DEF 14A of Hni Corp
Filed Mar 19, 2024 · FY20230001140361-24-014132
DIRECTORS
DIRECTORS There currently are ten directors on the Board. The Board is divided into three classes. Generally, one class is elected each year for a term of three years. The current Board members serve for three-year terms expiring at the annual meeting of shareholders in 2024, 2025 and 2026, respectively. At the Annual Meeting, three directors are standing for reelection. The Board and the Governance Committee have adopted guidelines for identifying and evaluating director candidates. Under these guidelines, the Governance Committee considers the mix of director characteristics, experiences, diversity attributes (including factors such as age, gender, education, ethnicity, and career experience), perspectives, and skills appropriate for the Corporation. The Governance Committee reviews these factors and others considered useful by the Governance Committee in assessing the perceived needs of the Board and the Corporation from time to time. The Governance Committee may use a variety of means to identify potential nominees, including recommendations from the Chairman, directors, or others associated with the Corporation. The Governance Committee may retain third-party search firms to identify potential nominees based on the Corporation’s established criteria for director candidates discussed above. The Governance Committee screens potential candidates and recommends suitable candidates to the Board for nomination. The Corporation requires candidates to possess the highest personal and professional integrity and ethics and be willing and able to devote the required time to the Corporation. The Corporation believes its directors should have varied and complementary backgrounds, which together build the overall strength of the Board, and the Governance Committee is committed to actively seeking diverse candidates to include in the pool from which director candidates are chosen. The Governance Committee evaluates candidates recommended by the Corporation’s shareholders using the same criteria for candidates described above and considering additional information required by the Corporation’s By-laws (“By-laws”).
DIRECTORS
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Summary of Individual Director Primary Skills, Core Competencies, and Attributes
Summary of Individual Director Primary Skills, Core Competencies, and Attributes The following matrix identifies the primary skills, core competencies, and other attributes identified by the Governance Committee each director brings to his or her service on the Corporation’s Board and committees. Each director possesses other skills and competencies.
Summary of Individual Director Primary Skills, Core Competencies, and Attributes
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Summary of Individual Director Primary Skills, Core Competencies, and Attributes
The following charts summarize some of the key characteristics of our Board members. The Lead Director and one of the Corporation’s three committee chairs self-identify as ethnically diverse.
Summary of Individual Director Primary Skills, Core Competencies, and Attributes
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Summary of Individual Director Primary Skills, Core Competencies, and Attributes
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Director Independence
Director Independence Under the Corporation’s Corporate Governance Guidelines, at least three-fourths of the directors must be considered independent under the NYSE rules and applicable law. The Board has affirmatively determined that Ms. Bell, Ms. Jones, Mr. Hallinan, Mr. Porcellato, Ms. Smith, Mr. Calado, Ms. Francis, Mr. Hartnett, and Ms. Sivajee, constituting nine of the Corporation’s ten directors, are independent under NYSE rules and the standards for independent directors established in the Corporation’s Corporate Governance Guidelines, which incorporate the director independence requirements set forth in the NYSE rules. The NYSE rules provide that, in order to determine a director is independent, the Board must determine the director has no material relationship with the Corporation (either directly or as a partner, shareholder or officer of an organization that has a relationship with the Corporation). In accordance with NYSE rules, when assessing the materiality of a director’s relationship (if any) with the Corporation, the Board considers materiality both from the standpoint of the director and from the standpoint of persons or organizations with which the director has an affiliation.
Director Biographies
Director Biographies The following biographies describe the skills, qualities, attributes, and experience of each director serving on the Board. The Board believes the directors possess the appropriate mix of diversity in terms of gender, age, ethnicity, skills, business experience, service, and viewpoints, and considers the directors, including those directors being nominated for reelection to the Board at the Annual Meeting, to be qualified for service due to the skills, experience, and other attributes reflected in each director's biography below.
Director Biographies
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Directors Standing for Election
Directors Standing for Election Ms. Bell, Ms. Jones, and Mr. Hallinan comprise a class of directors whose terms will expire at the Annual Meeting. Ms. Bell, Ms. Jones, and Mr. Hallinan each have been nominated for reelection by the Board.
Directors Standing for Election
| | Mary A. Bell, age 63, has been a director of the Corporation since November 2006. Ms. Bell has also served as a director of Husco International Inc. since November 2015 and as a director of PPC Partners since June 2019. Prior to her retirement in July 2015, Ms. Bell was a Vice President of Caterpillar, the world’s leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. From 2004 to 2007, she was the Vice President of Caterpillar’s Logistics Division and served as Chairman and President of Cat Logistics Services, Inc., formerly a wholly owned subsidiary of Caterpillar. Ms. Bell brings to the Board considerable logistics, manufacturing and dealer channel expertise and general management experience derived primarily from her service in various roles at Caterpillar. She currently serves on the Governance Committee. |
Directors Standing for Election
| | Mary K.W. Jones, age 55, has been a director of the Corporation since February 2016. Since 2019, Ms. Jones has served as Senior Vice President, General Counsel and Worldwide Public Affairs of Deere & Company (“Deere”), a world-leading provider of advanced products and services for agriculture, construction, forestry and turf care. From 2010 through 2012, she served as Deere's Vice President, Global Human Resources. Ms. Jones brings to the Board significant risk management, corporate governance and general legal expertise, derived largely from her role leading the Deere compliance and legal functions. In addition, she brings to the Board significant expertise in the areas of talent strategy, executive succession planning and compensation, derived from her former role as Deere’s Vice President, Global Human Resources. Ms. Jones currently serves as Chair of the Compensation Committee. |
Directors Standing for Election
| | Patrick D. Hallinan, age 56, has been a director of the Corporation since September 2022. Since 2023, Mr. Hallinan has served as Executive Vice President, Chief Financial Officer of Stanley Black & Decker, a manufacturer of industrial tools and household hardware. From 2017 through 2023, Mr. Hallinan served as the Senior Vice President and Chief Financial Officer of Fortune Brands Home & Security, Inc., a manufacturer of home and security products. From 2013 to 2017, Mr. Hallinan served as Fortune Brands’ Senior Vice President – Finance and Chief Financial Officer of its plumbing segment. Mr. Hallinan brings to the Board extensive expertise in finance, business strategy, general management, and business leadership derived from his service at Fortune Brands. Mr. Hallinan currently serves on the Audit Committee and qualifies as an “audit committee financial expert.” |
Directors Standing for Election
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Continuing Directors
Continuing Directors Mr. Lorenger, Mr. Porcellato, and Ms. Smith comprise a class of directors whose terms will expire at the Corporation’s 2025 annual meeting of shareholders.
