DEF 14A of Fuelcell Energy Inc
Filed Feb 16, 2024 · FY20230001558370-24-001309
JOSHUA DOLGER
| Fiscal Year 2023 Summary Compensation Table | 51 | | Fiscal Year 2023 Grants of Plan-Based Awards | 52 | | Outstanding Equity Awards at 2023 Fiscal Year-End Table | 53 | | Fiscal Year 2023 Option Exercises and Stock Vested Table | 54 | | Pay Versus Performance Disclosure | 60 | | Security Ownership of Certain Beneficial Owners and Management | 62 | | Delinquent Section 16(a) Reports | 64 | | Certain Relationships and Related Transactions | 65 | | Audit, Finance & Risk Committee Report | 66 | | Proposal 2 Ratification of Selection of KPMG LLP as the Company’s Independent Registered Public Accounting Firm for the Fiscal Year Ending October 31, 2024 | 68 | | Proposal 3 Amendment and Restatement of the Third Amended and Restated 2018 Omnibus Incentive Plan | 69 | | Proposal 4 Advisory Vote to Approve the Compensation of the Company’s Named Executive Officers | 80 | | Additional Information and Other Matters | 81 | | General | 81 | | Stockholder Proposals for the 2025 Annual Meeting | 81 | | Householding | 82 | | Quorum and Vote Required | 82 | | Counting Votes | 82 | | Voting By Proxy | 83 | | Annual Report and Form 10-K | 83 | | Other Matters | 83 | | Information About Attending the Annual Meeting | 83 | | Annex A — Non-GAAP Reconciliation | 85 | | Annex B — FuelCell Energy, Inc. Fourth Amended and Restated 2018 Omnibus Incentive Plan | 87 |
JOSHUA DOLGER
| ● | Continued our progress in re-entering the South Korean market with the execution of a long-term service agreement with Noeul Green Energy Co., Ltd. (“Noeul Green Energy”) pursuant to which we are responsible for servicing its 20 MW fuel cell park in South Korea, which is comprised of eight SureSource 3000 fuel cell platforms; |
Election of Directors
Election of Directors FuelCell’s Directors (“Directors”) are elected annually to serve one-year terms. The Board has nominated each of the seven Director nominees named below to serve until the 2025 Annual Meeting of Stockholders and until his or her successor is elected and qualified or until his or her earlier resignation or removal. All of the Director nominees are currently Directors of the Company. It is the intention of the persons named as proxies to vote, if authorized, for the election of the seven Director nominees named below as Directors. Each nominee has indicated his or her willingness to serve, if elected. Director Qualifications and Biographies The Environmental, Social, Governance and Nominating Committee regularly assesses the performance and attributes of each Director to ensure that the Board as a governing body encompasses a broad range of perspectives, experience, diversity, integrity and commitment, in order to effectively conduct the Company’s global business while representing the long-term interests of its stockholders. Pursuant to the recommendation of the Environmental, Social, Governance and Nominating Committee, the Board has nominated the following seven candidates for election as Directors and has concluded that each of these incumbent Directors should be nominated for election based on their extensive senior leadership backgrounds, competencies and other qualifications identified below:
Election of Directors
| Key Areas of Experience | | |
Election of Directors
Six of the seven Director nominees are considered “Independent Directors” as such term is defined in Nasdaq Rule 5605(a)(2). Further information about the Company’s corporate governance practices, the responsibilities and functions of the Board and its committees, Director compensation and related party transactions can be found in this Proxy Statement.
Election of Directors
| | THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE ELECTION OF EACH OF THE SEVEN NOMINEES LISTED BELOW AS DIRECTORS OF THE COMPANY TO SERVE UNTIL THE 2025 ANNUAL MEETING OF STOCKHOLDERS AND UNTIL THEIR SUCCESSORS ARE DULY ELECTED AND QUALIFIED. |
Election of Directors
| | 2024 Proxy Statement | 9 |
Election of Directors
Director Nominees
Election of Directors
| JAMES H. ENGLAND | | | | Age 77 Director since: 2008 INDEPENDENT Chairman of the Board of Directors since 2018 | BIOGRAPHY: Mr. England is a Corporate Director and has been the Chief Executive Officer of Stahlman-England Irrigation, Inc., a landscape, irrigation and artificial turf services company, since 2000. Prior to that, Mr. England spent 4-years as Chairman, President and Chief Executive Officer of Sweet Ripe Drinks, Ltd., a fruit beverage company. Prior to that, he spent 18 years at John Labatt Ltd. and served as that company’s Chief Financial Officer from 1990-1993, during which time John Labatt Ltd. was a public company with a market capitalization of over $5 billion. Mr. England started his career with Arthur Andersen & Co. in Toronto after serving in the Canadian infantry. Mr. England served as a director of Enbridge Inc. from January 2007 to May 2022 and is a past member of the board of directors of John Labatt, Ltd., Canada Malting Co., Ltd. and the St. Clair Paint and Wallpaper Corporation. Mr. England holds a Bachelor of Arts from the Royal Military College of Canada and a Master of Business Administration from York University. He also has a Chartered Accountant designation. | | | | SKILLS AND QUALIFICATIONS INCLUDE: ● Board and Executive Level Leadership ● Broad International Exposure ● High Level of Financial Expertise ● Extensive Energy Industry Experience ● Extensive Knowledge of the Company ● Energy Infrastructure ● Manufacturing Experience ● ESG Experience | PRINCIPAL OCCUPATION: ● Chief Executive Officer of Stahlman-England Irrigation Inc. |
Election of Directors
| 10 | 2024 Proxy Statement | |
Election of Directors
| BETSY BINGHAM | | | | Age 63 Director since: 2021 INDEPENDENT | BIOGRAPHY: Ms. Bingham has served as Lean Operations Leader for GE Aviation, an aircraft engine supplier, since June 2021. Ms. Bingham is responsible for leading GE Aviation’s lean transformation and implementation of lean principles throughout the organization and daily operations. In addition, Ms. Bingham has responsibility for Quality, Sustainability and Environmental, Health and Safety across the business. Ms. Bingham has significant experience as a leader in corporate lean manufacturing, transformation and scaling manufacturing. Previously, Ms. Bingham was the Lean & Operations Leader for GE Digital, an industrial software company, from December 2019 to June 2021, having responsibility for leading the lean transformation as well as oversight of the operational management system across the company. Prior to working at GE, Ms. Bingham served as Vice President of Integrated Supply Chain for the Honeywell International, Performance Materials and Technology business from September 2018 to November 2019. Additionally, Ms. Bingham was responsible for the Honeywell Operating System, the Company’s lean transformation system. Prior to Honeywell, Ms. Bingham served Koninklijke Philips N.V. (Royal Philips), a publicly traded diversified technology company, as Head of Systems Manufacturing from March 2018 to September 2018, Chief Operating Officer of Diagnostic Imaging Business from August 2016 to March 2018 and Senior Vice President — Head of Global Customer Service from January 2015 to August 2016. Ms. Bingham brings additional quality, lean and continuous improvement experience through leadership roles with Royal Philips’ Diagnostics Imaging Business and Danaher subsidiaries Tektronix, Inc. and Veeder-Root Co. Ms. Bingham received her Bachelor of Science in Ceramic Engineering from Alfred University and an MBA from State University of New York at Buffalo. | | | | SKILLS AND QUALIFICATIONS INCLUDE: ● Executive Level Leadership ● Broad Understanding of Advanced Technologies ● Lean Manufacturing and Scaling Manufacturing ● Experience with Global Publicly Traded Companies ● Risk Management / Oversight ● Manufacturing Experience ● ESG Experience | PRINCIPAL OCCUPATION: ● Lean Operations Leader for GE Aviation |
Election of Directors
| | 2024 Proxy Statement | 11 |
Election of Directors
| JASON FEW | | | | Age 57 Director since: 2018 | BIOGRAPHY: Mr. Few was appointed President and Chief Executive Officer of FuelCell Energy in August 2019 and has served as a director since November 2018. Mr. Few previously served as the Company’s Chief Commercial Officer from September 2019 to March 2022. Prior to joining FuelCell Energy, Mr. Few served as the President of Sustayn Analytics LLC, a cloud-based software waste and recycling optimization company, from April 2018 to August 2019. Mr. Few is the Founder and has served as Senior Managing Partner of BJF Partners, LLC, a privately held strategic consulting firm, since 2016. Mr. Few has over 35 years of experience increasing enterprise value for Global Fortune 500 and privately-held telecommunications, technology and energy firms. He has overseen transformational opportunities across the technology and industrial energy sectors, in roles including Founder and Senior Managing Partner of BJF Partners, LLC; President and Chief Executive Officer of Continuum Energy, an energy products and services company, from 2013 to 2016; Executive Vice President and Chief Customer Officer of NRG Energy, Inc., an integrated energy company, from 2011 to 2012; President of Reliant Energy, a retail electricity provider, from 2009 to 2012 and Vice President of Smart Energy, a retail electricity provider, from 2008 to 2009. Mr. Few also has served as a Senior Advisor to Verve Industrial Protection, an industrial cybersecurity software company, since 2016. Mr. Few was elected to the board of Enbridge Inc. (NYSE: ENB) effective May 4, 2022, and serves on the Audit, Finance and Risk Committee and the Sustainability Committee. Mr. Few also served on the board of directors of Marathon Oil (NYSE: MRO) from April 2019 to May 2022. Mr. Few earned a bachelor’s degree in computer systems in business from Ohio University. He received an MBA from Northwestern University’s J.L. Kellogg Graduate School of Management. | | | | SKILLS AND QUALIFICATIONS INCLUDE: ● Board and Executive Level Leadership ● Broad Understanding of Advanced Technologies ● Extensive Knowledge of the Company ● Extensive Energy and Utility Industry Experience ● Experience with Global Publicly Traded Companies ● Risk Management / Oversight ● Project Finance / Global Power Project Development ● Financial Management ● Strategic Planning ● Cybersecurity ● ESG Experience ● Energy Infrastructure ● Manufacturing Experience ● New Product Introduction and Product Management | PRINCIPAL OCCUPATION: ● President and Chief Executive Officer |
Election of Directors
| 12 | 2024 Proxy Statement | |
Election of Directors
