DEF 14A of Eagle Materials Inc
Filed Jun 17, 2024 · FY20240000950170-24-074244
PROPOSAL NO. 1: ELECTION OF DIRECTORS AND RELATED MATTERS
PROPOSAL NO. 1: ELECTION OF DIRECTORS AND RELATED MATTERS
General
General Our Board of Directors is the ultimate decision-making body of the Company, except with respect to those matters reserved to our stockholders. The primary responsibilities of our Board include: • the selection, compensation and evaluation of our Chief Executive Officer and oversight over succession planning; • oversight of our strategic planning; • approval of material transactions and financings; • oversight of processes that are in place to promote compliance with law and high standards of business ethics; • advising management on major issues that may arise; and • evaluating the performance of the Board and its committees, and making appropriate changes where necessary. Members of our Board of Directors are divided into three classes based on their term of office (Class I, II and III). The directors in each class hold office for staggered terms of three years each. At present, Class I has three directors, Class II has four directors and Class III has three directors. The following table and graphics show the composition by class, the tenure, the independence and diversity of our Board as of August 1, 2024, assuming the election of the proposed slate of Class III director nominees.
General
| Class | Term Expires | Directors | | I | 2025 | George J. Damiris Martin M. Ellen David B. Powers | | II | 2026 | Margot L. Carter Michael R. Nicolais Mary P. Ricciardello Richard R. Stewart | | III | 2027 | Rick Beckwitt Mauro Gregorio Michael R. Haack |
Director Independence
Director Independence NYSE corporate governance rules require that our Board of Directors be comprised of a majority of independent directors. Our Board of Directors has determined, upon the recommendation of our Corporate Governance, Nominating and Sustainability Committee (“Governance Committee”), that all members of our Board of Directors, other than Mr. Haack, are “independent” within the meaning of the specific provisions of the Securities Exchange Act of 1934, as amended (“Exchange Act”) and the corporate governance rules of the NYSE. In determining that nine of our ten directors are independent, our Board of Directors did not identify any material relationship that would potentially cause Mses. Carter and Ricciardello and Messrs. Beckwitt, Damiris, Gregorio, Ellen, Nicolais, Powers and Stewart not to be independent for purposes of the Exchange Act or the corporate governance rules of the NYSE. Our Board of Directors considered the fact that Mr. Powers served as Chief Executive Officer of the Company until July 1, 2019 and thereafter entered into an Advisory Agreement with the Company which expired in March 31, 2020—but determined that over three years have passed since the expiration of the Advisory Agreement, and Mr. Powers does not have other ties with the company that the Board of Directors considers to affect his independence. ________________________________ Our Board includes leaders with a diverse set of skills across several fields that are material to our business. The matrix below illustrates some of the key skills, qualifications and demographics that our directors bring to the Board:
Nominees
Nominees Each of the nominees listed below is currently a member of our Board of Directors. Each of these nominees has been recommended for nomination by our Governance Committee after considering the criteria described below under the heading “Corporate Governance, Nominating and Sustainability Committee.” We have no reason to believe that any of the listed nominees will become unavailable for election, but if for any reason that should be the case, proxies may be voted for substitute nominees. Because this is an uncontested election of directors, a majority of votes cast by the holders of our Common Stock present in person or represented by proxy at the meeting (number of shares voted “for” a director nominee must exceed the number of votes cast “against” the director nominee) will be required to elect the nominees for director in accordance with our Bylaws. (A plurality voting standard would apply in a contested election.) Under our Corporate Governance Guidelines, the Governance Committee will not nominate any director candidate until such director candidate has submitted in writing his or her resignation as a director, which resignation would become effective if the director candidate fails to receive the required majority vote in an uncontested election and the Board accepts such resignation. If a director candidate fails to receive the required majority vote, a special committee of independent directors will consider the resignation and make a recommendation to the Board as to whether to accept or reject such resignation. The Board will then publicly disclose its decision regarding the resignation and the rationale behind the decision. Our Corporate Governance Guidelines generally require directors to retire at the first annual meeting that occurs after the director’s 75th birthday unless the Board (other than the affected director) waives the requirement upon the recommendation of the Governance Committee. Our Board of Directors recommends that holders of Common Stock vote FOR the election of the three nominees listed below to serve as Class III directors for a three-year term ending at our 2027 annual meeting of stockholders: Rick Beckwitt Mauro Gregorio Michael R. Haack
Director Qualifications and Biographies
Director Qualifications and Biographies Set forth below is information about the nominees standing for election at our 2024 annual meeting, as well as our continuing directors whose terms of office do not expire at such annual meeting. The biographical information appearing below regarding the nominees for director and continuing directors has been furnished to us by the respective nominees and directors. Also included below is a brief description of how each individual’s experience qualifies him or her to serve as a director of the Company.
(Class III Directors)
(Class III Directors) George J. Damiris Director Since: 2016 Age: 61 Committees: Compensation
Michael R. Haack
Michael R. Haack President and Chief Executive Officer, Eagle Materials Inc. Director since 2019 Age: 51
Committees
Committees Executive
Experience
Experience President and Chief Executive Officer, Eagle Materials Inc. (2019-present) President and Chief Operating Officer, Eagle Materials Inc. (2018-2019) Executive Vice President and Chief Operating Officer, Eagle Materials Inc. (2014-2018) Global Operations Manager, Sperry Drilling, Halliburton Energy Services (2014) Principal Global Strategic Business Manager, Sperry Drilling, Halliburton Energy Services (2013-2014) Senior Northern Region Manager, Sperry Drilling, Halliburton Energy Services (2010-2013) Senior Country Manager (Norway), Sperry Drilling, Halliburton Energy Services (2008-2010)
Qualifications and Expertise Provided to Our Board
Qualifications and Expertise Provided to Our Board • Extensive knowledge of the Company’s operations • Executive, operational, supply chain and strategic planning experience gained in manufacturing and heavy industry over the past 20 years • Mergers and acquisitions experience, including divestitures and integration of acquired businesses • Deep engineering and environmental experience gained in heavy industry • Extensive international experience living and managing operations in foreign countries and managing remote operations globally for Halliburton, bringing a global view to decision-making and strategy • Extensive experience managing large operations – $3.6 billion in revenue, 8,000+ personnel with extensive network of facilities globally • Deep commitment and experience with establishing safety cultures, processes and procedures to enable operations to run more safely with reduced impact on the environment
Other Boards
Other Boards Member of the Texas A&M University Industrial Engineering Advisory Council (2002-present)
Education and Certifications
Education and Certifications B.S., Industrial Engineering, Purdue University M.S., Industrial Engineering, Texas A&M University M.B.A., Rice University : 2011 Age: 74 Committees: Compensation (Chair)Continuing Directors Whose Terms Expire at our 2025 Annual Meeting
(Class I Directors)
(Class I Directors) Margot L. Carter Director Since: 2017 Age: 53 Committees: Compensation Governance Other Public Boards: Installed Building Products, Inc.
George J. Damiris
George J. Damiris Retired President and Chief Executive Officer, HollyFrontier Corporation Holly Energy Partners, L.P. Independent Director since 2016 Age: 64
David B. Powers
David B. Powers Retired President and Chief Executive Officer, Eagle Materials Inc. Director since 2016 (Independent since 2023) Age: 74
Experience
Experience President and Chief Executive Officer, Eagle Materials Inc. (2016-2019) President, American Gypsum Company LLC (2005-2016) Executive Vice President – Marketing, Sales and Distribution, American Gypsum Company LLC (2002-2005) Prior Experience: Operations Director, L&W Supply Corp. Vice President of Sales and Marketing, USG Interiors Vice President – Customer Services, USG Corp.
Qualifications and Expertise Provided to Our Board
Qualifications and Expertise Provided to Our Board • Extensive executive leadership, commercial, operational, financial and strategic planning experience gained over 35 years in the gypsum wallboard industry, through service as an executive officer and director and through participation in the industry trade group, the Gypsum Association • Deep knowledge of the Company and its business, sales organization, operations and executive compensation program • Experience with mergers and acquisitions, including principal involvement in the acquisition and integration of acquired businesses, and debt financings
Education and Certifications
Education and Certifications B.B.A., California State University – Fullerton
Continuing Directors Whose Terms Expire at our 2026 Annual Meeting
Continuing Directors Whose Terms Expire at our 2026 Annual Meeting
(Class II Directors)
(Class II Directors) Margot L. Carter Director Since: 2017 Age: 53 Committees: Compensation Governance Other Public Boards: Installed Building Products, Inc.
