DEF 14A of Ryder System Inc
Filed Mar 12, 2025 · FY20240000085961-25-000043
Independence and Financial Expertise
| Key Responsibilities | | | • | Oversee and approve our executive and director compensation plans, policies and programs | | • | Review industry trends and benchmark data, and determine whether compensation actions support key business objectives and pay-for-performance philosophy | | • | Approve compensation actions for direct reports to the CEO, and recommend compensation actions for the CEO for consideration by the independent directors | | • | Review and discuss results of shareholder advisory vote on executive compensation, the frequency of such vote and other shareholder input, and consider whether to recommend any adjustments to policies and practices based on this feedback | | • | Review and assess compensation policies from a risk management perspective | | • | Oversee the preparation of the Compensation Discussion and Analysis section of the Company's annual proxy statement and determine whether to recommend it for inclusion in the proxy statement | | Independence | | | • | All members are independent |
Other Policies and Practices Related to Director Service
Other Policies and Practices Related to Director Service Limits on Other Directorships. To ensure our directors have adequate time to serve on our Board, we permit service on no more than four other public company boards (or two other public company boards for our CEO/Chair). Each director is within these thresholds. We have determined that each director nominee has adequate time to devote to service on our Board and provide valuable service to the Company in his or her role as a director. Board and Committee Meeting Attendance Requirements. Directors are expected to regularly attend Board and committee meetings. Directors who fail to attend 75% or more of our Board and committee meetings for two consecutive years must submit a letter of resignation, which the Board will determine whether to accept, taking into account the recommendation of the Governance Committee. All of our directors met the meeting attendance requirements in 2024. Resignation upon Change in Status. The Board also requires directors to submit a letter of resignation upon a substantial change in the nature of the director's employment or other significant responsibilities since the time of his or her election. The Board, upon review and recommendation by the Governance Committee, will determine whether the circumstances are consistent with the criteria for Board membership and whether it is appropriate for the director to continue service on the Board. Impairment of Ability to Serve. A director who experiences any other change in circumstances that may impair their ability to effectively serve on the Board, or that could result in negative attention to the Company or director, is required to immediately notify the Company and may be asked by the Board to submit a letter of resignation. Each director's principal occupation and other pertinent information about their particular experiences, qualifications, attributes and skills that led the Board to conclude that such person should serve as a director appears on the following pages. If you are a beneficial shareholder and do not give your nominee instructions, your nominee does not have the ability to vote in favor of or against the director nominees. We therefore urge you to return your proxy card and vote your shares on this proposal. The Board recommends a vote FOR Proposal 1 (the election of each director nominee).
Other Policies and Practices Related to Director Service
| Table of Contents | Ryder System, Inc. | 2025 Proxy Statement | 19 |
Other Policies and Practices Related to Director Service
| | Election of Directors (Proposal 1) |
Other Policies and Practices Related to Director Service
| DIRECTOR NOMINEES |
Other Policies and Practices Related to Director Service
| Robert J. Eck | | | | BUSINESS EXPERIENCE: Mr. Eck served as CEO of Anixter International Inc. ("Anixter"), a global distributor of network and security solutions, electrical and electronic solutions, and utility power solutions, from 2008 until he retired in 2018. Mr. Eck joined Anixter in 1989 and held roles of increasing responsibility in strategy, supply chain management, sales and marketing, and human resources. From 2007 to 2008, Mr. Eck served as Executive Vice President and Chief Operating Officer ("COO") of Anixter. Prior to that position, Mr. Eck served as Executive Vice President of Enterprise Cabling and Security Solutions for Anixter from 2004 to 2007. In 2003, he served as Senior Vice President of Physical Security Products and Integrated Supply of Anixter. OTHER PUBLIC BOARD MEMBERSHIPS: •A past director of Anixter (until June 2020) OTHER RELEVANT EXPERIENCE: •Director of Incora QUALIFICATIONS: The Board nominated Mr. Eck as a director because of his leadership experience and expertise in supply chain management, domestic and international operations, and marketing and business development. In addition, Mr. Eck has experience leading human resources in a large, multinational company and with mergers and acquisitions. Mr. Eck also has prior leadership experience as President and CEO and director of a global public company. Consistent with our policies and practices related to director service, in making a determination as to Mr. Eck’s nomination, the Board considered Mr. Eck’s qualifications listed above, his significant contributions to the Board and Company, and his demonstrated willingness and ability to commit adequate time and attention to all Board matters. | | Director Since: 2011 Age: 66 Committees: •Compensation •Governance (Chair) Lead Independent Director | |
Other Policies and Practices Related to Director Service
| Robert A. Hagemann | | | | BUSINESS EXPERIENCE: Mr. Hagemann served as Senior Vice President and CFO of Quest Diagnostics Incorporated ("Quest") until he retired in 2013. Mr. Hagemann joined Quest's predecessor, Corning Life Sciences, Inc. ("Corning"), in 1992, and held roles of increasing responsibility until he was named CFO of Quest in 1998. Prior to joining Corning, Mr. Hagemann held senior financial positions at Prime Hospitality, Inc. and Crompton & Knowles, Inc. He also held various positions in corporate accounting and audit at Merrill Lynch & Company and Ernst & Young. OTHER PUBLIC BOARD MEMBERSHIPS: •Graphic Packaging Holding Company •Zimmer Biomet Holdings, Inc. QUALIFICATIONS: The Board nominated Mr. Hagemann as a director because of his leadership experience and expertise in finance and accounting, business development, strategy, supply chains and government contracting. In addition, Mr. Hagemann has leadership experience of a global public company as Chief Financial Officer and as a director, including serving on audit, compensation, governance and research/innovation/technology committees. Consistent with our policies and practices related to director service, in making a determination as to Mr. Hagemann's nomination, the Board considered Mr. Hagemann's current service on the board of two other public companies. Mr. Hagemann was renominated based on his qualifications listed above, his significant contributions to the Board and Company, and his demonstrated willingness and ability to commit adequate time and attention to all Board matters. | | Director since: 2014 Age: 68 Committees: •Audit •Finance | |
Other Policies and Practices Related to Director Service
| Table of Contents | Ryder System, Inc. | 2025 Proxy Statement | 20 |
Other Policies and Practices Related to Director Service
| | Election of Directors (Proposal 1) |
Other Policies and Practices Related to Director Service
| Michael F. Hilton | | | | BUSINESS EXPERIENCE: Mr. Hilton served as the President and CEO of Nordson Corporation ("Nordson"), an engineering and manufacturing company, from 2010 until he retired in 2019. Prior to joining Nordson, Mr. Hilton served as Senior Vice President and General Manager of Air Products & Chemicals, Inc. ("Air Products") from 2007 until 2010, and was responsible for leading the company's global Electronics and Performance Materials segment. Mr. Hilton joined Air Products in 1976, where he held roles of increasing responsibility in a variety of management and operations positions. Air Products serves customers in industrial, energy, technology and healthcare markets worldwide with a unique portfolio of atmospheric gases, process and specialty gases, performance materials, equipment and services. OTHER PUBLIC BOARD MEMBERSHIPS: •Jeld-Wen Holding, Inc. •Lincoln Electric Holdings, Inc. •Regal Rexnord Corporation •A past director of Nordson (until December 2019) QUALIFICATIONS: The Board nominated Mr. Hilton as a director because of his leadership experience and expertise in global operations, strategy development, business-to-business marketing and oversight of large and diverse business units. In addition, Mr. Hilton has leadership experience from his past service as CEO of a global public company and as a current director on two other global public company boards. Consistent with our policies and practices related to director service, in making a determination as to Mr. Hilton's nomination, the Board considered Mr. Hilton's past leadership experience and his current service on three other public company boards. Mr. Hilton was renominated based on his qualifications listed above, his valuable contributions to the Board, his in-depth knowledge of the Company gleaned from his years of service on the Board, and his demonstrated willingness and ability to commit adequate time and attention to all Board matters. | | Director since: 2012 Age: 70 Committees: •Compensation (Chair) •Governance | |
Other Policies and Practices Related to Director Service
| Tamara L. Lundgren | | | | CURRENT PRINCIPAL OCCUPATION: Ms. Lundgren serves as Chairman, President and CEO of Radius Recycling ("Radius"), previously Schnitzer Steel Industries, Inc. ("SSI"). Radius is one of the largest publicly-traded manufacturers and exporters of recycled metals in North America, operating over 100 facilities throughout North America, including seven deep-water ports located on both coasts of the U.S. and Puerto Rico and a retail auto parts business with over four million annual retail visits. BUSINESS EXPERIENCE: Ms. Lundgren was appointed President and CEO of SSI in 2008 and Chairman in 2020. Ms. Lundgren joined SSI in 2005 as Chief Strategy Officer and held positions of increasing responsibility, including Executive Vice President and COO. Prior to joining SSI, Ms. Lundgren was an investment banker and lawyer with 25 years of experience in the U.S. and Europe. Ms. Lundgren was a Managing Director at JPMorgan Chase and Deutsche Bank in London and New York. Earlier she was a partner in the Washington, D.C. law firm of Hogan Lovells (then Hogan & Hartson, LLP). OTHER PUBLIC BOARD MEMBERSHIPS: •Radius Recycling •A past director of Parsons Corporation (until April 2020) OTHER RELEVANT EXPERIENCE: •A past member of the Board of Directors of Federal Reserve Bank of San Francisco (until December 2023); former Chair of the Board •A past member of the Board of Directors of the U.S. Chamber of Commerce (until June 2022); former Chairman of the Board QUALIFICATIONS: The Board nominated Ms. Lundgren as a director because of her leadership experience and expertise in global operations, strategy, and finance and corporate law. In addition, Ms. Lundgren has leadership experience as President and CEO and as a director of a global public company. Consistent with our policies and practices related to director service, in making a determination as to Ms. Lundgren's nomination, the Board considered Ms. Lundgren's current role as CEO of another public company and service on the board of her company. Ms. Lundgren was renominated based on her qualifications listed above, her significant contributions to the Board and Company, and her demonstrated willingness and ability to commit adequate time and attention to all Board matters. | | Director since: 2012 Age: 67 Committees: •Audit •Governance | |
Other Policies and Practices Related to Director Service
