DEF 14A of MasterCraft Boat Holdings, Inc.
Filed Sep 15, 2023 · FY20230000950170-23-048269
DIRECTOR NOMINEES
DIRECTOR NOMINEES The following table provides summary information about all director nominees. Each director is being nominated for a one-year term that will expire at our next annual meeting of shareholders. The directors will be elected by the affirmative vote of a majority of the votes cast. Pursuant to our Corporate Governance Guidelines, if an incumbent director fails to receive a majority of the votes cast, the incumbent director will promptly tender his or her irrevocable offer of resignation to the Board. The Board, upon recommendation by the Nominating and Corporate Governance Committee, can then choose to accept the resignation, reject it or take such other action that the Board deems appropriate. For more information about the director nominees, see page 6.
DIRECTOR NOMINEES
| | | | | | W. PATRICK BATTLE | JACLYN BAUMGARTEN | FREDERICK A. BRIGHTBILL | DONALD C. CAMPION | | Age: 60 | Age: 45 | Age: 71 | Age: 75 | | Independent | Independent | CEO & Chairman | Independent | | Committees: N, S* | Committees: N, S | | Committees: A*, C |
DIRECTOR NOMINEES
| | | | | | JENNIFER DEASON | ROCH LAMBERT | PETER G. LEEMPUTTE | KAMILAH MITCHELL-THOMAS | | Age: 48 | Age: 60 | Age: 66 | Age: 51 | | Independent | Independent | Independent | Independent | | Committees: A, S | Committees: A, N*, S | Committees: A, C* | Committees: C, N |
DIRECTOR NOMINEES
Committees Key: Audit (A), Compensation (C), Nominating and Corporate Governance (N), Strategy (S), Committee Chair (*)
DIRECTOR NOMINEES
| MASTERCRAFT BOAT HOLDINGS, INC. | 2023 PROXY STATEMENT | 2 |
OUR BOARD
OUR BOARD
PROPOSAL 1 - ELECTION OF DIRECTORS
PROPOSAL 1 - ELECTION OF DIRECTORS Each of the director nominees listed below are currently directors of the Company. The following is a brief summary of each director nominee’s business experience and qualifications and other public company directorships held currently or in the last five years. The Board believes that each of the eight nominees are well qualified to serve on the Board, and has set forth in the biographies below each nominee’s key experiences, qualifications and attributes that led the Board to conclude that they should serve as a director.
PROPOSAL 1 - ELECTION OF DIRECTORS
| | | | | | Managing Partner, Stillwater Family Holdings Age: 60 Independent Director since: 2017 Committees: • Nominating and Corporate Governance • Strategy (Chair) | | | EXPERIENCE: | • Managing Partner, Stillwater Family Holdings and was instrumental in launching Experience and Fermata Partners (present) • Chairman, IMG College, following the acquisition of The Collegiate Licensing Company (CLC) by IMG Worldwide. Under his leadership, IMG College became the leader in developing and managing integrated licensing, marketing, and multimedia rights programs for more than 200 U.S. universities, conferences, bowls, and the NCAA • President and Chief Executive Officer, CLC | | | QUALIFICATIONS: | • Operational, strategic, and marketing expertise • Senior leadership experience | | | EDUCATION: | • B.A., Marketing, Georgia State University | | | OTHER BOARDS: | • Acuity Brands, Inc. (NYSE: AYI), member of the Compensation Committee and Governance Committee | |
PROPOSAL 1 - ELECTION OF DIRECTORS
| MASTERCRAFT BOAT HOLDINGS, INC. | 2023 PROXY STATEMENT | 6 |
PROPOSAL 1 - ELECTION OF DIRECTORS
| | | | | | Managing Partner, IDC Ventures Age: 45 Independent Director since: 2018 Committees: • Nominating and Corporate Governance • Strategy | | | EXPERIENCE: | • Managing Partner, IDC Ventures (present) • Co-Founder and Former Chief Executive Officer, Boatsetter, the world’s leading boat sharing platform with boats throughout the United States, Mexico, the Bahamas, the Caribbean, South America and the Mediterranean • Founder and Chief Executive Officer, Cruzin Inc. (now merged with Boatsetter), where she led a team of marine and insurance industry leaders to create the insurance policy that paved the way for an entire boat sharing industry • Partner and Chief Operating Officer, AH Global • Director of Strategy, DaVita • Development Manager, Westfield Group • Consultant, IBM and PricewaterhouseCoopers | | | QUALIFICATIONS: | • Substantial experience in the boating industry • Strategic and marketing experience • Senior leadership experience | | | EDUCATION: | • B.A., cum laude, Wellesley College • M.B.A., Stanford University Graduate School of Business | | | OTHER BOARDS: | • Two private boards | |
PROPOSAL 1 - ELECTION OF DIRECTORS
| MASTERCRAFT BOAT HOLDINGS, INC. | 2023 PROXY STATEMENT | 7 |
PROPOSAL 1 - ELECTION OF DIRECTORS
| | | | | | Chief Executive Officer and Chairman, MasterCraft Boat Holdings, Inc. Age: 71 Chairman since: 2015 Director since: 2015 | | | EXPERIENCE: | • Chief Executive Officer, MasterCraft (2019 – present) • Principal, Brightbill Advisors, Vantage Development and JB Acquisitions • President of the Aluminum Boat Group, Brunswick Corporation • Various leadership roles, including President of the Outboard Business Unit and Integrated Operations Division, Mercury Marine • Senior leadership positions; including, President, CFO, VP Marketing and Sales in consumer durable businesses | | | QUALIFICATIONS: | • Boating industry experience • Leadership, strategic, product development and operational skills | | | EDUCATION: | • B.S., Finance, University of Illinois at Urbana Champaign • M.B.A., University of Chicago | | | OTHER BOARDS | • Previously served on many private company boards | |
PROPOSAL 1 - ELECTION OF DIRECTORS
| MASTERCRAFT BOAT HOLDINGS, INC. | 2023 PROXY STATEMENT | 8 |
PROPOSAL 1 - ELECTION OF DIRECTORS
| | | | | | Former Chief Financial Officer, VeriFone, Inc. Age: 75 Independent Director since: 2015 Committees: • Audit (Chair) • Compensation | | | EXPERIENCE: | • Chief Financial Officer of several public and private companies, including VeriFone, Inc., Special Devices, Inc., Cambridge Industries, Inc., Oxford Automotive, Inc., and Delco Electronics Corporation | | | QUALIFICATIONS: | • Substantial accounting and tax experience • Leadership positions in diverse manufacturing businesses • Board service experience, including as chair of several audit committees | | | EDUCATION: | • B.S., Applied Mathematics, University of Michigan College of Engineering • M.B.A., University of Michigan School of Business Administration | | | OTHER BOARDS: | • Haynes International, Inc., Chairman of the Audit Committee and member of the Compensation Committee • Previously served on the boards of many public and private companies | |
PROPOSAL 1 - ELECTION OF DIRECTORS
| MASTERCRAFT BOAT HOLDINGS, INC. | 2023 PROXY STATEMENT | 9 |
PROPOSAL 1 - ELECTION OF DIRECTORS
| | | | | | Chief Executive Officer, Home Partners of America Age: 48 Independent Director since: 2021 Committees: • Audit • Strategy | | | EXPERIENCE: | • Chief Executive Officer, Home Partners of America (present) • Board Chair and former Chief Executive Officer, Belong Acquisition Corp., a special purpose acquisition company • Co-founder and Chief Business Officer/Chief Financial Officer, Flowcode • Executive Vice President, Head of Corporate Development and Strategy, Sotheby’s • Chief Financial Officer, The Weather Channel, where she worked to reposition the organization from a more traditional TV media company towards a data-focused, mobile-first advertising platform, prior to the sale of the digital and B2B businesses to IBM. • Served as Executive Vice President and in several interim operating roles such as President, Chief Marketing Officer and Chief Financial Officer, Bain Capital | | | QUALIFICATIONS: | • Financial and strategic expertise • Media, entertainment, and retail industry | | | EDUCATION: | • B.A., Yale University • M.B.A., Stanford University | | | OTHER BOARDS: | • Belong Acquisition Corp. • Concentrix Corporation | |
PROPOSAL 1 - ELECTION OF DIRECTORS
| MASTERCRAFT BOAT HOLDINGS, INC. | 2023 PROXY STATEMENT | 10 |
PROPOSAL 1 - ELECTION OF DIRECTORS
