DEF 14A of Commercial Metals Co
Filed Nov 26, 2024 · FY20240000950170-24-130761
Cautionary Note Regarding Forward-Looking Statements; Available Information
| Lisa M. Barton President and CEO of Alliant Energy Corporation Age: 59 Director Since: 2020 Committees: Other Public Company Boards: 1 | Gary E. McCullough Retired – Former CEO of ARI Packaging, Inc. Age: 65 Director Since: 2021 Committees: Other Public Company Boards: 1 | Charles L. Szews Retired – Former President and CEO of Oshkosh Corporation Age: 68 Director Since: 2014 Committees: Other Public Company Boards: 2 |
Cautionary Note Regarding Forward-Looking Statements; Available Information
| Dennis V. Arriola Former CEO of Avangrid, Inc. Age: 63 Director Since: 2024 Committees: Other Public Company Boards: 2 | Peter R. Matt President and CEO of CMC Age: 62 Director Since: 2020 Other Public Company Boards: None | John R. McPherson Former EVP and Chief Financial and Strategy Officer of Vulcan Materials Company Age: 56 Director Since: 2022 Committees: Other Public Company Boards: None | | Tandra C. Perkins SVP, Chief Digital and Administrative Officer of The Phillips 66 Company Age: 53 Director Since: 2024 Committees: Other Public Company Boards: None | Sarah E. Raiss Retired – Former EVP, Corporate Services of TransCanada Corporation Age: 67 Director Since: 2011 Committees: Other Public Company Boards: 2 | Robert S. Wetherbee Executive Chairman of the Board and Former CEO of ATI Inc. Age: 65 Director Since: 2023 Committees: Other Public Company Boards: 1 |
Retirement and Non-Qualified Deferred Compensation Programs
Retirement and Non-Qualified Deferred Compensation Programs Retirement Plan: The primary tax qualified long-term compensation retirement plan we have for our employees in the United States is the Commercial Metals Companies Retirement Plan (the “401(k) Plan”). The 401(k) Plan is a defined contribution plan and all Company contributions to the plan are discretionary. Please see footnote 6 to the fiscal year 2024 Summary Compensation Table beginning on page 51 for more detailed information. Benefit Restoration Plan: As a result of limitations mandated by federal tax law and regulations that limit defined contribution plan retirement benefits of more highly compensated employees, CMC provides the Benefit Restoration Plan (“BRP”), a non-qualified plan for certain executives, including each of the NEOs, designated by the Compensation Committee, who are subject to federally mandated benefit limits in the 401(k) Plan. Following each calendar year-end, we credit to the participant’s account under the BRP a dollar amount equal to the amount of Company contributions that the participant would have received under the 401(k) Plan, but for the limits imposed by law on Company contributions to that plan. A BRP participant may also elect to defer up to 50% of his or her base salary and Annual Cash Incentive Bonus into his or her BRP account under which CMC provides a match on the elected deferrals up to 4.5% of the participant’s BRP-eligible compensation. The Compensation Committee believes that the BRP is an important element of our long-term compensation program in order to help attract and retain talent in a competitive market. Please see footnote 6 to the fiscal year 2024 Summary Compensation Table beginning on page 51 for more detailed information.
Termination, Severance and Change in Control Benefits
Termination, Severance and Change in Control Benefits As of August 31, 2024, the employment agreements with each of our NEOs provide severance benefits upon a qualifying termination of employment. In addition, we have entered into Executive Employment Continuity Agreements (“EECAs”) with each of the NEOs, which provide for enhanced severance benefits in the event of a qualifying termination of employment within two years following a Change in Control (as defined in such agreements). The termination provisions included in the employment agreements and EECAs are further described below in the “Potential Payments and Benefits Upon Termination or Change in Control” section beginning on page 56. The Compensation Committee believes the payments provided for under the employment agreements and EECAs upon a qualifying termination of employment to be reasonable in light of the non-competition obligations imposed upon the NEOs post-termination and in order to ensure that we have the continued attention and dedication of the executives during circumstances that could result in a Change in Control. Finally, the Annual Cash Incentive Plan provides that in the event of a Change in Control, the Compensation Committee has discretion to take such action as it determines to be in the best interest of the Company to determine the extent to which incentive compensation is considered earned and payable during any performance period. Deductibility of Executive Compensation Section 162(m) of the Code generally limits our federal tax deduction for compensation paid in any fiscal year to our CEO and our other “covered employees,” as defined in Section 162(m), to $1,000,000. Although the Compensation Committee has analyzed and will continue to analyze the effect that Section 162(m) and the potential lack of deduction for amounts paid in excess of the deduction limit may have on CMC, the Compensation Committee continues to retain flexibility to make compensation decisions that are based on factors other than Section 162(m) and related consequences when necessary or appropriate (as determined by the Compensation Committee in its sole discretion) to enable CMC to continue to attract, retain, reward and motivate its highly-qualified executives. This flexibility may include amending or modifying the design elements of our historical compensation programs to the extent those design elements were principally adopted in an effort to comply with Section 162(m). Compensation Risk Assessment – NEOs CMC’s compensation policies are structured to discourage inappropriate risk-taking by our executives. The “Compensation Risk Assessment—Company-Wide Compensation Policies and Programs” section on page 71 describes the Compensation Committee’s assessment, which includes, among other things, FW Cook’s annual risk assessment and the Compensation Committee’s belief that our compensation programs do not encourage excessive risk-taking and thus do not create risks that are reasonably likely to have a material adverse effect on CMC. Stock Ownership Guidelines and Policy Regarding Hedging and Pledging of Company Stock Our Board has implemented stock ownership guidelines for non-employee directors, executive officers and certain other senior level employees. Our Board believes that minimum ownership guidelines serve to further align the interests of those covered by the guidelines with the interests of our stockholders. Individuals who are hired, promoted into positions covered by the guidelines, or who are elected to serve on our Board, have five years following their hire or promotion or election date, as applicable, to attain the minimum ownership level applicable to their positions. The guidelines require ownership of Company common stock with a value of the greater of the current fair market value or the closing price per share on the date on which the shares were acquired, of not less than the amounts below, as determined on October 31st of each year. The Compensation Committee has established stock ownership guidelines for our non-employee directors, executive officers and other senior level employees, as set forth in the following table:
Termination, Severance and Change in Control Benefits
| Position | Stock Ownership Guidelines | | Non-employee directors | 5x the director’s prevailing annual cash retainer award | | President and CEO | 5x base salary | | COO | 4x base salary | | EVPs, SVPs, CFO, Chief Human Resources and Communications Officer and Chief Legal Officer | 3x base salary | | Other executives as may be designated by the Compensation Committee | 1x base salary |
Termination, Severance and Change in Control Benefits
Unvested time-vested restricted stock and unvested time-vested RSUs are included when determining the amount of stock ownership, with each share of unvested time-vested restricted stock and each share underlying unvested time-vested RSUs counting as one share of Company common stock. Stock appreciation rights and stock options, whether or not vested, and unearned PSUs do not count for purposes of determining compliance with the stock ownership guidelines. In addition, unvested restricted stock and RSUs that are subject to conditions other than time vesting do not count for the purpose of determining stock ownership levels. All persons subject to the guidelines must retain 50% of the shares of Company common stock issued upon the vesting of any of their restricted stock or RSUs (after payment of taxes) until achievement of the retention levels. As of October 31, 2024, the measurement date specified in the Company’s stock ownership guidelines, all directors and NEOs have met or, within the applicable period, are expected to meet the stock ownership guidelines. CMC’s Statement of Company Policy on Insider Trading and Anti-Hedging prohibits all employees from buying or selling Company securities while aware of material non-public information and prohibits the disclosure of material non-public information to others who then trade in our securities. The policy is available on our website, www.cmc.com, by clicking on “Investors” then “Governance and Board of Directors.” As part of this policy, certain other Company securities related transactions by directors, officers and employees are also prohibited. The policy is premised on the belief that even in those circumstances where the proposed transaction may not constitute a violation of law or applicable regulations, it is nonetheless considered inappropriate for any director, officer or other employee of ours to engage in short-term or speculative transactions in our securities, which may be viewed as reducing their incentive to improve our performance or inconsistent with the objectives of our stockholders in general. Therefore, it is our policy that directors, officers and other employees may not engage in any transactions involving our securities which constitute short sales, puts, calls, forwards, futures or other derivative securities. The policy prohibits certain other transactions including hedging or monetization transactions, such as zero-cost collars, forward sale contracts and arrangements pledging Company securities as collateral for a loan. equity award timing Policies The Company does not currently grant awards of stock options, stock appreciation rights, or similar option-like instruments. Accordingly, the Company has no specific policy or practice on the timing of such awards in relation to the disclosure of material non-public information by the Company. If in the future the Company determines to grant new awards of options, stock appreciation rights, or similar option-like instruments, the Company will establish a policy regarding the timing of such awards in relation to the disclosure of material non-public information, and the Board will evaluate the appropriate steps to take in relation to the foregoing. Clawback Policy The Compensation Committee adopted a clawback policy, effective as of September 11, 2023, that complies with the NYSE’s clawback rules promulgated under SEC Rule 10D-1. Under this policy, in the event that the Company is required to prepare an accounting restatement of its financial statements due to the Company’s material noncompliance with any such financial reporting requirement, the policy requires that the Compensation Committee, to the extent legally permitted and pursuant to the terms of the policy, recover from current and former executive officers and Section 16 executive officers any cash bonuses paid pursuant to the Annual Cash Incentive Plan, any PSUs granted pursuant to the 2013 Long-Term Equity Incentive Plan, and any other cash bonuses or equity awards that are granted, earned or vest based wholly or in part on the attainment of a financial reporting measure as defined in the NYSE’s clawback rules. The amount subject to recovery is the excess of the incentive compensation received based on the erroneous data over the incentive compensation that would have been received had it been based on the restated results. The following tables, footnotes and narratives, found on pages 51 through 70, provide information regarding the compensation, benefits and equity awards in CMC for the NEOs. Fiscal Year 2024 Summary Compensation Table
Termination, Severance and Change in Control Benefits
| Name and Principal Position | Year | Salary ($) | Bonus ($)(2) | Stock Awards ($)(3) | Option Awards ($)(4) | Non-Equity Incentive Plan Compensation ($)(5) | All Other Compensation ($)(6) | Total ($) | | Barbara R. Smith(1) | 2024 | $805,846 | $— | $3,212,098 | $— | $624,000 | $155,663 | $4,797,607 | | Former Executive | 2023 | $1,171,539 | $— | $6,184,205 | $— | $2,023,582 | $224,299 | $9,603,625 | | Chairman | 2022 | $1,117,308 | $— | $5,825,836 | $— | $3,037,500 | $226,997 | $10,207,641 | | Peter R. Matt(7) | 2024 | $996,923 | $— | $4,517,044 | $— | $975,026 | $90,562 | $6,579,555 | | President and Chief | 2023 | $307,692 | $200,000 | $3,420,865 | $— | $389,322 | $94,306 | $4,412,185 | | Executive Officer | 2022 | $— | $— | $— | $— | $— | $— | $— | | Paul J. Lawrence | 2024 | $642,385 | $— | $1,288,769 | $— | $452,784 | $83,957 | $2,467,895 | | Senior Vice President, | 2023 | $620,385 | $— | $1,294,742 | $— | $689,000 | $91,873 | $2,696,000 | | Chief Financial Officer | 2022 | $591,923 | $— | $1,067,116 | $— | $952,000 | $93,509 | $2,704,548 | | Ty L. Garrison | 2024 | $610,000 | $— | $1,218,860 | $— | $380,628 | $77,445 | $2,286,933 | | Senior Vice President, | 2023 | $607,692 | $— | $1,263,679 | $— | $597,739 | $89,693 | $2,558,803 | | Operational and | 2022 | $591,923 | $— | $1,067,116 | $— | $892,500 | $293,697 | $2,845,236 | | Commercial | | | | | | | | | | Excellence | | | | | | | | | | Jody K. Absher | 2024 | $516,731 | $— | $779,283 | $— | $304,239 | $64,347 | $1,664,600 | | Senior Vice President, | 2023 | $491,154 | $— | $769,063 | $— | $454,756 | $74,399 | $1,789,372 | | Chief Legal Officer and | 2022 | $459,231 | $— | $722,523 | $— | $658,000 | $69,590 | $1,909,344 | | Corporate Secretary | | | | | | | | | | Jennifer J. Durbin | 2024 | $516,731 | $— | $779,283 | $— | $304,239 | $64,651 | $1,664,904 | | Senior Vice President, | 2023 | $491,154 | $— | $769,063 | $— | $454,756 | $72,940 | $1,787,913 | | Chief Human | 2022 | $459,231 | $— | $722,523 | $— | $658,000 | $69,705 | $1,909,459 | | Resources and | | | | | | | | | | Communications | | | | | | | | | | Officer | | | | | | | | |
