DEF 14A of Littelfuse Inc /De
Filed Mar 14, 2024 · FY20230001140361-24-013241
PROPOSAL NO. 1 – ELECTION OF DIRECTORS
PROPOSAL NO. 1 – ELECTION OF DIRECTORS The Board currently consists of ten members. All of our current directors, except for Mr. Cary T. Fu, who will be retiring at the 2024 Annual Meeting, are standing for re-election. Therefore, we are asking our stockholders to elect nine directors at the annual meeting to serve a term of one year and until their successors have been duly elected and qualified. The nominees for director, all of whom are now serving as directors, are listed below together with certain biographical information as of February 27, 2024.
PROPOSAL NO. 1 – ELECTION OF DIRECTORS
| Name | Position | | Kristina A. Cerniglia | Director | | Tzau-Jin Chung | Director | | Gayla J. Delly | Director | | Maria C. Green | Director | | Anthony Grillo | Director | | David W. Heinzmann | Director | | Gregory N. Henderson | Director | | Gordon Hunter | Chairman of the Board | | William P. Noglows | Lead Independent Director |
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR ALL
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR ALL
OF THE DIRECTOR NOMINEES
OF THE DIRECTOR NOMINEES
OF THE DIRECTOR NOMINEES
| Committee Membership: Audit Compensation | Kristina A. Cerniglia, 57 | Director since 2018 | | | Ms. Cerniglia has served as Senior Vice President & Chief Financial Officer for Briggs & Stratton, a global producer of engines for outdoor power equipment, and a designer, manufacturer and marketer of lithium-ion battery, standby generator, energy storage system, lawn and garden, turf care and job site products since June 2022. Prior to that, she served as Senior Vice President and Chief Financial Officer for Hillenbrand, Inc. (NYSE: HI), a global diversified industrial company with multiple market-leading brands that serve a wide variety of industries across the globe, from 2014 to June 2022. Ms. Cerniglia served as Vice President and Corporate Controller and in various other capacities at Stanley Black & Decker, a global provider of power and hand tools, mechanical access solutions and electronic monitoring systems from 1997 to 2014. Ms. Cerniglia holds a bachelor’s degree in finance from Bentley College. In nominating Ms. Cerniglia for election as a director, our Board focused on her 30 years of diverse financial and industry experience and leadership as important attributes to help enhance and shape our growth strategy. | |
OF THE DIRECTOR NOMINEES
| | 2024 Proxy Statement | 5 |
OF THE DIRECTOR NOMINEES
| Committee Membership: Compensation Chair Nominating and Governance Technology | Tzau-Jin Chung, 61 | Director since 2007 | | | Mr. Chung has served as a Founding Senior Partner of Core Industrial Partners LLC, a private equity firm investing in lower to middle market manufacturing companies in North America, since 2017. From 2013 to May 2016, Mr. Chung served as president and chief executive officer of Navman Wireless and Teletrac Inc., a global market leader in GPS-based fleet management solutions. From 2007 to December 2012, Mr. Chung was chief executive officer of Navman Wireless. Previously, Mr. Chung served as president of the New Technologies Division of Brunswick Corporation (NYSE: BC) from 2002 to 2007. Mr. Chung served on the board of directors of MasterCraft Boat Holdings, Inc. (NASDAQ: MCFT) from December 2016 through October 2022, and has served on the board of directors of Airgain, Inc. (NASDAQ: AIRG) since October 2018, and Fathom Digital Manufacturing Corporation (NYSE: FATH) since December 2021. Mr. Chung holds a bachelor’s degree in science, electrical and computer engineering from the University of Texas – Austin, an MS in computer science from North Carolina State University and an MBA from the Fuqua School of Business at Duke University. In nominating Mr. Chung for election as a director, our Board focused on his past experience in developing new products, corporate-wide strategic planning, mergers and acquisitions, information technology and his experience with operations in Asia as important attributes for his continuing to serve as one of our directors. | | | Committee Membership: Audit | Gayla J. Delly, 63 | Director since September 2023 | | | Ms. Delly served as Chief Executive Officer of Benchmark Electronics, Inc. (NYSE: BHE), a solutions provider for high technology OEM customers, from 2012 until her retirement in 2016, and served on the board of directors of Benchmark from 2011 to 2016. She previously held several leadership positions at Benchmark, including President from 2006 to 2011, Executive Vice President and Chief Financial Officer from 2001 to 2006, and Corporate Controller and Treasurer from 1995 to 2001. Ms. Delly is a certified public accountant and was a Senior Audit Manager at KPMG before joining Benchmark. Ms. Delly served on the board of directors of National Instruments Corporation (NASDAQ: NATI) from 2020 until its acquisition in 2023, Broadcom Inc. (NASDAQ: AVGO) since 2017, and Flowserve Corporation (NYSE: FLS) since 2008. Ms. Delly holds a bachelor’s degree in accounting from Samford University. In nominating Ms. Delly for election as a director, our Board focused on her board leadership and broad management experience across companies operating in diverse end markets as important attributes for her continuing to serve as one of our directors. | | | Committee Membership: Audit Nominating and Governance | Maria C. Green, 71 | Director since 2020 | | | Ms. Green served as the Senior Vice President and General Counsel of Ingersoll-Rand plc (NYSE: IR), a diversified manufacturing company, from 2015 until her retirement in June 2019. Prior to that, she served in various capacities at Illinois Tool Works (NYSE: ITW), a producer of engineered fasteners and components, equipment and consumable systems and specialty products, most recently as Senior Vice President, General Counsel and Secretary, from 1997 to 2015. Ms. Green has served on the boards of directors of Tennant Company (NYSE: TNC) since March 2019, WEC Energy Group (NYSE: WEC) since July 2019, and Fathom Digital Manufacturing Corporation (NYSE: FATH) since July 2021. Ms. Green holds a bachelor’s degree in sociology/economics from the University of Pennsylvania and Juris Doctorate from Boston University School of Law. In nominating Ms. Green for election as a director, our Board focused on her experience as a global public company leader, her comprehensive skills including strategic planning, acquisitions and enterprise risk management and her expertise in matters of corporate governance as important attributes for her continuing to serve as one of our directors. | |
OF THE DIRECTOR NOMINEES
| | 2024 Proxy Statement | 6 |
OF THE DIRECTOR NOMINEES
| Committee Membership: Audit Nominating and Governance Chair | Anthony Grillo, 68 | Director since 1991 | | | Mr. Grillo was one of the founders of the American Securities opportunity funds established in 2005. Mr. Grillo served as Managing Director of the American Securities opportunity funds until his retirement in 2018. From 2001 through 2004, Mr. Grillo served as Senior Managing Director of Evercore Partners, Inc. (NYSE: EVR), an investment banking boutique providing advisory services to multinational corporations on significant mergers, acquisitions, divestitures, restructurings and other strategic corporate transactions, where he founded the restructuring practice for the firm. From 1999 through 2001, Mr. Grillo served as Senior Managing Director of Joseph Littlejohn & Levy, Inc., a private equity firm. From 1991 through 1999, Mr. Grillo was a Senior Managing Director of the Blackstone Group L.P. (NYSE:BX). Mr. Grillo served on the board of directors of Oaktree Acquisition Corp. II (NYSE:OACB) from September 2020 until its merger with Alvotech Holdings S.A. in June 2022. He previously served on the board of directors of Oaktree Acquisition Corp. (NYSE: OAC) from June 2019 until its merger with Hims & Hers Health, Inc. in January 2021. Mr. Grillo holds a bachelor’s degree in economics from Rutgers University and an MBA from Wharton Business School. In nominating Mr. Grillo for election as a director, our Board focused on his past experience in the financial markets and his experience with corporate acquisitions as important attributes for his continuing to serve as one of our directors. | | | Committee Membership: Technology Chair | David W. Heinzmann, 60 | Director since 2017 | | | Mr. Heinzmann has served as our President and Chief Executive Officer and a member of the Board since January 2017. He previously served as our Chief Operating Officer from 2014 to 2017. Mr. Heinzmann began his career at Littelfuse in 1985 as a manufacturing engineer and since then has held positions of increasing responsibility. From 2004 through 2007, he served as Vice President and General Manager, Automotive segment, and then as Vice President, Global Operations until 2014. Mr. Heinzmann has served as a director of Gentherm Inc. (NASDAQ: THRM) since August 2020. He previously served on the board of directors of Pulse Electronics Corporation from 2014 until its acquisition by Yageo Corporation in May 2018. Mr. Heinzmann holds a bachelor’s degree in mechanical engineering from Missouri University of Science and Technology. In nominating Mr. Heinzmann for election as a director, our Board focused on his management and operational expertise and extensive experience with Littelfuse as a key driver for continued growth and evolution of the Company. | | | Committee Membership: Technology | Gregory N. Henderson, 55 | Director since May 2023 | | | Dr. Henderson is the Senior Vice President of the Automotive & Energy, Communications, and Aerospace Group for Analog Devices, Inc. (NASDAQ: ADI), a semiconductor company specializing in data conversion, signal processing and power management technology. Prior to this, Dr. Henderson served as the Vice President RF and Microwave Business for Analog Devices from 2014 to 2017, and as the Vice President RF and Microwave Business for Hittite Microwave Corporation until its acquisition by Analog Devices in 2014. Before coming to Hittite, Dr. Henderson held various positions of increasing technical and leadership responsibility at Harris Corporation, Tyco Electronics, TriQuint Semiconductor, and IBM (NYSE: IBM). Dr. Henderson holds a bachelor’s degree in electrical engineering from Texas Tech University and a Ph.D. in electrical engineering from the Georgia Institute of Technology. In nominating Dr. Henderson for election as a director, our Board focused on his comprehensive technical skills, management experience and familiarity with our industries as important attributes for his continuing to serve as one of our directors. | |
OF THE DIRECTOR NOMINEES
| | 2024 Proxy Statement | 7 |
OF THE DIRECTOR NOMINEES
