Proxy Statement (Form DEF 14A)
SECURITIES AND EXCHANGE COMMISSION
SCHEDULE 14A
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To Our Shareholders:
You are invited to attend the 2025 Annual Meeting of Shareholders, which will be held in virtual meeting format only, via webcast at meetnow.global/MPWVZU9 on
You are asked to: (1) approve the election of nominees for Director nominated by the Board of Directors; (2) ratify the selection of
Your time and attention to this letter and the accompanying Proxy Statement and Proxy is appreciated.
Sincerely,
/s/
Executive Chairman
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD
Notice is hereby given that the 2025 Annual Meeting of Shareholders of
1. To elect the following nominees as Directors to the class whose two-year term will expire in 2027:
2. To ratify the selection of
3. To approve, on an advisory basis, our named executive officer compensation; and
4. To transact any other business properly brought before the 2025 Annual Meeting or any adjournment or postponement of the 2025 Annual Meeting.
Only shareholders of record of the Company's common stock on the books of the Company at the close of business on
Your vote is important. While all shareholders are invited to attend the 2025 Annual Meeting virtually, to ensure your representation at the meeting, please mark, date, and sign the enclosed proxy, and retuit promptly in the enclosed envelope. Any shareholder attending the 2025 Annual Meeting virtually may vote in person even if the shareholder returned a proxy.
By Order of the Board of Directors
/s/
Secretary
The enclosed proxy is being solicited on behalf of the Board of Directors of the Company and can be returned in the enclosed envelope, which requires no postage if mailed in
TABLE OF CONTENTS
2025 ANNUAL MEETING
THE PROXY AND SOLICITATION
This Proxy Statement is being mailed on or about
The Company will bear the expense of preparing, printing and mailing this Proxy Statement. Although the Company has not retained a proxy solicitor to aid in the solicitation of proxies, it may do so in the future if the need arises and does not believe that the cost of any such proxy solicitor will be material. In addition to solicitation of proxies by mail, certain Directors, officers and other employees of the Company, none of whom will receive additional compensation therefor, may solicit proxies by telephone, facsimile, electronic mail or by personal contacts. The Company will request brokers, banks and other custodians, nominees and fiduciaries to send proxy materials to beneficial owners and will, upon request, reimburse them for their out-of-pocket expenses.
PURPOSES OF ANNUAL MEETING
The Annual Meeting has been called for the purposes of: (1) electing the following nominees as Directors to the class whose two-year term will expire in 2027:
The persons named in the enclosed proxy have been selected by the Board and will vote Common Stock represented by valid proxies. Unless otherwise indicated in the enclosed proxy, they intend to vote "FOR" the election of the Director nominees named herein, "FOR" the ratification of the selection of
ATTENDING THE ANNUAL MEETING
To register for the virtual Annual Meeting, please follow these instructions:
Registered Shareholders: If your shares are registered in your name with the Company's transfer agent,
Beneficial Shareholders (those holding shares through a stock brokerage account or by a bank or other holder of record): If your shares are held in the name of your broker or bank, you must register in advance to attend the online-only virtual Annual Meeting. To register in advance to attend the virtual Annual Meeting, you must submit a legal proxy obtained from your broker, trustee or nominee, as applicable, that reflects proof of your proxy power. The legal proxy will show your
Any shareholder wishing to attend the virtual Annual Meeting should register for the meeting no later than
The Annual Meeting will begin promptly at
The virtual Annual Meeting platform is fully supported across browsers (Firefox, Chrome, and Safari) and devices (desktops, laptops, tablets, and cell phones) running the most updated version of applicable software and plugins. Participants should ensure they have a strong Internet connection wherever they intend to participate in the Annual Meeting. Participants should also allow plenty of time to log in and ensure that they can hear streaming audio prior to the start of the Annual Meeting.
In order to maintain the interactive nature of the virtual Annual Meeting, attendees will be able to vote using the online meeting website.
If a shareholder wishes to submit a question to be addressed at the Annual Meeting, the shareholder may do so in advance of the meeting by following the instructions received in the registration confirmation email to log into the virtual meeting platform, typing a question into the "Ask a Question" box and clicking "Submit." Questions will be accepted until
VOTING SECURITIES
The Board has established the close of business on
PROPOSAL ONE
ELECTION OF DIRECTORS
The Board is divided into two classes, whose members serve for a staggered, two-year term. The term of one class, which currently consists of four Directors, expires at the 2026 Annual Meeting; the term of the other class, which currently consists of the five Director nominees, expires at the 2027 Annual Meeting.
The Board has nominated
At the Annual Meeting, the shares of Common Stock represented by valid proxies, unless otherwise specified, will be voted to elect the Director nominees. Each individual nominated for election as a Director of the Company has agreed to serve if elected. However, if any nominee becomes unable or unwilling to serve if elected, the proxies will be voted for the election of such other person as may be recommended by the Board. The Board has no reason to believe that the persons listed as nominees will be unable or unwilling to serve.
Directors will be elected by a majority of the votes cast at the Annual Meeting, subject to our majority voting policy described below under "Corporate Governance." Abstentions and broker non-votes do not count as votes cast. Accordingly, abstentions and broker non-votes will have no effect in determining the outcome of the vote on the election of Directors. Certain information regarding each of the Company's current Directors and Director nominees, including his or her principal occupation and directorships during the past five years, is set forth below.
DIRECTOR NOMINEES
DIRECTORS WITH TERMS THAT EXPIRE IN 2026
The Board recommends a vote "FOR"
CORPORATE GOVERNANCE
BOARD MEETINGS AND COMMITTEES
The Board held four regularly scheduled meetings in 2024. The Board has a standing
Each of our Directors attended all of the regularly scheduled meetings of the Board and committees on which he or she served during 2024. In addition to holding regular Board and committee meetings, the Board members and committee members also reviewed and considered matters and documents and communicated with each other apart from the meetings. Additionally, all non-management members of the Board meet separately without members of management present at every regularly scheduled Board meeting.
The Board determines the independence of each Director and each Director nominee in accordance with the independence standards set forth in the listing requirements of the
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if the Director or Director nominee is, or has an immediate family member who is, a partner, principal or member (or any comparable position) of, an executive officer or employee of, any organization to which the Company made, or from which the Company received, immaterial payments for property or services in the current or any of the past three fiscal years; |
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if the Director or Director nominee, or an immediate family member of the Director nominee, serves as an officer, director or trustee of a foundation, school, charitable or other not-for-profit organization, and the Company's discretionary charitable contributions to the organization are immaterial, in the aggregate; or |
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if the Director or Director nominee serves on the board of directors of another company at which another Company Director or executive officer also serves as a director. |
A complete list and description of the categorically immaterial relationships is set forth in Appendix A to the Company's Corporate Governance Guidelines, which is available on the Corporate Governance Section of our website at olysteel.com/investor-relations/corporate-governance-guidelines/.
The Board has determined that Messrs. Kempthorne, Anton, Stovsky and Rippey,
Board Composition. Our Directors come from a variety of backgrounds and bring a diverse set of skills and experiences to the boardroom. In evaluating the suitability of Board candidates, the
Our Board members also have a wide variety of experiences, qualifications, and skills necessary to make them valuable members of the Board who provide significant contributions to the company. The graph below highlights some of those experiences.
Compensation Committee. The Compensation Committee is chaired by
Nominating and Governance Committee.
CORPORATE GOVERNANCE
Director Nominations Process. The Board's process for identifying and evaluating nominees for Director consists principally of evaluating candidates who are recommended by the
Except as may be required by rules promulgated by Nasdaq or the
Majority Voting Policy. On the recommendation of the
Any Director who tenders his or her resignation pursuant to this policy shall not participate in the
Board Leadership and Risk Oversight.
In 2014, the Company created a Lead Director position, which is currently held by
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presiding at all meetings of the Board at which the Chairman is not present, including executive sessions of the independent directors; |
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serving as a liaison between the Chairman and the independent Directors; |
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approving information sent to the Board; |
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approving meeting agendas for the Board; |
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approving meeting schedules to assure that there is sufficient time for discussion of all agenda items; |
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authority to call meetings of the independent Directors; and |
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if requested by major shareholders, ensuring that he is available for consultation and direct communication. |
The Board generally oversees the Company's risk management directly and through the
Annual Meeting Attendance. The Board does not have a formal policy with regard to Directors' attendance at the Annual Meeting. Last year, all Board members attended the Annual Meeting.
