DEF 14A of Mcgrath Rentcorp, Oct 30, 2024

DEF 14A of Mcgrath Rentcorp

Filed Oct 30, 2024 · FY20230001193125-24-247613

Open on EDGAR

  1. ELECTION OF DIRECTORS

    ELECTION OF DIRECTORS The Company’s bylaws authorize the number of directors to be not less than five (5) and not more than nine (9). The Board of Directors is currently fixed at six (6) directors and composed of the following directors whose terms will expire upon the election and qualification of directors at the Annual Meeting: Nicolas C. Anderson, Kimberly A. Box, Smita Conjeevaram, William J. Dawson, Joseph F. Hanna, and Bradley M. Shuster. At each Annual Meeting of shareholders, directors will be elected for full terms of one year to succeed those directors whose terms are expiring. At the 2024 Annual Meeting, the shareholders will elect six (6) directors. Messrs. Anderson, Dawson, Hanna, and Shuster and Mses. Box and Conjeevaram each have been nominated to serve a one-year term, until the Annual Meeting of Shareholders to be held in 2025, until their successors are elected or appointed and qualified, or until their earlier death, resignation, or removal. The Board of Directors has no reason to believe that any of Messrs. Anderson, Dawson, Hanna, or Shuster or Mses. Box or Conjeevaram will be unable or unwilling to serve as a nominee or as a director if elected.

  2. Characteristics of Director Nominees

    Characteristics of Director Nominees The chart below details our Board of Directors’ diversity composition by various characteristics as defined by the NASDAQ Stock Market board diversity and disclosure Rule 5605(f). For more information regarding our philosophy concerning the diversity and recruitment of our directors, see “Qualifications of Directors and Assessment of Diversity” in this Proxy Statement. This table includes information only on our director nominees.

  3. Characteristics of Director Nominees

    | Board Diversity Matrix as of October 22, 2024 | | | | | | Total Number of Directors | 6 | | | | | | Female | Male | Non-Binary | Did Not Disclose Gender | | Part I: Gender Identity | | | | | | Directors | 2 | 4 | | | | Part II: Demographic Background | | | | | | African American or Black | | 1 | | | | Alaskan Native or Native American | | | | | | Asian | 1 | | | | | Hispanic or Latinx | | | | | | Native Hawaiian or Pacific Islander | | | | | | White | 1 | 3 | | | | Two or More Races or Ethnicities | | | | | | LGBTQ | | | | | | Did Not Disclose Demographic Background | | | | |

  4. Director Compensation

    Director Compensation Our Compensation Committee periodically seeks input from independent compensation consultants on a range of external market factors, including evolving compensation trends, appropriate peer companies, and market survey data. The Compensation Committee reviews non-employee director compensation every two years. In August 2023, our Compensation Committee retained Semler Brossy Consulting Group (“Semler Brossy”) to conduct a review and analysis of the non-employee director compensation program to be considered by the Compensation Committee in establishing the 2024 compensation review cycle remuneration levels for our non-employee directors. The 2023 compensation described below was approved by the Board of Directors based on the previous compensation consultant, Pearl Meyer & Partners, LLC’s (“Pearl Meyer”) analysis and recommendations of the Compensation Committee. For a more complete description of the methodologies used by our compensation consultants and the Compensation Committee, please refer to “Compensation Consultant and Peer Group Selection” in this Proxy Statement. For 2023, each non-employee director of the Company was compensated for his or her services as a director with an annual retainer of $85,000. In addition to the annual retainers, the Chairs of the Board of Directors, Audit Committee, Compensation Committee, and Corporate Governance and Nominating Committee received additional annual retainers of $75,000, $25,000, $18,500, and $10,000, respectively. Each other member of the Audit Committee, Compensation Committee, and Corporate Governance and Nominating Committee received annual retainers of $10,000, $7,500, and $5,500, respectively. Members of the Board of Directors do not receive additional compensation for attending Board or committee meetings. All non-employee directors are reimbursed for expenses incurred in connection with attending Board of Directors or committee meetings. Mr. Hanna received no additional compensation for his service as a director. These annual retainers are included in the “2023 Non-Employee Director Compensation Table” below. For fiscal year 2024, based on Semler Brossy’s November 2023 analysis, the Compensation Committee recommended, and the Board of Directors approved, no increase to the non-employee director annual retainer. For fiscal year 2024, each non-employee director of the Company will receive an annual retainer of $85,000. In addition, to the annual retainer the Chairs of the Board of Directors, Audit Committee, Compensation Committee, and Corporate Governance and Nominating Committee will receive additional annual retainers of $75,000, $25,000, $18,500, and $10,000, respectively. Each other member of the Audit Committee, Compensation Committee, and Corporate Governance and Nominating Committee will receive annual retainers of $10,000, $7,500, and $5,500, respectively. Any non-employee director not serving on the Board of Directors for the full calendar year will receive prorated compensation based on that portion of the year in which he or she served. Mr. Hanna will not receive any additional compensation for his services as a director. In addition to cash compensation, each of the non-employee directors of the Company has historically received an annual Restricted Stock Unit (“RSU”) equity grant denominated as a fair value and then converted to shares rounded to the nearest 100 at the date of grant. Based on Pearl Meyer’s analysis conducted in 2022, the Compensation Committee recommended, and the Board of Directors approved, the fair value of the 2023 equity grant of approximately $120,000. On February 24, 2023, the Board of Directors granted each non-employee director RSUs under the 2016 Plan 1,200 shares of the Company’s Common Stock with a vesting date of April 1, 2024. Each of these grants represented an equivalent total equity compensation of $125,112, based on the NASDAQ Stock Market close price of $104.26 on February 24, 2023. The total equity compensation values can fluctuate slightly each year due to rounding. These 2023 RSU grants are included in the “2023 Non-Employee Director Compensation Table” in this Proxy Statement. Based on Semler Brossy’s analysis, the Compensation Committee recommended, and the Board of Directors approved, no change to the fair value of the 2024 equity grant of approximately $120,000. On February 23, 2024, the Board of Directors granted each non-employee director RSUs under the 2016 Plan 1,000 shares of the Company’s common stock with a vesting date of April 1, 2025. Each of these grants represented an equivalent total equity compensation of $124,900, based on the NASDAQ Stock Market closing price of $124.90 on February 23, 2024. The total equity compensation values can fluctuate slightly each year due to rounding. The table below summarizes the compensation paid by the Company to its non-employee directors for the fiscal year ended December 31, 2023.

  5. 2023 NON-EMPLOYEE DIRECTOR COMPENSATION TABLE

    2023 NON-EMPLOYEE DIRECTOR COMPENSATION TABLE

  6. 2023 NON-EMPLOYEE DIRECTOR COMPENSATION TABLE

    | Name | Fees Earned or Paid in Cash ($) | Stock Awards(3) ($) | Total ($) | | Nicolas C. Anderson | $102,500 | $125,112 | $227,612 | | Kimberly A. Box | $106,475 | $125,112 | $231,587 | | Smita Conjeevaram | $103,047 | $125,112 | $228,159 | | William J. Dawson | $117,500 | $125,112 | $242,612 | | Elizabeth A. Fetter(1) | $107,275 | $125,112 | $232,387 | | Bradley M. Shuster | $173,000 | $125,112 | $298,112 | | M. Richard Smith(2) | $44,492 | $29,553 | $74,045 | | Dennis P. Stradford(2) | $42,538 | $29,553 | $72,091 |

  7. 2023 NON-EMPLOYEE DIRECTOR COMPENSATION TABLE

    | (1) Ms. Fetter resigned from the Board of Directors effective August 1, 2024. The Compensation Committee approved the following in consideration of Ms. Fetter’s long service on the Board of Directors: (1) the accelerated vesting of 1,000 shares of restricted stock units, previously granted to Ms. Fetter on February 23, 2024, which would have otherwise vested on April 1, 2025, and (2) a cash payment to Ms. Fetter in the amount of approximately $51,000 in respect of Board and committee retainers for the remainder of calendar year 2024. |

  8. 2023 NON-EMPLOYEE DIRECTOR COMPENSATION TABLE

    | (2) Messrs. Smith and Stradford retired from the Board of Directors effective June 7, 2023, and received compensation for their service from January 1 – June 7, 2023. Additionally, Messrs. Smith and Stradford were granted RSUs under the 2016 Plan of 1,200 shares of the Company’s common stock that represented an equivalent total equity compensation of $121,875 based on the NASDAQ Stock Market closing price of $104.26 on February 24, 2023. Upon their retirement, 300 shares of those RSUs became fully vested, and 900 shares were forfeited. Therefore, Messrs. Smith and Stradford’s total equity compensation was $29,553 based on the NASDAQ Stock Market closing price of $98.51 on June 7, 2023. |

  9. 2023 NON-EMPLOYEE DIRECTOR COMPENSATION TABLE

    | (3) Pursuant to the Director Award Agreements, awards vest in full immediately prior to the specified effective date of a Change In Control or a Corporate Transaction. |

