DEF 14A of Global Industrial Co
Filed Apr 24, 2024 · FY20230000945114-24-000030
Information About Our Board and Principal Committees (Pages 23-26)
Information About Our Board and Principal Committees (Pages 23-26)
Information About Our Board and Principal Committees (Pages 23-26)
| | Number of Members | Independent | Number of Meetings During 2023 | | Full Board of Directors | 8 | 50% | 10 | | Audit Committee | 4 | 100% | 8 | | Compensation Committee | 4 | 100% | 5 | | Nominating/Corporate Governance Committee | 3 | 100% | 5 |
Our Pay and Governance Practices (Page 40)
| WHAT WE DO: | | WHAT WE DON'T DO: | | | ✓ | Pay for Performance Alignment | X | Starting in 2023 No Dividends on Unearned Performance-Based Equity Awards | | ✓ | Caps on Payouts of Annual Non-Equity Incentive Compensation | X | No Stock Trading Plans Without Committee Approval and Oversight | | ✓ | Adoption of Minimum Stock Ownership Requirements for Our Executive Officers and Non-Management Directors to Reinforce Alignment with Stockholders | X | No Compensation or Incentives that Encourage Unnecessary or Excessive Risk-Taking | | ✓ | “Double-trigger” Change in Control Provisions for Equity Awards | X | No Supplemental Retirement Benefits for Executives | | ✓ | Independent Compensation Committee Advised by Independent Compensation Consultant | X | No Liberal Share Recycling under Equity Compensation Plans |
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| Richard B. Leeds Executive Chairman | Principal Occupation and Positions Held •Age: 64 •Year in which First Elected a Director: 1995 •Committee(s) Served: Executive Committee •Principal Occupation and Other Information: Richard B. Leeds joined the Company in 1982 and served as our Chairman and CEO from April 1995 until becoming our Executive Chairman in March 2016. He also served as President of our Industrial Products Group until 2011. | | Mr. Leeds was selected to serve as Executive Chairman of our Board due to his experience and depth of knowledge of Global Industrial and the direct marketing and industrial products industries, his role in developing and managing our business strategies and operations, as well as his exceptional business judgment and leadership qualities. | | | Bruce Leeds Vice Chairman | Principal Occupation and Positions Held •Age: 68 •Year in which First Elected a Director: 1995 •Committee(s) Served: Executive Committee •Principal Occupation and Other Information: Bruce Leeds joined the Company in 1977 and has served as our Vice Chairman since April 1995. He also served as President of our International Operations until 2005. | | Mr. Leeds was selected to serve as a director on our Board due to his experience and depth of knowledge of the Company and the direct marketing and industrial products industries, his role in developing and managing our business strategies and operations, his experience in international business, as well as his exceptional business judgment. | |
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| Robert Leeds Vice Chairman | Principal Occupation and Positions Held •Age: 68 •Year in which First Elected a Director: 1995 •Committee(s) Served: Executive Committee •Principal Occupation and Other Information: Robert Leeds joined the Company in 1977 and has served as our Vice Chairman since April 1995. He also served as President of our Domestic Operations until 2005 and as Chief Executive of the North American Technology Products Group from 2013 to 2015. | | Mr. Leeds was selected to serve as a director on our Board because of his experience and depth of knowledge of the Company and the direct marketing and industrial products industries, his role in developing and managing our business strategies and operations, as well as his exceptional business judgment. | | | Barry Litwin Chief Executive Officer | Principal Occupation and Positions Held •Age: 57 •Year in which First Elected a Director: 2017 •Committee(s) Served: None •Principal Occupation and Other Information: Mr. Litwin was appointed Chief Executive Officer of Global Industrial in January 2019. Prior to joining Global Industrial, he was the Chief Executive Officer of Adorama, Inc., a leading multi-channel retailer of professional camera, audio and video equipment. Previous executive roles included overseeing e-commerce and marketing for Sears Holdings, Inc., Office Depot and Newark Electronics, Inc., in addition to serving as an advisor to several early stage digital and technology companies. Mr. Litwin received a BS degree from Indiana University and an MBA in Operations from Loyola University, Quinlan School of Business. | | Mr. Litwin was selected to serve as a director on our Board due to his e-commerce and direct marketing expertise. | |
