DEF 14A of Worthington Steel, Inc.
Filed Aug 16, 2024 · FY20240001193125-24-202132
To Be Held On September 25, 2024
| | Page | | Page | | Summary | 1 | Compensation of Directors | 66 | | General Information | 6 | Equity Compensation Plan Information | 68 | | Security Ownership of Certain Beneficial Owners and Management | 10 | Proposal 2: Advisory Vote to Approve the Compensation of the NEOs | 70 | | Corporate Governance | 12 | Proposal 3: Advisory Vote on the Frequency of Future Advisory Votes on Executive Compensation | 71 | | Transactions With Certain Related Persons | 21 | Proposal 4: Ratification of the Selection of Independent Registered Public Accounting Firm | 72 | | Proposal 1: Election of Directors | 25 | Audit Committee Matters | 73 | | Executive Compensation | 30 | Miscellaneous Items | 76 | | Compensation Discussion and Analysis | 30 | Householding of Annual Meeting Materials | 76 | | Compensation Committee Report | 48 | Shareholder Proposals for 2025 Annual Meeting | 76 | | Fiscal 2024 Summary Compensation Table | 49 | Future Electronic Access to Proxy Materials and Annual Report | 77 | | Grants of Plan-Based Awards | 51 | Annual Report on Form 10-K | 77 | | Outstanding Equity Awards at Fiscal 2024 Year-End | 53 | References | 77 | | Option Exercises and Stock Vested | 55 | Other Business | 77 | | Non-Qualified Deferred Compensation | 56 | Appendix I – Companies in Comparator Group | I-1 | | Fiscal 2025 NEO Compensation | 57 | | | | Potential Payments Upon Change in Control | 58 | | | | CEO Pay Ratio | 61 | | | | Pay Versus Performance | 62 | | |
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TO BE HELD ON SEPTEMBER 25, 2024 General Information This Proxy Statement is furnished in connection with the solicitation of proxies by the Board for use at the Annual Meeting. The Annual Meeting will be a virtual meeting, which means that you will be able to participate in the Annual Meeting, vote and submit your questions during the Annual Meeting only via live webcast by visiting www.virtualshareholdermeeting.com/WS2024. On or about August 16, 2024, we began mailing to our shareholders of record at the close of business on July 30, 2024 (the “Record Date”), a Notice of Internet Availability of Proxy Materials (the “Notice of Availability”) containing instructions on how to access the Notice of Annual Meeting of Shareholders, this Proxy Statement, the form of proxy (often referred to as a “proxy card”) and our 2024 Annual Report. Purpose of the Annual Meeting At the Annual Meeting, shareholders will act upon the matters outlined in the Notice of Annual Meeting of Shareholders included with this Proxy Statement. Specifically, the shareholders will be asked to: (1) elect three directors to the Board for three-year terms to expire at our 2027 annual meeting of shareholders; (2) approve, on an advisory basis, a resolution to approve the compensation of the NEOs; (3) select, on an advisory basis, the frequency of future advisory votes to approve the compensation of our named executive officers; and (4) ratify the selection of KPMG LLP (“KPMG”) as our independent registered public accounting firm for fiscal 2025. Board’s Recommendations Subject to revocation, all forms of proxy that are properly completed and timely received will be voted in accordance with the instructions contained therein. If no instructions are given (except in the case of broker non-votes), the persons named as proxy holders will vote the common shares in accordance with the recommendations of the Board. The Board’s recommendations are set forth together with the description of each proposal in this Proxy Statement. In summary, the Board recommends a vote:
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| • | “FOR” the election of the Board’s nominated slate of three directors (Proposal 1); |
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| • | “FOR” the approval, on an advisory basis, of the resolution to approve the compensation of the NEOs (Proposal 2); |
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| • | On an advisory basis, to conduct future advisory votes on the compensation of our named executive officers every “ONE YEAR” (Proposal 3); and |
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| • | “FOR” the ratification of the selection of KPMG as our independent registered public accounting firm for fiscal 2025 (Proposal 4). |
TO BE HELD ON SEPTEMBER 25, 2024
Shareholder Voting Rights Only shareholders of record at the close of business on the Record Date or such shareholders’ proxies are entitled to receive notice of, and to vote at, the Annual Meeting. As of the close of business on the Record Date, there were 50,391,154 common shares outstanding and entitled to vote. Each shareholder is entitled to one vote on each matter voted upon at the Annual Meeting for each common share held. Shareholders do not have cumulative voting rights in the election of directors. All voting at the Annual Meeting will be governed by our Amended Articles of Incorporation, our Amended Regulations and the General Corporation Law of the State of Ohio. Registered Shareholders and Beneficial Owners If the common shares are registered in your name directly with our transfer agent, Broadridge Corporate Issuer Solutions, Inc. (“Broadridge”), you are considered, with respect to those common shares, a holder of record (which we also refer to as a “registered shareholder”). If you hold the common shares in a brokerage account or through a bank or other holder of record, you are considered the beneficial owner of the common shares, which is often referred to as holding the common shares in “street name”. Voting of Common Shares Held in “Street Name” A “broker non-vote” occurs when a beneficial owner holds the common shares in “street name” through a broker, bank or other holder of record who is considered the registered shareholder with respect to those common shares, and the beneficial owner does not provide the broker, bank or other holder of record with instructions within the required timeframe before the Annual Meeting as to how to vote the common shares on “non-routine” matters. Under the NYSE Rules, your broker, bank or other holder of record cannot vote your common shares on non-routine matters unless it receives instructions from you as to how to vote. Proposal 1 (Election of Directors), Proposal 2 (Advisory Vote to Approve the Compensation of the NEOs) and Proposal 3 (Advisory Vote on the Frequency of Future Advisory Votes on Executive Compensation) are considered “non-routine” matters where your broker, bank or other holder of record can vote your common shares only if it receives instructions from you. Proposal 4 (Ratification of the Selection of Independent Registered Public Accounting Firm) is considered a “routine” matter. Your broker, bank or other holder of record will send you directions on how to instruct it to vote the common shares you hold beneficially. Access to and Participation in the Virtual Annual Meeting We will host the Annual Meeting virtually via the Internet at www.virtualshareholdermeeting.com/WS2024. You will not be able to attend the Annual Meeting in person. Only shareholders of record at the close of business on the Record Date may participate in and vote at the Annual Meeting. Any shareholder may listen to the Annual Meeting. The webcast will start at 8:30 a.m., Eastern Daylight Time, on September 25, 2024. Instructions on how to connect to and participate in the Annual Meeting, including how to demonstrate proof of ownership of the common shares, are posted at www.virtualshareholdermeeting.com/WS2024. If you do not have your 16-digit control number that is printed in the box found directly after “Control #” provided on your Notice of Availability or your proxy card (if you received a printed copy of the proxy materials), you will only be able to listen to the Annual Meeting. How to Vote and Voting Deadlines If you are a registered shareholder, there are several ways for you to vote your common shares:
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| • | Vote by Internet. |
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Before the Date of the Annual Meeting: Go to www.proxyvote.com, or, using a mobile device, scan the QR barcode on your proxy card or Notice of Availability. You can use the Internet 24 hours a day, seven days a week, to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m., Eastern Daylight Time, on September 24, 2024. Have your proxy card or Notice of Availability in hand when you access the website or scan the QR barcode and follow the instructions to obtain your records and create an electronic voting instruction form. During the Annual Meeting: Go to www.virtualshareholdermeeting.com/WS2024. You may attend the Annual Meeting via the Internet and vote during the Annual Meeting. Have the information that is shown in the box found directly after “Control #” provided on your proxy card or Notice of Availability available and follow the instructions.
TO BE HELD ON SEPTEMBER 25, 2024
| • | Vote By Telephone: Call 1-800-690-6903. You can use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m., Eastern Daylight Time, on September 24, 2024. Have your proxy card or Notice of Availability in hand when you call and follow the instructions. |
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| • | By Mail: If you received a printed copy of the proxy materials, you may submit your vote by completing, signing and dating your proxy card and returning it in the prepaid envelope to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, New York 11717. Sign your name exactly as it appears on the proxy card. Proxy cards submitted by mail must be received by Broadridge no later than September 24, 2024 to be voted at the Annual Meeting. |
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If you vote via the Internet (including by using a mobile device to scan the QR barcode on your proxy card or Notice of Availability and following the prompts) or by telephone, your electronic vote authorizes the named proxy holders in the same manner as if you signed, dated and returned your proxy card. If you vote via the Internet or by telephone, do not return your proxy card. If you are a beneficial owner of the common shares, you should have received a notice that directs you to the website where you can access our proxy materials as well as voting instructions from the broker, bank or other nominee holding the common shares. You should follow the voting instructions provided by your broker, bank or nominee in order to instruct your broker, bank or nominee on how to vote your common shares. Please note that the voting instructions provided by your broker, bank or nominee will have a voting deadline that is earlier than those listed above. The availability of telephone and Internet voting will depend on the voting process of the broker, bank or nominee. Common shares held beneficially may not be voted by the beneficial owner during our Annual Meeting. How to Revoke or Change Your Vote after Submitting Your Proxy If you are a registered shareholder, you may revoke or change your vote at any time before the final vote at the Annual Meeting by:
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| • | signing and returning a new proxy card with a later date – only your latest completed, signed and dated proxy card received by September 24, 2024, will be counted; |
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| • | submitting a later-dated vote by telephone or via the Internet (including by using a mobile device to scan the QR barcode on your proxy card or Notice of Availability and following the prompts) – only your latest telephone or Internet voting instructions received by 11:59 p.m., Eastern Daylight Time, on September 24, 2024, will be counted; |
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| • | participating in the Annual Meeting live via the Internet and voting during the Annual Meeting; or |
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| • | delivering a written revocation to our Secretary at 100 West Old Wilson Bridge Road, Columbus, Ohio 43085, that is received no later than 5:00 p.m., Eastern Daylight Time, on September 24, 2024. |
TO BE HELD ON SEPTEMBER 25, 2024
If you are a beneficial owner of the common shares, you must contact the broker, bank or other nominee holding your common shares and follow the instructions of the broker, bank or other nominee for revoking or changing your vote. Notice of Internet Availability of Proxy Materials In accordance with rules adopted by the SEC, instead of mailing a printed copy of our proxy materials to each shareholder of record, we are permitted to furnish our proxy materials, including the letter to shareholders, Notice of Annual Meeting of Shareholders, this Proxy Statement, our 2024 Annual Report and the form of proxy, by providing access to such documents on the Internet. Generally, shareholders will not receive printed copies of the proxy materials unless they request them. A Notice of Availability that provides instructions for accessing our proxy materials via the Internet has been mailed directly to registered shareholders. The Notice of Availability also provides instructions regarding how registered shareholders may vote their common shares via the Internet. Registered shareholders who prefer to receive a paper or e-mail copy of our proxy materials must follow the instructions provided in the Notice of Availability for requesting such proxy materials. The Notice of Availability only identifies the items to be voted on at the Annual Meeting. You cannot vote by marking the Notice of Availability and returning it. The Notice of Availability provides instructions on how to cast your vote. A notice that directs beneficial owners of the common shares to the website where they can access our proxy materials should be forwarded to each beneficial owner by the broker, bank or other holder of record who is considered the registered shareholder with respect to the common shares of the beneficial owner. Such broker, bank or other holder of record should also provide each beneficial owner of the common shares with instructions on how the beneficial owner may request a paper or e-mail copy of our proxy materials. Beneficial owners have the right to direct their broker, bank or other holder of record on how to vote their common shares by following the voting instructions they receive from their broker, bank or other holder of record. To enroll in the electronic delivery service for future shareholder meetings, use your Notice of Availability (or proxy card, if you received a printed copy of the proxy materials) to register online at www.proxyvote.com and, when prompted, indicate that you agree to receive or access shareholder communications electronically in future years. Quorum and Tabulation of Voting Results Tabulation of the votes cast at the Annual Meeting will be performed by Broadridge and such tabulation will be inspected by the inspector of election for the Annual Meeting that is appointed by the Board. The presence, in person or by proxy, of the holders of one-third of the outstanding common shares entitled to vote at the Annual Meeting will constitute a quorum, permitting us to conduct business at the Annual Meeting. If you are a registered shareholder and submit a proxy, your common shares will be counted to determine whether we have a quorum even if you abstain or fail to provide voting instructions on any of the proposals described in this Proxy Statement and listed on the form of proxy. If your common shares are held in the name of your broker, bank or other nominee, and you do not instruct your broker, bank or other nominee how to vote your common shares, those common shares will still be counted for purposes of determining the presence or absence of a quorum for the transaction of business if your broker, bank or other nominee submits a proxy. Proxy Solicitation Costs This solicitation of proxies is made by and on behalf of the Board. In addition to mailing the Notice of Availability (or, if applicable, paper copies of our proxy materials) to registered shareholders as of the close of business on the Record Date, the brokers, banks and other nominees holding the common shares for beneficial owners must provide a notice as to where such beneficial owners may access our proxy materials in order that such common shares may be voted. Solicitation may also be made by our directors, officers and other employees telephonically, electronically or by other means of communication. Our directors, officers and employees who assist with the solicitation will not be specially compensated for those services, but they may be reimbursed for their out-of-pocket expenses incurred in connection with the solicitation. In addition, we have retained Broadridge to aid in the solicitation of proxies with respect to common shares held by broker/dealers, financial institutions and other custodians, fiduciaries and nominees, for a fee of approximately $17,000, plus out-of-pocket expenses. We will reimburse Broadridge, as well as brokers, banks or other holders of record, for their reasonable costs in sending our proxy materials to the beneficial owners of the common shares entitled to vote at the Annual Meeting. We will bear the costs incurred in connection with the solicitation of proxies on behalf of the Board, other than the Internet access or telephone usage fees which may be charged to shareholders. Security Ownership of Certain Beneficial Owners and Management The following table furnishes as of the Record Date (unless otherwise noted below), with respect to each person known to us to be the beneficial owner of more than 5% of our outstanding common shares, the name and address of such owner and the number and percentage of outstanding common shares beneficially owned (as determined in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)).
