DEF 14A of RBC Bearings INC

Filed Jul 26, 2024 · FY20240001140361-24-034358

Open on EDGAR

Proposal 1: Election of Directors
Proposal 1: Election of Directors The Board currently is composed of eight directors serving staggered three-year terms and divided into Class I, Class II and Class III. This year the Class II directors are up for election and our Nominating and Governance Committee has nominated Richard R. Crowell, Dr. Amir Faghri and Dr. Steven H. Kaplan for election at the annual meeting. Mr. Crowell, Dr. Faghri and Dr. Kaplan are currently Class II directors and first joined the Board in 2002, 2004 (and rejoined in 2022) and 2018, respectively. The Nominating and Governance Committee reviewed the qualifications of the nominees for election to this class and unanimously recommended to the Board that these nominees be submitted for election. We believe that each of our nominees has a reputation for integrity, honesty and adherence to high ethical standards. They each have demonstrated business acumen and an ability to exercise sound judgment, as well as a commitment of service to the Company and the Board.
Proposal 1: Election of Directors
| Richard R. Crowell | Mr. Crowell is a Managing Partner of Vance Street Capital LLC, a private equity investment firm, and serves as a director of Micronics, Inc. and Jet Parts Aviation, private companies in the businesses of filtration products, aerospace parts, precision manufacturing, engineered solutions, and related services. Mr. Crowell earned a Bachelor of Arts degree from the University of California, Santa Cruz and a Master of Business Administration degree from the University of California, Los Angeles’s Anderson School. See “Directors and Executive Officers” below. | | Director since 2002 Age: 69 Committees: Audit | | | Skills and Expertise Mr. Crowell brings broad business, financial and executive leadership experience to the Board developed through his leadership roles in private equity and investment banking. He has extensive experience with a number of precision manufacturing and aerospace companies. In addition, Mr. Crowell’s experience in private investment enables him to bring a valuable investor’s view to the Board and his relationships across the financial community strengthen the Company’s access to capital markets. His board memberships provide deep understanding of trends in the precision manufacturing and aerospace sectors, both of which present ongoing challenges and opportunities for the Company. | |
Proposal 1: Election of Directors
| Dr. Amir Faghri | Dr. Faghri is Distinguished Professor Emeritus and Distinguished Dean Emeritus of Engineering at the University of Connecticut, and Distinguished Adjunct Professor at the University of California, Los Angeles. He received a Bachelor of Science degree with highest honors from Oregon State University and his Master of Science and Doctoral degrees in Mechanical Engineering from the University of California at Berkeley. See “Directors and Executive Officers” below. | | Director from 2004 to 2020 and rejoined in 2022 Age: 73 Committees: Compensation | | | Skills and Expertise Dr. Faghri’s extensive experience as a leader in the engineering profession—as an educator, scientist and administrator—along with his associations with U.S. companies and global academic institutions, provides the Company with valuable state-of-the-art resources in engineering, manufacturing and information technology, as well as unparalleled expertise in workforce development. | |
Proposal 1: Election of Directors
| 10 | | 2024 Proxy Statement |
Proposal 1: Election of Directors
| Dr. Steven H. Kaplan | Dr. Kaplan is President Emeritus of the University of New Haven. He received a Bachelor of Arts degree from the University of California, Los Angeles, and a Master of Arts and a Doctoral degree from Eberhard-Karls Universität in Germany. See “Directors and Executive Officers” below. | | Director since 2018 Age: 71 Committees: Compensation, Nominating and Governance | | | Skills and Expertise Dr. Kaplan’s extensive academic and chief executive experience provides the Company with a wealth of valuable information and a perspective that provides the Board a critical resource for management. His association with U.S. companies and global academia provides the Company with a valuable state of the art executive management resource. | |
Proposal 1: Election of Directors
Directors are elected by a majority of the votes cast at the meeting. If elected at the meeting, each of Mr. Crowell, Dr. Faghri and Dr. Kaplan would serve until the 2027 annual meeting and until a successor is duly elected and qualified, or until their resignation or removal. If any of Mr. Crowell, Dr. Faghri or Dr. Kaplan should for any reason become unavailable to serve as a director prior to the annual meeting, the Board will (i) reduce the size of the Board to eliminate the position for which that person was nominated, (ii) nominate a new candidate in place of such person, in which case the proxy holders will vote for the new candidate, or (iii) leave the place vacant to be filled at a later time.
Proposal 1: Election of Directors
| | The Board recommends a vote FOR the election to the Board of Directors of the nominees identified above. |
Proposal 4: Advisory Vote on Executive Compensation
| • | ensure that no problematic pay practices exist (e.g., re-pricing or backdating of stock options, excessive perquisites, or tax gross-ups), and |
Proposal 4: Advisory Vote on Executive Compensation
| • | Equity-Based Compensation: The long-term equity incentive program for the CEO and COO, which each year awards shares of stock based on the Company’s performance in the prior fiscal year or prior three-fiscal-year period, was revised to (i) eliminate overlapping metrics between the one-year and three-year components, (ii) increase the weighting of the CEO’s three-year component, and (iii) use the Company’s total shareholder return (TSR) as a percentage of our peer group average as an additional metric for the three-year component. |
Proposal 4: Advisory Vote on Executive Compensation
| • | Peer Group: The peer group in place as of the 2023 annual meeting was revised by replacing seven of the 16 companies in the group in order to better align RBC with its peers in light of our increasing revenue and profitability. See “Compensation Discussion and Analysis—Compensation Philosophy and Program—Maintaining a Compensation Peer Group” below. |
Proposal 4: Advisory Vote on Executive Compensation
Dr. Hartnett is the Company’s founder and has served as our CEO since 1992. Dr. Hartnett is widely regarded as a technology visionary and one of the industry’s most successful business executives. Under Dr. Hartnett’s leadership the Company’s annual revenue has grown from approximately $82 million for fiscal 1996 to more than $1.5 billion for fiscal 2024. He is also one of our significant stockholders, owning approximately 1.4% of the outstanding common stock, directly aligning his interests with those of all our stockholders. The Compensation Committee believes Dr. Hartnett is extremely important to our success and that, given his role in our operations, strategy and growth, it is appropriate for Dr. Hartnett to receive competitive compensation that performs both retentive and incentivizing functions. See “Compensation Discussion and Analysis” and “Executive Compensation” below for additional information about our executive officer compensation program. This proposal gives our stockholders the opportunity to express their views on our named executive officers’ compensation. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies and practices described in this proxy statement. Accordingly, we are asking our stockholders to vote FOR the following resolution at the 2024 annual meeting: “RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed in the Company’s proxy statement for the 2024 annual meeting of stockholders pursuant to Item 402 of SEC Regulation S-K (including the Compensation Discussion and Analysis, the compensation tables and narrative discussion contained therein), is hereby APPROVED.” The say-on-pay vote is advisory, and therefore not binding on the Company, the Board or the Compensation Committee. However, the Company, the Board and the Compensation Committee value the opinions of our stockholders and to the extent there is any significant vote against the named executive officers’ compensation as disclosed in this proxy statement, we will consider our stockholders’ concerns and the Compensation Committee will evaluate whether any actions are necessary to address those concerns.
Proposal 4: Advisory Vote on Executive Compensation
| | The Board recommends a vote FOR the approval of the compensation of our named executive officers. |
Director Compensation
Director Compensation Non-employee members of the Board receive $50,000 per year, payable quarterly, and the Chairs of the Compensation and Audit Committees each receive an additional $5,000 per year for serving in that capacity. Upon the approval of the Board based on the recommendation of the Compensation Committee, each non-employee director also receives an annual award of restricted stock, which vests over three years, and an annual award of stock options, which have an exercise price equal to the closing price of our common stock on the award date and vest over five years. Directors are entitled to reimbursement for reasonable out-of-pocket expenses incurred in connection with attendance at Board and committee meetings. During fiscal 2024, the non-employee directors received the following compensation:
Director Compensation
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Option Awards ($)(1) | Total ($) | | Michael H. Ambrose | 50,000 | 247,428 | 94,160 | 391,588 | | Richard R. Crowell | 50,000 | 247,428 | 94,160 | 391,588 | | Dolores J. Ennico | 55,000 | 247,428 | 94,160 | 396,588 | | Dr. Amir Faghri | 50,000 | 247,428 | 94,160 | 391,588 | | Dr. Steven H. Kaplan | 50,000 | 247,428 | 94,160 | 391,588 | | Edward D. Stewart | 55,000 | 247,428 | 94,160 | 396,588 |
Director Compensation
| (1) The amounts represent the fair market value on the date of award of restricted shares and non-qualified stock options awarded during the fiscal year. The fair market value of restricted shares is calculated using the closing stock price on the date of award ($206.19) multiplied by the number of shares awarded (1,200). The fair market value of stock options is calculated using the Black-Scholes model, which determined a fair value of $94.16 per option for the 1,000 options awarded. As these represent values as of the date of award, they do not reflect the actual value that will be received at the time the restricted shares vest or the options are exercised, which value will depend on market conditions at that time. |
Director Compensation
The Compensation Committee reviews non-employee director compensation annually and recommends changes to the Board for approval. In May of 2024 the Compensation Committee recommended to the Board that the next annual equity awards to each independent director have a total value of $325,000 with the restricted stock component representing 60% of the value and the stock options making up the remaining 40% of the value (based on the Black-Scholes model). This was in contrast to the Committee’s past practice of recommending awards of specific numbers of restricted stock shares and stock options. The new practice is consistent with the Compensation Committee’s approach to equity compensation for the CEO and COO and will result in more predictable compensation for independent directors. Based on the Compensation Committee’s recommendation, in May 2024 the Board awarded each independent director 678 shares of restricted stock and 974 stock options, having an aggregate value of $325,000.
Director Compensation