| CYNTHIA HANSEN | | | | Age 59 Director since: 2021 INDEPENDENT | BIOGRAPHY: Ms. Hansen has served as Executive Vice President and President, Gas Transmission and Midstream at Enbridge Inc., a multinational pipeline and energy company, since March 2022. Ms. Hansen previously served as Executive Vice President and President, Gas Distribution and Storage at Enbridge Inc. from November 2018 to March 2022. Ms. Hansen is responsible for the overall leadership and operations of Enbridge Inc.’s gas pipeline and midstream business across North America. Ms. Hansen is also Executive Sponsor for Asset and Work Management Transformation across Enbridge Inc., working with other business unit leaders, and chair of the Diversity and Inclusion Sponsor Council. Ms. Hansen has served on the boards of the Interstate Natural Gas Association of America and the United Way of Greater Houston since May 2022, and the board of the Greater Houston Partnership since February 2023. Ms. Hansen has more than 25 years of experience working in operational, financial and safety leadership roles within Enbridge Inc., including as President, Enbridge Gas Distribution and Senior Vice President, Operations within Liquids Pipelines. Prior to joining Enbridge Inc., Ms. Hansen worked as a Principal for PricewaterhouseCoopers. Ms. Hansen is a member of Enbridge Inc.’s Executive Leadership Team. Ms. Hansen previously served on the boards of Energir Inc., Ontario Energy Association, the Canadian Gas Association, the Canadian Energy Council, the Canadian Energy Pipelines Association, the Alberta Chamber of Resources, the Edmonton Symphony Orchestra, the University of Alberta School of Business Advisory Council and NorQuest College, among others. Ms. Hansen was named one of Canada’s Most Powerful Women: Top 100 by the Women’s Executive Network, as well as a WXN Hall of Fame member and was recognized as a Canadian Business Leader by Catalyst Canada. Ms. Hansen received a Bachelor of Commerce degree from the University of Alberta and is also a graduate of the Alberta Institute of Chartered Accountants. | | | | SKILLS AND QUALIFICATIONS INCLUDE: ● Board and Executive Level Leadership Experience ● High Level of Financial Expertise ● International Exposure ● Risk Management / Oversight ● Extensive Energy and Utility Industry Experience ● Strong Focus on Strategy Development and Implementation ● Energy Infrastructure ● ESG Experience | PRINCIPAL OCCUPATION: ● Executive Vice President and President, Gas Transmission and Midstream at Enbridge Inc. |
Election of Directors
| | 2024 Proxy Statement | 13 |
Election of Directors
| MATTHEW F. HILZINGER | | | | Age 61 Director since: 2015 INDEPENDENT | BIOGRAPHY: Mr. Hilzinger was the Executive Vice President and Chief Financial Officer of USG Corporation, an international building products company, from May 2012 to May 2019. In that position, he oversaw all financial activities as well as strategic planning. From March 2002 to 2012, Mr. Hilzinger was with Exelon Corporation, where he served as Chief Financial Officer responsible for finance and risk management from 2008 to 2012 and as Corporate Controller from 2002 to 2008. Prior to joining Exelon, Mr. Hilzinger was Chief Financial Officer at Credit Acceptance Corporation in 2001. From 1997 to 2001, Mr. Hilzinger was at Kmart Corporation, where he last served as Vice President, Corporate Controller. From 1990 to 1997, Mr. Hilzinger was at Handleman Company, where he last served as Vice President, International Operations. Mr. Hilzinger has served on the board of Northwest Hardwoods, Inc. since February 2021. Mr. Hilzinger started his career at Arthur Andersen & Co. from 1985 to 1990. Mr. Hilzinger earned a Bachelor of Accounting from the University of Michigan. | | | | SKILLS AND QUALIFICATIONS INCLUDE: ● Executive Leadership ● High Level of Financial Expertise ● Extensive Knowledge of the Company ● Extensive Energy Industry Experience ● Experience with Global Publicly Traded Companies ● Risk Management / Oversight ● Manufacturing Experience ● ESG Experience | PRINCIPAL OCCUPATION: ● Former Executive Vice President and Chief Financial Officer of USG Corporation |
Election of Directors
| 14 | 2024 Proxy Statement | |
Election of Directors
| NATICA VON ALTHANN | | | | Age 73 Director since: 2015 INDEPENDENT | BIOGRAPHY: Ms. von Althann has served as a Director of PPL Corporation, one of the largest investor-owned utilities in the U.S. with approximately 18,000 megawatts of power generation, since 2009 and as a Director of TD Bank US Holding Company and its two bank subsidiaries, TD Bank, N.A. and TD Bank USA, N.A., since 2009. She was a founding partner of C&A Advisors, a consulting firm for financial services and risk management from 2009 to 2013, following her retirement in 2008 as the Senior Credit Risk Management Executive for Bank of America and Chief Credit Officer of U.S. Trust, an investment management company owned by Bank of America. Previously, she spent 26 years with Citigroup in various leadership roles, including Division Executive — Latin America for the Citigroup Private Bank, Managing Director and Global Retail Industry Head, and Managing Director and co-head of the U.S. Telecommunications — Technology group for Citicorp Securities. She also served as co-head of the High Yield Finance Group in Citicorp Securities following her service as Region Head of the Citicorp Leverage Finance Group. Ms. Von Althann was born in Havana, Cuba, and has served on the board of Friends of Caritas Cubana since October 2018. Ms. von Althann received a Bachelor of Arts in Political Science and Government from Bryn Mawr College. | | | | SKILLS AND QUALIFICATIONS INCLUDE: ● Board and Executive Level Leadership Experience ● High Level of Banking and Financial Expertise ● Extensive Knowledge of the Company ● Broad International Exposure ● Risk Management / Oversight ● Exposure to Energy and Utility Sectors ● Strong Focus on Strategy Development and Implementation ● ESG Experience | PRINCIPAL OCCUPATION: ● Former Financial Executive at Bank of America and Citigroup. |
Election of Directors
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Election of Directors
| DONNA SIMS WILSON | | | | Age 62 Director since: 2021 INDEPENDENT | BIOGRAPHY: Ms. Sims Wilson has served as Chief Operating Officer of Kah Capital Management, an alternative asset management firm, since April 2020, where she serves on the Management Committee, the Investment and Risk Management Committee and is Chairman of the Valuation Committee. Ms. Sims Wilson previously served as President of Smith Graham Investment Advisors, a $6 billion investment management firm, from October 2015 to April 2021. Ms. Sims Wilson also served on Smith Graham's Board of Directors as well as Executive Management and Investment Policy Committees for the same period. Prior to joining Smith Graham, she completed a 30-year career as an investment banker where among other roles, she was the lead corporate finance professional underwriting hundreds of billions of dollars of corporate and mortgage debt, as well as equity initial and secondary public offerings. Ms. Sims Wilson co-founded the National Association of Securities Professionals (NASP) Africa Financial Summit in 2015. With subsequent funding from USAID, Mobilizing Institutional Investor to Develop Africa’s Infrastructure (MiDA) was born and has since executed over $1 billion in African infrastructure investments from U.S. institutions. Her leadership in ideating and launching these successful endeavors served as a precursor to her participation in leading a delegation of U.S. pension funds and foundations to the 2018 G20 Buenos Aires summit to educate global institutional investors on how to generate safe, risk-adjusted returns by investing in African infrastructure. Ms. Sims Wilson also previously served as Chair for the Export Import Bank of the United States on the Sub-Saharan African Advisory Board. Ms. Sims Wilson is a frequent speaker at financial service industry events, has testified before the U.S. Congress on laws relating to diversity and has appeared on CNBC’s Squawk Box and C-SPAN discussing issues of diversity, equity and how diverse populations are faring in the economic recovery. She was named One of the Most Powerful Women in Business by Black Enterprise Magazine and received NASP’s coveted Joyce Johnson Award in 2010. Ms. Sims Wilson is an advocate of diversity, equity and inclusion initiatives and she helps businesses break down demographic, social and geographic barriers to achieve expanded levels of success. Additionally, Ms. Sims Wilson brings extensive corporate governance experience through her international corporate board service, leadership positions with numerous not for profit boards and working closely with institutional investors and analysts. Ms. Sims Wilson received her Bachelor of Arts in Political Science from Yale University. | | | | SKILLS AND QUALIFICATIONS INCLUDE: ● Executive Level Leadership Experience ● High Level of Banking and Financial Expertise ● High Level of Marketing and Sales Expertise ● Broad International Exposure ● Risk Management / Oversight ● Exposure to Energy and Utility Sectors ● Strong Focus on Strategy Development and Implementation ● ESG Experience | PRINCIPAL OCCUPATION: ● Chief Operating Officer at Kah Capital Management |
Election of Directors
| 16 | 2024 Proxy Statement | |
Election of Directors
Board Diversity The chart below details Board diversity composition by various characteristics as defined by Nasdaq board diversity and disclosure Rule 5605(f). For more information regarding our philosophy concerning the diversity and recruitment of our Board members, please see page 21 of this Proxy Statement.
Board Diversity Matrix (as of February 16, 2024)
| ● | an annual equity award of either restricted stock units (“RSUs") or deferred common stock (at the Director’s election) valued at $115,000 for service as a Director which vests one year from the date of grant; and |
Board Diversity Matrix (as of February 16, 2024)
In addition, the non-employee Chairman of the Board received an additional annual retainer of $50,000, and Chair committee retainers were $20,000 for the Audit, Finance and Risk Committee and $15,000 for each of the Environmental, Social, Governance and Nominating Committee and the Compensation Committee. A Director will receive pro-rated retainers if he or she does not finish his or her then-current term as a Director. New Board Members Upon election to the Board, a non-employee Director will be granted an equity award in the form of restricted stock units (also referred to herein as RSUs) valued at $50,000, pro-rated from the date of his or her initial appointment to the end of the service year (which ends at the annual stockholder meeting). The per share fair market value of each award is based upon the closing market price of the Company’s common stock on the date of grant.
