DEF 14A of Esco Technologies Inc
Filed Dec 16, 2024 · FY20240001104659-24-128800
NOMINEES FOR DIRECTOR
NOMINEES FOR DIRECTOR The following table provides summary information about our director nominees, each of whom is a current director of the Company:
NOMINEES FOR DIRECTOR
| Nominee | Primary Occupation | Independent | Board Committees | Key Attributes/Qualifications | | David A. Campbell | President and Chief Executive Officer and Chairman of the Board of Evergy, Inc., a public utility holding company based in Kansas City | Yes | Audit | Extensive strategic, operational and executive experience in the energy field | | Penelope M. Conner | Executive Vice President, Customer Experience and Energy Strategy of Eversource Energy, a public utility holding company based in New England serving Connecticut, Massachusetts and New Hampshire | Yes | Governance | Nearly four decades of operational, financial and leadership experience in the electric and gas utility sector, with demonstrated performance in high-quality customer service, strategy development and capital allocation | | Gloria L. Valdez | Retired Deputy Assistant Secretary of the Navy within the Office of the Assistant Secretary of the Navy (ASN) for Research, Development and Acquisition | Yes | Compensation, Governance | Over three decades of strategic and operational experience in the defense markets as well as management and financial expertise |
REQUIRED VOTE
REQUIRED VOTE At the Meeting, shareholders will be entitled to cast one vote for each share held by them of record on the record date. There is no cumulative voting with respect to the election of directors. The Company has no non-voting shares. The affirmative vote of the holders of a majority of the shares represented in person or by proxy at the Meeting and entitled to vote on the matter in question will be required to elect directors, to approve each of the individual proposals described in this Proxy Statement, and to approve any other matters properly brought before the Meeting. The Company’s Corporate Governance Guidelines provide that an incumbent director who fails to obtain a majority vote must promptly offer his or her resignation to the Chair, and the remaining directors shall meet to consider whether it is in the best interests of the Company to accept the resignation or to permit the incumbent to remain on the Board for such period of time as the Board may determine or until a successor is elected and qualified.
REQUIRED VOTE
| NOTICE OF 2025 ANNUAL MEETING & PROXY STATEMENT ● ESCO TECHNOLOGIES INC. | VOTING | 6 |
REQUIRED VOTE
Shares represented by proxies which are marked “Withhold” authority to vote for the election of one or more of the nominees for election as directors or marked “Abstain” on any one or more of the other individual proposals described in this Proxy Statement will be counted for the purpose of determining the number of shares represented by proxy at the Meeting, but proxies so marked will have the same effect as if the shares were voted against such nominee or nominees or such proposals. Under the Rules of the NYSE, the proposal to approve the appointment of independent registered public accountants is considered a “discretionary” item, which means that brokerage firms may vote in their discretion on this matter on behalf of clients who have not furnished voting instructions at least 10 days before the date of the Meeting. In contrast, the election of directors and the other items on the Meeting agenda are “non-discretionary” items, which means that brokerage firms that have not received voting instructions from their clients on these proposals may not vote on them. These so-called “broker non-votes” will, if the underlying shares are otherwise represented at the Meeting, be considered to be present for purposes of determining a quorum, but will be treated as not entitled to vote on such non-discretionary or matters; they will therefore not be considered in determining the number of votes necessary for approval and will have no effect on the outcome of the votes for directors or the other matters to be considered at the Meeting. If your shares are held by a broker, it is important that you provide voting instructions to your broker so that your votes will be counted.
REQUIRED VOTE
| NOTICE OF 2025 ANNUAL MEETING & PROXY STATEMENT ● ESCO TECHNOLOGIES INC. | VOTING | 7 |
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Proposal 1: Election of Directors
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| The Board of Directors recommends a vote FOR all nominees. |
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The Board is divided into three classes, with the terms of office of each class ending in successive years. The terms of Class II directors Penelope M. Conner, Leon J. Olivier and Gloria L. Valdez will expire at the Meeting. However, because Mr. Olivier has reached the age of 75 he is ineligible to stand for re-election under the Board’s director retirement policy and will retire from the Board effective with the election of directors at the 2025 Annual Meeting. Accordingly, with the consent of director David A. Campbell, whose current term would not have expired until 2027, the Board has reclassified Mr. Campbell from Class I into Class II and has nominated Mr. Campbell, Ms. Conner and Ms. Valdez for election to new three-year terms expiring at the 2028 Annual Meeting. The Board also decided to reduce the number of directors from nine to eight upon the expiration of Mr. Olivier’s term. As a result, after the 2025 Annual Meeting the Board will have three directors with terms expiring in 2028, two directors with terms expiring in 2027, and three directors with terms expiring in 2026. If elected, the nominees would serve until the expiration of their terms and until their successors have been elected and qualified. Proxies cannot be voted for more than the number of Board nominees. Should any one or more of the nominees become unable or unwilling to serve (which is not expected), the proxies unless marked to the contrary will be voted for such other person or persons as the Board may recommend.
