DEF 14A of OneWater Marine Inc.
Filed Jan 12, 2024 · FY20230001772921-24-000007
PROPOSAL NO. 1 - ELECTION OF DIRECTORS
PROPOSAL NO. 1 - ELECTION OF DIRECTORS The Board is currently made up of nine members: Anthony Aisquith, Carmen R. Bauza, Christopher W. Bodine, Bari A. Harlam, Jeffrey B. Lamkin, J. Steven Roy, John F. Schraudenbach, P. Austin Singleton and John G. Troiano. As described below, the Board has nominated Anthony Aisquith, Carmen R. Bauza, Christopher W. Bodine, Bari A. Harlam, Jeffrey B. Lamkin, J. Steven Roy, John F. Schraudenbach, P. Austin Singleton and John G. Troiano for election at the Annual Meeting and each has indicated their willingness to serve if elected. You may not vote by proxy or in person for a greater number of persons than the nine director nominees.
Executive Summary
| What We Do | | What We Don’t Do | | | ✔ | We align our executive pay with long-term Company performance | ✘ | We do not automatically increase salaries each year or make lock-step changes in compensation based on peer group compensation levels or metrics | | ✔ | We align our executives’ interests with those of our stockholders by emphasizing long-term and pay-for-performance incentives | ✘ | We do not provide excise tax gross-ups | | ✔ | We have a one-year minimum vesting requirement under all equity awards, subject to limited exceptions | ✘ | We prohibit executive officers and directors from hedging or transacting in derivative securities of the Company or pledging our Class A common stock as collateral for a loan, subject to certain exceptions outlined in our Insider Trading Policy | | ✔ | We engage an independent consultant to advise on executive compensation matters | ✘ | We do not have supplemental retirement benefit arrangements with our executives | | ✔ | We review the independence of the independent compensation consultant annually | ✘ | We do not provide excessive perquisites | | ✔ | We enforce meaningful stock ownership guidelines for our non-employee directors | ✘ | We do not allow for single trigger vesting of equity awards in connection with a change in control |
Process for Determining Compensation
Process for Determining Compensation Role of the Compensation Committee. The compensation committee oversees our executive compensation and employee benefit programs, and reviews and approves all compensation decisions relating to our Named Executive Officers. The compensation committee also prepares and approves this report for inclusion in this proxy statement and has reviewed and discussed this CD&A with management. The compensation committee (i) reviews and approves, or recommends that our Board approve, the compensation and the terms of our compensatory arrangements with our Named Executive Officers, (ii) reviews and recommends to our Board the compensation of our non-employee directors, (iii) administers our incentive compensation and benefit plans, (iv) selects and retains independent compensation consultants, (v) determines and certifies the achievement of corporate performance measures for performance based compensation and (vi) assesses whether any of our compensation policies and programs have the potential to encourage excessive risk-taking. The compensation committee may delegate to its chairman, any of its members, or any subcommittee it may form, the responsibility and authority for any particular matter as it deems appropriate under the circumstances. The compensation committee may also delegate approval of award grants and other responsibilities regarding the administration of compensatory programs to a subcommittee consisting solely of members of the compensation committee or to members of the Board who are “non-employee directors” for purposes of Rule 16b-3 of the Exchange Act. Role of Independent Compensation Consultant. During fiscal year 2023, the compensation committee continued to engage Aon as its independent compensation consultant to assist with its responsibilities related to our Named Executive Officer and director compensation programs. A representative of Aon attends compensation committee meetings, as requested by the compensation committee and periodically communicates with the chair of the compensation committee outside of meetings. Aon provides no services to management or the compensation committee that are unrelated to the duties and responsibilities of the compensation committee. The compensation committee ultimately makes all decisions regarding the compensation of our Named Executive Officers and directors, considering the recommendations and advice of Aon. Aon reports directly to the compensation committee, and all work conducted by Aon for us is on behalf of the compensation committee. Role of Chief Executive Officer and Senior Management. Our Chief Executive Officer regularly interacts with the compensation committee and its chair to suggest and discuss the structure of our executive compensation programs. Our Chief Executive Officer makes recommendations to the compensation committee for the annual cash and equity incentive awards for our Named Executive Officers and other personnel (other than himself). Use of Market Data and Peer Group Analysis. From time to time, Aon provides the compensation committee with market and peer group data for comparison purposes, such as to compare equity and pay mix practices. Aon does not provide, and the compensation committee does not utilize, regular compensation benchmarks in its compensation determinations. The companies included in the peer group used for these limited purposes in 2023 included: America’s Car-Mart, Inc., Asbury Automotive Group, Inc., Big 5 Sporting Goods Corporation, Callaway Golf Company, Camping World Holdings, Inc., Clarus Corporation, Johnson Outdoors Inc., Lazydays Holdings, Inc., Malibu Boats, Inc., MasterCraft Boats Holdings, Inc., Sleep Number Corporation, Sportsman’s Warehouse Holdings, Inc., Winnebago Industries, Inc., and YETI Holdings, Inc.
Risk Assessment of Compensation Plans
Risk Assessment of Compensation Plans We believe that our compensation program does not encourage excessive or unnecessary risk-taking. This is primarily due to the fact that our compensation programs are designed to encourage our Named Executive Officers and other employees to focus on both short-term and long-term strategic goals, thereby creating an ownership culture and helping to align the interests of our employees and our stockholders. Accordingly, our compensation program is balanced between short-term and long-term incentive compensation. Short-term incentive compensation is paid annually in cash, and is dependent on satisfying quantitative factors established by the compensation committee at the beginning of the fiscal year. 60% of the total long-term equity-based incentive compensation awarded to our Named Executive Officers has been granted in the form of long-term equity-based awards in the form of Performance Stock Units ("PSUs") that become contingently earned based on achievement of quantitative performance metrics set by the compensation committee, and, once contingently earned, are converted into Restricted Stock Units ("RSUs") that vest ratably thereafter over a three-year period. The remaining 40% of the total long-term equity-based incentive compensation awarded to our Named Executive Officers has been granted in the form of long-term equity-based awards in the form of RSUs that vest ratably over a three-year period. The combination of over 70% - 76% of total annual compensation is based on Company performance, and more than half of total annual incentive compensation is in the form of long-term equity-based compensation, which creates substantial disincentives to any short-term risk-taking by our Named Executive Officers. Overall, we believe that the balance within our compensation program results in an appropriate compensation structure for the Company, and that the program does not pose risks that could have a material adverse effect on our business or financial performance.
2023 Compensation Decisions
2023 Compensation Decisions Base Salaries. Base salaries serve to provide fixed cash compensation to our Named Executive Officers for performing their ongoing responsibilities. Initial base salaries for each of our Named Executive Officers were as set forth in each of their Employment Agreements. The compensation committee reviewed our Named Executive Officers’ base salaries based on the considerations outlined in this CD&A and input from Aon. The compensation committee also reviewed the Named Executive Officers’ individual performance, the integration of previously completed acquisitions, the financial growth and performance of the Company and how the Company’s performance compared to our peer group. Based on this review, the compensation committee determined that it would not increase our Chief Executive Officer and Chief Operating Officer’s base salaries in 2023. The base salary for our Chief Financial Officer was increased by 12% for 2023, as shown in the table below, based on the results of our peer group study with Aon.
2023 Compensation Decisions
Annual Cash Incentive Awards. In early 2021, the compensation committee approved a framework for year-end incentive compensation pursuant to which a percentage of each Named Executive Officer’s target bonus may become earned in an amount ranging from 0% to 200% of target. The compensation committee reviewed our Named Executive Officers’ target annual bonuses based on the considerations outlined in this CD&A and input from Aon. Based on this review, the compensation committee determined that it would not increase our Chief Executive Officer and Chief Operating Officer’s target annual bonuses in 2023 but did increase the target annual bonus of the Chief Financial Officer by 40%, as shown in the table below, based on the results of our peer group study with Aon.
