DEF 14A of Motorcar Parts Of America Inc
Filed Jul 26, 2024 · FY20240001140361-24-034403
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS On July 25, 2024, each of Mr. Borneo, Chair of the Compensation Committee and Director and Ms. Rankin a Director, notified the Board that they intend to retire from the Board at the expiration of their current term and consequently, will not stand for re-election at the Annual Meeting, although each will remain a member of the Board and in Mr. Borneo’s case the Chair of the Compensation Committee until the conclusion of the Annual Meeting. We are asking our shareholders to elect ten members to serve on our Board of Directors for a one-year term of office or until their respective successors are elected and qualified. Our Board of Directors has nominated the ten individuals named below for election as directors. Each nominee has agreed to serve as a director if elected. Each of our nominees, Selwyn Joffe, Joseph Ferguson, Philip Gay, Barbara Whittaker, Dr. David Bryan, Jeffrey Mirvis, Douglas Trussler, and Patricia (Tribby) W. Warfield is currently serving as a director, and were elected at our last annual meeting of shareholders. Frederic Jack Liebau Jr. and Anil Shrivastava are not currently serving as a director of the Company. Our directors will hold office until the next annual meeting of shareholders, or until their successors are elected and qualified. The persons named as proxies in the accompanying form of proxy have advised us that at the meeting, they will vote for the election of the nominees named below, unless a contrary direction is indicated. If any of these nominees becomes unavailable for election to our Board of Directors for any reason, the persons named as proxies have discretionary authority to vote for one or more alternative nominees designated by our Board of Directors. Pursuant to the Convertible Note Transaction that closed on March 31, 2023 (the “Note Transaction), and at the recommendation of the Nominating and Corporate Governance Committee of the Board, the Board appointed Douglas Trussler to the Board to serve until the Company’s 2024 Annual Meeting of Shareholders, at which he was elected to serve by the Company’s shareholders. The Nominating and Corporate Governance Committee and the Board have determined that, due to the Company’s ongoing obligations related to the Note Transaction, Mr. Trussler is not independent. The Board of Directors recommends that shareholders vote FOR each of the nominees named below.
Information Concerning our Board of Directors and our Nominees to our Board of Directors
Information Concerning our Board of Directors and our Nominees to our Board of Directors The nominees for election to our Board of Directors, their ages and present positions with the Company, are as follows: Selwyn Joffe, 66, has been our Chairman of the Board of Directors, President and Chief Executive Officer since February 2003. He has been a director of our Company since 1994 and Chairman since November 1999. From 1995 until his election to his present positions, he served as a consultant to us. Prior to February 2003, Mr. Joffe was Chairman and Chief Executive Officer of Protea Group, Inc. a company specializing in consulting and acquisition services. From September 2000 to December 2001, Mr. Joffe served as President and Chief Executive Officer of Netlock Technologies, a company that specializes in securing network communications. In 1997, Mr. Joffe co-founded Palace Entertainment, Inc., a roll-up of amusement parks and served as its President and Chief Operating Officer until August 2000. Prior to the founding of Palace Entertainment, Inc., Mr. Joffe was the President and Chief Executive Officer of Wolfgang Puck Food Company from 1989 to 1996. Mr. Joffe serves on the board of directors of the California, Arizona and Nevada Automotive Wholesaler’s Association (CAWA), an industry trade association. Mr. Joffe was a founding director of MERA (Motor and Equipment Remanufacturers Association). Mr. Joffe is a graduate of Emory University with degrees in both Business and Law and is a Certified Public Accountant. As our most senior executive, Mr. Joffe provides the Board of Directors with insight into our business operations, management and strategic opportunities. His history with our Company and industry experience has led the Board of Directors to conclude that he should serve as a director and Chairman for of our Company. Dr. David Bryan, 72, joined our Board of Directors on June 9, 2016. Dr. Bryan is a member of our Compensation and Nominating and Corporate Governance Committees. Dr. Bryan currently directs The Center for The Common Good, a joint venture of The Herb Alpert Foundation and New Roads School to incubate creative innovation in business, education and community partnerships. In addition, Dr. Bryan consults privately with several Los Angeles based not-for-profit and for-profit businesses on matters of board and workplace organization, employee training and online education, and generational workplace dynamics. Dr. Bryan is also an active content creator and co-producer for his podcast, Curiosity Invited. Previously Dr. Bryan lectured in the Economics Department of University of California at Santa Cruz from 2014 to 2020. Dr. Bryan was Co-founder and Founding Head of New Roads School from 1995 to 2013. Dr. Bryan is currently the Chair of the c3 and c4 boards at Los Angeles based Brave New Films. Dr. Bryan received a B.A. from the State University of New York at Stony Brook, an M.S. from the University of California at Los Angeles and a J.D. and Ph.D. from the State University of New York at Buffalo. Dr. Bryan’s extensive experience in the education industry and a variety of businesses, as well as his extensive experience with information security and communication, have led the Board of Directors to conclude that he should serve as a director of our Company. Joseph Ferguson, 57, joined our Board of Directors on June 9, 2016. Mr. Ferguson is our Lead Independent Director, and a member of our Audit Committee. Mr. Ferguson is a Co-Founder and Managing Partner at Vicente Capital Partners, a Los Angeles-based investment firm providing capital to privately held growth companies across North America. Over the past 28 years, Mr. Ferguson‘s private equity firm has made 65 investments. He has served on numerous boards and has served as Board Chairman and on compensation and audit committees. Prior to co-founding Vicente in 2009, Mr. Ferguson was a partner at Kline Hawkes & Company, which he joined at the firm’s inception in 1995. Mr. Ferguson began his career as an investment banker for Merrill Lynch & Co where he was a member of the Energy and Natural Resources Group and the General Corporate Finance Group. From 1989 to 1994, he worked on over 30 public and private transactions for numerous emerging growth and middle market companies. Mr. Ferguson currently serves on the board of directors of SMT, Intellectual Technology, Inc., and Global LT each of which is privately held. He also serves on the board of directors of Oaktree Strategic Credit Fund and Oaktree Gardens OLP, each a public closed end fund. Mr. Ferguson is a member of the Board of Trustees for The Wildwood School, the Toigo Board of Directors and a member of the Board of Advisors at UCLA Anderson. Mr. Ferguson received a B.B.A in Finance from Southern Methodist University and an M.B.A from the UCLA Anderson School of Management. Mr. Ferguson’s business skills and experience, leadership expertise, knowledge of complex global business and financial matters have led the Board of Directors to conclude that he should serve as our lead independent director of our Company. Philip Gay, 66, joined our Board of Directors on November 30, 2004. He chairs our Audit Committee. Mr. Gay currently serves as a partner at Paperchase, since October 2022, a global business accounting and advisory service firm that assists mid-cap sized companies with financing, mergers and acquisitions and strategic financing. Mr. Gay sold his firm Triple Enterprises to Paperchase in September 2022, which he had run from October 2010 till then (operating in same key areas). From April 2018 through January 2020, Mr. Gay served as co-CEO of Giggles N Hugs, Inc., a publicly traded company. From March 2015 to May 2015 Mr. Gay served as a director and chief executive officer at Diego Pellicer Worldwide Inc., a publicly traded company. From July 2006 until June 2010, Mr. Gay served as President, Chief Executive Officer and a Director of Grill Concepts, Inc., a company that operates a chain of upscale casual restaurants throughout the United States. From March 2000 to November 2001, Mr. Gay served as an independent consultant with El Paso Energy from time to time and assisted El Paso Energy with its efforts to reduce overall operating and manufacturing overhead costs. Previously he has served as chief financial officer for California Pizza Kitchen (1987 to 1994) and Wolfgang Puck Food Company (1994 to 1996), and he has held various Chief Operating Officer and Chief Executive Officer positions at Color Me Mine and Diversified Food Group from 1996 to 2000. Mr. Gay a retired Certified Public Accountant, was an audit manager at Laventhol and Horwath and a graduate of the London School of Economics. Mr. Gay’s leadership experience, general business and public company knowledge, financial literacy and expertise, accounting skills and competency and overall financial acumen have led the Board of Directors to conclude that he should serve as a director of our Company.
