DEF 14A of Phibro Animal Health Corp
Filed Sep 15, 2023 · FY20230001558370-23-015820
PROPOSAL ONE — ELECTION OF CLASS I DIRECTORS
PROPOSAL ONE — ELECTION OF CLASS I DIRECTORS
General
General Our Board of Directors may establish the authorized number of directors from time to time by resolution. Our Board of Directors is currently comprised of eight members who are divided into three classes with staggered three-year terms. A director serves in office until his or her respective successor is duly elected and qualified or until his or her earlier death or resignation. Our amended and restated certificate of incorporation authorizes our Board of Directors to fill vacancies on our Board of Directors until the next annual meeting of stockholders at which the directors of the class in which such vacancy occurred will be elected. Any additional directorships resulting from an increase in the authorized number of directors would be distributed among the three classes so that, as nearly as possible, each class would consist of one-third of the authorized number of directors. Your proxy cannot be voted for a greater number of persons than the number of nominees named in this proxy statement.
Nominees
Nominees Three Class I Directors have been nominated for election for a three-year term expiring at our 2026 annual meeting. Our Board of Directors has approved and nominated Daniel M. Bendheim, Jonathan Bendheim and Sam Gejdenson for election as the three Class I Directors. The term of office of each person elected as a Class I Director will continue until such director’s term expires in 2026, or until such director’s successor has been duly elected and qualified.
Information Regarding the Nominees and other Directors
Information Regarding the Nominees and other Directors
Nominees for Class I Directors for a Term Expiring in 2026
Nominees for Class I Directors for a Term Expiring in 2026
Nominees for Class I Directors for a Term Expiring in 2026
| Name | Age | Principal Occupation and Business Experience | | Daniel M. Bendheim | 51 | Mr. Bendheim serves as a member of our Board of Directors and is our Executive Vice President, Corporate Strategy. Mr. Bendheim joined us in 1997. He was appointed Vice President of Business Development in 2001 and was later appointed President, Performance Products in 2004, and then Executive Vice President, Corporate Strategy in March 2014. He was elected as a director of Phibro in November 2013. Prior to joining us, Mr. Bendheim worked as an analyst at South Coast Capital, a boutique investment bank. Mr. Bendheim obtained a B.A. degree in political science with honors from Yeshiva University in 1993 and a J.D. degree with honors from Harvard Law School in 1996. Mr. Bendheim is a son of Jack C. Bendheim and, together with certain other family members, is a manager of BFI with respect to certain economic rights pertaining to shares of our stock owned by BFI. Mr. Bendheim is qualified to serve on our Board of Directors due to his extensive management experience in all facets of the animal health, mineral nutrition and performance products businesses during his tenure with the Company and his management role within BFI. | | Jonathan Bendheim | 47 | Mr. Bendheim serves as a member of our Board of Directors and is President of our MACIE Region (which consists of the Middle East, Africa, the Commonwealth of Independent States, India and Europe), is the general manager of our operating plants in Israel and Ireland, and oversees Phibro’s global aquaculture and pHi-Tech businesses. |
Nominees for Class I Directors for a Term Expiring in 2026
| | | Mr. Bendheim joined Phibro in 2001 as a Manager for logistics and supply chain. In 2005, Mr. Bendheim was appointed Vice President of Sales and Business Development for our Israel operations. In 2008, he led the acquisition of Abic Biological Laboratories from Teva, and in 2009, he was appointed the Managing Director of our operations in Israel. In 2011, his responsibilities were expanded to include oversight of all sales activities in the MACIE Region. Mr. Bendheim led the establishment of Phibro’s global aquaculture business in 2014 and founded Phibro’s pHi-Tech business unit in 2018. | | | | Mr. Bendheim holds a B.A. degree in political science from Yeshiva University and an MBA from Columbia Business School. Mr. Bendheim is a son of Jack C. Bendheim. Mr. Bendheim is qualified to serve on our Board of Directors due to his extensive management experience in all facets of Phibro’s animal health and nutrition businesses during his tenure with the Company. | | Sam Gejdenson | 75 | Mr. Gejdenson has been a director of Phibro since January 2004 and is a member of our Audit Committee and our Compensation Committee. Mr. Gejdenson is the Chairman of our Compensation Committee. Since 2001, Mr. Gejdenson has been involved in international trade through his own company, Sam Gejdenson International, where he has worked with various multi-national clients on projects in Europe, Asia and Africa. Mr. Gejdenson presently serves on the board of the National Democratic Institute and was formerly a Commissioner on the U.S. Commission for International Religious Freedom. From 1981 to 2001, Mr. Gejdenson served eastern Connecticut as a Congressman in the U.S. House of Representatives where he was the senior Democrat on the House International Relations Committee. In 1974, he was elected to the Connecticut House of Representatives, serving two terms. He received an A.S. degree from Mitchell College in New London, Connecticut in 1968 and a B.A. from the University of Connecticut in Storrs, Connecticut in 1970. Mr. Gejdenson is qualified to serve on our Board of Directors due to his understanding of our business from his service on our Board and his extensive knowledge of global business and governments around the world. |
Incumbent Class II Directors, Whose Terms Expire in 2024
Incumbent Class II Directors, Whose Terms Expire in 2024
Incumbent Class II Directors, Whose Terms Expire in 2024
| Name | Age | Principal Occupation and Business Experience | | Mary Lou Malanoski | 66 | Ms. Malanoski has been a director since May 2004. Ms. Malanoski is the Chief Financial Officer of S2K Partners Co. LLC and was the Chief Financial Officer of its predecessor entities, S2K Financial Holdings LLC and S2K Partners Holdings LLC, beginning in April 2016. | | | | Ms. Malanoski serves on the board of directors and is a member of the audit committee and the nominating/ corporate governance committee of Getty Realty Corp., a real estate investment trust specializing in convenience stores, gasoline stations and related properties. In addition to her understanding of our business from her service on our Board of Directors, Ms. Malanoski brings to our Board substantial management, finance and investment banking experience. |
Incumbent Class II Directors, Whose Terms Expire in 2024
| | | Previously, Ms. Malanoski was an independent financial consultant from April 2015 until March 2016 and served as the acting Chief Financial Officer of Nina McLemore, LLC from June 2015 until December 2015. Ms. Malanoski served as Vice Chair and Chief Operating Officer at Morgan Joseph TriArtisan Group, Inc., an investment bank focused on mid-market companies, from March 2012 to March 2015. She joined Morgan Joseph TriArtisan Group, Inc. in July 2001 as a Managing Director and Chief Financial Officer, became Co-Head of Investment Banking in 2008, and served as Head of Investment Banking from March 2009 through March 2012. Ms. Malanoski also served on the board of directors of Morgan Joseph TriArtisan Group, Inc. from 2008 to 2021. From 1994 until 2001, Ms. Malanoski served as Managing Director and Chief Financial Officer of New Street Advisors LP, a private equity firm that she co-founded. Prior to 1994, Ms. Malanoski was a Managing Director at New Street Capital, the successor to the reorganized Drexel Burnham Lambert, where she began her career in the Corporate Finance Department. | | Carol A. Wrenn | 62 | Ms. Wrenn has been a director since July 2010. Ms. Wrenn also serves as a member of the Audit Committee and the Compensation Committee. She is currently the sole owner of Aurora Borealis LLC, which operates online retail businesses. She was the founder and owner of Whitewater Advisors LLC, which provided consulting services to small businesses from 2017 through 2020. She was also the founder and owner of Sky River Helicopters, LLC, a company that