DEF 14A of Gates Industrial Corp Ltd.
Filed Apr 26, 2024 · FY20230001718512-24-000025
Election of Directors
Election of Directors
Election of Directors
| The Board unanimously recommends that shareholders vote “FOR” each nominee to serve as director. |
Election of Directors
What am I voting on? The Company’s Articles of Association provide that each director shall retire from office at each annual general meeting of the Company and shall be eligible for re-election. The first proposal for consideration at the AGM is the election of each of the nine candidates named below as a director for a one-year term expiring at the 2025 annual general meeting of shareholders. Each of these candidates is currently a director. Each nominee has agreed to serve if elected, and the Board has no reason to believe that any nominee will be unable to serve. Upon the recommendation of the nominating and governance committee of the Board (the “Nominating and Governance Committee”), the Board has nominated each of the nine directors identified below as a nominee for a one-year term expiring at the 2025 annual general meeting of shareholders or until his or her successor is duly elected and qualified, or until his or her earlier retirement, resignation, disqualification, removal or death. If any director nominee should become unavailable for election prior to the AGM, an event that currently is not anticipated by the Board, either the proxies will be voted in favor of the election of a substitute nominee or nominees proposed by the Board, or the number of directors may be reduced accordingly. Set forth on the following pages is biographical and other background information concerning each nominee for director, as well as a discussion of the specific experience, qualifications and skills of each director that helped lead the Board to conclude that each respective director should continue to serve as a member of the Board. The form of shareholder resolutions for this proposal are set forth under the heading “Shareholder Resolutions for the 2024 Annual General Meeting” in this Proxy Statement.
COMPOSITION OF THE BOARD OF DIRECTORS
COMPOSITION OF THE BOARD OF DIRECTORS The Company’s business and affairs are managed under the direction of its Board , which consists of nine directors. The Board has affirmatively determined that all of the directors, except Mr. Jurek who is the Chief Executive Officer of the Company, are independent under the NYSE listing standards. The Company is party to a shareholders agreement with certain affiliates of Blackstone Inc. (“Blackstone” or the “Sponsor”) who collectively own approximately 27.6% of our outstanding ordinary shares as of April 22, 2024. This agreement grants the Sponsor the right to designate nominees to the Board subject to the maintenance of certain ownership requirements in the Company. See “Certain Relationships and Related Person Transactions — Shareholders Agreement.” Currently, one of the directors, Mr. Meisel, is a designee of the Sponsor.
COMPOSITION OF THE BOARD OF DIRECTORS
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COMPOSITION OF THE BOARD OF DIRECTORS
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DIRECTOR BACKGROUNDS AND QUALIFICATIONS
DIRECTOR BACKGROUNDS AND QUALIFICATIONS The following presents the names, ages as of April 22, 2024 and selected biographical information and qualifications for each of the director nominees.
DIRECTOR BACKGROUNDS AND QUALIFICATIONS
| Neil P. Simpkins | Director, Chair of the Board | Age: 58 | Director Since 2017 Neil P. Simpkins has served as a director of Gates Industrial Corporation plc since November 2017 and as the Chair of the Board since January 2020. He has served as a director of Gates entities since 2014. He is currently CEO of Roseberry LLC, a private investment firm, and also provides consulting services to Blackstone, where he was previously a Senior Managing Director of the Corporate Private Equity Group. Since joining Blackstone in 1998, Mr. Simpkins led the acquisitions of TRW Automotive, Vanguard Health Systems, TeamHealth, Apria, Summit Materials, Change Healthcare and Gates. Before joining Blackstone, Mr. Simpkins was a Principal at Bain Capital and worked as a consultant at Bain & Company in the Asia Pacific region and in London. He currently serves as a director of Team Health Holdings, Inc., and previously served as a director of Summit Materials, Inc. from 2009 to 2018, Apria, Inc from 2008 to 2022 and Change Healthcare, Inc. from 2011 to 2022. | | | In particular, the Board considered Mr. Simpkins’ significant financial and business experience, including as a former Senior Managing Director of the Corporate Private Equity Group at Blackstone and a former Principal at Bain Capital, when selecting him as a nominee. |
DIRECTOR BACKGROUNDS AND QUALIFICATIONS
| Ivo Jurek | Director, Chief Executive Officer | Age: 59 | Director Since 2017 Ivo Jurek has served as a director of Gates Industrial Corporation plc since its formation in September 2017 and has served as the Chief Executive Officer and a director of Gates entities since May 2015. Mr. Jurek oversees and manages all of Gates’ departments and lines of products and services globally. As Chief Executive Officer, Mr. Jurek has led Gates to expand product lines in fluid power and power transmission and strategically grow market share while driving improved financial performance. Mr. Jurek has a deep understanding of new technology development, manufacturing, distribution and international business markets. Prior to joining Gates, Mr. Jurek served as President of Eaton Electrical, Asia Pacific beginning in November 2012 until May 2015. During that time, Mr. Jurek had management oversight of Eaton Electrical’s Asia Pacific portfolio which included optimizing manufacturing plants, identifying new markets, and assisting with the overall performance of the company. Prior to that, Mr. Jurek served as Group President for Cooper Power Systems — Cooper Bussmann, with complete oversight of all business activities there and in significant general management positions in International Rectifier Corporation and TRW Inc. | | | In particular, the Board considered Mr. Jurek’s extensive business and industry experience as well as his experience leading Gates since May 2015, when selecting him as a nominee. |
DIRECTOR BACKGROUNDS AND QUALIFICATIONS
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DIRECTOR BACKGROUNDS AND QUALIFICATIONS
| Proposal 1 | Table of Contents |
DIRECTOR BACKGROUNDS AND QUALIFICATIONS
| Fredrik Eliasson | Director | Age: 53 | Director Since 2022 Fredrik Eliasson has served as a director of Gates Industrial Corporation plc since October 2022. Mr. Eliasson was the Chief Financial Officer of Change Healthcare Inc., from 2018 to 2022, leading the company through its initial public offering and through its ultimate sale in 2022. Previously, Mr. Eliasson spent 22 years at CSX Corporation in sales, marketing, financial planning, and investor relations positions, most recently serving as President in 2017, Chief Sales and Marketing Officer from 2015-2017, and Chief Financial Officer from 2012-2015. He currently serves on the board of directors of ArcBest Corporation (NASDAQ: ARCB), a freight and logistics provider, a position he has held since December 2019. | | | In particular, the Board considered Mr. Eliasson’s financial acumen and business experience, including as the former Chief Financial Officer of Change Healthcare Inc. and former President, Chief Sales and Marketing Officer, and Chief Financial Officer of CSX Corporation, when selecting him as a nominee. |
DIRECTOR BACKGROUNDS AND QUALIFICATIONS
| James W. Ireland, III | Director | Age: 69 | Director Since 2018 James W. Ireland, III has served as a director of Gates Industrial Corporation plc since November 2018. He has been Executive Chairman of Milele Energy since January 2021, Senior Managing Director of Davis Partners Group since May 2020, and Co-founder and Managing Partner of Earlylands Advisory since 2024. Prior to his current roles, Mr. Ireland served as President and Chief Executive Officer of General Electric Africa, a digital and industrial company focused on transforming the industry with machines that have software defined solutions from 2011 until 2018. From 2007 until 2011, Mr. Ireland served as the President and Chief Executive Officer of General Electric’s Asset Management Group. From 1995 to 2007, Mr. Ireland held various positions at General Electric, including President of NBC Universal Television Stations and Network Operations (a wholly-owned subsidiary of General Electric), one of the world’s leading media and entertainment companies in development, production, and marketing of entertainment, news and information to a global audience and Chief Financial Officer and audit staff for General Electric Plastics. | | | In particular, the Board considered Mr. Ireland’s substantial management expertise, including as former President and Chief Executive Officer of each of General Electric Africa and General Electric’s Asset Management Group, when selecting him as a nominee. |
DIRECTOR BACKGROUNDS AND QUALIFICATIONS
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DIRECTOR BACKGROUNDS AND QUALIFICATIONS
| Proposal 1 | Table of Contents |
DIRECTOR BACKGROUNDS AND QUALIFICATIONS
| Stephanie K. Mains | Director | Age: 56 | Director Since 2019 Stephanie K. Mains has served as a director of Gates Industrial Corporation plc since February 2019. Ms. Mains is currently the Chief Executive Officer of LSC Communications-MCL, an Atlas Holdings portfolio company, a position she has held since April 2021. Prior to that Ms. Mains was the interim Chief Executive Officer of GE Power Conversion from April 2020 until December 2020, and the President and Chief Executive Officer of ABB Electrification Products Industrial Solutions, a 2018 acquisition from GE, from November 2015 until January 2019. She served as Vice President of GE Distributed Power Global Services from March 2013 until October 2015, and held positions of increasing responsibility from General Manager to Vice President for GE Energy-Power from March 2006 until March 2013. Prior to joining GE Energy, Ms. Mains spent 17 years across multiple GE businesses in financial and transformational leadership positions, including Chief Financial Officer for GE Aviation Services Material Solutions. She currently serves on the board of directors of Diamondback Energy, Inc. (NASDAQ: FANG), a position she had held since April 2020, Stryten Energy, LLC, a private company, and LCI Industries (NYSE: LCII), a position she has held since March 2021. | | | In particular, the Board considered Ms. Mains’ leadership and operational experience in various senior management roles, including as current Chief Executive Officer of LSC Communications-MCL and as a former Chief Financial Officer, as well as extensive experience across multiple GE businesses, when selecting her as a nominee. |
DIRECTOR BACKGROUNDS AND QUALIFICATIONS
| Seth A. Meisel | Director | Age: 51 | Director Since 2023 Seth A. Meisel has served as a director of Gates Industrial Corporation plc since January 2023. He is currently a Senior Managing Director of Blackstone’s Corporate Private Equity Group and heads Blackstone’s private equity transactions in the industrials sector. Since joining Blackstone in 2015, Mr. Meisel has led Blackstone’s investments in Cloverleaf Cold Storage, Interior Logic Group, Chamberlain Group, and Copeland. Prior to joining Blackstone, Mr. Meisel was a partner at Bain Capital, LP focused on the industrials sector. Prior to joining Bain, he was with Mercer Management Consulting (now Oliver Wyman) in New York and Hong Kong. Mr. Meisel currently serves on the boards of Interior Logic Group Holdings, LLC, Chamberlain Group LLC and Copeland, as well as on the boards of non-profits The Ethical Culture Fieldston School, The Opportunity Network, and City Year New York. He has previously served as a director on the boards of public companies Sensata Technologies from 2010 to 2012, Trinseo from 2011 to 2015, and Veritiv from 2014 to 2015, as well as on the boards of several private companies and non-profit organizations. | | | In particular, the Board considered Mr. Meisel’s extensive knowledge of various industries and significant financial and investment experience, including through his role at Blackstone as a Senior Managing Director where he heads private equity transactions in the industrials sector, when selecting him as a nominee. |
DIRECTOR BACKGROUNDS AND QUALIFICATIONS
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DIRECTOR BACKGROUNDS AND QUALIFICATIONS
| Proposal 1 | Table of Contents |
DIRECTOR BACKGROUNDS AND QUALIFICATIONS
| Wilson S. Neely | Director | Age: 68 | Director Since 2020 Wilson S. Neely has served as a director of Gates Industrial Corporation plc since April 2020. He is currently a strategic advisor to InterNex Capital, an asset-based, digital lender providing working capital financing to small- and medium-sized businesses, a role he has held since January 2020. Prior to that, from 1991 until his retirement in January 2020, Mr. Neely served as a Partner of Simpson Thacher & Bartlett LLP with a corporate practice primarily in the areas of mergers and acquisitions and capital markets. While at Simpson Thacher, Mr. Neely advised on numerous business combination transactions, including leveraged buyouts, recapitalizations and strategic partnerships between private equity funds and corporate partners. In addition, he oversaw numerous capital markets transactions. He currently serves on the board of directors and select committees for the University of Texas Law School Foundation, Readworks Inc., and Historic Hudson Valley, of which he serves as board chair. | | | In particular, the Board considered Mr. Neely’s strong knowledge of corporate governance and his legal experience as a retired Partner from Simpson Thacher & Bartlett LLP in the areas of mergers and acquisitions and capital markets, when selecting him as a nominee. |
DIRECTOR BACKGROUNDS AND QUALIFICATIONS
| Alicia L. Tillman | Director | Age: 48 | Director Since 2021 Alicia L. Tillman has served as a director of Gates Industrial Corporation plc since April 2021. She is currently the Chief Marketing Officer of Delta Air Lines, Inc., where she leads the overall brand and marketing strategy for the company. Prior to joining Delta Air Lines, Inc. in June 2023, Ms. Tillman worked at Capitolis Inc., from October 2021 to April 2023, as their Chief Revenue Officer, leading sales, adoption, innovation, global marketing and communications. Prior to joining Capitolis Inc., Ms. Tillman worked at SAP SE from 2015 through March 2021, where she spent four years in the role of Executive Vice President and Global Chief Marketing Officer, leading a marketing organization of over 2,000 employees. At SAP, she was a key contributor to the acquisition and integration of multiple companies, rebuilt the technology foundation to scale digital and demand generation capabilities, and developed the brand story. Prior to joining SAP, she worked for American Express from 2004 through 2015, serving as head of Marketing, Public Affairs and Business Services. She currently serves on the board of directors of RainFocus, LLC. | | | In particular, the Board considered Ms. Tillman’s executive experience in global marketing, strategy, operations and digital transformation, including digital and demand generation, when selecting her as a nominee. |
DIRECTOR BACKGROUNDS AND QUALIFICATIONS
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DIRECTOR BACKGROUNDS AND QUALIFICATIONS
| Proposal 1 | Table of Contents |
DIRECTOR BACKGROUNDS AND QUALIFICATIONS
| Molly P. Zhang | Director | Age: 62 | Director Since 2020 Dr. Peifang Zhang (also known as Molly P. Zhang) has served as a director of Gates Industrial Corporation plc since July 2020. Prior to her retirement in October 2016, Dr. Zhang served in a number of senior global executive roles at Orica Ltd, a global mining services company, including Vice President of Asset Management and Manufacturing Executive for Mining Systems. Prior to her tenure at Orica Ltd, Dr. Zhang worked for 22 years at Dow Inc. where she held various senior leadership positions. She was Managing Director of SCG-Dow Group, a mega joint venture, Global Business Vice President for Dow Technology Licensing and Catalyst business, and Regional Manufacturing Director of Dow Asia Pacific. Dr. Zhang currently serves on the board of directors of Arch Resources, Inc. (NYSE: ARCH) since January 2022 and Aqua Metals, Inc. (NASDAQ: AQMS) since March 2021. Additionally, she is a member of the advisory board of Circular Innovation Fund. Her previous public company directorships include GEA Group from April 2016 to December 2021, Cooper-Standard Holdings Inc. from May 2017 to May 2020, and Newmont Mining Corporation from June 2017 to June 2019. | | | In particular, the Board considered Dr. Zhang’s global business experience and her strong understanding of the Asia market, as well as her expertise in the industrials sector, when selecting her as a nominee. |
DIRECTOR BACKGROUNDS AND QUALIFICATIONS
When considering whether directors have the experience, qualifications, attributes or skills, taken as a whole, to enable the Board to satisfy its oversight responsibilities effectively, the Board focuses primarily on each person’s background and experience as reflected in the information discussed in each of the directors’ individual biographies set forth above. The Company believes that its directors provide an appropriate mix of experience and skills relevant to the size and nature of its business.