2023 Compensation Decisions
The amount of the target annual bonus that becomes earned is based on the achievement of two quantitative performance criteria. The first criterion measures the Company’s achievement of growth in its Adjusted EBITDA. The second criterion measures the Company’s maintenance of levels of aged inventory. During 2023, the compensation committee adjusted the split between the Adjusted EBITDA and aged inventory criterion to each be weighted 50% in the calculation of the target annual bonus (instead of 80% and 20%, respectively, as utilized in fiscal year 2022) for fiscal year 2023. The decision was made to better align the compensation of our Named Executive Officers with the strategic goals of the Company given the heightened concern in the industry regarding inventory over-supply following the Covid-19 pandemic. Adequately managing inventory, including maintaining both a healthy level of total inventory as well as the appropriate model year mixes, is a key driver of financial performance for both fiscal year 2023 and beyond as we work to balance meeting customer demand while also managing expenses and cash flows through interest payments and curtailments. In the fourth quarter of 2023, the compensation committee reviewed the performance of the Company against these criteria. As shown in the table below, the compensation committee certified the achievement of the performance metrics measured by our inventory position in 2023 which resulted in achieving the maximum result (200%) for such criteria based on our fiscal year 2023 financial results. Alternatively, due to the decline in profitability of the Company during 2023, the Adjusted EBITDA performance criteria was below the minimum threshold and the compensation committee certified that no payout was eligible for that criteria. Combining the results from the two performance criteria resulted in a total weighting factor of 100%. For each metric reflected in the table below, if less than 80% of the target is achieved, no weighted value would result for that metric, and if more than 120% of the target is achieved, the maximum weighted value for that metric would result.
2023 Compensation Decisions
| Metric | Weighting | 2023 Metric Target | Achievement of Metric for Threshold Weighting (50% payout); | Achievement of Metric for Target Weighing (100% payout); | Achievement of Metric for Maximum Weighing (200% payout); | Actual 2023 Achievement | Payout Earned | | Adjusted EBITDA | 50% | $215,000,000 | 80% | 100% | 120% | Less than $172,000,000 | 0% | | Aged Inventory | 50% | Less than 15.0% | 80% | 100% | 120% | Less than 9% | 200% | | | | | | | | Total Weighted Value | 100% |
2023 Compensation Decisions
This weighted value was then applied to the target bonus amount of each Named Executive Officer resulting in a cash incentive award equal to 100% of the total target bonus amount for each Named Executive Officer. The target bonus amount was approximately 103% of base salary for each of Messrs. Singleton and Aisquith and approximately 74% of base salary for Mr. Ezzell, as shown in the table below:
2023 Compensation Decisions
| Named Executive Officer | Opportunity | | | | | Actual | | | | | | 2023 Base Salary | | 2023 Target Bonus | | Target Bonus as a % of Base Salary | 2023 Bonus | | 2023 Bonus as a % of Target | 2023 Bonus as a % of Base Salary | | P. Austin Singleton (CEO) | | 725,000 | | 750,000 | 103% | | 750,000 | 100% | 103% | | Anthony Aisquith (COO) | | 725,000 | | 750,000 | 103% | | 750,000 | 100% | 103% | | Jack Ezzell (CFO) | | 475,000 | | 350,000 | 74% | | 350,000 | 100% | 74% |
2023 Compensation Decisions
The compensation committee has approved the payment of each annual cash incentive award for fiscal year 2023. Annual Long-Term Incentive Awards. We have historically made annual grants of RSU awards subject to time-based vesting and PSU awards subject to performance-based vesting, pursuant to our Incentive Plan. The total aggregate value of the annual RSU and PSU awards is expressed as a dollar amount and is determined annually by the compensation committee, in consideration of the factors described in this CD&A and with advice from Aon. For the 2023 fiscal year, the target aggregate value of the equity awards were set at $1,500,000, $1,500,000 and $750,000 for Mr. Singleton, Mr. Aisquith and Mr. Ezzell, respectively, and the compensation committee determined to grant 60% of the total value of the annual equity awards in the form of PSUs, and 40% of the total value of the annual equity awards in the form of RSUs. The number of RSUs and PSUs granted to our Named Executive Officers was determined using $30.11, the closing price of the Company’s common stock on the last trading day immediately preceding October 1, 2022 (the first day of the 2023 fiscal year). The aggregate target value of the RSUs and target PSUs granted to each Named Executive Officer during fiscal year 2023 as it relates to each Named Executive Officers' annual base salary is shown in the table below.
2023 Compensation Decisions
| Named Executive Officer | 2023 Total Equity Award Target Value | | 2023 Base Salary | | 2023 Target Equity Awards as a % of Base Salary | | P. Austin Singleton (CEO) | | 1,500,000 | | 725,000 | 207% | | Anthony Aisquith (COO) | | 1,500,000 | | 725,000 | 207% | | Jack Ezzell (CFO) | | 750,000 | | 475,000 | 158% |
2023 Compensation Decisions
Each RSU and PSU represents the right to receive a share of Class A common stock after the vesting of the respective award. The RSUs granted during fiscal year 2023 vest in equal installments on the first three anniversaries of October 1, 2022. The number of PSUs granted to the Named Executive Officers reflects a target number of PSUs. The PSUs may become contingently earned with respect to a number of PSUs ranging from 0% to 200% of the target PSUs. The number of PSUs that become contingently earned is determined based on the achievement of Adjusted EBITDA and aged inventory performance metrics similar to the performance metrics described above with respect to the Annual Cash Incentive Awards during a one-year performance period beginning on the first day of the fiscal year in which the PSUs were granted. The compensation committee identified a potential conflict with short and long-term incentives being measured using the same metrics and have established new metrics for the 2024 PSUs, Return on Invested Capital and Sales Growth. A full description for the calculation of each metric is described below in the discussion entitled “Compensation Actions Taken After Fiscal Year 2023 End.” PSUs become contingently earned after certification of achievement of the performance metrics by the compensation committee and then convert to RSUs that vest in equal installments over the three-year period from the date the award was granted; notwithstanding the foregoing, the first tranche of the contingently vested PSUs will vest on the date on which performance is certified if such date is later than the date of grant. The PSUs granted during fiscal year 2023 were subject to a performance period beginning on October 1, 2022, and ending on September 30, 2023. In December 2023, the compensation committee ratified the achievement of the performance results, and determined that 40% of the target PSUs became contingently earned. Shares subject to these contingently earned PSUs vest in equal installments on each of December 14, 2023 (the date on which performance was certified), October 1, 2024 and October 1, 2025. Acquisition Incentive Program. In order to encourage and reward the successful long-term performance of businesses acquired by the Company and to create a further incentive to retain the Company’s Named Executive Officers, based on advice provided by Aon, our compensation committee adopted the Acquisition Incentive Program (the “AIP”) in which all of our Named Executive Officers participated during the 2023 fiscal year. The AIP is a long-term cash incentive program pursuant to which the Named Executives Officers may become eligible for cash awards in amounts determined based on the achievement of financial performance metrics by businesses acquired by the Company over the two-year period following its acquisition. Each Named Executive Officer is granted an award under the AIP with a target value of $50,000 for “small” acquisitions or $100,000 for “large” acquisitions. A percentage of each target award may then become earned in amounts ranging from 0% to 300%. Acquired businesses with an Adjusted EBITDA between $1,000,000 and $3,500,000 are considered small acquisitions, while acquired businesses with an Adjusted EBITDA in excess of $3,500,000 are considered large acquisitions. No awards are granted under the AIP with respect to the acquisition of businesses with an Adjusted EBITDA of less than $1,000,000. During fiscal year 2023, the Company completed three acquisitions, two of which qualified as small or large acquisitions under the AIP. The table below sets forth these qualifying acquisitions and the corresponding target awards granted to each of our Named Executive Officers under the AIP.
2023 Compensation Decisions
| Acquired Business | Acquisition Date | Acquisition Size | Target AIP Award | | | Taylor Marine | 10/01/2022 | Large | | 100,000 | | Harbor View Marine | 12/01/2022 | Small | | 50,000 | | Total Target Awards Granted to Each NEO Under AIP for 2023 Acquisitions | | | | 150,000 |
Employment Agreements and Severance and Change in Control Benefits
Employment Agreements and Severance and Change in Control Benefits We have entered into written Employment Agreements with each of our Named Executive Officers that set forth the terms of their employment. Each of our Named Executive Officers is employed “at will.” These arrangements are further described under the section below entitled “Employment Agreements.” Our Named Executive Officers are entitled to certain severance and change in control benefits. Such benefits arise upon termination of employment due to death, disability, without cause, for good reason and certain terminations in connection with a change of control of the Company. These arrangements are further described under the section below entitled “Potential Payments Upon Termination or Change in Control.” Each Named Executive Officer is subject to a general non-competition and non-solicitation clause for periods of one year and two years, respectively, following termination of employment as well as general non-disparagement, nondisclosure and assignment of development clauses. Due to the competitive nature of our industry, the compensation committee believes these severance and change in control provisions are key components of our executive compensation program and are essential to our ability to recruit and retain talent.