  10. Compensation Discussion and Analysis

    Compensation Discussion and Analysis In this Proxy Statement, we refer to Messrs. Hanna, Pratt, and Hawkins, and Mses. Malek and Van Trease collectively as our named executive officers or NEOs. Mr. Hanna is our Chief Executive Officer, Mr. Pratt is our Chief Financial Officer and Mr. Hawkins, and Mses. Malek and Van Trease were our next three highest compensated executive officers serving as of December 31, 2023. In this Proxy Statement, we refer to the NEOs and Messrs. Whitney, Skenesky, Lieffrig, and Ms. Wescott collectively as “executive officers.” Melodie Craft resigned from the Company effective March 10, 2023, and Ms. Malek was appointed as our Vice President, General Counsel, and Corporate Secretary, effective March 21, 2023. 2023 Business Performance Highlights and Alignment with Compensation Our full-year 2023 revenue and profit growth reflect a strategic focusing of the McGrath portfolio on Mobile Modular through the Vesta Modular acquisition and Adler Tank Rentals divestiture, which we announced on February 1, 2023. We also maintained a diligent focus on execution as we made the most of healthy market conditions across our Mobile Modular and Portable Storage business segments. We pursued our strategic growth focus on the modular segment with significant organic investment in new fleet, while optimizing pricing and improving fleet utilization. We also made progress with our modular growth initiatives for additional services and new equipment sales. The annual incentive bonus amounts in respect of 2023 for the executive officers were based on the Company’s Adjusted EBITDA for corporate officers and division-specific Adjusted EBITDA for division officers (defined as the Company’s net income before interest expense, provision for income taxes, depreciation, amortization, non-cash impairment costs, share-based compensation and transaction costs). Adjusted EBITDA accounted for 100% of the annual profitability bonus target in compensation plans for amounts paid out in 2023. The metric used to determine the achievement of long-term performance-based restricted stock units (“RSUs”) granted during 2023 is the achievement of three-year Return on Invested Capital (“ROIC”) and revenue growth targets. In addition, in an effort to retain key managers, attract new talent, and build an ownership mentality for executive officers, the Compensation Committee continued its practice in 2023 of granting a mix of time-based and performance-based RSUs. The time-based RSUs vest over three years, and performance-based RSUs vest at the end of a three-year performance period. This approach more closely aligns our equity compensation with our peer companies and common market practices. Proposed Acquisition by WillScot Mobile Mini and Its Termination As previously disclosed, on January 28, 2024, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and among the Company, WillScot Holdings Corporation (“WillScot”), Brunello Merger Sub I, Inc., a California corporation and wholly owned subsidiary of WillScot and Brunello Merger Sub II, LLC, a Delaware limited liability company and wholly owned subsidiary of WillScot, pursuant to which WillScot agreed to acquire the Company pursuant to the terms and conditions of the Merger Agreement. On September 17, 2024, the Company and WillScot entered into a mutual termination agreement (the “Termination Agreement”) pursuant to which they mutually agreed to terminate the Merger Agreement effective upon receipt by the Company of a cash payment in the amount of $180,000,000 (the “Termination Fee”), which Termination Fee was received on September 20, 2024. In consideration of the pending merger with WillScot, the Compensation Committee, in consultation with the Board of Directors, approved certain equity awards to executive officers in 2024 that deviated from historical practices. The Compensation Committee intends to generally revert to its historical approach on equity grants to executive officers subsequent to termination of the Merger Agreement and the Company continuing to operate as a standalone company. Executive Compensation Program Design The Compensation Committee has the responsibility for establishing, implementing, and continually monitoring the compensation of the Company’s executive officers. The Compensation Committee oversees and approves the design of the executive compensation program to ensure that the total compensation paid to our executive officers is fair, reasonable, competitive, and aligned with the goals and objectives of the Company. For the fiscal year ended December 31, 2023, the principal components of compensation for executive officers were:

  11. Compensation Discussion and Analysis

    | 2. | Non-equity annual performance-based incentive compensation (“Annual Cash Bonus”) pursuant to the Non-Equity Performance-Based Incentive Plan (the “Cash Bonus Plan”); and |

  12. Compensation Discussion and Analysis

    | 3. | Long-term equity incentive compensation. |

  13. Compensation Discussion and Analysis

    The Compensation Committee determined that these three elements, with a significant percentage of total compensation allocated to “at-risk” performance-based incentives, best align the interests of our executive officers with our shareholders and achieve our overall goals for executive compensation. The Annual Cash Bonus rewards achievement of annual incentive goals and the long-term equity incentive compensation rewards achievement of long-term growth in shareholder value and sustained financial health of the Company. There is no pre-established policy or target for the allocation between either cash and non-cash or short-term and long-term incentive compensation. Rather, the Compensation Committee reviews relevant market compensation data from its compensation consultant and other sources and uses its judgment to determine the appropriate level and mix of incentive compensation on an annual basis. Elements of 2023 Executive Compensation Program

  14. Compensation Discussion and Analysis

    | Compensation Element | Description | Program Features | | Annual Base Salary | • Fixed component of annual cash compensation. • Influenced by competitive market pay trends and individual performance while considering each NEOs experience and scope of responsibilities. | • Offers McGrath NEOs a stable measure of certainty and predictability to meet ongoing living and financial commitments. • Ensures McGrath remains competitive with the market to ensure the Company attracts and retains top talent. | | Annual Incentive Compensation (“Annual Cash Bonus”) | • Variable compensation paid to NEOs subject to pre-established financial “Profitability Bonus” targets as well as individual “Personal Annual Priorities” performance. • Each NEO is granted a target award (as a percentage of the NEO’s base salary) based upon job responsibilities, performance in role, and market competitiveness. • In 2023, the Profitability Bonus Plan metric was changed to a consistent metric of company Adjusted EBITDA for corporate officers and divisional Adjusted EBITDA for division VPs. In the prior year, pre-tax income was used for corporate officers and division EBIT was used for division VPs. | • In 2023, Adjusted EBITDA was the only metric in the “Profitability Bonus” portion of the program, weighted 75% of the total Annual Cash Bonus. Based on Adjusted EBITDA performance, payouts can range from 50% at threshold to 200% at maximum, with linear interpolation between performance levels. • The remaining 25% of the Annual Cash Bonus was dedicated to “Personal Annual Priorities” comprised of a maximum of four (4) items deemed to be the most critical priorities for each NEO for the year. Individual priorities payout opportunity is capped at 100% of target. |

  15. Compensation Discussion and Analysis

    | Compensation Element | Description | Program Features | | Long-Term Equity Incentives | • The Compensation Committee granted a mix of performance-based restricted stock units (“PSUs) and time-based RSUs in 2023 to retain key talent and build an ownership mentality for executive officers. • A target equity award is granted to each NEO commensurate with job responsibilities, market competitiveness, experience, and qualitative and quantitative performance factors. • PSUs utilize a multi-year performance period to link realized compensation to achievement of long-term financial performance. • In 2023, company wide ROIC and revenue achievement goals were used to measure performance achievement. RSUs align the executives with stockholder interests on increasing share value. | • In 2023, 50% was granted in the form of PSUs with performance measured by achievement of three-year Company ROIC and revenue growth targets, each weighted equally, providing a balanced focus on both returns and growth over the three-year performance period. The PSUs cliff vest three years after grant, subject to continued service and achievement of the performance goals. • The remaining 50% was granted as time-based RSUs vesting in three equal annual installments over three years based on continued service. • We believe this provides a balanced focus on both returns and growth over the three-year performance period. |

  16. Compensation Discussion and Analysis

    | What We Do | What We Do Not Do | | Pay for Performance under Our Cash Bonus Plan: We link pay to performance and shareholder interests by establishing an annual cash bonus plan based on financial metrics and personal annual priorities established in advance by the CEO and/or the Compensation Committee. Performance-Based Long Term Incentive Compensation: 50% of the RSUs granted to our executive officers have performance-based vesting subject to goals associated with corporate or divisional ROIC performance. In 2023, we also began using revenue as an additional measurement. Compensation Recoupment Policy: The policy may require an executive officer in the event of a financial restatement to reimburse the Company with respect to any incentive compensation (including cash and equity awards) received during the past three years. Capped Incentives under Our Annual Cash Bonus Plan: Bonuses under our annual cash bonus plan are capped for our executive officers — the cap is tied to their base salary for the relevant year, and in no case is it greater than 200% of their target bonus. Equity Awards Vesting: Performance-based awards vest at the end of each three-year performance period. Time-based awards are subject to a three-year vesting schedule. Stock Ownership and Holdback Guidelines: Our executive officers and directors are subject to stock ownership and holdback guidelines. Compensation Committee Independence and Experience: The Compensation Committee is comprised solely of independent directors who have extensive experience. Thorough Compensation Risk Assessment: The Compensation Committee regularly conducts a comprehensive risk assessment of the Company’s executive compensation programs and practices every two years to ensure prudent risk management. Independent Compensation Advisor: The Compensation Committee utilizes its own independent advisor. Annual Stockholder Advisory Vote: We conduct an annual shareholder advisory vote on the compensation of our NEOs. | No “Single Trigger” Change of Control Severance Payments: We generally do not have “single trigger” severance payments owing solely on account of the occurrence of a change of control event. No Guaranteed Bonuses: We do not provide guaranteed minimum bonuses or uncapped incentives under our annual cash bonus plan. No Re-Pricing of Equity Awards: Our equity plans prohibit repricing of equity awards without shareholder approval. No Special Perquisites or Retirement Benefits: We do not provide special perquisites or retirement benefits to our executive officers that are not generally made available to all of our employees except that any executive officer employed with the Company for at least 10 years may remain on the Company’s health insurance policy after retiring if he or she pays 100% of the premiums. No Tax Gross-Ups: We do not provide tax gross-ups. No Hedging in Company Securities: Our employees and directors are prohibited from engaging in any hedging transaction with respect to company equity securities. No Pledging of Company Securities: Our employees and directors are prohibited from engaging in any pledging transaction with respect to company equity securities. |