Continuing Directors
| | Jeffrey D. Lorenger, age 59, the Corporation’s President and Chief Executive Officer, has been a director since April 2018. On February 12, 2020, Mr. Lorenger was elected to serve as Chairman of the Board. Mr. Lorenger has worked for the Corporation for over 20 years and prior to his current role as President, Chief Executive Officer and Chairman, held multiple executive level positions including as President, Office Furniture, from 2017 to 2018; President, Contract Furniture, from 2014 to 2017; and President, Allsteel from 2008 to 2014. Mr. Lorenger has also held positions as Vice President, Sales and Marketing for The HON Company and Vice President, General Counsel and Secretary for HNI Corporation. On February 1, 2024, Mr. Lorenger joined the Board of Directors of THOR Industries. Mr. Lorenger serves as the chair of the board of directors for the Business and Institutional Furniture Manufacturers Association and is a member of the Tippie Advisory Board at the College of Business, University of Iowa. |
Continuing Directors
| | Larry B. Porcellato, age 65, has been a director of the Corporation since August 2004. Mr. Porcellato was Chief Executive Officer of The Homax Group, Inc. (“Homax”), a leading specialty application consumer products supplier to the home care and repair markets, a role from which he retired in July 2014. Previously, he was an independent business consultant and Chief Executive Officer of ICI Paints North America (“ICI Paints”). From 2008 to 2020, he was a director of OMNOVA Solutions, Inc., an innovator of emulsion polymers, specialty chemicals and decorative and functional surfaces, and a former director of privately held PSAV Holding LLC, an international, full-service technology in-house audiovisual provider. Mr. Porcellato brings to the Board chief executive officer experience in the building products industry through his former leadership of Homax and his former role as Chief Executive Officer of ICI Paints and financial expertise derived primarily from his service on the audit committee of another public company and previous finance and division leadership roles at other public companies. He also brings to the Board international and marketing expertise derived primarily from his service in various international and marketing roles at Rubbermaid Incorporated and Braun Canada Inc. and corporate governance experience through his service on the compensation and governance committees of another public company. Mr. Porcellato currently serves on the Compensation Committee. |
Continuing Directors
| | Abbie J. Smith, age 70, has been a director of the Corporation since July 2000 and served as the Lead Director from May 2014 to May 2017. Since 1999, Ms. Smith has been a Chaired Professor at the University of Chicago Booth School of Business, a national leader in higher education, and is currently the Boris and Irene Stern Distinguished Service Professor of Accounting. She is a director of DFA Investment Dimensions Group Inc. and Dimensional Investment Group Inc.; a trustee of The DFA Investment Trust Company, the Dimensional Emerging Markets Value Fund, and Dimensional ETF Trust; and a director of Ryder System, Inc., a commercial transportation, logistics and supply chain management solutions company. Ms. Smith is also a trustee of The UBS Funds (Chicago) and SMA Relationship Trust. Ms. Smith brings to the Board considerable financial and corporate governance expertise based primarily on her extensive research and teaching at the University of Chicago and her service as a director of mutual fund complex and other public company audit, performance, finance and nominating committees. She currently is Chair of the Audit Committee of the Dimensional Funds and a member of the Audit Committee of Ryder System, Inc. and the Chicago-based UBS Funds. Ms. Smith currently serves on the Compensation Committee. Although Ms. Smith does not serve on the Audit Committee, she qualifies as an “audit committee financial expert.” |
Continuing Directors
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Continuing Directors
Mr. Calado, Ms. Francis, Mr. Hartnett, and Ms. Sivajee comprise a class of directors whose terms will expire at the Corporation's 2026 annual meeting of shareholders.
Continuing Directors
| | Miguel M. Calado, age 68, has been a director of the Corporation since August 2004. Mr. Calado is a board member of WY Group, a digital marketing and technology holding company, and he also serves as Chairman of Nanoform Finland Limited, a publicly traded international drug particle engineering company. He also chairs the Audit and Compensation Committee of Nanoform, a nanotechnology and drug particle engineering company. Mr. Calado previously was Chairman and President of WY Group from April 2017 until October 2023. From 2014 to April 2017, Mr. Calado was Vice President, Corporate Development and President of the iMax Diagnostic Imaging Business Unit of Hovione SA, an international fine chemicals company. From 2006 to 2014, he was the Vice President and Chief Financial Officer of Hovione. He has been President of GAMCAL, LLC, an investment company, since 2006. Mr. Calado brings to the Board extensive international, general management, manufacturing and financial expertise derived primarily from his previous service as Chief Financial Officer of an international manufacturing company and prior service in various roles at several large packaged and consumer goods public companies. These roles and companies include Executive Vice President and President, International for Dean Foods Company and several international finance roles for PepsiCo, Inc., including Senior Vice President, Finance and Chief Financial Officer, PepsiCo Foods International. Mr. Calado currently serves as Lead Director and on the Audit Committee. He qualifies as an “audit committee financial expert.” |
Continuing Directors
| | Cheryl A. Francis, age 70, has been a director of the Corporation since May 1999. Ms. Francis has been Co-Chairman of the Corporate Leadership Center, a not-for-profit organization focused on developing tomorrow’s business leaders, since 2008. Previously, from 2002 to 2008, she was the Vice Chairman of the Corporate Leadership Center. Ms. Francis is a director of Aon plc, a leading global professional services firm providing a broad range of risk, retirement and health solutions, and Morningstar, Inc., a leading provider of independent investment research in North America, Europe, Australia and Asia. Ms. Francis also chairs the Audit Committee of Morningstar. Ms. Francis brings to the Board significant financial expertise based primarily on her prior role as Chief Financial Officer of R.R. Donnelley & Sons Company and service on the audit and finance committees of other public companies. She also brings to the Board corporate governance experience through her service on the compensation and governance committees of other public companies, and executive leadership development experience based on Corporate Leadership Center work with CEOs, leading academic institutions and corporate executives. She currently serves on the Governance Committee. Although Ms. Francis does not serve on the Audit Committee, she qualifies as an “audit committee financial expert.” |
Continuing Directors
| | John R. Hartnett, age 63, has been a director of the Corporation since August 2016. Prior to his retirement in 2022, Mr. Hartnett was Executive Vice President at Illinois Tool Works Inc. (“ITW”), a Fortune 200 global multi-industrial manufacturing leader with seven industry-leading business segments. Mr. Hartnett was with ITW for 37 years and led its Welding segment prior to his retirement. Mr. Hartnett has extensive engineering, marketing, manufacturing and management experience from his numerous business roles at ITW including his previous role as head of ITW’s Construction Products segment. Mr. Hartnett currently serves as Chair of the Audit Committee and qualifies as an “audit committee financial expert.” |