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| NOTICE OF 2025 ANNUAL MEETING & PROXY STATEMENT ● ESCO TECHNOLOGIES INC. | PROPOSAL 1 | 8 |
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| NOMINEES FOR TERMS ENDING IN 2028 |
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| ● Age 56 ● Director since 2024 ● Board Committees: Audit ● Qualifies as an audit committee financial expert under SEC rules | David A. Campbell Mr. Campbell’s extensive strategic, operational and executive experience in the energy field makes him well-qualified to provide high-level strategic, financial and operational guidance to the Company. Principal Occupation and Business Experience 2021–Present: President and Chief Executive Officer and Chairman of the Board (since May 2024) of Evergy, Inc. (public utility holding company) 2019–2021: Executive Vice President and Chief Financial Officer of Vistra Corp. (integrated retail electricity and power generation company) 2014–2019: Chief Executive Officer, InfraREIT, Inc. 2013–2014: President and Chief Operating Officer, Bluescape Resources Company, LLC 2004–2013: Various executive positions with Vistra Corp. and predecessors (TXU Inc. to 2006, Energy Future Holdings Corp. 2006–2013) 1995–2004: Positions of increasing responsibility, including Partner, Corporate Finance and Strategy, with McKinsey and Company, Inc. Other Public Company Directorships Within Past Five Years 2021–Present: Evergy, Inc. (public utility holding company) Other Experience and Education J.D. magna cum laude from Harvard Law School; M.Phil. International Relations, Oxford University; B.A. summa cum laude with Distinction in History from Yale University. Currently serves or has served on a number of boards including the Edison Electric Institute, the Electric Power Research Institute, and the Leadership Council of the Yale School of the Environment |
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| ● Age 61 ● Director since 2024 ● Board Committees: Governance | Penelope M. Conner Ms. Conner’s nearly four decades of operational, financial and leadership experience in the electric and gas utility sector, with demonstrated performance in high-quality customer service, strategy development and capital allocation, allow her to provide high-level, multi-faceted insight and assistance to the Board. Principal Occupation and Business Experience 2021–Present: Executive Vice President, Customer Experience and Energy Strategy at Eversource Energy (public utility holding company) 2002–2021: Various other executive positions with Eversource Energy 1986–2002: Positions of increasing responsibility from 1986 to 1998 at Duke Energy Corporation, culminating as General Manager for Process Integration, and then from 1998 to 2002 at Tampa Electric Company as its Director of Customer Service Other Experience and Education B.S. summa cum laude in Industrial Engineering from North Carolina State University. Registered professional engineer in North and South Carolina; Member of Boston University’s Institute for Global Sustainability and the American Council for an Energy Efficient Economy |
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| NOTICE OF 2025 ANNUAL MEETING & PROXY STATEMENT ● ESCO TECHNOLOGIES INC. | PROPOSAL 1 | 9 |
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| ● Age 62 ● Director since 2019 ● Board Committees: Compensation, Governance | Gloria L. Valdez Ms. Valdez’s extensive strategic and operational experience in the defense markets as well as her management and financial expertise allow her to provide the Board with valuable assistance and high-level strategic insight. Principal Occupation and Business Experience 2021–2024: Member of the Naval Shipbuilding Expert Advisory Panel providing advice to the Commonwealth of Australia on its National Naval Shipbuilding Enterprise 2015–2018: Deputy Assistant Secretary of the Navy within the Office of the Assistant Secretary of the Navy (ASN) for Research, Development and Acquisition (executive oversight of all naval shipbuilding programs, major ship conversions, and maintenance, modernization and disposal of in-service ships) 1986–2015: Served in a number of other civilian positions within the Navy Department including as Executive Director for the Program Executive Office for submarines (responsible for civilian management, design, acquisition and construction for submarine platform and undersea systems), Director of the Investment and Development division within the Office of the ASN for Financial Management and Comptroller, and Director for Naval and Commercial Construction in the Office of the ASN for Ship Programs; also served as Budget Director for U.S. Immigration and Customs Enforcement within the Department of Homeland Security Other Experience and Education M.S. in management from Florida Institute of Technology; B.S. in Mechanical Engineering from the University of New Mexico; sponsor of the Virginia Class submarine USS Vermont (SSN 792) commissioned in 2020 |
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| NOTICE OF 2025 ANNUAL MEETING & PROXY STATEMENT ● ESCO TECHNOLOGIES INC. | PROPOSAL 1 | 10 |
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| DIRECTORS CONTINUING IN OFFICE |
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| ● Age 63 ● Director since 2017 ● Term expires 2026 ● Board Committees: Audit (Chair), Compensation ● Qualifies as an audit committee financial expert under SEC rules | Patrick M. Dewar Mr. Dewar’s extensive strategic, financial and operational experience in the aerospace and defense markets makes him well-qualified to assist in guiding Company strategy at the highest levels. Principal Occupation and Business Experience 2016–Present: Chief Executive of The Trenton Group, LLC (investment and strategy consulting firm focused on security, aerospace and defense technology companies) 2013–2016: Executive Vice President of Lockheed Martin International and Chairman of Lockheed Martin Global, Inc. 2010–2013: Senior Vice President, Strategy and Business Development for Lockheed Martin Corporation Prior to 2010: Held various positions with Lockheed Martin and GE Aerospace Other Public Company Directorships Within Past Five Years 2018–Present: Butler America Aerospace, LLC, a subsidiary of HCL Technologies Ltd. (provider of engineering, design IT and support services primarily to US aerospace and defense markets) Other Experience and Education M.S. in Electrical Engineering, Drexel University; B.S. in Engineering, Swarthmore College. Member of the Council on Foreign Relations; senior adviser to numerous investment firms on aerospace and defense matters |
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| ● Age 64 ● Director since 2022 ● Term expires 2027 ● Board Committees: Audit, Governance ● Qualifies as an audit committee financial expert under SEC rules | Janice L. Hess Ms. Hess’s four decades of experience includes operational, financial, business transformations and organizational effectiveness, as well as demonstrated performance in growing traditional, adjacent and emerging markets similar to those served by the Company, making her well-qualified to assist the Board in guiding Company strategy at the highest levels. Principal Occupation and Business Experience 2014–2022: President, Engineered Systems Segment of Teledyne Technologies Incorporated (diversified multinational company providing enabling technologies for industrial growth markets requiring advanced technology and high reliability; the Engineered Systems Segment provides innovative systems engineering and integration and advanced technology development, and is a U.S. Government contractor serving defense, space, energy and maritime markets) 2000–2014: Held a number of other positions with Teledyne, including Executive Vice President and Chief Financial Officer of Engineered Systems 1984–2000: Held positions of increasing responsibility with Intergraph Corporation (now Hexagon AB, a multinational corporation), including Vice President, Finance and Administration and Chief Financial Officer, Computer Systems Other Experience and Education B.S.B.A. from Auburn University; staff accountant with PricewaterhouseCoopers LLP from 1981 to 1983 |
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| NOTICE OF 2025 ANNUAL MEETING & PROXY STATEMENT ● ESCO TECHNOLOGIES INC. | PROPOSAL 1 | 11 |
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| ● Age 71 ● Director since 2014 ● Term expires 2026 ● Board Committees: Audit, Compensation (Chair) ● Qualifies as an audit committee financial expert under SEC rules | Vinod M. Khilnani As a former public company executive, Mr. Khilnani brings to the Board of Directors a wealth of management experience and business knowledge regarding operational, financial and corporate governance issues, as well as extensive international experience with global operations. Principal Occupation and Business Experience 2013: Executive Chairman of the Board of Directors of CTS Corporation (designer, manufacturer and seller of electronic components and sensors) 2009–2013: Chairman and Chief Executive Officer of CTS 2007–2009: President and Chief Executive Officer of CTS 2001–2007: Senior VP and CFO of CTS Other Public Company Directorships Within Past Five Years 2009–Present: Materion Corporation (manufacturer of highly engineered advanced materials, performance alloys and composites, and precision coatings for global markets) 2013–2023: 1st Source Corporation (bank holding company) 2014–2021: Gibraltar Industries (manufacturer and distributor of products for the building markets) Other Experience and Education M.B.A. from the University of New York at Albany; B.A. in Business Administration from Delhi University |