| | | | | | Operating Partner, Core Industrial Partners Age: 60 Lead Independent Director since: 2019 Independent Director since: 2016 Committees: • Audit • Nominating and Corporate Governance (Chair) • Strategy | | | EXPERIENCE: | • Operating Partner at Core Industrial Partners (present) • President of Lippert Automotive, an aftermarket automotive manufacturer and a division of LCI • Chief Executive Officer, Rec Boat Holdings, an international designer, manufacturer and distributor of powerboats • Vice President and General Manager of several divisions at Bombardier Recreational Products (BRP), an international recreational products company, including the Sea-Doo, Ski-Doo and Evinrude divisions • Various leadership, engineering and production roles, Bombardier and Aquilon Technologies, a manufacturer of attachments for farm equipment OEMs | | | QUALIFICATIONS: | • Substantial industry experience • Leadership experience in diverse manufacturing businesses • Extensive knowledge of operational matters in the recreational products and powerboat industries | | | EDUCATION: | • B.Eng., Mechanical/Aeronautical Engineering, Ecole Polytechnique de Montreal • D.B.A., Universite Laval | | | OTHER BOARDS: | • Two private boards | |
PROPOSAL 1 - ELECTION OF DIRECTORS
| MASTERCRAFT BOAT HOLDINGS, INC. | 2023 PROXY STATEMENT | 11 |
PROPOSAL 1 - ELECTION OF DIRECTORS
| | | | | | Former Chief Financial Officer, Keurig Green Mountain, Inc. Age: 66 Independent Director since: 2016 Committees: • Audit • Compensation (Chair) | | | EXPERIENCE: | • Chief Financial Officer and Treasurer, Keurig Green Mountain, Inc., a leader in specialty coffee, coffee makers, teas and other beverages • Executive Vice President and Chief Financial Officer, Mead Johnson Nutrition Company, a global leader in infant and children’s nutrition • Senior Vice President and Chief Financial Officer, Brunswick Corporation, a global manufacturer of marine products • Various management positions at Chicago Title Corporation, Mercer Management Consulting, Armco Inc., FMC Corporation and BP | | | QUALIFICATIONS: | • Significant financial and accounting expertise gained in handling financial responsibilities for several leading corporations • Extensive marine industry experience • Leadership skills | | | EDUCATION: | • B.S., Chemical Engineering, Washington University, St. Louis • M.B.A., Finance, University of Chicago | | | OTHER BOARDS: | • Fathom Digital Manufacturing • Ecogensus LLC (private) • Previously served on the boards of other public companies | |
PROPOSAL 1 - ELECTION OF DIRECTORS
| MASTERCRAFT BOAT HOLDINGS, INC. | 2023 PROXY STATEMENT | 12 |
PROPOSAL 1 - ELECTION OF DIRECTORS
| | | | | | Senior Vice President, Head of People, Roku, Inc. Age: 51 Independent Director since: 2022 Committees: • Compensation • Nominating and Corporate Governance | | | EXPERIENCE: | • Senior Vice President, Head of People, Roku, Inc. (present) • Chief People Officer, Dow Jones & Company • Senior Vice President, People & Culture, A+E Networks | | | QUALIFICATIONS: | • Extensive strategic and people expertise • Leadership skills • Media, entertainment, and technology industry | | | EDUCATION: | • B.A., Economics, Lincoln University | | | OTHER BOARDS: | • Success Academy Charter Schools (private) • Previously served on Dow Jones News Fund (private) | |
PROPOSAL 1 - ELECTION OF DIRECTORS
| RECOMMENDATION OF THE BOARD OF DIRECTORS | | | The Board recommends a vote "FOR" each of the director nominees. | |
PROPOSAL 1 - ELECTION OF DIRECTORS
| MASTERCRAFT BOAT HOLDINGS, INC. | 2023 PROXY STATEMENT | 13 |
CORPORATE GOVERNANCE
CORPORATE GOVERNANCE
HOW WE ARE SELECTED AND ELECTED
HOW WE ARE SELECTED AND ELECTED
SELECTION OF DIRECTOR NOMINEES
SELECTION OF DIRECTOR NOMINEES GENERAL CRITERIA AND PROCESS It is the Nominating and Corporate Governance Committee’s responsibility to review and recommend to the Board a slate of nominees for director for election at each annual meeting of shareholders and to identify one or more candidates to fill any vacancies that may occur on the Board. In developing recommendations for new director candidates, the Nominating and Corporate Governance Committee identifies potential individuals whose qualifications and skills reflect those desired by the Board, and evaluates and recommends to the Board all nominees for board membership as specified in the committee’s charter. As expressed in our Corporate Governance Guidelines, we do not set specific criteria for directors, but the Company seeks to align the composition of the Board with the Company’s strategic direction so that the directors bring skills, experience and backgrounds that are relevant to the key strategic and operational issues that they will oversee and approve. Directors are selected for their integrity, ethics, seasoned judgment, breadth of experience, insight, knowledge and business acumen, among other things. Diversity of race, ethnicity, gender and age are also important factors in evaluating candidates for election to the Board. Accordingly, pursuant to our Corporate Governance Guidelines, the Nominating and Corporate Governance Committee will ensure that diverse candidates are included in each pool of candidates from which Board nominees are chosen. Leadership skills and executive experience, expertise in recreational boating or vehicles, dealer network knowledge, familiarity with issues affecting global businesses, financial and accounting knowledge, prior experience in the Company’s geographic markets, expertise in operations, strategic planning and marketing expertise, may also be among the relevant selection criteria. The Nominating and Corporate Governance Committee believes that directors must be willing to devote sufficient time to carrying out their duties and responsibilities effectively and should be committed to serve on the Board for an appropriate period of time. In addition, the Company strives to maintain a Board that reflects passion and commitment to the Company. These criteria will vary over time depending on the needs of the Board. For each of the nominees to the Board, the biographies included in this Proxy Statement highlight the experience and qualifications that were among the most important to the Nominating and Corporate Governance Committee in concluding that the nominee should serve as a director. SHAREHOLDER RECOMMENDATION OF CANDIDATES FOR DIRECTOR Shareholders wishing to recommend candidates to be nominated for election to the Company’s Board may do so by sending to the attention of our Corporate Secretary at the address provided in this Proxy Statement a statement setting forth the information required by the advance notice provision in our Fourth Amended and Restated Bylaws (the “Bylaws”). Shareholder recommendations provided to our Corporate Secretary will be considered and evaluated by the Nominating and Corporate Governance Committee in the same manner as candidates recommended from other sources. For information regarding shareholder nominations of directors and shareholder proposals, please see the “Next Annual Meeting—Shareholder Proposals” section of this Proxy Statement. DIRECTOR SKILLS, QUALIFICATIONS AND EXPERIENCE Under the terms of its charter, the Nominating and Corporate Governance Committee is responsible for determining criteria and qualifications for director nominees to be used in reviewing and selecting director candidates, including those described in the Corporate Governance Guidelines. The Board and the Nominating and Corporate Governance Committee believe that it is important that our directors demonstrate: • a high level of personal and professional ethics, integrity and moral character; • a commitment to the long-term interests of our shareholders; • sound business judgment; • the skills, knowledge and expertise that in the aggregate are useful in overseeing and providing strategic direction to the Company’s business; and availability to devote sufficient time for preparation and participation in board and committee meetings.
