DEF 14A of RPM International Inc/De/
Filed Aug 22, 2024 · FY20240001140361-24-038170
Overall Compensation Program Principles
Overall Compensation Program Principles Pay for performance – The Company’s general compensation philosophy is performance-based in that the Company’s executive officers should be well compensated for achieving strong operating and financial results. The Company engages in a rigorous process intended to provide its executive officers a fair level of compensation that reflects the Company’s positive operating financial results, the relative skills and experience of the individuals involved, Compensation Peer Group compensation levels and other similar benchmarks. Compensation weighted toward at-risk pay – The mix of compensation of the Company’s named executive officers is weighted toward at-risk pay (consisting of cash and equity compensation). Maintaining this pay mix results in a pay-for-performance
Overall Compensation Program Principles
orientation, which aligns to the Company’s compensation philosophy of paying total direct compensation that is competitive with peer group levels based on relative company performance. For fiscal 2024, 59% of the earned amounts of the principal compensation components for our named executive officers in the aggregate was variable and tied to our performance. Compensation Benchmark Study – In 2024, the Compensation Committee retained the professional consulting firm of Willis Towers Watson to conduct an executive compensation benchmark study. Based on its analysis and findings, Willis Towers Watson concluded that our Chief Executive Officer’s target total direct compensation was slightly lower than the 50th percentile with a large portion of compensation linked to performance-based equity. Overall, our named executive officers’ salaries and total target cash compensation are generally below the market median, and their long-term incentives and total direct compensation are generally at or above the market median.
Summary of Compensation Paid to Frank C. Sullivan, the Company’s Chief Executive Officer, in Fiscal 2024
| • | Annual cash incentive compensation – Annual cash incentive compensation of $1,580,000, which was $460,000 more than his fiscal 2023 annual cash incentive compensation. |
Summary of Compensation Paid to Frank C. Sullivan, the Company’s Chief Executive Officer, in Fiscal 2024
| • | Equity compensation – Mr. Sullivan received 11,140 Performance Earned Restricted Stock (“PERS”) for fiscal 2024. |
Proposal Two – Election of Directors (see pages 13 – 16)
Proposal Two – Election of Directors (see pages 13 – 16) The Board of Directors has nominated three candidates for election to serve in Class II of the Board. The Board recommends that stockholders vote FOR the election of each nominee.
Proposal Two – Election of Directors (see pages 13 – 16)
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ELECTION OF DIRECTORS
ELECTION OF DIRECTORS The authorized number of Directors of the Company presently is fixed at 11, with the Board of Directors divided into three Classes. Currently, each of Class I and Class II has four Directors, and Class III has three Directors. John M. Ballbach, a Director in Class II, will retire as a Director effective as of the expiration of his term at this year’s Annual Meeting and after six years of service on the Board of Directors. Upon Mr. Ballbach’s retirement, the authorized number of Directors of the Company will be fixed at ten. If Proposal One is approved by the Company’s stockholders:
ELECTION OF DIRECTORS
| • | the classification of the Board of Directors will be phased out over the next three Annual Meetings, such that (i) at the Annual Meeting, each of the Directors in Class II will be elected to hold office for a term of one year, (ii) at the 2025 Annual Meeting of Stockholders, each of the Directors in Class I and Class II will be elected to hold office for a term of one year, and (iii) at the 2026 Annual Meeting of Stockholders, each of the Directors in Class I, Class II and Class III will be elected to hold office for a term of one year, and thereafter the classification of the Board of Directors will terminate in its entirety, and |
ELECTION OF DIRECTORS
| • | the term of office of the persons elected as Directors in Class II at this year’s Annual Meeting will expire at the time of the 2025 Annual Meeting of Stockholders. |
ELECTION OF DIRECTORS
If Proposal One is not approved by the Company’s stockholders:
ELECTION OF DIRECTORS
| • | the term of office of one Class of Directors will expire each year, and at each Annual Meeting of Stockholders the successors to the Directors of the Class whose term is expiring at that time will continue to be elected to hold office for a term of three years, and |
ELECTION OF DIRECTORS
| • | the term of office of the persons elected as Directors in Class II at this year’s Annual Meeting will expire at the time of the 2027 Annual Meeting of Stockholders. |
ELECTION OF DIRECTORS
Each Director in Class II will serve until the expiration of such Director’s term or until his or her successor shall have been duly elected. The Board of Directors’ nominees for election as Directors in Class II are Bruce A. Carbonari, Jenniffer D. Deckard and Salvatore D. Fazzolari. Ms. Deckard and Messrs. Carbonari and Fazzolari currently serve as Directors in Class II. The Proxy holders named in the accompanying Proxy (or their substitutes) will vote such Proxy at the Annual Meeting or any adjournment or postponement thereof for the election of the three nominees unless the stockholder instructs, by marking the appropriate space on the Proxy, that authority to vote is withheld. If any nominee becomes unavailable for election (which is not now contemplated or foreseen), it is intended that the shares represented by the Proxy will be voted for a substitute nominee named by the Board of Directors. In no event will the accompanying Proxy be voted for more than three nominees or for persons other than those named below or any substitute nominee.
ELECTION OF DIRECTORS
| Your Board recommends a vote “FOR” each director nominee. | | Class II Director Nominees • Bruce A. Carbonari • Jenniffer D. Deckard • Salvatore D. Fazzolari | | All currently serve as Directors in Class II. |
ELECTION OF DIRECTORS
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Nominees for Election
Nominees for Election
Nominees for Election
| Bruce A. Carbonari Director since 2002 Age: 68 Committees: Executive, Governance and Nominating Class: Class II Director Nominee Shares of Common Stock beneficially owned: 42,521 | Experience Retired Chair and Chief Executive Officer, Fortune Brands, Inc., a diversified consumer products company. Prior to his retirement, Mr. Carbonari served as the Chair and Chief Executive Officer of Fortune Brands from 2008 to 2011, and as its President and Chief Executive Officer from 2007 to 2008. Previously, he held positions with Fortune Brands business unit, Fortune Brands Home & Hardware LLC, as Chair and Chief Executive Officer from 2005 until 2007 and as President and Chief Executive Officer from 2001 to 2005. Mr. Carbonari was the President and Chief Executive Officer of Fortune Brands Kitchen and Bath Group from 1998 to 2001 and was previously the President and Chief Executive Officer of Moen, Inc. from 1990 to 1998. Prior to joining Moen in 1990, Mr. Carbonari was Executive Vice President and Chief Financial Officer of Stanadyne, Inc., Moen’s parent company at that time. He began his career at PricewaterhouseCoopers prior to joining Stanadyne in 1981. | | | | | Reasons for Nomination The Board of Directors has determined that Mr. Carbonari should serve as a Director because of his extensive executive management experience, including his service as Chair and Chief Executive Officer of Fortune Brands, Inc. In that position, Mr. Carbonari dealt with many of the major issues, such as financial, strategic, technology, compensation, management development, acquisitions, capital allocation, government and stockholder relations, that the Company deals with today. | Key Skills • Financial • Strategic • Technology • Compensation • Management Development | • Acquisitions • Capital Allocation • Government and Stockholder Relations |
Nominees for Election
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Nominees for Election
| Jenniffer D. Deckard Director since 2015 Age: 58 Committee: Audit Class: Class II Director Nominee Shares of Common Stock beneficially owned: 14,845 | Experience Chief Finance and Administrative Officer of The Sisters of Notre Dame of the United States (“SND”). The SND is a community of religious women whose ministries include, but are not limited to, the founding and serving of dozens of faith-based educational institutions from pre-schools to a college, multiple faith-based retirement communities and a hospital. Ms. Deckard is the first lay person to manage finances, administration and operations for the SND. Former President and Chief Executive Officer of Covia Holdings Corporation, a leading provider of minerals and materials solutions for the industrial and energy markets (formerly, NYSE: CVIA). Ms. Deckard also served as a director on Covia’s board of directors from 2018 until May 2019. Covia filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code in June 2020. Ms. Deckard previously served as President, Chief Executive Officer and director of Fairmount Santrol Holdings Inc. from 2013 until 2018, when Fairmount Santrol and Unimin Corporation merged to form Covia. Previously, Ms. Deckard served as Fairmount Santrol’s President from 2011 until 2013, Vice President of Finance and Chief Financial Officer from 1999 until 2011, Corporate Controller from 1996 to 1999 and Accounting Manager from 1994 until 1996. Ms. Deckard also serves on the board of the Great Lakes Construction Company, an Ohio-based heavy civil engineering and construction company, where Ms. Deckard serves on the board’s investment, audit and ESOP advisory committees. Ms. Deckard also serves on the non-profit boards of the University Hospitals and the Edwins Foundation, serving on the finance committee for University Hospitals. Ms. Deckard received a bachelor of science from the University of Tulsa and a M.B.A. degree from Case Western Reserve University. | | | | | Reasons for Nomination The Board of Directors has determined that Ms. Deckard should serve as a Director because of her extensive executive management experience and financial expertise, including her service as President and Chief Executive Officer of Covia. In that position, Ms. Deckard dealt with many of the major issues, such as financial, strategic, technology, compensation, management development, acquisitions, capital allocation, government and stockholder relations, that the Company deals with today. She was integral in the creation of Fairmount Santrol’s (and later Covia’s) industry-leading sustainable development program and has significant experience in ESG-related matters. With her extensive financial background, Ms. Deckard is a financial expert for the Company’s Audit Committee. Ms. Deckard also provides the Board of Directors a valuable perspective as a member of the boards of several prominent local non-profit organizations. | Key Skills • Financial • Strategic • Technology • Compensation • Management Development | • Acquisitions • Capital Allocation • Government and Stockholder Relations |
Nominees for Election
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Nominees for Election
| Salvatore D. Fazzolari Director since 2013 Age: 72 Committees: Audit, Executive Class: Class II Director Nominee Shares of Common Stock beneficially owned: 19,549 | Experience Former Chair, President and Chief Executive Officer of Harsco Corporation (now known as Enviri Corp.), a global environmental solutions company. Mr. Fazzolari served as Chair and Chief Executive Officer of Harsco Corporation from 2008 until 2012, in addition to serving as its President from 2010 until 2012. During the course of his over 30 years of service to Harsco Corporation, Mr. Fazzolari held various other positions, including President (2006 – 2007), Chief Financial Officer (1998 – 2007) and Treasurer and Corporate Controller. Mr. Fazzolari is a certified public accountant (inactive) and a certified information systems auditor (inactive). He serves on the board of directors of Bollman Hat Company and RDG Companies (a developer, investor and general partner in real estate transactions). He previously served on the board of directors of Gannett Fleming, Inc. until December 2022. He earned his bachelor of business administration degree in accounting from Pennsylvania State University. | | | | | Reasons for Nomination The Board of Directors has determined that Mr. Fazzolari should serve as a Director because of his extensive executive management experience, including his service as Chair, President and Chief Executive Officer of Harsco Corporation. In that position, Mr. Fazzolari dealt with many of the major issues, such as financial, strategic, technology, compensation, management development, acquisitions, capital allocation, government, environmental solutions and stockholder relations, that the Company deals with today. Mr. Fazzolari has almost four decades of extensive experience in the metals and minerals markets in developing innovative solutions that significantly improve the environment. His past board service includes chairing an audit committee where he was responsible for overseeing cybersecurity matters. Also, Mr. Fazzolari has extensive global experience, and because of his considerable financial background, he is a financial expert for the Company’s Audit Committee and serves as its chair. | Key Skills • Financial • Strategic • Technology • Compensation • Management Development | • Acquisitions • Capital Allocation • Government and Stockholder Relations • Environmental Solutions |
Nominees for Election
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DIRECTORS WHOSE TERMS OF OFFICE WILL CONTINUE AFTER THE ANNUAL MEETING
DIRECTORS WHOSE TERMS OF OFFICE WILL CONTINUE AFTER THE ANNUAL MEETING
DIRECTORS WHOSE TERMS OF OFFICE WILL CONTINUE AFTER THE ANNUAL MEETING
| Kirkland B. Andrews Director since 2018 Age: 56 Committee: Audit Class: Director in Class I (term expiring in 2025) Shares of Common Stock beneficially owned: 11,628 | Experience Senior Vice President and Chief Financial Officer of Consolidated Edison, Inc. (NYSE: ED), one of the nation’s largest investor-owned energy-delivery companies (“Con Edison”), and Consolidated Edison Company of New York, Inc., since July 2024. Previously, Mr. Andrews served as Executive Vice President and Chief Financial Officer of Evergy, Inc. (NYSE: EVRG), a regulated utility holding company serving 1.6 million customers in Kansas and Missouri, from February 2021 until July 2024. From March 2020 until February 2021, Mr. Andrews had been a director of Evergy, where he was a member of the audit committee, the power delivery and safety committee, and the strategic review and operations committee. Prior to that, Mr. Andrews was Executive Vice President and Chief Financial Officer of NRG Energy, Inc. (NYSE: NRG) from 2011 until February 2021. Mr. Andrews was a director of NRG Yield, Inc. from 2012 until 2018 (when NRG Yield, Inc. became Clearway Energy, Inc.), and also served as Executive Vice President, Chief Financial Officer of NRG Yield, Inc. from 2012 to 2016. Mr. Andrews also previously served as Chief Financial Officer of GenOn Energy, Inc., a wholly-owned subsidiary of NRG, which filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code in 2017. Prior to joining NRG, he served as Managing Director and Co-Head Investment Banking, Power and Utilities – Americas at Deutsche Bank Securities from 2009 to 2011. Prior to that, he served in several capacities at Citigroup Global Markets Inc., including Managing Director, Group Head, North American Power from 2007 to 2009, and Head of Power M&A, Mergers and Acquisitions from 2005 to 2007. In his banking career, Mr. Andrews led multiple large and innovative strategic, debt, equity and commodities transactions. | | | | | Reasons for Nomination Mr. Andrews was initially appointed as a Director pursuant to the Cooperation Agreement, dated June 27, 2018, among the Company and Elliott Associates, L.P., Elliott International, L.P. and Elliott International Capital Advisors Inc. related to, among other things, appointment of additional Directors to the Board of Directors. The Board of Directors has determined that Mr. Andrews should serve as a Director because of his extensive executive management experience and his considerable financial background as Con Edison’s Senior Vice President and Chief Financial Officer. At Con Edison, Mr. Andrews deals with many of the major issues, such as financial, strategic, technology, management development, acquisitions and capital allocation, that the Company deals with today. Also, with his extensive financial background, Mr. Andrews is a financial expert for the Company’s Audit Committee. As previously disclosed in the Company’s Current Report on Form 8-K dated July 25, 2024, Mr. Andrews has informed the Board of Directors that he intends to step down as a Director before his term expires at the Annual Meeting of Stockholders in October 2025. The Board of Directors currently anticipates that the effective date of Mr. Andrews’ resignation will be at the conclusion of the Board of Directors’ regularly scheduled meeting on January 15, 2025. Mr. Andrews also will step down as a member of the Audit Committee at such time. | Key Skills • Financial • Strategic • Technology | • Management Development • Acquisitions • Capital Allocation |