Continuing Directors
| | Dhanusha Sivajee, age 46, has been a director of the Corporation since July 2019. Ms. Sivajee is the Chief Marketing Officer of Angi Inc., the leading digital solution for home needs. Ms. Sivajee has been with Angi Inc. since September 2021. Previously, Ms. Sivajee was Chief Marketing Officer at The Knot Worldwide, a global technology company that provides content and services for weddings (from 2014 through 2021) and AOL Brand Group; Vice President of Global Marketing at Bloomberg Mobile; and Director, Advanced Product and Digital Marketing at Home Box Office. Ms. Sivajee brings to the Board extensive strategically-driven marketing and transactional marketplace experience from more than 20 years working across media and e-commerce industries. Ms. Sivajee currently serves as Chair of the Governance Committee. |
Continuing Directors
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DIRECTOR COMPENSATION
DIRECTOR COMPENSATION
Non-Employee Director Compensation
Non-Employee Director Compensation The Governance Committee is responsible for annually reviewing compensation paid to non-employee directors for service on the Board and for recommending to the Board changes in compensation, if appropriate. The Corporation's CEO does not receive any compensation for his services as a director. The Board is responsible for approving director compensation based on recommendations by the Governance Committee. Neither the Governance Committee nor the Board delegates its authority with respect to setting director compensation to any other person or group. However, the Corporation’s management may, at the request of the Governance Committee, assist the Governance Committee in its review of director compensation, which may include recommending changes to compensation. Although it has not done so recently, the Governance Committee has authority to retain a consultant to assist in the evaluation of the compensation and benefits for directors and to approve the consultant’s fees and other retention terms. For 2023, each non-employee director received an annual retainer of $200,000, of which $80,000 was paid in cash in equal installments of $20,000 after each quarterly Board meeting and $120,000 was paid in the form of common stock issued under the 2017 Equity Plan for Non-Employee Directors (“Equity Plan”) following the May Board meeting. The Lead Director receives an additional annual cash retainer of $30,000. The Chair of the Audit Committee receives an additional annual cash retainer of $20,000. The Chair of the Compensation Committee and the Chair of the Governance Committee each receive an additional annual cash retainer of $15,000. Cash retainers for the Lead Director and Chairs are paid in equal installments after each quarterly Board meeting. Directors also are reimbursed for travel and related expenses incurred to attend meetings.
Non-Employee Director Compensation
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Non-Employee Director Compensation
The Corporation requires each non-employee director to own common stock of the Corporation with a market value of five times or more the cash portion of the annual retainer. To promote common stock ownership, non-employee directors who have not yet met this minimum share holding requirement are required to receive one-half of the cash portion of their annual retainer in the form of shares of common stock issued under the Equity Plan or, to the extent the director participates in the Corporation’s Directors Deferred Compensation Plan (“Directors Deferred Plan”), in the form of nonvoting share units to be credited to the director’s account under the Directors Deferred Plan. Under the Equity Plan, non-employee directors may elect to receive all or a portion of their cash retainers in the form of shares of common stock. Under the Directors Deferred Plan, each director has the opportunity to defer up to 100% of their retainers. Amounts can be deferred to a cash account earning interest at a rate set each year at 1% above the prime interest rate or to the Corporation’s notional stock account in the form of nonvoting share units that fluctuate in value based on the price increase or decrease of the common stock and earn dividends distributed to all shareholders. The dividends are automatically reinvested for each participant to acquire additional nonvoting share units. For any cash compensation deferred to the Corporation’s notional stock account, the number of nonvoting share units is determined by dividing the amount of the compensation by the fair market value of a share of common stock on the date the compensation would have otherwise been paid. Each director participating in the Directors Deferred Plan elects, on an annual basis, the date or dates of distribution (i.e., a director can elect a lump-sum distribution or distribution via annual installments not to exceed 15) of any amounts they defer. In addition, each non-employee director is eligible to receive awards of stock options to purchase common stock, restricted stock or common stock grants, or any combination thereof, under the Equity Plan in amounts authorized by the Board. As of the March 15, 2024 Record Date, the Corporation has never issued stock options or restricted stock to the non-employee directors and all shares of common stock issued to directors in lieu of cash retainer amounts were fully vested upon issuance.
Non-Employee Director Compensation
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Director Compensation for 2023
Director Compensation for 2023
Director Compensation for 2023
| Name | Fees Earned or Paid in Cash ($) (1) | Stock Awards ($) (2) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) (3) | All Other Compensation ($) (4) | Total ($) | | Mary Bell | 79,250 | 120,000 | 3,948 | 4,400 | 207,598 | | Miguel Calado | 101,750 | 120,000 | — | 4,400 | 226,150 | | Cheryl Francis | 100,500 | 120,000 | — | 4,400 | 224,900 | | Patrick Hallinan | 79,250 | 120,000 | | 4,400 | 203,650 | | John Hartnett | 84,250 | 120,000 | — | 4,400 | 208,650 | | Mary Jones | 94,250 | 120,000 | — | 4,400 | 218,650 | | Larry Porcellato | 79,250 | 120,000 | 1,574 | 4,400 | 205,224 | | Dhanusha Sivajee | 94,250 | 120,000 | — | 4,400 | 218,650 | | Abbie Smith | 79,250 | 120,000 | — | 4,400 | 203,650 |
PROPOSAL NO. 1 – ELECTION OF DIRECTORS
PROPOSAL NO. 1 – ELECTION OF DIRECTORS The Board has nominated directors Mary A. Bell, Mary K.W. Jones, and Patrick D. Hallinan to be elected to serve on the Board, each for a term of three years expiring at the 2027 annual meeting of the shareholders and until their successors are duly elected and qualified. Each nominee currently serves on the Board and has been determined to be independent under the NYSE rules and applicable SEC rules. There are no family relationships between the Corporation’s executive officers and nominated directors. Nominees elected as directors at the Annual Meeting will hold office for the indicated term or until their respective successors are elected and qualified, subject to their prior death, resignation, or removal. The Corporation believes each nominee listed above will be available to serve if elected. However, if any one of them becomes unavailable, the persons named as proxies have discretionary authority to vote for a substitute chosen by the Board. Any vacancies not filled at the Annual Meeting may be filled by the Board.
