DEF 14A of Strattec Security Corp
Filed Sep 7, 2023 · FY20230001193125-23-230022
PROPOSAL 1: ELECTION OF DIRECTORS
PROPOSAL 1: ELECTION OF DIRECTORS The proxies appointed in the accompanied form of proxy are expected to vote for the election of the nominee directors noted in the table below to serve as directors of STRATTEC. Our Board of Directors is divided into three classes, with the term of office of each class ending in successive years. Three directors are to be elected at the Annual Meeting to serve for a term of three years expiring in 2026 and four directors will continue to serve for the terms designated in the table shown below. As indicated below, the individuals nominated by our Board of Directors for election at the Annual Meeting are each an incumbent director, other than Bruce M. Lisman and F. Jack Liebau, Jr., who are each a new director nominee originally recommended by one of our shareholders. The table below also provides brief biographies of each of our incumbent and nominee directors, including the nominee directors for this year’s Annual Meeting. We anticipate that the nominees listed in this Proxy Statement will be candidates when the election is held. However, if an unexpected occurrence should make it necessary, in the judgment of the proxy holders, to substitute some other person for a nominee director, proxies will be voted for a substitute nominee selected by the proxy holders (except where a proxy withholds authority with respect to the election of directors). Michael J. Koss, one of our incumbent members of our Board of Directors, will not be standing for re-election at the Annual Meeting. Mr. Koss has served as one of our directors since 1995, and he is a member of each of our Audit, Compensation and Nominating and Corporate Governance Committees and chair of the Nominating and Corporate Governance Committee. Mr. Koss’ service on these committees will end in connection with the Annual Meeting. We want to thank Mr. Koss for his years of dedicated service and his passion for STRATTEC.
Director Independence
Director Independence Our Board of Directors has reviewed the independence of our continuing directors and the nominees for election to the Board at the Annual Meeting under the applicable listing standards of the NASDAQ Stock Market. Based on this review, our Board of Directors determined that each of the following directors is independent under the NASDAQ Stock Market listing standards: (1) Tina Chang (2) Thomas W. Florsheim, Jr. (3) Michael J. Koss * (4) Harold M. Stratton II (5) David R. Zimmer (6) Bruce M. Lisman (7) F. Jack Liebau, Jr.
Director Independence
| * Mr. Koss is retiring from the Board of Directors at the Annual Meeting and will not stand for re-election at the Annual Meeting. |
Director Independence
Based on such listing standards, Frank J. Krejci is the only director who is not independent because Mr. Krejci is our current President and Chief Executive Officer.
Summary Compensation Table
Summary Compensation Table The following table provides information for fiscal 2023 and 2022 concerning the compensation paid by us to the person who served as our principal executive officer during fiscal 2023 and our two other most highly compensated executive officers based on their total compensation in fiscal 2023, along with the one other officer who would have been included had such person been serving as an executive officer at the end of our fiscal 2023. We refer to these four executive officers as our “named executive officers” in this Proxy Statement.
Summary Compensation Table
| Name and Principal Position | Fiscal Year | Salary (1) | Bonus (2) | Stock Awards (3) | Non-Equity Incentive Plan Compensation (4) | All Other Compensation (5) | Total | | Frank J. Krejci, | 2023 | $630,635 | $— | $154,734 | $— | $17,898 | $803,267 | | President and Chief Executive Officer | 2022 | $577,737 | $— | $214,965 | $— | $16,657 | $809,359 |
Summary Compensation Table
| Name and Principal Position | Fiscal Year | Salary (1) | Bonus (2) | Stock Awards (3) | Non-Equity Incentive Plan Compensation (4) | All Other Compensation (5) | Total | | Patrick J. Hansen, | 2023 | $120,799 | $— | $— | $— | $869,637 | $990,436 | | Former Senior Vice President, Chief Financial Officer, Treasurer and Secretary (6) | 2022 | $352,981 | $— | $139,095 | $— | $16,702 | $508,778 | | Rolando J. Guillot, | 2023 | $349,000 | $— | $100,122 | $— | $17,891 | $467,013 | | Senior Vice President – Operations and Chief Operating Officer | 2022 | $320,969 | $— | $139,095 | $— | $16,725 | $476,789 | | Richard P. Messina, | 2023 | $334,421 | $— | $86,469 | $— | $27,193 | $448,083 | | Vice President – Global Engineering and Chief Technology Officer | 2022 | $313,460 | $— | $113,805 | $— | $26,318 | $453,583 |
Summary Compensation Table
