DEF 14A of DMC Global Inc.
Filed Apr 2, 2024 · FY20230001308179-24-000424
NOMINEES
NOMINEES The names of the nominees and certain information about them are set forth below. In addition, we have included information about each nominee’s specific experience, qualifications, attributes and skills that led our Board of Directors to conclude that the nominee should serve as a director of the Company, in light of our business and corporate strategy.
NOMINEES
| Name | Position | Age | | Michael L. Kuta | Director, President and Chief Executive Officer | 49 | | David C. Aldous | Director, Chairman | 67 | | Ruth I. Dreessen | Director | 68 | | Michael A. Kelly | Director | 67 | | James O’Leary | Director | 61 | | Clifton Peter Rose | Director | 72 | | Ouma Sananikone | Director | 66 |
NOMINEES
| Director since: 2023 Committees: • Risk | MICHAEL L. KUTA Skills and Qualifications • Strong financial analysis and management skills • Extensive skills in strategic planning and corporate development in the industries in which the Company and its customers operate Mr. Kuta was appointed as our President, Chief Executive Officer and a director in August 2023. He previously was DMC’s interim co-CEO, a position he assumed in January 2023. From 2014 to January 2023, Mr. Kuta was DMC’s Chief Financial Officer. Prior to joining DMC, he held a variety of financial and executive leadership roles with The Lubrizol Corporation, a $6 billion business of Berkshire Hathaway, and at Lincoln Electric, a global leader in advanced welding equipment. Mr. Kuta is experienced in managing a variety of complex financing transactions and assisting in the development of long-range strategic business unit growth plans. He has expertise in integrating mergers and acquisitions, managing capital structure, debt and equity financing, building and developing financial teams, and providing financial and operational leadership. Mr. Kuta’s industry experience spans industrial, energy and petrochemical sectors. He earned a bachelor’s degree in accounting from Kent State University and an MBA in finance from Case Western Reserve University. He also is a Certified Public Accountant (currently inactive). |
NOMINEES
| DMC GLOBAL INC. • 2024 PROXY STATEMENT | 8 |
NOMINEES
| Director since: 2013 Independent Committees: • Audit • Risk | DAVID C. ALDOUS Skills and Qualifications • Current and practical experience in leadership of global operations, financial analysis, project management, risk management, and health, environment, safety and security matters • Over 30 years of corporate leadership experience in the energy, alternative energy, nanotechnology, chemical and petrochemical industries • Extensive skills in strategic planning and corporate development in the industries in which the Company and its customers operate • Extensive experience in mergers, acquisitions, and divestments Mr. Aldous was appointed as a director in July 2013. He served as non-executive Chairman of the Board from May 2018 until his appointment as interim co-President and CEO from January 2023 until August 2023, after which time he was reappointed as Chairman. From March 2012 until September 2022, he served as the Chief Executive Officer and Director of Rive Technology Inc., a privately-held provider of solutions for diffusion-limited reactions to the energy, chemicals, biofuel and water industries. Prior to joining Rive Technology Inc., Mr. Aldous served as Chief Executive Officer and Director of Range Fuels Inc., a clean energy and biofuels company from January 2009 to February 2012. Mr. Aldous also was employed for more than 20 years by Royal Dutch Shell, most recently as Executive Vice President, Strategy and Portfolio, and served as President of Shell Canada Products, where he led an $11 billion integrated oil business. He also served as President, CEO and Director at CRI/Criterion Inc., a multi-billion dollar global catalyst company. Mr. Aldous has served on the Board of Directors of a number of companies and joint ventures inside and outside Royal Dutch Shell. Mr. Aldous holds a B.S. in Fuels Engineering from the University of Utah and an MBA, with distinction, from the J.L. Kellogg Graduate School of Management at Northwestern University. |
NOMINEES
