DEF 14A of Gentherm Inc
Filed Apr 4, 2024 · FY20230001140361-24-017925
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SHAREHOLDER MEETING TO BE HELD MAY 16, 2024
| Potential Payments Upon Termination or Change in Control at December 31, 2023 | 88 | | PAY VERSUS PERFORMANCE | 92 | | Pay Versus Performance Table | 92 | | Company Selected Measure | 94 | | Financial Performance Measures | 94 | | Analysis of Information Presented in the Pay Versus Performance Table | 95 | | CEO PAY RATIO | 99 | | RELATED PERSON TRANSACTIONS | 101 | | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT | 102 | | AUDIT COMMITTEE REPORT | 104 | | AUDIT COMMITTEE MATTERS | 106 | | Pre-Approval Policies and Procedures | 106 | | Independent Registered Public Accounting Firm Fees | 106 | | PROPOSAL NO. 2—RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2024 | 107 | | Support for Recommendation | 108 | | Advisory Vote | 108 | | PROPOSAL NO. 3—ADVISORY VOTE ON NAMED EXECUTIVE OFFICER COMPENSATION | 109 | | Support for Recommendation | 109 | | Advisory Vote | 110 | | ABOUT THE ANNUAL MEETING | 111 | | ADDITIONAL INFORMATION | 115 | | Equity Compensation Plans | 115 | | Forward-Looking Statements | 115 | | Delinquent Section 16(A) Reports | 116 | | Solicitation by Board; Expenses | 116 | | Requirements for Submission of Shareholder Proposals and Nominations for 2025 Annual Meeting | 117 | | Householding for Shareholders Sharing the Same Address | 117 | | Availability for 2023 Annual Report to Shareholders | 117 |
2023 NEO Compensation Program
| ANNUAL BONUS | Adopted 2023 Senior Level Bonus Plan | ▪ Payout opportunity of 0% to 200% of target bonus, consistent with historical practice ▪ NEO bonus solely based on objective Company performance measures ▪ Revised performance metrics from two (Adjusted EBITDA and Revenue, equally weighted) to four ▪ Added a new performance metric (Relative Automotive Revenue Growth), and changed the strategic goals from a performance modifier for non-CEO NEOs to a performance metric for all NEOs ▪ Revised performance metrics and weighting include Adjusted EBITDA (40% weighted), Revenue (20% weighted), Relative Revenue Growth (20% weighted) and Strategic Goals (20% weighted) ▪ Strategic Goals consist of Automotive New Business Awards (40% weighted), New Technology Wins (40% weighted) and a new sustainability metric, the Increase in Renewable Energy Share (20% weighted) | | EQUITY AWARDS | Continued emphasis of pay-for-performance equity program utilized since 2018 | ▪ 70% and 60% of target value for CEO and other NEOs, respectively, granted in PSUs (with total opportunity of 0% to 200% of target PSUs) ▪ Revised performance metrics from three to four ▪ Added a new performance metric, Relative Revenue Growth, and reduced the weighting of ROIC ▪ Revised performance metrics and weighting include Cumulative Adjusted EBITDA (40% weighted), Relative TSR (20% weighted), ROIC (20% weighted) and Relative Revenue Growth (20% weighted), each with a payout opportunity of 0% to 200% of applicable target PSUs ▪ 30% and 40% of target value for CEO and other NEOs, respectively, granted in time-based RSUs |
Summary of 2023 CEO Target and Earned Compensation
| Base Salary | Annual Bonus | Equity Awards | | A 5% increase in base salary from $925,000 in 2022 to $971,000 in 2023 (effective April 1, 2023) | A continuation in target bonus (as a percentage of base salary) of 125% in 2023 | A 12.5% increase in the total grant value* of equity awards from $4 million in 2022 to $4.5 million in 2023, with the full increase granted in PSUs |
Compensation Governance
| WHAT WE DO | | Independent Compensation and Talent Committee and independent compensation consultant | | | | Annually evaluate peer group and review benchmarking and broad industry market data | | | | Objective Company performance metrics in annual cash bonus and long-term equity incentive plans, with evolving metrics and weighting aligned with Company strategy and shareholders | | | | Utilize formal adjustment policy for incentive programs, and provide transparent disclosure on annual implementation | | | | Significant performance-based compensation with fixed payout caps, at-risk compensation and long-term performance period for PSUs | | | | Stock ownership guidelines applicable to our executive officers and directors | | | | Annual say-on-pay shareholder vote and shareholder outreach on compensation matters | | | | Compensation and Talent Committee oversight to confirm no undue risk in compensation programs of the Company | | | | Clawback policy for financial restatements applicable to executive officers | | | | Adopted new equity plan in 2023 that reasonably balances stakeholder interests | | | | Maintain a Securities Trading Policy to reduce trading risk and liability, including requiring directors, executive officers and other key employees to trade only during pre-established periods following pre-clearance procedures, and to establish guidelines for Rule 10b5-1 trading plans |
Compensation Governance
| WHAT WE DON’T DO | | No repricing/replacing underwater stock options and SARs | | | | Prohibition on hedging and pledging, and using derivatives | | | | No single-trigger change in control benefit for any NEO | | | | No excise tax gross-up benefits upon a change in control | | | | Historically have not paid guaranteed bonuses, excluding inducement and new hire bonuses | | | | Historically have not changed long-term performance metrics in outstanding equity awards in spite of certain impacts from macroeconomic and geopolitical challenges that were not in our control |
Compensation Governance
| | Provides significant perquisites, other than a nonqualified deferred compensation program and benefits customary for expatriates on international assignment |
Compensation Governance
| TOPIC | PAGE | TOPIC | PAGE | | Audit Fees | 109 | Human Capital Management | 35 | | Board Leadership | 15 | Pay Versus Performance | 94 | | CEO Pay Ratio | 102 | Peer Group | 71 | | Clawback Policy | 78 | Proposals and Required Approvals | 117 | | Director Attendance | 39 | Risk Oversight | 31 | | Director Nominee Backgrounds | 22 | Standing Committees of the Board | 39 | | Director Diversity, Age and Tenure | 17 | Stock Ownership Guidelines – Directors | 52 | | Director Independence | 31 | Stock Ownership Guidelines – Officers | 77 | | Director Qualifications | 18 | Succession Planning | 33 | | Elements of Compensation | 64 | Sustainability and Social Responsibility | 34 | | Securities Trading Policy; Limits on Hedging and Pledging | 48 | Target Pay Mix | 65 |
Director Recruitment Process