Grants of Plan Based Awards in Fiscal Year 2024
Grants of Plan Based Awards in Fiscal Year 2024
Grants of Plan Based Awards in Fiscal Year 2024
| | | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | | | All Other Stock Awards: Number of Shares of Stock | Grant Date Fair Value of Stock and | | Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | or Units (#)(3) | Option Awards(4) | | Barbara R. Smith | 10/9/2023 | $400,000 | $800,000 | $1,600,000 | 19,975 | 39,950 | 79,900 | — | $1,963,543 | | | 10/9/2023 | $— | $— | $— | — | — | — | 26,633 | $1,248,555 | | Peter R. Matt | 10/9/2023 | $625,000 | $1,250,000 | $2,500,000 | 28,090 | 56,180 | 112,360 | — | $2,761,247 | | | 10/9/2023 | $— | $— | $— | — | — | — | 37,453 | $1,755,797 | | Paul J. Lawrence | 10/9/2023 | $290,250 | $580,500 | $1,161,000 | 6,710 | 13,420 | 26,840 | — | $659,593 | | | 10/9/2023 | $— | $— | $— | — | — | — | 13,421 | $629,176 | | Ty L. Garrison | 10/9/2023 | $244,000 | $488,000 | $976,000 | 6,346 | 12,692 | 25,384 | — | $623,812 | | | 10/9/2023 | $— | $— | $— | — | — | — | 12,693 | $595,048 | | Jody K. Absher | 10/9/2023 | $195,000 | $390,000 | $780,000 | 4,058 | 8,115 | 16,230 | — | $398,852 | | | 10/9/2023 | $— | $— | $— | — | — | — | 8,115 | $380,431 | | Jennifer J. Durbin | 10/9/2023 | $195,000 | $390,000 | $780,000 | 4,058 | 8,115 | 16,230 | — | $398,852 | | | 10/9/2023 | $— | $— | $— | — | — | — | 8,115 | $380,431 |
Grants of Plan Based Awards in Fiscal Year 2024
(1) Represents the Annual Cash Incentive Bonus under the Annual Cash Incentive Plan. The Annual Cash Incentive Plan and the terms of these awards are described in the section entitled “Annual Cash Incentive Bonus” on page 44. (2) Represents PSUs granted under CMC’s 2013 Long-Term Equity Incentive Plan, with 75% of the PSUs vesting based on CMC’s achievement of financial performance goals relating to Adjusted EBITDA (Comp) and ROICC, and 25% of the PSUs vesting based on CMC’s TSR performance compared to the TSR peer group. The performance period for the PSUs granted on October 9, 2023 commenced on September 1, 2023 and will continue through August 31, 2026. The 2024-2026 long-term incentive program is described in further detail in the section entitled “Long-Term Incentive Program” on page 46. (3) Represents RSUs granted under CMC’s 2013 Long-Term Equity Incentive Plan that vest ratably over three years from the date of grant, subject to the NEO’s continued employment through the applicable vesting date. Represents the grant date fair value of PSUs and RSUs awarded in fiscal year 2024 and calculated in accordance with FASB ASC Topic 718. The grant date fair value for the portion of the PSUs that vest based on Adjusted EBITDA (Comp) and ROICC performance was based on the probable outcome of the performance-based vesting conditions as of the grant date. The grant date fair value for the portion of the PSUs that vest based on Relative TSR performance was based on the probable outcome of the market-based vesting condition and the application of a Monte Carlo simulation model. Assumptions used in determining these values can be found in Note 13 in the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K, which was filed with the SEC on October 17, 2024. Narrative Disclosure to Summary Compensation Table and Grants of Plan Based Awards Table Each NEO was party to an employment agreement during fiscal year 2024. The agreements generally have an initial term of one year (with the exception of Ms. Smith’s agreement, which had an initial term of two years), with automatic one-year renewals thereafter unless terminated by either party. The employment agreements set forth a minimum annual base salary and provide that each executive is eligible to earn a bonus under our compensation program but has no guaranteed bonus amount. Each executive is also eligible to participate in or receive benefits under any plan or arrangement made generally available to our employees. Please see the narrative and tables included in the “Potential Payments and Benefits Upon Termination or Change in Control” section on pages 56 through 64 for a description of the compensation that would be paid to the NEOs in the event of their termination following a Change in Control (as defined below), as well as other events resulting in termination of employment. As discussed below, (i) we entered into an employment and transition agreement with Ms. Smith in connection with her appointment as Executive Chairman of the Board, effective September 1, 2023, which amended, restated and superseded her prior employment agreement and (ii) we entered into amended and restated employment agreements with Messrs. Garrison and Lawrence and Mses. Absher and Durbin, in each case effective October 13, 2023. Material terms of the grants of plan based awards are described on pages 44 through 45, where we have discussed the Annual Cash Incentive Bonus and pages 46 through 47, where we have discussed the long-term incentive awards. The fiscal year 2024 long-term incentive awards for our NEOs consisted of time-based RSUs and PSUs, with 75% of the PSUs vesting based on CMC’s achievement of financial performance goals related to Adjusted EBITDA (Comp) and ROICC and 25% of the PSUs vesting based on CMC’s TSR performance compared to the performance peer group. The percentage of salary and bonus (as noted in the Non-Equity Incentive Plan Compensation column) of each of the NEOs as compared to the total compensation in the Fiscal Year 2024 Summary Compensation Table is as follows: Ms. Smith (30%), Mr. Matt (30%), Mr. Lawrence (44%), Mr. Garrison (43%), Ms. Absher (49%), and Ms. Durbin (49%). Outstanding Equity Awards at Fiscal Year-End The following table and footnotes provide information regarding PSUs and RSUs outstanding as of the end of fiscal year 2024. As of August 31, 2024, none of our NEOs held outstanding options or stock appreciation rights (“SARs”). The market value of units that have not vested was determined by multiplying the closing market price of our common stock on the NYSE on August 30, 2024, $53.59, by the number of units that have not vested.