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| Paul S. Pearlman Independent Director | Principal Occupation and Positions Held •Age: 70 •Year in which First Elected a Director: 2019 •Committee(s) Served: Member of the Audit Committee, the Compensation Committee and the Nominating/Corporate Governance Committee •Principal Occupation and Other Information: Since March 2020, Mr. Pearlman has been a partner in Zeughauser Group, LLC, a nationally prominent law firm and management consulting firm. From August 2000 through December 2019, Mr. Pearlman was the Managing Partner of Kramer Levin Naftalis & Frankel LLP, a New York City headquartered international law firm and Mr. Pearlman continued to serve as Counsel, Managing Partner Emeritus in the firm until January 31, 2022. Prior thereto, he was a partner in the firm practicing in the areas of private equity and corporate restructuring. Mr. Pearlman is a 1978 cum laude graduate of St. John’s University School of Law and a 1975 graduate of George Washington University. | | Mr. Pearlman was selected to serve as a director on our Board due to his business and legal experience and acumen as well as his management, financial and leadership skills as the head of a prominent international law firm. | | | l Robert D. Rosenthal Independent Director | Principal Occupation and Positions Held •Age: 75 •Year in which First Elected a Director: 1995 •Committee(s) Served: Chair of the Nominating/Corporate Governance Committee, Member of the Audit Committee, the Compensation Committee and the Executive Committee •Principal Occupation and Other Information: Robert D. Rosenthal has been the lead independent director since October 2006. Mr. Rosenthal is Chairman and Chief Executive Officer of First Long Island Investors LLC, which he co-founded in 1983. Mr. Rosenthal is the Chairman and CEO of a wealth management company that invests in numerous public companies and is also an attorney and member of the bar of the State of New York. Mr. Rosenthal is a 1971 cum laude graduate of Boston University and a 1974 graduate of Hofstra University Law School. | | Mr. Rosenthal was selected to serve as a director on our Board due to his financial, investment and legal experience and acumen. | |
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| Compensation Element | Amount ($) | | Retainers(1) | 70,000 | | Restricted Stock Units(2) | 50,000 | | Committee Chair Annual Retainers(1) | | | Audit Committee | 20,000 | | Compensation Committee | 10,000 | | Nominating/Corporate Governance Committee | 10,000 | | Committee Member Annual Retainers(1) | | | Audit Committee | 10,000 | | Compensation Committee | 5,000 | | Nominating/Corporate Governance Committee | 5,000 | | Lead Independent Director Retainer(1) | 20,000 |
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(1)Retainer amounts are paid in quarterly installments. (2)Each non-management director receives an annual grant of time-based restricted stock units each year immediately following the annual stockholders meeting in an amount equal to $50,000 divided by the average closing price per share during the 20 trading days preceding the date of the annual meeting (rounded up to the nearest whole number of shares). Such time-based restricted stock units are generally subject to forfeiture if the holder is not a director of Global Industrial on the date of the second annual meeting following such grant, and cannot be sold while so restricted; such restrictions lapse if the holder dies or becomes disabled or there is a change of control, as defined in the grant agreement. Cash dividend equivalents are paid on the unvested time-based restricted stock units. Non-Management Director Compensation in Fiscal Year 2023 The following table discusses the compensation earned by each of our non-management directors in fiscal year 2023. Mr. Michel is not included in the table below because he did not serve on the Board in fiscal year 2023. Mr. Michel is compensated in accordance with Company's standard compensation policies and practices for the non-management directors.
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| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Option Awards ($) | All Other Compensation ($)(2) | Total ($) | | Chad M. Lindbloom | 105,000 | 50,000 | - | 2,608 | 157,608 | | Paul S. Pearlman | 90,000 | 50,000 | - | 2,608 | 142,608 | | Robert D. Rosenthal | 115,000 | 50,000 | - | 2,608 | 167,608 | | Thomas R. Suozzi(3) | 82,500 | 50,000 | - | 816 | 133,316 |
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(1) At December 31, 2023, 3,540 unvested time-based restricted stock units remained outstanding for each of Messrs. Lindbloom, Pearlman and Rosenthal, 2,041 unvested time-based restricted stock units remained outstanding for Mr. Suozzi, and 10,000 options remained outstanding for Mr. Rosenthal. This column represents the fair value of the stock award on the grant date determined in accordance with the provisions of ASC 718. As per SEC rules relating to executive compensation disclosure, the amounts shown exclude the impact of forfeitures related to service-based vesting conditions. For additional information regarding assumptions made in calculating the amount reflected in this column, please refer to Note 14 to our audited consolidated financial statements, included in our Annual Report on Form 10-K for fiscal year 2023. (2) Dividend equivalent payments on unvested time-based restricted stock units. (3) Mr. Suozzi resigned from our Board as of February 14, 2024 incident to his election to the U.S. House of Representatives. Executive Officers There are no arrangements or understandings between any officer and any other person pursuant to which such person was selected as an officer. Biographical information for Messrs. Richard Leeds, Bruce Leeds, and Robert Leeds is on pages 13-14 of this Proxy Statement.
