DEF 14A of Landstar System Inc
Filed Apr 4, 2025 · FY20240001193125-25-072935
PROPOSAL NUMBER ONE — ELECTION OF DIRECTORS
PROPOSAL NUMBER ONE — ELECTION OF DIRECTORS There are currently eight members of the Board, whose terms will expire at the 2025 Annual Meeting. The Board has nominated Dr. Homaira Akbari, Mr. David G. Bannister, Mr. James L. Liang, Mr. Frank A. Lonegro, Ms. Diana M. Murphy, Mr. Anthony J. Orlando, Mr. George P. Scanlon and Ms. Teresa L. White as Directors for election at the 2025 Annual Meeting. It is intended that the shares represented by the form of proxy will be voted at the 2025 Annual Meeting for the election of nominees Dr. Akbari, Mr. Bannister, Mr. Liang, Mr. Lonegro, Ms. Murphy, Mr. Orlando, Mr. Scanlon and Ms. White as Directors, unless the proxy specifies otherwise. Dr. Akbari, Mr. Bannister, Mr. Liang, Mr. Lonegro, Ms. Murphy, Mr. Orlando, Mr. Scanlon and Ms. White would each be elected for a term to expire at the 2026 Annual Meeting, and each has indicated his or her willingness to serve as a member of the Board, if elected. If, for any reason not presently known, Dr. Akbari, Mr. Bannister, Mr. Liang, Mr. Lonegro, Ms. Murphy, Mr. Orlando, Mr. Scanlon or Ms. White is not available for election at the time of the 2025 Annual Meeting, the shares represented by the form of proxy may be voted for the election of one or more substitute nominee(s) designated by the Board or a committee thereof, unless the proxy withholds authority to vote for such substitute nominee(s). Assuming the presence of a Quorum, to be elected, a nominee must receive the affirmative vote of a majority of the votes cast by the holders of Common Stock with respect to that director’s election at the 2025 Annual Meeting. Abstentions from voting and broker non-votes will have no effect on the outcome of this proposal.
THE BOARD RECOMMENDS A VOTE FOR THIS PROPOSAL
THE BOARD RECOMMENDS A VOTE FOR THIS PROPOSAL
DIRECTORS OF THE COMPANY
DIRECTORS OF THE COMPANY The following information describes the principal occupation or employment, other affiliations and business experience of each of the nominees named above for election as a Director at the 2025 Annual Meeting.
DIRECTORS OF THE COMPANY
| Name | Age | Business Experience | | Homaira Akbari | 64 | Dr. Akbari has been a Director of the Company since January 2013. Dr. Akbari is currently the President and Chief Executive Officer of AKnowledge Partners, LLC, a global advisory firm providing high-impact consultative strategies and advice to Fortune 1000 companies and private equity firms in the sectors of The Internet of Things, cybersecurity, enterprise software and artificial intelligence. From 2007 to 2012, Dr. Akbari was the President and Chief Executive Officer of SkyBitz, Inc., a leading provider of remote asset tracking and security solutions specializing in real-time decision-making tools for companies with unpowered assets such as truck trailing equipment, intermodal containers and rail cars. Prior to her service with SkyBitz, Dr. Akbari held executive positions at Microsoft Corporation, Thales Group, TruePosition, Inc., a subsidiary of Liberty Media Corporation, and Cambridge Strategic Management Group (CSMG). Dr. Akbari holds a Ph.D. in particle physics from Tufts University and is presently a member of the Business Board of Advisors for Carnegie Mellon University. Dr. Akbari also serves on the board of directors of Banco Santander, S.A., a company incorporated in Spain and listed on the New York Stock Exchange (“NYSE”). Dr. Akbari also has served since 2020 on the Board of Directors of Santander Consumer USA Holdings Inc., formerly a NYSE listed company until January 2022. Dr. Akbari formerly served on the board of directors of (i) Temenos AG, a company incorporated in Switzerland and listed on the SIX Swiss Exchange, from May 2020 to May 2023, (ii) GEMALTO N.V., a company incorporated in the Netherlands and formerly listed on the Euronext Amsterdam and Euronext Paris, from 2013 to 2019, and (iii) Veolia S.A., a company incorporated in France and listed on the Euronext Paris, from 2015 to 2019. Dr. Akbari has extensive business experience, with an emphasis on the use of technology within the transportation and logistics sector and cybersecurity. The Board believes Dr. Akbari’s experience as leading AKnowledge Partners and as the former Chief Executive Officer of SkyBitz, a major technology vendor to the transportation sector, as well as to many industrial sectors served by the Company, provides important technological, cybersecurity and business expertise to the Board. The Board also believes that Dr. Akbari’s prior executive service in various capacities with a number of large multinational corporations provides the Board with additional expertise in international matters. | | David G. Bannister | 69 | Mr. Bannister has been a Director of the Company since April 1991. Mr. Bannister is currently a private investor. From May 2005 to September 2014, Mr. Bannister held a number of positions with FTI Consulting, Inc. (“FTI”), a global business consulting firm |
DIRECTORS OF THE COMPANY
| Name | Age | Business Experience | | | | listed on the NYSE. Effective April 1, 2011, Mr. Bannister was elected to the position of Chairman of the North American Region of FTI. In this capacity, Mr. Bannister had operating and profitability responsibility for FTI’s client-service operations and business segments. Mr. Bannister served as Executive Vice President and Chief Financial Officer of FTI from March 2010 to April 2011, Executive Vice President – Corporate Development and Chief Administrative Officer from December 2008 to March 2010, Executive Vice President – Corporate Development from June 2006 to December 2008 and Senior Vice President – Business Development from May 2005 to June 2006. From 1998 to 2003, Mr. Bannister was a General Partner of Grotech Capital Group, Inc., a private equity and venture capital firm. Prior to joining Grotech Capital Group, Inc. in May 1998, Mr. Bannister was a Managing Director at Deutsche Bank Alex Brown Incorporated. Mr. Bannister has broad financial and strategic experience through a long career that has included work as (i) an investment banker focused on the transportation sector, (ii) a private equity and venture capital investor and (iii) as a senior executive with FTI. In his former capacity as a senior executive with FTI, Mr. Bannister was involved extensively with FTI’s operational strategy and global expansion, with responsibility for all of FTI’s business segments, budgeting and strategic growth initiatives. Earlier in his career, Mr. Bannister was a certified public accountant with Deloitte, Haskins and Sells and has extensive experience with financial reporting and auditing matters. The Board believes Mr. Bannister’s experience, together with his over 30 years of service as a Director of the Company, allows him to bring a sophisticated, diverse and seasoned business perspective to the Board. | | James L. Liang | 67 | Mr. Liang has been a Director of the Company since March 2022. Mr. Liang is the founder of Hope Street Advisers, LLC, an investment firm through which he invests in early-stage technology companies, and an operating partner at Updata Partners LLC, a growth equity investment firm focused on B2B software companies. Earlier in his career, Mr. Liang served from 2008 to 2011 as the Senior Vice President, Strategy & Corporate Development at Amdocs, Ltd., a publicly held software company listed on the NASDAQ Global Select Market, where he led all corporate strategic planning and acquisition activities. Before that, Mr. Liang served as Vice President, Strategy – Global Technology Services (GTS), IBM’s technology services division, leading initiatives to drive global growth. Prior to his roles as an operator, Mr. Liang was an investment banker at Morgan Stanley & Co., Inc. from 1993 to 2004, culminating his service at Morgan Stanley as the head of global technology investment banking. Mr. Liang has extensive experience working in and with innovative companies as an investor, operator and advisor. The Board believes Mr. Liang provides important strategic and financial expertise rooted in a technology-based background. |
DIRECTORS OF THE COMPANY
| Name | Age | Business Experience | | Frank A. Lonegro | 56 | Mr. Lonegro has been a Director of the Company since February 2024. Mr. Lonegro has been President and Chief Executive Officer of the Company since February 2024. He is also an officer or director of each of the Company’s subsidiaries and is a trustee of the Landstar Scholarship Fund. Prior to joining Landstar, Mr. Lonegro was the Executive Vice President and Chief Financial Officer of Beacon Roofing Supply, Inc. (“Beacon”), a Fortune 500 NASDAQ listed North American distribution company, specializing in residential and commercial roofing products and complementary offerings such as siding and waterproofing. Prior to working at Beacon, Mr. Lonegro worked for almost 20 years at CSX Corporation, a Fortune 500 NASDAQ listed rail transportation company. During his tenure at CSX, Mr. Lonegro served in a number of capacities, including Executive Vice President and Chief Financial Officer from 2015 to 2019, as well as executive leadership roles in technology and operations earlier in his tenure, including President of CSX Technology, Vice President of Service Design, and Vice President of Mechanical. Mr. Lonegro also serves on the board of directors of Duos Technologies Group, Inc., a NASDAQ listed company. Mr. Lonegro has broad financial, operational and technology leadership experience at large, publicly-traded organizations. As Chief Executive Officer, Mr. Lonegro is responsible for leading the overall strategic direction of the enterprise. | | Diana M. Murphy | 68 | Ms. Murphy was elected by the Board of Directors as non-executive Chairman of the Board in May 2015. Ms. Murphy served as Lead Independent Director of the Board from May 2012 to May 2015. Ms. Murphy has been a Director of the Company since February 1998. Ms. Murphy is a Managing Director of Rocksolid Holdings, LLC, a private equity firm. She was the Managing Director of the Georgia Research Alliance Venture Fund from 2012 to 2015. From 1997 to 2007, she was a Managing Director at Chartwell Capital Management Company, a private equity firm. Prior to that time, Ms. Murphy spent over 15 years in various senior management positions in the publishing industry. Ms. Murphy also serves on the board of directors of American International Group, Inc. (AIG), a NYSE listed company, Atlanta Braves Holdings, Inc., a NASDAQ listed company, and Synovus Financial Corporation, a NYSE listed company. Ms. Murphy served on the board of directors of CTS Corporation, a NYSE listed company, from 2010 to 2020. Ms. Murphy also serves on the board of directors of several private companies and non-profit organizations and is a past President of the United States Golf Association. Ms. Murphy has extensive experience in leadership roles on boards of publicly traded, private and non-profit organizations. The Board believes Ms. Murphy’s business acumen and expertise in strategic planning, management development and risk management, provides important perspective and experience to the Board, especially in her role as non-executive Chairman. |
DIRECTORS OF THE COMPANY
| Name | Age | Business Experience | | Anthony J. Orlando | 65 | Mr. Orlando has been a Director of the Company since May 2015. Mr. Orlando is currently a private investor. From October 2004 until March 2015, Mr. Orlando served as the President and Chief Executive Officer of Covanta Holding Corporation (“Covanta”), a leading provider of sustainable waste and energy solutions that was listed on the NYSE during his tenure. Prior to serving as the President and Chief Executive Officer of Covanta, Mr. Orlando was the President and Chief Executive Officer of Covanta Energy from November 2003 to October 2004. From March 2003 to November 2003, Mr. Orlando served as Senior Vice President, Business and Financial Management of Covanta Energy. Mr. Orlando served in various other capacities with Covanta and its affiliates beginning in 1987. Mr. Orlando formerly served on the board of directors of Covanta from 2005 to 2017, and on the board of directors of Contura Energy, Inc., a NYSE-listed company, from 2017 to 2019. Mr. Orlando has extensive business experience, having served in a number of different roles at Covanta with responsibility for, among other areas, strategic, operational and financial matters. The Board believes Mr. Orlando’s service, in particular as Chief Executive Officer of Covanta, adds valuable expertise to the Board. | | George P. Scanlon | 67 | Mr. Scanlon has been a Director of the Company since May 2017. Mr. Scanlon is currently a private investor. From 2010 to 2013, Mr. Scanlon was the Chief Executive Officer of Fidelity National Financial, Inc. (“FNF”), after serving as Chief Operating Officer of FNF earlier in 2010. FNF, listed on the NYSE, is the nation’s largest title insurance company, through its title insurance underwriters, and a leading provider of technology and transaction services to the real estate and mortgage industries. Mr. Scanlon also served as the Executive Vice President - Finance of Fidelity National Information Services from 2009 to 2010 and the Chief Financial Officer of Fidelity National Information Services, also listed on the NYSE, from 2008 to 2009. Prior to working at FNF, Mr. Scanlon served as the Chief Financial Officer at several companies in various industries, including real estate, technology and data services. Earlier in his career, Mr. Scanlon worked for approximately 18 years for Ryder System, Inc., a NYSE-listed transportation and supply chain management solutions company, in a number of financial, audit and strategic roles, and for Price Waterhouse (now PricewaterhouseCoopers International Limited) (“PwC”) as an accountant. Mr. Scanlon also currently serves on the board of directors of Weave Communications, Inc., a NYSE listed company, and Cyndx Holdco, Inc., a privately held company. Mr. Scanlon previously served on the board of directors of WageWorks, Inc., formerly a NYSE-listed company, from 2018 to 2019 and Remy International, Inc., formerly a NASDAQ-listed company, from 2012 to 2015. Mr. Scanlon has broad business, financial and strategic expertise through a long career with both public and private companies in a |
DIRECTORS OF THE COMPANY
| Name | Age | Business Experience | | | | number of industries. Mr. Scanlon’s service as an executive at FNF, particularly his service as the former Chief Executive Officer of FNF, brings valuable experience to the Board. FNF also owned minority or majority equity positions in a number of private portfolio companies on whose boards Mr. Scanlon previously served, including Comdata, Inc., a leading provider of fleet management and B2B payment solutions for the trucking industry and a key vendor to the Company. Mr. Scanlon also offers a very strong financial background, having served as the chief financial officer at a number of companies, as a financial executive at Ryder System, Inc., and as an accountant at PwC. | | Teresa L. White | 58 | Ms. White has been a Director of the Company since March 2022. Ms. White served as President of Aflac U.S., which constitutes the operating U.S. insurance businesses for Aflac Incorporated, a publicly held company listed on the NYSE, from October 2014 until March 2023. Prior to becoming President, Ms. White served in various leadership positions with Aflac, including Chief Operating Officer from July 2013 to September 2014, Executive Vice President and Chief Services Officer from October 2012 to July 2013 and Executive Vice President and Chief Administrative Officer from March 2008 to October 2012, among others. Ms. White also serves on the board of directors of Synovus Financial Corporation, a NYSE listed company. Ms. White has served on the boards of various non-profit and professional organizations, including the Georgia Chamber Board of Governors, Neighborworks Columbus and Americas Health Insurance Plans. Ms. White’s long, multifaceted career at Aflac has included responsibility over many key functional areas, including marketing, sales and distribution, information technology, corporate communications, operations, U.S. financial management and shared services. As President of Aflac U.S., she oversaw the company’s extensive distribution network of individual agents and brokers across the U.S., as well as nearly 5,000 employees. Ms. White’s extensive operational and strategic background, coupled with her marketing, sales, talent and risk management experience in a large, sophisticated business with an extensive independent agent network provides valuable experience and expertise to the Board. |
INFORMATION REGARDING BOARD OF DIRECTORS AND COMMITTEES
INFORMATION REGARDING BOARD OF DIRECTORS AND COMMITTEES The business of the Company is managed under the direction of the Board. The Board meets on a regularly scheduled basis four times a year to review significant developments affecting the Company and to act on matters requiring Board approval. It also holds special meetings and acts by written consent when matters require Board action between scheduled meetings. In addition, the Independent Directors (as defined below) of the Board meet regularly in executive session without any other members of management or the Board present.