DIRECTOR BACKGROUNDS AND QUALIFICATIONS
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EXECUTIVE COMPENSATION STRUCTURE
EXECUTIVE COMPENSATION STRUCTURE The material elements of the executive compensation program include the following, all of which are described in detail in this CD&A: •Base salary •Short-term incentive opportunity (an annual cash bonus tied to the Company’s annual financial performance) •Long-term Incentive opportunity (an equity-based long-term incentive opportunity consisting of time-based vesting restricted stock units (“RSUs”) and performance-based vesting RSUs (“PRSUs”)) •Broad-based employee benefits, limited perquisites and severance coverage
SHAREHOLDER ENGAGEMENT AND SAY-ON-PAY
| Shareholder Concern Themes | Our Responses and Adjusted Practices or Disclosures | | Short-Term Incentive Plan | | | •Use of discretion | •The 2023 total bonus pool was approved by the Compensation Committee and based solely on predetermined Company financial performance achievement, with no positive or negative discretion utilized by the Compensation Committee. In addition, no adjustments of performance measures due to unusual or nonrecurring events affecting the Company were identified or approved for Fiscal 2023. | | •Uncapped individual performance factor payout opportunity | •In February 2023, the Compensation Committee approved a short-term incentive payout cap of 200% of each individual target bonus opportunity. | | •Lack of individual NEO performance factor goal disclosure | •Beginning with this year’s CD&A, we enhanced our individual performance goal disclosure. See “Short-Term Incentive Opportunity - Individual Performance Factor” below. | | Long-Term Incentive Plan | | | •Special time-based RSU grants to NEOs in 2022 | •No special equity grants were made in 2023 and our Compensation Committee understands the concerns related to these types of awards and intends to limit future special grants to rare and unique circumstances and specific hiring situations. | | •Forward-looking annual payout targets for Adjusted ROIC (as defined below) were not disclosed. | •We view disclosing forward-looking multi-year financial performance targets could result in competitive harm by revealing information that may not otherwise be public. The Compensation Committee believes that these targets are set at challenging but achievable levels. After the end of the three-year performance period, the targets and achievement relative to such targets will be disclosed. | | •Target payout for Relative TSR was only the 50th percentile relative to the S&P 400 Capital Goods Industry Index | •Our Relative TSR performance metric is set at a rigorous level, evidenced by a failure to payout under this metric for the past three years. Accordingly, the Company considers a 50th percentile target to be sufficiently demanding and aligned with market practice. | | Stock Ownership Guidelines | | | •Stock ownership guidelines include unvested or unearned awards | •In April 2024, we amended our stock ownership guidelines to exclude unexercised vested stock options in calculating ownership. |
Executive Compensation Determination Process
Executive Compensation Determination Process Role of the Board, the Compensation Committee, and our Chief Executive Officer. The Compensation Committee assists the Board in overseeing the Company’s executive compensation program. As part of its responsibilities under its charter, the Compensation Committee oversees the annual compensation decision process for the NEOs, including the CEO. In setting compensation for each NEO, the Compensation Committee has historically taken into account multiple factors, including job responsibilities, performance, contributions and experience of each NEO and their compensation in relation to other employees and other equivalent roles at peer companies and other market data. The Compensation Committee, working with its independent compensation consultant, Aon’s Human Capital Solutions Practice, a division of Aon plc (the “Consultant”), annually reviews the Company’s executive compensation plan designs as well as the NEOs’ performance, base salary, and annual and long-term incentive target opportunities, and approves any changes to the plan designs and each NEOs’ overall compensation package in light of such review. In addition, when making compensation decisions for the NEOs (other than the CEO), the Compensation Committee has historically considered recommendations of the CEO based on his judgment, knowledge of the industry, and greater familiarity with the day-to-day performance of his direct reports. Specifically, the CEO annually reviews each other NEO’s performance with the Compensation Committee and recommends to the Compensation Committee an appropriate base salary, annual incentive target opportunity, annual incentive payout, and grant of long-term equity incentive award. The CEO does not, however, participate in deliberations regarding his own compensation. Based upon this recommendation and the other considerations described below under “Elements of Compensation”, and in consideration of the executive compensation philosophy described above, the Compensation Committee reviews the overall annual compensation packages for the NEOs, and approves such compensation packages, other than the proposed equity grants.
Executive Compensation Determination Process
Proposed grants of equity to the NEOs and other Section 16 officers are reviewed and approved by the full Board in order to qualify such grants as exempt from the short-swing profit provisions of Section 16 of the Exchange Act. Role of the Independent Compensation Consultant. The Compensation Committee retains the Consultant, to support the oversight and management of the executive compensation program. The Compensation Committee retains sole authority to hire or terminate the Consultant, approve its compensation, determine the nature and scope of services, and evaluate performance. One or more representatives of the Consultant attend Compensation Committee meetings, as requested, and communicate with the Compensation Committee Chair between meetings. The Compensation Committee makes all final decisions. The Consultant’s specific roles include, but are not limited to: •advising the Compensation Committee on executive compensation trends and regulatory developments; •providing a total compensation study for executives, compared against the companies in the peer group and other market data, and recommendations for executive pay; •working with the Compensation Committee to develop an appropriate peer group of comparable companies to serve as a reference point in executive compensation decision-making; •providing advice to the Compensation Committee on governance best practices, as well as any other areas of concern or risk; •providing advice to the Compensation Committee on executive compensation benefit programs; •serving as a resource to the Compensation Committee Chair for meeting agendas and supporting materials in advance of each meeting; •reviewing and commenting on proxy disclosure items, including this CD&A; •reviewing and commenting on the Compensation Committee’s annual compensation risk assessment; •advising the Compensation Committee on management’s pay recommendations and determining Chief Executive Officer pay; •reviewing and commenting on comprehensive tally sheets for the each NEO that encompass two years of all elements of their compensation as well as potential wealth accumulation and retention values; and •from time to time, reviewing and providing compensation recommendations for non-employee directors. The Compensation Committee has assessed the independence of the Consultant as required by SEC and NYSE rules. The Compensation Committee reviewed its relationship with the Consultant and considered all relevant factors, including those set forth in Rule 10C-1(b)(4)(i) through (vi) under the Exchange Act. Based on this review, the Compensation Committee concluded that the Consultant is independent and there are no conflicts of interest raised by the work performed by the Consultant. Role of the Peer Group. The Compensation Committee, with the help of the Consultant, conducts an annual review and evaluation of executive and director compensation in comparison to an industry peer group. In establishing the industry peer group, the Compensation Committee targets approximately 15 to 20 companies based on the following selection criteria: •publicly-traded companies within similar industries as Gates; •peer companies used by the potential peer companies (peers of peers); •peer companies used by proxy advisory firm Institutional Shareholder Services Inc. in 2022; •companies with annual revenues of approximately 0.4x to 3x Gates’ annual revenues; and •companies with market capitalization and enterprise values within a reasonable ranges of Gates’ values.
Executive Compensation Determination Process
For Fiscal 2023 compensation decisions, the Compensation Committee selected the same peer group of companies used for the compensation decisions made for the fiscal year ended December 31, 2022 (“Fiscal 2022”) compensation decisions, with (1) the removal of one peer company due to the merger of two peer companies (Regal Beloit Corporation and Rexnord Corporation) into Regal Rexnord Corporation, which was retained in our peer group and (2) the replacement of one peer company, Colfax Corporation, which split into two companies (ESAB Corporation and Enovis Corporation) with ESAB Corporation included in the peer group. The full list of Fiscal 2023 peers is shown below.
Executive Compensation Determination Process
At the time of the Compensation Committee’s approval, the average and median trailing twelve month revenues of the selected peers, at $3.8 billion and $3.5 billion, respectively, were consistent with the Company’s annual revenues. The Compensation Committee uses competitive compensation data from the annual total compensation study of peer companies as a reference point to inform its decisions about overall compensation opportunities and specific compensation elements. Additionally, the Compensation Committee uses multiple reference points when establishing targeted compensation levels. The Compensation Committee does not benchmark specific compensation elements or total compensation to any specific percentile relative to the peer companies or the broader U.S. market. Instead, the Compensation Committee applies judgment and discretion in establishing targeted pay levels, taking into account not only competitive market data, but also factors such as Company, business and individual performance, scope of responsibility, critical needs and skill sets, leadership potential and succession planning. Role of Tally Sheets. Each year, the Compensation Committee conducts a comprehensive compensation review for each NEO prior to making decisions about executive compensation for the next year. The Committee reviews a tally sheet for each NEO that encompasses two years of all elements of compensation, including the value of base salary, short-term incentives, long-term incentives, and benefit programs as well as potential wealth accumulation and retention value for each NEO. This comprehensive review helps the Compensation Committee evaluate total compensation, internal pay equity and retention values, and helps to ensure that future compensation decisions are in line with the Company’s pay-for-performance compensation philosophy. Timing of Compensation Decisions. The Compensation Committee generally makes executive compensation decisions in February of each year, after the Company reports its fourth quarter and year-end financial results for the preceding fiscal year and completes executive performance reviews (the “February meeting”). This timing allows the Compensation Committee to have a complete financial and individual performance picture before making compensation decisions. The exceptions are executive compensation, including equity grants, to executives who are promoted or hired from outside the Company during the year or to retain key executives in light of labor market conditions. These executives may receive compensation changes or equity grants effective or dated, as applicable, as of the date of their promotion, hiring date, or other Board approved date.
Elements of Compensation
Approximately 86% of the CEO’s compensation in Fiscal 2023 was variable and at-risk, with the majority being performance-based. Approximately 73% of the other NEOs’ compensation in Fiscal 2023 was variable and at-risk. Included within each NEO’s performance-based compensation were performance-based vesting PRSUs equal to 50% of the their long-term equity incentives. The other 50% of the their long-term equity incentives consisted of time-based vesting RSUs. The long-term incentive opportunity is described further below. Base Salary. Base salaries for the Company’s NEOs in 2023 were determined by the Compensation Committee at its February meeting in 2023 after consideration of: the CEO’s recommendations (for all NEOs other than the CEO); the breadth, scope and complexity of the executive’s role; internal equity; current compensation; tenure in position and prior tenure in related roles; skill set; market pay levels; and individual performance. Base salaries are reviewed annually at the February meeting of the Compensation Committee or at other times when appropriate and may be increased from time to time pursuant to such review. The Consultant assists the Compensation Committee with this process by providing market and peer group data and making recommendations. For 2023, the Company made adjustments to NEO base salaries ranging from 2.5% to 9% primarily to align with market compensation practices and reward individual performance following a thorough review of competitive market data provided by the Consultant. The following table sets forth each NEO’s 2022 and 2023 base salary levels as of February 25, 2022 and February 28, 2023, respectively, unless otherwise noted.
Elements of Compensation
(*) Ms. Montgomery’s 2022 and 2023 base salary levels were increased to the levels set forth above from $393,750 and $420,000 on July 10, 2022 and April 2, 2023, respectively. Short-Term Incentive Opportunity. The Company provides a short-term annual incentive opportunity under the Gates Global Bonus Policy (the “Annual Plan”) to reward certain employees, including its NEOs, for achieving specific financial performance goals that would advance the Company’s profitability, revenue growth, and drive key business results, and to recognize individuals based on their contributions to those results.
Elements of Compensation
Payouts under the Annual Plan were based on a combination of the achievement of the Company’s financial performance goals in 2023 (the “Gates Financial Performance Factor”), which fund the Annual Plan, and the NEO’s performance during the fiscal year against his or her individual performance goals (the “Individual Performance Factor”). New starting in 2023, the maximum total bonus opportunity for the NEOs was capped at 200% of their respective target incentive bonus opportunities. Gates Financial Performance Factor. The Gates Financial Performance Factor sets the funding level for the Annual Plan (the “Total Bonus Pool”). The Compensation Committee, after an evaluation of possible financial performance measures, determined to continue using Adjusted EBITDA, Free Cash Flow and Revenue as the financial performance measures for 2023. The Compensation Committee determined that these financial performance measures would be critical indicators of the Company’s performance for 2023 and, when combined, would contribute to sustainable growth. The Annual Plan financial performance measures and weightings for 2023 are described below.
Elements of Compensation
(*) At the time of setting these performance measures, the Compensation Committee determined that the performance measures and payout calculations may exclude the translation impact of foreign exchange gains and losses if excessive in nature, and the Compensation Committee may exclude from the targets and/or the calculation of the performance measures impacts of any non-recurring or unusual item. No such exclusions were made in 2023. The weighted achievement factor for each of the financial performance measures is determined by multiplying the weight attributed to each performance measure by the applicable achievement factor for each measure. For each of the performance measures, the achievement factor is determined by calculating the payout percentage against the target goal based on a pre-established scale. Funding attainment with respect to each of these performance measures can range from 0% of the target incentive to 200% of the target incentive as follows: •0% funding for performance below the threshold requirement; •50% of target incentive for achieving 90% of the target performance requirement (threshold); •100% of target incentive for achieving 100% of the target performance requirement (target); and •200% of target incentive for achieving 110% or above of the target performance requirement (maximum). Payouts for performance between points are interpolated on a straight-line mathematical basis and rounded to the nearest whole number. The following table outlines the calculation of the 2023 Total Bonus Pool based on the Company’s attainment of the 2023 Gates Financial Performance Factor measures, each of which were approved by the Compensation Committee with no adjustments to the previously approved performance measures described above.
Elements of Compensation
Individual Performance Factor. At the end of the performance period, the Compensation Committee considered both the Company’s attainment of the 2023 Gates Financial Performance Factor measures as described above and individual performance factors that are based on achievement against the performance criteria listed below, to the extent relevant to the NEO’s functional or operational area of expertise, to determine the appropriate attainment percentage for the NEOs. •Financial Goals: Achieving the Company’s annual financial plan, as well as the annual financial plan for the executive’s region or function. This included goals related to the Company’s 2023 sales, adjusted EBITDA and free cash flow. •Operational Goals: Achieving targets related to workplace safety, product quality and delivery, freight costs, productivity and inventory management. •Geographic Growth Goals: Focusing on growth opportunities to drive richer margins and mix. •Key Initiatives: Executing on key company initiatives set forth in the Company’s strategic plan, including those related to the industrial, mobility, and automotive end markets, 80/20 portfolio optimization, innovation, and digital assets. •Doing Business the Right Way: ◦Adhering to the Company’s compliance programs and policies, including completion of all required certifications such as those related to workplace health and safety; international laws and regulations; and information technology security. ◦Achieving environmental, sustainability and governance goals related to natural resource consumption, eco-innovation solutions for customers, diversity, equity and inclusion programs, and compliance with reporting requirements as well as defining and executing on other environmental, sustainability and governance targets. •Building Our People: Focusing on the attraction, development and engagement of our workforce through annual development plans, development opportunities, succession planning, and diversity, equity and inclusion initiatives and processes. In evaluating our CEO’s 2023 performance, the Compensation Committee considered Mr. Jurek’s leadership and performance across all areas of focus described above. With respect to individual performance of our other NEOs, the Compensation Committee reviewed their performance with our CEO, considering the CEO’s evaluation of their performance against their 2023 goals. These goals primarily related the other NEOs’ respective functional or operational areas of responsibility as follows: Mr. Mallard’s goals focused on finance, information technology, and risk management organizational capabilities as well as succession planning; Ms. Bracken’s goals focused on legal organization capabilities and strategic global counseling, succession planning, and employee development; Ms. Montgomery’s goals focused on human resources organizational capabilities and leadership of the Company’s organizational structure, talent assessment, compensation programs, and succession planning; and Mr. Pitstick’s goals focused on strategy, marketing, and communications organizational capabilities and succession planning. After reviewing these evaluations as well as the committee’s interactions with the NEOs and considering the size and complexity of Company’s business as well as external variables such as macro-economic conditions, the Compensation Committee determined each NEO had met or exceeded each of their 2023 goals. Payout. Under the Annual Plan, the Compensation Committee established an individual target award opportunity for each NEO, which was guided by the annual review and evaluation of competitive executive compensation market data described above. Target award opportunities are expressed as a percentage of an NEO’s base salary. For 2023, the Compensation Committee increased Ms. Montgomery’s target award opportunity from 70% to 75% of base salary and Mr. Pitstick’s target award opportunity from 75% to 85% of base salary, in each case, to further align with market-based data with respect to their roles. None of our other NEOs received a target annual incentive opportunity increase for 2023. Actual amounts paid under the Annual Plan were calculated by multiplying each NEO’s base salary in effect on December 30, 2023 by (i) the officer’s Annual Plan target bonus opportunity (which is reflected as a percentage of base salary), (ii) the final Gates Financial Performance Factor and (iii) the Individual Performance Factor. The following table illustrates the calculation of the annual cash incentive awards payable to each of the NEOs under the Annual Plan based on Fiscal 2023 financial performance and individual performance.
Elements of Compensation
(*) Effective February 28, 2023, Mr. Pitstick’s bonus target was increased from 75% to 85%. Accordingly, the dollar value of his target opportunity was calculated proportionally based on his target opportunity levels during 2023, equal to 83.41%. The Compensation Committee approved the 2023 Total Bonus Pool as set forth above, setting the maximum funding level under the Annual Plan. In addition, each individual NEO performance payout was capped at 200% of such NEO’s target opportunity. No NEO received more than 152% of their 2023 target incentive bonus opportunity. Long-Term Incentive Opportunity. The Company believes that its NEOs’ long-term compensation should be directly linked to the value it delivers to shareholders. Equity awards granted to NEOs are designed to provide long-term incentive opportunities over a period of several years. In connection with the Company’s initial public offering (the “IPO”), it adopted the Gates Industrial Corporation plc 2018 Omnibus Incentive Plan (the “2018 Omnibus Incentive Plan”), a market-based long-term incentive program that allows for a mix of awards, including performance shares or units, restricted shares or units and stock options. The 2018 Omnibus Incentive Plan was informed by the peer group and broader public company practice and is consistent with the Company’s compensation objective of providing a long-term equity incentive opportunity that aligns compensation with the creation of shareholder value and achievement of business goals. In February 2023, the Board approved long-term incentive awards (the “2023 LTI”) under the 2018 Omnibus Incentive Plan to incentivize long-term business performance as well as to promote retention. Consistent with the prior year, the target number of ordinary shares underlying the 2023 LTI awards granted to NEOs is comprised of 50% PRSUs and 50% RSUs based on the closing price as of the grant date. Each NEO’s target opportunity for the 2023 LTI is a percentage of his or her base salary as set forth in the table below. LTI target opportunities for the Company’s NEOs in 2023 were determined by the Compensation Committee and the Board at their February 2023 meetings primarily to align with market compensation practices and reward individual performance following a thorough review of competitive market data provided by the Consultant. None of our NEOs received an LTI target opportunity increase for 2023.
