DEF 14A of DANA Inc
Filed Mar 14, 2024 · FY20230001140361-24-013151
Dana’s Compensation Philosophy
| ✓ | Reward performance – A substantial percentage of executive pay is performance-based and therefore at risk. Our pay programs reflect our “pay-for-performance” culture that aligns incentives with shareholder interests. | ✓ | Drive ownership mentality – We require executives to personally invest in Dana’s success through stock ownership guidelines that require executives to own a significant amount of our stock. | | ✓ | Emphasize long-term incentive compensation – We share a portion of the value created for shareholders with those responsible for the results through our performance-based long-term incentive compensation plans. Performance Shares reward executives for delivering long-term profitability and cash flow performance. | ✓ | Retain, reward and attract the best talent to achieve superior results – To consistently outperform our competitors, it is crucial that we retain and recruit superior talent capable of driving superior results. We have structured our compensation program to motivate and reward these results. |
Dana’s Executive Compensation Practices
| | What We Do | | What We Don’t Do | | ► | Base half of our long-term compensation on the achievement of objective, pre-established goals tied to financial, operational, and strategic measures. | ► | No excise tax gross ups. | | ► | Award incentive compensation based on objective measures. | ► | No excessive perquisites. | | ► | Apply leading practice stock ownership guidelines. | ► | No hedging or pledging of Dana stock. | | ► | Maintain a robust clawback policy, compliant with rules established by the U.S. Securities and Exchange Commission and New York Stock Exchange, to recapture unearned incentive payments in the event of a restatement of our financial results. | ► | No excessive change-in-control or executive severance provisions. | | ► | Retain an independent compensation consultant. | ► | No payment of dividends or dividend equivalents on unvested awards. | | ► | Include double-trigger vesting of equity awards and severance payments upon a change in control. | | |
Compensation Peer Group
Compensation Peer Group One of the factors our Compensation Committee uses in setting executive compensation is an evaluation of how our target compensation and benefits levels compare with those of similarly situated executives at companies that comprise our executive compensation peer group (Peer Group). Dana’s philosophy for senior executive pay, including NEO pay, is to target a range of +/-15% of the 50th percentile of our Peer Group and general industry market data as provided by the Compensation Committee’s independent compensation consultant. In addition to market data, other factors, such as an individual’s experience, responsibilities and long-term strategic value to Dana, are also considered when making recommendations and decisions on compensation. The Peer Group used for benchmarking executive pay for all NEOs is made up of companies that are:
Compensation Peer Group
| ► | in similar industries where Dana competes for talent, customers and capital including automotive parts and equipment, high-tech industrial, construction and farm machinery, heavy trucks and other durable goods manufacturers, |
Compensation Peer Group
| ► | of similar size (as measured by annual revenue), with a range of approximately 1/3rd to 3x Dana’s revenue that results in a median revenue close to Dana’s, and |
Compensation Peer Group
| ► | of similar complexity to Dana (e.g., multi-country and multi-segment with an emphasis on technology). |
Compensation Peer Group
The Peer Group is reviewed annually by the Compensation Committee and modifications are made to ensure each company in the group meets the above comparison criteria. The 22 companies shown in the table below comprised our Peer Group:
Compensation Peer Group
| Adient plc | Illinois Tool Works Inc. | | American Axle & Manufacturing Holdings, Inc. | Ingersoll-Rand Inc. | | Aptiv PLC | LCI Industries | | BorgWarner Inc. | Lear Corporation | | Cummins Inc. | Oshkosh Corporation | | Dover Corporation | Parker-Hannifin Corporation | | Eaton Corporation plc | Rockwell Automation, Inc. | | Emerson Electric Co. | Terex Corporation | | Flowserve Corporation | The Timken Company | | Fortive Corporation | Trane Technologies plc | | The Goodyear Tire & Rubber Company | Visteon Corporation |
Compensation Peer Group
The Compensation Committee, after review with its independent compensation consultant, determined that the majority of companies comprising the 2022 Peer Group continued to meet the comparison criteria, and further elected to make several adjustments. As Tenneco and Meritor were recently acquired and ceased to trade publicly, both were removed from the Peer Group. Cooper-Standard was also removed because its annual revenue fell below the criteria noted above. To align the median revenue of the Peer Group closer to Dana’s revenue, and to balance the industry and market composition of the group, the Compensation Committee chose to add Rockwell Automation, Goodyear Tire & Rubber and Visteon as compensation peers.
Pay for Performance
| Realizable Pay and Performance Measurement | | | Realizable Pay is defined as the sum of three-year averages of base salary, annual incentive payouts and paper gains of long-term incentives, including values for the “in-the-money” portion of options (if applicable), all restricted share/unit grants, the target value of performance plans where actual performance is unknown and actual awards for performance awards with known payouts. | Note that this definition differs from that of summary compensation table pay, which represents the grant-date fair value of the long-term incentive awards. To evaluate and compare our performance with our Peer Group companies, we used an equally weighted composite of free cash flow growth, EBITDA growth, return on invested capital and revenue growth, which are commonly accepted key financial metrics. |
Elements of the 2023 Executive Compensation Program
| COST TO DANA | ELEMENT | KEY CHARACTERISTICS | | WHY WE PAY THIS ELEMENT | | DETERMINING FACTORS | | | FIXED | Base salary | ► | Fixed compensation payable in cash. Reviewed annually and adjusted when appropriate. | ► | Provide base level of competitive cash compensation for retaining and attracting executive talent. | ► | Experience, job scope, market data and individual performance. | | VARIABLE | Annual cash incentive award | ► | Variable compensation payable in cash based on performance-related financial and individual goals. | ► | Incentivize high performance levels and reward short-term consolidated and individual performance. | ► | Corporate funding pool is based 80% on three equally weighted financial performance metrics (Adjusted EBITDA, Adjusted Free Cash Flow and Electrification Sales) aligned with the annual operating plan, and 20% on individual performance goals tied to the delivery of strategic and other objectives. | | | Performance share awards (PSAs) | ► | PSAs vest after a three-year performance period based on achieving financial and shareholder return metrics. | ► | Align the interests of senior executives with those of shareholders around long-term value creation and executive talent retention. | ► | Target awards based on job scope, market data and individual performance. | | | | | | ► | Minimize short-term risk-taking behaviors in the interest of positive long-term results. | ► | Payouts are earned based on performance associated with specified growth-based financial metrics (Adjusted EBITDA growth and Adjusted Free Cash Flow growth relative to initial baseline targets) and Relative Total Shareholder Return over a three-year period. | | | Restricted stock units (RSUs) | ► | RSUs vest ratably on the first, second and third anniversary of the grant date. | ► | Increase long-term equity ownership and focus executives on providing shareholders with superior investment returns. | ► | Target award based on job scope, market data and individual performance. | | | | | | ► | Vesting terms and ownership guidelines promote retention and a strong linkage to the long-term interests of shareholders. | | |
Annual Performance-Based Cash Incentive
Annual Performance-Based Cash Incentive The Dana Annual Incentive Plan (AIP) is a cash-based annual bonus plan intended to motivate and reward employees based on Dana’s consolidated financial results as well as individual performance that drives shareholder value. The AIP covers approximately 4,400 employees, including our NEOs. At the beginning of each year, the Compensation Committee reviews and approves an annual cash bonus target for each NEO as a percentage of base salary for the upcoming performance period. The NEOs may earn from 0% to 200% of their target incentive opportunity. The annual incentive payout is weighted 80% on consolidated financial metrics and 20% on individual performance goals focused on driving strategic, operational, and other priorities of the business. The 2023 AIP target payout opportunities with respect to our NEOs are shown in the table below:
Annual Performance-Based Cash Incentive
| NEO | AIP Target Opportunity (% of Base Salary) | | James K. Kamsickas | 150% | | Timothy R. Kraus | 100% | | Aziz S. Aghili | 80% | | Byron S. Foster | 75% | | Douglas H. Liedberg | 75% |
Annual Performance-Based Cash Incentive
Following a Peer Group compensation benchmarking review and an evaluation of our NEOs’ respective roles and responsibilities, the Compensation Committee approved increases to the AIP target opportunity for Mr. Kraus (from 75% to 100%) effective with the 2023 plan year. 2023 AIP performance was based on the four key metrics shown in the table below and was designed to reward the achievement of performance goals at the consolidated and individual levels. Each of the three financial performance metrics was weighted equally in the 2023 plan and designed to provide an appropriate level of motivation to drive profitability and free cash flow growth, which are key value drivers of our business. The AIP design was left unchanged from the prior year.
