DEF 14A of IES Holdings, Inc.
Filed Jan 7, 2025 · FY20240001048268-25-000015
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS
GENERAL INFORMATION
GENERAL INFORMATION The Company’s Second Amended and Restated Certificate of Incorporation, as amended through May 24, 2016 (the “Certificate of Incorporation”), and Amended and Restated Bylaws, effective April 28, 2021 (the “Bylaws”), provide that the number of members of the Board shall be fixed from time to time by the Board but shall not be less than one nor more than fifteen persons. The Board has set the number of directors at six. As such, if each of the nominees named below is elected to the Board, there will be no vacancies on the Board following the Annual Meeting. Directors hold office until the next annual meeting of stockholders and until their successors have been elected and qualified. Vacancies may be filled by recommendation from the Nominating/Governance Committee and a majority vote by the remaining directors. It is the intention of the persons named in the proxy card to vote “FOR” the election of the nominees named below, unless a stockholder has directed otherwise or withheld such authority. The affirmative vote of holders of a plurality of the shares of Common Stock present in person or represented by proxy at the Annual Meeting and entitled to vote is required to elect each director nominee. Each of the nominees has consented to being named in this proxy statement and has consented to serve, if elected. If, at the time of or prior to the Annual Meeting, a nominee should be unable or decline to serve, the discretionary authority provided in the proxy may be used to vote for a substitute nominee designated by the Board. The Board has no reason to believe that any substitute nominee will be required. No proxy will be voted for a greater number of persons than the nominees named herein. The Company’s Corporate Governance Guidelines require that a majority of the Board meet the independence standards imposed by the applicable rules and regulations of the Nasdaq Global Market (“Nasdaq”) and the SEC. In addition, the Company’s Audit Committee charter requires that members of the Audit Committee meet the heightened independence standard set forth in Rule 10A-3 of the Exchange Act. After reviewing all relevant facts and circumstances, the Board has affirmatively determined that Mr. Cleveland, Mr. Fouts, Mr. Koshkin and Ms. Baldock are independent in accordance with the Corporate Governance Guidelines and the Audit Committee charter. Additionally, the Board has determined that neither Mr. Jeffrey Gendell nor Mr. David Gendell meets the independence standards set forth in either the Company’s Corporate Governance Guidelines or the heightened Audit Committee standard. Mr. Jeffrey Gendell is Chief Executive Officer of the Company in addition to being the founder and managing member of Tontine Associates, L.L.C., a private investment management firm, which, together with its affiliates, (collectively, “Tontine”) is the Company’s majority stockholder. Mr. Jeffrey Gendell is also the brother of Mr. David Gendell, who is a director of the Company. The review was undertaken on a director-by-director basis and did not involve a pre-set formula or minimum standard of materiality. Copies of the Company’s Corporate Governance Guidelines and Audit Committee charter may be found on the Governance page of the Investors section of the Company’s website at www.ies-co.com. All of the Company’s current directors are standing for re-election at the Annual Meeting. THE BOARD RECOMMENDS THAT THE STOCKHOLDERS VOTE “FOR” THE ELECTION OF THE NOMINEES LISTED BELOW, AND PROXIES EXECUTED AND RETURNED WILL BE SO VOTED UNLESS CONTRARY INSTRUCTIONS ARE INDICATED THEREON.
GENERAL INFORMATION
| Jennifer A. Baldock* | Director since 2021 |
GENERAL INFORMATION
Ms. Baldock, 65, has been a member of the Board of Managers of CCF Holdings, LLC and its predecessors since April 2013, where she is the chair of the Compensation Committee and a member of the Compliance Committee and the Nominating and Governance Committee. Ms. Baldock previously served as a director of Hometeam Technologies, Inc. from December 2016 to January 2020, as a director of Acculynk, Inc. from February 2016 to May 2017 and as a director of Asset Acceptance Capital Corp. from March 2004 to June 2013. From 1991 to 1999, Ms. Baldock held various senior leadership positions at World Color Press, Inc., most recently as Vice Chairman, Chief Legal and Administrative Officer and Secretary. Before joining World Color Press, Ms. Baldock was an associate at Latham & Watkins in New York. The Nominating/Governance Committee believes, and the Board agrees, that Ms. Baldock is qualified to serve on the Board given her experience as a director of public companies, her familiarity with reviewing financial statements including on audit committees, and her experience as an executive.
GENERAL INFORMATION
| Todd M. Cleveland* | Director since 2017 |
GENERAL INFORMATION
Mr. Cleveland, 56, has served as a member of the Board of Patrick Industries, Inc. ("Patrick"), a publicly traded manufacturer of specialized building products and materials, since January 2008. He served as Chairman of the Board from January 2023 to May 2024, as Executive Chairman of the Board from January 2020 to December 2022, and prior to that as Chairman of the Board from May 2018 to December 2019. Mr. Cleveland was Chief Executive Officer of Patrick from February 2009 to December 2019 and was President of Patrick from May 2008 to December 2015. From May 2008 to March 2013, Mr. Cleveland served as Chief Operating Officer of Patrick; from August 2007 to May 2008, he served as its Executive Vice President of Operations and Sales and Chief Operating Officer. Mr. Cleveland also spent 17 years with Adorn Holdings, Inc., serving as President and Chief Executive Officer from 2004 to 2007; President and Chief Operating Officer from 1998 to 2004; and Vice President of Operations and Chief Operating Officer from 1994 to 1998. Mr. Cleveland has over 25 years of recreational vehicle, manufactured housing and industrial experience in various operating capacities. The Nominating/Governance Committee believes, and the Board agrees, that Mr. Cleveland is qualified to serve on the Board given his extensive operating, executive and board level experience at a publicly traded industrial company, as well as his experience completing numerous mergers and acquisitions transactions.
GENERAL INFORMATION
| John L. Fouts* | Director since 2024 |
GENERAL INFORMATION
Mr. Fouts, 57, has served as the managing member at Fouts Family Investments, a private investment holding company, since 2021. He has also served as a Trustee of the Georgia Tech Foundation since 2014 and as the Chairman of its Investments Committee since July 2024. From 2002 to 2021, he was a partner with Water Street Capital, a private investment firm located in Jacksonville, Florida. From 2000 to 2001, he served as the CEO of e‐dr.com, an optometry and ophthalmology distribution company, and from 1998 to 2000, he was an associate with the investment firm Caxton Corporation. Prior to joining Caxton, Mr. Fouts was a consultant at Boston Consulting Group. The Nominating/Governance Committee believes, and the Board agrees, that Mr. Fouts is qualified to serve on the Board given his extensive experience in public markets and private investing.
GENERAL INFORMATION
| David B. Gendell | Director since 2012 |
GENERAL INFORMATION
Mr. Gendell, 64, served as Interim Director of Operations for the Company from November 2017 to January 2019. He previously served as Vice Chairman of the Board from November 2016 to November 2017 and as Chairman of the Board from January 2015 to November 2016. From 2004 to January 2018, he was an employee of Tontine Associates, L.L.C., which, together with its affiliates, is the majority stockholder of the Company. At Tontine Associates L.L.C., he focused on investment opportunities in industrial, manufacturing and basic materials companies. From 2006 to 2010, he served on the Board of Directors of Neenah Enterprises, one of the largest independent foundries in the United States. Mr. Gendell has also held senior positions at several venture-backed startups. From 1999 to 2002, he was President and Chief Operating Officer of Homserv, LLC, a privately-held data aggregator focused on real estate transactions, and from 2002 to 2003, he served as President and Chief Operating Officer of Cogent Design Inc., a privately-held practice management software system. He also currently serves as the Chairman Emeritus of the Board of Advisors of the Duke Global Health Institute. Mr. Gendell is the brother of Jeffrey Gendell, who is Chief Executive Officer of the Company and has served as a director of the Company and as Chairman of the Board since November 2016 and is the founder and managing member of Tontine. The Nominating/Governance Committee believes, and the Board agrees, that Mr. David Gendell is qualified to serve on the Board given his extensive experience in public and private investing and finance.
