DEF 14A of Mayville Engineering Company, Inc.
Filed Mar 6, 2024 · FY20230001558370-24-002615
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS The Company’s bylaws provide that the directors shall be divided into three classes, with the classes to be as nearly equal in number as possible, and with the directors serving three-year terms. At the Annual Meeting, the shareholders will elect three directors to hold office until the 2027 annual meeting of shareholders and until their respective successors are duly elected and qualified. Unless shareholders otherwise specify, the shares represented by the proxies received will be voted in favor of the election as directors of the three persons named as nominees herein. The Board has no reason to believe that the listed nominees will be unable or unwilling to serve as directors if elected. However, in the event that any nominee should be unable to serve or for good cause will not serve, the shares represented by proxies received will be voted for another nominee selected by the Board. Each director will be elected by a plurality of the votes cast at the Annual Meeting, assuming a quorum is present. For this purpose, “plurality” means that the nominees receiving the largest number of votes will be elected as directors. Any shares not voted at the Annual Meeting, whether due to abstentions, broker non-votes or otherwise, will have no impact on the election of the directors. Votes will be tabulated by an inspector of elections appointed by the Company. The Board is presently composed of seven members, six of whom are non-employee, independent directors. The following sets forth certain information, as of February 16, 2024, about the Board’s nominees for election at the Annual Meeting and each director of the Company whose term will continue after the Annual Meeting.
Nominees for Election at the Annual Meeting
Nominees for Election at the Annual Meeting Terms expiring at the 2027 Annual Meeting Allen J. Carlson, 73, has been a member of the Board since January 2016. Mr. Carlson is currently employed by the University of Florida’s College of Engineering, serves as a director of Husco International Inc. and on the Board of Regents of the Milwaukee School of Engineering. Mr. Carlson previously served as a director and the Chief Executive Officer of Sun Hydraulics Corporation from 2000 to 2016. From 1996 to 2000 he was Sun’s senior marketing director. From October 1977 to March 1996, Mr. Carlson held various engineering, marketing and management positions for Vickers Incorporated, a wholly owned subsidiary of Trinova Corporation. Mr. Carlson earned his bachelor’s degree from the Milwaukee School of Engineering and is a graduate of the advanced management program at the Harvard Business School. We believe that Mr. Carlson’s over 40 years of experience in the manufacturing industry and nearly 16 years as the Chief Executive Officer of a public company qualifies him to serve as a member of the Board. Timothy L. Christen, 65, has been a member of the Board since June 2016 and has served as our non-executive Chair of the Board since July 2022. He also serves as a director of Expensify, a cloud-based expense management platform, since 2021 and CPA.com, a provider of innovative strategies and solutions to accounting firms and their clients, since 2018. Mr. Christen is Chairman Emeritus of Baker Tilly US, LLP, a national public accounting firm where he served as a partner from 1990 to 2016 and as Chairman and Chief Executive Officer from 1999 to 2016, and Baker Tilly International Ltd., a top ten global accounting network where he served as Chairman from 2017 to 2021. He was appointed as a trustee of the Financial Accounting Foundation (FAF) as of January 1, 2021. Mr. Christen also served as director of the American Institute of CPAs from 2014 to 2017, serving as Chairman from 2015 to 2016. He earned his bachelor’s degree in Accounting from the University of Wisconsin-Platteville and is a licensed Certified Public Accountant. We believe Mr. Christen’s forty-plus years of accounting expertise and substantial strategy, risk and management experience over his 16 years as the Chief Executive Officer of a national public accounting firm qualifies him to serve as a member of the Board. Jennifer J. Kent, 52, has been a member of the Board since December 2020. She has served as Chief Legal Officer of Kohl’s Corporation, a retailer, since February 2023. Prior to serving in her current position, Ms. Kent was the Executive Vice President and Chief People & Legal Officer of Quad/Graphics, Inc., a marketing experience company, since January 2022 and served in that role since June 2015 under its previous title of Executive Vice President of Administration, General Counsel & Secretary. Ms. Kent joined Quad in August 2010 as Assistant General Counsel and was promoted to Vice President and General Counsel in December 2013. Prior thereto, Ms. Kent held various positions in motorcycle manufacturer Harley-Davidson Motor Company’s legal department from 2003 to 2010, including Associate General Counsel. Ms. Kent earned her law degree from Stanford University and a bachelor’s degree in journalism from the University of Iowa. We believe Ms. Kent’s over 20 years of broad business and leadership experience, including managing legal, compliance, human resources, corporate communications, government affairs, real estate, and safety and environmental management functions at a public company, qualifies her to serve on the Board. THE BOARD RECOMMENDS THE FOREGOING NOMINEES FOR ELECTION AS DIRECTORS AND URGES EACH SHAREHOLDER TO VOTE “FOR” SUCH NOMINEES. SHARES OF THE COMPANY’S COMMON STOCK REPRESENTED BY EXECUTED BUT UNMARKED PROXIES WILL BE VOTED “FOR” SUCH NOMINEES.
