DEF 14A of Preformed Line Products Co
Filed Mar 21, 2025 · FY20240001628280-25-014223
Board Composition
Board Composition In accordance with the Company’s Amended and Restated Code of Regulations, the maximum number of directors is nine, and the Company currently has nine directors. The Board of Directors is classified into two classes composed of four and five members each, with both classes serving staggered two-year terms. The next section sets forth an overview of each current Board member including a description of the particular experiences, qualifications, attributes and skills of the directors that led to the conclusion that each should serve as a director.
Board Composition
| 6 2024 Proxy Statement | PREFORMED LINE PRODUCTS COMPANY |
Board Composition
| PROPOSAL ONE: Election of Directors |
Board Composition
Four directors, Ms. Maegan A. R. Cross, Mr. Matthew D. Frymier, Mr. Richard R. Gascoigne and Mr. Robert G. Ruhlman, are serving terms that expire at this year’s annual meeting of shareholders and have been nominated by the Board of Directors upon the recommendation of a majority of the Company’s independent directors, for re-election at the meeting to a term that expires in 2027. At the annual meeting of shareholders, the shares represented by proxies, unless otherwise specified, will be voted for these four nominees. If, for any reason, any of the nominees are not a candidate when the election occurs (which is not expected), the Board of Directors expects that proxies will be voted for the election of a substitute nominee designated by the Board. Five of the Company's directors, Mr. Glenn E. Corlett, Mr. Michael E. Gibbons, Mr. R. Steven Kestner, Mr. J. Ryan Ruhlman, and Mr. David C. Sunkle are currently serving terms that expire in 2026. The following information is furnished with respect to each person nominated for election as a director and the directors continuing in office. The Board recommends that you vote “FOR” the following nominees:
Board Composition
| Maegan A R. Cross Age: 39 Director Since: 2017 Committees: Nominating (ex officio) | Background / Qualifications Ms. Cross is currently the Director of Development at Laurel School in Shaker Heights, Ohio, where she has worked since 2009. She is responsible for millions in outside revenue for the school, including annual, restricted, endowment and capital giving. She holds a Bachelor of Science from the College of Charleston and a Master of Business Administration from Ohio University, with a concentration in Finance. Her excellent project management skills and collaborative approach are key contributors to the Board’s efficiency. Ms. Cross is also a founding member of the UH Rainbow Babies & Children’s Foundation (RBCF) Associate Board, having served as Vice President, President and Trustee Chair. Currently, Ms. Cross serves the hospital as a Trustee for the RBCF and in a supporting role for UH's Fertility Clinic. Her strong desire to give back to her community ensures that the Company is focused on the community at large. Ms. Cross is the daughter of Robert G. Ruhlman, Executive Chairman of the Board, and sister to J. Ryan Ruhlman, director and executive officer of the Company. Ms. Cross' commitment to the Company and its shareholders is evident, having been exposed to the Company from a very young age and working for the Company between 2003 and 2008 within the Human Resources Department. | | Matthew D. Frymier Age: 55 Director Since: 2017 Committees: Audit, Compensation (Chair) | Background / Qualifications Mr. Frymier draws on more than 25 years’ experience in financial services and asset management, which adds to the expertise of the Board. He is currently the Managing Director of Financial Technology Partners since March 1, 2022. During his 17-year tenure at Bank of America Corporation, Mr. Frymier led a principal investment division responsible for strategic investments and mergers and acquisitions targeted at building the Bank of America franchise, which aligns with the Company's approach to growth and acquisitions. His entrepreneurial spirit is evident in that he co-founded Corrum Capital Management, LLC, an alternative asset management firm in San Francisco, California, and Charlotte, North Carolina, in December 2013, which he departed in 2018. In addition, he recently served as a Director and Chairman of the Chicago Stock Exchange and as a Director of numerous other companies including FXAll, Incapital and BATS Global Markets over the last 15 years. Mr. Frymier’s extensive prior board experience has honed his ability to exercise independent judgment and engage in strategic decision-making. |
Board Composition
| 7 2024 Proxy Statement | PREFORMED LINE PRODUCTS COMPANY |
Board Composition
| Richard R. Gascoigne Age: 75 Director Since: 2009 Committees: Audit, Compensation, Nominating | Background / Qualifications Mr. Gascoigne brings more than 30 years of experience in the insurance industry and is well suited to be a board member given his expertise in risk management and compliance. He was Managing Director at Marsh Inc., subsidiary of Marsh & McLennan Co. from 1995 until his retirement in 2008. He held numerous positions during his career at Marsh, including two years as regional compliance officer. He has extensive experience in commercial property and casualty underwriting, specifically focusing on middle market companies. In addition, he has provided risk management consulting to clients during product development, acquisitions and market introductions. The Company values his strong risk management and compliance experience. He is skilled at monitoring the Company’s implementation of and adherence to its policies. His thoughtfulness in decision-making coupled with his willingness to thoroughly discuss issues make him a fitting member of the Board, as well as the Audit, Nominating, and Compensation Committees. | | Robert Ruhlman Age: 68 Director Since: 1992 | Background / Qualifications Mr. Ruhlman started with the Company over 40 years ago as an Associate Engineer. Over his years of service with the Company, he has held various positions including Manufacturing Administrator (1985), New Venture Coordinator (1987), Vice President of Corporate Planning (1988), President (1995), Chief Operating Officer (1995) and, most recently, Chief Executive Officer (2000). He was appointed as Chairman of the Board in 2004 and Executive Chairman effective January 1, 2024. These positions have given Mr. Ruhlman exposure to almost every aspect of the Company, from manufacturing to marketing. He has had ample experience and intimate knowledge of not only the Company itself, but also working with its customers. He has also been lauded for his clear thinking and ability to distill vast information into its critical components. Finally, his leadership fosters a Board culture of open discussion to support sound decision-making. Mr. Ruhlman is the father of J. Ryan Ruhlman, a director and executive officer of the Company, and Maegan A. R. Cross, a director of the Company. |
Board Composition
| 8 2024 Proxy Statement | PREFORMED LINE PRODUCTS COMPANY |
Board Composition
The terms of the current directors below will not expire at the 2026 annual meeting.
