, as it relates to the NEOs and other executives, should be aligned with the Company’s short-term and long-term organizational strategic agendas and its operating performance and cash flows, and foster appropriate management ownership in the Company. Our philosophy and objectives are to provide a comprehensive, market-competitive compensation program designed to attract, retain and motivate the best qualified talent from inside and outside the industry and to align the interests of our senior management team with the interests of our shareholders. Messrs. Nemeth, Rodino, Ellis, Roeder, Filer, and Gonzalez comprise our NEOs for fiscal 2024, as such term is used under SEC rules. The Company utilizes a “pay-for-differentiated performance” compensation philosophy that establishes base salaries, generally lower relative to its peer group companies, coupled with performance-based short-term and long-term incentives that are generally high relative to its peer group companies. Our performance management system links compensation to achieving certain objectives based on our short-term and long-term goals. To develop a comprehensive performance and rewards compensation program for our NEOs and other executives (see below "Plan Components" discussion), the Compensation Committee conducts, among other analytical measures, independent benchmarking studies in conjunction with utilizing a third-party compensation consultant.
Non-Equity Incentive Plan Compensation (Short-Term Incentive Plan)
Non-Equity Incentive Plan Compensation (Short-Term Incentive Plan) The 2024 Short-Term Incentive Plan (“STIP”) was designed to reward the CEO and each of the other NEOs for differentiated incremental performance against the net income of the plan year (net of 2024 acquisitions) and achievement of individual performance goals for each NEO. The STIP is designed to be 100% variable, performance dependent, pay-at-risk. Assuming target performance, the net income metric performance accounts for 70% of the performance payout and each NEO’s personal strategic objectives account for 30% of the performance payout, allowing for differentiation of each NEO’s individual contributions to the performance of the Company. STIP compensation may range from 0% to 200% of the established target. If the NEO's individual performance rating was below the threshold performance rating, such NEO would not be eligible for a STIP award regardless of the Company's performance. If the Company’s net income (net of acquisitions) performance was below the established Company performance threshold, no NEO would be eligible for a STIP award regardless of the NEO's individual performance. The STIP threshold, target, stretch and maximum performance levels for both net income (net of 2024 acquisitions) and personal performance and related payouts, are noted below for reference.
Company Performance (70% Of Target Performance Payout)
Company Performance (70% Of Target Performance Payout)
Company Performance (70% Of Target Performance Payout)
| Net Income Performance | Performance To Plan (%) | Payout (%) | | Less Than Threshold | <75 | - | | Threshold | 75 | 50 | | Target (Plan) | 100 | 100 | | Stretch | 110 | 175 | | Maximum | 115 | 200 |
NEO Individual Performance (30% Of Target Performance Payout)
NEO Individual Performance (30% Of Target Performance Payout)
NEO Individual Performance (30% Of Target Performance Payout)
| Personal Performance | Performance Rating (0-5 Scale) | Payout (%) | | Less Than Threshold | <2.5 | - | | Threshold | 2.5 | 50 | | Target (Plan) | 3.5 | 100 | | Stretch | 4.4 | 175 | | Maximum | 5.0 | 200 |
NEO Individual Performance (30% Of Target Performance Payout)
The STIP target amount for the CEO and each of the other NEOs is designed to align to the 50th to 75th percentile range of established peer group and general industry pay percentiles.
NEO Individual Performance (30% Of Target Performance Payout)
| Executive | 2024 Target STIP | Fixed Or Variable Pay | | CEO | $1,800,000 | Variable Pay | | All Other NEOs Combined (1) | 3,830,000 | Variable Pay |
NEO Individual Performance (30% Of Target Performance Payout)
(1)All other NEOs comprised of Messrs. Rodino, Ellis, Roeder, Filer and Gonzalez. 24
Long-Term Incentive Plan Compensation (Long-Term Incentive Plan)
Long-Term Incentive Plan Compensation (Long-Term Incentive Plan) The 2024 Long-Term Incentive Plan (“LTIP”) was designed to reward the NEOs for sustained, long-term performance while providing opportunity for incremental reward for differentiated performance against the Company’s three-year cumulative earnings before interest, taxes, depreciation and amortization (“EBITDA”) plan. The target value of the LTIP is awarded in Restricted Stock Units ("RSUs"). The design of the LTIP creates 80% of the target value of the award in the form of performance-dependent variable pay and 20% in the form of retentive, time-based fixed compensation with three-year cliff vesting. The LTIP threshold, target, stretch and maximum performance levels for three-year cumulative EBITDA and related payouts are noted below for reference.