| Table of Contents | Ryder System, Inc. | 2025 Proxy Statement | 21 |
Other Policies and Practices Related to Director Service
| | Election of Directors (Proposal 1) |
Other Policies and Practices Related to Director Service
| Luis P. Nieto, Jr. | | | | BUSINESS EXPERIENCE: Mr. Nieto served as President of the Consumer Foods Group for ConAgra Foods Inc. ("ConAgra"), one of the largest packaged food companies in North America, from 2007 until he retired in 2009. Mr. Nieto joined ConAgra in 2005 and held various leadership positions, including President of the Meats Group and Refrigerated Foods Group. Prior to joining ConAgra, Mr. Nieto was President and CEO of the Federated Group, a leading private label supplier to the retail grocery and foodservice industries, from 2002 to 2005. From 2000 to 2002, he served as President of the National Refrigerated Products Group of Dean Foods Company. Prior to joining Dean Foods, Mr. Nieto held positions in brand management and strategic planning with Mission Foods, Kraft Foods and the Quaker Oats Company. Mr. Nieto is the President of Nieto Advisory LLC, a consulting firm and is affiliated with Akoya Capital Partners. OTHER PUBLIC BOARD MEMBERSHIPS: •A past director of AutoZone, Inc. (until December 2019) QUALIFICATIONS: The Board nominated Mr. Nieto as a director because of his leadership experience and expertise in finance, operations, supply chains, brand management, marketing and strategic planning. In addition, Mr. Nieto has leadership experience in positions of executive oversight and senior management at a global public company. He also has experience as a director on a global public company board, including serving on audit and governance committees. Consistent with our policies and practices related to director service, in making a determination as to Mr. Nieto's nomination, the Board considered Mr. Nieto’s past service on the board of another public company. Mr. Nieto was renominated based on his qualifications listed above, his significant contributions to the Board and Company, and his demonstrated willingness and ability to commit adequate time and attention to all Board matters. | | Director since: 2007 Age: 69 Committees: •Compensation •Finance | |
Other Policies and Practices Related to Director Service
| David G. Nord | | | | BUSINESS EXPERIENCE: Mr. Nord served as Executive Chairman of Hubbell Incorporated ("Hubbell"), an international manufacturer of electrical and electronic products for a broad range of non-residential and residential construction, industrial and utility applications until May 2021, and as CEO from May 2014 until he retired in October 2020. Mr. Nord joined Hubbell in 2005 as Senior Vice President and CFO, and subsequently served as President and COO from 2012 to 2013. Prior to joining Hubbell, Mr. Nord held various senior financial positions at United Technologies Corporation, including Vice President and Controller as well as Vice President of Finance and CFO of Hamilton Sundstrand Corporation, one of its principal subsidiaries. OTHER PUBLIC BOARD MEMBERSHIPS: •Jeld-Wen Holding, Inc. •A past director of Hubbell (until May 2021) QUALIFICATIONS: The Board nominated Mr. Nord as a director because of his leadership experience, expertise in global operations and strong financial acumen. In addition, Mr. Nord has past leadership experience as President and CEO and as a director of a global public company. Consistent with our policies and practices related to director service, in making a determination as to Mr. Nord's nomination, the Board considered Mr. Nord's past role as CEO of another public company and current service on a public company board. Mr. Nord was renominated based on his qualifications listed above, his significant contributions to the Board and Company, and his willingness and ability to commit adequate time and attention to all Board matters. | | Director since: 2018 Age: 67 Committees: •Audit (Chair) •Finance | |
Other Policies and Practices Related to Director Service
| Table of Contents | Ryder System, Inc. | 2025 Proxy Statement | 22 |
Other Policies and Practices Related to Director Service
| | Election of Directors (Proposal 1) |
Other Policies and Practices Related to Director Service
| Robert E. Sanchez | | | | CURRENT PRINCIPAL OCCUPATION: Mr. Sanchez currently serves as Board Chair and CEO of Ryder. BUSINESS EXPERIENCE: Mr. Sanchez was appointed Chair of Ryder's Board in May 2013, after his appointment as President and CEO in January 2013. Mr. Sanchez joined Ryder in 1993 and has served in positions of increasing responsibility, including a broad range of leadership positions in Ryder's business segments. Mr. Sanchez served as President and COO from February 2012 to December 2012. Prior to that position, he served as President of Global Fleet Management Solutions, Ryder's largest business segment, from September 2010 to February 2012. Mr. Sanchez also served as Executive Vice President and CFO from October 2007 to September 2010; as Executive Vice President of Operations, U.S. Fleet Management Solutions from October 2005 to October 2007; and as Senior Vice President and Chief Information Officer from January 2003 to October 2005. Mr. Sanchez has been a member of Ryder's Executive Leadership team since 2003. OTHER PUBLIC BOARD MEMBERSHIPS: •Texas Instruments, Inc. OTHER RELEVANT EXPERIENCE: •A past member of the Board of Directors of the Truck Renting and Leasing Association ("TRALA") (until April 2024) QUALIFICATIONS: The Board nominated Mr. Sanchez as a director because of his leadership experience and expertise in transportation, supply chains/logistics, global operations, finance and information technology. He has broad leadership experience based on years of diverse senior management roles at Ryder, including serving as President and Chief Operating Officer, Division President of Ryder's largest business segment, Chief Financial Officer and Chief Information Officer. He also has experience as a director on a global public company board, including having served as compensation committee chair. Mr. Sanchez was renominated based on his qualifications listed above, his significant contributions to the Board and Company, and his demonstrated willingness and ability to commit adequate time and attention to all Board matters. | | Director since: 2013 Age: 59 Board Chair | |
Other Policies and Practices Related to Director Service
| Abbie J. Smith | | | | CURRENT PRINCIPAL OCCUPATION: Ms. Smith serves as the Boris and Irene Stern Distinguished Service Professor of Accounting at the University of Chicago Booth School of Business. BUSINESS EXPERIENCE: Ms. Smith joined the faculty of the University of Chicago Booth School of Business in 1980 upon completion of her Ph.D. in Accounting at Cornell University. The primary focus of her research is corporate restructuring, transparency and corporate governance. She was nominated for a 2005 Smith Breeden Prize for her publication in The Journal of Finance, and has received a Marvin Bower Fellowship from the Harvard Business School, a McKinsey Award for Excellence in Teaching, and a GE Foundation Research Grant. OTHER PUBLIC BOARD MEMBERSHIPS: •HNI Corporation OTHER RELEVANT EXPERIENCE: •Trustee of the Dimensional ETF Trust, DFA Investment Trust Co, and Dimensional Emerging Markets Value Fund; Dimensional Investment Group Inc.; and DFA Investment Dimensions Group Inc. •Trustee of the Chicago-based UBS Funds QUALIFICATIONS: The Board nominated Ms. Smith as a director because of her leadership experience and expertise in business, accounting and corporate governance. In addition, Ms. Smith has an accomplished educational background with extensive academic and teaching experience in business, entrepreneurship, accounting and corporate governance. She also has experience as a director on global public company boards, including serving as lead independent director and member of audit and governance committees. Consistent with our policies and practices related to director service, in making a determination as to Ms. Smith's nomination, the Board considered Ms. Smith's current role as a professor of a distinguished university and service on other company boards. Ms. Smith was renominated based on her qualifications listed above, her significant contributions to the Board and Company, and her demonstrated willingness and ability to commit adequate time and attention to all Board matters. | | Director since: 2003 Age: 71 Committees: •Audit •Finance | |
Other Policies and Practices Related to Director Service
| Table of Contents | Ryder System, Inc. | 2025 Proxy Statement | 23 |
Other Policies and Practices Related to Director Service
| | Election of Directors (Proposal 1) |
Other Policies and Practices Related to Director Service
| E. Follin Smith | | | | BUSINESS EXPERIENCE: Until May 2007, Ms. Smith served as the Executive Vice President, CFO and Chief Administrative Officer of Constellation Energy Group, Inc. ("Constellation Energy Group"), then the nation's largest competitive supplier of electricity to large commercial and industrial customers and the nation's largest wholesale power seller. Ms. Smith joined Constellation Energy Group as Senior Vice President, CFO in June 2001, and was appointed Chief Administrative Officer in December 2003. Before joining Constellation Energy Group, Ms. Smith was Senior Vice President and CFO of Armstrong Holdings, Inc. ("Armstrong"), the global leader in hard-surface flooring and ceilings. Prior to joining Armstrong, Ms. Smith held various senior financial positions with General Motors, including CFO for General Motors' Delphi Chassis Systems division. OTHER PUBLIC BOARD MEMBERSHIPS: •A past director of Kraft Foods Group (until July 2015) •A past director of Discover Financial Services (until May 2014) QUALIFICATIONS: The Board nominated Ms. Smith as a director based on her leadership experience and expertise in finance, human resources, risk management, legal and information technology. In addition, Ms. Smith has leadership experience serving as Chief Financial Officer, Chief Administrative Officer, and as a director of global public companies, including serving on audit, governance and risk committees. Consistent with our policies and practices related to director service, in making a determination as to Ms. Smith's nomination, the Board considered Ms. Smith's past experience as a Chief Financial Officer and service on other company boards. Ms. Smith was renominated based on her qualifications listed above, her significant contributions to the Board and Company, and her demonstrated willingness and ability to commit adequate time and attention to all Board matters. | | Director since: 2005 Age: 65 Committees: •Compensation •Governance | |
Other Policies and Practices Related to Director Service
| Dmitri L. Stockton | | | | BUSINESS EXPERIENCE: Mr. Stockton served as Senior Vice President and Special Advisor to the Chairman of General Electric Company ("GE"), a multinational industrial company that provides power and water, aviation, oil and gas, healthcare, appliances and lighting, energy management, transportation and financial services, from 2016 until he retired in 2017. Mr. Stockton joined GE in 1987 and held various positions of increasing responsibility during his 30-year tenure. From 2011 to 2016, Mr. Stockton served as Chairman, President and CEO of GE Asset Management, a global asset management company affiliated with GE, and as Senior Vice President of GE. From 2008 to 2011, he served as President and CEO for GE Capital Global Banking and Senior Vice President of GE. He also served as President and CEO for GE Consumer Finance for Central and Eastern Europe. OTHER PUBLIC BOARD MEMBERSHIPS: •Deere & Company •Target Corporation •Smurfit WestRock Company •A past director of Stanley Black & Decker (until December 2021) OTHER RELEVANT EXPERIENCE: •GE Asset Management Inc. (until 2016); GE RSP US Equity and GE RSP Income Fund (until 2016); and GE Elfun Funds (until 2016) QUALIFICATIONS: The Board nominated Mr. Stockton as a director because of his leadership experience and his expertise in risk management, governance, finance and asset management. In addition, Mr. Stockton also has leadership experience in positions of executive oversight and senior management from his tenure at GE, as well as experience as a director on public company boards. Consistent with our policies and practices related to director service, in making a determination as to Mr. Stockton's nomination, the Board considered Mr. Stockton's current service on the Board of three other public companies. Mr. Stockton was renominated based on his qualifications listed above, his significant contributions to the Board and Company, and his willingness and ability to commit adequate time and attention to all Board matters. | | Director since: 2018 Age: 60 Committees: •Compensation •Finance (Chair) | |