Compensation Actions Taken After Fiscal Year 2023 End
Compensation Actions Taken After Fiscal Year 2023 End For fiscal year 2024, the compensation committee adjusted the financial metrics used in the calculation of the annual PSU awards for our Named Executive Officers. As described above in the discussion regarding “Annual Long-Term Incentive Awards” and below in the “Narrative Disclosure to Outstanding Equity Awards at Fiscal Year End”, the financial metrics for fiscal year 2023 ended September 30, 2023 were evaluated using Adjusted EBITDA targets weighted at 80% and aged inventory objectives at 20%. As these metrics are also utilized in calculating our Named Executive Officers' respective annual bonuses, the compensation committee determined it was in the best interests of the Company to change the financial metrics used for calculating an award of PSUs to better align with performance goals of the Company. Aon conducted a full review of the compensation structure and provided feedback on best practices and metrics used by peers. Additionally, the compensation committee considered shareholder feedback. Therefore, for fiscal year 2024, the compensation committee has adjusted the financial metrics utilized for awards of the annual grant of PSUs to our Named Executive Officers to be split equally between “Sales Growth” targets and Return on Invested Capital (“ROIC”) targets weighted at 50%. “Sales Growth” is measured by calculating our change in total revenue, excluding any amounts related to acquisitions or dispositions. ROIC is defined as Adjusted EBITDA less income tax expense, divided by total equity plus long-term debt.
Summary Compensation Table
Summary Compensation Table The following table summarizes the compensation awarded to, earned by or paid to our Named Executive Officers for the fiscal years ended September 30, 2021, 2022 and 2023.
Summary Compensation Table
| Name and Principal Position | Year | Salary ($) | | Stock Awards ($)(1) | | Non-equity Incentive Plan Compensation ($)(2) | | All Other Compensation ($)(3) | | Total ($) | | | P. Austin Singleton (Founder, Chief Executive Officer and Director) | 2023 | | 725,000 | | 1,500,050 | | 750,000 | | 43,657 | | 3,018,707 | | | 2022 | | 725,000 | | 1,500,034 | | 1,500,000 | | 16,267 | | 3,741,301 | | | 2021 | | 725,000 | | 2,181,096 | | 1,500,000 | | 21,806 | | 4,427,902 | | Anthony Aisquith (President, Chief Operating Officer and Director) | 2023 | | 725,000 | | 1,500,050 | | 750,000 | | 53,374 | | 3,028,424 | | | 2022 | | 725,000 | | 1,500,034 | | 1,500,000 | | 18,216 | | 3,743,250 | | | 2021 | | 725,000 | | 2,181,096 | | 1,500,000 | | 23,755 | | 4,429,851 | | Jack Ezzell (Chief Financial Officer) | 2023 | | 475,000 | | 771,495 | | 350,000 | | 28,499 | | 1,624,994 | | | 2022 | | 425,000 | | 500,011 | | 500,000 | | 15,497 | | 1,440,508 | | | 2021 | | 425,000 | | 639,015 | | 500,000 | | 24,096 | | 1,588,111 |
Summary Compensation Table
(1) Represents awards of RSUs and PSUs granted to our Named Executive Officers during fiscal year 2023. On October 1, 2022, 19,927 RSUs were granted to each of Messrs. Singleton and Aisquith and 6,643 RSUs granted to Mr. Ezzell. On October 1, 2022, 29,892 PSUs were granted to each of Messrs. Singleton and Aisquith and 9,964 PSUs granted to Mr. Ezzell. On November 30, 2022, 3,322 RSUs and 4,982 PSUs were granted to Mr. Ezzell based on adjustments to compensation approved by the compensation committee and input from Aon to align Mr. Ezzell's equity compensation with our NEOs. The amounts reported in this column represent the aggregate grant date fair value of awards of RSUs and PSUs made in the year indicated, calculated in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 718, Compensation-Stock Compensation (“ASC 718”), excluding the effects of estimated forfeitures. These amounts do not reflect the actual value that may be ultimately realized by the executive. See Note 12 to our consolidated financial statements in our Annual Report on Form 10-K for the year ended September 30, 2023 for a discussion of the assumptions used in determining the FASB ASC 718 grant date fair value of these awards. For purposes of determining the grant date fair value of the PSUs granted during fiscal year 2023, in accordance with SEC rules and FASB ASC Topic 718, we have assumed that the probable outcome of the performance conditions would results in an aggregate settlement of the PSUs at target (100%). If the PSUs were settled at the maximum payout level of 200%, the grant date fair value of the performance-based RSU awards would be as follows: Mr. Singleton, $1,800,096; Mr. Aisquith, $1,800,096; and Mr. Ezzell, $925,755. Based on the Company’s achievement of the applicable performance metrics during the performance period beginning on October 1, 2022 and ending on September 30, 2023, 40% of the PSUs were contingently earned and will vest ratably over a three-year period, subject to the Named Executive Officer’s continued performance of services to the Company through each vesting date. The vesting schedule applicable to each award of RSUs and PSUs is described in more detail below under the “Outstanding Equity Awards at Fiscal Year End” table and under the section below entitled “Narrative Disclosure to Outstanding Equity Awards Fiscal Year-End.” (2) All of our Named Executive Officers were eligible to receive an annual cash bonus during fiscal year 2023 pursuant to our annual incentive compensation program. The annual incentive arrangement for each Named Executive Officer is described above in the discussion entitled “Compensation Discussion & Analysis―Annual Cash Incentive Award.” (3) “All Other Compensation” with respect to fiscal year 2023 includes perquisites and other personal benefits consisting of medical premiums of $21,899 paid by us for the benefit of each of the Named Executive Officers at amounts greater than amounts available to employees generally. We paid for wellness benefits for the benefit of Messrs. Singleton and Aisquith in amounts equal to $19,680 and $5,044, respectively, for fiscal year 2023. In addition, we paid premiums with respect to life insurance policies for the benefit of Messrs. Singleton and Aisquith in amounts equal to $2,078 and $26,431, respectively, for fiscal year 2023. Mr. Ezzell also participated in our 401(k) plan and received matching contributions of $6,600. Additionally, the Named Executive Officers are eligible to receive discounts on certain purchases (including boats), services and storage and have access to demonstration boats for their personal use. However, these additional perquisites did not result in any additional cost to us, and therefore, no amount is being reported in connection with these perquisites.
Grants of Plan-Based Awards
Grants of Plan-Based Awards The table below includes information regarding grants of non-equity incentive plan awards, RSUs and PSUs to our Named Executive Officers during the fiscal year ended September 30, 2023.