Primary Compensation Elements
| Element | Description | Purpose | | Base Salary (see page 34) | Annual cash compensation | Compensation for expected day-to-day responsibilities. Pay adjustments are based on capabilities, responsibilities, and market factors | | Annual Incentive (see page 34) | Targeted variable compensation equal to a percentage of base salary paid once per year and based 80% on financial performance and 20% on individual objectives | Focus executives on annual performance goals, typically financially driven | | Long-Term Incentive (see page 38) | Variable performance compensation typically in the form of time-based Restricted Stock Units and Performance Share Units earned at the end of a three-year period based on Adjusted EBITDA goals | Align executives’ decisions with long-term shareholder value creation. Promote executive retention |
Compensation Committee and Non-Employee Directors
Compensation Committee and Non-Employee Directors The Compensation Committee is responsible for the oversight of the Corporation’s executive compensation programs. The Compensation Committee reviews and recommends to the Board for approval by the non-employee directors all elements of the CEO's compensation. For the other Named Executive Officers, the Compensation Committee considers recommendations from the CEO and approves all elements of compensation except equity grants, which the Compensation Committee recommends for approval by the non-employee directors. The Corporation’s Member and Community Relations Department, Office of the General Counsel, and Finance Department support the Compensation Committee and the Board in a variety of ways related to executive compensation, including conducting executive compensation benchmarking, preparing compensation-related materials, and providing updates on corporate governance laws and best practices. The Compensation Committee occasionally retains outside compensation consultants to provide recommendations for structuring and designing the Corporation’s executive compensation program, selecting a peer group for benchmarking, and establishing competitive incentive award targets. The Compensation Committee has engaged FW Cook and Exequity as executive compensation consultants. FW Cook served as the compensation consultant in 2023 to review CEO compensation for 2024. In 2023, Exequity provided guidance on a variety of topics related to executive compensation programs. Both FW Cook and Exequity are independent compensation consultants that provided no services to HNI other than those services provided to the Compensation Committee. After considering the six independence factors discussed in Section 303A.05(c)(iv)(A)-(F) of the NYSE Listed Company Manual, the Compensation Committee determined that FW Cook and Exequity had no conflict of interest pursuant to Item 407(e)(3)(iv) of the SEC’s Regulation S-K.
Benchmarking with Market Data
Benchmarking with Market Data
CEO Benchmarking
CEO Benchmarking The Compensation Committee compares CEO compensation to a group of peer companies. The Compensation Committee includes companies in similar industries or with a similar level of business complexity, manufacturing approach, or go-to-market structure with whom the Corporation may compete for talent. Additionally, the Compensation Committee considers the relative size of the companies, including market capitalization, net sales, and employee headcount. In 2023, the Compensation Committee, considering the above-identified factors, chose the same peer group of 18 companies as in the prior year when determining compensation. The following table lists these peer companies.
CEO Benchmarking
| Peer Group | | | A.O. Smith Corporation | La-Z-Boy | | ACCO Brands | Leggett & Platt, Incorporated | | American Woodmark | Lennox International Inc. | | Armstrong World Industries, Inc. | Lincoln Electric Holdings Inc. | | Donaldson Company, Inc. | Masonite | | MillerKnoll | Pitney Bowes | | Hillenbrand | Regal Beloit Corporation | | Interface | Steelcase Inc. | | Kennametal Inc. | Valmont Industries |
CEO Benchmarking
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CEO Benchmarking
The Compensation Committee utilized the peer companies CEO compensation data to establish the elements and targets of Mr. Lorenger’s compensation as CEO in early 2023.
Market Data for Other Named Executive Officers
Market Data for Other Named Executive Officers The Compensation Committee annually assesses base salary and annual and long-term incentive compensation data compiled from commercially available compensation survey reports published by Willis Towers Watson and Mercer Human Resource Consulting (collectively, the “Survey Reports”). In 2023, the Compensation Committee followed its regular process of using the Survey Reports in reviewing the elements and targets of the Named Executive Officers’ compensation (except the CEO), considering the responsibilities and capabilities of each executive officer.
Annual Incentive
Annual Incentive To provide alignment with strategic business objectives, Named Executive Officers are eligible for annual incentive compensation awards under the Annual Incentive Plan. The Annual Incentive Plan helps focus the Named Executive Officers on both annual financial achievements and individual objectives aligned with the Corporation’s strategic plan.
Annual Incentive
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Annual Incentive
For 2023, key features of the Annual Incentive Plan were:
Annual Incentive
| Award Target as a % of Base Salary | | | Chairman, President and Chief Executive Officer | 120% | | Other Named Executive Officers | 75% |
Annual Incentive
| Basis of Award Achievement | | | Achievement of Financial Goals | 80% | | Attainment of Individual Objectives | 20% |
Annual Incentive
The CEO's annual incentive compensation award target is a greater percentage of base salary than the targets for the other Named Executive Officers because the CEO has the most impact on the Corporation’s annual performance. The awards are paid in the first quarter following the year in which they are earned. Termination of employment other than due to death, disability, retirement, or a change in control of the Corporation prior to the end of the year in which an award is earned results in the loss of outstanding awards. Awards are paid in cash unless the executive requests and the Compensation Committee approves taking all or part of the payment in the form of common stock or the Compensation Committee determines the executive’s stock ownership does not reflect appropriate progress toward the executive’s ownership guideline. The following table describes payouts under the Annual Incentive Plan for each Named Executive Officer for 2023.
Annual Incentive
| Name | Annual Incentive Compensation Award Target ($) | Actual Award Payout Attributable to Financial Goals ($) | Actual Award Payout Attributable to Individual Objectives ($) | Total Payout ($) | Actual Payout as % of Target (%) | | Jeffrey D. Lorenger | 1,236,000 | 1,977,600 | 309,000 | 2,286,600 | 185% | | Marshall H. Bridges | 418,800 | 670,080 | 104,700 | 774,780 | 185% | | Vincent P. Berger | 380,175 | 243,312 | 76,035 | 319,347 | 84% | | Steven M. Bradford | 362,250 | 579,600 | 81,869 | 661,469 | 183% | | B. Brandon Bullock | 345,450 | 552,720 | 86,363 | 639,083 | 185% |
Annual Incentive
Each Named Executive Officer received the 2023 Annual Incentive Plan award payout in cash.
Financial Performance Goals
Financial Performance Goals The Compensation Committee considers the annual financial plan, approved by the Board in February, to help establish financial goals for the Corporation and each core business unit. For 2023, financial goals were based on Adjusted EBIT and set on an annual basis for the Annual Incentive Plan. Adjusted EBIT goals are based on strategic opportunities with consideration of current market conditions (e.g., strength of the housing market, global economy, or corporate earnings) and business opportunities (e.g., launch of new product line or integration of recently acquired business). Payout ranges are set between 0% and 200% of the Adjusted EBIT target with an achievement threshold of 35% to receive a minimum payout. Payout levels are expected to be between 80% and 120% of target in most years and average approximately 100% of target over time. The Compensation Committee establishes the financial target as an aggressive but achievable goal for the Corporation as a whole or any business unit based on economic and competitive conditions at the time goals are established. Messrs. Lorenger, Bridges, and Bradford were eligible for awards based on the financial performance of the Corporation while Messrs. Berger and Bullock were eligible for awards based on the financial performance of each executive's individual area of responsibility (one or more business units).
Financial Performance Goals
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Financial Performance Goals
The following table shows 2023 Adjusted EBIT goals for HNI Corporation and actual achievement for the period. The table also provides background on the conditions assumed when the goal was set and commentary on why actual results differed from the goal.