Margot L. Carter
Margot L. Carter President and Founder, Living Mountain Capital L.L.C. Independent Director since 2017 Age: 56
Committees
Committees Compensation; Corporate Governance, Nominating and Sustainability; Former Member of the Audit Committee
Experience
Experience President, Living Mountain Capital L.L.C., a business advisory consulting firm she founded in 1998. She advises and invests in companies, including Cien.ai, a cloud-based digital AI sales intelligence business, which she co-founded in 2016 Executive Vice President, Chief Legal Officer and Secretary, RealPage, Inc. (Nasdaq: RP), a leading global software and data analytics company for the real estate industry (2010-2015) Executive Vice President and General Counsel, The Princeton Review, Inc. (Nasdaq: TPR) (2004-2007) Executive Vice President, General Counsel and Executive Managing Director, Soundview Technology Group, Inc. (Nasdaq: SNDV) (2003-2004) Assistant General Counsel, Cantor Fitzgerald and eSpeed, Inc. (Nasdaq: ESPD) (2001-2003) Executive Vice President, General Counsel and Secretary, SourceHOV (Nasdaq: FYII) (1996-2000) Corporate Finance Attorney, Morgan Lewis & Bockius (1991-1996)
Qualifications and Expertise Provided to Our Board
Qualifications and Expertise Provided to Our Board • Proven executive and leadership experience, including as a C-suite executive and director of public companies, providing broad insight into the dynamics of a corporate board, strategic planning, risk oversight and human capital, executive compensation and environmental, social and governance issues • Deep M&A and business development experience gained through multiple acquisitions throughout her career, including while at RealPage (which she took public) and through the sale of businesses (The Princeton Review’s sale to Bain Capital Ventures and Soundview Technology Group’s sale to The Charles Schwab Corporation) • Industry knowledge gained through service as presiding independent director of Installed Building Products and as a director of Interior Logic Group through its sale to Blackstone • Rigorous financial discipline as a former member of our Audit Committee and as a member of IBP’s audit committee
Other Boards
Other Boards Tyler Technologies, Inc. (NYSE: TYL) (2024-present) Installed Building Products, Inc. (NYSE: IBP) – Presiding Independent Director, Chair of Nominating and Governance Committee and member of the Audit Committee (2014-present) North Texas Chapter of National Association of Corporate Directors, Chair Emeritus; Chair (2022-2023) Interior Logic Group Holdings, Inc. (2017-2021)
Education and Certifications
Education and Certifications B.A., Economics and History, Binghamton University J.D., Fordham University School of Law NACD Directorship Certified (NACD.DC)
Michael R. Nicolais
Michael R. Nicolais
Managing Partner, Roble Drive Investment Company
Managing Partner, Roble Drive Investment Company Independent Director since 2001 Chairman of the Board since 2019 Age: 66
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION Director compensation for the 12-month period from August 2023 through July 2024 was approved by our Board of Directors in August 2023 and was unchanged from the compensation program in effect for the preceding one-year period. The Board adopted a director compensation structure in which directors who are not employees of the Company or any of our subsidiaries received compensation for their services during the 12-month period from August 2023 through July 2024 by electing one of the following two compensation package alternatives: total compensation valued at $230,000, of which $105,000 is paid in cash fees and the remainder is provided in the form of an equity grant valued at $125,000; or (2) an equity grant valued at $261,500. The value of the equity grant under either alternative is allocated between restricted stock and options to purchase Common Stock (based upon the recommendation of the Compensation Committee, which was based in part on the stated preference of the recipient) with respect to each non-employee director. In accordance with the terms of the Eagle Materials Inc. 2023 Equity Incentive Plan (“2023 Incentive Plan”) the exercise price of stock options is set at the closing price of the Common Stock on the NYSE on the date of grant. The number of option shares granted is determined as of the date of the grant by using the Black-Scholes method. All options granted to directors in August 2023 have a ten-year term but are subject to vesting requirements, with the options becoming fully vested (exercisable) on the earliest to occur of (i) the one-year anniversary of the date of grant; (ii) the next annual meeting of the Company’s stockholders, which is at least 50 weeks after the immediately preceding year’s annual meeting; (iii) the recipient’s retirement from the Board in accordance with the Company’s director retirement policy, or earlier under such terms and conditions as approved by the Compensation Committee; (iv) the recipient’s disability as determined by the Compensation Committee; or (v) the recipient’s death. The number of shares of restricted stock is determined as of the date of grant using the closing price of the Common Stock on the NYSE on the date of grant. The restricted stock granted to directors in August 2023 is subject to vesting requirements, with the shares becoming fully vested (unrestricted) on the earliest to occur of (i) the one-year anniversary of the date of grant; (ii) the next annual meeting of the Company’s stockholders, which is at least 50 weeks after the immediately preceding year’s annual meeting; (iii) the recipient’s retirement from the Board in accordance with the Company’s director retirement policy, or earlier under such terms and conditions as approved by the Compensation Committee; (iv) the recipient’s disability as determined by the Compensation Committee; or (v) the recipient’s death. During the restriction period the director will have the right to vote the shares. In addition, upon the vesting of the underlying shares, the director will also be entitled to accrued cash dividends with respect to such shares that were paid to holders of Common Stock during the restriction period. Non-employee directors who chair committees of the Board of Directors receive additional annual compensation. The chairs of the Audit Committee, Compensation Committee and Governance Committee each receive a fee of $20,000 per year. The Chairman of the Board received an additional fee of $125,000 during the past year. Chairpersons who choose compensation package alternative one (part equity and part cash) receive this additional compensation in the form of cash. Chairpersons who choose compensation package alternative two (all equity) receive this additional compensation in the form of equity, in which case a 30% premium is added to such fees when valuing the equity to be received by such chairperson. In certain prior years, equity grants were in some cases made in the form of restricted stock units, which we refer to as “RSUs.” In the case of non-employee directors who hold unvested RSUs (which currently only includes Mr. Nicolais), these directors will receive dividend equivalent units as and when the Company pays a cash dividend on the Common Stock in accordance with the terms of the RSUs. All directors are reimbursed for reasonable expenses of attending meetings.
Non-Employee Director Compensation for Fiscal Year 2024
Non-Employee Director Compensation for Fiscal Year 2024 The table below summarizes the compensation paid by the Company to our non-employee directors for the fiscal year ended March 31, 2024. Mr. Haack served as a director for the fiscal year ended March 31, 2024 but did not receive any additional compensation for such service, and his compensation as our Chief Executive Officer is included in the Fiscal 2024 Summary Compensation Table below.
Non-Employee Director Compensation for Fiscal Year 2024
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Option Awards ($)(2) | Total ($) | | Rick Beckwitt(3) | — | 287,792 | — | 287,792 | | Margot L. Carter(4) | 35,000 | 261,629 | — | 296,629 | | George J. Damiris(5) | — | 287,792 | — | 287,792 | | Martin M. Ellen(6) | 125,000 | 125,086 | — | 250,086 | | Mauro Gregorio(4) | — | 261,629 | — | 261,629 | | Michael R. Nicolais(7) | — | 318,157 | 106,060 | 424,217 | | David B. Powers(8) | 105,000 | 125,086 | — | 230,086 | | Mary P. Ricciardello(4) | — | 261,629 | — | 261,629 | | Richard R. Stewart(8) | 105,000 | 125,086 | — | 230,086 |
Non-Employee Director Compensation for Fiscal Year 2024
(1) The amounts in this column reflect the value of restricted stock awards made to the directors in the fiscal year ended March 31, 2024 and are consistent with the grant date fair value of the awards computed in accordance with Financial Accounting Standards Board Accounting Standards Certification ("FASB ASC") Topic 718. For assumptions used in determining these values, refer to footnote (K) to the Company’s audited financial statements for the fiscal year ended March 31, 2024, included in the Company’s Annual Report on Form 10-K filed with the SEC on May 22, 2024 (“Fiscal 2024 Form 10-K”). (2) The amounts in this column reflect the value of option awards made to the directors in the fiscal year ended March 31, 2024 and are consistent with the grant date fair value of the awards computed in accordance with FASB ASC Topic 718. For assumptions used in determining these values, refer to footnote (K) to the Company’s audited financial statements for the fiscal year ended March 31, 2024, included in the Fiscal 2024 Form 10-K. (3) Mr. Beckwitt is the Chair of the Governance Committee. He elected to receive 100% of his director compensation in the form of equity (including his chairperson fee). (4) Mses. Carter and Ricciardello and Mr. Gregorio elected to receive 100% of their director compensation in the form of equity. The cash reflected for Ms. Carter represents the tail end of her prior-year election, when she selected the compensation package where she received a portion of her director compensation in the form of equity and a portion in cash. (5) Mr. Damiris is the Chair of the Compensation Committee. He elected to receive 100% of his director compensation in the form of equity (including his chairperson fee). (6) Mr. Ellen is Chair of the Audit Committee. He selected the compensation package where he receives a portion of his director compensation in the form of equity and a portion in cash. Mr. Ellen received his chairperson fee in cash. (7) Mr. Nicolais served as Chairman of the Board during fiscal 2024. He elected to receive 100% of his director compensation in the form of equity (including his chairperson fee). (8) Messrs. Powers and Stewart selected the compensation package where they receive a portion of their director compensation in the form of equity and a portion in cash. The following chart shows the number of outstanding stock options, RSUs and shares of restricted stock held by each non-employee director as of March 31, 2024.
Non-Employee Director Compensation for Fiscal Year 2024
| Name | Stock Options(1) | RSUs(2) | Restricted Stock(3) | | Rick Beckwitt | 2,070 | — | 5,912 | | Margot L. Carter | — | — | 1,370 | | George J. Damiris | — | — | 1,507 | | Martin M. Ellen | — | — | 2,507 | | Mauro Gregorio | — | — | 1,370 | | Michael R. Nicolais | 16,508 | 3,958 | 7,034 | | David B. Powers | — | — | 655 | | Mary P. Ricciardello | 4,747 | — | 1,370 | | Richard R. Stewart | — | — | 4,205 |
Non-Employee Director Compensation for Fiscal Year 2024
All of these stock options were fully exercisable as of March 31, 2024, except for 1,348 of Mr. Nicolais's stock options, which will vest on the earliest to occur of (i) August 3, 2024; (ii) the next annual meeting of the Company’s stockholders, which is at least 50 weeks after the immediately preceding year’s annual meeting; (iii) Mr. Nicolais’s retirement from the Board in accordance with the Company’s director retirement policy, or earlier under such terms and conditions as approved by the Compensation Committee; (iv) Mr. Nicolais’s disability as determined by the Compensation Committee; or (v) Mr. Nicolais’s death. (2) The RSUs granted to non-employee directors (and any accrued dividend equivalent RSUs) are not payable until the non-employee director’s service on the board terminates because of the director’s death or the director’s retirement in accordance with the Company’s director retirement policy, or under such circumstances as are approved by the Compensation Committee. The number of RSUs reflected in this column includes the following aggregate dividend equivalent units, which are accrued by holders of our RSUs at any time we pay a cash dividend on our Common Stock: Mr. Nicolais – 658 RSUs. (3) The restrictions on the following restricted stock awards (made prior to fiscal 2024) will not lapse until the non-employee director’s service on the board terminates because of the director’s death or the director’s retirement in accordance with the Company’s director retirement policy, or under such circumstances as are approved by the Compensation Committee: Mr. Beckwitt - 4,405 shares; Mr. Ellen - 1,852 shares; Mr. Nicolais - 5,368 shares; and Mr. Stewart - 3,550 shares. Any cash dividends declared and paid by the Company during the restricted period are paid in cash with respect to such prior restricted stock grants. The remaining restricted shares reflected in the table were granted in fiscal 2024 and will vest on the earliest to occur of (i) August 3, 2024; (ii) the next annual meeting of the Company’s stockholders, which is at least 50 weeks after the immediately preceding year’s annual meeting; (iii) the recipient’s retirement from the Board in accordance with the Company’s director retirement policy, or earlier under such terms and conditions as approved by the Compensation Committee; (iv) the recipient’s disability as determined by the Compensation Committee; or (v) the recipient’s death. Upon the vesting of the fiscal 2024 shares, the director will be entitled to accrued cash dividends with respect to such shares that were paid to holders of Common Stock during the restriction period.
Leadership Transitions
Leadership Transitions During fiscal year 2024, we experienced two retirements involving our Named Executive Officers, each as contemplated by our ongoing succession planning. Effective on June 1, 2023, Steven L. Wentzel retired from his position as President of American Gypsum, and effective July 3, 2023, Robert S. Stewart retired from his position as Executive Vice President – Strategy, Corporate Development and Communications. Their respective successors were in position at the time of their retirement to ensure a smooth transition of their duties. For each of the retiring officers, the Board determined that his departure constituted a Board-approved retirement from service, and therefore, pursuant to the terms of the award agreements, his outstanding restricted stock (both time-vesting awards and performance-vesting awards for which the performance condition had been satisfied) accelerated vesting upon retirement, and Mr. Wentzel's outstanding stock options will survive for the remaining term following retirement. The value of these retirement-related items is reflected in the fiscal 2024 compensation for Messrs. Wentzel and Stewart in the Fiscal 2024 Summary Compensation Table below.
Advisory Vote on Executive Compensation; Central Role of Stockholder Engagement
Advisory Vote on Executive Compensation; Central Role of Stockholder Engagement We value feedback from our stockholders and regularly engage in a dialogue with a significant portion of our stockholders throughout the fiscal year to better understand their opinions on our business strategy and objectives and to obtain feedback regarding other matters of investor interest, such as executive compensation and sustainability matters. The Company’s newly-published Sustainability Report was a topic of engagement during fiscal 2024. At the 2023 Annual Meeting of Stockholders, the Company’s stockholders voted to approve a non-binding advisory resolution approving the compensation paid to our Named Executive Officers as disclosed in the proxy statement for the 2023 Annual Meeting of Stockholders. This “say-on-pay” proposal received the approval of approximately 90.2% of the votes cast. Stockholder support of the executive compensation program (reflected through the 2023 say-on-pay vote results) has remained strong; however, we elected to revise certain aspects of our program. Following a comprehensive review of the Company’s compensation programs during the course of the previous fiscal year and taking into consideration stockholder feedback, the Compensation Committee (i) made some modifications to the Company’s compensation programs in fiscal 2024, as described in greater detail below—including individual limitations on amounts payable under annual cash incentive award programs and the introduction of multi-year performance periods for long-term equity awards; and (ii) made additional modifications to long-term incentive compensation as described below under "Fiscal 2025 Compensation Developments."
