DEF 14A of Interface Inc
Filed Apr 1, 2024 · FY20230001437749-24-010367
Summary of Item 1 - Election of Directors
Summary of Item 1 - Election of Directors In this proposal, shareholders are asked to vote "FOR" each of the following ten nominees.
Summary of Item 1 - Election of Directors
| Nominee Name | Director Since | Independent? | Audit Committee | Compensation Committee | Nominating & Governance Committee | Innovation & Sustainability Committee | | John P. Burke | 2013 | Yes | | | ✔ | | | Dwight Gibson | 2019 | Yes | | ✔ | | | | Daniel T. Hendrix | 1996 | No | | | | Chair | | Laurel M. Hurd | 2022 | No | | | | | | Christopher G. Kennedy | 2000 | Yes | | | Chair | | | Joseph Keough | 2019 | Yes | ✔ | ✔ | | | | Catherine M. Kilbane | 2018 | Yes | | Chair | | ✔ | | K. David Kohler | 2006 | Yes | | | ✔ | ✔ | | Catherine Marcus | 2023 | Yes | ✔ | | | | | Robert T. O’Brien | 2022 | Yes | Chair | | | ✔ |
NOMINATION AND ELECTION OF DIRECTORS
NOMINATION AND ELECTION OF DIRECTORS The Bylaws of the Company provide that the Board of Directors shall consist of a maximum of 15 directors, with the exact number of directors being established by action of the Board taken from time to time. The Board of Directors has set the current number of directors at ten. In the event that any nominee for director withdraws or for any reason is not able to serve as a director, each Proxy that is properly executed and returned will be voted for such other person as may be designated as a substitute nominee by the Board of Directors. Each nominee is an incumbent director standing for re-election. Each nominee has consented to being named herein and to continue serving as a director, if re-elected. The term of office for each director continues until the next annual meeting of shareholders and until his or her successor, if there is to be one, has been elected and has qualified.
Board Skills Matrix
Board Skills Matrix The matrix below summarizes certain of the key experience, skills and attributes that our director nominees bring to the Board to enable the effective oversight of our Company and execution of our business strategy. This matrix highlights the depth and breadth of the skills and experience of our director nominees. Additional details regarding each director nominee’s skills, experience and background are set forth in the individual biographies that follow.
Board Skills Matrix
| Experience, skills and Attributes | Burke | Gibson | Hendrix | Hurd | Kennedy | Keough | Kilbane | Kohler | Marcus | O’Brien | | C-Suite Executive Management | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | | | Industry Knowledge | | | ✔ | ✔ | ✔ | | | | | | | Accounting & Finance | | | ✔ | | | ✔ | | | ✔ | ✔ | | International Business | ✔ | ✔ | ✔ | ✔ | | | ✔ | ✔ | ✔ | ✔ | | Strategy Development | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | | ✔ | ✔ | ✔ | | Mergers & Acquisitions | | ✔ | ✔ | ✔ | | ✔ | ✔ | ✔ | | ✔ | | Sales & Marketing | ✔ | ✔ | | ✔ | | | | ✔ | | ✔ | | Environmental Sustainability | ✔ | | ✔ | | ✔ | | | ✔ | | | | Corporate Governance & Risk Management | | | | | | | ✔ | ✔ | | ✔ |
Board Skills Matrix
Certain information relating to each nominee proposed by the Board is set forth below. Under our Corporate Governance Guidelines, directors are required to submit an offer of resignation upon experiencing a job change.
Nominees
Nominees
Nominees
| | Experience: Since 1997, Mr. Burke has been Chief Executive Officer of Trek Bicycle Corporation, one of the world’s largest manufacturers of bicycles, and a company with a mission to help the world use the bicycle as a simple solution to complex problems. He served as chairman of President George W. Bush’s President’s Council on Physical Fitness & Sports and is a founding board member of the Bikes Belong Coalition. Mr. Burke also serves on the board of Trek Bicycle Corporation. | | John P. Burke | Qualifications and skills: Executive level business experience at a manufacturing company that is focused primarily on sales in the consumer channel and with an emphasis on sustainability and innovation. | | Age: 62 Director since 2013 Chief Executive Officer, Trek Bicycle Corporation | | | | Experience: Since January 2024, Mr. Gibson has been an Operating Partner with Pritzker Private Capital. From June 2021 to March 2023, he served as the Chief Executive Officer and as a director of BlueLinx Holdings, Inc. (NYSE: BXC), a leading wholesale distributor of building and industrial products in the U.S. Prior to joining BlueLinx, he was the Chief Commercial Officer for SPX FLOW, Inc., a leading global provider of process solutions and components across a variety of sanitary and industrial market applications. Previously, he served as President, Food & Beverage and Industrial Segments (May 2019 to May 2020) and President, Food & Beverage Segment (June 2016 to May 2019) for SPX FLOW. Prior to joining SPX FLOW, Mr. Gibson spent 11 years at HVAC manufacturer Ingersoll Rand. | | Dwight Gibson | Qualifications and skills: Mr. Gibson brings to the Board experience in driving growth for purpose-driven global manufacturing companies, particularly in the areas of sales, operations, strategy and executive management. | | Age: 49 Director since 2019 Operating Partner, Pritzker Private Capital | | | | Experience: Mr. Hendrix joined the Company in 1983 after having worked previously for a national accounting firm. He was promoted to Treasurer of the Company in 1984, Chief Financial Officer in 1985, Vice President-Finance in 1986, Senior Vice President-Finance in 1995, Executive Vice President in 2000, and President and Chief Executive Officer in July 2001. He was elected to the Board in October 1996, and served as Chairman of the Board from October 2011 to March 2024. In March 2017, Mr. Hendrix retired from the role of Chief Executive Officer. In January 2020, Mr. Hendrix was reappointed as President and Chief Executive Officer of the Company. Mr. Hendrix again retired from the role of Chief Executive Officer in April 2022. Mr. Hendrix has served as a director of cabinet maker American Woodmark Corporation (NASDAQ: AMWD) since May 2005. | | Daniel T. Hendrix | Qualifications and skills: Knowledge extending to virtually all aspects of the Company’s business, with a particular emphasis on strategic planning and financial matters, giving him a unique understanding of our strategies and operations. His tenure provides consistent leadership to the Board and facilitates the interrelationship between the Board and the Company’s executive leadership team. | | Age: 69 Director since 1996 Former CEO and Former Chairman of the Board, Interface, Inc. | |
Nominees
| | Experience: Ms. Hurd was appointed as the Company’s President and Chief Executive Officer in April 2022. From 2019 to 2022, Ms. Hurd served as Segment President, Learning and Development at global consumer goods company Newell Brands Inc., leading its Baby and Writing businesses. Previously, Ms. Hurd was the Division Chief Executive Officer for Newell Brands’ Writing division starting in February 2018. From 2016 to February 2018, she served as Chief Executive Officer of Newell Brands’ Baby division. From May 2014 until 2016, Ms. Hurd was President of the Baby and Parenting division at Newell Brands, where she oversaw the Calphalon, Goody, and Rubbermaid consumer brands. From 2012 to 2014, Ms. Hurd was Vice President, Global Development for Newell Brands, leading both Marketing and Research & Development for the Graco, Aprica, and Teutonia brands globally. Since August 2021, Ms. Hurd also has served on the board of directors of RV manufacturer Thor Industries, Inc. (NYSE: THO). | | Laurel M. Hurd | Qualifications and skills: Extensive executive level experience in sales management, product development, strategy and brand stewardship in both the consumer-packaged goods and the consumer durables sectors. | | Age: 54 Director since 2022 President and Chief Executive Officer, Interface, Inc. | | | | Experience: Mr. Kennedy is the Chairman Emeritus of real estate development company Joseph P. Kennedy Enterprises, Inc., and is a Managing Member of real estate development company Wolf Point Management LLC. He has served on the board of trustees of Ariel Mutual Funds since 1994, and served on the board of directors of Knoll, Inc. (a leading designer and manufacturer of branded office furniture and textiles) from 2014 to 2021. Mr. Kennedy also serves on the boards of two non-profit organizations and one charitable foundation. Effective March 13, 2024, Mr. Kennedy was elected Chairman of the Board. | | Christopher G. Kennedy | Qualifications and skills: Broad understanding of the fundamentals of our business, having managed more than 10 million square feet of commercial real estate and developed thousands of multi-family residential units, and currently oversees, on behalf of the Kennedy family, the billion-dollar Wolf Point real estate development in Chicago. Insight into our industry sector in his former role as the chief executive of one of the leading tradeshow producers in North America gave him responsibility for industry events that are critical to the go-to-market strategy for the Company. His contacts with leading architectural and design firms, as well as the commercial real estate sector, require engagement in submarkets that are important to our operations. | | Age: 60 Director since 2000 Chairman of the Board Chairman Emeritus, Joseph P. Kennedy Enterprises, Inc. | | | | Experience: Mr. Keough serves as Chairman and Chief Executive Officer of Wood Partners. Wood Partners is one of the nation’s largest multi-family residential real estate companies. Prior to serving as Chief Executive Officer, he served as both Chief Financial Officer and President of Wood Partners. Mr. Keough began his career in consulting, and was a Principal at The Boston Consulting Group, an international strategic consulting firm, and later served as Chief Operating Officer of Fuqua Capital, the vertically integrated family office of the Fuqua family. He currently serves on the board of home builder Meritage Home Corporation (NYSE: MTH), and one private company. | | Joseph Keough | Qualifications and skills: Extensive executive level experience in the multi-family residential building industry, including leadership in the areas of finance, accounting, capital markets, real estate development, strategy and operations management. | | Age: 54 Director since 2019 Chairman and Chief Executive Officer, Wood Partners | |