| DIRECTOR RECRUITMENT PROCESS | | 01. STRATEGIC PLANNING Nominating and Corporate Governance Committee is committed to addressing long-term recruiting and succession planning needs and aligning with Company strategy, and it maintains an evergreen portfolio of potential candidates, informed by Board member and management recommendations from their professional networks and from a national search firm, that is regularly reviewed and updated (including focus on skills, gender and ethnic diversity). | | 02. DIRECTOR PROFILE AND BOARD COMPOSTION Search Committee identifies desired qualifications, attributes, skills and experience that should be prioritized in near term to enrich the Board, and considers Company business and strategic needs and current Board composition. | | 03. CANDIDATE RECOMMENDATIONS Search Committee refers to candidate portfolios and may solicit additional recommendations from one or more global search firms using director profile and also considers recommendations from Board members and management. Search Committee evaluates any recommendations from shareholders during the year. | | 04. CANDIDATE REVIEW AND INTERVIEWS Search Committee and senior management review the qualifications, attributes, skills and experience of each proposed candidate and conducts interviews with leading candidates. | | 05. EVALUATION & RECOMMENDATIONS Search Committee recommends one or more leading prospective candidates to the Board after an extensive and iterative evaluation process. | | 06. BOARD OF DIRECTORS REVIEW & DECISION All or substantially all of Board interviews each recommended candidate and reviews such person’s respective qualifications and overall suitability to the Board. Upon recommendation of the Nominating and Corporate Governance Committee of a specific candidate, the Board decides whether to concur with such recommendation and, if so, whether to appoint a candidate mid-year to fill a vacancy and/or nominate at the next annual meeting of shareholders. | | 07. ONBOARDING PLAN The Board Chair, with guidance from other directors, and senior management develop and deliver an onboarding plan for the candidates designed to familiarize the candidate with Board members and senior management, Board structure and operation, key corporate policies, the Company and its performance, corporate objectives and goals and long-term strategy, to be implemented upon appointment or election. | | 08. BOARD APPOINTMENT AND/OR SHAREHOLDER VOTE The Board may appoint the director to fill a mid-year vacancy for a term through the next annual meeting of shareholders, or the Company will submit such candidate as a director nominee together with other director nominees for shareholder vote at the annual meeting. |
Director Recruitment Process
| 21 | | 2024 PROXY STATEMENT |
Director Recruitment Process
2024 DIRECTOR NOMINEE BACKGROUNDS
Director Recruitment Process
| DIRECTOR QUALIFICATIONS | | | | | | | | | | Automotive | | Financial & Accounting | | Global Management | | Public Company | | | Senior Leadership | | | | | | |
Director Recruitment Process
Ms. Desormière has broad experience in product planning, product development and market analysis. Her background in these areas assists the Company in its development of long-term product strategies. In addition, the skills Ms. Desormière has developed while working at and serving on the board of global companies with significant European operations enables her to provide key insight with respect to the Company’s integration of its worldwide operations and well as the development of its sustainability focus. Professional Experience Ms. Desormière is the Chief Growth Officer of Aliaxis Group SA/NV, a global leader in advanced piping solutions for water and energy. As Chief Growth Officer, Ms. Desormiѐre is responsible for product strategy, business strategy and models for accelerating growth and achieving sustainable performance, and marketing, all in support of Aliaxis’ Growth with Purpose strategy. Previously in 2022, she was Chief Executive Officer of NAVYA, an autonomous mobility systems company. Prior to joining NAVYA, Ms. Desormière served as the Chief Executive Officer of AALPS Capital, a private equity management company based in France. Immediately prior to joining AALPS Capital in 2018, Ms. Desormiére was General Manager Marketing and Sales and Senior Executive Vice President at Solvay, a Belgium-based developer of specialty chemicals, starting in 2010. Previously, Ms. Desormière spent 17 years in increasingly responsible positions at Valeo, an independent industrial group focused on the design, production and sale of components, integrated systems and modules for the automotive industry, including Research & Development Product Line Director, Branch Marketing Innovation Director, Group Product Marketing Director and Comfort Enhancement Domain Director. Ms. Desormière is a member of the board of Somfy S.A., which was publicly traded prior to becoming a private company in 2022. Ms. Desormière is a graduate of the Ecole Nationale Supérieure de Chimie de Paris, the Institut de Formation du Caoutchouc and the Program for Management Development at Harvard Business School. Other Public Boards Service: (within last 5 years)
Director Recruitment Process
| ■ | Somfy S.A. (2017-2022) |
Director Recruitment Process
| ■ | NAVYA (2022) |
Director Recruitment Process
| 22 | | 2024 PROXY STATEMENT |
Director Recruitment Process
| DIRECTOR QUALIFICATIONS | | | | | | | | | | Automotive | | Financial & Accounting | | Global Management | | Public Company | | | R&D and Commercialization of Technologies | | Senior Leadership | | | | |
Director Recruitment Process
Mr. Eyler’s extensive experience in the automotive industry, our largest market, enables him to understand and manage our business. His prior leadership experience at a growing automotive supplier brings an important skill to the Board, as we strive to continue to grow our various lines of business. Mr. Eyler’s familiarity with managing manufacturing operations also is critical to the Company. As the Chief Executive Officer, Mr. Eyler is responsible for our strategic direction and operational leadership, with extensive knowledge of the day-to-day operations of our business. Being our highest ranked officer, coupled with the managerial positions he previously held with other automotive-related companies, gives Mr. Eyler industry insight and leadership and executive management skills key to our performance. Professional Experience Phillip Eyler is President and Chief Executive Officer of the Company. Mr. Eyler joined Gentherm in December 2017 and also serves on the Company’s Board. As President and CEO, Mr. Eyler leads more than 14,000 employees in 13 countries and is responsible for the strategic direction and operational leadership of the Company. Mr. Eyler joined Gentherm from Harman International Industries, Inc., a subsidiary of Samsung Electronics Co., Ltd. focused on connected technologies for automotive, consumer and enterprise markets, where he served as President of the Connected Car division from 2015 until 2017. Under his leadership, he oversaw the $3 billion division of more than 8,000 employees that was dedicated to developing integrated connected car systems encompassing infotainment, telematics, connected safety and cyber security solutions, among others. Throughout his 20-year career at Harman, Mr. Eyler served in a variety of leadership roles of increasing responsibility. He was Senior Vice President and General Manager of Harman’s Global Automotive Audio business from 2011 until 2015. Prior to leading the Global Automotive Audio business, Mr. Eyler was responsible for Harman’s North American Automotive business and led Harman’s North American and Asian manufacturing group. Mr. Eyler also serves as an independent board member for Sleep Number Corporation (Nasdaq: SNBR). Mr. Eyler received a Bachelor of Science degree in Mechanical Engineering from Purdue University and a Master of Business Administration from the Fuqua School of Business at Duke University. Other Public Boards Service:
Director Recruitment Process
| ■ | Sleep Number Corporation (2021 - present) |
Director Recruitment Process
| 23 | | 2024 PROXY STATEMENT |
Director Recruitment Process
| DIRECTOR QUALIFICATIONS | | | | | | | | | | Automotive | | Financial & Accounting | | Global Management | | Public Company | | | Senior Leadership | | | | | | |
Director Recruitment Process
As current President and Chief Executive Officer, and formerly as Vice President and General Manager, Automotive segment, and Vice President, Global Operations at Littelfuse, Inc., Mr. Heinzmann has extensive executive management and operational expertise, particularly in the automotive industry and regarding global manufacturing. In addition, as the Chief Executive Officer of a public company, he has expertise in strategic planning, risk management, public reporting considerations and public company governance. Professional Experience Mr. Heinzmann is President and Chief Executive Officer and a member of the board of directors of Littelfuse, Inc. (Nasdaq: LFUS), a global manufacturer of leading technologies in circuit protection, power control and sensing. He has served as President and Chief Executive Officer since 2017, leading the strategic direction, customer development and new product strategy of Littelfuse. He began his career with Littelfuse in 1985 as a manufacturing engineer and has held positions of increasing responsibility, including Vice President, Global Operations from 2007 to 2014 and Chief Operating Officer from 2014 to 2017. Mr. Heinzmann previously served on the board of directors of Pulse Electronics Corporation (OTC: PULS) from 2014 until its acquisition by Yageo Corporation in May 2018. Mr. Heinzmann serves as a member of the technology committee of Littelfuse’s board. Mr. Heinzmann holds a Bachelor’s degree in Mechanical Engineering from Missouri University of Science and Technology and is a graduate of Stanford Directors’ College at Stanford University Law School and AeA/Stanford Executive Institute at Stanford University Graduate School of Business. Other Public Boards Service:
Director Recruitment Process
| ■ | Littelfuse, Inc. (2017- present) |
Director Recruitment Process
| 24 | | 2024 PROXY STATEMENT |
Director Recruitment Process
| DIRECTOR QUALIFICATIONS | | | | | | | | | | Automotive | | Financial & Accounting | | Global Management | | Public Company | | | Senior Leadership | | | | | | |
Director Recruitment Process
Mr. Hundzinski’s deep experience as the Chief Financial Officer of multiple large, global automotive suppliers, as well as serving as a public company director, brings important practical experience to the Board. He understands the key operational, strategic and financial issues of the Company as an executive of public and private companies in the automotive industry, and he can provide unique, real-time advice on critical industry matters. Mr. Hundzinski also has significant finance and accounting expertise, and the Board has determined this qualifies him as an “audit committee financial expert” under SEC rules. His expertise and knowledge in our largest industry segment brings invaluable insight to the Board. Professional Experience Mr. Hundzinski served as the Chief Financial Officer and an Executive Director of TI Fluid Systems from January 2020 until his retirement in April 2023. Previously, he served as the Executive Vice President of Finance for Tenneco Inc. (NYSE: TEN) from January 2018 to December 2019. From 2012 to 2018, Mr. Hundzinski served as the Executive Vice President and Chief Financial Officer of BorgWarner, Inc. From 2005 to 2012, Mr. Hundzinski served in BorgWarner’s finance department in positions of increasing responsibility, including as Controller from 2010 to 2011 and Treasurer from 2011 to 2012. Mr. Hundzinski holds a Bachelor of Business Administration in Finance from Western Michigan University and a Master of Business Administration from the University of Colorado. Other Public Boards Service:
Director Recruitment Process
| ■ | TI Fluid Systems (2020 - 2023) |
Director Recruitment Process
| 25 | | 2024 PROXY STATEMENT |
Director Recruitment Process
| DIRECTOR QUALIFICATIONS | | | | | | | | | | Automotive | | Financial & Accounting | | Global Management | | Public Company | | | Senior Leadership | | | | | | |
Director Recruitment Process
Ms. Kowalchik has substantial experience and expertise in leading finance, operations, M&A and information technology matters for global companies across various industries, including automotive, which benefits the Board’s oversight of key growth strategies and risk management. She has also had significant senior leadership experience for global companies. In addition, her significant roles and expertise in finance, accounting and financial reporting supports the Board’s determination that she is an “audit committee financial expert” under SEC rules. Professional Experience Ms. Kowalchik is currently the Chief Financial Officer of Communications & Power Industries LLC (“CPI”), a global manufacturer of electronic components and subsystems primarily within the communications and defense markets, where she oversees the finance and accounting departments and is actively involved in strategy, M&A and restructuring activities. From November 2019 until she joined CPI in February 2023, Ms. Kowalchik served as the Chief Financial Officer of Dayco Incorporated, a global manufacturer and distributor of engine drive systems and aftermarket services for automotive, heavy-duty, and industrial markets. From December 2018 to July 2019, Ms. Kowalchik served as the Chief Financial Officer of Kenwal Steel Corp., a flat rolled steel service center primarily for the automotive industry. From March 2014 to December 2018, Ms. Kowalchik served as the Chief Financial Officer and Treasurer of Urban Science, a global automotive consultancy and technology firm. From 2010 to 2014, she worked at Kaydon Corporation as Vice President, Corporate Controller and Chief Accounting Officer. From 1998 to 2010, Ms. Kowalchik served in various senior financial roles at three international automotive suppliers, Metaldyne Corporation, Microheat, Inc. and Dura Automotive Systems, Inc. Ms. Kowalchik has served on the boards of various non-profit organizations, including current service on the board of trustees of The Children’s Foundation, including the finance and audit committee. Ms. Kowalchik has a Bachelor of Science in Business Administration from the University of Richmond and a Master of Business Administration from Indiana University.