Information Concerning our Board of Directors and our Nominees to our Board of Directors
F, Jack Liebau, 60, is nominated for appointment to our Board of Directors. Mr. Liebau has been a director since 2015 and Chairman of NYSE-listed Myers Industries since 2016, a director since 2023 and Chairman of NASDAQ-listed STRATTEC Security Corp. since 2024. He has been a managing director of Beach Investment Counsel since 2020. Mr. Liebau previously was a director of publicly listed Media General, Herley Industries, and Pep Boys. He is also a Director, since its formation in 2020 of the BNY Mellon ETF Trust. Mr. Liebau has been a partner and equity portfolio manager at Primecap Management (1986-2003) where he co-managed two Vanguard Funds, at Liebau Asset (2003-2011), and at Davis Funds (2011-2013). He was President and CEO of Roundwood Asset Management (2013-2015). He is currently CFO and Director of the Edwin Gregson Foundation. He graduated from Phillips Academy, Andover and Stanford University. Mr. Liebau’s vast financial, strategic, and executive experience, working with companies in a variety of industries, along with his public board and governance experience give him pertinent insights to communicate with various constituencies and have led the Board of Directors to conclude that he should serve as a director of our Company. Jeffrey Mirvis, 60, joined our Board of Directors on February 3, 2009. Mr. Mirvis is a member of our Audit, Compensation and Nominating and Corporate Governance Committees. Mr. Mirvis is currently the Chief Executive Officer of MGT Industries, Inc. (“MGT”), a privately held apparel company based in Los Angeles. As Chief Executive Officer of MGT, Mr. Mirvis successfully moved all production and sourcing to Asia. During his twenty-three year tenure as chief executive, Mr. Mirvis has gained valuable knowledge of manufacturing in Asia. Prior to joining MGT in 1990, Mr. Mirvis served as a commercial loan officer at Union Bank of California following his completion of the Union Bank of California’s Commercial Lending Program. He earned a Bachelor of Arts degree in economics from the University of California at Santa Barbara. He served as a board member of Wildwood School in Los Angeles, for nine years. Mr. Mirvis’ international business experience, operational and production expertise, leadership experience and organizational management have led the Board of Directors to conclude he should serve as a director of our Company. Anil Shrivastava, 55, is nominated for appointment to our Board of Directors. Mr. Shrivastava was the Founder of 325 Capital in 2020 and is currently its Managing Partner. He has spent 16 years investing in companies and has served on the board of five private companies including three as Chairman. Prior to 325 Capital, Anil was a Partner at Sagard Capital from 2012 – 2018 where he focused on blueprint development, management relationships, and team development. He was also a Managing Director in the Healthcare group at Vestar Capital, a $5B private equity firm, from 2007 - 2023. He spent 15 years at Bain & Company where he was a partner in the Private Equity and Healthcare Practices and supported clients in Boston, Sydney, London, and New York offices. He is currently a Trustee at the New York Hall of Science. Mr. Shrivastava graduated with honors in Economics from Harvard College and earned an MBA at Harvard Business School. Mr. Shrivastava’s extensive financial experience, and detailed understanding of microcap and small cap companies and their investors have led the Board of Directors to conclude that he should serve as a director of the Company. Douglas Trussler, 53, joined our Board on March 31, 2024. Mr. Trussler was the co-founder of Bison Capital in 2001 and serves as their General Partner of Funds. Mr. Trussler has been responsible for the management of 6 institutional private equity funds totaling more than $1.0 billion in capital commitments from some of the largest institutional investors in the US. Previously, from 1993 to 2000, Mr. Trussler was at Windward Capital Partners LP and at Credit Suisse First Boston. Mr. Trussler is currently a member of the Board of Directors of Sentinel Offender Services, LLC, Silicon Recycling Services, LLC, FinFit, LLC, TwinMed, LLC, Aqua Expeditions, Pte, Ltd., Curtin Maritime, Ocean Media, LLC and Lapmaster Holdings, LLC, all private companies. In the past ten years, Mr. Trussler was formerly a member of the Board of Directors of General Finance Corporation, KeyTech Limited, Ease Entertainment Services, LLC, MVConnect Holdings, LLC, Clinical Research Laboratories, LLC, Performance Team Freight Systems, Inc., Big Rock Sports, LLC, and Global Benefits Group, Inc. In total, Mr. Trussler has served on more than 30 public and private company board in businesses located around the world. Mr. Trussler earned an Honors in Business Administration (HBA) degree from the Ivey Business School at the University of Western Ontario. Other than set forth in the Certain Relationships and Related Transactions section below, there are no transactions between Mr. Trussler and the Company that would be reportable under Item 404(a) of Regulation S-K. Mr. Trussler’s vast financial experience, worldwide and strategic understanding of the aftermarket auto parts space have led the Board of Directors to conclude that he should serve as a director of the Company. Patricia (Tribby) W. Warfield, 64, joined our Board in January 2022. Ms. Warfield most recently served as the chairman and CEO of APC Automotive Technologies, from 2019 to 2020, overseeing a restructuring and a strategic refocusing of the business on braking and exhaust related products. During Ms. Warfield’s tenure, APC instituted bankruptcy proceedings in the US Bankruptcy Court for the District of Delaware under Chapter 11 of the US Bankruptcy Code on June 4, 2020. APC confirmed its Chapter 11 reorganization on July 10, 2020, effective July 24, 2020. From 2017 - 2019, she served as SVP, business development and strategy for Nitta Corporation, a Japanese global provider of power transmission and conveyor belting products for Europe, Middle East & Africa. Previously, while from 2014 - 2017, Ms. Warfield held dual positions at Kaman Corporation, as SVP and general manager for Kaman Fluid Power and Kaman Automation. Her career includes 25 years, from 1988 - 2013 with the Gates Corporation (NYSE: GTES) including 11 consecutive years in Europe in key executive management and operational positions. Ms. Warfield currently serves on the Canadian publicly-traded board of Badger Infrastructure Solutions Ltd. (BDGI-TSX) where she is a member of the Audit and HR & Compensation Committee as well as a board advisor to four private equity sponsored diversified manufacturing and distribution portfolio companies. She is an advisor board member of the University of Colorado Denver Business School, and formally served as an adjunct professor and guest lecturer at the Daniels College of Business at the University of Denver. She is a member of the Institute of Corporate Directors, as well as The Committee of 200, comprised of the world’s most successful women entrepreneurs and corporate innovators. Ms. Warfield graduated cum laude with a bachelor’s degree in Business Administration from National University, San Diego. Ms. Warfield’s automotive and manufacturing experience, strategic understanding of our core customer, and strong understanding of markets outside the United States have led the Board of Directors to conclude that she should serve as a director of Company.
Information Concerning our Board of Directors and our Nominees to our Board of Directors
Barbara L. Whittaker, 73, joined our Board of Directors on February 21, 2017. Ms. Whittaker chairs our Nominating and Governance Committee. Ms. Whittaker is a business strategist and procurement and supply chain expert with extensive experience in the automotive industry, at original equipment manufacturers, suppliers, and the aftermarket. In 2010 Ms. Whittaker founded BW Limited LLC, which focuses on providing companies business and procurement strategies that lead to improvements in operating performance. She led a majority supplier joint venture team in 2011 that created and launched Detroit Manufacturing systems, a direct supplier to the automotive industry, supplying interior components. She held a position there as Vice President and Corporate Secretary until 2018. Her more recent work with companies has been in business strategy development, joint venture creation and diversity development in the business and non-profit sectors. Her career started with General Motors Corporation and Delphi Automotive where she held leadership positions of increasing responsibility over many years both in the United States and in Europe. Prior to her retirement from General Motors, Ms. Whittaker’s position was Executive Director of Global Purchasing. Ms. Whittaker holds a Bachelor of Industrial Administration degree from General Motors Institute (now Kettering University), MBA degree from Wayne State University, and has also completed the Advanced Management Program at INSEAD in France, and the Executive Development program at University of Michigan. In addition to this formal education, she holds Six Sigma Green Belt certification and has completed the Kellogg, Women’s Director Development Program. She currently serves on the board of directors of Hall Capital Partners and has also held board positions at ChanelNet, Detroit Manufacturing Systems, a $1 billion revenue company, and Piston Group in the past, each of which is privately held. Ms. Whittaker’s automotive experience, supply chain expertise, global leadership experience and strategy development skills have led the Board of Directors to conclude that she should serve as a director of the Company. Snapshot of Director Nominees The following tables provide summary information about our director nominees. Additional information about our director nominees can be found above in their biographies.
Information Concerning our Board of Directors and our Nominees to our Board of Directors
| Name | Age | Director Since | Principal Occupation | Independent | Committee Member | Other Public Company Boards | Relevant Experience | | Selwyn Joffe | 66 | Director 1994, Chairman of the Board 1999 | President and Chief Executive Officer of Motorcar Parts of America, Inc. | | | | | | David Bryan | 72 | June 9, 2016 | Directs Center of the Common Good, Co-Founder, Former Head of New Roads School | ❖ | • Compensation • Nominating and Corporate Governance | | Training, Communications, Cybersecurity | | Joseph Ferguson | 57 | June 9, 2016 | Managing Partner of Vicente Capital Partners | ❖ | • Audit | 2 | Private Equity, Financial | | Philip Gay | 65 | November 30, 2004 | Managing Director of Triple Enterprises | ❖ | • Audit (C) | | Public Co. CEO (2x), Public Co. Financial & Risk Expertise | | F. Jack Liebau, Jr. | 60 | Nominee | Independent Board Chairman of Myers Industries & Strattec Security Corp, Trustee of BNY Mellon ETF Trust | ❖ | | 2 | Public Company Board experience within similar industries, Governance and Compliance | | Jeffrey Mirvis | 60 | February 3, 2009 | Chief Executive Officer of MGT Industries, Inc. | ❖ | • Audit • Compensation • Nominating and Corporate Governance | | Supply Chain, Finance, and Compensation | | Anil Shrivastava | 55 | Nominee | Founder and Managing Partner of 325 Capital | ❖ | | | Private Equity, Financial, Investor | | Douglas Trussler | 53 | March 31, 2023 | Co-founder of Bison Capital and General Partner of their Funds | | | | Private Equity, Financial, Investor & Public Company | | Barbara L. Whittaker | 73 | February 21, 2017 | Founder of BW Limited LLC | ❖ | • Nominating and Corporate Governance (C) | | Automotive Public Co. Executive, DEI | | Patricia (Tribby) W. Warfield | 64 | January 26, 2022 | Recently served as Chairwoman and CEO of APC Automotive Technologies | ❖ | | 1 | Aftermarket Executive, Private Equity |
Information Concerning our Board of Directors and our Nominees to our Board of Directors
(C) Committee Chair
Information Concerning our Board of Directors and our Nominees to our Board of Directors
| Gender Diversity | Average Age | Racial/Ethnic Diversity | Average Tenure | Independence | | 20% | 62.5 Years | 40% | 9.2 Years | 80% |
Compensation Discussion and Analysis
| ✔ | We generated approximately $39.2 million of cash from operating activities, which surpassed the Company’s maximum annual cash incentive plan target by 83%. As a consequence, we: |
Compensation Discussion and Analysis