| Committee Membership: Technology | Gordon Hunter, 72 | Director since 2002 | | | Mr. Hunter has served as the Chairman of the Board since January 2018. He previously served as Executive Chairman of the Board from January 2017 through December 2017. Prior to that, Mr. Hunter served as a director from 2002 to 2003, served as Chief Operating Officer from 2003 to 2005, and served as our Chairman of the Board, President and Chief Executive Officer from 2005 until January 2017. Prior to joining Littelfuse, Mr. Hunter served as vice president, Intel communications group, and general manager, optical products group for Intel Corporation (NASDAQ: INTC) from 2002 to 2003. Prior to joining Intel in 2002, he served as president of Elo TouchSystems, a subsidiary of Raychem Corporation. Mr. Hunter also served in a variety of positions during a 20-year career at Raychem Corporation, including vice president of commercial electronics and a variety of sales, marketing, engineering and management positions. Mr. Hunter has served on the board of directors of Veeco Instruments, Inc. (NASDAQ: VECO) since 2010. He previously served on the board of directors of CTS Corporation (NYSE: CTS) from 2011 to 2022. Mr. Hunter holds a bachelor’s degree in electrical engineering from the University of Liverpool, England and an MBA from London Business School. In nominating Mr. Hunter for election as a director, our Board focused on his leadership, vision and execution as Chairman and former Chief Executive Officer in growing and reshaping the Company and setting and communicating the proper cultural and behavioral tone as important attributes for his continuing to serve as one of our directors. | | | Committee Membership: Compensation | William P. Noglows, 66 | Director since 2007 | | | Mr. Noglows served as chairman of the board of CMC Materials (f/k/a Cabot Microelectronics Corporation) (NASDAQ: CCMP), a leading worldwide supplier of consumable products used in the semiconductor manufacturing process, from January 2016 to July 2022. He previously served as executive chairman of the board from 2014 until December 2015, and served as chairman, president and chief executive officer of CMC Materials from 2003 through 2014. Prior to that, Mr. Noglows served as executive vice president and general manager at Cabot Corporation (NYSE: CBT). Mr. Noglows has served on the board of directors of Aspen Aerogels, Inc. (NYSE: ASPN) since 2014, and he also served on the Aspen board from 2011 to 2013. Mr. Noglows holds a bachelor’s degree in chemical engineering from the Georgia Institute of Technology. In nominating Mr. Noglows for election as a director, our Board focused on his experience as chief executive officer of a leading public company and his expertise in developing technology as important attributes for his continuing to serve as one of our directors. | |
OF THE DIRECTOR NOMINEES
| | 2024 Proxy Statement | 8 |
Director Compensation
Director Compensation For the 2023 fiscal year, non-employee directors received an annual retainer of $85,000, paid in quarterly installments, plus reimbursement of reasonable expenses relating to attendance of meetings. Our directors are also reimbursed for the costs associated with attending one continuing education program every three years. No fees are paid to directors who are employee directors. Additional annual retainers are paid to our Board leadership, as shown below:
Director Compensation
| Board Leadership Role | Annual Retainer | | Board Chairman | $75,000 | | Lead Director | $20,000 | | Audit Committee Chairperson | $20,000 | | Compensation Committee Chairperson | $15,000 | | Nominating and Governance Committee Chairperson | $12,000 | | Technology Committee Chairperson | $10,000 |
Director Compensation
In addition to cash compensation, each non-employee director received an annual equity grant under the Amended and Restated Littelfuse, Inc. Long-Term Incentive Plan, as amended by the First Amendment to the Littelfuse, Inc. Long-Term Incentive Plan (the “Long-Term Plan”) valued at approximately $165,000. The equity grant is comprised of (1) one-third stock options that vest equally on the first three annual anniversaries of the grant date, have an exercise price equal to the fair market value of our common stock on the date of grant, and expire seven years from the grant date, and (2) two-thirds restricted stock units (“RSUs”) that are granted upon the non-employee director’s election or reelection to the Board at the Company’s annual meeting and that vest equally on the first three annual anniversaries of the grant date. On April 27, 2023, each non-employee director then in office was granted 718 stock options having a per share exercise price of $240.76 and 468 RSUs. On May 15, 2023, upon his appointment to the Board, Dr. Henderson was granted 655 stock options having a price per share exercise price of $261.02 and 429 RSUs. On September 28, 2023, upon her appointment to the Board, Ms. Delly was granted 404 stock options having a price per share exercise price of $247.79 and 264 RSUs. The grants to Dr. Henderson and Ms. Delly each represented a pro-rated portion of the annual award of restricted stock units and stock options made to independent directors on April 27, 2023. Upon recommendation of our independent compensation consultant, for the 2024 fiscal year the following changes were made to non-employee director compensation to better align with the updated peer group’s practices:
Director Compensation
| ⯀ | Non-employee annual retainer was increased from $85,000 to $95,000 |
Director Compensation
| ⯀ | Board Chairman annual retainer was increased from $75,000 to $80,000 |
Director Compensation
| ⯀ | Lead Director annual retainer was increased from $20,000 to $25,000 |
Director Compensation
| ⯀ | Audit Committee Chairperson annual retainer was increased from $20,000 to $25,000 |
Director Compensation
| ⯀ | Compensation Committee Chairperson annual retainer was increased from $15,000 to $20,000 |
Director Compensation
| ⯀ | Nominating and Governance Committee Chairperson annual retainer was increased from $12,000 to $15,000 |
Director Compensation
| ⯀ | Annual equity grant value was increased from $165,000 to $180,000 |
Director Compensation
Non-employee directors may elect to defer receipt of their cash fees under the Littelfuse Deferred Compensation Plan for Non-employee Directors (the “Directors Plan”) and defer payout of their equity grants and any related dividend distributions. All deferrals are deposited with a third-party trustee, where they (and any distributions thereon) are invested in Littelfuse common stock. Deferrals under the Directors Plan are generally paid out when the director ceases to be a director or on the date specified by the director at the time of the non-employee director’s deferral election. Deferred payments owed to Mr. Hunter as a result of his prior service as a non-employee director are not expected to be triggered until he ceases to be a director, at which time they may be required by law to be delayed an additional six months following his separation if at that time he is determined to hold the status of a “specified employee” under Section 409A of the Internal Revenue Code of 1986, as amended.
Director Compensation
| | 2024 Proxy Statement | 9 |
Director Compensation
The following table sets forth compensation earned by or paid to non-employee directors during 2023:
Director Compensation
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Option Awards ($)(2) | All Other Compensation ($) | Total | | Kristina A. Cerniglia | $85,000 | $110,462 | $55,523 | $0 | $250,985 | | Tzau-Jin Chung | $100,000 | $110,462 | $55,523 | $0 | $265,985 | | Gayla J. Delly (3) | $21,943 | $64,068 | $33,508 | $0 | $119,519 | | Cary T. Fu (4) | $105,000 | $110,462 | $55,523 | $0 | $270,985 | | Maria C. Green | $85,000 | $110,462 | $55,523 | $0 | $250,985 | | Anthony Grillo | $97,000 | $110,462 | $55,523 | $0 | $262,985 | | Gregory N. Henderson (5) | $53,125 | $109,948 | $54,935 | $0 | $218,008 | | Gordon Hunter | $160,000 | $110,462 | $55,523 | $0 | $325,985 | | William P. Noglows | $105,000 | $110,462 | $55,523 | $0 | $270,985 | | Nathan Zommer (6) | $28,333 | $0 | $0 | $0 | $28,333 |
Director Compensation
| (1) On April 27, 2023, each director, then serving in office, received an annual RSU award of 468 shares of common stock. On May 15, 2023, Dr. Henderson received an RSU award of 429 shares of common stock. On September 28, 2023, Ms. Delly received an RSU award of 264 shares of common stock. The amounts shown reflect the grant date fair value of restricted stock unit awards computed in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718, based on assumptions described in Note 12 to our audited financial statements included in our Annual Report on Form 10-K for fiscal year ended December 30, 2023. As of December 30, 2023, each director held the following outstanding RSUs (including RSUs that have been deferred under the Long-Term Plan): Ms. Cerniglia, 932 shares; Mr. Chung, 8,240 shares; Ms. Delly, 264 shares; Mr. Fu, 932 shares; Ms. Green, 2,169 shares; Mr. Grillo, 1,706 shares; Dr. Henderson, 429 shares; Mr. Hunter, 932 shares; Mr. Noglows, 3,400 shares; and Dr. Zommer, 0 shares. |
Director Compensation
| (2) On April 27, 2023, each director, then serving in office, received an annual stock option award of 718 shares with a per share exercise price equal to $240.76 (determined based on the closing stock price on that date reported by NASDAQ). On May 15, 2023, Dr. Henderson received a stock option award of 655 shares with a per share exercise price equal to $261.02 (determined based on the closing stock price on that date reported by NASDAQ). On September 28, 2023, Ms. Delly received a stock option award of 404 shares with a price per share exercise price equal to $247.79 (determined based on the closing stock price on that date reported by NASDAQ). The amounts shown reflect the grant date fair value of stock option awards computed in accordance with FASB ASC Topic 718, based on assumptions described in Note 12 to our audited financial statements included in our Annual Report on Form 10-K for fiscal year ended December 30, 2023. As of December 30, 2023, each director held the following outstanding option awards: Ms. Cerniglia, 4,450 shares; Mr. Chung, 4,450 shares; Ms. Delly, 404 shares; Mr. Fu, 5,250 shares; Ms. Green, 3,539 shares; Mr. Grillo, 6,195 shares; Dr. Henderson, 655 shares; Mr. Hunter, 5,250 shares; Mr. Noglows, 6,195 shares; and Dr. Zommer, 3,732 shares. |
Director Compensation
| (3) Ms. Delly joined the Board on September 28, 2023. |
Director Compensation
| (4) Pursuant to Section 8 of the Littelfuse, Inc. Corporate Governance Guidelines, Mr. Fu reached the mandatory retirement age of 75, and effective April 25, 2024, Mr. Fu will be retiring as a member of the Board. |
Director Compensation
| (5) Dr. Henderson joined the Board on May 15, 2023. |
Director Compensation
| (6) Pursuant to Section 8 of the Littelfuse, Inc. Corporate Governance Guidelines, Dr. Zommer reached the mandatory retirement age of 75, and effective April 27, 2023, following the 2023 annual meeting of stockholders, Dr. Zommer retired as a member of the Board. |
Director Compensation
| | 2024 Proxy Statement | 10 |
Meetings held in 2023: 5
| ⯀ | Review and recommend to the Board for its consideration and determination the director compensation fees and equity-based awards. |
Total Rewards Philosophy
| ⯀ | Reward executives based upon our financial performance at levels competitive with peer companies; and |
Best Practices in Compensation Governance
| ✔ What We Do | ⯀ Pay for performance and allocate individual awards based on actual results ⯀ Provide an appropriate mix of short-term and long-term compensation ⯀ Require stock ownership and retention of a significant portion of equity-based awards ⯀ Prohibit pledging and speculative trading of company securities ⯀ Engage independent compensation consultant ⯀ Annually assess and mitigate compensation risk ⯀ Limit the annual incentive cash payout amounts and annual equity grants to any individual executive officer in a given year | | ✘ What We Don’t Do | ⯀ No multi-year guaranteed incentive awards for executive officers ⯀ No excise tax gross ups upon change in control payments and benefits ⯀ No discounts, reloading or re-pricing stock options ⯀ No incentives that encourage excessively risky behavior ⯀ No dividend equivalents are paid on unearned restricted stock units ⯀ No excessive perquisites |
Allocation between Short-Term and Long-Term Compensation
Allocation between Short-Term and Long-Term Compensation The allocation between short-term and long-term compensation is based primarily on competitive market practices relative to base salaries, annual incentive awards and long-term incentive values, as opposed to a targeted allocation between short-term and long-term pay. We also consider certain internal factors that may cause us to target a particular element of a NEO’s compensation differently. These internal factors may include the NEO’s operating responsibilities, management level and tenure and performance in the position. We consider the total compensation to be delivered to individual NEOs, and as such, exercise discretion in determining the portion allocated to annual and long-term incentive opportunity. We believe that this “total compensation” approach provides the ability to align pay decisions with the short-term and long-term needs of the business and the interests of our stockholders. It also allows for the flexibility needed to recognize differences in performance of each NEO by providing differentiated pay.