| Director since: 2020 Independent Committees: • Audit (Chair) | RUTH I. DREESSEN Skills and Qualifications • Extensive financial and management background in investment banking and private equity firms in the chemical and energy industries • Substantial experience in financial analysis, finance and risk management and strategic planning • Over two decades of financial leadership experience in the chemical, energy and petrochemical industries Ms. Dreessen was appointed as a director in October 2020. She has more than 25 years of experience in financial leadership roles, specifically in the chemical industry. Ms. Dreessen currently serves as an Operating Partner of Triten Energy Partners, a private equity firm. From 2012 to 2023, she served as a director, and since 2015, Chairman of Gevo, Inc., a publicly held company focused on sustainable aviation fuel. From 2010 to December 2018, Ms. Dreessen served as Managing Director of Lion Chemical Partners, LLC, a private equity firm focused on chemical and related industries. Prior to joining Lion Chemical Partners, Ms. Dreessen served as the Executive Vice President and Chief Financial Officer of TPC Group Inc. from 2005 to 2010. Before joining TPC Group, Ms. Dreessen served as Senior Vice President, Chief Financial Officer and Director of Westlake Chemical Corporation. Previously she spent 21 years at J.P. Morgan Securities LLC and predecessor companies, ultimately as a Managing Director of chemicals investment banking. Ms. Dreessen received her undergraduate degree from the New College of Florida and holds a master’s degree in International Affairs from Columbia University. Ms. Dreessen has also earned a CERT Certificate in Cybersecurity Oversight from Carnegie Mellon University. |
NOMINEES
| DMC GLOBAL INC. • 2024 PROXY STATEMENT | 9 |
NOMINEES
| Director since: 2020 Independent Committees: • Compensation • Corporate Governance and Nominating • Risk (Chair) | MICHAEL A. KELLY Skills and Qualifications • Diversified background in finance, operations and the life sciences industry • Extensive skills in executive leadership, finance, operations and management • In depth experience with a multinational company operating in global markets Current Public Company Directorships: • Amicus Therapeutics, Inc. • NeoGenomics, Inc. • Prime Medicine, Inc. Mr. Kelly was appointed as a director in July 2020. He has more than two decades of executive experience in senior leadership roles in the life sciences industry. He founded and has served as President of Sentry Hill Partners, LLC, a global life sciences transformation and management consulting business, since January 2018. Mr. Kelly worked in various capacities at Amgen, Inc. from 2003 to 2017, most recently as Senior Vice President, Global Business Services from July 2014 to July 2017, and as acting Chief Financial Officer from January to July 2014. Prior to his service at Amgen, he served as Chief Financial Officer of Tanox, Inc. (2000-2003), Vice President, Finance and Corporate Controller of Biogen, Inc. (1998-2000) and Vice President, Finance and Chief Financial Officer of Nutrasweet Kelco Company (1996-1998). From February 2019 to April 2023, he served on the board of directors of HOOKIPA Pharma, Inc., a biopharmaceutical company. He currently serves as an independent member of the board of directors for Amicus Therapeutics, Inc., NeoGenomics, Inc. and Prime Medicine, Inc. each of which is a publicly traded company. Mr. Kelly holds a bachelor’s degree in Business Administration from Florida A&M University. |
NOMINEES
| Director since: 2023 Independent | JAMES O’LEARY Skills and Qualifications • Comprehensive leadership experience in a range of industries, with deep experience in building products • Diverse board experience Current Public Company Directorships: • Builders FirstSource Mr. O’Leary was appointed as a director on November 8, 2023. He currently serves as a director of Builders FirstSource, Inc. (BLDR), the nation’s leading supplier of structural building products, value-added components and services to the professional building market. He served as Chairman of the Board of a predecessor company, BMC Stock Holdings, Inc., prior to its merger with Builders FirstSource in 2021. He served as a director of BMC beginning in 2014. He has also served as the Chairman of Kinematics Manufacturing Company, a leading global manufacturer of high precision slewing drive systems to the utility-scale solar industry since 2015. He serves on the boards of Prosource Plumbing and Sentient Science. He previously served as Chairman and Chief Executive Officer of WireCo Worldgroup, Inc., a leading global manufacturer of engineered wire, steel rope, and synthetic rope, from January 2017 until his retirement from that company in July 2019. Prior to this, Mr. O’Leary served as Chairman of the Board and Chief Executive Officer of Kaydon Corporation, Inc., a diversified global manufacturer of precision industrial goods, from March 2007 until its successful sale in October 2013. From October 2013 to March 2014, Mr. O’Leary served as a Senior Advisor to the SKF Group, the acquiror of Kaydon Corporation, Inc. From 2005 to March 2007, he served as an independent director of Kaydon Corporation, Inc. Mr. O’Leary is a certified public accountant (currently inactive) in the State of New York and holds a B.B.A. from Pace University and an M.B.A. from the Wharton School of the University of Pennsylvania. |