Non-Executive Chairman
Non-Executive Chairman On May 19, 2015, the Board elected Diana M. Murphy to serve as non-executive Chairman of the Board for such term as the Board may determine. In appointing Ms. Murphy as the non-executive Chairman of the Board following the Company’s 2015 Annual Meeting, the Board considered Ms. Murphy’s extensive experience with the Company having served on the Board since 1998, including her service as Lead Independent Director since 2012 and her service at various times as Chairman of the Nominating and Corporate Governance Committee (subsequently renamed the Nominating and ESG Committee), the Strategic Planning Committee and the Compensation Committee. The duties and responsibilities of the non-executive Chairman include: (i) to preside as the chairman at all meetings of the Board; (ii) to preside as the chairman at all meetings of the Independent Directors; (iii) to serve as a liaison between the Independent Directors and the Chief Executive Officer; (iv) to coordinate with the Chief Executive Officer to prepare meeting agendas and related materials for meetings of the Board; (v) to coordinate with the other Independent Directors of the Board to develop the agenda with respect to all meetings of the Independent Directors; (vi) to have the authority to call meetings of the Board and meetings of the Independent Directors; (vii) to approve the annual schedule of meetings of the Board; (viii) to ensure that the Board has adequate resources, including complete, timely information necessary to enable the members of the Board to perform their duties; and (ix) to communicate to management, as appropriate, the results of private discussions among the Independent Directors. In addition to the aforementioned duties, the non-executive Chairman of the Board is also the Chairman of the Nominating and ESG Committee. In that capacity, Ms. Murphy leads the process by which potential new Independent Directors are identified and evaluated. The Board believes it is important to confer this responsibility on the non-executive Chairman in order to support a Board structure where the Independent Directors retain the decision making authority of the Board.
Compensation Committee
Compensation Committee The members of the Compensation Committee are Homaira Akbari, David G. Bannister (Chairman), James L. Liang, Diana M. Murphy, Anthony J. Orlando, George P. Scanlon and Teresa L. White, each an Independent Director. The Compensation Committee functions include: (i) reviewing and making determinations with respect to matters having to do with the compensation of Executive Officers and Directors of the Company and (ii) administering certain plans relating to the compensation of employees and Directors. During the Company’s 2024 fiscal year, the Compensation Committee held four meetings and did not act by written consent. The Charter of the Compensation Committee was amended and restated by the Board at the January 23, 2024 Board meeting. The Charter of the Compensation Committee more fully describes the purposes, membership, duties and responsibilities of the Compensation Committee described herein. A copy of the Charter of the Compensation Committee is available on the Company’s website at https://investor.landstar.com/committee-details/charter-compensation-committee. The Compensation Committee has full and complete discretion to establish the compensation payable to the Company’s Chief Executive Officer and the other Executive Officers and oversees the compensation payable to other employees of the Company. With regard to the Executive Officers other than the Chief Executive Officer, the Compensation Committee considers the recommendations of the Chief Executive Officer. The Compensation Committee, following authorization by the Board, has delegated to the Company’s Chief Executive Officer authority with respect to management of annual salary decisions for employees making up to $200,000 in annual salary. In addition, the Compensation Committee has delegated to the Company’s Chief Executive Officer the authority with respect to the grant of restricted stock units and/or nonvested restricted stock up to an aggregate grant date fair value of $200,000 per employee (other than Executive Officers) with vesting over a period of no less than three years from the date of the grant following consultation with the Chairman of the Compensation Committee. The Compensation Committee has otherwise not delegated to management any of its responsibilities with respect to the compensation of the Executive Officers of the Company, except with respect to the day-to-day operations of the Company’s compensation plans. The Compensation Committee has the authority to hire and negotiate the terms of compensation for its advisors, including compensation consultants. The Compensation Committee periodically reviews the Company’s compensation programs.
Strategic Planning Committee
Strategic Planning Committee The members of the Strategic Planning Committee are Homaira Akbari, David G. Bannister, James L. Liang, Frank A. Lonegro, Diana M. Murphy, Anthony J. Orlando, George P. Scanlon (Chairman) and Teresa L. White. During the Company’s 2024 fiscal year, the Strategic Planning Committee held five meetings and did not act by written consent. The Strategic Planning Committee functions include the review and consideration of the strategic objectives of the Company as well as the Company’s action plans designed and intended to achieve these strategic objectives. The Strategic Planning Committee solicits the views of the Company’s senior management and assesses strategic directions for implementation. The Strategic Planning Committee also reviews and approves the Company’s annual operating plan each year upon which is based the annual budgeted amount of diluted earnings per share that the Compensation Committee approves for purposes of establishing the “threshold” target under the Company’s incentive compensation program. See “Compensation Discussion and Analysis – Performance Based Compensation – Annual Incentive Compensation Program” for more information.
Core Competencies
| • | Strategic Oversight experience is essential to guiding our long-term business strategy. |
COMPENSATION OF DIRECTORS
COMPENSATION OF DIRECTORS For fiscal year 2024, each Independent Director was paid an annual fee of $100,000 with no additional fees payable for attendance at or participation in Board or committee meetings or service as a chairman of a committee of the Board. Ms. Murphy, the non-executive Chairman of the Board, was paid an additional $50,000 annual fee to serve in that capacity. In addition, each Independent Director was also entitled to receive a grant of restricted shares of Common Stock under the 2022 Directors Stock Compensation Plan on the first business day immediately following the 2024 Annual Meeting equal to a number of restricted shares of Common Stock determined based on the quotient of $150,000 divided by the fair market value of a share of Common Stock on the date of such grant, rounded to the nearest whole number of shares. Accordingly, each of the Independent Directors received a grant of 830 restricted shares of Common Stock under the 2022 Directors Stock Compensation Plan on May 8, 2024. Each such grant of restricted stock vests on the date of the next Annual Meeting following the 2024 Annual Meeting. Generally, the unvested shares of restricted stock are subject to forfeiture upon early departure of a Director from the Board for any reason prior to the Annual Meeting that immediately follows the Annual Meeting in respect of which such shares were granted. Directors are not paid a retainer fee upon election or re-election to the Board. Directors are reimbursed for expenses incurred in connection with attending Board meetings and other company-related expenses such as attending director educational events.
Compensation Paid to Independent Directors
| Director Compensation | | | | | | Name | Fees earned or paid in cash ($) | Stock awards ($) (1) | All Other Compensation ($) (1) | Total ($) | | Homaira Akbari | 100,000 | 149,981 | 2,580 | 252,561 | | David G. Bannister | 100,000 | 149,981 | 2,580 | 252,561 | | James L. Liang | 100,000 | 149,981 | 2,580 | 252,561 | | Diana M. Murphy | 150,000 | 149,981 | 2,580 | 302,561 | | Anthony J. Orlando | 100,000 | 149,981 | 17,219 | 267,200 | | George P. Scanlon | 100,000 | 149,981 | 2,580 | 252,561 | | Teresa L. White | 100,000 | 149,981 | 2,580 | 252,561 |
Compensation Paid to Independent Directors
| (1) Dr. Akbari, Mr. Bannister, Mr. Liang, Ms. Murphy, Mr. Orlando, Mr. Scanlon and Ms. White were each granted 830 restricted shares on May 8, 2024, the first business day immediately following the date of the Company’s 2024 Annual Meeting. The fair market value of a share of Common Stock on May 8, 2024 was $180.70. At December 28, 2024, Dr. Akbari, Mr. Bannister, Mr. Liang, Ms. Murphy, Mr. Scanlon and Ms. White each had 830 restricted shares outstanding and Mr. Orlando had 4,331 deferred stock units and 830 restricted shares outstanding, respectively. Dr. Akbari, Mr. Bannister, Mr. Liang, Ms. Murphy, Mr. Scanlon and Ms. White were each paid dividends on unvested restricted stock of $2,580 in 2024. Mr. Orlando was paid dividends on unvested restricted stock of $2,580 and dividend equivalents on deferred stock units of $14,639 in 2024, respectively. Dividends paid on shares of unvested restricted stock and dividend equivalents paid on deferred stock units are included in All Other Compensation in the table above. |
Overall Policy
Overall Policy The Company’s executive compensation philosophy is to attract and motivate executive talent best suited to develop and implement the Company’s business strategy. These objectives are attained by tying a significant portion of each executive’s compensation to the Company’s success in meeting specified annual corporate financial performance goals and, through the grant of stock-based awards, aligning the interests of the executives whose compensation is detailed below (the “Named Executives”) to the interests of our stockholders. The Company’s philosophy is to recognize individual contributions while supporting a team approach in achieving overall business objectives and increasing shareholder value. The key elements of the Company’s executive compensation consist of base salary, annual performance-based incentive payments and stock-based awards. The Company’s policies with respect to each of these elements, including the basis for the compensation awarded, are discussed below. The Company’s philosophy is to pay annual compensation generally in cash, with long-term incentive compensation paid in the form of stock-based awards. Base salary is intended to constitute a modest percentage of total compensation. The annual incentive compensation program (the “ICP”) is designed to pay substantial compensation for superior performance. Stock-based awards have historically accounted for a significant portion of each Named Executive’s total compensation. In 2024, the Company awarded both performance stock units and restricted stock to each of its Named Executives based on each individual’s level of responsibility and performance and to help align management’s future interests with that of the Company’s stockholders. The Company believes that its compensation practices align executive compensation with financial performance and, as such, executive compensation arrangements are generally aligned with the Company’s variable cost business model. The Compensation Committee of the Board is solely responsible for decisions with respect to the compensation of the Company’s President and Chief Executive Officer. The Compensation Committee is also responsible, taking into consideration recommendations of the President and Chief Executive Officer, for decisions with respect to the compensation awarded to the Named Executives other than the Chief Executive Officer, subject to review by the entire Board. The Company provides its stockholders with the opportunity to cast an annual advisory vote on Named Executive compensation as described elsewhere in this Proxy Statement (commonly known as a “say-on-pay” proposal). At the Company’s 2024 Annual Meeting, approximately 96% of the votes cast on the say-on-pay proposal at that meeting were voted in favor of the proposal. The Compensation Committee believes this affirms stockholders’ support of the Company’s approach to executive compensation. As noted above, the say-on-pay vote is advisory and therefore not binding on the Compensation Committee. However, the Compensation Committee values the opinion of the Company’s stockholders and, to the extent there was any significant vote against the Named Executive compensation as disclosed in this Proxy Statement, would consider the stockholders’ concerns and evaluate whether any actions are necessary to address those concerns.