Shareholder Approval. Our Amended and Restated Articles of Incorporation and our Amended and Restated Code of Regulations may be amended by the affirmative vote of the holders of a majority of our outstanding shares of Common Stock. Any merger involving us or the sale of all or substantially all of our assets would require the affirmative vote of the holders of a majority of our outstanding shares of Common Stock.
Insider Trading Policy. The Company has adopted an insider trading policy applicable to its directors, officers and employees, and has implemented procedures for the Company, governing the purchase, sale and other disposition of the Company's securities. The Company believes its insider trading policy and procedures are reasonably designed to promote compliance with insider trading laws, rules and regulations and listing standards applicable to the Company.
Anti-Hedging and Anti-Pledging Policy. Directors, executive officers and certain of our other employees that are subject to the pre-clearance procedures of our insider trading policy are prohibited from engaging in hedging transactions with respect to our securities. "Hedging transactions" can be accomplished through a number of possible mechanisms, including through the use of financial instruments such as prepaid variable forwards, equity swaps, collars and exchange funds or through other transactions that hedge or offset, or are designed to hedge or offset, any decrease in the market value of our securities. Because hedging transactions might permit a director, executive officer or certain of our other employees to continue to own our securities, whether obtained through our equity compensation plans or otherwise, without the full rewards and risks of ownership, such hedging transactions are prohibited.
We also prohibit our directors, executive officers and certain of our other employees that are subject to the pre-clearance procedures of our insider trading policy from holding our securities in margin accounts or otherwise pledging our securities for a loan. Additionally, we prohibit our directors, executive officers and certain of our other employees that are subject to the pre-clearance procedures of our insider trading policy from engaging in short sales of our securities and purchasing and selling put options, call options or other such derivative securities relating to our securities.
CODE OF ETHICS
We have adopted a Business Ethics Policy. The full text of the Business Ethics Policy is available through the "Investors" section of our website under the "Corporate Governance" option at www.olysteel.com. The Business Ethics Policy applies not only to our principal executive officer and principal financial and accounting officer and controller, but also to all of our employees. We intend to disclose any amendments to the Business Ethics Policy, and all waivers of the Business Ethics Policy relating to our principal executive officer, principal financial and accounting officer and controller by posting such information on our website.
SUSTAINABILITY
We have formed a
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information regarding the beneficial ownership of Common Stock as of
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Names and Addresses of Beneficial Owners |
Number of Shares Beneficially Owned(1) |
Percentage of Ownership |
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1,298,244 | 11.6% | |||||
| 50 Hudson Yards | |||||||
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1,067,072 | 9.6% | |||||
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810,638 | 7.3% | |||||
| Building One | |||||||
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669,270 | 6.0% | |||||
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(1) |
Unless otherwise indicated below, the persons named in the table above have sole voting and investment power with respect to the number of shares set forth opposite their names. |
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(2) |
Based on Schedule 13G/A filed with the |
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(3) |
Based on Schedule 13G/A filed with the |
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(4) |
Based on Schedule 13G/A filed with the |
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information regarding the beneficial ownership of Common Stock as of
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Names of Beneficial Owners |
Number of Shares Beneficially Owned (1) |
Number of Additional Shares Subject to Certain Vested Restricted Stock Units (2) |
Percentage of Ownership (2) |
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1,067,072 | - | 9.6 | % | ||||||||
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58,690 | 144,668 | * | |||||||||
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19,518 | 80,451 | * | |||||||||
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19,293 | 45,330 | * | |||||||||
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375 | 2,779 | * | |||||||||
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85,308 | − | * | |||||||||
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44,501 | − | * | |||||||||
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21,828 | − | * | |||||||||
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45,719 | − | * | |||||||||
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14,330 | − | * | |||||||||
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17,172 | − | * | |||||||||
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− | − | * | |||||||||
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170,354 | 57,171 | 1.5 | % | ||||||||
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All Directors, Director nominees and Executive Officers as a group (13 persons) (12) |
1,564,160 | 330,399 | 13.8 | % | ||||||||
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* |
Less than 1% |
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(1) |
Unless otherwise indicated below, the persons named in the table above have sole voting and investment power with respect to the number of shares set forth opposite their names. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of Common Stock subject to options or restricted stock units held by that person that are currently exercisable or will become exercisable within 60 days after |
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Represents shares not yet beneficially owned that are issuable pursuant to vested restricted stock units (a) that will not be converted until a qualified retirement, which cannot occur within 60 days, or (b) under our Supplemental Executive Retirement Plan that will not be converted until six months after a qualified retirement, or (c) under our C-suite LTIP that will be converted to shares upon vesting on |
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Includes 2,505 shares held in an individual retirement account for |
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Includes 2,075 shares held in individual retirement accounts for |
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Includes 44,626 shares issuable pursuant to restricted stock units that will be converted into shares when the individual is no longer a Board member. Includes 558 shares of restricted stock that will vest on |
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Includes 42,826 shares issuable pursuant to restricted stock units that will be converted into shares when the individual is no longer a Board member. Includes 558 shares of restricted stock that will vest on |
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(7) |
Includes 20,153 shares issuable pursuant to restricted stock units that will be converted into shares when the individual is no longer a Board member. Includes 558 shares of restricted stock that will vest on |
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Includes 30,244 shares issuable pursuant to restricted stock units that will be converted into shares when the individual is no longer a Board member. Includes 558 shares of restricted stock that will vest on |
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Includes 7,655 shares issuable pursuant to restricted stock units that will be converted into shares when the individual is no longer a Board member. Includes 558 shares of restricted stock that will vest on |
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(10) |
Includes 15,497 shares issuable pursuant to restricted stock units that will be converted into shares when the individual is no longer a Board member. Includes 558 shares of restricted stock that will vest on |
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(11) |
Includes 34,953 shares issuable pursuant to restricted stock units that will be converted into shares when the individual retires from the Company. |
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(12) |
Number of Shares Beneficially Owned includes 161,001 shares issuable pursuant to restricted stock units that will be converted into shares when the individual is no longer a Board member and 34,953 shares issuable pursuant to restricted stock units that will be converted into shares when the individual retires from |
EXECUTIVE COMPENSATION
COMPENSATION DISCUSSION AND ANALYSIS
Introduction
We are a leading metals service center focused on the direct sale and value-added processing of carbon and coated sheet, plate and coil products; stainless steel sheet, plate, bar and coil; aluminum sheet, plate and coil; pipe, tube bar, valves and fittings, tin plate and metal-intensive end-use products. We provide metals processing and distribution services for a wide range of customers. We operate in three reportable segments: specialty metals flat products, carbon flat products, and tubular and pipe products. Our specialty metals flat products segment's focus is on the direct sale and distribution of processed aluminum and stainless flat-rolled sheet and coil products, flat bar products, prime tin mill products and fabricated parts. Through acquisitions, our specialty metals flat products segment has expanded its geographical footprint and enhanced its product offerings in stainless steel and aluminum plate, sheet, angles, rounds, flat bar, tube and pipe and the manufacturing and distribution of stainless steel bollards and water treatment systems. Our carbon flat products segment's focus is on the direct sale and distribution of large volumes of processed carbon and coated flat-rolled sheet, coil and plate products and fabricated parts. Through acquisitions, our carbon flat products segment has expanded its product offerings to include self-dumping metal hoppers and steel and stainless-steel dump inserts for pickup truck and service bed trucks. Through the acquisition of
Our compensation philosophy remains pay-for-performance based. Our annual cash incentive plan emphasizes Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) in the calculation of incentives for our most senior executive officers.
At our 2024 Annual Meeting, we received approximately 99% approval for our advisory "Say-on-Pay" proposal to approve the compensation of our named executive officers. The Compensation Committee considered the 2024 voting results at its meetings and remains dedicated to continuous improvement to the existing executive pay programs. As a result of its considerations, and the high level of shareholder approval, the Compensation Committee did not make any significant changes to the executive pay practices described below.
The following discussion and analysis of our 2024 executive compensation program, which may include forward-looking statements, should be read together with the compensation tables and related disclosures that follow this section.
