DEF 14A of Garmin LTD
Filed Apr 24, 2024 · FY20230001308179-24-000568
PROPOSAL FIVE Re-election of five directors and election of one new director
PROPOSAL FIVE Re-election of five directors and election of one new director Pursuant to Swiss law and our Articles of Association, the members of our Board must be elected annually and individually for a term extending until completion of the next annual general meeting. Garmin believes that the size of its board is appropriate considering the primary duties of the board, its governance structure, the experience of each board member, and the capabilities of the management team it oversees. Accordingly, our Board consists of six directors. The Board has nominated the following persons, each of whom is currently a director of Garmin, to stand for re-election for a term extending until completion of the annual general meeting in 2025: Jonathan C. Burrell, Joseph J. Hartnett, Min H. Kao, Catherine A. Lewis and Clifton A. Pemble. The Board has also nominated Susan M. Ball to stand for election for a term extending until completion of the annual general meeting in 2025. References to the length of time during which (and, in the case of persons who are employees of Garmin, the positions in which they have served) the nominees for re-election have served as directors and/or employees of Garmin in their biographies included in this section of this Proxy Statement refer to their service as directors and/or officers of both (i) Garmin Ltd., a Cayman Islands company (“Garmin Cayman”) which was the ultimate parent holding company of the Garmin group of companies until June 27, 2010 and (ii) Garmin Ltd., a Swiss company, which became the ultimate parent holding company of the Garmin group of companies on June 27, 2010 pursuant to a scheme of arrangement under Cayman Islands law that was approved by the shareholders of Garmin Cayman on May 20, 2010. Mr. Burrell, Mr. Hartnett, Dr. Kao, Ms. Lewis and Mr. Pemble have each indicated that they are willing and able to continue to serve as directors if re-elected, or, in the case of Ms. Ball, to serve if elected, and have consented to being named as nominees in this Proxy Statement. Susan M. Ball, age 60, has more than 35 years of experience in finance, accounting, business operations and taxes. She has served as Chief Financial Officer and Treasurer of SAM, LLC, a privately held provider of geospatial and inspection services, since July 2022. Ms. Ball previously served as Chief Financial Officer, Executive Vice President and Treasurer of Team, Inc. (NYSE: TISI) from December 2018 to November 2021. From January 2018 to May 2018, Ms. Ball served as Executive Vice President, Chief Financial Officer and Treasurer of CVR Energy, Inc. (NYSE: CVI) and from August 2012 to December 2017 as its Chief Financial Officer and Treasurer. Ms. Ball also served as Executive Vice President and Chief Financial Officer of the general partner of CVR Partners LP (NYSE: UAN) from January 2018 to May 2018 and as its Chief Financial Officer and Treasurer from August 2012 to December 2017. Ms. Ball has held the designation of Certified Public Accountant since 1991. Ms. Ball was a director of U.S. Concrete, Inc. (Nasdaq: USCR) from August 2018 to August 2021 and served as Chair of its Audit Committee from May 2020 to August 2021 and as a member of its Audit Committee from October 2018 to August 2021. The Nominating and Corporate Governance Committee of the Board (the “Nominating Committee”) recommended Ms. Ball as a candidate for Board nomination. The Board has concluded that Ms. Ball should be nominated for election as a director of Garmin because: (1) her experience as the chief financial officer of both public and private companies and her experience as the chairman of the audit committee of a public company gives her strong qualifications to be a member of the Audit Committee, and she qualifies as an “audit committee financial expert” as defined by the SEC regulations implementing Section 407 of the Sarbanes-Oxley Act of 2002; (2) she has significant experience as a senior executive in the areas of, operations management, executive leadership, strategic planning and finance; (3) she meets the requirements to be an independent director under the listing standards of the NYSE and applicable SEC regulations; and (4) she satisfies the general criteria described below under “Nominating and Corporate Governance Committee.” Jonathan C. Burrell, age 60, has been a director of Garmin since June 2018. Mr. Burrell is the CEO of the Burrell Family Office. In this role, he manages and provides direction for the assets and investments of the Burrell family. In addition, he is an inventor and active investor in financial, technology and clean energy related businesses. Mr. Burrell is an inventor on 35 issued and pending U.S. patents, many of which are owned by Garmin. Mr. Burrell holds a Bachelor of Science in Mechanical Engineering from Wichita State University. He has served on several boards of charitable organizations and currently serves as president of the Burrell family’s charitable foundation. The Board has concluded that Mr. Burrell should be nominated for re-election as a director of Garmin because: (1) his significant experience in product design and development provides the Board with valuable experience relevant to Garmin’s products; (2) he has considerable knowledge of Garmin’s business and operations from his previous service as a leader of Garmin’s engineering department; (3) he meets the requirements to be an independent director under the listing standards of the NYSE and applicable SEC regulations; and (4) he satisfies the general criteria described below under “Nominating and Corporate Governance Committee.” Joseph J. Hartnett, age 68, has been a director of Garmin since June 2013. Mr. Hartnett was Interim President and Chief Executive Officer of Sparton Corporation (NYSE: SPA) from February 2016 to March 2019. Previously he served as President and Chief Executive Officer of Ingenient Technologies, Inc., and U.S. Robotics Corporation where he also served as Chief Financial Officer. Mr. Hartnett was a partner with Grant Thornton LLP where he was employed for over 20 years in various leadership positions at the regional, national and international level. Mr. Hartnett is a registered Certified Public Accountant in the State of Illinois and holds a Bachelor’s degree in Accounting from the University of Illinois at Chicago. Mr. Hartnett was a director of Sparton Corporation from September 2008 to March 2019 and was Chairman of its Board of Directors from October 2014 to February 2016. At Sparton Corporation Mr. Hartnett served as past chairman and member of the audit committee and past member of the compensation and nominating and corporate governance committees. He is also a former director of Crossroad Systems, Inc., Ingenient Technologies, Inc. and U.S. Robotics Corporation.