provided helicopter charters, tours, commercial services, and lessons, from January 2010 until September 2015. She previously served as an Executive Vice President and the President of the Animal Health Division at Alpharma Inc., a human and animal pharmaceutical company, from November 2001 to June 2009. From April 2007 to April 2009, Ms. Wrenn also held the position of Chairman of the Animal Health Institute, an industry organization advocating for animal health issues, including efficient and effective FDA, USDA and EPA regulatory and approval processes. | | | | From January 2002 to June 2009, she was an active member of the board of directors of the International Federation of Animal Health. Prior to joining Alpharma, Ms. Wrenn held various executive positions at Honeywell International Inc. (formerly AlliedSignal Inc.) from 1984 to 2001. She served as Business Director of Honeywell’s Refrigerants, Fluorine Products Division from 2000 to 2001 and was the Commercial Director and Managing Director of Honeywell’s European Fluorochemical operations based in Haasrode, Belgium from 1997 to 2000. Ms. Wrenn also held a number of positions in sales, marketing, business development and finance during her tenure with AlliedSignal. Ms. Wrenn served as a director of Heska Corporation from January 2013 until May 2019. She holds a Bachelor’s Degree from Union College, an MBA from Lehigh University, and a DBA from California Southern University. Ms. Wrenn is qualified to serve on our Board of Directors due to her relevant industry and business experience. |
Incumbent Class III Directors, Whose Terms Expire in 2025
Incumbent Class III Directors, Whose Terms Expire in 2025
Incumbent Class III Directors, Whose Terms Expire in 2025
| Name | Age | Principal Occupation and Business Experience | | Jack C. Bendheim | 76 | Mr. Bendheim is Chairman of our Board of Directors and serves as our President and Chief Executive Officer. Mr. Bendheim has served as our President since 1988 and he was also appointed Chief Executive Officer in March 2014. He has been a director since 1984. Mr. Bendheim also serves as a member of the Compensation Committee. Mr. Bendheim joined us in 1969 and served as Chief Executive Officer from 1998 to 2002, as Chief Operating Officer from 1988 to 1998, as Executive Vice President and Treasurer from 1983 to 1988 and as Vice President and Treasurer from 1975 to 1983. Until 2017, Mr. Bendheim served on the Board of Directors of Empire Resources, Inc. Mr. Bendheim is also a past Chairman of the Animal Health Institute, an industry organization advocating for animal health issues, including efficient and effective FDA, USDA and EPA regulatory and approval processes. Mr. Bendheim, together with certain other family members, is a manager of BFI Co., LLC (“BFI”), an investment vehicle of the Bendheim family, with respect to the economic rights pertaining to shares of our stock owned by BFI. Mr. Bendheim has sole authority to vote shares of our stock owned by BFI. Mr. Bendheim is the father of Daniel M. Bendheim and Jonathan Bendheim. Mr. Bendheim is qualified to serve on our Board of Directors due to his many years of experience in the animal health industry and with our Company and his control over a majority of the voting rights in our common stock. | | Alejandro Bernal | 50 | Mr. Bernal has been a director since February 2023. Mr. Bernal also serves as a member of the Compensation Committee. Mr. Bernal is the Chief Executive Officer of PetDx® – The Liquid Biopsy Company for Pets™, a company based in San Diego, CA, and focused on early detection of cancer using Next Generation Sequencing (NGS) technology. Prior to joining PetDx, Mr. Bernal was the President for Mars Veterinary Health International and Global Diagnostics, a global leader in pet food and veterinary health services, from March 2018 to December 2022. While at Mars, he was responsible for establishing and operating a network of over 600 veterinary hospitals outside North America and for Antech, a veterinary diagnostics company with over 70 reference labs in the US, Europe and Asia. Prior to Mars, Mr. Bernal worked 17 years for Zoetis (formerly Pfizer Animal Health) and was a member of the Executive Team for 10 years. Mr. Bernal holds a Doctorate in veterinary medicine from Universidad de Caldas (Colombia), a Master’s Degree in Physiology from Texas A&M University (USA), and an MBA from Universidad de los Andes (Colombia) and Manchester Business School (UK). Mr. Bernal is qualified to serve on our Board of Directors due to his extensive management and leadership experience in all facets of the animal health industry, including in corporate strategy and business development. |
Incumbent Class III Directors, Whose Terms Expire in 2025
| E. Thomas Corcoran | 76 | Mr. Corcoran has been a director since May 2008. Mr. Corcoran also serves as Chairman of the Audit Committee. Mr. Corcoran joined Fort Dodge Animal Health, a division of Wyeth, Inc., as its President in 1985. Wyeth was a research-based corporation with businesses focused on human health and animal health. Mr. Corcoran served on the Management, the Operations, the Legal, and the Human Resources and Benefits committees of Wyeth until his retirement in March 2008. From 2008 until 2010, Mr. Corcoran was a member of the Board of Directors of AHI, Inc., a veterinary distribution company. From 2010 until 2016, Mr. Corcoran was a director of Putney, Inc., a pet pharmaceutical company. Mr. Corcoran also served as the Chairman of the Animal Health Institute, an industry organization advocating for animal health issues, including efficient and effective FDA, USDA and EPA regulatory and approval processes. Since 2009, Mr. Corcoran has served on the Board of Trustees of the University of South Alabama, where he is Chairman of the Finance and Budget committee. | | | | Mr. Corcoran is a recipient of the Animal Pharm Lifetime Achievement Award, the Banfield Industry Leadership Award, the Lifetime Achievement Award from the American Veterinary Distributors Association and the Industry Leadership Award from the Kansas City Animal Health Corridor. Mr. Corcoran is a recipient of the Distinguished Alumni Award from the University of South Alabama. Mr. Corcoran is qualified to serve on our Board of Directors due to his extensive experience and executive leadership in the animal health industry. |
Considerations in Evaluating Director Nominees
Considerations in Evaluating Director Nominees All members of our Board of Directors are responsible for screening and recommending nominees for election as directors, including nominees recommended by stockholders of Phibro. When making recommendations regarding nominees to the Board, the Board of Directors will consider advice and recommendations from stockholders, management and others as they deem appropriate, and will also take into account the performance of incumbent directors in determining whether to recommend them to stand for re-election at the annual meeting of stockholders. Phibro seeks Board members who have skills, experience and backgrounds that are relevant to the key strategic and operational issues that they will oversee and approve. Director candidates are typically selected based on their integrity and character, sound, independent judgment, track record of accomplishment in leadership roles, as well as their professional and corporate expertise, skills and experience. Some of the factors that the Board of Directors will take into consideration when evaluating director candidates include: (i) the independence, judgment, strength of character, reputation in the business community, ethics and integrity of the individual; (ii) the business or other relevant experience, skills and knowledge that the individual may have that will enable him or her to provide effective oversight of Phibro’s business; (iii) the fit of the individual’s skill set and personality with those of the other Board members so as to build a Board that works together effectively and constructively; and (iv) the individual’s ability to devote sufficient time to carry out his or her responsibilities as a director in light of his or her occupation and the number of boards of directors of other public companies on which he or she serves. While the Board of Directors does not have a formal diversity policy related to the evaluation of nominees to the Board, diversity is a factor considered when identifying prospective nominees.