TO BE HELD ON SEPTEMBER 25, 2024
| Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership (1) | Percent of Outstanding Common Shares (2) | | John P. McConnell 200 West Old Wilson Bridge Road, Columbus, OH 43085 | 17,134,583 (3) | 34% | | BlackRock, Inc. 50 Hudson Yards, New York, NY 10001 | 4,934,886 (4) | 10.0% | | The Vanguard Group 100 Vanguard Blvd., Malvern, PA 19355 | 5,246,781 (5) | 10.6% |
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| (1) Except as otherwise indicated by footnote, each named beneficial owner has sole voting power and sole dispositive power over the listed common shares. |
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| (2) The “Percent of Outstanding Common Shares” is calculated by dividing (a) the aggregate amount of common shares beneficially owned by each reporting person, as reported by such person and disclosed in the table above by (b) the sum of (i) 50,391,154 common shares outstanding on the Record Date and (ii) the number of common shares, if any, as to which the named beneficial owner has the right to acquire beneficial ownership upon the exercise of stock options which are currently exercisable or which will first become exercisable within 60 days after the Record Date (collectively, “Currently Exercisable Options”). |
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| (3) Includes 12,415,982 common shares held of record by JMAC, Inc. (“JMAC”), a private investment company substantially owned, directly or indirectly, by Mr. McConnell and members of his family. The directors of JMAC have granted Mr. McConnell sole voting power and sole dispositive power with respect to these 12,415,982 common shares. JMAC has the right to receive the dividends from and the proceeds from the sale of, such 12,415,982 common shares. Includes 2,428,312 common shares held of record by an independent corporate trustee in trust for the benefit of Mr. McConnell and his sister. The independent corporate trustee has voting power and dispositive power over such common shares; however, the trustee’s investment decisions are subject to the prior approval or disapproval of Mr. McConnell and, accordingly, Mr. McConnell may be deemed to “share” dispositive power with the trustee. Mr. McConnell has the right to change the independent corporate trustee; however, any successor trustee appointed by Mr. McConnell must be an independent corporate trustee. Includes 8,173 common shares held by Mr. McConnell as custodian for the benefit of his son, who is a minor. Includes 7,343 common shares held by Mr. McConnell’s wife as custodian for the benefit of her son, who is a minor. For purposes of Rule 13d-3 under the Exchange Act, Mr. McConnell may be deemed to hold shared voting power and shared dispositive power over such 7,343 common shares. Includes 123,000 common shares held by The McConnell Educational Foundation for the benefit of third parties, of which Mr. McConnell is one of three trustees and shares voting power and shares dispositive power. Mr. McConnell disclaims beneficial ownership of these 123,000 common shares. Includes 118,000 common shares held by The McConnell Family Trust of which Mr. McConnell is co-trustee and has sole voting power and sole dispositive power. Includes 255,875 common shares held by the Margaret R. McConnell Trust f/b/o Margaret Kollis, of which Mr. McConnell is trustee and has sole voting power and sole dispositive power. Includes 44,250 common shares held in the McConnell 2020 LAE Trust, an irrevocable trust for the benefit of the son of Mr. McConnell’s wife as to which she serves as the trustee. For purposes of Rule 13d-3 under the Exchange Act, Mr. McConnell may be deemed to hold shared voting power and shared dispositive power over such 44,250 common shares. Includes an aggregate of 398,000 common shares held in four separate irrevocable trusts (with each irrevocable trust holding 99,500 common shares), with each such irrevocable trust having the same independent individual trustee who is not related to Mr. McConnell. The independent individual trustee has voting and dispositive power over such 398,000 common shares; however, Mr. McConnell has the right to reacquire the assets of each trust by substituting property of an equivalent value. Accordingly, Mr. McConnell may be deemed to share dispositive power with the independent individual trustee. As of August 1, 2024, an aggregate of 316,907 common shares held by JMAC and by Mr. McConnell had been pledged as security to various financial institutions, in connection with both investment and personal loans. |
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| (4) Information is based on Amendment No. 1 to Schedule 13G, filed with the SEC on July 8, 2024, by BlackRock, Inc. (together with its subsidiaries, “BlackRock”). BlackRock reported sole voting power as to 4,867,799 of the common shares and sole dispositive power as to 4,934,886 of the common shares reported to be beneficially owned by BlackRock at June 30, 2024. The beneficial ownership of BlackRock may have changed prior to our filing of this Proxy Statement. |
TO BE HELD ON SEPTEMBER 25, 2024
| (5) Information is based on Amendment No. 1 to Schedule 13G, filed with the SEC on April 10, 2024, by The Vanguard Group (together with its subsidiaries, “Vanguard”). Vanguard reported shared voting power as to 19,931 of the common shares, sole dispositive power as to 5,192,525 of the common shares and shared dispositive power as to 54,256 of the common shares reported to be beneficially owned by Vanguard at March 28, 2024. The beneficial ownership of Vanguard may have changed prior to our filing of this Proxy Statement. |
TO BE HELD ON SEPTEMBER 25, 2024
10 Worthington Steel | 2024 Proxy Statement • Security Ownership of Certain Beneficial Owners and Management • The following table furnishes the number and percentage of outstanding common shares beneficially owned (as determined in accordance with Rule 13d-3 under the Exchange Act) by: (a) each of our current directors; (b) each of our director nominees; (c) each NEO; and (d) all of our current directors and executive officers as a group, in each case as of the Record Date.
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| Name of Beneficial Owner | Amount and Nature of Beneficial Ownership (1) | Percent of Outstanding Common Shares (2) | | Timothy A. Adams | 61,697 | * | | John B. Blystone | 226,235 | * | | Jon J. Bowsher | 5,183 (3) | * | | Charles M. Chiappone | 7,033 (3) | * | | Geoffrey G. Gilmore | 335,319 | * | | Joseph Y. Heuer | 6,239 | * | | Jeff R. Klingler | 106,162 | * | | John H. McConnell II | 32,957 (3) | * | | Nancy G. Mistretta | 5,183 (3) | * | | Carl A. Nelson, Jr. | 85,583 (3) | * | | Sidney A. Ribeau | 129,225 (3) | * | | Mary Schiavo | 104,742 (3) | * | | George P. Stoe | 7,590 (3) | * | | Michaune D. Tillman | 4,784 | * | | All current Directors and Executive Officers as a Group | 1,117,932 (4)(5) | 2.2% |
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* Denotes ownership of less than 1% of the outstanding common shares.
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| (1) Except as otherwise indicated by footnote, each named beneficial owner has sole voting power and sole dispositive power over the listed common shares or shares voting power and/or dispositive power with his or her spouse. The amounts set forth include the following Currently Exercisable Options: Mr. Adams, 24,001; Mr. Gilmore, 22,174; and Mr. Klingler, 11,838. The amounts set forth also include for Mr. Gilmore and Mr. Klingler, 38,840 and 2,419 shares in the NQDC Plan and for Mr. Ribeau and Ms. Schiavo, 60,592 and 18,753 shares in the Directors DC Plan. |
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| (2) The “Percent of Outstanding Common Shares” is calculated by dividing (a) the aggregate amount of common shares beneficially owned by each reporting person, as reported by such person and disclosed in the table above by (b) the sum of (i) 50,391,154 common shares outstanding on the Record Date, and (ii) the number of common shares, if any, as to which the named person or group has the right to acquire beneficial ownership upon the exercise of Currently Exercisable Options. |
TO BE HELD ON SEPTEMBER 25, 2024
| (3) Includes the following number of restricted common shares, which will vest on September 27, 2023: (a) for Mr. Bowsher, Mr. Chiappone, Mr. McConnell and Ms. Mistretta, 5,183 restricted common shares; (b) for Mr. Nelson, Dr. Ribeau and Ms. Schiavo, 7,428 restricted common shares; and (c) for Mr. Stoe 7,590 restricted common shares. For further information concerning the terms of the restricted common shares granted to non-employee directors, see footnote (6) below. |
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| (4) The number of common shares shown as beneficially owned by our current directors and executive officers as a group includes 58,013 common shares subject to Currently Exercisable Options and 280,018 restricted common shares. See footnote (5) below for more information on the restricted common shares. The number shown does not include any common shares issuable in connection with the performance shares awarded to NEOs and other executive officers, as to which the performance period has not ended, and the applicable vesting dates have not yet occurred. The number of common shares shown for all current directors and executive officers as a group includes the common shares beneficially owned by five executive officers not individually identified. Restricted common shares held by executive officers not named in this table are not listed individually. |
TO BE HELD ON SEPTEMBER 25, 2024
| (5) The restricted common shares granted to our executive officers and non-employee directors are held in escrow by us and may not be sold, transferred, pledged, assigned or otherwise alienated or hypothecated until the restrictions thereon have lapsed. Each holder of restricted common shares may exercise any voting rights associated with the restricted common shares during the restriction period. In addition, any dividends or distributions paid with respect to the common shares underlying the restricted common shares will be held by us in escrow during the restriction period and, at the end of the restriction period, will be distributed or forfeited in the same manner as the restricted common shares with respect to which they were paid. For further information regarding the restricted common shares granted to our executive officers and non-employee directors, please see the tables and accompanying narrative discussion in the “Executive Compensation” and “Compensation of Directors — Equity Grants” sections of this Proxy Statement. |
TO BE HELD ON SEPTEMBER 25, 2024
11 Worthington Steel | 2024 Proxy Statement • Security Ownership of Certain Beneficial Owners and Management • Corporate Governance Corporate Governance Guidelines Upon the recommendation of the Nominating and Governance Committee, in accordance with NYSE Rules, the Board has adopted the Corporate Governance Guidelines to promote the effective functioning of the Board and its committees and to reflect our commitment to high standards of corporate governance. The Board, with the assistance of the Nominating and Governance Committee, periodically reviews the Corporate Governance Guidelines to ensure they comply with all applicable requirements. The Corporate Governance Guidelines are available on the “Governance” page of the “Investors” section of our website located at www.worthingtonsteel.com . Code of Conduct In accordance with NYSE Rules and SEC Rules, the Board adopted the Worthington Steel, Inc. Code of Conduct (the “Code of Conduct”) to serve as the ethical and legal standards for our directors, officers and employees. The Code of Conduct reinforces our commitment to adhere to high standards of business ethics. The Code of Conduct also establishes ethical principles by which our principal executive officer, principal financial officer, principal accounting officer, controller or persons performing similar functions are expected to conduct themselves in carrying out their duties and responsibilities. The Code of Conduct is available on the “Governance” page of the “Investors” section of our website located at www.worthingtonsteel.com, and we intend to post on such website page any amendments to or waivers from provisions of the Code of Conduct related to the elements listed under Item 406(b) of SEC Regulation S-K. Insider Trading Policy We have adopted the Worthington Steel, Inc. Insider Trading Policy (the “Insider Trading Policy”) to govern purchases, sales and other dispositions of our securities by our directors, officers and employees. The Insider Trading Policy is reasonably designed to promote compliance with insider trading law, rules and regulations as well as NYSE Rules. The Insider Trading Policy also provides that the Company will not engage in transactions in its securities while aware of material nonpublic information relating to the Company or its securities, except pursuant to a trading plan intended to comply with SEC Rule 10b5-1 that is entered into and maintained in compliance with the Insider Trading Policy and applicable law. Director Independence Pursuant to the Corporate Governance Guidelines, a director is determined to be independent if he or she is independent of management and has no material relationship with us, either directly or indirectly as a partner, shareholder or officer (or similar position) of an entity that has such a relationship with us, as affirmatively determined by the Board. The Board observes all additional criteria for independence required under NYSE Rules, SEC Rules or other applicable laws and regulations. The Board has been advised of the nature and extent of any direct or indirect personal and business relationships between us and each director and director nominee or any entities for which any director or director nominee is a partner, officer, employee or shareholder. The Board has reviewed, considered and discussed such relationships, and the compensation which each director or director nominee has received, directly or indirectly, from us, in order to determine whether each director and director nominee meets the independence requirements of the Corporate Governance Guidelines, the NYSE Rules and the SEC Rules. The Board has affirmatively determined that (a) none of Mr. Bowsher, Mr. Chiappone, Ms. Mistretta, Mr. Nelson, Dr. Ribeau, Ms. Schiavo or Mr. Stoe (each, an “Independent Director” and collectively, the “Independent Directors”) has any relationship with us, either directly or indirectly, including, without limitation, any commercial, industrial, banking, consulting, legal, accounting, charitable or familial relationship, which: (i) interfered, interferes or may interfere, with his or her independence from management and us or the exercise of his or her independent judgment, (ii) would be inconsistent with a determination of independence under applicable NYSE Rules and SEC Rules, or (iii) would impair his or her independence under the Corporate Governance Guidelines; and (b) each of the Independent Directors qualifies as independent under the Corporate Governance Guidelines. As required by applicable NYSE Rules, the Independent Directors represent a majority of our directors. Mr. Blystone does not qualify as independent under NYSE Rules, SEC Rules or the Corporate Governance Guidelines because he is employed as our Executive Chairman. • Corporate Governance Mr. Gilmore does not qualify as independent under NYSE Rules, SEC Rules or the Corporate Governance Guidelines because he is employed as our President and CEO. Mr. McConnell does not qualify as independent due to his employment with WOR within the past three years. Barring any unusual circumstances, the Board has determined that a director’s independence would not be impaired if: (a) the director is an executive officer or an employee (or his or her immediate family member is an executive officer or an employee) of a company that makes payments to, or receives payments from, us for property or services performed in the ordinary course of business in an amount which, in any single fiscal year, does not exceed the greater of $1,000,000 or 2% of such other company’s consolidated gross revenues; (b) we make contributions to a scholastic or charitable tax-exempt organization for which the director (or his or her immediate family member) serves as either a member of the board of directors (or similar governing body) or an officer if the contributions, in any single fiscal year, do not exceed the greater of $500,000 or 1% of the total contributions received by that tax-exempt organization during such fiscal year; or (c) we use facilities (dining facilities, clubs, etc.) in which the director is a greater than 5% owner if charges to us are consistent with charges paid by unrelated third parties and are fair, reasonable and consistent with those for similar services available at similar facilities, as long as the charges do not reach other thresholds under applicable NYSE Rules which would disqualify a director from being independent. The Board specifically considered a number of circumstances in the course of reaching the conclusion that the Independent Directors qualify as independent under the Corporate Governance Guidelines as well as applicable NYSE Rules and SEC Rules, including the relevant relationships described below in the section captioned “Transactions With Certain Related Persons” in this Proxy Statement. Nominating Procedures The Board’s Nominating and Governance Committee has responsibility for providing oversight on a broad range of issues surrounding the composition and operation of the Board, including identifying candidates qualified to become directors and recommending director nominees to the Board.