| ✔ | Despite increasing gross profit dollars(2) by 16.3% to $132.6 million, we did not achieve the threshold for gross profit for our annual cash incentive plan. Our shortfall in hitting our target sales affected overall gross profit and gross margins due to lower overhead absorption. |
Compensation Discussion and Analysis
| ✔ | Similarly, despite increasing EBITDA(2) by $13.05 million or 18.3% and increasing operating income by 26.5% to $46.1 million, we did not hit the threshold for EBITDA for our annual cash incentive plan. This is a direct consequence of lower sales and consequently lower gross margin as previously discussed. |
Compensation Discussion and Analysis
| • | Reward our executive officers for their contribution to our success in building long-term shareholder value; and |
Actions Taken
| • | Changed from relative total shareholder return (“TSR”) performance goal weighting of 30% for Fiscal 2023 PSU awards to absolute TSR performance goal weighting of 100% for Fiscal 2024 PSU awards to align management with our shareholders’ interests. PSU awards granted in Fiscal 2024 were comprised of three performance-vesting tranches under which 1/3 of the target PSUs may be eligible to vest, including the (i) achievement of a $10 stock price target (49.7% increase from stock price at grant), (ii) achievement of a $15 stock price target (124.5% increase from stock price at grant), and (iii) achievement of a stock price between $17.50 and $25 (with vesting ranging between 50% and 150% of the tranche, depending on the stock price achieved between the two goals, with 100% of the tranche vesting at a $20 stock price) (199.4% increase from stock price at grant). Each performance-vesting tranche may be met over a three-year performance period, commencing June 19, 2023, and all price targets must be met for thirty consecutive trading days; |
Actions Taken
| • | All equity granted in Fiscal 2024 was long-term, and with respect to performance-based awards, included rigorous and challenging targets to allow any vesting; |
Actions Taken
| • | Determined that the 2022 PSU grant (paid out in Fiscal Year 2025) only met one goal for Net Sales after adjustments, of three goals, and thus we paid out only 45% of the target number of PSUs granted, reinforcing pay for performance alignment; |
Actions Taken
| • | Given that Mr. Joffe’s current Employment Agreement does not guarantee a particular equity grant, the Compensation Committee used that flexibility to grant our regular equity grant to the CEO and the other named executive officers based 100% on stock price (absolute TSR) in Fiscal 2024, instead of part PSU and part time based RSUs. In addition, the CEO was not granted performance based restricted stock, as had been done in previous years under his prior employment agreement; and |
Actions Taken
| • | Approved an increase in Mr. Joffe’s, as well as our other executive officers’, Fiscal 2024 performance-based equity weighting, with respect to annual equity awards (which were granted in June 2023) to 100% of their equity compensation opportunity to place greater emphasis on shareholder value creation and to better reflect shareholders’ expectation that the company should work to create return greater than its peers. |
Actions Taken
Compensation Components and Key Elements. With our compensation objectives in mind, as further described below, our executive officer compensation program consists of five primary elements: Base Salary. Base salary is the “fixed” component of our executive compensation intended to meet the objective of attracting and retaining executive officers of superior talent that are necessary to manage and lead our Company. Annual Cash Incentive Plan. We use a cash-based incentive plan to motivate the achievement of key short-term pre-determined financial corporate and individual performance goals meant to enhance shareholder value. With respect to our Annual Cash Incentive Plan, the individual performance metrics employed in recent years focused on the transformation of our business including the launch of our new full line brake program, consolidation of our operations into low-cost countries, and electric vehicle and aerospace initiatives. For Fiscal 2024, our Compensation Committee removed the individual performance component from our Annual Cash Incentive Plan for executive officer participants, so that 100% of each named executive officers’ cash-based incentive compensation opportunity was based solely on corporate objectives, as further described below. The following table includes the target cash-based incentive compensation opportunities and weightings for each named executive officer in Fiscal 2024:
Actions Taken
Long-term, Equity-Based Incentive Plan. Equity awards are a part of our overall executive compensation program to align the interests of our executives with those of shareholders while rewarding individual performance and ensuring we offer competitive compensation levels. In Fiscal 2023, half of the value of the equity awards granted to our named executive officers (not including Mr. Joffe’s performance-based restricted stock award) were performance based and included PSUs requiring three years of performance to vest. Mr. Joffe received 67% performance-based equity awards in Fiscal 2023. In Fiscal 2024, 100% of our annual equity awards (which were granted in June 2023) are performance based and tied to stock price performance goals. Though Mr. Joffe, Mr. Lee and Mr. Shah were granted a one-time retention stock option award in September 2023. These stock options have a ten-year term and were granted with a premium exercise price. Please see below for further details. Deferred Compensation Benefits. We offer participation in a non-qualified deferred compensation plan to selected executive officers which provides unfunded, non-tax qualified deferred compensation benefits. We believe this program helps promote the retention of our senior executives. Participants may elect to contribute a portion of their cash compensation to the plan. We made matching contributions of 100% of each participant’s elective contributions to the plan up to 3% of the participant’s cash compensation until February 5, 2023, when the Company temporarily halted the Company’s matching contributions, until it was restarted February 8, 2024. Employee Benefits. All of our full-time employees, including our named executive officers, are eligible to participate in our health and welfare plans. The Company does not provide pension benefits, other than matching contributions under the Company’s 401(k) retirement plan, which were temporarily halted effective February 5, 2023, until it was restarted February 8, 2024. We believe that a significant portion of executive officer compensation should be at-risk and dependent upon the achievement of measurable and objective performance metrics tied to increased shareholder value. In Fiscal 2024, the awards under the Annual Cash Incentive Plan for all named executive officers were based on the achievement of pre-determined objective metrics of the Company, including Gross Profit after adjustments, EBITDA after adjustments and Cash from Operating Activities, which were weighted, 25%, 25% and 50%. As described further below, our Annual Cash Incentive Plan requires the Company to meet at least 50% of the target corporate performance objectives to pay out any bonus. In Fiscal 2024, the Company met 183% of its Cash from Operating Activities goal (weighted at 50%), but did not meet threshold performance for EBITDA after adjustments or Gross Profit after adjustments (each weighted at 25%), and thus an annual short term cash based incentive bonus of 75% (50% weighting x 150% maximum goal multiplier) of the target bonus opportunity was paid to executives. A portion of our Chief Executive Officer’s total direct Fiscal 2024 compensation is comprised of equity awards (the “Equity Component”), including PSUs. A majority of Mr. Joffe’s Equity Component consists of performance-based awards focused on achievement of goals that we believe enhance shareholder value, even better aligning his compensation with the interests of our shareholders. As discussed above, in Fiscal 2024, 100% of the equity awards granted to the named executive officers and other employees throughout the Company under our annual equity award program consisted of PSUs that are 100% dependent on increasing the value of Company common stock. Moreover, we believe that the executive compensation program should serve the interests of shareholders. Accordingly, we have adopted various policies and practices that we believe are in shareholders’ interests, including:
Actions Taken
| What We Do | What We Don’t Do | | Align pay with performance | No “single-trigger” equity acceleration in connection with a change in control | | Formulaic cash-based incentive program, with 80% (100% in FY24) of total cash-based annual incentive award opportunity tied to objective financial performance goals | Do not provide above-market interest rates on deferred compensation | | Maintain significant stock ownership requirements: 3x base salary (CEO) and 2x base salary (other named executive officers) | Do not re-price or exchange stock options without shareholder approval | | Maintain a clawback policy (see “Governance Policies and Guidelines—Clawback Policy” above) | Do not allow hedging or pledging of our equity securities | | Annual say-on-pay vote | | | Seek and respond to input from our shareholders regarding executive compensation | | | Compensation Committee receives advice from an independent compensation consultant | |
Actions Taken
As discussed above under “Governance Policies and Guidelines—Stock Ownership Guidelines,” we have also adopted stock ownership guidelines, pursuant to which each of our directors and executive officers are required to hold a certain number of shares of our common stock, within a specified timeframe. Say on Pay Vote. At the Annual Meeting held on September 14, 2023, 88% of the votes cast by our shareholders approved the non-binding advisory vote related to executive compensation. In Fiscal 2024, we continued to regularly engage with our shareholders to ensure we understand any thoughts or concerns with our executive compensation program, with the goal of continually enhancing our shareholder communications. Please see Engagement of Shareholders section below for further details. In Fiscal 2024, we held discussions with nearly all of our major shareholders, representing a majority of the holders of Company common stock, regarding executive compensation and other governance and business performance issues. In response to the feedback we received in these meetings, we continued to enhance our incentive compensation goals focusing on fulfilling our long-term strategic objectives and building shareholder value. The Annual Cash Incentive Plan for Fiscal 2024 employs objective corporate metrics focused on building shareholder value and return, including 50% of the Company goal being based on the generation of cash from operations, as we continue to hear that cash generation is a top priority of our shareholders. In response to the decline in the stock price, the Compensation Committee changed course for Fiscal 2024 to align management with our shareholders’ interests. The annual equity grants for Fiscal 2024 (which were granted in June 2023) changed from 50% time-based RSU awards and 50% PSU awards with multiple performance goals granted in Fiscal 2023 to 100% PSU grants with one absolute TSR performance goal, namely to increase the Company stock price, as compared to Fiscal 2023 when the Company had a relative TSR performance goal weighting of 30% for PSU awards (and the remaining 70% weighting was comprised of financial operations goals). PSU awards granted in Fiscal 2024 were comprised of three performance-vesting tranches under which 1/3 of the target PSUs may be eligible to vest, including the (i) achievement of a $10 stock price target (49.7% increase from stock price at grant), (ii) achievement of a $15 stock price target (124.5% increase from stock price at grant), and (iii) achievement of a stock price between $17.50 and $25 (with vesting ranging between 50% and 150% of the tranche, depending on the stock price achieved between the two goals, with 100% of the tranche vesting at a $20 stock price) (199.4% increase from stock price at grant). Each performance-vesting tranche may be met over a three-year performance period, commencing June 19, 2023, and all price targets must be met for thirty consecutive trading days.