Elements of Compensation
| Name | 2023 LTI Target (% of base salary) | Target Grant Value ($) | | I. Jurek | 470 | 5,366,926 | | L. Mallard | 215 | 1,336,299 | | C. Bracken | 175 | 824,040 | | G. Montgomery* | 150 | 630,000 | | T. Pitstick | 175 | 911,532 |
Elements of Compensation
(*) Ms. Montgomery’s target grant value was based on her salary as of February 28, 2023, which was $420,000. The RSUs will vest in substantially equal annual installments on the first three anniversaries of the grant date, subject to the executive’s continued employment through the vesting date. Consistent with the prior year, the PRSUs provide that 75% of the award will vest at the end of the three-year performance period if the Company achieves a certain level of average annual Adjusted Return on Invested Capital (“Adjusted ROIC”) and the remaining 25% will vest at the end of the three-year performance period if the Company achieves certain Relative Total Shareholder Return (“Relative TSR”) goals. The Compensation Committee selected Adjusted ROIC as a metric to drive focus on making sound investments and efficient use of working capital. The Compensation Committee selected Relative TSR as a metric to align a significant portion of pay delivery
Elements of Compensation
| Performance Measure (Weighting) | Description | | Adjusted ROIC (75%) | 75% of PRSU value is calculated as the three-year average of the annual: (Adjusted EBITDA - depreciation and amortization) x (1 - 25% tax rate) divided by the five quarter average of (total assets - non-restricted cash - accounts payable - goodwill and other intangible assets that arose from the acquisition of Gates by Blackstone in 2014). | | | The financial measures used to determine Adjusted ROIC are calculated in accordance with U.S. GAAP as presented in the Company’s financial statements, except (i) Adjusted EBITDA is defined in the same manner as described in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Non-GAAP Measures” of the 2023 Annual Report, (ii) actual results and/or performance targets may be adjusted to exclude the impact of acquisitions and divestitures completed during the performance period, (iii) the depreciation and amortization deduction excludes the amortization of intangible assets arising from the acquisition of Gates by Blackstone in 2014 and (iv) total assets excludes both income tax and deferred tax assets. | | Relative TSR (25%) | 25% of PRSU value is based on the Company’s three-year relative TSR ranking against companies in the S&P 400 Capital Goods Industry Index (the “Relative TSR Peer Group”). TSR is measured by stock price change and dividends over the performance period as a percentage of the beginning stock price. The beginning and ending stock prices are based on the prior 20-day trading averages. In the event absolute TSR performance is negative, payout of Relative TSR is capped at the target level. |
Elements of Compensation
The total number of PRSUs that vest at the end of the three-year performance period will range from a payout of 0% to a maximum of 200% as determined by measuring actual performance over the performance period for Adjusted ROIC and Relative TSR against the performance goals based on a pre-established scale. Payout for achievement between the performance levels will be determined based on a straight-line interpolation of the applicable payout range rounded to the nearest whole percentile for Relative TSR and rounded to the nearest tenth of a percentage for Adjusted ROIC. Goals for the Adjusted ROIC performance measure will be disclosed at the end of the three-year performance period. Payout of the Relative TSR measure is capped at the target level if absolute TSR performance is negative, and requires the following threshold, target and maximum performance levels over the three-year performance period:
Elements of Compensation
| Relative TSR Percentile Rank | Potential Payout Percentage | | 75th Percentile or above (Maximum) | 200% | | 50th Percentile (Target)* | 100% | | 25th Percentile (Threshold) | 50% | | Below 25th Percentile | 0% |
Elements of Compensation
(*) Payout is capped at the target level if absolute TSR performance is negative. Payouts for the PRSUs are subject to the NEO’s continued employment through the end of the applicable performance period and are paid out after the certification of the performance results by the Compensation Committee. The Compensation Committee chose Adjusted ROIC and Relative TSR performance goals at target that are, in the Compensation Committee’s view, challenging but achievable. 2021-2023 PRSUs. For the PRSUs vested and payable in 2023 (granted in 2021 for a three-year performance period from 2021-2023 (the “2021-2023 Performance Period”)), the weighting and level of achievement of the two metrics of Adjusted ROIC and Relative TSR as well as the aggregate payout were as follows:
Elements of Compensation
| Metric | Weight | Payout | | Adjusted ROIC | 50% | 136% | | Relative TSR | 50% | 0% | | Total Payout | | 68% |
Elements of Compensation
(*) Performance between goals was interpolated on a straight-line basis, rounded to the nearest whole percentage. Relative TSR. The PRSU payout level of Relative TSR was based on the Company’s’ three-year total shareholder return ranking versus the Relative TSR Peer Group with a cap at the target level if absolute TSR performance is negative. The threshold, target and maximum performance levels as well the Company’s achievement were as follows:
Other Aspects of the Company’s Compensation Programs
The Company offers a defined contribution retirement benefit to all eligible U.S. participants through the Gates MatchMaker 401(k) Plan. The Gates MatchMaker 401(k) Plan provides employees with individual retirement accounts funded by (1) an automatic Gates-paid contribution of 3% of employee eligible earnings, and (2) a Gates-paid match on employee contributions dollar-for-dollar on the first 3% of eligible earnings that the employee contributes, which is subject to three-year cliff vesting. The Code sets maximum limitations on employee contributions for participants as well as limitations on the earnings upon which employee/employer contributions may be made. The Company currently offers participation in the Supplemental Retirement Plan to specified U.S. executives that include the NEOs. This plan is a nonqualified deferred compensation plan that provides participants with the following two benefit opportunities: •Non elective employer contribution. A 6% employer contribution on eligible earnings that exceed Section 401(a)(17) of the Code’s dollar limits. •Compensation Deferral Opportunity. Employee participants may elect to defer up to 80% of base salary and 80% of bonus compensation. There is no employer paid matching contribution on these elective deferrals.These deferrals are in addition to amounts participants may defer in the Gates MatchMaker 401(k) Plan. Health and Welfare Benefits. The Company also provides other benefits such as medical, dental and short-term disability coverage to each NEO, which are identical to the benefits provided to all other eligible U.S.-based employees. Executive officers, including the NEOs, also receive enhanced benefits that are not available to other employees, such as additional relocation assistance and life, accidental death and dismemberment (“AD&D”) and long-term disability insurance benefits. Specifically, all NEOs were eligible for enhanced life and AD&D insurance benefits in the following amounts in 2023: 3x base salary up to $1,000,000 (for Mr. Pitstick), 3x base salary up to $2,000,000 (for Mr. Mallard and, effective January 1, 2024, Ms. Bracken and Ms. Montgomery) and 3x base salary up to $3,000,000 (for Mr. Jurek). In addition, all NEOs were eligible for enhanced long-term disability insurance benefits of 66.7% of their salary (up to $20,000/month). An individual disability insurance plan is offered to executives with an income of over $360,000, including the NEOs, to cover annual income in excess of $360,000. The plan provides an additional $10,000 of monthly benefit above the group disability plan. The Company also provides unlimited flexible time off and paid holidays to U.S. based employees holding director level or above positions, including the NEOs. Other Benefits. The Company provides other benefits to the NEOs that its believes are necessary to compete for executive talent. The additional benefits for the NEOs generally consist of a parking subsidy, tax preparation services and an executive annual physical examination. Tax gross-ups are provided to U.S. based employees holding director level or above positions, including the NEOs, for certain relocation benefits which may be provided in connection with commencement of employment with the Company. In certain circumstances, the Company provides NEOs with limited personal use of an airplane leased by the Company pursuant to a fractional lease program. The value of any personal use (including for any family members who accompany the NEO) is imputed as income to the NEO, who is fully responsible for any associated income and other tax liability. The specific amounts attributable to the other benefits provided to the NEOs in 2023 are set forth in the “All Other Compensation” column of the Summary Compensation Table of this Proxy Statement. Change in Control and Severance Benefits. The Compensation Committee and the Board believe that executives are better able to perform their duties with respect to any potential proposed corporate transaction without concern for the impact of the transaction on their individual employment with carefully structured change in control and severance benefits. In addition, the Compensation Committee and the Board believe that the interests of the Company’s shareholders are better protected and enhanced by providing greater certainty regarding executive pay obligations in the context of planning and negotiating any potential corporate transactions. Accordingly, in connection with the IPO, the Company adopted the Executive Severance Plan and the Executive Change in Control Plan for certain executives. Executives are not entitled to payments under the Executive Severance Plan if they are entitled to receive payment under the Executive Change in Control Plan discussed below. For information regarding these plans, including the participants, please see “Potential Payments upon Termination or Change in Control.” Prior to 2020, the Company provided limited single-trigger change in control benefits to certain NEOs in their stock options and RSU award agreements. Since 2020, all stock options and RSU award agreements contain double trigger vesting provisions that require the occurrence of both a change in control and a qualified termination. The terms of the Company’s Supplemental Retirement Plan also provide for early distribution upon a change in control. Clawback Policy. In October 2023, the Compensation Committee modified the Company’s clawback policy consistent with the requirements of Exchange Act Rule 10D-1 and NYSE listing standards. The Incentive Compensation Clawback Policy applies to the Company’s current and former Section 16 officers. Under this policy, the Company must recover erroneously awarded incentive-based compensation, subject to limited exceptions, in the event the Company is required to prepare an accounting restatement due to the material noncompliance of the Company with any financial reporting requirement under the securities laws. This policy requires recovery of erroneously awarded incentive compensation regardless of whether a Section 16 officer engaged
Other Aspects of the Company’s Compensation Programs
in any misconduct or is otherwise at fault. This policy applies to incentive-based compensation awarded to a current or former Section 16 officer during the three completed fiscal years immediately preceding the date on which the Company is required to prepare an accounting restatement. The Company’s 2018 Omnibus Incentive Plan also provide that if a covered person engages in any detrimental activity (as defined in the 2018 Omnibus Incentive Plan) as determined by the Compensation Committee, the Compensation Committee may, in its sole discretion, provide for one or more of the following: (i) cancellation of any or all of such covered person’s outstanding awards; or (ii) forfeiture by the covered person of any gain realized on the vesting or exercise of awards, and prompt repayment of any such gain to the Company. Executive Stock Ownership Guidelines. To better align the financial interests of the Company’s NEOs and its shareholders, the Company has executive stock ownership guidelines. These guidelines were last updated on April 12, 2024 to, among other things, exclude shares underlying vested stock options from the ownership calculation and adjust the annual measurement date from February 1st to April 1st of the applicable year. The Company, along with the Compensation Committee, reviews the executive ownership annually as of the annual measurement date. Any officer who does not meet the applicable threshold is required to retain 50% of stock acquired through the exercise or vesting of equity awards made by the Company. Once the applicable threshold is met, the officer must continue to meet the threshold on each annual measurement date. In calculating the ownership, the Company historically included direct and certain indirect ownership and unvested time-based vesting restricted stock units, and did not include unvested stock options or unvested performance-based restricted stock units. As of April 12, 2024, the Company no longer includes shares underlying vested stock options in the ownership calculation. Currently, each NEO is expected to own the Company’s ordinary shares in the following amounts:
2023 Summary Compensation Table
2023 Summary Compensation Table The following table sets forth the compensation for our NEOs for the fiscal years presented.
2023 Summary Compensation Table
| Name and Principal Position | Year | Salary ($)(1) | Bonus ($) | Stock Awards ($)(2) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($)(3) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | All Other Compensation($)(4) | Total ($) | | Ivo Jurek | 2023 | 1,134,129 | | 5,705,428 | — | 2,603,530 | — | 267,927 | 9,711,014 | | Chief Executive Officer | 2022 | 1,090,834 | | 12,104,764 | — | 951,125 | — | 255,667 | 14,402,390 | | | 2021 | 1,051,392 | | 4,204,468 | 1,240,104 | 2,058,713 | — | 217,622 | 8,772,299 | | L. Brooks Mallard | 2023 | 616,298 | | 1,420,560 | — | 944,732 | — | 86,020 | 3,067,610 | | Chief Financial Officer | 2022 | 587,168 | | 2,749,114 | — | 358,122 | — | 95,942 | 3,790,346 | | | 2021 | 561,423 | | 788,522 | 353,326 | 761,063 | — | 75,349 | 2,539,683 | | Cristin C. Bracken | 2023 | 464,709 | | 876,000 | — | 536,803 | — | 50,267 | 1,927,779 | | Chief Legal Officer | 2022 | 429,908 | | 1,529,262 | — | 186,945 | — | 57,419 | 2,203,535 | | Gwen Montgomery | 2023 | 427,673 | | 670,296 | — | 490,770 | — | 58,052 | 1,646,791 | | Chief Human Resources Officer | | | | | | | | | | | Thomas G. Pitstick | 2023 | 513,267 | | 969,000 | — | 660,390 | — | 66,567 | 2,209,224 | | President, APAC, and Global Strategy | 2022 | 472,226 | | 1,790,426 | — | 206,976 | — | 68,053 | 2,537,681 | | | 2021 | 444,528 | | 343,578 | 153,966 | 433,415 | — | 56,417 | 1,431,904 |
2023 Summary Compensation Table
1.The amounts reported in the “Salary” column consist of base salary earned in Fiscal 2023. The following base salary increases were effective March 1, 2023: Mr. Jurek (from $1,097,980 to $1,141,899); Mr. Mallard (from $591,938 to $621,534); Ms. Bracken (from $400,000 to $470,880); and Mr. Pitstick (from $477,868 to $520,876). Effective April 2, 2023, Ms. Montgomery’s base salary increased from $420,000 to $430,500. 2.The amounts reported in the “Stock Awards” column represent stock awards for the fiscal years presented. For Fiscal 2023 this represents the grant date fair value of the annual time-based RSUs and PRSUs granted as part of our 2023 LTI Program described in the CD&A under the heading “Elements of Compensation - Long-Term Incentive Opportunity,” granted under the 2018 Omnibus Incentive Plan calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation — Stock Compensation (“Topic 718”). For information regarding the assumptions used in determining the fair value of these awards, please refer to Note 18, Share-based Compensation, of the audited consolidated financial statements included in the Annual Report. Where the number of shares ultimately issued depends on a performance or market condition, the target number of awards is used for the purpose of the above table. With respect to the annual PRSUs granted as part of our 2023 LTI program, 75% vest subject to attainment of certain levels of Adjusted ROIC and 25% vest subject to attainment of a certain Relative TSR, in each case, at the end of the three-year performance period. The grant date fair value of the shares that vest according to Adjusted ROIC was computed in accordance with Topic 718 based upon the probable outcome of the performance conditions as of the grant date. As the shares that vest according to Relative TSR are subject to market conditions as defined under Topic 718 and are not subject to performance conditions as defined under Topic 718, they have no maximum grant date fair values that differ from the grant date fair values included in the table. Assuming the highest level of performance is achieved with respect to the Adjusted
2023 Summary Compensation Table
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2023 Summary Compensation Table
| Executive Compensation | Table of Contents |
2023 Summary Compensation Table
ROIC awards, the grant date fair value of the stock awards would be: Mr. Jurek — $7,718,018; Mr. Mallard — $1,921,663; Ms. Bracken —$1,185,009; Ms. Montgomery — $907,714; and Mr. Pitstick — $1,310,815. 3.The amounts reported in the “Non-Equity Incentive Plan Compensation” column represent amounts earned by NEOs under the Annual Plan. The terms of the Annual Plan are described more fully above in the “Elements of Compensation — Short-Term Incentive Opportunity.” 4.The amounts reported in the “All Other Compensation” column for Fiscal 2023 reflect the sum of: (i) the amounts contributed by Gates to the Gates MatchMaker 401(k) Plan and the Supplemental Retirement Plan, which are calculated on the same basis for all participants, including the NEOs, and (ii) the cost of all other executive benefits that are required to be reported by SEC rules. The material provisions of the Gates MatchMaker 401(k) Plan and the Supplemental Retirement Plan are described in the “2023 Nonqualified Deferred Compensation” section of this Proxy Statement. Please see the following table for further information on the aggregate incremental cost of these benefits.
