DEF 14A of Montauk Renewables, Inc.
Filed Apr 22, 2024 · FY20230001193125-24-103778
Director Nominee Highlights
Director Nominee Highlights You are being asked to vote on the election of two director nominees, both of whom currently serve on our Board. The following table provides summary information about each director nominee as of April 22, 2024.
Director Nominee Highlights
| | | | | | Committee Memberships | | | | | Name | Age | Director Since | Independent | Principal Occupation | AC | CC | NCG | ESCR | | Mohammed H. Ahmed | 59 | 2021 | Yes | Executive Director of Ritz Tiles | ✓ | — | ✓ | — | | John A. Copelyn | 73 | 2021 | No | Chief Executive Officer of Hoskins Consolidated Investments | — | ✓ | ✓ | — |
Director Nominee Highlights
AC stands for “Audit Committee” CC stands for “Compensation Committee” NCG stands for “Nominating and Corporate Governance Committee” ESCR stands for “Environmental, Safety and Corporate Responsibility Committee”
PROPOSAL NO. 1
PROPOSAL NO. 1
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS Our business and affairs are managed under the direction of our Board. Our Amended and Restated Certificate of Incorporation generally provides that our Board consists of such number of directors as the Board may from time to time exclusively determine. Our Board of Directors is currently comprised of seven members. Our Amended and Restated Certificate of Incorporation provides that our Board is divided into three classes with staggered three-year terms. While our Board of Directors is classified, only one class of directors will be elected at each annual meeting of stockholders, with the other classes continuing for the remainder of their respective three-year terms. Our Board of Directors is designated as follows:
ELECTION OF DIRECTORS
| • | Messrs. Ahmed and Copelyn serve as Class I directors and are nominated for re-election to serve until their terms expire at the annual meeting of stockholders to be held in 2027; |
ELECTION OF DIRECTORS
| • | Messrs. Govender, Jacobson and Shaik serve as Class II directors, and their terms will expire at the annual meeting of stockholders to be held in 2025; and |
ELECTION OF DIRECTORS
| • | Mr. McClain and Ms. Cunningham serve as Class III directors, and their terms will expire at the annual meeting of stockholders to be held in 2026. |
ELECTION OF DIRECTORS
Any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of our directors. Each director whose term expires at the 2028 annual meeting of stockholders or any annual meeting thereafter will be elected for a term expiring at the next annual meeting of stockholders. As a result of these provisions, beginning with the 2030 annual meeting of stockholders, all of our directors will be subject to annual election. Directors are elected by a plurality of the votes cast by the holders of shares of common stock present in person or represented by proxy and entitled to vote on the election of directors. Accordingly, the two nominees receiving the highest number of affirmative votes will be elected. Shares represented by executed proxies will be voted, if authority to do so is not withheld, for the election of each of the nominees named below. Any incumbent nominee for director in an uncontested election (i.e., an election where the only nominees are those recommended by the Board) who receives a greater number of votes against his or her election than votes for such election (a “Majority Against Vote”) will promptly tender his or her resignation following certification of the stockholder vote. The Nominating and Corporate Governance Committee will promptly consider the tendered resignation and will recommend to the Board whether to accept the tendered resignation or to take some other action, such as rejecting the tendered resignation and addressing the apparent underlying causes of the Majority Against Vote. If the nominee becomes unavailable for election because of an unexpected occurrence, shares that would have been voted for that nominee will instead be voted for the election of a substitute nominee proposed by the Company or the size of the Board will be reduced by one director. Each person nominated for election has consented to being named as a nominee in this proxy statement and has agreed to serve if elected. We have no reason to believe that any nominee will be unable to serve. The following is a brief biography of the nominees for election at the Annual Meeting. Each biography includes information regarding the specific experience, qualifications, attributes, or skills that led the Nominating and Corporate Governance Committee and the Board to determine that the applicable nominee or other current director should serve as a member of the Board.