2023 Director Compensation
2023 Director Compensation The following table sets forth information regarding the amounts earned by or paid to our non-employee directors for their service as a director for the fiscal year ended June 30, 2023:
2023 Director Compensation
| | Fees earned | | | | or paid | | | Name | in cash | Total | | Alejandro Bernal | $22,500 | $22,500 | | Gerald K. Carlson | 40,000 | 40,000 | | E. Thomas Corcoran | 50,000 | 50,000 | | Sam Gejdenson | 60,000 | 60,000 | | Mary Lou Malanoski | 40,000 | 40,000 | | Carol A. Wrenn | 60,000 | 60,000 |
2023 Director Compensation
For the year ended June 30, 2023, Alejandro Bernal, Gerald K. Carlson, E. Thomas Corcoran, Sam Gejdenson, Mary Lou Malanoski and Carol A. Wrenn received compensation for their services on our Board of Directors. Mr. Bernal joined our Board of Directors on February 6, 2023. On May 1, 2023, Mr. Gerald K. Carlson resigned from his position as Director of the Company and Mr. Alejandro Bernal replaced Mr. Jack C. Bendheim as a member of the Compensation Committee. The non-employee members of the Board of Directors receive $40,000 annual cash compensation for their service as a director. The non-employee members of the Audit and Compensation Committees receive supplemental annual cash compensation of $10,000 for each committee on which they serve. We pay our directors on a quarterly basis. Directors have been and will continue to be reimbursed for travel, food, lodging and other expenses directly related to their activities as directors. Directors are also entitled to the protection provided by their indemnification agreements and the indemnification provisions in our amended and restated certificate of incorporation and amended and restated bylaws, as well as the protection provided by director and officer liability insurance provided by us. Other than as set forth above, no other compensation was paid to our non-employee directors for the year ended June 30, 2023. Messrs. Jack C. Bendheim, Daniel M. Bendheim and Jonathan Bendheim serve on our Board of Directors and as President and Chief Executive Officer, Executive Vice President, Corporate Strategy, and President, MACIE Region & General Manager, Israel Operations, respectively. None of Jack C. Bendheim, Daniel M. Bendheim or Jonathan Bendheim received any additional compensation for their service on our Board of Directors. As named executive officers, both Jack C. Bendheim’s and Daniel M. Bendheim’s compensation is fully reflected in the 2023 Summary Compensation Table below.
Oversight Responsibilities for Executive Compensation
| Compensation Committee | ● Establishes executive compensation philosophy ● Approves incentive compensation programs and performance goals for the annual management incentive plan (“MIP”) ● Approves all compensation actions for the NEOs ● Independent committee members approve all compensation actions for the CEO outside of the CEO’s presence | | CEO and Management | ● Management, including the CEO, develops preliminary recommendations regarding compensation matters with respect to all NEOs, other than the CEO, and provides these recommendations to the Compensation Committee, which makes the final decisions | | | ● Administer compensation programs once Compensation Committee decisions are finalized ● CEO is not involved in any decision as to his own compensation |
Use of Market Data
Use of Market Data To obtain a broad view of competitive practices among industry peers and competitors for executive talent, management presents to the Compensation Committee data derived from the following national compensation surveys: Willis Towers Watson Compensation Survey, Mercer Life Sciences Survey and Mercer Executive Compensation Survey. The Compensation Committee does not review the specific companies included in these surveys and the data presented to the Compensation Committee is general and not specific to any particular subset of companies. The survey data is used as a reference point to assess the competitiveness of base salary, incentive targets, and total direct compensation awarded to the NEOs and as information on overall market practices. The Company’s philosophy is to provide base salary and variable cash compensation that is competitive with the median of the survey data, with appropriate adjustments above or below the median based on factors such as experience, time in role, individual contribution and accomplishments and market conditions.
Management Incentive Plan (MIP)
Management Incentive Plan (MIP) Our annual MIP is a cash-based program that rewards employees for achieving critical business and financial goals that are key indicators of ongoing operational performance that will drive stockholder value creation. Goals are established at the beginning of each fiscal year and are reviewed and approved by the Compensation Committee. Where minimum threshold performance targets are satisfied, annual incentive payments can range from 50% to 150% of the target award opportunity, based on performance relative to goals as determined by the Compensation Committee. The Compensation Committee reviews our target annual bonus opportunities each year to ensure they are competitive. The target annual incentive opportunity as a percent of annual base salary for each of our NEOs in our fiscal year ended June 30, 2023, was as follows:
Management Incentive Plan (MIP)
| | Fiscal year ended | | | | June 30, 2023 | | | | Target Annual | Fiscal year ended | | | Incentive as | June 30, 2023 | | | Percent of | Target Annual | | | Base Salary | Incentive | | | (%) | ($) | | Jack C. Bendheim | 50% | $1,135,000 | | Damian Finio | 50% | $240,435 | | Larry L. Miller | 50% | $330,198 | | Rob Aukerman | 40% | $193,931 | | Daniel M. Bendheim | 50% | $229,749 |
Management Incentive Plan (MIP)
In conjunction with management, the Compensation Committee undertakes a review and analysis to establish annual performance goals under the MIP. The performance levels are intended to be aggressive but realistic, such that achieving threshold levels would represent minimum acceptable performance and achieving maximum levels would represent outstanding performance. The target performance goals align with our annual Company performance goals and may be modified by Compensation Committee assessment of individual performance. For our fiscal year ended June 30, 2023, the following were the goals and payout levels under the MIP applicable to Messrs. Jack C. Bendheim, Finio, Miller and Daniel M. Bendheim:
Management Incentive Plan (MIP)
| | | | Payout Range | | Metric | Weighting | Rationale for Metric | (% of Target) | | Sales | 25% | Sales are reflective of top line performance and are a key metric for our investors. | 50% – 150% | | Adjusted EBITDA | 75% | Earnings before Interest, Taxes, Depreciation and Amortization, adjusted for certain items including restructuring and acquisition related items, stock-based compensation costs and other unusual or non-operational items (Adjusted EBITDA) is reflective of our operating performance and is a key metric for our investors. | 50% – 150% |
Management Incentive Plan (MIP)
For our fiscal year ended June 30, 2023, the following were the goals and payout levels under the MIP applicable to Mr. Aukerman:
Management Incentive Plan (MIP)
| | | | Payout Range | | Metric | Weighting | Rationale for Metric | (% of Target) | | Global Index | 30% | This metric is the weighted average of certain sales and Adjusted EBITDA of our global animal health business. This figure is useful because it is reflective of the top line and operating performance of this key business which is an important contributor to our overall performance. | 50% – 150% | | North America Index | 50% | This metric is the weighted average of sales and profitability generated by the North America business for which Mr. Aukerman has management responsibility. The sales and profitability measurements are based on regional sales, with profitability determined by deducting certain costs and operating expenses. Together, these figures are reflective of the overall financial performance of Mr. Aukerman’s area of responsibility. | 50% – 150% | | Personal Goals | 20% | This metric is based upon key management goals that are agreed between Mr. Aukerman and Mr. Miller, his supervisor, at the start of the fiscal year and represent accomplishment or progress toward important strategic initiatives which will help ensure the future success of the Company’s business. For our fiscal year ended June 30, 2023, Mr. Aukerman’s personal goals related to new product launches and organizational development initiatives. | 50% – 150% |
Management Incentive Plan (MIP)
The annual cash incentive awards awarded to our NEOs for the fiscal year ended June 30, 2023 were as follows.
Management Incentive Plan (MIP)
| | Target | Earned | | | | Annual | Annual | | | | Incentive | Cash | | | | Opportunity | Incentive | % of Target | | Jack C. Bendheim | $1,135,000 | $221,325 | 19.5% | | Damian Finio | $240,435 | $46,885 | 19.5% | | Larry L. Miller | $330,198 | $64,389 | 19.5% | | Rob Aukerman | $193,931 | $88,930 | 45.9% | | Daniel M. Bendheim | $229,749 | $44,801 | 19.5% |
Management Incentive Plan (MIP)
The annual cash incentive awards paid are based on what is earned by each individual under the MIP and adjusted for any discretionary awards. For the fiscal year ended June 30, 2023, in addition to his earned incentive award, Mr. Aukerman’s payout also included a discretionary cash incentive award of $38,780 in light of the performance of certain business units within North America. Mr. Jack C. Bendheim elected to forgo his earned incentive award of $221,325, or 19.5% of his target annual incentive opportunity, for the fiscal year ended June 30, 2023.