NOMINEES
| DMC GLOBAL INC. • 2024 PROXY STATEMENT | 10 |
NOMINEES
| Director since: 2016 Independent Committees: • Compensation • Corporate Governance and Nominating (Chair) | CLIFTON PETER ROSE Skills and Qualifications • Extensive work with world-leading financial, investment banking and strategic communications firms, which brings depth to the Board in the areas of strategic planning, leadership, risk management, public relations and corporate governance • Substantial experience reviewing and analyzing acquisitions and investments provides unique and valuable perspectives to the Board as it analyzes growth strategies and opportunities Mr. Rose has served as a director since November 2016. He currently is a Senior Advisor at FGS Global, one of the leading strategic communications firms in the United States, Europe and Asia. He was a Senior Advisor to Blackstone, the world’s largest alternative asset manager, from 2016 to 2022. From 2007 to 2016, he was a Senior Managing Director with Blackstone, and served as its global head of public affairs. Mr. Rose also spent 20 years with Goldman Sachs, where he was a managing director and held a variety of senior positions in government relations and media relations in Washington DC, New York and Hong Kong. From 1983 to 1987 he was chief of staff to Congressman Mike Synar (D-Okla) and a partner with the law firm of Williams and Jensen in Washington DC. Mr. Rose is a graduate of The George Washington University and The Yale Law School. He serves on the national board of the NAACP, the oldest and largest civil rights organization in the United States. He is also on the board of the Poetry Society of America. |
NOMINEES
| Director since: 2023 Independent Committees: • Risk | OUMA SANANIKONE Skills and Qualifications • Extensive financial and management background in investment banking and finance • Significant experience in strategic planning at both executive and board levels • Deep leadership experience in the finance and investment management sectors Current Public Company Directorships: • iA Financial Group • Innergex Renewable Energy Ms. Sananikone was appointed as a director on August 4, 2023. She has over 30 years in finance and investment management experience at both executive and board levels. Ms. Sananikone retired as Managing Director, Corporate Strategy & Development, of BT Financial Group/Westpac Banking Corporation in 2003. She served in various consulting roles from 2003 to 2006 and from 2005 to 2008 was an Honorary Australian Financial Services Fellow on behalf of the Government of Australia. From 2000 to 2001 she was the Chief Executive Officer of Aberdeen Asset Management PLC. She is currently serving on the boards of iA Financial Group, Innergex Renewable Energy, Inc., and Ivanhoe Cambridge, Inc. She previously served on the board of Hafnia Ltd from November 2019 to November 2023. She graduated with a B.A. in Economics and Political Science from Australian National University and holds a Masters of Commerce degree from New South Wales University. |
2023 Compensation Decisions at a Glance
| | COMPENSATION ELEMENT | 2023 DESIGN PHILOSOPHY | | | • The Compensation Committee increased salaries by an average of 10% for Ms. Shepston, Mr. Grieves, and Mr. Nobili. • Mr. Kuta’s and Mr. Aldous’s compensation was agreed to as part of the leadership changes and new roles as interim co-Chief Executive Officers. Mr. Kuta’s compensation for his role as sole Chief Executive Officer was agreed to as part of his offer letter and based on market compensation. • Mr. Walter’s and Mr. Chilcoff’s compensation was agreed to as part their respective offer letters. | • Changes to base salary consider level of responsibility and complexity of position, peer compensation levels, individual performance, market alignment and other factors | | | • Our Chief Legal Officer received an increase in her target award opportunity to more closely reflect market compensation. No other changes were made for continuing NEOs. • Mr. Kuta’s and Mr. Aldous’s compensation was agreed to as part of the leadership changes and roles as interim co-Chief Executive Officers. Mr. Kuta’s compensation for his role as sole Chief Executive Officer was agreed to as part of his offer letter and based on market compensation. • Mr. Walter’s and Mr. Chilcoff’s compensation was agreed to as part their respective offer letters. • Based on strong revenue and EBITDA performance, our Compensation Committee approved a Company Performance Component achievement metric of 106% for DMC executives, 105% for Arcadia, and 161% for NobelClad. Due to SG&A and EBITDA performance below target metrics, the Company Performance Component was approved at 55% for DynaEnergetics. | • Target awards set as a percentage of salary for each NEO • Weightings and