Our named executive officers for fiscal year 2024 were
Compensation Philosophy and Objectives
The goals of our compensation program for our Chief Executive Officer and the other executive officers named in the 2024 Summary Compensation Table, whom we refer to as our named executive officers, are to support our long-term business strategy and align our executives' interests with those of our shareholders. We designed the compensation program to, among other things, provide incentives for executives to help us achieve business objectives and give the Compensation Committee the flexibility necessary to reward executives for achieving those objectives. The Compensation Committee's strategy for achieving these goals is to:
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Provide each named executive officer with total compensation that is competitive compared to compensation for similarly situated executives in public and privately held metal and metal-related companies, and similar-sized non-metal companies, in order to attract, motivate and retain highly qualified executives; and |
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Reward performance under a cash incentive plan that provides the potential for a substantial reward through the payment of a significant incentive that increases as our EBITDA increases but provides reduced incentive payments during periods when EBITDA decreases. As a micro-cap stock, the Company has less shares outstanding and less ability to grant additional shares. As a result, the cash incentive has been designed to take into account that the Company cannot grant equity awards at a rate comparable to its peer group. |
Role of Compensation Committee and Management
Our Compensation Committee is responsible for setting and administering the policies and plans that govethe base salaries, incentives and other compensation elements for our named executive officers.
Management assists the Compensation Committee in administering the executive compensation program by recommending individual and Company performance goals, including offering suggestions for key metrics for use in our incentive program, and by providing data regarding actual performance.
Role of Compensation Consultant
Compensation Allocation
Our executive compensation program consists of three primary components: base salary, annual cash incentive payouts and long-term compensation, both in the form of equity and cash incentives. We also provide our executives with the opportunity to participate in a 401(k) retirement and profit-sharing plan and a non-qualified defined contribution plan. Certain health, disability and life insurance and other customary fringe benefits also are available to our named executive officers, who participate in these fringe benefits on substantially the same basis as our other employees. Except for
In determining the relative allocation of these elements of compensation, the Compensation Committee seeks to provide an amount of long-term compensation, both in the form of equity and cash incentives, that is sufficient to align the interests of our executives with those of our shareholders, while also providing adequate short-term compensation, primarily in the form of cash, to attract and retain talented executives. The Compensation Committee takes into account various qualitative and quantitative indicators
The Compensation Committee believes that the elements of the executive compensation program discussed below advance our business objectives and the interests of our shareholders by attracting and retaining the executive leadership necessary for growth and motivating our executives to increase shareholder value.
Elements of Compensation
Base Salaries. The annual base salaries of our named executive officers are based upon an evaluation of their significant contributions against established objectives as individuals and as a team, as determined by the Compensation Committee. As noted above, when establishing base salaries for our named executive officers, the Compensation Committee considers the cash compensation offered by other metal and metal-related companies, including the peer group found in "Role of Compensation Consultant" above, and obtains the recommendations of
The base salaries paid to our named executive officers in 2024 were reviewed and approved by the Compensation Committee, and the amounts paid are reflected in the 2024 Summary Compensation Table. The 2024 base salaries of Messrs. Siegal and Manson and
Annual Cash Incentive Compensation. We believe that a significant portion of the compensation paid to our named executive officers should be based on our annual performance so that the executives are appropriately motivated to maximize our operating performance each year. We have established our Senior Manager Cash Incentive Plan to provide our executives, including our named executive officers, with the opportunity to eaan annual cash incentive payout. Additionally, the incentive plan has been designed to pay out a higher mix of cash compensation because the Company cannot grant equity awards at a rate comparable to its peer group as described above.
The Senior Manager Cash Incentive Plan was implemented to emphasize EBITDA, excluding the impact of any LIFO inventory adjustment. Cash incentives are only earned if EBITDA exceeds 5% of average annual accounts receivable, inventory and fixed assets, and payouts of cash incentives under the Senior Manager Cash Incentive Plan are capped at
For 2024, we generated
Long-Term Incentive Compensation (Equity-Based and Cash-Based). The Compensation Committee believes that equity-based compensation awards are an appropriate means of aligning the interests of our executives with those of our shareholders by rewarding our executives based on increases in the price of our Common Stock. Like base salary and the annual cash incentive payments, award levels are set with regard to competitive considerations, and each individual's actual award is based upon the individual's job responsibilities, performance, potential for increased responsibility and contributions, leadership ability and commitment to our strategic efforts. The timing and amount of previous awards to, and held by, each named executive officer is reviewed, but is only one factor considered by the Compensation Committee in determining the size of any equity-based award grants.
Equity-based compensation awards are granted under the
For more information about our Incentive Plan and awards under that plan for 2024, see the 2024 Grants of Plan-Based Awards Table, the Outstanding Equity Awards at 2024 Fiscal Year-End Table and the accompanying narratives below.
Prior to 2020, under the Senior Manager Stock Incentive Plan, participants were awarded restricted stock units that convert into the right to receive shares of Common Stock upon an executive's retirement, or earlier upon the executive's death or disability or upon a change in control of the Company.
In
In each calendar year, the Committee may award eligible participants in the C-suite LTIP a long-term incentive under the Incentive Plan of both a restricted stock unit (RSU) grant and a performance stock unit (PSU) grant. Additionally, the Committee may offer a long-term cash incentive (split equally between service and performance-based portions) to supplement both the RSU and PSU grants in order to arrive at the total long-term award target. For 2024, the Committee determined that the total long-term award target was
In
In
In his role as Executive Chairman of the Board of Directors,
Stock Ownership Guidelines. Effective
Personal Benefits and Perquisites. Our named executive officers also are eligible to receive other benefits, which the Compensation Committee believes are commensurate with the types of benefits and perquisites provided to other similarly situated executives, as determined based on the Compensation Committee's review of information supplied by
Retirement and Post-Employment Benefits. We provide certain of our executives with certain post-employment and severance benefits as summarized below and further described in "Potential Payments upon Termination or Change in Control." The Compensation Committee believes these benefits are vital to attract and retain qualified executives. These benefits provide the executives with the opportunity to address long-term financial planning with a greater degree of certainty, and also address our interest in continuing to motivate executives in the event of corporate instability, such as a change of control or unforeseen industry changes.
We provide certain named executive officers with the opportunity to participate in our Supplemental Executive Retirement Plan, which is a non-qualified defined contribution savings plan. Under the Supplemental Executive Retirement Plan, we provide an annual contribution for each participating executive, a portion of which is based only on the participant's continued service with us, and an additional performance-based amount that is dependent on our retuon invested capital for the applicable year. Each of these contribution components is referenced as a specified percentage of the executive's base salary and cash incentive award amount for the year.
In addition, each of the members of our senior management group, including our named executive officers, also may participate in our Executive Deferred Compensation Plan, a non-qualified voluntary contributory savings plan under which a participant may defer all or any portion of his or her annual incentive award and up to 90% of his or her base salary into one or more investment options that are the same as those available to all of our employees who participate under our 401(k) plan. Currently, none of the named executive officers participate in the Executive Deferred Compensation Plan. The Supplemental Executive Retirement Plan and the Executive Deferred Compensation Plan are further described below under the "2024 Non-qualified Deferred Compensation" table.
To ensure the continuity of corporate management and the continued dedication of key executives during any period of uncertainty caused by a possible change in control, we entered into management retention agreements with all of our named executive officers, except
Other Compensation Policies
Section409A of the Internal Revenue Code. Section 409A of the Internal Revenue Code of 1986, as amended, or the Code, generally provides that arrangements involving the deferral of compensation that do not comply in form and operation with Section 409A or are not exempt from Section 409A are subject to increased tax, penalties and interest. If a deferred compensation arrangement does not comply with, or is not exempt from, Section 409A, employees may be subject to accelerated or additional tax, or interest or penalties, with respect to the compensation. The Compensation Committee believes that deferred compensation arrangements that do not comply with Section 409A would be of significantly diminished value to our executives. Accordingly, we intend to design our future deferred compensation arrangements, and have amended our previously adopted deferred compensation arrangements, to either be exempt from, or comply with Section 409A.
Clawback Policy and Provisions. Effective
The Clawback Policy does not condition such clawback on the fault of the executive officer, but the Company is not required to clawback amounts in limited circumstances set forth in the Clawback Policy where the Compensation Committee has made a determination that recovery would be impracticable. Operation of the mandatory accounting restatement provisions of the Clawback Policy is subject to a brief phase-in process during the first few years after its effectiveness. The Company may not indemnify any such executive officer against the loss of such recovered compensation in the event of a mandatory accounting restatement.