Director Recruitment Process
| 26 | | 2024 PROXY STATEMENT |
Director Recruitment Process
| DIRECTOR QUALIFICATIONS | | | | | | | | | | Financial & Accounting | | Global Management | | Medical | | Public Company | | | R&D and Commercialization of Technologies | | Senior Leadership | | | | |
Director Recruitment Process
Mr. Kummeth’s significant experience in the medical industry is important to our business as we seek to grow our medical business and introduce new medical products to the market. In addition, his leadership experience, including as President and Chief Executive Officer of a public company and as a director of multiple public companies, provides the Board with an important perspective on many topics, including governance, shareholder engagement and risk management. Professional Experience Since retiring from Bio-Techne in 2024, Mr. Kummeth serves as Senior Advisor of New Mountain Capital Group, L.P., a private equity investment firm. From 2013 until his retirement in February 2024, Mr. Kummeth served as the President and Chief Executive Officer and a director of Bio-Techne Corporation (Nasdaq: TECH). Prior to joining Bio-Techne, Mr. Kummeth served as President of Mass Spectrometry and Chromatography at Thermo Fisher Scientific Inc. and was President of the Laboratory Consumables Division from 2009 to September 2011. Prior to joining Thermo Fisher, he served in various roles during his 24-year career at 3M Corporation, most recently as the Vice President of the company’s Medical Division from 2006 to 2008. Mr. Kummeth has served as a director of Orthofix Medical Inc. (Nasdaq: OFIX) since December 2023, including as a member of the strategy committee, the nominating, governance and sustainability committee and the compensation and talent development committee. He served as a director of Sparton Corporation (NYSE: SPA) from 2011 to 2019, where he was most recently a member of the compensation committee. In 2023, Mr. Kummeth joined the board of directors of PerkinElmer, Inc., a privately held subsidiary of New Mountain Capital Group, L.P., and developer of life science and diagnostic solutions. Also in 2023, Mr. Kummeth joined the board of directors of Actylis, a privately held manufacturer and supplier of raw materials and performance ingredients to the life sciences, specialty chemicals and agriscience industries. Mr. Kummeth received a Master of Science in Software Development and Design from the University of St. Thomas and a Master of Business Administration from the Carlson School of Business at the University of Minnesota. He is a graduate of the University of North Dakota, where he received a Bachelor of Science in Electrical Engineering. Other Public Boards Service: (within last 5 years)
Director Recruitment Process
| ■ | Orthofix Medical Inc. (2023 – present) |
Director Recruitment Process
| ■ | Bio-Techne Corporation (2013 – 2024) |
Director Recruitment Process
| ■ | Sparton Corporation (2011 – 2019) |
Director Recruitment Process
| 27 | | 2024 PROXY STATEMENT |
Director Recruitment Process
| DIRECTOR QUALIFICATIONS | | | | | | | | | | Automotive | | Financial & Accounting | | Global Management | | Senior Leadership |
Director Recruitment Process
Ms. Meter has deep technical accounting expertise specifically in the automotive industry, as an Audit Partner for 24 years focused on automotive OEMs and suppliers. As Managing Partner, Michigan, she has significant senior leadership experience and managed a substantial team at KPMG. The Board has determined that she is an “audit committee financial expert” under SEC rules. Professional Experience Ms. Meter served as Managing Partner, Michigan at KPMG LLP, a global firm that provides audit, tax and advisory services, from February 2018 until her retirement in December 2020. In this role, she led the strategic direction and growth of KPMG’s Detroit and Grand Rapids offices. She also served as the Partner-in-Charge of Audit for Michigan from 2013 to 2017, in addition to her role as an Audit Partner for 24 years where she gained extensive experience with operational, accounting, reporting and internal control issues, focused on automotive OEMs and suppliers. Ms. Meter currently serves on the board of directors for McNaughton-McKay Electric Company, VSP Global, Oakland Family Services, Inc., and Dealer Tire. She is a former board member of the Detroit Economic Club, Detroit Regional Chamber, Downtown Detroit Partnership, Automotive Hall of Fame, and the former chairperson of the Michigan Association of CPA’s. She holds a Bachelor’s degree in Accounting from Michigan State University. She is a Certified Public Accountant (CPA) and received an Honorary Doctor of Law degree from Walsh College.
Director Recruitment Process
| 28 | | 2024 PROXY STATEMENT |
Director Recruitment Process
| DIRECTOR QUALIFICATIONS | | | | | | | | | | Automotive | | Global Management | | Human Resources | | Public Company | | | Senior Leadership | | | | | | |
Director Recruitment Process
Mr. Stacey’s broad human resources experience in multi-national environments is extremely valuable, as a substantial portion of our employees are outside of the U.S. His specific experience in the automotive industry provides insight and guidance for managing our workforce, enhancing the skills of our existing employees and cultivating new talent, including our increasing focus on human capital management and sustainability. Additionally, Mr. Stacey has extensive background in executive compensation and pay-for- performance programs. Professional Experience Mr. Stacey served as a Senior Advisor of Harman International Industries, Inc., a subsidiary of Samsung Electronics Co., Ltd., until 2023, following his retirement in 2022 from his full time position with Harman. From 2008 until his retirement in 2022, he served as the Executive Vice President and Chief Human Resources Officer at Harman. Previously, Mr. Stacey served in various senior human resources positions with Anheuser-Busch InBev SA/NV from 1990 to 2008, including, most recently, as Vice President, People for InBev North America, InBev Central and Eastern Europe from 2005 through January 2008. Mr. Stacey currently serves as a director on the Board of Powell Industries, Inc. (Nasdaq: POWL). Mr. Stacey serves on the board of directors of Powell Industries, Inc. (Nasdaq: POWL), including serving currently as a member of the compensation committee and the nominating and governance committee. Mr. Stacey also serves as a member of the board of directors of Koki Holdings Co., Ltd., a private company, including as a member of the nominating and compensation committee. Mr. Stacey received a Bachelor of Commerce from Memorial University of Newfoundland. Other Public Boards Service:
Director Recruitment Process
| ■ | Powell Industries, Inc. (2022 – present) |
Director Recruitment Process
| 29 | | 2024 PROXY STATEMENT |
Director Recruitment Process
| DIRECTOR QUALIFICATIONS | | | | | | | | | | Automotive | | Financial & Accounting | | Global Management | | Medical | | | Public Company | | R&D and Commercialization of Technologies | | Senior Leadership | | |
Director Recruitment Process
Dr. Washington has substantial experience and expertise in leading technology development for global companies across industries, which enables him to provide oversight of critical opportunities and risks for our R&D innovation and growth strategies. He also has significant knowledge of key Board risk oversight areas, including cybersecurity, compliance and general risk management. In addition, his work at Ford provided him with extensive knowledge of the automotive industry. Further, his experience as a member of various boards of directors of public and private technology companies positions Dr. Washington to provide unique and valuable insights regarding strategic planning and governance of high-growth, technology-focused companies. Professional Experience Dr. Washington is the Senior Vice President, Chief Technology and Innovation Officer of Medtronic plc (NYSE: MDT), a global healthcare technology company that provides device-based medical therapies and services, where he leads innovation and disruption across the healthcare technology marketplace and the expansion of technology platforms across Medtronic’s portfolio. From August 2021 until he joined Medtronic in June 2023, Dr. Washington served as the Vice President and General Manager, Consumer Robotics for Amazon (Nasdaq: AMZN). During the prior seven years, Dr. Washington held varying positions at Ford Motor Company (NYSE: F), a global automobile manufacturer, including serving as Chief Technology Officer from June 2017 to July 2021. From 2007 to 2014, Dr. Washington worked at Lockheed Martin Corporation, a global security and aerospace company, including as Vice President of the Advanced Technology Center and its first Chief Privacy Officer. Dr. Washington also served for approximately 21 years in various roles at Sandia National Laboratories, including as Chief Information Officer. From July 2019 to October 2021, Dr. Washington served as a member of the board of directors of McKesson Corporation (NYSE: MCK), including as a member of the compliance and finance committees. He also has served on numerous private company boards and advisory boards of academic institutions. Dr. Washington earned his Bachelor’s, Master’s and Doctorate degrees in Nuclear Engineering from Texas A&M University. Other Public Boards Service:
Director Recruitment Process
| ■ | McKesson Corporation (2019 – 2021) |