SELECTION OF DIRECTOR NOMINEES
| MASTERCRAFT BOAT HOLDINGS, INC. | 2023 PROXY STATEMENT | 14 |
SELECTION OF DIRECTOR NOMINEES
The Nominating and Corporate Governance Committee is responsible for recommending to the Board a slate of nominees for election at each annual meeting of shareholders. Nominees may be suggested by directors, members of management, shareholders or, in some cases, by a third-party search firm. The Nominating and Corporate Governance Committee considers a wide range of factors when assessing potential director nominees. This includes consideration of the current composition of the Board, any perceived need for one or more particular areas of expertise, the balance of management and independent directors, the need for committee-specific expertise, the evaluations of other prospective nominees and the qualifications of each potential nominee relative to the attributes, skills and experience described above. Using our director skills matrix as a guide, as well as the results of our annual Board and committee self-assessment process, the Nominating and Corporate Governance Committee evaluates the composition of our Board annually and identifies for consideration by the full Board areas of expertise and other qualities that would complement and enhance our current Board. The diverse set of core competencies represented on our current Board is summarized below:
SELECTION OF DIRECTOR NOMINEES
| | | | | | | | | | | | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | | LEADERSHIP | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | | MERGERS AND ACQUISITIONS | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | | PUBLIC COMPANY BOARD | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | | | | STRATEGIC PLANNING | ☑ | ☑ | ☑ | ☑ | ☑ | | | | | FINANCE AND ACCOUNTING | ☑ | ☑ | ☑ | ☑ | ☑ | | | | | HUMAN RESOURCES AND COMPENSATION | ☑ | ☑ | ☑ | ☑ | | | | | | RELATED INDUSTRY | ☑ | ☑ | ☑ | ☑ | | | | | | SALES AND MARKETING | ☑ | ☑ | ☑ | ☑ | | | | | | INTERNATIONAL | ☑ | ☑ | ☑ | ☑ | | | | | | OPERATIONS AND MANUFACTURING | ☑ | ☑ | ☑ | | | | | | | TECHNOLOGY AND CYBERSECURITY | ☑ | ☑ | | | | | | | | PRODUCT DEVELOPMENT AND INNOVATION | ☑ | ☑ | | | | | | |
SELECTION OF DIRECTOR NOMINEES
Seven out of eight directors are independent. The average tenure of our directors is 5.4 years. For additional information on each director, see the biographies in the “Proposal 1—Election of Directors” section of this Proxy Statement. BOARD DIVERSITY The diversity of our Board is an important factor in our director recruitment process. Three of our eight current directors are women and one is racially/ethnically diverse. We are committed to continuing to focus on diversity in determining the composition and make-up of the Board. In addition to our focus on diversity during the recruitment and evaluation of current directors and potential director nominees, our Corporate Governance Guidelines require that diverse candidates be included in each pool of new director candidates. To achieve diversity among directors, our Nominating and Corporate Governance Committee will consider a number of demographic factors, including, but not limited to, race, gender, ethnicity, culture, nationality and age to continue developing a board that reflects diverse backgrounds, viewpoints, experience, skills and expertise.
SELECTION OF DIRECTOR NOMINEES
| MASTERCRAFT BOAT HOLDINGS, INC. | 2023 PROXY STATEMENT | 15 |
BOARD COMMITTEES AND MEMBERSHIP
| | MEMBERS | | • Determining compensation for our most highly paid employees • Determining director compensation • Administering our other compensation programs • Overseeing the Company's clawback policy • Establishing, periodically re-evaluating and, where appropriate, adjusting and administering policies concerning compensation of management personnel • Oversight of Social function of ESG matters | Peter G. Leemputte, Chair Donald C. Campion Kamilah Mitchell-Thomas | | | Number of meetings: 5 |
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION The following table sets forth information concerning the fiscal 2023 compensation of our non-employee directors that served during the period from July 1, 2022 through June 30, 2023:
DIRECTOR COMPENSATION
| NAME | FEES EARNED OR PAID IN CASH ($) | RESTRICTED STOCK AWARDS ($) | OTHER ($)1 | TOTAL($) | | W. Patrick Battle | 77,500 | 75,000 | — | 152,500 | | Jaclyn Baumgarten | 70,000 | 75,000 | 6,784 | 151,784 | | Donald C. Campion | 92,500 | 75,000 | 1,778 | 169,278 | | Jennifer Deason | 75,000 | 75,000 | 1,157 | 151,157 | | Roch Lambert | 112,500 | 75,000 | 5,017 | 192,517 | | Peter G. Leemputte | 87,500 | 75,000 | 1,036 | 163,536 | | Kamilah Mitchell-Thomas(2) | 45,715 | 46,644 | — | 92,359 |
DIRECTOR COMPENSATION
(1) The amounts in this column reflect imputed income for boat usage. Each of our Non-Employee Directors is provided the opportunity to use MasterCraft Boat Holdings, Inc. brand boats and trailers in order to better understand the quality, features, components, operation, etc. of our products, and to aid in the product development and portfolio strategy, while minimizing the cost to the Company. Directors are provided with use of boats at no charge, but are responsible for paying all insurance, maintenance, fuel and other fees, costs and charges (other than registration or use fees and taxes) related to their operation. (2) Ms. Mitchell-Thomas' fiscal 2023 compensation was prorated based on her term of service with the Board, having joined the Board on November 15, 2022. In fiscal 2023, non-management members of the Board received a $60,000 annual retainer related to their Board duties and responsibilities, which is paid in advance in four equal quarterly installments of $15,000 each. Beginning in 2024, non-management members of the Board will be entitled to a $70,000 annual retainer. Additionally, for both fiscal 2023 and fiscal 2024, there is a $25,000 annual retainer for serving as our Lead Independent Director, also paid in four equal quarterly installments. We reimburse directors for their out-of-pocket expenses incurred in attending meetings of the Board of Directors or any committee thereof. Directors also receive an additional annual retainer for each committee on which they serve, paid in four equal installments. Each Audit Committee member receives a $10,000 annual retainer. Additionally, there is a $15,000 annual retainer for serving as the chairman of the Audit Committee. Each Compensation Committee member receives a $7,500 annual retainer. Additionally, there is a $10,000 annual retainer for serving as the chairman of the Compensation Committee. Each Nominating and Corporate Governance Committee member receives a $5,000 annual retainer. Additionally, there is a $7,500 annual retainer for serving as the chairman of the Nominating and Corporate Governance Committee. Each Strategy Committee member receives a $5,000 annual retainer. Additionally, there is a $7,500 annual retainer for serving as the chairman of the Strategy Committee. Committee fees for fiscal 2024 will remain the same. Under the director compensation policy, each director may elect to receive all of his or her annual retainers in the form of common stock (in lieu of cash). Each non-employee director is also eligible to participate in our boat usage and testing program and may therefore receive certain additional benefits that we categorize as compensation for purposes of calculating a director’s compensation in this Proxy Statement. Pursuant to the director compensation policy in effect during fiscal 2023, we also granted an annual award of restricted stock with a grant date fair value of $75,000 to each non-employee director who received cash compensation. Ms. Mitchell-Thomas' fiscal 2023 compensation was prorated based on her term of service with the Board, having joined the Board on November 15, 2022. For fiscal 2024, the value of the annual restricted stock grant award will increase $15,000 to $90,000. The terms of each restricted stock award are set forth in a written award agreement between each director and us, which we intend will generally provide for vesting after one year of continued service as a director, prorated as necessary to account for changes in service on the Board, subject, in either case, to acceleration upon a change of control. Directors elected or appointed, or those who leave service on the Board mid-quarter will receive a prorated portion of the annual retainer and the annual award, in each case adjusted to reflect his or her period of service. Under the director compensation policy, the aggregate amount of cash and equity compensation that may be paid or granted to any non-employee director during any calendar year may not exceed $500,000, subject to limited exceptions. We have adopted a director stock ownership policy encouraging directors to hold shares of our common stock with a value equal to four times his or her annual cash retainer fee (exclusive of any committee retainers). All our directors have achieved the ownership threshold as of the date of this proxy, except two who have a short tenure on our board.