Grants of Plan-Based Awards
| Name | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | | | Estimated Future Payouts Under Equity Incentive Plan Awards(3) | | | All Other Stock Awards: Number of Shares of Stock or Units(#)(4) | Grant Date Fair Value of Stock and Option Awards($)(5) | | | | Threshold($) | Target($) | Maximum($) | Threshold(#) | Target(#) | Maximum(#) | | | | P. Austin Singleton | (1) | 375,000 | 750,000 | 1,500,000 | ― | ― | ― | ― | ― | | | 10/01/2022(2) | 100,000 | 100,000 | 300,000 | ― | ― | ― | ― | ― | | | 12/01/2022(2) | 50,000 | 50,000 | 150,000 | ― | ― | ― | ― | ― | | | 10/01/2022 | ― | ― | ― | 14,946 | 29,892 | 59,784 | ― | 900,048 | | | 10/01/2022 | ― | ― | ― | ― | ― | ― | 19,927 | 600,002 | | Anthony Aisquith | (1) | 375,000 | 750,000 | 1,500,000 | ― | ― | ― | ― | ― | | | 10/01/2022(2) | 100,000 | 100,000 | 300,000 | ― | ― | ― | ― | ― | | | 12/01/2022(2) | 50,000 | 50,000 | 150,000 | ― | ― | ― | ― | ― | | | 10/01/2022 | ― | ― | ― | 14,946 | 29,892 | 59,784 | ― | 900,048 | | | 10/01/2022 | ― | ― | ― | ― | ― | ― | 19,927 | 600,002 | | Jack Ezzell | (1) | 175,000 | 350,000 | 700,000 | ― | ― | ― | ― | ― | | | 10/01/2022(2) | 100,000 | 100,000 | 300,000 | ― | ― | ― | ― | ― | | | 12/01/2022(2) | 50,000 | 50,000 | 150,000 | ― | ― | ― | ― | ― | | | 10/01/2022 | ― | ― | ― | 4,982 | 9,964 | 19,928 | ― | 300,016 | | | 10/01/2022 | ― | ― | ― | ― | ― | ― | 6,643 | 200,021 | | | 11/30/2022 | ― | ― | ― | 2,491 | 4,982 | 9,964 | ― | 162,862 | | | 11/30/2022 | ― | ― | ― | ― | ― | ― | 3,322 | 108,596 |
Grants of Plan-Based Awards
(1) The amounts included in these rows represent the potential threshold, target, and maximum payouts under the annual cash incentive awards for each Named Executive Officer. Actual payouts of the annual cash incentive awards were determined based on achievement of specified performance measures. For more information, see the section entitled “Compensation Discussion and Analysis―Annual Cash Incentive Awards” above. (2) The amounts included in these rows represent the potential threshold, target, and maximum payouts under the target awards issued to each Named Executive Officer under the AIP with respect to acquisitions in fiscal year 2023. The date set forth in the grant date column represents the date of the applicable acquisition. Actual payouts of the target AIP awards will be determined on the second anniversary of the applicable acquisition based on the acquired business’s achievement of specified performance measures. For more information, see the section entitled “Compensation Discussion and Analysis―Acquisition Incentive Program” above. (3) The amounts included in the rows in these three columns represent the number of PSUs granted pursuant to the Incentive Plan during fiscal year 2023 that would contingently vest upon the achievement of a threshold, target and maximum level of performance under the terms of the award. The actual number of PSU awards that were contingently earned in fiscal year 2023 was determined based on the actual achievement of specified performance measures. These PSUs were issued in connection with the annual equity incentive awards for fiscal year 2023, and the number of PSUs contingently earned will vest in three equal installments on each of December 14, 2023 (the date on which performance was certified), October 1, 2024 and October 1, 2025. For more information, see the section entitled “Compensation Discussion and Analysis―Annual Long-Term Incentive Awards” above. (4) The amounts included in this column represent the number of RSUs granted pursuant to the Incentive Plan during fiscal year 2023. These RSUs were issued in connection with the annual equity incentive awards for fiscal year 2023 and, will vest in three equal installments on each anniversary of October 1, 2022. For more information, see the section entitled “Compensation Discussion and Analysis-Annual Long―Term Incentive Awards” above. (5) The amounts in this column represent the grant date fair value of RSU and PSU awards granted to our Named Executive Officers during fiscal year 2023 computed in accordance with FASB ASC 718, excluding the effects of estimated forfeitures. These amounts do not reflect the actual value that may be ultimately realized by the executive. See Note 12 to our consolidated financial statements in our Annual Report on Form 10-K for the year ended September 30, 2023, for a discussion of the assumptions used in determining the FASB ASC 718 grant date fair value of these awards. For purposes of determining the grant date fair value of the PSUs granted during fiscal year 2023, in accordance with SEC rules and FASB ASC Topic 718, we have assumed settlement of the PSUs at the target level of performance. Based on the Company’s achievement of the applicable performance metrics during the performance period beginning on October 1, 2022 and ending on September 30, 2023, 40% of the PSUs were earned and will vest ratably over a three-year period, subject to the Named Executive Officer’s continued performance of services to the Company through each vesting date.
Narrative to the Summary Compensation Table and Grants of Plan Based Awards Table
Narrative to the Summary Compensation Table and Grants of Plan Based Awards Table
Outstanding Equity Awards at Fiscal Year-End
Outstanding Equity Awards at Fiscal Year-End The following table reflects all outstanding equity-based awards held by our Named Executive Officers as of September 30, 2023, which consist of RSUs and PSUs granted under the Incentive Plan.
Outstanding Equity Awards at Fiscal Year-End
| Name Number of | Date of Grant | Stock Awards(1) | | | | | | | Number of Shares or Units of Stock That Have Not Vested(#) | Market Value of Shares or Units of Stock That Have Not Vested($)(11) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested(#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested($)(11) | | P. Austin Singleton | 02/11/20(2) | 4,333 | 111,011 | ― | ― | | | 03/02/20(3) | 15,166 | 388,553 | ― | ― | | | 10/01/20(4) | 2,537 | 64,998 | ― | ― | | | 10/01/20(5) | 20,303 | 520,163 | ― | ― | | | 01/20/21(4) | 4,783 | 122,540 | ― | ― | | | 01/20/21(5) | 38,263 | 980,298 | ― | ― | | | 10/01/21(7) | 4,974 | 127,434 | ― | ― | | | 10/01/21(8) | 14,922 | 382,302 | ― | ― | | | 10/01/22(9) | 19,927 | 510,530 | ― | ― | | | 10/01/22(10) | ― | ― | 11,957 | 306,338 | | Anthony Aisquith | 02/11/20(2) | 4,333 | 111,011 | ― | ― | | | 03/02/20(3) | 15,166 | 388,553 | ― | ― | | | 10/01/20(4) | 2,537 | 64,998 | ― | ― | | | 10/01/20(5) | 20,303 | 520,163 | ― | ― | | | 01/20/21(4) | 4,783 | 122,540 | ― | ― | | | 01/20/21(5) | 38,263 | 980,298 | ― | ― | | | 10/01/21(7) | 4,974 | 127,434 | ― | ― | | | 10/01/21(8) | 14,922 | 382,302 | ― | ― | | | 10/01/22(9) | 19,927 | 510,530 | ― | ― | | | 10/01/22(10) | ― | ― | 11,957 | 306,338 | | Jack Ezzell | 02/11/20(2) | 2,500 | 64,050 | ― | ― | | | 03/02/20(6) | 10,000 | 256,200 | ― | ― | | | 03/02/20(3) | 8,750 | 224,175 | ― | ― | | | 10/01/20(4) | 1,464 | 37,508 | ― | ― | | | 10/01/20(5) | 11,713 | 300,087 | ― | ― | | | 01/20/21(4) | 976 | 25,005 | ― | ― | | | 01/20/21(5) | 7,809 | 200,067 | ― | ― | | | 10/01/21(7) | 1,658 | 42,478 | ― | ― | | | 10/01/21(8) | 4,974 | 127,434 | ― | ― | | | 10/01/22(9) | 6,643 | 170,194 | ― | ― | | | 10/01/22(10) | ― | ― | 3,986 | 102,121 | | | 11/30/22(9) | 3,322 | 85,110 | ― | ― | | | 11/30/22(10) | ― | ― | 1,993 | 51,061 |
Outstanding Equity Awards at Fiscal Year-End
(1) Each RSU, and each PSU to the extent earned, represents the right to receive one share of our Class A common stock upon vesting. (2) These RSU awards vest in equal installments on each of the first four anniversaries of February 7, 2020. (3) These RSU awards relate to PSU awards that became contingently earned at the maximum level of performance following the certification of the Company’s achievement of the applicable performance metrics during the performance period that began on October 1, 2019, and ended on September 30, 2020. The contingently earned PSUs then converted into RSU awards that vest in three equal installments on each of October 1, 2021, October 1, 2022 and October 1, 2023. (4) These RSU awards vest in equal installments on each of the first four anniversaries of September 30, 2020. (5) These RSU awards relate to PSU awards that became contingently earned at the maximum level of performance following the certification of the Company’s achievement of the applicable performance metrics during the performance period that began on October 1, 2020, and ended on September 30, 2021. The contingently earned PSUs then converted into RSU awards that vest in three equal installments on each of October 1, 2022, October 1, 2023 and October 1, 2024. (6) This RSU award vests in equal installments on each of the first four anniversaries of March 2, 2020. (7) These RSU awards vest in equal installments on each of the first three anniversaries of September 30, 2021. (8) These RSU awards relate to PSU awards that became contingently earned at the maximum level of performance following the certification of the Company’s achievement of the applicable performance metrics during the performance period that began on October 1, 2021, and ended on September 30, 2022. The contingently earned PSUs then converted into RSU awards that vest in three equal installments on each of September 30, 2022, September 30, 2023 and September 30, 2024. (9) These RSU awards vest in equal installments on each of the first three anniversaries of October 1, 2022. (10) The number of units and the associated market value reported in this row represents the achievement of the performance metrics for the PSUs based on the Company's actual performance at fiscal year end at 40% of target. The performance period for the PSUs began on October 1, 2022 and ended on September 30, 2023. In December 2023, the compensation committee certified achievement of the performance metrics for the PSUs at 40%. The PSUs that became contingently earned following certification of achievement of the performance metrics then converted into RSU awards that vest in three equal installments on each of December 14, 2023 (the date on which performance was certified), October 1, 2024 and October 1, 2025. (11) The amounts in this column reflect the market value of the shares of Class A common stock subject to outstanding awards of RSUs and PSUs, calculated by multiplying the number of RSUs or PSUs reported by $25.62, the closing price of our Class A common stock on September 29, 2023 (the market was closed on September 30, 2023, the last day of our fiscal year).