NOMINEES FOR ELECTION FOR A TERM EXPIRING AT THE 2027 ANNUAL MEETING
NOMINEES FOR ELECTION FOR A TERM EXPIRING AT THE 2027 ANNUAL MEETING Our Nominating and Corporate Governance Committee has recommended, and our Board has nominated, the following two directors for election at the Annual Meeting as Class I directors for three-year terms expiring at the 2027 Annual Meeting. The Board unanimously recommends a vote FOR the election of each of the following two Class I director nominees for three-year terms expiring at the 2027 Annual Meeting:
NOMINEES FOR ELECTION FOR A TERM EXPIRING AT THE 2027 ANNUAL MEETING
| AGE 59 DIRECTOR SINCE January 2021 Independent Lead Director COMMITTEES • Audit (Chair) • Nominating and Corporate Governance | Mohamed H. Ahmed | | | BACKGROUND • Mr. Ahmed has served on our Board and as its independent Lead Director since January 2021. • He has also served as a member of the Board of Directors and independent Lead Director of Montauk Holdings Limited, our former parent company (“MNK”), since August 2014. • Mr. Ahmed has been an executive director of Ritz Tiles, an importer and distributor of tiles, since 2002. • He is also a director for investment holding companies and a real estate investment trust, and previously held directorships with other companies in the clothing and textile industry. QUALIFICATIONS • Mr. Ahmed’s over 25 years of finance and leadership experience as well as related industry and investment experience is a significant asset to the Board. |
NOMINEES FOR ELECTION FOR A TERM EXPIRING AT THE 2027 ANNUAL MEETING
| AGE 73 DIRECTOR SINCE January 2021 Non-Independent Chairman of the Board COMMITTEES • Nominating and Corporate Governance (Chair) • Compensation | John A. Copelyn | | | BACKGROUND • Mr. Copelyn has served on our Board as its non-executive Chairman since January 2021. • He has also served as the non-executive Chairman of the Board of Directors of MNK since December 2014 and commenced service on the Board of Directors of MNK in June 2011. • He has served as the Chief Executive Officer of Hoskins Consolidated Investments, an investment holding company (“HCI”), since 1997. • He has also served as a non-executive independent director of Platinum Group Metals Ltd., a mining company focused on platinum and palladium, since May 2018. • He previously served as a member of the parliament of South Africa from 1994 to 1997 and as General Secretary in various unions in the clothing and textile industry from 1974 to 1994. QUALIFICATIONS • Mr. Copelyn’s leadership positions at natural resource and financial companies, as well as his policymaking and public affairs experience provide valuable insight to the Board. |
NOMINEES FOR ELECTION FOR A TERM EXPIRING AT THE 2027 ANNUAL MEETING
The Board Recommends a Vote “FOR” Each of the Class I Director Nominees Named Above. The following Class II directors’ terms will continue until the 2025 annual meeting of stockholders and are not submitted for election at the Annual Meeting:
NOMINEES FOR ELECTION FOR A TERM EXPIRING AT THE 2027 ANNUAL MEETING
| AGE 53 DIRECTOR SINCE January 2021 Non-Independent COMMITTEES • Environmental, Safety and Corporate Responsibility • Compensation (Chair) | Theventheran G. Govender | | | BACKGROUND • Mr. Govender has served as a member of our Board since January 2021. • He has also served as a member of the Board of Directors of MNK since September 2018. • Mr. Govender has served as an Executive Director at HCI since 1998 and was formerly HCI’s Chief Financial Officer from 2001 to August 2019. • He also serves as a director on the boards of directors of several of HCI’s subsidiaries. QUALIFICATIONS • Mr. Govender brings significant financial and executive experience to Montauk that enables him to make insightful contributions regarding our business strategy and growth plans. |
NOMINEES FOR ELECTION FOR A TERM EXPIRING AT THE 2027 ANNUAL MEETING