Board Diversity Matrix (as of February 16, 2024)
| | | | | All Other | | | | Fees Earned Or | Stock Awards | Option Awards | Compensation | | | Name of Director | Paid in Cash ($) | ($)(1) | ($) | ($) | Total ($)(2) | | James H. England | — | 232,500 | — | — | 232,500 | | Matthew F. Hilzinger | 80,000 | 115,000 | — | — | 195,000 | | Natica von Althann | 54,000 | 136,000 | — | — | 190,000 | | Cynthia Hansen | — | 182,500 | — | — | 182,500 | | Donna Sims Wilson | 82,500 | 115,000 | — | — | 197,500 | | Betsy Bingham | 67,500 | 115,000 | — | — | 182,500 |
Board Diversity Matrix (as of February 16, 2024)
| | Annual | Annual | Committee | | | | Equity Award | Retainer Fees | Participation Fees | | | Name of Director | ($) | ($) | ($) | Total ($)(2) | | James H. England | 115,000 | 50,000 | 67,500 | 232,500 | | Matthew F. Hilzinger | 115,000 | 50,000 | 30,000 | 195,000 | | Natica von Althann | 115,000 | 50,000 | 25,000 | 190,000 | | Cynthia Hansen | 115,000 | 50,000 | 17,500 | 182,500 | | Donna Sims Wilson | 115,000 | 50,000 | 32,500 | 197,500 | | Betsy Bingham | 115,000 | 50,000 | 17,500 | 182,500 |
Board Diversity Matrix (as of February 16, 2024)
| (1) The amounts reported represent the aggregate grant date fair value of the stock awards granted in fiscal year 2023 determined in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718. Additional information about the assumptions that we used in valuing these awards is set forth in our Annual Report on Form 10-K in Note 15 of the Notes to Consolidated Financial Statements for our fiscal year ended October 31, 2023. Stock awards to Directors for payment of fees are unrestricted shares of common stock that are not subject to any vesting provisions. The annual equity award vests at the earlier of one year from the date of grant or the next annual meeting of stockholders. |
Board Diversity Matrix (as of February 16, 2024)
| ● | 100 percent of restricted stock and restricted stock unit awards (vested and unvested) issued under the Company’s equity incentive plans, but not performance stock units issued under the Company’s equity incentive plans; |
Board Diversity Matrix (as of February 16, 2024)
Executive officers and Directors must maintain at least 50 percent of the stock received from equity awards (on a shares issued basis) until the specified minimum ownership requirement level is achieved. Unexercised stock options (vested and unvested) may not be counted for purposes of meeting the applicable ownership guidelines. Once the stock ownership guideline has been achieved, executive officers will be required to maintain stock holding requirements for the duration of their employment with the Company and for Directors, until their cessation of service on the Board. Risk Oversight The Board has overall responsibility for the oversight of risk management at our Company. Day-to-day risk management is the responsibility of management, which has implemented processes to identify, assess, manage and monitor risks that face our Company. Our Board, either as a whole or through its committees, regularly discusses with management our major risk exposures, their potential impact on our Company, and the steps we take to monitor and control such exposures. Our Board’s role in our Company’s risk oversight has not affected our leadership structure.
Danbury, CT 06810
| Each of the current and fiscal year 2023 Compensation Committee members is, and during his or her entire period of service on the Committee has been, an independent Director under applicable Nasdaq and SEC rules (including the rules applicable to compensation committee members), and the Compensation Committee is governed by a Board-approved charter stating its responsibilities. Members of the Compensation Committee are appointed by the Board. The Compensation Committee is responsible for reviewing and approving the compensation plans, policies and programs of the Company to compensate the officers and Directors in a reasonable and cost-effective manner. | | The Compensation Committee’s overall objectives are to ensure the attraction and retention of superior talent, to motivate the performance of the executive officers in the achievement of the Company’s business objectives and to align the interests of the officers and Directors with the long-term interests of the Company’s stockholders. To that end, it is the responsibility of the Compensation Committee to develop, approve and periodically review a general compensation policy and salary structure for executive officers of the Company, which considers business and financial objectives, industry and market pay practices and/or such other information as may be deemed appropriate. Responsibilities of the Compensation Committee include: ● Reviewing and recommending for approval by the independent Directors of the Board the compensation (salary, bonus and other incentive compensation) of the Chief Executive Officer of the Company; ● Reviewing and approving the roster of companies used as a peer group for external benchmarking of our officer and Director compensation programs; ● Reviewing and approving the compensation (salary, bonus and other incentive compensation) of the other executive officers of the Company; ● Reviewing and approving milestones and strategic enablers (under the Company’s Management Incentive Plan, or “MIP”) relevant to the compensation of executive officers of the Company and evaluating performance in light of those goals and objectives; ● Overseeing the Company’s compliance with the applicable rules and regulations of the SEC regarding stockholder approval of certain matters, including advisory votes on executive compensation; ● Reviewing and approving all employment, retention and severance agreements for executive officers of the Company; ● Reviewing the management succession program for the Chief Executive Officer, the named executive officers and other selected executives of the Company; and ● Reviewing and discussing the Compensation Discussion and Analysis (“CD&A”) with management and, based on such review and discussions, recommending to the Board that the CD&A be included in the Company’s annual proxy statement. |
Danbury, CT 06810
| The Compensation Committee acts on behalf of the Board in administering compensation plans approved by the Board in a manner consistent with the terms of such plans (including, as applicable, the granting of stock options, restricted stock, stock units and other awards, the review of performance goals established before the start of the relevant plan year, and the determination of performance compared to the goals at the end of the plan year). The Committee reviews and makes recommendations to the Board with respect to new compensation incentive plans and equity-based plans; reviews and recommends the compensation (annual retainer, committee fees and other compensation) of the Directors to the full Board for approval; and reviews and makes recommendations to the Board on changes in major benefit programs of the Company. Compensation Committee agendas are established in consultation with the Committee chair. The Compensation Committee meets in executive session at each Committee meeting. The Compensation Committee held seven meetings during fiscal year 2023. The complete Compensation Committee charter can be found in the Corporate Governance sub-section of the section entitled “Investors” on our website at www.fuelcellenergy.com. The Compensation Committee’s report appears on page 35 of this Proxy Statement. |
Danbury, CT 06810
| Compensation Committee Report | 35 | Compensation Discussion and Analysis | 36 | | Fiscal Year 2023 Summary Compensation Table | 51 | Fiscal Year 2023 Grants of Plan-Based Awards | 52 | | Outstanding Equity Awards at 2023 Fiscal Year-End Table | 53 | Fiscal Year 2023 Option Exercises and Stock Vested Table | 54 | | Employment Agreements and Change of Control and Severance | 54 | | |
Fiscal Year 2023 Compensation Mix for NEOs
Fiscal Year 2023 Compensation Mix for NEOs Our compensation mix for fiscal year 2023 was significantly performance-based and tied to increasing stockholder value as demonstrated by the following charts. We target a compensation mix for our NEOs weighted heavily towards variable, or “at risk” compensation including short-term cash incentives and long-term incentive compensation in the form of equity awards to align the compensation of our NEOs with our performance and the interests of our stockholders. For the purposes of these charts, base salary reflects the base salary in effect as of January 1, 2023 and annual cash incentive amounts are based on target amounts. Long-term incentive compensation amounts (which fall under “Equity Compensation” in the charts below) are based on the grant date fair value of awards. The “Other NEOs” chart reflects average values for the NEOs other than our CEO. Total Compensation Mix
Fiscal Year 2023 Compensation Mix for NEOs
Equity Compensation Award Mix Equity compensation for fiscal year 2023 comprised performance stock units and time-based RSUs, with a compensation mix that heavily emphasized performance-based compensation as illustrated in the charts below. The values in the charts below reflect the target value of the performance stock units and the grant date fair value of the time-based RSUs granted during fiscal year 2023. The “Other NEOs” chart below reflects average values for the NEOs other than our CEO.
Fiscal Year 2023 Compensation Mix for NEOs
| What We Do: | | | | Maintain an Independent Compensation Committee — Our Compensation Committee consists solely of independent directors who establish our compensation practices. | | | Retain an Independent Compensation Advisor — Our Compensation Committee has engaged its own compensation consultant to provide information, analysis and other advice on executive compensation independent of management. | | | Annual Executive Compensation Review — At least once a year, our Board conducts a review of our compensation strategy, and during fiscal year 2023, we did an in-depth review of our compensation program and updated our peer group for purposes of evaluating compensation and making compensation decisions for fiscal year 2023. | | | Compensation At-Risk — Our executive compensation program is designed so that a significant portion of the compensation of our executive officers is “at risk” based on corporate performance, to align the interests of our executive officers and stockholders. This “at risk” compensation includes the performance-based equity awards made in fiscal year 2023, which are discussed in additional detail below. | | | Stock Ownership Guidelines — We maintain minimum stock ownership guidelines and stock holding requirements applicable to our executive officers and the non-employee independent members of our Board. As of October 31, 2023, each of our executive officers had either satisfied such guidelines or had time remaining to do so under the guidelines. Our minimum stock ownership guidelines are discussed in additional detail on page 24 of this Proxy Statement. | | | Compensation Recovery (“Clawback”) Policies — In fiscal year 2023, we adopted two new executive compensation recovery policies. The policies are discussed in additional detail on page 24 of this Proxy Statement. | | | Conduct an Annual Stockholder Advisory Vote on NEO Compensation — We conduct an annual stockholder advisory vote on the compensation of our NEOs. Our Board considers the results of this advisory vote during the course of its deliberations on executive compensation. At our 2023, 2022 and 2021 annual stockholder meetings, approximately 82 percent, 89 percent and 76 percent, respectively, of the shares voted on the “say-on-pay” proposal were cast in support of our executive compensation. The Compensation Committee continues to consider input from stockholders in making compensation decisions and reviewing executive compensation programs and policies. At our Annual Meeting of Stockholders in 2023, in keeping with the recommendation of our Board, our stockholders expressed a preference that future advisory stockholder votes to approve the compensation of our NEOs be held on an annual basis and, as previously disclosed, our Board determined to hold an advisory vote to approve the compensation of our NEOs every year. | | | Compensation-Related Risk Assessment — We conduct regular risk assessments of our compensation programs and practices, and a full risk assessment was completed by our independent compensation consultant during fiscal year 2023 and reviewed by our Compensation Committee. We structure our executive compensation programs to try to minimize the risk of inappropriate risk-taking by our NEOs. | | | “Double-Trigger” Change in Control Arrangements — We have established “double-trigger” change-in-control severance agreements with each of our NEOs. |
Fiscal Year 2023 Compensation Mix for NEOs
| What We Do Not Do: | | | | No Guaranteed Bonuses — We do not provide guaranteed annual bonuses to our executive officers. | | | No Defined Benefit Retirement Plans — We do not currently offer, nor do we have plans to offer, defined benefit pension plans or any non-qualified deferred compensation plans or arrangements to our NEOs other than arrangements that are available generally to all employees. Our NEOs are eligible to participate in our 401(k) retirement plan on the same basis as our other employees. | | | No Tax Gross-Ups — We do not offer our NEOs any tax “gross-ups.” | | | No Stock Option Re-pricing — We do not permit options to purchase shares of our common stock to be repriced to a lower exercise price without the approval of our stockholders. | | | No Hedging or Pledging — Our Insider Trading Policy prohibits all Directors, NEOs and other employees from engaging in hedging or other speculative trading and prohibits Directors and NEOs from pledging their shares. |
Fiscal Year 2023 Compensation Mix for NEOs
| | Compensation Component | Purpose | | FIXED | Base Salary Paid in cash Bonus Paid in cash | ● Provide a competitive fixed rate of pay relative to similar positions in the market. ● Enable the Company to attract, develop and retain critical executive talent. ● At the discretion of the Compensation Committee. Used periodically as a sign-on to attract executive talent or as a spot award to reward or retain critical executive talent. | | AT RISK | Annual or Short-Term Incentives Paid — to the extent that performance goals are achieved — annually in cash under the Management Incentive Plan or MIP | ● Focus executive officers on achieving progressively challenging short-term performance goals that align with the Company’s annual operating plan and result in long-term value creation. | | | Long-Term Incentives Paid — to the extent vesting criteria are met — under the Long-Term Incentive (LTI) Plan in equity | ● The 2023 LTI Plan is performance based with fifty percent of the shares awarded tied to performance of the Company’s common stock. ● Focus our executive officers on longer-term performance goals that strongly align with and drive stockholder value creation, as well as support the Company’s leadership retention strategy. |
Fiscal Year 2023 Compensation Mix for NEOs
| 1 | 2 | 3 | | The Compensation Committee reviews the base salary, target annual incentive award, long-term incentive award and target total direct compensation opportunity (which represents the sum of these three elements) for each of the NEOs annually. | The CEO makes recommendations to the Compensation Committee for annual increases in base salary, the annual incentive award payments and long-term incentive awards for each of the NEOs (other than with respect to his own compensation), taking into account the recommendations of the Compensation Committee’s independent compensation consultant. | The Compensation Committee has the final authority to approve annual increases in base salary, annual incentive award payments and long-term equity incentive awards for the NEOs other than the CEO, whose compensation is approved by the independent members of our Board. |
Fiscal Year 2023 Compensation Mix for NEOs
Prior to the start of each fiscal year, the CEO develops operational milestones and strategic enablers (or similar milestones and initiatives) under the Company’s Management Incentive Plan for the year for our salaried employees, including the NEOs. These operational milestones and strategic enablers represent key performance objectives which are incorporated into the MIP, which is then submitted to the Compensation Committee for consideration and approval. After our fiscal year-end financial results are available, the annual incentive award pool for employees and individual annual incentive award payments for the NEOs for the just-completed fiscal year are approved by the Compensation Committee, except with respect to the CEO, whose annual incentive award payment is approved by the independent members of our Board.