REQUIRED VOTE
| NOTICE OF 2025 ANNUAL MEETING & PROXY STATEMENT ● ESCO TECHNOLOGIES INC. | PROPOSAL 1 | 12 |
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| ● Age 64 ● Director since 2014 ● Term expires 2026 ● Chair of the Board ● Board Committees: Executive (Chair), Compensation, Governance | Robert J. Phillippy Along with his experience as chief executive officer of a publicly held technology company, Mr. Phillippy brings to the Board of Directors extensive experience in mergers and acquisitions as well as in new product innovation and international business development; and as independent Chair of the Board he provides valuable insights and perspectives regarding all areas of the Company’s business. Principal Occupation and Business Experience 2016–Present: Executive consultant to technology companies on a range of strategic, operational and organizational issues 2007–2016: President, Chief Executive Officer and a director of Newport Corporation (developer, manufacturer and supplier of lasers, optics and photonics technologies, products and systems for scientific research, microelectronics, defense and security, life and health sciences and industrial markets worldwide) 2004–2007: President and Chief Operating Officer of Newport Corporation 1996–2004: Held various executive management positions with Newport Corporation 1984–1996: Held various sales and marketing management positions at Square D Company (now Schneider Electric) (electrical equipment manufacturer) Other Public Company Directorships Within Past Five Years 2018–Present: Materion Corporation (manufacturer of highly engineered advanced materials, performance alloys and composites, and precision coatings for global markets) 2018–Present: Kimball Electronics Inc. (manufacturing solutions provider of durable electronics and other products for a variety of industries globally) Other Experience and Education M.B.A. from Northwestern University’s Kellogg School of Management; B.S. in Electrical Engineering from the University of Texas at Austin |
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| ● Age 58 ● Director since 2023 ● Term expires 2027 ● Board Committees: Executive | Bryan H. Sayler Mr. Sayler’s nearly 30 years of experience at the Company across several of its core businesses, including his current position as Chief Executive Officer and President, is reflected in his proven track record of aligning strategy and business objectives as well as strong financial results and M&A outcomes, making him uniquely qualified to provide the Board of Directors with valuable insights and perspectives concerning all areas of the Company’s business. Principal Occupation and Business Experience 2023–Present: Chief Executive Officer, President and a director of the Company 1995–2022: Held various positions of increasing responsibility within the Company, including as President of the Utility Solutions Group and Doble Engineering from 2016– 2022 Other Experience and Education B.A. in Pre-Seminary from Southeastern College; M.B.A. from Baylor University |
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| NOTICE OF 2025 ANNUAL MEETING & PROXY STATEMENT ● ESCO TECHNOLOGIES INC. | PROPOSAL 1 | 13 |
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| BOARD OF DIRECTORS |
Communications with Directors
| DIRECTOR COMPENSATION |
Components of 2024 and 2025 Director Compensation
Components of 2024 and 2025 Director Compensation
Components of 2024 and 2025 Director Compensation
| Cash Compensation | 2024 | 2025 | | Annual Retainer (all non-management directors) | $50,000(1) | $50,000 | | Chair of the Board | 85,000 | 85,000 | | Committee Chairs: | | | | ● Audit | 12,500 | 17,500 | | ● Compensation | 10,000 | 15,000 | | ● Governance | 8,000 | 12,000 |
Components of 2024 and 2025 Director Compensation
| Equity Compensation | 2024 | 2025 | | Restricted Share Award (all non-management directors) | $180,000(1) | $180,000 |
Components of 2024 and 2025 Director Compensation
| 1 | For their service as directors during the latter part of calendar 2024, Ms. Conner and Mr. Campbell each received a prorated initial cash retainer of $25,000 and a prorated initial equity award of whole shares valued at approximately $90,000 on the respective effective dates of their elections as directors. |
Components of 2024 and 2025 Director Compensation
The annual equity award consists of a number of restricted share units (RSUs) equal to $180,000 divided by the NYSE closing price of the common stock on the award date, rounded to the nearest whole share and vesting one year after the award date. The equity award for calendar 2024 was made on February 8, 2024 and will vest on February 8, 2025. Based on the NYSE closing stock price of $103.84 on the award date it amounted to 1,733 RSUs per director.
Components of 2024 and 2025 Director Compensation
| NOTICE OF 2025 ANNUAL MEETING & PROXY STATEMENT ● ESCO TECHNOLOGIES INC. | PROPOSAL 1 | 20 |
Components of 2024 and 2025 Director Compensation
The partial-year calendar 2024 equity award to Mr. Campbell was made on October 16, 2024, based on the NYSE closing stock price of $124.57 on September 25, 2024, the effective date of his election; rounded to the nearest whole share it amounted to 722 RSUs. The partial-year 2024 equity award to Ms. Conner was made on November 6, 2024, based on the NYSE closing stock price of $127.89 on October 25, 2024, the effective date of her election; rounded to the nearest whole share it amounted to 704 RSUs. Like the full-year annual awards, each award will vest one year after the award date. Mr. Campbell elected to defer receipt of his 2024 equity award and cash retainer as described below. During the vesting period, each director’s RSU account accrues an additional number of unvested RSUs equivalent to the quarterly dividends that would have been paid on a like number of shares of common stock, divided by the NYSE closing price on the dividend date; and on the vesting date the director’s accrued and vested RSUs are converted into whole shares of common stock, plus cash equal to the value of any fractional shares based on the NYSE closing price on the vesting date, and are distributed and paid to the director, or if the director has elected to defer their compensation as described below, the RSUs are retained in the director’s deferred compensation account as vested common stock equivalents until the elected distribution date.
Fiscal 2024 Compensation
| | | | | | Change in | | | | | | | | | Pension Value | | | | | | | | | and Nonqualified | | | | | | | | Non-Equity | Deferred | | | | Name | Fees Earned or Paid in Cash | Stock Awards(1) | Option Awards | Incentive Plan Compensation | Compensation Earnings(2)(3) | All Other Compensation | Total | | David A. Campbell | $25,000(4) | $89,940 | — | — | $0 | — | $114,940 | | Patrick M. Dewar | 62,500(5) | 180,522 | — | — | 5,687 | — | 248,709 | | Janice L. Hess | 50,000(6) | 180,522 | — | — | 1,369 | — | 231,891 | | Vinod M. Khilnani | 60,078(7) | 180,522 | — | — | 0 | — | 240,600 | | Leon J. Olivier | 58,000(8) | 180,522 | — | — | 10,884 | — | 249,406 | | Robert J. Phillippy | 135,078(9) | 180,522 | — | — | 6,071 | — | 321,671 | | James M. Stolze | 12,578(10) | 0 | — | — | 3,055 | — | 15,633 | | Gloria L. Valdez | 50,140(11) | 180,522 | — | — | 2,569 | — | 233,231 |
Executive Compensation Program Highlights
| Pay for performance philosophy | A significant portion of NEO pay is at-risk in order to align pay with business strategy and shareholder interests | | At-risk annual cash incentive | Based on achievement of specified Company performance metrics | | Long-term equity incentive compensation (LTI) | Incorporates long-term Company performance metrics, and retention factors such as delayed vesting | | Limited perquisites | Perquisites are appropriate to the position and not excessive | | No tax gross-ups | No tax gross-up on any perquisites or severance benefits | | Competitive stock ownership policy | NEO stock ownership requirement is based on a multiple of base salary | | Clawback policy | Cash incentive and equity awards may be reclaimed by the Company in case of malfeasance or accounting restatements due to noncompliance with financial reporting requirements | | No hedging or pledging | NEOs must retain the risks of Company stock ownership | | Double trigger vesting | NEO change in control agreements and stock awards contain double trigger vesting provisions | | Independent compensation consultant | The Compensation Committee retains its own independent compensation consultant | | Strong say-on-pay support | Over 99% of the shares voting at the 2023 Annual Meeting supported the Company’s executive compensation program |
Compensation Consultant and Benchmarking
Compensation Consultant and Benchmarking The Compensation Committee is authorized by its charter to employ independent compensation and other consultants. The Committee has typically engaged a nationally recognized compensation consulting firm (Compensation Consultant) every other year to assist the Committee in evaluating executive compensation. The Compensation Consultant provides information, research and analysis pertaining to executive compensation as requested by the Committee, including updates on market trends, survey data and analysis for market review. The Committee also from time to time engages our primary outside counsel, Bryan Cave Leighton Paisner LLP (BCLP) to advise it on selected executive compensation issues. The Committee conducts a peer and market review every two years; the most recent review was in 2022, as described below.