DIRECTOR COMPENSATION
| MASTERCRAFT BOAT HOLDINGS, INC. | 2023 PROXY STATEMENT | 21 |
ELEMENTS OF OUR COMPENSATION PROGRAM
| COMPENSATION ELEMENT | BRIEF DESCRIPTION | OBJECTIVES | | BASE SALARY | ➣ Fixed compensation | ➣ Provide a competitive, fixed level of cash compensation to attract and retain talented and skilled executives | | ANNUAL BONUSES: SHORT TERM INCENTIVE COMPENSATION | ➣ Variable, performance-based cash compensation earned based on achieving pre-established annual goals | ➣ Motivate executives to achieve or exceed our current-year financial goals and reward them for their achievements ➣ Aid in retention of key executives in a highly competitive market for talent | | LONG TERM EQUITY INCENTIVE AWARDS | ➣ Variable, equity-based compensation to promote achievement of longer-term goals | ➣ Align executives’ interests with those of our shareholders and encourage executive decision-making that maximizes growth and value creation over the long-term ➣ Aid in retention of key executives and ensure continuity of management in a highly competitive market for talent | | EMPLOYEE BENEFITS AND PERQUISITES | ➣ Participation in all broad-based employee health and welfare programs and retirement plans ➣ Allow usage of a Company-owned boat | ➣ Aid in retention of key executives in a highly competitive market for talent by providing overall benefits package competitive with industry peers ➣ Familiarize executives with the functionality and quality of current model year boats |
ELEMENTS OF OUR COMPENSATION PROGRAM
TERMS OF EMPLOYMENT We currently do not maintain employment agreements, severance or change in control agreements with any of our named executive officers. For Mr. Brightbill and Mr. Cloutier, the basic terms of their employment such as salary, bonus, incentive awards and benefits are set forth in an offer letter. There are no similar arrangements for Messrs. Oxley and Steinbarger. These offer letters do not provide for specific rights upon termination or change in control. All rights relating to accelerated vesting of equity awards upon termination or change in control are set forth in the LTIP or applicable award agreement. For a discussion of the offer letters, see “Offer Letters with our Named Executive Officers.” For a discussion regarding potential payments upon termination or change in control, see “Potential Payments upon Termination or Change in Control.”
STRUCTURE OF OUR COMPENSATION PROGRAM
ANNUAL BONUS: SHORT TERM CASH INCENTIVE COMPENSATION The Company has established the Short-Term Incentive Plan (“STIP”) to provide annual cash incentive compensation to our executives. The graphic below illustrates the weighting of the metrics and the calculation of the objective component of the STIP. Each component of the STIP determined on a segment level basis, and then aggregated to determine the consolidated results. For Messrs. Brightbill, Oxley and Steinbarger, STIP payouts are based on consolidated results. For Mr. May, President of Crest, and Mr. Cloutier, President of Aviara, STIP payouts are based on their respective segment performance. TARGET ANNUAL CASH INCENTIVE The target annual cash incentive is expressed as a percentage of each named executive officer’s base salary and is set at the beginning of each year by the Compensation Committee. The threshold annual incentive opportunity for each named executive officer ranges from 15.0 percent to 30.0 percent of their target opportunity, and the maximum annual incentive opportunity ranges from 95.0 percent to 190.0 percent of their target opportunity. The target opportunity for each named executive officer is as follows:
STRUCTURE OF OUR COMPENSATION PROGRAM
| AWARD OPPORTUNITY | | | | | NAMED EXECUTIVE OFFICER | BASE SALARY ($) | TARGET ANNUAL INCENTIVE OPPORTUNITY (as a % of base salary) | TARGET ANNUAL INCENTIVE OPPORTUNITY ($) | | Frederick A. Brightbill | 725,000 | 100% | 725,000 | | Timothy M. Oxley | 370,000 | 50% | 185,000 | | George Steinbarger | 315,000 | 50% | 157,500 | | Stephan Cloutier | 280,000 | 50% | 140,000 | | Patrick May | 280,000 | 60% | 168,000 |
STRUCTURE OF OUR COMPENSATION PROGRAM
| | | GOAL | | | | | | METRICS | WEIGHTING | MINIMUM | MAXIMUM | RESULTS | PERCENTAGE PAYOUT ATTAINED | ACHIEVEMENT | | FINANCIAL METRICS(1) | | | | | | | | Net Sales | 32% | $479.0 million | $820.9 million | $662.0 million | 91.9% | Between threshold and target | | Adjusted EBITDA(2) | 48% | $94.0 million | $165.1 million | $131.5 million | 94.9% | Between threshold and target | | STRATEGIC METRICS(3) | 20% | | | | — % | | | TOTAL (blended result) | 100% | | | | 75.0% | |
STRUCTURE OF OUR COMPENSATION PROGRAM
Financial metrics represent 80% of the bonus opportunity. (2) For additional information regarding and reconciliation of this non-GAAP financial measure, see “Appendix A - Reconciliation of Non-GAAP Measures.” (3) Strategic metrics represent 20% of the bonus opportunity, equally weighted over market share and CSI attainment. The consolidated results are made up of segment specific targets for each strategic metric. The table below sets forth the threshold, target and maximum percentages of base salary for awards under the 2023 STIP, together with the achievement and actual bonus levels paid to our named executive officers, based on actual Company and individual results.