Annual Performance-Based Cash Incentive
| Annual Incentive Plan Metrics | 2023 Weighting | | | | Financial Performance Metrics | | | | | Adjusted EBITDA | 1/3rd | } | 80% | | Adjusted Free Cash Flow | 1/3rd | | | | Electrification Sales | 1/3rd | | | | Individual Performance Goals | | | 20% |
Annual Performance-Based Cash Incentive
The Adjusted EBITDA and Adjusted Free Cash Flow measures used in our publicly reported financial results form the basis of the performance metrics that are components of our AIP. Adjustments to EBITDA generally include equity grant expense, restructuring expense, non-service cost components of pension and other postretirement benefits costs and other adjustments not related to our core operations (e.g., gains or losses on debt extinguishment, pension settlements, divestitures and impairments, etc.). Adjustments to Free Cash Flow include discretionary pension contributions. For the purpose of calculating the annual incentive award, an adjustment is made to remove the effects of currency exchange rate fluctuations on Adjusted EBITDA and Adjusted Free Cash Flow, which may have a significant impact on our financial results given our global footprint, and which is not within management’s control. An additional adjustment is made to Adjusted Free Cash Flow performance to reflect favorable and unfavorable capital expenditure variances versus budgeted amounts.
Company Financial Metrics
| Dana’s financial performance makes up 80% of the overall AIP award for the NEOs and is measured using three equally weighted financial metrics: Adjusted EBITDA, Adjusted Free Cash Flow and Electrification Sales. We believe these metrics are appropriate measures of our underlying earnings, align with our business enterprise strategy and our external financial reporting commitments, and drive shareholder value. The remaining 20% is based on individual performance goals. | |
Company Financial Metrics
To determine the payout level for annual incentive awards, for 2023 performance, each financial goal is measured against specified targets with a performance range. Those performance ranges allow for a 100% payout along a performance continuum. Each of the three financial metric targets was based on achieving a level of performance which, at the time, was anticipated to be challenging but attainable, including consideration of the investment required for the development of electrified products. The threshold level was set to be reflective of performance at which the Compensation Committee believed a portion of the award opportunity should be earned. The maximum level was set well above the target, requiring significant achievement and reflecting performance at which the Compensation Committee believed a 200% target award would be warranted.
AIP Performance
AIP Performance Weighting, target performance, actual performance and the payout associated with each of the 2023 AIP metrics are shown in the table below. Metric weightings and performance ranges approved by the Compensation Committee are intended to complement the rigor inherent in our business planning and target-setting processes by further incentivizing the attainment of exceptional performance outcomes. In determining the 2023 annual incentive payout, in alignment with our pay for performance compensation philosophy, the Compensation Committee considered the magnitude and effect of the 2023 UAW strike at Ford, Stellantis and General Motors. Given management’s prompt and effective mitigation response, including the execution of cost containment and supply chain action plans to managing a safe, flexible production environment from work stoppage to restart, without customer interruption, the Committee deemed it appropriate to exclude the estimated impact of the strike from the annual incentive performance metrics. The estimated impact of the strike was similarly excluded in calculating performance share awards under the 2021 long-term incentive plan (see the section titled “2021 Performance Share Plan” below).
AIP Performance
| AIP Performance Metrics | Weight | Threshold | Target | Maximum | Actual | Payout (% of Target) | | Adjusted EBITDA | 1/3rd | $680M | $800M | $860M | $898M | 200% | | Adjusted Free Cash Flow | 1/3rd | ($95)M | $25M | $85M | ($38)M | 100% | | Electrification Sales | 1/3rd | $629M | $740M | $796M | $820M | 200% | | Weighted Payout for Financial Metrics | | | | | | 167% |
Individual Performance Goals
Individual Performance Goals
Individual Performance Goals
| The NEOs’ individual performance makes up 20% of the overall AIP award. For 2023, each executive leader, including our NEOs, was accountable for individual goals focused on driving specific priorities such as, but not limited to, employee safety commitments, quality performance, sales growth and other customer-centric objectives, financial performance, operational efficiencies and continuous improvement initiatives, inclusion and diversity outcomes, sustainability actions and execution of our overall business strategy. | |
Individual Performance Goals
The Compensation Committee reviews the strategic, operational and other individual performance goals for the Chairman and CEO and other NEOs. The Chairman and CEO sets forth each of the other NEO’s individual goals (and the weighting of each goal), subject to approval by the Compensation Committee. The Compensation Committee sets the individual goals and weighting of each goal for the Chairman and CEO. The levels of achievement (0% - 200% of targeted goals) for the individual performance goals portion of the 2023 annual incentive award for each of our NEOs were: Mr. Kamsickas (189%); Mr. Kraus (179%); Mr. Aghili (180%); Mr. Foster (178%) and Mr. Liedberg (187%).
2023 Annual Incentive Plan Results
2023 Annual Incentive Plan Results The annual incentive payments for our NEOs under the 2023 AIP, based on financial and individual performance described above, are shown in the following table.
2023 Annual Incentive Plan Results
| NEO | 2023 Award | | James K. Kamsickas | $3,407,922 | | Timothy R. Kraus | $1,227,531 | | Aziz S. Aghili | $915,363 | | Byron S. Foster | $812,229 | | Douglas H. Liedberg | $769,205 |
2023 Annual Incentive Plan Results
The performance and payout range (threshold, target and maximum incentive opportunity) of annual cash incentives for each of our NEOs is provided in the table titled “Grants of Plan-Based Awards”. The actual award paid, as shown in the table above, is also provided in the “Non-Equity Incentive Plan Compensation” column of the “Summary Compensation Table” below.
Long-Term Incentive Program
Long-Term Incentive Program We believe that Dana’s long-term performance is driven through an ownership culture that rewards executives for creating and maximizing shareholder value. Our Long-Term Incentive Program (LTIP) provides participants, including our NEOs, with incentive awards that serve an important role by balancing short-term goals with long-term shareholder value creation while minimizing risk-taking behaviors that could negatively affect long-term results. The Compensation Committee approves the amount of the annual long-term incentive award, which is based on a percentage of the NEO’s base salary. Each NEO’s award opportunity is based on a target dollar value (determined prior to the beginning of the performance period) assigned to his or her position based on market comparisons for similar positions, using both Peer Group and general industry market data. Following its market data review for 2023, the Compensation Committee approved an increase to Mr. Kraus’ LTIP target opportunity from 250% to 275% of base salary to maintain alignment with long-term incentive opportunities afforded chief financial officers of the companies in Dana’s Peer Group. Similarly, the Compensation Committee approved an increase to Mr. Foster’s target opportunity from 225% to 240% of base salary in alignment with peer and market comparisons. All other target opportunities were left unchanged. The annual LTIP award was delivered through two vehicles, one half of the total target value in the form of performance share awards (PSAs) and the other half through restricted stock units (RSUs). We believe both PSAs and RSUs are forms of performance-based incentive compensation because PSAs provide direct alignment with shareholder interests and the value of RSUs fluctuates based on stock price performance. In addition to the 2023 annual LTIP awards, the Compensation Committee provided Messrs. Kamsickas, Kraus, Aghili and Liedberg each a one-time additional long-term incentive, to recognize their effective response to recent macroeconomic and industry-related volatility and uncertainty, including navigating the company through the severely disrupted supply chain caused by the pandemic, and each executive’s continuing role in the Company’s e-Mobility transformation. The awards were in the form of additional performance shares that are subject to the same performance criteria as the annual performance shares awarded as part of the 2023 LTIP. Additionally, any net shares received when the awards vest will not count toward share ownership requirements. The grant date values of the awards are shown in the table below. A further description of the LTIP and the performance shares is found in the following paragraphs.
Long-Term Incentive Program
| NEO | LTIP Target Opportunity (% of Base Salary) | LTIP Target Opportunity ($ Value) | Additional Performance Share Award ($ Value) | | James K. Kamsickas | 700% | $9,282,000 | $2,500,000 | | Timothy R. Kraus | 275% | $1,993,750 | $130,000 | | Aziz S. Aghili | 250% | $1,687,500 | $500,000 | | Byron S. Foster | 240% | $1,536,000 | — | | Douglas H. Liedberg | 200% | $1,200,000 | $390,000 |
Long-Term Incentive Program
In addition to requiring achievement of performance criteria in respect of the performance shares, PSAs and RSUs require the NEO to remain employed with Dana for three years from the grant date, unless the NEO departs and is retirement eligible (retirement is defined as age 60 with at least 10 years of service, or age 65 regardless of service) whereby a prorated award is paid, or upon certain other termination events described below. The grant date value of PSAs and RSUs granted to each of our NEOs in 2023 (using the valuation methodologies required by the SEC disclosure rules) is shown in the “Summary Compensation Table”.