Outstanding Equity Awards at 2024 Fiscal Year-End
Outstanding Equity Awards at 2024 Fiscal Year-End
Outstanding Equity Awards at 2024 Fiscal Year-End
| Name | Number of Shares or Units of Stock That Have Not Vested | Market Value of Shares or Units of Stock That Have Not Vested | Equity Incentive Plan Awards: Number of Unearned Shares, Units, or Other Rights That Have Not Vested | Equity Incentive Plan Awards: Market Value or Payout Value of Unearned Shares, Units, or Other Rights That Have Not Vested | | Barbara R. Smith | 23,285(1) | $1,247,843 | — | $— | | | 39,453(2) | $2,114,286 | 177,532(3) | $9,513,940 | | | 26,633(6) | $1,427,262 | 79,900(7) | $4,281,841 | | Peter R. Matt | — | $— | — | $— | | | 23,810(4) | $1,275,978 | 71,428(5) | $3,827,827 | | | 37,453(6) | $2,007,106 | 112,360(7) | $6,021,372 | | Paul J. Lawrence | 5,389(1) | $288,797 | — | $— | | | 10,449(2) | $559,962 | 31,344(3) | $1,679,725 | | | 13,421(6) | $719,231 | 26,840(7) | $1,438,356 | | Ty L. Garrison | 5,389(1) | $288,797 | — | $— | | | 10,198(2) | $546,511 | 30,592(3) | $1,639,425 | | | 12,693(6) | $680,218 | 25,384(7) | $1,360,329 | | Jody K. Absher | 3,649(1) | $195,550 | — | $— | | | 6,207(2) | $332,633 | 18,618(3) | $997,739 | | | 8,115(6) | $434,883 | 16,230(7) | $869,766 | | Jennifer J. Durbin | 3,649(1) | $195,550 | — | $— | | | 6,207(2) | $332,633 | 18,618(3) | $997,739 | | | 8,115(6) | $434,883 | 16,230(7) | $869,766 |
Outstanding Equity Awards at 2024 Fiscal Year-End
(1) Represents RSUs granted on October 12, 2021, with one-third of the award vested one year after the date of grant, one-third of the award vested two years after the date of grant and the remaining one-third vesting three years after the date of grant. (2) Represents RSUs granted on October 10, 2022, with one-third of the award vested one year after the date of grant, one-third of the award vesting two years after the date of grant and the remaining one-third vesting three years after the date of grant. (3) In accordance with the SEC executive compensation reporting rules, represents the maximum level of PSUs granted on October 10, 2022, with 75% of the PSUs vesting based on the Company’s achievement of performance goals relating to Adjusted EBITDA (Comp) and ROICC and 25% of the PSUs vesting based on the Company’s TSR performance relative to the TSR peer group, in each case measured over the fiscal year 2023-2025 performance period. (4) Represents RSUs granted on April 10, 2023, with one-third of the award vesting one year after the date of grant, one-third of the award vesting two years after the date of grant and the remaining one-third vesting three years after the date of grant. (5) In accordance with the SEC executive compensation reporting rules, represents the maximum level of PSUs granted on April 10, 2023, with 75% of the PSUs vesting based on the Company’s achievement of performance goals relating to Adjusted EBITDA(Comp) and ROICC and 25% of the PSUs vesting based on the Company’s TSR performance relative to the TSR peer group, in each case measured over the fiscal year 2023-2025 performance period. (6) Represents RSUs granted on October 9, 2023, with one-third of the award vesting one year after the date of grant, one-third of the award vesting two years after the date of grant and the remaining one-third vesting three years after the date of grant. In accordance with the SEC executive compensation reporting rules, represents the maximum level of PSUs granted on October 9, 2023, with 75% of the PSUs vesting based on the Company’s achievement of performance goals relating to Adjusted EBITDA (Comp) and ROICC and 25% of the PSUs vesting based on the Company’s TSR performance relative to the TSR peer group, in each case measured over the fiscal year 2024-2026 performance period. Option/SARs Exercised and Stock Vested The following table provides information regarding stock vested during fiscal year 2024 for the NEOs. No options or SARs were issued or exercised by NEOs in fiscal year 2024.