  17. Compensation Discussion and Analysis

    The following sections describe all features of our executive compensation in more detail. Compensation Philosophy and Objectives The purpose of the Company’s executive compensation program is to attract and retain exceptional managerial talent and to reward performance by establishing measurable objectives to drive future performance, thus aligning our executive officers’ interests with those of our shareholders. We believe the most effective compensation program is one that is designed to reward the achievement of specific annual, long-term, and strategic goals of the Company. Our primary objective is to align our executive officers’ interests with the interests of our shareholders by rewarding the achievement of established goals that contribute to increased long-term shareholder value. To that end, part of our executive officers’ compensation is directly tied to identifiable, objective goals by which performance can be measured. In addition, in structuring our executive compensation program, we consider the compensation of our executive officers relative to the compensation paid to similarly situated executives of our peer group companies and the broader general market. Advisory Vote on Executive Compensation At the 2023 Annual Meeting, 96.7% of the shares of Common Stock present and entitled to vote on the advisory vote on the executive compensation proposal were in favor of our named executive officer compensation. The result of the 2023 vote was consistent with our record over the past five years of greater than 95% support for say-on-pay. The Board of Directors and Compensation Committee reviewed these final vote results and determined that, given the significant level of support, our executive compensation policies and decisions discussed in the “Compensation Discussion and Analysis” were appropriate to achieve our objectives. Compensation Consultant and Peer Group Selection The Compensation Committee periodically seeks input from its outside compensation consultant on a range of external market factors, including evolving compensation trends, appropriate peer companies, and market survey data. In 2023, the Compensation Committee retained Semler Brossy to conduct a review and analysis of our current compensation program to be considered by the Compensation Committee in establishing the compensation levels and severance guidelines for our non-employee directors and executive officers. After consideration of several factors relating to the independence of Semler Brossy, including those guidelines set forth in the NASDAQ listing standards, the Compensation Committee determined that Semler Brossy is independent. In late 2023, Semler Brossy provided an analysis with relevant market data and alternatives to consider when making compensation decisions for our executive officers. The analysis compared each element of total compensation against a peer group of publicly traded companies and compensation survey data (the “Compensation Peer Group”). The Compensation Peer Group consisted of companies against which we compete for recruiting and retaining qualified line and staff executives and independent non-employee directors. In selecting the Compensation Peer Group, the Compensation Committee also sought to comply with best-practice parameters by including companies in a similar industry or geography and with similar financial metrics, such as revenue, market capitalization, and net income. The Compensation Committee generally reviews total compensation and considers it compared to the Compensation Peer Group. Other factors were also taken into consideration when determining executive officer compensation levels, including:

  18. Compensation Discussion and Analysis

    | 3) | Stature/experience/length of service of executive officer in role relative to market comparisons. |

  19. Compensation Discussion and Analysis

    | 4) | Geographic location of executive officer and relative market comparisons. |

  20. Compensation Discussion and Analysis

    | 5) | Definition and extent of responsibilities of executive officer role by the Company versus peer group sources. |

  21. Compensation Discussion and Analysis

    | 7) | Appropriate weighting or relativeness of different peer group sources. |

  22. Compensation Discussion and Analysis

    In connection with Semler Brossy’s updated peer analysis in 2023, the Compensation Committee approved a revised Compensation Peer Group for 2024 compensation decisions. The peer group serves as a basis for which the Compensation Committee considers an analysis of market competitive pay for all of the Company’s executive officers in comparison to peers when determining pay levels for target compensation. The peer group also serves as an informative source determining competitive practices relative to pay design and governance practices. The Company’s peer group is reviewed and selected based on companies within a similar industry, geography, and financial profile. In 2023, the Company’s peers were screened to approximate one-third to three times the Company’s revenue and market cap as of the time of review. Additional consideration is given to qualitative criteria, where companies who matched the screening criteria were holistically reviewed to determine whether they were seen as a reasonable comparator for the Company (on the basis of whether they are seen as talent competitors, have similar business characteristics, and operate adjacent to the Company’s industry). As a result, the Compensation Committee approved an increase of the size of the Company’s peer group from 12 to 18 companies. Civeo and Willis Lease Finance Corporation were removed due to falling below the market cap screen. Air Lease Corp, Badger Meter, Custom Truck One Source, Enerpac Tool Group, Kratos Defense and Security, Stem, Transact, and UniFirst Corp, were all added to peer group for 2024 compensation decisions. The revised Compensation Peer Group for 2024 is as follows:

  23. Compensation Discussion and Analysis

    Process of Setting and Approving Executive Compensation; Role of Chief Executive Officer The Compensation Committee approves annual compensation levels and equity awards to all of our executive officers. The process is described below: The five steps below describe the process of setting and approving executive compensation and the role of the Chief Executive Officer in a typical year. 1. The Compensation Committee reviews the independent compensation consultant’s analysis to evaluate for each executive officer (1) a target total compensation amount; (2) the appropriate allocation of base salary, annual bonus, and long-term equity incentive compensation; (3) the risk that any compensation element could have an adverse impact on the Company; and (4) if there should be any change to the forms of compensation to better align our executive officer’s interests with those of our shareholders. 2. For the Chief Executive Officer, the allocation of base salary, annual bonus, and long-term equity incentive compensation and the applicable performance target levels are determined by the Compensation Committee, in consultation with the Chairman of the Board of Directors and separately with all of the independent directors. The Chief Executive Officer has no role in setting his compensation. 3. For each of the other executive officers, the Chief Executive Officer recommends the allocation of base salaries, annual bonuses, and long-term equity incentive compensation and the applicable performance target levels. These recommendations are presented to the Compensation Committee for the Compensation Committee’s consideration and, if appropriate, approval. 4. Shortly after the end of the fiscal year, the Chief Executive Officer reviews the performance of each executive officer (other than himself) against his or her established personal objectives for the year and general management responsibilities and then determines the achievement level attained. 5. At the end of the fiscal year, the Compensation Committee reviews the Chief Executive Officer’s performance. The Compensation Committee then determines, based on the market data and the Chief Executive Officer’s performance, and after consultation with the Chairman of the Board of Directors and separately with all independent directors, the compensation of the Chief Executive Officer. 2023 and 2024 Annual Base Salary The table below sets forth the annual base salary of each of our named executive officers in 2022, 2023, and 2024. Based on the performance results of 2022, the outlook for the Company in 2023 and 2024, the updated analysis conducted by the Compensation Committee’s compensation consultant, and Mr. Hanna’s input for the named executive officers other than himself, the Compensation Committee considered and approved the increased base salaries, due to merit and alignment with relevant market trends, for the named executive officers in 2023 and 2024, as shown in the table below.

  24. Compensation Discussion and Analysis

    | (1) Mr. Hanna’s salary was adjusted in 2023 to ensure alignment with pay levels at the Company’s compensation peer group. |

  25. Compensation Discussion and Analysis

    | (3) In 2024, market adjustments to NEO base salaries were made at the recommendation of the Company’s compensation consultant, Semler Brossy. |

  26. Compensation Discussion and Analysis

    2023 Non-Equity Performance-Based Incentive Plan Compensation The 2023 Cash Bonus Plan is comprised of two components. The first component compensates the executive officer for his or her efforts leading to the Company’s success at meeting its annual profitability goals. Annual profitability goals are measured by Adjusted EBITDA for corporate executive officers (Messrs. Hanna and Pratt and Mses. Malek and Van Trease) and for division executive officers (Mr. Hawkins). The second component measures the executive officer’s success at accomplishing his or her personal annual priorities. These two components are used to ensure an emphasis on annual profitability and to define each executive officer’s specific role with measurable goals to achieve annual and long-term increases in shareholder value. For each of our NEOs, the profitability component is weighted 75% and the personal annual priorities component is weighted 25%. Component 1—Profitability: The profitability goal for the corporate NEOs, Messrs. Hanna and Pratt and Mses. Malek and Van Trease, is based 100% on the Company’s Adjusted EBITDA. For the division NEO, Mr. Hawkins, his profitability goal is also based 100% on Adjusted EBITDA for his division. Adjusted EBITDA is calculated from results reported on the Company’s income statement, excluding one-time acquisition-related transaction costs disclosed by the Company in its annual and quarterly reports. For a reconciliation of Adjusted EBITDA to the comparable GAAP measure, please reference the Original Annual Report. We use a collaborative process between our Chief Executive Officer, Chief Financial Officer, and other executive officers to determine the annual profitability goal for each of the executive officers of the Company. The goals are then recommended to the Compensation Committee. The Compensation Committee then reviews each executive officer’s compensation history and performance before determining final levels for profitability goals. The annual profitability goals for each division and the Company are established at the beginning of each fiscal year based upon a “realistic stretch” philosophy. The Company’s management determines the potential annual financial performance for each division and the Company based on its outlook for the opportunity levels in the markets in which it operates, strategic and tactical initiatives, and other key factors and special circumstances, applying a “realistic stretch” view to what potentially can be accomplished. We expect that although it would take a significant amount of effort on the part of each individual, 100% of the target annual profitability level can be achieved for the year. We assume any amount in excess of the target annual profitability goal would be difficult to achieve without extraordinary effort or the occurrence of significant and unforeseen changes in the competitive landscape. Each executive officer has a designated percentage of base salary for the calendar year that can be earned for achieving 100% of his or her respective annual profitability goal. For 2023, based on input from Semler Brossy, and consistent with common practices in the market, the threshold for the 2023 Cash Bonus Plan is such that 90% achievement will result in 50% bonus eligibility. Achievement below 90% results in zero payout. At 110% achievement, the plan pays a maximum of two times the bonus target for profitability. Achievement and resulting bonus payouts for performance between Threshold and Target, and for performance between Target and Maximum, are determined based on straight-line interpolation.

  27. Compensation Discussion and Analysis

    | | % of Goal Achieved | % of Bonus Earned | | Below | < 90% | 0 | | Threshold | 90% | 50% | | Target | 100% | 100% | | Maximum | 110% | 200% |

  28. Compensation Discussion and Analysis

    | | | | | Adjusted EBITDA(1) | | | Individual Component(2) | | | | | | Name | 2023 Base | Target bonus as % of Base | 2023 Target Bonus $ | Wt. | % Earned | Payout $ | Wt. | % Earned | Payout $ | Total Payout $ | Total Payout as % of Target | | Joseph F. Hanna | $800,000 | 100.0% | $800,000 | 75.0% | 156.4% | $938,400 | 25.0% | 96.1% | $192,200 | $1,130,600 | 141.3% | | Keith E. Pratt | $500,000 | 60.0% | $300,000 | 75.0% | 156.4% | $351,900 | 25.0% | 100.0% | $75,000 | $426,900 | 142.3% | | Philip B. Hawkins | $380,000 | 60.0% | $228,000 | 75.0% | 180.0% | $307,800 | 25.0% | 97.8% | $55,746 | $363,546 | 159.5% | | Gilda Malek | $400,000 | 50.0% | $200,000 | 75.0% | 156.4% | $183,824 | 25.0% | 127.6% | $50,000 | $233,824 | 149.2% | | Kristina Van Trease | $330,000 | 60.0% | $198,000 | 75.0% | 156.4% | $232,254 | 25.0% | 100.0% | $49,500 | $281,754 | 142.3% |