Nominees
| | Experience: Ms. Kilbane retired in 2017 as Senior Vice President of The Sherwin-Williams Company, a Fortune 500 global leader in paints and coatings. She joined Sherwin-Williams in 2013 as Senior Vice President, General Counsel and Secretary. Prior to that, Ms. Kilbane was Senior Vice President and General Counsel from 2003 to 2012 at American Greetings Corporation, one of the world’s largest manufacturers of social expression products. From 1987 to 2003, she was a partner in the general business group at Baker & Hostetler LLP in Cleveland, Ohio. Ms. Kilbane is a director of The Andersons, Inc. (NASDAQ: ANDE) (where she also serves as lead independent director), a Fortune 500 diversified agribusiness company in the grain, ethanol, plant nutrient, and rail sectors, and The Davey Tree Expert Company, a provider of residential and commercial tree care services. She also is a member of the board of directors of the Cleveland Clinic Foundation. | | Catherine M. Kilbane | Qualifications and skills: Over thirty years of experience in corporate law, extensive experience in mergers and acquisitions, including large, multinational transactions, a solid understanding of ensuring shareholder value through her fourteen years of experience with two publicly traded companies and board member experience with for-profit and non-profit organizations. | | Age: 60 Director since 2018 Retired Senior Vice President and General Counsel, The Sherwin-Williams Company | | | | Experience: Since 2015, Mr. Kohler has served as the President and Chief Executive Officer for Kohler Co., a manufacturer of kitchen and bath products, interior furnishings, engines and power generation systems, and an owner and operator of golf and resort destinations. In 2022, he became Chair of Kohler. His previous positions at Kohler include President and Chief Operating Officer (2009-2015), Executive Vice President (2007-2009) and Group President of the Kitchen and Bath Group (1999-2007). He has served as a member of the board of Kohler Co. since 1999, and also is a director of ceramic tile and natural stone manufacturer and distributor Internacional de Cerámica, S.A.B. de C.V., a public company traded on the Mexican Stock Market. Mr. Kohler also serves as a director of the non-profit corporation Green Bay Packers, Inc. | | K. David Kohler | Qualifications and skills: Extensive business experience from his service in executive positions at a manufacturing company with international operations and distribution into both commercial and consumer channels. | | Age: 57 Director since 2006 Chair and Chief Executive Officer, Kohler Co. | |
Nominees
| | Experience: Ms. Marcus serves as the Co-CEO (since October 2023) and Chief Operating Officer (since 2014) of PGIM Real Estate, one of the world’s largest global real estate investment managers and a major profit center of PGIM, the global asset management business of Prudential Financial, Inc. (NYSE: PRU). She is responsible for global strategy and oversees PGIM Real Estate’s business and investment operations globally. Prior to assuming her current roles, Ms. Marcus held several positions with PGIM Real Estate, including head of its U.S. equity business (2014-2023) and senior portfolio manager for its flagship core equity real estate fund (2011-2014). She is also a member of the board of directors for Skanska AB (Nasdaq Stockholm: SKA B), the multinational construction company. | | Catherine Marcus | Qualifications and skills: Extensive experience in the commercial real estate industry and a deep understanding of the corporate office segment, which is a critical area of focus and growth for Interface. She also brings years of global operating experience, understanding how to motivate and lead local teams while also driving global efficiency and consistency. | | Age: 58 Director since 2023 Co-CEO and Chief Operating Officer, PGIM Real Estate | | | | Experience: In May 2022, Mr. O’Brien retired from the position of Deputy Managing Partner of Growth & Offerings for Deloitte’s Audit & Assurance business. In that position, which Mr. O’Brien held since August 2019, he oversaw acquisitions, business development, client pursuits, marketing and marketplace intelligence activities. From December 2009 to March 2020, Mr. O’Brien served as Deloitte’s Global and U.S. Real Estate Sector leader, developing and executing Deloitte’s real estate sector strategy and leading its activities in consulting, advisory, tax and audit services for real estate clients. Mr. O’Brien was a partner at Deloitte from 1995 until his retirement, serving in the audit and mergers and acquisitions areas. | | Robert T. O’Brien | Qualifications and skills: Over 35 years of experience assisting public and privately held real estate, private equity, hospitality and technology companies execute transactions, grow their businesses, and enhance operations. Extensive experience in accounting and auditing, mergers and acquisitions, and corporate finance, as well as financial reporting, internal control, regulatory, risk, leadership succession and corporate governance best practices. Mr. O’Brien is also a certified public accountant. | | Age: 62 Director since 2022 Retired Deputy Managing Partner of Growth & Offerings, Deloitte & Touche LLP | |
Compensation Decision-Making
Compensation Decision-Making The Committee establishes base salaries for the executive officers, including the Named Executive Officers listed in the “Summary Compensation Table” included in this Proxy Statement. The Committee also administers the annual bonus program, the long-term incentive program, retirement benefits, deferred compensation arrangements, and, when applicable, special incentive programs. The Company benchmarks its compensation practices against its peer group. In selecting the peer group, the Committee directly engaged Pearl Meyer & Partners, a nationally recognized, independent compensation consultant, to provide input on compensation matters. In 2023, the Company updated the self-determined peer group to exclude Kimball International, Inc., which was acquired in 2023 and no longer trades publicly, and also to incorporate other peer group changes to align with the peer group it now uses to measure executive compensation. In determining its peer group companies, the Company considered various factors, including the potential peer’s industry, business model, size and complexity. The Company chose a peer group that is a better representation of the Company’s size and market capitalization with minimal revenue dispersion, and with companies in similar industries or lines of business or subject to similar economic and business cycles, including companies with a significant international presence that are also focused on sustainability. The updated peer group selected by the Committee is comprised of:
Compensation Decision-Making
For the past several years, including 2021-2023, Pearl Meyer assisted the Compensation Committee in benchmarking the Company's compensation practices against the peer group. Pearl Meyer performs no other work for the Company. The work of Pearl Meyer for the Compensation Committee to date has not raised any conflict of interest. The Committee also seeks compensation input from the Company’s Chairman, Chief Executive Officer and Chief Human Resources Officer. In addition, the Committee takes into account publicly available data relating to the compensation practices and policies of other companies within and outside the Company’s industry. Furthermore, the policies and programs described below are subject to change as the Committee deems necessary from time to time to respond to economic conditions, meet competitive standards and serve the objectives of the Company and its shareholders.
Discussion of Principal Elements of Compensation Program
| Name | 2022 Base Salary | | 2023 Base Salary | | % Change | Rationale | | Laurel Hurd | | 825,000 | | 858,000 | 4% | Merit | | David Foshee | | 405,000 | | 425,000 | 5% | Merit & Benchmark Alignment | | Bruce Hausmann | | 500,000 | | 520,000 | 4% | Merit | | James Poppens | | 425,000 | | 468,000 | 10% | New Role & Benchmark Alignment | | Nigel Stansfield | £ | 325,552 | £ | 338,574 | 4% | Merit |
Discussion of Principal Elements of Compensation Program
Please see the “Summary Compensation Table” included in this Proxy Statement for the base salaries actually paid to the Named Executive Officers in 2023. Annual Bonus Opportunities The Committee administers the shareholder-approved Executive Bonus Plan, which provides bonus opportunities for Company executives. The bonus opportunities provide an incentive for executives to earn cash compensation based on the achievement of important corporate or business unit (division or subsidiary) financial performance. In determining the appropriate bonus opportunities for 2023, the Committee sought to establish potential awards that, when combined with annual salary, place the total overall cash compensation opportunity for the Company’s executives between the 50th and 75th percentile for comparable companies, provided that the performance objectives are substantially achieved. For 2023, each executive officer of the Company was assigned a bonus potential, expressed as a percentage of base salary. The 2023 bonus potential for each Named Executive Officer is described below.