GENERAL INFORMATION
| Jeffrey L. Gendell | Director since 2016 |
GENERAL INFORMATION
Mr. Gendell, 65, has served as the Chief Executive Officer of the Company since October 1, 2020; he previously served as Interim Chief Executive Officer from July 31, 2020 to September 30, 2020. Mr. Gendell has also served as a director and as Chairman of the Board since November 2016. Mr. Gendell is the founder and managing member of Tontine, the majority stockholder of the Company. Mr. Gendell formed Tontine in 1995, and manages all of the investment decisions at the firm. Prior to forming Tontine, Mr. Gendell held senior investment management positions at several other private investment firms, including Odyssey Partners, L.P., and began his career in investment banking over 40 years ago at Smith Barney, Harris Upham & Co., where he was involved in capital markets, corporate finance and M&A activity. Mr. Jeffrey Gendell is the brother of Mr. David Gendell, who has served as a director of the Company since February 2012, as Interim Director of Operations from November 2017 to January 2019, as Vice Chairman of the Board from November 2016 to November 2017 and as Chairman of the Board from January 2015 to November 2016. The Nominating/Governance Committee believes, and the Board agrees, that Mr. Jeffrey Gendell is qualified to serve on the Board given his extensive experience in public and private investing and finance and his historical knowledge of the Company as majority stockholder as well as his perspective as Chief Executive Officer of the Company.
GENERAL INFORMATION
| Joe D. Koshkin* | Director since 2013 |
GENERAL INFORMATION
Mr. Koshkin, 77, has worked as an independent financial consultant offering financial and advisory services to a diverse group of clients since 2006. Mr. Koshkin retired as a partner from PricewaterhouseCoopers LLP in 2006 after a 34-year career with the firm. During his career at PricewaterhouseCoopers, he served as the partner in charge of the firm’s North America Engineering and Construction Industry practice. He also served as a senior client service partner and a consulting partner advising clients and firm partners on technical accounting, SEC issues, Sarbanes-Oxley compliance, risk management, and mergers and acquisitions. From June 2010 to July 2011, Mr. Koshkin served as a director and a member of the audit committee of Sterling Bancshares. Mr. Koshkin is a Certified Public Accountant in Texas and is a member in good standing with the American Institute of Certified Public Accountants and Texas Society of Certified Public Accountants. The Nominating/Governance Committee believes, and the Board agrees, that Mr. Koshkin’s extensive experience with PricewaterhouseCoopers as a senior client service partner and his background in corporate finance and financial reporting make him qualified to serve on the Board. * Each nominee with an asterisk next to his or her name is independent in accordance with the Company’s Corporate Governance Guidelines.
Compensation Objectives
Compensation Objectives The Company’s compensation and benefits program for the NEOs, as described below, is focused on attracting, retaining and motivating the individuals who will engage in the behaviors necessary to enable the Company to succeed by aligning the financial interests of our executives with the near-term critical goals of the Company and the long-term interests of the Company and our stockholders. Beginning with the Company’s 2011 annual meeting of stockholders, the Company has, in accordance with Section 14A of the Exchange Act, sought an advisory vote of stockholders to approve on an advisory basis the compensation of the Company’s NEOs, as disclosed in the Company’s proxy statement for each annual meeting at which such a vote was required. At each such annual meeting, including the 2024 annual meeting of stockholders, the Company’s stockholders approved, on a non-binding advisory basis, the compensation awarded to the Company’s NEOs for the prior fiscal year. The Committee has considered the result of these stockholder votes in setting compensation policies and making compensation decisions for each of the fiscal years that has followed. At the 2023 annual meeting of stockholders, the Company’s stockholders determined, on a non-binding advisory basis, that the stockholder vote on executive compensation should be held once every year. In accordance with this determination, the Company has included in this proxy statement a proposal to approve, on an advisory basis, the compensation awarded to the Company’s NEOs, as disclosed in this Proxy Statement. For additional information, please see “Advisory Vote on Executive Compensation” below. The Company’s compensation program, which is comprised of salary, benefits, and short- and long-term incentive opportunities, is intended to achieve the following objectives: •Be fair. The program design and levels are intended to fairly reward executives for their level of responsibility and experience as well as individual performance. •Link executive pay to Company performance. The program offers variable, at-risk incentive award opportunities, which are payable only if specified short-term financial and strategic goals are achieved, and for certain awards, a portion of the opportunity is payable based on individual performance. The awards may be made in cash, equity or a combination thereof. •Retain talent. The program’s design takes into account the Company’s need to attract, motivate and retain highly qualified executive talent, and gives certain consideration to the practices of similar companies representative of those with which the Company competes for talent. •Reward long-term growth in the Company’s earnings and market value. The Company offers, from time to time, performance-based equity and cash grants, which have time-based vesting requirements and may also have certain Company financial performance or stock price performance vesting requirements over a specified period. •Emphasize stock ownership. As part of our compensation program, the Committee awards equity grants, such as Company performance-based and time-based phantom stock units, to encourage alignment with the perspective of the Company’s long-term stockholders.
Market Benchmarking
Market Benchmarking The Committee does not target a specific competitive position versus the market or peer companies in determining the compensation of its executives, but the Committee does give certain consideration to the compensation practices of companies representative of those with which the Company competes for talent. In 2023, the Committee engaged Mercer US, Inc. (the “Compensation Consultant”) as its independent consultant with respect to fiscal 2024 compensation decisions, including providing a competitive assessment of the total direct compensation for our NEOs relative to the peer group previously established by the Compensation Consultant. In 2024, the Committee once again engaged the Compensation Consultant as its independent consultant with respect to fiscal 2025 compensation decisions, including assisting the Committee in reviewing and adjusting the previous peer group for compensation purposes, and providing a competitive assessment of the total direct compensation for our NEOs and other key employees relative to that adjusted peer group. The Committee believes the following factors are relevant to establishing a fair compensation structure that promotes retention, and the Committee considers these factors in establishing an individual executive’s base salary, short-term incentive awards and long-term incentive awards: •The Company’s performance against predetermined financial measures. •Individual performance versus personal performance goals. •Business climate, economic conditions and other factors. •Competitiveness of our compensation structure and elements relative to companies representative of those with which the Company competes for talent. The CEO develops pay recommendations for Company NEOs (other than himself) based on each NEO’s responsibilities, market data, the Company’s performance relative to financial performance goals approved by the Committee and individual performance versus personal performance goals. The Committee reviews and approves all compensation elements for the NEOs and sets the compensation of the CEO. The Committee generally reviews tally sheets for the NEOs, modeling elements of compensation (base salary, annual cash incentive awards, equity incentives, benefits and perquisites), which are utilized as the targeted overall compensation level.
Short-Term Incentive Awards
Short-Term Incentive Awards Fiscal Year 2024 Short-Term Incentive Plan On February 28, 2019, the Board adopted the Company’s Short-Term Incentive Plan (the “STIP”). The STIP provides for an annual award to participants made in cash, equity or a combination thereof, and is based, in part, on Company performance relative to predetermined financial performance objectives and, in part, on individual performance relative to predetermined individual performance objectives, with each component vesting at predetermined payout percentages based on actual performance relative to the threshold, target and maximum performance standards for each component. If actual performance falls below threshold performance, then 0% of such component of the award shall vest. On November 30, 2023, the Committee made awards under the STIP for fiscal year 2024 (the “2024 STIP”) that pay out in cash. The Committee granted Mr. Gendell, Mr. Simmes, Ms. McLauchlin and Ms. Newman target 2024 STIP awards of $884,000 (100% of base salary), $750,000 (100% of base salary), $332,500 (70% of base salary) and $240,000 (60% of base salary), respectively. The performance conditions for Mr. Gendell’s and Mr. Simmes’s 2024 STIP awards had two parts: (1) 66.67% of the target award was based on achievement of the Company financial performance goal outlined below for fiscal year 2024 and (2) 33.33% of the target award was based on the achievement of personal performance goals for fiscal year 2024, with maximum, target and threshold level payouts as detailed in the following table. The performance conditions for Ms. McLauchlin’s and Ms. Newman’s 2024 STIP awards also had two parts: (1) 50% of the target award was based on achievement of the Company financial performance goal outlined below for fiscal year 2024 and (2) 50% of the target award was based on the achievement of personal performance goals for fiscal year 2024, with maximum, target and threshold level payouts as detailed in the following table.