DIRECTORS WHOSE TERMS OF OFFICE WILL CONTINUE AFTER THE ANNUAL MEETING
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DIRECTORS WHOSE TERMS OF OFFICE WILL CONTINUE AFTER THE ANNUAL MEETING
| General Ellen M. Pawlikowski (Retired) Director since 2022 Age: 67 Committee: Governance and Nominating Class: Director in Class I (term expiring in 2025) Shares of Common Stock beneficially owned: 3,700 | Experience Gen. Pawlikowski is a retired four-star general of the U.S. Air Force and was the third woman to achieve this rank. In her last assignment, she served as Commander, Air Force Materiel Command, Wright-Patterson Air Force Base, Ohio, from 2015 until 2018. Gen. Pawlikowski entered active duty with the Air Force in 1982, and her distinguished 36-year career spanned a wide variety of technical management, leadership, and staff positions of increasing responsibility. She commanded five times as a general officer, commanding the MILSATCOM Systems Wing, the Air Force element of the National Reconnaissance Office, the Air Force Research Laboratory, the Space and Missile Systems Center, and Air Force Materiel Command. Nationally recognized for her leadership and technical management acumen, Gen. Pawlikowski has received the Women in Aerospace Life-Time Achievement Award, the National Defense Industrial Association’s Peter B. Teets Award, and the Air Force Association Executive Management Award. She is an Honorary Fellow of the American Institute of Aeronautics and Astronautics and a member of the National Academy of Engineers. She has served as a director of RTX Corporation (formerly Raytheon Technologies Corporation) (NYSE: RTX) since 2020. She was previously a director of Raytheon Company from 2018 until 2020, Intelsat S.A. from 2019 until February 2022, and Velo3D, Inc. (NYSE: VLD) from 2022 until June 2023. | | | | | Reasons for Nomination The Board of Directors has determined that Gen. Pawlikowski should serve as a Director because of the extensive senior leadership and management experience she gained during her distinguished military career in which she ultimately became a four-star general in the U.S. Air Force. As Commander, Air Force Materiel Command, Gen. Pawlikowski commanded 80,000 personnel and managed a budget of $60 billion on an annual basis. Her responsibilities included addressing environmental, energy efficiency and conservation matters concerning U.S. Air Force operations, and Gen. Pawlikowski helped develop the U.S. Air Force’s cybersecurity plan. Her experience enables her to assist the Company with leadership development and provides a unique strategic perspective to the Company. | Key Skills • Finance • Strategic • Technology • Cybersecurity • ESG | • ESG • Management Development • Acquisitions • Capital Allocation |
DIRECTORS WHOSE TERMS OF OFFICE WILL CONTINUE AFTER THE ANNUAL MEETING
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DIRECTORS WHOSE TERMS OF OFFICE WILL CONTINUE AFTER THE ANNUAL MEETING
| Frank C. Sullivan Director since 1995 Age: 63 Committee: Executive Class: Director in Class I (term expiring in 2025) Shares of Common Stock beneficially owned: 1,361,998 | Experience Chair, President and Chief Executive Officer, RPM International Inc. Mr. Sullivan entered the University of North Carolina as a Morehead Scholar and received his B.A. degree in 1983. From 1983 to 1987, Mr. Sullivan held various commercial lending and corporate finance positions at Harris Bank and First Union National Bank prior to joining RPM as Regional Sales Manager from 1987 to 1989 at RPM’s AGR Company joint venture. In 1989, he became RPM’s Director of Corporate Development. He became a Vice President in 1991, Chief Financial Officer in 1993, Executive Vice President in 1995, President in 1999, Chief Operating Officer in 2001, Chief Executive Officer in 2002, and was elected Chair of the Board in 2008 and President in 2018. Since 2003, Mr. Sullivan has been a director of The Timken Company, a global manufacturer of engineered bearings and power transmission products (NYSE: TKR), where he serves on both Timken’s compensation committee and its nominating and corporate governance committee. He also serves on the boards of the American Coatings Association, the Cleveland Clinic, the Cleveland Rock and Roll Hall of Fame and Museum, Greater Cleveland Partnership and the Ohio Business Roundtable. | | | | | Reasons for Nomination The Board of Directors has determined that Mr. Sullivan should serve as a Director because of his role as the Company’s Chief Executive Officer, his intimate knowledge of the Company, and his experience serving as a director of another public company and non-profit organizations. The Board of Directors believes that Mr. Sullivan’s extensive experience in and knowledge of the Company’s business gained as a result of his long-time service as a member of management is essential to the Board of Directors’ oversight of the Company and its business operations. The Board of Directors also believes that continuing participation by qualified members of the Sullivan family on the Board of Directors is an important part of the Company’s corporate culture that has contributed significantly to its long-term success. | Key Skills • Finance • Strategic • Leadership and Operating Experience • Acquisitions | • Capital Allocation • Vast Knowledge of the Company • Important Part of the Company’s Corporate Culture |
DIRECTORS WHOSE TERMS OF OFFICE WILL CONTINUE AFTER THE ANNUAL MEETING
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DIRECTORS WHOSE TERMS OF OFFICE WILL CONTINUE AFTER THE ANNUAL MEETING
| Elizabeth F. Whited Director since 2021 Age: 59 Committee: Compensation Class: Director in Class I (term expiring in 2025) Shares of Common Stock beneficially owned: 4,300 | Experience Elizabeth F. Whited is president of Union Pacific Corporation, one of America’s leading transportation companies (NYSE: UNP), where her responsibilities include the strategy, workforce resources, sustainability, law, corporate relations and government affairs functions. From February 2022 until July 2023, Ms. Whited served as Union Pacific’s executive vice president – sustainability and strategy, where she helped develop and implement Union Pacific’s strategic vision and led Union Pacific’s human resources organization, pioneering efforts to provide a world-class employee experience. Ms. Whited continues to lead environmental, social and governance (“ESG”) efforts at Union Pacific and was named to Constellation Research’s “ESG 50” in 2023 in recognition of Union Pacific’s strides in sustainability. After joining Union Pacific in 1987, Ms. Whited held a variety of executive roles in strategic planning, investor relations, ESG, finance, and marketing and sales, including president of subsidiary Union Pacific Distributions Services. In 2016, she was named executive vice president and chief marketing officer, and in 2018, she was named executive vice president and human resource officer. Ms. Whited served as executive vice president – sustainability and strategy from February 2022 until she was appointed to her current role as president in July 2023. Ms. Whited holds a bachelor’s degree in business administration from the University of Iowa. | | | | | Reasons for Nomination The Board of Directors has determined that Ms. Whited should serve as a Director because of her extensive management experience, including her service as president at Union Pacific as well as her prior executive roles. In those positions, Ms. Whited has dealt with many of the major issues, such as sustainability, strategic planning, human resources, investor relations, ESG, finance, and marketing and sales, that the Company deals with today. | Key Skills • Sustainability • Strategic Planning • Human Resources • Stockholder Relations | • ESG • Finance • Acquisitions • Capital Allocation • Marketing and Sales |
DIRECTORS WHOSE TERMS OF OFFICE WILL CONTINUE AFTER THE ANNUAL MEETING
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DIRECTORS WHOSE TERMS OF OFFICE WILL CONTINUE AFTER THE ANNUAL MEETING
| Robert A. Livingston Director since 2017 Age: 70 Committees: Compensation, Executive Class: Director in Class III (term expiring in 2026) Shares of Common Stock beneficially owned: 16,159 | Experience Retired President and Chief Executive Officer, Dover Corporation, a $8.5 billion diversified manufacturer (NYSE: DOV). Mr. Livingston served as Dover’s President and Chief Executive Officer from 2008 until his retirement in 2018. Previously, he held positions with Dover business units Dover Engineered Systems, Inc. (as President and Chief Executive Officer) from 2007 until 2008, and Dover Electronics, Inc. (as President and Chief Executive Officer) from 2004 until 2007. Mr. Livingston was previously the President of Vectron International, Inc., a Dover business unit, from 2001 until 2004, and the Executive Vice President (from 1998 until 2001) and Vice President, Finance and Chief Financial Officer (from 1987 until 1998) of Dover Technologies, Inc. Prior to its acquisition by Dover in 1983, Mr. Livingston was Vice President, Finance of K&L Microwave, and continued to serve in that capacity until 1984, when he became Vice President and General Manager of K&L Microwave until 1987. Mr. Livingston was a director of Dover Corporation from 2008 until his retirement in 2018. Since December 2018, Mr. Livingston has been a director of Amphenol Corporation, a manufacturer of electrical and fiber optic connectors and interconnect systems (NYSE: APH), where he serves on Amphenol’s audit, compensation (which he chairs) and executive committees. Mr. Livingston received his B.S. degree in business administration from Salisbury University. | | | | | Reasons for Nomination The Board of Directors has determined that Mr. Livingston should serve as a Director because of his extensive executive management experience, including his service as President and Chief Executive Officer of Dover. In that position, Mr. Livingston dealt with many of the major issues, such as financial, strategic, technology, compensation, management development, acquisitions, capital allocation, government and investor relations, that the Company deals with today. | Key Skills • Financial • Strategic • Technology • Compensation • Management Development | • Acquisitions • Capital Allocation • Government and Stockholder Relations |
DIRECTORS WHOSE TERMS OF OFFICE WILL CONTINUE AFTER THE ANNUAL MEETING
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DIRECTORS WHOSE TERMS OF OFFICE WILL CONTINUE AFTER THE ANNUAL MEETING
| Frederick R. Nance Director since 2007 Age: 70 Committees: Executive, Governance and Nominating Class: Director in Class III (term expiring in 2026) Shares of Common Stock beneficially owned: 8,180 | Experience Executive Group Member and Global DEI Counsel of Squire Patton Boggs (US) LLP, Attorneys-at-law, which serves clients from 40 offices across four continents. He received his B.A. degree from Harvard University and his J.D. degree from the University of Michigan. Mr. Nance joined Squire Patton Boggs directly from law school, became partner in 1987, served as the Managing Partner of the firm’s Cleveland office from 2002 until 2007, and served as the firm’s Regional Managing Partner from 2007 until 2017. From 2017 until the end of 2022, Mr. Nance served as the firm’s Global Managing Partner. Mr. Nance also served two four-year terms on the firm’s worldwide, seven-person Management Committee. In addition to his duties at Squire Patton Boggs, where he heads the firm’s U.S. Sports and Entertainment practice representing clients including LeBron James, Mr. Nance serves on the board of the Cleveland Clinic, where he chairs the governance committee. Mr. Nance previously served on the board of the Greater Cleveland Partnership, which he chaired, and the board of McDonald & Company Investments, Inc. In 2015, Mr. Nance was inducted into the Northeast Ohio Business Hall of Fame. | | | | | Reasons for Nomination The Board of Directors has determined that Mr. Nance should serve as a Director primarily due to his significant legal background and global management experience. As Global DEI Counsel of Squire Patton Boggs (US) LLP, Mr. Nance oversees a multinational staff pursuing diversity and inclusion efforts for thousands of partners and employees across the globe. Mr. Nance’s background allows him to provide valuable insights to the Board of Directors, particularly in regard to corporate governance and risk issues that confront the Company. Mr. Nance also provides the Board of Directors a valuable perspective as a current or past member of the boards of several prominent local non-profit organizations. | Key Skills • Management Development • Acquisitions • Capital Allocation | • Corporate Governance • Risk Management • Non-profit Organizations |
DIRECTORS WHOSE TERMS OF OFFICE WILL CONTINUE AFTER THE ANNUAL MEETING
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DIRECTORS WHOSE TERMS OF OFFICE WILL CONTINUE AFTER THE ANNUAL MEETING
| William B. Summers, Jr., Director since 2004 Age: 74 Committee: Compensation Class: Director in Class III (term expiring in 2026) Shares of Common Stock beneficially owned: 46,188 | Experience Retired Chair and Chief Executive Officer of McDonald Investments Inc., an investment banking and securities firm and a part of KeyBanc Capital Markets. Prior to his retirement, Mr. Summers served as Chair of McDonald Investments Inc. from 2000 to 2006, and as its Chief Executive Officer from 1994 to 2000. From 1998 until 2000, Mr. Summers served as the Chair of Key Capital Partners and an Executive Vice President of KeyCorp. Mr. Summers is a director of Integer Holdings Corporation, a medical device outsource manufacturer (NYSE: ITGR), and a member of the advisory board of Citymark Capital. From 2004 until 2011, Mr. Summers was a director of Developers Diversified Realty Corporation. Mr. Summers was previously a member of the New York Stock Exchange board of directors and a member of the Nasdaq Stock Market board of directors, and served as the chair of the Nasdaq Stock Market board of directors for two years. Mr. Summers is a trustee of Baldwin Wallace University and a Life Trustee of the Rock & Roll Hall of Fame and Museum. | | | | | Reasons for Nomination The Board of Directors has determined that Mr. Summers should serve as a Director because of his extensive executive management experience, including over 15 years of experience as Chair and Chief Executive Officer of McDonald Investments Inc., service on the boards of both the New York Stock Exchange and the Nasdaq Stock Market, and his experience serving as a director of other private and public companies. His experience enables Mr. Summers to provide keen insight and diverse perspectives on several critical areas impacting the Company, including capital markets, financial and external reporting, long-term strategic planning and business modeling. Mr. Summers also provides the Board of Directors a valuable perspective as a member of the boards of several prominent local non-profit organizations. | Key Skills • Finance • Strategic • Management Development • Acquisitions | • Capital Allocation • Non-profit Organizations |
DIRECTORS WHOSE TERMS OF OFFICE WILL CONTINUE AFTER THE ANNUAL MEETING
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and a Peer Group**
and a Peer Group**
and a Peer Group**
| * $100 invested on May 31, 2019 in stock or index, including reinvestment of dividends. Fiscal year ending May 31. |
and a Peer Group**
| ** Fiscal 2024 peer group of eight companies includes Akzo Nobel N.V., Axalta Coating Systems Ltd., Carlisle Companies Inc., H.B. Fuller Company, Masco Corporation, PPG Industries, Inc., The Sherwin-Williams Company and Sika AG. |
and a Peer Group**
Copyright© 2024 Standard & Poor’s, a division of S&P Global. All rights reserved.