Competitive Market Analysis
Competitive Market Analysis In September 2022, Meridian conducted a competitive market analysis that was used by the Compensation Committee in connection with its executive and non-employee Director compensation decisions for fiscal year 2023. To develop an understanding of the competitive marketplace, the Compensation Committee reviewed the executive compensation practices of a group of similarly situated publicly-traded companies (the “Peer Group”) based on compensation data gathered from publicly-available filings. The Compensation Committee and Meridian reviewed and considered factors such as operating size, valuation, margins, growth and shareholder returns alongside business model comparability in determining the Peer Group to be utilized in making compensation decisions for fiscal year 2023. The 2023 Peer Group was selected based on the evaluation of all of these factors, and consisted of the following 14 companies:
Competitive Market Analysis
| American Superconductor Corporation | FTC Solar, Inc. | | Aspen Aerogels, Inc. | Plug Power, Inc. | | Ballard Power Systems, Inc. | Shoals Technologies Group, Inc. | | Blink Charging Co. | Stem, Inc. | | Bloom Energy Corporation | Sunnova Energy International Inc. | | ChargePoint Holdings, Inc. | Thermon Group Holdings | | Clean Energy Fuels Corp. | Vicor Corporation |
Competitive Market Analysis
Relative to our prior Peer Group roster used for fiscal year 2022, we removed CECO Environmental Corp., Enphase Energy, Inc., Orion Energy Systems, Inc., Park Electrochemical Corp., Vishay Precision Group, Inc. and Westport Fuel Systems Inc., in light of increasing divergence with respect to company valuations or revenue. In addition, in updating our Peer Group for fiscal year 2023, we added Blink Charging Co., ChargePoint Holdings, Inc., FTC Solar, Inc., Shoals Technologies Group, Inc., Stem, Inc. and Sunnova Energy International Inc. to bolster our overall Peer Group roster size and improve our alignment across key financial demographic statistics with Peer Group medians. The Compensation Committee uses the market analysis as a reference point to ensure that our executive compensation program is competitive with market practice. In the case of each executive officer, the Compensation Committee compares the overall compensation of each individual against the compensation data developed through the market analysis, if his or her position is sufficiently similar to the positions identified in the data to make the comparison meaningful. However, the Compensation Committee
Competitive Market Analysis
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Competitive Market Analysis
reviews a full array of competitive market data rather than isolating and targeting a particular percentile with respect to any portion of the executives’ pay. Ultimately, the Compensation Committee’s decisions with respect to each executive’s total compensation, and each individual compensation element, are based in large part on its assessment of Company and individual performance as well as other factors, such as internal equity. Fixed Compensation
Bonuses
Bonuses The Compensation Committee may, from time to time, grant discretionary bonuses. In fiscal year 2023, no discretionary bonuses were paid. Variable Compensation
Annual Incentive Compensation
Annual Incentive Compensation All salaried exempt employees, including our executive officers, are eligible to participate in our annual cash bonus plan, which we refer to as the Management Incentive Plan or the MIP. The MIP is intended to motivate employee performance in, and align compensation levels with, the achievement of our annual business objectives. The Compensation Committee periodically reviews and determines the target annual incentive award opportunities (expressed as a percentage of base salary) that each of the executive officers may earn under the MIP. The target annual incentive award opportunities for each NEO (expressed as a percentage of base salary) were originally established in each of their respective employment agreements and are reviewed periodically by the Compensation Committee. For fiscal year 2023, the independent members of the Board, at the recommendation of the Compensation Committee, approved a target annual incentive award opportunity of 100 percent (as a percentage of base salary) for Mr. Few, and the Compensation Committee increased the target annual incentive award opportunities from 65 percent to 70 percent for Messrs. Bishop, Lisowski and Feasel and from 55 percent to 60 percent for Mr. Dolger. The actual amount of annual cash compensation earned under the MIP each year by our NEOs may be more or less than the target amount depending on our performance against a set of pre-established Company operational milestones (which represent 75 percent
Annual Incentive Compensation
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Annual Incentive Compensation
of their target annual incentive award opportunity) and a set of pre-established Company strategic enablers (which represent the remaining 25 percent of their target annual incentive award opportunity). In addition, the Compensation Committee retains the right to exercise its discretion to adjust the size of potential award payments as it deems appropriate to take into account factors that enhance or detract from results achieved relative to the Company’s operational milestones and strategic enablers. In this way, the Compensation Committee does not confine itself to a purely quantitative approach and retains discretion in determining award payments based on its review and assessment of other results for the fiscal year. The Compensation Committee believes that linking the annual incentive awards for the NEOs to Company operational milestones and strategic enablers creates a performance-based compensation opportunity that furthers stockholder interests, but by retaining some discretion, reduces the risk that executives will overemphasize performance on the pre-established objectives to the detriment of the Company’s overall performance. Retaining limited discretion allows the Compensation Committee to ultimately conduct a more fulsome performance assessment that recognizes industry-specific and broader macroeconomic trends that have impacted the business and the Company’s opportunities and performance during the course of the year. The operational milestones and strategic enablers on which the 2023 MIP awards were based, as well as our performance with respect to such milestones and initiatives, are discussed below. Fiscal Year 2023 Operational Milestones and Strategic Enablers For fiscal year 2023, the pre-established Company operational milestones and strategic enablers were intended to further advance our business and strategic objectives.
Operational Milestones
Operational Milestones The operational milestones for fiscal year 2023 were consistent with our fiscal year 2023 annual operating plan and were set in consideration of the Company’s prior performance and fiscal year 2023 budget. The operational milestones (and their respective weighting) were: (1) achieve a specified level of total revenue for the fiscal year (20 percent), (2) secure new orders (25 percent), (3) end fiscal year 2023 with a specified level of unrestricted cash (25 percent), (4) achieve Adjusted EBITDA with a zero percent deviation from budget (15 percent) and (5) achieve a total reportable injury rate of < 2.2 (15 percent). (For information regarding the calculation of Adjusted EBITDA, see Annex A to this Proxy Statement.) For each operational milestone, a threshold level was set in order to qualify for 50 percent of the target payout and a maximum was set which capped the bonus potential at 200 percent of the target payout. Between threshold and target and between target and maximum there are additional incremental levels associated with 75 percent and 150 percent of target payouts, respectively.