Discussion of Principal Elements of Compensation Program
| Name | 2023 Bonus Potential (as a percentage of base salary) | | Laurel Hurd | 125% | | David Foshee | 75% | | Bruce Hausmann | 90% | | James Poppens | 90% | | Nigel Stansfield | 90% |
Discussion of Principal Elements of Compensation Program
Actual payouts could range from 0% to 175% of the bonus potential (as described below), depending on the degree to which the established financial objectives were achieved, and are paid on an annual basis approximately 60 days following the end of the year. In 2023, 100% of the bonus potential for the Chief Executive Officer, Chief Financial Officer and each of the other Named Executive Officers was based on measurable financial objectives. These objectives consisted of adjusted operating income, and currency-neutral sales, and the relative weights assigned to these financial objectives were 85% and 15%, respectively. For each financial objective, the Committee establishes a threshold amount, a goal amount, and a maximum amount. The threshold amount must be achieved in order for any bonus amount to be earned with respect to that objective. A pro rata bonus amount is earned based upon (i) the degree to which the threshold amount (resulting in a “cut in” payout equal to 25% of the bonus potential for that criterion) is exceeded, up to the goal amount (resulting in a payout equal to 100% of the bonus potential for that criterion), or (ii) the degree to which the goal amount (resulting in a payout equal to 100% of the bonus potential for that criterion) is exceeded, up to the maximum amount (resulting in a payout equal to 175% of the bonus potential for that criterion). The approach to goal setting involves a process of reviewing, among other things, our prior year’s financial performance, our annual operating plan, and our short-term and long-term strategic objectives. We also take into account the need for setting goals that are challenging yet reasonably achievable so as to provide a competitive pay package necessary for the retention of our talent. Given this methodology, the Committee believes that the threshold level, while challenging, is reasonably likely to be achieved in normalized market conditions, the goal amount is achievable with strong management performance, and the maximum amount would encourage and reward outstanding performance. For example, the Company’s 2023 annual thresholds, goals and maximums were as follows:
Discussion of Principal Elements of Compensation Program
For 2023, the Company’s adjusted operating income (see Appendix A) was $116.4 million, thus exceeding the established threshold amount and resulting in a payout of 93.6% for this criterion (79.5% of the executive’s bonus potential after applying the 85% weighting). The Company’s 2023 currency-neutral sales were $1,260.1 million, thus exceeding the established threshold amount and resulting in a payout of 90.9% for this criterion (13.6% of the executive’s bonus potential after applying the 15% weighting). Based on the Company’s performance, overall 2023 bonus achievement was approximately 93.2% of bonus opportunity for each of the Names Executive Officers, resulting in the following cash payouts:
Discussion of Principal Elements of Compensation Program
| Name | 2023 Actual Bonus | | | Laurel M. Hurd | | 999,570 | | David Foshee | | 297,075 | | Bruce Hausmann | | 436,176 | | James Poppens | | 392,558 | | Nigel Stansfield | £ | 283,996 |
Discussion of Principal Elements of Compensation Program
Long-Term Incentives The Committee administers the shareholder-approved Interface, Inc. 2020 Omnibus Stock Incentive Plan (the “Omnibus Stock Plan”), which is an equity-based plan that allows for long-term incentive awards such as restricted stock, performance shares, restricted stock units, and stock options. The Omnibus Stock Plan provides for the grant to key employees and directors of the Company and its subsidiaries of restricted stock, incentive stock options (which qualify for certain favorable tax treatment), nonqualified stock options, stock appreciation rights, restricted stock units (also known as deferred shares), performance shares and performance units. The size of the awards made to individual officers is based on an evaluation of several factors, including the officer’s level of responsibility, the officer’s base salary, benchmark data and the Company’s overall compensation objectives. The amount and nature of prior equity incentive awards also are generally considered in determining new awards for executive officers. Long-term incentives are intended to attract and retain outstanding executive talent, create a direct link between shareholder and executive interests by focusing executive attention on increasing shareholder value, and motivate executives to achieve specific performance objectives. For instance, stock options (when granted) have an exercise price equal to at least 100% of the market price of the underlying Common Stock on the date of grant. Thus, the stock options only have value if the market price of the Company’s stock rises after the grant date (although no stock options have been granted in recent years). Additionally, restricted stock, restricted stock units, and performance share awards generally vest, in whole or in part, over a period of multiple years (three years for grants made in recent years), giving the executive an incentive to remain employed with the Company for a significant time period to have the opportunity to vest in an award. Description of Available Awards Restricted Shares Awards of restricted shares under the Omnibus Stock Plan generally vest over a period of multiple years following the date of award. The Committee may, in its discretion, also establish performance criteria for these awards, and the restricted shares may vest earlier if such performance criteria are satisfied. Unvested awards are also subject to forfeiture under certain circumstances. All restricted shares awarded to date have been made without consideration from the participant (although the Omnibus Stock Plan authorizes the Committee, in connection with any award, to require payment by the participant of consideration, which can be less than the fair market value of the award on the date of grant). Awards of restricted stock generally will not be transferable by the participant other than by will or applicable laws of descent and distribution. Performance Shares Performance shares are awards reflected in a bookkeeping entry that records the equivalent of one share of Common Stock that may subsequently be earned and payable (and issued) to the participant if specified performance criteria established by the Committee are satisfied. Awards of performance shares may be settled in Common Stock, cash, or a combination thereof, at the Company’s election. Grants of performance shares may provide for the payment to the participant of dividend equivalents on a current, deferred or contingent basis; provided, in all of our past awards of performance shares, we have accrued dividend equivalents that are paid only if and when the underlying performance shares vest. Awards of performance shares generally will not be transferable by the participant other than by will or applicable laws of descent and distribution. Stock Options Options granted under the Omnibus Stock Plan may be incentive stock options (as defined in Section 422 of the Internal Revenue Code of 1986, as amended), nonqualified stock options or a combination of the foregoing, although only employees are eligible to receive incentive stock options. All options under the Omnibus Stock Plan will be granted at an exercise price per share equal to not less than 100% of the fair market value of the Common Stock on the date the option is granted. Options may be structured to vest over a period of multiple years. Options granted under the Omnibus Stock Plan expire following a pre-determined period of time after the date of grant (which may not be more than 10 years after the grant date), and generally will terminate on the date three months following the date that a participant’s employment with the Company terminates. The Company receives no consideration upon the granting of an option. Full payment of the option exercise price must be made when an option is exercised. The exercise price may be paid in cash or in such other form as the Committee may approve, including shares of Common Stock valued at their fair market value on the date of option exercise. Options generally will not be transferable by the holder thereof other than by will or applicable laws of descent and distribution. The Committee has not granted stock options to any executive officer in the past three years. Restricted Stock Units An award of restricted stock units represents an agreement by the Company to issue or transfer shares to the participant in the future in consideration of the performance of services, subject to the fulfillment of such other conditions as the Committee may specify. When so determined by the Compensation Committee, awards of restricted stock units may specify performance objectives. Prior to the payment of the restricted stock units (and delivery of any underlying Shares), the participant has no rights of ownership in the underlying shares. Awards of restricted stock units may be settled in Common Stock, cash, or a combination thereof, at the Company’s election. Awards of restricted stock units may provide for the payment to the participant of dividend equivalents on a current, deferred or contingent basis; provided, in all of our past awards of restricted stock units, we have accrued dividend equivalents that are paid only if and when the awards vest. Awards of restricted stock units generally will not be transferable by the participant other than by will or applicable laws of descent and distribution. Other Potential Awards The Omnibus Stock Plan also provides for the award of stock appreciation rights and performance units. The Committee has not granted any of these other types of awards to any executive officer through the end of 2023. Omnibus Stock Plan Awards in 2021 One-half of the 2021 awards were granted as time-based restricted stock, and the shares would vest 100% on the third anniversary of the grant date, if the executive remained employed with the Company until that date. As in prior years, the 2021 time-based restricted stock awards included a “double trigger” change-in-control vesting provision. In other words, these awards would not vest automatically based solely on the occurrence of a change in control alone; rather, there must be “second trigger” of either (i) an involuntary separation from service or (ii) a separation from service for “Good Reason” (essentially, resignation in the face of negative changes in executive’s employment relationship with the Company). The executive also had the right to receive any cash dividends paid on this time-based restricted stock, throughout the three-year term.