Financial Performance Goals
| | 2023 | | Adjusted EBIT goal | $102.6 million | | Actual Adjusted EBIT achievement | $145.3 million | | Goal setting assumptions and considerations | • 2023 profit expected to decline due to lower volumes resulting from macro-economic pressures. Also assumed the volume pressures would be partially offset by price realization, higher operational productivity, and streamlined SG&A. • Volume decline expected to be largest in Residential Building Products, consistent with housing market weakness and elevated mortgage rates. • Adjusted EBIT in the Workplace Furnishings segment expected to increase as benefits from profit transformation initiatives and portfolio actions more than offset lower volumes. | | Reasons performance differs from the goal | • Greater-than-anticipated benefits from productivity, cost reduction efforts, and lower input costs more than offset greater-than expected volume declines. • Adjusted EBIT in Workplace Furnishings greatly exceeded target primarily due to profit transformation initiatives and lower input costs. Workplace Furnishings volume declines were modestly better than anticipated due to improved public sector demand. | | Payout (% of target) | 200% |
Individual Objectives
| Name | 2023 Objectives | 2023 Achievements | 2023 Payout Factor | | Jeffrey D. Lorenger | • Implementation of corporate sustainability initiatives • Implementation of diversity, equity and inclusion initiatives | • Corporate sustainability initiatives were successfully completed • Diversity, equity and inclusion initiatives were successfully implemented | 125% | | Marshall H. Bridges | • Implementation of diversity, equity and inclusion initiatives • Free cash flow goals • Lean enterprise goals | • Diversity, equity and inclusion initiatives were successfully implemented • Free cash flow goals were successfully achieved • Lean enterprise goals were successfully achieved | 125% | | Vincent P. Berger | • Implementation of corporate sustainability initiatives • Implementation of diversity, equity and inclusion initiatives • Division specific revenue goals | • Corporate sustainability initiatives were successfully completed • Diversity, equity and inclusion initiatives were successfully implemented • Progress achieved on division specific revenue goals | 100% | | Steven M. Bradford | • Implementation of corporate sustainability initiatives • Safety goals | • Corporate sustainability initiatives were successfully completed • Safety goals were successfully achieved | 113% | | B. Brandon Bullock | • Implementation of corporate sustainability initiatives • Implementation of diversity, equity and inclusion initiatives • Product specific profitability and growth goals | • Corporate sustainability initiatives were successfully completed • Diversity, equity and inclusion initiatives were successfully implemented • Product specific profitability and growth goals were successfully achieved | 125% |
Long-Term Incentive
Long-Term Incentive Through their leadership and strategic actions, long-term incentive participants have the ability to significantly impact the Corporation’s long-term performance. Long-term incentive compensation, in the form of Performance Share Units (PSUs) and Restricted Stock Units (RSUs), is designed to focus executives on long-term value creation for shareholders measured by objective financial performance metrics and long-term stock price appreciation, and to incent executives to remain with the Corporation. Long-term incentive compensation is provided through the annual equity grants to select executives, including all Named Executive Officers, under the Corporation’s 2021 Stock-Based Compensation Plan (the “Stock Plan”). These two types of long-term incentive vehicles provide a balance between emphasizing financial performance (PSUs) and stock price performance (RSUs). The Compensation Committee and the Board annually evaluate and approve the participants' target awards to ensure alignment with the Corporation’s compensation philosophy. Annual grants typically occur at the February Board meeting. Throughout the year, the Board also may occasionally grant equity awards for a new hire, a significant promotion, or other special circumstances. The following table shows the total long-term incentive compensation award opportunities for each Named Executive Officer.
Long-Term Incentive
| Name | Total Long-Term Incentive Compensation Target ($) | Total Long-Term Incentive Compensation Award Target (% of Annual Base Salary at Time of Award) | | Jeffrey D. Lorenger | 3,553,500 | 345 | | Marshall H. Bridges | 837,600 | 150 | | Vincent P. Berger | 731,100 | 150 | | Steven M. Bradford | 362,250 | 75 | | B. Brandon Bullock | 442,900 | 100 |
Long-Term Incentive
For 2023, the Board, upon recommendation from the Compensation Committee, decided to grant half (50%) of the target long-term incentive compensation target amount as PSUs and half (50%) as RSUs under the Stock Plan. The Board determined the long-term incentive compensation awards should be split equally among PSUs and RSUs because the mix provides the best balance between the competing interests the long-term incentive awards seek to serve (i.e., focus on performance objectives and continued employment (PSUs) and continued employment and increasing stock price performance (RSUs)). The Board granted the PSUs and RSUs using the targeted dollar value of the award divided by the grant date closing share price to calculate the number of units granted. The Board granted equity awards to each Named Executive Officer on February 15, 2023, with the closing price of $31.46 per share of common stock. The following table reflects the number of PSUs and RSUs granted in February 2023 for each Named Executive Officer:
Long-Term Incentive
| Name | Targeted Number of PSUs Granted in February 2023 | Targeted Number of RSUs Granted in February 2023 | | Jeffrey D. Lorenger | 56,476 | 56,476 | | Marshall H. Bridges | 13,312 | 13,312 | | Vincent P. Berger | 11,620 | 11,620 | | Steven M. Bradford | 5,757 | 5,757 | | B. Brandon Bullock | 7,039 | 7,039 |
Long-Term Incentive
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Performance Share Units
Performance Share Units In February 2023, half of each Named Executive Officer’s long-term incentive compensation opportunity was granted in PSUs. PSUs represent the right to receive shares at the end of the three-year performance period. The Compensation Committee and Board establish the financial goals at the start of each three-year performance period. These units cliff vest and are delivered following the end of the three-year performance period if financial goals are met. The total number of shares earned may vary between 0% and a maximum of 200% of the target number of units awarded depending upon performance relative to the established goal, with an achievement threshold of 25% to receive a payout. PSUs convert into shares upon vesting. Dividends accrue and pay in cash at the end of the performance period based on the number of shares vested according to performance metrics. For fiscal 2023, the Board approved Adjusted EBITDA targets for the PSUs. Adjusted EBITDA continues to support HNI’s strategic framework and motivates participants to drive financial performance. Early termination of employment other than due to death, disability, retirement, or a change in control of the Corporation results in forfeiture of unvested awards. PSUs motivate and incent executives to focus on long-term value creation while maximizing shareholder alignment. The following table represents the financial achievement targets set for the PSUs in 2023:
Performance Share Units
| 2023 – 2025 Performance Share Unit Cumulative Adjusted EBITDA Targets | | | % Achievement | ($M) | | 200% Maximum | 693 | | 100% Target | 608 | | 25% Threshold | 491 |
Performance Share Units
For a discussion of PSUs granted in 2021 and 2022, see “Performance Share Units” in the executive compensation sections of the Corporation’s 2022 and 2023 Proxy Statements, respectively. In first quarter of 2024, the Compensation Committee and Board certified 65% achievement of economic profit goals for the 2021-2023 PSUs. Shares were issued to eligible participants according to the 65% achievement.