Role of Management
Role of Management Our CEO participates in the administration of our compensation program for Named Executive Officers, other than himself. The CEO is not present during discussions of his own compensation by the Compensation Committee. Following the end of each fiscal year, the CEO provides input to the Compensation Committee on the performance of each of the other Named Executive Officers during the fiscal year and recommends compensation adjustments (salary adjustments for the upcoming fiscal year, any downward adjustments to annual cash incentive award levels for the recently completed fiscal year, and annual cash incentive award levels for the upcoming fiscal year) and, if applicable, long-term incentive award levels for such Named Executive Officers. The CEO also provides input on the structure of our long-term incentive awards (if any) for such Named Executive Officers, including the long-term incentive award levels and the performance or other criteria that determine vesting and other terms and conditions applicable to the awards. The Compensation Committee considers the CEO’s input, along with other information presented by its independent compensation consultants or otherwise available to it, in making its final compensation decisions with respect to the Named Executive Officers.
Engagement of an Independent Compensation Consultant
Engagement of an Independent Compensation Consultant In February 2023, the Compensation Committee engaged Meridian Compensation Partners (“Meridian”) to review levels and incentive components of our executives’ compensation in an effort to align the compensation of our officers competitively with the market for fiscal 2024. The primary role of Meridian was to provide the Compensation Committee with market data and information regarding compensation trends in our industry and to make recommendations regarding base salaries, the design of our incentive programs and executive compensation levels. The Compensation Committee has assessed the independence of Meridian pursuant to SEC and NYSE rules and concluded that no conflict of interest exists that would prevent Meridian from independently advising the Compensation Committee.
Compensation Peers
Compensation Peers The data used by Meridian in its survey of compensation (the “compensation study”) was from compensation disclosures included in the proxy statements of members of our peer group, as well as Equilar survey data where available for particular positions. At the beginning of fiscal 2024 (spring 2023), Meridian reviewed the Company’s current peer group for appropriateness and provided the Compensation Committee with recommendations for adjustments. Meridian analyzed the Company’s peer group and potential modifications based on industry relevance, revenue (approximate range from 33% to 3 times the Company's revenue), market capitalization size (approximate range from 33% to 3 times the Company's market capitalization), EBITDA margin and overlap with other peer groups. Based on Meridian’s analysis and with consideration to management’s input, the Compensation Committee approved utilizing the same peer group that had been used in fiscal 2023 to analyze fiscal 2024 compensation (“compensation peer group”): can Materials Company
Primary Elements of Executive Compensation
| Element | Key Characteristics | Primary Purpose | | Base salary | Fixed compensation that is reviewed annually | To attract and retain executives by providing a market-competitive level of fixed compensation | | Annual cash incentive award | Variable compensation component payable from pool funded by operating earnings or EBITDA and further subject to the achievement of personal performance goals | To motivate and reward organizational and individual achievement of objectives | | Long-term incentive compensation | Variable compensation component, with half of grant value subject to the Company's achievement of a financial goal and half subject to time-vesting | To align executives with stockholder interests, to reinforce long-term value creation and to provide a balanced portfolio of long-term incentive opportunities |
Annual Cash Incentive Award
Annual Cash Incentive Award The Compensation Committee is responsible for approving the annual cash incentive award for our CEO and the other Named Executive Officers. Messrs. Stewart and Wentzel retired early in the fiscal year, and they did not participate in any annual cash incentive award programs for the year. Annual cash incentive awards paid to our continuing Named Executive Officers for fiscal 2024 (other than Messrs. Cribbs and Thompson) were made under the Eagle Materials Inc. Salaried Incentive Compensation Program for Fiscal Year 2024 (the “Eagle Annual Incentive Program”). The Eagle Annual Incentive Program and the Company’s other incentive programs for fiscal 2024 were structured to create financial incentives and rewards that are directly related to corporate performance and the participating Named Executive Officer’s individual performance during the fiscal year. The Compensation Committee believes these programs are consistent with our pay-for-performance compensation philosophy in that they place a significant portion of the executive’s compensation “at risk.” Generally, under these programs, a significant portion of the executive’s total compensation is dependent upon the performance of the Company as well as the individual’s performance. The Company’s annual cash incentive award programs also reflect the Compensation Committee’s philosophy of aligning the interests of our executives with those of the stockholders. These programs create this alignment by providing that an officer’s annual cash incentive award potential varies directly with operating earnings (Eagle program) or EBITDA (divisional programs). In addition, individual performance and achievement of goals (as discussed in more detail below under “Approving the Annual Cash Incentive Award”) may affect the actual cash incentive award amount through the exercise of “negative discretion.” The Compensation Committee believes that operating earnings or EBITDA is an appropriate metric for annual cash incentive awards because it is tied closely to operations, can be directly impacted by the efforts of the pool participants, and is a measure that our stockholders have indicated they track and value. Eagle Annual Incentive Program For fiscal 2024, Messrs. Haack, Kesler and Newby (whose duties extend across all of the Company's business units) were participants in the Eagle Annual Incentive Program. Under this program, during the first quarter of the fiscal year, a percentage of our operating earnings is designated by the Compensation Committee as a pool for annual cash incentive awards, and each participating Named Executive Officer is assigned a share of such pool, representing the executive’s maximum award opportunity. At the end of the fiscal year, the size of the pool is determined, based on the amount of operating earnings generated during such fiscal year, and annual cash incentive awards are paid to each participating executive in the form of a lump sum cash payment reflecting each executive’s share of the pool, subject to the exercise of “negative discretion” by the Compensation Committee to reduce (but not increase) the amount of the cash payment based on the executive’s individual performance during the fiscal year. The amount of the annual cash incentive award paid to an executive is based on the level of our operating earnings, the share of the pool designated for such executive, and an assessment of such executive’s individual performance. The Eagle Annual Incentive Program for Fiscal 2024 was adopted by the Compensation Committee in May 2023 and it mirrored the structure of the fiscal 2023 program, except for the following limitations, which were included following a comprehensive review of the Company’s compensation programs during the course of the previous fiscal year and taking into consideration stockholder feedback: the fiscal 2024 program (i) provides for threshold financial performance against budget and (ii) contains an individual cap on award payments. If the Company’s operating earnings for fiscal 2024 were less than 50% of budget, no funds would be available for the corporate annual cash incentive award pool. None of the participants in the program (including Messrs. Haack, Kesler and Newby) would be able to receive an award under the program in excess of three times (3X) such participant’s annual base salary. Similar to the fiscal 2023 Eagle Annual Incentive Program, the fiscal 2024 program was to be funded with 1.2% of the Company’s operating earnings. In setting the percentage of operating earnings which would fund the pool for the Eagle Annual Incentive Program, the Compensation Committee considered several factors, including our compensation philosophy that a significant portion of the executive’s compensation should be “at risk” and subject to the Company’s success (level of operating earnings), as well as the anticipated operating earnings for fiscal 2024. In allocating each Named Executive Officer’s opportunity under the pool, the Compensation Committee considered the amount of annual cash incentive award compensation opportunities of executives in other companies who fulfill similar roles as illustrated in the compensation study prepared by Meridian, the share of the pool historically allocated to officers in such roles by the Company, the recommendation of Mr. Haack for each participant (other than himself), as well as the Compensation Committee’s assessment of the executive’s importance and contribution to the organization, the executive’s importance in driving the achievement of Company goals and profitability, the executive’s level of responsibility, and the anticipated operating earnings for fiscal 2024. The percentage of the fiscal 2024 award pool available for payment of the annual cash incentive award to the Named Executive Officers participating in the pool was set as follows: Mr. Haack, 28.0%; Mr. Kesler, 13.5%; and Mr. Newby, 7.5% (in each case subject to the limitations in the Program related to threshold financial performance and individual caps). At the beginning of fiscal 2024, the Compensation Committee developed annual incentive goals and objectives for Mr. Haack. Fifty percent of such goals were objective, 10% related to attaining budgeted earnings and 40% were discretionary. Mr. Haack then developed goals and objectives for the other officers participating in the Eagle Annual Incentive Program, with a similar distribution among objective, budget and discretionary goals and objectives. The participants’ individual performance against these goals would be evaluated by the Committee in the exercise of “negative discretion” to reduce (but not increase) the amount of the portion of the pool that would be paid to the participant at the end of the fiscal year. The Eagle Annual Incentive Program pool was not quantifiable until the end of fiscal 2024, at which time the Compensation Committee determined that due to the Company's fiscal 2024 operating earnings of $660,194,452, the aggregate amount available for the Eagle Annual Incentive Program pool for fiscal 2024 was $7,922,333 (a maximum of $3,881,943 of which could be paid out to Named Executive Officers). For comparison purposes, the equivalent pool amount in fiscal 2023 was $7,485,172 (a maximum of $5,015,066 of which could be paid out to that year's Named Executive Officers). Divisional Annual Incentive Program
Annual Cash Incentive Award