TO BE HELD ON SEPTEMBER 25, 2024
When considering candidates for the Board, the Nominating and Governance Committee evaluates the entirety of each candidate’s credentials but does not have specific eligibility requirements or minimum qualifications which must be met by a Nominating and Governance Committee-recommended nominee and has not adopted a formal policy with regard to the consideration of diversity in identifying director nominees. The Nominating and Governance Committee considers those factors it deems appropriate, including, but not limited to, independence, judgment, skill, diversity, strength of character, ethics and integrity, experience with businesses or organizations of comparable size or scope, experience as an executive of or adviser to public and private companies, experience and skill relative to other Board members, specialized knowledge or expertise, and the desirability of the candidate’s membership on the Board and any committees of the Board. Depending on the current needs of the Board, the Nominating and Governance Committee may weigh certain factors more or less heavily. The Nominating and Governance Committee does, however, believe that all members of the Board should have strong character and integrity, a reputation for working constructively with others, sufficient time to devote to Board matters, and no conflict of interest that would interfere with his or her performance as a director. While the Board and the Nominating and Governance Committee do not have specific eligibility requirements and do not, as a matter of course, weigh any of the factors they deem appropriate more heavily than others, both the Board and the Nominating and Governance Committee believe that, as a group, the directors should have diverse backgrounds and qualifications. We believe that the members of the Board, as a group, have such backgrounds and qualifications. The Nominating and Governance Committee considers candidates for the Board from any reasonable source, including shareholder recommendations, but does not evaluate candidates differently based on the source of the recommendation. The process for seeking and vetting additional director candidates is ongoing and is not dependent upon the existence of a vacancy on the Board. Accordingly, the Board believes that this ongoing identification of qualified candidates functions as an appropriate director succession plan. Pursuant to its charter, the Nominating and Governance Committee has the authority to retain consultants and search firms to assist with the process of identifying and evaluating director candidates and to approve the fees and other retention terms for any such consultant or search firm. The Nominating and Governance Committee has never used a consultant or search firm for such purpose, and, accordingly, we have paid no such fees, and all director nominees in this Proxy Statement were recommended by a non-employee director or our Executive Chairman. Shareholders may recommend director candidates for consideration by the Nominating and Governance Committee by sending the recommendation to the Chair of the Nominating and Governance Committee, in care of our Secretary, to our executive offices at 100 West Old Wilson Bridge Road, Columbus, Ohio 43085. The recommendation must include the candidate’s name, age, business address, residence address and principal occupation. The recommendation must also describe the qualifications, attributes, skills or other qualities possessed by the recommended director candidate. A written statement from the candidate consenting to serve as a director, if elected, and a commitment by the candidate to meet personally with Nominating and Governance Committee members must accompany any such recommendation. The Board, taking into account the recommendations of the Nominating and Governance Committee, selects nominees for election as directors at each Annual Meeting. In addition, shareholders wishing to nominate directors may do so, provided they comply with our Amended Articles of Incorporation, our Amended Regulations and SEC Rules. In order to nominate an individual for election as a director at a meeting, a shareholder must give written notice of the shareholder’s intention to make such nomination. The notice must be sent to our Secretary, and either delivered in person to, or mailed to and received at, our principal executive offices at 100 West Old Wilson Bridge Road, Columbus, Ohio 43085, no earlier than 120 days prior to and not less than 90 days prior to the first anniversary of the date of the prior year’s annual meeting of shareholders; provided, however, that if (1) the annual meeting of shareholders is advanced by more than 30 days, or delayed by more than 60 days, from the first anniversary of the prior year’s annual meeting of shareholders or (2) no annual meeting of shareholders was held during the prior year, to be timely, a shareholder’s notice must be delivered to or mailed and received at our principal executive offices by (a) no earlier than 120 days prior to such annual meeting of shareholders and (b) no later than the later of 90 days prior to such annual meeting of shareholders and 10 days after the day on which the notice of such annual meeting of shareholders was made in accordance with our Amended Regulations and Ohio law . In no event may a nominating shareholder provide notice with respect to a greater number of director candidates than are subject to election by shareholders at the applicable meeting. Our Secretary will deliver any shareholder notice received in a timely manner to the Nominating and Governance Committee for review. Each shareholder notice must include the information required by our Amended Articles, our Amended Regulations and SEC rules, including, as to each individual the shareholder proposes to nominate for election as a director: (a) the name, age, business address and, if known, residence address of the proposed nominee; (b) the principal occupation or employment of the proposed nominee; (c) the number of common shares beneficially owned by the proposed nominee; (d) a description of any direct or indirect material interest in any material contract or agreement between or among the nominating shareholder, on the one hand, and each candidate for nomination or his or her respective associates or any other participants in such solicitation, on the other hand, including, without limitation, all information that would be required to be disclosed pursuant to Item 404 under SEC Regulation S-K if such nominating shareholder were the “registrant” for purposes of such rule and the candidate for nomination were a director or executive officer of such registrant; (e) any other information relating to the proposed nominee that is required to be disclosed concerning nominees in proxy solicitations under SEC Rules, including the individual’s written consent to be named in the proxy statement as a nominee and to serve as a director, if elected; and (f) a completed and signed questionnaire, representation and agreement as provided for in our Amended Regulations. The nominating shareholder must also provide (i) the name and address of the nominating shareholder and (ii) the number of common shares beneficially owned by the nominating shareholder. No individual may be elected as a director unless he or she has been nominated by a shareholder in the manner described above or by the Board or the Nominating and Governance Committee. Compensation Committee Interlocks and Insider Participation
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The Compensation Committee of the Board is currently comprised of Mr. Chiappone (Chair), Mr. Bowsher and Mr. Stoe. No member of the Compensation Committee is a present or past employee or officer of ours or has, during fiscal 2024 and through the date of this Proxy Statement, had a material interest in any related person transaction, as defined in Item 404 of SEC Regulation S-K. During fiscal 2024 and through the date of this Proxy Statement, none of our executive officers has served on the board of directors or compensation committee (or other committee performing equivalent functions) of any other entity, whose executive officers served on the Board or the Compensation Committee. Communications with the Board The Board believes it is important for shareholders and other interested persons to have a process by which to send communications to the Board and its individual members, including the Lead Independent Director. Accordingly, shareholders and other interested persons who wish to communicate with the Board, the non-employee directors as a group, the Independent Directors as a group, the Lead Independent Director or any other individual director may do so by addressing such correspondence to the name(s) of the specific director(s), to the “Non-Employee Directors” as a whole, to the “Independent Directors” as a whole or to the “Board of Directors” as a whole, and sending it in care of our Secretary, to our executive offices at 100 West Old Wilson Bridge Road, Columbus, Ohio 43085. The mailing envelope must contain a clear notation indicating that the enclosed correspondence is a “Shareholder/Interested Person – Non-Employee Director Communication”, “Shareholder/Interested Person – Independent Director Communication”, “Shareholder/Interested Person – Board Communication”, “Shareholder/Interested Person – Lead Independent Director Communication”, or “Shareholder/Interested Person – Director Communication”, as appropriate. All such correspondence must identify the author as a shareholder or other interested person (identifying such interest) and clearly indicate whether the communication is directed to all members of the Board, to the “Non-Employee Directors” as a whole, to the “Independent Directors” as a whole or to a certain specified individual director(s). Copies of all such correspondence will be circulated to the appropriate director(s). Correspondence marked on the exterior as “personal and confidential” will be delivered to the identified recipient(s) without opening. There is no screening process in respect of communications from shareholders or other interested persons. The process for forwarding communications to the appropriate Board member(s) has been approved by the Independent Directors. Questions, complaints and concerns may also be submitted to our directors through our Worthington Steel Code of Conduct & Ethics Line website at www.worthingtonsteel.ethicspoint.com or by calling 844-857-1391 inside the United States and Canada. Corporate Citizenship and Sustainability Highlights In addition to our commitment to high ethical standards and sound corporate governance practices, which are summarized in the “Commitment to Shareholders / Governance” section in this Proxy Statement, we are dedicated to responsible corporate citizenship. Although our approach to corporate citizenship is ever evolving, our primary focus remains our people, our community and our environmental footprint. We are constantly seeking to improve on and rely on our Philosophy rooted in the Golden Rule to guide us through all aspects of corporate citizenship and sustainability. In line with our people-first Philosophy, our employees have always been, and will always be, our most important asset. As such, we are continually focused on creating and maintaining a strong corporate culture. Our culture provides employees with opportunities for personal and professional development, as well as community engagement, all of which we believe contribute to our overall success. We have repeatedly been recognized as a top place to work and we offer our employees competitive pay and above-market benefits, as compared to others in our industry, all while focusing on safety, wellness and promoting a diverse and inclusive culture. Our Philosophy guides and encourages us to practice good citizenship which is reflected in our employees’ efforts in our communities. Through financial contributions to not-for-profit organizations and volunteering, we are working to improve the quality of life in the communities where we live and work. We believe that together, better is possible at work and in our communities. We have always made protecting our people and the environment a top priority. We have demonstrated our commitment to environmentally responsible operations by conforming to international standards for environmental management (ISO 14001) and reducing our impact on the environment in multiple areas of our global business. In addition, we have sought continuous improvement in our health and safety programs, which follow ISO 45001 standards, and regularly have an industry-leading safety record. Meetings of the Board Following the Separation, the Board held two meetings during fiscal 2024. During fiscal 2024, except for Mr. Gilmore, each incumbent director attended at least 75% of the aggregate of (a) the total number of meetings held by the Board during the period such director served, and (b) the total number of meetings held by all committees of the Board on which such director served during the period such director served. The Board and our management are committed to effective corporate governance practices. The Corporate Governance Guidelines describe the governance principles and procedures by which the Board functions. The Board will annually review and update, as appropriate, the Corporate Governance Guidelines and the charters of the committees of the Board in response to corporate governance developments, including changes in NYSE Rules and SEC Rules, and recommendations by directors in connection with Board and Board committee evaluations. In accordance with the Corporate Governance Guidelines and NYSE Rules, our non-employee directors regularly meet (without management present) in executive session at such times as the non-employee directors deem necessary or appropriate. Additionally, all directors determined by the Board as meeting the independence requirements of the Corporate Governance Guidelines, the NYSE Rules and the SEC Rules meet in executive session (without management or non-independent directors) at least once annually. These executive sessions are typically held in conjunction with regularly scheduled Board meetings and are led by the Lead Independent Director, and appropriate feedback from these sessions is given to the CEO and the Executive Chairman. Board Member Attendance at Annual Meetings of the Shareholders We do not have a formal policy with respect to attendance by our directors at annual meetings of the shareholders. The Annual Meeting will be our first annual meeting of the shareholders following the Separation. Board Leadership Structure The Board is led by Mr. Blystone, who has been a director and Executive Chairman since the Separation in December 2023. The Board is currently comprised of Mr. Blystone, Mr. Gilmore and 8 non-employee directors. Mr. Stoe is our Lead Independent Director. The Board has four standing committees: Audit, Compensation, Nominating and Governance, and Executive. Each of the Audit Committee, the Compensation Committee, and the Nominating and Governance Committee is chaired by a separate Independent Director and is comprised solely of Independent Directors. Detailed information on each Board committee is contained in the section captioned “Corporate Governance — Committees of the Board” in this Proxy Statement.
TO BE HELD ON SEPTEMBER 25, 2024
We do not have a fixed policy regarding whether the offices of Chairman of the Board and CEO should be vested in the same person or two different people. The Board believes having Mr. Blystone in the role of Executive Chairman of the Board and Mr. Gilmore as the CEO, while maintaining a Lead Independent Director, is an effective management structure, and that the structure promotes the development and execution of our business strategy and facilitates effective oversight by the Board, which are essential to effective governance. The Board believes that its current leadership structure supports the risk oversight function of the Board. Having the roles of CEO and Chairman of the Board filled by separate individuals allows the CEO to lead senior management in its supervision of the Company’s day-to-day business operations, including the identification, assessment and mitigation of material risks, and allows the Chairman of the Board to lead the Board in its oversight of the Company’s risk assessment and risk management activities. The Board believes that its strong governance practices, including its supermajority of independent directors, the separation of the Chairman of the Board and CEO roles, and the clearly-defined Lead Independent Director responsibilities, provide an appropriate balance among strategy development, operational execution and independent oversight of the Company. The Board periodically reviews our leadership structure and retains the authority to modify the structure, as and when appropriate, to address our then current circumstances. Lead Independent Director Upon the Separation, we established a Lead Independent Director position and appointed Mr. Stoe as the Lead Independent Director. A copy of our Lead Independent Director Charter is available on the “Governance” page of the “Investors” section of our website located at www.worthingtonsteel.com. In addition to the other duties more fully described in our Lead Independent Director Charter, Lead Independent Director is responsible for:
TO BE HELD ON SEPTEMBER 25, 2024
| • | advising the Chairman of the Board and the CEO regarding the information, agenda and meeting schedules for the Board and Board committees, and as to the quality, quantity and timeliness of the information submitted to the Board by our management that is necessary or appropriate for the non-employee directors to effectively and responsibly perform their duties; |
TO BE HELD ON SEPTEMBER 25, 2024
| • | recommending to the Chairman of the Board and the CEO the retention of advisers and consultants who report directly to the Board; |
TO BE HELD ON SEPTEMBER 25, 2024
| • | assisting the Board, the Nominating and Governance Committee and our officers in ensuring compliance with and implementation of the Corporate Governance Guidelines; |
TO BE HELD ON SEPTEMBER 25, 2024
| • | calling meetings of the non-employee and independent directors, developing the agenda for and serving as chairman of the executive sessions, and serving as principal liaison between the non-employee and independent directors and the Chairman of the Board and the CEO; |
TO BE HELD ON SEPTEMBER 25, 2024
| • | working with the Nominating and Governance Committee, the Chairman of the Board and the CEO to recommend the membership of the various Board committees, as well as the selection of Board committee chairs; |
TO BE HELD ON SEPTEMBER 25, 2024
| • | serving as chair of meetings of the Board when the Chairman of the Board is not present; |
TO BE HELD ON SEPTEMBER 25, 2024
| • | being available for consultation and direct communications with our shareholders, if requested and appropriate; and |
TO BE HELD ON SEPTEMBER 25, 2024
| • | performing such other duties as the Board may determine. |
TO BE HELD ON SEPTEMBER 25, 2024
Committees of the Board The Board has four standing committees: the Audit Committee, the Compensation Committee, the Nominating and Governance Committee, and the Executive Committee. The charter for each committee has been reviewed and approved by the Board and is available on the “Governance” page of the “Investors” section of our website located at www.worthingtonsteel.com.