Narrative Disclosure to Outstanding Equity Awards at Fiscal Year-End
Narrative Disclosure to Outstanding Equity Awards at Fiscal Year-End The Company has adopted the Incentive Plan. The Incentive Plan is an omnibus plan that allows the Company to grant different types of equity awards. Currently, RSUs and PSUs are being granted under the Incentive Plan. During fiscal years 2021, 2022 and 2023 we granted RSUs and PSUs to our Named Executive Officers under the Incentive Plan. For fiscal years 2021, 2022 and 2023, the aggregate value of the equity grants was allocated 60% to PSUs and 40% to RSUs for each Named Executive Officer. In fiscal year 2021, the RSUs granted to the Named Executive Officers equaled 29,283 total RSUs with an aggregate grant date fair value of $872,448 for each of Messrs. Singleton and Aisquith and 9,761 total RSUs with an aggregate grant date fair value of $255,596 for Mr. Ezzell. In fiscal year 2022, the RSUs granted to the Named Executive Officers equaled 14,922 total RSUs with an aggregate grant date fair value of $600,014 for each of Messrs. Singleton and Aisquith and 4,974 total RSUs with an aggregate grant date fair value of $200,005 for Mr. Ezzell. In fiscal year 2023, the RSUs granted to the Named Executive Officers equaled 19,927 total RSUs with an aggregate grant date fair value of $600,002 for each of Messrs. Singleton and Aisquith and 9,965 total RSUs with an aggregate grant date fair value of $300,046 for Mr. Ezzell. The RSUs granted in fiscal year 2021 vest ratably over a four-year period and the RSUs granted in fiscal years 2022 and 2023 vest ratably over a three-year period, subject to the Named Executive Officer’s continued performance of services to the Company through each vesting date. During fiscal year 2021, the PSUs granted to the Named Executive Officers equaled 43,924 target PSUs with a targeted grant date fair value of $1,308,648 for each of Messrs. Singleton and Aisquith and 14,642 target PSUs with a targeted grant date fair value of $383,418 for Mr. Ezzell. During fiscal year 2022, the PSUs granted to the Named Executive Officers equaled 22,383 target PSUs with a targeted grant date fair value of $900,020 for each of Messrs. Singleton and Aisquith and 7,461 target PSUs with a targeted grant date fair value of $300,007 for Mr. Ezzell. During fiscal year 2023, the PSUs granted to the Named Executive Officers equaled 29,892 target PSUs with a targeted grant date fair value of $900,048 for each of Messrs. Singleton and Aisquith and 14,946 target PSUs with a targeted grant date fair value of $450,024 for Mr. Ezzell. The number of PSUs granted pursuant to the fiscal year 2023 PSU awards was determined based on a target annual equity award value determined by the compensation committee. The ultimate number of units contingently earned pursuant to the fiscal years 2021, 2022 and 2023 PSU awards was determined based on the performance of the Company versus specific objectives over a one-year performance period. For fiscal years 2021, 2022 and 2023, the amount earned with respect to the PSUs could range from 0% to 200% of the target PSUs. The amount actually earned for each Named Executive Officer with respect to fiscal year 2021 performance was 200%. The amount of PSUs actually earned for each Named Executive Officer with respect to fiscal year 2022 was determined to be 200%. The amount of PSUs actually earned for each Named Executive Officer with respect to fiscal year 2023 was determined to be 40%. The performance measurements for the PSUs granted in fiscal years 2021, 2022 and 2023 were based on performance measured against Adjusted EBITDA and aged inventory objectives, with Adjusted EBITDA targets weighted at 80% and inventory objectives weighted at 20%. Following the initial one-year performance period, the performance-based RSUs contingently earned vest ratably over a three-year period, subject to the Named Executive Officer’s continued performance of services to the Company through each vesting date. The vesting schedules for the RSUs and PSUs are described in more detail in the notes to the “Outstanding Equity Awards at Fiscal Year End” table. For more information describing the vesting of the RSUs and PSUs, see the section entitled “Compensation Discussion and Analysis-Annual Long―Term Incentive Awards” above.
Options Exercised and Stock Vested
Options Exercised and Stock Vested The following table reflects, for each of our Named Executive Officers, the number of RSUs that vested during the fiscal year ended September 30, 2023.
Options Exercised and Stock Vested
| | Stock Awards | | | | Name Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(10) | | P. Austin Singleton(1) | 4,333 | 126,350 | | (2) | 15,167 | 456,678 | | (3) | 2,538 | 65,024 | | (4) | 4,783 | 122,540 | | (5) | 4,974 | 127,434 | | (6) | 10,152 | 305,677 | | (7) | 19,132 | 576,065 | | (8) | 14,922 | 382,302 | | Anthony Aisquith(1) | 4,333 | 126,350 | | (2) | 15,167 | 456,678 | | (3) | 2,538 | 65,024 | | (4) | 4,783 | 122,540 | | (5) | 4,974 | 127,434 | | (6) | 10,152 | 305,677 | | (7) | 19,132 | 576,065 | | (8) | 14,922 | 382,302 | | Jack Ezzell(1) | 2,500 | 72,900 | | (9) | 10,000 | 275,800 | | (2) | 8,750 | 263,463 | | (3) | 1,464 | 37,508 | | (4) | 976 | 25,005 | | (5) | 1,658 | 42,478 | | (6) | 5,858 | 176,384 | | (7) | 3,906 | 117,610 | | (8) | 4,974 | 127,434 |
Options Exercised and Stock Vested
(1) These amounts represent the vesting on February 7, 2023, of the third of four equal tranches of RSU awards originally granted on February 11, 2020. (2) These amounts represent the vesting on October 1, 2022, of the second of three equal tranches of RSU awards, which converted from earned PSU awards originally granted on March 2, 2020. (3) These amounts represent the vesting on September 30, 2023, of the third of four equal tranches of RSU awards originally granted on October 1, 2020. (4) These amounts represent the vesting on September 30, 2023, of the third of four equal tranches of RSU awards originally granted on January 20, 2021. (5) These amounts represent the vesting on September 30, 2023, of the second of three equal tranches of RSU awards originally granted on October 1, 2021. (6) These amounts represent the vesting on October 1, 2022, of the first of three equal tranches of RSU awards, which converted from earned PSU awards originally granted on October 1, 2020. (7) These amounts represent the vesting on October 1, 2022, of the first of three equal tranches of RSU awards, which converted from earned PSU awards originally granted on January 20, 2021. (8) These amounts represent the vesting on September 30, 2023, of the second of three equal tranches of RSU awards, which converted from earned PSU awards originally granted on October 1, 2021. (9) These amounts represent the vesting on March 2, 2023, of the third of four equal tranches of RSU awards originally granted on March 2, 2020. (10) The value realized on the vesting of the RSUs reported in this column was calculated as the number of shares of Class A common stock subject to RSUs that vested (including shares withheld for tax withholding purposes) multiplied by the closing price of our Class A common stock on the applicable vesting date, or, if such vesting date was not a trading day, the first trading day immediately following the vesting date.