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| Chief Executive Officer | | | | Biographical Information Mr. Litwin was appointed Chief Executive Officer of Global Industrial in January 2019. Prior to joining Global Industrial, he was the Chief Executive Officer of Adorama, Inc., a leading multi-channel retailer of professional camera, audio and video equipment. Previous executive roles included overseeing e-commerce and marketing for Sears Holdings, Inc., Office Depot and Newark Electronics, Inc., in addition to serving as an advisor to several early stage digital and technology companies. Mr. Litwin received a BS degree from Indiana University and an MBA in Operations from Loyola University, Quinlan School of Business. | | Barry Litwin Age: 57 Executive Officer of the Company Since 2019 | | | Senior Vice President and Chief Financial Officer | | | | Biographical Information Thomas Clark was appointed Vice President and CFO of Global Industrial in October 2016. Mr. Clark originally joined Global Industrial in 2007. Prior to being appointed Vice President and CFO, Mr. Clark, served in a number of senior financial positions at Global Industrial, most recently as Controller of the Industrial Products Group. Previously he held the positions of Director of Finance and Manager of Financial Planning & Analysis at Global Industrial. Mr. Clark received a BA degree and an MBA from the University of Miami. | | Thomas Clark Age 42 Executive Officer of the Company Since 2016 | | | Senior Vice President and Chief Human Resources Officer | | | | Biographical Information Donna Fielding joined Global Industrial in 2018 as Senior Vice President and Chief Human Resources Officer. Prior to joining Global Industrial, Ms. Fielding worked in various human resource leadership roles in Fortune 500 organizations, including ADP, Credit Suisse, Pfizer and JPMorgan Chase. Ms. Fielding has broad experience in traditional human resources as well as cultural transformation, differentiated and specialized talent models and integrated human capital solutions. Ms. Fielding received a dual degree BS Business Management and Communication from Adelphi University. | | Donna Fielding Age 53 Executive Officer of the Company Since 2018 | |
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| Senior Vice President and Chief Sales Officer | | | | Biographical Information Claudia Hughes joined Global Industrial in 2021 as Senior Vice President and Chief Sales Officer. She was previously Senior Vice President, US Field Sales for Office Depot, where she held positions of increasing responsibility during her 27-year tenure. Ms. Hughes possesses exceptional business skills across B2B Sales, Sales Leadership and Sales Operations, with data driven results. Ms. Hughes received a BS degree from the University of Maryland, College Park. | | Claudia Hughes Age 56 Executive Officer of the Company Since 2021 | | | Senior Vice President and Chief Supply Chain Officer | | | | Biographical Information Christopher Longhito joined Global Industrial in 2019 and currently serves as Senior Vice President and Chief Supply Chain Officer. While at Global Industrial, he has held management roles in purchasing, inventory and customer experience and previously served as Senior Vice President, Operations until his promotion to his current role in April 2023. Prior to joining Global Industrial, Mr. Longhito held various leadership positions in supply chain and inventory management with Drive DeVilbiss Healthcare and Henry Schein. Mr. Longhito received a BBA in Finance from Loyola University. | | Christopher Longhito Age 43 Executive Officer of the Company Since 2021 | | | Senior Vice President and Chief Information Officer | | | | Biographical Information Manoj Shetty was appointed Senior Vice President and Chief Information Officer of Global Industrial in August 2014. Mr. Shetty originally joined Global Industrial in 2000 and has served in several Information Technology roles since that time. Prior to joining Global Industrial, Mr. Shetty was employed at Mercator (ultimately acquired by IBM) and in the manufacturing sector. Mr. Shetty received a BE (Bachelors in Engineering) from SJCE Mysore (Sri Jayachamarajendra College of Engineering). | | Manoj Shetty Age 63 Executive Officer of the Company Since 2014 | |
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| Senior Vice President, General Counsel and Corporate Secretary | | | | Biographical Information Adina Storch joined Global Industrial in 2021 as Senior Vice President, General Counsel and Corporate Secretary. She recently served as the General Counsel, Chief Compliance Officer and Corporate Secretary of Cedar Realty Trust and prior to that was a partner at Kasowitz, Benson, Torres & Friedman LLP and an associate with the Paris office of Shearman & Sterling LLP. During her career, Ms. Storch has advised domestic and international companies across a range of topics, including capital markets transactions and regulatory compliance matters. Ms. Storch graduated summa cum laude from Yale College and received her J.D. from the Yale Law School, where she was a senior editor of The Yale Law Journal. | | Adina Storch Age 52 Executive Officer of the Company Since 2021 | |
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| Senior Vice President and Chief Merchandising Officer | | | | Biographical Information Alex Tomey joined Global Industrial in 2021 as Senior Vice President and Chief Merchandising Officer. He recently served as Co-Chief Merchandising Officer at Petco and prior to that as Senior Vice President, Product Development and Global Sourcing at DICK'S Sporting Goods. During his career, Mr. Tomey has held various merchandising leadership positions at leading retailers including Kohl's and Walmart. Mr. Tomey has previously held board positions at Petco Mexico and DICK’s Sporting Goods Foundation. Mr. Tomey received a BS from the University of Missouri-Columbia. | | Alex Tomey Age 54 Executive Officer of the Company Since 2021 | |
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Compensation Discussion and Analysis Executive Summary This Compensation Discussion and Analysis describes the Company's pay for performance compensation philosophy and programs, and explains the compensation earned by Global Industrial's Named Executive Officers (“NEOs”) in 2023, who are listed in the following table.
