DEF 14A of Simpson Manufacturing Co., Inc.
Filed Mar 19, 2024 · FY20230000920371-24-000082
Performance Highlights
Performance Highlights
Performance Highlights
| Simpson Manufacturing Co., Inc. – 2024 Proxy Statement | 1 |
Performance Highlights
| Proxy Summary | Table of Contents |
Performance Highlights
| Item 1: Election of Directors | The Board of Directors (the “Board”) has nominated eight nominees, for one year terms expiring in 2025, and recommends that stockholders vote for each nominee based on their specific background, experience, qualifications, attributes and skills. The Board recommends a vote FOR each director nominee. Page 9 |
Performance Highlights
| Director Nominees | | | | | | | | | Age | Director Since | Committees | Other Current Public Company Boards | | | James S. Andrasick Independent Non-Executive Chair of the Board, Former Chief Executive Officer of Matson Navigation Company, Inc. | 79 | 2012 | •Audit and Finance •Compensation and Leadership Development •Corporate Strategy and Acquisitions •Nominating and ESG | None | | | Chau Banks Independent Chief Information and Data Officer of The Clorox Company | 54 | 2023 | •Audit and Finance •Compensation and Leadership Development | None | | | Felica Coney Independent Vice President, Global Server Operations of Google, Inc. | 53 | 2023 | •Audit and Finance •Corporate Strategy and Acquisitions | None | | | Gary M. Cusumano Independent Retired Chairman, Chief Executive Officer and President of The Newhall Land and Farming Company | 80 | 2007 | •Compensation and Leadership Development Chair •Corporate Strategy and Acquisitions | None | | | Philip E. Donaldson Independent Executive Vice President & Chief Financial Officer of Andersen Corporation | 62 | 2018 | •Audit and Finance Chair •Corporate Strategy and Acquisitions | None | | | Celeste Volz Ford Independent Board Chair and Founder of Stellar Solutions | 67 | 2014 | •Audit and Finance •Corporate Strategy and Acquisitions Chair | None | | | Kenneth D. Knight Independent President and Chief Executive Officer of Invitae Corporation | 63 | 2021 | •Audit and Finance •Nominating and ESG | Invitae Corporation | | | Michael Olosky President and Chief Executive Officer, Simpson Manufacturing Co., Inc. | 55 | 2023 | •Corporate Strategy and Acquisitions | None | | | We believe our Board is appropriately refreshed, and our directors bring a balance of experience and fresh perspectives. | | | | |
Performance Highlights
| 2 | Simpson Manufacturing Co., Inc. – 2024 Proxy Statement |
Performance Highlights
| Table of Contents | Proxy Summary |
Performance Highlights
| | Directors Skills and Expertise | | Average Age 65 Average Tenure 7.1 Years Independence 88% | The Board is comprised of directors with strong professional reputations, skills and experience in established companies and other organizations of comparable status and size to us and/or in areas or industries relevant to our business, strategy and operations. Core skills, experiences, and statistics for each of our director nominees are included in the summary graphics below. The current composition of the Board and its director nominees reflect director-selection criteria developed by the Nominating and ESG Committee to address our needs and priorities. This past year, the Nominating and ESG Committee engaged with Heidrick & Struggles to refresh its method of reviewing and evaluating Board skills in an effort to (i) develop a more robust skills matrix that reflects each individual’s strengths and expertise and (ii) better communicate to stockholders the key qualifications that each director nominee brings to the Board. Further discussion on the qualifications and experience of director nominees is included in the “2024 Nominees” section of this Proxy Statement. |
Performance Highlights
| Gender Diversity | | Racial Diversity | | | | Board Tenure | | | | Board Skills | | | | | | | | | | | Olosky | Andrasick | Banks | Coney | Cusumano | Donaldson | Ford | Knight | | Financial Expertise | | ■ | | | | ■ | | | | Public Company CEO Experience | ■ | ■ | | | ■ | | | ■ | | Innovation and Business Transformation | ■ | | ■ | ■ | | ■ | ■ | ■ | | Building Industry | ■ | | | | ■ | ■ | | | | Public Company Executive Leadership and/or Corporate Governance | ■ | ■ | ■ | ■ | ■ | ■ | ■ | ■ | | Manufacturing | ■ | | ■ | ■ | | ■ | | ■ | | M&A/Strategic Transactions | ■ | ■ | | | | ■ | ■ | ■ | | Technology Expertise | ■ | | ■ | ■ | | ■ | ■ | | | International Perspective | ■ | ■ | | ■ | | | | ■ | | Customer Experience and Brand Management | ■ | | | | | ■ | ■ | ■ | | Supply Chain/Logistics | ■ | ■ | | ■ | | | ■ | ■ | | Human Capital/Talent Mgmt. | ■ | | | | | | | ■ | | Enterprise Risk Mgmt. | ■ | | ■ | | | ■ | | ■ | | Sustainability and Environmental | | | | ■ | | | ■ | | | ■ Directors with experience in each category | | | | | | | | | | ■ Experience that qualifies but falls outside of the defined temporal range | | | | | | | | | | * Statistics above are for director nominees, and do not include Ms. Chatman or Ms. MacGillivray. ** Average Age and Average Tenure are for nonemployee director nominees, and do not include Ms. Chatman, Ms. MacGillivray or Mr. Olosky. | | | | | | | | |
Performance Highlights
| Simpson Manufacturing Co., Inc. – 2024 Proxy Statement | 3 |
Performance Highlights
| Proxy Summary | Table of Contents |
2024 Nominees
2024 Nominees In nominating individuals to become members of the Board, the Nominating and ESG Committee considers the experience, qualifications, attributes and skills of each potential member. Each nominee brings a strong and unique background and set of skills to the Board, giving the Board, as a whole, competence and experience in a wide variety of areas. The Nominating and ESG Committee and the Board considered the following information, including the specific experience, qualifications, attributes or skills of each individual, in concluding each was an appropriate nominee to serve as a member of our Board for the term commencing at the Annual Meeting (ages are as of March 8, 2024).
2024 Nominees
| Our Board of Directors recommends that stockholders vote “FOR” each of the nominees named below. |
2024 Nominees
| Simpson Manufacturing Co., Inc. – 2024 Proxy Statement | 9 |
2024 Nominees
| Item 1: Election of Directors | Table of Contents |
2024 Nominees
| | | James Andrasick | | | | Professional Highlights: Mr. Andrasick joined the Board in 2012 and became Chair of the Board on January 1, 2019. He was the Chairman of Matson Navigation Company Inc.’s (“Matson”) board of directors, until his retirement in 2009, and was its President and Chief Executive Officer from 2002 through 2008. Prior to his positions at Matson, he was the Chief Financial Officer of Alexander & Baldwin, Inc., the parent company of Matson, and was responsible for all business development activity. Prior to that, Mr. Andrasick was President for 8 years of C. Brewer & Company, Ltd., a privately-held international agribusiness, transportation and real estate development company based in Honolulu. He recently served as a Trustee and Chair of the finance committee of Mills College and is presently a Trustee of the U.S. Coast Guard Foundation; a Trustee (and previous Chairman) of the Big Sur Land Trust; and as Governor and Vice-Chair of the Santa Lucia Conservancy. He also previously served as a director and the Chairman of the Board of the American Red Cross, Hawaii State Chapter; served on the boards of the Aloha United Way, Arthritis Foundation and Hawaii Maritime Center; and as the Chairman and a Trustee of the University of Hawaii Foundation. | | | Former CEO Matson Navigation Age: 79 Director Since: 2012 Committee Assignments: •Audit and Finance Committee •Compensation and Leadership Development Committee •Corporate Strategy and Acquisitions Committee •Nominating and ESG Committee | | | | | Contribution to and function on the Board: Mr. Andrasick brings to the Board a balanced perspective and his consensus-building style along with his business acumen stemming from his 40 years of business experience, including international experience. He also brings his financial and capital allocation and management expertise, and a strong understanding of developing markets. His experience in developing the China market for Matson, in real estate development for Alexander & Baldwin, Inc. and in mergers and acquisitions gives him a unique understanding of the Company’s current opportunities, and his strong financial and operations background adds depth to the Board’s understanding of our business. |
2024 Nominees
| | | Chau Banks | | | | Professional Highlights: Ms. Banks joined the Board in 2023. She has been the Chief Information and Data Officer at The Clorox Company since 2020. Prior to that, Ms. Banks was the Chief Technology and Digital Officer at Revlon, Inc., from 2018 to 2020; and was the Executive Vice President, Chief Information Officer and Channel Integration at New York & Company from 2013 to 2017. Ms. Banks also currently serves as a Board Member of NextUp, a non-profit organization. | | | Chief Information and Data Officer, The Clorox Company Age: 54 Director Since: 2023 Committee Assignments: •Audit and Finance Committee •Compensation and Leadership Development Committee | | | | | Contribution to and function on the Board: Ms. Banks brings to the board her significant experience in information technology including cyber infrastructure, digital and data transformations, and customer facing-digital technology. |
2024 Nominees
| 10 | Simpson Manufacturing Co., Inc. – 2024 Proxy Statement |
2024 Nominees
| Table of Contents | Item 1: Election of Directors |
2024 Nominees
| | | Felica Coney | | | | Professional Highlights: Ms. Coney joined the Board in 2023. She has been Vice President, Global Server Operations with Google, Inc. since May 2023. Prior to that she served as Vice President, Server Operations, Americas since her start with Google, Inc. in 2021. Google, Inc. is an American multinational technology company focusing on artificial intelligence, online advertising, search engine technology, cloud computing, computer software, quantum computing, e-commerce, and consumer electronics. Prior to that, Ms. Coney was the Vice President, Walmart Supply Chain, Southeast Division at Walmart Inc., from 2019 to 2021; and held numerous roles as Vice President of Operations at Collins Aerospace from 2017 to 2019. Ms. Coney also serves as a member of the North Carolina A&T Engineering Advisory Board and as a member of the Albert Lepage Center for DEI. | | | Vice President, Global Server Operations, Google, Inc. Age: 53 Director Since: 2023 Committee Assignments: •Audit and Finance Committee •Corporate Strategy and Acquisitions Committee | | | | | Contribution to and function on the Board: Ms. Coney brings to the board her extensive experience in operations, supply chain and environmental, health and safety across technology, aerospace and consumer-focused public companies. |
2024 Nominees
| | | Gary Cusumano | | | | Professional Highlights: Mr. Cusumano joined the Board in 2007. He was with the Newhall Land and Farming Company for more than 35 years, most recently as the Chairman of its board of directors, until his retirement in 2006. He is a director of Forest Lawn Memorial Park and was a director of Granite Construction, Inc., Sunkist Growers, Inc., Watkins-Johnson Company and Zero Corporation and has served on the boards of many not-for-profit and community service organizations. | | | Retired Chairman, CEO & President The Newhall Land and Farming Company Age: 80 Director Since: 2007 Committee Assignments: •Compensation and Leadership Development Committee (Chair) •Corporate Strategy and Acquisitions Committee | | | | | Contribution to and function on the Board: Mr. Cusumano brings to the Board his deep understanding of real estate development, his business acumen and his industry knowledge, which give him the ability to constructively challenge management in a positive manner. He also brings to the Board a balanced perspective from both the management and board member perspectives given his extensive leadership abilities and significant boardroom experience. |
2024 Nominees
| Simpson Manufacturing Co., Inc. – 2024 Proxy Statement | 11 |
2024 Nominees
| Item 1: Election of Directors | Table of Contents |
2024 Nominees