PROPOSAL FIVE Re-election of five directors and election of one new director
The Board has concluded that Mr. Hartnett should be nominated for re-election as a director of Garmin because: (1) his 20 years of experience as a Certified Public Accountant with Grant Thornton LLP and his experience as the chairman of the audit committee of two other public companies gives him strong qualifications to be a member of the Audit Committee, and he qualifies as an “audit committee financial expert” as defined by the SEC regulations implementing Section 407 of the Sarbanes-Oxley Act of 2002; (2) he has significant industry experience as a senior executive in the areas of international business, operations management, executive leadership, strategic planning and finance, as well as extensive corporate governance, executive compensation and financial experience; (3) he meets the requirements to be an independent director under the listing standards of the NYSE and applicable SEC regulations; (4) through his years of service on our Board he has obtained a thorough knowledge of Garmin’s business and culture which enables him to provide effective advice and oversight to management consistent with our goal of long-term value creation for shareholders; and (5) he satisfies the general criteria described below under “Nominating and Corporate Governance Committee.” Min H. Kao, age 75, has served as Executive Chairman of Garmin since January 2013. Dr. Kao served as Chairman of Garmin from September 2004 to December 2012 and was previously Co-Chairman of Garmin from August 2000 to August 2004. He served as Chief Executive Officer of Garmin from August 2002 to December 2012 and previously served as Co-Chief Executive Officer from August 2000 to August 2002. Dr. Kao has served as a director and officer of various subsidiaries of Garmin since August 1990. Dr. Kao holds Ph.D. and MS degrees in Electrical Engineering from the University of Tennessee and a BS degree in Electrical Engineering from National Taiwan University. Dr. Kao has not been a member of the board of directors of any entity other than Garmin or various subsidiaries of Garmin during the last five years. The Board has concluded that Dr. Kao should be nominated for re-election as a director of Garmin because: (1) he is one of the co-founders of Garmin and its various subsidiaries; (2) he possesses over 30 years of experience in Garmin’s operations and has a high level of relevant technical and business knowledge and experience; (3) he is uniquely positioned to understand Garmin’s vision and values; (4) he satisfies the general criteria described below under “Nominating and Corporate Governance Committee;” and (5) he was born in Taiwan and is a Taiwanese American, adding racial diversity to the Board. Catherine A. Lewis, age 71, has been a director of Garmin since June 2019. Ms. Lewis has more than 25 years of experience in the accounting and tax professions. She served as Global Head of Tax for KPMG’s Energy and Natural Resources practice from 2002 until her retirement in 2012. She served on KPMG’s Board of Directors for five years starting in 2004. Before joining KPMG in 2002, Ms. Lewis spent 17 years at Arthur Andersen. Ms. Lewis has been a director of CorEnergy Infrastructure Trust, Inc. (OTCPink: CORR) since July 2013, Chair of its Audit Committee since May 2016, a member of its Compensation and Corporate Governance Committee since July 2021, and was a member of its Investment Committee from July 2013 to May 2022. The Board has concluded that Ms. Lewis should be nominated for re-election as a director of Garmin because: (1) she has more than 25 years of experience as a Certified Public Accountant and has experience as the Audit Committee Chair of another public company and she qualifies as an “audit committee financial expert” as defined by the SEC regulations implementing Section 407 of the Sarbanes-Oxley Act of 2002; (2) she has significant experience advising public companies on U.S. and international taxation; (3) she meets the requirements to be an independent director under the listing standards of the NYSE and applicable SEC regulations; and (4) she satisfies the general criteria described below under “Nominating and Corporate Governance Committee.” Clifton A. Pemble, age 58, has been a director of Garmin since August 2004 and has served as President and Chief Executive Officer of Garmin since January 2013. Mr. Pemble served as President and Chief Operating Officer of Garmin from October 2007 to December 2012. He has served as a director and officer of various subsidiaries of Garmin since August 2003. He has been President and Chief Executive Officer of Garmin International, Inc. since January 2013. Previously, he served as Chief Operating Officer of Garmin International, Inc. from October 2007 to December 2012 and he was Vice President, Engineering of Garmin International, Inc. from 2005 to October 2007, Director of Engineering of Garmin International, Inc. from 2003 to 2005, Software Engineering Manager of Garmin International, Inc. from 1995 to 2002, and a Software Engineer with Garmin International, Inc. from 1989 to 1995. Garmin International, Inc. is a subsidiary of Garmin. Mr. Pemble holds BA degrees in Mathematics and Computer Science from MidAmerica Nazarene University. Mr. Pemble has not been a member of the board of directors of any entity other than Garmin and various subsidiaries of Garmin during the last five years. The Board has concluded that Mr. Pemble should be nominated for re-election as a director of Garmin because: (1) he has served Garmin and its various operating subsidiaries in many important roles for over 30 years; (2) he has a high level of relevant technical and business knowledge and experience; (3) he has a keen understanding of Garmin’s vision and values; and (4) he satisfies the general criteria described below under “Nominating and Corporate Governance Committee.” The following matrix provides summary information about our directors’ skills, experience and diversity.
PROPOSAL FIVE Re-election of five directors and election of one new director
| | | Susan M. Ball | Jonathan C. Burrell | Joseph J. Hartnett | Min H. Kao | Catherine A. Lewis | Clifton A. Pemble | | Experience | | | | | | | | | | Executive Leadership Experience | | | | | | | | | Audit Committee Financial Expert | | | | | | | | | Global Tax Compliance | | | | | | | | | Risk and Compliance Oversight | | | | | | | | | Corporate Governance | | | | | | | | | Cybersecurity and Information Technology Oversight | | | | | | | | | Other Public Company Board Experience | | | | | | | | | Global Operations | | | | | | | | | Technology Product Design and Development | | | | | | | | | Product Manufacturing | | | | | | | | | Mergers and Acquisitions | | | | | | | | Diversity | | | | | | | | | | Asian | | | | | | | | | White/Caucasian | | | | | | | | | Gender | F | M | M | M | F | M |
PROPOSAL FIVE Re-election of five directors and election of one new director
THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” RE-ELECTION OR ELECTION OF EACH OF THESE NOMINEES.
Non-Management Director Compensation
Non-Management Director Compensation Each Garmin director, who is not an officer or employee of Garmin or its subsidiaries (a “Non-Management Director”), is compensated for service on the Board and its committees. Neither the President and Chief Executive Officer nor our Executive Chairman, each of whom is an executive officer of the Company and a member of the Board, receives any compensation for his service as a director. The annual director compensation package for the Non-Management Directors is designed to attract and retain highly-qualified, independent professionals to represent Garmin’s shareholders. Each Non-Management Director is paid an annual retainer of $85,000, and each Non-Management Director, who chairs a standing committee of the Board (other than the Audit Committee), also receives an annual retainer of $5,000. The Non-Management Director who chairs the Audit Committee receives an annual retainer of $10,000. Each Non-Management Director also receives an annual award of restricted stock units with a target value of $150,000. Subject to shareholder approval of Proposal No. 14 to be voted on at this Annual Meeting, beginning in 2024 each Non-Management Director will be paid an annual retainer of $100,000 and will receive an annual award of restricted stock units with a target value of $175,000. In addition, each Non-Management Director, who chairs a standing committee of the Board (other than the Audit Committee), will be paid an annual retainer of $5,000 and the Non-Management Director who chairs the Audit Committee will be paid an annual retainer of $10,000. The maximum aggregate compensation for the Board for the period between the 2024 annual general meeting and the 2025 annual general meeting submitted to shareholders for approval under Proposal No. 14 reflects this compensation program for Non-Management Directors, and also includes an annual salary for our Executive Chairman. Garmin does not have formal stock ownership guidelines for its directors. However, Garmin’s independent directors receive a large portion of their total compensation in equity awards, and, as set forth in the “Stock Ownership of Certain Beneficial Owners and Management” table of this Proxy Statement, each of them retains a significant portion of the shares awarded.
2023 Non-Management Director Compensation
2023 Non-Management Director Compensation The following table shows the compensation paid to our Non-Management Directors in 2023:
2023 Non-Management Director Compensation
| Name(1) | Fees Earned or Paid in Cash ($) | Stock Awards ($)(2) | Total ($) | | Jonathan Burrell | $90,000 | $153,943 | $243,943 | | Joseph Hartnett | $90,000 | $153,943 | $243,943 | | Catherine Lewis | $85,000 | $153,843 | $238,943 | | Charles Peffer | $95,000 | $153,943 | $248,943 |
2023 Non-Management Director Compensation
| (1) As indicated above, neither the President and Chief Executive Officer nor our Executive Chairman (each of whom is an executive officer of the Company and a member of the Board) receives any compensation for his service as a director. Our President and CEO’s 2023 executive compensation is described in later sections of this Proxy Statement. Dr. Kao, who serves as our Executive Chairman, is not a Named Executive Officer for 2023 for Garmin, so he is excluded from the table above. | | (2) This column shows the grant date fair value of 1,501 restricted stock units granted on June 9, 2023 to each of the Non-Management Directors computed in accordance with FASB ASC Topic 718. As of December 30, 2023 each Non-Management Director owned 1,501 outstanding restricted stock units. |
Role of Compensation Consultant
Role of Compensation Consultant The Compensation Committee engaged Meridian Compensation Partners, LLC (“Meridian”) in 2022 to assist the Compensation Committee with evaluating and updating, as appropriate, Garmin’s focused comparator group, which takes into account company size, market capitalization, revenue, industry, and Garmin’s unique culture, which helps to retain talented executives. The comparator group for 2023, which is the same group as 2022, consisted of the following companies:
Role of Compensation Consultant
| Belden Inc. | Teledyne Technologies Incorporated | | Brunswick Corporation | Textron Inc. | | Logitech International S.A. | The Toro Co. | | National Instruments Corporation | Trimble Inc. | | NCR Corp. | Visteon Corporation | | NetApp, Inc. | Winnebago Industries, Inc. | | Polaris Inc. | YETI Holdings, Inc | | Sensata Technologies Holding plc | |
Role of Compensation Consultant
NCR Corp. was split into two companies in October 2023, and National Instruments Corporation was acquired by another company in October 2023. Therefore, neither company will be part of the comparator group going forward. The Compensation Committee uses the comparator group’s executive compensation data primarily to assess the overall competitiveness of Garmin’s compensation programs and to obtain information on compensation trends.