Equity Incentive Program
Equity Incentive Program We believe that annual base salary, together with a wholly performance-based annual cash incentive opportunity, accomplishes our primary goal of attracting and retaining key talent. The Board is attentive to share usage and shareholder dilution and, at this time, we do not offer equity incentives as a regular component of the annual compensation program. Rather, we have used equity incentive awards in a limited but strategic manner to recruit, recognize and/or retain executives under specific circumstances. In addition, we believe our CEO’s current interest in BFI (as disclosed in the beneficial ownership table) is sufficient to support our objective of aligning executive and stockholder interests. No options or other equity awards were granted to any NEOs during the fiscal year ended June 30, 2023. On July 5, 2023, the Compensation Committee of the Board of Directors approved the grant of 300,000 restricted stock units (“RSUs”) as a retention award to Mr. Miller pursuant to the Company’s 2008 Incentive Plan and the RSU award agreement (the “Award Agreement”). All of the RSUs granted to Mr. Miller are subject to share price performance-based vesting over a four-year period as further detailed in the Company’s Current Report on Form 8-K filed with the SEC on July 6, 2023.
Employment Agreements
Employment Agreements We have entered into employment agreements with Messrs. Jack C. Bendheim, Finio, Miller and Aukerman that provide that employment is at-will and describe the terms of their employment, including base salary and performance bonus opportunity and equity grants, as well as limited severance benefits. In addition, all of the NEOs are bound by customary intellectual property provisions, noncompete and nonsolicitation provisions, all of which generally apply during employment and thereafter (with the noncompete and nonsolicitation provisions applying during employment and the one-year period thereafter). For a description of the employment agreements, see “Executive Compensation — Individual Arrangements — Employment Agreements.”
2023 Summary Compensation Table
2023 Summary Compensation Table The following table sets forth the total compensation that was paid to or accrued for the NEOs for the fiscal years ended June 30, 2023, 2022 and 2021. The NEOs for the fiscal year ended June 30, 2023 are (i) our Chairman of the Board, President and Chief Executive Officer, (ii) our Chief Financial Officer, (iii) our Chief Operating Officer, (iv) our President, North America Region and (v) our Executive Vice President, Corporate Strategy.
2023 Summary Compensation Table
| | | | | | Change in | | | | | | | | | Pension | | | | | | | | | Value and | | | | | | | | | Nonqualified | | | | | | | | Non-Equity | Deferred | | | | | | | | Incentive Plan | Compensation | All Other | | | | Fiscal | Salary | Bonus | Compensation | Earnings | Compensation | Total | | Name and Principal Position | Year | ($) | ($)(2) | ($)(3)(8) | ($)(4) | ($)(5) | ($) | | Jack C. Bendheim, Chairman of the Board, President, and Chief Executive Officer(1) | 2023 | $2,270,000 | $— | $221,325 | $43,711 | $403,863 | $2,938,899 | | | 2022 | $2,185,000 | $— | $1,055,000 | $44,670 | $324,829 | $3,609,499 | | | 2021 | $2,125,000 | $— | $1,358,547 | $312,847 | $204,925 | $4,001,319 | | Damian Finio, Chief Financial Officer(6) | 2023 | $480,870 | $— | $46,885 | $— | $39,706 | $567,461 | | | 2022 | $462,375 | $— | $227,000 | $— | $30,006 | $719,381 | | | 2021 | $308,654 | $150,000 | $197,788 | $— | $25,470 | $681,912 | | Larry L. Miller, Chief Operating Officer | 2023 | $660,395 | $— | $64,389 | $3,889 | $50,130 | $778,803 | | | 2022 | $634,995 | $— | $320,000 | $— | $43,826 | $998,821 | | | 2021 | $618,000 | $— | $395,097 | $18,713 | $42,364 | $1,074,174 | | Rob Aukerman, President, North America Region | 2023 | $484,828 | $38,780 | $50,150 | $— | $45,514 | $619,272 | | | 2022 | $463,950 | $105,000 | $194,950 | $— | $43,540 | $807,440 | | | 2021 | $450,000 | $— | $214,800 | $— | $37,717 | $702,517 | | Daniel M. Bendheim, Director and Executive Vice President, Corporate Strategy(7) | 2023 | $459,498 | $— | $44,801 | $6,514 | $43,877 | $554,690 | | | 2022 | $441,825 | $— | $217,000 | $— | $30,916 | $689,741 | | | 2021 | $430,000 | $— | $274,906 | $22,895 | $30,723 | $758,524 |
2023 Summary Compensation Table
| (1) Mr. Jack C. Bendheim also serves on the Board of Directors. He received no additional compensation for such service during the fiscal years ended June 30, 2023, 2022, and 2021. |
2023 Summary Compensation Table
| (2) Mr. Aukerman received a discretionary cash incentive award in the amount of $38,780 in light of the performance of certain business units within North America for the fiscal year ended June 30, 2023. |
2023 Summary Compensation Table
| (3) The amounts set forth in the Non-Equity Incentive Plan Compensation column for the fiscal years ended June 30, 2023, 2022 and 2021 represent cash incentives paid to or earned by each NEO in the respective fiscal year under the MIP. See “Fiscal Year 2023 Named Executive Officer Compensation—Management Incentive Plan (“MIP”)” for additional information. |
2023 Summary Compensation Table
| (4) In the case of Jack C. Bendheim, Change in Pension Value and Nonqualified Deferred Compensation Earnings for the fiscal year ended June 30, 2023, includes the aggregate change in (i) the actuarial present value of accrued pension benefits of $0 since the change in present value was $(66,651), (ii) the actuarial present value of benefits under the Retirement Income Plan of $43,711, and (iii) the actuarial present value of benefits under the Executive Income Program of $0 since the change in present value was $(149,469). The only other NEOs that participate in the Pension Plan are Messrs. Miller and Daniel M. Bendheim. For Messrs. Miller and Daniel M. Bendheim, the Change in Pension Value and Nonqualified Deferred Compensation Earnings for the fiscal year ended June 30, 2023, includes only the aggregate change in the actuarial present value of accrued pension benefits, which was $3,889 and $6,514, respectively. See “— Pension and Other Retirement Plans.” |
2023 Summary Compensation Table
| (5) All Other Compensation includes the value of the Company’s contributions to the 401(k) Plan (discussed below), automobile allowance and group term life insurance for our NEOs, as well as the payment of premiums under the Split Dollar Agreement, and financial, tax planning and legal services provided to Jack C. Bendheim and certain members of his family. Pursuant to the terms of Jack C. Bendheim’s employment agreement, for fiscal year 2022, the Company was required to make payments up to an aggregate maximum cost of $450,000 per annum for legal, audit and tax services for Jack C. Bendheim and his family and payments for members of his family for non-full-time employment and consulting arrangements and medical and other insurance coverage. Following the fiscal year ended June 30, 2022, on September 15, 2022, the Company increased the permitted aggregate maximum cost to $550,000 per annum. See “All Other Compensation” below for further details on these amounts. |
2023 Summary Compensation Table
| (6) Mr. Finio has resigned from his position as Chief Financial Officer of the Company, effective September 29, 2023. |
2023 Summary Compensation Table
| (7) Mr. Daniel M. Bendheim also serves on the Board of Directors. He received no additional compensation for such service during the fiscal years ended June 30, 2023, 2022 and 2021. |
2023 Summary Compensation Table
| (8) Mr. Jack C. Bendheim elected to forgo his earned incentive award under the MIP for the fiscal year ended June 30, 2023. |
Narrative Disclosure to Summary Compensation Table
Narrative Disclosure to Summary Compensation Table Our 2008 Incentive Plan (the “Equity Incentive Plan”) provides an opportunity to our directors, officers, employees and consultants to purchase shares of Class A common stock pursuant to options that may be granted, and receive grants of restricted shares and other share-based awards granted, from time to time, by the Board of Directors or a committee approved by the Board. Stock options are designed to motivate executives to make decisions that focus on long-term stockholder value creation. No options or other equity awards were granted during the fiscal year ended June 30, 2023. On July 5, 2023, the Compensation Committee of the Board of Directors approved (i) the grant of 300,000 RSUs to Mr. Larry Miller, the Company’s Chief Operating Officer, pursuant to the Equity Incentive Plan and Award Agreement, and (ii) a retention cash award equal to $4.25 million, pursuant to the terms of an executive long-term incentive agreement (the “LTIP Agreement”), to be paid in four substantially equal installments, subject to Mr. Miller’s continued employment on each of the first four anniversaries beginning on June 30, 2024.