Short-Term Incentive Awards
| | 2024 Short-Term Incentive Plan Award | | | | | | | | | | Company Performance Portion of Award (66.67%) | | | | Personal Performance Portion of Award (33.33%) | | | | | | Performance Level | Performance Achieved * | Payout % | Cash Payout** | Performance Level | Performance Achieved *** | Payout % | Cash Payout** | | Mr. Gendell: | Threshold | 62.5% | 25% | $147,341 | Threshold | 2.5 | 25% | $73,659 | | | Target (total is 100% Salary) | 100% | 100% | $589,363 | Target (total is 100% Salary) | 3.5 | 100% | $294,637 | | | Maximum | 120% | 150% | $884,044 | Maximum | 5 | 200% | $589,274 | | Mr. Simmes: | Threshold | 62.5% | 25% | $125,006 | Threshold | 2.5 | 25% | $62,494 | | | Target (total is 100% Salary) | 100% | 100% | $500,025 | Target (total is 100% Salary) | 3.5 | 100% | $249,975 | | | Maximum | 120% | 150% | $750,038 | Maximum | 5 | 200% | $499,950 | | | Company Performance Portion of Award (50%) | | | | Personal Performance Portion of Award (50%) | | | | | | Performance Level | Performance Achieved * | Payout % | Cash Payout** | Performance Level | Performance Achieved *** | Payout % | Cash Payout** | | Ms. McLauchlin: | Threshold | 62.5 | 25% | $41,563 | Threshold | 2.5 | 25% | $41,563 | | | Target (total is 70% Salary) | 100% | 100% | $166,250 | Target (total is 70% Salary) | 3.5 | 100% | $166,250 | | | Maximum | 120% | 150% | $249,375 | Maximum | 5 | 200% | $332,500 | | Ms. Newman: | Threshold | 62.5% | 25% | $30,000 | Threshold | 2.5 | 25% | $30,000 | | | Target (total is 60% Salary) | 100% | 100% | $120,000 | Target (total is 60% Salary) | 3.5 | 100% | $120,000 | | | Maximum | 120% | 150% | $180,000 | Maximum | 5 | 200% | $240,000 |
Short-Term Incentive Awards
| * Performance achieved is measured as percentage of target financial performance. | | ** Cash payout determined using linear interpolation for achievement of Company financial performance and personal performance between Threshold, Target and Maximum levels. | | *** Personal performance is evaluated on a five point scale with “1” being the lowest and “5” being the highest. |
Short-Term Incentive Awards
Fiscal Year 2024 STIP Award Goals and Objectives On November 30, 2023, the CEO recommended, and the Committee approved, the following goals and objectives to be used by the Committee when determining each participating NEO’s 2024 STIP award. Company Financial Goal: Reflecting a primary focus on the Company’s profitability, the financial performance measure was based on fiscal year 2024 income from continuing operations before income taxes, stock compensation expense and restructuring charges, less gains or losses on the disposition of a business, adjusted, in the sole discretion of the Committee, to reflect extraordinary items during the fiscal year (“Adjusted Pretax Income”). Personal Performance Goals: The following business/personal goals and objectives were established for the NEOs who participated in the 2024 STIP: Mr. Gendell Personal performance goals were established for Mr. Gendell focused on leadership and achievement in the areas of meeting operational and financial goals for fiscal year 2024, succession planning, and establishing strategic plans including with respect to capital allocation. Mr. Simmes Personal performance goals were established for Mr. Simmes focused on leadership and achievement in the areas of improving processes and project execution, meeting fiscal year 2024 financial goals, improving the Company’s information technology capabilities including by implementing new enterprise resource planning (“ERP”) software, and succession planning. Ms. McLauchlin Personal performance goals were established for Ms. McLauchlin focused on achievement in the areas of financial controls and processes, treasury initiatives, centralization of the information technology function, and financial and tax planning. Ms. Newman Personal performance goals were established for Ms. Newman focused on achievement in the areas of legal and transactional matters, corporate compensation and other processes, corporate insurance and benefits programs, and ongoing securities disclosure compliance. Fiscal Year 2024 STIP Award Payout On November 21, 2024, based on a review of fiscal year 2024 financial results, the Committee assessed the Company’s performance and determined that the Company recorded Adjusted Pretax Income above the Company’s target, achieving 163.9% of the target fiscal year 2024 income from continuing operations before income taxes, as described in the table below.
Short-Term Incentive Awards
| | Target | Actual | Percentage of Target Achieved | | Adjusted Pretax Income | $180,087,000 | $292,979,000 | 163.9% |
Short-Term Incentive Awards
Since the Company’s financial performance exceeded 120% of target, the maximum Company performance level under the 2024 STIP was achieved. The Committee therefore awarded each of Mr. Gendell, Mr. Simmes, Ms. McLauchlin and Ms. Newman 150% of the Company financial goals component of their target awards under the 2024 STIP, which component represented 66.67%, 66.67%, 50% and 50%, respectively, of their overall target awards. The Committee assessed the performance of Mr. Gendell against his personal performance goals outlined above, which represented 33.33% of his target award, and determined to award him 171.7% of the personal performance component of his target award under the 2024 STIP. The Committee, in consultation with the CEO, then assessed the performance of Mr. Simmes, Ms. McLauchlin and Ms. Newman against their personal performance goals outlined above, which represented 33.33%, 50% and 50%, respectively, of their target awards, and determined to award them 185.7%, 150.8% and 154.8%, respectively, of the personal performance component of their target awards under the 2024 STIP. The performance reviews of Mr. Gendell, Mr. Simmes, Ms. McLauchlin and Ms. Newman were based upon the attainment of individual goals and objectives established as discussed above. The Committee had the sole discretion to increase, decrease or eliminate the amounts otherwise payable to each executive based upon individual performance or any other factors the Committee deemed appropriate. The Committee believes each executive’s award reflects their leadership in their respective areas of management and strong personal performance. As a result, the Committee awarded annual cash incentive awards under the 2024 STIP to Mr. Gendell of $1,389,936 (representing 94% of his maximum eligible award), Mr. Simmes of $1,214,241 (representing 97% of his maximum eligible award) Ms. McLauchlin of $500,080 (representing 86% of her maximum eligible award) and Ms. Newman of $365,760 (representing 87% of her maximum eligible award). Fiscal Year 2025 Short-Term Incentive Plan On November 21, 2024, the Committee made awards under the STIP for fiscal year 2025 (the “2025 STIP”). The Committee granted Mr. Gendell, Mr. Simmes, Ms. McLauchlin and Ms. Newman target 2025 STIP awards of $925,000 (100% of base salary), $750,000 (100% of base salary), $385,000 (70% of base salary) and $300,000 (60% of base salary), respectively. The target 2025 STIP awards for Mr. Gendell, Ms. McLauchlin and Ms. Newman increased compared to the 2024 STIP due to their respective increased salary rates, but remained the same as percentage of salary. The structure of the 2025 STIP is identical to the structure of the 2024 STIP, including the percentage of target determined by Company performance and personal performance and the payout matrix for maximum, target and threshold performance. Fiscal Year 2025 Supplementary Short-Term Incentive Plan On November 21, 2024, in consideration of Mr. Simmes’ level of responsibility at the Company as well as his role in driving the Company’s performance in fiscal year 2024, the Committee determined to adopt the Fiscal Year 2025 Supplementary Short-Term Incentive Plan (the “2025 SSTIP”). Under the 2025 SSTIP, Mr. Simmes is eligible for a cash bonus opportunity based on the Company’s Adjusted Pretax Income for fiscal year 2025. Mr. Simmes will receive a cash bonus equal to 1.0% of the amount, if any, by which the Company’s Adjusted Pretax Income for fiscal year 2025 exceeds 62.5% of the Company’s target Adjusted Pretax Income for fiscal year 2025, and he will receive an additional cash bonus equal to 1.5% of the amount, if any, by which the Company’s Adjusted Pretax Income for fiscal year 2025 exceeds 100.0% of the Company’s target Adjusted Pretax Income for fiscal year 2025. The maximum payout to Mr. Simmes under the 2025 SSTIP is $7,500,000. The Committee determined that the 2025 SSTIP was an appropriate method to incentivize Mr. Simmes to lead the Company in achieving its financial goals during fiscal year 2025, as well as to better align his compensation structure with that of certain senior members of divisional management.