| | | Philip Donaldson | | | | Professional Highlights: Mr. Donaldson joined the Board in 2018. He has been the Chief Financial Officer at Andersen Corporation since 2004 and serves as its Executive Vice President, a member of its Executive Committee, and as a member of its Board of Directors. Andersen Corporation is a leading maker of windows and doors for residential and commercial markets with 13,000 employees in locations across North America and sales worldwide. Prior to joining Andersen Corporation in 1999, Mr. Donaldson spent sixteen years at Armstrong World Industries, Inc. in various management roles in sales and marketing, quality management, manufacturing and general management. Mr. Donaldson also serves as Chair of the Board of Directors of HealthPartners, Inc., and previously served, from 2010 to 2022, as a Board Member of HealthPartners, Inc., and from 2018 to 2022, as the Chairman of the Window and Door Manufacturer’s Association. | | | Executive Vice President & CFO Andersen Corporation Age: 62 Director Since: 2018 Committee Assignments: •Audit and Finance Committee (Chair) •Corporate Strategy and Acquisitions Committee | | | | | Contribution to and function on the Board: Mr. Donaldson has extensive industry, operational, and financial management experience and brings to the Board his strong focus on driving stockholder value as well as expertise in capital markets financing, acquisitions and integration, information systems and technology, and sales and marketing. |
2024 Nominees
| | | Celeste Volz Ford | | | | Professional Highlights: Ms. Ford joined the Board in 2014. She was the Chief Executive Officer of Stellar Solutions, Inc., from the time she founded the company in 1995 until 2018, when she transitioned to board chair. Stellar Solutions is a global provider of systems engineering expertise and a recognized leader in government and commercial aerospace programs. She is a proven leader of the Stellar companies, including Stellar Solutions, Inc., which provides engineering services, Stellar Solutions Aerospace Ltd. their UK-based affiliate, Stellar Solutions Aerospace France, QuakeFinder, the humanitarian R&D division of Stellar Solutions, and the Stellar Solutions Foundation, a division focused on charitable giving to promote community involvement and outreach efforts. In 2022, Ms. Ford established Stellar Ventures, a woman-led venture capital firm, and serves as a managing partner. Ms. Ford previously served, from 2020 to 2023, on the boards of CHG Group, Inc. a subsidiary of Chemring Group, PLC, a provider of advanced technology products and services to the aerospace, defense and security markets; and IRIS automation, a safety avionics technology company; and from 2015 to 2017, on the board of Seagate Government Solutions, which is a business unit of Seagate Technology Public Limited Company. She is also a part of the University of Notre Dame Board of Trustees, the American Conservatory Theater and the Business Advisory Counsel of Illuminate Ventures. | | | Founder and Former CEO Stellar Solutions Former Public Company Directorships: Heritage Commerce Corporation Age: 67 Director Since: 2014 Committee Assignments: •Corporate Strategy and Acquisitions Committee (Chair) •Audit and Finance Committee | | | | | Contribution to and function on the Board: Ms. Ford brings to the Board her proven record of leadership and entrepreneurial spirit as well as her deep understanding of and experience with cyber, technology and software. She also brings her deep knowledge of strategic planning, a significant focus of the Company, and risk management, as well as her valuable insights regarding activities in Europe. |
2024 Nominees
| 12 | Simpson Manufacturing Co., Inc. – 2024 Proxy Statement |
2024 Nominees
| Table of Contents | Item 1: Election of Directors |
2024 Nominees
| | | Kenneth Knight | | | | Professional Highlights: Mr. Knight joined the Board in 2021. He has been the Chief Executive Officer and a member of the Board of Directors of Invitae Corporation, a medical genetics company, since 2022, and was their Chief Operating Officer from 2020 until 2022. Prior to joining Invitae Corporation, Mr. Knight was Vice President, Amazon Transportation Services, at Amazon.com from 2019 to 2020, and served as its Vice President, Global Delivery and Fulfillment, Human Resources from 2016 to 2019. Prior to that, Mr. Knight held management positions at Caterpillar Inc. from 2012 to 2016 and at General Motors Company from 2004 to 2012. Mr. Knight also serves as a member of the Georgia Tech President’s Advisory Board. | | | President and Chief Executive Officer Invitae Corporation Current Public Company Directorships: Invitae Corporation Age: 63 Director Since: 2021 Committee Assignments: •Audit and Finance Committee •Nominating and ESG Committee | | | | | Contribution to and function on the Board: Mr. Knight brings to the Board his strong and extensive background in industrial manufacturing, as well as his wealth of knowledge in mergers and acquisitions, customer and innovative growth, building supply management and domestic and international sourcing and distribution. |
2024 Nominees
| | | Michael Olosky | | | | Professional Highlights: Mr. Olosky has served as our President and Chief Executive Officer and a member of the Board since January 2023. From January 2022 to December 2022, Mr. Olosky previously served as our President and Chief Operating Officer, and from November 2020 to January 2022, as our Chief Operating Officer. Prior to joining Simpson, Mr. Olosky spent more than 22 years in numerous leadership positions at Henkel, a global chemical and consumer goods company. He most recently served as the Regional President, Henkel North America and Head of the Electronics and Industrial Division. | | | President and Chief Executive Officer Simpson Manufacturing Company, Inc. Age: 55 Director Since: 2023 | | | | | Contribution to and function on the Board: Mr. Olosky brings to the board over 25 years of industry experience, a proven track record of leadership, and a dedication to the ongoing success of the Company. He has played an integral role in defining the Company’s growth strategy and brings his deep knowledge of Simpson’s daily operations, company performance and growth initiatives. Mr. Olosky’s experience at Henkel includes over nine years of international operations leadership, providing unique and valuable insights regarding activities in Europe. He is committed to maintaining the Company’s culture with a continued focus on innovation and customer service, and has demonstrated a commitment to integrity in all aspects of the Company’s business and transparency during his leadership. |
2024 Nominees
| Simpson Manufacturing Co., Inc. – 2024 Proxy Statement | 13 |
2024 Nominees
| Item 1: Election of Directors | Table of Contents |
Stockholder Engagement
•Maintaining longer performance-based equity award performance periods (3 years rather than just 1) per cycle, and removal of duplicate performance metrics between short-term incentive and long-term incentive awards •Requiring double-trigger vesting of equity awards upon a change in control •Adopting a rigorous approach to establishing performance goals under the incentive plans
Compensation Consultant
Compensation Consultant The Compensation and Leadership Development Committee has the authority under its charter to retain or obtain the advice of advisers, including compensation consultants, as it may deem appropriate. In accordance with this authority, the Compensation and Leadership Development Committee has engaged Meridian Compensation Partners, LLC (“Meridian”) as its independent compensation consultant to provide it with objective and expert analysis, advice and information with respect to executive compensation. Our Compensation and Leadership Development Committee regularly reviews its executive compensation consulting needs and periodically invites compensation consulting firms to discuss these executive compensation needs with the Compensation and Leadership Development Committee. This process enables the Compensation and Leadership Development Committee to reevaluate its compensation consultant and take a fresh look at our compensation practices and policies. All executive compensation services provided by Meridian were conducted under the direction or authority of the Compensation and Leadership Development Committee. In addition to compensation consultants, members of our Human Resources and Finance Departments support the Compensation and Leadership Development Committee in its work. Meridian was engaged by the Compensation and Leadership Development Committee to provide services including: •reviewing the custom peer group and identifying potential changes for consideration; •assessing the appropriateness and competitiveness of our compensation programs as compared to compensation programs maintained by peer companies; •evaluating our executives’ target compensation compared to market benchmarks, in total and by pay component; and •recommending changes to our short-term and long-term incentive programs. The Compensation and Leadership Development Committee has considered the required independence factors outlined by the SEC and NYSE rules in assessing the independence of the compensation consultant. Consideration was also given by the Compensation and Leadership Development Committee under those required independence factors, plus all other relevant factors, to whether the work performed by Meridian could give rise to a potential conflict of interest. Based on this review, the Compensation and Leadership Development Committee did not identify any conflict of interest raised by the work performed by Meridian.
2023 Director Compensation Table
2023 Director Compensation Table The table below summarizes the compensation earned by or paid to our nonemployee directors for the year ended December 31, 2023.
2023 Director Compensation Table
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) | All Other Compensation ($) | Total ($) | | James Andrasick | 174,272 | 178,697(1) | — | 352,969 | | Chau Banks | 55,308 | 108,262(2) | — | 163,570 | | Jennifer Chatman | 104,029 | 133,837(1) | — | 237,866 | | Felica Coney | 53,562 | 108,262(2) | — | 161,824 | | Gary Cusumano | 102,000 | 133,837(1) | — | 235,837 | | Philip Donaldson | 102,000 | 133,837(1) | — | 235,837 | | Celeste Volz Ford | 102,000 | 133,837(1) | — | 235,837 | | Kenneth Knight | 94,029 | 133,837(1) | — | 227,866 | | Robin MacGillivray | 94,029 | 133,837(1) | — | 227,866 |
2023 Director Compensation Table
| Simpson Manufacturing Co., Inc. – 2024 Proxy Statement | 29 |
2023 Director Compensation Table
| Compensation of Directors | Table of Contents |
2023 Director Compensation Table
1.Reflects the value of vested shares granted on April 26, 2023, calculated by multiplying the number of shares by the fair value per share of our common stock as of the award date in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 718 “Compensation - Stock Compensation.” Each of the nonemployee directors’ equity awards corresponded to the approximate amount of his or her 2023 annual stock retainer, and was valued at $123.58 per share, the closing price of our common stock reported by the NYSE at the close of trading on April 25, 2023. Mr. Andrasick’s equity award also includes his additional stock retainer for serving as the Chair of our Board. This award was valued at $123.58 per share, the closing price of our common stock reported by the NYSE at the close of trading on April 25, 2023. For a discussion of the valuation assumptions used in determining the grant date fair value of these awards, see Note 6 “Stock-Based Compensation” to the Consolidated Financial Statements included in our Annual Report to Stockholders on Form 10-K for the period ended December 31, 2023. 2.Reflects the value of vested shares granted on June 1, 2023, calculated by multiplying the number of shares by the fair value per share of our common stock as of the award date in accordance with FASB Accounting Standards Codification Topic 718 “Compensation - Stock Compensation.” Ms. Banks’ and Ms. Coney’s equity awards corresponded to the approximate amount of their 2023 annual stock retainer, prorated based on their appointment date, and were valued at $118.19 per share, the closing price of our common stock reported by the NYSE at the close of trading on May 31, 2023. For a discussion of the valuation assumptions used in determining the grant date fair value of these awards, see Note 6 “Stock-Based Compensation” to the Consolidated Financial Statements included in our Annual Report to Stockholders on Form 10-K for the period ended December 31, 2023. As of December 31, 2023, our nonemployee directors held no unvested stock awards or outstanding option awards with respect to our common stock.
