DEF 14A of Phinia Inc.
Filed Mar 27, 2024 · FY20230001628280-24-013322
Aligning Board Composition with Oversight of Long-term Strategy
| Pay Versus Performance | 67 | | Pay Versus Performance Table | 67 | | Pay Versus Performance Relationship Descriptions | 68 | | Proposal 3: Advisory Approval of the Frequency of Future Advisory Votes on the Compensation of Our Named Executive Officers | 70 | | Proposal 4: Ratification of the Appointment of PricewaterhouseCoopers LLP as Our Independent Registered Public Accounting Firm | 71 | | Independent Auditor’s Fees | 72 | | Pre-Approval Policy of Services Performed by Independent Auditors | 72 | | Audit Committee Report | 73 | | Beneficial Ownership of Company Stock | 74 | | Directors and Executive Officers | 74 | | Certain Other Beneficial Owners | 75 | | Equity Compensation Plan Information | 75 | | Annual Meeting Information | 76 | | 2024 Annual Meeting | 76 | | Voting | 77 | | Proxy Materials | 79 | | Shareholder Proposals for the 2025 Annual Meeting | 80 | | Annex A: Non-GAAP Financial Measures | 81 |
Our Director Nominees
Our Director Nominees Our Board brings extensive experience and expertise across multiple disciplines. Each member of the Board was chosen for his or her skills and experiences, including with respect to: the transportation industry; manufacturing and operations; capital markets, corporate finance, investment, and legal and risk management; executing on restructuring programs; adapting to changing market conditions; demonstrated success in acquisitions and integrations across global commercial vehicle, industrial, light vehicle, and aftermarket industries; excellence in building culture, including fostering diversity and inclusion; and general business acumen.
Our Director Nominees
| | | | | | Samuel R. Chapin Independent Retired, Former Executive Vice Chairman, Global Corporate and Investment Banking, Bank of America Merrill Lynch Age: 66 Committees: CC, CGC | Brady D. Ericson President and Chief Executive Officer, PHINIA Inc. Age: 52 Committees: None | Robin Kendrick Independent President and Chief Executive Officer, Accuride Corporation Age: 59 Committees: AC, CGC | Latondra Newton Independent Former Senior Vice President and Chief Diversity Officer, The Walt Disney Company Age: 55 Committees: CC | | | | | | | | | | KEY AC Audit Committee CC Compensation Committee CGC Corporate Governance Committee * Committee Chair | | D’aun Norman Independent Retired, Former Audit Partner, Ernst & Young, LLP Age: 57 Committees: AC* | Rohan S. Weerasinghe Independent Non-Executive Chair, PHINIA Inc.; Retired, Former General Counsel, Citigroup, Inc. Age: 73 Committees: CGC* | Roger J. Wood Independent Retired, Former Co-Chief Executive Officer, Tenneco Inc. Age: 61 Committees: AC, CC* | |
Our Director Nominees
| 12 | | 2024 | Proxy Statement |
Our Director Nominees
Board Composition and Qualifications Our Board utilizes a thoughtful approach to board composition. We seek to establish and maintain a board that is strong in its collective knowledge and that possesses a diversity of perspectives, skills, qualifications, attributes, and experiences in areas identified as relevant to oversee management and guide the Company in executing its business strategy, recognizing that these areas may change over time. Age
Our Director Nominees
| ☐ | <60 years | | ☐ | 60-70 years | | ☐ | >70 years |
Our Director Nominees
Independence
Our Director Nominees
| ☐ | Independent | | ☐ | Non-Independent |
Our Director Nominees
Diversity
Our Director Nominees
| ☐ | Diversity | | ☐ | Gender Diversity | | | Racial/Ethnic Diversity |
Our Director Nominees
| Senior Leadership Experience - 6/7 | Manufacturing & Operations Experience - 4/7 | Financial Expertise - 6/7 | | | | | | Public Company Board Experience - 4/7 | International Experience - 6/7 | Risk Management Expertise - 7/7 | | | | | | Transportation Industry Experience - 5/7 | Technology & Innovation Expertise - 3/7 | Legal, Regulatory & Public Policy Expertise - 3/7 | | | | |
Compensation Highlights
Compensation Highlights The following features of our executive compensation program demonstrate sound compensation governance and have been designed in the best interests of our shareholders and executives.
Compensation Highlights
| | What We Do | | | Pay for performance compensation philosophy | | | Significant portion of executive pay is performance-based and at-risk | | | Align long-term objectives with shareholder value creation | | | Utilize market compensation data, and benchmark against peer group of companies | | | Compensation Committee composed solely of independent directors | | | Engage independent compensation consultant, reporting directly to the Compensation Committee | | | Conduct annual compensation review and risk assessment | | | Maintain balanced compensation structure, consisting of fixed and variable pay, short- and long-term time horizons, and cash and equity components | | | Include double-trigger change of control provisions in equity award terms | | | Require minimum one-year vesting period for equity awards (other than Replacement Awards and Initial director awards) | | | Use shareholder engagement to inform compensation program | | | Utilize rigorous goal setting process | | | Maintain Clawback (Compensation Recovery) Policy that empowers PHINIA to recover certain incentive compensation erroneously awarded | | | Require robust executive stock ownership |
Compensation Highlights
| | What We Don’t Do | | | We do not provide tax gross-ups to NEOs, except in limited circumstances relating to international assignments | | | We do not pay current dividends or dividend equivalents on unvested awards; dividend equivalents vest only when, if, and to the extent that the underlying awards vest | | | We do not provide excessive perquisites | | | We do not provide excessive severance benefits | | | We do not provide single-trigger change of control severance benefits except if awards are not assumed by the acquiror | | | We do not permit hedging or pledging of our stock | | | We do not permit short sales, put options, call options, or other market-offered derivative transactions involving our stock | | | We do not encourage excessive or unnecessary risk-taking through our compensation policies |
Compensation Highlights
| Proposal 3 | Advisory Approval of the Frequency of Future Advisory Votes on the Compensation of Our Named Executive Officers | The Board recommends a vote of every 1 YEAR for this proposal. |
Compensation Highlights
| Proposal 4 | Ratification of the Appointment of PricewaterhouseCoopers LLP as Our Independent Registered Public Accounting Firm | The Board recommends a vote FOR this proposal. |
Compensation Highlights
| Proxy Statement | 2024 | | 15 |
Compensation Highlights
| Proposal 1 | | Election of Directors |
Compensation Highlights
The Board, upon the recommendation of the Corporate Governance Committee, has nominated seven individuals for election as directors at the Annual Meeting, to serve for a term of office expiring at the Company’s 2025 annual meeting of shareholders and until his or her successor has been duly elected and qualified. Each of the seven director nominees currently serves as a director on the Board. Each director nominee initially became a director of the Company in connection with the Spin-Off (as defined below), and was chosen through a deliberate and thoughtful process over many months, based on extensive consideration of the anticipated needs of the new company. We expect that each director nominee will be able to serve, if elected. If any director nominee is not able to serve, proxies may be voted for substitute nominees, unless the Board chooses to reduce the number of directors serving on the Board.
Compensation Highlights
| | Our Board recommends that you vote “FOR” the election of each of the seven nominees. |
Compensation Highlights
| | | | | | Samuel R. Chapin Independent Retired, Former Executive Vice Chairman, Global Corporate and Investment Banking, Bank of America Merrill Lynch Age: 66 Committees: CC, CGC | Brady D. Ericson President and CEO, PHINIA Inc. Age: 52 Committees: None | Robin Kendrick Independent President and CEO, Accuride Corporation Age: 59 Committees: AC, CGC | Latondra Newton Independent Former Senior Vice President and Chief Diversity Officer, The Walt Disney Company Age: 55 Committees: CC | | | | | | | | | | KEY AC Audit Committee CC Compensation Committee CGC Corporate Governance Committee * Committee Chair | | D’aun Norman Independent Retired, Former Audit Partner, Ernst & Young, LLP Age: 57 Committees: AC* | Rohan S. Weerasinghe Independent Non-Executive Chair, PHINIA Inc.; Retired, Former General Counsel, Citigroup, Inc. Age: 73 Committees: CGC* | Roger J. Wood Independent Retired, Former Co-CEO, Tenneco Inc. Age: 61 Committees: AC, CC* | |
Compensation Highlights
| 16 | | 2024 | Proxy Statement |
Our Director Nominees
Our Director Nominees
Our Director Nominees
| Rohan S. Weerasinghe Chair of the Board Independent Director Age: 73 Director since 2023 Committees: •Corporate Governance (Chair) | Professional Experience •Of Counsel, Shearman & Sterling LLP (2023 – Present) •General Counsel, Citigroup, Inc. (2012 – 2021) •Senior Partner, Shearman & Sterling LLP (2005 – 2012) •Partner, Shearman & Sterling LLP (1985 – 2005) •Various positions at Shearman & Sterling LLP (1977 – 1985) | | | Key Skills & Qualifications •Senior Leadership Experience: Mr. Weerasinghe served as the General Counsel of Citigroup, Inc., one of the world’s largest financial institutions, for over nine years, and prior to that, as the Senior Partner at one of the world’s pre-eminent international law firms. Mr. Weerasinghe brings valuable senior leadership experience to the Board and assists the Board in overseeing the development of our strategy. •Public Company Board, and Legal Experience: Mr. Weerasinghe has extensive experience advising public companies, boards, chief executive officers, and other senior management, as well as sovereigns worldwide and global financial institutions and corporates, on matters, including significant legal, governance, and business matters and other crisis situations. •Financial and Risk Management Expertise: Mr. Weerasinghe’s tenure as General Counsel of Citigroup, and his time as the Senior Partner of Shearman & Sterling, which role included managing and overseeing the firm’s chief financial officer, provided him with invaluable finance, capital markets, internal controls, and risk management experience. | | | Prior Board Experience •Sateri Holdings (2010 – 2012) | | | Education •J.D., Harvard Law School •M.B.A., Harvard Business School •B.A., Harvard College |
Our Director Nominees
| 20 | | 2024 | Proxy Statement |
Our Director Nominees
| Brady D. Ericson President & CEO, PHINIA Age: 52 Director since 2023 Committees: •None | Professional Experience •President & CEO, PHINIA (2023 – Present) •President & General Manager (Fuel Systems and Aftermarket), BorgWarner Inc.(2022 – 2023) •President & General Manager (Morse Systems), BorgWarner Inc. (2019 – 2022) •Chief Strategy Officer, BorgWarner (2017 – 2019) •President (Emissions Systems and BERU Systems), BorgWarner Inc. (2011 – 2016) •Various managerial positions at BorgWarner Inc. (1998 – 2011) •Various executive positions at Honeywell, Remy International and Ford Motor Company | | | Key Skills & Qualifications •Senior Leadership Experience: Mr. Ericson’s tenure as President and CEO of PHINIA and former roles as President and General Manager of three business units and Chief Strategy Officer of BorgWarner enable him to bring significant senior leadership, strategic planning, and business experience to the Board. •Transportation Industry, Manufacturing, and Operations Experience: As CEO of PHINIA and a former executive at BorgWarner, Mr. Ericson has in-depth knowledge of the Company and the global automotive industry, driving our successful development and execution of PHINIA’s strategic plan. Mr. Ericson’s conviction that internal combustion engine (ICE) technologies will be key to carbon-free and carbon neutral transportation solutions in the future is a driving force behind the establishment of PHINIA. •Global Business Experience and Financial Expertise: Through his leadership roles at PHINIA and BorgWarner, Mr. Ericson gained invaluable expertise in leading a global business, including overseeing key financing and capital allocation initiatives, technology and innovation initiatives, manufacturing and operations, risk management, mergers and acquisitions, integrations, and organizational and industry transformation. Mr. Ericson also acquired extensive international experience through leadership positions held while working and living in five different countries. | | | Prior Board Experience •Romeo Power, Inc. (previously NYSE: RMO) (2020 – 2021) •Romeo System, Inc. (2019 – 2020) | | | Education •M.B.A., Duke University •B.S., Kettering University |
Our Director Nominees
| Proxy Statement | 2024 | | 21 |
Our Director Nominees
| Samuel R. Chapin Independent Director Age: 66 Director since 2023 Committees: •Compensation •Corporate Governance | Professional Experience •Senior Advisor, Rockefeller Capital Management (2019 – Present) •Executive Vice Chairman (Global Corporate and Investment Banking), Bank of America Merrill Lynch (2010 – 2016) •Vice Chairman, Merrill Lynch (2003 – 2009) •Senior Vice President & Head of Global Investment Banking Division, Merrill Lynch (2001 – 2003) •Managing Director, Merrill Lynch (1993 – 2009) •Various positions at Merrill Lynch (1984 – 1993) | | | Key Skills & Qualifications •Senior Leadership Experience and Financial Expertise: Through his role as Executive Vice Chairman, Global Corporate and Investment Banking and other senior leadership roles with Bank of America Merrill Lynch, Mr. Chapin gained significant investment banking and financial expertise and leadership experience managing a complex, global investment banking organization. •Public Company Board Experience: Having served on the boards of O-I Glass, Revvity, and CIRCOR International, Mr. Chapin has extensive experience working with senior management and board members on business and corporate governance matters, including consideration of strategic alternatives, acquisitions, and sales of businesses. •International Experience and Risk Management Expertise: Through his more than three decades of investment banking at Bank of America Merrill Lynch, Mr. Chapin advised complex, global organizations on a wide range of transactional processes, mergers and acquisitions, deal financing, and related risk management. As Executive Vice Chairman of Global Corporate and Investment Banking, Mr. Chapin was primarily responsible for managing relationships with many of the bank’s largest and most complex clients. | | | Other Boards •O-I Glass, Inc. (NYSE: OI) (2020 – Present) •Revvity, Inc. (NYSE: RVTY) (2016 – Present) | | | Prior Board Experience •CIRCOR International, Inc. (previously NYSE: CIR) (2019 – 2023) | | | Education •M.B.A., University of Pennsylvania Wharton School •B.A., Lafayette College |