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Director Compensation
| CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS |
Director Compensation
Since the start of fiscal 2024 the Company has not been a party to, nor have we proposed, any transaction or series of similar transactions in which the amount exceeds $120,000 and in which any director, executive officer, holder of more than 5% of our common stock or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest, other than employment agreements and other compensation arrangements that are described in “Executive Compensation” below. The Company’s directors and executive officers are subject to annual related-party certifications and the Code of Ethics requires that an employee or director avoid placing themself in a position in which their personal interests could interfere in any way with the interests of the Company. While the Company has various controls in place to identify potential related-party transactions, we do not have a formal policy regarding the Board’s review and approval of related party transactions. We have not made payments to directors other than as described in “Board of Directors and Corporate Governance—Director Compensation” above. We have not made any loans to any director or officer nor have we purchased any shares of our common stock from any director or officer, other than the repurchase of shares from officers at fair market value to cover (i) the exercise price of stock options and (ii) taxes relating to the vesting of shares of restricted stock and exercise of stock options.
Director Compensation
| PRINCIPAL STOCKHOLDERS |
Director Compensation
The following table sets forth information known to the Company regarding beneficial ownership of the Company’s common stock, as of July 1, 2024, by each director, each of our named executive officers, and by all of our directors and executive officers as a group. Information in the table is derived from SEC filings made by such persons under Section 16(a) of the Exchange Act and other information received by the Company.
Directors and Officers
Directors and Officers
Directors and Officers
| Name of Beneficial Owner | Amount and Nature of Beneficial Ownership(1)(2)(3) | Percent of Class(4) | | Michael J. Hartnett | 419,575 | 1.4% | | Michael H. Ambrose | 8,228 | * | | Daniel A. Bergeron | 219,002 | * | | Richard R. Crowell | 33,135 | * | | Dolores J. Ennico | 7,578 | * | | Dr. Amir Faghri | 3,978 | * | | Dr. Steven H. Kaplan | 4,193 | * | | Edward D. Stewart | 27,461 | * | | John J. Feeney | 5,372 | * | | Richard J. Edwards | 16,739 | * | | Robert M. Sullivan | 32,382 | * | | All directors and executive officers as a group (11 persons) | 777,643 | 2.6% |
Directors and Officers
| (1) Each person in this table has sole voting and dispositive power with respect to their shares or shares such power with their spouse. None of these shares are held in margin accounts or pledged or otherwise available to a lender as security. |
Directors and Officers
| (2) Includes the following restricted shares held as of July 1, 2024: Dr. Hartnett – 48,297; Mr. Ambrose – 1,978; Mr. Bergeron – 17,693; Mr. Crowell – 1,978; Ms. Ennico – 1,978; Dr. Faghri – 1,978; Dr. Kaplan – 1,978; Mr. Stewart – 1,978; Mr. Feeney – 1,880; Mr. Edwards – 3,550; Mr. Sullivan – 5,500; all directors and executive officers as a group – 88,788. |
Directors and Officers
| (3) Includes the following unissued shares that are subject to stock options that are exercisable within 60 days of July 1, 2024: Dr. Hartnett – 126,536; Mr. Ambrose – 1,500; Mr. Bergeron – 107,594; Mr. Crowell – 1,400; Ms. Ennico – 1,200; Dr. Faghri – 600; Dr. Kaplan – 1,600; Mr. Stewart – 4,000; Mr. Feeney – 2,296; Mr. Edwards – 4,200; Mr. Sullivan – 22,200; all directors and executive officers as a group – 273,126. |
Directors and Officers
| (4) Based on 29,221,224 shares of common stock outstanding as of July 1, 2024 plus the unissued option shares of each person referred to in footnote (3). |
Directors and Officers
*Less than 1.0%.
Directors and Officers
| 20 | | 2024 Proxy Statement |
Delinquent Section 16(a) Reports
| Michael H. Ambrose | Mr. Ambrose has been a director since 2019. Mr. Ambrose is currently Principal Partner of MH Ambrose Consulting, specializing in Aerospace and Digital Integration consulting. In this capacity, Mr. Ambrose consults with aerospace OEMs, manufacturing suppliers, and advisory boards for private digital solution providers. Additionally, Mr. Ambrose is recognized as a subject matter expert on digital integration. Since 2021, he has given over fifteen significant presentations on digital transformation, including for the World Affairs Council and a NATO summit in Brussels. Mr. Ambrose also currently serves as Chairman of the University of New Haven Board of Governors. In 2023, Mr. Ambrose completed a 39-year career with Sikorsky Aircraft, a Lockheed Martin Company, where he held executive leadership positions in complex aerospace design, manufacturing operations, and program management. He served as the Vice-President of Enterprise Business Transformation (2021-2023), Chief Engineer and Vice President of Engineering and Technology (2017-2021), Vice President of Aircraft Design and Manufacturing Engineering (2011-2017), Vice President of International Government Programs (2008-2011), and General Manager of Precision Machining Operations (2005-2008). Among his responsibilities and accomplishments at Sikorsky, he led organizations of over 3,500 engineers and separately 800 factory employees, was co-chair of the Sikorsky senior safety board with responsibility for air worthiness, and successfully implemented numerous lean and digital transformation projects. Mr. Ambrose holds a Mechanical Engineering Bachelor of Science degree from the University of New Haven and an Engineering Management Master of Science degree from the Massachusetts Institute of Technology. Mr. Ambrose’s diverse and extensive leadership experience in engineering, manufacturing, program management, international business, and digital integration provides the Board with unique and valuable resources pertaining to RBC’s business and understanding of RBC’s customers and industry trends. | | Director Joined RBC in 2019 Age: 62 | |
Delinquent Section 16(a) Reports
| Richard R. Crowell | Mr. Crowell has been a director since 2002. Mr. Crowell is a Managing Partner of Vance Street Capital LLC, a private equity investment firm he founded in 2007. Previously he was the President of Aurora Capital Group, a private equity investment firm he co-founded in 1991. Prior to establishing Aurora, Mr. Crowell was a Partner and President of Acadia Partners, a New York-based investment fund. From 1983 to 1987, he was a Managing Director, Corporate Finance for Drexel Burnham Lambert. He serves on the Board of Visitors of the University of California, Los Angeles Anderson School of Management. Mr. Crowell is a director of Micronics, Inc. and Jet Parts Aviation, all of which are private companies in the businesses of filtration products, aerospace parts, precision manufacturing, engineered solutions, and related services. Mr. Crowell earned a Bachelor of Arts degree from the University of California, Santa Cruz and a Master of Business Administration degree from UCLA’s Anderson School. His extensive financial experience qualifies him as an “audit committee financial expert.” Mr. Crowell brings broad business, financial and executive leadership experience to the Board developed through his leadership roles at Vance Street Capital LLC, Aurora Capital Group LLC, Acadia Partners and Drexel Burnham Lambert. He has extensive experience with a number of precision manufacturing and aerospace companies. In addition, Mr. Crowell’s experience in private investment enables him to bring a valuable investor’s view to the Board and his relationships across the financial community strengthen the Company’s access to capital markets. His board memberships provide deep understanding of trends in the precision manufacturing and aerospace sectors, both of which present ongoing challenges and opportunities for the Company. | | Director Joined RBC in 2002 Age: 69 | |
Delinquent Section 16(a) Reports
| Dolores J. Ennico | Ms. Ennico has been a director since 2020. She is currently the Principal of Canterbury Consulting, which provides strategic consulting services in various business initiatives. She was Chief Human Resources Officer of Olin Corporation from 2009 to 2018 and prior to that served Olin in a variety of capacities from 1974 including Vice President, Administration from 2004 to 2009, Director, Corporate Employee Relations from 2000 to 2004, and Director of Retail Marketing, Pool Chemicals from 1997 to 2000. Ms. Ennico is a member of the Board of Governors of the University of New Haven and a member of its Compensation Committee, is a member of the Advisory Council of Sacred Heart Academy in Hamden, Connecticut, and is a member of the Executive Committee of the Board of the Girl Scouts of Connecticut. She earned a Bachelor of Science degree in Microbiology and a Master of Science degree in Biochemistry from Southern Connecticut State University, and a Master of Business Administration degree from the University of New Haven. Ms. Ennico’s vast experience in human capital management, including executive compensation, and her C-suite experience with a Fortune 500 company are valuable resources for the Board. | | Director Joined RBC in 2020 Age: 71 | |
Delinquent Section 16(a) Reports
| Dr. Steven H. Kaplan | Dr. Kaplan has been a director since 2018. He became President of the University of New Haven in 2004, leading the University through a period of remarkable growth and development, before becoming President Emeritus in 2023. In 2015, in recognition of his contributions to transforming the University, Dr. Kaplan was presented the Chief Executive Leadership Award by the Council for Advancement and Support of Education (CASE) District I. He also was named “Businessman of the Year” by Business New Haven magazine in 2008. Dr. Kaplan was awarded the 2011 William M. Burke Presidential Award for Experiential Education by the National Society for Experiential Education. Previously, Dr. Kaplan was chancellor and professor of English at the University of Virginia’s College at Wise. Dr. Kaplan began his teaching career in 1982 as an Instructor of English at the University of Maryland, European Division. From 1985 to 1989, he served as Visiting Lecturer in American Studies at Eberhard-Karls Universität, Tübingen, Germany, one of the oldest and most highly regarded universities in Europe. After completing his doctoral studies at Eberhard-Karls Universität, he returned to the U.S. to teach English at the University of Southern Colorado. Dr. Kaplan also served as Dean of Arts and Humanities at the State University of New York at Buffalo and as Dean of the College of Liberal Arts and Sciences at Butler University. In addition to earning his Ph.D. in Comparative Literature at Eberhard-Karls Universität, Dr. Kaplan holds a Master of Arts degree (with a concentration in philosophy, German and English) from Eberhard-Karls Universität and a Bachelor of Arts degree from the University of California, Los Angeles. This knowledge and chief executive experience allows Dr. Kaplan to provide the Company with a wealth of valuable international executive experience and a perspective that provides the Board a critical resource for management. His association with U.S. companies and global academia provides the Company with a valuable state of the art executive management resource. | | Director Joined RBC in 2018 Age: 71 | |
Delinquent Section 16(a) Reports