Discussion of Principal Elements of Compensation Program
As discussed above, for 2023, adjusted EBITDA (see Appendix A) was $162.0 million, which exceeded the above-stated threshold and resulted in achievement of 67.0% of the portion of this award that was eligible to be earned based on 2023 performance. The earned shares will not vest until the Compensation Committee certifies attainment following the end of the three-year performance period 2022-2024. Omnibus Stock Plan Awards in 2023 The 2023 long-term incentive plan awards are substantially similar to those described above for 2022, except for material changes described in this paragraph. The Committee made the following changes to better reflect prevailing peer practices: (i) adopted a modified “Rule of 75” (combined age and employment tenure, with minimum age of 58) retirement provision that allows for pro-rata vesting of awards upon eligible retirement; (ii) issued restricted stock units (deferred shares) instead of restricted stock to minimize unfavorable tax consequences associated with the new retirement provision; (iii) adopted ratable vesting of time-based restricted stock units (one-third each year over the three-year vesting period) rather than three-year “cliff” vesting; and (iv) adopted a single three-year (2023-2025) aggregate adjusted EBITDA goal, rather than three one-year goals with annual attainment measurement, with the three-year aggregate adjusted EBITDA goal being the sum of (a) the 2023 budgeted adjusted EBITDA target, plus (b) 106% of 2023 actual adjusted EBITDA result, plus (c) 106% of 2024 actual adjusted EBITDA result. The 2023 adjusted EBITDA targets under this award (in millions) were:
Other Elements of Compensation Program
| ● 401(k) Plan and Other Defined Contribution Plans | ● Employment and Severance Protection Agreements | | ● Elective Deferred Compensation Program | ● Limited Perquisites |
Other Elements of Compensation Program
401(k) Plan and Other Defined Contribution Plans The Company maintains the Interface, Inc. Savings and Investment Plan (the “401(k) Plan”), a tax-qualified 401(k) plan which provides its U.S.-based employees a convenient and tax-advantaged opportunity to save for retirement. The Company’s Named Executive Officers who are based in the United States are eligible to participate in the 401(k) Plan on the same terms as other executive and non-executive employees based in the United States, and receive the same benefits afforded all other participants. Under the 401(k) Plan, all participating employees are eligible to receive matching contributions that are subject to vesting over time. The Company periodically evaluates the level of matching contributions afforded participant employees to ensure competitiveness in the marketplace. The Company currently matches 50% of the first 6% of the employee’s eligible compensation (capped by statutory limitations) that the employee contributed to the 401(k) Plan. Elective Deferred Compensation Program The Company also maintains the Interface, Inc. Nonqualified Savings Plan II (the “Nonqualified Plan”) for certain U.S.-based “highly compensated employees” (as such term is defined in applicable IRS regulations), including the Named Executive Officers who are based in the United States. The compensation level required to participate in the Nonqualified Plan was $130,000 in total annual compensation, and the Company had 117 participants in the plan (including both current and former employees) at the end of 2023. As with the Company’s 401(k) Plan, the Named Executive Officers who are based in the United States are eligible to participate in the Nonqualified Plan on the same terms as other executive and non-executive eligible employees based in the United States, and receive the same benefits afforded all other participants. Under the Nonqualified Plan, all eligible employees can elect to defer, on a pre-tax basis, a portion of their salary and/or annual bonus compensation. The Company currently matches 50% of the first 6% of the employee’s eligible salary and bonus (and sales commissions, if applicable) that was deferred, less any potential Company matching amounts under the 401(k) Plan. Please see the “Non-Qualified Deferred Compensation” table included in this Proxy Statement for further details regarding the Nonqualified Plan, as well as the Company’s Named Executive Officers’ contributions, earnings and account balances applicable to the Nonqualified Plan for fiscal year 2023. Pension/Salary Continuation Programs Foreign Defined Benefit Plans The Company has trustee-administered defined benefit retirement plans (“Pension Plans”) which cover certain of its overseas employees. The benefits are generally based on years of service and the employee’s average monthly compensation. Mr. Stansfield is a participant in a legacy Pension Plan which existed and was frozen during the time before he became an executive officer. None of our other Named Executive Officers are participants in these plans. Please see the “Pension Benefits” table included in this Proxy Statement for information about Mr. Stansfield’s pension benefit. Salary Continuation Plan Pursuant to a former Salary Continuation Plan which is closed to new participants, the Company has maintained a Salary Continuation Agreement with its former employee and current director Mr. Hendrix since 1986. (The Company most recently amended and restated the Salary Continuation Agreement with Mr. Hendrix in January 2008, primarily to comply with Section 409A of the Internal Revenue Code of 1986, as amended. The benefits under his amended and restated agreement are substantially similar to those under his prior agreement.) The individual Salary Continuation Agreement contains essentially all of the benefit terms and conditions, and the agreement controls in the event of any conflict with the Salary Continuation Plan document. Please see the “2023 Director Compensation” table included in this Proxy Statement for information about the Salary Continuation Plan benefits applicable to Mr. Hendrix. No other current officers or employees of the Company participate in the Salary Continuation Plan. Employment and Severance Protection Agreements The Company has Severance Protection and Change in Control Agreements with each of its current executive officers that provide for certain severance benefits if the individual’s employment is terminated involuntarily without cause or in connection with a change in control. The agreement also contains provisions placing restrictions on the individual’s ability to compete with the Company for a period of 12 or 24 months following termination of employment, depending on the circumstances of termination. (Mr. Stansfield also has a separate employment agreement addressing the basic terms of his U.K.-based employment.) Please see the further discussion below in the “Potential Payments Upon Termination or Change of Control” section of this Proxy Statement regarding the respective employment and severance protection agreements of the Company’s Named Executive Officers. Perquisites In order to provide a market competitive total compensation package to the Company’s executive officers, including the Named Executive Officers, the Company provides a limited set of perquisites that it believes enable its Named Executive Officers to perform their responsibilities efficiently and with minimal distractions. The perquisites provided to one or more Named Executive Officers in 2023 included the following:
Other Elements of Compensation Program
| ● Company-provided automobile/allowance | ● Long-term care and life insurance | | ● Company-provided telephone | |
Summary Compensation Table
Summary Compensation Table The following table provides information about the compensation paid by the Company and its subsidiaries to the Company’s Named Executive Officers for each of the past three fiscal years.