Pension Benefits
Pension Benefits The Company does not sponsor or maintain any defined benefit pension plan that provides for payments or other benefits at, following, or in connection with retirement of its employees, including the Named Executive Officers.
Nonqualified Deferred Compensation
Nonqualified Deferred Compensation The Company does not sponsor or maintain any defined contribution or other plan for its employees, including the Named Executive Officers, that provides for the deferral of compensation on a basis that is not tax-qualified.
Potential Payments Upon Termination or Change in Control
Potential Payments Upon Termination or Change in Control The following discussion describes the amounts and benefits that would have been owed to the Named Executive Officers in the event of a termination of employment or a change in control as of September 30, 2023, under the Employment Agreements, the equity award agreements, and other compensatory arrangements with the Named Executive Officers. Pursuant to the Employment Agreements, upon a termination of employment due to death, the Named Executive Officer’s estate will be entitled to (i) payment of the Named Executive Officer’s base salary through the end of the month in which such termination occurs, (ii) payment of the Named Executive Officer’s annual bonus for the year in which such termination occurs, in an amount determined based on target levels of performance and pro-rated based on the number of days the executive was employed during the applicable year (the “Pro-Rated Bonus”), (iii) a one-time payment of $1,000,000 for Mr. Singleton and Mr. Aisquith and $500,000 for Mr. Ezzell pursuant to a key man insurance policy maintained by the Company for the executive, (iv) payment for the cost to continue coverage of the executive’s dependents under the Company’s group health plans pursuant to COBRA (the “Benefit Continuation”) for a period of one year, (v) accrued but unpaid vested benefits under any of the Company’s benefit plans, and (vi) any amounts earned but unpaid pursuant to the Employment Agreement including, but not limited to, earned but unpaid base salary or annual bonus and properly submitted but unpaid expense reimbursements (such amounts described in (v) and (vi), the “Accrued Rights”). Pursuant to the Employment Agreements, the Company may terminate a Named Executive Officer’s employment if he is disabled for a period exceeding six months. Upon a termination of employment due to disability, the Named Executive Officer will be entitled to (i) payment of the Named Executive Officer’s base salary for a period of 12 months (reduced by any amounts paid by disability insurance), (ii) payment of the Pro-Rated Bonus, (iii) the Benefit Continuation for the executive for a period of two years for Mr. Singleton and Mr. Aisquith and a period of one year for Mr. Ezzell, and (iv) the Accrued Rights. Further, upon termination of employment due to death or disability, the Employment Agreements provide for accelerated vesting in full of any outstanding RSUs and vesting of any unvested PSUs in an amount determined based on actual achievement of the applicable performance criteria following the completion of the applicable performance period. Upon termination of a Named Executive Officer’s employment for cause or resignation without good reason, all of the Named Executive Officer’s rights to compensation and benefits terminate, except that the Named Executive Officers will be entitled to any Accrued Rights. Pursuant to the Employment Agreements, upon a termination of a Named Executive Officer’s employment by the Company without cause or by the Named Executive Officer for good reason (each such termination a “Qualifying Termination”), the Named Executive Officer is entitled to (i) payment of the Accrued Rights, (ii) continued payment of base salary for a period of two years for Mr. Singleton and Aisquith and one year for Mr. Ezzell, (iii) payment of the annual bonus, based on the target annual bonus amount in effect immediately prior to such termination and determined based on actual achievement of the applicable performance criteria and the end of the applicable performance period and paid at the same time such amounts are paid to executives employed by the Company and (iv) the Benefit Continuation for the executive for a period of two years for Mr. Singleton and Mr. Aisquith and a period of one year for Mr. Ezzell (such amounts described in (i) through (iv), the “Qualifying Termination Severance”). The award agreements governing the outstanding PSU and RSU awards provide for “double-trigger” rather than “single trigger” vesting in connection with a change in control of the Company. The outstanding equity awards held by our Named Executive Officers will only vest in connection with a change in control if the Named Executive Officer experiences a Qualifying Termination during the 12-month period following the change in control (a "Qualifying CIC Termination"). Upon the occurrence of a Qualifying CIC Termination, in addition to the Qualifying Termination Severance, all outstanding, unvested RSUs will immediately vest in full. All unvested PSU awards for which performance achievement had been certified at the time of the change in control (i.e., that were contingently vested and thus remained subject only to time-based vesting requirements) will vest immediately upon such termination. PSU awards for which performance achievement had not been certified at the time of the change in control (i.e., were not contingently vested) will not be forfeited, but instead will remain outstanding and will vest in full at the end of the applicable performance period, in an amount determined based on actual of the performance criteria during such performance period. Each Named Executive Officer is subject to a general non-competition and non-solicitation clause for a period of two years following the date of a termination of employment for Messrs. Singleton and Aisquith and one year for Mr. Ezzell. Each Employment Agreement and the Incentive Plan generally defines “change in control” as one of the following: (i) a sale, merger or similar transaction or series of related transactions involving the Company or any of its subsidiaries, as a result of which those persons who (together with their affiliates) held 100% of the voting power of the Company immediately prior to such transaction do not hold (either directly or indirectly) more than 50% of the voting power of the Company (or the surviving or resulting entity thereof) after giving effect to such transaction, (ii) the sale of all or substantially all of the assets of the Company and its subsidiaries, taken as a whole, in a transaction or series of related transactions or (iii) a majority of the members of the Board are replaced with individuals who are not incumbent directors. Each Employment Agreement generally defines “good reason” as any one of the following: (i) a material and continuing failure to pay compensation and benefits earned by the Named Executive Officer; (ii) a material diminution in the executive’s compensation and benefits, other than an across the board reduction not to exceed 15%; (iii) a change in the Named Executive Officer’s principal place of employment, without the Named Executive Officer’s consent, to a location that is greater than 50 miles from the Named Executive Officer’s principal place of employment in Atlanta, Georgia; (iv) our breach of a material provision in the Named Executive Officer’s Employment Agreement that is not cured within the time provided to do so; or (v) any requirement that the Named Executive Officer perform duties that in the good faith professional judgment of executive are inconsistent with ethical or lawful business practices.
Potential Payments Upon Termination or Change in Control
Each Employment Agreement generally defines “cause” as any one of the following: (i) executive has been convicted of, or pleads guilty or nolo contendere to, a felony involving dishonesty, theft, misappropriation, embezzlement, fraud crimes against property or person, or any act of moral turpitude which negatively impacts the Company, (ii) executive intentionally furnishes materially false, misleading, or gross omissive information concerning a substantial matter material to the Company or persons to whom executive reports, (iii) executive intentionally and wrongfully materially damages material assets of the Company, or (iv) executive inappropriately discloses confidential information of the Company which has a material economic effect on the Company, (v) executive engages in any activity which would constitute a breach of the duty of loyalty as contemplated by the employment agreement, (vi) executive solicits or accepts compensation in any form from any source other than the Company with respect to his service on behalf of the Company (excluding customary business gifts of nominal value), (vii) executive breaches in any material fashion any stated employment policy or provision of the Company’s ethics policy when adopted and which could reasonably be expected to expose the Company to liability in any material financial respect or negatively impact the Company or its business reputation in any material financial effect, (viii) material breach by executive of the employment agreement that is not cured within the time provided to do so, or (ix) executive’s material failure to follow reasonable and lawful directives of the Company and such acts or omissions are not cured within the time provided to do so. Each Employment Agreement generally defines “disability” as the executive’s inability, due to physical or mental incapacity, to perform his duties under the Employment Agreement with a reasonable accommodation, on a full-time basis for a period of three consecutive months along with the executive’s treating physician’s statement that in such physician’s opinion that his condition will not sufficiently improve within that period to be able to resume substantially all of his duties on a full time basis. The following table provides information concerning the estimated payments and benefits that would be provided in the circumstances described above for each of our Named Executive Officers. Except where otherwise noted, payments and benefits are estimated assuming that the triggering event took place on September 30, 2023, and the price per share of our Class A common stock is the closing price as of September 29, 2023 ($25.62). There can be no assurance that a triggering event would produce the same or similar results as those estimated below if such event occurs on any other date or at any other price, or if any other assumption used to estimate potential payments and benefits is not correct. Due to the number of factors that affect the nature and amount of any potential payments or benefits, any actual payments and benefits may be different than those reflected in the table below.
