DEF 14A of Hyliion Holdings Corp., Apr 10, 2024

DEF 14A of Hyliion Holdings Corp.

Filed Apr 10, 2024 · FY20230001759631-24-000083

Open on EDGAR

  1. ITEM 1 — ELECTION OF DIRECTORS

    ITEM 1 — ELECTION OF DIRECTORS In accordance with our Bylaws, the Board has fixed the number of directors currently constituting the Board at eight. Our Board is currently staggered, which means that only one class of directors is up for election in any given year. At the Annual Meeting, our Class I directors, Vincent Cubbage, Thomas Healy, and Melanie Trent, who currently serve as directors on the Board, are up for election. Our Board, based on the recommendation of the Nominating and Corporate Governance Committee, proposes that Mr. Cubbage, Mr. Healy and Ms. Trent be elected at the Annual Meeting, with each holding office until the 2027 Annual Meeting of Stockholders or until their respective successors are elected and qualified. Biographical information about each of the nominees and a discussion of the qualifications, attributes and skills of each nominee is contained in the following section. If you are a stockholder of record and you sign your proxy card or vote by telephone or over the Internet but do not give instructions with respect to the voting of directors, your shares will be voted “FOR” the election of Mr. Cubbage, Mr. Healy and Ms. Trent. Mr. Cubbage, Mr. Healy and Ms. Trent have accepted such nomination; however, in the event that a nominee is unable or declines to serve as a director at the time of the Annual Meeting, the proxies will be voted for any nominee who shall be designated by the Board to fill such vacancy, or the Board may reduce the size of the Board. If you are a beneficial owner holding your shares in street name and you do not give voting instructions to your broker, bank or other intermediary, that organization will leave your shares unvoted on this matter. The Board of Directors recommends a vote “FOR” the election of Mr. Cubbage, Mr. Healy and Ms. Trent.

  2. CORPORATE GOVERNANCE: THE BOARD AND MANAGEMENT

    CORPORATE GOVERNANCE: THE BOARD AND MANAGEMENT

  3. Board and Corporate Governance Developments

    Board and Corporate Governance Developments In 2023, we continued to evolve our Board composition and corporate governance practices toward best practices and alignment with the Company’s strategic direction and objectives as set forth below. Board Developments On March 17, 2023, Elaine L. Chao and Howard Jenkins resigned as part of a refreshment of our Board. The Board voted to expand the number of directors to ten (10) and appointed Melanie Trent, Richard Freeland and Rodger Boehm to fill the resulting vacancies. Each of Ms. Trent and Messrs. Freeland and Boehm bring key industry and organizational management credentials and we are pleased to have them join us. In addition, effective February 13, 2024, Andrew Card, Jr. and Stephen Pang have resigned from our Board. Mr. Card is pursuing a new leadership role with The George & Barbara Bush Foundation and Mr. Pang is resigning due to personal reasons. In connection with the resignations of Mr. Card and Mr. Pang, the Board voted to decrease the size of the Board from ten (10) members to eight (8) members. We believe that the current Board composition, skill set and amended Board size align with the current and future needs of the Company. Corporate Governance Developments In 2023, the Board adopted the Hyliion Holdings Corp. Amended and Restated Clawback Policy (the “Clawback Policy”), designed to comply with Section 10D of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), Exchange Act Rule 10D-1, and NYSE Listed Company Manual Section 303A.14. The Clawback Policy provides for the recoupment of excess incentive compensation paid to current and former executives of the Company in the event that the Company is required to prepare an accounting restatement of its financial statements due to material noncompliance with the financial reporting requirements under the securities law. In addition, the Board also adopted the Hyliion Holdings Corp. Supplemental Clawback Policy (the “Supplemental Clawback Policy”) which provides for additional recoupment of incentive compensation, including any time-based cash or equity awards or rights, paid to employees and officers if such individuals engage in acts of fraud or material misrepresentation, regardless of whether an accounting restatement is required. In addition, in May 2023, the Board adopted and approved the Hyliion Holdings Corp. Executive Severance Plan (the “Severance Plan”) and a form of Change in Control Agreement (the “CIC Agreement”) for certain executive officers. In agreeing to participate in the Severance Plan and CIC Agreement, each of the executive officers (except for Mr. Healy) agreed to terminate their existing employment agreements. Because Mr. Healy’s employment agreement included unique provisions relating to his intellectual property rights, Mr. Healy and the Board agreed that he would continue to be employed under the terms of his employment agreement but would be permitted to enter into a CIC Agreement. The Severance Plan and the CIC Agreement are intended to attract and retain qualified executives by providing participants with an opportunity to receive benefits in the event of certain qualifying separations from employment with the Company, given the limited availability of corporate executive positions and the typically long search processes to acquire such positions. The Compensation Committee determined that the new Severance Plan and CIC Agreement were necessary and appropriate following its periodic review of the Company’s executive compensation and severance arrangements and benchmarking those practices to ensure the competitiveness of the Company in attracting and retaining executive talent.

  4. Board Leadership

    Board Leadership The roles of Board Chair and Chief Executive Officer are currently separated. Although the Board believes that there are advantages to having an independent Board Chair, the Board has no policy regarding the separation of the roles of Chair and Chief Executive Officer and considers the duties of these roles and whether they should be combined or separated, during succession planning. We believe our approach is appropriate because it allows the Board to select a Chair and leadership structure, from time to time, based on the criteria that it deems in the best interests of the Company and its stockholders. In the event the Board elects as its Chair a director who is not independent, the Board shall also designate a lead director who is independent.

