DEF 14A of Winnebago Industries Inc
Filed Nov 3, 2023 · FY20230001140361-23-051281
Review the Proxy Statement and Vote in One of Four Ways
| | Page | | Pay Versus Performance Disclosure | 62 | | Equity Compensation Plan Information | 65 | | Proposal 2 – Advisory Vote to Approve the Compensation of our Named Executive Officers | 67 | | Proposal 3 – Advisory Vote on the Frequency of Future Votes on the Compensation of our Named Executive Officers | 68 | | Proposal 4 – Approval of the Amended and Restated 2019 Omnibus Incentive Plan | 69 | | Proposal 5 – Approval of the Amended and Restated Employee Stock Purchase Plan | 80 | | Proposal 6 – Ratification of the Appointment of Independent Registered Public Accountant for the Fiscal Year Ending August 31, 2024 | 85 | | Report of the Audit Committee | 86 | | Independent Registered Public Accountant’s Fees and Services | 87 | | Security Ownership of Certain Beneficial Owners and Management | 88 | | Voting Information | 90 | | Other Information | 91 | | APPENDIX A – AMENDED AND RESTATED 2019 OMNIBUS INCENTIVE PLAN | A-1 | | APPENDIX B – AMENDED AND RESTATED EMPLOYEE STOCK PURCHASE PLAN | B-1 |
Director Nominees and Continuing Directors
Director Nominees and Continuing Directors
Director Nominees and Continuing Directors
| Name | Age | Director since | Current or most recent company | Title | Independent | | Sara E. Armbruster | 52 | 2019 | Steelcase Inc. | President and Chief Executive Officer | Yes | | Christopher J. Braun | 63 | 2015 | Teton Buildings, LLC | Former Chief Executive Officer | Yes | | Kevin E. Bryant | 48 | 2021 | Evergy, Inc. | Executive Vice President and Chief Operating Officer | Yes | | William C. Fisher | 69 | 2015 | Polaris, Inc. | Former Chief Information Officer | Yes | | Michael J. Happe | 52 | 2016 | Winnebago Industries, Inc. | President and Chief Executive Officer | No | | Staci L. Kroon | 50 | 2023 | BraunAbility | President and Chief Executive Officer | Yes | | David W. Miles (Chair) | 66 | 2015 | ManchesterStory Group | Co-Founder and Managing Principal | Yes | | Richard D. Moss | 65 | 2017 | Hanesbrands, Inc. | Former Chief Financial Officer | Yes | | John M. Murabito | 64 | 2017 | Cigna Corporation | Former Executive Vice President and Chief Administrative Officer | Yes | | Jacqueline D. Woods | 61 | 2021 | Teradata Corporation | Chief Marketing Officer | Yes |
Director Nominees and Continuing Directors
| | Proxy Statement for 2023 Annual Meeting 6 |
Proposal 1 – Election of Directors
Proposal 1 – Election of Directors Our bylaws provide that our Board is comprised of between three and fifteen directors. Ms. Staci L. Kroon was elected as a Class III director at a regular meeting of the Board on October 11, 2023, at which time the size of the Board was increased to ten. The Board adopted a majority voting policy for the election of directors in uncontested elections. Under this policy, in any uncontested election of directors, if any nominee receives less than a majority of the votes cast for the nominee, that nominee will still be elected, but must tender his or her resignation to the full Board for consideration at the next regularly scheduled meeting of the Board. The Board will only not accept the tendered resignation for, in its judgment, a compelling reason. If the Board, with the affected director not participating, does not accept the resignation at the regularly scheduled meeting following the election, then the nominee will be considered elected and may serve out the term to which he or she was elected. In any contested election of directors where the number of nominees exceeds the number of available positions, strict plurality voting will apply. Based on the recommendation of the Nominating and Governance Committee, our Board has nominated Ms. Sara E. Armbruster, Mr. William C. Fisher, Mr. Michael J. Happe, and Ms. Staci L. Kroon for election to serve as Class III directors for three-year terms expiring at the annual meeting of shareholders following fiscal 2026.
Proposal 1 – Election of Directors
| ✔ | THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF EACH OF THE DIRECTOR NOMINEES. |
Proposal 1 – Election of Directors
| | Proxy Statement for 2023 Annual Meeting 19 |
Director Nominees — Class III (Term Ending 2026)
Director Nominees — Class III (Term Ending 2026)
Director Nominees — Class III (Term Ending 2026)
| Sara E. Armbruster Age 52 Director since 2019 Committees: Finance Human Resources | Skills and Qualifications: | | | | | | • | Public/Private Company CEO | • | Global Experience | | | • | Strategic Transformation | | | | | Sara E. Armbruster is President and Chief Executive Officer of Steelcase Inc., a global office furniture manufacturer, a position she has held since October 2021. Ms. Armbruster also serves on the board of directors of Steelcase. Ms. Armbruster has held several leadership positions since joining Steelcase in 2007 as Vice President of Corporate Strategy, including as Vice President, Strategy, Research and Digital Transformation and Executive Vice President. In her roles, Ms. Armbruster oversaw Steelcase’s technology efforts and was responsible for advancing the embrace of digital technologies and for digital transformation of Steelcase. Ms. Armbruster also has had responsibility for a range of innovation activities, including global design research, the design and implementation of new business models, and the development of external growth opportunities, including acquisitions and partnerships. Before joining Steelcase, Ms. Armbruster was Vice President of Business Development at Banta Corporation, a contract printing company. Ms. Armbruster brings substantial experience in strategy, innovation, information technology, and digital transformation to our Board. As a senior executive of a public company with primary responsibility in these areas, she provides valuable strategic insights and expertise with respect to growth opportunities for the Company and areas of critical business innovation. | | | |
Director Nominees — Class III (Term Ending 2026)
| William C. Fisher Age 69 Director since 2015 Committees: Audit Nominating and Governance (Chair) | Skills and Qualifications: | | | | | | • | Operations Optimization | • | Mobility Ecosystem | | | • | Global Experience | • | Technology Leader/Data & Analytics | | | • | Channel Development | | | | | William C. Fisher was the Chief Information Officer of Polaris Industries Inc., a manufacturer of power sports products, from 1999 until his retirement in 2015. During his tenure at Polaris, he also served as the General Manager of Service from 2005 until 2014 overseeing all technical, dealer, and consumer service operations. Prior to joining Polaris, Mr. Fisher was employed by MTS Systems for 15 years in various positions in information services, software engineering (applications and embedded control systems), factory automation, vehicle testing, and general management. Before that time, Mr. Fisher worked as a civil engineer for Anderson-Nichols and he later joined Autocon Industries, where he developed process control software. Mr. Fisher’s experience as Chief Information Officer at Polaris has provided substantial experience with information technology and cybersecurity issues. His experience as an engineer and in executive positions in service and consumer service operations provides valuable insight for our customer service function as well as relationships with channel partners. His familiarity with highly discretionary consumer products is a key asset as we focus on improved service and operational efficiency. | | | |
Director Nominees — Class III (Term Ending 2026)
| | Proxy Statement for 2023 Annual Meeting 20 |
Director Nominees — Class III (Term Ending 2026)
| Michael J. Happe Age 52 Director since 2016 | Skills and Qualifications: | | | | | | • | Public/Private Company CEO | • | Strategic Transformation | | | • | Marketing/Sales/Branding | • | Global Experience | | | • | Channel Development | | | | | Michael J. Happe joined Winnebago Industries in January 2016, as the President, Chief Executive Officer and a director. Mr. Happe has led a transformation of the Company into an outdoor recreation/lifestyle enterprise. Under his leadership, Winnebago Industries has grown both organically and inorganically, completed five acquisitions, including Grand Design RV, Chris-Craft, Newmar, Barletta Boats, and Lithionics Battery, and expanded its industry and geographic footprint. Winnebago Industries’ net sales, net income, RV and marine market share, and total shareholder returns have all grown significantly under Mr. Happe’s leadership, as has the Company’s commitment to corporate responsibility. He worked previously at The Toro Company, a global manufacturer of turf and landscape maintenance and development solutions, where he most recently served as an Executive Officer and Group Vice President of Toro’s Residential and Contractor business until 2015. A 19-year veteran of The Toro Company, Mr. Happe held a series of senior leadership positions throughout his career across a variety of the company’s domestic and international divisions. Mr. Happe also serves as a director for H.B. Fuller Company. His knowledge of all aspects of the Winnebago Industries business positions him well to serve on the Board. Mr. Happe’s extensive experience and positions rising in complexity and breadth at Toro, including global business affairs, as well as his director position at H.B. Fuller, brings further expertise in corporate leadership and development and execution of profitable business growth strategy. | | | |
Director Nominees — Class III (Term Ending 2026)
| Staci L. Kroon Age 50 Director since 2023 Committees: Finance Human Resources | Skills and Qualifications: | | | | | | • | Public/Private Company CEO | • | Mobility Ecosystem | | | • | Operations Optimization | | | | | Staci L. Kroon is President and Chief Executive Officer of BraunAbility, a global manufacturer of mobility vehicles and other mobility solutions, a position she has held since 2017. Ms. Kroon also serves as a director of BraunAbility. In her role at BraunAbility, she is dedicated to growing the company through mobility innovation and cultivating a purpose-driven culture and has diversified the company’s business model, completing six acquisitions and a majority stake joint venture. Before joining BraunAbility, Ms. Kroon spent 20 years at Eaton Corporation, a global power management company, holding several roles with increasing scope and complexity in operations, business development and general management before being named Executive Vice President of Eaton Business System in September 2015. Ms. Kroon brings substantial experience in operational excellence, strategic growth, and product innovation. | | | |
Director Nominees — Class III (Term Ending 2026)
| | Proxy Statement for 2023 Annual Meeting 21 |
Directors Continuing in Office — Class I (Term Ending 2024)
Directors Continuing in Office — Class I (Term Ending 2024)
Directors Continuing in Office — Class I (Term Ending 2024)