Summary Compensation Table
| Name and Principal Position | Year | Salary | Bonus | Stock Awards | Option Awards | Non-Equity Incentive Plan Compensation | Change in Pension Value and Nonqualified Deferred Compensation Earnings | All Other Compensation | Total | | (a) | (b) | ($) (c) | ($) (d)(1) | ($) (e)(2) | ($) (f) | ($) (g)(3) | ($) (h)(4) | ($) (i)(5) | ($) (j)(6) | | Laurel M. Hurd, | 2023 | 858,000 | - | 2,614,777 | - | 999,570 | - | 54,163 | 4,526,511 | | President and CEO | 2022 | 584,375 | - | 3,543,485 | - | 941,531 | - | 21,919 | 5,091,309 | | David B. Foshee, | 2023 | 425,000 | - | 736,994 | - | 297,075 | - | 37,419 | 1,496,488 | | Vice President, | 2022 | 405,000 | - | 437,868 | - | 277,324 | - | 37,921 | 1,158,113 | | General Counsel and | 2021 | 392,879 | - | 819,469 | - | 426,372 | - | 26,040 | 1,664,760 | | Secretary | | | | | | | | | | | Bruce A. Hausmann, | 2023 | 520,000 | - | 1,043,916 | - | 436,176 | - | 47,184 | 2,047,276 | | Vice President and | 2022 | 500,000 | - | 648,684 | - | 410,850 | - | 42,753 | 1,602,288 | | CFO | 2021 | 454,490 | - | 1,137,561 | - | 591,882 | - | 28,419 | 2,212,352 | | James L. Poppens, | 2023 | 468,000 | - | 936,668 | - | 392,558 | - | 26,522 | 1,823,749 | | Vice President | 2022 | 425,000 | - | 551,382 | - | 444,083 | - | 26,192 | 1,446,656 | | | 2021 | 400,000 | - | 667,456 | - | 380,520 | - | 27,681 | 1,475,657 | | Nigel Stansfield, | 2023 | 431,015 | - | 938,663 | - | 361,535 | 54,137 | 37,312 | 1,822,662 | | Vice President* | 2022 | 392,557 | - | 562,738 | - | 256,144 | 0 | 31,343 | 1,242,782 | | | 2021 | 426,695 | - | 1,111,610 | - | 633,259 | 0 | 34,442 | 2,206,006 |
Summary Compensation Table
| * Mr. Stansfield was paid in British pound sterling. In calculating the U.S. dollar equivalent for disclosure purposes, the Company has converted each payment in British pound sterling into U.S. dollars based on the exchange rate in effect as of the end of the year (£1 to $1.27 for 2023, £1 to $1.21 for 2022, and £1 to $1.35 for 2021). |
Summary Compensation Table
| (1) The Company paid no discretionary bonuses, or bonuses based on performance metrics that were not pre-established and communicated to the Named Executive Officers. All cash bonus awards were performance-based. These payments, which were made under the Company’s Executive Bonus Plan, are reported in the “Non-Equity Incentive Plan Compensation” column (column (g)). |
Summary Compensation Table
| (2) The amounts reported in the “Stock Awards” column are computed based upon the grant date fair values as of the respective grant dates. See the Note entitled “Shareholders’ Equity” to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, regarding assumptions underlying valuation of equity awards. See the “Grants of Plan-Based Awards” table included in this Proxy Statement for additional information about equity awards granted in 2023, and the “Outstanding Equity Awards at Fiscal Year-End” table included in this Proxy Statement for information with respect to awards outstanding at year-end 2023. The ultimate payout value with respect to the “Stock Awards” included in column (e) may be significantly more or less than the amounts shown, and possibly zero, depending on the Company’s financial performance at the end of the performance or restricted period and the recipient’s tenure of employment. For a description of the performance criteria, please see the discussion contained in the “Compensation Discussion and Analysis” section herein. |
Summary Compensation Table
| (3) The amounts reported in the “Non-Equity Incentive Plan Compensation” column reflect the amounts earned by and paid to each Named Executive Officer under the Company’s Executive Bonus Plan. The material provisions of the Executive Bonus Plan are more fully described in the “Compensation Discussion and Analysis” section included herein. |
Summary Compensation Table
| (4) The amount reported in the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column represents the aggregate change in the actuarial present value of the accumulated benefit under the Interface Europe Pension Scheme (the “UK Plan”) for Mr. Stansfield, except where such amount is negative and in that case is shown as $0 in the table. Mr. Stansfield participates in a legacy European pension plan which existed and was frozen during the time before he became an executive officer. In 2023, the actuarial present value of the accumulated benefit for Mr. Stansfield increased by $54,137. See the “Pension Benefits” table of this Proxy Statement for additional information about these benefits for Mr. Stansfield. The other Named Executive Officers do not participate in a Pension Plan. The Company does not pay any above-market interest (or any guaranteed interest rate) on its Nonqualified Plan. |
Summary Compensation Table
| (5) The amounts reported in the “All Other Compensation” column reflect, for each Named Executive Officer, the sum of (i) the incremental cost to the Company of all perquisites and other personal benefits, and (ii) amounts contributed by the Company to the 401(k) Plan or Nonqualified Plan (collectively, the “Company Retirement Plans”). The material provisions of the Company Retirement Plans are contained in the “Compensation Discussion and Analysis” section herein. |
Summary Compensation Table
The following table outlines those perquisites and all other compensation required by SEC rules to be separately quantified that were provided to the Company’s Named Executive Officers during 2023.
Summary Compensation Table
| Name | Automobile ($) | Telephone ($) | Dividends and Dividend Equivalents ($) | Company Contributions to Retirement Plans ($) | Other ($) | | Laurel M. Hurd | 18,000 | 1,454 | 3,479 | 31,230 | 0 | | David B. Foshee | 12,504 | 699 | 3,052 | 21,070 | 94 | | Bruce A. Hausmann | 12,038 | 2,777 | 4,284 | 27,926 | 158 | | James L. Poppens | 12,281 | 2,459 | 1,906 | 9,643 | 233 | | Nigel Stansfield | 16,511 | 923 | 3,544 | 0 | 16,335 |
Summary Compensation Table
Automobile/Automobile Allowance. Each of the Named Executive Officers was provided with use of a company-provided automobile, or an automobile allowance, plus fuel and maintenance. Telephone. The Company paid certain fees associated with the Named Executive Officers’ use of company-provided cellular telephones. Dividends and Dividend Equivalents. In 2023, the Company paid on all outstanding Common Stock of the Company (including time-based awards of restricted stock, but not on unvested performance shares) dividends of $0.01 per share in each fiscal quarter. Dividend equivalents accrue on awards of performance shares and are paid out only if, and to the extent, the performance shares actually vest. The amounts in the “Dividends and Dividend Equivalents” column reflect dividends paid on time-based restricted shares, and dividend equivalents paid on performance shares that vested, in 2023. Contributions to Retirement Plans. The Company makes matching contributions, on the same terms and using the same formulas as for other participating employees, to each U.S.-based Named Executive Officer’s account under the 401(k) Plan and the Nonqualified Plan, as applicable. Other. For Ms. Hurd and Messrs. Foshee, Hausmann and Poppens, the amount represents Company paid premiums for long-term care insurance. For Mr. Stansfield, the amount represents Company paid premiums for life, critical illness and private health insurance. The amounts reflected below represent the contributions to retirement plans by the Company:
Summary Compensation Table
| Name | Year | Company Contribution To 401(k) Plan ($) | Company Contribution To Nonqualified Plan ($) | | Laurel M. Hurd | 2023 | 4,950 | 26,280 | | | 2022 | 3,688 | - | | David B. Foshee | 2023 | 9,900 | 11,170 | | | 2022 | 6,833 | 16,121 | | | 2021 | 6,817 | 3,446 | | Bruce A. Hausmann | 2023 | 9,900 | 18,026 | | | 2022 | 9,150 | 15,000 | | | 2021 | 8,550 | - | | James L. Poppens | 2023 | 9,643 | - | | | 2022 | 9,150 | - | | | 2021 | 8,185 | - |
Summary Compensation Table
As a non-U.S. employee, Mr. Stansfield is ineligible to participate in the 401(k) Plan and the Nonqualified Plan.
Summary Compensation Table
| (6) In 2023, salary as a percentage of total compensation (excluding change in pension value) for each of Ms. Hurd and Messrs. Foshee, Hausmann, Poppens, and Stansfield was 19%, 28%, 25%, 26%, and 24%, respectively. In 2022, this percentage for each of Ms. Hurd and Messrs. Foshee, Hausmann, Poppens, and Stansfield was 12%, 35%, 31%, 29%, and 32%, respectively. In 2021, this percentage for each of Messrs. Foshee, Hausmann, Poppens, and Stansfield was 24%, 21%, 27%, and 19%, respectively. |
Grants of Plan-Based Awards in 2023
Grants of Plan-Based Awards in 2023 The following table provides information about awards granted to the Company’s Named Executive Officers in 2023, as well as potential future payments associated therewith.
Grants of Plan-Based Awards in 2023
| | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | | | Name (a) | Grant Date (b) | Threshold ($) (c) | Target ($) (d) | Maximum ($) (e) | Threshold (#) (f) | Target (#) (g)(2) | Maximum (#) (h) | Grant Date Fair Value of Stock and Option Awards ($) (l) (3) | | Laurel M. Hurd | 1-12-23 | 268,125 | 1,072,500 | 1,876,875 | | | | | | | 1-12-23 | | | | 30,264 | 121,054 | 242,108 | 1,307,383 | | | 1-12-23 | | | | - | 121,055 | 121,055 | 1,307,394 | | David B. Foshee | 1-12-23 | 79,688 | 318,750 | 557,813 | | | | | | | 1-12-23 | | | | 6,575 | 26,299 | 52,598 | 284,029 | | | 1-12-23 | | | | - | 26,300 | 26,300 | 284,040 | | | 2-27-23 | | | | - | 19,196 | 19,196 | 168,925 | | Bruce A. Hausmann | 1-12-23 | 117,000 | 468,000 | 819,000 | | | | | | | 1-12-23 | | | | 9,654 | 38,614 | 77,228 | 417,031 | | | 1-12-23 | | | | - | 38,614 | 38,614 | 417,031 | | | 2-27-23 | | | | - | 23,847 | 23,847 | 209,854 | | James L. Poppens | 1-12-23 | 105,300 | 421,200 | 737,100 | | | | | | | 1-12-23 | | | | 8,688 | 34,752 | 69,504 | 375,322 | | | 1-12-23 | | | | - | 34,753 | 34,753 | 375,332 | | | 2-27-23 | | | | - | 21,138 | 21,138 | 186,014 | | Nigel Stansfield* | 1-12-23 | 96,978 | 387,913 | 678,848 | | | | | | | 1-12-23 | | | | 8,707 | 34,826 | 69,652 | 376,121 | | | 1-12-23 | | | | - | 34,827 | 34,827 | 376,132 | | | 2-27-23 | | | | - | 21,183 | 21,183 | 186,410 |
Grants of Plan-Based Awards in 2023
| * Estimated potential payments under Non-Equity Incentive Plan Awards for Mr. Stansfield were converted into U.S. dollars based on the exchange rate as of the end of fiscal year 2023. |
Grants of Plan-Based Awards in 2023
| (1) The payment amounts reflected in columns (c), (d) and (e) represent amounts associated with awards potentially earned for fiscal year 2023 by the Company’s Named Executive Officers under the Company’s Executive Bonus Plan. The total bonus opportunity under the Executive Bonus Plan (expressed as a percentage of 2023 base salary) was 125% for Ms. Hurd, 90% for Messrs. Hausmann, Poppens and Stansfield, and 75% for Mr. Foshee. Up to 175% of the bonus opportunity may be earned for maximum achievement. Certain additional material provisions of the Executive Bonus Plan are more fully described in the “Compensation Discussion and Analysis” section included herein. |
Grants of Plan-Based Awards in 2023
| (2) The amounts reflected in column (g) represent the number of shares of restricted stock and performance shares granted to the executives in 2023 under the Omnibus Stock Plan. See the Compensation Discussion and Analysis herein for additional information on these awards. |
Grants of Plan-Based Awards in 2023
| (3) The amounts reflected in column (l) represent the dollar value of restricted stock and performance shares awarded to the executives, calculated by multiplying the number of shares (assuming target payout) awarded by the closing price of the Company’s Common Stock as reported by the Nasdaq Stock Market on the trading date immediately preceding the date of grant. These values are included in the “Stock Awards” column (column (e)) of the Summary Compensation Table. |
Outstanding Equity Awards at 2023 Fiscal Year-End
Outstanding Equity Awards at 2023 Fiscal Year-End The following table provides information about the number of shares covered by exercisable and unexercisable options and unvested stock awards outstanding and held by the Company’s Named Executive Officers as of the end of fiscal year 2023.