  29. Compensation Discussion and Analysis

    | (1) Maximum payout for Adjusted EBITDA is 200% of target. |

  30. Compensation Discussion and Analysis

    | (2) Maximum payout for Individual Component is 100% of target. |

  31. Compensation Discussion and Analysis

    Under the terms of the 2023 Cash Bonus Plan, in the event of a named executive officer’s termination by the Company without cause or a resignation for good reason, which occurs prior to the end of the fiscal year, the bonus will be prorated based on the number of days such named executive officer was employed prior to such termination for the year of termination, with the bonus amount calculated as follows: (i) for the profitability component, the target bonus amount, and (ii) for the priorities component, full satisfaction of the specified priorities. In the event of a change of control, the bonus will be prorated based on the number of days the named executive officer was employed prior to the change of control, with the bonus amount calculated as follows: (i) for the profitability component, the target bonus amount, and (ii) for the priorities component, full satisfaction of the specified priorities. 2023 Goals and Results: With respect to annual profitability goals:

  32. Compensation Discussion and Analysis

    | 2023 Long-Term Equity Incentives | | | • The Company’s long-term incentive program encourages a long-term focus through the use of equity compensation, the value of which is dependent on the Company’s long-term financial performance as well as the performance of our common stock. • Each Company executive is granted a target value of long-term equity incentives, which is divided between two forms of equity vehicles. The numbers of shares granted to each NEO is equal to the target value of each vehicle divided by the closing share price of our common stock on the date of grant of ($104.26 on February 24, 2023). • In 2023, Company executives were awarded performance based restricted stock units (“PSUs”) and time-based restricted stock units (“RSUs”) • Approximately half of the executive’s long-term awards are in the form of PSUs contingent on the performance of three-year ROIC and revenue targets, emphasizing long-term financial performance. • The remaining half, consisting of time-based RSUs, support the retention of our management team and reward executives for sustained share price appreciation. | |

  33. Compensation Discussion and Analysis

    Note: Mr. Hanna, our CEO, received 63% of his equity in 2023 in the form of PSUs, with the remaining 37% in the form of time-based RSUs, placing a majority of his equity compensation “at-risk”. Ms. Malek was hired on March 21, 2023, and was granted RSUs on March 31, 2023, with a grant date fair value of $400,300. She did not receive any PSUs in 2023. 2023 Long-Term Incentive Compensation Equity Grants

  34. Compensation Discussion and Analysis

    | | Target LTI $ | Performance-Vested RSUs | | | Time-Vested RSUs | | | | Name | | % of Target LTI | # of Units Granted | $ Value | % of Target LTI | # of Units Granted | $ Value | | Joseph F. Hanna | $2,700,000 | 63% | 16,310 | $1,700,000 | 37% | 9,590 | $1,000,000 | | Keith E. Pratt | $750,000 | 50% | 3,600 | $375,000 | 50% | 3,600 | $375,000 | | Philip B. Hawkins | $410,000 | 50% | 1,970 | $205,000 | 50% | 1,970 | $205,000 | | Gilda Malek(1) | $400,000 | — | — | — | 100% | 4,290 | $400,000 | | Kristina Van Trease | $320,000 | 50% | 1,530 | $160,000 | 50% | 1,530 | $160,000 |

  35. Compensation Discussion and Analysis

    | (1) Ms. Malek was hired in 2023. The target LTI dollar value and grants shown in the table above reflect the value of her new hire award. Ms. Malek’s annualized target LTI was $400,000. |

  36. Compensation Discussion and Analysis

    Performance-Based Restricted Stock Units (“PSUs”): PSUs granted in 2023 are earned based upon achievement of a three-year corporate ROIC target (for corporate executive officers; division specific ROIC targets for divisional executive officers) and a revenue target, each weighed equally. Having each divisional officer’s performance tied directly to his or her respective division’s performance allows for that officer to be measured with diminished influence, positive or negative, of any other division’s performance. With respect to the ROIC and revenue targets, the awards have at least a 50% payout for threshold achievement, 100% payouts for target achievement and 200% payouts for maximum achievement, with linear interpolation between performance levels. If performance is below threshold, no payout is delivered. The PSUs cliff vest following the completion of the three-year performance period, subject to continued service and achievement of the performance goals. Restricted Stock Units (“RSUs”): The 2023 time-based RSUs vest in three annual installments over three years based on the continued service of the executive. 2021-2023 PSU Achievement

  37. Compensation Discussion and Analysis

    | Name | 2021-2023 Actual Performance | 2021-2023 Target PSUs | 2021-2023 PSUs Earned | | Joseph F. Hanna(1) | 200% | 8,020 | 16,040 | | Keith E. Pratt | 200% | 3,050 | 6,100 | | Philip B. Hawkins | 200% | 1,920 | 3,840 | | Gilda Malek(2) | — | — | — | | Kristina Van Trease(3) | — | — | — |

  38. Compensation Discussion and Analysis

    | (1) Mr. Hanna’s 2023 PSU award received a higher weighting of PSUs. |

  39. Compensation Discussion and Analysis

    | (2) Ms. Malek was hired on March 21, 2023, and did not receive 2021 PSUs. |

  40. Compensation Discussion and Analysis

    | (3) Ms. Van Trease’s 2021 PSU awards were forfeited as a result of the Adler Tank Rentals divestiture on February 1, 2023. |

  41. Compensation Discussion and Analysis

    2024 McGrath Equity Awards In past years, including in calendar year 2023, the Compensation Committee approved long-term incentive compensation awards for the Company’s executive officers that have 50% of the equity value granted as performance-based RSUs, vesting at the end of each three-year performance period, and 50% of the equity value granted as service-based RSUs vesting over three years. In December 2023, prior to the signing of the Merger Agreement, the Compensation Committee had preliminarily approved the amount of long-term incentive compensation awards for the Company’s executive officers for calendar year 2024, without specifying the form of such long-term incentive compensation awards. In connection with the transactions contemplated by the Merger Agreement, the Company and WillScot agreed that long-term incentive compensation awards granted in February 2024 would be granted 100% in the form of service-based RSUs, as opposed to the Company’s historic practice of granting awards 50% in the form of performance-based RSUs, due to the impracticality of setting and measuring long-term Company performance goals during the then pending transaction. Accordingly, on February 23, 2024, the Compensation Committee granted long-term incentive compensation awards 100% in the form of service-vesting RSU awards to each of its executive officers that vest 33% on the first anniversary of the grant date, 33% on the second anniversary of the grant date and 34% on the third anniversary of the grant date. If the employment of any of the Company’s executive officers is terminated without cause or the executive officer resigns for good reason within 12 months after a change in control transaction (as defined in the award agreement), subject to a release of claims, all of such executive officer’s service-vesting RSUs granted on February 23, 2024 would accelerate and vest upon such termination of employment. The Compensation Committee intends to generally revert to its historical approach on equity grants to executive officers subsequent to termination of the Merger Agreement and the Company continuing to operate as a standalone company. Executive Officer Stock Ownership and Stock Holdback Guidelines The Board of Directors believes that, in order to better align the interests of management and shareholders, executive officers should have a significant financial (equity) stake in the Company. Each executive officer has a target level of Company Common Stock value to achieve within seven (7) years of his or her date of hire. The target level of Common Stock value to be achieved is a multiple of each executive officer’s base salary. The multiples of executive officer base salary are four (4) times for the Chief Executive Officer and two (2) times for all other executive officer positions. In evaluating whether the Common Stock value ownership guideline has been met, all shares of Common Stock owned, in the McGrath RentCorp Employee Stock Ownership and 401(k) Plan (“KSOP”) shares and 50% of the value (market price less strike price) of all vested unexercised stock options are considered. The Board of Directors evaluates whether exceptions should be made for any executive officer on whom this requirement would impose a financial hardship. It is the Company’s policy that each executive officer has a 10% holdback provision for RSU equity grant settlements to facilitate earlier achievement of stock ownership under the Company’s stock ownership guidelines. Equity Granting Policy In 2007, the Board of Directors adopted an equity granting methodology whereby there is one annual equity grant date, which is the date when the blackout window opens after the year-end earnings are released. All designated non-employee directors, executive officers, and key employees are eligible to receive an equity grant on the annual equity grant date with an exercise price (for stock options or SARs) or grant price (for RSUs), equal to the NASDAQ Stock Market close price on that day. The Board of Directors may authorize the Chief Executive Officer an additional allotment of options or shares to be granted at his discretion to new hires and promotion candidates, other than executive officers, over the course of a given time frame, with the grant date and exercise or grant price based on the last trading day of each month of the employment event. This allotment is not available to executive officers, as all grants to executive officers must be made by the Compensation Committee. Compensation Recoupment Policy In 2011, the Board of Directors adopted a Compensation Recoupment Policy that applies to executive officers if the Company is required to restate its financial statements. The Board believes it is desirable and in the best interests of the Company and its shareholders to maintain and enhance a culture that is focused on integrity and accountability and believes that this policy discourages conduct detrimental to the Company’s sustained growth. In 2023, the Board of Directors adopted the Company’s Amended and Restated Compensation Recoupment Policy (the “Policy”) in accordance with the NASDAQ Stock Market listing standards and Rule 10D-1 under the Exchange Act. The Policy requires any current or former executive officer, in the event of a financial restatement, to reimburse the Company with respect to any incentive compensation (including cash and equity awards) received during the past three years that is in excess of that which would have been received if such compensation had been based upon the financial statements as so restated. The Policy is posted on our website at www.mgrc.com under the Investors/Corporate Governance section. Risk-Hedging Policies Pursuant to the Company’s Insider Trading and Blackout Policy, officers and directors of the Company are prohibited from engaging in short-term or speculative securities transactions with respect to the Company’s Common Stock. These prohibited transactions can have the effect of reducing or canceling the risk of an investment in the Common Stock, particularly in the short-term. These prohibited transactions may create the appearance that the executives are trading on inside information. Additionally, certain forms of hedging or monetization transactions allow a shareholder to lock in much of the value of his or her stock holdings, often in exchange for all or part of the potential for upside appreciation in the stock. These transactions allow the holder to continue to own the covered securities but without full risks and rewards of ownership. Therefore, Company personnel are also specifically prohibited from engaging in short sales, hedging transactions, buying or selling puts or calls, buying any of the Company’s securities on margin, pledging transactions, and engaging in derivative transactions related to the Company’s securities (such as exchange-traded options). The Company’s Insider Trading Policy further provides that Company personnel who purchase or sell Company securities in the open market may not correspondingly sell or purchase any Company securities of the same class during the six months following the purchase. The Insider Trading Policy is posted on our website at www.mgrc.com under the Investors/Corporate Governance section.