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| Name | Title | | Richard B. Leeds* | Executive Chairman | | Bruce Leeds* | Vice Chairman | | Robert Leeds* | Vice Chairman | | Barry Litwin** | Chief Executive Officer | | Thomas Clark | Senior Vice President and Chief Financial Officer | | Claudia Hughes | Senior Vice President and Chief Sales Officer | | Manoj Shetty | Senior Vice President and Chief Information Officer |
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* Messrs. Richard, Robert and Bruce Leeds do not participate in any non-equity incentive compensation or equity awards. ** Mr. Litwin's non-equity incentive compensation and annual equity award is determined in accordance with his employment agreement. For more information, see Employment Arrangements with Named Executive Officers on page 55 of this Proxy Statement. Central Objectives and Philosophy of Our Executive Compensation Program The Compensation Committee designs competitive compensation packages aimed at achieving the proper amount and mix of short-term, annual and long-term incentive programs to serve several important objectives: •attracting and retaining individuals of superior ability and managerial talent; •rewarding outstanding individual and team contributions to the achievement of our short- and long-term financial and business objectives, including our multi-year business strategy that is focused on Accelerating the Customer Experience ("ACE"); •promoting integrity and good corporate governance; •motivating our NEOs to manage for sustained growth and financial performance, and enhanced stockholder value, for the long-term benefit of our stockholders, customers and employees; and •mitigating risk and reducing risk taking behavior that might negatively affect financial results, without diminishing the incentive nature of the compensation (as described below). Pay and Governance Practices Our commitment to good governance is further reflected in our executive compensation philosophy designed to reinforce alignment between pay and performance. Our executive compensation program includes a number of features intended to reflect best practices in the market and to help ensure that the program reinforces our stockholders’ interests, including:
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| WHAT WE DO: | | WHAT WE DON'T DO: | | | ✓ | Pay for Performance Alignment: We align our senior executives' compensation with stockholder returns by providing a significant portion of our senior executives’ compensation in the form of at-risk awards tied to our short- and long-term strategy and measurable performance. In addition, a portion of our senior executives’ compensation is given in the form of equity that vests ratably over several years to encourage retention and further reinforce stockholder alignment. | X | Starting in 2023 No Dividends on Unearned Performance-Based Equity Awards: Starting in 2023, dividend equivalent rights issued in connection with performance-based restricted stock units are not earned or paid unless and until the performance-based restricted stock units vest. | | ✓ | Caps on Payouts of Annual Non-Equity Incentive Compensation: Our annual non-equity incentive compensation for the Company's senior leadership team is capped at a maximum award payable to any individual, with a separate cap set for the CEO pursuant to his employment agreement. | X | No Stock Trading Plans Without Committee Approval and Oversight: Our directors and executive officers are prohibited from entering securities trading plans pursuant to SEC Rule 10b5-1 without the pre-approval of our Nominating/Corporate Governance Committee. | | ✓ | Adoption of Minimum Stock Ownership Requirements for Our Executive Officers and Non-Management Directors to Reinforce Alignment with Stockholders: Starting in 2023, we implemented and require compliance with meaningful stock ownership guidelines for certain officers and non-management directors to reinforce alignment with our stockholders. | X | No Compensation or Incentives that Encourage Unnecessary or Excessive Risk-Taking: While our compensation program rewards the Company's senior leadership team for achievement of short- and long-term strategic and operational goals as measured through achievement of multiple operational metrics, our Compensation Committee reviews market considerations, internal considerations and the long-term interests of our stockholders, to ensure that excessively risky behaviors are not incentivized. | | ✓ | “Double-trigger” Change in Control Provisions for Equity Awards: In the event of a change in control, acceleration of vesting of equity awards will not occur unless there is also a qualifying termination of employment within a specified period following the change in control. | X | No Supplemental Retirement Benefits for Executives: We do not have any supplemental executive retirement or other nonqualified deferred compensation plans. | | ✓ | Independent Compensation Committee Advised by Independent Compensation Consultant: The Compensation Committee, like all of our principal Board committees, comprises solely independent directors, and retains an independent compensation consultant to advise it, as needed, on market compensation trends, and best pay practices. | X | No Liberal Share Recycling under Equity Compensation Plans: Shares tendered or held back for taxes or to cover the exercise price of a stock option will not be added back to the reserve pool under our equity plans. Similarly, shares we reacquire in the open market will not be added to the reserve pool. |