Explanatory Notes for Summary Compensation Table: 1. We do not provide any standard annual raises in the base salaries of our executive officers. Instead, our Compensation Committee periodically reviews the base salaries of our executive officers based on individual and company-wide performance criteria and by reference to the data analysis provided by the Newport Group comparative compensation report described above for executives with similar positions, and taking into account Company performance, certain adjustments for inflation and for other discretionary factors determined by our Compensation Committee based upon an analysis of each officer’s individual performance and achievement over the prior fiscal year. Additionally, in determining base salaries, our Compensation Committee considers the executive officer’s qualifications and experience, the executive officer’s responsibilities, the executive officer’s past performance, the executive officer’s goals and objectives and salary levels for comparable positions as provided in the Newport Group report described above. Our Compensation Committee typically establishes base salaries for the new fiscal year for our executive officers at its regular meeting in August of each year where it reviews the prior fiscal years’ results and sets performance targets for the ensuing fiscal year, which new base salaries are traditionally effective as of September 1. For fiscal 2023, each of Mr. Krejci, Mr. Guillot and Mr. Messina were paid base salaries of $640,000, $360,000 and $338,000, respectively, which base salaries were effective as of September 1, 2022. As described above, our Compensation Committee set these base salary targets for our executive officers for fiscal 2023 based upon the results of its review and analysis of the compensation report and data prepared by Newport Group in April 2022. Mr. Hansen retired effective September 9, 2022 and, accordingly, his base salary for fiscal 2023 was not adjusted as of September 1, 2022. 2. These amounts represent awards of discretionary bonus payments made by our Compensation Committee. For fiscal year 2023 and 2022, no discretionary bonus payments were made to the named executive officers. 3. We believe that equity compensation is an effective means of aligning the long-term interests of our employees, including our executive officers, with our shareholders. Our Amended and Restated Stock Incentive Plan authorizes the Compensation Committee to issue both stock options and shares of restricted stock, as well as other forms of equity incentive compensation. In recent fiscal years, awards to our executive officers under the Amended and Restated Stock Incentive Plan have consisted solely of shares of restricted stock subject to time-based vesting criteria. In determining the type and total size of equity awards, the Compensation Committee considers various factors such as the outstanding number of options and shares of restricted stock, the amount of additional shares available for issuance under our Amended and Restated Stock Incentive Plan, the financial statement impact of awards, the level of responsibility of the proposed recipient and his or her performance and the percent of the outstanding shares of our Common Stock represented by outstanding options and shares of unvested restricted stock. The amounts in this column for each fiscal year reflect the dollar value of long-term equity based compensation awards granted in the form of shares of restricted stock pursuant to the terms of our Amended and Restated Stock Incentive Plan during the fiscal years indicated in the table. These amounts equal the grant date fair value of shares of restricted stock, computed in accordance with FASB Accounting Standards Codification Topic 718, granted during such fiscal year. Assumptions used in the calculation of the grant date fair value are included under the caption “Accounting for Stock-Based Compensation” in the Notes to our Consolidated Financial Statements in the fiscal year 2023 Annual Report on Form 10-K filed with the Commission on September 7, 2023 and such information is incorporated herein by reference. For fiscal 2023, on August 22, 2022, Mr. Krejci was awarded 5,100 shares of restricted stock, Mr. Guillot was awarded 3,300 shares of restricted stock and Mr. Messina was awarded 2,850 shares of restricted stock. These shares of restricted stock will vest one-third each year over a three year period on the anniversary of the grant date and have all the rights of our shares of Common Stock (including voting rights), other than the right to receive cash dividends while such shares are not vested. These shares of restricted stock had a grant date fair value per share of $30.34 as determined pursuant to FASB Accounting Standards Codification Topic 718. For fiscal 2022, on August 17, 2021, Mr. Krejci was awarded 5,100 shares of restricted stock, Mr. Hansen was awarded 3,300 shares of restricted stock, Mr. Guillot was awarded 3,300 shares of restricted stock and Mr. Messina was awarded 2,700 shares of restricted stock. These shares of restricted stock will vest one-third each year over a three year period on the anniversary of the grant date and have all the rights of our shares of Common Stock (including voting rights), other than the right to receive cash dividends while such shares are not vested. These shares of restricted stock had a grant date fair value per share of $42.15 as determined pursuant to FASB Accounting Standards Codification Topic 718. 4. This column discloses the dollar value of all amounts earned by the named executive officers under our Team Incentive Plan for STRATTEC SECURITY CORPORATION for participation by our Executive Officers and Senior Managers (the “TIPS Bonus Plan”) for performance related to the applicable fiscal year in the table, which in each case payout was tied to achievement of annual incentive performance targets. Participants in the TIPS Bonus Plan include or included our executive officers and other senior managers determined by our Compensation Committee based upon recommendations from our Chief Executive Officer.