Long-Term Incentive Awards
Long-Term Incentive Awards Performance-Based Phantom Stock Unit and Restricted Stock Grants From time to time, the Committee has awarded certain officers and key employees performance-based and time-based shares of restricted Common Stock (“Restricted Shares”) and phantom stock units (“Phantom Units”). Each Phantom Unit represents a contractual right in respect of one share of the Company’s Common Stock. Long-Term Incentive Plan On December 4, 2019, the Board adopted the Amended and Restated Long-Term Incentive Plan Annual Grant Program (the “LTIP”), subject to the terms and conditions of the 2006 Equity Incentive Plan. The LTIP provides for annual grants of restricted stock, phantom stock units or other equity or equity-based awards to such of the Company’s executive officers and other key employees as the Committee may designate. The annual grants may vest, as determined in the discretion of the Committee, based on: (i) actual performance relative to predetermined Company performance measures during the three fiscal-year period commencing with the fiscal year in which the grant is made, or such other period as determined by the Committee, (ii) continued service through the scheduled vesting date, or (iii) a combination of the foregoing. Any performance-based awards shall vest (i) at predetermined vesting percentages if actual performance is equal to the threshold, target and maximum performance measures for the relevant performance period, (ii) based on linear interpolation if actual performance is between such measures, and (iii) at 0% if actual performance is below the threshold performance measure. Fiscal Year 2022 Phantom Unit Awards On December 1, 2021, the Committee awarded certain officers and key employees, including Mr. Simmes, Ms. McLauchlin and Ms. Newman, Phantom Units (the “FY22 Phantom Units”) under the LTIP. The vesting date for FY22 Phantom Units was mid-December 2024 (the “FY22 Scheduled Vesting Date”). Mr. Simmes, Ms. McLauchlin and Ms. Newman were granted a total of 12,124 FY22 Phantom Units, 7,577 FY22 Phantom Units and 5,254 FY22 Phantom Units, respectively. The vesting of two-thirds, two-thirds and 25%, respectively, of Mr. Simmes’s, Ms. McLauchlin’s and Ms. Newman’s FY22 Phantom Units (the “FY22 Cumulative Income Units”) were subject to the Company’s achievement of a specified level of Cumulative Adjusted Pretax Income for the 2022-2024 fiscal years (the “FY2022-24 Performance Period”). Cumulative Adjusted Pretax Income was calculated from the Company’s annual financial statements for the FY2022-24 Performance Period. Between zero percent (0%) and one-hundred twenty percent (120%) of each recipient’s target number of FY22 Cumulative Income Units could have vested based on the achievement of Cumulative Adjusted Pretax Income during the FY2022-24 Performance Period. Except as otherwise provided in the applicable award agreement, to vest in the FY22 Cumulative Income Units, the recipient must also have remained continuously employed through the FY22 Scheduled Vesting Date. The remaining one-third, one-third and 75%, respectively, of Mr. Simmes’s, Ms. McLauchlin’s and Ms. Newman’s FY22 Phantom Units were subject to a time-based vesting schedule (the “FY22 Time-Based Units”), with the FY22 Time-Based Units scheduled to vest on the FY22 Scheduled Vesting Date. Except as otherwise provided in the applicable award agreement, to vest in the FY22 Time-Based Units, the recipients must have remained continuously employed through the FY22 Scheduled Vesting Date. On November 21, 2024, based on a review of financial results for the FY2022-24 Performance Period, the Committee determined that the Company recorded Cumulative Adjusted Pretax Income of $487,769,000 for the FY2022-24 Performance Period, which exceeded the target performance level of $361,818,000 by 34.8%. As a result, the FY22 Cumulative Income Units vested at 120% of target. On November 22, 2024, Mr. Simmes vested in 9,699 FY22 Cumulative Income Units and 4,041 FY22 Time-Based Units, Ms. McLauchlin vested in 6,062 FY22 Cumulative Income Units and 2,526 FY22 Time-Based Units and Ms. Newman vested in 1,576 FY22 Cumulative Income Units and 3,940 FY22 Time-Based Units. On December 1, 2022, the Committee awarded certain officers and key employees, including Mr. Gendell, Mr. Simmes, Ms. McLauchlin and Ms. Newman, Phantom Units (the “FY23 Phantom Units”) under the LTIP. The vesting date for FY23 Phantom Units is mid-December 2025 (the “FY23 Scheduled Vesting Date”). Mr. Gendell, Mr. Simmes, Ms. McLauchlin and Ms. Newman were granted a total of 25,096 FY23 Phantom Units, 17,715 FY23 Phantom Units, 11,072 FY23 Phantom Units and 7,676 FY23 Phantom Units, respectively. The vesting of two-thirds of each NEO’s Phantom Unit award is subject to the Company’s achievement of a specified level of Cumulative Adjusted Pretax Income for the 2023-2025 fiscal years (the “FY2023-25 Performance Period”). Between zero percent (0%) and one-hundred twenty percent (120%) of each recipient’s target number of FY23 Cumulative Income Units may vest based on the achievement of Cumulative Adjusted Pretax Income during the FY2023-25 Performance Period. Except as otherwise provided in the applicable award agreement, to vest in the FY23 Cumulative Income Units, the recipient must also remain continuously employed (or, for Mr. Gendell, serve on the Board of Directors of the Company) through the FY23 Scheduled Vesting Date. The remaining one-third of each NEO’s FY23 Phantom Units are subject to a time-based vesting schedule (the “FY23 Time-Based Units”), with the FY23 Time-Based Units scheduled to vest on the FY23 Scheduled Vesting Date. Except as otherwise provided in the applicable award agreement, to vest in the FY23 Time-Based Units, the recipients must remain continuously employed (or, for Mr. Gendell, serve on the Board of Directors of the Company) through the FY23 Scheduled Vesting Date On November 30, 2023, the Committee awarded certain officers and key employees, including Mr. Gendell, Mr. Simmes, Ms. McLauchlin and Ms. Newman, Phantom Units (the “FY24 Phantom Units”) under the LTIP. The vesting date for FY24 Phantom Units is mid-December 2026 (the “FY24 Scheduled Vesting Date”). Mr. Gendell, Mr. Simmes, Ms. McLauchlin and Ms. Newman were granted a total of 12,402 FY24 Phantom Units, 10,521 FY24 Phantom Units, 5,962 FY24 Phantom Units and 4,209 FY24 Phantom Units, respectively. The vesting of two-thirds of each NEO’s Phantom Unit award is subject to the Company’s achievement of a specified level of Cumulative Adjusted Pretax Income for the 2024-2026 fiscal years (the “FY2024-26 Performance Period”). Between zero percent (0%) and one-hundred twenty percent (120%) of each recipient’s target number of FY24 Cumulative Income Units may vest based on the achievement of Cumulative Adjusted Pretax Income during the FY2024-26 Performance Period. Except as otherwise provided in the applicable award agreement, to vest in the FY24 Cumulative Income Units, the recipient must also remain continuously employed (or, for Mr. Gendell, serve on the Board of Directors of the Company) through the FY24 Scheduled Vesting Date. The remaining one-third of each NEO’s FY24 Phantom Units are subject to a time-based vesting schedule (the “FY24 Time-Based Units”), with the FY24 Time-Based Units scheduled to vest on the FY24 Scheduled Vesting Date. Except as otherwise provided in the applicable award agreement, to vest in the FY24 Time-Based Units, the recipients must remain continuously employed (or, for Mr. Gendell, serve on the Board of Directors of the Company) through the FY24 Scheduled Vesting Date. Fiscal Year 2025 Phantom Unit Awards
Long-Term Incentive Awards
