Page 49 - Proxy Statement - 2020

Considerations Regarding 2019 Compensation / Compensation Discussion and Analysis

Considerations Regarding 2019 Compensation

The following chart summarizes the target compensation in our 2019 executive compensation program:

Pay Component Summary
Base Salary • At the February 2019 meeting, the Committee reviewed competitive market data and individual
performance evaluations. Increases were effective March 1, 2019 for all NEOs.
Target Annual • Our CEO’s target incentive for 2019 was 130% of base earnings. For other NEOs’ target incentives for
Cash Incentives 2019 were 70% to 80% of base earnings.
• Our shareholders in 2016 approved a new Executive Cash Incentive Plan that fixed the bonus
amounts based on certain objective criteria and allowed the Committee to reduce the award based
on enumerated factors in the plan.
• Our CEO is required to invest a minimum of 35% of his annual cash bonus into stock units, which are
required to be held generally for a period of three years.
• Other NEOs are required to invest a minimum of 20% of their annual cash bonus into stock units,
which are held generally for a period of three years.
Long-Term • Our LTI structure consists of PSUs and performance-based RSUs.
Incentives • The LTI awards for NEOs in 2019 were weighted 55% PSUs and 45% RSUs. The LTI grant size is
based on competitive market data.
• PSU awards in 2019 are earned based on achievement of performance levels, with 33% based on
three-year cumulative Sales Growth and 67% based on three-year cumulative adjusted EBITDA
performance. The Company’s relative TSR ranking compared to the S&P 500 provides a modifier to
the award up to 20%.
• RSU awards to NEOs in 2019 are subject to the achievement of one-year adjusted EBITDA
performance.

Total Compensation The Committee uses the size-adjusted 50th percentile of our Compensation Peer Group as a guide in
setting the target for the total compensation opportunity, but considers a variety of factors in setting
compensation, including the short-term and longer-term performance and leadership characteristics of the
executive, and may vary materially. Overall, the Committee believes targeted compensation should be
more heavily weighted on variable “at-risk” compensation and longer-term components.

The Committee approved the following actual compensation items in February 2019:

2019 Base Salary
The Committee determines base salaries for the NEOs and other executives based on a number of factors, including but not limited to,
market data, individual performance, the Company’s performance, internal pay equity, the advice of the Committee’s independent
compensation consultant, management recommendations (except for the CEO), and, for the CEO, the Committee’s assessment of
Mr. Nye’s performance. Based on these factors, the Committee approved the following increases in base salary.
• Mr. Nye: 4.5% increase, based on his excellent achievements during his CEO tenure, and specifically his performance in 2019.
• Other NEOs: approximately 3.3% to 7.4% increases, based on a review of competitive market data and individual performance
evaluations; Mr. LaTorre received an 18.8% increase in connection with his promotion to Senior Vice President.
2019 2018
NEO Base Salary Base Salary
C. Howard Nye $1,150,000 $1,100,000
James A. J. Nickolas $ 525,000 $ 488,800
Roselyn R. Bar $ 570,000 $ 542,500
Craig M. LaTorre* $ 475,000 $ 400,000
Daniel L. Grant $ 396,500 $ 384,000
* NEO base salaries were increased effective March 1, 2019 with the exception of Mr. LaTorre whose base salary was effective as of April 1, 2019.

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