Strategic Enablers
| | | Maximum | Target | Threshold | | Category | Weighted | | | Category | Achievement | Achievement | Achievement | Company Actual | Payout | Payout | | Milestone | Weighting | (200%) | (100%) | (50%) | Achievement | Percentage | Percentage | | Achieve FY Revenue Target | 20% | $157 million | $130 million | $105 million | $123 million | 87% | 18% | | Secure New Orders(1) | 25% | 54 MW | 45 MW | 36 MW | (1) | 100% | 25% | | Achieve FY Unrestricted Cash Target(2) | 25% | $500 million | $450 million | $405 million | $354 million | 0% | 0% | | Achieve Adjusted EBITDA(3)(4) — Percent Deviation from Budget | 15% | 20% | 0% | (20)% | (15)% | 63% | 9% | | Achieve a Total Reportable Injury Rate of < 2.2 (excludes COVID) | 15% | 1.30 | 2.20 | 3.00 | 1.69 | 151% | 23% | | | 100% | | | | | | 75% |
Strategic Enablers
| (1) The Compensation Committee exercised discretion in evaluating this operational milestone to consider the dollar value and projected margin of a long-term service agreement entered into in fiscal year 2023 instead of using a MW value. Additional detail is below. |
Strategic Enablers
| (2) Includes investments in short-term treasury securities. In calculating the total amount of the Company’s unrestricted cash for fiscal year 2023, the Compensation Committee included both the amount of unrestricted cash and the amortized cost of short-term U.S. Treasury Securities outstanding as of October 31, 2023. |
Strategic Enablers
| Achieve FY Revenue Target | Continued revenue growth is a key metric for the Company. For fiscal year 2023, we budgeted revenue at $130 million, which was consistent with total revenue for fiscal year 2022 and an 87% increase over fiscal year 2021. Total revenues for the year ended October 31, 2023, decreased $7.1 million, or 5%, to $123.4 million from $130.5 million for the year ended October 31, 2022. The Compensation Committee determined that an 87% payout percentage was achieved for this milestone. | | Secure New Orders | Securing new orders is critical to drive revenue growth and maintain a strong revenue backlog. The goal established for fiscal year 2023 was 45 MW of new orders, which would have been an improvement compared to the 29.7 MW of new orders secured in fiscal year 2022. While no MW product sales were entered into during fiscal year 2023, the Company made significant progress in re-entering the Asian market. During fiscal year 2023, we entered into a long-term service agreement with Noeul Green Energy pursuant to which we are contracted to oversee the operation and maintenance of Noeul Green Energy’s 20 MW fuel cell park over a term of 14 years. This added $75.6 million to backlog as of October 31, 2023, with an anticipated high margin. The agreement was executed in July 2023 and our service team quickly completed the repowering of the 20 MW site in October, which will lead to fiscal year 2024 revenue recognition under this contract. Given the strategic importance of this order and the margin profile, the Compensation Committee exercised its discretion and determined that 100% payout percentage was achieved for this milestone. If the Compensation Committee had maintained the original new product sales target based on MWs of orders only, the Company would have achieved no payout for this milestone. | | Achieve FY Unrestricted Cash Target | It is strategically important for the Company to maintain a strong cash balance to fund future growth plans, including capital expenditures, research and development with the goal of accelerating the development of our solid oxide (power, hydrogen and electrolysis) and carbon capture platforms and |
Strategic Enablers
| | building out our generation portfolio. We established a target of $450 million of unrestricted cash by the end of fiscal year 2023. During fiscal year 2023, we entered into project financings with total gross proceeds of $100.5 million, and we sold shares of our common stock resulting in net proceeds to the Company of $97.4 million. These proceeds partially offset the growth investments that we made during fiscal year 2023, and we ended the fiscal year with total unrestricted cash and short-term investments of approximately $354 million. Because this total fell short of the threshold achievement level, the Compensation Committee determined that no payout was achieved for this milestone. | | Achieve Adjusted EBITDA — Percent Deviation from Budget | Achieving financial results within acceptable variances of budget is a key target for management to ensure operating financial performance. We use Adjusted EBITDA as a financial measure to evaluate operating performance. (For information regarding the calculation of Adjusted EBITDA, see Annex A to this Proxy Statement.) For this measure, we established a target achievement level equal to our fiscal year 2023 budget of Adjusted EBITDA of approximately $(89.3) million. We ended the fiscal year with Adjusted EBITDA of approximately $(102.2) million which was a negative 15 percent deviation from the target achievement level. This result was driven by certain higher than anticipated costs incurred during the fiscal year, including those incurred to build out the Toyota Tri-gen project and higher service loss accruals related to rising module costs. The Compensation Committee determined that a 9% payout percentage was achieved for this milestone. | | Achieve a Total Reportable Injury Rate of < 2.2 | Safety is a core value of the Company therefore, in fiscal year 2023, the Compensation Committee raised the visibility of the Company’s safety program by linking certain results to management compensation. For fiscal year 2023, the Company established a Total Reportable Injury Rate (“TRIR”) target of 2.2. The actual TRIR for fiscal year 2023 was 1.69. The Compensation Committee determined that a 151% payout percentage was achieved for this milestone. |
Strategic Enablers
| | | Company Actual | Percentage of | Weighted Payout | | Initiative | Weight | Achievement | Target Achievement | Percentage | | Launch solid oxide power generation and electrolysis product lines to grow the business | 33% | Partial | 50% | 17% | | Strengthen position of carbonate technology as the leading platform for carbon capture | 33% | Complete | 100% | 33% | | Create a sustainable business through environmental and social governance and diversity, equity and inclusivity initiatives | 34% | Complete | 100% | 34% | | | 100% | | | 84% |
Strategic Enablers
| | above. The Compensation Committee determined that a 50% payout percentage was achieved for this strategic enabler. | | Strengthen position of carbonate technology as the leading platform for carbon capture | The goal of this strategic enabler was to build upon the development of the Company’s carbon capture and recovery technologies by securing commercial opportunities and meeting certain technical milestones. Activities planned for fiscal year 2023 under this strategic enabler included: (1) secure an order for the demonstration of the Company’s technology at ExxonMobil’s Rotterdam refinery, (2) procure equipment for prototype carbon separation testing in Torrington, (3) demonstrate the technical feasibility of 90% CO2 capture in sub-scale stack testing, and (4) expand the carbon capture and recovery marketing campaign to grow and progress the sales pipeline. All of these initiatives were completed during the fiscal year. The Compensation Committee determined that a 100% payout percentage was achieved for this strategic enabler. | | Create a sustainable business through environmental and social governance and diversity, equity and inclusivity initiatives | The goal of this strategic enabler was to continue to advance the Company’s sustainability and Diversity, Equity and Inclusivity (“DEI) initiatives. Activities planned for fiscal year 2023 under this strategic enabler included: (1) develop a roadmap to reduce emissions, with a long-term goal of achieving net-zero emissions, (2) establish an Environmental, Social and Governance (“ESG”) board, (3) develop a reporting methodology and prepare for the Company’s 2024 ESG report and (4) implement a progressive DEI program. All of these initiatives were completed during the fiscal year. The Compensation Committee determined that a 100% payout percentage was achieved for this strategic enabler. |
Strategic Enablers
Combined Performance Results and Annual Incentive Award Payments for Fiscal Year 2023 Following the conclusion of fiscal year 2023, the Compensation Committee reviewed the Company’s performance as measured against the Company’s operational milestones and strategic enablers and approved an annual incentive award achievement percentage of 77 percent of the target award levels, determined as follows:
Long-Term Incentive Compensation
Long-Term Incentive Compensation We use long-term incentive compensation, in the form of equity awards, to motivate and reward executive officers for effectively executing longer-term strategic and operational objectives. The value of these equity awards is based on the value of our common stock, and these awards help align the interests of our executive officers with those of the Company’s stockholders.
Long-Term Incentive Compensation
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Long-Term Incentive Compensation
For fiscal year 2023, our long-term incentive plan for each executive officer was comprised of performance stock units (“PSUs”) and time-based RSUs. The Compensation Committee elected to use PSUs because these awards reflect a balance between substantial upside potential for superior stock price performance, and decline in award size, to zero in the extreme, for performance that is below expectations, and to use RSUs because these awards foster retention through business cycles. The Compensation Committee exercises its judgment in determining the size of the equity awards granted to executive officers. For each eligible executive, the Committee considers the relative value of equity awards compared to the equity awards held by other executive officers, the desired incentive mix between PSU awards and RSU awards, a compensation analysis performed by Meridian, and the individual experience, skills and performance level of the executive officer. For fiscal year 2023, the Compensation Committee determined to allocate 50 percent of long-term incentive target shares to PSUs based on total stockholder return (“TSR”), with 100 percent being based on relative TSR, as further described below. The remaining 50 percent of the long-term incentive target shares are allocated to RSUs that vest ratably over a 3-year period from the date of grant, with the number of RSUs being determined by dividing the target fair value by the average closing price of our common stock over the 60 trading days immediately preceding the date of the grant. For the PSUs granted for fiscal year 2023, the Compensation Committee established the performance period as November 1, 2022 through October 31, 2025. See the Fiscal Year 2023 Grants of Plan-Based Awards table on page 52 for information regarding the actual grants made to our NEOs during fiscal year 2023. Additional information regarding our performance-based awards in fiscal years 2023, 2022 and 2021 follows.
Relative TSR PSUs
Relative TSR PSUs In each of fiscal years 2021, 2022 and 2023, the Compensation Committee established the performance assessment criteria for the relative TSR PSUs (“Relative TSR PSUs”) as the TSR of the Company relative to the TSR of the Russell 2000 Index, with the award calibration being 100 percent plus or minus 0.5x the difference between the Company’s TSR and the Russell 2000 Index composite TSR. Each of these awards is capped at 200 percent of the target number of PSUs, and the award is further capped at 100 percent of the target number of PSUs if the Company’s absolute TSR over the performance period is negative. For each award, the Company’s TSR is calculated by subtracting the Company’s beginning stock price from the ending stock price, adding any dividends during the period, and then dividing the result by the Company’s beginning stock price. “Beginning stock price” is defined as: (i) the average closing price of the Company’s common stock over the 20 consecutive trading days ending on October 31, 2020 for the fiscal year 2021 Relative TSR PSUs and ending on October 30, 2021 for the fiscal year 2022 Relative TSR PSUs and (ii) the average closing price of the Company’s common stock over the 60 consecutive trading days ending on November 1, 2022 for the fiscal year 2023 Relative TSR PSUs. “Ending stock price” is defined as: (i) the average closing price of the Company’s common stock over the 20 consecutive trading days ending on October 31, 2023 for the fiscal year 2021 Relative TSR PSUs and ending on October 31, 2024 for the fiscal year 2022 Relative PSUs, and (ii) the average closing price of the Company’s common stock over the 60 consecutive trading days ending on October 31, 2025 for the fiscal year 2023 Relative TSR PSUs. Any PSUs that are earned based on performance will be earned on the date that the Compensation Committee certifies the achievement of the applicable level of relative TSR. Any PSUs that are not earned on such date shall be forfeited. PSUs earned on the basis of relative TSR performance remain subject to vesting based on continued service until the third anniversary of the grant date. The Compensation Committee certified achievement of the 2021 Relative TSR PSUs at 73.541 percent of target based on the criteria above. The 2021 Relative TSR PSUs were subject to vesting based on continued service until November 23, 2023, at which time the awards vested.