Director Recruitment Process
| 30 | | 2024 PROXY STATEMENT |
Director Recruitment Process
A BOARD SUBSTANTIALLY CONSISTING OF INDEPENDENT DIRECTORS The Board recently undertook its annual review of director independence in accordance with the applicable rules of Nasdaq. The independence rules include a series of objective tests, including that the director is not employed by the Company and has not engaged in various types of business dealings with us. In addition, the Board is required to make a subjective determination as to each independent director that no relationship exists which, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Consistent with these considerations, the Board has affirmatively determined that each of Ms. Desormière, Ms. Hao (through her resignation on January 16, 2023), Mr. Heinzmann, Mr. Hundzinski, Mr. Kummeth, Ms. Kowalchik, Ms. Meter, Dr. Shaw, Mr. Stacey and Mr. Washington are independent under the applicable rules of Nasdaq. Mr. Eyler is employed by the Company and therefore is not an independent director. Each member of the Audit Committee, the Compensation and Talent Committee, the Nominating and Corporate Governance Committee, the Mergers and Acquisitions Committee and the Technology Committee is independent under Nasdaq rules. In addition, the Board has affirmatively determined that the members of the Audit Committee and Compensation and Talent Committee qualify as independent in accordance with the additional independence rules established by the U.S. Securities and Exchange Commission (the “SEC”) and Nasdaq. In making these determinations, the Board reviewed and discussed information provided by the directors with regard to each director’s business and personal activities as they may relate to us and our management. In particular, the Board considered Mr. Heinzmann’s role as Chief Executive Officer of Littelfuse, Inc., which is a supplier to the Company. In determining that Mr. Heinzmann satisfies the Nasdaq objective independence tests and that his independence was not otherwise impaired under the subjective criteria, the Board determined that the Company’s supply relationship with Littelfuse, Inc. would not interfere with Mr. Heinzmann’s exercise of independent judgment. In making this determination, the Board considered, among other things, that Littelfuse, Inc. supplies diodes to the Company under a routine, ordinary course supply arrangement, and that the Company selected Littelfuse, Inc. following a request for quotations process. Further, the Company’s payments for diodes manufactured by Littelfuse, Inc. (indirectly through distributors) were substantially below 1% of Littelfuse, Inc.’s consolidated gross revenue for each of the last three fiscal years. BOARD AND BOARD COMMITTEES DEEPLY FOCUSED ON OVERSEEING RISK MANAGEMENT The Board oversees the Company’s risk management directly and through Board Committees:
Director Recruitment Process
| FULL BOARD | ■ General risk management oversight, including reputational risks, crisis management and macroeconomic and geopolitical risk (such as supply chain challenges, the impact of various global conflicts, inflation, UAW strike with OEMs and other labor disruption), industry and product and technology evolution, employee safety, product safety and quality controls ■ Reviews and approves an annual business plan and reviews long-term strategy (including Fit for Growth 2.0), and engages third parties that advise on internal and external competitive dynamics ■ Reviews material risks and opportunities at each regular Board meeting ■ Reviews business developments, business plan implementation, liquidity and financial results ■ Oversees management succession planning ■ Discusses the Compensation and Talent Committee’s recommendations for chief executive officer compensation in executive session ■ Oversees capital spending, financings and cash management (including accelerated share repurchase program initiated in 2023), as well as significant mergers, acquisitions and divestitures ■ Review developments in shareholder activism and potential impact on the Company at least annually, including engagement with a national investment bank ■ Interacts with senior business leaders, with access to other key employees ■ Conducts focused sessions on emerging topics ■ Directors available for shareholder engagement |
Director Recruitment Process
| 31 | | 2024 PROXY STATEMENT |
Director Recruitment Process
| AUDIT COMMITTEE | ■ Oversees significant financial risk exposures (including financing arrangements, credit, liquidity, legal, regulatory and other contingencies), accounting and financial reporting, material non-financial reporting (e.g. sustainability reporting), the internal audit function, and the legal, regulatory and ethical compliance functions (including overseeing the ethics/whistleblower hotline) ■ Oversees disclosure controls and procedures and internal control over financial reporting, as well as internal controls related to cybersecurity incidents and reporting and sustainability reporting ■ Oversees the enterprise risk management process ■ Regularly consults with our independent registered public accounting firm and internal audit function regarding risk management controls ■ Reviews any material cybersecurity incidents and data breaches, and oversees the Company’s plans to mitigate cybersecurity and data privacy risks, respond to data breaches or ransomware and meet disclosure requirements ■ Reviews and monitors the use of derivatives, including for foreign currency ■ Monitors insurance and self-insurance policies | | COMPENSATION AND TALENT COMMITTEE | ■ Responsible for executive officer compensation and its alignment with our shareholders, strategy and operations, including through peer group benchmarking ■ Administers the CEO performance evaluation with input from the independent directors and oversees evaluation of other executive officers ■ Reviews compensation plans generally and the related incentives, risks and risk mitigation efforts (including key policies, such as the newly adopted clawback policy, as well as the adjustment policy for incentive plans) ■ Increasing role in overseeing human capital management, including talent acquisition, succession planning, talent development and training, employee engagement, total rewards offerings, corporate culture and diversity, equity, inclusion and belonging ■ Directors available for shareholder engagement on compensation matters | | NOMINATING AND CORPORATE GOVERNANCE COMMITTEE | ■ Oversees the Company’s governance policies (including the Corporate Governance Guidelines and Code of Business Conduct and Ethics, the latter of which was significantly refreshed in 2023 and approved by the Board in 2024), Board structure, leadership and independence, committee composition, and the annual self-evaluation process of the Board and Board Committees ■ Considers requisite director qualifications, attributes, skills and experience necessary for directors to oversee critical matters, including alignment with long-term strategy ■ Oversees director onboarding process and continuing training on core and emerging issues ■ Leads efforts with Chair of the Board, management and national search firm to address long-term recruiting and director succession planning needs, and oversees the ad hoc Search Committee that implements a specific director search process ■ Oversees the Company’s sustainability program and reporting thereof, and receives regular reports regarding the Company’s corporate social responsibility efforts ■ Directors available for shareholder engagement on governance matters | | MERGERS AND ACQUISITIONS COMMITTEE | ■ Oversees activities related to mergers, acquisitions, investments and dispositions, including strategy, implementation, integration and post-closing analysis ■ Approves transactions or reviews and recommends to the Board for approval, subject to limitations of delegation of authority | | TECHNOLOGY COMMITTEE | ■ Oversees the development and use of technology in current and potential future products, including the long-term strategic goals of the Company’s research and development initiatives ■ Assesses the Company’s risks associated with new product technology or significant innovations to existing product technology, including risks related to cybersecurity and data privacy and protection ■ Collaborates with consultants on technology advisory committee to gain additional market insights |
2023 Director Compensation – Continuation of Program Design and Pay Levels
2023 Director Compensation – Continuation of Program Design and Pay Levels In November 2021, the Compensation and Talent Committee reviewed non-employee director compensation for the 2022 director compensation program against peer group benchmarking data (using the same peer group used for NEO compensation), general industry data and market trend information presented by ClearBridge. The Compensation and Talent Committee determined to increase the program retainers to be approximately at or slightly above the 50th percentile of the peer group, effective as of January 1, 2022. Consistent with its approach of reviewing the non-employee director compensation program every other year, the Compensation and Talent Committee did not review the non-employee director compensation program against peer or market data for 2023, and no changes were made from the 2022 program. The following table sets forth the compensation program for non-employee directors in 2023.