Performance Based Compensation
Performance Based Compensation The Company maintains performance-based compensation programs that are designed to encourage the Company’s Named Executives to achieve various financial goals linked to operating objectives both for the Company’s upcoming fiscal year as well as for the longer term performance of the enterprise. The Company’s performance-based compensation programs include the Company’s annual ICP and stock-based awards program, each of which are further described below. Annual Incentive Compensation Program The Company’s objective with respect to its annual ICP is to encourage the Company’s Named Executives to achieve various financial goals linked to operating objectives for the Company’s upcoming fiscal year. These annual goals are developed as part of the Company’s budgeting process and in general are aligned with the Company’s long-term objectives with respect to earnings growth. For each annual fiscal period, the Compensation Committee reviews and approves, among other financial metrics, the budgeted amount for diluted earnings per share. In establishing budgeted amounts for diluted earnings per share for 2024, the Company considered 2023 operating results, historical operating trends and forecasted 2024 U.S. economic factors such as industrial production, estimated freight demand and capacity availability. Once the annual budgeted goal is approved by the Compensation Committee, the ICP is designed to incent management to meet and, when possible, to exceed their goals. An executive’s incentive compensation payment continues to increase as actual results for the fiscal year exceed budgeted amounts. As further described below, actual payments under the ICP are calculated based upon how much actual results exceed budgeted diluted earnings per share, using a predetermined formula, up to the maximum annual payment per eligible participant subject to the discretion of the Compensation Committee. For the 2024 fiscal year, the maximum annual ICP payment amount for Mr. Lonegro was $3 million while the maximum annual ICP payment amount for the other eligible participants was $2.5 million. With respect to the 2024 fiscal year, each of the Named Executives had a “threshold” target under the ICP based on a specific budgeted diluted earnings per share amount approved in connection with the Company’s annual operating budget. The Compensation Committee believes it is appropriate to establish the “threshold” target under the ICP based on diluted earnings per share because (1) each of the Named Executives were in positions of broad responsibility over various components that affect the Company’s diluted earnings per share amount, (2) the Compensation Committee believes that diluted earnings per share is the primary financial measure reflecting the performance of the Company’s overall strategic direction and on that basis evaluates the performance of the Named Executives, (3) the Compensation Committee believes it is appropriate to compensate the Named Executives upon achievement of Company-wide, rather than function-specific budgeted targets in order to focus executive management on Company-wide strategic and financial performance goals, (4) the Compensation Committee, at its discretion, has the ability to adjust calculated bonus amounts in the event of extraordinary or unusual items impacting diluted earnings per share and (5) the Company’s performance-based equity programs use a number of other financial measures, including operating income, pre-tax income per diluted share and total shareholder return (“TSR”), to determine executive compensation under those programs, as further described below under “Stock-based Awards”. The “threshold” amount of diluted earnings per share under the ICP refers to the amount of diluted earnings per share that would be required to give effect to a “one-time incentive payment.” Budgeted diluted earnings per share does not include the aggregate amount of a “one-time incentive payment.” Therefore, each Named Executive would have received no incentive payout if the Company’s actual diluted earnings per share amount for the fiscal year was less than budgeted diluted earnings per share before giving effect to the funding of a one-time incentive payment. Each Named Executive would have received a “one-time incentive payout” if the Company’s actual diluted earnings per share amount for the fiscal year equaled budgeted diluted earnings per share after giving effect to such one-time incentive payment. A “one-time incentive payment” under the ICP equals the executive’s assigned “participant’s percentage participation” multiplied by such executive’s base salary. The participant percentage participations for the Named Executives in 2024 were as follows: Mr. Lonegro, 100%, Mr. Todd, 50%, Mr. Kneller, 50%, Mr. Coro, 50% and Mr. Beacom, 50%. Mr. Gattoni was not eligible for an incentive payment for fiscal year 2024. Historically from 2018 to 2023, if the Company’s actual diluted earnings per share for the fiscal year were greater than the “threshold” amount of diluted earnings per share, the ICP payment for each Named Executive would be calculated by multiplying each such executive’s base salary by such executive’s participant percentage participation multiplied by a “multiplier” that is equal to one plus a predetermined factor. The factor equaled 33 1/3 percent for each one percent by which actual diluted earnings per share exceeded threshold diluted earnings per share up to a multiplier of 3.0 for each executive. In other words, each executive would achieve a multiplier of 1.0 if actual diluted earnings per share equaled threshold diluted earnings per share and would achieve an additional multiplier of 2.0 (for a total multiplier of 3.0) if actual diluted earnings per share exceeded threshold diluted earnings per share by six percent. For purposes of this Compensation, Discussion and Analysis and the “Grants of Plan-Based Awards” table below, we refer to the amount of diluted earnings per share required to achieve a multiplier of 3.0 as the “target” amount of diluted earnings per share. In the event actual diluted earnings per share exceeded target diluted earnings per share, a bonus pool would accrue as if the multiplier continued to increase above 3.0 for each participant under the ICP. The bonus pool amount would be calculated by multiplying each such executive’s base salary by such executive’s participant percentage participation multiplied by an “additional multiplier” that is equal to a predetermined factor specific to the bonus pool. With respect to the calculation of the bonus pool, the factor equaled 16 2/3 percent, not 33 1/3 percent, for each one percent by which actual diluted earnings per share exceeded target diluted earnings per share. In other words, once each executive achieved a multiplier of 3.0, if actual diluted earnings per share exceeded target diluted earnings per share by an additional 12 percent, the bonus pool would be calculated based on an additional multiplier of 2.0. The bonus pool is allocable among ICP participants based on the discretion of the Compensation Committee. These calculations of individual amounts for each Named Executive may be adjusted upwards or downwards at the discretion of the Compensation Committee, subject to the $3 million maximum for the CEO and the $2.5 million maximum for the other Named Executives. Specific to the 2024 fiscal year, “target” diluted earnings per share was set at $7.36, equal to the Company’s 2023 fiscal year diluted earnings per share. The “threshold” amount of diluted earnings per share under the ICP with respect to the 2024 fiscal year was $6.63. A bonus multiplier of 2.0 would have been achieved if diluted earnings per share was equal to the average of fiscal year 2023 diluted earnings per share and 2024 budgeted
Performance Based Compensation
diluted earnings per share, with linear interpolation between the threshold and target amounts. Diluted earnings per share for the 2024 fiscal year was $5.51, lower than “threshold” diluted earnings per share by 16.9%, or $1.12 per share, and was lower than “target” diluted earnings per share by 25.1%, or $1.85 per share. As the threshold amount of diluted earnings per share under the ICP with respect to the 2024 fiscal year was not achieved, no payments were made to any of the Named Executives under the ICP for the 2024 fiscal year. Inclusive of fiscal year 2024, the Company has achieved the “threshold” amount of diluted earnings per share in two of the five preceding fiscal years and five of the preceding ten fiscal years. Inclusive of fiscal year 2024, the Company has achieved the “target” amount of diluted earnings per share in two of the five preceding fiscal years and four of the preceding ten fiscal years. Stock-based Awards Under the Company’s 2011 Landstar System, Inc. Equity Incentive Plan (the “Employee Equity Plan”), stock-based awards may be granted to the Company’s Named Executives and certain other key employees. The Compensation Committee determines the type and number of stock-based awards to be granted to a Named Executive based on such Named Executive’s job responsibilities, the individual performance evaluation of such Named Executive and overall Company performance. Stock-based awards are typically granted to Named Executives once a year. The Compensation Committee believes that restricted stock, restricted stock units (the “RSUs”) and other forms of stock-based awards that may be granted under the Employee Equity Plan are effective methods that may be used as part of the Company’s long-term compensation program. Over each of the past five years, the Compensation Committee approved to Named Executives on an annual basis the grant of performance related stock awards in the form of RSUs (the “Regular RSU Awards”) and time-based restricted stock awards (the “Regular Restricted Stock Awards”). During the past five years, the Compensation Committee has also approved non-recurring grants of restricted stock (the “Special Restricted Stock Awards”) primarily as a retention tool in connection with the hiring or promotion of certain specific individuals. Stock-based Awards – Regular RSU Awards On January 31, 2020, the Company granted an aggregate of 23,270 RSUs to Named Executives. Under these Regular RSU Awards, Mr. Gattoni received 8,950 RSUs, Messrs. Beacom, Coro and Kneller each received 4,475 RSUs and Mr. Todd received 895 RSUs. The Compensation Committee awarded Mr. Gattoni a larger grant in recognition of Mr. Gattoni’s broader responsibilities as President and Chief Executive Officer of the Company. Mr. Todd received a smaller grant than the other Named Executives as he was not an executive officer of the Company at the time of this grant. The number of RSUs that vest under the 2020 Regular RSU Award is determined on the third, fourth and fifth anniversary from the date of grant. On January 29, 2021, the Company granted an aggregate of 18,440 RSUs to Named Executives. Under these Regular RSU Awards, Mr. Gattoni received 7,093 RSUs, Messrs. Beacom, Coro, and Kneller each received 3,546 RSUs and Mr. Todd received 709 RSUs. The Compensation Committee awarded Mr. Gattoni a larger grant in recognition of Mr. Gattoni’s broader responsibilities as President and Chief Executive Officer of the Company. Mr. Todd received a smaller grant than the other Named Executives as he was not an executive officer of the Company at the time of this grant. The number of RSUs that vest under the 2021 Regular RSU Award is determined on the third, fourth and fifth anniversary from the date of grant. On January 28, 2022, the Company granted an aggregate of 18,701 RSUs to Named Executives. Under these Regular RSU Awards, Mr. Gattoni received 6,562 RSUs, Mr. Kneller received 4,921 RSUs, Messrs. Beacom and Coro each received 3,281 RSUs, and Mr. Todd received 656 RSUs. The Compensation Committee awarded Mr. Gattoni a larger grant in recognition of Mr. Gattoni’s broader responsibilities as President and Chief Executive Officer of the Company. Mr. Todd received a smaller grant than the other Named Executives as he was not an executive officer of the Company at the time of this grant. The number of RSUs that vest under the 2022 Regular RSU Award is determined on the third, fourth and fifth anniversary from the date of grant. On February 3, 2023, the Company granted an aggregate of 18,024 RSUs to Named Executives. Under these Regular RSU Awards, Mr. Gattoni received 5,546 RSUs, Mr. Kneller received 4,159 RSUs, and Messrs. Beacom, Coro and Todd each received 2,773 RSUs. The Compensation Committee awarded Mr. Gattoni a larger grant in recognition of Mr. Gattoni’s broader responsibilities as President and Chief Executive Officer of the Company. The number of RSUs that vest under the 2023 Regular RSU Award is determined on the third, fourth and fifth anniversary from the date of grant. On February 2, 2024, the Company granted an aggregate of 22,510 RSUs to Named Executives. Under these Regular RSU Awards, Mr. Lonegro received 10,594 RSUs, Mr. Kneller received 3,972 RSUs, and Messrs. Beacom, Coro and Todd each received 2,648 RSUs. The Compensation Committee awarded Mr. Lonegro a larger grant in recognition of Mr. Lonegro’s broader responsibilities as President and Chief Executive Officer of the Company. The number of RSUs that vest under the 2024 Regular RSU Award is determined on the third, fourth and fifth anniversary from the date of grant. For the Regular RSU Awards, each RSU represents the contractual right to receive up to two shares of Common Stock (subject to adjustment as provided in the Employee Equity Plan) when the award becomes vested. The number of Regular RSU Awards that vest each year is determined by (a) multiplying the number of RSUs credited to the Named Executive as of the applicable vesting date by (b) the Performance Multiple derived from the chart below, and (c) subtracting therefrom the number of RSUs that have previously vested; provided that, in no event, may the aggregate number of RSUs that become vested exceed 200% of the RSUs credited to the Named Executive under the applicable grant. For purposes of the Regular RSU Awards, the determination of the Performance Multiple is based on the achievement of the applicable Performance Hurdle. The Performance Hurdle means the average of the percentage change (positive or negative) in operating income and pre-tax income per diluted share, in each case from continuing operations, from the most recently completed fiscal year as compared to the results from continuing operations for the base year, and is as set forth in the chart below, with linear interpolation between Performance Hurdles:
Performance Based Compensation