2023 Performance: Salary, Annual Incentives and Bonuses
2023 Performance: Salary, Annual Incentives and Bonuses
Annual Incentive and Bonus Awards
Annual Incentive and Bonus Awards Garmin does not pay an annual cash incentive award or material annual cash bonuses. In 2023, Garmin’s Named Executive Officers each received a U.S. $333 annual holiday cash bonus (or its equivalent in Swiss francs in the case of Mr. Etkind). This is the same annual holiday cash bonus that was paid to other Garmin employees.
Long-Term Performance: Restricted Stock Units
Long-Term Performance: Restricted Stock Units Garmin’s management and Compensation Committee believe stock ownership is the most important element in achieving the goals of Garmin’s compensation program. Stock ownership aligns the long-term interests of employees with those of shareholders, provides long-term retention incentive, and ties compensation to Garmin’s performance.
Time-Based Vesting Restricted Stock Units
Time-Based Vesting Restricted Stock Units Named Executive Officers are granted awards in the form of full-value restricted stock units (“RSUs”) under the 2005 Equity Incentive Plan that, unless forfeited, vest over a three-year period. These RSU awards provide a long-term retention incentive, align the interests of Named Executive Officers with those of other shareholders and encourage an appropriate degree of risk-taking that is consistent with long-term growth. The Compensation Committee believes time vesting is an appropriate structure to achieve these objectives. The following table shows the grant date fair value in U.S. dollars of the RSUs awarded to each of the Named Executive Officers in 2021, 2022 and 2023:
Time-Based Vesting Restricted Stock Units
| Name | 2021 | 2022 | 2023 | | Mr. Pemble | $1,610,196 | $1,749,938 | $2,699,956 | | Mr. Boessen | $336,255 | $374,912 | $624,933 | | Mr. Etkind | $312,432 | $350,040 | $0 | | Mr. Straub | $519,028 | $650,074 | $749,847 | | Mr. Desbois | $528,791 | $700,080 | $850,140 |
Time-Based Vesting Restricted Stock Units
Mr. Etkind was not granted a RSU award in December 2023 because he was then considering transitioning to a part-time role during 2024, in which case any RSU award granted to him in December 2023 would not vest. Garmin announced on April 8, 2024 that Mr. Etkind will transition to a part-time role at the end of June 2024. With respect to the other NEOs, the higher values of their 2023 RSU awards relative to the values of their 2022 RSU awards resulted from the Compensation Committee’s determination that such higher values were appropriate in light of the sustained high performance during 2022 of each of the NEOs and the Company, and to further align the financial interests of the NEOs with those of the Company’s shareholders.
Performance-Based Vesting Restricted Stock Units
Performance-Based Vesting Restricted Stock Units Named Executive Officers are also granted performance-contingent RSU awards (“PC-RSUs”) under the 2005 Equity Incentive Plan. Such awards are valued on the grant date based on target achievement of Company performance criteria, as described below. The value on the vesting date may differ due to share price fluctuation and achievement against predetermined Company performance criteria, ranging from 0% to 150% of target. The initial vesting of these awards is contingent upon the achievement of certain fiscal year revenue and profitability targets established by the Compensation Committee, and thereafter the remaining unvested PC-RSUs are subject to additional time-based vesting. As shown below, for the last three fiscal years, these targets were the Company’s operating income and revenue, which are derived from the Company’s audited financial statements, without any adjustments. Following the end of the fiscal year in which the PC-RSU awards were granted, the Compensation Committee determines whether the performance targets for these PC-RSU awards were achieved (the date such determination is made, the “Certification Date”) The percentage of the PC-RSUs that corresponds with the weighting attributed to each performance target that was achieved will, if not forfeited, vest in three equal installmentswithin 30 days of the Certification Date and the first and second anniversaries of the Certification Date. The Compensation Committee believes the performance-based element of these PC-RSU awards further aligns the interests of Garmin’s Named Executive Officers with the interests of Garmin’s shareholders, and that the time-based element furthers the objective of retaining Named Executive Officers. The following table shows the grant date fair value in U.S. dollars of the PC-RSUs awarded to each of the Named Executive Officers in 2021, 2022 and 2023:
Performance-Based Vesting Restricted Stock Units
| Name | 2021 | 2022 | 2023 | | Mr. Pemble | $1,393,490 | $1,573,514 | $2,450,067 | | Mr. Boessen | $384,312 | $429,053 | $625,057 | | Mr. Etkind | $360,293 | $405,377 | $399,891 | | Mr. Straub | $615,186 | $610,465 | $700,019 | | Mr. Desbois | $514,089 | $619,743 | $849,944 |
Performance-Based Vesting Restricted Stock Units
The higher values of the 2023 PC-RSU awards relative to the values of the 2022 PC-RSU awards granted to Messrs. Pemble, Boessen, Straub and Desbois reflect the Compensation Committee’s determination that such higher values were appropriate in light of the sustained high performance during 2022 and 2023 of each of the NEOs and the Company, and to increase the percentage of their respective total compensation that is directly tied to the Company’s financial performance. The performance measures, percentage weighting, performance targets, actual results and status for each of the 2021, 2022 and 2023 PC-RSU awards are set forth below (billion dollar amounts denoted with a “B”):
Severance Agreements
Severance Agreements Garmin does not have severance agreements with any of its Named Executive Officers.
Change of Control Benefits
Change of Control Benefits If a Named Executive Officer’s employment is terminated without cause, or the executive resigns with good reason, within twelve months following a change of control of Garmin, all of the executive’s unvested stock options and stock appreciation rights (SARs), if any, would immediately become exercisable and all of the executive’s unvested RSUs and performance shares, if any, would immediately become payable. “Cause” generally includes certain conduct by the NEO, such as a conviction or plea of guilty to a felony or certain other crimes, willful actions or omissions that are grounds for immediate dismissal under certain employment policies, a habitual neglect of duties, and willful and intentional material misconduct in the NEO’s performance of their duties that results in financial detriment. However, “Cause” generally does not (other than with respect to crimes) include bad judgment, negligence, or acts or omissions that the NEO believed, in good faith, to have been in or at least not opposed to the interests of the Company. “Good Reason” generally includes certain actions by the Company, including a material diminution in the NEO’s position, authority or duties, requiring the NEO to move more than 50 miles from their current location, or a material diminution in aggregate compensation (other than broad-based reductions applicable to all similarly-situated employees). For full definitions of “Cause” and “Good Reason,” see Annex 3. If a Named Executive Officer’s employment is terminated without cause, or the executive resigns with good reason, after the Certification Date for PC-RSUs and within twelve months following a change of control of Garmin, all of the executive’s PC-RSUs that were earned pursuant to the performance-based vesting element but not yet vested due to the time-based vesting element would immediately become payable. If the executive’s employment is terminated without cause, or the executive resigns with good reason, prior to the Certification Date and within twelve months after a change of control of Garmin, then all of the executive’s PC-RSUs that would have been earned as of the Certification Date pursuant to the performance-based element but for the termination of employment will become payable within 30 days of the Certification Date. Such vesting treatment is the only benefit that would be received by the executives in connection with a change of control, and such benefit would also be received by all other Garmin employees who own unvested stock options, SARs, RSUs, PC-RSUs or performance shares. This change of control protection is designed to provide adequate protection for executives and other Garmin employees who own unvested equity awards so that they may focus their efforts on effective leadership, rather than significant compensation loss, during a time that Garmin is considering or undertaking a change of control, and to provide executives and other Garmin employees who own unvested equity awards with incentives to remain with Garmin during a time that Garmin is considering or undertaking a change of control.