Summary Compensation Table
Under the TIPS Bonus Plan, executive officers and other full-time employees are eligible to receive annual incentive cash bonuses whereby the Board of Directors sets company financial performance goals on an annual basis. For fiscal 2023 and 2022, the Board set company profit before tax (before bonus expense and after non-controlling interest and as adjusted for unusual income or expense items) as the company financial performance goal. Subject to the exception noted below for fiscal 2023, for the STRATTEC executive officers and senior manager group one half of a participant’s bonus is based upon achieving the participant’s individual goals and objectives for the year. The other half of the participant’s bonus is based upon the level of STRATTEC’s profit before tax for the year (with the adjustments noted above). The TIPS Bonus Plan provides for a hurdle rate goal which would be the minimum level of profit before tax (with the adjustments noted above) before any bonuses are paid under either the company financial performance or individual performance component. The company financial performance component of the bonus is calculated based upon a straight-line relationship between the hurdle rate goal and the target goal. This straight line also applies to amounts above the target goal. Each individual participant’s bonus would be capped at 200% of their target bonus. For each of 2023 and 2022, the target bonus equals 75%, 45%, 45% and 35% of base salary for each of Mr. Krejci, Mr. Hansen, Mr. Guillot and Mr. Messina, respectively. For 2023 and 2022, the Compensation Committee agreed that the minimum hurdle rate goal was set at $6 million and $12 million for each of fiscal 2023 and 2022, respectively, of profit before tax (with the adjustments noted above). If the profit before tax (with the adjustments noted above) was less than the foregoing hurdle amount for such particular fiscal year, no bonus amount was to be paid to any eligible participant, including the bonus attributable to the individual performance component for STRATTEC executive officers and senior managers. However, with respect to fiscal 2023, for any profit before tax (with the adjustments noted above) falling between $6 million and $12 million, the actual target performance factor for the executive officers was only based upon the Company performance factor and not adjusted for any individual performance factor. The Compensation Committee agreed that for fiscal 2023 and fiscal 2022 the target goal of a company performance factor of 1 would equal $24 million each year, respectively, of profit before tax (with the adjustments noted above). At this level, a participant would receive 100% of his or her target bonus with respect to the company financial performance component of the bonus plan. This straight line relationship for amounts in excess of $24 million continues up to a maximum bonus equal to 200% of the participant’s target bonus for our executive officers and senior managers such that at amounts of $36 million or more in profit before tax (with the adjustments noted above) the payment would equal 200% of the target bonus. For each of fiscal 2023 and fiscal 2022, no bonus amounts were earned under the TIPS Bonus Plan as STRATTEC’s profit before tax for such fiscal year (with the adjustments noted above) was less than the minimum hurdle rate amount in each year. 5. Our named executive officers participate in other benefit plans generally available to all employees on the same terms as similarly situated employees, including participation in medical, health (including Health Savings Accounts (HSAs)), dental, disability, life insurance and 401(k) plans. In addition, our named executive officers each receive at least two times their annual base salary up to $500,000 of group term life insurance coverage. The table below shows the components of this column, which include our match for each individual’s 401(k) plan contributions, the cost of premiums paid by us for term life insurance under which the named executive officer is a beneficiary, long-term disability benefits under our long term disability plan which provides for an additional monthly benefit of $10,000 per executive, payouts under our Supplemental Executive Retirement Plan and perquisites consisting of an automobile allowance for Mr. Messina of $9,600 each fiscal year.