and a Peer Group**
and a Peer Group**
and a Peer Group**
| * $100 invested on May 31, 2014 in stock or index, including reinvestment of dividends. Fiscal year ending May 31. |
and a Peer Group**
| ** Fiscal 2024 peer group of eight companies includes Akzo Nobel N.V., Axalta Coating Systems Ltd., Carlisle Companies Inc., H.B. Fuller Company, Masco Corporation, PPG Industries, Inc., The Sherwin-Williams Company and Sika AG. |
and a Peer Group**
Copyright© 2024 Standard & Poor’s, a division of S&P Global. All rights reserved.
and a Peer Group**
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Fiscal 2024 Executive Compensation Highlights
| • | Awarded Performance Earned Restricted Stock (“PERS”) grants at 85% of target amounts for fiscal year 2024; and |
Fiscal 2024 Executive Compensation Highlights
| • | Under the Incentive Plan for fiscal 2024, increased cash awards by $460,000 for Mr. Sullivan, $203,000 for Mr. Gordon, $157,000 for Mr. Moore, $156,000 for Ms. Kastner and $165,000 for Mr. Kinser. |
Fiscal 2024 Corporate Governance Highlights
| • | Use of performance-based compensation arrangements that use a variety of performance measures, including performance-based equity awards. |
Fiscal 2024 Corporate Governance Highlights
| • | Our 2014 Omnibus Plan and our proposed RPM International Inc. 2024 Omnibus Equity and Incentive Plan (the “2024 Omnibus Plan”) prohibit the repricing of stock options or stock appreciation rights without stockholder approval. |
Fiscal 2024 Corporate Governance Highlights
| • | Our 2014 Omnibus Plan and our proposed 2024 Omnibus Plan provide double-trigger vesting provisions for long-term equity awards in the event of a change in control of the Company. |
Consideration of Last Year’s Say-on-Pay Vote
Consideration of Last Year’s Say-on-Pay Vote Following our Annual Meeting of Stockholders in October 2023, the Compensation Committee reviewed the results of the stockholder advisory vote on executive compensation that was held at the meeting with respect to the fiscal 2023 compensation actions and decisions for Mr. Sullivan and the other named executive officers. Seventy-five percent (75%) of the votes cast on the Say-on-Pay proposal last year were voted in support of the compensation of our named executive officers set forth in the Compensation Discussion and Analysis, the Summary Compensation Table and the related compensation tables and narratives in last year’s Proxy Statement. In connection with last year’s say-on-pay vote, the Company reached out to 16 of our largest stockholders representing approximately 47.5% of our shares of Common Stock outstanding (the “Stockholder Outreach Group”) in order to discuss, including with the Chair of the Compensation Committee, their views and understanding of the Company’s compensation practices. None of the members of the Stockholder Outreach Group requested a meeting or expressed concerns over the Company’s executive compensation practices. Although we did not receive additional comments from stockholders, we have continued to expand the detail of our Compensation Discussion and Analysis disclosures and make the key provisions of our executive compensation programs clearer within the Proxy Statement. In addition, the Compensation Committee continued its annual practice of providing compensation to the named executive officers that is competitive with the market by engaging Willis Towers Watson to conduct a compensation benchmark study, as more fully described in this Proxy Statement, and included further clarifying detail about the Company’s compensation practices herein. Specifically, with regard to awards of PERS and PSUs, we have provided disclosure explaining that while the earning of PERS and the vesting of PSUs are both based on EBIT margin and revenue growth goals, it is important to note that the metrics and the performance periods are different, so the named executive officers are not being paid for the same performance twice. Receiving PERS does not guarantee vesting of PSUs and vice versa. Using these two key metrics in both types of equity awards supports RPM’s philosophy to drive results by tying its most important areas of performance to its compensation payouts. Our fiscal 2024 compensation program was the first annual compensation cycle during which the Compensation Committee had the opportunity to adjust the Company’s compensation practices in light of the result of the October 2022 Say-on-Pay proposal. The Compensation Committee engaged Willis Towers Watson to prepare a study comparing the Company’s stock compensation design to those of its Compensation Peer Group (as hereinafter defined). Willis Towers Watson’s study found that it was atypical among the Compensation Peer Group to have two performance-based plans (such as our PERS and PSUs) and that approximately 75% of the Compensation Peer Group grants time-based restricted stock. The Compensation Committee engaged in a robust discussion regarding the overall intent of the equity component of the compensation program, including its role in the overall success of the Company which, in turn, benefits the Company’s stockholders. Consideration was given to replacing PERS awards with awards of time-based restricted stock. That option was eventually rejected, largely because moving from a performance-based award toward a non-performance-based award did not fit with the Company’s current compensation philosophy. The Compensation Committee also reviewed the mix between PERS, SARs and PSUs. For fiscal 2023, the target mix for the Chief Executive Officer was 18% PERS, 45% SARs and 37% PSUs, and for the other named executive officers the target mix was 27% PERS, 28% SARs and 45% PSUs. For fiscal 2024, the Compensation Committee decided to place more weight on long term performance via SARs and PSUs and to tie 70% of equity compensation to performance-based vehicles (PERS and PSUs). As a result, the Compensation Committee set the mix between PERS, SARs and PSUs for all named executive officers (including the Chief Executive Officer) at 15% PERS, 30% SARs and 55% PSUs. In light of the increase in stockholder support for our Say-on-Pay proposal last year, we believe the changes to our executive compensation practices have been viewed favorably by our stockholders. The Compensation Committee will continue to consider results from future stockholder advisory votes, as well as input from its stockholders between meetings, in its ongoing evaluation of the Company’s executive compensation programs and practices.
Overview
Our general compensation philosophy is performance-based in that our executive officers should be well compensated for achieving strong operating and financial results that contribute to enhanced stockholder value. We engage in a rigorous process intended to provide our executive officers a fair level of compensation that reflects RPM’s operating and financial results, the relative skills and experience of the individuals involved, peer group compensation levels and other similar benchmarks. The Compensation Committee has designed compensation policies and programs for our executive officers which are intended to compensate the executive officers near the market median for a relevant group of similarly sized companies and competitors within RPM’s industry, with the potential for higher than average compensation when our performance levels exceed our annual business goals. Our primary compensation goals are to retain key leaders, reward good past performance, incentivize strong future performance and align executives’ long-term interests with those of our stockholders.
Comparative Framework
Comparative Framework We evaluate the competitiveness of our executive compensation programs on an annual basis. In 2024, the Compensation Committee engaged the professional compensation consulting firm of Willis Towers Watson to conduct a compensation benchmark study. Willis Towers Watson reviewed and evaluated our compensation packages for our key officers in light of the levels of compensation being offered by companies in the specialty chemicals industry and other related industries which fall within a reasonable size range (in terms of revenues) and operate businesses similar to that of the Company. This compensation peer group (the “Compensation Peer Group”) is reviewed annually and this year the Compensation Committee elected to replace Trinseo S.A. with Cabot Corporation, which the Compensation Committee feels better fits the Compensation Peer Group profile. Various factors are considered when determining the Compensation Peer Group including industry, organizational complexity, revenue size, like talent market, investor profile and whether the organization also lists the Company as a peer. The Compensation Peer Group companies included in Willis Towers Watson’s 2024 compensation benchmark study were:
Elements of Compensation
| • | Annual cash incentive compensation; and |
Elements of Compensation
| • | Performance-based equity incentives, including restricted stock. |
Elements of Our Named Executive Officer Compensation Program for Fiscal 2024
| Type of Pay | Compensation Component | Key Characteristics | Purpose | | Fixed | Base Salary | Fixed compensation, reviewed and adjusted annually if and when appropriate | Compensate named executive officers fairly for the responsibility level of the position held | | | Health and Retirement Plans | Fixed compensation | Intended to provide benefits that promote employee health and support employees in attaining financial security | | | Perks and Other Personal Benefits | Fixed compensation | Intended to provide a business-related benefit to the Company, and to assist in attracting and retaining executive officers | | | Post-Employment Compensation and Change in Control | Fixed compensation | Intended to provide temporary income following a named executive officer’s involuntary termination of employment and, in the case of a change of control, to also provide continuity of management | | | Equity Compensation — Supplemental Executive Retirement Plan (SERP) Restricted Stock | Fixed compensation awarded under the 2014 Omnibus Plan (the number of shares of Common Stock is determined formulaically and is dependent upon compensation, the stock price, the pension formula and actuarial assumptions) | Provides stock-based supplemental retirement benefits to named executive officers whose retirement plan benefits may be limited under applicable law | | Variable | Annual Cash Incentive Compensation | Variable, performance-based compensation, awarded under the Incentive Compensation Plan | Motivate and reward named executive officers for achieving annual business objectives based on Company performance and individual achievements | | | Equity Compensation — Performance Earned Restricted Stock (PERS) | Variable, performance-based compensation, awarded under the 2014 Omnibus Plan (annual performance period) | Motivate and reward named executive officers for achieving annual business objectives; the threshold, target and maximum number of and performance goals for the award of PERS for a given fiscal year are set in July of that year; PERS are single-year performance awards | | | Equity Compensation — Performance Stock Units (PSUs) | Variable, performance-based compensation, awarded under the 2014 Omnibus Plan (three-year performance period) | Motivate and reward named executive officers for achieving long-term, multi-year business objectives | | | Equity Compensation — Stock Appreciation Rights (SARs) | Variable, awarded under the 2014 Omnibus Plan | Motivate and reward named executive officers for achieving long-term business objectives by tying incentives to the performance of our Common Stock |
Key Financial Performance Metrics Linked to Determining Compensation for Fiscal 2024
Key Financial Performance Metrics Linked to Determining Compensation for Fiscal 2024
Key Financial Performance Metrics Linked to Determining Compensation for Fiscal 2024
| Performance Metric | Why it is Important to Us | | Sales/Revenue Growth | Growth at or above market is indicative of innovation, level of service and cost competitiveness, all of which are critical to success in the marketplace. | | Adjusted EBIT Margin % | This metric is indicative of relative perceived value with higher relative margin implying higher value added in the marketplace. Additionally, increased margin expansion generates increased cash flow from the same amount of revenue. | | Working Capital as a % of Sales | Working Capital is the largest controllable asset on the Company’s balance sheet. Improvement in this metric drives meaningful improvement in cash generation. | | Gross Profit Margin | Gross profit measures profit after accounting for cost of goods sold and can help measure business efficiencies. |
Key Financial Performance Metrics Linked to Determining Compensation for Fiscal 2024
Together, the four key financial performance metrics (“Key Financial Performance Metrics”) described above, when improving, generate significant value for the Company’s stockholders and are aligned with the Company’s MAP 2025 goals.