| Christopher J. Braun Age 63 Director since 2015 Committees: Audit Nominating and Governance | Skills and Qualifications: | | | | | | • | Global Experience | • | Operations Optimization | | | • | Channel Development | | | | | Christopher J. Braun has over 30 years of leadership experience encompassing manufacturing, finance and sales. Most recently, he was self-employed as a management consultant from 2014 through February 2020. He founded Teton Buildings in 2008 and held the position of CEO through 2013. His previous experience includes CEO of Teton Homes, Executive Vice President – RV Group at Fleetwood Enterprises and various senior management positions within PACCAR Inc., a manufacturer of Kenworth and Peterbilt trucks. As a recognized leader in the RV industry, Mr. Braun provides keen insights to the Board. His prior experience in the RV industry, combined with his vast manufacturing background and his role as a former CEO make him well-positioned to critically and thoughtfully review and guide the Company’s strategy. | | | |
Directors Continuing in Office — Class I (Term Ending 2024)
| David W. Miles Age 66 Director since 2015 Chair of the Board | Skills and Qualifications: | | | | | | • | Public/Private Company CEO | • | Technology Leader/Data & Analytics | | | • | Strategic Transformation | • | Public Affairs/Stakeholder Management | | | David W. Miles, a financial adviser, entrepreneur and investor, was elected as Chair of the Board in June 2019. Mr. Miles is co-founder and Managing Principal of ManchesterStory Group, an early stage venture capital firm, and founder and manager of The Miles Group, LLC, which makes direct and indirect private equity investments. He is also a director and chair of the Audit Committee of Northwest Financial Corporation. Until the company’s sale in March 2020, Mr. Miles was the principal owner of Miles Capital, Inc., an institutional asset management firm serving insurance companies, public bodies, foundations and endowments, and high net worth investors, where he worked for over 23 years. Mr. Miles served as Executive Vice President, Principal Mutual Funds, and Executive Vice President, AMCORE Financial, Inc., where he was responsible for asset management, trust, private banking, brokerage, employee benefits and insurance services. During his career, Mr. Miles has served as a director or officer of more than 60 public mutual funds with total assets exceeding $30 billion. Mr. Miles brings legal and investment transaction experience to the Board and holds a J.D. from Harvard Law School. He also brings significant expertise in financial reporting and capital allocation strategy. | | | |
Directors Continuing in Office — Class I (Term Ending 2024)
| | Proxy Statement for 2023 Annual Meeting 22 |
Directors Continuing in Office — Class I (Term Ending 2024)
| Jacqueline D. Woods Age 61 Director since 2021 Committees: Human Resources Nominating and Governance | Skills and Qualifications: | | | | | | • | Global Experience | • | Technology Leader/Data & Analytics | | | • | Marketing/Sales/Branding | | | | | Jacqueline D. Woods is the Chief Marketing Officer at Teradata Corporation, a multi-cloud data platform for enterprise analytics, where she oversees strategic marketing planning and delivery, digital and social properties, and customer experience enrichment. Ms. Woods joined Teradata from NielsenIQ, an industry leader in global measurement and data analytics, where she was the Chief Marketing and Communications Officer from 2019 to 2021. Prior to joining NielsenIQ, Ms. Woods held Chief Marketing Officer roles at IBM, a global technology company, from 2010 to 2019 and also held roles of increasing responsibility at Oracle Corporation, a computer software company, for 10 years, helping lead the company’s e-business standardization. Ms. Woods serves on the Board of Trustees for Community Reinvestment Fund USA, a not-for-profit organization dedicated to improving communities through innovative financial solutions. She also serves on board of the Greater Fairfield County Foundation, Inc., a not-for-profit organization helping under-served communities in southern Connecticut, and Avaya Holdings Corporation, a privately held multinational technology company providing workstream collaboration services. Ms. Woods brings deep expertise in all aspects of marketing, branding, pricing, customer insights and strategy. | | | |
Director Continuing in Office — Class II (Term Ending 2025)
Director Continuing in Office — Class II (Term Ending 2025)
Director Continuing in Office — Class II (Term Ending 2025)
| Kevin E. Bryant Age 48 Director since 2021 Committees: Audit Finance (Chair) | Skills and Qualifications: | | | | | | • | Financial Expert | • | Strategic Transformation | | | • | Operations Optimization | | | | | Kevin E. Bryant is Executive Vice President and Chief Operating Officer of Evergy, Inc., an electric utility company, a position he has held since June 2018. In this role, Mr. Bryant has management responsibility for utility operations, including generation operations and generation services, transmission operations, transmission and delivery services, distribution operations, resource planning, safety and training. Since joining Evergy in 2003, Mr. Bryant has held several positions that have drawn on his strategic insight and finance and marketing experience. Prior to his current position, Mr. Bryant served as Vice President of Investor Relations and Treasurer, Vice President of Strategic Planning and President of KLT Inc., a subsidiary of Evergy. He was named Executive Vice President Finance & Strategy and Chief Financial Officer in 2015. Before joining Evergy, Mr. Bryant held roles at THQ, Inc., UBS Group AG and Hallmark Cards, Inc. Mr. Bryant also serves on the members committee of the Southwest Power Pool and on the board of directors of the National Association of Corporate Directors, Midwest Chapter. Mr. Bryant brings financial, operational, business development and energy platform expertise to the Company. | | | |
Director Continuing in Office — Class II (Term Ending 2025)
| | Proxy Statement for 2023 Annual Meeting 23 |
Director Continuing in Office — Class II (Term Ending 2025)
| Richard (Rick) D. Moss Age 65 Director since 2017 Committees: Audit (Chair) Finance | Skills and Qualifications: | | | | | | • | Financial Expert | • | Strategic Transformation | | | • | Operations Optimization | | | | | Richard (Rick) D. Moss most recently served as the Chief Financial Officer of Hanesbrands, Inc., a leading global basic apparel manufacturer, from 2011 until his retirement in December 2017. Mr. Moss joined Hanesbrands as Senior Vice President – Finance and Treasurer and had several roles increasing in scope and complexity prior to becoming Chief Financial Officer. Prior to his roles at Hanesbrands, Mr. Moss served as Chief Financial Officer of Chattem Inc., a consumer products company. Mr. Moss has been a director of Nature’s Sunshine Products, Inc. since May 2018 and was appointed as Chairman in May 2022. Mr. Moss has been a director of Hydrofarm Holdings Group, Inc. since November 2020 and also serves on the board of Piedmont Opera, a not-for-profit organization. With his many years of experience as a chief financial officer and executive at a public company, Mr. Moss provides the Board expertise in financial and strategic planning, mergers, acquisitions and integration of businesses following mergers and acquisitions, as well as capital allocation strategies and complex financial issues. | | | |
Director Continuing in Office — Class II (Term Ending 2025)
| John M. Murabito Age 64 Director since 2017 Committees: Human Resources (Chair) Nominating and Governance | Skills and Qualifications: | | | | | | • | Global Experience | • | Strategic Transformation | | | • | Human Capital Management/Compensation/DE&I | | | | | John M. Murabito most recently served as Executive Vice President at Cigna Corporation, a global healthcare services company, from 2003 until his retirement in April 2022. Mr. Murabito joined Cigna as its Chief Human Resources Officer and served in that role for 18 years before becoming Chief Administrative Officer in 2021. In that role, he had oversight of human resources, enterprise marketing, security and aviation, and diversity, equity & inclusion, civic affairs, and the Cigna Foundation, of which he was the president. Earlier in his career, he served as Senior Vice President of Human Resources and Corporate Services at the Monsanto Company. His background includes over 40 years of extensive related experience with the Frito-Lay division of PepsiCo, Symbion, Inc., and The Trane Company. Mr. Murabito is a Fellow of the National Academy of Human Resources and serves as Chair of the Board. He also chairs the Board of Trustees for his alma mater, Augustana College. Mr. Murabito brings strong executive business leadership and talent management expertise to our Board as a former senior executive of a Fortune 20 public company. He provides valuable insights on human capital, executive compensation, leadership development and succession planning to the Board. | | | |
Director Continuing in Office — Class II (Term Ending 2025)
| | Proxy Statement for 2023 Annual Meeting 24 |
Director Compensation
Director Compensation The Board approves non-employee director compensation based on recommendations of the Human Resources Committee. The Human Resources Committee has engaged Semler Brossy to analyze the total compensation paid to the Board. Semler Brossy assisted the committee in reviewing the market data and made recommendations regarding the types and amounts of compensation we pay our non-employee directors. Based on the committee’s review of our director compensation program with Semler Brossy, the committee recommended and the Board approved, an increase to certain components of the non-employee directors’ compensation, effective August 27, 2023, as described below. Employee directors receive no additional compensation for serving on the Board or its committees. Non-employee directors receive the following for their service on the Board:
Director Compensation
| Compensation Element | | Fiscal 2023 | Fiscal 2024 | | Annual Board Cash Retainer | | $90,000 | $90,000 | | • Payable in quarterly installments in arrears | | | | | Annual Board/New Board Member Equity Retainer | | $125,000 | $150,000 | | • Granted in the form of restricted stock units for the upcoming year | | | | | Annual Board Chair Cash Retainer | | $125,000 | $125,000 | | • Payable in quarterly installments in arrears | | | | | Annual Committee Chair Cash Retainer | Audit Committee | $15,000 | $20,000 | | • Payable in quarterly installments in arrears | Other Committees | $10,000 | $15,000 |
Director Compensation
Director equity awards are granted prospectively for the upcoming year. This means that any new directors will receive a prorated award at the next regularly scheduled Board meeting, if the next regularly scheduled Board meeting is not the meeting at which annual awards are granted. Directors who joined the Board before we began prospectively granting equity awards will receive an award of the annual grant prior to separation of service from the Board that provides for accelerated vesting of the award upon retirement from the Board at the conclusion of his or her term.