Long-Term Incentive Plan Compensation (Long-Term Incentive Plan)
| 3-Year Cumulative EBITDA | Performance To Plan (%) | Payout (%) | | Less Than Threshold | <80 | - | | Threshold | 80 | 50 | | Target (Plan) | 100 | 100 | | Stretch | 110 | 150 | | Maximum | 120 | 200 |
Long-Term Incentive Plan Compensation (Long-Term Incentive Plan)
The LTIP target amount for the CEO and each of the other NEOs is designed to align to the 25th to 50th percentile range of peer and general industry pay percentiles. The table below outlines the target LTIP amount for the CEO and all the other NEOs combined.
Long-Term Incentive Plan Compensation (Long-Term Incentive Plan)
| Executive | 2024 Target LTIP | Variable Pay (80%) | Fixed Pay (20%) | | CEO | $3,400,000 | $2,720,000 | $680,000 | | All Other NEOs Combined (1) | 4,661,250 | 3,729,000 | 932,250 |
Long-Term Incentive Plan Compensation (Long-Term Incentive Plan)
(1)All other NEOs comprised of Messrs. Rodino, Ellis, Roeder, Filer and Gonzalez.
Benchmark Sources and Fiscal Year 2024
Benchmark Sources and Fiscal Year 2024
Peer Group
Peer Group An important factor in establishing the 2024 Executive Compensation Plan is the external market for comparable roles. The Compensation Committee utilizes a benchmark peer group for purposes of market comparison to our executive compensation packages based on our general guidelines and as described under "Plan Components." Based on the data utilized from an index of General Industry companies provided by the Central Data Base Survey of Willis Towers Watson, our independent Compensation Committee consultant, there were no changes made by the Compensation Committee to the benchmark peer group for the period ended December 31, 2024 (as compared to the 2023 peer group) other than the deletion of Masonite International Corporation due to the acquisition of the company. We believe the following companies listed represent an effective comparator group of similar size with similar scope of revenue and market capitalization. •American Woodmark Corporation •Apogee Enterprises, Inc. •Brunswick Corporation •Cavco Industries, Inc. •EnPro Industries, Inc. •Hyster-Yale Materials Handling, Inc. •LCI Industries, Inc. •Modine Manufacturing Company •Mueller Industries, Inc. •Polaris, Inc. •Thor Industries, Inc. •UFP Industries, Inc. •Wabash National Corporation •Winnebago Industries, Inc. 27
Base Salary
Base Salary The Compensation Committee reviews and approves the base salaries of the NEOs each year, as well as at the time of promotion, change in job responsibilities or any other change deemed to be a material event. Base salaries are set during the first quarter of each year. The Compensation Committee sets the salary for the CEO and approves the base salaries for the other NEOs and other executive officers based on recommendations by the CEO. When determining base salary adjustments for its NEOs, the Compensation Committee considers a combination of (i) peer group data, (ii) market data, including industry norms and benchmarking data from companies of similar size and scope and (iii) outstanding Company and individual performance. In general, the Compensation Committee targets the 25th to 50th percentile of the Company’s peer group in determining base salaries.
Non-Equity Incentive Plan Awards
Non-Equity Incentive Plan Awards The short-term incentive portion of the 2024 Executive Compensation Plan or "STIP" consists of annual non-equity incentive plan awards, which are reviewed and approved each year and are based on the Company’s financial results and the individual’s performance against defined objectives. Several key components were considered in the development of the 2024 STIP to align the 2024 STIP with shareholder interest by measuring the Company’s financial performance and the individual’s performance in support of the Company’s short- and long-term strategies. The components are noted on page 23. The STIP metric components for 2024 are as follows:
Non-Equity Incentive Plan Awards
| 2024 STIP Award Component ($ in millions) | Threshold Performance | Target Performance | Maximum Performance | | Company Performance (Net Income) (1) | $115.1 | $153.4 | $176.5 | | Individual Rating | 2.5 | 3.5 | 5.0 | | Payout as a Percentage of Target Award | 50% | 100% | 200% |
Non-Equity Incentive Plan Awards