For certain employees who do not participate in the Eagle Annual Incentive Program, the Company maintains divisional annual incentive plans, which the Compensation Committee believes better tie such employees’ annual incentive compensation to metrics that they can directly influence than a Company-wide program. Under these programs, a percentage of a division’s EBITDA is allocated to the award pool and each participating employee is assigned a share of the pool, representing the employee’s maximum award opportunity. At the end of the fiscal year, the size of the pool is determined and annual cash incentive awards are paid to participating employees in the form of a lump sum cash payment in accordance with their shares of the pool, subject to the exercise of negative discretion by our CEO (or, in the case of awards paid to Named Executive Officers, the Compensation Committee) based on the employee’s individual performance during the fiscal year. For fiscal 2024, each of Messrs. Cribbs and Thompson (whose duties relate to a particular business unit) participated in a divisional annual cash incentive award program. Mr. Cribbs participated in the Eagle Materials Inc. American Gypsum Company Salaried Incentive Compensation Program for Fiscal Year 2024 (the "American Gypsum Annual Incentive Program"), and Mr. Thompson participated in the Eagle Materials Inc. Cement Companies Salaried Incentive Compensation Program for Fiscal Year 2024 (the "Cement Annual Incentive Program"). The fiscal 2024 plans were adopted by the Compensation Committee in May 2023, and they mirrored the structure of the fiscal 2023 programs, except for the following limitations, which were included following a comprehensive review of the Company’s compensation programs during the course of the previous fiscal year and taking into consideration stockholder feedback: the fiscal 2024 program (i) provides for threshold financial performance against budget and (ii) contains an individual cap on award payments. If a division's EBITDA for fiscal 2024 was less than 50% of budget, no funds would be available for that divisional award pool. None of the participants in the programs (including Messrs. Cribbs and Thompson) would be able to receive an annual cash incentive award in excess of the lesser of (i) two times (2X) such participant’s annual base salary and (ii) a maximum dollar amount established by the Compensation Committee. Under these programs, the annual cash incentive award pools were to be funded with 2.0% of the EBITDA of American Gypsum (with respect to the American Gypsum Annual Incentive Program) and 1.9% of the consolidated EBITDA for all of the Company's cement companies, as adjusted with respect to our 50% owned cement joint venture (with respect to the Cement Annual Incentive Program), which are the same percentages the Compensation Committee has set for the past several years. In deciding to keep the percentage of EBITDA used to fund these award pools the same as the prior year, the Compensation Committee considered several factors, including our compensation philosophy that a significant portion of each executive’s compensation should be “at risk” and subject to the Company’s success (level of earnings). At the beginning of fiscal 2024, Mr. Haack developed goals and objectives for the officers participating in the divisional annual incentive programs. Fifty percent of such goals were objective, 10% related to attaining budgeted earnings and 40% were discretionary. The participants’ individual performance against these goals would be evaluated by the Committee in the exercise of “negative discretion” to reduce (but not increase) the amount of the portion of the pool that would be paid to the participant at the end of the fiscal year. The Compensation Committee also set the annual cash incentive award potential for Messrs. Cribbs and Thompson under these programs. In determining their respective allocation of the pool, the Compensation Committee considered the recommendation of Mr. Haack, the amount of annual cash incentive award compensation payable to executives in other companies who fulfill similar roles as illustrated in the compensation study prepared by Meridian, the portion of the pool historically allocated to their respective positions and the Compensation Committee’s assessment of their importance and contribution to their respective divisions' performance, their importance as an officer within the respective divisions in driving the achievement of divisional goals and profitability and their respective levels of responsibility. The Compensation Committee set Mr. Cribbs’s annual cash incentive award potential at 6.36% of his divisional pool (subject to a cap of $450,000 established by the Compensation Committee), and the Compensation Committee set Mr. Thompson's annual cash incentive award potential at 5.0% of his divisional pool (subject to a cap of $350,000 established by the Compensation Committee)—in each case subject to the limitation in their respective Programs related to threshold financial performance. The divisional annual incentive program pools pool were not quantifiable until the end of fiscal 2024, at which time the Compensation Committee determined that the aggregate amounts available for these programs for fiscal 2024 were as follows: $7,259,885 (American Gypsum) as a result of fiscal 2024 EBITDA of $362,994,238 for American Gypsum; and $7,155,859 (Cement) as a result of fiscal 2024 EBITDA of $401,289,311 on a consolidated basis for all of the Company's cement companies, as adjusted; which in each case was not quantifiable until the end of fiscal 2024 and includes amounts available for payment to officers and employees other than the Named Executive Officers. For comparison purposes, the equivalent amounts in fiscal 2023 were $7,561,204 (American Gypsum) and $5,987,848 (Cement). Special Situation Program In the first quarter of fiscal 2024 (May 2023), the Compensation Committee approved the Eagle Materials Inc. Special Situation Program for Fiscal Year 2024 (the “SSP”), which is a special annual cash incentive program intended to recognize outstanding individual performance during the fiscal year. The SSP also provides flexibility to reward performance when special circumstances arise in which our CEO determines that an individual has performed well but not been adequately compensated pursuant to other components of compensation, including instances where an individual’s compensation has been adversely affected by unexpected changes in market conditions such as a cyclical downturn or in recognition of transactions and events not contemplated at the time the Compensation Committee set compensation for the applicable year. SSP awards are made by our CEO, except that awards to senior executive officers require Compensation Committee approval (and our CEO does not have a role in the determination of any SSP award to himself). Awards under the SSP are not predetermined for any individuals at the beginning of the fiscal year. All full-time employees of the Company or any of our subsidiaries are eligible to receive cash awards under this program. At the beginning of fiscal 2024, the Compensation Committee determined that 0.20% of the Company’s EBITDA for the ensuing fiscal year would fund the SSP, along with the portions of the Eagle and divisional incentive compensation plans and divisional long-term cash compensation plans not paid out. In setting the percentage of EBITDA which would fund the SSP, the Compensation Committee considered several factors, including the anticipated EBITDA for fiscal 2024. All of our Named Executive Officers are eligible to participate in the SSP; however, no SSP awards were paid to Named Executive Officers in fiscal 2024. Approving the Annual Cash Incentive Award
Annual Cash Incentive Award
In May 2024, the Compensation Committee approved the annual cash incentive award pool for fiscal 2024 for the Company. In addition, at the end of fiscal 2024, Mr. Haack provided performance evaluations of each Named Executive Officer (other than himself) to the Compensation Committee, which evaluations included an assessment of the achievement of their individual goals and objectives, along with his recommendation for the annual cash incentive award for each such Named Executive Officer. With respect to Mr. Haack, the Compensation Committee performed its own evaluation of his performance and the extent to which the goals and objectives established for him for fiscal 2024 had been achieved. Mr. Haack At the end of fiscal 2024, the Compensation Committee conducted its performance evaluation of Mr. Haack after receiving input from the entire Board. Mr. Haack also provided information used by the Compensation Committee to evaluate the achievement of his objective, budget and discretionary goals and objectives for fiscal 2024 under the Eagle Annual Incentive Program. Based on this evaluation, the Compensation Committee believes Mr. Haack performed at a high level during fiscal 2024 and his goals and objectives were substantially met. The Compensation Committee’s evaluation resulted in Mr. Haack receiving 95% of his annual cash incentive award potential for fiscal 2024. The Compensation Committee approved an annual cash incentive award for Mr. Haack under the Eagle Annual Incentive Program of $2,107,341. In making this determination, the Compensation Committee used its judgment to determine the appropriate award level after consideration of several factors, including his achievement of his goals related to the following areas (among others) over the past fiscal year; approximately half of Mr. Haack’s award related to factors advancing the Company’s sustainability priorities. • overall financial performance versus plan, achieving record profitability levels; • leadership on ESG initiatives, including the publication of the Company’s updated Sustainability Report and the ongoing development and implementation of strategies to reduce greenhouse gas emissions (e.g., entry into the Terra CO2 agreement regarding potential production of low-carbon cementitious material, continued development of the Portland Limestone Cement product and increased use of alternative fuels); • integration of acquired businesses; • development and implementation of M&A strategies to optimize and grow the Company’s asset portfolio, as well as strategic investments in the Company’s existing asset portfolio; and • promotion of a safety performance culture. Mr. Kesler At the end of fiscal 2024, Mr. Haack reviewed Mr. Kesler’s performance against his objective, budget and discretionary goals and objectives for fiscal 2024 under the Eagle Annual Incentive Program. Based in part on this review, the Compensation Committee determined that Mr. Kesler had substantially met his goals and awarded Mr. Kesler 95% of his annual cash incentive award potential, approving an annual cash incentive award for Mr. Kesler under the Eagle Annual Incentive Program of $1,016,039. In making this determination, the Compensation Committee used its judgment to determine the appropriate award level after consideration of several factors, including the input of Mr. Haack regarding Mr. Kesler’s performance and his achievement of his goals related to his areas of responsibility, including: Mr. Kesler’s work ERP implementation, cyber security enhancements, capital management and the addition of procurement oversight. Mr. Newby At the end of fiscal 2024, Mr. Haack reviewed Mr. Newby's performance against his objective, budget and discretionary goals and objectives for fiscal 2024 under the Eagle Annual Incentive Program. Based in part on this review, the Compensation Committee determined that Mr. Newby had substantially met his goals and awarded Mr. Newby 95% of his annual cash incentive award potential, approving an annual cash incentive award for Mr. Newby under the Eagle Annual Incentive Program of $564,466. In making this determination, the Compensation Committee used its judgment to determine the appropriate award level after consideration of several factors, including his achievement of his goals related to his areas of responsibility, the input of Mr. Haack regarding the performance of Mr. Newby, and the following areas (among others) over the past fiscal year: Mr. Newby’s work on the Company’s Sustainability Report, legal support on environmental regulatory matters and oversight of the Company’s employee hotline. Mr. Cribbs At the end of fiscal 2024, Mr. Haack reviewed the performance of Mr. Cribbs against his objective, budget and discretionary goals and objectives for fiscal 2024 under the American Gypsum Annual Incentive Program. Based in part on this review, the Compensation Committee determined that Mr. Cribbs had met his goals and awarded Mr. Cribbs 96% of his annual cash incentive award potential (as capped by the Compensation Committee), approving an annual cash incentive award for Mr. Cribbs under the American Gypsum Annual Incentive Program of $443,260. In making this determination, the Compensation Committee used its judgment to determine the appropriate award level after consideration of several factors, including his achievement of his goals related to his areas of responsibility, the input of Mr. Haack regarding the performance of Mr. Cribbs, and the following areas (among others) over the past fiscal year: Mr. Cribbs’s promotion of a safety performance culture, engineering project management to increase flexibility and capacity at plants, and succession planning and management and work on the Sustainability Report. Mr. Thompson At the end of fiscal 2024, Mr. Haack reviewed the performance of Mr. Thompson against his objective, budget and discretionary goals and objectives for fiscal 2024 under the Cement Annual Incentive Program. Based in part on this review, the Compensation Committee determined that Mr. Thompson had met his goals and awarded Mr. Thompson 92% of his annual cash incentive award potential (as capped by the Compensation Committee), approving an annual cash incentive award for Mr. Thompson under the Cement Annual Incentive Program of $329,169. In making this determination, the Compensation Committee used its judgment to determine the appropriate award level after consideration of several factors, including his achievement of his goals related to his areas of responsibility, the input of Mr. Haack regarding the performance of Mr. Thompson, and the following areas (among others) over the past fiscal year: Mr. Thompson’s strategic work on cement networks, slag cement project leadership and work on the Sustainability Report.