2023 SUMMARY COMPENSATION TABLE
2023 SUMMARY COMPENSATION TABLE The following table shows 2023, 2022 and 2021 compensation for each Named Executive Officer:
2023 SUMMARY COMPENSATION TABLE
| Name & Principal Position | Year | Salary ($) | Bonus ($)(1) | Stock Awards ($)(2) | All Other Compensation ($)(3) | Total ($) | | Clifton A. Pemble | 2023 | $1,350,962 | $333 | $5,150,023 | $39,348 | $6,540,666 | | President & Chief Executive Officer | 2022 | $1,225,962 | $333 | $3,323,452 | $35,848 | $4,585,595 | | | 2021 | $1,200,000 | $307 | $3,003,686 | $34,348 | $4,238,341 | | Douglas G. Boessen | 2023 | $750,577 | $333 | $1,249,990 | $39,348 | $2,040,248 | | Chief Financial Officer & Treasurer | 2022 | $694,423 | $333 | $803,965 | $35,848 | $1,534,569 | | | 2021 | $660,000 | $307 | $720,567 | $34,348 | $1,415,222 | | Andrew R. Etkind | 2023 | $730,000 | $306 | $399,891 | $498,078 | $1,628,275 | | Vice President, General Counsel & Secretary | 2022 | $700,000 | $314 | $755,417 | $431,414 | $1,887,145 | | | 2021 | $670,000 | $328 | $672,725 | $436,324 | $1,779,377 | | Philip I. Straub | 2023 | $751,442 | $4,579 | $1,449,866 | $39,348 | $2,245,235 | | Executive Vice President, Managing Director-Aviation | 2022 | $739,423 | $333 | $1,260,539 | $35,848 | $2,036,143 | | | 2021 | $705,000 | $307 | $1,134,214 | $34,348 | $1,873,869 | | Patrick G. Desbois | 2023 | $801,443 | $333 | $1,700,084 | $39,348 | $2,541,208 | | Executive Vice President, Operations | 2022 | $740,385 | $333 | $1,319,823 | $35,848 | $2,096,389 | | | 2021 | $630,000 | $1,722 | $1,042,880 | $34,348 | $1,708,950 |
2023 SUMMARY COMPENSATION TABLE
| (1) Annual holiday cash bonus. For 2023, in addition to the holiday cash bonus, Mr. Straub received a cash bonus equal to $4,246 in recognition of his 30th anniversary with Garmin (including a tax gross-up on such amounts). | | (2) This column shows the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 with respect to the PC-RSUs and RSUs granted in 2021, 2022 and 2023. See the Grants of Plan-Based Awards table for information, including material assumptions, on awards made in 2023. | | (3) All Other Compensation for each of the Named Executive Officers for 2021, 2022 and 2023 includes amounts contributed by the Company (in the form of base and matching contributions) to the trust and in the Named Executive Officers’ benefit under the Company’s qualified 401(k) plan. With respect to 2023, for each Named Executive Officer except Mr. Etkind $16,500 was contributed as a base contribution under the qualified 401(k) plan, and each received $22,500 in company matching contributions related to the qualified 401(k) plan. Mr. Etkind’s All Other Compensation in 2023 includes $426,004 cost of living adjustment, $50,600 Swiss pension plan contribution, $11,017 automobile allowance, and $10,457 tax equalization payment. All Other Compensation for 2021, 2022 and 2023 includes for all Named Executive Officers except Mr. Etkind premiums on life insurance. |
2023 GRANTS OF PLAN-BASED AWARDS
2023 GRANTS OF PLAN-BASED AWARDS The following table provides information for each of the Named Executive Officers regarding 2023 grants of RSUs and PC-RSUs:
2023 GRANTS OF PLAN-BASED AWARDS
| | | | | | | All Other | | | | | | | | | Stock | | | | | | | | | Awards: | Grant Date | | | | | Estimated Future Payouts Under | | | Number of | Fair Value | | | | | Equity Incentive Plan Awards | | | Shares of | of Stock | | Name | Award Type | Grant Date | Threshold (#) | Target (#) | Maximum (#) | Stock or Units (#) | and Option Awards(1) | | Clifton A. Pemble | RSUs | 12/15/2023 | | | | 22,371 | $2,699,956 | | | PC-RSUs | 2/25/2023 | 6,594 | 26,376 | 39,564 | | $2,450,067 | | Douglas G. Boessen | RSUs | 12/15/2023 | | | | 5,178 | $624,933 | | | PC-RSUs | 2/25/2023 | 1,682 | 6,729 | 10,094 | | $625,057 | | Andrew R. Etkind | RSUs | 12/15/2023 | | | | - | $0 | | | PC-RSUs | 2/25/2023 | 1,076 | 4,305 | 6,458 | | $399,891 | | Philip Straub | RSUs | 12/15/2023 | | | | 6,213 | $749,847 | | | PC-RSUs | 2/25/2023 | 1,884 | 7,536 | 11,304 | | $700,019 | | Patrick Desbois | RSUs | 12/15/2023 | | | | 7,044 | $850,140 | | | PC-RSUs | 2/25/2023 | 2,288 | 9,150 | 13,725 | | $849,944 |
2023 GRANTS OF PLAN-BASED AWARDS
| (1) This column represents the grant date fair value of PC-RSUs and RSUs computed in accordance with FASB ASC Topic 718. |
2023 GRANTS OF PLAN-BASED AWARDS
| • | For PC-RSUs, that amount assumes 100% (Target) of performance conditions will be met and is calculated by multiplying the closing price of Garmin shares on NYSE on (or for) the date of grant, discounted in accordance with accounting requirements to reflect that dividend equivalents are not paid on the PC-RSUs, by the number of target units awarded. At 150% of Target (Maximum) the grant date fair value of PC-RSUs would be $3,675,100, $937,585, $599,837, $1,050,029 and $1,274,915, respectively, for Mr. Pemble, Mr. Boessen, Mr. Etkind, Mr. Straub and Mr. Desbois. | | • | For RSUs, that amount is calculated by multiplying the closing price of Garmin shares on NYSE on (or for) the date of grant, discounted in accordance with accounting requirements to reflect that dividend equivalents are not paid on the RSUs, by the number of units awarded. | | • | For additional information on the valuation assumptions with respect to the 2023 grants, refer to Note 10 of Garmin’s financial statements in the Form 10-K for the fiscal year ended December 30, 2023, as filed with the SEC. |
OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END
OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END The following table provides information for each of the Named Executive Officers regarding outstanding equity awards held by them as of December 30, 2023:
OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END
| | | | Stock Awards | | | Name | Award Type | Grant Date(1) | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(2) | | Clifton A. Pemble | RSUs | 12/15/2021 | 4,123 | $529,970 | | | RSUs | 12/15/2022 | 13,368 | $1,718,323 | | | RSUs | 12/15/2023 | 22,371 | $2,875,568 | | | PC-RSUs | 2/25/2021 | 5,831 | $749,517 | | | PC-RSUs | 2/25/2023 | 38,826 | $4,990,694 | | Douglas G. Boessen | RSUs | 12/15/2021 | 861 | $110,673 | | | RSUs | 12/15/2022 | 2,864 | $368,139 | | | RSUs | 12/15/2023 | 5,178 | $665,580 | | | PC-RSUs | 2/25/2021 | 1,608 | $206,692 | | | PC-RSUs | 2/25/2023 | 9,906 | $1,273,317 | | Andrew R. Etkind | RSUs | 12/15/2021 | 800 | $102,832 | | | RSUs | 12/15/2022 | 2,674 | $343,716 | | | RSUs | 12/15/2023 | - | - | | | PC-RSUs | 2/25/2021 | 1,508 | $193,838 | | | PC-RSUs | 2/25/2023 | 6,339 | $814,815 | | Philip I. Straub | RSUs | 12/15/2021 | 1,329 | $170,830 | | | RSUs | 12/15/2022 | 4,966 | $638,330 | | | RSUs | 12/15/2023 | 6,213 | $798,619 | | | PC-RSUs | 2/25/2021 | 2,574 | $330,862 | | | PC-RSUs | 2/25/2023 | 11,094 | $1,426,023 | | Patrick G. Desbois | RSUs | 12/15/2021 | 1,354 | $174,043 | | | RSUs | 12/15/2022 | 5,348 | $687,432 | | | RSUs | 12/15/2023 | 7,044 | $905,436 | | | PC-RSUs | 2/25/2021 | 2,151 | $276,490 | | | PC-RSUs | 2/25/2023 | 13,470 | $1,731,434 |
OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END
| (1) All RSUs vest at the rate of one-third per year on the first, second and third anniversaries of the grant date. Upon certification of performance criteria, all PC-RSUs vest at a rate of one-third per year within 30 days of the Certification Date and the first and second anniversaries of the Certification Date. | | (2) Determined by multiplying the number of units by $128.54, which was the closing price of Garmin shares on NYSE on December 29, 2023. |
2023 OPTION EXERCISES AND STOCK VESTED
2023 OPTION EXERCISES AND STOCK VESTED The following table provides stock awards vested in 2023 for each of the Named Executive Officers. No options were exercised in 2023.