TO BE HELD ON SEPTEMBER 25, 2024
| Director | Audit Committee | Compensation Committee | Nominating and Governance Committee | Executive Committee | | Mr. Blystone | | | | | | Mr. Bowsher* | | | | | | Mr. Chiappone* | | | | | | Mr. Gilmore | | | | | | Mr. McConnell | | | | | | Ms. Mistretta* | | | | | | Mr. Nelson* | | | | | | Dr. Ribeau* | | | | | | Ms. Schiavo* | | | | | | Mr. Stoe* | | | | |
TO BE HELD ON SEPTEMBER 25, 2024
*Independent Director Chairperson Member Audit Committee Financial Expert Audit Committee The Board has determined that each member of the Audit Committee qualifies as an independent director under the Corporate Governance Guidelines, NYSE Rules and SEC Rule 10A-3. The Board believes each member of the Audit Committee is qualified to discharge his or her duties on our behalf and satisfies the financial literacy requirement of the NYSE Rules. The Board has also determined that each of Ms. Mistretta and Mr. Nelson qualifies as an “audit committee financial expert”, as that term is defined in Item 407(d)(5) of SEC Regulation S-K, by virtue of their respective experience, including as described in Proposal 1 (Election of Directors) of this Proxy Statement. No member of the Audit Committee serves on the audit committee of more than two other public companies. The Audit Committee was established in accordance with Section 3(a)(58)(A) of the Exchange Act. The Audit Committee is organized and conducts its business pursuant to a written charter. The primary responsibility of the Audit Committee is to assist the Board in the oversight of the financial and accounting functions, controls, reporting processes and audits. Specifically, the Audit Committee appoints and evaluates our independent registered public accounting firm and approves the audit engagement, including fees and terms, and non-audit engagements, if any, of such firm. The Audit Committee, on behalf of the Board, reviews, monitors and evaluates: (a) our consolidated financial statements and the related disclosures, including the integrity and quality of our consolidated financial statements; (b) our compliance with legal and regulatory requirements, including the financial reporting process; (c) our systems of disclosure controls and procedures and internal control over financial reporting and our accounting and financial controls; (d) the performance, qualifications and independence of our independent registered public accounting firm, including the performance and rotation of the lead and concurring partners of that firm; (e) the performance of our internal audit function; (f) the annual independent audit of our consolidated financial statements; (g) financial, reporting and compliance risk management; and (h) our overall enterprise risk management program including risks related to privacy, information security, cybersecurity, business conduct, health and safety, compliance, environmental and social matters. The Audit Committee also prepares the report that the SEC Rules require be included in our annual proxy statement. Additional duties and responsibilities set forth in the Audit Committee’s charter include:
TO BE HELD ON SEPTEMBER 25, 2024
| • | reviewing, with our financial management, internal auditors and independent registered public accounting firm, our accounting procedures and policies and audit plans, including staffing, professional services to be provided, audit procedures to be used, and fees to be charged by our independent registered public accounting firm and reviewing the activities of and the results of audits conducted by our internal auditors and our independent registered public accounting firm; |
TO BE HELD ON SEPTEMBER 25, 2024
| • | reviewing, with our independent registered public accounting firm, the audit report of our independent registered public accounting firm on the effectiveness of our internal control over financial reporting filed with our Annual Report on Form 10-K; |
TO BE HELD ON SEPTEMBER 25, 2024
| • | establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or auditing matters, as well as the confidential, anonymous submissions by our employees of concerns regarding questionable accounting or auditing matters; |
TO BE HELD ON SEPTEMBER 25, 2024
| • | setting and maintaining hiring policies for employees or former employees of our independent registered public accounting firm; |
TO BE HELD ON SEPTEMBER 25, 2024
| • | receiving reports concerning any non-compliance with the Code of Conduct by our officers or directors and approving, if appropriate, any waivers therefrom; |
TO BE HELD ON SEPTEMBER 25, 2024
| • | administering our Related Person Transaction Policy and approving, if appropriate, any “related person” transactions with respect to our directors or executive officers; |
TO BE HELD ON SEPTEMBER 25, 2024
| • | reviewing with management, our major financial risk exposures and the steps being taken to monitor and control them as well as our guidelines and policies with respect to risk assessment and risk management and overall antifraud programs and controls; |
TO BE HELD ON SEPTEMBER 25, 2024
| • | directing and supervising any special investigations into matters which may come within the scope of the Audit Committee’s duties; and |
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| • | other matters required by the Financial Accounting Standards Board, the American Institute of Certified Public Accountants, the Public Company Accounting Oversight Board, the SEC, the NYSE and other similar bodies or agencies which could have an effect on our consolidated financial statements. |
TO BE HELD ON SEPTEMBER 25, 2024
Pursuant to its charter, the Audit Committee has the authority to engage and terminate such legal counsel and other consultants and advisors as it deems appropriate to carry out its functions, including the sole authority to approve the fees and other terms of retention of such legal counsel and other consultants and advisors. At least annually, the Audit Committee will evaluate its performance, reviewing and assessing the adequacy of its charter and recommending any proposed changes to the full Board, as necessary to reflect changes in regulatory requirements, authoritative guidance and evolving practices. The Audit Committee met two times during fiscal 2024 following the Separation. The Audit Committee’s report relating to fiscal 2024 is located in the “Audit Committee Matters” section in this Proxy Statement. Compensation Committee The Board has determined that each member of the Compensation Committee qualifies as an independent director under NYSE Rules. The Board has also determined that each member of the Compensation Committee satisfies the additional independence standards for members of a compensation committee under NYSE Rules. All members of the Compensation Committee also qualify as “non-employee directors” for purposes of Rule 16b-3 under the Exchange Act. The Compensation Committee’s charter sets forth the duties and responsibilities of the Compensation Committee, which include:
TO BE HELD ON SEPTEMBER 25, 2024
| • | discharging the Board’s responsibilities relating to compensation of our CEO and executive officers, including reviewing and approving the compensation philosophy, strategies, policies, objectives and guidelines for our executive officers; |
TO BE HELD ON SEPTEMBER 25, 2024
| • | reviewing and approving, if it has been deemed appropriate, our peer group companies and data sources for purposes of evaluating our compensation competitiveness and establishing the appropriate competitive positioning of the levels and mix of compensation elements; |
TO BE HELD ON SEPTEMBER 25, 2024
| • | reviewing and approving corporate goals and objectives, including performance goals, relevant to CEO and executive officer compensation and evaluating the performance of the CEO and executive officers in light of the approved corporate goals and objectives; |
TO BE HELD ON SEPTEMBER 25, 2024
| • | reviewing and approving the metrics used for determining payouts under cash-based and equity-based incentive programs; |
TO BE HELD ON SEPTEMBER 25, 2024
| • | setting the compensation of the CEO and other executive officers, including the amount and types of compensation; |
TO BE HELD ON SEPTEMBER 25, 2024
| • | preparing, producing, reviewing and/or discussing with management, as appropriate, such reports and other information required by applicable laws, rules, regulations or other standards with respect to executive and director compensation, including those required for inclusion in our proxy statement and/or Annual Report on Form 10-K; |
TO BE HELD ON SEPTEMBER 25, 2024
| • | providing recommendations to the Board on Company-sponsored compensation-related proposals to be considered at our annual shareholder meetings, including the advisory vote on the compensation of our named executive officers and the frequency of that advisory vote, and reviewing and considering the results of such votes; |
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| • | reviewing, and advising the Board with respect to, Board compensation; |
TO BE HELD ON SEPTEMBER 25, 2024
| • | administering our equity-based incentive compensation plans, other executive incentive compensation programs, and any other plans and programs which the Board designates; |
TO BE HELD ON SEPTEMBER 25, 2024
| • | reviewing and discussing with management, our compensation risk management disclosures required by SEC Rules relating thereto; |
TO BE HELD ON SEPTEMBER 25, 2024
| • | reviewing and making recommendations to the Board regarding, the creation or revision of any clawback or similar policy allowing us to recover erroneously awarded incentive-based compensation paid to executive officers; |
TO BE HELD ON SEPTEMBER 25, 2024
| • | in consultation with the Nominating and Governance Committee, reviewing, evaluating and making recommendations to the Board concerning shareholder proposals relating to executive and/or director compensation issues and our responses thereto; |
TO BE HELD ON SEPTEMBER 25, 2024
| • | reviewing and discussing with management, our human capital management activities, including matters relating to talent management and development, talent attraction and retention, employee engagement and diversity, equity and inclusion; and |
TO BE HELD ON SEPTEMBER 25, 2024
| • | carrying out such other roles and responsibilities as the Board may designate or delegate to the Compensation Committee. |
TO BE HELD ON SEPTEMBER 25, 2024
The Compensation Committee’s processes and procedures to determine executive compensation, including the use of compensation consultants and the role of executive officers in the executive compensation decision-making process, are described in the sections captioned “Executive Compensation — Compensation Discussion and Analysis — Role of the Compensation Committee” and “Executive Compensation — Compensation Discussion and Analysis — Executive Compensation Philosophy and Objectives” in this Proxy Statement. Pursuant to its charter, the Compensation Committee has sole authority to retain and terminate any compensation consultant, legal counsel or other advisor, as the Compensation Committee deems appropriate to assist the Compensation Committee in the performance of its duties, including the sole authority to approve the fees and other terms and conditions of retention. Prior to any such retention, the Compensation Committee assesses any factors relevant to such consultant’s, legal counsel’s or advisor’s independence from management, including the factors specified in the NYSE Rules, to evaluate whether the services to be performed will raise any conflict of interest or compromise the independence of such consultant, legal counsel or advisor. The Compensation Committee periodically reviews and reassesses the adequacy of its charter and recommends any proposed changes to the full Board, as necessary to reflect changes in regulatory requirements, authoritative guidance and evolving practices. The Compensation Committee evaluates its performance at least annually. The Compensation Committee met two times during fiscal 2024 following the Separation. The Compensation Discussion and Analysis regarding compensation for the NEOs and the Compensation Committee Report are located in the “Executive Compensation” section in this Proxy Statement. Nominating and Governance Committee The Board has determined that each member of the Nominating and Governance Committee qualifies as an independent director under the applicable NYSE Rules. Under the terms of its charter, the Nominating and Governance Committee is to:
TO BE HELD ON SEPTEMBER 25, 2024
| • | develop and periodically review principles of corporate governance, embody such principles in the Corporate Governance Guidelines and recommend the Corporate Governance Guidelines to the Board for its approval; |
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| • | review our Amended Articles of Incorporation, our Amended Regulations and the Corporate Governance Guidelines and recommend to the Board any changes deemed appropriate; |
TO BE HELD ON SEPTEMBER 25, 2024
| • | review the procedures and communication plans for our shareholder meetings and ensure that required information regarding the Company is adequately presented; |
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| • | review and make recommendations to the Board regarding (a) the composition and size of the Board in order to ensure that the Board has the proper expertise and its membership consists of persons with sufficiently diverse backgrounds, (b) the criteria for the selection of Board members and Board committee members, and (c) Board policies on age and term limits for Board members; |
TO BE HELD ON SEPTEMBER 25, 2024
| • | plan for continuity on the Board as existing Board members leave the Board; |
TO BE HELD ON SEPTEMBER 25, 2024
| • | with the participation of the Chairman of the Board, identify and recruit candidates for Board membership, evaluate Board candidates recommended by shareholders and arrange for appropriate interviews and inquiries into the qualifications of the candidates; |
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| • | identify and recommend individuals to be nominated for election as directors by the shareholders and to fill vacancies on the Board; |
TO BE HELD ON SEPTEMBER 25, 2024
| • | with the Compensation Committee, provide for a review of succession plans for the Chairman of the Board in the case of resignation, retirement or death; |
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| • | evaluate the performance of current Board members proposed for re-election, and recommend to the Board whether such members of the Board should stand for re-election; oversee an annual evaluation of the Board as a whole; conduct an annual evaluation of the Nominating and Governance Committee; oversee the evaluation of the other Board committees and provide guidance with respect to the evaluation of management; |
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| • | with the Chairman of the Board and the CEO, periodically review the charter and composition of each Board committee and make recommendations to the Board as to changes in charters and the creation of additional committees; |
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| • | with the Chairman of the Board and the CEO, recommend to the Board individuals to be chairs and members of Board committees, so that each Board committee is comprised of members with the appropriate experience, qualifications, skills and attributes for the tasks of the committee; and |
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| • | in coordination with other committees of the Board, oversee our corporate social responsibility programs and goals, and our progress toward achieving those goals. |
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To the extent not otherwise delegated to the Audit Committee, the Nominating and Governance Committee is also to:
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| • | review the relationships between us and each director, whether direct or as a partner, officer (or holder of a similar position) or equity owner of an organization that has a relationship with us, for conflicts of interest (all members of the Board are required to report any such relationships to our General Counsel); |
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| • | address actual and potential conflicts of interest a Board member may have and issue to the Board member having an actual or potential conflict of interest instructions on how to conduct himself/herself in matters before the Board which may pertain to such an actual or potential conflict of interest; and |
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| • | make appropriate recommendations to the Board concerning determinations necessary to find a director to be an independent director. |
TO BE HELD ON SEPTEMBER 25, 2024
The Nominating and Governance Committee periodically reviews and assesses the adequacy of its charter and recommends any proposed changes to the full Board, as necessary to reflect changes in regulatory requirements, authoritative guidance and evolving practices. The Nominating and Governance Committee evaluates its performance at least annually. The Nominating and Governance Committee met two times during fiscal 2024 following the Separation. Executive Committee The Executive Committee acts in place of, and on behalf of, the Board in the intervals between meetings of the Board. The Executive Committee has all of the authority of the Board, other than the authority (a) to fill vacancies on the Board or on any committee of the Board, (b) to amend our Amended Regulations, (c) that has been delegated by the Board exclusively to other committees of the Board, and (d) that NYSE Rules, applicable law or our governing documents do not permit to be delegated to a committee of the Board. Board’s Role in Risk Oversight Our management is principally responsible for defining, identifying and assessing the various risks we face, formulating enterprise risk management policies and procedures and managing our risk exposures on a day-to-day basis. A risk committee, comprised of senior executives, directs this process. Management provides an annual risk assessment to the Board, with quarterly updates. The Board’s responsibility is to oversee our risk management processes by understanding and evaluating management’s identification, assessment and management of our critical risks. The Board as a whole has responsibility for this risk oversight, assisted by the Audit Committee, the Compensation Committee and the Nominating and Governance Committee. Areas of focus include strategic, operational, liquidity, market, financial, reporting, succession, compensation, compliance, privacy, information security, cybersecurity, business conduct, health and safety, environmental, social, governance and other risks. The Audit Committee is tasked with oversight of financial, reporting and compliance risk management, along with our overall enterprise risk management program (including risks related to privacy, information security, cybersecurity, business conduct, health and safety, compliance, environmental and social matters). The Compensation Committee is tasked with oversight of compensation risk management. The Nominating and Governance Committee manages risks associated with corporate governance, Board composition, and the performance of the Board, its committees and directors. The Board as a whole oversees all other risk management. Transactions with Certain Related Persons Review, Approval or Ratification of Transactions with Related Persons As described in the Code of Conduct, conflicts of interest can arise when an employee’s or a director’s personal or family relationships, financial affairs, an outside business involvement or any other private interest may adversely influence the judgment or loyalty required for performance of his or her duties to us. In cases where there is an actual or even the appearance of a conflict of interest, the individual involved is required to notify his or her supervisor or our Ethics Officer. The supervisor will then consult with management or our Ethics Officer, as appropriate. The Code of Conduct provides that any action or transaction in which the personal interest of an executive officer or a director may be in conflict with our interest is to be reported to the Audit Committee. The Audit Committee must investigate and, if it is determined that such action or transaction would constitute a violation of the Code of Conduct, the Audit Committee is authorized to take any action it deems appropriate. Our written Related Person Transaction Policy (the “Policy”), which supplements the Code of Conduct provisions addressing conflicts of interest, addresses our policy with respect to related person transactions. The Policy was adopted by the Board and is administered by the Audit Committee and our General Counsel. The Policy applies to any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships, in which we participate, directly or indirectly, and a related person has, had or will have a direct or indirect material interest. Under the Policy, a “related person” is any person:
TO BE HELD ON SEPTEMBER 25, 2024
| • | who is or was our executive officer, director or director nominee, or an immediate family member of any such individual; or |
TO BE HELD ON SEPTEMBER 25, 2024
| • | who is or was the beneficial owner of more than 5% of our outstanding common shares, or an immediate family member of any such individual. |
TO BE HELD ON SEPTEMBER 25, 2024