Board Composition
| Glenn E. Corlett Age: 81 Director Since: 2017 Committees: Audit, Compensation | Background / Qualifications Mr. Corlett’s business experience commenced over 40 years ago, when he joined Price Waterhouse where he served as a partner until 1990. Since that time, Mr. Corlett had served as the Chief Financial Officer and later the Chief Operating Officer for N.W. Ayer, a major international advertising agency before he became a Professor of Accounting at Ohio University, and the Dean and Philip J. Gardner Leadership Professor at the College of Business at Ohio University from July 1997 through June 2007. Mr. Corlett’s tenure at Ohio University’s Business School has given him the necessary credentials to be a contributing member of the Board, not only from an accounting aspect, but also in general business management. Mr. Corlett has lectured and written on accounting, auditing and executive compensation. Mr. Corlett’s zest for understanding the Company’s financial statements, while providing sound business advice, keeps him in a close working relationship with senior management. In addition, his oversight experience facilitates his role in reviewing the Company’s compensation policy and ensuring that management is compensated in a manner consistent with the compensation policy and in accordance with the relevant laws. | | Michael E. Gibbons Age: 72 Director Since: 2008 Committees: Audit (Chair), Compensation | Background / Qualifications Mr. Gibbons began his career with McDonald & Company, where he quickly rose to the level of general partner and then senior vice president. From there, he became president and CEO of a leading regional securities and investment banking firm in Houston, Texas. Soon after that, he founded Brown Gibbons Lang & Company, where he provides an active senior role to client engagements and business development opportunities. He knows how to provide workable solutions to the Company. From his leadership of an investment bank, he is well-suited to provide counsel on trends in the debt and equity markets, the integrity of the financial statements, and the performance of our independent registered public accounting firm. This business acumen and experience ensures that he is qualified, not only as a member of the Board, but also as the Chairman of the Audit Committee and a member of the Compensation Committee. |
Board Composition
| 9 2024 Proxy Statement | PREFORMED LINE PRODUCTS COMPANY |
Board Composition
| R. Steven Kestner Age: 70 Director Since: 2008 Committees: Nominating (Chair) | Background / Qualifications Mr. Kestner retired as senior partner with the national law firm of Baker & Hostetler LLP, a firm he joined in 1979. Mr. Kestner served as Chairman of Baker & Hostetler and chaired the firm’s Policy Committee, which functions as the board of directors for the law firm, from 2004 to 2018. As Chairman, Mr. Kestner was the chief executive officer of the firm and his responsibilities included managing the firm’s operations, finance and strategic growth. In addition, prior to becoming Chairman of the firm, he served in several management positions, including Policy Committee member and Chair of the firm’s National Business Practice Group, while developing an active legal practice focusing primarily on transactions, financings and securities law matters. Mr. Kestner advised and represented clients in the areas of domestic and foreign mergers and acquisitions, and he regularly worked with public and private companies. He worked closely with NYSE and NASDAQ listed companies. Mr. Kestner’s securities law work included registration statements under the Securities Act of 1933 with respect to both debt and equity financings and annual and periodic reports and proxy statements under the Securities Exchange Act of 1934. He is valued for his thoughtful analysis and ability to provide the Board with various perspectives based on his depth of experience with similar companies. | | J. Ryan Ruhlman Age: 41 Director Since: 2016 | Background / Qualifications As the great-grandson of the founder and the son of the Executive Chairman of the Board, Robert G. Ruhlman, Mr. J. Ryan Ruhlman has been part of the Company throughout his life. He began working for the Company in January 2002 as a part-time Laboratory Technician while attending college, and continued his career at the Company after graduation, working in various roles in Research and Engineering, Manufacturing, and International Operations. He was promoted, in December 2015, to Vice President, Marketing and Business Development where he is responsible for Special Industries, Distribution and Transmission Markets, as well as Marketing Communications. Prior to that, he was promoted to Director, Marketing and Business Development in January 2015, which included responsibilities for Special Industries, Distribution and Transmission Markets, as well as Marketing Communications. He was elected President in 2023, and his responsibilities expanded to include the responsibility for the America region, as well as Corporate Human Resources, and consolidating the Company's Global Business Development team. He has served a variety of positions in Research and Engineering, International and Marketing and Sales departments since 2002, including Laboratory Technician, International Operations Project Specialist, Business Development Specialist and Manager of New Business Development and Marketing Communications. Mr. Ruhlman has developed an understanding of strategic and tactical business issues that include operations, manufacturing, marketing, and business development. Furthermore, he possesses an understanding of the innovation necessary to grow the Company. Mr. Ruhlman is the brother to Maegan A. R. Cross, a director of the Company. |
Board Composition
| 10 2024 Proxy Statement | PREFORMED LINE PRODUCTS COMPANY |
Board Composition