  42. Change in Control Arrangements

    Change in Control Arrangements The Company maintains a “Change in Control Severance Plan” for our CEO and CFO. The Change in Control Severance Plan as approved in 2013, contained an initial two-year term with no automatic renewal, though the Board of Directors and the Compensation Committee has renewed it since that time and most recently made changes to the Plan in February 2022. The Compensation Committee adopted the Change in Control Severance Plan to help ensure appropriate behavior by individuals in key management roles in evaluating, presenting, and acting upon change in control opportunities involving the Company that may arise. The Compensation Committee believes that maintaining this Change in Control Severance Plan is in the best interests of shareholders in helping to ensure (a) the individuals in those management roles most likely to influence a change in control opportunity are appropriately incentivized to act in the best interests of shareholders; (b) continuity of management before and during an impending transaction, or the need for continuity in management after a change in control; and (c) the Company’s continuing ability to attract talented senior management members, as well as to avoid executives departing due to limited or no remuneration protections in the event of a change in control transaction. Further, the Compensation Committee believes that stable corporate leadership exhibiting the desired management behaviors is imperative for shareholders to be in a position to realize a favorable premium in the potential sale of the Company. Under the Change in Control Severance Plan, each of Messrs. Hanna and Pratt is entitled to severance payments and termination benefits upon a termination of their employment that is a qualifying termination under the Change in Control Severance Plan. Under the Change in Control Severance Plan, if Messrs. Hanna’s or Pratt’s employment is terminated without cause or for good reason within 12 months following a change in control, subject to a release of claims, they are entitled to: (i) two times annual base salary; (ii) two times target bonus for the year of termination; (c) medical benefits under COBRA for up to 24 months for Mr. Hanna and 12 months for Mr. Pratt; (d) outplacement assistance in accordance with the applicable McGrath policies and guidelines in effect immediately prior to termination of employment; and (e) full acceleration and vesting of any and all equity awards. The Change in Control Severance Plan does not provide for a tax gross-up.

  43. Involuntary Termination Severance Plan for Officers

    Involuntary Termination Severance Plan for Officers The Compensation Committee established a formal Involuntary Termination Severance Plan for Officers (the “Severance Plan”) to address involuntary termination severance eligibility and payments for executive officer-level positions. The Compensation Committee believes that maintaining this Severance Plan is in the best interests of shareholders in helping to ensure the Company’s continuing ability to attract and retain talented senior executives. For the fiscal year ended December 31, 2023, all of our NEOs have been selected by the Compensation Committee to be covered by the Severance Plan. Under the Severance Plan, upon a termination by the Company without cause prior to a change in control or after 12 months following a change in control, subject to a release of claims, our NEOs are entitled to the following severance benefits: (a) for Messrs. Hanna and Pratt, a severance payment of up to the equivalent of 12 months of base salary, and for other NEOs, a severance payment of up to the equivalent of 6 months of base salary, (b) medical benefits under COBRA for up to 12 months, and (c) outplacement assistance in accordance with the applicable Company policies and guidelines in effect immediately prior to termination of employment. In the cases of Messrs. Hanna and Pratt, if they are eligible to receive severance benefits under the Change in Control Severance Plan, they would not also be eligible to receive severance benefits under the Severance Plan, but would instead receive the benefits described under Change in Control Severance Plan above. Under the Severance Plan, upon a termination by the Company without cause or a resignation for good reason within 12 months after a change in control, subject to a release of claims, each NEO other than Messrs. Hanna and Pratt are entitled to receive (a) a severance payment of up to the equivalent of 6 months of base salary, (b) medical benefits under COBRA for up to 12 months, (c) full acceleration and vesting of any and all equity awards, and (d) outplacement assistance in accordance with the applicable Company policies and guidelines in effect immediately prior to termination of employment. The Severance Plan does not provide for a tax gross-up. In addition, the Company’s annual cash bonus plan for executive officers generally provides that upon such executive officer’s termination of employment without cause or resignation for good reason, which occurs prior to the end of the plan term, such executive officer would receive a pro-rated bonus based on the number of days of employment prior to such termination for the plan year, with the bonus amount calculated based on full satisfaction of the target components under the plan. If an executive officer’s employment is terminated without cause or an executive officer resigns for good reason in the middle of a plan year, such executive officer would be entitled to a pro-rated annual bonus for the year of termination.

  44. Tax and Accounting Implications

    Tax and Accounting Implications Deductibility of Executive Compensation Section 162(m) of the Code generally limits our corporate tax deduction for compensation paid to certain executive officers to $1 million per year. Prior to December 22, 2017, when the Tax Cuts and Jobs Act of 2017 (“TCJA”) was signed into law, this limitation did not apply to compensation that qualified as “performance-based” compensation under Section 162(m) of the Code. Under the TCJA, this “performance-based” exception was repealed for taxable years beginning after December 31, 2017, except with respect to certain “grandfathered” compensation. The Compensation Committee intends to maximize our ability to deduct executive compensation for tax purposes to the extent structuring our executive compensation for tax purposes is in alignment with our compensation philosophy. The Compensation Committee nonetheless reserves the right to use its judgment to authorize compensation payments that may not be deductible when the committee believes that such payments are appropriate and in the best interests of our shareholders, after taking into account changing business conditions or the executive officer’s performance. Accounting for Stock-Based Compensation We accrue our named executive officers’ salaries and incentive awards as an expense when earned. For our stock-based compensation, the Financial Accounting Standards Board’s Accounting Standards Codification Topic 718, Compensation—Stock Compensation (“ASC 718”), requires us to recognize compensation expense within our income statement for all share-based payment arrangements, which includes employee stock option plans. The expense is based on the grant-date fair value of the equity award granted and is recognized ratably over the requisite service period. The Compensation Committee considers the expense of equity awards as part of its overall evaluation of our equity compensation program.

  45. Compensation Policies and Practices and Risk Management

    | • | A Balanced Mix of Compensation Components—The target compensation mix for our executive officers is composed of base salary, annual cash bonus incentives, and long-term equity awards. |

  46. Compensation Policies and Practices and Risk Management

    | • | Different Performance Metrics—We generally use different performance metrics between our cash bonus and performance RSU programs, providing a balance and mitigating against the potential for undue risk in meeting a single goal. |

  47. Compensation Policies and Practices and Risk Management

    | • | Realistic Performance Goals—Financial performance goals in our performance-based incentive plans are set at levels that are intended to be attainable without the need to take inappropriate risks. |

  48. Compensation Policies and Practices and Risk Management

    | • | Capped Incentive Awards—Payouts for both the annual cash bonus incentive awards and our performance RSUs are capped for our executive officers. |

  49. Compensation Policies and Practices and Risk Management

    | • | Multi-Year Vesting—Equity awards vest over multiple years, requiring long-term commitment on the part of employees. |

  50. Compensation Policies and Practices and Risk Management

    | • | Competitive Positioning—The Compensation Committee considers our executive compensation program structure and levels relative to our peers. The Compensation Committee generally targets total compensation to be in a market competitive range relative to our peer group and compensation survey data. |

  51. Summary Compensation Table

    Summary Compensation Table The following table provides summary information concerning the compensation earned during the fiscal years ended December 31, 2023, December 31, 2022, and December 31, 2021, by each of our named executive officers.

  52. Summary Compensation Table(1)

    Summary Compensation Table(1)

  53. Summary Compensation Table(1)

    | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | | Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(2) | Option Awards ($)(2) | Non-Equity Incentive Plan Compensation ($)(3) | Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($)(4) | Total ($) | | Joseph F. Hanna | 2023 | $800,000 | — | $2,700,334 | — | $1,130,600 | — | $140,964 | $4,771,898 | | President and Chief Executive Officer | 2022 | $700,000 | — | $1,350,376 | — | $965,913 | — | $104,878 | $3,121,167 | | | 2021 | $663,344 | — | $1,875,010 | — | $580,509 | — | $142,817 | $3,261,680 | | Keith E. Pratt | 2023 | $500,000 | — | $750,672 | — | $426,900 | — | $61,931 | $1,739,503 | | Executive Vice President, Chief Financial Officer and Assistant Corporate Secretary | 2022 | $480,000 | — | $524,876 | — | $385,248 | — | $43,993 | $1,434,117 | | | 2021 | $465,619 | — | $523,045 | — | $256,742 | — | $70,621 | $1,316,027 | | Philip B. Hawkins | 2023 | $380,000 | — | $410,784 | — | $363,546 | — | $43,613 | $1,197,943 | | Senior Vice President and Division Manager, Mobile Modular | 2022 | $350,000 | — | $325,000 | — | $209,167 | — | $30,999 | $915,166 | | | 2021 | $317,723 | — | $366,677 | — | $165,180 | — | $48,228 | $897,808 | | Gilda Malek(5) | 2023 | $313,425 | — | $400,300 | — | $233,823 | — | — | $947,548 | | Vice President, General Counsel and Corporate Secretary | 2022 | — | — | — | — | — | — | — | — | | | 2021 | — | — | — | — | — | — | — | — | | Kristina Van Trease | 2023 | $330,000 | — | $479,596 | — | $281,754 | — | $23,650 | $1,115,000 | | Senior Vice President, Chief Strategy Officer | 2022 | $316,000 | — | $255,126 | — | $258,749 | — | $27,518 | $857,393 | | | 2021 | $286,893 | — | $228,082 | — | $131,259 | — | $27,586 | $673,820 |