Outstanding Equity Awards at 2023 Fiscal Year-End
| | Option Awards | | | | | Stock Awards | | | | | Name (a) | Number of Securities Underlying Unexercised Options (#) Exercisable (b) | Number of Securities Underlying Unexercised Options (#) Unexercisable (c) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) (d) | Option Exercise Price ($) (e) | Option Expiration Date (f) | Number of Shares or Units of Stock That Have Not Vested (#) (g)(1) | Market Value of Shares or Units of Stock That Have Not Vested ($) (h)(2) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) (i) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (j)(2) | | Laurel M. Hurd | - | - | - | - | - | 224,465 | 2,832,748 | 225,437 | 2,845,015 | | David B. Foshee | - | - | - | - | - | 110,947 | 1,400,151 | 53,225 | 671,700 | | Bruce A. Hausmann | - | - | - | - | - | 155,241 | 1,959,141 | 77,154 | 973,683 | | James L. Poppens | - | - | - | - | - | 118,378 | 1,493,930 | 62,219 | 785,204 | | Nigel Stansfield | - | - | - | - | - | 143,321 | 1,808,711 | 70,464 | 889,256 |
Outstanding Equity Awards at 2023 Fiscal Year-End
| (1) Restricted stock awards and achieved performance shares that have not yet vested are subject to forfeiture by the Named Executive Officers under certain circumstances. For a description of the related vesting criteria, please see the discussion contained in the “Compensation Discussion and Analysis” section herein. Subject to risk of forfeiture, these shares were scheduled to vest as shown below. Where vesting is noted to occur in the first quarter of a fiscal year, the vesting will occur during that quarter when the Compensation Committee certifies performance attainment through end of the prior fiscal year. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| ● | For Ms. Hurd, 69,589 will vest on 4/18/24, 121,055 will vest on 1/12/26, and 33,821 will vest in the first quarter of 2025. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| ● | For Mr. Foshee, 8,767 vested on 1/12/24, 15,861 vested on 2/26/24, 28,957 vested on 3/16/24, 8,767 will vest on 1/12/25, 16,599 will vest on 1/24/25, 8,766 will vest on 1/12/26, 19,196 will vest on 2/27/26, and 4,034 will vest in the first quarter of 2025. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| ● | For Mr. Hausmann, 12,872 vested on 1/12/24, 22,017 vested 2/26/24, 40,197 vested on 3/16/24, 12,871 will vest on 1/12/25, 24,590 will vest on 1/24/25, 12,871 will vest on 1/12/26, 23,847 will vest on 2/27/26, and 5,976 will vest in the first quarter of 2025. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| ● | For Mr. Poppens, 11,585 vested on 1/12/24, 12,920 vested on 2/26/24, 23,585 vested on 3/16/24, 11,584 will vest on 1/12/25, 20,902 will vest on 1/24/25, 11,584 will vest on 1/12/26, 21,138 will vest on 2/27/26, and 5,080 will vest in the first quarter of 2025. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| ● | For Mr. Stansfield, 11,609 vested on 1/12/24, 21,515 vested on 2/26/24, 39,280 vested on 3/16/24, 11,609 will vest on 1/12/25, 21,332 will vest on 1/24/25, 11,609 will vest on 1/12/26, 21,183 will vest on 2/27/26, and 5,184 will vest in the first quarter of 2025. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| (2) The market value referenced above is based on the closing price of $12.62 per share of the Company’s Common Stock on December 29, 2023 (the last trading day of the Company’s 2023 fiscal year), as reported by the Nasdaq Stock Market. |
Option Exercises and Stock Vested in 2023
Option Exercises and Stock Vested in 2023 The following table provides information about the number and corresponding value realized during 2023 with respect to (i) the exercise of stock options, and (ii) the vesting of restricted stock and performance shares for each of the Company’s Named Executive Officers.
Option Exercises and Stock Vested in 2023
| | Option Awards | | Stock Awards | | | Name (a) | Number of Shares Acquired on Exercise (#) (b) | Value Realized on Exercise ($) (c) | Number of Shares Acquired on Vesting (#) (d) | Value Realized on Vesting ($) (e)(1) | | Laurel M. Hurd | - | - | 69,590 | 552,545 | | David B. Foshee | - | - | 17,875 | 158,458 | | Bruce A. Hausmann | - | - | 24,611 | 218,172 | | James L. Poppens | - | - | 8,040 | 71,273 | | Nigel Stansfield | - | - | 21,850 | 193,696 |
Option Exercises and Stock Vested in 2023
| (1) The dollar amount is determined by multiplying (i) the number of shares vested by (ii) the closing price of our Common Stock on the Nasdaq Stock Market on the day preceding the vesting date. |
Pension Benefits
Pension Benefits The following table provides information about the pension benefits for each of the Company’s Named Executive Officers.
Pension Benefits
| Name (a) | Plan Name (b)(1) | Number of Years Credited Service (#) (c) | Present Value of Accumulated Benefit ($) (d) | Payments During Last Fiscal Year ($) (e) | | Laurel M. Hurd | - | - | - | - | | David B. Foshee | - | - | - | - | | Bruce A. Hausmann | - | - | - | - | | James L. Poppens | - | - | - | - | | Nigel Stansfield | UK Plan | 20 | 508,104 | 0 |
Pension Benefits
| (1) The benefits for Mr. Stansfield under the UK plan previously vested. All assumptions are the same as are used for financial reporting purposes under generally accepted accounting principles. The UK Plan was frozen as of March 2010. |
2023 Non-Qualified Deferred Compensation
2023 Non-Qualified Deferred Compensation The following table provides information about the contributions, earnings and account balances of the Company’s applicable deferred compensation plans for each of the Company’s Named Executive Officers.