| Edward D. Stewart | Mr. Stewart has been a director since 2013. Mr. Stewart is the former Chairman of the Board of ATC Technology Corporation, a then-publicly-held third-party logistics services provider, and has served on other company boards and audit committees. Mr. Stewart has many years of financial and operational experience with General Electric Company including as Executive Vice President of GE Capital and Chief Financial Officer of a number of other GE businesses. Mr. Stewart formerly served as a member of the Board of Directors of Nordstrom fsb, a formerly wholly-owned subsidiary of Nordstrom, Inc., and a member of its Audit and Investment Committees. Mr. Stewart earned a Bachelor of Arts degree in Economics from Tufts University. His extensive financial experience qualifies him as an “audit committee financial expert.” In addition, his service as a director of other publicly-traded and private companies is a valuable resource to the Board. | | Director Joined RBC in 2013 Age: 81 | |
Pay-for-Performance Philosophy
| What We Do | What We Don’t Do | | • Annual say-on-pay vote • Performance-driven compensation philosophy • Balance compensation with both short- and long-term incentives using multiple performance measures • Set challenging quantitative performance measures • Rigorous stock ownership guidelines for executive officers • Retain independent compensation consultants as needed • Use an appropriate peer group selected based on a range of factors • Maintain a clawback policy on all incentive compensation • Use double-trigger provisions in the event of a change in control • Engage regularly with stockholders on executive compensation • Limited perquisites | • No executive officer employment agreements, other than for the CEO and COO • No guaranteed bonuses or salary increases • No re-pricing or backdating of options • No share recycling under long-term incentive plans • No excessive severance and/or change-in-control provisions • No tax “gross-ups” |
Performance Metrics and the Use of Adjusted EBITDA
Performance Metrics and the Use of Adjusted EBITDA Adjusted EBITDA (i.e., our consolidated net income (i) plus interest, taxes, depreciation, amortization and equity-based incentive compensation expense, (ii) plus other non-operating expenses or minus other non-operating income, and (iii) as adjusted for various unusual or non-recurring items) is the core measure used to assess Company operating performance under the variable pay program applicable to our executive officers. The Company and Compensation Committee believe that adjusted EBITDA is the most appropriate measure of operating performance for a number of reasons, and that, of the various performance metrics we could use under our variable pay program, adjusted EBITDA most closely aligns with our stockholders’ interests. Thus, the Compensation Committee uses adjusted EBITDA performance to determine the majority of
Performance Metrics and the Use of Adjusted EBITDA
| 26 | | 2024 Proxy Statement |
Performance Metrics and the Use of Adjusted EBITDA
the variable compensation of the CEO and COO. Their annual cash performance bonuses are based solely on adjusted EBITDA performance; achievement of the adjusted EBITDA plan goal results in annual bonuses equal to 150% and 90% of base salary, respectively, while no bonuses are earned for achieving less than 80% of the plan goal. Adjusted EBITDA is also the primary metrics used to determine the size of the CEO and COO’s awards under the long-term equity incentive program, requiring minimum performance of 75% of the plan goal to earn one-year stock awards. We continue to believe quite strongly that adjusted EBITDA is the most appropriate metric and that its use as the primary performance metric is a significant driver for our outstanding results and stock performance.
Performance Metrics and the Use of Adjusted EBITDA
| • | Our motivation in selecting performance metrics is to choose the metric that most accurately captures our performance as a company and the value that we are generating for our stockholders. We strongly believe that adjusted EBITDA is that metric. |
Performance Metrics and the Use of Adjusted EBITDA
| • | Adjusted EBITDA is the foundation on which all of our business units run. Over the years we have developed a strong focus and discipline around cash management and capital allocation from the top of the organization to the bottom. We continue to apply this focus in operating the Company today. |
Performance Metrics and the Use of Adjusted EBITDA
| • | Adjusted EBITDA allows management, investors and others to evaluate and compare the Company’s core operating results, including return on capital and operating efficiencies, from period to period by removing the impact of the Company’s capital structure (interest expense from our outstanding debt), asset base (depreciation and amortization), tax consequences, other non-operating items, and share-based compensation. |
Performance Metrics and the Use of Adjusted EBITDA
| • | Adjusted EBITDA is the measure that guides the Company, through managing cash flow, operating cost and efficiency, and capital allocation, during periods of economic downturn and inhibits the manipulation of operating performance through excessive leverage or capital expenditures, the impact of which are more problematic during periods of economic downturn. |
Performance Metrics and the Use of Adjusted EBITDA
| • | Adjusted EBITDA is a key driver for debt covenants. |
Performance Metrics and the Use of Adjusted EBITDA
| • | We use adjusted EBITDA for business planning purposes, to run the business, for capital allocation decisions, and to evaluate and price potential acquisitions. |
Performance Metrics and the Use of Adjusted EBITDA
| • | In addition to its use by management, we also believe adjusted EBITDA is a measure widely used by securities analysts, investors, and others to evaluate the financial performance of the Company and other companies in our industry. |
Performance Metrics and the Use of Adjusted EBITDA
| • | We view adjusted EBITDA as the most reliable bellwether of how well we are converting the Company’s revenue into value for our stockholders. |
Performance Metrics and the Use of Adjusted EBITDA
We have relied on adjusted EBITDA as our primary performance metric since our IPO in 2005, when our stock entered the market at $14.50 per share. On July 9, 2024, our stock closed at $278.12 per share. In addition to adjusted EBITDA, since 2018 we have used ROIC (i.e., return on invested capital) as a metric for determining a portion of the size of the CEO and COO’s awards under the equity incentive program. ROIC is defined as adjusted operating income (AOI) divided by equity plus debt less cash, with equity, debt and cash adjusted to eliminate the effects of acquisitions and divestitures. AOI is defined as operating income adjusted to eliminate the effects of acquisitions, divestitures and unusual or non-recurring items. The use of ROIC as a performance metric came out of investor feedback that we received in 2017 as well as our belief that ROIC captures not just profitability but whether the magnitude of profitability is appropriate for the investments made. ROIC can also be compared across companies and industries and provides a closer link to key drivers of value creation. We also believe that ROIC works in close synergy with our primary metric of adjusted EBITDA.
Performance Metrics and the Use of Adjusted EBITDA
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Performance Metrics and the Use of Adjusted EBITDA
Following investor outreach in early 2024, the Compensation Committee decided to also use Total Shareholder Return (TSR) as an additional metric for determining a portion of the size of the CEO and COO’s awards under the equity incentive program, starting with awards to be made in fiscal 2028 for the Company’s TSR performance against its peer group average TSR during the trailing five-year period. See “Stockholder Engagement and 2023 Say-on-Pay Results” below.
Compensation Governance Policies
Our stock-ownership program requires the accumulation of stock over a five-year period following the date the person becomes subject to stock-ownership requirements. Executive officers who experience a change in base salary have three years from the date of such change to achieve the new level of ownership. Ownership credit is given for restricted stock but not for stock options. The Compensation Committee reviews compliance with these guidelines on an annual basis. The full text of the Company’s Stock Ownership Guidelines is filed as Exhibit 10.1 to our Current Report on Form 8-K dated June 17, 2013. Deductibility of Executive Compensation. Section 162(m) of the Internal Revenue Code generally disallows a tax deduction to a public corporation for compensation over $1,000,000 paid in any fiscal year to its named executive officers. The deductibility of compensation is one of many factors that the Compensation Committee takes into consideration when designing the Company’s executive compensation program, but the Committee does not have a policy to limit executive compensation to that deductible under Section 162(m).
Executive Compensation Process and Components
| Outside Compensation Advisor | • Provides peer group compensation data. • Provides information regarding compensation best practices. • Assists with compensation program design. | | As selected and retained by the Compensation Committee from time to time. | |
Base Salary
| • | The terms of the officer’s employment agreement in the case of the CEO and COO; |
Base Salary
| • | Peer group data; |
Base Salary
| • | Competitive positioning against market; |
Annual Performance Bonuses
Annual Performance Bonuses Cash performance bonuses are paid to the executive officers each year depending on Company performance and, in the case of executive officers other than the CEO and COO, individual performance. The bonuses for the CEO and COO are prescribed in their employment agreements, which were first put in place several years ago. The CEO or COO’s bonus for a particular year equals their base salary multiple that corresponds to the Company’s performance level against its adjusted EBITDA plan goal for the year. The Compensation Committee believes that these bonuses incentivize the CEO and COO to deliver the best possible short-term performance while still maintaining a focus on long-term performance through the other elements of their compensation program. For details regarding how the performance bonuses payable to the executive officers are determined each year, see “Executive Compensation—Compensation Program Components and Pay Outcomes for Fiscal 2024—Annual Performance Bonuses” below.
Long-Term Equity Incentive Awards
Long-Term Equity Incentive Awards Executive officers typically receive an annual award of restricted stock and/or stock options based on criteria that are described under “Executive Compensation—Compensation Program Components and Pay Outcomes for Fiscal 2024—Long-Term Equity Incentive Awards” below. Historically, the CEO and COO received restricted stock and stock options based on formulas tied to the Company’s performance against its adjusted EBITDA and ROIC plans for the prior year. In 2022 the Compensation Committee made changes to the equity awards to the CEO and COO to provide better incentives for them to deliver long-term performance by tying a portion of the awards to three-year performance cycles, as well as ceasing the use of stock options. The Committee also decided that, in order to have greater predictability of the amount of compensation delivered to the CEO and COO through equity awards, the size of the awards would be tied to a base salary multiple rather than to a number of shares as had been the Company’s practice in the past.
Long-Term Equity Incentive Awards
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Long-Term Equity Incentive Awards