Our Director Nominees
| 22 | | 2024 | Proxy Statement |
Our Director Nominees
| Robin Kendrick Independent Director Age: 59 Director since 2023 Committees: •Audit •Corporate Governance | Professional Experience •President & CEO, Accuride Corporation (2019 – Present) •President & General Manager (Turbo Systems), BorgWarner Inc. (2018 – 2019) •President & General Manager (Transmission Systems), BorgWarner Inc. (2011 – 2018) •President & CEO, RGF AG (2011) •President, Europe, Acument Global Technologies (2008 – 2010) •Various executive positions at American Axle & Manufacturing (1999 – 2008) | | | Key Skills & Qualifications •Senior Leadership and International Experience: Through his experience as CEO of Accuride Corporation, a diversified manufacturer and supplier of commercial vehicle components, Mr. Kendrick brings to the Board significant insight into the complexities of managing a global Tier-1 automotive and mobility supplier, as well as extensive senior leadership and strategic planning experience. Mr. Kendrick also has robust engineering, sales, operations, and manufacturing experience acquired through leadership roles at BorgWarner, RGF, Acument, and American Axle that enable him to provide the Board with valuable operations and product development expertise that inform PHINIA’s business strategy, operations, and innovation and technology initiatives. •Transportation Industry, Manufacturing, and Operations Experience: As CEO of Accuride, Mr. Kendrick provides the Board with unique insights into the Company’s business, operations, and strategic opportunities, as well as a deep understanding of the transportation industry and its key participants. •Financial Expertise and Risk Management Expertise: Mr. Kendrick’s experience working with private equity firms on the restructuring and sale of Acument Europe, and his work as CEO of Accuride, contributes to our Board’s understanding of investor expectations surrounding capital allocation, leverage, and financial discipline, as well as managing risks applicable to complex, global organizations. | | | Other Boards •Accuride Corporation (2018 – Present) | | | Education •B.S., University of Leeds, England |
Our Director Nominees
| Proxy Statement | 2024 | | 23 |
Our Director Nominees
| Latondra Newton Independent Director Age: 55 Director since 2023 Committees: •Compensation | Professional Experience •Senior Vice President & Chief Diversity Officer, The Walt Disney Company (2017 – 2023) •Group Vice President (Social Innovation) & Chief Diversity Officer, Toyota Motor North America, Inc. (2014 – 2017) •Chief Program Officer, Toyota Mobility Foundation (2013 – 2014) •Vice President (Strategic Planning), Toyota Motor North America, Inc. (2009 – 2013) •Various executive positions at Toyota Motor Corporation (1991 – 2009) | | | Key Skills & Qualifications •Senior Leadership and Global Human Capital Experience: Ms. Newton’s experience serving in Chief Diversity Officer roles at The Walt Disney Company and Toyota has enabled her to bring valuable senior leadership experience and human capital expertise to the Board that assists the Board in overseeing the Company’s human capital management strategies, including relating to talent development, equity, diversity and inclusion, and corporate marketing initiatives. •Transportation Industry, Manufacturing, and Operations Experience: Ms. Newton brings extensive experience in the transportation industry and manufacturing and operations to the Board through her various leadership positions over more than 25 years with Toyota, including Vice President, Strategic Planning and Group Vice President, Social Innovation. While with Toyota, Ms. Newton managed the facilities and transportation purchasing department and directed the procurement of capital equipment, building construction, and logistics services for North America. She also served as general manager of the Team Member Development Center, which managed all engineering and manufacturing staff training and development initiatives in North America. •Risk Management Expertise and Legal, Regulatory & Public Policy Experience: Through her tenure with Toyota, Ms. Newton held leadership roles that included overseeing corporate planning activities, economic forecasting, competitor analysis, and corporate marketing initiatives. Ms. Newton also gained significant experience managing corporate affairs and related risks, including overseeing state and federal legislative and regulatory activity and engagement, in addition to media and community relations. Her experiences provide the Board with a meaningful perspective on PHINIA’s business strategy and regulatory risk management. | | | Education •B.S., Kettering University |
Our Director Nominees
| 24 | | 2024 | Proxy Statement |
Our Director Nominees
| D'aun Norman Independent Director Age: 57 Director since 2023 Committees: •Audit (Chair) | Professional Experience •Audit Partner, Ernst & Young LLP (1988 – 2019) | | | Key Skills & Qualifications •Public Company Board Experience: As a current director of Garrett Motion, Ms. Norman brings to the Board experience working with senior management and board members on business and corporate governance matters at an automotive aftermarket company. •Transportation Industry Experience: Ms. Norman specialized in advising publicly traded, global transportation suppliers and other industrials companies for over 16 years during her career at Ernst & Young. This extensive experience and deep industry knowledge has enabled her to provide the Board with a unique understanding of PHINIA’s business and managing the risks and complexities applicable to its global operations. •Financial and Risk Management Expertise; Legal, Regulatory and Public Policy Experience: For over three decades, Ms. Norman provided assurance and advisory services to large multinational transportation and industrial companies as a senior audit partner at Ernst & Young. She brings significant financial reporting, accounting and controls, business analysis, risk management, and regulatory expertise to the Board. | | | Other Boards •Garrett Motion, Inc. (NASDAQ: GTX) (2021 – Present) | | | Education •B.S., Bowling Green State University •Certified Public Accountant •NACD Certified Director •AICPA Certification in Cybersecurity Fundamentals •EY Executive Education Program, Northwestern University Kellogg School of Management |
Our Director Nominees
| Proxy Statement | 2024 | | 25 |
Our Director Nominees
| Roger Wood Independent Director Age: 61 Director since 2023 Committees: •Audit •Compensation (Chair) | Professional Experience •Co-CEO, Tenneco Inc. (2018 – 2020) •Chairman & CEO, Fallbrook Technologies Inc. (2018) •President & CEO, Dana Incorporated (2011 – 2015) •Executive Vice President & Group President (Engine Group), BorgWarner Inc. (2009 – 2011) •President (BorgWarner Turbo Systems & BorgWarner Emissions Systems), BorgWarner Inc. (2005 – 2009) •Various positions at BorgWarner Inc. (1985 – 2005) | | | Key Skills & Qualifications •Senior Leadership and Public Company Board Experience: Mr. Wood’s experience as a CEO of multiple public manufacturing companies provides the Board with significant leadership experience and knowledge of global manufacturing, operations, customer solutions, and strategic planning. His current and prior service on the boards of Goodyear Tire, Brunswick, Tenneco, and Dana Holding, also enable him to bring to the Board significant experience working with senior management and board members on business and corporate governance matters at global automotive companies. •Transportation Industry, Manufacturing, and Operations Experience: Through his senior executive positions at Tenneco Fallbrook Technologies, and Dana Incorporated, Mr. Wood brings extensive knowledge of the transportation industry, providing the Board with unique insight into the Company’s operations, technology and innovation initiatives, and strategic opportunities. •Financial Expertise and Risk Management Expertise: Through his various roles as CEO and in other senior leadership positions, Mr. Wood has gained substantial experience overseeing corporate finance, investment, capital allocation, and risk management matters, as well as mergers and acquisitions experience, including most notably Tenneco’s $5.4 billion acquisition of Federal-Mogul LLC (leading global supplier to original equipment manufacturers and the aftermarket), subsequent integration, and ultimate spin-off of Tenneco's $12 billion automotive business. | | | Other Boards •The Goodyear Tire & Rubber Company (NASDAQ: GT) (2023 – Present) •Brunswick Corporation (NYSE: BC) (2012 – Present) | | | Prior Board Experience •Tenneco Inc. (previously NYSE: TEN) (2016 – 2018) •Fallbrook Technologies Inc. (2016 – 2018) •Dana Holding Corporation (2011 – 2015) | | | Education •M.B.A., Syracuse University, Whitman School of Management •B.T., State University College at Buffalo, New York |
Our Director Nominees
| 26 | | 2024 | Proxy Statement |
2023 Director Compensation
2023 Director Compensation The following table sets forth the total compensation of the Company’s non-employee directors for the year ended December 31, 2023.
2023 Director Compensation
| Name(1) | Fees Earned or Paid in Cash ($)(2) | Stock Awards ($)(3) | All Other Compensation ($) | Total ($) | | Samuel R. Chapin | $28,125 | $353,471 | $0 | $381,596 | | Robin Kendrick | $28,125 | $353,471 | $0 | $381,596 | | Latondra Newton | $26,875 | $353,471 | $0 | $380,346 | | D’aun Norman | $31,250 | $353,471 | $0 | $384,721 | | Rohan S. Weerasinghe | $53,750 | $353,471 | $0 | $407,221 | | Roger J. Wood | $31,250 | $353,471 | $0 | $384,721 |
2023 Director Compensation
(1)Mr. Ericson is a member of the Board and President and CEO of the Company, and his compensation for fiscal year 2023 is reported in the Summary Compensation Table and other tables and sections of this Proxy Statement. Mr. Ericson did not receive any additional compensation for his service on the Board. (2)This column reflects the cash fees earned by and paid to non-employee directors for Board and committee service to the Company from July 3, 2023, the effective date of the Spin-Off, through December 31, 2023. (3)This column reflects the aggregate grant date fair value, determined in accordance with the Financial Accounting Standard Board’s Accounting Standards Codification 718, Compensation—Stock Compensation (ASC Topic 718), excluding the effect of forfeitures, of the (i) annual Board equity retainer grants and (ii) Initial Equity Grants of restricted stock awards made by the Company on July 18, 2023 to each non-employee director. A discussion of the relevant assumptions is set forth in Note 18 to the Consolidated Financial Statements in Part II, Item 8 of the 2023 Annual Report. As of December 31, 2023, each non-employee director serving at such time (Mses. Newton and Norman and Messrs. Chapin, Kendrick, Weerasinghe, and Wood) held 12,891 unvested restricted shares.
2023 Director Compensation
| Proxy Statement | 2024 | | 41 |
2023 Director Compensation
| Proposal 2 | | Advisory Approval of the Compensation of Our Named Executive Officers |
2023 Director Compensation
In accordance with the requirements of Section 14A of the Exchange Act, PHINIA is requesting that our shareholders vote, on an advisory basis, to approve the compensation of our named executive officers, as discussed in the Compensation Discussion and Analysis and the compensation tables and accompanying narrative disclosure included in this Proxy Statement. This vote is commonly referred to as a “say-on-pay” vote. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and our executive compensation program and practices described in this Proxy Statement. Subject to the outcome of the shareholder advisory vote on the frequency of the say-on-pay vote (Proposal 3), the Company expects to hold this say-on-pay vote annually, with the next vote expected to occur at the Company’s 2025 annual meeting of shareholders. Although this advisory say-on-pay vote is not binding, the Board and Compensation Committee highly value the opinions of our shareholders. The result of this vote will provide information to the Compensation Committee about our shareholders’ views of our executive compensation program, which the Compensation Committee will be able to consider in the future when making executive compensation decisions. Our executive compensation programs are designed to be consistent with our compensation philosophy to pay for performance, align the interests of our executives with those of shareholders, and pay competitively. The Compensation Committee closely monitors our compensation program and pay levels of executives from other similarly-situated companies, and maintains a high level of oversight over our executive compensation program. Specifically, in making executive compensation decisions in 2023 following the Spin-Off, our Compensation Committee performed a market comparison against a peer group and also considered the significant efforts required to complete the Spin-Off and establish standalone strategies, policies, processes, and operating practices. For the reasons expressed above and in the Compensation Discussion and Analysis, the Compensation Committee and the Board believe that our compensation policies and programs are aligned with the interests of our shareholders and designed to reward performance and pay competitively. The Board recommends that shareholders vote FOR the following resolution: “RESOLVED, that the compensation of the Company’s named executive officers as disclosed in this Proxy Statement pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the executive compensation tables and the narrative discussion, is approved.”