Summary Compensation Table
| Name | Year | 401(k) Match | Life Insurance | LTD Benefits | SERP Payout | Perquisites | Total “All Other Compensation” | | Frank J. Krejci | 2023 | $16,067 | $1,270 | $561 | $— | $— | $17,898 | | | 2022 | $14,840 | $1,260 | $557 | $— | $— | $16,657 | | Patrick J. Hansen | 2023 | $5,926 | $263 | $116 | $863,332 | $— | $869,637 | | | 2022 | $14,888 | $1,260 | $554 | $— | $— | $16,702 | | Rolando J. Guillot | 2023 | $16,067 | $1,270 | $554 | $— | $— | $17,891 | | | 2022 | $14,955 | $1,260 | $510 | $— | $— | $16,725 | | Richard P. Messina | 2023 | $15,787 | $1,270 | $536 | $— | $9,600 | $27,193 | | | 2022 | $14,960 | $1,260 | $498 | $— | $9,600 | $26,318 |
Summary Compensation Table
6. Mr. Hansen retired from the Company effective as of September 9, 2023 and, accordingly, his base salary for fiscal 2023 represents a pro rata portion of his annual base salary for the portion of fiscal 2023 that he was employed by STRATTEC.
Outstanding Equity Awards at Fiscal Year End
Outstanding Equity Awards at Fiscal Year End The following table sets forth information on outstanding option and unvested restricted stock awards held by the named executive officers as of our fiscal year ending July 2, 2023, including the number of shares underlying both exercisable and unexercisable portions of each stock option as well as the exercise price and expiration date of each outstanding option and the number of shares of restricted stock held at the fiscal year end that have not yet vested.
Outstanding Equity Awards at Fiscal Year End
| | Option Awards | | | | Stock Awards | | | Name | Number of Securities Underlying Unexercised Options (#) - Exercisable | Number of Securities Underlying Unexercised Options (#) - Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) (3) | | Frank J. Krejci | 14,360 | — | 38.71 | 08/21/23(1) | 1,700(4) | 30,838 | | | 4,090 | — | 79.73 | 08/20/24(2) | 3,400(5) | 61,676 | | | — | — | — | — | 5,100(6) | 92,514 | | Patrick J. Hansen (7) | 5,841 | — | 38.71 | 08/21/23(1) | — | — | | | 1,750 | — | 79.73 | 08/20/24(2) | — | — | | Rolando J. Guillot | 4,290 | — | 38.71 | 08/21/23(1) | 1,100(4) | 19,954 | | | 1,180 | — | 79.73 | 08/20/24(2) | 2,200(5) | 39,908 | | | — | — | — | — | 3,450(6) | 62,583 | | Richard P. Messina | 1,050 | — | 79.73 | 08/20/24(2) | 900(4) | 16,326 | | | — | — | — | — | 1,800(5) | 32,652 | | | — | — | — | — | 2,850(6) | 51,699 |
Outstanding Equity Awards at Fiscal Year End
| (1) The common stock option vested on August 21, 2016, the three year anniversary of the grant date. |
Outstanding Equity Awards at Fiscal Year End
| (2) The common stock option vested on August 20, 2017, the three year anniversary of the grant date. |
Outstanding Equity Awards at Fiscal Year End
| (3) Market value equals the closing market price of our common stock on June 30, 2023, the last trading day prior to our fiscal year end of July 2, 2023, which was $18.14, multiplied by the number of shares of restricted stock. |
Outstanding Equity Awards at Fiscal Year End
| (4) The shares of restricted stock were granted on August 18, 2020 and vest one-third each year over a three year period on the anniversary date of the grant date. |
Outstanding Equity Awards at Fiscal Year End
| (5) The shares of restricted stock were granted on August 17, 2021 and vest one-third each year over a three year period on the anniversary date of the grant date. |
Outstanding Equity Awards at Fiscal Year End
| (6) The shares of restricted stock were granted on August 22, 2022 and vest one-third each year over a three year period on the anniversary date of the grant date. |
Outstanding Equity Awards at Fiscal Year End
| (7) Mr. Hansen retired from the Company effective as of September 9, 2023. |
Potential Payments Upon Termination or Change of Control
Potential Payments Upon Termination or Change of Control We have entered into employment agreements and change of control employment agreements with each of our named executive officers that provide for severance benefits following a termination of employment, as well as provide employment benefits in connection with a change of control (as defined in the change of control agreements). The employment agreements with our named executive officers provide that if the executive officer’s employment is terminated as a result of the death or disability of such executive officer, then the executive officer (or his or her beneficiary) is entitled to continuation of the executive officer’s then effective base salary for a period of six months after termination and continuation of health and dental coverage for such six month period after termination of employment; provided, that such period may extend up to twelve months in the event of disability under the STRATTEC self-funded short term disability plan made