Long-Term Incentive Compensation
Long-Term Incentive Compensation Consistent with the Compensation Committee’s philosophy of linking compensation to performance, 50% of our long-term incentive compensation program for fiscal 2024 has been structured to tie executives’ ability to earn equity awards to the achievement of specific Company performance levels. The remaining 50% of our long-term compensation program has been structured as purely time-vesting, which the Compensation Committee believes, based on the input of Meridian, is in-line with the practice of our peers and enhances the retention of key employees. A more detailed description of the fiscal 2024 awards is found below. Value-Adjusted Burn Rate The Compensation Committee strives to be a good steward of the equity available for award under our equity incentive plans. Our three-year average value-adjusted burn rate (a measure of historical dilution as calculated by ISS) is well below our industry norms. The Company’s three-year average value-adjusted burn rate (which is based on the number of options granted in each fiscal year times a Black-Scholes value plus the number of shares granted in such fiscal year times the stock price, divided by the weighted-average common shares outstanding for such fiscal year times the stock price) is 0.32%. The 2024 benchmark of this measure for our industry published by ISS is 1.48%. Grant Practice All of the Named Executive Officers participate in our long-term incentive compensation program. In fiscal 2024, the Compensation Committee approved equity grants as described below. The date on which an equity award is granted is the date specified in the resolutions of the Compensation Committee authorizing the grant. The grant date must fall on or after the date on which the resolutions are adopted by the Compensation Committee. As provided in the Amended and Restated Incentive Plan ("2013 Incentive Plan") and the 2023 Incentive Plan, for stock options, the exercise price is the closing price of our Common Stock on the grant date, as reported by the NYSE. During fiscal year 2024, the Company did not award stock options within four business days before or one business day after the release of a Form 10-Q, 10-K, or 8-K that discloses material nonpublic information. The Company has no specific policy on the timing of awards of such instruments in relation to the release of a Form 10-Q, 10-K, or 8-K that discloses material nonpublic information. Fiscal 2024 Grants In structuring the long-term incentive program for fiscal 2024, the Compensation Committee worked with Mr. Haack to establish a mix of performance-based and time-vesting awards. Consistent with prior years, the performance metric selected was return on equity (“ROE”), which represents our earnings as a percentage of our stockholders’ equity, a performance metric that our stockholders have told us they find meaningful and that the Compensation Committee views as a measure of the Company’s prudent deployment of capital. ROE for a given fiscal year is defined as the net earnings of the Company for such fiscal year; divided by the Company’s average stockholders’ equity for such fiscal year (which is defined for any period to mean the Company’s total stockholders’ equity as of the beginning of such period plus the Company’s total stockholders’ equity at the end of such period; divided by 2). In calculating ROE, the impact of certain extraordinary items not related to operating performance, including downward adjustment for the gain from the sale of non-core businesses, are excluded. Following a comprehensive review of the Company’s compensation programs during the course of the previous fiscal year and taking into consideration stockholder feedback, the fiscal 2024 awards differed from the fiscal 2023 awards in the following ways: (i) the performance awards are subject to multiple performance periods described below and (ii) the time-vesting awards vest ratably over the three fiscal year-ends following the date of grant (assuming continued service by the relevant officer). For the performance-vesting restricted stock to be earned, the Company must achieve performance vesting criteria based on the Company’s average ROE measured at the end of fiscal 2024, 2025 and 2026. Twenty-five percent of the target performance shares are subject to a one-year performance period, 25% are subject to a two-year performance period, and 50% are subject to a three-year performance period. Any earned restricted stock will vest immediately upon the determination of the achievement of the performance vesting criterion for the relevant performance period, and any unearned restricted stock from such performance period will be forfeited. Staggered performance periods were used in fiscal 2024 in connection with the transition to 100% of long-term incentive performance awards being subject to a three-year performance period in fiscal 2025, which is reflected below in "Fiscal 2025 Compensation Developments." Target award amounts were allocated equally (based on target grant date fair values as described below) between performance-vesting and time-vesting awards, and the Committee allocated such awards between restricted stock and stock options based in part on the stated preference of the recipient. With respect to performance-based equity awards, the Committee determined a target award value that would be received upon the achievement during the relevant performance period of a strong average ROE (15.0%), with up to 120% of the target value earned if exceptional average ROE (20.0%) is achieved and 80% of the target value earned if acceptable average ROE (10.0%) is achieved. None of the performance-based equity awards would be earned if the return on equity were below this acceptable level. Effective May 23, 2023, the Compensation Committee approved equity awards under the 2013 Incentive Plan to a group of key employees, including the Named Executive Officers, in alignment with the above structure. As part of the compensation study delivered to the Compensation Committee in May 2023, Meridian had provided information regarding long-term compensation as well as total direct compensation paid to the compensation peer group. In determining the value of the equity to be granted, the Compensation Committee took into consideration the Meridian compensation study, the input of Mr. Haack, the Compensation Committee’s assessment of the executive’s importance and contribution to the organization, and the executive’s level of responsibility. The target grant date fair value was allocated 50% to performance-based equity (with one-, two- and three-year ROE financial metrics as outlined above) and 50% to time-vesting equity. The following table shows the restricted stock granted to each of the Company’s Named Executive Officers (other than Messrs. Stewart and Wentzel, who were nearing retirement at the time of the awards and did not receive an award) effective May 23, 2023:
Long-Term Incentive Compensation
| Name | Target Value of Equity Awards(1) ($) | Target Shares of Performance Vesting Restricted Stock(2) (#) | Shares of Time Vesting Restricted Stock (#) | | Michael R. Haack | 4,800,000 | 14,393 | 14,393 | | D. Craig Kesler | 1,300,000 | 3,899 | 3,899 | | Matt Newby | 750,000 | 2,249 | 2,249 | | Eric Cribbs | 500,000 | 1,500 | 1,500 | | Tony Thompson | 450,000 | 1,350 | 1,350 |
Long-Term Incentive Compensation
______________________ (1) Half of the target value is allocated to performance-based awards and half of the target value is allocated to time-vesting awards. Twenty-five percent of the award was subject to a one-year performance period, 25% to a two-year performance period and 50% to a three-year performance period. The shares in this column assume achievement of the target level of performance conditions, and the following reflects the shares assuming the highest level of performance conditions (i.e., the maximum shares payable): Mr. Haack - 17,272 shares; Mr. Kesler - 4,679 shares; Mr. Newby - 2,700 shares; Mr. Cribbs - 1,800 shares; and Mr. Thompson - 1,620 shares. The Compensation Committee believes that the structure of the fiscal 2024 long-term compensation program is consistent with the Compensation Committee’s philosophy of linking compensation to our performance. Performance-Based Equity Awards These awards are comprised of shares of restricted stock which are earned based upon the achievement by the Company of a certain level of average ROE for the relevant performance period, as detailed below:
Long-Term Incentive Compensation
| Average Return on Equity for Relevant Performance Period | Percent of Target Earned | | > 20.0% | 120% | | 15.0% | 100% | | 10.0% | 80% | | < 10.0% | 0% |
Long-Term Incentive Compensation
The exact percentage of shares earned is calculated based on straight-line interpolation between the points specified above with fractional points rounded to the nearest tenth of a percent. The earned performance-based equity was to become fully vested promptly after the certification date for the relevant performance period. The terms and conditions of the performance-based equity are substantially the same as prior performance-based awards, except that the performance periods are as described above and the award agreements contain restrictive covenants. Any performance-based equity that was not earned at the end of the relevant performance period was to be forfeited. In May 2024, the Compensation Committee certified that the Company’s 38.3% average ROE for the fiscal year ended March 31, 2024 satisfied the Company’s performance goal such that 120% of the target number of shares subject to the one-year performance period was earned, and such earned shares vested promptly following such certification. Time-Vesting Equity Awards These awards comprise shares of restricted stock which vest ratably over three years on March 31, 2024; March 31, 2025; and March 31, 2026 (in each case assuming continued service through such dates). The Compensation Committee believes that including time-vesting equity as part of long-term compensation is consistent with competitive pay practices, supports the Company’s philosophy that a significant portion of an executive’s pay should be at risk, enhances the retention of key employees, while at the same time creating a strong incentive for management to operate the business in a manner that creates additional value for stockholders. The terms and conditions of the time-vesting equity are substantially the same as prior time-vesting awards, except for the vesting period described above and the inclusion of restrictive covenants. As in the case of prior equity awards, the time-vesting equity will also vest upon a change in control of the Company except in limited circumstances. See “Change in Control Benefits” below.
Change in Control Benefits
Change in Control Benefits To better ensure the retention of our employees in the event of a potentially disruptive corporate transaction, we have provided our employees, including our Named Executive Officers, with certain change in control protections. We believe that such protections, which are consistent with the practices of our peer companies, are in the best interest of our stockholders because they enable our executive leadership team to fully focus on the benefits of a corporate transaction for stockholders, rather than the potential adverse consequences of the transaction on their careers and compensation. Change in Control Continuity Agreements To better ensure the retention of our executive leadership team in the event of a potentially disruptive corporate transaction, the Board has approved change in control continuity agreements with Messrs. Haack, Kesler and Newby. The change in control continuity agreements provide that, in the event of a change in control during the term, a two-year protection period will commence during which the relevant executive will be entitled to compensation and benefits on terms that are generally no less favorable than those that applied prior to the change in control. In the event of an executive’s involuntary termination of employment without cause or resignation for good reason during the two-year protection period, subject to the execution of a release of claims, he would be entitled to (a) cash severance equal to the product of (i) a severance multiple of 3 (for Mr. Haack), 2.5 (for Mr. Kesler) or 2 (for Mr. Newby), multiplied by (ii) the sum of his annual base salary and target annual bonus; (b) a prorated target annual bonus for the year of termination; (c) a payment in lieu of employer retirement savings plan contributions that he would have received had his employment continued for 18 months (for Mr. Haack), 15 months (for Mr. Kesler) or 12 months (for Mr. Newby) post-termination; (d) a payment equal to the premium for continued participation in health insurance plans for 18 months (for Mr. Haack), 15 months (for Mr. Kesler) or 12 months (for Mr. Newby) post-termination; and (e) outplacement benefits of up to $30,000. The change in control continuity agreements subject the executives to a perpetual confidentiality covenant and noncompetition covenants for 18 months (for Mr. Haack), 15 months (for Mr. Kesler) or 12 months (for Mr. Newby) post-termination. If any payments or benefits under the change in control continuity agreements would be subject to Sections 280G and 4999 of the Internal Revenue Code, such payments or benefits would be reduced to the extent that such reduction would place the executive in a better after-tax position. The initial term of the change in control continuity agreements is three years from the effective date of June 20, 2019 (for Messrs. Haack and Kesler) and May 31, 2022 (for Mr. Newby), subject in each case to automatic renewal for an additional year on each anniversary of the effective date. All of our change in control continuity agreements have a “double-trigger” termination right (requiring both a change in control and a qualifying termination of employment in order to receive the change in control severance payments), and they do not apply the severance multiple to long-term incentive award values or have tax gross-ups. Under our change in control continuity agreements a “change in control” is defined generally as (i) the acquisition by any person or entity of 35% or more of our outstanding Common Stock or the voting power of outstanding securities entitled to vote in the election of directors; (ii) a change in the composition of our Board such that the current members of the Board cease to constitute a majority of the Board; (iii) the consummation of a merger, asset disposition, share exchange or similar transaction, unless (1) more than 50% of the stock following such transaction is owned by persons or entities who were stockholders of the Company prior to such transaction, (2) following such transaction, no person or entity owns 35% or more of the common stock of the entity resulting from such transaction, and (3) at least a majority of the members of the resulting corporation’s board of directors were members of our Board; or (iv) our stockholders approve a complete liquidation or dissolution of the Company See “Potential Payments Upon Termination or Change in Control” below. Equity Awards Awards granted in fiscal 2024 under our 2013 Incentive Plan are subject to accelerated vesting upon the occurrence of a “change in control” as defined in the applicable award agreement if they are not assumed or replaced with equivalent awards in connection with such change in control. Under the award agreements or incentive program documents, a “change in control” is defined generally as: (i) the acquisition by any person or entity of 50% or more of the outstanding shares of any single class of our Common Stock or 40% or more of outstanding shares of all classes of our Common Stock; (ii) a change in the composition of our Board such that the current members of the Board cease to constitute a majority of the Board; or (iii) the consummation of a merger, dissolution, asset disposition, consolidation or share exchange, unless (a) more than 50% of the stock following such transaction is owned by persons or entities who were stockholders of the Company prior to such transaction, (b) following such transaction, no person or entity owns 40% or more of the common stock of the corporation resulting from such transaction, and (c) at least a majority of the members of the resulting corporation’s board of directors were members of our Board. If a change in control occurs, any unvested outstanding stock options, restricted stock, or restricted stock units would generally become immediately fully vested (with respect to performance awards, vesting would be either at target, maximum or other amount determined by the Compensation Committee), and, in the case of stock options, exercisable or, in the case of restricted stock or RSUs, payable, unless the transaction resulting in the change in control provides that the award is to be assumed or replaced with an award of equivalent shares of the surviving parent corporation. See “Potential Payments Upon Termination or Change in Control” below. Note that awards granted in May 2024 as part of our Fiscal 2025 compensation program under our 2023 Incentive Plan are governed by different change in control provisions, as described below under "Fiscal 2025 Compensation Developments."