Other Policies and Practices Related to Director Service
| Table of Contents | Ryder System, Inc. | 2025 Proxy Statement | 24 |
Other Policies and Practices Related to Director Service
| | Election of Directors (Proposal 1) |
Other Policies and Practices Related to Director Service
| Charles M. Swoboda | | | | BUSINESS EXPERIENCE: Mr. Swoboda served as Chairman and CEO of Cree, Inc. ("Cree"), a global company leader in silicon carbide technology, from May 2005 until he retired in May 2017. Mr. Swoboda was appointed President and CEO of Cree in 2001 and Chairman in 2005. Mr. Swoboda joined Cree in 1993 as a Manager of LED Product and held positions of increasing responsibility, including President and COO. Prior to joining Cree, Mr. Swoboda held positions of significant responsibility, including Sales Engineer at Hewlett-Packard Company. OTHER PUBLIC BOARD MEMBERSHIPS: •A past director of Anixter (until June 2020) OTHER RELEVANT EXPERIENCE: •Executive Chairman of Vast Therapeutics, a preclinical stage drug development company QUALIFICATIONS: The Board nominated Mr. Swoboda as a director because of his leadership experience and expertise in global operations, and new product and technology development and commercialization. In addition, Mr. Swoboda has leadership experience in positions of executive oversight and senior management at global public companies. He also has experience as a director on global public company boards, including serving as a member of the governance and compensation committees. Consistent with our policies and practices related to director service, in making a determination as to Mr. Swoboda's nomination, the Board considered Mr. Swoboda's past experience as a Chairman and CEO and service on other company boards. Mr. Swoboda was nominated based on his qualifications listed above, and his demonstrated willingness and ability to commit adequate time and attention to all Board matters. | | Director since: 2022 Age: 58 Committees: •Audit •Governance | |
Other Policies and Practices Related to Director Service
| Table of Contents | Ryder System, Inc. | 2025 Proxy Statement | 25 |
Other Policies and Practices Related to Director Service
| | Ratification of Independent Registered Certified Public Accounting Firm (Proposal 2) |
Other Policies and Practices Related to Director Service
| PROPOSAL NO. 2 | | RATIFICATION OF INDEPENDENT REGISTERED CERTIFIED PUBLIC ACCOUNTING FIRM |
Other Policies and Practices Related to Director Service
The Audit Committee is responsible for the appointment, compensation, retention and oversight of the independent registered certified public accounting firm retained to audit our consolidated financial statements. The Audit Committee has re-appointed PricewaterhouseCoopers LLP as Ryder's independent registered public accounting firm (the "Accounting Firm") for the year ending December 31, 2025. PricewaterhouseCoopers LLP has audited our consolidated financial statements continuously since 2006. The Audit Committee engages in a thorough annual evaluation of the Accounting Firm's qualifications, performance and independence, and is also responsible for approving the services and audit fees associated with the retention of PricewaterhouseCoopers LLP. The Audit Committee and Board believe that the continued retention of PricewaterhouseCoopers LLP to serve as our Accounting Firm is in the best interests of the Company and its shareholders. In re-appointing PricewaterhouseCoopers LLP to serve as our Accounting Firm for 2025, the Audit Committee considered a number of factors, including: •The quality of PricewaterhouseCoopers LLP's work product and performance; •The professional qualifications of PricewaterhouseCoopers LLP, the lead engagement partner and other members of the audit team; •PricewaterhouseCoopers LLP's knowledge and experience with the Company's business operations, accounting policies and industry; •The results of the Public Company Accounting Oversight Board ("PCAOB") review of PricewaterhouseCoopers LLP; •PricewaterhouseCoopers LLP's independence program and controls for maintaining independence; •The appropriateness of PricewaterhouseCoopers LLP's audit fees; and •The results of the Audit Committee's and management's annual evaluation of PricewaterhouseCoopers LLP's qualifications, performance and independence, and the potential impact of selecting a different independent registered certified public accounting firm. Although shareholder ratification of the appointment of PricewaterhouseCoopers LLP is not required, the Board believes that submitting the appointment to shareholders for ratification is a matter of good corporate governance. The Audit Committee will consider the outcome of this vote in future deliberations regarding the appointment of our Accounting Firm, and has discretion to change the appointment at any time if it determines that such change would be in the best interests of the Company and our shareholders. Representatives of PricewaterhouseCoopers LLP will be present at the 2025 Annual Meeting of Shareholders to respond to appropriate questions and to make a statement if they desire to do so.
Ryder Compensation Philosophy and Objectives
| Our compensation program has three key goals: | | | • | Attracting and Retaining Talent Deliver market competitive compensation that attracts high-impact talent and encourages long-term retention | | • | Encouraging Shareholder Alignment Tie a significant portion of executive compensation to Company performance to align the interests of our executives with our shareholders, as follows: •Drive company performance by setting targets that will promote long-term, sustainable and profitable growth, with appropriate risk-taking •Encourage long-term shareholder value creation | | • | Rewarding Individual Performance Recognize individual performance and contributions to Ryder |
Suite of Compensation Metrics
| | | Settled in | Key Factors | Payout Linked to Strategy/Growth | | | Base Salary | Cash | •Based on experience, market data, performance, tenure, responsibility and succession potential •Reviewed annually | •Competitively set to recruit and retain top talent who will drive Company performance | | | Annual Cash Incentive Awards ("ACIAs") | Cash | •Target payout opportunities based on market data •Applicable performance metrics approved at the beginning of the year •Minimum performance threshold required for any payout, with payouts ranging from 0 to 200% of target | •Comparable EBITDA (a non-GAAP financial measure) is a key annualized measure of operating performance and profitability •Operating revenue (a non-GAAP financial measure) reflects progress against strategic and operational goals •Strategic objectives reflect key components of strategic plan by business division |
Suite of Compensation Metrics
| | | Settled in | Key Factors | Payout Linked to Strategy/Growth | | | Performance-based restricted stock rights ("PBRSRs") | Stock | •Based on market data, level of responsibility, succession potential and desired pay mix •Target grant value established at the start of three-year performance period, and value vests at end of three-year performance period •Minimum performance threshold required for any payout, with payouts ranging from 0 to 200% | •ROE (a non-GAAP financial measure) measures how effectively the Company manages returns, capital efficiency and progress on strategic goals •Strategic revenue growth measures progress against long-term growth goals of more profitable businesses •Free cash flow (a non-GAAP financial measure) measures available cash for debt and dividend payments and for capital investments •TSR modifier measures stock performance against peer group, with no positive modification if actual TSR is negative | | | Time-vested restricted stock rights ("TVRSRs") | Stock | •Based on market data, level of responsibility and desired pay mix •Granted at the start of three-year period, and vests ratably over three years | •Provides link to shareholder experience and supports retention |
2024 Annual Incentive Plan ("AIP") Metrics, Targets and Results
2024 Annual Incentive Plan ("AIP") Metrics, Targets and Results
2024 AIP Metrics
2024 AIP Metrics Our 2024 annual cash incentive awards were designed at the beginning of the year to reflect both Company and division business performance. In structuring our ACIAs, in February 2024, the Committee set target payout opportunities for each executive. For 2024, the target AIP payout opportunity for each of our NEOs was as follows: 170% of base salary for Mr. Sanchez, and 100% of base salary for Messrs. Diez, Sensing, Havens and Fatovic. The 2024 AIP was comprised of the same metrics, and respective weights, as the 2023 AIP. The 2024 AIP strongly emphasized comparable EBITDA and maintained a focus on revenue growth and strategic objectives that align with the Company's overall strategy. Each metric of the 2024 AIP has a payout range of 0% to 200%. The chart below further explains the design of our 2024 AIP for each of our NEOs:
2024 AIP Metrics
| 2024 AIP Metrics | CEO/Corporate(1) | Division Presidents(2) | | RSI Comparable EBITDA | 60% | 30% | | Division Comparable EBITDA(3) | N/A | 30% | | RSI Operating Revenue | 20% | N/A | | Division Operating Revenue(3) | N/A | 20% | | RSI Strategic Objectives | 20% | N/A | | Division Strategic Objectives(3) | N/A | 20% |
2024 AIP Metrics
(1) Represents Messrs. Sanchez (CEO), Diez (former CFO) and Fatovic (CLO/Corporate Secretary). (2) Represents Messrs. Havens (President of FMS) and Sensing (President of SCS/DTS). (3) In the case of Mr. Havens, all division-specific metrics correspond to FMS-related performance. In the case of Mr. Sensing, all division-specific metrics correspond to SCS/DTS-related performance. As shown in the previous chart, the comparable EBITDA metric had a weight of 60%, which further aligns executive compensation with the Company's operating performance, and the operating revenue metric had a weight of 20% in order to continue to incentivize growth. In the case of Messrs. Sanchez, Diez and Fatovic, the comparable EBITDA and operating revenue portions of their AIP incorporate Company-wide performance. In the case of Messrs. Havens (President of FMS) and Sensing (President of SCS/DTS), the comparable EBITDA portion of their AIP incorporates both the Company's and their respective business divisions' performance, and the operating revenue portion exclusively reflects their respective business divisions' performance.
2024 AIP Metrics
| Table of Contents | Ryder System, Inc. | 2025 Proxy Statement | 34 |
2024 AIP Metrics
| | Compensation Discussion and Analysis |
2024 AIP Metrics
The strategic objectives have a weight of 20% in the AIP and require a minimum RSI comparable EBITDA financial performance threshold in order to earn any portion of the strategic objective metric. As shown in the chart below, each of the Company's businesses have strategic objectives tailored to their respective divisions, with the objectives for the centralized corporate group, including the CEO, reflecting a combination of objectives from each business division. To determine the payout of the strategic objectives, the Committee evaluates the outcome of each milestone and holistically determines overall achievement using a multi-point scale to determine a payout percentage between 0% to 200%. No individual strategic objective is weighted or assigned greater significance than another. After determining a payout percentage, the Committee determines the outcome of the strategic objectives.