available to all eligible STRATTEC employees. If the executive officer’s employment is terminated by us without cause (as defined in the employment agreements), then the executive officer will be entitled to continuation (1) of the executive officer’s then effective base salary for twelve months in the case of Mr. Krejci and, for each other executive officer, for a minimum of six months after termination or a maximum of twelve months with each executive officer receiving one month credit for each year of service as an officer of STRATTEC and (2) of health and dental coverage for such six to twelve month period, as applicable. We believe that these severance benefits are important as a recruiting and retention device and represent reasonable consideration in exchange for the noncompetition, confidentiality and other restrictions applicable to the executive officers under the employment agreements. Each of our named executive officers has also signed a change of control employment agreement which guarantees the employee continued employment following a change of control (as defined in the agreements) on a basis equivalent to the employee’s employment immediately prior to such change in terms of position, duties, compensation and benefits, as well as specified payments upon termination following a change of control. Such agreements become effective only upon a defined change of control of STRATTEC, or if the employee’s employment is terminated upon, or in anticipation of such a change of control, and automatically supersede any existing employment agreement once they become effective. Under these agreements, if during the employment term (three years from the date of the change of control), the employee is terminated other than for cause (as defined in the agreements) or if the employee voluntarily terminates his or her employment for good reason (as defined in the agreements) or during a 30-day window period one year after a change of control, then the executive officer is entitled to specified severance benefits, including (1) a lump sum payment of three (with respect to Mr. Krejci) or two (with respect to each other named executive officer) times the employee’s annual base salary, (2) a payment equal to the executive officer’s highest annual bonus (which is equal to the highest cash bonus paid to the named executive officer by STRATTEC and its affiliates collectively during the ten fiscal year period immediately preceding the fiscal year during which the change of control has occurred) and (3) continuation of certain fringe and other benefits. Again, we believe that these severance benefits are important as a recruiting and retention device. The following table sets forth the compensation that each of our named executive officers would have been eligible to receive if the applicable executive officer’s employment had been terminated on the last day of, but prior to, our fiscal year end (July 2, 2023) under circumstances requiring payment of severance benefits as described above other than in connection with a change of control.
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION
Director Summary Compensation Table
| Name | Fees Earned or Paid in Cash | Stock Awards (1) | Non-Equity Incentive Plan Compensation (2) | All Other Compensation | Total | | Harold M. Stratton II | $113,500 | $55,327 | $— | $— | $168,827 | | Tina Chang (3) | $65,500 | $29,931 | $— | $— | $95,431 | | Michael J. Koss (4) | $78,500 | $55,327 | $— | $— | $133,827 | | Thomas W. Florsheim, Jr. | $78,500 | $55,327 | $— | $— | $133,827 | | David R. Zimmer | $83,500 | $55,327 | $— | $— | $138,827 |
PAY VERSUS PERFORMANCE DISCLOSURE
PAY VERSUS PERFORMANCE DISCLOSURE As required by the pay versus performance rules adopted by the Commission pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and Rule 402(v) of Regulation S-K, we are providing the following information regarding the relationship between “compensation actually paid” to our named executive officers and certain of our financial performance metrics for each of the past two fiscal years. Amounts included as “compensation actually paid” do not represent the value of cash compensation and equity awards actually received by our named executive officers but instead are amounts calculated pursuant to Commission rules and which result in adjustments to the amounts reported above in the summary compensation table. Shareholders should refer to the discussion of our compensation philosophy and programs described above under “Executive Compensation” for a complete discussion of our compensation programs and their connection to our performance. Our Compensation Committee did not consider the following Pay Versus Performance analysis and disclosures in making compensation decisions with respect to any fiscal year shown below.