| AGE 56 DIRECTOR SINCE January 2021 – March 2023 April 2024-present Independent COMMITTEES • Audit | Michael A. Jacobson | | | BACKGROUND • Mr. Jacobson served as a member of our Board from January 2021 until March 2023 and was re-appointed to the Board in April 2024. • He previously served as a member of the Board of Directors of MNK. • Mr. Jacobson has served as an Executive Director of Oceania Capital Partners, an investment holding company, since January 2012. • He previously served in various executive positions with HCI. • He is an audit committee financial expert based on his relevant experience with financial and accounting matters. QUALIFICATIONS • Mr. Jacobson’s global executive and director leadership experience is a significant asset to Montauk and the Board. |
NOMINEES FOR ELECTION FOR A TERM EXPIRING AT THE 2027 ANNUAL MEETING
| AGE 66 DIRECTOR SINCE June 2021 Independent COMMITTEES • Environmental, Safety and Corporate Responsibility (Chair) | Yunis Shaik | | | BACKGROUND • Mr. Shaik has served on our Board since June 2021. • He also serves as an Executive Director of HCI, a position he has held since April 2014. Prior to serving as Executive Director, Mr. Shaik served as non-executive director of HCI. • He also currently serves as Non-Executive Chairman of Hosken Passenger Logistics & Rail Ltd. and Chairman of Golden Arrow Bus Services (PTY) Ltd. • Before joining HCI, Mr. Shaik was an attorney of the High Court of South Africa and in private practice. • He is the former Deputy General Secretary of the Southern African Clothing and Textile Workers Union and a director of Workers’ College. • He served as Senior Commissioner of the Commission for Conciliation, Mediation and Arbitration in KwaZulu Natal. QUALIFICATIONS • Mr. Shaik’s extensive legal background, policy and executive experience enables him to help Montauk navigate the complex challenges and opportunities present in our industry sector. |
NOMINEES FOR ELECTION FOR A TERM EXPIRING AT THE 2027 ANNUAL MEETING
The following Class III directors’ terms will continue until the 2026 annual meeting of stockholders and are not submitted for election at the Annual Meeting:
NOMINEES FOR ELECTION FOR A TERM EXPIRING AT THE 2027 ANNUAL MEETING
| AGE 62 DIRECTOR SINCE January 2022 Independent COMMITTEES • Audit • Environmental, Safety and Corporate Responsibility | Jennifer Cunningham | | | BACKGROUND • Ms. Cunningham has served on the Board since January 2022. • She was a partner at SKDK, a leading strategic communications firm that works with Fortune 500 companies, non-profits, philanthropic organizations, labor unions and political campaigns, from 2008 until her departure from the firm in March 2020. • Ms. Cunningham has more than 25 years of experience developing and executing communications strategies for clients across the healthcare, education and public services sectors. • Prior to joining SKDK, Ms. Cunningham was the Political and Legislative Director for the 1199 Service Employees International Union, the largest health care union in the United States, from 1998 to 2008. • Ms. Cunningham also served in various capacities as an advisor to the New York State legislature and practiced law at the Paul Weiss, Rifkind, Wharton & Garrison law firm. • Ms. Cunningham is passionate about the environment and sustainability and currently serves as an advisor to the Open Space Institute and Mohonk Preserve in New York State. QUALIFICATIONS • Ms. Cunningham’s extensive background in governmental affairs and strategic communications is a significant asset to our Board and executive management team. |
NOMINEES FOR ELECTION FOR A TERM EXPIRING AT THE 2027 ANNUAL MEETING
| AGE 49 DIRECTOR SINCE January 2021 Non-Independent | Sean F. McClain | | | BACKGROUND • Mr. McClain has served as our President and Chief Executive Officer and a member of our Board since January 2021. • He also served as a member of the Board of Directors of MNK from August 2014 until March 2023. • He has served as President and Chief Executive Officer of MNK since September 2019 and, prior to that time, served as MNK’s Chief Financial Officer from August 2014 until September 2019. • Prior to joining MNK and its affiliates, he held various management positions with BPL Global Limited, Bayer A.G. and Dick’s Sporting Goods, Inc. and was in public accounting at Arthur Andersen LLP. • He is a Certified Public Accountant. QUALIFICATIONS • As our President and Chief Executive Officer and former Chief Financial Officer, Mr. McClain’s deep insight into our business and related risks and opportunities contribute to the Board and its understanding of our growth strategy and operations. |