2023 OPTION EXERCISES AND STOCK VESTED
| | Stock Awards | | | | Number of Shares | Value Realized | | | Acquired on Vesting | on Vesting | | Name | (#) | ($) | | Clifton A. Pemble | 27,712 | $3,134,359 | | Douglas G. Boessen | 6,918 | $768,205 | | Andrew R. Etkind | 6,447 | $715,532 | | Philip I. Straub | 11,530 | $1,283,291 | | Patrick G. Desbois | 10,159 | $1,146,017 |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL None of the Named Executive Officers has a severance agreement with Garmin. In the event that (a) a Named Executive Officer dies or becomes disabled, or (b) a Named Executive Officer’s employment is terminated without cause, or a Named Executive Officer resigns with good reason, within twelve months following a change of control of Garmin, all of the Named Executive Officer’s unvested stock options and stock appreciation rights, if any, would immediately become exercisable and all of the Named Executive Officer’s unvested RSUs and performance shares, if any, would immediately become payable. Such accelerated vesting is the only benefit that would be received by a Named Executive Officer upon a change of control and such benefit would also be received by all other employees of Garmin or its subsidiaries who own unvested stock options, stock appreciation rights, restricted stock units or performance shares. If a Named Executive Officer’s employment is terminated without cause, or the executive resigns with good reason, after the Certification Date for PC-RSUs and within twelve months following a change of control of Garmin, all of the executive’s PC-RSUs that were earned pursuant to the performance-based vesting element but not yet vested due to the time-based vesting element would immediately become payable. If the executive’s employment is terminated without cause, or the executive resigns with good reason, prior to the Certification Date and within twelve months after the change of control of Garmin, then all of the executive’s PC-RSUs that would have been earned as of the Certification Date pursuant to the performance-based element but for the termination of employment will become payable within 30 days of the Certification Date. Such accelerated vesting is the only benefit that would be received by a Named Executive Officer upon a change of control and such benefit would also be received by all other employees of Garmin or its subsidiaries who own unvested stock options, stock appreciation rights, restricted stock units or performance shares.
CEO Pay Ratio Disclosure
CEO Pay Ratio Disclosure 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 we are providing the following information about the relationship of the median of the annual total compensation of our employees (on a worldwide basis) and the annual total compensation of our PEO, Mr. Pemble. For 2023, the respective annual total compensation for our median employee and for Mr. Pemble, and the ratio of Mr. Pemble’s annual total compensation to the median employee’s annual total compensation, are set forth below: Median employee annual total compensation: $41,063. Mr. Pemble (PEO) annual total compensation: $6,540,666, as reported in the Summary Compensation Table included in this Proxy Statement. Based on this information, for 2023 the ratio of annual total compensation of our PEO to the annual total compensation of our median employee was approximately 159:1. To identify the median of the annual total compensation of all of our employees, we prepared a listing of all employees as of October 1, 2023. We selected that date to allow sufficient time to identify the median employee given the global scope of our operations. Gross earnings for 2023, as reported to applicable tax authorities, for example, the Internal Revenue Service for our U.S. employees, were then calculated for each of those employees, other than our PEO. Gross earnings for 2023 were annualized for those permanent employees who were hired between January 1, 2023 and October 1, 2023 and for those whose employment terminated between October 2, 2023 and December 31, 2023. Gross earnings paid in currencies other than U.S. dollars were converted to U.S. Dollars using the average 2023 currency exchange rate for each applicable currency. The median employee was then selected from the annualized list. The median employee’s total annual compensation for 2023 was calculated using the same methodology we used to calculate total annual compensation for our PEO and other Named Executive Officers, as set forth in the Summary Compensation Table in this Proxy Statement. We then compared the median employee’s total annual compensation for 2023 to our PEO’s total annual compensation for 2023 to calculate the pay ratio set forth above. We did not make any cost-of-living adjustments in identifying the “median employee.” For supplemental informational purposes, our median U.S. - based employee’s total annual compensation for 2023 was $113,408, and the ratio of our PEO’s total annual compensation for 2023 to our median U.S. based employee’s total annual compensation for 2023 was 58:1.
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 we are providing the following information to show how compensation actually paid (“CAP”) to the PEO and the Non-PEO NEOs (as defined below) (averaged) relates to certain total shareholder return results, Garmin net income and Garmin operating income results for the years 2020-2023.