All related person transactions are to be brought to the attention of management who will then refer each matter to our General Counsel and the Audit Committee. Each director, director nominee or executive officer must notify our General Counsel in writing of any interest that such individual or an immediate family member of such individual has, had or may have, in a related person transaction. In addition, any related person transaction proposed to be entered into by us must be reported to our General Counsel by the employee who has authority over the transaction. On an annual basis, our directors, director nominees and executive officers must complete a questionnaire designed to elicit information about existing and potential related person transactions. Any potential related person transaction that is raised will be analyzed by our General Counsel, in consultation with management and with outside counsel, as appropriate, to determine whether the transaction, arrangement or relationship does, in fact, qualify as a related person transaction requiring review by the Audit Committee under the Policy. Under the Policy, all related person transactions (other than those deemed to be pre-approved or ratified under the terms of the Policy) will be referred to the Audit Committee for approval (or disapproval), ratification, revision or termination. Whenever practicable, a related person transaction is to be reviewed and approved or disapproved by the Audit Committee prior to the effectiveness or consummation of the transaction. If our General Counsel determines that advance consideration of a related person transaction is not practicable, the Audit Committee will review and, in its discretion, may ratify the transaction at the Audit Committee’s next meeting. However, our General Counsel may present a related person transaction arising between meetings of the Audit Committee to the Chair of the Audit Committee who may review and approve (or disapprove) the transaction, subject to ratification by the Audit Committee at its next meeting if appropriate. If we become aware of a related person transaction not previously approved under the Policy, the Audit Committee will review the transaction, including the relevant facts and circumstances, at its next meeting and evaluate all options available to us, including ratification, revision, termination or rescission of the transaction, and take the course of action the Audit Committee deems appropriate under the circumstances. No director may participate in any approval or ratification of a related person transaction in which the director or an immediate family member of the director is involved. The Audit Committee may only approve or ratify those transactions the Audit Committee determines to be in our best interest. In making this determination, the Audit Committee will review and consider all relevant information available to it, including:
TO BE HELD ON SEPTEMBER 25, 2024
| • | the terms (including the amount involved) of the transaction and the related person’s interest in the transaction and the amount of that interest; |
TO BE HELD ON SEPTEMBER 25, 2024
| • | the business reasons for the transaction and its potential benefits to us, and whether the transaction was undertaken in the ordinary course of our business; |
TO BE HELD ON SEPTEMBER 25, 2024
| • | whether the terms of the transaction are fair to us and no less favorable to us than terms that could be reached with an unrelated third party; |
TO BE HELD ON SEPTEMBER 25, 2024
| • | the impact of the transaction on the related person’s independence; and |
TO BE HELD ON SEPTEMBER 25, 2024
| • | whether the transaction would present an improper conflict of interest for any of our directors, director nominees or executive officers, taking into account the size of the transaction, the overall financial position of the related person, the direct or indirect nature of the related person’s interest in the transaction and the ongoing nature of any proposed relationship and any other factors the Audit Committee deems relevant. |
TO BE HELD ON SEPTEMBER 25, 2024
Any related person transaction previously approved or ratified by the Audit Committee or otherwise already existing that is ongoing in nature is to be reviewed by the Audit Committee annually. Under the terms of the Policy, the following related person transactions are deemed to be pre-approved or ratified (as appropriate) by the Audit Committee even if the aggregate amount involved would exceed $120,000:
TO BE HELD ON SEPTEMBER 25, 2024
| • | interests arising solely from ownership of the common shares if all shareholders receive the same benefit on a pro rata basis (i.e., dividends); |
TO BE HELD ON SEPTEMBER 25, 2024
| • | compensation to an executive officer, as long as the executive officer is not an immediate family member of any of our executive officers or directors and the compensation has been approved by the Compensation Committee or is generally available to our employees; |
TO BE HELD ON SEPTEMBER 25, 2024
| • | compensation to a director for services as a director if the compensation is required to be reported in our proxy statements; |
TO BE HELD ON SEPTEMBER 25, 2024
| • | interests deriving solely from a related person’s position as a director of another entity that is a party to the transaction; |
TO BE HELD ON SEPTEMBER 25, 2024
| • | interests deriving solely from the related person’s direct or indirect ownership of less than 10% of the equity interest (other than a general partnership interest) in another person which is a party to the transaction; and |
TO BE HELD ON SEPTEMBER 25, 2024
| • | transactions involving competitive bids. |
TO BE HELD ON SEPTEMBER 25, 2024
In addition, the Audit Committee will presume that the following transactions do not involve a material interest:
TO BE HELD ON SEPTEMBER 25, 2024
| • | transactions in the ordinary course of business with an entity for which a related person serves as an executive officer, provided (i) the affected related person did not participate in our decision to enter into the transaction, and (ii) the aggregate amount involved in any related category of transactions in a 12-month period is not greater than the least of (a) $1,000,000, or (b) 2% of the other entity’s consolidated gross revenues for such other entity’s most recently completed fiscal year, or (c) 2% of our consolidated gross revenues for our most recently completed fiscal year; |
TO BE HELD ON SEPTEMBER 25, 2024
| • | donations, grants or membership payments to non-profit organizations, provided (a) the affected related person did not participate in our decision to make such payments, and (b) the aggregate amount in a 12-month period does not exceed the lesser of $500,000 or 1% of the non-profit organization’s consolidated gross revenues for its most recently completed fiscal year; and |
TO BE HELD ON SEPTEMBER 25, 2024
| • | our use of facilities (such as dining facilities and clubs) if the charges for such use are consistent with charges paid by unrelated third parties and are fair, reasonable and consistent with those for similar services available at similar facilities. |
TO BE HELD ON SEPTEMBER 25, 2024
Transactions with Related Persons We are a party to certain agreements relating to the rental of aircraft to and from JMAC, which is owned by John P. McConnell and members of his family, and JMAC’s subsidiary, JMAC Air, LLC (“JMAC Air”). John P. McConnell is our largest shareholder and the father of our director John H. McConnell II. Under agreements with JMAC and JMAC Air, we may lease aircraft owned by JMAC Air as needed for a rental fee per flight. Based on quotes from unrelated third parties for similar services, we believe that the rental rates paid to JMAC are no less favorable to us than those that could be obtained from unrelated third parties. Since the Separation, we paid an aggregate amount of $6,118 under the JMAC Air lease agreement. During fiscal 2024, we, directly or indirectly through business expense reimbursement, paid approximately $57,910 to Double Eagle Club, a private golf club owned by the McConnell family (the “Club”). We use the Club’s facilities for corporate functions and meetings, and for meetings and entertainment for our customers, suppliers and other business associates. Amounts charged to us by the Club are no less favorable to us than those that are charged to unrelated members of the Club for the same type of use. During fiscal 2024, we, directly or indirectly through business expense reimbursement, paid approximately $50,000 to the Columbus Blue Jackets, a National Hockey League team of which John P. McConnell is the majority owner, for sponsorship and advertising, at prices no less favorable to us than those charged to unrelated third parties. As previously reported in connection with the consummation of the Separation, we entered into several agreements with WOR on November 30, 2023 that, among other things, provide a framework for our relationship with WOR after the Separation, including a Separation and Distribution Agreement (the “SDA”), a Transition Services Agreement (the “TSA”), a Tax Matters Agreement (the “TMA”), an Employee Matters Agreement (the “EMA”), a Trademark License Agreement (the “TLA”), a WBS License Agreement (the “WBLA”) and a Steel Supply Agreement (the “Supply Agreement”). Given that John P. McConnell is also the largest shareholder of WOR, John H. McConnell II is also a director of WOR, and John B. Blystone is the Chairman of the Board of WOR, we have opted to treat WOR as a related party and have evaluated our transactions with WOR accordingly. The SDA sets forth our agreements with WOR regarding the principal actions taken in connection with the Separation, and primarily identifies assets transferred, liabilities assumed and contracts allocated to each of WOR and us as part of the Separation. As is customary in such agreements, pursuant to the SDA, we agreed to reimburse WOR to the extent that WOR incurred an expense for our benefit, and WOR agreed to reimburse us to the extent that we incurred an expense for the benefit of WOR. Such reimbursements were generally related to the parties’ consummation of the Separation and the associated transition of employees, utilities and other assets from one party to the other. All such reimbursements occurred at the actual amount of the expense incurred without any additional amount added. During fiscal 2024, we paid WOR approximately $36,767,142 as reimbursement for expenses incurred by WOR for our benefit, and WOR paid us approximately $5,499,121 as reimbursement for expenses incurred by us for the benefit of WOR, which in both cases primarily related to wages and benefits associated with the transition of employees. Pursuant to the TSA, WOR and its subsidiaries and we and our subsidiaries will provide each other various services on a transitional basis. The transition services include various services and functions, many of which use a shared technology platform, including human resources, payroll and certain information technology services. The charges for the transition services are generally expected to allow the providing company to fully recover all internal and external costs and expenses it actually incurs in connection with providing the service (including a reasonable allocation of overhead) and are based on pass-through billing, percent of use billing or fixed fee monthly billing. For Fiscal 2024, we paid an aggregate amount of $289,953 to WOR for services provided under the TSA and received $149,578 from WOR for services we provided. Pursuant to the Supply Agreement, we manufacture and supply WOR with certain flat rolled steel products ordered by WOR from time to time, and provide WOR with certain related support services such as design, engineering/technical services, price risk management, scrap management, steel purchasing, supply chain optimization and product rework services, and other services that WOR requests that are ancillary to the supply of products. We sold the products and services at prices calculated based on an arm’s length pricing mechanism specified in the Supply Agreement. For Fiscal 2024, we sold an aggregate amount of $65,920,000 to WOR for the products and services provided under the Supply Agreement. We also received from WOR $969,945 for supplemental technical, laboratory, and machine shop services in Fiscal 2024. For fiscal 2024, no financial transactions with WOR took place with respect to the TMA, the TLA, or the WBLA. As a part of the Separation, we also entered into a series of real estate agreements with WOR, pursuant to which we lease office space from WOR, we lease warehouse space to WOR, and share the maintenance, security and other related costs of access roads and other shared spaces on our manufacturing campus in Columbus, Ohio. All renumeration set forth in such agreements is intended to be fair market value and was negotiated in arm’s length transactions. For Fiscal 2024, we received an aggregate amount of $151,560 from WOR pursuant to such agreements and paid $2,254,447 to WOR under the same. We are also a party to certain agreements relating to the rental of aircraft from WOR, pursuant to which we may lease aircraft operated by WOR, on a per-flight basis. The rental fees paid to WOR under the per-flight rental agreements are set based on FAA regulations, and amounted to $263,581 in Fiscal 2024. Proposal 1: Election of Directors We currently have 10 directors – three in the class whose terms expire at the Annual Meeting, all of which are nominated to be elected for terms expiring at the annual meeting of shareholders in 2027; three in the class whose terms expire at the annual meeting of shareholders in 2025 (the “2025 Annual Meeting”); and four in the class whose terms expire at the annual meeting of shareholders in 2026. The Board proposes that the three director nominees named in the following summary, each of whom was unanimously recommended by the Nominating and Governance Committee, be elected as directors at the Annual Meeting. Each individual elected as a director at the Annual Meeting will hold office for a three-year term, expiring at the annual meeting of shareholders in 2027, and until his or her successor is duly elected and qualified, or until his or her earlier death, resignation or removal from office. The individuals named as proxy holders in the form of proxy solicited by the Board intend to vote the common shares represented by the proxies received under this solicitation for the Board’s nominees, unless otherwise instructed on the form of proxy. If any nominee becomes unable to serve or for good cause will not serve as a candidate for election as a director, the individuals designated to vote the proxies will have full discretion to vote the common shares represented by the proxies they hold for the election of the remaining nominees and for the election of any substitute nominee designated by the Board. The Board has no reason to believe that any of the Board’s nominees will be unable to serve or for good cause will not serve as a director if elected.
TO BE HELD ON SEPTEMBER 25, 2024
Information Concerning Nominees and Continuing Directors The information set forth in the following summary, concerning the age, principal occupation, other affiliations and business experience of each director has been furnished to us by such director as of August 1, 2024. Except where otherwise indicated, each director has had the same principal occupation for the last five years. There are no family relationships among any of our current directors, director nominees and executive officers. Nominees Standing for Election to the Board at the 2024 Annual Meeting
TO BE HELD ON SEPTEMBER 25, 2024
| Geoff G. Gilmore | Age 52 | Director since 2023 | | Mr. Gilmore is our President and CEO and has served as a director since 2023 and is a member of the Executive Committee. Previously, Mr. Gilmore served as Executive Vice President and Chief Operating Officer of Worthington Enterprises, Inc. from August 2018 to November 2024. Prior to that, Mr. Gilmore served as President of Worthington Cylinder Corporation from June 2016 to August 2018, and as President of The Worthington Steel Company from August 2012 through May 2016. From July 2011 to July 2012, Mr. Gilmore served as Vice President-Purchasing for Worthington Enterprises, Inc. From April 2010 to July 2011, Mr. Gilmore served as General Manager of The Worthington Steel Company’s Delta, Ohio facility, and from June 2006 to February 2010, he served as Director of Automotive Sales for The Worthington Steel Company. Mr. Gilmore also served in various other positions with The Worthington Steel Company from 1998 to June 2006. This experience, along with his business acumen, leadership style and abilities, make him well qualified to serve on the Board. | | |
TO BE HELD ON SEPTEMBER 25, 2024
| Carl A. Nelson, Jr. | Age 79 | Director since 2023 | | Mr. Nelson has served as a director of the Company since 2023 and is the Chair of the Audit Committee and a member of the Executive Committee. Mr. Nelson was a partner with Arthur Andersen, LLP and retired in February 2002 after 31 years of service. Mr. Nelson served as Managing Partner of the Arthur Andersen Columbus, Ohio office, and was the leader of the firm’s consulting services for the consumer products industry in the United States. Mr. Nelson served on the Board of Directors of Advanced Drainage Systems, Inc., a leading manufacturer of thermoplastic corrugated pipe until July 2024. He was the Chair of its Compensation Committee. Mr. Nelson served on the Board of Worthington Enterprises, Inc. from 2004 until 2023, where he was chair of the Audit Committee and a member of the Executive Committee. Mr. Nelson is a Certified Public Accountant (retired) and a member of The Ohio Society of Certified Public Accountants and the American Institute of Certified Public Accountants. Mr. Nelson received his Bachelor of Science in Accounting from The Ohio State University and a Master of Business Administration from the University of Wisconsin. Mr. Nelson has taught in the MBA and executive education programs at The Ohio State University and is a member of the Dean’s Advisory Council for the Fisher College of Business at The Ohio State University. Mr. Nelson has significant public company accounting and financial expertise and qualifies as an “audit committee financial expert,” as defined by applicable SEC Rules. Mr. Nelson has vast experience as a business consultant on a variety of projects involving areas such as large-scale technology implementation, defining strategic initiatives, strategic planning and projects with significant change requirements. All of the attributes described above make Mr. Nelson well suited to serve on the Board. | | |
TO BE HELD ON SEPTEMBER 25, 2024
| George P. Stoe | Age 78 | Director since 2023 | | Mr. Stoe has served as a director of the Company since 2023 and is our Lead Independent Director and a member of the Compensation Committee. Previously, Mr. Stoe was President and Chief Operating Officer of Worthington Enterprises, Inc., from 2008 to 2012. Prior to that, Mr. Stoe served as Executive Vice President and Chief Operating Officer of Worthington Enterprises, Inc. from 2005 to 2008, and President of Worthington Cylinder Corporation from 2003 to 2005. He started his career in the aluminum industry and served in a variety of sales, manufacturing and executive roles with Howmet Aluminum, Alumax, Inc., Wise Alloys, and Zinc Corporation. Mr. Stoe’s experience in managing and operating businesses, particularly in the manufacturing and metals industries, make him well qualified to serve on the Board. | | |
TO BE HELD ON SEPTEMBER 25, 2024
Directors Whose Terms Continue Until the 2025 Annual Meeting of Shareholders
TO BE HELD ON SEPTEMBER 25, 2024
| Jon J. Bowsher | Age 57 | Director since 2023 | | Mr. Bowsher has served as a director of the Company since 2023 and is a member of the Compensation Committee and the Nominating and Governance Committee. He is the CEO of the North American division of Ortal Fireplaces, a premier manufacturer of direct vent gas fireplaces, a role that he has held since 2021. Previously he served as President of TIBA Parking Systems, a leading manufacturer of parking access and revenue control systems, from 2016 to 2021, and Owner/President of Signature Control Systems, also a provider of advanced parking access and revenue control systems, from 2010 to 2016. Prior to that, he served in various roles with Worthington Enterprises, Inc.’s steel processing business from 1992 to 2010, with the most recent being general manager of its steel processing facility in Monroe, Ohio. Mr. Bowsher’s extensive experience in managing and operating businesses, as well as his familiarity with our operations and the steel processing industry, make him well qualified to serve on our Board. | | |
TO BE HELD ON SEPTEMBER 25, 2024
| Charles M. Chiappone | Age 61 | Director since 2023 | | Mr. Chiappone has served as a director of the Company since 2023 and is the chair of the Compensation Committee. He previously served as Senior Vice President, Ceiling and Wall Solutions of Armstrong World Industries, Inc., a designer and manufacturer of ceiling and wall system solutions, a position he held from 2018 to 2022. Prior to that Mr. Chiappone serves as Armstrong’s Senior Vice President, Ceiling Solutions from 2016 to 2018, and as Chief Executive Officer of the Worthington Armstrong Venture (WAVE), Armstrong’s ceiling suspension systems joint venture with Worthington Enterprises, Inc., from 2012 to 2016. Prior to that, he served as President and Chief Executive Officer of Alloy Partners, a global plastics manufacturer, from 2008 to 2012. He also previously held several senior management positions in marketing, research and development, operations and general management with SPX Cooling Technologies, a division of SPX Corporation. He began his career at General Electric where he worked in a variety of commercial positions, after serving four years in the United States Marine Corps. This experience, along with his business acumen, leadership style and abilities, and track record of implementing strategic growth and continuous improvement initiatives, make him well qualified to serve on the Board. | | |
TO BE HELD ON SEPTEMBER 25, 2024