Engagement with Shareholders
Engagement with Shareholders We openly encourage direct dialogue between management and shareholders, and try at least on a quarterly basis to make contact with our shareholder base. We host an open conference call to discuss earnings and have a “no restriction” question and answer session for our participants. In addition we actively engage with our shareholders in person, by phone, and through written correspondence. During Fiscal 2024, we met via conference call / video and in person with most of our largest shareholders and many other shareholders. We consider the shareholders’ feedback offered during those meetings and continue to improve our corporate governance, communication and executive compensation practices. Shareholders expressed a desire that a majority of equity awards granted to our named executive officers be based on metrics directly related to enhancing shareholder value. Starting in Fiscal 2022, of the equity awards granted to our named executive officers (other than Mr. Joffe’s restricted stock award) approximately fifty percent (50%) of the value of such awards were granted as RSUs that vest ratably over a three-year period subject to continued service, and approximately fifty percent (50%) of the value of such awards were granted as PSUs that are eligible to vest at the end of a three-year period based on the Company’s achievement of financial performance metrics tied to our projected budget for Fiscal 2024, at the time of grant. We continued the same program in Fiscal 2023 with slight changes to the weighting of each PSU performance measure tied to our projected budget in Fiscal 2025, at the time of the grant (increasing TSR from 20% to 30% and decreasing EBITDA, after adjustments from 50% to 40%) to the PSU performance metrics. These metrics were: 1) EBITDA after certain adjustments (40% weighting), 2) Relative TSR to Russell 3000, with financial and real estate companies excluded (30% weighting), and 3) Net Sales after adjustments (30% weighting), each of which, the Company believes focuses on driving shareholder value. Each metric, other than TSR which is defined above, is defined in Appendix A of our Proxy Statement on Schedule 14A filed with the SEC on July 28, 2023. These three metrics are viewed as key indicators of our performance that our CEO, CFO and VP Investor Relations discussed with most of our shareholders. In Fiscal 2024, our shareholders expressed that they were generally happy with our financial results, and wanted us to focus on share price. As a direct result of these discussions, the Compensation Committee implemented an annual equity grant that was congruent with our shareholders focused only on increased share price. In Fiscal 2024, with respect to our annual equity awards, we only granted PSUs that vest based on the achievement of target stock price increases of between 49.7% and 199.4% of the stock price on the date of grant. When talking to shareholders in Fiscal 2022 we received input that shareholders wanted incentive-based compensation based on the generation of positive cash flow from operations and as a result we included such metric in our Fiscal 2023 incentive plans. In Fiscal 2023, we continued to emphasize our focus on shareholder value and return by adding Net Cash Provided by Operating Activities as the largest portion of the performance metric in our short term incentive plan, as the Compensation Committee and the Board emphasized the ever increasing importance of positive cash flow in today’s fiscal environment. In Fiscal 2024 and Fiscal 2025 we continued this trend by increasing the weighting of positive cash flow to 50% for the Company portion of our Annual Cash Incentive Plan opportunity. With respect to our Fiscal 2024 Annual Cash Incentive Plan for executive officers, the following three key metrics were set as: 1) Cash from Operating Activities (50% weighting), 2) EBITDA, after adjustments (25% weighting), and 3) Gross Profit after adjustments (25% weighting), each as explained in Appendix A. These three metrics are viewed as key indicators of our performance that our CEO, CFO and VP Investor Relations discussed with most of our shareholders. The Compensation Committee deemed that these key executable metrics in Fiscal 2024 were critical to the future success of the Company and would directly translate to building shareholder value. Importantly, the Net Sales after adjustments performance goal (used in Fiscal 2023) was replaced with Gross Profit after adjustment, due to input from shareholders providing that the latter is a better measure of Company success. In Fiscal 2024, the CEO, General Counsel, Investor Relations and the Lead Independent Director and other directors reached out to shareholders representing the majority of ownership and receiving feedback from most. They exchanged perspectives with the shareholders and listened carefully to their concerns. We heard that shareholders want incentive compensation directly tied to financial results, and the blueprint to implement ESG disclosure to better capture the benefits of remanufacturing in general and MPA specifically. As a direct result of shareholder feedback:
Engagement with Shareholders
| (a) emphasized the requirement of shareholder return metrics utilized by the Company and individual portion of our Annual Cash Incentive Plan in Fiscal 2022, and increased the weighting of such shareholder focused return metrics in Fiscal 2023 as well as Fiscal 2024; |
Engagement with Shareholders
| (b) made stock price performance goals the only metrics for all the Fiscal 2024 grants of long-term PSUs vesting over three years; and |
Engagement with Shareholders
| (c) did not extend the CEO’s right to an annual performance-based Restricted Stock award under the terms of his Employment Agreement, which therefore provides more flexibility to grant other performance-based awards to the CEO. |
Engagement with Shareholders
Annual Cash Incentive Plan. Historically, each year we administer a cash-based incentive compensation program that aims to reward our named executive officers for the achievement of key financial (80%) and individual (20%) performance goals. However, in Fiscal 2024, the Compensation Committee determined that the named executive officers should be wholly focused as “One Team” on achieving the Company Performance Goals and removed the individual performance component from our cash-based incentive compensation program. 100% of the named executive officers’ target bonus opportunity was based on the following Company performance-based metrics (and their weightings): (1) Cash from Operating Activities (50%), (2) EBITDA after adjustments, (25%), which is calculated as earnings before interest expense, income tax expense, depreciation and amortization and other adjustments described in our earnings releases attached as exhibits to the Company’s Reports on Form 8-K reporting the Company’s results of operations and financial condition for the applicable fiscal year as filed with the SEC, and (3) Gross Profit after adjustments (25%), which means the Company’s gross profit as calculated including items impacting the results as described in the Company’s earnings releases filed with the SEC on Form 8-K (collectively, the “Company Performance Goals”). The Company Performance Goals were established by the Compensation Committee following its review of the Company’s strategic initiatives and budget and are shown in the chart below. It should be noted that the Cash from Operating Activities goal in Fiscal 2024, was set lower than the same goals in Fiscal 2023, but much higher than actual achievement in Fiscal 2023. The Board approves a strategic business plan and puts into place targets that they believe will drive shareholder value. The Compensation Committee then creates goals, considering its analysis of the current state of the overall economy, our industry’s outlook and the Company budget, to strengthen the Company’s financials and ultimately create shareholder value. The Board and Compensation Committee strive to set meaningful goals that give our named executive officers the opportunity to positively affect the Company and increase the stock price. The actual numbers for each goal’s threshold, target and maximum were chosen based on the approved Company budget. The target for each goal equates to the Company budget and the threshold and maximum are a percentage below and above said target. The Compensation Committee changed the third goal from Net Sales after adjustments to Gross Profit after adjustments to focus the Company and its executives on the creation of profitable sales and growing our margins. Though the Company increased our sales, margin and gross profit over the prior year on an adjusted basis, the Company did not meet its threshold goals for gross profit and EBITDA, due to softness of demand in the market, in the fourth quarter of Fiscal 2024, even though the Company implemented successful cost controls in SG&A.
Company Performance Goal
| | % of Company Performance Goal Target Bonus | Threshold (50%) | Target (100%) | Maximum (150%) | | EBITDA after Adjustments | 25% weight | $93,130,000 | $95,885,000 | $98,640,000 | | Gross Profit after Adjustments | 25% weight | $165,507,000 | $169,045,000 | $172,583,000 | | Cash from Operating Activities | 50% weight | $17,645,000 | $19,536,000 | $21,427,000 |
Company Performance Goal
| | % of Company Performance Goal Target Bonus | Actual | % of Target Reached | Bonus | | EBITDA after Adjustments | 25% weight | $84,233,000 | 0% | 0% | | Gross Profit after Adjustments | 25% weight | $156,339,000 | 0.0% | 0% | | Cash from Operating Activities | 50% weight | $39,172,000 | 150% | 75% |
Company Performance Goal
The named executive officers received credit for 75% of the Company Performance Goals (50% weighting x 150% maximum goal multiplier), as the Company met 183% of its Cash from Operating Activities performance goal, representing 83% above the Maximum goal. In a year where the Company meets at least 50% of the Company Performance Goals, in alignment with the threshold percentage, each named executive officer is eligible to receive payment with respect to a Company Performance Goal provided the Company achieved that goal at the threshold amount or above (the “Threshold Goal”). If the Company’s actual performance was lower or higher than the target amount established for the relevant metric the bonus earned with respect to that goal was interpolated between either the threshold and the target amounts (50% and 100%) or the target amount and the maximum amount (100% and 150%) for each goal, multiplied by the percentage weighting for that goal. The following table sets forth each named executive officer’s aggregate cash-based incentive opportunity and actual incentive payment in Fiscal 2024.
Company Performance Goal
Equity-Based Incentive Program. The goal of our long-term, equity-based incentive awards is to align the interests of our named executive officers with the interests of our shareholders. Because vesting is generally based on continued service, in addition to performance-based metrics in most cases, our equity-based incentives also encourage the retention of our named executive officers during the award vesting period. In determining the mix of equity and size of awards to be granted to our named executive officers, we consider the value of equity awards issued by peer group companies, the total value of the compensation opportunity afforded to each named executive officer, and the individual’s position, scope of responsibility, and ability to affect profits and shareholder value. In line with shareholder recommendations, in Fiscal 2022, WTW recommended including in the total equity awards granted to our named executive officers a multi-year performance-based equity award. Since Fiscal 2022 we have continued to follow this recommendation.
Fiscal 2024 Equity Grants
Fiscal 2024 Equity Grants In Fiscal 2024, the Company granted to all of our named executive officers long-term PSUs, vesting 100% on absolute total shareholder return, as well as time-based stock options to Mr. Joffe, Mr. Lee and Mr. Shah. The following table sets forth the number of shares and grant date fair value of the equity awards granted to the named executive officers in Fiscal 2024.