2022 Compensation Report (Fiscal 2023 Compensation Review)
2022 Compensation Report (Fiscal 2023 Compensation Review) In the summer of 2022, the Committee engaged Pay Governance LLC as the Compensation Consultant to provide a compensation report (the 2022 Compensation Report) for the Committee’s fiscal 2023 compensation review. One of the elements of the 2022 Compensation Report was the 2022 Mercer Benchmark Database/Total Remuneration Survey – Executive (the Mercer Survey), a broad-based survey of management compensation, as the primary source for benchmarking its executive compensation levels. A broad market survey provides decision-quality data that is generally reliable and consistent year-over-year. The Company was a participant in the Mercer Survey. A list of all of the participating companies included in the Mercer Survey is attached as Appendix A to this Proxy Statement. For its 2022 Compensation Report, the Compensation Consultant also provided proxy data from the peer group described below (2022 Peer Group) to be used in conjunction with the Mercer Survey in order to add context to the decision-making process and provide a supplemental perspective on the market. Peer group proxy data provides transparent line-by-line information for each company in the peer group, and provides the ability to review industry trends and compensation design practices as well as pay-for-performance alignment. The 2022 Peer Group was based on the SIC codes assigned to the Company’s subsidiaries and represented companies in the following industries in which the Company participates:
2022 Compensation Report (Fiscal 2023 Compensation Review)
Companies in the above industries were then filtered for revenue size in order to determine the 2022 Peer Group. The following is a list of the companies in the 2022 Peer Group, with their ticker symbols:
Fiscal 2024 Benchmarking
Fiscal 2024 Benchmarking For its compensation review for fiscal 2024, the Committee reviewed each principal element of compensation (base salary, cash incentive and LTI), as well as total cash compensation (base salary and cash incentive), and total direct compensation (target cash compensation and LTI) for each of the Company’s executive officer positions, and compared them against the benchmark range from the Compensation Report. For all three of the NEOs, the benchmark range for each element of compensation in the Compensation Report is the median plus or minus 15% as aged by 4%. For fiscal 2024, the Committee utilized the benchmark ranges from the Compensation Report, as aged by 4%, in determining the competitiveness of the executives’ compensation. The Committee also compared relative Company performance against the performance of the companies in the 2022 Peer Group to test the overall reasonableness of pay for performance. The Committee used the Compensation Report described above as a guideline and frame of reference in determining appropriate compensation levels and incentives for the executive officers; however, the Committee does not make its decisions according to a formula, and the Committee exercises considerable judgment and discretion in making them. The complexity and composition of the Company does not lend itself to comparisons with a readily ascertainable peer group, and while matching by SIC codes can provide some measure of comparability, there are wide variations in the type and complexity of these companies. The Committee therefore considers the benchmark ranges to be only a guide, and makes individual determinations of compensation for each of the executive officers based on numerous factors including the comparative responsibilities of the executive officers and the Committee’s assessments of individual and Company performance.
Compensation Consultant Independence
Compensation Consultant Independence In August 2024, the Committee assessed the independence of Pay Governance and BCLP in line with the SEC’s compensation consultant independence factors, and determined there were no conflicts of interest. The Committee will continue to review their independence status annually and will keep the compliance letters on file.
Principal Elements of Compensation Program
| Pay Element | Form | 2024 Metrics | Objectives | | Base Salary | Cash | Benchmarked to market median, subject to adjustment for individual factors such as experience and performance | Attract and retain qualified executives | | Annual Incentive Plan (PCP) | Cash | 100% based on financial results: ● 70% based on Adjusted EPS ● 30% based on Adjusted Cash Flow from Operating Activities | Drive profitability, growth and progress against strategy | | Long-Term Equity Incentive (LTI) | Performance Share Units (PSUs) | Awards vest after 3-year performance period ● 60% based on EBITDA growth ● 40% based on Return on Invested Capital ● Potential for modification based on rTSR | Align NEOs’ efforts with creation of long-term shareholder value | | | Restricted Share Units (RSUs) | 2024 awards vest in thirds approximately 1, 2 and 3 years after grant | Retention, ownership and full alignment with the shareholder experience | | Benefits | Consistent with other similarly situated personnel | | |
Total Direct Compensation
Total Direct Compensation The executive officers receive total direct compensation consisting of cash compensation (base salary plus annual cash incentive compensation) and long-term equity incentive compensation. Each of these elements is described in detail in the corresponding sections below. The Committee sets target levels for total direct compensation based on the skills, experience, breadth of their role, and performance of each executive officer, taking into account the benchmarking described above and compensation recommendations made by the CEO (except with respect to his own position). The Committee also considers the Company’s performance. For fiscal 2024, the Committee increased the executive officers’ total direct compensation as described in detail below. Total direct compensation for fiscal 2024 was within the benchmark range for Mr. Schatz, slightly above the benchmark range for Mr. Tucker, and below the benchmark range for Mr. Sayler.
Annual Cash Incentive
Annual Cash Incentive The Committee uses annual performance-based cash incentives to compensate the executive officers. The Committee establishes at-risk performance targets for the executive officers using financial and operational goals linking compensation to overall Company performance. The annual cash incentive targets for fiscal 2024 and fiscal 2023 were as follows:
Target Cash Incentive Compensation(1)
Target Cash Incentive Compensation(1)
Target Cash Incentive Compensation(1)
| Officer | FY 2024 Target Cash Incentive | FY 2023 Target Cash Incentive | Percent Increase from FY 2023 | | Bryan H. Sayler | $755,000 | $715,000 | 5.6% | | Christopher L. Tucker | 389,000 | 373,000 | 4.3% | | David M. Schatz | 202,900 | 176,000 | 15.3% |
Target Cash Incentive Compensation(1)
1 Amounts shown are annual targets for fiscal 2024; the actual amounts paid are set forth in the Summary Compensation Table. The fiscal 2024 cash incentive targets for the executive officers were established pursuant to our Performance Compensation Plan (PCP) authorized under the 2018 Omnibus Incentive Plan. This at risk plan closely links the executive officers’ pay to our financial results and provides compensation variability in the form of reduced payments when performance is below targets and higher compensation when performance exceeds targets. The PCP has a fixed target with a payout range based on performance. The Committee has discretion to either increase or decrease the actual cash incentive payouts. For fiscal 2024, the Committee determined to set the cash incentive targets as a percent of base salary in line with market practices. The 2024 cash incentive targets for Mr. Sayler, Mr. Tucker and Mr. Schatz were 100% of 2024 base salary, 65% of 2024 base salary, and 50% of 2024 base salary, respectively.