Pre-tax income per diluted share rather than an after-tax financial earnings metric is used as part of the Performance Hurdle because it is a financial metric that will not be impacted by changes to applicable tax rates, and in particular, potential future changes to the federal corporate tax rate, during the performance period of the applicable RSU. With respect to the 2021 Regular RSU Awards only, the Compensation Committee adjusted the Performance Hurdle to reflect the add back of non-cash impairment charges of approximately $2.6 million recorded in the Company’s 2020 fiscal year related to certain assets, primarily customer contract and related customer relationship intangible assets, held by the Company’s Mexican subsidiaries. No dividends are paid on the Regular RSU Awards and Regular RSU Awards have no voting rights. However, dividend equivalents are credited to the Named Executive with respect to the Regular RSU Awards each time that a dividend is paid on the Company’s Common Stock. The aggregate amount of such dividend equivalents so credited in respect of each such dividend are equal to the dividend paid on a share of Common Stock multiplied by, respectively, the number of outstanding 2020, 2021, 2022, 2023 and 2024 Regular RSU Awards credited to the Named Executive on the dividend record date. The dividend equivalents are converted into additional 2020, 2021, 2022, 2023 and 2024 Regular RSU Awards credited to the Named Executive on the dividend payment date based upon the fair market value of a share of Common Stock on such date. The Compensation Committee has designed the manner in which Regular RSU Awards are deemed to be earned to reflect the level of performance that the Committee expects to be achieved, with a targeted number of units earned if the targeted level of performance is attained, and a maximum number of units earned if the maximum level of performance is attained. An increasing percentage of the Regular RSU Awards is earned based on an increasing level of positive average change in operating income and pre-tax income per diluted share during the five year performance period, such that no portion of the award is earned if there is no positive change based on the applicable calculation, 100% of the number of units credited is earned if the “target” level of positive increase is achieved, and a maximum of 200% of the number of units credited is earned if the “maximum” level of positive increase is achieved, with interpolation between these levels of performance. The Compensation Committee believes the use of a “target” and “maximum” sets expectations associated with these awards both internally to employee recipients as well as to stockholders and other third parties to help them understand the derivation of the value attributed by the Company to these awards at the time of grant. The Compensation Committee further believes that the manner in which these awards are deemed to be earned emphasizes to employee recipients and investors that the expectation at the time of grant is that the employee recipients would need to perform at a high level in order for the Company’s performance to reach the targeted level of operating income and pre-tax income per diluted share for the employees to earn the “target” number of units during the term of the award, and, moreover, that superior performance by the Company is required for the employee recipients to earn the “maximum” performance-based award. With respect to each of these Regular RSU Awards, the number of RSUs that vest is determined on the third, fourth and fifth anniversary from the date of grant. The Compensation Committee believes a vesting schedule of no less than three, and up to five, years in duration from the date of grant is consistent with the long-term performance goals these awards are intended to reward. The Compensation Committee has established post-vesting holding period requirements with respect to shares of Common Stock received upon vesting of Regular RSU Awards. Each Named Executive is subject to a one year post-vesting holding requirement with respect to the shares received upon settlement of Regular RSU Awards, net of any applicable withholding obligations in connection with such settlement. Stock-based Awards – Regular Restricted Stock Awards On January 29, 2021, 9,219 shares of restricted stock were issued in aggregate to Named Executives that vest in three equal annual installments on January 31 of 2022, 2023 and 2024. Under these restricted stock awards, Mr. Gattoni received 3,546 shares, Messrs. Beacom, Coro, and Kneller each received 1,773 shares and Mr. Todd received 354 shares. The Compensation Committee awarded Mr. Gattoni a larger grant in recognition of Mr. Gattoni’s broader responsibilities as President and Chief Executive Officer of the Company. Mr. Todd received a smaller grant than the other Named Executives as he was not an executive officer of the Company at the time of this grant. On January 28, 2022, 8,529 shares of restricted stock were issued in aggregate to Named Executives that vest in three equal annual installments on January 31 of 2023, 2024 and 2025. Under these restricted stock awards, Mr. Gattoni received 3,281 shares, Messrs. Beacom, Coro and Kneller each received 1,640 shares, and Mr. Todd received 328 shares. The Compensation Committee awarded Mr. Gattoni a larger grant in recognition of Mr. Gattoni’s broader responsibilities as President and Chief Executive Officer of the Company. Mr. Todd received a smaller grant than the other Named Executives as he was not an executive officer of the Company at the time of this grant. On February 3, 2023, 8,317 shares of restricted stock were issued in aggregate to Named Executives that vest in three equal annual installments on January 31 of 2024, 2025 and 2026. Under these restricted stock awards, Mr. Gattoni received 2,773 shares and Messrs. Beacom, Coro, Kneller and Todd each received 1,386 shares. The Compensation Committee awarded Mr. Gattoni a larger grant in recognition of Mr. Gattoni’s broader responsibilities as President and Chief Executive Officer of the Company. On February 2, 2024, 10,593 shares of restricted stock were issued in aggregate to Named Executives that vest in three equal annual installments on January 31 of 2025, 2026 and 2027. Under these restricted stock awards, Mr. Lonegro received 5,297 shares and Messrs. Beacom, Coro, Kneller and Todd each received 1,324 shares. The Compensation Committee awarded Mr. Lonegro a larger grant in recognition of Mr. Lonegro’s broader responsibilities as President and Chief Executive Officer of the Company. The Compensation Committee believes that whereas the Regular RSU Awards are designed to incentivize the attainment of specific financial goals over a multi-year period (as well as rewarding for stock price appreciation), the Regular Restricted Stock Awards serve as a retention tool as they retain value during periods of adverse market volatility while also rewarding for stock price appreciation over time. The Compensation Committee believes that these two equity vehicles when used in conjunction with each other serve to reward long-term financial performance and stock price appreciation while also providing a retention-based benefit for the Named Executive in the event of shorter term market and/or economic turbulence. In determining the amount of the Regular RSU Awards and the Regular Restricted Stock Awards for each Named Executive, the Compensation Committee considered the full equity compensation component of each Named Executive’s annual compensation and allocated such component between Regular RSU Awards and Regular Restricted Stock Awards. Stock-based Awards – Special Restricted Stock Awards
Performance Based Compensation
On January 29, 2021, the Compensation Committee awarded 1,773 shares of restricted stock to Mr. Todd that vest in three equal annual installments on January 31 of 2024, 2025 and 2026. The Compensation Committee awarded Mr. Todd this non-recurring grant as a special retention award and in connection with his appointment as principal accounting officer. On February 2, 2024, the Compensation Committee awarded 10,594 shares of restricted stock to Mr. Lonegro that vest in two equal annual installments on February 2 of 2025 and 2026. The Compensation Committee awarded Mr. Lonegro this non-recurring grant as a sign-on bonus upon his hiring as President and Chief Executive Officer. Stock-based Awards – Grants of TSR-based RSU Awards to Mr. Lonegro On February 2, 2024, the Company and Mr. Lonegro entered into an agreement granting Mr. Lonegro 52,971 RSUs that vest based on a market condition (the “2024 Sign-On TSR RSU Award”) and an agreement granting Mr. Lonegro 5,297 RSUs that vest based on a market condition (the “2024 Regular TSR RSU Award”) (together the “2024 TSR RSU Awards”). The fair value of these RSU awards was determined at the time of grant based on the expected achievement of the market condition. The 2024 TSR RSU Awards may vest based on achievement in any measurement year of a total shareholder return (“TSR”) compound annual growth rate (“CAGR”) of 9% relative to the base year, to be measured annually starting after the sixth anniversary of the grant date and concluding after the tenth anniversary of the grant date. The TSR CAGR over the applicable vesting period is determined by comparing TSR as of the date of the applicable grant with TSR as of the applicable measurement date, in each case using a sixty-day measurement period, other than in the event of a change in control. In the event of a change in control of the Company occurring at any time, the PSUs will vest based on achievement of a stock price that equals 125% of the stock price that achieves the TSR CAGR of 9%. In addition, if any dividends are paid by the Company during the vesting period, dividend equivalents will be credited to Mr. Lonegro under the applicable award as additional RSUs that are eligible to vest based on the achievement of the TSR CAGR of the underlying RSUs to which such dividend equivalents relate. Any RSUs that vest will be settled in shares of Common Stock as soon as practicable after the applicable vesting date. Mr. Lonegro’s right to receive shares underlying the 2024 TSR RSU Awards is generally conditioned upon his continued employment through the applicable vesting dates. In the event of the termination of employment of Mr. Lonegro due to death or “disability” prior to February 2, 2027, no vesting would occur. In the event of the termination of employment of Mr. Lonegro due to death or “disability” after February 2, 2027, a measurement date would occur on the date of termination of employment and RSUs would be eligible to vest at a pro rata amount if the Target TSR CAGR was achieved. There are several reasons why the Compensation Committee believes the nature and terms of these grants of 2024 TSR RSU Awards to Mr. Lonegro, on the one hand, as opposed to the Regular RSU Awards, including those to Mr. Lonegro, on the other, are appropriate. The 2024 TSR RSU Awards, primarily consisting of the 2024 Sign-On TSR RSU Award to Mr. Lonegro made upon Mr. Lonegro’s hire as the Company’s new President and Chief Executive Officer, are intended to tie the amount of future vesting directly to the Company’s TSR over the vesting period, using growth in TSR over a longer term period from the date of grant, as compared to the vesting periods associated with the Regular RSU Awards, as an additional means to measure the performance of the Chief Executive Officer of the Company. The Regular RSU Awards are intended to be annual, recurring grants, subject to the discretion of the Compensation Committee, that the Compensation Committee believes will be the principal long-term performance-based compensation vehicle through which the Named Executives will be granted additional equity in the Company, along with, to a lesser extent, grants of restricted stock. The Compensation Committee believes that growth in operating income and pre-tax income per diluted share are key financial measures reflecting the long-term growth of the enterprise. The Compensation Committee also believes that the Company would have to achieve superior financial performance in order for a Named Executive to vest at the maximum level with respect to a Regular RSU Award granted in 2024. For example, in order for a Named Executive to vest at the maximum level with respect to a Regular RSU Award granted in 2024, the Company would need to achieve in 2026, 2027 or 2028, an average of a 100% increase in operating income and pre-tax earnings per diluted share compared to those achieved in fiscal year 2023. The Company believes that the granting of stock-based awards in the form of RSUs and restricted stock is designed to encourage the creation of long-term stockholder value as the number of RSUs that vest is dependent upon growth in the Company’s operating income and pre-tax income per diluted share and their value varies directly with the Company’s stock price and the benefit realized from restricted stock varies directly with the Company’s stock price. Further, the Compensation Committee believes that the Company’s use of stock-based awards is key as a retention tool, as the continued employment of the Named Executives is an important factor relating to the Company’s strategic execution and growth. Stock-based Awards – Grants of TSR-based RSU Awards to Mr. Gattoni During 2018, the Company and Mr. Gattoni entered into an agreement granting Mr. Gattoni 9,324 RSUs that had the potential to vest based on a market condition (the “2018 TSR RSU Award”). Portions of the 2018 TSR RSU Award vested on June 30, 2022, June 30, 2023 and June 30, 2024 and the remaining unvested RSUs were forfeited. The maximum number of common shares available for issuance under the 2018 TSR RSU Award equaled 150% of the number of RSUs awarded. The fair value of this RSU award was determined at the time of grant based on the expected achievement of the market condition at the end of each vesting period. During 2019, the Company and Mr. Gattoni entered into an agreement granting Mr. Gattoni 9,725 RSUs that had the potential to vest based on a market condition (the “2019 TSR RSU Award”). Portions of the 2019 TSR RSU Award vested on June 30, 2023 and June 30, 2024. Upon Mr. Gattoni’s retirement from employment on July 1, 2024, he forfeited the opportunity for additional vesting under the 2019 TSR RSU Award following his retirement date. The maximum number of common shares available for issuance under the 2019 TSR RSU Award equaled 150% of the number of RSUs awarded. The fair value of this RSU award was determined at the time of grant based on the expected achievement of the market condition at the end of each vesting period. Under the terms of the 2018 TSR RSU Award and the 2019 TSR RSU Award (collectively the “Gattoni TSR RSU Awards”), TSR CAGR over the applicable vesting period was determined as of the beginning and end of each performance period using a sixty day measurement period, other than in the event of a change in control. The “payout percentage” as of each vesting date is as follows, with straight line interpolation between performance levels:
Performance Based Compensation
| Performance Level | If TSR CAGR is: | Then the Payout Percentage is: | | Maximum | 12.0% or greater | 150% | | Target | 10.0% | 100% | | Threshold | 8.0% | 50% | | <Threshold | Less than 8.0% | 0% |
Performance Based Compensation
To the extent these Gattoni TSR RSU Awards were not vested at the maximum level in the chart above as of the first or second vesting dates, such Gattoni TSR RSU Awards were again eligible to vest at the next vesting date based on the “payout percentage” achieved as of such next vesting date. In addition, if any dividends were paid by the Company during the vesting period, dividend equivalents were credited to Mr. Gattoni under the applicable award as additional Gattoni TSR RSU Awards that are eligible to vest based on the “payout percentage” achieved as of the future vesting dates of the underlying Gattoni TSR RSU Awards to which such dividend equivalents relate. Any Gattoni TSR RSU Awards that vested were settled in shares of Common Stock as soon as practicable after the applicable vesting date.