Absolute TSR PSUs
Absolute TSR PSUs The Compensation Committee did not award absolute value TSR PSUs in fiscal year 2022 or fiscal year 2023. Fiscal Year 2021 Absolute TSR PSU Awards: The Compensation Committee established the performance assessment criteria for the absolute TSR PSUs as the Company’s closing stock price, with the award calibration being based on a specified percentage increase in the price of the Company’s common stock over the average closing price of the Company’s common stock over the 20 consecutive trading days ending on October 30, 2020, which was $2.27. Specifically, a 25 percent increase would earn 50 percent of the target
Absolute TSR PSUs
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Absolute TSR PSUs
award, a 50 percent increase would earn 100 percent of the target award and a 100 percent or greater increase would earn 200 percent of the target award. Each price hurdle was required to be met for 20 consecutive trading days, and price hurdles could be met at any time during the performance period. Performance Shares earned based on the closing price of the Company’s common stock remained subject to vesting based on continued service until the third anniversary of the grant date of November 24, 2020. The Compensation Committee certified achievement of a 150 percent increase during fiscal year 2021, resulting in an earned award percentage of 200 percent. The PSUs earned on the basis of absolute TSR performance remained subject to vesting based on continued service until November 24, 2023 (the third anniversary of the grant date), at which time the awards vested. Health and Welfare Benefits
Prohibition on Option Re-Pricing and Backdating
Prohibition on Option Re-Pricing and Backdating The Compensation Committee does not re-price and has not re-priced options to purchase shares of our common stock, consistent with the Third Amended and Restated 2018 Omnibus Incentive Plan, which prohibits re-pricing of equity awards without stockholder approval. The grant date for each equity award is based on the date the award is approved by the Compensation Committee or the independent members of our Board, as applicable. Options to purchase shares of our common stock are granted with an exercise price equal to the closing market price of our common stock on the date of grant.
Equity Award Grant Policy
Equity Award Grant Policy We maintain an Equity Award Grant Policy, which is reviewed by the Compensation Committee on an annual basis. This policy includes the following key provisions: (a) all equity awards of more than 40,000 shares must be submitted to the Compensation Committee for approval; (b) all equity awards granted to executives at the level of vice president (or above) must be submitted to the Compensation Committee for approval; (c) the Compensation Committee has authorized a pool of up to 250,000 shares from which the CEO may approve equity awards for special recognition or retention purposes, provided that such grants are limited to a grant date fair value of $100,000 or less, and further provided that no grants may be made from this pool to officers, directors or new hires; and (d) the Compensation Committee has authorized a pool of up to 200,000 shares per year under an “At Choice” program from which the CEO may approve equity awards to facilitate the retention, engagement and recognition of non-management employees (hourly employees). The size of each “At Choice” award is to be determined based on a matrix considering job level.
Equity Award Grant Policy
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Compensation Risk Assessment
| | | | | | Non-Equity | | | | | | | | | Incentive Plan | All Other | | | | | Salary | | Stock Awards | Compensation | Compensation | Total | | Name and Principal Position | Year | ($) | Bonus($)(1) | ($)(2) | ($)(3) | ($)(4) | ($) | | Jason Few | 2023 | 564,480 | — | 3,732,622 | 480,960 | 33,259 | 4,811,321 | | President and | 2022 | 542,577 | — | 1,306,250 | 584,220 | 25,754 | 2,458,801 | | Chief Executive Officer | 2021 | 512,211 | — | 2,641,264 | 130,000 | 301,772 | 3,585,248 | | Michael S. Bishop | 2023 | 434,650 | — | 848,324 | 235,671 | 16,099 | 1,534,743 | | Executive Vice President, | 2022 | 417,340 | — | 408,920 | 292,402 | 8,369 | 1,127,032 | | Chief Financial Officer and Treasurer | 2021 | 397,735 | — | 891,414 | 55,055 | 9,975 | 1,354,179 | | Joshua Dolger | 2023 | 369,083 | — | 652,557 | 171,532 | 14,425 | 1,207,597 | | Executive Vice President, | 2022 | 354,383 | 50,000 | 760,527 | 210,095 | 10,125 | 1,385,130 | | General Counsel and Corporate Secretary | 2021 | 146,884 | — | 34,996 | 35,063 | 6,146 | 223,089 | | Michael J. Lisowski | 2023 | 413,809 | — | 848,324 | 224,371 | 12,660 | 1,499,164 | | Executive Vice President and | 2022 | 393,297 | — | 408,920 | 278,382 | 8,933 | 1,089,532 | | Chief Operating Officer | 2021 | 349,808 | — | 891,414 | 48,813 | 8,598 | 1,298,633 | | Mark Feasel | 2023 | 377,354 | — | 848,324 | 204,604 | 15,759 | 1,446,041 | | Executive Vice President and Chief Commercial Officer | 2022 | 203,557 | 400,000 | 1,211,078 | 147,237 | 10,125 | 1,971,997 |
Potential Payments and Benefits Upon a Termination of Employment or a Change in Control of the Company for Mr. Few
Potential Payments and Benefits Upon a Termination of Employment or a Change in Control of the Company for Mr. Few
Potential Payments and Benefits Upon a Termination of Employment or a Change in Control of the Company for Mr. Few
| | Termination without | | Following Change | | | Cause or Resignation | Death or | in Control of | | | for Good Reason | Disability | the Company | | Executive Payments and Benefits(1) | ($)(2) | ($)(2) | ($)(2) | | Accelerated vesting: | | | | | Restricted Shares/Stock Units(3) | 693,120 | — | 1,294,326 | | Payment for annual incentive award(4) | 1,135,680 | — | 1,135,680 | | Continued Health Insurance Premiums(5) | 36,769 | — | 73,537 | | Severance payment(4) | 767,840 | — | 1,335,680 | | TOTAL | 2,633,409 | — | 3,839,223 |
Potential Payments and Benefits Upon a Termination of Employment or a Change in Control of the Company for Mr. Few
| (1) For purposes of this analysis, we have assumed that Mr. Few’s base salary is equal to $567,840, Mr. Few’s target annual bonus is $567,840 and the vesting of all of Mr. Few’s outstanding restricted stock unit awards (including RSUs and PSUs) as reflected in the Outstanding Equity Awards at 2023 Fiscal Year-End Table on page 53 of |
Potential Payments and Benefits Upon a Termination of Employment or a Change in Control of the Company for Mr. Few
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Potential Payments and Benefits Upon a Termination of Employment or a Change in Control of the Company for Mr. Few
| this Proxy Statement accelerated as of October 31, 2023. These amounts reflect the terms of his compensation arrangements as approved by the independent members of our Board. |
Potential Payments and Benefits Upon a Termination of Employment or a Change in Control of the Company for Mr. Few
| (2) Assumes Mr. Few’s date of termination of employment was October 31, 2023. The market price of our common stock on October 31, 2023 was $1.09 per share. In addition, we have assumed that the total payments and benefits to Mr. Few in connection with a change in control of the Company would not trigger any excise taxes under Section 4999 of the Code. |
Potential Payments and Benefits Upon a Termination of Employment or a Change in Control of the Company for Mr. Few
| (3) In the “Termination without Cause or Resignation for Good Reason” column, the value of the restricted stock unit awards and performance stock units on October 31, 2023 is based on the 418,925 restricted stock units and 79,317 performance stock units that had not vested as of October 31, 2023 at $1.09 per share. In the “Following Change in Control of the Company” column, the value of the restricted stock units and performance stock units on October 31, 2023 is based on the 489,065 restricted stock units and 698,390 performance stock units that had not vested as of October 31, 2023 at $1.09 per share. |
Potential Payments and Benefits Upon a Termination of Employment or a Change in Control of the Company for Mr. Few
| (4) In the event Mr. Few’s employment is terminated without cause or he resigns for good reason, he is eligible to receive a severance payment equal to (i) his then-current annual base salary as of the date of termination plus (ii) his target bonus for the year of termination plus (iii) a pro-rata portion of the annual bonus amount that would have been paid but for the termination plus (iv) reasonable relocation expenses in an amount not to exceed $200,000. In the event his employment is terminated without cause or he resigns for good reason in connection with a change in control of the Company, he is eligible to receive a severance payment equal to (i) two times the amount of his then-current annual base salary plus (ii) his target bonus for the year of termination plus (iii) a pro-rata portion of the annual bonus amount that would have been paid but for the termination plus (iv) reasonable relocation expenses in an amount not to exceed $200,000. |
Potential Payments and Benefits Upon a Termination of Employment or a Change in Control of the Company for Mr. Few
| (5) Mr. Few is eligible to receive payment of continued health insurance for a period of 12 months upon termination of employment without cause or resignation for good reason and 24 months if termination of employment without cause or resignation for good reason occurs in connection with a change in control of the Company. The value of continued health insurance is based on the medical and dental insurance rates in effect for all employees of the Company as of October 31, 2023. |
Potential Payments and Benefits Upon a Termination of Employment or a Change in Control of the Company for Mr. Bishop
Potential Payments and Benefits Upon a Termination of Employment or a Change in Control of the Company for Mr. Bishop
Potential Payments and Benefits Upon a Termination of Employment or a Change in Control of the Company for Mr. Bishop
| | Termination without | | Following Change | | | Cause or Resignation | Death or | in Control of | | | for Good Reason | Disability | the Company | | Executive Payments and Benefits(1) | ($)(2) | ($)(2) | ($)(2) | | Accelerated vesting: | | | | | Restricted Shares/Stock Units(3) | — | — | 333,392 | | Payment for annual incentive award(4) | — | — | 112,314 | | Continued Health Insurance Premiums(5) | 15,964 | — | 31,928 | | Severance payment(4) | 218,619 | — | 437,237 | | TOTAL | 234,582 | — | 914,870 |
Potential Payments and Benefits Upon a Termination of Employment or a Change in Control of the Company for Mr. Bishop
| (1) For purposes of this analysis, we have assumed that Mr. Bishop’s compensation is as follows: a base salary equal to $437,237 and annual incentive award payments paid for fiscal year 2011 in the amount of $59,850, for fiscal year 2012 in the amount of $79,835, for fiscal year 2013 in the amount of $89,670, for fiscal year 2014 in the amount of $94,500, for fiscal year 2015 in the amount of $83,430, for fiscal year 2016 in the amount of $78,750, for fiscal year 2017 in the amount of $125,520, for fiscal year 2018 in the amount of $0, for fiscal year 2019 in the amount of $196,250 (which amount also includes a $50,000 retention bonus), for fiscal year 2020 in the amount of $192,500, for fiscal year 2021 in the amount of $55,055, and for fiscal year 2022 in the amount of $299,402, and that Mr. Bishop had outstanding restricted stock unit awards as reflected in the Outstanding Equity Awards at 2023 Fiscal Year-End Table on page 53 of this Proxy Statement and target performance stock unit awards as reflected in the Fiscal Year 2023 Grants of Plan-Based Awards table on page 52 of this Proxy Statement. These amounts reflect the terms of his compensation arrangements as approved by the Compensation Committee. |