2023 Summary Compensation Table
| Name | Company Contributions to Gates MatchMaker 401(k)(a) ($) | Company Contributions to Gates Executive Supplemental Retirement Plan(b) ($) | Other Benefits(c) ($) | Total ($) | | I. Jurek | 19,800 | 105,315 | 142,812 | 267,927 | | L. Mallard | 19,800 | 38,665 | 27,555 | 86,020 | | C. Bracken | 19,800 | 19,299 | 11,168 | 50,267 | | G. Montgomery | 19,800 | 16,592 | 21,660 | 58,052 | | T. Pitstick | 19,800 | 23,415 | 23,352 | 66,567 |
2023 Summary Compensation Table
a.Company Contributions to Gates MatchMaker 401(k) Plan. Gates makes matching contributions of 100% on up to 3% of eligible earnings deferred by all eligible participants, including NEOs, in accordance with the Gates MatchMaker 401(k) Plan. Gates also makes a non-elective contribution to all eligible participants, including NEOs, in an amount equal to 3% of eligible earnings, subject to Code limitations. b.Company Contributions to Gates Supplemental Retirement Plan. Gates makes a retirement contribution of 6% of eligible compensation on behalf of all eligible participants, including the NEOs, under the Supplemental Retirement Plan for eligible compensation that exceeds Section 401(a)(17) of the Code. c.Other Benefits. Gates provided certain other benefits to NEOs. The aggregate amount reported in the Other Benefits column consists of the following: For Mr. Jurek, (i) parking subsidy of $4,140, (ii) tax preparation services of $4,461, (iii) executive physical of $2,100, (iv) enhanced life insurance premium of $5,760, (v) enhanced AD&D and long-term disability insurance premium of $24,431,(vi) personal use of an airplane leased by the Company pursuant to a fractional lease program of $90,420, and (vii) attendance at a Company-sponsored team building and entertainment event valued at $11,500. The aggregate incremental cost of the airplane use was calculated based on the variable operating costs to the Company for personal usage, which includes fees per flight hour, fuel charges and any additional usage or service fees. Mr. Jurek was accompanied by family members, but there was no incremental cost associated with these additional passengers. Because the airplane is used primarily for business travel, this methodology excludes costs that do not change based on usage, such as the annual lease fee. For Mr. Mallard, (i) parking subsidy of $4,140, (ii) enhanced life insurance premium of $3,410, (iii) enhanced AD&D and long-term disability insurance premium of $8,505, and (iv) attendance at a Company-sponsored team building and entertainment event valued at $11,500. For Ms. Bracken, (i) parking subsidy of $4,140, (ii) enhanced life insurance premium of $1,920, and (iii) enhanced AD&D and long-term disability insurance premium of $5,108. For Ms. Montgomery, (i) parking subsidy of $4,140, (ii) enhanced life insurance premium of $1,920, (iii) enhanced AD&D and long-term disability insurance premium of $4,100, and (iv) attendance at a Company-sponsored team building and entertainment event valued at $11,500. For Mr. Pitstick, (i) parking subsidy of $4,140, (ii) enhanced life insurance premiums of $1,920, (iii) enhanced AD&D and long-term disability insurance premium of $5,792, and (iv) attendance at a Company-sponsored team building and entertainment event valued at $11,500.
2023 Summary Compensation Table
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2023 Summary Compensation Table
| Executive Compensation | Table of Contents |
2023 Grants of Plan-Based Awards
2023 Grants of Plan-Based Awards The following table summarizes all grants of plan-based awards to the NEOs in Fiscal 2023:
2023 Grants of Plan-Based Awards
| | | | Estimated Future Payouts under non-equity incentive plan awards | | | Estimated Future Payouts under Equity incentive plan awards | | | All other stock awards: number of shares of stock units (#) | All other option awards: number of securities underlying options (#) | Exercise or base price of option awards ($/sh) | Grant date fair value of stock and option awards ($) | | Name | Award Type | Grant Date | Threshold ($) | Target ($) | Max ($) | Threshold (#) | Target (#) | Max (#) | | | | | | I Jurek | Annual Plan(1) | — | 171,285 | 1,712,849 | 3,425,698 | | | | | | | | | | PRSU(2) | 3/1/2023 | | | | 23,773 | 190,181 | 380,362 | | | | 3,021,974 | | | RSU(3) | 3/1/2023 | | | | | | | 190,181 | | | 2,683,454 | | L. Mallard | Annual Plan(1) | — | 62,153 | 621,534 | 1,243,069 | | | | | | | | | | PRSU(2) | 3/1/2023 | | | | 5,919 | 47,352 | 94,704 | | | | 752,423 | | | RSU(3) | 3/1/2023 | | | | | | | 47,352 | | | 668,137 | | C. Bracken | Annual Plan(1) | — | 35,316 | 353,160 | 706,320 | | | | | | | | | | PRSU(2) | 3/1/2023 | | | | 3,650 | 29,200 | 58,400 | | | | 463,988 | | | RSU(3) | 3/1/2023 | | | | | | | 29,200 | | | 412,012 | | G. Montgomery | Annual Plan(1) | — | 32,288 | 322,875 | 645,750 | | | | | | | | | | PRSU(2) | 2/28/2023 | | | | 2,804 | 22,435 | 44,870 | | | | 355,309 | | | RSU(3) | 2/28/2023 | | | | | | | 22,435 | | | 314,987 | | T. Pitstick | Annual Plan(1) | — | 43,447 | 434,468 | 868,935 | | | | | | | | | | PRSU(2) | 3/1/2023 | | | | 4,038 | 32,300 | 64,600 | | | | 513,247 | | | RSU(3) | 3/1/2023 | | | | | | | 32,300 | | | 455,753 |
2023 Grants of Plan-Based Awards
1.Represents the cash-based award opportunity range under the Annual Plan, the terms of which are summarized under “Elements of Compensation — Short-Term Incentive Opportunity” above. For purposes of this table and threshold level disclosure, the Company assumed that the lowest weighted of the three performance measures achieved the threshold level of attainment (in other words, 10% of the target award was earned) and the Individual Performance Factor was set at 100%. The calculation uses each NEO’s base salary as of December 31, 2023. Please refer to the “2023 Summary Compensation Table” for the actual cash-based award earned under the Annual Plan by each NEO for 2023. 2.Represents the threshold, target and maximum payout shares of the PRSUs granted under the 2018 Omnibus Incentive Plan as part of the 2023 LTI program. Threshold payout of shares is calculated assuming threshold levels of attainment of 50% for the Relative TSR measure. The number of shares ultimately issued, which could be greater or less than target, will be based on achieving specific performance conditions. Please refer to “Elements of Compensation — Long-Term Incentive” above. The grant date fair values of the PRSUs were calculated in accordance with Topic 718 based on targets, the probable outcomes of the performance conditions. 3.Represents RSUs granted under the 2018 Omnibus Incentive Plan as part of the 2023 LTI program. The grant date fair values of the RSU awards were the closing prices on the dates of the grants.
2023 Grants of Plan-Based Awards
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2023 Grants of Plan-Based Awards
| Executive Compensation | Table of Contents |
Outstanding Equity Awards at December 30, 2023
Outstanding Equity Awards at December 30, 2023 The following table provides information regarding outstanding equity awards held by each NEO as of December 30, 2023.
Outstanding Equity Awards at December 30, 2023
| | | Option Awards (*) | | | | Stock Awards | | | | | Name | Grant date and award type | Number of securities underlying un-exercised options exercisable (#) | Number of securities underlying un-exercised options un-exercisable (#) | 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 (#)(3) | Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested ($)(4) | | I. Jurek | 5/18/2015 Tier I | 1,017,239 | — | 6.56 | 5/18/2025 | — | — | — | — | | | 5/18/2015 Tier II | 1,017,239 | — | 6.56 | 5/18/2025 | — | — | — | — | | | 5/18/2015 Tier IV | 1,017,239 | — | 9.84 | 5/18/2025 | — | — | — | — | | | 5/2/2017 Tier I | 135,496 | — | 7.87 | 5/2/2027 | — | — | — | — | | | 5/2/2017 Tier II | 135,496 | — | 7.87 | 5/2/2027 | — | — | — | — | | | 5/2/2017 Tier IV | 135,496 | — | 11.80 | 5/2/2027 | — | — | — | — | | | 2/22/2019 Options(5) | 252,122 | — | 16.46 | 2/22/2029 | — | — | — | — | | | 2/22/2019 Options(6) | 530,972 | 265,488 | 19.00 | 2/22/2029 | — | — | — | — | | | 2/21/2020 Options(5) | 241,406 | — | 12.60 | 2/21/2030 | — | — | — | — | | | 2/26/2021 Options(5) | 99,299 | 49,651 | 15.00 | 2/26/2031 | — | — | — | — | | | 2/26/2021 Options(7) | 26,005 | 13,004 | 16.50 | 2/26/2031 | — | — | — | — | | | 2/26/2021 RSU | — | — | — | | 27,567 | 369,949 | — | — | | | 2/25/2022 RSU | — | — | — | | 109,148 | 1,464,766 | — | — | | | 2/25/2022 PRSU | — | — | — | | — | — | 143,255 | 1,922,482 | | | 7/27/2022 RSU | — | — | — | | 373,334 | 5,010,142 | — | — | | | 3/1/2023 RSU | — | — | — | | 190,181 | 2,552,229 | — | — | | | 3/1/2023 PRSU | — | — | — | | — | — | 166,408 | 2,233,195 | | L. Mallard | 2/24/2020 Options(5) | 76,294 | — | 11.76 | 2/24/2030 | — | — | — | — | | | 2/26/2021 Options(5) | 35,367 | 17,685 | 15.00 | 2/26/2031 | — | — | — | — | | | 2/26/2021 RSU | — | — | — | | 7,855.00 | 105,414 | — | — | | | 2/25/2022 RSU | — | — | — | | 26,918.00 | 361,240 | — | — | | | 2/25/2022 PRSU | — | — | — | | — | — | 35,329 | 474,115 | | | 7/27/2022 RSU | — | — | — | | 78,921.00 | 1,059,120 | — | — | | | 3/1/2023 RSU | — | — | — | | 47,352.00 | 635,464 | — | — | | | 3/1/2023 PRSU | — | — | — | | — | — | 41,433 | 556,031 | | C. Bracken | 9/19/2017 Tier I | 9,536 | — | 13.44 | 9/19/2027 | — | — | — | — | | | 9/19/2017 Tier II | 9,536 | — | 13.44 | 9/19/2027 | — | — | — | — | | | 9/19/2017 Tier IV | 9,536 | — | 20.16 | 9/19/2027 | — | — | — | — | | | 2/22/2019 Options(5) | 9,762 | — | 16.46 | 2/22/2029 | — | — | — | — | | | 2/21/2020 Options(5) | 11,190 | — | 12.60 | 2/21/2030 | — | — | — | — | | | 2/26/2021 Options(5) | 13,867 | 6,935 | 15.00 | 2/26/2031 | — | — | — | — | | | 2/26/2021 RSU | — | — | — | | 3,081.00 | 41,347 | — | — | | | 2/25/2022 RSU | — | — | — | | 16,138.00 | 216,572 | — | — |
Outstanding Equity Awards at December 30, 2023
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Outstanding Equity Awards at December 30, 2023
| Executive Compensation | Table of Contents |
Outstanding Equity Awards at December 30, 2023
| | | Option Awards (*) | | | | Stock Awards | | | | | Name | Grant date and award type | Number of securities underlying un-exercised options exercisable (#) | Number of securities underlying un-exercised options un-exercisable (#) | 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 ($)(2) | Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (#)(3) | Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested ($)(4) | | | 2/25/2022 PRSU | — | — | — | | — | — | 21,180 | 284,236 | | | 7/27/2022 RSU | — | — | — | | 40,694.00 | 546,113 | — | — | | | 3/1/2023 RSU | — | — | — | | 29,200 | 391,864 | — | — | | | 3/1/2023 PRSU | — | — | — | | — | — | 25,550 | 342,881 | | G. Montgomery | 3/13/2017 Tier I | 27,099 | — | 7.21 | 3/13/2027 | — | — | — | — | | | 3/13/2017 Tier II | 27,099 | — | 7.21 | 3/13/2027 | — | — | — | — | | | 3/13/2017 Tier IV | 27,099 | — | 9.84 | 3/13/2027 | — | — | — | — | | | 3/9/2018 Options(5) | 5,000 | — | 17.72 | 3/9/2028 | — | — | — | — | | | 2/22/2019 Options(5) | 11,135 | — | 16.46 | 2/22/2029 | — | — | — | — | | | 2/21/2020 Options(5) | 11,459 | — | 12.60 | 2/21/2030 | — | — | — | — | | | 2/26/2021 Options(5) | 6,190 | 3,096 | 15.00 | 2/26/2031 | — | — | — | — | | | 2/26/2021 RSU | — | — | — | | 1,376 | 18,466 | — | — | | | 2/25/2022 RSU | — | — | — | | 11,105 | 149,029 | — | — | | | 2/25/2022 PRSU | — | — | — | | — | — | 14,574 | 195,583 | | | 7/27/2022 RSU | — | — | — | | 36,747 | 493,145 | — | — | | | 3/1/2023 RSU | — | — | — | | 22,435 | 301,078 | — | — | | | 3/1/2023 PRSU | — | — | — | | — | — | 19,630 | 263,435 | | T. Pitstick | 1/11/2016 Tier I | 84,685 | — | 6.56 | 1/11/2026 | — | — | — | — | | | 1/11/2016 Tier II | 84,685 | — | 6.56 | 1/11/2026 | — | — | — | — | | | 1/11/2016 Tier IV | 84,685 | — | 9.84 | 1/11/2026 | — | — | — | — | | | 5/2/2017 Tier I(1) | 35,724 | — | 7.87 | 5/2/2027 | — | — | — | — | | | 5/2/2017 Tier II | 35,724 | — | 7.87 | 5/2/2027 | — | — | — | — | | | 5/2/2017 Tier IV | 35,724 | — | 11.80 | 5/2/2027 | — | — | — | — | | | 2/22/2019 Options(5) | 23,195 | — | 16.46 | 2/22/2029 | — | — | — | — | | | 2/21/2020 Options(5) | 26,334 | — | 12.60 | 2/21/2030 | — | — | — | — | | | 2/26/2021 Options(5) | 15,411 | 7,707 | 15.00 | 2/26/2031 | — | — | — | — | | | 2/26/2021 RSU | — | — | — | | 3,423 | 45,937 | — | — | | | 2/25/2022 RSU | — | — | — | | 17,688 | 237,373 | — | — | | | 2/25/2022 PRSU | — | — | — | | — | — | 23,214 | 311,532 | | | 7/27/2022 RSU | — | — | — | | 50,967 | 683,977 | — | — | | | 3/1/2023 RSU | — | — | — | | 32,300 | 433,466 | — | — | | | 3/1/2023 PRSU | — | — | — | | — | — | 28,262 | 379,276 |
Outstanding Equity Awards at December 30, 2023
*The Company has a number of awards issued under the 2014 Omaha Topco Ltd. Stock Incentive Plan, which was assumed by the Company and renamed the Gates Industrial Corporation plc Stock Incentive Plan (the “2014 Incentive Plan”) in connection with the Company’s initial public offering in January 2018. No new awards have been granted under this plan since 2017. Of the Company’s NEOs, Mr. Jurek, Ms. Bracken, Ms. Montgomery, and Mr. Pitstick were issued options pursuant to the 2014 Incentive Plan (the “Pre-IPO Options”). The options were split equally into four tiers, each with specific vesting conditions. Tier I options vested evenly over 5 years from the grant date, subject to the participant’s continuing to provide service to the Company on the vesting date. The vesting of Tier II, III and IV options were subject to
Outstanding Equity Awards at December 30, 2023
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Outstanding Equity Awards at December 30, 2023
| Executive Compensation | Table of Contents |
Outstanding Equity Awards at December 30, 2023
performance conditions that were required to be achieved on or prior to July 3, 2022. The performance conditions included Blackstone’s achievement of specified investment returns at the time of a defined liquidity event, and required the participant’s continued provision of service to the Company on the vesting date. In March 2022, a liquidity event (as defined in the grant agreements) occurred following the sale by Blackstone of a certain portion of their interest in Gates, resulting in the vesting of the Tier II and IV options for all eligible participants. The specified investment returns required for Tier III awards to vest were not met on or before the end of the performance period, resulting the expiration of the Tier III awards in 2022. All outstanding Tier I, II and IV options expire ten years after the date of grant. 1.Reflects RSUs that vest in substantially equal annual installments on each of the first, second and third anniversaries of the grant date. 2.Reflects the aggregate market value of the unvested time-vesting RSUs, based on a price of $13.42 per ordinary share, which was the share price of the Company’s ordinary shares on December 29, 2023, the last trading day of Fiscal 2023. 3.The PRSUs vest on the date the Compensation Committee certifies the achievement of the performance measures following the three-year performance period, with 50% subject to attainment of certain levels of Adjusted ROIC and 50% subject to attainment of Relative TSR for the 2021 awards and 75% subject to attainment of certain levels of Adjusted ROIC and 25% subject to attainment of Relative TSR for the 2022 and 2023 awards. For 2022 and 2023 PRSU awards, the amounts shown in this column represent payout shares of the outstanding PRSUs assuming the target level of attainment of 100% for the Adjusted ROIC measure and the threshold level of attainment of 50% for the Relative TSR measure. The number of shares ultimately issued, which could be zero or greater than the number presented above, will be based on achieving specific performance conditions. Please refer to “Elements of Compensation — Long-Term Incentive” above. 4.Represents the aggregate market value of the threshold payout shares of the unvested PRSUs, based on a price of $13.42 per ordinary share, which was the share price of the Company’s ordinary shares on December 29, 2023, the last trading day of Fiscal 2023. 5.Represents time-based stock options granted under the 2018 Omnibus Incentive Plan. These options vest in substantially equal annual installments on the first three anniversaries of the grant date. 6.Represents premium-priced, time-based stock options granted to the Chief Executive Officer under the 2018 Omnibus Incentive Plan. These premium-priced options vest equally on the third, fourth and fifth anniversary of the grant date. 7.Represents premium-priced time-based stock options granted to the Chief Executive Officer under the 2018 Omnibus Incentive Plan. These premium-priced options vest in substantially equal annual installments on the first three anniversaries of the grant date.
2023 Option Exercises and Stock Vested
2023 Option Exercises and Stock Vested The following table provides information regarding the NEOs’ option exercises and stock that vested during 2023.