Allocation between Short-Term and Long-Term Compensation
| | 2024 Proxy Statement | 27 |
Benchmarking
Benchmarking Competitive compensation levels for our executive officers are in part established through the review of competitive market compensation data provided by the Compensation Committee’s independent compensation consultant. This review includes base salary, annual incentive opportunities and long-term incentive opportunities for comparable companies. In 2021, we selected an industry compensation peer group as a source to evaluate compensation levels for the 2022 and 2023 fiscal years. The compensation peer group consisted of 19 publicly traded companies of reasonably similar size to us in the electronic equipment, the electronic components and equipment industry and the semiconductor/semiconductor equipment and manufacturing industry, representing different segments of our business. In 2022, CMC Materials Inc was removed from the peer group, as it was acquired. The current compensation peer group is set forth below:
Benchmarking
| Ametek, Inc. (AME) | Methode Electronics, Inc. (MEI) | | Belden, Inc. (BDC) | ON Semiconductor Corporation (ON) | | Cirrus Logic, Inc. (CRUS) | OSI Systems, Inc. (OSIS) | | Coherent Corp (f/k/a II-VI, Inc.) (COHR) | Qorvo, Inc. (QRVO) | | Diodes Incorporated (DIOD) | Rogers Corp (ROG) | | Gentex Corporation (GNTX) | Sensata Technologies Holding PLC (ST) | | Gentherm, Incorporated (THRM) | Synaptics Inc (SYNA) | | Hubbell Incorporated (HUBA, HUBB) | TTM Technologies, Inc. (TTMI) | | Knowles Corp (KN) | Visteon (VC) |
Benchmarking
As part of its ongoing review of the compensation peer group, in July 2023 the Compensation Committee approved updates to the compensation peer group for the 2024 fiscal year. This new peer group positions Littelfuse around the median of the peer group based on revenue. The following group will be used to evaluate 2024 compensation decisions for our NEOs:
Benchmarking
| Advanced Energy Industries, Inc. (AEIS) * | Methode Electronics, Inc. (MEI) | | Ametek, Inc. (AME) | ON Semiconductor Corporation (ON) | | Belden, Inc. (BDC) | OSI Systems, Inc. (OSIS) | | Cirrus Logic, Inc. (CRUS) | Qorvo, Inc. (QRVO) | | Coherent Corp (f/k/a II-VI, Inc.) (COHR) | Rogers Corp (ROG) | | Diodes Incorporated (DIOD) | Sensata Technologies Holding PLC (ST) | | Gentex Corporation (GNTX) | Synaptics Inc (SYNA) | | Gentherm, Incorporated (THRM) | TTM Technologies, Inc. (TTMI) | | Hubbell Incorporated (HUBA, HUBB) | Visteon (VC) | | Knowles Corp (KN) | |
Benchmarking
| * Indicates a new peer group company for 2024 compensation decisions |
Benchmarking
The raw data derived from each company in the compensation peer group was size-adjusted to approximate our revenues for the corresponding fiscal year. The total compensation for our NEOs is generally targeted at the 50th percentile of the competitive market data. In 2023, the Compensation Committee awarded total target compensation to Messrs. Heinzmann, Stafford, and Nayar and Mses. Sethna and Chu that was +9%, +5%, +11%, +7%, and 0%, respectively, in relation to the median of our peer group. In setting the compensation of our NEOs in 2023, the Compensation Committee considered the individual scope of responsibility of each NEO, each NEO’s historical compensation levels, the NEO’s years of experience, the NEO’s past, and expected future contributions to our success, market practice, internal equity considerations and individual performance. Additional information regarding the components of total compensation for our NEOs is discussed below under “Components of Total Compensation.”
Management and Consultants
| ⯀ | Compensation program design: Management makes recommendations in consultation with the independent compensation consultant on compensation program design and pay levels and implements the compensation programs approved by the Board. |
Management and Consultants
| ⯀ | Develop performance measures: Management identifies appropriate performance measures, recommends performance targets that are used to determine annual awards, and develops individual performance objectives for each NEO. |
Management and Consultants
| ⯀ | Compile competitive market data: Management works with the independent compensation consultant in compiling compensation information and preparing the data for presentation to the Compensation Committee. |
Compensation Risk
| ⯀ | Our annual incentive program awards are capped to limit compensation in any given year; |
Compensation Risk
| ⯀ | Our equity incentive awards vest over several years, so while the potential compensation payable for equity incentive awards is tied directly to appreciation of our stock price, taking excessive risk for a short-term gain is discouraged because it would not maximize the value of equity incentive awards over the long-term; and |
Components of Total Compensation
| Compensation Component | Purpose | Pay Mix Methodology | | Base Salary | Designed to attract, retain and motivate highly-qualified executives by paying a competitive salary. | Annualized base salary as of 12/30/2023. | | Short-Term Incentive – Annual Incentive Plan (cash awards) | Designed to provide a performance-based cash reward to executives and key employees of the Company for contributing to the achievement of our short-term company goals. | Based on an annualized target amount as a percentage of base pay. • Incentives, if earned, are typically paid in Q1 following the performance year. | | Long-Term Incentive Plan (stock option and RSU awards) | Designed to emphasize the goals of our equity compensation: (1) align each NEO’s financial interests with driving stockholder value; (2) focus the NEOs’ efforts on long-term financial performance of the Company; and (3) assist in the retention of our NEOs. • Stock option awards - Generate value only when Company’s stock price appreciates above the stock price on the date of grant and aligns to interests of shareholders. • RSU awards - Value of these awards increases if the Company’s stock price increases from stock price on the date of grant, and the value of these awards decreases if the stock price declines from stock price on the date of grant and aligns to interests of shareholders. | Based on 2023 annual grant value of long-term incentives. • Grants awarded are comprised of 50% stock options and 50% RSUs. | | Health and Welfare Programs and Perquisites | Designed to provide competitive levels of health and welfare protection and retirement and savings programs. | | | Retirement and Post-Employment Arrangements | | |
Components of Total Compensation
| B. | Annual Incentive Plan |
Components of Total Compensation
In January 2014, our Compensation Committee and our Board approved the Annual Incentive Plan and on April 25, 2014, our stockholders approved the Annual Incentive Plan (“AIP”). Administration: The Compensation Committee establishes, after (1) consulting with our CEO and CHRO, (2) reviewing the compensation peer group information and other information and advice of the independent compensation consultant and (3) discussing the financial goals and targets of the Company for the next fiscal year with our CEO and our CFO, the threshold, target and maximum amounts that may be awarded under the AIP to each NEO for the fiscal year. The annual target amounts are set as percentages of each NEO’s base salary and the maximum amounts for 2023 were set at the percentages set forth below. Determination of eligible AIP amounts: Our AIP is intended to compensate NEOs for their short-term contributions to the Company’s performance. Annual incentive awards to NEOs are granted based on the NEOs’ and the Company’s performances and are approved by the Compensation Committee and recommended to the full Board for approval. While one factor the Compensation Committee considers regarding the compensation of our NEOs is where that compensation falls in relation to the 50th percentile of the total compensation of our compensation peer group, it does not necessarily match our annual incentive awards against a certain percentile of the compensation peer group and it considers other factors, such as internal equity considerations, executive experience and the years of service of the NEO, in setting the targets as a percent of base salary. It sets the threshold, target and maximum amounts for the AIP so that, if earned, we pay sufficient total annual compensation to remain competitive. The maximum incentive amount that may be paid to an employee for a performance period is subject to a cap under the AIP, which was $2,500,000. Effective January 1, 2024, the AIP was amended and restated to (i) increase to $5,000,000 the maximum incentive amount that may be paid to an employee for a performance period, (ii) remove references to Section 162(m) given the elimination of the performance-based compensation exception as a result of the enactment of the Tax Cuts and Jobs Act of 2017 for tax years beginning on or after January 1, 2018, and make related adjustments to affected provisions, (iii) allow the Compensation Committee the discretion to adjust any awards upward, as well as downward, for any plan participant, including NEOs, and (iv) clarify that payments received under the AIP are subject to certain “clawback” rights in favor of the Company, including pursuant to the Company’s clawback policy, which is described on page 36. The following table summarizes the AIP opportunity percentages for the NEOs for 2023:
Components of Total Compensation