Option/SARs Exercised and Stock Vested in Fiscal Year 2024
Option/SARs Exercised and Stock Vested in Fiscal Year 2024
Option/SARs Exercised and Stock Vested in Fiscal Year 2024
| | Options/SARs 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 ($)(1) | | Barbara R. Smith | — | $— | 260,921 | $13,352,865 | | Peter R. Matt | — | $— | 11,904 | $681,147 | | Paul J. Lawrence | — | $— | 47,187 | $2,372,515 | | Ty L. Garrison | — | $— | 45,479 | $2,298,091 | | Jody K. Absher | — | $— | 29,480 | $1,497,349 | | Jennifer J. Durbin | — | $— | 29,480 | $1,497,349 |
Option/SARs Exercised and Stock Vested in Fiscal Year 2024
(1) Included in these columns are the number of shares and the associated value realized with respect to the vesting of the RSUs and PSUs. Nonqualified Defined Contribution and Other Deferred Compensation Plans All of the NEOs have previously been designated by the Compensation Committee as being eligible to participate in the BRP. Participants can elect to defer W-2 earnings, including annual bonus awards, up to a maximum of 50% of such earnings. Deferrals are matched up to 4.5% of the participant’s BRP-eligible compensation, with the matching contributions vesting after two years of service. Annually, BRP participants must elect, prior to the fiscal year in which the compensation to be credited or deferred to the BRP is earned, the time at which they want distributions from the BRP. Amounts may be deferred for a minimum of one year. Distribution election options include commencement upon retirement either in a lump sum or installments or at a set future date either in lump sum or installments even if employment continues with us. In the event of death or disability, the participant or his or her estate will receive a lump sum payment. The payment of amounts deferred by NEOs after December 31, 2004 and that are to be paid after termination of employment, will be delayed for six months following termination of employment in order to comply with Section 409A of the Code. Amounts deferred into the BRP by the participant as well as contributions by us are credited with market earnings or losses based on the participant’s self-directed investment election and allocation among a group of mutual funds. The mutual funds available in the BRP have investment objectives similar, but not identical to, those funds available to all employees under our tax-qualified plan. There is no above-market or preferential interest rates credited on any compensation deferred in the BRP. Participants may change fund choices on a daily basis to the extent permitted by the funds. The following table and footnotes provide information regarding the non-qualified deferred compensation plan during fiscal year 2024 for the NEOs.
Fiscal Year 2024 Non-Qualified Deferred Compensation Table
Fiscal Year 2024 Non-Qualified Deferred Compensation Table
Fiscal Year 2024 Non-Qualified Deferred Compensation Table
| Name | Executive’s Contribution in Last FY ($) | Registrant’s Contributions in Last FY ($) | Aggregate Earnings (Losses) in Last FY | Aggregate Withdrawals/ Distributions | Aggregate Balance at Last FY | | Barbara R. Smith | $445,509 | $118,849 | $533,252 | $— | $5,297,141(1) | | Peter R. Matt | $99,348 | $48,869 | $22,412 | $— | $197,603(2) | | Paul J. Lawrence | $53,675 | $51,460 | $91,409 | $— | $743,737(3) | | Ty L. Garrison | $60,912 | $45,896 | $60,264 | $— | $687,050(4) | | Jody K. Absher | $33,999 | $34,975 | $64,368 | $— | $422,005(5) | | Jennifer J. Durbin | $86,016 | $35,939 | $92,163 | $— | $666,908(6) |
Fiscal Year 2024 Non-Qualified Deferred Compensation Table
(1) Approximately 60% of the aggregate balance at 2024 fiscal year end results from Ms. Smith’s voluntary deferrals of compensation to the BRP since participation began in 2013. (2) Approximately 58% of the aggregate balance at 2024 fiscal year end results from Mr. Matt’s voluntary deferrals of compensation to the BRP since participation began in 2023. (3) Approximately 42% of the aggregate balance at 2024 fiscal year end results from Mr. Lawrence’s voluntary deferrals of compensation to the BRP since participation began in 2016. (4) Approximately 42% of the aggregate balance at 2024 fiscal year end results from Mr. Garrison’s voluntary deferrals of compensation to the BRP since participation began in 2018. (5) Approximately 46% of the aggregate balance at 2024 fiscal year end results from Ms. Absher’s voluntary deferrals of compensation to the BRP since participation began in 2019. (6) Approximately 62% of the aggregate balance at 2024 fiscal year end results from Ms. Durbin’s voluntary deferrals of compensation to the BRP since participation began in 2020. Potential Payments and Benefits Upon Termination or Change in Control Under our executive compensation program, severance payments and the provision of benefits can be triggered upon termination of an NEO’s employment and following a Change in Control (as defined below). These payments may include payments resulting from the employment agreements and EECAs discussed below.
Employment Agreements
| Barbara R. Smith(1) Executive Benefits and Payments Upon Termination | Voluntary Resignation | Retirement | Involuntary Termination Without Cause or Good Reason Termination | For Cause Termination | CIC With No Termination | CIC Involuntary or Good Reason Termination | Permanent Disability | Death | | Termination Compensation: | | | | | | | | | | Base Salary | $— | $— | $— | $— | $— | $— | $— | $— | | Annual Cash Incentive Bonus | $— | $— | $— | $— | $— | $— | $— | $— | | Long-term Incentives Restricted Stock Unvested and Accelerated(2) | $— | $11,687,282 | $— | $— | $— | $— | $— | $— | | Stock Options / SARs Unvested and Accelerated(2) | $— | $— | $— | $— | $— | $— | $— | $— | | Benefits and Perquisites: | | | | | | | | | | BRP, 401(k) and Profit Sharing Contributions | $— | $— | $— | $— | $— | $— | $— | $— | | Welfare Continuation Benefit | $— | $— | $— | $— | $— | $— | $— | $— | | Life Insurance Proceeds | $— | $— | $— | $— | $— | $— | $— | $— | | Disability Benefits | $— | $— | $— | $— | $— | $— | $— | $— | | Accrued Vacation Pay | $— | $61,538 | $— | $— | $— | $— | $— | $— | | Total | $— | $11,748,820 | $— | $— | $— | $— | $— | $— |
Employment Agreements