2023 Non-Qualified Deferred Compensation
| Name (a)(1) | Executive Contributions in Last FY ($) (b) | Company Contributions in Last FY ($) (c)(2) | Aggregate Earnings in Last FY ($) (d)(3) | Aggregate Withdrawals/ Distributions ($) (e) | Aggregate Balance at Last FYE ($) (f) | | Laurel M. Hurd | 52,560 | - | 4,631 | - | 57,191 | | David B. Foshee | 42,139 | 16,121 | 21,466 | - | 183,454 | | Bruce A. Hausmann | 55,852 | 15,000 | 48,675 | - | 312,925 | | James L. Poppens | - | - | - | - | - | | Nigel Stansfield | - | - | - | - | - |
2023 Non-Qualified Deferred Compensation
| (1) The Company maintains the Nonqualified Plan for certain U.S.-based “highly compensated employees” (as such term is defined in applicable IRS regulations), including each of the U.S.-based Named Executive Officers. As with the Company’s 401(k) Plan, the U.S.-based Named Executive Officers are eligible to participate in the Nonqualified Plan on the same terms as other eligible executive and non-executive employees based in the United States, and receive the same benefits afforded all other participants. As a non-U.S. employee, Mr. Stansfield is ineligible for participation in the plan. |
2023 Non-Qualified Deferred Compensation
| Under the Nonqualified Plan, all eligible employees can elect to defer, on a pre-tax basis, a portion of their salary and/or annual bonus compensation. Each participant elects when the deferred amounts will be paid out, which can be during or after employment, subject to the provisions of Section 409A of the Internal Revenue Code. The employee earns a deferred return based on deemed investments in mutual funds selected by the employee from a list provided by the Company. The investment risk is borne entirely by the employee participant. Gains and losses are credited based on the participant’s election of a variety of deemed investment choices. Participants’ accounts appreciate or depreciate depending on the performance of their deemed investment choices. None of the deemed investment choices provide interest at above-market rates (or any guaranteed interest rate). The Company has established an irrevocable grantor (“rabbi”) trust to hold, invest and reinvest deferrals and contributions under the Nonqualified Plan, and all deferrals are paid out in cash upon distribution. |
2023 Non-Qualified Deferred Compensation
| (2) The amounts reported in column (c) reflect, for each Named Executive Officer (as applicable), the actual amounts contributed by the Company to the Nonqualified Plan during fiscal year 2023 (including contributions in 2023 with respect to compensation deferrals in 2022). |
2023 Non-Qualified Deferred Compensation
| (3) The amounts reported in column (d) are not reported as compensation to the Named Executive Officers in the Company’s Summary Compensation Table. However, the Company’s matching contributions reported in column (c) are included in the “All Other Compensation” column of the Company’s Summary Compensation Table. |
Potential Payments Upon Termination or Change in Control
Potential Payments Upon Termination or Change in Control The Company is generally obligated to provide its Named Executive Officers with certain payments or other forms of compensation when their employment with the Company is terminated. The actual amount of compensation due each of the Named Executive Officers, as well as the duration of any periodic payments, depends on both the circumstances surrounding the termination, as well as the particulars of any employment-related agreements to which the Company and the Named Executive Officer are party. The Company has Severance Protection and Change in Control Agreements with each of the Named Executive Officers that provide for certain severance benefits if their employment is terminated involuntarily under certain circumstances. In general, those benefits are:
Potential Payments Upon Termination or Change in Control
| ● | In the event of a termination without cause, Ms. Hurd would be entitled to severance benefits equal to two times her annual base salary plus two times her target annual bonus (payable for and over a 24-month period), a prorated annual bonus based on the date of termination, and continued health insurance benefits at her regular rate for 24 months. The other executives would be entitled to severance benefits equal to the executive’s annual base salary plus target annual bonus (payable for and over a 12-month period), a prorated annual bonus based on the date of termination, and continued health insurance benefits at the executive’s regular rate for 12 months. |
Potential Payments Upon Termination or Change in Control
| ● | In the event of an involuntary separation from service or a separation from service for good reason within 24 months following a “change in control” (as defined in the agreement), Ms. Hurd would be entitled to two and one-half times her annual base salary plus two and one-half times the greater of (i) her target annual bonus or (ii) the average bonus earned over the preceding three fiscal years (payable in a lump sum)), a prorated annual bonus based on the date of termination, and continued health insurance benefits at her regular rate for 24 months. The other executives would be entitled to severance benefits equal to two times the executive’s annual base salary plus two times the greater of (i) target annual bonus or (ii) the average bonus earned over the preceding three fiscal years (payable in a lump sum), a prorated annual bonus based on the date of termination, and continued health insurance benefits at the executive’s regular rate for 12 months. |
Potential Payments Upon Termination or Change in Control
| ● | In the event of a voluntary resignation or retirement, the executive is entitled to a prorated bonus for such fiscal year based on the date of resignation or retirement. |
Potential Payments Upon Termination or Change in Control
| ● | In the event of a termination for cause, the executive is entitled to no payment or compensation whatsoever, other than salary through the executive’s last day of employment, reimbursable expenses properly incurred through executive’s last day of employment, and such other amounts that in the ordinary course are due to be paid or delivered to the executive on or before the executive’s last day of employment. |
Potential Payments Upon Termination or Change in Control
| ● | The benefits outlined in the terms of the executive’s individual equity award agreements in effect at the time. |
Potential Payments Upon Termination or Change in Control
The Severance Protection and Change in Control Agreements also contain provisions placing restrictions on their ability to compete with the Company for a period of 12 or 24 months following termination of employment, depending on the circumstances of termination. The following tables summarize the benefits payable to each of the Named Executive Officers under their respective agreements or arrangements described above in effect on December 29, 2023 (the last business day of the Company’s 2023 fiscal year). The tables do not include amounts payable under employee benefit plans in which Company associates are eligible to participate on a non-discriminatory basis. The amounts shown in the tables below assume that a Named Executive Officer’s employment terminated as of December 29, 2023, and that the fair market value of the Company’s Common Stock was $12.62 per share.
CEO PAY RATIO
CEO PAY RATIO As required by SEC rules and described below, we are disclosing the annual total compensation of our CEO, the annual total compensation of our median employee, and the ratio between those two amounts. To prepare this analysis, the Company identified its median employee from its December 31, 2022, analysis and calculated the total compensation for that employee for 2023 using data for the following elements of compensation: salary, equity awards, incentive compensation, and non-equity incentive compensation, over a trailing 12-month period from payroll records. The Company used the same median employee for its 2023 analysis as it did for 2022 because the Company believes that there has been no change in its employee population or employee compensation arrangements that would significantly impact the pay ratio. For purposes of reporting annual total compensation and the ratio of annual total compensation of the CEO to the median employee, both the CEO and median employee’s annual total compensation are calculated consistent with the disclosure requirements of executive compensation under Item 402(c)(2)(x) of Regulation S-K. For 2023, the median employee’s annual total compensation was $62,044, and the total annual compensation of our CEO was $4,526,511. Based on this information, the ratio of the total annual compensation of our CEO to the total annual compensation of our median employee was 73:1. The median employee was located in the United States.
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE Pursuant to a mandate of the Dodd-Frank Act commonly referred to as "Pay versus Performance," the SEC has adopted a rule requiring registrants to provide a clear description of (1) the relationship between executive compensation actually paid ("CAP") to the Company's NEOs (including the principal executive officer or person acting in a similar capacity during the last completed fiscal year ("CEO")) and the Company’s cumulative total shareholder return (“TSR”), net income and a third Company-selected financial measure, and (2) the relationship between the Company's TSR and the TSR of a peer group chosen by the Company. The following table provides information regarding CAP to our CEO and non-CEO NEOs during each of the past four fiscal years, as well as TSR, net income, and our Company-selected measure, adjusted EBITDA. See the “Compensation Discussion and Analysis" section above for a comprehensive discussion of our executive compensation program and philosophy.
PAY VERSUS PERFORMANCE
| | | | | | | | Value of Initial Fixed $100 Investment Based on: | | | | | Year (a) | Summary Compensation Table Total for Current CEO(1) ($) (b) | Compensation Actually Paid to Current CEO ($) (c) | Summary Compensation Table Total for Former CEO(1) ($) (d) | Compensation Actually Paid to Former CEO ($) (e) | Average Summary Compensation Table Total for Non-CEO NEOs(1) ($) (f) | Average Compensation Actually Paid to Non-CEO NEOs ($) (g) | Interface Total Shareholder Return(2) ($) (h) | Peer Group Total Shareholder Return(2)(3) ($) (i) | Net Income (in Millions) ($) (j) | Interface Adjusted EBITDA(4) (in Millions) ($) (k) | | 2023 | 4,526,511 | 4,807,487 | N/A | N/A | 1,784,010 | 2,130,682 | 77.74 | 99.79 | 44.5 | 162.0 | | 2022 | 5,091,309 | 4,511,701 | 3,658,931 | 1,914,885 | 1,362,460 | 645,183 | 60.70 | 99.94 | 19.6 | 176.1 | | 2021 | N/A | N/A | 6,250,848 | 7,083,641 | 1,889,694 | 2,188,909 | 97.22 | 132.16 | 55.2 | 169.4 | | 2020 | N/A | N/A | 4,048,192 | 2,616,934 | 960,162 | 361,982 | 64.03 | 96.92 | (71.9) | 145.7 |
PAY VERSUS PERFORMANCE
| (1) These columns reflect the amounts reported in the “Summary Compensation Table” for Ms. Hurd, our current CEO, Mr. Hendrix, our former CEO, and the average for our non-CEO NEOs, for each of the years listed. The non-CEO NEOs for whom the average compensation is presented in this table are Messrs. Foshee, Hausmann, Poppens and Stansfield, for each of the years presented. |
PAY VERSUS PERFORMANCE
| (2) TSR is calculated based on an initial fixed investment of $100 on December 29, 2019 (the final trading day before our 2020 fiscal year), assuming reinvestment of dividends, through the end of the covered fiscal year presented. |
PAY VERSUS PERFORMANCE
| (3) The peer group used for the TSR calculation are the same companies comprising the “self-determined peer group” index used for compensation decision making (as described in the Compensation Discussion and Analysis in the proxy statement for each applicable fiscal year) and used to create the stock performance graph included in the Company’s Annual Report on Form 10-K for each applicable fiscal year. |
PAY VERSUS PERFORMANCE
| (4) Adjusted EBITDA is a non-GAAP financial measure. Please see Appendix A for a reconciliation of this non-GAAP measure to the most directly comparable GAAP measure. |
PAY VERSUS PERFORMANCE
Adjustments to the Summary Compensation Table Totals to arrive at CAP for our CEOs and Non-CEO NEOs are shown below.