Grants of Plan-Based Awards in Fiscal Year 2023
Grants of Plan-Based Awards in Fiscal Year 2023 The following table provides information concerning each award made in fiscal year 2023 to the NEOs under any plan. We did not grant any plan-based equity or stock awards to our NEOs during our fiscal year ended June 30, 2023.
Grants of Plan-Based Awards in Fiscal Year 2023
| | Estimated Future Payouts Under | | | | | Non-Equity Incentive Plans(1) | | | | | Threshold | Target | Maximum | | Name | ($) | ($) | ($) | | Jack C. Bendheim | $567,500 | $1,135,000 | $1,702,500 | | Damian Finio | $120,218 | $240,435 | $360,653 | | Larry L. Miller | $165,099 | $330,198 | $495,297 | | Rob Aukerman | $96,966 | $193,931 | $290,897 | | Daniel M. Bendheim | $114,875 | $229,749 | $344,624 |
Grants of Plan-Based Awards in Fiscal Year 2023
| (1) These amounts represent threshold, target and maximum annual cash award opportunities for our 2023 fiscal year under the Management Incentive Plan (MIP). The amount actually paid to or earned by each NEO under the MIP is included as Non-Equity Incentive Plan Compensation in the Summary Compensation Table. For further discussion of these awards, see “Fiscal Year 2023 Named Executive Officer Compensation — Management Incentive Plan (MIP).” |
Outstanding Equity Awards at 2023 Fiscal Year-End
Outstanding Equity Awards at 2023 Fiscal Year-End As of June 30, 2023, there were no outstanding equity awards held by our NEOs.
2023 Option Exercises and Stock Vested
2023 Option Exercises and Stock Vested During the 2023 fiscal year, there were no option exercises or shares of stock vested by our named executive officers.
2023 Pension Benefits
2023 Pension Benefits
2023 Pension Benefits
| | | | Present Value of | Payments | | | | Number of Years | Accumulated | During Last | | | | Credited Service | Benefit | Fiscal Year | | Name | Plan Name | (#)(1) | ($)(2) | ($) | | Jack C. Bendheim | Pension Plan | 25.1 | $1,360,936 | $— | | | Retirement Income Plan | 29.3 | $1,912,883 | $— | | | Executive Income Program | 33.4 | $236,030 | $— | | Damian Finio | Pension Plan | N/A | $— | $— | | | Retirement Income Plan | N/A | $— | $— | | | Executive Income Program | N/A | $— | $— | | Larry L. Miller | Pension Plan | 8.3 | $280,176 | $— | | | Retirement Income Plan | N/A | $— | $— | | | Executive Income Program | N/A | $— | $— | | Rob Aukerman | Pension Plan | N/A | $— | $— | | | Retirement Income Plan | N/A | $— | $— | | | Executive Income Program | N/A | $— | $— | | Daniel M. Bendheim | Pension Plan | 19.0 | $424,902 | $— | | | Retirement Income Plan | N/A | $— | $— | | | Executive Income Program | N/A | $— | $— |
2023 Pension Benefits
| (1) With respect to the Pension Plan, Years of Service ceased to be recognized for purposes of determining benefit accrual amounts when the Pension Plan was frozen on September 30, 2016. |
2023 Pension Benefits
| (2) The valuation method and all relevant material assumptions used in calculating the present value of accumulated benefits are set forth in the Notes to the Consolidated Financial Statements for our fiscal year ended June 30, 2023 which are filed with our Annual Report on Form 10-K filed on August 30, 2023. See Note 11 — Employee Benefits — Domestic Pension Plan. |
2023 Pension Benefits
Pension Plan We maintain for the benefit of our United States employees employed on or prior to December 31, 2013, a defined benefit pension plan qualified under Section 401(a) of the Code (the “Pension Plan”). In July 2016, we amended the Pension Plan to eliminate credit for future service and compensation increases, effective as of September 30, 2016. The Pension Plan provides benefits equal to the sum of (a) 1.0% of an employee’s “average salary” plus 0.5% of the employee’s “average salary” in excess of the average of the employee’s social security taxable wage base, times years of service after July 1, 1989 until September 30, 2016, plus (b) the employee’s frozen accrued benefit, if any, as of June 30, 1989 calculated under the Pension Plan formula in effect at that time. For purposes of calculating the portion of the benefit based on “average salary” in excess of the average wage base, years of service shall not exceed 35. “Average salary” for these purposes means the employee’s salary over the consecutive five-year period in the ten years preceding September 30, 2016 that produces the highest average. An employee becomes vested in his or her plan benefit once the employee completes five years of service with us. In general, benefits are payable after retirement or disability in the form of a 50%, 75% or 100% joint and survivor annuity, life annuity or life annuity with a five or ten year term certain. Benefits are also payable in the case of a qualifying early retirement (i.e., 55 years old and 10 years of service), with such benefits reduced based on the employee’s distance from normal retirement age (i.e., 65 years old). In some cases, benefits may also be payable under the Pension Plan in the event of an employee’s death. Messrs. Jack C. Bendheim, Miller and Daniel M. Bendheim participate in the Pension Plan. Messrs. Jack C. Bendheim and Miller are currently retirement eligible. Mr. Daniel M. Bendheim does not currently qualify for early retirement or retirement. Retirement Income Plan In 1994, we adopted a non-qualified supplemental executive retirement plan as an incentive for certain executives (the “Retirement Income Plan”). The plan provides for (i) a Retirement Income Benefit, (ii) a Survivor’s Income Benefit, and (iii) a Deferred Compensation Benefit (each, as defined therein and described below). A grantor trust has been established to provide the benefits under such plan. Mr. Jack C. Bendheim is the only NEO that participates in the Retirement Income Plan. The Retirement Income Benefit is determined based upon the participant’s salary, years of service and age at retirement. At present, it is contemplated that a benefit of 1% of Mr. Jack C. Bendheim’s eligible compensation will be accrued each year. The benefit is payable upon Mr. Jack C. Bendheim’s retirement (after age 65 with at least 10 years of service) in monthly installments over a 15-year period to Mr. Jack C. Bendheim or, in the event of his death, to his named beneficiary. The Survivor’s Income Benefit is payable to the beneficiary of a participant who dies before having retired from the Company. For the Retirement Income Plan’s current participants, including Mr. Jack C. Bendheim, such benefit is equal to each participant’s annualized compensation at the time of death, capped at $1,500,000. At Mr. Jack C. Bendheim’s election, such benefit will be payable in 12 equal monthly installments. Pursuant to the Deferred Compensation Benefit, a participant may elect each year to defer at least $3,000 but not more than $20,000 of his or her base salary in excess of $150,000. The deferred amount will earn interest at a rate that increases after five and ten years of participation in the Retirement Income Plan. Under certain circumstances, the Company matches the first $3,000 of the deferred amount. Participants may elect whether to have their deferred compensation account balances payable in a lump-sum or in monthly installments for any period between two to 15 years upon a termination of service, with the timing of such elections designed to comply with Section 409A of the Code. Such account balances become immediately payable upon a participant’s death. As of June 30, 2023, Mr. Jack C. Bendheim has (i) an annual Retirement Income Benefit of $193,167 payable over a 15-year period, (ii) a Survivor’s Income Benefit of $1,500,000 payable in 12 equal monthly installments and (iii) a Deferred Compensation Benefit of $1,338,550. Executive Income Program In 1990, we entered into an Executive Income Program to provide a pre-retirement death benefit and a retirement benefit to certain executives. Mr. Jack C. Bendheim is the only NEO who participates in the Executive Income Program, which provides that, upon the executive’s retirement, at or after attaining age 65, we will make retirement payments to the executive during the executive’s life for 10 years or until the executive or the executive’s beneficiaries have received a total of 120 monthly payments. Participants have no claim against us other than as unsecured creditors. We intend to fund the payments using the cash value or the death benefit from the life insurance policies insuring the executive’s life. Mr. Jack C. Bendheim currently participates in this plan and his annual retirement benefit is $30,000. Each policy also contains additional paid-up insurance and extended term insurance. On the death of the executive prior to the executive’s actual retirement date: (i) the first $1,000,000 of the death benefit is payable to the executive’s spouse or issue; (ii) the excess is payable to us up to the aggregate amount of premiums paid by us; and (iii) any balance is payable to the executive’s spouse or issue.