STRUCTURE OF OUR COMPENSATION PROGRAM
| | AWARD OPPORTUNITY | | | ACHIEVEMENT | | BONUS EARNED | | | NAME | THRESHOLD | TARGET | MAXIMUM | ACHIEVEMENT (actual) | ACHIEVEMENT (as adjusted) | % OF TARGET | $ | | Frederick A. Brightbill | 30% of base salary | 100% of base salary | 190% of base salary | 75.0% | 75.0% | 75.0% | 543,506 | | Timothy M. Oxley | 15% of base salary | 50% of base salary | 95% of base salary | 75.0% | 75.0% | 75.0% | 138,688 | | George Steinbarger | 15% of base salary | 50% of base salary | 95% of base salary | 75.0% | 75.0% | 75.0% | 118,072 | | Stephan Cloutier(1) | 15% of base salary | 50% of base salary | 95% of base salary | — | — | — | — | | Patrick May(1) | 18% of base salary | 60% of base salary | 114% of base salary | 57.2% | 57.2% | 57.2% | 96,042 |
STRUCTURE OF OUR COMPENSATION PROGRAM
(1) Calculation is based upon financial and strategic metrics specific to Crest and Aviara. LONG-TERM EQUITY INCENTIVE COMPENSATION Equity awards represent an important component of our named executive officer compensation. We believe long-term incentive awards align the interests of our shareholders and our named executive officers by increasing the proprietary interest of our named executive officers in the Company’s growth and success, advance the Company’s interests by attracting and retaining qualified employees over time and motivate our executives to act in the long-term best interests of our shareholders. In particular, the Compensation Committee and the Board feel that one way to align the Company’s strategy with the executive long-term incentive compensation is to tie the awards directly to the Company’s performance. Long-Term Incentive Plan (“LTIP”) awards are granted to our executive officers annually under our Amended and Restated MasterCraft Boat Holdings, Inc. 2015 Incentive Award Plan. In order to balance performance and retention incentives, during fiscal 2023, LTIP awards consisted of 50% restricted stock awards (“RSAs”) and 50% performance stock units (“PSUs”). The Compensation Committee believes that RSAs promote an “ownership” culture, align executives’ interests with those of our shareholders and provide retention incentives for our executive officers, while PSUs act as an additional tool for linking individual interests of our executive officers to those of our shareholders. RSAs vest annually in equal installments over a three-year period, subject to the executive officer’s continued employment.
STRUCTURE OF OUR COMPENSATION PROGRAM
| PERFORMANCE METRIC | TARGET | RESULTS | ACHIEVEMENT | | Cumulative Adjusted EPS(1) | $7.15 | $12.70 | Above maximum | | Payout % | 100.0% | 200.0% | Maximum | | TSR Modifier | | 1.14x | | | Calculated Payout | | 227.2% | |
STRUCTURE OF OUR COMPENSATION PROGRAM
| RELATIVE TSR LEVEL | RELATIVE TSR MODIFIER | | 25th Percentile or less | -20.0% | | 50th Percentile | No adjustment | | 75th Percentile | 20.0% |
STRUCTURE OF OUR COMPENSATION PROGRAM
| NAMED EXECUTIVE OFFICER | SHARES SUBJECT TO PSUs GRANTED IN FISCAL 2021 | SHARES EARNED | SHARES EARNED (as a percentage of target) | | Frederick A. Brightbill | 26,316 | 59,790 | 227.2% | | Timothy M. Oxley | 6,204 | 14,096 | 227.2% | | George Steinbarger | 3,447 | 7,832 | 227.2% | | Patrick May | 4,061 | 9,227 | 227.2% |
INDUSTRY PEER GROUP
INDUSTRY PEER GROUP Management and the Compensation Committee, in consultation with WTW, have considered how to best use competitive market data in designing our executive compensation programs. The Compensation Committee considered multiple factors, including how such data would be used, whether the data would be aligned with shareholder expectations, the breadth, consistency and reliability of the data and our ability to compete effectively for top executive talent. As a result of this review, our Compensation Committee determined to use market data from two sources: published survey data reflecting the durable goods manufacturing industry (“Survey Data”) and a customized industry peer group (the “Custom Peer Group”). Together, these sources enable the Compensation Committee to make informed decisions in achieving its compensation objectives. The Survey Data is based on WTW’s Executive Compensation Survey, which includes approximately 1,000 companies across a broad range of industries. The Survey Data is adjusted, generally through regression analysis, to fit MasterCraft’s revenue scope. The Company did not select the companies that comprise the Survey Data, and the component companies’ identities were not a factor in the analysis. The Survey Data serves as a reliable market reference and is used as the primary source for market compensation data. The Custom Peer Group is used to provide comparative information for purposes of designing the overall executive compensation program, including design of the STIP and LTIP, and serves as a secondary source for market compensation data for the CEO and CFO positions. The Custom Peer Group is also used for benchmarking our Board of Director compensation program. In developing the Custom Peer Group, the Compensation Committee considered both quantitative factors (such as revenue, employee headcount, and market capitalization) and qualitative factors (such as industry focus within the recreation/leisure/marine markets and product
INDUSTRY PEER GROUP
| MASTERCRAFT BOAT HOLDINGS, INC. | 2023 PROXY STATEMENT | 34 |
INDUSTRY PEER GROUP
engineering complexity). Based upon this review, the Compensation Committee selected a custom peer group of 14 companies, shown below.
INDUSTRY PEER GROUP
| FISCAL 2023 PEER GROUP | | | American Outdoor Brands Corporation | MarineMax, Inc. | | Callaway Golf Company | Marine Products Corporation | | Clarus Corporation | Motorcar Parts of America, Inc. | | Fox Factory Holding Corp. | National Presto Industries, Inc. | | iRobot Corporation | Nautilus, Inc. | | Johnson Outdoors Inc. | Sturm, Ruger & Company, Inc. | | Malibu Boats, Inc. | Twin Disc, Incorporated |
SUMMARY COMPENSATION TABLE
SUMMARY COMPENSATION TABLE The following table sets forth information concerning the total compensation awarded to, earned by or paid to the named executive officers for fiscal years ended June 30, 2023, June 30, 2022 and June 30, 2021, calculated in accordance with SEC rules and regulations.
SUMMARY COMPENSATION TABLE
| YEAR | SALARY ($) | BONUS ($) | STOCK AWARDS ($)(1) | OPTION AWARDS ($)(1) | NON-EQUITY INCENTIVE PLAN COMPENSATION ($) | CHANGE IN PENSION VALUE AND NON-QUALIFIED DEFERRED COMPENSATION EARNINGS ($) | ALL OTHER COMPENSATION ($)(2) | TOTAL ($) | | FREDERICK A. BRIGHTBILL, CEO and Chairman of the Board | | | | | | | | | | 2023 | 725,000 | — | 1,450,020 | — | 543,506 | — | 20,860 | 2,739,386 | | 2022 | 700,000 | — | 1,050,037 | — | 721,000 | — | 20,831 | 2,491,868 | | 2021 | 700,000 | — | 1,373,637 | — | 1,118,425 | — | 16,604 | 3,208,666 | | TIMOTHY M. OXLEY, Chief Financial Officer, Treasurer and Secretary | | | | | | | | | | 2023 | 370,000 | — | 370,018 | — | 138,688 | — | 15,027 | 893,733 | | 2022 | 345,000 | — | 258,786 | — | 177,675 | — | 13,942 | 795,403 | | 2021 | 330,000 | — | 398,840 | — | 263,629 | — | 13,181 | 1,005,650 | | GEORGE STEINBARGER, Chief Revenue Officer | | | | | | | | | | 2023 | 315,000 | — | 173,280 | — | 118,072 | — | 17,539 | 623,891 | | 2022 | 290,000 | — | 145,043 | — | 149,350 | — | 15,294 | 599,687 | | 2021 | 275,000 | — | 226,552 | — | 219,691 | — | 14,104 | 735,347 | | STEPHAN CLOUTIER, President, Aviara | | | | | | | | | | 2023 | 280,000 | — | 140,028 | — | — | — | 7,482 | 427,510 | | PATRICK MAY, Former President, Crest(3) | | | | | | | | | | 2023 | 280,000 | — | 168,006 | — | 96,042 | — | 11,146 | 555,194 | | 2022 | 280,000 | — | 168,010 | — | 312,816 | — | 10,160 | 770,986 | | 2021 | 270,000 | — | 263,559 | — | 260,415 | — | 8,500 | 802,474 |
SUMMARY COMPENSATION TABLE
(1) Represents the aggregate grant date fair value of RSAs and PSUs awarded in each of the fiscal years indicated above, determined in accordance with FASB ASC Topic 718. These are not amounts paid to or realized by our named executive officers. These amounts include the value of both annual PSU grants and the Supplemental PSUs granted in July 2020. Because the performance criteria pursuant to the existing PSUs was achieved, all Supplemental PSUs were forfeited, and no Supplemental PSU shares were issued. Information about the assumptions used to value these awards can be found in Note 11 to our consolidated financial statements included in our Annual Report on Form 10-K. See “—Share-Based Compensation” for more information about the awards granted in these years. We caution that the amounts reported in the table for equity-related awards and, therefore, total compensation, may not represent the amounts that each named executive officer will actually realize from the awards. Whether, and to what extent, a named executive officer realizes value will depend on a number of factors, including Company performance and stock price. For more information on RSAs and PSUs, see “Compensation Discussion and Analysis — Structure of our Compensation Program — Long-Term Equity Incentive Compensation” above. (2) The amounts shown in this column for 2023 reflect the following components: • Messrs. Brightbill, Oxley, Steinbarger, Cloutier and May received $9,748, $10,546, $11,129, $6,192, and $11,146, respectively, for matching contributions to each individual’s account in our 401(k) plan. • Messrs. Brightbill, Oxley, Steinbarger and Cloutier received $6,300, $2,968, $300, and $1,290, respectively, for a Company paid life insurance policy. • Messrs. Brightbill, Oxley, and Steinbarger received imputed income of $4,813, $1,512, and $6,110, respectively, for boat usage. The amounts shown for Pat May during fiscal 2023 do not include amounts related to his retirement. Subsequent to June 30, 2023, $86,923 was paid in conjunction with Mr. May's retirement for accrued vacation, insurance, and all other related benefits.