2023 Director Compensation Table
| 30 | Simpson Manufacturing Co., Inc. – 2024 Proxy Statement |
2023 Director Compensation Table
Item 2: Advisory Vote To Approve Named Executive Officer Compensation We are asking our stockholders to vote on an advisory basis to approve the compensation of our Named Executive Officers (or “NEOs”) (sometimes referred to as “Say on Pay”) as required by Section 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We conduct our Say on Pay votes annually, and, after the Annual Meeting, the next required Say on Pay vote is expected to occur at the 2025 Annual Meeting of Stockholders. The Board recommends a vote “FOR” this proposal because it believes that our compensation policies and practices are effective in achieving Simpson’s philosophy of providing compensation that: •attracts, motivates and retains well-qualified executives; •provides performance-based incentives to reward achievement of short and long-term business goals and strategic objectives, while avoiding unnecessary risk taking; and •aligns the interests of our executives with those of our stockholders. For the reasons discussed in the “Compensation Discussion & Analysis,” accompanying compensation tables and related narrative disclosures in this Proxy Statement, the Board unanimously recommends that stockholders vote “FOR” the following resolution: “RESOLVED, that the compensation paid to the NEOs, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion & Analysis, compensation tables and accompanying narrative discussion in Simpson‘s Proxy Statement relating to its 2024 Annual Meeting of Stockholders, is hereby APPROVED.” Although the resolution is non-binding, the Board and Compensation and Leadership Development Committee consider the outcome of the vote when making future compensation decisions.
2023 Director Compensation Table
| Our Board of Directors recommends that stockholders vote “FOR” the advisory vote to approve Named Executive Officer compensation. |
2023 TSR Performance
2023 TSR Performance * The compensation peer group line represents a peer group index calculated based on 2023 weighted average TSR of our peer group. See “Comparative Market Information” below for the composition of our peer group.
2023 NEO Compensation Mixes
| ■ Base Salary | ■ CPS | ■ Long-Term Incentive |
2023 NEO Compensation Mixes
* Performance-based compensation includes Cash Profit Sharing (“CPS”) awards based on financial and individual operational metrics and LTI awards including PSUs based on financial metrics and RSUs based on stock price performance.
Pay-for-Performance: Key 2023 NEO Compensation Outcomes
| NEO | Payout(2) | Target | | Michael Olosky | $1,483,432 | $800,000 | | Brian Magstadt | $719,838 | $386,168 | | Michael Andersen(1) | $438,564 | $230,338 | | Phil Burton | $573,608 | $318,136 | | Roger Dankel | $392,108 | $242,050 |
Pay-for-Performance: Key 2023 NEO Compensation Outcomes
Equity Awards In 2023, our CEO was granted equity awards with a target grant date total value of approximately $2,400,000, and our other NEOs were granted equity awards with target grant date values from approximately $420,000 to approximately $696,000. The target equity award value was delivered 35% in the form of time-based restricted stock units (“RSUs”) and 65% in the form of performance-based restricted stock units (“PSUs”). These PSUs are fully “at-risk” and will vest only on achievement of revenue growth and ROIC performance metrics in a 2023-2025 measurement period. The awards are forfeited if the threshold performance goals are not met, and the maximum amount of shares that may potentially vest under these PSUs (if and when the highest-tier performance goals are met) are capped at 200% of the target shares. The RSUs are generally subject to a three-year vesting period with the RSUs vesting in equal annual installments on the first, second and third anniversaries of the vesting start date (as determined by the CLDC), respectively. Please refer to the “2023 Summary Compensation Table,” “NEO Compensation Program Design” and “Executive Compensation Analysis” subsections below for a more detailed disclosure of our CEO and the other NEOs’ 2023 total compensation programs and values.
Compensation-Setting Process
Role of Compensation Consultants The CLDC has engaged, and expects to continue to engage, independent advisers, including independent compensation consultants, from time to time to assist in carrying out its responsibilities. The specific services provided by Meridian to us in 2023 consisted of: reviewing our peer group and comparative compensation analysis, assessing the appropriateness and competitiveness of our executive compensation program as compared to those of the peer group, recommending changes to our executive compensation programs, and evaluating our executive and director compensation.
2023 Executive Compensation Key Policies and Practices
| Annual Review | The CLDC conducts annual evaluations of NEOs’ compensation; | | Caps | We cap payout amounts for the NEOs’ EOCPS and performance-based equity awards; | | Double Triggers | Equity awards are subject to double trigger change-in-control requirements; | | Compensation Clawback | We maintain and operate a robust compensation recovery policy; | | Ownership Guidelines | Stock ownership guidelines are in place for our NEOs and our Board; | | No Hedging or Pledging | We adopted robust anti hedging and anti pledging policies; | | Limited Perquisites | We do not provide NEOs with material perquisites; and | | Strategic Guidance | The CLDC retains an independent compensation consultant to provide strategic guidance to the CLDC regarding executive compensation. |
Setting Performance Goals
Setting Performance Goals A key aspect of our compensation programs focuses on the selection of performance metrics that (1) reflect our long-term strategic goals and (2) appropriately incentivize our executives to deliver sustainable performance across key areas. The CLDC sets performance goals for our NEOs’ EOCPS and performance-based equity awards prior to granting such awards and remains engaged to monitor and certify the achievement of the goals. The CLDC believes in the importance of setting challenging, but achievable, performance goals for our NEOs. The CLDC maintains a robust and collaborative performance goal setting process with its independent compensation consultant and our management. The goal setting process spans multiple CLDC meetings on both sides of the year-end process to ensure an active, healthy discussion and ability to respond and adapt the performance goals to changing company, industry or market conditions prior to finalization. In establishing performance goals with respect to our NEOs’ EOCPS and performance-based equity awards, the CLDC reviews market-calibrated data sets that include: •historical and future projected financial performance for our peer group; •historical and future projected financial performance more broadly in our industry; •our historical financial performance and multi-year forward-looking business plans; •our external guidance, communications and the expectations of our stockholders; and •the historical realizable compensation for our executives and the alignment between their pay and performance against expectations. After carefully evaluating the aforementioned factors and incorporating inputs from its independent compensation consultant and our management, the CLDC approves the performance goals for our NEOs. The performance goals for our NEOs’ 2023 EOCPS and performance-based equity awards and their alignment with our strategies are set forth below:
Setting Performance Goals
| Simpson Manufacturing Co., Inc. – 2024 Proxy Statement | 41 |
Setting Performance Goals
| Compensation Discussion & Analysis | Table of Contents |
Setting Performance Goals
| Incentive Component | Performance Metric | Alignment with Our Strategies | | EOCPS awards (STI) | 1-year Operating Income | A key measure of our profitability; supports long-term value creation; and maintains our long-standing culture of promoting sense of ownership among employees to deliver stockholder value. | | EOCPS awards (STI) | 1-year Individual MBOs | Financial, operational and human capital management goals directly aligning to the Company’s strategic initiatives. | | Performance-based equity awards (LTI) | 3-year Revenue Growth | Aligns with our ongoing focus on growing revenues across key business segments; and facilitates decisions that will drive sustainable revenue growth. | | Performance-based equity awards (LTI) | 3-year Average ROIC(1) | Reinforces our ongoing focus on maximizing our investment returns; and prompts thoughtful capital allocation strategy. |
Setting Performance Goals
1.The Company’s ROIC for a fiscal year is calculated based on (a) the net income of that year as presented in the Company’s consolidated statements of operations prepared pursuant to generally accepted accounting principles in the U.S. (“GAAP”), as divided by (b) the average of the sum of total stockholders’ equity and total long-term debt, at the beginning of and at the end of such year, as presented in the Company’s consolidated balance sheets prepared pursuant to GAAP for that applicable year. As such, the Company’s ROIC, a ratio or statistical measure, is calculated using exclusively financial measures presented in accordance with GAAP (but excludes the impact of ETANCO in 2022 and 2023 for the equity awards granted in 2021).
2023 Compensation Program Elements
2023 Compensation Program Elements The Board believes that, to maintain a sense of unity and fairness, the forms of compensation for our NEOs generally should match those of our other employees. Under this principle, our compensation programs for our executive population, including our NEOs, include three core elements: •Base salaries and contributions to profit sharing trust accounts; •Cash profit sharing awards, such as EOCPS awards to our NEOs; and •Long-term equity awards, such as PSUs and RSUs granted to our NEOs. Each element of our compensation programs possesses characteristics intended to motivate our NEOs and other employees in different ways. We believe that coordinated compensation elements work best to help us to retain their services and to motivate them to achieve results that increase stockholder value.