(1)All net income targets are net of the contributions of 2024 acquisitions and certain one-time and non-recurring charges and credits. The Company achieved adjusted fiscal 2024 net income of $150.2 million (net of 2024 acquisitions and non-recurring charges and credits) which equated to 98% of the target Company performance. When combined with the individual performance rating for each NEO, the actual STIP award payouts for 2024 were as follows:
Non-Equity Incentive Plan Awards
| Name / Benefit | 2024 Base Salary (1) | Target Award As % Of Base Salary (2) | Target STIP Award | Actual Award Amount As % Of Target Award | Actual 2024 STIP Award Payout | | Andy L. Nemeth | $850,000 | 212% | $1,800,000 | 105% | $1,884,600 | | Jeffrey M. Rodino | 575,000 | 174% | 1,000,000 | 106% | 1,063,500 | | Kip B. Ellis | 525,000 | 171% | 900,000 | 127% | 1,144,350 | | Andrew C. Roeder (3) | 500,000 | 125% | 625,000 | 93% | 579,375 | | Matthew S. Filer (4) | 375,000 | 80% | 300,000 | 112% | 336,600 | | Hugo E. Gonzalez | 470,000 | 187% | 880,000 | 105% | 921,360 |
Non-Equity Incentive Plan Awards
(1)The 2024 Base Salary for each of the NEOs reflects the Base Salary in effect as of January 2024 with the exception of Mr. Roeder who joined the Company in March 2024. (2)The target award as a percentage of base salary for the NEOs, with the exception of Mr. Roeder, was determined by the Compensation Committee and applied to the base salary in effect as of January 2024. The target award as a percentage of base salary was established for each NEO in 2024 in alignment with the Company’s “pay-for-differentiated-performance” philosophy, market competitive positions for earned payout, and further enhancement of the pay-at- risk for each NEO. (3)Mr. Roeder's target STIP award was prorated to reflect the period from his hire date of March 5, 2024 through December 31, 2024. His full year 2024 target STIP award was $750,000. (4)Mr. Filer’s actual 2024 STIP award payout excluded an additional $300,000 one-time bonus payment related to his service as Interim CFO from January 1, 2024 through March 4, 2024 and to his appointment as Chief Accounting Officer in May 2024. While these targets were used in fiscal year 2024, the Compensation Committee reserves the right to modify, cancel, change or reallocate any components of this calculation or criteria at any time. Each NEO’s individual performance rating takes into account four strategic performance objectives in assessing the personal performance of the NEOs named in the Summary Compensation Table for 2024. The four strategic objectives are specific for each NEO and are linked to the Company’s strategic plan and that year’s organizational strategic agenda and include, among others: 1.Improving the revenue and profitability of business units under the leadership and control of the NEO; 2.The introduction of new product lines and product line extensions to achieve target revenue growth levels and market share; 3.The ongoing evaluation of strategic opportunities related to our capital allocation strategy and the execution of those opportunities, as appropriate; and 4.Objectives linked to developing and managing talent consistent with the Company’s values and enhancing and developing the leadership capabilities of the Company’s future leaders. 29
Long-Term Equity Incentive Plan
Long-Term Equity Incentive Plan We believe long-term incentive compensation represents an important and appropriate motivational tool to achieve certain long-term Company goals and closely align the interests of our management team with those of our shareholders. Our executive officers participate in our Long-Term Incentive Plan or "LTIP" as a result of their ability to make a significant contribution to the Company’s financial performance, their level of responsibility, their ability to meet performance objectives and their leadership potential and execution. In 2024, the Compensation Committee adopted a Board approved “pay-for-differentiated-performance” based Long-Term Incentive Plan (“2024 LTIP”) for each of the NEOs. The 2024 LTIP utilizes a long-term incentive target award, which is established as a percentage of base compensation for each of the NEOs. The target award is comprised of a restricted share award (80% of which is Company performance-contingent and 20% of which is time-based). In determining the number of shares comprising the 2024 LTIP award, the target value of the restricted share component is divided by the stock price per share as established by the Board for the particular plan year, reflecting the trading price range of the common stock preceding the grant date ($63.34 for the 2024 LTIP award), with the