COMPENSATION COMMITTEE REPORT
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management. Based on this review and discussion, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in our Annual Report on Form 10-K for the year ended
This report is submitted on behalf of the members of the Compensation Committee:
Risk Profile of Compensation Programs. The Compensation Committee believes that the Company's executive compensation program has been designed to provide the appropriate level of incentives that do not encourage our executive officers to take unnecessary risks in managing our business. As discussed above, a majority of our executive officers' compensation is performance-based, consistent with our executive compensation policy. Our Senior Manager Cash Incentive Plan is designed to reward annual financial and/or strategic performance in areas considered critical to the short- and long-term success of the Company. In addition, our Incentive Plan awards are directly aligned with long-term shareholder interests through their link to our stock price and longer-term performance periods. In combination, the Compensation Committee believes that the various elements of the Senior Manager Cash Incentive Plan and the Incentive Plan sufficiently tie our executives' compensation opportunities to the Company's sustained long-term performance. As a result, we believe that risks arising from our employee compensation policies and practices are not reasonably likely to have a material adverse effect on the Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 2024, the following individuals served as members of the Compensation Committee:
2024 SUMMARY COMPENSATION TABLE
The following table sets forth certain information with respect to the compensation earned during the years ended
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Position |
Year |
Salary ($) |
Bonus ($) |
Stock Awards ( |
Option Awards ($) |
Non-Equity Incentive Plan Compensation ( |
Change in Pension Value and Nonqualified Deferred Compensation Earnings ( |
All Other Compensation ( |
Total ($) |
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2024 |
500,000 | - | - | - | - | - | 29,826 | 529,826 | |||||||||||||||||||||||||
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Executive Chairman |
2023 |
447,917 | - | - | - | - | - | 29,180 | 477,097 | |||||||||||||||||||||||||
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2022 |
375,000 | - | - | - | - | - | 33,694 | 408,694 | ||||||||||||||||||||||||||
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2024 |
975,000 | - | 1,100,016 | - | 1,560,046 | - | 232,983 | 3,868,045 | |||||||||||||||||||||||||
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Chief Executive |
2023 |
735,000 | - | 738,760 | - | 929,110 | - | 242,284 | 2,645,154 | |||||||||||||||||||||||||
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Officer |
2022 |
735,000 | - | 517,000 | - | 1,775,469 | - | 404,600 | 3,432,069 | |||||||||||||||||||||||||
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2024 |
741,667 | - | 800,000 | - | 1,020,414 | - | 159,469 | 2,721,550 | |||||||||||||||||||||||||
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President & Chief |
2023 |
675,000 | - | 402,960 | - | 840,238 | - | 195,060 | 2,113,258 | |||||||||||||||||||||||||
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Operating Officer |
2022 |
675,000 | - | 282,000 | - | 1,605,642 | - | 344,062 | 2,906,704 | |||||||||||||||||||||||||
|
|
2024 |
550,000 | - | 400,200 | - | 668,613 | - | 144,039 | 1,762,852 | |||||||||||||||||||||||||
|
Chief Financial |
2023 |
550,000 | - | 201,480 | - | 686,733 | - | 171,358 | 1,609,571 | |||||||||||||||||||||||||
|
Officer |
2022 |
550,000 | - | 141,000 | - | 1,312,303 | - | 307,229 | 2,310,532 | |||||||||||||||||||||||||
|
|
2024 |
300,000 | - | 75,000 | - | 137,345 | - | 11,814 | 524,159 | |||||||||||||||||||||||||
|
Treasurer |
2023 |
300,000 | - | 20,000 | - | 182,127 | - | 40,408 | 542,535 | |||||||||||||||||||||||||
|
2022 |
250,000 | - | 20,000 | - | 293,339 | - | 35,348 | 598,687 | ||||||||||||||||||||||||||
|
(1) |
The amounts shown do not reflect compensation actually received by the named executive officer. The amounts shown in this column are the grant date fair values of the stock awards calculated in accordance with Financial Accounting Standards Board Accounting Standard Codification (ASC) Topic 718. The fair value of the stock awards is based on the stock price on the date of the grant. For additional information, including assumptions used in calculating these amounts, see Note 13 to our audited financial statements for the year ended |
|
(2) |
The amounts for 2024 represent amounts earned by the named executive officers for 2024 under our Senior Manager Cash Incentive Plan as well as cash amounts earned by the named executive officers that were granted under the C-suite LTIP in 2022 and vested in 2024. Amounts under the Senior Manager Cash Incentive Plan for 2024 were |
|
(3) |
No above-market or preferential earnings on nonqualified deferred compensation were earned by any named executive officer. |
|
(4) |
Compensation reported in this column for 2024 includes: (1) the amount of contributions we made on behalf of our named executive officers to our 401(k) and profit-sharing plan and supplemental executive retirement plan; (2) the premiums we paid for life and disability insurance for each named executive officer; and (3) the incremental cost to us of the following perquisites: an allowance for personal tax retupreparation fees, and a cell phone and an automobile allowance. The following table outlines all other compensation for 2024. |
|
Compensation |
Michael D. Siegal |
Richard T. Marabito |
Andrew S. Greiff |
Richard A. Manson |
Lisa K. Christen |
|||||||||||||||
|
Supplemental Executive Retirement Plan |
$ | - | $ | 190,125 | $ | 144,625 | $ | 107,250 | $ | - | ||||||||||
|
401(k) and profit-sharing |
10,350 | 10,350 | 10,350 | 10,350 | 10,350 | |||||||||||||||
|
Disability insurance |
1,014 | 1,014 | 1,014 | 1,014 | 1,014 | |||||||||||||||
|
Life insurance |
2,472 | 1,980 | 1,980 | 1,290 | 450 | |||||||||||||||
|
Personal tax retupreparation, cell phone and automobile allowance |
15,990 | 29,514 | 1,500 | 24,135 | - | |||||||||||||||
|
Total |
$ | 29,826 | $ | 232,983 | $ | 159,469 | $ | 144,039 | $ | 11,814 | ||||||||||
2024 GRANTS OF PLAN-BASED AWARDS
The following table sets forth plan-based awards granted to our named executive officers during 2024.
|
Estimated Potential Payouts Under Non-Equity Incentive Plan Awards(1)(2) |
Estimated Future Payouts Under Equity Incentive Plan Awards (3) |
All Other Stock Awards: Number of Shares of Stock |
All Other Option Awards: Number of Securities Underlying |
Exercise or Base Price of |
Grant Date Fair Value of Stock and Option |
|||||||||||||||||||||||||||||||||||||||
|
Grant |
Threshold |
Target |
Maximum |
Threshold |
Target |
Maximum |
or Units | Options | Option | Awards | ||||||||||||||||||||||||||||||||||
|
|
Date |
($) |
($) |
($) |
(#) |
(#) |
(#) |
(#)(4) |
($) |
($) |
($) |
|||||||||||||||||||||||||||||||||
|
|
- | - | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||
|
|
- | - | - | 3,000,000 | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||
|
|
- | - | - | - | 8,246 | 12,369 | - | - | - | 550,008 | ||||||||||||||||||||||||||||||||||
|
|
- | - | - | - | - | - | 8,246 | - | - | 550,008 | ||||||||||||||||||||||||||||||||||
|
|
- | - | - | 3,000,000 | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||
|
|
- | - | - | - | 5,997 | 8,996 | - | - | - | 400,000 | ||||||||||||||||||||||||||||||||||
|
|
- | - | - | - | - | - | 5,997 | - | - | 400,000 | ||||||||||||||||||||||||||||||||||
|
|
- | - | - | 3,000,000 | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||
|
|
- | 37,400 | 56,100 | 3,000 | 4,500 | - | - | 200,100 | ||||||||||||||||||||||||||||||||||||
|
|
- | - | - | - | - | - | 3,000 | - | - | 200,100 | ||||||||||||||||||||||||||||||||||
|
|
- | - | - | 3,000,000 | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||
|
|
- | - | - | - | - | - | 1,124 | - | - | 75,000 | ||||||||||||||||||||||||||||||||||
|
(1) |
There are no target payout amounts under our Senior Manager Cash Incentive Plan for each of our named executive officers as the payout is based on a percentage of EBITDA. Payouts under this program are capped at |
|
(2) |
As part of our C-suite LTIP, |
|
(3) |
As part of our C-suite LTIP, a target of 8,246, 5,997 and 3,000 of PSUs were awarded to Messrs. Marabito, Greiff and Manson, respectively in 2024. There are no threshold payout amounts under the C-suite LTIP as retuon net assets over the three-year vesting period must exceed five percent for any payments to occur. The maximum award is 150% of the grant. |
|
(4) |
As part of our C-suite LTIP, a target of 8,246, 5,997 and 3,000 long-term service-based restricted stock units were awarded to Messrs. Marabito, Greiff and Manson, respectively in 2024. In addition, the column includes |
Senior Manager Cash Incentive Plan
Our named executive officers, Business Unit Presidents, Vice Presidents, General Managers, certain managers and other employees, as determined by our named executive officers, are eligible to participate in our Senior Manager Cash Incentive Plan, which was amended effective
Eligible participants may defer amounts paid pursuant to our Senior Manager Cash Incentive Plan under our Executive Deferred Compensation Plan described in "Retirement and Post-Employment Benefits." A participant who is not employed by us at the end of our fiscal year will forfeit the participant's annual cash incentive award. Notwithstanding the foregoing, a participant who terminates employment with us due to death, disability or retirement is eligible for a full or pro-rata annual cash incentive award at the discretion of our Compensation Committee. Additionally, a pro-rata annual cash incentive award will be paid in the event of a change in control.
OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR-END
The following table sets forth outstanding equity awards held by our named executive officers at
|
Option Awards |
Stock Awards |
|||||||||||||||||||||||||||||||||||
|
|
Number of Securities Underlying Unexercised Options (#) Exercisable |
Number of Securities Underlying Unexercised Options (#) Unexercisable |
Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) |
Option Exercise Price ($) |
Option Expiration Date |
Number of Shares or Units of Stock That Have Not Vested (#)(1) |
Market Value of Shares or Units of Stock That Have Not Vested ( |
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 ( |
|||||||||||||||||||||||||||
|
|
- | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
|
|
- | - | - | - | - | 19,246 | 631,461 | 24,746 | 811,916 | |||||||||||||||||||||||||||
|
|
- | - | - | - | - | 27,691 | 908,542 | 14,997 | 492,052 | |||||||||||||||||||||||||||
|
|
- | - | - | - | - | 6,000 | 196,680 | 7,500 | 246,075 | |||||||||||||||||||||||||||
|
|
- | - | - | - | - | 1,720 | 56,448 | - | - | |||||||||||||||||||||||||||
|
(1) |
Subject to the terms and conditions of each individual restricted stock unit grant, 11,000 and 8,246 of the restricted stock units held by |
|
(2) |
Value is based on the closing price of our Common Stock of |
|
(3) |
These Equity Incentive Plan Awards were granted under the C-suite LTIP. Actual payment of the awards may range from 0% to 150% depending on Company performance. The performance-based stock awards are reported at the expected payout level based on the performance of the Company and the terms of the C-suite LTIP. The PSUs will vest if the retuon net assets, calculated as EBITDA divided by Average Accounts Receivable, Inventory and Property Plant and Equipment, exceeds five percent during the applicable three-year performance period. 16,500, 9,000 and 4,500 of the PSU for Messrs. Marabito, Greiff and Manson, respectively, are reported at the expected payout level of 150% during the 2023-2025 performance period. 8,246, 5,997 and 3,000 of the PSUs for Messrs. Marabito, Greiff and Manson, respectively, are reported at the expected payout level of 100% during the 2024-2026 performance period. |
Incentive Plan
The Incentive Plan provides us with the authorization to grant stock options, stock appreciation rights, restricted shares, restricted share units, performance shares and other stock- and cash-based awards to our employees, Directors and consultants.
Restricted Share and Restricted Stock Units.
Awards under the Incentive Plan may take the form of restricted shares and restricted stock units, which involve the granting of shares to participants subject to restrictions on transferability and any other restrictions the Compensation Committee may impose. The restrictions lapse if either the holder remains employed by us for a period of time established by the Compensation Committee under the applicable award agreement or satisfies other restrictions, including performance-based restrictions, during the period of time established by the Compensation Committee. Restricted share units are similar to restricted shares except that no shares are actually awarded to the participant on the date of grant and the holder typically does not enjoy any shareholder rights (including voting) with respect to the units. Restricted share awards and restricted stock unit awards are settled in shares.
In
In each calendar year, the Committee may award eligible participants a long-term incentive of both a restricted stock unit (RSU) grant and a performance stock unit (PSU) grant. Additionally, the Committee may offer a long-term cash incentive (split equally between service and performance-based portions) to supplement both the RSU and PSU grants in order to arrive at the total long-term award target. The total long-term award target is
2024 OPTION EXERCISES AND STOCK VESTED
|
Option Awards |
Stock Awards (1) |
|||||||||||||||
|
|
Number of Shares Acquired on Exercise (#) |
Value Realized on Exercise ($) |
Number of Shares Acquired on Vesting (#) |
Value Realized on Vesting ($) |
||||||||||||
|
|
- | - | - | - | ||||||||||||
|
|
- | - | 80,322 | 4,392,287 | ||||||||||||
|
|
- | - | 16,316 | 546,711 | ||||||||||||
|
|
- | - | 8,816 | 1,293,866 | ||||||||||||
|
|
- | - | 1,510 | 55,245 | ||||||||||||
|
(1) |
Includes 11,000, 6,000 and 3,000 of RSUs and 16,500, 9,000 and 4,500 of the PSUs for Messrs. Marabito, Greiff and Manson, respectively granted under the C-suite LTIP that vested on |
2024 PENSION BENEFITS
None of the named executive officers participate in a defined benefit pension plan sponsored by us. All named executive officers participate in the same defined contribution plan as all of our other non-union employees.
2024 NONQUALIFIED DEFERRED COMPENSATION
The following table sets forth information relating to the named executive officers' nonqualified deferred compensation.
|
|
Executive Contributions in Last Fiscal Year ( |
Registrant Contributions in Last Fiscal Year ( |
Aggregate Earnings (Losses) in Last Fiscal Year ( |
Aggregate Withdrawals or Distributions ($) |
Aggregate Balance at Last Fiscal Year-End ( |
||||||||||||||||
|
|
- | - | - | - | - | ||||||||||||||||
|
|
SERP |
- | 169,785 | (812,374 | ) | - | 4,990,376 | ||||||||||||||
|
RSU |
1,733,890 | - | (776,623 | ) | - | 2,484,964 | |||||||||||||||
|
|
SERP |
- | 155,925 | (938,010 | ) | - | 2,088,990 | ||||||||||||||
|
RSU |
43,178 | - | (512,213 | ) | - | 539,068 | |||||||||||||||
|
|
SERP |
- | 127,050 | (362,586 | ) | - | 1,566.000 | ||||||||||||||
|
RSU |
531,752 | - | (122,682 | ) | - | 650,524 | |||||||||||||||
|
|
SERP |
- | 29,250 | 10,422 | - | 94,506 | |||||||||||||||
|
RSU |
21,622 | - | (13,556 | ) | - | 34,746 | |||||||||||||||
|
(1) |
Includes values associated with 52,822, 1,316, 16,207 and 659 shares issuable pursuant to restricted stock units that will be converted into shares when the individual retires from the Company for Messrs. Marabito, Greiff, Manson, and |
|
(2) |
The amounts reported in this column represent Supplemental Executive Retirement Plan amounts accrued to each executive officer in the "All Other Compensation" column of the 2023 Summary Compensation Table and funded in 2024, as described in footnote (4) to the "All Other Compensation" table. Amounts accrued in 2024, but not funded until 2025, are included in the 2024 Summary Compensation Table. |
|
(3) |
No portion of the amounts reported in this column represent above-market or preferential interest or earnings accrued on the applicable plan and, accordingly, have not been included in the "Change in Pension Value and Nonqualified Deferred Compensation on Earnings" column of the 2024 Summary Compensation Table. Please see the discussions of the Supplemental Executive Retirement Plan and the Executive Deferred Compensation Plan below for a description of how earnings are calculated under each plan. |
|
(4) |
Includes 22,916, 15,114, 3,620 and 400 shares issuable pursuant to restricted stock units that will be converted into shares when the individual retires from the Company for Messrs. Marabito, Greiff, Manson, and |
|
(5) |
This column reflects the balance of all contributions and the aggregate earnings on such contributions. |
Supplemental Executive Retirement Plan
On
The Supplemental Executive Retirement Plan provides for a single lump sum payment to participants of their vested account balance, as adjusted for earnings and losses prior to distribution, following a "qualified" retirement from the Company. Participants who retire from the Company after attaining the age of 62 will be entitled to receive a lump sum payment of their vested account balance six months after the date of retirement. Participants who retire from the Company after attaining the age of 55, but prior to attaining the age of 62, will be entitled to receive a lump sum payment of their vested account balance after the later of the attainment of the age of 62 or six months following the date of retirement.