| Peter R. Matt Executive Benefits and Payments Upon Termination | Voluntary Resignation | Retirement(7) | Involuntary Termination Without Cause or Good Reason Termination | For Cause Termination | CIC With No Termination | CIC Involuntary or Good Reason Termination | Permanent Disability | Death | | Termination Compensation: | | | | | | | | | | Base Salary(1) | $— | $— | $2,000,000 | $— | $— | $2,000,000 | $— | $— | | Annual Cash Incentive Bonus(1) | $— | $— | $— | $— | $— | $2,500,000 | $975,026 | $975,026 | | Long-term Incentives Restricted Stock/PSUs Unvested and Accelerated(2) | $— | $— | $— | $— | $— | $8,207,684 | $3,265,775 | $3,265,775 | | Stock Options / SARs Unvested and Accelerated(2) | $— | $— | $— | $— | $— | $— | $— | $— | | Benefits and Perquisites: | | | | | | | | | | BRP, 401(k) and Profit Sharing Contributions(3) | $— | $— | $— | $— | $— | $261,509 | $— | $— | | Welfare Continuation Benefit(4) | $— | $— | $— | $— | $— | $45,419 | $— | $— | | Life Insurance Proceeds | $— | $— | $— | $— | $— | $— | $— | $1,000,000 | | Disability Benefits(5) | $— | $— | $— | $— | $— | $— | $1,659,333 | $— | | Accrued Vacation Pay(6) | $76,923 | $76,923 | $76,923 | $76,923 | $— | $76,923 | $76,923 | $76,923 | | Total | $76,923 | $76,923 | $2,076,923 | $76,923 | $— | $13,091,535 | $5,977,057 | $5,317,724 |
Employment Agreements
| Paul J. Lawrence Executive Benefits and Payments Upon Termination | Voluntary Resignation | Retirement(7) | Involuntary Termination Without Cause or Good Reason Termination | For Cause Termination | CIC With No Termination | CIC Involuntary or Good Reason Termination | Permanent Disability | Death | | Termination Compensation: | | | | | | | | | | Base Salary(1) | $— | $— | $1,290,000 | $— | $— | $1,290,000 | $— | $— | | Annual Cash Incentive Bonus(1) | $— | $— | $— | $— | $— | $1,161,000 | $452,784 | $452,784 | | Long-term Incentives Restricted Stock/PSUs Unvested and Accelerated(2) | $— | $— | $— | $— | $— | $3,127,030 | $1,461,506 | $1,461,506 | | Stock Options / SARs Unvested and Accelerated(2) | $— | $— | $— | $— | $— | $— | $— | $— | | Benefits and Perquisites: | | | | | | | | | | BRP, 401(k) and Profit Sharing Contributions(3) | $— | $— | $— | $— | $— | $232,898 | $— | $— | | Welfare Continuation Benefit(4) | $— | $— | $— | $— | $— | $86,559 | $— | $— | | Life Insurance Proceeds | $— | $— | $— | $— | $— | $— | $— | $1,000,000 | | Disability Benefits(5) | $— | $— | $— | $— | $— | $— | $4,227,000 | $— | | Accrued Vacation Pay(6) | $49,615 | $49,615 | $49,615 | $49,615 | $— | $49,615 | $49,615 | $49,615 | | Total | $49,615 | $49,615 | $1,339,615 | $49,615 | $— | $5,947,102 | $6,190,905 | $2,963,905 |
Employment Agreements
| Ty L. Garrison Executive Benefits and Payments Upon Termination | Voluntary Resignation | Retirement | Involuntary Termination Without Cause or Good Reason Termination | For Cause Termination | CIC With No Termination | CIC Involuntary or Good Reason Termination | Permanent Disability | Death | | Termination Compensation: | | | | | | | | | | Base Salary(1) | $— | $— | $1,220,000 | $— | $— | $1,220,000 | $— | $— | | Annual Cash Incentive Bonus(1) | $— | $— | $— | $— | $— | $976,000 | $380,628 | $380,628 | | Long-term Incentives Restricted Stock Unvested and Accelerated(2) | $— | $3,015,402 | $— | $— | $— | $3,015,402 | $1,419,599 | $1,419,599 | | Stock Options / SARs Unvested and Accelerated(2) | $— | $— | $— | $— | $— | $— | $— | $— | | Benefits and Perquisites: | | | | | | | | | | BRP, 401(k) and Profit Sharing Contributions(3) | $— | $— | $— | $— | $— | $214,262 | $— | $— | | Welfare Continuation Benefit(4) | $— | $— | $— | $— | $— | $88,158 | $— | $— | | Life Insurance Proceeds | $— | $— | $— | $— | $— | $— | $— | $1,000,000 | | Disability Benefits(5) | $— | $— | $— | $— | $— | $— | $4,741,000 | $— | | Accrued Vacation Pay(6) | $46,923 | $46,923 | $46,923 | $46,923 | $— | $46,923 | $46,923 | $46,923 | | Total | $46,923 | $3,062,325 | $1,266,923 | $46,923 | $— | $5,560,745 | $6,588,150 | $2,847,150 |
Employment Agreements
| Jody K. Absher Executive Benefits and Payments Upon Termination | Voluntary Resignation | Retirement(7) | Involuntary Termination Without Cause or Good Reason Termination | For Cause Termination | CIC With No Termination | CIC Involuntary or Good Reason Termination | Permanent Disability | Death | | Termination Compensation: | | | | | | | | | | Base Salary(1) | $— | $— | $1,040,000 | $— | $— | $1,040,000 | $— | $— | | Annual Cash Incentive Bonus(1) | $— | $— | $— | $— | $— | $780,000 | $304,239 | $304,239 | | Long-term Incentives Restricted Stock/PSUs Unvested and Accelerated(2) | $— | $— | $— | $— | $— | $1,896,818 | $893,828 | $893,828 | | Stock Options / SARs Unvested and Accelerated(2) | $— | $— | $— | $— | $— | $— | $— | $— | | Benefits and Perquisites: | | | | | | | | | | BRP, 401(k) and Profit Sharing Contributions(3) | $— | $— | $— | $— | $— | $158,580 | $— | $— | | Welfare Continuation Benefit(4) | $— | $— | $— | $— | $— | $50,153 | $— | $— | | Life Insurance Proceeds | $— | $— | $— | $— | $— | $— | $— | $1,000,000 | | Disability Benefits(5) | $— | $— | $— | $— | $— | $— | $6,930,000 | $— | | Accrued Vacation Pay(6) | $40,000 | $40,000 | $40,000 | $40,000 | $— | $40,000 | $40,000 | $40,000 | | Total | $40,000 | $40,000 | $1,080,000 | $40,000 | $— | $3,965,551 | $8,168,067 | $2,238,067 |
Employment Agreements
| Jennifer J. Durbin Executive Benefits and Payments Upon Termination | Voluntary Resignation | Retirement(7) | Involuntary Termination Without Cause or Good Reason Termination | For Cause Termination | CIC With No Termination | CIC Involuntary or Good Reason Termination | Permanent Disability | Death | | Termination Compensation: | | | | | | | | | | Base Salary(1) | $— | $— | $1,040,000 | $— | $— | $1,040,000 | $— | $— | | Annual Cash Incentive Bonus(1) | $— | $— | $— | $— | $— | $780,000 | $304,239 | $304,239 | | Long-term Incentives Restricted Stock/PSUs Unvested and Accelerated(2) | $— | $— | $— | $— | $— | $1,896,818 | $893,828 | $893,828 | | Stock Options / SARs Unvested and Accelerated(2) | $— | $— | $— | $— | $— | $— | $— | $— | | Benefits and Perquisites: | | | | | | | | | | BRP, 401(k) and Profit Sharing Contributions(3) | $— | $— | $— | $— | $— | $171,204 | $— | $— | | Welfare Continuation Benefit(4) | $— | $— | $— | $— | $— | $85,729 | $— | $— | | Life Insurance Proceeds | $— | $— | $— | $— | $— | $— | $— | $1,000,000 | | Disability Benefits(5) | $— | $— | $— | $— | $— | $— | $8,234,000 | $— | | Accrued Vacation Pay(6) | $40,000 | $40,000 | $40,000 | $40,000 | $— | $40,000 | $40,000 | $40,000 | | Total | $40,000 | $40,000 | $1,080,000 | $40,000 | $— | $4,013,751 | $9,472,067 | $2,238,067 |