exception of Mr. Roeder's 2024 LTIP award. The number of shares comprising Mr. Roeder's 2024 LTIP award reflected the stock price on the date of grant ($78.88 for his 2024 LTIP award), which was the closing stock price on March 5, 2024. The awarded target shares vest over a three-year period as follows: •Time-based shares cliff vest at the conclusion of the three-year service period from the grant date. •Performance-contingent shares are earned based on the achievement of the three-year cumulative Company EBITDA performance (2024 to 2026) against a target from 0% up to a maximum payout of 200% of target. The 2024 LTIP further reflects the Company’s “pay-for-differentiated-performance” philosophy through its upside potential for performance in excess of target levels. For 2024, the target as a percentage of base compensation was increased from the 2023 LTIP for all NEOs in alignment with the Company’s “pay-for-differentiated-performance” philosophy, anticipated conditions in the Company’s end markets, market competitive positions for earned payout, and the increased component of the pay-at-risk compensation for each NEO. The table below shows a sample calculation of 2024 LTIP award components:
Long-Term Equity Incentive Plan
| Base Salary | Target Award As A % Of Base Salary | Target Award 2,250 Restricted Shares @ $63.34 Per Share) | Restricted Shares Target Award: Performance-Contingent (80%) (Shares @ $63.34 Per Share) | Restricted Shares Target Award: Time-Based (20%) (Shares @ $63.34 Per Share) | | $475,000 | 30% | $142,500 | 1,800 | 450 |
Long-Term Equity Incentive Plan
The 2024 LTIP award is divided into (i) restricted shares with time-based vesting (“Time-Based Shares”) and (ii) restricted shares with performance-based vesting (“Performance-Contingent Shares”). The Compensation Committee believes that the use of Time-Based Shares and Performance-Contingent Shares aligns the NEO's focus with the Company’s long-term financial performance objectives and provides that a significant retention value of the granted equity is maintained for each NEO. 30
Table of Contents
| Plan Component | Threshold EBITDA Performance (1) Payout As % Of Target | Target EBITDA Performance (1) Payout As % Of Target | Stretch EBITDA Performance (1) Payout As % Of Target | Maximum EBITDA Performance (1) Payout As % Of Target | | Time-Based Shares | 100% | 100% | 100% | 100% | | Performance- Contingent Shares | 50% | 100% | 150% | 200% |
Table
| Name And Principal Position | Year | Salary (1) | Bonus (2) | Stock Awards (3) | Option Awards (4) | Non-Equity Incentive Plan Compensation (5) | Change In Pension Value And Non-Qualified Deferred Compensation Earnings (6) | All Other Compensation (7) | Total | | Andy L. Nemeth Chief Executive Officer | 2024 | $850,000 | $- | $3,564,636 | $- | $1,884,600 | $72,338 | $28,800 | $6,400,374 | | | 2023 | 817,308 | - | 4,200,020 | - | 1,632,600 | 69,223 | 29,400 | 6,748,551 | | | 2022 | 832,692 | - | 3,516,100 | - | 3,374,820 | 58,449 | 28,400 | 7,810,461 | | Jeffrey M. Rodino President, RV (8) | 2024 | 566,154 | - | 1,546,426 | - | 1,063,500 | - | 13,415 | 3,189,495 | | | 2023 | 546,250 | - | 1,785,000 | - | 931,900 | - | 25,800 | 3,288,950 | | | 2022 | 611,442 | - | 1,494,376 | - | 1,850,000 | - | 24,800 | 3,980,618 | | Kip B. Ellis President, Powersports, Technology, and Housing (9) | 2024 | 525,000 | - | 1,336,742 | - | 1,144,350 | - | 26,400 | 3,032,492 | | | 2023 | 504,808 | - | 1,540,064 | - | 793,890 | - | 25,800 | 2,864,562 | | | 2022 | 516,346 | - | 1,289,264 | - | 1,710,090 | - | 24,800 | 3,540,500 | | Andrew C. Roeder Executive Vice President - Finance, Chief Financial Officer and Treasurer (10) | 2024 | 392,308 | - | 2,399,682 | - | 579,375 | - | 10,000 | 3,381,365 | | Matthew S. Filer Executive Vice President of Finance, Treasurer and Former Interim Chief Financial Officer (11) | 2024 | 372,115 | 300,000 | 273,905 | - | 336,600 | - | 14,177 | 1,296,797 | | | 2023 | 336,539 | 300,000 | 238,000 | - | 260,800 | - | 64,985 | 1,200,324 | | Hugo E. Gonzalez Executive Vice President - Operations and Chief Operating Officer (12) | 2024 | 456,154 | - | 943,584 | - | 921,360 | - | 25,300 | 2,346,398 |
Grants of Plan-Based Awards
Grants of Plan-Based Awards
Outstanding Equity Awards
Outstanding Equity Awards
And Stock Vested In Fiscal 2024
And Stock Vested In Fiscal 2024 The table below sets forth information about the value realized by the NEOs on vesting of stock awards and the exercise of stock options and SARS in 2024.