SUMMARY COMPENSATION TABLE
| MASTERCRAFT BOAT HOLDINGS, INC. | 2023 PROXY STATEMENT | 37 |
GRANTS OF PLAN-BASED AWARDS IN 2023
GRANTS OF PLAN-BASED AWARDS IN 2023 The following table provides information concerning grants of plan-based awards during 2023 to our named executive officers.
GRANTS OF PLAN-BASED AWARDS IN 2023
| | | ESTIMATED FUTURE PAYOUTS UNDER NON-EQUITY INCENTIVE PLAN AWARDS(1) | | | | | | NAME | GRANT DATE | THRESHOLD ($) | TARGET ($) | MAXIMUM ($) | ALL OTHER STOCK AWARDS: NUMBER OF SHARES OF STOCK OR UNITS(2) (#) | GRANT DATE FAIR VALUE OF STOCK AND OPTION AWARDS(3) ($) | | FREDERICK A. BRIGHTBILL | | | | | | | | 2023 ANNUAL INCENTIVE BONUS | — | 217,500 | 725,000 | 1,377,500 | | | | RSAs | 8/2/2022 | | | | 30,786 | 725,010 | | PSUs | 8/2/2022 | | | | 30,786 | 725,010 | | TIMOTHY M. OXLEY | | | | | | | | 2023 ANNUAL INCENTIVE BONUS | — | 55,500 | 185,000 | 351,500 | | | | RSAs | 8/2/2022 | | | | 7,856 | 185,009 | | PSUs | 8/2/2022 | | | | 7,856 | 185,009 | | GEORGE STEINBARGER | | | | | | | | 2023 ANNUAL INCENTIVE BONUS | — | 47,250 | 157,500 | 299,250 | | | | RSAs | 8/2/2022 | | | | 3,679 | 86,640 | | PSUs | 8/2/2022 | | | | 3,679 | 86,640 | | STEPHAN CLOUTIER | | | | | | | | 2023 ANNUAL INCENTIVE BONUS | — | 42,000 | 140,000 | 266,000 | | | | RSAs | 8/2/2022 | | | | 2,973 | 70,014 | | PSUs | 8/2/2022 | | | | 2,973 | 70,014 | | PATRICK MAY | | | | | | | | 2023 ANNUAL INCENTIVE BONUS | — | 50,400 | 168,000 | 319,200 | | | | RSAs | 8/2/2022 | | | | 3,567 | 84,003 | | PSUs | 8/2/2022 | | | | 3,567 | 84,003 |
GRANTS OF PLAN-BASED AWARDS IN 2023
(1) Reflects the threshold, target and maximum annual cash incentive opportunities under our 2023 short-term incentive plan. At the time of the filing of this proxy statement, the actual results of our short-term incentive plan were finalized, and our named executive officers received the amounts set forth in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table. (2) Reflects the number of restricted stock awards and performance stock units granted. These restricted stock awards will vest in equal installments on June 30, 2024, 2025, and 2026. The performance stock units are earned based upon the Company’s performance, over a three-year period, in each case subject to a potential adjustment based upon the application of a relative total shareholder return modifier. The amounts reported with respect to PSUs are based on the probable outcome of the performance conditions as of the grant date, which is estimated at target. Had the achievement of the highest level of performance been assumed, the aggregate grant date fair value of the PSUs would be as follows: Mr. Brightbill $1,740,025; Mr. Oxley $444,021; Mr. Steinbarger $207,937; Mr. Cloutier $168,034; and Mr. May $201,607. Reflects the aggregate grant date fair value of equity awards, calculated in accordance with FASB ASC Topic 718, excluding the estimated effect of forfeitures.
GRANTS OF PLAN-BASED AWARDS IN 2023
| MASTERCRAFT BOAT HOLDINGS, INC. | 2023 PROXY STATEMENT | 38 |
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END The following table sets forth information with respect to outstanding option awards for each of the named executive officers as of June 30, 2023.
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END
| | OPTION AWARDS | | | | STOCK AWARDS | | | GRANT DATE | NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS (#) EXERCISABLE | NUMBER OF SECURITIES UNDERLYING UNEXERCISED UNEARNED OPTIONS (#) | OPTION EXERCISE PRICE ($) | OPTION EXPIRATION DATE | NUMBER OF SECURITIES THAT HAVE NOT VESTED (#) | MARKET VALUE OF SECURITIES THAT HAVE NOT VESTED ($)(1) | | FREDERICK A. BRIGHTBILL | | | | | | | | 7/16/2020 | — | — | — | — | 8,772(2) | 268,862 | | 7/27/2021 | — | — | — | — | 6,721(3) | 205,999 | | 7/27/2021 | — | — | — | — | 20,162(4) | 617,965 | | 8/2/2022 | — | — | — | — | 20,524(5) | 629,061 | | 8/2/2022 | — | — | — | — | 30,786(6) | 943,591 | | TIMOTHY M. OXLEY | | | | | | | | 7/16/2020 | — | — | — | — | 2,068(2) | 63,384 | | 7/27/2021 | — | — | — | — | 1,656(3) | 50,756 | | 7/27/2021 | — | — | — | — | 4,969(4) | 152,300 | | 8/2/2022 | — | — | — | — | 5,237(5) | 160,514 | | 8/2/2022 | — | — | — | — | 7,856(6) | 240,786 | | GEORGE STEINBARGER | | | | | | | | 7/16/2020 | — | — | — | — | 1,149(2) | 35,217 | | 7/27/2021 | — | — | — | — | 928(3) | 28,443 | | 7/27/2021 | — | — | — | — | 2,785(4) | 85,360 | | 8/2/2022 | — | — | — | — | 2,453(5) | 75,184 | | 8/2/2022 | — | — | — | — | 3,679(6) | 112,761 | | STEPHAN CLOUTIER | | | | | | | | 11/15/2021 | — | — | — | — | 444(3) | 13,609 | | 11/15/2021 | — | — | — | — | 1,332(4) | 40,826 | | 8/2/2022 | — | — | — | — | 1,982(5) | 60,748 | | 8/2/2022 | — | — | — | — | 2,973(6) | 91,122 | | PATRICK MAY | | | | | | | | 7/16/2020 | — | — | — | — | 1,354(2) | 41,500 | | 7/27/2021 | — | — | — | — | 1,075(3) | 32,949 | | 7/27/2021 | — | — | — | — | 3,226(4) | 98,877 | | 8/2/2022 | — | — | — | — | 2,378(5) | 72,886 | | 8/2/2022 | — | — | — | — | 3,567(6) | 109,329 |
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END
(1) Based on the closing price of the Company’s common stock on June 30, 2023 of $30.65. (2) The restricted stock vests in three equal annual installments beginning on July 16, 2021. (3) The restricted stock vests in three equal annual installments beginning on June 30, 2022. (4) The performance stock units will be earned based upon the Company’s performance, over a three-year period, measured by cumulative adjusted earnings per share, subject to a TSR modifier. The “Performance Period” for the awards is a three-year period commencing July 1, 2022 and ending June 30, 2024. (5) The restricted stock vests in three equal annual installments beginning on June 30, 2023. The performance stock units will be earned based upon the Company’s performance, over a three-year period, measured by cumulative adjusted earnings per share, subject to a TSR modifier. The “Performance Period” for the awards is a three-year period commencing July 1, 2023 and ending June 30, 2025.