Base Salary
| • | benchmarks versus the Compensation Peer Group; |
Base Salary
| • | overall financial performance of the Company, with a focus on the Key Financial Performance Metrics set forth in the preceding table. |
Annual Cash Incentive Compensation
Annual Cash Incentive Compensation For fiscal 2024, we provided annual cash incentive compensation under the Amended and Restated 1995 Incentive Compensation Plan, which was designed to motivate participants to achieve our financial objectives and reward executives for their achievements when those objectives are met. Annual cash incentive compensation criteria for fiscal 2024 were set in July 2023 and included gross profit margin percentage improvement and sales growth both relative to the prior year as well as across industry peers, level of progress related to various Company objectives including MAP 2025, internal manufacturing and commercial excellence programs, and progress related to achievement and reporting on ESG matters. Additionally, each executive officer had individual goals set that were related to their specific areas of responsibility. All named executive officers participated in the fiscal 2024 incentives. The amount of cash incentive compensation earned by our named executive officers in fiscal 2024 is set forth in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table. We paid these amounts in July 2024. For fiscal 2024, the Compensation Committee established that the Incentive Compensation Plan (“Incentive Plan”) in place for fiscal 2024 would provide for an aggregate cash incentive compensation award pool of 1.5% of the Company’s pre-tax income for fiscal 2024 (the “award pool”), to be awarded to each of the named executive officers in respect of the Company’s performance for the fiscal year ending May 31, 2024 as follows: Mr. Sullivan, 40%; Mr. Gordon, 15%; Mr. Moore, 15%; Ms. Kastner, 15%; and Mr. Kinser, 15%. The Compensation Committee determined that cash incentives paid would range from zero to 200% of salary with a target of 125% for Mr. Sullivan; and from zero to 150% of salary with a target of 100% for Messrs. Gordon, Moore and Kinser, and Ms. Kastner. The Compensation Committee may reduce or eliminate the amount of a named executive officer’s annual cash incentive award, at the Compensation Committee’s sole discretion, based solely on individual performance. The Compensation Committee calculated the aggregate non-equity compensation award pool based on our audited pre-tax income and each individual’s cash incentive payout amount. For fiscal 2024, the Company’s pre-tax income as defined in the Incentive Plan was $850.8 million, providing a cash incentive compensation award pool under the Incentive Plan for the Covered Employees of approximately $12.76 million. After a review of the annual cash incentive compensation criteria that were set for fiscal 2024, the Compensation Committee awarded cash incentives totaling $3.86 million to the named executive officers, which was significantly below the aggregate amount authorized to be paid pursuant to the award pool formula. The cash incentive compensation paid to the named executive officers equaled approximately 130% of their salaries for fiscal 2024 or 120% of target bonus level. The Compensation Committee also determined that for fiscal 2025 the cash incentive compensation paid will range from zero to 200% of salary with a target of 125% of salary for Mr. Sullivan, and from zero to 150% of salary with a target of 100% of salary for direct reports of Mr. Sullivan. As disclosed herein, the Incentive Plan in place for fiscal 2024 provided for an aggregate cash incentive compensation award pool of approximately $12.76 million. The maximum portion of the award pool, subject to the limitations of the Incentive Plan, that each named executive officer could be awarded was: Mr. Sullivan – 40% or $5,104,000; each of Messrs. Gordon, Moore and Kinser, and Ms. Kastner – 15% or $1,914,000. However, the Compensation Committee set a maximum award of 150% of the named executive officer’s base salary as a limit, with a target award of 100% of the named executive officer’s base salary, with the exception of Mr. Sullivan, whose maximum award was set at 200% of his base salary, with a target award of 125% of his base salary. Furthermore, the Incentive Plan limits the maximum award to any individual to $2,000,000. As a result, the maximum award that could be earned by each named executive officer was: Mr. Sullivan – $2,000,000; Mr. Gordon – $862,500; Mr. Moore – $682,500; Ms. Kastner – $667,500; and Mr. Kinser – $630,000. The actual awards were as follows: Mr. Sullivan – $1,580,000; Mr. Gordon – $685,000; Mr. Moore – $540,000; Ms. Kastner – $530,000; and Mr. Kinser – $525,000.
Annual Cash Incentive Compensation
| 42 | 2024 Proxy Statement | |
Review of Annual Incentive Compensation
Review of Annual Incentive Compensation Actual incentive compensation awards for fiscal 2024 were determined for the named executive officers as follows:
Review of Annual Incentive Compensation
| • | Gross Profit Margin Improvement – A threshold of 12.5% of his or her target award could be earned for gross profit margin improvement relative to prior year and industry peers; target of 50% of his or her target award could be earned based on achievement of gross profit margin of 39.6%; and a maximum of 62.5% of his or her target award could be earned based on achievement of gross profit margin of 41.2%. Gross profit margin percentage improved from 38.0% in fiscal 2023 to 41.1% in fiscal 2024. As a result, the Compensation Committee elected to award 56.5% of the each named executive officer’s target award for this metric; |
Review of Annual Incentive Compensation
| • | Sales Growth Improvement – Up to 50% of his or her target award could be earned related to sales growth improvement relative to prior year and industry peers. The Company’s sales growth was 1.1% for fiscal 2024. As a result, the Compensation Committee elected to award 25.0% of the each named executive officer’s target award for this metric; and |
Review of Annual Incentive Compensation
| | 2024 Proxy Statement | 43 |
Review of Annual Incentive Compensation
| • | Achievement of Company Initiatives and Individual Goals – Up to 50% of his or her target award could be earned relating to progress toward initiatives including MAP 2025 and Commercial Success (“CS-168”), ESG initiatives and achievement of individually assigned goals based on areas of responsibility. For fiscal 2024, the Company made significant progress toward MAP 2025 goals and CS-168. Each of the named executive officers contributed to these initiatives, as well as other prescribed goals and initiatives. As a result, the Compensation Committee elected to award 37.5% of each named executive officer’s target award except for Mr. Kinser. Because of his high level of individual involvement related to MAP 2025, the Compensation Committee awarded Mr. Kinser with 43.5% of his target award for this metric. |
Review of Annual Incentive Compensation
As a result, Messrs. Sullivan, Gordon, Moore and Kinser, and Ms. Kastner were awarded incentive compensation equal to approximately 148%, 119%, 119%, 125% and 119% of their respective base salaries (or 120% of their target awards).
Equity Compensation
Equity Compensation We use equity compensation to align our named executive officers’ interests with those of our stockholders and to attract and retain high-caliber executives through recognition of anticipated future performance. Under our 2014 Omnibus Plan, we can grant a variety of stock-based awards, including awards of restricted stock and stock appreciation rights. After reviewing executive compensation practices against our defined Comparative Framework, including reviewing equity awards for similarly situated officers at companies in our Compensation Peer Group, our Chief Executive Officer makes annual recommendations to the Compensation Committee of the type and amount of equity awards for the Chief Executive Officer and the other executive officers. In determining the equity incentive compensation component of Chief Executive Officer compensation, the Compensation Committee considers, in addition to the factors used to determine salary and cash incentive compensation, the value of similar incentive awards to chief executive officers in our Compensation Peer Group. In determining the equity incentive compensation of the other executive officers, the Compensation Committee reviews and approves a mix of business goals and the value of similar incentive awards to executive officers of our Compensation Peer Group, with a significant amount of emphasis placed on the compensation recommendations of our Chief Executive Officer. The Compensation Committee must approve any recommended equity grants before they can be made. The Compensation Committee uses the various equity incentive awards available to it under the 2014 Omnibus Plan to retain executives and other key employees and achieve the following additional goals:
Equity Compensation
| • | to reward past performance; |
Equity Compensation
| • | to incentivize future performance (both short-term and long-term); |
Equity Compensation
| • | to align executives’ long-term interest with that of the stockholders; and |
Equity Compensation
| • | to enhance the longer-term performance and profitability of the Company. |
Equity Compensation
The Compensation Committee’s current intention is to achieve these goals by making annual awards to the Company’s executive officers and other key employees, using a combination of restricted stock and stock-settled stock appreciation rights. All restricted stock currently awarded by the Company is performance based. SARs are awarded based on a percentage of the overall equity compensation target. The value of SARs is directly determined by the stock price, and the value of the grant is zero unless the stock price increases over the grant date price. Performance Earned Restricted Stock (PERS). The Compensation Committee currently awards Performance Earned Restricted Stock, or PERS, under the 2014 Omnibus Plan. The threshold, target and maximum number of and performance goals for the award of PERS for a given fiscal year are set early in that year. The determination of whether and to what extent the PERS have been achieved for a fiscal year is made at the July meeting of the Compensation Committee following the close of that fiscal year. Based on that determination, the actual grants, if any, with respect to a fiscal year are made at that same meeting. With respect to fiscal 2024, the maximum number and performance goals were set early in fiscal 2024 and the Compensation Committee determined whether and to what extent the PERS were achieved at its meeting in July 2024.
Equity Compensation
| 44 | 2024 Proxy Statement | |
Equity Compensation
For fiscal 2024, pursuant to the 2014 Omnibus Plan, the Compensation Committee approved a contingent target award of PERS to the named executive officers of 21,900 shares to be based upon the level of attainment of the fiscal 2024 performance goals for EBIT margin (weighted at 50%) and Working Capital Ratio (weighted at 50%). Based on the criteria outlined and as shown in the following table, the Compensation Committee determined that 18,620 PERS would be awarded to the named executive officers, which is 85% of target.
Equity Compensation
| Performance Goal | Weight | Threshold 25% of Target | Target 100% | Maximum 125% of Target | Results | No of Target Vesting | | EBIT Margin | 50% | 11.6% | 13.2% | 15% | 12.8% | 87.5% | | Working Capital Ratio | 50% | 25% | 23% | 21% | 23.6% | 82.5% | | Results between levels are interpolated | | | | | Total Vesting | 85% |
Equity Compensation
Stock Appreciation Rights (SARs). In July 2023, pursuant to the 2014 Omnibus Plan, the Compensation Committee awarded SARs totaling 209,200 to the named executive officers. The SARs awards granted to the named executive officers in July 2023 are set forth in the Grants of Plan-Based Awards for Fiscal 2024 table. The value of SARs is one component of the named executive officers’ long term incentive compensation intended to maintain such compensation competitive with the market median. Supplemental Executive Retirement Plan (SERP) Restricted Stock. SERP Restricted Stock was established to provide for supplemental retirement benefits to officers and other key employees of the Company designated by the Board of Directors whose retirement plan benefits may be limited under applicable law and the Internal Revenue Code. In July 2023, the Compensation Committee awarded 4,211 shares of restricted stock to the named executive officers under the 2014 Omnibus Plan. SERP awards are granted annually. The number of shares is determined formulaically and is dependent upon compensation, the stock price, the pension formula and actuarial assumptions. A zero grant in any year indicates that the participant’s benefit is fully funded based on that year’s calculation. Each of the named executive officers participates in the SERP. Performance Stock Units (PSUs). In July 2023, the Compensation Committee approved contingent awards of PSUs to Messrs. Sullivan, Gordon, Moore and Kinser, and Ms. Kastner, at a total target level of 79,400 shares with a maximum possible award of up to 158,800 shares. The target for each named executive officer is disclosed in the Fiscal 2024 Grants of Plan-Based Awards table. Awarded pursuant to the 2014 Omnibus Plan, the purpose of the PSU awards is to provide an added incentive to key officers to improve the long-term performance of the Company. The PSU awards were made contingent upon the level of attainment of performance goals for the three-year performance period from June 1, 2023 ending May 31, 2026. The threshold, target and maximum performance levels for the fiscal 2024 PSU awards are shown in the following table for the performance period from June 1, 2023 ending May 31, 2026.
Equity Compensation
| | Adjusted EBIT Margin(1) | Adjusted Revenue Growth(2) | % of Target Vesting | | Weighting | 50% | 50% | | | Threshold | 14.0% | 3.0% | 25% | | Target | 16.0% | 5.0% | 100% | | Maximum | 18.0% | 7.0% | 200% |
Equity Compensation
| (1) Measured at the end of the three-year performance period. |
Equity Compensation
| (2) Measured based on three-year compound annualized growth rate. |
Equity Compensation
| | 2024 Proxy Statement | 45 |
Equity Compensation
The Compensation Committee sets the performance goals related to the PSU awards at levels it believed to be achievable but would require the Company to meaningfully grow earnings and revenues. PSU awards are expected to be granted annually for successive three-year performance periods. At its meeting in July 2024, the Committee determined the extent to which the PSUs granted for the performance period from June 1, 2022 to May 31, 2024 had vested. The following table shows the result:
Equity Compensation
| Performance Goal | Threshold | Target | Maximum | Results | % of Target Vesting | | Adjusted EBIT Margin(1) | 13.0% | 15.0% | 17.0% | 12.8% | 0% | | Adjusted Revenue Growth(2) | 4.0% | 6.0% | 8.0% | 6.3% | 115% | | Results Between Levels are Interpolated | | | | Total Vested | 57.5% |
Equity Compensation
| (1) Measured at the end of the three-year performance period. |
Equity Compensation
| (2) Measured based on three-year compound annualized growth rate. ARG targets for the fiscal 2022 PSUs were set in July 2021 during the Covid pandemic when there was considerable uncertainty as to future revenue gains. |
Equity Compensation
Accordingly, each recipient earned 57.5% of such recipient’s PSU award, and forfeited 42.5% of such PSU award. While the earning of PERS and the vesting of PSUs are both partially based on EBIT margin, it is important to note that the metrics and the performance periods are different, so the named executive officers are not being paid for the same performance twice. Receiving PERS does not guarantee vesting in PSUs and vice versa. Using this key metric in both types of equity awards supports RPM’s philosophy to drive results by tying its most important areas of performance to its compensation payouts.