| | 2023 AIP Target Opportunity (as a % of 2023 Base Salary) | | | | Name | Threshold | Target | Maximum | | David W. Heinzmann | 60.0% | 120.0% | 264.0% | | Meenal A. Sethna | 40.0% | 80.0% | 176.0% | | Ryan K. Stafford | 40.0% | 80.0% | 176.0% | | Maggie Chu | 30.0% | 60.0% | 132.0% | | Deepak Nayar | 40.0% | 80.0% | 176.0% |
Components of Total Compensation
| Name | AIP Corporate Sales | AIP Earnings per Share | AIP Cash Flow from Operations | Applicable Business Unit Metrics | Individual Performance | | David W. Heinzmann | 30% | 25% | 25% | 0% | 20% | | Meenal A. Sethna | 10% | 40% | 30% | 0% | 20% | | Ryan K. Stafford | 10% | 40% | 30% | 0% | 20% | | Maggie Chu | 10% | 40% | 30% | 0% | 20% | | Deepak Nayar | 0% | 10% | 10% | 60% | 20% |
Components of Total Compensation
| (1) The performance metrics were determined as follows: |
Components of Total Compensation
| • | AIP Corporate Sales – represents our 2023 net sales as reported in our audited financial statements adjusted to exclude the Western Automation acquisition. | | • | AIP EPS – represents our 2023 AIP net income, as described below, divided by our diluted weighted-average shares and equivalent shares outstanding. “AIP net income” is calculated as our GAAP net income, as reported in our audited financial statements, excluding the after-tax impact of the following items: acquisition and integration costs; restructuring, impairment and other charges; non-operating foreign exchange gains and losses; the Western Automation acquisition; and certain other significant and unusual items. | | • | AIP Cash flow from Operations – represents our 2023 cash flow from operations, as reported in our audited financial statements. |
Components of Total Compensation
| | AIP Target | | AIP Maximum | 2023 AIP Payout (Paid in March 2024) | | | Name | % of Base Salary (1) | Amount ($) | Amount ($) | % of AIP Target | Amount of AIP Payout ($) | | David W. Heinzmann | 120% | $1,211,843 | $2,666,054 | 74.3% | $900,000 | | Meenal A. Sethna | 80% | $466,076 | $1,025,367 | 84.0% | $391,504 | | Ryan K. Stafford | 80% | $457,475 | $1,006,445 | 84.0% | $384,279 | | Maggie Chu | 60% | $231,660 | $509,652 | 84.0% | $194,594 | | Deepak Nayar | 80% | $400,629 | $881,383 | 45.0% | $180,283 |
Components of Total Compensation
| (1) For AIP purposes, incentive opportunities are based on our NEO’s 2023 annualized base salary. |
Components of Total Compensation
2024 Annual Incentive Plan: At the January 2024 Compensation Committee meeting, the Committee approved the annual incentive plan structure and performance goal weights and established the NEOs’ target annual incentive plan opportunity percentages for the 2024 AIP. Subsequently, in February 2024, the Committee also established 2024 financial performance goals under the 2024 AIP for Messrs. Heinzmann, Stafford, and Nayar and Mses. Sethna and Chu. The goals were set in commensurate with budget considering a challenging yet attainable growth year and the dynamic performance of our end markets, and they are based on the same performance metrics and weighting as in 2023. The following table summarizes each NEO’s AIP target opportunity, as a percentage of base salary for the NEOs:
Components of Total Compensation
| | 2024 AIP Opportunity (as a % of 2024 Base Salary) | | | | Name | Threshold | Target | Maximum | | David W. Heinzmann | 62.5% | 125% | 275% | | Meenal A. Sethna | 42.5% | 85% | 187% | | Ryan K. Stafford | 42.5% | 85% | 187% | | Maggie Chu | 30.0% | 60% | 132% | | Deepak Nayar | 40.0% | 80% | 176% |
Components of Total Compensation
| C. | Long-Term Incentive Compensation |
Components of Total Compensation
Consistent with prior years’ practice, in 2023 the Compensation Committee awarded a combination of two types of equity awards under the Long-Term Incentive Plan to our NEOs: stock option awards and RSUs. The stock options vest one-third annually over a three-year vesting period and have an exercise price equal to the fair market value of our common stock on the date of grant. The RSUs also vest one-third annually over a three-year vesting period. Administration: The Compensation Committee reviews the compensation peer group information, the advice of the independent compensation consultant and, for NEOs other than the CEO, the recommendation of our CEO and our CHRO with respect to the NEOs’ long-term incentive grants of stock options and RSUs. The Compensation Committee makes recommendations to the Board, other than the CEO, for the grant of stock options and RSUs to the NEOs. Determination of amounts: We target total equity compensation awards at the 50th percentile of our compensation peer group, although we also take into account other factors, such as years of experience and internal pay equity considerations, when determining total equity compensation. In 2023, based on a valuation performed by the independent compensation consultant, the Compensation Committee determined that 50% of the value of the equity awards would be made in stock options and 50% would be made in RSUs.
Components of Total Compensation
As part of the annual grant of long-term compensation in April, the restricted stock unit awards and stock options granted in 2023 to each NEO are set forth below.
Components of Total Compensation
| Name | RSU Award | RSU Vesting Schedule (1) | Stock Option Award | Option Vesting Schedule (1) | Option Grant Price | | David W. Heinzmann | 9,708 | 3-year vest | 29,800 | 3-year vest | $240.76 | | Meenal A. Sethna | 3,344 | 3-year vest | 10,265 | 3-year vest | $240.76 | | Ryan K. Stafford | 3,039 | 3-year vest | 9,329 | 3-year vest | $240.76 | | Maggie Chu | 1,395 | 3-year vest | 4,283 | 3-year vest | $240.76 | | Deepak Nayar | 2,236 | 3-year vest | 6,862 | 3-year vest | $240.76 |
Components of Total Compensation
| (1) 2023 grant of RSUs and Options vest in annual installments of 33% on each of the first three anniversaries of the grant date. |
Components of Total Compensation
| (2) Includes direct and indirect ownership of beneficially owned shares and unvested restricted stock/units. |
Components of Total Compensation
Retirement Plans We provide retirement benefits to our U.S. employees and NEOs through the following plans that are intended to be a component of a competitive compensation package. Littelfuse, Inc. 401(k) Retirement and Savings Plan NEOs may elect to participate in the Littelfuse, Inc. 401(k) Retirement and Savings Plan (“401(k) Plan”) on the same basis as all other U.S. employees. The 401(k) Plan provides employees the opportunity to save for retirement on a tax-favored basis. The Company amended and restated the 401(k) Plan, effective as of January 1, 2022. The Company provides discretionary Company contributions equal to 2% of a participant’s annual eligible pay. This is in addition to the existing Company matching contributions, which provide a dollar-for-dollar match on participant salary deferrals up to 4% of a participant’s annual eligible pay (subject to IRS compensation limits). Littelfuse, Inc. Supplemental Retirement and Savings Plan The Littelfuse, Inc. Supplemental Retirement and Savings Plan (the “Supplemental Plan”) is a non-qualified retirement plan that is intended to provide supplemental retirement income benefits to employees whose benefits under our tax-qualified 401(k) plan are limited by the application of Internal Revenue Code Section 415, which includes our NEOs. Participants can defer a portion of their annual compensation to the Supplemental Plan. The Company provides a matching contribution designed to ensure that participants receive a combined match under the Supplemental Plan and the Company’s 401(k) Plan on the first 4% of their annual compensation and on the 2% discretionary contribution, if applicable. Post-Employment Arrangements Change in Control Agreements Each of the NEOs has entered into a change of control agreement with the Company that provides certain payments and benefits on termination of employment in connection with a change of control of the Company. Additional information including the terms of our NEO’s change of control agreements is included on page 45. Employment Contracts We have not entered into an employment agreement with any NEO, other than (i) a Letter Agreement with Mr. Heinzmann, effective January 1, 2017 in connection with his assumption of the President and Chief Executive Officer role, and (ii) an Employment Offer Letter to Ms. Chu, dated April 27, 2021, as accepted by Ms. Chu on April 28, 2021, in connection with the Company’s employment of Ms. Chu as Senior Vice President and Chief Human Resources Officer. Pursuant to Mr. Heinzmann’s Letter Agreement, Mr. Heinzmann’s base salary was $700,000 for 2017 and his target bonus was set at 90% of base salary. In addition, the Letter Agreement provided for the grant of restricted stock units having a grant date value of $1,050,000, that vested entirely on the third anniversary of the grant. Pursuant to the Employment Offer Letter with Ms. Chu, her annualized base salary was set at $325,000 for 2021 and her target bonus was set at 60% of base salary. In addition, the Employment Offer Letter provided for (i) the grant of restricted stock units having an approximate equivalent value of $662,500 based on the closing price of Littelfuse common stock on the date of Ms. Chu’s hire, and (ii) the grant of options having an approximate equivalent value of $162,500, each of which vest in three annual installments beginning one year from the grant date. The Company also entered into a change of control agreement with Ms. Chu, consistent with the terms described on page 45.