Pay Versus Performance
| | | | Average | Average | | | | | | | | | Summary | Compensation | Value of Initial Fixed $100 | | | | | | | | Compensation | Actually Paid | Investment Based on: | | | | | | Summary | | Table Total for | to Non-PEO | | Peer Group | | | | | Compensation | Compensation | Non-PEO Named | Named | Total | Total | | | | | Table Total for | Actually Paid to | Executive | Executive | Shareholder | Shareholder | | Operating | | Year | PEO | PEO | Officers | Officers | Return | Return | Net Income | Income | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | | 2023 | $6,540,666 | $10,679,153 | $2,113,742 | $3,241,006 | $144.25 | $148.74 | $1,289,636,000 | $1,092,160,000 | | 2022 | $4,585,595 | $900,886 | $1,888,561 | $698,576 | $100.81 | $104.45 | $973,585,000 | $1,027,845,000 | | 2021 | $4,238,341 | $5,967,081 | $1,694,354 | $2,271,591 | $142.59 | $165.87 | $1,082,200,000 | $1,218,620,000 | | 2020 | $3,684,276 | $5,909,431 | $1,596,351 | $2,383,954 | $125.14 | $133.30 | $992,324,000 | $1,054,240,000 |
Pay Versus Performance
The PEO for each year was Clifton A. Pemble. For 2023 and 2022, the Non-PEO NEOs were Douglas G. Boessen, Andrew R. Etkind, Philip I. Straub and Patrick G. Desbois. For 2021 and 2020, the Non-PEO NEOs were Min H. Kao, Douglas G. Boessen, Andrew R. Etkind, Philip I. Straub and Patrick G. Desbois. The peer group for purposes of the table above is the S&P 500 Consumer Discretionary Index. Operating income, for compensation purposes, is presented from the Company’s audited financial statements without adjustment. To calculate CAP for our PEO, the following amounts were deducted from and added to Summary Compensation Table (“SCT”) total compensation, as required under Item 402(v) of Regulation S-K:
Pay Versus Performance
| | | Deduction of | | | | | | Reported Value of | Equity Award | | | Year | SCT Total | Equity Awards | Adjustments | CAP | | | | (i) | (ii) | | | 2023 | $6,540,666 | $(5,150,023) | $9,288,510 | $10,679,153 | | 2022 | $4,585,595 | $(3,323,452) | $(361,257) | $900,886 | | 2021 | $4,238,341 | $(3,003,686) | $4,732,426 | $5,967,081 | | 2020 | $3,684,276 | $(2,599,853) | $4,825,008 | $5,909,431 |
Pay Versus Performance
| (i) Represents the grant date fair value of equity based awards granted for each year shown, as reported in the SCT. As required under Item 402(v) of Regulation S-K, this value is deducted from SCT total compensation to calculate CAP for each year shown. | | (ii) Represents the value of equity award adjustments for each year shown, as calculated in accordance with the methodology required under Item 402(v) of Regulation S-K. The amounts deducted or added in calculating the equity award adjustments are provided in the supplemental table below: |
Pay Versus Performance
| Equity Award Adjustments for PEO | 2023 | 2022 | 2021 | 2020 | | RSUs: | | | | | | Year-End Fair Value of Awards Granted During Year that Remain Unvested as of Year-End | $2,875,568 | $1,850,599 | $1,663,383 | $1,419,079 | | Change in Fair Value (From Prior Year-End to Current Year-End) of Awards Granted Prior to Current Year that Remain Unvested as of Year-End | $634,049 | $(513,916) | $173,666 | $304,853 | | Change in Fair Value (From Prior Year-End to Vesting Date) of Awards Granted Prior to Current Year that Vested During Year | $498,869 | $(516,070) | $208,362 | $315,569 | | PC-RSUs: | | | | | | Year-End Fair Value of Awards Granted During Year that Remain Unvested as of Year-End | $4,990,626 | - | $2,352,257 | $2,574,357 | | Change in Fair Value (From Prior Year-End to Current Year-End) of Awards Granted Prior to Current Year that Remain Unvested as of Year-End | $211,356 | $(793,151) | $263,567 | $310,319 | | Change in Fair Value (From Prior Year-End to Vesting Date) of Awards Granted Prior to Current Year that Vested During Year | $78,042 | $(388,719) | $71,191 | $(99,169) | | TOTAL EQUITY AWARD ADJUSTMENTS FOR PEO | $9,288,510 | $(361,257) | $4,732,426 | $4,825,008 |
Pay Versus Performance
To calculate CAP for our Non-PEO NEOs (averaged), the following amounts were deducted from and added to SCT total compensation, as required under Item 402(v) of Regulation S-K:
Pay Versus Performance
| | | Deduction of | | | | | | Reported Value of | Equity Award | | | Year | SCT Total | Equity Awards | Adjustments | CAP | | | | (i) | (ii) | | | 2023 | $2,113,742 | $(1,199,958) | $2,327,222 | $3,241,006 | | 2022 | $1,888,561 | $(1,034,936) | $(155,049) | $698,576 | | 2021 | $1,694,354 | $(892,596) | $1,469,833 | $2,271,591 | | 2020 | $1,596,351 | $(843,849) | $1,631,452 | $2,383,954 |
Pay Versus Performance
| (i) Represents the grant date fair value of equity based awards granted for each year shown, as reported in the SCT. As required under Item 402(v) of Regulation S-K, this value is deducted from SCT total compensation to calculate CAP for each year shown. | | (ii) Represents the value of equity award adjustments for each year shown, as calculated in accordance with the methodology required under Item 402(v) of Regulation S-K. The amounts deducted or added in calculating the equity award adjustments are provided in the supplemental table below: |
Pay Versus Performance
| Equity Award Adjustments for Non-PEO NEOs | 2023 | 2022 | 2021 | 2020 | | RSUs: | | | | | | Year-End Fair Value of Awards Granted During Year that Remain Unvested as of Year-End | $592,409 | $548,618 | $438,136 | $407,422 | | Change in Fair Value (From Prior Year-End to Current Year-End) of Awards Granted Prior to Current Year that Remain Unvested as of Year-End | $183,026 | $(139,301) | $50,459 | $93,083 | | Change in Fair Value (From Prior Year-End to Vesting Date) of Awards Granted Prior to Current Year that Vested During Year | $142,035 | $(145,836) | $63,083 | $99,505 | | PC-RSUs: | | | | | | Year-End Fair Value of Awards Granted During Year that Remain Unvested as of Year-End | $1,311,231 | - | $790,793 | $939,757 | | Change in Fair Value (From Prior Year-End to Current Year-End) of Awards Granted Prior to Current Year that Remain Unvested as of Year-End | $71,055 | $(275,337) | $99,430 | $128,340 | | Change in Fair Value (From Prior Year-End to Vesting Date) of Awards Granted Prior to Current Year that Vested During Year | $27,466 | $(143,193) | $27,932 | $(36,655) | | TOTAL EQUITY AWARD ADJUSTMENTS FOR NON-PEO NEOs | $2,327,222 | $(155,049) | $1,469,833 | $1,631,452 |
Relationship Between Compensation Actually Paid and Certain Performance Results
Relationship Between Compensation Actually Paid and Certain Performance Results As required pursuant to Item 402(v) of Regulation S-K, in the charts below we show the relationship for the years shown between CAP for the PEO and the non-PEO NEOs (average) and each of the following: (1) total shareholder return (“TSR”) for Garmin; (2) net income; and (3) operating income. We also show the relationship for the years shown between Garmin TSR and TSR for the S&P 500 Consumer Discretionary Index. As stated above, the Compensation Committee uses operating income and revenue to link CAP to performance. The Compensation Committee does not use TSR or net income.