Timing of Equity Grants
Timing of Equity Grants Equity grants to the named executive officers are generally made in July at regularly scheduled meetings of the Compensation Committee. Board and Compensation Committee meetings are generally scheduled at least a year in advance. Scheduling decisions are made without regard to anticipated earnings or other major announcements by the Company.
Employment Agreements and Related Arrangements
Employment Agreements and Related Arrangements We are a party to the following employment agreements with our named executive officers:
Employment Agreements and Related Arrangements
| • | Frank C. Sullivan. Pursuant to an employment agreement whereby Mr. Sullivan serves as our Chair, President and Chief Executive Officer, Mr. Sullivan is entitled to an annual base salary of not less than $1,100,000 effective as of June 1, 2024. |
Employment Agreements and Related Arrangements
| • | Russell L. Gordon. Pursuant to an employment agreement whereby Mr. Gordon serves as our Vice President and Chief Financial Officer, Mr. Gordon is entitled to an annual base salary of not less than $595,000 effective as of June 1, 2024. |
Employment Agreements and Related Arrangements
| 46 | 2024 Proxy Statement | |
Employment Agreements and Related Arrangements
| • | Edward W. Moore. Pursuant to an employment agreement whereby Mr. Moore serves as our Senior Vice President, General Counsel, Chief Compliance Officer and Secretary, Mr. Moore is entitled to an annual base salary of not less than $470,000 effective as of June 1, 2024. |
Employment Agreements and Related Arrangements
| • | Janeen B. Kastner. Pursuant to an employment agreement whereby Ms. Kastner serves as our Vice President–Corporate Benefits and Risk Management, Ms. Kastner is entitled to an annual base salary of not less than $460,000 effective as of June 1, 2024. |
Employment Agreements and Related Arrangements
| • | Timothy R. Kinser. Pursuant to an employment agreement whereby Mr. Kinser serves as our Vice President–Operations, Mr. Kinser is entitled to an annual base salary of not less than $450,000 effective as of June 1, 2024. |
Employment Agreements and Related Arrangements
Pursuant to the employment agreements, each of our named executive officers serves for a term ending on May 31, 2024, which is automatically extended for additional one-year periods unless either party gives the other party notice of nonrenewal two months in advance of the annual renewal date. In accordance with these automatic extension provisions, the employment agreement with each of our named executive officers has been extended to May 31, 2025. Each of our named executive officers is also eligible to receive such annual cash incentive compensation or bonuses as our Compensation Committee may determine based upon our results of operations and other relevant factors. Our named executive officers also generally entitled to participate in our employee benefit plans. Under the employment agreements, each of our named executive officers is entitled to receive fringe benefits in line with our present practice relating to the officer’s position, including the use of the most recent model of a full-sized automobile. See “Other Potential Post-Employment Compensation” for a discussion of additional terms of the employment agreements related to restrictive covenants and potential post-employment compensation.
New Form of Employment Agreement
New Form of Employment Agreement In 2016, the Compensation Committee approved a new form of employment agreement that has been used for new employment agreements entered into with our executives since 2016. Mr. Kinser’s employment agreement is based on this new form. The new form of employment agreement generally follows the current employment agreements with our other named executive officers, except that the new form of employment agreement removes a provision that accelerates equity awards upon a termination of employment following a change in control. Instead, any outstanding equity awards will be subject to the terms of their respective plans and award agreements (for example, equity awards granted under the 2014 Omnibus Plan will follow the double-trigger vesting provisions set forth in the 2014 Omnibus Plan). Further, the new form of employment agreement does not provide for a tax gross-up for excise taxes triggered under Section 280G of the Internal Revenue Code, but instead includes a “best-net alternative” provision, under which the executive would receive the greater of the total parachute payments, after taxes (including the excise tax) have been paid, or reduced parachute payments equal to the highest amount that may be paid without triggering the excise tax under Section 280G. The definitions of “change in control” and “good reason” were also revised to match the definitions for such terms in the 2014 Omnibus Plan.
Policies on Clawback of Executive Compensation
| • | the amount of the bonus, incentive compensation or stock award was calculated based upon the achievement of certain financial results that were subsequently the subject of a restatement, |
Policies on Clawback of Executive Compensation
| • | the amount of the bonus, incentive compensation or stock award that would have been awarded to the executive officer had the financial results been properly reported would have been lower than the amount actually awarded, and |
Post-Employment Compensation and Change in Control
Post-Employment Compensation and Change in Control Each of the employment agreements with Messrs. Sullivan, Gordon, Moore and Kinser, and Ms. Kastner provides for payments and other benefits if the named executive officer’s employment terminates under certain circumstances, such as being terminated without cause within two years of a change in control, which is often referred to as a “double-trigger.” We believe that these payments and other benefits are important to recruiting and retaining our named executive officers, as many of the companies with which we compete for executive talent provide for similar payments to their senior employees. Additional information regarding these payments and other benefits is found under the heading “Other Potential Post-Employment Compensation.”
Summary Compensation Table
Summary Compensation Table The following table sets forth information regarding the compensation of our Chief Executive Officer, our Chief Financial Officer and our other named executive officers for fiscal 2024, fiscal 2023 and fiscal 2022.
Summary Compensation Table
| Name and Principal Position (a) | Year (b) | Salary ($) (c) | Bonus ($)(1) (d) | Stock Awards ($)(2)(3) (e) | Option Awards ($)(2)(3) (f) | Non-Equity Incentive Plan Compensation ($)(4) (g) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(5) (h) | All Other Compensation ($)(6) (i) | Total ($) (j) | | Frank C. Sullivan Chair, President and Chief Executive Officer | 2024 | 1,065,000 | 0 | 5,742,634 | 3,029,040 | 1,580,000 | 75,246 | 250,544 | 11,742,464 | | | 2023 | 995,000 | 0 | 4,010,379 | 0 | 1,120,000 | 46,539 | 237,957 | 6,409,875 | | | 2022 | 995,000 | 0 | 3,219,192 | 3,618,000 | 995,000 | 0 | 226,387 | 9,053,579 | | Russell L. Gordon Vice President and Chief Financial Officer | 2024 | 575,000 | 0 | 1,096,494 | 500,032 | 685,000 | 67,366 | 67,355 | 2,991,247 | | | 2023 | 535,000 | 0 | 999,470 | 0 | 482,000 | 26,489 | 60,590 | 2,103,549 | | | 2022 | 510,000 | 0 | 808,188 | 361,800 | 460,000 | 0 | 51,783 | 2,191,771 | | Edward W. Moore Senior Vice President, General Counsel and Chief Compliance Officer | 2024 | 455,000 | 0 | 952,395 | 500,032 | 540,000 | 19,554 | 209,613 | 2,676,594 | | | 2023 | 425,000 | 0 | 865,318 | 0 | 383,000 | 0 | 188,141 | 1,861,459 | | | 2022 | 400,000 | 0 | 666,232 | 361,800 | 360,000 | 0 | 139,464 | 1,927,496 | | Janeen B. Kastner Vice President – Corporate Benefits and Risk Management | 2024 | 445,000 | 0 | 1,107,528 | 500,032 | 530,000 | 62,158 | 54,106 | 2,698,824 | | | 2023 | 415,000 | 0 | 996,392 | 0 | 374,000 | 22,290 | 52,906 | 1,861,218 | | | 2022 | 385,000 | 0 | 771,591 | 361,800 | 347,000 | 0 | 49,699 | 1,915,090 | | Timothy R. Kinser Vice President – Operations | 2024 | 420,000 | 0 | 1,046,934 | 500,032 | 525,000 | 56,490 | 30,975 | 2,579,431 | | | 2023 | 400,000 | 0 | 922,592 | 0 | 360,000 | 41,326 | 37,026 | 1,760,944 | | | 2022 | 361,250 | 0 | 287,912 | 361,800 | 330,000 | 0 | 36,910 | 1,377,872 |
Summary Compensation Table
| (1) Amounts earned under the Incentive Plan are reported in the Non-Equity Incentive Plan Compensation column. |
Summary Compensation Table
| (2) The dollar value of restricted stock and SARs set forth in these columns is equal to the fair market value as of the date of the respective grant. |
Summary Compensation Table
| (3) The Grants of Plan-Based Awards for Fiscal 2024 table sets forth the aggregate grant date fair value of the restricted stock granted during fiscal 2024 computed in accordance with ASC 718. Shares of restricted stock are subject to risk of forfeiture. |
Summary Compensation Table
2024 Stock Awards include PSU grants for each named executive officer. Such grants assume the target amount of PSUs is awarded, although the grants are contingent upon the level of attainment of performance goals for the three-year period from June 1, 2023 ending May 31, 2026. If the maximum amount of PSUs is awarded for each named executive officer, the grant date fair value of such awards would be as follows: for Mr. Sullivan, $8,939,556; for each of Messrs. Gordon, Moore and Kinser, and Ms. Kastner, $1,477,458.
Summary Compensation Table
| (4) The amounts set forth in this column were earned during fiscal 2024 and paid in July 2024, earned during fiscal 2023 and paid in July 2023 and earned during fiscal 2022 and paid in July 2022 for 2024, 2023 and 2022, respectively, under our Incentive Plan. |
Summary Compensation Table
| (5) The amounts set forth in this column reflect the change in present value of the executive officer’s accumulated benefits under the RPM International Inc. Retirement Plan (the “Retirement Plan”). During 2024, 2023 and 2022, there were no above-market or preferential earnings on nonqualified deferred compensation. The increase in present values is due to the increase in accrued benefit from the prior year as well as the discounting time period. These are partially offset by the increase in discount rate and the increase in short-term lump sum interest rates. |
Summary Compensation Table
| (6) All Other Compensation includes Company contributions to the 401(k) plan, life insurance premiums, automobile allowances, financial/estate planning, periodic executive physical examinations and charitable matching programs. For each named executive officer for whom the total value of all personal benefits exceed $10,000 in fiscal 2024, the amount of incremental cost to the Company for each personal benefit listed below, if applicable and to the extent such cost exceeded the greater of $25,000 or 10% of the total personal benefits for such named executive officer is as follows: life insurance premiums: Mr. Sullivan $192,905, Mr. Moore $140,961 and Mr. Gordon $26,317; and leased automobile: Mr. Sullivan $26,089 and Mr. Moore $26,868. Life insurance coverage amounts have not changed for these named executive officers. However, as each named executive officer ages, life insurance premiums increase. |
Summary Compensation Table
| 50 | 2024 Proxy Statement | |
Pay Ratio Disclosure
Pay Ratio Disclosure For fiscal 2024, we estimate that the ratio of the total annual compensation of our Chief Executive Officer ($11,742,464) to the total annual compensation of our median employee ($60,654) is 194:1. We determined our median employee based on total cash and equity compensation paid to our active employees as of March 1, 2024. We included all full time, part time, seasonal and temporary employees, whether employed domestically or overseas, and whether employed directly or by a consolidated subsidiary. Compensation for employees hired during the fiscal year was annualized. Once the median employee was identified, total annual compensation for the employee was calculated using the same methodology used for our named executive officers as set forth in the 2024 Summary Compensation Table above.