Performance Shares
Performance Shares The LTIP is designed to provide PSAs to a select group of senior executives, including our NEOs. PSAs are tied to the achievement of financial performance measures, Adjusted EBITDA and Adjusted Free Cash Flow, and Total Shareholder Return relative to the S&P 1500 Autos & Components index (“Relative TSR”). Each metric is measured over a three-year performance period (2023-2025) and PSAs can be earned from 0% to 200% of target opportunity. This combination of metrics incentivizes performance associated with profitability, cash flow and shareholder return and is intended to drive execution of our long-term financial and strategic objectives while aligning with investor interests. The value of performance shares is also tied to Dana’s stock price performance, which further aligns the executives’ interests with those of shareholders. The target opportunities of the 2023 PSAs for the NEOs, including the additional award, are shown in the table below:
Performance Shares
| NEO | PSA 2023 Target Award Opportunity (# shares) | | James K. Kamsickas | 385,167 | | Timothy R. Kraus | 60,780 | | Aziz S. Aghili | 72,478 | | Byron S. Foster | 41,423 | | Douglas H. Liedberg | 53,398 |
Restricted Stock Units
Restricted Stock Units The other half of the LTIP design consists of RSU awards. We use RSUs to motivate and reward executives for improving long-term stock value and to serve as a retention tool. RSUs are generally granted in February to approximately 175 senior management employees, including our NEOs, and vest ratably on the first, second and third anniversary of the grant date, provided the recipient remains employed by Dana when the awards vest. The RSUs awarded in 2023 to the NEOs are shown in the table below.
Restricted Stock Units
| NEO | Number of RSUs Awarded in 2023 | | James K. Kamsickas | 250,323 | | Timothy R. Kraus | 53,768 | | Aziz S. Aghili | 45,509 | | Byron S. Foster | 41,423 | | Douglas H. Liedberg | 32,362 |
Restricted Stock Units
Equity awards granted to each of our NEOs are shown in the “Grants of Plan-Based Awards” table and “Summary Compensation Table” below.
2021 Performance Share Plan
2021 Performance Share Plan December 31, 2023 marked the end of the three-year performance period for the 2021 PSAs. The performance metrics, performance payout ranges, and target growth criteria for these awards were set and approved by the Compensation Committee in February 2021. Under the 2021 LTIP, the number of performance shares that vest and could be earned by the NEOs was based on the level of achievement associated with two Company financial metrics, Adjusted EBITDA and Adjusted Free Cash Flow, and a third performance metric, Relative Total Shareholder Return (TSR), compared to a peer group index. The initial performance targets for Adjusted EBITDA and Adjusted Free Cash Flow were established by the Compensation Committee at the beginning of the three-year performance period in alignment with our 2021 operating plan. Targets for the second and third years of the performance period were set based on the actual performance of the prior year and applying a predetermined level of growth for each metric in the following year. In each year of the plan, measurement against that year’s targets determined the number of performance shares earned during the year and banked for distribution at the end of the performance period. Target Relative TSR was also established at the beginning of the performance period, with Company TSR performance relative to the performance of the S&P 1500 Autos & Components index at the end of the performance period determining the number of performance shares earned for the metric. The table below summarizes the results of the 2021 performance share plan.
2021 Performance Share Plan
| | 2021-2023 Targets | | | | Actual Performance | Percentage Achievement | | Performance Metrics | Weight | Threshold | Target | Maximum | | | | Adjusted EBITDA | 40% | | | | | | | ► 2021 Performance Year | | $728M | $910M | $1,092M | $795M | 7.0% | | ► 2022 Performance Year | | $672M | $840M | $1,008M | $700M | 5.0% | | ► 2023 Performance Year | | $596M | $745M | $894M | $906M | 26.7% | | Adjusted Free Cash Flow | 40% | | | | | | | ► 2021 Performance Year | | $200M | $250M | $300M | ($211)M | 0.0% | | ► 2022 Performance Year | | ($223)M | ($186)M | ($149)M | $209M | 26.7% | | ► 2023 Performance Year | | $187M | $234M | $281M | $36M | 0.0% | | Relative TSR (percentile) | 20% | 25th | 50th | 75th | 24th | 0% | | Weighted Payout: | | | | | | 65.4% |
2021 Performance Share Plan
| NEO | Performance Shares Target Award (# shares) | Performance Share Payout (# shares) | | James K. Kamsickas | 153,382 | 100,311 | | Timothy R. Kraus | 7,509 | 4,910 | | Aziz S. Aghili | 28,958 | 18,937 | | Douglas H. Liedberg | 22,407 | 14,653 |
Role of the Compensation Committee and Chairman and CEO
| ► | Establishing incentive compensation and performance goals and objectives for our executive officers and other eligible executives and management, and determining whether performance objectives have been achieved; and |
Role of the Compensation Committee and Chairman and CEO
| ► | Recommending employment and severance agreements for our Chairman and CEO and other senior executives to the Board. |
Role of the Independent Compensation Consultant
Role of the Independent Compensation Consultant The Compensation Committee’s charter states the Committee may retain outside compensation consultants, legal counsel or other advisors. The Committee retains an independent compensation consultant, Mercer US LLC (Mercer), a wholly owned subsidiary of Marsh & McLennan Companies, Inc. (MMC), to advise it on certain compensation matters. The Committee has the sole authority to retain, compensate and terminate any independent compensation consultants of its choosing. In connection with the Compensation Committee’s engagement of Mercer, the Committee considered factors relevant to Mercer’s independence, including six factors specified by NYSE rules, and determined that Mercer’s work does not raise any conflict of interest. The Committee requested Mercer’s advice on a variety of issues, including compensation strategy, market comparisons, review of our Peer Group, pay and performance alignment versus industry peers, executive pay trends, stock ownership guidelines, compensation best practices and potential compensation plan designs and modifications. Mercer provided the Peer Group and general industry compensation data to management and the Compensation Committee, and it was used as a frame of reference for establishing compensation targets for base salary, annual bonus and long-term incentives for all of our NEOs at the beginning of 2023. In addition to its services for the Compensation Committee, separate and distinct from executive and director compensation consulting services, Mercer provided select services for Dana in various other capacities in 2023. Those services included other global compensation consulting where Mercer data was most relevant in a given country. Mercer’s fees for executive compensation consulting in fiscal year 2023 were $181,655. During the fiscal year, Dana retained Mercer (and its MMC affiliates) to provide services unrelated to executive compensation. The aggregate fees paid for these other services were $21,625. These other services were not approved by our Board of Directors or the Compensation Committee because they relate to broad-based compensation and benefit plans. Our management used Pay Governance LLC (Pay Governance) for additional executive compensation advice.
Mitigation of Potential Risk in Pay Programs
| ► | Caps on annual incentive payouts; |
Mitigation of Potential Risk in Pay Programs
| ► | Financial performance-based annual incentive program; |
Mitigation of Potential Risk in Pay Programs
| ► | Long-term incentive awards that are delivered in the form of equity; |
Mitigation of Potential Risk in Pay Programs
| ► | Use of multiple metrics and performance periods to determine annual and long-term incentive payouts; and |
CEO Employment Agreement
CEO Employment Agreement As Chairman and Chief Executive Officer, Mr. Kamsickas has an executive employment agreement with the Company. Terms of the employment agreement can be found in the “CEO Employment Agreement” section below. No other NEO has an employment agreement.
Severance Arrangements
Severance Arrangements We administer an executive severance plan (Executive Severance Plan) in which our current NEOs participate, except for Mr. Kamsickas, whose severance compensation, other than for a change in control, is governed by his employment agreement. We also provide a double-trigger change in control severance plan (Change in Control Severance Plan) in which all of our NEOs participate. The Change in Control Severance Plan provides severance benefits as a result of a qualifying termination of employment after a change in control. These arrangements provide certainty to both Dana and the former executive as to their rights and obligations to each other, including restrictive covenants and non-compete agreements.
Executive Severance Plan
Executive Severance Plan The Executive Severance Plan provides severance compensation to eligible executives, including our NEOs whose employment is involuntarily terminated other than by reason of death, disability or cause prior to a change in control. Severance compensation for our Chairman and CEO is provided in his employment agreement.
Change in Control Severance Plan
Change in Control Severance Plan The Change in Control Severance Plan provides severance benefits to eligible executives whose employment is involuntary terminated as a result of a change in control. Each of our current NEOs is eligible to participate in the plan. We believe that such a plan helps to both retain and attract executives by reducing the personal uncertainty that arises from the possibility of a future business combination or restructuring. Dana believes that the Change in Control Severance Plan helps to increase shareholder value by encouraging executives to consider change in control transactions that are in the best interest of Dana and its shareholders, even if the transaction may ultimately result in termination of their employment. The plan contains a double-trigger provision (i.e., termination of employment after a change in control) for the vesting of equity awards and for distributing severance payments in the event of any change in control. No excise tax gross-up is provided under this plan. Additional information on the terms and conditions of these plans as they relate to our NEOs is described in the section entitled “Potential Payments and Benefits upon Termination or Change in Control” below.