Director Compensation
| | Proxy Statement for 2023 Annual Meeting 25 |
Director Compensation Table
Director Compensation Table The following table sets forth the total compensation paid to each non-employee director for fiscal 2023, other than reimbursement for travel expenses:
Director Compensation Table
| Director | Fees Earned or Paid in Cash(1)(2) ($) | Stock Awards(3) ($) | All Other Compensation(4) ($) | Total ($) | | Sara E. Armbruster | 90,000 | 125,000 | — | 215,000 | | Christopher J. Braun | 90,000 | 125,000 | — | 215,000 | | Kevin E. Bryant | 100,000 | 125,000 | — | 225,000 | | Robert M. Chiusano(5) | 22,500 | 125,000 | — | 147,500 | | William C. Fisher | 100,000 | 125,000 | — | 225,000 | | David W. Miles | 215,000 | 125,000 | — | 340,000 | | Richard D. Moss | 105,000 | 125,000 | — | 230,000 | | John M. Murabito | 100,000 | 125,000 | — | 225,000 | | Jacqueline D. Woods | 90,000 | 125,000 | — | 215,000 |
Director Compensation Table
| (1) Our directors may elect to receive retainer fees in cash or may defer their retainer fees into the Directors’ Deferred Plan. |
Director Compensation Table
| (2) During fiscal 2023, the Chair of the Board received an additional $125,000 per year, the Audit Committee Chair received an additional $15,000 annual retainer, and the Chairs of the other Board committees received an additional $10,000 annual retainer, each of which are reflected in these figures. |
Director Compensation Table
| (3) These awards are valued at $56.09 per share, the closing stock price on October 11, 2022, the date of the restricted stock unit grant. |
Director Compensation Table
| (4) None of the directors received perquisites and other personal benefits in an aggregate amount of $10,000 or more. |
Director Compensation Table
| (5) Mr. Chiusano served on the Board until his retirement upon the expiration of his term at the Company’s 2022 annual meeting of shareholders. Mr. Chiusano joined the Board before the Company began prospectively granting equity awards. As a result, Mr. Chiusano received the annual equity award in October 2022, which provided for accelerated vesting of the award upon his retirement. |
Director Compensation Table
| | Proxy Statement for 2023 Annual Meeting 26 |
Executive Compensation Philosophy and Program Objectives
| ■ | Provide fair and competitive compensation |
Executive Compensation Philosophy and Program Objectives
| Fiscal 2023 Performance Results | | The Company’s financial results tied to annual incentive compensation measures for fiscal 2023 are set forth below. | | |
Executive Compensation Philosophy and Program Objectives
| | Incentive Plan | | Performance | | | Measure | Annual(3) | Long-Term(4) | 1-year | 3-year(5) | | Net Revenue ($ in thousands)(1) | ✔ | | $3,532,955 | N/A | | Operating Income ($ in thousands)(1) | ✔ | | $312,562 | N/A | | Net Working Capital(1) | ✔ | | 18.8% | N/A | | Average Return on Invested Capital (Incentive ROIC)(2) | | ✔ | N/A | 12.1% | | Incentive Earnings Per Share (Incentive EPS)(2) | | ✔ | N/A | $7.24 |
Executive Compensation Philosophy and Program Objectives
| (1) When determining the level of actual performance for the 2023 Officer Incentive Compensation Plan (also called the Annual Incentive Plan or OICP), the committee excluded the impact of certain events not contemplated when establishing the initial targets. The metrics were adjusted for estimated productivity loss from supply chain disruption due to the Mercedes-Benz AG chassis recall in the first half of fiscal 2023. |
Executive Compensation Philosophy and Program Objectives
| (2) When determining the level of actual performance for the fiscal 2021-2023 three-year performance period of the Long-Term Incentive Program (LTIP), the committee excluded the impact of certain events not contemplated when establishing the initial targets. The Incentive EPS metric was adjusted from diluted EPS to exclude the following: (i) pretax acquisition-related costs related to the Barletta and Lithionics Battery acquisitions, (ii) pretax earnout valuation adjustments related to the Barletta acquisition, (iii) pretax litigation reserves, (iv) impact of convertible notes, including dilution impact economically offset by a call spread overlay, certain pretax interest expense, and/or assumed dilution as a result of the adoption of ASU 2020-06 in fiscal 2023, and (v) the tax impact of the aforementioned adjustments, as applicable. |
Executive Compensation Philosophy and Program Objectives
| (4) The 2021-2023 LTIP plan metrics consist of 50% Incentive ROIC and 50% Incentive EPS. |
Executive Compensation Philosophy and Program Objectives
| (5) Relates to the fiscal 2021-2023 performance period of the 2021-2023 LTIP plan. The full details of the plan and performance are outlined in the “Payout of Fiscal 2021-2023 LTIP Cycle” section of this proxy statement. |
Impact of Performance on Fiscal 2023 Compensation
| Performance Objective | | Link to 2023 Compensation | | Financial | ■ | For Messrs. Happe and Hughes and Ms. Bogart, 75% of the 2023 annual incentive awards were based on achieving targeted levels of net revenue (40%), operating income (50%), and net working capital (10%) at the enterprise level. For Mr. Bower, 75% of the 2023 annual incentive awards was based on achieving targeted levels of net revenue (40%), operating income (50%), and net working capital (10%) at the business unit level. The other 25% was tied to individual metrics aligned with goals deemed important to advancing business objectives. | | | ■ | Pursuant to the terms of his employment agreement, Mr. Clark’s incentive compensation is tied 100% to the pretax net income of the Grand Design business. | | | ■ | Payout for the fiscal 2021-2023 LTIP awards was tied 50% to our Incentive ROIC and 50% to our Incentive EPS. | | Total Shareholder Returns | ■ | With the exception of Mr. Clark, 54% of our NEO compensation on average was delivered in the form of Company equity awards (75% in the case of our CEO). | | | ■ | 15% of the annual equity grants made in fiscal 2023 to all NEOs, excluding Mr. Clark, were in the form of stock options, which only have value to the executive if the value of the Company grows for our shareholders. |
Impact of Performance on Fiscal 2023 Compensation
Based on our performance as measured against predefined goals, the 2021-2023 LTIP paid out at 120.3% of target, and the fiscal 2023 Annual Incentive Plan paid out as follows for all NEOs, except for Mr. Clark: 19.5% of target for Messrs. Happe and Hughes and Ms. Bogart, and Mr. Bower did not receive a payout. Mr. Clark received a cash and stock incentive award of $6,099,325 for fiscal 2023, of which $5,184,426 was paid in cash and $914,899 was paid in restricted stock units for fiscal 2023 performance. The cash incentive was paid in four quarterly installments with respect to fiscal 2023, and the restricted stock units were issued in October 2023.
Elements of Fiscal 2023 Compensation
| | Element | Mechanics | Rationale | | Paid in Cash | Salary | Weekly payments Values correspond to experience and job scope | Provides competitive fixed pay to attract employees | | | Officers Incentive Compensation Plan (OICP) | Annual payout tied to performance against pre-determined metrics and goals across a one-year performance period For fiscal 2023, the metrics for Messrs. Happe and Hughes and Ms. Bogart included: • 75% financial objectives (enterprise level) ○ 40% Net Revenue ○ 50% Operating Income ○ 10% Net Working Capital • 25% Individual Objectives For fiscal 2023, the metrics for Mr. Bower included: • 75% financial objectives (business unit level) ○ 40% Net Revenue ○ 50% Operating Income ○ 10% Net Working Capital • 25% Individual Objectives Payouts range from 0%-200% of a pre-determined target value | Incentivizes achievement of key annual objectives at an enterprise-wide or individual business unit level, driving progress towards achievement of long-term initiatives | | Paid in Equity | Performance Share Units / Long-Term Incentive Program (LTIP) – Annual | 50% of all annual equity awards For the fiscal 2023-2025 performance period, payouts are tied to performance against pre-determined goals across a three-year performance period The metrics consist of: • 50% Incentive ROIC • 50% Incentive EPS Payouts range from 0%-200% of a pre-determined target value | Rewards for achievement of specific long-term financial objectives Aligns NEOs’ interest with long-term shareholder value creation | | | Stock Options – Annual | 15% of all annual equity awards Stock options can be exercised over 10 years and vest over three years in equal installments | Aligns NEOs’ interest with long-term shareholder value creation as measured by appreciation in stock price from the date of grant | | | Restricted Stock Units – Annual | 35% of all annual equity awards Restricted stock units vest over three years in equal installments | Aligns NEOs’ interest with long-term shareholder value creation Encourages executive retention |
Elements of Fiscal 2023 Compensation
In connection with our acquisition of Grand Design, we entered into an employment agreement with Mr. Clark in November 2016, which was most recently amended on October 17, 2023 to extend Mr. Clark’s employment through August 31, 2028. The current employment agreement provides for an increase in Mr. Clark’s annual base salary from $400,000 to $500,000. Under both the previous and current employment agreements, Mr. Clark is eligible to receive an incentive bonus pursuant to the pre-existing Grand Design Management Incentive Plan (the Grand Design MIP). For fiscal years 2021 – 2023, payment under the Grand Design MIP is 100% dependent on pretax net income performance of the Grand Design business. Any incentive bonus earned under the Grand Design MIP was payable as follows: 90% in cash and 10% in restricted stock units (fiscal 2021); and 85% in cash and 15% in restricted stock units (fiscal 2022 and fiscal 2023). Any restricted stock units issued under the Grand Design MIP are subject to a three-year pro-rata vesting schedule. For fiscal years 2024 through 2027, payment under the Grand Design MIP is 90% dependent on pretax net income performance of the Grand Design business and 10% dependent on Grand Design’s performance against an operating target set by the Company. Any incentive bonus earned under the Grand Design MIP during this period is payable 100% in cash. Mr. Clark is not eligible to participate in any other Winnebago Industries cash or stock incentive program.
Performance-based Pay Mix
Performance-based Pay Mix Consistent with the committee’s commitment to a strong, positive link among our business objectives, our performance and our executive compensation practices, we have placed a significant emphasis on pay “at risk,” based on the achievement of established business objectives and shareholder value creation. In fiscal 2023, 86% of our CEO’s total target compensation and 71% of the average total target compensation of our other NEOs was performance-based pay, including annual incentive compensation and annual equity grants, with a significant emphasis on long-term performance and shareholder value creation. The following charts illustrate the components of our CEO’s fiscal 2023 total target compensation, as well as the components of the average total target compensation for our other NEOs in fiscal 2023, excluding Mr. Clark. Total target compensation includes fiscal 2023 annualized base salary, target annual incentive compensation, and the grant date fair value of the annual equity grants made in fiscal 2023, as reported in the Summary Compensation Table (and excludes benefits and other compensation).
Role of the Human Resources Committee
Role of the Human Resources Committee The Human Resources Committee is responsible for reviewing and approving, on an annual basis, the corporate goals and objectives with respect to the compensation of all of our executive officers, as described in the committee’s charter. The committee relies on its own review and the advice of its independent compensation consultant in establishing executive officer pay. The committee seeks the input of the CEO in making executive officer pay decisions for all executives other than himself, but the committee makes all decisions. In October 2022, the committee approved annual incentive performance objectives for fiscal 2023 based upon the business plan for the year. In October 2022, the committee granted long-term incentive awards to our executive officers under the 2019 Omnibus Incentive Plan (the 2019 Plan), which was approved by the shareholders at the 2018 annual meeting, including annual LTIP performance share units, stock options, and restricted stock units. After the completion of fiscal 2023, the committee (i) approved the 2023 annual incentives for our NEOs based on achievement of the performance objectives established at the beginning of the year and (ii) certified achievement of performance objectives with respect to the LTIP performance share unit awards granted to then-current executives in fiscal 2021 that had a performance period running from fiscal 2021-2023.