metrics: • 70% — Company Performance • 30% — Individual Performance • No payout on a metric if performance is below threshold; award capped at 180% of target | | | • The Compensation Committee maintained grants for Ms. Shepston, Mr. Grieves, and Mr. Nobili at levels approximating 2022 levels. • Mr. Kuta’s and Mr. Aldous’s LTI grants were agreed to as part of the leadership changes and new roles as interim co-Chief Executive Officers. Mr. Kuta received an additional LTI commitment in connection with his appointment as sole CEO in August 2023. • Mr. Walter’s and Mr. Chilcoff’s compensation was agreed to as part their respective offer letters. | • Consists of time-based restricted stock or restricted stock units (RSUs) (one-half of target LTI value) and performance-based stock units (PSUs) (one-half of target LTI value) • Restricted stock or RSUs vest over 3-year period based on continued service • PSUs vest at end of 3-year period based on metrics set at time of grant • Actual awards can range from 0% to 200% of target award • Metrics: • Relative TSR (75%) • Adjusted EBITDA (25%) |
Good Compensation Governance Practices
| WHAT WE DO | | WHAT WE DON’T DO | | | | Provide the majority of compensation in performance-based pay | | No “single-trigger” change of control severance benefits | | | Maintain robust stock ownership requirements | | No hedging transactions or pledging of our common stock by executive officers | | | Maintain a clawback policy | | No evergreen provision in the equity incentive plan | | | Use an independent compensation consultant engaged by the Compensation Committee | | No liberal share recycling | | | Conduct annual compensation program risk assessment | | No liberal definition of change of control | | | Limit perquisites | | No defined benefit plans for executive officers |
Elements of Executive Compensation
| | Compensation Component | Purpose | | | FIXED | Base salary Paid in cash | | Provide a competitive fixed rate of pay relative to similar positions in the market | | | | | Enable the Company to attract and retain critical executive talent | | AT RISK | Short-term incentives Paid in cash under the annual incentive plan | | Focus NEOs on achieving rigorous and progressively challenging short-term performance goals that align with the Company’s annual operating plan and result in long-term value creation | | | Long-term incentives Paid under the equity incentive plan using a mix of equity vehicles | | Focus NEOs on longer-term relative and absolute performance goals that strongly align with and drive stockholder value creation, as well as support the Company’s leadership retention strategy |
THE ROLE OF SENIOR MANAGEMENT
THE ROLE OF SENIOR MANAGEMENT Our CEO confers with the Chairman of the Committee in recommending for the Committee’s approval of the salaries of, annual incentives and long-term incentives of the NEOs other than himself. Our CEO also provides an assessment of the other NEOs’ performance with respect to achieving the performance objectives for the qualitative portion of the performance bonus under the annual incentive plan. Notwithstanding the foregoing, the Committee ultimately determines compensation levels and amounts for all NEOs. The Committee determines CEO pay and performance and holds these discussions in executive session without the CEO present. In early 2023, following Mr. Longe’s departure, our Co-CEOs performed the functions of the CEO with respect to the above duties related to the performance bonus for 2022 and 2023 compensation.
THE ROLE OF THE INDEPENDENT CONSULTANT
THE ROLE OF THE INDEPENDENT CONSULTANT The Committee engages an independent compensation consultant to assist the Committee in making compensation decisions for the NEOs. The Committee retained Pearl Meyer & Partners, LLC (Pearl Meyer) for 2023. The compensation consultant reviews the Company’s overall executive officer and director compensation in comparison to other comparably-sized public companies in industries similar to the Company, helps the Committee identify the appropriate mix of compensation components for compensating our executive officers, and facilitates the Committee’s determination of our executive officers’ incentive based compensation. The Committee’s consultant also keeps the Committee current with pay practices and governance trends, attends meetings when necessary to review reports and analyses and conducts special studies as may be required by the Committee from time to time. Pearl Meyer does not provide any other services to the Company or our management or have any other direct or indirect business relationships with us or our management other than to advise on board of director pay and practices. The Committee has assessed the independence of Pearl Meyer and concluded that its work does not raise any conflicts of interest.