Fiscal 2024 Equity Grants
| Named Executive Officer | Stock Options | Grant Date Fair Value of Stock Options | Long-term Performance - based Restricted Stock Units | Grant Date Fair Value of Long-term Performance - based Restricted Stock Units | | Selwyn Joffe | 83,700 | $313,875 | 139,953 | $588,269 | | David Lee | 20,900 | $78,375 | 52,265 | $219,687 | | Doug Schooner | — | $— | 20,325 | $85,433 | | Kamlesh Shah | 4,700 | $17,625 | 26,132 | $109,842 | | Juliet Stone | — | $— | 34,843 | $146,457 |
Fiscal 2024 Equity Grants
In June 2023, the Compensation Committee approved PSU awards to our named executive officers that vest based on the achievement of an absolute shareholder return performance goal to align management with our shareholders’ interests. PSU awards granted in Fiscal 2024 were comprised of three performance-vesting tranches under which 1/3 of the target PSUs may be eligible to vest, including the (i) achievement of a $10 stock price target (49.7% increase from stock price at grant), (ii) achievement of a $15 stock price target (124.5% increase from stock price at grant), and (iii) achievement of a $15 stock price target (124.5% increase from stock price at grant), and (iii) achievement of a stock price between $17.50 and $25 (with vesting ranging between 50% and 150% of the tranche, depending on the stock price achieved between the two goals, with 100% of the tranche vesting at a $20 stock price) (199.4% increase from stock price at grant). Each performance-vesting tranche may be met over a three-year performance period, commencing June 19, 2023, and all price targets must be met for thirty consecutive trading days. In September 2023, Mr. Joffe, Mr. Lee and Mr. Shah were each granted a one-time retention stock option award. These stock options have a ten-year term and were granted with a premium exercise price of $9.32 per share, as opposed to an exercise price of $7.41 which was the closing price of our common stock on the date of grant. These options will vest over a three-year period, with 1/3 of the stock options vesting on the first, second and third anniversaries of the grant date, subject to continued employment. For a description of the accelerated vesting applicable to our named executive officers’ stock awards, see “Employment Agreements” and “Potential Payments Upon Termination or Change in Control Table” below.
Achievement of 2023 Performance-based Restricted Stock Awards
Achievement of 2023 Performance-based Restricted Stock Awards Mr. Joffe’s performance-based Fiscal Year 2023 restricted stock award, granted on June 20, 2022, vested below the target of 66,667 shares, at 27.058% of the maximum, and 27,508 shares of stock vested on June 20, 2023.
Accounting Considerations
Accounting Considerations ASC Topic 718, Compensation-Stock Compensation, or ASC Topic 718 requires us to recognize an expense for the fair value of equity-based compensation awards. Grants of stock options and restricted stock under our equity incentive award plans are accounted for under ASC Topic 718. The Compensation Committee regularly considers the accounting implications of significant compensation decisions, especially in connection with decisions that relate to our equity incentive award plans and programs. As accounting standards change, we may revise certain programs to appropriately align accounting expenses of our equity awards with our overall executive compensation philosophy and objectives.
Summary Compensation Table
Summary Compensation Table The following table sets forth information concerning Fiscal 2024, 2023, and 2022 compensation of our named executive officers.
Summary Compensation Table
| Name & Principal Position | Fiscal Year | Salary(1) | Bonus(2) | Stock Awards(3) | Options Awards(3) | Non-Equity Incentive Plan Compensation(4) | All Other Compensation(5) | Total | | Selwyn Joffe Chairman of the Board, President and CEO | 2024 | $828,256 | $100 | $588,269 | $313,875 | $745,430 | $50,132 | $2,526,062 | | | 2023 | 828,256 | 100 | 1,909,131 | — | — | 93,264 | 2,830,752 | | | 2022 | 809,722 | 100 | 2,396,227 | — | 1,011,408 | 117,191 | 4,334,649 | | David Lee Chief Financial Officer | 2024 | $361,746 | $100 | $219,687 | $78,375 | $149,220 | $41,323 | $850,451 | | | 2023 | 361,746 | 100 | 338,649 | — | — | 83,874 | 784,370 | | | 2022 | 334,913 | 100 | 353,117 | — | 200,200 | 76,857 | 965,188 | | Doug Schooner Chief Manufacturing Officer, SVP, Operations Under-the-Car Product Lines | 2024 | $424,570 | $100 | $85,433 | $— | $111,450 | $41,613 | $663,166 | | | 2023 | 423,628 | 100 | 128,594 | — | — | 85,513 | 637,835 | | | 2022 | 404,427 | 100 | 192,950 | — | 145,411 | 78,935 | 821,824 | | Kamlesh Shah Chief Accounting Officer | 2024 | $300,446 | $100 | $109,842 | $17,625 | $90,134 | $29,089 | $547,236 | | Juliet Stone Vice President, Secretary and General Counsel | 2024 | $344,500 | $100 | $146,457 | $— | $103,350 | $41,243 | $635,650 | | | 2023 | 344,500 | 100 | 210,026 | — | — | 90,390 | 645,016 | | | 2022 | 327,250 | 100 | 186,264 | — | 102,763 | 84,614 | 700,991 |
Summary Compensation Table
| (1) Salaries reflect actual amounts earned and paid with respect to services in Fiscal 2024. Mr. Joffe’s salary includes $24,000 to pay for disability insurance, as discussed in his CEO Employment Agreement. |
Summary Compensation Table
| (2) Amounts in the “Bonus” column include a $100 bonus paid to each of the Company’s employees during December of each year, including the named executive officers, as a holiday gift to buy groceries. |
Summary Compensation Table
| (3) Amounts for 2024 reflect the grant date fair value of PSUs awarded in Fiscal 2024 to each named executive officer (and, with respect to Mr. Joffe, Mr. Lee and Mr. Shah, stock options), each calculated in accordance with FASB ASC Topic 718, rather than the amounts paid to or realized by the named executive officer. The PSUs are subject to market conditions. With respect to the market conditions relative to the PSUs, the amounts in the table represent the grant date fair value calculated using a Monte Carlo simulation. We provide information regarding the assumptions used to calculate the value of stock awards and stock options made to the named executive officers in Notes 2 and 18 to the Company’s consolidated financial statements contained in its Annual Report on Form 10-K filed on June 11, 2024. For more detail on these awards, see “Compensation Discussion and Analysis—Determining Executive Compensation—Equity-Based Incentive Programs.” |
Summary Compensation Table
| (4) Additionally, for Fiscal 2024, our Compensation Committee removed the individual performance component such that 100% of each named executive officers’ target cash-based incentive award opportunity was based solely on corporate objectives. Each of these measures is contained in the Company’s 8-K filing, of the press release to our earnings release made on June 11, 2024. |
Summary Compensation Table
| (5) The following chart is a summary of the items that are included in the “All Other Compensation” totals for Fiscal 2024: |
Summary Compensation Table
| Name | Automobile Expenses | Insurance Premiums(1) | 401K Employer's Contribution | Deferred Compensation Plan Employer's Contribution | Total | | Selwyn Joffe | $18,000 | $26,315 | $3,906 | $1,911 | $50,132 | | David Lee | $— | $39,653 | $1,670 | $— | $41,323 | | Doug Schooner | $— | $39,653 | $1,960 | $— | $41,613 | | Kamlesh Shah | $— | $26,315 | $1,387 | $1,387 | $29,089 | | Juliet Stone | $— | $39,653 | $1,590 | $— | $41,243 |
Summary Compensation Table
| (1) For all our named executive officers, these premiums include premiums for health insurance. |
Fiscal 2024 Grants of Plan-Based Awards
Fiscal 2024 Grants of Plan-Based Awards
Fiscal 2024 Grants of Plan-Based Awards
| | | Estimated future payouts under non-equity incentive plan awards | | | Estimated future payouts under equity incentive plan awards(1) | | | | | | | Name | Grant Date | Threshold (50% of Target) | Target | Maximum (150% of Target) | Threshold (50%of Target) | Target | Maximum (150% of Target) | All Other Option Awards: Number of Securities Underlying Options(2) | Exercise or Base Price of Option Awards | Grant Date Fair Value of Stock and Option Awards(3) | | Selwyn Joffe | 06/19/2023 | | | | 23,326 | 139,953 | 69,977 | | | $588,269 | | Selwyn Joffe | 09/21/2023 | | | | | | | 83,700 | $9.32 | $313,875 | | Selwyn Joffe | 06/07/2023 | $496,954 | $993,907 | $1,490,861 | | | | | | | | David Lee | 06/19/2023 | | | | 8,711 | 52,265 | 26,133 | | | $219,687 | | David Lee | 09/21/2023 | | | | | | | 20,900 | $9.32 | $78,375 | | David Lee | 06/07/2023 | $99,480 | $198,960 | $298,440 | | | | | | | | Doug Schooner | 06/19/2023 | | | | 3,388 | 20,325 | 10,163 | | | $85,433 | | Doug Schooner | 06/07/2023 | $74,300 | $148,599 | $222,899 | | | | | | | | Kamlesh Shah | 06/19/2023 | | | | 4,355 | 26,132 | 13,066 | | | $109,842 | | Kamlesh Shah | 09/21/2023 | | | | | | | 4,700 | $9.32 | $17,625 | | Kamlesh Shah | 06/07/2023 | $60,089 | $120,178 | $180,267 | | | | | | | | Juliet Stone | 06/19/2023 | | | | 5,807 | 34,843 | 17,422 | | | $146,457 | | Juliet Stone | 06/07/2023 | $68,900 | $137,800 | $206,700 | | | | | | |
Fiscal 2024 Grants of Plan-Based Awards
| (1) Except as otherwise noted, represents awards of PSUs that vest, subject to continued employment, if the Company's average closing stock price over 30 consecutive trading days equals or exceeds the stock price hurdle over a three-year period commencing on June 19, 2023. For more information, see “Compensation Discussion and Analysis—Determining Executive Compensation—Equity-Based Incentive Program.” |
Fiscal 2024 Grants of Plan-Based Awards
| (2) Represents awards of stock options that vest over a three-year period, subject to continued employment. For more information see “Compensation Discussion and Analysis—Determining Executive Compensation—Equity-Based Incentive Program.” |
Fiscal 2024 Grants of Plan-Based Awards
| (3) Amounts shown represent the grant date fair value calculated in accordance with ASC 718. The assumptions used with respect to the valuation of the equity awards are set forth in Notes 2 and 18 to the consolidated financial statements included in our Annual Report on Form 10-K, filed with the SEC on June 11, 2024. The PSUs are subject to market conditions and the amounts in the table represent the grant date fair value calculated using a Monte Carlo simulation. |
Outstanding Equity Awards at Fiscal Year End
Outstanding Equity Awards at Fiscal Year End The following table summarizes information regarding equity awards granted to our named executive officers that remain outstanding as of March 31, 2024. Unless as otherwise noted below, all awards were granted under the Company’s 2022 Incentive Award Plan (“2022 Plan”).