2023 Director Compensation – Continuation of Program Design and Pay Levels
| ANNUAL CASH RETAINER FOR BOARD SERVICE: | | | Chair of the Board | $166,000 | | Other non-employee directors | $86,000 | | ANNUAL CASH RETAINERS FOR BOARD COMMITTEE SERVICE | | | Audit Committee-Chair | $20,000 | | Compensation and Talent, Nominating and Corporate Governance, Technology and Mergers and Acquisitions Committees-Chair | $15,000 | | Audit Committee-member | $10,000 | | Compensation, Nominating and Corporate Governance, Technology and Mergers and Acquisitions Committees-member | $7,500 | | ANNUAL EQUITY RETAINER | $125,000 |
2023 Director Compensation – Continuation of Program Design and Pay Levels
Consistent with historical practice, the annual cash retainers were paid to all of the directors in advance immediately following the 2023 annual meeting of shareholders. The restricted stock awards to existing directors were granted on the date of the 2023 annual meeting of shareholders. The number of shares of restricted stock granted to each non-employee director in 2023 was determined by dividing the target dollar value of each restricted stock award by the per share closing price of our common stock on the grant date. The equity retainer vests on the earlier of the first anniversary of the grant date or the date of the next annual meeting of shareholders. A director will forfeit their restricted stock in the event of termination of service as a non-employee director of the Company before the first anniversary of the grant date. However, in the event of a director termination due to death, disability or retirement, the Compensation and Talent Committee may accelerate the vesting of all or a portion of the restricted stock in its discretion at any time. During the restricted period, the restricted stock entitles the participant to all of the rights of a shareholder, including the right to vote the shares. Before the end of the restricted period, a participant may not sell, assign, pledge, or otherwise dispose of or hypothecate such person’s restricted stock. The Company does not provide any perquisites to directors, but does reimburse directors for out-of-pocket expenses incurred in attending Board and Board Committee meetings, as well as for director onboarding and continuing training related to service for the Company and Board.
2023 Director Compensation Table
2023 Director Compensation Table The table below sets forth the compensation of each non-employee director in 2023.
2023 Director Compensation Table
| | FEES EARNED OR PAID IN CASH | STOCK AWARDS | TOTAL | | NAME | ($) (1) | ($) (2) | ($) | | SOPHIE DESORMIÈRE | 108,500 | 125,000 | 233,500 | | YVONNE HAO | 44,600 | ― | 44,600 | | DAVID HEINZMANN | 111,000 | 125,000 | 236,000 | | RONALD HUNDZINSKI | 183,500 | 125,000 | 308,500 | | LAURA KOWALCHIK | 7,912 | 62,495 | 70,407 | | CHARLES KUMMETH | 116,000 | 125,000 | 241,000 | | BETSY METER | 110,677 | 125,000 | 235,677 | | BYRON SHAW II | 116,000 | 125,000 | 241,000 | | JOHN STACEY | 105,677 | 125,000 | 230,677 | | KENNETH WASHINGTON | 23,375 | 83,337 | 106,712 |
2023 Director Compensation Table
| (1) Reflects the sum of (a) the pro rata portion of each director’s cash retainer for Board and Board Committee service paid on the date of the 2022 annual meeting of shareholders covering the period from January 1 to May 18, 2023 and (b) the pro rata portion of each director’s cash retainer for Board and Board Committee service paid on the date of the 2023 annual meeting of shareholders (or upon later appointment) covering the period from May 18 to December 31, 2023. |
2023 Director Compensation Table
| (2) Reflects restricted stock awards granted under the 2023 Equity Incentive Plan (the “2023 Equity Plan”). The amounts reported represent the grant date fair value of the restricted stock award, which is the closing trading price of a share of our common stock on the grant date multiplied by the number of shares subject to the award. The closing price per share of our common stock on the grant date for all directors except for Ms. Kowalchik and Mr. Washington, May 18, 2023, was $58.23. The closing price per share of our common stock on the grant date for Mr. Washington, October 9, 2023, was $54.54, and the closing price per share of our common stock on the grant date for Ms. Kowalchik, December 5, 2023, was $45.75. The Company does not pay fractional shares. |
2023 Director Compensation Table
At December 31, 2023, Ms. Desormière, Mr. Heinzmann, Mr. Hundzinski, Mr. Kummeth, Ms. Meter, Dr. Shaw and Mr. Stacey held 2,147 shares of unvested restricted stock, Ms. Kowalchik held 1,366 shares of unvested restricted stock, and Dr. Washington held 1,528 shares of unvested restricted stock.
2024 Director Compensation
2024 Director Compensation In late 2023, the Compensation and Talent Committee reviewed non-employee director compensation for 2023 against peer group benchmarking data, general industry data and related information presented by Meridian. Meridian noted that the existing compensation program aligned with the Company’s peers and broader market trends from a structure and design perspective. However, the peer benchmarking data indicated that the annual equity compensation approximated the 25th percentile, while the total compensation approximated the median. The Compensation and Talent Committee determined to increase equity compensation by $10,000, effective as of the 2024 annual meeting.
Director Compensation Limit
Director Compensation Limit The 2023 Equity Plan provides that the sum of any cash compensation for service as an outside director of the Company and the grant date fair value (determined in accordance with U.S. generally accepted accounting principles) of all equity awards for service as an outside director of the Company will not exceed $600,000 in any calendar year for any individual outside director.