PAY VERSUS PERFORMANCE
| | Calculation for Current CEO Hurd | | | | Calculation for Avg of Non-CEO NEOs | | | | | Calculation of “Compensation Actually Paid” | Year 2020 ($) | Year 2021 ($) | Year 2022 ($) | Year 2023 ($) | Year 2020 ($) | Year 2021 ($) | Year 2022 ($) | Year 2023 ($) | | Summary Compensation Table Total | N/A | N/A | 5,091,309 | 4,526,511 | 960,162 | 1,889,694 | 1,362,460 | 1,784,010 | | Less Stock Award Value Reported in Summary Compensation Table for the Covered Year | N/A | N/A | (3,543,485) | (2,614,777) | (506,147) | (934,024) | (550,168) | (914,060) | | Plus Fair Value for Awards Granted in the Covered Year | N/A | N/A | 2,963,877 | 2,931,519 | 190,654 | 1,113,482 | 444,128 | 1,083,559 | | Change in Fair Value of Awards from Prior Years that Vested in Covered Year | N/A | N/A | - | (134,309) | 8,739 | 2,040 | (20,731) | (18,153) | | Change in Fair Value of Outstanding Unvested Awards from Prior Years | N/A | N/A | - | 98,543 | (256,418) | 136,553 | (573,021) | 229,720 | | Less Fair Value of Awards Forfeited during the Covered Year | N/A | N/A | - | - | - | (18,837) | (17,485) | (20,860) | | Plus Fair Value of Incremental Dividends of Earnings Paid on Stock Awards | N/A | N/A | - | - | - | - | - | - | | Less Aggregate Change in Actuarial Present Value of Accumulated Benefit Under Pension Plans | N/A | N/A | - | - | (35,007) | - | - | (13,534) | | Plus Aggregate Service Cost and Prior Service Cost for Pension Plans | N/A | N/A | - | - | - | - | - | - | | “Compensation Actually Paid” | N/A | N/A | 4,511,701 | 4,807,487 | 361,982 | 2,188,909 | 645,183 | 2,130,682 |
PAY VERSUS PERFORMANCE
| | Calculation for Former CEO Hendrix | | | | | Calculation of “Compensation Actually Paid” | Year 2020 ($) | Year 2021 ($) | Year 2022 ($) | Year 2023 ($) | | Summary Compensation Table Total | 4,048,192 | 6,250,848 | 3,658,931 | N/A | | Less Stock Award Value Reported in Summary Compensation Table for the Covered Year | (999,996) | (2,150,267) | (991,768) | N/A | | Plus Fair Value for Awards Granted in the Covered Year | 628,740 | 2,656,714 | 738,217 | N/A | | Change in Fair Value of Awards from Prior Years that Vested in Covered Year | - | - | - | N/A | | Change in Fair Value of Outstanding Unvested Awards from Prior Years | - | 326,346 | (1,490,495) | N/A | | Less Fair Value of Awards Forfeited during the Covered Year | - | - | - | N/A | | Plus Fair Value of Incremental Dividends of Earnings Paid on Stock Awards | - | - | - | N/A | | Less Aggregate Change in Actuarial Present Value of Accumulated Benefit Under Pension Plans | (1,060,002) | - | - | N/A | | Plus Aggregate Service Cost and Prior Service Cost for Pension Plans | - | - | - | N/A | | “Compensation Actually Paid” | 2,616,934 | 7,083,641 | 1,914,885 | N/A |
2023 DIRECTOR COMPENSATION
2023 DIRECTOR COMPENSATION The following table provides information about the compensation paid to the Company’s directors in 2023.
2023 DIRECTOR COMPENSATION
| Name (a) | Fees Earned or Paid in Cash ($) (b)(1) | Stock Awards ($) (c)(2) | Option Awards ($) (d) | Non-Equity Incentive Plan Compensation ($) (e) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) (f) | All Other Compensation ($) (g)(3) | Total ($) (h) | | John P. Burke | 87,500 | 101,087 | - | - | - | 523 | 189,110 | | Dwight Gibson | 87,500 | 101,087 | - | - | - | 523 | 189,110 | | Daniel T. Hendrix(4) | 240,000 | - | - | - | 835,894 | 2,882 | 1,078,776 | | Christopher G. Kennedy | 115,000 | 101,087 | - | - | - | 523 | 216,610 | | Joseph Keough | 97,500 | 101,087 | - | - | - | 523 | 199,110 | | Catherine M. Kilbane | 105,000 | 101,087 | - | - | - | 523 | 206,610 | | K. David Kohler | 87,500 | 101,087 | - | - | - | 523 | 189,110 | | Catherine Marcus(5) | 5,495 | 52,357 | - | - | - | - | 57,852 | | Robert T. O’Brien | 100,000 | 101,087 | - | - | - | 523 | 201,610 |
2023 DIRECTOR COMPENSATION
| (1) For fiscal year 2023, the Company’s outside directors were paid an annual director’s fee of $80,000. Outside directors who served on the Audit Committee were paid an additional $10,000 and those who served on the Compensation Committee and the Nominating & Governance Committee were paid an additional $7,500, except that the Chairperson of the Audit Committee was paid an additional $20,000 (instead of $10,000) and the respective Chairpersons of the Compensation Committee and Nominating & Governance Committee were paid an additional $15,000 (instead of $7,500). In addition, the lead independent director of the Board was paid an incremental $20,000. Our Chairman was paid a fee of $240,000. Directors also were reimbursed for expenses in connection with attending Board and Committee meetings. |
2023 DIRECTOR COMPENSATION
| (2) The amounts reported in the “Stock Awards” column are computed based upon the aggregate grant date fair value of the respective awards. See the Note entitled “Shareholder’s Equity” to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, regarding assumptions underlying valuation of equity awards. The ultimate payout value may be significantly less than the amounts shown, and possibly zero, depending on the recipient’s tenure as a director. In 2023, each of the directors listed in the table received an award of 14,608 shares of restricted stock having a grant date fair value of $6.92 per share. As of December 31, 2023, each of these directors held 14,608 shares of restricted stock that had not vested, except for Ms. Marcus who held 4,799 unvested shares of restricted stock. No stock options were granted to directors in the past several years, and there were no stock options held by directors at the end of 2023. |
2023 DIRECTOR COMPENSATION
| (3) In 2023, the Company paid on all outstanding Common Stock of the Company (including restricted stock) dividends of $0.01 per share in each fiscal quarter. The amounts in this column reflect dividends on the restricted shares of each director (except for Mr. Hendrix; see note 4 below) paid in 2023. |
2023 DIRECTOR COMPENSATION
| (4) Mr. Hendrix is a former employee and CEO of the Company, and has a defined benefit Salary Continuation Agreement with the Company dating back to 1986. The amount reported in column (f) relates to Mr. Hendrix’s accumulated benefit thereunder. In 2023, the value increased due to a combination of $832,752 of cash payments under the Salary Continuation Agreement plus an increase of $3,142 in the present value of the accumulated benefits (primarily due to a decrease in the discount rate used for determining present value), for an aggregate increase of $835,894. The amount reported in column (g) for Mr. Hendrix reflects the incremental cost to the Company of all perquisites and other personal benefits, and is comprised of $608 for a Company provided cellular telephone, and $2,274 of dividends paid restricted stock. |
2023 DIRECTOR COMPENSATION
| (5) Ms. Marcus was elected to serve as a director effective December 7, 2023, and, accordingly, in 2023, she received a pro-rated portion of the annual director’s cash fee and a pro-rated award of restricted stock based on the portion of the 2023-2024 term that she was elected to serve. |