2023 Nonqualified Deferred Compensation
2023 Nonqualified Deferred Compensation The following table shows the executive contributions, company contributions, earnings, withdrawals and distributions and account balances for the Company’s unfunded, unsecured deferred compensation plan, which is a component of the Retirement Income Plan.
2023 Nonqualified Deferred Compensation
| | Executive | Registrant | Aggregate | Aggregate | Aggregate | | | Contributions | Contributions | Earnings | Withdrawals/ | Balance | | | in Last FY | in Last FY | in Last FY | Distributions | at Last FYE | | Name | ($) | ($) | ($) | ($) | ($)(1) | | Jack C. Bendheim | $— | $— | $79,834(1) | $— | $1,338,550(2) | | Damian Finio | $— | $— | $— | $— | $— | | Larry L. Miller | $— | $— | $— | $— | $— | | Rob Aukerman | $— | $— | $— | $— | $— | | Daniel M. Bendheim | $— | $— | $— | $— | $— |
2023 Nonqualified Deferred Compensation
| (1) Represents the value of aggregate interest accrued on Mr. Jack C. Bendheim’s deferred compensation account for the fiscal year ended June 30, 2023. |
2023 Nonqualified Deferred Compensation
| (2) Represents the total value of Mr. Jack C. Bendheim’s deferred compensation account balance as of the end of the Company’s fiscal year ended June 30, 2023. |
2023 Nonqualified Deferred Compensation
Mr. Jack C. Bendheim did not make any contributions to his deferred compensation account during the Company’s fiscal year ended June 30, 2023, and the Company does not provide for above-market or preferential earnings on deferred compensation under the Retirement Income Plan. Mr. Jack C. Bendheim made his last contribution to his deferred compensation account prior to the date that the Company became subject to the reporting requirements set forth under Item 402 of SEC Regulation S-K.
Employment Agreements
Employment Agreements We entered into an employment agreement with Mr. Jack C. Bendheim on March 12, 2008, which was amended and restated on March 27, 2014, whereby Mr. Jack C. Bendheim will serve as Chairman of the Board of Directors, President and, Chief Executive Officer of Phibro. Pursuant to Mr. Jack C. Bendheim’s employment agreement, his base salary is subject to periodic review and adjustment by Phibro and was set at $2,270,000 for our 2023 fiscal year. Pursuant to Mr. Jack C. Bendheim’s employment agreement, if performance goals pre-established by the Compensation Committee are satisfied, he has a target bonus opportunity of 50% of his base salary. The range of the bonus may be from 50% to 150% of the target bonus, which equates to 25% to 75% of Mr. Jack C. Bendheim’s base salary, based on performance relative to goals as determined by our Compensation Committee. There is zero payout if minimum thresholds are not met. Mr. Jack C. Bendheim receives a bonus of 50% of his base salary if the targets are 100% satisfied. Mr. Jack C. Bendheim’s salary and bonus are subject to adjustment with the approval of the Compensation Committee of the Board of Directors. Such employment is “at will,” subject to termination by either party, provided that Phibro shall provide 180 days’ written notice prior to terminating Mr. Jack C. Bendheim without “cause” (as defined below). Upon request, Mr. Jack C. Bendheim will be entitled to Phibro’s subscription rights for tickets to a New York sports team. Pursuant to the terms of Mr. Jack C. Bendheim’s employment agreement, he is entitled to the use of two cars at the Company’s expense and the ability to lease additional cars under the Company’s fleet program. For fiscal year 2023, we made payments for his family’s legal, audit and tax services, and payments for members of his family for non-full-time employment and consulting arrangements and medical and other insurance coverage up to an aggregate maximum cost of $550,000. If Mr. Jack C. Bendheim’s employment terminates due to death or disability, his estate shall be entitled to receive the Accrued Benefits (defined as earned but unpaid base salary, reimbursements of previously incurred business expenses and any other payments, benefits, or fringe benefits provided for under applicable compensation arrangements or benefit, equity or fringe benefit plans or programs) and six months of continued base salary payments. Upon a termination due to disability, he shall also be entitled to receive continued health care coverage for one year. Upon a termination without “cause” or voluntarily by Mr. Jack C. Bendheim, he shall be entitled to receive (i) the Accrued Benefits and (ii) subject to his execution and non-revocation of a general release of claims and continued compliance with the restrictive covenants and cooperation clause set forth in his employment agreement, payment by the Company of premiums for continuation coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) for a period of 18 months, provided that Phibro will not provide such coverage to the extent that it would incur excise taxes under the non-discrimination provisions of Patient Protection and Affordable Care Act of 2010 (“PPACA”). “Cause” is defined as Mr. Jack C. Bendheim’s (i) willful or repeated failure to substantially perform his duties to Phibro (other than a failure resulting from complete or partial incapacity due to physical or mental illness or impairment), (ii) material and willful violation of a federal or state law or regulation applicable to the business of Phibro or that adversely affects the image of Phibro, (iii) commission of a willful act that constitutes gross misconduct and is injurious to Phibro, or (iv) willful breach of a material provision of the employment agreement. Mr. Jack C. Bendheim will be required to sign a customary release prior to receiving any benefits in addition to the Accrued Benefits. Mr. Jack C. Bendheim is also bound by customary confidentiality, noncompete, nonsolicitation, nondisparagement, intellectual property and cooperation provisions, which generally apply during employment and thereafter (with the noncompete and nonsolicitation provisions applying during employment and the one-year period thereafter). Mr. Jack C. Bendheim’s employment agreement also includes an arbitration clause for the settlement of all disputes arising therein. We entered into an employment agreement with Mr. Damian Finio in September 2020, whereby Mr. Finio will serve as our Chief Financial Officer. Pursuant to his employment agreement, for our 2023 fiscal year, Mr. Finio received a base salary of $480,870, which is subject to periodic review by Phibro, and a bonus opportunity with a target payout of 50% of his base salary and a maximum payout of 75% of his base salary. Pursuant to his employment agreement, Mr. Finio is entitled to a Company leased vehicle under the Company’s fleet program or a car allowance of $650 per month. Pursuant to the severance protection letter agreement with Mr. Finio, in the event of a termination without “cause” (defined substantially the same as in Jack C. Bendheim’s employment agreement) or his resignation with “good reason,” he would be entitled to receive a lump sum payment of 100% of his annual base salary in effect at the time of termination, plus a pro rata portion of his bonus. “Good Reason” is defined in Mr. Finio’s severance protection letter agreement as (i) a material adverse change in his duties, responsibilities or authority (including status, office, title, reporting relationships or working conditions), or (ii) a relocation of his principal place of employment more than 50 miles from Teaneck, New Jersey without his consent; provided that, in both cases, Mr. Finio must notify us within 30 days of either such occurrence and we shall have 30 days to cure such occurrence. Mr. Finio will be required to sign a customary release prior to receiving such severance payments. Mr. Finio is bound by customary confidentiality, noncompete, nonsolicitation and intellectual property provisions, which generally apply during employment and thereafter (with the noncompete and nonsolicitation provisions applying during employment and the one-year period thereafter).