On November 22, 2024, the Committee awarded certain officers and key employees, including Mr. Gendell, Mr. Simmes, Ms. McLauchlin and Ms. Newman, Phantom Units (the “FY25 Phantom Units”) under the LTIP. The vesting date for FY25 Phantom Units is mid-December 2027 (the “FY25 Scheduled Vesting Date”). Mr. Gendell, Mr. Simmes, Ms. McLauchlin and Ms. Newman were granted a total of 3,320 FY25 Phantom Units, 2,691 FY25 Phantom Units, 1,776 FY25 Phantom Units and 1,346 FY25 Phantom Units, respectively. The vesting of two-thirds of each NEO’s Phantom Unit award is subject to the Company’s achievement of a specified level of Cumulative Adjusted Pretax Income for the 2025-2027 fiscal years (the “FY2025-27 Performance Period”). In connection with the FY25 Phantom Unit awards, the Committee determined to (i) maintain the 120% vesting percentage for achievement of 110% of target Cumulative Adjusted Pretax Income for the FY2025-27 Performance Period, consistent with prior year awards under the LTIP, and (ii) increase the maximum vesting percentage to 150% for achievement of 120% or greater of target Cumulative Adjusted Pretax Income for the FY2025-27 Performance Period. The Committee determined that the increase in the maximum vesting percentage would better align the LTIP with equity award practices at peer companies. Except as otherwise provided in the applicable award agreement, to vest in the FY25 Cumulative Income Units, the recipient must also remain continuously employed (or, for Mr. Gendell, serve on the Board of Directors of the Company) through the FY25 Scheduled Vesting Date. The remaining one-third of each NEO’s FY25 Phantom Units are subject to a time-based vesting schedule (the “FY25 Time-Based Units”), with the FY25 Time-Based Units scheduled to vest on the FY25 Scheduled Vesting Date. Except as otherwise provided in the applicable award agreement, to vest in the FY25 Time-Based Units, the recipients must remain continuously employed (or, for Mr. Gendell, serve on the Board of Directors of the Company) through the FY25 Scheduled Vesting Date. Other Long-Term Incentive Awards On December 1, 2021, Mr. Gendell received an equity incentive award, pursuant to the terms and conditions of the 2006 Equity Incentive Plan, of 50,000 Phantom Units (the “Gendell Stock Price-Based Award”), divided into two equal tranches that were subject to two vesting requirements. First, each tranche would vest only if the closing price per share of the Company’s Common Stock equaled or exceeded $90 per share for any 20 trading days out of 25 consecutive trading days at any time on or before December 1, 2026 (the “Stock Price Performance Requirement”). In addition, the vesting of the first tranche was subject to Mr. Gendell’s continued employment by the Company or service on the Board through December 1, 2023, and the second tranche was subject to his continued employment or service on the Board through December 1, 2024. If the Gendell Stock Price Performance Requirement was not satisfied on or before December 1, 2026, then none of the Phantom Units would vest and all of the Phantom Units under the Gendell Stock Price-Based Award would be forfeited for no consideration. The vesting conditions of the Gendell Stock Price-Based Award were satisfied and Mr. Gendell vested in 25,000 Phantom Units on March 7, 2024 and vested in the remaining 25,000 Phantom Units on December 1, 2024. Matthew J. Simmes On December 3, 2021, pursuant to the Simmes Letter Agreement (discussed under “Employment Agreements” below), Mr. Simmes received an equity incentive award, pursuant to the terms and conditions of the 2006 Equity Incentive Plan, of 50,000 Phantom Units (the “Simmes Stock Price-Based Award”) divided into two equal tranches that were subject to vesting requirements. One-half of each tranche would vest only if the closing price per share of the Company’s Common Stock equaled or exceeded $75 per share for any 20 trading days out of 25 consecutive trading days at any time on or before December 3, 2026 and the remaining half of each tranche would vest only if the closing price per share of the Company’s Common Stock equaled or exceeded $90 per share for any 20 trading days out of 25 consecutive trading days at any time on or before December 3, 2026. In addition, the vesting of the entire first tranche was subject to Mr. Simmes’s continued employment by the Company or a majority-owned subsidiary of the Company through December 3, 2023 and the vesting of the entire second tranche was subject to his continued employment through December 3, 2024. The vesting conditions of the Simmes Stock Price-Based Award were satisfied and Mr. Simmes vested in 12,500 Phantom Units on January 8, 2024, 12,500 Phantom Units on March 7, 2024 and 25,000 Phantom Units on December 3, 2024. On December 5, 2023, in connection with the promotion of Mr. Simmes to the position of President and Chief Operating Officer of the Company, the Compensation Committee determined to grant Mr. Simmes an additional equity incentive award, pursuant to the terms and conditions of the 2006 Equity Incentive Plan of 25,000 Phantom Units (the “Simmes Time-Based Award”), which is scheduled to vest on December 7, 2026, subject to Mr. Simmes’s continued employment by the Company or a majority-owned subsidiary of the Company through such date. Value Creation Grants On November 21, 2024, the Committee, in consideration of the Company’s operating and financial performance and successful implementation of certain key strategic initiatives, and the related significant increase in stockholder value, under the leadership of the NEOs, as well as the expected vesting of the Gendell Stock Price-Based Award and the Simmes Stock-Price Based Award, approved the grant to Mr. Gendell, Mr. Simmes, Ms. McLauchlin and Ms. Newman of special equity incentive awards of 50,000, 40,000, 6,000 and 5,000, respectively, time-based phantom stock units (the “Value Creation PSUs”). The Value Creation PSUs granted to each individual are comprised of two equal tranches that are scheduled to vest on or about December 1, 2026 and December 1, 2027, subject to each NEO’s continued employment by the Company (or in the case of Mr. Gendell, service on the Board) or a majority-owned subsidiary of the Company through the respective scheduled vesting dates. Mr. Simmes’ Value Creation PSU award will be settled in cash; the other NEOs’ Value Creation PSU awards will be settled in shares.
Discretionary Incentive Awards
Discretionary Incentive Awards In addition to the annual cash incentive awards described above, the Committee has in the past provided, and may from time to time in the future provide, discretionary equity or cash incentive awards for NEOs that have short-term or no time-based restrictions and that are based on achievement of significant strategic events, such as acquisitions, which the Committee believes will significantly impact the long-term performance of the Company. On December 5, 2023, the Committee determined to award special discretionary incentive awards to each of the NEOs in recognition of their respective contributions to the reorganization of the Residential segment of the Company. The Committee made cash awards to Mr. Gendell, Mr. Simmes, Ms. McLauchlin and Ms. Newman of $100,000, $400,000, $100,000 and $75,000, respectively (the “2023 Discretionary Incentive Awards”), and made a grant of 5,612 Phantom Units (the “Simmes Special Equity Award”) to Mr. Simmes, which Phantom Units are scheduled to vest on December 7, 2026, subject to Mr. Simmes’s continued employment by the Company or a majority-owned subsidiary of the Company through such date. On November 21, 2024, the Committee again determined to award special discretionary incentive awards to each of the NEOs in recognition of their respective contributions to the Company’s strong operating and financial performance during fiscal year 2024. The Committee made cash awards to Mr. Gendell, Mr. Simmes, Ms. McLauchlin and Ms. Newman of $1,500,000, $2,285,000, $300,000 and $200,000, respectively (the “2024 Discretionary Incentive Awards”).
Employment Agreements
Employment Agreements Jeffrey L. Gendell Letter Agreement On October 2, 2020, the Company and Mr. Gendell entered into an Amended and Restated Letter Agreement in connection with Mr. Gendell’s appointment, effective October 1, 2020, as CEO of the Company (the “Gendell Letter Agreement”). In addition to the compensation related matters discussed above, the Gendell Letter Agreement provides that Mr. Gendell is eligible to participate in certain of the Company’s benefit plans that are generally available to all employees of the Company. Mr. Gendell is not entitled to any fees or other compensation for his services as a director and the Chairman of the Board. Pursuant to the Gendell Letter Agreement, Mr. Gendell will be eligible for 12 months of COBRA payments by the Company in the event that his employment ends by reason of his death, Disability or Qualifying Termination (each as defined in the Severance Plan (as defined under “Severance Arrangements” below)), but he will not otherwise participate in the Severance Plan. Matthew J. Simmes Letter Agreement On December 3, 2021, in connection with Mr. Simmes’s appointment as Chief Operating Officer of the Company, the Company entered into the Simmes Letter Agreement. In addition to the compensation related matters discussed above, the Simmes Letter Agreement provides that Mr. Simmes is eligible to participate in certain of the Company’s benefit plans, including the Severance Plan (as defined under “Severance Arrangements” below). Mary K. Newman Employment Agreement On December 2, 2019, in connection with her appointment as Vice President, General Counsel and Corporate Secretary of the Company, the Company entered into an Employment Agreement with Ms. Newman (the “Newman Employment Agreement”). The Newman Employment Agreement provides that Ms. Newman is eligible to participate in certain of the Company’s benefit plans, including the Severance Plan.
Golden Parachute Taxes
Golden Parachute Taxes Under certain circumstances, payments received by our executive officers as a result of a change in control may be subject to excise taxes and may not be fully deductible. The Committee considered the possible effects of these taxes in developing the Severance Plan described under “Severance Arrangements” below.