Clawback Rights
Clawback Rights On August 10, 2023, the Board adopted a new clawback policy (the “Clawback Policy”) that provides for the recovery of certain “Incentive-Based Compensation” (as defined in the Clawback Policy) in the event of an “Accounting Restatement” (as defined in the Clawback Policy). The Clawback Policy is designed to comply with and be interpreted to be consistent with Section 10D of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), Rule 10D-1 promulgated under the Exchange Act and Nasdaq Listing Rule 5608. Effective October 1, 2023, the Clawback Policy requires that in the event the Company is required to prepare an Accounting Restatement, the Company shall promptly recoup the amount of any “Erroneously Awarded Compensation” (as defined in the Clawback Policy) received by any Named Executive during the three completed fiscal years immediately preceding the date on which the Company is required to prepare such Accounting Restatement within or immediately following those three completed fiscal years. The amount of Erroneously Awarded Compensation subject to recovery under the Clawback Policy, as determined by the Board, is the amount of Incentive-Based Compensation received by the Named Executive that exceeds the amount of Incentive-Based Compensation that would have been received by the Named Executive had it been determined based on the restated amounts. Amounts paid to a Named Executive under the Company’s annual ICP and amounts received by a Named Executive upon vesting of Regular RSU Awards or TSR-based RSU Awards granted to a Named Executive under the Employee Equity Plan are considered Incentive-Based Compensation subject to the Clawback Policy. This summary of the Clawback Policy is not intended to be complete and is qualified in its entirety by the Clawback Policy, a copy of which is filed as Exhibit 97.1 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 30, 2023, and incorporated herein by reference.
Key Executive Employment Protection Agreements
Key Executive Employment Protection Agreements The Board has approved the execution of Key Executive Employment Protection Agreements for each of the Named Executives to assure that each of these officers will have a minimum level of personal financial security in the context of a change in control transaction to avoid undue distraction due to the risks of job security and to enable such officer to act in the best interests of stockholders without being influenced by such officer’s economic interests. Each agreement provides certain severance benefits in the event of a change in control of the Company. Generally, (i) if on or before the second anniversary of a “change in control” (x) the Company terminates the covered executive’s employment for any reason other than for “cause” or “disability” or (y) the covered executive voluntarily terminates his employment for “good reason” or (ii) if the covered executive’s employment is terminated by the Company for any reason other than death, “disability” or “cause” or by the covered executive for “good reason” after the execution of a definitive agreement with respect to a change in control transaction but prior to the consummation thereof, and the transaction contemplated by such definitive agreement is subsequently consummated, such executive will be entitled to severance benefits consisting of a lump sum cash amount equal to a multiple of the sum of (A) the executive’s annual base salary and (B) the amount that would have been payable to the executive as an annual “threshold” incentive compensation bonus for the year in which the change in control occurs, determined by multiplying his annual base salary by his total “participant percentage participation” established for such year under the ICP. The applicable multiples are: two times for Messrs. Coro, Kneller, Lonegro and Todd and one time for Mr. Beacom. Severance multiples for Named Executives were established based on their position and the potential impact to their continued employment in the event of a change in control and to remain competitive within our industry. Each agreement also provides the covered executive with a pro rata payout of the “threshold” annual bonus amount for the year of employment termination of such covered executive and for continuation of medical benefits for up to one year from the date of employment termination. The Company believes that the terms of our Key Executive Employment Protection Agreements are consistent with market practice and assist us in retaining the services of our Named Executives.
Letter Agreement with Mr. Beacom
Letter Agreement with Mr. Beacom In connection with Mr. Beacom’s appointment as President of LSHI and each of the Agent-Based Operating Companies, the Company entered into a letter agreement with Mr. Beacom, dated November 15, 2024. Pursuant to this letter agreement, Mr. Beacom’s annual base salary increased to $400,000, and he will be eligible for an annual bonus under the Company’s annual ICP with a “threshold” target bonus percentage of 80% of his annual base salary. The letter agreement also provides that as of December 28, 2025 (the first day of the Company’s 2026 fiscal year), Mr. Beacom will transition to the role of Special Advisor to the Chief Executive Officer of the Company until his anticipated retirement from employment as of March 1, 2026. Under the letter agreement, Mr. Beacom’s base salary will remain the same in the Special Advisor position, but he will not be eligible for a bonus for any portion of the 2026 fiscal year, he will not receive any new equity grants under Landstar’s Employee Equity Plan, and his Key Executive Employment Protection Agreement will be terminated as of December 28, 2025.
Compensation Consultants
Compensation Consultants The Compensation Committee has the authority to hire and negotiate the terms of compensation for its advisers, including compensation consultants. During 2024, the Compensation Committee used the services of Compensation Strategies, Inc. to assist it in designing and structuring a long-term incentive award in connection with a sign-on equity grant for Mr. Lonegro. During 2023, the Compensation Committee used the services of Compensation Strategies, Inc. to assist it in reviewing an appropriate peer group of other transportation and logistics companies, and benchmarking CEO executive compensation, including base salary, annual incentive compensation and long-term incentive compensation, in comparison to that peer group in connection with the process to identify and hire Mr. Lonegro as the successor to Mr. Gattoni as the Company’s CEO. In prior years, the Compensation Committee used the services of Compensation Strategies, Inc. (i) to benchmark the Company’s executive compensation program, including base salary, annual incentive compensation and long-term incentive compensation, in comparison to an appropriate peer group of other transportation and logistics companies, (ii) to benchmark Director compensation, (iii) to review the Company’s compensation philosophy and the structure and various design features of each component of the executive compensation program, and (iv) to review the Company’s equity ownership guidelines for its Directors and Named Executives. The Compensation Committee determined that the work of the consultants did not raise any conflicts of interest taking into consideration the independence factors enumerated in Rule 10C-1(b) of the Exchange Act. No member of the Compensation Committee or any Named Executive has any affiliation with the consultants. In 2023, the Company paid $14,900 in fees to Compensation Strategies, Inc. with respect to its review of CEO executive compensation. In 2024, the Company paid $5,275 in fees to Compensation Strategies, Inc. with respect to its assistance in connection with a long-term incentive award for Mr. Lonegro.
Peer Group
Peer Group During 2023, the Compensation Committee used the services of Compensation Strategies, Inc. to assist it for purposes of benchmarking Chief Executive Officer compensation against a peer group consisting of 15 other transportation and logistics companies. This peer group consisted of:
Peer Group
| ArcBest Corporation | J.B. Hunt Transport Services, Inc. | Saia, Inc. | | C.H. Robinson Worldwide, Inc. | Knight-Swift Transportation Holdings, Inc. | Schneider National Inc. | | Daseke, Inc. (1) | Matson, Inc. | Universal Logistics Services, Inc. | | Forward Air Corporation | Old Dominion Freight Line, Inc. | Werner Enterprises, Inc. | | Hub Group, Inc. | Ryder System, Inc. | Yellow Corporation (1) |
Peer Group
| (1) Daseke, Inc. and Yellow Corporation have ceased to be publicly listed and are no longer used by the Company for purposes of peer group benchmarking. |
Tax Considerations
Tax Considerations The Tax Cuts and Jobs Act (the “Tax Reform Act”) was signed into law on December 22, 2017. Prior to the Tax Reform Act, Section 162(m) of the Code generally disallowed a tax deduction for compensation over $1 million paid to our Named Executive Officers who are considered “covered employees” under this rule. Performance-based compensation was exempt from this deduction limitation if specified requirements set forth in the Code and applicable Treasury Regulations were satisfied. The Company previously undertook to qualify substantial components of the performance-based incentive compensation available to Named Executives to be exempt from this deduction limitation. Beginning with fiscal year 2018, the Tax Reform Act eliminated the performance-based compensation exception to the deductibility limitation under Section 162(m), other than with respect to certain “grandfathered” performance-based awards granted prior to November 2, 2017. Performance-based equity awards that were granted under the Company’s stockholder-approved employee equity plan prior to November 2, 2017, including performance-based RSUs, were designed to meet these requirements. None of these awards remain outstanding. The Compensation Committee’s philosophy strongly emphasizes performance-based compensation, which had historically minimized the consequences of the Section 162(m) limit on deductibility. The Company believes that tax deductibility of compensation is an important factor, but not the sole factor, to be considered in setting executive compensation policy, and in light of the changes to Section 162(m), the Compensation Committee has authorized, and is expected to continue to authorize, payments that are not deductible for federal income tax purposes when the Compensation Committee believes that such payments are appropriate to attract, retain and incentivize executive talent.
Summary Compensation Table
Summary Compensation Table
Summary Compensation Table
| Name and Principal Occupation | Year | Salary (1) ($) | Bonus (2) ($) | Stock Awards (3) ($) | Non-Equity Incentive Plan Compensation (4) ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings (5) ($) | All Other Compensation (6) ($) | Total ($) | | Frank A. Lonegro | 2024 | 730,303 | 800,000 | 11,395,182 | — | 797 | 448,123 | 13,374,405 | | President and Chief Executive Officer | | | | | | | | | | James B. Gattoni | 2024 | 302,273 | — | — | — | 403,335 | 32,688 | 738,296 | | Former Special Advisor Former President and Chief Executive Officer | 2023 | 600,000 | — | 1,429,840 | — | 361,766 | 43,235 | 2,434,841 | | | 2022 | 600,000 | — | 1,429,976 | 2,500,000 | — | 44,772 | 4,574,748 | | James P. Todd | 2024 | 375,000 | — | 714,842 | — | 56,637 | 30,533 | 1,177,012 | | Vice President and Chief Financial Officer | 2023 | 340,000 | — | 714,830 | — | 53,584 | 36,394 | 1,144,808 | | | 2022 | 260,750 | — | 142,954 | 450,000 | — | 33,687 | 887,391 | | Michael K. Kneller | 2024 | 400,000 | — | 947,290 | — | 32,586 | 22,066 | 1,401,942 | | Vice President, General Counsel and Secretary | 2023 | 400,000 | — | 947,220 | — | 37,585 | 26,219 | 1,411,024 | | | 2022 | 400,000 | — | 947,337 | 835,000 | — | 27,107 | 2,209,444 | | Joseph J. Beacom | 2024 | 377,084 | — | 714,842 | — | 123,814 | 33,256 | 1,248,996 | | President, Landstar System Holdings, Inc. Former Vice President and Chief Safety and Operations Officer | 2023 | 375,000 | — | 714,830 | — | 200,831 | 31,214 | 1,321,875 | | | 2022 | 375,000 | — | 714,912 | 780,000 | — | 31,686 | 1,901,597 | | Ricardo S. Coro | 2024 | 375,000 | — | 714,842 | — | — | 29,224 | 1,119,066 | | Vice President and Chief Information Officer | 2023 | 375,000 | — | 714,830 | — | — | 27,455 | 1,117,285 | | | 2022 | 375,000 | — | 714,912 | 780,000 | — | 26,871 | 1,896,782 |
Summary Compensation Table
| (1) Amounts shown include any salary deferred at the election of the Named Executive under the Landstar 401(k) Savings Plan and/or the SERP. |
Summary Compensation Table
| (2) Represents a one-time cash bonus as compensation for forgoing a 2023 fiscal year bonus at Mr. Lonegro’s former employer. |
Summary Compensation Table
| (3) Stock award amounts for 2024, 2023 and 2022 reflect the aggregate grant date fair value of RSUs and restricted stock computed in accordance with generally accepted accounting principles. Assumptions used in calculating the fair market value of RSUs and restricted stock granted are disclosed in the footnotes to the Company’s audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 2024 filed with the SEC. Amounts shown are based upon the most probable outcome of the performance conditions for these stock awards. Assuming the highest level of performance is achieved, the maximum possible value of the stock awards granted to the named executive officers in 2024, using the grant date fair value, is: (i) $17,719,783 for Mr. Lonegro; (ii) $1,644,636 for Mr. Kneller; and (iii) $1,179,739 for Messrs. Beacom, Coro and Todd. Assuming the highest level of performance is achieved, the maximum possible value of the stock awards granted to the named executive officers in 2023, using the grant date fair value, is: (i) $2,359,736 for Mr. Gattoni; (ii) $1,644,558 for Mr. Kneller; and (iii) $1,179,778 for Messrs. Beacom, Coro and Todd. Assuming the highest level of performance is achieved, the maximum possible value of the stock awards granted to the named executive officers in 2022, using the grant date fair value, is: (i) $2,359,960 for Mr. Gattoni; (ii) $1,644,754 for Mr. Kneller; (iii) $1,179,904 for Messrs. Beacom and Coro; and (iv) $235,924 for Mr. Todd. |
Summary Compensation Table
| (4) These payments constitute payments under the ICP. Mr. Todd’s fiscal year 2022 non-equity incentive plan compensation was calculated based on six months of service prior to his promotion to CFO and six months of service as CFO. |
Summary Compensation Table
| (5) Represents aggregate earnings during each fiscal year on investments held on behalf of the Named Executives under the SERP. Amounts for 2022 exclude losses of $302,680, $35,534, $34,494 and $242,468 for Messrs. Gattoni, Todd, Kneller, and Beacom, respectively. |
Summary Compensation Table
| (6) Amounts include contributions made by the Company under the Landstar 401(k) Savings Plan on behalf of the Named Executives, contributions made by the Company under the SERP on behalf of the Named Executives, Health Savings Account (HSA) contributions made by the Company for those Named Executives electing to participate in the Company’s high deductible medical plan, the dollar value of term life insurance premiums paid by the Company on behalf of the Named Executives, dividends paid on unvested restricted stock, and sign-on benefits paid by the Company in the following amounts: |
Summary Compensation Table
| | 401(k) | SERP | HSA | Insurance Premiums | Dividends Paid on Unvested Restricted Stock | Sign-on Benefits (1) | Total | | 2024 | | | | | | | | | Frank A. Lonegro | 13,800 | 8,000 | 1,125 | 3,268 | 21,930 | 400,000 | 448,123 | | James B. Gattoni | 13,200 | — | 1,500 | 3,762 | 14,226 | — | 32,688 | | James P. Todd | 16,400 | — | 1,500 | 756 | 11,877 | — | 30,533 | | Michael K. Kneller | 8,500 | — | 1,500 | 2,070 | 9,996 | — | 22,066 | | Joseph J. Beacom | 14,975 | 2,708 | — | 5,577 | 9,996 | — | 33,256 | | Ricardo S. Coro | 13,684 | — | — | 5,544 | 9,996 | — | 29,224 |
Summary Compensation Table
| | 401(k) | SERP | HSA | Insurance Premiums | Dividends Paid on Unvested Restricted Stock | Sign-on Benefits (1) | Total | | 2023 | | | | | | | | | James B. Gattoni | 12,200 | — | 1,500 | 7,524 | 22,011 | — | 43,235 | | James P. Todd | 12,200 | 12,637 | 1,500 | 680 | 9,377 | — | 36,394 | | Michael K. Kneller | 12,367 | — | 1,500 | 1,350 | 11,002 | — | 26,219 | | Joseph J. Beacom | 12,200 | 4,400 | — | 3,612 | 11,002 | — | 31,214 | | Ricardo S. Coro | 12,841 | — | — | 3,612 | 11,002 | — | 27,455 | | 2022 | | | | | | | | | James B. Gattoni | 11,600 | — | 1,500 | 7,524 | 24,148 | — | 44,772 | | James P. Todd | 11,566 | 10,203 | 1,500 | 509 | 9,909 | — | 33,687 | | Michael K. Kneller | 12,183 | — | 1,500 | 1,350 | 12,074 | — | 27,107 | | Joseph J. Beacom | 11,600 | 4,400 | — | 3,612 | 12,074 | — | 31,686 | | Ricardo S. Coro | 11,997 | — | — | 3,612 | 11,262 | — | 26,871 |
Summary Compensation Table
| (1) Represents $400,000 for relocation benefits paid under and in accordance with the letter agreement between the Company and Mr. Lonegro dated December 4, 2023. |
Summary Compensation Table
Grants of Plan-Based Awards. The following table illustrates the threshold, target and maximum amounts that could have been payable in respect of 2024 services under the ICP. The following table also sets forth the number of and information about stock-based awards granted in fiscal year 2024 to each of the Named Executives of the Company.