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Risk Management and Pay Alignment We believe our compensation program for NEOs encourages and rewards prudent business judgment and appropriate risk-taking over the long-term. We believe the following factors are effective in mitigating risk relating to our executive compensation program including the risk that an executive will take action that is detrimental to our long-term interests in order to increase the executive’s short-term performance-based compensation: •Governance and Management Processes. Together with the Audit Committee, our Board is responsible for overseeing the risk management processes associated with our operations, and seeking to ensure that appropriate general and specific risk mitigation considerations are implemented by management for the most significant risks facing our Company and giving due consideration to these risks in our business and operations planning. Our Compensation Committee is responsible for considering risk mitigation issues and for including strategies to mitigate risk in our executive compensation program. •Regular Oversight. Risk management is regularly overseen by the Board and Audit Committee on a quarterly basis, covering particular risk management matters in connection with general oversight and approval of corporate matters, and through discussions relating to material risks affecting the Company presented by management and by our Finance, Legal, Risk Management/Insurance and Internal Audit departments. The Compensation Committee members also receive these presentations and take risk mitigation into account in designing our executive compensation program. •Multiple Performance Factors. We use multiple performance factors that encourage NEOs to focus on the overall health of the business rather than on a single financial measure. •Award Cap. Our annual non-equity incentive compensation for NEOs caps the maximum award payable to any individual. •Long-Term Equity Incentive Compensation. Our NEOs receive stock options and restricted stock units in varying amounts in accordance with a metrics-driven and goal-oriented, benchmarked approach. All awards are subject to vesting periods of no less than one year, and may include performance criteria in the vesting formula. We believe the long-term vesting period for stock options and restricted stock unit grants causes our executives to focus on long-term achievements and on building stockholder value. Role of the Compensation Committee in Compensation Decisions The Compensation Committee’s responsibility is to review and approve corporate goals relevant to the compensation of the CEO and, after an evaluation of the CEO’s performance in light of such goals, to set the compensation of the CEO. The Compensation Committee makes recommendations to the Board with respect to: ➢ the annual compensation of the senior executive officers of Global Industrial (excluding the CEO); ➢ the general compensation, benefits and perquisite policies and practices of the Company including our incentive-based and equity-based compensation plans; and ➢ all individual stock-based incentive grants. In addition, the Compensation Committee approves equity incentive compensation awards and is is the Compensation Committee's responsibility to work with the Audit Committee to ensure our compensation policies address and promote our risk management goals and objectives. Independent Compensation Consultant The Compensation Committee is empowered to retain third-party compensation consultants to provide assistance with respect to compensation strategies, market practices, market research data and our compensation goals. Korn Ferry, US serves as the Compensation Committee’s independent compensation consultant, and has conducted a benchmarking assessment of compensation levels and perquisites for the executive team. The compensation consultant through a separate engagement with the Company has also advised on employee compensation benchmarking for certain management roles and provided a comprehensive overview of the compensation strategy and long-term incentive plan design at Global Industrial. Additionally, Korn Ferry and its affiliate were engaged in 2023 and prior years by the Company for certain executive search services. The fee for these executive search services in 2023 was $230,000. Taking into consideration the independence factors set forth in applicable SEC and NYSE rules, the Compensation Committee determined that Korn Ferry was independent and that its work did not raise any conflicts of interest. Market Comparison In 2022, our Compensation Committee retained a compensation consultant to conduct a review of current market information relating to compensation practices. In February 2023, the Compensation Committee and Board, taking into consideration the recommendations of the compensation consultant, revised the Company's peer set. In performing its review of market compensation practice and determining the peer set, Korn Ferry used a comparator group screening methodology that considered several financial and non-financial considerations, including but not limited to company size, complexity, similarity, revenue and pay quantum. All of the peer set companies had revenues between $575M and $3B (approximately 0.5x to 3x the Company’s revenue). Below are the companies in our peer set for 2023:
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| | | Percent Payout | | | | | Non-Equity Incentive Compensation Determinants (%) | Threshold (%) | Target (%) | Maximum (%) | | Adjusted Operating Income | 55 | 50 | 100 | 175 | | Net Sales Performance | 15 | 50 | 100 | 175 | | Non-Financial Company Performance-Based Metrics | 15 | 50 | 100 | 100 | | Individual Performance-Based Metrics | 15 | 40 | 100 | 110 | | Total | 100 | 48.5 | 100 | 154 |
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Discretionary Adjustments Due to Exceptional Circumstances The Compensation Committee has the discretion to recommend to the Board adjustments of the performance-based targets based on exceptional events such as acquisitions, other one-time charges or gains, or unforeseen circumstances that can skew normal operating results. Targets and non-equity incentive compensation are also subject to adjustment to prevent unreasonable results in the strict application of these formulas. In light of the volatility in the pricing and cost environment in 2023, the Compensation Committee exercised its discretion to recommend that the Board adjust the threshold amount of adjusted operating income for non-equity incentive compensation eligibility to 75% from 80% relative to the Company’s annual operating plan. For 2023, the actual adjusted operating income was 78.8% relative to the Company's annual operating plan. Taking into account the discretionary adjustment to threshold, linear interpolation of actual results resulted in the following payout for our NEOs, other than as noted above.