Following investor outreach conducted in early 2024, the Compensation Committee adjusted the CEO/COO equity incentive award program by (i) eliminating the overlapping metrics of the short-term and long-term components by removing ROIC as a short-term metric and adjusted EBITDA as a long-term metric, (ii) adding TSR as a long-term metric, and (iii) adjusting the weighting of the CEO’s short-term and long-term components from 70/30 to 60/40 at the target performance level. The Compensation Committee believes that the changes to the CEO and COO’s equity incentive award program that were implemented in 2022 and 2024 more closely aligned our compensation program with best practices and stockholder expectations.
Compensation Peer Group
Compensation Peer Group The Compensation Committee compares the Company’s senior management compensation levels with those of companies in a group of peer companies selected by the Compensation Committee based on a number of criteria including industry focus, and company scope measured through market capitalization, headcount and financial performance. The Compensation Committee believes that this customized approach is preferable to an algorithmic GICS code approach to selecting a peer group, which lacks the precision and ability to take into account unique circumstances that we believe are crucial to devising a fairly representative peer group. In 2024, the Compensation Committee modified our compensation peer group by replacing seven of the companies as shown below.
Compensation Peer Group
| New Peer Group | | | | Added | Retained | Removed | | Carlisle Companies Dana Enerpac Tool Group Flowserve Gates Industrial Terex Textron | Barnes Group Curtiss-Wright Graco HEICO Hexcel ITT Regal Rexnord Timken Woodword | BWX Technologies Donaldson Franklin Electric Kratos Defense & Security Mercury Systems Moog Watts Water Technologies | | | Old Peer Group | |
Compensation Peer Group
These changes were made in order to better align RBC with its peers in light of our increasing revenue and profitability. Our peer group includes companies in the industrial machinery, aerospace & defense, and electrical components and equipment industries.
Compensation Peer Group
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Compensation Peer Group
| Stockholder Engagement and 2023 Say-on-Pay Results |
Compensation Peer Group
The Board values its relationship with our stockholders and the feedback they provide the Company so we periodically engage with them to discuss matters affecting the Company, including executive compensation. Stockholder feedback helps inform the decisions of the Board and the Compensation Committee. At our annual meeting in September 2023, the Chair of our Compensation Committee was reelected but the say-on-pay proposal received only 53% approval (although that was up from 32% the prior year). We then conducted our most recent stockholder outreach, which took place in early 2024. We extended invitations to stockholders collectively representing over 65% of our outstanding stock and met with stockholders representing over 52% of our outstanding stock to discuss the 2023 say-on-pay vote, our executive compensation program, and our corporate governance practices. The Chair of our Compensation Committee, Dolores J. Ennico, together with our CFO and General Counsel, conducted the outreach. Stockholders providing feedback were broadly supportive of the enhancements to the CEO/COO equity compensation program implemented in 2022 and 2023 following our prior round of stockholder outreach, in particular:
Compensation Peer Group
| • | the adoption of a new 3-year performance-based award, as well as the discontinuation of the use of stock options; and |
Compensation Peer Group
| • | the decision to base equity award values on a multiple of base salary rather than a fixed number of shares in order to enhance predictability and transparency. |
Compensation Peer Group
While they also expressed strong support for the continued use of adjusted EBITDA and ROIC as performance metrics, they expressed a preference that the two metrics not be used for both the one-year and three-year components of the equity incentive program for the CEO and COO (i.e., we should avoid overlapping metrics ). Stockholders generally had a favorable view of the use of a TSR metric (particularly TSR relative to our peer group) in place of adjusted EBITDA for the three-year component, and some of them suggested that the three-year component be more heavily weighted than in the past (as originally designed, the program was weighted 70% to the one-year component and 30% to the three-year component). Based on this stockholder feedback, the Compensation Committee implemented the changes summarized below and described in more detail under “Executive Compensation—Compensation Program Components and Pay-Outcomes for Fiscal 2024—Long-Term Equity Incentive Awards—Equity Incentive Program for CEO and COO” below.
Compensation Peer Group
| Stockholder Feedback Regarding Equity Comp Program | RBC Response | | • Overlapping metrics should be avoided. • Three-year component should be more heavily weighted. • Third metric should be added to the program. | • ROIC has been removed as a one-year metric and adjusted EBITDA has been removed as a three-year metric. • The one-year and three-year components of the CEO’s program are now weighted 60/40 at target performance level. • TSR relative to our peer group has been added as a second metric for the three-year component. |
Compensation Peer Group
| Compensation Committee Report on Executive Compensation |
Compensation Peer Group
The Compensation Committee of the Board has reviewed and discussed with management the Compensation Discussion and Analysis. Based on that review and discussion, the members of the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement. Respectfully submitted, The Compensation Committee of the Board of RBC Bearings Incorporated Dolores J. Ennico (Chair) Dr. Amir Faghri Dr. Steven H. Kaplan
Compensation Peer Group
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Compensation Peer Group
| Executive Compensation |
Compensation Peer Group
| Compensation Program Components and Pay Outcomes for Fiscal 2024 |
Compensation Peer Group
Our named executive officers (NEOs) for fiscal 2024 were:
Compensation Peer Group
| Name | Position | | Dr. Michael J. Hartnett | Chairman, President and Chief Executive Officer(1) | | Daniel A. Bergeron | Director, Vice President and Chief Operating Officer(2) | | Patrick S. Bannon | Vice President and General Manager, retired(3) | | Richard J. Edwards | Vice President and General Manager(2) | | John J. Feeney | Vice President, General Counsel and Secretary(2) | | Robert M. Sullivan | Vice President and Chief Financial Officer(4) |
Compensation Peer Group
| (1) Our principal executive officer. |
Compensation Peer Group
| (2) One of our three most highly compensated executive officers for fiscal 2024 other than our principal executive and financial officers. |
Compensation Peer Group
| (3) Mr. Bannon retired as an officer of the Company at the end of the third quarter of fiscal 2024. He continued to serve the Company in a consulting role until the end of the first quarter of fiscal 2025. His compensation information is provided in this proxy statement pursuant to Item 402(a)(3)(iv) of Regulation S-K. |
Compensation Peer Group
| (4) Our principal financial officer. |
Compensation Peer Group
The NEOs’ primary compensation elements are base salary, annual cash performance bonuses, and long-term equity incentive awards in the form of restricted stock, unrestricted stock and/or stock options. In addition, the NEOs participate in our various employee benefit plans and receive certain perquisites. Details of the NEOs’ compensation and outcomes for fiscal 2024 are described below.
Annual Performance Bonuses
Annual Performance Bonuses Under the Company’s annual incentive compensation plan, the Company pays performance-based annual cash bonuses based on performance for the fiscal year then completed.
CEO and COO
| | CEO and COO Annual Bonus | | | Percentage of Adjusted EBITDA to Plan | CEO Bonus as a Multiple of Base Salary | COO Bonus as a Multiple of Base Salary | | Less than 80.0% | 0.0x | 0.0x | | 80.0% to 89.9% | 0.75x | 0.45x | | 90.0% to 99.9% | 1.0x | 0.6x | | 100.0% to 109.9% | 1.5x | 0.9x | | 110.0% to 119.9% | 2.0x | 1.2x | | 120.0% or higher | 2.5x | 1.5x |
Fiscal 2024 Performance Bonus Payouts
Fiscal 2024 Performance Bonus Payouts The adjusted EBITDA goal for fiscal 2024 performance bonuses for the CEO and COO was set at $460.4 million in accordance with the Company’s operating plan for the year, and actual adjusted EBITDA for the year was $482.1 million, which equated to 104.7% of the plan goal. Based on this performance, the Compensation Committee approved the following annual incentive plan payments and discretionary bonuses for fiscal 2024:
Fiscal 2024 Performance Bonus Payouts
| | Performance Bonus | Discretionary Bonus | Total Bonus | Bonus as a Percentage of Base Salary | | Dr. Michael J. Hartnett | $1,496,250 | NA | $1,496,250 | 150.0% | | Daniel A. Bergeron | 576,450 | NA | 576,450 | 90.0% | | Patrick S. Bannon(1) | - | - | - | - | | Richard J. Edwards | 296,629(2) | - | 296,629 | 88.3% | | John J. Feeney | NA | $65,000 | 65,000 | 23.0% | | Robert M. Sullivan | NA | 150,000 | 150,000 | 61.5% |
Fiscal 2024 Performance Bonus Payouts
| (1) Because Mr. Bannon retired prior to the completion of fiscal 2024, he did not receive a performance bonus for the year. |
Fiscal 2024 Performance Bonus Payouts
| (2) Based on achievement of the following performance to target goal under his performance bonus plan: 113.1% of part 1; 100.0% of part 2; 100.0% of part 3. |
Long-Term Equity Incentive Awards
Long-Term Equity Incentive Awards The Company makes equity awards under its long-term incentive plans, which plans have been approved by the Company’s stockholders. These plans provide for awards of stock, restricted stock, stock options and other types of equity awards for directors, executive officers and other key employees of the Company. See “Equity Incentive Plans” below. Using equity for long-term incentives provides for strong-stockholder alignment and strong long-term Company performance. In determining the size of the 2024 long-term incentive awards, the Committee considers market practice, stockholder interest, retention, the portion of pay at risk, and the Company’s long-term business strategy, rewarding executives for their contribution to revenue and efficient use of capital.
Equity Incentive Program for CEO and COO
Equity Incentive Program for CEO and COO The equity incentive program for the CEO and COO is composed of one-year and three-year performance-based stock awards. The value of each award is equal to the pre-established base salary multiple that corresponds with our level of performance against pre-established financial metrics. The one-year awards for fiscal 2024 and prior years were based on performance against adjusted EBITDA and ROIC targets, but awards for fiscal 2025 and subsequent years will be based exclusively on performance against adjusted EBITDA targets. The three-year awards for the two three-year periods ending with fiscal 2025 and 2026 will be based on performance against previously established adjusted EBITDA and ROIC targets, but awards for the three-year periods ending with fiscal 2027 and subsequent years will be based on performance against ROIC targets and the average TSR of the Company’s peer group. One-year awards have been in the form of shares of restricted stock subject to three-year vesting, but future one-year awards for the CEO will be shares of unrestricted (i.e., fully vested) stock, and all three-year awards will be in the form of shares of unrestricted stock.
Equity Incentive Program for CEO and COO
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Equity Incentive Program for CEO and COO