Outstanding Equity Awards at Fiscal Year End
| | Option Awards | | | | | Stock Awards | | Stock Awards | | | Name | Number of Securities Underlying Unexercised Options (#) Exercisable Vested | Number of Securities Underlying Unexercised Options (#) Unexercisable Unvested | Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock Unvested (#) | Market Value of Shares or Units of Stock Unvested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, or Other Rights That Have Not Vested ($) | | Selwyn Joffe | | | | | | | | | | | | 26,200 | — | — | $31.13 | 09/03/2025 | | | | | | | 51,200 | — | — | $28.68 | 06/23/2026 | | | | | | | 54,800 | — | — | $27.40 | 06/19/2027 | | | | | | | 83,400 | — | — | $19.00 | 06/17/2028 | | | | | | | 88,875 | — | | $19.93 | 07/01/2029 | | | | | | | 33,791 | — | | $15.12 | 06/16/2030 | | | | | | | — | 83,700(1) | — | $9.32 | 09/20/2033 | | | | | | | | | | | | 6,683(2) | $53,731 | | | | | | | | | | 25,374(3) | $204,007 | | | | | | | | | | | | 9,023(4) | $72,545 | | | | | | | | | | 38,061(5) | $306,010 | | | | | | | | | | 139,953(6) | $1,125,222 | | David Lee | | | | | | | | | | | | 9,300 | — | — | $22.93 | 06/21/2024 | | | | | | | 6,500 | — | — | $31.13 | 09/03/2025 | | | | | | | 10,800 | — | — | $28.68 | 06/23/2026 | | | | | | | 9,200 | — | — | $27.40 | 06/19/2027 | | | | | | | 14,000 | — | — | $19.00 | 06/17/2028 | | | | | | | 14,875 | — | | $19.93 | 07/01/2029 | | | | | | | 5,656 | — | | $15.12 | 06/16/2030 | | | | | | | — | 20,900(1) | — | $9.32 | 09/20/2033 | | | | | | | | | | | | 2,589(2) | $20,816 | | | | | | | | | | 8,317(3) | $66,869 | | | | | | | | | | | | 3,495(4) | $28,100 | | | | | | | | | | 12,476(5) | $100,307 | | | | | | | | | | 52,265(6) | $420,211 | | Doug Schooner | | | | | | | | | | | | 6,400 | — | — | $22.93 | 06/21/2024 | | | | | | | 5,600 | — | — | $31.13 | 09/03/2025 | | | | | | | 9,000 | — | — | $28.68 | 06/23/2026 | | | | | | | 7,100 | — | — | $27.40 | 06/19/2027 | | | | | | | 5,000 | — | — | $19.00 | 06/17/2028 | | | | | | | 6,250 | — | | $19.93 | 07/01/2029 | | | | | | | 2,376 | — | | $15.12 | 06/16/2030 | | | | | | | | | | | | 1,415(2) | $11,377 | | | | | | | | | | 3,159(3) | $25,398 | | | | | | | | | | | | 1,910(4) | $15,356 | | | | | | | | | | 4,737(5) | $38,085 | | | | | | | | | | 20,325(6) | $163,413 |
Outstanding Equity Awards at Fiscal Year End
| | Option Awards | | | | | Stock Awards | | Stock Awards | | | Name | Number of Securities Underlying Unexercised Options (#) Exercisable Vested | Number of Securities Underlying Unexercised Options (#) Unexercisable Unvested | Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock Unvested (#) | Market Value of Shares or Units of Stock Unvested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, or Other Rights That Have Not Vested ($) | | Kamlesh Shah | | | | | | | | | | | | 2,100 | — | — | $22.93 | 06/21/2024 | | | | | | | 1,500 | — | — | $31.13 | 09/03/2025 | | | | | | | 3,000 | — | — | $28.68 | 06/23/2026 | | | | | | | 3,300 | — | | $27.40 | 06/19/2027 | | | | | | | 5,000 | — | | $19.00 | 06/17/2028 | | | | | | | 5,313 | — | | $19.93 | 07/01/2029 | | | | | | | 7,129 | — | | $15.12 | 06/16/2030 | | | | | | | — | 4,700(1) | — | $9.32 | 09/20/2033 | | | | | | | | | | | | 1,069(2) | $8,595 | | | | | | | | | | 3,475(3) | $27,939 | | | | | | | | | | | | 1,443(4) | $11,602 | | | | | | | | | | 5,213(5) | $41,913 | | | | | | | | | | 26,132(6) | $210,101 | | Juliet Stone | | | | | | | | | | | | 14,300 | — | — | $17.12 | 09/10/2029 | | | | | | | 7,129 | — | | $15.12 | 06/16/2030 | | | | | | | | | | | | 1,366(2) | $10,983 | | | | | | | | | | 5,159(3) | $41,478 | | | | | | | | | | | | 1,844(4) | $14,826 | | | | | | | | | | 7,737(5) | $62,205 | | | | | | | | | | 34,843(6) | $280,138 |
Outstanding Equity Awards at Fiscal Year End
| (1) This award vests in three equal annual installments beginning on the first anniversary of the September 21, 2023 grant date, subject to continued employment through the applicable vesting date. |
Outstanding Equity Awards at Fiscal Year End
| (2) This award was granted under the Company’s Fourth Amended and Restated 2010 Incentive Award Plan (the “2010 Plan”) and vests in three equal annual installments beginning on the first anniversary of the June 18, 2021 grant date, subject to continued employment through the applicable vesting dates. |
Outstanding Equity Awards at Fiscal Year End
| (3) This award was granted under the 2010 Plan and vests in three equal annual installments beginning on the first anniversary of the June 20, 2022 grant date, subject to continued employment through the applicable vesting dates. |
Outstanding Equity Awards at Fiscal Year End
| (4) Represents PSUs granted under our 2010 Plan on June 18, 2021 that will vest upon the attainment of pre-determined performance metrics at the conclusion of a three-year performance period, subject to continued employment. In accordance with SEC rules, the number of PSUs shown represents the number of PSUs that may be earned based on target performance. These awards vested on June 18, 2024 based on the achievement of 45% of the target performance. |
Outstanding Equity Awards at Fiscal Year End
| (5) Represents PSUs granted under our 2010 Plan on June 20, 2022 that will vest upon the attainment of pre-determined performance metrics at the conclusion of a three-year performance period, subject to continued employment. In accordance with SEC rules, the number of PSUs shown represents the number of PSUs that may be earned based on target performance. We are currently estimating that this award will vest at 100%. |
Outstanding Equity Awards at Fiscal Year End
| (6) Represents PSUs granted on June 19, 2023 that will vest if the Company's average closing stock price over 30 consecutive trading days equals or exceeds the stock price hurdle over a three-year period, subject to continued employment. In accordance with SEC rules, the number of PSUs shown represents the number of PSUs that may be earned based on target performance. We are currently estimating that this award will vest at 100%. |
Option Exercises and Stock Vested
Option Exercises and Stock Vested The following table sets forth information regarding stock awards vested during Fiscal Year 2024 for the named executive officers:
Option Exercises and Stock Vested
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise | Value Realized on Exercise | Number of Shares Acquired on Vesting | Value Realized on Vesting | | Selwyn Joffe | — | $— | 62,064 | $404,254 | | David Lee | — | $— | 9,365 | $61,477 | | Doug Schooner | — | $— | 4,093 | $26,931 | | Kamlesh Shah | — | $— | 3,907 | $25,647 | | Juliet Stone | — | $— | 5,044 | $33,023 |
Option Exercises and Stock Vested
Nonqualified Deferred Compensation Plan We maintain the Motorcar Parts of America, Inc. Amended and Restated Executive Deferred Compensation Plan (the “DCP”), an unfunded, non-qualified deferred compensation plan for a select group of management or highly compensated employees, including our named executive officers. Participants in the plan may elect to defer up to 100% of their gross cash compensation. We made matching contributions of 100% of each participant’s elective contributions to the plan, up to 3% of the participant’s compensation for the plan year. The Company temporally halted the Company match of deferred compensation as of February 5, 2023 and reinstated such match as of February 8, 2024. The plan is designed to defer taxation to the participant on contributions and notional earnings thereon until distribution thereof in accordance with a participant’s previously made distribution elections. Insurance annuity contracts provide funding for the plan; however, the annuity contracts are owned by us and remain subject to claims of our general creditors. The following table sets forth certain information regarding contributions, earnings and account balances under our DCP, which provides for the deferral of compensation on a basis that is not-tax qualified, for each of the named executive officers for Fiscal 2024. Plan participants may elect to receive distributions under the DCP as lump sums or in installments. Mr. Joffe has elected to receive lump sum distributions in the case of death, disability or separation of service. Mr. Shah has elected to receive a lump-sum payment upon separation, change of control or disability. Ms. Stone has elected to receive payments over a two year period when she turns 55 years of age. A description of the other material terms and conditions of the DCP follows. Messrs. Lee and Schooner have elected not to participate in the DCP.