Role of the Compensation Consultant
Role of the Compensation Consultant The Human Resources Committee retained Semler Brossy as its independent executive compensation consultant for fiscal 2023. Retained by and reporting directly to the committee, Semler Brossy provided the committee with assistance in evaluating our executive compensation programs and policies, and, where appropriate, assisted with the revision of elements of the programs. Additionally, Semler Brossy performed the following activities to support the committee:
Role of the Compensation Consultant
| ■ | Reviewed annual and long-term incentive designs and assisted with determination of annual and long-term incentive awards, including fiscal 2023 payouts |
Role of the Compensation Consultant
| ■ | Reviewed the total compensation program, including competitive peer group analysis and analysis of executive pay levels in relation to broader market survey data |
Role of the Compensation Consultant
| ■ | Reviewed information provided to the committee by management |
Role of the Compensation Consultant
| ■ | Developed recommendations with respect to CEO compensation decisions and provided advice to the committee on the compensation decisions affecting all executives, including the NEOs |
Role of the Compensation Consultant
| ■ | Attended and participated in committee meetings as requested by the committee |
Role of the Compensation Consultant
| ■ | Reported on compensation trends and best practices, plan design, and the reasonableness of individual compensation awards |
Role of the Compensation Consultant
| ■ | Assisted the committee in reviewing the Board’s compensation and assessing its competitiveness relative to market |
Role of the Compensation Consultant
| ■ | Assisted the committee in assessing the extent to which the Company’s compensation policies and practices promote reasonable and appropriate risk-taking behavior by management and avoid excessive risk-taking behavior |
Role of the Compensation Consultant
| ■ | Provided a consultant independence and conflicts of interest assessment |
Role of the Compensation Consultant
| ■ | Met with the committee and/or its members without management present |
Role of the Compensation Consultant
Semler Brossy did not provide any services to us other than those detailed above. The committee determined that no conflicts of interest exist with respect to Semler Brossy serving as an advisor to the committee. In making this determination, the committee considered various factors, including those set forth in the SEC’s and NYSE’s rules.
Role of the Compensation Consultant
| | Proxy Statement for 2023 Annual Meeting 35 |
Role of Management
| ■ | Assisting the CEO in making preliminary recommendations of base salary structure, annual and long-term (equity) program design and target award levels for the NEOs and other employees eligible to receive annual incentive awards |
Role of Management
| ■ | Preparing tally sheets outlining current pay opportunities and potential value of severance under various termination scenarios |
Market Competitiveness Review
Market Competitiveness Review When setting fiscal 2023 compensation, the Human Resources Committee focused on trying to set pay levels, in the aggregate, within a competitive range of the market median. Some roles may be higher or lower in the competitive range based on performance, tenure in role, or other internal considerations. Competitive market data is only one of several factors considered by the committee in setting executive compensation levels. The committee establishes an individual annual bonus and equity incentive target opportunity for each NEO based on the committee’s evaluation of the executive’s experience, level and scope of responsibility and individual performance. Actual cash compensation may be more or less than the target opportunity as a result of performance under the incentive plan. Realized compensation from our equity-based awards may be more or less than the target opportunity as a result of our performance relative to the LTIP measures and our stock price performance. In setting compensation, the committee compares base salaries, annual incentive opportunities and long-term compensation for the NEOs to a peer group of similarly sized companies (which we refer to collectively as our compensation peers). For fiscal 2023, the committee used the following set of companies that were determined to have similarly sized revenues and market values as our compensation peers.
Market Competitiveness Review
| Compensation Peers | | | Altra Industrial Motion | Meritor | | American Axle | Oshkosh Corporation | | Brunswick Corporation | Patrick Industries | | Crane Co. | Polaris | | Dana Incorporated | REV Group | | Donaldson Company, Inc. | The Timken Company | | Harley-Davidson, Inc. | The Toro Company | | Hyster-Yale | Wabash National | | LCI Industries | |
Market Competitiveness Review
Based on a review conducted by Semler Brossy, the committee removed Meritor from the peer group for setting compensation levels for fiscal 2024, after that company was acquired in 2022. In addition to peer group data, Semler Brossy collected market data from compensation surveys for executive positions where the scope of responsibilities for the Company’s executives was not comparable to the peer group named executive officers and where general industry survey data provided a better match for comparable positions in the market.
Base Salary
| ■ | Competitive market data provided by the committee’s independent compensation consultant |
Annual Incentive Plan — Officers’ Incentive Compensation Plan (OICP)
Annual Incentive Plan — Officers’ Incentive Compensation Plan (OICP) The OICP is designed to motivate and reward the successful completion of our annual performance goals as set by the Human Resources Committee. The amount of the participants’ incentive compensation earned for a given fiscal year is calculated under the OICP to be in direct proportion to our financial performance expressed as a percentage (financial factor) against compensation targets for each participant as determined by the committee. OICP awards are earned to the extent we meet or exceed annual financial targets as well as business unit and individual performance goals. Each NEO, except for Mr. Clark, is eligible for a target award, denominated as a percentage of fiscal 2023 base salary. NEOs may earn from 0% of the target award under the OICP up to a maximum of 200% of the target award. In setting the target award percentages for the NEOs, the committee considers competitive data in the compensation peer studies, individual performance evaluations, and internal equity factors.
Fiscal 2023 OICP
For Mr. Bower, to continue to execute on an agreed upon strategy focusing on product innovation, quality and operations, shopping experience, and ownership experience. In addition, a strong focus on our employee culture and experience to include employee safety, engagement, and overall retention and development. In October of 2023, the committee (i) evaluated performance against the established OICP financial performance metrics and determined that the Net Revenue, Operating Income and Net Working Capital performance met the threshold metrics in the first six-month period, but did not meet the threshold metrics for the second six-month or full 12-month period, resulting in a 19.5% payout for Messrs. Happe and Hughes and Ms. Bogart based on enterprise-wide performance, and no payout for these metrics for Mr. Bower based on his applicable business unit performance and (ii) assessed the performance of each of the NEOs against his or her individual objectives to determine the OICP payout achieved by him or her as set forth below. During the first quarter of fiscal year 2023 our major supplier, Mercedes-Benz AG, issued a recall of certain chassis, which prevented us and others across our industry from shipping, selling, or delivering any affected products. This recall had meaningful impacts on our first quarter productivity and financial results, which were outside of management’s control. When determining the level of our actual performance for the fiscal year 2023 OICP, the committee deemed this an appropriate adjustment, and therefore excluded, the estimated impact of this event which was not contemplated when establishing the initial targets. The tables below reflect the fiscal 2023 OICP financial metric payout thresholds and targets for each period as well as our performance against these metrics ($ in thousands): Enterprise-Wide Financial Performance Metrics (75% of the OICP for Messrs. Happe and Hughes and Ms. Bogart) for the Full 12-Month Fiscal Year Period(1)(2)(3)
Fiscal 2023 OICP
| Metric | Weight | Threshold (25% Payout) | Target (100% Payout) | Maximum (200% Payout) | Fiscal 2023 Performance | Actual Payout % (Weighted) | | Net Revenue | 40.0% | $3,689,900 | $4,254,200 – 4,427,900 | $4,775,200 | $3,532,955 | 0.0% | | Operating Income | 50.0% | $339,100 | $444,600 – 459,600 | $519,900 | $312,562 | 0.0% | | Net Working Capital | 10.0% | 14.8% | 13.1% – 12.6% | 11.6% | 18.8% | 0.0% | | Total Payout Percentage | | | | | | 0.0% | | 40% of Total Percentage | | | | | | 0.0% |
Fiscal 2023 OICP
| (1) Each of the NEOs, other than Mr. Clark, also has 25% of his or her target bonus opportunity tied to individualized annual objectives, which are assessed by the CEO (or, the committee, in the case of the CEO), and the proposed bonus amount is approved by the committee. |
Fiscal 2023 OICP
| (2) Mr. Bower’s financial performance is based upon the Winnebago Outdoors business unit and the financial performance metrics are weighted: (1) 40% net revenue; (ii) 50% operating income; and (iii) 10% net working capital. |
Fiscal 2023 OICP
| Metric | Weight | Threshold (25% Payout) | Target (100% Payout) | Maximum (200% Payout) | Fiscal 2023 Performance | Actual Payout % (Weighted) | | Net Revenue | 40.0% | $1,687,500 | $1,945,600 – 2,025,100 | $2,183,900 | $1,861,262 | 30.2% | | Operating Income | 50.0% | $146,900 | $193,300 – 198,300 | $225,200 | $174,517 | 34.8% | | Net Working Capital | 10.0% | 14.2% | 12.6% – 12.1% | 11.1% | 15.4% | 0.0% | | Total Payout Percentage | | | | | | 65.0% | | 30% of Total Percentage | | | | | | 19.5% |
Fiscal 2023 OICP
| (1) Each of the NEOs, other than Mr. Clark, also has 25% of his or her target bonus opportunity tied to individualized annual objectives, which are assessed by the CEO (or, the committee, in the case of the CEO), and the proposed bonus amount is approved by the committee. |
Fiscal 2023 OICP
| (2) Mr. Bower’s financial performance is based upon the Winnebago Outdoors business unit and the financial performance metrics are weighted: (i) 40% net revenue, (ii) 50% operating income and (iii) 10% net working capital. |
Fiscal 2023 OICP
| Metric | Weight | Threshold (25% Payout) | Target (100% Payout) | Maximum (200% Payout) | Fiscal 2023 Performance | Actual Payout % (Weighted) | | Net Revenue | 40.0% | $2,002,400 | $2,308,600 – 2,402,800 | $2,591,300 | $1,671,693 | 0.0% | | Operating Income | 50.0% | $192,200 | $251,300 – 261,300 | $294,700 | $138,046 | 0.0% | | Net Working Capital | 10.0% | 14.5% | 12.9% – 12.4% | 11.4% | 17.9% | 0.0% | | Total Payout Percentage | | | | | | 0.0% | | 30% of Total Percentage | | | | | | 0.0% |
Fiscal 2023 OICP
| (1) Each of the NEOs, other than Mr. Clark, also has 25% of his or her target bonus opportunity tied to individualized annual objectives, which are assessed by the CEO (or, the committee, in the case of the CEO), and the proposed bonus amount is approved by the committee. |
Fiscal 2023 OICP
| (2) Mr. Bower’s financial performance is based upon the Winnebago Outdoors business unit and the financial performance metrics are weighted: (i) 40% net revenue, (ii) 50% operating income and (iii) 10% net working capital. |
Fiscal 2023 OICP
| | Actual Total Financial Payout % (Weighted) | | Total Fiscal Year Financial Performance Metrics Payout Percentage | 19.5% |
Fiscal 2023 OICP
| (1) Each of the NEOs, other than Mr. Clark, also has 25% of his or her target bonus opportunity tied to individualized annual objectives, which are assessed by the CEO (or, the committee, in the case of the CEO), and the proposed bonus amount is approved by the committee. |
Fiscal 2023 OICP
| (2) Mr. Bower’s financial performance is based upon the Winnebago Outdoors business unit and the financial performance metrics are weighted: (i) 40% net revenue, (ii) 50% operating income and (iii) 10% net working capital. |
Fiscal 2023 OICP
| (3) This represents the combined total payout results for the full-year performance period and the two six-month performance periods. |
Fiscal 2023 OICP
| | | Fiscal 2023 Target OICP | | Fiscal 2023 Actual OICP | | | Name | Fiscal 2023 Eligible Earnings | % of Salary | Target Award | % of Target | Payout | | Michael J. Happe | $1,050,000 | N/A(1) | $1,200,000 | 45.9 | $550,500 | | Bryan L. Hughes | 575,000 | 90.0% | 517,500 | 47.1 | 243,872 | | Stacy L. Bogart | 512,000 | 80.0% | 409,600 | 47.1 | 193,024 | | Huw S. Bower | 592,000 | 90.0% | 532,800 | 27.5 | 146,520 | | Donald J. Clark(2) | N/A | N/A | N/A | N/A | N/A |
Fiscal 2023 OICP
| (2) Mr. Clark does not participate in the OICP. For fiscal 2023, Mr. Clark received an incentive bonus of $6,099,325 under the Grand Design MIP. Mr. Clark’s incentive under such plan is calculated as 3.5% of the pretax net income of Grand Design (before taking into account any bonus payments thereunder). |
Fiscal 2023 Equity Awards
Fiscal 2023 Equity Awards We recognize long-term incentive opportunity as an important element of the total executive compensation program for NEOs. Long-term incentives are intended to retain and motivate executives and to encourage a strong link between management objectives and long-term shareholder interests. In fiscal 2023 we awarded long-term incentives under our 2019 Plan in the form of annual LTIP performance share units, restricted stock units and stock options.