  5. Directors

    Directors Our directors, their ages and committee memberships as of March 13, 2024 are as follows:

  6. Directors

    | Name | Age | Position | | Employee Directors | | | | Thomas Healy(4) | 31 | Chief Executive Officer and Director | | Non-Employee Directors | | | | Rodger Boehm(1)(4) | 64 | Director | | Jeffrey Craig(3) | 63 | Chair of the Board of Directors | | Vincent Cubbage(2*)(3) | 59 | Director | | Richard Freeland(2)(4) | 66 | Director | | Mary Gustanski(2)(4*) | 61 | Director | | Robert Knight, Jr.(1*)(5) | 66 | Director | | Melanie Trent(1)(3*) | 59 | Director |

  7. Directors

    ____________ (1) Member of the Audit Committee (2) Member of the Compensation Committee (3) Member of the Nominating and Corporate Governance Committee (4) Member of the Technology Committee (5) Audit Committee Financial Expert * Committee Chair Rodger Boehm. Mr. Boehm has served as a director of the Board since March 2023. Mr. Boehm was a senior partner at McKinsey & Company, Inc. where he spent 31 years, departing in 2017, in a variety of roles in increasing responsibility. He led client service for leading global institutions helping companies to significantly improve their revenue, cost, and service performance. Mr. Boehm currently serves on the board of directors of Ruggable and FreightCar America, and he also served on the board of directors of Meritor Inc. from 2017 to 2023. Mr. Boehm holds a bachelor of science degree from Purdue University and a master of business administration degree from Harvard University. Jeffrey Craig. Mr. Craig has served as a director of the Board since January 2022. Mr. Craig served as Executive Chairman of the Board of Meritor, Inc. (NYSE: MTOR) (“Meritor”) until December 31, 2021 and Chief Executive Officer and President of Meritor from April 2015 to February 28, 2021. He previously served Meritor as President and Chief Operating Officer from June 2014 to March 2015; Senior Vice President and President, Commercial Truck and Industrial from February 2013 to May 2014; Senior Vice President and Chief Financial Officer from February 2009 to January 2013; Acting Controller from May 2008 to January 2009; Senior Vice President and Controller from May 2007 to April 2008; and Vice President and Controller from May 2006 to April 2007. Prior to joining Meritor, Mr. Craig served as President and Chief Executive Officer of General Motors Acceptance Corp. (“GMAC”) Commercial Finance (commercial lending service) from 2001 to April 2006. Prior to that, he served as President and Chief Executive Officer of GMAC’s Business Credit division from 1999 to 2001. He joined GMAC as a general auditor in 1997 from Deloitte & Touche, where he served as an audit Partner. Mr. Craig has been a director of Arcosa, Inc. (NYSE: ACA) (manufacturer of infrastructure-related products) since September 2018, where he serves as a member of the audit committee. Mr. Craig holds a bachelor’s degree in Accounting from Michigan State University and an M.B.A. from Duke University. Vincent Cubbage. Mr. Cubbage served as Tortoise Acquisition Corp.’s (“TortoiseCorp”) Chief Executive Officer, President and Director from November 2018 to September 2020, as Chairman of the Tortoise Corp Board of Directors since the completion of its initial public offering in March 2019, and has continued to serve on the Board following the completion of the business combination of TortoiseCorp with the Company. From July 2020, Mr. Cubbage served as Chief Executive Officer, President and as a Director of Tortoise Acquisition Corp. II (“TAC II”) and as Chairman of the Board of Tortoise Acquisition Corp. Il since the completion of its initial public offering in September 2020, and continued to serve on the Board of Volta Inc. (NYSE: VLTA) following the completion of its business combination with TAC II. Mr. Cubbage was appointed Co-Chairperson of the Board of Directors from March 28, 2022 and Interim Chief Executive Officer from June 13, 2022 through the sale of the business to Shell USA, Inc on March 31, 2023. Mr. Cubbage has served as Chief Executive Officer and as a Director of TortoiseEcofin Acquisition Corp. III (“TRTL”) since February 2021 and as Chairman of the Board of Directors following the completion of its Initial Public Offering in July 2021. Mr. Cubbage was the Founder and served as the Chief Executive Officer and a member of the Board of Managers of Lightfoot Capital Partners GP LLC, the general partner of Lightfoot Capital Partners, LP, from its formation in 2006 through its wind-up in December 2019. He served as Chief Executive Officer, Director and Chairman of the Board of Arc Logistics GP LLC, the general partner of Arc Logistics Partners LP (NYSE: ARCX), from October 2013 to the date of its sale in December 2017. From 2007 to 2011, Mr. Cubbage also served on the board of managers of the general partner of International Resources Partners LP, a private partnership founded by Lightfoot Capital. Prior to founding Lightfoot Capital, Mr. Cubbage was a Senior Managing Director and Sector Head in the Investment Banking Division of Banc of America Securities, where he worked from 1998 to 2006. Before joining Banc of America Securities, Mr. Cubbage was a Vice President at Salomon Smith Barney in the Global Energy and Power Group where he worked from 1994 to 1998. Mr. Cubbage received an M.B.A. from the American Graduate School of International Management and a B.A. from Eastern Washington University. Richard Freeland. Mr. Freeland has served as a director of the Board since March 2023. Mr. Freeland served as President and Chief Operating Officer of Cummins Inc., (NYSE: CMI), a global manufacturer of engines, power systems, and related components, from July 2014 to October 2019, prior to which he served in various senior leadership positions, including Vice President of the Engine Business from 2010 to 2014, President of the Components Group from 2008 to 2010, and President of Worldwide Distribution Business from 2005 to 2008. Mr. Freeland serves on the board of directors of Valvoline Inc. (NYSE: VVV) and on the Purdue University, Krannert School of Management Advisory Council. Mr. Freeland holds a bachelor of science degree from Purdue University and a master of business administration degree from Indiana University. Mary Gustanski. Ms. Gustanski has served as a director of the Board since August 2021. Ms. Gustanski spent over 39 years in the automotive industry. She retired in 2019 as the Senior Vice President and Chief Technology Officer for Delphi Technologies, formerly Delphi Automotive. In this role, Ms. Gustanski was responsible for the company’s innovation and global technologies, including advanced propulsion systems for future vehicle electrification. Prior to this role, she served as Vice President, Engineering & Program Management for Delphi Automotive, which spun off its propulsion business to become Delphi Technologies in 2019. Ms. Gustanski also serves as a member of the Board of Directors for Amprius Technologies, Inc. since June 2023. Ms. Gustanski holds a bachelor’s degree in mechanical engineering and a master’s degree in manufacturing management from Kettering University. Thomas Healy. Mr. Healy has served as our Chief Executive Officer since October 2020 and prior to this, served as Chief Executive Officer of Hyliion Inc., (“Legacy Hyliion”) since January 26, 2016. While leading the Company, Mr. Healy has been awarded numerous awards and patents in the electrification space. Mr. Healy founded Legacy Hyliion while studying to obtain a Master’s in mechanical engineering and had previously founded multiple start-ups during his undergraduate studies. He took a leave of absence during his Master’s program in 2015 to pursue founding Legacy Hyliion. Mr. Healy holds a B.S. degree in Mechanical Engineering with a double-major in Engineering and Public Policy from Carnegie Mellon University. In 2023, Mr. Healy joined the Board of Trustees of Carnegie Mellon University.