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| | | Percent Payout | | | | | Non-Equity Incentive Compensation Determinants (%) | Threshold (%) | Target (%) | Maximum (%) | | Adjusted Operating Income | 55 | 37.5 | 100 | 175 | | Net Sales Performance | 15 | 50 | 100 | 175 | | Non-Financial Company Performance-Based Metrics | 15 | 50 | 100 | 100 | | Individual Performance-Based Metrics | 15 | 40 | 100 | 110 | | Total | 100 | 41.6 | 100 | 154 |
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| | | | | | Non-Financial Company Performance Metrics | | | | | | | Name | Target ($) | Cap (%) | Adjusted Operating Income (%) | Net Sales Performance (%) | Customer Scorecard (%) | Operational Scorecard (%) | Product Merchandising Scorecard (%) | Human Capital Scorecard (%) | Strategic Plan Implementation Scorecard (%) | Individual Objectives (%) | | Barry Litwin | 1,327,995 | 111 | 60 | 20 | 4 | 4 | 4 | 4 | 4 | 0 | | Thomas Clark | 268,200 | 154 | 55 | 15 | 3 | 3 | 3 | 3 | 3 | 15 | | Claudia Hughes | 227,100 | 154 | 55 | 15 | 3 | 3 | 3 | 3 | 3 | 15 | | Manoj Shetty | 267,900 | 154 | 55 | 15 | 3 | 3 | 3 | 3 | 3 | 15 |
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| Name | Adjusted Operating Income (%) | | Net Sales Performance (%) | | Customer Scorecard (%) | Operational Scorecard (%) | Product Merchandising Scorecard (%) | Human Capital Scorecard (%) | Strategic Plan Implementation Scorecard (%) | Individual Objectives (%) | Weighted Average Eligible Non-Equity Incentive Compensation (%) | | | Actual | Payout Ratio | Actual | Payout Ratio | Actual | Actual | Actual | Actual | Actual | Actual | | | Barry Litwin | 78 | 16 | 90 | 50 | 68 | 88 | 27 | 100 | 87 | N/A | 34 | | Thomas Clark | 78 | 45 | 90 | 75 | 68 | 88 | 27 | 100 | 87 | 100 | 62 | | Claudia Hughes | 78 | 45 | 90 | 75 | 68 | 88 | 27 | 100 | 87 | 100 | 62 | | Manoj Shetty | 78 | 45 | 90 | 75 | 68 | 88 | 27 | 100 | 87 | 100 | 62 |
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Long-Term Equity Awards Equity-based compensation provides an incentive for NEOs to manage the Company with a view to achieving results which would increase our stock price over the long-term and, therefore, the return to our stockholders. Long-Term Incentive Plan Basic Features and Types of Awards. In March 2020, our Board adopted the Global Industrial Company 2020 Omnibus Long-Term Incentive Plan (the “Equity Plan”), which was approved by our stockholders in June 2020. The equity grants made in 2023 were made under the Equity Plan. The Equity Plan is intended to help us (i) attract and retain exceptional directors, including independent directors, executive personnel and other key employees, including consultants and advisors to the Company and its affiliates; (ii) motivate such award recipients by means of performance-related incentives to achieve longer-range performance goals; iii) enable such recipients to participate in the long-term growth and financial success of the Company; and (iv) help encourage retention. The Equity Plan provides for the granting of various equity- or cash-based awards, subject to certain limits including a maximum of 1,500,000 shares (or $10,000,000 in the case of cash performance awards) per individual per year. Under the Equity Plan, an aggregate of 7,500,000 shares of common stock were authorized for stock-based awards, of which 6,816,327 shares remained available for future issuance as of the April 12, 2024 record date. Administration of the Equity Plan. The Compensation Committee has the authority to administer, interpret and construe any provision of the Equity Plan and to adopt such rules and regulations for administering the Equity Plan as it deems necessary or appropriate. Further, the Compensation Committee has sole discretion over the terms and conditions of any award, including: •the persons who will receive awards; •the type of awards granted; •the number of shares subject to each award; •exercise price of an award; •expiration dates; •vesting schedules; •distribution and delivery schedules; •forfeiture provisions; •conditions on the achievement of specified performance goals for the granting or vesting of options, restricted stock, restricted stock units or cash awards; and •other material features of awards. Key Features of Annual Long-Term Equity Awards. In consultation with our compensation consultant, in 2023 the Company adopted several changes to the structure of our annual long-term equity awards. These changes included, among others, changes to the mix of equity awards to include time-based restricted stock unit awards, in addition to performance-based restricted stock