One-Year Performance-Based Stock Component. For fiscal 2024 the Compensation Committee established adjusted EBITDA and ROIC targets of $460.4 million and 8.51%, respectively. Based on our actual results of $482.1 million of adjusted EBITDA (104.7% of plan) and ROIC of 8.96% (0.45% above plan), in May 2024 Dr. Hartnett was awarded 17,167 shares of restricted stock having an aggregate award date value of $5,027,356 (5.0 times base salary), and Mr. Bergeron was awarded 6,736 shares of restricted stock having an aggregate award date value of $1,972,638 (3.1 times base salary). For future fiscal years the one-year component of the program will provide the CEO and the COO with an award of stock based on the Company’s adjusted EBITDA performance against the plan for the year. The number of shares awarded will equal (i) the officer’s base salary at the end of the fiscal year multiplied by the base salary multiple that corresponds to the Company’s level of performance to the plan, divided by (ii) RBC’s closing stock price on the award date. The CEO will be awarded shares of unrestricted stock while the COO will be awarded shares of restricted stock, which will vest and cease to be restricted in one-third increments on each of the first, second and third anniversaries of the award date. The criteria for determining future one-year awards to the CEO and COO are as follows:
Equity Incentive Program for CEO and COO
| | CEO and COO One-Year Adjusted EBITDA-Based Awards | | | Percentage of Adjusted EBITDA to Plan | CEO Award Value as a Multiple of Base Salary | COO Award Value as a Multiple of Base Salary | | Less than 75.0% | 0.0x | 0.0x | | 75.0% to 84.9% | 2.8x | 1.45x | | 85.0% to 94.9% | 3.5x | 1.9x | | 95.0% to 104.9% (target) | 4.5x | 2.6x | | 105.0% to 114.9% | 5.25x | 3.05x | | Over 114.9% | 6.65x | 4.85x |
Equity Incentive Program for CEO and COO
Three-Year Performance-Based Stock Component. The Compensation Committee has established adjusted EBITDA and ROIC targets for each of the three-year periods ending with fiscal 2025 and 2026 and upon completion of each of those periods the CEO and the COO will receive two awards of stock based on the Company’s performance against those targets. The number of shares awarded will equal (i) the officer’s base salary at the end of the three-year period multiplied by the base salary multiple that corresponds to the Company’s level of performance to plan, divided by (ii) RBC’s closing stock price on the award date. The shares will be unrestricted. The criteria for determining the awards to the CEO and COO are as follows:
Equity Incentive Program for CEO and COO
| | CEO and COO Three-Year Adjusted EBITDA-Based Awards(1) | | | Percentage of adjusted EBITDA to Plan | CEO Award Value as a Multiple of Base Salary | COO Award Value as a Multiple of Base Salary | | Less than 75.0% | 0.0x | 0.0x | | 75.0% to 84.9% | 0.6x | 0.3x | | 85.0% to 94.9% | 0.9x | 0.6x | | 95.0% to 104.9% (target) | 1.2x | 0.8x | | 105.0% to 114.9% | 1.65x | 1.0x | | Over 114.9% | 2.25x | 1.25x |
Equity Incentive Program for CEO and COO
| (1) For three-year periods ending with fiscal 2025 and fiscal 2026. |
Equity Incentive Program for CEO and COO
| | CEO and COO Three-Year ROIC-Based Awards(1) | | | | | ROIC as % of Plan(2) | CEO Award Value as a Multiple of Base Salary(2) | COO Award Value as a Multiple of Base Salary(2) | | Threshold | -0.75% | 0.3x | 0.2x | | Target | 0.00% | 0.6x | 0.3x | | Maximum | +0.75% | 1.2x | 0.7x |
Equity Incentive Program for CEO and COO
| (1) For three-year periods ending with fiscal 2025 and fiscal 2026. |
Equity Incentive Program for CEO and COO
| (2) In between is straight line. |
Equity Incentive Program for CEO and COO
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Equity Incentive Program for CEO and COO
For three-year periods ending with fiscal 2027 and thereafter, instead of the awards described above based on adjusted EBITDA and ROIC performance, the CEO and the COO will receive two awards of stock based on (i) the Company’s five-year trailing TSR against the average TSR of the Company’s peer group as it exists at the start of the three-year period, and (ii) the Company’s performance against an ROIC target for the three-year period as follows:
Equity Incentive Program for CEO and COO
| | CEO and COO TSR-Based Awards(1) | | | Trailing Five-Year TSR as a Percentage of Peer Group Average | CEO Award Value as a Multiple of Base Salary | COO Award Value as a Multiple of Base Salary | | Less than 75.0% | 0.0x | 0.0x | | 75.0% to 84.9% | 0.5x | 0.25x | | 85.0% to 94.9% | 0.75x | 0.5x | | 95.0% to 104.9% | 1.0x | 0.65x | | 105.0% to 114.9% | 1.25x | 0.75x | | Over 114.9% | 1.5x | 0.85x |
Equity Incentive Program for CEO and COO
| (1) For three-year periods ending with fiscal 2027 and thereafter. |
Equity Incentive Program for CEO and COO
| | CEO and COO Three-Year ROIC-Based Awards(1) | | | | | ROIC as % of Plan(2) | CEO Award Value as a Multiple of Base Salary(2) | COO Award Value as a Multiple of Base Salary(2) | | Threshold | -0.75% | 1.0x | 0.4x | | Target | 0.00% | 2.0x | 0.6x | | Maximum | +0.75% | 4.0x | 1.75x |
Equity Incentive Program for CEO and COO
| (1) For three-year periods ending with fiscal 2027 and thereafter. |
Equity Incentive Program for CEO and COO
| (2) In between is straight line. |
Equity Incentive Program for CEO and COO
Because the first plan for the three-year component of the long-term incentive program was established for fiscal years 2023, 2024 and 2025, the Company has yet to make any awards under the three-year component. Purpose Behind Program Modifications. The modifications to the equity incentive program described above were made by the Compensation Committee in 2024 in response to investor feedback regarding the use of overlapping metrics in the one-year and three-year components of the program and the relative weighting of the two components. The overlapping metrics comment has been addressed by eliminating ROIC as a one-year metric, and replacing adjusted EBITDA with TSR as a three-year metric. The relative weighting comment has been addressed by adjusting the CEO’s target salary multiples so that the target value of his one-year award moves from 70% to 60% of the total value of the equity incentive program and his three-year award moves from 30% to 40% of the total value once the modified program is fully implemented in fiscal 2028. Performance Targets for Future Awards. Future awards to be made to the CEO and COO under the one-year and three-year components of the performance-based equity program will be based on performance against the Company’s adjusted EBITDA and ROIC plans established by the Compensation Committee at the beginning of the relevant performance periods. The Committee has decided that we will not disclose those targets in advance because adjusted EBITDA is the key metric for our performance and disclosure of our targets would provide our competitors insight into our business strategy and could cause us substantial harm.
Long-Term Equity Incentive Awards for Fiscal 2024
Long-Term Equity Incentive Awards for Fiscal 2024 The Compensation Committee approved the following awards under the long-term equity incentive plans in fiscal 2025 for performance in fiscal 2024:
Long-Term Equity Incentive Awards for Fiscal 2024
| | Restricted Stock Fair Value(1) | Stock Options Fair Value(1) | | Dr. Michael J. Hartnett | $5,027,356 | NA | | Daniel A. Bergeron | 1,972,638 | NA | | Patrick S. Bannon | - | - | | Richard J. Edwards | 219,638 | 271,039 | | John J. Feeney | 146,425 | 135,520 | | Robert M. Sullivan | 292,850 | 271,039 |
Long-Term Equity Incentive Awards for Fiscal 2024
| (1) The amounts represent the fair market value of the award on the award date. The fair market value of restricted shares is calculated using the closing stock price on the award date ($292.85) multiplied by the number of shares. The fair market value of stock options is calculated using the Black-Scholes model, which determined a fair value of $135.52 per option. As these represent values as of the award date, they do not reflect the actual value that will be received at the time the restricted shares vest or the options are exercised, which value will depend on market conditions at that time. |
Long-Term Equity Incentive Awards for Fiscal 2024
Important Note About Equity-Based Compensation Data The information regarding long-term equity incentive awards presented in the CEO Compensation Mix chart above and the Summary Compensation and Pay Versus Performance tables below relates to awards made in fiscal 2024 based on fiscal 2023 performance, while the information provided above regarding the awards made in fiscal 2025 based on fiscal 2024 performance will be presented in the CEO Compensation Mix chart and Summary Compensation and Pay Versus Performance tables appearing in next year’s proxy statement.
Long-Term Equity Incentive Awards for Fiscal 2024
| Benefits and Perquisites |
Long-Term Equity Incentive Awards for Fiscal 2024
In addition to the core elements of executive compensation outlined above (i.e., base salary, performance-based annual cash bonus, and equity awards under the long-term equity incentive plans), NEOs are eligible for certain additional benefits, perquisites and plans, as described below.
Perquisite Programs
| Employment Agreements and Change-in-Control and Severance Arrangements |
Employment Agreements With CEO and COO
Employment Agreements With CEO and COO In June 2024, the Company and Dr. Hartnett entered into a new employment agreement that amended and restated his prior employment agreement entered into in 2022. The new agreement has an initial term expiring on March 31, 2026 and automatically renews thereafter for successive 12-month periods unless either party gives 90 days’ notice of nonrenewal. The agreement provides, among other things, for (i) a base salary of $1,500,000 per year, (ii) an annual cash performance bonus as described under “Compensation Program Components and Pay Outcome for Fiscal 2024—Annual Performance Bonus—CEO and COO” above, (iii) annual equity incentive awards as described under “Compensation Program Components and Pay Outcome for Fiscal 2024—Long-Term Equity Awards—Equity Incentive Program for CEO and COO” above, and (iv) certain severance benefits as described under “Severance Other Than Following a Change in Control” below. Dr. Hartnett’s base salary is to be reviewed annually and can be increased, but not decreased, as the Compensation Committee determines. The agreement also contains a change-in-control provision and sets forth certain perquisites he is to receive. A copy of Dr. Hartnett’s employment agreement is filed as Exhibit 10.1 to our Current Report on Form 8-K dated June 28, 2024. In June 2024, the Company and Mr. Bergeron entered into a new employment agreement that amended and restated his prior employment agreement entered into in 2022. The new agreement has an initial term expiring on March 31, 2026 and automatically renews thereafter for successive 12-month periods unless either party gives 90 days’ notice of nonrenewal. The agreement provides, among other things, for (i) a base salary of $672,525 per year (ii) an annual cash performance bonus as described under “Compensation Program Components and Pay Outcome for Fiscal 2024—Annual Performance Bonus—CEO and COO” above, (iii) annual equity incentive awards as described under “Compensation Program Components and Pay Outcome for Fiscal 2024—Long-Term Equity Awards—Equity Incentive Program for CEO and COO” above, and (iv) certain severance benefits as described under “Severance Other Than Following a Change in Control” below. Mr. Bergeron’s base salary is to be reviewed annually and can be increased, but not decreased, as the Compensation Committee determines. The agreement also contains a change-in-control provision and sets forth certain perquisites he is to receive.. A copy of Mr. Bergeron’s employment agreement is filed as Exhibit 10.2 to our Current Report on Form 8-K dated June 28, 2024. The other executive officers do not have employment agreements and are employed “at will.”