Employment Agreements
We entered into an employment agreement with Mr. Larry L. Miller in May 2008, amended in December 2009 and December 2011, whereby Mr. Miller currently serves as our Chief Operating Officer. Pursuant to Mr. Miller’s employment agreement, for our 2023 fiscal year, he received a base salary of $660,395, which is subject to periodic review by Phibro, and a target bonus opportunity of 50% of his base salary. Pursuant to his employment agreement, Mr. Miller is entitled to a vehicle paid for by the Company or a car allowance of $650 per month. Mr. Miller’s employment agreement provides that in the event of a termination without “cause” (defined substantially the same as in Mr. Jack C. Bendheim’s employment agreement) or his resignation with “good reason,” he would be entitled to receive a lump sum payment of 100% of his annual base salary in effect at the time of termination, plus a pro rata portion of his bonus based on actual performance. “Good Reason” is defined in Mr. Miller’s employment agreement as (i) a material adverse change in his duties, responsibilities or authority (including status, office, title, reporting relationships or working conditions), or (ii) a relocation of his principal place of employment more than 50 miles from Teaneck, New Jersey without his consent; provided that, in both cases, Mr. Miller must notify us within 90 days of either such occurrence and we shall have 30 days to cure such occurrence. Mr. Miller will be required to sign a customary release prior to receiving such severance payments. Mr. Miller is bound by customary confidentiality, noncompete, nonsolicitation and intellectual property provisions, which generally apply during employment and thereafter (with the noncompete and nonsolicitation provisions applying during employment and the one-year period thereafter). We entered into an employment agreement with Mr. Rob Aukerman in May 2019, whereby Mr. Aukerman serves as our President, North America Region. Pursuant to Mr. Aukerman’s employment agreement, for our 2023 fiscal year, he received a base salary of $484,828, which is subject to periodic review by Phibro, and a bonus opportunity with a target payout of 40% of his base salary. Pursuant to his employment agreement, Mr. Aukerman receives a vehicle allowance of $650 per month. Mr. Aukerman is bound by customary confidentiality, noncompete, nonsolicitation and intellectual property provisions, which generally apply during employment and thereafter (with the noncompete and nonsolicitation provisions applying during employment and the one-year period thereafter). Mr. Daniel M. Bendheim does not have an employment agreement with the Company. Mr. Daniel M. Bendheim is bound by customary noncompete, nonsolicitation and intellectual property provisions, which generally apply during employment and thereafter (with the noncompete and nonsolicitation provisions applying during employment and the one-year period thereafter).
Potential Payments upon Termination or a Change in Control
Potential Payments upon Termination or a Change in Control The following table estimates the dollar value of the additional payments and benefits the NEOs would have been entitled to receive under the applicable plans and/or arrangements, assuming the triggering event occurred on June 30, 2023. Messrs. Aukerman and Daniel M. Bendheim would not receive any such additional payments and benefits. In the event Messrs. Jack C Bendheim, Miller or Finio experienced a termination due to retirement on June 30, 2023, each such NEO would receive the values set forth in “Present Value of Accumulated Benefit” in the 2023 Pension Benefits Table. In addition, Mr. Jack C Bendheim would receive the value set forth in “Aggregate Balance at Last FYE” in the 2023 Nonqualified Deferred Compensation Table. These amounts are in addition to what would otherwise be payable in the event the NEO retired or experienced another triggering event as discussed elsewhere herein. See “Executive Compensation — Narrative Disclosure to Summary Compensation Table — Pension and Other Retirement Plans.”
Potential Payments upon Termination or a Change in Control
| | | Good | Involuntary | | | | | | Reason | Termination | | | | | | Termination | Without | Death | Disability | | Name | Type of Payment | ($)(1) | Cause ($) | ($) | ($) | | Jack C. Bendheim | Cash Severance(2) | $— | $— | $1,135,000 | $1,135,000 | | | Healthcare Coverage(3) | $28,681 | $28,681 | $— | $19,120 | | | Total | $28,681 | $28,681 | $1,135,000 | $1,154,120 | | Damian Finio | Cash Severance(4) | $527,755 | $527,755 | $— | $— | | | Total | $527,755 | $527,755 | $— | $— | | Larry L. Miller | Cash Severance(5) | $724,784 | $724,784 | $— | $— | | | Total | $724,784 | $724,784 | $— | $— |
Potential Payments upon Termination or a Change in Control
| (1) Amounts reported in this column reflect voluntary resignation by Mr. Jack C. Bendheim. |
Potential Payments upon Termination or a Change in Control
| (2) Upon termination due to death or disability, Mr. Jack C. Bendheim is entitled to receive six months continued base salary. |
Potential Payments upon Termination or a Change in Control
| (3) Upon voluntary resignation or termination without cause, Mr. Jack C. Bendheim is entitled to receive COBRA continuation coverage for a period of 18 months. Upon termination due to disability, Mr. Jack C. Bendheim is entitled to continue to receive his health and life insurance benefits then in effect under the Company’s plans for a period of one year. |
Potential Payments upon Termination or a Change in Control
| (4) Upon a termination for good reason or without cause, Mr. Finio is entitled to receive one year of base salary and a pro-rated portion of his annual bonus for the year of termination subject to year-to-date results through the most recently completed calendar month. |
Potential Payments upon Termination or a Change in Control
| (5) Upon a termination for good reason or without cause, Mr. Miller is entitled to receive one year of base salary and a pro-rated portion of his annual bonus for the year of termination subject to year-to-date results through the most recently completed calendar month. |
CEO PAY RATIO
CEO PAY RATIO As required by Section 953(b) of the Dodd-Frank Act, the Company is providing the following disclosure about the relationship of the annual total compensation of our employees to the annual total compensation of Mr. Jack C. Bendheim, our Chairman, President and Chief Executive Officer during our fiscal year ended June 30, 2023. SEC rules for identifying the median employee and calculating the pay ratio allow companies to apply various methodologies and assumptions and, as a result, the pay ratio reported by us may not be comparable to the pay ratio reported by other companies. We identified the median employee as of June 30, 2023. For purposes of identifying the median employee, we determined that, as of the fiscal year ended June 30, 2023, our employee population consisted of approximately 1,920 employees. We considered annualized base salary for all full and part-time employees employed as of June 30, 2023. We selected base pay as it represents the principal form of compensation delivered to all of our employees. For our fiscal year ended June 30, 2023,
CEO PAY RATIO
| ● | We identified the median of all employees (other than our Chief Executive Officer); |
CEO PAY RATIO
| ● | The annual total compensation of the median employee was $53,457. |
CEO PAY RATIO
| ● | The annual total compensation of our Chief Executive Officer was $2,938,899; and |
CEO PAY RATIO
| ● | The estimated ratio of the annual total compensation of our Chief Executive Officer to the annual total compensation of the median employee was 55 to 1. |
CEO PAY RATIO
We believe this ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K.
Pay Versus Performance
Pay Versus Performance The following tables and related information provide additional compensation information regarding our NEOs for the fiscal years presented.