| David C. Sunkle Age: 67 Director Since: 2020 Committees: Nominating | Background / Qualifications In 1978, Mr. Sunkle began his career at the Company as a Lab Technician. Over the next 42 years, he held various positions including Project Engineer, Lab Supervisor, Director of International Operations, and Director of Research and Engineering. He retired in December 2020, as Vice President, Research, Engineering and Manufacturing, which included the R&E department, manufacturing, as well as the Global Sourcing Team and the Intellectual Technology Department. Mr. Sunkle has been a member of Institute for Electrical and Electronics Engineer (IEEE) since 1990, while writing standards for that organization (e.g., Damper testing, OPGW, ADSS), as well as a member of International Council on Large Electric Systems (CIGRE) since 1989 where he was also convenor of various task forces. Finally, he has been a member of the American Society of Mechanical Engineers for 40 years, and has authored many papers for CIGRE, the International Cable and Wire Symposium and other industry groups. He was nominated to the Board of Directors in 2020. Mr. Sunkle has proven personal and professional ethics and integrity and has made significant contributions to the Company’s success. Given his deep operations and technological experience with the Company, he contributes key insights to the Board. |
Board Composition
The Board has determined that Messrs. Corlett, Frymier, Gascoigne, Gibbons, Sunkle and Kestner are independent under the NASDAQ’s corporate governance rules. In the opinion of the Board, Mr. Kestner’s affiliation with Baker & Hostetler LLP, a law firm that regularly provides legal services to the Company, does not interfere with Mr. Kestner’s exercise of independent judgment in carrying out his duties as a director of the Company.
Board Composition
| 11 2024 Proxy Statement | PREFORMED LINE PRODUCTS COMPANY |
Board Composition
| Board Committees and Meetings |
Compensation Discussion and Analysis
Compensation Discussion and Analysis Highlights of the Compensation Program •Maintain an executive compensation program to mitigate undue risk •Award annual incentive compensation subject to achievement of objective and pre-established performance goals tied to operational and strategic objectives •Ensure that at least 50 percent of CEO’s target core compensation is at risk •Benchmark officer compensation around the market median •Maintain stock ownership guidelines for directors and officers that align the interests of the executive officers with the long-term interests of the shareholders Role of the Compensation Committee The Compensation Committee (the “Committee”) administers the Company’s executive compensation programs. The Committee’s primary role is to oversee the Company’s compensation and benefit plans and policies for its elected executive officers, including the executive officers listed in the Summary Compensation Table below (“NEOs”) who are the Company’s principal executive officer (Robert G. Ruhlman, Executive Chairman), principal financial officer (Andrew S. Klaus, Chief Financial Officer) and the three other most highly compensated executive officers. The Committee reviews and approves all executive compensation decisions relating to the officers, including all NEOs. In the performance of its duties, the Committee has the authority to allocate all or any portion of its responsibilities and powers to any one or more of its members and may delegate all or any portion of its responsibilities and powers to a committee formed for that purpose, subject to approval from the entire Board. Additionally, the Committee may select and appoint outside consultants to assist it. Philosophy of the Compensation Program The philosophy of the Committee is to provide a compensation program that will attract, motivate and retain key members of the leadership team in order to give the Company a competitive advantage while ensuring the success and growth of the Company. The compensation program should ensure that a significant portion of compensation directly relates to the Company’s performance by tying annual cash bonuses and long-term incentive awards to Company performance. The compensation program is intended to motivate the officers to enable the Company to achieve its short-term and long-term business goals. The Committee has three goals to guide it in this endeavor: (a) compensation paid to officers should align with the performance of the Company on both a long- and short-term basis; (b) compensation should be competitive within the employment environment; and (c) compensation should reward officers for meeting performance targets. Compensation Program The Committee strives to craft a compensation program that pays the officers at competitive levels reflective of their individual responsibilities while maintaining consistency and pay equity among the individual officers. The Committee conducts an annual review of the compensation program, including changes in the overall composition of the management team and the responsibilities of the individual officers, to ensure that the compensation is competitive within the market, supports retention objectives and is internally equitable. Reliance upon various tools, and the findings from such tools, assists the Committee in its analysis, and leads to decisions regarding the mix of the various compensation elements to be included. Additionally, the cost of the compensation program is considered, in recognition that the optimal compensation program motivates employees to improve Company results on a cost-effective basis. Typically, the Committee finalizes compensation elements for a calendar year in December of the prior year. Tools and Findings from Analysis. The Committee relies upon several tools to analyze the compensation program internally and within the competitive landscape. Historically, these tools have been outside data compiled by various consultants, tally sheets detailing overall compensation packages for each individual officer and discussions with the CEO regarding performance levels and goals. The Committee also considers the results of the most recent non-binding advisory “say on pay” vote of the Company’s shareholders on executive compensation.