Option Exercises and Stock Vested
| Name | Executive Contributions in Last FY(1) | Registrant contribution in last FY(2) | Aggregate Earnings in Last FY(3) | Aggregate Withdrawals/ Distributions | Aggregate Balance at Last FY | | Selwyn Joffe | $23,892 | $1,911 | $6,374 | $— | $41,748 | | David Lee | $— | $— | $— | $— | $— | | Doug Schooner | $— | $— | $— | $— | $— | | Kamlesh Shah | $12,111 | $1,387 | $38,284 | $— | $219,424 | | Juliet Stone | $— | $— | $36,464 | $— | $199,997 |
Option Exercises and Stock Vested
| (1) Executive Contributions in Last FY, shows the amount that the named executive officer elected to defer in Fiscal 2024 under the DCP. These amounts represent compensation earned by the named executive officers in Fiscal 2024 and are therefore also reported in the appropriate column in the Summary Compensation Table above. |
Option Exercises and Stock Vested
| (2) Registrant Contributions in Last FY, shows the amounts credited in Fiscal 2024 as company contributions to the accounts of our named executive officers under the DCP. These amounts are also reported in the Summary Compensation Table above. |
Option Exercises and Stock Vested
| (3) Aggregate Earnings in Last FY, shows the net amounts credited to the DCP accounts of our named executive officer as a result of the performance of the investment vehicles in which their accounts were deemed invested. These amounts do not represent above-market earnings, and thus are not reported in the Summary Compensation Table. |
Potential Payments Upon Termination or Change in Control Table
Potential Payments Upon Termination or Change in Control Table The following table provides an estimate of the potential payments available to each named executive officer upon a change in control, assuming they were terminated on March 31, 2024, the last business day of Fiscal 2024.
Potential Payments Upon Termination or Change in Control Table
| Benefit | Termination by Company for Cause(1) | Death(2) | Disability(3) | Voluntary Termination by Mr. Joffe for Good Reason or Termination by Company w/o Cause(4) | After Change in Control: Voluntary Termination by Mr. Joffe for Good Reason or Termination w/o Cause(5) | Change in Control with Involuntary Termination | Change in Control | | Selwyn Joffe | | | | | | | | | Salary Contribution | $— | $— | $— | $1,656,512 | $1,656,512 | $— | $— | | Bonus | $— | $— | $— | $745,430 | $745,430 | $— | $— | | Executive Awards(6) | $— | $2,434,464 | $2,434,464 | $2,434,464 | $1,309,242 | $1,309,242 | $1,125,222 | | Healthcare | $— | $— | $— | $52,630 | $52,630 | $— | $— | | Automobile Allowance(7) | $— | $— | $— | $36,000 | $36,000 | $— | $— | | Equity(8) | $— | $— | $— | $— | $— | $1,309,242 | $1,125,222 | | David Lee | | | | | | | | | Equity(8) | $— | $— | $— | $— | $— | $384,127 | $420,211 | | Doug Schooner | | | | | | | | | Equity(8) | $— | $— | $— | $— | $— | $90,217 | $163,413 | | Kamlesh Shah | | | | | | | | | Equity(8) | $— | $— | $— | $— | $— | $127,836 | $210,101 | | Juliet Stone | | | | | | | | | Equity(8) | $— | $— | $— | $— | $— | $129,492 | $280,138 |
Potential Payments Upon Termination or Change in Control Table
| (1) Upon a termination for cause, Mr. Joffe will be entitled to his accrued salary, bonus, if any, reimbursable expenses, and benefits owing to him through the day of his termination. |
Potential Payments Upon Termination or Change in Control Table
| (2) Mr. Joffe’s employment term will end on the date of his death. Upon such event, Mr. Joffe’s estate will be entitled to receive his accrued salary, bonus, if any, benefits (including accrued but unused vacation time) and reimbursable expenses, owing to Mr. Joffe through the date of his death, and vested but undistributed shares of restricted stock granted. In addition, Mr. Joffe’s estate will assume Mr. Joffe’s rights under our equity incentive plans and certain of his rights under his Amended Employment Agreement. |
Potential Payments Upon Termination or Change in Control Table
| (3) If during the employment term, Mr. Joffe is terminated by us as a result of his physical or mental illness or incapacity as determined in accordance with the procedures set forth in the Amended Employment Agreement, Mr. Joffe will be entitled to receive his accrued salary, bonus, if any, reimbursable expenses, benefits owing to Mr. Joffe through the date of termination, and vested but undistributed shares of restricted stock granted. In addition, Mr. Joffe will be entitled to receive the benefits payable pursuant to a disability insurance policy purchased by Mr. Joffe with the Disability Insurance Payment. |
Potential Payments Upon Termination or Change in Control Table
| (4) Upon a termination by Mr. Joffe for good reason or by us without cause, Mr. Joffe will be entitled to receive through two years after the termination date: (i) his salary at the annual rate as in effect immediately prior to the termination date; (ii) his average bonus earned for the two years immediately prior to the year in which his employment agreement is terminated (or if such termination occurs within the first three months of our fiscal year, for the second and third years preceding the year in which such termination occurs); (iii) the Benefits; (iv) reimbursable expenses, and (v) vested but undistributed shares of common stock granted. |
Potential Payments Upon Termination or Change in Control Table
| (5) If a change in control occurs and Mr. Joffe voluntarily terminates his employment agreement for good reason or Mr. Joffe’s employment is terminated by us without cause within two years following a change in control, then Mr. Joffe will be entitled to receive either the severance benefit as described in the next sentence of this footnote or the benefits described in the immediately preceding footnote, whichever is more favorable to Mr. Joffe, and we will pay Mr. Joffe any reimbursable expenses owed to him through the termination date and vested but undistributed shares of restricted stock granted. The severance benefit will be equal to (i) two times Mr. Joffe’s salary at the annual rate in effect immediately prior to the date of the change in control plus (ii) two times Mr. Joffe’s average bonus earned for the two years immediately prior to the year in which the change in control occurs. |
Potential Payments Upon Termination or Change in Control Table
| (6) Upon the termination of his employment agreement, for any reason other than termination by us for cause or termination by Mr. Joffe without good reason, (i) any equity awards made pursuant to Paragraph 5(f) of the Amended Employment Agreement (“Executive Awards”) which are not fully vested will immediately vest and remain exercisable by Mr. Joffe for a period of two years or, if shorter, until the ten year anniversary of the date of grant of each such Executive Award and (ii) any restricted stock awards contemplated by Paragraph 5(g) of the |
Potential Payments Upon Termination or Change in Control Table
Amended Employment Agreement (such awards, together with the Executive Awards, the “Equity Awards”) (a) will vest in full based on the target level of performance for the shares granted for the then current Performance Cycle. The inherent value shown in the table is the fair value of all Equity Awards which were not fully vested at March 31, 2024, with performance-based awards vesting at target. Executive Awards include incentive stock options and nonqualified stock options, restricted stock, RSUs, performance awards, dividend equivalent rights, stock payments, deferred stock, deferred stock units, SARs and cash awards. See footnote (8) below regarding the treatment of the Executive Awards in connection with a change in control.
Potential Payments Upon Termination or Change in Control Table
| (7) Mr. Joffe is entitled to receive an automobile allowance in the amount of $1,500 per month for two years, payable monthly. In addition, all costs of operating the automobile, including fuel, oil, insurance, repairs, maintenance and other expenses, are our responsibility. |
Potential Payments Upon Termination or Change in Control Table
| (8) Under the 2022 Plan and the 2010 Plan, if a holder of equity suffers an Involuntary Termination after a Change in Control, all equity awards outstanding under such plan will vest, with performance-based awards vesting at target. Additionally, pursuant to the terms of the PSUs granted in Fiscal Year 2024, upon a change in control, a number of PSUs will vest in an amount equal to the greater of (i) the target number of PSUs and (ii) the number of PSUs that vest based on the achievement of the applicable performance goals as of the change in control date. |
Pay Ratio
Pay Ratio Pursuant to SEC rules, we are providing the following disclosure about the relationship of the annual total compensation of our median employee to the annual total compensation of our Chief Executive Officer. Ratio for Fiscal 2024 The annual total compensation of our median employee (among all employees except for our Chief Executive Officer) was $12,183.92. Our Chief Executive Officer’s annual total compensation, as reported in the Total column of the 2024 Summary Compensation Table, was $2,526,062. Based on this information, a reasonable estimate of the ratio of the annual total compensation of our Chief Executive Officer to the annual total compensation of our median employee (other than our Chief Executive Officer) was approximately 207:1. Identification of Median Employee We completed an analysis including, all Company subsidiaries, all over the world, including Asia. The population used for the pay ratio analysis was the entire global employee population as of March 31, 2024. We considered a total of 5,498 United States and non-United States employees in determining the median employee. For purposes of identifying the median employee, we utilized actual total cash compensation (as reflected in our payroll records) as the consistently applied compensation measure for all employees. All global compensation amounts were converted to USD using an average currency exchange rate over Fiscal 2024. We used a valid statistical sampling of employees that constitute a range of +/-1% around the median employee to select the actual employee represented in the ratio above. Every employee in this range worked at our Tijuana, Mexico facility.