Generally, benefits under the Supplemental Executive Retirement Plan vest at the end of the five-year period after the executive becomes a participant in the Supplemental Executive Retirement Plan. The benefits of all named executive offers are fully vested in the plan.
Participants' benefits under the Supplemental Executive Retirement Plan will become fully vested upon (1) death while an employee of the Company, (2) termination of employment due to disability, (3) the effective date of any termination of the Supplemental Executive Retirement Plan or (4) the date of a change of control.
We annually allocate a deemed "base contribution" under the Supplemental Executive Retirement Plan for each participant in an amount equal to thirteen percent (13%) of a participant's "Applied Compensation." A participant's "Applied Compensation" is the sum of: (1) the participant's annual base salary; plus (2) the lesser of (a) the actual bonus earned by the participant under the Senior Manager Cash Incentive Plan in the applicable year, or (b) 50% of the participant's annual base salary earned in the applicable year. Additionally, we annually allocate an "incentive contribution" under the Supplemental Executive Retirement Plan for each participant, based on our annual retuon invested capital for the applicable year, in an amount of 0.0% to 19.6% of the participant's Applied Compensation.
The percentage is determined in accordance with the following table:
|
|
Percentage of Participant's Applied Compensation |
|||
|
Less than 6% |
0.0 |
% |
||
|
6% |
0.8 |
% |
||
|
7% |
1.6 |
% |
||
|
8% |
2.4 |
% |
||
|
9% |
3.2 |
% |
||
|
10% |
4.0 |
% |
||
|
11% |
6.6 |
% |
||
|
12% |
9.2 |
% |
||
|
13% |
11.8 |
% |
||
|
14% |
14.4 |
% |
||
|
15% |
17.0 |
% |
||
|
16% or Greater |
19.6 |
% |
||
A participant's account will be credited with earnings and losses based on the performance of investment funds selected by the participant. Account balances are credited with earnings, gains or losses based on the performance of investment options that are the same as those available to all of our employees who participate under our 401(k) plan.
Earnings under the Supplemental Executive Retirement Plan and the Executive Deferred Compensation Plan are based on the following underlying funds, which had the following annual returns in 2024:
|
Fund(1) |
AnnualReturn |
|||
|
(%) |
||||
|
|
2.92 |
|||
|
Vanguard Total Bond Market Index Adm |
1.24 |
|||
|
BlackRock Total RetuK |
1.83 |
|||
|
|
6.58 |
|||
|
VanVanguard Target Retirement 2020 Fund |
7.75 |
|||
|
|
9.44 |
|||
|
|
10.64 |
|||
|
|
11.78 |
|||
|
|
12.88 |
|||
|
|
13.91 |
|||
|
|
14.64 |
|||
|
|
14.64 |
|||
|
|
14.63 |
|||
|
Vanguard Target Retirement 2065 Fund |
14.62 |
|||
|
|
12.02 |
|||
|
|
24.97 |
|||
|
|
30.57 |
|||
|
|
14.41 |
|||
|
|
16.91 |
|||
|
|
20.10 |
|||
|
|
5.04 |
|||
|
|
5.02 |
|||
|
|
13.89 |
|||
|
(1) |
These investment options are generally the same as those available to all of our employees who participate under our 401(k) plan. |
From 2014 through 2019, the entire SERP contribution for all participants was deemed invested in restricted stock units. For contributions made in 2020 and thereafter, the Board will determine if any of the SERP contribution is funded with restricted stock units. None of the contributions, since 2020 were deemed to be in restricted stock units. There were no contributions to the SERP in 2021.
Executive Deferred Compensation Plan
The
Participants may defer all or any portion of their annual incentive award and up to 90% of their base salary to the Executive Deferred Compensation Plan. Each Participant is eligible to designate one or more investment options that are available under our 401(k) and profit-sharing plan as the deemed investment(s) for the participant's deferred compensation account or such other investment options determined appropriate in the sole discretion of the Board. Employee deferrals are credited with earnings, gains or losses based on the performance of investment options that are available under our 401(k) and profit-sharing plan and selected by the employee. Earnings under the Executive Deferred Compensation Plan are based on the same funds, with same annual returns for 2024, as described above with respect to the Supplemental Executive Retirement Plan. A participant's contributions are always 100% vested, and distributions from the plan will be paid in cash in a single lump sum upon termination of employment.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
Severance Plan and Retention Agreement
On
Compensation for purposes of this calculation includes salary, cash bonus, C-suite LTIP, Company contributions to the Supplemental Executive Retirement Plan and 401(k) and profit-sharing plan on behalf of the officer, personal tax preparation fees, automobile allowance and country club dues, continuation of insurance coverages and long-term incentive payments. These retention agreements also provide that, in the event that any of the payments or benefits described above would constitute a "parachute payment" under Code Section 280G, the payments or benefits provided will be reduced so that no portion is subject to the excise tax imposed by Code Section 4999, but only to the extent such reduction will result in a net after tax benefit to the officer. Each of the retention agreements contains a non-competition prohibition for two years post-employment.
The table below reflects the approximate amounts that would be payable to each named executive officer under the Severance Plan or retention agreement assuming that we incurred a change in control at
|
|
|
|
|
|||||||||||||
|
Salary |
$ | 1,318,507 | $ | 2,436,850 | $ | 2,084,695 | $ | 1,644,500 | ||||||||
|
Cash Incentive Payout |
- | 3,524,089 | 3,058,564 | 2,460,670 | ||||||||||||
|
Retirement Plan Contribution Amounts (1) |
32,143 | 750,565 | 653,190 | 535,210 | ||||||||||||
|
Personal Benefit Amount (2) |
191,066 | 185,245 | 149,732 | 78,039 | ||||||||||||
|
Continuation of Insurance Coverage (3) |
61,349 | 47,769 | 47,769 | 62,314 | ||||||||||||
|
Long-Term Equity Based Incentive Payout |
- | 2,660,817 | 1,650,679 | 825,539 | ||||||||||||
|
Long-Term Cash Based Incentive Payout |
- | 726,321 | 396,175 | 198,088 | ||||||||||||
|
Total |
$ | 1,603,064 | $ | 10,331,656 | $ | 8,040,804 | $ | 5,804,360 | ||||||||
|
(1) |
The amounts in this row represent the lump sum payment amount that would be paid to the officer in respect |
|
(2) |
The amounts in this row represent the lump sum payment amount that would be paid to the officer in respect of following personal benefits and perquisites provided to the officer: cell phone allowance and automobile allowance (all), fees for personal tax and financial planning (all) and country club dues (in the cases of Messrs. Siegal, Greiff, and Marabito). |
|
(3) |
The amounts in this row represent 2.99 times the amounts that we would pay for the continuation of medical, dental, disability and life insurance coverage for |
Under our long-term equity-based incentive program, upon a change in control, each of our named executive officers would also be entitled to receive an accelerated payout for his or her restricted stock unit awards not yet vested made under our Incentive Plan prior to
With respect to awards granted under our C-suite LTIP on or after
Finally, a pro rata portion of
Employment Agreements
The Severance Plan discussed above replaced the employment agreements previously in effect during 2024 for Messrs. Marabito, Greiff and Manson. In addition to potential payments due to change in control, the Severance Plan also covers potential payments due to death or disability or involuntary terminations without cause. The Severance Plan contains a two-year non-competition and non-solicitation prohibition and customary confidentiality provisions. In connection with the termination of the formal employment agreements and commencement of participation in the Severance Plan, the Company entered into employment continuation letters with Messrs. Marabito, Greiff and Manson effective
Under the employment continuation letters,
If Messrs. Marabito, Greiff or Manson's employment were to be terminated without cause, they would continue to receive their base salary, annual bonus and any other benefits applicable to them under the welfare and benefit plans we maintain, including Company contributions to the Supplemental Executive Retirement Plan and 401(k) and profit-sharing plan, coverage under our medical, dental, disability and life insurance programs, reimbursement for personal tax and financial planning and an allowance for country club dues, an automobile and a cell phone, as in effect on the date of termination, during the period ending on the earlier of a breach of the non-competition, non-solicitation or confidentiality clause or twenty-four months from the date of termination of employment. An estimate of these amounts payable upon a termination without cause for each officer are set forth below.