2023 Director Compensation
| | Our Board recommends that you vote “FOR” the advisory approval of the compensation of our named executive officers. |
2023 Director Compensation
| 42 | | 2024 | Proxy Statement |
Compensation Discussion and Analysis
| Other Executive Compensation Practices and Policies | 56 | | Executive Stock Ownership Policy | 56 | | Compensation Recovery Policy | 57 | | Restrictions on Short Sales, Hedging, and Pledging of Stock | 57 | | Executive Benefits and Retirement Plan | 57 | | Limited Perquisites | 57 | | Change of Control and Severance Plans and Agreements | 57 | | Treatment of Equity in the Event of a Change of Control | 58 | | Compensation Risk Management | 58 |
Compensation Discussion and Analysis
Executive Summary Introduction On July 3, 2023, PHINIA became an independent, publicly traded company as a result of the Spin-Off. To provide a fulsome view of 2023 compensation provided to our NEOs, this CD&A and the related compensation tables include information regarding compensation paid by, and executive compensation policies and practices of, BorgWarner as they related to our NEOs prior to the Spin-Off, as well as PHINIA’s compensation structure following the Spin-Off as approved by PHINIA’s Compensation Committee of the Board of Directors (for purposes of this CD&A, the Committee). The Committee will continue to consider our executive compensation programs, policies, and practices in the context of our business needs on a going-forward basis. In February 2023, BorgWarner selected Mr. Brady Ericson and Ms. Chris Gropp, both respected leaders at BorgWarner, to serve as CEO and CFO of PHINIA, respectively. Mr. Ericson and Ms. Gropp, along with the remainder of our NEOs, were selected to serve in their respective roles with PHINIA as a result of their track records of success at BorgWarner. Prior to the Spin-Off, the Compensation Committee of BorgWarner’s Board of Directors reviewed peer group and other market data with its independent compensation consultant to determine the initial compensation arrangements for each of our NEOs in connection with their anticipated appointment as PHINIA executive officers. We discuss this review in further detail under “Pre-Spin-Off Roles and Responsibilities” in the Decision-Making and Oversight section of this CD&A. Since the Spin-Off, the Committee has been responsible for determining PHINIA’s compensation programs and policies applicable to our NEOs and our other executive officers and for approving the levels of compensation applicable to them. The Committee has taken the following actions since the Spin-Off: •Approved PHINIA’s compensation philosophy, which includes aligning the interests of our executives with the long-term interests of the business, our shareholders, and employees. •Engaged an independent compensation consultant, and with their input, developed a peer group of companies to provide comparative executive compensation benchmarking data. •Conducted a review and market comparison of each element of the initial total compensation arrangements of the NEOs determined by BorgWarner, and based on that review: •Adopted the target total direct compensation of each NEO (previously determined by BorgWarner) and replaced certain BorgWarner pay components with PHINIA-specific cash and equity compensation; and •Determined to make one-time, long-term equity awards (Recognition Awards) to our NEOs and other select key executives shortly after the Spin-Off to motivate critical talent expected to have a significant impact on PHINIA’s future success and to further align such executives' interests with those of our shareholders. •Developed and recommended a Compensation Recovery Policy that was adopted by our Board. In addition to including information regarding our executive compensation program, this CD&A describes the Committee’s process for making pay decisions, as well as its rationale for specific decisions related to 2023 compensation for our NEOs.
Compensation Discussion and Analysis
| | NEOs | Pay Component | Performance or Service Condition | Treatment Following Spin-Off | | BASE SALARY | •All | •Cash | •Active employment following the Spin-Off | •Provided market-competitive, fixed level of compensation •Designed to retain critical executive talent | | ANNUAL CASH INCENTIVE | •All | •Cash | •Active employment at the time of payout •Achievement against two 2023 PHINIA performance measures (equally weighted at 50%): Adjusted Operating Margin and Working Capital | •Equitable replacement of annual cash incentives previously awarded by BorgWarner •Focused executives on achieving PHINIA's annual financial goals, while driving long-term shareholder value | | LONG-TERM EQUITY INCENTIVE | •All | •Equity – RSAs (Replacement Awards) | •Continued employment through the applicable vesting dates; vest in two tranches in accordance with terms of original awards granted by BorgWarner (50% as of February 28, 2025, and 50% as of February 28, 2026) | •Equitable replacement of unvested RSA awards previously granted by BorgWarner | | | •CEO | •Equity – RSUs (Replacement Awards) | •Continued employment through the applicable vesting dates; vesting in accordance with the terms of original awards granted by BorgWarner (three awards, vesting as of December 31, 2023, 2024 and 2025, respectively) | •Equitable replacement of unvested PSU awards previously granted by BorgWarner | | | •All | •Equity – RSAs (Recognition Awards) | •Vesting over three years in two tranches (50% as of August 29, 2025, and 50% as of August 29, 2026) | •Recognize NEOs' expanded roles and motivate critical talent expected to have significant impact on PHINIA’s future success •Further align NEOs' interests with that of shareholders |
Compensation Discussion and Analysis
| | What We Don’t Do | | | We do not provide tax gross-ups to NEOs, except in limited circumstances relating to international assignments | | | We do not pay current dividends or dividend equivalents on unvested awards; dividend equivalents vest only when, if, and to the extent that the underlying awards vest | | | We do not provide excessive perquisites | | | We do not provide excessive severance benefits | | | We do not provide single-trigger change of control severance benefits except if awards are not assumed by the acquiror | | | We do not permit hedging or pledging of our stock | | | We do not permit short sales, put options, call options, or other market-offered derivative transactions involving our stock | | | We do not encourage excessive or unnecessary risk-taking through our compensation policies |
Compensation Discussion and Analysis
| BorgWarner Compensation Committee and Management | | In connection with the Spin-Off, BorgWarner selected our NEOs, Messrs. Ericson, Boyle, and Anderson and Mses. Gropp and Di Beasi, to serve as executive officers of PHINIA. As a result, the BorgWarner Compensation Committee developed and approved compensation packages for each of the NEOs in accordance with BorgWarner policies and practices, including base salary, target annual cash incentive, target long-term equity incentive, and for our NEOs other than the CEO, an annual cash retention bonus tied to successful completion of the Spin-Off. The compensation packages were based on a comprehensive market analysis and designed to be commensurate with the NEOs’ anticipated roles and responsibilities with PHINIA following the Spin-Off. While all of our NEOs were employed by BorgWarner prior to the Spin-Off, only Mr. Ericson was an executive officer of BorgWarner. | | BorgWarner Independent Compensation Consultant | | BorgWarner’s Compensation Committee engaged Pearl Meyer & Partners, LLC (Pearl Meyer) to provide consulting services in connection with certain executive compensation matters related to the Spin-Off. Pearl Meyer advised the BorgWarner Compensation Committee on the executive compensation program that would be in place at the time of the Spin-Off, including the initial compensation philosophy, compensation peer group, and total target compensation for PHINIA’s NEOs and other executive officers. Following the Spin-Off, the Committee and the Corporate Governance Committee separately conducted a review of the BorgWarner executive and director compensation decisions, respectively, informed by PHINIA’s independent compensation consultant, Pearl Meyer, as further described below under Post-Spin - PHINIA Compensation Consultant. | | Use of Competitive Data and Peer Group | | In setting executive compensation prior to the Spin-Off, BorgWarner’s Compensation Committee reviewed data from published compensation surveys and the below peer group. This peer group was selected due to its reflection of PHINIA’s expected profile following the Spin-Off and includes companies in similar industries and with comparable key financial measures (primarily annual revenue and market capitalization) to that of what was anticipated of PHINIA, representing one-third to three times PHINIA’s projected revenue. |
Compensation Discussion and Analysis
| PHINIA Compensation Committee and Management | | The Committee is comprised of independent members of our Board of Directors. The Board has delegated to the Committee the responsibility of making compensation decisions for executive officers, among other matters. Since the Spin-Off, the Committee has determined the compensation of our NEOs and each of our other executive officers. The Committee works closely with its independent compensation consultant and management to evaluate the appropriateness and effectiveness of PHINIA’s executive compensation program. Pursuant to its charter, the Committee may form and delegate authority to subcommittees and officers as it deems appropriate and in accordance with applicable laws and the terms of applicable plans. The Committee expects to perform a strategic review of executive officer compensation at least annually, in addition to having regular discussions about the executive compensation program during its meetings held throughout the year. The Committee evaluates the executive compensation program to confirm alignment with our pay-for-performance philosophy, executive compensation objectives, PHINIA’s business strategies, competitive realities, and the interests of our shareholders. The Committee also considers feedback from shareholders. After consideration of these data points, the Committee seeks to determine whether the executive compensation program: (1) meets these objectives, (2) provides adequate incentives and motivation to executive officers, and (3) appropriately compensates executive officers relative to comparable officers at other companies with which PHINIA competes for executive talent. In setting the compensation of our executive officers other than our CEO, the Committee expects to take into account the CEO’s review of each executive officer’s performance and his recommendations with respect to each executive officer’s compensation. The CEO does not participate in the determination of his own compensation. The CEO's compensation is determined by the Compensation Committee and is based on guidance from our compensation consultant, competitive market compensation data, and individual and Company performance criteria. | | PHINIA Independent Compensation Consultant | | In connection with the Spin-Off, the Committee engaged Pearl Meyer to serve as its independent compensation consultant. As requested by the Committee, Pearl Meyer advises the Committee on general marketplace trends in executive compensation, makes proposals for our executive compensation programs and compensation philosophy, assists in the development of a group of peer companies for inclusion in competitive market analyses of compensation, and otherwise advises the Committee with regard to the compensation of our NEOs and other executive officers. During 2023, Pearl Meyer also provided input to the Corporate Governance Committee for its review of director compensation, which is described under “Non-Employee Director Compensation.” The Committee has assessed the independence of Pearl Meyer pursuant to the applicable rules and determined that its engagement of Pearl Meyer does not raise any conflict of interest. The Committee intends to conduct a similar assessment of the independence of the compensation consultant annually. Pearl Meyer does not provide any services to the Company or any of the Company’s affiliates other than advising the Committee on executive compensation matters and advising the Corporate Governance Committee on director compensation matters. | | Use of Competitive Data and Peer Group | | The Committee believes it is important to clearly understand the relevant market for executive talent to inform its decision-making and confirm that our executive compensation program is designed to attract and retain key talent. Following the Spin-Off and in preparation for the Committee’s post-spin review of the compensation of our NEOs, the Committee and management worked with Pearl Meyer to refine the previously-selected peer group. The Committee approved the following group of companies (the Peer Group) for purposes of assessing competitive compensation practices. |
Compensation Discussion and Analysis
The Committee selected the Peer Group based on several important criteria, including: •the similarity of such companies’ industry to that of PHINIA’s (considering companies within the Auto Parts and Equipment, Construction Machinery and Heavy Trucks, Electrical Components and Equipment, Industrial Machinery, Tires and Rubber, and Technology industries); •general comparability of key financial measures (primarily annual revenue and market capitalization, with ideal candidates having revenue between one-third and three times the projected revenue of PHINIA); and •the extent to which they may compete with PHINIA for executive talent based on the above and additional factors. At the time the Peer Group was approved, the Company’s revenue was at approximately the 44th percentile of the Peer Group. The Committee will review the composition of our Peer Group annually to confirm that the companies constituting the Peer Group continue to provide meaningful and relevant compensation comparisons. In determining the compensation of our executive officers, the Committee reviews and considers data from the Peer Group, in addition to relevant published compensation survey data, input from our CEO and other Board and Committee members, the competitiveness of current compensation levels relative to market, and other factors. The Committee does not target a specific competitive position versus the market in determining the compensation of our executive officers. Rather, the Committee considers the compensation data of the Peer Group and such other resources in conjunction with the Company’s pay-for-performance and long-term value creation objectives in determining the compensation for our executive officers designed to align management’s interests with those of our shareholders. In 2023, in addition to Peer Group and survey data, and the other considerations described above, the Committee considered guidance obtained from Pearl Meyer relating to similarly-situated Spin-Off companies and their executive compensation programs when making its determination with respect to the Recognition Awards, as defined and described below under NEO Compensation – Long-Term Equity Incentive – Post-Spin-Off – PHINIA Recognition Awards. NEO Compensation Base Salary
Compensation Discussion and Analysis
In establishing base salaries for executive officers, the Committee considers the scope of each executive’s responsibilities and individual experiences, development opportunities, changes in responsibilities, internal equity, and individual and business performance, with reference to market and Peer Group data. When considering market competitive base salaries, the Committee targets median market levels among its Peer Group. Base salaries may, however, be reasonably below or above the median of the Peer Group considering the other factors described above. Following the Spin-Off, the Committee, with the input of Pearl Meyer, conducted a review of the compensation of our NEOs. Based on such review, the Committee confirmed the continued appropriateness of, and determined to make no change to, the annual base salaries of our NEOs that were approved by the BorgWarner Compensation Committee in anticipation of and effective upon the Spin-Off. The following table sets forth information regarding each NEO's annual base salary, as initially determined by the BorgWarner Compensation Committee and confirmed by the Committee following the Spin-Off.