  54. Summary Compensation Table(1)

    | (1) Amounts disclosed in this and other tables may minimally vary from amounts presented within the CD&A narrative due to rounding to the nearest dollar for tabular purposes. |

  55. Summary Compensation Table(1)

    | (2) The amounts in columns (e) and (f) reflect the aggregate grant date fair value amounts, in accordance with ASC the 718, of awards granted pursuant to the 2016 Plan. RSUs were granted to our NEOs on February 24, 2023, with a grant date fair value of $999,853 for Mr. Hanna; $375,336 for Mr. Pratt; $205,392 for Mr. Hawkins; and $320,078 for Ms. Van Trease. Ms. Malek was hired on March 21, 2023, and was granted RSUs on March 31, 2023, with a grant date fair value of $400,300. The grant date fair value of each RSU granted to the NEOs, except for Ms. Malek, is equal to the closing share price of our common stock on the date of grant of $104.26. The grant date fair value of the RSUs granted to Ms. Malek is equal to the closing share price of our common stock on the grant date of March 31, 2023, of $93.31. The PSUs were granted to our NEOs on February 24, 2023, with a grant date fair value of $1,700,481 for Mr. Hanna; $375,336 for Mr. Pratt; $205,392 for Mr. Hawkins; and $159,518 for Ms. Van Trease, based on target level of performance. Ms. Malek did not receive PSUs in 2023. If the maximum level of performance were achieved, each NEO would earn 200% of the target number of PSUs awarded. Based on the closing price of our common stock on the grant date, the maximum value of the PSUs awarded to each NEO is as follows: Mr. Hanna — $3,400,961; Mr. Pratt — $750,672; Mr. Hawkins — $410,784; and Ms. Van Trease — $319,036. Assumptions used in the calculation of these amounts are included in the notes of the Company’s audited financial statements for the fiscal year ended December 31, 2023, included in the 2023 Annual Report. These amounts reflect the Company’s accounting expense and do not correspond to the actual value that may be realized by the named executive officers. |

  56. Summary Compensation Table(1)

    | (3) The amounts in column (g) reflect amounts earned by the named executive officers during the fiscal year ended December 31, 2023, and paid in 2024 pursuant to the Cash Bonus Plan. See “Non-Equity Performance-Based Incentive Plan Compensation” in this Proxy Statement for additional detail. |

  57. Summary Compensation Table(1)

    | (4) The amounts in column (i) reflect the cash contributions allocated to each named executive officer pursuant to the provisions of the Company’s Employee Stock Ownership and 401(k) Plan and dividend equivalent payouts for vested RSUs and PSUs that were not factored into the grant date fair values of such RSUs and PSUs. The table below details the amounts paid to each named executive officer. |

  58. Summary Compensation Table(1)

    | (5) Ms. Malek was hired by the Company effective March 21, 2023. |

  59. Summary Compensation Table(1)

    | Name | Year | Employee Stock Ownership and 401(k) Plan Cash Contribution ($) | RSU and PSU Dividend Payments ($) | Total ($) | | Joseph F. Hanna | 2023 | $13,200 | $127,764 | $140,964 | | | 2022 | $12,200 | $92,678 | $104,878 | | | 2021 | $11,600 | $131,217 | $142,817 | | Keith E. Pratt | 2023 | $13,200 | $48,731 | $61,931 | | | 2022 | $12,200 | $31,793 | $70,621 | | | 2021 | $11,600 | $59,021 | $73,929 | | Philip B. Hawkins | 2023 | $13,200 | $30,413 | $43,613 | | | 2022 | $12,200 | $18,799 | $30,999 | | | 2021 | $11,600 | $36,628 | $48,228 | | Gilda Malek | 2023 | — | — | — | | | 2022 | — | — | — | | | 2021 | — | — | — | | Kristina Van Trease | 2023 | $13,200 | $10,450 | $23,650 | | | 2022 | $12,200 | $15,318 | $27,518 | | | 2021 | $11,600 | $15,986 | $27,586 |

  60. 2023 GRANTS OF PLAN-BASED AWARDS

    2023 GRANTS OF PLAN-BASED AWARDS

  61. 2023 GRANTS OF PLAN-BASED AWARDS

    | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards (2) | | | All Other Stock Awards: Number of Shares of Stock or Units (#) (3) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards (4) | | Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | | | Joseph F. Hanna | | $500,000 | $800,000 | $1,400,000 | — | — | — | — | — | — | — | | | 2/24/2023 | — | — | — | 8,155 | 16,310 | 32,620 | 9,590 | — | — | $2,700,334 | | Keith E. Pratt | | $187,500 | $300,000 | $525,000 | — | — | — | — | — | — | — | | | 2/24/2023 | — | — | — | 1,800 | 3,600 | 7,200 | 3,600 | — | — | $750,672 | | Philip B. Hawkins | | $142,500 | $228,000 | $399,000 | — | — | — | — | — | — | — | | | 2/24/2023 | — | — | — | 985 | 1970 | 3,940 | 1,970 | — | — | $410,784 | | Gilda Malek | | $125,000 | $200,000 | $350,000 | — | — | — | — | — | — | — | | | 3/31/2023 | — | — | — | — | — | — | 4,290 | — | — | $400,300 | | Kristina Van Trease | | $123,750 | $198,000 | $346,500 | — | — | — | — | — | — | — | | | 2/24/2023 2/24/2023 | — | — | — | 765 | 1,530 | 3,060 | 1,530 1,540 | — | — | $479,596 |

  62. 2023 GRANTS OF PLAN-BASED AWARDS

    | (1) The amounts listed in these columns reflect the threshold, target and maximum amounts payable to the named executive officers pursuant to the Cash Bonus Plan. See “Non-Equity Performance-Based Incentive Plan Compensation” for additional detail. The threshold assumptions assume achieving 90% of the profitability target and no achievement of the personal annual priorities. |

  63. 2023 GRANTS OF PLAN-BASED AWARDS

    | (2) Each named executive officer received a grant of PSUs which are subject to a performance-based vesting component at the end of a three-year performance period, except for Ms. Malek, who did not receive any performance-based RSUs for 2023. Unless earlier forfeited under the terms of the PSUs, each PSU vests and converts into no less than 50% and no more than 200% of one share of Common Stock. The PSUs vest 100% at the end of the three-year performance period if the performance goal is satisfied. |

  64. 2023 GRANTS OF PLAN-BASED AWARDS

    | (3) On February 24, 2023, each named executive officer, except for Ms. Malek, who received her grant on March 31, 2023, received a grant of time-based RSUs that vest 33% on each anniversary of the grant date until fully vested. Each unit represents a right to receive one share of Common Stock or an amount equal to the fair market value of the Common Stock underlying the unit on the vesting date. Ms. Van Trease received an additional time-based RSU grant on February 24, 2023 of 1,540 shares to replace the February 25, 2021 PSU grant that was forfeited due to the sale of Adler Tank Rentals on February 1, 2023. |

  65. 2023 GRANTS OF PLAN-BASED AWARDS

    | (4) The amounts listed in this column reflect the maximum amount payable to the named executive officers under the terms of the PSUs. Each PSU vests and converts into no less than 50% and no more than 200% of one share of the Company’s common stock amounts payable to the named executive officers. The amounts in the table above reflect the probable performance outcome of a maximum payout of 200%. See “Long-Term Incentive Compensation” for additional detail. |

  66. 2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

    2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

  67. 2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

    | | Option Awards | | | | | Stock Awards | | | | | | Number of Securities Underlying Unexercised Options (#) | Number of Securities Underlying Unexercised Options (#) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | | | Exercisable | Unexercisable | | | | | | | | | Joseph F. Hanna | — | — | — | — | — | 2,674(1) | $319,864 | 8,310(4) | $994,042 | | | | | | | | 16,040(2) | $1,918,705 | 16,310(6) | $1,951,002 | | | | | | | | 5,541(3) | $662,814 | | | | | | | | | | 9,590(5) | $1,147,156 | | | | Keith E. Pratt | — | — | — | — | — | 1,017(1) | $121,654 | 3,230(4) | $386,373 | | | | | | | | 6,100(2) | $729,682 | 3,600(6) | $430,632 | | | | | | | | 2,154(3) | $257,661 | | | | | | | | | | 3,600(5) | $430,632 | | | | Philip B. Hawkins | — | — | — | — | — | 641(1) | $76,676 | 2,000(4) | $239,240 | | | | | | | | 3,840(2) | $459,341 | 1,970(6) | $235,651 | | | | | | | | 1,334(3) | $159,573 | | | | | | | | | | 1,970(5) | $235,651 | | | | Gilda Malek | — | — | — | — | — | 4,290(5) | $513,170 | — | — | | Kristina Van Trease | — | — | — | — | — | 514(1) | $61,485 | 1,570(4) | $187,803 | | | | | | | | 1,047(3) | $125,242 | 1,530(6) | $183,019 | | | | | | | | 1,530(5) | $183,019 | | | | | | | | | | 1,540(7) | $184,215 | | |

  68. 2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

    | 1) | Represents RSUs granted on February 25, 2021, with 33% vesting on the first annual anniversary of the grant; 33% vesting on the second annual anniversary of the grant; and 34% vesting on the third annual anniversary of the grant. Each RSU represents a right to receive one share of common stock or an amount equal to the fair market value of the Company’s common stock underlying the unit on the vesting date, with vesting dates of 2/25/22, 2/25/23, and 2/25/24. |

  69. 2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

    | 2) | Represents PSUs granted on February 25, 2021, which have been earned at 200% of target as a result of achieving the performance conditions at maximum level during the three-year performance period ending on December 31, 2023, which PSUs remained subject to time-based vesting conditions and vested on February 25, 2024. |

  70. 2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

    | 3) | Represents RSUs granted on February 25, 2022, with 33% vesting on the first annual anniversary of the grant; 33% vesting on the second annual anniversary of the grant; and 34% vesting on the third annual anniversary of the grant. Each RSU represents a right to receive one share of the Company’s common stock or an amount equal to the fair market value of the Company’s common stock underlying the unit on the vesting date, with vesting dates of 2/25/23, 2/25/24, and 2/25/25. |