|
Richard T. Marabito |
Andrew S. Greiff |
Richard A. Manson |
||||||||||
|
Salary |
$ | 1,950,000 | $ | 1,483,333 | $ | 1,100,000 | ||||||
|
Cash Incentive Payout |
1,662,592 | 1,245,828 | 939,726 | |||||||||
|
Retirement Plan Contribution |
400,950 | 309,950 | 235,200 | |||||||||
|
Continuation of Insurance Coverage |
47,769 | 47,769 | 62,314 | |||||||||
|
Long-term Equity Based Incentive Payment |
2,200,032 | 1,600,000 | 800,400 | |||||||||
|
Long-term Cash Based Incentive Payment |
1,457,500 | 795,000 | 397,500 | |||||||||
|
Personal tax retupreperation, country club dues, cellphone allowance and automobile allowance |
141,227 | 92,255 | 54,310 | |||||||||
|
Total |
$ | 7,860,070 | $ | 5,574,135 | $ | 3,589,450 | ||||||
If the officer's employment was terminated due to death, the estates would continue to receive the base salary for one year thereafter. If the officer's employment was terminated due to death or disability, the spouse and any minor children would be eligible to continue to participate in our health insurance programs for one year thereafter.
If
Retirement Plans
Our executive officers are eligible to participate in our Supplemental Executive Retirement Plan and each of our named executive officers is eligible to participate in our Executive Deferred Compensation Plan. The aggregate account balance of each named executive officer under the SERP and a description of the amounts payable to each such executive upon retirement from their employment with us under each of these plans are provided in the following 2024 Nonqualified Deferred Compensation Table.
CEO Pay Ratio
For the 2024 fiscal year, the ratio of the total annual compensation of
|
● |
The Company calculated total compensation in 2023 for each active employee as of |
|
● |
The Company added bonuses/incentives, employer 401(k) match and the value of life insurance coverage; and |
|
● |
The Company did not exclude any employees. |
PAY VERSUS PERFORMANCE
|
Average Summary |
Average |
Value ot Initial Fixed |
Company Selected Measure |
|||||||||||||||||||||||||||||
| Year |
Summary Compensation Table Total for PEO |
Compensation Actually Paid to PEO |
Compensation Table Total for Non-PEO Named Executive Officers |
Compensation Actually Paid to Non-PEO Named Executive Officers |
Total Shareholder Return |
Total Shareholder Return |
Net Income (in thousands) |
EBITDA (in thousands) |
||||||||||||||||||||||||
|
(a) |
($)(b) |
($)(c)(1)(2) |
($)(d) |
($)(e)(1)(2) |
($)(f)(3) |
($)(g)(3) |
($)(h) |
($)(i) |
||||||||||||||||||||||||
|
2024 |
3,868,045 | (344,956 | ) | 1,384,597 | 549,298 | 191 | 227 | 22,980 | 72,287 | |||||||||||||||||||||||
|
2023 |
2,645,154 | 6,428,133 | 1,185,615 | 1,895,028 | 384 | 245 | 44,529 | 95,856 | ||||||||||||||||||||||||
|
2022 |
3,432,069 | 4,379,251 | 1,556,154 | 1,728,265 | 192 | 179 | 90,931 | 153,485 | ||||||||||||||||||||||||
|
2021 |
3,607,608 | 4,159,676 | 1,609,146 | 1,732,948 | 132 | 150 | 121,051 | 214,632 | ||||||||||||||||||||||||
|
2020 |
898,789 | 649,625 | 549,256 | 423,072 | 75 | 107 | (5,595 | ) | 18,546 | |||||||||||||||||||||||
|
(1) |
|
|
(2) |
For 2024 the values included in the column for the compensation actually paid to our PEO and the average compensation actually paid to our Non-PEO NEOs reflect the following adjustments to the values included in column (b) and column (d), respectively: |
|
|
2024 |
|||||
|
Summary Compensation Table Total for PEO (column (b)) |
$ | 3,868,045 | ||||
| - |
aggregate change in actuarial present value of pension benefits |
- | ||||
|
+ |
service cost of pension benefits |
- | ||||
|
+ |
prior service cost of pension benefits |
- | ||||
| - |
SCT "Stock Awards" column value |
(1,100,016 | ) | |||
| - |
SCT "Option Awards" column value |
- | ||||
|
+ |
year-end fair value of equity awards granted in the covered year that are outstanding and unvested as of the covered year-end |
541,103 | ||||
|
+/- |
year-over-year change in fair value of equity awards granted in prior years that are outstanding and unvested as of the covered year-end |
(931,975 | ) | |||
|
+ |
vesting date fair value of equity awards granted and vested in the covered year |
- | ||||
|
+/- |
year-over-year change in fair value of equity awards granted in prior years that vested in the covered year-end |
(2,722,112 | ) | |||
| - |
fair value as of prior-year end of equity awards granted in prior years that failed to vest in the covered year |
- | ||||
|
+ |
dollar value of dividends/earnings paid on equity awards in the covered year |
- | ||||
|
Compensation Actually Paid to PEO (column (c)) |
$ | (344,956 | ) | |||
|
Non PEO Named Executive Officers |
2024 |
|||||
|
Summary Compensation Table Total for Non PEO NEOs (column (d)) |
$ | 1,384,597 | ||||
| - |
aggregate change in actuarial present value of pension benefits |
- | ||||
|
+ |
service cost of pension benefits |
- | ||||
|
+ |
prior service cost of pension benefits |
- | ||||
| - |
SCT "Stock Awards" column value |
(318,800 | ) | |||
| - |
SCT "Option Awards" column value |
- | ||||
|
+ |
year-end fair value of equity awards granted in the covered year that are outstanding and unvested as of the covered year-end |
156,819 | ||||
|
+/- |
year-over-year change in fair value of equity awards granted in prior years that are outstanding and unvested as of the covered year-end |
(328,648 | ) | |||
|
+ |
vesting date fair value of equity awards granted and vested in the covered year |
- | ||||
|
+/- |
year-over-year change in fair value of equity awards granted in prior years that vested in the covered year-end |
(344,670 | ) | |||
| - |
fair value as of prior-year end of equity awards granted in prior years that failed to vest in the covered year |
- | ||||
|
+ |
dollar value of dividends/earnings paid on equity awards in the covered year |
- | ||||
|
Compensation Actually Paid to Non PEO NEOs (column (e)) |
$ | 549,298 | ||||
|
(3) |
For each of 2024, 2023, 2022, 2021 and 2020, total shareholder retufor the Company and the peer group was calculated as the cumulative total shareholder retubased on a deemed fixed investment of |
|
(4) |
Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") (computed without respect to any Last-In-First-Out ("LIFO") inventory adjustments) is used to calculate the incentives for our most senior executive officers. |
Pay Versus Performance Relationship Descriptions
The following graphs provide descriptions of the relationships between certain figures included in the Pay Versus Performance table for each of 2024, 2023, 2022, 2021 and 2020, including: (a) a comparison between our cumulative total shareholder retuand the cumulative total shareholder retuof our
|
(a) |
During 2020, the COVID-19 pandemic caused a significant reduction in the Company's EBITDA. Under the terms of the Senior Manager Cash Incentive Plan, the named executive officers would not have received a payment under the Senior Manager Cash Incentive Plan in 2020, as the Company's EBITDA did not exceed 5% of average accounts receivable, inventory and fixed assets. Recognizing the extraordinary efforts of the named executive officers during the COVID-19 pandemic, and their willingness to forego salary and participation in certain benefit plans during 2020, and to encourage EBITDA generation during the second half of 2020, the Board modified the terms of the Senior Manager Cash Incentive Plan for named executive officers, for 2020 only. The modification provided for the prorated calculation of incentives based on the EBITDA generated from |
The following table lists all of the financial performance measures that we use to link the compensation actually paid to our NEOs for fiscal 2024 to Company performance:
|
EBITDA (1) |
|
(1) |
EBITDA is computed as Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") (computed without respect to any Last-In-First-Out ("LIFO") inventory adjustments. |
2024 DIRECTOR COMPENSATION
The following table summarizes compensation paid to our Directors (other than our NEOs) in 2024:
|
|
Fees and Salary Earned or Paid in Cash ($) |
Stock Awards ( |
Option Awards ( |
Non-Equity Incentive Plan Compensation ( |
Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) |
All Other Compensation ( |
Total ($) |
|||||||||||||||||||||
|
|
145,000 | 110,000 | - | - | - | - | 255,000 | |||||||||||||||||||||
|
|
125,000 | 110,000 | - | - | - | - | 235,000 | |||||||||||||||||||||
|
|
130,000 | 110,000 | - | - | - | - | 240,000 | |||||||||||||||||||||
|
|
135,000 | 110,000 | - | - | - | - | 245,000 | |||||||||||||||||||||
|
|
110,000 | 110,000 | - | - | - | - | 220,000 | |||||||||||||||||||||
|
|
110,000 | 110,000 | - | - | - | - | 220,000 | |||||||||||||||||||||
|
|
360,000 | - | - | 303,604 | - | 21,349 | 684,953 | |||||||||||||||||||||
|
(1) |
The amounts shown do not reflect compensation actually received by the non-employee Director. The amounts shown in this column are the grant date fair values for these restricted stock awards calculated in accordance with ASC Topic 718. The fair value is determined on the closing price of our Common Stock on the grant date. One-third of the restricted stock vest on each |