PSU Awards Outstanding During the Year Ended December 31, 2023
PSU Awards Outstanding During the Year Ended December 31, 2023 The following PSU awards were outstanding during the year ended December 31, 2023:
PSU Awards Outstanding During the Year Ended December 31, 2023
| AWARD | RELATIVE TSR (20%) PERFORMANCE PERIOD | ROIC (20%) PERFORMANCE PERIOD | ADJUSTED EBITDA (40%) PERFORMANCE PERIOD | RELATIVE REVENUE GROWTH (20%) PERFORMANCE PERIOD | | 2023 Award | Three-year period ending 3/14/2026 | 2025 | Three-year period ending 12/31/2025 | Three-year period ending 12/31/2025 |
PSU Awards Outstanding During the Year Ended December 31, 2023
| AWARD | RELATIVE TSR (20%) PERFORMANCE PERIOD | ROIC (40%) PERFORMANCE PERIOD | ADJUSTED EBITDA (40%) PERFORMANCE PERIOD | | 2022 Award | Three-year period ending 3/11/2025 | 2024 | Three-year period ending 12/31/2024 | | 2021 Award | Three-year period ending 3/12/2024 | 2023 | Three-year period ending 12/31/2023 |
PSU Awards Outstanding During the Year Ended December 31, 2023
| AWARD | RELATIVE TSR (50%) PERFORMANCE PERIOD | ROIC (50%) PERFORMANCE PERIOD | | 2020 Award | Three-year period ending 3/12/2023 | 2022 |
Determination of Earned 2020 PSU Awards (ROIC and Relative TSR)
Determination of Earned 2020 PSU Awards (ROIC and Relative TSR) In the first quarter of 2023, the Committee determined that: (i) 0% of the ROIC PSUs granted in 2020 were earned based on actual ROIC for 2022 of 7.75%, which was below threshold; and (ii) the Relative TSR PSUs granted in March 2020 were earned at 100% based on Relative TSR performance at the 50th percentile of the applicable Relative TSR comparison group during the three-year performance period, which was 13th out of 25 companies.
Determination of Earned 2021 PSU Awards (ROIC, Adjusted EBITDA and Relative TSR)
Determination of Earned 2021 PSU Awards (ROIC, Adjusted EBITDA and Relative TSR) 2021 PSUs were held by all NEOs except Mr. Sundaram, who joined the Company in September 2023. In first quarter of 2024, the Committee determined that (i) 0% of the ROIC PSUs granted in 2021 were earned based on actual ROIC performance of 12.82%, which was below threshold; (ii) 0% of the Adjusted EBITDA PSUs granted in 2021 were earned based on actual performance of $448 million; and (iii) the Relative TSR PSUs granted in March 2021 were earned at 100% based on Relative TSR performance at the 50th percentile of the applicable Relative TSR peer group during the three-year performance period, which was 13th out of 25 companies.
DEFERRED COMPENSATION PLAN
| ○ | Strategic goals (20% weighted) – maintained weighting and operating performance metrics from 2023 |
DEFERRED COMPENSATION PLAN
| ○ | Removed Relative TSR as an independent performance metric and utilized instead as a PSU payout modifier based on the Company’s actual TSR performance against the Company’s TSR peer group |
DEFERRED COMPENSATION PLAN
| ■ | If performance is below the 25th percentile, the PSU award payout will be downward modified by 25% |
DEFERRED COMPENSATION PLAN
| ■ | If performance is at or above the 75th percentile, the PSU award payout will be upward modified by 25% |
DEFERRED COMPENSATION PLAN
| ■ | Maintains definition of Relative TSR and the current TSR peer group |
DEFERRED COMPENSATION PLAN
| ○ | Removed ROIC from the PSU program |
Continuing Use of Independent Third-Party Consultant
Continuing Use of Independent Third-Party Consultant The Committee re-engaged ClearBridge as its independent compensation consultant for the 2023 NEO compensation program, including to: evaluate and assist in selecting an appropriate peer group; benchmark our executive compensation programs against the peer group and general market survey data; provide input on our executive compensation plan design and equity usage and allocation; assist with the Committee’s compensation risk assessment; and provide information regarding general compensation market trends. The Committee determined to conduct a competitive search process for its compensation consultation services in May 2023. The Committee had engaged ClearBridge as its compensation consultant since 2018, and ended such engagement in June 2023. ClearBridge generally completed its work plan for the 2023 NEO compensation program, except for the matters noted below. Following a search process that included six outside consulting firms, the Committee selected Meridian as its new independent compensation consultant, effective July 2023. Although Meridian’s work plan primarily related to the 2024 NEO compensation program, it did assist in 2023 with the Committee’s compensation risk assessment, provide information regarding general compensation market trends and address the implementation of the adjustment policy for the Senior Level Bonus Plan.
Use of Peer and Survey Data to Ensure Reasonable Compensation
Use of Peer and Survey Data to Ensure Reasonable Compensation The Committee utilized a combination of peer group benchmarking and general market survey data in setting 2023 compensation for Messrs. Eyler and Anversa and only market survey data for the other NEOs. The Committee does not target a certain percentile, but uses the 25th, 50th and 75th percentiles as reference points. In establishing the 2023 NEO compensation program, the Committee replaced Superior Industries International, Inc. (SUP) with Visteon Corporation (VC) due to Superior’s continued decline in market cap. The Committee considered the following companies to be comparable to Gentherm based on revenue, enterprise value and industry.
Timing and Pricing of Equity Grants
Timing and Pricing of Equity Grants The Committee does not coordinate the timing of equity grants with the release of material non-public information. The Committee generally grants equity awards for executive officers on an annual basis in the first quarter of the year in an open trading window (if available) based upon a pre-determined schedule approximately a year in advance, and for new hires on a pre-determined date once per month around the hire date. To minimize the impact of stock price volatility on the size of equity grants to our executive officers in 2023, the Committee divided target award values by the 30-day trailing average closing prices (rather than the grant date closing price) to determine the number of shares underlying each award. In accordance with the 2023 Equity Plan, the exercise or base price of stock option or stock appreciation rights (“SAR”) awards will be at least 100% of the fair market value of our common stock on the grant date (which is not earlier than the date the Committee approves such award). The Committee is authorized to modify, extend or renew outstanding stock options or SARs or accept the cancellation or surrender of such awards. However, the 2023 Equity Plan prohibits direct repricings (lowering the exercise price of a stock option or the base price of a SAR) and indirect repricings (cancelling an outstanding stock option or SAR and granting a replacement or substitute stock option or SAR with a lower exercise or base price, or otherwise exchanging such awards for cash, stock options, SARs or other awards).
Nonqualified Deferred Compensation
Nonqualified Deferred Compensation Section 409A of the Code provides that amounts deferred under nonqualified deferred compensation arrangements will be included in an employee’s income when paid, as well as be subject to additional taxes, penalties and interest, unless certain requirements under Section 409A are complied with. The Company believes that its compensation arrangements satisfy, or are exempt from, the requirements of Section 409A.