Pay Versus Performance Table
Pay Versus Performance Table The following table sets forth information concerning the compensation of our named executive officers (NEOs) for each of the fiscal years ended March 31, 2021, 2022, 2023 and 2024, and our financial performance for each such fiscal year:
Pay Versus Performance Table
| Year | Summary Compensation Table Total for PEO ($) | Compensation Actually Paid to PEO ($)(1)(2) | Average Summary Compensation Table Total for Non-PEO NEOs ($) | Average Compensation Actually Paid to Non-PEO NEOs ($)(1)(2) | Value of Initial Fixed $100 Investment Based on: | | Net Income ($M) | Cash from Operating Activities ($M)(4) | | | | | | | Total Shareholder Return ($) | Peer Group Total Shareholder Return ($)(3) | | | | 2024 | $2,526,062 | $2,450,091 | $674,126 | $668,556 | $64 | $258 | $(49) | $39 | | 2023 | $2,830,752 | $69,201 | $630,959 | $364,826 | $59 | $234 | $(4) | $(22) | | 2022 | $4,334,649 | $3,535,526 | $776,186 | $677,328 | $142 | $222 | $7 | $(45) | | 2021 | $4,674,829 | $4,715,471 | $627,465 | $800,010 | $179 | $179 | $21 | $56 |
Pay Versus Performance Table
| (1) Amounts represent compensation actually paid to our PEO and the average compensation actually paid to our remaining NEOs for the relevant fiscal year, as determined under SEC rules (and described below), which includes the individuals indicated in the table below for each fiscal year: |
Pay Versus Performance Table
| Year | PEO | Non-PEO NEOs | | 2024 | Selwyn Joffe | David Lee, Doug Schooner, Juliet Stone, and Kamlesh Shah | | 2023 | Selwyn Joffe | David Lee, Richard Mochulsky, Doug Schooner, and Juliet Stone | | 2022 | Selwyn Joffe | David Lee, Richard Mochulsky, Doug Schooner, and Juliet Stone | | 2021 | Selwyn Joffe | David Lee, Richard Mochulsky, Doug Schooner, and Juliet Stone |
Pay Versus Performance Table
Compensation actually paid to our NEOs represents the “Total” compensation reported in the Summary Compensation Table for the applicable fiscal year, as adjusted as follows:
Pay Versus Performance Table
| | 2024 | | | Adjustments | PEO | Average Non- PEO NEOs | | Deduction for Amounts Reported under the “Stock Awards” and “Option Awards” Columns in the Summary Compensation Table for Applicable FY | $(902,144) | $(164,355) | | Increase based on ASC 718 Fair Value of Awards Granted during Applicable FY that Remain Unvested as of Applicable FY End, determined as of Applicable FY End | $1,105,681 | $205,860 | | Increase based on ASC 718 Fair Value of Awards Granted during Applicable FY that Vested during Applicable FY, determined as of Vesting Date | $0 | $0 | | Increase/deduction for Awards Granted during Prior FY that were Outstanding and Unvested as of Applicable FY End, determined based on change in ASC 718 Fair Value from Prior FY End to Applicable FY End | $(171,862) | $(33,158) | | Increase/deduction for Awards Granted during Prior FY that Vested During Applicable FY, determined based on change in ASC 718 Fair Value from Prior FY End to Vesting Date | $(107,646) | $(13,917) | | Deduction of ASC 718 Fair Value of Awards Granted during Prior FY that were Forfeited during Applicable FY, determined as of Prior FY End | n/a | n/a | | Increase based on Dividends or Other Earnings Paid during Applicable FY prior to Vesting Date | n/a | n/a | | Increase based on Incremental Fair Value of Options/SARs Modified during Applicable FY | n/a | n/a | | Deduction for Change in the Actuarial Present Values reported under the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” Column of the Summary Compensation Table for Applicable FY | n/a | n/a | | Increase for Service Cost and, if applicable, Prior Service Cost for Pension Plans | n/a | n/a | | TOTAL ADJUSTMENTS | $(75,971) | $(5,570) |
Pay Versus Performance Table
| (2) Fair value or change in fair value, as applicable, of equity awards in the “Compensation Actually Paid” columns was determined by reference to (i) for solely service-vesting RSU awards, the closing price per share on the applicable year-end date(s) or, in the case of vesting dates, the closing price per share on the applicable vesting date(s); (ii) for performance-based RSU/RS awards (excluding any market-based awards), the same valuation methodology as RS/RSU awards above except that the year-end values are multiplied by the probability of achievement of the applicable performance objective as of the applicable date; (iii) for market-based awards, the fair value calculated by a Monte Carlo simulation model as of the applicable year-end date(s), which utilizes multiple input variables, including expected volatility of our stock price and other assumptions appropriate for determining fair value, to estimate the probability of satisfying the performance objective established for the award, including the expected volatility of our stock price relative to the applicable comparative index and a risk-free interest rate derived from linear interpolation of the term structure of Treasury Constant Maturities yield rates for the applicable period and (iv) for stock options, a Black Scholes value as of the applicable year-end or vesting date(s), determined based on the same methodology as used to determine grant date fair value but using the closing stock price on the applicable revaluation date as the current market price and with an expected life set equal to the remaining life of the award in the case of underwater stock options and, in the case |
Pay Versus Performance Table
of in the money options, an expected life equal to the original ratio of expected life relative to the ten year contractual life multiplied times the remaining life as of the applicable revaluation date, and in all cases based on volatility and risk free rates determined as of the revaluation date based on the expected life period and based on an expected dividend rate of 0%. For additional information on the assumptions used to calculate the valuation of the awards, see the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended March 31, 2024 and prior fiscal years.
Pay Versus Performance Table
| (3) For the relevant fiscal year, represents the cumulative TSR (the “Peer Group TSR”) of the Zacks Retail and Wholesale Auto Parts Index. |
Pay Versus Performance Table
| (4) Cash from operating activities is a GAAP measure. An explanation of how the Company determines cash from operating activities is included in Appendix A and ties to the Company’s 8-K filing, of the press release to our earnings release made on June 11, 2024. |
Narrative Disclosure to Pay Versus Performance Table
Narrative Disclosure to Pay Versus Performance Table
Pay Versus Performance Tabular List
Pay Versus Performance Tabular List We believe the following performance measures represent the most important financial performance measures used by us to link compensation actually paid to our NEOs for the fiscal year ended March 31, 2024:
Pay Versus Performance Tabular List
| • | Cash from Operating Activities; |
Pay Versus Performance Tabular List
| • | EBITDA after adjustments; |
Pay Versus Performance Tabular List
| • | Absolute Shareholder Return; and |
Pay Versus Performance Tabular List
| • | Gross Profit after adjustments |
Pay Versus Performance Tabular List
For additional details regarding our most important financial performance measures, please see the introduction to our Compensation Discussion and Analysis (CD&A), as well as the sections titled “Actions Taken” and “Say on Pay Vote” elsewhere in this Proxy Statement.
2024 Director Compensation
2024 Director Compensation We use a combination of cash and equity incentives to compensate our non-employee directors. Directors who are also our employees received no compensation for their service on our Board of Directors in Fiscal 2024. To determine the appropriate level of compensation for our non-employee directors, we take into consideration the significant amount of time and dedication required by the directors to fulfill their duties on our Board of Directors and Board of Directors committees as well as the need to continue to attract highly qualified candidates to serve on our Board of Directors. The information provided in the following table reflects the compensation received or earned by our directors for their service on our Board of Directors in Fiscal 2024.
2024 Director Compensation
| Name | Fees Earned or Paid in Cash | Stock Awards(1) | Reimbursement of Business Fees and Expenses(2) | Total | | Rudolph Borneo | $77,500 | $100,000 | $— | $177,500 | | David Bryan | $75,000 | $100,000 | $— | $175,000 | | Joseph Ferguson | $92,500 | $100,000 | $— | $192,500 | | Philip Gay | $82,500 | $100,000 | $— | $182,500 | | Jeffrey Mirvis | $85,000 | $100,000 | $— | $185,000 | | Jamy P. Rankin | $62,500 | $100,000 | $— | $162,500 | | Douglas Trussler… | $52,083(3) | $— | $92,145 | $144,228 | | Patricia Warfield | $62,500 | $100,000 | $— | $162,500 | | Barbara L. Whittaker | $72,500 | $100,000 | $— | $172,500 |
2024 Director Compensation
| (1) Award amounts represent the aggregate grant date fair value of the awards during Fiscal 2024. We provide information regarding the assumptions used to calculate all awards made to non-employee directors in Note 2 to the Company’s consolidated financial statements contained in its Annual Report on Form 10-K filed on June 11, 2024. These awards vest on the anniversary date of the grant. As of March 31, 2024, (i) each of the non-employee directors, other than Mr. Trussler, who did not hold any unvested stock awards, held 12,578 unvested shares subject to stock awards and (ii) none of the non-employee directors held unvested option awards. Mr. Trussler waived receipt of his annual equity award in Fiscal 2024. |
2024 Director Compensation
| (2) Represents reimbursement of business expenses (professional fees and travel expenses) to Bison Capital Partners related to Mr. Trussler’s service on the Board. |
2024 Director Compensation
| (3) Represents cash fees paid to Mr. Trussler for his service on the Board through March 31, 2024. |
2024 Director Compensation
In Fiscal 2022, the Compensation Committee engaged WTW to complete an assessment of our Board of Director compensation package and they made certain recommendations as to changes in cash and equity which we implemented. Starting on September 13, 2021, each of our non-employee directors received annual compensation of $62,500 with no additional fees for attending Board of Directors or committee meetings. In addition, we pay: (i) Mr. Gay an additional $20,000 per year as Chair of our Audit Committee, (ii) Mr. Borneo an additional $15,000 per year as Chair of our Compensation Committee, (iii) Ms. Whittaker an additional $10,000 per year as Chair of our Nominating and Corporate Governance Committee, and (iv) Mr. Ferguson an additional $20,000 per year as lead independent director. Non-Chair members of each committee receive the following retainer for their annual membership: Audit Committee: $10,000, Compensation Committee: $7,500 and Nominating and Corporate Governance Committee: $5,000. In addition, each director is reimbursed for reasonable out-of-pocket expenses incurred to attend Board of Directors or Board of Directors committee meetings. As of September 13, 2021, the Company no longer grants equity to directors upon their appointment to the Board of Directors, but increased the annual grant of RSUs from a grant date fair value of $65,000 to $100,000 for each year of service on our Board of Directors.