2023 Option Exercises and Stock Vested
| | Option Awards | | Stock Awards | | | Name | Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Shares or Units Acquired on Vesting (#) | Value Realized on Vesting ($)* | | I. Jurek | — | — | 411,933 | 5,574,223 | | L. Mallard | — | — | 87,056 | 1,184,611 | | C. Bracken | — | — | 41,056 | 556,723 | | G. Montgomery | — | — | 29,256 | 398,356 | | T. Pitstick | — | — | 48,287 | 656,621 |
2023 Option Exercises and Stock Vested
(*) Based on the closing price of the Company’s ordinary shares on the trading day prior to the vesting date.
2023 Option Exercises and Stock Vested
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2023 Option Exercises and Stock Vested
| Executive Compensation | Table of Contents |
2023 Nonqualified Deferred Compensation
2023 Nonqualified Deferred Compensation The Company offers to its executives, including all of the NEOs, the opportunity to participate in the Supplemental Retirement Plan. The table below provides information as of December 30, 2023, for those NEOs who were eligible to participate in this plan.
2023 Nonqualified Deferred Compensation
| Name | Executive Contributions in Last FY(1) | Registrant Contributions in Last FY(2) | Aggregate Earnings (Losses) in Last FY ($)(3) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last FYE ($)(4) | | I. Jurek | — | 105,315 | 221,881 | — | 1,805,222 | | L. Mallard | — | 38,665 | 9,414 | — | 166,772 | | C. Bracken | — | 19,299 | 17,663 | — | 128,810 | | G. Montgomery | — | 16,592 | 8,714 | — | 85,624 | | T. Pitstick | — | 23,415 | 29,067 | — | 229,580 |
2023 Nonqualified Deferred Compensation
1.This column reflects 2023 base salary and Annual Plan compensation earned by the NEOs with respect to Fiscal 2023 that have been deferred on a voluntary basis. The amounts reported in this column are included in the 2023 Summary Compensation Table as either “Salary” or “Non-Equity Incentive Plan Compensation” as appropriate. 2.This column contains contributions by us with respect to Fiscal 2023 under the Supplemental Retirement Plan, which provides for benefits in excess of amounts permitted to be contributed under the Gates MatchMaker 401(k) Plan as a result of Section 401(a)(17) of the Code. As a result, participants are eligible to receive a Retirement Contribution paid by the Company in an amount equal to 6% of eligible compensation that exceeds Section 401(a)(17) of the Code, which is earned in 2023 and paid in the first quarter of 2024. These amounts are included in the “All Other Compensation” column of the Summary Compensation Table. 3.Because amounts included in this column do not include above-market or preferential earnings, none of these amounts are included under the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column of the Summary Compensation Table. 4.Balances at the end of Fiscal 2023 consist of (1) executive contributions, which reflect salary and Annual Plan compensation deferrals made by the NEOs over time, beginning when they first became eligible to participate in the Supplemental Retirement Plan, plus (2) the Company’s contributions, plus (3) earnings and losses credited on all deferrals, less (4) pre-retirement distributions, if any, taken by the NEO since they began participating in the Supplemental Retirement Plan. Of the amounts reported in this column,$652,587, $117,833, $29,334, and $67,314 were reported as compensation for Mr. Jurek, Mr. Mallard, Ms. Bracken, and Mr. Pitstick, respectively, in the Summary Compensation Tables for prior fiscal years.
Narrative to 2023 Nonqualified Deferred Compensation Table
Narrative to 2023 Nonqualified Deferred Compensation Table The Company currently offers participation in the Supplemental Retirement Plan to specified U.S. employees including the NEOs. This plan is a nonqualified deferred compensation plan that provides participants with two benefit opportunities: a Retirement Contribution and a Compensation Deferral Opportunity, as described under the heading “Other Aspects of the Company’s Compensation Programs — Retirement Benefits.” These deferrals are in addition to amounts participants may defer in the Gates MatchMaker 401(k) Plan. Each NEO who participates in the deferral feature of the Supplemental Retirement Plan is 100% vested in both elective deferrals and employer contributions at all times. The amounts deferred are credited to accounts selected by the NEO that mirror the investment alternatives available in the Gates MatchMaker 401(k) Plan. Participants are permitted to select the investment alternatives in which they want their accounts to be deemed to be invested and are credited with earnings and/or losses based on the performance of the relevant investments. Participants are able to periodically change the investment elections for their accounts. An NEO’s vested account will commence to be paid at the earliest to occur of the following events: (1) the specified date elected by the participant (provided the date specified is at least two years from the end of the Supplemental Retirement Plan year in which the contribution to the Supplemental Retirement Plan is made); (2) the participant’s Disability (as defined in the Supplemental Retirement Plan); (3) the participant’s termination of employment; (4) the participant’s death; or (5) upon a Change in Control (as defined in the Supplemental Retirement Plan). If the distribution is made on account of a termination of employment (other than death), the vested account will be distributed in accordance with the form of distribution as elected (as a single lump-sum or in annual installments over two, three, four or five years with the first installment made as soon as possible after the first day of the seventh month following the termination of employment). If a distribution is made on account of death, the participant’s vested account will be distributed to his or her beneficiary in a single lump-sum as soon as practicable following the participant’s death, regardless of the form of benefit elected, with the distribution made as soon as possible on the first day of the month following the payment event. If a distribution is made on
Narrative to 2023 Nonqualified Deferred Compensation Table
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Narrative to 2023 Nonqualified Deferred Compensation Table
| Executive Compensation | Table of Contents |
Narrative to 2023 Nonqualified Deferred Compensation Table
account of a specified date or Change in Control, the distribution will be made or begin as soon as is reasonably practical, but in no event later than the last day of the calendar year that such event occurred.
Potential Payments upon a Termination or Change in Control
Potential Payments upon a Termination or Change in Control Summary of Potential Payments. Severance and other benefits that are payable upon a termination of employment or upon a change in control under the Executive Severance Plan and Change in Control Plan are described below. The table following this narrative discussion summarizes the amounts that would have been payable upon termination or a change in control under certain circumstances to NEOs, assuming that their employment terminated on December 30, 2023. Executive Severance Plan. In connection with the IPO in 2018, the Company adopted the Executive Severance Plan. The Executive Severance Plan provides for severance payments upon certain terminations of employment to its NEOs and other executive officers who are expected to make substantial contributions to its success and thereby provide for stability and continuity of operations. All of the Company’s NEOs participate in the Executive Severance Plan pursuant to individual participation agreements. Following the promotions of Ms. Bracken and Ms. Montgomery in January 2024, they are eligible for enhanced Executive Severance Plan benefits consistent with other executive vice president level employees. The Executive Severance Plan provides that, if the Company terminates the employment of a NEO for any reason other than “cause”, death or disability, or if the NEO voluntarily terminates as a result of “constructive termination,” then the NEO will be entitled to receive: •salary continuation payments in an amount equal to (a) the sum of two times base salary paid in substantially equal installments over a period of 24 months and two times previous year bonus for Mr. Jurek, (b) two times base salary for Mr. Mallard and, as of January 1, 2024, Ms. Bracken, and Ms. Montgomery, paid in substantially equal installments over a period of 24 months, or (c) one times base salary for Mr. Pitstick, paid in substantially equal installments over a period of 12 months; •the NEO’s annual bonus under the Annual Plan as earned (without the adjustment for an individual performance factor) for the year in which the separation occurs (pro-rated for days of service during the fiscal year) plus any earned and unpaid bonus from the prior fiscal year, payable concurrently with cash bonus payments to other employees under the Annual Plan; •cash payments in an amount equal to the total amount of Gates’ portion of the monthly insurance premiums for participation in the health and dental benefit programs in which the NEO participated immediately prior to separation, payable monthly for each month of the welfare continuation period, which is equal to (a) 24 months for Mr. Jurek and Mr. Mallard and, as of January 1, 2024, Ms. Bracken and Ms. Montgomery and (b) 12 months for and Mr. Pitstick; and •reimbursement for reasonable outplacement services that are directly related to the NEO’s termination and incurred only during a six-consecutive month period that ends within or with the 12-month period following the termination of his employment. For these purposes, “cause” and “constructive termination” have the meanings ascribed to such terms in the Executive Severance Plan. The Executive Severance Plan contains a “best-of-net” provision. With a “best-of-net” provision, if any of the participants is subject to an excise tax under Code Section 280G and Code Section 4999, then the amount of severance the participant receives may be reduced so that the excise tax does not apply; however, such reduction will only occur if it results in the receipt of a greater after-tax severance than would otherwise be provided. NEOs are not entitled to payments under the Executive Severance Plan if they are entitled to receive payment under the Executive Change in Control Plan discussed below. In addition, in order to receive payments under the Executive Severance Plan, the NEO must execute and not revoke a release of claims against the Company and continue to comply with confidentiality, non-compete, non-solicitation and non-disparagement covenants during the executive’s employment and for the one-year period following any termination of employment (or such longer period as the NEO is eligible to receive severance payments from us). Executive Change in Control Plan. In connection with the IPO in 2018, the Company adopted the Executive Change in Control Plan in which the NEOs who are in executive vice president roles participate pursuant to individual participation agreements. Following the promotions of Ms. Bracken and Ms. Montgomery in January 2024, this includes all NEOs with the exception of Mr. Pitstick. The Executive Change in Control Plan serves to encourage these key executives to carry out their duties and provide continuity of management in the event of a “change in control” of Gates.
Potential Payments upon a Termination or Change in Control
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Potential Payments upon a Termination or Change in Control
| Executive Compensation | Table of Contents |
Potential Payments upon a Termination or Change in Control
If a change in control occurs and the eligible NEO’s employment is terminated by us or a successor for reasons other than “cause” or is terminated voluntarily by the individual for “constructive termination,” in each case within the period beginning 90 days prior to the consummation of a change in control and ending on the second anniversary of the date of such change in control, then the Executive Change in Control Plan generally provides that the individual would be entitled to receive: •a lump-sum payment in the amount of two and one-half times base salary plus target bonus amount (for Mr. Jurek) and one and one-half times base salary plus target bonus amount (for the other participating NEOs); •a lump-sum payment equal to the NEO’s target annual bonus amount in effect prior to the change in control (pro-rated for days of service during the fiscal year), plus any earned and unpaid bonus from the prior fiscal year; •cash payments in an amount equal to the total amount of the monthly insurance premiums for participation in the health and dental benefit programs as well as the monthly premiums for the life and long-term disability insurance benefit programs in which the NEO participated in immediately prior to separation, payable monthly for each month of the welfare continuation period, which is equal to 30 months for Mr. Jurek and 24 months for each other participating NEOs; and •reimbursement for reasonable outplacement services that are directly related to the NEO’s termination and incurred only during a six-consecutive month period that ends within or with the 12-month period following the termination of his employment. For these purposes, “change in control”, “cause” and “constructive termination” have the meanings ascribed to such terms in the Executive Change in Control Plan. The Executive Change in Control Plan contains a “best-of-net” provision. With a “best-of-net” provision, if any of the participants is subject to an excise tax under Code Section 280G and Code Section 4999, then the amount of severance the participant receives may be reduced so that the excise tax does not apply; however, such reduction will only occur if it results in the receipt of a greater after-tax severance than would otherwise be provided. To the extent a payment or benefit that is paid or provided under the Executive Change in Control Plan would also be paid or provided under the terms of another plan, program, agreement, arrangement or legal requirement, the participating NEO would be entitled to payment under the Executive Change in Control Plan or such other applicable plan, program, agreement, arrangement or legal requirement, whichever provides for greater benefits, but would not be entitled to benefits under both the Executive Change in Control Plan and such other plan, program, agreement, arrangement or legal requirement. In addition, in order to receive payment and benefits under the Executive Change in Control Plan, the participating NEO must execute and not revoke a release of claims against the Company and continue to comply with confidentiality, non-compete, non-solicitation, and non-disparagement covenants during the executive’s employment and for the one-year period following any termination of employment (or such longer period as the participating NEO is eligible to receive severance payments from us). Neither plan contains a single trigger or a modified single trigger for benefits. In addition, the Executive Change in Control Plan does not provide for benefits upon death or disability following a change in control. Annual Plan. All of the NEOs participate in the Annual Plan, which provides that a participant has to be an employee at the time of a payout in order to receive a payout under the Annual Plan, except (i) in the case of death, Disability (as defined in the Annual Plan) or Retirement (as defined in the Annual Plan), (ii) if such payment is required by local law or individual employment agreement or (iii) at the discretion of the Gates Global Bonus Policy Review Committee, under the terms of a Company-approved severance arrangement (referred to as “Termination with Severance”). In the case of death, Disability or Retirement, any bonus payout, if applicable, would have been calculated based on the target achievement of annual financial performance targets (without the adjustment for an individual performance factor), and prorated to reflect the number of days the participant worked for the Company in the year of such termination. In the case of Termination with Severance, the bonus payout would have been calculated in accordance with the Executive Severance and Change in Control Plans, as applicable. Retirement Benefits. The Supplemental Retirement Plan that is made available to all NEOs has payment provisions relating to the termination of employment with the Company and a Change in Control (as defined in the Supplemental Retirement Plan), which are described more fully above under “Nonqualified Deferred Compensation for Fiscal 2023.”
Potential Payments upon a Termination or Change in Control
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Potential Payments upon a Termination or Change in Control
| Executive Compensation | Table of Contents |
2018 Omnibus Incentive Plan — Outstanding Equity Awards
2018 Omnibus Incentive Plan — Outstanding Equity Awards Options. With respect to the Options granted pursuant to the 2018 Omnibus Incentive Plan, in the event of a termination for “cause” (as defined under the 2018 Omnibus Incentive Plan), all outstanding vested and unvested options will immediately terminate and expire. In the event of a termination for death or disability, all outstanding unvested options shall vest and all outstanding vested options shall remain exercisable for one year thereafter. In the event of a termination for any other reason, including a voluntary termination, all outstanding unvested options shall immediately terminate and expire, and all outstanding vested options shall remain exercisable for 60 days after such termination (or, if such termination occurs during or up to seven days before a blackout under the Company’s Securities Trading Policy, then 30 days after such blackout period ends). In the event of a “Change in Control” (as defined in the 2018 Omnibus Incentive Plan), Options awarded in 2019 will vest immediately. The options granted in 2020 and thereafter require both a Change in Control and a termination of the executive by the Company without cause, by the executive by reason of Constructive Termination (as defined in the Executive Change in Control Plan) or a termination for death or disability for accelerated vesting. RSUs and PRSUs. With respect to RSUs and PRSUs granted pursuant to the 2018 Omnibus Incentive Plan, in the event of a termination for any reason other than death or disability prior to the vesting of the RSUs and PRSUs, all unvested RSUs and PRSUs shall be forfeited. In the event of termination for death or disability, RSUs will fully vest and PRSUs representing a pro-rata portion of the number of PRSUs that would have vested based on the Company’s actual performance for the entire performance period will be eligible to vest on a pro-rata basis based on days employed during the performance period. RSUs require both a Change in Control and a termination of the executive by the Company without cause, by the executive by reason of Constructive Termination (as defined in the Executive Change in Control Plan) or a termination for death or disability, for accelerated vesting. Additionally, the target number of PRSUs will be earned if a Change in Control occurs within the first six months of the performance period, based on the Company’s Relative TSR performance as measured through the date of the Change in Control and Adjusted ROIC as measured through the most recently completed fiscal quarter relative to the performance criteria determined by the Compensation Committee, with 50% of the earned PRSUs vesting on the date of the Change in Control and the remaining 50% of the earned PRSUs vesting on the first anniversary of the date of the Change in Control; provided that, the remaining 50% will vest immediately upon a termination by the Company without cause. Notwithstanding the foregoing, the target number of PRSUs will vest on the date of such Change in Control if the PRSUs are not continued, converted, assumed or replaced by the Company, any of its subsidiaries or a successor entity thereto.
Payments and Benefits Upon Termination or Change in Control
Payments and Benefits Upon Termination or Change in Control The following table describes the potential payments and benefits that would have been payable to the NEOs assuming an eligible termination (as described above under “Summary of Potential Payments”) of their employment on the last business day of Fiscal 2023. The amounts shown in the table below do not include: •payments and benefits to the extent they are provided generally to all salaried employees upon termination of employment and do not discriminate in scope, terms or operation in favor of the NEOs; •distributions of previously vested plan balances under the Gates MatchMaker 401(k) Plan and the Supplemental Retirement Plan (see the “2023 Nonqualified Deferred Compensation” section above for information about the Supplemental Retirement Plan); or •Payments related to any accidental death and dismemberment and long-term disability insurance any NEOs holds.