THE ROLE OF MARKET REFERENCES AND THE PEER GROUP
THE ROLE OF MARKET REFERENCES AND THE PEER GROUP The Company competes with business entities across multiple industries for top executive-level talent. To this end, the Committee evaluates, on an annual basis, industry-specific and general market compensation practices and trends to ensure that our program and NEO pay opportunities remain appropriately competitive. The Committee believes peer group and general industry data provide a broader pay perspective than peer group data alone. The Committee also evaluates the appropriateness of each NEO’s compensation taking into account Company and business unit performance, job scope, individual performance, time in position, and other relevant factors. To the extent the Committee deems the compensation level associated with a NEO’s position versus the market is not aligned with the relevant factors, the Committee
THE ROLE OF MARKET REFERENCES AND THE PEER GROUP
| DMC GLOBAL INC. • 2024 PROXY STATEMENT | 31 |
THE ROLE OF MARKET REFERENCES AND THE PEER GROUP
may choose to modify one or more of the NEO’s compensation components. The Committee does not target a specific level of pay. With the acquisition of Arcadia, a substantial portion of our business derives from architectural building products. To reflect this evolution, we have revised the roster of peer companies we reference to determine market compensation and to which we compare our performance to include a balance of building products, global industrial infrastructure and upstream oil and gas and energy companies. The peer group listed below was used for purposes of setting executive compensation levels for 2023 as well as benchmarking relative performance for awards granted under the equity incentive plan.
THE ROLE OF MARKET REFERENCES AND THE PEER GROUP
| Apogee Enterprises, Inc. | Expro Group Holdings N.V. | Hunting PLC | Quanex Building Products Corporation | | Axcelis Technologies, Inc. | Gibraltar Industries, Inc. | Matrix Service Company | Tennant Company | | CSW Industrials, Inc. | Helios Technologies, Inc. | Oil States International, Inc. | TETRA Technologies, Inc. | | Core Laboratories N.V. | Helix Energy Solutions Group, Inc. | PGT Innovations, Inc. | Thermon Group Holdings, Inc. | | Dril-Quip, Inc. | | | |
Annual Incentives
Annual Incentives The annual incentive plan provides our NEOs the opportunity to earn a performance-based annual cash bonus. Actual bonus awards depend on the achievement of company performance objectives and a qualitative assessment of individual performance and can range from 0% to 180% of target award. Target annual bonus opportunities are expressed as a percentage of base salary and were established by the NEO’s level of responsibility and his or her ability to impact overall results and market practices for each position. Target award opportunities as a percentage of base salary for each NEO are as follows:
Annual Incentives
| NEO | 2023 Target Award Opportunity (as a % of base salary) | | Kevin T. Longe | (1) | | Michael Kuta | 100% | | David Aldous | 100% | | Eric Walter | 60% | | Michelle Shepston | 60% | | James Schladen | (2) | | James Chilcoff | 75% | | Ian Grieves | 60% |
Annual Incentives
| (1) Mr. Longe’s employment terminated effective January 15, 2023. As such, no 2023 bonus target was approved. | | (2) Mr. Schladen retired as President, Arcadia effective January 2, 2023. As such, no 2023 bonus target was approved. |
Annual Incentives
The annual incentive plan for the NEOs consists of a quantitative company performance component and a qualitative individual component. For all the NEOs, the company performance component at target is 70% of the total bonus, and the qualitative individual component is 30%.