Change-in-Control Arrangements
Change-in-Control Arrangements Change-in-control compensation arrangements generally protect income for key executives who would likely be involved in decisions regarding and/or successful implementation of merger/acquisition activity and who are at risk for job loss if a takeover of the Company were to occur. We believe it is in the best interests of the Company and our stockholders to have such an agreement with our CEO, COO and certain other executive officers in order (i) for the Board to be able to receive and rely upon the executive’s advice and counsel as to the best interests of the Company and our stockholders without concern that they might be distracted or influenced by the personal uncertainties and risks created by merger/acquisition proposals or threats, and (ii) to encourage them to remain with the Company and to continue to devote full attention to the Company’s business. Each of Dr. Hartnett’s and Mr. Bergeron’s employment agreements provides that in the event of his employment is terminated within 24 months after a change in control of the Company (i.e., a double trigger event), he will be entitled to (i) severance equal to (x) 250% of his annual base salary plus (y) 250% of his annual performance bonus at the target base salary multiple, (ii) a bonus equal to his annual performance bonus at the maximum base salary multiple prorated for the portion of the fiscal year prior to the termination date, and (iii) continued participation in the Company’s welfare benefit programs (at the Company’s expense) for a period of time after his termination. The Company has entered into a change-in-control letter agreements with Mr. Edwards that provides that if his employment is terminated under certain circumstances within 24 months after a change in control of the Company, he will be entitled to (i) severance equal to (x) 150% of his annual base salary plus (y) 150% of his annual performance bonus at the target level, and (ii) a bonus equal to his annual performance bonus at the maximum level prorated for the portion of the fiscal year prior to the termination date. In addition, he will be entitled to continue participating in the Company’s welfare benefit programs for up to 18 months following his termination. The letter agreement also commits him to remain employed with the Company in the event of a tender or exchange offer and includes a non-compete covenant for 12 months following his termination following a change in control. The form of the change-in-control letter agreement is filed as Exhibit 10.1 to our Form 10-Q filed February 1, 2010. None of the other executive officers has a change-in-control arrangement.
Change-in-Control Arrangements
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Change-in-Control Arrangements
In addition, the restricted stock held by the executive officers contain change-in-control provisions. If an executive officer is terminated without cause within 18 months after a change in control, all restricted stock will vest on the termination date. In addition, if there is a change in control of the Company or similar event, the Compensation Committee may, in its discretion, provide for the vesting of a participant’s restricted stock and unvested stock options on such terms and conditions as the Committee deems appropriate. The table below summarizes the executive benefits and payments that would have been due to the NEOs upon termination of employment occurring on March 30, 2024 following a change in control (without giving effect to the CEO and COO’s new employment agreements entered into in fiscal 2025):
Change-in-Control Arrangements
| | Michael J. Hartnett | Daniel A. Bergeron | Richard J. Edwards | Patrick S. Bannon | John J. Feeney | Robert M. Sullivan | | Severance Payment | 6,234,375 | 3,042,373 | 895,483 | NA | NA | NA | | Bonus | 2,493,750 | 960,750 | 335,806 | NA | NA | NA | | Other Payments | 43,328 | 52,351 | 17,765 | NA | NA | NA | | Vested Stock Options | 8,298,961 | 3,482,754 | 836,110 | NA | NA | NA | | Vested Restricted Stock | 18,668,208 | 7,226,456 | 1,135,470 | NA | 481,223 | 1,730,240 | | Total | 35,738,622 | 14,764,684 | 3,220,634 | NA | 481,223 | 1,730,240 |
Severance Other Than Following a Change in Control
Severance Other Than Following a Change in Control The employment agreements of the CEO and COO provide them with severance if their employment ends, other than following a change in control. No other executive officer has a similar arrangement. The following table summarizes the executive benefits and payments that would have been due to the CEO and COO if their employment had ended on March 30, 2024 other than following a change in control (without giving effect to their new employment agreements entered into in fiscal 2025):
Severance Other Than Following a Change in Control
| | Michael J. Hartnett | Daniel A. Bergeron | | Death or Disability/Termination Without Cause(1)(2) | | | | Base Salary | 997,500 | 640,500 | | Bonus | 2,493,750 | 960,750 | | Other Payments | 567,808 | 93,310 | | Vested Stock Options | 8,298,961 | 3,482,754 | | Vested Restricted Stock | 18,668,208 | 7,226,456 | | Long-Term Stock Award | 1,795,500 | NA | | Total | 32,821,727 | 12,403,770 | | Termination With Cause/Voluntary Resignation(3) | | | | Base Salary | 498,750 | NA | | Other Payments | 447,920 | NA | | Total | 946,670 | NA |
Severance Other Than Following a Change in Control
| (1) The employment agreement provides that if his employment ends due to his death, disability or termination by the Company without cause, he will (i) receive (x) a lump-sum payment equal to his then-base salary for the period from the termination date through the end of the term of the employment agreement and (y) his annual performance bonus at the maximum base salary multiple prorated for the portion of the fiscal year prior to the termination date, and (ii) be entitled to the continuation of certain benefits until the end of the term of the employment agreement or for 12 months, whichever is longer. For purposes of the foregoing, the end of the term of the employment agreement will be March 31, 2026 unless the agreement is automatically renewed, in which case the end of the term will be the end of the then-current 12-month renewal period. |
Severance Other Than Following a Change in Control
| (2) The employment agreement also provides that if his employment ends due to his death, disability, termination by the Company without cause, or the Company giving him notice of nonrenewal prior to March 31, 2026 or the end of any subsequent renewal period, all his restricted stock and unvested stock options will vest. Dr. Hartnett’s agreement also provides that he will receive an award of a prorated portion of the shares that would be issuable under the three-year component of his equity incentive program for any three-year performance periods that are then open (at the base salary multiple for the plan target goals). Starting with fiscal 2025, this benefit will also include a prorated portion of the shares that would be issuable under the one-year component of his equity incentive program, and this benefit will also be provided to Mr. Bergeron. |
Severance Other Than Following a Change in Control
| (3) Dr. Hartnett’s employment agreement provides that if he is terminated for cause or he voluntarily resigns, he will be entitled to his base salary and continuation of certain benefits set forth in his employment agreement for six months following the date of his termination. |
Severance Other Than Following a Change in Control
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Severance Other Than Following a Change in Control
| Compensation Tables |
Summary Compensation
| Name and Principal Position | Fiscal Year | Salary ($)(1) | Bonus ($)(2) | Stock Awards ($)(3) | Option Awards ($)(3) | Non-Equity Incentive Plan Compensation ($)(4) | All Other Compensation ($) | Total ($) | | Michael J. Hartnett Chairman, President and CEO | 2024 | 997,500 | NA | 6,317,484 | NA | 1,496,250 | 166,342(5) | 8,977,576 | | | 2023 | 950,000 | NA | 5,984,946 | NA | 1,425,000 | 90,271 | 8,450,217 | | | 2022 | 900,000 | NA | 10,364,286 | 5,820,840 | 2,250,000 | 69,237 | 19,404,363 | | | 2021 | 631,937 | NA | 3,725,036 | 2,900,431 | 1,550,040 | 87,557 | 8,895,001 | | Daniel A. Bergeron Vice President and COO | 2024 | 640,500 | NA | 2,104,431 | NA | 576,450 | 32,461(6) | 3,353,842 | | | 2023 | 610,000 | NA | 2,344,192 | NA | 549,000 | 37,401 | 3,540,593 | | | 2022 | 574,219 | NA | 4,979,000 | 2,680,650 | 868,220 | 28,680 | 9,130,769 | | | 2021 | 449,479 | NA | 1,769,128 | 1,021,593 | 661,500 | 35,138 | 3,936,838 | | Patrick S. Bannon Vice President and General Manager, retired | 2024 | 196,434 | - | 199,510 | 181,380 | - | 8,065 | 585,389 | | | 2023 | 286,443 | - | 199,100 | 172,896 | 150,000 | 9,820 | 818,259 | | | 2022 | 272,575 | 58,285 | 398,320 | 382,950 | 41,715 | 5,448 | 1,159,293 | | | 2021 | 239,885 | 24,450 | 687,200 | 738,750 | 125,550 | 8,846 | 1,824,681 | | Richard J. Edwards Vice President and General Manager | 2024 | 373,118 | - | 199,510 | 181,380 | 296,629 | 27,844(7) | 1,078,481 | | | 2023 | 362,250 | - | 398,200 | 345,793 | 235,463 | 23,302 | 1,365,008 | | | 2022 | 343,375 | - | 398,320 | 382,950 | 310,545 | 23,371 | 1,458,561 | | | 2021 | 273,153 | 29,400 | - | - | 120,600 | 22,991 | 446,144 | | John J. Feeney Vice President, General Counsel and Secretary | 2024 | 282,730 | 65,000 | 99,755 | 90,690 | NA | 10,120 | 548,295 | | | 2023 | 275,834 | 55,167 | 199,100 | 172,900 | NA | 9,821 | 712,822 | | | 2022 | 266,500 | 160,680 | 99,580 | 153,180 | NA | 5,460 | 685,400 | | | 2021 | 205,579 | 104,000 | 81,711 | 19,130 | NA | 4,151 | 414,571 | | Robert M. Sullivan Vice President and CFO | 2024 | 243,800 | 150,000 | 598,530 | 453,450 | NA | 10,059 | 1,455,839 | | | 2023 | 230,000 | 138,000 | 398,200 | 345,793 | NA | 9,090 | 1,121,083 | | | 2022 | 205,000 | 206,000 | 199,160 | 382,950 | NA | 5,392 | 998,502 | | | 2021 | 148,672 | 100,000 | 343,600 | 492,500 | NA | 4,768 | 1,089,540 |
Outstanding Equity Awards at End of Fiscal 2024
Outstanding Equity Awards at End of Fiscal 2024 As of the end of fiscal 2024 the NEOs held the following equity awards:
Outstanding Equity Awards at End of Fiscal 2024
| | Option Awards | | | | | Stock Awards | | | Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | | Michael J. Hartnett | 30,400 | 15,200(2) | - | 143.92 | 6/3/26 | 17,347(2) | 4,689,761 | | | 23,557 | 23,557(3) | - | 137.44 | 6/2/27 | 20,040(3) | 5,417,814 | | | 30,400 | 45,600(4) | - | 199.16 | 6/3/28 | 31,665(4) | 8,560,633 | | Daniel A. Bergeron | 35,000 | - | - | 132.12 | 6/7/25 | 8,333(2) | 2,252,827 | | | 28,000 | 7,000(2) | - | 143.92 | 6/3/26 | 7,849(3) | 2,121,977 | | | 12,446 | 8,297(3) | - | 137.44 | 6/2/27 | 10,548(4) | 2,851,652 | | | 14,000 | 21,000(4) | - | 199.16 | 6/3/28 | - | - | | Patrick S. Bannon | - | 3,000(2) | | 143.92 | 9/30/24 | 2,600(2) | 702,910 | | | - | 3,000(2) | | 137.44 | 9/30/24 | - | - | | | 2,000 | 1,000(2) | - | 199.16 | 9/30/24 | - | - | | | 400 | 400(2) | - | 199.10 | 9/30/24 | - | - | | | - | 400(2) | - | 199.51 | 9/30/24 | - | - | | Richard J. Edwards | - | 2,000(2) | - | 143.92 | 6/3/26 | 400(2) | 108,140 | | | - | 3,000(4) | - | 199.16 | 6/3/28 | 1,200(4) | 324,420 | | | - | 3,200(5) | - | 199.10 | 6/3/29 | 1,600(5) | 432,560 | | | - | 2,000(6) | - | 199.51 | 6/1/30 | 1,000(6) | 270,350 | | John J. Feeney | 40 | - | - | 135.53 | 12/15/25 | 180(7) | 48,663 | | | 56 | 112(7) | - | 181.58 | 2/8/28 | 300(4) | 81,105 | | | 800 | 1,200(4) | - | 199.16 | 6/3/28 | 800(5) | 216,280 | | | 400 | 1,600(5) | | 199.10 | 6/3/29 | 500(6) | 135,175 | | | - | 1,0006) | - | 199.51 | 6/1/30 | - | - | | Robert M. Sullivan | 3,000 | - | - | 132.12 | 6/7/25 | 200(2) | 54,070 | | | 4,200 | 1,400(2) | - | 143.92 | 6/3/26 | 1,000(3) | 270,350 | | | 6,000 | 4,000(3) | - | 137.44 | 6/2/27 | 600(4) | 162,210 | | | 2,000 | 3,000(4) | - | 199.16 | 6/3/28 | 1,600(5) | 432,560 | | | 800 | 3,200(5) | - | 199.10 | 6/3/29 | 3,000(6) | 811,050 | | | - | 5,000(6) | - | 199.51 | 6/1/30 | - | - |