Grants of Plan-Based Awards for Fiscal 2024
Grants of Plan-Based Awards for Fiscal 2024
Grants of Plan-Based Awards for Fiscal 2024
| | | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Possible Payouts Under Equity Incentive Plan Awards | | | All Other Stock Awards: Number of Shares of Stock or Units (#) (i) | All Other Option Awards: Number of Securities Underlying Options (#) (j) | Exercise or Base Price of Option Awards ($/Sh) (k) | Grant Date Fair Value of Stock and Option Awards ($)(2) (I) | | Name (a) | Grant Date (b) | Threshold ($) (c) | Target ($) (d) | Maximum ($) (e) | Threshold (#) (f) | Target (#) (g) | Maximum (#) (h) | | | | | | Frank C. Sullivan | Incentive Plan Award | | 1,331,250 | 2,000,000 | | | | | | | | | | 7/18/24 PERS(4) | | | | 6,550 | 13,100 | 16,375 | 11,140 | | | 1,272,856 | | | 7/19/23 PSUs(5) | | | | | | | 47,800 | | | 4,469,778 | | | 7/19/23 SARs(6) | | | | | | | | 126,000 | $93.51 | 3,029,040 | | Russell L. Gordon | 7/19/23 SERP Restricted Stock(3) | | | | | | | 1,541 | | | 144,099 | | | Incentive Plan Award | | 575,000 | 862,500 | | | | | | | | | | 7/18/24 PERS(4) | | | | 1,100 | 2,200 | 2,750 | 1,870 | | | 213,666 | | | 7/19/23 PSUs(5) | | | | | | | 7,900 | | | 738,729 | | | 7/19/23 SARs(6) | | | | | | | | 20,800 | $93.51 | 500,032 | | Edward W. Moore | Incentive Plan Award | | 455,000 | 682,500 | | | | | | | | | | 7/18/24 PERS(4) | | | | 1,100 | 2,200 | 2,750 | 1,870 | | | 213,666 | | | 7/19/23 PSUs(5) | | | | | | | 7,900 | | | 738,729 | | | 7/19/23 SARs(6) | | | | | | | | 20,800 | $93.51 | 500,032 | | Janeen B. Kastner | 7/19/23 SERP Restricted Stock(3) | | | | | | | 1,659 | | | 155,133 | | | Incentive Plan Award | | 445,000 | 667,500 | | | | | | | | | | 7/18/24 PERS(4) | | | | 1,100 | 2,200 | 2,750 | 1,870 | | | 213,666 | | | 7/19/23 PSUs(5) | | | | | | | 7,900 | | | 738,729 | | | 7/19/23 SARs(6) | | | | | | | | 20,800 | $93.51 | 500,032 | | Timothy R. Kinser | 7/19/23 SERP Restricted Stock(3) | | | | | | | 1,011 | | | 94,539 | | | Incentive Plan Award | | 420,000 | 630,000 | | | | | | | | | | 7/18/24 PERS(4) | | | | 1,100 | 2,200 | 2,750 | 1,870 | | | 213,666 | | | 7/19/23 PSUs(5) | | | | | | | 7,900 | | | 738,729 | | | 7/19/23 SARs(6) | | | | | | | | 20,800 | $93.51 | 500,032 |
Grants of Plan-Based Awards for Fiscal 2024
| (1) These columns show the possible payouts for each named executive officer under the Incentive Plan for fiscal 2024 based on the goals set in early fiscal 2024. Detail regarding actual awards under the Incentive Plan is reported in the Summary Compensation Table and is included in the Compensation Discussion and Analysis. |
Grants of Plan-Based Awards for Fiscal 2024
| (2) The values included in this column represent the grant date fair value of restricted stock computed in accordance with ASC 718, except no assumptions for forfeitures were included. A discussion of the assumptions used in calculating the compensation cost is set forth in Note J of the Notes to Consolidated Financial Statements of our 2024 Annual Report on Form 10-K. |
Grants of Plan-Based Awards for Fiscal 2024
| | 2024 Proxy Statement | 51 |
Grants of Plan-Based Awards for Fiscal 2024
| (3) Shares of SERP restricted stock awarded under the 2014 Omnibus Plan. These shares vest on the earliest to occur of (a) the later of either the employee’s attainment of age 55 or the fifth anniversary of the May 31st immediately preceding the date on which the shares of restricted stock were awarded, (b) the retirement of the employee on or after the attainment of age 65 or (c) a change in control with respect to the Company. |
Grants of Plan-Based Awards for Fiscal 2024
| (4) PERS for which the threshold, target and maximum number of shares and performance goals with respect to fiscal 2024 were determined in early fiscal 2024 and are disclosed herein pursuant to Commission rules. Columns (i) and (l) show PERS actually awarded (number and value, respectively) as further described on pages 44 and 45 of this Proxy Statement. |
Grants of Plan-Based Awards for Fiscal 2024
| (5) PSU awards were made pursuant to the 2014 Omnibus Plan and are contingent upon the level of attainment of performance goals for the three-year period from June 1, 2023 ending May 31, 2026. The determination of whether and to what extent the PSU awards are achieved for such period will be made following the close of fiscal year 2026. The amounts set forth in columns (i) and (l) assume the target amount of PSUs is awarded. |
Grants of Plan-Based Awards for Fiscal 2024
| (6) SARs granted pursuant to the 2014 Omnibus Plan. These SARs vest in four equal installments, beginning July 19, 2024. |
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table Salary. Salaries paid to our named executive officers pursuant to their employment arrangements with us are set forth in the Summary Compensation Table. For fiscal 2024, salaries paid to our named executive officers accounted for the following percentages of their total compensation reported in the “Total” column of the Summary Compensation Table: Mr. Sullivan (9%), Mr. Gordon (19%), Mr. Moore (17%), Ms. Kastner (16%) and Mr. Kinser (16%). For fiscal 2023, salaries paid to our named executive officers accounted for the following percentages of their total compensation reported in the “Total” column of the Summary Compensation Table: Mr. Sullivan (16%), Mr. Gordon (25%), Mr. Moore (23%), Ms. Kastner (22%) and Mr. Kinser (23%). For fiscal 2022, salaries paid to our named executive officers accounted for the following percentages of their total compensation reported in the “Total” column of the Summary Compensation Table: Mr. Sullivan (11%), Mr. Gordon (23%), Mr. Moore (21%) and Ms. Kastner (20%). Bonus. No bonuses were awarded to our named executive officers during fiscal 2024, fiscal 2023 or fiscal 2022, although the named executive officers did receive cash awards under our Incentive Plan, as further described under the caption “Non-Equity Incentive Plan Compensation” below. Stock Awards. The amounts in the “Stock Awards” column of the “Grants of Plan-Based Awards for Fiscal 2024” table consist of restricted stock and performance earned restricted stock grants. Each of these grants is described in further detail under the heading “Compensation Discussion and Analysis – Equity Compensation.” The amounts included in the “Stock Awards” column of the Summary Compensation Table represent the grant date fair value of grants made in accordance with ASC 718. Option Awards. Pursuant to our 2014 Omnibus Plan, we award stock appreciation rights, or SARs, to our named executive officers. SARs were granted in July 2023 and are attributable to fiscal 2024 compensation for each of the named executive officers. SARs grants are described in further detail under the heading “Compensation Discussion and Analysis – Equity Compensation – Stock Appreciation Rights (SARs).” The amounts included in the “Option Awards” column of the Summary Compensation Table represent the grant date fair value of grants made in accordance with ASC 718. Non-Equity Incentive Plan Compensation. The non-equity incentive plan compensation set forth in the Summary Compensation Table reflects annual cash incentive compensation under our Incentive Plan. Annual cash incentive compensation is earned based upon the achievement of performance objectives as described under the heading “Compensation Discussion and Analysis – Annual Cash Incentive Compensation.” Change in Pension Value and Nonqualified Deferred Compensation Earnings. For each measurement date shown, the accrued benefit was determined assuming that such amounts were payable to each of our named executive officers at their earliest unreduced retirement age in the Retirement Plan – 65 years with five years of participation or the measurement date, if later. For 2022, it was assumed that 5% will be paid a life annuity, 10% will be paid a 100% joint and survivor annuity, and 85% will be paid a lump sum. For 2023 and 2024, it was assumed that 7.5% will be paid a life annuity, 7.5% will be paid a 100% joint and survivor annuity and 85% will be paid a lump sum. For calculations in the form of a life annuity:
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table
| • | As of May 31, 2022, the mortality table used was the Pri-2012 no-collar retiree generational mortality table for males and females with mortality improvements projected using Scale MP-2021, and the interest rate used to determine the present values was 4.44%. |
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table
| 52 | 2024 Proxy Statement | |
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table
| • | As of May 31, 2023, the mortality table used was the Pri-2012 no-collar retiree generational mortality table for males and females with mortality improvements projected using Scale MP-2021, and the interest rate used to determine the present values was 5.26%. |
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table
| • | As of May 31, 2024, the mortality table used was the Pri-2012 no-collar retiree generational mortality table for males and females with mortality improvements projected using Scale MP-2021, and the interest rate used to determine the present values was 5.58%. |
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table
For calculations in the form of a 100% joint and survivor annuity, the interest rate used in the conversion was 7.00%, based on the plan’s definition of actuarial equivalence. Spouses of male participants are assumed to be two years younger, and the spouses of female participants are assumed to be two years older:
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table
| • | As of May 31, 2022, the mortality table used was the applicable mortality table outline in IRC Section 417(e) projected to 2031 using Scale MP-2020, and the interest rate used to determine the present values was 4.44%. |
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table
| • | As of May 31, 2023, the mortality table used was the applicable mortality table outline in IRC Section 417(e) projected to 2032 using Scale MP-2021, and the interest rate used to determine the present values was 5.26%. |
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table
| • | As of May 31, 2024, the mortality table used was the applicable mortality table outline in IRC Section 417(e) projected to 2032 using Scale MP-2021, and the interest rate used to determine the present values was 5.58%. |
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table
For calculations under the plan in the form of a lump sum:
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table
| • | As of May 31, 2022, the mortality table used was the applicable mortality table outlined in Internal Revenue Code Section 417(e) projected to 2031 using scale MP-2020. The interest rates used to determine the present values at normal retirement date were the April 2022 segment rates (3.00% for the first five years, 4.22% for the next 15 years and 4.17% thereafter) phased in over five years to the long term expected lump sum segment rates (3.55% for the first five years, 4.07% for the next 15 years and 4.37% thereafter). The lump sum present value was then discounted back to May 31, 2022 using 4.44%. |
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table
| • | As of May 31, 2023, the mortality table used was the applicable mortality table outlined in Internal Revenue Code Section 417(e) projected to 2031 using scale MP-2021. The interest rates used to determine the present values at normal retirement date were the April 2023 segment rates (4.77% for the first five years, 4.97% for the next 15 years and 5.13% thereafter) phased in over five years to the long term expected lump sum segment rates (3.55% for the first five years, 4.07% for the next 15 years, and 4.37% thereafter). The lump sum present value was then discounted back to May 31, 2023 using 5.26%. |
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table
| • | As of As of May 31, 2024, the mortality table used was the applicable mortality table outlined in Internal Revenue Code Section 417(e) projected to 2032 using scale MP-2021. The interest rates used to determine the present values at normal retirement date were the April 2024 segment rates (5.24% for the first five years, 5.48% for the next 15 years and 5.61% thereafter) phased in over five years to the long term expected lump sum segment rates (3.55% for the first five years, 4.07% for the next 15 years, and 4.37% thereafter). The lump sum present value was then discounted back to May 31, 2024 using 5.58%. |
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table
All Other Compensation. All other compensation of our named executive officers is set forth in the Summary Compensation Table and described in detail in footnote (6) of the table. These benefits include those discussed in further detail under the heading “Compensation Discussion and Analysis – Perks and Other Benefits.” Employment Agreements and Related Arrangements. Each named executive officer is employed under an employment agreement. The terms of the employment agreements are described under the headings “Compensation Discussion and Analysis – Employment Agreements and Related Arrangements” and “Other Potential Post-Employment Compensation.” Additional Information. We have provided additional information regarding the compensation we pay to our named executive officers under the headings “Compensation Discussion and Analysis” and “Other Potential Post-Employment Compensation.”
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table
| | 2024 Proxy Statement | 53 |
Outstanding Equity Awards at Fiscal Year-End for 2024
Outstanding Equity Awards at Fiscal Year-End for 2024 The following table provides information on the holdings of SARs and restricted stock by the named executive officers at May 31, 2024.