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END
| MASTERCRAFT BOAT HOLDINGS, INC. | 2023 PROXY STATEMENT | 39 |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL Termination of Employment: Except in connection with a change in control and under the Rule of 70 (each as defined below), upon a named executive officer’s termination of employment for any reason, all unvested RSAs and PSUs are automatically forfeited (unless the Compensation Committee determines otherwise). In the event that (i) an employee's age plus years of employment with the Company equals at least seventy and (ii) the employee is at least 60 years old (the "Rule of 70"), upon retirement from the Company, the employee will receive his or her pro-rata share of any incentive awards for which he or she is eligible. For example, under the Company's STIP, if an employee retired six months into the current fiscal year then if, at the end of the fiscal year performance metrics had been achieved such that a performance bonus would have been paid to the employee under the STIP, then the employee will receive 50% of the STIP bonus that would have been paid to the employee if here or she had continued his or her employment until the end of the fiscal year. Likewise, for a multi-year award under the Company's LTIP, the employee would receive his/her prorate share of the LTIP award based upon the date of the termination of the employee's employment with the Company in comparison to the term of the award. The Compensation Committee believes that the benefits available under the Rule of 70 are customary and reasonable components of our compensation program, and it retains discretion to modify the terms and conditions applicable to the Rule of 70. No named executive officer is entitled to additional severance or other payments upon termination of employment. Termination of Employment with Change in Control: In the event a named executive officer’s employment is terminated in connection with a change in control, any unvested RSAs will immediately become vested (assuming no replacement award is offered) and all PSUs (unless the executive is terminated for cause as determined by the Compensation Committee) will be entitled to a payment equal to the target award. Death or Disability. In the event of death or disability, all PSUs will be entitled to a payment of a pro rata portion of the target award, calculated based on a fraction, the numerator of which is the number of days from the grant date until the date of termination of service resulting from death or disability, and the denominator of which is the total number of days from the grant date until the end of the applicable performance period. RSAs do not automatically vest upon death or disability unless the Compensation Committee in its sole discretion determines otherwise. The information below describes and quantifies the estimated amount of certain compensation that would become payable to each named executive officer as of June 30, 2023 under the following circumstances: (i) upon termination by the Company; (ii) upon termination in connection with a change in control and (iii) upon death or disability. The estimated value of all unvested equity awards in the above below is based on our closing stock price as of June 30, 2023 of $30.65 per share.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL
| NAMED EXECUTIVE OFFICER | TERMINATION OF EMPLOYMENT WITHOUT CAUSE(1) | TERMINATION IN CONNECTION WITH A CHANGE-IN-CONTROL(2) | DEATH OR DISABILITY(3) | | Frederick A. Brightbill | — | 2,665,477 | 726,507 | | Timothy M. Oxley | — | 667,741 | 181,795 | | George Steinbarger | — | 336,966 | 94,494 | | Stephan Cloutier | — | 206,305 | 57,591 |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL
(1) No named executive officer is entitled to payment or acceleration of vesting of equity awards in connection with a termination of employment for cause. (2) These amounts represent the vesting of all outstanding RSAs and the payment of PSUs equal to the target award. (3) These amounts represent PSUs that vested based on the formula described above under “Death or Disability.” As defined by the LTIP, “Change in Control” shall mean and includes each of the following: A transaction or series of transactions (other than an offering of common stock to the general public through a registration statement filed with the Securities and Exchange Commission) whereby any “person” or related “group” of “persons” (as such terms are used in Sections 13(d) and 14(d)(2) of the Exchange Act) (other than the Company, any of its subsidiaries, an employee benefit plan maintained by the Company or any of its subsidiaries or a “person” that, prior to such transaction, directly or indirectly beneficially owns voting securities representing more than 50% of the voting power of the Company) directly or indirectly acquires beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of securities of the Company possessing more than 50% of the total combined voting power of the Company’s securities outstanding immediately after such acquisition; or
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL
| MASTERCRAFT BOAT HOLDINGS, INC. | 2023 PROXY STATEMENT | 40 |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL
During any period of two consecutive years, individuals who, at the beginning of such period, constitute the Board together with any new director(s) (other than a director designated by a person who shall have entered into an agreement with the Company to effect a transaction described in Section 2.9(a) or 2.9(c)) whose election by the Board or nomination for election by the Company’s shareholders was approved by a vote of at least a majority of the directors then still in office who either were directors at the beginning of the two-year period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof; or The consummation by the Company (whether directly involving the Company or indirectly involving the Company through one or more intermediaries) of (x) a merger, consolidation, reorganization, or business combination or (y) a sale or other disposition of all or substantially all of the Company’s assets in any single transaction or series of related transactions or (z) the acquisition of assets or stock of another entity, in each case other than a transaction: o which results in the Company’s voting securities outstanding immediately before the transaction continuing to represent (either by remaining outstanding or by being converted into voting securities of the Company or the person that, as a result of the transaction, controls, directly or indirectly, the Company or owns, directly or indirectly, all or substantially all of the Company’s assets or otherwise succeeds to the business of the Company (the Company or such person, the “Successor Entity”)) directly or indirectly, beneficially owning, at least a majority of the combined voting power of the Successor Entity’s outstanding voting securities immediately after the transaction, and o after which no person or group beneficially owns voting securities representing 50% or more of the combined voting power of the Successor Entity; provided, however, that no person or group shall be treated for purposes of this section as beneficially owning 50% or more of the combined voting power of the Successor Entity solely as a result of the voting power held in the Company prior to the consummation of the transaction; or • The consummation of a liquidation or dissolution of the Company. The Compensation Committee has full and final authority, which shall be exercised in its sole discretion, to determine conclusively whether a change in control has occurred pursuant to the above definition, and the date of the occurrence of such change in control and any incidental matters relating thereto.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL
| MASTERCRAFT BOAT HOLDINGS, INC. | 2023 PROXY STATEMENT | 41 |
CEO PAY RATIO
CEO PAY RATIO As required by Section 953(b) of the Dodd-Frank and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of our median associate to the annual total compensation of Mr. Brightbill, our Chief Executive Officer. We believe that the pay ratio disclosed below is a reasonable estimate and calculated in a manner consistent with the Pay Ratio Rules. The 2023 annual total compensation of the median associate identified by the Company, and as described in further detail below, was $59,275, and the total annual compensation of our CEO was $2,739,387. Based on this information, the ratio of the median annual total compensation of all associates to the annual total compensation of our CEO is 1:46. The methodology we used to identify the median of the annual total compensation of all our associates, as well as to determine the annual total compensation of our “median associate,” is as follows: • To identify the median Associate, we started with our associate population as of June 30, 2023, which consisted of approximately 1,060 individuals. The total number of non-U.S. Associates was four. • We then excluded certain non-U.S. associates as permitted under SEC rules. • We calculated compensation using base pay earnings, overtime earnings, and annual incentives paid to our associates in fiscal 2023. We annualized compensation for any associates who started work in fiscal 2023.