Fiscal 2025 Compensation Developments
Fiscal 2025 Compensation Developments In light of a review of the Company’s long-term compensation program during the course of fiscal 2024 and taking into consideration stockholder feedback, in May 2024, the Compensation Committee modified several aspects of the Company’s long-term compensation program for fiscal 2025, including (i) the entire performance-vesting award is subject to a three-year performance period; (ii) the performance-vesting award is subject to more than one performance metric; and (iii) the equity awards are subject to the 2023 Incentive Plan's "double-trigger" change in control provisions. As we disclosed in our Form 8-K filed with the SEC on May 31, 2024, effective May 24, 2024, the Compensation Committee, as part of its annual compensation review, approved long-term incentive equity awards under the 2023 Incentive Plan to a group of the Company’s officers, including some of its Named Executive Officers. The awards are comprised of performance-vesting restricted stock units (“PSUs”) and time-vesting restricted stock units (“RSUs”). For the PSUs to be earned, the Company must achieve performance vesting criteria based on the Company’s average return on equity measured at the end fiscal 2027 (three-year performance period), as modified based on the Company’s average absolute total stockholder return during the performance period. Threshold performance will result in a vesting percentage of 50% of target and maximum performance will result in a vesting percentage of 200% of target. Earned PSUs will be paid in shares of Common Stock promptly following the performance certification date. During the performance period, the PSUs will accrue dividend-equivalent restricted stock units, which will be paid in shares of Common Stock with respect to any earned PSUs. • The RSUs will vest ratably over the three fiscal year-ends following the date of grant (assuming continued service by the relevant officer); provided, the first vesting will occur on the one-year anniversary of the date of grant. RSUs will be paid in shares of Common Stock promptly following a vesting date. During the vesting period, the RSUs will accrue dividend-equivalent restricted stock units, which will be paid in shares of Common Stock with respect to any vested RSUs. The fiscal 2025 long-term equity awards are subject to the "double-trigger" change in control provisions of the 2023 Incentive Plan, as described in our 2023 proxy statement.
Fiscal 2024 Summary Compensation Table
Fiscal 2024 Summary Compensation Table The following table summarizes all fiscal 2022, 2023 and 2024 compensation earned by or paid to our Named Executive Officers, who consist of our Chief Executive Officer, our Chief Financial Officer and the three most highly compensated executive officers (other than the Chief Executive Officer and Chief Financial Officer) who were serving as executive officers at fiscal year-end, as well as two former executive officers who retired from the Company during the fiscal year and are included in this table in accordance with Item 402(a)(3)(iv) of Regulation S-K.
Fiscal 2024 Summary Compensation Table
| Name and Principal Position | Fiscal Year Ended March 31, | Salary(1) ($) | Stock Awards(2) ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation(3) ($) | All Other Compensation(4) ($) | Total ($) | | Michael R. Haack | 2024 | 1,040,000 | 4,800,000 | — | 2,107,341 | 108,736 | 8,056,077 | | President and Chief | 2023 | 1,000,000 | 3,375,000 | 1,125,000 | 2,012,014 | 102,774 | 7,614,788 | | Executive Officer | 2022 | 900,000 | 4,000,000 | — | 1,641,881 | 93,869 | 6,635,750 | | D. Craig Kesler | 2024 | 590,000 | 1,300,000 | — | 1,016,039 | 62,703 | 2,968,742 | | Executive Vice President - | 2023 | 515,036 | 750,000 | 250,000 | 1,257,509 | 57,063 | 2,829,608 | | Finance and Administration | 2022 | 500,035 | 1,000,000 | — | 1,260,730 | 55,938 | 2,816,703 | | & Chief Financial Officer | | | | | | | | | Matt Newby(5) | 2024 | 475,000 | 750,000 | — | 564,466 | 49,497 | 1,838,963 | | Executive Vice President | 2023 | 392,268 | 700,000 | — | 462,209 | 41,398 | 1,595,875 | | General Counsel and | | | | | | | | | Secretary | | | | | | | | | Eric Cribbs(6) | 2024 | 346,286 | 500,000 | — | 443,260 | 39,904 | 1,329,450 | | President - American | | | | | | | | | Gypsum Company | | | | | | | | | Tony Thompson(6) | 2024 | 323,912 | 450,000 | — | 329,169 | 38,124 | 1,141,205 | | Senior Vice President - | | | | | | | | | Cement East | | | | | | | | | Robert S. Stewart(7) | 2024 | 148,449 | 2,203,870(8) | — | — | — | 2,352,319 | | Retired Executive Vice | 2023 | 494,833 | 900,000 | — | 1,066,637 | 49,783 | 2,511,253 | | President - Strategy, Corporate | 2022 | 480,420 | 900,000 | — | 1,084,814 | 48,702 | 2,513,936 | | Development & Communications | | | | | | | | | Steven L. Wentzel(9) | 2024 | 59,697 | 1,469,304(8) | 56,115(8) | — | — | 1,585,116 | | Retired President - | 2023 | 350,100 | 600,000 | — | 675,000 | 37,694 | 1,662,794 | | American Gypsum Company | 2022 | 339,900 | 600,000 | — | 672,047 | 36,862 | 1,648,809 |
Fiscal 2024 Summary Compensation Table
(1) Includes amounts deferred on a pre-tax or after-tax basis at the election of the executive under our Retirement Plan, which is described in greater detail under “Retirement Plan” above. (2) Except as noted in any footnoted number, the amounts in this column reflect the value of restricted stock awards made to the Named Executive Officer in each of the fiscal years presented and are consistent with the grant date fair value of the award computed in accordance with FASB ASC Topic 718. For assumptions used in determining these values, refer to footnote (__) to the Company's audited financial statements for the fiscal year ended March 31, 2024 included in the Fiscal 2024 Form 10-K. Unless otherwise noted, the amounts in this column for fiscal 2024 assume achievement of the target level of performance conditions, and the following reflects the amounts for this award assuming the highest level of performance conditions (i.e., the maximum amounts payable): Mr. Haack - $5,280,000; Mr. Kesler - $1,430,000; Mr. Newby - $825,000; Mr. Cribbs - $550,000; and Mr. Thompson - $495,000. The amounts in this column represent payments to the Named Executive Officer under the applicable annual cash incentive compensation program for the applicable fiscal year. The amounts shown in this column represent: (a) Company profit sharing contributions to the account of the Named Executive Officer under our Retirement Plan (the Retirement Plan is described in greater detail under “Retirement Plan” above); (b) Company contributions to the account of the Named Executive Officer under our SERP (the SERP is described in greater detail under “SERP” above); (c) amounts paid with respect to individual life insurance policies under the Executive Life Insurance Plan (the plan is described in greater detail under “Executive Life Insurance Plan” above); and (d) health wellness awards. The table below provides further details of the amounts reflected in the All Other Compensation column for Fiscal 2024:
Fiscal 2024 Summary Compensation Table
| Name | Fiscal Year Ended March 31, | Profit Sharing Plan Contribution ($) | SERP Contribution ($) | Executive Life Insurance Plan ($) | Health Wellness Award ($) | Total of All Other Compensation ($) | | Michael R. Haack | 2024 | 33,000 | 70,000 | 5,571 | 165 | 108,736 | | D. Craig Kesler | 2024 | 33,000 | 24,126 | 4,917 | 660 | 62,703 | | Matt Newby | 2024 | 33,000 | 12,432 | 4,065 | - | 49,497 | | Eric Cribbs | 2024 | 33,000 | 1,629 | 4,945 | 330 | 39,904 | | Tony Thompson | 2024 | 32,392 | - | 5,072 | 660 | 38,124 | | Robert S. Stewart | 2024 | - | - | - | - | - | | Steven L. Wentzel | 2024 | - | - | - | - | - |
Fiscal 2024 Summary Compensation Table
(5) Mr. Newby was not a Named Executive Officer prior to fiscal year 2023. In accordance with SEC disclosure requirements, his compensation disclosure is provided only for the fiscal years in which he served as a Named Executive Officer. (6) Messrs. Cribbs and Thompson were not Named Executive Officers prior to fiscal year 2024. In accordance with SEC disclosure requirements, their compensation disclosure is provided only for the fiscal year in which they served as a Named Executive Officer. (7) Mr. Stewart retired effective July 3, 2023. (8) These amounts do not relate to new equity awards to Messrs. Stewart or Wentzel—rather, they represent the incremental fair value of the treatment of their outstanding equity awards at the time of their retirement. For each of the retiring officers, the Board determined that his departure constituted a Board-approved retirement from service, and therefore, pursuant to the terms of the award agreements, his outstanding restricted stock (both time-vesting awards and performance-vesting awards for which the performance condition had been satisfied) accelerated vesting upon retirement, and Mr. Wentzel's outstanding stock options will survive for the remaining term following retirement. The value of these retirement-related items is reflected in the table, in each case computed in accordance with FASB ASC Topic 718. (9) Mr. Wentzel retired effective June 1, 2023.
Grants of Plan-Based Awards
Grants of Plan-Based Awards The following table sets forth the grants of plan-based awards made during fiscal 2024 to the Named Executive Officers.