Outstanding Equity Awards at Fiscal Year-End for 2024
| | Option Awards | | | | | Stock Awards | | | | | Name (a) | Number of Securities Underlying Unexercised Options (#) Exercisable (b) | Number of Securities Underlying Unexercised Options (#) Unexercisable (c) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) (d) | Option Exercise Price ($) (e) | Option Expiration Date (f) | Number of Shares or Units of Stock That Have Not Vested (#) (g) | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) (h) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(2) (i) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(3) (j) | | Frank C. Sullivan | | | | | | | | | | | SERP | | | | | | 1,844(4) | 206,712 | | | | PERS | | | | | | 31,550(5) | 3,536,755 | | | | PERS | | | | | | | | 16,375(6) | 1,835,638(6) | | PSUs | | | | | | | | 241,200(7) | 27,038,520(7) | | SARs | 210,000 | 0 | | 60.0100 | 7/16/2028 | | | | | | | 200,000 | 0 | | 62.1700 | 7/18/2029 | | | | | | | 150,000 | 50,000(8) | | 78.4900 | 7/22/2030 | | | | | | | 100,000 | 100,000(9) | | 86.9300 | 7/21/2031 | | | | | | | 50,000 | 150,000(10) | | 81.0100 | 7/18/2032 | | | | | | | 0 | 126,000(11) | | 93.5100 | 7/19/2033 | | | | | | Russell L. Gordon | | | | | | | | | | | SERP | | | | | | 8,557(12) | 959,240 | | | | PERS | | | | | | 8,100(13) | 908,010 | | | | PERS | | | | | | | | 2,750(6) | 308,275(6) | | PSUs | | | | | | | | 45,000(7) | 5,044,500(7) |
Outstanding Equity Awards at Fiscal Year-End for 2024
| 54 | 2024 Proxy Statement | |
Outstanding Equity Awards at Fiscal Year-End for 2024
| | Option Awards | | | | | Stock Awards | | | | | Name (a) | Number of Securities Underlying Unexercised Options (#) Exercisable (b) | Number of Securities Underlying Unexercised Options (#) Unexercisable (c) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) (d) | Option Exercise Price ($) (e) | Option Expiration Date (f) | Number of Shares or Units of Stock That Have Not Vested (#) (g) | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) (h) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(2) (i) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(3) (j) | | Russell L. Gordon (continued) SARs | 30,000 | 0 | | 47.1400 | 7/20/2025 | | | | | | | 30,000 | 0 | | 50.9900 | 7/25/2026 | | | | | | | 30,000 | 0 | | 55.1900 | 7/17/2027 | | | | | | | 30,000 | 0 | | 60.0100 | 7/16/2028 | | | | | | | 20,000 | 0 | | 62.1700 | 7/18/2029 | | | | | | | 15,000 | 5,000(8) | | 78.4900 | 7/22/2030 | | | | | | | 10,000 | 10,000(9) | | 86.9300 | 7/21/2031 | | | | | | | 5,000 | 15,000(10) | | 81.0100 | 7/18/2032 | | | | | | | 0 | 20,800(11) | | 93.5100 | 7/19/2033 | | | | | | Edward W. Moore | | | | | | | | | | | SERP | | | | | | 1,025(14) | 114,903 | | | | PERS | | | | | | 8,100(15) | 908,010 | | | | PERS | | | | | | | | 2,750(6) | 308,275(6) | | PSUs | | | | | | | | 45,000(7) | 5,044,500(7) | | SARs | 0 | 5,000(8) | | 78.4900 | 7/22/2030 | | | | | | | 0 | 10,000(9) | | 86.9300 | 7/21/2031 | | | | | | | 0 | 15,000(10) | | 81.0100 | 7/18/2032 | | | | | | | 0 | 20,800(11) | | 93.5100 | 7/19/2033 | | | | | | Janeen B. Kastner | | | | | | | | | | | SERP | | | | | | 7,669(16) | 859,695 | | | | PERS | | | | | | 8,100(17) | 908,010 | | | | PERS | | | | | | | | 2,750(6) | 308,275(6) | | PSUs | | | | | | | | 45,000(7) | 5,044,500(7) |
Outstanding Equity Awards at Fiscal Year-End for 2024
| | 2024 Proxy Statement | 55 |
Outstanding Equity Awards at Fiscal Year-End for 2024
| | Option Awards | | | | | Stock Awards | | | | | Name (a) | Number of Securities Underlying Unexercised Options (#) Exercisable (b) | Number of Securities Underlying Unexercised Options (#) Unexercisable (c) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) (d) | Option Exercise Price ($) (e) | Option Expiration Date (f) | Number of Shares or Units of Stock That Have Not Vested (#) (g) | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) (h) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(2) (i) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(3) (j) | | Janeen B. Kastner (continued) SARs | 30,000 | 0 | | 50.9900 | 7/25/2026 | | | | | | | 30,000 | 0 | | 55.1900 | 7/17/2027 | | | | | | | 30,000 | 0 | | 60.0100 | 7/16/2028 | | | | | | | 20,000 | 0 | | 62.1700 | 7/18/2029 | | | | | | | 15,000 | 5,000(8) | | 78.4900 | 7/22/2030 | | | | | | | 10,000 | 10,000(9) | | 86.9300 | 7/21/2031 | | | | | | | 5,000 | 15,000(10) | | 81.0100 | 7/18/2032 | | | | | | | 0 | 20,800(11) | | 93.5100 | 7/19/2033 | | | | | | Timothy R. Kinser | | | | | | | | | | | SERP | | | | | | 3,205(18) | 359,281 | | | | PERS | | | | | | 6,300(19) | 706,230 | | | | PERS | | | | | | | | 2,750(6) | 308,275(6) | | PSUs | | | | | | | | 36,200(7) | 4,058,020(7) | | SARs | 5,000 | 15,000(10) | | 81.0100 | 7/18/2032 | | | | | | | 0 | 20,800(11) | | 93.5100 | 7/19/2033 | | | | |
Outstanding Equity Awards at Fiscal Year-End for 2024
| (1) Market value of Common Stock reported in column (h) was calculated by multiplying $112.10, the closing market price of the Company’s Common Stock on May 31, 2024, the last business day of fiscal 2024, by the number of shares. |
Outstanding Equity Awards at Fiscal Year-End for 2024
| (2) Represents the maximum number of shares that could be paid out. |
Outstanding Equity Awards at Fiscal Year-End for 2024
| (3) Market value of equity incentive awards of stock reported in column (j) was calculated by multiplying the closing market price of the Company’s Common Stock on May 31, 2024, the last business day of fiscal 2024, by the maximum number of shares that could be paid out. |
Outstanding Equity Awards at Fiscal Year-End for 2024
| (4) These shares of SERP restricted stock vest on the fifth anniversary of the May 31st immediately preceding the date on which each grant of restricted stock was made. These shares could vest earlier upon the death or disability of Mr. Sullivan, upon termination without cause, or upon a change of control of the Company prior to those dates. |
Outstanding Equity Awards at Fiscal Year-End for 2024
| (5) These PERS vest according to the following schedule: 21,150 on July 21, 2024 and 10,400 on July 19, 2026. |
Outstanding Equity Awards at Fiscal Year-End for 2024
| (6) In early fiscal 2023, the Compensation Committee determined the maximum number of and performance goals for the award of PERS with respect to fiscal 2024. Market value reported in column (j) was calculated by multiplying the closing market price of the Company’s Common Stock on May 31, 2024 by the estimated number of shares in column (i). |
Outstanding Equity Awards at Fiscal Year-End for 2024
| (7) The PSU awards were made pursuant to the 2014 Omnibus Plan and are contingent upon the level of attainment of performance goals for the three-year period from June 1, 2021 ending May 31, 2024, the three-year period from June 1, 2022 ending May 31, 2025 and the three-year period from June 1, 2023 ending May 31, 2026. The determination of whether and to what extent the PSU awards are achieved will be made following the close of fiscal year 2024, fiscal year 2025 and fiscal year 2026, respectively. The amounts set forth in columns (i) and (j) assume the maximum amount of PSUs are awarded. |
Outstanding Equity Awards at Fiscal Year-End for 2024
| 56 | 2024 Proxy Statement | |
Outstanding Equity Awards at Fiscal Year-End for 2024
In July 2024, the Compensation Committee determined that that 57.5% of the performance goals for the three-year period from June 1, 2021 ending May 31, 2024 were attained. Accordingly, each recipient earned 57.5% of the recipient’s grant, and forfeited 42.5% of such grant.
Outstanding Equity Awards at Fiscal Year-End for 2024
| (8) These SARs become exercisable on July 22, 2024. |
Outstanding Equity Awards at Fiscal Year-End for 2024
| (9) These SARs become exercisable in two equal installments on July 21, 2024 and July 21, 2025. |
Outstanding Equity Awards at Fiscal Year-End for 2024
| (10) These SARs become exercisable in three equal installments on July 18, 2024, July 18, 2025 and July 18, 2026. |
Outstanding Equity Awards at Fiscal Year-End for 2024
| (11) These SARs become exercisable in four equal installments on July 19, 2024, July 19, 2025, July 19, 2026 and July 19, 2027. |
Outstanding Equity Awards at Fiscal Year-End for 2024
| (12) These shares of SERP restricted stock vest on the fifth anniversary of the May 31st immediately preceding the date on which each grant of restricted stock was made. These shares could vest earlier upon the death or disability of Mr. Gordon, upon termination without cause, or upon a change in control of the Company prior to that date. |
Outstanding Equity Awards at Fiscal Year-End for 2024
| (13) These PERS vest according to the following schedule: 5,400 shares on July 21, 2024 and 2,700 shares on July 19, 2026. |
Outstanding Equity Awards at Fiscal Year-End for 2024
| (14) These shares of SERP restricted stock vest on the fifth anniversary of the May 31st immediately preceding the date on which each grant of restricted stock was made. These shares could vest earlier upon the death or disability of Mr. Moore, upon termination without cause, or upon a change in control of the Company prior to those dates. |
Outstanding Equity Awards at Fiscal Year-End for 2024
| (15) These PERS vest according to the following schedule: 5,400 shares on July 21, 2024 and 2,700 shares on July 19, 2026. |
Outstanding Equity Awards at Fiscal Year-End for 2024
| (16) These shares of SERP restricted stock vest on the fifth anniversary of the May 31st immediately preceding the date on which each grant of restricted stock was made. These shares could vest earlier upon the death or disability of Ms. Kastner, upon termination without cause, or upon a change in control of the Company prior to that date. |
Outstanding Equity Awards at Fiscal Year-End for 2024
| (17) These PERS vest according to the following schedule: 5,400 shares on July 21, 2024 and 2,700 shares on July 19, 2026. |
Outstanding Equity Awards at Fiscal Year-End for 2024
| (18) These shares of SERP restricted stock vest on the fifth anniversary of the May 31st immediately preceding the date on which each grant of restricted stock was made. These shares could vest earlier upon the death or disability of Mr. Kinser, upon termination without cause, or upon a change in control of the Company prior to those dates. |
Outstanding Equity Awards at Fiscal Year-End for 2024
| (19) These PERS vest according to the following schedule: 3,600 shares on July 21, 2024 and 2,700 shares on July 19, 2026. |
Option Exercises and Stock Vested during Fiscal 2024
Option Exercises and Stock Vested during Fiscal 2024 This table provides information for the named executive officers on SAR exercises and restricted stock vesting during fiscal 2024, including the number of shares acquired upon exercise and the value realized, before payment of any applicable withholding tax and broker commissions.
Option Exercises and Stock Vested during Fiscal 2024
| | Option Awards | | Stock Awards | | | Name (a) | Number of Shares Acquired on Exercise (#) (b) | Value Realized on Exercise ($) (c) | Number of Shares Acquired on Vesting (#) (d) | Value Realized on Vesting ($) (e) | | Frank C. Sullivan | 400,000 | 18,580,000 | 68,000 | 6,348,600 | | Russell L. Gordon | 30,000 | 2,071,500 | 17,793 | 1,722,520 | | Edward W. Moore | 30,000 | 738,500 | 15,399 | 1,454,153 | | Janeen B. Kastner | 30,000 | 2,000,700 | 16,457 | 1,572,755 | | Timothy R. Kinser | 0 | 0 | 7,695 | 735,447 |
Option Exercises and Stock Vested during Fiscal 2024
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Pension Benefits for Fiscal 2024
Pension Benefits for Fiscal 2024
Pension Benefits for Fiscal 2024
| Name (a) | Plan Name (b) | Number of Years Credited Service at Fiscal Year End (c) | Present Value of Accumulated Benefit ($) (d) | Payments During Last Fiscal Year ($) (e) | | Frank C. Sullivan | RPM International Inc. Retirement Plan | 35.3 | 1,219,734 | 0 | | Russell L. Gordon | RPM International Inc. Retirement Plan | 29.3 | 819,287 | 0 | | Edward W. Moore | RPM International Inc. Retirement Plan | 17.6 | 717,124 | 0 | | Janeen B. Kastner | RPM International Inc. Retirement Plan | 27.3 | 755,313 | 0 | | Timothy R. Kinser | RPM International Inc. Retirement Plan | 16.8 | 615,798 | 0 |
Pension Benefits for Fiscal 2024
The preceding table shows the present value of accumulated benefits payable to each named executive officer, including each such named executive officer’s number of years of credited service, under our Retirement Plan determined using interest rate and mortality rate assumptions consistent with those used in our financial statements. The Retirement Plan is a funded and tax qualified retirement plan. The monthly benefit provided by the Retirement Plan’s formula on a single life annuity basis is equal to the sum of 22.5% of a participant’s average monthly compensation, reduced pro rata for years of benefit service (as defined in the Retirement Plan) less than 30 years, plus 22.5% of a participant’s average monthly compensation in excess of his or her monthly Social Security covered compensation, reduced pro rata for years of benefit service less than 35 years. Average monthly compensation is the average monthly compensation earned during the 60 consecutive months providing the highest such average during the last 120 months preceding the applicable determination date. The compensation used to determine benefits under the Retirement Plan is generally a participant’s W-2 compensation, adjusted for certain amounts, but may not exceed the limit under the Internal Revenue Code which is applicable to tax qualified plans ($330,000 for 2023). Compensation for each of the named executive officers during 2023 only includes $330,000 of the amount shown for 2023 in column (c) of the Summary Compensation Table. A participant’s Social Security covered compensation is based on the average of the Social Security taxable wage bases in effect during the 35-year period ending with his or her attainment of the Social Security retirement age assuming his or her compensation is and has always been at least equal to the taxable wage base. Benefits are payable as an annuity or in a single lump sum payment and are actuarially adjusted to reflect payment in a form other than a life annuity. Life annuity benefits are unreduced if paid on account of normal retirement or completion of 40 years of vesting service (as defined in the Retirement Plan). Normal retirement age is when a participant attains age 65 and, in general, has completed five years of service. Benefits are reduced for early commencement by multiplying the accrued benefit by an early retirement factor. Participants vest in the Retirement Plan after five years of vesting service.
Pension Benefits for Fiscal 2024
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Nonqualified Deferred Compensation for Fiscal 2024
Nonqualified Deferred Compensation for Fiscal 2024
Nonqualified Deferred Compensation for Fiscal 2024
| Name (a) | Executive Contributions in Last FY ($) (b) | Registrant Contributions in Last FY ($) (c) | Aggregate Earnings in Last FY ($)(1) (d) | Aggregate Withdrawals/ Distributions ($) (e) | Aggregate Balance at Last FYE ($) (f) | | Frank C. Sullivan | 0 | 0 | 0 | 0 | 0 | | Russell L. Gordon | 0 | 0 | 0 | 0 | 0 | | Edward W. Moore | 0 | 0 | 0 | 0 | 0 | | Janeen B. Kastner | 187,000 | 0 | 266,712 | 0 | 1,608,217 | | Timothy R. Kinser | 126,000 | 0 | 149,433 | 0 | 1,247,035 |
Nonqualified Deferred Compensation for Fiscal 2024
| (1) None of the earnings in this column, if any, would be included in the Summary Compensation Table because they were not preferential or above market. |
Nonqualified Deferred Compensation for Fiscal 2024
The preceding table provides information on the nonqualified deferred compensation of the continuing named executive officers in fiscal 2024. Participants in the RPM International Inc. Deferred Compensation Plan (“Deferred Compensation Plan”), including the named executive officers, may defer up to 90% of their base salary and non-equity incentive plan compensation. A participant’s deferrals are credited to a bookkeeping account under the Deferred Compensation Plan. A participant may direct that his or her account be deemed to be invested in the Company’s Common Stock or investments that are selected by the administrative committee of the Deferred Compensation Plan. The participant’s account is credited with phantom earnings or losses based on the investment performance of the deemed investment. A participant may change the investment funds used to calculate the investment performance of his or her account on a daily basis. Deferrals of base salary and annual bonus amounts, earnings on such amounts and stock dividends credited to a participant’s account are 100% vested. Distribution from a participant’s account is payable in a lump sum at a specified time, or upon retirement, death, termination of employment or disability prior to retirement. In the case of retirement, a participant may also elect annual installments for up to 10 years. Upon approval of the Compensation Committee, amounts can also be distributed as a result of an unforeseeable financial emergency. Earlier withdrawal of deferred compensation earned and vested as of December 31, 2004 is available but is subject to a 10% penalty.