Long-Term Equity Incentives
Long-Term Equity Incentives The Committee believes that long-term equity incentive grants are important in aligning executives with the long-term performance of the Company. For 2023, the Committee set target long-term incentive grants for each NEO. Awards were granted using a mix of restricted stock or restricted stock units (RSUs) and performance share units (PSUs). The Committee granted Mr. Kuta and Mr. Aldous restricted stock for time served as interim Co-CEOs. Per the terms of Mr. Kuta’s offer letter upon appointment of CEO in August 2023, he was to receive a pro-rated long-term incentive grant in recognition of his service in fiscal 2023, which included both restricted stock and PSUs. This award was granted on March 6, 2024 and will be included in the 2024 Summary Compensation Table as it was not granted by the Board until 2024. Restricted Stock/RSUs. Restricted stock vests over a three-year period with one-third of such shares vesting on each of the first, second and third anniversaries of the grant date. RSUs are granted to non-US NEOs and vest over a three-year period. RSUs granted to Mr. Grieves vest on each of the first, second and third anniversaries of grant. Each RSU represents the right to receive one share of the Company’s stock upon vesting. PSUs. PSUs are performance-based equity awards that provide for payouts that can range from 0% to 200% of the target number of PSUs granted based on achievement of financial performance goals and relative TSR results over a three-year period (Performance Period). Each earned PSU represents the right to receive one share of the Company’s common stock. The PSUs earned, if any, will cliff vest on the third anniversary of grant based on the degree of satisfaction of the PSU performance conditions. The actual number of PSUs earned and vested over the Performance Period is dependent on the achievement of a pre-determined Adjusted EBITDA goal (25%) and TSR performance relative to the peer group (75%). The Compensation Committee established target LTI awards for each NEO. The number of shares or units is calculated based on the LTI targets and the closing price of the Company’s stock on the day prior to grant date. The table below shows the equity awards granted under the 2016 Omnibus Incentive Plan (the “Plan”) for each of the NEOs:
Long-Term Equity Incentives
| DMC GLOBAL INC. • 2024 PROXY STATEMENT | 35 |
Long-Term Equity Incentives
| NEO | Grant Date | Restricted Stock/RSUs | PSUs(1) | Grant Date Value(2) | | Michael Kuta | January 15, 2023(3) | 27,510 | – | $599,993 | | David Aldous | January 15, 2023(3) | 27,510 | – | $599,993 | | Kevin Longe | n/a | – | – | – | | Eric Walter | January 23, 2023(4) | 36,314 | – | $799,997 | | | March 14, 2023 | 15,581 | 15,581 | $791,713 | | Michelle Shepston | March 14, 2023 | 8,263 | 8,263 | $419,861 | | James Chilcoff | January 3, 2023(5) | 14,408 | – | $280,092 | | | March 14, 2023 | 12,984 | 12,984 | $659,749 | | James Schladen | n/a | – | – | – | | Ian Grieves | March 14, 2023 | 10,623 | 10,623 | $539,778 |
Long-Term Equity Incentives
| (1) Number of PSUs granted assuming target performance achieved. | | (2) See footnote 1 to Summary Compensation Table for an explanation of calculation. | | (3) After appointment as interim Co-Presidents and CEOs, on January 15, 2023, each of Messrs. Kuta and Aldous were granted 27,510 shares of restricted stock with a value of $600,000 with a one-year vesting period. | | (4) Mr. Walter received a new hire grant in the value of $799,997 as stipulated by the terms of his offer letter. 50% of the award will vest upon the first anniversary of grant and 50% will vest on the second anniversary of grant. | | (5) Mr. Chilcoff received a new hire grant in the value of $280,092 as stipulated by the terms of his offer letter. The award will cliff vest on the second anniversary of the grant date. |
VESTING OF PRIOR AWARDS
VESTING OF PRIOR AWARDS PSU’s granted on February 26, 2020 failed to achieve the pre-established three-year performance goals for Adjusted EBITDA and the relative TSR of the Company’s shares was below the lowest quartile. As such, none of the PSUs granted in 2020 vested for Messrs. Longe, Kuta, and Grieves and Ms. Shepston.
PREVIEW OF 2024 COMPENSATION PROGRAM
PREVIEW OF 2024 COMPENSATION PROGRAM In furtherance of our focus on improving profitability and overall cash flow management along with the initiation of strategic reviews, the Compensation Committee has approved two significant changes to the 2024 NEO compensation program. First, PSUs granted in 2024 will be 100% based on relative TSR performance over the three-year performance period compared to the S&P 600 Industrials index. This is a change from the historical 75% relative TSR and 25% Adjusted EBITDA performance allocation. Second, the 2024 Company Performance Component of the annual cash bonus will include a Cash Conversion Days metric in addition to revenues, SG&A and adjusted EBITDA as percentage of sales. The Committee has also revised the allocations of total target award between the quantitative company performance component and the qualitative individual component. For DMC NEOs, the company performance component at target is 50% of the total bonus, and the qualitative individual component is 50%. For Arcadia and DynaEnergetics NEOs, the company performance component at target is 80% of the total bonus, and the qualitative individual component is 20%. The relative weighting for the Company Performance Component in 2024 will be as follows for each segment:
Clawback Policy
Clawback Policy Our clawback policy requires the Board to recoup certain executive compensation in the event of an accounting restatement resulting from material noncompliance with financial reporting requirements under the federal securities laws. The policy covers all the Company’s current and future NEOs and applies to incentive compensation paid by the Company (annual bonuses and other short-term and long-term incentives, restricted stock and other equity awards).