Potential Payments and Benefits Upon a Termination of Employment or a Change in Control of the Company for Mr. Bishop
| (2) Assumes Mr. Bishop’s date of termination of employment was October 31, 2023. The market price of our common stock on October 31, 2023 was $1.09 per share. |
Potential Payments and Benefits Upon a Termination of Employment or a Change in Control of the Company for Mr. Bishop
| (3) The value of the restricted stock units and performance stock units on October 31, 2023 is based on the 117,863 restricted stock units and 188,001 performance stock units that had not vested as of October 31, 2023 at $1.09 per share. |
Potential Payments and Benefits Upon a Termination of Employment or a Change in Control of the Company for Mr. Bishop
| (4) In the event Mr. Bishop’s employment is terminated without cause or he resigns for good reason, he is eligible to receive a severance payment equal to six months of his base salary. In the event his employment is terminated without cause or he resigns for good reason in connection with a change in control of the Company, he is eligible for 12 months of his base salary plus a bonus payment for the severance period equal to the average of the bonuses awarded to him since his appointment as our Chief Financial Officer and Treasurer. |
Potential Payments and Benefits Upon a Termination of Employment or a Change in Control of the Company for Mr. Bishop
| (5) Mr. Bishop is eligible to receive payment of continued health insurance for a period of six months in the event his employment is terminated without cause or he resigns for good reason and 12 months if his employment is terminated without cause or he resigns for good reason in connection with a change in control of the Company. The value of continued health insurance is based on the medical and dental insurance rates in effect for all employees of the Company as of October 31, 2023. |
Potential Payments and Benefits Upon a Termination of Employment or a Change in Control of the Company for Mr. Dolger
Potential Payments and Benefits Upon a Termination of Employment or a Change in Control of the Company for Mr. Dolger
Potential Payments and Benefits Upon a Termination of Employment or a Change in Control of the Company for Mr. Dolger
| | Termination without | | Following Change | | | Cause or Resignation | Death or | in Control of | | | for Good Reason | Disability | the Company | | Executive Payments and Benefits(1) | ($)(2) | ($)(2) | ($)(2) | | Accelerated vesting: | | | | | Restricted Shares/Stock Units(3) | — | — | 244,742 | | Payment for annual incentive award(4) | — | — | 122,579 | | Continued Health Insurance Premiums(5) | 15,964 | — | 31,928 | | Severance payment(4) | 185,641 | — | 371,281 | | TOTAL | 201,604 | — | 770,530 |
Potential Payments and Benefits Upon a Termination of Employment or a Change in Control of the Company for Mr. Dolger
| (1) For purposes of this analysis, we have assumed that Mr. Dolger’s compensation is as follows: a base salary equal to $371,281 and annual incentive award payments paid for fiscal year 2021 in the amount of $35,063 and for fiscal year 2022 in the amount of $210,095. Mr. Dolger became Executive Vice President and General Counsel in December 2021 (and Corporate Secretary in June 2021). Mr. Dolger had outstanding restricted stock unit awards as reflected in the Outstanding Equity Awards at 2022 Fiscal Year-End Table on page 53 of this Proxy Statement and target performance stock unit awards as reflected in the Fiscal Year 2023 Grants of Plan-Based Awards table on page 52 of this Proxy Statement. These amounts reflect the terms of his compensation arrangements as approved by the Compensation Committee. |
Potential Payments and Benefits Upon a Termination of Employment or a Change in Control of the Company for Mr. Dolger
| (2) Assumes Mr. Dolger’s date of termination of employment was October 31, 2022. The market price of our common stock on October 31, 2023 was $1.09 per share. |
Potential Payments and Benefits Upon a Termination of Employment or a Change in Control of the Company for Mr. Dolger
| (3) The value of the restricted stock units and performance stock units on October 31, 2023 is based on the 137,164 restricted stock units and 87,370 performance stock units that had not vested as of October 31, 2023 at $1.09 per share. |
Potential Payments and Benefits Upon a Termination of Employment or a Change in Control of the Company for Mr. Dolger
| (4) In the event Mr. Dolger’s employment is terminated without cause or he resigns for good reason, he is eligible to receive a severance payment equal to six months of his base salary. In the event his employment is terminated without cause or he resigns for good reason in connection with a change in control of the Company, he is eligible for 12 months of his base salary plus a bonus payment for the severance period equal to the average of the bonuses awarded to him since his appointment as our Interim General Counsel and Corporate Secretary (which occurred in June 2021). |
Potential Payments and Benefits Upon a Termination of Employment or a Change in Control of the Company for Mr. Dolger
| (5) Mr. Dolger is eligible to receive payment of continued health insurance for a period of six months in the event his employment is terminated without cause or he resigns for good reason and 12 months if his employment is terminated without cause or he resigns for good reason in connection with a change in control of the Company. The value of continued health insurance is based on the medical and dental insurance rates in effect for all employees of the Company as of October 31, 2023. |
Potential Payments and Benefits Upon a Termination of Employment or a Change in Control of the Company for Mr. Dolger
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Potential Payments And Benefits Upon A Termination Of Employment Or A Change In Control Of The Company For Mr. Lisowski
Potential Payments And Benefits Upon A Termination Of Employment Or A Change In Control Of The Company For Mr. Lisowski
Potential Payments And Benefits Upon A Termination Of Employment Or A Change In Control Of The Company For Mr. Lisowski
| | Termination without | | Following Change | | | Cause or Resignation | Death or | in Control of | | | for Good Reason | Disability | the Company | | Executive Payments and Benefits(1) | ($)(2) | ($)(2) | ($)(2) | | Accelerated vesting: | | | | | Restricted Shares/Stock Units(3) | — | — | 333,392 | | Payment for annual incentive award(4) | — | — | 161,486 | | Continued Health Insurance Premiums(5) | 18,271 | — | 36,542 | | Severance payment(4) | 208,136 | — | 416,272 | | TOTAL | 226,407 | — | 947,692 |
Potential Payments And Benefits Upon A Termination Of Employment Or A Change In Control Of The Company For Mr. Lisowski
| (1) For purposes of this analysis, we have assumed that Mr. Lisowski’s compensation is as follows: a base salary equal to $416,272, a $156,250 annual incentive award payment in fiscal year 2019 (the year of his appointment as an executive officer of the Company), which amount includes a $30,000 retention bonus, a $162,500 annual incentive award payment in fiscal year 2020, a $48,813 annual incentive award payment in fiscal year 2021, and a $278,382 annual incentive award payment in fiscal year 2022. Mr. Lisowski has outstanding restricted stock unit awards as reflected in the Outstanding Equity Awards at 2023 Fiscal Year-End Table on page 53 of this Proxy Statement and target performance stock unit awards as reflected in the Fiscal Year 2023 Grants of Plan-Based Awards table on page 52 of this Proxy Statement. These amounts reflect the terms of his compensation arrangements approved by the Compensation Committee. |
Potential Payments And Benefits Upon A Termination Of Employment Or A Change In Control Of The Company For Mr. Lisowski
| (2) Assumes Mr. Lisowski’s date of termination of employment was October 31, 2023. The market price of our common stock on October 31, 2023 was $1.09 per share. |
Potential Payments And Benefits Upon A Termination Of Employment Or A Change In Control Of The Company For Mr. Lisowski
| (3) The value of the restricted stock units and performance stock units on October 31, 2023 is based on the 117,863 restricted stock units and 188,001 performance stock units that had not vested as of October 31, 2023 at $1.09 per share. |
Potential Payments And Benefits Upon A Termination Of Employment Or A Change In Control Of The Company For Mr. Lisowski
| (4) In the event Mr. Lisowski’s employment is terminated without cause or he resigns for good reason, he is eligible to receive a severance payment equal to six months of his base salary. In the event his employment is terminated without cause or he resigns for good reason in connection with a change in control of the Company, he is eligible for 12 months of his base salary plus a bonus payment for the severance period equal to the average of the bonuses awarded to him since his appointment as our Chief Operating Officer. |
Potential Payments And Benefits Upon A Termination Of Employment Or A Change In Control Of The Company For Mr. Lisowski
| (5) Mr. Lisowski is eligible to receive payment of continued health insurance for a period of six months in the event his employment is terminated without cause or he resigns for good reason and 12 months if his employment is terminated without cause or he resigns for good reason in connection with a change in control of the Company. The value of continued health insurance is based on the medical and dental insurance rates in effect for all employees of the Company as of October 31, 2023. |
Potential Payments and Benefits Upon a Termination of Employment or a Change in Control of the Company for Mr. Feasel
Potential Payments and Benefits Upon a Termination of Employment or a Change in Control of the Company for Mr. Feasel
Potential Payments and Benefits Upon a Termination of Employment or a Change in Control of the Company for Mr. Feasel
| | Termination without | | Following Change | | | Cause or Resignation | Death or | in Control of | | | for Good Reason | Disability | the Company | | Executive Payments and Benefits(1) | ($)(2) | ($)(2) | ($)(2) | | Accelerated vesting: | | | | | Restricted Shares/Stock Units(3) | — | — | 334,110 | | Payment for annual incentive award(4) | — | — | 147,237 | | Continued Health Insurance Premiums(5) | 18,384 | — | 36,769 | | Severance payment(4) | 189,800 | — | 379,600 | | TOTAL | 208,184 | | 897,716 |
Potential Payments and Benefits Upon a Termination of Employment or a Change in Control of the Company for Mr. Feasel
| (1) For purposes of this analysis, we have assumed that Mr. Feasel’s compensation includes a base salary equal to $379,600 and annual incentive award payments paid for fiscal year 2022 in the amount of $147,237. Mr. Feasel has outstanding restricted stock unit awards as reflected in the Outstanding Equity Awards at 2023 Fiscal Year-End Table on page 53 of this Proxy Statement and target performance stock unit awards as reflected in the Fiscal Year 2023 Grants of Plan-Based Awards table on page 52 of this Proxy Statement. These amounts reflect the terms of his compensation arrangements approved by the Compensation Committee. |
Potential Payments and Benefits Upon a Termination of Employment or a Change in Control of the Company for Mr. Feasel