SUMMARY COMPENSATION TABLE
SUMMARY COMPENSATION TABLE
SUMMARY COMPENSATION TABLE
| Name and Principal Position(1) | Year | Salary ($) | Bonus ($) | Stock Awards ($)(2)(3) | Non-Equity Incentive Plan Compensation ($)(4) | Change in Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($)(5) | Total ($) | | James K. Kamsickas Chairman and Chief Executive Officer | 2023 | 1,326,000 | 0 | 11,958,807 | 3,407,922 | 0 | 634,425 | 17,327,154 | | | 2022 | 1,275,000 | 0 | 9,139,212 | 1,435,523 | 0 | 32,513 | 11,882,248 | | | 2021 | 1,237,500 | 0 | 8,478,178 | 467,188 | 0 | 433,137 | 10,616,003 | | Timothy R. Kraus Senior Vice President and Chief Financial Officer | 2023 | 725,000 | 0 | 2,157,831 | 1,227,531 | 0 | 84,676 | 4,195,038 | | | 2022 | 600,000 | 0 | 1,621,879 | 331,020 | 0 | 61,301 | 2,614,200 | | | 2021 | 459,993 | 0 | 526,550 | 134,550 | 0 | 66,836 | 1,187,929 | | Aziz S. Aghili Executive Vice President and President, Commercial Vehicle Drive and Motion Systems | 2023 | 675,000 | 0 | 2,221,257 | 915,363 | 0 | 142,895 | 3,954,515 | | | 2022 | 650,000 | 0 | 1,669,207 | 394,472 | 0 | (502,049) | 2,211,630 | | | 2021 | 635,000 | 0 | 1,866,082 | 155,480 | 0 | 39,788 | 2,696,350 | | Byron S. Foster Senior Vice President and President, Light Vehicle Drive Systems | 2023 | 640,000 | 0 | 1,564,669 | 812,229 | 0 | 76,562 | 3,093,460 | | | 2022 | 590,000 | 0 | 1,346,668 | 335,592 | 0 | 53,241 | 2,325,501 | | Douglas H. Liedberg Senior Vice President, General Counsel and Secretary, Chief Compliance and Sustainability Officer | 2023 | 600,000 | 0 | 1,614,425 | 769,205 | 0 | 210,078 | 3,193,708 | | | 2022 | 572,500 | 0 | 1,328,095 | 335,514 | 0 | 46,359 | 2,282,468 | | | 2021 | 543,750 | 0 | 1,219,614 | 115,115 | 0 | 163,048 | 2,041,527 |
SUMMARY COMPENSATION TABLE
Footnotes:
SUMMARY COMPENSATION TABLE
| (1) The latest position held by the named executive officer as of December 31, 2023. |
SUMMARY COMPENSATION TABLE
| (2) With respect to the 2023, 2022, and 2021 grants, this column shows the grant date value of the PSAs and RSUs computed in accordance with FASB ASC 718, Compensation – Stock Compensation. Also included in this column are dividend equivalent units earned on RSUs in the applicable year which are subject to the same vesting conditions as the underlying awards. For additional information regarding the assumptions used in determining fair value for share-based compensation, refer to Notes 1 and 11 of the Notes to the Consolidated Financial Statements in Dana’s Annual Report on Form 10-K for the year ended December 31, 2023. Refer to the “Grants of Plan-Based Awards” table below for information on awards made in 2023. Refer to the “Outstanding Equity Awards at Fiscal Year-End” table for the market value of awards not vested as of December 31, 2023. The values of the PSAs at the grant date if the highest level of performance conditions were to be achieved would be as follows: Mr. Kamsickas—$14,282,000; Mr. Kraus—$2,253,750; Mr. Aghili—$2,687,500; Mr. Foster—$1,536,000; Mr. Liedberg—$1,980,000. |
SUMMARY COMPENSATION TABLE
| (3) Based upon metric performance over the three-year period ending December 31, 2023, the PSAs granted in 2021 as part of the NEOs 2021 LTIP award resulted in an aggregate payout of 65.4% of target as summarized below: |
SUMMARY COMPENSATION TABLE
| Name | Total 2021 LTIP Grant Date Value | Grant Date Value of RSUs | Grant Date Value of PSAs | Value of Actual Payout of PSAs | | James K. Kamsickas | $7,311,957 | $3,718,217 | $3,593,740 | $1,326,111 | | Timothy R. Kraus | $357,846 | $181,910 | $175,936 | $64,910 | | Aziz S. Aghili | $1,380,446 | $701,960 | $678,486 | $250,347 | | Douglas H. Liedberg | $1,068,075 | $543,079 | $524,996 | $193,713 |
SUMMARY COMPENSATION TABLE
The 2021 LTIP was comprised of an award of 50% RSUs and 50% PSAs. Under the 2021 LTIP, the number of performance shares that vest and could be earned by the NEOs was based on the level of achievement associated with two Company financial metrics, Adjusted EBITDA and Adjusted Free Cash Flow, and a third performance metric, Relative Total Shareholder Return (TSR) compared to a peer group index. The payout of PSAs awarded in 2021 was 65.4% of target based on metric performance, further described in the 2021 LTIP performance section of the “Compensation Discussion and Analysis”.
SUMMARY COMPENSATION TABLE
| (4) This column shows the cash incentive awards earned for performance under our 2023 AIP. For years 2022 and 2021, the amount shown reflects cash incentive awards pursuant to the annual incentive payable in the reported year. |
SUMMARY COMPENSATION TABLE
| (5) The total values shown for the individuals during 2023 include benefits set forth below. |
SUMMARY COMPENSATION TABLE
| a. | James K. Kamsickas: $24,750 for contributions to Dana Retirement Savings Plan (401(k)); $182,364 for credits to Dana Restoration Plan; $410,341representing the change in value of the supplemental executive retirement plan; $10,908 for life benefits (including AD&D and group variable universal life insurance); $550 for executive physical; and $5,512 for business-related spousal travel. |
SUMMARY COMPENSATION TABLE
| b. | Timothy R. Kraus: $24,750 for contributions to Dana Retirement Savings Plan (401(k)); $54,451 for credits to Dana Restoration Plan; $1,894 for life benefits (including AD&D and group variable universal life insurance); $1,850 for executive physical; and $1,731 for business-related spousal travel. |
SUMMARY COMPENSATION TABLE
| c. | Aziz S. Aghili: $24,750 for contributions to Dana Retirement Savings Plan (401(k)); $55,460 for credits to Dana Restoration Plan; $232,625representing the change in value of the supplemental executive retirement plan; $4,765 for life benefits (including AD&D and group variable universal life insurance); and ($174,705), for international assignment benefits, comprised primarily of assignment-related tax credits, and which includes tax gross-down payments totaling ($6,514). |
SUMMARY COMPENSATION TABLE
| d. | Byron S. Foster: $24,750 for contributions to Dana Retirement Savings Plan (401(k)); $48,419 for credits to Dana Restoration Plan; $1,865 for life benefits (including AD&D and group variable universal life insurance; and $1,527 for business-related spousal travel. |
SUMMARY COMPENSATION TABLE
| e. | Douglas H. Liedberg: $24,750 for contributions to Dana Retirement Savings Plan (401(k)); $45,414 for credits to Dana Restoration Plan; $137,886 representing the change in value of the supplemental executive retirement plan; and $2,028 for life benefits (including AD&D and group variable universal life insurance). |
SUMMARY COMPENSATION TABLE
The following table contains information on grants of awards to named executive officers in the fiscal year ended December 31, 2023 under the 2017 Dana Incorporated Omnibus Incentive Plan (the “2017 Plan”), the 2021 Dana Incorporated Omnibus Incentive Plan (the “2021 Plan”) and the 2023 Annual Operating Plan.