Performance Share Units
| 2021 – 2023 Performance Share Units | | | | % Achievement | Approved Economic Profit Targets ($M) | Actual Economic Profit Achievement | | 200% Maximum | 197 | 65% $72M | | 100% Target | 121 | | | 25% Threshold | 15 | |
Restricted Stock Units
Restricted Stock Units In February 2023, half of each Named Executive Officer’s long-term incentive compensation opportunity was granted in RSUs. RSUs represent the right to receive shares of common stock. Each unit represents the equivalent of one share of common stock as of the date of grant and vests one-third per year over the three years beginning on the first anniversary of the grant date. RSUs convert into shares upon vesting. Dividends are not paid over the vesting period but accrue and are paid in cash at the time of vesting. The amount of income realized by an executive from an RSU is equal to the stock price at the time the award vests multiplied by the number of units granted to the executive plus the dollar value of dividends accrued during the vesting period. Early termination of employment other than due to death, disability, retirement, or a change in control of the Corporation results in forfeiture of unvested awards. RSUs provide shareholder alignment and support retention.
Restricted Stock Units
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Deferred Compensation Plan
Deferred Compensation Plan Executives eligible for compensation under the Annual Incentive Plan, which includes all Named Executive Officers, are eligible to participate in the Corporation’s Executive Deferred Compensation Plan (“Deferred Plan”). The Deferred Plan allows executives to voluntarily defer base salary, Annual Incentive Plan awards, SIP benefits and other amounts. Amounts can be deferred to a cash account earning interest at a rate set each year at 1% above the prime interest rate or to a notional stock account in the form of nonvoting share units fluctuating in value based on the price increase or decrease of the common stock and earning dividends distributed to all shareholders. The dividends are automatically reinvested for each participant to acquire additional nonvoting share units. For any cash compensation deferred to the notional stock account, the number of nonvoting share units is determined by dividing the amount of the compensation by the fair market value of a share of common stock on the date the compensation would have otherwise been paid. Each participant elects, on an annual basis, the date, or dates of distribution (i.e., a participant can elect a lump-sum distribution or distribution via annual installments not to exceed 15) of any deferred amounts. During 2023, no Named Executive Officers participated in the Deferred Plan.
Change in Control, Post-Employment and Other Events
Change in Control, Post-Employment and Other Events Messrs. Lorenger, Bridges, Berger, and Bradford have a Change in Control Employment Agreement (“CIC Agreement”) with the Corporation. Upon a change in control, retirement, death or disability, certain awards granted under the Annual Incentive Plan, the Long-Term Performance Plan and the Stock Plan also vest or are payable pursuant to their terms and are not conditioned on a termination of employment. See “Potential Payments Upon Termination or Change in Control” for a discussion of these items.
Change in Control, Post-Employment and Other Events
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Impact of Prior Compensation in Setting Elements of Compensation
Impact of Prior Compensation in Setting Elements of Compensation Prior compensation of the Named Executive Officers does not generally impact how elements of current compensation are set. The non-employee directors and the Compensation Committee believe the competitive environment mandates current total compensation be sufficient to attract, motivate and retain top management. The Compensation Committee analyzes outstanding equity grants, outstanding Annual Incentive Plan and Long-Term Performance Plan awards and ownership of common stock for each Named Executive Officer to ensure future stock equity grants, Annual Incentive Plan and Long-Term Performance Plan awards, CIC Agreements and other benefits provide appropriate and relevant incentives to the executives. Based on the current analysis, the Compensation Committee believes prior compensation will not impact the ongoing effectiveness of the compensation objectives.
2023 SUMMARY COMPENSATION TABLE
2023 SUMMARY COMPENSATION TABLE The table below shows the compensation awarded to, earned by, or paid to each of the Named Executive Officers for 2023, 2022 and 2021. In accordance with the SEC’s disclosure rules, information regarding compensation for years prior to the year in which an executive became a Named Executive Officer is not included in the table below. The Corporation does not have employment agreements with its Named Executive Officers. While employed, executives earn base salary, are eligible for benefits common to all members, and participate in the executive compensation programs identified in the tables below and discussed in the CD&A. The performance-based conditions associated with Long-Term Performance Plan, PSUs, and Annual Incentive Plan awards as well as salary and bonus in proportion to total compensation are discussed in detail throughout the CD&A, which begins on page 28.
2023 SUMMARY COMPENSATION TABLE
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2023 SUMMARY COMPENSATION TABLE