Compensation Discussion and Analysis
1.Consultant. The Committee has the authority to retain its own advisor. For 2024, the Committee did not retain an advisor. 2.External Data. The Committee generally strives to compensate the officers at median within a few years of service. The Committee generally relies upon various independent surveys, which are matched to specific positions with similar functional descriptions as those for the officers. The Committee reviews surveys primarily to gain perspective on how the Company’s executive compensation compares to other similarly-sized companies so that it can assess whether the Company’s pay levels are generally competitive and represent a reward for strong performance. For 2024, the Committee utilized the Willis Towers Watson annual compensation level survey. Using this independent survey, the Committee analyzed the compensation paid to officers, including the CEO, compared against the compensation paid to executives holding equivalent positions in the peer classification group, consisting of surveyed manufacturing industry companies with revenue between $500 million and $1 billion (the “Peer Group”). The Committee reviews base salary and total compensation at the 25th, median and 75th percentile levels to highlight where the Company’s compensation is relative to peers for competitive purposes and considers the individual’s experience and performance and the Company’s results. For 2024, the officers, including the CEO, were between the 25th and 75th percentile when reviewing base salary alone, which reflects the range of the years of experience of the officers in their respective roles, and the Committee increased the salaries of the NEOs other than the Executive Chairman based on those factors. The Committee also reviews total cash compensation, which includes salary and the maximum available bonus for the officers, and compares that data with the Peer Group data. The Committee does not engage in specific benchmarking when comparing total compensation to the Peer Group because of the experience level and tenure of certain executives and a significant portion is tied to the Company’s performance, which can cause a great variation relative to the amounts paid by comparable companies with different performance results. As a result, the Committee considers the total compensation paid by other companies in the Peer Group to ensure that the Company’s pay is competitive and to assess whether its payout levels for strong performance represent an incentive to achieve such performance. For 2024, total compensation of the officers was found to align near the median depending on the actual payout to be achieved. 3.Results of 2023 Say on Pay Vote and the Say on Frequency Vote. The 2023 annual meeting included a non-binding advisory “say on pay” vote on executive compensation and a non-binding advisory “say-on-frequency” vote regarding the frequency at which the Company will ask its shareholders to provide the advisory vote on executive compensation. Although these votes were non-binding, the Board of Directors and the Committee value the opinions of the shareholders and consider the outcome of the say on pay vote when making compensation decisions for the NEOs. The Company’s compensation program received an affirmative vote from over 97% of the Company’s common shares who voted at the 2023 annual meeting and the Board and the Committee have considered this perspective with respect to executive compensation decisions. Additionally, the shareholders approved holding the vote on the compensation of the NEOs every three years. 4.Discussions with the Executive Chairman. The Executive Chairman performs a yearly evaluation of the performance of each officer. The Executive Chairman's assessment of each officer’s individual performance forms the basis for the proposed compensation levels of each officer (other than the Executive Chairman), while also considering the information derived from the Willis Towers Watson survey. The Executive Chairman provides an evaluation for each officer (other than the Executive Chairman) that includes his recommendations for salary adjustments for the subsequent year to the Committee, which weighs these recommendations in determining salary levels of the officers (other than the Executive Chairman). Compensation Elements. The Company recognizes that its success depends, in large part, on a leadership team with the skills and commitment necessary to successfully manage a global organization. The compensation program assists in achieving this objective by relying on the elements of compensation detailed below. Certain elements are designed to enable the Company to attract and retain the officers with the skills to anticipate and respond to the market, while other elements are intended to motivate the officers to achieve financial results to enhance shareholder value. The Company’s 2024 compensation program for officers consisted of the following elements: •Base salaries; •Annual cash incentive awards; •Long-term equity grants; •Retirement benefits; and •Health and welfare benefits.
Compensation Discussion and Analysis
The Company structures the total compensation program so that its reliance on any particular element of compensation is flexible. Thus, the compensation program strives to meet the goals outlined above, by balancing short-term (i.e., base salaries and annual cash incentive awards) and long-term incentives (i.e., long-term equity grants), competitively in the market and to address the volatility in the Company’s performance due to external factors. There is no difference in the policies and their application for each of the officers, except for the Executive Chairman and CEO. Base Salaries. The Company’s goal is to establish salaries at a level sufficient to attract and retain talented executives. This goal is based on the Company’s belief that it is important to maintain salary levels near a midpoint of comparable company executives to be competitive within the general market and the Peer Group. Annual Cash Incentive Awards. The annual cash incentive award is designed to motivate and reward the officers for their contributions to the Company’s performance by making a significant portion of their total compensation variable and dependent upon the Company’s annual financial performance. It is tied directly to the financial performance of the Company on a sliding scale of return on shareholders’ equity. The Committee believes that compensating management by aligning compensation with shareholders’ return on their investment is an effective way to connect the achievement of performance goals and to encourage growth in the Company while rewarding officers for their contributions. The calculation is based on the Company’s pre-tax income as a percentage of average shareholder’s equity (adjusted for foreign currency translation) and assessed over a range of 3% to 11%. The implied target is 7%, which assumes a linear, symmetrical bonus curve with one-half of the maximum bonus earned at the midpoint of the performance range. From this calculation, the awards are determined based on a schedule that provides certain percentages to be applied to base salaries. The Company’s calculation for the annual cash incentive award for 2024 was 12.3%, which resulted in a payout of 100% for the Executive Chairman, CEO, CFO, and President and 85% for the other NEOs. For 2024, the maximum bonuses are 100% of salary for the Executive Chairman, CEO, CFO, and President (which were increased from 85% for the CEO, CFO and President for 2024) and 85% of salary for the other officers. Additionally, discretionary cash bonuses can be provided for extraordinary contributions to the Company’s financial performance through exemplary leadership in challenging circumstances. These are provided only when such circumstances warrant. No such bonus was paid out in 2024. Long-term Equity Grants. The Committee has the discretion under the Company’s equity award plan to set the amounts and terms of any equity compensation and may vary the equity award program from year to year to address the