Risk Assessment and Mitigation of Compensation Policies and Practices
Risk Assessment and Mitigation of Compensation Policies and Practices Our Compensation Committee, with the assistance of management, reviews on an annual basis our compensation programs and considers whether they encourage excessive risk-taking by employees at the expense of long-term Company value. The Committee believes that the design of our executive compensation program, which includes a mix of annual and long-term incentives (a substantial portion of which are performance based) and cash and equity awards, along with our stock ownership guidelines and clawback policy, provide an appropriate balance between risk and reward and do not motivate imprudent risk-taking. As a result, we do not believe that our compensation policies are reasonably likely to have a material adverse effect on the Company.
Compensation Committee
| SUMMARY COMPENSATION TABLE FOR FISCAL YEAR 2023 |
Compensation Committee
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Non-Equity Incentive Plan Compensation ($) | Severance | All Other Compensation ($) | Total ($) | | Michael Kuta Chief Executive Officer(2) | 2023 | $613,461 | $– | $599,993 | $703,701 | $– | $67,499(3) | $1,984,654 | | | 2022 | 400,000 | – | 713,198 | 311,952 | – | 41,848 | 1,466,998 | | | 2021 | 370,000 | 276,995 | 750,429 | 159,600 | – | 45,052 | 1,602,076 | | David Aldous Former Co-Chief Executive Officer(4) | 2023 | 334,615 | 500,000 | 599,993 | 370,418 | – | 58,894(5) | 1,863,920 | | Kevin T. Longe Former Chief Executive Officer(6) | 2023 | 36,923 | – | – | – | 1,159,433 | 137,244(7) | 1,333,600 | | | 2022 | 640,000 | – | 2,161,133 | 743,040 | – | 77,515 | 3,621,688 | | | 2021 | 600,000 | 449,992 | 2,273,936 | 432,000 | – | 88,338 | 3,844,266 | | Eric Walter Chief Financial Officer(8) | 2023 | 406,154 | – | 1,591,710 | 276,749 | – | 73,338(9) | 2,347,951 | | Michelle Shepston Executive Vice President, Chief Legal Officer and Secretary | 2023 | 380,000 | – | 419,861 | 237,241 | – | 39,535(10) | 1,076,637 | | | 2022 | 350,000 | – | 378,201 | 181,972 | – | 38,468 | 948,641 | | | 2021 | 330,000 | 247,007 | 295,619 | 94,600 | – | 41,329 | 1,008,555 | | James Chilcoff President, Arcadia(11) | 2023 | 550,000 | 420,000(12) | 939,841 | 444,807 | – | 31,200(13) | 2,385,848 | | James Schladen Former President, Arcadia(14) | 2023 | 126,923 | – | – | – | 1,252,934(14) | 271,807(15) | 1,651,664 | | | 2022 | 550,000 | – | 1,188,638 | 550,000 | – | 27,000 | 2,315,638 | | Ian Grieves President and General Manager, DynaEnergetics | 2023 | 410,000(16) | – | 539,778 | 155,291 | – | 32,860(17) | 1,137,929 | | | 2022 | 386,313 | 99,989 | 378,201 | 292,400 | – | 33,309 | 1,190,212 | | | 2021 | 358,628 | – | 397,957 | 76,881 | – | 43,142 | 876,608 |
Compensation Committee
| PAY VERSUS PERFORMANCE |
Compensation Committee
| (2) As determined in accordance with SEC rules, “compensation actually paid” to our CEOs in each of 2023, 2022, 2021 and 2020 reflects the respective amounts set forth in the table above, adjusted as set forth in the table below, and is calculated as of each year-end. The dollar amounts reflected for “Compensation actually paid” in the table above do not reflect the actual amount of compensation earned by or paid to our CEOs during the applicable year, as this depends on the factors discussed in CD&A. For information regarding the decisions made by our Compensation Committee in regard to the CEO’s compensation for each fiscal year, please see the CD&A sections of the proxy statements reporting pay for the fiscal years covered in the table above. |