| (2) Assumes Mr. Feasel’s date of termination of employment was October 31, 2023. The market price of our common stock on October 31, 2023 was $1.09 per share. |
Potential Payments and Benefits Upon a Termination of Employment or a Change in Control of the Company for Mr. Feasel
| (3) The value of the restricted stock units and performance stock units on October 31, 2023 is based on the 191,746 restricted stock units and 114,777 performance stock units that had not vested as of October 31, 2023 at $1.09 per share. |
Potential Payments and Benefits Upon a Termination of Employment or a Change in Control of the Company for Mr. Feasel
| (4) In the event Mr. Feasel’s employment is terminated without cause or he resigns for good reason, he is eligible to receive a severance payment equal to six months of his base salary. In the event his employment is terminated without cause or he resigns for good reason in connection with a change in control of the Company, he is eligible for 12 months of his base salary plus a bonus payment for the severance period equal to the average of the bonuses awarded to him since his appointment as our Chief Commercial Officer (which occurred in April 2022). |
Potential Payments and Benefits Upon a Termination of Employment or a Change in Control of the Company for Mr. Feasel
| (5) Mr. Feasel is eligible to receive payment of continued health insurance for a period of six months in the event his employment is terminated without cause or he resigns for good reason and 12 months if his employment is terminated without cause or he resigns for good reason in connection with a change in control of the Company. The value of continued health insurance is based on the medical and dental insurance rates in effect for all employees of the Company as of October 31, 2023. |
Potential Payments and Benefits Upon a Termination of Employment or a Change in Control of the Company for Mr. Feasel
| 58 | 2024 Proxy Statement | |
Potential Payments and Benefits Upon a Termination of Employment or a Change in Control of the Company for Mr. Feasel
CEO Pay Ratio
CEO Pay Ratio — 43:1
CEO Pay Ratio — 43:1 Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), the SEC adopted a rule requiring annual disclosure of the ratio of the median employee’s annual total compensation to the total annual compensation of the principal executive officer (“PEO”). Our Company’s PEO is Mr. Few. The purpose of this disclosure is to provide a measure of the equitability of pay within the organization. The Compensation Committee believes its compensation philosophy and program must be fair, competitive and internally equitable to motivate our executives to perform in ways that enhance stockholder value. As a result of the rules under the Dodd-Frank Act, the Compensation Committee monitors the relationship between the pay of our executive officers and the pay of our non-executive employees. The paragraphs that follow describe our methodology and the resulting CEO Pay Ratio. As permitted under the SEC rules, we are using the same median employee as was identified for purposes of our fiscal year 2022 CEO pay ratio, as we believe the changes in our employee population and compensation arrangements have not significantly impacted our pay ratio disclosure. To identify our median employee in fiscal year 2022, we calculated the annual target total direct compensation for fiscal year 2022 of each employee as of October 31, 2022 (including all employees, whether employed on a full-time, part-time, seasonal or temporary basis). For these purposes, annual target total direct compensation included each employee’s (a) base salary for the fiscal year, (b) target cash incentive opportunity and (c) the grant date value of equity awards received during the fiscal year. We selected this “consistently applied compensation measure,” or CACM, because it reflects our primary compensation elements across our employee population. All amounts were annualized for permanent employees who did not work for the entire fiscal year. We did not apply any cost-of-living adjustment as part of the calculation. Further, in identifying the median employee, we converted compensation amounts paid in foreign currencies based on the applicable exchange rate as of October 31, 2022. To identify our median compensated employee for fiscal year 2022, we: (i) calculated the annual target total direct compensation described above for each of our employees, (ii) ranked all of our employees (other than the CEO) by such compensation from lowest to highest and (iii) identified the employee who ranked number 256 on the list of 513 employees. We then calculated the annual fiscal year 2023 total compensation for our previously-identified median compensated employee using the same methodology used for our CEO as set forth the in the Fiscal Year 2023 Summary Compensation Table. Next, in accordance with the rules set forth in Item 402(u) of Regulation S-K promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”), we calculated the median employee’s annual total compensation for fiscal year 2023 in the same manner as the CEO’s annual total compensation was calculated in the Fiscal Year 2023 Summary Compensation Table. Our median employee’s annual total compensation for fiscal year 2023 was $111,123. Our CEO’s annual total compensation, as reported in the Fiscal Year 2023 Summary Compensation Table, was $4,811,321. Therefore, our CEO Pay Ratio for 2023 was approximately 43 to 1.
CEO Pay Ratio — 43:1
| | 2024 Proxy Statement | 59 |
CEO Pay Ratio — 43:1
Pay Versus Performance Disclosure In 2022, the SEC adopted rules requiring us to disclose information that compares our NEO compensation to our prescribed financial performance measures. The table below sets forth our pay versus performance disclosure in accordance with Item 402(v) of Regulation S-K. The Compensation Committee did not consider the pay versus performance disclosure below in making its pay decisions for any of the years shown.
CEO Pay Ratio — 43:1
| | | | | | Value of Initial Fixed $100 | | | | | | | | | | Investment Based On: | | | | | | | | Average | | | | | | | | | | Summary | Average | | | | | | | Summary | | Compensation | Compensation | | | | | | Fiscal | Compensation | Compensation | Table Total for | Actually Paid to | | Peer | | | | Year | Table Total for | Actually Paid to | Non-PEO NEOs | Non-PEO NEOs | Company | Group TSR | Net Loss ($in | Revenue ($) | | (a) | PEO ($) (b) | PEO ($) (b)(c) | ($) (d) | ($) (d)(e) | TSR ($) (f) | ($) (g) | millions) (h) | (i) | | 2023 | 4,811,321 | 1,442,474 | 1,421,886 | 660,598 | 55 | 71 | (108,056) | 123,394 | | 2022 | 2,458,801 | (3,687,206) | 1,393,423 | 581,404 | 156 | 120 | (147,232) | 130,484 | | 2021 | 3,585,248 | 11,728,338 | 1,235,462 | 2,386,582 | 400 | 164 | (101,025) | 69,585 |
CEO Pay Ratio — 43:1
| (a) This statement includes three fiscal years (2021, 2022, and 2023) rather than five because this is a transition year for the new regulation. |
CEO Pay Ratio — 43:1
| (b) The principal executive officer (“PEO”) is Jason Few for all years shown. |
CEO Pay Ratio — 43:1
| (c) Compensation actually paid (“CAP”) to our PEO reflects the respective amounts set forth in column (b) of the table above, adjusted as set forth in the table below. The assumptions used to calculate the fair values did not differ materially from the assumptions used to calculate the fair values as of the grant dates. |
CEO Pay Ratio — 43:1
| Fiscal Year | 2021 | 2022 | 2023 | | Summary Compensation Table (“SCT”) Total Compensation ($) | 3,585,248 | 2,458,801 | 4,811,321 | | Less: Stock and Option Award Values Reported in SCT for the Covered Year ($) | (2,641,264) | (1,306,250) | (3,732,622) | | Plus: Fair Value for Stock and Option Awards Granted in the Covered Year that are Outstanding and Unvested at End of Year ($) | 4,073,169 | 434,375 | 900,689 | | Change in Fair Value of Outstanding Unvested Stock and Option Awards from Prior Years ($) | 6,657,887 | (1,833,203) | (142,382) | | Fair Value as of Vesting Date for Awards Granted that Vested in Same Year ($) | — | — | — | | Change in Fair Value of Stock and Option Awards from Prior Years that Vested in the Covered Year ($) | 53,298 | (3,440,929) | (394,532) | | Less: Fair Value of Stock and Option Awards Forfeited during the Covered Year ($) | — | — | — | | Compensation Actually Paid ($) | 11,728,338 | (3,687,206) | 1,442,474 |
CEO Pay Ratio — 43:1
| (d) The following Non-PEO NEOs are included in the average figures shown: 2023: Mr. Bishop, Mr. Dolger, Mr. Lisowski and Mr. Feasel, 2022: Mr. Bishop, Mr. Dolger, Mr. Lisowski and Mr. Feasel, and 2021: Mr. Bishop, Mr. Dolger, Mr. Lisowski, Mr. Leo and Ms. Arasimowicz. |
CEO Pay Ratio — 43:1
| (e) CAP to our non-PEO NEOs reflects the respective amounts set forth in column (d) of the table above, adjusted as set forth in the table below. The assumptions used to calculate the fair values did not differ materially from the assumptions used to calculate the fair values as of the grant dates. |
CEO Pay Ratio — 43:1
| Fiscal Year | 2021 | 2022 | 2023 | | Non-PEO NEOs | See column (d) note above | See column (d) note above | See column (d) note above | | Average SCT Total Compensation ($) | 1,235,462 | 1,393,423 | 1,421,886 | | Less: Average Stock and Option Award Values Reported in SCT for the Covered Year ($) | (654,102) | (697,361) | (799,382) | | Plus: Average Fair Value for Stock and Option Awards Granted in the Covered Year ($) | 939,440 | 256,623 | 187,271 | | Average Change in Fair Value of Outstanding Unvested Stock and Option Awards from Prior Years ($) | 777,820 | (336,736) | (87,520) | | Average Fair Value as of Vesting Date for Awards Granted that Vested in Same Year ($) | — | — | — | | Average Change in Fair Value of Stock and Option Awards from Prior Years that Vested in the Covered Year ($) | 87,963 | (34,544) | (61,657) | | Less: Average Fair Value of Stock and Option Awards Forfeited during the Covered Year ($) | — | — | — | | Average Compensation Actually Paid ($) | 2,386,582 | 581,404 | 660,598 |
CEO Pay Ratio — 43:1
(f) Represents our TSR calculated from October 31, 2020 for the measurement periods ending October 31 of each of 2021, 2022 and 2023, respectively. (g) Represents the peer group TSR calculated from October 31, 2020 for the measurement periods ending on October 31 of each of 2021, 2022 and 2023, respectively. The peer group used for this purpose is the following published industry index: NASDAQ Clean Edge Green Energy Total Return Index. (h) Reflects “Net Loss” in the Company’s audited financial statements included in the Company’s Annual Reports on Form 10-K for each of the years ended October 31, 2021, 2022 and 2023.
CEO Pay Ratio — 43:1
| 60 | 2024 Proxy Statement | |
CEO Pay Ratio — 43:1
(i) The Company-selected measure is “Revenue” in the Company’s audited financial statements included in the Company’s Annual Reports on Form 10-K for each of the years ended October 31, 2021, 2022 and 2023.
Most Important Measures to Determine Fiscal Year 2023 Compensation Actually Paid
Most Important Measures to Determine Fiscal Year 2023 Compensation Actually Paid As described in greater detail in the section above entitled “Compensation Discussion and Analysis,” the Company’s executive compensation program reflects a variable pay-for-performance philosophy. The metrics that the Company uses for both our long-term and short-term incentive awards are selected to incentivize our NEOs. The five operating performance measures listed below represent the most important metrics we used to link CAP to financial performance for fiscal year 2023, as further described in the section above entitled “Compensation Discussion and Analysis.”