Potential Payments Upon Termination or Change in Control
| Name | Benefits Payable Upon Death ($) | Benefits Payable Upon Disability ($) | Benefits Payable Upon Termination for Cause or without Good Reason ($) | Benefits Payable Upon Termination Without Cause, or For Good Reason ($) | Benefits Payable Upon Termination Without Cause, For Good Reason or Company Non-Renewal in Connection with a Change in Control ($)(1) | | P. Austin Singleton | | | | | | | Cash Payments | 1,750,000(2) | 1,475,000(5) | — | 2,950,000(6) | 2,950,000(6) | | Accelerated Vesting of Equity | 3,514,167(3) | 3,514,167(3) | — | — | 3,514,167(3) | | Payment of COBRA Premiums(4) | 10,131 | 10,131 | — | 20,262 | 20,262 | | Total | $5,274,298 | $4,999,298 | $— | $2,970,262 | $6,484,429 | | Anthony Aisquith | | | | | | | Cash Payments | 1,750,000(2) | 1,475,000(5) | — | 2,950,000(6) | 2,950,000(6) | | Accelerated Vesting of Equity | 3,514,167(3) | 3,514,167(3) | — | — | 3,514,167(3) | | Payment of COBRA Premiums(4) | 10,131 | 10,131 | — | 20,262 | 20,262 | | Total | $5,274,298 | $4,999,298 | $— | $2,970,262 | $6,484,429 | | Jack Ezzell | | | | | | | Cash Payments | 850,000(2) | 825,000(5) | — | 1,650,000(6) | 1,650,000(6) | | Accelerated Vesting of Equity | 1,685,490(3) | 1,685,490(3) | — | — | 1,685,490(3) | | Payment of COBRA Premiums(4) | 10,131 | 10,131 | — | 10,131 | 10,131 | | Total | $2,545,621 | $2,520,621 | $— | $1,660,131 | $3,345,621 |
Potential Payments Upon Termination or Change in Control
(1) A Qualifying Termination in connection with a change in control must occur within 12 months of the consummation of a change in control in order for the executive to become entitled to the amounts reflected in this column. (2) These amounts represent the sum of (i) $0 related to the continued payment of the Named Executive Officers' base salary for the remainder of the month of termination because the assumed termination date occurred on the last day of the month, (ii) the Named Executive Officers' full target annual bonus because the assumed termination date would not require pro-ration of such amount, and (iii) life insurance payments of $1,000,000 for each of Mr. Singleton and Mr. Aisquith and $500,000 for Mr. Ezzell to be paid by the Company to the respective Named Executive Officers' estate. (3) These amounts represent the value that would have been received by the Named Executive Officers if (i) all of their outstanding RSUs vested in full and (ii) because the performance period for all outstanding PSUs had ended and because performance had been preliminarily measured at 40% as of September 30, 2023, all of their outstanding PSUs vested in full. (4) Note, for a termination due to death, these amounts represent the amount the Named Executive Officer's estate would receive in order to continue coverage of the Named Executive Officer's dependents under the Company’s group health plans for a period of 12 months. For all other terminations, these amounts represent the amount the Named Executive Officer would receive in order to continue his coverage under the Company’s group health plans for a period of 24 months for each of Mr. Singleton and Mr. Aisquith and 12 months for Mr. Ezzell. In each case, the COBRA payment amounts are calculated based on 2023 premiums and the Named Executive Officer's current elections under the applicable health plans, which are each assumed for purposes of this table to remain the same for the entire 12 or 24 months, as applicable. (5) These amounts represent the sum of (i) the Named Executive Officer's aggregate annual base salary and (ii) the Named Executive Officer's full target annual bonus because the assumed termination date would not require pro-ration of such amount. For purposes of calculating these amounts, we have assumed that no payments from disability insurance would be received. (6) These amounts represent the sum of (i) the Named Executive Officer's annual base salary multiplied by two for each of Mr. Singleton and Mr. Aisquith and one for Mr. Ezzell, and (ii) the amount of each Named Executive Officer's target annual bonus that would have been earned assuming performance is deemed achieved at the target level of performance multiplied by two years to account for continued payment of the annual bonus for a period of two years. The actual amounts attributable to the continued annual bonus payments will depend on actual achievement of the performance metrics in the applicable performance periods.
CEO PAY RATIO
CEO PAY RATIO For the fiscal year ended September 30, 2023, the median of the annual total compensation of all employees of our company (other than our CEO) was $67,590 and the annual total compensation of our CEO was $3,018,707. Based on this information, for fiscal year 2023, the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all other employees was 45:1. We believe this ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K under the Exchange Act. We identified the median employee by taking into account the total compensation for the fiscal year ended September 30, 2023 reflected in our payroll records for all individuals, excluding our CEO, who were employed by us on September 30, 2023. We included all employees, whether employed on a full-time, part-time, or temporary basis. We did not make any assumptions, adjustments or estimates with respect to their total compensation for the fiscal year ended September 30, 2023 reflected in our payroll records. Once the median employee was identified as described above, that employee’s total annual compensation for the fiscal year ended September 30, 2023 was determined using the same rules that apply to reporting the compensation of our Named Executive Officers (including our CEO) in the “Total” column of the Summary Compensation Table. This information is being provided for compliance with SEC rules. Neither the compensation committee nor our management team used the pay ratio measure in making compensation decisions. Given the different methodologies that companies use to determine an estimate of their pay ratio, the estimated ratio reported above should not be used as a basis for comparison between companies.
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE Pursuant to Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K, the Pay Versus Performance Table (set forth below) is required to include “Compensation Actually Paid” or “CAP,” as calculated per SEC disclosure rules, to the Company’s PEO and the Company’s non-PEO Named Executive Officers ("NEOs"), as noted below. “Compensation Actually Paid” represents a new required calculation of compensation that differs significantly from the Summary Compensation Table calculation of compensation, the NEO’s realized or earned compensation, as well as from the way in which the compensation committee views annual compensation decisions, as discussed in the CD&A. The amounts in the table below are calculated in accordance with SEC rules and do not represent amounts actually earned or realized by NEOs, including with respect to equity awards which remain subject to forfeiture if the vesting conditions are not satisfied.
PAY VERSUS PERFORMANCE
| Year | Summary Compensation Table Total for PEO($)(1)(2) | Compensation Actually Paid to PEO(1) (3) | Average Summary Compensation Table Total for Non-PEO NEOs($)(4) | Average Compensation Actually Paid to Non-PEO NEOs(4) (5) | Value of Initial Fixed $100 Investment Based On:(6) | | Net (Loss) Income ($) (thousands) | Adjusted EBITDA(8) ($) (thousands) | | | | | | | TSR($) | Peer Group TSR($)(7) | | | | 2023 | 3,018,707 | 1,837,482 | 2,326,709 | 1,438,593 | 130.56 | 123.07 | (39,111) | 167,412 | | 2022 | 3,741,301 | 2,685,035 | 2,591,879 | 1,804,034 | 153.44 | 112.97 | 152,611 | 247,587 | | 2021 | 4,427,902 | 8,247,303 | 3,008,981 | 6,062,872 | 204.91 | 147.68 | 116,413 | 155,840 |
PAY VERSUS PERFORMANCE
(1)Our PEO was P. Austin Singleton during fiscal years 2021 through 2023. (2)Represents the total compensation paid to our PEO in each year listed, as shown in our Summary Compensation Table for such year listed. (3)Compensation actually paid does not mean that our PEO was actually paid those amounts in the listed year. Instead, this is a dollar amount derived from the starting point of the Summary Compensation Table total compensation under the methodology prescribed under the relevant SEC rules and as reflected in the adjustment table below.