Summary Compensation Table
| Name | Grant Date | Date of Compensation Committee Action | Estimated future payouts under non-equity incentive plan awards | | | Estimated future payouts under equity incentive plan awards | | | All other stock awards: Number of shares of stock or units (#) | Grant date fair value of stock and option awards ($) | Fair market value on date of grant ($/Sh) | | | | | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | | Frank A. Lonegro | February 2, 2024 (1) | January 23, 2024 | | | | — | 10,594 | 21,188 | | 1,859,940 | 188.78 | | | February 2, 2024 (2) | January 23, 2024 | | | | | | | 5,297 | 999,968 | 188.78 | | | February 2, 2024 (3) | January 23, 2024 | | | | | 5,297 | | | 594,112 | 188.78 | | | February 2, 2024 (4) | December 4, 2023 | | | | | | | 10,594 | 1,999,935 | 188.78 | | | February 2, 2024 (3) | December 4, 2023 | | | | | 52,971 | | | 5,941,227 | 188.78 | | | | | 730,303 | 2,190,909 | 3,000,000 | | | | | | | | James P. Todd | February 2, 2024 (1) | January 23, 2024 | | | | — | 2,648 | 5,296 | | 464,897 | 188.78 | | | February 2, 2024 (2) | January 23, 2024 | | | | | | | 1,324 | 249,945 | 188.78 | | | | | 187,500 | 562,500 | 2,500,000 | | | | | | | | Michael K. Kneller | February 2, 2024 (1) | January 23, 2024 | | | | — | 3,972 | 7,944 | | 697,346 | 188.78 | | | February 2, 2024 (2) | January 23, 2024 | | | | | | | 1,324 | 249,945 | 188.78 | | | | | 200,000 | 600,000 | 2,500,000 | | | | | | | | Joseph J. Beacom | February 2, 2024 (1) | January 23, 2024 | | | | — | 2,648 | 5,296 | | 464,897 | 188.78 | | | February 2, 2024 (2) | January 23, 2024 | | | | | | | 1,324 | 249,945 | 188.78 | | | | | 187,500 | 562,500 | 2,500,000 | | | | | | | | Ricardo S. Coro | February 2, 2024 (1) | January 23, 2024 | | | | — | 2,648 | 5,296 | | 464,897 | 188.78 | | | February 2, 2024 (2) | January 23, 2024 | | | | | | | 1,324 | 249,945 | 188.78 | | | | | 187,500 | 562,500 | 2,500,000 | | | | | | |
Summary Compensation Table
| (1) RSUs have five-year contractual lives and will vest on January 31 of 2027, 2028 and 2029 based on growth in operating income and pre-tax income per diluted share from continuing operations as compared to the results from the 2023 fiscal year. All unvested RSUs expire on March 1, 2029. The estimated future payouts under this award assume: (i) 200 percent of the number of units credited to the recipient under the granted award will vest at the maximum payout, (ii) 100 percent of the number of units credited to the recipient under the granted award will vest at the target and (iii) no awards are assumed to vest at the threshold. Amounts shown are based on the most probable outcome of the performance conditions for these stock awards. The grant date fair market value per share of this award was $188.78. |
Summary Compensation Table
| (2) Shares of restricted stock vest over three years at a rate of 33 1/3% per year on each of January 31 of 2025, 2026 and 2027. |
Summary Compensation Table
| (3) The 2024 TSR RSU Awards may vest based on achievement in any measurement year of a TSR CAGR of 9% relative to the base year, to be measured annually starting after the sixth anniversary of the grant date and concluding after the tenth anniversary of the grant date. The TSR CAGR over the applicable vesting period is determined as of the beginning and end of each performance period using a sixty-day measurement period. The grant date fair market value per share of these awards was $112.16. |
Summary Compensation Table
| (4) Shares of restricted stock vest over two years at a rate of 50% per year on each of February 2 of 2025 and 2026. |
Summary Compensation Table
Stock Vested. The following table sets forth the number and value of all RSUs and restricted shares that vested during the 2024 fiscal year by each of the Named Executives.
Summary Compensation Table
| | Stock Awards | | | Name | Number of shares acquired on vesting (#) | Value realized on vesting (1) ($) | | James B. Gattoni | 18,241 | 3,465,262 | | James P. Todd | 1,898 | 368,914 | | Michael K. Kneller | 4,714 | 916,260 | | Joseph J. Beacom | 4,714 | 916,260 | | Ricardo S. Coro | 4,714 | 916,260 |
Summary Compensation Table
| (1) The value realized represents the fair market value of the shares of Common Stock on the vesting date. The fair market value was calculated based upon the average of the high and low sale prices per share of Common Stock as reported on NASDAQ on the respective vesting dates. |
Summary Compensation Table
Outstanding Equity Awards at Fiscal Year End. The following table sets forth the outstanding equity awards held by the Named Executives at December 28, 2024 and corresponding market value based on the closing stock price of $174.32 on December 27, 2024.
Outstanding Equity Awards
Outstanding Equity Awards
Outstanding Equity Awards
| Name | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | 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 ($) | | Frank A. Lonegro | 15,891(1) | 2,770,119 | 69,375(3) | 12,093,450 | | James P. Todd | 3,540(2) | 617,093 | 6,308(3) | 1,099,611 | | Michael K. Kneller | 2,794(2) | 487,050 | 14,016(3) | 2,443,269 | | Joseph J. Beacom | 2,794(2) | 487,050 | 9,547(3) | 1,664,233 | | Ricardo S. Coro | 2,794(2) | 487,050 | 9,547(3) | 1,664,233 |
Outstanding Equity Awards
| (1) For Mr. Lonegro, 10,594 shares of restricted stock vest over two years at a rate of 50% per year on each of February 2 of 2025 and 2026 and 5,297 shares of restricted stock vest over three years at a rate of 33 1/3% per year on each of January 31 of 2025, 2026 and 2027. |
Outstanding Equity Awards
| (2) Shares of restricted stock vest over three years at a rate of 33 1/3% per year on each of January 31 of 2023, 2024 and 2025 for grants made in 2022; January 31 of 2024, 2025 and 2026 for grants made in 2023; and January 31 of 2025, 2026 and 2027 for grants made in 2024. |
Outstanding Equity Awards
| (3) For information regarding the vesting of RSUs, see “Compensation Discussion and Analysis – Performance Based Compensation – Stock-based Awards.” |
Outstanding Equity Awards
Nonqualified Deferred Compensation. The following table provides the contributions, earnings and balances under the SERP as of and for the fiscal year ended December 28, 2024 for the Named Executives:
Nonqualified Deferred Compensation
Nonqualified Deferred Compensation
Nonqualified Deferred Compensation
| Name | Executive Contributions in Last Fiscal Year ($) | Registrant Contributions in Last Fiscal Year ($) (1) | Aggregate Earnings in Last Fiscal Year ($) (2) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last Fiscal Year End ($) | | Frank A. Lonegro | 19,000 | 8,000 | 797 | | 27,797 | | James B. Gattoni | | | 403,335 | | 2,100,390 | | James P. Todd | | | 56,637 | | 458,095 | | Michael K. Kneller | | | 32,586 | | 306,400 | | Joseph J. Beacom | 37,708 | 2,708 | 123,814 | | 3,052,288 |
Nonqualified Deferred Compensation
| (1) Registrant contributions are reported within All Other Compensation in the Summary Compensation Table for all years presented. |
Nonqualified Deferred Compensation
| (2) Aggregate earnings, excluding losses, are reported within the Change in Pension Value and Nonqualified Deferred Compensation Earnings within the Summary Compensation Table for all years presented. |
Nonqualified Deferred Compensation
Eligible employees can elect to make deferred contributions to the SERP, based on a percentage of their base salary and/or bonus, subject to certain limitations. To the extent the employee has achieved the maximum allowable matching contribution under the Landstar System, Inc. 401(k) Savings Plan (the “401(k) Plan”), the Company will contribute an amount equal to 100% of the first 3% of salary contributions and 50% of the next 2% of such salary contributions, subject to certain limitations. Interest, earnings or appreciation (less losses and depreciation) with respect to investment balances included in the employee’s SERP account balance are credited to the employee’s investment balance. Distributions under the SERP of individual account balances credited on or after January 1, 2005, and earnings thereon, are made following termination of employment as to form of payment (i.e., lump sum or annual installments) and time of payment (i.e., within 30 days following the six-month anniversary of the employee’s termination of employment or within 30 days of March 1 of the year following the year of termination from employment of the participant) elected by the participant for that year’s contributions prior to the start of each year of participation, and otherwise in accordance with the terms of the SERP. Investments in the SERP include primarily mutual funds and are valued using quoted market prices. The table below shows the investment options available to an employee under the SERP and their annual rate of return for 2024 as reported by the administrator of the SERP.