CEO PAY RATIO
| MASTERCRAFT BOAT HOLDINGS, INC. | 2023 PROXY STATEMENT | 43 |
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE As required by Section 953(a) of the Dodd-Frank and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation actually paid ("CAP") and certain financial performance of the Company, illustrating pay versus performance, or PvP. CAP does reflect the actual amount of compensation earned or paid to our named executive officers ("NEOs"). For further information concerning the Company's variable pay-for-performance philosophy and how the Company aligns executive compensation with the Company's performance, refer to our "Compensation Discussion and Analysis" section above.
PAY VERSUS PERFORMANCE
| YEAR(1) | SMMUARY COMPENSATION TABLE TOTAL FOR PEO ($)(2) | COMPENSATION ACTUALLY PAID TO PEO ($)(3) | AVERAGE SUMMARY COMPENSATION TABLE TOTAL FOR NON-PEO NEOS ($)(2) | AVERAGE COMPENSATION ACTUALLY PAID TO NON-PEO NEOS ($)(4) | VALUE OF INITIAL FIXED $100 INVESTMENT:(5) | | NET INCOME(7) | DILUTED ADJUSTED EARNINGS PER SHARE - CONTINUING OPERATIONS(8) | | | | | | | TOTAL SHAREHOLDER RETURN ($) | PEER GROUP TOTAL SHAREHOLDER RETURN ($)(6) | | | | 2023 | 2,739,387 | 3,294,156 | 625,082 | 699,517 | 161 | 131 | 68,937 | 5.35 | | 2022 | 2,491,868 | 1,733,828 | 642,236 | 425,477 | 110 | 118 | 58,214 | 5.01 | | 2021 | 3,208,666 | 4,806,992 | 758,056 | 969,949 | 138 | 160 | 56,170 | 3.34 |
PAY VERSUS PERFORMANCE
(1) Frederick A. Brightbill served as the Company's principal executive officer ("PEO") for the entirety of 2023, 2022, and 2021 and the Company's other NEOs for the applicable years were as follows: a. 2023: Timothy M. Oxley, George Steinbarger, Patrick May, and Stephan Cloutier b. 2021-2022: Timothy M. Oxley, George Steinbarger, Patrick May, and Scott Womack (2) Amounts reported in this column represent (i) the total compensation reported in the Summary Compensation Table for the applicable year in the case of Mr. Brightbill and (ii) the average of the total compensation reported in the Summary Compensation Table for the applicable year for the Company’s NEOs other than the PEO for such years. (3) Amounts reported in this column represent the CAP for Mr. Brightbill as the Company's PEO in the indicated fiscal years, as computed in accordance with Item 402(v) of Regulation S-K, based on his total compensation reported in the Summary Compensation Table for the indicated fiscal years and adjusted as shown below. The Company does not have a defined benefit pension plan or pay dividends, so no pension or dividend adjustments were made.
PAY VERSUS PERFORMANCE
| PEO ADJUSTMENTS(1) | 2023 ($) | 2022 ($) | 2021 ($) | | Summary Compensation Table - Total Compensation | 2,739,387 | 2,491,868 | 3,208,666 | | - Grant Date Fair Value of Stock Awards Grants in Fiscal Year | (1,450,021) | (1,050,037) | (1,373,637) | | + Fair Value at Fiscal Year-End of Outstanding and Unvested Stock Awards Granted in Fiscal Year | 981,352 | 733,810 | 2,030,848 | | + / - Change in Fair Value of Outstanding and Unvested Stock Awards Granted in Prior Fiscal Years | 86,161 | (395,221) | 888,619 | | + Fair Value of Vesting of Stock Awards Granted in Fiscal Year that Vested During Fiscal Year | 314,530 | 141,477 | - | | + / - Change in Fair Value as of Vesting Date of Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | 622,747 | (188,069) | 52,496 | | = Compensation Actually Paid | 3,294,156 | 1,733,828 | 4,806,992 |
PAY VERSUS PERFORMANCE
(1) The valuation assumptions used to calculate the fair values of equity awards did not materially differ from those disclosed at the time of grant. Refer to the "Grants of Plan-Based Awards in 2023" table on page 45 for discussion of the valuation assumptions used for equity awards. Amounts reported in this column represent the CAP for the Company's non-PEO NEOs in the indicated fiscal year, as computed in accordance with Item 402(v) of Regulation S-K, based on the average total compensation for such NEOs reported in the Summary Compensation Table for the indicated fiscal year and adjusted as shown in the table below, using the same methodology described above in Note 3. The Company does not have a defined benefit pension plan or pay dividends, so no pension or dividend adjustments were made.
PAY VERSUS PERFORMANCE
| MASTERCRAFT BOAT HOLDINGS, INC. | 2023 PROXY STATEMENT | 44 |
PAY VERSUS PERFORMANCE
| NON-PEO NEOs AVERAGE ADJUSTMENTS | 2023 ($) | 2022 ($) | 2021 ($) | | Summary Compensation Table - Total Compensation | 625,082 | 642,236 | 758,056 | | - Grant Date Fair Value of Stock Awards Grants in Fiscal Year | (212,833) | (185,470) | (260,787) | | + Fair Value at Fiscal Year-End of Outstanding and Unvested Stock Awards Granted in Fiscal Year | 144,042 | 100,003 | 334,674 | | + / - Change in Fair Value of Outstanding and Unvested Stock Awards Granted in Prior Fiscal Years | 11,265 | (52,720) | 138,565 | | + Fair Value of Vesting of Stock Awards Granted in Fiscal Year that Vested During Fiscal Year | 46,167 | 19,255 | - | | + / - Change in Fair Value as of Vesting Date of Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | 85,794 | (35,663) | (559) | | - Fair Value as of Prior Fiscal Year-End of Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year | - | (62,164) | - | | = Compensation Actually Paid | 699,517 | 425,477 | 969,949 |
PAY VERSUS PERFORMANCE
Total shareholder return ("TSR") is cumulative for the measurement period beginning on June 30, 2020, calculated in accordance with Item 201(e) of Regulation S-K. (6) The TSR Peer Group consists of the Russell 2000 Index, which is used by the Company for purposes of compliance with Item 201(e) of Regulation S-K. (7) Reflects Net Income as shown in the Company's Annual Report on Form 10-K for the indicated fiscal years. For fiscal 2023, the Compensation Committee determined that Diluted Adjusted Earnings Per Share (EPS) continues to be viewed as a core driver of the Company's performance and stockholder value creation. Diluted Adjusted EPS is a non-GAAP financial measure. Please see Appendix A for a reconciliation of non-GAAP financial measures.
PAY VERSUS PERFORMANCE
| MASTERCRAFT BOAT HOLDINGS, INC. | 2023 PROXY STATEMENT | 45 |