2023 BOARD OF DIRECTORS COMPENSATION
2023 BOARD OF DIRECTORS COMPENSATION
2023 BOARD OF DIRECTORS COMPENSATION
| Name | Function(1) | Settled in Cash (USD)(2) | Settled in Shares (USD)(3) | Total (USD) | Settled in Cash (Indicative CHF)(2) | Settled in Shares (Indicative CHF)(3) | Total (Indicative CHF) | | Min H. Kao(4) | Executive Chairman, Member of the Board | | | | - | - | - | | Clifton A. Pemble(5) | President & Chief Executive Officer, Member of the Board | | | | - | - | - | | Jonathan Burrell | Member of the Board and Compensation Committee, Chair of Nominating and Corporate Governance Committee | 90,000 | 153,943 | 243,943 | 75,609 | 129,327 | 204,936 | | Joseph Hartnett | Member of the Board, Audit Committee and Nominating and Corporate Governance Committee, Chair of Compensation Committee | 90,000 | 153,943 | 243,943 | 75,609 | 129,327 | 204,936 | | Catherine Lewis | Member of the Board, Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee | 85,000 | 153,943 | 238,943 | 71,409 | 129,327 | 200,736 | | Charles Peffer | Member of the Board, Compensation Committee and Nominating and Corporate Governance Committee, Chair of Audit Committee | 95,000 | 153,943 | 248,943 | 79,810 | 129,327 | 209,137 | | | | 360,000 | 615,772 | 975,772 | 302,437 | 517,308 | 819,745 |
2023 BOARD OF DIRECTORS COMPENSATION
| (1) Functions held by the Board of Directors in other entities are as follows: |
2023 BOARD OF DIRECTORS COMPENSATION
| Name | Company Name | Function | | Min H. Kao | None | | | Jonathan Burrell | Burrell Family Office | Chief Executive Officer | | Joseph Hartnett | None | | | Catherine Lewis | CorEnergy Infrastructure Trust, Inc. | Director, Chair of Audit Committee, and Member of Investment Committee | | Charles Peffer | Commerce Funds Lockton, Inc. | Trustee Advisory Director |
2023 BOARD OF DIRECTORS COMPENSATION
| (2) Represents gross amounts earned during the year, prior to deductions for social security, withholding tax, etc. | | (3) Represents value of share-based compensation received by Board members; USD 153,943 (CHF 129,327) is awarded in shares of the Company. | | (4) While Dr. Kao does not receive any Board payments and is not part of the Executive Management, as an employee of the Company, he received compensation of $413,001 (CHF 346,962) consisting of $350,000 (CHF 294,035) salary, $333 (CHF 280) bonus and $62,668 (CHF 52,647) in other compensation. | | (5) The compensation of Mr. Pemble, as a member of the Executive Management, is included in the 2023 Executive Compensation Table that follows. Any functions held in other entities are also disclosed in that table. |
2023 BOARD OF DIRECTORS COMPENSATION
The 2022 compensation amounts per individual Board member are listed in the table below:
2022 BOARD OF DIRECTORS COMPENSATION
2022 BOARD OF DIRECTORS COMPENSATION
2022 BOARD OF DIRECTORS COMPENSATION
| Name | Function | Settled in Cash (CHF)(1) | Settled in shares (CHF)(2) | Total (CHF) | | Min H. Kao(3) | Executive Chairman, Member of the Board | - | - | - | | Clifton A. Pemble(4) | President & Chief Executive Officer, Member of the Board | - | - | - | | Jonathan Burrell | Member of the Board and Compensation Committee, Chair of Nominating and Corporate Governance Committee | 85,896 | 139,195 | 225,091 | | Joseph Hartnett | Member of the Board, Audit Committee and Nominating and Corporate Governance Committee, Chair of Compensation Committee | 85,896 | 139,195 | 225,091 | | Catherine Lewis | Member of the Board, Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee | 81,124 | 139,195 | 220,319 | | Charles Peffer | Member of the Board, Compensation Committee and Nominating and Corporate Governance Committee, Chair of Audit Committee | 90,668 | 139,195 | 229,863 | | | | 343,584 | 556,780 | 900,364 |
2022 BOARD OF DIRECTORS COMPENSATION
| (1) Represents gross amounts earned during the year, prior to deductions for social security, withholding tax, etc. | | (2) Represents value of share-based compensation received by Board members; USD 145,845 (CHF 139,195) is awarded in shares of the Company. | | (3) While Dr. Kao does not receive any Board payments and is not part of the Executive Management, as an employee of the Company, he received compensation of CHF 395,235 consisting of CHF 340,464 salary, CHF 318 bonus and CHF 54,453 in other compensation. | | (4) The compensation of Mr. Pemble, as a member of the Executive Management, is included in the 2022 Executive Compensation Table that follows. |
2022 BOARD OF DIRECTORS COMPENSATION
The total compensation for 2023 of each member of the Company’s Executive Management during 2023 is listed in the table below:
2023 EXECUTIVE COMPENSATION TABLE
| Name & Principal Position(4) | Salary (USD) | Bonus (USD)(1) | Stock Awards (USD)(2) | All Other Compensation (USD)(3) | Total (USD) | Salary (Indicative CHF) | Bonus (Indicative CHF)(1) | Stock Awards (Indicative CHF)(2) | All Other Compensation (Indicative CHF)(3) | Total (Indicative CHF) | | Clifton A. Pemble * President & Chief Executive Officer | 1,350,962 | 333 | 5,150,023 | 74,694 | 6,576,012 | 1,134,943 | 280 | 4,326,534 | 62,750 | 5,524,507 | | Douglas G. Boessen Chief Financial Officer & Treasurer | 750,577 | 333 | 1,249,990 | 75,895 | 2,076,795 | 630,560 | 280 | 1,050,116 | 63,759 | 1,744,715 | | | 2,101,539 | 666 | 6,400,013 | 150,589 | 8,652,807 | 1,765,503 | 560 | 5,376,650 | 126,509 | 7,269,222 |
2022 EXECUTIVE COMPENSATION TABLE
| Name & Principal Position | Salary (CHF) | Bonus (CHF)(1) | Stock Awards (CHF)(2) | All Other Compensation (CHF)(3) | Total (CHF) | | Clifton A. Pemble* President & Chief Executive Officer | 1,170,058 | 318 | 3,081,804 | 65,411 | 4,317,591 | | Douglas G. Boessen Chief Financial Officer & Treasurer | 662,757 | 318 | 745,345 | 66,280 | 1,474,700 | | | 1,832,815 | 636 | 3,827,149 | 131,691 | 5,792,291 |
Grants of Plan-Based Awards
Grants of Plan-Based Awards The following table provides information for each member of the Company’s Executive Management regarding 2023 grants of restricted stock units (RSUs) and options:
GRANTS OF PLAN-BASED AWARDS
GRANTS OF PLAN-BASED AWARDS
GRANTS OF PLAN-BASED AWARDS
| | | Estimated Future Payouts Under Equity Incentive Plan Awards(1) | | | All Other Stock Awards: Number of Shares of Stock or Units (#)(2) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards (USD/Sh) | Grant Date Fair Value of Stock and Option Awards (USD)(3)(4) | Grant Date Fair Value of Stock and Option Awards (Indicative CHF)(3)(4) | | Name | Grant Date | Threshold (#) | Target (#) | Maximum (#) | | | | | | | Clifton A. Pemble | 12/15/2023 | | | | 22,371 | | | 2,699,956 | 2,268,233 | | | 2/25/2023 | 13,188 | 26,376 | 39,564 | | | | 2,450,067 | 2,058,301 | | Douglas G. Boessen | 12/15/2023 | | | | 5,178 | | | 624,933 | 525,006 | | | 2/25/2023 | 3,365 | 6,729 | 10,094 | | | | 625,057 | 525,110 |
GRANTS OF PLAN-BASED AWARDS
| (1) Awards made in the form of time-based and performance-based vesting restricted stock units (PC-RSUs) on February 25, 2023. | | (2) Awards made in the form of restricted stock units (RSUs) on December 15, 2023. | | (3) This column represents the grant date fair value of PC-RSUs and RSUs. |
GRANTS OF PLAN-BASED AWARDS
| - | For PC-RSUs, that amount assumes 100% (Target) of performance conditions will be met and is calculated by multiplying the closing price of Garmin shares on The New York Stock Exchange on the date of grant, discounted in accordance with accounting requirements to reflect that dividend equivalents are not paid on the PC-RSUs, by the number of shares to be awarded. If 150% of Target (Maximum) is met, the grant date fair value of PC-RSUs would be $3,675,100 (CHF 3,087,451) for Mr. Pemble and $937,585 (CHF 787,665) for Mr. Boessen. | | - | For RSUs, that amount is calculated by multiplying the closing price of Garmin shares on The New York Stock Exchange on the date of grant, discounted in accordance with accounting requirements to reflect that dividend equivalents are not paid on the RSUs, by the number of shares to be awarded. For additional information on the valuation assumptions with respect to the 2023 grants, refer to Note 10 of Garmin’s financial statements in the Form 10-K for the fiscal year ended December 30, 2023, as filed with the SEC. |