Grants of Plan-Based Awards at Fiscal Year-End
Grants of Plan-Based Awards at Fiscal Year-End
Grants of Plan-Based Awards at Fiscal Year-End
| Name | Type of Award | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | | | All Other Stock Awards: Number of Shares of Stock or Units (#)(3) | Grant Date Fair Value of Stock Awards ($)(4) | | | | | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | James K. Kamsickas | Performance Share Award | 2/14/2023 | | | | 192,583 | 385,167 | 770,334 | | 7,140,996 | | | Restricted Stock Unit Award | 2/14/2023 | | | | | | | 262,639 | 4,817,811 | | | Annual Incentive Plan | | 795,600 | 1,989,000 | 3,978,000 | | | | | | | Timothy R. Kraus | Performance Share Award | 2/14/2023 | | | | 30,390 | 60,780 | 121,560 | | 1,126,861 | | | Restricted Stock Unit Award | 2/14/2023 | | | | | | | 56,144 | 1,030,970 | | | Annual Incentive Plan | | 290,000 | 725,000 | 1,450,000 | | | | | | | Aziz S. Aghili | Performance Share Award | 2/14/2023 | | | | 36,239 | 72,478 | 144,956 | | 1,343,742 | | | Restricted Stock Unit Award | 2/14/2023 | | | | | | | 47,860 | 877,515 | | | Annual Incentive Plan | | 216,000 | 540,000 | 1,080,000 | | | | | | | Byron S. Foster | Performance Share Award | 2/14/2023 | | | | 20,711 | 41,423 | 82,846 | | 767,982 | | | Restricted Stock Unit Award | 2/14/2023 | | | | | | | 43,424 | 796,687 | | | Annual Incentive Plan | | 192,000 | 480,000 | 960,000 | | | | | | | Douglas H. Liedberg | Performance Share Award | 2/14/2023 | | | | 26,699 | 53,398 | 106,796 | | 989,999 | | | Restricted Stock Unit Award | 2/14/2023 | | | | | | | 34,064 | 624,426 | | | Annual Incentive Plan | | 180,000 | 450,000 | 900,000 | | | | | |
Grants of Plan-Based Awards at Fiscal Year-End
Footnotes:
Grants of Plan-Based Awards at Fiscal Year-End
| (1) These columns reflect the potential payments for each of the named executive officers under our 2023 AIP. As discussed in the Annual Performance-Based Cash Incentive section of the “Compensation Discussion and Analysis” above, the actual payout for the 2023 AIP was 167% of target based on 2023 performance against established metrics. Refer to the “Non-Equity Incentive Plan Compensation” column of the “Summary Compensation Table” for individual payouts. Refer to the 2023 AIP portion of the “Compensation Discussion and Analysis” section above for additional information on such program, including the performance targets that correspond to the potential payments listed. |
Grants of Plan-Based Awards at Fiscal Year-End
| (2) These columns reflect the potential issuance of shares for each of the NEOs under the PSA component of the 2023 LTIP. As discussed in the LTIP awards section of the “Compensation Discussion and Analysis,” PSAs account for fifty percent (50%) of the 2023 LTIP and such awards cliff vest at the end of the three-year period based on performance against established metrics. As noted in the table, Messrs. Kamsickas, Kraus, Aghili, and Liedberg each received an additional grant of PSAs in 2023, as described in the LTIP section of the CD&A. Refer to the 2023 LTIP portion of the “Compensation Discussion and Analysis” section above for additional information on such program, including the performance targets that correspond to the potential payouts listed. |
Grants of Plan-Based Awards at Fiscal Year-End
| (3) This amount represents the number of RSUs granted as a component of the 2023 LTIP and dividend equivalent units granted in 2023. As discussed in the LTIP section of the CD&A, RSUs accounted for fifty percent (50%) of the 2023 LTIP. The RSUs ratably vest over the three (3) year period after the date of grant. |
Grants of Plan-Based Awards at Fiscal Year-End
| (4) This column represents the fair value (at grant date) of PSAs, RSUs and dividend equivalents granted to each of the NEOs in 2023. The value of the PSAs and RSUs is calculated using the closing stock price on the date of grant. The value of PSAs assumes a target level of performance. The value of the dividend equivalents is calculated using the closing stock price on the dividend payment date. |
Grants of Plan-Based Awards at Fiscal Year-End
The following table provides information about PSAs and RSUs awarded under the 2017 and 2021 Omnibus Incentive Plans for each named executive officer that were outstanding as of December 31, 2023. Each outstanding award is shown separately. The market value of the stock awards is based on the closing market price of Dana common stock on December 29, 2023 of $14.61 per share.
Outstanding Equity Awards at Fiscal Year-End
Outstanding Equity Awards at Fiscal Year-End
Outstanding Equity Awards at Fiscal Year-End
| Name | Plan Year | Stock Awards | | | | | | | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(7) ($) | | James K. Kamsickas | 2023 | 257,369(1) | 3,760,161 | 770,334(4) | 11,254,580 | | | 2022 | 138,386(2) | 2,021,819 | 398,082(5) | 5,815,978 | | | 2021 | 54,211(3) | 792,023 | 100,311(6) | 1,326,111 | | Timothy R. Kraus | 2023 | 55,280(1) | 807,641 | 121,560(4) | 1,775,992 | | | 2022 | 23,257(2) | 339,785 | 66,904(5) | 977,467 | | | 2021 | 2,650(3) | 38,717 | 4,910(6) | 64,910 | | Aziz S. Aghili | 2023 | 46,788(1) | 683,573 | 144,956(4) | 2,117,807 | | | 2022 | 25,194(2) | 368,084 | 72,478(5) | 1,058,904 | | | 2021 | 8,898(3) | 130,000 | 18,937(6) | 250,347 | | Byron S. Foster | 2023 | 42,587(1) | 622,196 | 82,846(4) | 1,210,380 | | | 2022 | 20,582(2) | 300,703 | 59,210(5) | 865,058 | | | 2021 | 5,310(3) | 77,579 | 0 | 0 | | Douglas H. Liedberg | 2023 | 33,271(1) | 486,089 | 106,796(4) | 1,560,290 | | | 2022 | 21,275(2) | 310,828 | 51,070(5) | 746,133 | | | 2021 | 7,921(3) | 115,726 | 14,653(6) | 193,713 |
Outstanding Equity Awards at Fiscal Year-End
Footnotes:
Outstanding Equity Awards at Fiscal Year-End
| (1) RSUs granted on February 14, 2023 vest ratably on the subsequent three (3) grant date anniversaries. |
Outstanding Equity Awards at Fiscal Year-End
| (2) RSUs granted on February 15, 2022 vest ratably on the subsequent three (3) grant date anniversaries. Figures also include an additional grant for Mr. Liedberg (6,947 RSUs on February 15, 2022, including dividend equivalent units, vesting ratably on the subsequent two (2) grant date anniversaries). |
Outstanding Equity Awards at Fiscal Year-End
| (3) RSUs granted on February 9, 2021 vest ratably on the subsequent three (3) grant date anniversaries. Figures also include an additional grant for Mr. Foster (7,825 RSUs on June 30, 2021, including dividend equivalent units, vesting ratably on the subsequent three (3) grant date anniversaries. |
Outstanding Equity Awards at Fiscal Year-End
| (4) PSAs granted on February 14, 2023 cliff vest after three-year performance period. |
Outstanding Equity Awards at Fiscal Year-End
| (5) PSAs granted on February 15, 2022 cliff vest after three-year performance period. |
Outstanding Equity Awards at Fiscal Year-End
| (6) This figure reflects the shares earned from the PSA component of the LTIP award issued on February 9, 2021 based on weighted performance results of 65.4%. |
Outstanding Equity Awards at Fiscal Year-End
| (7) For the PSAs granted in 2023, the amounts in this column reflect the market value of 200% of the PSAs granted (i.e., maximum performance) based on the closing stock price of $14.61 on December 29, 2023. For the PSAs granted in 2022, the amounts in this column reflect the market value of 200% of the PSAs granted (i.e., maximum performance) based on the closing stock price of $14.61 on December 29, 2023. For the PSAs granted in 2021, the amounts in this column reflect actual aggregate performance based on achievement of 65.4% of the PSAs granted for the performance period ended December 31, 2023. |
Outstanding Equity Awards at Fiscal Year-End
The following table provides information concerning the vesting of PSAs and RSUs during the fiscal year ended December 31, 2023, for each of the named executive officers.
Stock Vested During Fiscal Year
Stock Vested During Fiscal Year
Stock Vested During Fiscal Year
| | Stock Awards | | | Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(1) | | James K. Kamsickas | 356,649 | 6,511,019 | | Timothy R. Kraus | 32,150 | 564,410 | | Aziz S. Aghili | 74,182 | 1,311,023 | | Byron S. Foster | 19,108 | 332,284 | | Douglas H. Liedberg | 55,981 | 1,022,778 |
Stock Vested During Fiscal Year
Footnotes:
Stock Vested During Fiscal Year
| (1) These values represent the vesting of RSUs and were determined by using the closing price of our common stock on the New York Stock Exchange on each vesting date. |
Stock Vested During Fiscal Year
The following table provides information on the nonqualified deferred compensation of the named executive officers with respect to the fiscal year ended December 31, 2023.