2024 AIP Metrics
| | 2024 Strategic Objectives (weighted 20% in AIP) | | | | CEO/Corporate(1) | •Includes each of the strategic objectives identified below for FMS, SCS and DTS | Payout Percentage* | Strategic Objectives Outcome | | FMS(2) | •Grow net sales at target ChoiceLease pricing •Improve maintenance costs •Achieve positive overall customer experience score | 200% ↕ 0% | ◦Exceptional ◦Very Successful ◦Successful ◦Inconsistent ◦Unsatisfactory | | SCS(3) | •Grow net sales •Integrate Impact Fulfillment Services acquisition •Achieve positive overall customer experience score | | | | DTS(3) | •Grow net sales •Achieve positive value from flexible dedicated operating model •Integrate Cardinal Logistics acquisition •Achieve positive overall customer experience score | * Actual payout percentages may vary between 0% to 200%. | |
2024 AIP Metrics
| (1) Represents Messrs. Sanchez (CEO), Diez (former CFO) and Fatovic (CLO/Corporate Secretary). | | (2) Represents Mr. Havens (President of FMS). | | (3) Represents Mr. Sensing (President of SCS/DTS). |
2024 AIP Metrics
| 2024 AIP Metrics Definitions | | | Comparable EBITDA* (a non-GAAP financial measure) | Represents net earnings, first adjusted to exclude discontinued operations and the following items, all from continuing operations: (i) non-operating pension costs, net and (ii) any other items that are not representative of our ongoing business operations (these items are the same items that are excluded from comparable earnings measures for the relevant periods as described under comparable earnings measures in our SEC filings), and then adjusted further for (a) interest expense, (b) income taxes, (c) depreciation, (d) used vehicle sales results and (e) amortization. Comparable EBITDA incentivizes management to optimize operations whether the economic cycle is negative or positive and is also more reflective of the Company's operating profitability. While the market prices for used vehicles continue to impact compensation (via the LTIP payouts), the Committee determined that a metric more closely aligned with improved operating performance was valuable in the collective suite of incentive compensation metrics and that the best place for this metric was in the annual incentive plan. | | Operating Revenue* (a non-GAAP financial measure) | Represents total revenue excluding any (i) fuel and (ii) subcontracted transportation. We exclude fuel and subcontracted transportation as these costs are largely pass-through to our customers, thus fluctuations generally minimally impact our profitability. The operating revenue used by the Committee is consistent with the operating revenue reported in Company press releases and public presentations. Operating revenue is intended to measure progress towards strategic and operational goals. | | Strategic Objectives | Represents alignment with the strategic plan and the expectation that attainment of each strategic objective will have occurred in 2024. A minimum threshold of comparable EBITDA financial performance must be achieved in order to payout the strategic objectives. In the case of Messrs. Sanchez, Diez and Fatovic, the strategic objectives reflect initiatives from each business division (FMS, SCS and DTS), and in the case of Messrs. Havens and Sensing, the strategic objectives reflect the strategic goals of their respective business divisions. Please refer to the chart above titled "2024 Strategic Objectives" for further information. |
2024 AIP Metrics
* Comparable EBITDA and operating revenue are non-GAAP financial measures. For a reconciliation of the non-GAAP financial measures to the most comparable GAAP measures, as well as the reasons why these measures are useful to shareholders, refer to the "Non-GAAP Financial Measures" on page 42 of our 2024 Annual Report.
2024 AIP Metrics
| Table of Contents | Ryder System, Inc. | 2025 Proxy Statement | 35 |
2024 AIP Metrics
| | Compensation Discussion and Analysis |
2024 AIP Targets and Results
2024 AIP Targets and Results In 2024, management continued to execute the Company's balanced growth strategy, strengthening the Company's financial and strategic position as a leading provider of outsourced logistics and transportation services. Under the skilled leadership of our management team, during a challenging freight environment, Ryder generated strong financial results, including comparable EBITDA (a non-GAAP financial measure) of $2.8 billion and operating revenue (a non-GAAP financial measure) of $10.3 billion. Upon review of the Company's performance associated with each of the strategic objectives, the Committee determined that the minimum comparable EBITDA performance metric was achieved and that the outcome of the strategic objectives for each of CEO/Corporate, FMS and SCS/DTS was "successful." Ryder's 2024 earnings results reflect strong lease returns from ongoing ChoiceLease pricing initiatives, benefits from our multi-year maintenance initiative, positive feedback from customers on our customer engagement survey, and successful deployment of our flexible dedicated operating model. In addition, we successfully integrated our acquisitions of Impact Fulfillment Services and Cardinal Logistics. These acquisitions further accelerate growth in our asset light businesses which we expect to contribute to long-term shareholder value. The following chart sets forth our 2024 AIP metrics (including targets and actual results) that are used when determining the AIP awards for Messrs. Sanchez, Diez and Fatovic:
2024 AIP Targets and Results
| Performance Metrics(1) (in millions) | 2024 Threshold (50% payout) | 2024 Target (100% payout) | 2024 Maximum (200% payout) | Weight | 2024 Results | 2024 Payout (% of target) | | RSI Comparable EBITDA | $2,633 | $2,926 | $3,014 | 60% | $2,776 | 74% | | RSI Operating Revenue | $9,699 | $10,776 | $11,639 | 20% | $10,266 | 76% | | CEO/Corporate Strategic Objectives | Inconsistent | Successful | Exceptional | 20% | Successful | 100% | | Earned Payout (weighted) | | | | | | 80% |
2024 AIP Targets and Results
| (1) Comparable EBITDA and operating revenue are non-GAAP financial measures. For a reconciliation of the non-GAAP financial measures to the most comparable GAAP measures, as well as the reasons why these measures are useful to shareholders, refer to the "Non-GAAP Financial Measures" on page 42 of our 2024 Annual Report. |
2024 AIP Targets and Results
The following chart sets forth our 2024 AIP metrics (including targets and actual results) that are used when determining the AIP award for Mr. Havens:
2024 AIP Targets and Results
| Performance Metrics(1) (in millions) | 2024 Threshold (50% payout) | 2024 Target (100% payout) | 2024 Maximum (200% payout) | Weight | 2024 Results | 2024 Payout (% of target) | | RSI Comparable EBITDA | $2,633 | $2,926 | $3,014 | 30% | $2,776 | 74% | | FMS Comparable EBITDA | $2,262 | $2,513 | $2,588 | 30% | $2,390 | 76% | | FMS Operating Revenue | $4,826 | $5,362 | $5,630 | 20% | $5,116 | 77% | | FMS Strategic Objectives | Inconsistent | Successful | Exceptional | 20% | Successful | 100% | | Earned Payout (weighted) | | | | | | 80% |
2024 AIP Targets and Results
| (1) Comparable EBITDA and operating revenue are non-GAAP financial measures. For a reconciliation of the non-GAAP financial measures to the most comparable GAAP measures, as well as the reasons why these measures are useful to shareholders, refer to the "Non-GAAP Financial Measures" on page 42 of our 2024 Annual Report. |
2024 AIP Targets and Results
| Table of Contents | Ryder System, Inc. | 2025 Proxy Statement | 36 |
2024 AIP Targets and Results
| | Compensation Discussion and Analysis |
2024 AIP Targets and Results
The following chart sets forth our 2024 AIP metrics (including targets and actual results) that are used when determining the AIP award for Mr. Sensing:
2024 AIP Targets and Results
| Performance Metrics(1) (in millions) | 2024 Threshold (50% payout) | 2024 Target (100% payout) | 2024 Maximum (200% payout) | Weight | 2024 Results | 2024 Payout (% of target) | | RSI Comparable EBITDA | $2,633 | $2,926 | $3,014 | 30% | $2,776 | 74% | | SCS/DTS Comparable EBITDA | $459 | $612 | $673 | 30% | $589 | 92% | | SCS/DTS Operating Revenue | $5,179 | $6,093 | $7,007 | 20% | $5,835 | 86% | | SCS/DTS Strategic Objectives | Inconsistent | Successful | Exceptional | 20% | Successful | 100% | | Earned Payout (weighted) | | | | | | 87% |
2024 AIP Targets and Results
| (1) Comparable EBITDA and operating revenue are non-GAAP financial measures. For a reconciliation of the non-GAAP financial measures to the most comparable GAAP measures, as well as the reasons why these measures are useful to shareholders, refer to the "Non-GAAP Financial Measures" on page 42 of our 2024 Annual Report. |
2024 AIP Earned Amounts for NEOs
2024 AIP Earned Amounts for NEOs The Committee reviews the initial payout calculation for each NEO, using the methodology described above. While the AIP does not include an individual performance metric, the Committee retains discretion to adjust the NEO's actual payout upwards or downwards. In determining whether to make any adjustments, the Committee considers the following qualitative factors as a whole: overall realized pay relative to performance and our goal of furthering the Company's strategic initiatives; internal leadership; business development and achievement of other business goals; risk management; talent development; progress on corporate responsibility goals, including environmental, social and governance matters; financial management; and legal, risk, regulatory and compliance management and results. Given the strong financial results that management achieved in 2024, the Committee determined to pay 2024 annual cash incentive awards consistent with the payout results above for each NEO and did not further adjust any awards. The following chart sets forth the earned 2024 ACIAs for each of our NEOs:
2024 AIP Earned Amounts for NEOs
| Name | Target 2024 Award ($) | Actual 2024 Payout ($) | % of Target | | Robert E. Sanchez | 1,802,000 | 1,439,257 | 80% | | John. J. Diez | 705,000 | 563,084 | 80% | | J. Steven Sensing | 705,000 | 614,831 | 87% | | Thomas M. Havens | 650,000 | 522,470 | 80% | | Robert D. Fatovic | 590,000 | 471,233 | 80% |
2022-2024 LTIP (the "2022 LTIP") Metrics, Award Results and Payouts
2022-2024 LTIP (the "2022 LTIP") Metrics, Award Results and Payouts
2022 LTIP Metrics
2022 LTIP Metrics Our 2022 LTIP awards were comprised of PBRSRs (60%) and TVRSRs (40%). PBRSRs granted to NEOs in 2022 could be earned based on the following performance metrics: (i) ROE (a non-GAAP financial measure), based on a three-year average ROE; (ii) strategic revenue growth, based on attainment of a three-year compounded annual growth rate ("CAGR"); and (iii) free cash flow (a non-GAAP financial measure), based on a three-year average. Each of the performance metrics weigh 33.3% of the PBRSRs, and 20% of the total LTIP, and have payout levels ranging from 0% to 200%. In addition, the 2022 LTIP included a TSR modifier that adjusts PBRSR payouts by up to 15%, either upward or downward, to reflect performance against a custom peer group, as further described below. At the beginning of the 2022-2024 three-year performance period, the Committee set performance targets intended to be attainable and challenging, taking into account the performance metrics that are important to the Company and shareholders as well as the expected economic conditions in markets that we wish to grow.