INFORMATION REGARDING OUR BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
INFORMATION REGARDING OUR BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
Summary Compensation Table (2023 and 2022)
Summary Compensation Table (2023 and 2022) The following table shows for the periods presented all the compensation earned by or paid to our NEOs for Fiscal 2023 and 2022:
Summary Compensation Table (2023 and 2022)
| Name and Principal Position | Year | Salary | Bonus | Stock Awards | Option Awards | Nonequity Incentive Plan Compensation | All Other Compensation | Total | | | ($) | ($) (1) | ($) (2) | ($) | ($) (3) | ($) (4) | ($) (5) | ($) | | Sean F. McClain, | 2023 | 347,012 | 100,946 | — | 2,550,388 | — | 18,184 | 3,016,530 | | President and Chief Executive Officer | 2022 | 355,412 | 326 | — | — | 26,250 | 20,602 | 402,590 | | Kevin Van Asdalan, | 2023 | 237,454 | 95,143 | — | 2,125,323 | — | 14,507 | 2,472,427 | | Chief Financial Officer and Treasurer | 2022 | 279,240 | 269 | — | — | 12,375 | 13,458 | 305,342 | | John Ciroli, | 2023 | 238,354 | 95,168 | — | 1,700,258 | — | 17,072 | 2,050,852 | | Chief Legal Officer and Secretary | 2022 | 279,240 | 275 | — | — | 12,375 | 15,536 | 307,426 |
Summary Compensation Table (2023 and 2022)
| (1) Includes base salary and paid time off payout. |
Summary Compensation Table (2023 and 2022)
| (2) This column includes cash bonuses paid to our NEOs under our holiday bonus program as well as discretionary bonuses paid based on individual performance in Fiscal 2023. Messrs. McClain, Van Asdalan and Ciroli were also eligible to earn a 2023 discretionary cash bonus equal to approximately 25%, 30%, and 30%, respectively, of such NEO’s 2023 base salary based on individual performance. The Compensation Committee awarded discretionary individual performance bonuses to our NEOs in the amount of 100% of the aforementioned target bonus percentage due to management’s progress against strategic objectives, including the CO2 sales agreement with European Energy, enhancements in the relationship with the Bowerman landfill, the REC agreement with Duke Energy and scalable improvements across many departments, including audit, securities, information technology, operations and business development. Amounts included for Fiscal 2022 do not include any cash bonuses paid to our NEOs under our discretionary annual bonus program, as previously reported. These previously reported amounts were earned in Fiscal 2021, not Fiscal 2022. |
Summary Compensation Table (2023 and 2022)
| (3) Amounts reflect the aggregate grant date fair value of stock option awards which are computed in accordance with FASB ASC Topic 718. The Fiscal 2023 values were calculated using a BlackScholes pricing model with a volatility indicator of 78-80% and an annual interest rate of 3.71-3.97%. None of our NEOs received an option award for Fiscal 2022. |
Summary Compensation Table (2023 and 2022)
| (4) None of our NEOs received a performance bonus because the 2023 Adjusted EBITDA goal was not achieved. |
Summary Compensation Table (2023 and 2022)
| (5) Amounts reflected in this column represent the values of all other compensation awarded to the NEOs. The Supplemental Compensation Table below provides additional information regarding the components of “All Other Compensation” for Fiscal 2023. |
Outstanding Equity Awards at Fiscal Year-End – 2023
Outstanding Equity Awards at Fiscal Year-End – 2023 The following table summarizes the equity awards the Company granted to the NEOs that were outstanding as of the year ended December 31, 2023. All awards were made under the Plan. In accordance with the applicable SEC disclosure guidance, this table and the accompanying footnotes do not account for any awards that may have been exercised or have vested pursuant to their terms in the ordinary course since the end of 2023.