Outstanding Equity Awards at End of Fiscal 2024
| (1) These amounts are based on $270.35, the closing price of our common stock on March 28, 2024, the last business day of fiscal 2024. |
Outstanding Equity Awards at End of Fiscal 2024
| (2) Vest in June 2024. For Mr. Bannon, excludes options and shares that were scheduled to vest at subsequent dates but expired when he ceased to provide services to the Company at the end of the first quarter of fiscal 2025. |
Outstanding Equity Awards at End of Fiscal 2024
| (3) Vest in one-half increments in June 2024 and June 2025. |
Outstanding Equity Awards at End of Fiscal 2024
| (4) Vest in one-third increments in June 2024, June 2025 and June 2026. |
Outstanding Equity Awards at End of Fiscal 2024
| (5) Vest in one-fourth increments in June 2024, June 2025, June 2026 and June 2027. |
Outstanding Equity Awards at End of Fiscal 2024
| (6) Vest in one-fifth increments in June 2024, June 2025, June 2026, June 2027 and June 2028. |
Outstanding Equity Awards at End of Fiscal 2024
| (7) Vest in one-half increments in February 2025 and February 2026. |
Outstanding Equity Awards at End of Fiscal 2024
| 42 | | 2024 Proxy Statement |
Option Exercises and Stock Vested in Fiscal 2024
Option Exercises and Stock Vested in Fiscal 2024 The following table sets forth information regarding the NEOs’ exercises of stock options and vesting of restricted stock during fiscal 2024:
Option Exercises and Stock Vested in Fiscal 2024
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(2) | | Michael J. Hartnett | 71,896 | 10,367,777 | 36,400 | 7,501,890 | | Daniel A. Bergeron | 30,000 | 5,027,313 | 16,550 | 3,409,279 | | Patrick S. Bannon | 27,000 | 3,225,160 | 3,600 | 745,852 | | Richard J. Edwards | 5,800 | 479,405 | 1,800 | 377,790 | | John J. Feeney | 302 | 27,351 | 450 | 103,584 | | Robert M Sullivan | 800 | 123,888 | 1,400 | 287,682 |
Option Exercises and Stock Vested in Fiscal 2024
| (1) Based on the closing price of our common stock on the date of exercise. |
Option Exercises and Stock Vested in Fiscal 2024
| (2) Based on the closing price of our common stock on the date of vesting. |
Non-Qualified Deferred Compensation
Non-Qualified Deferred Compensation The following table sets forth information regarding the NEOs’ deferral of compensation through contributions to our SERP during fiscal 2024:
Non-Qualified Deferred Compensation
| Name | Executive Contributions in Last Fiscal Year ($)(1) | Registrant Contributions in Last Fiscal Year ($)(2) | Aggregate Earnings in Last Fiscal Year ($)(3) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last Fiscal Year End ($) | | Michael J. Hartnett | - | - | 115,222 | - | 968,084 | | Daniel A. Bergeron | - | - | 357,217 | - | 2,005,939 | | Patrick S. Bannon | 52,981 | - | 49,593 | - | 678,170 | | Richard J. Edwards | 29,968 | - | 54,982 | - | 542,945 | | John J. Feeney | 22,699 | - | 46,519 | - | 284,395 | | Robert M. Sullivan | 15,927 | - | 45,823 | - | 217,836 |
Non-Qualified Deferred Compensation
| (1) These amounts are included in the “Salary” column in the Summary Compensation table. |
Non-Qualified Deferred Compensation
| (2) These amounts are included in the “All Other Compensation” column in the Summary Compensation table. |
Non-Qualified Deferred Compensation
| (3) Appreciation (depreciation) and earnings (loss) on the NEO’s account under the SERP. |
Non-Qualified Deferred Compensation
| | 2024 Proxy Statement | 43 |
Non-Qualified Deferred Compensation
| Pay Versus Performance |
Non-Qualified Deferred Compensation
The following Pay Versus Performance (PVP) table provides information about compensation for our NEOs for each of fiscal 2024, 2023, 2022 and 2021 (the “Covered Years”). The PVP table also provides information about the results for certain financial performance measures during the Covered Years. In reviewing this information, there are a few important things to consider:
Non-Qualified Deferred Compensation
| • | The information in columns (b) and (d) comes directly from the Summary Compensation table (SCT) in this proxy statement, without adjustment. |
Non-Qualified Deferred Compensation
| • | As required by the PVP regulations, we describe the information in columns (c) and (e) as “compensation actually paid” (CAP) to the applicable NEOs, but these CAP amounts do not necessarily reflect compensation that our NEOs actually earned for their service in the Covered Years. Instead, CAP is a calculation involving a combination of realized pay (for cash amounts and some equity award amounts) and realizable or accrued pay (primarily for pension benefits and other equity awards). |
Non-Qualified Deferred Compensation
| • | The PVP regulations require that we choose a peer group or index for purposes of TSR comparisons, and we have chosen the S&P 400 Industrials Sector (the “PVP Peer Index”) for this purpose. |
Non-Qualified Deferred Compensation
| • | As required by the PVP regulations, we provide information about our cumulative TSR, cumulative PVP Peer Index TSR and U.S. GAAP net income results (the “External Measures”) during the Covered Years in the PVP table, but we did not actually base any compensation decisions for the NEOs on, or link any NEO pay to, the External Measures. |
Non-Qualified Deferred Compensation
The Company is required to designate one financial metric as the “Company-Selected Measure,” or the most important financial measure that demonstrates how the Company sought to link 2024 executive pay to performance. For 2024, the Company has selected adjusted EBITDA. However, the Company believes that all of the metrics designated in the “Important Financial Performance Measures” section below are important drivers of Company performance.
Non-Qualified Deferred Compensation
| 44 | | 2024 Proxy Statement |
Pay Versus Performance(1)
Pay Versus Performance(1)
Pay Versus Performance(1)
| | | | | | Value of initial fixed $100 Investment based on: | | | | | Fiscal Year (a) | Summary Compensation Table “SCT” Total for PEO (b) | Compensation Actually Paid to PEO (c)(2) | Average Summary Compensation Table Total for non-PEO NEOs (d) | Average Compensation Actually Paid to non-PEO NEOs (e)(2) | Total Shareholder Return (f)(3) | PVP Peer Index Total Shareholder Return (g)(3) | Net Income (h)(4) | Adjusted EBITDA (i)(5) | | 2024 | $8,977,576 | $12,753,252 | $1,404,369 | $1,634,542 | $245.8 | $283.9 | $209.9 | $482.1 | | 2023 | $8,450,217 | $14,352,594 | $1,511,553 | $2,480,850 | $211.6 | $209.7 | $166.7 | $433.9 | | 2022 | $19,404,363 | $18,435,256 | $2,686,505 | $2,511,344 | $177.8 | $201.6 | $54.7 | $266.5 | | 2021 | $8,895,001 | $31,906,739 | $1,542,355 | $5,036,399 | $180.1 | $195.7 | $90.1 | $174.3 |
Pay Versus Performance(1)
| (1) Dr. Michal J. Hartnett was out principal executive officer (PEO) for each of the Covered Years. In this disclosure, we refer to our NEOs other than Dr. Hartnett as our “other NEOs.” Daniel A. Bergeron, Patrick S. Bannon, Richard J. Edwards, John J. Feeney and Robert M. Sullivan were our other NEOs for each of the Covered Years. |
Pay Versus Performance(1)
| (2) For each Covered Year, in determining the CAP for our PEO and the average CAP for our other NEOs, we deducted or added back the following amounts from or to the total amounts of compensation reported in column (b) and column (d) for such Covered Year: |
Pay Versus Performance(1)
| Item and Value Added (or Deducted) | 2024 | 2023 | 2022 | 2021 | | For Dr. Hartnett: | | | | | | - change in actuarial present value of pension benefits, as reported in SCT for Covered Year | - | - | - | - | | + service cost of pension benefits, as calculated for Covered Year | - | - | - | - | | + prior service cost of pension benefits, as calculated for Covered Year | - | - | - | - | | - SCT “Stock Awards” column value | (6,317,484) | (5,984,946) | (10,364,286) | (3,725,036) | | - SCT “Option Awards” column value | - | - | (5,820,840) | (2,900,431) | | +/- adjusted amount for applicable stock/option awards, as calculated for Covered Year | 10,093,160 | 11,887,323 | 15,216,019 | 29,637,205 | | + the Covered Year-end fair value of equity awarded in (and still outstanding as of the end of) the Covered Year | 8,560,633 | 6,995,864 | 16,179,662 | 11,090,134 | | +/- the change in fair value of equity awarded in prior Covered Years (and still outstanding as of the end of the Covered Year) | 3,925,511 | 4,844,811 | (827,571) | 15,484,735 | | + the vesting date fair value of equity awarded and vested in the Covered Year | - | - | - | - | | +/- the change in fair value of equity awarded in prior Covered Years that vested in the Covered Year | (2,392,984) | 46,648 | (136,072) | 3,062,336 | | - prior the Covered Year-end fair value of equity awarded in prior Covered Years that were forfeited in the Covered Year | - | - | - | - | | + dividends/earnings paid or accrued on equity awarded during or for the Covered Year (if not otherwise included in CAP) | - | - | - | - | | Total Added (or Deducted): | 3,775,676 | 5,902,377 | (969,107) | 23,011,738 | | For the Other NEOs (on Average): | | | | | | - change in actuarial present value of pension benefits, as reported in SCT for Covered Year | - | - | - | - | | + service cost of pension benefits, as calculated for Covered Year | - | - | - | - | | + prior service cost of pension benefits, as calculated for Covered Year | - | - | - | - | | - SCT “Stock Awards” column value | (640,347) | (707,758) | (1,214,876) | (576,328) | | - SCT “Option Awards” column value | (181,380) | (207,476) | (796,536) | (454,395) | | +/- adjusted amount for applicable stock/option awards, as calculated for Covered Year | 1,051,901 | 1,884,532 | 1,836,251 | 4,524,766 | | + the Covered Year-end fair value of equity awarded in (and still outstanding as of the end of) the Covered Year | 1,156,295 | 1,095,605 | 2,014,351 | 1,647,593 |
Pay Versus Performance(1)
| | 2024 Proxy Statement | 45 |
Pay Versus Performance(1)
| Item and Value Added (or Deducted) | 2024 | 2023 | 2022 | 2021 | | +/- the change in fair value of equity awarded in prior Covered Years (and still outstanding as of the end of the Covered Year) | 395,102 | 739,047 | (137,485) | 2,408,529 | | + the vesting date fair value of equity awarded and vested in the Covered Year | - | - | - | - | | +/- the change in fair value of equity awarded in prior Covered Years that vested in the Covered Year | (499,496) | 49,881 | (40,615) | 468,644 | | - prior the Covered Year-end fair value of equity awarded in prior Covered Years that was forfeited in the Covered Year | - | - | - | - | | + dividends/earnings paid or accrued on equity awarded during or for the Covered Year (if not otherwise included in CAP) | - | - | - | - | | Total Added (or Deducted): | 230,173 | 969,297 | (175,161) | 3,494,044 |
Pay Versus Performance(1)
| (3) TSR assumes an initial investment of $100 on March 30, 2020 in RBC common stock for our cumulative TSR and in the PVP Peer Index for the PVP Peer Index cumulative TSR, based on market prices at the end of each fiscal year through and including March 30, 2024, and reinvestment of dividends. |
Pay Versus Performance(1)
| (4) Dollars in millions. |
Pay Versus Performance(1)
| (5) Adjusted EBITDA is calculated based on the Company’s net income as used for external reporting purposes adjusted to exclude various items that are reflected in externally reported net income. See Appendix B for a reconciliation of adjusted EBITDA to its most directly comparable GAAP financial measure. Dollar values are in millions. |
Equity Compensation Plan Information
| CEO Pay Ratio |