| Mary Schiavo | Age 68 | Director since 2023 | | Ms. Schiavo has served as a director of the Company since 2023 and is a member of the chair of the Nominating and Governance Committee and is a member of the Audit Committee. Ms. Schiavo has been an attorney with the law firm of Motley Rice LLC, since October 2003. Ms. Schiavo has been employed by CNN as an analyst and on-air commentator since calendar year 2014. Ms. Schiavo was an attorney with a law firm in Los Angeles, California, from 2001 to October 2003. Ms. Schiavo served as a professor at The Ohio State University, College of Engineering, Department of Aerospace Engineering and Aviation and School of Public Policy and Management and also as a Consultant for NBC News from 1997 to 2002. Ms. Schiavo served as Inspector General for the U.S. Department of Transportation for six years, where she had auditing and oversight responsibility over a multi-billion dollar government agency; Assistant Secretary of Labor of the U.S. for one year; a White House Fellow for one year; and was an attorney with the U.S. Department of Justice for seven years. Ms. Schiavo has gained in-depth knowledge of the Company’s business and structure from her service as a director of Worthington Enterprises, Inc. from 1998 to November 2023, where she was a member of the Audit Committee and the Nominating and Governance Committee. Ms. Schiavo received a Bachelor of Arts from Harvard University, a Master of Arts degree from The Ohio State University, and a Juris Doctorate degree from New York University. She was previously an elected director of the Harvard University Alumni Association and a member of the President’s Council on Integrity and Efficiency in Government and the President’s Commission on White House Fellowships. Ms. Schiavo’s legal and governmental experience, as well as her prior experience on the Worthington Enterprises, Inc. board of directors, enable her to bring a unique and valuable perspective to the Board and make her well qualified to serve on the Board. | | |
TO BE HELD ON SEPTEMBER 25, 2024
Directors Whose Terms Continue Until the 2026 Annual Meeting of Shareholders
TO BE HELD ON SEPTEMBER 25, 2024
| John B. Blystone | Age 71 | Director since 2023 | | Mr. Blystone has served as our Executive Chairman and a director of the Company since 2023 and is chair of the Executive Committee. He has also served as a director of Worthington Enterprises, Inc. since 1997 and as its Chairman of the Board since September 2023. Mr. Blystone served as Chairman of the Board, President and Chief Executive Officer of SPX Corporation, a global provider of technical products and systems, industrial products and services, flow technology, cooling technologies and services and service solutions, from December 1995 to December 2004, when he retired. From 1991 to 1995, Mr. Blystone served in various managerial and operating roles with General Electric Company. Mr. Blystone served as Chairman of the Board of Freedom Group, Inc., which manufactures and markets firearms, ammunition, and related products, from August 2010 to March 2012. Mr. Blystone serves as a director for Blystone Consulting, LLC and as General Partner of Blystone Capital Partners. Mr. Blystone graduated from the University of Pittsburgh with a Bachelor of Arts in Mathematics and Economics. Mr. Blystone has extensive business experience in managing and operating both domestic and international operations, including as a chief executive officer of a large public company. He has expertise in acquisitions, financial and business analysis, and in generally managing issues that face a large public company. Mr. Blystone’s business acumen, collegial style and leadership make him well qualified to serve on the Board. | | |
TO BE HELD ON SEPTEMBER 25, 2024
| John H. McConnell II | Age 39 | Director since 2023 | | Mr. McConnell has served as a director of the Company since 2023 and is a member of the Executive Committee. Mr. McConnell is currently the Chairman of JMAC, Inc., his family’s private holding company. Prior to that, Mr. McConnell was Vice President, Global Business Development, of Worthington Enterprises, Inc.’s Sustainable Energy Solutions business, from June 2021 to November 2023. He served as Business Director of Worthington Enterprise’s North American High Pressure Vessels business from November 2019 to June 2021 and Product Manager of its Life Support Technology products from June 2014 to November 2019. Mr. McConnell also held various roles with Worthington Enterprises, Inc. from 2000 to 2012, and with the Columbus Blue Jackets from 2012 to 2014. Mr. McConnell holds a Bachelor of Arts in Strategic Communications and a Master of Business Administration from The Ohio State University. Mr. McConnell serves on the boards of the National Veterans Memorial and Museum, Mr. McConnell serves on the boards of the National Veterans Memorial and Museum, the Columbus Zoo and Aquarium and the Cohesion Foundation. Mr. McConnell’s long association with the Company, the governance skills he has developed serving on various other boards, and the variety of roles in which he has served the Company and Worthington Enterprises, Inc. make him well qualified to serve on the Board. In addition, McConnell family members have a strong interest in the continuing success of the Company and have always played an important role in the business. Mr. McConnell’s participation on the Board ensures that commitment to successful stewardship continues. | | |
TO BE HELD ON SEPTEMBER 25, 2024
| Nancy G. Mistretta | Age 69 | Director since 2023 | | Ms. Mistretta has served as a director of the Company since 2023 is a member of the Audit Committee. Ms. Mistretta was a partner of Russell Reynolds Associates, an executive search firm, from February 2005 until June 2009. Prior to joining Russell Reynolds, Ms. Mistretta was with JPMorgan Chase & Co., and its heritage institutions for 29 years, where she served as a Managing Director in Investment Banking from 1991 to 2005. Ms. Mistretta was a member of the board of directors of The Scotts Miracle-Gro Company, from 2007 until January 2024, where she served on its Compensation and Organizations Committee and chaired its Audit Committee. She previously served on the board of directors of HSBC USA Inc. and HSBC Bank USA, N.A., where she was a member of its Audit Committee and Risk Committee and chaired its Nominating & Governance Committee. In addition, Ms. Mistretta was previously a member of the board of directors of GAM Holding AG in Zurich, Switzerland, where she chaired its Compensation Committee and served on its Governance and Nominating Committee. Ms. Mistretta’s wide-ranging experience, service on other public company boards and qualification as an “audit committee financial expert” under applicable SEC Rules, make her well qualified to serve on the Board. | | |
TO BE HELD ON SEPTEMBER 25, 2024
| Sidney A. Ribeau | Age 77 | Director since 2023 | | Dr. Ribeau has served as a director of the Company since 2023 and is a member of the Nominating and Governance Committee. Since October 2013, Dr. Ribeau has served as Professor of Communications at Howard University, and he also served as President of Howard University from August 2008 to October 2013. Dr. Ribeau served as President of Bowling Green State University for more than 13 years prior to that time. Dr. Ribeau served as a director of Worthington Enterprises, Inc., from 2000 to November 2024. Dr. Ribeau served as a Trustee on the Teachers Insurance and Annuity Association for 16 years. He was a member of TIAA’s Human Resources Committee, Nominating and Governance Committee and Corporate Governance and Social Responsibility Committee. Dr. Ribeau has previously served on the boards of directors of Convergys Corporation from 2001 through 2008 and The Andersons, Inc. from 1997 through 2008. Dr. Ribeau holds a Bachelor of Arts from Wayne State University and a Master and Doctorate from the University of Illinois. Dr. Ribeau brings extensive experience in managing the issues that face large institutions. His background as the leader of a billion-dollar institution and as an educator and administrator enables him to provide insight relative to management, educational, financial, human resources and public policy matters and make him well qualified to serve on the Board. | | |
TO BE HELD ON SEPTEMBER 25, 2024
Under Ohio law and our Amended Regulations, the three nominees for election to the Board receiving the greatest number of votes “FOR” their election will be elected as directors of the Company. Except in the case of broker non-votes, abstentions and votes “against” the election of one or more of the Board’s nominees, common shares represented by properly completed and timely received forms of proxy will be voted “FOR” the election of the Board’s nominees. Abstentions will not be counted toward the election of directors or the election of the individual nominees specified on the form of proxy. Proxies may not be voted for more than three nominees.
Pre-Separation Compensation and Compensation at Separation Established by WOR
Bonus Annual cash bonus opportunities under the Worthington Enterprises, Inc. Annual Incentive Plan for Executives were provided by WOR to reinforce a pay-for-performance culture as a bonus payment may be earned only upon the achievement of specified financial objectives. Prior to the Separation, the WOR CC or WOR’s management, as applicable, set percentages of each NEO’s base salary at which threshold, target and maximum bonus payments may be earned. Such percentages were set at levels designed to be appropriate and commensurate with the individual’s position with WOR. Potential bonus payouts were tied to achieving specified levels (i.e., threshold, target and maximum) of performance measures for fiscal 2024. For Mr. Gilmore, Mr. Heuer and Ms. Tillman, the performance measures were EVA and Adjusted EPS, with each carrying a 50% weighting. For Mr. Klingler and Mr. Adams, each of whom was considered a steel processing segment executive at WOR during the pre-Separation portion of fiscal 2024, the performance measures and their weightings were Adjusted EPS (20%), segment EBIT (50%) and segment EVA (30%). For all calculations, restructuring charges and non-recurring items were excluded and Adjusted EPS results accounted for adjustments to eliminate the impact of inventory holding gains and losses. If the performance level falls between threshold and maximum, the bonus will be linearly prorated. If threshold levels are not reached for any performance measure, no bonus will be paid for that measure. The fiscal 2024 pre-Separation bonus percentages for the NEOs are reflected in the following table. Mr. Blystone was a WOR director but not an employee prior to the Separation, so he was not eligible for a bonus prior to the Separation.
Pre-Separation Compensation and Compensation at Separation Established by WOR
| Named Executive Officer | Pre-Separation Fiscal 2024 Bonus Opportunities (percentage of base salary) | | | | | Threshold (%) | Target (%) | Maximum (%) | | Mr. Gilmore | 61.5 | 123 | 246 | | Mr. Adams | 25 | 50 | 100 | | Mr. Blystone | – | – | – | | Mr. Klingler | 50 | 100 | 200 | | Mr. Heuer | 15 | 30 | 60 | | Ms. Tillman | 32.5 | 65 | 130 |
Pre-Separation Compensation and Compensation at Separation Established by WOR
| • | Stock options; |
Pre-Separation Compensation and Compensation at Separation Established by WOR
| • | “Performance shares” that may be earned by achieving measurable financial results over a three-year period and, if earned, settle in common shares; |
Pre-Separation Compensation and Compensation at Separation Established by WOR
| • | Restricted stock. |
Pre-Separation Compensation and Compensation at Separation Established by WOR
Mr. Blystone was a WOR director but not an employee prior to the Separation, so he did not receive stock options, performance shares or performance awards prior to the Separation. He did receive restricted stock prior to the Separation; however, that award was made in connection with his service as a WOR director and not as an employee supporting our business. Stock Options Stock options are generally granted annually to the NEOs and a select group of key members of management. In practice, the number of common shares covered by a stock option generally depends upon the employee’s position and external market data. The stock options granted to the NEOs by WOR for fiscal 2024 become exercisable over three years in increments of one-third per year on each anniversary of their grant date. Termination of employment results in the forfeiture of unvested stock options, except that the WOR CC reserved discretion to cause all or a portion of the unvested stock options to vest upon retirement, death or disability. Upon termination of employment due to retirement, death or disability, the vested portion of any outstanding stock options will remain exercisable until the earlier of the stock option’s stated expiration date or 36 months after the termination of employment. In the event of a change in control followed by termination of employment without cause or constructive termination of employment, any outstanding stock options will become fully vested and exercisable. Additionally, the then vested portion of any outstanding stock options will remain exercisable until the earlier of the stock option’s stated expiration date or 12 months after the termination of employment. The WOR CC reserved discretion to allow the holder of a stock option to elect, during the 60-day period following a change in control, to surrender a stock option or a portion thereof in exchange for a cash payment equal to the excess of the change in control price per share over the exercise price per share. Performance Shares and Performance Awards The WOR CC awarded a select group of key executives, including the NEOs, performance shares and performance awards which are earned based upon results over a prospective three-fiscal-year performance period. These long-term performance awards are intended to reward executives for achieving pre-established financial goals over an extended period. Restructuring charges and other selected items are excluded from all calculations, and the impact of inventory holding gains or losses are factored out in calculating Adjusted EPS. Payouts of the performance shares and performance awards granted in fiscal 2024 are tied to achieving specified levels (i.e., threshold, target and maximum) of performance measures for the three-fiscal-year performance period concluding at the end of fiscal 2026. The performance measures are cumulative EVA for the performance period and Adjusted EPS growth over the performance period, with each performance measure carrying a 50% weighting. In all calculations, restructuring charges and non-recurring items are to be excluded, and corporate EVA and Adjusted EPS results will be adjusted to eliminate the impact of inventory holding gains or losses. No awards are to be paid or distributed if none of the three-fiscal-year threshold financial measures are met. If the performance level falls between threshold and target or between target and maximum, the award is linearly prorated. Payouts, if any, would generally be made in the quarter following the end of the applicable performance period. The WOR CC determines the appropriate changes and adjustments and may make adjustments for unusual events or other items deemed to not be indicative of core operating results, including, without limitation, changes in tax and accounting rules and regulations, extraordinary gains and losses, mergers and acquisitions, and purchases or sales of substantial assets. These performance measurements have been chosen because the WOR CC believed that:
Pre-Separation Compensation and Compensation at Separation Established by WOR
| • | The Adjusted EPS growth metric strongly correlates with growth in equity value; and |
Pre-Separation Compensation and Compensation at Separation Established by WOR
| • | The EVA target, which is driven by net operating profit in excess of the cost of capital employed, keeps management focused on the most effective use of existing assets and pursuing only those growth opportunities which provide returns in excess of the cost of capital. |
Pre-Separation Compensation and Compensation at Separation Established by WOR
Restricted Stock Time-vested restricted stock is intended to reward and incent executives by directly aligning the interests of management with the interests of shareholders. The three-year cliff vesting provision of the restricted stock awarded to the NEOs by WOR for fiscal 2024 also serves as a retention tool. Summary of Fiscal 2024 WOR Pre-Separation Long-Term Incentive Compensation The following table sets forth the long-term incentive compensation (consisting of performance shares, performance awards, stock options (at a pre-Separation exercise price of $69.47), and restricted stock) awarded to the NEOs by the WOR CC for fiscal 2024:
Pre-Separation Compensation and Compensation at Separation Established by WOR
| Named Executive Officer | Performance Shares for the Period Ending May 31, 2026 (# common shares) | | | Performance Awards for the Period Ending May 31, 2026 ($ value) | | | Stock Options (# common shares) | Restricted Stock (# common shares) | | | Threshold | Target | Maximum | Threshold | Target | Maximum | | | | Mr. Gilmore | 2,100 | 4,200 | 8,400 | 280,000 | 560,000 | 1,120,000 | 5,500 | 6,300 | | Mr. Adams | 300 | 600 | 1,200 | 37,500 | 75,000 | 150,000 | 700 | 800 | | Mr. Blystone | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | | Mr. Klingler | 1,100 | 2,200 | 4,400 | 150,000 | 300,000 | 600,000 | 3,000 | 3,400 | | Mr. Heuer | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | | Ms. Tillman | 300 | 600 | 1,200 | 37,500 | 75,000 | 150,000 | 700 | 800 |
Treatment of Incentive Compensation Awards in Connection with the Separation
Treatment of Incentive Compensation Awards in Connection with the Separation On December 1, 2023, the first day of the third quarter of fiscal 2024, the Separation was completed and we became a publicly traded company independent of WOR. In connection with the Separation, we entered into the EMA with WOR to allocate assets, liabilities and responsibilities with respect to certain compensation and employment-related matters, including incentive compensation awards (i.e., bonus, stock options, performance shares, performance awards and restricted stock). This section summarizes the treatment under the EMA of the incentive compensation awards granted by WOR before, and remaining outstanding at, the Separation, including those incentive compensation awards held by the NEOs and the restricted stock held by our directors who were WOR non-employee directors before the Separation. Except as otherwise noted in this section, those outstanding incentive compensation awards were maintained under terms substantially similar to the terms in effect when initially granted by WOR. References in this section to: (a) the WOR common shares being “converted” into our common shares mean the exchange that occurred at the time of the Separation; and (b) an incentive compensation award being “equitably adjusted” refer to the formulaic adjustments agreed upon by WOR and us pursuant to the EMA to preserve the overall intrinsic value of the incentive compensation award by taking into account the relative value of the WOR common shares before the Separation and our common shares after the Separation, which equitable adjustments were effectuated at the time of the Separation. Bonus. We assumed responsibility for the bonus awards, including for the pre-Separation and post-Separation periods of fiscal 2024, and the Compensation Committee was permitted to adjust the performance criteria after the Separation to preserve the overall intrinsic value of the awards. Stock Options. The WOR common shares underlying the stock options were converted into our common shares, and then the number of our underlying common shares and the exercise price were equitably adjusted. Performance Shares. For the performance shares scheduled to vest at the end of fiscal 2024 and fiscal 2025, the underlying number of WOR common shares earned was determined based on performance up to the Separation date and adjusted to account for the early termination of the performance period, and then those WOR common shares were converted into our common shares; provided, however, that vesting of our common shares deemed earned remained contingent upon the NEO’s continued employment with us through the period specified in the initial award. For the performance shares scheduled to vest at the end of fiscal 2026, the underlying number of WOR common shares were equitably adjusted and those WOR common shares were converted into our common shares, and the Compensation Committee was permitted to adjust the performance goals and calculation methodology after the Separation to preserve the overall intrinsic value of the award; provided, however, that vesting will be determined based on continuing performance through the original performance period. The performance periods for the performance shares scheduled to vest at the end of fiscal 2024 and fiscal 2025 were terminated early because a meaningful portion of the performance period had been completed at the time of the Separation and in recognition of the complications associated with adjusting those performance shares for the balance of the performance period. WOR and we agreed under the EMA to maintain the original performance period for the performance shares scheduled to vest at the end of fiscal 2026, because more than 80% of that period remained at the time of the Separation. Performance Awards. For the performance awards scheduled to vest at the end of fiscal 2024 and fiscal 2025, the amount of cash earned was determined based on performance up to the Separation date and adjusted to account for the early termination of the performance period; provided, however, that vesting of the cash deemed earned remained contingent upon the NEO’s continued employment with us through the period specified in the initial award. For the performance awards scheduled to vest at the end of fiscal 2026, the amount of cash that may be earned under the award was not modified and the Compensation Committee was permitted to adjust the performance goals and calculation methodology after the Separation to preserve the overall intrinsic value of the award; provided, however, that vesting will be determined based on continuing performance through the original performance period. The performance periods for the performance awards scheduled to vest at the end of fiscal 2024 and fiscal 2025 were terminated early because a meaningful portion of the performance period had been completed at the time of the Separation and in recognition of the complications associated with adjusting those performance awards for the balance of the performance period. WOR and we agreed under the EMA to maintain the original performance period for the performance awards scheduled to vest at the end of 2026, because more than 80% of that period remained at the time of the Separation. Time-Vested Restricted Common Share Awards. For the NEOs and the WOR non-employee directors who joined our Board upon the Separation, the WOR common shares were converted into our common shares and then the number of our common shares was equitably adjusted.