| Name and Principal Position | Year | Salary ($) | Bonus ($) (1) | Stock Awards ($) (2) | Non-Equity Incentive Plan Compensation ($) (3) | All Other Compensation ($) (4) | Total ($) | | Jeffrey D. Lorenger Chairman, President and Chief Executive Officer, HNI Corporation | 2023 | 1,025,961 | 14,958 | 3,553,470 | 2,286,600 | 221,955 | 7,102,944 | | | 2022 | 998,412 | 10,462 | 3,399,987 | 1,041,600 | 225,093 | 5,675,554 | | | 2021 | 973,427 | 10,701 | 6,783,691 | 1,136,430 | 228,566 | 9,132,815 | | Marshall H. Bridges Chief Financial Officer; Senior Vice President, HNI Corporation | 2023 | 557,160 | 13,233 | 837,591 | 774,780 | 90,082 | 2,272,847 | | | 2022 | 535,567 | 10,462 | 805,369 | 349,522 | 90,412 | 1,791,332 | | | 2021 | 506,185 | 10,701 | 1,859,509 | 385,350 | 91,537 | 2,853,282 | | Vincent P. Berger President, Hearth & Home Technologies; Executive Vice President, HNI Corporation | 2023 | 500,900 | 20,197 | 731,130 | 319,347 | 102,629 | 1,674,204 | | | 2022 | 481,646 | 20,662 | 703,048 | 412,340 | 141,248 | 1,758,944 | | | 2021 | 463,162 | 22,693 | 1,622,561 | 411,284 | 191,215 | 2,710,915 | | Steven M. Bradford Senior Vice President, General Counsel and Secretary, HNI Corporation | 2023 | 481,101 | 13,233 | 362,230 | 661,469 | 76,927 | 1,594,960 | | | 2022 | 466,908 | 10,462 | 351,656 | 312,287 | 77,799 | 1,219,112 | | | 2021 | 448,008 | 10,701 | 841,491 | 340,575 | 78,136 | 1,718,911 | | B. Brandon Bullock President, The HON Company | 2023 | 444,602 | 6,155 | 442,894 | 639,083 | 49,394 | 1,582,128 | | | 2022 | 423,311 | — | 407,611 | 184,689 | 53,506 | 1,069,117 |
2023 SUMMARY COMPENSATION TABLE
| (1) The amounts in this column reflect the payments under the cash profit-sharing program during calendar years 2023, 2022 and 2021. For 2023, this amount also includes the value of 25 shares of HNI stock given to Mr. Lorenger in recognition of his 25 years of service at HNI, consistent with the shares given to other HNI Corporate and Workplace Furnishings members who meet this service milestone. |
2023 SUMMARY COMPENSATION TABLE
| (2) The amounts in this column reflect the aggregate grant date fair value of PSUs and RSUs granted in 2023, 2022, and 2021 under the Stock Plan and the 2017 Stock-Based Compensation Plan computed in accordance with FASB ASC Topic 718. Assumptions used in the calculations of these amounts are included in the footnote titled “Stock-Based Compensation” to the Corporation’s audited financial statements for 2023, 2022, and 2021 in the Corporation's Annual Report on Form 10-K for the year ended December 30, 2023. |
2023 SUMMARY COMPENSATION TABLE
| (3) The amounts in this column include incentive compensation awards earned for the 2023 and 2022 years under the Annual Incentive Plan. Equivalent amounts, plus the value of awards under the Long-Term Performance Plan are included for the 2021 year. The Annual Incentive Plan awards earned in 2023 were paid in first quarter 2024 and were subject to continuous employment through the last day of 2023. |
2023 SUMMARY COMPENSATION TABLE
| (4) The amounts in this column include the Corporation’s contributions to the Retirement Plan, the dollar value of Corporation-paid life insurance premiums under a life insurance plan, both of which are generally available to all members, and the dollar value of SIP. Contributions under the Retirement Plan in 2023, 2022 and 2021, respectively, were as follows: Mr. Lorenger – $23,100; $21,350; $23,002; Mr. Bridges – $23,100; $21,350; $23,002; Mr. Berger – $15,065; $25,549; $34,154; Mr. Bradford - $23,100; $21,350; $23,002; and Mr. Bullock - $23,100; $21,350. The dollar value of Corporation-paid life insurance premiums under a life insurance plan in 2023, 2022, and 2021 was $142 per year for each Named Executive Officer. The dollar values earned under the SIP for 2023, 2022 and 2021, respectively, were as follows: Mr. Lorenger – $198,713; $203,601; $188,853; Mr. Bridges – $66,840; $68,920; $64,437; Mr. Berger – $87,422; $115,557; $153,445; Mr. Bradford - $53,685; $56,307; $53,278; and Mr. Bullock - $26,152; $32,014. The SIP common stock for 2021 was issued February 28, 2022, SIP for 2022 and 2023 was paid in cash. |
2023 SUMMARY COMPENSATION TABLE
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Grants of Plan Based Awards
Grants of Plan Based Awards The table below shows the grants of plan-based awards to the Named Executive Officers during 2023, including PSUs and RSUs granted under the Stock Plan and Annual Incentive Plan. For additional information on the Stock Plan and the Annual Incentive Plan, see “Long-Term Incentive” on page 38 and “Annual Incentive” on page 34.
Grants of Plan Based Awards
| Name | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards (2) | | | All Other Stock Awards: Number of Shares of Stock or Units (#) (3) | Grant Date Fair Value of Stock and Option Awards ($) (4) | | | | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | Jeffrey D. Lorenger Performance Share Units Restricted Stock Units Annual Incentive Plan | | | | | | | | | | | | 2/15/2023 | | | | 14,119 | 56,476 | 112,952 | | 1,776,735 | | | 2/15/2023 | | | | | | | 56,476 | 1,776,735 | | | | 469,680 | 1,236,000 | 2,286,600 | | | | | | | Marshall H. Bridges Performance Share Units Restricted Stock Units Annual Incentive Plan | | | | | | | | | | | | 2/15/2023 | | | | 3,328 | 13,312 | 26,624 | | 418,796 | | | 2/15/2023 | | | | | | | 13,312 | 418,796 | | | | 159,144 | 418,800 | 774,780 | | | | | | | Vincent P. Berger Performance Share Units Restricted Stock Units Annual Incentive Plan | | | | | | | | | | | | 2/15/2023 | | | | 2,905 | 11,620 | 23,240 | | 365,565 | | | 2/15/2023 | | | | | | | 11,620 | 365,565 | | | | 144,467 | 380,175 | 703,324 | | | | | | | Steven M. Bradford Performance Share Units Restricted Stock Units Annual Incentive Plan | | | | | | | | | | | | 2/15/2023 | | | | 1,439 | 5,757 | 11,514 | | 181,115 | | | 2/15/2023 | | | | | | | 5,757 | 181,115 | | | | 137,655 | 362,250 | 670,163 | | | | | | | B. Brandon Bullock Performance Share Units Restricted Stock Units Annual Incentive Plan | | | | | | | | | | | | 2/15/2023 | | | | 1,760 | 7,039 | 14,078 | | 221,447 | | | 2/15/2023 | | | | | | | 7,039 | 221,447 | | | | 131,271 | 345,450 | 639,083 | | | | | |
Outstanding Equity Awards at Year End
Outstanding Equity Awards at Year End The following table shows the Named Executive Officers’ outstanding equity awards as of the end of 2023. The table shows exercisable and unexercisable options, and PSUs and RSUs that have not vested.