And Stock Vested In Fiscal 2024
| Name | Stock Awards (1)(2) | | Option/SARs Awards (3)(4) | | | | Number Of Shares Acquired On Vesting | Value Realized on Vesting | Number Of Shares Acquired On Exercise | Value Realized On Exercise | | Andy L. Nemeth | 108,000 | $6,851,120 | - | $- | | Jeffrey M. Rodino | 46,286 | 2,936,182 | 113,121 | 6,291,672 | | Kip B. Ellis | 38,573 | 2,446,896 | 27,000 | 1,281,060 | | Andrew C. Roeder | - | - | - | - | | Matthew S. Filer | - | - | - | - | | Hugo E. Gonzalez | 7,425 | 471,014 | 7,313 | 429,634 |
And Stock Vested In Fiscal 2024
(1)For Messrs. Nemeth, Rodino, Ellis and Gonzalez, the table below includes the number of Time-Based Shares awarded on January 21, 2021, which vested on January 21, 2024, using the NASDAQ Stock Market closing price of $65.49 per share multiplied by the total number of shares acquired on vesting.
And Stock Vested In Fiscal 2024
| | Nemeth | Rodino | Ellis | Roeder | Filer | Gonzalez | | Number of Shares (1) | 12,000 | 5,144 | 4,286 | - | - | 825 | | Value | $785,840 | $336,831 | $280,643 | - | - | $54,026 |
And Stock Vested In Fiscal 2024
(2)For Messrs. Nemeth, Rodino, Ellis and Gonzalez, the table below includes the number of Performance-Contingent Shares awarded on January 21, 2021, which vested at 200% of target on January 17, 2024 (the date the performance conditions were met), using the NASDAQ Stock Market closing price of $63.18 per share multiplied by the total number of shares acquired on vesting.
And Stock Vested In Fiscal 2024
| | Nemeth | Rodino | Ellis | Roeder | Filer | Gonzalez | | Number of Shares (2) | 96,000 | 41,142 | 34,287 | - | - | 6,600 | | Value | $6,065,280 | $2,599,351 | $2,166,253 | - | - | $416,988 |
And Stock Vested In Fiscal 2024
(3)The number of shares acquired on exercise in 2024 for Messrs. Rodino, Ellis and Gonzalez are related to stock options granted on May 14, 2020 which became 100% vested on May 14, 2023. The value realized on exercise was based on the difference between the market price per share of the common stock on the date of exercise and the option exercise price.
And Stock Vested In Fiscal 2024
| | Nemeth | Rodino | Ellis | Roeder | Filer | Gonzalez | | Number of Shares (3) | - | 90,000 | 27,000 | - | - | 7,313 | | Value | - | $5,648,600 | $1,281,060 | - | - | $429,634 |
And Stock Vested In Fiscal 2024
(4)The gross number of shares acquired on exercise in 2024 of SARs for Mr. Rodino was 23,121 (or 4,938 net shares) and a value realized on exercise of $643,072. The determination of the net number of shares acquired and the related value realized on exercise was based on the difference between the market price per share of the common stock on the date of exercise and the exercise price of the SARs and includes a reduction for the purpose of satisfying the minimum tax withholding obligations of Mr. Rodino upon the exercise of the SARs related to the third and fourth tranches of the SARs awarded to Mr. Rodino in 2017. 39
Potential Payments Upon
Potential Payments Upon
CEO Pay Ratio
CEO Pay Ratio As required by the Dodd-Frank Wall Street Reform and Consumer Protection Act and SEC rules, the Company is providing information about the relationship of the annual total compensation of its employees to the annual total compensation of the CEO during 2024. The total annual compensation of our median employee based on total annual compensation (other than our CEO) was $47,141. The annual total compensation of the CEO was $6,400,374. Based on this information, the ratio of the total compensation of the CEO for fiscal 2024 to the median employee’s total annual compensation is 136 to 1. This pay ratio is a reasonable estimate calculated in good faith, in a manner consistent with Item 402(u) of Regulation S-K, based on the Company’s payroll and employment records and the methodology described below. The SEC rules for identifying the “median 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, the pay ratios reported by other companies may not be comparable to the pay ratio set forth above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios. To identify the median of the annual total compensation of all employees, as well as to determine the annual total compensation of the “median employee,” the methodology and the material assumptions, adjustments and estimates used were as follows: 1.The median employee was identified using active employee information as of December 31, 2024. 2.Fiscal 2024 earnings (gross pay) of cash compensation were used as the consistently applied compensation measure to identify the median employee within the employee population. Cash compensation is the most prevalent measure of pay across the organization. Using this methodology, the median employee’s compensation was $47,141 and determined to be applicable to a full-time, hourly, United States-based employee. 3.The total compensation of the CEO for fiscal 2024 was $6,400,374, which is the total of the compensation components reflected in the Summary Compensation Table. 44
Pay Versus Performance
Pay Versus Performance The following table sets forth a comparison of Pay Versus Performance (“PVP”) related to compensation reflected in the Summary Compensation Table to compensation actually paid to our Principal Executive Officer (“PEO”) and other NEOs as well as information on our Company performance.