Pay Versus Performance Table
Pay Versus Performance Table
Pay Versus Performance Table
| Fiscal Year | Summary Compensation Table Total for the Principal Executive Officer (“PEO”) (1) | Compensation Actually Paid to PEO ($) (2) (3) | Average Summary Compensation Total for Non-PEO Named Executive Officers (1) (4) | Average Compensation Actually Paid to Non-PEO Named Executive Officers (3) | Value of Initial Fixed $100 Investment Based on Total Shareholder Return (TSR) (5) | Net (Loss) Income (6) | | 2023 | $803,267 | $754,225 | $635,177 | $556,471 | $41.12 | $(6,670,000) | | 2022 | $809,359 | $610,464 | $492,784 | $420,780 | $74.81 | $7,016,000 |
Pay Versus Performance Table
| (1) The dollar amounts reported in this column are the amount of total compensation reported in the “Total” column of the Summary Compensation Table for the 2023 and 2022 fiscal years for the person serving as our PEO for such applicable year. The individuals included as our PEO and Non-PEOs for each applicable fiscal year are: |
Pay Versus Performance Table
| Fiscal Year | PEO | Non-PEO Named Executive Officers | | 2023 | Frank J. Krejci | Patrick J. Hansen, Rolando Guillot, Richard P. Messina | | 2022 | Frank J. Krejci | Patrick J. Hansen and Rolando Guillot |
Pay Versus Performance Table
| (2) The dollar amounts reported in this column represent the amount of “compensation actually paid” (CAP) to our PEO, as computed in accordance with Item 402(v) of Regulation S-K. |
Pay Versus Performance Table
| (3) The following table provides the adjustments made to the Summary Compensation Table “Total” compensation column to arrive at the “compensation actually paid” to the named executive officers and the average “compensation actually paid” to the non-PEO named executive officers: |
Pay Versus Performance Table
| | 2023 | | 2022 | | | | PEO ($) | Average for Non- PEO Named Executive Officers ($) | PEO ($) | Average for Non- PEO Named Executive Officers ($) | | Summary Compensation Table Total: | 803,267 | 635,177 | 809,359 | 492,784 | | Adjustments: | | | | | | Deduction for Amounts Reported in the “Stock Awards” Column in the Summary Compensation Table: | (154,734) | (62,197) | (214,965) | (139,095) | | Increase for fair value of awards granted during the covered fiscal year that remain outstanding and unvested as of the covered fiscal year end: | 168,300 | 38,094 | 92,514 | 108,900 |
Pay Versus Performance Table
| | 2023 | | 2022 | | | | PEO ($) | Average for Non- PEO Named Executive Officers ($) | PEO ($) | Average for Non- PEO Named Executive Officers ($) | | Increase (deduction) for year-over-year change in fair value at covered fiscal year end of awards granted in any prior fiscal year that were outstanding and unvested at the covered fiscal year end: | (49,995) | (44,580) | (75,786) | (33,330) | | Increase (deduction) for change in vesting date fair value of awards granted during the prior fiscal years that vested during the covered fiscal year compared to fair value of awards of prior fiscal year end: | (12,613) | (10,023) | (658) | (8,479) | | Total Adjustments: | (49,042) | (78,706) | (198,895 | (72,004) | | Compensation Actually Paid: | 754,225 | 556,471 | 610,464 | 420,780 |
Pay Versus Performance Table
| (4) The dollar amounts reported in this column represent the average of the amounts reported for our Non-PEO named executive officers as a group in the “Total” column of the Summary Compensation Table in each applicable year. |
Pay Versus Performance Table
| (5) The amounts reported in this column reflect our cumulative TSR, assuming an initial fixed $100 investment in our Common Stock starting June 27, 2021 through the end of each listed fiscal year. Cumulative TSR is calculated by dividing the sum of cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between our stock price at the end and the beginning of the measurement period by our stock price at the beginning of the measurement period. No dividends were paid on our Common Stock during either fiscal 2022 or 2023. |
Pay Versus Performance Table
| (6) The dollar amounts reported represent the amount of net (loss) income attributable to STRATTEC’s shareholders as reflected in our consolidated audited financial statements for each applicable year. |
Relationship Between Compensation Actually Paid and Performance Measures
Relationship Between Compensation Actually Paid and Performance Measures As described above under “Executive Compensation,” STRATTEC generally seeks to (1) provide strong financial incentives, at reasonable cost, for positive financial performance and enhanced value of our shareholders’ investment and (2) use cash bonus plans to recognize positive short-term performance and equity based plans to support the long-term needs and goals of STRATTEC and our shareholders. We, therefore, do not specifically align our performance measures with “compensation actually paid” as determined under Item 402(v) of Regulation S-K for a particular fiscal year. Nonetheless, in accordance with such rule we are providing the following descriptions of the relationships between information presented in the above Pay Versus Performance Table. The following charts illustrate how “compensation actually paid” as determined under Item 402(v) of Regulation S-K to our PEO and the average “compensation actually paid” to our other named executive officers aligns with our financial performance as measured by our TSR and our net income (loss) for the past two fiscal years: Compensation Actually Paid and Net (Loss) Income: Compensation Actually Paid and Cumulative TSR: All information provided above under the “Pay Versus Performance Disclosure” heading will not be deemed to be incorporated by reference in any filing of the Corporation under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.