LTIP / Performance Share Units
LTIP / Performance Share Units Each year, the committee establishes a three-year performance plan to promote our long-term growth and profitability and to attract and retain executives by providing them an opportunity for an incentive award consisting of performance shares of the Company’s common stock. The amount of an NEO’s performance share incentive compensation for the three-year period is calculated to be in direct linear proportion to our measured financial performance expressed as a percentage against compensation targets as approved by the committee. In general, the awards are based upon our financial performance as measured against the specific three-year plan approved by the committee. The committee approved financial measurements and weightings for each specific three-year plan (as set forth in the following chart). For the fiscal 2023-2025 LTIP performance share units, the committee selected the following Company performance metrics for Messrs. Happe, Hughes and Bower and Ms. Bogart:
LTIP / Performance Share Units
| Metric | Weight | | Incentive ROIC | 50% | | Incentive EPS | 50% |
LTIP / Performance Share Units
The Incentive ROIC metric was adjusted for the LTIP to exclude the following: (i) costs associated with the acquisition of Lithionics Battery and (ii) amortization. The Incentive EPS metric was adjusted from diluted EPS to exclude the following: (i) pretax acquisition-related costs related to the Lithionics Battery acquisition, (ii) pretax amortization, (iii) impact of convertible notes, including dilution impact economically offset by a call spread overlay, certain pretax interest expense, and/or assumed dilution as a result of the adoption of ASU 2020-06 in fiscal 2023, and (iv) the tax impact of the aforementioned adjustments, as applicable.
LTIP / Performance Share Units
| | Proxy Statement for 2023 Annual Meeting 41 |
LTIP / Performance Share Units
Given the financial challenges of establishing a three-year performance plan in a cyclical industry, the committee decided to separate the fiscal 2023-2025 LTIP into four measurement periods. Each of these four measurement periods has the financial performance metrics described above with performance goals set at the beginning of the three-year performance period. The measurement periods and associated plan weighting are indicated below:
LTIP / Performance Share Units
| Measurement Period | Weight | | Period 1: fiscal 2023 (financial performance measured against established fiscal 2023 financial plan) | 25% | | Period 2: fiscal 2023-2024 growth (financial performance measured against established fiscal 2023-2024 financial growth rates which contribute to overall fiscal 2023-2025 financial plan) | 25% | | Period 3: fiscal 2024-2025 growth (financial performance measured against established fiscal 2024-2025 financial growth rates which contribute to overall fiscal 2024-2025 financial plan) | 25% | | Period 4: fiscal 2023-2025 (financial performance measured against established fiscal 2025 financial plan) | 25% |
LTIP / Performance Share Units
Following the completion of each of these measurement periods, the results are computed, and the payout results are “banked” until the end of Period 4. Employees must be employed by the Company on the date of payout, following the end of Period 4, to receive any payout. The number of performance shares that may be earned range from 0% to 200% of the target share amount.
Restricted Stock Units
Restricted Stock Units In fiscal 2023, NEOs were granted restricted stock units that vest in three equal annual installments, beginning on the first anniversary of the grant date.
Stock Options
Stock Options In fiscal 2023, NEOs were granted stock options that vest over three years in equal installments, beginning on the first anniversary of the grant date, and can be exercised over 10 years.
Fiscal 2023 Awards
| | Annual Awards | | | | | | | Name | LTIP / Performance Shares (50%)(1) | Restricted Stock Units (35%) | Stock Options (15%) | Fiscal 2023 | Fiscal 2022 | % Increase/ Decrease(1) | | Michael J. Happe | $2,499,987 | $1,750,008 | $749,992 | $4,999,988 | $4,199,956 | 19.0%(2) | | Bryan L. Hughes | 503,127 | 352,189 | 150,942 | 1,006,258 | 880,028 | 14.3 | | Stacy L. Bogart | 383,992 | 268,783 | 115,199 | 767,975 | 710,508 | 8.1 | | Huw S. Bower | 532,799 | 372,942 | 159,847 | 1,065,589 | 1,019,557 | 4.5 | | Donald J. Clark(3) | N/A | 914,899 | N/A | 914,899 | 1,958,594 | (53.3) |
Fiscal 2023 Awards
| (1) To perform this calculation, we assumed that the LTIP/performance share unit awards for fiscal 2023 and fiscal 2022 were earned at target. |
Fiscal 2023 Awards
| (2) The committee approved the increase in the target value of equity incentives awards granted to these NEOs in fiscal 2023 based on a review of each NEO’s target value of equity incentive awards as compared to the peer group, market data, and individual performance. |
Fiscal 2023 Awards
| (3) Under the terms of Mr. Clark’s employment agreement, for fiscal 2023 and 2022, he received 15% of this Grand Design MIP award delivered in the form of restricted stock units. |
Payout of the Fiscal 2021-2023 LTIP Cycle
Payout of the Fiscal 2021-2023 LTIP Cycle For the fiscal 2021-2023 LTIP performance share units, the committee used the metrics of Incentive ROIC and Incentive EPS for each of the following performance periods: (i) Period 1: fiscal 2021; (ii) Period 2: fiscal 2021-2022 growth (financial performance measured against established 2021-2022 financial growth rates which contribute to the overall fiscal 2021-2022 financial plan); (iii) Period 3: fiscal 2022-2023 growth (financial performance measured against established 2022-2023 financial growth rates which contribute to the overall fiscal 2022-2023 financial plan); and (iv) Period 4: fiscal 2021-2023 (financial performance measured against established fiscal 2023 plan). The awards were determined based on our performance against these metrics. The payout scale provided for a minimum award of 0% of the shares granted and a maximum award of 200% of the shares granted. The table below reflects our performance against these metrics and the amount paid to eligible NEOs under the fiscal 2021-2023 LTIP performance share units:
Payout of the Fiscal 2021-2023 LTIP Cycle
| Performance Period | Weight | Metric | Weight | Threshold (25% Payout) | Target (100% Payout) | Maximum (200% Payout) | Performance | Actual Payout % | | Period 1(1) | 25% | Incentive ROIC | 50.0% | 9.6% | 11.4% - 12.6% | 13.8% | 20.3% | 200.0% | | | | Incentive EPS | 50.0% | $3.50 | $4.14 - $4.58 | $5.01 | $8.66 | 200.0% | | | | Payout Percentage | | | | | | 200.0% | | | | Weighted Payout Percentage | | | | | | 50.0% | | Period 2(2) | 25% | Incentive ROIC | 50.0% | 17.0% | 20.2% - 22.4% | 24.5% | 25.9% | 200.0% | | | | Incentive EPS | 50.0% | $10.39 | $10.70 - $10.95 | $11.15 | $12.39 | 200.0% | | | | Payout Percentage | | | | | | 200.0% | | | | Weighted Payout Percentage | | | | | | 50.0% | | Period 3(3) | 25% | Incentive ROIC | 50.0% | 21.5% | 25.6% - 28.2% | 30.9% | 13.3% | 0.0% | | | | Incentive EPS | 50.0% | $14.87 | $15.30 - $15.67 | $15.95 | $6.07 | 0.0% | | | | Payout Percentage | | | | | | 0.0% | | | | Weighted Payout Percentage | | | | | | 0.0% | | Period 4(4) | 25% | Incentive ROIC | 50.0% | 11.1% | 13.2% - 14.6% | 16.0% | 12.1% | 60.7% | | | | Incentive EPS | 50.0% | $5.51 | $6.55 - $7.23 | $7.92 | $7.24 | 101.4% | | | | Payout Percentage | | | | | | 81.1% | | | | Weighted Payout Percentage | | | | | | 20.3% | | Total Payout Percentage | | | | | | | | 120.3% |
Payout of the Fiscal 2021-2023 LTIP Cycle
| (1) When determining the level of actual performance for Period 1, the committee excluded the impact of certain events not contemplated when creating the initial targets. The Incentive ROIC metric was adjusted for the LTIP to exclude the acquisition-related costs associated with the Barletta acquisition. The Incentive EPS metric was adjusted from diluted EPS to exclude the following: (i) pretax acquisition-related costs associated with the Barletta acquisition, (ii) pretax non-cash interest expense, (iii) pretax gain on the sale of property, plant and equipment, (iv) dilution of convertible notes which is economically offset by a call spread overlay that was put in place upon issuance, and (v) tax impact of the aforementioned adjustments, as applicable. |
Payout of the Fiscal 2021-2023 LTIP Cycle
| (2) When determining the level of actual performance for Period 2, the committee excluded the impact of certain events not contemplated when creating the initial targets. The Incentive ROIC metric was adjusted for the LTIP to exclude the following: (i) the net financial impact of the Barletta acquisition, (ii) acquisition-related costs associated with the acquisition of Barletta, and (iii) litigation reserves. The Incentive EPS metric was adjusted from diluted EPS to exclude the following: (i) pretax net financial impact of the Barletta acquisition, (ii) pretax acquisition-related costs related to the Barletta acquisition, (iii) pretax earnout valuation adjustments related to the Barletta acquisition, (iv) pretax non-cash interest expense, (v) pretax litigation reserves, and (vi) tax impact of the aforementioned adjustments, as applicable. |
Payout of the Fiscal 2021-2023 LTIP Cycle
| (3) When determining the level of actual performance for Period 3, the committee excluded the impact of certain events not contemplated when creating the initial targets. The Incentive ROIC metric was adjusted for the LTIP to exclude the following: (i) the net financial impacts of the Barletta and Lithionics Battery acquisitions, and (ii) the acquisition-related costs associated with the acquisitions of Barletta and Lithionics Battery. The Incentive EPS metric was adjusted from diluted EPS to exclude the following: (i) pretax net financial impacts of the Barletta and Lithionics Battery acquisitions, (ii) pretax acquisition-related costs related to the Barletta and Lithionics acquisitions, (iii) pretax earnout valuation adjustments related to the Barletta acquisition, (iv) pretax litigation reserves, (v) impact of convertible notes, including dilution impact economically offset by a call spread overlay, certain pretax interest expense, and/or assumed dilution as a result of the adoption of ASU 2020-06 in fiscal 2023, and (vi) tax impact of the aforementioned adjustments, as applicable. |
Payout of the Fiscal 2021-2023 LTIP Cycle
| | Proxy Statement for 2023 Annual Meeting 43 |
Payout of the Fiscal 2021-2023 LTIP Cycle
| (4) When determining the level of actual performance for Period 4, the committee excluded the impact of certain events not contemplated when creating the initial targets. The Incentive EPS metric was adjusted from diluted EPS to exclude the following: (i) pretax acquisition-related costs related to the Barletta and Lithionics Battery acquisitions, (ii) pretax earnout valuation adjustments related to the Barletta acquisition, (iii) pretax litigation reserves, (iv) impact of convertible notes, including dilution impact economically offset by a call spread overlay, certain pretax interest expense, and/or assumed dilution as a result of the adoption of ASU 2020-06 in fiscal 2023, and (v) tax impact of the aforementioned adjustments, as applicable. |
Executive Deferred Compensation Plan (Non-Qualified Deferred Compensation Plan)
Executive Deferred Compensation Plan (Non-Qualified Deferred Compensation Plan) Under the Executive Deferred Compensation Plan (Deferred Compensation Plan), executive officers and certain key employees may annually choose to defer up to 50% of their salary and up to 100% of their cash incentive awards. The committee has determined that the Deferred Compensation Plan will have the same nominal investment options as the 401(k) Plan. The Company does not provide any matching contributions to the Deferred Compensation Plan.