Directors Continuing in Office
Directors Continuing in Office Jagadeesh (Jag) A. Reddy, 52, joined the Company as President and Chief Executive Officer, as well as a director, in July 2022. Prior to joining us, Mr. Reddy served as a member of the senior leadership team at W.R. Grace & Co. since 2018, most recently as the head of its Strategy and Growth function, as well as the Managing Director of its Advanced Refining Technologies hydroprocessing joint venture with Chevron. Before joining W.R. Grace & Co., he served as Vice President and General Manager, Water Technologies Strategic Business Unit from 2014 to 2017, and Vice President, Corporate Strategy from 2012 to 2014 at Pentair plc. Previously, Mr. Reddy held leadership roles of increasing responsibility at ITT Corporation and its spin-off, Xylem Inc. Mr. Reddy also held product management and mergers and acquisitions roles at Danaher Corporation and United Technologies. He started his career in manufacturing operations at Denso Corporation. Mr. Reddy earned a master’s of business administration degree in Finance and Strategy from the Kellogg School of Management and a master’s degree in Engineering Management from the McCormick School of Engineering, both at Northwestern University. He also holds a master’s degree in Industrial Engineering from the University of Tennessee and a bachelor’s degree in Mechanical Engineering from Sri Venkateswara University in India. We believe that Mr. Reddy is qualified to serve as a director of our company because he has extensive senior management experience and serves as our President and Chief Executive Officer. Jay O. Rothman, 64, has been a member of the Board since July 2008. He has served as President of the Universities of Wisconsin since June 2022. Prior to serving in his current position, Mr. Rothman served as the Chairman and Chief Executive Officer of Foley & Lardner LLP, a national law firm, from June 2011 to May 2022. Mr. Rothman serves as director of Quad/Graphics, Inc. Mr. Rothman received a bachelor’s degree from Marquette University in 1982 and his law degree from Harvard Law School in 1985. We believe that Mr. Rothman’s career as an executive, as well as a business attorney, qualifies him to serve as a member of the Board. Terms expiring at the 2026 Annual Meeting Steven L. Fisher, 69, has been a member of the Board since November 2013. He has previously served as an executive at Caterpillar Inc., where he was a Division Chief Financial Officer from 1991 to 1998 and Vice President from 2005 to 2014. Mr. Fisher currently serves as a member of the advisory board of Palmer Johnson Power Systems. Mr. Fisher received a bachelor’s degree in Accounting from Bradley University and is a licensed Certified Public Accountant. We believe Mr. Fisher’s substantial experience as an executive of a public company in the manufacturing industry and accounting expertise qualifies him to serve on the Board. Robert L. McCormick, 63, has been a member of the Board since December 2022. He has served as President and Chief Executive Officer and as a director of Douglas Dynamics, Inc., a manufacturer and upfitter of commercial work truck attachments and equipment, since January 2019. Prior to serving in his current position, Mr. McCormick served as Douglas Dynamics’ Chief Operating Officer from 2017 to 2019 and Executive Vice President and Chief Financial Officer from 2004 to 2017. Previously, Mr. McCormick served as President and Chief Executive Officer of Xymox Technology Inc. from 2001 to 2004. Prior to that, he served in various capacities in the Newell Rubbermaid Corporation, including President from 2000 to 2001 and Vice President Group Controller from 1997 to 2000. Mr. McCormick graduated from the University of Wisconsin - Whitewater with a bachelor’s degree in Accounting in 1982 and received his CPA certificate in 1984. Since 2017, he has been a member of the Board of Directors for nonprofit organization The Parenting Network. We believe that Mr. McCormick’s over 40 years of experience in the manufacturing industry and his years as the Chief Executive Officer or Chief Financial Officer of a public company qualifies him to serve as a member of the Board.