Estimated Payments on Termination or Change in Control
Estimated Payments on Termination or Change in Control
Estimated Payments on Termination or Change in Control
| Event | Frank C. Sullivan | Russell L. Gordon | Edward W. Moore | Janeen B. Kastner | Timothy R. Kinser | | Retirement | | | | | | | Accelerated SARs | $11,203,340 | $1,272,772 | $1,272,772 | $1,272,772 | $853,022 | | Accelerated PERS | 3,536,755 | 908,010 | 908,010 | 908,010 | 706,230 | | Accelerated SERP restricted stock | 0 | 0 | 114,903 | 0 | 0 | | Total | $14,740,095 | $2,180,782 | $2,295,685 | $2,180,782 | $1,559,252 | | Death | | | | | | | Earned incentive compensation | $1,580,000 | $542,333 | $427,667 | $417,000 | $405,000 | | Accelerated SARs | 11,203,340 | 1,272,772 | 1,272,772 | 1,272,772 | 853,022 | | Accelerated PERS | 3,536,755 | 908,010 | 908,010 | 908,010 | 706,230 | | Accelerated SERP restricted stock | 206,712 | 959,240 | 114,903 | 859,695 | 359,281 | | Total | $16,526,807 | $3,682,355 | $2,723,352 | $3,457,477 | $2,323,533 | | Disability | | | | | | | Earned incentive compensation | $1,580,000 | $542,333 | $427,667 | $417,000 | $405,000 | | Accelerated SARs | 11,203,340 | 1,272,772 | 1,272,772 | 1,272,772 | 853,022 | | Accelerated PERS | 3,536,755 | 908,010 | 908,010 | 908,010 | 706,230 | | Accelerated SERP restricted stock | 206,712 | 959,240 | 114,903 | 859,695 | 359,281 | | Total | $16,526,807 | $3,682,355 | $2,723,352 | $3,457,477 | $2,323,533 | | Voluntary Termination and Termination for Cause | | | | | | | No payments | N/A | N/A | N/A | N/A | N/A | | Total | $0 | $0 | $0 | $0 | $0 | | Involuntary Termination Without Cause and not within Two Years of a Change in Control | | | | | | | Lump sum | $7,935,000 | $1,404,833 | $1,337,667 | $1,084,500 | $1,035,000 | | Health and welfare benefits | 82,476 | 41,238 | 54,984 | 37,386 | 37,386 | | Estate and financial planning | 16,000 | 16,000 | 16,000 | 16,000 | 16,000 | | Executive life insurance coverage | 643,588 | 44,870 | 281,922 | 30,918 | 0 | | Cash value of SERP Grant | 0 | 259,119 | 0 | 278,961 | 170,000 | | Accelerated SERP restricted stock | 206,712 | 959,240 | 114,903 | 859,695 | 359,281 | | Total | $8,883,776 | $2,725,300 | $1,805,476 | $2,307,460 | $1,617,667 | | Involuntary Termination Without Cause or Resignation for Good Reason within Two Years of a Change in Control | | | | | | | Lump sum | $7,935,000 | $1,404,833 | $1,792,667 | $1,084,500 | $1,035,000 | | Health and welfare benefits | 82,476 | 41,238 | 82,476 | 37,386 | 37,386 | | Estate and financial planning | 32,000 | 16,000 | 32,000 | 16,000 | 16,000 |
Estimated Payments on Termination or Change in Control
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Estimated Payments on Termination or Change in Control
| Event | Frank C. Sullivan | Russell L. Gordon | Edward W. Moore | Janeen B. Kastner | Timothy R. Kinser | | Executive life insurance coverage | 1,105,764 | 77,091 | 726,566 | 53,120 | 0 | | Cash value of SERP Grant | 0 | 259,119 | 0 | 278,961 | 170,000 | | Accelerated SERP restricted stock | 206,712 | 959,240 | 114,903 | 859,695 | 359,281 | | Accelerated PSUs, PERS and SARs | 28,259,355 | 4,703,032 | 4,703,032 | 4,703,032 | 3,588,262 | | Outplacement assistance | 20,000 | 20,000 | 20,000 | 20,000 | 20,000 | | Excise taxes | 0 | 0 | 0 | 0 | 0 | | Total | $37,641,307 | $7,480,553 | $7,471,644 | $7,052,694 | $5,225,929 | | Change in Control Only | | | | | | | Accelerated SERP restricted stock | $206,712 | $959,240 | $114,903 | $859,695 | $0 | | Accelerated PSUs, PERS and SARs | 28,259,355 | 4,703,032 | 4,703,032 | 4,703,032 | 0 | | Excise taxes | 0 | 0 | 0 | 0 | 0 | | Total | $28,466,067 | $5,662,272 | $4,817,935 | $5,562,727 | $0 |
Pay Versus Performance
Pay Versus Performance Commission rules adopted in 2022 pursuant to the Dodd-Frank Act require most companies with publicly traded stock in the United States to describe the relationship between compensation actually paid (“CAP”) to their named executive officers, as calculated in accordance with the Commission’s rules, and the Company’s performance represented by total stockholder return (“TSR”), net income and a Company-selected financial performance measure. To determine the executive compensation that is “actually paid” for the principal executive officer (the “PEO”) and non-PEO named executive officers (“non-PEO NEOs”) in a given year, companies are required to make certain adjustments to the total executive compensation reported in the summary compensation table (“SCT”) for pension and equity awards that are calculated in accordance with U.S. GAAP. For the pension adjustment, the aggregate change in the pension value as reflected in the SCT is deducted and the service cost and prior service cost for the year is included. For equity awards, the grant date value as reported in the SCT is subtracted and a new value is added, which is calculated as follows: the year-end fair value of awards granted in the current fiscal year plus or minus the annual change in fair value as of the year-end for any unvested awards or as of vesting for awards vested in the current year. We disclose below pay versus performance information, including the relationship between CAP, as calculated in accordance with the Commission’s rules, and Company performance.
Pay Versus Performance
| Fiscal Year (a) | Summary Compensation Table Total for PEO(1) (b) | Compensation Actually Paid to PEO(1)(2) (c) | Average Summary Compensation Table Total for non-PEO NEOs(1) (d) | Average Compensation Actually Paid to non-PEO NEOs(1)(2) (e) | Value of Initial Fixed $100 Investment Based on: | | Net Income ($ millions) (h) | Adjusted EBIT Margin %(4) (i) | | | | | | | Total Stockholder Return (f) | Peer Group Total Stockholder Return(3) (g) | | | | 2024 | $11,742,464 | $17,696,905 | $2,736,524 | $3,264,453 | $161 | $161 | $589 | 12.80% | | 2023 | $6,409,875 | $2,455,691 | $1,896,793 | $899,192 | $113 | $129 | $480 | 11.60% | | 2022 | $9,053,579 | $7,302,470 | $1,823,206 | $1,182,894 | $122 | $141 | $492 | 10.60% | | 2021 | $11,924,334 | $27,144,470 | $2,741,863 | $5,185,029 | $127 | $156 | $504 | 12.85% |
Pay Versus Performance
| (1) The PEO for fiscal 2024, fiscal 2023, fiscal 2022 and fiscal 2021 was Mr. Sullivan, the Chief Executive Officer. In fiscal 2024 and fiscal 2023, the non-PEO NEOs were Messrs. Gordon, Moore and Kinser and Ms. Kastner. In fiscal 2022, the non-PEO NEOs were Messrs. Gordon, Moore, Kinser and Michael Sullivan and Ms. Kastner. In fiscal 2021, the non-PEO NEOs were Messrs. Gordon, Moore and Michael Sullivan and Ms. Kastner. |
Pay Versus Performance
| (2) The following amounts were deducted from/added to Summary Compensation Table: total compensation in accordance with the Commission-mandated adjustments to calculate CAP to the Company’s PEO and average CAP to the Company’s non-PEO NEOs. The fair value of equity awards was determined using methodologies and assumptions developed in a manner substantively consistent with those used to determine the grant date fair value of such awards. |
Pay Versus Performance
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Director Compensation for Fiscal 2024
Director Compensation for Fiscal 2024 The following table sets forth information regarding the compensation of our non-employee Directors for fiscal 2024. Mr. Sullivan, our Chair and Chief Executive Officer, does not receive any additional compensation for his service as a Director.
Director Compensation for Fiscal 2024
| Name (a) | Fees Earned or Paid in Cash ($)(1) (b) | Stock Awards ($)(2) (c) | Option Awards ($) (d) | Non-Equity Incentive Plan Compensation ($) (e) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) (f) | All Other Compensation ($) (g) | Total ($) (h) | | Kirkland B. Andrews | 100,000 | 177,498 | 0 | 0 | 0 | 0 | 277,498 | | John M. Ballbach | 100,000 | 177,498 | 0 | 0 | 0 | 0 | 277,498 | | Bruce A. Carbonari | 135,000 | 177,498 | 0 | 0 | 0 | 0 | 312,498 | | Jenniffer D. Deckard | 100,000 | 177,498 | 0 | 0 | 0 | 0 | 277,498 | | Salvatore D. Fazzolari | 120,000 | 177,498 | 0 | 0 | 0 | 2,500(3) | 299,998 | | Julie A. Lagacy(4) | 50,000 | 0 | 0 | 0 | 0 | 0 | 50,000 | | Robert A. Livingston | 120,000 | 177,498 | 0 | 0 | 0 | 0 | 297,498 | | Frederick R. Nance | 120,000 | 177,498 | 0 | 0 | 0 | 2,500(3) | 299,998 | | Ellen M. Pawlikowski | 100,000 | 177,498 | 0 | 0 | 0 | 2,500(3) | 279,998 | | William B. Summers, Jr. | 100,000 | 177,498 | 0 | 0 | 0 | 0 | 277,498 | | Elizabeth F. Whited | 100,000 | 177,498 | 0 | 0 | 0 | 0 | 277,498 |
Director Compensation for Fiscal 2024
| (1) Cash fees include fees for attending Board and Committee meetings in fiscal 2024 as well as the quarterly retainer amount for serving on the Board of Directors and as the chair for a committee during fiscal 2024. |
Director Compensation for Fiscal 2024
| (2) The amounts set forth in this column reflect the fair market value of shares of restricted stock granted during fiscal 2024 under the 2014 Omnibus Plan. |
Director Compensation for Fiscal 2024
The unvested number of shares of restricted stock held by Directors under the 2003 Restricted Stock Plan for Directors at May 31, 2024 was as follows: Mr. Andrews (5,500), Mr. Ballbach (5,500), Mr. Carbonari (5,500), Ms. Deckard (5,500), Mr. Fazzolari (5,500), Mr. Livingston (5,500), Mr. Nance (5,500), Gen. Pawlikowski (3,700), Mr. Summers (5,500) and Ms. Whited (3,700). Dividends are paid on shares of restricted stock at the same rate as paid on our Common Stock that is not restricted. On October 31, 2023, shares of restricted stock awarded in 2020 vested and were delivered to the Directors.
Director Compensation for Fiscal 2024
| (3) These amounts represent the dollar value that RPM matches of the Director’s charitable contributions made in accordance with our employee charitable contributions matching program. RPM matches a Director’s charitable contributions by up to $2,500 per year under this program, which is also available to RPM International Inc. employees. These amounts are not taxable to the Directors. |
Director Compensation for Fiscal 2024
| (4) Ms. Lagacy retired from the Board of Directors as of October 5, 2023. |
Director Compensation for Fiscal 2024
For fiscal 2024, Directors who are not employees of or consultants to the Company received a quarterly fee of $25,000. In addition, each of the Audit Committee Chair, the Compensation Committee Chair and the Governance and Nominating Committee Chair received a quarterly fee of $5,000. The Lead Director also received a total quarterly retainer of $8,750, representing the sum of any Committee Chair fee plus a Lead Director fee. With respect to equity compensation, Directors (other than Mr. Sullivan) were granted a number of shares of restricted stock in an amount with a target value of $165,000. In July 2012, the Company adopted minimum stock ownership guidelines for its executive officers and Directors under which each Director who had served on the Board of Directors for at least five years was expected to own Common Stock with a value of at least four times the annual cash retainer for Directors. In July 2014, the Company increased the minimum stock ownership guidelines for its Directors from four times to five times the annual cash retainer for Directors. Directors are expected to achieve targets within five years of the date of such Director’s initial appointment as a Director. Each of the Company’s Directors meets the minimum stock ownership guidelines or is within the grace period provided by the stock ownership guidelines to achieve compliance.
Director Compensation for Fiscal 2024
| Under the Company’s stock ownership guidelines for Directors, each Director who has served on the Board of Directors for at least five years is expected to own Common Stock with a value of at least five times the annual cash retainer for Directors. |
Director Compensation for Fiscal 2024
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