Changes to Annual Cash Incentive for Fiscal 2025
Changes to Annual Cash Incentive for Fiscal 2025 Consistent with fiscal 2024, the Committee determined that the cash incentive targets for fiscal 2025 would be set as a percent of base salary in line with market practices. The fiscal 2025 cash incentive targets for Mr. Sayler, Mr. Tucker and Mr. Schatz are $830,500 (100% of 2025 base salary), $400,725 (65% of 2025 base salary), and $213,050 (50% of 2025 base salary), respectively.
Target Total Cash Compensation: Fiscal 2024(1)
| | | Base Salary | Cash Incentive Target (PCP) | | | | Officer | | Percent of Target Total Cash Compensation | | Percent of Target Total Cash Compensation | Target Total Cash Compensation | | Bryan H. Sayler | $755,000 | 50% | $755,000 | 50% | $1,510,000 | | Christopher L. Tucker | 598,500 | 61% | 389,000 | 39% | $987,500 | | David M. Schatz | 405,800 | 67% | 202,900 | 33% | $608,700 |
Target Total Cash Compensation: Fiscal 2024(1)
The higher at-risk target percentage for the CEO as compared to the other executive officers is based on our at risk philosophy and the greater responsibilities of the CEO. Similarly, the CFO has a higher at-risk percentage as compared to the General Counsel. Near the beginning of each fiscal year, after reviewing our business plans for the fiscal year, the Committee determines the key short-term business metrics on which senior management should focus in order to drive results and approves the cash incentive target for each executive officer. Because of the broad responsibilities of the executive officers, their criteria are tied to Company-wide metrics. The Committee then determines the percentage of the cash incentive target which should be tied to each of the metrics and the performance target for each metric, and approves the threshold and maximum multipliers which will be applied to each of the performance targets to determine the payment under the plan. If performance is below the threshold for a metric, there is no payout for that metric.
Cash Incentive Metrics
Cash Incentive Metrics During the first quarter of fiscal 2024 the Committee approved two metrics for achievement of the fiscal 2024 PCP incentive targets, based on the annual operating plan reviewed by the Board of Directors. The first metric in 2024 was “Adjusted EPS,” weighted at 70% of the total PCP target opportunity; Adjusted EPS is a non-GAAP financial measure. Fiscal 2024 Adjusted EPS of $4.18 equaled GAAP diluted EPS of $3.94 excluding $0.24 per share of after-tax charges consisting primarily of $0.09 of debt financing and $0.06 of acquisition costs at Corporate related to the pending SM&P acquisition which was announced in July 2024, $0.05 of restructuring charges (primarily severance) in the A&D, Test and USG segments, and $0.04 of backlog and inventory step-up charges at the Company’s subsidiary MPE Limited which was acquired during fiscal 2024. The second metric in fiscal 2024 was “Adjusted Cash Flow from Operating Activities,” weighted at 30% of the total PCP target opportunity; Adjusted Cash Flow from Operating Activities is a non-GAAP financial measure. Fiscal 2024 Adjusted Cash Flow from Operating Activities of $132.3 million equaled GAAP Cash Flow from Operating Activities of $127.5 million excluding $4.8 million of adjustments consisting primarily of debt financing and acquisition costs at Corporate related to the pending SM&P acquisition and restructuring charges (primarily severance) in the A&D, Test and USG segments. The Committee approved the following targets for the two fiscal 2024 cash incentive metrics. It believes that the selected metrics and the performance benchmarks for each metric, and the threshold and maximum multipliers, provided meaningful incentives for 2024 performance.
2024 PCP Targets and Results
| | | 2024 Benchmarks | | | | | | Metric | Weight (% of Target Incentive) | Threshold | Target | Maximum | Actual Value Achieved | Actual % of Payout Earned (unweighted) | | Adjusted EPS | 70% | $3.57 | $4.20 | $4.62 | $4.18 | 97.79% | | Adjusted Cash Flow from Operating Activities (millions) | 30% | 120.3 | 141.5 | 162.7 | 132.3 | 69.76% | | % of Target Earned at Each Benchmark | | 30%(1) | 100% | 200% | | | | Weighted % of Total Target Earned | | | | | | 89.38% |
Changes to Cash Incentive Metrics for Fiscal 2025
Changes to Cash Incentive Metrics for Fiscal 2025 In line with its practice in recent years, the Committee determined to allocate 100% of the executive officers’ cash incentive compensation opportunity to the PCP, and approved the following performance criteria for fiscal 2025:
Changes to Cash Incentive Metrics for Fiscal 2025
| ● | “Adjusted EPS,” weighted at 70% of the total target opportunity and consisting of earnings per share excluding certain defined non-recurring gains and charges expected to be realized or incurred in fiscal 2024 (this is a non-GAAP measure); and |
Changes to Cash Incentive Metrics for Fiscal 2025
| ● | “Adjusted Cash Flow from Operating Activities,” weighted at 30% of the total target opportunity (this is a non-GAAP measure). |
Changes to Cash Incentive Metrics for Fiscal 2025
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Changes to Cash Incentive Metrics for Fiscal 2025
As in 2024, the potential cash incentive compensation for fiscal 2025 will range from 0 to 2.0 times the target opportunity for both Adjusted EPS and Adjusted Cash Flow from Operating Activities, depending on actual 2025 performance.