|
(2) |
The non-employee Directors had no option awards outstanding as of |
|
(3) |
Represents amount earned by the director employee under our Senior Manager Cash Incentive Plan. |
|
(4) |
Compensation reported in this column for 2024 for |
During 2024, each Director who was not one of our employees received a
Each non-employee Director, within five years of joining the Board, is required to own Common Stock with a value equal to five times the annual cash retainer. Actual shares owned and restricted stock units that vest upon the Director's retirement from the Board are counted toward the ownership requirement. The Compensation Committee reviews shareholdings on an annual basis to determine whether non-management directors are meeting these requirements. As of
The Compensation Committee approved the grant of 1,675 time-based restricted stock to each non-employee Director then serving, effective
EQUITY COMPENSATION PLAN INFORMATION
The following table provides information as of
|
Plan Category |
Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) |
Weighted-average exercise price of outstanding options, warrants and rights (b) |
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) |
|||||||||
|
Equity compensation plans approved by security holders |
697,943 | $ | - | 299,802 | ||||||||
|
Equity compensation plans not approved by security holders |
- | - | - | |||||||||
|
Totals |
697,943 | $ | - | 299,802 | ||||||||
RELATED PARTY TRANSACTIONS
We have adopted a written policy for the review of transactions with related persons. The policy generally requires review, approval or ratification of transactions involving amounts exceeding
With respect to 2024,
With respect to 2024,
The relationships described above has been reviewed and ratified in accordance with our policy for review of transactions with related persons.
AUDIT COMMITTEE REPORT
The purpose of the
Management continued to review and enhance the internal control evaluation process and the
As part of fulfilling its responsibilities, the
Based upon the
This report is submitted on behalf of the members of the
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Company has selected
Audit Fees. Aggregate fees for professional services rendered by
Audit-Related Fees. Aggregate fees for assurance and related services by
Tax Fees. Aggregate fees for federal and state tax services rendered by
All Other Fees. There were no other fees paid to
Pre-Approval Policy. All services listed above were pre-approved by the
PROPOSAL TWO
RATIFICATION OF THE SELECTION OF
THE COMPANY'S INDEPENDENT AUDITORS
Shareholder ratification of the selection of
The proposal regarding the ratification of
The Board recommends a vote "FOR" the ratification of the selection of
the Company's independent auditors for the year ending
PROPOSAL THREE
ADVISORY VOTE ON NAMED EXECUTIVE OFFICER COMPENSATION
As required by Section 14A(a)(1) under the Exchange Act, shareholders are entitled to an advisory vote at the Annual Meeting on the compensation of the Company's named executive officers as disclosed in this Proxy Statement. We are currently conducting say-on-pay votes every year, and expect to hold the next say-on-pay vote in connection with our 2026 Annual Meeting, subject to the outcome of the vote on Proposal Three. Our shareholders supported the annual frequency of our say-on-pay vote as their preference based on the results of the advisory say-on-pay frequency vote held at our 2023 Annual Meeting.
As described more fully in the Compensation Discussion and Analysis section of this Proxy Statement, the Company's executive compensation program is designed to support our long-term business strategy and link our executives' interests with those of our shareholders. We designed the compensation program to, among other things, provide incentives for executives to help us achieve business objectives and give the Compensation Committee the flexibility necessary to reward executives for achieving such objectives.
Accordingly, shareholders are being asked to approve the following resolution at the Annual Meeting:
"RESOLVED, that the compensation paid to the Company's named executive officers, as disclosed pursuant to the compensation disclosure rules of the
As an advisory vote, the shareholder vote on named executive officer compensation is not binding on the Company or the Board. Although the shareholder vote on executive compensation is not binding on the Company, the Board and the Compensation Committee will consider the outcome of the vote in establishing compensation philosophy and making future compensation decisions.
The proposal regarding the resolution approving named executive officer compensation requires the affirmative vote of a majority of the holders of the shares of Common Stock having voting power present or by proxy at the Annual Meeting. As a result, abstentions will have the same effect as a vote cast against the proposal, but broker non-votes will have no impact on the outcome of this proposal.
The Board recommends a vote "FOR" the approval, on an advisory basis, of the compensation of the named
executive officers as disclosed pursuant to the compensation disclosure rules of the
Discussion and Analysis, compensation tables and narrative discussion in this proxy statement.
INCORPORATION BY REFERENCE
To the extent that this proxy statement is incorporated by reference into any other filing by the Company under the Securities Act of 1933 or the Exchange Act, the sections of this Proxy Statement entitled "Compensation Committee Report" and "Audit Committee Report" will not be deemed incorporated, unless specifically provided otherwise in such filing.
Information on our website is not incorporated by reference in and does not form a part of this proxy statement.
OTHER MATTERS
SHAREHOLDER PROPOSALS
The deadline for shareholders to submit proposals to be considered for inclusion in the Proxy Statement for the 2026 Annual Meeting of Shareholders is
Shareholder nominations of a person for possible election as a Director for our 2026 Annual Meeting of Shareholders must be received by the Company not later than
Proxies appointed by management will use their discretionary authority to vote the shares they represent as the Board may recommend at our 2026 Annual Meeting of Shareholders if a shareholder raises a proposal which is not to be included in our proxy materials for such meeting and we do not receive proper notice of such proposal at our principal executive offices by
In addition to satisfying the requirements under our Amended and Restated Code of Regulations, to comply with the universal proxy rules, shareholders who intend to solicit proxies in support of director nominees other than the Company's nominees must provide notice that sets forth any additional information required by Rule 14a-19 under the Exchange Act, which notice must be postmarked or transmitted electronically to the Company at our principal executive offices no later than 60 calendar days prior to the first anniversary date of the Annual Meeting (for the 2026 Annual Meeting of Shareholders,
Any such proposals should be sent in care of the Corporate Secretary at our principal executive offices.
ANNUAL REPORT
Our Annual Report for the year ended
SHAREHOLDERS SHARING THE SAME ADDRESS
To the extent we deliver paper copies of our Annual Report, Notice of Annual Meeting or Proxy Statement, as applicable, the
We will promptly deliver, upon oral or written request, a separate copy of our Annual Report, Notice of Annual Meeting or Proxy Statement to any shareholder residing at the same address as another shareholder and currently receiving only one copy of such proxy materials who wishes to receive his or her own copy. Similarly, multiple shareholders residing at the same residence that are currently receiving separate copies of our Annual Report, Notice of Annual Meeting or Proxy Statement may request that a single copy of such proxy materials be delivered. Requests should be directed to our Corporate Secretary by phone at (216) 292-3800 or by mail to
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
FOR THE SHAREHOLDER MEETING TO BE HELD ON
This Proxy Statement is available free of charge on the "Investors" section of our website through the "Proxy Statements" link at the following cookie-free site (olysteel.com/investor-relations/proxy-statements/). Our Annual Report for the year ended December31, 2024 is available free of charge on the "Investors" section of our website through the "Annual Reports" link and at the following cookie-free site (olysteel.com/annual-reports/).
|
By Order of the Board of Directors |
|
|
/s/ |
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|
|
Secretary |
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Attachments
Disclaimer
Proxy Statement (Form DEF 14A)
Proxy Statement (Form DEF 14A)
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