  8. Directors

    Robert Knight, Jr. Mr. Knight has served as a director of the Board since October 2020. Mr. Knight served as Chief Financial Officer of Union Pacific Corporation (NYSE: UNP), a transportation company that primarily operates one of the largest railroads in North America, from 2004 until his retirement in 2019. Mr. Knight has served as a director of Schneider National, Inc. (NYSE: SNDR), a transportation and logistics company, since April 2020 and a member of Canadian National Railroad board including member of audit committee and compensation committee. Mr. Knight holds a bachelor’s degree in business administration from Kansas State University and an M.B.A. from Southern Illinois University. Melanie Trent. Ms. Trent has served as a director of the Board since March 2023. Ms. Trent served in various legal, administrative, and compliance roles for Rowan Companies plc (now part of Valaris plc), a global offshore contract drilling company, from 2005 to April 2017, including as Executive Vice President, General Counsel and Chief Administrative Officer from 2014 to April 2017, as Senior Vice President, Chief Administrative Officer and Company Secretary from 2011 to 2014, and as Vice President and Corporate Secretary from 2010 to 2011. Prior to joining Rowan, she served in various legal, administrative and investor relations roles for Reliant Energy Incorporated. Ms. Trent also serves as Lead Director of Diamondback Energy, Inc. (NASDAQ:FANG), an independent oil and natural gas company, since 2018, and as a director of Arcosa, Inc. (NSYE: ACA), a company focused on construction, energy and transportation products and services, since 2018. Ms. Trent previously served on the boards of Noble Corp (NYSE:NE) from February 2021 until its merger with Maersk Drilling in October 2022, and Frank’s International (from 2019 until its merger with Expro in October 2021. She also serves on the board of directors of several charities. Ms. Trent holds a bachelor's degree in Italian from Middlebury College and a juris doctor degree from Georgetown University Law Center.

  9. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION In March 2023, our Board approved the 2023 compensation program for our non-employee directors as follows: •an annual cash retainer equal to $75,000, paid in four equal quarterly installments; •additional cash compensation for the chair of the Board, in the amount of $50,000, the chair of the Audit Committee, in the amount of $25,000 and for all other committee chairs, in the amount of $15,000; and •an award of restricted stock units equal to $125,000, granted based on a share floor price of $5.00 per unit, which fully vest on the first anniversary of the grant date. The table below discloses non-employee director compensation for the fiscal year 2023.

  10. DIRECTOR COMPENSATION

    | | Fees Earned or Paid in Cash(1) | Stock Awards(2) | Total | | Rodger Boehm | $59,375 | $43,899 | $103,274 | | Andrew Card, Jr. | $75,000 | $57,500 | $132,500 | | Elaine Chao(3) | $18,750 | $57,500 | $76,250 | | Jeffrey Craig | $128,125 | $57,500 | $185,625 | | Vincent Cubbage | $90,000 | $57,500 | $147,500 | | Richard Freeland | $59,375 | $43,899 | $103,274 | | Mary Gustanski | $90,000 | $57,500 | $147,500 | | Howard Jenkins(3) | $18,750 | $57,500 | $76,250 | | Robert Knight, Jr. | $100,000 | $57,500 | $157,500 | | Stephen Pang | $75,000 | $57,500 | $132,500 | | Melanie Trent | $71,250 | $43,899 | $115,149 |