unit awards and options. Other changes included changing the performance measurement period and elimination of deferred distribution after vesting for our restricted stock unit awards, and imposition of minimum equity holding requirements for certain directors and officers. Mr. Litwin's annual equity award is determined in accordance with his employment agreement. Messrs. Richard, Robert and Bruce Leeds do not participate in any equity awards. For more information, see Employment Arrangements with Named Executive Officers on page 55 of this Proxy Statement. Some of the key features adopted by the Compensation Committee for the Company's long-term equity awards in 2023 are as follows: •Annual awards of target equity incentive compensation. We make annual awards of equity incentive compensation within ranges tiered by position. For NEOs, except as noted below, equity awards generally can range from 0 to 75% of target non-equity incentive compensation (or more in exceptional circumstances). For 2023, annual awards of target equity incentive compensation were denominated as 50% performance-based restricted stock units, 25% stock options and 25% time-based restricted stock units (number of shares based on relative fair market value including applying Black-Scholes formula for options valuation). •Vesting of performance-based restricted stock units. Starting in 2023 we have provided that performance-based restricted stock unit awards will cliff-vest at the conclusion of a three year performance period based upon three-year achievement of cumulative adjusted operating income results (e.g. performance-based restricted stock units granted in 2023 will cliff vest at the conclusion of December 31, 2025), subject to continuous employment with Global Industrial (with certain exceptions for qualifying terminations). •Vesting of time-based restricted stock units and stock options. Generally the time-based restricted stock units and stock options vest ratably over four years with 25% vesting on each anniversary of the grant date, subject to continuous employment with Global Industrial (with certain exceptions for qualifying terminations). Components of Current Equity Awards. Outstanding equity-based awards consist of two distinct types of equity compensation: •non-qualified stock options granted at 100% of the stock’s fair market value on the grant date (based on the NYSE closing price of our common stock on that date), subject to repricing; and •restricted stock units granted subject to vesting conditions including both time and / or performance criteria (and beginning in 2020 through 2022 subject to deferred delivery of vested restricted stock unit awards). Future Equity Awards. Future awards under the Equity Plan may be: •incentive stock options; •non-qualified stock options; •stock appreciation rights; •restricted stock; •restricted stock units; •cash performance awards; or •other stock-based awards. CEO Annual Equity Awards. Mr. Litwin's annual equity award is determined in accordance with his employment agreement, see Employment Arrangements with Named Executive Officers on page 55 of this Proxy Statement. Anti-Hedging and Anti-Pledging Policy The Company does not have a policy regarding the ability of its employees to hedge or pledge Company securities, including with respect to the types of transactions identified in Item 407(i)(1) of Regulation S-K. Clawback Policy Effective October 1, 2023, the Board of Directors adopted a clawback policy in compliance with NYSE listing rules and Section 10D of the Exchange Act that provides for recovery of incentive compensation, if any, in excess of what would have been paid to our executive officers in the event the Company is required to prepare an accounting restatement. Stock Ownership Guidelines The Compensation Committee believes that directors and officers should have a clear financial alignment with our stockholders, and for this reason, implemented stock ownership guidelines for certain officers and non-management directors. Unearned performance-based restricted stock units, unvested time-based restricted stock units and unvested restricted stock do not count towards ownership of our common stock under the guidelines. For the CEO, the multiple is three times his base salary, while for the other executive officers, the multiple is one times base salary, and for the non-management directors, the multiple is one times the base cash retainer, in each case with a five-year phase-in period. Tax Deductibility of Compensation Section 162(m) of the Internal Revenue Code (the “Code”) limits to $1,000,000 the U.S. federal income tax deductibility of compensation paid in one year to a company's executive officers. While the Code limits the deductibility of compensation paid to our executive officers, our Compensation Committee will-consistent with its past practice-continue to retain flexibility to design compensation programs that are in the best long-term interests of the Company and our stockholders, with deductibility of compensation being one of a variety of considerations taken into account. Benefits, Perquisites and Other Compensation The Company provides various employee benefit programs to our associates, including executive officers such as:
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•medical, dental, life and disability insurance benefits; •our 401(k) plan, which includes a company matching contribution; •our Employee Stock Purchase Program which offers employees the ability to purchase shares of our common stock at a discount to market prices on a predefined biannual schedule; •automobile allowances and related reimbursements to all executive officers and certain other members of Global Industrial's management team which are not provided to all employees; •severance payments and/or change of control payments pursuant to negotiated employment agreements with the Company (described below); and •paid parental leave for all associates who have worked for the Company for at least twelve months. The Company does not provide any pension benefits or deferred compensation under any defined contribution or other plan on a basis that is not tax-qualified. Other than the Company's 401(k) programs, the Company does not provide retirement benefits. Compensation Committee Report The Compensation Committee has reviewed and discussed the above Compensation Discussion and Analysis with management. Based on its review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in the Proxy Statement and incorporated by reference into our Annual Report on Form 10-K for the year ended December 31, 2023. Submitted by the Compensation Committee of the Board, Chad M. Lindbloom (Chairman)
Robert D. Rosenthal
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Option Awards ($)(2) | Non-Equity Incentive Compensation ($)(3) | All Other Compensation ($) | Total ($) | | Richard B. Leeds Executive Chairman | 2023 | 950,000 | | | | | 30,000(4) | 980,000 | | | 2022 | 950,000 | | | | | 30,000 | 980,000 | | | 2021 | 950,000 | | | | | 30,000 | 980,000 | | Bruce Leeds Vice Chairman | 2023 | 950,000 | | | | | 30,000(4) | 980,000 | | | 2022 | 950,000 | | | | | 30,000 | 980,000 | | | 2021 | 950,000 | | | | | 30,000 | 980,000 | | Robert Leeds Executive Chairman | 2023 | 950,000 | | | | | 30,000(4) | 980,000 | | | 2022 | 950,000 | | | | | 30,000 | 980,000 | | | 2021 | 950,000 | | | | | 30,000 | 980,000 | | Barry Litwin Chief Executive Officer | 2023 | 983,700 | | 900,012 | 199,978 | 456,508 | 234,859(5) | 2,775,057 | | | 2022 | 955,000 | | 1,700,000 | | 1,322,376 | 259,860 | 4,237,236 | | | 2021 | 909,600 | | 850,000 | 150,000 | 787,700 | 297,200 | 2,994,500 | | Thomas Clark Senior Vice President and Chief Financial Officer | 2023 | 536,400 | | 481,118 | 67,036 | 166,457 | 38,557(6) | 1,289,568 | | | 2022 | 518,200 | | 97,200 | 97,200 | 253,755 | 39,895 | 1,006,250 | | | 2021 | 505,600 | | 94,800 | 94,800 | 177,900 | 51,800 | 924,900 | | Claudia Hughes(7) Senior Vice President and Chief Sales Officer | 2023 | 454,200 | | 385,329 | 56,765 | 140,970 | 40,821(8) | 1,078,085 | | | 2022 | 441,000 | | 297,700 | 82,700 | 215,945 | 29,114 | 1,066,459 | | | 2021 | | | | | | | | | Manoj Shetty(9) Senior Vice President and Chief Information Officer | 2023 | 535,800 | | 200,900 | 66,968 | 166,288 | 34,486(10) | 1,004,442 | | | 2022 | 525,300 | | 98,500 | 98,500 | 257,225 | 43,612 | 1,023,137 | | | 2021 | | | | | | | |
Robert D. Rosenthal
| Year (a) | Summary Compensation Table Total for PEO(1)(2) ($) (b) | Compensation Actually Paid to PEO(3)(4) ($) (c) | Average Summary Compensation Table Total for Non-PEO NEOs(3) ($)(d) | Average Compensation Actually Paid to Non-PEO NEOs (e)(1)(3)(4) | Value of Initial Fixed $100 Investment Based On:(5) | | Net Income ($mm) (h) | Adjusted Operating Income ($mm) (i) | | | | | | | Total Shareholder Return (f) | Peer Group Total Shareholder Return (g) | | | | 2023 | 2,775,057 | 4,902,796 | 1,052,016 | 1,458,579 | 193.31 | 157.48 | 70.7 | 96.5 | | 2022 | 4,237,236 | 2,166,146 | 1,036,904 | 703,292 | 113.95 | 138.39 | 78.8 | 105.2 | | 2021 | 2,994,500 | 3,543,568 | 1,075,700 | 963,934 | 193.48 | 202.44 | 103.3 | 88.0 | | 2020 | 3,043,500 | 4,189,473 | 1,155,400 | 1,432,153 | 162.81 | 141.94 | 65.4 | 84.1 |