2023 Operating Income Achievements and EOCPS Awards
Regarding these goals, threshold operating income represented 70% of the target operating income for the quarter or full year, while maximum qualified operating income represented 140% of the target operating income for each quarter and 130% of the target operating profit for the full year. The target quarterly goal levels were established by the CLDC based on its judgment and evaluation of the seasonality of the Company’s business. The threshold target, and maximum annual amounts that may be paid out under the EOCPS Plan to each of our NEOs for 2023 were as follows:
2023 Operating Income Achievements and EOCPS Awards
| NEO | 2023 Threshold Annual Payouts ($) | 2023 Target Annual Payouts ($) | 2023 Maximum Annual Payouts ($) | | Michael Olosky | 200,000 | 800,000 | 1,600,000 | | Brian Magstadt | 96,542 | 386,168 | 772,336 | | Michael Andersen(1) | 57,585 | 230,338 | 460,676 | | Phil Burton | 79,534 | 318,136 | 636,272 | | Roger Dankel | 60,513 | 242,050 | 484,100 |
2023 Operating Income Achievements and EOCPS Awards
| NEO | Payouts ($) | % Payout vs. Target | | Michael Olosky | 1,483,432 | 185.43 | | Brian Magstadt | 719,838 | 186.41 | | Michael Andersen(1) | 438,564 | 190.40 | | Phil Burton | 573,608 | 180.30 | | Roger Dankel | 392,107 | 161.99 |
2023 Long-Term Equity Awards
2023 Long-Term Equity Awards Our NEOs’ long-term compensation is entirely equity-based. We grant equity awards to our NEOs pursuant to the Company’s current equity incentive plan, the amended and restated 2011 Incentive Plan (the “2011 Incentive Plan”). Restricted Stock Units in General Our NEOs’ 2023 awards of restricted stock units were made in the following two forms: 1. Time-based restricted stock units (“RSUs”) that are generally subject to a three-year vesting period vesting in equal annual installments on the first, second and third anniversaries of the vesting start date (as determined by the CLDC); and 2. Performance-based restricted stock units (“PSUs”) that generally vest based on the achievement of both revenue growth and ROIC goals at the end of a three-year performance period.
2023 Long-Term Equity Awards
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2023 Long-Term Equity Awards
RSUs accounted for 35% of the 2023 target equity awards of our NEOs while PSUs accounted for the remaining 65%. In terms of target equity award values, the CEO and other NEOs’ target award values increased as follows:
2023 Long-Term Equity Awards
| NEO | 2023 Target Equity Award ($) | 2022 Target Equity Award ($) | | Michael Olosky | 2,400,000 | 1,000,000 | | Brian Magstadt | 696,000 | 580,000 | | Michael Andersen | 420,000 | 140,000(1) | | Phil Burton | 455,000 | 140,000(1) | | Roger Dankel | 475,000 | 475,000 |
2023 Long-Term Equity Awards
1.The year-over-year increase for Mr. Andersen and Mr. Burton was due to their promotions into new NEO roles with additional responsibilities. The CLDC evaluated peer group and market survey data provided by Meridian and considered additional internal factors such as the CEO’s recommendation and the NEOs’ performance prior to increasing these target equity awards from 2022 levels, as applicable. Our NEOs’ 2023 RSU Awards In 2023, the CLDC approved equity awards to each of our NEOs as indicated below:
2023 Long-Term Equity Awards
| Named Executive Officer | Shares Under 2023 RSUs | | Michael Olosky | 9,453 | | Brian Magstadt | 2,741 | | Michael Andersen | 1,656 | | Phil Burton | 1,793 | | Roger Dankel | 1,870 |
2023 Long-Term Equity Awards
See “Accelerated Vesting and Payout” and “Potential Payments on Termination or Change in Control” below for a discussion of potential early vesting of such RSU awards. Our NEOs’ 2023 PSU Awards The CLDC set the performance goals for our NEOs’ 2023 PSU awards in early 2023, with 50% of the goals based on the Company’s 3-year revenue growth (the “Revenue Growth Goals”) and the remaining 50% based on 3-year average ROIC (the “ROIC Goals”). The performance goals for these PSU awards established at the start of fiscal 2023 are intended to remain in effect through fiscal year end 2025. Our NEOs’ 2023 PSUs are measured against such goals for a three-year cliff-vesting performance period starting on January 1, 2023, and ending on December 31, 2025. The number of PSU shares that may vest ranges from 0% to 200% of each NEO’s target award opportunity, depending on the extent to which the performance goals will have been achieved at the end of 2025. The number of the target shares of our common stock and the maximum amount of shares of
2023 Long-Term Equity Awards
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2023 Long-Term Equity Awards
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2023 Long-Term Equity Awards
common stock that could potentially vest under the 2023 PSU awards granted to each of our NEOs is as follows:
2023 Long-Term Equity Awards
| | Target PSU Shares Under 2023 PSU Awards | Maximum PSU Shares Under 2023 PSU Awards(1) | | Michael Olosky | 17,552 | 35,104 | | Brian Magstadt | 5,090 | 10,180 | | Michael Andersen | 3,070 | 6,140 | | Phil Burton | 3,326 | 6,652 | | Roger Dankel | 3,474 | 6,948 |
2023 Long-Term Equity Awards
1.No fractional shares will be issued pursuant to any PSU award and, therefore, any fractional shares may be forfeited or otherwise eliminated as determined by the CLDC. Our Participating NEOs’ 2021-2023 PSU Awards The CLDC set the performance goals for the 2021 PSU awards annually at the beginning of each year of the performance period (2021, 2022 and 2023). These PSUs were fully “at-risk” and were to vest only on achievement of compounded annual revenue growth and average ROIC performance metrics for each year during the 2021-2023 measurement period (with each metric weighted equally). For the 2022 and 2023 portions of the measurement period, the performance metrics excluded ETANCO. The third tranche of these awards, which is attributable to the 2023 performance period, is required to be reported in the Summary Compensation Table below because the goals are set annually. However, this tranche of the 2021 PSU awards should not be viewed as part of the NEOs’ 2023 target compensation. Threshold, target and maximum levels for these performance metrics were as follows:
2023 Long-Term Equity Awards
| 2021 Performance Period | Threshold (%) | Target (%) | Maximum (%) | | Revenue Growth | 2.8 | 3.7 | 5.6 | | Average ROIC | 11.6 | 16.3 | 23.3 |
2023 Long-Term Equity Awards
| 2022 Performance Period | Threshold (%) | Target (%) | Maximum (%) | | Revenue Growth | 19.7 | 26.3 | 39.4 | | Average ROIC | 14.6 | 20.4 | 29.2 |
2023 Long-Term Equity Awards
| 2023 Performance Period | Threshold (%) | Target (%) | Maximum (%) | | Revenue Growth | (10.1) | (8.0) | (4.0) | | Average ROIC | 12.7 | 17.8 | 23.4 |
2023 Long-Term Equity Awards
Actual performance results for the 2021-2023 performance period were as follows:
2023 Long-Term Equity Awards
| | Actual Results | | | | | 2021 (%) | 2022 (%) | 2023 (%) | | Revenue Growth | 24.08 | 20.99 | 0.35 | | Average ROIC | 24.61 | 26.46 | 21.98 |
2023 Long-Term Equity Awards
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2023 Long-Term Equity Awards
The 2022 and 2023 revenue growth excludes revenues attributable to ETANCO and the 2022 and 2023 average ROIC excludes net income of ETANCO as well as the long-term portion of debt and related after tax interest thereon incurred for the acquisition of ETANCO. This resulted in a total payout of 167.22% for the 2021 PSU awards to the participating NEOs. Payouts for the 2021 PSU awards for the participating NEOs were as follows:
2023 Long-Term Equity Awards
| | 2021 PSU Shares Payouts(1) | | Michael Olosky | 8,311 | | Brian Magstadt | 6,391 | | Michael Andersen | 1,395 | | Phil Burton | 1,395 | | Roger Dankel | 5,287 |
2023 Long-Term Equity Awards
1.No fractional shares will be issued pursuant to any PSU award and, therefore, any fractional shares may be forfeited or otherwise eliminated as determined by the CLDC.
Potential Accelerated Vesting and Payout
Potential Accelerated Vesting and Payout Under the 2011 Incentive Plan, the vesting of RSUs may accelerate in two situations. First, when an employee ceases employment with us upon his or her retirement (depending on whether the employee meets certain age and service tenure conditions), death or disability, all of the employee’s unvested RSUs vest. Second, all outstanding RSUs held by an employee vest on a change in control that involves a substantial change in his or her terms of employment or involuntary termination. In addition, the CLDC may cause awards granted pursuant to the 2011 Incentive Plan, including awards to our NEOs, to vest earlier in certain other situations, at its discretion. Our NEOs have entered into grant agreements with the Company with respect to their 2023 PSU and RSU awards, which agreements provide for early vesting in case of death or disability. The grant agreements also provide that, for the PSU or RSU awards to vest ahead of schedule, a recipient may retire at age 55 after having worked at the Company or its subsidiaries for 15 years (but for each year that the recipient delays his or her retirement after reaching age 55, he or she may work one year less and still retire). In addition, to increase the compatibility of the awards with Internal Revenue Code Section 409A (“Section 409A”) and avoid potential negative tax implications for the recipient and the Company, the grant agreements for RSU awards provide that, in case the awards vest ahead of schedule and are determined by the CLDC to be subject to Section 409A, they may only be paid out in the enumerated situations as allowed under Section 409A. In particular, in case a recipient is a specified employee under Section 409A, the awards cannot be paid out until the date that is six months after the employee’s separation of service, which generally is when the employee completely stops working for the Company and its subsidiaries. Similarly, the grant agreements for PSU awards provide that, irrespective of when the PSU awards vest, they may only be paid out following the last day of the applicable vesting period after the performance period has concluded and subject to achievement of the applicable performance goals. Further, the grant agreements for PSU awards require the PSU shares that could eventually become payable in favor of the recipient following the last day of the applicable vesting period after the performance period to be prorated based on the early-vesting date and the date when the applicable vesting period is scheduled to expire.
Change in Control or Asset Sale
Change in Control or Asset Sale The 2011 Incentive Plan provides that, on a change in control of the Company, if the surviving or resulting entity refuses to continue the PSU or RSU awards and does not substitute similar awards, and if the nature and terms of employment or engagement, including compensation and benefits, of a recipient will change significantly as a result of the change in control, then the awards will vest ahead of schedule. Individual grant agreements may alter this default arrangement. Our NEOs’ 2023 grant agreements do not change the default rule under the 2011 Incentive Plan, but additionally provide that, in the case of an asset sale, the PSU or RSU awards will vest ahead of schedule
Change in Control or Asset Sale
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Change in Control or Asset Sale
in certain situations, including where a recipient is not subsequently employed or engaged by the surviving or resulting entity or the successor to the sold business or there is a significant change in the nature and terms of the subsequent employment or engagement of the recipient. For ease of administration, our NEOs’ grant agreements also use a broader definition, “sale event,” to encompass both change-in-control and asset-sale situations, and therefore override the 2011 Incentive Plan with respect to any change in control of the Company affecting the awards thereunder. In addition, in order to provide a “double-trigger” accelerated vesting mechanism, our NEOs’ grant agreements for PSU and RSU awards require that for the PSU or RSU awards to vest ahead of schedule on a sale event, an NEO’s employment with the Company and its subsidiaries (or the acquiring, surviving or resulting entity) will first need to be terminated, either by the officer for good reason or by his or her employer without cause within two years from the sale event. In case of early vesting of the PSU awards because of a sale event, the PSU shares thereunder will be subject to the proration described in the “Potential Accelerated Vesting and Payout” section above. See “Potential Payments on Termination or Change in Control” below for a more detailed discussion on early vesting of our NEOs’ PSU and RSU awards.