  11. DIRECTOR COMPENSATION

    ____________ (1) Amounts in this column represent the annual cash retainer earned in 2023 for service on the Board and additional fees for service as follows: Mr. Craig as chair of the Board, Mr. Knight as chair of the Audit Committee, Ms. Trent as chair of the Nominating and Corporate Governance Committee, Mr. Cubbage as chair of the Compensation Committee, and Ms. Gustanski as chair of the Technology Committee. Ms. Chao and Mr. Jenkins departed the Board effective March 17, 2023, and their annual cash retainer was adjusted accordingly. Mr. Boehm, Mr. Freeland, and Ms. Trent joined the Board effective March 17, 2023, and their annual cash retainer was adjusted accordingly. (2) Amounts in this column represent the grant date fair market value of RSUs granted during 2023, valued based on the closing price of our common shares on the date of grant of between $2.21 and $2.30. (3) Ms. Chao and Mr. Jenkins departed the Board effective March 17, 2023 and received accelerated vesting of 27,142 and 30,000 share awards, respectively, through that date. The director compensation program for our non-employee directors for 2024 is substantially consistent with the 2023 program. The Board reviews director compensation periodically to ensure that director compensation remains competitive such that we are able to recruit and retain qualified directors. See “Stock Ownership Guidelines” below for further detail on our director compensation stock ownership requirements.

  12. Compensation Overview

    | | WHAT WE DO | WHAT WE DON’T DO | | ✓ | Continually assess our compensation practices against the market, our competition, and alignment with stockholder interests.X | No hedging of our stock by employees, including executives or directors. | | ✓ | Maintain minimum stock ownership guidelines for executives and directors.X | No pledging of our stock by employees, including executives or directors. | | ✓ | Tie a substantial portion of our executive officers’ annual and long-term compensation to quantifiable measures of the Company’s performance.X | No excise tax gross-ups for severance benefits related to a change in control. | | ✓ | Require that performance-based compensation will not be earned unless at least a minimum threshold performance is achieved.X | No re-pricing or cash buyout of underwater stock options without stockholder approval. | | ✓ | Set maximum payout caps on our annual and long-term incentives.X | No excessive perquisites. | | ✓ | Pay for performance with 62% of our Chief Executive Officer’s target total pay opportunity being performance-based “at risk” compensation.X | No encouragement of excessive risk-taking through compensation programs. | | ✓ | Provide a minimum vesting period of at least one year for at least 95% of our equity awards.X | No supplemental executive retirement plans. | | ✓ | Limit perquisites and other benefits. | | | ✓ | Engage an independent consultant reporting directly to the Committee. | | | ✓ | Perform an annual compensation risk assessment. | | | ✓ | Maintain strict insider trading policies, incentive plan clawback policies, and black-out periods for executives and directors. | |

  13. Role of Compensation Consultants

    Role of Compensation Consultants The Compensation Committee has engaged Meridian Compensation Partners, LLC (“Meridian” or “Consultant”) as its independent compensation consultant since 2020. Meridian has advised the Committee on evolving best pay practices and pay ratio disclosure and provided competitive market data on executive officer compensation. As required under NYSE listing rules, the Compensation Committee annually reviews the independence of the Consultant as part of its standard governance practice, including but not limited to the factors set forth in Section 240.10C–1(b)(4)(i) through (vi) under the Securities Exchange Act. The Compensation Committee has determined that the Consultant is independent and that its work does not raise any conflict of interest.

  14. Use of Peer Group Data

    Use of Peer Group Data As part of its engagement, Meridian benchmarked the target compensation levels of our NEOs to assess the competitiveness of our executive compensation programs in the markets in which we compete for talent, focusing in particular on base salaries, target annual incentive opportunities and long-term incentive opportunities. For 2023, Meridian compared our programs in these areas to a custom peer group comprised of 14 publicly-traded companies. These peer companies were in line with Hyliion’s February 2023 size, related industry and growth stage and were used in determining 2023 compensation. The peer group below was reviewed and approved by the Compensation Committee for use in benchmarking officer compensation for reference in determining target compensation amounts for 2023. The Committee considered compensation data from the proxy statements and other compensation disclosures of these companies when setting 2023 NEO compensation. Specifically, the Compensation Committee considered this peer group data when establishing overall compensation packages for our NEOs and each element of compensation within those packages for 2023 and, as part of our process, evaluated target total cash compensation for each NEO (base salary and target payments under our target annual incentive plan) and target total direct compensation for each NEO (base salary and target payments under our target annual incentive plan and long-term incentive plans). The Committee aims to set overall executive compensation, as well as each element of executive compensation, for each NEO at levels competitive with the peer group taking into consideration tenure, experience, performance, responsibilities, and expected contributions of each NEO.

  15. Use of Peer Group Data

    | American Axle & Manufacturing, Inc. | Ideanomics, Inc. | Plug Power Inc. | | Blue Bird Corporation | Lightning eMotors | Quantumscape Corporation | | Beam Global | Lordstown Motors Corporation | The Shyft Group, Inc. | | FuelCell Energy, Inc. | Miller Industries, Inc. | Soliton, Inc. | | Gentherm Incorporated | Microvast Holdings | Stonebridge, Inc. | | Holley Inc. | Motorcar Parts of America, Inc. | Twin Disc, Inc. | | Hyzon Motors Inc. | Nikola Corporation | XL Fleet Corp. |

  16. Use of Peer Group Data

    To better align with Hyliion’s size, the Compensation Committee approved the following changes to the peer group in 2023, which was applied to market benchmarking analyses used as reference for establishing 2024 officer target compensation amounts. Specifically, Gentherm Incorporated, Blue Bird Corporation, The Shyft Group, Inc. and Miller Industries, Inc. were removed. In their place, Stem, Inc., The Lion Electric Company, Ouster, Inc. and Solid Power, Inc. were added to the peer group. Compensation data from this updated peer group was considered in determining the overall NEO compensation for 2024, as further described in “Executive Compensation Review for 2024” below.