  71. 2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

    | 4) | Represents PSUs granted on February 25, 2022 that are subject to a performance-based vesting component at the end of a three-year performance period. Unless earlier forfeited under the terms of the PSUs, each PSU vests and converts into no less than 50% and no more than 200% of one share of the Company’s common stock. The PSUs vest 100% at the end of the three-year performance period if the performance goal is satisfied, with a vesting date of 2/25/25. |

  72. 2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

    | 5) | Represents RSUs granted on February 24, 2023, with 33% vesting on the first annual anniversary of the grant; 33% vesting on the second annual anniversary of the grant; and 34% vesting on the third annual anniversary of the grant. Each RSU represents a right to receive one share of the Company’s common stock or an amount equal to the fair market value of the Company’s common stock underlying the unit on the vesting date, with vesting dates of 2/24/24, 2/24/25, and 2/24/26. Except for Ms. Malek who received her RSU grant on March 31, 2023 with vesting dates of 3/31/24, 3/31/25, and 3/31/26. |

  73. 2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

    | 6) | Represents PSUs granted on February 24, 2023 that are subject to a performance-based vesting component at the end of a three-year performance period. Unless earlier forfeited under the terms of the PSUs, each PSU vests and converts into no less than 50% and no more than 200% of one share of the Company’s common stock. The PSUs vest 100% at the end of the three-year performance period if the performance goal is satisfied, with a vesting date of 2/24/26. |

  74. 2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

    | 7) | Represents RSUs granted on February 24, 2023, 100% of which vest on the first annual anniversary of the grant. Each RSU represents a right to receive one share of the Company’s common stock or an amount equal to the fair market value of the Company’s common stock underlying the unit on the vesting date, with a vesting date of 2/24/24. |

  75. 2023 OPTION EXERCISES AND STOCK VESTED

    2023 OPTION EXERCISES AND STOCK VESTED

  76. 2023 OPTION EXERCISES AND STOCK VESTED

    | | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) (1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | | Joseph F. Hanna | 56,000 | $3,721,760 | 22,268 | $2,269,191 | | Keith E. Pratt | 16,000 | $1,058,880 | 7,160 | $729,404 | | Philip B. Hawkins | 5,280 | $351,067 | 4,259 | $433,991 | | Gilda Malek | — | $— | — | $— | | Kristina Van Trease | 5,845 | $373,729 | 3,458 | $352,317 |

  77. 2023 OPTION EXERCISES AND STOCK VESTED

    | (1) The “value realized on exercise” represents the number of shares of Common Stock acquired on exercise of the applicable option multiplied by the NASDAQ Stock Market close price of our Common Stock on the applicable date of exercise, less the number of shares of the Company’s common stock acquired on exercise of the option multiplied by the exercise price of the option. |

  78. Potential Payments upon Termination or Change-in-Control

    Potential Payments upon Termination or Change-in-Control Pursuant to the terms of the agreements for the McGrath PSU awards granted during the 2022 calendar year (each, a “2022 PSU”), in the event of a change in control of the Company and such event occurs prior to the end of the three-year performance period, at the effective time of such change-in-control event, each outstanding 2022 PSU would accelerate and be deemed earned based on the McGrath Board’s good faith best estimate of projected actual performance through the end of the performance period. Assuming a change in control of the Company occurred on December 31, 2023, based on a closing NASDAQ Stock Market price of $119.62 per share on December 29, 2023, the value of the 2022 PSUs that each NEO would be entitled to is shown in the table below. The acceleration and vesting of a portion of the 2022 PSUs occurs on a change in control and is not contingent on an NEO’s termination of employment. Pursuant to the terms of the agreements for the McGrath PSU awards granted during the 2023 calendar year (each, a “2023 PSU”), in the event of a change in control of the Company and such event occurs prior to the end of the three-year performance period, a prorated portion of the 2023 PSUs would vest assuming target performance is achieved, with the prorated portion determined based on the number of days elapsed between the grant date and the change in control event. Assuming a change in control occurred on December 31, 2023, based on a closing NASDAQ Stock Market price of $119.62 per share on December 29, 2023, the value of the 2023 PSUs that each NEO would be entitled to is shown in the table below. The acceleration and prorated vesting of a portion of the 2023 PSUs occurs on a change in control and is not contingent on an NEO’s termination of employment.

  79. Potential Payments upon Termination or Change-in-Control

    | | 2022 PSUs | | 2023 PSUs | | | Name | Number of PSUs | Value of PSUs | Number of PSUs | Value of PSUs | | Joseph F. Hanna | 16,620 | $1,988,084 | 4,617 | $552,328 | | Keith E. Pratt | 6,460 | $772,745 | 1,019 | $121,911 | | Philip B. Hawkins | 4,000 | $478,480 | 557 | $66,712 | | Gilda Malek(1) | — | $— | — | $— | | Kristina Van Trease | 3,140 | $375,607 | 433 | $51,812 |

  80. Potential Payments upon Termination or Change-in-Control

    | (1) Ms. Malek was hired on March 21, 2023 and therefore not granted PSUs in 2022 or 2023. |

  81. Potential Payments upon Termination or Change-in-Control

    Under the terms of our Cash Bonus Plan, the 2016 Stock Incentive Plan and related equity award agreements and KSOP, as well as our Change in Control Severance Plan and Involuntary Termination Severance Plan for Officers, payments may be made to each of our named executive officers upon his or her termination of employment or a change in control (as defined in each plan) of the Company. See “Compensation Discussion and Analysis” and “Equity Compensation Plan Information” for a description of, and an explanation of, the specific circumstances that would trigger payments under each plan, agreement, or policy. The following table sets forth the estimated payments that would be made to each of our named executive officers upon voluntary termination, including termination for good reason, termination not for cause, termination for cause, termination in connection with a change in control, and termination due to death or permanent disability. The payments would be made pursuant to the plans, agreements, or Company policies identified in the preceding paragraph. The information set forth in the table below assumes the termination event occurred on December 31, 2023. The actual amounts to be paid out can only be determined at the time of an executive’s separation from the Company and may differ materially from the amounts set forth in the table below. The amounts set forth in the table below do not reflect the withholding of applicable state and federal taxes.

  82. Potential Payments upon Termination or Change-in-Control

    | Name | Voluntary Resignation for Good Reason ($) | Involuntary Termination | | Termination Without Cause or Resignation for Good Reason & Change in Control(3) ($) | Retirement, Death, Permanent Disability, or Resignation Without Good Reason ($) | | | | Without Cause(1) ($) | For Cause ($) | | | | Joseph F. Hanna | | | | | | | Non-Equity Incentive Plan | 800,000 | 800,000 | 0 | 800,000 | 0 | | Accelerated Awards Under Equity Incentive Plans(2) | 0 | 0 | 0 | 6,588,962 | 0 | | Cash Severance | 0 | 800,000 | 0 | 3,200,000 | 0 | | Continuation of Medical Benefits Under COBRA (present value) | 0 | 22,354 | 0 | 44,708 | 0 | | Reasonable Outplacement Assistance | 0 | 15,000 | 0 | 15,000 | 0 | | Total | 800,000 | 1,637,354 | 0 | 9,848,670 | 0 | | Keith E. Pratt | | | | | | | Non-Equity Incentive Plan | 300,000 | 300,000 | 0 | 300,000 | 0 | | Accelerated Awards Under Equity Incentive Plans(2) | 0 | 0 | 0 | 2,434,288 | 0 | | Cash Severance | 0 | 500,000 | 0 | 1,600,000 | 0 | | Continuation of Medical Benefits Under COBRA (present value) | 0 | 34,088 | 0 | 34,088 | 0 | | Reasonable Outplacement Assistance | 0 | 15,000 | 0 | 15,000 | 0 | | Total | 300,000 | 849,088 | 0 | 4,083,376 | 0 | | Philip B. Hawkins | | | | | | | Non-Equity Incentive Plan | 228,000 | 228,000 | 0 | 228,000 | 0 | | Accelerated Awards Under Equity Incentive Plans(2) | 0 | 0 | 0 | 1,476,436 | 0 | | Cash Severance | 0 | 190,000 | 0 | 190,000 | 0 | | Continuation of Medical Benefits Under COBRA (present value) | 0 | 31,922 | 0 | 31,922 | 0 | | Reasonable Outplacement Assistance | 0 | 7,500 | 0 | 7,500 | 0 | | Total | 228,000 | 457,422 | 0 | 1,933,858 | 0 | | Gilda Malek | | | | | | | Non-Equity Incentive Plan | 200,000 | 200,000 | 0 | 200,000 | 0 | | Accelerated Awards Under Equity Incentive Plans(2) | 0 | 0 | 0 | 513,170 | 0 | | Cash Severance | 0 | 200,000 | 0 | 200,000 | 0 | | Continuation of Medical Benefits Under COBRA (present value) | 0 | 21,427 | 0 | 21,427 | 0 | | Reasonable Outplacement Assistance | 0 | 7,500 | 0 | 7,500 | 0 | | Total | 200,000 | 428,927 | 0 | 942,097 | 0 | | Kristina Van Trease | | | | | | | Non-Equity Incentive Plan | 198,000 | 198,000 | 0 | 198,000 | 0 | | Accelerated Awards Under Equity Incentive Plans(2) | 0 | 0 | 0 | 981,381 | 0 | | Cash Severance | 0 | 165,000 | 0 | 165,000 | 0 | | Continuation of Medical Benefits Under COBRA (present value) | 0 | — | 0 | — | 0 | | Reasonable Outplacement Assistance | 0 | 7,500 | 0 | 7,500 | 0 | | Total | 198,000 | 370,500 | 0 | 351,881 | 0 |

  83. Potential Payments upon Termination or Change-in-Control

    | (1) Represents the severance payments and benefits that the NEOs would be entitled to if a termination without cause occurs prior to or after 12 months following a change in control under the Severance Plan including (i) one year of base salary for Messrs. Hanna and Pratt and six months of base salary for Mr. Hawkins and Mses. Malek and Van Trease, (ii) 12 months of COBRA coverage payable to the NEOs (and the NEO’s spouse and dependents, as applicable) and (iii) reasonable outplacement assistance. In addition, upon a termination without cause, under the 2023 Cash Bonus Plan, each NEO would be entitled to payment of the target bonus amount pro-rated based on the date of termination. There would not be any acceleration of equity awards if a termination without cause occurs prior to or after 12 months following a change in control. |