Nonqualified Deferred Compensation at Fiscal Year-End
Nonqualified Deferred Compensation at Fiscal Year-End
Nonqualified Deferred Compensation at Fiscal Year-End
| Name | Dana Credits in 2023 ($) | Aggregate Earnings in 2023 ($) | Aggregate Withdrawals / Distributions in 2023 ($) | Aggregate Balance on 12/31/2023 ($) | | James K. Kamsickas | 389,478(1) | 402,397(2) | 776,005 | 3,256,447 | | Timothy R. Kraus | 54,451(1) | 100,569 | 0 | 543,534 | | Aziz S. Aghili | 135,671(1) | 275,902 | 0 | 1,950,928 | | Byron S. Foster | 48,419(1) | 5,307 | 0 | 88,080 | | Douglas H. Liedberg | 115,578(1) | 150,260 | 0 | 975,939 |
Nonqualified Deferred Compensation at Fiscal Year-End
Footnotes:
Nonqualified Deferred Compensation at Fiscal Year-End
| (1) Includes credit under the Restoration Plan for employer fixed and matching contributions that exceed the IRS limits for our qualified 401(k) plan and credit under the supplemental executive retirement plan described below. This credit is also reflected in Footnote 5 of the “Summary Compensation Table” above. |
Nonqualified Deferred Compensation at Fiscal Year-End
| Restoration Plan Company Credits ($ value) | | Supplemental Executive Retirement Plan Company Credits ($ value) | | | James K. Kamsickas | 182,364 | James K. Kamsickas | 207,114 | | Timothy R. Kraus | 54,451 | Timothy R. Kraus | 0 | | Aziz S. Aghili | 55,460 | Aziz S. Aghili | 80,211 | | Byron S. Foster | 48,419 | Byron S. Foster | 0 | | Douglas H. Liedberg | 45,414 | Douglas H. Liedberg | 70,164 |
Nonqualified Deferred Compensation at Fiscal Year-End
| (2) Includes earnings on employee deferrals in the deferred compensation plan as well as the plans referenced in footnote 1. |
Pay Versus Performance Table
Pay Versus Performance Table In accordance with disclosure requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K, the following information describes the relationship between compensation actually paid to our NEOs and certain financial performance of the Company. For additional information regarding the alignment of our compensation programs with the Company’s performance, refer our “Compensation Discussion & Analysis”. The table below summarizes Summary Compensation Table (“SCT”) total compensation reported for, and Compensation Actually Paid (“CAP”, as defined by the SEC) to, our CEO and, on average, our other NEOs.
Pay Versus Performance Table
| Year | Summary Compensation Table Total for CEO(1) | Compensation Actually Paid to CEO(1)(2)(3) | Avg Summary Compensation Table Total for Non-CEO NEOs(1)(2) | Average Compensation Actually Paid to Non-CEO NEOs(1)(2)(3) | Value of Initial Fixed $100 Investment Based on:(4) | | Net Income (Loss) (Millions USD) | Adjusted EBITDA(5) (Millions USD) | | | | | | | Company TSR | Peer Group TSR | | | | 2023 | $17,327,154 | $14,595,591 | $3,609,177 | $3,117,256 | $87 | $180 | $38 | $845 | | 2022 | $11,882,248 | $4,464,658 | $2,357,617 | $1,393,365 | $87 | $138 | ($242) | $700 | | 2021 | $10,616,003 | $12,396,926 | $2,112,689 | $2,368,441 | $129 | $152 | $197 | $795 | | 2020 | $10,536,432 | $4,949,534 | $2,943,844 | $1,819,391 | $108 | $120 | ($31) | $593 |
Pay Versus Performance Table
| (1) James K. Kamsickas, Chairman of the Board and CEO, was our principal executive officer (“PEO”) during the period covered by the table. The individuals comprising the non-CEO NEOs for each fiscal year presented are listed below. |
Pay Versus Performance Table
| 2020 | 2021 | 2022 | 2023 | | Jonathan M. Collins | Jonathan M. Collins | Timothy R. Kraus | Timothy R. Kraus | | Aziz S. Aghili | Timothy R. Kraus | Aziz S. Aghili | Aziz S. Aghili | | Robert D. Pyle | Aziz S. Aghili | Byron S. Foster | Byron S. Foster | | Douglas H. Liedberg | Douglas H. Liedberg | Douglas H. Liedberg | Douglas H. Liedberg | | | Antonio Valencia | | |
Pay Versus Performance Table
| (2) These columns reflect Compensation Actually Paid (CAP) calculated in accordance with Item 402(v) of Regulation S-K. CAP does not necessarily reflect compensation actually earned, realized, or received. The amounts reflect the Summary Compensation Table totals with certain adjustments as described below. |
Pay Versus Performance Table
| (3) CAP reflects the deduction and addition of certain amounts for the CEO and the Non-CEO NEOs as set forth below. Amounts in the columns titled Deduction of Grant Date Fair Value of Stock Awards from Summary Compensation Table are the totals from the Stock Awards column shown in the applicable Summary Compensation Table. Amounts in the columns titled Additions to Summary Compensation Table include the net addition of the following: (i) the year end fair value of any equity awards granted in the applicable year that are outstanding and unvested as of the end of the year; (ii) the change in fair value as of fiscal year end compared to prior year end fair value for unvested and outstanding awards granted in prior fiscal years; and (iii) the change in fair value as of vesting date compared to prior year end fair value for vested awards granted in prior years. |
Pay Versus Performance Table
| Year | Summary Compensation Table Total for CEO | Deduction of Grant Date Fair Value of Stock Awards from Summary Compensation Table | Additions to Summary Compensation Table | Compensation Actually Paid to CEO | | 2023 | $17,327,154 | ($11,958,807) | $9,227,244 | $14,595,591 | | 2022 | $11,882,248 | ($9,139,212) | $1,721,622 | $4,464,658 | | 2021 | $10,616,003 | ($8,478,178) | $10,259,101 | $12,396,926 | | 2020 | $10,536,432 | ($8,282,900) | $2,696,002 | $4,949,534 |
Pay Versus Performance Table
| Year | Summary Compensation Table Total for Non-CEO NEOs | Deduction of Grant Date Fair Value of Stock Awards from Summary Compensation Table | Additions to Summary Compensation Table | Compensation Actually Paid to Non-CEO NEOs | | 2023 | $3,609,177 | ($1,889,546) | $1,397,625 | $3,117,256 | | 2022 | $2,357,617 | ($1,491,462) | $527,210 | $1,393,365 | | 2021 | $2,112,689 | ($1,341,617) | $1,597,369 | $2,368,441 | | 2020 | $2,943,844 | ($1,681,355) | $556,902 | $1,819,391 |
Pay Versus Performance Table
The amounts deducted or added in calculating the equity award adjustments are as follows:
Pay Versus Performance Table
| Year | Year End Value of Awards Granted During Covered Fiscal Year for CEO | Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Fiscal Years | Change in Fair Value as of Vesting Date of Equity Awards Granted in Prior Fiscal Years that Vested in the Fiscal Year | Total for CEO | | 2023 | $9,453,700 | ($1,341,376) | $1,114,920 | $9,227,244 | | 2022 | $6,279,348 | ($4,196,181) | ($361,545) | $1,721,622 | | 2021 | $7,280,424 | $2,411,826 | $566,851 | $10,259,101 | | 2020 | $4,396,119 | ($1,939,322) | $239,205 | $2,696,002 |
Pay Versus Performance Table
| Year | Year End Value of Awards Granted During Covered Fiscal Year for Non-CEO NEOs | Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Fiscal Years | Change in Fair Value as of Vesting Date of Equity Awards Granted in Prior Fiscal Years that Vested in the Fiscal Year | Total for Non-CEO NEOs | | 2023 | $1,492,741 | ($185,415) | $90,299 | $1,397,625 | | 2022 | $1,032,045 | ($441,736) | ($63,099) | $527,210 | | 2021 | $1,166,629 | $352,447 | $78,293 | $1,597,369 | | 2020 | $903,781 | ($393,554) | $46,675 | $556,902 |
Pay Versus Performance Table
| (4) The peer groups used to calculate Peer Group TSR are our compensation peer group as disclosed in the CD&A section of this proxy statement, our 2023 proxy statement, our 2022 proxy statement and our 2021 proxy statement. TSR is based on the value of an initial fixed investment of $100 invested (with reinvestment of dividends) in the Company and in the peer group companies for the period starting December 31, 2019 through the end of the listed year, weighted by market capitalization in each applicable year. |
Pay Versus Performance Table
| (5) We determined Adjusted EBITDA to be the most important financial performance measure used to link Company performance to Compensation Actually Paid to our CEO and non-CEO NEOs in 2023. Adjusted EBITDA is defined as net income (loss) before interest, income taxes, depreciation, amortization, equity grant expense, restructuring expense, nonservice cost components of pension and other postretirement benefits costs and other adjustments not related to our core operations (gain/loss on debt extinguishment, pension settlements, divestitures, impairment, etc.). |
Relationship Between CEO and Non-CEO NEO Compensation Actually Paid and Total Shareholder Return (“TSR”)
Relationship Between CEO and Non-CEO NEO Compensation Actually Paid and Total Shareholder Return (“TSR”) The following chart depicts the relationship between Compensation Actually Paid to our CEO, the average of Compensation Actually Paid to our Non-CEO NEOs, and TSR for the Company and our TSR peer group.