Employment Agreements
| Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2) | All Other Compensation ($) | Total ($) | | Dennis Arriola(3) | $66,833 | $108,912 | $— | $175,745 | | Vicki L. Avril-Groves(4) | $132,500 | $139,992 | $— | $272,492 | | Lisa M. Barton | $137,500 | $139,992 | $— | $277,492 | | Gary E. McCullough | $137,500 | $139,992 | $— | $277,492 | | John R. McPherson | $122,500 | $139,992 | $— | $262,492 | | Sarah E. Raiss | $157,500 | $139,992 | $— | $297,492 | | Charles L. Szews | $147,500 | $139,992 | $— | $287,492 | | Robert S. Wetherbee | $132,500 | $139,992 | $— | $272,492 |
Non-Employee Director Compensation
Non-Employee Director Compensation As of August 31, 2024, each individual who served as a non-employee director during fiscal year 2024 had outstanding the following number of deferred RSUs, RSAs or RSUs:
Non-Employee Director Compensation
| Director | Deferred Restricted Stock Units | Restricted Stock/ Restricted Stock Units | | Dennis Arriola | 2,021 | — | | Vicki L. Avril-Groves(1) | 27,792 | 2,835 | | Lisa M. Barton | — | 2,835 | | Gary E. McCullough | — | 2,835 | | John R. McPherson | 8,238 | 2,835 | | Tandra C. Perkins(2) | — | — | | Sarah E. Raiss | 16,131 | 2,835 | | Charles L. Szews | — | 2,835 | | Robert S. Wetherbee | — | 2,835 |
Non-Employee Director Compensation
(1) In connection with Ms. Avril-Groves’s retirement from the Board, her deferred RSUs were distributed on September 3, 2024. (2) Ms. Perkins was appointed to the Board on September 1, 2024. Director Retainers and Fees Our non-employee directors receive annual retainer fees for Board and committee service. None of our employees receive additional compensation for serving as a director. In addition, if the Board or any committee holds more than 10 meetings in a calendar year, members of the Board and such committee are entitled to receive Board and committee meeting fees of $2,000 per additional meeting attended. Compensation for Board and committee service is summarized below:
Non-Employee Director Compensation
| | Retainer ($) | | Annual Director Retainer (the “Annual Director Retainer”) | $275,000(1) | | Chairman of the Board | $150,000(2) | | Lead Director | $35,000 | | Audit Committee Chair | $25,000 | | Compensation Committee Chair | $20,000 | | Finance Committee Chair | $15,000 | | Nominating and Corporate Governance Committee Chair | $15,000 |
Non-Employee Director Compensation
(1) In fiscal year 2024, directors received $140,000 of the Annual Director Retainer in equity and $120,000 in cash. Effective March 19, 2024, the Annual Director Retainer was increased to $275,000 of which $125,000 is in cash starting with the June 2024 cash payment and $150,000 equity portion will be implemented with the annual January 2025 equity award. The equity portion of the Annual Director Retainer was fully issued in deferred RSUs, RSAs or RSUs in the 2024 calendar year. Additionally, any director may elect to be paid the cash portion of the Annual Director Retainer or committee retainer(s) in Company common stock. CMC maintains a Non-Employee Director Deferred Compensation Program under which non-employee directors may defer all or a portion of their compensation until their separation from our Board. (2) In fiscal year 2024, our Board approved the payment of an annual retainer to the independent Chairman of the Board in the amount of $150,000 payable in cash, effective as of September 1, 2024. Director Stock Ownership Guidelines Under CMC’s stock ownership guidelines, non-employee directors are required to own Company common stock equal in value to five times such person’s annual cash retainer, and each non-employee director has five years from joining the Board to achieve this threshold. Compensation Committee Interlocks and Insider Participation The members of the Compensation Committee during fiscal year 2024 were Mses. Avril-Groves (Chair until March 19, 2024) and Barton and Messrs. McCullough and Wetherbee (Chair since March 19, 2024). No member of the Compensation Committee was at any time during fiscal year 2024, or at any other time, an officer or employee of the Company. None of our executive officers serve as a member of the board of directors or compensation committee of any entity that has one or more of its executive officers serving either as a member of our Compensation Committee or as a member of our Board. There were no relationships requiring disclosure under Item 404 of Regulation S-K or Item 407(e)(4) of Regulation S-K that involved any member of the Compensation Committee during fiscal year 2024. Certain Relationships and Related Person Transactions Donnie Garrison, brother of our Senior Vice President, Operational and Commercial Excellence, Ty L. Garrison, is employed by us as Lead—Mills Process in our Information Technology department. In this capacity, he was paid cash compensation, including base salary and annual bonus, of $140,658 for his services during fiscal year 2024, which is in line with CMC’s normal pay policies and practices. He received total taxable compensation of $144,694, including life insurance premiums. Ty L. Garrison does not directly or indirectly determine the compensation or job position of Donnie Garrison. Since 1978, we have had a Code of Conduct that applies to all directors, officers and employees (collectively, “Covered Persons”). The Code of Conduct, as amended, is available on our website, www.cmc.com, by clicking on “Investors,” then “Governance and Board of Directors.” The Code of Conduct prohibits a Covered Person from engaging in transactions in which he or she may have a conflict of interest without first disclosing the potential conflict of interest to his or her supervisor and seeking prior approval. Additionally, we have adopted a written policy regarding review and approval of related party transactions by the Audit Committee (the “Related Person Transactions Policy”). CMC’s Related Person Transactions Policy defines a “Related Person Transaction” as any transaction involving an amount in excess of $120,000 in which the Company is a participant and in which a Related Person (as defined below) has or will have a direct or indirect material interest, including, without limitation, any financial transaction, arrangement or relationship (including any indebtedness or guarantee