Employment, Severance and Change in Control Arrangements
Employment, Severance and Change in Control Arrangements
Employment Agreements
Employment Agreements Mr. Happe and Mr. Clark are the only NEOs with individual employment agreements with the Company. In December 2021, the committee completed a review of benchmarking data and market practices regarding executive officer severance outside of a change in control. Following that review, the committee approved, and Mr. Happe and the Company entered into an amended and restated employment agreement, which amended the pre-change in control severance benefits for Mr. Happe. If Mr. Happe is terminated by the Company without cause or terminates employment with the Company for good reason (as such terms are defined in his employment agreement), he is entitled to severance pay of two times his annual base salary, payable in installments over 24 months, and an amount equal to two times his target annual bonus plus the annual COBRA premium cost for Mr. Happe’s group medical, dental and vision insurance coverage, payable in a lump sum. Mr. Happe also is subject to one-year non-competition and non-solicitation covenants following termination of employment. If Mr. Clark is terminated by the Company without cause or terminates employment with the Company for good reason (as such terms are defined in his employment agreement), he is entitled to severance pay of his base salary for 12 months and any earned but unpaid incentive bonus due under the Grand Design MIP through the fiscal quarter in which the termination occurred. Mr. Clark is subject to a non-compete and non-solicitation covenants that terminate one year following termination of employment.
Employment Agreements
| | Proxy Statement for 2023 Annual Meeting 45 |
Executive Change in Control Agreements
Executive Change in Control Agreements Each of the NEOs, including Mr. Happe and Mr. Clark, have also entered into an Executive Change in Control Agreement (CIC Agreement) with the Company. The CIC Agreements generally provide that, in the event of a termination of the executive’s employment (for a reason other than death, disability, termination for cause or, under certain circumstances, a voluntary termination of employment by the executive) within two years of a change of control, such executive will receive a severance only relative to salary and target annual incentives under the OICP (as well as annual COBRA premium cost) at a 2x multiple (or 3x, in the case of Mr. Happe only). The CIC Agreement for Mr. Clark provides that the severance benefit payable would be capped at $3,000,000. The committee believes these arrangements are an important part of the total executive compensation program because they protect our interest in the continuity and stability of the executive group, and to facilitate a smooth transition in the event that an executive’s employment is terminated under circumstances covered by the arrangements. The committee also believes that the CIC Agreements reduce the executives’ interest in working against a potential change of control and help to keep them focused on minimizing interruptions in business operations by reducing any concerns they may have of being terminated prematurely and without cause during any ownership transition. See “Potential Payments upon Termination or Change in Control-Executive Change in Control Agreements” below for additional detail.
Summary Compensation Table
Summary Compensation Table The tables below contain compensation information for each of our NEOs for fiscal 2023, 2022, and 2021.
Summary Compensation Table
| Name and Principal Position | Fiscal Year | Salary ($) | Bonus ($) | Stock Awards(1) ($) | Option Awards(2) ($) | Non-Equity Incentive Plan Compensation(3) ($) | Changes in Pension Value and Non- qualified Deferred Compensation Earnings ($) | All Other Compensation(4) ($) | Total ($) | | Michael J. Happe President, CEO | 2023 | 1,050,000 | — | 4,249,995 | 749,992 | 550,500 | — | 77,241 | 6,677,728 | | | 2022 | 1,000,000 | — | 3,569,965 | 629,991 | 1,439,700 | — | 36,913 | 6,676,569 | | | 2021 | 900,000 | — | 3,574,980 | 525,004 | 1,600,000 | — | 49,202 | 6,649,186 | | Bryan L. Hughes CFO; Senior Vice President, Finance, IT and Strategic Planning | 2023 | 575,000 | — | 855,316 | 150,942 | 243,872 | — | 56,271 | 1,881,401 | | | 2022 | 550,000 | — | 756,278 | 123,749 | 560,883 | — | 40,609 | 2,031,519 | | | 2021 | 525,000 | — | 767,819 | 98,433 | 668,535 | — | 45,914 | 2,105,701 | | Stacy L. Bogart, Senior Vice President, General Counsel, Secretary and Corporate Responsibility | 2023 | 512,000 | — | 652,775 | 115,199 | 193,024 | — | 53,855 | 1,526,853 | | | 2022 | 490,000 | — | 611,296 | 99,212 | 470,302 | — | 40,990 | 1,711,800 | | | 2021 | 460,000 | — | 590,072 | 75,907 | 483,782 | — | 40,601 | 1,650,362 | | Huw S. Bower President, Winnebago Outdoors | 2023 | 592,000 | — | 905,741 | 159,847 | 146,520 | — | 53,973 | 1,858,081 | | | 2022 | 566,400 | — | 866,639 | 152,918 | 460,016 | — | 39,091 | 2,085,064 | | | 2021 | 486,539 | 275,000 | 1,991,511 | 148,499 | 645,254 | — | 36,947 | 3,583,750 | | Donald J. Clark(5) President, Grand Design | 2023 | 400,000 | — | — | — | 6,099,325(6) | — | 21,624 | 6,520,949 | | | 2022 | 400,000 | — | — | — | 13,057,292(7) | — | 12,200 | 13,469,492 | | | 2021 | 400,000 | — | — | — | 10,119,386(8) | — | — | 10,519,386 |
Summary Compensation Table
| | Proxy Statement for 2023 Annual Meeting 49 |
Summary Compensation Table
| (1) The table below illustrates the three categories of stock awards as presented above: |
Summary Compensation Table
| Name | Fiscal Year | Non- Performance- Based Restricted Stock Grant(a) ($) | Fiscal 2021 Performance Stock Units(b) ($) | LTIP / Performance Shares(c) ($) | Total Stock Awards ($) | | Michael J. Happe | 2023 | 1,750,008 | — | 2,499,987 | 4,249,995 | | | 2022 | 1,469,999 | — | 2,099,966 | 3,569,965 | | | 2021 | 1,224,990 | 599,989 | 1,750,001 | 3,574,980 | | Bryan L. Hughes | 2023 | 352,189 | — | 503,127 | 855,316 | | | 2022 | 343,783 | — | 412,495 | 756,278 | | | 2021 | 229,675 | 210,004 | 328,139 | 767,818 | | Stacy L. Bogart | 2023 | 268,783 | — | 383,992 | 652,775 | | | 2022 | 280,514 | — | 330,782 | 611,296 | | | 2021 | 177,093 | 159,983 | 252,997 | 590,073 | | Huw S. Bower(d) | 2023 | 372,942 | — | 532,799 | 905,741 | | | 2022 | 356,860 | — | 509,779 | 866,639 | | | 2021 | 1,496,524 | — | 494,987 | 1,991,511 | | Donald J. Clark | 2023 | — | — | — | — | | | 2022 | — | — | — | — | | | 2021 | — | — | — | — |
Summary Compensation Table
| (a) These amounts represent restricted stock units granted each computed in accordance with Accounting Standards Codification (ASC) 718. The grant date fair value of each of the awards was determined at the closing price of the Company's shares on the NYSE on the grant date without regard to estimated forfeitures related to service-based vesting conditions. |
Summary Compensation Table
| (b) These amounts represent the grant date fair value computed in accordance with ASC 718 of the performance stock units specific to fiscal 2021. |
Summary Compensation Table
| (c) These amounts represent the grant date fair value computed in accordance with ASC 718 of the LTIP/performance share unit awards. These amounts for the fiscal 2023-2025 LTIP represent the values that are based on achievement of 100% of the target performance. Assuming achievement of the maximum 200% of target performance, the value of the fiscal 2023-2025 LTIP awards would be: $4,999,975 for Mr. Happe; $1,006,255 for Mr. Hughes; $767,984 for Ms. Bogart; and $1,065,598 for Mr. Bower. Assumptions used in the calculation of the amounts reported in this column are included in Note 14, Stock-Based Compensation Plans, of the Notes to the Consolidated Financial Statements included in our 2023 Form 10-K. |
Summary Compensation Table
| (d) Mr. Bower joined the Company in October 2020. Mr. Bower received a new hire RSU award which is included in the Non-Performance-Based Restricted Stock Grant column for fiscal 2021. |
Summary Compensation Table
| (2) The amounts shown represent the aggregate grant date fair values of the option grants. Assumptions used in the calculation of the amounts reported in this column are included in Note 14, Stock-Based Compensation Plans, of the Notes to the Consolidated Financial Statements included in our 2023 Form 10-K. |
Summary Compensation Table
| (3) These amounts represent actual annual incentive plan award payouts made in cash to NEOs under the fiscal 2021, 2022, and 2023 OICPs. In the case of Mr. Clark, these amounts do not represent award payouts under such OICPs, but instead represent award payouts under the pre-existing Grand Design MIP that he participates in. |
Summary Compensation Table
| | Proxy Statement for 2023 Annual Meeting 50 |
Summary Compensation Table
| (4) Amounts reported in this column for fiscal 2023 include the following: |
Summary Compensation Table
| | | | | | Saving Plan | | | | Name | Tax and Financial Planning ($) | Car Allowance ($) | Life Insurance Premiums STD & LTD ($) | Other ($) | Match ($) | Profit Sharing(a) ($) | Total All Other Compensation ($) | | Michael J. Happe | 7,800 | 18,004 | 14,000 | — | 12,200 | 9,460 | 77,241(b) | | Bryan L. Hughes | 7,800 | 18,004 | 5,395 | — | 12,200 | 9,246 | 56,271(b) | | Stacy L. Bogart | 7,800 | 18,004 | 6,605 | — | 12,200 | 9,246 | 53,855 | | Huw S. Bower | 7,800 | 18,004 | 6,545 | — | 12,200 | 9,424 | 53,973 | | Donald J. Clark | — | — | — | — | 12,200 | 9,424 | 21,624 |
Summary Compensation Table
| (a) The profit sharing amounts were paid with respect to the Company’s performance in fiscal 2022. |
Summary Compensation Table
| (b) The difference in the amount shown here and the sum of the other compensation elements included in this table reflect the amount paid for an executive physical. |
Summary Compensation Table
| (5) Under the terms of his amended employment agreement, Mr. Clark’s annual incentive plan payout under the Grand Design MIP paid out 85% in cash and 15% in restricted stock units for fiscal 2023 and 2022. Both the cash and restricted stock units are reported under the Non-Equity Incentive Plan Compensation column. For fiscal 2021, Mr. Clark’s Grand Design MIP payout was 90% in cash and 10% in restricted stock units. |
Summary Compensation Table
| (6) The amount shown here includes $914,899 in restricted stock units awarded for fiscal 2023 performance pursuant to the Grand Design MIP. |
Summary Compensation Table
| (7) The amount shown here includes $1,958,594 in restricted stock units awarded for fiscal 2022 performance pursuant to the Grand Design MIP. |
Summary Compensation Table
| (8) The amount shown here includes $1,011,923 in restricted stock units awarded for fiscal 2021 performance pursuant to the Grand Design MIP. |
Summary Compensation Table
| | Proxy Statement for 2023 Annual Meeting 51 |
Grants of Plan-Based Awards Table
Grants of Plan-Based Awards Table The following table provides additional information relating to plan-based awards granted to our NEOs in fiscal 2023. All equity awards were granted under the 2019 Plan.