PAY VERSUS PERFORMANCE
| PEO | | | | | | 2023 | 2022 | 2021 | | Summary Compensation Table Total | $3,018,707 | $3,741,301 | $4,427,902 | | Add (Subtract): | | | | | Subtract amounts reported under the “Stock Awards” column in the Summary Compensation Table | (1,500,050) | (1,500,034) | (2,181,096) | | Addition of fair value at year-end of equity awards granted during the year that remain unvested as of year-end | 816,868 | 1,198,137 | 4,415,460 | | Fair value at vesting date of awards granted during the year and vested in the same year | — | 644,034 | 300,161 | | Change in fair value of equity awards granted in prior years that were unvested as of year-end | (472,709) | (1,429,029) | 1,203,930 | | Change in fair value of equity awards granted in prior years that vested during the year | (126,321) | (17,654) | 67,768 | | Equity awards granted in prior years that were forfeited during the year | — | — | — | | Dividends or other earnings paid on equity awards during the year | 100,987 | 48,280 | 13,178 | | Compensation Actually Paid | $1,837,482 | $2,685,035 | $8,247,303 |
PAY VERSUS PERFORMANCE
(4)Our Non-PEO NEOs were Anthony Aisquith and Jack Ezzell during fiscal years 2021 through 2023. (5)This figure is the average of compensation actually paid for our NEOs other than our PEO in each year listed. Compensation actually paid does not mean that our NEOs were actually paid those amounts in the listed year, but this is a dollar amount derived from the starting point of the Summary Compensation Table total compensation under the methodology prescribed under the relevant rules as shown in the adjustment table below.
PAY VERSUS PERFORMANCE
| Non-PEO NEO Average | | | | | | 2023 | 2022 | 2021 | | Summary Compensation Table Total | $2,326,709 | $2,591,879 | $3,008,981 | | Add (Subtract): | | | | | Subtract amounts reported under the “Stock Awards” column in the Summary Compensation Table | (1,135,773) | (1,000,023) | (1,410,056) | | Addition of fair value at year-end of equity awards granted during the year that remain unvested as of year-end | 612,677 | 798,758 | 2,943,653 | | Fair value at vesting date of awards granted during the year and vested in the same year | — | 429,356 | 200,121 | | Change in fair value of equity awards granted in prior years that were unvested as of year-end | (348,256) | (1,101,668) | 1,257,953 | | Change in fair value of equity awards granted in prior years that vested during the year | (97,364) | 40,271 | 53,434 | | Equity awards granted in prior years that were forfeited during the year | — | — | — | | Dividends or other earnings paid on equity awards during the year | 80,600 | 45,461 | 8,786 | | Compensation Actually Paid | $1,438,593 | $1,804,034 | $6,062,872 |
PAY VERSUS PERFORMANCE
(6)Pursuant to SEC rules, the comparison assumes $100 was invested on September 30, 2020. Historical stock price performance is not necessarily indicative of future stock price performance. (7)The TSR Peer Group is the Russell 2000 index as used in the Company's performance graph found in the Company's 10-K. (8)In the Company's assessment, Adjusted EBITDA is the financial performance measure that is the most important financial performance measure used by the Company in 2023 to link compensation actually paid to performance. The Company defines Adjusted EBITDA as net income (loss) before interest expense – other, income tax (benefit) expense, depreciation and amortization and other (income) expense, further adjusted to eliminate the effects of items such as the change in fair value of contingent consideration, gain (loss) on extinguishment of debt, loss on impairment and transaction costs.
Description of Relationships Between Compensation Actually Paid and Performance
Description of Relationships Between Compensation Actually Paid and Performance We believe the Company's pay-for-performance philosophy is well reflected in the table above because the Compensation Actually Paid tracks well to the performance measures required to be disclosed in the table. The graphs below describe, in a manner compliant with the relevant SEC rules, the relationship between Compensation Actually Paid and the performance measures described in the table above.
Compensation Actually Paid Versus TSR
Compensation Actually Paid Versus TSR
Compensation Actually Paid Versus Net (Loss) Income
Compensation Actually Paid Versus Net (Loss) Income
Compensation Actually Paid Versus Adjusted EBITDA
Compensation Actually Paid Versus Adjusted EBITDA
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION During the fiscal year ended September 30, 2023, each of our non-employee directors received the compensation set forth in the table below. Employee directors are not compensated for their additional service provided to our Board and thus are not included in the table below.
DIRECTOR COMPENSATION
| Name | Fees Earned or Paid in Cash ($) | | Stock Awards ($)(1)(2) | | Total ($)(3) | | | John F. Schraudenbach(4) | | 146,667 | | 125,000 | | 271,667 | | John G. Troiano | | 75,000 | | 125,000 | | 200,000 | | Christopher W. Bodine | | 95,000 | | 125,000 | | 220,000 | | Jeffrey B. Lamkin | | 75,000 | | 125,000 | | 200,000 | | Bari A. Harlam | | 95,000 | | 125,000 | | 220,000 | | J. Steven Roy | | 75,000 | | 125,000 | | 200,000 | | Carmen R. Bauza(5) | | 43,750 | | 72,917 | | 116,667 | | Mitchell W. Legler(6) | | 64,583 | | 125,000 | | 189,583 | | Keith R. Style(7) | | 31,250 | | 125,000 | | 156,250 |
DIRECTOR COMPENSATION
(1) Represents the aggregate grant date fair value of 4,152 RSUs granted to each nonemployee director other than Ms. Bauza on October 1, 2022. Ms. Bauza joined the Board effective March 1, 2023 and was granted a pro-rated award of 2,622 RSUs on March 1, 2023. The RSUs granted to the non-employee directors vested in full on September 30, 2023, subject to the director’s continued service on the Board. As of September 30, 2023, all outstanding RSU awards held by our directors had vested in full, and thus, our directors did not hold any outstanding RSU awards. (2) Represents the aggregate grant date fair value of the RSUs granted to each nonemployee director determined in accordance with FASB ASC 718, excluding the effect of estimated forfeitures. See Note 12 to our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023, for a discussion of the assumptions used in determining the FASB ASC 718 grant date fair value of these awards. (3) The directors are also eligible to receive discounts on certain purchases (including boats), services and storage and have access to demonstration boats for their personal use, but these additional perquisites did not result in any additional cost to us and therefore no amount is being reported in this table in connection with these perquisites. (4) For Mr. Schraudenbach, the $146,667 in fees earned or paid in cash reflected in the table above were for compensation for his service as a member of the Board, including his role as the Audit Committee Chair, for the entirety of fiscal year 2023, as well as his role as the Non-Executive Chair from March 1, 2023 through September 30, 2023. (5) Ms. Bauza joined the Board on March 1, 2023. The fees earned or paid in cash for fiscal year 2023 reflected in the table above represent the pro-rated compensation paid to Ms. Bauza for the partial year of service. (6) Mr. Legler was a member of the Board from October 1, 2022 through February 28, 2023, including serving as the Non-Executive Chair. The fees earned or paid in cash for fiscal year 2023 reflected in the table above represent the pro-rated compensation paid to Mr. Legler for the partial year of service. (7) Mr. Style was a member of the Board from October 1, 2022 through February 28, 2023. The fees earned or paid in cash for fiscal year 2023 reflected in the table above represent the pro-rated compensation paid to Mr. Style for the partial year of service.
Narrative to Director Compensation Table
Narrative to Director Compensation Table We believe that attracting and retaining qualified non-employee independent directors is critical to the future value of our continued growth and governance. We also believe that the compensation package for our non-employee independent directors should require that a portion of the total compensation package be equity-based to align the interests of these directors with our equity holders. The following narrative describes the director compensation policy in effect during fiscal year 2023. We pay our non-employee independent directors an annual retainer of $75,000 in cash each year and award each non-employee independent director with an RSU grant valued, on the date of grant, at $125,000, which will vest one year following the date of grant. The number of RSUs granted annually to the non-employee independent directors is determined by dividing the total value of the RSU award by the adjusted closing price of our Class A common stock immediately prior to the grant date. In addition, the various chairs of Board committees received the following additional cash retainers during fiscal year 2023: Non-Executive Chair, if any: $80,000 Audit Committee Chair: $25,000 Compensation Committee Chair: $20,000 Governance Committee Chair: $20,000 Cash retainers are ordinarily paid quarterly in arrears. In addition, the Company maintains share ownership guidelines for non-employee directors. Non-employee directors are required to hold shares of our Class A common stock with a value of $225,000 within five years of joining the Board, $300,000 within six years of joining the Board, and $375,000 (or five times the value of the base annual retainer) within seven years of joining the Board.