Designation of Peer Companies to Help Set Executive Compensation
Designation of Peer Companies to Help Set Executive Compensation The Company maintains a comparative market peer group that includes certain companies in the building products or construction material industries that we consider our peer companies for comparative compensation purposes for NEOs. The peer group is evaluated on an annual basis to assess its continued appropriateness based on a number of factors including: industry, revenues, and stockholder feedback. These companies designated as peers individually had revenues between $889 million and $4.88 billion in 2022, which values are approximately 0.42 to 2.31 times the Company’s 2022 revenue. The following 16 companies in the building products or construction material industries were considered our peer companies in the process of setting compensation for our NEOs for 2023.
Designation of Peer Companies to Help Set Executive Compensation
| Aaon, Inc. | Armstrong World Industries, Inc | PGT Innovations, Inc | | Advanced Drainage Systems, Inc | Atkore Inc. | Quanex Building Products Corp. | | Allegion | Eagle Materials, Inc. | Summit Materials, Inc. | | American Woodmark Corp. | Gibraltar Industries, Inc. | The Azek Company | | Apogee Enterprises, Inc. | Masonite International Corp | Trex Company, Inc | | | Patrick Industries, Inc. | |
Designation of Peer Companies to Help Set Executive Compensation
Our compensation consultant gathered data on the salary, bonus, total cash compensation, long-term incentives and total direct compensation paid by these peer companies to support the CLDC’s compensation decisions. Following the peer group review in 2022, the CLDC removed GCP Applied
Designation of Peer Companies to Help Set Executive Compensation
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Designation of Peer Companies to Help Set Executive Compensation
Technologies from the peer group due to acquisition, and added Allegion and The Azek Company to the peer group due to revenue and industry compatibility.
Material Risk Considerations of Compensation Policies
related risks, we have concluded that our compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on the Company. Through our cash profit sharing incentive plans, including the EOCPS Plan, our NEOs and other employees are encouraged to maximize our short-term profits, for example, by increasing revenues and reducing operating costs. Payouts under the EOCPS Plan are based 40% on quarterly operating income and 60% on annual operating income and can be modified based on the achievement level of MBO goals. Accordingly, each of our NEOs receive four quarterly payouts and one annual payout. If the operating income or other performance goal achievement is less than the minimum amount in one or more quarters of any year, our NEOs will receive no payment for such quarter(s). In addition, if the annual qualified operating income or other performance goal is less than the annual minimum amount in a particular year, our NEOs will receive no annual payment following the end of that year but may still receive one or more quarterly payments during the year. We believe that these aspects of the EOCPS Plan reduce the risk that the quarterly time horizon could potentially create opportunities for employees to maximize income in one quarter at the expense of a future quarter. Through our equity-based compensation, including the RSUs and PSUs, our NEOs and other employees are encouraged to drive our continued growth and increase long-term value for our stockholders, for example, by growing our revenues and increasing the return on our stockholders’ invested capital. Because our NEOs’ and other employees’ equity awards generally vest over several years after grant, the value of such awards is affected by our performance over time. As a result, any attempt to maximize our short-term profits at the expense of our long-term financial health would work against our employees’ incentive to maximize their total compensation.
2023 Summary Compensation Table
2023 Summary Compensation Table The table below provides information with respect to the compensation of our Named Executive Officers (“NEOs”), which include our Principal Executive Officer, our Principal Financial Officer, and our three other most highly compensated executive officers serving as of December 31, 2023, for their services provided to us and our subsidiaries in all capacities during the three years ended December 31, 2021, 2022 and 2023, as applicable.
2023 Summary Compensation Table
| Name and Principal Position | Year | Salary ($) | Stock Awards ($)(2) | Non-Equity Incentive Plan Compensation ($)(3) | Change in Pension Value and Non-Qualified Deferred Compensation Earnings ($)(4) | All Other Compensation ($)(5) | Total ($) | | Michael Olosky President and Chief Executive Officer | 2023 | 800,000 | 2,823,117 | 1,483,432 | — | 33,000 | 5,139,549 | | | 2022 | 620,000 | 1,137,526 | 915,216 | — | 133,376 | 2,806,118 | | | 2021 | 620,000 | 435,326 | 930,000 | — | 114,792 | 2,100,118 | | Brian Magstadt Chief Financial Officer and Treasurer | 2023 | 551,668 | 897,897 | 719,838 | — | 33,500 | 2,202,903 | | | 2022 | 530,450 | 691,010 | 522,017 | — | 31,000 | 1,774,478 | | | 2021 | 530,450 | 334,859 | 515,000 | — | 30,500 | 1,410,809 | | Michael Andersen Executive Vice President – Europe(1) | 2023 | 383,897 | 713,437 | 438,614 | 47,739 | 67,854 | 1,651,541 | | Phil Burton Executive Vice President – North America | 2023 | 454,480 | 531,546 | 573,608 | — | 33,000 | 1,592,634 | | Roger Dankel Executive Vice President – North American Sales | 2023 | 484,100 | 631,171 | 392,107 | — | 33,000 | 1,540,378 | | | 2022 | 484,100 | 566,907 | 484,100 | — | 30,500 | 1,565,607 | | | 2021 | 484,100 | 276,989 | 470,000 | — | 29,000 | 1,260,089 |
2023 Summary Compensation Table
1.For purposes of this table, amounts paid to Mr. Andersen in Swiss francs (CHF) were converted to U.S. Dollars (USD) using an average annual exchange rate of 1 CHF = 1.1137 USD. 2.Amounts in this column for 2023 reflect the grant date fair value of the restricted stock units granted (or deemed granted) to the applicable NEO under the 2011 Incentive Plan in 2023. There were two kinds of restricted stock units granted to our NEOs in 2023: time-based restricted stock units (“RSUs”) and performance-based restricted stock units (“PSUs”). See “Executive Compensation Analysis - Long-Term Equity Awards” above. We determined the value of such awards to be included for 2023 by multiplying the target number of shares of our common stock that may become vested pursuant to the terms of the applicable awards (in the case of the 2021 PSUs, the target number for just the 2023 performance period for such award) by the fair value of our common stock as of the grant date in accordance with FASB Accounting Standards Codification Topic 718 “Compensation - Stock Compensation.” Our NEOs’ 2023 RSU and PSU awards were made on January 24, 2023 and fair value was calculated as $99.13 and $98.03 per share, respectively, based on the closing price of our common stock reported
2023 Summary Compensation Table
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2023 Summary Compensation Table
by the New York Stock Exchange (“NYSE”) at the close of trading on January 23, 2023, discounted for dividends that these awards did not participate in. Under SEC disclosure rules, the portion of the NEOs’ 2021 PSU awards that relate to the 2023 performance period are also reported in this column (because the performance goals for that portion of the 2021 PSUs were established during 2023), and fair value for these awards was calculated as $99.85 per share, based on the closing price of our common stock reported by the NYSE at the close of trading on January 22, 2021 (the grant date), discounted for dividends that these awards did not participate in. Vesting of any portion of the 2021 PSUs is subject to the full 3-year performance period and based on the results of this performance period, the 2021 and 2022 portions (as well as the 2023 portion) may not vest at all. Assuming achievement of maximum performance, the value as of the grant date of the 2023 portion of the 2021 PSUs granted to Messrs. Olosky, Magstadt, Andersen, Burton, and Dankel would be $330,836, $254,418, $55,517, $55,517, and $210,484, respectively. Also, assuming achievement of maximum performance, the value as of the grant date of the 2023 PSUs granted to Messrs. Olosky, Magstadt, Andersen, Burton, and Dankel would be $3,441,245, $997,945, $1,043,039, $652,096, and $681,112, respectively. For a discussion of the valuation assumptions used in determining the grant date fair value of these awards see Note 6 “Stock-Based Compensation” to the Consolidated Financial Statements included in our Annual Report to Stockholders on Form 10-K for the period ended December 31, 2023. 3.Amounts in this column for 2023 reflect cash incentive compensation earned by the applicable NEO pursuant to the terms of our EOCPS Plan with respect to 2023 (regardless of the year in which such amounts were actually paid). Quarterly 2023 EOCPS awards received by our NEOs were earned in one quarter and paid in the following quarter. As a result, quarterly awards with respect to the fourth quarter of 2023, which were paid in the first quarter of 2024, are reflected for 2023. Annual 2023 EOCPS awards received by our NEOs were earned in 2023 and paid in 2024, but are reflected for 2023. See “Executive Compensation Analysis - Executive Officer Cash Profit Sharing (EOCPS) Awards” above. 4.The change in pension value includes for Mr. Andersen the increase in vested benefits in 2023 under our Swiss pension scheme attributable to employer contributions and allocated interest. See “Pension Benefits” for a detailed discussion of the Simpson Switzerland Pension Plan. None of our other NEOs participated in a reportable pension plan during 2023. 5.Company contribution amounts to defined contribution plans, as well as certain other amounts included as 2023 “All Other Compensation” for our NEOs, are set forth in the table below.
2023 Summary Compensation Table
| | Profit sharing trust contribution and share of forfeitures ($)(b) | Health Savings Account (HSA) Contributions ($) | Vehicle ($) | Other Defined Contribution Plan Contributions ($)(c) | Total ($) | | Michael Olosky | 33,000 | — | — | — | 33,000 | | Brian Magstadt | 33,000 | 500 | — | — | 33,000 | | Michael Andersen(a) | — | — | 14,882 | 52,972 | 67,854 | | Phil Burton | 33,000 | — | — | — | 33,000 | | Roger Dankel | 33,000 | — | — | — | 33,000 |
2023 Summary Compensation Table
a.For purposes of this table, amounts paid to Mr. Andersen in Swiss francs (CHF) were converted to U.S. Dollars (USD) using an average annual exchange rate of 1 CHF = 1.1137 USD. b.Amounts in this column include our contribution to the applicable NEO’s profit sharing trust account, pursuant to a defined contribution profit sharing trust plan we maintain for U.S.-based employees, including our NEOs, with respect to 2023 (regardless of the year in which such amounts were actually paid) in an amount equal to the sum of (i) 7% of the applicable NEO’s qualifying salary, which is subject to a 6-year vesting period and the NEO being employed at the beginning and end of the year, (ii) a quarterly safe harbor contribution equal to 3% of the applicable NEO’s qualifying salary, which is not forfeitable and fully vests when made, and (iii) a proportionate share of contributions from employees who terminated employment with us before such contributions fully vest; provided, however, that the profit sharing trust plan limits our contributions only to trust amounts deductible for federal income tax purposes under Section 404(a) of Internal Revenue Code and thus imposes a contribution limit of $33,000 for 2023. The contributions earned by the applicable NEO with respect to the fourth quarter of 2023, which were paid as of the first quarter of 2024, are reflected for 2023. c.Amounts in this column include our contributions to the Danish Pension Plan for Mr Andersen, the only NEO who participates in this plan.