BORGWARNER MIP PERFORMANCE METRICS AND TARGETS
BORGWARNER MIP PERFORMANCE METRICS AND TARGETS Prior to the Spin-Off, our NEOs were covered participants under the BorgWarner 2023 Management Incentive Plan (BorgWarner MIP)—a cash-based, annual incentive plan. The BorgWarner Compensation Committee based performance under the BorgWarner MIP on the achievement of two pre-established financial performance metrics: Adjusted Operating Margin (BorgWarner AOM) and Free Cash Flow (BorgWarner FCF). Messrs. Ericson and Boyle had equally weighted corporate performance goals specific to BorgWarner company performance as a whole, while our other NEOs had both corporate performance goals specific to BorgWarner company performance as a whole and performance goals specific to BorgWarner business units aligned with their respective roles and responsibilities during 2023 leading up to the Spin-Off. Target annual incentive opportunities for our NEOs under the BorgWarner MIP prior to the Spin-Off were as follows: (1) For Mr. Ericson, 120% of base salary; (2) for Mses. Gropp and Di Beasi and Mr. Boyle, $122,000; and (3) for Mr. Anderson, 45% of base salary.
BORGWARNER MIP TREATMENT UPON SPIN-OFF
BORGWARNER MIP TREATMENT UPON SPIN-OFF Upon the Spin-Off, consistent with the terms of the Employee Matters Agreement between BorgWarner and PHINIA, PHINIA was solely responsible for any annual cash incentives for the full year 2023. As such, the BorgWarner MIP awards were converted and PHINIA annual incentive awards approved, as further described below. No payouts were earned or paid to NEOs under the BorgWarner MIP for the 2023 year. Post-Spin-Off Following the Spin-Off, the Committee approved and implemented the PHINIA Inc. Management Incentive Bonus Plan (PHINIA MIP)—a cash-based, annual incentive plan intended to assist PHINIA in attracting and retaining individuals of outstanding competence and to focus executives on achieving annual financial goals that are designed to drive long-term shareholder value. Further, consistent with the terms of the Employee Matters Agreement between BorgWarner and PHINIA, the Committee approved an annual cash incentive program for our NEOs applicable to the 2023 performance year, as described in more detail below, which replaced the NEOs’ 2023 award opportunities under the BorgWarner MIP.
PHINIA MIP PERFORMANCE METRICS, TARGETS, AND RESULTS
PHINIA MIP PERFORMANCE METRICS, TARGETS, AND RESULTS Under the PHINIA MIP, the Committee based performance for our NEOs on the full-year achievement of two pre-established financial performance metrics specific to PHINIA: Adjusted Operating Margin (PHINIA AOM) and Working Capital (PHINIA WC). For 2023, PHINIA AOM and PHINIA WC were weighted equally and calculated and defined as follows.
PHINIA MIP PERFORMANCE METRICS, TARGETS, AND RESULTS
| PHINIA AOM | = | Adjusted Operating Income | ÷ | Adjusted Sales |
PHINIA MIP PERFORMANCE METRICS, TARGETS, AND RESULTS
| PHINIA WC | = | Accounts Receivable from Customers | + | Inventories | - | Accounts Payable |
PHINIA MIP PERFORMANCE METRICS, TARGETS, AND RESULTS
PHINIA AOM, Adjusted Operating Income, Adjusted Sales, and PHINIA WC are non-GAAP measures. Please see Annex A for reconciliations to their most directly comparable financial measures as reported under GAAP or an explanation of how such measures are calculated from the financial statements. The Committee selected PHINIA AOM because it is a key measure of profitability used by management. The Committee selected PHINIA WC as a measure of operational efficiency because it believed PHINIA WC to be a more accurate measure of the Company’s operational efficiency.
PHINIA MIP PERFORMANCE METRICS, TARGETS, AND RESULTS
| 52 | | 2024 | Proxy Statement |
PHINIA MIP PERFORMANCE METRICS, TARGETS, AND RESULTS
The Committee believes these decisions were appropriate for 2023 annual cash incentives for our NEOs, as they provided for an annual incentive program that: •Aligned incentives to PHINIA-specific, full year 2023 performance; and •Aligned with PHINIA business goals and strategies. Target annual incentive opportunities for our NEOs under the 2023 PHINIA MIP were as follows, with achievement levels ranging between a minimum of 0% to a maximum of 200% of the target annual incentive opportunity.
PHINIA MIP PERFORMANCE METRICS, TARGETS, AND RESULTS
| Name | PHINIA MIP Target Annual Incentive Opportunity (% of Base Salary) | | Brady D. Ericson | 120% | | Chris P. Gropp | 70% | | Robert Boyle | 50% | | Todd L. Anderson | 45% | | Alisa Di Beasi | 50% |
PHINIA MIP PERFORMANCE METRICS, TARGETS, AND RESULTS
The 2023 performance metrics, targets, weightings and actual results for our NEOs, as approved by the Committee, were as follows (with straight line interpolation between performance levels).
PHINIA MIP PERFORMANCE METRICS, TARGETS, AND RESULTS
| | | Performance Level | | | | | | | | | Performance Metric(1) | Weight | Threshold (50% payout) | | Target (100% payout) | | Maximum (200% payout) | | Actual Results | | | PHINIA AOM | 50% | 9.6 | | 10.1 | | 10.6 | | 10.1% | | | PHINIA WC | 50% | $700 | M | $650 | M | $600 | M | $664 | M |
PHINIA MIP PERFORMANCE METRICS, TARGETS, AND RESULTS
(1)PHINIA AOM and PHINIA WC are non-GAAP measures. Please see Annex A for reconciliations to their most directly comparable financial measures as reported under GAAP or an explanation of how such measures are calculated from the financial statements. In February 2024, the Committee approved the annual cash incentive amounts earned by our NEOs for 2023 based on demonstrated achievement of the pre-established PHINIA AOM and PHINIA WC metrics.
PHINIA MIP PERFORMANCE METRICS, TARGETS, AND RESULTS
| Name | PHINIA MIP Payout as a % of Target Based on Actual AOM Performance | PHINIA MIP Payout as a % of Target Based on Actual WC Performance | PHINIA MIP Payout as a % of Target Based on Overall Performance | PHINIA MIP Annual Incentive Payout | | Brady D. Ericson | 100% | 86% | 93% | $976,500 | | Chris P. Gropp | 100% | 86% | 93% | $325,500 | | Robert Boyle | 100% | 86% | 93% | $183,675 | | Todd L. Anderson | 100% | 86% | 93% | $145,287 | | Alisa Di Beasi | 100% | 86% | 93% | $165,075 |
PHINIA MIP PERFORMANCE METRICS, TARGETS, AND RESULTS
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PHINIA MIP PERFORMANCE METRICS, TARGETS, AND RESULTS
Long-Term Equity Incentives
PHINIA MIP PERFORMANCE METRICS, TARGETS, AND RESULTS
| | LINK TO COMPENSATION | Performance-based, at-risk compensation intended to focus our executives on achieving longer-term financial goals that are designed to drive long-term shareholder value creation and support the Company’s retention strategies. |
PHINIA MIP PERFORMANCE METRICS, TARGETS, AND RESULTS
Pre-Spin-Off Prior to the Spin-Off, all of our NEOs were provided long-term equity incentive awards under the BorgWarner 2023 Stock Incentive Plan. Each NEO received an award of BorgWarner RSAs during 2023. Mr. Ericson, as an executive officer of BorgWarner, also received an award of BorgWarner PSUs during 2023. Details of the awards outstanding prior to Spin-Off are as follows.
PHINIA MIP PERFORMANCE METRICS, TARGETS, AND RESULTS
| Name | Aggregate Outstanding BorgWarner RSAs at Spin-Off | Aggregate Outstanding BorgWarner PSUs at Spin-Off | | Brady D. Ericson | 36,101 | 116,136 | | Chris P. Gropp | 12,210 | – | | Robert Boyle | 11,403 | – | | Todd L. Anderson | 11,269 | – | | Alisa Di Beasi | 11,684 | – |
PHINIA MIP PERFORMANCE METRICS, TARGETS, AND RESULTS
Performance metrics for the BorgWarner PSUs specific to Mr. Ericson were based on pre-established achievement levels ranging from a minimum of 0% to a maximum of 200%, with a target achievement level of 100%. For the 2021 - 2023 and 2022 - 2024 performance periods, the below table includes the forecasted performance for each metric at the time of Spin-Off, which, in accordance with the Employee Matters Agreement between BorgWarner and PHINIA, was used to determine the number of BorgWarner PSUs that would be converted into PHINIA RSUs in connection with the Spin-Off.
PHINIA MIP PERFORMANCE METRICS, TARGETS, AND RESULTS
| 2021 - 2023 Performance Metrics | Weighting | Definition | Forecasted Performance at Time of Spin-Off | | eProducts Revenue Mix | 50% | Percentage of BorgWarner’s total proforma revenue in 2023 derived from eProducts | 200% | | Cumulative Free Cash Flow | 25% | BorgWarner’s operating cash flow less capital expenditures for the 2021 - 2023 three-year performance period | 92% | | Relative Total Shareholder Return (TSR) | 25% | BorgWarner’s three-year TSR among a peer group of companies | 200% |
PHINIA MIP PERFORMANCE METRICS, TARGETS, AND RESULTS
| 2022 - 2024 Performance Metrics | Weighting | Definition | Forecasted Performance at Time of Spin-Off | | eProducts Revenue Mix | 25% | Percentage of BorgWarner’s total proforma revenue in 2024 derived from eProducts | 100% | | eProducts Revenue | 25% | BorgWarner’s total revenue in 2024 derived from eProducts | 100% | | Cumulative Free Cash Flow | 25% | BorgWarner’s operating cash flow less capital expenditures for the 2022 - 2024 three-year performance period | 100% | | Relative TSR | 25% | BorgWarner’s three-year TSR among a peer group of companies | 150% |
PHINIA MIP PERFORMANCE METRICS, TARGETS, AND RESULTS
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PHINIA MIP PERFORMANCE METRICS, TARGETS, AND RESULTS
For the 2023 - 2025 performance period, the performance metrics and weighting were the same as for the 2022 - 2024 performance period, with the definitions modified to reflect 2025 total proforma revenue and 2025 total revenue for eProducts Revenue Mix and eProducts Revenue, respectively, and the 2023 - 2025 performance period for Cumulative Free Cash Flow. For these BorgWarner PSUs for which less than one year of the performance period had elapsed at the time of Spin-Off, the BorgWarner PSUs were converted at target as approved by the BorgWarner Compensation Committee and provided in the Employee Matters Agreement between BorgWarner and PHINIA.