Company’s then-current compensation objectives and strategic goals. The Committee believes that the Company’s shareholders will be well served if a greater percentage of the long-term equity incentive program is related to achievement of the Company’s Board-approved strategic objectives. To that end, the “balanced LTI program” consisting of service vested RSUs and performance vested RSUs is a way to achieve its objectives. Generally, performance-vesting aligns executive long-term incentive rewards more directly with shareholders’ interests since achieving strategic objectives is a better measure of management’s performance than the volatility of the stock market. Furthermore, the Committee believes that the shareholders are served well by decisions that further the Company’s long-term strategic plan. The Committee also believes that the Executive Chairman and CEO’s long-term incentive should generally be 100% dependent on the achievement of the Company’s strategic objectives. Nevertheless, the Committee believes that it is appropriate to include some service vested RSUs in the long-term incentive program of the other officers to encourage retention of key executives over the duration of a business cycle. Additionally, the Company has mandatory share ownership guidelines, as discussed below. Long-term incentive grants are issued under the 2016 Stock Incentive Plan (the “2016 LTIP” or “2016 Plan”), which was approved by the Board and by the shareholders in 2016. If the Company's 2025 Incentive Plan is approved by shareholders at this meeting, long-term incentive grants will be made under such plan going forward. The Executive Chairman and CEO’s typical annual equity compensation awards are performance-based RSUs, vesting in three years based upon achieving performance standards approved at the time of the grant by the Board. The typical annual equity compensation awards to the other participants are as follows: two-thirds of the award is performance-based RSUs, vesting in three years based on achieving performance standards approved at the time of the grant by the Board, and one-third of the award is service- based RSUs, vesting three years after the date of the grant based solely on continued employment by the Company. The Committee chose to emphasize performance over three years (rather than weigh performance and service equally) because it believes this approach aligns the Company’s performance with shareholders’ interests, while acknowledging the benefit from long-term service.
Compensation Discussion and Analysis
Compensation Discussion and Analysis For the performance-based RSUs, the number of shares in which the participant becomes vested will depend upon the specific level of growth in pre-tax income and sales growth measured over a specified period (historically, either one-year or three-year performance period). For the 2024 grants, the Committee once again analyzed the history of the RSU grants, and whether such grants effectively aligned the interests of the NEOs with the Company’s interests, taking into account industry data and input from officers regarding the Company’s markets, projections and costs. The Committee’s intention is to incentivize management to grow the Company while maintaining profit margins. The Committee uses a three-year base to measure growth during the performance period and, for 2024, established thresholds for pre-tax income growth of -7% to 0% and for sales growth ranging from 0% to 2%. Given the Company's very strong performance during 2023 and the decline in demand anticipated for 2024 due to elevated inventory levels in U.S. communications and energy markets and other market headwinds, the Committee believed this was an appropriate range of performance achievement for these growth measures. The Executive Chairman and CEO’s award is set at a target number of RSUs equal to 100% of their salary if the target performance is achieved, with a maximum award equal to 200% of their salary if the maximum performance is achieved. The awards to the other officers are as follows: the award is set at a number of RSUs equal to that percentage of the participant’s salary that is specified at the time of grant if the target performance is achieved. The maximum amount of the performance portion of the award is equal to the target award. The amount of the service-vested award that can be earned is equal to the target award. Each officer was granted the number of RSUs equal to the maximum level under the performance criteria. The threshold payout is at 25% of the maximum number of performance-based RSUs if the minimum level of both measures are achieved, the target is at 50% if both -3% growth in pre-tax income and 1% growth in sales are achieved, and the maximum is at 100% of the number of RSUs subject to the award if 0% growth in pre-tax income and 2% growth in sales are achieved at the end of the three-year period (with a range of payout from 50% to 200% for the Executive Chairman and CEO). If only one of the two measures is achieved at any of these levels, the vesting percentage is weighted to provide for some additional vesting for achieving the higher measure. Dividends declared on unvested RSUs are accrued as cash distributions payable upon vesting. The Committee recommended and the Board approved the grants in February 2024 to each of the officers, including the Executive Chairman. Retirement Benefits. The Company believes that retirement benefits are an important component of total compensation. The Company’s primary retirement benefit consists of the Company’s 401(k) and Profit-Sharing Plan under which all eligible salaried U.S. employees of the Company, including officers, participate starting in their third year of employment. The amount the Company provides to the Profit-Sharing Plan is based on the recommendation of management, with the Board’s approval. Typically, the Company’s contribution under this plan is approximately 15% of the then-current year’s cash compensation, which is consistent with the amount contributed for all full-time salaried U.S. employees of the Company, including the cash incentive award. When calculating the Company’s contributions under the Profit-Sharing Plan, the Company does not consider gains from prior awards. Every aspect of this plan is the same for all salaried U.S. employees, including officers. Thus, each salaried participant elects the investment options with the same options offered to all salaried employees and officers. The plan does not involve any guaranteed minimum return or above-market returns; rather, the investment returns are dependent upon actual investment results. To the extent an employee’s award exceeds the maximum allowable contribution permitted under existing tax laws, the excess is accrued for (but not funded) under a non-qualified Supplemental Executive Retirement Plan (the “SERP”). The returns under the SERP are also dependent upon actual investment results, as each participant is allowed to elect investment options for its liability balance. Executive Perquisites. Perquisites and other personal benefits do not comprise a significant aspect of the Company’s compensation program. Although officers participate in the same benefit programs as the Company’s other employees, the Company provides a few additional benefits to its officers. These benefits are designed to enable the officers to balance their personal, business and travel schedules. In 2024, benefits included the Company’s payment of club dues for three of the NEOs as indicated in the accompanying Summary Compensation Table. This benefit is also provided to two non-officer employees, primarily for business entertainment purposes. Except as described here, the Company aircraft is available to all employees, including the officers and directors, for business-related travel only. The Executive Chairman, CEO and President are permitted to use the Company’s aircraft for personal purposes, as shown on the Summary Compensation Table. The Company also makes personal financial advice available to the Executive Chairman and tax advice available to all of its executive officers.