Stock Option Grant Timing Policy
Stock Option Grant Timing Policy The Compensation Committee takes into account the timing of our disclosure of material nonpublic information when awarding stock options. Specifically, the Compensation Committee awards stock options no earlier than at the close of trading on the first business day following our public release of quarterly earnings results, which the Compensation Committee believes is a sufficient amount of time for the public markets to absorb our quarterly earnings results. Accordingly, we do not time the disclosure of material nonpublic information for the purpose of affecting the value of executive compensation. Consistent with this practice, during fiscal 2024 and the first quarter of fiscal 2025, the Compensation Committee awarded stock options to the NEOs in the period beginning four business days before our filing of a periodic report on Form 10-K or Form 10-Q or the filing or furnishing of a current report on Form 8-K that disclosed material nonpublic information (other than a current report on Form 8-K disclosing a material new stock option award under Item 5.02(e) of such Form 8-K), and ending one business day after the filing or furnishing of such report (the “Designated Periods”). Pursuant to SEC Rules, we are providing the following information relating to stock options awarded to NEOs in the Designated Periods occurring during fiscal 2024:
Stock Option Grant Timing Policy
| Named Executive Officer | Grant Date | Number of Securities Underlying the Award (#) | Exercise Price of the Award ($/Share) | Grant Date Fair Value of the Award ($) | Percentage Change in the Closing Market Price of the Securities Underlying the Award Between the Trading Day Ending Immediately Prior to the Disclosure of Material Nonpublic Information and the Trading Day Beginning Immediately Following the Disclosure of Material Nonpublic Information (%) | | Mr. Gilmore | 12/22/2023 | 13,700 | 30.56 | 165,222 | 2 | | Mr. Adams | 12/22/2023 | 1,500 | 30.56 | 18,090 | 2 | | Mr. Klinger | 12/22/2023 | 1,900 | 30.56 | 22,914 | 2 | | Ms. Tillman | 12/22/2023 | 1,900 | 30.56 | 22,914 | 2 |
Executive Compensation Philosophy and Objectives
| • | It will be competitive in the aggregate, using broad-based business comparators to gauge the competitive market; |
Executive Compensation Philosophy and Objectives
| • | It will promote long-term careers with us. |
Compensation Risk Analysis
| • | The performance goals established for the bonus program are based upon realistic levels, reviewed and approved by the Compensation Committee, that the Compensation Committee believes can be attained without taking inappropriate risks or materially deviating from normal operations, expected continuous improvement or approved strategy. |
Compensation Risk Analysis
| • | The performance goals for the performance awards and performance shares are based upon results over three-fiscal-year periods which mitigates the risk that executives would take actions designed to benefit only the short-term and jeopardizing longer-term performance. |
Compensation Risk Analysis
| • | In setting targets for bonuses and long-term incentive compensation, restructuring charges and other selected items are eliminated and results are adjusted to eliminate inventory holding gains or losses, which limit rewards for risky behavior outside the ordinary course of business. |
Compensation Risk Analysis
| • | Stock options generally contain a three-year incremental vesting schedule and provide rewards based on the long-term performance of the common shares. |
Compensation Risk Analysis
| • | Restricted stock has a time-vesting requirement, generally cliff vests after three years, and further links executive compensation to the long-term value of the common shares. |
Compensation Risk Analysis
| • | Following the Separation, the Compensation Committee also made special grants of performance share awards (“special PSAs”) to select NEOs and other executives that vest only if the performance-based vesting condition and a time-based vesting condition are satisfied. Under the terms of the special PSAs, vesting is tied to our annualized absolute total shareholder return over a three-year period beginning on April 1, 2024 and ending on March 31, 2027. The retention component requires the participant to remain continuously employed by us through the third, fourth and fifth anniversaries of the award grant date. The special PSAs were made in recognition of the executives’ key roles in the Separation, the outstanding efforts associated with our post-Separation transition into an independent company, and for executive retention and shareholder alignment. |
Compensation Components
The NEOs participate in our Annual Incentive Plan for Executives, under which opportunities to earn cash bonuses are tied to attainment of annual target results. Bonuses are generally tied to achieving specified levels (threshold, target and maximum) of corporate performance for the applicable fiscal year performance period. For the post-Separation portion of fiscal 2024, the payouts were tied to achieving specified levels (threshold, target and maximum) of EVA (25% weighting) and Adjusted EPS (75% weighting). Restructuring charges and other selected items are excluded from all calculations, and the impact of inventory holding gains or losses is factored out in calculating Adjusted EPS. For performance falling between threshold and target or between target and maximum, the award is linearly pro-rated. If threshold levels are not reached for any performance measure, no bonus will be paid under that performance metric. Bonuses are paid in cash within a reasonable time following the end of the performance period, unless the Board specifically provides for a different form of payment. Termination of employment before the end of the applicable annual performance period results in forfeiture of the bonus (as was the case for Ms. Tillman), except that if the NEO dies, becomes disabled or retires, a pro rata portion of any otherwise earned bonus will be payable upon termination of employment. In the event of a change in control of the Company, followed by the termination of an NEO’s employment during the relevant performance period, the bonus will be payable at the greater of performance as of the change in control or the target level upon termination of employment. Following the Separation, on December 19, 2023, after further evaluation of the duties, responsibilities, experience, performance and market compensation information for each of the NEOs, the Compensation Committee approved the following target bonuses, expressed as a percentage of salary, of the NEOs for the post-Separation portion of fiscal 2024:
Compensation Components
| Named Executive Officer | 2024 Post-Separation Bonus Opportunities | | Mr. Gilmore | 140% | | Mr. Adams | 90% | | Mr. Blystone | 125% | | Mr. Klingler | 125% | | Mr. Heuer | 65% | | Ms. Tillman | 75% |
Compensation Components
For fiscal 2024, the bonuses were calculated by averaging the performance levels achieved during the first half of fiscal 2024 (pre-Separation) and for the second half of fiscal 2024 (post-Separation). For the first half of fiscal 2024, the performance level achieved was 116.9% for Mr. Gilmore and Mr. Heuer and, as a result of the applicable steel processing segment performance, 133.4% for Mr. Adams and Mr. Klinger. For the second half of fiscal 2024, the performance level achieved was 200% for all NEOs. Therefore, the bonus for fiscal 2024 was paid at 158.5% of target levels for Mr. Gilmore and Mr. Heuer, at 166.7% of target levels for Mr. Adams and Mr. Klingler, and at 158.5% for Mr. Blystone (however, Mr. Blystone’s fiscal 2024 bonus was payable for only the post-Separation portion of fiscal 2024). Mr. Blystone’s and Mr. Heuer’s bonuses were pro-rated for the amount of time they spent in their positions in fiscal 2024. Long-Term Incentive Compensation As discussed earlier in this CD&A, WOR granted the NEOs (other than Mr. Blystone) stock options, performance awards, performance shares and restricted stock under its long-term incentive compensation program during the pre-Separation portion of fiscal 2024 in connection with their service as WOR employees. Those awards were assumed by us under the terms of the EMA, as is described in the “Treatment of Incentive Compensation Awards in Connection with the Separation” section of this CD&A. In light of such awards, the Compensation Committee did not grant stock options, performance awards, performance shares or restricted stock to the NEOs during the post-Separation portion of fiscal 2024, except for the: (1) December 22, 2023 grants of restricted stock to Mr. Gilmore, Mr. Adams, Mr. Blystone, Mr. Klingler and Ms. Tillman; (2) December 22, 2023 grants of stock options to Mr. Gilmore, Mr. Adams, Mr. Klingler and Ms. Tillman; (3) December 22, 2023 grants of performance awards and performance shares to Mr. Gilmore, Mr. Adams, Mr. Blystone, Mr. Klingler and Ms. Tillman; and (4) April 1, 2024 grants of special PSAs to Mr. Gilmore, Mr. Adams, Mr. Blystone and Mr. Klingler. The December 2023 and April 2024 grants were made in recognition of the executives’ key roles in the Separation, the outstanding efforts associated with our post-Separation transition into an independent company and the additional responsibilities the executives assumed in connection with a newly independent, public company and for retention and shareholder alignment purposes. These grants are described in the “Restricted Stock,” “Performance Awards and Performance Shares – Grants in Fiscal 2024” and “Special PSAs” sections below. Aside from discussions of the grants made by the Compensation Committee in fiscal 2024, the balance of this “Long-Term Incentive Compensation” section describes our long-term incentive compensation program for NEOs and other executives, as established by the Compensation Committee and which will normally consist of:
Compensation Components
| • | Stock options; |
Compensation Components
| • | Performance shares based on achieving measurable financial results over a three-fiscal-year period; and |
Compensation Components
| • | Restricted stock that vests based on the passage of time. |
Compensation Components
The Compensation Committee may also make special awards (e.g., special PSAs) to selected NEOs and other executives in recognition of the executives’ exceptional performance, promotion or increased responsibility, or important role in meaningful initiatives or transactions. Awards of stock options, performance awards, performance shares, restricted stock and special PSAs are made under the Worthington Steel, Inc. 2023 Long-Term Incentive Plan (the “2023 LTIP”). In setting the size of the overall normal long-term incentive compensation awards, the Compensation Committee generally begins by looking at market median values for the comparator group, and then makes adjustments for each executive for items such as the executive’s time in the position, internal equity, performance and such other factors as the Compensation Committee deems appropriate. The percentage of the long-term incentive compensation provided by each type of award is determined by the Compensation Committee without any particular formula. The value given to stock options for purposes of these awards is determined by the Compensation Committee based on input from its compensation consultant taking into account the anticipated grant date fair value calculated under applicable accounting rules and the stock option values used for recent annual grants. The same is true for restricted stock awards, the value of which is generally based on a recent market price of the common shares. Likewise, the value of the performance shares is generally based on the number of common shares that can be earned at target, multiplied by a recent common share price. The value used for performance awards is generally the amount that can be earned at target. The amount of each type of award granted to an executive officer is determined consistent with the above factors, with the specific amount determined by the Compensation Committee on a subjective basis combining all of the factors considered. The Compensation Committee believes that using a blend of these award types represents a particularly appropriate and balanced method of motivating and rewarding executives. Restricted stock and stock options align the interests of our executives with those of our shareholders by providing value tied to appreciation in the common share price. Performance awards motivate long-term results because their value is tied to sustained financial achievement over a multiple-year period. Performance shares blend both of these features because the number of performance shares received is tied to sustained financial achievement over a multiple-year period, and the value of those performance shares is tied to the price of the common shares. The Compensation Committee believes the combination of these forms of incentive compensation is superior to reliance upon only one form and is consistent with our compensation philosophy and objectives. The Compensation Committee generally awards stock options, performance awards, performance shares and restricted stock at its June meeting each year. The stock options and restricted stock are generally made effective following the meeting and after we report earnings for the just-completed fiscal year. Performance awards and performance shares are generally based on performance over a three-fiscal-year period beginning with the first day of the fiscal year in which the awards are made. An explanation of the calculation of the compensation expense relative to the equity-based long-term incentive compensation is set forth in the section of this CD&A captioned “Equity-Based Long-Term Incentive Compensation Accounting”. Current plan provisions prohibit backdating stock options to provide for lower exercise prices or repricing or offering buyouts of underwater stock options without shareholder consent. Stock options are normally granted annually to the NEOs, with the number of common shares covered by a stock option award generally dependent upon the executive’s position and external market data. The following describes the Compensation Committee’s general practice in granting stock options, excluding grants tailored to meet specific or special circumstances. All stock options granted to the NEOs are non-qualified stock options and they will generally vest in equal amounts at a rate of one-third per year for three years. Termination of employment results in the forfeiture of unvested stock options, except that the Compensation Committee may exercise its discretion to cause all or a portion of the unvested stock options to vest upon retirement, death or disability. Upon termination of employment due to retirement, death or disability, the vested portion of any outstanding stock options will remain exercisable until the earlier of the stock option’s stated expiration date or 36 months after the termination of employment. In the event of a change in control followed by termination of employment without cause or constructive termination of employment, any outstanding stock options will become fully vested and exercisable. Additionally, the then vested portion of any outstanding stock options will remain exercisable until the earlier of the stock option’s stated expiration date or 12 months after the termination of employment. The Compensation Committee may allow the holder of a stock option to elect, during the 60-day period following a change in control, to surrender a stock option or a portion thereof in exchange for a cash payment equal to the excess of the change in control price per share over the exercise price per share. The stock options granted to the NEOs in fiscal 2024 are detailed in the “Grants of Plan-Based Awards for Fiscal 2024” table in this Proxy Statement. For purposes of the “Grants of Plan-Based Awards for Fiscal 2024” table, stock options are valued based on a grant date fair value and calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“ASC 718”). This value for stock options is also reported in the “Option Awards” column of the “Fiscal 2024 Summary Compensation Table” in this Proxy Statement. Performance Awards and Performance Shares – In General The Compensation Committee has and expects to continue to award a select group of key executives, including the NEOs, long-term performance awards and performance shares which are earned based upon the achievement of pre-established financial measures and goals (threshold, target and maximum) over a prospective three-fiscal-year performance period. The Compensation Committee may periodically consider whether to change the financial measures used and review the types of measures used by other companies and other relevant information provided by its compensation consultant. Performance awards are intended to reward executives for achieving the goals, while performance shares are intended to reward executives for both achieving the goals and increasing the common share price. If the performance criteria are met, payouts are generally made in the quarter following the end of the performance period. If the performance level falls between threshold and target or between target and maximum, the award is linearly pro-rated. Nothing is paid or delivered under the performance awards or the performance awards if none of the three-fiscal-year financial thresholds are met. Performance awards may be paid in cash, common shares or any combination thereof, as determined by the Compensation Committee at the time of payment. Earned performance awards have historically been paid in cash by WOR and the Compensation Committee currently intends to continue that practice. Performance shares are generally settled in common shares and the value is determined not only by the number of common shares earned, but also by the price of the common shares at the time the common shares are delivered.