Payments and Benefits Upon Termination or Change in Control
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Payments and Benefits Upon Termination or Change in Control
| Executive Compensation | Table of Contents |
Payments and Benefits Upon Termination or Change in Control
| All amounts shown in $ | I. Jurek | L. Mallard | C. Bracken | G. Montgomery | T. Pitstick | | Termination – Disability or Death | | | | | | | Cash Severance Payments(1) | 2,603,530 | 944,732 | 536,803 | 490,770 | 660,390 | | Equity Awards(2) | 14,146,451 | 3,338,547 | 1,912,605 | 1,486,319 | 2,190,265 | | Total | 16,749,981 | 4,283,279 | 2,449,408 | 1,977,089 | 2,850,655 | | Termination – By the Company without Cause | | | | | | | Cash Severance Payments(3) | 7,490,858 | 2,187,801 | 1,478,563 | 1,351,770 | 1,181,266 | | Health Plan Continuation(4) | 27,173 | 22,505 | 28,677 | 9,687 | 13,587 | | Outplacement(5) | 8,000 | 8,000 | 8,000 | 8,000 | 8,000 | | Equity Awards(2) | — | — | — | — | — | | Total | 7,526,031 | 2,218,306 | 1,515,240 | 1,369,457 | 1,202,853 | | Change in Control – (with Termination) | | | | | | | Cash Severance Payments(6) | 7,136,870 | 2,809,335 | 1,772,863 | 1,620,833 | 1,181,266 | | Health Plan Continuation(4) | 77,577 | 61,775 | 50,159 | 23,807 | 13,587 | | Outplacement(5) | 8,000 | 8,000 | 8,000 | 8,000 | 8,000 | | Equity Awards(2) | 14,146,451 | 3,338,547 | 1,912,605 | 1,486,319 | 2,190,265 | | Total | 21,368,898 | 6,217,657 | 3,743,627 | 3,138,959 | 3,393,118 | | Change in Control – (without Termination) | | | | | | | Equity Awards(2) | 4,749,365 | 1,177,310 | 716,709 | 524,601 | 789,512 | | Total | 4,749,365 | 1,177,310 | 716,709 | 524,601 | 789,512 |
Payments and Benefits Upon Termination or Change in Control
1.Cash Severance Payments (Death or Disability): Amounts reported reflect the Fiscal 2023 Annual Plan payment (without the adjustment for an individual performance factor). 2.Equity Awards: For options granted pursuant to the 2018 Omnibus Incentive Plan, if the NEO’s employment is terminated as a result of death or disability, all outstanding unvested options will accelerate and become exercisable and all RSUs will vest. For the options granted in 2019, in the event of a Change in Control, all such unvested options will accelerate and become exercisable. For the options granted in 2020 and 2021, all unvested options will accelerate if the executive’s employment is terminated by the Company without Cause, by the executive by reason of Constructive Termination (as defined in the Executive Change in Control Plan) or as a result of death or disability, in each case, following a Change in Control. The amounts reported in “Change in Control — (without Termination)” reflect the “spread” value for the Tier I time-vesting options granted prior to Fiscal 2017 and also includes the “spread” value for the options granted under the 2018 Omnibus Incentive Plan, in each case representing the difference between the closing stock price of Gates’ ordinary shares on December 30, 2023 and the applicable exercise price, unless the stock option exercise price is higher than the close price, in which case the stock options were not assigned a value. With respect to all RSUs, in the event of the executive’s termination for death or disability, all unvested RSUs will accelerate. All unvested RSUs will accelerate if the executive’s employment is terminated by the Company without Cause, by the executive by reason of Constructive Termination (as defined in the Executive Change in Control Plan) or a as a result of death or disability, in each case, following a Change in Control. The amounts reported in “Change in Control — (with Termination)” reflect the value of unvested RSUs based on the closing price of Gates’ ordinary shares on December 30, 2023. In the event of termination for death or disability, the amount reported for PRSUs is calculated at target. Upon a “Change in Control - (with Termination)” and “Change in Control — (without Termination)”, the amount reported is calculated at target and assumes that the PRSUs are not continued, converted, assumed or replaced by the Company or successor entity. 3.Cash Severance Payments (Termination without Cause): Following the promotions of Ms. Bracken and Ms. Montgomery in January 2024, they are eligible for enhanced Executive Severance Plan benefits consistent with other executive vice president level employees, and the amounts reported include potential payments payable under their enhanced benefits. For Mr. Jurek, the amount reported reflects the sum of (a) the Fiscal 2023 Annual Plan payment (without the adjustment for an individual performance factor), which would be paid concurrently with cash bonus payments to other employees under the Annual Plan, and (b) two times Mr. Jurek’s then-current base salary, which would be paid in substantially equal installments over a period of 24 months for Mr. Jurek. For the remaining NEOs, the amount reported is the sum of (a) the Fiscal 2023 Annual Plan bonus (without an adjustment for an individual performance factor), which would be paid concurrently with cash bonus payments to other employees under the Annual Plan, and (b) two times the then-current base salary for Mr. Mallard, Ms. Bracken, and Ms. Montgomery, which would be paid in substantially equal installments over a period of 24 months and one time the then-current base salary for Mr. Pitstick, which would be paid in substantially equal installments over a period of 12 months.
Payments and Benefits Upon Termination or Change in Control
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Payments and Benefits Upon Termination or Change in Control
| Executive Compensation | Table of Contents |
Payments and Benefits Upon Termination or Change in Control
4.Health Plan Continuation: The amounts reported in “Termination — By the Company without Cause” represent cash payments in an amount equal to the estimated total amount of Gates’ portion of the monthly COBRA insurance premiums for participation in the health and dental benefit programs in which the NEO participated immediately prior to termination for a period of (i) 24 months for Mr. Jurek and Mr. Mallard and (ii) 12 months for Ms. Bracken, Ms. Montgomery, and Mr. Pitstick. The amounts reported in “Change-in-Control — (with Termination)” represent cash payments in an amount equal to the estimated total amount of the monthly COBRA insurance premiums for participation in the health and dental benefit programs as well as the monthly premiums for the life and long-term disability insurance programs in which the NEO participated immediately prior to termination for a period of (i) 30 months for Mr. Jurek and (ii) 24 months for Mr. Mallard, Ms. Bracken, and Ms. Montgomery. 5.Outplacement: Amounts reported represent costs of outplacement services for a six-month period for each NEO based on rates in effect as of December 30, 2023. 6.Cash Severance Payments (Change in Control): Ms. Bracken and Ms. Montgomery became participants in the Company’s Executive Change in Control Plan in January 2024, and the amounts reported include potential payments payable under their participation agreements. The amounts reported reflect the sum of (i) for Mr. Jurek, two and one-half times and (ii) for Mr. Mallard, Ms. Bracken, and Ms. Montgomery, one-half times, the sum of the executive’s then-current base salary and the Fiscal 2023 Annual Plan target bonus, the total of which would be paid in a lump sum no later than the 60th day following the termination date. The Executive Change in Control Plan provides that if the executive is subject to an excise tax under Code Section 280G and Code Section 4999 then the amount of severance the executive receives may be reduced so that the excise tax does not apply, however, such reduction will only occur if the receipt of a greater after-tax severance than would otherwise be provided. For purposes of the above disclosure, the Company assumed the executive’s severance amounts will not be reduced.
CEO PAY RATIO
CEO PAY RATIO The following table sets forth the ratio of the CEO’s total compensation to that of the Company’s median employee for Fiscal 2023.
CEO PAY RATIO
| CEO total annual compensation | $9,711,014 | | Median employee total annual compensation | $26,423 | | Ratio | 368 to 1 |
CEO PAY RATIO
The SEC rules for identifying the median employee and calculating the pay ratio allow companies to adopt a variety of methodologies, to apply certain exclusions and to make reasonable estimates and assumptions that reflect their employee population and compensation practices. As a result, the pay ratio reported above may not be comparable to the pay ratio reported by other companies, as other companies may have utilized different methodologies and have different employment and compensation practices. The Company believes the pay ratio above is a reasonable estimate calculated in a manner consistent with the SEC rules. The median employee used for purposes of calculating the 2022 CEO pay ratio ceased employment with the Company prior to the measurement date of December 2, 2023. To calculate the 2023 CEO pay ratio, the Company used an employee whose compensation was substantially similar to the median employee used for purposes of calculating the 2022 CEO pay ratio, as there has been no material change in the Company’s employee population or employee compensation programs, that it believes would significantly impact the CEO pay ratio. This median employee was a salaried employee located in Poland. The methodology and material assumptions, adjustments and estimates used to identify the median employee are set forth in the Company’s proxy statement filed with the SEC on April 26, 2023. The Company calculated the median employee’s total annual compensation in the same manner as it calculated the CEO’s total annual compensation in the Summary Compensation Table in this Proxy Statement.
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE In accordance with rules adopted by the Securities and Exchange Commission pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), we provide the following disclosure regarding executive compensation for our principal executive officer (“PEO”) and non-PEO NEOs and Company performance for the fiscal years listed below.
PAY VERSUS PERFORMANCE
| Year | Summary Compensation Table Total for Ivo Jurek¹ ($) | Compensation Actually Paid to Ivo Jurek¹˒² ($) | Average Summary Compensation Table Total for Non-PEO NEOs³, 4 ($) | Average Compensation Actually Paid to Non-PEO NEOs¹˒²˒³ ($) | Value of Initial Fixed $100 Investment based on:5 | | Net Income ($ Millions) | Company Selected Measure: Adjusted ROIC6 (%) | | | | | | | TSR ($) | Peer Group TSR ($) | | | | 2023 | 9,711,014 | 12,554,973 | 2,212,843 | 2,610,559 | 97.88 | 189.06 | 256.4 | 23.0 | | 2022 | 14,402,390 | 23,468,581 | 2,840,801 | 2,999,906 | 83.22 | 137.30 | 242.5 | 20.0 | | 2021 | 8,772,299 | 11,819,941 | 2,711,194 | 3,205,263 | 116.05 | 152.59 | 331.3 | 22.4 | | 2020 | 7,680,120 | 6,594,375 | 1,841,794 | 1,463,484 | 93.07 | 119.52 | 90.0 | 15.2 |
PAY VERSUS PERFORMANCE
1.Ivo Jurek was our PEO for each year presented. 2.The amounts shown for compensation actually paid (“CAP”) above have been calculated in accordance with Item 402(v) of Regulation S-K and do not reflect compensation actually earned, realized, or received by the Company’s NEOs. These amounts reflect the Summary Compensation Table Total for the PEO and the average of the Summary Compensation Table Totals for the non-PEO NEOs, in each case, with certain adjustments as described in footnote 3 below. 3.CAP reflects the exclusions and inclusions of certain amounts for the PEO and the Non-PEO NEOs as set forth below. Equity values are calculated in accordance with FASB ASC Topic 718. Amounts shown for exclusion of stock awards and option awards below are the totals from the Stock Awards and Option Awards columns set forth in the Summary Compensation Table.
PAY VERSUS PERFORMANCE
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PAY VERSUS PERFORMANCE
| Executive Compensation | Table of Contents |
PAY VERSUS PERFORMANCE
| Year | Summary Compensation Table Total for Ivo Jurek ($) | Exclusion of Stock Awards and Option Awards for Ivo Jurek ($) | Inclusion of Equity Values for Ivo Jurek ($) | CAP to Ivo Jurek ($) | | 2023 | 9,711,014 | (5,705,428) | 8,549,387 | 12,554,973 |
PAY VERSUS PERFORMANCE
| Year | Average Summary Compensation Table Total for Non-PEO NEOs ($) | Average Exclusion of Stock Awards and Option Awards for Non-PEO NEOs ($) | Average Inclusion of Equity Values for Non-PEO NEOs ($) | Average CAP to Non-PEO NEOs ($) | | 2023 | 2,212,843 | (983,964) | 1,381,681 | 2,610,559 |
PAY VERSUS PERFORMANCE
The amounts in the inclusion of equity values in the tables above are derived from the amounts set forth in the following tables:
PAY VERSUS PERFORMANCE
| Year | Year-End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for Ivo Jurek ($) | Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for Ivo Jurek ($) | Vesting-Date Fair Value of Equity Awards Granted During Year that Vested During Year for Ivo Jurek ($) | Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for Ivo Jurek ($) | Fair Value at Last Day of Prior Year of Equity Awards Forfeited During Year for Ivo Jurek ($) | Total - Inclusion of Equity Values for Ivo Jurek ($) | | 2023 | 5,928,013 | 1,344,455 | — | 1,276,919 | — | 8,549,387 |
PAY VERSUS PERFORMANCE
For the values of equity awards included in the above tables, the valuation of certain stock option awards uses the same Black-Scholes option-pricing model with volatility assumptions that differ materially from those disclosed as of the grant date. The stock options were originally valued using a debt-levered model for the volatility assumption incorporating a weighting commensurate with the time Gates had been publicly traded. For purposes of this table, a weighted blend of Gates’ volatility and the average historical peer volatilities was used in cases where Gates’ stock price history was not sufficient to cover the expected terms of stock options being valued.
PAY VERSUS PERFORMANCE
| Year | Average Year-End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for Non-PEO NEOs ($) | Average Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for Non-PEO NEOs ($) | Average Vesting-Date Fair Value of Equity Awards Granted During Year that Vested During Year for Non-PEO NEOs ($) | Average Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for Non-PEO NEOs ($) | Average Fair Value at Last Day of Prior Year of Equity Awards Forfeited During Year for Non-PEO NEOs ($) | Total - Average Inclusion of Equity Values for Non-PEO NEOs ($) | | 2023 | 1,023,066 | 220,194 | — | 138,421 | — | 1,381,681 |
PAY VERSUS PERFORMANCE
4.Non-PEO NEOs for each year presented are listed below.
PAY VERSUS PERFORMANCE
| 2020 | 2021 | 2022 | 2023 | | L. Brooks Mallard | L. Brooks Mallard | L. Brooks Mallard | L. Brooks Mallard | | Walter Lifsey | Walter Lifsey | Walter Lifsey | Thomas G. Pitstick | | Grant Gawronski | Grant Gawronski | Grant Gawronski | Cristin C. Bracken | | David Wisniewski | Thomas G. Pitstick | Thomas G. Pitstick | Gwendolyn Montgomery | | David Naemura | | Cristin C. Bracken | | | Roger Gaston | | | |
PAY VERSUS PERFORMANCE
5.The Peer Group TSR set forth in this table utilizes the S&P 400 MidCap Capital Goods Industry Group (“Peer Group”), which we also utilize in the stock performance graph required by Item 201(e) of Regulation S-K included in our 2023 Annual Report. The comparison assumes $100
PAY VERSUS PERFORMANCE
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PAY VERSUS PERFORMANCE
| Executive Compensation | Table of Contents |
PAY VERSUS PERFORMANCE
was invested for the period starting December 27, 2019 (the last trading day of our fiscal year 2019), through the end of the listed year in the Company and in the Peer Group, respectively. Historical stock performance is not necessarily indicative of future stock performance. 6.We determined Adjusted ROIC to be the most important financial performance measure used to link the Company’s performance to CAP for our PEO and Non-PEO NEOs in 2022 and 2023. More information on Adjusted ROIC can be found at the “Elements of Compensation - Long-Term Incentive Opportunity” section of the CD&A. This performance measure may not have been the most important financial performance measure for years 2021 and 2020 and we may determine a different financial performance measure to be the most important financial performance measure in future years. The following charts set forth the relationships between: (i) the Company’s cumulative TSR, the Peer Group’s cumulative TSR, CAP for our PEO, and the average CAP for our non-PEO NEOs; (ii) CAP for our PEO, the average CAP for our non-PEO NEOs and Net Income; and (iii) CAP for our PEO, the average CAP for our non-PEO NEOs and Adjusted ROIC, in each case, for 2023, 2022, 2021, and 2020. As illustrated in the charts, CAP for our PEO decreased from Fiscal 2022 to Fiscal 2023 while the other measures presented increased over the same period. This decrease was primarily attributable to the amount of CAP generated by our PEO’s Tiers II and IV Pre-IPO Options that vested in Fiscal 2022, the value of which represents $16,825,131 of our PEO’s total 2022 CAP. As further described under “Outstanding Equity Awards at December 30, 2023” above, the Pre-IPO Options were granted under the Company’s 2014 Incentive Plan prior to the Company becoming a public company.
PAY VERSUS PERFORMANCE
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PAY VERSUS PERFORMANCE
| Executive Compensation | Table of Contents |
PAY VERSUS PERFORMANCE
In accordance with the requirements of Item 402(v)(6) of Regulation S-K, the following table presents the financial performance measures that the Company considers to have been the most important in linking CAP to our PEO and other NEOs for 2023 to Company performance. The measures in this table are not ranked.
PAY VERSUS PERFORMANCE
| Most Important Performance Measures | | Adjusted ROIC | | Adjusted EBITDA | | Relative TSR | | Free Cash Flow | | Revenue |
PAY VERSUS PERFORMANCE
The Compensation Committee has not historically and does not currently evaluate CAP as calculated pursuant to Item 402(v)(2) of Regulation S-K as part of its executive compensation determinations; accordingly, the Company does not use any financial or non-financial performance measures specifically to link NEO CAP to Company performance. All information provided above under the “Pay Versus Performance” heading will not be deemed to be incorporated by reference in any filing of our Company under the Securities Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.