Compensation Discussion and Analysis
Compensation Discussion and Analysis Option Awards. Although none of the NEOs had any option or option-like awards outstanding in 2024, the 2016 LTIP provides the Committee the discretionary authority to grant option and option-like awards to individuals. Awards are not granted on a predetermined schedule, as the Committee determines when to grant option or option-like awards on a case-by-case basis to align with the Company’s short-term and long-term business goals and to ensure the competitiveness of its compensation packages. In determining the timing and terms of an award, the Committee may consider material nonpublic information to ensure that such grants are made in compliance with applicable laws and regulations. If necessary, the Committee may delay the grant of awards until there is public disclosure of any material nonpublic information. The Company has not timed, and does not time, the disclosure of material nonpublic information based on its effect on the value of executive compensation. Ownership Guidelines. In 2014, the Committee recommended and the Board approved ownership guidelines to ensure that the NEOs have a stake in the future of the Company in lieu of the deferral requirement. The ownership guidelines require the CEO to hold six times his annualized base salary in equity of the Company, and the other officers to hold three times their annualized base salaries. The ownership guidelines state that the types of equity that count toward the ownership requirement are stock owned directly, stock owned in a Company-sponsored retirement plan, and the unvested portion of RSUs that are subject only to time-vesting. Each covered executive will have up to five years from the date such person becomes a covered executive to meet the stock ownership requirement. All current executive officers have met the requirement, except William Koh and Assaad A. Morcos do not need to meet the requirement until 2028 and 2030, respectively. Clawback Policy. In August 2023, the Company adopted a clawback policy in accordance with the final NASDAQ rules, which requires the Company’s executive officers and key employees designated by the Board to return incentive compensation paid to them if the financial results upon which the compensation was based are restated and republished under applicable securities laws, excluding any restatement required due to changes in accounting rules or standards or changes in applicable law (an “Accounting Restatement”). In the event of an Accounting Restatement, the Company will require reimbursement or forfeiture of the amount of incentive compensation received by the individual that exceeds the amount of such compensation that otherwise would have been received had it been determined based on the restated amounts if such compensation was received during the three years before the date the Company concludes that it must file an Accounting Restatement or the date a court, regulator or other legally authorized body directs the Company to file an Accounting Restatement. Tax Deductibility of Pay. Section 162(m) of the Internal Revenue Code of 1986 places a limit of $1 million on the amount of eligible compensation that a company may deduct in any one year with respect to each of its NEOs. Five officers, including the Executive Chairman, were above this threshold in 2024. As a result of the Tax Cuts and Jobs Act enacted in December 2017, the performance-based compensation exception has been eliminated for taxable years beginning after December 31, 2017, which may result in lost tax deductions going forward.