GRANTS OF PLAN-BASED AWARDS
| (4) Employer social security contributions are not included as only due at vesting and expected to trigger employer social security costs of a maximum 8% of the value at vesting. |
GRANTS OF PLAN-BASED AWARDS
The following table provides information for each member of the Company’s Executive Management regarding 2022 grants of restricted stock units (RSUs) and options:
GRANTS OF PLAN-BASED AWARDS
| | | Estimated Future Payouts Under Equity Incentive Plan Awards(1) | | | All Other Stock Awards: Number of Shares of Stock or Units (#)(2) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards (CHF/Sh) | Grant Date Fair Value of Stock and Option Awards (CHF)(3)(4) | | Name | Grant Date | Threshold (#) | Target (#) | Maximum (#) | | | | | | Clifton A. Pemble | 12/15/2022 | | | | 20,052 | | | 1,625,517 | | | 2/25/2022 | 7,377 | 14,754 | 22,131 | | | | 1,456,287 | | Douglas G. Boessen | 12/15/2022 | | | | 4,296 | | | 348,256 | | | 2/25/2022 | 2,012 | 4,023 | 6,035 | | | | 397,089 |
GRANTS OF PLAN-BASED AWARDS
| (1) Awards made in the form of time-based and performance-based vesting restricted stock units (PC-RSUs) on February 25, 2022. | | (2) Awards made in the form of restricted stock units (RSUs) on December 15, 2022. | | (3) This column represents the grant date fair value of PC-RSUs and RSUs converted into CHF using the exchange rate on the date of grant. |
GRANTS OF PLAN-BASED AWARDS
| - | For PC-RSUs, that amount assumes 100% (Target) of performance conditions will be met and is calculated by multiplying the closing price of Garmin shares on The New York Stock Exchange on the date of grant, discounted in accordance with accounting requirements to reflect that dividend equivalents are not paid on the PC-RSUs, by the number of shares to be awarded. If 150% of Target (Maximum) is met, the grant date fair value of PC-RSUs would be CHF 2,184,431 for Mr. Pemble and CHF 595,633 for Mr. Boessen. | | - | For RSUs, that amount is calculated by multiplying the closing price of Garmin shares on The New York Stock Exchange on the date of grant, discounted in accordance with accounting requirements to reflect that dividend equivalents are not paid on the RSUs, by the number of shares to be awarded. For additional information on the valuation assumptions with respect to the 2022 grants, refer to Note 10 of Garmin’s financial statements in the Form 10-K for the fiscal year ended December 31, 2022, as filed with the SEC. |
GRANTS OF PLAN-BASED AWARDS
| (4) Employer social security contributions are not included as only due at vesting and expected to trigger employer social security costs of a maximum 8% of the value at vesting. |
OUTSTANDING EQUITY AWARDS AT DECEMBER 30, 2023
OUTSTANDING EQUITY AWARDS AT DECEMBER 30, 2023
OUTSTANDING EQUITY AWARDS AT DECEMBER 30, 2023
| Name and Function | Stock Awards(1) | | Jonathan Burrell | 1,501 | | Member of the Board and Compensation Committee, Chair of Nominating and Corporate Governance Committee | | | Joseph Hartnett | 1,501 | | Member of the Board, Audit Committee and Nominating and Corporate Governance Committee, Chair of Compensation Committee | | | Catherine Lewis | 1,501 | | Member of the Board, Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee | | | Charles Peffer | 1,501 | | Member of the Board, Compensation Committee and Nominating and Corporate Governance Committee, Chair of Audit Committee | | | TOTAL | 6,004 |
OUTSTANDING EQUITY AWARDS AT DECEMBER 30, 2023
| (1) Represents restricted stock units. |
OUTSTANDING EQUITY AWARDS AT DECEMBER 30, 2023
| Name and Function | Stock Awards(1) | | Jonathan Burrell | 1,502 | | Member of the Board and Compensation Committee, Chair of Nominating and Corporate Governance Committee | | | Joseph Hartnett | 1,502 | | Member of the Board, Audit Committee and Nominating and Corporate Governance Committee, Chair of Compensation Committee | | | Catherine Lewis | 1,502 | | Member of the Board, Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee | | | Charles Peffer | 1,502 | | Member of the Board, Compensation Committee and Nominating and Corporate Governance Committee, Chair of Audit Committee | | | TOTAL | 6,008 |
OUTSTANDING EQUITY AWARDS AT DECEMBER 30, 2023
| (1) Represents restricted stock units. |
OUTSTANDING EQUITY AWARDS AT DECEMBER 30, 2023
The following tables provide information for each member of Executive Management regarding outstanding equity awards held by them as of December 30, 2023 and December 31, 2022, respectively. The 2023 table is presented in USD with indicative CHF amounts included for reference. The 2022 table is presented in CHF.
OUTSTANDING EQUITY AWARDS AT DECEMBER 30, 2023
OUTSTANDING EQUITY AWARDS AT DECEMBER 30, 2023
OUTSTANDING EQUITY AWARDS AT DECEMBER 30, 2023
| | Stock Awards | | | | Name | 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 (USD)(3) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested (Indicative CHF)(4) | | Clifton A. Pemble | 4,123(1) | 529,970 | 445,228 | | President & Chief Executive Officer | 13,368(1) | 1,718,323 | 1,443,563 | | | 22,371(1) | 2,875,568 | 2,415,765 | | | 5,831(2) | 749,517 | 629,669 | | | 26,376(2) | 3,390,371 | 2,848,251 | | | 72,069 | | | | Douglas G. Boessen | 861(1) | 110,673 | 92,976 | | Chief Financial Officer & Treasurer | 2,864(1) | 368,139 | 309,273 | | | 5,178(1) | 665,580 | 559,154 | | | 1,608(2) | 206,692 | 173,642 | | | 6,729(2) | 864,946 | 726,641 | | | 17,240 | | | | TOTAL | 89,309 | | |
OUTSTANDING EQUITY AWARDS AT DECEMBER 30, 2023
| (1) Represents restricted stock units. | | (2) Represents time-based and performance-based vesting restricted stock units. | | (3) Determined by multiplying the number of unearned shares by USD 128.54, which was the closing price of Garmin shares on The New York Stock Exchange on December 29, 2023. | | (4) Determined by multiplying the number of unearned shares by CHF 107.99, the CHF equivalent of the USD closing price of Garmin shares on The New York Stock Exchange on December 29, 2023. |
OUTSTANDING EQUITY AWARDS AT DECEMBER 30, 2023
| | Stock Awards | | | Name | 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 (CHF)(3) | | Clifton A. Pemble | 3,935(1) | 335,307 | | President & Chief Executive Officer | 8,246(1) | 702,653 | | | 20,052(1) | 1,708,658 | | | 7,139(2) | 608,324 | | | 11,662(2) | 993,735 | | | 14,754(2) | 1,257,208 | | | 65,788 | | | Douglas G. Boessen | 875(1) | 74,560 | | Chief Financial Officer & Treasurer | 1,722(1) | 146,734 | | | 4,296(1) | 366,068 | | | 2,142(2) | 182,523 | | | 3,216(2) | 274,040 | | | 4,023(2) | 342,805 | | | 16,274 | | | TOTAL | 82,062 | |
OUTSTANDING EQUITY AWARDS AT DECEMBER 30, 2023
| (1) Represents restricted stock units. | | (2) Represents time-based and performance-based vesting restricted stock units. | | (3) Determined by multiplying the number of unearned shares by CHF 85.21, which was the closing price of Garmin shares on The New York Stock Exchange on December 30, 2022. |
OUTSTANDING EQUITY AWARDS AT DECEMBER 30, 2023
Other than as disclosed, no party related to any member of the Board of Directors or Executive Management held any shares of Garmin Ltd. or equity awards in Garmin Ltd. shares as of December 30, 2023 and December 31, 2022. ANNEX 2