PAY VERSUS PERFORMANCE
| Gates Industrial Corporation | 46 | 2024 Proxy Statement |
Director Compensation
Director Compensation The Company’s employee director and Sponsor-affiliated directors receive no additional compensation for serving on the Board. As such, Mr. Jurek, Mr. Meisel, and Mr. Simpkins did not receive director compensation for Fiscal 2023. As of January 30, 2024 Mr. Simpkins was no longer a Sponsor-affiliated director and began receiving compensation for his service on the Board. The Board typically reviews and approves the non-employee director compensation annually, based on the recommendation of the Compensation Committee. In making a recommendation, the Compensation Committee considers market data for the Company’s peer group, which is the same peer group used for the Company’s executive compensation peer group, as well as a general industry group consisting of comparably sized general industry companies (excluding financial services) with median revenues of approximately the Company’s size. In Fiscal 2023, all eligible directors received an annual compensation package of $235,000, consisting of $100,000 as an annual cash retainer (payable in quarterly installments in arrears) and $135,000 in value of restricted stock units (payable annually). Restricted stock units vest in full on the first anniversary of the grant date. The chairpersons of the Company’s three standing committees are entitled to receive the additional annual cash retainers (payable in quarterly installments in arrears) listed below.
Director Compensation
| Role | Additional Annual Cash Retainer ($) | | Chair, Audit Committee | 25,000 | | Chair, Compensation Committee | 15,000 | | Chair, Nominating and Governance Committee | 15,000 |
Director Compensation
In addition, in light of Mr. Simpkins qualifying for compensation for service on our Board, the chairperson of our Board was entitled to receive an additional $130,000 in value of restricted stock units (payable annually) beginning in 2024. The Company reimburses directors for expenses associated with each meeting attended. Under the Supplemental Retirement Plan, directors may also elect to defer 20% to 100% of their annual cash retainer and any committee chair fees, if applicable, as well as 100% of their annual RSU grant.
Director Stock Ownership Guidelines
| Director Compensation | Table of Contents |
Director Compensation Table
Director Compensation Table The following table provides summary information concerning the compensation of the Company’s directors who served during Fiscal 2023. The Company’s employee director and any Sponsor-affiliated directors are excluded from the table below because they received no additional compensation for serving on the Board. As described above, beginning January 30, 2024, Mr. Simpkins was no longer a Sponsor-affiliated director and began receiving director compensation.
Director Compensation Table
| Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2) | Option Awards ($) | Total ($) | | F. Eliasson | 125,000 | 134,990 | — | 259,990 | | J. Ireland | 100,000 | 134,990 | — | 234,990 | | S. Mains | 100,000 | 134,990 | — | 234,990 | | W. Neely | 115,000 | 134,990 | — | 249,990 | | A. Tillman | 100,000 | 134,990 | — | 234,990 | | M. Zhang | 100,000 | 134,990 | — | 234,990 |
Director Compensation Table
1.Represents director fees earned during Fiscal 2023. Directors who serve on the Board for a portion of the fiscal year receive a pro-rated amount of the annual cash retainer. Mr. Eliasson’s director fees include an additional $25,000 for his service as Chair of the Audit Committee. Mr. Neely’s director fees include an additional $15,000 for his service as Chair of the Nominating and Governance Committee. Ms. Mains elected to defer her 2023 annual cash retainer. 2.The amounts shown represent the aggregate grant date fair value of stock awards granted in Fiscal 2023 calculated in accordance with Topic 718. As of December 30, 2023, the aggregate number of unvested RSUs held by the Company’s directors was as follows: Mr. Eliasson (9,567), Mr. Ireland (9,567), Ms. Mains (9,567), Mr. Neely (9,567), Ms. Tillman (9,567), and Dr. Zhang (9,567), all of which vested on March 1, 2024. Ms. Mains and Dr. Zhang elected to defer their shares pursuant to the Supplemental Retirement Plan.
Director Compensation Table
| Gates Industrial Corporation | 49 | 2024 Proxy Statement |
Proposal 1 — Election of Directors
Proposal 1 — Election of Directors RESOLVED THAT, the following individuals be and hereby are elected or re-elected, as applicable, each by way of separate ordinary resolution, to serve as directors until the election and qualification of his or her respective successor or until his or her earlier removal or resignation pursuant to the Articles of Association:
SINGLE FIGURE TOTAL REMUNERATION TABLE FOR EXECUTIVE DIRECTOR
| Name | Year | Salary ($)(1) | All Other Benefits ($)(2) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | Total Fixed ($) | Stock Awards ($)(3) | Option Awards ($)(4) | Annual Bonus ($)(5) | Total Variable ($) | Total ($) | | Ivo Jurek | 2023 | 1,134,129 | 267,927 | — | 1,402,056 | 5,574,223 | 125,532 | 2,603,530 | 8,303,285 | 9,705,341 | | | 2022 | 1,090,834 | 255,667 | — | 1,346,501 | 2,441,702 | 263,851 | 951,125 | 3,656,678 | 5,003,179 |
2023 GRANTS OF PLAN-BASED AWARDS
2023 GRANTS OF PLAN-BASED AWARDS Executive Director 2023 Long-Term Incentive. In February 2023, the Board approved annual long-term incentive awards (the “2023 LTI”) under the 2018 Omnibus Incentive Plan to incentivize long-term business performance as well as to promote retention. The 2023 LTI for the Executive Director is comprised of 50% RSUs and 50% PRSUs. The RSUs will vest in substantially equal annual installments on the first three anniversaries of the grant date, subject to the Executive Director’s continued employment through the vesting date. The PRSUs provide that 75% of the award will vest if the Company achieves a certain level of average annual Adjusted Return on Invested Capital (“Adjusted ROIC”) and the remaining 25% will vest if the Company achieves certain Relative Total Shareholder Return (“Relative TSR”) goals. Performance for the Adjusted ROIC and Relative TSR goals are each measured over a three year performance period based on the pre-established scale. The Compensation Committee selected Adjusted ROIC as a metric to drive focus on making sound investments and efficient use of working capital. The Compensation Committee selected Relative TSR as a metric to align a significant portion of pay delivery directly with shareholder value creation. It also aligns the interests and experience of executive officers with those of the Company and its shareholders and filters out macroeconomic and other factors that are not within management’s control.
2023 GRANTS OF PLAN-BASED AWARDS
| Performance Measure (Weighting) | Description | | Adjusted ROIC (75%) | 75% of PRSU value is calculated as the three-year average of the annual: (Adjusted EBITDA - depreciation and amortization) x (1 - 25% tax rate) divided by the five quarter average of (total assets - non-restricted cash - accounts payable - goodwill and other intangible assets that arose from the acquisition of Gates by Blackstone in 2014). | | | The financial measures used to determine Adjusted ROIC are calculated in accordance with U.S. GAAP as presented in the Company’s financial statements, except (i) Adjusted EBITDA is defined in the same manner as described in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Non-GAAP Measures” of the 2023 Annual Report, (ii) actual results and/or performance targets may be adjusted to exclude the impact of acquisitions and divestitures completed during the performance period, (iii) the depreciation and amortization deduction excludes the amortization of intangible assets arising from the acquisition of Gates by Blackstone in 2014 and (iv) total assets excludes both income tax and deferred tax assets. | | Relative TSR (25%) | 25% of PRSU value is based on the Company’s three-year relative TSR ranking against companies in the S&P 400 Capital Goods Industry Index (the “Relative TSR Peer Group”). TSR is measured by stock price change and dividends over the performance period as a percentage of the beginning stock price. The beginning and ending stock prices are based on the prior 20-day trading averages. In the event absolute TSR performance is negative, payout of Relative TSR is capped at the target level. |
2023 GRANTS OF PLAN-BASED AWARDS
The total number of PRSUs that vest at the end of the three-year performance period will range from a payout of 0% to a maximum of 200% as determined by measuring actual performance over the performance period for Adjusted ROIC and Relative TSR against the performance goals based on a pre-established scale. Payout for achievement between the performance levels will be determined based on a straight-line interpolation of the applicable payout range rounded to the nearest whole percentile for Relative TSR and rounded to the nearest tenth of a percentage for Adjusted ROIC. Goals for the Adjusted ROIC performance measure will be disclosed at the end of the three-year performance period. Payout of the Relative TSR measure is capped at the target level if absolute TSR performance is negative, and requires the following threshold, target and maximum performance levels over the three-year performance period:
2023 GRANTS OF PLAN-BASED AWARDS
| Relative TSR Percentile Rank | Potential Payout Percentage | | 75th Percentile or above (Maximum) | 200 | | 50th Percentile (Target)* | 100 | | 25th Percentile (Threshold) | 50 | | Below 25th Percentile | 0 |
2023 GRANTS OF PLAN-BASED AWARDS
(*) Payout is capped at the target level if absolute TSR performance is negative.
2023 GRANTS OF PLAN-BASED AWARDS
| Gates Industrial Corporation | A-6 | 2024 Directors’ Remuneration Report |
2023 GRANTS OF PLAN-BASED AWARDS
| Appendix A | Table of Contents |
2023 GRANTS OF PLAN-BASED AWARDS
Payouts are subject to the Executive Director’s continued employment through the end of the applicable performance period and are paid out after the certification of the performance results by the Compensation Committee. The Compensation Committee chose Adjusted ROIC and Relative TSR performance goals at target that are, in the Compensation Committee’s view, challenging but achievable. 2021-2023 PRSUs. For the PRSUs vested and payable in 2023 (granted in 2021 for a three-year performance period from 2021-2023 (the “2021-2023 Performance Period”)), the weighting and level of achievement of the two metrics of Adjusted ROIC and Relative TSR as well as the aggregate payout were as follows:
2023 GRANTS OF PLAN-BASED AWARDS
| Metric | Weight | Payout | | Adjusted ROIC | 50% | 136% | | Relative TSR | 50% | 0% | | Total Payout | | 68% |
2023 GRANTS OF PLAN-BASED AWARDS
Adjusted ROIC. The PRSU payout level for Adjusted ROIC was based on the three-year average performance during the 2021-2023 Performance Period. The annual threshold, target, and maximum goals for this metric as well as the achievement and payout for this metric were as follows:
2023 GRANTS OF PLAN-BASED AWARDS
| Performance Period | Threshold (50% funding) | Target (100% funding) | Maximum (200% funding) | Annual Achievement | | | 3-Year Average Annual Achievement | Metric Weighting | | | | | | 2021 | 2022 | 2023 | | | | 2021 - 2023 | 15.0% | 20.0% | 25.0% | 22.4% | 20.0% | 23.0% | 21.8% | | | Adjusted ROIC Payout | | | | | | | 136.0% | 50.0% |
2023 GRANTS OF PLAN-BASED AWARDS
(*) Performance between goals was interpolated on a straight-line basis, rounded to the nearest whole percentage. Relative TSR. The PRSU payout level of Relative TSR was based on the Company’s’ three-year total shareholder return ranking versus the Relative TSR Peer Group with a cap at the target level if absolute TSR performance is negative. The threshold, target and maximum performance levels as well the Company’s achievement were as follows:
2023 GRANTS OF PLAN-BASED AWARDS
| Performance Period | Threshold (50% funding) | Target (100% funding) | Maximum (200% funding) | Achievement | Metric Weighting | | Twenty-day average stock price prior to December 31, 2020 and December 29, 2023 | 25th percentile (12% TSR) | 50th percentile (39% TSR) | 75th percentile (95% TSR) | 14th percentile (-4% TSR) | | | Relative TSR Payout | | | | 0.0% | 50.0% |
2023 GRANTS OF PLAN-BASED AWARDS
Executive Director Award. Based on the Company’s performance over the 2021-2023 Performance Period as described above, the numbers of ordinary shares underlying PRSUs granted in 2021 vested as follows for the Executive Director:
2023 GRANTS OF PLAN-BASED AWARDS
| Name | Target Award (#) | Total Earned Award (#) | | I. Jurek | 165,400 | 112,472 |
2023 GRANTS OF PLAN-BASED AWARDS
2023 Short-Term Incentive. The Company provides a short-term annual incentive opportunity under the Gates Global Bonus Policy (the “Annual Plan”) to reward certain employees, including the Executive Director, for achieving specific performance goals that would advance the Company’s profitability and drive key business results, and to recognize individuals based on their contributions to those results. Payouts under the Annual Plan were based on a combination of the achievement of the Company’s financial performance goals in 2023 (the “Gates Financial Performance Factor”), which fund the Annual Plan, and the Executive Director’s performance during the fiscal year against his individual performance goals (the “Individual Performance Factor”). New for Fiscal 2023, the maximum total bonus opportunity for the Executive Director was capped at 200% of his target incentive bonus opportunity.
2023 GRANTS OF PLAN-BASED AWARDS
| Gates Industrial Corporation | A-7 | 2024 Directors’ Remuneration Report |
2023 GRANTS OF PLAN-BASED AWARDS
| Appendix A | Table of Contents |
2023 GRANTS OF PLAN-BASED AWARDS
Gates Financial Performance Factor. The Gates Financial Performance Factor sets the funding level for the Annual Plan. The Compensation Committee, after an evaluation of possible financial performance measures, determined to continue using Adjusted EBITDA, Free Cash Flow and Revenue as the financial performance measures for 2023. The Compensation Committee determined that these financial performance measures would be critical indicators of the Company’s performance for 2023 and, when combined, would contribute to sustainable growth. The Annual Plan financial performance measures and weightings for 2023 are described below.
2023 GRANTS OF PLAN-BASED AWARDS
| Performance Measure (Weighting) | Description* | | Adjusted EBITDA (50%) | Adjusted EBITDA under the Annual Plan is defined in the same manner as described in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Non-GAAP Measures,” of the 2023 Annual Report. | | Free Cash Flow (30%) | Calculated as Adjusted EBITDA (as defined for purposes of the Annual Plan as described immediately above), less capital expenditures, plus or minus the change in working capital versus prior year. | | Revenue (20%) | Revenue under the Annual Plan is defined as actual revenue as reflected in the Company’s financial statements, excluding the impacts of acquisitions and divestitures made during the fiscal year. |
2023 GRANTS OF PLAN-BASED AWARDS
(*) At the time of setting these performance measures, the Compensation Committee determined that the performance measures and payout calculations may exclude the translation impact of foreign exchange gains and losses if excessive in nature, and the Compensation Committee may exclude from the targets and/or the calculation of the performance measures impacts of any non-recurring or unusual item. No such exclusions were made in 2023. The weighted achievement factor for each of the financial performance measures is determined by multiplying the weight attributed to each performance measure by the applicable achievement factor for each measure. For each of the performance measures, the achievement factor is determined by calculating the payout percentage against the target goal based on a pre-established scale. Funding attainment with respect to each of these performance measures can range from 0% of the target incentive to 200% of the target incentive as follows: •0% funding for performance below the threshold requirement; •50% of target incentive for achieving 90% of the target performance requirement (threshold); •100% of target incentive for achieving 100% of the target performance requirement (target); and •200% of target incentive for achieving 110% or above of the target performance requirement (maximum). Payouts for performance between points are interpolated on a straight-line mathematical basis and rounded to the nearest whole number. The following table outlines the calculation of the 2023 Total Bonus Pool based on the Company’s attainment of the 2023 Gates Financial Performance Factor measures, each of which were approved by the Compensation Committee with no adjustments to the previously approved performance measures described above.
2023 GRANTS OF PLAN-BASED AWARDS
| (dollars in millions) | | Threshold ($) | Target ($) | Maximum ($) | 2023 Attainment | | Funding | | | Measure | Weighting (%) | | | | $ | % | Amount $ | % of Target | | Adjusted EBITDA | 50 | 642.1 | 713.4 | 784.7 | 747.0 | 105 | 20.8 | 147 | | Free Cash Flow | 30 | 585.6 | 650.7 | 715.8 | 709.6 | 109 | 16.2 | 191 | | Revenue* | 20 | 3,355.3 | 3,559.0 | 3,737.3 | 3,570.2 | 100 | 6.0 | 106 | | Total | | | | | | | $43.0 | 152% |
2023 GRANTS OF PLAN-BASED AWARDS
(*) Revenue threshold and maximum are narrower than 90% and 110% to align with the associated Adjusted EBITDA levels. Individual Performance Factor. At the end of the performance period, the Compensation Committee considered both the Company’s attainment of the 2023 Gates Financial Performance Factor measures as described above and the Executive Director’s individual performance based on achievement against the performance criteria listed below to determine the appropriate attainment percentage for the Executive Director.
2023 GRANTS OF PLAN-BASED AWARDS
| Gates Industrial Corporation | A-8 | 2024 Directors’ Remuneration Report |
2023 GRANTS OF PLAN-BASED AWARDS
| Appendix A | Table of Contents |
2023 GRANTS OF PLAN-BASED AWARDS
•Financial Goals: Achieving the Company’s annual financial plan, as well as the annual financial plan for the executive’s region or function. This included goals related to the Company’s 2023 sales, adjusted EBITDA and free cash flow. •Operational Goals: Achieving targets related to workplace safety, product quality and delivery, freight costs, productivity and inventory management. •Geographic Growth Goals: Focusing on growth opportunities to drive richer margins and mix. •Key Initiatives: Executing on key company initiatives set forth in the Company’s strategic plan, including those related to the industrial, mobility, and automotive end markets, 80/20 portfolio optimization, innovation, and digital assets. •Doing Business the Right Way: ◦Adhering to the Company’s compliance programs and policies, including completion of all required certifications such as those related to workplace health and safety; international laws and regulations; and information technology security. ◦Achieving environmental, sustainability and governance goals related to natural resource consumption, eco-innovation solutions for customers, diversity, equity and inclusion programs, and compliance with reporting requirements as well as defining and executing on other environmental, sustainability and governance targets. •Building Our People: Focusing on the attraction, development and engagement of our workforce through annual development plans, development opportunities, succession planning, and diversity, equity and inclusion initiatives and processes. After reviewing the factors listed above and considering the size and complexity of the Company’s business as well as external variables such as macro-economic conditions, the Compensation Committee determined that the Executive Director had met or exceeded his 2023 goals. Payout. The actual amount paid to the Executive Director under the Annual Plan was calculated by multiplying his base salary in effect on December 30, 2023 by (i) his Annual Plan target bonus opportunity (which is reflected as a percentage of base salary), (ii) the final Gates Financial Performance Factor, and (iii) the Individual Performance Factor. The following table illustrates the calculation of the annual cash incentive awards payable to the Executive Director under the Annual Plan based on 2023 financial performance and individual performance.