2023 Summary Compensation Table
2023 Summary Compensation Table
2023 Summary Compensation Table
| Name and Principal Position | Year | Salary ($) (1) | Bonus ($) (2) | Stock Awards ($) (3) | Option Awards ($) (4) | Non-Equity Incentive Plan Compensation ($) (5) | All Other Compensation ($) (6) | Total ($) | | David W. Heinzmann President and Chief Executive Officer | 2023 | $997,691 | $0 | $2,291,379 | $2,304,434 | $900,000 | $148,002 | $6,641,506 | | | 2022 | $953,025 | $0 | $1,960,305 | $1,984,294 | $1,873,523 | $161,399 | $6,932,546 | | | 2021 | $921,885 | $0 | $1,715,931 | $1,396,152 | $2,056,862 | $79,301 | $6,170,131 | | Meenal A. Sethna Executive Vice President and Chief Financial Officer | 2023 | $569,355 | $641 | $789,284 | $793,792 | $391,504 | $83,949 | $2,628,525 | | | 2022 | $517,595 | $625 | $682,093 | $690,385 | $759,704 | $80,572 | $2,730,974 | | | 2021 | $477,978 | $200 | $618,622 | $503,293 | $751,115 | $51,783 | $2,402,991 | | Ryan K. Stafford Executive Vice President, Mergers & Acquisitions, Chief Legal Officer and Corporate Secretary (7) | 2023 | $566,346 | $0 | $717,295 | $721,412 | $384,279 | $82,479 | $2,471,811 | | | 2022 | $545,202 | $0 | $661,168 | $669,127 | $788,705 | $67,275 | $2,731,477 | | | 2021 | $527,388 | $0 | $912,752 | $742,604 | $816,010 | $55,629 | $3,054,383 | | Maggie Chu Senior Vice President and Chief Human Resources Officer (8) | 2023 | $377,324 | $665 | $329,262 | $331,204 | $194,594 | $51,059 | $1,284,108 | | | 2022 | $344,500 | $0 | $280,206 | $283,672 | $377,606 | $47,195 | $1,333,179 | | | 2021 | $189,583 | $110,000 | $676,145 | $149,649 | $219,511 | $27,144 | $1,372,032 | | Deepak Nayar Senior Vice President and General Manager, Electronics Business | 2023 | $495,971 | $0 | $527,763 | $530,638 | $180,283 | $59,865 | $1,794,520 | | | 2022 | $470,582 | $366 | $520,838 | $527,221 | $722,673 | $38,425 | $2,280,105 | | | 2021 | $434,562 | $1,575 | $391,556 | $318,587 | $612,850 | $32,126 | $1,791,256 |
2023 Summary Compensation Table
| (1) Base salary includes compensation deferred under the 401(k) Plan and the Supplemental Plan. |
2023 Summary Compensation Table
| (2) For fiscal year 2023, represents discretionary payments made to NEOs. For Mses. Sethna and Chu, amounts include discretionary bonuses earned in connection with the Company’s wellness initiatives, in the amounts of $641 and $665, respectively. For fiscal year 2022, represents discretionary bonus earned in connection with the Company’s wellness initiatives in the amount of $625 for Ms. Sethna. For Mr. Nayar, amount includes discretionary bonus earned in connection with our patent program in the amount of $366. For fiscal year 2021, represents discretionary bonus earned in connection with the Company’s wellness initiatives in the amount of $200 for Ms. Sethna. For Ms. Chu, bonus amount earned represents a cash sign-on payment included as part of her employment offer letter. For Mr. Nayar, amount includes discretionary bonus earned in connection with our patent program in the amount of $1,575. |
2023 Summary Compensation Table
| (3) Represents the full grant date fair value of RSUs for fiscal years 2023, 2022, and 2021, in accordance with FASB ASC Topic 718, based on assumptions described in Note 12 to our audited financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 30, 2023. |
2023 Summary Compensation Table
| (4) Represents the full grant date fair value of stock option awards for fiscal years 2023, 2022, and 2021, in accordance with FASB ASC Topic 718, based on assumptions described in Note 12 to our audited financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 30, 2023. |
2023 Summary Compensation Table
| (5) Represents payouts for performance under the Annual Incentive Plan. See pages 32-34 for information on how amounts were determined. |
2023 Summary Compensation Table
| (6) The amounts shown are detailed in the supplemental “All Other Compensation” table below. The amount of each NEO’s supplemental plan company matching contribution has been updated to reflect a correction that was made for the fiscal year ended December 31, 2022. Each NEO received the following corrected company |
2023 Summary Compensation Table
| | 2024 Proxy Statement | 38 |
2023 Summary Compensation Table
matching contribution attributable to the 2022 fiscal year: Mr. Heinzmann, $121,157 (previously reported as $38,882); Ms. Sethna, $42,801 (previously reported as $12,756); Mr. Stafford, $30,446 (previously reported as $14,412); Ms. Chu, $11,150 (previously reported as $2,370); and Mr. Nayar, $18,103 (previously reported as $9,957).
2023 Summary Compensation Table
| (7) Mr. Stafford was appointed as Executive Vice President, Mergers & Acquisitions, Chief Legal Officer and Corporate Secretary in June 2021 and previously served as Executive Vice President, Chief Legal and Human Resources Officer and Corporate Secretary. |
2023 Summary Compensation Table
| (8) Ms. Chu was hired as Senior Vice President and Chief Human Resources Officer in June 2021. |
Grants of Plan-Based Awards in 2023
Grants of Plan-Based Awards in 2023 The following table sets forth plan-based awards granted to our NEOs in 2023.
Grants of Plan-Based Awards in 2023
| Name | Type of Award | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/sh)(1) | Grant Date Fair Value of Stock and Option Awards (2) | | | | | Threshold ($) | Target ($) | Maximum ($) | | | | | | David W. Heinzmann | RSUs | 4/27/23 | – | – | – | 9,708(4) | – | – | $2,291,379 | | | Options | 4/27/23 | – | – | – | – | 29,800(5) | $240.76 | $2,304,434 | | | Annual Cash (3) | – | $605,921 | $1,211,843 | $2,666,054 | – | – | – | – | | Meenal A. Sethna | RSUs | 4/27/23 | – | – | – | 3,344(4) | – | – | $789,284 | | | Options | 4/27/23 | – | – | – | – | 10,265(5) | $240.76 | $793,792 | | | Annual Cash (3) | – | $233,038 | $466,076 | $1,025,367 | – | – | – | – | | Ryan K. Stafford | RSUs | 4/27/23 | – | – | – | 3,039(4) | – | – | $717,295 | | | Options | 4/27/23 | – | – | – | – | 9,329(5) | $240.76 | $721,412 | | | Annual Cash (3) | – | $228,738 | $457,475 | $1,006,445 | – | – | – | – | | Maggie Chu | RSUs | 4/27/23 | – | – | – | 1,395(4) | – | – | $329,262 | | | Options | 4/27/23 | – | – | – | – | 4,283(5) | $240.76 | $331,204 | | | Annual Cash (3) | – | $115,830 | $231,660 | $509,652 | – | – | – | – | | Deepak Nayar | RSUs | 4/27/23 | – | – | – | 2,236(4) | – | – | $527,763 | | | Options | 4/27/23 | – | – | – | – | 6,862(5) | $240.76 | $530,638 | | | Annual Cash (3) | – | $200,314 | $400,629 | $881,383 | – | – | – | – |
Grants of Plan-Based Awards in 2023
| (1) The exercise price shown for individual options is the fair market value of the Company’s common stock on the date of grant (determined based on the closing stock price on that date reported by NASDAQ). |
Grants of Plan-Based Awards in 2023
| (2) Represents the full grant date fair value of 2023 awards calculated in accordance with FASB ASC Topic 718, based on assumptions described in Note 12 to our audited financial statements included in our 2023 Annual Report on Form 10-K. There can be no assurance that amounts shown under the Grant Date Fair Value of Stock and Option Awards column will ever be realized by the NEOs. |
Grants of Plan-Based Awards in 2023
| (3) These amounts represent 2023 annual incentive cash awards granted under the Annual Incentive Plan. The actual 2023 annual incentive cash award achievements were determined by the Compensation Committee and approved by the full Board in January 2024 and are reflected in the Summary Compensation Table under the Non-Equity Incentive Plan Compensation column. Refer to pages 32–34 for additional information concerning these awards. |
Grants of Plan-Based Awards in 2023
| (4) Represents the 2023 annual grant of RSUs awarded under the Long-Term Plan that typically vest annually in installments of 33% on each anniversary of the grant date such that the RSUs are fully vested on or after three years from the date of grant. Refer to page 34-35 for additional information concerning these awards. |
Grants of Plan-Based Awards in 2023
| (5) Reflects the 2023 award of stock options under the Long-Term Incentive Plan. The underlying option awards typically vest in installments of 33% on each anniversary of the date of grant, such that options are fully exercisable on or after three years from the date of grant. Refer to page 34-35 for additional information concerning these awards. |
Grants of Plan-Based Awards in 2023
| | 2024 Proxy Statement | 40 |
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 See discussion of information presented in the Summary Compensation Table and Grants of Plan-Based Awards Table in the Compensation Discussion and Analysis starting on page 26
Outstanding Equity Awards at 2023 Fiscal Year-End
Outstanding Equity Awards at 2023 Fiscal Year-End The following table provides information regarding the outstanding equity awards held by each of the NEOs as of December 30, 2023.