Nonqualified Deferred Compensation
| Name of Fund | Rate of Return | Name of Fund | Rate of Return | | American Funds Euro Pacific Growth R5 | 5.3% | T. Rowe Price Retirement 2025 TR-A | 9.3% | | BlackRock Inflation Protected Bond A | 1.9% | T. Rowe Price Retirement 2030 TR-A | 10.7% | | Macquarie Small Cap Value | 11.1% | T. Rowe Price Retirement 2035 TR-A | 14.4% | | MassMutual Small Cap Growth Fund | 15.3% | T. Rowe Price Retirement 2040 TR-A | 13.1% | | MFS Growth R3 | 31.6% | T. Rowe Price Retirement 2045 TR-A | 13.9% | | MFS Value R3 | 11.6% | T. Rowe Price Retirement 2050 TR-A | 14.2% | | PGIM Total Return Bond Z | 2.8% | T. Rowe Price Retirement 2055 TR-A | 14.2% | | Prudential Guaranteed Income Fund Class 3 | 2.1% | T. Rowe Price Retirement 2060 TR-A | 14.2% | | T. Rowe Price International Discovery | 3.7% | Vanguard 500 Index Admiral | 24.9% | | T. Rowe Price Mid-Cap Growth Fund | 7.6% | Vanguard Mid Cap Index Admiral | 15.2% | | T. Rowe Price Mid-Cap Value Fund | 16.5% | Vanguard Small Cap Index Adm | 14.2% | | T. Rowe Price Retirement 2010 Fund | 8.5% | Vanguard Total Bond Market Index Adm | 1.2% | | T. Rowe Price Retirement 2015 TR-A | 8.8% | Vanguard Total Intl Stock Index Admiral | 5.2% | | T. Rowe Price Retirement 2020 TR-A | 9.2% | | |
Potential Payment Upon Termination or Change in Control
Potential Payment Upon Termination or Change in Control The table below reflects the amount of compensation payable to each of the current Named Executives in the event of a qualifying termination of employment in connection with a change in control or possible change in control under the Key Executive Employment Protection Agreements, as further described in the “Compensation Discussion and Analysis” section of this Proxy Statement as of the end of the Company’s 2024 fiscal year. In addition, in accordance with the provisions of the Company’s stock-based award plans, all outstanding, non-vested restricted stock are subject to accelerated vesting upon a change in control of the Company. The intent of the potential acceleration of non-vested restricted stock in the event of a change in control is to enable the executive to vest in an award primarily intended as a retention tool that would otherwise have vested based solely on the passage of time and the executive’s continued employment with the Company, which may not be possible or permitted by an acquirer following a change in control of the Company due to no fault of the executive. With respect to outstanding Regular RSU Awards granted to Named Executives, unless the Compensation Committee determines otherwise, in the event a change in control occurs prior to January 31, 2026 with respect to the 2021 awards, prior to January 31, 2027 with respect to the 2022 awards, prior to January 31, 2028 with respect to the 2023 awards and prior to January 31, 2029 with respect to the 2024 awards, 20% of the number of RSUs credited to the Named Executive under each such RSU award would vest to the extent such amount would not exceed the number of RSUs that are eligible to vest at the maximum level under the applicable award. The intent of these partial potential accelerations of Regular RSU awards in the event of a change in control is to compensate the executive for 20% of the target amount under each such award in lieu of potential vesting for the year of the change in control. In addition, with respect to the 2022, 2023 and 2024 Regular RSU Awards, unless the Compensation Committee determines otherwise, in the event a change in control occurs prior to January 31, 2025, January 31, 2026, or January 31, 2027, respectively, a number of RSUs would vest under each such award assuming for this purpose that the applicable Performance Hurdle was calculated based on the results from continuing operations for the most recently completed fiscal year prior to the change in control compared to the results from continuing operations for the 2021, 2022 and 2023 fiscal years, respectively. The intent of these partial potential accelerations of Regular RSU Awards in the event of a change in control is to compensate the executive for the performance of the Company achieved during fiscal years completed during the initial three year performance period under each award where the change in control occurs prior to the first vesting date under such award approximately three years from the date of grant. With respect to the 2024 TSR RSU Awards to Mr. Lonegro, in the event of a change in control of the Company occurring at any time, the RSUs would vest based on achievement of a stock price that equals 125% of the stock price that achieves the TSR CAGR of 9%.
Potential Payment Upon Termination or Change in Control
| Name | Change in Control (1) ($) | | Frank A. Lonegro | 7,174,160 | | James P. Todd | 2,181,487 | | Michael K. Kneller | 2,407,676 | | Joseph J. Beacom | 1,601,869 | | Ricardo S. Coro | 2,164,369 |
Potential Payment Upon Termination or Change in Control
| (1) Change in Control amounts include severance benefits, pro rata threshold bonus and medical benefits under the Key Executive Employment Protection Agreements, as described further in the “Compensation Discussion and Analysis”, plus the intrinsic value of unvested restricted stock and a portion of RSUs outstanding based on the closing price of the Company’s common stock of $174.32 on December 27, 2024 and assuming partial accelerated vesting upon a change in control of the Company, effective as of that date. The value of medical benefits for each Named Executive equals the payments that may be waived by the Company on behalf of such Named Executive for the continuation of existing coverage for up to one year under the Company’s medical benefit plans pursuant to such Named Executive’s Key Executive Employment Protection Agreement. |
Potential Payment Upon Termination or Change in Control
Apart from the payments described in connection with a change in control, in the event of the termination of employment of a Named Executive due to death or “disability”, non-vested restricted stock held by such Named Executive would accelerate and vest. The value of such acceleration for Mr. Lonegro is $2,770,119, for Mr. Todd is $617,093 and for Messrs. Kneller, Beacom and Coro is $487,050. In addition, with respect to the sign-on bonus of $2,000,000 worth of restricted stock, granted to Mr. Lonegro on February 2, 2024, that vests in two equal annual installments on each of the first two anniversaries of Mr. Lonegro’s start date, such shares would also accelerate and vest upon a termination of Mr. Lonegro without “cause” or upon a resignation by Mr. Lonegro for “good reason”. The value of such acceleration for Mr. Lonegro is $1,846,746. The value in each case for each Named Executive is based on the closing price of the Common Stock of $174.32 on December 27, 2024. In addition, in the event of the termination of employment of a Named Executive due to death or “disability”, the Regular RSU Awards held by such Named Executive would remain outstanding and continue to vest on the normal schedule based on actual achievement of the applicable Performance Hurdles. With respect to the 2024 TSR RSU Awards to Mr. Lonegro, in the event of the termination of employment of Mr. Lonegro due to death or “disability” prior to February 2, 2027, no vesting would occur. In the event of the termination of employment of Mr. Lonegro due to death or “disability” after February 2, 2027, a measurement date would occur on the date of termination of employment and RSUs would be eligible to vest at a pro rata amount if the Target TSR CAGR was achieved. Outside the circumstances described above with respect to a qualifying termination of employment in connection with a change in control or upon the Named Executive’s death or “disability”, none of the Named Executives, other than Mr. Lonegro, is entitled to severance benefits. As further described above under “Compensation Discussion and Analysis – Letter Agreement with Mr. Lonegro,” if the Company terminates Mr. Lonegro’s employment without “cause” other than in a situation where severance is payable under the Key Executive Employment Protection Agreement, the Company will pay Mr. Lonegro severance within 30 days of the one-year anniversary of his termination date in the amount of Mr. Lonegro’s annual base salary and “threshold” target annual bonus and will continue to cover his medical benefits for 12 months following his termination, subject, in each case, to Mr. Lonegro’s signing a release of claims in favor of the Company and its affiliates and continued compliance with applicable restrictive covenants.
CEO Pay Ratio
CEO Pay Ratio As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, Landstar is providing the following information regarding the relationship of compensation of employees of the Company and its affiliates and compensation of the Company’s President and Chief Executive Officer. The pay ratio set forth below is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K. Landstar identified its “median employee” by examining the 2024 total cash compensation for all individuals, excluding our CEO, who were employed by the Company on December 28, 2024, the last day of the Company’s 2024 fiscal year. All employees, whether employed on a full-time, part-time or temporary basis, were included in this calculation. The Company (i) did not make any assumptions, adjustments or estimates with respect to total cash compensation, (ii) did not annualize the compensation for any employees that were not employed by Landstar or any of its affiliates for all of 2024, and (iii) did not make any “cost of living” adjustments to the compensation of any employees. The Company believes the use of total cash compensation for all employees is a consistently applied compensation measure as the Company does not widely distribute annual equity awards throughout its employee workforce. After identifying the median employee based on total cash compensation, the Company calculated annual total compensation for such employee using the same methodology used for the Named Executives as set forth in the 2024 Summary Compensation Table. As further described above under “Compensation Discussion and Analysis – Letter Agreement with Mr. Lonegro”, in connection with the hiring of Mr. Lonegro as the Company’s next President and Chief Executive Officer, the Company provided Mr. Lonegro with a sign-on bonus of $2,000,000 worth of restricted stock, granted on February 2, 2024, under the Company’s Employee Equity Plan that vests in two equal annual installments on each of the first two anniversaries of Mr. Lonegro’s start date, $800,000 in cash to compensate Mr. Lonegro for forgoing a 2023 bonus with his former employer, a grant of $10,000,000 worth of PSUs, which will vest based on achievement in any measurement year of TSR of a CAGR of 9% relative to the base year, to be measured annually starting after the sixth anniversary of his start date and concluding after the tenth anniversary of his start date, and $400,000 in cash for relocation benefits (collectively, the “CEO Sign-on Compensation Elements”). Each of the CEO Sign-on Compensation Elements are reflected in the calculation of CEO pay used to determine the 2024 CEO to median employee pay ratio, which as illustrated in the table below, was 244.6:1. However, it should be noted that as each of the CEO Sign-on Compensation Elements specifically related to the hiring of Mr. Lonegro, it is not anticipated that these CEO Sign-on Compensation Elements will be recurring elements of Mr. Lonegro’s compensation arrangements during his tenure as the Company’s President and CEO.
CEO to Median Employee Pay Ratio
CEO to Median Employee Pay Ratio
CEO to Median Employee Pay Ratio
| | President & CEO | | Median Employee | | Base Salary (1) | $800,000 | | $53,473 | | Stock Awards | 11,395,182 | | — | | Bonus | 800,000 | | 1,000 | | Change in Pension Value | 797 | | — | | All Other Compensation (2) | 450,132 | | 491 | | Total | $13,446,111 | | $54,964 | | CEO Pay to Median Employee Pay Ratio | 244.6 | : | 1 |
CEO to Median Employee Pay Ratio
| (1) Base salary for the President and CEO includes an adjustment from the amount presented in the Summary Compensation Table to reflect Mr. Lonegro’s annualized salary of $800,000 as though he was employed by Landstar for all of 2024. |
CEO to Median Employee Pay Ratio
| (2) All Other Compensation for the President and CEO includes an adjustment from the amount presented in the Summary Compensation Table to reflect annualized HSA contributions made by the Company for Mr. Lonegro of $1,500 and annualized term life insurance premiums paid by the Company on behalf of Mr. Lonegro of $4,902 as though Mr. Lonegro was employed by and eligible for benefits from Landstar for all of 2024. |
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K, Landstar is providing the following additional information regarding the relationship between executive compensation and the financial performance of the Company. For further information concerning the Company’s variable pay-for-performance philosophy and how the Company aligns executive compensation with the Company’s performance, please refer to “ Compensation Discussion and Analysis ” in this Proxy Statement. The following table summarizes the “compensation actually paid” to (i) the current Principal Executive Officer (“Current PEO”), (ii) the former Principal Executive Officer (“Former PEO”) and (ii) the average “compensation actually paid” to the remaining Named Executive Officers other than the PEO with respect to applicable fiscal years. “Compensation actually paid” does not correlate to the total amount of cash or equity compensation that the executive actually realized or was paid during the fiscal year. Instead, it is a nuanced calculation that includes the increase (or decrease) in value of certain elements of compensation (i.e., equity compensation) over the fiscal year, even if granted in a prior year. The amounts that the executive will ultimately receive with respect to these types of compensation (i.e., when and if the equity awards vest) are likely to be different from the amounts disclosed in this column of the Pay Versus Performance table set forth below. The following Pay Versus Performance table also provides certain information describing the Company’s financial performance for each of the covered fiscal years.