Compensation Components
The calculation of our results and the level of attainment of performance criteria are made solely by the Compensation Committee based upon our consolidated financial statements. The Compensation Committee determines the appropriate changes and adjustments and may make adjustments for unusual events or other items deemed to not be indicative of our core operating results, including, without limitation, changes in tax and accounting rules and regulations, extraordinary gains and losses, mergers and acquisitions, and purchases or sales of substantial assets. Restructuring charges and other selected items are generally excluded from the calculation of all financial measures, and the impact of inventory holding gains or losses are generally factored out in calculating Adjusted EPS. Performance Awards and Performance Shares – Grants in Fiscal 2024 As previously discussed, WOR granted performance awards and performance shares in early fiscal 2024. In addition, effective December 22, 2023, in recognition of the executives’ key roles in the Separation and additional responsibilities leading a newly independent public company and for retention and shareholder alignment purposes, the Compensation Committee made the following grants of additional performance shares (at the target level): Mr. Gilmore (10,100 common shares); Mr. Adams (900 common shares); Mr. Blystone (14,750 common shares); Mr. Klingler (1,550 common shares); and Ms. Tillman (1,200 common shares). The Compensation Committee also made the following amounts of performance awards (at the target level): Mr. Gilmore ($640,000); Mr. Adams ($65,000); Mr. Blystone ($810,000); Mr. Klingler ($100,000) and Ms. Tillman ($80,000). Mr. Heuer was not an executive officer until February 2024 and did not receive performance awards or performance shares in fiscal 2024. Performance shares granted in fiscal 2024 for the performance period ending with fiscal 2026 are reported in the “Stock Awards” column of the “Fiscal 2024 Summary Compensation Table” of this Proxy Statement. Performance awards and performance shares granted in fiscal 2024 for the performance period ending with fiscal 2026 are reported in the “Grants of Plan-Based Awards for Fiscal 2024” in this Proxy Statement. An explanation of the calculation of the compensation expense relative to those awards is set forth in the “Equity-Based Long-Term Incentive Compensation Accounting” section in this CD&A. The performance measures adopted by the WOR CC for the performance awards and performance shares granted in early fiscal 2024 are described in the “Pre-Separation Compensation and Compensation at Separation Established by WOR – Long-Term Incentive Compensation – Performance Shares and Performance Awards” section of this CD&A. The performance awards and performance shares granted by the Compensation Committee in December 2023, were made on substantially the same terms as those granted by WOR in early fiscal 2024, and the performance goals were reviewed and ratified by the Compensation Committee. The Compensation Committee believes that the corporate performance measures selected for the performance awards and performance shares granted in fiscal 2024 are appropriate because:
Compensation Components
Due to the adverse tax consequences that would have resulted from the combination of the above-described treatment of the performance shares scheduled to vest at the end of fiscal 2025 and Mr. Adams having met the service and age conditions for retirement under the terms of the applicable plan, the performance shares held by Mr. Adams that were schedule to vest at the end of fiscal 2025 were also vested at the end of fiscal 2024. Mr. Blystone and Mr. Heuer did not hold any such performance awards or performance shares, and such performance awards and performance shares previously held by Ms. Tillman were forfeited upon her resignation and did not vest. Accordingly, Mr. Blystone, Mr. Heuer and Ms. Tillman were excluded from the table above. Performance awards earned for the performance period ended with fiscal 2024 are reported in the “Non-Equity Incentive Plan Compensation – Performance Award” column of the “Fiscal 2024 Summary Compensation Table” of this Proxy Statement. Performance Awards and Performance Shares – Impact of Termination/Change in Control Termination of employment results in forfeiture of performance awards and performance shares, except if termination is due to death, disability or retirement, a pro rata payout will be made for performance periods ending 24 months or less after termination of employment based on the number of months of employment completed by the participant during the performance period before the effective date of termination, provided that the applicable performance goals are achieved. No payout will be made for performance periods ending more than 24 months after termination of employment. Unless the Compensation Committee specifically provides otherwise at the time of grant, if a change in control occurs, all performance awards and performance shares would be payable in full at the target level, and immediately settled or distributed. Restricted Stock Restricted stock is intended to reward and incent executives by directly aligning their interests with the interests of shareholders. Restricted stock generally vests in full (i.e., cliff vest) if the executive remains continuously employed by us for a three-year period. The Compensation Committee has granted, and may again grant, restricted stock with different vesting terms. The time-based vesting condition of restricted stock also serves as a management retention tool. Termination of employment before the end of the vesting period results in the forfeiture of restricted stock, except that the award will vest (1) in full if the NEO dies or becomes permanently disabled and (2) if the Compensation Committee provides for the vesting of some or all of the restricted stock upon retirement. If a change in control occurs and the NEO’s employment is, during the two years following the change in control, terminated by us without cause or terminated by the NEO due to an adverse change in the executive’s terms of employment, the restricted stock will fully vest upon termination of employment. Dividends accrued on restricted stock are distributed to the NEO in conjunction with vesting of the award. As previously discussed, WOR granted restricted stock in early fiscal 2024. In addition, effective December 22, 2023, the Compensation Committee granted restricted stock to the NEOs. These grants of restricted stock were intended to account for the additional responsibilities the NEOs assumed with us by supplementing the NEOs’ existing unvested restricted stock grants made by WOR in fiscal 2022, fiscal 2023 and fiscal 2024. As such, the December 2023 grants were made in three tranches to each NEO, with the tranches cliff vesting on the first, second and third anniversaries of the grant date. Also effective December 22, 2023, in recognition of his exceptional performance in supporting the Separation, the Compensation Committee made an additional restricted stock grant to Mr. Adams that will cliff vest on the third anniversary of the grant date. On March 22, 2024, in connection with his promotion to Vice President, General Counsel and Secretary, the Compensation Committee granted Mr. Heuer restricted stock that will cliff vest on the third anniversary of the grant date. Restricted stock granted to Ms. Tillman was forfeited upon her resignation. The following table summarizes the Compensation Committee’s grants of restricted stock to the NEOs during the post-Separation portion of Fiscal 2024:
Compensation Components
| | Restricted Stock Granted in Dec. 2023 | | | Restricted Stock Granted in Mar. 2024 | | Named Executive Officer | Vesting Dec. 22, 2024 (#) | Vesting Dec. 22, 2025 (#) | Vesting Dec. 22, 2026 (#) | Vesting Mar. 22, 2027 (#) | | Mr. Gilmore | 7,770 | 21,190 | 15,100 | – | | Mr. Adams | 780 | 2,140 | 11,600 | – | | Mr. Blystone | 8,920 | 24,340 | 17,650 | – | | Mr. Klingler | 1,150 | 3,150 | 2,100 | – | | Mr. Heuer | – | – | – | 710 | | Ms. Tillman | 980 | 2,690 | 2,000 | – |
Equity-Based Long-Term Incentive Compensation Accounting
Equity-Based Long-Term Incentive Compensation Accounting The accounting treatment for equity-based long-term incentive compensation is governed by ASC 718. Stock options are valued using the Black-Scholes pricing model based upon the grant date closing price per common share underlying the stock option award, the expected life of the stock option award, the risk-free interest rate, the dividend yield, and the expected volatility. Further information concerning the valuation of stock options and the assumptions used in that valuation is contained in “Note A – Summary of Significant Accounting Policies – Stock-Based Compensation” and “Note K – Stock-Based Compensation” of the Notes to Consolidated and Combined Financial Statements in “Item 8. – Financial Statements and Supplementary Data” of the 2024 Form 10-K. Performance shares payable in common shares are initially valued using the price per common share based on the target award, and compensation expense is recorded prospectively over the performance period on a straight-line basis. This amount is then adjusted on a quarterly basis based upon an estimate of the performance level anticipated to be achieved for the performance period in light of actual and forecasted results. Performance awards are initially valued at the target level, and compensation expense is recorded prospectively over the performance period on a straight-line basis. This amount is then adjusted on a quarterly basis based on an estimate of the performance level anticipated to be achieved for the performance period in light of actual and forecasted results. Restricted stock is valued at fair value as of the date of grant and the calculated compensation expense is recognized on a straight-line basis over their respective vesting periods. For restricted stock with only time-based vesting, fair value is generally equal to the closing price of the common shares at the respective grant date. If the vesting is subject to other conditions, such as the special PSAs, the value is generally calculated under a Monte Carlo simulation model. Further information concerning the valuation of restricted stock and the assumptions used in that valuation is contained in “Note A – Summary of Significant Accounting Policies – Stock-Based Compensation” and “Note K – Stock-Based Compensation” of the Notes to Consolidated and Combined Financial Statements in “Item 8. – Financial Statements and Supplementary Data” of the 2024 Form 10-K.
Non-Qualified Deferred Compensation
Non-Qualified Deferred Compensation The NEOs and other highly-compensated employees are eligible to participate in the Worthington Steel, Inc. Non-Qualified Deferred Compensation Plan (the “NQDC Plan”). The NQDC Plan is a voluntary, non-tax-qualified, unfunded deferred compensation plan available only to select highly-compensated employees for the purpose of providing deferred compensation, and thus potential tax benefits, to these employees. Under the NQDC Plan, our executive officers may defer the payment of up to 50% of their base salary and up to 100% of their bonus. Amounts deferred are credited to the participants’ bookkeeping accounts under the NQDC Plan at the time the base salary and/or bonus would have otherwise been paid. In addition, we may make discretionary employer contributions to the participants’ bookkeeping accounts in the NQDC Plan. In recent years, we have made employer contributions in order to provide the same percentage of retirement-related deferred compensation to executive officers compared to other employees that would have been made but for the IRS limits on annual compensation that may be considered under the 401(k) Plan. For 2024, we made contributions to the 2024 NQ Plan for participants equal to (a) 3% of an executive’s annual compensation (base salary plus bonus) in excess of the IRS maximum and (b) a matching contribution of 50% of the first 4% of annual compensation contributed by the executive to the 401(k) Plan to the extent not matched by us under the 401(k) Plan. Participants in the NQDC Plan may elect to have their bookkeeping accounts treated as invested (a) with a rate of return reflecting (i) the returns on those investment options available under the 401(k) Plan or (ii) a fixed interest rate set annually by the Compensation Committee (4.37% for fiscal 2024), or (b) in theoretical common shares reflecting increases or decreases in the fair market value of the common shares with dividends deemed reinvested. Any portion of a participant’s bookkeeping account credited to theoretical common shares must remain credited to theoretical common shares until distributed. Otherwise, participants in the NQDC Plan may change the investment options for their bookkeeping accounts as of the time permitted under the 401(k) Plan for the same or a similar investment option. Employees’ bookkeeping accounts in the NQDC Plan are fully vested. Payouts of amounts credited to theoretical common shares are made in whole common shares and cash in lieu of fractional shares. Payouts of amounts credited to all other investment options are made in cash. Payments will be made as of a specified date selected by the participant or, subject to the timing requirements of Section 409A of the Internal Revenue Code, when the participant is no longer employed by us. Payments are made either in a lump sum or in installments, all as chosen by the participant at the time the deferral is elected. The Compensation Committee may permit hardship withdrawals from a participant’s account under defined guidelines.
Termination and Change in Control Arrangements
Termination and Change in Control Arrangements We are not a party to any employment agreement or severance agreement with an NEO. An NEO whose employment with us terminates in certain circumstances is entitled to compensation that the Compensation Committee believes is appropriate, taking into account the time expected for a terminated NEO to find another job, and is intended to ease the consequences to an NEO of a termination of employment. The Compensation Committee recognizes the importance to us and our shareholders of avoiding the distraction and loss of key executives that may occur in connection with any rumored, threatened or actual change in control. To that end, the Compensation Committee believes that providing reasonable change in control benefits to the NEOs protects shareholder interests by enhancing executive focus during rumored, threatened or actual change in control activity through incentives to remain with us despite uncertainties while a transaction is under consideration or pending and assurance of benefits in the event of termination of employment in connection with a change in control. To reduce the potential distraction due to personal uncertainties and risks that inevitably arise when a change in control is rumored, threatened or pending, the NEOs are entitled to change in control benefits in connection with incentive compensation awards. The benefits under the incentive compensation awards for restricted stock are subject to a “double trigger” that provides for accelerated vesting of incentive compensation awards in connection with a change in control only if the employment of the NEO is terminated in connection with the change in control. The Compensation Committee believes that these change in control provisions are appropriate, particularly because we have no employment agreements or other stand-alone change in control agreements relative to the NEOs or other executives. The payments that an NEO would be entitled to receive upon termination or a change in control are not considered by the Compensation Committee when making annual compensation decisions for the NEOs and do not factor into decisions made by the Compensation Committee regarding other compensation elements. For additional information regarding the termination and change in control arrangements with the NEOs, see the section of this Proxy Statement captioned “Executive Compensation – Potential Payments Upon Termination or Change in Control”.
Compensation Committee Report
| Name and Principal Position | Fiscal Year | Salary ($) (1) | Discretionary Bonus ($) (2) | Stock Awards ($) (3) | Option Awards ($) (4) | Non-Equity Incentive Plan Compensation | | All Other Compensation ($) (6) | Total ($) | | | | | | | | Annual Incentive Bonus ($) (1) | Performance Award ($) (5) | | | | Geoffrey G. Gilmore President and Chief Executive Officer | 2024 | 753,485 | - | 4,794,452 | 308,497 | 1,571,946 | 1,073,332 | 91,104 | 8,592,816 | | | 2023 | 656,515 | - | 774,713 | 145,693 | 810,176 | 1,026,668 | 99,462 | 3,513,227 | | | 2022 | 630,669 | - | 601,900 | 122,512 | 1,550,001 | 946,668 | 109,721 | 3,961,471 | | Timothy A. Adams Vice President and Chief Financial Officer | 2024 | 289,096 | 50,000 | 1,243,150 | 36,325 | 343,274 | 143,850 | 32,351 | 2,138,046 | | | 2023 | 256,835 | - | 92,780 | 21,281 | 122,706 | 150,000 | 31,022 | 674,624 | | | 2022 | 246,816 | - | 90,285 | 15,808 | 248,131 | 142,875 | 24,000 | 767,915 | | Jeffrey R. Klingler Executive Vice President and Chief Operating Officer | 2024 | 452,585 | - | 1,355,055 | 101,064 | 850,144 | 537,040 | 62,210 | 3,358,098 | | | 2023 | 413,808 | - | 420,618 | 78,576 | 399,420 | 520,000 | 78,413 | 1,910,835 | | | 2022 | 378,539 | - | 300,950 | 63,232 | 770,000 | 406,399 | 61,398 | 1,980,518 | | John B. Blystone (7) Executive Chairman | 2024 | 403,077 | - | 2,970,664 | - | 792,250 | - | 8,301 | 4,174,292 | | Joseph Y. Heuer (7) Vice President, General Counsel and Corporate Secretary | 2024 | 229,423 | 50,000 | 85,673 | - | 151,914 | - | 6,721 | 523,731 | | Michaune D. Tillman (8) Former Vice President, General Counsel and Corporate Secretary | 2024 | 233,198 | - | 307,205 | 41,149 | - | - | 184,678 | 766,230 | | | 2023 | 300,172 | - | 92,780 | 21,281 | 195,648 | 142,222 | 38,165 | 790,268 | | | 2022 | 279,888 | - | 90,285 | 15,808 | 362,030 | 101,112 | 25,792 | 874,915 |
Compensation Committee Report
| (2) The annual total compensation of the CEO for purposes of determining the CEO pay ratio was $8,592,816. |
Compensation Committee Report
| Name | Fees Earned or Paid in Cash ($) (3) | Stock Awards ($) (4) | Total ($) | | Mr. Bowsher | 78,080 | 115,063 | 193,143 | | Mr. Chiappone | 90,410 | 115,063 | 205,473 | | Mr. McConnell | 78,080 | 115,063 | 193,143 | | Ms. Mistretta | 78,080 | 115,063 | 193,143 | | Mr. Nelson | 115,000 | 142,186 | 257,186 | | Dr. Ribeau | 95,000 | 142,186 | 237,186 | | Ms. Schiavo | 107,330 | 142,186 | 249,513 | | Mr. Stoe | 102,737 | 168,498 | 271,235 |