2023 GRANTS OF PLAN-BASED AWARDS
| Name | Base Salary ($) | Target Annual Plan Opportunity (% of Base Salary) | Target Annual Plan Opportunity ($) | Gates Financial Performance Factor (%) | Individual Performance Factor (%) | 2023 Actual Payout ($) | | Ivo Jurek | 1,141,899 | 150 | 1,712,849 | 152 | 100 | 2,603,530 |
2023 GRANTS OF PLAN-BASED AWARDS
| Gates Industrial Corporation | A-9 | 2024 Directors’ Remuneration Report |
2023 GRANTS OF PLAN-BASED AWARDS
| Appendix A | Table of Contents |
2023 Grants of Plan-Based Awards Table
2023 Grants of Plan-Based Awards Table The following table summarizes all grants of plan-based awards to the Company’s Executive Director in Fiscal 2023 and Fiscal 2022.
2023 Grants of Plan-Based Awards Table
| Award Type | Grant Date | Estimated Future Payouts under non-equity incentive plan awards | | | Estimated Future Payouts under Equity Incentive Plan Awards | | | All other stock awards: number of shares of stock units (#) | All other option awards: number of securities underlying options (#) | Exercise or base price of option awards ($/sh) | Grant date face value of stock and option awards ($)(4) | Grant date fair value of stock and option awards ($) | | | | Threshold ($) | Target ($) | Max ($) | Threshold (#) | Target (#) | Max (#) | | | | | | | Annual Plan(1) | — | 171,285 | 1,712,849 | 3,425,698 | | | | | | | | | | PRSU(2) | 3/1/2023 | | | | 23,773 | 190,181 | 380,362 | | | | 5,366,908 | 3,021,974 | | RSU(3) | 3/1/2023 | | | | | | | 190,181 | | | 2,683,454 | 2,683,454 | | Annual Plan(1) | — | 164,697 | 1,646,970 | 3,293,940 | | | | | | | | | | PRSU(2) | 2/25/2022 | | | | 20,465 | 163,721 | 327,442 | | | | 5,160,486 | 2,821,321 | | RSU(3) | 2/25/2022 | | | | | | | 163,721 | | | 2,580,243 | 2,580,243 | | RSU(3) | 7/27/2022 | | | | | | | 560,000 | | | 6,703,200 | 6,703,200 |
2023 Grants of Plan-Based Awards Table
1.Represents the cash-based award opportunity range under the Annual Plan for 2023 and 2022. For purposes of this table and threshold level disclosure, the Company assumed that the lowest weighted of the three performance measures achieved the threshold level of attainment (in other words, 10% of the target award was earned) and the Individual Performance Factor was set at 100%. The calculation uses the Executive Director’s base salary as of December 30, 2023 and December 31, 2022. Please refer to the “Single Figure Total Remuneration Table for Executive Directors” for the actual cash based award earned by the Executive Director under the Annual Plan for 2023 and 2022. 2.Represents the threshold, target and maximum payout shares of the PRSUs granted under the 2018 Omnibus Incentive Plan in 2023 and 2022. Threshold payout of shares is calculated assuming a threshold attainment of 50% for the Relative TSR measure for the PRSUs granted in 2023 and 2022. The number of shares ultimately issued, which could be greater or less than target, will be based on achieving specific performance conditions. The grant date fair value of the PRSUs for the March 1, 2023 and February 25, 2022 awards were calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation — Stock Compensation (“Topic 718”) based on target, the probable outcome of the performance conditions. 3.Represents RSUs granted under the 2018 Omnibus Incentive Plan. The grant date fair value of the RSUs was the closing price on the date of grant. 4.Face value is calculated based on the closing share price on the date of the grant ($14.11 for grants in March 2023) and, in the case of the PRSUs, on the maximum future share payout.
2023 Grants of Plan-Based Awards Table
| Gates Industrial Corporation | A-10 | 2024 Directors’ Remuneration Report |
2023 Grants of Plan-Based Awards Table
| Appendix A | Table of Contents |
Outstanding Equity Awards at December 30, 2023
Outstanding Equity Awards at December 30, 2023 The following table provides information regarding outstanding equity awards held by the Executive Director as of December 30, 2023.
Outstanding Equity Awards at December 30, 2023
| | | Option Awards * | | | | Stock Awards | | | | | Grant Date | | Number of securities underlying unexercised options exercisable (#) | Number of securities underlying unexercised options unexercisable (#) | Option Exercise Price ($) | 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 ($)(2) | Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (#)(6) | Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested ($)(7) | | Awards without performance measures | | | | | | | | | | | 5/18/2015 | Tier I | 1,017,239 | — | 6.56 | 5/18/2025 | | | | | | 5/2/2017 | Tier I | 135,496 | — | 7.87 | 5/2/2027 | | | | | | 2/22/2019 | Options(3) | 252,122 | — | 16.46 | 2/22/2029 | | | | | | 2/22/2019 | Options(4) | 530,972 | 265,488 | 19.00 | 2/22/2029 | | | | | | 2/21/2020 | Options(5) | 241,406 | — | 12.60 | 2/21/2030 | | | | | | 2/26/2021 | Options(3) | 99,299 | 49,651 | 15.00 | 2/26/2031 | | | | | | 2/26/2021 | Options(5) | 26,005 | 13,004 | 16.50 | 2/26/2031 | | | | | | 2/26/2021 | RSU | | | | | 27,567 | 369,949 | | | | 2/25/2022 | RSU | | | | | 109,148 | 1,464,766 | | | | 7/27/2022 | RSU | | | | | 373,334 | 5,010,142 | | | | 3/1/2023 | RSU | | | | | 190,181 | 2,552,229 | | | | Awards with performance measures | | | | | | | | | | | 5/18/2015 | Tier II | 1,017,239 | — | 6.56 | 5/18/2025 | | | | | | 5/18/2015 | Tier IV | 1,017,239 | — | 9.84 | 5/18/2025 | | | | | | 5/2/2017 | Tier II | 135,496 | — | 7.87 | 5/2/2027 | | | | | | 5/2/2017 | Tier IV | 135,496 | — | 11.80 | 5/2/2027 | | | | | | 2/25/2022 | PRSU | | | | | | | 143,255 | 1,922,482 | | 3/1/2023 | PRSU | | | | | | | 166,408 | 2,233,195 |
Outstanding Equity Awards at December 30, 2023
(*) The Company has a number of awards issued under the 2014 Omaha Topco Ltd. Stock Incentive Plan, which was assumed by the Company and renamed the Gates Industrial Corporation plc Stock Incentive Plan in connection with the initial public offering in January 2018. No new awards have been granted under this plan since 2017. The Executive Director was awarded options pursuant to the 2014 Incentive Plan. The options were split equally into four tiers, each with specific vesting conditions. Tier I options vested evenly over 5 years from the grant date, subject to the participant’s continuing to provide service to the Company on the vesting date. The vesting of Tier II, III and IV options were subject to performance conditions that were required to be achieved on or prior to July 3, 2022. The performance conditions included Blackstone’s achievement of specified investment returns at the time of a defined liquidity event, and required the participant’s continued provision of service to the Company on the vesting date. In March 2022, a liquidity event (as defined in the grant agreements) occurred following the sale by Blackstone of a certain portion of their interest in Gates, resulting in the vesting of the Tier II and IV options for all eligible participants. The specified investment returns required for Tier III awards to vest were not met on or before the end of the performance period, resulting the expiration of the Tier III awards in 2022. All outstanding Tier I, II and IV options expire ten years after the date of grant. 1.RSUs vest in substantially equal annual installments on each of the first, second and third anniversaries of the grant date. 2.Reflects the aggregate market value of the unvested RSUs, based on a price of $13.42 per ordinary share, which was the share price of the Company’s ordinary shares on December 29, 2023, the last trading day of the fiscal year.
Outstanding Equity Awards at December 30, 2023
| Gates Industrial Corporation | A-11 | 2024 Directors’ Remuneration Report |
Outstanding Equity Awards at December 30, 2023
| Appendix A | Table of Contents |
Outstanding Equity Awards at December 30, 2023
3.Represents Options granted under the 2018 Omnibus Incentive Plan. These options vested in substantially equal annual installments on the first three anniversaries of the grant date. 4.Represents premium-priced Options granted to the Executive Director under the 2018 Omnibus Incentive Plan. These premium-priced Options vest on the third, fourth and fifth anniversary of the grant date. 5.Represents premium-priced Options granted to the Executive Director under the 2018 Omnibus Incentive Plan. These premium-priced Options vested in substantially equal annual installments on the first three anniversaries of the grant date. 6.The PRSUs vest on the date the Compensation Committee certifies the achievement of the performance measures following the three-year performance period, with 75% subject to attainment of certain levels of Adjusted ROIC and 25% subject to attainment of Relative TSR. The amounts shown in this column represent payout shares of the outstanding PRSUs assuming the target level of attainment of 100% for the Adjusted ROIC measure and the threshold level of attainment of 50% for the Relative TSR measure. The number of shares ultimately issued, which could be zero or greater than the number presented above, will be based on achieving specific performance conditions. Please refer to “Elements of Compensation — Long-Term Incentive” in the proxy statement. 7.Represents the aggregate market value of the threshold payout shares of the unvested PRSUs, based on a price of $13.42 per ordinary share, which was the share price of the Company’s ordinary shares on December 29, 2023, the last trading day of the fiscal year.
2023 Option Exercises and Stock Vested for the Executive Director
2023 Option Exercises and Stock Vested for the Executive Director The table below sets forth certain information concerning each exercise of options and stock vesting events for the Company’s Executive Director during Fiscal 2023.
2023 Option Exercises and Stock Vested for the Executive Director
| | Option Awards | | Stock Awards | | | Name | Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Shares or Units Acquired on Vesting (#) | Value Realized on Vesting ($)(1) | | I. Jurek | — | — | 411,933 | 5,574,223 |
2023 Option Exercises and Stock Vested for the Executive Director
1.Based on the closing share price of the Company’s ordinary shares on the trading day prior to the vesting date.
Outstanding Equity Awards for certain Non-Executive Directors at December 30, 2023
Outstanding Equity Awards for certain Non-Executive Directors at December 30, 2023 The following table provides information regarding outstanding equity awards held by the Non-Executive Directors as of December 30, 2023. Mr. Simpkins and Mr. Meisel did not hold any outstanding equity awards as of December 30, 2023.
Outstanding Equity Awards for certain Non-Executive Directors at December 30, 2023
| | | Option Awards | | | | | | Name | Grant Date | Number of securities underlying unexercised options exercisable (#) | Option Exercise Price ($) | 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) | | F. Eliasson | 3/1/2023 | — | — | — | 9,567 | 128,389 | | J. Ireland | 3/1/2023 | — | — | — | 9,567 | 128,389 | | S. Mains | 3/1/2023 | — | — | — | 9,567 | 128,389 | | W. Neely | 3/1/2023 | — | — | — | 9,567 | 128,389 | | A. Tillman | 3/1/2023 | — | — | — | 9,567 | 128,389 | | M. Zhang | 3/1/2023 | — | — | — | 9,567 | 128,389 |
Outstanding Equity Awards for certain Non-Executive Directors at December 30, 2023
1.Represents unvested time-based RSUs that vest on the first anniversary of the grant date. 2.Reflects the aggregate market value of the unvested RSUs, based on a price of $13.42 per ordinary share, which was the share price of the Company’s ordinary shares on December 29, 2023, the last trading day of the fiscal year.
2023 Option Exercises and Stock Vested for certain Non-Executive Directors
2023 Option Exercises and Stock Vested for certain Non-Executive Directors The table below sets forth certain information concerning each exercise of options and stock vesting events for the Non-Executive Directors during Fiscal 2023.
2023 Option Exercises and Stock Vested for certain Non-Executive Directors
| Name | Option Awards | | Stock Awards | | | | Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Shares or Units Acquired on Vesting (#) | Value Realized on Vesting ($)(1) | | F. Eliasson | — | — | 11,563 | 128,002 | | J. Ireland | — | — | 7,931 | 111,986 | | S. Mains(2) | — | — | — | — | | W. Neely | — | — | 7,931 | 111,986 | | A. Tillman | — | — | 7,931 | 111,986 | | M. Zhang(3) | — | — | — | — |
2023 Option Exercises and Stock Vested for certain Non-Executive Directors
1.Based on the closing share price of the Company’s ordinary shares on the trading day prior to the vesting date. 2.Ms. Mains elected to defer all 7,931 shares that vested, pursuant to the Supplemental Retirement Plan. 3.Dr. Zhang elected to defer all 7,931 shares that vested, pursuant to the Supplemental Retirement Plan.
2023 Option Exercises and Stock Vested for certain Non-Executive Directors
| Gates Industrial Corporation | A-13 | 2024 Directors’ Remuneration Report |
2023 Option Exercises and Stock Vested for certain Non-Executive Directors
| Appendix A | Table of Contents |
Executive Director (CEO) Pay Ratio
Executive Director (CEO) Pay Ratio The following table sets forth the ratio of the Executive Director’s total compensation to the median, 25th and 75th percentile of total compensation of his full-time equivalent U.K.-based employees for Fiscal 2023, 2022, 2021, and 2020. The Executive Director (CEO) single figure used in the calculation of the ratios below reflects the single figure total remuneration (as disclosed in the Single Figure Total Remuneration Table for the Executive Director table above).
Executive Director (CEO) Pay Ratio
| Financial Year | Method | 25th percentile pay ratio | Median pay ratio | 75th percentage pay ratio | | 2023 | C | 252 to 1 | 199 to 1 | 195 to 1 | | 2022 | C | 112 to 1 | 92 to 1 | 91 to 1 | | 2021 | C | 133 to 1 | 87 to 1 | 85 to 1 | | 2020 | C | 77 to 1 | 61 to 1 | 60 to 1 |
Executive Director (CEO) Pay Ratio
The changes in the above pay ratios are attributable primarily to the change in the remuneration of the CEO, the reasons for which are set out under the Single Figure Total Remuneration Table for the Executive Director table above. The calculation methodology used reflects Option C as defined under the relevant regulations. To determine the employees at the three quartiles for 2023, the Company reviewed and analyzed salary data for its permanent employees as of December 30, 2023. Given the variance in pay elements by employee, the Company opted for Method C and selected the annual base salary to identify the best equivalents for the U.K. employees, as base salary represents the single largest component of pay for the majority of employees across the business. The Company then excluded employees whose start dates were after Fiscal 2023 began, as they were not paid for the full year. Once the employees were identified, the Company included benefits and all other relevant compensation elements and converted to U.S. dollars using the Fiscal 2023 average exchange rate in order to provide a like comparison to that of the Executive Director. Each employee’s pay and benefits were calculated using each employee’s aggregated remuneration, consistent with the Executive Director’s aggregated remuneration. The Company did not make any adjustments or omit any components of pay. The 2023, 2022, 2021, and 2020 salary and total remuneration for the 25th, 50th and 75th percentile of U.K. employees are as follows:
Executive Director (CEO) Pay Ratio
| Financial Year | (dollars) | 25th percentile | Median | 75th percentile | | 2023 | Salary | 34,708 | 45,954 | 46,929 | | | Total remuneration | 38,454 | 48,776 | 49,788 | | 2022 | Salary | 42,747 | 51,493 | 51,756 | | | Total remuneration | 44,704 | 54,645 | 54,864 | | 2021 | Salary | 33,613 | 56,592 | 56,567 | | | Total remuneration | 39,923 | 61,410 | 62,708 | | 2020 | Salary | 36,707 | 46,876 | 47,184 | | | Total remuneration | 39,226 | 49,929 | 50,959 |
Executive Director (CEO) Pay Ratio
As of December 31, 2023, the Company’s U.K. workforce is made up of approximately 670 employees, as compared to approximately 6,989 employees in North America and approximately 14,929 employees globally. The Executive Director works in North America and his compensation is benchmarked against companies in an industry peer group that are listed on the New York Stock Exchange or NASDAQ, as described under Role of the Peer Group below. With this perspective, the Company believes the median pay ratio for Fiscal 2023 is consistent with the pay, reward and progression policies for the Company’s U.K. employees taken as a whole.
Executive Director (CEO) Pay Ratio
| Gates Industrial Corporation | A-19 | 2024 Directors’ Remuneration Report |
Executive Director (CEO) Pay Ratio
| Appendix A | Table of Contents |