Outstanding Equity Awards at Fiscal Year-End – 2023
| | Option Awards | | | | | Stock Awards | | | Name | Date of Grant | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) (4) | | Sean McClain(1) | 1/28/2021 | 313,455 | — | 11.38 | 1/28/2031 | | | | | 4/19/2023 | | 200,000 | 6.77 | 4/19/2027 | | | | | 4/19/2023 | | 200,000 | 6.77 | 4/19/2028 | | | | | 4/19/2023 | | 200,000 | 6.77 | 4/19/2029 | | | | Kevin Van Asdalan(2) | 1/28/2021 | 149,508 | — | 11.38 | 1/28/2031 | 50,527 | 450,196 | | | 4/19/2023 | | 166,666 | 6.77 | 4/19/2027 | | | | | 4/19/2023 | | 166,666 | 6.77 | 4/19/2028 | | | | | 4/19/2023 | | 166,667 | 6.77 | 4/19/2029 | | | | John Ciroli(3) | 1/28/2021 | 159,827 | — | 11.38 | 1/28/2031 | 110,624 | 985,660 | | | 4/19/2023 | | 133,333 | 6.77 | 4/19/2027 | | | | | 4/19/2023 | | 133,333 | 6.77 | 4/19/2028 | | | | | 4/19/2023 | | 133,334 | 6.77 | 4/19/2029 | | |
Outstanding Equity Awards at Fiscal Year-End – 2023
| (1) On January 28, 2021, Mr. McClain was granted Options which fully vested on the first anniversary of the date of grant. On April 19, 2023, Mr. McClain was granted 600,000 options which vest ratable on the third, fourth and fifth anniversary of the date of grant and expire one year after the applicable vesting date. |
Outstanding Equity Awards at Fiscal Year-End – 2023
| (2) On January 28, 2021, Mr. Van Asdalan was granted Options which fully vested on the first anniversary of the date of grant. On such date, Mr. Van Asdalan was also granted an RS award of 50,527 shares which will vest on November 7, 2024. On April 19, 2023, Mr. Van Asdalan was granted 500,000 options which vest ratable on the third, fourth and fifth anniversary of the date of grant and expire one year after the applicable vesting date. |
Outstanding Equity Awards at Fiscal Year-End – 2023
| (3) On January 28, 2021, Mr. Ciroli was granted Options which fully vested on the first anniversary of the date of grant. The Options are exercisable at a price of $11.38 per share. On such date, Mr. Ciroli was also granted an RS award of which 55,312 shares will vest on August 26, 2024 and 55,312 shares will vest on August 26, 2025. On April 19, 2023, Mr. Ciroli was granted 400,000 options which vest ratable on the third, fourth and fifth anniversary of the date of grant and expire one year after the applicable vesting date. |
Outstanding Equity Awards at Fiscal Year-End – 2023
| (4) Based on the closing price per share of our common stock on December 29, 2023 of $8.91. |
Director Compensation
Director Compensation Following an assessment of director compensation practices by the Compensation Committee, the Board approved the payment of cash compensation to all non-employee directors in the amount of $100,000 annually for their Board service, effective January 1, 2022. Cash compensation to non-employee directors was paid by the Company to each director in quarterly installments. The Board retained the practice of not issuing equity compensation to non-employee directors at this time. Employee directors continue to receive no cash or equity compensation for their Board service. The table below reflects compensation paid to the Company’s directors in Fiscal 2023.
Director Compensation
| Name | Fees earned or paid in cash ($) | Total ($) | | Mohamed H. Ahmed | 100,000 | 100,000 | | John A. Copelyn | 100,000 | 100,000 | | Jennifer Cunningham | 100,000 | 100,000 | | Theventheran (Kevin) G. Govender | 100,000 | 100,000 | | Michael A. Jacobson(1) | 25,000 | 25,000 | | Sean F. McClain | 0 | 0 | | Yunis Shaik | 100,000 | 100,000 |
Director Compensation
| (1) Mr. Jacobson resigned from the Board on March 30, 2023 and was re-appointed to the Board on April 2, 2024. |