Outstanding Equity Awards at Year End
| | Option Awards | | | | Stock Awards | | | | | | Name | Securities Underlying Unexercised Options Exercisable (#) | Securities Underlying Unexercised Options Unexercisable (#) | Option Exercise Price ($) | Option Expiration Date | Year of Grant | Number of RSUs that have not vested (#) (1) | Market value of RSUs that have not vested ($) (2) | Number of PSUs that have not vested (#) (3) | Market value of PSUs that have not vested ($) (2) | | Jeffrey D. Lorenger | 25,897 | | 51.54 | 2/18/2025 | 2021 | 13,978 | 584,700 | 41,934 | 1,754,099 | | | 72,102 | | 32.03 | 2/17/2026 | 2021 | 99,475 | 4,161,039 | | | | | 46,050 | | 46.62 | 2/15/2027 | 2022 | 25,746 | 1,076,955 | 38,645 | 1,616,520 | | | 76,336 | | 38.68 | 2/14/2028 | 2023 | 56,476 | 2,362,391 | 56,476 | 2,362,391 | | | 64,389 | | 37.29 | 6/28/2028 | | | | | | | | 195,633 | | 39.77 | 2/13/2029 | | | | | | | Marshall H. Bridges | 4,217 | | 51.54 | 2/18/2025 | 2021 | 3,338 | 139,629 | 10,014 | 418,886 | | | 10,223 | | 32.03 | 2/17/2026 | 2021 | 30,229 | 1,264,479 | | | | | 27,104 | | 46.62 | 2/15/2027 | 2022 | 6,103 | 255,288 | 9,154 | 382,912 | | | 42,252 | | 38.68 | 2/14/2028 | 2023 | 13,312 | 556,841 | 13,312 | 556,841 | | | 46,266 | | 39.77 | 2/13/2029 | | | | | | | Vincent P. Berger | 4,965 | | 51.54 | 2/18/2025 | 2021 | 3,046 | 127,414 | 9,136 | 382,159 | | | 11,574 | | 32.03 | 2/17/2026 | 2021 | 25,581 | 1,070,053 | | | | | 6,594 | | 44.04 | 5/10/2026 | 2022 | 5,328 | 222,870 | 7,991 | 334,264 | | | 20,533 | | 46.62 | 2/15/2027 | 2023 | 11,620 | 486,065 | 11,620 | 486,065 | | | 36,737 | | 38.68 | 2/14/2028 | | | | | | | | 40,500 | | 39.77 | 2/13/2029 | | | | | | | Steven M. Bradford | 5,976 | | 51.54 | 2/18/2025 | 2021 | 1,490 | 62,327 | 4,469 | 186,938 | | | 13,617 | | 46.62 | 2/15/2027 | 2021 | 13,805 | 577,463 | | | | | 19,102 | | 38.68 | 2/14/2028 | 2022 | 2,665 | 111,477 | 3,997 | 167,195 | | | 20,182 | | 39.77 | 2/13/2029 | 2023 | 5,757 | 240,815 | 5,757 | 240,815 | | B. Brandon Bullock | 24,351 | | 39.77 | 2/13/2029 | 2021 | 1,638 | 68,518 | 5,508 | 230,400 | | | | | | | 2021 | 6,851 | 286,577 | | | | | | | | | 2022 | 3,089 | 129,213 | 4,633 | 193,798 | | | | | | | 2023 | 7,039 | 294,441 | 7039 | 294,441 |
Options Exercised and Stock Vested
Options Exercised and Stock Vested The following table shows information concerning Named Executive Officers’ exercise of stock options and stock vesting during 2023.
Options Exercised and Stock Vested
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) (1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) (2) | | Jeffrey D. Lorenger | 39,617 | 141,859 | 40,441 | 1,267,384 | | Marshall H. Bridges | 9,636 | 18,857 | 9,633 | 301,886 | | Vincent P. Berger | 8,712 | 14,702 | 8,556 | 268,146 | | Steven M. Bradford | 30,878 | 170,254 | 4,228 | 132,507 | | B. Brandon Bullock | | | 5,096 | 159,702 |
Nonqualified Deferred Compensation
Nonqualified Deferred Compensation The Deferred Plan allows executives to defer compensation to a cash account earning interest at a rate set annually at 1% above the prime interest rate or to the Corporation’s notional stock account in the form of nonvoting share units earning dividends distributed to shareholders which are then automatically reinvested in additional nonvoting share units. In 2023, no Named Executive Officers participated in the Deferred Plan. For additional information on the Deferred Plan, see “Additional Compensation Programs and Policies – Deferred Compensation Plan” on page 40.
Potential Payment Upon Termination or Change in Control
Potential Payment Upon Termination or Change in Control Retirement, death, disability and change in control (“CIC”) events trigger the payment of compensation to the Named Executive Officers.
Pay versus Performance
Pay versus Performance In accordance with rules adopted by the SEC pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the Corporation provides the following disclosure for its four most recent fiscal years. The following table shows pay versus performance (PVP) information for the Named Executive Officers.
Pay versus Performance
| Year | Summary Compensation Table Total for CEO (1) | Compensation Actually Paid (CAP) to CEO (2) | Average Summary Compensation Table Total for Non-CEO Named Executive Officers (1) | Average Compensation Actually Paid (CAP) for Non- CEO Named Executive Officers (2) | Value of Initial Fixed $100 Investment Based on: | | Net Income ($000) (4) | Adjusted EBIT ($000) (5) | | | | | | | Total Shareholder Return (3) | Peer Group Total Shareholder Return (3) | | | | 2023 | 7,102,944 | 12,515,492 | 1,781,035 | 2,738,287 | 129 | 65 | 49,226 | 178,123 | | 2022 | 5,675,554 | (1,815,166) | 1,405,252 | 106,684 | 84 | 44 | 123,873 | 128,359 | | 2021 | 9,132,815 | 12,666,026 | 2,352,863 | 3,104,883 | 120 | 78 | 59,814 | 100,728 | | 2020 | 4,907,623 | 3,421,825 | 1,491,383 | 1,190,173 | 96 | 75 | 41,917 | 107,028 |
Notes
| 2. | Calculated in accordance with Item 402(v) of Regulation S-K. Compensation actually paid (“CAP”) is defined by the SEC and is computed by subtracting the amounts in the “Stock Awards” and “Option Awards” columns of the SCT for each year from the “Total” column of the SCT and then making the equity award adjustments described below, all of which are computed in a manner consistent with the fair value methodology used to account for share-based payments in the Company’s GAAP financial statements. The following tables reflect the adjustments made to SCT total compensation to compute CAP for the CEO and average CAP for the other NEOs. |
Directors and Officers
Directors and Officers The address of the persons listed below is 600 East Second Street, Muscatine, Iowa 52761.
Directors and Officers
| Name of Beneficial Owner | Common Stock (1) | Common Stock Units (2) | Stock Options Exercisable as of the Record Date or Within 60 Days Thereof | Total Stock and Stock-Based Holdings | Percent of Class (3) | | Mary A. Bell | 34,094 | 42,089 | | 76,183 | * | | Miguel M. Calado | 39,488 | | | 39,488 | * | | Cheryl A. Francis | 80,570 | | | 80,570 | * | | Patrick D. Hallinan | 9,175 | | | 9,175 | * | | John R. Hartnett | 34,814 | | | 34,814 | * | | Mary K.W. Jones | 31,473 | 2,351 | | 33,824 | * | | Larry B. Porcellato | 19,039 | 23,679 | | 42,718 | * | | Dhanusha Sivajee | 18,513 | | | 18,513 | * | | Abbie J. Smith | 31,369 | 58,705 | | 90,074 | * | | Jeffrey D. Lorenger | 201,603 | | 480,407 | 682,010 | 1.4% | | Marshall H. Bridges | 56,462 | | 130,062 | 186,524 | * | | Vincent P. Berger | 51,231 | | 109,329 | 160,560 | * | | Steven M. Bradford | 54,608 | | 39,284 | 93,892 | * | | B. Brandon Bullock | 15,591 | | 24,351 | 39,942 | * | | All Directors and executive officers as a group (20 persons) | 757,877 | 126,824 | 877,614 | 1,603,160 | 3.36% |