2023 Summary Compensation Table
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2023 Grants of Plan-Based Awards
2023 Grants of Plan-Based Awards The following table summarizes the cash awards opportunities granted to our NEOs during 2023 under our EOCPS Plan and the equity awards granted to our NEOs under our 2011 Incentive Plan.
2023 Grants of Plan-Based Awards
| | | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | | | All Other Stock Awards: Number of Shares of Stock or Units(3) (#) | Grant Date Fair Value of Stock and Option Awards(4) ($) | | Name | Grant Date | Threshold ($) | Target ($) | Maximum (#) | Threshold (#) | Target (#) | Maximum (#) | | | | Michael Olosky | | 200,000 | 800,000 | 1,600,000 | | | | | | | | 1/24/2023(5) | | | | 828 | 1,657 | 3,313 | | 165,418 | | | 1/24/2023 | | | | 8,776 | 17,552 | 35,104 | | 1,720,623 | | | 1/24/2023 | | | | | | | 9,453 | 937,076 | | Brian Magstadt | | 96,542 | 386,168 | 772,335 | | | | | | | | 1/24/2023(5) | | | | 637 | 1,274 | 2,548 | | 127,209 | | | 1/24/2023 | | | | 2,545 | 5,090 | 10,180 | | 498,973 | | | 1/24/2023 | | | | | | | 2,741 | 271,715 | | Michael Andersen | | 57,585 | 230,338 | 460,676 | | | | | | | | 1/24/2023(5) | | | | 139 | 278 | 556 | | 27,758 | | | 1/24/2023 | | | | 2,660 | 5,320 | 10,640 | | 521,520 | | | 1/24/2023 | | | | | | | 1,656 | 164,159 | | Phil Burton | | 79,534 | 318,136 | 636,272 | | | | | | | | 1/24/2023(5) | | | | 139 | 278 | 556 | | 27,758 | | | 1/24/2023 | | | | 1,663 | 3,326 | 6,652 | | 326,048 | | | 1/24/2023 | | | | | | | 1,793 | 177,740 | | Roger Dankel | | 60,513 | 242,050 | 484,100 | | | | | | | | 1/24/2023(5) | | | | 527 | 1,054 | 2,108 | | 105,242 | | | 1/24/2023 | | | | 1,737 | 3,474 | 6,948 | | 340,556 | | | 1/24/2023 | | | | | | | 1,870 | 185,373 |
2023 Grants of Plan-Based Awards
1.Amounts in these columns reflect the threshold, target and maximum amounts that could become payable under the EOCPS Plan for each of our NEOs with respect to 2023. Actual amounts payable to our NEOs under the EOCPS Plan were determined based on the level at which our quarterly and annual operating income performance compared to pre-established goals for the applicable quarter or year. See “Executive Compensation Analysis - Executive Officer Cash Profit Sharing (EOCPS) Awards” above. For purposes of these columns, amounts listed for Mr. Andersen were converted from Swiss francs (CHF) to U.S. Dollars (USD) using an average annual exchange rate of 1 CHF = 1.1137 USD.
2023 Grants of Plan-Based Awards
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2023 Grants of Plan-Based Awards
2.Amounts reflect the threshold, target and maximum number of performance-based restricted stock units (“PSUs”) regarding our shares of common stock that could be earned pursuant to the 2023 portion of our NEOs’ 2021 PSU awards (for which annual revenue growth and ROIC performance goals were set in 2023) and our NEOs’ 2023 PSU awards. Our NEOs’ PSU awards are subject to two types of performance goals: one set of goals based on our revenue growth, and another set of goals based on the return on our stockholders’ invested capital (which both exclude ETANCO for 2022 and 2023 performance periods). The threshold amounts are calculated, assuming that the threshold levels of both types of performance goals would be achieved. The actual amount of PSUs that could be earned pursuant to our NEOs’ 2023 PSU awards, therefore, could be less than the threshold amounts if only one of the threshold levels is achieved. In addition, no fractional shares will be issued pursuant to any PSU award. See “Compensation Discussion and Analysis - Long-Term Equity Awards - Our NEOs’ 2023 PSU Awards” above. 3.Amounts reflect the actual number of time-based restricted stock units (“RSUs”) of our shares of common stock granted as being subject to continued vesting. See “Executive Compensation Analysis - Long-Term Equity Awards - Our NEOs’ 2023 RSU Awards” above. 4.The amounts in this column reflect the grant date fair value of the equity awards granted to our NEOs in 2023 and the 2023 portion of the equity awards granted to our NEOs in 2021 computed in accordance with FASB Accounting Standards Codification Topic 718. The grant date fair value of the PSUs and RSUs granted to our NEOs in 2023 was calculated as $98.03 and $99.13 per share, respectively, based on the closing price of our common stock reported by the NYSE at the close of trading on January 24, 2023, discounted for dividends that these awards did not participate in. The grant date fair value for the 2023 portion of the PSUs granted to our NEOs in 2021 was calculated as $99.85 per share, based on the closing price of our common stock reported by the NYSE at the close of trading on January 22, 2021 (the grant date), discounted for dividends that these awards did not participate in. 5.Consistent with the requirements of FASB Topic 718, the reported amount represents the third portion of the NEOs’ 2021 PSU awards made on January 22, 2021 for which the grant date fair value was established on January 22, 2021. The performance goals for the 2023 performance period were set on January 24, 2023. Grants made in 2023 are described more fully in the “Compensation Discussion and Analysis” section of this Proxy Statement. More information concerning the amount of base salary and incentive compensation in proportion to total compensation for the NEOs is provided under the section entitled “2023 NEO Compensation Mixes” of this Proxy Statement.
2023 Grants of Plan-Based Awards
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Outstanding Equity Awards at 2023 Fiscal Year End
Outstanding Equity Awards at 2023 Fiscal Year End As of December 31, 2023, our NEOs held the following restricted stock units awarded under the 2011 Incentive Plan:
Outstanding Equity Awards at 2023 Fiscal Year End
| | | Stock Awards | | | | | Name | Grant Date | Number of Shares or Units of Stock That Have Not Vested (#)(1)(2) | Market Value of Shares or Units of Stock That Have Not Vested ($)(3) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(3) ($) | | Michael Olosky | 1/22/2021 | 892 | 176,598 | 8,311(4) | 1,645,412 | | | 1/20/2022 | 1,884 | 372,994 | 5,246(5) | 1,038,603 | | | 1/24/2023 | 9,453 | 1,871,505 | 17,552(5) | 3,474,945 | | Brian Magstadt | 1/22/2021 | 687 | 136,012 | 6,391(4) | 1,265,290 | | | 1/20/2022 | 1,093 | 216,392 | 3,042(5) | 602,255 | | | 1/24/2023 | 2,741 | 542,663 | 5,090(5) | 1,007,718 | | Michael Andersen | 1/22/2021 | 150 | 29,697 | 1,395(4) | 276,182 | | | 1/20/2022 | 264 | 52,267 | 734(5) | 145,317 | | | 1/24/2023 | 1,656 | 327,855 | 5,320(5) | 1,053,254 | | Phil Burton | 1/22/2021 | 150 | 29,697 | 1,395(4) | 276,182 | | | 1/20/2022 | 264 | 52,267 | 734(5) | 145,317 | | | 1/24/2023 | 1,793 | 354,978 | 3,326(5) | 658,481 | | Roger Dankel | 1/22/2021 | 568 | 112,453 | 5,287(4) | 1,046,720 | | | 1/20/2022 | 896 | 177,390 | 2,490(5) | 492,970 | | | 1/24/2023 | 1,870 | 370,223 | 3,474(5) | 687,783 |
Outstanding Equity Awards at 2023 Fiscal Year End
1.Vesting of restricted stock units may be accelerated under certain circumstances. See “Executive Compensation Analysis - Long-Term Equity Awards” above and “Potential Payments on Termination or Change in Control” below. 2.Represents RSUs, vesting in three equal annual installments beginning on the first anniversary of the vesting start date (as determined by the CLDC). 3.Calculated based on the $197.98 closing price of our common stock reported by the NYSE at the close of trading on December 29, 2023. 4.Represents actual number of PSUs vested based on actual performance for the three-year measurement period ending December 31, 2023. 5.Represents the target number of PSUs that could vest subject to meeting the applicable performance goals over the three-year performance period commencing on January 1 of the calendar year in which the PSUs were granted. The number of PSUs that will actually vest will be determined following the performance period. As of December 31, 2023, our NEOs did not hold outstanding options with respect to our common stock.
Outstanding Equity Awards at 2023 Fiscal Year End
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2023 Option Exercises and Stock Vested
2023 Option Exercises and Stock Vested The following table provides information on the number of shares of our common stock that vested during 2023 under restricted stock units granted to each of our NEOs pursuant to the 2011 Incentive Plan:
2023 Option Exercises and Stock Vested
| | Stock Awards | | | Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting(1) ($) | | Michael Olosky | 1,833 | 205,058 | | Brian Magstadt | 12,758 | 1,427,237 | | Michael Andersen | 2,317 | 259,203 | | Phil Burton | 2,317 | 259,203 | | Roger Dankel | 10,550 | 1,180,229 |
2023 Option Exercises and Stock Vested
1.Calculated by multiplying the number of shares that vested by the market value of such shares on the vesting date.
Pension Benefits
Pension Benefits Mr. Andersen participates in the Simpson Switzerland Pension Plan (the “Swiss Pension Plan”), which is discussed below. Mr. Andersen is the only named executive officer who is covered by this plan. The following table presents information as of December 31, 2023 concerning each defined benefit plan of the Company that provides for payments to be made to the NEOs at, following or in connection with retirement.