  84. Potential Payments upon Termination or Change-in-Control

    | (2) Assumes termination on the last day of the calendar year, with a closing NASDAQ Stock Market price of $119.62 per share on December 29, 2023. Under the Change in Control Severance Plan and the Severance Plan, as applicable, if a termination of employment without cause or a resignation for good reason within 12 months of a change in control of the Company, all unvested equity awards held by the NEOs would become fully vested. In addition, the award agreements for PSUs granted in 2023 provide for prorated vesting assuming target level of performance based on the number of days elapsed between the grant date and a change in control. For the 2023 PSUs only, the prorated vesting of a portion of the PSUs occurs on a change in control and is not contingent on an NEO’s termination of employment. For each NEO, the amount included represents (i) the value of 100% of their unvested RSUs, (ii) the value of 200% of their unvested 2021 PSUs based on actual performance for the performance period; and for the 2022 PSUs assuming performance is achieved at the Board’s good faith best estimate of projected actual performance through the end of the performance period, and (iii) the value of their 2023 PSUs assuming target performance and pro-rated based on the number of days elapsed between the grant date and December 31, 2023. |

  85. Potential Payments upon Termination or Change-in-Control

    | (3) Represents the severance payments and benefits that the NEOs would be entitled to under the Change in Control Severance Plan and the Severance Plan, as applicable, if a termination of employment without cause or a resignation for good reason within 12 months of a change in control of the Company, including (i) for Messrs. Hanna and Pratt, an amount equal to two times the sum of their annual base salary and annual target bonus for the year of termination, and for Mses. Malek and Van Trease and Mr. Hawkins, an amount equal to 6 months of their annual base salary, (ii) 24 months COBRA coverage payable to the CEOs and 12 months of COBRA coverage payable to other NEOs (and the NEO’s spouse and dependents, as applicable), (iii) reasonable outplacement assistance and (iv) full acceleration and vesting of all equity awards. In addition, upon a termination without cause or a resignation for good reason, under the 2023 Cash Bonsu Plan, each NEO would be entitled to payment of the target bonus amount pro-rated based on the date of termination. |

  86. Potential Payments upon Termination or Change-in-Control

    CEO Compensation Pay Ratio We believe our executive compensation program must be internally consistent and equitable to motivate our employees to create shareholder value. We monitor the relationship between the compensation of our executive officers and the compensation of our non-managerial employees. For 2023, the total compensation of Joseph F. Hanna, our President and Chief Executive Officer, of $4,579,698, as shown in the “Summary Compensation Table” above, (the “CEO Compensation”), was approximately 66 times the total compensation of a median employee of $69,099, calculated in the same manner. Our CEO to median employee pay ratio is calculated in accordance with the SEC’s rules pursuant to Item 402(u) of Regulation S-K. We identified the median employee by examining the 2023 total cash compensation for all individuals, excluding our CEO, who were employed by us on December 31, 2023, the last day of our payroll year. We included all employees, whether employed on a full-time, part-time or seasonal basis. We did not make any assumptions, adjustments or estimates with respect to total cash compensation, and we did not annualize the compensation for any full-time employees that were not employed by us for all of 2023. We believe the use of total cash compensation for all employees is a consistently applied compensation measure because we do not widely distribute annual equity awards to employees. Treatment of Certain Compensation Elements Upon Termination Executive Severance Policy. We do not have employment agreements. The Compensation Committee has, however, established terms and conditions to address involuntary termination severance benefits for executive officer-level positions in connection with a change in control of the Company or otherwise. For details, see both the “Change of Control Severance Plan” and “Involuntary Termination Severance Plan for Officers” discussions within the “Compensation Discussion and Analysis” section of this Proxy Statement. Retirement Plan. All employees who participate in our KSOP are entitled to their vested amounts upon termination of their employment. Health and Welfare Benefit and Executive Benefits and Perquisites Continuation. An executive officer is not entitled to any continuation of his or her health and welfare benefits, executive benefits, or perquisites (other than pursuant to COBRA) following the termination of his or her employment, except that any executive officer employed with the Company for at least 10 years may remain on the Company’s health insurance policy after he or she retires from the Company, provided he or she pays 100% of the premiums. Long-Term Incentives. Except in the circumstances discussed above, an executive officer forfeits his or her stock options or unvested shares of restricted stock upon termination of employment and is not entitled to any continuation of vesting or acceleration of vesting with respect to his or her options or unvested restricted stock awards. The executive would be, however, entitled to exercise any vested options for a period of 90 days after termination and is entitled to continue to hold his or her shares of restricted stock that had previously vested (in the same manner as any other employee of the Company). In the event of a qualifying termination following a change in control, an executive officer is entitled to the acceleration of vesting with respect to all of his or her equity awards, consistent with the Change in Control arrangements described above.

  87. Pay Versus Performance

    Pay Versus Performance In accordance with rules adopted by the SEC, we provide the following disclosure regarding executive Compensation Actually Paid (“CAP”) (as calculated in accordance with SEC rules) and certain Company performance for the fiscal years listed below. See “Executive Compensation” in this Proxy Statement for a complete description of how executive compensation relates to Company performance and how the Compensation Committee makes its decisions.

  88. Pay Versus Performance

    | | | | | | Year-end value of $100 invested on 12/31/2019 in: | | | | | Year | Summary Compensation Table Total for Joseph Hanna $ | Compensation Actually Paid to Joseph Hanna (1)(2)(3) $ | Average Summary Compensation Table Total for Non-CEO NEOs (4) $ | Average Compensation Actually Paid to Non-CEO NEOs (1)(2)(3)(4) $ | MGRC $ | S&P 500 Industrials Index $ | Net Income (in millions) $ | Pre-Tax Income (in millions) $ | | 2023 | 4,771,898 | 8,501,597 | 1,249,999 | 1,755,679 | 171.19 | 165.61 | 174.6 | 151.2 | | 2022 | 3,121,167 | 4,871,184 | 1,029,825 | 1,480,971 | 138.60 | 126.96 | 115.1 | 150.0 | | 2021 | 3,261,680 | 4,386,308 | 969,855 | 1,277,750 | 110.16 | 157.53 | 89.7 | 121.8 | | 2020 | 2,668,399 | 1,108,518 | 857,107 | 360,892 | 90.05 | 123.17 | 102.0 | 132.0 |

  89. Pay Versus Performance

    | (1) Deductions from, and additions to, total compensation in the “Summary Compensation Table” by year to calculate CAP include: |

  90. Pay Versus Performance

    | | 2023 | | | | Joseph Hanna | Average Non-CEO NEOs | | Total Compensation from Summary Compensation Table | $4,771,898 | $1,249,999 | | Adjustments for Pension | | | | Adjustment Summary Compensation Table Pension | $- | $- | | Amount added for current year service cost | $- | $- | | Amount added for prior service cost impacting current year | $- | $- | | Total Adjustments for Pension | $- | $- | | Adjustments for Equity Awards | | | | Adjustment for grant date values in the Summary Compensation Table | $2,700,334 | $510,338 | | Year-end fair value of unvested awards granted in the current year | $4,600,430 | $762,488 | | Year-over-year difference of year-end fair values for unvested awards granted in prior years | $969,825 | $169,598 | | Fair values at vest date for awards granted and vested in current year | $- | $- | | Difference in fair values between prior year-end fair values and vest date fair values for awards granted in prior years | $709,030 | $89,940 | | Forfeitures during current year equal to prior year-end fair value | $- | $34,213 | | Dividends or dividend equivalents not otherwise included in total compensation | $150,748 | $28,206 | | Total Adjustments for Equity Awards | $6,430,033 | $1,016,018 | | Compensation Actually Paid (as calculated) | $8,501,597 | $1,755,679 |

  91. Pay Versus Performance

    | (2) The assumptions used in calculating the fair value of the equity awards did not differ in any material respect from the assumptions used to calculate the grant date fair value of the awards as reported in the Summary Compensation Table, except that as of the end of 2023, the fair value calculations of the PSUs |

  92. Pay Versus Performance

    | granted in 2021 and 2022 assumed a payout at maximum, and the PSUs granted in 2023 assumed a payout between target and maximum, in each case as compared to the grant date fair value calculations which assumed a payout at target. |

  93. Pay Versus Performance

    | (3) Non-CEO NEOs reflect the average “Summary Compensation Table” total compensation and average CAP for the following executives by year: |

  94. Pay Versus Performance

    2023: Pratt, Keith; Hawkins, Philip; Malek, Gilda; Van Trease, Kristina 2022: Pratt, Keith; Hawkins, Philip; Craft, Melodie; Van Trease, Kristina 2021: Pratt, Keith; Hawkins, Philip; Lieffrig, John; Craft, Melodie 2020: Pratt, Keith; Hawkins, Philip; Craft, Melodie; Van Trease, Kristina Most Important Performance Measures In our assessment, the most important performance measures used to link CAP (as calculated in accordance with the SEC rules) to Company performance are listed in the table below. The role of each of these performance measures in our executive compensation program is discussed in “Executive Compensation” in this Proxy Statement.

  95. Pay Versus Performance

    | Performance Measures | | Pre-Tax Income | | Adjusted EBITDA |

  96. Pay Versus Performance

    Descriptions of the Information Presented in the Pay Versus Performance Table The illustrations below compare CAP (as calculated in accordance with the SEC rules) and the following measures:

  97. Pay Versus Performance

    | (1) the Company’s cumulative TSR and the S&P 500 Industrials Index’s cumulative TSR; |

  98. Pay Versus Performance

    | (2) the Company’s Net Income; and |

  99. Pay Versus Performance

    | (3) the Company’s Pre-Tax Income |

  100. Pay Versus Performance

    Due to the mechanics of how CAP is calculated, fluctuations in stock price or TSR may have a greater impact on the CAP values than any single financial metric.