Outstanding Equity Awards at 2023 Fiscal Year-End
| | | Option Awards | | | | Stock Awards | | | Name | Date of Grant | Number of Securities Underlying Unexercised Options (#) | Number of Securities Underlying Unexercised Options (#) | Option Exercise Price ($) (1) | 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 ($) (2) | | | | Exercisable | Unexercisable | | | | | | David W. Heinzmann | 4/27/2018 | 23,061 | 0 | $192.59 | 4/27/2025 | 0 | $0 | | | 4/26/2019 | 25,888 | 0 | $199.24 | 4/26/2026 | 0 | $0 | | | 4/23/2020 | 42,711 | 0 | $132.08 | 4/23/2027 | 0 | $0 | | | 4/22/2021 | 12,563 | 6,281(3) | $267.84 | 4/22/2028 | 2,166 | $579,535 | | | 4/28/2022 | 9,397 | 18,793 (5) | $231.64 | 4/28/2029 | 5,746 | $1,537,400 | | | 4/27/2023 | 0 | 29,800 (6) | $240.76 | 4/27/2030 | 9,708 | $2,597,472 | | Meenal A. Sethna | 4/27/2018 | 9,145 | 0 | $192.59 | 4/27/2025 | 0 | $0 | | | 4/26/2019 | 10,266 | 0 | $199.24 | 4/26/2026 | 0 | $0 | | | 4/23/2020 | 16,938 | 0 | $132.08 | 4/23/2027 | 0 | $0 | | | 7/31/2020 | 11,953 | 0 | $177.65 | 7/31/2027 | 0 | $0 | | | 4/22/2021 | 4,529 | 2,264 (3) | $267.84 | 4/22/2028 | 781 | $208,964 | | | 4/28/2022 | 3,270 | 6,538 (5) | $231.64 | 4/28/2029 | 1,999 | $534,852 | | | 4/27/2023 | 0 | 10,265 (6) | $240.76 | 4/27/2030 | 3,344 | $894,721 | | Ryan K. Stafford | 4/26/2019 | 10,206 | 0 | $199.24 | 4/26/2026 | 0 | $0 | | | 4/23/2020 | 16,839 | 0 | $132.08 | 4/23/2027 | 0 | $0 | | | 4/22/2021 | 6,682 | 3,341 (3) | $267.84 | 4/22/2028 | 1,152 | $308,229 | | | 4/28/2022 | 3,169 | 6,337 (5) | $231.64 | 4/28/2029 | 1,938 | $518,531 | | | 4/27/2023 | 0 | 9,329 (6) | $240.76 | 4/27/2030 | 3,039 | $813,115 | | Maggie Chu | 6/1/2021 | 1,374 | 687 (4) | $262.75 | 6/1/2028 | 870 | $232,777 | | | 4/28/2022 | 1,344 | 2,686 (5) | $231.64 | 4/28/2029 | 821 | $219,667 | | | 4/27/2023 | 0 | 4,283 (6) | $240.76 | 4/27/2030 | 1,395 | $373,246 | | Deepak Nayar | 4/22/2021 | 2,867 | 1,433 (3) | $267.84 | 4/22/2028 | 494 | $132,175 | | | 4/28/2022 | 2,497 | 4,993 (5) | $231.64 | 4/28/2029 | 1,526 | $408,297 | | | 4/27/2023 | 0 | 6,862 (6) | $240.76 | 4/27/2030 | 2,236 | $598,264 |
Outstanding Equity Awards at 2023 Fiscal Year-End
| (1) The exercise price shown for individual optionees is the fair market value of the Company’s common stock on the date of grant (determined based on the closing stock price on that date reported by NASDAQ). |
Outstanding Equity Awards at 2023 Fiscal Year-End
| (2) Values are based on the closing stock price of $267.56 per share of our common stock on the NASDAQ on December 29, 2023, the last trading day of the 2023 fiscal year. There is no assurance that if or when the RSUs vest they will have this value. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| (3) Options vest annually in installments of 33% beginning April 22, 2022, such that the options are fully exercisable on or after three years from the date of grant. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| (4) Options vest annually in installments of 33% beginning June 1, 2022, such that the options are fully exercisable on or after three years from the date of grant. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| (5) Options vest annually in installments of 33% beginning April 28, 2023, such that the options are fully exercisable on or after three years from the date of grant. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| (6) Options vest annually in installments of 33% beginning April 27, 2024, such that the options are fully exercisable on or after three years from the date of grant. |
Outstanding Equity Awards at 2023 Fiscal Year-End
Narrative disclosures of the compensation awarded to our NEOs as reported in the Summary Compensation Table and Grants of Plan-Based Awards Table are included in the Compensation Discussion and Analysis, starting on page 26.
Outstanding Equity Awards at 2023 Fiscal Year-End
| | 2024 Proxy Statement | 41 |
Option Exercises and Stock Vested in 2023
Option Exercises and Stock Vested in 2023 The following table provides the amounts received upon exercise of options or similar instruments or the vesting of stock or similar instruments during 2023 fiscal year.
Option Exercises and Stock Vested in 2023
| Name | Option Awards | | Stock Awards | | | | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) (1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) (2) | | David W. Heinzmann | 24,066 | $2,728,798 | 9,048(3) | $2,213,153 | | Meenal A. Sethna | 3,478 | $338,242 | 3,371(4) | $824,795 | | Ryan K. Stafford | 0 | $0 | 3,702(5) | $906,229 | | Maggie Chu | 0 | $0 | 1,281(6) | $322,890 | | Deepak Nayar | 6,290 | $711,198 | 6,049(7) | $1,483,596 |
Option Exercises and Stock Vested in 2023
| (1) Value Realized on Exercise represents the difference between exercise price and market price at the time of exercise, excluding any tax obligation in connection with such exercises. |
Option Exercises and Stock Vested in 2023
| (2) Determined based on the closing stock price of the Company common stock on the vesting dates, excluding tax obligations incurred in connection with such vesting. |
Option Exercises and Stock Vested in 2023
| (3) Represents 33% installment vesting of RSU award granted on April 23, 2020, April 22, 2021, and April 28, 2022. Number of shares includes 4,009 shares withheld by the Company to pay for minimum withholding tax due upon the vesting of the RSU awards on April 23, 2023, April 22, 2023, and April 28, 2023. |
Option Exercises and Stock Vested in 2023
| (4) Represents 33% installment vesting of RSU award granted on April 23, 2020, April 22, 2021, and April 28, 2022. Number of shares includes 1,428 shares withheld by the Company to pay for minimum withholding tax due upon the vesting of the RSU awards on April 23, 2023, April 22, 2023, and April 28, 2023. |
Option Exercises and Stock Vested in 2023
| (5) Represents 33% installment vesting of RSU award granted on April 23, 2020, April 22, 2021, and April 28, 2022. Number of shares includes 1,483 shares withheld by the Company to pay for minimum withholding tax due upon the vesting of the RSU awards on April 23, 2023, April 22, 2023, and April 28, 2023. |
Option Exercises and Stock Vested in 2023
| (6) Represents 33% installment vesting of RSU award granted on June 1, 2021 and April 28, 2022. Number of shares includes 375 shares withheld by the Company to pay for minimum withholding tax due upon the vesting of the RSU awards on June 1, 2023 and April 28, 2023. |
Option Exercises and Stock Vested in 2023
| (7) Represents 33% installment vesting of RSU award granted on April 23, 2020, April 22, 2021, and April 28, 2022 and 100% cliff vesting of an award granted on April 23, 2020. Number of shares includes 2,830 shares withheld by the Company to pay for minimum withholding tax due upon the vesting of the RSU awards on April 23, 2023, April 22, 2023, and April 28, 2023. |
Option Exercises and Stock Vested in 2023
| | 2024 Proxy Statement | 42 |
Nonqualified Deferred Compensation
Nonqualified Deferred Compensation The following table discloses contributions, earnings and balances under the Supplemental Plan for each NEO for 2023.
Nonqualified Deferred Compensation
| Name | Executive Contributions in Last Fiscal Year ($) (1) | Company Contributions in Last Fiscal Year ($) (2) | Aggregate Earnings (Losses) in Last Fiscal Year ($) (3) | Aggregate Withdrawals / Distributions ($) | Aggregate Balance at Last Fiscal Year-End ($) | | David W. Heinzmann | $911,249 | $115,002 | $591,920 | ($539,421) | $4,287,695 | | Meenal A. Sethna | $246,862 | $44,749 | $222,755 | $0 | $1,817,430 | | Ryan K. Stafford | $34,988 | $45,729 | $108,981 | $0 | $759,924 | | Maggie Chu | $226,479 | $17,944 | $56,740 | $0 | $393,322 | | Deepak Nayar | $0 | $38,865 | $32,800 | $0 | $241,843 |
Nonqualified Deferred Compensation
| (1) Reflects amounts that have been reported in the Salary column of the Summary Compensation Table. |
Nonqualified Deferred Compensation
| (2) These amounts reflect Company and matching contributions made under the Supplemental Plan. These amounts were reported in the All Other Compensation column of the Summary Compensation Table for 2023. These amounts include contributions that are attributable to the 2023 fiscal year but that were made in 2024 after the end of the 2023 fiscal year. |
Nonqualified Deferred Compensation
| (3) These amounts represent interest earnings/losses credited to each NEO’s account in the Supplemental Plan. Interest earnings/losses credited to these accounts are derived from the actual returns on the same investment options that are available under the 401(k) Plan, and the allocation the executives make amongst those qualified plan investment options. Given that these investment options are available to all employees participating in the non-discriminatory, tax-qualified 401(k) Plan, the interest earnings credited to the Supplemental Plan are not considered to be above market and, thus, do not need to be reported in the Change in Pension Value and Nonqualified Deferred Compensation Earnings column of the Summary Compensation Table, which column is not included in our Summary Compensation Table. |
Nonqualified Deferred Compensation
See discussion of the Supplemental Plan in the section titled “Retirement and Post-Employment Arrangements” starting on page 36.