Pension Benefits
| Name | Plan Name | Number of Years Credited Service (#) | Present Value of Accumulated Benefit(2) ($) | Payments During Last Fiscal Year ($) | | Michael Olosky | | — | — | — | | Brian Magstadt | | — | — | — | | Michael Andersen(1) | Swiss Pension Plan | 11 | 268,170 | — | | Phil Burton | | — | — | — | | Roger Dankel | | — | — | — |
Pension Benefits
1.For purposes of this table, amounts listed were converted from Swiss francs (CHF) to U.S. Dollars (USD) using an average annual exchange rate of 1 CHF = 1.1137 USD. 2.This column shows the present value of the accumulated benefit as of December 31, 2023. For purposes of computing the present value of the accrued benefit payable to Mr. Andersen, the Company used the following assumptions: (a) the retirement age is the ordinary one (age 65 for males) provided for under the Swiss Pension plan; (b) a 2.5% discount rate for the pension plan measurement date of December 31, 2023 and (c) payments will be made on a straight-life monthly annuity basis. In addition, the Company has assumed Mr. Andersen will attain the age of 65.
Simpson Switzerland Pension Plan
Simpson Switzerland Pension Plan The Company maintains the Swiss Pension Plan, which is a contribution-based plan that covers all Switzerland employees, with a guarantee of a minimum interest credit and fixed conversion rates at retirement. The amount financed for the benefit payable to an employee is based on a percentage of the insured salary and depends on the age attained of the member: 6% from age 25, 8% from age 35, 11% from age 45 and
Simpson Switzerland Pension Plan
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Simpson Switzerland Pension Plan
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Simpson Switzerland Pension Plan
13% from age 55. The financing is split between the employee (50% of total cost) and the employer (50% of total cost). The risk benefits are expressed as a percentage of the participant’s salary, which annual cost is also split between the employee (50% of total cost) and the employer (50% of total cost). Subject to certain limitations, an employee who retires before he or she reaches age 65, provided he or she has reached the age of 58, may receive an annuity for life payable on a monthly basis beginning on his or her early retirement date at an annual rate not to exceed the maximum possible old-age savings tables which are based on a percentage of the participant’s salary. The plan provides for payment options of an annuity for life or as a lump sum payment. Benefit elections must be made before retirement and are subject to certain requirements, such as spousal consent.
2023 Non-Qualified Deferred Compensation Plans
2023 Non-Qualified Deferred Compensation Plans The following table presents information about our Deferred Compensation Program, which provides for the deferral of compensation paid to or earned by the NEOs on a basis that is not tax qualified (i.e., the Company is not entitled to take a tax deduction for the related expense until payments are actually made to the participants). The information included in the following table reflects elective deferrals, aggregate withdrawals and the aggregate balance of deferred compensation accounts at December 31, 2023. Because deferrals related to annual incentive payouts under the EOCPS are credited in the year after they are earned, these amounts differ from the annual incentive payments in the Summary Compensation Table, which, for each year, reflect amounts earned in that year. Amounts in the following tables may not add due to rounding.
2023 Non-Qualified Deferred Compensation Plans
| Name | Executive Contributions in Last Fiscal Year(1) ($) | Aggregate Earnings in Last Fiscal Year ($) | Aggregate Withdrawals/Distributions ($) | Aggregate Balance at Last Fiscal Year End(2) ($) | | Michael Olosky | 25,232 | – | – | 28,650 | | Brian Magstadt | – | – | – | – | | Michael Andersen | – | – | – | – | | Phil Burton | – | – | – | – | | Roger Dankel | – | – | – | – |
2023 Non-Qualified Deferred Compensation Plans
(1)Under the Deferred Compensation Program, a participant is permitted to defer base salary, annual incentive amounts earned under the EOCPS, and PSU and RSU awards. The dollar value of deferred amounts is converted into notional investments in mutual funds, selected by the participant, or common stock units that represent an equivalent number of shares of Common Stock in accordance with the formulas in the Deferred Compensation Program. The following table sets forth the amount of salary and annual incentive awards deferred in 2023 under the Deferred Compensation Program by each of the NEOs:
2023 Non-Qualified Deferred Compensation Plans
| Name | Salary Deferred ($) | EOCPS Deferred(a) ($) | PSU and RSU Awards Deferred ($) | Total ($) | | Michael Olosky | – | 25,232 | – | 25,232 | | Brian Magstadt | – | – | – | – | | Michael Andersen | – | – | – | – | | Phil Burton | – | – | – | – | | Roger Dankel | – | – | – | – |
2023 Non-Qualified Deferred Compensation Plans
(a)The incentive compensation deferred in 2023 was earned by each NEO in 2023.
2023 Non-Qualified Deferred Compensation Plans
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2023 Non-Qualified Deferred Compensation Plans
(2)The following table sets forth the composition of the aggregate balance of deferred compensation under the Deferred Compensation Program as of December 31, 2023 for each of the NEOs. It includes (a) the aggregate contributions made by each of the NEOs, (b) the change in market value of the common stock units based on the change in market value of Common Stock or the change in value of notional investments in mutual funds, as appropriate; and (c) aggregate distributions to participants:
2023 Non-Qualified Deferred Compensation Plans
| Name | Years of Participation | Aggregate Executive Contributions ($) | Changes in Market Value ($) | Aggregate Distributions ($) | Aggregate Balance ($) | | Michael Olosky | 1 | 25,232 | 3,418 | – | 28,650 | | Brian Magstadt | – | – | – | – | – | | Michael Andersen | – | – | – | – | – | | Phil Burton | – | – | – | – | – | | Roger Dankel | – | – | – | – | – |
Potential Payments Upon Termination or Change in Control
Potential Payments Upon Termination or Change in Control Our NEOs are at-will employees, and we or our NEOs can terminate the employment relationship at any time, for any reason, with or without cause. Our NEOs do not have employment agreements or severance agreements and are not subject to any severance plans or policies. As discussed above under “Executive Compensation Analysis - Long-Term Equity Awards,” the vesting of an NEO’s outstanding RSUs, or a portion thereof, may accelerate on, following or in connection with (1) retirement after reaching certain age and service tenure conditions, (2) death, (3) disability or (4) certain situations linked to a change in our control or a sale of our assets. On, following, or in connection with the applicable NEO’s death, disability or retirement after reaching certain age and/or service tenure conditions, or a change in control or asset sale related situation, in each case assumed to have occurred on December 31, 2023 (and assuming that incentive awards to be earned based on performance or service through December 31, 2023 had effectively been earned as of the close of business on December 29, 2023, the last business day of the year), the potential payments that would be provided to each of our NEOs would be as follows:
Potential Payments Upon Termination or Change in Control
| | Estimated Payments and Benefits of Accelerated Restricted Stock Units in Connection With | | | | | | Retirement(1)(2) ($) | Death(1) ($) | Disability(1) ($) | Change in Control(1)(3) ($) | | Michael Olosky | – | 13,093,209 | 13,093,209 | 13,093,209 | | Brian Magstadt | 895,068 | 5,380,304 | 5,380,304 | 5,380,304 | | Michael Andersen | – | 3,083,143 | 3,083,143 | 3,083,143 | | Phil Burton | 436,942 | 2,320,722 | 2,320,722 | 2,320,722 | | Roger Dankel | 660,065 | 4,068,291 | 4,068,291 | 4,068,291 |
Potential Payments Upon Termination or Change in Control
1.Calculated based on the actual number of PSUs vested under the 2021 outstanding equity awards and the target number of PSUs that could vest under the 2022 and 2023 outstanding equity awards, multiplied by the $197.98 closing price of our common stock reported by the NYSE at the close of trading on December 29, 2023. No material conditions or obligations are currently expected to apply to the receipt of payments on any accelerated vesting of equity awards granted to our NEOs. 2.As of December 31, 2023, Mr. Magstadt, Mr. Burton and Mr. Dankel were the only NEOs eligible for retirement with respect to certain of their equity awards. 3.Includes potential payments in connection with a sale of our assets.
Potential Payments Upon Termination or Change in Control
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Potential Payments Upon Termination or Change in Control
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Potential Payments Upon Termination or Change in Control
To increase the compatibility of the PSU and RSU awards with Section 409A and avoid potential negative tax implications for the recipient and the Company, our NEOs’ grant agreements provide that, in case the applicable NEO’s RSU awards vest ahead of schedule and are determined by the CLDC to be subject to Section 409A, they may only be paid out in the enumerated situations as allowed under Section 409A. In particular, in case the applicable NEO is a specified employee under Section 409A, his or her RSU awards cannot be paid out until the date that is six months after the employee’s separation of service, which generally is when the employee completely stops working for the Company and its subsidiaries. Similarly, irrespective of when the PSU awards vest, they may only be paid out following the last day of the applicable vesting period after the performance-measurement period has concluded. In addition, while still providing for early vesting in case of death or disability, our NEOs’ grant agreements provide that, for the PSU or RSU awards to vest ahead of schedule, an NEO may retire at age 55, but only after having worked at the Company or its subsidiaries for 15 years. For each year, however, that the recipient delays his or her retirement after reaching age 55, he or she may work one year less and still retire with accelerated vesting. The 2011 Incentive Plan defines “change in control” as any of the following transactions: (1) the consummation of a consolidation or merger of the Company in which the Company is not the surviving corporation; (2) the consummation of a reverse merger in which the Company is the surviving corporation but the shares of our common stock outstanding immediately preceding such reverse merger are converted by virtue of such reverse merger into other property, whether securities, cash or otherwise; or (3) the approval by our stockholders of a plan or proposal for the dissolution and liquidation of the Company; provided that a “change in control” shall not be deemed to have occurred by virtue of the consummation of any transaction or series of related transactions immediately following which the record holders of our common stock immediately before such transaction or transactions continue to have substantially the same proportionate ownership in an entity that owns all or substantially all of the assets of the Company immediately thereafter. Our NEOs’ grant agreements use a broader definition, “sale event,” to encompass both change in control and asset sale situations, and therefore override the 2011 Incentive Plan with respect to any change in control of the Company affecting the awards thereunder. To provide a double-trigger mechanism as recommended by our stockholders, under our NEOs’ grant agreements, for any PSU or RSU award to vest ahead of schedule upon a sale event, the applicable NEO’s employment or engagement with the Company and its subsidiaries (or the acquiring, surviving or resulting entity) will first need to be terminated, either by the NEO for good reason or by his or her employer without cause within two years from the sale event. Our NEOs’ grant agreements use standard definitions for what constitutes good reason or cause that can typically be found in employment agreements. Under our NEOs’ grant agreements, before an NEO may quit for good reason, he or she will first need to provide written notice within 90 days of the underlying incident and inform his or her employer about the reason. In addition, the employer has up to 30 days to cure following such notice. Similarly, for the Company, a subsidiary thereof, or the acquiring, surviving or resulting entity to terminate an NEO with cause, which results in forfeiture of the NEO’s PSU or RSU awards, the employer will need to provide notice and the NEO has up to 15 days to cure. In case of early vesting of our NEOs’ PSU awards, shares thereunder that could eventually vest in favor of the officer will be prorated based on the early-vesting date and the date when the applicable vesting period is scheduled to expire. The 2011 Incentive Plan provides that on a change in control, if the surviving or resulting entity refuses to continue our NEOs’ PSU or RSU awards and does not substitute similar awards, and if the nature and terms of employment or engagement, including compensation and benefits, of the applicable NEO will change significantly as a result of the change in control, then the awards will vest ahead of schedule. The 2011 Incentive Plan, however, allows individual grant agreements to alter this default arrangement. Our NEOs’ grant agreements do not change the default rule under the 2011 Incentive Plan but additionally provide that, in the case of an asset sale, the PSU or RSU awards will vest ahead of schedule in certain situations, including where a recipient is not subsequently employed or engaged by the surviving or resulting entity or the successor to the business or there is a significant change in the nature and terms of the subsequent employment or engagement of the recipient.