Grants of Plan-Based Awards
| | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | All Other Stock Awards: Number of Shares of Stock | All Other Option Awards: Number of Securities Underlying | Grant Date Fair Value of Stock and | | Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | or Units (#) | Options (#) | Option Awards(1) | | Michael R. Haack | 5/17/23 | — | 2,218,253(2) | — | — | — | — | — | — | — | | | 5/23/23 | — | — | — | — | — | — | 14,393(3) | — | $2,400,000 | | | 5/23/23 | — | — | — | 11,515(4) | 14,393(4) | 17,272(4) | — | — | 2,400,000 | | D. Craig Kesler | 5/17/23 | — | 1,069,515(2) | — | — | — | — | — | — | — | | | 5/23/23 | — | — | — | — | — | — | 3,899(3) | — | 650,000 | | | 5/23/23 | — | — | — | 3,120(4) | 3,899(4) | 4,679(4) | — | — | 650,000 | | Matt Newby | 5/17/23 | — | 594,175(2) | — | — | — | — | — | — | — | | | 5/23/23 | — | — | — | — | — | — | 2,249(3) | — | 375,000 | | | 5/23/23 | — | — | — | 1,800(4) | 2,249(4) | 2,700(4) | — | — | 375,000 | | Eric Cribbs | 5/17/23 | — | 450,000(2) | — | — | — | — | — | — | — | | | 5/23/23 | — | — | — | — | 0 | — | 1,500(3) | — | 250,000 | | | 5/23/23 | — | — | — | 1,200(4) | 1,500(4) | 1,800(4) | — | — | 250,000 | | Tony Thompson | 5/17/23 | — | 350,000(2) | — | — | — | — | — | — | — | | | 5/23/23 | — | — | — | — | — | — | 1,350(3) | — | 225,000 | | | 5/23/23 | — | — | — | 1,080(4) | 1,350(4) | 1,620(4) | — | — | 225,000 | | Robert S. Stewart | 5/16/23 | — | — | — | — | — | — | 13,547(5) | — | 2,203,870 | | Steven L. Wentzel | 5/16/23 | — | — | — | — | — | — | 9,030(5) | — | 1,469,304 | | | 5/16/23 | — | — | — | — | — | — | — | 2,582(5) | 56,115 |
Grants of Plan-Based Awards
(1) The amounts included in this column reflect the grant date fair value of the award computed in accordance with FASB ASC Topic 718. Assumptions used in the calculation of these amounts are included in footnote (K) to the Company’s audited financial statements for the fiscal year ended March 31, 2024 included in the Fiscal 2024 Form 10-K. (2) These amounts represent the maximum annual incentive payments potentially payable to the Named Executive Officers pursuant to the Eagle Annual Incentive Program or the Divisional Annual Cash Incentive Award Programs, as applicable, for fiscal 2024. They represent the lower of (i) the individual's pool percentage multiplied by the applicable operating earnings or EBITDA for the fiscal year; and (ii) the individual cap amount described in the fiscal 2024 programs (a multiple of base salary or a separately approved cap amount, as applicable). The actual pay-outs to the Named Executive Officers were as follows: Mr. Haack - $2,107,341; Mr. Kesler - $1,016,039; Mr. Newby - $564,466; Mr. Cribbs - $443,260; and Mr. Thompson - $329,169. These annual incentive programs, including individual caps on potential awards, are described in greater detail in “Annual Cash Incentive Award” above. (3) These amounts represent grants of time-vesting restricted stock made on May 23, 2023 under our 2013 Incentive Plan. One-third of the restricted stock vested on March 31, 2024, and restrictions on the remaining restricted stock will lapse ratably on March 31 of 2025 and 2026. These restricted stock grants are described in greater detail in “Long-Term Incentive Compensation—Fiscal 2024 Grants” above. (4) These amounts represent grants of performance-based restricted stock made on May 23, 2023 under our 2013 Incentive Plan. The vesting of the restricted stock is subject to performance vesting criteria. Twenty-five percent of the target performance shares are subject to a one-year performance period, 25% are subject to a two-year performance period, and 50% are subject to a three-year performance period. On May 3, 2024, the Compensation Committee determined that 120% of the target award subject to the one-year performance period had been earned, and the earned restricted stock vested on May 10, 2024. These restricted stock grants are described in greater detail in “Long-Term Incentive Compensation—Fiscal 2024 Grants” above. (5) These amounts do not relate to new equity awards to Messrs. Stewart or Wentzel—rather, they represent the incremental fair value of the treatment of their outstanding equity awards at the time of their retirement. For each of the retiring officers, the Board determined that his departure constituted a Board-approved retirement from service, and therefore, pursuant to the terms of the award agreements, his outstanding restricted stock (both time-vesting awards and performance-vesting awards for which the performance condition had been satisfied) accelerated vesting upon retirement, and Mr. Wentzel's outstanding stock options will survive for the remaining term following retirement. The value of these retirement-related items is reflected in the far right column of this table, in each case computed in accordance with FASB ASC Topic 718.
Outstanding Equity Awards at 2024 Fiscal Year-End
Outstanding Equity Awards at 2024 Fiscal Year-End The following table summarizes stock-based compensation awards outstanding at the end of fiscal 2024 for each of the Named Executive Officers.
Outstanding Equity Awards at 2024 Fiscal Year-End
| | Option Awards | | | | | Stock Awards | | | | | Name | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | | Michael R. Haack | 20,979 | — | — | 91.58 | 05/16/2029 | 4,309(4) | $1,170,971 | — | — | | | 35,662 | — | — | 60.21 | 05/19/2030 | 3,590(5) | 975,583 | — | — | | | 19,812 | — | — | 60.21 | 05/19/2030 | 8,022(6) | 2,179,979 | — | — | | | 6,954 | 6,953(2) | — | 126.22 | 05/19/2032 | 6,684(7) | 1,816,377 | — | — | | | 5,795 | 5,794(3) | — | 126.22 | 05/19/2032 | 4,318(8) | 1,173,417 | — | — | | | | | | | | — | — | 4,318(9) | 1,173,417 | | | | | | | | — | — | 8,636(10) | 2,346,833 | | | | | | | | 9,595(11) | 2,607,441 | — | — | | D. Craig Kesler | 9,646 | — | — | 91.58 | 05/16/2029 | 11,667(12) | 3,170,507 | — | — | | | 9,135 | — | — | 91.58 | 05/16/2029 | 1,077(4) | 292,675 | — | — | | | 8,586 | — | — | 60.21 | 05/19/2030 | 897(5) | 243,760 | — | — | | | 11,322 | — | — | 60.21 | 05/19/2030 | 1,782(6) | 484,259 | — | — | | | 1,546 | 1,545(2) | — | 126.22 | 05/19/2032 | 1,486(7) | 403,821 | — | — | | | 1,288 | 1,288(3) | — | 126.22 | 05/19/2032 | 1,170(8) | 317,948 | — | — | | | | | | | | — | — | 1,170(9) | 317,948 | | | | | | | | — | — | 2,339(10) | 635,623 | | | | | | | | 2,599(11) | 706,278 | — | — | | Matt Newby | 3,859 | — | — | 91.58 | 05/16/2029 | 431(4) | 117,124 | — | — | | | 3,654 | — | — | 91.58 | 05/16/2029 | 359(5) | 97,558 | — | — | | | 2,718 | — | — | 60.21 | 05/19/2030 | 1,664(6) | 452,192 | — | — | | | 2,265 | — | — | 60.21 | 05/19/2030 | 1,386(7) | 376,646 | — | — | | | | | | | | 675(8) | 183,431 | — | — | | | | | | | | — | — | 675(9) | 183,431 | | | | | | | | — | — | 1,350(10) | 366,863 | | | | | | | | 1,499(11) | 407,353 | — | — | | Eric Cribbs | 764 | — | — | 60.21 | 05/19/2030 | 484(4) | 131,527 | — | — | | | 637 | — | — | 60.21 | 05/19/2030 | 404(5) | 109,787 | — | — | | | | | | | | 1,070(6) | 290,773 | — | — | | | | | | | | 891(7) | 242,129 | — | — | | | | | | | | 450(8) | 122,288 | — | — | | | | | | | | — | — | 450(9) | 122,288 | | | | | | | | — | — | 900(10) | 244,575 | | | | | | | | 1,000(11) | 271,750 | — | — |
Outstanding Equity Awards at 2024 Fiscal Year-End
| | Option Awards | | | | | | Stock Awards | | | | | Name | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(1) | | Tony Thompson | 764 | — | — | — | 60.21 | 05/19/2030 | 484(4) | 131,527 | — | — | | | 637 | — | — | — | 60.21 | 05/19/2030 | 404(5) | 109,787 | — | — | | | 348 | 695(2) | — | — | 126.22 | 05/19/2032 | 802(6) | 217,944 | — | — | | | 290 | 579(3) | — | — | 126.22 | 05/19/2032 | 668(7) | 181,529 | — | — | | | | | | | | | 405(8) | 110,059 | — | — | | | | | | | | | — | — | 405(9) | 110,059 | | | | | | | | | — | — | 810(10) | 220,118 | | | | | | | | | 900(11) | 244,575 | — | — | | Robert S. Stewart | — | — | — | | — | — | — | — | — | — | | Steven L. Wentzel | — | — | — | | — | — | — | — | — | — |
Outstanding Equity Awards at 2024 Fiscal Year-End
Based on the closing price per share of Common Stock on the NYSE on March 29, 2024 ($271.75). (2) Represents performance-based stock options granted on May 19, 2022 under our 2013 Incentive Plan. The remaining earned stock options will vest on March 31 of 2025 and 2026. (3) Represents time-vesting stock options granted on May 19, 2022 under our 2013 Incentive Plan. The remaining stock options will vest on March 31 of 2025 and 2026. (4) Represents performance-based restricted stock granted on May 19, 2021 under our 2013 Incentive Plan. Restrictions on the remaining earned shares will lapse ratably on March 31, 2025. (5) Represents time-vesting restricted stock granted on May 19, 2021 under our 2013 Incentive Plan. Restrictions will lapse ratably on March 31, 2025. (6) Represents performance-based restricted stock granted on May 19, 2022 under our 2013 Incentive Plan. Restrictions on the remaining earned shares will lapse ratably on March 31 of 2025 and 2026. (7) Represents time-vesting restricted stock granted on May 19, 2022 under our 2013 Incentive Plan. Restrictions will lapse ratably on March 31 of 2025 and 2026. (8) Represents the maximum number (120% of target) of one-year performance-based restricted stock granted on May 23, 2023 under our 2013 Incentive Plan. The Compensation Committee determined in May 2024 (i.e., after the end of fiscal 2024) that 120% of the target award was earned. The earned restricted shares were paid to the Named Executive Officer on May 10, 2024. (9) Represents the maximum number (120% of target) of two-year performance-based restricted stock granted on May 23, 2023 under our 2013 Incentive Plan. The Compensation Committee will determine in May 2025 (i.e., after the end of fiscal 2025) if any of the award was earned. Any earned restricted shares will be paid to the Named Executive Officer promptly thereafter. (10) Represents the maximum number (120% of target) of three-year performance-based restricted stock granted on May 23, 2023 under our 2013 Incentive Plan. The Compensation Committee will determine in May 2026 (i.e., after the end of fiscal 2026) if any of the award was earned. Any earned restricted shares will be paid to the Named Executive Officer promptly thereafter. (11) Represents time-vesting restricted stock granted on May 23, 2023 under our 2013 Incentive Plan. Restrictions on the first one-third lapsed on March 31, 2024. Restrictions on the remaining shares will lapse ratably on March 31 of 2025 and 2026. Represents restricted stock granted on May 18, 2010 under our 2013 Incentive Plan. Restrictions will lapse upon the Named Executive Officer meeting the requirements of retirement, as defined in the award agreement.
Option Exercises and Stock Vested in Fiscal 2024
Option Exercises and Stock Vested in Fiscal 2024 The following table sets forth information regarding the exercise of stock options and the vesting of restricted stock during fiscal 2024 for each of our Named Executive Officers.
Option Exercises and Stock Vested in Fiscal 2024
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting(1) (#) | Value Realized on Vesting(2) ($) | | Michael R. Haack | 49,730 | 5,420,649 | 32,055 | 8,256,099 | | D. Craig Kesler | 18,734 | 1,609,516 | 8,085 | 2,095,946 | | Matt Newby | 15,964 | 1,684,185 | 5,267 | 1,336,959 | | Eric Cribbs | 12,319 | 1,646,272 | 4,446 | 1,147,532 | | Tony Thompson | 10,094 | 817,600 | 4,017 | 1,046,033 | | Robert S. Stewart | — | — | 14,617 | 2,684,300 | | Steven L. Wentzel | 2,582 | 202,481 | 9,744 | 1,585,765 |
Option Exercises and Stock Vested in Fiscal 2024
(1) All of the amounts in this column represent shares of Common Stock received by the Named Executive Officer in connection with the lapsing of restrictions on restricted stock previously granted to the Named Executive Officers. (2) The amount in this column represents the dollar amount realized by the Named Executive Officer valued at the time of the vesting of such shares of Common Stock.
Nonqualified Deferred Compensation
Nonqualified Deferred Compensation
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL The following is a summary of the potential payments payable to the Named Executive Officers upon termination of employment or a change in control of the Company under compensation programs in effect as of the last business day of fiscal year 2024 (other than Messrs. Stewart and Wentzel, who retired in fiscal 2024 and whose retirement treatment and benefits are summarized below). Specifically, compensation payable to each Named Executive Officer upon voluntary termination, involuntary termination or in the event of death or disability and change in control is discussed below. The amounts shown in the tables below assume that such termination and/or change in control was effective as of March 29, 2024, and therefore do not necessarily reflect the actual amounts which would be paid out to the executives (or their beneficiaries) upon their termination. Due to the number of factors that affect the nature and amount of any benefits provided upon the events discussed below, any actual amounts paid or distributed may be different. Factors that could affect these amounts include the timing during the year of any such event, the price of our Common Stock and the executive’s age.