  17. Compensation Mix and Target Compensation Structure

    Compensation Mix and Target Compensation Structure The Compensation Committee believes that executive compensation should include a competitive combination of base salary, annual incentive compensation and long-term incentive compensation that emphasizes performance and balances shorter-term results with execution of longer-term financial and strategic initiatives. The chart below illustrates the annual pay mix for our NEOs for 2023, including RSU grants and PRSUs that were eligible to vest in 2023 in connection with the PRSU award granted in 2021.

  18. Compensation Mix and Target Compensation Structure

    | NAME | BASE SALARY | TARGET ANNUAL CASH INCENTIVE | VALUE OF RSU GRANT(1) | VALUE OF PRSU AWARDS THAT COULD HAVE BEEN EARNED IN 2023(2) | | Thomas Healy | $650,000 | $650,000 | $— | $877,500 | | Jon Panzer | $450,000 | $337,500 | $330,000 | $117,000 | | Dennis Gallagher(3) | $515,000 | $386,250 | $385,000 | $146,250 |

  19. Compensation Mix and Target Compensation Structure

    ____________ (1) Value is based on the fair value of one share of Hyliion Common Stock ($2.75) on the date of grant (February 28, 2023). (2) Value is based on share price of $2.34 at December 31, 2022 and represents the value of the portion of the PRSU award allocated to each NEO for the one-year performance period ended December 31, 2023 (Mr. Healy, 375,000; Mr. Panzer 50,000; and Mr. Gallagher, 62,500). (3) Mr. Gallagher’s base salary was increased to $515,000 effective March 5, 2023. Base Salary Base salary is the fixed compensation element we provide to our executives based on their qualifications, experience, and regular contribution to the business. Our goal is to ensure that business decisions are in the hands of executives with proven track records, and our ability to efficiently recruit, retain and motivate such talented people depends in part on competitive base salaries. Adjustments to base salary each year are dependent upon many factors, including an executive’s tenure, internal equity across the executive team based on individual roles and contributions, market data, the Company’s prior year performance, and general affordability based on business results. Base salary is generally subject to annual review, unless circumstances dictate otherwise, and base salary adjustments are effective following the Compensation Committee’s decision. The Compensation Committee began its assessment of 2023 NEO base salaries with an analysis of base salary relative to the base salaries paid to executives in similar positions at the companies in the peer group discussed above and aimed to set NEO base salaries at comparable levels while considering tenure and experience of each NEO. The Compensation Committee concluded that 2023 base salaries for our NEOs are generally reflective of the competitive market environment resulting in no base salary increases from 2022 to 2023 for Messrs. Healy and Panzer and a $15,000 base salary increase for Mr. Gallagher effective March 5, 2023. Annual Incentives For 2023, the Compensation Committee approved annual incentives based on the achievement of specific operational goals for the Company and individual performance objectives for each NEO. Seventy-five percent (75%) of the annual incentive plan for 2023 was based on company operational metrics: Hypertruck ERX shipments, OEM long term agreements, reduction in Hypertruck ERX vehicle cost, reduction in Hypertruck ERX vehicle weight and certain metrics selected representing the importance of culture and safety to the Company. The Compensation Committee chose these performance metrics as key value-creating milestones and believes that they correctly focused the executive team on the operational and product development targets that aligned with our Company strategy prior to the discontinuation of the powertrain business. The remaining twenty-five percent (25%) of the annual incentive plan was based on individual performance, determined by the Compensation Committee following its review of each executive’s performance. Achievement of performance goals between threshold and target could generate a payout between 50% of target to 100% of target for each metric. If performance achievement for a given metric was below the threshold goal, no payout would be earned for that metric. Company Performance Metrics and Achievement Based on the strategic shift to focus on the development and commercialization of the KARNO generator technology and the discontinuation of the powertrain business as well as the Company performance achievement results below, the Compensation Committee and the Board concluded that no payouts for NEOs in 2023 were warranted in connection with the Company performance metrics:

  20. Compensation Mix and Target Compensation Structure

    | METRIC AND WEIGHTING | THRESHOLD | TARGET | ACHIEVED | % PAYOUT | | Hypertruck ERX Shipments (45%) | 15 | ≥30 | 0 | 0% | | OEM Long Term Agreement (20%) | N/A | Signed | No | 0% | | Reduce ERX Vehicle Cost (15%) | 5% | 10% | No | 0% | | Reduce ERX Vehicle Weight (10%) | 450 lbs | 650 lbs | Yes | 0% | | Culture and Safety Scorecard (10%) | Board Discretion | Board Discretion | N/A | 0% | | Total | | | | 0% |

  21. Compensation Mix and Target Compensation Structure

    | NAME | INDIVIDUAL GOALS AND ACHIEVEMENTS | TOTAL ANNUAL CASH INCENTIVE PAYOUT | | Thomas Healy | Implemented Company feedback program; established strategic partnerships; executed on industry positioning and outreach; cascaded Company vision throughout the organization; led a strategic evaluation of the powertrain business, including a possible sale of powertrain assets, and oversaw the transition of the company’s focus to the KARNO generator product; and led commercial efforts to secure initial KARNO generator deployment customers | $— |