Change in Control Payments
Change in Control Payments If a company makes “parachute payments,” Section 280G of the Code prohibits the company from deducting the portion of the parachute payments constituting “excess parachute payments” and Section 4999 of the Code imposes on the payee a 20% excise tax on the excess parachute payments. For this purpose, parachute payments generally are defined as payments to specified persons that are contingent upon a change in control in an amount equal to or greater than three times the person’s base amount (i.e., the five-year average Form W-2 compensation). The excess parachute payments, which are nondeductible and subject to a 20% excise tax, equal the portion of the parachute payments that exceeds one times the payee’s base amount. If a covered employee receives excess parachute payments in any year, the $1 million deduction limitation applicable to the covered employee for such year under Section 162(m) of the Code is reduced (but not below zero) by the amount of the excess parachute payments. The employment contracts with our NEOs and the Company’s equity incentive plans may entitle participants to receive payments in connection with a change in control that may result in excess parachute payments. The Company is not obligated to pay any tax gross-ups with respect to the excise tax imposed on any person who receives excess parachute payments. COMPENSATION AND TALENT COMMITTEE REPORT The Compensation and Talent Committee has reviewed and discussed the Compensation Discussion & Analysis (“CD&A”) in this proxy statement with management, including Messrs. Eyler and Anversa. Based on such review and discussion, the Compensation and Talent Committee recommended to the Board that the CD&A be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 and the proxy statement for the 2024 annual meeting.
Change in Control Payments
| The Compensation and Talent Committee | | John Stacey, Chair | | Charles Kummeth | | Betsy Meter |
Change in Control Payments
The foregoing report is not “soliciting material,” is not deemed filed with the SEC and is not to be incorporated by reference into any of the Company’s filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this proxy statement and irrespective of any general incorporation language therein. NAMED EXECUTIVE OFFICER COMPENSATION TABLES SUMMARY COMPENSATION TABLE FOR 2023 The table below summarizes the total compensation paid to or earned by the NEOs in 2023, 2022 and 2021.
Change in Control Payments
| NAME AND PRINCIPAL POSITION | YEAR | SALARY ($) | BONUS ($)(1) | STOCK AWARDS ($)(2) | NON-EQUITY INCENTIVE PLAN COMPENSATION ($)(3) | ALL OTHER COMPENSATION ($)(4) | TOTAL ($) | | Phillip M. Eyler President and Chief Executive Officer | 2023 | 959,500 | — | 4,694,643 | 1,566,951 | 351,397 | 7,572,491 | | | 2022 | 911,250 | — | 3,499,553 | 786,250 | 205,733 | 5,408,566 | | | 2021 | 862,500 | — | 3,801,502 | 1,000,500 | 308,475 | 5,972,977 | | Matteo Anversa Executive Vice President of Finance, Chief Financial Officer and Treasurer | 2023 | 592,940 | — | 1,451,862 | 619,908 | 36,839 | 2,701,549 | | | 2022 | 555,511 | 300,000 | 693,348 | 306,335 | 37,025 | 1,892,219 | | | 2021 | 537,425 | — | 712,854 | 326,340 | 33,750 | 1,610,369 | | Hui (Helen) Xu Senior Vice President and General Manager, Asia Automotive | 2023 | 470,150 | — | 726,034 | 428,999 | 633,967 | 2,259,149 | | | 2022 | 442,442 | — | 520,002 | 204,036 | 498,043 | 1,664,523* | | | 2021 | 396,550 | — | 475,223 | 200,200 | 258,299 | 1,330,271 | | Vishnu Sundaram(5) Senior Vice President and Chief Technology Officer | 2023 | 153,353 | 849,248 | 760,063 | 134,982 | 6,550 | 1,904,196 | | Thomas Stocker(6) Senior Vice President and General Manager, Europe Automotive | 2023 | 492,941 | — | 726,034 | 451,865 | 30,639 | 1,701,479 | | | 2022 | 467,178 | — | 520,002 | 210,620 | 36,827 | 1,234,864 | | | 2021 | 488,685 | — | 594,118 | 246,135 | 32,800 | 1,361,738 |
Change in Control Payments
| EXECUTIVE | PAYMENTS UPON TERMINATION | TERMINATION WITHOUT CAUSE OR FOR GOOD REASON ($) | CHANGE IN CONTROL PLUS TERMINATION WITHOUT CAUSE OR FOR GOOD REASON ($) | | Phillip M. Eyler | Severance amount | 3,477,841 (1) | 5,691,932 (2) | | | Equity incentives (vesting accelerated) | 2,325,517 (3) | 5,381,286 (4) | | | Total | 5,803,358 | 11,073,218 | | Matteo Anversa | Severance amount | 1,625,640 (1) | 2,233,394 (2) | | | Equity incentives (vesting accelerated) | 534,020 (3) | 1,413,105 (4) | | | Total | 2,159,660 | 3,646,499 | | Hui (Helen) Xu | Severance amount | 936,561 (1) | 1,404,842 (2) | | | Equity incentives (vesting accelerated) | ― | 816,227 (4) | | | Total | 1,164,537 | 2,468,089 | | Vishnu Sundaram | Severance amount | 1,155,965 (1) | 1,639,948 (2) | | | Equity incentives (vesting accelerated) | ― | 681,570 (4) | | | Total | 1,155,965 | 2,321,518 | | Thomas Stocker(5) | Severance amount | 350,012 (6) | 1,700,057 (2) | | | Equity incentives (vesting accelerated) | ― | 832,707 (4) | | | Total | 350,012 | 2,532,764 |
Pay Ratio
Pay Ratio SEC rules for identifying the median employee and calculating the pay ratio allow companies to apply various methodologies and assumptions. As a result, our reported pay ratio may not be comparable to the pay ratio reported by other companies. For 2023, our last completed year, the annual total compensation of the median employee of the Company (other than our Chief Executive Officer) was $8,263; consequently, for 2023 the ratio of the annual total compensation of Mr. Eyler, our Chief Executive Officer, to the annual total compensation of our median employee was 916 to 1. Our median employee in 2023 was a full-time employee located in Mexico who remained in the same position for all of 2023.
Pay Ratio
| 99 | | 2024 PROXY STATEMENT |
Pay Ratio
The form and amount of our Chief Executive Officer’s annual total compensation is largely influenced by prevailing compensation practices in the United States, as well as the competitive market for senior executive talent in the United States. We believe it is useful to understand the relationship between the annual total compensation of our Chief Executive Officer and the annual total compensation of our median employee solely based on full-time employees in the United States. For 2023, the annual total compensation of such median United States full-time employee (other than our CEO) was $105,434 and the ratio of the 2023 annual total compensation of Mr. Eyler to the total annual total compensation of such United States full-time employee was 72 to 1.