Long-Term Incentive Compensation
Long-Term Incentive Compensation The Company’s annual LTI award program consists of a combination of performance-based share unit (PSU) awards and time-vested restricted share unit (RSU) awards, with each type weighted at 50% of the total LTI opportunity. For fiscal 2024, both the PSU and RSU grants were approved in the first quarter of the fiscal year. We do not coordinate LTI grants with the release of material non-public information. Company-wide equity grants, including equity grants to our executive officers, are made at regular meetings of the Compensation Committee. We also do not grant stock options or other awards which require a payment by the recipient in order to realize the value of the award. The target number of shares in each RSU and PSU award equals the Committee-approved target values divided by the average trading price of the Company’s stock over the last 15 trading days before the effective award date. The actual payout of the RSUs and PSUs will be in shares, whose value at the time of payout may be greater or less than the target values. For an award to vest, the recipient must generally be continuously employed by the Company from the award date through the vesting date. For the executive officers, the numbers of RSUs granted and the PSU threshold, target and maximum numbers of shares payable according to the performance criteria, were as follows:
Long-Term Incentive Compensation
| | RSU Target | | PSU Target | PSU Payout Potential (Shares) | | | | | Values as of | Number of | Values as of | | | | | Officer | Grant Date | RSUs Granted | Grant Date | Threshold (50%) | Target (100%) | Maximum (200%) | | Bryan H. Sayler | $755,000 | 7,627 | $755,000 | 3,814 | 7,627 | 15,254 | | Christopher L. Tucker | 299,250 | 3,023 | 299,250 | 1,512 | 3,023 | 6,046 | | David M. Schatz | 152,500 | 1,538 | 152,500 | 769 | 1,538 | 3,076 |
Restricted Share Units (RSUs)
Restricted Share Units (RSUs) RSUs are time-vested awards. The terms of the fiscal 2024 awards were similar to those granted in fiscal 2023, except that to better align with the Company’s fiscal year goal-setting process, and conform to the granting schedule of the PSU awards, the fiscal 2024 RSU awards were granted in the first quarter and will vest in three equal portions approximately 12, 24 and 36 months after the month in which they are granted; accordingly, for the fiscal 2024 awards, vesting will occur on the last NYSE trading days in November 2024, 2025 and 2026, at which time they will be converted into a like number of shares of Company common stock, and such shares will be paid out to the participant (after statutory tax withholdings) on the following business day.
Performance Share Units (PSUs)
Performance Share Units (PSUs) Other than the specific share amounts and performance goals, the terms of the fiscal 2024 PSUs were substantially similar to those awarded for fiscal 2023, including that the awards are subject to the Company’s Clawback Policy (see Clawback Policy on page 35). PSUs awarded in fiscal 2024 will vest, after a three-year performance period ending with fiscal 2026, on the last trading day of the month in which the HRCC approves and certifies the extent to which the applicable performance goals have been achieved. To the extent earned, the vested awards will be converted into a number of shares of Company common stock based on achievement of the performance goals. The award distribution in shares may be less than or greater than the number of PSUs awarded depending on the degree to which the Company has achieved specified performance goals. Straight-line interpolation will be used to score between threshold, target and maximum performance levels. For the fiscal 2024 PSU awards, the Committee continued to align the performance measures with shareholders by continuing the use of EBITDA as a performance measure with a 60% weighting and Return on Invested Capital (ROIC) as a performance measure with a 40% weighting, and continuing the use of relative Total Shareholder Return (rTSR) as a potential modifier:
Performance Share Units (PSUs)
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EBITDA Performance Goals – 60% of PSU award value
EBITDA Performance Goals – 60% of PSU award value
EBITDA Performance Goals – 60% of PSU award value
| | | Below Threshold | Threshold | Target | Maximum | | Cumulative Company EBITDA for the three year performance period(1) | Performance Level | <85% of EBITDA target | 85% of EBITDA target | $633.6 million | 130% of EBITDA target | | | Payout(2) | 0% | 50% | 100% | 200% |
ROIC Performance Goals – 40% of PSU award value
ROIC Performance Goals – 40% of PSU award value
ROIC Performance Goals – 40% of PSU award value
| | | Below Threshold | Threshold | Target | Maximum | | Company ROIC for 2026(3) | Performance Level (in percentages) | <85% of ROIC target | 85% of ROIC target | 12% for FY2026 | 130% of ROIC target | | | Payout(2) | 0% | 50% | 100% | 200% |
ROIC Performance Goals – 40% of PSU award value
| 1 | The EBITDA target was set by the Committee to represent a challenging performance incentive based on annual percentage increases over actual 2023 EBITDA and is not intended as guidance or a prediction of actual results |
ROIC Performance Goals – 40% of PSU award value
| 2 | Subject to adjustment as described below. |
ROIC Performance Goals – 40% of PSU award value
| 3 | The ROIC target was set by the Committee to represent a challenging performance incentive and is not intended as guidance or a prediction of actual results. |
ROIC Performance Goals – 40% of PSU award value
After applying the above performance metrics, the resulting number of PSUs may be subject to increase or decrease based on the Company’s Total Shareholder Return (TSR) over the performance period compared to the TSR of the companies in a peer group based on the S&P SmallCap 600 Industrials Index. If the Company’s rTSR is below the 25th percentile or above the 75th percentile, the resulting number of shares will be decreased by 20% or increased by 20%, respectively; if the Company’s rTSR is from the 25th percentile to the 75th percentile, no adjustment will be made. In no event will the award payout be greater than 200% of the target. For more information about the fiscal 2024 LTI awards, see Grants of Plan-Based Awards on page 37.
Changes to Long Term Incentive Compensation for 2025
Changes to Long Term Incentive Compensation for 2025 The 2024 Pay Governance market assessment indicated that the executive officers’ total direct compensation was lagging the market primarily due to below-market LTI. In response, the Committee significantly increased the total 2025 LTI values as percentages of base salaries, resulting in fiscal 2025 target LTI values as of the grant date of $2,700,000 (325% of base salary) for Mr. Sayler, $770,600 (125% of base salary) for Mr. Tucker, and $426,100 (100% of base salary) for Mr. Schatz. In addition, although the Committee determined that the LTI awards for fiscal 2025 would be provided in the same two forms as in fiscal 2024, it determined to shift the mix of the LTI awards toward the performance-based PSUs rather than being divided equally between the PSUs and the RSUs as they were in fiscal 2024, and it assigned 70% of the total LTI target value to the PSUs and 30% to the RSUs. The fiscal 2025 PSUs were granted in November 2024, and after a three-year performance period ending with fiscal 2027, they will vest on the last trading day of the month in which the HRCC approves and certifies the extent to which the applicable performance goals have been achieved. To the extent earned, the vested awards will be converted into a currently undeterminable number of shares of Company common stock, which may be less than or greater than the number of PSUs awarded, within certain specified threshold and maximum limits, depending on the degree to which the Company has achieved one or more specified performance goals. If the performance is less than the threshold goal for a particular performance measure, there will be no payout of that portion of the PSUs dependent on that measure. The fiscal 2025 RSU awards were also granted in November 2024 and will vest in three equal portions approximately 12, 24 and 36 months after the month in which they are granted; for the fiscal 2025 awards, vesting will occur on the last trading days in November of 2025, 2026 and 2027.