CAP vs. Adjusted EBITDA
| GRANTS OF PLAN-BASED AWARDS |
JAMES SCHLADEN
| OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END 2023 |
JAMES SCHLADEN
| STOCK VESTED DURING 2023 |
JAMES SCHLADEN
| NON-QUALIFIED DEFERRED COMPENSATION |
JAMES SCHLADEN
| POTENTIAL PAYMENTS UPON TERMINATION |
JAMES SCHLADEN
| | Michael Kuta | | | Executive Benefits and Payments upon Termination of Employment | Involuntary Termination without Cause(1) | Death or Disability(2) | | COMPENSATION: | | | | Base Salary | $1,350,000(3) | $– | | Incentive Bonus | $675,000(4) | $– | | Acceleration of vesting of Restricted Stock(11) | $517,738 | $517,738(5) | | TOTAL | $2,542,738 | $517,738 | | | Eric Walter | | | Executive Benefits and Payments upon Termination of Employment | Involuntary Termination without Cause(1) | Death or Disability(2) | | COMPENSATION: | | | | Base Salary | $440,000(6) | $– | | Incentive Bonus | $– | $– | | Acceleration of vesting of Restricted Stock(11) | $1,269,897 | $1,269,897(5) | | TOTAL | $1,709,897 | $1,269,897 |
JAMES SCHLADEN
| | Michelle Shepston | | | Executive Benefits and Payments upon Termination of Employment | Involuntary Termination without Cause(1) | Death or Disability(2) | | COMPENSATION: | | | | Base Salary | $380,000(7) | $– | | Incentive Bonus | $– | $– | | Acceleration of vesting of Restricted Stock(11) | $676,166 | $676,166(5) | | TOTAL | $1,056,166 | $676,166 | | | James Chilcoff | | | Executive Benefits and Payments upon Termination of Employment | Involuntary Termination without Cause(1) | Death or Disability(2) | | COMPENSATION: | | | | Base Salary | $550,000(8) | $– | | Incentive Bonus | $– | $– | | Acceleration of vesting of Restricted Stock(11) | $759,877 | $759,877(5) | | TOTAL | $1,309,877 | $759,877 | | | Ian Grieves | | | Executive Benefits and Payments upon Termination of Employment | Involuntary Termination without Cause(1) | Death or Disability | | COMPENSATION: | | | | Base Salary | $205,000(9) | $102,500(10) | | Incentive Bonus | $123,000(9) | $61,500(10) | | Acceleration of vesting of Restricted Stock(11) | $713,560 | $713,560(5) | | TOTAL | $1,041,560 | $877,560 |
JAMES SCHLADEN
| DIRECTOR COMPENSATION |
JAMES SCHLADEN
| Non–employee Director | Fees Earned or Paid in Cash(1) | Stock Awards(2) | All Other Compensation | Total | | David C. Aldous(3) | $56,159 | $96,224 | $– | $152,383 | | Andrea E. Bertone(4) | $30,357 | $– | $– | $30,357 | | Richard P. Graff | $105,870 | $124,997 | $– | $230,867 | | Ruth I. Dreessen | $91,667 | $124,997 | $– | $216,664 | | Robert A. Cohen | $90,000 | $124,997 | $– | $214,997 | | Michael A. Kelly | $81,429 | $124,997 | $– | $206,426 | | Clifton Peter Rose | $85,000 | $124,997 | $– | $209,997 | | James O’Leary(5) | $10,801 | $59,992 | $– | $70,793 | | Ouma Sananikone(6) | $30,571 | $59,984 | $– | $90,555 |
STOCK OWNERSHIP GUIDELINES FOR NON-EMPLOYEE DIRECTORS
| CEO PAY RATIO FOR FISCAL YEAR 2023 |