Compensation Discussion and Analysis
| Pay Ratio |
Compensation Discussion and Analysis
| Name and | | Salary | Stock Awards | Non-Equity Incentive Plan Compensation | All Other Compensation | Total | | Principal Position | Year | ($) | ($) (1) | ($) (2) | ($) (3) | ($) | | Robert G. Ruhlman | 2024 | 1,000,008 | 1,970,878 | 1,000,008 | 691,010 | 4,661,904 | | Executive Chairman | 2023 | 1,000,008 | 2,046,877 | 1,150,009 | 694,487 | 4,891,381 | | | 2022 | 975,000 | 1,889,622 | 1,072,500 | 650,396 | 4,587,518 | | Dennis F. McKenna | 2024 | 685,008 | 1,350,098 | 685,008 | 231,470 | 2,951,584 | | Chief Executive Officer | 2023 | 600,000 | 614,090 | 510,000 | 221,686 | 1,945,776 | | | 2022 | 575,004 | 557,200 | 488,753 | 192,821 | 1,813,778 | | Andrew S. Klaus | 2024 | 460,008 | 453,333 | 460,008 | 135,712 | 1,509,061 | | Chief Financial Officer | 2023 | 400,008 | 999,602 | 340,007 | 99,603 | 1,839,220 | | | 2022 | 400,008 | 387,622 | 340,007 | 11,734 | 1,139,371 | | J. Ryan Ruhlman | 2024 | 520,008 | 512,366 | 520,008 | 180,533 | 1,732,915 | | President | 2023 | 438,623 | 409,393 | 372,830 | 156,397 | 1,377,243 | | | 2022 | 370,008 | 358,551 | 314,507 | 158,281 | 1,201,347 | | John M. Hofstetter | 2024 | 410,004 | 403,953 | 348,503 | 131,678 | 1,294,138 | | Executive VP - U.S. Operations | 2023 | 380,004 | 388,906 | 323,003 | 127,659 | 1,219,572 | | | 2022 | — | — | — | — | — |
Compensation Discussion and Analysis
| Grants of Plan-Based Awards |
Compensation Discussion and Analysis
| Outstanding Equity Awards at Fiscal Year-End |
Compensation Discussion and Analysis
| Options Exercised and Stock Vested |
Compensation Discussion and Analysis
| Non-Qualified Deferred Compensation (1) |
Compensation Discussion and Analysis
| Potential Payments upon Termination or Change in Control |
Compensation Discussion and Analysis
| Director Compensation |
Compensation Discussion and Analysis
| Name | Fees Earned or Paid in Cash ($) (1) | Stock Awards ($) (2) | All Other Compensation (3) | Total ($) | | Glenn E. Corlett | 75,000 | 75,025 | — | 150,025 | | Maegan A. R. Cross | 82,500 | 45,070 | — | 127,570 | | Matthew D. Frymier | 65,000 | 75,025 | — | 140,025 | | Richard R. Gascoigne | 72,500 | 75,025 | — | 147,525 | | Michael E. Gibbons | 75,000 | 75,025 | — | 150,025 | | R. Steven Kestner | 60,000 | 75,025 | — | 135,025 | | David C. Sunkle | 52,500 | 75,025 | 54,592 | 182,118 |
Compensation Discussion and Analysis
| Pay versus Performance |
Compensation Discussion and Analysis
| | | | | | Value of Initial Fixed $100 Investment Based On: | | | | | Year | Summary Compensation Table Total for PEO (1) | Compensation Actually Paid to PEO (2) | Average Summary Compensation Table Total for Non-PEO NEOs (3) | Average Compensation Actually Paid to Non-PEO NEOs (2) | Total Shareholder Return (4) | Peer Group Total Shareholder Return (4) | Net Income (in thousands) | Return on Shareholders' Equity (5) | | 2024 | 4,661,904 | 3,029,010 | 1,871,925 | 1,554,094 | $222.39 | $163.12 | 37,111 | 12.3% | | 2023 | 4,891,381 | 7,584,765 | 1,595,453 | 2,268,815 | $231.46 | $154.37 | 63,332 | 20.8% | | 2022 | 4,587,518 | 6,311,917 | 1,311,075 | 1,662,554 | $143.07 | $126.27 | 54,395 | 21.0% | | 2021 | 4,760,218 | 4,371,177 | 1,278,358 | 1,206,905 | $110.12 | $143.94 | 35,729 | 16.9% | | 2020 | 5,155,604 | 5,382,937 | 1,003,522 | 975,760 | $115.12 | $131.59 | 29,803 | 14.6% |
Compensation Actually Paid
Compensation Actually Paid The following tables set forth the adjustments made to the total compensation information included in the Summary Compensation Table (“SCT”) for the PEO and non-PEO NEOs, as an average, for purposes of providing the “Compensation Actually Paid to PEO” and “Average Compensation Actually Paid to Non-PEO NEOs” in the table above.
Compensation Actually Paid
| 28 2024 Proxy Statement | PREFORMED LINE PRODUCTS COMPANY |
Compensation Actually Paid
PEO – Adjustments for CAP
Compensation Actually Paid
| PEO Summary Compensation Table to CAP Adjustments | 2024 | 2023 | 2022 | 2021 | 2020 | | Deduction for Amounts Reported under the “Stock Awards” Column of the SCT | (1,970,878) | (2,046,877) | (1,889,622) | (1,920,858) | (2,433,539) | | Addition of Fair Value of Awards Granted During Year that Remain Unvested as of Year-End (1) | 1,526,324 | 1,544,611 | 2,660,782 | 1,729,949 | 2,254,961 | | Addition/Deduction of Change in Fair Value from Prior Year-End to Current Year- End of Awards Granted Prior to Year that were Outstanding and Unvested as of Year-End (1) | (1,001,174) | 2,967,650 | 1,109,563 | (238,088) | 495,213 | | Addition/Deduction of Change in Fair Value from Prior Year-End to Vesting Date of Awards Granted Prior to Year that Vested During Year (1) | (187,166) | 228,000 | (156,324) | 39,956 | (89,302) | | Total Adjustments | (1,632,894) | 2,693,384 | 1,724,399 | (389,041) | 227,333 |
Compensation Actually Paid
Average Non-PEO NEOs – Adjustments for CAP
Compensation Actually Paid
| Non-PEO NEOs Summary Compensation Table to CAP Adjustments | 2024 | 2023 | 2022 | 2021 | 2020 | | Deduction for Amounts Reported under the “Stock Awards” Column of the SCT | (676,176) | (602,998) | (408,213) | (394,581) | (302,531) | | Addition of Fair Value of Awards Granted During Year that Remain Unvested as of Year-End (1) | 555,982 | 458,337 | 574,805 | 355,365 | 338,106 | | Addition/Deduction of Change in Fair Value from Prior Year-End to Current Year- End of Awards Granted Prior to Year that were Outstanding and Unvested as of Year-End (1) | (158,297) | 533,804 | 185,535 | (33,695) | 54,133 | | Addition/Deduction of Change in Fair Value from Prior Year-End to Vesting Date of Awards Granted Prior to Year that Vested During Year (1) | (39,340) | 136,667 | (648) | 1,458 | (2,725) | | Addition of Fair Value of Awards Granted and Vested During Year (1) | — | 147,552 | — | — | — | | Deduction of Fair Value as of Prior Year-End for Prior Year Awards Forfeited During the Year (1) | — | — | — | — | (114,745) | | Total Adjustments | (317,831) | 673,362 | 351,479 | (71,453) | (27,762) |
Compensation Actually Paid
(1)The fair value of equity component of the CAP calculation was determined in accordance with Item 402(v) of Regulation S-K.