CEO PAY RATIO
CEO PAY RATIO Pursuant to a mandate of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Securities and Exchange Commission (the “SEC”) has adopted Item 402(u) of Regulation S-K requiring annual disclosure of a reasonable estimate of the ratio of the annual total compensation of our chief executive officer to the annual total compensation of the employee of the Company or one of its consolidated subsidiaries who is determined to have the median compensation of all employees of the Company and its subsidiaries, collectively (excluding the CEO). The rule also requires annual disclosure of such median employee’s annual total compensation for the applicable fiscal year and the CEO’s annual total compensation for the applicable fiscal year, in each case as determined in accordance with the rules governing the presentation of total compensation of the Named Executive Officers in the Summary Compensation Table presented in this proxy statement. Our CEO is Mr. Haack. To identify the median-compensated employee for fiscal 2024, we examined the total gross W-2 compensation data for fiscal 2024 for employees who were employed by the Company or its consolidated subsidiaries on March 31, 2024. Based on this data, we determined the median-compensated employee. We then calculated such employee’s total fiscal 2024 compensation in accordance with the rules governing the presentation of the total compensation of the Named Executive Officers in the Summary Compensation Table. Based on this methodology, the fiscal 2024 annual total compensation for the median-compensated employee was $84,061. As reported in the Summary Compensation Table of this Proxy Statement, the fiscal 2024 annual total compensation of our CEO, Mr. Haack, was $8,056,077. The ratio of the CEO’s annual total compensation to the median-compensated employee’s annual total compensation was approximately 96:1. This pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records and the methodology described above
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE As required by Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation for our principal executive officer (“PEO”) and non-PEO Named Executive Officers and the financial performance of the Company. The table below addresses compensation actually paid (“CAP”) to the PEO and the non-PEO Named Executive Officers, which is a concept developed by the SEC for purposes of this tabular disclosure and does not imply that the covered executives actually received payments or value equal to the CAP during the applicable fiscal year. Although the Compensation Committee focuses on pay relative to performance in its executive compensation decisions, it has not historically utilized CAP as a key measure in implementing its pay-for-performance philosophy. For further information concerning the Company’s pay-for-performance philosophy and how the Company aligns executive compensation with the Company’s performance, refer to “Compensation Discussion and Analysis” above. The Company has selected Return on Equity as the company-selected financial performance measure presented in the table below. Although the Company uses numerous financial and non-financial performance measures for the purpose of evaluating performance for the Company’s compensation programs, the Company has determined that Return on Equity is the financial performance measure that represents the most important performance measure (that is not otherwise required to be disclosed in the table) used by the Company to link compensation actually paid to the Company’s Named Executive Officers for the most recently completed fiscal year to Company performance.
PAY VERSUS PERFORMANCE
| | | | Average Summary Compensation Table | Average Compensation | Value of Initial Fixed $100 Investment Based On: | | | | | Fiscal Year Ended March 31, | Summary Compensation Table Total for PEO(1) ($) | Compensation Actually Paid to PEO(2) ($) | Total for Non-PEO Named Executive Officers(3) ($) | Actually Paid to Non-PEO Named Executive Officers(4) ($) | Total Shareholder Return(5) ($) | Peer Group Total Shareholder Return(5) ($) | Net Income (dollars in thousands)(6) ($) | Return on Equity(7) | | 2024 | 8,056,077 | 22,709,116 | 1,869,299 | 2,903,491 | 475.35 | 295.88 | 477,639 | 38.3% | | 2023 | 7,614,788 | 10,936,146 | 2,121,005 | 2,342,020 | 255.39 | 190.86 | 461,540 | 32.2% | | 2022 | 6,635,750 | 6,645,203 | 2,340,739 | 2,311,876 | 221.62 | 200.39 | 374,247 | 24.6% | | 2021 | 5,761,074 | 17,679,107 | 2,167,814 | 5,014,372 | 230.42 | 194.28 | 339,444 | 20.0% |
PAY VERSUS PERFORMANCE
(1) Mr. Haack has been our PEO for each of the fiscal years included in this table. The dollar amounts reported in this column are the amounts of total compensation reported for Mr. Haack for each corresponding year in the “Total” column of the Summary Compensation Table. Refer to the Summary Compensation Table of this Proxy Statement. (2) The dollar amounts reported in this column represent the amount of the CAP for Mr. Haack, as computed in accordance with Item 402(v)(2)(iii) of Regulation S-K. Mr. Haack did not participate during these fiscal years in any defined benefit or actuarial benefit plans of the type that would be required to be reported in the Summary Compensation Table. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to Mr. Haack’s total compensation for fiscal year 2024 to determine CAP:
PAY VERSUS PERFORMANCE
| Fiscal Year Ended March 31, | Reported Summary Compensation Table Total for PEO ($) | Reported Value of Equity Awards(a) ($) | Equity Award Adjustments(b) ($) | Compensation Actually Paid to PEO ($) | | 2024 | 8,056,077 | (4,800,000) | 19,453,039 | 22,709,116 |
PAY VERSUS PERFORMANCE
(a) This column deducts the total of the amounts reported in the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table for the covered fiscal year. (b) This column reflects the following adjustments in respect of stock awards and option awards for the covered fiscal year: (i) add the fiscal year-end fair value of any equity awards granted during the covered fiscal year that are outstanding and unvested as of the end of the fiscal year; (ii) add the amount of change as of the end of the covered fiscal year (from the end of the prior fiscal year) in fair value (whether positive or negative) of any awards granted in prior years that are outstanding and unvested as of the end of the covered fiscal year; (iii) add, for awards that are granted and vest in the same covered fiscal year, the fair value as of the vesting date; (iv) add, for awards granted in prior years that vest in the covered fiscal year, the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in fair value (whether positive or negative); (v) subtract, for awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the covered fiscal year, the amount equal to the fair value at the end of the prior fiscal year; and (vi) add the dollar value of any dividends or other earnings paid on stock or option awards in the covered fiscal year prior to the vesting date that are not otherwise included in total compensation for the covered fiscal year. The valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. The amounts deducted or added in calculating the equity award adjustments are as follows:
PAY VERSUS PERFORMANCE
| Fiscal Year Ended March 31, | Fiscal Year-End Fair Value of Covered Fiscal Year Equity Awards that are Outstanding and Unvested at Covered Fiscal Year-End ($) | Change in Fair Value (from Prior Fiscal Year-End to Covered Fiscal Year-End) of Prior Year Equity Awards that are Outstanding and Unvested at Covered Fiscal Year-End ($) | Fair Value as of Vesting Date of Covered Fiscal Year Equity Awards that Vested in the Covered Fiscal Year ($) | Change in Fair Value (from Prior Fiscal Year-End to Vesting Date) of Equity Awards Granted in Prior Years that Vested in the Covered Fiscal Year ($) | Fair Value at End of the Prior Fiscal Year of Equity Awards that Failed to Meet Vesting Conditions in the Covered Fiscal Year ($) | Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Total Compensation ($) | Total Equity Award Adjustments ($) | | 2024 | 7,301,107 | 4,650,743 | 1,303,857 | 6,121,824 | - | 75,508 | 19,453,039 |
PAY VERSUS PERFORMANCE
Our non-PEO Named Executive Officers in the fiscal years reported in this table are as follows: Fiscal 2024 non-PEO Named Executive Officers were Messrs. Kesler, Newby, Cribbs, Thompson, Stewart and Wentzel; fiscal 2023 non-PEO Named Executive Officers were Messrs. Kesler, Stewart, Newby, Wentzel and James H. Graass; fiscal 2022 non-PEO Named Executive Officers were Messrs. Kesler, Stewart, Wentzel and Graass; and fiscal 2021 non-PEO Named Executive Officers were Messrs. Kesler, Stewart, Wentzel and Graass. The dollar amounts reported in this column represent the average of the amounts reported for the non-PEO Named Executive Officers as a group in the “Total” column of the Summary Compensation Table in each applicable year’s proxy statement. (4) The dollar amounts reported in this column represent the average amount of CAP for the non-PEO Named Executive Officers as a group, as computed in accordance with Item 402(v) of Regulation S-K. The non-PEO Named Executive Officers did not participate during these fiscal years in any defined benefit or actuarial benefit plans of the type that would be required to be reported in the Summary Compensation Table. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to average total compensation for the non-PEO Named Executive Officers as a group for the covered fiscal year to determine the compensation actually paid, using the same methodology described above in footnote (2):
PAY VERSUS PERFORMANCE
| Fiscal Year Ended March 31, | Average Reported Summary Compensation Table Total for Non-PEO Named Executive Officers ($) | Average Reported Value of Equity Awards ($) | Average Equity Award Adjustments(a) ($) | Average Compensation Actually Paid to Non-PEO Named Executive Officers ($) | | 2024 | 1,869,299 | (1,121,548) | 2,155,740 | 2,903,491 |
PAY VERSUS PERFORMANCE
(a) The amounts deducted or added in calculating the equity award adjustments are as follows:
PAY VERSUS PERFORMANCE
| Fiscal Year Ended March 31, | Fiscal Year-End Fair Value of Covered Fiscal Year Equity Awards that are Outstanding and Unvested at Covered Fiscal Year-End ($) | Change in Fair Value (from Prior Fiscal Year-End to Covered Fiscal Year-End) of Prior Year Equity Awards that are Outstanding and Unvested at Covered Fiscal Year-End ($) | Fair Value as of Vesting Date of Covered Fiscal Year Equity Awards that Vested in the Covered Fiscal Year ($) | Change in Fair Value (from Prior Fiscal Year-End to Vesting Date) of Equity Awards Granted in Prior Years that Vested in the Covered Fiscal Year ($) | Fair Value at End of the Prior Fiscal Year of Equity Awards that Failed to Meet Vesting Conditions in the Covered Fiscal Year ($) | Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Total Compensation ($) | Total Equity Award Adjustments ($) | | 2024 | 775,710 | 607,137 | 135,875 | 623,655 | - | 13,363 | 2,155,740 |
PAY VERSUS PERFORMANCE
(5) Each year reflects what the cumulative total shareholder return on a $100 investment would be, including the reinvestment of dividends, if such amount were invested on March 31, 2020. The peer group used for this purpose is the following published industry index: Dow Jones US Building Materials & Fixtures. (6) The dollar amounts reported represent the amount of net income reflected in the Company’s audited financial statements for the applicable fiscal year. Return on Equity for a given fiscal year is defined as the net earnings of the Company for such fiscal year; divided by the Company’s average stockholders’ equity for such fiscal year (which is defined for any period to mean the Company’s total stockholders’ equity as of the beginning of such period plus the Company’s total stockholders’ equity at the end of such period; divided by 2). In calculating the average Return on Equity, the impact of certain extraordinary items not related to operating performance, including downward adjustment for the gain from the sale of non-core businesses, are excluded. __________________________
Compensation Actually Paid versus Return on Equity
Compensation Actually Paid versus Return on Equity
Compensation Actually Paid versus Net Income
Compensation Actually Paid versus Net Income
Compensation Actually Paid versus Total Shareholder Return
Compensation Actually Paid versus Total Shareholder Return