BORGWARNER EQUITY AWARD TREATMENT UPON SPIN-OFF
BORGWARNER EQUITY AWARD TREATMENT UPON SPIN-OFF In connection with the Spin-Off, and as specified in the Employee Matters Agreement between BorgWarner and PHINIA, each outstanding and unvested equity award previously granted by BorgWarner and held by our NEOs was converted to a substitute RSA award or, in the case of PSUs previously granted to Mr. Ericson, a substitute RSU award (collectively, Replacement Awards) granted under the PHINIA Inc. 2023 Stock Incentive Plan (Stock Incentive Plan) approved by the BorgWarner Board on June 8, 2023 and the Committee effective July 3, 2023. Further, in accordance with the Employee Matters Agreement and forms of agreements adopted, each Replacement Award has the same terms and conditions as the corresponding award previously granted by BorgWarner, including vesting provisions (other than the performance criteria applicable to the PSUs, which were converted to time-based vesting only RSUs). Post-Spin-Off
PHINIA REPLACEMENT AWARDS
PHINIA REPLACEMENT AWARDS Each outstanding BorgWarner equity award held by a PHINIA employee, including our NEOs, was converted to a PHINIA Replacement Award described below and determined by multiplying the number of outstanding shares of BorgWarner common stock subject to the BorgWarner equity award (and, in the case of the BorgWarner PSUs, based on the performance level described above) by 1.7387, the Spin-Off conversion factor.
PHINIA REPLACEMENT AWARDS
| BorgWarner Equity Award | PHINIA Replacement Awards | | RSAs | BorgWarner RSAs were converted to RSAs relating to PHINIA common stock with the same terms and conditions as the original award (including the vesting schedule) | | PSUs | BorgWarner PSUs were converted to RSUs relating to PHINIA common stock subject solely to time-based vesting conditions and otherwise subject to the same terms and conditions as the original award (including the vesting schedule, but without any performance conditions), as described above. |
PHINIA REPLACEMENT AWARDS
The table below sets forth the total number of RSAs and RSUs resulting from the conversion of the NEOs' BorgWarner equity awards into PHINIA equity awards, as well as respective fair values.
PHINIA REPLACEMENT AWARDS
| Name | RSAs Awarded(1) | RSUs Awarded | | Brady D. Ericson | 62,770 | 51,090(2) | | | – | 150,839(3) | | Chris P. Gropp | 21,232 | – | | Robert Boyle | 19,830 | – | | Todd L. Anderson | 19,596 | – | | Alisa Di Beasi | 20,318 | – |
PHINIA REPLACEMENT AWARDS
(1)Represents the conversion of RSAs granted by BorgWarner to each of the NEOs in 2021, 2022, and 2023, vesting in two tranches as follows: 2021 RSAs, 50% as of February 28, 2023, and 50% as of February 28, 2024; 2022 RSAs, 50% as of February 28, 2024, and 50% as of February 28, 2025; and 2023 RSAs, 50% as of February 28, 2025, and 50% as of February 28, 2026. The RSAs granted by BorgWarner on April 26, 2023 are reflected in the Summary Compensation Table and Grants of Plan-Based Awards Table. (2)Represents the conversion of PSUs granted by BorgWarner to Mr. Ericson on April 26, 2023 for the 2023 - 2025 three-year performance period. The PSUs are reflected in the Summary Compensation Table and Grants of Plan-Based Awards Table. (3)Represents the conversion of PSUs granted by BorgWarner to Mr. Ericson in 2021 and 2022 for each of the 2021 - 2023 and 2022 - 2024 three-year performance periods, respectively.
PHINIA RECOGNITION AWARDS
PHINIA RECOGNITION AWARDS Following a review of each NEO’s post-Spin-Off executive compensation arrangements, new expanded roles, and associated responsibilities of each NEO leading up to and after the Spin-Off, in addition to the scale and complexity of the Spin-Off, the Committee determined it appropriate to grant one-time RSAs (Recognition Awards) under the Stock Incentive Plan to our NEOs. The Recognition Awards vest over three years, with 50% of shares vesting on the second anniversary of the grant date and the remainder vesting on the third anniversary of the grant date. The Recognition Awards were granted shortly after the Spin-Off to motivate critical talent, implement added retentive value to the variable compensation awarded to the NEOs, and further align their compensation with our stock price performance and the interests of our shareholders. Based in part on the recommendation of Pearl Meyer, the total target value of the Recognition Awards were equal to a 1x multiple of each NEO’s target annual long-term incentive opportunity approved by the Committee at that time. The following table sets forth the fair value on the grant date of the Recognition Awards for each of our NEOs.
PHINIA RECOGNITION AWARDS
Our executive officers must satisfy their ownership requirement within the five years following their initial appointment to their respective positions. The following will be taken into consideration in determining whether the executive officer has satisfied the stock ownership requirement: shares held outright in brokerage or other investment accounts; unvested RSAs and RSUs; and shares held by the executive in any qualified or non-qualified retirement plan sponsored by the Company. Unexercised stock options and stock appreciation rights as well as unvested performance-based equity awards will not count towards fulfilling the ownership requirements. Officers who have not yet fulfilled their ownership requirement must hold at least 50% of the net after-tax amounts of any performance equity awards, RSAs and RSUs that become vested until their ownership requirement is met. The Committee intends to annually review stock ownership levels for our CEO and all other executive officers to confirm their compliance with this policy. As of January 1, 2024, each of our NEOs had either satisfied the requisite level of ownership or had yet to reach the end of the five-year period from the time of appointment.
PHINIA RECOGNITION AWARDS
Compensation Recovery Policy As required by NYSE listing standards, our Board adopted the PHINIA Inc. Compensation Recovery Policy (Clawback Policy), which requires recovery of certain erroneously awarded incentive-based compensation received by our executive officers in the event of an accounting restatement. Incentive-based compensation received by the executive during the three completed fiscal years preceding the date the Company is required to prepare an accounting restatement will be subject to reduction or reimbursement to the Company as provided pursuant to the terms of the Clawback Policy. Restrictions on Short Sales, Hedging, and Pledging of Stock Generally, our Insider Trading and Confidentiality Policy (Insider Trading Policy) prohibits our directors and employees from (i) engaging in any transaction involving a publicly traded put, call, or other option on PHINIA securities, (ii) selling any PHINIA securities they do not own (i.e., “selling short”), (iii) entering into “derivative” transactions, including exchange-traded put or call options, and (iv) engaging in hedging or monetization transactions, such as collars or forward sale contracts. In addition, directors and executive officers may not (i) enter into any transactions that result in pledging or using PHINIA securities as collateral to secure personal loans or other obligations or (ii) hold PHINIA securities in margin accounts, except for extraordinary reasons and after an exception is granted by the General Counsel and Chair of the Committee. Executive Benefits and Retirement Plan Our NEOs are eligible to participate in employee benefit plans on the same basis as other employees, such as: medical, dental, and vision care plans; health care flexible spending accounts; life, accidental death and dismemberment, and disability insurance; employee assistance programs; and a defined contribution retirement plan, including a 401(k) feature. In 2023, following the Spin-Off, our eligible employees (including our NEOs) continued to participate in the BorgWarner Inc. Retirement Savings Plan (BorgWarner Retirement Savings Plan) pursuant to the Transition Services Agreement between BorgWarner and PHINIA. Effective January 1, 2024, PHINIA established the PHINIA Inc. Retirement Savings Plan (PHINIA Retirement Savings Plan) which provides for similar benefits and provisions to those offered by BorgWarner. Our U.S.-based executives who exceed the limits under the qualified plans referenced above (i.e., the BorgWarner Inc. Retirement Savings Plan prior to January 1, 2024, and the PHINIA Retirement Savings Plan effective January 1, 2024), participate in an excess benefit plan. Similar to the plans above, our eligible employees participated in the BorgWarner Inc. Retirement Savings Excess Benefit Plan (BorgWarner Excess Plan) pursuant to the Transition Services Agreement until January 1, 2024 when the PHINIA Inc. Amended and Restated Retirement Savings Excess Benefit Plan (PHINIA Excess Plan) went into effect. The provisions of the PHINIA Excess Plan largely mirror those of the BorgWarner Excess Plan. All of our NEOs received Company contributions under the BorgWarner Excess Plan in 2023. For further detail, refer to the Non-Qualified Deferred Compensation Table. Limited Perquisites Executive perquisites for our U.S.-based NEOs are limited to a taxable annual perquisite allowance ($50,000 for our CEO, $35,000 for our CFO, and $25,000 for each of our other NEOs). We generally do not provide tax gross-ups on benefits or perquisites, except in limited circumstances relating to international assignments. Change of Control and Severance Plans and Agreements We have entered into Change of Control Employment Agreements (CoC Agreements) with each of our NEOs and certain other executives. In establishing the CoC Agreements, our Board determined that it is in the best interests of the Company and our shareholders to: (i) maintain NEOs’ continued dedication in the event of either a contemplated or actual change of control; and (ii) provide two years of compensation to NEOs terminated in connection with a change of control so as to focus their attention on executing the transaction rather than their personal circumstances affected by a change of control (including in the event of their termination of employment without cause or for good reason in connection with a change of control). A description of such compensation and severance payments and benefits is described in this Proxy Statement under Potential Payments Upon Termination or Change of Control. The CoC Agreements: (i) do not provide for excise tax gross-up provisions; (ii) allow a portion of any benefit received in connection with a change of control to be attributable to a non-compete agreement to reduce the potential for the excise tax; and (iii) require an executive to forego a portion of change of control payments that could otherwise trigger excise tax if such reduction would be beneficial to the executive.
PHINIA RECOGNITION AWARDS
Each of our NEOs is eligible for severance benefits under the PHINIA Inc. Transition Income Plan (TIP). We established the TIP to provide limited severance payments to all U.S. salaried employees in the event their employment is terminated due to a restructuring or reduction in work force, or the permanent elimination of a position. The TIP benefit includes a lump sum payment that is based on length of service (with a maximum benefit of 26 weeks of base salary) and medical coverage if eligible, subject to an employee’s execution, and non-revocation, of a release of claims against the Company. In no event would an NEO receive a payment under both the CoC Agreement and the TIP. Treatment of Equity in the Event of a Change of Control The CoC Agreements and RSA and RSU award agreements provide for double-trigger vesting upon a change of control. Specifically, to the extent the acquiror in a change of control transaction assumes, on an equivalent basis outstanding equity-based awards, these awards will not automatically be subject to accelerated exercisability, vesting, or settlement upon the change of control. Rather, vesting will occur upon the participant’s termination of employment if they are terminated by the Company (or its successor) without cause or if the participant terminates their employment for good reason during the two-year period following the change of control. In the case of assumed awards that vest based on the attainment of performance goals, if the change of control occurs during the applicable performance period, then (i) the performance goals will be deemed to have been satisfied at the target award level or, if greater, as otherwise specified by the Committee at or after grant, and (ii) any assumed or substituted award will not include a performance goal, unless otherwise determined by the Committee. If the acquiror in the change of control transaction does not assume the awards or issue replacement awards, then upon the date of the change of control, RSAs and RSUs will become fully vested. For awards that vest based on the attainment of performance goals and that are not assumed by the acquiror, the goals will be deemed to have been achieved at target levels, and the relevant performance period will be deemed to have ended on the effective date of the change of control (if, due to the change of control, a performance period is shortened, then the awards will vest on a pro rata basis). Compensation Risk Management Each year, our Committee will oversee a risk assessment of the Company’s executive compensation program, supported by our independent compensation consultant, to confirm that our compensation program and practices do not create risks that are reasonably likely to have a material adverse effect on the Company. Our executive compensation program currently includes and is anticipated to include several features that mitigate unnecessary risk-taking, including: (i) a balance of short- and long-term incentives, with long-term incentives comprising the majority of our executives’ target direct compensation; (ii) a mix of performance metrics associated with our incentives; (iii) clawback provisions; and (iv) stock ownership requirements.
Summary Compensation Table (2023 and 2022)
Summary Compensation Table (2023 and 2022) The following table presents compensation information for each of our NEOs. Prior to the Spin-Off on July 3, 2023, such amounts were paid by BorgWarner. Beginning July 3, 2023, amounts were paid by PHINIA.