2022 LTIP Metrics
| Table of Contents | Ryder System, Inc. | 2025 Proxy Statement | 37 |
2022 LTIP Metrics
| | Compensation Discussion and Analysis |
2022 LTIP Metrics
| 2022 LTIP Performance Metrics Calculation Methodology | | | ROE* (a non-GAAP financial measure) | Represents adjusted return on equity, which is calculated by dividing the Company's "adjusted net earnings" by the "adjusted average shareholders' equity" (each as defined below). The Company's adjusted net earnings is defined as net earnings from continuing operations, adjusted to exclude after-tax impact from other items that are not representative of our ongoing business operations. Adjusted average shareholders' equity means the Company's average shareholders' equity, adjusted to exclude the impact from any other items that are not representative of our ongoing business operations. ROE will be calculated at the end of each calendar year and averaged during the performance period. The Company's three-year ROE is determined by the Committee at the end of the performance period against a maximum, target and threshold three-year ROE. The Committee takes into account the Company's business plan when setting the three-year target. If the Company's three-year ROE falls above threshold and between the measuring points, the three-year ROE accrual percentage for the performance period will be determined proportionally between the measuring points. While ROE in any three-year period may be impacted by cyclical freight market conditions, including used vehicle sales results, the Committee believes a direct link to this shareholder metric is appropriate. | | Strategic Revenue Growth | Represents the CAGR or contractual revenue from all business lines, transactional maintenance and all new product revenue (other than FMS revenue from FMS Canada and Europe, as the Company's strategy did not include growth in those markets). The Committee determines 2022-2024 strategic revenue CAGR at the end of the three-year performance period against a maximum, target and threshold three-year strategic revenue CAGR. The Committee considers the Company's business plan when setting the three-year target. If the 2022-2024 CAGR is above threshold and between measuring points, the 2022-2024 CAGR accrual percentage for the performance period will be determined proportionally between the measuring points. The Company believes that the 2022-2024 CAGR target is a rigorous measure of sustained strategic revenue growth. | | Free Cash Flow* (a non-GAAP financial measure) | Represents the sum of (i) net cash provided by operating activities, (ii) net cash provided by the sale of revenue earning equipment, (iii) net cash provided by the sale of operating property and equipment, and (iv) other cash inflows from investing activities, less purchases of property and revenue earning equipment. We believe free cash flow provides investors with an important perspective on the cash available for debt service and for shareholders, after making capital investments required to support ongoing business operations. Free cash flow will be calculated at the end of each calendar year and averaged during the performance period. The Company's three-year free cash flow is determined by the Committee at the end of the performance period against a maximum, target and threshold three-year free cash flow. | | TSR | Represents total shareholder return based on the Company's TSR relative to the TSR of the companies in our custom peer group. TSR is calculated based on the percentage change in a Company's stock price from the average closing price of the last ten trading days (prior to the beginning of the relevant performance period) to the average closing price of the last ten trading days (prior to the end of the relevant performance period), assuming reinvestment of dividends. The custom peer group for the 2022 LTIP consists of 26 companies: Ryder, the 13 companies in Ryder's 2022 Compensation Peer Group, and the 12 additional related companies that operate in the markets in which we compete and that are viewed as competitors for capital by investors. At the end of the three-year performance period, the companies in the custom peer group will be sorted by TSR performance, and the 25th, 50th and 75th percentiles of the custom peer group are calculated. Ryder's TSR performance is compared to the TSR of the companies in the custom peer group. The number of accrued PBRSRs will then be adjusted upward or downward by a percentage based on the TSR relative percentile rank as shown below; provided, however, that (i) in no event will the TSR modifier adjustment result in payout of more than 200% of the target PBRSRs, and (ii) even if the Company's TSR rank is above the 50th percentile, no positive TSR modifier will be applied if the Company's absolute TSR is negative. |
2022 LTIP Metrics
* ROE and free cash flow are non-GAAP financial measures. For a reconciliation of the non-GAAP financial measures to the most comparable GAAP measures, as well as the reasons why management believes these measures are useful to shareholders, refer to "Non-GAAP Financial Measures" on page 42 and "Financial Resources and Liquidity" on page 34 of our 2024 Annual Report.
2022 LTIP Award Results and Payouts
2022 LTIP Award Results and Payouts The three-year performance period for our 2022 LTIP awards ended on December 31, 2024, and the Committee assessed performance in the first quarter of 2025. Over the course of the three-year performance period, despite a challenging freight environment in 2023 and 2024, the Company delivered strong financial results. The table on the next page summarizes performance for the PBRSRs for the 2022-2024 completed performance period.
2022 LTIP Award Results and Payouts
| Table of Contents | Ryder System, Inc. | 2025 Proxy Statement | 38 |
2022 LTIP Award Results and Payouts
| | Compensation Discussion and Analysis |
2022 LTIP Award Results and Payouts
| PBRSRs | | | | | | | ROE (33.3%) | Payout Range | | ROE Range | ROE Results | Payout Percentage | | 3-year average | Threshold | 25% | 11% | 21.5% | 200% | | | Target | 100% | 15% | | | | | Maximum | 200% | 18% | | | | Strategic Revenue Growth (33.3%) | Payout Range | | Strategic Revenue Growth Range | CAGR Results | Payout Percentage | | 3-year CAGR | Threshold | 25% | 3% | 13.1% | 200% | | | Target | 100% | 6% | | | | | Maximum | 200% | 9.5% | | | | Free Cash Flow (33.3%) | Payout Range | | Free Cash Flow Range | Free Cash Flow Results | Payout Percentage | | 3-year average | Threshold | 25% | ($750M) | $333.4M | 197% | | | Target | 100% | ($250M) | | | | | Maximum | 200% | $350M | | | | TSR Modifier (+/- 15%) | Modifier Range | Ryder Relative TSR Percentile Rank to Peer Companies | | Quartile | Modifier Adjustment | | Jan 2022 - Dec 2024 | 15% | At and above 75th percentile | | 1st Quartile | 15% | | | 5% | At and between 50th and 75th percentile | | | | | | (5)% | Between 50th and 25th percentile | | | | | | (15)% | Below 25th percentile | | | | | Overall PBRSR Payout(1) | | | | | 200% | | (1) Overall PBRSR payout slightly impacted by TSR modifier to bring results to 200%. | | | | | |
2024-2026 LTIP Grants (the "2024 LTIP")
2024-2026 LTIP Grants (the "2024 LTIP") The Committee determined to use the same metrics and respective weights for the 2024 LTIP awards as those used for the 2023 LTIP awards: PBRSRs (60%) and TVRSRs (40%). The 2024 LTIP emphasizes a direct linkage to the shareholder experience and profitable three-year growth, and uses distinct metrics from those in the 2024 AIP. To determine the 2024 LTIP target values for each of our NEOs, the Committee considered a variety of factors, including overall compensation relative to peers and market benchmarks, as well as the NEO's role, performance, long-term potential and retention risk. The 2024 LTIP target values and allocation between PBRSRs and TVRSRs for each NEO are as follows:
2024-2026 LTIP Grants (the "2024 LTIP")
| NEO | 2024 LTIP Target Value ($) | PBRSRs(1) (60% of LTIP value) ($) | TVRSRs (2) (40% of LTIP value) ($) | | Robert E. Sanchez | 6,500,000 | 3,899,979 | 2,599,947 | | John J. Diez | 2,300,000 | 1,379,908 | 919,978 | | J. Steven Sensing | 2,200,000 | 1,319,942 | 879,923 | | Thomas M. Havens | 2,200,000 | 1,319,942 | 879,923 | | Robert D. Fatovic | 1,300,000 | 779,902 | 519,896 |
2024-2026 LTIP Grants (the "2024 LTIP")
| (1) The number of PBRSRs granted in 2024 for each of the NEOs is as follows: Mr. Sanchez, 33,299; Mr. Diez, 11,782; Mr. Sensing, 11,270; Mr. Havens, 11,270; and Mr. Fatovic, 6,659. | | (2) The number of TVRSRs granted in 2024 for each of the NEOs is as follows: Mr. Sanchez, 22,199; Mr. Diez, 7,855; Mr. Sensing, 7,513; Mr. Havens, 7,513; and Mr. Fatovic, 4,439. |
2024-2026 LTIP Grants (the "2024 LTIP")
| Table of Contents | Ryder System, Inc. | 2025 Proxy Statement | 39 |
2024-2026 LTIP Grants (the "2024 LTIP")
| | Compensation Discussion and Analysis |
2024-2026 LTIP Grants (the "2024 LTIP")
PBRSRs. PBRSRs granted in 2024 vest at the end of a three-year performance period in 2026 and are earned based on the following performance metrics: (i) ROE (a non-GAAP financial measure), based on a three-year-average ROE target; (ii) strategic revenue growth, based on attainment of a three-year CAGR; and (iii) free cash flow (a non-GAAP financial measure), based on a three-year average. Each of the performance metrics weigh 33.3% of the PBRSRs, and 20% of the total LTIP, and have payout levels ranging from 0% to 200% of target. Each metric and its corresponding targets was determined at the start of the three-year period, and achievement will be measured at the end of the three-year period. In addition, the LTIP continues to include a TSR modifier that will impact the PBRSR payouts by up to 15%, positively or negatively, depending on Ryder's TSR relative to the TSR of a custom peer group. Even if Ryder's relative TSR is above the median, no positive TSR modifier will be applied if Ryder's absolute TSR is negative. In addition, the TSR modifier cannot increase the total payout of PBRSRs beyond 200%. The Committee has the discretion to adjust the results for these metrics to ensure that they properly reflect the achievement of participants in our LTIP during the performance period and are not impacted, positively or negatively, by factors that may be unanticipated, non-recurring or non-operational in nature. Dividend equivalents accrue on PBRSRs during the vesting period and are paid upon vesting. TVRSRs. TVRSRs under the LTIP vest in three equal, annual installments, subject to the NEO's continued employment, and are denominated and settled in stock. Dividend equivalents accrue on TVRSRs during the vesting period and are paid upon vesting. The Committee believes that our LTIP design creates significant and direct shareholder linkage. Both the PBRSRs and the TVRSRs have a direct link to the share price. For the PBRSRs, the ROE metric directly incents improving returns on shareholders' equity, and the relative TSR modifier further links payouts to relative stock price. The other PBRSR performance metrics of strategic revenue growth and free cash flow incent the profitable growth that we believe is necessary to drive increasing shareholder value over time.
2024-2026 LTIP Grants (the "2024 LTIP")
| 2024 LTIP Performance Metrics Calculation Methodology | | | ROE (a non-GAAP financial measure) | Has the meaning ascribed to it on page 38. | | Strategic Revenue Growth | Has the meaning ascribed to it on page 38, but for the applicable 2024-2026 performance period. | | Free Cash Flow (a non-GAAP financial measure) | Has the meaning ascribed to it on page 38. | | TSR | Has the meaning ascribed to it on page 38. |
2024-2026 LTIP Grants (the "2024 LTIP")
| Ryder TSR Relative Percentile Rank to Peer Companies | TSR Modifier | | At and above 75th percentile | +15% | | At 50th percentile and between 50th and 75th percentile | +5% | | At 25th percentile and between 25th and 50th percentile | -5% | | Below 25th percentile | -15% |
2024-2026 LTIP Grants (the "2024 LTIP")
| Table of Contents | Ryder System, Inc. | 2025 Proxy Statement | 40 |
2024-2026 LTIP Grants (the "2024 LTIP")
| | Compensation Discussion and Analysis |
Peer Group
Peer Group The Committee references two groups of companies when establishing executive compensation: the Compensation Peer Group and the Additional Performance Peer Companies (together, the "2024 Relative TSR Group"). •The Compensation Peer Group is a group of 13 companies of similar size and who are in similar industries. The pay of the NEOs at these companies serves as a reference point for determining target pay levels for our NEOs. •The Additional Performance Peer Companies includes a number of companies who are too large to serve as compensation peers for our NEOs, but whose stock price performance is a relevant benchmark for ours because they operate in markets in which we compete and are viewed as competitors for capital by investors.