  22. Compensation Mix and Target Compensation Structure

    Long-Term Incentives In 2020, the Company adopted the Hyliion 2020 Equity Incentive Plan (the “2020 Plan”). The 2020 Plan is an omnibus plan that provides for the grant of incentive stock options within the meaning of Section 422 of the Code, nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance awards and other forms of awards to eligible employees, directors and consultants, including employees and consultants of our affiliates. The 2020 Plan is intended to compensate our executives for their long-term contributions to Company performance, based upon metrics that closely align with long-term stockholder value. Generally, our NEO’s (other than Mr. Healy) receive annual grants of time-based restricted stock units (“RSUs”) and are eligible to vest annually in the previously-earned portion of long-term performance-based restricted stock units (“PRSUs”) granted in 2021. To date, Mr. Healy has only participated in the long-term performance-based restricted stock units. The Committee believes this design balances retention with the objective of incentivizing the attainment of financial and operational goals and aligning the interests of our NEOs with the interests of our stockholders. During 2023, our NEOs received the following RSU grants and were eligible to vest in the following PRSUs in connection with the PRSU award granted in 2021:

  23. Compensation Mix and Target Compensation Structure

    | NAME | RSU AWARDS GRANTED | PORTION OF 2021 PRSUs(1) | | Thomas Healy | — | 135,000 | | Jon Panzer | 120,000 | 3,953 | | Dennis Gallagher | 140,000 | 18,595 |

  24. Compensation Mix and Target Compensation Structure

    ____________ (1) Share totals are comprised of 1/4 of awards at 40% performance achievement for grants made in 2021 and 1/3 of awards at 78% performance achievement for grants made in 2022. Additional information regarding the equity awards provided to our NEOs during 2023 is set forth under the caption “Outstanding Equity Awards at the End of Fiscal Year 2023.” Performance Equity In 2021, the Company’s CEO and other executive officers were granted PRSUs which, in the aggregate, would cover a period beginning on January 1, 2021 and ending December 31, 2024 (the “2021-2024 PRSUs”). The PRSU could be earned in four equal installments, with each installment covering a one-year performance period starting January 1 and ending December 31 for each of 2021 through 2024 (each annual portion of the 2021-2024 PRSU award, a “tranche”). Because the Company has operated, and continues to operate, in a growth and start-up stage of its life cycle and is working to commercialize its products, the Compensation Committee considered that it would be challenging to set rigorous and retentive performance goals for each tranche at the time all of the PRSUs were granted, and further considered that rigidly setting performance goals at the beginning of the period would limit the Compensation Committee’s ability to respond with agility to its compensatory objectives for the executive officers. Accordingly, in establishing the 2021-2024 PRSUs, the Compensation Committee determined that it would establish performance goals for each tranche at the beginning of that tranche’s performance period (e.g., set performance goals for the 2021 tranche at the beginning of 2021). On the date that the Compensation Committee determines that the performance goals for a year’s tranche have been achieved (if they have been achieved at all), a pro-rata portion of that years tranche (prorated based on the number of unvested tranches for the 2021-2024 PRSUs remaining at the beginning of that tranche’s performance period) vests, and annually thereafter the tranche continues to vest in pro-rata installments until the award is fully delivered. For example, one-quarter of the 2021 tranche would vest on the date the Compensation Committee determined the 2021 tranche had been earned and one-quarter of the 2021 tranche would vest each year thereafter until the award is fully delivered following completion of the 2024 one-year performance period. In connection with his hire in 2022, Mr. Panzer received PRSUs structured similarly to the 2021-2024 PRSUs, but covering a three-year period beginning January 1, 2022 and ending December 31, 2024. For the 2023 tranche, the metrics for the 2021-2024 PRSUs (and Mr. Panzer’s three-year PRSU award) were as follows: KARNO truck demonstration events, confirmed truck orders for 2024, development of a new powertrain platform and working capital improvements for the ERX powertrain business. The performance goals for each of these metrics for the 2023 tranche are set forth below:

  25. Compensation Mix and Target Compensation Structure

    | METRIC AND WEIGHTING | THRESHOLD | TARGET | ACHIEVED | % PAYOUT | | Hypertruck KARNO Demos (30%) | 3 | 5 | 0% | 0% | | Confirmed Truck Orders (35%) | 150 | 300 | 0 | 0% | | Development of New Powertrain Platform (20%) | N/A | Complete | Yes | 0% | | ERX Working Capital Improvements (15%) | 3.5 Turns | 5.0 Turns | N/A | 0% | | Total | | | | 0% |

  26. Compensation Mix and Target Compensation Structure

    Achievement of performance goals between threshold and target could generate a payout between 50% of target to 100% of target for each metric. If performance achievement for a given metric was below the threshold goal, no payout would be earned for that metric. Based on the strategic shift to focus on the development and commercialization of the KARNO generator technology and the discontinuation of the powertrain business as well as individual performance achievement results below, the Compensation Committee and the Board determined that no payouts were warranted on the 2023 tranche for the 2021-2024 PRSUs or Mr. Panzer’s PRSUs. Time-Based Equity The Compensation Committee grants time-based equity to the executive officers (other than Mr. Healy, who already holds a substantial portion of Hyliion’s outstanding equity and as founder is a significant stockholder of the Company) to: •further align the interests of the executive officers with those of the Company’s stockholders by linking a component of compensation directly to Hyliion’s stock price; •ensure that the executive officers establish and maintain robust share ownership positions; and •establish a strong incentive for the executive officers to remain with the Company over the long term. Time-based equity is granted in the form of RSUs, which provide the right to receive shares of Hyliion common stock upon vesting, and generally only vest if the executive remains employed with Hyliion through each applicable vesting date. One third of the RSUs vest after one year and the remaining RSUs vest quarterly thereafter over the following two years.