Pay Versus Performance Table
Pay Versus Performance Table
Pay Versus Performance Table
| Year | Summary Compensation Table Total for Current PEO (1) | Compensation Actually Paid to Current PEO (2) | Summary Compensation Table Total for Former PEO (3) | Compensation Actually Paid to Former PEO (4) | Average Summary Compensation Table Total for Non-PEO Named Executives (5) | Average Compensation Actually Paid to Non-PEO Named Executives (6) | Value of Initial Fixed $100 Investment Based On: | | Net Income (9) | Diluted Earnings per Share (10) | | | | | | | | | Total Shareholder Return (7) | Peer Group Total Shareholder Return (8) | | | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | (k) | | 2024 | 13,374,405 | 10,825,294 | 738,296 | (2,217,085) | 1,236,754 | 466,402 | 170.13 | 146.58 | 195,946,000 | 5.51 | | 2023 | | | 2,434,841 | 2,965,714 | 1,248,748 | 657,430 | 185.64 | 145.37 | 264,394,000 | 7.36 | | 2022 | | | 4,574,748 | 2,935,420 | 1,796,669 | 1,281,181 | 153.21 | 122.45 | 430,914,000 | 11.76 | | 2021 | | | 5,398,583 | 17,834,936 | 3,193,054 | 6,520,834 | 159.05 | 148.01 | 381,524,000 | 9.98 | | 2020 | | | 2,699,091 | 4,945,811 | 1,231,859 | 1,175,865 | 122.56 | 114.50 | 192,106,000 | 4.98 |
Pay Versus Performance Table
| (1) The dollar amounts reported in column (b) are the amounts of total compensation reported for Mr. Lonegro, the Company’s current President and Chief Executive Officer and current PEO, for each corresponding year in the “Total” column of the Summary Compensation Table included in the section “Compensation of Named Executives ” in this Proxy Statement. As Mr. Lonegro was hired on February 2, 2024, there was no compensation paid by the Company to Mr. Lonegro with respect to fiscal years 2023, 2022, 2021 or 2020. |
Pay Versus Performance Table
| (2) The dollar amounts reported in column (c) represent the amount of “compensation actually paid” to Mr. Lonegro, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Mr. Lonegro during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to Mr. Lonegro’s total compensation for each year to determine the compensation actually paid: |
Pay Versus Performance Table
| Year | Reported Summary Compensation Table Total for Current PEO | Reported Value of Equity Awards (a) | Equity Award Adjustments (b) | Compensation Actually Paid to Current PEO | | 2024 | 13,374,405 | 11,395,182 | 8,846,071 | 10,825,294 |
Pay Versus Performance Table
| (a) The grant date fair value of equity awards represents the total of the amounts reported in the “Stock Awards” column in the Summary Compensation Table for the applicable year. |
Pay Versus Performance Table
| (b) The equity award adjustments for each applicable year include the addition (or subtraction, as applicable) of the following: (i) the year-end fair value of any equity awards granted in the applicable year that are outstanding and unvested as of the end of the year; (ii) the amount of change as of the end of the applicable year (from the end of the prior fiscal year) in fair value of any awards granted in prior years that are outstanding and unvested as of the end of the applicable year; (iii) for awards granted in prior years that vest in the applicable year, the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in fair value; (iv) for awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the applicable year, a deduction for the amount equal to the fair value at the end of the prior fiscal year; and (v) the dollar value of any dividends or other earnings paid on equity awards in the applicable year prior to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total compensation for the applicable year. The fair value of equity awards at each measurement date is computed in a manner consistent with the fair value methodology used to account for equity awards in the Company’s audited consolidated financial statements in accordance with generally accepted accounting principles and included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 2024. For restricted stock awards, the fair value as of the end of the covered fiscal year is computed as the unvested restricted shares outstanding as of the end of the covered fiscal year multiplied by the Company’s closing stock price as of the last business day of the covered fiscal year. For RSUs with a performance or market condition, the fair value as of the end of the covered fiscal year is computed based on the unvested RSUs expected to vest based on the most probable outcome of the performance or market condition for these awards multiplied by the Company’s closing stock price as of the last business day of the covered fiscal year or based on a Monte Carlo simulation model to determine fair value as of the end of the covered fiscal year. For stock awards vested during the covered fiscal year, the fair value at vesting is calculated as the number of shares vested multiplied by the average of the high and low stock prices on the vesting date. The amounts deducted or added in calculating the equity award adjustments are as follows: |
Pay Versus Performance Table
| Year | Year End Fair Value of Equity Awards Granted in the Year | Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year | Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation | Total Equity Award Adjustments | | 2024 | 8,846,071 | — | — | — | — | 8,846,071 |
Pay Versus Performance Table
| (3) The dollar amounts reported in column (d) are the amounts of total compensation reported for Mr. Gattoni, the Company’s former President and Chief Executive Officer and former PEO, for each corresponding year in the “Total” column of the Summary Compensation Table included in the section “Compensation of Named Executives ” in this Proxy Statement. |
Pay Versus Performance Table
| (4) The dollar amounts reported in column (e) represent the amount of “compensation actually paid” to Mr. Gattoni, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Mr. Gattoni during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to Mr. Gattoni’s total compensation for each year to determine the compensation actually paid, using the same methodology described above in Note 3: |
Pay Versus Performance Table
| Year | Reported Summary Compensation Table Total for Former PEO | Reported Value of Equity Awards | Equity Award Adjustments (a) | Compensation Actually Paid to Former PEO | | 2024 | 738,296 | — | (2,955,381) | (2,217,085) | | 2023 | 2,434,841 | 1,429,840 | 1,960,713 | 2,965,714 | | 2022 | 4,574,748 | 1,429,976 | (209,352) | 2,935,420 | | 2021 | 5,398,583 | 1,429,787 | 13,866,140 | 17,834,936 | | 2020 | 2,699,091 | 1,429,976 | 3,676,696 | 4,945,811 |
Pay Versus Performance Table
| (a) The amounts deducted or added in calculating the equity award adjustments are as follows: |
Pay Versus Performance Table
| Year | Year End Fair Value of Equity Awards Granted in the Year | Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year | Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation | Total Equity Award Adjustments | | 2024 | — | — | (67,107) | (2,888,274) | — | (2,955,381) | | 2023 | 536,991 | 828,295 | 595,427 | — | — | 1,960,713 | | 2022 | 872,415 | (393,513) | (688,254) | — | — | (209,352) | | 2021 | 3,066,905 | 10,203,279 | 595,956 | — | — | 13,866,140 | | 2020 | 1,325,645 | 2,424,469 | (73,418) | — | — | 3,676,696 |
Pay Versus Performance Table
| (5) The dollar amounts reported in column (f) represent the average of the amounts reported for the Company’s Named Executives as a group (excluding Mr. Lonegro and Mr. Gattoni) in the “Total” column of the Summary Compensation Table in each applicable year. The Named Executives (excluding Mr. Lonegro and Mr. Gattoni) included for purposes of calculating the average amounts in each applicable year are as follows: (i) for 2024 and 2023, Messrs. Beacom, Coro, Kneller and Todd; (ii) for 2022, Messrs. Beacom, Coro, Kneller and Todd, and Federico L. Pensotti; (iii) for 2021, Messrs. Beacom, Coro, Kneller and Pensotti; and (iv) for 2020, Messrs. Beacom, Coro and Kneller, and L. Kevin Stout. |
Pay Versus Performance Table
| (6) The dollar amounts reported in column (g) represent the average amount of “compensation actually paid” to the Named Executives as a group (excluding Mr. Lonegro and Mr. Gattoni), as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the Named Executives as a group (excluding Mr. Lonegro and Mr. Gattoni) during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to average total compensation for the Named Executives as a group (excluding Mr. Lonegro and Mr. Gattoni) for each applicable year to determine the “compensation actually paid”, using the same methodology described above in Note 2: |
Pay Versus Performance Table
| Year | Average Reported Summary Compensation Table Total for Non-PEO Named Executives | Average Reported Value of Equity Awards | Average Equity Award Adjustments (a) | Average Compensation Actually Paid to Non-PEO Named Executives | | 2024 | 1,236,754 | 772,954 | 2,602 | 466,402 | | 2023 | 1,248,748 | 772,928 | 181,610 | 657,430 | | 2022 | 1,796,669 | 693,490 | 178,002 | 1,281,181 | | 2021 | 3,193,054 | 723,584 | 4,051,364 | 6,520,834 | | 2020 | 1,231,859 | 714,932 | 658,938 | 1,175,865 |
Pay Versus Performance Table
| (a) The amounts deducted or added in calculating the total average equity award adjustments are as follows: |
Pay Versus Performance Table
| Year | Average Year End Fair Value of Equity Awards Granted in the Year | Year over Year Average Change in Fair Value of Outstanding and Unvested Equity Awards | Year over Year Average Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | Average Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year | Average Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation | Total Average Equity Award Adjustments | | 2024 | 404,081 | (404,366) | 2,887 | — | — | 2,602 | | 2023 | 268,399 | (178,137) | 91,348 | — | — | 181,610 | | 2022 | 349,416 | 170,847 | (183,146) | (159,115) | — | 178,002 | | 2021 | 1,342,266 | 2,684,379 | 24,719 | — | — | 4,051,364 | | 2020 | 662,675 | 8,754 | (12,491) | — | — | 658,938 |
Pay Versus Performance Table
| (7) This column illustrates the Cumulative TSR that would have been realized as of the end of the measurement period, assuming reinvestment of dividends throughout, by an investor who invested $100 in shares of Common Stock at the beginning of the measurement period. The measurement period for purposes of the calculation of Cumulative TSR is the period beginning as of the market close on the last trading day before the commencement of the Company’s 2020 fiscal year, the first year included in the Pay Versus Performance Table, and ending as of the end of each of the reported fiscal years. |
Pay Versus Performance Table
| (8) Represents the TSR that would have been realized by an investor, assuming reinvestment of dividends, who invested $100 in the peer group at the beginning of the measurement period. The peer group used for this purpose is the following published industry index: the Dow Jones Transportation Stock Index. The peer group referred to throughout this Pay Versus Performance section is separate and distinct from the peer group referred to in “Compensation Discussion and Analysis” above. |
Pay Versus Performance Table
| (9) The dollar amounts reported represent the amount of net income reflected in the Company’s audited consolidated financial statements for the applicable year. |
Pay Versus Performance Table
| (10) The Company determined diluted earnings per share to be the Company Selected Measure, which in the Company’s assessment represents the most important financial performance measure (that is not otherwise required to be disclosed in the table) used by the Company to link “compensation actually paid” to the Company’s Named Executive for the most recently completed fiscal year to Company performance. The dollar amounts reported represent the amount of diluted earnings per share reflected in the Company’s audited consolidated financial statements for the applicable year. |
Analysis of the Information Presented in the Pay Versus Performance Table
Analysis of the Information Presented in the Pay Versus Performance Table As described in greater detail in the section “ Compensation Discussion and Analysis ”, the Company’s philosophy is to pay annual compensation generally in cash, with long-term incentive compensation paid in the form of stock-based awards. Base salary is intended to constitute a modest percentage of total compensation. The ICP is designed to pay substantial compensation for superior performance. Stock-based awards have historically accounted for a significant portion of each Named Executive’s total compensation. The Company’s performance-based compensation programs are designed to encourage the Company’s Named Executives to achieve various financial goals linked to operating objectives both for the Company’s upcoming fiscal year as well as for the longer term performance of the enterprise. While the Company utilizes several performance measures to align executive compensation with Company performance, all of those Company measures are not presented in the Pay Versus Performance table. Moreover, the Company generally seeks to incentivize long-term performance, and therefore does not specifically align the Company’s performance measures with “compensation actually paid” (as computed in accordance with Item 402(v) of Regulation S-K) for a particular year.
Relationships Between Information Presented in the Pay Versus Performance Table
Relationships Between Information Presented in the Pay Versus Performance Table In accordance with Item 402(v) of Regulation S-K, the Company is providing the following information relating to relationships between information presented in the Pay Versus Performance table. As noted above, “compensation actually paid” does not correlate to the total amount of cash or equity compensation that the executive actually realized or was paid during the fiscal year. Instead, it is a nuanced calculation that includes the increase (or decrease) in value of certain elements of compensation ( i.e. , equity compensation) over the fiscal year, even if granted in a prior year. The amounts that the executive will ultimately receive with respect to these types of compensation ( i.e. , when and if the equity awards vest) are likely to be different from the amounts disclosed in this column of the Pay Versus Performance table. “Compensation Actually Paid” and Cumulative TSR The following chart presents the amount of “compensation actually paid” to Mr. Lonegro (the current PEO), Mr. Gattoni (the former PEO) and the average amount of “compensation actually paid” to the Company’s Named Executives as a group (excluding Mr. Lonegro and Mr. Gattoni), and the Company’s cumulative TSR over the five years presented in the Pay Versus Performance table. “Compensation Actually Paid” and Net Income The following chart presents the amount of “compensation actually paid” to Mr. Lonegro (the current PEO), Mr. Gattoni (the former PEO) and the average amount of “compensation actually paid” to the Company’s Named Executives as a group (excluding Mr. Lonegro and Mr. Gattoni), and the Company’s net income over the five years presented in the Pay Versus Performance table. “Compensation Actually Paid” and Diluted Earnings Per Share The following chart presents the amount of “compensation actually paid” to Mr. Lonegro (the current PEO), Mr. Gattoni (the former PEO) and the average amount of “compensation actually paid” to the Company’s Named Executives as a group (excluding Mr. Lonegro and Mr. Gattoni), and the Company’s diluted earnings per share over the five years presented in the Pay Versus Performance table. Cumulative TSR of the Company and Cumulative TSR of the Dow Jones Transportation Stock Index As demonstrated by the following graph, the Company’s cumulative TSR over the five-year period presented in the table was 70%, while the cumulative TSR of the peer group presented for this purpose, the Dow Jones Transportation Stock Index, was 47% over the five years presented in the table.