Peer Group
| 2024 Relative TSR Group | | | | | Compensation Peer Group | | Additional Performance Peer Companies | | | 1. | Avis Budget Group, Inc. | 1. | U-Haul Holding Company | | 2. | C. H. Robinson Worldwide, Inc. | 2. | Arc Best Corporation (Arkansas Best Corporation) | | 3. | CSX Corporation | 3. | FedEx Corporation | | 4. | Expeditors International of Washington, Inc. | 4. | Forward Air Corporation | | 5. | GXO Logistics | 5. | GATX Corporation | | 6. | Hub Group, Inc. | 6. | PACCAR International | | 7. | J.B. Hunt Transport Services Inc. | 7. | Rush Enterprises, Inc. | | 8. | Knight-Swift Transportation Holdings Inc. | 8. | Saia, Inc. | | 9. | Landstar System, Inc. | 9. | Trinity Industries, Inc. | | 10. | Old Dominion Freight Line, Inc. | 10. | United Parcel Service, Inc. | | 11. | Schneider National, Inc. | 11. | Universal Logistics Holdings, Inc. | | 12. | United Rentals, Inc. | 12. | Werner Enterprises, Inc. | | 13. | XPO Logistics, Inc. | | |
Executive Compensation Governance Practices
| What We Do | | | ✓ | Directly link pay with company performance – 89% of the CEO's total target direct compensation is "at risk" | | ✓ | Use discretion to align appropriate payouts to Company and individual performance | | ✓ | Use double-trigger change of control provisions for awards | | ✓ | Provide competitive severance and change in control amounts to ensure that NEOs act in the best interest of shareholders, rather than avoiding transactions that could result in termination of employment | | ✓ | Use three-year performance periods and targets for long-term performance metrics | | ✓ | Engage an independent compensation consultant | | ✓ | Regularly benchmark executive compensation against an appropriate peer group | | ✓ | Maintain robust stock ownership requirements | | ✓ | Subject performance-based incentive awards and severance payments to clawback policies | | ✓ | Grant majority of pay in performance-based compensation that is not guaranteed | | ✓ | Engage in a robust target-setting process for incentive metrics | | ✓ | Provide caps for incentive compensation | | What We Don't Do | | | ✗ | Provide employment agreements | | ✗ | Provide tax gross-ups related to a change of control | | ✗ | Provide excessive perquisites | | ✗ | Reprice underwater stock options or shareholder appreciation rights without shareholder approval | | ✗ | Pay dividends or dividend equivalents on unvested PBRSRs or TVRSRs | | ✗ | Permit hedging transactions | | ✗ | Permit pledging activity or use of margin accounts by executives or directors |
Other Compensation Information
Use of Benchmarking. The Committee compares our executive compensation program to that of our peers to help analyze its structure, the payout levels for executives, and to review our program's effectiveness in attracting and retaining talent. In evaluating each element of our executive compensation program, the Committee uses benchmark comparisons to peer groups and, particularly when appropriate peer group data is unavailable, to general industry survey data. While there are no public companies that provide the same mix of services as Ryder, the Committee references the Compensation Peer Group, which is a group of companies of similar size, that operate in similar industries, and which compete with Ryder for executive talent. The Committee does not design our executive compensation programs to fit within a specific percentile of the executive compensation programs of other companies comprising any particular peer group or survey. The Committee does consider the median compensation of similar executives at the peer companies, both for each compensation component and the total compensation package, as a reference in making compensation decisions. For a list of the companies comprising the 2024 Compensation Peer Group, please refer to page 41 of this proxy statement. Shareholder Feedback. The feedback we receive through our annual shareholder outreach program and our advisory votes on executive compensation ("Say-on-Pay") enhances our understanding of our shareholders' views. Our Board and senior management remain committed to transparent communication and engagement with our shareholders and take feedback into consideration when evaluating our compensation program design. We have ongoing conversations with many of our largest shareholders. Each year we reach out to our top shareholders, constituting at least a majority of our shares outstanding, to solicit feedback on various topics, including corporate governance practices and executive compensation, among others. During our 2024 engagement, shareholders expressed support for our compensation program. In addition to ongoing conversations and formal annual engagement, the Committee also considers the voting outcome of our Say-on-Pay proposals. Over the last three years, our Say-on-Pay proposals received strong support from our shareholders, with last year's proposal receiving over 95% support. The Committee believes the 2024 voting results reflect our shareholders' support of our overall executive compensation program. The Committee values the opinions of our shareholders and will continue to consider shareholder feedback and the outcomes of future Say-on-Pay votes when designing compensation programs and making compensation decisions for our NEOs. We currently hold a Say-on-Pay vote every year.
Other Compensation Information
| SEVERANCE AND CHANGE OF CONTROL |
Other Compensation Information
All of our NEOs are eligible for certain severance benefits under individual severance agreements. These arrangements are described in more detail under the heading "Potential Payments Upon Termination or Change of Control" on page 51. Severance arrangements are intended to ensure that NEOs will act in the best interests of shareholders rather than avoiding transactions that could result in termination of employment. These arrangements also include certain restrictive covenants designed to prevent our NEOs from seeking employment with our competitors after termination or soliciting our employees or customers during the restricted period. Change of control arrangements are included in the severance agreements and are designed to preserve productivity, avoid disruption and prevent attrition during an actual or rumored change of control transaction.
Other Compensation Information
The Board of Directors has adopted a recoupment policy in accordance with the SEC's rules to implement Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the "Executive Recoupment Policy"). Under the Executive Recoupment Policy, the Board of Directors must seek the recoupment or forfeiture of any erroneously awarded incentive-based compensation received by the Company's Section 16 officers in the event of a required accounting restatement of the Company's financial results. The Board of Directors has also adopted a recoupment policy pursuant to which the Compensation Committee may seek the recoupment or forfeiture of any erroneously awarded incentive-based compensation received by the Company's current or former officers, other than Section 16 officers, who engaged in fraud or other misconduct resulting in a required accounting restatement of the Company's financial results (the "Non-Executive Recoupment Policy," collectively with the Executive Recoupment Policy, the "Recoupment Policies"). The Recoupment Policies apply to all incentive-based compensation received by a covered officer during the three completed fiscal years immediately preceding the date that the Company is required to prepare an accounting restatement. In addition, under the terms of each NEO's severance agreement, the Company has the right to require the NEO to repay the full value of any severance payments received under certain scenarios, including if the Company subsequently discovers information that would have permitted the Company to terminate the NEO for Cause, as described under the heading "Potential Payments Upon Termination or Change of Control" on page 51.
Other Compensation Information
| SUMMARY COMPENSATION TABLE |
Other Compensation Information
| Name | Principal Position | Year | Salary ($) | Stock Awards(1) ($) | Non-Equity Incentive Plan Compensation(2) ($) | Change in Pension Value and Non qualified Deferred Compensation Earnings(3) ($) | All Other Compensation(4) ($) | Total ($) | | Robert E. Sanchez | Board Chair and CEO | 2024 | 1,060,001 | 6,632,456 | 1,439,257 | — | 152,094 | 9,283,808 | | | | 2023 | 1,030,001 | 6,179,815 | 1,667,652 | 81,250 | 247,264 | 9,205,982 | | | | 2022 | 1,000,000 | 5,330,950 | 3,145,000 | — | 290,003 | 9,765,953 | | John J. Diez | Executive Vice President and CFO(5) | 2024 | 705,001 | 2,346,779 | 563,084 | — | 101,801 | 3,716,665 | | | | 2023 | 683,001 | 2,574,922 | 650,489 | 15,495 | 132,230 | 4,056,137 | | | | 2022 | 663,000 | 2,152,795 | 1,226,550 | — | 175,747 | 4,218,092 | | J. Steven Sensing | President, Supply Chain Solutions and Dedicated Transportation Solutions | 2024 | 705,002 | 2,244,721 | 614,831 | — | 105,477 | 3,670,031 | | | | 2023 | 683,001 | 2,162,838 | 655,475 | 30,035 | 122,511 | 3,653,860 | | | | 2022 | 663,000 | 2,050,341 | 1,220,915 | — | 140,484 | 4,074,740 | | Thomas M. Havens | President, Fleet Management Solutions | 2024 | 650,000 | 2,244,721 | 522,470 | — | 98,904 | 3,516,095 | | | | 2023 | 630,001 | 1,853,844 | 618,219 | 26,727 | 126,315 | 3,255,106 | | | | 2022 | 600,001 | 1,537,699 | 1,137,360 | — | 151,603 | 3,426,663 | | Robert D. Fatovic | Executive Vice President, CLO and Corporate Secretary | 2024 | 590,001 | 1,326,301 | 471,233 | — | 93,661 | 2,481,196 | | | | 2023 | 568,000 | 1,647,854 | 540,963 | 69,751 | 117,387 | 2,943,955 | | | | 2022 | 551,000 | 1,230,113 | 1,019,350 | — | 103,332 | 2,903,795 |
Other Compensation Information
| (a) | As described under "Pension Benefits" on page 49 of this proxy statement, our NEOs are not accruing benefits under the Pension Plans and instead receive employer contributions into their 401(k) Plan and DCP accounts. Since 2016, a portion of the employer contribution to the 401(k) Plan and the DCP are made in a lump sum after the end of the calendar year to which the contribution relates. The amounts presented reflect contributions made by the Company to the 401(k) Plan and the DCP during the calendar year reported. | | (b) | NEOs are eligible to participate in our Matching Gifts to Education Program, which is available to all employees. As a member of our Board, Mr. Sanchez is eligible to participate in the program limited to a maximum benefit of $10,000 per year. See "Director Compensation" on page 57 of this proxy statement. NEOs other than the CEO are eligible to participate in the program limited to a maximum benefit of $1,000 per year. | | (c) | As described under "Perquisites" on page 44 of this proxy statement, amounts include an annual car allowance and annual perquisite allowance. The value in this column reflects the aggregate incremental cost to Ryder for providing each perquisite to the NEO. | | (5) Mr. Diez was appointed President and COO, effective January 1, 2025. | |
Other Compensation Information
| 2024 GRANTS OF PLAN-BASED AWARDS |
Other Compensation Information
| OUTSTANDING EQUITY AWARDS AS OF DECEMBER 31, 2024 |
Other Compensation Information
| 2024 OPTION EXERCISES AND STOCK VESTED |
Other Compensation Information
| PENSION BENEFITS |
Other Compensation Information
We maintain legacy Pension Plans for regular full-time employees other than those employees who are covered by plans administered by labor unions and certain other non-exempt employees. Effective December 31, 2007, the Pension Plans were frozen for all plan participants other than those who were eligible to continue to participate (based on age and tenure) and elected to do so. As a result, for those employees who were not eligible, or did not elect, to continue to participate, benefits ceased accruing as of such date. All retirement benefits earned and accrued as of December 31, 2007 are fully preserved, continue to be subject to the applicable vesting schedule, and will be paid in accordance with the plans and applicable legal requirements. No employees hired or rehired after January 1, 2007 are eligible to participate in the Pension Plans. Effective January 1, 2008, employees who were no longer eligible to continue to earn benefits in the Retirement Plan were automatically transitioned to an enhanced 401(k) plan and a non-elective deferred compensation plan (if eligible) for their retirement benefits. Effective December 31, 2020, the Pension Plans were frozen for all plan participants who were eligible to continue to participate effective December 31, 2007 (based on age and tenure) and elected to do so, except pursuant to certain collective bargaining agreements. The 401(k) Plan provides that all salaried and certain hourly employees hired or rehired prior to January 1, 2016 will receive: (i) a Company contribution equal to 3% of eligible pay, subject to a vesting schedule; and (ii) a 50% Company match of employee contributions of up to 5% of eligible pay, subject in each case to Internal Revenue Service ("IRS") limits. Employees hired or rehired on or after January 1, 2016 will receive a 50% Company match of employee contributions of up to 6% of eligible pay, subject to IRS limits. Our DCP provides for Company contributions in excess of the applicable IRS limitations under the 401(k) Plan. Employees eligible for Ryder contribution enhancements in the 401(k) Plan are also eligible for the enhancements in the DCP, provided they meet the eligibility requirements under the DCP. Based on their age and tenure with Ryder, Messrs. Sanchez, Diez, Sensing, Havens and Fatovic did not meet the eligibility requirements to continue accruing benefits under the Pension Plans, and, as such, their pension benefits were frozen and each is now entitled to the enhanced benefits under the 401(k) Plan and DCP. Benefits payable under the Retirement Plan are based on an employee's career earnings with us and our subsidiaries. At the normal retirement age of 65, a participant is entitled to a monthly pension benefit payable for life. The annual pension benefit, when paid in the form of a life annuity with no survivor's benefits, is generally equal to the sum of 1.45% of the first $15,600 of total compensation received during each calendar year that the employee is eligible to participate in the plan, plus 1.85% of the excess over $15,600. Elements of compensation considered in applying the payment and benefits formula include, to the extent applicable: eligible salary, annual cash incentive award, overtime, vacation and commission. Retirement Plan benefits vest at the earlier of the completion of five years of credited service or upon reaching age 65. If a participant is over age 55 and has more than ten years of continuous credited service, the participant is eligible to retire with an unreduced benefit at age 62. As of December 31, 2024, Messrs. Sanchez, Sensing, Havens and Fatovic are eligible for an unreduced retirement benefit. In the event of a change of control, all participants will be fully vested, and the term "accrued benefit" will include the value of early retirement benefits for any participant age 45 or older or with ten or more years of service. These benefits are not subject to any reduction for Social Security benefits or other offset amounts. An employee's pension benefits may be paid in certain alternative forms having actuarially equivalent values.