Potential Payments Upon Termination or Change in Control
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Potential Payments Upon Termination or Change in Control
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Potential Payments Upon Termination or Change in Control
| | CEO Pay Ratio We believe our executive compensation to be reasonable and unbiased to motivate our employees to create stockholder value. We are committed to internal pay equity, and the CLDC monitors the relationship between the pay our executive officers receive and the pay our non-managerial employees receive. The CLDC reviewed a comparison of CEO pay to the pay of all our employees in 2023. Our CEO to median employee pay ratio disclosed in this Proxy Statement is calculated pursuant to Item 402(u) of Regulation S-K. For 2023, we identified the median employee by examining the 2023 annual total compensation (as defined under Item 402(u)), based on our payroll records, for all individuals (excluding our CEO) who were employed by us, including our consolidated subsidiaries, on December 31, 2023 (a total of approximately 5,500 employees, including 3,274 employees based in the United States). We included all employees (excluding our CEO), whether employed on a full-time, part-time, or seasonal basis, but (as permitted under SEC rules) we excluded from our employee population consideration eight associates located in Reunion Island (due to the inability to obtain compensation data for such associates). We also used widely recognized tests that the Company would otherwise use to determine whether its workers are employees (including the relevant employment or tax law standards and recognized tests under the laws of foreign countries normally used to determine whether local workers in such countries are employees). We did not make any assumptions, adjustments, or estimates with respect to the calculation of total compensation, except we annualized the base salary pay for any full-time employees that were not employed by us for the entire 2023 payroll year. We used the average foreign exchange rate for all of 2023 when calculating total compensation for non-U.S. based employees. We calculated annual total compensation for such employees using the same methodology that we use for our named executive officers as set forth in the 2023 Summary Compensation Table above. In calculating our CEO pay ratio for 2023, we determined that our CEO’s 2023 annual total compensation was $5,139,549, and our median employee’s 2023 annual total compensation was $55,059. In each case, annual total compensation was calculated by totaling all applicable elements of compensation for 2023 in accordance with Item 402(c)(2)(x) of Regulation S-K. As a result, for 2023, the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all of our employees and those of our consolidated subsidiaries was approximately 93 to 1(1). We note that, due to our permitted use of reasonable estimates and assumptions in preparing this pay ratio disclosure, the disclosure may involve a degree of imprecision, and thus this ratio disclosure is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K using the data and assumptions described above. 1.This CEO Pay Ratio reflects the total compensation of the CEO including the 2023 portion of the 2021 PSUs, as reflected in the 2023 Summary Compensation Table above. If all portions of the 2021 PSUs were included in the CEO’s 2021 compensation (which was the case in years prior to 2021), this ratio would have instead been 90:1. | | 93:1(1) CEO Pay Ratio | |
Potential Payments Upon Termination or Change in Control
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Pay Versus Performance
Pay Versus Performance As required by the SEC’s pay versus performance (“PVP”) rules, the following Pay Versus Performance table (“PVP Table”) provides SEC-required information about compensation for 2023 for this Proxy Statement’s NEOs, as well as our named executive officers from our 2023, 2022 and 2021 Proxy Statements (each of 2020, 2021, 2022 and 2023, a “Covered Year”). We refer to all of the named executive officers covered in the PVP Table below, collectively, as “NEOs”. The PVP Table also provides information about the results for certain measures of financial performance during those same Covered Years.
Pay Versus Performance
| Year (a) | Summary Compensation Table Total Compensation for CEO(1) ($) (b) | Compensation Actually Paid to CEO(2)(3) ($) (c) | Average SCT Total Compensation for Other NEOs(1) ($) (d) | Average Compensation Actually Paid to Other NEOs(2)(3) ($) (e) | Value of Initial Fixed $100 Investment Based On | | Net Income ($) (h) | Operating Income(6) ($) (i) | | | | | | | Cumulative TSR(4) ($) (f) | Peer Group Cumulative TSR(5) ($) (g) | | | | 2023 | 5,139,549 | 9,453,698 | 1,746,864 | 3,141,368 | 256.11 | 147.49 | 353,987,000 | 536,608,000 | | 2022 | 5,413,738 | 2,256,634 | 1,767,501 | 1,201,620 | 113.65 | 134.84 | 333,995,000 | 520,430,099 | | 2021 | 3,914,701 | 14,118,964 | 1,290,442 | 2,556,158 | 176.50 | 185.73 | 266,447,000 | 426,491,332 | | 2020 | 4,880,856 | 8,876,953 | 1,257,524 | 2,265,656 | 117.53 | 124.08 | 187,000,000 | 326,008,984 |
Pay Versus Performance
1.Michael Olosky was our principal executive officer, as our CEO, for the full year for 2023 and Karen Colonias was our principal executive officer, as our CEO, for the full year for each of 2022, 2021 and 2020. For 2023, our Other NEOs were Brian Magstadt, Michael Andersen, Phil Burton, and Roger Dankel. For 2022, our Other NEOs were Brian Magstadt, Michael Olosky, Roger Dankel and Kevin Swartzendruber. For 2021, our Other NEOs were Brian Magstadt, Michael Olosky, Roger Dankel, Kevin Swartzendruber and Terry Hammons. For 2020, our Other NEOs were Brian Magstadt, Roger Dankel, Kevin Swartzendruber and Terry Hammons. 2.For 2023, in determining both the “compensation actually paid” (or “CAP”) to our CEO and the average CAP to our Other NEOs for purposes of this PVP Table, we deduced from or added back to the total amounts of compensation reported in column (b) and column (d) for such Covered Year the following amounts (please note that while similar adjustment information was provided in our 2023 proxy statement for Covered Years 2020, 2021 and 2022, under applicable SEC guidance, repeating such adjustment information is not required in this proxy statement because in our view it is not material to our shareholders’ understanding of the information reported in the table above for 2023 or the relationships disclosures provided below):
Pay Versus Performance
| Item and Value Added (Deducted) | 2023 ($) | | For CEO: | | | - SCT “Stock Awards” column value | (2,823,117) | | + Covered Year-end fair value of outstanding equity awards granted in Covered Year | 5,674,437 | | +/- change in fair value (from prior year-end to Covered Year-end) of equity awards outstanding at Covered Year-end granted prior to Covered Year | 1,420,285 | | +/- change in fair value (from prior year-end to vesting date in Covered Year) of equity awards granted prior to Covered Year vested in Covered Year | 42,544 | | TOTAL ADDED/(DEDUCTED): | 4,314,150 | | For Other NEOs (Average): | | | - SCT “Stock Awards” column value | (693,513) | | ‘- change in actuarial present value of pension benefits | (11,935) | | ‘+ pension service cost | 5,279 | | + Covered Year-end fair value of outstanding equity awards granted in Covered Year | 1,393,482 | | +/- change in fair value (from prior year-end to Covered Year-end) of equity awards outstanding at Covered Year-end granted prior to Covered Year | 539,057 | | +/- change in fair value (from prior year-end to vesting date in Covered Year) of equity awards granted prior to Covered Year vested in Covered Year | 162,133 | | TOTAL ADDED/(DEDUCTED): | 1,394,503 |
Pay Versus Performance
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Pay Versus Performance
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Pay Versus Performance
3.Fair value of equity awards was computed in accordance with the Company’s methodology used for financial reporting purposes. 4.For each Covered Year, our total shareholder return was calculated as the yearly percentage change in our cumulative total shareholder return on our common stock, par value $0.01 per share, measured as the quotient of (a) the sum of (i) the cumulative amount of dividends for a period beginning with our closing price on NYSE on December 31, 2019 through and including the last day of the Covered Year (each one-year, two-year, three-year and four-year periods, a “Measurement Period”), assuming dividend reinvestment, plus (ii) the difference between our closing stock price at the end versus the beginning of the Measurement Period, divided by (b) our closing share price at the beginning of the Measurement Period. Each of those yearly percentage changes was then applied to a deemed fix investment of $100 at the beginning of the Measurement Period to produce the Covered Year-end values of such investment as of the end of 2023, 2022, 2021 and 2020, as applicable. Because Covered Years are presented in the table in reverse chronological order (from top to bottom), the table should be read from bottom to top for purposes of understanding cumulative returns over time. 5.For purposes of this pay versus performance disclosure, our peer group is the Dow Jones U.S. Building Materials & Fixtures Index (the “Peer Group”). For each Covered Year, our Peer Group cumulative total shareholder return was calculated based on a deemed fixed investment of $100 through the Measurement Period, assuming dividend reinvestment for the Peer Group. 6.For purposes of this PVP Table, our Operating Income results were calculated substantially as described above in our Compensation Discussion and Analysis. Please see the “Compensation Discussion & Analysis” section in this Proxy Statement for a detailed description of our NEO compensation programs and more information on the calculation of Operating Income and these PVP Table results. The following charts provide, across the Covered Years, a clear description of the relationships (1) between our cumulative total shareholder return and the cumulative total shareholder return of the Peer Group, and (2) between (A) the executive compensation actually paid to the CEO and the average of the executive compensation actually paid to our Other NEOs (in each case as set forth in the PVP Table above) and (B) each of the performance measures set forth in columns (f), (h) and (i) of the PVP Table above. We do not use net income to determine compensation levels or incentive plan payouts.
Pay Versus Performance
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Pay Versus Performance
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