  27. Executive Compensation Review for 2024

    Executive Compensation Review for 2024 The Compensation Committee determined that 2024 base salary for our NEOs will remain unchanged from 2023. The 2024 annual cash incentive metrics are aligned with key metrics supporting Hyliion’s strategic shift towards KARNO for 2024 including: meeting thresholds for KARNO generator deliveries and KARNO generator order backlog for 2025 and satisfaction of a scorecard representing the importance of culture and safety to the Company. In considering the Company’s significant strategic shift at the end of 2023 and the beginning of 2024, the Compensation Committee determined that the structure of the 2021-2024 PRSUs (and Mr. Panzer’s PRSUs) no longer met the incentive and retentive goals of the Committee given the difficulty in establishing financial metrics or operational milestones at this early stage of KARNO commercialization. Therefore, with the consent of each of the PRSU holders, the Compensation Committee and the Board elected to cancel and make no payments of the 2024 tranche of the 2021-2024 PRSUs. Thereafter, the Compensation Committee approved a new three-year PRSU award to each of the executive officers (the “2024-2026 PRSUs”). The PRSUs can be earned over a three-year period, based on targeted increases in stock price during the period; however, even if some of the stock price targets are achieved, no amount of the 2024-2026 PRSUs will vest until the value of the Company (as measured by market capitalization) exceeds the value of the Company’s holdings of cash and short-term instruments. Stock Ownership Guidelines Stock ownership guidelines help foster a focus on long-term growth. Our Board believes that our executives and non-employee Directors should maintain a meaningful equity interest in Hyliion and has therefore adopted stock ownership guidelines. As indicated below, each executive team member and non-employee Director is required within five (5) years following the date of hire (for an executive) or first election or appointment (for a director), to own Hyliion shares having an aggregate value equal to at least:

  28. Executive Compensation Review for 2024

    For purposes of determining ownership levels, the following forms of equity interests in the Company are included: •Shares purchased by the individual on the open market. •Shares owned directly by the individual or his or her immediate family members residing in the same household. •Shares held in trust for the benefit of the individual or his or her immediate family members residing in the same household. •Shares owned through savings plans, such as the Company’s 401(k) plan or acquired through a Company Sponsored employee stock purchase plan. •Shares underlying unvested time-based restricted stock and restricted stock units held by the individual. •Shares underlying vested in-the-money stock options held by the individual in an amount equal to the number of shares issuable upon an exercise of such stock options. As of the date of this proxy statement, Messrs. Healy, Craig, Cubbage and Knight meet the requirements under the stock ownership guidelines. All other NEOs and non-employee directors are currently on track to meet the requirements under the stock ownership guidelines within the time permitted. Clawback Policy The Company maintains a culture that emphasizes integrity and accountability and that reinforces the Company’s pay for performance compensation philosophy. In 2023, the Board adopted the Clawback Policy designed to comply with Section 10D of the Securities Exchange Act, Exchange Act Rule 10D-1 and NYSE Listed Company Manual Section 303A.14. The Clawback Policy provides for the possibility of recoupment of certain executive incentive compensation in the event of an accounting restatement resulting from material noncompliance with financial reporting requirements under the federal securities laws, including any required accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period. In the event the Company is required to prepare an accounting restatement of its financial statements due to the Company’s material noncompliance with any financial reporting requirement under the securities laws, the Board may require recoupment of any excess incentive compensation received by any current or former executive officers including the NEOs (“Covered Executives”) during the three completed fiscal years immediately preceding the date on which the Company is required to prepare an accounting restatement. Recoupment may be in the form of: reimbursement of cash incentive compensation previously paid, recovery of any gain realized on the vesting, exercise, settlement, sale, transfer, or other disposition of any equity awards, offsetting of the recouped amount from any compensation otherwise owed by the Company to the Covered Executive, cancellation of outstanding vested or unvested equity awards, and/or any remedial and recovery action permitted by law, as determined by the Board. The amount to be recovered will be the excess of the incentive compensation paid to the Covered Executive based on the erroneous data over the incentive compensation that would have been paid to the Covered Executive had it been based on the restated results, computed without regard to taxes paid. The Board also adopted Supplemental Clawback Policy, intended to provide for compensation recovery beyond the requirements of the Clawback Policy. The Supplemental Clawback Policy applies to certain executives and employees of the Company who are not already Covered Persons under the Clawback Policy (“Executive Officers”). Under the Supplemental Clawback Policy, in addition to the events of recoupment described in the Clawback Policy, if a Covered Individual (as defined in the Supplemental Policy) or an Executive Officer engages in an act of fraud or material misrepresentation which is directed at or has a direct or indirect impact on the Company, regardless of whether such act results in an accounting restatement, the Board may require reimbursement for or forfeiture of any incentive compensation, including any time-based cash or equity awards or rights, received by such Covered Individual or Executive Officer after having been deemed subject to this Policy by the Board.

  29. Summary Compensation Table (“SCT”)

    Summary Compensation Table (“SCT”) The following table sets forth all of the compensation awarded to, earned by or paid to our named executive officers during the years ended December 31, 2023 and 2022.