of indebtedness) or any series of similar transactions, arrangements or relationships. The Related Person Transactions Policy also contains categories of certain transactions that our Board has identified as not constituting Related Person Transactions, because such transactions are not deemed to create a direct or indirect material interest for the Related Person. A “Related Person” is (i) an executive officer or director of the Company or a nominee for director of the Company, (ii) a beneficial owner of more than 5% of any class of voting securities of the Company or (iii) an immediate family member of any of the persons identified in clauses (i) or (ii). Immediate family members include a person’s child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law of such person, and any individual (other than a tenant or employee) sharing the household of such person. Under the Related Person Transactions Policy, each Related Person Transaction must be approved or ratified in accordance with the guidelines set forth in the policy (i) by the Audit Committee or (ii) if the Audit Committee determines that the approval or ratification of such Related Person Transaction should be considered by all of the disinterested members of our Board, by such disinterested members of our Board by the vote of a majority thereof. In considering whether to approve or ratify any Related Person Transaction, the Audit Committee or the disinterested members of our Board, as the case may be, shall consider all factors that in their discretion are relevant to the Related Person Transaction. No director participates in any discussion or approval of a Related Person Transaction for which he or she is a Related Person, except that the director is required to provide all material information concerning the Related Person Transaction to the Audit Committee or disinterested directors reviewing such transaction. Except as described herein, there were no transactions considered to be a Related Person Transaction since the beginning of CMC’s 2024 fiscal year through the date of this proxy statement. Audit Committee Report The following report shall not be deemed to be “soliciting material” or to be “filed with the SEC” or subject to the liabilities of Section 18 of the Exchange Act nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference in such filing. Our Board annually selects the members of the Audit Committee. During fiscal year 2024, the members of the Audit Committee were Messrs. Szews (Chair), Arriola (since his appointment to the Board on March 19, 2024) and McPherson, and Ms. Raiss. Our Board has determined that each member of the Audit Committee is qualified to serve. Our Board has determined that each member of the Audit Committee satisfies all applicable financial literacy requirements, and each member is independent as required by the Sarbanes-Oxley Act of 2002, Rule 10A-3 of the Exchange Act and the listing standards of the NYSE. Our Board has determined that Messrs. Arriola, McPherson and Szews meet the definition of “audit committee financial expert” as defined by the SEC. During fiscal year 2024, the Audit Committee met seven times. Roles and Responsibilities The Audit Committee’s responsibilities are outlined in a charter approved by our Board, a current copy of which can be found on our website at www.cmc.com by clicking on “Investors,” then “Governance and Board of Directors.” On an annual basis, the Audit Committee conducts a self-assessment review and also reviews and assesses the adequacy of its charter.
Non-Employee Director Compensation
The role of the Audit Committee is to assist the Board in fulfilling its oversight responsibilities related to the integrity of the Company’s financial statements and disclosures, the Company’s compliance with legal and regulatory requirements, the Company’s procedures for monitoring compliance with the Company’s Code of Conduct and Business Ethics, the Company’s policies and procedures to address cybersecurity risks, the qualifications, independence and performance of the Company’s independent registered public accounting firm, the performance of the Company’s internal audit function and the Company’s internal control systems. The Audit Committee, among other activities described in its charter, has sole authority for the appointment (subject to stockholder ratification), compensation, retention, oversight, termination and replacement of the independent registered public accounting firm, recommends to our Board whether the audited financial statements should be included in our Annual Report on Form 10-K, reviews quarterly financial statements and earnings press releases with management and the independent registered public accounting firm, reviews with our internal audit staff and independent registered public accounting firm our controls and procedures and is responsible for approving all audit and engagement fees of the independent registered public accounting firm. The Audit Committee also participates in the selection and evaluation of the Company’s lead audit partner. The Audit Committee regularly meets independently as a committee and separately from management with the internal audit staff, the independent registered public accounting firm, as well as the Chief Financial Officer, the Chief Legal Officer, and the Chief Accounting Officer. Management of the Company has the responsibility for the preparation, presentation and integrity of the Company’s financial statements, for the appropriateness of the accounting principles and reporting policies that are used by the Company and for the establishment and maintenance of systems of disclosure controls and procedures and internal control over financial reporting. The Company’s independent registered public accounting firm, Deloitte & Touche LLP, is responsible for auditing the Company’s financial statements and expressing an opinion on the fair presentation of those financial statements in conformity with accounting principles generally accepted in the United States, performing reviews of the unaudited quarterly financial statements and auditing and expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. In performing its functions, the Audit Committee acts only in an oversight capacity and necessarily relies on the work and assurances of the Company’s management, internal audit group and independent registered public accounting firm.