2023 DIRECTOR COMPENSATION
2023 DIRECTOR COMPENSATION Directors who are employees of the Company receive no compensation for service as members of either the Board or committees thereof. Directors who are not employees of the Company receive $8,000 for each meeting of our Board attended, $2,000 for each meeting of our Board committees attended and $1,000 for each telephonic meeting of our Board committees joined. The non-executive Chair of the Board also receives an annual retainer of $50,000, half of which is payable in cash and the other half of which is payable in restricted stock units, and the chairperson of each of the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee receive an annual cash retainer of $10,000. In addition, our non-employee directors also receive an annual equity grant of restricted stock units with a target grant date value of $125,000. The restricted stock units generally vest on the first anniversary of the grant date (or the next annual meeting of the shareholders, if earlier), contingent on the non-employee director’s continued service until the vesting date or earlier death or disability. Our non-employee directors are permitted to defer the settlement of their restricted stock units, and any awards deferred are reflected in the Stock Awards column of the table below in the year granted. We also reimburse all ordinary and necessary expenses incurred in the conduct of our business. The following table provides information regarding the compensation of our non-employee directors during 2023:
2023 DIRECTOR COMPENSATION
| | Fees Earned or | Stock | Total | | Name | Paid in Cash ($) | Awards(1) | ($) | | Allen J. Carlson | $46,000 | $125,012 | $171,012 | | Timothy L. Christen | $71,000 | $150,025 | $221,025 | | Steven L. Fisher | $58,000 | $125,012 | $183,012 | | Jennifer J. Kent | $54,000 | $125,012 | $179,012 | | Robert L. McCormick | $44,000 | $125,012 | $169,012 | | Patrick D. Michels(2) | $17,000 | $— | $17,000 | | Jay O. Rothman | $52,000 | $125,012 | $177,012 |
2023 DIRECTOR COMPENSATION
| (1) The amounts reported in this column represent the aggregate grant date fair value of director restricted stock unit awards granted to directors on April 18, 2023, as computed in accordance with Financial Accounting Standard Board Accounting Standards Codification Topic 718. These amounts reflect the accounting cost that will be incurred by the Company over the requisite service period of one-year, beginning at the date of grant, for these restricted stock units and do not represent the actual economic value that may be realized by the non-employee director. For information on the assumptions used to calculate the grant date fair value of the restricted stock units, please see Note 18 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023. Pursuant to Securities and Exchange Commission rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. Mr. Christen had 11,666 unvested restricted stock units outstanding as of December 31, 2023 and each other current non-employee director had 9,721 unvested restricted stock units outstanding as of December 31, 2023. |
2023 DIRECTOR COMPENSATION
| (2) Mr. Michels retired from the Board on April 18, 2023. |
Summary Compensation Table for 2023
Summary Compensation Table for 2023 The following table provides information regarding the compensation of our named executive officers during 2023 and 2022.
Summary Compensation Table for 2023
| | | | | | | Non-equity | Non-qualified | | | | | | | | Stock | Option | incentive plan | deferred | All other | | | | | Salary | Bonus | awards | awards | compensation | compensation | compensation | | | Name and Principal Position | Year | ($) | ($) | ($)(1) | ($)(2) | ($)(3) | earnings ($) | ($)(4) | Total ($) | | Jag A. Reddy | 2023 | 695,250 | — | 825,000 | 825,000 | 567,880 | — | 43,196 | 2,956,326 | | President and Chief Executive Officer(5) | 2022 | 295,962 | — | 650,000 | — | 286,470 | — | 37,173 | 1,269,605 | | | 2021 | | | | | | | | | | Todd M. Butz | 2023 | 473,800 | — | 375,000 | 375,000 | 464,400 | — | 9,900 | 1,698,100 | | Chief Financial Officer | 2022 | 460,000 | — | 375,000 | 375,000 | 468,538 | — | 7,674 | 1,686,212 | | Ryan F. Raber | 2023 | 473,800 | — | 415,000 | 415,000 | 387,000 | — | 9,900 | 1,700,700 | | Executive Vice President – Strategy, Sales & Marketing | 2022 | 460,000 | — | 415,000 | 415,000 | 390,448 | — | 7,674 | 1,688,122 | | Randall P. Stille | 2023 | 378,230 | — | 375,000 | 375,000 | — | — | 870,031 | 1,998,261 | | Former Chief Operating Officer(5) | | | | | | | | | |
Summary Compensation Table for 2023
| (1) The Stock Awards column represents the aggregate grant date fair value, computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“ASC Topic 718”), for restricted stock units that were granted pursuant to the Mayville Engineering Company, Inc. 2019 Omnibus Incentive Plan (the “Omnibus Plan”). Information about the assumptions that we used when valuing equity awards is set forth in our Annual Report on Form 10-K in Note 18 to the Consolidated Financial Statements for our fiscal year ended December 31, 2023. Pursuant to Securities and Exchange Commission rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. |
Summary Compensation Table for 2023
| (2) The Option Awards column represents the aggregate grant date fair value, computed in accordance with ASC Topic 718, for stock options that were granted pursuant to the Omnibus Plan. Information about the assumptions that we used when valuing equity awards is set forth in our Annual Report on Form 10-K in Note 18 to the Consolidated Financial Statements for our fiscal year ended December 31, 2023. Pursuant to Securities and Exchange Commission rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. |
Summary Compensation Table for 2023
| (3) The amounts in this column for 2023 represent annual cash bonuses earned on a discretionary basis for 2023 and paid in 2024 as described below under the heading “Incentive Compensation Plans – 2023 Annual Cash Bonus.” |
Summary Compensation Table for 2023
| (4) The amounts in this column for 2023 represent, for Mr. Reddy, reimbursement of temporary housing, travel and relocation expenses in the amount of $33,896, and $9,300 credited by us to the named executive officer’s account under our 401(k) Plan; for Mr. Butz and Mr. Raber, amounts credited by us to the named executive officer’s account under our 401(k) Plan for 2023; and for Mr. Stille, severance payment of |
Summary Compensation Table for 2023
| $855,000, $7,343 credited by us to the named executive officer’s account under our 401(k) Plan, earned and unused vacation paid of $6,650 and reimbursement of company travel of $1,038. |
Summary Compensation Table for 2023
| (5) Mr. Stille left our company effective as of November 3, 2023 |
401(k) Plan; ESOP; Nonqualified Deferred Compensation
401(k) Plan; ESOP; Nonqualified Deferred Compensation
Outstanding Equity Awards as of December 31, 2023
Outstanding Equity Awards as of December 31, 2023 The following table contains information concerning equity awards held by our named executive officers that were outstanding as of December 31, 2023.