Other Compensation Information
| Table of Contents | Ryder System, Inc. | 2025 Proxy Statement | 49 |
Other Compensation Information
| | Executive Compensation |
Other Compensation Information
The Benefit Restoration Plan pays participants whose benefits are reduced due to IRS maximum annual limitations on benefits under pension plans an amount equaling the additional amount of benefit the participant would be entitled to receive under the Benefit Restoration Plan without such limitation. The following table sets forth the present value of the accumulated benefits for the NEOs assuming they retire at the unreduced early retirement age of 62 and have ten years of continuous service, and using interest rate and mortality rate assumptions consistent with those used in our financial statements. For information regarding interest rate and mortality rate assumptions, see the section entitled "Employee Benefit Plans" in Note 19 to our consolidated financial statements, included in our 2024 Annual Report. None of our NEOs received any payments under the Pension Plans in 2024.
Other Compensation Information
| Name | Plan Name | Number of Years Credited Service (#) | Present Value of Accumulated Benefit ($) | | Robert E. Sanchez | Retirement Plan (Frozen) | 32 | 431,571 | | | Benefit Restoration Plan (Frozen) | 32 | 401,852 | | John J. Diez | Retirement Plan (Frozen) | 23 | 126,070 | | | Benefit Restoration Plan (Frozen) | 23 | 6,727 | | J. Steven Sensing | Retirement Plan (Frozen) | 32 | 279,549 | | | Benefit Restoration Plan (Frozen) | 32 | 8,662 | | Thomas M. Havens | Retirement Plan (Frozen) | 31 | 229,771 | | | Benefit Restoration Plan (Frozen) | 31 | 14,949 | | Robert D. Fatovic | Retirement Plan (Frozen) | 30 | 382,918 | | | Benefit Restoration Plan (Frozen) | 30 | 343,348 |
Other Compensation Information
| 2024 NONQUALIFIED DEFERRED COMPENSATION |
Other Compensation Information
| POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL |
Estimated Severance and Change of Control Severance Benefits as of December 31, 2024
| PAY VERSUS PERFORMANCE |
Pay Versus Performance Table
Pay Versus Performance Table
Pay Versus Performance Table
| Year | SCT Total for PEO | Compensation Actually Paid to PEO(1)(3) | Average SCT Total for non-PEO NEOs | Average Compensation Actually Paid to non-PEO NEOs(2)(3) | Value of Initial Fixed $100 on Dec. 31, 2019 Investment Based on: | | Net Income (in millions) | Comparable EBITDA(6) (in millions) | | | | | | | TSR(4) | Peer Group TSR(5) | | | | | ($) | ($) | ($) | ($) | | | ($) | ($) | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | | 2024 | 9,283,808 | 23,502,337 | 3,345,997 | 7,889,135 | 341 | 156 | 489 | 2,776 | | 2023 | 9,205,982 | 20,550,114 | 3,477,265 | 7,287,519 | 245 | 154 | 406 | 2,665 | | 2022 | 9,765,953 | 14,994,241(7) | 3,655,823 | 5,320,731(7) | 173 | 128 | 867 | 2,722 | | 2021 | 8,817,637 | 24,319,077(7) | 2,963,796 | 4,139,462(7) | 166 | 155 | 519 | 2,433 | | 2020 | 8,106,836 | 15,576,769(7) | 3,412,518 | 5,992,549(7) | 120 | 117 | (122) | 2,258 |
Pay Versus Performance Table
(1) The PEO in all five reporting years was Mr. Sanchez, our Board Chair and CEO. The table below shows the additions and deductions to calculate Compensation Actually Paid for our PEO in each fiscal year:
Pay Versus Performance Table
| Year | Reported SCT Total for PEO | Value of Stock Awards from SCT | Reported Change in Pension Value and Nonqualified Deferred Compensation Earnings from SCT | Equity Award Adjustments | | | | | Compensation Actually Paid to PEO | | | | | | Year-End Fair Value of Equity Awards Granted in the Applicable Year that are Unvested as of the end of the Applicable Year | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that are Unvested in the Year | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | Deduction of Fair Value of Awards Granted during Prior Years that were Forfeited during Applicable Year | Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation | | | | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | | 2024 | 9,283,808 | (6,632,456) | — | 12,993,178 | 3,821,584 | 3,292,616 | — | 743,607 | 23,502,337 | | 2023 | 9,205,982 | (6,179,815) | (81,250) | 10,061,977 | 3,835,489 | 2,972,998 | — | 734,733 | 20,550,114 | | 2022 | 9,765,953 | (5,330,950) | — | 9,499,134 | 389,705(7) | (299,238)(7) | — | 969,637(7) | 14,994,241(7) | | 2021 | 8,817,637 | (4,696,570) | — | 9,282,482(7) | 5,147,217(7) | 4,626,892(7) | — | 1,141,419(7) | 24,319,077(7) | | 2020 | 8,106,836 | (4,299,705) | (150,916) | 12,967,771(7) | (613,221)(7) | (785,657)(7) | — | 351,661(7) | 15,576,769(7) |
Pay Versus Performance Table
(2) The non-PEO NEOs reflected in columns (d) and (e) represent the following individuals: Messrs. Diez, Sensing, Havens and Fatovic in 2024, 2023 and 2022; Messrs. Diez, Parker, Sensing, Havens and Fatovic in 2021; and Messrs. Diez, Parker, Sensing and Fatovic in 2020. The table below shows the additions and deductions to calculate the average Compensation Actually Paid to our non-PEO NEOs in each fiscal year:
Pay Versus Performance Table
| Year | Reported Average SCT Total for non-PEO NEOs | Average Value of Stock Award from SCT | Average Reported Change in Pension Value and Nonqualified Deferred Compensation Earnings from SCT | Average Equity Award Adjustments | | | | | Average Compensation Actually Paid to non-PEO NEOs | | | | | | Year-End Fair Value of Equity Awards Granted in the Applicable Year that are Unvested as of the end of the Applicable Year | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that are Unvested in the Year | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | Deduction of Fair Value of Awards Granted during Prior Years that were Forfeited during Applicable Year | Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation | | | | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | | 2024 | 3,345,997 | (2,040,631) | — | 3,997,644 | 1,271,297 | 1,074,878 | — | 239,950 | 7,889,135 | | 2023 | 3,477,265 | (2,059,865) | (35,502) | 3,353,924 | 1,241,006 | 1,061,797 | — | 248,894 | 7,287,519 | | 2022 | 3,655,823 | (1,742,737) | — | 3,105,337 | 123,317(7) | (97,502)(7) | — | 276,493(7) | 5,320,731(7) | | 2021 | 2,963,796 | (1,580,708) | — | 2,173,633(7) | 1,056,635(7) | 729,398(7) | (1,422,825)(7) | 219,533(7) | 4,139,462(7) | | 2020 | 3,412,518 | (1,593,623) | (55,462) | 4,418,770(7) | 29,617(7) | (365,597)(7) | — | 146,326(7) | 5,992,549(7) |
Pay Versus Performance Table
(3) For performance share awards, the grant date fair value of awards used for SCT calculations assumes target performance. To determine the year-end fair values used in the Compensation Actually Paid calculations, we have updated the performance expectations to reflect the latest performance estimates for unvested and outstanding awards at each fiscal year-end date. For option awards, updated market input assumptions (stock price, risk free interest rate, volatility, expected term and future dividend yield expectations) have been used to determine the fair values of outstanding awards as of the identified vesting dates and the relevant fiscal year-end dates using the Black-Scholes-Merton option pricing model. (4) Calculated in the same manner, with the same peer group, as required under Item 201(e) of Regulation S-K, measuring the period from the market close on the last trading day before the earliest fiscal year in the table through and including the end of the fiscal year for which cumulative TSR is calculated.