Grants of Plan-Based Awards Table
| | Award Type | Grant Date(5) | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | | | All Other Stock Awards: Number of Shares of Stock or Units(3) (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards(4) ($) | | Name | | | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | | | Michael J. Happe | Stock Options | 10/11/22 | | | | | | | | 31,328 | 56.09 | 749,992 | | | RSU Award | 10/11/22 | | | | | | | 31,200 | | | 1,750,008 | | | 2023 OICP | | 300,000 | 1,200,000 | 2,400,000 | | | | | | | | | | 2023-2025 LTIP | 10/11/22 | | | | 11,143 | 44,571 | 89,142 | | | | 2,499,987 | | Bryan L. Hughes | Stock Options | 10/11/22 | | | | | | | | 6,305 | 56.09 | 150,942 | | | RSU Award | 10/11/22 | | | | | | | 6,279 | | | 352,189 | | | 2023 OICP | | 129,375 | 517,500 | 1,035,000 | | | | | | | | | | 2023-2025 LTIP | 10/11/22 | | | | 2,243 | 8,970 | 17,940 | | | | 503,127 | | Stacy L. Bogart | Stock Options | 10/11/22 | | | | | | | | 4,812 | 56.09 | 115,199 | | | RSU Award | 10/11/22 | | | | | | | 4,792 | | | 268,783 | | | 2023 OICP | | 102,400 | 409,600 | 819,200 | | | | | | | | | | 2023-2025 LTIP | 10/11/22 | | | | 1,712 | 6,846 | 13,692 | | | | 383,992 | | Huw S. Bower | Stock Options | 10/11/22 | | | | | | | | 6,677 | 56.09 | 159,847 | | | RSU Award | 10/11/22 | | | | | | | 6,649 | | | 372,942 | | | 2023 OICP | | 133,200 | 532,800 | 1,065,600 | | | | | | | | | | 2023-2025 LTIP | 10/11/22 | | | | 2,375 | 9,499 | 18,998 | | | | 532,799 | | Donald J. Clark(6) | RSU Award | 10/10/23 | | | | | | | 15,591 | | | 914,899 |
Grants of Plan-Based Awards Table
| (1) Fiscal 2023 OICP targets annual performance against goals approved by the committee. Awards under the fiscal 2023 OICP are payable in cash. The threshold, target and maximum amounts presented above represent amounts that could have been earned by our NEOs for fiscal 2023 under the fiscal 2023 OICP. |
Grants of Plan-Based Awards Table
| (2) Fiscal 2023-2025 LTIP refers to our performance shares. For each of the NEOs except for Mr. Clark, the threshold, target and maximum amounts under the fiscal 2023-2025 LTIP represent potential performance share amounts that are measured over a three-year performance period from August 28, 2022 through August 30, 2025. |
Grants of Plan-Based Awards Table
| (3) Consists of restricted stock units that vest one-third each year on the anniversary of the grant date. |
Grants of Plan-Based Awards Table
| (4) The grant date fair value per share of the restricted stock was $56.09. The Black-Scholes grant date fair value per option award was $23.94. The value for Mr. Clark reflects the portion of Mr. Clark’s fiscal 2023 Grand Design MIP payout that was settled in restricted stock units on October 10, 2023 based on the closing stock price of $58.68 per share on such date. |
Grants of Plan-Based Awards Table
| (5) The committee approved the fiscal 2023 OICP and fiscal 2023-2025 LTIP performance share units on October 11, 2022, effective as of the beginning of fiscal 2023. |
Grants of Plan-Based Awards Table
| (6) Mr. Clark is not eligible to participate in the OICP or LTIP; however he remains eligible to participate in the Grand Design MIP. The restricted stock units reported under All Other Stock Awards were issued in October 2023 in respect of the 15% of Mr. Clark’ s total fiscal 2023 Grand Design MIP that was settled in restricted stock units. |
Grants of Plan-Based Awards Table
| | Proxy Statement for 2023 Annual Meeting 52 |
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table
Outstanding Equity Awards at Fiscal Year-End Table
Outstanding Equity Awards at Fiscal Year-End Table The following table provides information regarding the outstanding equity awards held by each of the NEOs as of August 26, 2023:
Outstanding Equity Awards at Fiscal Year-End Table
| Name | Option Awards | | | | Stock Awards | | LTIP / Performance Shares | | | | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(14) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Yet Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(15) | | Michael J. Happe | 10,000 | —(1) | 16.67 | 01/18/26 | | | | | | | 13,300 | —(2) | 27.89 | 10/11/26 | | | | | | | 17,000 | —(3) | 35.50 | 12/13/26 | | | | | | | 28,015 | —(4) | 44.40 | 10/18/27 | | | | | | | 42,831 | —(5) | 31.70 | 10/15/28 | | | | | | | 27,417 | —(6) | 47.93 | 12/17/29 | | | | | | | 17,104 | 8,556(7) | 54.49 | 10/13/30 | | | | | | | 6,890 | 13,779(8) | 75.59 | 10/12/31 | | | | | | | — | 31,328(9) | 56.09 | 10/11/32 | | | | | | | | | | | | | 32,116(10) | 2,044,183 | | | | | | | | | 27,781(11) | 1,768,261 | | | | | | | | | 44,571(12) | 2,836,944 | | | | | | | 7,496(7) | 477,120 | | | | | | | | | 12,965(8) | 825,222 | | | | | | | | | 31,200(9) | 1,985,880 | | | | Bryan L. Hughes | 8,373 | —(4) | 44.40 | 10/18/27 | | | | | | | 11,438 | —(5) | 31.70 | 10/15/28 | | | | | | | 4,932 | —(6) | 47.93 | 12/17/29 | | | | | | | 3,207 | 1,604(7) | 54.49 | 10/13/30 | | | | | | | 1,353 | 2,707(8) | 75.59 | 10/12/31 | | | | | | | — | 6,305(9) | 56.09 | 10/11/32 | | | | | | | | | | | | | 6,022(10) | 383,300 | | | | | | | | | 5,457(11) | 347,338 | | | | | | | | | 8,970(12) | 570,941 | | | | | | | 1,406(7) | 89,492 | | | | | | | | | 485(13) | 30,870 | | | | | | | | | 2,547(8) | 162,117 | | | | | | | | | 6,279(9) | 399,658 | | | | Stacy L. Bogart | 9,823 | —(5) | 31.70 | 10/15/28 | | | | | | | 4,091 | —(6) | 47.93 | 12/17/29 | | | | | | | 2,473 | 1,237(7) | 54.49 | 10/13/30 | | | | | | | 1,085 | 2,170(8) | 75.59 | 10/12/31 | | | | | | | — | 4,812(9) | 56.09 | 10/11/32 | | | | | | | | | | | | | 4,643(10) | 295,527 | | | | | | | | | 4,376(11) | 278,532 | | | | | | | | | 6,846(12) | 435,748 | | | | | | | 1,084(7) | 68,997 | | | | | | | | | 432(13) | 27,497 | | | | | | | | | 2,042(8) | 129,973 | | | | | | | | | 4,792(9) | 305,011 | | | | Huw S. Bower | 4,838 | 2,420(7) | 54.49 | 10/13/30 | | | | | | | 1,672 | 3,345(8) | 75.59 | 10/12/31 | | | | | | | — | 6,677(9) | 56.09 | 10/11/32 | | | | | | | | | | | | | 9,084(10) | 578,197 | | | | | | | | | 6,744(11) | 429,256 | | | | | | | | | 9,499(12) | 604,611 | | | | | | | 2,121(7) | 135,002 | | | | | | | | | 3,147(8) | 200,307 | | | | | | | | | 6,649(9) | 423,209 | | | | Donald J. Clark | — | — | — | — | 1,688(7) | 107,441 | — | — | | | | | | | 8,925(8) | 568,076 | | | | | | | | | 34,919(9) | 2,222,594 | | |
Outstanding Equity Awards at Fiscal Year-End Table
| (1) Represents stock option granted on January 18, 2016 as a new hire grant under the Company's 2014 Omnibus Equity, Performance Award and Incentive Compensation Plan (the 2014 Plan), which vested with respect to 33% of the shares on each of the first three anniversaries of the grant date. |
Outstanding Equity Awards at Fiscal Year-End Table
| | Proxy Statement for 2023 Annual Meeting 54 |
Outstanding Equity Awards at Fiscal Year-End Table
| (2) Represents stock option granted on October 11, 2016 as an annual grant under the 2014 Plan, which vested with respect to 33% of the shares on each of the first three anniversaries of the grant date. |
Outstanding Equity Awards at Fiscal Year-End Table
| (3) Represents award granted on December 13, 2016 as a grant for the purchase of Grand Design RV, LLC under the 2014 Plan, which vested with respect to 33% of the shares on each of the first three anniversaries of the grant date. |
Outstanding Equity Awards at Fiscal Year-End Table
| (4) Represents award granted on October 18, 2017 as an annual stock or option grant under the 2014 Plan, which vested with respect to 33% of the shares on each of the first three anniversaries of the grant date. |
Outstanding Equity Awards at Fiscal Year-End Table
| (5) Represents award granted on October 15, 2018 as an annual stock or option grant under the 2014 Plan, which vested with respect to 33% of the shares on the first three anniversaries of the date of grant. |
Outstanding Equity Awards at Fiscal Year-End Table
| (6) Represents award granted on December 17, 2019 as an annual stock or option grant under the 2019 Plan, which vested with respect to 33% of the shares on the first three anniversaries of the date of grant. |
Outstanding Equity Awards at Fiscal Year-End Table
| (7) Represents award granted on October 13, 2020 as an annual stock or option grant under the 2019 Plan, which will vest with respect to 33% of the shares on each of the first three anniversaries of the date of grant. |
Outstanding Equity Awards at Fiscal Year-End Table
| (8) Represents award granted on October 12, 2021 as an annual stock or option grant under the 2019 Plan, which will vest with respect to 33% of the shares on each of the first three anniversaries of the date of grant. |
Outstanding Equity Awards at Fiscal Year-End Table
| (9) Represents award granted on October 11, 2022 as an annual stock or option grant under the 2019 Plan, which will vest with respect to 33% of the shares on each of the first three anniversaries of the date of grant. |
Outstanding Equity Awards at Fiscal Year-End Table
| (10) Represents fiscal 2021-2023 LTIP at target, under the 2019 Plan for the three-year performance period beginning September 1, 2020 and ending August 26, 2023. |
Outstanding Equity Awards at Fiscal Year-End Table
| (11) Represents fiscal 2022-2024 LTIP at target, under the 2019 Plan for the three-year performance period beginning August 29, 2021 through August 31, 2024. |
Outstanding Equity Awards at Fiscal Year-End Table
| (12) Represents fiscal 2023-2025 LTIP at target, under the 2019 Plan for the three-year performance period beginning August 28, 2023 and ending August 30, 2025. |
Outstanding Equity Awards at Fiscal Year-End Table
| (13) Represents award granted on October 12, 2021, for work associated with the acquisition of Barletta Boats, under the 2019 Plan, which will vest with respect to 33% of the shares on each of the first three anniversaries of the date of the grant. |
Outstanding Equity Awards at Fiscal Year-End Table
| (14) Represents the value of unvested stock based on the closing stock price as of August 25, 2023 of $63.65. |
Outstanding Equity Awards at Fiscal Year-End Table
| (15) Represents the value of unearned performance share units at target based on the closing stock price as of August 25, 2023 of $63.65. |
Option Exercises and Stock Vested Table
Option Exercises and Stock Vested Table The following table provides the amounts received before payroll withholding taxes upon the exercise of options or similar instruments or the vesting of stock or similar instruments during fiscal 2023.