Relationship between Compensation Actually Paid and Performance Measures
Relationship between Compensation Actually Paid and Performance Measures The charts below show the relationship between the Compensation Actually Paid to the PEO and the Average Compensation Actually Paid to the non-PEO NEOs (collectively, “NEO Compensation Actually Paid”) to each of (1) total shareholder return (“TSR”), (2) Net Income, (3) Return on shareholders’ equity. As discussed under “Compensation Discussion & Analysis” above, our compensation program seeks to attract, motivate and retain our NEOs while ensuring the success and growth of the Company by making a significant portion of NEOs’ total
Relationship between Compensation Actually Paid and Performance Measures
| 29 2024 Proxy Statement | PREFORMED LINE PRODUCTS COMPANY |
Relationship between Compensation Actually Paid and Performance Measures
compensation variable and dependent on the Company’s financial performance. As shown in the charts below, NEO CAP is generally aligned with TSR, Net Income, and Return on shareholders’ equity.
Relationship between Compensation Actually Paid and Performance Measures
| 30 2024 Proxy Statement | PREFORMED LINE PRODUCTS COMPANY |
Relationship between Compensation Actually Paid and Performance Measures
| 31 2024 Proxy Statement | PREFORMED LINE PRODUCTS COMPANY |
Relationship between Compensation Actually Paid and Performance Measures
| Compensation Committee Interlocks and Insider Participation |
Relationship between Compensation Actually Paid and Performance Measures
No director serving on the Compensation Committee during any part of 2024 was at any time either during or before 2024, an officer or employee of the Company or any of its subsidiaries. No interlocking relationship exists between the Board or Compensation Committee and the board of directors or compensation committee of any other company, nor has any interlocking relationship existed during 2024.
Relationship between Compensation Actually Paid and Performance Measures
| Transactions with Related Persons |
Relationship between Compensation Actually Paid and Performance Measures
It is the policy of the Company that the Audit Committee approves all related party transactions. Additionally, the Company has a Code of Conduct that addresses the Company’s commitment to the honesty, integrity and ethical behavior of the Company’s directors, officers and employees. The Code governs the actions and working relationships of the Company’s directors, officers and employees with current and potential customers, consumers, fellow employees, competitors, government and self-regulatory agencies, investors, the public, the media and anyone else with whom the Company has or may have contact. Each director, officer and employee is instructed to inform the Board when confronted with a situation that may be perceived as a conflict of interest. All related party transactions must be approved by the Audit Committee in advance. The Audit Committee may engage outside parties to assist it in assessing the fairness and reasonableness of related party transactions. Although the policies and procedures for related parties are not in writing, the results of actions taken by the Audit Committee are documented in formal minutes and are reported to the Board. The following are the transactions with the Company’s officers and directors that have been approved by the Audit Committee and reported to the Board in 2024: •The Company purchased 1,263 shares of the Company at a 30-day average price per share of $125.59 from Robert G. Ruhlman on February 8, 2024. •The Company purchased 3,400 shares of the Company at a 30-day average price per share of $131.90 from Caroline S. Vaccariello on March 13, 2024. •The Company purchased 700 shares of the Company at a 30-day average price per share of $130.34 from Timothy O'Shaughnessy on November 20, 2024. •The Company purchased 2,000 shares of the Company at a 30-day average price per share of $131.90 from David C. Sunkle on March 13, 2024. During 2024, the Company paid approximately $223,000 in legal fees to Baker & Hostetler LLP, of which R. Steven Kestner was a partner and the former Chairman of the firm and chair of its policy committee.
Relationship between Compensation Actually Paid and Performance Measures
| 32 2024 Proxy Statement | PREFORMED LINE PRODUCTS COMPANY |
Relationship between Compensation Actually Paid and Performance Measures
| PROPOSAL TWO: Approval of 2025 Incentive Plan |
Relationship between Compensation Actually Paid and Performance Measures
The Board recommends that you vote “FOR” this proposal. On February 5, 2025, the Board of Directors, upon the recommendation of the Compensation Committee, approved the Preformed Line Products Company 2025 Incentive Plan (the “2025 Plan”), subject to shareholder approval.