Changes to Long Term Incentive Compensation for 2025
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Severance Plan
Severance Plan Severance provisions in the event of a change of control benefit a company by allowing executives who are parties to such arrangements to focus on continuing business operations and the success of a potential business combination rather than seeking alternative employment, thereby providing stability to a corporation during a potentially uncertain period. Accordingly, the Company has adopted a Severance Plan which prescribes the compensation and benefits to be provided in the event of a change of control to certain executives, including the CEO and the other executive officers. Our change of control arrangements were designed to provide executives with severance payments and certain other benefits in the event that their employment is terminated in connection with a change of control transaction. The Severance Plan includes a “double trigger,” which means that it provides severance benefits only if there is both (1) a change of control of the Company, and (2) the Company (or any successor) terminates the employee’s employment without cause within 36 months following a change of control, or the employee terminates his or her employment for good reason within 36 months following a change of control, or the Company terminates the employee’s employment within 90 days before a change of control at the request of a third party who, at such time, had taken steps reasonably calculated to effect the change of control. For purposes of the Severance Plan, “change of control” means any of the following (subject to the specific definitions in the Severance Plan): (i) the acquisition by any person or group of at least 20% of the then-outstanding shares of the Company’s common stock; or (ii) a change in a majority of the members of the Board of Directors that is not approved by the incumbent Board; or (iii) the approval by the shareholders of either a reorganization, merger or consolidation after which the shareholders will not own at least a majority of the Company’s common stock and voting power, or a liquidation or dissolution of the Company, or the sale of all or substantially all of the Company’s assets. If the Severance Plan is triggered, the executive will be entitled to all accrued but unpaid compensation, a pro rata cash bonus for the year of separation and benefits through the date of separation, as well as a lump sum cash payment which is designed to replicate the cash compensation (base salary and cash incentive), plus certain benefits, that the executive would have received had he or she remained employed for two years. These payments and benefits would only be paid as a result of a double-trigger event. The determination of the appropriate level of payments and benefits to be provided in the event of a change of control termination involved consideration of several factors. The two-year multiple was determined based on a survey of the Company’s peers at the time the Severance Plan was adopted by the Company, and is deemed to be reasonable. The Committee considered that a high-level executive, who is more likely to lose his or her job in connection with a change of control than other employees, may require more time than other employees in order to secure an appropriate new position, and, unless that executive was provided with change of control benefits, he or she may be motivated to start a job search early if a change of control is anticipated, to the detriment of the Company. Thus, the existence of the Severance Plan provides an incentive for the executive to remain with the Company until a change of control actually occurs. In addition, payments are not provided under the Severance Plan unless there has been not only a change of control but also a qualifying termination of employment, thus providing an acquirer the opportunity to retain the Company’s management team during or after a transition period.
Severance Plan
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Severance Plan
For further information about the Severance Plan, and a sample calculation of the cash compensation and benefits to be provided to our executive officers under the Severance Plan, based on certain stated assumptions, see Potential Payments Upon Termination or Change in Control beginning on page 40. In addition, pursuant to the executive officers’ severance agreements as well as their LTI award agreements, in the event of a change of control, all LTI awards are to be assumed by the acquirer or successor entity and converted to an equivalent agreement. If for any reason the awards will not or cannot be assumed, they will be paid out in cash.
Employment Agreements
Employment Agreements We have entered into employment and compensation agreements with each of our executive officers, most recently with Mr. Sayler effective January 1, 2023, consistent with the financial terms of his accepted offer letter and otherwise substantially on the same terms as the employment agreements with our other executive officers. The agreements provide for payment of an annual base salary, participation in our cash incentive plans, eligibility for participation in our LTI plans and benefit plans and programs applicable to senior executives, and continuance of certain perquisites. For more information about the terms of these agreements, including specifics regarding the cash compensation and benefits provided in the event of a qualifying separation, and for a sample calculation based on certain stated assumptions, see Employment Agreements on page 39, and Potential Payments Upon Termination or Change in Control beginning on page 40. The Compensation Committee periodically assesses the reasonableness of the executive officers’ employment agreements to consider whether any changes are appropriate.
Insider Trading Policy; Anti-Hedging and Anti-Pledging Policies; Timing of LTI Grants
Insider Trading Policy; Anti-Hedging and Anti-Pledging Policies; Timing of LTI Grants Our Insider Trading Policy prohibits any employee from trading in Company securities while in possession of material non-public information. In addition, the Insider Trading Policy strictly prohibits our directors, officers and employees from engaging in transactions in Company securities involving puts, calls or other derivative securities on an exchange or in any other organized market, selling Company securities “short”, or entering into hedging or similar arrangements (such as exchange funds) involving Company securities. The Insider Trading Policy also prohibits our directors, officers, corporate office employees, and other designated employees in management positions from pledging Company securities as collateral for a loan or holding Company securities in a margin account. These policies are intended to ensure that the executive officers, as well as other Company personnel in positions of authority, cannot offset or hedge against declines in the price of
Insider Trading Policy; Anti-Hedging and Anti-Pledging Policies; Timing of LTI Grants
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Insider Trading Policy; Anti-Hedging and Anti-Pledging Policies; Timing of LTI Grants
the Company stock they own or have a personal interest in the price of their shares which may be different from the interests of other shareholders generally. A clickable link to the Insider Trading Policy is located at Exhibit 19 in the Exhibit Index to our 2024 Annual Report on Form 10-K on file with the SEC. We do not coordinate LTI grants with the release of material non-public information. Company-wide equity grants, including equity grants to our executive officers, are made at regular meetings of the Compensation Committee. We also do not grant stock options or other awards which require a payment by the recipient in order to realize the value of the award.
Clawback Policy
| 2024 SUMMARY COMPENSATION TABLE |
Clawback Policy
| Name and | | | | | Non-Equity | Change in Pension Value | | | | Principal | Fiscal | | | | Incentive Plan | & Nonqualified Deferred | All Other | | | Position | Year | Salary | Bonus | Stock Awards(1) | Compensation(2) | Compensation Earnings | Compensation(3) | Total | | Bryan H. Sayler | 2024 | $755,000 | $0 | $1,651,551 | $674,819 | $0 | $30,690 | $3,112,060 | | Chief Executive | 2023 | 621,125(4) | 0 | 1,492,717 | 947,375 | 0 | 586,424 | 3,647,641 | | Officer and | N/A | — | — | — | — | — | — | — | | President | | | | | | | | | | Christopher L. | 2024 | $598,500 | $0 | $654,600 | $347,688 | $0 | $26,995 | $1,627,783 | | Tucker | 2023 | 570,000 | 0 | 845,059 | 410,300 | 0 | 113,274 | 1,938,633 | | Senior Vice | 2022 | 522,000 | 0 | 730,600 | 549,840 | 0 | 52,103 | 1,854,543 | | President and | | | | | | | | | | Chief Financial | | | | | | | | | | Officer | | | | | | | | | | David M. Schatz | 2024 | $405,800 | $0 | $333,039 | $181,352 | $0 | $31,009 | $951,200 | | Senior Vice | 2023 | 394,000 | 0 | 308,530 | 193,600 | 0 | 33,342 | 929,472 | | President, General | 2022 | 357,000 | 0 | 356,259 | 241,740 | 0 | 48,210 | 1,003,209 | | Counsel and | | | | | | | | | | Secretary | | | | | | | | |
Clawback Policy
| 2024 GRANTS OF PLAN-BASED AWARDS |
Clawback Policy
| OUTSTANDING EQUITY AWARDS AT FISCAL 2024 YEAR-END |
Clawback Policy
| 2024 OPTION EXERCISES AND STOCK VESTED |
Clawback Policy
| PENSION BENEFITS |
Defined Contribution Plan
| POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL |
PAY RATIO DISCLOSURE
PAY RATIO DISCLOSURE
CEO Pay Ratio
CEO Pay Ratio Pursuant to Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the implementing regulations of the SEC, we are providing the following information about the relationship between the total annual compensation of our CEO, Mr. Sayler, and the median total annual compensation of our employees. As reported in the Summary Compensation Table on page 36, Mr. Sayler’s 2024 total annual compensation was $3,112,060. The 2024 median total annual compensation of all of our employees who were employed as of August 1, 2024 (the Determination Date), other than Mr. Sayler, was $72,806, resulting in a pay ratio of 43:1.