PAYMENTS UPON A CHANGE IN CONTROL
PAYMENTS UPON A CHANGE IN CONTROL For information concerning payments upon the termination of the NEOs, including upon certain triggering events, please see “Severance Arrangements” below. In addition to the severance related matters discussed below, the Phantom Units have special vesting provisions that apply if, prior to the applicable scheduled vesting date, there is a change in control of the Company (as defined in the Company’s 2006 Equity Incentive Plan in effect at the time of the grant). If, following the occurrence of a change in control, the Phantom Units relate to a class of stock that was publicly traded on an established U.S. securities market (a “Publicly Traded Stock”), then the performance conditions with respect to the Phantom Units that relate to such Publicly Traded Stock will be deemed met at maximum levels, and the Phantom Units will become subject only to the continued employment conditions otherwise applicable to such Phantom Units. If the Phantom Units do not relate to a Publicly Traded Stock following the occurrence of a change in control, then such Phantom Units will vest in full upon the occurrence of the change in control, with performance conditions being deemed met at maximum levels.
2024 SUMMARY COMPENSATION TABLE
2024 SUMMARY COMPENSATION TABLE The following table displays the total compensation earned by the NEOs in fiscal years 2022, 2023 and 2024, or for such shorter period for which disclosure is required under SEC rules.
2024 SUMMARY COMPENSATION TABLE
| Name and Principal Position | Fiscal Year | Salary $ | Bonus $(1) | Stock Awards $(2)(3)(4) | Option Awards $ | Non-Equity Incentive Plan Compensation $(5) | All Other Compensation $(6) | Total $ | | Jeffrey L. Gendell | 2024 | 884,000 | 1,500,000 | 926,419 | — | 1,389,936 | — | 4,700,355 | | Chief Executive Officer | 2023 | 850,000 | 100,000 | 902,452 | — | 1,312,963 | — | 3,165,415 | | | 2022 | 825,000 | — | 1,400,000 | — | — | — | 2,225,000 | | Matthew J. Simmes | 2024 | 750,000 | 2,285,000 | 3,072,635 | — | 1,214,241 | 4,500 | 7,326,376 | | President & Chief Operating Officer | 2023 | 600,000 | 400,000 | 637,031 | — | 948,395 | 6,600 | 2,592,026 | | | 2022 | 534,038 | — | 2,139,337 | — | 500,000 | 6,100 | 3,179,475 | | Tracy A. McLauchlin | 2024 | 475,000 | 300,000 | 445,361 | — | 500,080 | 6,900 | 1,727,341 | | SVP, Chief Financial Officer & | 2023 | 450,000 | 100,000 | 398,149 | — | 440,213 | 6,600 | 1,394,962 | | Treasurer | 2022 | 440,500 | — | 367,512 | — | 149,085 | 6,100 | 963,197 | | Mary Newman | 2024 | 400,000 | 200,000 | 314,412 | — | 365,760 | 7,262 | 1,287,434 | | VP, General Counsel & | 2023 | 365,000 | 75,000 | 276,065 | — | 297,913 | 6,692 | 1,020,670 | | Corporate Secretary | 2022 | 361,250 | — | 254,823 | — | 142,533 | 5,475 | 764,081 |
2024 SUMMARY COMPENSATION TABLE
(1)For Mr. Gendell, Mr. Simmes, Ms. McLauchlin and Ms. Newman, the amount in this column for fiscal year 2023 represent their respective 2023 Discretionary Incentive Awards and the amount in this column for fiscal year 2024 represents their respective 2024 Discretionary Incentive Awards. (2)The amounts in this column represent the aggregate grant date fair value of Phantom Unit awards granted during the applicable fiscal years, computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“ASC Topic 718”). Certain assumptions used in the calculation of these amounts are included in footnote 12 to our audited financial statements for the fiscal year ended September 30, 2024 included in our Annual Report on Form 10-K filed with the SEC on November 22, 2024. Awards which vest upon achievement of a specified share price are valued using a Monte Carlo simulation performed as of the date of the grant. Awards which vest upon achievement of a financial performance target or upon the passage of time are valued based on the closing share price of the Company’s Common Stock on the grant date and assume the vesting conditions are achieved at target, which we determined to be the probable outcome of such performance conditions as of the date of grant. (3)The amount in this column for Mr. Gendell for fiscal year 2022 includes the Gendell Stock Price-Based Award. The amount in this column for Mr. Simmes for fiscal year 2022 includes the Simmes Stock Price-Based Award and the amount in this column for Mr. Simmes for fiscal year 2024 includes the Simmes Special Equity Award and the Simmes Time-Based Award. For additional information, see “Long-Term Incentive Awards — Other Long-Term Incentive Awards” above. (4)On December 3, 2021, Mr. Simmes, Ms. McLauchlin and Ms. Newman received grants of 12,124, 7,577 and 5,254 FY22 Phantom Units, respectively, which vest subject to certain performance and service conditions. The grant date fair values of the FY22 Phantom Units, calculated assuming maximum performance, were $666,479, $416,555 and $267,581, respectively. On December 1, 2022, Mr. Gendell, Mr. Simmes, Ms. McLauchlin and Ms. Newman received grants of 25,096, 17,715, 11,072 and 7,677 FY23 Phantom Units, respectively, which vest subject to certain performance and service conditions. The grant date fair values of the FY23 Phantom Units, calculated assuming maximum performance, were $1,022,774, $721,969, $451,226 and $312,888, respectively. On December 7, 2023, Mr. Gendell, Mr. Simmes, Ms. McLauchlin and Ms. Newman received grants of 12,402, 10,521, 5,962 and 4,209 FY24 Phantom Units, respectively, which vest subject to certain performance and service conditions. The grant date fair values of the FY24 Phantom Units, calculated assuming maximum performance, were $1,049,983, $890,723, $504,748 and $356,319, respectively. For additional information, see “Long-Term Incentives” above. (5)The amounts in this column represent the cash awards earned by the NEOs under the STIP for that fiscal year. Mr. Gendell did not participate in the STIP in fiscal 2022. (6)The amounts in this column for fiscal year 2024 reflect Company matching contributions under the 401(k) Plan. During fiscal year 2024, the total value of all perquisites and personal benefits received by each NEO was less than $10,000.
GRANTS OF PLAN BASED AWARDS
GRANTS OF PLAN BASED AWARDS The following table sets forth specific information with respect to equity and non-equity incentive plan awards made to the NEOs in fiscal year 2024 under the STIP and LTIP.
GRANTS OF PLAN BASED AWARDS
| | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) | | | Estimated Future Payouts Under All Other Stock Awards: Number of Shares of Stock or Units | | | All Other Option Awards: Number of Securities Underlying Options | Exercise or Base Price of Option Awards | Grant Date Fair Value of Stock and Option Awards | | Name | Grant Date | ($) | | | | | | (#) | | | | | | Threshold | Target | Maximum | Threshold | Target | Maximum | | | | | Jeffrey L. Gendell | 11/30/23 | $221,000 | $884,000 | $1,473,318 | | | | | | | | Jeffrey L. Gendell | 12/7/23 | | | | 8,268 | 12,402 | 14,056 | | | $926,419 | | Matthew J. Simmes | 11/30/23 | $187,500 | $750,000 | $1,249,988 | | | | | | | | Matthew J. Simmes | 12/7/23 | | | | 7,014 | 10,521 | 11,924 | | | $785,919 | | Tracy A. McLauchlin | 11/30/23 | $83,125 | $332,500 | $581,875 | | | | | | | | Tracy A. McLauchlin | 12/7/23 | | | | 3,975 | 5,962 | 6,757 | | | $445,361 | | Mary K. Newman | 11/30/23 | $60,000 | $240,000 | $420,000 | | | | | | | | Mary K. Newman | 12/7/23 | | | | 2,806 | 4,209 | 4,770 | | | $314,412 |
GRANTS OF PLAN BASED AWARDS
| (1) Awards in this table were granted in fiscal year 2024. The amount earned in fiscal 2024 in respect of each award is reported in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table. |
OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR-END
OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR-END The following table sets forth specific information with respect to unexercised options, unvested PSUs and shares of restricted stock and other unvested equity incentive plan awards outstanding as of September 30, 2024 for each NEO.
OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR-END
| | Stock Awards | | | | | Name | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(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) | | Jeffrey L. Gendell | 46,528(2) | 9,287,919 | 29,999(3) | 5,988,400 | | Matthew J. Simmes | 78,764(4) | 15,722,870 | 22,589(5) | 4,509,216 | | Tracy A. McLauchlin | 14,265(6) | 2,847,579 | 13,627(7) | 2,720,222 | | Mary K. Newman | 9,478(8) | 1,891,998 | 9,509(9) | 1,898,187 |
OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR-END
(1)Calculated based on the closing price per share of the Company’s Common Stock on September 30, 2024 of $199.62. (2)Includes 8,365 unvested FY23 Time-Based Units, 4,134 unvested FY24 Time-Based Units, and 9,029 Director PSUs, which convert to shares of Common Stock when Mr. Gendell leaves the Board for any reason. For additional information, see “Director Compensation” below. Also includes 25,000 unvested Phantom Units awarded pursuant to the Gendell Stock Price-Based Award for which the Stock Price Performance Requirement was satisfied during fiscal year 2024 but for which the employment condition was satisfied subsequent to the end of fiscal year 2024. (3)Includes 20,077 unvested FY23 Cumulative Income Units (assuming 16,731 target FY23 Cumulative Income Units vest at maximum) and 9,922 unvested FY24 Cumulative Income Units (assuming 8,268 target FY24 Cumulative Income Units vest at maximum). (4)Includes 5,905 unvested FY23 Time-Based Units, 3,507 unvested FY24 Time-Based Units and 25,000 unvested Phantom Units awarded pursuant to the Simmes Stock Price-Based Award for which the stock price requirements were satisfied during fiscal year 2024 but for which the employment condition was satisfied subsequent to the end of fiscal year 2024. Also includes 4,041 FY22 Time-Based Units, which vested on November 22, 2024 and 9,699 FY22 Cumulative Income Units, which vested on November 22, 2024 (as a result of 8,082 FY22 Cumulative Income Units vesting at 120% of target). Also includes 25,000 unvested Phantom Units awarded pursuant to the Simmes Time-Based Award and 5,612 unvested Phantom Units Awarded pursuant to the Simmes Special Equity Award. (5)Includes 14,172 unvested FY23 Cumulative Income Units (assuming 11,810 target FY23 Cumulative Income Units vest at maximum) and 8,417 unvested FY24 Cumulative Income Units (assuming 7,014 target FY24 Cumulative Income Units vest at maximum). (6)Includes 3,691 unvested FY23 Time-Based Units and 1,987 unvested FY24 Time-Based Units. Also includes 2,526 FY22 Time-Based Units, which vested on November 22, 2024 and 6,062 FY22 Cumulative Income Units, which vested on November 22, 2024 (as a result of 5,052 target FY22 Cumulative Income Units vesting at 120% of target). (7)Includes 8,857 unvested FY23 Cumulative Income Units (assuming 7,381 target FY23 Cumulative Income Units vest at maximum) and 4,770 unvested FY24 Cumulative Income Units (assuming 3,975 target FY24 Cumulative Income Units vest at maximum). (8)Includes 2,559 unvested FY23 Time-Based Units and 1,403 unvested FY24 Time-Based Units. Also includes 3,940 FY22 Time-Based Units, which vested on November 22, 2024 and 1,576 FY22 Cumulative Income Units, which vested on November 22, 2024 (as a result of 1,313 target FY22 Cumulative Income Units vesting at 120% of target). (9)Includes 6,142 unvested FY23 Cumulative Income Units (assuming 5,118 target FY23 Cumulative Income Units vest at maximum) and 3,367 unvested FY24 Cumulative Income Units (assuming 2,806 target FY24 Cumulative Units vest at maximum).
OPTION EXERCISES AND STOCK VESTED IN FISCAL YEAR 2024
OPTION EXERCISES AND STOCK VESTED IN FISCAL YEAR 2024 The following table sets forth, on an aggregate basis, specific information with respect to each exercise of options and vesting of stock, including Phantom Units and similar instruments for each NEO during fiscal year 2024.
OPTION EXERCISES AND STOCK VESTED IN FISCAL YEAR 2024
| | Option Awards | | Stock Awards | | | | Number of Shares Acquired on Exercise | Value Realized on Exercise | Number of Shares Acquired on Vesting | Value Realized on Vesting | | Name | (#) | ($) | (#) | ($) | | Jeffrey L. Gendell(1) | — | — | 25,000 | 2,878,500 | | Matthew J. Simmes(2) | — | — | 25,000 | 2,406,750 | | Tracy A. McLauchlin(3) | — | — | 8,904 | 665,113 | | Mary K. Newman(4) | — | — | 6,489 | 484,743 |
OPTION EXERCISES AND STOCK VESTED IN FISCAL YEAR 2024
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OPTION EXERCISES AND STOCK VESTED IN FISCAL YEAR 2024
| (1) On March 7, 2024, Mr. Gendell vested in 25,000 Phantom Units that were awarded to him on December 1, 2021 pursuant to the Gendell Stock Price-Based Award. | | (2) On January 8, 2024, Mr. Simmes vested in 12,500 Phantom Units that were awarded to him on December 3, 2021 pursuant to the Simmes Stock Price-Based Award and on March 7, 2024 he vested in another 12,500 Phantom Units awarded pursuant to the Simmes Stock Price-Based Award. | | (3) On December 7, 2023, Ms. McLauchlin vested in 8,904 Phantom Units that were awarded to her pursuant to the LTIP in December 2020. | | (4) On December 7, 2023, Ms. Newman vested in 6,489 Phantom Units that were awarded to her pursuant to the LTIP in December 2020. |
PAY RATIO DISCLOSURE
PAY RATIO DISCLOSURE In accordance with SEC rules, we have calculated the ratio of the compensation of our Principal Executive Officer (“PEO”), which was our Chief Executive Officer during fiscal year 2024, and the compensation of our median employee, as calculated below, during the fiscal year 2024 (the “Median Compensation Amount”). During fiscal year 2024, the Median Compensation Amount was $42,773 and the annual total compensation for our CEO, Mr. Jeffrey Gendell, including salary, incentive compensation and equity granted during the fiscal year, was $4,700,355. Accordingly, the reasonable estimated ratio of the total annual compensation of the CEO to the Median Compensation amount was 110 to 1. The methodology we used for calculating the pay ratio was first to determine the total employee population (other than the CEO) as of September 30, 2024, including full-time and part-time employees, which we determined to be 13,166 employees. In order to determine the median employee within the identified employee population, we collected fiscal year 2024 payroll compensation per employee, which we defined as all wages reported for the employee on his or her most recent W-2 form. We did not make any assumptions, adjustments, or estimates with respect to total payroll compensation for the employees within the identified employee population, and we did not annualize the compensation for any part-time employees or any full-time employees that were not employed by us for all of fiscal 2024. We then calculated the Median Compensation Amount on the same basis as the total annual compensation of the CEO was calculated. The Company believes its compensation philosophy and process yield an equitable result. The pay ratio reported above is a reasonable estimate calculated in a manner consistent with SEC rules, based on our internal records and the methodology described above. The SEC rules for identifying the median compensated employee allow companies to adopt a variety of methodologies, to apply certain exclusions and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. Accordingly, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies have different employee populations and compensation practices and may use different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE
Pay Versus Performance Table
Pay Versus Performance Table In accordance with recent SEC rules, the following table and accompanying discussion and charts provide information on the relationship between the “compensation actually paid” to our PEO and our other NEOs (calculated in accordance with Item 402(v) of Regulation S-K) and certain measures of the Company’s financial performance, including Total Shareholder Return, Net Income and a Company-Selected Metric that is most important to the determination of executive compensation (in the Company’s case, Adjusted Pretax Income). The compensation actually paid (“CAP”) set forth in the table below does not reflect amounts actually realized by our NEOs, and the HR Compensation Committee did not consider CAP when making compensation decisions for any of the years presented. The information provided in this Pay Versus Performance section shall not be deemed to be incorporated by reference into any of the Company’s future filings under the Securities Act or the Exchange Act, except to the extent that the Company specifically incorporates such information by reference in such filing.