Summary Compensation Table (2023 and 2022)
| Name & Principal Position | Year | Salary ($) | Bonus(1) ($) | Stock Awards(2) ($) | Non-Equity Incentive Plan Compensation(3) ($) | Change in Pension Value & Nonqualified Deferred Compensation Earnings ($) | All Other Compensation(4) ($) | Total ($) | | Brady D. Ericson | 2023 | 781,250 | — | 5,891,782 | 976,500 | — | 530,511 | 8,180,043 | | President and CEO | 2022 | 668,750 | — | 2,028,631 | 1,279,800 | — | 287,661 | 4,264,842 | | Chris P. Gropp | 2023 | 423,996 | 169,752 | 993,558 | 325,500 | — | 411,767 | 2,324,573 | | VP and CFO | 2022 | 337,033 | — | 199,273 | 189,832 | — | 306,573 | 1,032,711 | | Robert Boyle | 2023 | 357,808 | 166,560 | 547,792 | 183,675 | — | 404,834 | 1,660,669 | | VP, General Counsel and Secretary | 2022 | 329,840 | — | 193,740 | 192,760 | — | 928,513 | 1,644,853 | | Todd L. Anderson | 2023 | 341,484 | 162,225 | 413,062 | 145,287 | — | 534,565 | 1,596,623 | | VP and CTO | 2022 | 322,088 | — | 188,207 | 211,032 | — | 605,489 | 1,326,816 | | Alisa Di Beasi | 2023 | 344,646 | 155,304 | 524,466 | 165,075 | — | 86,113 | 1,275,604 | | VP and CHRO | 2022 | 315,748 | — | 199,273 | 191,642 | — | 60,751 | 767,414 |
Summary Compensation Table (2023 and 2022)
(1)Cash retention bonus payments equal to six months of annual base salary (as in effect on April 1, 2022) made in July 2023, pursuant to retention agreements entered into between BorgWarner and each NEO (other than Mr. Ericson) to secure the NEOs' employment through the consummation of the Spin-Off. (2)Reflects the aggregate grant date fair value of stock awards calculated in accordance with ASC Topic 718, excluding the effect of estimated forfeitures. 2023 stock awards consisted of: (i) PSUs granted by BorgWarner to Mr. Ericson prior to the Spin-Off that were converted to PHINIA RSU awards following the Spin-Off; (ii) RSA awards granted by BorgWarner to all NEOs prior to the Spin-Off that were converted to PHINIA RSA awards following the Spin-Off; and (iii) the Recognition Awards granted by PHINIA to all NEOs in the form of RSAs following the Spin-Off. The terms of the 2023 stock awards are summarized in the CD&A under “NEO Compensation—Long-Term Equity Incentives.” A discussion of the relevant assumptions is set forth in Note 18 to the consolidated financial statements set forth in the Annual Report. Assuming the PSU awards granted by BorgWarner to Mr. Ericson had not been converted and the highest level of performance was achieved, the maximum value of his PSU awards at the grant date would have been $2,484,115. (3)Cash payments made under the BorgWarner MIP and PHINIA MIP with respect to 2022 and 2023 performance, respectively. (4)The amounts reported in the All Other Compensation column for 2023 include compensation under the following plans and programs.
Summary Compensation Table (2023 and 2022)
| | Ericson | Gropp | Boyle | Anderson | Di Beasi | | Perquisite Allowance(1) | 40,000 | 17,075 | 12,075 | 6,500 | 12,075 | | Vehicle Benefit | — | 5,525 | 425 | 10,465 | 5,525 | | BorgWarner Retirement Savings Plan(2) | 39,539 | 36,607 | 29,730 | 29,892 | 26,964 | | BorgWarner Excess Plan(3) | 251,002 | 44,087 | 27,225 | 30,841 | 25,619 | | Value of Dividends Accrued on Unvested Awards | 199,970 | 25,051 | 16,365 | 13,897 | 15,930 | | Costs Related to Prior International Assignments(4) | — | 283,422 | 319,014 | 442,970 | — | | Total | 530,511 | 411,767 | 404,834 | 534,565 | 86,113 |
Summary Compensation Table (2023 and 2022)
(1)Amounts provided on behalf of its NEOs during 2023 in the form of a taxable perquisite allowance, effective as of the Spin-Off.
Summary Compensation Table (2023 and 2022)
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Summary Compensation Table (2023 and 2022)
(2)Amounts credited on behalf of its NEOs during 2023 pursuant to the provisions of the BorgWarner Retirement Savings Plan in which our NEOs participated through December 31, 2023 pursuant to the Transition Services Agreement. (3)Amounts credited on behalf of its NEOs during 2023 pursuant to the provisions of the BorgWarner Excess Plan in which our NEOs participated through December 31, 2023 pursuant to the Transition Services Agreement. (4)For Ms. Gropp, reflects costs paid in 2023 related to an international assignment that ended in October 2022, including $212,001 related to taxes paid by the Company, $69,762 related to tax gross-ups, $1,500 related to tax preparation fees, and $159 related to housing. For Mr. Boyle, reflects costs related to an international assignment that ended in June 2023, including $138,802 related to taxes paid by the Company, $77,831 related to tax gross-ups, $82,670 related to housing, $14,505 related to relocation services, $2,935 related to host transportation, $1,731 related to host country pension costs, $390 related to immigration documentation assistance, and $150 related to bank wire fees. For Mr. Anderson, reflects costs related to his international assignment, including $381,778 related to taxes paid by the Company, $10,035 related to tax gross-ups, $42,084 related to housing, $3,554 related to relocation services, $3,200 related to expatriate spending account, $1,500 related to tax preparation fees, $423 related to immigration documentation assistance, and $396 related to goods and services differential.
Grants of Plan-Based Awards (2023)
Grants of Plan-Based Awards (2023) The following table presents additional information regarding plan-based compensation for 2023, disclosed in the Summary Compensation Table.
Grants of Plan-Based Awards (2023)
| Name | Grant Date | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Share) | Grant Date Fair Value of Stock and Option Awards ($) | | | | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | | | Brady D. Ericson | | 525,000 | 1,050,000 | 2,100,000 | | | | | | | | | | 4/26/2023(2) | | | | | | | 14,620 | | | 704,538 | | | 4/26/2023(3) | | | | 0 | 29,280 | 58,560 | | | | 1,641,730 | | | 8/29/2023(4) | | | | | | | 133,290 | | | 3,545,514 | | Chris P. Gropp | | 175,000 | 350,000 | 700,000 | | | | | | | | | | 4/26/2023(2) | | | | | | | 4,790 | | | 230,830 | | | 8/29/2023(4) | | | | | | | 28,674 | | | 762,728 | | Robert Boyle | | 98,750 | 197,500 | 395,000 | | | | | | | | | | 4/26/2023(2) | | | | | | | 4,334 | | | 208,855 | | | 8/29/2023(4) | | | | | | | 12,742 | | | 338,937 | | Todd L. Anderson | | 78,112 | 156,223 | 312,446 | | | | | | | | | | 4/26/2023(2) | | | | | | | 4,106 | | | 197,868 | | | 8/29/2023(4) | | | | | | | 8,090 | | | 215,194 | | Alisa Di Beasi | | 88,750 | 177,500 | 355,000 | | | | | | | | | | 4/26/2023(2) | | | | | | | 4,562 | | | 219,843 | | | 8/29/2023(4) | | | | | | | 11,452 | | | 304,623 |
Grants of Plan-Based Awards (2023)
(1)Represents threshold, target, and maximum annual cash incentive amounts that could have been earned based on Company performance pursuant to 2023 awards originally granted under the BorgWarner MIP that were replaced and granted under the PHINIA MIP. The amounts of annual cash incentive awards earned in 2023 by our NEOs were determined in February 2024, and are included in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table. (2)RSA awards granted by BorgWarner under the BorgWarner 2023 Stock Incentive Plan to all NEOs in 2023 prior to the Spin-Off that were converted to PHINIA RSA awards under the Stock Incentive Plan on July 18, 2023 following the Spin-Off. See “Post-Spin—PHINIA Replacement Awards” in the Decision-Making and Oversight section of the CD&A for details regarding pre-2023 BorgWarner awards that were converted to PHINIA awards following the Spin-Off. (3)PSUs granted by BorgWarner under the BorgWarner 2023 Stock Incentive Plan to Mr. Ericson in 2023 prior to the Spin-Off that were converted to PHINIA RSU awards under the Stock Incentive Plan on July 18, 2023 following the Spin-Off. See “Post-Spin—PHINIA Replacement Awards” in the Decision-Making and Oversight section of the CD&A for details regarding pre-2023 BorgWarner awards that were converted to PHINIA awards following the Spin-Off. (4)Recognition Awards in the form of RSAs granted by PHINIA under the Stock Incentive Plan to all NEOs following the Spin-Off.
Grants of Plan-Based Awards (2023)
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Outstanding Equity Awards at Fiscal Year-End (2023)
Outstanding Equity Awards at Fiscal Year-End (2023) The following table presents information regarding the number and value of unvested equity awards outstanding at December 31, 2023 for our NEOs.
Outstanding Equity Awards at Fiscal Year-End (2023)
| | Option Awards | | | | | Stock Awards | | | | | Name | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested(1) (#) | Market Value of Shares or Units of Stock That Have Not Vested(2) ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | | Brady D. Ericson | — | — | — | — | — | 308,545 | 9,345,828 | — | — | | Chris P. Gropp | — | — | — | — | — | 50,829 | 1,539,610 | — | — | | Robert Boyle | — | — | — | — | — | 33,175 | 1,004,871 | — | — | | Todd L. Anderson | — | — | — | — | — | 28,198 | 854,117 | — | — | | Alisa Di Beasi | — | — | — | — | — | 32,357 | 980,094 | — | — |
Outstanding Equity Awards at Fiscal Year-End (2023)
(1)Includes: (a) 2023 Replacement Awards in the form of RSAs, plus reinvested dividends, that have vested or will vest on February 28, 2024, 2025, and 2026; (b) for Mr. Ericson only, 2023 Replacement Awards in the form of RSUs, plus dividend equivalents, that will vest on December 31, 2024 and 2025; and (c) 2023 Recognition Awards in the form of RSAs, plus reinvested dividends, that will vest on August 29, 2025 and 2026. (2)Calculated by multiplying the number of shares or units by the closing price per share of the Company's common stock on December 29, 2023, which was $30.29.
Option Exercises and Stock Vested (2023)
Option Exercises and Stock Vested (2023) The following table presents information regarding the number and value of stock awards exercised or vested for our NEOs during 2023.
Option Exercises and Stock Vested (2023)
| Name | Option Awards | | Stock Awards | | | | Number of Shares Acquired on Exercise (#) | Value Realized On Exercise ($) | Number of Shares Acquired on Vesting(1) (#) | Value Realized On Vesting(2) ($) | | Brady D. Ericson | — | — | 110,225 | 3,606,841 | | Chris P. Gropp | — | — | 5,193 | 261,104 | | Robert Boyle | — | — | 5,533 | 278,199 | | Todd L. Anderson | — | — | 7,889 | 396,659 | | Alisa Di Beasi | — | — | 4,696 | 236,115 |
Option Exercises and Stock Vested (2023)
(1)For all NEOs, number of shares acquired upon vesting includes RSAs granted by BorgWarner in February 2020 and February 2021 as to which restrictions lapsed in February 2023. For Mr. Ericson, number of shares acquired upon vesting also includes Replacement Awards in the form of RSUs granted by PHINIA in July 2023 as to which restrictions lapsed in December 2023. (2)For the RSAs granted in February 2020 and February 2021 as to which restrictions lapsed in February 2023, the value realized on vesting is equal to the number of shares vested multiplied by the closing price per share of BorgWarner common stock on February 28, 2023 ($44.26). For Mr. Ericson's RSUs, the value realized on vesting is equal to the number of units vested multiplied by the closing price per share of the Company's common stock on December 29, 2023 ($30.19).
Option Exercises and Stock Vested (2023)
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Non-Qualified Deferred Compensation (2023)
Non-Qualified Deferred Compensation (2023) The following table presents information regarding the non-qualified deferred compensation activity for our NEOs during 2023.