Pay Versus Performance Table
| Table of Contents | Ryder System, Inc. | 2025 Proxy Statement | 54 |
Pay Versus Performance Table
| | Executive Compensation |
Pay Versus Performance Table
(5) Amount is calculated using the market capitalization of each company in the Peer Group TSR, at the beginning of each requisite period. The Peer Group TSR represents the Dow Jones Transportation 20 Index as presented in "Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities" on page 22 of our 2024 Annual Report. (6) Comparable EBITDA, a non-GAAP financial measure, is defined as net earnings, first adjusted to exclude discontinued operations and the following items, all from continuing operations: (i) non-operating pension costs, net, and (ii) any other items that are not representative of our business operations (these are the same items that are excluded from comparable earnings measures for the relevant periods), and then adjusted further for (a) interest expense, (b) income taxes, (c) depreciation, (d) used vehicle sales results and (e) amortization. The comparable EBITDA amount shown in the table reflects Company-wide results. In 2023, for compensation purposes, the Committee determined to exclude (i) the higher than expected comparable EBITDA benefit from an asset impairment charge related to a customer bankruptcy from the comparable EBITDA results of RSI and SCS, and (ii) the acquisition of IFS Holdings, LLC (acquired in November 2023 for approximately $255 million) from the comparable EBITDA and operating revenue results of RSI and SCS. As such, the total amount of comparable EBITDA used for 2023 compensation purposes was $2,645 billion. In 2021, for compensation purposes, the Committee determined to exclude the acquisition of Midwest Warehouse & Distribution System (acquired in November 2021 for approximately $284 million) from comparable EBITDA 2021 results. As such, the total amount of comparable EBITDA used for 2021 compensation purposes was $2,429 billion. For a reconciliation of the non-GAAP financial measure to the most comparable GAAP measure, as well as the reasons why management believes the measure is useful to shareholders, refer to the "Non-GAAP Financial Measures" on page 42 of our 2024 Annual Report. (7) Reflects amended amounts correcting an error in the Company's annual proxy statement for the fiscal year ended December 31, 2022, filed with the SEC on March 15, 2023, which overstated (for fiscal years 2022 and 2020) and understated (for fiscal year 2021) the underlying amount used for the fair value of equity awards that were granted. The amounts previously reported in the Pay Versus Performance table above, as well as the corresponding tables showing the additions and deductions used to calculate Compensation Actually Paid to PEO and Average Compensation Actually Paid to non-PEO NEOs, have been corrected to reflect the following: •For the "Compensation Actually Paid to PEO" column that appears in the Pay Versus Performance table and the corresponding table showing the additions and deductions used to calculate Compensation Actually Paid to PEO: the amended amounts are $14,994,241, $24,319,077 and $15,576,769, in 2022, 2021 and 2020, respectively, compared to $16,096,527, $22,693,300 and $16,422,956, in 2022, 2021 and 2020, respectively, that were reported in the Company's annual proxy statement for the fiscal year ended December 31, 2022. •For the "Average Compensation Actually Paid to non-PEO NEOs" column that appears in the Pay Versus Performance table and the corresponding table showing the additions and deductions used to calculate Average Compensation Actually Paid to non-PEO NEOs: the amended amounts are $5,320,731, $4,139,462 and $5,992,549, in 2022, 2021 and 2020, respectively, compared to $5,569,923, $3,806,715 and $6,209,380, in 2022, 2021 and 2020, respectively, that were reported in the Company's annual proxy statement for the fiscal year ended December 31, 2022. Financial Performance Measures. In accordance with the Pay Versus Performance Rules, the following table lists the most important financial performance measures used in 2024 to link "compensation actually paid" to PEO and non-PEO NEOs to Company performance, as further described in our Compensation Discussion & Analysis on the pages noted below.
Pay Versus Performance Table
| Financial Performance Measures | Page | | ROE | 38 | | Free Cash Flow | 38 | | Strategic Revenue Growth | 38 | | Comparable EBITDA | 35 |
Pay Versus Performance Table
Relationship Between "Compensation Actually Paid" and Financial Performance Measures. The charts below show the relationship between "compensation actually paid" to PEO and non-PEO NEOs with Company and Peer Group TSR, and with Net Income and Comparable EBITDA, as reported in the Pay Versus Performance table above for fiscal years 2020 to 2024.
Pay Versus Performance Table
| |
Pay Versus Performance Table
| Table of Contents | Ryder System, Inc. | 2025 Proxy Statement | 55 |
Pay Versus Performance Table
| | Executive Compensation |
Pay Versus Performance Table
| PAY RATIO |
Pay Versus Performance Table
As required by Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of our employees to that of Robert E. Sanchez, our Board Chair and CEO. The 2024 annual total compensation of the median employee identified by the Company (as described below) was $55,208, and the 2024 annual total compensation of our CEO (as described on page 46 in the SCT) was $9,283,808. Based on this information, for 2024, the ratio of the annual total compensation of our CEO to the median annual total compensation of all employees was 168 to 1. To identify the median employee, we began with our employee population (comprising both full-time and part-time employees) as of December 31, 2024, which consisted of 51,084 individuals (excluding our CEO), with 86% of employees located in the United States and 14% located outside of the United States. For information on our employee population, refer to Item 1, Business, in our 2024 Annual Report. We then identified the median employee using total cash compensation for this population for the 12-month period ending December 31, 2024, comprising (1) base pay; (2) actual annual bonus; (3) commissions; and (4) other cash payments, including car allowance, perquisites, tuition reimbursement and an executive allowance, as applicable. We did not annualize compensation for any employee, including employees that were not employed by us for all of 2024. After identifying the median employee as a full-time, salaried employee located in the United States, we calculated this employee's 2024 annual total compensation based on the SCT rules used for our NEOs.
Pay Versus Performance Table
| Table of Contents | Ryder System, Inc. | 2025 Proxy Statement | 56 |
Pay Versus Performance Table
| | Director Compensation |
Pay Versus Performance Table
| DIRECTOR COMPENSATION |
Description of Director Compensation Program
Description of Director Compensation Program The key objectives of our director compensation program are to attract and retain high-quality board members and to align their interests with the long-term interests of our shareholders. Directors who are employees receive no compensation or benefits for service on the Board other than the right to participate in our Matching Gifts to Education Program at the Board level.
Description of Director Compensation Program
| Our non-employee directors received the following compensation during 2024: | | | • | An annual Board retainer of $115,000, paid in four installments in January, April, July and October; | | • | An annual grant of $180,000 in restricted stock units ("RSUs"), made on the date of our Annual Meeting of Shareholders; | | • | A Board or committee meeting attendance fee of $1,000 for each additional Board or committee meeting attended in excess of eight Board meetings or eight committee meetings, payable in December; | | • | A committee chair retainer, payable in May, to each of the Chairs of the Finance, Compensation and Governance Committees ($20,000) and the Audit Committee ($25,000); and | | • | An annual retainer of $30,000 to the Board's Lead Independent Director, payable in May. |
Description of Director Compensation Program
The number of RSUs granted is based on the closing price of Ryder common stock on the date of the grant. The first RSU grant received upon joining the Board vests after the director's first year of service. Thereafter, RSUs vest and are settled upon grant unless the director elects to defer settlement. Directors may not sell any shares of common stock unless they have satisfied the director stock ownership requirements explained on page 58. RSUs granted during a director's initial year of service, or RSUs deferred until on or after separation from the Board, will receive dividend equivalents which will be reinvested through our dividend reinvestment program. Shares delivered in respect of RSUs will receive dividends upon terms consistent with all other shareholders. Upon the occurrence of a change in control, as defined in the relevant plan documents, all outstanding RSUs will be settled. Directors are given the option to receive all or any portion of their annual Board retainer in Ryder common stock. As part of our deferred compensation plan, directors also have the option of deferring receipt of their annual Board retainers and excess meeting fees. We do not pay above-market or preferential earnings on compensation deferred by directors. Directors are not eligible to participate in our Pension Plans or 401(k) Plan. We maintain a legacy Directors' Charitable Awards Program pursuant to which each director who was elected prior to January 1, 2005 may designate up to two charitable organizations to which we will contribute an aggregate of $500,000 in ten annual installments in the director's name following the director's death. The program is currently funded with the proceeds of insurance policies, and the directors obtain no personal financial benefits from the program. One of our directors, Ms. A. Smith, was elected prior to January 1, 2005, and currently participates in the program. Directors may also participate in our Matching Gifts to Education Program, under which we match a director's contributions to eligible educational institutions up to a maximum of $10,000 per year. The Compensation Committee conducts a comprehensive review and evaluation of the compensation for our non-employee directors annually, including a compensation pay analysis by FW Cook. The Committee approved the following changes to non-employee director compensation in 2024: (i) a $5,000 increase to the annual cash retainer, prorated for the July and October 2024 installments; and (ii) a $5,000 increase to the equity retainer payable in RSUs. These increases are reflected above in the description of compensation for non-employee directors in 2024.
Description of Director Compensation Program
| Table of Contents | Ryder System, Inc. | 2025 Proxy Statement | 57 |
Description of Director Compensation Program
| | Director Compensation |
Description of Director Compensation Program
| 2024 DIRECTOR COMPENSATION |
Description of Director Compensation Program
The table below sets forth the total compensation received by our non-employee Board members in 2024. The amounts in the "Stock Awards" column below represent the aggregate grant date fair value, computed in accordance with the accounting guidance for stock compensation, of (1) RSUs granted to the directors in 2024 and (2) RSUs awarded as dividend equivalents in 2024.
Description of Director Compensation Program
| Name | Fees Earned or Paid in Cash(1) ($) | Stock Awards(2) ($) | All Other Compensation(3) ($) | Total ($) | | Robert J. Eck | 162,500 | 280,221 | 10,000 | 452,721 | | Robert A. Hagemann | 113,500 | 254,871 | — | 368,371 | | Michael F. Hilton | 132,500 | 272,251 | — | 404,751 | | Tamara L. Lundgren | 113,500 | 215,417 | — | 328,917 | | Luis P. Nieto, Jr. | 112,500 | 267,141 | 10,000 | 389,641 | | David G. Nord | — | 405,944 | 10,000 | 415,944 | | Abbie J. Smith | 120,385 | 316,853 | — | 437,238 | | E. Follin Smith | 112,500 | 279,063 | 10,000 | 401,563 | | Dmitri L. Stockton | 125,615 | 239,743 | 10,000 | 375,358 | | Charles M. Swoboda | — | 309,032 | — | 309,032 |
Description of Director Compensation Program
| (1) Includes an annual Board retainer of $112,500, which reflects the $5,000 increase prorated for the July and October 2024 installment payments, as well as committee chair fees, as follows: Mr. Eck, $20,000; Mr. Hilton, $20,000; Mr. Stockton, $13,115; Ms. A. Smith, $6,885; Lead Independent Director fee for Mr. Eck of $30,000; and excess meeting fees paid as follows: Mr. Hagemann, $1,000; Ms. Lundgren, $1,000; and Ms. A. Smith, $1,000. | | (2) Represents the aggregate value of stock awards granted in 2024, valued at their respective grant dates in accordance with FASB ASC Topic 718. For 2024, Mr. Nord and Mr. Swoboda each elected to receive 100% of their compensation in stock. Therefore, their stock awards include the annual Board retainer of $112,500 and additional meeting fees of $1,000, and for Mr. Nord the committee chair fee of $25,000. The table below sets forth each director's outstanding stock awards as of December 31, 2024, as a result of the director's election to defer settlement and accrued dividends. These shares are fully vested but not yet delivered: |
Description of Director Compensation Program
| Name | Outstanding Stock Awards | | Robert J. Eck | 33,924 | | Robert A. Hagemann | 26,057 | | Michael F. Hilton | 31,168 | | Tamara L. Lundgren | 11,887 | | Luis P. Nieto, Jr. | 29,225 | | David G. Nord | 29,927 | | Abbie J. Smith | 49,602 | | E. Follin Smith | 33,801 | | Dmitri L. Stockton | 20,341 | | Charles M. Swoboda | 5,976 |
Description of Director Compensation Program
| (3) Reflects benefits under the Company's Matching Gifts to Education Program, as described above on page 57. |