Option Exercises and Stock Vested Table
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(1) | | Michael J. Happe | — | — | 97,209 | 5,451,707 | | Bryan L. Hughes | — | — | 20,120 | 1,129,332 | | Stacy L. Bogart | — | — | 16,338 | 916,704 | | Huw S. Bower | — | — | 14,571 | 829,964 | | Donald J. Clark | — | — | 6,149 | 350,247 |
Option Exercises and Stock Vested Table
| (1) Valued at the closing market price of the Company's common stock of $56.09 (October 11, 2022), $56.96 (October 12, 2022), $56.96 (October 13, 2022), and $53.11 (December 19, 2022) as quoted on the NYSE on the vesting dates. |
Option Exercises and Stock Vested Table
| | Proxy Statement for 2023 Annual Meeting 55 |
Nonqualified Deferred Compensation
Nonqualified Deferred Compensation The following table summarizes non-qualified deferred compensation by NEOs during fiscal 2023.
Nonqualified Deferred Compensation
| Name | Executive Contributions in Last FY ($) | Registrant Contributions in Last FY ($) | Aggregate Earnings in Last FY ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last FYE ($) | | Huw S. Bower | 10,569(1) | — | 10,038 | — | 101,134(3) | | Bryan L. Hughes | 20,529(2) | — | 58,089 | — | 847,131(4) |
Nonqualified Deferred Compensation
| (1) Represents Mr. Bower’s base salary deferral of 5% during the 2022 calendar year (which includes the first four months of fiscal 2023), which is included in the Salary column of the Summary Compensation Table. |
Nonqualified Deferred Compensation
| (2) Represents Mr. Hughes’ base salary deferral of 10% during the 2022 calendar year (which includes the first four months of fiscal 2023), which is included in the Salary column of the Summary Compensation Table. |
Nonqualified Deferred Compensation
| (3) Balance includes (i) $70,675 of Mr. Bowers’ annual incentive payout for fiscal 2021 previously reported as Non-Equity Incentive Plan Compensation, and (ii) $17,972 of Mr. Bower’s base salary for fiscal 2022 that was previously reported as Salary. |
Nonqualified Deferred Compensation
| (4) Balance includes (i) amounts from Mr. Hughes’ annual incentive payouts that were previously reported as Non-Equity Incentive Plan Compensation as follows: fiscal 2018 - $60,792, fiscal 2019 - $17,744, fiscal 2020 - $54,027, fiscal 2021 - $363,867, and fiscal 2022 - $228,853 and (ii) amounts from Mr. Hughes’ base salary that were previously reported as Salary as follows: fiscal 2021 - $52,500, and fiscal 2022 - $54,904. |
Potential Payments upon Termination or Change in Control
Potential Payments upon Termination or Change in Control
CEO Pay Ratio Disclosure
CEO Pay Ratio Disclosure For fiscal 2023, we calculated the ratio of the annual total compensation of our principal executive officer (PEO), who is Mr. Happe, our President and CEO, to the annual total compensation of our median employee, as described below. As of our measurement date of August 26, 2023 to identify our median employee, our employee population including all full-time, part-time and temporary workers, consisted of approximately 6,261 individuals, all of whom worked in the United States. To identify the median employee, as well as determine the annual total compensation of the median employee, we used the following methodology and consistently applied material assumptions, adjustments and estimates.
CEO Pay Ratio Disclosure
| ■ | We compared the payroll data for our employee population described above (minus our PEO) using a compensation measure consisting of base pay related wages and incentive pay paid during fiscal 2023. Base pay related wages includes the amount of base salary the employee received during the year and all other pay elements related to base pay including, but not limited to, holiday pay, paid time off, overtime and shift differentials. We also included cash bonuses and commissions paid during the fiscal year, but we excluded equity grants and any adjustments for the value of benefits provided. |
CEO Pay Ratio Disclosure
| ■ | We annualized the base pay related wages and incentive pay of all full-time and part-time employees who were hired by the Company and its subsidiaries between August 28, 2022 and August 26, 2023. |
CEO Pay Ratio Disclosure
| ■ | Based upon base pay related wages and cash incentive pay of each employee, we identified a median employee and calculated that employee’s annual total compensation. |
CEO Pay Ratio Disclosure
| ■ | We determined annual total compensation, including any perquisites and other benefits, in the same manner that we determine the annual total compensation of our PEO for purposes of the Summary Compensation Table disclosed above. |
CEO Pay Ratio Disclosure
This resulted in the median employee’s annual total compensation as shown below.
CEO Pay Ratio Disclosure
| Annual Total Compensation of Median Employee | $65,833 | | Annual Total Compensation of PEO (Mr. Happe) | $6,677,728 |
CEO Pay Ratio Disclosure
Based on this information for fiscal 2023, we reasonably estimate that the ratio of our CEO’s annual total compensation to the annual total compensation of our median employee was 101 to 1. Our pay ratio estimate has been calculated in a manner consistent with Item 402(u) of Regulation S-K. The SEC’s rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. As a result, the pay ratio reported by other companies may not be comparable to our pay ratio reported above.
CEO Pay Ratio Disclosure
| | Proxy Statement for 2023 Annual Meeting 61 |
Pay Versus Performance Disclosure
Pay Versus Performance Disclosure As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation actually paid and certain financial performance of our Company, illustrating pay versus performance (PVP).
Pay Versus Performance Disclosure
| Year | Summary Compensation Table Total for PEO(1) ($) | Compensation Actually Paid to PEO ($) | Average Summary Compensation Total for Non-PEO NEOs(1) ($) | Average Compensation Actually Paid to Non-PEO NEOs ($) | Value of Initial Fixed $100 Investment Based on: | | Net Income ($ in millions) | Incentive EPS($)(4) | | | | | | | Total Shareholder Return(2) ($) | Russell 3000 Recreational Vehicle and Boats Subsector Index Total Shareholder Return(2)(3) ($) | | | | 2023 | 6,677,728 | 4,040,446 | 2,946,821 | 2,675,476 | 112.9 | 114.2 | 215.9 | 6.07 | | 2022 | 6,676,569 | 5,569,618 | 4,824,469 | 4,871,036 | 106.7 | 115.2 | 390.6 | 12.39 | | 2021 | 6,649,186 | 13,976,443 | 4,539,932 | 6,582,245 | 126.0 | 128.1 | 281.9 | 8.66 |
Pay Versus Performance Disclosure
| (1) The PEO reflected above is Mr. Happe. The non-PEO named executive officers (NEOs) reflects the following individuals in each year: |
Pay Versus Performance Disclosure
2023: Ms. Bogart and Messrs. Bower, Clark and Hughes 2022: Ms. Bogart and Messrs. Bower, Clark and Hughes 2021: Messrs. Bower, Clark, Hazelton and Hughes
Pay Versus Performance Disclosure
| (2) Company and peer group Total Shareholder Return (TSR) for each year reflects what the cumulative value of a $100 investment would be, including reinvestment of dividends, if such an amount were invested on August 28, 2020. |
Pay Versus Performance Disclosure
| (3) Peer group TSR is calculated using the Russell 3000 Recreational Vehicles and Boats Subsector Index. |
Pay Versus Performance Disclosure
| (4) Our company-selected measure, which is the measure we believe represents the most important financial performance metric used to link compensation paid to our NEOs in fiscal 2023 to our performance is Incentive EPS. This is a non-GAAP measure, which is defined above under “Compensation Discussion and Analysis - Fiscal 2023 Equity Awards.” |
Pay Versus Performance Disclosure
Compensation Actually Paid (CAP) illustrated in the table above is calculated by making the following adjustments from the Summary Compensation Table (SCT) totals as follows:
Security Ownership of Certain Beneficial Owners and Management
| (2) Winnebago Stock Units held under our Directors' Deferred Plan as of October 19, 2023 (see further discussion of the plan in the Director Compensation section). These units are vested and will be settled 100% in common stock upon the earliest of the following events: a date designated by the director, the director's termination of service, death or disability or a change in control of the Company, as defined in the plan. |