Pay Versus Performance Table
| | | | | | Value of Initial Fixed $100 Investment Based on: | | | | | | | Summary Compensation Table Total for PEO(1) ($) | Compensation Actually Paid to PEO(2) ($) | Average Summary Compensation Table Total for Other NEOs(1) ($) | Average Compensation Actually Paid to Other NEOs(2) ($) | Total Shareholder Return(3) ($) | Peer Group (Old) Total Shareholder Return(4) ($) | Peer Group (New) Total Shareholder Return(4) ($) | Net Income (millions)(5) ($) | Adjusted Pretax Income (millions)(6) ($) | | 2024 | 4,700,355 | 15,814,569 | 3,447,050 | 8,425,000 | 628.33 | 486.88 | 465.66 | 219 | 295 | | 2023 | 3,165,415 | 5,478,525 | 1,669,219 | 3,011,582 | 207.33 | 266.06 | 262.63 | 108 | 141 | | 2022 | 2,225,000 | 1,383,169 | 1,635,584 | 1,258,957 | 86.94 | 143.43 | 144.42 | 35 | 51 | | 2021 | 2,873,900 | 5,812,565 | 1,085,576 | 1,924,602 | 143.81 | 175.65 | 152.12 | 67 | 80 |
Pay Versus Performance Table
| (1) The PEO in all four reporting years was Jeffrey L. Gendell. The non-PEO NEOs for fiscal years 2024, 2023 and 2022 were Matthew J. Simmes, Tracy A. McLauchlin and Mary K. Newman. The only non-PEO NEO for fiscal year 2021 was Tracy A. McLauchlin. | | (2) The following adjustments were made to the Summary Compensation Table total compensation amounts to determine CAP for each applicable year in accordance with Item 402(v)(2) of Regulation S-K. None of our NEOs participate in any defined benefit or actuarial pension plan. |
Pay Versus Performance Table
| | 2024 | | 2023 | | 2022 | | 2021 | | | | PEO ($) | Average of Other NEOs ($) | PEO ($) | Average of Other NEOs ($) | PEO ($) | Average of Other NEOs ($) | PEO ($) | Average of Other NEOs ($) | | Summary Compensation Table Total | 4,700,355 | 3,447,050 | 3,165,415 | 1,669,219 | 2,225,000 | 1,635,584 | 2,873,900 | 1,085,576 | | Deduct grant date fair value of stock awards | (926,429) | (515,231) | (902,452) | (437,082) | (1,400,000) | (920,557) | (1,823,000) | (365,459) | | Add year-end fair value of equity awards granted during the year and unvested at fiscal year end | 2,805,659 | 1,560,363 | 1,873,409 | 907,228 | 406,500 | 478,457 | 3,046,015 | 398,280 | | Add change in year-end fair value (compared to prior fiscal year end) for awards granted in prior fiscal years and unvested at fiscal year end | 7,575,484 | 3,524,538 | 2,031,500 | 983,909 | 123,669 | 33,236 | — | 639,813 | | Add year-end fair value of equity awards granted and vested during the fiscal year | — | — | — | — | — | — | 1,715,650 | — | | Add change in vesting date fair value (compared to prior fiscal year end) for awards vested during the year | 1,659,500 | 408,280 | (689,347) | (111,692) | 28,000 | 32,237 | — | 166,392 | | Compensation Actually Paid | 15,814,569 | 8,425,000 | 5,478,525 | 3,011,582 | 1,383,169 | 1,258,957 | 5,812,565 | 1,924,602 |
Pay Versus Performance Table
| (a) The fair value of equity award adjustments for each applicable year were calculated in accordance with ASC Topic 718. The valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant, except that awards which vest upon achievement of a specified share price were valued using a Monte Carlo simulation performed as of the applicable valuation date. |
Pay Versus Performance Table
| (3) Reflects total shareholder return (“TSR”) calculated in the manner required by Item 201(e) of Regulation S-K and reflects the cumulative value of $100, including the reinvestment of dividends, if such amount were invested on September 30, 2020. | | (4) The Company’s peer group for purposes of Item 201(e)(1)(ii) of Regulation S-K was utilized for the purpose of calculating peer group TSR. The peer group TSR was calculated using (a) a customized peer group of four companies that includes Comfort Systems USA Inc., MYR Group Inc., Sterling Infrastructure, Inc. and Primoris (the "Peer Group (Old)") and (b) a revised customized peer group of five companies that includes Comfort Systems USA Inc., MYR Group Inc., Sterling Infrastructure, Inc., Primoris and Installed Building Products, Inc. (the “Peer Group (New)”). The change from the Peer Group (Old) to the Peer Group (New) was made in fiscal 2024 to better reflect companies relevant to the Company's current business. | | (5) Reflects consolidated net income calculated in accordance with GAAP for each of the fiscal years shown. | | (6) Reflects Adjusted Pretax Income for each of the years shown. Adjusted Pretax Income is calculated as income from continuing operations before income taxes, stock compensation expense and restructuring charges, less gains or losses on the disposition of a business, adjusted, in the sole discretion of the HR Compensation Committee, to reflect extraordinary items during the fiscal year. |
Relationship between Compensation Actually Paid and Financial Performance Measures
Relationship between Compensation Actually Paid and Financial Performance Measures
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION Directors who are officers of the Company or any of its subsidiaries do not receive a retainer or fees for service on the Board or any committees. On March 25, 2024, the Board authorized and approved, upon recommendation of the HR Compensation Committee, certain changes to the compensation received by the Company’s non-employee directors. The changes were recommended and approved following a review of the director compensation programs of certain of the Company’s peers, an evaluation of recent Company performance, and in light of the Company’s director compensation having not been increased since 2019. Pursuant to the changes, effective April 1, 2024, the annual fee for service on the Board received by each non-employee director of the Company (the “Annual Fee”) increased from $145,000 to $205,000. The amounts paid to the Chairs of the Board committees remained the same: (i) the Chair of the HR Compensation Committee receives a $12,500 annual fee, (ii) the Chair of the Nominating/Governance Committee receives a $10,000 annual fee, and (iii) the Chair of the Audit Committee receives a $25,000 annual fee, each of which is paid in quarterly installments. During the first quarter of each fiscal year, each director is provided the opportunity to elect, in respect of his or her compensation for services rendered in the following calendar year, whether to receive the combined amount of his or her Annual Fee and any additional fee payable for service as Chair of a committee of the Board (collectively, the “Total Annual Compensation”), in whole or in part, in either (i) cash, (ii) unrestricted Common Stock or (iii) phantom stock units issued pursuant to the 2006 Equity Incentive Plan that convert to shares of Common Stock on the date the director leaves the Board for any reason (“Director PSUs”), provided that at least 50% of each director’s Total Annual Compensation must be paid in Common Stock or Director PSUs. During fiscal 2024, each non-employee director elected to receive 50% of his or her Total Annual Compensation in the form of cash and 50% in the form of Director PSUs, except that Mr. Fouts elected to receive 100% of his Total Annual Compensation in the form of Director PSUs. With respect to the portion of each director’s Total Annual Compensation paid in Director PSUs, the number of Director PSUs granted quarterly is determined by dividing the amount of the quarterly installment of such director’s Total Annual Compensation to be paid in Director PSUs by the closing price of the Company’s Common Stock on the last trading day of the quarter. Directors are also reimbursed for reasonable out-of-pocket expenses incurred in attending Board and committee meetings and for their reasonable expenses related to the performance of their duties as directors. The following table reflects the amounts paid to each individual non-employee director who served on the Board in fiscal year 2024.
DIRECTOR COMPENSATION
| Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2)(3) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($) | Total ($) | | Jennifer A. Baldock | 99,177 | 98,323 | — | — | — | 197,500 | | Todd M. Cleveland | 102,643 | 102,357 | — | — | — | 205,000 | | John L. Fouts (4) | 65 | 4,392 | | | | 4,457 | | David B. Gendell | 95,345 | 94,655 | — | — | — | 190,000 | | Joe D. Koshkin | 107,615 | 107,385 | — | — | — | 215,000 | | Elizabeth D. Leykum (5) | 88,371 | 87,703 | — | — | — | 176,074 |
DIRECTOR COMPENSATION
(1)Represents cash fees earned during the fiscal year ended September 30, 2024, including cash paid in lieu of fractional Director PSUs. (2)Represents the aggregate grant date fair value of awards of Director PSUs earned during the fiscal year ended September 30, 2024, computed in accordance with ASC Topic 718. Each Director PSU converts into one share of Common Stock when the respective director leaves the Board for any reason. Assumptions used in the calculation of these amounts are included in footnote 12 to the Company’s audited consolidated financial statements for the fiscal year ended September 30, 2024 included in our Annual Report on Form 10-K filed with the SEC on November 22, 2024. (3)As of September 30, 2024, and including post-fiscal-year-end grants made in respect of fees earned in fiscal year 2024, each non-employee director held the following aggregate number of Director PSUs together with shares of Common Stock: Ms. Baldock — 5,377; Mr. Cleveland — 104,790; Mr. Fouts — 7,315; Mr. David Gendell — 134,104; and Mr. Koshkin — 49,237. (4)Mr. Fouts joined the Board on September 23, 2024. (5)Ms. Leykum resigned from the Board on September 4, 2024.