Relationship Between CEO and Non-CEO NEO Compensation Actually Paid and Net Income
Relationship Between CEO and Non-CEO NEO Compensation Actually Paid and Net Income The following chart sets forth the relationship between Compensation Actually Paid to our CEO, the average of Compensation Actually Paid to our Non-CEO NEOs, and our net income (loss).
Relationship Between CEO and Non-CEO NEO Compensation Actually Paid and Adjusted EBITDA
Relationship Between CEO and Non-CEO NEO Compensation Actually Paid and Adjusted EBITDA The following chart sets forth the relationship between Compensation Actually Paid to our CEO, the average of Compensation Actually Paid to our Non-CEO NEOs, and our Adjusted EBITDA.
2023 Performance Measures
2023 Performance Measures The measures listed below represent the most important metrics we used to link executive pay to company performance for 2023 as described in our CD&A within the sections titled “Annual Performance-Based Cash Incentive” and “Long-Term Incentive Program”.
2023 Performance Measures
| Most Important Performance Measures | | Adjusted EBITDA | | Adjusted EBITDA Margin | | Adjusted Free Cash Flow | | Net Electrification Sales | | Relative TSR |
2023 Performance Measures
TRANSACTIONS OF EXECUTIVE OFFICERS WITH DANA None of the executive officers of Dana or members of their immediate families or entities with which they have a position or relationship had any transactions with Dana since January 1, 2023. For information on procedures and policies for reviewing transactions between Dana and its executive officers, their immediate family members and entities with which they have a position or relationship, see “Review of Transactions with Related Persons.” COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION Messrs. Mack, McDonald, Hernández, Miller and Icahn (prior to his resignation from the Board) served as members of the Compensation Committee. No such member of the Compensation Committee is, or was during 2023, an officer or employee of Dana or any of its subsidiaries, nor was any such member formerly an officer of Dana or any of its subsidiaries. Moreover, no such member is an officer of a company in which an executive officer of Dana is a member of its compensation committee. PROPOSAL I SUBMITTED FOR YOUR VOTE ELECTION OF DIRECTORS Under our Bylaws, each director will hold office on the Board until the election and qualification of a successor at an annual meeting of shareholders or until his or her earlier resignation, disqualification, removal, death or other cause. The members of our Board are elected by the holders of shares of common stock at each meeting of shareholders held for the purpose of electing directors. Our Board currently consists of ten (10) directors. Virginia A. Kamsky, who joined our Board in 2011, will not stand for reelection at the 2024 Annual Meeting of Shareholders. As a result, this year you are voting on the election of nine (9) candidates for the Board of Directors. Based on the recommendation of the Nominating and Corporate Governance Committee, the Board has nominated the following current Directors for election: Ernesto M. Hernández, Gary Hu, James K. Kamsickas, Bridget E. Karlin, Michael J. Mack, Jr., R. Bruce McDonald, Steven D. Miller, Diarmuid B. O’Connell and Keith E. Wandell. Each of the nominees has consented to his or her nomination and has agreed to serve as a director of Dana, if elected. In addition, pursuant to our Corporate Governance Guidelines, a director must retire from the Board of Directors at the next annual shareholders meeting following the director’s 73rd birthday. The guidelines also authorize the full Board of Directors to waive this retirement requirement at its discretion. Consistent with these Corporate Governance Guidelines, the Board of Directors has waived the mandatory retirement age with respect to Mr. Wandell, who has reached the age of 73, in light of his tenure as Lead Independent Director and two prior terms as Chairman of the Board, as well as his deep industry expertise. The Board has adopted Director Selection and Retention Guidelines. Under these Guidelines, the Board identifies individuals qualified to become members of the Board and elects candidates to fill new or vacant positions. Potential candidates for Board positions are identified through a variety of means, including individuals identified by the Nominating and Corporate Governance Committee, the use of search firms, recommendations of Board members, recommendations of executive officers and properly submitted shareholder recommendations. Potential candidates for nomination as director candidates must provide written information about their qualifications and participate in interviews conducted by individual Board members. Candidates are evaluated using the guidelines described below to determine their qualifications based on the information supplied by the candidates and information obtained from other sources. The Board will consider shareholder recommendations for directors that meet the criteria set forth below. The Board makes no distinctions in evaluating nominees for positions on the Board based on whether or not a nominee is recommended by a shareholder. Shareholders who wish Dana to consider their recommendations for nominees for the position of director should submit their recommendations in writing to Dana Incorporated, 3939 Technology Drive, Maumee, Ohio 43537, Attention: Corporate Secretary, using the same deadline for nominations under our advance notice bylaw set forth in the ‘Questions and Answers’ section above. Dana has established criteria it considers when identifying nominees for director. Criteria for assessing nominees include a potential nominee’s ability to represent the long-term interests of Dana. Minimum qualifications for a director nominee are experience in those areas that the Board determines are necessary and appropriate to meet the needs of Dana, including leadership positions in public companies, large or middle market businesses, or not-for-profit, governmental, professional or educational organizations. For those proposed director nominees who meet the minimum qualifications, the Board assesses the proposed nominee’s specific qualifications, evaluates his or her independence (including, but not limited to, independence related to Dana, other Board members and shareholders), and considers other factors, including skills, business segment representation, geographic location, diversity, standards of integrity, memberships on other boards (with a special focus on director interlocks), and ability and willingness to commit to serving on the Board for an extended period of time and to dedicate adequate time and attention to the affairs of Dana as necessary to properly discharge his or her duties. Additionally, the Board considers whether each nominee would be considered a “financial expert” or “financially literate” as described in applicable listing standards, legislation and our Audit Committee guidelines. Additionally, our Corporate Governance Guidelines, Standards of Business Conduct for Members of the Board of Directors, Related-Party Transactions Policy and Director Independence Standards are considered prior to making a recommendation to the Board for approval of a nominee. Each of these documents is available on Dana’s website at www.dana.com. DANA’S BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE NOMINEES FOR DIRECTOR. INFORMATION ABOUT THE NOMINEES Our Board currently consists of ten (10) directors. Virginia A. Kamsky, who joined our Board in 2011, will not stand for reelection at the 2024 Annual Meeting of Shareholders. All of our directors are elected annually serving a one-year term expiring at the next annual meeting of shareholders. The following section provides information as of February 26, 2024 about each nominee for election as a Director. The information provided includes the age of each individual; the individual’s principal occupation and special qualifications; employment and business experience during the past five years, including employment with Dana; other public company or registered investment company directorships held during the past five years; and the year in which the director became a director of Dana.