  30. Summary Compensation Table (“SCT”)

    | Name and Principal Position | Year | Salary(1) | | Bonus(2) | | Stock Awards(3) | | Option Awards | | Non-Equity Incentive Plan Compensation(4) | | Nonqualified Deferred Compensation Earnings | All Other Compensation(5) | | Total | | | Thomas Healy | 2023 | | 650,000 | | — | | 1,061,250 | | — | | — | $— | | — | | 1,711,250 | | Chief Executive Officer | 2022 | | 650,000 | | — | | 1,620,000 | | — | | 540,310 | $— | | — | | 2,810,310 | | Jon Panzer | 2023 | | 450,000 | | — | | 471,500 | | — | | — | $— | | — | | 921,500 | | Chief Financial Officer | 2022 | | 129,808 | | 350,000 | | 296,005 | | — | | 85,320 | $— | | — | | 861,133 | | Dennis Gallagher | 2023 | | 512,115 | | — | | 561,875 | | — | | — | $— | | — | | 1,073,990 | | Chief Operating Officer | 2022 | | 500,000 | | — | | 970,000 | | — | | 311,720 | $— | | — | | 1,781,720 |

  31. Summary Compensation Table (“SCT”)

    ____________ (1) Mr. Gallagher's salary in 2023 reflects a merit increase to $515,000, effective March 5, 2023. Mr. Panzer’s salary in 2022 reflects the compensation he received beginning on September 12, 2022, the date on which he joined the Company. (2) For Mr. Panzer, the amount for 2022 represents a sign-on bonus paid as an inducement to join the Company. Mr. Panzer’s sign-on bonus was subject to repayment in the event that Mr. Panzer’s employment was terminated for cause (as defined in his employment agreement) or if he chose to leave the employment of the Company within one year of the date of hire. (3) The amounts in these columns represent the aggregate grant date fair value of RSU awards and the portion of the PRSU awards allocated for the indicated year performance period for each applicable named executive officer, computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718. Pursuant to SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. The grant date fair values for the PRSUs and RSUs do not necessarily correspond to the actual value that will be realized by the named executive officers. Portions of the PRSU awards granted in 2023 for Messrs. Healy, Panzer and Gallagher vest over two years from the date of grant and portions of the PRSU awards granted in 2022 for Messrs. Healy, Panzer and Gallagher vest over three years from the date of grant. Except for a special sign-on award of 60,000 shares to Mr. Panzer in 2022, which fully vested on the first anniversary of the grant, one-third of the RSU awards vest on the first anniversary of the date of grant, and the remaining two-thirds vest quarterly over two years thereafter. The grant date fair value of the PRSUs and RSUs in 2023 was calculated using the closing stock price on the date of grant ($2.75 or $2.83 in February 2023). The grant date fair value of the PRSUs and RSUs in 2022 was calculated using the closing stock price on the date of grant ($4.32 in February 2022, for Messrs. Healy and Gallagher, and $2.65 in November 2022 for Mr. Panzer). The grant date fair value of the PRSU awards assumes (a) that target performance is achieved for the performance periods ended December 31, 2023 and 2022 (as applicable) and (b) 100% vesting of the portion of the PRSU award allocated for the performance periods ended December 31, 2023 and 2022 (as applicable). (4) This column reflects amounts earned under our Annual Incentive Plan for 2022, but that were not actually paid out until March 2023. (5) For 2022, amounts for Mr. Panzer did not reach $10,000 and therefore were not included.

  32. Outstanding Equity Awards at 2023 Fiscal Year-End

    Outstanding Equity Awards at 2023 Fiscal Year-End The following table presents information regarding outstanding equity awards held by our named executive officers as of December 31, 2023.

  33. Outstanding Equity Awards at 2023 Fiscal Year-End

    | | Option Awards | | | | Stock Awards | | | | | | | Name | 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 (#)(3) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(4) | | | Thomas Healy | — | — | $— | — | — | | — | 1,020,000 | | 305,138 | | Jon Panzer | — | — | $— | — | — | | — | 107,906 | | 40,685 | | | — | — | $— | — | 144,330 | | 117,441 | — | | — | | Dennis Gallagher(5) | — | — | $— | — | — | | — | 162,191 | | 50,856 | | | — | — | $— | — | 225,127 | | 183,186 | — | | — |

  34. Outstanding Equity Awards at 2023 Fiscal Year-End

    ____________ (1) This column reflects unvested RSUs granted to the named executive officers as of December 31, 2023 which vest as follows: (a) For Mr. Panzer, 28% in November 2023, with the remainder in equal amounts quarterly thereafter through February 2026; (b) For Mr. Gallagher, 21% in February 2023, with the remainder in equal amounts quarterly thereafter through February 2026. (2) The market value was calculated using the closing price of our common shares of $0.81 as of December 31, 2023. (3) This column reflects total PRSU awards remaining, portions of which vest over two, three or four one-year performance periods (in each case ending in 2025) based upon the achievement of certain performance-based metrics, which are determined prior to each one-year performance period. (4) The market value was calculated using the closing price of our common shares of $0.81 as of December 31, 2023 and represents the market value of the portion of the PRSU award allocated to each NEO for the one-year performance period ended December 31, 2023 (Mr. Healy, 375,000; Mr. Panzer 50,000; and Mr. Gallagher, 62,500). (5) Mr. Gallagher departed the Company effective February 29, 2024 and received accelerated vesting of 185,898 shares as of that date.

  35. Pay-Versus-Performance

    | Year | SCT Total Compensation for PEO ($) | Compensation Actually Paid to PEO ($)(1) | Average SCT Total Compensation for Non-PEO NEOs ($)(2) | Average Compensation Actually Paid to Non-PEO NEOs ($)(1)(2) | Value of Initial Fixed $100 Investment based on Total Shareholder Return (Company) ($) | Net Income ($ in thousands) | | 2023 | $1,711,250 | $(1,747,825) | $997,745 | $162,946 | $4.94 | $(123,510) | | 2022 | $2,810,310 | $1,247,460 | $1,368,866 | $950,287 | $23.42 | $(153,357) | | 2021 | $5,254,750 | $601,000 | $1,346,717 | $297,061 | $62.06 | $(96,048) |