Pay Versus Performance
| Year | Summary Compensation Table Total for PEO (1) | Compensation Actually Paid to PEO (5) | Average Summary Compensation Table Total for Non-PEO NEOs (2) | Average Compensation Actually Paid to Non-PEO NEOs (5) | Value of Initial Fixed $100 Investment Based on: | | Company Net Income ($ in millions) | Company EBITDA (4) ($ in millions) | | | | | | | Company Total Shareholder Return (3) | Peer Group Total Shareholder Return (3) | | | | 2024 | $6,400,374 | $8,127,190 | $2,649,309 | $3,094,730 | $262 | $114 | $138 | $425 | | 2023 | 6,748,551 | 15,496,536 | 2,138,092 | 3,039,172 | 207 | 146 | 143 | 405 | | 2022 | 7,810,461 | 4,230,620 | 3,416,649 | 1,780,081 | 122 | 112 | 328 | 627 | | 2021 | 8,023,798 | 12,877,899 | 3,789,459 | 6,581,026 | 159 | 145 | 225 | 457 | | 2020 | 7,469,365 | 11,918,983 | 2,624,006 | 3,835,865 | 133 | 116 | 97 | 247 |
Pay Versus Performance
(1)Mr. Nemeth served as our PEO for each year. (2)The Company’s Non-PEO NEOs for the years ended December 31, 2024, 2023, 2022, 2021 and 2020 were as follows: •2024 - Messrs. Rodino, Ellis, Roeder, Filer and Gonzalez •2023 - Messrs. Rodino, Ellis, Filer, Jacob A. Petkovich and Joel D. Duthie •2022 and 2021 – Messrs. Cleveland, Rodino, Ellis and Petkovich •2020 - Messrs. Cleveland, Rodino, Ellis, Petkovich, John A. Forbes and Joshua A. Boone Mr. Petkovich joined the Company as CFO in November 2020 and resigned from the Company in May 2023. Mr. Filer joined the Company as Senior Vice President of Finance in November 2022 and served as Interim CFO from May 2023 through March 4, 2024, at which time he returned to his previous role as Senior Vice President of Finance and was appointed Chief Accounting Officer in May 2024. Mr. Cleveland served as Executive Chairman during the period from 2020 through 2022 and served as our PEO through December 31, 2019. Equity awards granted to Mr. Cleveland while he served as PEO continued to vest during the period from 2020 through 2022. Mr. Boone resigned as CFO of the Company in June 2020. Mr. Forbes, an independent member of our Board, served as interim CFO from June 2020 until November 2020. The compensation for Mr. Forbes reflected in this table relates to the salary, bonus and equity grant Mr. Forbes received while serving as interim CFO. The table does not include any compensation Mr. Forbes received related to his service as a member of the Board of Directors. (3)Company Total Shareholder Return (“TSR”) reflects $100 invested as of market close on December 31, 2019, the final trading day of fiscal 2019. Peer Group TSR reflects a customized peer group of companies, which includes Brunswick Corporation, Cavco Industries, Inc., LCI Industries, Malibu Boats, Inc., Polaris, Inc., Thor Industries, Inc., Winnebago Industries, Inc., and Wabash National Corporation. See Stock Performance Graph on page 29 of our Form 10-K for the fiscal year ended December 31, 2024. (4)Company selected measure of EBITDA, calculated as earnings before interest, taxes, depreciation and amortization, is the primary metric used in our LTIP as discussed in the CD&A. Below is a reconciliation of net income to EBITDA for the periods shown in the table above:
Pay Versus Performance
| ($ in millions) | 2020 | 2021 | 2022 | 2023 | 2024 | | Net Income | $97 | $225 | $328 | $143 | $138 | | + Interest expense | 43 | 58 | 61 | 69 | 80 | | + Income taxes | 33 | 69 | 107 | 48 | 40 | | + Depreciation & amortization | 74 | 105 | 131 | 145 | 167 | | EBITDA | $247 | $457 | $627 | $405 | $425 |
Pay Versus Performance
45
Analysis of Compensation Actually Paid and
Analysis of Compensation Actually Paid and