Non-Qualified Deferred Compensation (2023)
| Name | Plan Name | Executive Contributions in Last FY ($) | Registrant Contributions in Last FY(1) ($) | Aggregate Earnings in Last FY(2) ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last FYE(3) ($) | | Brady D. Ericson | BorgWarner Excess Plan | — | 251,002 | 471,975 | — | 2,595,406 | | | BorgWarner Deferred Compensation Plan | — | — | 30,726 | — | 166,451 | | Chris P. Gropp | BorgWarner Excess Plan | — | 44,087 | 60,654 | — | 465,734 | | | BorgWarner Deferred Compensation Plan | — | — | 1,855 | — | 10,962 | | Robert Boyle | BorgWarner Excess Plan | — | 27,225 | 8,138 | — | 68,260 | | Todd L. Anderson | BorgWarner Excess Plan | — | 30,841 | 9,120 | — | 80,056 | | Alisa Di Beasi | BorgWarner Excess Plan | — | 25,619 | 8,672 | — | 71,764 |
Non-Qualified Deferred Compensation (2023)
(1)Amounts shown in this column represent benefits contributed for each NEO, which amounts are included in the “All Other Compensation” column in the Summary Compensation Table. (2)These amounts are not included in the Summary Compensation Table because they are not above market. (3)Amounts shown in this column in excess of the sum of the amounts from the preceding columns includes the following amounts reflected for 2022 included in the Summary Compensation Table: $192,988 for Mr. Ericson, $34,221 for Ms. Gropp, $19,503 for Mr. Boyle, $25,668 for Mr. Anderson, and $18,811 for Ms. Di Beasi. Prior to the Spin-Off, the NEOs participated in the BorgWarner Excess Plan. Pursuant to the Employee Matters Agreement between BorgWarner and PHINIA, the NEOs continued to participate in the BorgWarner Excess Plan through December 31, 2023. In connection with the Spin-Off and pursuant to the Employee Matters Agreement between BorgWarner and PHINIA, we established the PHINIA Excess Plan, effective January 1, 2024 as a "mirror excess benefit plan" to the BorgWarner Excess Plan, and assumed the obligations and liabilities under the BorgWarner Excess Plan that plan that were associated with the former BorgWarner employees and former employees who were associated with the PHINIA business, including the NEOs. The terms of the PHINIA Excess Plan are substantially similar to the terms of the BorgWarner Excess Plan that were in effect as of the date of such assumption of obligations. Both the BorgWarner Excess Plan and PHINIA Excess Plan were established to provide benefits to certain employees whose participation in and benefits under the applicable retirement savings plan were limited by provisions in the Internal Revenue Code. The PHINIA Excess Plan is an unfunded, non-qualified retirement plan, which keeps certain highly compensated U.S. employees whole with regard to Company contributions that are otherwise limited under the PHINIA Retirement Savings Plan by provisions in the Internal Revenue Code. Participation is automatic once these limits are reached in a plan year. The contributions vest in the same manner as under the PHINIA Retirement Savings Plan. Distributions are made following a participant’s separation from service, with distributions attributable to amounts earned or vested before January 1, 2005 distributed within 30 days after the participant’s separation from service, and amounts earned or vested after December 31, 2004 distributed in the seventh month following the month in which the participant’s separation from service occurs. No in-service withdrawals or loans are available. If a participant’s service with PHINIA is terminated because of dishonest conduct injurious to PHINIA, or if dishonest conduct injurious to PHINIA is identified by the Compensation Committee within one year after the participant’s service is terminated, the Compensation Committee may terminate the participant’s remaining interest and benefits under the plan (except with respect to the DC Plan Account described below). In connection with the Spin-Off, effective on January 1, 2024, we established and simultaneously merged into the PHINIA Excess Benefit Plan, the PHINIA Deferred Compensation Plan, such that certain participants in the PHINIA Excess Plan have a deferred compensation account under the PHINIA Excess Plan that reflects transferred account balances of such participants from a corresponding “frozen” BorgWarner deferred compensation plan (DC Plan Account). The DC Account feature is closed to new entrants, and no new deferrals were made during 2023 or are permitted to be made to the accounts of participants. The DC Plan Account feature was established as a "mirror deferred compensation plan" to assume the obligations and liabilities under BorgWarner’s frozen deferred compensation plan. Distributions are made based on the elections of participants, and may be elected to commence or occur upon the occurrence of (a) the first to
Non-Qualified Deferred Compensation (2023)
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Non-Qualified Deferred Compensation (2023)
occur of the participant's retirement or disability or (b) a specific scheduled date which is not earlier than five years after the end of the plan year in which the participant first commenced participation in the plan. Generally, no in-service withdrawals or loans are available, but in the event of a change in control (as defined for purposes of the DC Plan Account feature, a participant will receive a complete distribution of their account). PHINIA Excess Plan and PHINIA Deferred Compensation Plan balances can generally be notionally invested in the same investment options that are available to participants under the PHINIA Retirement Savings Plan. As these plans are unfunded, no money is actually invested. Rather, a notional account is maintained which mirrors the returns of these investments.
Potential Payments Upon Termination or Change of Control
Potential Payments Upon Termination or Change of Control The following table presents information regarding the post-employment payments that would be paid to each of our NEOs, including upon or following certain change of control related events. The calculations assume each NEO’s employment was terminated, and/or the change of control occurred, on December 29, 2023. For purposes of the calculations, the closing price per share of the Company's common stock on December 29, 2023 ($30.29) was used to determine the market value of RSUs and RSAs.
Potential Payments Upon Termination or Change of Control
| Name | Payment Triggering Events In Connection with a Change of Control and Other Events(1) | | | | | | | Change of Control only(2) ($) | Involuntary Termination | | Voluntary Termination | | | | | with Cause ($) | without Cause(3) ($) | with Good Reason(3) ($) | without Good Reason(4) ($) | | Brady D. Ericson | — | — | 14,432,480 | 14,432,480 | 919,150 | | Chris P. Gropp | — | — | 3,313,356 | 3,313,356 | 183,000 | | Robert Boyle | — | — | 2,419,088 | 2,419,088 | 152,013 | | Todd L. Anderson | — | — | 2,264,731 | 2,264,731 | 187,430 | | Alisa Di Beasi | — | — | 2,281,519 | 2,281,519 | 144,563 |
Potential Payments Upon Termination or Change of Control
(1)Amounts do not include life or disability insurance benefits or vested benefits under the PHINIA Retirement Savings Plan or under the TIP, as these benefits and benefit plans are available to all U.S.-based salaried employees. The provisions of each plan would determine the timing and method of payments made under the above scenarios. (2)No amounts are shown in this column based on the assumption that the acquiror in a change of control transaction would assume outstanding equity-based awards. (3)For all NEOs, amounts include cash severance payment based on two times the average of base plus bonus, value of prorated bonus in year of termination, value of unvested RSAs and RSUs, retirement benefit based on three times the 2023 Company contributions to the PHINIA Retirement Savings Plan, value of welfare benefits (i.e. medical, dental, and life insurance coverage) for 18 months, and outplacement services. Amounts do not reflect any impact from the potential imposition of any excise tax. (4)Amounts include prorated payment based on an average of past bonuses for year of termination. Change of Control Agreements We have entered into CoC Agreements with each of our NEOs. The CoC Agreements provide for certain employment compensation and severance payments and benefits in the event of a change of control. The employment period under the CoC Agreements begins from the date on which a change of control occurs and runs through the second anniversary of such date. The CoC Agreements also include certain employment terms and conditions that would apply during the employment period including relating to (a) annual base salary (which may not be reduced after an increase during the employment period), (b) annual bonus (which must be at least equal to the average of bonuses paid or payable to an executive under the MIP (or comparable successor or predecessor plan) for the last three full fiscal years), (c) participation in incentive, savings, and retirement and welfare benefit plans generally available to other peer executives, (d) reimbursement of reasonable expenses, and (e) continuation of fringe benefits in effect for such executive.
Potential Payments Upon Termination or Change of Control
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Potential Payments Upon Termination or Change of Control
In the event an NEO terminates employment for good reason, or the Company terminates an NEO’s employment with the Company other than for cause, death, or disability, within two years of a change of control or in anticipation of a change of control, the NEO is entitled to the following (in addition to accrued but unpaid amounts): •A lump sum cash amount equal to two times the sum of (i) their annual base salary and (ii) the average annual bonus paid or payable under the PHINIA MIP (or any comparable annual bonus under any predecessor or successor plan) for the three last full fiscal years; •A lump sum cash amount based on a prorated portion, for the portion of the year up to the date of termination, of the average annual bonus paid or payable under the PHINIA MIP (or any comparable annual bonus under any predecessor or successor plan) for the last three full fiscal years (Pro Rata Bonus); •A lump sum cash amount equal to two times the Company’s retirement and matching contributions that would have been made on their behalf in the first plan year ending after termination of employment; •Continuation of medical, dental, and life insurance benefits for 18 months; and •Outplacement services at a cost not to exceed $40,000. In the event of a termination of employment due to death or disability within two years of a change of control or in anticipation of a change of control, the Company must pay the executive (or their estate, in the case of death) accrued amounts and a Pro Rata Bonus in a lump sum generally within 30 days of termination, together with other applicable death and disability-related benefits. In the event the executive voluntarily terminates employment other than for good reason within two years of a change of control or in anticipation of a change of control, the Company must pay the executive accrued amounts and a Pro Rata Bonus in lump sum generally within 30 days of termination. The CoC Agreements also provide that, in the event of a change of control, any outstanding equity awards that are assumed or replaced by the acquiror in the change of control will not become vested on an accelerated, or “single-trigger,” basis solely as a result of the change of control. Instead, the assumed or replaced awards will continue in accordance with their terms (with performance goals deemed to have been satisfied at the target level for performance awards) and will become vested on an accelerated basis only if the Company terminates the NEO’s employment without cause or the NEO terminates employment for good reason within two years after the change of control. This is referred to as “double trigger” vesting. Any equity awards that are not assumed or replaced in the change of control will generally become vested (with performance goals deemed to have been satisfied at the target level for performance awards and on a pro rata basis if, due to the change of control, a performance period is shortened) upon the change of control. Executives forego a portion of change of control payments that could otherwise trigger Internal Revenue Code Section 4999 excise taxes, as the tax will not be “grossed-up” under the CoC Agreement, if such reduction in change of control payments would be beneficial to the executive. “Change of control” generally means: •the acquisition by any Person (as defined in the CoC Agreements) of beneficial ownership of 20% or more of either (i) the then-outstanding shares of our common stock, or (ii) the combined voting power of our then-outstanding voting securities entitled to vote generally in the election of our directors (with certain exceptions); •a change in the majority of our Board (provided, however that that any individual becoming a director subsequent to the date of the relevant CoC Agreement whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the incumbent Board shall be considered as though such individual were a member of the incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board); •consummation by the Company of a reorganization, statutory share exchange, merger or consolidation or similar transaction involving the Company or any of its subsidiaries or sale or other disposition of all or substantially all of the assets of the Company or the acquisition of assets or stock of another entity by the Company or any of its subsidiaries (each of the foregoing, a Business Combination), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities that were the beneficial owners, respectively, of the outstanding Company common stock and outstanding Company voting securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the entity resulting from such Business Combination in substantially the same proportions as their ownership, immediately prior to such Business Combination of the outstanding Company common stock and outstanding Company voting securities, as the case may be, (ii) no Person beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the entity resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such entity except to the extent
Potential Payments Upon Termination or Change of Control
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Potential Payments Upon Termination or Change of Control
that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the entity resulting from such Business Combination were members of the incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or •approval by the Company’s shareholders of a complete liquidation or dissolution of the Company. “Change of control period” means the period commencing on the date the CoC Agreement was entered into and ending on the third anniversary of such date; provided, however, that commencing on the date one year after such entry date, and on each annual anniversary of such date (each, a Renewal Date), unless previously terminated, the change of control period will be automatically extended so as to terminate three years from such Renewal Date, unless at least 60 days prior to the Renewal Date the Company gives notice to the executive that such period will not be so extended. “Cause” generally means the willful and continued failure of the executive to perform substantially the executive’s duties with the Company or one of its affiliates (other than any such failure resulting from incapacity due to physical or mental illness or following the executive’s delivery of a Notice of Termination for Good Reason (as described in the CoC Agreements)), after a written demand for substantial performance is delivered to the executive by the Board or the CEO of the Company which specifically identifies the manner in which the Board or CEO of the Company believes that the executive has not substantially performed the executive’s duties, or the willful engaging by the executive in illegal conduct or gross misconduct which is materially demonstrably injurious to the Company. “Good reason” generally means the assignment to the executive of any duties inconsistent with the executive’s position, authority, duties, or responsibilities or any other diminution in such position, authority, duties or responsibilities, our failure to comply with compensation or benefit provisions in the CoC Agreement, the requirement for the executive to be based at any office or other location other than as provided in the CoC Agreement or the Company requiring the executive to travel on Company business to a substantially greater extent than required prior to the effective date of the CoC Agreement, a purported termination by the Company of an executive’s employment other than as permitted under the CoC Agreement, or our failure to require any successor to us to comply with the CoC Agreement. Terminations Not Related to a Change of Control In the event of an involuntary termination without cause not in connection with either a change of control or performance-related issues, no additional payments are required to be made to NEOs except under the TIP, which applies to all U.S. salaried employees. Benefits provided under the TIP include a lump sum payment of up to six months’ base salary, plus payment of healthcare, dental, and vision benefit premiums required under COBRA for six months. In the event of termination of employment by retirement not in connection with a change of control, no additional payments are made to NEOs, as none of the NEOs are retirement eligible. Equity Award Agreements The terms of our employee restricted stock and restricted stock unit award agreements provide special vesting terms in certain circumstances. •In the event of death or disability, all unvested shares or units will immediately vest. •In the event of a qualifying retirement (on or after attaining age 55 with at least 10 years of service or with the written consent of the Company), the Committee may, in its sole discretion, cause all or a portion of the unvested shares or units to vest or, in the case of certain restricted stock awards, the award provides that a pro rata portion of the unvested shares will vest. As of December 29, 2023, Ms. Gropp is our only NEO who would meet the age 55 with 10 years of service requirement applicable to restricted stock awards (and we assume that the Compensation Committee would not exercise its discretion to deem any other NEO retiree eligible as of December 29, 2023 who did not similarly meet the age and service condition). Assuming Ms. Gropp satisfied the other conditions of the awards and the Compensation Committee determined to vest her awards to the fullest extent permitted by the express terms of the awards, the value of her restricted stock vesting on such date would be $753,282. •In the event of a change of control and a qualifying termination (without cause or for good reason) within two years following a change of control, the shares or units relating to an award will vest.