DEF 14A of RBC Bearings INC

Proposal 1: Election of Directors

Proposal 1: Election of Directors

Proposal 1: Election of Directors

Proposal 1: Election of Directors

Proposal 1: Election of Directors

Proposal 1: Election of Directors

Proposal 1: Election of Directors

Proposal 4: Advisory Vote on Executive Compensation

Proposal 4: Advisory Vote on Executive Compensation

Proposal 4: Advisory Vote on Executive Compensation

Proposal 4: Advisory Vote on Executive Compensation

Proposal 4: Advisory Vote on Executive Compensation

Director Compensation

Director Compensation

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Director Compensation

Directors and Officers

Directors and Officers

Directors and Officers

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Directors and Officers

Delinquent Section 16(a) Reports

Delinquent Section 16(a) Reports

Delinquent Section 16(a) Reports

Delinquent Section 16(a) Reports

Delinquent Section 16(a) Reports

Pay-for-Performance Philosophy

Performance Metrics and the Use of Adjusted EBITDA

Performance Metrics and the Use of Adjusted EBITDA

Performance Metrics and the Use of Adjusted EBITDA

Performance Metrics and the Use of Adjusted EBITDA

Performance Metrics and the Use of Adjusted EBITDA

Performance Metrics and the Use of Adjusted EBITDA

Performance Metrics and the Use of Adjusted EBITDA

Performance Metrics and the Use of Adjusted EBITDA

Performance Metrics and the Use of Adjusted EBITDA

Performance Metrics and the Use of Adjusted EBITDA

Performance Metrics and the Use of Adjusted EBITDA

Performance Metrics and the Use of Adjusted EBITDA

Performance Metrics and the Use of Adjusted EBITDA

Performance Metrics and the Use of Adjusted EBITDA

Compensation Governance Policies

Executive Compensation Process and Components

Base Salary

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Base Salary

Annual Performance Bonuses

Long-Term Equity Incentive Awards

Long-Term Equity Incentive Awards

Long-Term Equity Incentive Awards

Compensation Peer Group

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