Nonqualified Deferred Compensation
| | 2024 Proxy Statement | 43 |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
Supplemental Plan Termination Provisions
Supplemental Plan Termination Provisions Supplemental Plan account balances are at all times 100% vested, and each U.S. NEO is entitled to receive his or her Supplemental Plan account balance upon termination of employment, or if elected either (i) age 59½ or (ii) age 65 or the later of five years of service. The benefit is paid in a lump sum or installments over five years, as elected by the NEO. For purposes of the Potential Payments Upon Termination or Change in Control table below we have assumed that the account balances of the NEOs will be paid on termination of employment in a lump sum, although the NEO could have elected a different distribution date and form of payment in accordance with the Supplemental Plan.
Potential Payments upon Termination or Change in Control
Potential Payments upon Termination or Change in Control Upon the termination of employment of a NEO, they may be entitled to additional benefits or payments beyond those provided under our benefit plans, depending on the event triggering the termination. The events that would trigger a NEO’s entitlement to additional benefits or payments, and the estimated value of these additional benefits or payments, and the timing of such payments are described in the following table. As each NEO is considered a “specified employee” under Section 409A of the Internal Revenue Code of 1986, as amended, upon separation of service the payments described below for the NEO’s Supplemental Plan balance would be subject to a six-month delay. The table below has been prepared assuming a termination date and, where applicable, a change of control date, of December 29, 2023, the last business day of our 2023 fiscal year, and a stock price of $267.56 per share, which was the closing price of our common stock on such date.
Potential Payments upon Termination or Change in Control
| Name | Voluntary Resignation or Retirement (1) | Resignation for Good Reason or Involuntary Termination other than for Cause within 2 years of a Change of Control (2) | Death (3) | Disability (4) | Termination for Cause (5) | Involuntary Termination other than for Cause, Death, Disability or Change of Control (6) | | David W. Heinzmann | $10,475,787 | $15,470,858 | $8,236,973 | $7,236,973 | $4,287,695 | $15,914,367 | | Meenal A. Sethna | $1,817,430 | $5,679,768 | $3,843,500 | $2,843,500 | $1,817,430 | $3,835,386 | | Ryan K. Stafford | $2,877,441 | $5,779,539 | $2,796,231 | $1,796,231 | $759,924 | $4,877,980 | | Maggie Chu | $393,322 | $3,026,596 | $1,899,265 | $899,265 | $393,322 | $1,254,228 | | Deepak Nayar | $1,565,864 | $4,022,944 | $1,783,786 | $783,786 | $241,843 | $2,698,065 |
Potential Payments upon Termination or Change in Control
| (1) This amount represents for Messrs. Heinzmann, Stafford, and Nayar (i) the value of all unvested stock options (actual value to be determined upon exercise), (ii) the value of all unvested RSUs, and (iii) his Supplemental Plan account balance. For Mses. Sethna and Chu, this amount represents the value of each NEO’s Supplemental Plan account balance. |
Potential Payments upon Termination or Change in Control
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Potential Payments upon Termination or Change in Control
| (2) This amount represents (i) two years of annual base salary (three years for Mr. Heinzmann) payable in a lump sum on the 30th day following separation of service, (ii) two times (three times for Mr. Heinzmann) the greater of the average AIP bonuses for the previous three years and the AIP target bonus for 2023 payable in a lump sum on the 30th day following separation of service, (iii) an amount equal to the greatest of the average AIP bonuses for three years, the AIP target bonus for 2023, and the AIP bonus for 2023 based on performance through separation of service payable in a lump sum on the 30th day following separation of service, (iv) the cost of two years of continued coverage under our group health and dental plans (three years for Mr. Heinzmann), and (v) the cost of outplacement services for two years, assuming the value of this benefit is 15% of the NEO’s annual base salary. In addition, this amount includes the value of all unvested stock options (actual value to be determined upon exercise) and all unvested RSUs which vest upon termination, and the value of the NEO’s Supplemental Plan account balance. If the change of control and severance payments and benefits are above the threshold which triggers an excise tax under Section 280G of the Code, either the severance is reduced to the amount such that the excise tax is avoided or the full severance is paid with the excise tax imposed, whichever is more favorable to the executive on an after-tax basis. |
Potential Payments upon Termination or Change in Control
| (3) This amount represents (i) life insurance coverage equal to the lesser of three times the executive’s annual base salary and $1,000,000, (ii) the value of all unvested stock options which vest upon termination (actual value to be determined upon exercise), (iii) the value of a pro-rata portion of all unvested RSUs which vest upon termination, and (iv) the NEO’s Supplemental Plan account balance. |
Potential Payments upon Termination or Change in Control
| (4) This amount represents (i) the value of all unvested stock options (actual value to be determined upon exercise), (ii) the value of a pro-rata portion of all unvested RSUs, and (iii) the NEO’s Supplemental Plan account balance. |
Potential Payments upon Termination or Change in Control
| (5) This amount represents the value of each NEO’s Supplemental Plan account balance. |
Potential Payments upon Termination or Change in Control
| (6) This amount represents (i) severance benefits equal to a multiple of base and target annual bonus (2 times for Mr. Heinzmann, one and a half times for Ms. Sethna and Mr. Stafford, and one time for Ms. Chu and Mr. Nayar), (ii) AIP target bonus for 2023, (iii) the cost of continued coverage under our group health and dental plans (eighteen months for Messrs. Heinzmann and Stafford and Ms. Sethna and twelve months for Ms. Chu and Mr. Nayar), and (iv) the cost of outplacement services for one year, assuming the value of this benefit is 7.5% of the NEO’s annual base salary. In addition, this amount includes for Messrs. Heinzmann, Stafford, and Nayar the value of all unvested stock options (actual value to be determined upon exercise) and all unvested RSUs which vest upon termination, and the value of his Supplemental Plan account balance. For Mses. Sethna and Chu, this amount also includes the value of each NEO’s Supplemental Plan account balance. |
CEO PAY RATIO
CEO PAY RATIO As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K, we are providing the following information for the fiscal year 2023:
CEO PAY RATIO
| ⯀ | the median of the annual total compensation of all employees of our company (other than Mr. Heinzmann, our Chief Executive Officer), was $10,343; |
CEO PAY RATIO
| ⯀ | the annual total compensation of Mr. Heinzmann, our Chief Executive Officer, was $6,641,506; and |
CEO PAY RATIO
| ⯀ | the ratio of the annual total compensation of our Chief Executive Officer to the median of the annual total compensation of all employees, which represents a reasonable estimate calculated in accordance with SEC regulations and guidance, is 642 to 1. |
CEO PAY RATIO
Our median employee for the fiscal year 2023 is not the same employee that was used in the 2022 CEO Pay Ratio calculation. As a result of acquisition activity and footprint optimization during 2023, there were significant changes to our employee population.
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE The following table presents specified executive compensation and financial performance measures for the Company’s four most recently completed fiscal years.
PAY VERSUS PERFORMANCE
| Year | Summary Compensation Table Total for PEO (1) | Compensation Actually Paid to PEO (2) | Average Summary Compensation Table Total for Non-PEO NEOs (1) | Average Compensation Actually Paid to Non- PEO Named Executive Officers (3) | Value of Initial Fixed $100 Investment Based On: | | Net Income (5) | Adjusted Earnings Per Share (6) | | | | | | | Total Shareholder Return | Peer Group Total Shareholder Return (4) | | | | 2023 | $6,641,506 | $8,714,124 | $2,044,741 | $2,860,318 | $145.06 | $159.56 | $259.5 | $11.75 | | 2022 | $6,932,546 | $1,230,392 | $2,268,933 | $327,118 | $118.21 | $124.87 | $373.3 | $17.26 | | 2021 | $6,170,131 | $10,569,353 | $2,155,166 | $3,602,524 | $167.40 | $151.36 | $283.8 | $12.88 | | 2020 | $4,065,061 | $9,624,985 | $1,722,056 | $3,711,472 | $134.50 | $120.75 | $130.0 | $6.23 |
PAY VERSUS PERFORMANCE
| (1) The amount of the PEO and each Non-PEO NEO’s Summary Compensation Table total has been updated to reflect a correction that was made to the supplemental plan company matching contribution for the fiscal year ended December 31, 2022. Each PEO and Non-PEO NEO received the following corrected company matching contribution attributable to the 2022 fiscal year: Mr. Heinzmann, $121,157 (previously reported as $38,882); Ms. Sethna, $42,801 (previously reported as $12,756); Mr. Stafford, $30,446 (previously reported as $14,412); Ms. Chu, $11,150 (previously reported as $2,370); and Mr. Nayar, $18,103 (previously reported as $9,957). These updates have been reflected in the graphs on pages 53-54. |
PAY VERSUS PERFORMANCE
| (2) The table below outlines the amounts included as additions and deductions in the calculation of Compensation Actually Paid (CAP) for our Principal Executive Officer (PEO), David W. Heinzmann. |
PAY VERSUS PERFORMANCE
| Year | Reported Summary Compensation Table total for PEO | Reported Value of Equity Awards | | Equity Award Adjustments (a) | | Compensation Actually Paid to PEO | | | ($) | ($) Stock Awards (b) | ($) Option Awards (c) | ($) Stock Awards (d) | ($) Option Awards (e) | ($) | | 2023 | $6,641,506 | $2,291,379 | $2,304,434 | $3,184,473 | $3,483,958 | $8,714,124 | | 2022 | $6,932,546 | $1,960,305 | $1,984,294 | $361,791 | ($2,119,346) | $1,230,392 | | 2021 | $6,170,131 | $1,715,931 | $1,396,152 | $2,936,037 | $4,575,268 | $10,569,353 | | 2020 | $4,065,061 | $1,543,674 | $1,340,271 | $3,083,060 | $5,360,809 | $9,624,985 |