Outstanding Equity Awards as of December 31, 2023
| | Option Awards | | | | Stock Awards | | | | | | | | | | | | Equity | Equity | | | | | | | | | Incentive | Incentive | | | | | | | | | Plan | Plan | | | | | | | | | Awards; | Awards; | | | | | | | | | Number | Market | | | | | | | | | of | or Payout | | | | | | | | | Unearned | Value of | | | | | | | | | Shares, | Unearned | | | | | | | | | Units or | Shares, | | | Number of | Number of | | | Number | Market | Other | Units or | | | Securities | Securities | | | of Shares | Value of | Rights | Other | | | Underlying | Underlying | Option | | of Stock | Shares of | That | Rights | | | Unexercised | Unexercised | Exercise | Option | That | Stock That | Have Not | That | | | Options (#) | Options (#) | Price | Expiration | Have Not | Have Not | Vested | Have Not | | Name | Exercisable | Unexercisable | ($) | Date | Vested (#) | Vested(1)($) | (#) | Vested ($) | | Jagadeesh A. Reddy | — | 88,901(2) | $16.22 | 2/28/2033 | | | | | | | | | | | 114,966(3) | 1,657,810 | — | — | | Todd M. Butz | — | 40,410(2) | $16.22 | 2/28/2033 | | | | | | | 34,982 | 34,981(4) | $10.32 | 2/28/2032 | | | | | | | 39,683 | — | $14.01 | 2/28/2031 | | | | | | | 88,029 | — | $7.12 | 2/27/2030 | | | | | | | 39,126 | — | $17.00 | 5/08/2029 | | | | | | | | | | | 41,288(5) | 595,373 | — | — | | Ryan F. Raber | — | 44,720(2) | $16.22 | 2/28/2033 | | | | | | | 38,713 | 38,713(4) | $10.32 | 2/28/2032 | | | | | | | 43,291 | — | $14.01 | 2/28/2031 | | | | | | | 58,979 | — | $7.12 | 2/27/2030 | | | | | | | 27,594 | — | $17.00 | 5/08/2029 | | | | | | | | | | | 45,692(6) | 658,879 | — | — | | Randall P. Stille | 33,583 | — | $10.32 | 2/28/2032 | | | | | | | 32,468 | — | $14.01 | 2/28/2031 | | | | | | | 52,817 | — | $7.12 | 2/27/2030 | | | | | | | | | | | — | — | — | — |
Outstanding Equity Awards as of December 31, 2023
| (1) Market value computed by multiplying the number of restricted stock units that have not vested by $14.42, which was the closing price of a share of our Common Stock on the last trading day of 2023. |
Outstanding Equity Awards as of December 31, 2023
| (2) The options will vest 50% on each of February 28, 2024 and February 28, 2025. |
Outstanding Equity Awards as of December 31, 2023
| (3) 25,432 restricted stock units will vest each on February 28, 2024 and February 28, 2025; and 32,051 restricted stock units will vest each on July 19, 2024 and 2025. |
Outstanding Equity Awards as of December 31, 2023
| (4) The options will vest on February 28, 2024. |
Outstanding Equity Awards as of December 31, 2023
| (5) 29,728 restricted stock units will vest on February 28, 2024; and 11,560 restricted stock units will vest on February 28, 2025. |
Outstanding Equity Awards as of December 31, 2023
| (6) 32,899 restricted stock units will vest on February 28, 2024; and 12,793 restricted stock units will vest on February 28, 2025. |