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE
Adjustments to Determine Compensation Actually Paid to Current CEO (PEO 1)
Adjustments to Determine Compensation Actually Paid to Current CEO (PEO 1)
Adjustments to Determine Compensation Actually Paid to Current CEO (PEO 1)
| Current CEO | 2021 | 2022 | 2023 | 2024 | | SCT Total Compensation | N/A | N/A | $3,647,641 | $3,112,060 | | Less Equity Award Values Reported in SCT | — | — | (1,492,717) | (1,651,551) | | Plus Fair Value at Fiscal Year-End of Outstanding and Unvested Stock Awards Granted in Fiscal Year | — | — | 1,700,271 | 2,006,282 | | Change in Fair Value of Outstanding and Unvested Stock Awards Granted in Prior Fiscal Years | — | — | 325,125 | 622,595 | | Plus Fair Value at Vesting of Stock Awards Granted in Fiscal Year That Vested During Fiscal Year | — | — | 0 | 0 | | Plus Change in Fair Value as of Vesting Date of Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | — | — | 44,914 | (24,366) | | Less Fair Value as of Prior Fiscal Year-End of Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year | — | — | 0 | 0 | | Plus Dividends or Other Earnings Paid on Stock Awards in the Fiscal Year Prior to the Vesting Date that are not otherwise included in the Total Compensation for the Fiscal Year | — | — | 0 | 0 | | Compensation Actually Paid (CAP) | N/A | N/A | $4,225,234 | $4,065,021 |
Adjustments to Determine Compensation Actually Paid to Former CEO (PEO 2)
Adjustments to Determine Compensation Actually Paid to Former CEO (PEO 2)
Adjustments to Determine Compensation Actually Paid to Former CEO (PEO 2)
| Former CEO | 2021 | 2022 | 2023 | 2024 | | SCT Total Compensation | $4,161,742 | $5,452,715 | $2,677,153 | N/A | | Less Equity Award Values Reported in SCT | (2,462,845) | (2,963,694) | (1,499,967) | — | | Plus Fair Value at Fiscal Year-End of Outstanding and Unvested Stock Awards Granted in Fiscal Year | 1,714,174 | 2,813,301 | 0 | — | | Change in Fair Value of Outstanding and Unvested Stock Awards Granted in Prior Fiscal Years | (182,607) | (159,075) | 338,042 | — | | Plus Fair Value at Vesting of Stock Awards Granted in Fiscal Year That Vested During Fiscal Year | 0 | 0 | 1,786,685 | — | | Change in Fair Value as of Vesting Date of Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | 0 | 218,272 | 1,015,817 | — | | Less Fair Value as of Prior Fiscal Year-End of Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year | 0 | 0 | (2,011,558) | — | | Plus Dividends or Other Earnings Paid on Stock Awards in the Fiscal Year Prior to the Vesting Date that are not otherwise included in the Total Compensation for the Fiscal Year | 0 | 0 | 0 | — | | Compensation Actually Paid (CAP) | $3,230,464 | $5,361,519 | $2,306,171 | N/A |
Adjustments to Determine Compensation Actually Paid to Former CEO (PEO 2)
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Adjustments to Determine Compensation Actually Paid to Non-PEO NEOs
Adjustments to Determine Compensation Actually Paid to Non-PEO NEOs
Adjustments to Determine Compensation Actually Paid to Non-PEO NEOs
| Average Compensation | 2021 | 2022 | 2023 | 2024 | | SCT Total Compensation | $1,039,962 | $1,428,876 | $1,434,053 | $1,289,492 | | Less Equity Award Values Reported in SCT | (257,270) | (543,430) | (576,795) | (493,819) | | Plus Fair Value at Fiscal Year-End of Outstanding and Unvested Stock Awards Granted in Fiscal Year | 179,064 | 517,034 | 645,518 | 599,886 | | Change in Fair Value of Outstanding and Unvested Stock Awards Granted in Prior Fiscal Years | (23,168) | (15,413) | 332,101 | 493,583 | | Plus Fair Value at Vesting of Stock Awards Granted in Fiscal Year That Vested During Fiscal Year | 0 | 0 | 0 | 0 | | Plus Change in Fair Value as of Vesting Date of Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | 276,464 | 18,900 | 27,940 | (14,618) | | Less Fair Value as of Prior Fiscal Year-End of Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year | 0 | 0 | 0 | 0 | | Plus Dividends or Other Earnings Paid on Stock Awards in the Fiscal Year Prior to the Vesting Date that are not otherwise included in the Total Compensation for the Fiscal Year | $0 | $0 | $0 | $0 | | Compensation Actually Paid (CAP) | $1,215,051 | $1,405,968 | $1,862,816 | $1,874,523 |
Adjustments to Determine Compensation Actually Paid to Non-PEO NEOs
| 5 | The Peer Group TSR set forth in this table utilizes the S&P SmallCap 600 Industrials Index, which we also utilize in the stock performance graph required by Item 201(e) of Regulation S-K included in our Annual Report for the year ended September 30, 2024. The comparison assumes $100 was invested for the period starting September 30, 2020 through the last day of the subsequent fiscal years, in the Company and in the S&P SmallCap 600 Industrials Index, respectively. Historical stock performance is not necessarily indicative of future stock performance. |
Adjustments to Determine Compensation Actually Paid to Non-PEO NEOs
| 6 | We determined Adjusted EPS to be the most important financial performance measure used to link Company performance to Compensation Actually Paid to our PEO and the other executive officers in 2024, as it was in 2023. Fiscal 2024 Adjusted EPS of $4.18 equaled GAAP diluted EPS of $3.94 excluding $0.24 per share of after-tax charges, as described in the Compensation Discussion and Analysis section of this Proxy Statement. This performance measure may not have been the most important financial performance measure for one or more of fiscal years 2021 through 2022 and we may determine a different financial performance measure to be the most important financial performance measure in future years. |
Pay Versus Performance Relationships
Pay Versus Performance Relationships