NOMINEES FOR DIRECTOR
NOMINEES FOR DIRECTOR
NOMINEES FOR DIRECTOR
| ERNESTO M. HERNÁNDEZ | Director since 2022 | | Mr. Hernández, 66, is retired. Most recently, Mr. Hernández served as President and Managing Director of General Motors de Mexico, a wholly owned subsidiary of General Motors Company, a global automotive manufacturing business, from June 2011 to August 2019 and was responsible for all operations of General Motors Company in Mexico, Central America, and the Caribbean. Mr. Hernández is a veteran mobility-industry executive with extensive knowledge of product engineering, manufacturing, planning program management, sales, marketing, and the aftermarket. Mr. Hernández is currently a board member of Constellation Brands, Inc. and BRP, Inc. and prior board member of Grupo KUO S.A.B. de C.V. and DINE, S.A.B. de C.V. | | | GARY HU | Director since 2022 | | Mr. Hu, 36, has been a Portfolio Manager of Icahn Capital LP a subsidiary of Icahn Enterprises L.P., a diversified holding company engaged in a variety of businesses, since October 2020. Prior to joining Icahn Capital LP, Mr. Hu held investment management roles at Silver Point Capital LP, a credit-focused investment firm, and Stockbridge Investors, the public securities affiliate of Berkshire Partners LLC, a private equity firm. Mr. Hu currently serves on the board of Bausch + Lomb Corporation and International Flavor & Fragrances Inc., and was previously on the board of Cloudera Inc., Newell Brands, Inc., and Occidental Petroleum Corporation. Mr. Hu has significant work and investment experience in the automotive industry and an educational background in finance, accounting, engineering and technology. | | | JAMES K. KAMSICKAS | Director since 2015 | | Mr. Kamsickas, 57, has served as Chairman of the Board of Directors since December 2019, and President and Chief Executive Officer of Dana Incorporated since August 2015. Prior to joining Dana, he served as President and Chief Executive Officer of International Automotive Components (IAC) Group S.A., a leading global supplier of automotive interior components and systems. He also served as a member of IAC’s Board of Directors from 2007-2015. Prior to that, he spent 18 years at Lear Corporation in numerous domestic and international positions, ultimately as leader of its Interior Systems Division. Mr. Kamsickas currently serves on the Board of Trustees of the Manufacturers Alliance for Productivity and Innovation (MAPI) and the United Way of Greater Toledo and is a member of the Toledo Rotary Foundation. Mr. Kamsickas has served more than 17 years as a CEO of global manufacturers of powertrains, electrodynamics, sealing, thermal, fuel cell, digital solutions, acoustics, exteriors, interiors, seating, and aftersales and service. Under his leadership, Dana has grown annual sales by more than 80 percent and evolved into a leader in both conventional and clean-energy solutions that support nearly every vehicle manufacturer around the globe. Built on a 120-year history as a leading mechanical systems supplier, Dana is now capable of supplying complete, in-house mechanical drivetrain and e-Propulsion systems – including thermal, sealing, software, and control technology – for all powertrain configurations found on the world’s most advanced internal-combustion, hybrid, and all-electric vehicles. | |
NOMINEES FOR DIRECTOR
| BRIDGET E. KARLIN | Director since 2019 | | Ms. Karlin, 67, is the Senior Vice President of Information Technology at Kaiser Permanente, an integrated managed health care consortium, since 2021. Prior to her current position, Ms. Karlin served as Global Managing Director and Global Chief Technology Officer of IBM Corporation, a technology company that creates, develops and manufactures advanced hardware, software and cloud computing technologies, leveraging AI, open source and security, from 2017 to 2021. Ms. Karlin served as General Manager of Intel Corporation from 2011 to 2017. Ms. Karlin has over thirty years of advanced technology experience, as well as executive management, financial and business experience which provide the Board with insights to strategic growth areas in guiding Dana to be successful in global markets. | | | MICHAEL J. MACK, JR. | Director since 2018 | | Mr. Mack, 67, is retired. Most recently, Mr. Mack served as Group President, John Deere Financial Services, Global Human Resources and Public Affairs at Deere & Company, a manufacturer of agricultural, construction, and forestry machinery, diesel engines used in heavy equipment, and lawn care equipment, from October 2014 to November 2016. In addition, Mr. Mack served as the company’s President, Worldwide Construction & Forestry Division from June 2009 to October 2014. Mr. Mack also served as Senior Vice President and Chief Financial Officer of Deere from January 2006 to May 2009. He served as the company’s Vice President and Treasurer from June 2004 to January 2006. Also, Mr. Mack served as Senior Vice President, Marketing and Administration for the company’s Worldwide Commercial & Consumer Equipment Division from 1999 to 2004. He held assignments in dealer systems, business development, treasury, engineering, purchasing, manufacturing and marketing during his career at Deere. Mr. Mack began his career at the John Deere Des Moines Works as a summer intern engineer. Mr. Mack brings a strong background in executive management, serving in three different senior executive roles at a global corporation. In addition, Mr. Mack brings to the Board his expertise in corporate finance, financial reporting and accounting gained as the Chief Financial Officer of a large public company. The Board also benefits from Mr. Mack’s extensive knowledge related to the business operations of the off-highway vehicle market. | | | R. BRUCE MCDONALD | Director since 2014 | | Mr. McDonald, 63, is retired. Most recently, Mr. McDonald served as Chairman and Chief Executive Officer of Adient plc, a global automotive supplier from October 2016 to June 2018. He previously served as Executive Vice President and Vice Chairman of Johnson Controls, Inc., a global manufacturer of automotive, power and building solutions, from September 2014 to October 2016. Mr. McDonald also served as Executive Vice President and Chief Financial Officer from 2005 to September 2014. Mr. McDonald joined Johnson Controls in November 2001 as Vice President and Corporate Controller and was promoted to Assistant Chief Financial Officer in 2004. Mr. McDonald currently serves as chairman of the board of directors of Andrew Peller Limited. Mr. McDonald’s extensive experience as Chairman and CEO of a global automotive parts supplier as well as his former roles as Vice Chairman and Chief Financial Officer of a global manufacturer provides him with an informed understanding of the financial issues and risks that affect Dana. Additionally, Mr. McDonald’s international experience provides the Board with a global perspective helping our Board identify opportunities and minimize risks. | | | STEVEN D. MILLER | Director since 2023 | | Mr. Miller, 35, has been a Portfolio Manager of Icahn Capital LP, a subsidiary of Icahn Enterprises L.P., a diversified holding company engaged in a variety of businesses, since October 2020. Prior to joining Icahn Capital LP, Mr. Miller was a Research Analyst at BlueMountain Capital Management, LLC (a New-York headquartered privately held diversified alternative asset management firm) from 2013 to 2019 and an Analyst at Goldman, Sachs & Co. from 2011 to 2013. Mr. Miller currently serves on the board of Bausch Health Companies Inc. and Conduent Incorporated and was previously on the board of Herc Holdings Inc. and Xerox Holdings Corporation. Mr. Miller has significant work and investment experience as a portfolio manager and securities analyst in investing, finance, capital markets, capital allocation decisions, and complex debt matters. | |
NOMINEES FOR DIRECTOR
| DIARMUID B. O’CONNELL | Director since 2018 | | Mr. O’Connell, 60, is the former Vice President of Business and Corporate Development and was a member of the executive team at Tesla, Inc., a global designer, developer, manufacturer and seller of fully electric vehicles. He served in this role from July 2006 to September 2017. Mr. O’Connell served as Chief Strategy Officer, Global Head of Business Development and Partnerships of Fair, a vehicle leasing subscription service, from January 2018 to April 2019. Mr. O’Connell previously served as Chief of Staff for Political Military Affairs at the United States State Department, where he was involved in policy and operational support to the United States military in various theaters of operation. Prior to his tenure in Washington, Mr. O’Connell worked in corporate strategy as a management consultant for Accenture, as co-founder of educational software developer, Real Time Learning, and as a senior executive with both McCann Erickson Worldwide and Young and Rubicam. Mr. O’Connell is currently a board member of Albemarle Corporation, VolvoCars AB, Clarios LLC and The Mobility House AG, a private software development company in the energy management sector. Mr. O’Connell’s strong background as a senior executive of a global automotive manufacturer and provides the Board of Directors a valuable resource in the areas of automotive electrification and technology. Mr. O’Connell also has an extensive background in corporate strategy that the Board will be able to leverage as a part of Dana’s overall enterprise strategy. Additionally, Mr. O’Connell provides the Board a unique perspective as a former executive of a global original equipment manufacturer. | | | KEITH E. WANDELL | Director since 2008 | | Mr. Wandell, 74, is retired and has served as Lead Independent Director since December 2019. Prior to his current position, he served as Chairman of the Board of Directors from September 2016 to December 2019. Mr. Wandell served as President and Chief Executive Officer of Harley-Davidson, Inc., a global motorcycle manufacturer, from May 2009 to May 2015 as well as its Chairman from 2012 to May 2015. Mr. Wandell served as President and Chief Operating Officer of Johnson Controls, Inc. from July 2006 until May 2009. He was Executive Vice President of Johnson Controls from August 2003 to July 2006 and President of its Automotive and Battery Division from August 2003 to July 2006. Mr. Wandell was a board member of Harley-Davidson, Inc. and is currently a board member of Dover Corporation. He is a past chairman of the board of directors of Exide Technologies and prior member of the board of directors of Constellation Brands, Inc. Mr. Wandell is the former Chairman and Chief Executive Officer of one of the world’s largest motorcycle manufacturers, bringing to our Board the perspective of a leader facing a set of external economic, social, and governance issues similar to those faced by Dana. | |
NOMINEES FOR DIRECTOR
CORPORATE GOVERNANCE Our Board of Directors has established guidelines that it follows in matters of corporate governance. Our Corporate Governance Guidelines describe our corporate governance practices and address corporate governance issues such as Board composition and responsibilities, compensation of directors and executive succession planning. The following summary provides highlights of those guidelines. A complete copy of our Corporate Governance Guidelines is available online at http://www.dana.com.
Transactions with Icahn Group
| Name(1) | Fees Earned or Paid in Cash ($)(2) | Stock Awards ($)(3) | Total ($) | | Ernesto M. Hernández | 140,000 | 153,184 | 293,184 | | Gary Hu | 140,000 | 153,184 | 293,184 | | Brett M. Icahn(4) | 119,837 | 152,376 | 272,213 | | Virginia A. Kamsky | 150,000 | 153,184 | 303,184 | | Bridget E. Karlin | 140,000 | 153,184 | 293,184 | | Michael J. Mack, Jr. | 150,000 | 153,184 | 303,184 | | R. Bruce McDonald | 155,000 | 153,184 | 308,184 | | Steven D. Miller(4) | 20,163 | 39,856 | 60,019 | | Diarmuid B. O’Connell | 150,000 | 153,184 | 303,184 | | Keith E. Wandell | 180,000 | 153,184 | 333,184 |