PAY VERSUS PERFORMANCE
| (a) The methodology for estimating the fair value of restricted stock unit awards is consistent with the methodology as described in Note 12 “Stock-Based Compensation” of the Notes to Consolidated Financial Statements included in our 2021-2023 Annual Reports on Form 10-K. The methodology for estimating the fair value of stock option awards at each applicable measurement date is consistent with the Black Scholes methodology as described in Note 12 “Stock-Based Compensation” of the Notes to Consolidated Financial Statements included in our 2021-2023 Annual Reports on Form 10-K, with the exception of the expected life assumption. The expected life assumption used in estimating the stock option valuations noted above ranges from 0.50 to 4.02 years. |
PAY VERSUS PERFORMANCE
| (b) The reported value of equity awards represents the grant date fair value of restricted stock unit awards as reported in the “Stock Awards” column of the Summary Compensation Table for each applicable year. |
PAY VERSUS PERFORMANCE
| (c) The reported value of option awards represents the grant date fair value of stock option awards as reported in the “Option Awards” column of the Summary Compensation Table for each applicable year. |
PAY VERSUS PERFORMANCE
| (d) The equity award adjustments incorporate the following additions (or subtractions, as applicable): |
PAY VERSUS PERFORMANCE
| (i) the respective year-end estimated fair value of any equity awards granted in the applicable year that are both outstanding and unvested as of each year; 2023: $2,564,562; 2022: $1,870,840; 2021: $2,027,364; 2020: $2,996,776 |
PAY VERSUS PERFORMANCE
| (ii) the amount of change in estimated fair value as of the end of each applicable year as compared to the prior fiscal year for all awards granted in prior years that remain outstanding and unvested as of each year; 2023: $382,942; 2022: ($780,780); 2021: $673,996; 2020: $443,446 |
PAY VERSUS PERFORMANCE
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PAY VERSUS PERFORMANCE
| (iii) | for all awards granted in prior years that vest in the applicable year, the amount equal to the change in fair value as of the vesting date compared to the estimated fair value from the prior fiscal year; 2023: $236,969; 2022: ($728,269); 2021: $234,677; 2020: ($357,162) |
PAY VERSUS PERFORMANCE
| (e) The option award adjustments for each applicable year include the addition (or subtraction, as applicable) of the following: |
PAY VERSUS PERFORMANCE
| (i) the respective year-end estimated fair value of any equity awards granted in the applicable year that are both outstanding and unvested as of each year; 2023: $2,656,968; 2022: $1,816,846; 2021: $1,856,699; 2020: $5,129,591 |
PAY VERSUS PERFORMANCE
| (ii) the amount of change in estimated fair value as of the end of each applicable year as compared to the prior fiscal year for all awards granted in prior years that remain outstanding and unvested as of each year; 2023: $396,935; 2022: ($1,904,221); 2021: $2,124,028; 2020: $847,250 |
PAY VERSUS PERFORMANCE
| (iii) | for all awards granted in prior years that vest in the applicable year, the amount equal to the change in fair value as of the vesting date compared to the estimated fair value from the prior fiscal year; 2023: $430,055; 2022: ($2,031,971); 2021: $594,541; 2020: ($616,032) |
PAY VERSUS PERFORMANCE
| (3) The table below outlines the amounts included as additions and deductions in the calculation of compensation actually paid (CAP) for Non-PEO NEOs. |
PAY VERSUS PERFORMANCE
| Year | Reported Summary Compensation Table Total for Non-PEO | Reported Value of Equity Awards | | Equity Award Adjustments (a) | | Compensation Actually Paid to Non-PEO NEOs | | | ($) | ($) Stock Awards (b) | ($) Option Awards (c) | ($) Stock Awards (d) | ($) Option Awards (e) | ($) | | 2023 (f) | $2,044,741 | $590,901 | $594,262 | $874,386 | $1,126,354 | $2,860,318 | | 2022 (g) | $2,268,933 | $536,076 | $542,601 | ($29,073) | ($834,065) | $327,118 | | 2021 (h) | $2,155,166 | $649,769 | $428,533 | $1,067,878 | $1,457,782 | $3,602,524 | | 2020 (i) | $1,722,056 | $564,463 | $620,423 | $1,119,992 | $2,054,310 | $3,711,472 |
PAY VERSUS PERFORMANCE
| (a) The methodology for estimating the fair value of restricted stock unit awards is consistent with the methodology as described in Note 12 “Stock-Based Compensation” of the Notes to Consolidated Financial Statements included in our 2021-2023 Annual Reports on Form 10-K. The methodology for estimating the fair value of stock option awards at each applicable measurement date is consistent with the Black Scholes methodology as described in Note 12 “Stock-Based Compensation” of the Notes to Consolidated Financial Statements included in our 2021-2023 Annual Reports on Form 10-K, with the exception of the expected life assumption. The expected life assumption used in estimating the stock option valuations noted above ranges from 0.50 to 4.02 years. |
PAY VERSUS PERFORMANCE
| (b) The reported value of equity awards represents the grant date fair value of restricted stock unit awards as reported in the “Stock Awards” column of the Summary Compensation Table for each applicable year. |
PAY VERSUS PERFORMANCE
| (c) The reported value of option awards represents the grant date fair value of stock option awards as reported in the “Option Awards” column of the Summary Compensation Table for each applicable year. |
PAY VERSUS PERFORMANCE
| (d) The equity award adjustments for stock in each applicable year include the addition (or subtraction, as applicable) of the following: |
PAY VERSUS PERFORMANCE
| (i) the respective year-end estimated fair value of any equity awards granted in the applicable year that are both outstanding and unvested as of each year; 2023: $661,349; 2022: $511,609; 2021: $771,458; 2020: $863,429 |
PAY VERSUS PERFORMANCE
| (ii) the amount of change in estimated fair value as of the end of each applicable year as compared to the prior fiscal year for all awards granted in prior years that remain outstanding and unvested as of each year; 2023: $115,945; 2022: ($339,626); 2021: $235,855; 2020: $360,228 |
PAY VERSUS PERFORMANCE
| (iii) | for all awards granted in prior years that vest in the applicable year, the amount equal to the change in fair value as of the vesting date compared to the estimated fair value from the prior fiscal year; 2023: $97,092; 2022: ($201,056); 2021: $60,565; 2020: ($103,665) |
PAY VERSUS PERFORMANCE
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PAY VERSUS PERFORMANCE
| (e) The option award adjustments for each applicable year include the addition (or subtraction, as applicable) of the following: |
PAY VERSUS PERFORMANCE
| (i) the respective year-end estimated fair value of any equity awards granted in the applicable year that are outstanding and unvested as of each year; 2023: $685,173; 2022: $496,813; 2021: $572,479; 2020: $1,477,981 |
PAY VERSUS PERFORMANCE
| (ii) the amount of change in estimated fair value as of the end of each applicable year as compared to the prior fiscal year for all awards granted in prior years that remain outstanding and unvested as of each year; 2023: $110,705; 2022: ($795,064); 2021: $731,620; 2020: $760,646 |
PAY VERSUS PERFORMANCE
| (iii) | for all awards granted in prior years that vest in the applicable year, the amount equal to the change in fair value as of the vesting date compared to the estimated fair value from the prior fiscal year; 2023: $330,476; 2022: ($535,814); 2021: $153,683; 2020: ($184,317) |
PAY VERSUS PERFORMANCE
| (f) For fiscal year 2023, the following NEOs are included in the calculation: Meenal A. Sethna, Ryan K. Stafford, Maggie Chu, and Deepak Nayar |
PAY VERSUS PERFORMANCE
| (g) For fiscal year 2022, the following NEOs are included in the calculation: Meenal A. Sethna, Ryan K. Stafford, Maggie Chu, and Deepak Nayar |
PAY VERSUS PERFORMANCE
| (h) For fiscal year 2021, the following NEOs are included in the calculation: Meenal A. Sethna, Ryan K. Stafford, Maggie Chu, and Deepak Nayar |
PAY VERSUS PERFORMANCE
| (i) For fiscal year 2020, the following NEOs are included in the calculation: Meenal A. Sethna, Ryan K. Stafford, Matthew J. Cole, and Deepak Nayar |
PAY VERSUS PERFORMANCE
| (4) For years 2020 – 2023, the Peer Group used for Total Shareholder Return (TSR) is the group of companies consisting of the Dow Jones Electrical Components and Equipment Industry Group Index consistent with the peer group as disclosed in Item 5 in our 2023 Annual Report on Form 10-K. |
PAY VERSUS PERFORMANCE
| (5) Net Income is shown in millions, as reported in our 2023 Annual Report on Form 10-K. |
PAY VERSUS PERFORMANCE
| (6) Company Selected Measure used is Adjusted Earnings Per Share. Adjusted Earnings Per Share (AIP EPS) is calculated as described for “AIP EPS” in footnote 1 on page 33. |
PAY VERSUS PERFORMANCE
| | 2024 Proxy Statement | 52 |
PAY VERSUS PERFORMANCE
The following graphs illustrate the relationship of Compensation Actually Paid (CAP) for our PEO and the average CAP for our Non-PEO NEOs in relationship to our Total Shareholder Return, Net Income and Adjusted EPS (the Company Selected Measure (CSM)). Additionally, the graphs also describe the relationship between our own TSR versus our peer group TSR. Compensation actually paid is influenced by numerous factors, including, but not limited to, share price volatility, new grant issuance and timing of vesting, as well as other factors.
PAY VERSUS PERFORMANCE
| | 2024 Proxy Statement | 53 |
PAY VERSUS PERFORMANCE
The most important Financial Performance measures used by the Company to link Compensation Actually Paid to Company Performance for the most recently completed fiscal year for PEO and Non-PEO NEOs are as follows:
PAY VERSUS PERFORMANCE
| (i) Adjusted Earnings Per Share |
PAY VERSUS PERFORMANCE
| (ii) Corporate Sales |
PAY VERSUS PERFORMANCE
| (iii) | Cash from Operations |
PAY VERSUS PERFORMANCE
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