Potential Payments Upon Termination or Change of Control
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Potential Payments Upon Termination or Change of Control
We disclose below pay versus performance information, including the relationship between executive compensation actually paid, as calculated by SEC rules, and Company performance.
Pay Versus Performance Table
Pay Versus Performance Table
Pay Versus Performance Table
| Pay Versus Performance | | | | | | | | | | Year (a) | Summary Compensation Table Total for PEO (b)(1) | Compensation Actually Paid to PEO (c)(1)(2) | Average Summary Compensation Table Total for Non-PEO Named Executive Officers (d)(1) | Average Compensation Actually Paid to Non-PEO Named Executive Officers (e)(1)(2) | Value of Initial Fixed $100 Investment Based On: | | Net Income (h) | PHINIA Adjusted Operating Margin (i)(4) | | | | | | | Total Shareholder Return (f)(3) | Peer Group Total Shareholder Return (g)(3) | | | | 2023 | $8,180,043 | $9,382,637 | $1,714,367 | $1,737,186 | $83.97 | $97.97 | $102,000,000 | 10.1% |
Pay Versus Performance Table
(1)Mr. Ericson served as our principal executive officer (PEO) for 2023. For 2023, our non-PEO NEOs included Ms. Gropp, Mr. Boyle, Mr. Anderson and Ms. Di Beasi. (2)For 2023, the values included in this column for the compensation actually paid to our PEO and the average compensation actually paid to our non-PEO NEOs reflect the following adjustments to the values included in column (b) and column (d), respectively:
Pay Versus Performance Table
| PEO | 2023 | | Summary Compensation Table (SCT) Total for PEO (column (b)) | $8,180,043 | | - aggregate change in actuarial present value of pension benefits | 0 | | + service cost of pension benefits | 0 | | + prior service cost of pension benefit | 0 | | - SCT “Stock Awards” column value | 5,891,782 | | - SCT “Option Awards” column value | 0 | | + year-end fair value of equity awards granted in the covered year that are outstanding and unvested as of the covered year-end | 6,357,568 | | - change in fair value of equity awards granted in prior years that are outstanding and unvested as of the covered year-end | (51,145) | | + vesting date fair value of equity awards granted and vested in the covered year | 787,953 | | +/- change in fair value of equity awards granted in prior years that vested in the covered year | 0 | | - fair value as of prior-year end of equity awards granted in prior years that failed to vest in the covered year | 0 | | + dollar value of dividends/earnings paid prior to the vesting date on equity awards in the covered year | 0 | | + excess fair value for equity award modifications | 0 | | Compensation Actually Paid to PEO (column (c)) | $9,382,637 |
Pay Versus Performance Table
| Average for Non-PEO NEOs | 2023 | | Average SCT Total for Non-PEO NEOs (column (d)) | $1,714,367 | | - aggregate change in actuarial present value of pension benefits | 0 | | + service cost of pension benefits | 0 | | + prior service cost of pension benefits | 0 | | - SCT “Stock Awards” column value | 619,720 | | - SCT “Option Awards” column value | 0 | | + year-end fair value of equity awards granted in the covered year that are outstanding and unvested as of the covered year-end | 696,715 | | +/- change in fair value of equity awards granted in prior years that are outstanding and unvested as of the covered year-end | (6,269) | | + vesting date fair value of equity awards granted and vested in the covered year | 0 | | +/- change in fair value of equity awards granted in prior years that vested in the covered year | (47,907) | | - fair value as of prior-year end of equity awards granted in prior years that failed to vest in the covered year | 0 | | + dollar value of dividends/earnings paid prior to the vesting date on equity awards in the covered year | 0 | | + excess fair value for equity award modifications | 0 | | Average Compensation Actually Paid to Non-PEO NEOs (column (e)) | $1,737,186 |
Pay Versus Performance Table
| Proxy Statement | 2024 | | 67 |
Pay Versus Performance Table
(3)For 2023, total shareholder return for the Company and the peer group was calculated as the yearly percentage change in cumulative total shareholder return based on a deemed fixed investment of $100 at market close on July 5, 2023 and in accordance with Items 201(e) and 402(v) of Regulation S-K. For purposes of this pay versus performance disclosure, our peer group is the same peer group used for purposes of the performance graph included in the Company’s Annual Report, the S&P 600 Automotive Parts & Equipment Index (for purposes of this Pay Versus Performance section only, the Peer Group). (4)PHINIA Adjusted Operating Margin is defined in the Compensation Discussion and Analysis and is calculated as set forth in Annex A.
Pay Versus Performance Relationship Descriptions
Pay Versus Performance Relationship Descriptions The following graphical comparisons describe the relationships between certain figures included in the Pay Versus Performance Table for 2023, including: (a) a comparison between our cumulative total shareholder return and the total shareholder return of the Peer Group; and (b) comparisons between (i) the compensation actually paid (CAP) to the PEO and the average compensation actually paid to our non-PEO NEOs and (ii) each of the performance measures set forth in columns (f), (h) and (i) of the Pay Versus Performance Table. Relationship Between Compensation Actually Paid and Total Shareholder Return
Pay Versus Performance Relationship Descriptions
| ☐ | PEO CAP | ☐ | Avg Non-PEO NEO CAP | | | PHINIA TSR | | Peer Group TSR |
Pay Versus Performance Relationship Descriptions
Relationship Between Compensation Actually Paid and Net Income
Pay Versus Performance Relationship Descriptions
| ☐ | PEO CAP | ☐ | Avg Non-PEO NEO CAP | ☐ | Net Income |
Pay Versus Performance Relationship Descriptions
| 68 | | 2024 | Proxy Statement |
Pay Versus Performance Relationship Descriptions
Relationship Between Compensation Actually Paid and PHINIA Adjusted Operating Margin
Pay Versus Performance Relationship Descriptions
| ☐ | PEO CAP | ☐ | Avg Non-PEO NEO CAP | | PHINIA Adjusted Operating Margin |
Pay Versus Performance Relationship Descriptions
Tabular List of Financial Performance Measures The following table lists the financial performance measures that we believe represent the most important financial performance measures used to link compensation actually paid to our NEOs for 2023 to Company performance.
Pay Versus Performance Relationship Descriptions
| PHINIA Adjusted Operating Margin | | PHINIA Working Capital |
Pay Versus Performance Relationship Descriptions
| Proxy Statement | 2024 | | 69 |
Pay Versus Performance Relationship Descriptions
| Proposal 3 | | Advisory Approval of the Frequency of Future Advisory Votes on the Compensation of Our Named Executive Officers |
Pay Versus Performance Relationship Descriptions
In accordance with the requirements of Section 14A of the Exchange Act, PHINIA is requesting that our shareholders vote, on an advisory basis, on how frequently we should hold an advisory say-on-pay vote in the future. This “frequency” vote is required to be held at least once every six years. After careful consideration, the Board believes that we should hold an advisory say-on-pay vote every year. In reaching its recommendation, the Board concluded that an annual vote will continue to enable our shareholders to provide us with timely input on our executive compensation philosophy, policies, and programs. Shareholders may indicate whether they would prefer such vote to occur every “1 Year,” “2 Years,” or “3 Years,” or they may "Abstain" from voting. Although this vote is advisory and not binding, the Board and PHINIA highly value the opinions of our shareholders. We will consider the outcome of this vote when determining the frequency of future shareholder say-on-pay votes and expect to be guided by the voting option that receives the greatest number of votes, even if that option does not receive a majority vote. We expect to hold our next frequency vote at our 2030 annual meeting of shareholders.
Pay Versus Performance Relationship Descriptions
| | Our Board recommends that you vote for “1 Year” with respect to the frequency of future advisory votes on the compensation of our named executive officers. |
Pay Versus Performance Relationship Descriptions
| 70 | | 2024 | Proxy Statement |
Pay Versus Performance Relationship Descriptions
| Proposal 4 | | Ratification of the Appointment of PricewaterhouseCoopers LLP as Our Independent Registered Public Accounting Firm |
Pay Versus Performance Relationship Descriptions
The Audit Committee is directly responsible for the selection, compensation, and oversight of the work of our independent registered public accounting firm. To assure continuing audit independence and objectivity, the Audit Committee is involved in the selection of the firm’s lead engagement partner in accordance with SEC rules. Additionally, the Audit Committee has adopted a policy for pre-approving all auditing services and permitted non-audit services (including the fees and terms thereof) to be performed by the firm and assesses the impact the provision of any non-audit services may have on the firm’s independence. The Audit Committee has appointed PricewaterhouseCoopers LLP (PwC) as our independent registered public accounting firm to audit our consolidated financial statements for the fiscal year ending December 31, 2024. PwC effectively served as PHINIA's independent auditor prior to the Spin-Off and since 2022, while operating under BorgWarner. At the Annual Meeting, our shareholders are being asked to ratify the appointment of PwC as our independent registered public accounting firm for 2024. The Audit Committee believes the continued retention of PwC as our independent registered public accounting firm for 2024 is in the best interests of our Company and shareholders. Although we are not required to seek shareholder ratification of the appointment of PwC as our independent registered public accounting firm, we are submitting PwC's appointment to our shareholders for ratification at the Annual Meeting as a matter of good corporate practice and to provide a means by which our shareholders may communicate their opinions to the Audit Committee. If our shareholders do not ratify the appointment of PwC, the Audit Committee will reconsider the appointment. Even if the appointment is ratified, the Audit Committee may appoint a different independent registered public accounting firm at any time during the year if the Audit Committee determines such a change would be in the best interests of our Company and shareholders. Representatives of PwC are expected to be present at the Annual Meeting, will have an opportunity to make a statement if they desire to do so, and will be available to respond to appropriate questions.
Pay Versus Performance Relationship Descriptions
| | The Board recommends that you vote “FOR” the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm. |
Pay Versus Performance Relationship Descriptions
| Proxy Statement | 2024 | | 71 |
Pay Versus Performance Relationship Descriptions
PROPOSAL 4: RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Directors and Executive Officers
Directors and Executive Officers The following table presents information as of March 11, 2024, regarding the beneficial ownership of PHINIA's common stock by (i) each director and director nominee, (ii) each NEO, and (iii) all directors, director nominees, and executive officers as a group.
Directors and Executive Officers
| Name | Shares Beneficially Owned(1) | Percent of Class(2) | | Todd L. Anderson | 31,974 | * | | Robert Boyle | 37,909 | * | | Samuel R. Chapin | 17,130 | * | | Alisa Di Beasi | 36,098 | * | | Brady D. Ericson | 322,475 | * | | Chris P. Gropp | 62,927 | * | | Robin Kendrick | 28,670 | * | | Latondra Newton | 13,130 | * | | D’aun Norman | 13,130 | * | | Rohan S. Weerasinghe | 13,142 | * | | Roger J. Wood | 13,130 | * | | All directors, director nominees, and executive officers as a group (18 persons) | 696,054 | 1.50% |
Directors and Executive Officers
* Represents less than 1 percent of the total number of shares of common stock outstanding. (1)Amounts reflect beneficial ownership as calculated under SEC rules. Except as otherwise noted, the named persons have sole voting and investment power over the indicated number of PHINIA shares. Amounts also include all PHINIA shares held in trust over which the person has shared voting power or investment power. None of the shares are pledged by any person in this table. (2)Based on 46,334,055 shares of common stock outstanding as of March 11, 2024, the record date.
Directors and Executive Officers
| 74 | | 2024 | Proxy Statement |