Pay Versus Performance
| | | | | | Value of initial | | | | | | | | | | $100 Investment | | | | | | | | Average | | Based on: | | | | | | | | Summary | Average | | | | Company - | | | Summary | | Compensation | Compensation | | Peer Group | | Selected | | | Compensation | Compensation | Table Total | Actually Paid | Total | Total | Net | Measure: | | | Table Total | Actually Paid | for Non-PEO | to Non-PEO | Shareholder | Shareholder | Income | Adjusted EBITDA | | Year | for PEO(1) | to PEO(1)(2)(6)(7) | NEOs(1) | NEOs(1)(2)(6) | Return(3) | Return(3) | (in thousands)(4) | (in thousands)(5) | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | | 2023 | $2,938,899 | $2,895,188 | $630,057 | $627,456 | $56 | $98 | $32,606 | $112,753 | | 2022 | $3,609,499 | $3,564,829 | $803,846 | $803,846 | $76 | $100 | $49,175 | $111,083 | | 2021 | $4,001,319 | $3,688,472 | $943,330 | $895,453 | $112 | $121 | $54,385 | $107,882 |
Pay Versus Performance
| (1) In all years shown, Mr. Jack C. Bendheim was our Principal Executive Officer (“PEO”). The other NEOs represent the following individuals: for fiscal years 2023 and 2022, Damian Finio, Larry Miller, Rob Aukerman and Daniel M. Bendheim; for fiscal year 2021, Richard Johnson (retired from his position as Chief Financial Officer in November 2020), Damian Finio (assumed the role of Chief Financial Officer in November 2020), Larry Miller, Thomas Dagger (retired from his position as Senior Vice President, General Counsel and Corporate Secretary in June 2023) and Daniel M. Bendheim. |
Pay Versus Performance
| (2) In calculating the ‘compensation actually paid’ amounts reflected in these columns, the adjustments made to the pension benefit values were computed in accordance with U.S. GAAP. |
Pay Versus Performance
| (3) Total shareholder return is calculated based on a fixed investment of one hundred dollars in our common stock and the S&P 500 Pharmaceuticals Index, as applicable, and assumes dividends, if any, were reinvested, measured from the market close on June 30, 2020 (the last trading day of fiscal year 2020) through and including the end of the fiscal year for each year reported in the table. |
Pay Versus Performance
| (4) Represents the amount of the net income reflected in the Company’s audited GAAP financial statements for each applicable fiscal year. |
Pay Versus Performance
| (5) We have selected Adjusted EBITDA as our most important financial measure (that is not otherwise required to be disclosed in the table) used to link ‘compensation actually paid’ to our NEOs to company performance for fiscal year 2023. |
Pay Versus Performance
| (6) The values in this column reflect each of the following adjustments made to the total compensation amounts reported in the Summary Compensation Table for the applicable fiscal year, computed in accordance with Item 402(v) of Regulation S-K: |
Pay Versus Performance
| i. | In fiscal year 2023, for the PEO, the following items were adjusted in calculating “Compensation Actually Paid”: subtracted $43,711 for the change in the actuarial present value of the benefit reported in the 2023 Summary Compensation Table. For the Non-PEO NEOs, the following items were adjusted in calculating the “Average Compensation Actually Paid”: subtracted an average of $2,601 for the change in the actuarial present value of the benefit reported in the 2023 Summary Compensation Table. |
Pay Versus Performance
| ii. | In fiscal year 2022, for the PEO, the following items were adjusted in calculating the “Compensation Actually Paid”: subtracted $44,670 for the change in the actuarial present value of the benefit reported in the 2023 Summary Compensation Table. For the Non-PEO NEOs, there were no adjustments. |
Pay Versus Performance
| iii. | In fiscal year 2021, for the PEO, the following items were adjusted in calculating the “Compensation Actually Paid”: subtracted $312,847 for the change in the actuarial present value of the benefit reported in the 2023 Summary Compensation Table. For the Non-PEO NEOs, the following items were adjusted in calculating the “Average Compensation Actually Paid”: subtracted an average of $47,877 for the change in the actuarial present value of the benefit reported in the 2023 Summary Compensation Table. |
Pay Versus Performance
| (7) Mr. Jack C. Bendheim elected to forgo his earned incentive award of $221,325 for the fiscal year ended June 30, 2023. |
Pay versus Performance Comparative Disclosure
Pay versus Performance Comparative Disclosure In accordance with Item 402(v)(5) of Regulation S-K, the Company is providing the following descriptions of the relationships between the information presented in the table above. Compensation Actually Paid and Company TSR As demonstrated by the following graph, the amount of ‘compensation actually paid’ to our PEO, and the average amount of ‘compensation actually paid’ to the non-PEO NEOs is generally aligned with the Company’s total shareholder return (“TSR”) over the three years presented in the table. While equity awards do not comprise a portion of ‘compensation actually paid’ to the PEO and to the non-PEO NEOs, non-equity incentive plan awards are awarded and paid in large part based on the financial performance of the Company. Compensation Actually Paid and Net Income As demonstrated by the following graph, the amount of ‘compensation actually paid’ to the PEO and the average amount of ‘compensation actually paid’ to the non-PEO NEOs is generally aligned with the Company’s net income over the three years presented in the table. While the Company does not use net income as a performance measure in its overall executive compensation program, the measure of net income is correlated with Net Sales, which the Company does use when setting goals for the Company’s short-term incentive compensation program. As described in more detail in the sections titled “Fiscal Year 2023 Named Executive Officer Compensation—Management Incentive Plan (“MIP”)” and “2023 Summary Compensation Table”, a substantial portion of the value of total compensation awarded to the NEOs is comprised of amounts determined under the Company’s non-equity incentive program. Compensation Actually Paid and Adjusted EBITDA As demonstrated by the following graph, the amount of ‘compensation actually paid’ to the PEO and the average amount of ‘compensation actually paid’ to the non-PEO NEOs is generally not aligned with the Company’s Adjusted EBITDA over the three years presented in the table. While Adjusted EBITDA has increased over the periods presented, the Company has also established various other financial objectives and targets, including with respect to Adjusted EBITDA targets, when setting goals for the Company’s short-term incentive compensation program that have affected the ‘compensation actually paid.’ As described above, Adjusted EBITDA is defined as Earnings before Interest, Taxes, Depreciation and Amortization, adjusted for certain items including restructuring and acquisition related items, stock-based compensation costs and other unusual or non- operational items and is reflective of our operating performance. While the Company uses numerous financial and non-financial performance measures for the purpose of evaluating performance for the Company’s compensation programs, the Company has determined that Adjusted EBITDA is the Company’s most important financial performance measure (that is not otherwise required to be disclosed in the table) used to link ‘compensation actually paid’ to the NEOs to company performance for fiscal year 2023. Company TSR and Peer Group TSR The graph below assumes an initial investment of $100 on June 30, 2020, in our common stock and the S&P 500 Pharmaceuticals Index, and assumes dividends, if any, were reinvested. As the graph shows, Phibro’s TSR is lower in all years reflected when compared to the TSR of the S&P 500 Pharmaceuticals Index. The companies in the S&P 500 Pharmaceuticals Index are not the same as those used for our compensation benchmarking. As demonstrated by the following graph, the Company’s TSR over the three years presented in the table was a decline of approximately 44%, while the Company’s peer group TSR was a decline of approximately 2% over the three years presented in the table. Pay versus Performance Tabular List The following table lists our most important performance measures used by us to link ‘compensation actually paid’ to our NEOs to company performance for fiscal year 2023. The performance measures included in this table are not ranked by relative importance.
Pay versus Performance Comparative Disclosure
| Net Sales | | Most Important Performance Measures | | Adjusted EBITDA | | Net Sales |
EQUITY COMPENSATION PLAN INFORMATION
EQUITY COMPENSATION PLAN INFORMATION The following table provides information as of June 30, 2023, with respect to the shares of our Class A common stock that may be issued under our existing equity compensation plans.
EQUITY COMPENSATION PLAN INFORMATION
| | Number of securities | | | | | to be issued upon | Weighted-average | Number of securities remaining | | | exercise | exercise price of | available for future issuance under | | | of outstanding options, | outstanding options, | equity compensation plans | | Plan Category | warrants and rights | warrants and rights | (excluding securities reflected in column (a)) | | Equity compensation plans approved by security holders | — | — | 5,081,620 | | Equity compensation plans not approved by security holders | — | — | — | | Total | — | — | 5,081,620 |